Exhibit 3.1
CERTIFICATE OF DESIGNATIONS
OF
FIXED RATE CUMULATIVE PERPETUAL PREFERRED STOCK, SERIES B
OF
WINTRUST FINANCIAL CORPORATION
Wintrust Financial Corporation, a corporation organized and existing under the laws of the
State of Illinois (the
Corporation
), in accordance with the provisions of Section 6.10 of
the Illinois Business Corporation Act, as amended, does hereby certify:
The board of directors of the Corporation (the
Board of Directors
) or an applicable
committee of the Board of Directors, in accordance with the Articles of Incorporation of the
Corporation (the Articles of Incorporation), the Corporations by-laws and applicable law,
adopted the following resolution on December 11, 2008 creating a series of 250,000 shares of
Preferred Stock of the Corporation designated as
Fixed Rate Cumulative Perpetual Preferred
Stock, Series B
.
RESOLVED
, that pursuant to the provisions of the Articles of Incorporation, the bylaws of the
Corporation and applicable law, a series of Preferred Stock, no par value per share, of the
Corporation be and hereby is created, and that the designation and number of shares of such series,
and the voting and other powers, preferences and relative, participating, optional or other rights,
and the qualifications, limitations and restrictions thereof, of the shares of such series, are as
follows:
Part 1.
Designation and Number of Shares
. There is hereby created out of the
authorized and unissued shares of preferred stock of the Corporation a series of preferred stock
designated as the Fixed Rate Cumulative Perpetual Preferred Stock, Series B (the
Designated
Preferred Stock
). The authorized number of shares of Designated Preferred Stock shall be
250,000.
Part 2.
Standard Provisions
. The Standard Provisions contained in Annex A attached
hereto are incorporated herein by reference in their entirety and shall be deemed to be a part of
this Certificate of Designations to the same extent as if such provisions had been set forth in
full herein.
Part 3.
Definitions
. The following terms are used in this Certificate of Designations
(including the Standard Provisions in Annex A hereto) as defined below:
(a)
Common Stock
means the common stock, no par value per share, of the Corporation.
(b)
Dividend Payment Date
means February 15, May 15, August 15 and November 15 of
each year.
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(c)
Junior Stock
means the Common Stock, the Corporations Junior Serial Preferred
Stock A, and any other class or series of stock of the Corporation the terms of which expressly
provide that it ranks junior to Designated Preferred Stock as to dividend rights and/or as to
rights on liquidation, dissolution or winding up of the Corporation.
(d)
Liquidation Amount
means $1,000 per share of Designated Preferred Stock.
(e)
Minimum Amount
means $62,500,000.
(f)
Parity Stock
means any class or series of stock of the Corporation (other than
Designated Preferred Stock) the terms of which do not expressly provide that such class or series
will rank senior or junior to Designated Preferred Stock as to dividend rights and/or as to rights
on liquidation, dissolution or winding up of the Corporation (in each case without regard to
whether dividends accrue cumulatively or non-cumulatively). Without limiting the foregoing, Parity
Stock shall include the Corporations 8.00% Non-Cumulative Perpetual Convertible Preferred Stock,
Series A.
(g)
Signing Date
means the Original Issue Date.
Part 4.
Certain Voting Matters
. Holders of shares of Designated Preferred Stock will
be entitled to one vote for each such share on any matter on which holders of Designated Preferred
Stock are entitled to vote, including any action by written consent.
[
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The undersigned corporation has caused this statement to be signed by a duly authorized
officer, who affirms, under penalty of perjury, that the facts set forth herein are true. All
signatures must be in
BLACK INK.
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WINTRUST FINANCIAL CORPORATION
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By:
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/s/ David A. Dykstra
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Name: David A. Dykstra
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Title: Senior Executive Vice President, Chief
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Operating Officer and Secretary
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ANNEX A
STANDARD PROVISIONS
Section 1.
General Matters
. Each share of Designated Preferred Stock shall be
identical in all respects to every other share of Designated Preferred Stock. The Designated
Preferred Stock shall be perpetual, subject to the provisions of Section 5 of these Standard
Provisions that form a part of the Certificate of Designations. The Designated Preferred Stock
shall rank equally with Parity Stock and shall rank senior to Junior Stock with respect to the
payment of dividends and the distribution of assets in the event of any dissolution, liquidation or
winding up of the Corporation.
Section 2.
Standard Definitions
. As used herein with respect to Designated Preferred
Stock:
(a)
Applicable Dividend Rate
means (i) during the period from the Original Issue
Date to, but excluding, the first day of the first Dividend Period commencing on or after the fifth
anniversary of the Original Issue Date, 5% per annum and (ii) from and after the first day of the
first Dividend Period commencing on or after the fifth anniversary of the Original Issue Date, 9%
per annum.
(b)
Appropriate Federal Banking Agency
means the appropriate Federal banking
agency with respect to the Corporation as defined in Section 3(q) of the Federal Deposit Insurance
Act (12 U.S.C. Section 1813(q)), or any successor provision.
(c)
Business Combination
means a merger, consolidation, statutory share exchange or
similar transaction that requires the approval of the Corporations stockholders.
(d)
Business Day
means any day except Saturday, Sunday and any day on which banking
institutions in the State of New York generally are authorized or required by law or other
governmental actions to close.
(e)
Bylaws
means the bylaws of the Corporation, as they may be amended from time to
time.
(f)
Certificate of Designations
means the Certificate of Designations or comparable
instrument relating to the Designated Preferred Stock, of which these Standard Provisions form a
part, as it may be amended from time to time.
(g)
Charter
means the Corporations certificate or articles of incorporation,
articles of association, or similar organizational document.
(h)
Dividend Period
has the meaning set forth in Section 3(a).
(i)
Dividend Record Date
has the meaning set forth in Section 3(a).
(j)
Liquidation Preference
has the meaning set forth in Section 4(a).
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(k)
Original Issue Date
means the date on which shares of Designated Preferred Stock
are first issued.
(l)
Preferred Director
has the meaning set forth in Section 7(b).
(m)
Preferred Stock
means any and all series of preferred stock of the Corporation,
including the Designated Preferred Stock.
(n)
Qualified Equity Offering
means the sale and issuance for cash by the
Corporation to persons other than the Corporation or any of its subsidiaries after the Original
Issue Date of shares of perpetual Preferred Stock, Common Stock or any combination of such stock,
that, in each case, qualify as and may be included in Tier 1 capital of the Corporation at the time
of issuance under the applicable risk-based capital guidelines of the Corporations Appropriate
Federal Banking Agency (other than any such sales and issuances made pursuant to agreements or
arrangements entered into, or pursuant to financing plans which were publicly announced, on or
prior to October 13, 2008).
(o)
Share Dilution Amount
has the meaning set forth in Section 3(b).
(p)
Standard Provisions
mean these Standard Provisions that form a part of the
Certificate of Designations relating to the Designated Preferred Stock.
(q)
Successor Preferred Stock
has the meaning set forth in Section 5(a).
(r)
Voting Parity Stock
means, with regard to any matter as to which the holders of
Designated Preferred Stock are entitled to vote as specified in Sections 7(a) and 7(b) of these
Standard Provisions that form a part of the Certificate of Designations, any and all series of
Parity Stock upon which like voting rights have been conferred and are exercisable with respect to
such matter.
Section 3.
Dividends
.
(a)
Rate.
Holders of Designated Preferred Stock shall be entitled to receive, on each
share of Designated Preferred Stock if, as and when declared by the Board of Directors or any duly
authorized committee of the Board of Directors, but only out of assets legally available therefor,
cumulative cash dividends with respect to each Dividend Period (as defined below) at a rate per
annum equal to the Applicable Dividend Rate on (i) the Liquidation Amount per share of Designated
Preferred Stock and (ii) the amount of accrued and unpaid dividends for any prior Dividend Period
on such share of Designated Preferred Stock, if any. Such dividends shall begin to accrue and be
cumulative from the Original Issue Date, shall compound on each subsequent Dividend Payment Date
(
i.e.
, no dividends shall accrue on other dividends unless and until the first Dividend Payment
Date for such other dividends has passed without such other dividends having been paid on such
date) and shall be payable quarterly in arrears on each Dividend Payment Date, commencing with the
first such Dividend Payment Date to occur at least 20 calendar days after the Original Issue Date.
In the event that any Dividend Payment Date would otherwise fall on a day that is not a Business
Day, the dividend payment due on that date will be postponed to the next day that is a Business Day
and no additional dividends will accrue as a result of that postponement. The period from and
including any Dividend Payment Date to, but
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excluding, the next Dividend Payment Date is a
Dividend Period
, provided that the
initial Dividend Period shall be the period from and including the Original Issue Date to, but
excluding, the next Dividend Payment Date.
Dividends that are payable on Designated Preferred Stock in respect of any Dividend Period
shall be computed on the basis of a 360-day year consisting of twelve 30-day months. The amount of
dividends payable on Designated Preferred Stock on any date prior to the end of a Dividend Period,
and for the initial Dividend Period, shall be computed on the basis of a 360-day year consisting of
twelve 30-day months, and actual days elapsed over a 30-day month.
Dividends that are payable on Designated Preferred Stock on any Dividend Payment Date will be
payable to holders of record of Designated Preferred Stock as they appear on the stock register of
the Corporation on the applicable record date, which shall be the 15th calendar day immediately
preceding such Dividend Payment Date or such other record date fixed by the Board of Directors or
any duly authorized committee of the Board of Directors that is not more than 60 nor less than 10
days prior to such Dividend Payment Date (each, a
Dividend Record Date
). Any such day
that is a Dividend Record Date shall be a Dividend Record Date whether or not such day is a
Business Day.
Holders of Designated Preferred Stock shall not be entitled to any dividends, whether payable
in cash, securities or other property, other than dividends (if any) declared and payable on
Designated Preferred Stock as specified in this Section 3 (subject to the other provisions of the
Certificate of Designations).
(b)
Priority of Dividends
. So long as any share of Designated Preferred Stock remains
outstanding, no dividend or distribution shall be declared or paid on the Common Stock or any other
shares of Junior Stock (other than dividends payable solely in shares of Common Stock) or Parity
Stock, subject to the immediately following paragraph in the case of Parity Stock, and no Common
Stock, Junior Stock or Parity Stock shall be, directly or indirectly, purchased, redeemed or
otherwise acquired for consideration by the Corporation or any of its subsidiaries unless all
accrued and unpaid dividends for all past Dividend Periods, including the latest completed Dividend
Period (including, if applicable as provided in Section 3(a) above, dividends on such amount), on
all outstanding shares of Designated Preferred Stock have been or are contemporaneously declared
and paid in full (or have been declared and a sum sufficient for the payment thereof has been set
aside for the benefit of the holders of shares of Designated Preferred Stock on the applicable
record date). The foregoing limitation shall not apply to (i) redemptions, purchases or other
acquisitions of shares of Common Stock or other Junior Stock in connection with the administration
of any employee benefit plan in the ordinary course of business (including purchases to offset the
Share Dilution Amount (as defined below) pursuant to a publicly announced repurchase plan) and
consistent with past practice,
provided
that any purchases to offset the Share Dilution Amount
shall in no event exceed the Share Dilution Amount; (ii) purchases or other acquisitions by a
broker-dealer subsidiary of the Corporation solely for the purpose of market-making, stabilization
or customer facilitation transactions in Junior Stock or Parity Stock in the ordinary course of its
business; (iii) purchases by a broker-dealer subsidiary of the Corporation of capital stock of the
Corporation for resale pursuant to an offering by the Corporation of such capital stock
underwritten by such broker-dealer subsidiary; (iv) any dividends or distributions of rights or
Junior Stock in connection with a stockholders
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rights plan or any redemption or repurchase of rights pursuant to any stockholders rights
plan; (v) the acquisition by the Corporation or any of its subsidiaries of record ownership in
Junior Stock or Parity Stock for the beneficial ownership of any other persons (other than the
Corporation or any of its subsidiaries), including as trustees or custodians; and (vi) the exchange
or conversion of Junior Stock for or into other Junior Stock or of Parity Stock for or into other
Parity Stock (with the same or lesser aggregate liquidation amount) or Junior Stock, in each case,
solely to the extent required pursuant to binding contractual agreements entered into prior to the
Signing Date or any subsequent agreement for the accelerated exercise, settlement or exchange
thereof for Common Stock.
Share Dilution Amount
means the increase in the number of
diluted shares outstanding (determined in accordance with generally accepted accounting principles
in the United States, and as measured from the date of the Corporations consolidated financial
statements most recently filed with the Securities and Exchange Commission prior to the Original
Issue Date) resulting from the grant, vesting or exercise of equity-based compensation to employees
and equitably adjusted for any stock split, stock dividend, reverse stock split, reclassification
or similar transaction.
When dividends are not paid (or declared and a sum sufficient for payment thereof set aside
for the benefit of the holders thereof on the applicable record date) on any Dividend Payment Date
(or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment
Dates, on a dividend payment date falling within a Dividend Period related to such Dividend Payment
Date) in full upon Designated Preferred Stock and any shares of Parity Stock, all dividends
declared on Designated Preferred Stock and all such Parity Stock and payable on such Dividend
Payment Date (or, in the case of Parity Stock having dividend payment dates different from the
Dividend Payment Dates, on a dividend payment date falling within the Dividend Period related to
such Dividend Payment Date) shall be declared
pro rata
so that the respective amounts of such
dividends declared shall bear the same ratio to each other as all accrued and unpaid dividends per
share on the shares of Designated Preferred Stock (including, if applicable as provided in Section
3(a) above, dividends on such amount) and all Parity Stock payable on such Dividend Payment Date
(or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment
Dates, on a dividend payment date falling within the Dividend Period related to such Dividend
Payment Date) (subject to their having been declared by the Board of Directors or a duly authorized
committee of the Board of Directors out of legally available funds and including, in the case of
Parity Stock that bears cumulative dividends, all accrued but unpaid dividends) bear to each other.
If the Board of Directors or a duly authorized committee of the Board of Directors determines not
to pay any dividend or a full dividend on a Dividend Payment Date, the Corporation will provide
written notice to the holders of Designated Preferred Stock prior to such Dividend Payment Date.
Subject to the foregoing, and not otherwise, such dividends (payable in cash, securities or
other property) as may be determined by the Board of Directors or any duly authorized committee of
the Board of Directors may be declared and paid on any securities, including Common Stock and other
Junior Stock, from time to time out of any funds legally available for such payment, and holders of
Designated Preferred Stock shall not be entitled to participate in any such dividends.
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Section 4.
Liquidation Rights
.
(a)
Voluntary or Involuntary Liquidation
. In the event of any liquidation,
dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary,
holders of Designated Preferred Stock shall be entitled to receive for each share of Designated
Preferred Stock, out of the assets of the Corporation or proceeds thereof (whether capital or
surplus) available for distribution to stockholders of the Corporation, subject to the rights of
any creditors of the Corporation, before any distribution of such assets or proceeds is made to or
set aside for the holders of Common Stock and any other stock of the Corporation ranking junior to
Designated Preferred Stock as to such distribution, payment in full in an amount equal to the sum
of (i) the Liquidation Amount per share and (ii) the amount of any accrued and unpaid dividends
(including, if applicable as provided in Section 3(a) above, dividends on such amount), whether or
not declared, to the date of payment (such amounts collectively, the
Liquidation
Preference
).
(b)
Partial Payment
. If in any distribution described in Section 4(a) above the
assets of the Corporation or proceeds thereof are not sufficient to pay in full the amounts payable
with respect to all outstanding shares of Designated Preferred Stock and the corresponding amounts
payable with respect of any other stock of the Corporation ranking equally with Designated
Preferred Stock as to such distribution, holders of Designated Preferred Stock and the holders of
such other stock shall share ratably in any such distribution in proportion to the full respective
distributions to which they are entitled.
(c)
Residual Distributions
. If the Liquidation Preference has been paid in full to
all holders of Designated Preferred Stock and the corresponding amounts payable with respect of any
other stock of the Corporation ranking equally with Designated Preferred Stock as to such
distribution has been paid in full, the holders of other stock of the Corporation shall be entitled
to receive all remaining assets of the Corporation (or proceeds thereof) according to their
respective rights and preferences.
(d)
Merger, Consolidation and Sale of Assets Not Liquidation
. For purposes of this
Section 4, the merger or consolidation of the Corporation with any other corporation or other
entity, including a merger or consolidation in which the holders of Designated Preferred Stock
receive cash, securities or other property for their shares, or the sale, lease or exchange (for
cash, securities or other property) of all or substantially all of the assets of the Corporation,
shall not constitute a liquidation, dissolution or winding up of the Corporation.
Section 5.
Redemption
.
(a)
Optional Redemption
. Except as provided below, the Designated Preferred Stock may
not be redeemed prior to the first Dividend Payment Date falling on or after the third anniversary
of the Original Issue Date. On or after the first Dividend Payment Date falling on or after the
third anniversary of the Original Issue Date, the Corporation, at its option, subject to the
approval of the Appropriate Federal Banking Agency, may redeem, in whole or in part, at any time
and from time to time, out of funds legally available therefor, the shares of Designated Preferred
Stock at the time outstanding, upon notice given as provided in Section 5(c) below, at a redemption
price equal to the sum of (i) the Liquidation Amount per share and (ii) except as
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otherwise provided below, any accrued and unpaid dividends (including, if applicable as
provided in Section 3(a) above, dividends on such amount) (regardless of whether any dividends are
actually declared) to, but excluding, the date fixed for redemption.
Notwithstanding the foregoing, prior to the first Dividend Payment Date falling on or after
the third anniversary of the Original Issue Date, the Corporation, at its option, subject to the
approval of the Appropriate Federal Banking Agency, may redeem, in whole or in part, at any time
and from time to time, the shares of Designated Preferred Stock at the time outstanding, upon
notice given as provided in Section 5(c) below, at a redemption price equal to the sum of (i) the
Liquidation Amount per share and (ii) except as otherwise provided below, any accrued and unpaid
dividends (including, if applicable as provided in Section 3(a) above, dividends on such amount)
(regardless of whether any dividends are actually declared) to, but excluding, the date fixed for
redemption;
provided
that (x) the Corporation (or any successor by Business Combination) has
received aggregate gross proceeds of not less than the Minimum Amount (plus the Minimum Amount as
defined in the relevant certificate of designations for each other outstanding series of preferred
stock of such successor that was originally issued to the United States Department of the Treasury
(the
Successor Preferred Stock
) in connection with the Troubled Asset Relief Program
Capital Purchase Program) from one or more Qualified Equity Offerings (including Qualified Equity
Offerings of such successor), and (y) the aggregate redemption price of the Designated Preferred
Stock (and any Successor Preferred Stock) redeemed pursuant to this paragraph may not exceed the
aggregate net cash proceeds received by the Corporation (or any successor by Business Combination)
from such Qualified Equity Offerings (including Qualified Equity Offerings of such successor).
The redemption price for any shares of Designated Preferred Stock shall be payable on the
redemption date to the holder of such shares against surrender of the certificate(s) evidencing
such shares to the Corporation or its agent. Any declared but unpaid dividends payable on a
redemption date that occurs subsequent to the Dividend Record Date for a Dividend Period shall not
be paid to the holder entitled to receive the redemption price on the redemption date, but rather
shall be paid to the holder of record of the redeemed shares on such Dividend Record Date relating
to the Dividend Payment Date as provided in Section 3 above.
(b)
No Sinking Fund
. The Designated Preferred Stock will not be subject to any
mandatory redemption, sinking fund or other similar provisions. Holders of Designated Preferred
Stock will have no right to require redemption or repurchase of any shares of Designated Preferred
Stock.
(c)
Notice of Redemption
. Notice of every redemption of shares of Designated
Preferred Stock shall be given by first class mail, postage prepaid, addressed to the holders of
record of the shares to be redeemed at their respective last addresses appearing on the books of
the Corporation. Such mailing shall be at least 30 days and not more than 60 days before the date
fixed for redemption. Any notice mailed as provided in this Subsection shall be conclusively
presumed to have been duly given, whether or not the holder receives such notice, but failure duly
to give such notice by mail, or any defect in such notice or in the mailing thereof, to any holder
of shares of Designated Preferred Stock designated for redemption shall not affect the validity of
the proceedings for the redemption of any other shares of Designated Preferred Stock.
Notwithstanding the foregoing, if shares of Designated Preferred Stock are issued in
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book-entry form through The Depository Trust Corporation or any other similar facility, notice
of redemption may be given to the holders of Designated Preferred Stock at such time and in any
manner permitted by such facility. Each notice of redemption given to a holder shall state: (1)
the redemption date; (2) the number of shares of Designated Preferred Stock to be redeemed and, if
less than all the shares held by such holder are to be redeemed, the number of such shares to be
redeemed from such holder; (3) the redemption price; and (4) the place or places where certificates
for such shares are to be surrendered for payment of the redemption price.
(d)
Partial Redemption
. In case of any redemption of part of the shares of Designated
Preferred Stock at the time outstanding, the shares to be redeemed shall be selected either
pro
rata
or in such other manner as the Board of Directors or a duly authorized committee thereof may
determine to be fair and equitable. Subject to the provisions hereof, the Board of Directors or a
duly authorized committee thereof shall have full power and authority to prescribe the terms and
conditions upon which shares of Designated Preferred Stock shall be redeemed from time to time. If
fewer than all the shares represented by any certificate are redeemed, a new certificate shall be
issued representing the unredeemed shares without charge to the holder thereof.
(e)
Effectiveness of Redemption
. If notice of redemption has been duly given and if
on or before the redemption date specified in the notice all funds necessary for the redemption
have been deposited by the Corporation, in trust for the
pro rata
benefit of the holders of the
shares called for redemption, with a bank or trust company doing business in the Borough of
Manhattan, The City of New York, and having a capital and surplus of at least $500 million and
selected by the Board of Directors, so as to be and continue to be available solely therefor, then,
notwithstanding that any certificate for any share so called for redemption has not been
surrendered for cancellation, on and after the redemption date dividends shall cease to accrue on
all shares so called for redemption, all shares so called for redemption shall no longer be deemed
outstanding and all rights with respect to such shares shall forthwith on such redemption date
cease and terminate, except only the right of the holders thereof to receive the amount payable on
such redemption from such bank or trust company, without interest. Any funds unclaimed at the end
of three years from the redemption date shall, to the extent permitted by law, be released to the
Corporation, after which time the holders of the shares so called for redemption shall look only to
the Corporation for payment of the redemption price of such shares.
(f)
Status of Redeemed Shares
. Shares of Designated Preferred Stock that are
redeemed, repurchased or otherwise acquired by the Corporation shall revert to authorized but
unissued shares of Preferred Stock (
provided
that any such cancelled shares of Designated Preferred
Stock may be reissued only as shares of any series of Preferred Stock other than Designated
Preferred Stock).
Section 6.
Conversion
. Holders of Designated Preferred Stock shares shall have no
right to exchange or convert such shares into any other securities.
Section 7.
Voting Rights
.
(a)
General
. The holders of Designated Preferred Stock shall not have any voting
rights except as set forth below or as otherwise from time to time required by law.
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(b)
Preferred Stock Directors
. Whenever, at any time or times, dividends payable on
the shares of Designated Preferred Stock have not been paid for an aggregate of six quarterly
Dividend Periods or more, whether or not consecutive, the authorized number of directors of the
Corporation shall automatically be increased by two and the holders of the Designated Preferred
Stock shall have the right, with holders of shares of any one or more other classes or series of
Voting Parity Stock outstanding at the time, voting together as a class, to elect two directors
(hereinafter the
Preferred Directors
and each a
Preferred Director
) to fill
such newly created directorships at the Corporations next annual meeting of stockholders (or at a
special meeting called for that purpose prior to such next annual meeting) and at each subsequent
annual meeting of stockholders until all accrued and unpaid dividends for all past Dividend
Periods, including the latest completed Dividend Period (including, if applicable as provided in
Section 3(a) above, dividends on such amount), on all outstanding shares of Designated Preferred
Stock have been declared and paid in full at which time such right shall terminate with respect to
the Designated Preferred Stock, except as herein or by law expressly provided, subject to revesting
in the event of each and every subsequent default of the character above mentioned;
provided
that
it shall be a qualification for election for any Preferred Director that the election of such
Preferred Director shall not cause the Corporation to violate any corporate governance requirements
of any securities exchange or other trading facility on which securities of the Corporation may
then be listed or traded that listed or traded companies must have a majority of independent
directors. Upon any termination of the right of the holders of shares of Designated Preferred
Stock and Voting Parity Stock as a class to vote for directors as provided above, the Preferred
Directors shall cease to be qualified as directors, the term of office of all Preferred Directors
then in office shall terminate immediately and the authorized number of directors shall be reduced
by the number of Preferred Directors elected pursuant hereto. Any Preferred Director may be
removed at any time, with or without cause, and any vacancy created thereby may be filled, only by
the affirmative vote of the holders a majority of the shares of Designated Preferred Stock at the
time outstanding voting separately as a class together with the holders of shares of Voting Parity
Stock, to the extent the voting rights of such holders described above are then exercisable. If
the office of any Preferred Director becomes vacant for any reason other than removal from office
as aforesaid, the remaining Preferred Director may choose a successor who shall hold office for the
unexpired term in respect of which such vacancy occurred.
(c)
Class Voting Rights as to Particular Matters
. So long as any shares of Designated
Preferred Stock are outstanding, in addition to any other vote or consent of stockholders required
by law or by the Charter, the vote or consent of the holders of at least 66 2/3% of the shares of
Designated Preferred Stock at the time outstanding, voting as a separate class, given in person or
by proxy, either in writing without a meeting or by vote at any meeting called for the purpose,
shall be necessary for effecting or validating:
(i)
Authorization of Senior Stock
. Any amendment or alteration of the
Certificate of Designations for the Designated Preferred Stock or the Charter to authorize
or create or increase the authorized amount of, or any issuance of, any shares of, or any
securities convertible into or exchangeable or exercisable for shares of, any class or
series of capital stock of the Corporation ranking senior to Designated Preferred Stock with
respect to either or both the payment of dividends and/or the distribution of assets on any
liquidation, dissolution or winding up of the Corporation;
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(ii)
Amendment of Designated Preferred Stock
. Any amendment, alteration or
repeal of any provision of the Certificate of Designations for the Designated Preferred
Stock or the Charter (including, unless no vote on such merger or consolidation is required
by Section 7(c)(iii) below, any amendment, alteration or repeal by means of a merger,
consolidation or otherwise) so as to adversely affect the rights, preferences, privileges or
voting powers of the Designated Preferred Stock; or
(iii)
Share Exchanges, Reclassifications, Mergers and Consolidations
. Any
consummation of a binding share exchange or reclassification involving the Designated
Preferred Stock, or of a merger or consolidation of the Corporation with another corporation
or other entity, unless in each case (x) the shares of Designated Preferred Stock remain
outstanding or, in the case of any such merger or consolidation with respect to which the
Corporation is not the surviving or resulting entity, are converted into or exchanged for
preference securities of the surviving or resulting entity or its ultimate parent, and (y)
such shares remaining outstanding or such preference securities, as the case may be, have
such rights, preferences, privileges and voting powers, and limitations and restrictions
thereof, taken as a whole, as are not materially less favorable to the holders thereof than
the rights, preferences, privileges and voting powers, and limitations and restrictions
thereof, of Designated Preferred Stock immediately prior to such consummation, taken as a
whole;
provided, however
, that for all purposes of this Section 7(c), any increase in the amount of the
authorized Preferred Stock, including any increase in the authorized amount of Designated Preferred
Stock necessary to satisfy preemptive or similar rights granted by the Corporation to other persons
prior to the Signing Date, or the creation and issuance, or an increase in the authorized or issued
amount, whether pursuant to preemptive or similar rights or otherwise, of any other series of
Preferred Stock, or any securities convertible into or exchangeable or exercisable for any other
series of Preferred Stock, ranking equally with and/or junior to Designated Preferred Stock with
respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and
the distribution of assets upon liquidation, dissolution or winding up of the Corporation will not
be deemed to adversely affect the rights, preferences, privileges or voting powers, and shall not
require the affirmative vote or consent of, the holders of outstanding shares of the Designated
Preferred Stock.
(d)
Changes after Provision for Redemption
. No vote or consent of the holders of
Designated Preferred Stock shall be required pursuant to Section 7(c) above if, at or prior to the
time when any such vote or consent would otherwise be required pursuant to such Section, all
outstanding shares of the Designated Preferred Stock shall have been redeemed, or shall have been
called for redemption upon proper notice and sufficient funds shall have been deposited in trust
for such redemption, in each case pursuant to Section 5 above.
(e)
Procedures for Voting and Consents
. The rules and procedures for calling and
conducting any meeting of the holders of Designated Preferred Stock (including, without limitation,
the fixing of a record date in connection therewith), the solicitation and use of proxies at such a
meeting, the obtaining of written consents and any other aspect or matter with regard to such a
meeting or such consents shall be governed by any rules of the Board of Directors or any duly
authorized committee of the Board of Directors, in its discretion, may adopt from time to
A-12
time, which rules and procedures shall conform to the requirements of the Charter, the Bylaws,
and applicable law and the rules of any national securities exchange or other trading facility on
which Designated Preferred Stock is listed or traded at the time.
Section 8.
Record Holders
. To the fullest extent permitted by applicable law, the
Corporation and the transfer agent for Designated Preferred Stock may deem and treat the record
holder of any share of Designated Preferred Stock as the true and lawful owner thereof for all
purposes, and neither the Corporation nor such transfer agent shall be affected by any notice to
the contrary.
Section 9.
Notices
. All notices or communications in respect of Designated Preferred
Stock shall be sufficiently given if given in writing and delivered in person or by first class
mail, postage prepaid, or if given in such other manner as may be permitted in this Certificate of
Designations, in the Charter or Bylaws or by applicable law. Notwithstanding the foregoing, if
shares of Designated Preferred Stock are issued in book-entry form through The Depository Trust
Corporation or any similar facility, such notices may be given to the holders of Designated
Preferred Stock in any manner permitted by such facility.
Section 10.
No Preemptive Rights
. No share of Designated Preferred Stock shall have
any rights of preemption whatsoever as to any securities of the Corporation, or any warrants,
rights or options issued or granted with respect thereto, regardless of how such securities, or
such warrants, rights or options, may be designated, issued or granted.
Section 11.
Replacement Certificates
. The Corporation shall replace any mutilated
certificate at the holders expense upon surrender of that certificate to the Corporation. The
Corporation shall replace certificates that become destroyed, stolen or lost at the holders
expense upon delivery to the Corporation of reasonably satisfactory evidence that the certificate
has been destroyed, stolen or lost, together with any indemnity that may be reasonably required by
the Corporation.
Section 12.
Other Rights
. The shares of Designated Preferred Stock shall not have any
rights, preferences, privileges or voting powers or relative, participating, optional or other
special rights, or qualifications, limitations or restrictions thereof, other than as set forth
herein or in the Charter or as provided by applicable law.
A-13
Exhibit 3.2
AMENDED AND RESTATED CERTIFICATE OF DESIGNATIONS
OF
8.00% NON-CUMULATIVE PERPETUAL
CONVERTIBLE PREFERRED STOCK, SERIES A
OF
WINTRUST FINANCIAL CORPORATION
Pursuant to Section 6.10 of the
Illinois Business Corporation Act
The undersigned, David A. Dykstra, Senior Executive Vice President, Chief Operating Officer
and Secretary of Wintrust Financial Corporation, an Illinois corporation (the Corporation),
hereby certifies that, in accordance with Section 6.10 of the Illinois Business Corporation Act, as
amended (the IBCA), the Board of Directors of the Corporation (the Board of Directors) hereby
makes this Amended and Restated Certificate of Designations and hereby states and certifies that
pursuant to the authority conferred upon the Board of Directors by Article Four of the Amended and
Restated Articles of Incorporation of the Corporation, as amended (as such may be amended, modified
or restated from time to time, the Articles of Incorporation) and the duly adopted resolutions of
the Board of Directors, the Board of Directors duly adopted the following resolutions:
RESOLVED, that pursuant to Article Four of the Articles of Incorporation (which authorizes
20,000,000 shares of preferred stock, no par value (the Preferred Stock)), the Board of Directors
hereby fixes the powers, designations, preferences and relative, participating, optional and other
special rights, and the qualifications, limitations and restrictions, of a series of Preferred
Stock.
RESOLVED, that each share of such series of Preferred Stock shall rank equally in all respects
and shall be subject to the following provisions:
1.
Designation and Number
.
(a) The series of preferred stock shall be designated as the 8.00% Non-Cumulative
Perpetual Convertible Preferred Stock, Series A (the Series A Preferred Stock), no par value,
and the number of shares so designated shall be 50,000;
provided,
that, if the Corporation elects
to issue additional shares of Series A Preferred Stock after the date of this Certificate of
Designations, the Corporation may increase the number of shares so designated by the number of such
additional shares of Series A Preferred Stock with the prior approval by the holders of at least a
majority of the shares of the Series A Preferred Stock then outstanding and by filing the
appropriate document with the Secretary of State of the State of Illinois (the Illinois
Secretary);
provided, however
, that any additional shares of Series A Preferred Stock must be
deemed to form a single series with the Series A Preferred Stock issued pursuant to this
Certificate of Designations for U.S. federal income tax purposes. Each share of Series A Preferred
Stock shall be identical in all respects to every other share of Series A Preferred Stock, except
for the issue price, date of issuance, and, in some cases, the initial dividend payment date. The
number of authorized shares of Series A Preferred Stock may be reduced (but not below the number of
shares of Series A Preferred Stock then issued and outstanding) by further resolution duly adopted
by the Board of Directors and by filing the appropriate document with the Illinois Secretary; no
such reduction shall affect the due
authorization of any issued and outstanding shares of Series A Preferred Stock. The Series A
Preferred Stock is issuable in whole shares only.
(b) The Series A Preferred Stock shall have an issue price of, and a liquidation
preference (the Liquidation Preference) of, $1,000 per share and shall be perpetual, subject to
conversion in accordance with the terms set forth herein.
2.
Definitions
.
As used herein with respect to Series A Preferred Stock, the following terms shall have the
following meaning:
Applicable Conversion Price
at any given time means the price equal to $1,000 divided by the
Applicable Conversion Rate in effect at such time.
Applicable Conversion Rate
means the Conversion Rate in effect at any given time.
Business Day
means any day that is not Saturday or Sunday and that, in New York City, is not
a day on which banking institutions generally are authorized or obligated by law or executive order
to be closed.
Capital Stock
of any Person means any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in (however designated)
equity of such Person, including any preferred stock, excluding any debt securities convertible
into such equity.
Closing Price
of the Common Stock on any date of determination means:
(a) the closing sale price of the Common Stock (or, if no closing sale price
is reported, the last reported sale price of the Common Stock) on that date on the Nasdaq
Stock Market;
(b) if the Common Stock is not traded on the Nasdaq Stock Market on that
date, the closing sale price of the Common Stock (or, if no closing sale price is reported,
the last reported sale price of the Common Stock) on that date as reported in composite
transactions for the principal U.S. national or regional securities exchange or association
on which the Common Stock is traded;
(c) if the Common Stock is not traded on a U.S. national or regional
securities exchange or association on that date, the last quoted bid price per share on that
date in the over-the-counter market as reported by Pink Sheets LLC or similar organization;
or
(d) if the Common Stock is not so quoted by Pink Sheets LLC or a similar
organization on that date, as determined by a nationally recognized independent investment
banking firm retained by the Corporation for this purpose.
The Closing Price for any other share of Capital Stock shall be determined on a comparable
basis.
For purposes of this Certificate of Designations, all references herein to the Closing Price
and last reported sale price of the Common Stock on the Nasdaq Stock Market shall be such closing
sale price and last reported sale price as reflected on the website of the Nasdaq Stock Market
(http://www.nasdaq.com) and as reported by Bloomberg Professional Service;
provided
that in the
event that there is a discrepancy between the closing sale price or last reported sale price as
reflected on the website of the Nasdaq Stock Market and as reported by Bloomberg Professional
Service, the closing sale price and last reported sale price on the website of the Nasdaq Stock
Market shall govern.
Common Stock
means the common stock, no par value, of the Corporation.
2
Conversion Agent
shall mean Illinois Stock Transfer Company acting in its capacity as
conversion agent for the Series A Preferred Stock, and its successors and assigns or any other
conversion agent appointed by the Corporation.
Conversion Date
has the meaning set forth in Section 12(e)(ii).
Conversion Rate
means, with respect to each share of Series A Preferred Stock, 36.5230
shares of Common Stock, subject to adjustment as set forth in Section 13.
Current Market Price
of the Common Stock means the average Closing Price of the Common Stock
during the 10 consecutive Trading Day period ending on the Trading Day immediately preceding the
Ex-Dividend Date with respect to the issuance, dividend or distribution requiring such
computation. Notwithstanding the foregoing, whenever successive adjustments to the Conversion Rate
are called for pursuant to Section 13, such adjustments shall be made to the Current Market Price
as may be necessary or appropriate to effectuate the intent of Section 13 and to avoid unjust or
inequitable results as determined in good faith by the Board of Directors.
Distributed Assets
has the meaning set forth in Section 13(a)(iv).
Dividend Payment Date
has the meaning set forth in Section 3(a).
Dividend Period
means each period from, and including, a Dividend Payment Date (or with
respect to the first Dividend Period, the date of original issuance of the Series A Preferred
Stock) to, but excluding, the following Dividend Payment Date.
Dividend Threshold Amount
has the meaning set forth in Section 13(a)(v).
Exchange Act
means the Securities Exchange Act of 1934, as amended.
Exchange Property
has the meaning set forth in Section 10(a).
Ex-Dividend Date
, when used with respect to any issuance, dividend or distribution, means
the first date on which the shares of Common Stock trade on the applicable exchange or in the
applicable market, regular way, without the right to receive the relevant issuance, dividend or
distribution.
Expiration Date
has the meaning set forth in Section 13(a)(vi).
Expiration Time
has the meaning set forth in Section 13(a)(vi).
Fair Market Value
means the amount which a willing buyer would pay a willing seller in an
arms-length transaction as determined by the Board of Directors;
provided
,
however
, that any
determination of Fair Market Value required in connection with a Fundamental Transaction shall (1)
be made as of the Business Day immediately preceding the closing of such transaction and (2) if
made with respect to a publicly traded security, such determination shall be based on the average
of the midpoint of the intraday high and intraday low trading prices for such security on each of
the ten (10) consecutive trading days immediately preceding the date as of which such Fair Market
Value is determined.
Fiscal Quarter
means, with respect to the Corporation, the fiscal quarter publicly disclosed
by the Corporation.
Fundamental Transaction
means the occurrence of any of the following:
(a) a person or group within the meaning of Section 13(d) of the Exchange
Act files a Schedule TO or any schedule, form or report under the Exchange Act disclosing
that such person or group has become the direct or indirect ultimate beneficial owner, as
defined in Rule 13d-3 under the Exchange
3
Act, of common equity of the Corporation representing more than 50% of the voting power
of the Common Stock; or
(b) consummation of any consolidation or merger of the Corporation or similar
transaction or any sale, lease or other transfer in one transaction or a series of
transactions of all or substantially all of the consolidated assets of the Corporation and
its subsidiaries, taken as a whole, to any Person other than one of the Corporations
subsidiaries, in each case pursuant to which the Common Stock will be converted into cash,
securities or other property, other than pursuant to a transaction in which the Persons that
beneficially owned (as defined in Rule 13d-3 under the Exchange Act) directly or
indirectly, Voting Shares of the Corporation immediately prior to such transaction
beneficially own, directly or indirectly, Voting Shares representing a majority of the total
voting power of all outstanding classes of Voting Shares of the continuing or surviving
Person immediately after the transaction.
Holder
means the Person in whose name the shares of Series A Preferred Stock are registered,
which may be treated by the Corporation, Transfer Agent, Registrar, Paying Agent and Conversion
Agent as the absolute owner of the shares of Series A Preferred Stock for the purpose of making
payment of dividends and settling conversions and for all other purposes.
Illinois Secretary
has the meaning set forth in Section 1(a).
Junior or Parity Stock
has the meaning set forth in Section 3(e).
Liquidation Preference
has the meaning set forth in Section 1(b).
Mandatory Conversion Date
has the meaning set forth in Section 9(c).
New Issuance Price
means the greater of (i) the purchase (or reference, implied, conversion,
exchange or comparable) price per share of Common Stock for the applicable Reset Issuance or (ii)
14.83.
Notice of Mandatory Conversion
has the meaning set forth in Section 9(c).
Officer
means the Chief Executive Officer, Chief Operating Officer, the Chief Financial
Officer, any Executive Vice President, any Senior Vice President, the Treasurer, the Secretary or
any Assistant Secretary of the Corporation.
Parity Preferred Stock
has the meaning set forth in Section 7(b).
Parity Securities
means any securities of the Corporation ranking equally with the Series A
Preferred Stock as to dividends.
Preferred Certificate
has the meaning set forth in Section 20.
Paying Agent
shall mean Illinois Stock Transfer Company acting in its capacity as paying
agent for the payment of dividends for the Series A Preferred Stock, and its successors and assigns
or any other paying agent appointed by the Corporation.
Person
means a legal person, including any individual, corporation, estate, partnership,
joint venture, association, joint-stock company, limited liability company or trust.
Record Date
has the meaning set forth in Section 3(b).
Registrar
shall mean Illinois Stock Transfer Company acting in its capacity as registrar for
the Series A Preferred Stock, and its successors and assigns or any other registrar appointed by
the Corporation.
Reorganization Event
has the meaning set forth in Section 10(a).
4
Reset Issuance
means any issuance or sale by the Corporation of, or agreement to issue or
sell, in one or more transactions, at a purchase (or reference, implied, conversion, exchange or
comparable) price per share less than the Subject Price, more than an aggregate of $10,000,000 of
Common Stock (or securities that are convertible into or exchangeable or exercisable for Common
Stock), excluding any Common Stock or securities that are convertible into or exchangeable or
exercisable for Common Stock that are offered, granted, issued or issuable (i) under the
Corporations equity benefit or compensation plans or under other customary compensatory plans or
arrangements, (ii) in connection with acquisitions that do not constitute a Fundamental
Transaction or (iii) upon the exercise, vesting or conversion of the Warrants of the Corporation,
but not to amendments or adjustments to any such Warrants having the effect of reducing the
exercise or conversion price thereof or increasing the number of shares issuable upon the exercise
or conversion of such Warrants.
Retained Stock
has the meaning set forth in Section 15.
Spin-Off
has the meaning set forth in Section 13(a)(iv).
Spin-Off Valuation Period
has the meaning set forth in Section 13(a)(iv).
Subject Price
means an amount equal to the Applicable Conversion Price less $1.00.
Trading Day
means a day on which the shares of Common Stock:
(a) are not suspended from trading on any U.S. national or regional
securities exchange or association or over-the-counter market at the close of business; and
(b) have traded at least once on the U.S. national or regional securities
exchange or association or over-the-counter market that is the primary market for the
trading of the Common Stock.
Transfer Agent
shall mean Illinois Stock Transfer Company acting in its capacity as transfer
agent for the Series A Preferred Stock, and its successors and assigns or any other transfer agent
appointed by the Corporation.
Voting Parity Securities
has the meaning set forth in Section 5(b). For avoidance of doubt,
the series of preferred stock of the Corporation designated as Fixed Rate Cumulative Perpetual
Preferred Stock, Series B shall not constitute Voting Parity Securities for purposes of the Series
A Preferred Stock.
Voting Shares
of a Person means shares of all classes of Capital Stock of such Person then
outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in
the election of the board of directors of such Person.
Warrants
means the warrant certificates issued pursuant to that certain Agreement and Plan
of Merger by and among the Corporation, Wayne Hummer Asset Management Company and Lake Forest
Capital Management Co., Robert L. Meyers, James P. Richter and S.A. Lincoln dated as of February 4,
2003.
3.
Dividends
.
(a) Holders of shares of Series A Preferred Stock shall be entitled to receive only
if, when and as declared by the Board of Directors, out of funds legally available for the payment
of dividends, cash dividends on the Liquidation Preference of $1,000 per share, at an annual rate
equal to 8.00%. Subject to the foregoing, dividends shall be payable in arrears on January 15,
April 15, July 15 and October 15 of each year (each, a Dividend Payment Date), commencing on
October 15, 2008. If a Dividend Payment Date falls on a day that is not a Business Day, the
dividend will be paid on the next Business Day as if it were paid on the Dividend Payment Date, and
no interest or other amount will accrue on the dividend so payable for the period from and after
that Dividend Payment Date to the date the dividend is paid.
5
(b) Each dividend shall be payable to Holders of record as they appear on the
Corporations stock register at 5:00 p.m., New York City time, on the first day of the month in
which the relevant Dividend Payment Date occurs (the Record Date). The Record Date shall apply
regardless of whether any particular Record Date is a Business Day.
(c) Dividends are payable on the Series A Preferred Stock on the basis of a 360-day
year consisting of twelve 30-day months. There shall be no sinking fund with respect to dividends.
(d) Dividends on the Series A Preferred Stock shall not be cumulative. To the
extent that the Board of Directors does not declare and pay dividends on the Series A Preferred
Stock for a Dividend Period prior to the related Dividend Payment Date, in full or otherwise, such
unpaid dividend shall not accrue and shall cease to be payable. The Corporation shall have no
obligation to pay dividends for such Dividend Period after the Dividend Payment Date for such
Dividend Period or to pay interest with respect to such dividends, whether or not the Corporation
declares dividends on the Series A Preferred Stock for any subsequent Dividend Period.
(e) If full quarterly dividends on all outstanding shares of the Series A Preferred Stock for
any Dividend Period have not been authorized, declared, and paid or set aside for payment, the
Corporation shall not declare or pay dividends with respect to, or redeem, purchase or acquire any
stock of the Corporation ranking equally with or junior to the Series A Preferred Stock as to
dividends (any such stock, Junior or Parity Stock) during the next succeeding Dividend Period,
other than:
(i) redemptions, purchases or other acquisitions of Junior or Parity Stock in connection
with any benefit plan or other similar arrangement with or for the benefit of any one or more
employees, officers, directors or consultants or in connection with a dividend reinvestment or
shareholder stock purchase plan;
(ii) any declaration of a dividend in connection with any stockholders rights plan, or the
issuance of rights, stock or other property under any stockholders rights plan, including with
respect to any successor stockholders rights plan, or the redemption or repurchase of rights
pursuant thereto; and
(iii) conversions into or exchanges for other Junior or Parity Stock and cash solely in lieu
of fractional shares of the Junior or Parity Stock.
If dividends for any Dividend Payment Date are not paid in full on the shares of the Series A
Preferred Stock and there are issued and outstanding shares of Parity Securities with the same
Dividend Payment Date, then all dividends declared on shares of the Series A Preferred Stock and
such Parity Securities on such date shall be declared
pro rata
so that the respective amounts of
such dividends shall bear the same ratio to each other as full quarterly dividends per share on the
shares of the Series A Preferred Stock and all such Parity Securities otherwise payable on such
Dividend Payment Date (subject to their having been authorized by the Board of Directors and
declared by the Corporation out of legally available funds and including, in the case of any such
Parity Securities that bear cumulative dividends, all accrued but unpaid dividends) bear to each
other.
(f) Payments of cash for dividends shall be delivered to the Holder.
4.
Liquidation Rights
.
(a) In the event of any liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, the Holders shall be entitled to receive out of the assets of the
Corporation available for distribution to its stockholders, before any distribution of assets is
made to holders of shares of Common Stock or any such other stock of the Corporation ranking junior
to the Series A Preferred Stock as to rights upon liquidation, dissolution or winding up of the
Corporation, a liquidation distribution in an amount equal to the greater of (i) the Liquidation
Preference of $1,000 per share, plus an amount equal to any declared and unpaid dividends on the
shares of Series A Preferred Stock to the date of such liquidation distribution and (ii) the amount
Holders would have received as a holder of Common Stock had all of the Series A Preferred Stock
been converted into Common Stock immediately prior to such event. After payment of the full amount
of such liquidation distribution, the Holders shall not be entitled to any further participation in
any distribution of assets by the Corporation.
6
(b) In the event that the assets of the Corporation, or proceeds thereof,
distributable among the Holders of Series A Preferred Stock and holders of Parity Securities shall
be insufficient to pay in full the liquidation distribution payable on the Series A Preferred Stock
and the corresponding amounts payable on Parity Securities, then such assets, or the proceeds
thereof, shall be distributable among the Holders of Series A Preferred Stock and holders of Parity
Securities ratably in proportion to the full respective amounts which would be payable on such
shares if all amounts payable thereon were paid in full.
(c) Neither a consolidation or merger of the Corporation with or into any other
entity, nor a consolidation or merger of any other entity with or into the Corporation, nor a sale,
lease or other transfer of all or substantially all of the Corporations assets shall be considered
a liquidation, dissolution or winding up of the Corporation.
5.
Voting Rights
.
(a) The Series A Preferred Stock shall have no voting rights except as provided
herein or as otherwise from time to time required by law.
(b) Whenever dividends payable on the Series A Preferred Stock have not been paid
for four or more Dividend Periods, whether or not consecutive, the Holders shall have the right,
with holders of any other series of Parity Securities that have similar voting rights and on which
dividends likewise have not been paid (the Voting Parity Securities), voting together as a class,
at a special meeting called at the request of Holders of at least 20% of the shares of Series A
Preferred Stock outstanding or of holders of at least 20% of the shares of any Voting Parity
Securities (unless such request for a special meeting is received less than 90 calendar days before
the date fixed for the next annual or special meeting of the Corporations stockholders, in which
event such election shall be held only at such next annual or special meeting of the Corporations
stockholders) or at the Corporations next annual or special meeting of the Corporations
stockholders, to elect two additional directors to the Board of Directors;
provided
that the
election of any such director does not cause the Corporation to violate the applicable corporate
governance requirements or the exchange or trading market where the Common Stock is then listed or
quoted, as the case may be. At any meeting held for the purpose of electing such a director, the
presence in person or by proxy of the holders of shares representing at least a majority of the
voting power of the Series A Preferred Stock and any Voting Parity Securities, voting together as a
class, shall be required to constitute a quorum of such shares. The affirmative vote of the
Holders of Series A Preferred Stock and holders of any Voting Parity Securities, voting together as
a class, representing a majority of the voting power of such shares present at such meeting, in
person or by proxy, shall be sufficient to elect any such director.
(c) Upon the election of any such directors, the number of directors that comprise
the Board of Directors shall be increased by such number of directors. Such directors shall be
elected to terms that are the shorter of the next annual meeting of the Corporation and such time
as full dividends have been paid on the Series A Preferred Stock for at least four consecutive
Dividend Periods. In the event such term expires prior to the time full dividends have been paid
on the Series A Preferred Stock for at least four consecutive Dividend Periods, any such Directors
shall be elected to successive terms of similar duration until full dividends have been paid on the
Series A Preferred Stock for at least four consecutive Dividend Periods. Holders of Series A
Preferred Stock, together with holders of any Voting Parity Securities, voting together as a class,
may remove any director they elected. Any vacancy created by the removal of any such director
shall be filled only by the vote of the Holders of the Series A Preferred Stock and holders of any
Voting Parity Securities, voting together as a class. If the office of either such director
becomes vacant for any reason other than removal, the remaining director may choose a successor who
will hold office for the unexpired term of the vacant office.
(d) So long as any shares of Series A Preferred Stock remain outstanding, the
Corporation shall not, without the vote, in person or by proxy, or written consent of the holders
of at least 66
2
/
3
% of the shares of the Series A Preferred Stock, voting as
a separate class:
(i) amend, alter or repeal the Corporations Articles of Incorporation
(including this Certificate of Designations) or the Corporations bylaws in a way that
adversely affects the powers,
7
preferences or special rights of the Series A Preferred Stock, including, without
limitation, any amendment increasing the number of shares designated as Series A Preferred
Stock or authorizing or creating any class of Voting Parity Securities (which, for the
avoidance of doubt means the creation of any class of stock have voting rights along with
the voting rights of the Series A Preferred Stock, including the right to vote on the
election of the two additional directors as contemplated by Section 5(b) hereof);
(ii) issue any of the Corporations Capital Stock ranking, as to dividends or
upon liquidation, dissolution or winding up of the Corporation, senior to the Series A
Preferred Stock, or reclassify any of the Corporations authorized Capital Stock into any
such shares of such Capital Stock, or issue any obligation or security convertible into or
evidencing the right to purchase any such shares; or
(iii) consummate a binding share exchange, a reclassification involving the
Series A Preferred Stock or a merger or consolidation of the Corporation with another
entity;
provided, however,
that the holders of Series A Preferred Stock shall have no right
to vote under this provision or otherwise under Illinois law if in each case (A) both (1)
the Series A Preferred Stock remains outstanding or, in the case of any such merger or
consolidation with respect to which the Corporation is not the surviving or resulting
entity, is converted into or exchanged for preferred securities of the surviving or
resulting entity (or its ultimate parent) that is an entity organized and existing under the
laws of the United States of America, any state thereof or the District of Columbia and
(2) the Series A Preferred Stock remaining outstanding or the new preferred securities, as
the case may be, have such powers, preferences and special rights, taken as a whole, as are
not materially less favorable to the holders thereof than the powers, preferences and
special rights of the Series A Preferred Stock, or (B) either (1) the Corporation has
exercised its mandatory conversion rights pursuant to Section 9 hereof in connection with
such consummation or (2) the Holders are entitled to receive the minimum consideration
required by Section 11 hereof in connection with such consummation.
Any (1) increase in the amount of authorized Common Stock or preferred stock, (2) increase in
the number of shares of any series of preferred stock (excluding the Series A Preferred Stock or
any Voting Parity Securities); or (3) authorization, creation and issuance of other classes or
series of Capital Stock (or securities convertible into such Capital Stock), in each case ranking
equally with or junior to the Series A Preferred Stock shall be deemed not to adversely affect such
powers, preferences or special rights.
(e) The number of votes that each share of Series A Preferred Stock and any Parity
Preferred Stock participating in the votes described above shall be calculated on an as converted
basis or, if not all of such stock is convertible or exchangeable for Common Stock, shall be in
proportion to the liquidation preference of such share.
6.
Redemption
.
The shares of Series A Preferred Stock shall not be redeemable at any time either at the
option of the Corporation or a Holder.
7.
Ranking
.
The Series A Preferred Stock shall rank, with respect to dividend rights and rights upon the
liquidation, dissolution or winding-up of the Corporation:
(a) senior to the Common Stock and any other class or series of the
Corporations Capital Stock that the Corporation may issue in the future the terms of which
do not expressly provide that it ranks on a parity with, or senior to, to the Series A
Preferred Stock;
(b) equally with any class or series of the Corporations Capital Stock that
the Corporation may issue in the future the terms of which expressly provide that such class
or series shall rank on a parity with the Series A Preferred Stock (Parity Preferred
Stock); and
8
(c) junior to any class or series of the Corporations Capital Stock that the
Corporation may issue in the future the terms of which expressly provide that such class or
series shall rank senior to the Series A Preferred Stock; and
(d) junior to all of the Corporations existing and future indebtedness and
other liabilities.
In addition, the Series A Preferred Stock, with respect to dividends rights and rights upon
the liquidation, dissolution or winding-up of the Corporation will be structurally subordinated to
existing and future indebtedness of the Corporations subsidiaries.
For the avoidance of doubt, as provided in Section 5(d), the Corporation may, from time to
time, without notice to or consent from the Holders, create and issue additional shares of Series A
Preferred Stock, subject to the compliance with Section 1(a), or preferred stock ranking equally
with or junior to the Series A Preferred Stock as to dividend rights and rights upon the
liquidation, dissolution or winding-up of the Corporation.
8.
Holders Right to Convert At Any Time
.
Each Holder shall have the right, at such Holders option, at any time, to convert all or any
portion of such Holders shares of Series A Preferred Stock into shares of Common Stock at the
Applicable Conversion Rate, plus cash in lieu of fractional shares, subject to antidilution
adjustments provided herein, compliance with the conversion procedures set forth in Section 12 and
subject to the limitations on beneficial ownership set forth in Section 15.
9.
Mandatory Conversion at the Corporations Option
.
(a) The Corporation shall have the right, at its option:
(i) On and after August 26, 2010 to cause all but not less than all of the shares of
Series A Preferred Stock to be converted into shares of Common Stock upon the closing of any
Fundamental Transaction in which the shares of Common Stock into which the Series A
Preferred Stock is so converted or exchanged represents the right to receive cash or
securities with a Fair Market Value equal to or greater than $35.59 per share, as equitably
adjusted for any stock splits, stock combinations, stock dividends, or similar transactions;
provided, that the Corporation shall not be entitled to exercise such conversion right
unless the Corporation shall have declared and paid in full dividends on the Series A
Preferred Stock for the four most recently completed Dividend Periods.
(ii) On and after August 26, 2013 to cause, at any time and from time to time, some or
all of the shares of Series A Preferred Stock to be converted into shares of Common Stock at
the Applicable Conversion Rate, plus cash in lieu of fractional shares, if (x) for 20
Trading Days during any period of 30 consecutive Trading Days, including the last Trading
Day of such period, ending on the Trading Day preceding the date the Corporation gives
notice of mandatory conversion pursuant to Section 9(c), the Closing Price per share of the
Common Stock exceeds $35.59, as equitably adjusted for any stock splits, stock combinations,
stock dividends, or similar transactions and (y) dividends on the Series A Preferred Stock
for the four most recently completed Dividend Periods have been declared and paid in full.
(b) If the Corporation elects to cause less than all of the shares of Series A
Preferred Stock to be converted pursuant to Section 9(a)(ii), the Conversion Agent shall select the
shares of Series A Preferred Stock to be converted by lot, or on a
pro rata
basis or by another
method the Conversion Agent considers fair and appropriate (so long as such method is not
prohibited by the rules of any stock exchange on which the Series A Preferred Stock is then traded,
if any). If the Conversion Agent selects a portion of a Holders Series A Preferred Stock for
partial mandatory conversion and such Holder converts a portion of its shares of Series A Preferred
Stock, the converted portion will be deemed to be from the portion selected for mandatory
conversion under this Section 9.
(c) If the Corporation elects to exercise its mandatory conversion right pursuant to
this Section 9, the Corporation shall give notice of mandatory conversion by (i) providing a notice
of such conversion by first class mail to each Holder of the shares of Series A Preferred Stock to
be converted (a Notice of Mandatory Conversion)
9
or (ii) issuing a press release for publication and making this information available on its
website. The Conversion Date shall be a date selected by the Corporation (the Mandatory
Conversion Date), not less than 10 calendar days, and not more than 20 calendar days, after the
date on which the Corporation provides the Notice of Mandatory Conversion or issues such press
release. In addition to any information required by applicable law or regulation, the Notice of
Mandatory Conversion or press release shall state, as appropriate:
(i) the Mandatory Conversion Date;
(ii) the number of shares of Common Stock to be issued upon conversion of
each share of Series A Preferred Stock;
(iii) the aggregate number of shares of Series A Preferred Stock to be
converted; and
(iv) a reasonably detailed explanation of the circumstances giving rise to such
mandatory conversion, including any related determination of Fair Market Value.
The Corporation shall honor all Notices of Conversion received by the Corporation by 5:00 p.m.
(New York City time) on the Trading Day immediately preceding the Mandatory Conversion Date.
10.
Reorganization Events
.
(a) In the event of:
(i) any consolidation or merger of the Corporation with or into another
Person, in each case pursuant to which the Common Stock will be converted into cash,
securities, or other property of the Corporation or another Person;
(ii) any sale, transfer, lease, or conveyance to another Person of all or
substantially all of the property and assets of the Corporation, in each case pursuant to
which the Common Stock will be converted into cash, securities, or other property;
(iii) any reclassification of the Common Stock into securities, including
securities other than the Common Stock; or
(iv) any statutory exchange of the Corporations securities with another
Person (other than in connection with a merger or acquisition);
(any such event specified in clauses (i)-(iv) of this Section 10(a), a Reorganization
Event), each share of Series A Preferred Stock outstanding immediately prior to such
Reorganization Event shall, without the consent of Holders (but subject to the rights of the
Holders pursuant to Section 11 hereof and the Company pursuant to Section 9 hereof) become
convertible into the kind of securities, cash, and other property receivable in such Reorganization
Event by a holder of the shares of Common Stock that was not the counterparty to the Reorganization
Event or an affiliate of such other party (such securities, cash, and other property, the Exchange
Property).
(b) In the event that holders of the shares of the Common Stock have the opportunity
to elect the form of consideration to be received in such transaction, the consideration that the
Holders are entitled to receive shall be deemed to be the types and amounts of consideration
received by the majority of the holders of the shares of the Common Stock that affirmatively make
an election. The amount of Exchange Property receivable upon conversion of any Series A Preferred
Stock in accordance with Section 8, Section 9 or Section 11 shall be determined based upon the
Conversion Rate in effect on the applicable Conversion Date or Mandatory Conversion Date.
(c) The above provisions of this Section 10 shall similarly apply to successive
Reorganization Events and the provisions of Section 13 shall apply to any shares of Capital Stock
of the Corporation (or any successor) received by the holders of the Common Stock in any such
Reorganization Event.
10
(d) The Corporation (or any successor) shall, within 20 calendar days of the
occurrence of any Reorganization Event, provide written notice to the Holders of such occurrence of
such event and of the kind and amount of the cash, securities or other property that constitutes
the Exchange Property. Failure to deliver such notice shall not affect the operation of this
Section 10.
(e) Notwithstanding anything to the contrary in this Certificate of Designations, the terms of
any agreement pursuant to which a Reorganization Event is effected shall, if the Holders of the
Series A Preferred Stock will receive securities of the successor or surviving entity, include
terms requiring any such successor or surviving entity to comply with the provisions of this
Certificate of Designations.
11.
Fundamental Transaction Protection
.
In the event a Fundamental Transaction occurs prior to August 26, 2010, each share of Series A
Preferred Stock shall, without any action of the Holders and effective as of the date of
consummation of such Fundamental Transaction (such date being deemed a Mandatory Conversion Date),
become convertible at the option of the Holder, into the right to receive the consideration into
which shares of Common Stock were exchanged or converted as a result of such Fundamental
Transaction; provided, however, that in no event shall the Fair Market Value of such consideration
to the Holders for each share of Common Stock into which the Series A Preferred Stock is
convertible be less than (i) $38.33, as equitably adjusted for any stock splits, stock
combinations, stock dividends, or similar transactions, if such Fundamental Transaction is
consummated on or prior to August 26, 2009 or (ii) $36.96, as equitably adjusted for any stock
splits, stock combinations, stock dividends, or similar transactions, if such Fundamental
Transaction is consummated after August 26, 2009 and prior to August 26, 2010.
12.
Conversion Procedures
.
(a) Effective immediately prior to the close of business on the Mandatory Conversion Date or
any applicable Conversion Date, dividends shall no longer be authorized and declared on any
converted shares of Series A Preferred Stock and such shares of Series A Preferred Stock shall
cease to be outstanding, in each case, subject to the right of Holders to receive any authorized,
declared and unpaid dividends on such shares and any other payments to which they are otherwise
entitled pursuant to Section 8, Section 9, Section 11, or this Section 12, as applicable.
(b) No allowance or adjustment, except pursuant to Section 13, shall be made in respect of
dividends payable to holders of the Common Stock of record as of any date prior to the close of
business on the Mandatory Conversion Date or any applicable Conversion Date. Prior to the close of
business on the Mandatory Conversion Date or any applicable Conversion Date, shares of Common Stock
issuable upon conversion of, or other securities issuable upon conversion of, any shares of
Series A Preferred Stock shall not be deemed outstanding for any purpose, and Holders shall have no
rights with respect to the Common Stock or other securities issuable upon conversion (including
voting rights, rights to respond to tender offers for the Common Stock or other securities issuable
upon conversion and rights to receive any dividends or other distributions on the Common Stock or
other securities issuable upon conversion) by virtue of holding shares of Series A Preferred Stock.
(c) Shares of Series A Preferred Stock duly converted in accordance with this Certificate of
Designation, or otherwise reacquired by the Corporation, will resume the status of authorized and
unissued preferred stock, undesignated as to series and available for future issuance. The
Corporation may from time-to-time take such appropriate action as may be necessary to reduce the
authorized number of shares of Series A Preferred Stock, but not below the number of shares of
Series A Preferred Stock then outstanding.
(d) The Person or Persons entitled to receive the Common Stock and/or cash, securities or
other property issuable upon conversion of Series A Preferred Stock shall be treated for all
purposes as the record holder(s) of such shares of Common Stock and/or securities as of the close
of business on the Mandatory Conversion Date or any applicable Conversion Date. In the event that a
Holder shall not by written notice designate the name in which shares of Common Stock and/or cash,
securities or other property (including payments of cash in lieu of fractional shares) to be issued
or paid upon conversion of shares of Series A Preferred Stock should be registered or paid or the
manner in which such shares should be delivered, the Corporation shall be entitled to register and
deliver such
11
shares, and make such payment, in the name of the Holder and in the manner shown on the records of
the Corporation.
(e) Conversion into shares of Common Stock will occur on the Mandatory Conversion Date or any
applicable Conversion Date as follows:
(i) On the Mandatory Conversion Date, shares of Common Stock shall be issued to Holders or
their designee upon presentation and surrender of the certificate evidencing the Series A Preferred
Stock to the Conversion Agent, if shares of the Series A Preferred Stock are held in certificated
form, and, if required, the furnishing of appropriate endorsements and transfer documents and the
payment of all transfer and similar taxes.
(ii) On the date of any conversion at the option of a Holder pursuant to Section 8, if a
Holders interest is in certificated form, a Holder must do each of the following in order to
convert:
(1) complete and manually sign the conversion notice provided by the Conversion Agent, or a
facsimile of the conversion notice, and deliver this irrevocable notice to the Conversion Agent;
(2) surrender the shares of Series A Preferred Stock to the Conversion Agent;
(3) if required, furnish appropriate endorsements and transfer documents; and
(4) if required, pay all transfer or similar taxes.
If a Holders interest is a beneficial interest in a global certificate representing Series A
Preferred Stock, in order to convert, such Holder must comply with Sections 12(3)(ii)(3) through
(5). The date on which a Holder complies with the procedures in this clause (ii) is the
Conversion
Date
.
(iii) The Conversion Agent shall, on a Holders behalf, convert the Series A Preferred Stock
into shares of Common Stock, in accordance with the terms of the notice delivered by such Holder
described in Section 12(e)(ii).
(iv) No fractional shares of Common Stock will be issued as a result of any
conversion of shares of Series A Preferred Stock. In lieu of any fractional share of
Common Stock otherwise issuable in respect of any conversion of Series A Preferred Stock,
the Corporation shall pay an amount in cash (computed to the nearest cent) equal to the same
fraction of the Closing Price of the Common Stock determined as of the Trading Day
immediately preceding the effective date of conversion. If more than one share of the
Series A Preferred Stock is surrendered for conversion at one time by or for the same
Holder, the number of full shares of Common Stock issuable upon conversion thereof shall be
computed on the basis of the aggregate number of shares of the Series A Preferred Stock so
surrendered.
(v) If a Conversion Date on which a Holder elects to convert its Series A
Preferred Stock pursuant to Section 8 or a Mandatory Conversion Date (including as a result
of a Fundamental Transaction pursuant to Section 11) is prior to the Record Date relating to
any declared dividend for the Dividend Period, the Holder(s) will not have the right to
receive any declared dividends for that Dividend Period. If a Conversion Date on which a
Holder elects to convert its Series A Preferred Stock pursuant to Section 8 or a Mandatory
Conversion Date is after the Record Date for any declared dividend and prior to the Dividend
Payment Date, the Holder(s) shall receive that dividend on the relevant Dividend Payment
Date if such Holder(s) were the Holder(s) on the Record Date for that dividend.
(f) Notwithstanding anything to the contrary contained herein, including, but not
limited to, the provisions of Section 11 hereof, in no event shall the shares of Common Stock
issuable upon conversion of the Series A Preferred Stock exceed 19.9% of the Corporations Common
Stock outstanding as of the close of business on August 26, 2008 (the Conversion Rate Cap).
13.
Anti-Dilution Adjustments
.
12
(a) The Conversion Rate shall be adjusted from time to time by the Corporation as
follows:
(i)
Stock Dividends and Distributions
. In case the Corporation shall, at
any time or from time to time while any of the Series A Preferred Stock is outstanding, pay a
dividend in shares of Common Stock or make a distribution in shares of Common Stock to all or
substantially all holders of its outstanding shares of Common Stock, then the Conversion Rate shall
be adjusted based on the following formula:
where,
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CR
0
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=
|
|
the Conversion Rate in effect at 5:00 p.m., New
York City time, on the Trading Day immediately
preceding the Ex-Dividend Date for such dividend
or distribution;
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|
|
|
|
|
|
|
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CR
1
|
|
=
|
|
the Conversion Rate in effect on the Ex-Dividend
Date for such dividend or distribution;
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|
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|
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OS
0
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=
|
|
the number of shares of Common Stock outstanding
at 5:00 p.m., New York City time, on the Trading
Day immediately preceding the Ex-Dividend Date for
such dividend or distribution; and
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OS
1
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=
|
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the number of shares of Common Stock that would be
outstanding immediately after, and solely as a
result of, such dividend or distribution.
|
Any adjustment made pursuant to this Section 13(a)(i) shall become effective immediately prior
to 9:00 a.m., New York City time, on the Ex-Dividend Date for such dividend or distribution. If
any dividend or distribution that is the subject of this Section 13(a)(i) is declared but not so
paid or made, the Conversion Rate shall be readjusted, effective as of the date the Board of
Directors publicly announces its decision not to pay or make such dividend or distribution, to the
Conversion Rate that would then be in effect if such dividend or distribution had not been
declared. For purposes of this Section 13(a)(i), the number of shares of Common Stock outstanding
at 5:00 p.m., New York City time, on the Trading Day immediately preceding the Ex-Dividend Date for
such dividend or distribution shall not include shares of Common Stock held in treasury, if any.
The Corporation will not pay any dividend or make any distribution on shares of Common Stock held
in treasury, if any.
(ii)
Subdivisions, Splits and the Combination of the Common Stock
. If the Corporation
subdivides, splits or combines the shares of Common Stock, the Conversion Rate shall be adjusted
based on the following formula:
where,
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CR
0
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=
|
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the Conversion Rate in effect at 5:00 p.m., New York City time, on the Trading Day
immediately preceding the effective date of such subdivision or combination;
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|
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CR
1
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=
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the Conversion Rate in effect on the effective date of such subdivision or combination;
|
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|
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OS
0
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=
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the number of shares of Common Stock outstanding at 5:00 p.m., New York City time, on
the Trading Day immediately preceding the effective date of such subdivision or
combination; and
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13
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OS
1
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=
|
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the number of shares of Common Stock that would be outstanding immediately after, and
solely as a result of, such subdivision or combination.
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Any adjustment made pursuant to this Section 13(a)(ii) shall become effective immediately
prior to 9:00 a.m., New York City time, on the effective date of such subdivision or combination.
(iii)
Issuance of Stock Purchase Rights
. In case the Corporation shall issue
rights (other than rights or warrants issued pursuant to a stockholders rights plan, dividend
reinvestment plan or share purchase plan or other similar plans) or warrants to all or
substantially all holders of its outstanding shares of Common Stock entitling them to purchase, for
a period expiring within 45 calendar days of the date of issuance, shares of Common Stock at a
price per share less than the Current Market Price of the Common Stock, the Conversion Rate shall
be adjusted based on the following formula:
where,
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CR
0
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=
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the Conversion Rate in effect at 5:00 p.m., New York City time, on the
Trading Day immediately preceding the Ex-Dividend Date for such
issuance;
|
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CR
1
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=
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the Conversion Rate in effect on the Ex-Dividend Date for such issuance;
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OS
0
|
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=
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the number of shares of the Common Stock that are outstanding at
5:00 p.m., New York City time, on the Trading Day immediately preceding
the Ex-Dividend Date for such issuance;
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X
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=
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the total number of shares of the Common Stock issuable
pursuant to such rights or warrants; and
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Y
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=
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the number of shares of the Common Stock equal to the
quotient of (x) the aggregate price payable to exercise such
rights or warrants, divided by (y) the Current Market Price
of the Common Stock.
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Any adjustment made pursuant to this Section 13(a)(iii) shall become effective immediately
prior to 9:00 a.m., New York City time, on the Ex-Dividend Date for such issuance. In the event
that such rights or warrants described in this Section 13(a)(iii) are not so issued, the Conversion
Rate shall be readjusted, effective as of the date the Board of Directors publicly announces its
decision not to issue such rights or warrants, to the Conversion Rate that would then be in effect
if such issuance had not been declared. To the extent that such rights or warrants are not
exercised prior to their expiration or shares of the Common Stock are otherwise not delivered
pursuant to such rights or warrants upon the exercise of such rights or warrants, the Conversion
Rate shall be readjusted to the Conversion Rate that would then be in effect had the adjustments
made upon the issuance of such rights or warrants been made on the basis of delivery of only the
number of shares of Common Stock actually delivered. In determining the aggregate price payable to
exercise such rights or warrants, there shall be taken into account any consideration received by
the Corporation for such rights or warrants and the Fair Market Value of such consideration. For
purposes of this Section 13(a)(iii), the number of shares of Common Stock outstanding at 5:00 p.m.,
New York City time, on the Trading Day immediately preceding the Ex-Dividend Date for such issuance
shall not include shares of Common Stock held in treasury, if any. The Corporation will not issue
any such rights or warrants in respect of shares of Common Stock held in treasury, if any.
(iv)
Debt or Asset Distributions
. In case the Corporation shall, by dividend
or otherwise, distribute to all or substantially all holders of its outstanding shares of Common
Stock shares of any class of Capital Stock of the Corporation, evidences of its indebtedness or
assets, including securities, but excluding (1) any
14
dividends or distributions referred to in Section 13(a)(i), (2) any rights or warrants
referred to in Section 13(a)(iii), (3) any dividends or distributions referred to in Section
13(a)(v), (4) any dividends or distributions in connection with a transaction to which Section 10
applies, or (5) any Spin-Off to which the provisions set forth below in this Section
13(a)(iv) applies, any of the foregoing hereinafter in this Section 13(a)(iv) called the
Distributed Assets), then, in each such case, the Conversion Rate shall be adjusted based on the
following formula:
where,
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CR
0
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=
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the Conversion Rate in effect at 5:00 p.m., New
York City time, on the Trading Day immediately
preceding the Ex-Dividend Date for such
distribution;
|
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CR
1
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=
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the Conversion Rate in effect on the Ex-Dividend
Date for such distribution;
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SP
0
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=
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the Current Market Price of the Common Stock; and
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FMV
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=
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the Fair Market Value, on the Ex-Dividend Date for
such distribution, of the Distributed Assets so
distributed, expressed as an amount per share of
Common Stock.
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If the transaction that gives rise to an adjustment pursuant to this Section 13(a)(iv) is,
however, one pursuant to which the payment of a dividend or other distribution on the Common Stock
of shares of Capital Stock of, or similar equity interests in, a Subsidiary or other business unit
of the Corporation (a Spin-Off) that are, or, when issued, will be, traded or listed on the
Nasdaq Stock Market, the New York Stock Exchange or any other U.S. national securities exchange or
association, then the Conversion Rate shall instead be adjusted based on the following formula:
where,
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CR
0
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=
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the Conversion Rate in effect at 5:00 p.m., New York City time, on the
Trading Day immediately preceding the Ex-Dividend Date for such
distribution;
|
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CR
1
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=
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the Conversion Rate in effect on the Ex-Dividend Date for such distribution;
|
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FMV
0
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=
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the average of the Closing Prices of such Capital Stock or similar equity
interests distributed to holders of Common Stock applicable to one share of
Common Stock during the 10 consecutive Trading Day period commencing on,
and including, the effective date of the Spin-Off (the Spin-Off Valuation
Period); and
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MP
0
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=
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the average of the Closing Prices of the Common Stock during the Spin-Off
Valuation Period.
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Any adjustment made pursuant to this Section 13(a)(iv) shall become effective immediately
prior to 9:00 a.m., New York City time, on the Ex-Dividend Date for such distribution. If any
dividend or distribution of the type described in this Section 13(a)(iv) is not so paid or made,
the Conversion Rate shall be readjusted, effective as of the date the Board of Directors publicly
announces its decision not to pay such dividend or distribution, to the Conversion Rate that would
then be in effect if such dividend or distribution had not been declared. If an adjustment
15
to the Conversion Rate is required under this Section 13(a)(iv), delivery of any additional
shares of Common Stock upon conversion of the Series A Preferred Stock shall be delayed to the
extent necessary in order to complete the calculations provided for in this Section 13(a)(iv).
(v)
Cash Distributions
. In case the Corporation shall pay a dividend or
otherwise make a distribution to all or substantially all holders of its outstanding shares of
Common Stock consisting exclusively of cash, excluding (1) any dividend or distribution in
connection with the liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, or upon a transaction to which Section 10 applies, (2) any consideration payable in
connection with a tender or exchange offer made by the Corporation or any of its subsidiaries, (3)
any cash that is distributed as part of a spin-off referred to in Section 13(a)(iv) and
(4) regular cash dividends in any Fiscal Quarter, calculated in a manner consistent with past
practice (the Dividend Threshold Amount), in which event the Conversion Rate shall be adjusted
based on the following formula:
where,
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CR
0
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=
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the Conversion Rate in effect at 5:00 p.m., New
York City time, on the Trading Day immediately
preceding the Ex-Dividend Date for such dividend
or distribution;
|
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|
|
|
|
|
|
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CR
1
|
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=
|
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the Conversion Rate in effect on the Ex-Dividend
Date for such dividend or distribution;
|
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SP
0
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=
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the Current Market Price of the Common Stock; and
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DIV
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=
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the amount in cash per share of Common Stock of
the dividend or distribution, as determined
pursuant to the following sentences. If any
adjustment is required to be made as set forth in
this Section 13(a)(v) as a result of a
distribution (1) that is a regularly scheduled
quarterly dividend, such adjustment would be based
on the amount by which such dividend exceeds the
Dividend Threshold Amount or (2) that is not a
regularly scheduled quarterly dividend, such
adjustment would be based on the full amount of
such distribution. The Dividend Threshold Amount
is subject to adjustment on an inversely
proportional basis whenever the Conversion Rate is
adjusted;
provided
that no adjustment shall be
made to the Dividend Threshold Amount for any
adjustment made to the Conversion Rate as
described under this Section 13(a)(v).
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Any adjustment made pursuant to this Section 13(a)(v) shall become effective immediately prior
to 9:00 a.m., New York City time, on the Ex-Dividend Date for such dividend or distribution. If
any dividend or distribution of the type described in this Section 13(a)(v) is not so paid or made,
the Conversion Rate shall be readjusted, effective as of the date the Board of Directors publicly
announces its decision not to pay such dividend or distribution, to the Conversion Rate that would
then be in effect if such dividend or distribution had not been declared.
(vi)
Self Tender Offers and Exchange Offers
. If the Corporation or any of its
subsidiaries successfully completes a tender offer or exchange offer for all or any portion of the
Common Stock, to the extent that the cash and value of any other consideration included in the
payment per share of Common Stock exceeds the Closing Price per share of Common Stock on the
Trading Day next succeeding the last date, as it may be amended, on which tenders or exchanges may
be made pursuant to such tender offer or exchange offer (the Expiration Date), the Conversion
Rate shall be adjusted based on the following formula:
where,
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CR
0
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=
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the Conversion Rate in
effect at 5:00 p.m., New
York City time, on the
Expiration Date;
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CR
1
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=
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the Conversion Rate in
effect immediately after
5:00 p.m., New York City
time, on the Expiration
Date;
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AC
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=
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the aggregate value of
all cash and any other
consideration (as
determined by the Board
of Directors), on the
Expiration Date, paid or
payable for shares of
Common Stock validly
tendered or exchanged and
not withdrawn as of the
Expiration Date;
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OS
1
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the number of shares of
Common Stock outstanding
immediately after the
last time tenders or
exchanges may be made
pursuant to such tender
offer or exchange offer
(the Expiration Time);
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OS
0
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=
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the number of shares of
Common Stock outstanding
immediately before the
Expiration Time; and
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SP
1
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=
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the average Closing Price per share of
Common Stock during the 10 consecutive
Trading Day period commencing on the
Trading Day immediately after the
Expiration Date.
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Any adjustment made pursuant to this Section 13(a)(vi) shall become effective immediately
prior to 9:00 a.m., New York City time, on the Trading Day immediately following the Expiration
Date. If the Corporation, or one of its subsidiaries, is obligated to purchase shares of Common
Stock pursuant to any such tender offer or exchange offer, but the Corporation or such subsidiary
is permanently prevented by applicable law from effecting any such purchases, or all such purchases
are rescinded, then the Conversion Rate shall be readjusted to be the Conversion Rate that would
then be in effect if such tender offer or exchange offer had not been made. Except as set forth in
the preceding sentence, if the application of this Section 13(a)(vi) to any tender offer or
exchange offer would result in a decrease in the Conversion Rate, no adjustment shall be made for
such tender offer or exchange offer under this Section 13(a)(vi). If an adjustment to the
Conversion Rate is required under this Section 13(a)(vi), delivery of any additional shares of
Common Stock upon conversion of the Series A Preferred Stock shall be delayed to the extent
necessary in order to complete the calculations provided for in this Section 13(a)(vi).
(vii)
Certain Future Offerings
. If, between August 26, 2008 and August 26,
2010, a Reset Issuance occurs, then the Conversion Rate shall be adjusted based on the following
formula:
where,
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CR
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the Conversion Rate in effect at 5:00 p.m., New
York City time, on the date of the Reset Issuance;
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CR
1
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the Conversion Rate in effect immediately after
5:00 p.m., New York City time, on the date of the
Reset Issuance;
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OS
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the number of shares of Common Stock outstanding
immediately prior to the initial issuance of the
Series A Preferred Stock plus the number of shares
of common stock into which the Series A Preferred
Stock is convertible into as of the date of
issuance thereof (assuming such Series A Preferred
Stock was convertible on such date);
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NI
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the number of shares of Common Stock to be issued
in such Reset Issuance (or issuable upon
conversion or exercise of the securities issued in
such Reset Issuance); provided, however, that NI
shall in no event exceed the quotient obtained by
dividing (i) the gross proceeds to the Corporation
from the Reset Issuance by (ii) the New Issuance
Price;
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provided, however, that the amount of any adjustment to the Conversion Rate resulting from a
Reset Issuance (e.g., the amount by which CR
1
exceeds CR
0
) shall be reduced
by 50% in the event the per share price of the applicable Reset Issuance is less than the Subject
Price but greater than or equal to the Applicable Conversion Price minus $2.00.
Any adjustment made pursuant to this Section 13(a)(vii) shall become effective immediately
prior to 9:00 a.m., New York City time, on the Trading Day immediately following the date of the
Reset Issuance. If an adjustment to the Conversion Rate is required under this Section 13(a)(vii),
delivery of any additional shares of Common Stock upon conversion of the Series A Preferred Stock
shall be delayed to the extent necessary in order to complete the calculations provided for in this
Section 13(a)(vii).
(b) Miscellaneous Anti-Dilution Provisions.
(i) To the extent the Corporation has a rights plan in effect with respect to the Common
Stock on any Conversion Date, upon conversion of any shares of the Series A Preferred Stock, the
Holder will receive, in addition to the shares of Common Stock, the rights under the rights plan,
unless, prior to such Conversion Date, the rights have separated from the shares of Common Stock in
accordance with the provisions of such rights plan, in which case the Conversion Rate shall be
adjusted at the time of separation as if the Corporation made a distribution to all or
substantially all holders of the outstanding shares of Common Stock as provided in Section
13(a)(iv), such to readjustment in the event of the expiration, termination or redemption of such
rights.
(ii) In cases where the Fair Market Value of shares of Capital Stock, evidences of
indebtedness, assets (including cash) or securities, including with respect to a Spin-Off, as to
which Section 13(a)(iv) or Section 13(a)(v) apply, applicable to one share of Common Stock,
distributed to holders of Common Stock:
(1) equals or exceeds the Current Market Price of the Common Stock; or
(2) the Current Market Price of the Common Stock exceeds the fair market
value of shares of Capital Stock, evidences of indebtedness, assets (including cash) or
securities so distributed by less than $1.00,
rather than being entitled to an adjustment in the Conversion Rate, the Holder shall be entitled to
receive upon conversion, in addition to the shares of Common Stock, the kind and amount of shares
of Capital Stock, evidences of indebtedness, assets (including cash) or securities comprising the
distribution that such Holder would have received if such Holders Series A Preferred Stock had
been converted immediately prior to the record date for determining the holders of Common Stock
entitled to receive the distribution.
(iii) Notwithstanding any of the foregoing clauses in this Section 13, the
applicable Conversion Rate will not be adjusted pursuant to this Section 13 if the Holders may
participate in the transaction that would otherwise give rise to adjustment pursuant to this
Section 13 as a result of holding shares of the Series A Preferred Stock, without conversion of
such Holders shares of Series A Preferred Stock, as if such Holder held the full number of shares
of Common Stock in to which a share of Series A Preferred Stock may then be converted.
(iv) The Corporation may, but is not required to, make such increases in the
Conversion Rate, in addition to those required by Section 13(a)(i) through (vii), as the Board of
Directors deems advisable to avoid or diminish any income tax to holders of Common Stock resulting
from any dividend or distribution of Common Stock (or rights to acquire Common Stock) or from any
event treated as such for income tax purposes.
(v) In addition to the foregoing, to the extent permitted by applicable law and
subject to the applicable rules of the Nasdaq Stock Market, the Corporation from time to time may
increase the Conversion Rate by any amount for any period of time if the period is at least 20
Business Days, the increase is irrevocable during the period and the Board of Directors shall have
made a determination that such increase would be in the best interests of the Corporation, which
determination shall be conclusive. Whenever the Conversion Rate is increased pursuant to the
preceding sentence, the Corporation shall mail to Holders of record of the Series A Preferred Stock
a notice of
18
the increase, which notice will be given at least 15 calendar days prior to the effectiveness
of any such increase, and such notice shall state the increased Conversion Rate and the period
during which it will be in effect.
(vi) If during a period applicable for calculating the Closing Price of Common Stock
or any other security, an event occurs that requires an adjustment to the Conversion Rate, the
Closing Price of such security shall be calculated for such period in a manner determined by the
Corporation to appropriately reflect the impact of such event on the price of such security during
such period. Whenever any provision of this Certificate of Designations requires a calculation of
an average of Closing Prices of Common Stock or any other security over multiple days, appropriate
adjustments shall be made to account for any adjustment to the Conversion Rate that becomes
effective, or any event requiring an adjustment to the Conversion Rate where the Ex-Dividend Date
of the event occurs, at any time during the period during which the average is to be calculated.
(vii) In the event the Common Stock ceases to be traded on an applicable exchange or
applicable market and as a result there is no Ex-Dividend Date with respect to any issuance,
dividend or distribution requiring an adjustment to the Conversion Rate pursuant to this Section
13, the Corporation shall calculate the adjustment using the record date for such issuance,
dividend or distribution in lieu of the Ex-Dividend Date.
(viii) The Corporation shall provide upon the request of a Holder a brief statement
setting forth in reasonable detail reasonable detail the method by which the adjustment to the
Conversion Rate was determined and setting forth the revised Conversion Rate.
14.
Reservation of Common Stock
.
(a) The Corporation shall at all times reserve and keep available out of its
authorized and unissued shares of Common Stock or shares of Common Stock held in the treasury by
the Corporation, solely for issuance upon the conversion of shares of Series A Preferred Stock as
provided in this Certificate of Designations, free from any preemptive or other similar rights,
such number of shares of Common Stock as shall from time to time be issuable upon the conversion of
all the shares of Series A Preferred Stock then outstanding. For purposes of this Section 14(a),
the number of shares of Common Stock that shall be deliverable upon the conversion of all
outstanding shares of Series A Preferred Stock shall be computed as if at the time of computation
all such outstanding shares were held by a single Holder.
(b) Notwithstanding the foregoing, the Corporation shall be entitled to deliver upon
conversion of shares of Series A Preferred Stock, as herein provided, shares of Common Stock
acquired by the Corporation (in lieu of the issuance of authorized and unissued shares of Common
Stock), so long as any such acquired shares are free and clear of all liens, charges, security
interests or encumbrances (other than liens, charges, security interests and other encumbrances
created by the Holders).
(c) All shares of Common Stock delivered upon conversion of the Series A Preferred
Stock shall be duly authorized, validly issued, fully paid and non-assessable, free and clear of
all liens, claims, security interests and other encumbrances (other than liens, charges, security
interests and other encumbrances created by the Holders).
15.
Limitations on Beneficial Ownership
.
Notwithstanding anything to the contrary contained herein, no holder of Series A Preferred
Stock will be entitled to receive shares of Common Stock upon conversion pursuant to Section 8,
Section 9 or Section 11 to the extent (but only to the extent) that such receipt would cause such
converting holder to become, directly or indirectly, a beneficial owner (within the meaning of
Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder) of more
than 9.9% of the shares of Common Stock outstanding at such time, unless such Holder has, prior to
such conversion, received written approval from the Federal Reserve to own Common Stock in excess
of 9.9%, in which case the Corporation shall issue Common Stock, subject to the other limitations
set forth herein, upon conversion up to the maximum amount permitted by such approval. Any
purported delivery of shares of Common Stock upon conversion of Series A Preferred Stock shall be
void and have no effect to the extent (but
19
only to the extent) that such delivery would result in the converting holder becoming the
beneficial owner of more than 9.9% of the shares of Common Stock outstanding at such time.
If any delivery of shares of Common Stock owed to a holder upon conversion of Series A
Preferred Stock is not made, in whole or in part, as a result of the limitation set forth in this
Section 15, the Corporations obligation to make such delivery shall not be extinguished and (i)
the Corporation shall hold any shares of Common Stock not so delivered (the Retained Stock) until
such time as the converting holder gives notice to the Corporation that such delivery would be
permissible pursuant to clauses (iii) or (iv) below; (ii) during the time the Corporation holds
Retained Stock, the converting holder shall not have the right to vote any such Retained Stock nor
shall dividends be payable on such Retained Stock; (iii) as promptly as practical following such
time as the converting holder gives notice to the Corporation that delivery of all or a portion of
the Retained Stock would not result in it being the beneficial owner of more than 9.9% of the
shares of Common Stock outstanding at such time, the Corporation shall deliver to such holder the
shares of Retained Stock that are the subject of the notice and (iv) as promptly as practical
following such time as the converting holder gives notice to the Corporation that such holder has
received approval from the Federal Reserve to own such Retained Stock, the Corporation shall
deliver to such holder the Retained Stock.
16.
Preemptive or Subscription Rights
.
The Holders of Series A Preferred Stock shall not have any preemptive or subscription rights.
17.
Repurchase
.
Subject to the limitations imposed herein, the Corporation may purchase and sell shares of
Series A Preferred Stock from time to time to such extent, in such manner, and upon such terms as
the Board of Directors or any duly authorized committee of the Board of Directors may determine;
provided, however
, that the Corporation shall not use any of its funds for any such purchase when
there are reasonable grounds to believe that the Corporation is, or by such purchase would be,
rendered insolvent.
18.
Converted or Reacquired Shares
.
Shares of Series A Preferred Stock that have been issued and converted or otherwise
repurchased or reacquired by the Corporation shall be restored to the status of authorized and
unissued shares of preferred stock, undesignated as to series and available for future issuance.
19.
Transfer Taxes
.
The Corporation shall pay any and all stock transfer and documentary stamp taxes that may be
payable in respect of any issuance or delivery of shares of Series A Preferred Stock or shares of
Common Stock or other securities issued on account of Series A Preferred Stock pursuant hereto or
certificates representing such shares or securities. The Corporation shall not, however, be
required to pay any such tax that may be payable in respect of any transfer involved in the
issuance or delivery of shares of Series A Preferred Stock or Common Stock or other securities in a
name other than that in which the shares of Series A Preferred Stock with respect to which such
shares or other securities are issued or delivered were registered, or in respect of any payment to
any Person other than a payment to the registered holder thereof, and shall not be required to make
any such issuance, delivery or payment unless and until the Person otherwise entitled to such
issuance, delivery or payment has paid to the Corporation the amount of any such tax or has
established, to the satisfaction of the Corporation, that such tax has been paid or is not payable.
20.
Form
.
Series A Preferred Stock shall be issued in the form attached hereto as Exhibit A (each a
Preferred Certificate), which is hereby incorporated in and expressly made a part of this
Certificate of Designations. The Preferred Certificates may have notations, legends or
endorsements required by law, stock
20
exchange rules, agreements to which the Corporation is subject, if any, or usage (provided
that any such notation, legend or endorsement is in a form acceptable to the Corporation).
21.
Replacement Certificates
.
(a) The Corporation shall replace any mutilated certificate at the Holders expense
upon surrender of that certificate to the Registrar. The Corporation shall replace certificates
that become destroyed, stolen or lost at the Holders expense upon delivery to the Corporation and
the Registrar of satisfactory evidence that the certificate has been destroyed, stolen or lost,
together with any indemnity that may be required by the Registrar and the Corporation.
(b) The Corporation shall not be required to issue any certificates representing the
Series A Preferred Stock on or after any applicable Conversion Date or Mandatory Conversion Date.
In place of the delivery of a replacement certificate following any applicable Conversion Date or
Mandatory Conversion Date, the Registrar, upon delivery of the evidence and indemnity described in
Section 21(a), shall deliver the shares of Common Stock pursuant to the terms of the Series A
Preferred Stock formerly evidenced by the certificate.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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The undersigned corporation has caused this statement to be signed by a duly authorized
officer, who affirms, under penalty of perjury, that the facts set forth herein are true. All
signatures must be in
BLACK INK
.
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WINTRUST FINANCIAL CORPORATION
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By:
Name:
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/s/ David A. Dykstra
David A. Dykstra
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Title:
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Senior Executive
Vice President,
Chief Operating
Officer and
Secretary
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ACKNOWLEDGED:
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By:
Name:
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/s/ David Stoehr
David Stoehr
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Title:
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Chief Financial Officer
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22
EXHIBIT A
FORM OF 8.00% NON-CUMULATIVE PERPETUAL CONVERTIBLE
PREFERRED STOCK, SERIES A
SEE REVERSE FOR LEGEND
Number: [ ]
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8.00% Non-Cumulative Perpetual Convertible Preferred Stock, Series A
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[ ] Shares
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WINTRUST FINANCIAL CORPORATION
FACE OF SECURITY
This certifies that [___] is the owner of [ ] fully paid and non-assessable shares of the
8.00% Non-Cumulative Perpetual Convertible Preferred Stock, Series A, no par value, of Wintrust
Financial Corporation, an Illinois corporation (hereinafter called the Corporation), transferable
only the books of the Corporation by the holder hereof in person or by duly authorized attorney,
upon surrender of this Certificate properly endorsed. This certificate and the shares represented
hereby are issued and shall be held subject to all the provisions of the Amended and Restated
Articles of Incorporation, as amended, of the Corporation and all amendments thereto (copies of
which are on file at the Corporations principal executive offices in Lake Forest, Illinois) to all
of which the holder of this certificate by acceptance hereof assents.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be executed.
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WINTRUST FINANCIAL CORPORATION
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By:
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Name:
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Title:
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By:
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Name:
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Title:
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23
REVERSE OF SECURITY
WINTRUST FINANCIAL CORPORATION
The shares of 8.00% Non-Cumulative Perpetual Convertible Preferred Stock, Series A (the
Series A Preferred Stock) have the preferences and privileges, conversion rights, dividend
rights, liquidation preferences and such other rights and qualifications, limitations and
restrictions as provided in the Certificate of Designations relating to the Series A Preferred
Stock (the Certificate of Designations), in addition to those set forth in the Amended and
Restated Articles of Incorporation of the Corporation, as amended, and the Corporations bylaws,
copies of which shall be furnished by the Corporation to any holder without charge upon the request
addressed to the Secretary of the Corporation at its principal office in Lake Forest, Illinois.
The shares of Series A Preferred Stock are convertible into shares of Common Stock at any time
at the option of the Holder, subject to certain conditions as provided in the Certificate of
Designations. On or after August 26, 2013, the Corporation also has the right to cause some or all
of the Series A Preferred Stock to be converted into shares of Common Stock, subject to certain
conditions as provided in the Certificate of Designations. The preceding description is qualified
in its entirety by reference to the Certificate of Designations.
The Corporation shall furnish to any stockholders, upon request, and without charge, a full
statement of the designations, relative rights, preferences and limitations of the shares of each
class and series authorized to be issued so far as the same have been determined and of the
authority of the Board of Directors to divide the shares into classes or series and to determine
and change the relative rights, preferences and limitations of any class or series. Any such
request should be addressed to the Secretary of the Corporation at its principal office in Lake
Forest, Illinois.
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR
OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER
SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS OF AN
INVESTMENT AGREEMENT BETWEEN THE CORPORATION AND THE HOLDER HEREOF, AND MAY NOT BE SOLD, ASSIGNED,
PLEDGED, TRANSFERRED OR ENCUMBERED EXCEPT IN ACCORDANCE WITH THE TERMS AND PROVISIONS OF SAID
AGREEMENT, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE CORPORATION IN LAKE
FOREST, ILLINOIS AND WILL BE FURNISHED TO THE HOLDER OF THIS CERTIFICATE UPON REQUEST AND WITHOUT
CHARGE.
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NOTICE OF CONVERSION
(To be Executed by the Holder in order to
Convert the 8.00% Non-Cumulative Perpetual Convertible Preferred Stock, Series A)
The undersigned hereby irrevocably elects to convert (the Conversion) 8.00% Non-Cumulative
Perpetual Convertible Preferred Stock, Series A (the Series A Preferred Stock) of Wintrust
Financial Corporation (hereinafter called the Corporation), represented by stock certificate
No(s). [ ] (the Series A Preferred Stock Certificates), into common stock, no par
value, of the Corporation (the Common Stock) according to the conditions of the Certificate of
Designations of the Series A Preferred Stock (the Certificate of Designations), as of the date
written below. If Common Stock is to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto, if any, and is delivering
herewith the Series A Preferred Stock Certificates. No fee will be charged to the holder for any
conversion, except for transfer taxes, if any. Each Series A Preferred Stock Certificate is
attached hereto (or evidence of loss, theft or destruction thereof).
The undersigned represents and warrants that (i) all offers and sales by the undersigned of
the Common Stock, if any, issuable to the undersigned upon conversion of the Series A Preferred
Stock shall be made pursuant to registration of the Common Stock under the Securities Act of 1933,
as amended (the Act), or pursuant to any exemption from registration under the Act and (ii) the
Conversion is in compliance with the requirements of Section 15 of the Certificate of Designations.
Capitalized terms used but not defined herein shall have the meanings ascribed thereto in or
pursuant to the Certificate of Designations.
Date of Conversion:
Shares of Series A Preferred Stock to be Converted:
Shares of Common Stock to be Issued: *
Signature:
Name:
Address:**
Fax No.:
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*
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The Corporation is not required to issue Common Stock until the original Series A Preferred Stock
Certificate(s) (or evidence of loss, theft or destruction thereof) to be converted are received by
the Corporation or the Conversion Agent. The Corporation shall issue and deliver Common Stock to an
overnight courier not later than three business days following receipt of the original Series A
Preferred Stock Certificate(s) to be converted.
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**
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Address where Common Stock and any other payments or certificates shall be sent by the
Corporation.
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ASSIGNMENT
For value received, hereby sell, assign and transfer unto
Please Insert Social Security or Other Identifying Number of Assignee
(Please Print or Typewrite Name and Address, Including Zip Code, of Assignee)
shares of the Capital Stock represented by the within certificate, and do hereby irrevocably
constitute and appoint Attorney to transfer the said stock on the books of the within named
Corporation with full power of substitution in the premises.
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Dated
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NOTICE:
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The Signature to this Assignment Must Correspond with
the Name As Written Upon the Face of the Certificate in
Every Particular, Without Alteration or Enlargement or
Any Change Whatever.
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SIGNATURE GUARANTEED
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(Signature Must Be Guaranteed
by a Member
of a Medallion Signature
Program)
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26
Exhibit 4.1
WARRANT TO PURCHASE COMMON STOCK
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE
DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR
SUCH LAWS. THIS INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS
OF A SECURITIES PURCHASE AGREEMENT BETWEEN THE ISSUER OF THESE SECURITIES AND THE INVESTOR REFERRED
TO THEREIN, A COPY OF WHICH IS ON FILE WITH THE ISSUER. THE SECURITIES REPRESENTED BY THIS
INSTRUMENT MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID AGREEMENT. ANY
SALE OR OTHER TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENT WILL BE VOID.
WARRANT
to purchase
1,643,295
Shares of Common Stock
of WINTRUST FINANCIAL CORPORATION
Issue Date: December 19, 2008
1.
Definitions
. Unless the context otherwise requires, when used herein the following
terms shall have the meanings indicated.
Affiliate
has the meaning ascribed to it in the Purchase Agreement.
Appraisal Procedure
means a procedure whereby two independent appraisers, one chosen by the
Company and one by the Original Warrantholder, shall mutually agree upon the determinations then
the subject of appraisal. Each party shall deliver a notice to the other appointing its appraiser
within 15 days after the Appraisal Procedure is invoked. If within 30 days after appointment of
the two appraisers they are unable to agree upon the amount in question, a third independent
appraiser shall be chosen within 10 days thereafter by the mutual consent of such first two
appraisers. The decision of the third appraiser so appointed and chosen shall be given within 30
days after the selection of such third appraiser. If three appraisers shall be appointed and the
determination of one
appraiser is disparate from the middle determination by more than twice the amount by which
the other determination is disparate from the middle determination, then the determination of such
appraiser shall be excluded, the remaining two determinations shall be averaged and such average
shall be binding and conclusive upon the Company and the Original Warrantholder; otherwise, the
average of all three determinations shall be binding upon the Company and the Original
Warrantholder. The costs of conducting any Appraisal Procedure shall be borne by the Company.
Board of Directors
means the board of directors of the Company, including any duly
authorized committee thereof.
Business Combination
means a merger, consolidation, statutory share exchange or similar
transaction that requires the approval of the Companys stockholders.
business day
means any day except Saturday, Sunday and any day on which banking institutions
in the State of New York generally are authorized or required by law or other governmental actions
to close.
Capital Stock
means (A) with respect to any Person that is a corporation or company, any and
all shares, interests, participations or other equivalents (however designated) of capital or
capital stock of such Person and (B) with respect to any Person that is not a corporation or
company, any and all partnership or other equity interests of such Person.
Charter
means, with respect to any Person, its certificate or articles of incorporation,
articles of association, or similar organizational document.
Common Stock
has the meaning ascribed to it in the Purchase Agreement.
Company
means the Person whose name, corporate or other organizational form and jurisdiction
of organization is set forth in Item 1 of Schedule A hereto.
conversion
has the meaning set forth in Section 13(B).
convertible securities
has the meaning set forth in Section 13(B).
CPP
has the meaning ascribed to it in the Purchase Agreement.
Exchange Act
means the Securities Exchange Act of 1934, as amended, or any successor
statute, and the rules and regulations promulgated thereunder.
Exercise Price
means the amount set forth in Item 2 of Schedule A hereto.
Expiration Time
has the meaning set forth in Section 3.
Fair Market Value
means, with respect to any security or other property, the fair market
value of such security or other property as determined by the Board of Directors, acting in good
faith or, with respect to Section 14, as determined by the
2
Original Warrantholder acting in good faith. For so long as the Original Warrantholder holds
this Warrant or any portion thereof, it may object in writing to the Board of Directors
calculation of fair market value within 10 days of receipt of written notice thereof. If the
Original Warrantholder and the Company are unable to agree on fair market value during the 10-day
period following the delivery of the Original Warrantholders objection, the Appraisal Procedure
may be invoked by either party to determine Fair Market Value by delivering written notification
thereof not later than the 30
th
day after delivery of the Original Warrantholders
objection.
Governmental Entities
has the meaning ascribed to it in the Purchase Agreement.
Initial Number
has the meaning set forth in Section 13(B).
Issue Date
means the date set forth in Item 3 of Schedule A hereto.
Market Price
means, with respect to a particular security, on any given day, the last
reported sale price regular way or, in case no such reported sale takes place on such day, the
average of the last closing bid and ask prices regular way, in either case on the principal
national securities exchange on which the applicable securities are listed or admitted to trading,
or if not listed or admitted to trading on any national securities exchange, the average of the
closing bid and ask prices as furnished by two members of the Financial Industry Regulatory
Authority, Inc. selected from time to time by the Company for that purpose. Market Price shall
be determined without reference to after hours or extended hours trading. If such security is not
listed and traded in a manner that the quotations referred to above are available for the period
required hereunder, the Market Price per share of Common Stock shall be deemed to be (i) in the
event that any portion of the Warrant is held by the Original Warrantholder, the fair market value
per share of such security as determined in good faith by the Original Warrantholder or (ii) in all
other circumstances, the fair market value per share of such security as determined in good faith
by the Board of Directors in reliance on an opinion of a nationally recognized independent
investment banking corporation retained by the Company for this purpose and certified in a
resolution to the Warrantholder. For the purposes of determining the Market Price of the Common
Stock on the trading day preceding, on or following the occurrence of an event, (i) that trading
day shall be deemed to commence immediately after the regular scheduled closing time of trading on
the New York Stock Exchange or, if trading is closed at an earlier time, such earlier time and (ii)
that trading day shall end at the next regular scheduled closing time, or if trading is closed at
an earlier time, such earlier time (for the avoidance of doubt, and as an example, if the Market
Price is to be determined as of the last trading day preceding a specified event and the closing
time of trading on a particular day is 4:00 p.m. and the specified event occurs at 5:00 p.m. on
that day, the Market Price would be determined by reference to such 4:00 p.m. closing price).
Ordinary Cash Dividends
means a regular quarterly cash dividend on shares of Common Stock
out of surplus or net profits legally available therefor (determined in accordance with generally
accepted accounting principles in effect from time to time),
3
provided
that Ordinary Cash Dividends shall not include any cash dividends paid subsequent to
the Issue Date to the extent the aggregate per share dividends paid on the outstanding Common Stock
in any quarter exceed the amount set forth in Item 4 of Schedule A hereto, as adjusted for any
stock split, stock dividend, reverse stock split, reclassification or similar transaction.
Original Warrantholder
means the United States Department of the Treasury. Any actions
specified to be taken by the Original Warrantholder hereunder may only be taken by such Person and
not by any other Warrantholder.
Permitted Transactions
has the meaning set forth in Section 13(B).
Person
has the meaning given to it in Section 3(a)(9) of the Exchange Act and as used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act.
Per Share Fair Market Value
has the meaning set forth in Section 13(C).
Preferred Shares
means the perpetual preferred stock issued to the Original Warrantholder on
the Issue Date pursuant to the Purchase Agreement.
Pro Rata Repurchases
means any purchase of shares of Common Stock by the Company or any
Affiliate thereof pursuant to (A) any tender offer or exchange offer subject to Section 13(e) or
14(e) of the Exchange Act or Regulation 14E promulgated thereunder or (B) any other offer available
to substantially all holders of Common Stock, in the case of both (A) or (B), whether for cash,
shares of Capital Stock of the Company, other securities of the Company, evidences of indebtedness
of the Company or any other Person or any other property (including, without limitation, shares of
Capital Stock, other securities or evidences of indebtedness of a subsidiary), or any combination
thereof, effected while this Warrant is outstanding. The
Effective Date
of a Pro Rata Repurchase
shall mean the date of acceptance of shares for purchase or exchange by the Company under any
tender or exchange offer which is a Pro Rata Repurchase or the date of purchase with respect to any
Pro Rata Repurchase that is not a tender or exchange offer.
Purchase Agreement
means the Securities Purchase Agreement Standard Terms incorporated
into the Letter Agreement, dated as of the date set forth in Item 5 of Schedule A hereto, as
amended from time to time, between the Company and the United States Department of the Treasury
(the
Letter Agreement
), including all annexes and schedules thereto.
Qualified Equity Offering
has the meaning ascribed to it in the Purchase Agreement.
Regulatory Approvals
with respect to the Warrantholder, means, to the extent applicable and
required to permit the Warrantholder to exercise this Warrant for shares of Common Stock and to own
such Common Stock without the Warrantholder being in violation of applicable law, rule or
regulation, the receipt of any necessary approvals and authorizations of, filings and registrations
with, notifications to, or expiration or
4
termination of any applicable waiting period under, the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations thereunder.
SEC
means the U.S. Securities and Exchange Commission.
Securities Act
means the Securities Act of 1933, as amended, or any successor statute, and
the rules and regulations promulgated thereunder.
Shares
has the meaning set forth in Section 2.
trading day
means (A) if the shares of Common Stock are not traded on any national or
regional securities exchange or association or over-the-counter market, a business day or (B) if
the shares of Common Stock are traded on any national or regional securities exchange or
association or over-the-counter market, a business day on which such relevant exchange or quotation
system is scheduled to be open for business and on which the shares of Common Stock (i) are not
suspended from trading on any national or regional securities exchange or association or
over-the-counter market for any period or periods aggregating one half hour or longer; and (ii)
have traded at least once on the national or regional securities exchange or association or
over-the-counter market that is the primary market for the trading of the shares of Common Stock.
U.S. GAAP
means United States generally accepted accounting principles.
Warrantholder
has the meaning set forth in Section 2.
Warrant
means this Warrant, issued pursuant to the Purchase Agreement.
2.
Number of Shares; Exercise Price
. This certifies that, for value received, the
United States Department of the Treasury or its permitted assigns (the
Warrantholder
) is
entitled, upon the terms and subject to the conditions hereinafter set forth, to acquire from the
Company, in whole or in part, after the receipt of all applicable Regulatory Approvals, if any, up
to an aggregate of the number of fully paid and nonassessable shares of Common Stock set forth in
Item 6 of Schedule A hereto, at a purchase price per share of Common Stock equal to the Exercise
Price. The number of shares of Common Stock (the
Shares
) and the Exercise Price are subject to
adjustment as provided herein, and all references to Common Stock, Shares and Exercise Price
herein shall be deemed to include any such adjustment or series of adjustments.
3.
Exercise of Warrant; Term
. Subject to Section 2, to the extent permitted by
applicable laws and regulations, the right to purchase the Shares represented by this Warrant is
exercisable, in whole or in part by the Warrantholder, at any time or from time to time after the
execution and delivery of this Warrant by the Company on the date hereof, but in no event later
than 5:00 p.m., New York City time on the tenth anniversary of the Issue Date (the
Expiration
Time
), by (A) the surrender of this Warrant and Notice of Exercise annexed hereto, duly completed
and executed on behalf of the Warrantholder, at the principal executive office of the Company
located at the address set forth in Item 7 of Schedule A hereto (or such other office or agency of
the Company in the United States as it may designate by notice in writing to the Warrantholder at
the
5
address of the Warrantholder appearing on the books of the Company), and (B) payment of the
Exercise Price for the Shares thereby purchased:
(i) by having the Company withhold, from the shares of Common Stock that would otherwise be
delivered to the Warrantholder upon such exercise, shares of Common stock issuable upon exercise of
the Warrant equal in value to the aggregate Exercise Price as to which this Warrant is so exercised
based on the Market Price of the Common Stock on the trading day on which this Warrant is exercised
and the Notice of Exercise is delivered to the Company pursuant to this Section 3, or
(ii) with the consent of both the Company and the Warrantholder, by tendering in cash, by
certified or cashiers check payable to the order of the Company, or by wire transfer of
immediately available funds to an account designated by the Company.
If the Warrantholder does not exercise this Warrant in its entirety, the Warrantholder will be
entitled to receive from the Company within a reasonable time, and in any event not exceeding three
business days, a new warrant in substantially identical form for the purchase of that number of
Shares equal to the difference between the number of Shares subject to this Warrant and the number
of Shares as to which this Warrant is so exercised. Notwithstanding anything in this Warrant to
the contrary, the Warrantholder hereby acknowledges and agrees that its exercise of this Warrant
for Shares is subject to the condition that the Warrantholder will have first received any
applicable Regulatory Approvals.
4.
Issuance of Shares; Authorization; Listing
. Certificates for Shares issued upon
exercise of this Warrant will be issued in such name or names as the Warrantholder may designate
and will be delivered to such named Person or Persons within a reasonable time, not to exceed three
business days after the date on which this Warrant has been duly exercised in accordance with the
terms of this Warrant. The Company hereby represents and warrants that any Shares issued upon the
exercise of this Warrant in accordance with the provisions of Section 3 will be duly and validly
authorized and issued, fully paid and nonassessable and free from all taxes, liens and charges
(other than liens or charges created by the Warrantholder, income and franchise taxes incurred in
connection with the exercise of the Warrant or taxes in respect of any transfer occurring
contemporaneously therewith). The Company agrees that the Shares so issued will be deemed to have
been issued to the Warrantholder as of the close of business on the date on which this Warrant and
payment of the Exercise Price are delivered to the Company in accordance with the terms of this
Warrant, notwithstanding that the stock transfer books of the Company may then be closed or
certificates representing such Shares may not be actually delivered on such date. The Company will
at all times reserve and keep available, out of its authorized but unissued Common Stock, solely
for the purpose of providing for the exercise of this Warrant, the aggregate number of shares of
Common Stock then issuable upon exercise of this Warrant at any time. The Company will (A)
procure, at its sole expense, the listing of the Shares issuable upon exercise of this Warrant at
any time, subject to issuance or notice of issuance, on all principal stock exchanges on which the
Common Stock is then listed or traded and (B) maintain such listings of such Shares at all times
6
after issuance. The Company will use reasonable best efforts to ensure that the Shares may be
issued without violation of any applicable law or regulation or of any requirement of any
securities exchange on which the Shares are listed or traded.
5.
No Fractional Shares or Scrip
. No fractional Shares or scrip representing
fractional Shares shall be issued upon any exercise of this Warrant. In lieu of any fractional
Share to which the Warrantholder would otherwise be entitled, the Warrantholder shall be entitled
to receive a cash payment equal to the Market Price of the Common Stock on the last trading day
preceding the date of exercise less the pro-rated Exercise Price for such fractional share.
6.
No Rights as Stockholders; Transfer Books
. This Warrant does not entitle the
Warrantholder to any voting rights or other rights as a stockholder of the Company prior to the
date of exercise hereof. The Company will at no time close its transfer books against transfer of
this Warrant in any manner which interferes with the timely exercise of this Warrant.
7.
Charges, Taxes and Expenses
. Issuance of certificates for Shares to the
Warrantholder upon the exercise of this Warrant shall be made without charge to the Warrantholder
for any issue or transfer tax or other incidental expense in respect of the issuance of such
certificates, all of which taxes and expenses shall be paid by the Company.
8.
Transfer/Assignment
.
(A) Subject to compliance with clause (B) of this Section 8, this Warrant and all rights
hereunder are transferable, in whole or in part, upon the books of the Company by the registered
holder hereof in person or by duly authorized attorney, and a new warrant shall be made and
delivered by the Company, of the same tenor and date as this Warrant but registered in the name of
one or more transferees, upon surrender of this Warrant, duly endorsed, to the office or agency of
the Company described in Section 3. All expenses (other than stock transfer taxes) and other
charges payable in connection with the preparation, execution and delivery of the new warrants
pursuant to this Section 8 shall be paid by the Company.
(B) The transfer of the Warrant and the Shares issued upon exercise of the Warrant are subject
to the restrictions set forth in Section 4.4 of the Purchase Agreement. If and for so long as
required by the Purchase Agreement, this Warrant shall contain the legends as set forth in Sections
4.2(a) and 4.2(b) of the Purchase Agreement.
9.
Exchange and Registry of Warrant
. This Warrant is exchangeable, upon the surrender
hereof by the Warrantholder to the Company, for a new warrant or warrants of like tenor and
representing the right to purchase the same aggregate number of Shares. The Company shall maintain
a registry showing the name and address of the Warrantholder as the registered holder of this
Warrant. This Warrant may be surrendered for exchange or exercise in accordance with its terms, at
the office of the Company, and
7
the Company shall be entitled to rely in all respects, prior to written notice to the
contrary, upon such registry.
10.
Loss, Theft, Destruction or Mutilation of Warrant
. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and in the case of any such loss, theft or destruction, upon receipt of a bond, indemnity
or security reasonably satisfactory to the Company, or, in the case of any such mutilation, upon
surrender and cancellation of this Warrant, the Company shall make and deliver, in lieu of such
lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same aggregate number of Shares as provided for in such lost, stolen,
destroyed or mutilated Warrant.
11.
Saturdays, Sundays, Holidays, etc
. If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall not be a business day,
then such action may be taken or such right may be exercised on the next succeeding day that is a
business day.
12.
Rule 144 Information
. The Company covenants that it will use its reasonable best
efforts to timely file all reports and other documents required to be filed by it under the
Securities Act and the Exchange Act and the rules and regulations promulgated by the SEC thereunder
(or, if the Company is not required to file such reports, it will, upon the request of any
Warrantholder, make publicly available such information as necessary to permit sales pursuant to
Rule 144 under the Securities Act), and it will use reasonable best efforts to take such further
action as any Warrantholder may reasonably request, in each case to the extent required from time
to time to enable such holder to, if permitted by the terms of this Warrant and the Purchase
Agreement, sell this Warrant without registration under the Securities Act within the limitation of
the exemptions provided by (A) Rule 144 under the Securities Act, as such rule may be amended from
time to time, or (B) any successor rule or regulation hereafter adopted by the SEC. Upon the
written request of any Warrantholder, the Company will deliver to such Warrantholder a written
statement that it has complied with such requirements.
13.
Adjustments and Other Rights
. The Exercise Price and the number of Shares
issuable upon exercise of this Warrant shall be subject to adjustment from time to time as follows;
provided
, that if more than one subsection of this Section 13 is applicable to a single event, the
subsection shall be applied that produces the largest adjustment and no single event shall cause an
adjustment under more than one subsection of this Section 13 so as to result in duplication:
(A)
Stock Splits, Subdivisions, Reclassifications or Combinations
. If the Company
shall (i) declare and pay a dividend or make a distribution on its Common Stock in shares of Common
Stock, (ii) subdivide or reclassify the outstanding shares of Common Stock into a greater number of
shares, or (iii) combine or reclassify the outstanding shares of Common Stock into a smaller number
of shares, the number of Shares issuable upon exercise of this Warrant at the time of the record
date for such dividend or distribution or the effective date of such subdivision, combination or
8
reclassification shall be proportionately adjusted so that the Warrantholder after such date
shall be entitled to purchase the number of shares of Common Stock which such holder would have
owned or been entitled to receive in respect of the shares of Common Stock subject to this Warrant
after such date had this Warrant been exercised immediately prior to such date. In such event, the
Exercise Price in effect at the time of the record date for such dividend or distribution or the
effective date of such subdivision, combination or reclassification shall be adjusted to the number
obtained by dividing (x) the product of (1) the number of Shares issuable upon the exercise of this
Warrant before such adjustment and (2) the Exercise Price in effect immediately prior to the record
or effective date, as the case may be, for the dividend, distribution, subdivision, combination or
reclassification giving rise to this adjustment by (y) the new number of Shares issuable upon
exercise of the Warrant determined pursuant to the immediately preceding sentence.
(B)
Certain Issuances of Common Shares or Convertible Securities
. Until the earlier
of (i) the date on which the Original Warrantholder no longer holds this Warrant or any portion
thereof and (ii) the third anniversary of the Issue Date, if the Company shall issue shares of
Common Stock (or rights or warrants or other securities exercisable or convertible into or
exchangeable (collectively, a
conversion
) for shares of Common Stock) (collectively,
convertible
securities
) (other than in Permitted Transactions (as defined below) or a transaction to which
subsection (A) of this Section 13 is applicable) without consideration or at a consideration per
share (or having a conversion price per share) that is less than 90% of the Market Price on the
last trading day preceding the date of the agreement on pricing such shares (or such convertible
securities) then, in such event:
(A) the number of Shares issuable upon the exercise of this Warrant immediately
prior to the date of the agreement on pricing of such shares (or of such
convertible securities) (the
Initial Number
) shall be increased to the number
obtained by multiplying the Initial Number by a fraction (A) the numerator of which
shall be the sum of (x) the number of shares of Common Stock of the Company
outstanding on such date and (y) the number of additional shares of Common Stock
issued (or into which convertible securities may be exercised or convert) and (B)
the denominator of which shall be the sum of (I) the number of shares of Common
Stock outstanding on such date and (II) the number of shares of Common Stock which
the aggregate consideration receivable by the Company for the total number of
shares of Common Stock so issued (or into which convertible securities may be
exercised or convert) would purchase at the Market Price on the last trading day
preceding the date of the agreement on pricing such shares (or such convertible
securities); and
(B) the Exercise Price payable upon exercise of the Warrant shall be adjusted by
multiplying such Exercise Price in effect immediately prior to the date of the
agreement on pricing of such shares (or of such convertible securities) by a
fraction, the numerator of which shall be the number of shares of Common Stock
issuable upon exercise of this Warrant prior to such date and the denominator of
which shall be the number of shares of
9
Common Stock issuable upon exercise of this Warrant immediately after the
adjustment described in clause (A) above.
For purposes of the foregoing, the aggregate consideration receivable by the Company in
connection with the issuance of such shares of Common Stock or convertible securities shall be
deemed to be equal to the sum of the net offering price (including the Fair Market Value of any
non-cash consideration and after deduction of any related expenses payable to third parties) of all
such securities plus the minimum aggregate amount, if any, payable upon exercise or conversion of
any such convertible securities into shares of Common Stock; and
Permitted Transactions
shall
mean issuances (i) as consideration for or to fund the acquisition of businesses and/or related
assets, (ii) in connection with employee benefit plans and compensation related arrangements in the
ordinary course and consistent with past practice approved by the Board of Directors, (iii) in
connection with a public or broadly marketed offering and sale of Common Stock or convertible
securities for cash conducted by the Company or its affiliates pursuant to registration under the
Securities Act or Rule 144A thereunder on a basis consistent with capital raising transactions by
comparable financial institutions and (iv) in connection with the exercise of preemptive rights on
terms existing as of the Issue Date. Any adjustment made pursuant to this Section 13(B) shall
become effective immediately upon the date of such issuance.
(C)
Other Distributions
. In case the Company shall fix a record date for the making
of a distribution to all holders of shares of its Common Stock of securities, evidences of
indebtedness, assets, cash, rights or warrants (excluding Ordinary Cash Dividends, dividends of its
Common Stock and other dividends or distributions referred to in Section 13(A)), in each such case,
the Exercise Price in effect prior to such record date shall be reduced immediately thereafter to
the price determined by multiplying the Exercise Price in effect immediately prior to the reduction
by the quotient of (x) the Market Price of the Common Stock on the last trading day preceding the
first date on which the Common Stock trades regular way on the principal national securities
exchange on which the Common Stock is listed or admitted to trading without the right to receive
such distribution, minus the amount of cash and/or the Fair Market Value of the securities,
evidences of indebtedness, assets, rights or warrants to be so distributed in respect of one share
of Common Stock (such amount and/or Fair Market Value, the
Per Share Fair Market Value
) divided
by (y) such Market Price on such date specified in clause (x); such adjustment shall be made
successively whenever such a record date is fixed. In such event, the number of Shares issuable
upon the exercise of this Warrant shall be increased to the number obtained by dividing (x) the
product of (1) the number of Shares issuable upon the exercise of this Warrant before such
adjustment, and (2) the Exercise Price in effect immediately prior to the distribution giving rise
to this adjustment by (y) the new Exercise Price determined in accordance with the immediately
preceding sentence. In the case of adjustment for a cash dividend that is, or is coincident with,
a regular quarterly cash dividend, the Per Share Fair Market Value would be reduced by the per
share amount of the portion of the cash dividend that would constitute an Ordinary Cash Dividend.
In the event that such distribution is not so made, the Exercise Price and the number of Shares
issuable upon exercise of this Warrant then in effect shall be readjusted, effective as of the date
when the Board of Directors determines not to
10
distribute such shares, evidences of indebtedness, assets, rights, cash or warrants, as the
case may be, to the Exercise Price that would then be in effect and the number of Shares that would
then be issuable upon exercise of this Warrant if such record date had not been fixed.
(D)
Certain Repurchases of Common Stock
. In case the Company effects a Pro Rata
Repurchase of Common Stock, then the Exercise Price shall be reduced to the price determined by
multiplying the Exercise Price in effect immediately prior to the Effective Date of such Pro Rata
Repurchase by a fraction of which the numerator shall be (i) the product of (x) the number of
shares of Common Stock outstanding immediately before such Pro Rata Repurchase and (y) the Market
Price of a share of Common Stock on the trading day immediately preceding the first public
announcement by the Company or any of its Affiliates of the intent to effect such Pro Rata
Repurchase, minus (ii) the aggregate purchase price of the Pro Rata Repurchase, and of which the
denominator shall be the product of (i) the number of shares of Common Stock outstanding
immediately prior to such Pro Rata Repurchase minus the number of shares of Common Stock so
repurchased and (ii) the Market Price per share of Common Stock on the trading day immediately
preceding the first public announcement by the Company or any of its Affiliates of the intent to
effect such Pro Rata Repurchase. In such event, the number of shares of Common Stock issuable upon
the exercise of this Warrant shall be increased to the number obtained by dividing (x) the product
of (1) the number of Shares issuable upon the exercise of this Warrant before such adjustment, and
(2) the Exercise Price in effect immediately prior to the Pro Rata Repurchase giving rise to this
adjustment by (y) the new Exercise Price determined in accordance with the immediately preceding
sentence. For the avoidance of doubt, no increase to the Exercise Price or decrease in the number
of Shares issuable upon exercise of this Warrant shall be made pursuant to this Section 13(D).
(E)
Business Combinations
. In case of any Business Combination or reclassification of
Common Stock (other than a reclassification of Common Stock referred to in Section 13(A)), the
Warrantholders right to receive Shares upon exercise of this Warrant shall be converted into the
right to exercise this Warrant to acquire the number of shares of stock or other securities or
property (including cash) which the Common Stock issuable (at the time of such Business Combination
or reclassification) upon exercise of this Warrant immediately prior to such Business Combination
or reclassification would have been entitled to receive upon consummation of such Business
Combination or reclassification; and in any such case, if necessary, the provisions set forth
herein with respect to the rights and interests thereafter of the Warrantholder shall be
appropriately adjusted so as to be applicable, as nearly as may reasonably be, to the
Warrantholders right to exercise this Warrant in exchange for any shares of stock or other
securities or property pursuant to this paragraph. In determining the kind and amount of stock,
securities or the property receivable upon exercise of this Warrant following the consummation of
such Business Combination, if the holders of Common Stock have the right to elect the kind or
amount of consideration receivable upon consummation of such Business Combination, then the
consideration that the Warrantholder shall be entitled to receive upon exercise shall be deemed to
be the types and amounts of consideration received by the majority of all holders of the shares of
11
common stock that affirmatively make an election (or of all such holders if none make an
election).
(F)
Rounding of Calculations; Minimum Adjustments
. All calculations under this
Section 13 shall be made to the nearest one-tenth (1/10th) of a cent or to the nearest one
hundredth (1/100th) of a share, as the case may be. Any provision of this Section 13 to the
contrary notwithstanding, no adjustment in the Exercise Price or the number of Shares into which
this Warrant is exercisable shall be made if the amount of such adjustment would be less than $0.01
or one-tenth (1/10th) of a share of Common Stock, but any such amount shall be carried forward and
an adjustment with respect thereto shall be made at the time of and together with any subsequent
adjustment which, together with such amount and any other amount or amounts so carried forward,
shall aggregate $0.01 or 1/10th of a share of Common Stock, or more.
(G)
Timing of Issuance of Additional Common Stock Upon Certain Adjustments
. In any
case in which the provisions of this Section 13 shall require that an adjustment shall become
effective immediately after a record date for an event, the Company may defer until the occurrence
of such event (i) issuing to the Warrantholder of this Warrant exercised after such record date and
before the occurrence of such event the additional shares of Common Stock issuable upon such
exercise by reason of the adjustment required by such event over and above the shares of Common
Stock issuable upon such exercise before giving effect to such adjustment and (ii) paying to such
Warrantholder any amount of cash in lieu of a fractional share of Common Stock;
provided, however,
that the Company upon request shall deliver to such Warrantholder a due bill or other appropriate
instrument evidencing such Warrantholders right to receive such additional shares, and such cash,
upon the occurrence of the event requiring such adjustment.
(H)
Completion of Qualified Equity Offering
. In the event the Company (or any
successor by Business Combination) completes one or more Qualified Equity Offerings on or prior to
December 31, 2009 that result in the Company (or any such successor ) receiving aggregate gross
proceeds of not less than 100% of the aggregate liquidation preference of the Preferred Shares (and
any preferred stock issued by any such successor to the Original Warrantholder under the CPP), the
number of shares of Common Stock underlying the portion of this Warrant then held by the Original
Warrantholder shall be thereafter reduced by a number of shares of Common Stock equal to the
product of (i) 0.5 and (ii) the number of shares underlying the Warrant on the Issue Date (adjusted
to take into account all other theretofore made adjustments pursuant to this Section 13).
(I)
Other Events
. For so long as the Original Warrantholder holds this Warrant or any
portion thereof, if any event occurs as to which the provisions of this Section 13 are not strictly
applicable or, if strictly applicable, would not, in the good faith judgment of the Board of
Directors of the Company, fairly and adequately protect the purchase rights of the Warrants in
accordance with the essential intent and principles of such provisions, then the Board of Directors
shall make such adjustments in the application of such provisions, in accordance with such
essential intent and principles, as
12
shall be reasonably necessary, in the good faith opinion of the Board of Directors, to protect
such purchase rights as aforesaid. The Exercise Price or the number of Shares into which this
Warrant is exercisable shall not be adjusted in the event of a change in the par value of the
Common Stock or a change in the jurisdiction of incorporation of the Company.
(J)
Statement Regarding Adjustments
. Whenever the Exercise Price or the number of
Shares into which this Warrant is exercisable shall be adjusted as provided in Section 13, the
Company shall forthwith file at the principal office of the Company a statement showing in
reasonable detail the facts requiring such adjustment and the Exercise Price that shall be in
effect and the number of Shares into which this Warrant shall be exercisable after such adjustment,
and the Company shall also cause a copy of such statement to be sent by mail, first class postage
prepaid, to each Warrantholder at the address appearing in the Companys records.
(K)
Notice of Adjustment Event
. In the event that the Company shall propose to take
any action of the type described in this Section 13 (but only if the action of the type described
in this Section 13 would result in an adjustment in the Exercise Price or the number of Shares into
which this Warrant is exercisable or a change in the type of securities or property to be delivered
upon exercise of this Warrant), the Company shall give notice to the Warrantholder, in the manner
set forth in Section 13(J), which notice shall specify the record date, if any, with respect to any
such action and the approximate date on which such action is to take place. Such notice shall also
set forth the facts with respect thereto as shall be reasonably necessary to indicate the effect on
the Exercise Price and the number, kind or class of shares or other securities or property which
shall be deliverable upon exercise of this Warrant. In the case of any action which would require
the fixing of a record date, such notice shall be given at least 10 days prior to the date so
fixed, and in case of all other action, such notice shall be given at least 15 days prior to the
taking of such proposed action. Failure to give such notice, or any defect therein, shall not
affect the legality or validity of any such action.
(L)
Proceedings Prior to Any Action Requiring Adjustment
. As a condition precedent to
the taking of any action which would require an adjustment pursuant to this Section 13, the Company
shall take any action which may be necessary, including obtaining regulatory, New York Stock
Exchange, NASDAQ Stock Market or other applicable national securities exchange or stockholder
approvals or exemptions, in order that the Company may thereafter validly and legally issue as
fully paid and nonassessable all shares of Common Stock that the Warrantholder is entitled to
receive upon exercise of this Warrant pursuant to this Section 13.
(M)
Adjustment Rules
. Any adjustments pursuant to this Section 13 shall be made
successively whenever an event referred to herein shall occur. If an adjustment in Exercise Price
made hereunder would reduce the Exercise Price to an amount below par value of the Common Stock,
then such adjustment in Exercise Price made hereunder shall reduce the Exercise Price to the par
value of the Common Stock.
13
14.
Exchange
. At any time following the date on which the shares of Common Stock of
the Company are no longer listed or admitted to trading on a national securities exchange (other
than in connection with any Business Combination), the Original Warrantholder may cause the Company
to exchange all or a portion of this Warrant for an economic interest (to be determined by the
Original Warrantholder after consultation with the Company) of the Company classified as permanent
equity under U.S. GAAP having a value equal to the Fair Market Value of the portion of the Warrant
so exchanged. The Original Warrantholder shall calculate any Fair Market Value required to be
calculated pursuant to this Section 14, which shall not be subject to the Appraisal Procedure.
15.
No Impairment
. The Company will not, by amendment of its Charter or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the
terms to be observed or performed hereunder by the Company, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in taking of all such action
as may be necessary or appropriate in order to protect the rights of the Warrantholder.
16.
Governing Law
.
This Warrant will be governed by and construed in accordance with
the federal law of the United States if and to the extent such law is applicable, and otherwise in
accordance with the laws of the State of New York applicable to contracts made and to be performed
entirely within such State. Each of the Company and the Warrantholder agrees (a) to submit to the
exclusive jurisdiction and venue of the United States District Court for the District of Columbia
for any civil action, suit or proceeding arising out of or relating to this Warrant or the
transactions contemplated hereby, and (b) that notice may be served upon the Company at the address
in Section 20 below and upon the Warrantholder at the address for the Warrantholder set forth in
the registry maintained by the Company pursuant to Section 9 hereof. To the extent permitted by
applicable law, each of the Company and the Warrantholder hereby unconditionally waives trial by
jury in any civil legal action or proceeding relating to the Warrant or the transactions
contemplated hereby or thereby.
17.
Binding Effect
. This Warrant shall be binding upon any successors or assigns of
the Company.
18.
Amendments
. This Warrant may be amended and the observance of any term of this
Warrant may be waived only with the written consent of the Company and the Warrantholder.
19.
Prohibited Actions
. The Company agrees that it will not take any action which
would entitle the Warrantholder to an adjustment of the Exercise Price if the total number of
shares of Common Stock issuable after such action upon exercise of this Warrant, together with all
shares of Common Stock then outstanding and all shares of Common Stock then issuable upon the
exercise of all outstanding options, warrants,
14
conversion and other rights, would exceed the total number of shares of Common Stock then
authorized by its Charter.
20.
Notices
. Any notice, request, instruction or other document to be given hereunder
by any party to the other will be in writing and will be deemed to have been duly given (a) on the
date of delivery if delivered personally, or by facsimile, upon confirmation of receipt, or (b) on
the second business day following the date of dispatch if delivered by a recognized next day
courier service. All notices hereunder shall be delivered as set forth in Item 8 of Schedule A
hereto, or pursuant to such other instructions as may be designated in writing by the party to
receive such notice.
21.
Entire Agreement
. This Warrant, the forms attached hereto and Schedule A hereto
(the terms of which are incorporated by reference herein), and the Letter Agreement (including all
documents incorporated therein), contain the entire agreement between the parties with respect to
the subject matter hereof and supersede all prior and contemporaneous arrangements or undertakings
with respect thereto.
[Remainder of page intentionally left blank]
15
[Form of Notice of Exercise]
Date:
TO:
[Company]
RE: Election to Purchase Common Stock
The undersigned, pursuant to the provisions set forth in the attached Warrant, hereby agrees
to subscribe for and purchase the number of shares of the Common Stock set forth below covered by
such Warrant. The undersigned, in accordance with Section 3 of the Warrant, hereby agrees to pay
the aggregate Exercise Price for such shares of Common Stock in the manner set forth below. A new
warrant evidencing the remaining shares of Common Stock covered by such Warrant, but not yet
subscribed for and purchased, if any, should be issued in the name set forth below.
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Number of Shares of Common Stock
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Method of Payment of Exercise Price (note if cashless exercise pursuant to Section 3(i) of the
Warrant or cash exercise pursuant to Section 3(ii) of the Warrant, with consent of the Company and
the Warrantholder)
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Aggregate Exercise Price:
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16
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by a duly
authorized officer.
Dated:
December 19, 2008
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COMPANY: WINTRUST FINANCIAL CORPORATION
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By:
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/s/ David A. Dykstra
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Name:
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David A. Dykstra
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Title: Senior Executive Vice President,
Chief Operating Officer and Secretary
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Attest:
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By:
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/s/ David Stoehr
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Name:
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David Stoehr
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Title:
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Chief Financial Officer
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[Signature Page to Warrant]
17
SCHEDULE A
Item 1
Name: Wintrust Financial Corporation
Corporate or other organizational form: Corporation
Jurisdiction of organization: Illinois
Item 2
Exercise Price: 22.82
Item 3
Issue Date: December 19, 2008
Item 4
Amount of last dividend declared prior to the Issue Date: $0.18 per share
Item 5
Date of Letter Agreement between the Company and the United States Department of the Treasury:
December 19, 2008
Item 6
Number of shares of Common Stock: 1,643,295
Item 7
Companys address:
Wintrust Financial Corporation
727 North Bank Lane
Lake Forest, IL 60045
Item 8
Notice information:
If to the Company:
Wintrust Financial Corporation
727 North Bank Lane
Lake Forest, IL 60045
Attention: Chief Operating Officer
Telephone: (847) 615-4034
Facsimile: (847) 615-4091
with a copy to:
Sidley Austin LLP
One South Dearborn Street
Chicago, IL 60603
Attention: Lisa Reategui
Telephone: (312) 853-7833
Facsimile: (312) 853-7036
19
Exhibit 10.1
United States Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220
Dear Ladies and Gentlemen:
The company set forth on the signature page hereto (the
Company
) intends to issue in a
private placement the number of shares of a series of its preferred stock set forth on Schedule A
hereto (the
Preferred Shares
) and a warrant to purchase the number of shares of its common stock
set forth on Schedule A hereto (the
Warrant
and, together with the Preferred Shares, the
"
Purchased Securities
) and the United States Department of the Treasury (the
Investor
) intends
to purchase from the Company the Purchased Securities.
The purpose of this letter agreement is to confirm the terms and conditions of the purchase by
the Investor of the Purchased Securities. Except to the extent supplemented or superseded by the
terms set forth herein or in the Schedules hereto, the provisions contained in the Securities
Purchase Agreement Standard Terms attached hereto as Exhibit A (the
Securities Purchase
Agreement
) are incorporated by reference herein. Terms that are defined in the Securities
Purchase Agreement are used in this letter agreement as so defined. In the event of any
inconsistency between this letter agreement and the Securities Purchase Agreement, the terms of
this letter agreement shall govern.
Each of the Company and the Investor hereby confirms its agreement with the other party with
respect to the issuance by the Company of the Purchased Securities and the purchase by the Investor
of the Purchased Securities pursuant to this letter agreement and the Securities Purchase Agreement
on the terms specified on Schedule A hereto.
This letter agreement (including the Schedules hereto) and the Securities Purchase Agreement
(including the Annexes thereto) and the Warrant constitute the entire agreement, and supersede all
other prior agreements, understandings, representations and warranties, both written and oral,
between the parties, with respect to the subject matter hereof. This letter agreement constitutes
the Letter Agreement referred to in the Securities Purchase Agreement.
This letter agreement may be executed in any number of separate counterparts, each such
counterpart being deemed to be an original instrument, and all such counterparts will together
constitute the same agreement. Executed signature pages to this letter agreement may be delivered
by facsimile and such facsimiles will be deemed as sufficient as if actual signature pages had been
delivered.
* * *
In witness whereof, this letter agreement has been duly executed and delivered by the duly
authorized representatives of the parties hereto as of the date written below.
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UNITED STATES DEPARTMENT OF THE TREASURY
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By:
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/s/
Neel Kashkari
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Name:
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Neel Kashkari
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Title:
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Interim Assistant Secretary For Financial
Stability
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COMPANY: WINTRUST FINANCIAL CORPORATION
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By:
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/s/ David A. Dykstra
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Name:
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David A. Dykstra
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Title:
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Senior Executive Vice
President, Chief Operating Officer
and Secretary
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Date: December 19, 2008
EXHIBIT A
SECURITIES PURCHASE AGREEMENT
EXHIBIT A
SECURITIES
PURCHASE AGREEMENT
STANDARD TERMS
TABLE OF CONTENTS
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Page
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Article I
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Purchase; Closing
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1.1
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Purchase
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1
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1.2
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Closing
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2
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1.3
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Interpretation
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4
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Article II
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Representations and Warranties
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2.1
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Disclosure
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4
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2.2
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Representations and Warranties of the Company
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5
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Article III
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Covenants
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3.1
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Commercially Reasonable Efforts
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13
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3.2
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Expenses
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14
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3.3
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Sufficiency of Authorized Common Stock; Exchange Listing
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14
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3.4
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Certain Notifications Until Closing
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14
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3.5
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Access, Information and Confidentiality
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15
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Article IV
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Additional Agreements
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4.1
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Purchase for Investment
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15
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4.2
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Legends
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16
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4.3
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Certain Transactions
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17
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4.4
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Transfer of Purchased Securities and Warrant
Shares; Restrictions on Exercise of the Warrant
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17
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4.5
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Registration Rights
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18
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4.6
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Voting of Warrant Shares
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29
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4.7
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Depositary Shares
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29
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4.8
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Restriction on Dividends and Repurchases
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29
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4.9
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Repurchase of Investor Securities
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31
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4.10
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Executive Compensation
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32
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-i-
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Page
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Article V
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Miscellaneous
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5.1
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Termination
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32
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5.2
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Survival of Representations and Warranties
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33
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5.3
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Amendment
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33
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5.4
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Waiver of Conditions
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33
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5.5
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Governing Law: Submission to Jurisdiction, Etc.
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33
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5.6
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Notices
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33
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5.7
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Definitions
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34
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5.8
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Assignment
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34
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5.9
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Severability
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34
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5.10
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No Third Party Beneficiaries
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35
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-ii-
LIST OF ANNEXES
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ANNEX A:
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FORM OF CERTIFICATE OF DESIGNATIONS FOR PREFERRED STOCK
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ANNEX B:
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FORM OF WAIVER
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ANNEX C:
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FORM OF OPINION
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ANNEX D:
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FORM OF WARRANT
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-iii-
INDEX OF DEFINED TERMS
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Location of
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Term
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Definition
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Affiliate
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5.7(b)
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Agreement
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Recitals
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Appraisal Procedure
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4.9(c)(i)
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Appropriate Federal Banking Agency
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2.2(s)
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Bankruptcy Exceptions
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2.2(d)
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Benefit Plans
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1.2(d)(iv)
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Board of Directors
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2.2(f)
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Business Combination
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4.4
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business day
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1.3
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Capitalization Date
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2.2(b)
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Certificate of Designations
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1.2(d)(iii)
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Charter
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l.2(d)(iii)
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Closing
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1.2(a)
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Closing Date
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1.2(a)
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Code
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2.2(n)
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Common Stock
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Recitals
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Company
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Recitals
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Company Financial Statements
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2.2(h)
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Company Material Adverse Effect
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2.1(a)
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Company Reports
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2.2(i)(i)
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Company Subsidiary; Company Subsidiaries
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2.2(i)(i)
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control; controlled by; under common control with
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5.7(b)
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Controlled Group
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2.2(n)
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CPP
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Recitals
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EESA
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1.2(d)(iv)
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ERISA
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2.2(n)
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Exchange Act
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2.1(b)
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Fair Market Value
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4.9(c)(ii)
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GAAP
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2.1(a)
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Governmental Entities
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1.2(c)
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Holder
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4.5(k)(i)
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Holders Counsel
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4.5(k)(ii)
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Indemnitee
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4.5(g)(i)
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Information
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3.5(b)
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Initial Warrant Shares
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Recitals
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Investor
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Recitals
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Junior Stock
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4.8(c)
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knowledge of the Company; Companys knowledge
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5.7(c)
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Last Fiscal Year
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2.1(b)
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Letter Agreement
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Recitals
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officers
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5.7(c)
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-iv-
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Location of
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Term
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Definition
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Parity Stock
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4.8(c)
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Pending Underwritten Offering
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4.5(1)
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Permitted Repurchases
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4.8(a)(ii)
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Piggyback Registration
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4.5(a)(iv)
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Plan
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2.2(n)
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Preferred Shares
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Recitals
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Preferred Stock
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Recitals
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Previously Disclosed
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2.1(b)
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Proprietary Rights
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2.2(u)
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Purchase
|
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Recitals
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Purchase Price
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1.1
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Purchased Securities
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Recitals
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Qualified Equity Offering
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4.4
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register; registered; registration
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4.5(k)(iii)
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Registrable Securities
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4.5(k)(iv)
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Registration Expenses
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4.5(k)(v)
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Regulatory Agreement
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2.2(s)
|
Rule 144; Rule 144A; Rule 159A; Rule 405; Rule 415
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4.5(k)(vi)
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Schedules
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Recitals
|
SEC
|
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2.1(b)
|
Securities Act
|
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2.2(a)
|
Selling Expenses
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4.5(k)(vii)
|
Senior Executive Officers
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4.10
|
Share Dilution Amount
|
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4.8(a)(ii)
|
Shelf Registration Statement
|
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4.5(a)(ii)
|
Signing Date
|
|
2.1(a)
|
Special Registration
|
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4.5(i)
|
Stockholder Proposals
|
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3.1(b)
|
subsidiary
|
|
5.8(a)
|
Tax; Taxes
|
|
2.2(o)
|
Transfer
|
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4.4
|
Warrant
|
|
Recitals
|
Warrant Shares
|
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2.2(d)
|
-v-
SECURITIES PURCHASE AGREEMENT STANDARD TERMS
Recitals:
WHEREAS, the United States Department of the Treasury (the
Investor
) may from time to time
agree to purchase shares of preferred stock and warrants from eligible financial institutions which
elect to participate in the Troubled Asset Relief Program Capital Purchase Program (
CPP
);
WHEREAS, an eligible financial institution electing to participate in the CPP and issue
securities to the Investor (referred to herein as the
Company
) shall enter into a letter
agreement (the
Letter Agreement
) with the Investor which incorporates this Securities Purchase
Agreement Standard Terms;
WHEREAS, the Company agrees to expand the flow of credit to U.S. consumers and businesses on
competitive terms to promote the sustained growth and vitality of the U.S. economy;
WHEREAS, the Company agrees to work diligently, under existing programs, to modify the terms
of residential mortgages as appropriate to strengthen the health of the U.S. housing market;
WHEREAS, the Company intends to issue in a private placement the number of shares of the
series of its Preferred Stock (
Preferred Stock
) set forth on
Schedule A
to the Letter
Agreement (the
Preferred Shares
) and a warrant to purchase the number of shares of its Common
Stock (
Common Stock
) set forth on
Schedule A
to the Letter Agreement (the
Initial
Warrant Shares
) (the
Warrant
and, together with the Preferred Shares, the
Purchased
Securities
) and the Investor intends to purchase (the
Purchase
) from the Company the Purchased
Securities; and
WHEREAS,
the Purchase will be governed by this Securities Purchase Agreement Standard Terms
and the Letter Agreement, including the schedules thereto (the
Schedules
), specifying additional
terms of the Purchase. This Securities Purchase Agreement Standard Terms (including the Annexes
hereto) and the Letter Agreement (including the Schedules thereto) are together referred to as this
Agreement. All references in this Securities Purchase Agreement Standard Terms to
Schedules are to the Schedules attached to the Letter Agreement.
NOW, THEREFORE,
in consideration of the premises, and of the representations, warranties,
covenants and agreements set forth herein, the parties agree as follows:
Article I
Purchase; Closing
1.1
Purchase
. On the terms and subject to the conditions set forth in this Agreement,
the Company agrees to sell to the Investor, and the Investor agrees to purchase from the Company,
at the Closing (as hereinafter defined), the Purchased Securities for the price set forth on
Schedule A
(the
Purchase Price
).
1.2
Closing
.
(a) On the terms and subject to the conditions set forth in this Agreement, the closing of the
Purchase (the
Closing
) will take place at the location specified in
Schedule A
, at the
time and on the date set forth in
Schedule A
or as soon as practicable thereafter, or at
such other place, time and date as shall be agreed between the Company and the Investor. The time
and date on which the Closing occurs is referred to in this Agreement as the
Closing Date
.
(b) Subject to the fulfillment or waiver of the conditions to the Closing in this Section 1.2,
at the Closing the Company will deliver the Preferred Shares and the Warrant, in each case as
evidenced by one or more certificates dated the Closing Date and bearing appropriate legends as
hereinafter provided for, in exchange for payment in full of the Purchase Price by wire transfer of
immediately available United States funds to a bank account designated by the Company on
Schedule A
.
(c) The respective obligations of each of the Investor and the Company to consummate the
Purchase are subject to the fulfillment (or waiver by the Investor and the Company, as applicable)
prior to the Closing of the conditions that (i) any approvals or authorizations of all United
States and other governmental, regulatory or judicial authorities (collectively,
Governmental
Entities
) required for the consummation of the Purchase shall have been obtained or made in form
and substance reasonably satisfactory to each party and shall be in full force and effect and all
waiting periods required by United States and other applicable law, if any, shall have expired and
(ii) no provision of any applicable United States or other law and no judgment, injunction, order
or decree of any Governmental Entity shall prohibit the purchase and sale of the Purchased
Securities as contemplated by this Agreement.
(d) The obligation of the Investor to consummate the Purchase is also subject to the
fulfillment (or waiver by the Investor) at or prior to the Closing of each of the following
conditions:
(i) (A) the representations and warranties of the Company set forth in (x) Section
2.2(g) of this Agreement shall be true and correct in all respects as though made on and as
of the Closing Date, (y) Sections 2.2(a) through (f) shall be true and correct in all
material respects as though made on and as of the Closing Date (other than representations
and warranties that by their terms speak as of another date, which representations and
warranties shall be true and correct in all material respects as of such other date) and (z)
Sections 2.2(h) through (v) (disregarding all qualifications or limitations set forth in
such representations and warranties as to materiality, Company Material Adverse Effect
and words of similar import) shall be true and correct as though made on and as of the
Closing Date (other than representations and warranties that by their terms speak as of
another date, which representations and warranties shall be true and correct as of such
other date), except to the extent that the failure of such representations and warranties
referred to in this Section 1.2(d)(i)(A)(z) to be so true and correct, individually or in
the aggregate, does not have and would not reasonably be expected to have a Company Material
Adverse Effect and (B) the Company shall have performed in all material respects all
obligations required to be performed by it under this Agreement at or prior to the Closing;
-2-
(ii) the Investor shall have received a certificate signed on behalf of the Company by
a senior executive officer certifying to the effect that the conditions set forth in Section
1.2(d)(i) have been satisfied;
(iii) the Company shall have duly adopted and filed with the Secretary of State of its
jurisdiction of organization or other applicable Governmental Entity the amendment to its
certificate or articles of incorporation, articles of association, or similar organizational
document (
Charter
) in substantially the form
attached hereto as
Annex A
(the
Certificate of Designations
) and such filing shall have been accepted;
(iv) (A) the Company shall have effected such changes to its compensation, bonus,
incentive and other benefit plans, arrangements and agreements (including golden parachute,
severance and employment agreements) (collectively,
Benefit Plans
) with respect to its
Senior Executive Officers (and to the extent necessary for such changes to be legally
enforceable, each of its Senior Executive Officers shall have duly consented in writing to
such changes), as may be necessary, during the period that the Investor owns any debt or
equity securities of the Company acquired pursuant to this Agreement or the Warrant, in
order to comply with Section 111(b) of the Emergency Economic Stabilization Act of 2008
(
EESA
) as implemented by guidance or regulation thereunder that has been issued and is in
effect as of the Closing Date, and (B) the Investor shall have received a certificate signed
on behalf of the Company by a senior executive officer certifying to the effect that the
condition set forth in Section 1.2(d)(iv)(A) has been satisfied;
(v) each of the Companys Senior Executive Officers shall have delivered to the
Investor a written waiver in the form attached hereto as
Annex B
releasing the
Investor from any claims that such Senior Executive Officers may otherwise have as a result
of the issuance, on or prior to the Closing Date, of any regulations which require the
modification of, and the agreement of the Company hereunder to modify, the terms of any
Benefit Plans with respect to its Senior Executive Officers to eliminate any provisions of
such Benefit Plans that would not be in compliance with the requirements of Section 111(b)
of the EESA as implemented by guidance or regulation thereunder that has been issued and is
in effect as of the Closing Date;
(vi) the Company shall have delivered to the Investor a written opinion from counsel to
the Company (which may be internal counsel), addressed to the Investor and dated as of the
Closing Date, in substantially the form attached hereto as
Annex C
;
(vii) the Company shall have delivered certificates in proper form or, with the prior
consent of the Investor, evidence of shares in book-entry form, evidencing the Preferred
Shares to Investor or its designee(s); and
(viii) the Company shall have duly executed the Warrant in substantially the form
attached hereto as
Annex D
and delivered such executed Warrant to the Investor or
its designee(s).
-3-
1.3
Interpretation
. When a reference is made in this Agreement to Recitals,
Articles, Sections, or Annexes such reference shall be to a Recital, Article or Section of,
or Annex to, this Securities Purchase Agreement Standard Terms, and a reference to Schedules
shall be to a Schedule to the Letter Agreement, in each case, unless otherwise indicated. The
terms defined in the singular have a comparable meaning when used in the plural, and vice versa.
References to herein, hereof, hereunder and the like refer to this Agreement as a whole and
not to any particular section or provision, unless the context requires otherwise. The table of
contents and headings contained in this Agreement are for reference purposes only and are not part
of this Agreement. Whenever the words include, includes or including are used in this
Agreement, they shall be deemed followed by the words without limitation. No rule of
construction against the draftsperson shall be applied in connection with the interpretation or
enforcement of this Agreement, as this Agreement is the product of negotiation between
sophisticated parties advised by counsel. All references to $ or dollars mean the lawful
currency of the United States of America. Except as expressly stated in this Agreement, all
references to any statute, rule or regulation are to the statute, rule or regulation as amended,
modified, supplemented or replaced from time to time (and, in the case of statutes, include any
rules and regulations promulgated under the statute) and to any section of any statute, rule or
regulation include any successor to the section. References to a
business day
shall mean any day
except Saturday, Sunday and any day on which banking institutions in the State of New York
generally are authorized or required by law or other governmental actions to close.
Article II
Representations and Warranties
2.1
Disclosure
.
(a)
Company Material Adverse Effect
means a material adverse effect on (i) the business,
results of operation or financial condition of the Company and its consolidated subsidiaries taken
as a whole;
provided
,
however
, that Company Material Adverse Effect shall not be deemed to include
the effects of (A) changes after the date of the Letter Agreement (the
Signing Date
) in general
business, economic or market conditions (including changes generally in prevailing interest rates,
credit availability and liquidity, currency exchange rates and price levels or trading volumes in
the United States or foreign securities or credit markets), or any outbreak or escalation of
hostilities, declared or undeclared acts of war or terrorism, in each case generally affecting the
industries in which the Company and its subsidiaries operate, (B) changes or proposed changes after
the Signing Date in generally accepted accounting principles in the United States (
GAAP
) or
regulatory accounting requirements, or authoritative interpretations thereof, (C) changes or
proposed changes after the Signing Date in securities, banking and other laws of general
applicability or related policies or interpretations of Governmental Entities (in the case of each
of these clauses (A), (B) and (C), other than changes or occurrences to the extent that such
changes or occurrences have or would reasonably be expected to have a materially disproportionate
adverse effect on the Company and its consolidated subsidiaries taken as a whole relative to
comparable U.S. banking or financial services organizations), or (D) changes in the market price or
trading volume of the Common Stock or any other equity, equity-related or debt securities of the
Company or its consolidated subsidiaries (it being understood and agreed that the exception set
forth in this clause (D) does not apply to the underlying reason giving rise to or contributing to
any such change); or (ii) the
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ability of the Company to consummate the Purchase and the other transactions contemplated by
this Agreement and the Warrant and perform its obligations hereunder or thereunder on a timely
basis.
(b)
Previously Disclosed
means information set forth or incorporated in the Companys Annual
Report on Form 10-K for the most recently completed fiscal year of the Company filed with the
Securities and Exchange Commission (the
SEC
) prior to the Signing Date (the
Last Fiscal Year
)
or in its other reports and forms filed with or furnished to the SEC under Sections 13(a), 14(a) or
15(d) of the Securities Exchange Act of 1934 (the
Exchange Act
) on or after the last day of the
Last Fiscal Year and prior to the Signing Date.
2.2
Representations and Warranties of the Company
. Except as Previously Disclosed,
the Company represents and warrants to the Investor that as of the Signing Date and as of the
Closing Date (or such other date specified herein):
(a)
Organization, Authority and Significant Subsidiaries
. The Company has been duly
incorporated and is validly existing and in good standing under the laws of its jurisdiction of
organization, with the necessary power and authority to own its properties and conduct its business
in all material respects as currently conducted, and except as has not, individually or in the
aggregate, had and would not reasonably be expected to have a Company Material Adverse Effect, has
been duly qualified as a foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification; each subsidiary of the Company that is a
significant subsidiary within the meaning of Rule l-02(w) of Regulation S-X under the Securities
Act of 1933 (the
Securities Act
) has been duly organized and is validly existing in good standing
under the laws of its jurisdiction of organization. The Charter and bylaws of the Company, copies
of which have been provided to the Investor prior to the Signing Date, are true, complete and
correct copies of such documents as in full force and effect as of the Signing Date.
(b)
Capitalization
. The authorized capital stock of the Company, and the outstanding
capital stock of the Company (including securities convertible into, or exercisable or exchangeable
for, capital stock of the Company) as of the most recent fiscal month-end preceding the Signing
Date (the
Capitalization Date
) is set forth on
Schedule B
. The outstanding shares of
capital stock of the Company have been duly authorized and are validly issued and outstanding,
fully paid and nonassessable, and subject to no preemptive rights (and were not issued in violation
of any preemptive rights). Except as provided in the Warrant, as of the Signing Date, the Company
does not have outstanding any securities or other obligations providing the holder the right to
acquire Common Stock that is not reserved for issuance as specified on
Schedule B
, and the
Company has not made any other commitment to authorize, issue or sell any Common Stock. Since the
Capitalization Date, the Company has not issued any shares of Common Stock, other than (i) shares
issued upon the exercise of stock options or delivered under other equity-based awards or other
convertible securities or warrants which were issued and outstanding on the Capitalization Date and
disclosed on
Schedule B
and (ii) shares disclosed on
Schedule B
.
(c)
Preferred Shares
. The Preferred Shares have been duly and validly authorized,
and, when issued and delivered pursuant to this Agreement, such Preferred Shares will be duly
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and validly issued and fully paid and non-assessable, will not be issued in violation of any
preemptive rights, and will rank
pari passu
with or senior to all other series or classes of
Preferred Stock, whether or not issued or outstanding, with respect to the payment of dividends and
the distribution of assets in the event of any dissolution, liquidation or winding up of the
Company.
(d)
The Warrant and Warrant Shares
. The Warrant has been duly authorized and, when
executed and delivered as contemplated hereby, will constitute a valid and legally binding
obligation of the Company enforceable against the Company in accordance with its terms, except as
the same may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors rights generally and general equitable principles,
regardless of whether such enforceability is considered in a proceeding at law or in equity
(
Bankruptcy Exceptions
). The shares of Common Stock issuable upon exercise of the Warrant (the
Warrant Shares
) have been duly authorized and reserved for issuance upon exercise of the Warrant
and when so issued in accordance with the terms of the Warrant will be validly issued, fully paid
and non-assessable, subject, if applicable, to the approvals of its stockholders set forth on
Schedule C
.
(e)
Authorization, Enforceability
.
(i) The Company has the corporate power and authority to execute and deliver this
Agreement and the Warrant and, subject, if applicable, to the approvals of its stockholders
set forth on
Schedule C
, to carry out its obligations hereunder and thereunder
(which includes the issuance of the Preferred Shares, Warrant and Warrant Shares). The
execution, delivery and performance by the Company of this Agreement and the Warrant and the
consummation of the transactions contemplated hereby and thereby have been duly authorized
by all necessary corporate action on the part of the Company and its stockholders, and no
further approval or authorization is required on the part of the Company, subject, in each
case, if applicable, to the approvals of its stockholders set forth on
Schedule C
.
This Agreement is a valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, subject to the Bankruptcy Exceptions.
(ii) The execution, delivery and performance by the Company of this Agreement and the
Warrant and the consummation of the transactions contemplated hereby and thereby and
compliance by the Company with the provisions hereof and thereof, will not (A) violate,
conflict with, or result in a breach of any provision of, or constitute a default (or an
event which, with notice or lapse of time or both, would constitute a default) under, or
result in the termination of, or accelerate the performance required by, or result in a
right of termination or acceleration of, or result in the creation of, any lien, security
interest, charge or encumbrance upon any of the properties or assets of the Company or any
Company Subsidiary under any of the terms, conditions or provisions of (i) subject, if
applicable, to the approvals of the Companys stockholders set forth on
Schedule C
,
its organizational documents or (ii) any note, bond, mortgage, indenture, deed of trust,
license, lease, agreement or other instrument or obligation to which the Company or any
Company Subsidiary is a party or by which it or any Company Subsidiary may be bound, or to
which the Company or any Company
-6-
Subsidiary or any of the properties or assets of the Company or any Company Subsidiary
may be subject, or (B) subject to compliance with the statutes and regulations referred to
in the next paragraph, violate any statute, rule or regulation or any judgment, ruling,
order, writ, injunction or decree applicable to the Company or any Company Subsidiary or any
of their respective properties or assets except, in the case of clauses (A)(ii) and (B), for
those occurrences that, individually or in the aggregate, have not had and would not
reasonably be expected to have a Company Material Adverse Effect.
(iii) Other than the filing of the Certificate of Designations with the Secretary of
State of its jurisdiction of organization or other applicable Governmental Entity, any
current report on Form 8-K required to be filed with the SEC, such filings and approvals as
are required to be made or obtained under any state blue sky laws, the filing of any proxy
statement contemplated by Section 3.1 and such as have been made or obtained, no notice to,
filing with, exemption or review by, or authorization, consent or approval of, any
Governmental Entity is required to be made or obtained by the Company in connection with the
consummation by the Company of the Purchase except for any such notices, filings,
exemptions, reviews, authorizations, consents and approvals the failure of which to make or
obtain would not, individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
(f)
Anti-takeover Provisions and Rights Plan
. The Board of Directors of the Company
(the
Board of Directors
) has taken all necessary action to ensure that the transactions
contemplated by this Agreement and the Warrant and the consummation of the transactions
contemplated hereby and thereby, including the exercise of the Warrant in accordance with its
terms, will be exempt from any anti-takeover or similar provisions of the Companys Charter and
bylaws, and any other provisions of any applicable moratorium, control share, fair price,
interested stockholder or other anti-takeover laws and regulations of any jurisdiction. The
Company has taken all actions necessary to render any stockholders rights plan of the Company
inapplicable to this Agreement and the Warrant and the consummation of the transactions
contemplated hereby and thereby, including the exercise of the Warrant by the Investor in
accordance with its terms.
(g)
No Company Material Adverse Effect
. Since the last day of the last completed
fiscal period for which the Company has filed a Quarterly Report on Form 10-Q or an Annual Report
on Form 10-K with the SEC prior to the Signing Date, no fact, circumstance, event, change,
occurrence, condition or development has occurred that, individually or in the aggregate, has had
or would reasonably be expected to have a Company Material Adverse Effect.
(h)
Company Financial Statements
. Each of the consolidated financial statements of
the Company and its consolidated subsidiaries (collectively the
Company Financial Statements
)
included or incorporated by reference in the Company Reports filed with the SEC since December 31,
2006, present fairly in all material respects the consolidated financial position of the Company
and its consolidated subsidiaries as of the dates indicated therein (or if amended prior to the
Signing Date, as of the date of such amendment) and the consolidated results of their operations
for the periods specified therein; and except as stated therein, such financial statements (A) were
prepared in conformity with GAAP applied on a consistent basis (except as may be noted therein),
(B) have been prepared from, and are in accordance with, the
-7-
books and records of the Company and the Company Subsidiaries and (C) complied as to form, as
of their respective dates of filing with the SEC, in all material respects with the applicable
accounting requirements and with the published rules and regulations of the SEC with respect
thereto.
(i)
Reports
.
(i) Since December 31, 2006, the Company and each subsidiary of the Company (each a
Company Subsidiary
and, collectively, the
Company Subsidiaries
) has timely filed all
reports, registrations, documents, filings, statements and submissions, together with any
amendments thereto, that it was required to file with any Governmental Entity (the
foregoing, collectively, the
Company Reports
) and has paid all fees and assessments due
and payable in connection therewith, except, in each case, as would not, individually or in
the aggregate, reasonably be expected to have a Company Material Adverse Effect. As of
their respective dates of filing, the Company Reports complied in all material respects with
all statutes and applicable rules and regulations of the applicable Governmental Entities.
In the case of each such Company Report filed with or furnished to the SEC, such Company
Report (A) did not, as of its date or if amended prior to the Signing Date, as of the date
of such amendment, contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading, and (B) complied as to form in all
material respects with the applicable requirements of the Securities Act and the Exchange
Act. With respect to all other Company Reports, the Company Reports were complete and
accurate in all material respects as of their respective dates. No executive officer of the
Company or any Company Subsidiary has failed in any respect to make the certifications
required of him or her under Section 302 or 906 of the Sarbanes-Oxley Act of 2002.
(ii) The records, systems, controls, data and information of the Company and the
Company Subsidiaries are recorded, stored, maintained and operated under means (including
any electronic, mechanical or photographic process, whether computerized or not) that are
under the exclusive ownership and direct control of the Company or the Company Subsidiaries
or their accountants (including all means of access thereto and therefrom), except for any
non-exclusive ownership and non-direct control that would not reasonably be expected to have
a material adverse effect on the system of internal accounting controls described below in
this Section 2.2(i)(ii). The Company (A) has implemented and maintains disclosure controls
and procedures (as defined in Rule 13a-15(e) of the Exchange Act) to ensure that material
information relating to the Company, including the consolidated Company Subsidiaries, is
made known to the chief executive officer and the chief financial officer of the Company by
others within those entities, and (B) has disclosed, based on its most recent evaluation
prior to the Signing Date, to the Companys outside auditors and the audit committee of the
Board of Directors (x) any significant deficiencies and material weaknesses in the design or
operation of internal controls over financial reporting (as defined in Rule 13a-15(f) of the
Exchange Act) that are reasonably likely to adversely affect the Companys ability to
record, process, summarize and report financial information and (y) any fraud, whether or
not material,
-8-
that involves management or other employees who have a significant role in the
Companys internal controls over financial reporting.
(j)
No Undisclosed Liabilities
. Neither the Company nor any of the Company
Subsidiaries has any liabilities or obligations of any nature (absolute, accrued, contingent or
otherwise) which are not properly reflected or reserved against in the Company Financial Statements
to the extent required to be so reflected or reserved against in accordance with GAAP, except for
(A) liabilities that have arisen since the last fiscal year end in the ordinary and usual course of
business and consistent with past practice and (B) liabilities that, individually or in the
aggregate, have not had and would not reasonably be expected to have a Company Material Adverse
Effect.
(k)
Offering of Securities
. Neither the Company nor any person acting on its behalf
has taken any action (including any offering of any securities of the Company under circumstances
which would require the integration of such offering with the offering of any of the Purchased
Securities under the Securities Act, and the rules and regulations of the SEC promulgated
thereunder), which might subject the offering, issuance or sale of any of the Purchased Securities
to Investor pursuant to this Agreement to the registration requirements of the Securities Act.
(l)
Litigation and Other Proceedings
. Except (i) as set forth on
Schedule D
or (ii) as would not, individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect, there is no (A) pending or, to the knowledge of the Company, threatened,
claim, action, suit, investigation or proceeding, against the Company or any Company Subsidiary or
to which any of their assets are subject nor is the Company or any Company Subsidiary subject to
any order, judgment or decree or (B) unresolved violation, criticism or exception by any
Governmental Entity with respect to any report or relating to any examinations or inspections of
the Company or any Company Subsidiaries.
(m)
Compliance with Laws
. Except as would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect, the Company and the Company
Subsidiaries have all permits, licenses, franchises, authorizations, orders and approvals of, and
have made all filings, applications and registrations with, Governmental Entities that are required
in order to permit them to own or lease their properties and assets and to carry on their business
as presently conducted and that are material to the business of the Company or such Company
Subsidiary. Except as set forth on
Schedule E
, the Company and the Company Subsidiaries
have complied in all respects and are not in default or violation of, and none of them is, to the
knowledge of the Company, under investigation with respect to or, to the knowledge of the Company,
have been threatened to be charged with or given notice of any violation of, any applicable
domestic (federal, state or local) or foreign law, statute, ordinance, license, rule, regulation,
policy or guideline, order, demand, writ, injunction, decree or judgment of any Governmental
Entity, other than such noncompliance, defaults or violations that would not, individually or in
the aggregate, reasonably be expected to have a Company Material Adverse Effect. Except for
statutory or regulatory restrictions of general application or as set forth on
Schedule E
,
no Governmental Entity has placed any restriction on the business or properties of the Company or
any Company Subsidiary that would, individually or in the aggregate, reasonably be expected to have
a Company Material Adverse Effect.
-9-
(n)
Employee Benefit Matters
. Except as would not reasonably be expected to have,
either individually or in the aggregate, a Company Material Adverse Effect: (A) each employee
benefit plan (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended (
ERISA
)) providing benefits to any current or former employee, officer or
director of the Company or any member of its
Controlled Group
(defined as any organization which
is a member of a controlled group of corporations within the meaning of Section 414 of the Internal
Revenue Code of 1986, as amended (the
Code
)) that is sponsored, maintained or contributed to by
the Company or any member of its Controlled Group and for which the Company or any member of its
Controlled Group would have any liability, whether actual or contingent (each, a
Plan
) has been
maintained in compliance with its terms and with the requirements of all applicable statutes, rules
and regulations, including ERISA and the Code; (B) with respect to each Plan subject to Title IV of
ERISA (including, for purposes of this clause (B), any plan subject to Title IV of ERISA that the
Company or any member of its Controlled Group previously maintained or contributed to in the six
years prior to the Signing Date), (1) no reportable event (within the meaning of Section 4043(c)
of ERISA), other than a reportable event for which the notice period referred to in Section 4043(c)
of ERISA has been waived, has occurred in the three years prior to the Signing Date or is
reasonably expected to occur, (2) no accumulated funding deficiency (within the meaning of
Section 302 of ERISA or Section 412 of the Code), whether or not waived, has occurred in the three
years prior to the Signing Date or is reasonably expected to occur, (3) the fair market value of
the assets under each Plan exceeds the present value of all benefits accrued under such Plan
(determined based on the assumptions used to fund such Plan) and (4) neither the Company nor any
member of its Controlled Group has incurred in the six years prior to the Signing Date, or
reasonably expects to incur, any liability under Title IV of ERISA (other than contributions to the
Plan or premiums to the PBGC in the ordinary course and without default) in respect of a Plan
(including any Plan that is a multiemployer plan, within the meaning of Section 4001(c)(3) of
ERISA); and (C) each Plan that is intended to be qualified under Section 401(a) of the Code has
received a favorable determination letter from the Internal Revenue Service with respect to its
qualified status that has not been revoked, or such a determination letter has been timely applied
for but not received by the Signing Date, and nothing has occurred, whether by action or by failure
to act, which could reasonably be expected to cause the loss, revocation or denial of such
qualified status or favorable determination letter.
(o)
Taxes
. Except as would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect, (i) the Company and the Company Subsidiaries
have filed all federal, state, local and foreign income and franchise Tax returns required to be
filed through the Signing Date, subject to permitted extensions, and have paid all Taxes due
thereon, and (ii) no Tax deficiency has been determined adversely to the Company or any of the
Company Subsidiaries, nor does the Company have any knowledge of any Tax deficiencies.
Tax
or
Taxes
means any federal, state, local or foreign income, gross receipts, property, sales, use,
license, excise, franchise, employment, payroll, withholding, alternative or add on minimum, ad
valorem, transfer or excise tax, or any other tax, custom, duty, governmental fee or other like
assessment or charge of any kind whatsoever, together with any interest or penalty, imposed by any
Governmental Entity.
(p)
Properties and Leases
. Except as would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect, the Company and the
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Company Subsidiaries have good and marketable title to all real properties and all other
properties and assets owned by them, in each case free from liens, encumbrances, claims and defects
that would affect the value thereof or interfere with the use made or to be made thereof by them.
Except as would not, individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect, the Company and the Company Subsidiaries hold all leased real or personal
property under valid and enforceable leases with no exceptions that would interfere with the use
made or to be made thereof by them.
(q)
Environmental Liability
. Except as would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect:
(i) there is no legal, administrative, or other proceeding, claim or action of any
nature seeking to impose, or that would reasonably be expected to result in the imposition
of, on the Company or any Company Subsidiary, any liability relating to the release of
hazardous substances as defined under any local, state or federal environmental statute,
regulation or ordinance, including the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, pending or, to the Companys knowledge, threatened against the
Company or any Company Subsidiary;
(ii) to the Companys knowledge, there is no reasonable basis for any such proceeding,
claim or action; and
(iii) neither the Company nor any Company Subsidiary is subject to any agreement,
order, judgment or decree by or with any court, Governmental Entity or third party imposing
any such environmental liability.
(r)
Risk Management Instruments
. Except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect, all derivative
instruments, including, swaps, caps, floors and option agreements, whether entered into for the
Companys own account, or for the account of one or more of the Company Subsidiaries or its or
their customers, were entered into (i) only in the ordinary course of business, (ii) in accordance
with prudent practices and in all material respects with all applicable laws, rules, regulations
and regulatory policies and (iii) with counterparties believed to be financially responsible at the
time; and each of such instruments constitutes the valid and legally binding obligation of the
Company or one of the Company Subsidiaries, enforceable in accordance with its terms, except as may
be limited by the Bankruptcy Exceptions. Neither the Company or the Company Subsidiaries, nor, to
the knowledge of the Company, any other party thereto, is in breach of any of its obligations under
any such agreement or arrangement other than such breaches that would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.
(s)
Agreements with Regulatory Agencies
. Except as set forth on
Schedule F
,
neither the Company nor any Company Subsidiary is subject to any material cease-and-desist or other
similar order or enforcement action issued by, or is a party to any material written agreement,
consent agreement or memorandum of understanding with, or is a party to any commitment letter or
similar undertaking to, or is subject to any capital directive by, or since December 31, 2006, has
adopted any board resolutions at the request of, any Governmental Entity (other than the
Appropriate Federal Banking Agencies with jurisdiction over the Company and the Company
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Subsidiaries) that currently restricts in any material respect the conduct of its business or
that in any material manner relates to its capital adequacy, its liquidity and funding policies and
practices, its ability to pay dividends, its credit, risk management or compliance policies or
procedures, its internal controls, its management or its operations or business (each item in this
sentence, a
Regulatory Agreement
), nor has the Company or any Company Subsidiary been advised
since December 31, 2006 by any such Governmental Entity that it is considering issuing, initiating,
ordering, or requesting any such Regulatory Agreement. The Company and each Company Subsidiary are
in compliance in all material respects with each Regulatory Agreement to which it is party or
subject, and neither the Company nor any Company Subsidiary has received any notice from any
Governmental Entity indicating that either the Company or any Company Subsidiary is not in
compliance in all material respects with any such Regulatory Agreement.
Appropriate Federal
Banking Agency
means the appropriate Federal banking agency with respect to the Company or such
Company Subsidiaries, as applicable, as defined in Section 3(q) of the Federal Deposit Insurance
Act (12 U.S.C. Section 1813(q)).
(t)
Insurance
. The Company and the Company Subsidiaries are insured with reputable
insurers against such risks and in such amounts as the management of the Company reasonably has
determined to be prudent and consistent with industry practice. The Company and the Company
Subsidiaries are in material compliance with their insurance policies and are not in default under
any of the material terms thereof, each such policy is outstanding and in full force and effect,
all premiums and other payments due under any material policy have been paid, and all claims
thereunder have been filed in due and timely fashion, except, in each case, as would not,
individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.
(u)
Intellectual Property
. Except as would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect, (i) the Company and each Company
Subsidiary owns or otherwise has the right to use, all intellectual property rights, including all
trademarks, trade dress, trade names, service marks, domain names, patents, inventions, trade
secrets, know-how, works of authorship and copyrights therein, that are used in the conduct of
their existing businesses and all rights relating to the plans, design and specifications of any of
its branch facilities
Proprietary Rights
) free and clear of all liens and any claims of ownership
by current or former employees, contractors, designers or others and (ii) neither the Company nor
any of the Company Subsidiaries is materially infringing, diluting, misappropriating or violating,
nor has the Company or any or the Company Subsidiaries received any written (or, to the knowledge
of the Company, oral) communications alleging that any of them has materially infringed, diluted,
misappropriated or violated, any of the Proprietary Rights owned by any other person. Except as
would not, individually or in the aggregate, reasonably be expected to have a Company Material
Adverse Effect, to the Companys knowledge, no other person is infringing, diluting,
misappropriating or violating, nor has the Company or any or the Company Subsidiaries sent any
written communications since January 1, 2006 alleging that any person has infringed, diluted,
misappropriated or violated, any of the Proprietary Rights owned by the Company and the Company
Subsidiaries.
(v)
Brokers and Finders
. No broker, finder or investment banker is entitled to any
financial advisory, brokerage, finders or other fee or commission in connection with this
Agreement or the Warrant or the transactions contemplated hereby or thereby based upon
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arrangements made by or on behalf of the Company or any Company Subsidiary for which the
Investor could have any liability.
Article III
Covenants
3.1
Commercially Reasonable Efforts
.
(a) Subject to the terms and conditions of this Agreement, each of the parties will use its
commercially reasonable efforts in good faith to take, or cause to be taken, all actions, and to
do, or cause to be done, all things necessary, proper or desirable, or advisable under applicable
laws, so as to permit consummation of the Purchase as promptly as practicable and otherwise to
enable consummation of the transactions contemplated hereby and shall use commercially reasonable
efforts to cooperate with the other party to that end.
(b) If the Company is required to obtain any stockholder approvals set forth on
Schedule
C
, then the Company shall comply with this Section 3.1(b) and Section 3.1(c). The Company
shall call a special meeting of its stockholders, as promptly as practicable following the Closing,
to vote on proposals (collectively, the
Stockholder Proposals
) to (i) approve the exercise of
the Warrant for Common Stock for purposes of the rules of the national security exchange on which
the Common Stock is listed and/or (ii) amend the Companys Charter to increase the number of
authorized shares of Common Stock to at least such number as shall be sufficient to permit the full
exercise of the Warrant for Common Stock and comply with the other provisions of this Section
3.1(b) and Section 3.1(c). The Board of Directors shall recommend to the Companys stockholders
that such stockholders vote in favor of the Stockholder Proposals. In connection with such
meeting, the Company shall prepare (and the Investor will reasonably cooperate with the Company to
prepare) and file with the SEC as promptly as practicable (but in no event more than ten business
days after the Closing) a preliminary proxy statement, shall use its reasonable best efforts to
respond to any comments of the SEC or its staff thereon and to cause a definitive proxy statement
related to such stockholders meeting to be mailed to the Companys stockholders not more than five
business days after clearance thereof by the SEC, and shall use its reasonable best efforts to
solicit proxies for such stockholder approval of the Stockholder Proposals. The Company shall
notify the Investor promptly of the receipt of any comments from the SEC or its staff with respect
to the proxy statement and of any request by the SEC or its staff for amendments or supplements to
such proxy statement or for additional information and will supply the Investor with copies of all
correspondence between the Company or any of its representatives, on the one hand, and the SEC or
its staff, on the other hand, with respect to such proxy statement. If at any time prior to such
stockholders meeting there shall occur any event that is required to be set forth in an amendment
or supplement to the proxy statement, the Company shall as promptly as practicable prepare and mail
to its stockholders such an amendment or supplement. Each of the Investor and the Company agrees
promptly to correct any information provided by it or on its behalf for use in the proxy statement
if and to the extent that such information shall have become false or misleading in any material
respect, and the Company shall as promptly as practicable prepare and mail to its stockholders an
amendment or supplement to correct such information to the extent required by applicable laws and
regulations. The Company shall consult with the Investor prior to filing any proxy statement, or
any amendment or supplement thereto, and provide the
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Investor with a reasonable opportunity to comment thereon. In the event that the approval of
any of the Stockholder Proposals is not obtained at such special stockholders meeting, the Company
shall include a proposal to approve (and the Board of Directors shall recommend approval of) each
such proposal at a meeting of its stockholders no less than once in each subsequent six-month
period beginning on January 1, 2009 until all such approvals are obtained or made.
(c) None of the information supplied by the Company or any of the Company Subsidiaries for
inclusion in any proxy statement in connection with any such stockholders meeting of the Company
will, at the date it is filed with the SEC, when first mailed to the Companys stockholders and at
the time of any stockholders meeting, and at the time of any amendment or supplement thereof,
contain any untrue statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which they are made, not
misleading.
3.2
Expenses
. Unless otherwise provided in this Agreement or the Warrant, each of the
parties hereto will bear and pay all costs and expenses incurred by it or on its behalf in
connection with the transactions contemplated under this Agreement and the Warrant, including fees
and expenses of its own financial or other consultants, investment bankers, accountants and
counsel.
3.3
Sufficiency of Authorized Common Stock; Exchange Listing
.
(a) During the period from the Closing Date (or, if the approval of the Stockholder Proposals
is required, the date of such approval) until the date on which the Warrant has been fully
exercised, the Company shall at all times have reserved for issuance, free of preemptive or similar
rights, a sufficient number of authorized and unissued Warrant Shares to effectuate such exercise.
Nothing in this Section 3.3 shall preclude the Company from satisfying its obligations in respect
of the exercise of the Warrant by delivery of shares of Common Stock which are held in the treasury
of the Company. As soon as reasonably practicable following the Closing, the Company shall, at its
expense, cause the Warrant Shares to be listed on the same national securities exchange on which
the Common Stock is listed, subject to official notice of issuance, and shall maintain such listing
for so long as any Common Stock is listed on such exchange.
(b) If requested by the Investor, the Company shall promptly use its reasonable best efforts
to cause the Preferred Shares to be approved for listing on a national securities exchange as
promptly as practicable following such request.
3.4
Certain Notifications Until Closing
. From the Signing Date until the Closing, the
Company shall promptly notify the Investor of (i) any fact, event or circumstance of which it is
aware and which would reasonably be expected to cause any representation or warranty of the Company
contained in this Agreement to be untrue or inaccurate in any material respect or to cause any
covenant or agreement of the Company contained in this Agreement not to be complied with or
satisfied in any material respect and (ii) except as Previously Disclosed, any fact, circumstance,
event, change, occurrence, condition or development of which the Company is aware and which,
individually or in the aggregate, has had or would reasonably be expected to have a Company
Material Adverse Effect;
provided
,
however
, that delivery of any notice pursuant to this Section
3.4 shall not limit or affect any rights of or remedies available to the
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Investor;
provided
,
further
, that a failure to comply with this Section 3.4 shall not
constitute a breach of this Agreement or the failure of any condition set forth in Section 1.2 to
be satisfied unless the underlying Company Material Adverse Effect or material breach would
independently result in the failure of a condition set forth in Section 1.2 to be satisfied.
3.5
Access, Information and Confidentiality
.
(a) From the Signing Date until the date when the Investor holds an amount of Preferred Shares
having an aggregate liquidation value of less than 10% of the Purchase Price, the Company will
permit the Investor and its agents, consultants, contractors and advisors (x) acting through the
Appropriate Federal Banking Agency, to examine the corporate books and make copies thereof and to
discuss the affairs, finances and accounts of the Company and the Company Subsidiaries with the
principal officers of the Company, all upon reasonable notice and at such reasonable times and as
often as the Investor may reasonably request and (y) to review any information material to the
Investors investment in the Company provided by the Company to its Appropriate Federal Banking
Agency. Any investigation pursuant to this Section 3.5 shall be conducted during normal business
hours and in such manner as not to interfere unreasonably with the conduct of the business of the
Company, and nothing herein shall require the Company or any Company Subsidiary to disclose any
information to the Investor to the extent (i) prohibited by applicable law or regulation, or (ii)
that such disclosure would reasonably be expected to cause a violation of any agreement to which
the Company or any Company Subsidiary is a party or would cause a risk of a loss of privilege to
the Company or any Company Subsidiary (
provided
that the Company shall use commercially reasonable
efforts to make appropriate substitute disclosure arrangements under circumstances where the
restrictions in this clause (ii) apply).
(b) The Investor will use reasonable best efforts to hold, and will use reasonable best
efforts to cause its agents, consultants, contractors and advisors to hold, in confidence all
non-public records, books, contracts, instruments, computer data and other data and information
(collectively,
Information
) concerning the Company furnished or made available to it by the
Company or its representatives pursuant to this Agreement (except to the extent that such
information can be shown to have been (i) previously known by such party on a non-confidential
basis, (ii) in the public domain through no fault of such party or (iii) later lawfully acquired
from other sources by the party to which it was furnished (and without violation of any other
confidentiality obligation));
provided
that nothing herein shall prevent the Investor from
disclosing any Information to the extent required by applicable laws or regulations or by any
subpoena or similar legal process.
Article IV
Additional Agreements
4.1
Purchase for Investment
. The Investor acknowledges that the Purchased Securities
and the Warrant Shares have not been registered under the Securities Act or under any state
securities laws. The Investor (a) is acquiring the Purchased Securities pursuant to an exemption
from registration under the Securities Act solely for investment with no present intention to
distribute them to any person in violation of the Securities Act or any applicable U.S. state
securities laws, (b) will not sell or otherwise dispose of any of the Purchased Securities or
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the Warrant Shares, except in compliance with the registration requirements or exemption
provisions of the Securities Act and any applicable U.S. state securities laws, and (c) has such
knowledge and experience in financial and business matters and in investments of this type that it
is capable of evaluating the merits and risks of the Purchase and of making an informed investment
decision.
4.2
Legends
.
(a) The Investor agrees that all certificates or other instruments representing the Warrant
and the Warrant Shares will bear a legend substantially to the following effect:
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED,
SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN
EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT OR SUCH LAWS.
(b) The Investor agrees that all certificates or other instruments representing the Warrant
will also bear a legend substantially to the following effect:
THIS INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS OF A
SECURITIES PURCHASE AGREEMENT BETWEEN THE ISSUER OF THESE SECURITIES AND THE INVESTOR
REFERRED TO THEREIN, A COPY OF WHICH IS ON FILE WITH THE ISSUER. THE SECURITIES REPRESENTED
BY THIS INSTRUMENT MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID
AGREEMENT. ANY SALE OR OTHER TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENT WILL BE VOID.
(c) In addition, the Investor agrees that all certificates or other instruments representing
the Preferred Shares will bear a legend substantially to the following effect:
THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER
OBLIGATIONS OF A BANK AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR
ANY OTHER GOVERNMENTAL AGENCY.
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT
RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS. EACH PURCHASER OF
THE SECURITIES REPRESENTED BY THIS INSTRUMENT IS NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE
-16-
EXEMPTION FROM SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. ANY
TRANSFEREE OF THE SECURITIES REPRESENTED BY THIS INSTRUMENT BY ITS ACCEPTANCE HEREOF (1)
REPRESENTS THAT IT IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), (2) AGREES THAT IT WILL NOT OFFER, SELL OR OTHERWISE TRANSFER THE
SECURITIES REPRESENTED BY THIS INSTRUMENT EXCEPT (A) PURSUANT TO A REGISTRATION STATEMENT
WHICH IS THEN EFFECTIVE UNDER THE SECURITIES ACT, (B) FOR SO LONG AS THE SECURITIES
REPRESENTED BY THIS INSTRUMENT ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (C) TO THE ISSUER OR (D) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH
PERSON TO WHOM THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
(d) In the event that any Purchased Securities or Warrant Shares (i) become registered under
the Securities Act or (ii) are eligible to be transferred without restriction in accordance with
Rule 144 or another exemption from registration under the Securities Act (other than Rule 144A),
the Company shall issue new certificates or other instruments representing such Purchased
Securities or Warrant Shares, which shall not contain the applicable legends in Sections 4.2(a) and
(c) above;
provided
that the Investor surrenders to the Company the previously issued certificates
or other instruments. Upon Transfer of all or a portion of the Warrant in compliance with Section
4.4, the Company shall issue new certificates or other instruments representing the Warrant, which
shall not contain the applicable legend in Section 4.2(b) above;
provided
that the Investor
surrenders to the Company the previously issued certificates or other instruments.
4.3
Certain Transactions
. The Company will not merge or consolidate with, or sell,
transfer or lease all or substantially all of its property or assets to, any other party unless the
successor, transferee or lessee party (or its ultimate parent entity), as the case may be (if not
the Company), expressly assumes the due and punctual performance and observance of each and every
covenant, agreement and condition of this Agreement to be performed and observed by the Company.
4.4
Transfer of Purchased Securities and Warrant Shares; Restrictions on Exercise of the
Warrant
. Subject to compliance with applicable securities laws, the Investor shall be
permitted to transfer, sell, assign or otherwise dispose of (
Transfer
) all or a portion of the
Purchased Securities or Warrant Shares at any time, and the Company shall take all steps as may be
reasonably requested by the Investor to facilitate the Transfer of the Purchased Securities and the
Warrant Shares;
provided
that the Investor shall not Transfer a portion or portions of the Warrant
with respect to, and/or exercise the Warrant for, more than one-half of the Initial
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Warrant Shares (as such number may be adjusted from time to time pursuant to Section 13
thereof) in the aggregate until the earlier of (a) the date on which the Company (or any successor
by Business Combination) has received aggregate gross proceeds of not less than the Purchase Price
(and the purchase price paid by the Investor to any such successor for securities of such successor
purchased under the CPP) from one or more Qualified Equity Offerings (including Qualified Equity
Offerings of such successor) and (b) December 31, 2009.
Qualified Equity Offering
means the sale
and issuance for cash by the Company to persons other than the Company or any of the Company
Subsidiaries after the Closing Date of shares of perpetual Preferred Stock, Common Stock or any
combination of such stock, that, in each case, qualify as and may be included in Tier 1 capital of
the Company at the time of issuance under the applicable risk-based capital guidelines of the
Companys Appropriate Federal Banking Agency (other than any such sales and issuances made pursuant
to agreements or arrangements entered into, or pursuant to financing plans which were publicly
announced, on or prior to October 13, 2008).
Business Combination
means a merger, consolidation,
statutory share exchange or similar transaction that requires the approval of the Companys
stockholders.
4.5
Registration Rights
.
(a)
Registration
.
(i) Subject to the terms and conditions of this Agreement, the Company covenants and
agrees that as promptly as practicable after the Closing Date (and in any event no later
than 30 days after the Closing Date), the Company shall prepare and file with the SEC a
Shelf Registration Statement covering all Registrable Securities (or otherwise designate an
existing Shelf Registration Statement filed with the SEC to cover the Registrable
Securities), and, to the extent the Shelf Registration Statement has not theretofore been
declared effective or is not automatically effective upon such filing, the Company shall use
reasonable best efforts to cause such Shelf Registration Statement to be declared or become
effective and to keep such Shelf Registration Statement continuously effective and in
compliance with the Securities Act and usable for resale of such Registrable Securities for
a period from the date of its initial effectiveness until such time as there are no
Registrable Securities remaining (including by refiling such Shelf Registration Statement
(or a new Shelf Registration Statement) if the initial Shelf Registration Statement
expires). So long as the Company is a well-known seasoned issuer (as defined in Rule 405
under the Securities Act) at the time of filing of the Shelf Registration Statement with the
SEC, such Shelf Registration Statement shall be designated by the Company as an automatic
Shelf Registration Statement. Notwithstanding the foregoing, if on the Signing Date the
Company is not eligible to file a registration statement on Form S-3, then the Company shall
not be obligated to file a Shelf Registration Statement unless and until requested to do so
in writing by the Investor.
(ii) Any registration pursuant to Section 4.5(a)(i) shall be effected by means of a
shelf registration on an appropriate form under Rule 415 under the Securities Act (a
Shelf
Registration Statement
). If the Investor or any other Holder intends to distribute any
Registrable Securities by means of an underwritten offering it shall promptly so advise the
Company and the Company shall take all reasonable steps to facilitate such
-18-
distribution, including the actions required pursuant to Section 4.5(c);
provided
that
the Company shall not be required to facilitate an underwritten offering of Registrable
Securities unless the expected gross proceeds from such offering exceed (i) 2% of the
initial aggregate liquidation preference of the Preferred Shares if such initial aggregate
liquidation preference is less than $2 billion and (ii) $200 million if the initial
aggregate liquidation preference of the Preferred Shares is equal to or greater than $2
billion. The lead underwriters in any such distribution shall be selected by the Holders of
a majority of the Registrable Securities to be distributed;
provided
that to the extent
appropriate and permitted under applicable law, such Holders shall consider the
qualifications of any broker-dealer Affiliate of the Company in selecting the lead
underwriters in any such distribution.
(iii) The Company shall not be required to effect a registration (including a resale of
Registrable Securities from an effective Shelf Registration Statement) or an underwritten
offering pursuant to Section 4.5(a): (A) with respect to securities that are not
Registrable Securities; or (B) if the Company has notified the Investor and all other
Holders that in the good faith judgment of the Board of Directors, it would be materially
detrimental to the Company or its securityholders for such registration or underwritten
offering to be effected at such time, in which event the Company shall have the right to
defer such registration for a period of not more than 45 days after receipt of the request
of the Investor or any other Holder;
provided
that such right to delay a registration or
underwritten offering shall be exercised by the Company (1) only if the Company has
generally exercised (or is concurrently exercising) similar black-out rights against holders
of similar securities that have registration rights and (2) not more than three times in any
12-month period and not more than 90 days in the aggregate in any 12-month period.
(iv) If during any period when an effective Shelf Registration Statement is not
available, the Company proposes to register any of its equity securities, other than a
registration pursuant to Section 4.5(a)(i) or a Special Registration, and the registration
form to be filed may be used for the registration or qualification for distribution of
Registrable Securities, the Company will give prompt written notice to the Investor and all
other Holders of its intention to effect such a registration (but in no event less than ten
days prior to the anticipated filing date) and will include in such registration all
Registrable Securities with respect to which the Company has received written requests for
inclusion therein within ten business days after the date of the Companys notice (a
Piggyback Registration
). Any such person that has made such a written request may
withdraw its Registrable Securities from such Piggyback Registration by giving written
notice to the Company and the managing underwriter, if any, on or before the fifth business
day prior to the planned effective date of such Piggyback Registration. The Company may
terminate or withdraw any registration under this Section 4.5(a)(iv) prior to the
effectiveness of such registration, whether or not Investor or any other Holders have
elected to include Registrable Securities in such registration.
(v) If the registration referred to in Section 4.5(a)(iv) is proposed to be
underwritten, the Company will so advise Investor and all other Holders as a part of the
written notice given pursuant to Section 4.5(a)(iv). In such event, the right of Investor
and all other Holders to registration pursuant to Section 4.5(a) will be conditioned upon
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such persons participation in such underwriting and the inclusion of such persons
Registrable Securities in the underwriting if such securities are of the same class of
securities as the securities to be offered in the underwritten offering, and each such
person will (together with the Company and the other persons distributing their securities
through such underwriting) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by the Company;
provided
that the
Investor (as opposed to other Holders) shall not be required to indemnify any person in
connection with any registration. If any participating person disapproves of the terms of
the underwriting, such person may elect to withdraw therefrom by written notice to the
Company, the managing underwriters and the Investor (if the Investor is participating in the
underwriting).
(vi) If either (x) the Company grants piggyback registration rights to one or more
third parties to include their securities in an underwritten offering under the Shelf
Registration Statement pursuant to Section 4.5(a)(ii) or (y) a Piggyback Registration under
Section 4.5(a)(iv) relates to an underwritten offering on behalf of the Company, and in
either case the managing underwriters advise the Company that in their reasonable opinion
the number of securities requested to be included in such offering exceeds the number which
can be sold without adversely affecting the marketability of such offering (including an
adverse effect on the per share offering price), the Company will include in such offering
only such number of securities that in the reasonable opinion of such managing underwriters
can be sold without adversely affecting the marketability of the offering (including an
adverse effect on the per share offering price), which securities will be so included in the
following order of priority: (A) first, in the case of a Piggyback Registration under
Section 4.5(a)(iv), the securities the Company proposes to sell, (B) then the Registrable
Securities of the Investor and all other Holders who have requested inclusion of Registrable
Securities pursuant to Section 4.5(a)(ii) or Section 4.5(a)(iv), as applicable,
pro rata
on
the basis of the aggregate number of such securities or shares owned by each such person and
(C) lastly, any other securities of the Company that have been requested to be so included,
subject to the terms of this Agreement;
provided
,
however
, that if the Company has, prior to
the Signing Date, entered into an agreement with respect to its securities that is
inconsistent with the order of priority contemplated hereby then it shall apply the order of
priority in such conflicting agreement to the extent that it would otherwise result in a
breach under such agreement.
(b)
Expenses of Registration
. All Registration Expenses incurred in connection with
any registration, qualification or compliance hereunder shall be borne by the Company. All Selling
Expenses incurred in connection with any registrations hereunder shall be borne by the holders of
the securities so registered
pro rata
on the basis of the aggregate offering or sale price of the
securities so registered.
(c)
Obligations of the Company
. The Company shall use its reasonable best efforts,
for so long as there are Registrable Securities outstanding, to take such actions as are under its
control to not become an ineligible issuer (as defined in Rule 405 under the Securities Act) and to
remain a well-known seasoned issuer (as defined in Rule 405 under the Securities Act) if it has
such status on the Signing Date or becomes eligible for such status in the future. In addition,
whenever required to effect the registration of any Registrable Securities or facilitate the
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distribution of Registrable Securities pursuant to an effective Shelf Registration Statement,
the Company shall, as expeditiously as reasonably practicable:
(i) Prepare and file with the SEC a prospectus supplement with respect to a proposed
offering of Registrable Securities pursuant to an effective registration statement, subject
to Section 4.5(d), keep such registration statement effective and keep such prospectus
supplement current until the securities described therein are no longer Registrable
Securities.
(ii) Prepare and file with the SEC such amendments and supplements to the applicable
registration statement and the prospectus or prospectus supplement used in connection with
such registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement.
(iii) Furnish to the Holders and any underwriters such number of copies of the
applicable registration statement and each such amendment and supplement thereto (including
in each case all exhibits) and of a prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable Securities owned or
to be distributed by them.
(iv) Use its reasonable best efforts to register and qualify the securities covered by
such registration statement under such other securities or Blue Sky laws of such
jurisdictions as shall be reasonably requested by the Holders or any managing
underwriter(s), to keep such registration or qualification in effect for so long as such
registration statement remains in effect, and to take any other action which may be
reasonably necessary to enable such seller to consummate the disposition in such
jurisdictions of the securities owned by such Holder;
provided
that the Company shall not be
required in connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or jurisdictions.
(v) Notify each Holder of Registrable Securities at any time when a prospectus relating
thereto is required to be delivered under the Securities Act of the happening of any event
as a result of which the applicable prospectus, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the circumstances
then existing.
(vi) Give written notice to the Holders:
(A) when any registration statement filed pursuant to Section 4.5(a) or any
amendment thereto has been filed with the SEC (except for any amendment effected by
the filing of a document with the SEC pursuant to the Exchange Act) and when such
registration statement or any post-effective amendment thereto has become effective;
-21-
(B) of any request by the SEC for amendments or supplements to any registration
statement or the prospectus included therein or for additional information;
(C) of the issuance by the SEC of any stop order suspending the effectiveness
of any registration statement or the initiation of any proceedings for that purpose;
(D) of the receipt by the Company or its legal counsel of any notification with
respect to the suspension of the qualification of the Common Stock for sale in any
jurisdiction or the initiation or threatening of any proceeding for such purpose;
(E) of the happening of any event that requires the Company to make changes in
any effective registration statement or the prospectus related to the registration
statement in order to make the statements therein not misleading (which notice shall
be accompanied by an instruction to suspend the use of the prospectus until the
requisite changes have been made); and
(F) if at any time the representations and warranties of the Company contained
in any underwriting agreement contemplated by Section 4.5(c)(x) cease to be true and
correct.
(vii) Use its reasonable best efforts to prevent the issuance or obtain the withdrawal
of any order suspending the effectiveness of any registration statement referred to in
Section 4.5(c)(vi)(C) at the earliest practicable time.
(viii) Upon the occurrence of any event contemplated by Section 4.5(c)(v) or
4.5(c)(vi)(E), promptly prepare a post-effective amendment to such registration statement or
a supplement to the related prospectus or file any other required document so that, as
thereafter delivered to the Holders and any underwriters, the prospectus will not contain an
untrue statement of a material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made, not
misleading. If the Company notifies the Holders in accordance with Section 4.5(c)(vi)(E) to
suspend the use of the prospectus until the requisite changes to the prospectus have been
made, then the Holders and any underwriters shall suspend use of such prospectus and use
their reasonable best efforts to return to the Company all copies of such prospectus (at the
Companys expense) other than permanent file copies then in such Holders or underwriters
possession. The total number of days that any such suspension may be in effect in any
12-month period shall not exceed 90 days.
(ix) Use reasonable best efforts to procure the cooperation of the Companys transfer
agent in settling any offering or sale of Registrable Securities, including with respect to
the transfer of physical stock certificates into book-entry form in accordance with any
procedures reasonably requested by the Holders or any managing underwriter(s).
-22-
(x) If an underwritten offering is requested pursuant to Section 4.5(a)(ii), enter into
an underwriting agreement in customary form, scope and substance and take all such other
actions reasonably requested by the Holders of a majority of the Registrable Securities
being sold in connection therewith or by the managing underwriter(s), if any, to expedite or
facilitate the underwritten disposition of such Registrable Securities, and in connection
therewith in any underwritten offering (including making members of management and
executives of the Company available to participate in road shows, similar sales events and
other marketing activities), (A) make such representations and warranties to the Holders
that are selling stockholders and the managing underwriter(s), if any, with respect to the
business of the Company and its subsidiaries, and the Shelf Registration Statement,
prospectus and documents, if any, incorporated or deemed to be incorporated by reference
therein, in each case, in customary form, substance and scope, and, if true, confirm the
same if and when requested, (B) use its reasonable best efforts to furnish the underwriters
with opinions of counsel to the Company, addressed to the managing underwriter(s), if any,
covering the matters customarily covered in such opinions requested in underwritten
offerings, (C) use its reasonable best efforts to obtain cold comfort letters from the
independent certified public accountants of the Company (and, if necessary, any other
independent certified public accountants of any business acquired by the Company for which
financial statements and financial data are included in the Shelf Registration Statement)
who have certified the financial statements included in such Shelf Registration Statement,
addressed to each of the managing underwriter(s), if any, such letters to be in customary
form and covering matters of the type customarily covered in cold comfort letters, (D) if
an underwriting agreement is entered into, the same shall contain indemnification provisions
and procedures customary in underwritten offerings (provided that the Investor shall not be
obligated to provide any indemnity), and (E) deliver such documents and certificates as may
be reasonably requested by the Holders of a majority of the Registrable Securities being
sold in connection therewith, their counsel and the managing underwriter(s), if any, to
evidence the continued validity of the representations and warranties made pursuant to
clause (i) above and to evidence compliance with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company.
(xi) Make available for inspection by a representative of Holders that are selling
stockholders, the managing underwriter(s), if any, and any attorneys or accountants retained
by such Holders or managing underwriter(s), at the offices where normally kept, during
reasonable business hours, financial and other records, pertinent corporate documents and
properties of the Company, and cause the officers, directors and employees of the Company to
supply all information in each case reasonably requested (and of the type customarily
provided in connection with due diligence conducted in connection with a registered public
offering of securities) by any such representative, managing underwriter(s), attorney or
accountant in connection with such Shelf Registration Statement.
(xii) Use reasonable best efforts to cause all such Registrable Securities to be listed
on each national securities exchange on which similar securities issued by the Company are
then listed or, if no similar securities issued by the Company are then listed on any
national securities exchange, use its reasonable best efforts to cause all such
-23-
Registrable Securities to be listed on such securities exchange as the Investor may
designate.
(xiii) If requested by Holders of a majority of the Registrable Securities being
registered and/or sold in connection therewith, or the managing underwriter(s), if any,
promptly include in a prospectus supplement or amendment such information as the Holders of
a majority of the Registrable Securities being registered and/or sold in connection
therewith or managing underwriter(s), if any, may reasonably request in order to permit the
intended method of distribution of such securities and make all required filings of such
prospectus supplement or such amendment as soon as practicable after the Company has
received such request.
(xiv) Timely provide to its security holders earning statements satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.
(d)
Suspension of Sales
. Upon receipt of written notice from the Company that a
registration statement, prospectus or prospectus supplement contains or may contain an untrue
statement of a material fact or omits or may omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that circumstances exist that
make inadvisable use of such registration statement, prospectus or prospectus supplement, the
Investor and each Holder of Registrable Securities shall forthwith discontinue disposition of
Registrable Securities until the Investor and/or Holder has received copies of a supplemented or
amended prospectus or prospectus supplement, or until the Investor and/or such Holder is advised in
writing by the Company that the use of the prospectus and, if applicable, prospectus supplement may
be resumed, and, if so directed by the Company, the Investor and/or such Holder shall deliver to
the Company (at the Companys expense) all copies, other than permanent file copies then in the
Investor and/or such Holders possession, of the prospectus and, if applicable, prospectus
supplement covering such Registrable Securities current at the time of receipt of such notice. The
total number of days that any such suspension may be in effect in any 12-month period shall not
exceed 90 days.
(e)
Termination of Registration Rights
. A Holders registration rights as to any
securities held by such Holder (and its Affiliates, partners, members and former members) shall not
be available unless such securities are Registrable Securities.
(f)
Furnishing Information
.
(i) Neither the Investor nor any Holder shall use any free writing prospectus (as
defined in Rule 405) in connection with the sale of Registrable Securities without the prior
written consent of the Company.
(ii) It shall be a condition precedent to the obligations of the Company to take any
action pursuant to Section 4.5(c) that Investor and/or the selling Holders and the
underwriters, if any, shall furnish to the Company such information regarding themselves,
the Registrable Securities held by them and the intended method of disposition of such
securities as shall be required to effect the registered offering of their Registrable
Securities.
-24-
(g)
Indemnification
.
(i) The Company agrees to indemnify each Holder and, if a Holder is a person other than
an individual, such Holders officers, directors, employees, agents, representatives and
Affiliates, and each Person, if any, that controls a Holder within the meaning of the
Securities Act (each, an
Indemnitee
), against any and all losses, claims, damages,
actions, liabilities, costs and expenses (including reasonable fees, expenses and
disbursements of attorneys and other professionals incurred in connection with
investigating, defending, settling, compromising or paying any such losses, claims, damages,
actions, liabilities, costs and expenses), joint or several, arising out of or based upon
any untrue statement or alleged untrue statement of material fact contained in any
registration statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto or any documents incorporated therein by
reference or contained in any free writing prospectus (as such term is defined in Rule 405)
prepared by the Company or authorized by it in writing for use by such Holder (or any
amendment or supplement thereto); or any omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
provided
, that the Company shall
not be liable to such Indemnitee in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense arises out of or
is based upon (A) an untrue statement or omission made in such registration statement,
including any such preliminary prospectus or final prospectus contained therein or any such
amendments or supplements thereto or contained in any free writing prospectus (as such term
is defined in Rule 405) prepared by the Company or authorized by it in writing for use by
such Holder (or any amendment or supplement thereto), in reliance upon and in conformity
with information regarding such Indemnitee or its plan of distribution or ownership
interests which was furnished in writing to the Company by such Indemnitee for use in
connection with such registration statement, including any such preliminary prospectus or
final prospectus contained therein or any such amendments or supplements thereto, or (B)
offers or sales effected by or on behalf of such Indemnitee by means of (as defined in
Rule 159A) a free writing prospectus (as defined in Rule 405) that was not authorized in
writing by the Company.
(ii) If the indemnification provided for in Section 4.5(g)(i) is unavailable to an
Indemnitee with respect to any losses, claims, damages, actions, liabilities, costs or
expenses referred to therein or is insufficient to hold the Indemnitee harmless as
contemplated therein, then the Company, in lieu of indemnifying such Indemnitee, shall
contribute to the amount paid or payable by such Indemnitee as a result of such losses,
claims, damages, actions, liabilities, costs or expenses in such proportion as is
appropriate to reflect the relative fault of the Indemnitee, on the one hand, and the
Company, on the other hand, in connection with the statements or omissions which resulted in
such losses, claims, damages, actions, liabilities, costs or expenses as well as any other
relevant equitable considerations. The relative fault of the Company, on the one hand, and
of the Indemnitee, on the other hand, shall be determined by reference to, among other
factors, whether the untrue statement of a material fact or omission to state a material
fact relates to information supplied by the Company or by the Indemnitee and the parties
relative intent, knowledge, access to information and opportunity to correct or prevent such
-25-
statement or omission; the Company and each Holder agree that it would not be just and
equitable if contribution pursuant to this Section 4.5(g)(ii) were determined by
pro rata
allocation or by any other method of allocation that does not take account of the equitable
considerations referred to in Section 4.5(g)(i). No Indemnitee guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from the Company if the Company was not guilty of such fraudulent
misrepresentation.
(h)
Assignment of Registration Rights
. The rights of the Investor to registration of
Registrable Securities pursuant to Section 4.5(a) may be assigned by the Investor to a transferee
or assignee of Registrable Securities with a liquidation preference or, in the case of Registrable
Securities other than Preferred Shares, a market value, no less than an amount equal to (i) 2% of
the initial aggregate liquidation preference of the Preferred Shares if such initial aggregate
liquidation preference is less than $2 billion and (ii) $200 million if the initial aggregate
liquidation preference of the Preferred Shares is equal to or greater than $2 billion;
provided
,
however
, the transferor shall, within ten days after such transfer, furnish to the Company written
notice of the name and address of such transferee or assignee and the number and type of
Registrable Securities that are being assigned. For purposes of this Section 4.5(h), market
value per share of Common Stock shall be the last reported sale price of the Common Stock on the
national securities exchange on which the Common Stock is listed or admitted to trading on the last
trading day prior to the proposed transfer, and the market value for the Warrant (or any portion
thereof) shall be the market value per share of Common Stock into which the Warrant (or such
portion) is exercisable less the exercise price per share.
(i)
Clear Market
. With respect to any underwritten offering of Registrable Securities
by the Investor or other Holders pursuant to this Section 4.5, the Company agrees not to effect
(other than pursuant to such registration or pursuant to a Special Registration) any public sale or
distribution, or to file any Shelf Registration Statement (other than such registration or a
Special Registration) covering, in the case of an underwritten offering of Common Stock or
Warrants, any of its equity securities or, in the case of an underwritten offering of Preferred
Shares, any Preferred Stock of the Company, or, in each case, any securities convertible into or
exchangeable or exercisable for such securities, during the period not to exceed ten days prior and
60 days following the effective date of such offering or such longer period up to 90 days as may be
requested by the managing underwriter for such underwritten offering. The Company also agrees to
cause such of its directors and senior executive officers to execute and deliver customary lock-up
agreements in such form and for such time period up to 90 days as may be requested by the managing
underwriter.
Special Registration
means the registration of (A) equity securities and/or options
or other rights in respect thereof solely registered on Form S-4 or Form S-8 (or successor form) or
(B) shares of equity securities and/or options or other rights in respect thereof to be offered to
directors, members of management, employees, consultants, customers, lenders or vendors of the
Company or Company Subsidiaries or in connection with dividend reinvestment plans.
(j)
Rule 144; Rule 144A
. With a view to making available to the Investor and Holders
the benefits of certain rules and regulations of the SEC which may permit the sale of the
Registrable Securities to the public without registration, the Company agrees to use its reasonable
best efforts to:
-26-
(i) make and keep public information available, as those terms are understood and
defined in Rule 144(c)(1) or any similar or analogous rule promulgated under the Securities
Act, at all times after the Signing Date;
(ii) (A) file with the SEC, in a timely manner, all reports and other documents
required of the Company under the Exchange Act, and (B) if at any time the Company is not
required to file such reports, make available, upon the request of any Holder, such
information necessary to permit sales pursuant to Rule 144A (including the information
required by Rule 144A(d)(4) under the Securities Act);
(iii) so long as the Investor or a Holder owns any Registrable Securities, furnish to
the Investor or such Holder forthwith upon request: a written statement by the Company as to
its compliance with the reporting requirements of Rule 144 under the Securities Act, and of
the Exchange Act; a copy of the most recent annual or quarterly report of the Company; and
such other reports and documents as the Investor or Holder may reasonably request in
availing itself of any rule or regulation of the SEC allowing it to sell any such securities
to the public without registration; and
(iv) take such further action as any Holder may reasonably request, all to the extent
required from time to time to enable such Holder to sell Registrable Securities without
registration under the Securities Act.
(k) As used in this Section 4.5, the following terms shall have the following respective
meanings:
(i)
Holder
means the Investor and any other holder of Registrable Securities to whom
the registration rights conferred by this Agreement have been transferred in compliance with
Section 4.5(h) hereof.
(ii)
Holders Counsel
means one counsel for the selling Holders chosen by Holders
holding a majority interest in the Registrable Securities being registered.
(iii)
Register
,
registered
, and
registration
shall refer to a registration
effected by preparing and (A) filing a registration statement in compliance with the
Securities Act and applicable rules and regulations thereunder, and the declaration or
ordering of effectiveness of such registration statement or (B) filing a prospectus and/or
prospectus supplement in respect of an appropriate effective registration statement on Form
S-3.
(iv)
Registrable Securities
means (A) all Preferred Shares, (B) the Warrant (subject
to Section 4.5(p)) and (C) any equity securities issued or issuable directly or indirectly
with respect to the securities referred to in the foregoing clauses (A) or (B) by way of
conversion, exercise or exchange thereof, including the Warrant Shares, or share dividend or
share split or in connection with a combination of shares, recapitalization,
reclassification, merger, amalgamation, arrangement, consolidation or other reorganization,
provided
that, once issued, such securities will not be Registrable Securities when (1) they
are sold pursuant to an effective registration statement under the Securities Act, (2)
except as provided below in Section 4.5(o), they may be sold pursuant
-27-
to Rule 144 without limitation thereunder on volume or manner of sale, (3) they shall
have ceased to be outstanding or (4) they have been sold in a private transaction in which
the transferors rights under this Agreement are not assigned to the transferee of the
securities. No Registrable Securities may be registered under more than one registration
statement at any one time.
(v)
Registration Expenses
mean all expenses incurred by the Company in effecting any
registration pursuant to this Agreement (whether or not any registration or prospectus
becomes effective or final) or otherwise complying with its obligations under this Section
4.5, including all registration, filing and listing fees, printing expenses, fees and
disbursements of counsel for the Company, blue sky fees and expenses, expenses incurred in
connection with any road show, the reasonable fees and disbursements of Holders Counsel,
and expenses of the Companys independent accountants in connection with any regular or
special reviews or audits incident to or required by any such registration, but shall not
include Selling Expenses.
(vi)
Rule 144
,
Rule 144A
,
Rule 159A
,
Rule 405
and
Rule 415
mean, in each
case, such rule promulgated under the Securities Act (or any successor provision), as the
same shall be amended from time to time.
(vii)
Selling Expenses
mean all discounts, selling commissions and stock transfer
taxes applicable to the sale of Registrable Securities and fees and disbursements of counsel
for any Holder (other than the fees and disbursements of Holders Counsel included in
Registration Expenses).
(l) At any time, any holder of Securities (including any Holder) may elect to forfeit its
rights set forth in this Section 4.5 from that date forward;
provided
, that a Holder forfeiting
such rights shall nonetheless be entitled to participate under Section 4.5(a)(iv) (vi) in any
Pending Underwritten Offering to the same extent that such Holder would have been entitled to if
the holder had not withdrawn; and
provided
,
further
, that no such forfeiture shall terminate a
Holders rights or obligations under Section 4.5(f) with respect to any prior registration or
Pending Underwritten Offering.
Pending Underwritten Offering
means, with respect to any Holder
forfeiting its rights pursuant to this Section 4.5(l), any underwritten offering of Registrable
Securities in which such Holder has advised the Company of its intent to register its Registrable
Securities either pursuant to Section 4.5(a)(ii) or 4.5(a)(iv) prior to the date of such Holders
forfeiture.
(m)
Specific Performance
. The parties hereto acknowledge that there would be no
adequate remedy at law if the Company fails to perform any of its obligations under this Section
4.5 and that the Investor and the Holders from time to time may be irreparably harmed by any such
failure, and accordingly agree that the Investor and such Holders, in addition to any other remedy
to which they may be entitled at law or in equity, to the fullest extent permitted and enforceable
under applicable law shall be entitled to compel specific performance of the obligations of the
Company under this Section 4.5 in accordance with the terms and conditions of this Section 4.5.
-28-
(n)
No Inconsistent Agreements
. The Company shall not, on or after the Signing Date,
enter into any agreement with respect to its securities that may impair the rights granted to the
Investor and the Holders under this Section 4.5 or that otherwise conflicts with the provisions
hereof in any manner that may impair the rights granted to the Investor and the Holders under this
Section 4.5. In the event the Company has, prior to the Signing Date, entered into any agreement
with respect to its securities that is inconsistent with the rights granted to the Investor and the
Holders under this Section 4.5 (including agreements that are inconsistent with the order of
priority contemplated by Section 4.5(a)(vi)) or that may otherwise conflict with the provisions
hereof, the Company shall use its reasonable best efforts to amend such agreements to ensure they
are consistent with the provisions of this Section 4.5.
(o)
Certain Offerings by the Investor
. In the case of any securities held by the
Investor that cease to be Registrable Securities solely by reason of clause (2) in the definition
of Registrable Securities, the provisions of Sections 4.5(a)(ii), clauses (iv), (ix) and
(x)-(xii) of Section 4.5(c), Section 4.5(g) and Section 4.5(i) shall continue to apply until such
securities otherwise cease to be Registrable Securities. In any such case, an underwritten
offering or other disposition shall include any distribution of such securities on behalf of the
Investor by one or more broker-dealers, an underwriting agreement shall include any purchase
agreement entered into by such broker-dealers, and any registration statement or prospectus
shall include any offering document approved by the Company and used in connection with such
distribution.
(p)
Registered Sales of the Warrant
. The Holders agree to sell the Warrant or any
portion thereof under the Shelf Registration Statement only beginning 30 days after notifying the
Company of any such sale, during which 30-day period the Investor and all Holders of the Warrant
shall take reasonable steps to agree to revisions to the Warrant to permit a public distribution of
the Warrant, including entering into a warrant agreement and appointing a warrant agent.
4.6
Voting of Warrant Shares
. Notwithstanding anything in this Agreement to the
contrary, the Investor shall not exercise any voting rights with respect to the Warrant Shares.
4.7
Depositary Shares
. Upon request by the Investor at any time following the Closing
Date, the Company shall promptly enter into a depositary arrangement, pursuant to customary
agreements reasonably satisfactory to the Investor and with a depositary reasonably acceptable to
the Investor, pursuant to which the Preferred Shares may be deposited and depositary shares, each
representing a fraction of a Preferred Share as specified by the Investor, may be issued. From and
after the execution of any such depositary arrangement, and the deposit of any Preferred Shares
pursuant thereto, the depositary shares issued pursuant thereto shall be deemed Preferred Shares
and, as applicable, Registrable Securities for purposes of this Agreement.
4.8
Restriction on Dividends and Repurchases
.
(a) Prior to the earlier of (x) the third anniversary of the Closing Date and (y) the date on
which the Preferred Shares have been redeemed in whole or the Investor has transferred all of
-29-
the Preferred Shares to third parties which are not Affiliates of the Investor, neither the
Company nor any Company Subsidiary shall, without the consent of the Investor:
(i) declare or pay any dividend or make any distribution on the Common Stock (other
than (A) regular quarterly cash dividends of not more than the amount of the last quarterly
cash dividend per share declared or, if lower, publicly announced an intention to declare,
on the Common Stock prior to October 14, 2008, as adjusted for any stock split, stock
dividend, reverse stock split, reclassification or similar transaction, (B) dividends
payable solely in shares of Common Stock and (C) dividends or distributions of rights or
Junior Stock in connection with a stockholders rights plan); or
(ii) redeem, purchase or acquire any shares of Common Stock or other capital stock or
other equity securities of any kind of the Company, or any trust preferred securities issued
by the Company or any Affiliate of the Company, other than (A) redemptions, purchases or
other acquisitions of the Preferred Shares, (B) redemptions, purchases or other acquisitions
of shares of Common Stock or other Junior Stock, in each case in this clause (B) in
connection with the administration of any employee benefit plan in the ordinary course of
business (including purchases to offset the Share Dilution Amount (as defined below)
pursuant to a publicly announced repurchase plan) and consistent with past practice;
provided
that any purchases to offset the Share Dilution Amount shall in no event exceed the
Share Dilution Amount, (C) purchases or other acquisitions by a broker-dealer subsidiary of
the Company solely for the purpose of market-making, stabilization or customer facilitation
transactions in Junior Stock or Parity Stock in the ordinary course of its business, (D)
purchases by a broker-dealer subsidiary of the Company of capital stock of the Company for
resale pursuant to an offering by the Company of such capital stock underwritten by such
broker-dealer subsidiary, (E) any redemption or repurchase of rights pursuant to any
stockholders rights plan, (F) the acquisition by the Company or any of the Company
Subsidiaries of record ownership in Junior Stock or Parity Stock for the beneficial
ownership of any other persons (other than the Company or any other Company Subsidiary),
including as trustees or custodians, and (G) the exchange or conversion of Junior Stock for
or into other Junior Stock or of Parity Stock or trust preferred securities for or into
other Parity Stock (with the same or lesser aggregate liquidation amount) or Junior Stock,
in each case set forth in this clause (G), solely to the extent required pursuant to binding
contractual agreements entered into prior to the Signing Date or any subsequent agreement
for the accelerated exercise, settlement or exchange thereof for Common Stock (clauses (C)
and (F), collectively, the
Permitted Repurchases
).
Share Dilution Amount
means the
increase in the number of diluted shares outstanding (determined in accordance with GAAP,
and as measured from the date of the Companys most recently filed Company Financial
Statements prior to the Closing Date) resulting from the grant, vesting or exercise of
equity-based compensation to employees and equitably adjusted for any stock split, stock
dividend, reverse stock split, reclassification or similar transaction.
(b) Until such time as the Investor ceases to own any Preferred Shares, the Company shall not
repurchase any Preferred Shares from any holder thereof, whether by means of open market purchase,
negotiated transaction, or otherwise, other than Permitted Repurchases, unless
-30-
it offers to repurchase a ratable portion of the Preferred Shares then held by the Investor on
the same terms and conditions.
(c)
Junior Stock
means Common Stock and any other class or series of stock of the Company
the terms of which expressly provide that it ranks junior to the Preferred Shares as to dividend
rights and/or as to rights on liquidation, dissolution or winding up of the Company.
Parity
Stock
means any class or series of stock of the Company the terms of which do not expressly
provide that such class or series will rank senior or junior to the Preferred Shares as to dividend
rights and/or as to rights on liquidation, dissolution or winding up of the Company (in each case
without regard to whether dividends accrue cumulatively or non-cumulatively).
4.9
Repurchase of Investor Securities
.
(a) Following the redemption in whole of the Preferred Shares held by the Investor or the
Transfer by the Investor of all of the Preferred Shares to one or more third parties not affiliated
with the Investor, the Company may repurchase, in whole or in part, at any time any other equity
securities of the Company purchased by the Investor pursuant to this Agreement or the Warrant and
then held by the Investor, upon notice given as provided in clause (b) below, at the Fair Market
Value of the equity security.
(b) Notice of every repurchase of equity securities of the Company held by the Investor shall
be given at the address and in the manner set forth for such party in Section 5.6. Each notice of
repurchase given to the Investor shall state: (i) the number and type of securities to be
repurchased, (ii) the Board of Directors determination of Fair Market Value of such securities and
(iii) the place or places where certificates representing such securities are to be surrendered for
payment of the repurchase price. The repurchase of the securities specified in the notice shall
occur as soon as practicable following the determination of the Fair Market Value of the
securities.
(c) As used in this Section 4.9, the following terms shall have the following respective
meanings:
(i)
Appraisal Procedure
means a procedure whereby two independent appraisers, one
chosen by the Company and one by the Investor, shall mutually agree upon the Fair Market
Value. Each party shall deliver a notice to the other appointing its appraiser within 10
days after the Appraisal Procedure is invoked. If within 30 days after appointment of the
two appraisers they are unable to agree upon the Fair Market Value, a third independent
appraiser shall be chosen within 10 days thereafter by the mutual consent of such first two
appraisers. The decision of the third appraiser so appointed and chosen shall be given
within 30 days after the selection of such third appraiser. If three appraisers shall be
appointed and the determination of one appraiser is disparate from the middle determination
by more than twice the amount by which the other determination is disparate from the middle
determination, then the determination of such appraiser shall be excluded, the remaining two
determinations shall be averaged and such average shall be binding and conclusive upon the
Company and the Investor; otherwise, the average of all three determinations shall be
binding upon the Company and the Investor. The costs of conducting any Appraisal Procedure
shall be borne by the Company.
-31-
(ii)
Fair Market Value
means, with respect to any security, the fair market value of
such security as determined by the Board of Directors, acting in good faith in reliance on
an opinion of a nationally recognized independent investment banking firm retained by the
Company for this purpose and certified in a resolution to the Investor. If the Investor
does not agree with the Board of Directors determination, it may object in writing within
10 days of receipt of the Board of Directors determination. In the event of such an
objection, an authorized representative of the Investor and the chief executive officer of
the Company shall promptly meet to resolve the objection and to agree upon the Fair Market
Value. If the chief executive officer and the authorized representative are unable to agree
on the Fair Market Value during the 10-day period following the delivery of the Investors
objection, the Appraisal Procedure may be invoked by either party to determine the Fair
Market Value by delivery of a written notification thereof not later than the
30
th
day after delivery of the Investors objection.
4.10
Executive Compensation
. Until such time as the Investor ceases to own any debt
or equity securities of the Company acquired pursuant to this Agreement or the Warrant, the Company
shall take all necessary action to ensure that its Benefit Plans with respect to its Senior
Executive Officers comply in all respects with Section 111(b) of the EESA as implemented by any
guidance or regulation thereunder that has been issued and is in effect as of the Closing Date, and
shall not adopt any new Benefit Plan with respect to its Senior Executive Officers that does not
comply therewith.
Senior Executive Officers
means the Companys senior executive officers as
defined in subsection 111(b)(3) of the EESA and regulations issued thereunder, including the rules
set forth in 31 C.F.R. Part 30.
Article V
Miscellaneous
5.1
Termination
. This Agreement may be terminated at any time prior to the Closing:
(a) by either the Investor or the Company if the Closing shall not have occurred by the
30
th
calendar day following the Signing Date;
provided
,
however
, that in the event the
Closing has not occurred by such 30
th
calendar day, the parties will consult in good
faith to determine whether to extend the term of this Agreement, it being understood that the
parties shall be required to consult only until the fifth day after such 30
th
calendar
day and not be under any obligation to extend the term of this Agreement thereafter;
provided
,
further
, that the right to terminate this Agreement under this Section 5.1(a) shall not be
available to any party whose breach of any representation or warranty or failure to perform any
obligation under this Agreement shall have caused or resulted in the failure of the Closing to
occur on or prior to such date; or
(b) by either the Investor or the Company in the event that any Governmental Entity shall have
issued an order, decree or ruling or taken any other action restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement and such order, decree, ruling or other
action shall have become final and nonappealable; or
(c) by the mutual written consent of the Investor and the Company.
-32-
In the event of termination of this Agreement as provided in this Section 5.1, this Agreement shall
forthwith become void and there shall be no liability on the part of either party hereto except
that nothing herein shall relieve either party from liability for any breach of this Agreement.
5.2
Survival of Representations and Warranties
. All covenants and agreements, other
than those which by their terms apply in whole or in part after the Closing, shall terminate as of
the Closing. The representations and warranties of the Company made herein or in any certificates
delivered in connection with the Closing shall survive the Closing without limitation.
5.3
Amendment
. No amendment of any provision of this Agreement will be effective
unless made in writing and signed by an officer or a duly authorized representative of each party;
provided
that the Investor may unilaterally amend any provision of this Agreement to the extent
required to comply with any changes after the Signing Date in applicable federal statutes. No
failure or delay by any party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further
exercise of any other right, power or privilege. The rights and remedies herein provided shall be
cumulative of any rights or remedies provided by law.
5.4
Waiver of Conditions
. The conditions to each partys obligation to consummate the
Purchase are for the sole benefit of such party and may be waived by such party in whole or in part
to the extent permitted by applicable law. No waiver will be effective unless it is in a writing
signed by a duly authorized officer of the waiving party that makes express reference to the
provision or provisions subject to such waiver.
5.5
Governing Law: Submission to Jurisdiction, Etc.
This Agreement will be governed
by and construed in accordance with the federal law of the United States if and to the extent such
law is applicable, and otherwise in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within such State. Each of the parties hereto agrees
(a) to submit to the exclusive jurisdiction and venue of the United States District Court for the
District of Columbia and the United States Court of Federal Claims for any and all civil actions,
suits or proceedings arising out of or relating to this Agreement or the Warrant or the
transactions contemplated hereby or thereby, and (b) that notice may be served upon (i) the Company
at the address and in the manner set forth for notices to the Company in Section 5.6 and (ii) the
Investor in accordance with federal law. To the extent permitted by applicable law, each of the
parties hereto hereby unconditionally waives trial by jury in any civil legal action or proceeding
relating to this Agreement or the Warrant or the transactions contemplated hereby or thereby.
5.6
Notices
. Any notice, request, instruction or other document to be given hereunder
by any party to the other will be in writing and will be deemed to have been duly given (a) on the
date of delivery if delivered personally, or by facsimile, upon confirmation of receipt, or (b) on
the second business day following the date of dispatch if delivered by a recognized next day
courier service. All notices to the Company shall be delivered as set forth in
Schedule A
,
or pursuant to such other instruction as may be designated in writing by the Company to the
Investor. All notices to the Investor shall be delivered as set forth below, or pursuant to such
other instructions as may be designated in writing by the Investor to the Company.
-33-
If to the Investor:
United States Department of the Treasury
1500 Pennsylvania Avenue, NW, Room 2312
Washington, D.C. 20220
Attention: Assistant General Counsel (Banking and Finance)
Facsimile: (202) 622-1974
5.7
Definitions
.
(a) When a reference is made in this Agreement to a subsidiary of a person, the term
subsidiary
means any corporation, partnership, joint venture, limited liability company or other
entity (x) of which such person or a subsidiary of such person is a general partner or (y) of which
a majority of the voting securities or other voting interests, or a majority of the securities or
other interests of which having by their terms ordinary voting power to elect a majority of the
board of directors or persons performing similar functions with respect to such entity, is directly
or indirectly owned by such person and/or one or more subsidiaries thereof.
(b) The term
Affiliate
means, with respect to any person, any person directly or indirectly
controlling, controlled by or under common control with, such other person. For purposes of this
definition,
control
(including, with correlative meanings, the terms
controlled by
and
under
common control with
) when used with respect to any person, means the possession, directly or
indirectly, of the power to cause the direction of management and/or policies of such person,
whether through the ownership of voting securities by contract or otherwise.
(c) The terms
knowledge of the Company
or
Companys knowledge
mean the actual knowledge
after reasonable and due inquiry of the
officers
(as such term is defined in Rule 3b-2 under the
Exchange Act, but excluding any Vice President or Secretary) of the Company.
5.8
Assignment
. Neither this Agreement nor any right, remedy, obligation nor
liability arising hereunder or by reason hereof shall be assignable by any party hereto without the
prior written consent of the other party, and any attempt to assign any right, remedy, obligation
or liability hereunder without such consent shall be void, except (a) an assignment, in the case of
a Business Combination where such party is not the surviving entity, or a sale of substantially all
of its assets, to the entity which is the survivor of such Business Combination or the purchaser in
such sale and (b) as provided in Section 4.5.
5.9
Severability
. If any provision of this Agreement or the Warrant, or the
application thereof to any person or circumstance, is determined by a court of competent
jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the
application of such provision to persons or circumstances other than those as to which it has been
held invalid or unenforceable, will remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby, so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially adverse to any party.
Upon such
-34-
determination, the parties shall negotiate in good faith in an effort to agree upon a suitable
and equitable substitute provision to effect the original intent of the parties.
5.10
No Third Party Beneficiaries
. Nothing contained in this Agreement, expressed or
implied, is intended to confer upon any person or entity other than the Company and the Investor
any benefit, right or remedies, except that the provisions of Section 4.5 shall inure to the
benefit of the persons referred to in that Section.
* * *
-35-
ANNEX A
FORM OF CERTIFICATE OF DESIGNATIONS
[SEE ATTACHED]
ANNEX B
FORM OF WAIVER
In consideration for the benefits I will receive as a result of my employers participation in the
United States Department of the Treasurys TARP Capital Purchase Program, I hereby voluntarily
waive any claim against the United States or my employer for any changes to my compensation or
benefits that are required to comply with the regulation issued by the Department of the Treasury
as published in the Federal Register on October 20, 2008.
I acknowledge that this regulation may require modification of the compensation, bonus, incentive
and other benefit plans, arrangements, policies and agreements (including so-called golden
parachute agreements) that I have with my employer or in which I participate as they relate to the
period the United States holds any equity or debt securities of my employer acquired through the
TARP Capital Purchase Program.
This waiver includes all claims I may have under the laws of the United States or any state related
to the requirements imposed by the aforementioned regulation, including without limitation a claim
for any compensation or other payments I would otherwise receive, any challenge to the process by
which this regulation was adopted and any tort or constitutional claim about the effect of these
regulations on my employment relationship.
ANNEX C
FORM OF OPINION
(a) The Company has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the state of its incorporation.
(b) The Preferred Shares have been duly and validly authorized, and, when issued and delivered
pursuant to the Agreement, the Preferred Shares will be duly and validly issued and fully paid and
non-assessable, will not be issued in violation of any preemptive rights, and will rank
pari passu
with or senior to all other series or classes of Preferred Stock issued on the Closing Date with
respect to the payment of dividends and the distribution of assets in the event of any dissolution,
liquidation or winding up of the Company.
(c) The Warrant has been duly authorized and, when executed and delivered as contemplated by
the Agreement, will constitute a valid and legally binding obligation of the Company enforceable
against the Company in accordance with its terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of
creditors rights generally and general equitable principles, regardless of whether such
enforceability is considered in a proceeding at law or in equity.
(d) The shares of Common Stock issuable upon exercise of the Warrant have been duly authorized
and reserved for issuance upon exercise of the Warrant and when so issued in accordance with the
terms of the Warrant will be validly issued, fully paid and non-assessable.
(e) The Company has the corporate power and authority to execute and deliver the Agreement and
the Warrant and to carry out its obligations thereunder (which includes the issuance of the
Preferred Shares, Warrant and Warrant Shares).
(f) The execution, delivery and performance by the Company of the Agreement and the Warrant
and the consummation of the transactions contemplated thereby have been duly authorized by all
necessary corporate action on the part of the Company and its stockholders, and no further approval
or authorization is required on the part of the Company.
(g) The Agreement is a valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors
rights generally and general equitable principles, regardless of whether such enforceability is
considered in a proceeding at law or in equity;
provided
,
however
, such counsel need express no
opinion with respect to Section 4.5(g) or the severability provisions of the Agreement insofar as
Section 4.5(g) is concerned.
ANNEX D
FORM OF WARRANT
[SEE ATTACHED]
Exhibit 10.4
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (the Agreement) is made by and between
WINTRUST FINANCIAL CORPORATION (Wintrust), a bank holding company, and Edward J. Wehmer, an
individual resident in the State of Illinois (Executive) as of December 19, 2008.
WITNESSETH THAT:
WHEREAS, Wintrust is a bank holding company;
WHEREAS, Executive has particular expertise and knowledge concerning the business of
Wintrust and its operations and is a valued member of Wintrusts senior management;
WHEREAS, by virtue of Executives employment with Wintrust, Executive will become
acquainted with certain confidential information regarding the services, customers, methods of
doing business, strategic plans, marketing, and other aspects of the business of Wintrust or its
Affiliates; and
WHEREAS, Wintrust and Executive desire to set forth in this Agreement the terms,
conditions and obligations of the parties with respect to such employment effective as of the date
first written above (the Effective Date) and this Agreement is intended by the parties to
supersede all previous agreements and understanding, whether written or oral, concerning such
employment.
NOW THEREFORE, in consideration of the covenants and agreements contained herein, of
Executives employment, of the compensation to be paid by Wintrust for Executives services, and of
Wintrusts other undertakings in this Agreement, the parties hereto do hereby agree as follows:
1.
Scope of Employment
. Executive will be employed as President and Chief
Executive Officer of Wintrust and shall perform such duties as may be assigned to Executive by the
Board of Directors of Wintrust in such position. Executive agrees that during Executives
employment Executive will be subject to and abide by the written policies and practices of
Wintrust. Subject to Sections 9(e) and 9(f) Executive also agrees to assume such new or additional
positions and responsibilities as Executive may from time to time be assigned for or on behalf of
Wintrust or any Affiliate of Wintrust. Notwithstanding the foregoing, during the Term (as defined
in Section 8 herein) of this Agreement, Executive will not be required without Executives consent
to move Executives principal business location to another location more than a 35 mile radius from
Executives principal business location. For purposes of this Agreement, the term Affiliate shall
include but not be limited to the entities listed in Exhibit A to this Agreement and any subsidiary
of any of such entities and shall further include any present or future affiliate of any of them as
defined by the rules and regulations of the Federal Reserve Board. In the event Executive shall
perform services for any Affiliate in addition to serving as President and Chief Executive Officer
of Wintrust, the provisions of this Agreement shall also apply to the performance of such services
by Executive on behalf of the Affiliate.
2.
Compensation and Benefits
. Executive will be paid such base salary as may from
time to time be agreed upon between Executive and Wintrust. Executive will be entitled to coverage
under such compensation plans, insurance plans and other fringe benefit plans and programs as may
from time to time be established for employees of Wintrust in accordance with the terms and
conditions of such plans and programs. Executive shall also be eligible to participate in the
Wintrust 2007 Stock Incentive Plan or any successor Plan thereto.
3.
Extent of Service
. Executive shall devote Executives entire time, attention
and energies to the business of Wintrust during the Term of this Agreement; but this shall not be
construed as preventing Executive from: (a) investing Executives personal assets in such form or
manner as will not require any services on the part of Executive in the operation or the affairs of
the corporations, partnerships and other entities in which such investments are made and in which
Executives participation is solely that of an investor (subject to any and all rules and
regulations of applicable banking regulators or policies of Wintrust governing transactions with
affiliates and ownership interests in customers); (b) engaging (whether or not during normal
business hours) in any other professional, civic or philanthropic activities provided that
Executives engagement does not result in a violation of Executives covenants under this Section
or Sections 4 and 5 hereof; or (c) accepting appointments to the boards of
directors of other companies provided that the Board of Directors of Wintrust approves of such
appointments and Executives performance of Executives duties on such boards does not result in a
violation of Executives covenants under this Section or Sections 4 or 5 hereof.
4.
Competition
. Other than in connection with Executives performance of
Executives duties hereunder, during the period in which Executive performs services for Wintrust
and for a period of
three years
after termination of Executives employment with Wintrust,
regardless of the reason, Executive shall not directly or indirectly, either alone or in
conjunction with any other person, firm, association, company or corporation:
(a) serve as a principal, owner, senior manager, or in a position comparable to that
held by Executive at any time during Executives employment with Wintrust, for a bank or other
financial institution (or any branch or affiliate thereof) which offers to its customers any of the
services provided by Wintrust or its Affiliates and which operates in the Market Area of Wintrust
or any Affiliate;
(b) solicit or conduct business which involves any of the services provided by
Wintrust or its Affiliates from or with any person, corporation or other entity which was (i) a
customer of Wintrust or any Affiliate with whom Executive had direct or indirect contact while
employed by Wintrust or about whom Executive obtained Confidential Information during the fifteen
months prior to the termination of Executives employment with Wintrust, or (ii) a potential
customer with whom Wintrust or any Affiliate has, at the time of Executives termination of
employment with Wintrust, an outstanding oral or written proposal to provide any of the services
provided by Wintrust or its Affiliates and with whom Executive had direct or indirect contact while
employed by Wintrust;
(c) request, advise or directly or indirectly invite any of the existing customers,
suppliers or service providers of Wintrust or any Affiliate to withdraw, curtail or cancel its
business with Wintrust or any Affiliate (other than through mass mailings or general advertisements
not specifically directed at customers of Wintrust or any Affiliate);
(d) hire, solicit, induce or attempt to solicit or induce any employee, consultant,
or agent of Wintrust or any Affiliate (i) to terminate his employment or association with Wintrust
or any Affiliate or (ii) to become employed by or to serve in any capacity by a bank or other
financial institution which operates or is planned to operate in the Market Area of Wintrust or of
any Affiliate; or
(e) in any way participate in planning or opening a bank or other financial
institution which operates or is intended to operate in the Market Area of Wintrust or of any
Affiliate.
For the purposes of this Agreement, the Market Area of Wintrust or of an Affiliate shall
be the area within a ten (10) mile radius of the principal office and branches of Wintrust or of
any Affiliate.
Notwithstanding the foregoing, Executive shall not be prevented from: (i) investing or
owning shares of stock of any corporation engaged in any business provided that such shares are
regularly traded on a national securities exchange or in any over-the-counter market;
(ii) retaining any shares of stock in any corporation which Executive owned prior to the date of
Executives employment with Wintrust (subject to any and all rules and regulations of applicable
banking regulators or policies of Wintrust governing transactions with affiliates and ownership
interests in customers); or (iii) investing as a limited partner (without decision-making
authority) in any private equity fund, provided that Executives involvement in such investment is
solely that of a passive investor (subject to any and all rules and regulations of applicable
banking regulators or policies of the Employer governing transactions with affiliates and ownership
interests in customers).
5.
Confidential Information
. Executive acknowledges that, during Executives
employment with Wintrust, Executive has and will obtain access to Confidential Information of and
for Wintrust or its Affiliates. For purposes of this Agreement, Confidential Information shall
mean information not generally known or available without restriction to the trade or industry,
including, without limitation, the following categories of information and documentation: (a)
documentation and information relating to lending customers of Wintrust or any Affiliate,
including, but not limited to, lists of lending clients with their addresses and account numbers,
credit analysis reports and other credit files, outstanding loan amounts, repayment dates and
instructions, information regarding the use of the loan proceeds, and loan maturity and renewal
dates; (b) documentation and information relating to depositors of
2
Wintrust or any Affiliate, including, but not limited to, lists of depositors with their addresses
and account numbers, amounts held on deposit, types of depository products used and the number of
accounts per customer; (c) documentation and information relating to trust customers of Wintrust or
any Affiliate, including, but not limited to, lists of trust customers with their addresses and
account numbers, trust investment management contracts, identity of investment managers, trust
corpus amounts, and grantor and beneficiary information; (d) documentation and information relating
to investment management clients of Wintrust or any Affiliate, including, but not limited to, lists
of investors with their addresses, account numbers and beneficiary information, investment
management contracts, amount of assets held for management, and the nature of the investment
products used; (e) the identity of actual or potential customers of Wintrust or any Affiliate,
including lists of the same; (f) the identity of suppliers and service providers of Wintrust or any
Affiliate, including lists of the same and the material terms of any supply or service contracts;
(g) marketing materials and information regarding the products and services offered by Wintrust or
any Affiliate and the nature and scope of use of such marketing materials and product information;
(h) policy and procedure manuals and other materials used by Wintrust or any Affiliate in the
training and development of its employees; (i) identity and contents of all computer systems,
programs and software utilized by Wintrust or any Affiliate to conduct its operations and manuals
or other instructions for their use; (j) minutes or other summaries of Board of Directors or other
department or committee meetings held by Wintrust or any Affiliate; (k) the business and strategic
growth plans of Wintrust or any Affiliate; and (l) confidential communication materials provided
for shareholders of Wintrust or of any Affiliate. Absent prior authorization by Wintrust or as
required in Executives duties for Wintrust, Executive will not at any time, directly or
indirectly, use, permit the use of, disclose or permit the disclosure to any third party of any
such Confidential Information to which Executive will be provided access. These obligations apply
both during Executives employment with Wintrust and shall continue beyond the termination of
Executives employment and this Agreement.
6.
Inventions
. All discoveries, designs, improvements, ideas, and inventions,
whether patentable or not, relating to (or suggested by or resulting from) products, services, or
other technology of Wintrust or any Affiliate or relating to (or suggested by or resulting from)
methods or processes used or usable in connection with the business of Wintrust or any Affiliate
that may be conceived, developed, or made by Executive during employment with Wintrust (hereinafter
Inventions), either solely or jointly with others, shall automatically become the sole property
of Wintrust or an Affiliate. Executive shall immediately disclose to Wintrust all such Inventions
and shall, without additional compensation, execute all assignments and other documents deemed
necessary to perfect the property rights of Wintrust or any Affiliate therein. These obligations
shall continue beyond the termination of Executives employment with respect to Inventions
conceived, developed, or made by Executive during employment with Wintrust. The provisions of this
Section 6 shall not apply to any Invention for which no equipment, supplies, facility, or trade
secret information of Wintrust or any Affiliate is used by Executive and which is developed
entirely on Executives own time, unless (a) such Invention relates (i) to the business of Wintrust
or an Affiliate or (ii) to the actual or demonstrably anticipated research or development of
Wintrust or an Affiliate, or (b) such Invention results from work performed by Executive for
Wintrust.
7.
Remedies
. Executive acknowledges that the compliance with the terms of this
Agreement is necessary to protect the Confidential Information and goodwill of Wintrust and its
Affiliates and that any breach by Executive of this Agreement will cause continuing and irreparable
injury to Wintrust and its Affiliates for which money damages would not be an adequate remedy.
Executive acknowledges that Affiliates are and are intended to be third party beneficiaries of this
Agreement. Executive acknowledges that Wintrust and any Affiliate shall, in addition to any other
rights or remedies they may have, be entitled to injunctive relief for any breach by Executive of
any part of this Agreement. This Agreement shall not in any way limit the remedies in law or equity
otherwise available to Wintrust and its Affiliates.
8.
Term of Agreement
. Unless terminated sooner as provided in Section 9, the
initial term of Executives employment pursuant to this Agreement (Initial Term) shall be until
January 24, 2011. After such Initial Term, this Agreement shall be extended automatically for
successive three-year terms, unless either Executive or Wintrust gives contrary written notice not
less than 60 days in advance of the expiration of the Initial Term or any succeeding term of this
Agreement or unless terminated sooner as provided in Section 9. Notwithstanding the foregoing, if
at any time during the Initial Term or any successive three-year term there is a Change in Control
of Wintrust (as defined in Section 9(f)), then upon the first occurrence of such a Change in
Control, the Initial Term or the successive three-year term of this Agreement (whichever is in
effect as of the date of the Change in Control) shall automatically extend for the greater of
(a) the amount of time remaining on Executives Initial Term of employment
3
if such first occurrence of a Change in Control occurs during the Initial Term or (b) two years
from the date of such first occurrence of a Change in Control. In the event that Executives
Initial Term or successive three-year term is extended due to such a Change in Control, such
extension shall further be extended automatically for successive three-year terms, unless either
Executive or Wintrust gives contrary written notice not less than 60 days in advance of the
expiration of the extension of this Agreement or unless terminated sooner as provided in Section 9.
The Initial Term, together with any extension thereof in accordance with this Section 8, shall be
referred to herein as the Term.
9.
Termination of Employment.
(a)
General Provisions
. Executives employment may be terminated by Wintrust
at any time for any reason, with or without cause, and, except as otherwise provided in this
Section 9, any and all of Wintrusts obligations under this Agreement shall terminate, other than
Wintrusts obligation to pay Executive, within 30 days of Executives termination of employment,
the full amount of any earned but unpaid base salary and accrued but unpaid vacation pay earned by
Executive pursuant to this Agreement through and including the date of termination and to observe
the terms and conditions of any plan or benefit arrangement which, by its terms, survives such
termination of Executives employment. The payments to be made under this Section 9(a) shall be
made to Executive, or in the event of Executives death, to such beneficiary as Executive may
designate in writing to Wintrust for that purpose, or if Executive has not so designated, then to
the spouse of Executive, or if none is surviving, then to the estate of Executive. Notwithstanding
the foregoing, termination of employment shall not affect the obligations of Executive that,
pursuant to the express provisions of this Agreement, continue in effect.
(b)
Termination Due to Death
.
(i)
Payment.
If Executive should die during the Term of this Agreement,
which event shall result in the termination of Executives employment, Wintrust shall pay Executive
an amount equal to
three times (3x)
the sum of (A) Executives base annual salary in effect at the
time of Executives death plus (B) an amount equal to Executives Target Cash Bonus for the year in
which Executives death occurs and Executives Target Stock Bonus for the year in which Executives
death occurs, in a lump sum within 30 days following the date of Executives death. For the
purposes of this Agreement, Target Cash Bonus shall mean the target cash bonus for the applicable
year, as approved in writing by Wintrusts Board of Directors or the Compensation Committee or any
successor committee of Wintrusts Board of Directors. For the purposes of this Agreement, Target
Stock Bonus shall mean the target amount of restricted shares for such year that are included in
Executives annual bonus plan, as approved in writing by Wintrusts Board of Directors or the
Compensation Committee or any successor committee of Wintrusts Board of Directors.
(ii)
Reduction of Payment Due To Life Insurance Benefits.
The amount to
be paid to Executive pursuant to this Section 9(b) shall be reduced by the amount of any life
insurance benefit payments paid or payable to Executive from policies of insurance maintained
and/or paid for by Wintrust; provided that in the event the life insurance benefits exceed the
amount to be paid to Executive pursuant to this Section 9(b), Executive shall remain entitled to
receive the excess life insurance payments. The Executive will cooperate with Wintrust in order to
enable Wintrust to pay for a policy or policies of life insurance on the life of the Executive. To
the extent that the Executive is not insurable or a life insurance policy is not reasonably
obtainable, then the payments due under this Section 9(b) shall be reduced by 50%.
(iii)
Beneficiary.
The payments to be made under this Section 9(b)
shall be made to such beneficiary as Executive may designate in writing to Wintrust for this
purpose, or if Executive has not so designated, then to the spouse of Executive, or if none is
surviving, then to the estate of Executive.
(c)
Termination Due to Permanent Disability
.
(i)
Payment.
If Executive should suffer a permanent disability during
the Term of this Agreement, Wintrust shall have the right to terminate Executives employment. In
such event, Wintrust shall pay Executive an amount equal to
three times (3x)
the sum of
(A) Executives base annual salary in effect at the time of Executives permanent disability plus
(B) an amount equal to Executives Target Cash Bonus for the year in which the Executives
permanent disability occurred and Executives Target Stock Bonus for the year in which Executives
permanent disability occurs. Such amount shall be paid to Executive ratably over a 36-month period
beginning on the first payroll period following such termination and on each payroll period
thereafter during the 36-month period.
4
For the purposes of this Agreement, permanent disability means any mental or physical illness,
disability or incapacity that renders Executive unable to perform Executives duties hereunder
where (x) such permanent disability has been determined to exist by a physician selected by
Wintrust or (y) Wintrust has reasonably determined, based on such physicians advice, that such
disability will continue for 180 days or more within any 365-day period, of which at least 90 days
are consecutive. Executive shall cooperate in all respects with Wintrust if a question arises as to
whether he has become disabled (including, without limitation, submitting to an examination by a
physician or other health care specialist selected by Wintrust and authorizing such physician or
other health care specialist to discuss Executives condition with Wintrust).
(ii)
Reduction of Payment Due To Long Term Disability Insurance
Benefits.
The amount to be paid to Executive pursuant to this Section 9(c) shall be reduced by
the amount of any long-term disability benefit payments paid or payable to Executive during such
payment period from policies of insurance maintained and/or paid for by Wintrust; provided that in
the event the long-term disability benefits exceed the amount to be paid to Executive pursuant to
this Section 9(c), Executive shall remain entitled to receive the excess long-term disability
insurance payments.
(iii)
Continued Participation In Benefit Plans.
In the event of
termination due to a permanent disability, from the termination date through the earlier of (A) the
date on which Executive becomes eligible for coverage under another group health insurance plan
with no pre-existing condition limitation or exclusion or (B) the date on which Executive becomes
entitled to benefits under Medicare, Executive (and any qualified dependents) shall be entitled to
group health insurance coverage. Such coverage shall be provided, at the option of Wintrust,
either: (x) under the Wintrust group health insurance plan for employees (as such plan is then in
effect and as it may be amended at any time and from time to time during the period of coverage) in
which Executive was participating immediately prior to termination, at Wintrusts expense, subject
to any normal employee contributions, if any; or (y) under an individual health insurance policy
having coverage similar to that provided by the Wintrust group health plan for employees (as such
plan is then in effect and as it may be amended at any time and from time to time during the period
of coverage), at Wintrusts expense. Executive shall promptly notify Wintrust if Executive becomes
eligible for coverage under another group health plan with no pre-existing condition limitation or
exclusion or Executive becomes entitled to benefits under Medicare.
(d)
Termination Without Cause
.
(i)
Payment.
In the event Executives employment is terminated without
Cause (as such term is defined in Section 9(h) hereof) by Wintrust during the Term of this
Agreement, other than upon the expiration of the Term of this Agreement, Wintrust shall pay
Severance Pay to Executive in the amount equal to
three times (3x)
the sum of (A) Executives base
annual salary in effect at the time of Executives termination plus (B) an amount equal to
Executives Target Cash Bonus for the year in which such termination occurs and Executives Target
Stock Bonus for the year in which such termination occurs. Severance Pay under this Section 9(d)
shall be paid to the Executive ratably over a 36-month period beginning on the first payroll period
following such termination and on each payroll period thereafter during such Severance Pay period.
(ii)
Company-Paid Health Insurance.
In the event of Executives
termination pursuant to this Section 9(d), from the termination date through the earlier of (A) the
date on which Executive becomes eligible for coverage under another group health insurance plan
with no pre-existing condition limitation or exclusion or (B) the date on which Executive becomes
entitled to benefits under Medicare, Executive (and any qualified dependents) shall be entitled to
group health insurance coverage. Such coverage shall be provided, at the option of Wintrust,
either: (x) under the Wintrust group health insurance plan for employees (as such plan is then in
effect and as it may be amended at any time and from time to time during the period of coverage) in
which Executive was participating immediately prior to termination, at Wintrusts expense, subject
to any normal employee contributions, if any; or (y) under an individual health insurance policy
having coverage similar to that provided by the Wintrust group health plan for employees (as such
plan is then in effect and as it may be amended at any time and from time to time during the period
of coverage), at Wintrusts expense. Executive shall promptly notify Wintrust if Executive
5
becomes eligible for coverage under another group health plan with no pre-existing condition
limitation or exclusion or Executive becomes entitled to benefits under Medicare.
(e)
Constructive Termination
.
(i)
Payment.
If Executive suffers a Constructive Termination during the
Term of this Agreement, other than upon the expiration of the Term of this Agreement, Wintrust
shall pay Severance Pay to Executive in the amounts and at the times described in Section 9(d)
hereof. For the purposes of this Agreement, Constructive Termination means (A) the assignment to
Executive of any duties substantively inconsistent with Executives position (including status,
offices, titles and reporting requirements), authority, duties or responsibilities as contemplated
by Section 1, or any other diminution in such position, authority, duties or responsibilities
(including, without limitation, any diminution occurring solely as a result of Wintrust ceasing to
be a publicly traded entity or becoming a wholly owned subsidiary of another entity) or a material
reduction by Wintrust in the duties and responsibilities of Executive or (B) a reduction by
Wintrust of Executives Adjusted Total Compensation (as hereinafter defined), to (1) less than
seventy-five percent (75%) of the Adjusted Total Compensation of Executive for the twelve-month
period ending as of the last day of the month immediately preceding the month in which the
Constructive Termination occurs; or (2) less than seventy-five percent (75%) of the Executives
Adjusted Total Compensation for the twelve-month period ending as of the last day of the month
preceding the Effective Date, whichever is greater;
provided
,
however
, that the
occurrence of any such condition shall not constitute Constructive Termination unless Executive
provides notice to Wintrust of the existence of such condition not later than 90 days after the
initial existence of such condition, and Wintrust shall have failed to remedy such condition within
30 days after receipt of such notice. A Constructive Termination does not include termination for
Cause as defined in Section 9(h), termination without Cause as defined in Section 9(d), or
termination due to a permanent disability as defined in Section 9(c).
(ii)
Company-Paid Health Insurance.
In the event of Executives
Constructive Termination pursuant to this Section 9(e), from the termination date through the
earlier of (A) the date on which Executive becomes eligible for coverage under another group health
insurance plan with no pre-existing condition limitation or exclusion, or (B) the date on which
Executive becomes entitled to benefits under Medicare, Executive (and any qualified dependents)
shall be entitled to group health insurance coverage. Such coverage shall be provided, at the
option of Wintrust, either: (x) under the Wintrust group health insurance plan for employees (as
such plan is then in effect and as it may be amended at any time and from time to time during the
period of coverage) in which Executive was participating immediately prior to termination, at
Wintrusts expense, subject to any normal employee contributions, if any; or (y) under an
individual health insurance policy having coverage similar to that provided by the Wintrust group
health plan for employees (as such plan is then in effect and as it may be amended at any time and
from time to time during the period of coverage), at Wintrusts expense. Executive shall promptly
notify Wintrust if Executive becomes eligible for coverage under another group health plan with no
pre-existing condition limitation or exclusion or Executive becomes entitled to benefits under
Medicare.
(iii)
Definitions.
(A) For the purposes of this Agreement, Adjusted Total Compensation
means the aggregate base salary earned by the Executive plus the dollar value of all perquisites
(i.e. Wintrust provided car, club dues and supplemental life insurance) as estimated by Wintrust in
respect of the Executive for the relevant twelve month period. Adjusted Total Compensation shall
exclude any Cash Bonus, Stock Bonus, or other bonus payments paid or earned by the Executive.
(B) For the purposes of this Section 9(e), the Executive will not be
deemed to have incurred a reduction by Wintrust of Executives Adjusted Total Compensation if there
is a general reduction in base salaries and/or perquisites applicable to the President, Chief
Executive Officer and all Executive and Senior Vice Presidents of Wintrust.
(f)
Termination Upon Change In Control
.
(i)
Payment.
In the event that within eighteen months after a Change in
Control of Wintrust (as defined below) (A) Executives employment is terminated without Cause (as
such term is defined in Section 9(h) hereof)
6
prior to the expiration of the Term of this Agreement, or (B) Executive suffers a Constructive
Termination prior to the expiration of the Term of this Agreement, Wintrust (or the successor
thereto) shall pay Severance Pay to Executive in the amount that is equivalent to the amount
described in Section 9(d) hereof in a lump sum within thirty (30) days following the date of
Executives termination or Constructive Termination;
provided
,
however
, that if
such Change in Control is not a change in control event, within the meaning of Section 409A of
the Internal Revenue Code of 1986, as amended (the Code), then such Severance Pay shall be paid
ratably over a 36-month period beginning on the first payroll period following such termination and
on each payroll period thereafter during such Severance Pay period.
(ii)
Change In Control.
For the purposes of this Agreement, a Change
in Control shall have the same meaning as provided in Section 12(b) of the Wintrust 2007 Stock
Incentive Plan.
(iii)
Gross-Up Payment.
If it is determined that any amount, right or
benefit paid or payable (or otherwise provided or to be provided) to the Executive by Wintrust or
any of its affiliates under this Agreement or any other plan, program or arrangement under which
Executive participates or is a party, other than amounts payable under this Section 9(f)(iii)
(collectively, the Payments), would constitute an excess parachute payment within the meaning
of Section 280G of the Internal Revenue Code, subject to the excise tax imposed by Section 4999 of
the Code, or any interest or penalties with respect to such excise tax (such excise tax, together
with any such interest and penalties, are collectively referred to as the Excise Tax), then
Executive shall be entitled to receive an additional cash payment (a Gross-Up Payment) within
30 days of such determination equal to an amount such that after payment by Executive of all taxes
(including any interest or penalties imposed with respect to such taxes), including any Excise Tax,
imposed upon the Gross-Up Payment, Executive would retain an amount of the Gross-Up Payment equal
to the Excise Tax imposed upon the total Payments. All determinations required to be made under
this Section 9(f)(iii), including whether and when a Gross-Up Payment is required, the amount of
such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall
be made by Wintrusts independent auditor. The auditor shall promptly provide detailed supporting
calculations to both Wintrust and Executive following any determination that a Gross-Up Payment is
necessary. All fees and expenses of the auditor shall be paid by Wintrust. If no determination by
Wintrusts auditors is made prior to the time a tax return reflecting the total Payments is
required to be filed by Executive, Executive will be entitled to receive a Gross-Up Payment
calculated on the basis of the total Payments reported by Executive in such tax return, within 30
days of the filing of such tax return. All determinations made by such auditor shall be binding
upon Wintrust and Executive. In all events, if any tax authority determines that a greater Excise
Tax should be imposed upon the total Payments than is determined by Wintrusts independent auditors
or reflected in Executives tax return pursuant to this Section, Executive shall be entitled to
receive the full Gross-Up Payment calculated on the basis of the amount of Excise Tax determined to
be payable by such tax authority from Wintrust within 30 days of such determination. In the event
that any tax authority determines that a lesser Excise Tax should be imposed on the total Payments
than is determined by Wintrusts independent auditors or reflected in Executives tax return
pursuant to this Section, and Wintrust paid a Gross-Up Payment to the Executive in excess of the
amount of the Gross-Up Payment to which he is actually entitled hereunder, then such excess shall
be reimbursed by the Executive to Wintrust within 30 days of such determination.
(iv)
Company-Paid Health Insurance.
In the event Executive becomes
entitled to payments under this Section 9(f), from the termination date through the earlier of
(A) the date on which Executive becomes eligible for coverage under another group health insurance
plan with no pre-existing condition limitation or exclusion, or (B) the date on which Executive
becomes entitled to benefits under Medicare, Executive (and any qualified dependents) shall be
entitled to group health insurance coverage. Such coverage shall be provided, at the option of
Wintrust, either: (x) under the Wintrust group health insurance plan for employees (as such plan is
then in effect and as it may be amended at any time and from time to time during the period of
coverage) in which Executive was participating immediately prior to termination, at Wintrusts
expense, subject to any normal employee contributions, if any; or (y) under an individual health
insurance policy having coverage similar to that provided by the Wintrust group health plan for
employees (as such plan is then in effect and as it may be amended at any time and from time to
time during the period of coverage), at Wintrusts expense. Executive shall promptly notify
Wintrust if, prior to the expiration of the maximum period of COBRA coverage, Executive becomes
eligible for coverage under another group health plan with no pre-existing condition limitation or
exclusion or Executive becomes entitled to benefits under Medicare.
7
(v)
Definitions.
For the purposes of this Section 9(f), the term
Constructive Termination shall have the same meaning as such term is defined in Section 9(e) with
the following modifications:
(A) A Constructive Termination shall be deemed to have occurred if after a
Change in Control, the Executives Adjusted Total Compensation is reduced to less than (1) 100% of
the Adjusted Total Compensation of Executive for the twelve-month period ending as of the last day
of the month immediately preceding the month in which the Constructive Termination occurs or
(2) 100% percent of the Executives Adjusted Total Compensation for the twelve-month period ending
as of the last day of the month preceding the Effective Date, whichever is greater.
(B) A Constructive Termination shall also be deemed to have occurred if
after a Change in Control, Wintrust (or the successor thereto) delivers written notice to Executive
that it will continue to employ Executive but will reject this Agreement (other than due to the
expiration of the Term of this Agreement).
(C) Subsection 9(e)(iii)(B) shall not be applicable to a Constructive
Termination following a Change in Control.
(g)
Voluntary Termination
. Executive may voluntarily terminate employment
during the Term of this Agreement by a delivery to Wintrust of a written notice at least 60 days in
advance of the termination date. If Executive voluntarily terminates employment prior to the
expiration of the Term of this Agreement, any and all of Wintrusts obligations under this
Agreement shall terminate immediately except for Wintrusts obligations contained in Section 9(a)
hereof. Notwithstanding the foregoing, termination of employment shall not affect the obligations
of Executive that, pursuant to the express provisions of this Agreement, continue in effect.
(h)
Termination For Cause
. If Executive is terminated for Cause as
determined by the written resolution of Wintrusts Board of Directors or the Compensation Committee
or any successor committee of the Wintrust Board of Directors, all obligations of Wintrust shall
terminate immediately except for Wintrusts obligations described in Section 9(a) hereof.
Notwithstanding the foregoing, termination of employment shall not affect the obligations of
Executive that, pursuant to the express provisions of this Agreement, continue in effect. For
purposes of this Agreement, termination for Cause means:
(i) Executives failure or refusal, after written notice thereof and after
reasonable opportunity to cure, to perform specific directives approved by a majority of the
Wintrust Board of Directors which are consistent with the scope and nature of Executives duties
and responsibilities as provided in Section 1 of this Agreement;
(ii) Habitual drunkenness or illegal use of drugs which interferes with the
performance of Executives duties and obligations under this Agreement;
(iii) Executives conviction of a felony;
(iv) Any defalcation or acts of gross or willful misconduct of Executive
resulting in or potentially resulting in economic loss to Wintrust or substantial damage to
Wintrusts reputation;
(v) Any breach of Executives covenants contained in Sections 4 through 6
hereof;
(vi) A written order requiring the termination of Executive from Executives
position with Wintrust or any Affiliate for which Executive is also providing services by any
regulatory agency or body; or
(vii) Executives engagement, during the performance of Executives duties
hereunder, in acts or omissions constituting fraud, intentional breach of fiduciary obligation,
intentional wrongdoing or malfeasance, or intentional and material violation of applicable banking
laws, rules, or regulations.
(i) Executives right to receive Severance Pay per Sections 9(c) through 9(f) hereof
is contingent upon
(i) Executive having executed and delivered to Wintrust a release in such form as provided by
Wintrust and
(ii) Executive not violating any of Executives on-going obligations under this Agreement.
8
(j) The payment of Severance Pay to Executive pursuant to Sections 9(c) through 9(f)
hereof shall be liquidated damages for and in full satisfaction of any and all claims Executive may
have relating to or arising out of Executives employment and termination of employment by
Wintrust, any and all claims Executive may have relating to or arising out of this Agreement and
the termination thereof and any and all claims Executive may have arising under any statute,
ordinance or regulation or under common law. Executive expressly acknowledges and agrees that,
except for whatever claim Executive may have to Severance Pay, Executive shall not have any claim
for damages or other relief of any sort relating to or arising out of Executives employment or
termination of employment by Wintrust or relating to or arising out of this Agreement and the
termination thereof.
(k) Upon termination of employment with Wintrust for any reason, Executive shall
promptly deliver to Wintrust all writings, records, data, memoranda, contracts, orders, sales
literature, price lists, client lists, data processing materials, and other documents, whether or
not obtained from Wintrust or any Affiliate, which pertain to or were used by Executive in
connection with Executives employment by Wintrust or which pertain to any Affiliate, including,
but not limited to, Confidential Information, as well as any automobiles, computers or other
equipment which were purchased or leased by Wintrust for Executive.
10.
Resolution of Disputes
. Except as otherwise provided herein, any disputes
arising under or in connection with this Agreement or in any way arising out of, relating to or
associated with the Executives employment with Wintrust or the termination of such employment
(Claims), that Executive may have against Wintrust or against its Affiliates, officers,
directors, employees or agents in their capacity as such or otherwise, or that Wintrust may have
against Executive, shall be resolved by binding arbitration, to be held in Chicago, Illinois, in
accordance with the rules and procedures of the National Rules for the Resolution of Employment
Disputes of the American Arbitration Association (the AAA) and the parties hereby agree to
expedite such arbitration proceedings to the extent permitted by the AAA. Judgment upon the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. The Claims
covered by this Agreement include, but are not limited to: claims for wages or other compensation
due; claims for breach of any contract or covenant, express or implied; tort claims; claims for
discrimination, including but not limited to discrimination based on race, sex, sexual orientation,
religion, national origin, age, marital status, handicap, disability or medical condition or
harassment on any of the foregoing bases; claims for benefits, except as excluded in the following
paragraph; and claims for violation of any federal, state or other governmental constitution,
statute, ordinance, regulation, or public policy. The Claims covered by this Agreement do not
include claims for workers compensation benefits or compensation; claims for unemployment
compensation benefits; claims based upon an employee pension or benefit plan, the terms of which
contain an arbitration or other non-judicial resolution procedure, in which case the provisions of
such plan shall apply; and claims made by either Wintrust or the Executive for injunctive and/or
other equitable relief regarding the covenants set forth in Sections 3, 4, 5 and 6 of this
Agreement. Each party shall initially bear their own costs of the arbitration or litigation, except
that, if Wintrust is found to have violated any material terms of this Agreement, Wintrust shall
reimburse Executive for the entire amount of reasonable attorneys fees incurred by Executive as a
result of the dispute hereunder in addition to the payment of any damages awarded to Executive.
11.
General Provisions
.
(a) All provisions of this Agreement are intended to be interpreted and construed in
a manner to make such provisions valid, legal, and enforceable. To the extent that any Section of
this Agreement or any word, phrase, clause, or sentence hereof shall be deemed by any court to be
illegal or unenforceable, such word, clause, phrase, sentence, or Section shall be deemed modified,
restricted, or omitted to the extent necessary to make this Agreement enforceable. Without limiting
the generality of the foregoing, if the scope of any covenant in this Agreement is too broad to
permit enforcement to its full extent, such covenant shall be enforced to the maximum extent
provided by law; and Executive agrees that such scope may be judicially modified accordingly.
(b) This Agreement may be assigned by Wintrust. This Agreement and the covenants set
forth herein shall inure to the benefit of and shall be binding upon the successors and assigns of
Wintrust.
(c) This Agreement may not be assigned by Executive, but shall be binding upon
Executives executors, administrators, heirs, and legal representatives.
9
(d) No waiver by either party of any breach by the other party of any of the
obligations, covenants, or representations under this Agreement shall constitute a waiver of any
prior or subsequent breach.
(e) Where in this Agreement the masculine gender is used, it shall include the
feminine if the sense so requires.
(f) Wintrust may withhold from any payment that it is required to make under this
Agreement amounts sufficient to satisfy applicable withholding requirements under any federal,
state, or local law.
(g) This instrument constitutes the entire agreement of the parties with respect to
its subject matter. This Agreement may not be changed or amended orally but only by an agreement in
writing, signed by the party against whom enforcement of any waiver, change, modification,
extension, or discharge is sought. Any other understandings and agreements, oral or written,
respecting the subject matter hereof are hereby superseded and canceled.
(
h) The provisions of Sections 4, 5, 6, 7, 9(i), 9(j), 10, 11, and 12 of this
Agreement shall survive the termination of Executives employment with Wintrust and the expiration
or termination of this Agreement.
12.
Governing Law
. The parties agree that this Agreement shall be construed and
governed by the laws of the State of Illinois, excepting its conflict of laws principles. Further,
the parties acknowledge and specifically agree to the jurisdiction of the courts of the State of
Illinois in the event of any dispute regarding Sections 3, 4, 5, or 6 of this Agreement.
13.
Section 409A
. This Agreement shall be interpreted and construed in a manner
that avoids the imposition of additional taxes and penalties under Section 409A of the Code (409A
Penalties). In the event the terms of this Agreement would subject Executive to 409A Penalties,
Wintrust and Executive shall cooperate diligently to amend the terms of the Agreement to avoid such
409A Penalties, to the extent possible. The payments to Executive pursuant to Section 9 of this
Agreement are intended to be exempt from Section 409A of the Code to the maximum extent possible,
under either the separation pay exemption pursuant to Treasury regulation §1.409A-1(b)(9)(iii) or
as a short-term deferral pursuant to Treasury regulation §1.409A-1(b)(4), and for purposes of the
separation pay exemption, each installment paid to Executive under Section 9 shall be considered a
separate payment. Notwithstanding any other provision in this Agreement, if on the date of
Executives separation from service, within the meaning of Section 409A of the Code (the
Separation Date), (i) Wintrust is a publicly traded corporation and (ii) Executive is a
specified employee, as defined in Section 409A of the Code, then to the extent any amount payable
under this Agreement constitutes the payment of nonqualified deferred compensation, within the
meaning of Section 409A of the Code, that under the terms of this Agreement would be payable prior
to the six-month anniversary of the Separation Date, such payment shall be delayed until the
earlier to occur of (A) the six- month anniversary of the Separation Date or (B) the date of
Executives death. For purposes of determining the timing of payments to Executive pursuant to
Section 9, all references to Executives termination of employment shall mean the Separation Date.
14.
Notice of Termination
. Subject to the provisions of Section 8, in the event
that Wintrust desires to terminate the employment of the Executive during the Term of this
Agreement, Wintrust shall deliver to Executive a written notice of termination, stating whether the
termination constitutes a termination in accordance with Section 9(c), 9(d), 9(e), 9(f), or 9(h).
In the event that Executive determines in good faith that Executive has experienced a Constructive
Termination, Executive shall deliver to Wintrust a written notice stating the circumstances that
constitute such Constructive Termination. In the event that the Executive desires to effect a
voluntary termination of Executives employment in accordance with Section 9(g), Executive shall
deliver a written notice of such voluntary termination to Wintrust.
10
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date
written opposite their signatures.
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WINTRUST FINANCIAL CORPORATION
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EDWARD J. WEHMER
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By:
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/s/ David A. Dykstra
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/s/ Edward J. Wehmer
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Its: Senior EVP and Chief Operating Officer
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Dated: December 19, 2008
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Dated: December 19, 2008
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11
EXHIBIT A
Advantage National Bank
Barrington Bank & Trust Company, N.A.
Beverly Bank & Trust Company, N.A.
Crystal Lake Bank & Trust Company, N.A.
First Insurance Funding Corporation
Hinsdale Bank & Trust Company
Lake Forest Bank & Trust Company
Libertyville Bank & Trust Company
North Shore Community Bank & Trust Company
Northbrook Bank & Trust Company
Old Plank Trail Community Bank, N.A.
St. Charles Bank & Trust Company
State Bank of the Lakes
Town Bank (Wisconsin)
Tricom, Inc. of Milwaukee
Village Bank & Trust
Wayne Hummer Asset Management Company
Wayne Hummer Investments, LLC
Wayne Hummer Trust Company, N.A.
Wheaton Bank & Trust Company
Wintrust Information Technology Services Company
Wintrust Mortgage Corporation
12
Exhibit 10.5
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (the Agreement) is made by and between
WINTRUST FINANCIAL CORPORATION (Wintrust), a bank holding company, and David A. Dykstra, an
individual resident in the State of Illinois (Executive) as of December 19, 2008.
WITNESSETH THAT:
WHEREAS, Wintrust is a bank holding company;
WHEREAS, Executive has particular expertise and knowledge concerning the business of
Wintrust and its operations and is a valued member of Wintrusts senior management;
WHEREAS, by virtue of Executives employment with Wintrust, Executive will become
acquainted with certain confidential information regarding the services, customers, methods of
doing business, strategic plans, marketing, and other aspects of the business of Wintrust or its
Affiliates; and
WHEREAS, Wintrust and Executive desire to set forth in this Agreement the terms,
conditions and obligations of the parties with respect to such employment effective as of the date
first written above (the Effective Date) and this Agreement is intended by the parties to
supersede all previous agreements and understanding, whether written or oral, concerning such
employment.
NOW THEREFORE, in consideration of the covenants and agreements contained herein, of
Executives employment, of the compensation to be paid by Wintrust for Executives services, and of
Wintrusts other undertakings in this Agreement, the parties hereto do hereby agree as follows:
1.
Scope of Employment
. Executive will be employed as Senior Executive Vice
President and Chief Operating Officer of Wintrust and shall perform such duties as may be assigned
to Executive by the Chief Executive Officer and/or the Board of Directors of Wintrust in such
position. Executive agrees that during Executives employment Executive will be subject to and
abide by the written policies and practices of Wintrust. Subject to Sections 9(e) and 9(f)
Executive also agrees to assume such new or additional positions and responsibilities as Executive
may from time to time be assigned for or on behalf of Wintrust or any Affiliate of Wintrust.
Notwithstanding the foregoing, during the Term (as defined in Section 8 herein) of this Agreement,
Executive will not be required without Executives consent to move Executives principal business
location to another location more than a 35 mile radius from Executives principal business
location. For purposes of this Agreement, the term Affiliate shall include but not be limited to
the entities listed in Exhibit A to this Agreement and any subsidiary of any of such entities and
shall further include any present or future affiliate of any of them as defined by the rules and
regulations of the Federal Reserve Board. In the event Executive shall perform services for any
Affiliate in addition to serving as Senior Executive Vice President and Chief Operating Officer of
Wintrust, the provisions of this Agreement shall also apply to the performance of such services by
Executive on behalf of the Affiliate.
2.
Compensation and Benefits
. Executive will be paid such base salary as may from
time to time be agreed upon between Executive and Wintrust. Executive will be entitled to coverage
under such compensation plans, insurance plans and other fringe benefit plans and programs as may
from time to time be established for employees of Wintrust in accordance with the terms and
conditions of such plans and programs. Executive shall also be eligible to participate in the
Wintrust 2007 Stock Incentive Plan or any successor Plan thereto.
3.
Extent of Service
. Executive shall devote Executives entire time, attention
and energies to the business of Wintrust during the Term of this Agreement; but this shall not be
construed as preventing Executive from: (a) investing Executives personal assets in such form or
manner as will not require any services on the part of Executive in the operation or the affairs of
the corporations, partnerships and other entities in which such investments are made and in which
Executives participation is solely that of an investor (subject to any and all rules and
regulations of applicable banking regulators or policies of Wintrust governing transactions with
affiliates and ownership interests in customers); (b) engaging (whether or not during normal
business hours) in any other
professional, civic or philanthropic activities provided that Executives engagement does not
result in a violation of Executives covenants under this Section or Sections 4 and 5 hereof; or
(c) accepting appointments to the boards of directors of other companies provided that the Board of
Directors of Wintrust approves of such appointments and Executives performance of Executives
duties on such boards does not result in a violation of Executives covenants under this Section or
Sections 4 or 5 hereof.
4.
Competition
. Other than in connection with Executives performance of
Executives duties hereunder, during the period in which Executive performs services for Wintrust
and for a period of
three years
after termination of Executives employment with Wintrust,
regardless of the reason, Executive shall not directly or indirectly, either alone or in
conjunction with any other person, firm, association, company or corporation:
(a) serve as a principal, owner, senior manager, or in a position comparable to that
held by Executive at any time during Executives employment with Wintrust, for a bank or other
financial institution (or any branch or affiliate thereof) which offers to its customers any of the
services provided by Wintrust or its Affiliates and which operates in the Market Area of Wintrust
or any Affiliate;
(b) solicit or conduct business which involves any of the services provided by
Wintrust or its Affiliates from or with any person, corporation or other entity which was (i) a
customer of Wintrust or any Affiliate with whom Executive had direct or indirect contact while
employed by Wintrust or about whom Executive obtained Confidential Information during the fifteen
months prior to the termination of Executives employment with Wintrust, or (ii) a potential
customer with whom Wintrust or any Affiliate has, at the time of Executives termination of
employment with Wintrust, an outstanding oral or written proposal to provide any of the services
provided by Wintrust or its Affiliates and with whom Executive had direct or indirect contact while
employed by Wintrust;
(c) request, advise or directly or indirectly invite any of the existing customers,
suppliers or service providers of Wintrust or any Affiliate to withdraw, curtail or cancel its
business with Wintrust or any Affiliate (other than through mass mailings or general advertisements
not specifically directed at customers of Wintrust or any Affiliate);
(d) hire, solicit, induce or attempt to solicit or induce any employee, consultant,
or agent of Wintrust or any Affiliate (i) to terminate his employment or association with Wintrust
or any Affiliate or (ii) to become employed by or to serve in any capacity by a bank or other
financial institution which operates or is planned to operate in the Market Area of Wintrust or of
any Affiliate; or
(e) in any way participate in planning or opening a bank or other financial
institution which operates or is intended to operate in the Market Area of Wintrust or of any
Affiliate.
For the purposes of this Agreement, the Market Area of Wintrust or of an Affiliate shall
be the area within a ten (10) mile radius of the principal office and branches of Wintrust or of
any Affiliate.
Notwithstanding the foregoing, Executive shall not be prevented from: (i) investing or
owning shares of stock of any corporation engaged in any business provided that such shares are
regularly traded on a national securities exchange or in any over-the-counter market;
(ii) retaining any shares of stock in any corporation which Executive owned prior to the date of
Executives employment with Wintrust (subject to any and all rules and regulations of applicable
banking regulators or policies of Wintrust governing transactions with affiliates and ownership
interests in customers); or (iii) investing as a limited partner (without decision-making
authority) in any private equity fund, provided that Executives involvement in such investment is
solely that of a passive investor (subject to any and all rules and regulations of applicable
banking regulators or policies of the Employer governing transactions with affiliates and ownership
interests in customers).
5.
Confidential Information
. Executive acknowledges that, during Executives
employment with Wintrust, Executive has and will obtain access to Confidential Information of and
for Wintrust or its Affiliates. For purposes of this Agreement, Confidential Information shall
mean information not generally known or available without restriction to the trade or industry,
including, without limitation, the following categories of information and documentation: (a)
documentation and information relating to lending customers of Wintrust or any Affiliate,
including, but not limited to, lists of lending clients with their addresses and account numbers,
credit analysis reports
2
and other credit files, outstanding loan amounts, repayment dates and instructions, information
regarding the use of the loan proceeds, and loan maturity and renewal dates; (b) documentation and
information relating to depositors of Wintrust or any Affiliate, including, but not limited to,
lists of depositors with their addresses and account numbers, amounts held on deposit, types of
depository products used and the number of accounts per customer; (c) documentation and information
relating to trust customers of Wintrust or any Affiliate, including, but not limited to, lists of
trust customers with their addresses and account numbers, trust investment management contracts,
identity of investment managers, trust corpus amounts, and grantor and beneficiary information; (d)
documentation and information relating to investment management clients of Wintrust or any
Affiliate, including, but not limited to, lists of investors with their addresses, account numbers
and beneficiary information, investment management contracts, amount of assets held for management,
and the nature of the investment products used; (e) the identity of actual or potential customers
of Wintrust or any Affiliate, including lists of the same; (f) the identity of suppliers and
service providers of Wintrust or any Affiliate, including lists of the same and the material terms
of any supply or service contracts; (g) marketing materials and information regarding the products
and services offered by Wintrust or any Affiliate and the nature and scope of use of such marketing
materials and product information; (h) policy and procedure manuals and other materials used by
Wintrust or any Affiliate in the training and development of its employees; (i) identity and
contents of all computer systems, programs and software utilized by Wintrust or any Affiliate to
conduct its operations and manuals or other instructions for their use; (j) minutes or other
summaries of Board of Directors or other department or committee meetings held by Wintrust or any
Affiliate; (k) the business and strategic growth plans of Wintrust or any Affiliate; and (l)
confidential communication materials provided for shareholders of Wintrust or of any Affiliate.
Absent prior authorization by Wintrust or as required in Executives duties for Wintrust, Executive
will not at any time, directly or indirectly, use, permit the use of, disclose or permit the
disclosure to any third party of any such Confidential Information to which Executive will be
provided access. These obligations apply both during Executives employment with Wintrust and shall
continue beyond the termination of Executives employment and this Agreement.
6.
Inventions
. All discoveries, designs, improvements, ideas, and inventions,
whether patentable or not, relating to (or suggested by or resulting from) products, services, or
other technology of Wintrust or any Affiliate or relating to (or suggested by or resulting from)
methods or processes used or usable in connection with the business of Wintrust or any Affiliate
that may be conceived, developed, or made by Executive during employment with Wintrust (hereinafter
Inventions), either solely or jointly with others, shall automatically become the sole property
of Wintrust or an Affiliate. Executive shall immediately disclose to Wintrust all such Inventions
and shall, without additional compensation, execute all assignments and other documents deemed
necessary to perfect the property rights of Wintrust or any Affiliate therein. These obligations
shall continue beyond the termination of Executives employment with respect to Inventions
conceived, developed, or made by Executive during employment with Wintrust. The provisions of this
Section 6 shall not apply to any Invention for which no equipment, supplies, facility, or trade
secret information of Wintrust or any Affiliate is used by Executive and which is developed
entirely on Executives own time, unless (a) such Invention relates (i) to the business of Wintrust
or an Affiliate or (ii) to the actual or demonstrably anticipated research or development of
Wintrust or an Affiliate, or (b) such Invention results from work performed by Executive for
Wintrust.
7.
Remedies
. Executive acknowledges that the compliance with the terms of this
Agreement is necessary to protect the Confidential Information and goodwill of Wintrust and its
Affiliates and that any breach by Executive of this Agreement will cause continuing and irreparable
injury to Wintrust and its Affiliates for which money damages would not be an adequate remedy.
Executive acknowledges that Affiliates are and are intended to be third party beneficiaries of this
Agreement. Executive acknowledges that Wintrust and any Affiliate shall, in addition to any other
rights or remedies they may have, be entitled to injunctive relief for any breach by Executive of
any part of this Agreement. This Agreement shall not in any way limit the remedies in law or equity
otherwise available to Wintrust and its Affiliates.
8.
Term of Agreement
. Unless terminated sooner as provided in Section 9, the
initial term of Executives employment pursuant to this Agreement (Initial Term) shall be until
January 24, 2011. After such Initial Term, this Agreement shall be extended automatically for
successive three-year terms, unless either Executive or Wintrust gives contrary written notice not
less than 60 days in advance of the expiration of the Initial Term or any succeeding term of this
Agreement or unless terminated sooner as provided in Section 9. Notwithstanding the foregoing, if
at any time during the Initial Term or any successive three-year term there is a Change in Control
of Wintrust (as defined in Section 9(f)), then upon the first occurrence of such a Change in
Control, the Initial Term or the
3
successive three-year term of this Agreement (whichever is in effect as of the date of the Change
in Control) shall automatically extend for the greater of (a) the amount of time remaining on
Executives Initial Term of employment if such first occurrence of a Change in Control occurs
during the Initial Term or (b) two years from the date of such first occurrence of a Change in
Control. In the event that Executives Initial Term or successive three-year term is extended due
to such a Change in Control, such extension shall further be extended automatically for successive
three-year terms, unless either Executive or Wintrust gives contrary written notice not less than
60 days in advance of the expiration of the extension of this Agreement or unless terminated sooner
as provided in Section 9. The Initial Term, together with any extension thereof in accordance with
this Section 8, shall be referred to herein as the Term.
9.
Termination of Employment.
(a)
General Provisions
. Executives employment may be terminated by Wintrust
at any time for any reason, with or without cause, and, except as otherwise provided in this
Section 9, any and all of Wintrusts obligations under this Agreement shall terminate, other than
Wintrusts obligation to pay Executive, within 30 days of Executives termination of employment,
the full amount of any earned but unpaid base salary and accrued but unpaid vacation pay earned by
Executive pursuant to this Agreement through and including the date of termination and to observe
the terms and conditions of any plan or benefit arrangement which, by its terms, survives such
termination of Executives employment. The payments to be made under this Section 9(a) shall be
made to Executive, or in the event of Executives death, to such beneficiary as Executive may
designate in writing to Wintrust for that purpose, or if Executive has not so designated, then to
the spouse of Executive, or if none is surviving, then to the estate of Executive. Notwithstanding
the foregoing, termination of employment shall not affect the obligations of Executive that,
pursuant to the express provisions of this Agreement, continue in effect.
(b)
Termination Due to Death
.
(i)
Payment.
If Executive should die during the Term of this Agreement,
which event shall result in the termination of Executives employment, Wintrust shall pay Executive
an amount equal to
three times (3x)
the sum of (A) Executives base annual salary in effect at the
time of Executives death plus (B) an amount equal to Executives Target Cash Bonus for the year in
which Executives death occurs and Executives Target Stock Bonus or the year in which Executives
death occurs, in a lump sum within 30 days following the date of Executives death. For the
purposes of this Agreement, Target Cash Bonus shall mean the target cash bonus for the applicable
year, as approved in writing by Wintrusts Board of Directors or the Compensation Committee or any
successor committee of Wintrusts Board of Directors. For the purposes of this Agreement, Target
Stock Bonus shall mean the target amount of restricted shares for such year that are included in
Executives annual bonus plan, as approved in writing by Wintrusts Board of Directors or the
Compensation Committee or any successor committee of Wintrusts Board of Directors.
(ii)
Reduction of Payment Due To Life Insurance Benefits.
The amount to
be paid to Executive pursuant to this Section 9(b) shall be reduced by the amount of any life
insurance benefit payments paid or payable to Executive from policies of insurance maintained
and/or paid for by Wintrust; provided that in the event the life insurance benefits exceed the
amount to be paid to Executive pursuant to this Section 9(b), Executive shall remain entitled to
receive the excess life insurance payments. The Executive will cooperate with Wintrust in order to
enable Wintrust to pay for a policy or policies of life insurance on the life of the Executive. To
the extent that the Executive is not insurable or a life insurance policy is not reasonably
obtainable, then the payments due under this Section 9(b) shall be reduced by 50%.
(iii)
Beneficiary.
The payments to be made under this Section 9(b)
shall be made to such beneficiary as Executive may designate in writing to Wintrust for this
purpose, or if Executive has not so designated, then to the spouse of Executive, or if none is
surviving, then to the estate of Executive.
(c)
Termination Due to Permanent Disability
.
(i)
Payment.
If Executive should suffer a permanent disability during
the Term of this Agreement, Wintrust shall have the right to terminate Executives employment. In
such event, Wintrust shall pay Executive an amount equal to
three times (3x)
the sum of
(A) Executives base annual salary in effect at the time of Executives permanent disability plus
(B) an amount equal to Executives Target Cash Bonus for the year in which Executives
4
permanent disability occurs and Executives Target Stock Bonus for the year in which Executives
permanent disability occurs. Such amount shall be paid to Executive ratably over a 36-month period
beginning on the first payroll period following such termination and on each payroll period
thereafter during the 36-month period. For the purposes of this Agreement, permanent disability
means any mental or physical illness, disability or incapacity that renders Executive unable to
perform Executives duties hereunder where (x) such permanent disability has been determined to
exist by a physician selected by Wintrust or (y) Wintrust has reasonably determined, based on such
physicians advice, that such disability will continue for 180 days or more within any 365-day
period, of which at least 90 days are consecutive. Executive shall cooperate in all respects with
Wintrust if a question arises as to whether he has become disabled (including, without limitation,
submitting to an examination by a physician or other health care specialist selected by Wintrust
and authorizing such physician or other health care specialist to discuss Executives condition
with Wintrust).
(ii)
Reduction of Payment Due To Long Term Disability Insurance
Benefits.
The amount to be paid to Executive pursuant to this Section 9(c) shall be reduced by
the amount of any long-term disability benefit payments paid or payable to Executive during such
payment period from policies of insurance maintained and/or paid for by Wintrust; provided that in
the event the long-term disability benefits exceed the amount to be paid to Executive pursuant to
this Section 9(c), Executive shall remain entitled to receive the excess long-term disability
insurance payments.
(iii)
Continued Participation In Benefit Plans.
In the event of
termination due to a permanent disability, from the termination date through the earlier of (A) the
date on which Executive becomes eligible for coverage under another group health insurance plan
with no pre-existing condition limitation or exclusion or (B) the date on which Executive becomes
entitled to benefits under Medicare, Executive (and any qualified dependents) shall be entitled to
group health insurance coverage. Such coverage shall be provided, at the option of Wintrust,
either: (x) under the Wintrust group health insurance plan for employees (as such plan is then in
effect and as it may be amended at any time and from time to time during the period of coverage) in
which Executive was participating immediately prior to termination, at Wintrusts expense, subject
to any normal employee contributions, if any; or (y) under an individual health insurance policy
having coverage similar to that provided by the Wintrust group health plan for employees (as such
plan is then in effect and as it may be amended at any time and from time to time during the period
of coverage), at Wintrusts expense. Executive shall promptly notify Wintrust if Executive becomes
eligible for coverage under another group health plan with no pre-existing condition limitation or
exclusion or Executive becomes entitled to benefits under Medicare.
(d)
Termination Without Cause
.
(i)
Payment.
In the event Executives employment is terminated without
Cause (as such term is defined in Section 9(h) hereof) by Wintrust during the Term of this
Agreement, other than upon the expiration of the Term of this Agreement, Wintrust shall pay
Severance Pay to Executive in the amount equal to
three times (3x)
the sum of (A) Executives base
annual salary in effect at the time of Executives termination plus (B) an amount equal to
Executives Target Cash Bonus for the year in which such termination occurs and Executives Target
Stock Bonus for the year in which such termination occurs. Severance Pay under this Section 9(d)
shall be paid to the Executive ratably over a 36-month period beginning on the first payroll period
following such termination and on each payroll period thereafter during such Severance Pay period.
(ii)
Company-Paid Health Insurance.
In the event of Executives termination
pursuant to this Section 9(d), from the termination date through the earlier of (A) the date on
which Executive becomes eligible for coverage under another group health insurance plan with no
pre-existing condition limitation or exclusion or (B) the date on which Executive becomes entitled
to benefits under Medicare, Executive (and any qualified dependents) shall be entitled to group
health insurance coverage. Such coverage shall be provided, at the option of Wintrust, either: (x)
under the Wintrust group health insurance plan for employees (as such plan is then in effect and as
it may be amended at any time and from time to time during the period of coverage) in which
Executive was participating immediately prior to termination, at Wintrusts expense, subject to any
normal employee contributions, if any; or (y) under an individual health insurance policy having
coverage similar to that provided by the Wintrust group health plan for employees (as such plan is
then in effect and as it may be amended at any time and from time to time during the period of
coverage), at Wintrusts expense. Executive shall promptly notify Wintrust if Executive
5
becomes eligible for coverage under another group health plan with no pre-existing condition
limitation or exclusion or Executive becomes entitled to benefits under Medicare.
(e)
Constructive Termination
.
(i)
Payment.
If Executive suffers a Constructive Termination during the
Term of this Agreement, other than upon the expiration of the Term of this Agreement, Wintrust
shall pay Severance Pay to Executive in the amounts and at the times described in Section 9(d)
hereof. For the purposes of this Agreement, Constructive Termination means (A) the assignment to
Executive of any duties substantively inconsistent with Executives position (including status,
offices, titles and reporting requirements), authority, duties or responsibilities as contemplated
by Section 1, or any other diminution in such position, authority, duties or responsibilities
(including, without limitation, any diminution occurring solely as a result of Wintrust ceasing to
be a publicly traded entity or becoming a wholly owned subsidiary of another entity) or a material
reduction by Wintrust in the duties and responsibilities of Executive or (B) a reduction by
Wintrust of Executives Adjusted Total Compensation (as hereinafter defined), to (1) less than
seventy-five percent (75%) of the Adjusted Total Compensation of Executive for the twelve-month
period ending as of the last day of the month immediately preceding the month in which the
Constructive Termination occurs; or (2) less than seventy-five percent (75%) of the Executives
Adjusted Total Compensation for the twelve-month period ending as of the last day of the month
preceding the Effective Date, whichever is greater;
provided
,
however
, that the
occurrence of any such condition shall not constitute Constructive Termination unless Executive
provides notice to Wintrust of the existence of such condition not later than 90 days after the
initial existence of such condition, and Wintrust shall have failed to remedy such condition within
30 days after receipt of such notice. A Constructive Termination does not include termination for
Cause as defined in Section 9(h), termination without Cause as defined in Section 9(d), or
termination due to a permanent disability as defined in Section 9(c).
(ii)
Company-Paid Health Insurance.
In the event of Executives
Constructive Termination pursuant to this Section 9(e), from the termination date through the
earlier of (A) the date on which Executive becomes eligible for coverage under another group health
insurance plan with no pre-existing condition limitation or exclusion, or (B) the date on which
Executive becomes entitled to benefits under Medicare, Executive (and any qualified dependents)
shall be entitled to group health insurance coverage. Such coverage shall be provided, at the
option of Wintrust, either: (x) under the Wintrust group health insurance plan for employees (as
such plan is then in effect and as it may be amended at any time and from time to time during the
period of coverage) in which Executive was participating immediately prior to termination, at
Wintrusts expense, subject to any normal employee contributions, if any; or (y) under an
individual health insurance policy having coverage similar to that provided by the Wintrust group
health plan for employees (as such plan is then in effect and as it may be amended at any time and
from time to time during the period of coverage), at Wintrusts expense. Executive shall promptly
notify Wintrust if Executive becomes eligible for coverage under another group health plan with no
pre-existing condition limitation or exclusion or Executive becomes entitled to benefits under
Medicare.
(iii)
Definitions.
(A) For the purposes of this Agreement, Adjusted Total Compensation
means the aggregate base salary earned by the Executive plus the dollar value of all perquisites
(i.e. Wintrust provided car, club dues and supplemental life insurance) as estimated by Wintrust in
respect of the Executive for the relevant twelve month period. Adjusted Total Compensation shall
exclude any Cash Bonus, Stock Bonus, or other bonus payments paid or earned by the Executive.
(B) For the purposes of this Section 9(e), the Executive will not be
deemed to have incurred a reduction by Wintrust of Executives Adjusted Total Compensation if there
is a general reduction in base salaries and/or perquisites applicable to the President, Chief
Executive Officer and all Executive and Senior Vice Presidents of Wintrust.
(f)
Termination Upon Change In Control
.
(i)
Payment.
In the event that within eighteen months after a Change in
Control of Wintrust (as defined below) (A) Executives employment is terminated without Cause (as
such term is defined in Section 9(h) hereof) prior to the expiration of the Term of this Agreement,
or (B) Executive suffers a Constructive Termination prior to the expiration of the Term of this
Agreement, Wintrust (or the successor thereto) shall pay Severance Pay to Executive in the amount
that is equivalent to the amount described in Section 9(d) hereof in a lump sum within
6
thirty (30) days following the date of Executives termination or Constructive Termination;
provided
,
however
, that if such Change in Control is not a change in control
event, within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the
Code), then such Severance Pay shall be paid ratably over a 36-month period beginning on the
first payroll period following such termination and on each payroll period thereafter during such
Severance Pay period.
(ii)
Change In Control.
For the purposes of this Agreement, a Change
in Control shall have the same meaning as provided in Section 12(b) of the Wintrust 2007 Stock
Incentive Plan.
(iii)
Gross-Up Payment.
If it is determined that any amount, right or
benefit paid or payable (or otherwise provided or to be provided) to the Executive by Wintrust or
any of its affiliates under this Agreement or any other plan, program or arrangement under which
Executive participates or is a party, other than amounts payable under this Section 9(f)(iii)
(collectively, the Payments), would constitute an excess parachute payment within the meaning
of Section 280G of the Internal Revenue Code, subject to the excise tax imposed by Section 4999 of
the Code, or any interest or penalties with respect to such excise tax (such excise tax, together
with any such interest and penalties, are collectively referred to as the Excise Tax), then
Executive shall be entitled to receive an additional cash payment (a Gross-Up Payment) within
30 days of such determination equal to an amount such that after payment by Executive of all taxes
(including any interest or penalties imposed with respect to such taxes), including any Excise Tax,
imposed upon the Gross-Up Payment, Executive would retain an amount of the Gross-Up Payment equal
to the Excise Tax imposed upon the total Payments. All determinations required to be made under
this Section 9(f)(iii), including whether and when a Gross-Up Payment is required, the amount of
such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall
be made by Wintrusts independent auditor. The auditor shall promptly provide detailed supporting
calculations to both Wintrust and Executive following any determination that a Gross-Up Payment is
necessary. All fees and expenses of the auditor shall be paid by Wintrust. If no determination by
Wintrusts auditors is made prior to the time a tax return reflecting the total Payments is
required to be filed by Executive, Executive will be entitled to receive a Gross-Up Payment
calculated on the basis of the total Payments reported by Executive in such tax return, within 30
days of the filing of such tax return. All determinations made by such auditor shall be binding
upon Wintrust and Executive. In all events, if any tax authority determines that a greater Excise
Tax should be imposed upon the total Payments than is determined by Wintrusts independent auditors
or reflected in Executives tax return pursuant to this Section, Executive shall be entitled to
receive the full Gross-Up Payment calculated on the basis of the amount of Excise Tax determined to
be payable by such tax authority from Wintrust within 30 days of such determination. In the event
that any tax authority determines that a lesser Excise Tax should be imposed on the total Payments
than is determined by Wintrusts independent auditors or reflected in Executives tax return
pursuant to this Section, and Wintrust paid a Gross-Up Payment to the Executive in excess of the
amount of the Gross-Up Payment to which he is actually entitled hereunder, then such excess shall
be reimbursed by the Executive to Wintrust within 30 days of such determination.
(iv)
Company-Paid Health Insurance.
In the event Executive becomes
entitled to payments under this Section 9(f), from the termination date through the earlier of
(A) the date on which Executive becomes eligible for coverage under another group health insurance
plan with no pre-existing condition limitation or exclusion, or (B) the date on which Executive
becomes entitled to benefits under Medicare, Executive (and any qualified dependents) shall be
entitled to group health insurance coverage. Such coverage shall be provided, at the option of
Wintrust, either: (x) under the Wintrust group health insurance plan for employees (as such plan is
then in effect and as it may be amended at any time and from time to time during the period of
coverage) in which Executive was participating immediately prior to termination, at Wintrusts
expense, subject to any normal employee contributions, if any; or (y) under an individual health
insurance policy having coverage similar to that provided by the Wintrust group health plan for
employees (as such plan is then in effect and as it may be amended at any time and from time to
time during the period of coverage), at Wintrusts expense. Executive shall promptly notify
Wintrust if, prior to the expiration of the maximum period of COBRA coverage, Executive becomes
eligible for coverage under another group health plan with no pre-existing condition limitation or
exclusion or Executive becomes entitled to benefits under Medicare.
(v)
Definitions.
For the purposes of this Section 9(f), the term
Constructive Termination shall have the same meaning as such term is defined in Section 9(e) with
the following modifications:
7
(A) A Constructive Termination shall be deemed to have occurred if after a
Change in Control, the Executives Adjusted Total Compensation is reduced to less than (1) 100% of
the Adjusted Total Compensation of Executive for the twelve-month period ending as of the last day
of the month immediately preceding the month in which the Constructive Termination occurs or
(2) 100% percent of the Executives Adjusted Total Compensation for the twelve-month period ending
as of the last day of the month preceding the Effective Date, whichever is greater.
(B) A Constructive Termination shall also be deemed to have occurred if
after a Change in Control, Wintrust (or the successor thereto) delivers written notice to Executive that it will continue to
employ Executive but will reject this Agreement (other than due to the expiration of the Term of
this Agreement).
(C) Subsection 9(e)(iii)(B) shall not be applicable to a Constructive
Termination following a Change in Control.
(g)
Voluntary Termination
. Executive may voluntarily terminate employment
during the Term of this Agreement by a delivery to Wintrust of a written notice at least 60 days in
advance of the termination date. If Executive voluntarily terminates employment prior to the
expiration of the Term of this Agreement, any and all of Wintrusts obligations under this
Agreement shall terminate immediately except for Wintrusts obligations contained in Section 9(a)
hereof. Notwithstanding the foregoing, termination of employment shall not affect the obligations
of Executive that, pursuant to the express provisions of this Agreement, continue in effect.
(h)
Termination For Cause
. If Executive is terminated for Cause as
determined by the written resolution of Wintrusts Board of Directors or the Compensation Committee
or any successor committee of the Wintrust Board of Directors, all obligations of Wintrust shall
terminate immediately except for Wintrusts obligations described in Section 9(a) hereof.
Notwithstanding the foregoing, termination of employment shall not affect the obligations of
Executive that, pursuant to the express provisions of this Agreement, continue in effect. For
purposes of this Agreement, termination for Cause means:
(i) Executives failure or refusal, after written notice thereof and after
reasonable opportunity to cure, to perform specific directives approved by a majority of the
Wintrust Board of Directors which are consistent with the scope and nature of Executives duties
and responsibilities as provided in Section 1 of this Agreement;
(ii) Habitual drunkenness or illegal use of drugs which interferes with the
performance of Executives duties and obligations under this Agreement;
(iii) Executives conviction of a felony;
(iv) Any defalcation or acts of gross or willful misconduct of Executive
resulting in or potentially resulting in economic loss to Wintrust or substantial damage to
Wintrusts reputation;
(v) Any breach of Executives covenants contained in Sections 4 through 6
hereof;
(vi) A written order requiring the termination of Executive from Executives
position with Wintrust or any Affiliate for which Executive is also providing services by any
regulatory agency or body; or
(vii) Executives engagement, during the performance of Executives duties
hereunder, in acts or omissions constituting fraud, intentional breach of fiduciary obligation,
intentional wrongdoing or malfeasance, or intentional and material violation of applicable banking
laws, rules, or regulations.
(i) Executives right to receive Severance Pay per Sections 9(c) through 9(f) hereof
is contingent upon (i) Executive having executed and delivered to Wintrust a release in such form
as provided by Wintrust and (ii) Executive not violating any of Executives on-going obligations
under this Agreement.
(j) The payment of Severance Pay to Executive pursuant to Sections 9(c) through 9(f)
hereof shall be liquidated damages for and in full satisfaction of any and all claims Executive may
have relating to or arising out of Executives employment and termination of employment by
Wintrust, any and all claims Executive may have relating to or arising out of this Agreement and
the termination thereof and any and all claims Executive may have
8
arising under any statute, ordinance or regulation or under common law. Executive expressly
acknowledges and agrees that, except for whatever claim Executive may have to Severance Pay,
Executive shall not have any claim for damages or other relief of any sort relating to or arising
out of Executives employment or termination of employment by Wintrust or relating to or arising
out of this Agreement and the termination thereof.
(k) Upon termination of employment with Wintrust for any reason, Executive shall
promptly deliver to Wintrust all writings, records, data, memoranda, contracts, orders, sales
literature, price lists, client lists, data processing materials, and other documents, whether or
not obtained from Wintrust or any Affiliate, which pertain to or were used by Executive in
connection with Executives employment by Wintrust or which pertain to any Affiliate, including,
but not limited to, Confidential Information, as well as any automobiles, computers or other
equipment which were purchased or leased by Wintrust for Executive.
10.
Resolution of Disputes
. Except as otherwise provided herein, any disputes
arising under or in connection with this Agreement or in any way arising out of, relating to or
associated with the Executives employment with Wintrust or the termination of such employment
(Claims), that Executive may have against Wintrust or against its Affiliates, officers,
directors, employees or agents in their capacity as such or otherwise, or that Wintrust may have
against Executive, shall be resolved by binding arbitration, to be held in Chicago, Illinois, in
accordance with the rules and procedures of the National Rules for the Resolution of Employment
Disputes of the American Arbitration Association (the AAA) and the parties hereby agree to
expedite such arbitration proceedings to the extent permitted by the AAA. Judgment upon the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. The Claims
covered by this Agreement include, but are not limited to: claims for wages or other compensation
due; claims for breach of any contract or covenant, express or implied; tort claims; claims for
discrimination, including but not limited to discrimination based on race, sex, sexual orientation,
religion, national origin, age, marital status, handicap, disability or medical condition or
harassment on any of the foregoing bases; claims for benefits, except as excluded in the following
paragraph; and claims for violation of any federal, state or other governmental constitution,
statute, ordinance, regulation, or public policy. The Claims covered by this Agreement do not
include claims for workers compensation benefits or compensation; claims for unemployment
compensation benefits; claims based upon an employee pension or benefit plan, the terms of which
contain an arbitration or other non-judicial resolution procedure, in which case the provisions of
such plan shall apply; and claims made by either Wintrust or the Executive for injunctive and/or
other equitable relief regarding the covenants set forth in Sections 3, 4, 5 and 6 of this
Agreement. Each party shall initially bear their own costs of the arbitration or litigation, except
that, if Wintrust is found to have violated any material terms of this Agreement, Wintrust shall
reimburse Executive for the entire amount of reasonable attorneys fees incurred by Executive as a
result of the dispute hereunder in addition to the payment of any damages awarded to Executive.
11.
General Provisions
.
(a) All provisions of this Agreement are intended to be interpreted and construed in
a manner to make such provisions valid, legal, and enforceable. To the extent that any Section of
this Agreement or any word, phrase, clause, or sentence hereof shall be deemed by any court to be
illegal or unenforceable, such word, clause, phrase, sentence, or Section shall be deemed modified,
restricted, or omitted to the extent necessary to make this Agreement enforceable. Without limiting
the generality of the foregoing, if the scope of any covenant in this Agreement is too broad to
permit enforcement to its full extent, such covenant shall be enforced to the maximum extent
provided by law; and Executive agrees that such scope may be judicially modified accordingly.
(b) This Agreement may be assigned by Wintrust. This Agreement and the covenants set
forth herein shall inure to the benefit of and shall be binding upon the successors and assigns of
Wintrust.
(c) This Agreement may not be assigned by Executive, but shall be binding upon
Executives executors, administrators, heirs, and legal representatives.
(d) No waiver by either party of any breach by the other party of any of the
obligations, covenants, or representations under this Agreement shall constitute a waiver of any
prior or subsequent breach.
(e) Where in this Agreement the masculine gender is used, it shall include the
feminine if the sense so requires.
9
(f) Wintrust may withhold from any payment that it is required to make under this
Agreement amounts sufficient to satisfy applicable withholding requirements under any federal,
state, or local law.
(g) This instrument constitutes the entire agreement of the parties with respect to
its subject matter. This Agreement may not be changed or amended orally but only by an agreement in
writing, signed by the party against whom enforcement of any waiver, change, modification,
extension, or discharge is sought. Any other understandings and agreements, oral or written,
respecting the subject matter hereof are hereby superseded and canceled.
(
h) The provisions of Sections 4, 5, 6, 7, 9(i), 9(j), 10, 11, and 12 of this
Agreement shall survive the termination of Executives employment with Wintrust and the expiration
or termination of this Agreement.
12.
Governing Law
. The parties agree that this Agreement shall be construed and
governed by the laws of the State of Illinois, excepting its conflict of laws principles. Further,
the parties acknowledge and specifically agree to the jurisdiction of the courts of the State of
Illinois in the event of any dispute regarding Sections 3, 4, 5, or 6 of this Agreement.
13.
Section 409A
. This Agreement shall be interpreted and construed in a manner
that avoids the imposition of additional taxes and penalties under Section 409A of the Code (409A
Penalties). In the event the terms of this Agreement would subject Executive to 409A Penalties,
Wintrust and Executive shall cooperate diligently to amend the terms of the Agreement to avoid such
409A Penalties, to the extent possible. The payments to Executive pursuant to Section 9 of this
Agreement are intended to be exempt from Section 409A of the Code to the maximum extent possible,
under either the separation pay exemption pursuant to Treasury regulation §1.409A-1(b)(9)(iii) or
as a short-term deferral pursuant to Treasury regulation §1.409A-1(b)(4), and for purposes of the
separation pay exemption, each installment paid to Executive under Section 9 shall be considered a
separate payment. Notwithstanding any other provision in this Agreement, if on the date of
Executives separation from service, within the meaning of Section 409A of the Code (the
Separation Date), (i) Wintrust is a publicly traded corporation and (ii) Executive is a
specified employee, as defined in Section 409A of the Code, then to the extent any amount payable
under this Agreement constitutes the payment of nonqualified deferred compensation, within the
meaning of Section 409A of the Code, that under the terms of this Agreement would be payable prior
to the six- month anniversary of the Separation Date, such payment shall be delayed until the
earlier to occur of (A) the six-month anniversary of the Separation Date or (B) the date of
Executives death. For purposes of determining the timing of payments to Executive pursuant to
Section 9, all references to Executives termination of employment shall mean the Separation Date.
14.
Notice of Termination
. Subject to the provisions of Section 8, in the event
that Wintrust desires to terminate the employment of the Executive during the Term of this
Agreement, Wintrust shall deliver to Executive a written notice of termination, stating whether the
termination constitutes a termination in accordance with Section 9(c), 9(d), 9(e), 9(f), or 9(h).
In the event that Executive determines in good faith that Executive has experienced a Constructive
Termination, Executive shall deliver to Wintrust a written notice stating the circumstances that
constitute such Constructive Termination. In the event that the Executive desires to effect a
voluntary termination of Executives employment in accordance with Section 9(g), Executive shall
deliver a written notice of such voluntary termination to Wintrust.
10
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date
written opposite their signatures.
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WINTRUST FINANCIAL CORPORATION
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DAVID A. DYKSTRA
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By:
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/s/ Edward Wehmer
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/s/ David A. Dykstra
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Its: Chief Executive Officer
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Dated: December 19, 2008
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Dated: December 19, 2008
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11
EXHIBIT A
Advantage National Bank
Barrington Bank & Trust Company, N.A.
Beverly Bank & Trust Company, N.A.
Crystal Lake Bank & Trust Company, N.A.
First Insurance Funding Corporation
Hinsdale Bank & Trust Company
Lake Forest Bank & Trust Company
Libertyville Bank & Trust Company
North Shore Community Bank & Trust Company
Northbrook Bank & Trust Company
Old Plank Trail Community Bank, N.A.
St. Charles Bank & Trust Company
State Bank of the Lakes
Town Bank (Wisconsin)
Tricom, Inc. of Milwaukee
Village Bank & Trust
Wayne Hummer Asset Management Company
Wayne Hummer Investments, LLC
Wayne Hummer Trust Company, N.A.
Wheaton Bank & Trust Company
Wintrust Information Technology Services Company
Wintrust Mortgage Corporation
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Exhibit 10.6
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (the Agreement) is made by and between
WINTRUST FINANCIAL CORPORATION (Wintrust), a bank holding company, and David L. Stoehr, an
individual resident in the State of Illinois (Executive) as of December 19, 2008.
WITNESSETH THAT:
Wintrust is a bank holding company;
WHEREAS, Executive has particular expertise and knowledge concerning the business of
Wintrust and its operations and is a valued member of Wintrusts senior management;
WHEREAS, by virtue of Executives employment with Wintrust, Executive will become
acquainted with certain confidential information regarding the services, customers, methods of
doing business, strategic plans, marketing, and other aspects of the
business of Wintrust
or its Affiliates;
WHEREAS, Wintrust and Executive desire to state and set forth in this Agreement the
terms, conditions and obligations of the parties with respect to such employment effective as of
the date first written above (the Effective Date) and this Agreement is intended by the parties
to supersede all previous agreements and understanding, whether written or oral, concerning such
employment.
NOW THEREFORE, in consideration of the covenants and agreements contained herein, of
Executives employment, of the compensation to be paid by Wintrust for Executives services, and of
Wintrusts other undertakings in this Agreement, the parties hereto do hereby agree as follows:
1.
Scope of Employment
. Executive will be employed as Executive Vice
President and Chief Financial Officer of Wintrust and shall perform such duties as may be assigned
to Executive by the Chief Executive Officer of and the Board of Directors of Wintrust in such
position. Executive agrees that during Executives employment Executive will be subject to and
abide by the written policies and practices of Wintrust. Executive also agrees to assume such new
or additional positions and responsibilities as Executive may from time to time be assigned for or
on behalf of Wintrust or any Affiliate of Wintrust. Notwithstanding the foregoing, during the Term
(as defined in Section 8 herein) of this Agreement, Executive will not be required without
Executives consent to move Executives principal business location to another location more than a
35 mile radius from Executives principal business location. For purposes of this Agreement, the
term Affiliate shall include but not be limited to the entities listed in Exhibit A to this
Agreement and any subsidiary of any of such entities and shall further include any present or
future affiliate of any of them as defined by the rules and regulations of the Federal Reserve
Board. In the event Executive shall perform services for any Affiliate of Wintrust in addition to
serving as Executive Vice President and Chief Financial Officer of Wintrust, the provisions of this
Agreement shall also apply to the performance of such services by Executive on behalf of such
Affiliate.
2.
Compensation and Benefits
. Executive will be paid such base salary as may
from time to time be agreed upon between Executive and Wintrust. Executive will be entitled to
coverage under such compensation plans, insurance plans and other fringe benefit plans and programs
as may from time to time be established for employees of Wintrust and its Affiliates in accordance
with the terms and conditions of such plans and programs. Executive shall also be eligible to
participate in the Wintrust 2007 Stock Incentive Plan or any successor Plan thereto.
3.
Extent of Service
. Executive shall devote Executives entire time,
attention and energies to the business of Wintrust during the Term of this Agreement; but this
shall not be construed as preventing Executive from (a) investing Executives personal assets in
such form or manner as will not require any services on the part of Executive in the operation or
the affairs of the corporations, partnerships and other entities in which such
investments are made and in which Executives participation is solely that of an investor (subject
to any and all rules and regulations of applicable banking regulators or policies of Wintrust
governing transactions with affiliates and ownership interests in customers); (b) engaging (whether
or not during normal business hours) in any other business, professional or civic activities
provided that the Board of Directors of Wintrust approves of such activities and Executives
engagement does not result in a violation of Executives covenants under this Section or Sections 4
or 5 hereof; or (c) accepting appointments to the boards of directors of other companies provided
that the Board of Directors of Wintrust approves of such appointments and Executives performance
of Executives duties on such boards does not result in a violation of Executives covenants under
this Section or Sections 4 and 5 hereof.
4.
Competition
. Other than in connection with Executives performance of
Executives duties hereunder, during the period in which Executive performs services for Wintrust
and for a period of
three years
after termination of Executives employment with Wintrust,
regardless of the reason, Executive shall not directly or indirectly, either alone or in
conjunction with any other person, firm, association, company or corporation:
(a) serve as an owner, principal, senior manager, or in a position comparable to
that held by Executive at any time during Executives employment with Wintrust, for a bank or other
financial institution (or any branch or affiliate thereof) which offers to its customers commercial
and community banking and/or trust and investment services, and which is located within ten miles
of the principal office or any branch office of Wintrust;
(b) solicit or conduct business which involves commercial and community banking
and/or trust and investment services with any person, corporation or other entity which was (i) a
customer of Wintrust or any other Affiliate of Wintrust with whom Executive had direct or
indirect contact while employed by Wintrust or about whom Executive obtained Confidential
Information during the fifteen months prior to the termination of Executives employment with
Wintrust, or (ii) a potential customer with whom Wintrust, or any Affiliate has, at the time of
Executives termination of employment with Wintrust, an outstanding oral or written proposal to
provide commercial and community banking and/or trust and investment services and with whom
Executive had direct or indirect contact while employed by Wintrust;
(c) request, advise or directly or indirectly invite any of the existing
customers, suppliers or service providers of Wintrust or any other Affiliate of Wintrust to
withdraw, curtail or cancel its business with Wintrust or any other Affiliate of Wintrust, other
than through mass mailings or general advertisements not specifically directed at customers of
Wintrust or any Affiliate;
(d) hire, solicit, induce or attempt to solicit or induce any employee,
consultant, or agent of Wintrust or any other Affiliate of Wintrust (i) to terminate his employment
or association with Wintrust or (ii) to become employed by or serve in any capacity by a bank or
other financial institution which operates or is planned to operate at any facility which is
located within a ten mile radius of the principal office or any branch office of Wintrust; or
(e) in any way participate in planning or opening a bank or other financial
institution which is located or will be located within a ten mile radius of the principal office or
any branch office of Wintrust. For the purposes of this Agreement, in the event Executives
geographic area of responsibility as specified herein shall change during employment with Wintrust,
or as the result of performing services for any Affiliate of Wintrust, the Executives obligation
stated in Sections 4(a), 4(d)(ii) and 4(e) shall apply to a ten mile radius of Executives revised
geographic area of responsibility.
Notwithstanding the foregoing, Executive shall not be prevented from: (i) investing or
owning shares of stock of any corporation engaged in any business provided that such shares are
regularly traded on a national securities exchange or any over-the-counter market; (ii) retaining
any shares of stock in any corporation which Executive owned prior to the date of Executives
employment with Wintrust (subject to any and all rules and regulations of applicable banking
regulators or policies of Wintrust governing transactions with affiliates and ownership interests
in customers); or (iii) investing as a limited partner (without decision-making authority) in any
private equity fund, provided that Executives involvement in such investment is solely that of a
passive investor (subject to any and all rules and regulations of applicable banking regulators or
policies of Wintrust governing transactions with affiliates and ownership interests in customers).
2
5.
Confidential Information
. Executive acknowledges that, during Executives
employment with Wintrust, Executive has and will obtain access to Confidential Information of and
for Wintrust or its Affiliates. For purposes of this Agreement, Confidential Information shall
mean information not generally known or available without restriction to the trade or industry,
including, without limitation, the following categories of information and documentation:
(a) documentation and information relating to lending customers of Wintrust or any Affiliate,
including, but not limited to, lists of lending clients with their addresses and account numbers,
credit analysis reports and other credit files, outstanding loan amounts, repayment dates and
instructions, information regarding the use of the loan proceeds, and loan maturity and renewal
dates; (b) documentation and information relating to depositors of Wintrust or any Affiliate,
including, but not limited to, lists of depositors with their addresses and account numbers,
amounts held on deposit, types of depository products used and the number of accounts per customer;
(c) documentation and information relating to trust customers of Wintrust or any Affiliate,
including, but not limited to, lists of trust customers with their addresses and account numbers,
trust investment management contracts, identity of investment managers, trust corpus amounts, and
grantor and beneficiary information; (d) documentation and information relating to investment
management clients of Wintrust or any Affiliate, including, but not limited to, lists of investors
with their addresses, account numbers and beneficiary information, investment management contracts,
amount of assets held for management, and the nature of the investment products used; (e) the
identity of actual or potential customers of Wintrust or any Affiliate, including lists of the
same; (f) the identity of suppliers and service providers of Wintrust or any Affiliate, including
lists of the same and the material terms of any supply or service contracts; (g) marketing
materials and information regarding the products and services offered by Wintrust or any Affiliate
and the nature and scope of use of such marketing materials and product information; (h) policy and
procedure manuals and other materials used by Wintrust or any Affiliate in the training and
development of its employees; (i) identity and contents of all computer systems, programs and
software utilized by Wintrust or any Affiliate to conduct its operations and manuals or other
instructions for their use; (j) minutes or other summaries of Board of Directors or other
department or committee meetings held by Wintrust or any Affiliate; (k) the business and strategic
growth plans of Wintrust or any Affiliate; and (l) confidential communication materials provided
for shareholders of Wintrust or any Affiliate. Absent prior authorization by Wintrust or as
required in Executives duties for Wintrust, Executive will not at any time, directly or
indirectly, use, permit the use of, disclose or permit the disclosure to any third party of any
such Confidential Information to which Executive will be provided access. These obligations apply
both during Executives employment with Wintrust and shall continue beyond the termination of
Executives employment and this Agreement.
6.
Inventions
. All discoveries, designs, improvements, ideas, and inventions,
whether patentable or not, relating to (or suggested by or resulting from) products, services, or
other technology of Wintrust or any Affiliate or relating to (or suggested by or resulting from)
methods or processes used or usable in connection with the business of Wintrust or any Affiliate
that may be conceived, developed, or made by Executive during employment with Wintrust (hereinafter
Inventions), either solely or jointly with others, shall automatically become the sole property
of Wintrust or an Affiliate. Executive shall immediately disclose to Wintrust all such Inventions
and shall, without additional compensation, execute all assignments and other documents deemed
necessary to perfect the property rights of Wintrust or any Affiliate therein. These obligations
shall continue beyond the termination of Executives employment with respect to Inventions
conceived, developed, or made by Executive during employment with Wintrust. The provisions of this
Section 6 shall not apply to any Invention for which no equipment, supplies, facility, or trade
secret information of Wintrust or any Affiliate is used by Executive and which is developed
entirely on Executives own time, unless (a) such Invention relates (i) to the business of Wintrust
or an Affiliate or (ii) to the actual or demonstrably anticipated research or development of
Wintrust or an Affiliate, or (b) such Invention results from work performed by Executive for
Wintrust.
7.
Remedies
. Executive acknowledges that compliance with the terms of this
Agreement is necessary to protect the Confidential Information and goodwill of Wintrust and its
Affiliates and that any breach by Executive of this Agreement will cause continuing and irreparable
injury to Wintrust and its Affiliates for which money damages would not be an adequate remedy.
Executive acknowledges that Wintrust and all other Affiliates are and are intended to be third
party beneficiaries of this Agreement. Executive acknowledges that Wintrust and any Affiliate
shall, in addition to any other rights or remedies they may have, be entitled to injunctive relief
for any breach by Executive of any part of this Agreement. This Agreement shall not in any way
limit the remedies in law or equity otherwise available to Wintrust and its Affiliates.
3
8.
Term of Agreement
. Unless terminated sooner as provided in Section 9, the
initial term of Executives employment pursuant to this Agreement (Initial Term) shall be until
January 26, 2009. After such Initial Term, this Agreement shall be extended automatically for
successive one-year terms, unless either Executive or Wintrust gives contrary written notice not
less than 60 days in advance of the expiration of the Initial Term or any succeeding term of this
Agreement or unless terminated sooner as provided in Section 9. Notwithstanding the foregoing, if
at any time during the Initial Term or any successive one-year term there is a Change in Control of
Wintrust (as defined in Section 9(f)), then upon the first occurrence of such a Change in Control,
the Initial Term or the successive one-year term of this Agreement (whichever is in effect as of
the date of the Change in Control) shall automatically extend for the greater of: (a) the amount of
time remaining on Executives Initial Term of employment if such first occurrence of a Change in
Control occurs during the Initial Term, or (b) two years from the date of such first occurrence of
a Change in Control. In the event that Executives Initial Term or successive one-year term is
extended due to such a Change in Control, such extension shall further be extended automatically
for successive one-year terms unless either Executive or Wintrust gives contrary written notice not
less than 60 days in advance of the expiration of the extension of this Agreement or unless
terminated sooner as provided in Section 9. The Initial Term, together with any extension thereof
in accordance with this Section 8, shall be referred to herein as the Term.
9.
Termination of Employment.
(a)
General Provisions
. Executives employment may be terminated by
Wintrust at any time for any reason, with or without cause, and, except as otherwise provided in
this Section 9, any and all of Wintrusts obligations under this Agreement shall terminate, other
than Wintrusts obligation to pay Executive, within 30 days of Executives termination of
employment, the full amount of any earned but unpaid base salary and accrued but unpaid vacation
pay earned by Executive pursuant to this Agreement through and including the date of termination
and to observe the terms and conditions of any plan or benefit arrangement which, by its terms,
survives such termination of Executives employment. The payments to be made under this Section
9(a) shall be made to Executive, or in the event of Executives death, to such beneficiary as
Executive may designate in writing to Wintrust for that purpose, or if Executive has not so
designated, then to the spouse of Executive, or if none is surviving, then to the estate of
Executive. Notwithstanding the foregoing, termination of employment shall not affect the
obligations of Executive that, pursuant to the express provisions of this Agreement, continue in
effect.
(b)
Termination Due to Death
.
(i)
Payment.
If Executive should die during the Term of this
Agreement, which event shall result in the termination of Executives employment, Wintrust shall
pay Executive an amount equal to three times (3x) the sum of (A) Executives base annual salary in
effect at the time of Executives death plus (B) an amount equal to Executives Target Cash Bonus
for the year in which Executives death occurs and Executives Target Stock Bonus for the year in
which Executives death occurs, in a lump sum within 30 days following the date of Executives
death. For the purposes of this Agreement, Target Cash Bonus shall mean the target cash bonus for
the applicable year, as approved in writing by Wintrusts Board of Directors or the Compensation
Committee or any successor committee of Wintrusts Board of Directors. For the purposes of this
Agreement, Target Stock Bonus shall mean the target amount of restricted shares for such year
that are included in Executives annual bonus plan, as approved in writing by Wintrusts Board
of Directors or the Compensation Committee or any successor committee of Wintrusts Board of
Directors.
(ii)
Reduction of Payment Due To Life Insurance Benefits.
The
amount to be paid to Executive pursuant to this Section 9(b) shall be reduced by the amount of any
life insurance benefit payments paid or payable to Executive from policies of insurance maintained
and/or paid for by Wintrust; provided that in the event the life insurance benefits exceed the
amount to be paid to Executive pursuant to this Section 9(b), Executive shall remain entitled to
receive the excess life insurance payments. The Executive will cooperate with Wintrust in order to
enable Wintrust to pay for a policy or policies of life insurance on the life of the Executive. To
the extent that the Executive is not insurable or a life insurance policy is not reasonably
obtainable, then the payments due under this Section 9(b) shall be reduced by 50%.
4
(iii)
Beneficiary.
The payments to be made under this Section 9(b)
shall be made to such beneficiary as Executive may designate in writing to Wintrust for that
purpose, or if Executive has not so designated, then to the spouse of Executive, or if none is
surviving, then to the estate of Executive.
(c)
Termination Due to Permanent Disability
.
(i)
Payment.
If Executive should suffer a permanent disability
during the Term of this Agreement, Wintrust shall have the right to terminate Executives
employment. In such event, Wintrust shall pay Executive an amount equal to three times (3x) the sum
of (A) Executives base annual salary in effect at the time of Executives permanent disability
plus (B) an amount equal to Executives Target Cash Bonus for the year in which Executives
permanent disability occurs and Executives Target Stock Bonus for the year in which Executives
permanent disability occurs. Such amount shall be paid to Executive ratably over a 36-month period
beginning on the first payroll period following such termination and on each payroll period
thereafter during the 36-month period. For the purposes of this Agreement, permanent disability
means any mental or physical illness, disability or incapacity that renders Executive unable to
perform Executives duties hereunder where (x) such permanent disability has been determined to
exist by a physician selected by Wintrust or (y) Wintrust has reasonably determined, based on such
physicians advice, that such disability will continue for 180 days or more within any 365-day
period, of which at least 90 days are consecutive. Executive shall cooperate in all respects with
Wintrust if a question arises as to whether he has become disabled (including, without limitation,
submitting to an examination by a physician or other health care specialist selected by Wintrust
and authorizing such physician or other health care specialist to discuss Executives condition
with Wintrust).
(ii)
Reduction of Payment Due To Long Term Disability Insurance
Benefits.
The amount to be paid to Executive pursuant to this Section 9(c) shall be reduced by
the amount of any long-term disability benefit payments paid or payable to Executive during such
payment period from policies of insurance maintained and/or paid for by Wintrust; provided that in
the event the long-term disability benefits exceed the amount to be paid to Executive pursuant to
this Section 9(c), Executive shall remain entitled to receive the excess long-term disability
insurance payments.
(iii)
Continued Participation In Benefit Plans.
In the event of
termination due to a permanent disability, Executives or Executives dependents participation in
any medical, health, accident, disability, death, life insurance or similar plan in which Executive
was participating immediately prior to termination shall continue (to the extent Executive and
Executives dependents are eligible to participate in such plans pursuant to the terms of such
plans) for the period in which payments are being made under this Section 9(c) at Wintrusts
expense (subject to any normal employee contributions, if any), although any continuation of health
coverage shall count toward the COBRA continuation of coverage period.
(d)
Termination Without Cause
.
(i)
Payment.
In the event Executives employment is terminated
without Cause (as such term is defined in Section 9(h) hereof) by Wintrust during the Term of this
Agreement, other than upon the expiration of the Term of this Agreement, Wintrust shall pay
Severance Pay to Executive in the amount equal to
three times (3x)
the sum of (A) Executives base
annual salary in effect at the time of Executives termination plus (B) an amount equal to
Executives Target Cash Bonus for the year in which such termination occurs and Executives Target
Stock Bonus for the year in which such termination occurs. Severance Pay under this Section 9(d)
shall be paid ratably over a 36-month period beginning on the first payroll period following such
termination and on each payroll period thereafter during such Severance Pay period.
(ii)
Company-Paid Health Insurance.
In the event of Executives
termination pursuant to this Section 9(d), from the termination date through the earliest of
(A) the expiration of the maximum period of COBRA coverage, (B) the date on which Executive becomes
eligible for coverage under another group health insurance plan with no pre-existing condition
limitation or exclusion, or (C) the date on which Executive becomes entitled to benefits under
Medicare, Executive (and any qualified dependents) shall be entitled to group health insurance
coverage under Wintrusts group health insurance plan for employees (as such plan is then in
effect and as it may be
5
amended at any time and from time to time during the period of coverage) in which Executive was
participating immediately prior to termination, at Wintrusts expense, subject to any normal
employee contributions, if any. The period during which Executive is being provided with health
insurance under this Agreement shall be credited against Executives period of COBRA coverage, if
any. Executive shall promptly notify Wintrust if, prior to the expiration of the maximum period of
COBRA coverage, Executive becomes eligible for coverage under another group health plan with no
pre-existing condition limitation or exclusion or Executive becomes entitled to benefits under
Medicare.
(e)
Constructive Termination
.
(i)
Payment.
If Executive suffers a Constructive Termination during the
Term of this Agreement, other than upon the expiration of the Term of this Agreement, Wintrust
shall pay Severance Pay to Executive in the amounts and at the times described in Section 9(d)
hereof. For the purposes of this Agreement, Constructive Termination means (A) a material
reduction by Wintrust in the duties and responsibilities of Executive or (B) a reduction by
Wintrust of Executives Adjusted Total Compensation (as hereinafter defined), to (1) less than
seventy-five percent (75%) of the Adjusted Total Compensation of Executive for the twelve-month
period ending as of the last day of the month immediately preceding the month in which the
Constructive Termination occurs; or (2) less than seventy-five percent (75%) of the Executives
Adjusted Total Compensation for the twelve-month period ending as of the last day of the month
preceding the Effective Date, whichever is greater. A Constructive Termination does not include
termination for Cause as defined in Section 9(h), termination without Cause as defined in
Section 9(d), or termination due to a permanent disability as defined in Section 9(c).
(ii)
Company-Paid Health Insurance.
In the event of Executives
termination pursuant to this Section 9(e), from the termination date through the earliest of
(A) the expiration of the maximum period of COBRA coverage, (B) the date on which Executive becomes
eligible for coverage under another group health insurance plan with no pre-existing condition
limitation or exclusion, or (C) the date on which Executive becomes entitled to benefits under
Medicare, Executive (and any qualified dependents) shall be entitled to group health insurance
coverage under Wintrusts group health insurance plan for employees (as such plan is then in effect
and as it may be amended at any time and from time to time during the period of coverage) in which
Executive was participating immediately prior to termination, at Wintrusts expense, subject to any
normal employee contributions, if any. The period during which Executive is being provided with
health insurance under this Agreement shall be credited against Executives period of COBRA
coverage, if any. Executive shall promptly notify Wintrust if, prior to the expiration of the
maximum period of COBRA coverage, Executive becomes eligible for coverage under another group
health plan with no pre-existing condition limitation or exclusion or Executive becomes entitled to
benefits under Medicare.
(iii)
Definitions.
(A) For the purposes of this Agreement, Adjusted Total Compensation
means the aggregate base salary earned by the Executive plus the dollar value of all perquisites
(i.e. Wintrust provided car, club dues and supplemental life insurance) as estimated by Wintrust in
respect of the Executive for the relevant twelve-month period. Adjusted Total Compensation shall
exclude any Cash Bonus, Stock Bonus, or other bonus payments paid or earned by the Executive.
(B) For the purposes of this Section 9(e), the Executive will not be
deemed to have incurred a reduction by Wintrust of Executives Adjusted Total Compensation if there
is a general reduction in base salaries and/or perquisites applicable to the President, Chief
Executive Officer and all Vice Presidents of Wintrust.
(f)
Termination Upon Change In Control.
(i)
Payment.
In the event that within eighteen months after a
Change in Control (as defined below) of Wintrust (A) Executives employment is terminated without
Cause (as such term is defined in Section 9(h) hereof) prior to the expiration of the Term of this
Agreement or (B) Executive suffers a Constructive Termination prior to the expiration of the Term
of this Agreement, Wintrust (or the successor thereto) shall pay Severance Pay to
6
Executive in the amount that is equivalent to the amount described in Section 9(d) hereof in a lump
sum within 30 days following the date of Executives termination or Constructive Termination;
provided
,
however
, that if such Change in Control is not a change in control
event, within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the
Code), then such Severance Pay shall be paid ratably over a 36-month period beginning on the
first payroll period following such termination and on each payroll period thereafter during such
Severance Pay period.
(ii)
Change In Control.
For the purposes of this Agreement, a
Change in Control shall have the same meaning as provided in Section 12(b) of the Wintrust 2007
Stock Incentive Plan.
(iii)
Section 280G.
Notwithstanding the foregoing, if the payment
required to be paid under this Section 9(f), when considered either alone or with other payments
paid or imputed to the Executive from Wintrust or an Affiliate that would be deemed excess
parachute payments under Section 280G(b)(1) of the Code, is deemed by Wintrust to be a parachute
payment under Section 280G(b)(2) of Code, then the amount of Severance Pay required to be paid
under this Section 9(f) shall be automatically reduced to an amount equal to $1.00 less than three
times (3x) the base amount (as defined in Section 280G(3) of the Code) (the Reduced Amount).
Provided
,
however
, the preceding sentence shall not apply if the sum of (A) the
amount of Severance Pay described in this Section 9(f) less (B) the amount of excise tax payable by
the Executive under Section 4999 of the Code with respect to the amount of such Severance Pay and
any other payments paid or imputed to the Executive from Wintrust or an Affiliate that would be
deemed to be excess parachute payments under Section 280G(b)(1) of the Code, is greater than the
Reduced Amount. The decision of Wintrust (based upon the recommendations of its tax counsel and
accountants) as to the characterization of payments as parachute payments, the value of parachute
payments, the amount of excess parachute payments, and the payment of the Reduced Amount shall be
final.
(iv)
Company-Paid Health Insurance.
In the event Executive becomes
entitled to payments under this Section 9(f), from the termination date through the earliest of
(A) the expiration of the maximum period of COBRA coverage, (B) the date on which Executive becomes
eligible for coverage under another group health insurance plan with no pre-existing condition
limitation or exclusion, or (C) the date on which Executive becomes entitled to benefits under
Medicare, Executive (and any qualified dependents) shall be entitled to group health insurance
coverage under Wintrusts group health insurance plan for employees (as such plan is then in effect
and as it may be amended at any time and from time to time during the period of coverage) in which
Executive was participating immediately prior to termination, at Wintrusts expense, subject to any
normal employee contributions, if any. The period during which Executive is being provided with
health insurance under this Agreement shall be credited against Executives period of COBRA
coverage, if any. Executive shall promptly notify Wintrust if, prior to the expiration of the
maximum period of COBRA coverage, Executive becomes eligible for coverage under another group
health plan with no pre-existing condition limitation or exclusion or Executive becomes entitled to
benefits under Medicare.
(v)
Definitions.
For the purposes of this Section 9(f), the term
Constructive Termination shall have the same meaning as such term is defined in Section 9(e) with
the following modifications:
(A) A Constructive Termination shall be deemed to have occurred if
after a Change in Control, the Executives Adjusted Total Compensation is reduced to less than
(1) 100% of the Adjusted Total Compensation of Executive for the twelve-month period ending as of
the last day of the month immediately preceding the month in which the Constructive Termination
occurs or (2) 100% percent of the Executives Adjusted Total Compensation for the twelve-month
period ending as of the last day of the month preceding the Effective Date, whichever is greater.
(B) A Constructive Termination shall also be deemed to have occurred
if after a Change in Control, Wintrust (or the successor thereto) delivers written notice to
Executive that it will continue to employ Executive but will reject this Agreement (other than due
to the expiration of the Term of this Agreement).
(C) Subsection 9(e)(iv)(B) shall not be applicable to a Constructive
Termination following a Change in Control.
7
(g)
Voluntary Termination
. Executive may voluntarily terminate
employment during the Term of this Agreement by a delivery to Wintrust of a written notice at least
60 days in advance of the termination date. If Executive voluntarily terminates employment prior to
the expiration of the Term of this Agreement, any and all of Wintrusts obligations under this
Agreement shall terminate immediately except for Wintrusts obligations contained in Section 9(a)
hereof. Notwithstanding the foregoing, termination of employment shall not affect the obligations
of Executive that, pursuant to the express provisions of this Agreement, continue in effect.
(h)
Termination For Cause
. If Executive is terminated for Cause as
determined by the written resolution of Wintrusts Board of Directors or the Compensation Committee
or any successor committee of Wintrusts Board of Directors, all obligations of Wintrust shall
terminate immediately except for Wintrusts obligations described in Section 9(a) hereof.
Notwithstanding the foregoing, termination of employment shall not affect the obligations of
Executive that, pursuant to the express provisions of this Agreement, continue in effect. For
purposes of this Agreement, termination for Cause means:
(i) Executives failure or refusal, after written notice thereof and after
reasonable opportunity to cure, to perform specific directives approved by a majority of Wintrusts
Board of Directors which are consistent with the scope and nature of Executives duties and
responsibilities as provided in Section 1 of this Agreement;
(ii) Habitual drunkenness or illegal use of drugs which interferes with the
performance of Executives duties and obligations under this Agreement;
(iii) Executives conviction of a felony;
(iv) Any defalcation or acts of gross or willful misconduct of Executive
resulting in or potentially resulting in economic loss to Wintrust or substantial damage to
Wintrusts reputation;
(v) Any breach of Executives covenants contained in Sections 4 through 6
hereof;
(vi) A written order requiring termination of Executive from Executives
position with Wintrust by any regulatory agency or body; or
(vii) Executives engagement, during the performance of Executives duties
hereunder, in acts or omissions constituting fraud, intentional breach of fiduciary obligation,
intentional wrongdoing or malfeasance, or intentional and material violation of applicable banking
laws, rules, or regulations.
(i) Executives right to receive Severance Pay per Sections 9(c) through 9(f)
hereof is contingent upon (i) Executive having executed and delivered to Wintrust a release in such
form as provided by Wintrust and (ii) Executive not violating any of Executives on-going
obligations under this Agreement.
(j) The payment of Severance Pay to Executive pursuant to Sections 9(c) through
9(f) hereof shall be liquidated damages for and in full satisfaction of any and all claims
Executive may have relating to or arising out of Executives employment and termination of
employment by Wintrust, any and all claims Executive may have relating to or arising out of this
Agreement and the termination thereof and any and all claims Executive may have arising under any
statute, ordinance or regulation or under common law. Executive expressly acknowledges and agrees
that, except for whatever claim Executive may have to Severance Pay, Executive shall not have any
claim for damages or other relief of any sort relating to or arising out of Executives employment
or termination of employment by Wintrust or relating to or arising out of this Agreement and the
termination thereof.
(k) Upon termination of employment with Wintrust for any reason, Executive shall
promptly deliver to Wintrust all writings, records, data, memoranda, contracts, orders, sales
literature, price lists, client lists, data processing materials, and other documents, whether or
not obtained from Wintrust or any Affiliate, which pertain to or were used by Executive in
connection with Executives employment by Wintrust or which pertain to any other
8
Affiliate, including, but not limited to, Confidential Information, as well as any automobiles,
computers or other equipment which were purchased or leased by Wintrust for Executive.
10.
Resolution of Disputes
. Except as otherwise provided herein, any disputes
arising under or in connection with this Agreement or in any way arising out of, relating to or
associated with the Executives employment with Wintrust or the termination of such employment
(Claims), that Executive may have against Wintrust or any Affiliate of Wintrust, or the officers,
directors, employees or agents of Wintrust, or any Affiliate of Wintrust in their capacity as such
or otherwise, or that Wintrust, or any Affiliate of Wintrust may have against Executive, shall be
resolved by binding arbitration, to be held in Chicago, Illinois, in accordance with the rules and
procedures of the National Rules for the Resolution of Employment Disputes of the American
Arbitration Association (the AAA) and the parties hereby agree to expedite such arbitration
proceedings to the extent permitted by the AAA. Judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof. The Claims covered by this
Agreement include, but are not limited to: claims for wages or other compensation due; claims for
breach of any contract or covenant, express or implied; tort claims; claims for discrimination,
including but not limited to discrimination based on race, sex, sexual orientation, religion,
national origin, age, marital status, handicap, disability or medical condition or harassment on
any of the foregoing bases; claims for benefits, except as excluded in the following paragraph; and
claims for violation of any federal, state or other governmental constitution, statute, ordinance,
regulation, or public policy. The Claims covered by this Agreement do not include claims for
workers compensation benefits or compensation; claims for unemployment compensation benefits;
claims based upon an employee pension or benefit plan, the terms of which contain an arbitration or
other non-judicial resolution procedure, in which case the provisions of such plan shall apply; and
claims made by either Wintrust or the Executive for injunctive and/or other equitable relief
regarding the covenants set forth in Sections 3, 4, 5 and 6 of this Agreement. Each party shall
initially bear their own costs of the arbitration or litigation, except that, if Wintrust is found
to have violated any material terms of this Agreement, Wintrust shall reimburse Executive for the
entire amount of reasonable attorneys fees incurred by Executive as a result of the dispute
hereunder in addition to the payment of any damages awarded to Executive.
11.
General Provisions
.
(a) All provisions of this Agreement are intended to be interpreted and
construed in a manner to make such provisions valid, legal, and enforceable. To the extent that any
Section of this Agreement or any word, phrase, clause, or sentence hereof shall be deemed by any
court to be illegal or unenforceable, such word, clause, phrase, sentence, or Section shall be
deemed modified, restricted, or omitted to the extent necessary to make this Agreement enforceable.
Without limiting the generality of the foregoing, if the scope of any covenant in this Agreement is
too broad to permit enforcement to its full extent, such covenant shall be enforced to the maximum
extent provided by law; and Executive agrees that such scope may be judicially modified
accordingly.
(b) This Agreement may be assigned by Wintrust. This Agreement and the covenants
set forth herein shall inure to the benefit of and shall be binding upon the successors and assigns
of Wintrust.
(c) This Agreement may not be assigned by Executive, but shall be binding upon
Executives executors, administrators, heirs, and legal representatives.
(d) No waiver by either party of any breach by the other party of any of the
obligations, covenants, or representations under this Agreement shall constitute a waiver of any
prior or subsequent breach.
(e) Where in this Agreement the masculine gender is used, it shall include the
feminine if the sense so requires.
(f) Wintrust may withhold from any payment that it is required to make under
this Agreement amounts sufficient to satisfy applicable withholding requirements under any federal,
state, or local law.
(g) This instrument constitutes the entire agreement of the parties with respect
to its subject matter. This Agreement may not be changed or amended orally but only by an agreement
in writing, signed by the party against
9
whom enforcement of any waiver, change, modification, extension, or discharge is sought. Any other
understandings and agreements, oral or written, respecting the subject matter hereof are hereby
superseded and canceled.
(h) The provisions of Sections 4, 5, 6, 7, 9(i), 9(j), 10, 11, and 12 of this
Agreement shall survive the termination of Executives employment with Wintrust and the expiration
or termination of this Agreement.
12.
Governing Law
. The parties agree that this Agreement shall be construed
and governed by the laws of the State of Illinois, excepting its conflict of laws principles.
Further, the parties acknowledge and specifically agree to the jurisdiction of the courts of the
State of Illinois in the event of any dispute regarding Sections 3, 4, 5, or 6 of this Agreement.
13.
Section 409A
. This Agreement shall be interpreted and construed in a manner that
avoids the imposition of additional taxes and penalties under Section 409A of the Code (409A
Penalties). In the event the terms of this Agreement would subject Executive to 409A Penalties,
Wintrust and Executive shall cooperate diligently to amend the terms of the Agreement to avoid such
409A Penalties, to the extent possible. The payments to Executive pursuant to Section 9 of this
Agreement are intended to be exempt from Section 409A of the Code to the maximum extent possible,
under either the separation pay exemption pursuant to Treasury regulation §1.409A-1(b)(9)(iii) or
as a short-term deferral pursuant to Treasury regulation §1.409A-1(b)(4), and for purposes of the
separation pay exemption, each installment paid to Executive under Section 9 shall be considered a
separate payment. Notwithstanding any other provision in this Agreement, if on the date of
Executives separation from service, within the meaning of Section 409A of the Code (the
Separation Date), (i) Wintrust is a publicly traded corporation and (ii) Executive is a
specified employee, as defined in Section 409A of the Code, then to the extent any amount payable
under this Agreement constitutes the payment of nonqualified deferred compensation, within the
meaning of Section 409A of the Code, that under the terms of this Agreement would be payable prior
to the six- month anniversary of the Separation Date, such payment shall be delayed until the
earlier to occur of (A) the six-month anniversary of the Separation Date or (B) the date of
Executives death. For purposes of determining the timing of payments to Executive pursuant to
Section 9, all references to Executives termination of employment shall mean the Separation Date.
14.
Notice of Termination
. Subject to the provisions of Section 8, in the
event that Wintrust desires to terminate the employment of the Executive during the Term of this
Agreement, Wintrust shall deliver to Executive a written notice of termination, stating whether the
termination constitutes a termination in accordance with Section 9(c), 9(d), 9(e), 9(f), or 9(h).
In the event that Executive determines in good faith that Executive has experienced a Constructive
Termination, Executive shall deliver to Wintrust a written notice stating the circumstances that
constitute such Constructive Termination. In the event that the Executive desires to effect a
voluntary termination of Executives employment in accordance with Section 9(g), Executive shall
deliver a written notice of such voluntary termination to Wintrust.
10
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date
written opposite their signatures.
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WINTRUST FINANCIAL CORPORATION
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DAVID L. STOEHR
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By:
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/s/ David A. Dykstra
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/s/ David L. Stoehr
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Its: Senior EVP and Chief Operating
Officer
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Dated: December 19, 2008
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Dated: December 19, 2008
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11
EXHIBIT A
Advantage National Bank
Barrington Bank & Trust Company, N.A.
Beverly Bank & Trust Company, N.A.
Crystal Lake Bank & Trust Company, N.A.
First Insurance Funding Corporation
Hinsdale Bank & Trust Company
Lake Forest Bank & Trust Company
Libertyville Bank & Trust Company
North Shore Community Bank & Trust Company
Northbrook Bank & Trust Company
Old Plank Trail Community Bank, N.A.
St. Charles Bank & Trust Company
State Bank of the Lakes
Town Bank (Wisconsin)
Tricom, Inc. of Milwaukee
Village Bank & Trust
Wayne Hummer Asset Management Company
Wayne Hummer Investments, LLC
Wayne Hummer Trust Company, N.A.
Wheaton Bank & Trust Company
Wintrust Information Technology Services Company
Wintrust Mortgage Corporation
12
Exhibit 10.7
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (the Agreement) is made by and between
WINTRUST FINANCIAL CORPORATION (Wintrust), a bank holding company, and Richard B. Murphy, an
individual resident in the State of Illinois (Executive) as of December 19, 2008.
WITNESSETH THAT:
WHEREAS, Wintrust is a bank holding company;
WHEREAS, Executive has particular expertise and knowledge concerning the business of Wintrust
and its operations and is a valued member of Wintrusts senior management;
WHEREAS, by virtue of Executives employment with Wintrust, Executive will become acquainted
with certain confidential information regarding the services, customers, methods of doing business,
strategic plans, marketing, and other aspects of the business of Wintrust or its Affiliates; and
WHEREAS, Wintrust and Executive desire to set forth in this Agreement the terms, conditions
and obligations of the parties with respect to such employment effective as of the date first
written above (the Effective Date) and this Agreement is intended by the parties to supersede all
previous agreements and understanding, whether written or oral, concerning such employment.
NOW THEREFORE, in consideration of the covenants and agreements contained herein, of
Executives employment, of the compensation to be paid by Wintrust for Executives services, and of
Wintrusts other undertakings in this Agreement, the parties hereto do hereby agree as follows:
1.
Scope of Employment
. Executive will be employed as Executive Vice President and
Chief Credit Officer of Wintrust and shall perform such duties as may be assigned to Executive by
the Chief Executive Officer and/or the Chief Operating Officer and/or the Board of Directors of
Wintrust in such position. Executive agrees that during Executives employment Executive will be
subject to and abide by the written policies and practices of Wintrust. Subject to Sections 9(e)
and 9(f) Executive also agrees to assume such new or additional positions and responsibilities as
Executive may from time to time be assigned for or on behalf of Wintrust or any Affiliate of
Wintrust. Notwithstanding the foregoing, during the Term (as defined in Section 8 herein) of this
Agreement, Executive will not be required without Executives consent to move Executives principal
business location to another location more than a 35 mile radius from Executives principal
business location. For purposes of this Agreement, the term Affiliate shall include but not be
limited to the entities listed in Exhibit A to this Agreement and any subsidiary of any of such
entities and shall further include any present or future affiliate of any of them as defined by the
rules and regulations of the Federal Reserve Board. In the event Executive shall perform services
for any Affiliate in addition to serving as Executive Vice President and Chief Credit Officer of
Wintrust, the provisions of this Agreement shall also apply to the performance of such services by
Executive on behalf of the Affiliate.
2.
Compensation and Benefits
. Executive will be paid such base salary as may from time
to time be agreed upon between Executive and Wintrust. Executive will be entitled to coverage under
such compensation plans, insurance plans and other fringe benefit plans and programs as may from
time to time be established for employees of Wintrust in accordance with the terms and conditions
of such plans and programs. Executive shall also be eligible to participate in the Wintrust 2007
Stock Incentive Plan or any successor Plan thereto.
3.
Extent of Service
. Executive shall devote Executives entire time, attention and
energies to the business of Wintrust during the Term of this Agreement; but this shall not be
construed as preventing Executive from: (a) investing Executives personal assets in such form or
manner as will not require any services on the part of Executive in the operation or the affairs of
the corporations, partnerships and other entities in which such investments are made and in which
Executives participation is solely that of an investor (subject to any and all rules and
regulations of applicable banking regulators or policies of Wintrust governing transactions with
affiliates and ownership interests in customers); (b) engaging (whether or not during normal
business hours) in any other professional, civic or philanthropic activities provided that
Executives engagement does not result in a violation of
Executives covenants under this Section or Sections 4 and 5 hereof; or (c) accepting appointments
to the boards of directors of other companies provided that the Board of Directors of Wintrust
approves of such appointments and Executives performance of Executives duties on such boards does
not result in a violation of Executives covenants under this Section or Sections 4 or 5 hereof.
4.
Competition
. Other than in connection with Executives performance of Executives
duties hereunder, during the period in which Executive performs services for Wintrust and for a
period of
three years
after termination of Executives employment with Wintrust, regardless of the
reason, Executive shall not directly or indirectly, either alone or in conjunction with any other
person, firm, association, company or corporation:
(a) serve as a principal, owner, senior manager, or in a position comparable to that held by
Executive at any time during Executives employment with Wintrust, for a bank or other financial
institution (or any branch or affiliate thereof) which offers to its customers any of the services
provided by Wintrust or its Affiliates and which operates in the Market Area of Wintrust or any
Affiliate;
(b) solicit or conduct business which involves any of the services provided by Wintrust or its
Affiliates from or with any person, corporation or other entity which was (i) a customer of
Wintrust or any Affiliate with whom Executive had direct or indirect contact while employed by
Wintrust or about whom Executive obtained Confidential Information during the fifteen months prior
to the termination of Executives employment with Wintrust, or (ii) a potential customer with whom
Wintrust or any Affiliate has, at the time of Executives termination of employment with Wintrust,
an outstanding oral or written proposal to provide any of the services provided by Wintrust or its
Affiliates and with whom Executive had direct or indirect contact while employed by Wintrust;
(c) request, advise or directly or indirectly invite any of the existing customers, suppliers
or service providers of Wintrust or any Affiliate to withdraw, curtail or cancel its business with
Wintrust or any Affiliate (other than through mass mailings or general advertisements not
specifically directed at customers of Wintrust or any Affiliate);
(d) hire, solicit, induce or attempt to solicit or induce any employee, consultant, or agent
of Wintrust or any Affiliate (i) to terminate his employment or association with Wintrust or any
Affiliate or (ii) to become employed by or to serve in any capacity by a bank or other financial
institution which operates or is planned to operate in the Market Area of Wintrust or of any
Affiliate; or
(e) in any way participate in planning or opening a bank or other financial institution which
operates or is intended to operate in the Market Area of Wintrust or of any Affiliate.
For the purposes of this Agreement, the Market Area of Wintrust or of an Affiliate shall be
the area within a ten (10) mile radius of the principal office and branches of Wintrust or of any
Affiliate.
Notwithstanding the foregoing, Executive shall not be prevented from: (i) investing or owning
shares of stock of any corporation engaged in any business provided that such shares are regularly
traded on a national securities exchange or in any over-the-counter market; (ii) retaining any
shares of stock in any corporation which Executive owned prior to the date of Executives
employment with Wintrust (subject to any and all rules and regulations of applicable banking
regulators or policies of Wintrust governing transactions with affiliates and ownership interests
in customers); or (iii) investing as a limited partner (without decision-making authority) in any
private equity fund, provided that Executives involvement in such investment is solely that of a
passive investor (subject to any and all rules and regulations of applicable banking regulators or
policies of the Employer governing transactions with affiliates and ownership interests in
customers).
5.
Confidential Information
. Executive acknowledges that, during Executives
employment with Wintrust, Executive has and will obtain access to Confidential Information of and
for Wintrust or its Affiliates. For purposes of this Agreement, Confidential Information shall
mean information not generally known or available without restriction to the trade or industry,
including, without limitation, the following categories of information and documentation: (a)
documentation and information relating to lending customers of Wintrust or any Affiliate,
including, but not limited to, lists of lending clients with their addresses and account numbers,
credit analysis reports and other credit files, outstanding loan amounts, repayment dates and
instructions, information regarding the use of
2
the loan proceeds, and loan maturity and renewal dates; (b) documentation and information relating
to depositors of Wintrust or any Affiliate, including, but not limited to, lists of depositors with
their addresses and account numbers, amounts held on deposit, types of depository products used and
the number of accounts per customer; (c) documentation and information relating to trust customers
of Wintrust or any Affiliate, including, but not limited to, lists of trust customers with their
addresses and account numbers, trust investment management contracts, identity of investment
managers, trust corpus amounts, and grantor and beneficiary information; (d) documentation and
information relating to investment management clients of Wintrust or any Affiliate, including, but
not limited to, lists of investors with their addresses, account numbers and beneficiary
information, investment management contracts, amount of assets held for management, and the nature
of the investment products used; (e) the identity of actual or potential customers of Wintrust or
any Affiliate, including lists of the same; (f) the identity of suppliers and service providers of
Wintrust or any Affiliate, including lists of the same and the material terms of any supply or
service contracts; (g) marketing materials and information regarding the products and services
offered by Wintrust or any Affiliate and the nature and scope of use of such marketing materials
and product information; (h) policy and procedure manuals and other materials used by Wintrust or
any Affiliate in the training and development of its employees; (i) identity and contents of all
computer systems, programs and software utilized by Wintrust or any Affiliate to conduct its
operations and manuals or other instructions for their use; (j) minutes or other summaries of Board
of Directors or other department or committee meetings held by Wintrust or any Affiliate; (k) the
business and strategic growth plans of Wintrust or any Affiliate; and (l) confidential
communication materials provided for shareholders of Wintrust or of any Affiliate. Absent prior
authorization by Wintrust or as required in Executives duties for Wintrust, Executive will not at
any time, directly or indirectly, use, permit the use of, disclose or permit the disclosure to any
third party of any such Confidential Information to which Executive will be provided access. These
obligations apply both during Executives employment with Wintrust and shall continue beyond the
termination of Executives employment and this Agreement.
6.
Inventions
. All discoveries, designs, improvements, ideas, and inventions, whether
patentable or not, relating to (or suggested by or resulting from) products, services, or other
technology of Wintrust or any Affiliate or relating to (or suggested by or resulting from) methods
or processes used or usable in connection with the business of Wintrust or any Affiliate that may
be conceived, developed, or made by Executive during employment with Wintrust (hereinafter
Inventions), either solely or jointly with others, shall automatically become the sole property
of Wintrust or an Affiliate. Executive shall immediately disclose to Wintrust all such Inventions
and shall, without additional compensation, execute all assignments and other documents deemed
necessary to perfect the property rights of Wintrust or any Affiliate therein. These obligations
shall continue beyond the termination of Executives employment with respect to Inventions
conceived, developed, or made by Executive during employment with Wintrust. The provisions of this
Section 6 shall not apply to any Invention for which no equipment, supplies, facility, or trade
secret information of Wintrust or any Affiliate is used by Executive and which is developed
entirely on Executives own time, unless (a) such Invention relates (i) to the business of Wintrust
or an Affiliate or (ii) to the actual or demonstrably anticipated research or development of
Wintrust or an Affiliate, or (b) such Invention results from work performed by Executive for
Wintrust.
7.
Remedies
. Executive acknowledges that the compliance with the terms of this
Agreement is necessary to protect the Confidential Information and goodwill of Wintrust and its
Affiliates and that any breach by Executive of this Agreement will cause continuing and irreparable
injury to Wintrust and its Affiliates for which money damages would not be an adequate remedy.
Executive acknowledges that Affiliates are and are intended to be third party beneficiaries of this
Agreement. Executive acknowledges that Wintrust and any Affiliate shall, in addition to any other
rights or remedies they may have, be entitled to injunctive relief for any breach by Executive of
any part of this Agreement. This Agreement shall not in any way limit the remedies in law or equity
otherwise available to Wintrust and its Affiliates.
8.
Term of Agreement
. Unless terminated sooner as provided in Section 9, the initial
term of Executives employment pursuant to this Agreement (Initial Term) shall be until January
24, 2011. After such Initial Term, this Agreement shall be extended automatically for successive
three-year terms, unless either Executive or Wintrust gives contrary written notice not less than
60 days in advance of the expiration of the Initial Term or any succeeding term of this Agreement
or unless terminated sooner as provided in Section 9. Notwithstanding the foregoing, if at any time
during the Initial Term or any successive three-year term there is a Change in Control of Wintrust
(as defined in Section 9(f)), then upon the first occurrence of such a Change in Control, the
Initial Term or the successive three-year term of this Agreement (whichever is in effect as of the
date of the Change in Control) shall
3
automatically extend for the greater of (a) the amount of time remaining on Executives Initial
Term of employment if such first occurrence of a Change in Control occurs during the Initial Term
or (b) two years from the date of such first occurrence of a Change in Control. In the event that
Executives Initial Term or successive three-year term is extended due to such a Change in Control,
such extension shall further be extended automatically for successive three-year terms, unless
either Executive or Wintrust gives contrary written notice not less than 60 days in advance of the
expiration of the extension of this Agreement or unless terminated sooner as provided in Section 9.
The Initial Term, together with any extension thereof in accordance with this Section 8, shall be
referred to herein as the Term.
9.
Termination of Employment.
(a)
General Provisions
. Executives employment may be terminated by Wintrust at any
time for any reason, with or without cause, and, except as otherwise provided in this Section 9,
any and all of Wintrusts obligations under this Agreement shall terminate, other than Wintrusts
obligation to pay Executive, within 30 days of Executives termination of employment, the full
amount of any earned but unpaid base salary and accrued but unpaid vacation pay earned by Executive
pursuant to this Agreement through and including the date of termination and to observe the terms
and conditions of any plan or benefit arrangement which, by its terms, survives such termination of
Executives employment. The payments to be made under this Section 9(a) shall be made to Executive,
or in the event of Executives death, to such beneficiary as Executive may designate in writing to
Wintrust for that purpose, or if Executive has not so designated, then to the spouse of Executive,
or if none is surviving, then to the estate of Executive. Notwithstanding the foregoing,
termination of employment shall not affect the obligations of Executive that, pursuant to the
express provisions of this Agreement, continue in effect.
(b)
Termination Due to Death
.
(i)
Payment.
If Executive should die during the Term of this Agreement, which event
shall result in the termination of Executives employment, Wintrust shall pay Executive an amount
equal to
three times (3x)
the sum of (A) Executives base annual salary in effect at the time of
Executives death plus (B) an amount equal to Executives Target Cash Bonus for the year in which
Executives death occurs and Executives Target Stock Bonus for the year in which Executives death
occurs, in a lump sum within 30 days following the date of Executives death. For the purposes of
this Agreement, Target Cash Bonus shall mean the target cash bonus for the applicable year, as
approved in writing by Wintrusts Board of Directors or the Compensation Committee or any successor
committee of Wintrusts Board of Directors. For the purposes of this Agreement, Target Stock
Bonus shall mean the target amount of restricted shares for such year that are included in
Executives annual bonus plan, as approved in writing by Wintrusts Board of Directors or the
Compensation Committee or any successor committee of Wintrusts Board of Directors.
(ii)
Reduction of Payment Due To Life Insurance Benefits.
The amount to be paid to
Executive pursuant to this Section 9(b) shall be reduced by the amount of any life insurance
benefit payments paid or payable to Executive from policies of insurance maintained and/or paid for
by Wintrust; provided that in the event the life insurance benefits exceed the amount to be paid to
Executive pursuant to this Section 9(b), Executive shall remain entitled to receive the excess life
insurance payments. The Executive will cooperate with Wintrust in order to enable Wintrust to pay
for a policy or policies of life insurance on the life of the Executive. To the extent that the
Executive is not insurable or a life insurance policy is not reasonably obtainable, then the
payments due under this Section 9(b) shall be reduced by 50%.
(iii)
Beneficiary.
The payments to be made under this Section 9(b) shall be made to
such beneficiary as Executive may designate in writing to Wintrust for this purpose, or if
Executive has not so designated, then to the spouse of Executive, or if none is surviving, then to
the estate of Executive.
(c)
Termination Due to Permanent Disability
.
(i)
Payment.
If Executive should suffer a permanent disability during the Term of this
Agreement, Wintrust shall have the right to terminate Executives employment. In such event,
Wintrust shall pay Executive an amount equal to
three times (3x)
the sum of (A) Executives base
annual salary in effect at the time of Executives permanent disability plus (B) an amount equal to
Executives Target Cash Bonus for the year in which Executives
4
permanent disability occurs and Executives Target Stock Bonus for the year in which Executives
permanent disability occurs. Such amount shall be paid to Executive ratably over a 36-month period
beginning on the first payroll period following such termination and on each payroll period
thereafter during the 36-month period. For the purposes of this Agreement, permanent disability
means any mental or physical illness, disability or incapacity that renders Executive unable to
perform Executives duties hereunder where (x) such permanent disability has been determined to
exist by a physician selected by Wintrust or (y) Wintrust has reasonably determined, based on such
physicians advice, that such disability will continue for 180 days or more within any 365-day
period, of which at least 90 days are consecutive. Executive shall cooperate in all respects with
Wintrust if a question arises as to whether he has become disabled (including, without limitation,
submitting to an examination by a physician or other health care specialist selected by Wintrust
and authorizing such physician or other health care specialist to discuss Executives condition
with Wintrust).
(ii)
Reduction of Payment Due To Long Term Disability Insurance Benefits.
The amount
to be paid to Executive pursuant to this Section 9(c) shall be reduced by the amount of any
long-term disability benefit payments paid or payable to Executive during such payment period from
policies of insurance maintained and/or paid for by Wintrust; provided that in the event the
long-term disability benefits exceed the amount to be paid to Executive pursuant to this Section
9(c), Executive shall remain entitled to receive the excess long-term disability insurance
payments.
(iii)
Continued Participation In Benefit Plans.
In the event of termination due to a
permanent disability, from the termination date through the earlier of (A) the date on which
Executive becomes eligible for coverage under another group health insurance plan with no
pre-existing condition limitation or exclusion or (B) the date on which Executive becomes entitled
to benefits under Medicare, Executive (and any qualified dependents) shall be entitled to group
health insurance coverage. Such coverage shall be provided, at the option of Wintrust, either: (x)
under the Wintrust group health insurance plan for employees (as such plan is then in effect and as
it may be amended at any time and from time to time during the period of coverage) in which
Executive was participating immediately prior to termination, at Wintrusts expense, subject to any
normal employee contributions, if any; or (y) under an individual health insurance policy having
coverage similar to that provided by the Wintrust group health plan for employees (as such plan is
then in effect and as it may be amended at any time and from time to time during the period of
coverage), at Wintrusts expense. Executive shall promptly notify Wintrust if Executive becomes
eligible for coverage under another group health plan with no pre-existing condition limitation or
exclusion or Executive becomes entitled to benefits under Medicare.
(d)
Termination Without Cause
.
(i)
Payment.
In the event Executives employment is terminated without Cause (as such
term is defined in Section 9(h) hereof) by Wintrust during the Term of this Agreement, other than
upon the expiration of the Term of this Agreement, Wintrust shall pay Severance Pay to Executive in
the amount equal to
three times (3x)
the sum of (A) Executives base annual salary in effect at the
time of Executives termination plus (B) an amount equal to Executives Target Cash Bonus for the
year in which such termination occurs and Executives Target Stock Bonus for the year in which such
termination occurs. Severance Pay under this Section 9(d) shall be paid to the Executive ratably
over a 36-month period beginning on the first payroll period following such termination and on each
payroll period thereafter during such Severance Pay period.
(ii)
Company-Paid Health Insurance.
In the event of Executives termination pursuant
to this Section 9(d), from the termination date through the earlier of (A) the date on which
Executive becomes eligible for coverage under another group health insurance plan with no
pre-existing condition limitation or exclusion or (B) the date on which Executive becomes entitled
to benefits under Medicare, Executive (and any qualified dependents) shall be entitled to group
health insurance coverage. Such coverage shall be provided, at the option of Wintrust, either: (x)
under the Wintrust group health insurance plan for employees (as such plan is then in effect and as
it may be amended at any time and from time to time during the period of coverage) in which
Executive was participating immediately prior to termination, at Wintrusts expense, subject to any
normal employee contributions, if any; or (y) under an individual health insurance policy having
coverage similar to that provided by the Wintrust group health plan for employees (as such plan is
then in effect and as it may be amended at any time and from time to time during the period of
coverage), at Wintrusts expense. Executive shall promptly notify Wintrust if Executive
5
becomes eligible for coverage under another group health plan with no pre-existing condition limitation or
exclusion or Executive becomes entitled to benefits under Medicare.
(e)
Constructive Termination
.
(i)
Payment.
If Executive suffers a Constructive Termination during the Term of this
Agreement, other than upon the expiration of the Term of this Agreement, Wintrust shall pay
Severance Pay to Executive in the amounts and at the times described in Section 9(d) hereof. For
the purposes of this Agreement, Constructive Termination means (A) the assignment to Executive of
any duties substantively inconsistent with Executives position (including status, offices, titles
and reporting requirements), authority, duties or responsibilities as contemplated by Section 1, or
any other diminution in such position, authority, duties or responsibilities (including, without
limitation, any diminution occurring solely as a result of Wintrust ceasing to be a publicly traded
entity or becoming a wholly owned subsidiary of another entity) or a material reduction by Wintrust
in the duties and responsibilities of Executive or (B) a reduction by Wintrust of Executives
Adjusted Total Compensation (as hereinafter defined), to (1) less than seventy-five percent (75%)
of the Adjusted Total Compensation of Executive for the twelve-month period ending as of the last
day of the month immediately preceding the month in which the Constructive Termination occurs; or
(2) less than seventy-five percent (75%) of the Executives Adjusted Total Compensation for the
twelve-month period ending as of the last day of the month preceding the Effective Date, whichever
is greater;
provided
,
however
, that the occurrence of any such condition shall not
constitute Constructive Termination unless Executive provides notice to Wintrust of the existence
of such condition not later than 90 days after the initial existence of such condition, and
Wintrust shall have failed to remedy such condition within 30 days after receipt of such notice. A
Constructive Termination does not include termination for Cause as defined in Section 9(h),
termination without Cause as defined in Section 9(d), or termination due to a permanent disability
as defined in Section 9(c).
(ii)
Company-Paid Health Insurance.
In the event of Executives Constructive
Termination pursuant to this Section 9(e), from the termination date through the earlier of (A) the
date on which Executive becomes eligible for coverage under another group health insurance plan
with no pre-existing condition limitation or exclusion, or (B) the date on which Executive becomes
entitled to benefits under Medicare, Executive (and any qualified dependents) shall be entitled to
group health insurance coverage. Such coverage shall be provided, at the option of Wintrust,
either: (x) under the Wintrust group health insurance plan for employees (as such plan is then in
effect and as it may be amended at any time and from time to time during the period of coverage) in
which Executive was participating immediately prior to termination, at Wintrusts expense, subject
to any normal employee contributions, if any; or (y) under an individual health insurance policy
having coverage similar to that provided by the Wintrust group health plan for employees (as such
plan is then in effect and as it may be amended at any time and from time to time during the period
of coverage), at Wintrusts expense. Executive shall promptly notify Wintrust if Executive becomes
eligible for coverage under another group health plan with no pre-existing condition limitation or
exclusion or Executive becomes entitled to benefits under Medicare.
(iii)
Definitions.
(A) For the purposes of this Agreement, Adjusted Total Compensation means the aggregate base
salary earned by the Executive plus the dollar value of all perquisites (i.e. Wintrust provided
car, club dues and supplemental life insurance) as estimated by Wintrust in respect of the
Executive for the relevant twelve month period. Adjusted Total Compensation shall exclude any Cash
Bonus, Stock Bonus, or other bonus payments paid or earned by the Executive.
(B) For the purposes of this Section 9(e), the Executive will not be deemed to have incurred a
reduction by Wintrust of Executives Adjusted Total Compensation if there is a general reduction in
base salaries and/or perquisites applicable to the President, Chief Executive Officer and all
Executive and Senior Vice Presidents of Wintrust.
(f)
Termination Upon Change In Control
.
(i)
Payment.
In the event that within eighteen months after a Change in Control of
Wintrust (as defined below) (A) Executives employment is terminated without Cause (as such term is
defined in Section 9(h) hereof)
6
prior to the expiration of the Term of this Agreement, or (B) Executive suffers a Constructive
Termination prior to the expiration of the Term of this Agreement, Wintrust (or the successor
thereto) shall pay Severance Pay to Executive in the amount that is equivalent to the amount
described in Section 9(d) hereof in a lump sum within thirty (30) days following the date of
Executives termination or Constructive Termination;
provided
,
however
, that if
such Change in Control is not a change in control event, within the meaning of Section 409A of
the Internal Revenue Code of 1986, as amended (the Code), then such Severance Pay shall be paid
ratably over a 36-month period beginning on the first payroll period following such termination and
on each payroll period thereafter during such Severance Pay period.
(ii)
Change In Control.
For the purposes of this Agreement, a Change in Control
shall have the same meaning as provided in Section 12(b) of the Wintrust 2007 Stock Incentive Plan.
(iii)
Gross-Up Payment.
If it is determined that any amount, right or benefit paid or
payable (or otherwise provided or to be provided) to the Executive by Wintrust or any of its
affiliates under this Agreement or any other plan, program or arrangement under which Executive
participates or is a party, other than amounts payable under this Section 9(f)(iii) (collectively,
the Payments), would constitute an excess parachute payment within the meaning of Section 280G
of the Internal Revenue Code, subject to the excise tax imposed by Section 4999 of the Code, or any
interest or penalties with respect to such excise tax (such excise tax, together with any such
interest and penalties, are collectively referred to as the Excise Tax), then Executive shall be
entitled to receive an additional cash payment (a Gross-Up Payment) within 30 days of such
determination equal to an amount such that after payment by Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including any Excise Tax, imposed upon
the Gross-Up Payment, Executive would retain an amount of the Gross-Up Payment equal to the Excise
Tax imposed upon the total Payments. All determinations required to be made under this Section
9(f)(iii), including whether and when a Gross-Up Payment is required, the amount of such Gross-Up
Payment and the assumptions to be utilized in arriving at such determination, shall be made by
Wintrusts independent auditor. The auditor shall promptly provide detailed supporting calculations
to both Wintrust and Executive following any determination that a Gross-Up Payment is necessary.
All fees and expenses of the auditor shall be paid by Wintrust. If no determination by Wintrusts
auditors is made prior to the time a tax return reflecting the total Payments is required to be
filed by Executive, Executive will be entitled to receive a Gross-Up Payment calculated on the
basis of the total Payments reported by Executive in such tax return, within 30 days of the filing
of such tax return. All determinations made by such auditor shall be binding upon Wintrust and
Executive. In all events, if any tax authority determines that a greater Excise Tax should be
imposed upon the total Payments than is determined by Wintrusts independent auditors or reflected
in Executives tax return pursuant to this Section, Executive shall be entitled to receive the full
Gross-Up Payment calculated on the basis of the amount of Excise Tax determined to be payable by
such tax authority from Wintrust within 30 days of such determination. In the event that any tax
authority determines that a lesser Excise Tax should be imposed on the total Payments than is
determined by Wintrusts independent auditors or reflected in Executives tax return pursuant to
this Section, and Wintrust paid a Gross-Up Payment to the Executive in excess of the amount of the
Gross-Up Payment to which he is actually entitled hereunder, then such excess shall be reimbursed
by the Executive to Wintrust within 30 days of such determination.
(iv)
Company-Paid Health Insurance.
In the event Executive becomes entitled to
payments under this Section 9(f), from the termination date through the earlier of (A) the date on
which Executive becomes eligible for coverage under another group health insurance plan with no
pre-existing condition limitation or exclusion, or (B) the date on which Executive becomes entitled
to benefits under Medicare, Executive (and any qualified dependents) shall be entitled to group
health insurance coverage. Such coverage shall be provided, at the option of Wintrust, either: (x)
under the Wintrust group health insurance plan for employees (as such plan is then in effect and as
it may be amended at any time and from time to time during the period of coverage) in which
Executive was participating immediately prior to termination, at Wintrusts expense, subject to any
normal employee contributions, if any; or (y) under an individual health insurance policy having
coverage similar to that provided by the Wintrust group health plan for employees (as such plan is
then in effect and as it may be amended at any time and from time to time during the period of
coverage), at Wintrusts expense. Executive shall promptly notify Wintrust if, prior to the
expiration of the maximum period of COBRA coverage, Executive becomes eligible for coverage under
another group health plan with no pre-existing condition limitation or exclusion or Executive
becomes entitled to benefits under Medicare.
7
(v)
Definitions.
For the purposes of this Section 9(f), the term Constructive
Termination shall have the same meaning as such term is defined in Section 9(e) with the following
modifications:
(A) A Constructive Termination shall be deemed to have occurred if after a Change in Control,
the Executives Adjusted Total Compensation is reduced to less than (1) 100% of the Adjusted Total
Compensation of Executive for the twelve-month period ending as of the last day of the month
immediately preceding the month in which the Constructive Termination occurs or (2) 100% percent of
the Executives Adjusted Total Compensation for the twelve-month period ending as of the last day
of the month preceding the Effective Date, whichever is greater.
(B) A Constructive Termination shall also be deemed to have occurred if after a Change in
Control, Wintrust (or the successor thereto) delivers written notice to Executive that it will
continue to employ Executive but will reject this Agreement (other than due to the expiration of
the Term of this Agreement).
(C) Subsection 9(e)(iii)(B) shall not be applicable to a Constructive Termination following a
Change in Control.
(g)
Voluntary Termination
. Executive may voluntarily terminate employment during the
Term of this Agreement by a delivery to Wintrust of a written notice at least 60 days in advance of
the termination date. If Executive voluntarily terminates employment prior to the expiration of the
Term of this Agreement, any and all of Wintrusts obligations under this Agreement shall terminate
immediately except for Wintrusts obligations contained in Section 9(a) hereof. Notwithstanding the
foregoing, termination of employment shall not affect the obligations of Executive that, pursuant
to the express provisions of this Agreement, continue in effect.
(h)
Termination For Cause
. If Executive is terminated for Cause as determined by the
written resolution of Wintrusts Board of Directors or the Compensation Committee or any successor
committee of the Wintrust Board of Directors, all obligations of Wintrust shall terminate
immediately except for Wintrusts obligations described in Section 9(a) hereof. Notwithstanding the
foregoing, termination of employment shall not affect the obligations of Executive that, pursuant
to the express provisions of this Agreement, continue in effect. For purposes of this Agreement,
termination for Cause means:
(i) Executives failure or refusal, after written notice thereof and after reasonable
opportunity to cure, to perform specific directives approved by a majority of the Wintrust Board of
Directors which are consistent with the scope and nature of Executives duties and responsibilities
as provided in Section 1 of this Agreement;
(ii) Habitual drunkenness or illegal use of drugs which interferes with the performance of
Executives duties and obligations under this Agreement;
(iii) Executives conviction of a felony;
(iv) Any defalcation or acts of gross or willful misconduct of Executive resulting in or
potentially resulting in economic loss to Wintrust or substantial damage to Wintrusts reputation;
(v) Any breach of Executives covenants contained in Sections 4 through 6 hereof;
(vi) A written order requiring the termination of Executive from Executives position with
Wintrust or any Affiliate for which Executive is also providing services by any regulatory agency
or body; or
(vii) Executives engagement, during the performance of Executives duties hereunder, in acts
or omissions constituting fraud, intentional breach of fiduciary obligation, intentional wrongdoing
or malfeasance, or intentional and material violation of applicable banking laws, rules, or
regulations.
(i) Executives right to receive Severance Pay per Sections 9(c) through 9(f) hereof is
contingent upon (i) Executive having executed and delivered to Wintrust a release in such form as
provided by Wintrust and (ii) Executive not violating any of Executives on-going obligations under
this Agreement.
8
(j) The payment of Severance Pay to Executive pursuant to Sections 9(c) through 9(f) hereof
shall be liquidated damages for and in full satisfaction of any and all claims Executive may have
relating to or arising out of Executives employment and termination of employment by Wintrust, any
and all claims Executive may have relating to or arising out of this Agreement and the termination
thereof and any and all claims Executive may have arising under any statute, ordinance or
regulation or under common law. Executive expressly acknowledges and agrees that, except for
whatever claim Executive may have to Severance Pay, Executive shall not have any claim for damages
or other relief of any sort relating to or arising out of Executives employment or termination of
employment by Wintrust or relating to or arising out of this Agreement and the termination thereof.
(k) Upon termination of employment with Wintrust for any reason, Executive shall promptly
deliver to Wintrust all writings, records, data, memoranda, contracts, orders, sales literature,
price lists, client lists, data processing materials, and other documents, whether or not obtained
from Wintrust or any Affiliate, which pertain to or were used by Executive in connection with
Executives employment by Wintrust or which pertain to any Affiliate, including, but not limited
to, Confidential Information, as well as any automobiles, computers or other equipment which were
purchased or leased by Wintrust for Executive.
10.
Resolution of Disputes
. Except as otherwise provided herein, any disputes arising
under or in connection with this Agreement or in any way arising out of, relating to or associated
with the Executives employment with Wintrust or the termination of such employment (Claims),
that Executive may have against Wintrust or against its Affiliates, officers, directors, employees
or agents in their capacity as such or otherwise, or that Wintrust may have against Executive,
shall be resolved by binding arbitration, to be held in Chicago, Illinois, in accordance with the
rules and procedures of the National Rules for the Resolution of Employment Disputes of the
American Arbitration Association (the AAA) and the parties hereby agree to expedite such
arbitration proceedings to the extent permitted by the AAA. Judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof. The Claims covered by this
Agreement include, but are not limited to: claims for wages or other compensation due; claims for
breach of any contract or covenant, express or implied; tort claims; claims for discrimination,
including but not limited to discrimination based on race, sex, sexual orientation, religion,
national origin, age, marital status, handicap, disability or medical condition or harassment on
any of the foregoing bases; claims for benefits, except as excluded in the following paragraph; and
claims for violation of any federal, state or other governmental constitution, statute, ordinance,
regulation, or public policy. The Claims covered by this Agreement do not include claims for
workers compensation benefits or compensation; claims for unemployment compensation benefits;
claims based upon an employee pension or benefit plan, the terms of which contain an arbitration or
other non-judicial resolution procedure, in which case the provisions of such plan shall apply; and
claims made by either Wintrust or the Executive for injunctive and/or other equitable relief
regarding the covenants set forth in Sections 3, 4, 5 and 6 of this Agreement. Each party shall
initially bear their own costs of the arbitration or litigation, except that, if Wintrust is found
to have violated any material terms of this Agreement, Wintrust shall reimburse Executive for the
entire amount of reasonable attorneys fees incurred by Executive as a result of the dispute
hereunder in addition to the payment of any damages awarded to Executive.
11.
General Provisions
.
(a) All provisions of this Agreement are intended to be interpreted and construed in a manner
to make such provisions valid, legal, and enforceable. To the extent that any Section of this
Agreement or any word, phrase, clause, or sentence hereof shall be deemed by any court to be
illegal or unenforceable, such word, clause, phrase, sentence, or Section shall be deemed modified,
restricted, or omitted to the extent necessary to make this Agreement enforceable. Without limiting
the generality of the foregoing, if the scope of any covenant in this Agreement is too broad to
permit enforcement to its full extent, such covenant shall be enforced to the maximum extent
provided by law; and Executive agrees that such scope may be judicially modified accordingly.
(b) This Agreement may be assigned by Wintrust. This Agreement and the covenants set forth
herein shall inure to the benefit of and shall be binding upon the successors and assigns of
Wintrust.
(c) This Agreement may not be assigned by Executive, but shall be binding upon Executives
executors, administrators, heirs, and legal representatives.
9
(d) No waiver by either party of any breach by the other party of any of the obligations,
covenants, or representations under this Agreement shall constitute a waiver of any prior or
subsequent breach.
(e) Where in this Agreement the masculine gender is used, it shall include the feminine if the
sense so requires.
(f) Wintrust may withhold from any payment that it is required to make under this Agreement
amounts sufficient to satisfy applicable withholding requirements under any federal, state, or
local law.
(g) This instrument constitutes the entire agreement of the parties with respect to its
subject matter. This Agreement may not be changed or amended orally but only by an agreement in
writing, signed by the party against whom enforcement of any waiver, change, modification,
extension, or discharge is sought. Any other understandings and agreements, oral or written,
respecting the subject matter hereof are hereby superseded and canceled.
(h) The provisions of Sections 4, 5, 6, 7, 9(i), 9(j), 10, 11, and 12 of this Agreement shall
survive the termination of Executives employment with Wintrust and the expiration or termination
of this Agreement.
12.
Governing Law
. The parties agree that this Agreement shall be construed and
governed by the laws of the State of Illinois, excepting its conflict of laws principles. Further,
the parties acknowledge and specifically agree to the jurisdiction of the courts of the State of
Illinois in the event of any dispute regarding Sections 3, 4, 5, or 6 of this Agreement.
13.
Section 409A
. This Agreement shall be interpreted and construed in a manner that
avoids the imposition of additional taxes and penalties under Section 409A of the Code (409A
Penalties). In the event the terms of this Agreement would subject Executive to 409A Penalties,
Wintrust and Executive shall cooperate diligently to amend the terms of the Agreement to avoid such
409A Penalties, to the extent possible. The payments to Executive pursuant to Section 9 of this
Agreement are intended to be exempt from Section 409A of the Code to the maximum extent possible,
under either the separation pay exemption pursuant to Treasury regulation §1.409A-1(b)(9)(iii) or
as a short-term deferral pursuant to Treasury regulation §1.409A-1(b)(4), and for purposes of the
separation pay exemption, each installment paid to Executive under Section 9 shall be considered a
separate payment. Notwithstanding any other provision in this Agreement, if on the date of
Executives separation from service, within the meaning of Section 409A of the Code (the
Separation Date), (i) Wintrust is a publicly traded corporation and (ii) Executive is a
specified employee, as defined in Section 409A of the Code, then to the extent any amount payable
under this Agreement constitutes the payment of nonqualified deferred compensation, within the
meaning of Section 409A of the Code, that under the terms of this Agreement would be payable prior
to the six-month anniversary of the Separation Date, such payment shall be delayed until the
earlier to occur of (A) the six- month anniversary of the Separation Date or (B) the date of
Executives death. For purposes of determining the timing of payments to Executive pursuant to
Section 9, all references to Executives termination of employment shall mean the Separation Date.
14.
Notice of Termination
. Subject to the provisions of Section 8, in the event that
Wintrust desires to terminate the employment of the Executive during the Term of this Agreement,
Wintrust shall deliver to Executive a written notice of termination, stating whether the
termination constitutes a termination in accordance with Section 9(c), 9(d), 9(e), 9(f), or 9(h).
In the event that Executive determines in good faith that Executive has experienced a Constructive
Termination, Executive shall deliver to Wintrust a written notice stating the circumstances that
constitute such Constructive Termination. In the event that the Executive desires to effect a
voluntary termination of Executives employment in accordance with Section 9(g), Executive shall
deliver a written notice of such voluntary termination to Wintrust.
10
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date
written opposite their signatures.
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WINTRUST FINANCIAL CORPORATION
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RICHARD B. MURPHY
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By:
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/s/ David A. Dykstra
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/s/ Richard B. Murphy
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Its:
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Senior EVP and Chief Operating Officer
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Dated: December 19, 2008
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Dated: December 19, 2008
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11
EXHIBIT A
Advantage National Bank
Barrington Bank & Trust Company, N.A.
Beverly Bank & Trust Company, N.A.
Crystal Lake Bank & Trust Company, N.A.
First Insurance Funding Corporation
Hinsdale Bank & Trust Company
Lake Forest Bank & Trust Company
Libertyville Bank & Trust Company
North Shore Community Bank & Trust Company
Northbrook Bank & Trust Company
Old Plank Trail Community Bank, N.A.
St. Charles Bank & Trust Company
State Bank of the Lakes
Town Bank (Wisconsin)
Tricom, Inc. of Milwaukee
Village Bank & Trust
Wayne Hummer Asset Management Company
Wayne Hummer Investments, LLC
Wayne Hummer Trust Company, N.A.
Wheaton Bank & Trust Company
Wintrust Information Technology Services Company
Wintrust Mortgage Corporation
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Exhibit 10.8
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (the Agreement) is made by and between
Wintrust Financial Corporation (Wintrust), a bank holding
company, and John S. Fleshood, an
individual resident in the State of Illinois (Executive) as of December 19, 2008.
WITNESSETH THAT:
WHEREAS, Wintrust is a bank holding company;
WHEREAS, Executive has particular expertise and knowledge concerning the business of Wintrust
and its operations and is a valued member of Wintrusts senior management;
WHEREAS, by virtue of Executives employment with Wintrust, Executive will become acquainted
with certain confidential information regarding the services, customers, methods of doing business,
strategic plans, marketing, and other aspects of the business of Wintrust or its Affiliates;
WHEREAS, Wintrust and Executive desire to state and set forth in this Agreement the terms,
conditions and obligations of the parties with respect to such employment effective as of the date
first written above (the Effective Date) and this Agreement is intended by the parties to
supersede all previous agreements and understanding, whether written or oral, concerning such
employment.
NOW THEREFORE, in consideration of the covenants and agreements contained herein, of
Executives employment, of the compensation to be paid by Wintrust for Executives services, and of
Wintrusts other undertakings in this Agreement, the parties hereto do hereby agree as follows:
1.
Scope of Employment
. Executive will be employed as Executive Vice President of
Risk Management of Wintrust and shall perform such duties as may be assigned to Executive by the
Chief Executive Officer and the Board of Directors of Wintrust in such position. Executive agrees
that during Executives employment Executive will be subject to and abide by the written policies
and practices of Wintrust. Executive also agrees to assume such new or additional positions and
responsibilities as Executive may from time to time be assigned for or on behalf of Wintrust, or
any Affiliate of Wintrust. Notwithstanding the foregoing, during the Term (as defined in Section 8
herein) of this Agreement, Executive will not be required without Executives consent to move
Executives principal business location to another location more than a 35 mile radius from
Executives principal business location. For purposes of this Agreement, the term Affiliate
shall include but not be limited to the entities listed in Exhibit A to this Agreement and any
subsidiary of any of such entities and shall further include any present or future affiliate of any
of them as defined by the rules and regulations of the Federal Reserve Board. In the event
Executive shall perform services for any Affiliate of Wintrust in addition to serving as Executive
Vice President of Risk Management of Wintrust, the provisions of this
1
Agreement shall also apply to
the performance of such services by Executive on behalf of such any Affiliate.
2.
Compensation and Benefits
. Executive will be paid such base salary as may from
time to time be agreed upon between Executive and Wintrust. Executive will be entitled to coverage
under such compensation plans, insurance plans and other fringe benefit plans and programs as may
from time to time be established for employees of Wintrust and its Affiliates in accordance with
the terms and conditions of such plans and programs. Executive shall also be eligible to
participate in the Wintrust 2007 Stock Incentive Plan or any successor Plan thereto.
3.
Extent of Service
. Executive shall devote Executives entire time, attention and
energies to the business of Wintrust during the Term of this Agreement; but this shall not be
construed as preventing Executive from (a) investing Executives personal assets in such form or
manner as will not require any services on the part of Executive in the operation or the affairs of
the corporations, partnerships and other entities in which such investments are made and in which
Executives participation is solely that of an investor (subject to any and all rules and
regulations of applicable banking regulators or policies of Wintrust governing transactions
with affiliates and ownership interests in customers); (b) engaging (whether or not during normal
business hours) in any other business, professional or civic activities provided that the Board of
Directors of Wintrust approves of such activities and Executives engagement does not result in a
violation of Executives covenants under this Section or Sections 4 or 5 hereof; or (c) accepting
appointments to the boards of directors of other companies provided that the Board of Directors of
Wintrust approves of such appointments and Executives performance of Executives duties on such
boards does not result in a violation of Executives covenants under this Section or Sections 4 and
5 hereof.
4.
Competition
. Other than in connection with Executives performance of Executives
duties hereunder, during the period in which Executive performs services for Wintrust and for a
period of
three years
after termination of Executives employment with Wintrust, regardless of the
reason, Executive shall not directly or indirectly, either alone or in conjunction with any other
person, firm, association, company or corporation:
(a) serve as an owner, principal, senior manager, or in a position comparable to that held by
Executive at any time during Executives employment with Wintrust, for a bank or other financial
institution (or any branch or affiliate thereof) which offers to its customers commercial and
community banking and/or trust and investment services, and which is located within ten miles of
the principal office or any branch office of Wintrust;
(b) solicit or conduct business which involves commercial and community banking and/or trust
and investment services with any person, corporation or other entity which was: (i) a customer of
Wintrust or any other Affiliate of Wintrust with whom Executive had direct or indirect contact
while employed by Wintrust or about whom Executive obtained Confidential Information during the
fifteen months prior to the termination of Executives employment with Wintrust, or (ii) a
potential customer with whom Wintrust, or any Affiliate has, at the time of Executives termination
of employment with Wintrust, an outstanding oral or written proposal to provide commercial and
community banking and/or trust and investment services and with whom Executive had direct or
indirect contact while employed by Wintrust;
2
(c) request, advise or directly or indirectly invite any of the existing customers, suppliers
or service providers of Wintrust or any Affiliate of Wintrust to withdraw, curtail or cancel its
business with Wintrust or any Affiliate of Wintrust, other than through mass mailings or general
advertisements not specifically directed at customers of Wintrust or any Affiliate;
(d) hire, solicit, induce or attempt to solicit or induce any employee, consultant, or agent
of Wintrust or any Affiliate of Wintrust (i) to terminate his employment or association with
Wintrust or (ii) to become employed by or serve in any capacity by a bank or other financial
institution which operates or is planned to operate at any facility which is located within a ten
mile radius of the principal office or any branch office of Wintrust; or
(e) in any way participate in planning or opening a bank or other financial institution which
is located or will be located within a ten mile radius of the principal office or any branch office
of Wintrust. For the purposes of this Agreement, in the event Executives geographic area of
responsibility as specified herein shall change during employment with Wintrust, or as the result
of performing services for any Affiliate of Wintrust, the Executives obligation stated in Sections
4(a), 4(d)(ii) and 4(e) shall apply to a ten mile radius of Executives revised geographic area of
responsibility.
Notwithstanding the foregoing, Executive shall not be prevented from: (i) investing or owning
shares of stock of any corporation engaged in any business provided that such shares are regularly
traded on a national securities exchange or any over-the-counter market; (ii) retaining any shares
of stock in any corporation which Executive owned prior to the date of Executives employment with
Wintrust (subject to any and all rules and regulations of applicable banking regulators or policies
of Wintrust governing transactions with affiliates and ownership interests in customers); or (iii)
investing as a limited partner (without decision-making authority) in any private equity fund,
provided that Executives involvement in such investment is solely that of a passive investor
(subject to any and all rules and regulations of applicable banking regulators or policies of
Wintrust governing transactions with affiliates and ownership interests in customers).
5.
Confidential Information
. Executive acknowledges that, during Executives
employment with Wintrust, Executive has and will obtain access to Confidential Information of and
for Wintrust or its Affiliates. For purposes of this Agreement, Confidential Information shall
mean information not generally known or available without restriction to the trade or industry,
including, without limitation, the following categories of information and documentation: (a)
documentation and information relating to lending customers of Wintrust or any Affiliate,
including, but not limited to, lists of lending clients with their addresses and account numbers,
credit analysis reports and other credit files, outstanding loan amounts, repayment dates and
instructions, information regarding the use of the loan proceeds, and loan maturity and renewal
dates; (b) documentation and information relating to depositors of Wintrust or any Affiliate,
including, but not limited to, lists of depositors with their addresses and account numbers,
amounts held on deposit, types of depository products used and the number of accounts per customer;
(c) documentation and information relating to trust customers of Wintrust or any Affiliate,
including, but not limited to, lists of trust customers with their addresses and account numbers,
trust investment management contracts, identity of investment managers, trust corpus
3
amounts, and
grantor and beneficiary information; (d) documentation and information relating to investment
management clients of Wintrust or any Affiliate, including, but not limited to, lists of investors
with their addresses, account numbers and beneficiary information, investment management contracts,
amount of assets held for management, and the nature of the investment products used; (e) the
identity of actual or potential customers of Wintrust or any Affiliate, including lists of the
same; (f) the identity of suppliers and service providers of Wintrust or any Affiliate, including
lists of the same and the material terms of any supply or service contracts; (g) marketing
materials and information regarding the products and services offered by Wintrust or any Affiliate
and the nature and scope of use of such marketing materials and product information; (h) policy and
procedure manuals and other materials used by Wintrust or any Affiliate in the training and
development of its employees; (i) identity and contents of all computer systems, programs and
software utilized by Wintrust or any Affiliate to conduct its operations and manuals or other
instructions for their use; (j) minutes or other summaries of Board of Directors or other
department or committee meetings held by Wintrust or any Affiliate; (k) the business and strategic
growth plans of Wintrust or any Affiliate; and (l) confidential communication materials provided
for shareholders of Wintrust or any Affiliate. Absent prior authorization by Wintrust or as
required in Executives duties for Wintrust, Executive will not at any time, directly or
indirectly, use, permit the use of, disclose or permit the disclosure to any third party of any
such Confidential Information to which Executive will be provided access. These obligations apply
both during Executives employment with Wintrust and shall continue beyond the termination of
Executives employment and this Agreement.
6.
Inventions
. All discoveries, designs, improvements, ideas, and inventions, whether
patentable or not, relating to (or suggested by or resulting from) products, services, or other
technology of Wintrust or any Affiliate or relating to (or suggested by or resulting from) methods
or processes used or usable in connection with the business of Wintrust or any Affiliate that may
be conceived, developed, or made by Executive during employment with Wintrust (hereinafter
Inventions), either solely or jointly with others, shall automatically become the sole property
of Wintrust or an Affiliate. Executive shall immediately disclose to Wintrust all such Inventions
and shall, without additional compensation, execute all assignments and other documents deemed
necessary to perfect the property rights of Wintrust or any Affiliate therein. These obligations
shall continue beyond the termination of Executives employment with respect to Inventions
conceived, developed, or made by Executive during employment with Wintrust. The provisions of this
Section 6 shall not apply to any Invention for which no equipment, supplies, facility, or trade
secret information of Wintrust or any Affiliate is used by Executive and which is developed
entirely on Executives own time, unless (a) such Invention relates (i) to the business of Wintrust
or an Affiliate or (ii) to the actual or demonstrably anticipated research or development of
Wintrust or an Affiliate, or (b) such Invention results from work performed by Executive for
Wintrust.
7.
Remedies
. Executive acknowledges that compliance with the terms of this Agreement
is necessary to protect the Confidential Information and goodwill of Wintrust and its Affiliates
and that any breach by Executive of this Agreement will cause continuing and irreparable injury to
Wintrust and its Affiliates for which money damages would not be an adequate remedy. Executive
acknowledges that Wintrust and all other Affiliates are and are intended to be third party
beneficiaries of this Agreement. Executive acknowledges that Wintrust and any Affiliate shall, in
addition to any other rights or remedies they may have, be
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entitled to injunctive relief for any
breach by Executive of any part of this Agreement. This Agreement shall not in any way limit the
remedies in law or equity otherwise available to Wintrust and its Affiliates.
8.
Term of Agreement
. Unless terminated sooner as provided in Section 9, the initial
term of Executives employment pursuant to this Agreement (Initial Term) shall be until August
15, 2010. After such Initial Term, this Agreement shall be extended automatically for successive
one-year terms, unless either Executive or Wintrust gives contrary written notice not less than 60
days in advance of the expiration of the Initial Term or any succeeding term of this Agreement or
unless terminated sooner as provided in Section 9. Notwithstanding the foregoing, if at any time
during the Initial Term or any successive one-year term there is a Change in Control of Wintrust
(as defined in Section 9(f)), then upon the first occurrence of such a Change in Control, the
Initial Term or the successive one-year term of this Agreement (whichever is in effect as of the
date of the Change in Control) shall automatically extend for the greater of: (a) the amount of
time remaining on Executives Initial Term of employment if such first occurrence of a Change in
Control occurs during the Initial Term, or (b) one-year from the date of such first occurrence of a
Change in Control. In the event that Executives Initial Term or successive one-year term is
extended due to such a Change in Control, such extension shall further be extended automatically
for successive one-year terms unless either Executive or Wintrust gives contrary written notice not
less than 60 days in advance of the expiration of the extension of this Agreement or unless
terminated sooner as provided in Section 9. The Initial Term, together with any extension thereof
in accordance with this Section 8, shall be referred to herein as the Term.
9.
Termination of Employment.
(a)
General Provisions
. Executives employment may be terminated by Wintrust at any
time for any reason, with or without cause, and, except as otherwise provided in this Section 9,
any and all of Wintrusts obligations under this Agreement shall terminate, other than Wintrusts
obligation to pay Executive, within 30 days of Executives termination of employment, the full
amount of any earned but unpaid base salary and accrued but unpaid vacation pay earned by Executive
pursuant to this Agreement through and including the date of termination and to observe the terms
and conditions of any plan or benefit arrangement which, by its terms, survives such termination of
Executives employment. The payments to be made under this Section 9(a) shall be made to
Executive, or in the event of Executives death, to such beneficiary as Executive may designate in
writing to Wintrust for that purpose, or if Executive has not so designated, then to the spouse of
Executive, or if none is surviving, then to the estate of Executive. Notwithstanding the
foregoing, termination of employment shall not affect the obligations of Executive that, pursuant
to the express provisions of this Agreement, continue in effect.
(b)
Termination Due to Death
.
(i)
Payment.
If Executive should die during the Term of this Agreement, which event
shall result in the termination of Executives employment, Wintrust shall pay Executive an amount
equal to
three times (3x)
the sum of (A) Executives base annual salary in effect at the time of
Executives death plus (B) an amount equal to Executives Target
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Cash Bonus for the year in which
Executives death occurs and Executives Target Stock Bonus for the year in which Executives death
occurs, in a lump sum within 30 days following the date of Executives death. For the purposes of
this Agreement, Target Cash Bonus shall mean the target cash bonus for the applicable year, as
approved in writing by Wintrusts Board of Directors or the Compensation Committee or any successor
committee of Wintrusts Board of Directors. For the purposes of this Agreement, Target Stock
Bonus shall mean the target amount of restricted shares for such year that are included in
Executives annual bonus plan, as approved in writing by Wintrusts Board of Directors or the
Compensation Committee or any successor committee of Wintrusts Board of Directors.
(ii)
Reduction of Payment Due To Life Insurance Benefits.
The amount to be paid to
Executive pursuant to this Section 9(b) shall be reduced by the amount of any life insurance
benefit payments paid or payable to Executive from policies of insurance maintained and/or paid for
by Wintrust; provided that in the event the life insurance benefits exceed the amount to be paid to
Executive pursuant to this Section 9(b), Executive shall remain entitled to receive the excess life
insurance payments. The Executive will cooperate with Wintrust in order to enable Wintrust to pay
for a policy or policies of life insurance on the life of the Executive. To the extent that the
Executive is not insurable or a life insurance policy is not reasonably obtainable, then the
payments due under this Section 9(b) shall be reduced by 50%.
(iii)
Beneficiary.
The payments to be made under this Section 9(b) shall be made to
such beneficiary as Executive may designate in writing to Wintrust for that purpose, or if
Executive has not so designated, then to the spouse of Executive, or if none is surviving, then to
the estate of Executive.
(c)
Termination Due to Permanent Disability
.
(i)
Payment.
If Executive should suffer a permanent disability during the Term of
this Agreement, Wintrust shall have the right to terminate Executives employment. In such event,
Wintrust shall pay Executive an amount equal to
three times (3x)
the sum of (A) Executives base
annual salary in effect at the time of Executives permanent disability plus (B) an amount equal to
Executives Target Cash Bonus for the year in which Executives permanent disability occurs and
Executives Target Stock Bonus for the year in which Executives permanent disability occurs. Such
amount shall be paid to Executive ratably over a 36-month period beginning on the first payroll
period following such termination and on each payroll period thereafter during the 36-month period.
For the purposes of this Agreement, permanent disability means any mental or physical illness,
disability or incapacity that renders Executive unable to perform Executives duties hereunder
where (x) such permanent disability has been determined to exist by a physician selected by
Wintrust or (y) Wintrust has reasonably determined, based on such physicians advice, that such
disability will continue for 180 days or more within any 365-day period, of which at least 90 days
are consecutive. Executive shall cooperate in all respects with Wintrust if a question arises as
to whether he has become disabled (including, without limitation, submitting to an examination by a
physician or other health care specialist selected by Wintrust and authorizing such physician or
other health care specialist to discuss Executives condition with Wintrust).
6
(ii)
Reduction of Payment Due To Long Term Disability Insurance Benefits.
The amount
to be paid to Executive pursuant to this Section 9(c) shall be reduced by the amount of any
long-term disability benefit payments paid or payable to Executive during such payment period from
policies of insurance maintained and/or paid for by Wintrust; provided that in the event the
long-term disability benefits exceed the amount to be paid to Executive pursuant to this Section
9(c), Executive shall remain entitled to receive the excess long-term disability insurance
payments.
(iii)
Continued Participation In Benefit Plans.
In the event of termination due to a
permanent disability, Executives or Executives dependents participation in any medical, health,
accident, disability, death, life insurance or similar plan in which Executive was participating
immediately prior to termination shall continue (to the extent Executive and Executives dependents
are eligible to participate in such plans pursuant to the terms of such plans) for the period in
which payments are being made under this Section 9(c) at Wintrusts expense (subject to any normal
employee contributions, if any), although any continuation of health coverage shall count toward
the COBRA continuation of coverage period.
(d)
Termination Without Cause
.
(i)
Payment.
In the event Executives employment is terminated without Cause (as such
term is defined in Section 9(h) hereof) by Wintrust during the Term of this Agreement, other than
upon the expiration of the Term of this Agreement, Wintrust shall pay Severance Pay to Executive in
the amount equal to
three times (3x)
the sum of (A) Executives base annual salary in effect at the
time of Executives termination plus (B) an amount equal to Executives Target Cash Bonus for the
year in which such termination occurs and Executives Target Stock Bonus for the year in which such
termination occurs. Severance Pay under this Section 9(d) shall be paid ratably over a 36-month
period beginning on the first payroll period following such termination and on each payroll period
thereafter during such Severance Pay period.
(ii)
Company-Paid Health Insurance.
In the event of Executives termination pursuant
to this Section 9(d), from the termination date through the earliest of (A) the expiration of the
maximum period of COBRA coverage, (B) the date on which Executive becomes eligible for coverage
under another group health insurance plan with no pre-existing condition limitation or exclusion,
or (C) the date on which Executive becomes entitled to benefits under Medicare, Executive (and any
qualified dependents) shall be entitled to group health insurance coverage under Wintrusts group
health insurance plan for employees (as such plan is then in effect and as it may be amended at any
time and from time to time during the period of coverage) in which Executive was participating
immediately prior to termination, at Wintrusts expense, subject to any normal employee
contributions, if any. The period during which Executive is being provided with health insurance
under this Agreement shall be credited against Executives period of COBRA coverage, if any.
Executive shall promptly notify Wintrust if, prior to the expiration of the maximum period of COBRA
coverage, Executive becomes eligible for coverage under another group health plan with no
pre-existing condition limitation or exclusion or Executive becomes entitled to benefits under
Medicare.
(e)
Constructive Termination
.
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(i)
Payment.
If Executive suffers a Constructive Termination during the Term of this
Agreement, other than upon the expiration of the Term of this Agreement, Wintrust shall pay
Severance Pay to Executive in the amounts and at the times described in Section 9(d) hereof. For
the purposes of this Agreement, Constructive Termination means (A) a material reduction by
Wintrust in the duties and responsibilities of Executive or (B) a reduction by Wintrust of
Executives Adjusted Total Compensation (as hereinafter defined), to (1) less than seventy-five
percent (75%) of the Adjusted Total Compensation of Executive for the twelve-month period ending as
of the last day of the month immediately preceding the month in which the Constructive Termination
occurs; or (2) less than seventy-five percent (75%) of the Executives Adjusted Total Compensation
for the twelve-month period ending as of the last day of the month preceding the Effective Date,
whichever is greater. A Constructive Termination does not include termination for Cause as defined
in Section 9(h), termination without Cause as defined in Section 9(d), or termination due to a
permanent disability as defined in Section 9(c).
(ii)
Company-Paid Health Insurance.
In the event of Executives termination pursuant
to this Section 9(e), from the termination date through the earliest of (A) the expiration of the
maximum period of COBRA coverage, (B) the date on which Executive becomes eligible for coverage
under another group health insurance plan with no pre-existing condition limitation or exclusion,
or (C) the date on which Executive becomes entitled to benefits under Medicare, Executive (and any
qualified dependents) shall be entitled to group health insurance coverage under Wintrusts group
health insurance plan for employees (as such plan is then in effect and as it may be amended at any
time and from time to time during the period of coverage) in which Executive was participating
immediately prior to termination, at Wintrusts expense, subject to any normal employee
contributions, if any. The period during which Executive is being provided with health insurance
under this Agreement shall be credited against Executives period of COBRA coverage, if any.
Executive shall promptly notify Wintrust if, prior to the expiration of the maximum period of COBRA
coverage, Executive becomes eligible for coverage under another group health plan with no
pre-existing condition limitation or exclusion or Executive becomes entitled to benefits under
Medicare.
(iii)
Definitions.
(A) For the purposes of this Agreement, Adjusted Total Compensation means the aggregate base
salary earned by the Executive plus the dollar value of all perquisites (i.e. Wintrust provided
car, club dues and supplemental life insurance) as estimated by Wintrust in respect of the
Executive for the relevant twelve-month period. Adjusted Total Compensation shall exclude any Cash
Bonus, Stock Bonus, or other bonus payments paid or earned by the Executive.
(B) For the purposes of this Section 9(e), the Executive will not be deemed to have incurred a
reduction by Wintrust of Executives Adjusted Total Compensation if there is a general reduction in
base salaries and/or perquisites applicable to the President, Chief Executive Officer and all Vice
Presidents of Wintrust.
(f)
Termination Upon Change In Control
.
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(i)
Payment.
In the event that within eighteen months after a Change in Control (as
defined below) of Wintrust (A) Executives employment is terminated without Cause (as such term is
defined in Section 9(h) hereof) prior to the expiration of the Term of this Agreement or (B)
Executive suffers a Constructive Termination prior to the expiration of the Term of this Agreement,
Wintrust (or the successor thereto) shall pay Severance Pay to Executive in the amount that is
equivalent to the amount described in Section 9(d) hereof in a lump sum within 30 days following
the date of Executives termination or Constructive Termination; provided, however, that if such
Change in Control is not a change in control event, within the meaning of Section 409A of the
Internal Revenue Code of 1986, as amended (the Code), then such Severance Pay shall be paid
ratably over a 36-month period beginning on the first payroll period following such termination and
on each payroll period thereafter during such Severance Pay period.
(ii)
Change In Control.
For the purposes of this Agreement, a Change in Control
shall have the same meaning as provided in Section 12(b) of the Wintrust 2007 Stock Incentive Plan.
(iii)
Section 280G.
Notwithstanding the foregoing, if the payment required to be paid
under this Section 9(f), when considered either alone or with other payments paid or imputed to the
Executive from Wintrust or an Affiliate that would be deemed excess parachute payments under
Section 280G(b)(1) of the Code, is deemed by Wintrust to be a parachute payment under Section
280G(b)(2) of Code, then the amount of Severance Pay required to be paid under this Section 9(f)
shall be automatically reduced to an amount equal to $1.00 less than three times (3x) the base
amount (as defined in Section 280G(3) of the Code) (the Reduced Amount).
Provided
,
however
, the preceding sentence shall not apply if the sum of (A) the amount of Severance
Pay described in this Section 9(f) less (B) the amount of excise tax payable by the Executive
under Section 4999 of the Code with respect to the amount of such Severance Pay and any other
payments paid or imputed to the Executive from Wintrust or an Affiliate that would be deemed to be
excess parachute payments under Section 280G(b)(1) of the Code, is greater than the Reduced
Amount. The decision of Wintrust (based upon the recommendations of its tax counsel and
accountants) as to the characterization of payments as parachute payments, the value of parachute
payments, the amount of excess parachute payments, and the payment of the Reduced Amount shall be
final.
(iv)
Company-Paid Health Insurance.
In the event Executive becomes entitled to
payments under this Section 9(f), from the termination date through the earliest of (A) the
expiration of the maximum period of COBRA coverage, (B) the date on which Executive becomes
eligible for coverage under another group health insurance plan with no pre-existing condition
limitation or exclusion, or (C) the date on which Executive becomes entitled to benefits under
Medicare, Executive (and any qualified dependents) shall be entitled to group health insurance
coverage under Wintrusts group health insurance plan for employees (as such plan is then in effect
and as it may be amended at any time and from time to time during the period of coverage) in which
Executive was participating immediately prior to termination, at Wintrusts expense, subject to any
normal employee contributions, if any. The period during which Executive is being provided with
health insurance under this Agreement shall be credited against Executives period of COBRA
coverage, if any. Executive shall promptly notify Wintrust if, prior to the expiration of the
maximum period of COBRA coverage, Executive
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becomes eligible for coverage under another group
health plan with no pre-existing condition limitation or exclusion or Executive becomes entitled to
benefits under Medicare.
(v)
Definitions.
For the purposes of this Section 9(f), the term Constructive
Termination shall have the same meaning as such term is defined in Section 9(e) with the following
modifications:
(A) A Constructive Termination shall be deemed to have occurred if after a Change in Control,
the Executives Adjusted Total Compensation is reduced to less than (1) 100% of the Adjusted Total
Compensation of Executive for the twelve month period ending as of the last day of the month
immediately preceding the month in which the Constructive Termination occurs; or (2) 100% percent
of the Executives Adjusted Total Compensation for the twelve-month period ending as of the last
day of the month preceding the Effective Date, whichever is greater.
(B) A Constructive Termination shall also be deemed to have occurred if after a Change in
Control, Wintrust (or the successor thereto) delivers written notice to Executive that it will
continue to employ Executive but will reject this Agreement (other than due to the expiration of
the Term of this Agreement).
(C) Subsection 9(e)(iii)(B) shall not be applicable to a Constructive Termination following a
Change in Control.
(g)
Voluntary Termination
. Executive may voluntarily terminate employment during the
Term of this Agreement by a delivery to Wintrust of a written notice at least 60 days in advance of
the termination date. If Executive voluntarily terminates employment prior to the expiration of
the Term of this Agreement, any and all of Wintrusts obligations under this Agreement shall
terminate immediately except for Wintrusts obligations contained in Section 9(a) hereof.
Notwithstanding the foregoing, termination of employment shall not affect the obligations of
Executive that, pursuant to the express provisions of this Agreement, continue in effect.
(h)
Termination For Cause
. If Executive is terminated for Cause as determined by the
written resolution of Wintrusts Board of Directors or the Compensation Committee or any successor
committee of Wintrusts Board of Directors, all obligations of Wintrust shall terminate immediately
except for Wintrusts obligations described in Section 9(a) hereof. Notwithstanding the foregoing,
termination of employment shall not affect the obligations of Executive that, pursuant to the
express provisions of this Agreement, continue in effect. For purposes of this Agreement,
termination for Cause means:
(i) Executives failure or refusal, after written notice thereof and after reasonable
opportunity to cure, to perform specific directives approved by a majority of Wintrusts Board of
Directors which are consistent with the scope and nature of Executives duties and responsibilities
as provided in Section 1 of this Agreement;
(ii) Habitual drunkenness or illegal use of drugs which interferes with the performance of
Executives duties and obligations under this Agreement;
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(iii) Executives conviction of a felony;
(iv) Any defalcation or acts of gross or willful misconduct of Executive resulting in or
potentially resulting in economic loss to Wintrust or substantial damage to Wintrusts reputation;
(v) Any breach of Executives covenants contained in Sections 4 through 6 hereof;
(vi) A written order requiring termination of Executive from Executives position with
Wintrust by any regulatory agency or body; or
(vii) Executives engagement, during the performance of Executives duties hereunder, in acts
or omissions constituting fraud, intentional breach of fiduciary obligation, intentional wrongdoing
or malfeasance, or intentional and material violation of applicable banking laws, rules, or
regulations.
(i) Executives right to receive Severance Pay per Sections 9(c) through 9(f) hereof is
contingent upon (i) Executive having executed and delivered to Wintrust a release in such form as
provided by Wintrust; and (ii) Executive not violating any of Executives on-going obligations
under this Agreement.
(j) The payment of Severance Pay to Executive pursuant to Sections 9(c) through 9(f) hereof
shall be liquidated damages for and in full satisfaction of any and all claims Executive may have
relating to or arising out of Executives employment and termination of employment by Wintrust, any
and all claims Executive may have relating to or arising out of this Agreement and the termination
thereof and any and all claims Executive may have arising under any statute, ordinance or
regulation or under common law. Executive expressly acknowledges and agrees that, except for
whatever claim Executive may have to Severance Pay, Executive shall not have any claim for damages
or other relief of any sort relating to or arising out of Executives employment or termination of
employment by Wintrust or relating to or arising out of this Agreement and the termination thereof.
(k) Upon termination of employment with Wintrust for any reason, Executive shall promptly
deliver to Wintrust all writings, records, data, memoranda, contracts, orders, sales literature,
price lists, client lists, data processing materials, and other documents, whether or not obtained
from Wintrust or any Affiliate, which pertain to or were used by Executive in connection with
Executives employment by Wintrust or which pertain to Wintrust or any other Affiliate, including,
but not limited to, Confidential Information, as well as any automobiles, computers or other
equipment which were purchased or leased by Wintrust for Executive.
10.
Resolution of Disputes
. Except as otherwise provided herein, any disputes arising
under or in connection with this Agreement or in any way arising out of, relating to or associated
with the Executives employment with Wintrust or the termination of such employment (Claims),
that Executive may have against Wintrust or any Affiliate of Wintrust, or the officers, directors,
employees or agents of Wintrust, or any Affiliate of Wintrust in their capacity as such or
otherwise, or that Wintrust, or any Affiliate of Wintrust may have against Executive,
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shall be
resolved by binding arbitration, to be held in Chicago, Illinois, in accordance with the rules and
procedures of the National Rules for the Resolution of Employment Disputes of the American
Arbitration Association (the AAA) and the parties hereby agree to expedite such arbitration
proceedings to the extent permitted by the AAA. Judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof. The Claims covered by this
Agreement include, but are not limited to, claims for wages or other compensation due; claims for
breach of any contract or covenant, express or implied; tort claims; claims for discrimination,
including but not limited to discrimination based on race, sex, sexual orientation, religion,
national origin, age, marital status, handicap, disability or medical condition or harassment on
any of the foregoing bases; claims for benefits, except as excluded in the following paragraph; and
claims for violation of any federal, state or other governmental constitution, statute, ordinance,
regulation, or public policy. The Claims covered by this Agreement do not include claims for
workers compensation benefits or compensation; claims for unemployment compensation benefits;
claims based upon an employee pension or benefit plan, the terms of which contain an arbitration or
other non-judicial resolution procedure, in which case the provisions of such plan shall apply; and
claims made by either Wintrust or the Executive for injunctive and/or other equitable relief
regarding the covenants set forth in Sections 3, 4, 5 and 6 of this Agreement. Each party shall
initially bear their own costs of the arbitration or litigation, except that, if Wintrust is found
to have violated any material terms of this Agreement, Wintrust shall reimburse Executive for the
entire amount of reasonable attorneys fees incurred by Executive as a result of the dispute
hereunder in addition to the payment of any damages awarded to Executive.
11.
General Provisions
.
(a) All provisions of this Agreement are intended to be interpreted and construed in a manner
to make such provisions valid, legal, and enforceable. To the extent that any Section of this
Agreement or any word, phrase, clause, or sentence hereof shall be deemed by any court to be
illegal or unenforceable, such word, clause, phrase, sentence, or Section shall be deemed
modified, restricted, or omitted to the extent necessary to make this Agreement enforceable.
Without limiting the generality of the foregoing, if the scope of any covenant in this Agreement is
too broad to permit enforcement to its full extent, such covenant shall be enforced to the maximum
extent provided by law; and Executive agrees that such scope may be judicially modified
accordingly.
(b) This Agreement may be assigned by Wintrust. This Agreement and the covenants set forth
herein shall inure to the benefit of and shall be binding upon the successors and assigns of
Wintrust.
(c) This Agreement may not be assigned by Executive, but shall be binding upon Executives
executors, administrators, heirs, and legal representatives.
(d) No waiver by either party of any breach by the other party of any of the obligations,
covenants, or representations under this Agreement shall constitute a waiver of any prior or
subsequent breach.
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(e) Where in this Agreement the masculine gender is used, it shall include the feminine if the
sense so requires.
(f) Wintrust may withhold from any payment that it is required to make under this Agreement
amounts sufficient to satisfy applicable withholding requirements under any federal, state, or
local law.
(g) This instrument constitutes the entire agreement of the parties with respect to its
subject matter. This Agreement may not be changed or amended orally but only by an agreement in
writing, signed by the party against whom enforcement of any waiver, change, modification,
extension, or discharge is sought. Any other understandings and agreements, oral or written,
respecting the subject matter hereof are hereby superseded and canceled.
(h) The provisions of Sections 4, 5, 6, 7, 9(i), 9(j), 10, 11, and 12 of this Agreement shall
survive the termination of Executives employment with Wintrust and the expiration or termination
of this Agreement.
12.
Governing Law
. The parties agree that this Agreement shall be construed and
governed by the laws of the State of Illinois, excepting its conflict of laws principles. Further,
the parties acknowledge and specifically agree to the jurisdiction of the courts of the State of
Illinois in the event of any dispute regarding Sections 3, 4, 5, or 6 of this Agreement.
13.
Section 409A
. This Agreement shall be interpreted and construed in a manner that
avoids the imposition of additional taxes and penalties under Section 409A of the Code (409A
Penalties). In the event the terms of this Agreement would subject Executive to 409A Penalties,
Wintrust and Executive shall cooperate diligently to amend the terms of the Agreement to avoid such
409A Penalties, to the extent possible. The payments to Executive pursuant to Section 9 of this
Agreement are intended to be exempt from Section 409A of the Code to the maximum extent possible,
under either the separation pay exemption pursuant to Treasury regulation §1.409A-1(b)(9)(iii) or
as a short-term deferral pursuant to Treasury regulation §1.409A-1(b)(4), and for purposes of the
separation pay exemption, each installment paid to Executive under Section 9 shall be considered a
separate payment. Notwithstanding any other provision in this Agreement, if on the date of
Executives separation from service, within the meaning of Section 409A of the Code (the
Separation Date), (i) Wintrust is a publicly traded corporation and (ii) Executive is a
specified employee, as defined in Section 409A of the Code, then to the extent any amount payable
under this Agreement constitutes the payment of nonqualified deferred compensation, within the
meaning of Section 409A of the Code, that under the terms of this Agreement would be payable prior
to the six- month anniversary of the Separation Date, such payment shall be delayed until the
earlier to occur of (A) the six-month anniversary of the Separation Date or (B) the date of
Executives death. For purposes of determining the timing of payments to Executive pursuant to
Section 9, all references to Executives termination of employment shall mean the Separation Date.
14.
Notice of Termination
. Subject to the provisions of Section 8, in the event that
Wintrust desires to terminate the employment of the Executive during the Term of this Agreement,
Wintrust shall deliver to Executive a written notice of termination, stating whether the
termination constitutes a termination in accordance with Section 9(c), 9(d), 9(e), 9(f), or 9(h).
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In the event that Executive determines in good faith that Executive has experienced a Constructive
Termination, Executive shall deliver to Wintrust a written notice stating the circumstances that
constitute such Constructive Termination. In the event that the Executive desires to effect a
voluntary termination of Executives employment in accordance with Section 9(g), Executive shall
deliver a written notice of such voluntary termination to Wintrust.
14
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the
date written opposite their signatures.
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WINTRUST FINANCIAL CORPORATION
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JOHN S. FLESHOOD
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By:
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/s/ David A. Dykstra
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/s/ John S. Fleshood
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Its:
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Senior EVP and Chief Operating Officer
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Dated: December 19, 2008
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Dated:
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December 19, 2008
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EXHIBIT A
Advantage National Bank
Barrington Bank & Trust Company, N.A.
Beverly Bank & Trust Company, N.A.
Crystal Lake Bank & Trust Company, N.A.
First Insurance Funding Corporation
Hinsdale Bank & Trust Company
Lake Forest Bank & Trust Company
Libertyville Bank & Trust Company
North Shore Community Bank & Trust Company
Northbrook Bank & Trust Company
Old Plank Trail Community Bank, N.A.
St. Charles Bank & Trust Company
State Bank of the Lakes
Town Bank (Wisconsin)
Tricom, Inc. of Milwaukee
Village Bank & Trust
Wayne Hummer Asset Management Company
Wayne Hummer Investments, LLC
Wayne Hummer Trust Company, N.A.
Wheaton Bank & Trust Company
Wintrust Information Technology Services Company
Wintrust Mortgage Corporation