APPENDIX A
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WINTRUST FINANCIAL CORPORATION
1997 STOCK INCENTIVE PLAN
1. Purpose; Effect on Predecessor Plans. The purpose of the
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Wintrust Financial Corporation 1997 Stock Incentive Plan is to benefit the
Corporation and its Subsidiaries by enabling the Corporation to offer certain
present and future officers, employees, directors and consultants stock-based
incentives and other equity interests in the Corporation, thereby providing them
a stake in the growth of the Corporation and encouraging them to continue in the
service of the Corporation and its Subsidiaries.
This Wintrust Financial Corporation 1997 Stock Incentive Plan is
intended to constitute an amendment, restatement and continuation of the
Predecessor Plans defined herein; provided, however, that to the extent the
application of any provision hereof shall in any manner adversely affect any
Award heretofore made to any Participant under a Predecessor Plan shall not be
applicable to such Award without the written consent of the Participant.
2. Definitions.
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(a) "Award" includes, without limitation, stock options
(including incentive stock options under Section 422 of the Code), stock
appreciation rights, performance share or unit awards, dividend or equivalent
rights, stock awards, restricted share or unit awards, or other awards that are
valued in whole or in part by reference to, or are otherwise based on, the
Corporation's Common Stock ("other Incentive Awards"), all on a stand alone,
combination or tandem basis, as described in or granted under this Plan.
(b) "Award Agreement" means a writing provided by the
Corporation to each Participant setting forth the terms and conditions of each
Award made under this Plan.
(c) "Board" means the Board of Directors of the Corporation.
(d) "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
(e) "Committee" means the Compensation and Nominating
Committee of the Board or such other committee of the Board as may be designated
by the Board from time to time to administer this Plan.
(f) "Common Stock" means the Common Stock, no par value, of
the Corporation.
(g) "Corporation" means Wintrust Financial Corporation, an
Illinois corporation.
(h) "Director" means a director of the Corporation or a
Subsidiary.
(i) "Effective Date" means May 22, 1997, the date of the
approval of the Plan by the shareholders of the Corporation.
(j) "Employee" means an employee of the Corporation or a
Subsidiary.
(k) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(l) "Fair Market Value" means the average of the highest and
the lowest quoted selling prices on the Nasdaq National Market on the relevant
valuation date or, if there were no sales on the valuation date, on the next
preceding date on which such selling prices were recorded; provided, however,
that the Committee may modify the definition of Fair Market Value with respect
to any particular Award. Notwithstanding the foregoing, with respect to Awards
made under the provisions of the Predecessor Plans prior to the Effective Date,
"Fair Market Value" shall mean the average of the highest and lowest price at
which shares of Common Stock were traded during the twenty trading days prior to
the relevant date, as reported by the established market on which the shares are
traded, or such other definition of Fair Market Value applicable to such Award.
(m) "Participant" means an Employee, Director or a consultant,
who has been granted an Award under the Plan, including the Predecessor Plans.
(n) "Plan" means this Wintrust Financial Corporation 1997
Stock Incentive Plan, which includes the Predecessor Plans.
(o) "Plan Year" means a twelve-month period beginning with
January 1 of each year.
(p) "Predecessor Plan" means the Crabtree Capital
Corporation 1987 Stock Option Plan, The Credit Life Companies, Incorporated 1987
Stock Option Plan, Crabtree Capital Corporation 1990 Stock Purchase Plan, First
Premium Services, Incorporated 1992 Stock Option Plan, Lake Forest Bancorp, Inc.
1991 Stock Option Plan, Lake Forest Bancorp, Inc. 1993 Stock Option Plan,
Hinsdale Bancorp, Inc. 1993 Stock Option Plan, North Shore Community Bancorp,
Inc. 1993 Stock Rights Plan, North Shore Community Bancorp, Inc. 1994 Stock
Option Plan, Libertyville Bancorp, Inc. 1995 Stock Option Plan and the Wolfhoya
Investments, Inc. 1995 Stock Option Plan, each a stock option or stock purchase
plan maintained by a predecessor to the Corporation.
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(q) "Subsidiary" means any corporation or other entity,
whether domestic or foreign, in which the Corporation has or obtains, directly
or indirectly, a proprietary interest of at least 50% by reason of stock
ownership or otherwise.
3. Eligibility. Any Employee, Director or consultant selected by
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the Committee is eligible to receive an Award. In addition, the Committee may
select former Employees and Directors who have a consulting arrangement with the
Corporation or a Subsidiary whom the Committee determines have a significant
responsibility for the success and future growth and profitability of the
Corporation.
4. Plan Administration.
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(a) Except as otherwise determined by the Board, the Plan
shall be administered by the Committee. The Committee shall make determinations
with respect to the participation of Employees, Directors and consultants in the
Plan and, except as otherwise required by law or this Plan, the terms of Awards,
including vesting schedules, price, length of relevant performance, restriction
or option period, dividend rights, post-retirement and termination rights,
payment alternatives such as cash, stock, contingent awards or other means of
payment consistent with the purposes of this Plan, and such other terms and
conditions as the Committee deems appropriate.
(b) The Committee, by majority action thereof (whether taken
during a meeting or by written consent), shall have authority to interpret and
construe the provisions of the Plan and the Award Agreements and make
determinations pursuant to any Plan provision or Award Agreement which shall be
final and binding on all persons. To the extent deemed necessary or advisable
for purposes of Section 16 of the Exchange Act or Section 162(m) of the Code, a
member or members of the Committee may recuse himself or themselves from any
action, in which case action taken by the majority of the remaining members
shall constitute action by the Committee. No member of the Committee shall be
liable for any action or determination made in good faith, and the members of
the Committee shall be entitled to indemnification and reimbursement in the
manner provided in the Corporation's Articles of Incorporation and By-Laws, as
may be amended from time to time.
(c) The Committee may designate persons other than its members
to carry out its responsibilities under such conditions or limitations as it may
set, other than its authority with regard to Awards granted to Participants who
are officers or directors of the Corporation for purposes of Section 16 of the
Exchange Act. To the extent deemed necessary or advisable for purposes of
Section 16 of the Exchange Act or otherwise, the Board may act as the Committee
hereunder.
5. Stock Subject to the Provisions of this Plan. The stock subject to
the provisions of this Plan shall be shares of authorized but unissued Common
Stock. Subject to adjustment in accordance with the provisions of Section 10,
the total number of shares of Common Stock which may be issued under the Plan or
with respect to which Awards may be
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granted shall not exceed 4,481,038 shares, including for this purpose the
2,666,038 shares heretofore authorized and available for issuance under the
Predecessors Plans. All shares available for issuance under the Plan may be
issued with respect to incentive stock options. Upon:
(a) a payout of an Award in the form of cash;
(b) a cancellation, termination, expiration, forfeiture, or
lapse for any reason (with the exception of the termination of a tandem Award
upon exercise of the related Award, or the termination of a related Award upon
exercise of the corresponding tandem Award,) of any Award; or
(c) payment of an option price and/or payment of any taxes
arising upon exercise of an option or payout of any Award with previously
acquired shares or by withholding shares which otherwise would be acquired on
exercise or issued upon such payout,
then the number of shares of Common Stock underlying any such Award which were
not issued as a result of any of the foregoing actions shall again be available
for the purposes of Awards under the Plan.
6. Awards under this Plan. As the Board or Committee may
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determine, the following types of Awards may be granted under this Plan on a
stand alone, combination or tandem basis:
(a) Stock Option. A right to buy a specified number of shares
of Common Stock at a fixed exercise price during a specified time, all as the
Committee may determine; provided that the exercise price of any option shall
not be less than 100% of the Fair Market Value of the Common Stock on the date
of grant of such Award. Notwithstanding anything herein to the contrary, no
Awards, other than stock options, may be made to any Director (other than a
Director who is also an Employee at the time of the Award) on or after the
Effective Date.
(b) Incentive Stock Option. An Award in the form of a
stock option which shall comply with the requirements of Section 422 of the Code
or any successor Section of the Code as it may be amended from time to time.
(c) Stock Appreciation Right. A right to receive the excess of
the Fair Market Value of a share of Common Stock on the date the stock
appreciation right is exercised over the Fair Market Value of a share of Common
Stock on the date the stock appreciation right was granted.
(d) Restricted and Performance Shares. A transfer of Common
Stock to a Participant, subject to such restrictions on transfer or other
incidents of ownership, or subject to specified performance standards, for such
periods of time as the Committee may determine.
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(e) Restricted and Performance Share Unit. A fixed or variable
share or dollar denominated unit subject to such conditions of vesting,
performance and time of payment as the Committee may determine, which are valued
at the Committee's discretion in whole or in part by reference to, or otherwise
based on, the Fair Market Value of Common Stock and which may be paid in Common
Stock, cash or a combination of both.
(f) Dividend or Equivalent Right. A right to receive
dividends or their equivalent in value in Common Stock, cash or in a combination
of both with respect to any new or previously existing Award.
(g) Stock Award. An unrestricted transfer of ownership
of Common Stock.
(h) Other Incentive Awards. Other Incentive Awards which are
related to or serve a similar function to those Awards set forth in this Section
6, including, but not limited to, Other Incentive Awards related to the
establishment or acquisition by the Corporation or any Subsidiary of a new or
start-up business or facility.
Notwithstanding the foregoing, the maximum number of shares of Common
Stock which may be made subject to Awards granted under the Plan in any Plan
Year (taking into account any stock option granted in tandem with any stock
appreciation right as an Award with respect to shares subject to the stock
option and any restricted and performance shares or restricted and performance
units as an Award based upon the maximum number of Shares to which the Award
relates) to any single Participant may not exceed 100,000. The Committee may
from time to time, establish performance criteria with respect to an Award. The
performance criteria or standards shall be determined by the Committee in
writing and may be absolute in their terms or measured against or in
relationship to other companies comparably, similarly or otherwise situated and
may be based on or adjusted for any other objective goals, events, or
occurrences established by the Committee, provided that such criteria or
standards relate to one or more of the following: earnings, earnings growth,
revenues, expenses, stock price, market share, charge-offs, loan loss reserves,
reductions in non-performing assets, return on assets, return on equity, or
assets, investment, regulatory compliance, satisfactory internal or external
audits, improvement of financial ratings, achievement of balance sheet or income
statement objectives, extraordinary charges, losses from discontinued
operations, restatements and accounting changes and other unplanned special
charges such as restructuring expenses, acquisition expenses including goodwill,
unplanned stock offerings and strategic loan loss provisions. Such performance
standards may be particular to a line of business, Subsidiary or other unit or
may be based on the performance of the Corporation generally.
7. Award Agreements. Each Award under the Plan shall be
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evidenced by an Award Agreement. Delivery of an Award Agreement to each
Participant shall constitute an agreement, subject to Section 9 hereof, between
the Corporation and the Participant as to the terms and conditions of the Award.
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8. Other Terms and Conditions.
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(a) No Assignment; Limited Transferability of Options. Except
as provided below, no Award granted under the Plan may be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, otherwise then by
will or by the laws of descent and distribution. Notwithstanding the foregoing,
the Committee may, in its discretion, authorize all or a portion of the stock
options (other than incentive stock options) granted to a Participant to be on
terms which permit transfer by such Participant to:
(i) the spouse, children or grandchildren of the
Participant ("Immediate Family Members");
(ii) a trust or trusts for the exclusive benefit
of such Immediate Family Members, or;
(iii) a partnership in which such Immediate Family
Members are the only partners,
provided that:
(A) there may be no consideration for any such
transfer;
(B) the Award Agreement pursuant to which such stock
options are granted expressly provides for transferability in
a manner consistent with this Section 8(a); and
(C) subsequent transfers of transferred options shall
be prohibited except those in accordance with Section 8(b).
Following transfer, any such options shall continue to be subject to
the same terms and conditions as were applicable immediately prior to transfer,
provided that for purposes of Section 8(b) hereof the term "Participant" shall
be deemed to refer to the transferee. The provisions of the stock option
relating to the period of exercisability and expiration of the stock option
shall continue to be applied with respect to the original Participant, and the
stock options shall be exercisable by the transferee only to the extent, and for
the periods, set forth in said stock option.
(b) Beneficiary Designation. Each Participant under the Plan
may name, from time to time, any beneficiary or beneficiaries (who may be named
contingently or successively) to whom any benefit under the Plan is to be paid
in case of his death before he receives any or all of such benefit. Each
designation will revoke all prior designations by the same Participant, shall be
in a form prescribed by the Committee, and will be effective only when filed by
the Participant in writing with the Committee during his lifetime. In the
absence of any such designation, benefits remaining unpaid at the Participant's
death shall be paid to his estate.
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(c) Termination of Employment. The disposition of the grant of
each Award in the event of the retirement, disability, death or other
termination of a Participant's employment shall be as determined by the
Committee and set forth in the Award Agreement. Unless expressly provided
otherwise by the Committee, references to the "Plan" set forth in any agreement
representing an award granted under a Predecessor Plan prior to the Effective
Date shall refer to the terms of such Predecessor Plan as in effect immediately
prior to the Effective Date.
(d) Rights as a Shareholder. A Participant shall have no
rights as a stockholder with respect to shares covered by an Award until the
date the Participant or his nominee, guardian or legal representative is the
holder of record. No adjustment will be made for dividends or other rights for
which the record date is prior to such date.
(e) Payments by Participants. The Committee may determine that
Awards for which a payment is due from a Participant may be payable: (i) in cash
by personal check, bank draft or money order payable to the order of the
Corporation, by money transfers or direct account debits; (ii) through the
delivery or deemed delivery based on attestation to the ownership of previously
acquired shares of Common Stock which have been held for at least six months
with a Fair Market Value equal to the total payment due from the Participant;
(iii) by a combination of the methods described in (i) and (ii) above; or (iv)
by such other methods as the Committee may deem appropriate, including, but not
limited to loans by the Corporation on such terms and conditions as the
Committee shall determine.
(f) Withholding. Except as otherwise provided by the Committee
in the Award Agreement or otherwise (i) the deduction of withholding and any
other taxes required by law will be made from all amounts paid in cash, and (ii)
in the case of the exercise of options or payments of Awards in shares of Common
Stock, the Participant shall be required to pay the amount of any taxes required
to be withheld in cash prior to receipt of such stock, or alternatively, to
elect to have a number of shares the Fair Market Value of which equals the
amount required be withheld deducted from the shares to be received upon such
exercise or payment or deliver such number of previously-acquired shares of
Common Stock which have been held for at least six months.
(g) Deferral. The receipt of payment of cash or delivery of
shares of Common Stock that would otherwise be due to a Participant upon the
exercise of any stock option or under any other Award may be deferred pursuant
to an applicable deferral plan established by the Corporation or a Subsidiary.
The Committee shall establish rules and procedures relating to any such
deferrals and the payment of any tax withholding with respect thereto.
9. Amendments, Modification and Termination. The Board may at any
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time and from time to time, alter, amend, suspend or terminate the Plan in whole
or in part, subject to any requirement of shareholder approval imposed by
applicable law, rule or regulation. No termination, amendment, or modification
of the Plan shall adversely affect in any material way
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any Award previously granted under the Plan, without the written consent of the
Participant holding such Award.
10. Recapitalization. The aggregate number of shares of Common
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Stock as to which Awards may be granted to Participants, the limitations on the
maximum number of shares of Common Stock which may be made subject to Awards
made to a Participant during a Plan Year, the number of shares of Common Stock
covered by each outstanding Award, and the price per share of Common Stock in
each such Award, shall all be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a
subdivision or consolidation of shares or other capital adjustment, or the
payment of a stock dividend or other increase or decrease in such shares,
effected without receipt of consideration by the Corporation, or other change in
corporate or capital structure; provided, however, that any fractional shares
resulting from any such adjustment shall be eliminated. The Committee may also
make the foregoing changes and any other changes, including changes in the
classes of securities available, to the extent it is deemed necessary or
desirable to preserve the intended benefits of the Plan for the Corporation and
the Participants in the event of any other reorganization, recapitalization,
merger, consolidation, spinoff, extraordinary dividend or other distribution or
similar transaction.
11. Rights as Employees, Directors or Consultants. No person shall
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have any claim or right to be granted an Award, and the grant of an Award shall
not be construed as giving a Participant the right to be retained in the employ
of or as a Director of or as a consultant to the Corporation or a Subsidiary.
Further, the Corporation and each Subsidiary expressly reserve the right at any
time to dismiss a Participant free from any liability, or any claim under the
Plan, except as provided herein or in any Award Agreement issued hereunder.
12. Change of Control.
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(a) Notwithstanding anything contained in this Plan or any
Award Summary to the contrary, in the event of a Change of Control, as defined
below, the following shall occur with respect to any and all Awards outstanding
as of such Change of Control:
(i) any and all options and SARs granted
hereunder shall become immediately exercisable, and shall remain
exercisable throughout their entire term;
(ii) any restrictions imposed on restricted
shares shall lapse; and
(iii) unless otherwise specified in a Participant's
Award Agreement at time of grant, the maximum payout opportunities
attainable under all outstanding Awards of performance units,
performance shares and Other Incentive Awards shall be deemed to have
been fully earned for the entire performance period(s) as of the
effective date of the Change of Control. The vesting of all such Awards
shall be accelerated as of the effective date of the Change of Control,
and in full settlement of such Awards, there shall be paid out in cash,
or in the sole discretion of the Committee, shares of Common
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Stock with a Fair Market Value equal to the amount of such cash, to
Participants within thirty (30) days following the effective date of
the Change of Control the maximum of payout opportunities associated
with such outstanding Awards.
(b) A "Change of Control" of the Corporation shall be
deemed to have occurred upon the happening of any of the following events:
(i) The acquisition, other than from the Corporation,
by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 20% or more of either the then outstanding shares of Common Stock of
the Corporation or the combined voting power of the then outstanding
voting securities of the Corporation entitled to vote generally in the
election of directors, but excluding, for this purpose, any such
acquisition by the Corporation or any of its Subsidiaries, or any
employee benefit plan (or related trust) of the Corporation or its
Subsidiaries, or any corporation with respect to which, following such
acquisition, more than 50% of, respectively, the then outstanding
shares of common stock of such corporation and the combined voting
power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of all or substantially all
directors is then beneficially owned, directly or indirectly, by the
individuals and entities who were the beneficial owners, respectively,
of the Common Stock and voting securities of the Corporation
immediately prior to such acquisition in substantially the same
proportion as their ownership, immediately prior to such acquisition,
of the then outstanding shares of Common Stock of the Corporation or
the combined voting power of the then outstanding voting securities of
the Corporation entitled to vote generally in the election of
directors, as the case may be; or
(ii) Individuals who, as of the date hereof,
constitute the Board (as of the date hereof the "Incumbent Board")
cease for any reason to constitute at least a majority of the Board,
provided that any individual becoming a director subsequent to the date
hereof whose election, or nomination for election by the Corporation's
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office is in connection with an actual or threatened
election contest relating to the election of the directors of the
Corporation (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act); or
(iii) Approval by the shareholders of the Corporation
of a reorganization, merger or consolidation of the Corporation, in
each case, with respect to which all or substantially all of the
individuals and entities who were the respective beneficial owners of
the Common Stock and voting securities of the Corporation immediately
prior to such reorganization, merger or consolidation do not, following
such reorganization, merger or consolidation, beneficially own,
directly or indirectly, more
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than 50% of, respectively, the then outstanding shares of Common Stock
and the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such reorganization, merger
or consolidation, or a complete liquidation or dissolution of the
Corporation or of the sale or other disposition of all or substantially
all of the assets of the Corporation.
13. Governing Law. To the extent that federal laws do not otherwise
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control, the Plan and all Award Agreements hereunder shall be construed in
accordance with and governed by the law of the State of Illinois, provided,
however, that in the event the Corporation's state of incorporation shall be
changed, then the law of the new state of incorporation shall govern.
14. Savings Clause. This Plan is intended to comply in all aspects with
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applicable law and regulation, including, with respect to those Employees who
are officers or directors for purposes of Section 16 of the Exchange Act, Rule
16b-3 of the Securities and Exchange Commission. In case any one or more of the
provisions of this Plan shall be held invalid, illegal or unenforceable in any
respect under applicable law and regulation (including Rule 16b-3), the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby and the invalid, illegal or
unenforceable provision shall be deemed null and void; however, to the extent
permissible by law, any provision which could be deemed null and void shall
first be construed, interpreted or revised retroactively to permit this Plan to
be construed in compliance with all applicable laws (including Rule 16b-3) so as
to foster the intent of this Plan.
15. Effective Date and Term. The effective date of this Plan is May 22,
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1997, the date the Plan was approved by the shareholders of the Corporation. The
Plan shall remain in effect until terminated by the Board, provided, however,
that no incentive stock option shall be granted under this Plan on or after May
22, 2007.
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