<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1994
---------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to _____________
Commission file number 0 - 1220
--------------------------------
MARSHALL & ILSLEY CORPORATION
-----------------------------
(Exact name of registrant as specified in its charter)
Wisconsin 39-0968604
--------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
770 North Water Street
Milwaukee, Wisconsin 53202
-------------------- -----
(Address of principal executive offices) (Zip Code)
(414) 765 - 7801
----------------
(Registrant's telephone number, including area code)
None
----
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Outstanding at
Class July 31, 1994
----- ----------------
Common Stock, $1.00 Par Value 95,002,020
Page 1
<PAGE>
PART 1 - FINANCIAL INFORMATION
MARSHALL & ILSLEY CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited)
($000's except share data)
June 30 December 31 June 30
Assets 1994 1993 1993
- - ------ ------------ ------------ ------------
Cash and cash equivalents:
Cash and due from banks $728,451 $667,114 $582,519
Federal funds sold and
security resale agreements 61,208 49,336 68,036
Money market funds 106,675 68,184 57,694
------------ ------------ ------------
Total cash and cash equivalents 896,334 784,634 708,249
Trading securities 2,303 2,852 12,263
Other short-term investments 32,619 50,121 61,684
Investment securities held to maturity,
market value $389,441 ($341,877 December
31, and $1,068,633 June 30, 1993) 389,342 335,400 1,050,483
Investment securities available for sale at
market value June 30, 1994 (amortized
cost December 31 and June 30, 1993).
Market value $2,211,117 and $1,579,516 at
December 31 and June 30, 1993,
respectively. 2,016,777 2,237,158 1,553,813
------------ ------------ ------------
Total investment securities 2,406,119 2,572,558 2,604,296
Loans 8,746,851 8,617,400 8,200,144
Less: Allowance for loan losses 149,371 133,600 129,335
------------ ------------ ------------
Net loans 8,597,480 8,483,800 8,070,809
Premises and equipment, net 287,827 299,801 285,637
Accrued interest and other assets 289,983 292,171 277,133
------------ ------------ ------------
Total Assets $12,512,665 $12,485,937 $12,020,071
============ ============ ============
Liabilities and Shareholders' Equity
- - ------------------------------------
Deposits:
Noninterest bearing $2,063,092 $2,290,233 $2,010,259
Interest bearing 7,570,335 7,881,576 7,717,119
------------ ------------ ------------
Total deposits 9,633,427 10,171,809 9,727,378
Funds purchased and security
repurchase agreements 1,011,509 515,028 584,598
Other short-term borrowings 164,954 201,688 158,103
Long-term borrowings 383,562 234,418 186,781
Accrued expenses and other liabilities 251,524 248,481 244,393
------------ ------------ ------------
Total liabilities 11,444,976 11,371,424 10,901,253
Shareholders' equity:
Series A convertible preferred stock,
$1.00 par value; 348,944 shares issued
(185,314 shares December 31 and June 30,
1993) 349 185 185
Common stock, $1.00 par value; 99,497,416
shares issued (102,073,005 December 31,
and 89,643,790 June 30, 1993) 99,497 102,073 89,644
Additional paid-in capital 200,295 238,130 239,580
Retained earnings 870,338 897,123 838,832
Less: Treasury common stock, at cost;
4,254,535 shares (5,821,786 December 31,
and 2,639,066 June 30, 1993) 88,224 121,106 46,924
Deferred compensation 1,511 1,892 2,499
Net unrealized losses on securities
available for sale, net of related taxes 13,055 - -
------------ ------------ ------------
Total shareholders' equity 1,067,689 1,114,513 1,118,818
------------ ------------ ------------
Total Liabilities and Shareholders' Equity$12,512,665 $12,485,937 $12,020,071
============ ============ ============
See notes to financial statements. Page 2
<PAGE>
MARSHALL & ILSLEY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
($000's except per share data)
Three Months Ended June 30,
-----------------------------
1994 1993
Interest income: ------------ ------------
Loans $165,668 $160,769
Investment securities:
Taxable 26,653 31,405
Exempt from Federal income taxes 4,384 5,271
Trading securities 42 45
Short-term investments 1,792 1,366
------------ ------------
Total interest income 198,539 198,856
Interest expense:
Deposits 61,710 68,442
Short-term borrowings 10,138 4,880
Long-term borrowings 5,980 5,274
------------ ------------
Total interest expense 77,828 78,596
------------ ------------
Net interest income 120,711 120,260
Provision for loan losses 13,001 4,440
------------ ------------
Net interest income after provision for loan losses 107,710 115,820
Other income:
Data processing services 38,612 34,083
Trust services 14,564 15,209
Other customer services 29,949 30,420
Net securities gains (losses) (7,470) 551
Other 7,959 10,059
------------ ------------
Total other income 83,614 90,322
Other expense:
Salaries and employee benefits 82,400 78,303
Net occupancy 9,291 9,206
Equipment 15,150 14,032
Payments to regulatory agencies 5,896 5,751
Processing charges 4,549 4,189
Supplies and printing 3,260 3,282
Professional services 3,729 2,970
Merger / Restructuring 76,562 -
Other 30,123 22,161
------------ ------------
Total other expense 230,960 139,894
------------ ------------
Income (loss) before income taxes (39,636) 66,248
Provision (benefit) for income taxes (2,575) 22,831
------------ ------------
Net income (loss) ($37,061) $43,417
============ ============
Net income (loss) per common share:
Primary ($0.39) $0.42
Fully diluted (0.39) 0.40
Dividends paid per common share 0.15 0.14
Weighted average common shares outstanding:
Primary 95,480 103,707
Fully diluted 95,480 109,630
See notes to financial statements Page 3
<PAGE>
MARSHALL & ILSLEY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
($000's except per share data)
Six Months Ended June 30,
-----------------------------
1994 1993
Interest income: ------------ ------------
Loans $325,739 $319,948
Investment securities:
Taxable 53,106 64,446
Exempt from Federal income taxes 8,498 11,127
Trading securities 86 88
Short-term investments 3,074 3,274
------------ ------------
Total interest income 390,503 398,883
Interest expense:
Deposits 123,306 139,467
Short-term borrowings 16,991 9,915
Long-term borrowings 11,960 10,481
------------ ------------
Total interest expense 152,257 159,863
------------ ------------
Net interest income 238,246 239,020
Provision for loan losses 16,953 8,751
------------ ------------
Net interest income after provision for loan losses 221,293 230,269
Other income:
Data processing services 76,211 64,886
Trust services 30,134 30,692
Other customer services 60,049 59,359
Net securities gains (losses) (6,653) 2,560
Other 16,957 20,117
------------ ------------
Total other income 176,698 177,614
Other expense:
Salaries and employee benefits 166,552 156,141
Net occupancy 19,394 18,703
Equipment 31,019 28,108
Payments to regulatory agencies 11,830 11,611
Processing charges 9,423 8,342
Supplies and printing 6,622 6,570
Professional services 5,791 5,507
Merger / Restructuring 76,562 -
Other 50,423 43,288
Total other expense ------------ ------------
377,616 278,270
Income before income taxes ------------ ------------
Provision for income taxes 20,375 129,613
18,923 44,267
Net income ------------ ------------
$1,452 $85,346
Net income per common share: ============ ============
Primary $0.01 $0.82
Fully Diluted $0.01 $0.79
Dividends paid per common share $0.29 $0.26
Weighted average common shares outstanding:
Primary
Fully diluted 99,707 103,473
99,724 109,638
See notes to financial statements Page 4
<PAGE>
MARSHALL & ILSLEY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
($000's)
Six Months Ended June 30,
-----------------------------
1994 1993
------------ ------------
Net Cash Provided by Operating Activities $181,997 $106,372
Cash Flows From Investing Activities:
Net decrease in securities with maturities of
three months or less 18,550 39,500
Proceeds from sales of securities available
for sale 567,963 13,995
Proceeds from maturities of longer term
securities 560,825 908,441
Purchases of longer term securities (1,005,889) (644,226)
Net increase in loans (237,673) (221,190)
Purchases of assets to be leased (43,531) (43,605)
Principal payments on lease receivables 57,347 51,807
Fixed asset purchases, net (21,795) (32,230)
Other 4,726 3,401
------------ ------------
Net cash provided by (used in) investing
activities (99,477) 75,893
Cash Flows From Financing Activities:
Net decrease in deposits (538,209) (316,691)
Proceeds from issuance of commercial paper 777,733 585,977
Payments for maturity of commercial paper (800,562) (574,655)
Net increase in other short-term
borrowings 488,149 88,805
Proceeds from issuance of long-term debt 173,330 7,319
Payments of long-term debt (19,216) (15,244)
Dividends paid (28,227) (26,684)
Purchases of treasury stock (31,045) (24,749)
Other 7,227 (2,619)
------------ ------------
Net cash provided by (used in) financing
activities 29,180 (278,541)
------------ ------------
Net increase (decrease) in cash and cash
equivalents 111,700 (96,276)
Cash and cash equivalents, beginning of year 784,634 804,525
------------ ------------
Cash and cash equivalents, end of period $896,334 $708,249
============ ============
Supplemental cash flow information:
Cash paid during the period for:
Interest $148,493 $160,155
Income taxes 51,054 46,800
See notes to financial statements Page 5
<PAGE>
MARSHALL & ILSLEY CORPORATION
Notes to Financial Statements
June 30, 1994 & 1993 (Unaudited)
1.The accompanying unaudited consolidated financial statements should be read
in conjunction with Marshall & Ilsley Corporation's ("Corporation") 1993
Annual Report on Form 10-K. The unaudited financial information included in
this report reflects all adjustments (consisting only of normal recurring
accruals) which are necessary for a fair statement of the financial position
and results of operations as of and for the three and six months ended June
30, 1994 and 1993. The results of operations for the three and six months
ended June 30, 1994 and 1993 are not necessarily indicative of results to be
expected for the entire year.
2.The accompanying unaudited consolidated financial statements have been
restated to give effect to the merger of Valley Bancorporation (Valley) with
and into the Corporation. Significant intercompany balances and transactions
between the Corporation and Valley have been eliminated in the combination
and certain adjustments have been made to conform the presentation of
Valley's financial information with that of the Corporation. In accordance
with the terms of the merger, which was consummated May 31, 1994, each share
of Valley Common Stock was converted into the right to receive 1.72 shares of
the Corporation's Common Stock (approximately 35.7 million shares) in a
tax-free reorganization which was accounted for as a pooling of interests.
Net interest income and net income of the previously separate enterprises for
the three months ended March 31, 1994 prior to the consummation of the merger
and a reconciliation of net interest income and net income of the Corporation
as previously reported for the three months and six months ended June 30,
1993 to the amounts for those periods in the accompanying consolidated
financial statements as restated for the pooling of interest are as follows
($000's):
Three Three Six
Months Months Months
Ended Ended Ended
March 31 June 30 June 30
Net interest income: 1994 1993 1993
------------ ------------ ------------
Corporation $74,296 $77,708 $154,282
Valley Bancorporation 43,239 42,552 84,738
------------ ------------ ------------
Combined $117,535 $120,260 $239,020
============ ============ ============
Net income:
Corporation $28,174 $31,933 $62,968
Valley Bancorporation 10,339 11,484 22,378
------------ ------------ ------------
Combined $38,513 $43,417 $85,346
============ ============ ============
3.The Corporation has 5,000,000 shares of preferred stock authorized, of which,
the Board of Directors has designated 3,000,000 shares (500,000 shares in
1993) as Series A convertible, with a $100 value per share for conversion and
liquidation purposes.
4.The Corporation has 160,000,000 (80,000,000 in 1993) shares of its $1.00
par value common stock authorized.
Page 6
<PAGE>
MARSHALL & ILSLEY CORPORATION
Notes to Financial Statements - Concluded
June 30, 1994 & 1993 (Unaudited)
5.The Corporation's loan portfolio consists of the following ($000's):
June 30 December 31 June 30
1994 1993 1993
------------ ------------ ------------
Commercial financial & agricultural $2,714,224 $2,591,930 $2,617,960
Real estate:
Construction 323,324 333,609 266,341
Residential Mortgage 2,197,178 2,164,503 2,103,060
Commercial Mortgage 2,041,005 1,909,229 1,736,822
------------ ------------ ------------
Total real estate 4,561,507 4,407,341 4,106,223
Personal 1,213,537 1,361,571 1,228,012
Lease financing 257,583 256,558 247,949
------------ ------------ ------------
$8,746,851 $8,617,400 $8,200,144
============ ============ ============
6.Effective January 1, 1994, the Corporation adopted Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt and
Equity Securities." Accordingly, investment securities classified as available
for sale at June 30, 1994 are carried at fair value with fair value
adjustments, net of their related income tax effects, reported as a component
of shareholders' equity. Investment securities classified as available for
sale at December 31 and June 30, 1993, are carried at amortized cost in the
accompanying consolidated balance sheets.
Investment securities, by type, held by the Corporation are as follows
($000's):
June 30 December 31 June 30
1994 1993 1993
------------ ------------ ------------
Investment securities held to maturity:
U.S. treasury and government agencies $61,320 - $585,679
State and Political Subdivisions 323,131 $326,154 375,788
Other 4,891 9,246 89,016
------------ ------------ ------------
Investment securities held to maturity 389,342 335,400 1,050,483
------------ ------------ ------------
Investment securities available for sale:
U.S. treasury and government agencies 1,921,242 2,139,867 1,509,813
State and Political Subdivisions 250 - -
Other 95,285 97,291 44,000
------------ ------------ ------------
Investment securities available for sale 2,016,777 2,237,158 1,553,813
------------ ------------ ------------
Total Investment Securities $2,406,119 $2,572,558 $2,604,296
============ ============ ============
Page 7
<PAGE>
MARSHALL & ILSLEY CORPORATION
CONSOLIDATED AVERAGE BALANCE SHEETS (Unaudited)
($000's)
Three Months Ended June 30,
-----------------------------
1994 1993
------------ ------------
Assets
- - ------
Cash and due from banks $616,759 $600,666
Short-term investments 184,303 173,761
Trading securities 3,814 4,405
Investment securities:
Taxable 2,131,093 2,218,761
Tax-exempt 358,442 418,799
------------ ------------
Total investment securities 2,489,535 2,637,560
Loans:
Commercial 2,715,109 2,622,726
Real estate 4,500,855 4,170,071
Personal 1,211,482 1,078,651
Lease financing 256,655 246,203
------------ ------------
8,684,101 8,117,651
Less: Allowance for loan losses 139,989 129,073
------------ ------------
Total loans 8,544,112 7,988,578
Premises and equipment, net 290,743 276,231
Accrued interest and other assets 297,445 268,334
------------ ------------
Total Assets $12,426,711 $11,949,535
============ ============
Liabilities and Shareholders' Equity
- - ------------------------------------
Deposits:
Noninterest bearing $2,036,599 $1,938,127
Interest bearing 7,672,608 7,727,857
------------ ------------
Total deposits 9,709,207 9,665,984
Funds purchased and security repurchase
agreements 887,636 596,628
Other short-term borrowings 130,182 93,764
Long-term borrowings 348,715 237,846
Accrued expenses and other liabilities 234,113 221,780
------------ ------------
Total liabilities 11,309,853 10,816,002
Shareholders' equity 1,116,858 1,133,533
------------ ------------
Total Liabilities and Shareholders' Equity $12,426,711 $11,949,535
============ ============
Page 8
<PAGE>
MARSHALL & ILSLEY CORPORATION
CONSOLIDATED AVERAGE BALANCE SHEETS (Unaudited)
($000's)
Six Months Ended June 30,
-----------------------------
1994 1993
------------ ------------
Assets
- - ------
Cash and due from banks $625,045 $592,406
Short-term investments 170,034 201,307
Trading securities 3,866 4,385
Investment securities:
Taxable 2,172,571 2,243,835
Tax-exempt 359,591 423,429
------------ ------------
2,532,162 2,667,264
Total investment securities
Loans:
Commercial 2,666,138 2,583,960
Real estate 4,497,497 4,121,405
Personal 1,207,613 1,068,346
Lease financing 255,589 244,941
------------ ------------
8,626,837 8,018,652
Less: Allowance for loan losses 137,905 127,584
------------ ------------
Total loans 8,488,932 7,891,068
Premises and equipment, net 289,809 274,956
Accrued interest and other assets 291,514 267,269
------------ ------------
Total Assets $12,401,362 $11,898,655
============ ============
Liabilities and Shareholders' Equity
- - ------------------------------------
Deposits:
Noninterest bearing $2,038,855 $1,890,895
Interest bearing 7,721,772 7,738,560
------------ ------------
Total deposits 9,760,627 9,629,455
Funds purchased and security repurchase
agreements 844,557 606,972
Other short-term borrowings 121,093 83,594
Long-term borrowings 322,235 238,608
Accrued expenses and other liabilities 226,590 221,023
------------ ------------
Total liabilities 11,275,102 10,779,652
Shareholders' equity 1,126,260 1,119,003
------------ ------------
Total Liabilities and Shareholders' Equity $12,401,362 $11,898,655
============ ============
Page 9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1994 AND 1993
__________________________________________
For the second quarter of 1994, the Corporation recorded a net loss of $37.1
million compared to net income $43.4 million for the same period a year ago.
Fully diluted net loss per share amounted to $.39 for the second quarter of 1994
compared to fully diluted net income per share of $.40 for the second quarter
of 1993.
The second quarter loss is attributable to a one-time merger/restructuring
charge and an increase in loan loss provision associated with the May 31, 1994
acquisition of Valley Bancorporation (Valley). In addition, security losses and
other miscellaneous charges were taken in the quarter.
The following table summarizes the unusual items reported in the second quarter
of 1994.
Per Share Decrease
_______________________
After-Tax
Charge Primary Fully Diluted
_____________ _______ _____________
Recognition of $76.6 million
merger/restructuring charge $59.5 million $.62 $.62
Additional loan loss
provisions of $8.9 million 5.8 million .06 .06
Security losses of $7.3 million 4.6 million .05 .05
Other miscellaneous charges
of $8.5 million 6.2 million .07 .07
_____________ ____ ____
$76.1 million $.80 $.80
============= ==== ====
Net income for the second quarter of 1994 would have been $39.0 million and
fully diluted earnings per share would have amounted to $.38 per share had the
above charges not been recorded.
The table below summarizes the merger/restructuring charge recorded at June 30,
1994 (amounts in millions):
MERGER/RESTRUCTURING CHARGES
Executive Contracts $26.4
Employee Severance Costs 14.9
Computer and Software 12.7
System Conversion Costs 2.9
Facilities and Equipment 4.2
Investment Advisors 3.4
Accounting, Legal and
Other Professional Fees 3.9
Other 8.2
______
$76.6
======
<PAGE>
The executive contract accrual of $26.4 million represents the present value of
the amounts due to certain Valley executives under their former employment
contracts. As of June 30, 1994, $10.3 million had been paid and the remaining
liability is expected to be paid beginning in 1997.
As part of the on-going merger and restructuring, the Corporation anticipates
a reduction in its work force. As of June 30, the Corporation accrued the
severance costs for all employees who have been formally notified of job loss
and the costs associated with other identified employees who have not been
notified. The severance policy, which has been distributed to all employees,
generally provides for a minimum of 2 weeks of severance payments up to a
maximum of 52 weeks depending upon years of service and job classification with
certain adjustments if subsequent employment is found during the severance
period.
The computer and software charge represents the write-off of Valley's
capitalized costs associated with its own internal data processing function.
The systems conversion cost estimate of $2.9 million is the cost associated with
the one time conversion and standardization of Valley's records to M&I's data
processing systems.
As part of the merger, duplicative branch offices and other corporate facilities
will be sold or leases terminated. In addition, certain excess furniture and
equipment will also be disposed of. The estimated loss on lease terminations
and equipment disposals amounted to $4.2 million. The estimated net gain on
sale of excess facilities, which is not considered to be significant, will be
recorded when realized.
Investment advisor, accounting, legal and other professional fees present
amounts incurred to consummate the mergers.
Other miscellaneous charges amounted to $8.2 million and included a $3.2 million
charge associated with the curtailment of Valley's defined benefit pension plan
at May 31, 1994. Beginning in June, 1994 former Valley employees became
eligible to participate in M&I's defined contribution pension plan. Also
included were costs to eliminate duplicate customer accounts, unusable
capitalized inventory costs and write-offs of other costs not deemed to be
realizable due to the merger.
As part of the approval of the merger, certain branch divestures were required
by the regulatory agencies. These required branch divestures with deposits of
approximately $270 million along with the resulting approximate net gain of $24
million, will be recorded when realized during the second half of 1994. It is
not anticipated that these sales will have a material impact on the financial
condition of the company.
While no assurances can be given, the estimated annual cost savings to be
achieved by the combined companies beginning in 1995 is estimated to be
approximately $36 million. These cost savings are the result of operating
efficiencies and the elimination of duplicate functions due to affiliate mergers
and economies of scale. Management presently estimates that approximately 40%
of the annual cost savings will be achieved in the second half of this year.
The Corporation also increased the loan loss provision at several former Valley
banks in order to raise their reserve levels to be more in line with the M&I
Banks. The additional provision of $8.9 million increased Valley's allowance
for loan loss to nonperforming loan ratio from 164% to 195% at June 30. It is
not anticipated that this one-time increase in provision levels will result in
<PAGE>
lower provision levels in the future.
Security losses of $7.3 million of the reported $7.5 million were realized in
the second quarter of 1994 to reposition our balance sheet in light of current
interest rates. Approximately $568 million of securities with a remaining
average maturity of one year were sold. The proceeds were reinvested in higher
yielding securities with an average maturity of less than two years. The
securities sold were classified as available for sale, therefore, the resulting
realized loss has no impact on shareholders' equity.
Other miscellaneous charges included a goodwill asset adjustment of $2.7
million, other real estate write-downs of $1.8 million and other accrual related
adjustments such as professional fees not resulting from the
merger/restructuring.
PROVISION FOR LOAN LOSSES AND CREDIT QUALITY
____________________________________________
Excluding the above noted additional provision for certain Valley banks of $8.9
million, the provision for loan losses would have amounted to $4.1 million in
the second quarter of 1994 compared to $4.0 million in the first quarter of 1994
and $4.4 million in the second quarter of 1993. The adjusted 1994 provision
level reflects the relatively stable trend in nonperforming assets since year-
end 1993 and net charge-offs in relation to the allowance for loan losses.
Nonperforming assets at June 30, 1994 were $69.8 million, relatively unchanged
from the first quarter of 1994. Nonaccrual loans, the largest component of
nonperforming assets, increased $4.8 million or 10.8% since March 31, 1994
while other real estate owned (OREO) declined by $4.3 million. All major
categories of nonaccrual loans, other than personal loans, increased in the
second quarter compared to the prior quarter. The decline in OREO was due to
the sales of properties during the quarter and write-downs.
Net charge-offs in the second quarter of 1994 amounted to $.8 million or .04%
of average loans annualized. While slightly higher than the first quarter of
1994, the amount is below that reported in any quarter in 1993.
The allowance for loan losses was $149.4 million or 1.71% of total loans at June
30, 1994 compared to $137.2 million or 1.59% of total loans at March 31, 1994
and $129.3 million or 1.58% of total loans at June 30, 1993. The coverage of
the allowance for loan losses to nonperforming loans increased from 242% at
March 31, 1994 to 244% at the end of the current quarter.
<PAGE>
The following tables present certain credit quality information and statistics
at June 30, 1994 as well as the previous four quarters.
CONSOLIDATED CREDIT QUALITY INFORMATION
($000's)
1994 1993
_________________ ___________________________
Second First Fourth Third Second
Quarter Quarter Quarter Quarter Quarter
_________________ ___________________________
NONPERFORMING ASSETS
Nonaccrual $ 49,384 $ 44,571 $ 44,186 $ 49,965 $ 55,467
Renegotiated 4,328 4,019 4,263 5,024 5,162
Past Due 90 Days or More 7,613 8,028 7,906 7,013 7,145
_________________ __________________________
Total Nonperforming Loans 61,325 56,618 56,355 62,002 67,774
Other Real Estate Owned 8,494 12,813 12,928 14,533 15,811
_________________ __________________________
Total Nonperforming Assets $ 69,819 $ 69,431 $ 69,283 $ 76,535 $ 83,585
================= ==========================
ALLOWANCE FOR LOAN LOSSES $149,371 $137,174 $133,600 $131,662 $129,335
================= ==========================
NONACCRUAL LOANS BY TYPE
Commercial
Commercial, Financial &
Agricultural $ 11,410 $ 9,856 $ 10,055 $ 14,404 $ 22,715
Lease Financing Receivables 2,106 2,756 2,868 3,524 2,816
_________________ __________________________
Total Commercial 13,516 12,612 12,923 17,928 25,531
Real Estate
Construction and Land
Development 3,135 493 538 169 --
Commercial Mortgage 20,188 19,357 18,433 18,656 16,473
Residential Mortgage 10,062 9,492 9,631 10,409 10,356
_________________ __________________________
Total Real Estate 33,385 29,342 28,602 29,234 26,829
Personal 2,483 2,617 2,661 2,803 3,107
_________________ __________________________
Total Nonaccrual Loans $ 49,384 $ 44,571 $ 44,186 $ 49,965 $ 55,467
================== ==========================
<PAGE>
1994 1993
_________________ ___________________________
Second First Fourth Third Second
Quarter Quarter Quarter Quarter Quarter
_________________ ___________________________
NET LOAN AND LEASE
CHARGE-OFFS
Loan and Lease Charge-offs $ 3,543 $ 2,287 $ 6,404 $ 3,613 $ 4,310
Loan and Lease Recoveries 2,739 1,909 2,292 1,540 2,027
_________________ __________________________
Net Loan and Lease
Charge-offs $ 804 $ 378 $ 4,112 $ 2,073 $ 2,283
================= ==========================
CONSOLIDATED STATISTICS
Net Charge-offs
to Average Loans
Annualized 0.04% 0.02% 0.19% 0.10% 0.11%
Total Nonperforming Loans
to Total Loans 0.70 0.66 0.65 0.74 0.83
Total Nonperforming Assets
to Total Loans and Other
Real Estate Owned 0.80 0.80 0.80 0.91 1.02
Allowance for Loan Losses
to Total Loans 1.71 1.59 1.55 1.57 1.58
Allowance for Loan Losses
to Nonperforming Loans 244 242 237 212 191
NET INTEREST INCOME
___________________
Net interest income in the second quarter of 1994 was $120.7 million compared
to $120.3 million for the same period one year ago, a slight increase of $.4
million. The benefit of the increase in the average volume of earning assets,
primarily loans, together with the benefit of the decline in cost of interest
bearing liabilities offset the decline in yields on earning assets and the
increased volume of both short-term and long-term borrowings fueled in part by
the slow growth in deposits.
In the second quarter of 1994, average earning assets increased $428.4 million
or 3.9% compared to the same period one year ago. Average loan growth of $566.5
million or 7.0% was offset, in part, by a decline in average securities of
$148.0 million.
<PAGE>
The growth and composition of the Corporation's quarterly average loan portfolio
for the current quarter and previous four quarters are reflected below (amounts
in millions):
1994 1993
_________________ ____________________________________
Annual
Second First Fourth Third Second Growth
Quarter Quarter Quarter Quarter Quarter PCT
_________________ ____________________________________
Commercial Loans $ 2,715 $ 2,616 $ 2,558 $ 2,566 $ 2,623 3.5%
Real Estate Loans
Construction 321 331 321 282 255 25.6
Commercial
Mortgages 2,031 2,016 1,939 1,865 1,780 14.1
Residential
Mortgages 2,149 2,147 2,190 2,152 2,135 0.7
________________ __________________________________
Total Real
Estate Loans 4,501 4,494 4,450 4,299 4,170 7.9
Personal Loans
Personal Loans 952 948 953 914 878 8.5
Student Loans 259 256 228 206 201 29.0
________________ __________________________________
Total Personal
Loans 1,211 1,204 1,181 1,120 1,079 12.3
Lease Financing
Receivables 257 255 255 250 246 4.2
________________ __________________________________
Total Consolidated
Average Loans $ 8,684 $ 8,569 $ 8,444 $ 8,235 $ 8,118 7.0%
================ ==================================
Each major category of loans increased since the second quarter of 1993. The
Corporation's average commercial portfolio grew 3.5% while the portfolio of
average loans to individuals increased 8.5% reflecting continued confidence by
both the business and consumer sectors since last year.
Average interest bearing liabilities grew $383 million or 4.4% for the three
months ended June 30, 1994, compared to the same period in 1993. The increase
in average noninterest bearing deposits of $98 million or 5.1% was partially
offset by a $55 million or .7% decline in interest bearing deposits. Average
short-term borrowings increased $327.4 million or 47.4% in response to the slow
growth in total average deposits.
Average long-term borrowings increased $111 million or 46.6% due primarily to
the $100 million ten year 6.375% subordinated notes which were issued in July
1993 for general corporate purposes including financing the common share
repurchase program announced in April 1993. Since the announcement, the
Corporation has cumulatively repurchased 6.4 million common shares at an
aggregate cost of approximately $145.8 million through June 30, 1994. The
estimated impact of the program in the second quarter of 1994 compared to the
same period last year was to increase interest expense by approximately $1.9
million.
<PAGE>
During the second quarter of 1994, the Corporation's banking subsidiaries began
offering Bank Notes. The Bank Notes provide an additional funding source along
with those traditionally available to our banking affiliates. As of June 30,
the total outstanding amounted to $139.7 million. These notes were issued for
a two-year term and have floating interest rates.
The composition of the Corporation's quarterly average deposits for the current
quarter and prior year's quarters are as follows (amounts in millions):
1994 1993
_________________ ____________________________________
Annual
Second First Fourth Third Second Growth
Quarter Quarter Quarter Quarter Quarter PCT
_________________ ____________________________________
Noninterest
Bearing
Commercial $ 1,271 $ 1,270 $ 1,352 $ 1,270 $ 1,227 3.6%
Personal 444 426 424 405 402 10.4
Other 322 345 395 360 309 4.1
________________ __________________________________
Total Noninterest
Bearing Deposits 2,037 2,041 2,171 2,035 1,938 5.1
Interest Bearing
Savings & NOW 2,477 2,455 2,454 2,377 2,291 8.1
Money Market 1,481 1,523 1,574 1,534 1,507 (1.7)
Other CDs & Time
Deposits 3,233 3,313 3,369 3,422 3,503 (7.7)
CDs Greater than
$100 481 478 480 419 427 12.4
________________ __________________________________
Total Interest
Bearing Deposits 7,672 7,769 7,877 7,752 7,728 (0.7)
________________ __________________________________
Total Consolidated
Average Deposits $ 9,709 $ 9,810 $10,048 $ 9,787 $ 9,666 0.4%
================ ==================================
The overall interest margin was positively impacted by the growth in average
earning assets. The decline in yields on average interest earning assets of 31
basis points offset, in part, by the decrease in cost of average interest
bearing liabilities of 19 basis points, reduced the interest margin by $4.2
million this quarter compared to the same period last year. This decrease was
mitigated by the increase in the average volume of earning assets which provided
a positive impact on the net margin of $4.6 million. While the margin as a
percent of average earning assets declined in the second quarter of 1994
compared to the same period a year ago, the margin is up slightly from the 4.31%
yield in the first quarter of 1994. The security losses realized in the second
quarter should provide a positive impact on the margin over the next eighteen
months.
At the present time, the Corporation is not involved in any derivative product
arrangements.
<PAGE>
Yield & Cost Analysis 1994 1993
($000's) ____________________________ _____________________________
Average Average
Average Yield or Average Yield or
Balance Interest Cost Balance Interest Cost
____________________________ _____________________________
Loans $ 8,684,101 $166,215 7.68% $ 8,117,651 $161,228 7.97%
Investment
Securities:
Taxable 2,131,093 26,653 5.02 2,218,761 31,405 5.68
Tax Exempt 358,442 6,144 6.88 418,799 7,802 7.47
Other Short-term
Investments 188,117 1,840 3.92 178,166 1,413 3.18
____________________________ ____________________________
Total Interest
Earning Assets $11,361,753 $200,852 7.09% $10,933,377 $201,848 7.40%
============================ ============================
Money Market Savings
$ 1,480,798 $ 9,265 2.51% $ 1,506,555 $ 9,851 2.62%
Regular Savings
& NOW 2,476,670 12,956 2.10 2,290,553 13,183 2.31
Other CDs & Time
Deposits 3,234,606 34,792 4.31 3,503,358 40,976 4.69
CD's Greater than
$100 480,534 4,697 3.92 427,391 4,432 4.16
____________________________ ____________________________
Total Interest
Bearing Deposits 7,672,608 61,710 3.23 7,727,857 68,442 3.55
Short-term
Borrowings 1,017,818 10,138 4.00 690,392 4,880 2.84
Long-term
Borrowings 348,715 5,980 6.88 237,846 5,274 8.89
____________________________ ____________________________
Total Interest Bearing
Liabilities $ 9,039,141 $ 77,828 3.45% $ 8,656,095 $ 78,596 3.64%
============================ ============================
Net Interest Margin
(FTE) as a Percent
of Average Earning
Assets $123,024 4.34% $123,252 4.52%
================ ================
OTHER INCOME
____________
Total other income was $83.6 million for the second quarter of 1994, a decline
of $6.7 million or 7.4% over the $90.3 million earned in the second quarter of
1993. The decline was due to security losses of $7.5 million realized in the
second quarter of 1994 compared to $0.6 million of gains taken in the same
period last year. Fees from data processing services grew $4.5 million or 13.3%
and amounted to $38.6 million this quarter compared to $34.1 million for the
same period last year. During the second quarter of 1993, a customer terminated
its processing agreement because it was acquired and paid a large contract
termination fee. Had the payment not been made in 1993, data processing revenue
for the second quarter of 1994 would have increased 29.0%.
Trust fees declined $.6 million or 4.2% due to lack of continued growth while
fees from other customer services declined 1.5% or $.5 million primarily due to
a decrease in service charges on commercial deposit accounts. Other income
decreased $2.1 million or 20.9% this quarter compared to the same quarter last
year. The decline in revenue from the origination and sale of mortgage loans to
the secondary market accounted for the majority of the decrease.
<PAGE>
OTHER EXPENSE
_____________
Total noninterest expense for the three months ended June 30, 1994 amounted to
$231.0 million compared to $139.9 million reported last year. Excluding the
merger/restructuring charge, total other expense increased $14.5 million or
10.4%. Salaries and employee benefits, the largest component of noninterest
expense, increased $4.1 million or 5.2%. M&I Data Services, Inc. (DSI), the
Corporation's data processing subsidiary, contributed $1.1 million of the
increase through additional overtime and a 8.2% increase in average FTE
employees (174) which includes, in part, the effect of the acquisition of a
data processing center which was completed during the third quarter of 1993.
Also contributing to the increase in salaries and benefits was a $1.0 million
increase in benefit expense which is primarily due to the lowering of the
discount rates used in determining certain benefit liabilities at the end of
1993. DSI also contributed approximately 86% of the increase in equipment
expense.
Other noninterest expense increased $7.9 million from $22.2 million in the
second quarter of 1993 to $30.1 million in the current quarter. Included in
other miscellaneous expense for the second quarter of 1994 as compared to the
second quarter of the prior year is other real estate write-downs of $1.8
million, an environmental liability accrual of $.8 million and goodwill asset
adjustments of $2.7 million. This line item is also affected by the
capitalization of costs, net of amortization, associated with software
development and data processing conversions. During the second quarter of
1994, the amount of cost capitalized, net of amortization, was less than the
amount recorded in the second quarter of 1993 by approximately $0.6 million and
was primarily associated with unaffiliated conversion activity.
INCOME TAXES
____________
The income tax benefit for the three months ended June 30, 1994 amounted to
$2.6 million compared to an income tax provision of $22.8 million for the three
months ended June 30, 1993. The decline in the effective tax rate for the
second quarter of 1994 compared to the same period last year was primarily due
to certain charges recorded in the quarter which are nondeductible in
accordance with the Internal Revenue Code.
SIX MONTHS ENDED JUNE 30, 1994 AND 1993
______________________________________
For the six months ended June 30, 1994 the Corporation recorded net income of
$1.5 million compared to $85.3 million for the six months ended June 30, 1993.
Fully diluted net income per share amounted to $.01 compared to $.79 for the
prior year. Net income for the six months ended June 30, 1994 would have been
$77.6 million and fully diluted net income per share would have amounted to $.75
per share had the $76.1 million of unusual charges not been recorded in the
second quarter of 1994. The decline in operating earnings was due to a slight
decrease in net interest income and higher net noninterest expense.
CAPITAL RESOURCES
_________________
As part of the common share repurchase program, the Corporation began acquiring
common shares in anticipation of the conversion of its $50 million 8.5%
convertible notes.
In May, $16.4 million of the notes were converted into 1,870,057 shares of
common stock. As provided for in the note agreement, the noteholder,
subsequent to conversion, exchanged the newly acquired common shares for
163,630 shares of Series A preferred stock.
<PAGE>
The impact of the adoption of FAS 115 and change in the interest rate
environment resulted in a decrease in shareholders' equity of $13.1 million at
June 30, 1994.
Shareholders' equity to total assets was 8.53% at June, 1994. The Corporation
continues to have a strong capital base and its regulatory capital ratios remain
significantly above the defined minimum regulatory ratios as shown in the
following tables as of June 30, 1994.
RISK-BASED CAPITAL RATIOS
($ in thousands)
Amount Ratio
__________ ______
Tier 1 capital $1,031,445 11.21%
Tier 1 capital
minimum requirement 368,205 4.00
__________ ______
Excess $ 663,240 7.21%
========== ======
Total capital $1,267,151 13.77%
Total capital
minimum requirement 736,409 8.00
Excess $ 530,742 $5.77%
========== ======
Risk-adjusted assets $9,205,116
LEVERAGE RATIO
($ in millions)
Amount Ratio
___________________ ____________
Tier 1 capital to
adjusted total assets $1,031,445 8.32%
Minimum leverage
requirement (1) 371,709 - 619,515 3.00 - 5.00
___________________ ____________
Excess $659,736 - $411,930 5.32 - 3.32%
=================== ============
Adjusted average total assets $12,390,303
(1) The 3% Ratio Shown is effective for banking organizations which have
received the top bank rating from their principal federal banking
regulator. Organizations receiving lower ratings are required to meet
a higher minimum Leverage Ratio of between 4% and 5%.
<PAGE>
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
_________________________________________
A. Exhibits
3(a) Restate Articles of Incorporation, as amended
3(b) By-laws, as amended
10(a) Marshall & Ilsley Corporation Assumption Agreement dated May 31,
1994 assuming rights, obligations and interests of Valley
Bancorporation under various stock option plans incorporated herein
by reference to Exhibit 10.1 to Marshall & Ilsley Corporation's
Registration Statement on Form S-8 (Reg. No. 33-53897)
(b) Valley Bancorporation 1992 Incentive Stock Plan incorporated herein
by reference to Exhibit A to Valley Bancorporation's 1992 Annual
Meeting Proxy Statement dated March 25, 1992 (the "March 25, 1992
Proxy Statement")
(c) Valley Bancorporation 1992 Outside Directors' Stock Option Plan
incorporated herein by reference to Exhibit B to the March 25, 1992
Proxy Statement
(d) Valley Bancorporation 1988 Nonqualified Stock Option Plan
incorporated herein by reference to Exhibit A to Valley
Bancorporation's 1988 Annual meeting Proxy Statement dated March 22,
1988
(e) Valley Bancorporation 1986 Amended and Restated Stock Option Plan
incorporated herein by reference to Exhibit A to Valley
Bancorporation's 1987 Annual Meeting Proxy Statement dated March 30,
1987
(f) Change of control Agreement between Marshall & Ilsley Corporation
and Peter M. Platten, III incorporated herein by reference to
Exhibit 10.3(a) to Marshall & Ilsley Corporation's Registration
Statement on Form S-4 (Reg. No. 33-51753)
(g) Employment Agreement between Marshall & Ilsley Corporation and Gary
A. Lichtenberg incorporated herein by reference herein to Exhibit
10.3(c) to Marshall & Ilsley Corporation's Registration Statement on
Form S-4 (Reg No. 33-51753)
(h) Marshall & Ilsley Corporation 1994 Long-Term Incentive Plan
incorporated herein by reference to Appendix A to Marshall & Ilsley
Corporation's 1994 Annual Meeting Proxy Statement dated July 15,
1994
11 Statements re computation of earnings per share
12 Marshall & Ilsley Corporation Computation of Ratio of Earnings to
Fixed Changes.
The Company will provide a copy of any instrument defining the rights of
holders of long-term debt to the commission upon request.
<PAGE>
B. Reports on Form 8-K
1 A Form 8-K dated may 17, 1994 was filed which included Valley
Bancorporation's Quarterly Report on Form 10-Q for the period ended
March 31, 1994
2 A Form 8-K dated May 31, 1994 was filed which
(i) reported the merger with Valley Bancorporation, effective May
31, 1994, and
(ii) contained the Item 7(a) financial statements of Valley
Bancorporation and the Item 7(b) pro forma financial
information
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MARSHALL & ILSLEY CORPORATION
(Registrant)
/s/ P. R. Justiliano
____________________________________
P. R. Justiliano
Senior Vice President and
Corporate Controller
(Chief Accounting Officer)
/s/ J. E. Sandy
___________________________________
J. E. Sandy
Vice President
August 15, 1994
<PAGE>
AMENDMENT TO ARTICLES OF INCORPORATION
OF
MARSHALL & ILSLEY CORPORATION
The undersigned, in his official capacity as Secretary of Marshall
& Ilsley Corporation, a corporation duly organized under the laws of the State
of Wisconsin (the "Corporation"), hereby certifies that in accordance with
Section 180.1002 of the Wisconsin Statutes, the following Amendment was duly
adopted:
"Section 6(a) of Article III of the Corporation's Restated
Articles of Incorporation shall be amended to increase the number of
shares of Preferred Stock designated as Class A Preferred Stock from
500,000 shares to "2,000,000" shares."
Except as set forth above, Article III shall remain in full force and effect
without further amendment or modification.
The Amendment to the Articles of Incorporation of Marshall & Ilsley
Corporation was adopted by the Board of Directors of the Corporation on April
14, 1994.
Executed in duplicate this 15th day of April, 1994.
MARSHALL & ILSLEY CORPORATION
By:/s/ M.A. Hatfield
___________________________
M.A. Hatfield, Secretary
This instrument was drafted by:
Scott A. Moehrke
Godfrey & Kahn, S.C.
780 North Water Street
Milwaukee, Wisconsin 53202
<PAGE>
RESTATED ARTICLES OF INCORPORATION
OF
MARSHALL & ILSLEY CORPORATION
These Restated Articles of Incorporation are executed by the
undersigned to supersede and replace the heretofore existing Articles of
Incorporation and amendments thereto of Marshall & Ilsley Corporation, a
corporation organized under the laws of the State of Wisconsin:
ARTICLE I
The name of the corporation is Marshall & Ilsley Corporation (the
"Corporation").
ARTICLE II
The Corporation may engage in any lawful activity within the purpose
for which corporations may be organized under the Wisconsin Business
Corporation Law; provided, however, that the Corporation shall not engage in
any activities prohibited by the United States Bank Holding Company Act of
1956.
ARTICLE III
The aggregate number of shares which the Corporation shall have the
authority to issue, the designation of each class of shares, the authorized
number of shares of each class of par value and the par value thereof per
share, shall be as follows:
Designation Par Value Authorized
of Class Per Share Number of Shares
Preferred Stock. . . . . . . . $1.00 5,000,000
Common Stock . . . . . . . . . $1.00 160,000,000
Any and all such shares of Common Stock and Preferred Stock may be
issued for such consideration, not less than the par value thereof, as shall
be fixed from time to time by the Board of Directors. Any and all such
shares so issued, the full consideration for which has been paid or
delivered, shall be deemed fully paid stock and shall not be liable to any
further call or assessment thereon, and the holders of such shares shall not
be liable for any further payments except as otherwise provided by the laws
of the State of Wisconsin.
The preferences, limitations and relative rights of such classes shall
be as follows:
(1) Designation of Series. The Preferred Stock may from time to time
as hereinafter provided, be divided into and issued in one or more series,
and the Board of Directors is hereby expressly authorized to establish one
or more series, to fix and determine the variations as among series and to
fix and determine, prior to the issuance of any shares of a particular
series, the following designations, terms, limitations and relative rights
and preferences of such series:
(a) The designations of such series and the number of shares
which shall constitute such series, which number may at any time, or
from time to time, be increased or decreased (but not below the number
of shares thereof then outstanding) by the Board of Directors unless
the Board of Directors shall have otherwise provided in establishing
such series;
<PAGE>
(b) The voting rights to which the holders of the shares of
such series are entitled, if any;
(c) The yearly rate of dividends on the shares of such series,
the dates in each year upon which such dividend shall be payable and,
if such dividend shall be cumulative, the date or dates from which
such dividend shall be cumulative;
(d) The amount per share payable on the shares of such series
in the event of the liquidation or dissolution or winding up of the
Corporation (whether voluntary or involuntary);
(e) The terms, if any, on which the shares of such series shall
be redeemable, and, if redeemable, the amount per share payable
thereon in the case of the redemption thereof (which amount may vary
with regard to (i) shares redeemed on different dates; and (ii) shares
redeemed through the operation of a sinking fund, if any, applicable
to such shares, from the amount payable with respect to shares
otherwise redeemed);
(f) The extent to and manner in which a sinking fund, if any,
shall be applied to the redemption or purchase of the shares of such
series, and the terms and provisions relative to the operation of such
fund;
(g) The terms, if any, on which the shares of such series shall
be convertible into shares of any other class or of any other series
of the same or any other class and, if so convertible, the price or
prices or the rate or rates of conversion, including the method, if
any, for adjustments of such prices or rates, and any other terms and
conditions applicable thereto; and
(h) Such other terms, limitations and relative rights and
preferences, if any, of such series as the Board of Directors may
lawfully fix and determine and as shall not be inconsistent with the
laws of the State of Wisconsin or these Amended and Restated Articles
of Incorporation.
All shares of the same series of Preferred Stock shall be identical in
all respects, except that shares of any one series issued at different times
may differ as to dates from which any cumulative dividends thereon shall be
cumulative. All shares of the Preferred Stock of all series shall be equal
and shall be identical in all respects, except as permitted by the foregoing
provisions of this paragraph (1).
(2) Dividends. The holders of Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors, out of funds
legally available therefor, dividends at the annual rate fixed by the Board
of Directors with respect to each series of shares and no more. Such
dividends shall be payable on such dates and in respect of such periods in
such year as may be fixed by the Board of Directors to the holders of record
thereof on such date as may be determined by the Board of Directors. Such
dividends shall be paid or declared and set apart for payment for each
dividend period before any dividend (other than a dividend payable solely in
Common Stock) for the same period shall be paid upon or set apart for
payment on the Common Stock, and, if dividends on the Preferred Stock shall
be cumulative, all unpaid dividends thereon for any past dividend period
shall be fully paid or declared and set apart for payment, but without
interest, before any dividend (other than a dividend payable solely in
Common Stock) shall be paid upon or set apart for payment on the Common
Stock. The holders of Preferred Stock shall not, however, be entitled to
participate in any other or additional earnings or profits of the
Corporation, except for such premiums, if any, as may be payable in case of
redemption, liquidation, dissolution or winding up.
(3) Redemption. In the event that the shares of any series of the
Preferred Stock shall be made redeemable as provided in subparagraph (e) of
paragraph (1), above, the Corporation may, at its option, redeem at any time
or from time to time all or any part of such shares, upon notice duly given
as hereinafter provided, by paying for each share the redemption price then
applicable thereto fixed by the Board of Directors as provided in
subparagraph (e) of paragraph (1), above.
<PAGE>
Notice of every such redemption shall be mailed at least thirty (30)
days prior to the date fixed for such redemption to the holders of record of
the shares called for redemption at their respective addresses as shown on
the stock records of the Corporation. In case of a redemption of a part of
a series of Preferred Stock at the time outstanding, the Corporation shall
select by lot, in such manner as the Board of Directors may determine, the
shares so to be redeemed.
On or before the date fixed for a redemption specified therein, the
Corporation shall deposit funds sufficient to redeem such shares with a bank
or trust company in good standing, as designated in such notice, organized
under the laws of the United States or of the State of Wisconsin, doing
business in the City of Milwaukee, Wisconsin, and having a capital, surplus
and undivided profit aggregating at least $50,000,000.00, according to its
last published statement of condition, in trust for the pro rata benefit of
the holders of the shares called for redemption, and if the name and address
of such bank or trust company and the deposit or intent to deposit the
redemption funds in such trust account shall have been stated in such notice
of redemption, and the Corporation shall have given such bank or trust
company irrevocable instructions and authorization to pay the amount payable
upon redemption to the proper holders upon surrender of certificates
representing such shares, then, from and after the mailing of such notice
and the making of such deposit, all shares so called for redemption shall no
longer be deemed to be outstanding for any purpose whatsoever and the right
to receive dividends thereon and all rights of the holders of such shares in
or with respect to such shares of the Corporation shall forthwith cease and
terminate, except only the right of the holders thereof to receive from such
bank or trust company the amount payable upon redemption together with all
accrued but unpaid dividends to the date fixed for redemption, without
interest, upon the surrender of the certificates representing the shares to
be redeemed, and the right to exercise privileges of conversion, if any, on
or before the date fixed for redemption or such earlier date as may be fixed
for the expiration thereof.
Any funds so deposited by the Corporation which shall not be required
for such redemption because of the exercise of any right of conversion
subsequent to the time of such deposit shall be released and repaid to the
Corporation upon its request. Any funds so deposited and unclaimed at the
end of five (5) years (or such shorter period as shall be provided by law)
after the date fixed for redemption shall be released and repaid to the
Corporation, after which holders of the shares called for redemption shall
no longer look to the said bank or trust company but shall look only to the
Corporation, or to others, as the case may be, for payment of any lawful
claim for such funds which the holders of said shares may still have. Any
interest accrued on funds so deposited shall be paid to the Corporation from
time to time.
(4) Reissue of Shares. Shares of the Preferred Stock which shall
have been converted, redeemed, purchased or otherwise acquired by the
Corporation, whether through the operation of a sinking fund or otherwise,
shall be retired and restored to the status of authorized but unissued
shares, but may be reissued only as a part of the Preferred Stock other than
the series of which they were originally a part.
(5) Liquidation. In the event of liquidation, dissolution or winding
up (whether voluntary or involuntary) of the Corporation, the holders of
shares of Preferred Stock shall be entitled to be paid the full amount
payable on such shares upon the liquidation, dissolution or winding up of
the Corporation fixed by the Board of Directors with respect to such shares
as provided in subparagraph (d) of paragraph (1), above, before any amount
shall be paid to the holders of the Common Stock. After payment to holders
of the Preferred Stock of the full preferential amounts to which they are
entitled, the remaining assets of the Corporation shall be distributed
ratably among the holders of the Common Stock.
(6) Designation of Rights and Preferences Series A Convertible
Preferred Stock.
(a) Designation of Series. There is hereby established
effective February 14, 1986 from the authorized preferred stock a
series of preferred stock to be designated as Series A Convertible
Preferred Stock, consisting of 500,000 shares, and having the powers,
rights, limitations, restrictions and preferences set forth herein.
The number of shares designated as Series A Convertible Preferred
Stock may at any time, or from time to time, be increased or decreased
(but not below the number of shares thereof then outstanding or then
<PAGE>
reserved for issuance in connection with the conversion of any
securities of the Company) by the Board of Directors.
(b) Voting Rights. The holders of Series A Convertible
Preferred Stock shall have only such right to vote as provided by
Sections 180.64(2) and 180.52 of the Wisconsin Statutes or by other
applicable law.
(c) Dividends. The holders of all issued and outstanding
shares of Series A Convertible Preferred Stock shall be entitled to
receive cash dividends when and as cash dividends are declared and
become payable with respect to the Common Stock of the Corporation, in
an amount, in the case of each holder of shares of Series A
Convertible Preferred Stock with respect to each cash dividend
declared with respect to the Common Stock, equal to the amount of the
cash dividend that such holder would have received with respect to the
resulting shares of Common Stock had he converted such shares of
Preferred Stock into Common Stock immediately before the declaration
of such dividend with respect to the Common Stock. Dividends on the
Series A Convertible Preferred Stock shall be noncumulative. The
holders of Series A Convertible Preferred Stock shall not be entitled
to participate in any other or additional earnings or profits of the
Corporation, except for such premiums, if any, as may be payable in
case of liquidation, dissolution or winding up.
(d) Liquidation Preference. In the event of any liquidation,
dissolution or winding up of the Corporation, whether voluntary or
involuntary, before any payment or distribution of the assets of the
Corporation (whether capital or surplus) shall be made to or set apart
for the holders of the Common Stock or any other series or class of
stock of the Corporation ranking junior to the Series A Convertible
Preferred Stock upon liquidation, dissolution or winding up, the
holders of the shares of the Series A Convertible Preferred Stock
shall be entitled to receive $100 per share plus an amount equal to
all dividends, if any, which have accrued thereon as the result of the
declaration of dividends on the Common Stock but which remain unpaid
to the date of final distribution to such holders; but such holders
shall not be entitled to any further payment. If, upon any
liquidation, dissolution or winding up of the Corporation, the assets
of the Corporation to be paid or distributed to the holders of the
shares of the Series A Convertible Preferred Stock shall be
insufficient to pay in full the preferential amount aforesaid and the
preferential amount, if any, to be paid or distributed to the holders
of any other preferred stock ranking as to liquidation, dissolution or
winding up, on a parity with the Series A Convertible Preferred Stock,
then such assets shall be distributed among the holders of Series A
Convertible Preferred Stock and such other preferred stock, if any,
ratably in accordance with the respective amounts that would be
payable upon liquidation, dissolution or winding up to such holders
with respect to such shares of Series A Convertible Preferred Stock
and such other preferred stock, if any, if all preferential amounts
payable thereon were paid in full. For the purposes of this
subparagraph (d), a consolidation or merger of the Corporation with
one or more corporations shall not be deemed to be a liquidation,
dissolution or winding up, voluntary or involuntary.
Subject to the rights of the holders of shares of any series or
class of stock ranking on a parity with or prior to the Series A
Convertible Preferred Stock upon liquidation, dissolution or winding
up, upon any liquidation, dissolution or winding up of the
Corporation, after payment shall have been made in full to the Series
A Convertible Preferred Stock as provided in this subparagraph d, but
not prior thereto, the holders of the Common Stock or any other series
or class of stock ranking junior to the Series A Convertible Preferred
Stock upon liquidation, dissolution or winding up shall, subject to
the respective terms and provisions (if any) applying thereto, be
entitled to receive any and all assets remaining to be paid or
distributed, and the Series A Convertible Preferred Stock shall not be
entitled to share therein.
(e) Conversion Rights. The holders of shares of Series A
Convertible Preferred Stock shall have the right, at their option, to
convert such shares into shares of Common Stock of the Corporation at
any time on and subject to the following terms and conditions:
<PAGE>
(i) The shares of Series A Convertible Preferred
Stock shall be convertible at the offices of the transfer
agent or agents for the Series A Convertible Preferred
Stock and at such other office or offices, if any, as the
Board of Directors may designate, into fully paid and
nonassessable shares (except as provided in Section
180.40(6) of the Wisconsin Statutes) of Common Stock of
the Corporation, at the conversion price, determined as
hereinafter provided, in effect at the time of conversion,
each share of Series A Convertible Preferred Stock being
valued at $100 for the purpose of such conversion. The
price at which shares of Common Stock shall be delivered
upon conversion (herein called the "Conversion Price")
shall be initially $78.75 per share of Common Stock,
except that the initial Conversion Price applicable to
shares of Series A Convertible Preferred Stock issued in
exchange for Common Stock shall be the weighted average
purchase price paid for such Common Shares as determined
in good faith by the Board of Directors of the Company.
The Conversion Price shall be adjusted in certain
instances as provided in subparagraph (e)(iii), (iv), (v),
(vi), (ix), (x) and (xi) below.
(ii) In order to convert shares of Series A
Convertible Preferred Stock into Common Stock, the holder
thereof shall surrender at any office hereinabove
mentioned the certificate or certificates therefor, duly
endorsed or assigned to the Corporation or in blank, and
give written notice to the Corporation at said office that
such holder elects to convert such shares. Any such
notice shall be irrevocable. No payment or adjustment
shall be made upon conversion on account of any dividends,
if any, which have accrued as the result of the
declaration of dividends on the Common Stock on the shares
of Series A Convertible Preferred Stock surrendered for
conversion, but which remain unpaid, but payment or
adjustment shall be made on account of any dividends
payable with respect to the Common Stock issued upon
conversion.
Shares of Series A Convertible Preferred Stock shall
be deemed to have been converted immediately prior to the
close of business on the day of the surrender of such
shares for conversion in accordance with the foregoing
provisions, and the person or persons entitled to receive
the shares of Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or
holders of Common Stock at such time. As promptly as
practicable on or after the conversion date, the
Corporation shall issue and shall deliver at said office a
certificate or certificates for the number of full shares
of Common Stock issued upon such conversion, together with
payment in lieu of any fraction of a share, as hereinafter
provided, to the person or persons entitled to receive the
same.
(iii) In case the Corporation shall pay or make a
dividend or other distribution on any class of Capital
Stock of the Corporation in Common Stock, the Conversion
Price shall be reduced by multiplying such Conversion
Price by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding at the close
of business on the day fixed for the determination of
shareholders entitled to receive such dividend or other
distribution and of which the denominator shall be the sum
of such number of shares plus the total number of shares
constituting such dividend or other distribution, such
reduction to become effective immediately after the
opening of business on the day following the date fixed
for such determination. For purposes of this subparagraph
(e)(iii), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury
of the Corporation. The Corporation will not pay any
dividend or make any distribution on shares of Common
Stock held in the treasury of the Corporation.
<PAGE>
(iv) In case the Corporation shall issue rights or
warrants to all holders of its Common Stock, entitling
them to subscribe for or purchase shares of Common Stock
at a price per share less than the current market price
per share (determined as provided in subparagraph
(e)(viii) below) of the Common Stock on the date fixed for
the determination of shareholders entitled to receive such
rights or warrants, the Conversion Price shall be reduced
by multiplying such Conversion Price by a fraction of
which the numerator shall be the sum of the number of
shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the
number of shares of Common Stock which the aggregate
offering price for all of the shares of Common Stock so
offered for subscription or purchase would purchase at
such current market price and of which the denominator
shall be the sum of the number of shares of Common Stock
outstanding at the close of business on the date fixed for
such determination plus the number of shares of Common
Stock so offered for subscription or purchase, such
reduction to become effective immediately after the
opening of business on the day following the date fixed
for such determination. For the purposes of this
subparagraph (e)(iv), the number of shares of Common Stock
at any time outstanding shall not include shares held in
the treasury of the Corporation. The Corporation will not
issue any rights or warrants in respect of shares of
Common Stock held in the treasury of the Corporation.
(v) In case outstanding shares of Common Stock
shall be subdivided into a greater number of shares, the
Conversion Price shall be proportionately reduced, and,
conversely, in case outstanding shares of Common Stock
shall be combined into a smaller number of shares, the
Conversion Price shall be proportionately increased, such
reduction or increase, as the case may be, to become
effective immediately after the opening of business on the
day following the date upon which such subdivision or
combination becomes effective.
(vi) In case the Corporation shall, by dividend or
otherwise, distribute to all holders of its Common Stock,
evidences of its indebtedness or assets (including securi-
ties, but excluding any rights or warrants referred to in
subparagraph (e)(iv) above, any dividend or distribution
paid in cash out of earned surplus of the Corporation and
any dividend or distribution referred to in subparagraph
(e)(iii) above), the Conversion Price shall be adjusted by
multiplying such Conversion Price by a fraction of which
the numerator shall be the difference of the current
market price per share (determined as provided in
subparagraph (e)(viii) below) of the Common Stock on the
date fixed for the determination of the shareholders
entitled to receive such distribution less the then fair
market value (as determined by the Board of Directors,
whose good faith determination shall be conclusive) of the
portion of the assets or evidences of indebtedness so
distributed applicable to one share of the then
outstanding Common Stock, and of which the denominator
shall be such current market price per share of the Common
Stock, such adjustment to become effective immediately
after the opening of business on the day following the
date fixed for such determination. For purposes of this
subparagraph (e)(vi), the number of shares of Common Stock
at any time outstanding shall not include shares held in
the treasury of the Corporation. The Corporation will not
distribute any evidences of its indebtedness or assets
with respect to shares of Common Stock held in the
treasury of the Corporation.
(vii) A reclassification (including any reclassifi-
cation upon a consolidation or merger of which the
Corporation is the continuing corporation) of the Common
Stock into securities including securities other than the
Common Stock shall be deemed to involve (aa) a
distribution of such securities other than Common Stock
into which the Common Stock is reclassified to all holders
<PAGE>
of Common Stock (and the effective date of such
reclassification shall be deemed to be "the date fixed for
the determination of shareholders entitled to receive such
distribution" within the meaning of subparagraph (e)(vi)
above) and (bb) a subdivision or combination, as the case
may be, of the number of shares of Common Stock
outstanding immediately prior to such reclassification
into the number of shares of Common Stock outstanding
immediately thereafter (and the effective date of such
reclassification shall be deemed to be "the date upon
which such subdivision or combination becomes effective"
within the meaning of subparagraph (e)(v), above).
(viii) For the purpose of any computation under
subparagraph (e)(iv), (vi), and (x), the current market
price per share of Common Stock on any date shall be
deemed to be 90% (100%, in the case of subparagraph
(e)(xvi) of (aa) the average of the daily closing prices
for the five (5) consecutive business days commencing ten
(10) business days before the date in question. The
closing price for each day shall be the last reported
sales price regular way or, in case no such reported sale
takes place on such day, the average of the reported
closing bid and asked prices regular way, in either case
on any exchange on which the Common Stock is listed or
admitted to trading selected by the Board of Directors, or
(bb) if the Common Stock is not listed or admitted to
trading on any such exchange, the closing sale price in
the over-the-counter market, or (cc) in case no such
reported sale takes place or such data is not reported on
such day, the average of the closing bid and asked prices
in the over-the-counter market, as furnished by the
National Association of Securities Dealers, Inc. through
NASDAQ or a similar organization if NASDAQ is no longer
reporting such information. If on any such day the Common
Stock is not quoted by any such organization, the closing
price for such day shall be the fair value of such Common
Stock on such day, as determined by the Board of Directors
in good faith.
(ix) In case of any capital reorganization of the
Corporation (other than any reorganization referred to in
subparagraph (e)(iii), (iv), (v), (vi), or (vii), above),
any reclassification of the Common Stock (other than any
reclassification of the Common Stock referred to in
subparagraph (e)(ii), (v) or (vii) above), the
consolidation or merger of the Corporation with or into
any other corporation or of the sale of all or
substantially all of the properties and assets of the
Corporation to any other corporation, each share of Series
A Convertible Preferred Stock shall immediately thereafter
be convertible into the number of shares of stock, other
securities, assets and/or cash to which a holder of the
number of shares of Common Stock into which such share was
convertible immediately prior thereto would have been
entitled to receive upon such reorganization,
reclassification, consolidation, merger or sale. In case
of any such reorganization, reclassification,
consolidation, merger or sale, the provisions set forth in
this subparagraph (e)(ix) with respect to the rights and
interests of the holders of the Series A Convertible
Preferred Stock shall automatically be appropriately
adjusted so as to be applicable as nearly as possible to
the shares of stock, other securities, assets and/or cash
into which the Series A Convertible Preferred Stock
thereby becomes convertible, and effective provision shall
be made in the Articles of Incorporation of the resulting
or surviving corporation or otherwise, so that such
provisions shall thereafter be applicable, as nearly as
possible, to any such shares of stock, other securities,
assets and/or cash. The Corporation shall not effect any
such consolidation, merger or sale, unless before the
consummation thereof the successor corporation (if other
than the Corporation) resulting from such consolidation or
merger, the corporation purchasing such assets, or other
appropriate corporation or entity shall expressly assume
in writing the obligation to deliver to the holder of each
share of Series A Convertible Preferred Stock, upon
<PAGE>
conversion thereof, such shares of stock, other
securities, assets and/or cash as such holder shall be
entitled to receive pursuant to the provisions hereof, and
to make provisions for the protection of such conversion
right as above provided. The provisions of this subpara-
graph (e)(ix) shall similarly apply to successive
reorganizations, reclassifications, consolidations,
mergers or sales.
(x) In the event that the Corporation shall (except
as hereinafter provided) issue any additional shares of
Common Stock for cash at a price less than the Current
Market Price per share of Common Stock then in effect,
then the Conversion Price upon each such issuance shall be
adjusted to that price determined by multiplying the
Conversion Price in effect immediately prior to such event
by a fraction:
(aa) the numerator of which shall be the
number of shares of Common Stock outstanding immedi-
ately prior to the issuance of such additional
shares of Common Stock plus the number of full
shares of Common Stock which the aggregate
consideration for the total number of such
additional shares of Common Stock so issued would
purchase at the Current Market Price per share, and
(bb) the denominator of which shall be the
number of shares of Common Stock outstanding immedi-
ately prior to the issuance of such additional
shares of Common Stock plus the number of such
additional shares of Common Stock to issued;
For purposes of clauses (aa) and (bb) the date as of which
the Current Market Price per share of Common Stock shall
be computed shall be the earlier of (xx) the date on which
the Corporation shall enter into a firm contract for the
issuance of such additional shares of Common Stock or (zz)
the date of actual issuance of such additional shares of
Common Stock;
(xi) The Corporation may make such reductions in
the Conversion Price, so as to increase the number of
Common Shares into which the Series A Convertible
Preferred Stock may be converted, in addition to those
required by subparagraph (e)(iii), (iv), (v), (vi) and
(ix), as it considers to be advisable in order that any
event treated for federal income tax purposes as a
dividend of stock or stock rights shall not be taxable to
the recipients.
(xii) No adjustments to the Conversion Price
will be made for the issuance of options or securities to
employees of the Corporation or its subsidiaries pursuant
to any stock option, restricted stock, thrift, stock
purchase, savings or other employee benefit plan or to
shareholders of the Corporation pursuant to any dividend
reinvestment plan. No adjustment will be required to be
made in the Conversion Price until accumulative
adjustments require an adjustment of at least $.25, with
any smaller adjustments not made hereunder cumulated with
future adjustments.
(xiii) The Corporation shall mail to each holder of
Series A Convertible Preferred Stock notice of the pro-
posed effective date of any action which would result in
an adjustment in the Conversion Price determined as
provided in this subparagraph (e) at least twenty (20)
days prior to the record date thereof. Whenever the
Conversion Price is adjusted as herein provided, the
Corporation shall forthwith file with any transfer agent
for the Series A Convertible Preferred Stock a certificate
signed by the Chairman of the Board or one of the Vice
Presidents of the Corporation and by its Treasurer or an
Assistant Treasurer, stating the adjusted Conversion Price
determined as provided in this subparagraph (e), and
setting forth the facts requiring such adjustment. Any
such transfer agent shall be under no duty to make any
inquiry or investigation as to the statements contained in
any such certificate or as to the manner in which any
computation was made, but may accept such certificate as
conclusive evidence of the statements therein contained,
and any such transfer agent shall be fully protected with
respect to any and all acts done or action taken or
suffered by it in reliance thereon. No transfer agent in
its capacity as transfer agent shall be deemed to have any
knowledge with respect to any change of capital structure
of the Corporation unless and until it receives a notice
thereof pursuant to the provisions hereof, and, in the
absence of any such notice, each transfer agent may
conclusively assume that there has been no such change.
Whenever the Conversion Price is adjusted, the Corporation
shall forthwith cause a notice stating the adjustment, and
describing the events requiring such adjustments and the
Conversion Price to be mailed to the holders of record of
Series A Convertible Preferred Stock.
(xiv) The Corporation shall at all times reserve
and keep available out of its authorized and unissued
Common Stock, solely for the purpose of effecting the
conversion of Series A Convertible Preferred Stock, such
number of shares as shall from time to time be sufficient
to effect the conversion of all Series A Convertible
Preferred Stock from time to time outstanding. The
Corporation shall from time to time, in accordance with
the laws of Wisconsin, increase the authorized amount of
Common Stock if at any time the number of shares of Common
Stock remaining unissued shall not be sufficient to permit
the conversion of all the then outstanding shares of
Series A Convertible Preferred Stock.
(xv) The Corporation will pay any and all issue and
other taxes (other than taxes based on income) that may be
payable in respect of any issue or delivery of Common
Stock on conversion of Series A Convertible Preferred
Stock pursuant hereto. The Corporation shall not,
however, be required to pay any tax which may be payable
in respect of any transfer involved in the issue and
delivery of Common Stock in a name other than that in
which the Series A Convertible Preferred Stock so
converted was registered, and no such issue or delivery
shall be made unless and until the person requesting such
issue 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.
(xvi) No fractional shares of Common Stock will be
issued upon conversion of the Series A Convertible
Preferred Stock, and in lieu of any fractional shares that
would otherwise be issuable, the Corporation will pay cash
on the basis of the current market price per share of the
Common Stock on the business day immediately preceding the
day of conversion determined in accordance with
subparagraph (e)(viii) above.
(xvii) The Board of Directors of the Corporation
shall not authorize for issuance any class of capital
stock ranking prior to the Series A Convertible Preferred
Stock without the consent of holders of two-thirds of the
outstanding shares of Series A Convertible Preferred
Stock. For purposes of this Agreement, any class or
classes of stock of the Corporation shall be deemed to
rank:
(aa) Prior to the Series A Convertible
Preferred Stock as to dividends or as to
distribution of assets upon liquidation, dissolution
or winding up if the holders of such class shall be
entitled to the receipt of dividends or of amounts
distributable upon liquidation, dissolution or
winding up, as the case may be, in preference or
<PAGE>
priority to the holders of the Series A Convertible
Preferred Stock; and
(bb) On a parity with the Series A Convert-
ible Preferred Stock as to dividends or as to
distributions of assets upon liquidation,
dissolution or winding up, whether or not the
dividend rates, dividend payment dates, or
liquidation amounts per share thereof be different
from those of the Series A Convertible Preferred
Stock, if the holders of such class and the Series A
Convertible Preferred Stock shall be entitled to the
receipt of dividends or of amounts distributable
upon liquidation, dissolution or winding up, as the
case may be, in proportion to their respective
dividend rates or liquidation amounts, without
preference or priority of one over the other.
ARTICLE IV
Pre-emptive Rights. No holder of any stock of the corporation shall
have any pre-emptive or other subscription rights nor be entitled, as of
right, to purchase or subscribe for any part of the unissued stock of this
corporation or any of additional stock issued by reason of any increase of
authorized capital stock of this corporation or other securities whether or
not convertible into stock of this corporation.
ARTICLE V
The address of the registered office of the Corporation is 770 North
Water Street, Milwaukee, Wisconsin 53202 and its registered agent at such
address is Michael A. Hatfield.
ARTICLE VI
The business and affairs of the Corporation shall be managed by a
Board of Directors. The number of directors (exclusive of directors, if
any, elected by the holders of one or more series of Preferred Stock, voting
separately as a series pursuant to the provisions of these Restated Articles
of Incorporation applicable thereto) shall be not less than 3 directors, the
exact number of directors to be determined from time to time by resolution
adopted by affirmative vote of a majority of the entire Board of Directors
then in office. The directors shall be divided into three classes,
designated Class I, Class II, and Class III, and the term of office of
directors of each class shall be three years. Each class shall consist, as
nearly as possible, of one-third of the total number of directors
constituting the entire Board of Directors. If the number of directors is
changed by resolution of the Board of Directors pursuant to this Article VI,
any increase or decrease shall be apportioned among the classes so as to
maintain the number of directors in each class as nearly equal as possible,
but in no case shall a decrease in the number of directors shorten the term
of any incumbent director.
A director shall hold office until the annual meeting for the year in
which his term expires and until his successor shall be elected and shall
qualify. Any newly created directorship resulting from an increase in the
number of directors and any other vacancy on the Board of Directors, however
caused, shall be filled by the vote of a majority of the directors then in
office, although less than a quorum, or by a sole remaining director. Any
director so elected to fill any vacancy in the Board of Directors, including
a vacancy created by an increase in the number of directors, shall hold
office for the remaining term of directors of the class to which he has been
elected and until his successor shall be elected and shall qualify.
Exclusive of directors, if any, elected by the holders of one or more
series of Preferred Stock, no director of the Corporation may be removed
from office, except for Cause and by the affirmative vote of two-thirds of
the outstanding shares of capital stock of the Corporation entitled to vote
at a meeting of shareholders duly called for such purpose. As used in this
Article VI, the term "Cause" shall mean solely malfeasance arising from the
performance of a director's duties which has a materially adverse affect on
the business of the Corporation.
<PAGE>
No person, except those nominated by or at the direction of the Board
of Directors, shall be eligible for election as a director at any annual or
special meeting of shareholders unless a written request, in the form
established by the Corporation's By-laws, that his or her name be placed in
nomination is received from a shareholder of record by the Secretary of the
Corporation not less than 30 days prior to the date fixed for such meeting,
together with the written consent of such person to serve as a director.
Where such a request for nomination and such consent have been timely
received, but such nominee is unable or declines to serve, the person who
placed the individual's name in nomination may request that an alternative
name be placed in nomination at the meeting.
Notwithstanding the foregoing, whenever the holders of any one or more
series of Preferred Stock issued by the Corporation shall have the right,
voting separately by series, to elect directors at an annual or special
meeting of shareholders, the election, term of office, filling of vacancies
and other features of such directorships shall be governed by the terms of
these Restated Articles of Incorporation applicable thereto. Directors so
elected shall not be divided into classes unless expressly provided by such
terms, and during the prescribed terms of office of such directors the Board
of Directors shall consist of such directors in addition to the number of
directors determined as provided in the first paragraph of this Article VI.
ARTICLE VII
The period of existence of the Corporation shall be perpetual.
ARTICLE VIII
Acquisition and Disposition of Own Shares. The Corporation shall have
the right to purchase, take, receive or otherwise acquire, hold, own,
pledge, transfer or otherwise dispose of its own shares; provided that no
such acquisition, directly or indirectly, of its own shares of equal or
subordinate rank shall be made unless:
(a) At the time of such acquisition the Corporation is not and
would not thereby be rendered insolvent; and
(b) The net assets of the Corporation remaining after such
acquisition would be not less than the aggregate preferential amount
payable in the event of voluntary liquidation to the holders of shares
having preferential rights to the assets of the corporation in the
event of liquidation.
ARTICLE IX
Notwithstanding any other provision of these Restated Articles of
Incorporation or the Corporation's By-Laws (and notwithstanding the fact
that some lesser percentage may be specified by law, these Restated Articles
of Incorporation or the Corporation's By-Laws), the Corporation's By-Laws
may be amended, altered or repealed, and new By-Laws may be enacted, only by
the affirmative vote of not less than two-thirds of the outstanding shares
of capital stock of the Corporation entitled to vote at a meeting of
shareholders duly called for such purpose, or by a vote of not less than
three-quarters of the entire Board of Directors then in office.
ARTICLE X
Except as otherwise specified herein, the "requisite affirmative
votes," and the recitals of votes which are "requisite for adoption" or
"requisite for approval" under Section 180.25 of the Wisconsin Statutes for
the approval or authorization of any (i) plan of merger or consolidation of
the Corporation with or into any other corporation, (ii) sale, lease,
exchange or disposition of all or substantially all the property and assets
of the Corporation to or with any other person, corporation or entity not
made in the ordinary course of business, or (iii) voluntary dissolution of
the Corporation or revocation of voluntary dissolution proceedings, shall be
the affirmative vote of the holders of two-thirds of the outstanding shares
of capital stock of the Corporation entitled to vote at a meeting called for
<PAGE>
such purpose (unless any class or series of shares is entitled to vote
thereon as a class, in which event the "requisite affirmative votes" shall
be the affirmative votes of the holders of two-thirds of the outstanding
shares of each class of shares and of each series entitled to vote thereon
as a class and of the total shares entitled to vote thereon), provided,
however, if the Board of Directors shall have approved any transaction
described in clauses (i), (ii) or (iii) above by a resolution adopted by
three-quarters of the Board of Directors then in office and entitled to vote
thereon, the "requisite affirmative votes," and the recitals of votes which
are "requisite for adoption" or "requisite for approval," shall be the
affirmative vote of the holders of a majority of the outstanding shares of
capital stock of the Corporation entitled to vote at a meeting called for
such purpose (unless any class or series of shares is entitled to vote
thereon as a class, in which event the "requisite affirmative votes" shall
be the affirmative votes of the holders of a majority of the outstanding
shares of each class of shares and of each series entitled to vote thereon
as a class and of the total shares entitled to vote thereon).
ARTICLE XI
A. In addition to any affirmative vote required by law or these
Restated Articles of Incorporation or the By-Laws of the Corporation, and
except as otherwise expressly provided in Section (B) of this Article XI, a
Business Combination (as hereinafter defined) shall require the affirmative
vote of not less than:
(1) Eighty percent (80%) of the votes entitled to be cast by
the holders of all then outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors
(hereinafter referred to in this Article XI as "Voting Stock"), voting
together as a single class (it being understood that, for purposes of
this Article XI, each share of the Voting Stock shall have the number
of votes granted to it pursuant to the Wisconsin Business Corporation
Law or as otherwise provided pursuant to Article III of these Restated
Articles of Incorporation); or
(2) Two-thirds of the votes entitled to be cast by holders of
Voting Stock, voting together as a single class, other than Voting
Stock beneficially owned by an Interested Stockholder (as defined
below) who is a party to the Business Combination or an Affiliate or
Associate of such Interested Stockholder.
Such affirmative vote shall be required notwithstanding the fact that no
vote may be required, or that a lesser percentage may be specified by law or
in any agreement with any national securities exchange or otherwise, but
such affirmative separate class vote shall be required in addition to any
affirmative vote of the holders of any particular class or series of the
Voting Stock required by law or pursuant to Article III of these Restated
Articles of Incorporation.
B. The provisions of Section (A) of this Article XI shall not be
applicable to any particular Business Combination, and such Business
Combination shall require only such affirmative separate class vote as is
required by law and any other provision of these Restated Articles of
Incorporation, and any resolution or resolutions adopted by the Board of
Directors pursuant to these Restated Articles of Incorporation, as amended,
if the conditions specified in either of the following paragraphs (1) or (2)
are met:
1. The Business Combination shall have been approved by a
majority of the Disinterested Directors (as hereinafter defined), it
being understood that this condition shall not be capable of
satisfaction unless there is at least one Disinterested Director; or
2. All of the following conditions are met:
(a) the aggregate amount of cash and the Fair Market Value
(as hereinafter defined) as of the date of the consummation of
any Business Combination (the "Consummation Date") of
consideration other than cash to be received per share of Common
Stock as a result of such Business Combination shall be at least
equal to the higher of the following:
(i) (If applicable) the highest per share price
(including any brokerage commissions, transfer taxes and
soliciting dealers' fees) paid by or on behalf of the
Interested Stockholder for any shares of Common Stock
acquired by it (aa) within the two-year period immediately
prior to the first public announcement of the proposed
Business Combination (the "Announcement Date"), or (bb) in
the transaction in which it became an Interested
Stockholder, whichever is higher, plus interest compounded
annually from the date on which the Interested Stockholder
became an Interested Stockholder (the "Determination
Date") through the Consummation Date at the base rate for
interest rate determinations of M&I Marshall & Ilsley Bank
in effect from time to time, less the aggregate amount of
any cash dividends paid, and the Fair Market Value of any
dividends paid other than in cash, per share of Common
Stock from the Determination Date through the Consummation
Date (but not exceeding the amount of such interest
payable per share of Common Stock); and
(ii) The Fair Market Value per share of Common
Stock on the Announcement Date or on the Determination
Date, whichever is higher.
The provisions of this Paragraph B(2)(a) of this Article
XI shall be required to be met with respect to all shares of
Common Stock outstanding whether or not the Interested
Stockholder has previously acquired any shares of Common Stock.
(b) The aggregate amount of cash and the Fair Market
Value as of the Consummation Date of consideration other than
cash to be received per share of any class or series of
outstanding Capital Stock, other than Common Stock, shall be at
least equal to the highest of the following (such requirement
being applicable to each such class or series of outstanding
Capital Stock, whether or not the Interested Stockholder has
previously acquired beneficial ownership of any shares of such
class or series):
<PAGE>
(i) (If applicable) the highest per share price
(including any brokerage commissions, transfer taxes and
soliciting dealers' fees) paid by or on behalf of the
Interested Stockholder for any share of such class or
series of Capital Stock acquired by it (aa) within the
two-year period immediately prior to the Announcement
Date, or (bb) in the transaction in which it became an
Interested Stockholder, whichever is higher, plus interest
compounded annually from the Determination Date through
the Consummation Date at the base rate for interest rate
determinations of M&I Marshall & Ilsley Bank in effect
from time to time, less the aggregate amount of any cash
dividends paid, and the Fair Market Value of any dividends
paid other than in cash, per share of such class or series
of Capital Stock from the Determination Date through the
Consummation Date (but not exceeding the amount of such
interest payable per share of such class of Capital
Stock);
(ii) (If applicable) the highest preferential
amount per share to which the holders of shares of such
class or series of Capital Stock are entitled in the event
of any voluntary or involuntary liquidation, dissolution
or winding up of the Corporation; and
(iii) The Fair Market Value per share of such class
or series of Capital Stock on the Announcement Date or on
the Determination Date, whichever is higher.
(c) The consideration to be received by holders of a
particular class or series of outstanding Capital Stock
(including Common Stock) in such Business Combination shall be
in cash or in the same form as the Interested Stockholder has
previously paid for shares of such class or series of Capital
Stock. If the Interested Stockholder has paid for shares of any
class or series of Capital Stock with varying forms of
<PAGE>
consideration, the form of consideration of such class or series
of Capital Stock shall be either cash or the form used to
acquire the largest number of shares of such class or series of
Capital Stock previously acquired by it.
(d) After such Interested Stockholder has become an
Interested Stockholder and prior to the consummation of such
Business Combination: (a) except as approved by a majority of
the Disinterested Directors, there shall have been no failure to
declare and pay at the regular date therefor any full quarterly
dividends (whether or not cumulative) on the outstanding stock
having a preference over the Common Stock as to dividends or
upon liquidations; (b) there shall have been (1) no reduction in
the annual rate of dividends paid on the Common Stock (except as
necessary to reflect any subdivision of the Common Stock),
except as approved by a majority of the Disinterested Directors,
and (2) an increase in such annual rate of dividends (as
necessary to prevent any reduction) in the event of any
reclassification (including any reverse stock split),
recapitalization, reorganization or any similar transaction
which has the effect of reducing the number of outstanding
shares of the Common Stock, unless the failure so to increase
such annual rate is approved by a majority of the Disinterested
Directors; and (c) such Interested Stockholder shall have not
become the beneficial owner of any additional shares of Voting
Stock except as part of the transaction which resulted in such
Interested Stockholder becoming an Interested Stockholder.
(e) After such Interested Stockholder has become an
Interested Stockholder, such Interested Stockholder shall not
have received the benefit, directly or indirectly (except
proportionately, solely in such Interested Stockholder's
capacity as a stockholder of the Corporation), of any loans,
advances, guaranties, pledges or other financial assistance or
any tax credits or other tax advantageous provided by the
Corporation, whether in anticipation of or in connection with
such Business Combination or otherwise.
(f) A proxy or information statement describing the
proposed Business Combination in accordance with the
requirements of the 1934 Act (or any subsequent provisions
replacing such Act) shall be mailed to all Stockholders of the
Corporation at least thirty (30) days prior to the consummation
of such Business Combination (whether or not such proxy or
information statement is required to be mailed pursuant to such
Act or subsequent provisions). The first page of such proxy or
information statement shall prominently display the
recommendation, if any, which a majority of the Disinterested
Directors then in office may choose to make to the holders of
Capital Stock regarding the proposed Business Combination. Such
proxy or information statement shall also contain, if a majority
of the Disinterested Directors then in office so request, an
opinion of a reputable investment banking firm of recognized
national standing (which firm shall be selected by a majority of
the Disinterested Directors then in office, furnished with all
information it reasonably requests, and paid a reasonable fee
for its services by the Corporation upon the Corporation's
receipt of such opinion) as to the fairness (or lack of
fairness) of the terms of the proposed Business Combination from
the point of view of the holders of Capital Stock other than the
Interested Stockholder.
(g) For purposes of this Article XI, the following
definitions shall apply:
(i) The term "Business Combination" shall mean any
transaction referred to any one or more of the following
clauses:
(aa) Any merger or consolidation of the
Corporation or any Subsidiary with (1) any
Interested Stockholder or (2) any other corporation
(whether or not itself an Interested Stockholder)
which is, or after such merger or consolidation
would be, an Affiliate or an Associate of any
Interested Stockholder; or
<PAGE>
(bb) Any sale, lease, exchange, mortgage,
pledge, transfer or other disposition (in one
transaction or a series of transactions) to or with
any Interested Stockholder or any Affiliate or
Associate of any Interested Stockholder of any
assets of the Corporation or any Subsidiary having
an aggregate Fair Market Value of $25,000,000 or
more; or
(cc) The issuance or transfer by the
Corporation or any Subsidiary (in any one
transaction or a series of transactions) of any
Securities of the Corporation or any Subsidiary
having an aggregate Fair Market Value of $25,000,000
or more to any Interested Stockholder or any
Affiliate or Associate of any Interested
Stockholder; or
(dd) The adoption of any plan or proposal for
the liquidation or dissolution of the Corporation
proposed by or on behalf of any Interested
Stockholder or any Affiliate or Associate of any
Interested Stockholder; or
(ee) Any reclassification of Securities
(including any reverse stock split), or
recapitalization of the Corporation, or any merger
or consolidation of the Corporation with any of its
Subsidiaries of any other transaction (whether or
not with or into or otherwise involving an
Interested Stockholder) which has the effect,
directly or indirectly, of increasing the
proportionate share of the outstanding shares of any
class of equity or convertible Securities of the
Corporation or any Subsidiary which is directly or
indirectly owned by any Interested Stockholder or an
Affiliate of any Interested Stockholder; or
(ff) Any series or combination of
transactions directly or indirectly having the same
effect as any of the foregoing.
(ii) "Interested Stockholder" shall mean any person
(other than the Corporation, any Subsidiary, or any
pension, savings or other employee benefit plan for the
benefit of employees of the Corporation and/or any
Subsidiary) who or which: (aa) is the beneficial owner,
directly or indirectly, of more than 10% of the
Corporation's outstanding Voting Stock; or (bb) is an
Affiliate or Associate of the Corporation and at any time
within the two-year period immediately prior to the date
in question was a beneficial owner, directly or
indirectly, of 10% or more of the Corporation's then
outstanding Voting Stock; or (cc) is an assignee of or has
otherwise succeeded to any shares of Voting Stock which
were at any time within the two-year period immediately
prior to the date in question beneficially owned by any
other Interested Stockholder, if such assignment or
succession shall have occurred in the course of a
transaction or series of transactions not involving a
public offering within the meaning of the 1933 Act.
(iii) A person shall be deemed the "beneficial
owner" of any Voting Stock; (aa) which such person or any
of its Affiliates or Associates owns, directly or
indirectly; or (bb) which such person or any of its
Affiliates or Associates has (y) the right to acquire
(whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement,
arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options,
or otherwise, or (z) the right to vote pursuant to any
agreement, arrangement or understanding; or (cc) which is
beneficially owned, directly or indirectly, by any other
person with which such person or any of its Affiliates or
Associates has any agreement, arrangement or understanding
for the purpose of acquiring, holding, voting or disposing
of any shares of Capital Stock.
<PAGE>
(iv) In determining whether a person is an
Interested Stockholder pursuant to Subparagraph (g)(ii) of
this Article XI, the number of shares of Voting Securities
deemed to be outstanding shall include shares deemed owned
through application of Subparagraph (g)(iii) of this
Article XI, but shall not include any other shares of
Voting Stock which may be issuable pursuant to any
agreement, arrangement or understanding, or upon exercise
of conversion rights, warrants or options, or otherwise.
(v) "Subsidiary" means any corporation of which a
majority of any class of equity security is owned,
directly or indirectly, by the Corporation; provided,
however, that for the purpose of the definition of
Interested Stockholder set forth in Subparagraph (g)(ii)
of this Article XI, the term "Subsidiary" shall mean only
a corporation of which a majority of each class of Voting
Securities is owned, directly or indirectly, by the
Corporation.
(vi) "Disinterested Director" means any member of
the Board of Directors of the Corporation who is not
affiliated with the Interested Stockholder and who either
was a member of the Board of Directors prior to the
Determination Date or was elected or recommended for
election by majority of the Disinterested Directors in
office at the time such Director was nominated for
election.
(vii) "Fair Market Value" means: (aa) in the case
of stock, the highest closing sale price during the 30-day
period immediately preceding the date in question of a
share of such stock on the composite tape for the New York
Stock Exchange listed stocks, or, if such stock is not
quoted on the composite tape, on the New York Stock
Exchange, or, if such stock is not listed or admitted for
trading on such exchange, on the principal United States
Securities Exchange registered under the 1934 Act on which
such stock is listed or admitted for trading, or, if such
stock is not listed or admitted for trading on any such
exchange, the highest closing sale price (if applicable)
or bid quotation with respect to a share of such stock
during the 30-day period preceding the date in question on
the National Association of Securities Dealers, Inc.
automated quotations system or any system then in use, or
if no such quotations are available, the Fair Market Value
on the date in question of a share of such stock as
determined in good faith by a majority of the
Disinterested Directors then in office, in each case with
respect to any class or series of stock, appropriately
adjusted for any dividend or distribution in shares of
such stock or any stock split or reclassification of
outstanding shares of such stock into a greater number of
shares of such stock or any combination or
reclassification of outstanding shares of such stock into
a smaller number of shares of such stock; and (bb) in the
case of property other than cash or stock, the Fair Market
Value of such property on the date in question as
determined in good faith by a majority of the
Disinterested Directors then in office.
(viii) Reference to "highest per share price" shall
in each case with respect to any class or series of stock
reflect an appropriate adjustment for any dividend or
distribution in shares of such stock or any stock split or
reclassification of outstanding shares of such stock into
a greater number of shares of such stock or any
combination or reclassification of outstanding shares of
such stock into a smaller number of shares of such stock.
<PAGE>
(ix) In the event on any Business Combination in
which the Corporation survives, the phrase "consideration
other than cash to be received" as used in Paragraphs
B(2)(a) and (b) of this Article XI, shall include the
shares of Common Stock and/or shares of any other class or
series of Capital Stock retained by the holders of such
shares.
(x) "Capital Stock" shall mean all capital stock of
the Corporation issued from time to time under Article III
of the Corporation's Restated Articles of Incorporation.
ARTICLE XII
These Restated Articles of Incorporation supersede and take the place
of the heretofore existing Articles of Incorporation of the Corporation and
amendments thereto.
Executed in duplicate this 25th day of March, 1994.
MARSHALL & ILSLEY CORPORATION
By: /s/ James B. Wigdale
_________________________________
James B. Wigdale, Chairman
Attest: /s/ M.A. Hatfield
_______________________________
M.A. Hatfield, Secretary
This instrument was drafted by:
Scott A. Moehrke
Godfrey & Kahn, S.C.
780 North Water Street
Milwaukee, Wisconsin 53202-3590
<PAGE>
Updated through
06/23/94
BY-LAWS
MARSHALL & ILSLEY CORPORATION
1. OFFICES
1.1. Principal and Other Offices. The principal office of the
Corporation shall be located at any place either within or outside the State of
Wisconsin as shall be designated in the Corporation's most recent annual report
filed with the Wisconsin Secretary of State. The executive offices of the
Corporation shall be located at its principal office. The Corporation may have
such other offices, either within or without the State of Wisconsin, as the
Board of Directors may designate or as the business of the Corporation may
require from time to time.
1.2. Registered Office. The registered office of the Corporation
required by the Wisconsin Business Corporation Law (the "WBCL") to be maintained
in the State of Wisconsin may be, but need not be, the same as any of its places
of business within the State of Wisconsin. The registered office may be changed
from time to time as provided in Section 180.0502 of the WBCL or any successor
thereto.
2. SHAREHOLDERS
2.1. Annual Meeting. The annual meeting of shareholders shall be
held on the fourth Tuesday in the month of April in each year at 10 A.M., or at
such other time and/or date as shall be fixed by the Secretary of the
Corporation or the Board of Directors, for the purposes of electing directors
and for the transaction of such other business as may have been properly brought
before the meeting in compliance with the provisions of Section 2.5 of the
By-laws. If the day fixed for the annual meeting shall be a legal holiday in
the State of Wisconsin, such meeting shall be held on the next succeeding
business day.
2.2. Special Meetings. Except as otherwise provided by the WBCL
and subject to the rights of the holders of any class of series of capital stock
having a preference over the common stock as to dividends or upon liquidation,
special meetings of shareholders of the Corporation may be called only by the
Chief Executive Officer or the President of the Corporation pursuant to a
resolution approved by not less than three-quarters of the Board of Directors.
<PAGE>
2.3. Place of Meeting. The Board of Directors, Chief Executive
Officer or President may designate any place, within or without the State of
Wisconsin, as the place of meeting for the annual meeting or for any special
meeting. If no designation is made, the place of meeting shall be the principal
office of the Corporation. Any meeting may be adjourned to reconvene at any
place designated by vote of a majority of the shares represented at the meeting.
2.4. Notice of Meeting. The Corporation shall notify shareholders
of the date, time and place of each annual and special shareholders' meeting not
less than ten nor more than sixty days before the date of the meeting. Notice
of a special meeting shall include a description of each purpose for which the
meeting is called. Notice of the meeting shall be given only to those
shareholders entitled to vote at the meeting, unless otherwise required by the
law. Notice may be communicated in person, by telephone, telegraph, teletype,
facsimile or other forms of wire or wireless communication, or by mail or
private carrier. Written notice to a shareholder shall be deemed to be
effective on the earlier of: (a) the date received; (b) the date it is
deposited in the United States mail when addressed to the shareholder's address
shown in the Corporation's current record of shareholders, with postage prepaid;
(c) on the date shown on the return receipt, if sent by registered or certified
mail, return receipt requested, and the receipt is signed by or on behalf of the
addressee; (d) the date sent, if transmitted by telegraph, teletype, facsimile
or other form of wire or wireless communication; or (e) the date delivered to
a courier or deposited in a designated receptacle, if sent by private carrier,
when addressed to the shareholder's address shown in the Corporation's current
record of shareholders.
2.5. Advance Notice of Shareholder-Proposed Business at Annual
Meetings. At an annual meeting of shareholders, only such business shall be
conducted as shall have been properly brought before the meeting. To be
properly brought before an annual meeting, business must be either (a) specified
in the notice of meeting (or any supplement thereto) given in accordance with
Section 2.4 of these By-laws, (b) otherwise properly brought before the meeting
by or at the direction of the Board of Directors, the Chief Executive Officer
or the President, or (c) otherwise properly brought before the meeting by a
shareholder. In addition to any other applicable requirements for business to
be properly brought before an annual meeting by a shareholder, the shareholder
must have given timely notice of such business in writing to the Secretary of
the Corporation. To be timely, a shareholder's notice must be delivered to or
mailed and received at the principal executive offices of the Corporation, not
<PAGE>
less than 60 days prior to the date fixed for such meeting in accordance with
Section 2.1 of these By-laws. A shareholder's notice to the Secretary of the
Corporation shall set forth as to each matter the shareholder proposes to bring
before the annual meeting (i) a brief description of the business desired to be
brought before the annual meeting and the reasons for conducting such business
at the annual meeting, (ii) the name and record address of the shareholder
proposing such business, (iii) the class and number of shares of the Corporation
which are beneficially owned by the shareholder, and (iv) any material interest
of the shareholder in such business. In addition, any such shareholders shall
be required to provide such further information as may be requested by the
Corporation in order to comply with federal securities laws, rules and
regulations.
Notwithstanding anything contained in these By-laws to the contrary,
no business shall be conducted at the annual meeting except in accordance with
the procedures set forth in this Section 2.5; provided, however, that nothing
in this Section 2.5 shall be deemed to preclude discussion by any shareholder
of any business properly brought before the annual meeting in accordance with
said procedure.
The chairman of an annual meeting shall, if the facts warrant,
determine and declare to the meeting that business was not properly brought
before the meeting in accordance with the provisions of this Section 2.5, and
if he should so determine, he shall so declare to the meeting and any such
business not properly brought before the meeting shall not be transacted.
2.6. Procedure for Nomination of Directors. Only persons nominated
in accordance with the following procedures shall be eligible for election as
directors, except as may otherwise be provided by the terms of the Corporation's
Amended and Restated Articles of Incorporation (the "Articles") with respect to
the rights of holders of any class or series of preferred stock to elect
directors under specified circumstances. Nominations of persons for election
to the Board of Directors of the Corporation may be made at a meeting of
shareholders by or at the direction of the Board of Directors, by any nominating
committee or persons appointed by the Board, or by any shareholder of the
Corporation entitled to vote for election of directors at the meeting who
complies with the notice procedures set forth in this Section 2.6.
Nominations other than those made by or at the direction of the
Board of Directors or any nominating committee or person appointed by the Board
shall be made pursuant to timely notice in proper written form to the Secretary
<PAGE>
of the Corporation. To be timely, a shareholder's request to nominate a person
for election to the Board of Directors, together with the written consent of
such person to serve as a director, must be received by the Secretary of the
Corporation not less than 30 days prior to the date fixed for such meeting. To
be in proper written form, such shareholder's notice shall set forth in writing
(a) as to each person whom the shareholder proposes to nominate for election or
re-election as a director, (i) the name, age, business address and residence
address of such person, (ii) the principal occupation or employment of such
person, (iii) the class and number of shares of capital stock of the Corporation
which are beneficially owned by such person and (iv) such other information
relating to such person as is required to be disclosed in solicitations of
proxies for election of directors, or as otherwise required, in each case
pursuant to Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended; and (b) as to the shareholder giving the notice, (i) the name
and address, as they appear on the Corporation's books, of such shareholder and
(ii) the class and number of shares of capital stock of the Corporation which
are beneficially owned by such shareholder. The Corporation may require any
proposed nominee to furnish such other information as may reasonably be required
by the Corporation to determine the eligibility of such proposed nominee to
serve as a director of the Corporation. No persons shall be eligible for
election as a director of the Corporation unless nominated in accordance with
the procedures set forth herein and in the Articles. The Chairman of any
meeting of shareholders shall, if the facts so warrant, determine and declare
to the meeting that a nomination was not made in accordance with the procedures
prescribed by the Articles and these By-laws; and if he should so determine, he
shall so declare to the meeting and the defective nomination(s) shall be
disregarded.
2.7. Fixing of Record Date. For the purpose of determining any
voting group entitled to notice of or to vote at any meeting of shareholders,
or shareholders entitled to receive any distribution or dividend from the
Corporation, or in order to determine those shareholders entitled to take any
other action authorized by these By-laws or the WBCL, the Board of Directors may
fix in advance a date as the record date for any such determination of
shareholders. Such record date shall not be more than 70 days prior to the date
on which the particular action, requiring such determination of shareholders,
is to be taken. If no record date is so fixed for the determination of
shareholders entitled to notice of, or to vote at a meeting of shareholders, or
shareholders entitled to receive a dividend or any other distribution, the
record date for determination of such shareholders shall be at the close of
business on:
<PAGE>
(a) with respect to an annual shareholders' meeting or any
special shareholders' meeting called by the Board of Directors or any
person specifically authorized by these By-laws to call a meeting, the
day before the first notice is given to shareholders;
(b) with respect to a special shareholders' meeting demanded
by one or more shareholders, the date the first shareholder signs a
demand for the special meeting;
(c) with respect to the payment of a dividend, the date the
Board of Directors authorizes the dividend; and
(d) with respect to any other distribution to shareholders,
other than one involving a repurchase or reacquisition of shares, the
date the Board of Directors authorizes the distribution.
When a determination of shareholders entitled to notice of or to vote at any
meeting of shareholders has been made as provided in this section, such
determination shall be applied to any adjournment thereof unless the Board of
Directors fixes a new record date, which it shall do if the meeting is adjourned
to a date more than 120 days after the date fixed for the original meeting.
2.8. Shareholders' List. After fixing a record date for a meeting
of shareholders, the Corporation shall prepare a list of the names of all its
shareholders who are entitled to notice of a shareholders' meeting. The list
shall be arranged by class or series of shares and show the address of and the
number of shares held by each shareholder. The shareholder list shall be
available for inspection by any shareholder beginning two business days after
notice of the meeting is given for which the list was prepared and continuing
through the meeting. The list shall be available at the Corporation's principal
office or at a place identified in the meeting notice in the city where the
meeting is to be held. A shareholder, or his or her agent or attorney, is
entitled, on written demand, to inspect and to copy the list during regular
business hours and at his expense, during the period it is available for
inspection, provided the shareholder, or his or her agent or attorney,
demonstrates to the satisfaction of the Corporation he or she satisfies the
requirements of the WBCL. The Corporation shall make the shareholders' list
available at the meeting and shall be subject to the inspection of any
shareholder, or his or her agent or attorney, during the time of the meeting or
any adjournment thereof. Refusal or failure to prepare or make available the
<PAGE>
shareholders' list shall not affect the validity of any action taken at such
meeting.
2.9. Quorum; Votes. Shares entitled to vote as a separate voting
group may take action on a matter at a meeting only if a quorum of those shares
exists with respect to that matter. Unless the Articles or the WBCL provides
otherwise, a majority of the votes entitled to be cast on the matter by the
voting group constitutes a quorum of that voting group for action on that
matter.
If the Articles or the WBCL provide for voting by two or more voting
groups on a matter, action on that matter is taken only when voted upon by each
of those voting groups counted separately. Action may be taken by one voting
group on a matter even though no action is taken by another voting group
entitled to vote on the matter.
Once a share is represented for any purpose at a meeting, other than
for the purpose of objecting to holding the meeting or transacting business at
the meeting, it is deemed present for purposes of determining whether a quorum
exists for the remainder of the meeting and for any adjournment of that meeting
unless a new record date is or must be set for that adjourned meeting. If a
quorum exists, action on a matter by a voting group is approved if the votes
cast within the voting group favoring the action exceed the votes cast opposing
the action, unless the Articles or the WBCL requires a greater number of
affirmative votes, provided, however, that unless otherwise provided in the
Articles, directors are elected by a plurality of the votes cast by the shares
entitled to vote in the election at a meeting at which a quorum is present.
2.10. Proxies. At all meetings of shareholders, a shareholder
entitled to vote may vote by proxy appointed in writing by the shareholder or
by his duly authorized attorney in fact. Such proxy shall be filed with the
Secretary of the Corporation before or at the time of the meeting. No proxy
shall be valid after eleven months from the date of its execution, unless
otherwise provided in the proxy.
2.11. Voting Shares Owned by the Corporation. Shares of the
Corporation belonging to it shall not be voted directly or indirectly at any
meeting of shareholders and shall not be considered in determining whether a
quorum exists or for any other purpose relating to the voting of shares.
Notwithstanding the foregoing, shares held by the Corporation in a fiduciary
capacity are outstanding shares and may be voted and shall be considered in any
such determination.
<PAGE>
2.12. Shares in the Name of Another Corporation or a Trustee.
Shares issued in the name of another corporation may be voted by the president
of such corporation, or any other officer or proxy appointed by such president
in the absence of express written notice to the Corporation of the designation
of some other person by the board of directors or by-laws of such other
corporation. Shares in the name of a trustee shall be voted in the manner
designated by a majority of the trustees or their proxy unless a greater
concurrence of trustees is required by the trust, of which the Corporation shall
have actual notice.
2.13. Adjournments. An annual or special meeting of shareholders
may be adjourned by a vote of a majority of the shares represented at the
meeting entitled to vote in the election of directors, even if less than a
quorum. Upon being reconvened, the adjourned meeting shall be deemed to be a
continuation of the initial meeting. A quorum will be deemed present if a
quorum of shares was represented at the initial meeting and any business that
could be conducted at the initial meeting may be considered at the adjourned
meeting. A meeting may be adjourned at any time, including after action on one
or more matters, and for any purpose, including, but not limited to, allowing
additional time to solicit votes on one or more matters, to disseminate
additional information to shareholders or to count votes. Notice is not
required for an adjourned meeting if the date, time and place of the adjournment
are announced at the meeting before adjournment. If a new record date for an
adjourned meeting is fixed, notice of the adjourned meeting must be given to
persons who are shareholders as of the new record date. Only those shares
entitled to vote at the initial meeting will be entitled to vote at the
adjourned meeting.
2.14. Polling. In the discretion of the chairman of an annual or
special meeting of shareholders, polls may be closed at any time after
commencement of the meeting. When there are several matters to be considered
at a meeting, the polls may remain open during the meeting as to any or all
matters to be considered, as the chairman may declare. Polls will remain open
as to matters to be considered at any adjournment of the meeting unless the
chairman declares otherwise. At the discretion of the chairman, the polls may
remain open after adjournment of a meeting for not more than 72 hours for the
purpose of collecting proxies and counting votes. All votes submitted prior to
the announcement of the results of the balloting shall be valid and counted.
The results of balloting shall be final and binding after announcement of such
results.
2.15 Chairman of Meetings. The Chairman of the Board or, in his
absence or inability or refusal to act, the Chairman of the Executive Committee,
<PAGE>
shall preside at all meetings of the shareholders.
3. BOARD OF DIRECTORS
3.1. General Powers. All corporate powers shall be exercised by
or under the authority of, and the business and affairs of the Corporation
managed under the direction of, its Board of Directors, subject to any
limitations set forth in the Articles.
3.2. Number, Tenure and Qualifications. The number of directors
(exclusive of directors, if any, elected by the holders of one or more series
of preferred stock, voting separately as a series pursuant to the provisions of
the Articles applicable thereto) shall not be less than three directors, the
exact number of directors to be determined from time to time by resolution
adopted by affirmative vote of a majority of the entire Board of Directors then
in office. The directors shall be divided into three classes, designated Class
I, Class II and Class III, and the term of directors of each class shall be
three years. Each class shall consist, as nearly as possible, of one-third of
the total number of directors constituting the entire Board of Directors. If
the number of directors is changed by resolution of the Board of Directors
pursuant to this Section 3.2, any increase or decrease shall be apportioned
among the various classes of directors so as to maintain the number of directors
in each class as nearly equal as possible, but in no case shall a decrease in
the number of directors shorten the term of any incumbent director. A director
shall hold office until the annual meeting for the year in which his term
expires and until his successor shall be duly elected and shall qualify.
Directors need not be residents of the State of Wisconsin or shareholders of the
Corporation. No person shall be eligible to be elected a director at any
meeting of shareholders held on or after the date he attains age seventy-two
(72). The Board of Directors, at its discretion, may waive the age limitation
or establish a greater age from time to time. The Board of Directors, at its
discretion, may designate a person who has served as a director of the
Corporation as a "Director Emeritus" upon such terms and conditions and at such
compensation as may be fixed by resolution of the Board from time to time. A
Director Emeritus shall have the right to attend meetings of the Board of
Directors but shall have no vote and shall not be counted in determining the
presence of a quorum.
Notwithstanding the foregoing, whenever the holders of any one or
more classes or series of preferred stock issued by the Corporation shall have
the right, voting separately by class or series, to elect directors at an annual
<PAGE>
or special meeting of shareholders, the election, term of office, filling of
vacancies and other features of such directorships shall be governed by the
terms of the Articles applicable thereto. Directors so elected shall not be
divided into classes unless expressly provided by such Articles, and during the
prescribed terms of office of such directors, the Board of Directors shall
consist of such directors in addition to the number of directors determined as
provided in the first paragraph of this Section 3.2.
3.3. Regular Meeting. A regular meeting of the Board of Directors
shall be held, without other notice, immediately after and at the same place as
the annual meeting of shareholders, and each adjourned session thereof. The
Board of Directors may provide, by resolution, the time and place for the
holding of additional regular meetings without other notice than such
resolution.
3.4. Special Meetings. Special meetings of the Board of Directors
may be called by or at the request of the Chairman of the Board, President,
Secretary or three-quarters of the members of the Board of Directors. The
person or persons authorized to call special meetings of the Board of Directors
may fix any place either within or without the State of Wisconsin as the place
for holding any special meeting of the Board of Directors called by them.
3.5. Notice. Notice of meetings of the Board of Directors may be
communicated in person, by telephone, telegraph, teletype, facsimile or other
form of wire or wireless communication, or by mail or private carrier. Notice
of meetings, except the regular annual meeting, shall be given at least 48 hours
prior to the time set for the meeting if communicated orally or by telegraph,
teletype, facsimile or other form of wire or wireless communication, and at
least 5 days prior to the date set for the meeting if communicated by any other
means. Written notice shall be deemed effective and given on the earlier of:
(a) when received; (b) 2 days after the date it is deposited in the United
States mail, with postage prepaid, when addressed to the director at an address
designated by him to receive such notice or, in the absence of such designation,
at his business or home address as they appear in the Corporation's records; (c)
the date and time sent, if transmitted by telegraph, teletype, facsimile or
other form of wire or wireless communication when sent to the director at a
location designated by the director to receive such notice or, in the absence
of such designation, at his business or home as those locations appear in the
Corporation's records; or (d) the date delivered to a courier or deposited in
a designated receptacle, if sent by private carrier, when addressed to the
<PAGE>
director at an address designated by him to receive such notice or, in the
absence of such designation, at his business or home address as it appears in
the Corporation's records. Oral notice shall be deemed effective when
communicated. Whenever any notice whatever is required to be given to any
director of the Corporation under these By-laws, the Articles or under the
provisions of any statute, a waiver thereof in writing, signed at any time
whether before or after the time of meeting, by the director entitled to such
notice, shall be deemed equivalent to timely notice. A director's attendance
at, or participation in, a meeting waives any required notice unless the
director at the beginning of the meeting or promptly upon his or her arrival
objects to holding the meeting or transacting business at the meeting and does
not thereafter vote for or assent to action taken at the meeting. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the Board of Directors need be specified in the notice or waiver of such
meeting.
3.6. Quorum; Votes. A majority of the number of directors in
accordance with Section 3.2 shall constitute a quorum for the transaction of
business at any meeting of the Board of Directors, but though less than such
quorum is present at a meeting, a majority of the directors present may adjourn
the meeting from time to time without further notice. The affirmative vote of
a majority of directors present shall be the act of the Board of Directors, or
a committee of the Board of Directors created under Section 3.11, unless the
Articles or these By-laws require the vote of a greater number of directors.
3.7. Removal and Resignation. Exclusive of directors, if any,
elected by the holders of one or more classes of preferred stock, no director
of the Corporation may be removed from office except for "Cause" and by the
affirmative vote of two-thirds of the outstanding shares of capital stock of the
Corporation entitled to vote at a meeting of shareholders duly called for such
purpose. As used in this Section 3.7, the term "Cause" shall mean solely
malfeasance arising from the performance of a director's duties which has a
materially adverse effect on the business of the Corporation. A director may
resign at any time by delivering written notice to the Board of Directors,
Chairman of the Board or to the Corporation.
3.8. Vacancies. Any vacancy on the Board of Directors, however
caused, including, without limitation, any vacancy resulting from an increase
in the number of directors, shall be filled by the vote of a majority of the
directors then in office, although less than a quorum, or by a sole remaining
director. Any director so elected to fill any vacancy on the Board of
<PAGE>
Directors, including a vacancy created by an increase in the size of the Board
of Directors, shall hold office for the remaining term of directors of the class
to which he has been elected and until his successor shall be elected and shall
qualify.
3.9. Compensation. The Board of Directors, by affirmative vote of
a majority of the directors then in office, and irrespective of any personal
interest of any of its members, may establish reasonable compensation of all
directors for services to the Corporation as directors or otherwise, or may
delegate such authority to an appropriate committee.
3.10. Presumption of Assent. A director of the Corporation who is
present at a meeting of the Board of Directors or a committee thereof at which
action on any corporate matter is taken shall be presumed to have assented to
the action taken unless: (a) the director objects at the beginning of the
meeting (or promptly upon his arrival) to holding the meeting or transacting
business at the meeting; or (b) the director dissents or abstains from an action
taken and minutes of the meeting are prepared that show the director's dissent
or abstention from the action taken; or (c) the director delivers written notice
of his dissent or abstention to the presiding officer of the meeting before its
adjournment or to the Corporation immediately after adjournment of the meeting;
or (d) the director dissents or abstains from an action taken, minutes of the
meeting are prepared that fail to show the director's dissent or abstention from
the action taken and the director delivers to the Corporation a written notice
of that failure promptly after receiving the minutes. Such right to dissent
shall not apply to a director who voted in favor of such action.
3.11. Committees. The Board of Directors, by resolution adopted
by the affirmative vote of a majority of the number of directors then in office,
may designate one or more committees, each committee to consist of two or more
directors elected by the Board of Directors. The Board of Directors may elect
one or more of its members as alternate members of any such committee and such
alternate member may take the place of any absent member or members at any
meeting of such committee upon request of the Chairman of the Board or upon
request of the chairman of such meeting. Unless limited by the Articles, each
committee may exercise those aspects of the authority of the Board of Directors
which are within the scope of the committee's assigned responsibilities or which
the Board of Directors otherwise specifically confers upon such committee;
provided, however, that no committee of the Board may do any of the following:
<PAGE>
(a) authorize distributions;
(b) approve or propose to shareholders action that the WBCL
requires be approved by shareholders;
(c) fill vacancies on the Board of Directors or on any of
its committees, unless the Board of Directors has specifically granted
such authority to the committee;
(d) amend the Articles;
(e) adopt, amend, or repeal these By-laws;
(f) approve a plan of merger not requiring shareholder
approval;
(g) authorize or approve reacquisition of shares, except
according to a formula or method prescribed by the Board of Directors; or
(h) authorize or approve the issuance or sale or contract
for sale of shares or determine the designation and relative rights,
preferences, and limitations of a class or series of shares, except that
the Board of Directors may authorize a committee (or a senior executive
officer of the Corporation) to do so within limits specifically
prescribed by the Board of Directors.
3.12. Informal Action Without Meeting. Any action required or
permitted by the Articles or these By-laws or any provision of law to be taken
by the Board of Directors or a committee at a meeting may be taken without a
meeting if the action is taken by all members of the Board of Directors. The
action shall be evidenced by one or more written consents describing the action
taken, signed by each director and retained by the Corporation.
3.13. Telephonic Meetings. Any or all directors may participate
in a regular or special meeting by, or conduct the meeting through the use of,
any means of communication which allows all directors participating to
simultaneously hear each other during the meeting. In the case of any such
meeting all participating directors must be informed that a meeting is taking
place at which official business may be transacted. A director participating
in a meeting by this means is deemed to be present in person at the meeting.
3.14 Chairman of Meetings. The Chairman of the Board or, in his
absence or inability or refusal to act, the Chairman of the Executive Committee,
<PAGE>
shall preside at all meetings of the Board of Directors.
4. OFFICERS
4.1. Number. The principal officers of the Corporation shall be
a Chairman of the Board, a Vice Chairman of the Board, a Chief Executive
Officer, a President, one or more Vice Presidents, any one of whom may be
designated as Executive Vice President, and a Secretary, each of whom shall be
elected by the Board of Directors. Such other officers and assistant officers
as may be deemed necessary may be elected or appointed by the Board of
Directors.
4.2. Election and Term of Office. The officers of the Corporation
to be elected by the Board of Directors shall be elected annually by the Board
of Directors at the first meeting of the Board of Directors held after the
annual meeting of the shareholders. If the election of officers shall not be
held at such meeting, such election shall be held as soon thereafter as
convenient. Each officer shall hold office until his successor shall have been
duly elected or until his death or until he shall resign or shall have been
removed in the manner hereinafter provided.
4.3. Removal. Any officer or agent elected or appointed by the
Board of Directors may be removed by the Board of Directors whenever in its
judgment the best interests of the Corporation will be served thereby, but such
removal shall be without prejudice to the contract rights, if any, of the person
so removed. Election or appointment shall not of itself create contract rights.
4.4. Vacancies. A vacancy in any principal office occurring for
any reason shall be filled by the Board of Directors for the unexpired portion
of the term as soon as reasonably practicable at the convenience of the Board.
4.5. Chairman of the Board. The Chairman of the Board shall have
such duties as the Board of Directors shall prescribe from time to time.
4.6. Vice Chairman of the Board. The Vice Chairman of the Board
shall be responsible for the administration and management of the areas of the
business and affairs of the Corporation assigned to him from time to time by the
Board of Directors or the Chief Executive Officer.
<PAGE>
4.7. Chief Executive Officer. The Chief Executive Officer shall
be the principal executive officer of the Corporation and, subject to the
control of the Board of Directors, shall have general supervision and control
of the business and affairs of the Corporation and its officers. The Chief
Executive Officer shall have the authority, subject to such rules as may be
prescribed by the Board of Directors, to appoint such agents and employees of
the Corporation as the Chief Executive Officer deems necessary, prescribe their
powers, duties and compensation, and delegate authority to them. Such agents
and employees shall hold offices at the discretion of the Chief Executive
Officer. The Chief Executive Officer shall have authority to sign, execute and
acknowledge, on behalf of the Corporation, all deeds, mortgages, bonds, stock
certificates, contracts, leases, reports and all other documents or instruments
necessary or proper to be executed in the course of the Corporation's regular
business or which shall be authorized by the Board of Directors. Except as
otherwise provided by the WBCL or the Board of Directors, the Chief Executive
Officer may authorize any other officer or agent of the Corporation to sign,
execute and acknowledge such documents or instruments in his place and stead.
In general, the Chief Executive Officer shall have all authority and perform all
duties incident to the office of the chief executive officer and such other
duties as may be prescribed by the Board of Directors from time to time.
4.8. President. In the absence of the Chief Executive Officer or
in the event of his death, inability or refusal to act, the President shall
perform the duties of the Chief Executive Officer, and when so acting shall have
all the powers and duties of the Chief Executive Officer. In addition, the
President shall be responsible for the administration and management of the
areas of the business and affairs of the Corporation assigned to him from time
to time by the Board of Directors or the Chief Executive Officer.
4.9. Vice Presidents. One or more of the Vice Presidents may be
designated as Executive Vice President. In the absence of the President or in
the event of his death, inability or refusal to act, the Vice Presidents in the
order designated at the time of their election (or in the absence of any
designation, then in the order of their appointment), shall perform the duties
of the President and when so acting shall have all the powers of and be subject
to all the restrictions upon the President. Any Vice President may sign with
the Secretary or Assistant Secretary certificates for shares of the Corporation
and shall perform such other duties as from time to time may be assigned to him
by the Chief Executive Officer, the President or the Board of Directors.
<PAGE>
4.10. Secretary. The Secretary shall: (a) keep the minutes of the
shareholders' and of the Board of Directors' meetings in one or more books
provided for that purpose; (b) see that all notices are duly given in accordance
with the provisions of these By-laws or as required by the WBCL; (c) be
custodian of the corporate records and of the seal of the Corporation and see
that the seal of the Corporation is affixed to all documents, the execution of
which on behalf of the Corporation under its seal is duly authorized; (d) keep
a register of the post office address of each shareholder which shall be
furnished to the Secretary by such shareholder or delegate that responsibility
to a stock transfer agent; (e) sign with the President or a Vice President
certificates for shares of the Corporation, the issuance of which shall have
been authorized by resolution of the Board of Directors; and (f) in general have
all authority and perform all duties incident to the office of Secretary and
such other duties as from time to time may be assigned to him by the Chief
Executive Officer or by the Board of Directors.
4.11. Assistant Secretaries. The Assistant Secretaries, when
authorized by the Board of Directors, may sign with the President or a Vice
President certificates for shares of the Corporation, the issuance of which
shall have been authorized by a resolution of the Board of Directors. The
Assistant Secretaries, in general, shall have such authority and perform such
duties as shall be assigned to them by the Secretary, the President or the Board
of Directors.
4.12. Salaries. The salaries of the officers shall be fixed from
time to time by the Board of Directors or a committee authorized by the Board
to fix the same and no officer shall be prevented from receiving such salary by
reason of the fact that he is also a director of the Corporation or a member of
such a committee.
4.13. Voting of Stock in Other Corporations. The Board of
Directors by resolution shall from time to time designate one or more persons
who shall vote all stock held by this Corporation in any other corporation,
banking corporation or banking association. Such resolution may designate such
persons in the alternative and may empower them to execute proxies to vote in
their stead. Where time permits, however, the manner in which such shares shall
be voted shall be determined by the Board of Directors of this Corporation or
the appropriate committee thereof while the Board is not in session.
5. CERTIFICATES FOR SHARES AND THEIR TRANSFER
<PAGE>
5.1. Certificates for Shares. Subject to the requirements of the
WBCL, certificates representing shares of the Corporation shall be in such form
as shall be determined by the Board of Directors. Such certificates shall be
signed, either manually or by facsimile, by the President or a Vice President
and by the Secretary or an Assistant Secretary. All certificates for shares
shall be consecutively numbered or otherwise identified. The name and address
of the person to whom the shares represented thereby are issued, with the number
of shares and date of issue, shall be entered on the stock transfer books of the
Corporation. All certificates surrendered to the Corporation for transfer shall
be cancelled and no new certificate shall be issued until the former certificate
for a like number of shares shall have been surrendered and cancelled, except
that in the case of a lost, destroyed or mutilated certificate a new one may be
issued therefor upon such terms and indemnity to the Corporation as the Board
of Directors or the Secretary may prescribe.
5.2. Transfer of Shares. Transfer of shares of the Corporation
shall be made only on the stock transfer books of the Corporation by the holder
of record thereof or by his legal representative, who shall furnish proper
evidence of authority to transfer, or by his attorney thereunto authorized by
power of attorney duly executed and filed with the Secretary of the Corporation,
and on surrender for cancellation of the certificate for such shares.
5.3. Stock Regulations. The Board of Directors shall have the
power and authority to make all such further rules and regulations not
inconsistent with the WBCL as they may deem expedient concerning the issue,
transfer and registration of certificates representing shares of the
Corporation, including the appointment or designation of one or more stock
transfer agents and one or more stock registrars.
6. EMERGENCY BY-LAWS
Unless the Articles provide otherwise, the following provisions of
this Article 6 shall be effective during an "emergency" which is defined as a
catastrophic event that prevents a quorum of the Corporation's directors from
being readily assembled.
<PAGE>
During such emergency:
(a) Any one member of the Board of Directors or any one of
the following officers: Chief Executive Officer, President, any Vice-
President or Secretary, may call a meeting of the Board of Directors.
Notice of such meeting need be given only to those directors whom it is
practicable to reach, and may be given in any practical manner, including
by publication or radio. Such notice shall be given at least six hours
prior to the commencement of the meeting.
(b) One or more officers of the corporation present at the
emergency meeting of the Board of Directors, as is necessary to achieve
a quorum, shall be considered to be directors for the meeting, and shall
so serve in order of rank, and within the same rank, in order of
seniority. In the event that less than a quorum of the directors are
present (including any officers who are to serve as directors for the
meeting), those directors present (including the officers serving as
directors) shall constitute a quorum.
(c) The Board of Directors as constituted in paragraph (b),
and after notice as set forth in paragraph (a), may:
(1) prescribe emergency powers to any officer of the
corporation;
(2) delegate to any officer or director, any of the
powers of the Board of Directors;
(3) designate lines of succession of officers and
agents, in the event that any of them are unable to discharge their
duties;
(4) relocate the principal place of business, or
designate successive or simultaneous principal places of business;
and
(5) take any other action, convenient, helpful, or
necessary to carry on the business of the corporation.
Corporate action taken in good faith in accordance with this Article
6 binds the Corporation and may not be used to impose liability on a corporate
<PAGE>
director, officer, employee or agent.
7. GENERAL
7.1. Indemnify of Officers and Directors.
(a) Definitions to Indemnification and Insurance Provisions.
(1) "Director, Officer, Employee or Agent" means any
of the following: (i) a natural person who, is or was a director,
officer, employee or agent of the Corporation; (ii) a natural
person who, while a director, officer, employee or agent of the
Corporation, is or was serving either pursuant to the Corporation's
specific request or as a result of the nature of such person's
duties to the Corporation as a director, officer, partner, trustee,
member of any governing or decision making committee, employee or
agent of another corporation or foreign corporation, partnership,
joint venture, trust or other enterprise; (iii) a natural person
who, while a director, officer, employee or agent of the
Corporation, is or was serving an employee benefit plan because his
or her duties to the Corporation also impose duties on, or
otherwise involve services by, the person to the plan or to
participants in or beneficiaries of the plan; or (iv) unless the
context requires otherwise, the estate or personal representative
of a director, officer, employee or agent.
(2) "Liability" means the obligation to pay a
judgment, penalty, assessment, forfeiture or fine, including an
excise tax assessed with respect to an employee benefit plan, the
agreement to pay any amount in settlement of a Proceeding (whether
or not approved by a court order), and reasonable expenses and
interest related to the foregoing.
(3) "Party" means a natural person who was or is, or
who is threatened to be made, a named defendant or respondent in a
Proceeding.
(4) "Proceeding" means any threatened, pending or
completed civil, criminal, administrative or investigative action,
suit, arbitration or other proceeding, whether formal or informal
(including but not limited to any act or failure to act alleged or
<PAGE>
determined to have been negligent, to have violated the Employee
Retirement Income Security Act of 1974, or to have violated Section
180.40 [180.0826, 180.0832 and 180.0833] of the Wisconsin Statutes,
or any successor thereto, regarding improper dividends,
distributions of assets, purchases of shares of the Corporation, or
loans to officers), which involves foreign, federal, state or local
law and which is brought by or in the right of the Corporation or
by any other person or entity, to which the Director, Officer,
Employee or Agent was a party because he or she is a Director,
Officer, Employee or Agent.
(5) "Expenses" means all reasonable fees, costs,
charges, disbursements, attorneys' fees and any other expenses
incurred in connection with the Proceeding.
(b) Indemnification of Officers, Directors, Employees and
Agents.
(1) The Corporation shall indemnify a Director,
Officer, Employee or Agent to the extent he or she has been
successful on the merits or otherwise in the defense of any
Proceeding, for all reasonable Expenses.
(2) In cases not included under subsection (1), the
Corporation shall indemnify a Director, Officer, Employee or Agent
against Liability and Expenses incurred by such person in a
Proceeding unless it shall have been proven by final judicial
adjudication that such person breached or failed to perform a duty
owned to the Corporation which constituted:
(i) A willful failure to deal fairly with the
Corporation or its shareholders in connection with a matter
in which the Director, Officer, Employee or Agent has a
material conflict of interest;
(ii) A violation of criminal law, unless the
Director, Officer, Employee or Agent had reasonable cause to
believe his or her conduct was lawful or no reasonable cause
to believe his or her conduct was unlawful;
<PAGE>
(iii) A transaction from which the Director,
Officer, Employee or Agent derived an improper personal
profit; or
(iv) Willful misconduct.
(c) Determination that Indemnification is Proper.
(1) Unless provided otherwise by a written agreement
between the Director, Officer, Employee or Agent and the
Corporation, determination of whether indemnification is required
under Section (b) shall be made by any method set forth in Section
180.046 [180.0855] of the Wisconsin Statutes.
(2) A Director, Officer, Employee or Agent who seeks
indemnification under this section shall make a written request to
the Corporation. As a further pre-condition to any right to
receive indemnification, the writing shall contain a declaration
that the Corporation shall have the right to exercise all rights
and remedies available to such Director, Officer, Employee or Agent
against any other person, corporation, foreign corporation,
partnership, joint venture, trust or other enterprise, arising out
of, or related to, the Proceeding which resulted in the Liability
and the Expense for which such Director, Officer, Employee or Agent
is seeking indemnification, and that the Director, Officer,
Employee or Agent is hereby deemed to have assigned to the
Corporation all such rights and remedies.
(3) Indemnification under subsection (b)(1) shall be
made within 10 days of receipt of a written demand for
indemnification. Indemnification required under subsection (b)(2)
shall be made within 30 days of receipt of a written demand for
indemnification.
(4) Indemnification under this section is not required
to the extent the Director, Officer, Employee or Agent has
previously received indemnification or allowance of expenses from
any person or entity, including the Corporation, in connection with
the same Proceeding.
(5) Upon written request by a Director, Officer,
Employee or Agent who is a Party to a Proceeding, the Corporation
shall pay or reimburse his or her reasonable Expenses as incurred
<PAGE>
if the Director, Officer, Employee or Agent provides the
Corporation with all of the following:
(i) A written affirmation of his or her good
faith belief that he or she is entitled to indemnification
under Article 7.1; and
(ii) A written undertaking, executed personally
or on his or her behalf, to repay all amounts advanced
without interest to the extent that it is ultimately
determined that indemnification under 7.1(b)(2) is
prohibited.
The undertaking under this subsection shall be accepted
without reference to the Director's, Officer's, Employee's or
Agent's ability to repay the allowance. The undertaking
shall be unsecured.
(6) The right to indemnification under this Article
may be amended only by a subsequent vote of not less than two-
thirds of the Corporation's outstanding capital stock entitled to
vote on such matters. Any reduction in the right to
indemnification may only be prospective from the date of such vote.
(d) Insurance. The Corporation shall have the power to
purchase and maintain insurance on behalf of any person who is a
Director, Officer, Employee or Agent against any Liability asserted
against or incurred by the individual in any such capacity or arising out
of his status as such, regardless of whether the Corporation is required
or authorized to indemnify or allow Expenses to the individual under this
section.
(e) Severability. The provisions of this Article shall not
apply in any circumstance where a court of competent jurisdiction
determines that indemnification would be invalid as against public
policy.
8. AMENDMENT
These By-laws may be amended, altered or repealed, and new By-laws
may be enacted, only by the affirmative vote of not less than two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote at a
meeting of shareholders duly called for such purpose, upon a proposal adopted
by the Board of Directors, or by a vote of not less than three-quarters of the
entire Board of Directors then in office; provided, however, that no By-law
<PAGE>
hereafter adopted, amended or repealed by the shareholders as provided herein
shall thereafter be enacted, amended or repealed by the directors unless such
action by the shareholders shall expressly confer upon the directors authority
to thereafter enact, amend or repeal such By-law as so amended, and; provided,
further, that any By-law adopted, repealed or amended by the Board of Directors
as provided herein shall be subject to reenactment, repeal or amendment by the
shareholders acting at any meeting of the shareholders in accordance with the
terms hereof.
<PAGE>
MARSHALL & ILSLEY CORPORATION EXHIBIT 11
CALCULATION OF EARNINGS PER SHARE
($000's except per share data)
Three Months Ended June 30,
-----------------------------
PRIMARY 1994 1993
- - ------- ------------ ------------
Earnings:
Net income (loss) ($37,061) $43,417
============ ============
Shares:
Weighted average number of common shares
outstanding 95,480 99,444
Additional shares relating to:
Convertible preferred stock (d) - 1,963
Stock options outstanding (a)(d) - 2,273
Stock options exercised (c)(d) - 27
------------ ------------
Total average primary shares outstanding 95,480 103,707
============ ============
PRIMARY (LOSS) EARNINGS PER SHARE ($0.39) $0.42
============ ============
FULLY DILUTED
- - -------------
Earnings:
Net income (loss) ($37,061) $43,417
Add: Interest on convertible notes,
net of income tax effect (d) - 711
------------ ------------
Total earnings as adjusted ($37,061) $44,128
============ ============
Shares:
Weighted average number of common shares
outstanding 95,480 99,444
Additional shares relating to:
Convertible preferred stock (d) - 1,963
Stock options outstanding (b)(d) - 2,363
Stock options exercised (c)(d) - 27
Assumed conversion of convertible notes (d) - 5,833
------------ ------------
Total average fully diluted shares outstanding 95,480 109,630
============ ============
FULLY DILUTED (LOSS) EARNINGS PER SHARE ($0.39) $0.40
============ ============
Notes:
- - ------
(a) Based on the treasury stock method using average market price.
(b) Based on the treasury stock method using period-end market price or
average market price, whichever is higher.
(c) Based on the treasury stock method using market price at date of exercise.
(d) Omitted from 1994 calculation due to antidilutive effect.
<PAGE>
MARSHALL & ILSLEY CORPORATION EXHIBIT 11
CALCULATION OF EARNINGS PER SHARE
($000's except per share data)
Six Months Ended June 30,
-----------------------------
PRIMARY 1994 1993
- - ------- ------------ ------------
Earnings:
Net income $1,452 $85,346
============ ============
Shares:
Weighted average number of common shares
outstanding 95,771 99,296
Additional shares relating to:
Convertible preferred stock 2,345 1,963
Stock options outstanding (a) 1,485 1,889
Stock options exercised (c) 106 325
------------ ------------
Total average primary shares outstanding 99,707 103,473
============ ============
PRIMARY EARNINGS PER SHARE $0.01 $0.82
============ ============
FULLY DILUTED
- - -------------
Earnings:
Net income $1,452 $85,346
Add: Interest on convertible notes,
net of income tax effect (d) - 1,424
------------ ------------
Total earnings as adjusted $1,452 $86,770
============ ============
Shares:
Weighted average number of common shares
outstanding 95,771 99,296
Additional shares relating to:
Convertible preferred stock 2,345 1,963
Stock options outstanding (b) 1,502 2,203
Stock options exercised (c) 106 325
Assumed conversion of convertible notes (d) - 5,851
------------ ------------
Total average fully diluted shares outstanding 99,724 109,638
============ ============
FULLY DILUTED EARNINGS PER SHARE $0.01 $0.79
============ ============
Notes:
- - ------
(a) Based on the treasury stock method using average market price.
(b) Based on the treasury stock method using period-end market price or
average market price, whichever is higher.
(c) Based on the treasury stock method using market price at date of exercise.
(d) Omitted from 1994 calculation due to antidilutive effect.
<PAGE>
EXHIBIT 12
MARSHALL & ILSLEY CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
($OOO's)
6 Months
June 30
EARNINGS 1994 1993 1992 1991 1990 1989
--------- --------- --------- --------- --------- ---------
Earnings before
income taxes and
cumulative effect
of changes in
accounting
principles $20,375 $264,584 $231,792 $186,738 $143,192 $161,140
Fixed charges,
excluding interest
on deposits 32,421 47,905 51,927 67,436 85,234 102,398
--------- --------- --------- --------- --------- ---------
Earnings including
fixed charges but
excluding interest
on deposits 52,796 312,489 283,719 254,174 228,426 263,538
Interest on deposits 123,306 272,100 334,070 448,411 466,537 426,008
--------- --------- --------- --------- --------- ---------
Earnings including
fixed charges and
interest on
deposits $176,102 $584,589 $617,789 $702,585 $694,963 $689,546
========= ========= ========= ========= ========= =========
FIXED CHARGES:
Interest Expense:
Borrowings:
Short-term $16,991 $18,010 $18,699 $32,722 $56,849 $74,831
Long-term 11,960 23,088 26,586 27,908 22,524 22,057
One-third of rental
expense for all
operating leases
(the amount deemed
representative of
the interest factor) 3,470 6,807 6,642 6,806 5,861 5,510
--------- --------- --------- --------- --------- ---------
Fixed charges
excluding interest
on deposits 32,421 47,905 51,927 67,436 85,234 102,398
Interest on Deposits 123,306 272,100 334,070 448,411 466,537 426,008
--------- --------- --------- --------- --------- ---------
Fixed charges
including interest
on deposits $155,727 $320,005 $385,997 $515,847 $551,771 $528,406
========= ========= ========= ========= ========= =========
RATIO OF EARNINGS TO FIXED CHARGES
Excluding interest
on deposits 1.63 x 6.52 x 5.46 x 3.77 x 2.68 x 2.57 x
Including interest
on deposits 1.13 x 1.83 x 1.60 x 1.36 x 1.26 x 1.30 x
