<PAGE> 1
NOTICE OF
1994 ANNUAL MEETING
AND
PROXY STATEMENT
<PAGE> 2
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting material pursuant to Section 240.14a-11(c) or
Section 240.14a-12
MARSHALL & ILSLEY CORPORATION
- - -------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
MARSHALL & ILSLEY CORPORATION
- - -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transactions applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
* Set forth the amount on which the filing fee is calculated and state
how it was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE> 3
MARSHALL & ILSLEY CORPORATION
770 NORTH WATER STREET
MILWAUKEE, WISCONSIN 53202
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
AUGUST 23, 1994
TO THE SHAREHOLDERS OF MARSHALL & ILSLEY CORPORATION:
The 1994 Annual Meeting of Shareholders of Marshall & Ilsley Corporation
will be held at the M&I Marshall & Ilsley Bank, 770 North Water Street,
Milwaukee, Wisconsin, on Tuesday, August 23, 1994 at 10:00 a.m., local time, for
the following purposes:
(1) To elect seven Directors to serve until the 1997 Annual Meeting of
Shareholders and until their successors are elected and qualified;
(2) To approve the Marshall & Ilsley Corporation 1994 Long-Term Incentive
Plan; and
(3) To transact such other business as may properly come before the Annual
Meeting, all in accordance with the accompanying Proxy Statement.
Shareholders of record at the close of business on June 30, 1994 are
entitled to notice of and to vote at the Annual Meeting.
HOLDERS OF A MAJORITY OF THE OUTSTANDING SHARES MUST BE PRESENT IN PERSON
OR BY PROXY IN ORDER FOR THE MEETING TO BE HELD. THEREFORE, SHAREHOLDERS ARE
URGED TO DATE, SIGN AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE
WHETHER OR NOT THEY EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON. IF YOU ATTEND
THE MEETING AND WISH TO VOTE YOUR SHARES PERSONALLY, YOU MAY DO SO BY REVOKING
YOUR PROXY AT ANY TIME PRIOR TO THE VOTING THEREOF.
M. A. HATFIELD, Secretary
July 15, 1994
<PAGE> 4
MARSHALL & ILSLEY CORPORATION
770 NORTH WATER STREET
MILWAUKEE, WISCONSIN 53202
JULY 15, 1994
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of Marshall &
Ilsley Corporation (the "Company" or "M&I") for use at the annual meeting of
shareholders to be held on Tuesday, August 23, 1994 (the "Annual Meeting"). At
the Annual Meeting, the shareholders of the Company will elect seven Class I
Directors, each of whom will hold office until April 1997, and with respect to
each Director, until his successor is elected and qualified. In addition, the
Company's shareholders will be asked to approve the Company's 1994 Long-Term
Incentive Plan.
The expense of printing and mailing proxy materials, including expenses
involved in forwarding materials to beneficial owners of common stock held in
the name of another person, will be borne by the Company. No solicitation other
than by mail is contemplated, except that officers or employees of the Company
or its subsidiaries may solicit the return of proxies from certain shareholders
by telephone. In addition, the Company has retained Georgeson & Company Inc. to
assist in the solicitation of proxies for a fee of approximately $6,000. The
Proxy Statement and the accompanying Proxy are being sent to the Company's
shareholders commencing on July 15, 1994.
Each shareholder of record at the close of business on June 30, 1994 will
be entitled to one vote for each share of common stock registered in such
shareholder's name. The Company has two classes of capital stock outstanding:
its $1.00 par value common stock (the "Common Stock") and its non-voting Series
A preferred stock (the "Preferred Stock"). As of June 30, 1994, the Company had
outstanding 95,242,881 shares of Common Stock and 348,944 shares of Preferred
Stock. The presence, in person or by proxy, of the holders of a majority of the
shares of the Common Stock outstanding on the record date is required for a
quorum with respect to the matters on which action is to be taken at the Annual
Meeting.
Any shareholder executing and delivering the enclosed proxy may revoke the
same at any time prior to the voting thereof by written notice of revocation
given to the Secretary of the Company.
The Company has instituted the Dividend Reinvestment and Cash Investment
Plan (the "Reinvestment Plan") administered by The First National Bank of
Boston, as Trustee. Under the provisions of the Reinvestment Plan, shares of
Common Stock are acquired and held in nominee name by The First National Bank of
Boston for participating shareholders. Shares so held have been separately
designated on the proxy card pertaining to each participant and will be voted at
the Annual Meeting in the same manner in which the participant votes those
shares registered in his or her own name either by proxy or in person.
The Company's Annual Report to Shareholders, including financial statements
for the fiscal year ended December 31, 1993, was mailed to shareholders of the
Company commencing on March 23, 1994.
UNLESS OTHERWISE DIRECTED, ALL PROXIES WILL BE VOTED FOR THE ELECTION OF
EACH OF THE INDIVIDUALS NOMINATED TO SERVE AS A CLASS I DIRECTOR AND FOR
APPROVAL OF THE 1994 LONG-TERM INCENTIVE PLAN. ABSTENTIONS AND BROKER NON-VOTES
(I.E., PROXIES FROM BROKERS OR NOMINEES INDICATING THAT SUCH PERSONS HAVE NOT
RECEIVED INSTRUCTIONS FROM THE BENEFICIAL OWNERS TO VOTE SHARES AS TO A MATTER
WITH RESPECT TO WHICH THE BROKERS OR NOMINEES DO NOT HAVE DISCRETIONARY POWER TO
VOTE) WILL BE TREATED AS PRESENT FOR PURPOSES OF
1
<PAGE> 5
DETERMINING A QUORUM. DIRECTORS ARE ELECTED BY A PLURALITY OF THE VOTES CAST BY
HOLDERS OF THE COMPANY'S COMMON STOCK ENTITLED TO VOTE AT A MEETING AT WHICH A
QUORUM IS PRESENT. IN OTHER WORDS, THE SEVEN DIRECTORS WHO RECEIVE THE LARGEST
NUMBER OF VOTES WILL BE ELECTED AS DIRECTORS. ANY SHARES NOT VOTED, WHETHER BY
WITHHELD AUTHORITY, BROKER NON-VOTE OR OTHERWISE, WILL HAVE NO EFFECT IN THE
ELECTION OF DIRECTORS EXCEPT TO THE EXTENT THAT THE FAILURE TO VOTE FOR AN
INDIVIDUAL RESULTS IN ANOTHER INDIVIDUAL RECEIVING A LARGER NUMBER OF VOTES. ANY
VOTES ATTEMPTED TO BE CAST "AGAINST" A CANDIDATE ARE NOT GIVEN LEGAL EFFECT AND
ARE NOT COUNTED AS VOTES CAST IN AN ELECTION OF DIRECTORS. THE AFFIRMATIVE VOTE
OF A MAJORITY OF THE SHARES PRESENT, OR REPRESENTED, AND ENTITLED TO VOTE IS
REQUIRED TO APPROVE THE 1994 LONG-TERM INCENTIVE PLAN. WITH RESPECT TO THE
PROPOSAL TO APPROVE THE 1994 LONG-TERM INCENTIVE PLAN, ABSTENTIONS WILL HAVE THE
EFFECT OF VOTES AGAINST THE PROPOSAL AND BROKER NON-VOTES WILL NOT BE COUNTED AS
SHARES ENTITLED TO VOTE ON THE PROPOSAL.
2
<PAGE> 6
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table lists as of June 30, 1994 information regarding the
beneficial ownership of shares of Common Stock by each director and named
executive officer of the Company, by each person believed by the Company to be a
beneficial owner of more than 5% of Common Stock, and by all directors and
executive officers of the Company as a group:
<TABLE>
<CAPTION>
AMOUNT AND
NAME AND NATURE OF
ADDRESS OF BENEFICIAL PERCENT
BENEFICIAL OWNER OWNERSHIP(1) OF CLASS
------------------------------------- ------------------------ --------
<S> <C> <C>
Marshall & Ilsley Trust Company 11,433,857(2) 12.00%
1000 North Water Street
Milwaukee, WI 53202
The Northwestern Mutual Life 8,665,374(3) 9.10%
Insurance Company
720 East Wisconsin Avenue
Milwaukee, WI 53202
J.P. Bolduc -0- *
Glenn A. Francke 190,283 *
Burleigh E. Jacobs 40,500 *
James F. Kress 10,500 *
Oscar C. Boldt 91,484(4) *
Gus A. Zuehlke 162,260(5) *
Wendell F. Bueche 10,500 *
Jack F. Kellner 480,702 *
J.B. Wigdale 610,603(6) *
James O. Wright 11,620(7) *
G.H. Gunnlaugsson 274,653(8) *
Peter M. Platten, III 389,984(9) *
Jon F. Chait 17,580 *
Don R. O'Hare 3,600 *
J.A. Puelicher 651,228(10) *
Stuart W. Tisdale 1,602 *
Edward L. Meyer, Jr. 15,984(11) *
D.J. Kuester 411,053(12) *
Richard A. Abdoo 600 *
San W. Orr, Jr. 325,154(13) *
J.L. Delgadillo 30,000(14) *
</TABLE>
All directors and executive officers of the Company as a group (28 persons,
including the above) own 4,326,858 shares of Common Stock or 4.54% of the total
Common Stock outstanding.(15)
- - ------------------
* less than 1%
3
<PAGE> 7
(1) Except as indicated below, all shares shown in the table are owned with
sole voting and investment power.
(2) This information is based on Amendment No. 13 to Schedule 13-G dated July
11, 1994. All such shares are owned by Marshall & Ilsley Trust Company (the
"Trust Company") as trustee or in other fiduciary capacities. The Trust
Company has no economic interest in such shares. Of these shares, the Trust
Company has sole voting power as to 1,286,428 shares (approximately 1.35%),
and shared voting power as to 292,783 shares (less than 1.0%); sole
investment power as to 10,392,595 shares (approximately 10.91%), and shared
investment power as to 1,041,262 shares (approximately 1.09%). The Company
owns all of the issued and outstanding capital stock of the Trust Company.
(3) This information is based on Amendment No. 7 to Schedule 13-G dated
February 7, 1991. Of the shares held, 3,844,229 shares of Common Stock may
be acquired upon conversion of the Company's 8 1/2% Convertible
Subordinated Notes Due 1997 (the "Notes") held by The Northwestern Mutual
Life Insurance Company ("NML"). NML also holds 988,188 shares of Common
Stock and 348,944 shares of Preferred Stock. NML has sole voting and
investment power as to all such shares, subject to the terms and conditions
of a certain Investment Agreement (the "Investment Agreement") between the
Company and NML dated August 30, 1985. NML may exchange shares of Common
Stock, regardless of how they were acquired, for shares of Preferred Stock.
The Preferred Stock is non-voting and convertible into 3,832,957 shares of
Common Stock at the same ratio that the Common Stock was exchanged for the
Preferred Stock. The Investment Agreement provides for the purchase by NML
of up to 24.9%, on a fully diluted basis, of the Common Stock. Purchases
may take the form of Common Stock, Preferred Stock, notes or other
securities of the Company (together with the Notes, the "Securities") at
such prices as may be agreed upon by the parties from time to time.
Pursuant to the Investment Agreement, on December 31, 1985, NML purchased
$50 million in principal amount of the Notes. On May 25, 1994, NML
surrendered $16,363,000 in principal amount of the Notes in exchange for
1,870,157 shares of Common Stock which were exchanged for 163,630 shares of
Preferred Stock. The Notes are callable by the Company upon payment of
prescribed premiums through 1995 and at par thereafter. The Investment
Agreement restricts in certain respects NML's right to transfer, acquire
and vote any Securities. Under certain conditions, NML may require the
Company to repurchase its stock at not less than prescribed prices after a
"Change-in-Control" or upon the occurrence of a "Business Combination" (as
such terms are defined in the Investment Agreement). For further
information concerning the Investment Agreement, the Notes and the
Preferred Stock, reference is hereby made to the Company's Current Reports
on Form 8-K dated May 20, 1985, August 30, 1985 and January 2, 1986.
(4) Includes 31,297 shares held by Mr. Boldt's family as to which he disclaims
beneficial ownership and 12,900 shares which could be acquired pursuant to
the exercise of stock options within sixty days of June 30, 1994.
(5) Includes 11,771 shares held by Mr. Zuehlke's family as to which he
disclaims beneficial ownership, 45,819 shares as to which Mr. Zuehlke
exercises sole voting power, and 12,900 shares which could be acquired
pursuant to the exercise of stock options within sixty days of June 30,
1994.
(6) Includes 11,550 shares held by Mr. Wigdale's family as to which he
disclaims beneficial ownership and 315,000 shares which could be acquired
pursuant to the exercise of stock options within sixty days of June 30,
1994.
4
<PAGE> 8
(7) Includes 6,120 shares held in trust for the benefit of Mr. Wright's family
and 1,500 shares owned by Badger Meter Foundation as to which he disclaims
beneficial ownership.
(8) Includes 2,700 shares held by Mr. Gunnlaugsson's family as to which he
disclaims beneficial ownership and 165,000 shares which could be acquired
pursuant to the exercise of stock options within sixty days of June 30,
1994.
(9) Includes 5,441 shares held by Mr. Platten's family as to which he disclaims
beneficial ownership and 163,293 shares as to which Mr. Platten exercises
sole voting power.
(10) Includes 38,628 shares as to which Mr. Puelicher exercises sole voting
power and 450,000 shares which could be acquired pursuant to the exercise
of stock options within sixty days of June 30, 1994.
(11) Includes 1,231 shares held by Mr. Meyer's family as to which he disclaims
beneficial ownership and 12,900 shares which could be acquired pursuant to
the exercise of stock options within sixty days of June 30, 1994.
(12) Includes 170,000 shares which could be acquired pursuant to the exercise of
stock options within sixty days of June 30, 1994.
(13) Includes 313,715 shares held by trusts for which Mr. Orr exercises shared
voting and investment power and as to which Mr. Orr disclaims beneficial
ownership.
(14) Includes 18,000 shares which could be acquired pursuant to the exercise of
stock options within sixty days of June 30, 1994.
(15) Includes 147,000 shares of restricted stock as to which the holders
exercise sole voting power and 1,597,245 shares which could be acquired
pursuant to the exercise of stock options with sixty days of June 30, 1994.
ELECTION OF DIRECTORS
The Company's Restated Articles of Incorporation provide that the Company's
Directors shall be divided into three classes, designated Class I, Class II and
Class III, with staggered terms of three years each. At the Annual Meeting,
shareholders will elect seven Class I Directors to serve until the Company's
1997 Annual Meeting of Shareholders and until their successors are elected and
qualified. Each Class I Director's term expires at the 1994 Annual Meeting. The
following table sets forth certain information with regard to each of the
nominees for election as a Director as well as each of the Company's continuing
Class II and Class III Directors.
5
<PAGE> 9
NOMINEES STANDING FOR ELECTION
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AND DIRECTORSHIPS
- - ---------------------------- ---------------------------------------------------------------
<S> <C>
Class I Directors (terms expiring in 1994)
Richard A. Abdoo Chairman of the Board, President and Chief Executive Officer,
Age 50 Wisconsin Energy Corporation, a holding company with
subsidiaries in utility and nonutility businesses. Also a
director of ARI Network Services, Inc., Blue Cross & Blue
Shield of Wisconsin, and United Wisconsin Services, Inc. A
Director since July 1994.
Wendell F. Bueche President, Chief Executive Officer and Director, IMC Fertilizer
Age 63 Group, Inc., February 1993 to present; Chairman of the Board
and Chief Executive Officer from January 1986 through 1988,
President and Chief Executive Officer, January 1984 through
1985, and Director, Allis-Chalmers Corp., a diversified
manufacturer of specialized machinery. Also a director of
WICOR, Inc. A Director since 1983.
G.H. Gunnlaugsson Executive Vice President and Chief Financial Officer of the
Age 50 Company since 1987; Vice President of M&I Marshall & Ilsley
Bank since 1976; Vice President and Director, M&I Insurance
Company of Arizona, Inc.; Director M&I Mortgage Corp. and M&I
Data Services, Inc. A Director since February 1994.
Jack F. Kellner Chairman of the Board from July 1991 to present, President,
Age 77 Chief Executive Officer and Director until July 1991, Western
Industries, Inc., a manufacturer of metal stampings and sheet
metal fabrication. A Director since 1976.
Peter M. Platten, III Vice Chairman of the Board of the Company since May 1994;
Age 54 Chairman of the Board, January 1993 to May 1994, President and
Chief Executive Officer, January 1989 to May 1994, and Chief
Operating Officer, prior to January 1989, Valley
Bancorporation; Chairman and Chief Executive Officer, prior to
January 1989, Valley Bank, Northeast. A Director since May
1994.
J.B. Wigdale Chairman of the Board of the Company from December 1992 to
Age 57 present, Chief Executive Officer of the Company from October
1992 to present; Vice Chairman of the Board from December 1988
to December 1992; Vice President from June 1984 to December
1988; Chairman of the Board, January 1989 to present, Chief
Executive Officer, September 1987 to present, and President,
May 1981 to January 1989, of M&I Marshall & Ilsley Bank, a
subsidiary of the Company. A Director since 1988.
James O. Wright Chairman of the Board and Director, Badger Meter, Inc., a
Age 73 manufacturer of products using flow measurement technology
serving utility, industrial and commercial markets. A Director
since 1960.
</TABLE>
6
<PAGE> 10
CONTINUING DIRECTORS
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AND DIRECTORSHIPS
- - ---------------------------- ---------------------------------------------------------------
<S> <C>
Class II Directors (terms expiring April 1995)
Jon F. Chait Executive Vice President, Secretary and Director, August 1991
Age 43 to present, Manpower Inc. and Executive Vice President,
September 1989 to present, Manpower International Inc., a
provider of temporary employment services; shareholder, January
1982 to September 1989, Godfrey & Kahn, S.C., counsel to the
Company. A Director since 1990.
D.J. Kuester President of the Company since 1987; President and Director
Age 52 since January, 1989, Vice President, 1979 to January, 1989, M&I
Marshall & Ilsley Bank; Chairman of the Board, Chief Executive
Officer and Director, M&I Data Services, Inc. A Director since
February 1994.
Edward L. Meyer, Jr. President, Anamax Corporation, a processor of hides and
Age 56 manufacturer of tallow. A Director since May 1994.
Don R. O'Hare Consultant to Sundstrand Corporation, August 1991 to present;
Age 71 Chairman of the Board, January 1989 to August 1991, Vice
Chairman until January 1989 and Director, Sundstrand
Corporation, a manufacturer of aerospace and industrial
products. Also a director of Modine Manufacturing Company and
Sauer, Inc. A Director since 1977.
San W. Orr, Jr. Attorney, Estates of A.P. Woodson & Family; Chairman of the
Age 52 Board and Director, Mosinee Paper Corporation and Wausau Paper
Mills Company. Also a Director of MDU Resources Group, Inc. A
Director since July 1994.
J.A. Puelicher Retired; Chairman of the Board and Chief Executive Officer of
Age 73 the Company from April 1981 to December 1992, President of the
Company from May 1963 to April 1981 and November 1985 to
October 1987. Also a director of Modine Manufacturing Company,
Sentry Insurance, A Mutual Company, Sundstrand Corporation, and
W.R. Grace & Co. A Director since 1959.
Stuart W. Tisdale Retired; Chairman of the Board and Chief Executive Officer,
Age 65 August 1992 to February 1994, President and Chief Executive
Officer, April 1986 to August 1992, President, April 1984 to
April 1986, and Director, WICOR, Inc. A Director of Modine
Manufacturing Company and Twin Disc, Inc. A Director since
1986.
Class III Directors (terms expiring April 1996)
Oscar C. Boldt Chairman and Chief Executive Officer, The Boldt Group, Inc.,
Age 69 subsidiaries in general contracting, development and related
businesses. A Director since May 1994.
</TABLE>
7
<PAGE> 11
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AND DIRECTORSHIPS
- - ---------------------------- ---------------------------------------------------------------
<S> <C>
1987.Glenn A. Francke Retired; Chairman of the Board, 1971 through January 1987, M&I
Age 72 Northern Bank, a subsidiary of the Company. A Director since
1960.
Burleigh E. Jacobs Chairman of the Board, Chief Executive Officer and Director,
Age 74 Grede Foundries, Inc., a manufacturer of grey and ductile iron,
steel, and alloyed castings. A Director since 1967.
James F. Kress President, Chief Executive Officer and Director, Green Bay
Age 64 Packaging, Inc., a manufacturer of corrugated and packaging
materials. A Director since 1986.
Gus A. Zuehlke Chairman, Valley Bancorporation until May 1994; Chairman,
Age 72 Valley Bank, Appleton, Wisconsin, until May 1994. A Director
since May 1994.
</TABLE>
The Board of Directors of the Company has standing Executive Compensation,
Audit, Retirement Investment and Nominating Committees. The Board of Directors
held seven meetings in 1993. Each Director attended at least 75% of the meetings
of the Board and Board Committees on which the director served.
The Executive Compensation Committee is responsible for administering
compensation levels for certain senior officers of the Company and its
subsidiaries, including all executive officers of the Company, and for
administering the Company's Stock Option Plans and the 1988 Restricted Stock
Plan. The members of the Executive Compensation Committee are Messrs. Jacobs
(Chairman), Kellner, O'Hare and Wright, none of whom are employees of the
Company or any of its subsidiaries. The Executive Compensation Committee held
three meetings in 1993. Salaries for other employees of the Company and its
subsidiaries are determined by the management of the respective subsidiaries and
are reviewed by the compensation committee of the Board of Directors of the
subsidiary involved. The Company previously had a Stock Option Committee the
duties of which have been assumed by the Executive Compensation Committee. The
Stock Option Committee met two times in 1993.
The Audit Committee has responsibility for nominating the Company's
independent auditors for approval by the Board of Directors, reviewing the
scope, results and costs of the audit with the Company's independent auditors,
and reviewing the financial statements of the Company and the audit function to
ensure full compliance with requirements of regulatory agencies and full
disclosure of necessary information to the shareholders of the Company. The
members of the Audit Committee, all of whom are non-employee directors, are
Messrs. Kellner (Chairman), O'Hare and Wright. The Audit Committee held two
meetings in 1993.
8
<PAGE> 12
The Retirement Investment Committee is responsible, in relation to funding
policy, for reviewing the activities of and decisions made by the trustees of,
and the investment managers for, the Company's Retirement Growth Plan and
Incentive Savings Plan. The members of the Retirement Investment Committee, none
of whom are employees of the Company, are Messrs. O'Hare (Chairman), Chait and
Tisdale. The Committee held four meetings in 1993.
In July 1994 the Company established a Nominating Committee which is
responsible for recommending to the Board nominees to stand for election as
directors and to fill any vacancies which may occur from time to time. In
addition, the Nominating Committee is responsible for considering any
nominations for director submitted by shareholders and for reviewing the size
and composition of the Board and the criteria for selecting nominees to the
Board. Current employees of the Company are not eligible to serve on the
Nominating Committee. The members of the Nominating Committee are Messrs.
Tisdale (Chairman), Puelicher, Chait and Boldt. The Nominating Committee has not
established procedures for shareholders to recommend nominees for director
beyond those contained in the Company's By-Laws.
No director or named executive officer is an adverse party or has an
interest adverse to the Company or any of its subsidiaries in any material
pending legal proceeding.
LOANS AND OTHER TRANSACTIONS WITH THE COMPANY
Customers of the bank subsidiaries of the Company include nominees,
directors and officers of the Company and their associates. Since January 1,
1993, such persons and firms have been indebted to the Company's bank
subsidiaries for loans made in the ordinary course of business. All such loans
were made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
others and did not involve more than the normal risk of collectibility or
present other unfavorable features. Loans to directors and executive officers
represented 9.4% of shareholders equity at December 31, 1993.
9
<PAGE> 13
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS(1)
----------------------
ANNUAL COMPENSATION SECURITIES
-------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS/SARS(#) COMPENSATION($)(2)
- - ---------------------------- ---- -------- -------- ---------------------- ------------------
<S> <C> <C> <C> <C> <C>
J.B. Wigdale 1993 $450,000 $325,000 $204,092
Chairman of the Board 1992 400,000 300,000 214,980
and Chief Executive Officer 1991 350,000 250,000 150,000 56,432
D.J. Kuester 1993 375,000 277,335 141,193
President 1992 350,000 227,108 149,545
1991 300,000 201,931 120,000 43,231
G.H. Gunnlaugsson 1993 300,000 201,954 87,283
Executive Vice President 1992 275,000 166,775 94,763
and Chief Financial Officer 1991 230,000 151,611 90,000 33,567
J.L. Delgadillo 1993 173,750 130,889 27,562
Senior Vice President 1992 150,000 103,956 32,140
1991 130,000 93,785 9,000 21,068
E.I. Van Housen(3) 1993 175,000 125,000 27,597
Vice President 1992 150,000 150,000 34,940
1991 150,000 75,000 21,262
M.J. Revane(4) 1993 261,250 105,417 182,296(5)
Vice President 1992 285,000 115,000 157,233
1991 275,000 110,000 90,000 49,671
</TABLE>
- - ------------------
(1) As of December 31, 1993, the following individuals have unreleased Key
Restricted Stock: Mr. Wigdale, 48,000 shares valued at $1,134,000; Mr.
Kuester, 36,000 shares valued at $850,500; Mr. Gunnlaugsson, 24,000 shares
valued at $567,000; and Mr. Delgadillo, 6,300 shares valued at $148,838.
Dividends are paid on restricted stock.
(2) Includes the following amounts paid by M&I under a 401(k) Thrift Plan for
the years 1993, 1992 and 1991, respectively: J.B. Wigdale - $4,497, $4,364
and $4,237; D.J. Kuester - $4,497, $4,364 and $4,237; G.H. Gunnlaugsson -
$4,497, $4,364 and $4,237; J.L. Delgadillo - $4,459, $4,364 and $4,237;
E.I. Van Housen - $4,497, $4,364 and $4,237; and M.J. Revane - $4,497,
$4,364 and $4,237. Includes the following amounts paid by M&I under the
Retirement Growth Plan for the years 1993, 1992 and 1991, respectively:
J.B. Wigdale - $16,509, $16,908 and $17,287; D.J. Kuester - $16,509,
$16,908 and $17,287; G.H. Gunnlaugsson - $16,509, $16,908 and $17,287; J.L.
Delgadillo - $16,622, $16,908 and $16,705; E.I. Van Housen - $16,509,
$16,908 and $16,800; and M.J. Revane - $16,509, $16,908 and $17,287.
Includes the following amounts paid by M&I under a Split Dollar Life
Insurance Plan for the benefit of the executives for the years 1993, 1992
and 1991, respectively: J.B. Wigdale - $13,842, $13,842 and $13,842; D.J.
Kuester - $8,430, $8,657 and $6,241; G.H. Gunnlaugsson - $7,688, $7,867 and
$5,777; and M.J. Revane - $15,881, $15,881 and $15,881. Includes the
following amounts accrued by M&I under the Supplementary Retirement
Benefits Plan for the years 1993, 1992 and 1991, respectively: J.B. Wigdale
- $43,166, $59,668 and $21,066; D.J. Kuester - $33,541, $45,668 and
$15,466; G.H. Gunnlaugsson - $21,991, $30,868 and $6,266; J.L. Delgadillo -
$6,481, $10,868 and $126; E.I. Van Housen - $6,591,
10
<PAGE> 14
$13,668 and $225; and M.J. Revane - $12,824, $24,468 and $12,266. Also
includes the following amounts accrued by M&I under the Nonqualified
Supplemental Retirement Plan for the years 1993 and 1992, respectively:
J.B. Wigdale - $126,078 and $120,198; D.J. Kuester - $78,216 and $73,948;
G.H. Gunnlaugsson - $36,598 and $34,756; and M.J. Revane - $100,585 and
$95,612.
(3) Mr. Van Housen died on March 6, 1994.
(4) Mr. Revane retired in November 1993, but is included herein pursuant to the
rules of the Securities and Exchange Commission.
(5) Mr. Revane received $32,000 in 1993 under his Consulting Agreement with the
Company.
The following table provides information on option exercises by the named
executive officers during fiscal 1993.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS AT IN-THE-MONEY OPTIONS/SARS
SHARES FY-END(#) AT FY-END($)(1)
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ------------------------ ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
J.B. Wigdale -0- $ -0- 315,000 -0- $ 3,196,245 $ -0-
D.J. Kuester -0- -0- 270,000 -0- 2,818,740 -0-
G.H. Gunnlaugsson 78,000 1,126,488 165,000 -0- 1,558,755 -0-
J.L. Delgadillo -0- -0- 36,000 -0- 425,619 -0-
E.I. Van Housen 82,800 1,195,963 60,000 -0- 852,466 -0-
M.J. Revane 135,000 1,796,205 90,000 -0- 577,530 -0-
</TABLE>
- - ------------------
(1) For valuation purposes, a December 31, 1993 market price of $23.625 was
used.
NONQUALIFIED RETIREMENT PLAN
M&I adopted the Marshall & Ilsley Corporation Nonqualified Retirement
Benefit Plan (the "Nonqualified Plan") on December 12, 1991. The goal of the
Nonqualified Plan is to provide six of the executive officers of M&I with a
monthly supplemental retirement benefit such that the sum of their benefits from
the Retirement Growth Plan, Social Security, the Supplementary Retirement
Benefits Plan and the Nonqualified Plan will equal 60% of each participant's
average salary for his last five years of employment. The monthly benefit under
the Nonqualified Plan, starting in most instances when an individual reaches age
65, is fixed based on various actuarial and interest rate assumptions. The
annual benefits are $160,000, $180,000, $100,000 and $100,000 for Messrs.
Wigdale, Kuester, Revane and Gunnlaugsson, respectively, and a total of $45,000
for two other executive officers. The annual benefit will be adjusted in the
event of death before age 62 or early retirement and can be paid for life with a
120-month certain payout or on a joint and survivor basis at the option of the
participant. The pay-out option elected will also affect the amount of the
annual benefit. If a participant leaves the employ of the Company prior to age
55, he will receive no benefits under the Nonqualified Plan, except that, in the
event of a Change in Control (as defined in the Nonqualified Plan),
11
<PAGE> 15
each participant will receive the present value of the benefits to which he is
entitled under the Nonqualified Plan within 30 days of such Change in Control
regardless of his age at that point.
EMPLOYMENT AGREEMENTS AND RELATED MATTERS
In order to assure management continuity and stability, M&I has entered
into substantially similar Employment Agreements (the "Employment Agreements")
with Messrs. Wigdale, Kuester, Delgadillo, and Gunnlaugsson, seven additional
executive officers and 14 officers and other employees of the Company and its
subsidiaries (collectively, the "Executives"). The Employment Agreements with
Messrs. Wigdale, Kuester and Gunnlaugsson each have a term of three years, and
the Employment Agreement with Mr. Delgadillo has a term of two years. The
Employment Agreements with the other Executives have terms of two or three
years.
The Employment Agreements guarantee the Executives specific payments and
benefits upon a termination of employment as a result of a change of control of
M&I. If a change of control occurs the contract becomes effective and continues
for a two-or three-year employment term. The employment term renews on a daily
basis until M&I gives notice to terminate the daily renewal.
The Employment Agreements provide for specified benefits after a change of
control if the Executive voluntarily terminates for "good reason" or is
involuntarily terminated other than for "cause" (as defined in the Employment
Agreements). In addition, in the case of some Employment Agreements, at the end
of six months after a change of control, the Executive may terminate employment
for any reason and is entitled to receive full benefits. Upon a termination, the
Executive is entitled to (a) a lump sum payment equal to two or three times
(depending on whether the contract is a two-or three-year contract) the sum of
the Executive's current base salary plus the higher of the Executive's bonus for
the last year or the Executive's average bonus for the past three years, (b) a
proportionate amount of any unpaid bonus deemed earned for the year of
termination, (c) a lump sum payment equal to the retirement benefits lost as a
result of not having been employed for the remaining contract term, (d) health
and other benefits for the remaining contract term, and (e) payments for certain
other fringe benefits. In the event of a termination of employment as a result
of his death, the Executive's beneficiary is entitled to six months of base
salary. No additional benefits are guaranteed under the contract upon an
Executive's disability or termination by M&I for cause.
The Employment Agreements provide that upon a change of control most
restrictions limiting the exercise, transferability or other incidents of
ownership of any outstanding award, restricted stock, options, stock
appreciation rights, or other property rights of M&I granted to the Executive
shall lapse, and such awards shall become fully vested, except in certain
circumstances. Some of the Employment Agreements also provide for "gross-up"
payments in the event payments to an Executive under the Employment Agreement
are subject to Section 4999 of the Code (the "Excise Tax") or any similar
federal, state or local tax which may be imposed, in an amount such that the net
amount retained by the Executive, after deduction of any Excise Tax on the
payments and any federal, state and local income tax and Excise Tax upon the
gross-up payment, shall be equal to the payments then due.
In connection with Mr. Revane's retirement in November 1993, he entered
into an Agreement with M&I ("Retirement Agreement") and a Consulting and
Noncompetition Agreement with M&I ("Consulting Agreement"). Pursuant to the
Retirement Agreement (1) M&I determined that Mr. Revane's retirement constituted
"early retirement" for purposes of applicable benefit plans and, accordingly,
all options to acquire M&I Common Stock held by Mr. Revane vested to the extent
not already vested and all restrictions applicable to Mr. Revane's Key
Restricted Stock lapsed, (2) Mr. Revane will receive 36 monthly payments of
$10,278 commencing on January 1, 1996, provided that if Mr. Revane dies prior to
December 1, 1998, his
12
<PAGE> 16
estate or designated beneficiary shall receive in lieu of such monthly payments
either a lump sum or monthly payment, depending upon the date of death, and (3)
Mr. Revane is allowed to participate in M&I's Non-Qualified Retirement Benefit
Plan and split-dollar life insurance arrangement while he is engaged as a
consultant to M&I. Under the Consulting Agreement, Mr. Revane provides various
consulting and advisory services to M&I and is prohibited from participating in
certain competing activities. The Consulting Agreement has a term of 25 months
and provides for a payment to Mr. Revane, or his estate in the case of his
death, of $32,000 per month in exchange for his consulting services and
agreement not to compete.
NON-EMPLOYEE DIRECTOR COMPENSATION
Directors of M&I who are not employees are paid a retainer fee of $12,000
per year. In addition, non-employee directors receive a fee of $1,500 for each
Board meeting which they attend and $500 for each Committee meeting which they
attend. M&I has established a deferred compensation plan for its Directors.
Under such plan, all or part of the fees received by a Director may be deferred
at the election of the Director. Amounts deferred are credited with an earnings
factor based on the Director's allocation among 13-week U.S. Treasury Bills, the
Common Stock or any common trust fund offered by the Trust Company. Deferred
amounts are payable in not less than 36 nor more than 180 monthly installments,
as elected by the participating Director, unless the Board elects to distribute
amounts over a shorter period. One Director, Mr. Chait, elected to defer
compensation under the plan during 1993. Directors of M&I who are also Directors
of subsidiaries of M&I receive compensation from such subsidiaries in varying
amounts based on the Director compensation schedule of such subsidiaries.
Mr. Puelicher receives various supplemental retirement benefits from M&I
which are not related to or conditioned upon his service as a director of M&I.
In 1993, M&I determined to increase Mr. Puelicher's supplemental retirement
benefit under his Supplemental Retirement Plan dated December 10, 1992 from
$41,667 per month to $58,333 per month. In addition, M&I made a special payment
of $200,000 to Mr. Puelicher in December 1993 in recognition of Mr. Puelicher's
extraordinary contributions to M&I.
Mr. Puelicher and M&I entered into a Consulting Agreement and Supplemental
Retirement Plan in 1986, which was amended in 1992 (the "Consulting/Retirement
Agreement"). The Consulting/Retirement Agreement went into effect in January
1993 and provides for Mr. Puelicher to serve as a consultant to M&I for five
years. As compensation for his commitment to provide consulting services, Mr.
Puelicher receives a retirement benefit of $25,000 per month for his life, and,
if Mr. Puelicher predeceases his wife, his wife will receive $12,500 per month
for her life. In addition, M&I pays an annual insurance premium for Mr.
Puelicher of $112,470 until the earlier of (i) Mr. Puelicher's death, (ii) 19
years from the date of the policy's issue, or (iii) such time as the policy is
paid up. M&I will also reimburse Mr. Puelicher for all travel and other expenses
incurred in the performance of his duties and will provide him with secretarial
services and office space. Mr. Puelicher will continue to participate in M&I's
group health insurance (or equivalent plan) while receiving retirement benefits
under the Consulting/Retirement Agreement. M&I may terminate the
Consulting/Retirement Agreement for "cause" (as defined in the
Consulting/Retirement Agreement). The Consulting/Retirement Agreement provides
that Mr. Puelicher may not compete with M&I and must maintain the
confidentiality of certain information regarding M&I, its business and
customers.
13
<PAGE> 17
COMPENSATION COMMITTEE REPORT
General Policy
The Compensation Committee is responsible for making recommendations on the
compensation of the Company's Executive Officers to the Board of Directors. The
Compensation Committee bases its compensation decisions on its overall
assessment of the executive's contribution to the long-term profitability and
financial strength of the Company. In reviewing the contribution of any
particular executive, the nature of the executive's responsibilities, the
executive's tenure with the Company, and the executive's long-term performance
are among the factors the Committee considers. The Committee reviews the
executive's performance in the light of both the historical financial
performance of the Company and the Committee's assessment of the executive's
role in ensuring the financial success of the Company in the future. In this
respect, the Committee seeks to reward leadership, innovation, and
entrepreneurship. The Committee does not mechanically apply any specific goals
or criteria in making its decisions, and such decisions are based in large part
on the Committee's subjective assessment of the executive's performance. The
Committee believes that this discretionary approach has served the Company well
in the retention and motivation of its senior executives.
The Committee is aware of the limitations imposed by Section 162(m) of the
Internal Revenue Code of 1986, as amended, on the deductibility of compensation
paid to certain senior executives to the extent it exceeds $1 million per
executive starting in 1994. The Committee currently intends to recommend
compensation amounts and plans which will meet the requirements for
deductibility.
1993 Compensation
With regard to 1993 compensation decisions, the Committee reviewed the
Company's financial performance on both a long-term and short-term basis, the
overall job performance of each executive officer, the information provided by
the Company's professional compensation consultants, and other information which
the Compensation Committee deemed relevant in the case of any particular
individual. The Committee consulted with professional compensation consultants
in order to make more informed decisions. Such consultants provided the
Committee with information regarding the compensation levels for executive
officers of companies in a peer group. The peer group consisted of the companies
in the Keefe, Bruyette & Woods 50 Bank Index which is the same peer group used
in the performance graph. The Committee used this information for comparison
purposes, but did not set the compensation for M&I's executive officers at a
specific level as compared to the peer group. The Committee's salary
determinations generally reflect the executive's historic level of compensation,
competitive factors and job performance, and, in the case of any particular
individual, circumstances unique to such individual such as increased
responsibilities or extraordinary effort may also be reflected. In assessing the
profitability of the Company, the Committee considered, among other things, the
financial performance of the Company as a whole on both a long-term and
short-term basis (including net income, return on average shareholders' equity,
and return on average assets). The Committee's decisions with respect to
compensation as a whole reflect all of the factors considered with no specific
criteria applied to any one component of compensation such as salary or bonus.
The Committee's decision to increase salaries and bonuses was based on all the
factors considered by the Committee, including objective factors and the
Committee's subjective assessment of the executive's performance.
The Committee regards the salary portion of each executive officer's
compensation and part of his bonus as a base amount which would not be decreased
except under extraordinary circumstances. The part of the executive's bonus that
would not be decreased except under extraordinary circumstances is the amount
that together with the other cash compensation (i.e., salary) received by such
executive would approximate the
14
<PAGE> 18
total amount of cash compensation (i.e., salary and bonus) received by such
executive in the preceding year. An example of the extraordinary circumstances
under which such amounts would be decreased would be an extended period of poor
financial performance by the Company or failure by the particular executive to
meet job performance expectations.
In determining Mr. Wigdale's compensation for 1993, the Compensation
Committee considered a variety of factors, including the Company's net income
(up 7.6% from 1992, and which has had a compounded growth rate of 10.4% for the
last 5 years and 11.3% for the last 10 years), return on average shareholders'
equity (16.11% for 1993) and return on average assets (1.62% for 1993). The
Compensation Committee also considered Mr. Wigdale's 31 years of service to the
Company. The Committee also reviewed Mr. Wigdale's total compensation package in
light of prevailing market factors. The Compensation Committee regards the
salary portion of Mr. Wigdale's compensation and part of his bonus as a base
amount which would not be decreased except under extraordinary circumstances.
The Compensation Committee believes such a base amount of compensation is fair
and appropriate under the circumstances.
THE COMPENSATION COMMITTEE:
Mr. Kellner Mr. Jacobs Mr. O'Hare Mr. Wright
15
<PAGE> 19
PERFORMANCE GRAPH
The following graph shows the cumulative total stockholder return on the
Company's Common Stock over the last five fiscal years compared to the returns
of the Standard & Poor's 500 Stock Index and the Keefe, Bruyette, & Woods, 50
Bank Index.
[CAMERA READY GRAPH]
16
<PAGE> 20
1994 LONG-TERM INCENTIVE PLAN
The complete text of the 1994 Long-Term Incentive Plan is set forth as
Appendix A to this Proxy Statement. The following summary of the material
features of the 1994 Long-Term Incentive Plan does not purport to be complete
and is qualified in its entirety by reference to Appendix A.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE 1994 LONG-TERM
INCENTIVE PLAN
GENERAL
The Company's Executive Compensation Committee and Board of Directors
approved the 1994 Long-Term Incentive Plan for Executives (the "Long-Term
Incentive Plan") subject to approval by the Company's shareholders at the 1994
Annual Meeting. Approval of the Long-Term Incentive Plan requires the
affirmative vote of the holders of a majority of the shares present, in person
or by proxy, and entitled to vote at the Annual Meeting.
The Company believes that the Long-Term Incentive Plan will promote the
best interests of the Company and enhance shareholder value by attracting and
retaining key personnel and providing such employees with an incentive to put
forth maximum effort for the continued success and growth of the Company.
ADMINISTRATION
The Long-Term Incentive Plan will be administered by the Executive
Compensation Committee of the Board of Directors (the "Committee"), composed of
not less than three Directors, and constituted so as to permit compliance with
Rule 16b-3 under the Securities Exchange Act of 1934, as amended, and Section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code"). The
Committee will designate the amount, if any, to be awarded to participants and
any conditions, limitations or restrictions it deems appropriate. Awards will be
in the form of ("Units") denominated by reference to shares of Common Stock
("Shares").
The Long-Term Incentive Plan may be terminated, modified or amended by the
affirmative vote of the holders of a majority of the shares of the Company
entitled to vote at a meeting of the shareholders of the Company. In addition,
the Committee may also terminate the Long-Term Incentive Plan or make
modifications or amendments thereto as it deems advisable so that the Long-Term
Incentive Plan conforms to any applicable law or regulation. However, the
Committee may not adopt any amendment to the Long-Term Incentive Plan which
would cause the Plan to no longer comply with Rule 16b-3 or Section 162(m), or
which would, without the consent of a participant, adversely affect the rights
of such participant.
PARTICIPANTS
Possible participants in the Long-Term Incentive Plan are the executive
officers and senior managers of the Company and its subsidiaries
("Participants"). The Committee has the authority to determine which employees
will be participants and may take into account the nature of the services
rendered by the employees, their present and potential contributions to the
success of the Company, and other factors as the Committee in its discretion
deems relevant. It is estimated that approximately 60 persons may be considered
to be eligible to participate in the Long-Term Incentive Plan.
17
<PAGE> 21
PERFORMANCE UNITS
Units may be awarded from time to time to Participants under the Long-Term
Incentive Plan. At such time as dividends are paid on Shares, additional Units
will be credited to each account in lieu of dividends. The portion of the Units,
if any, distributed at the end of a performance period will be determined by the
degree to which specified financial goals and other objectives are met. See
"Performance Criteria," below. The Company intends to consider the award of
Units on an annual basis, however nothing in the Long-Term Incentive Plan
obligates the Company to do so. The maximum number of Units earned under the
Plan (excluding Units credited in lieu of dividends) will be 600,000 in the
aggregate, subject to adjustment for certain corporate events. No more than
150,000 Units may be earned by any one individual. Payment of Units may be made
in cash, Shares or a combination of cash and Shares in the discretion of the
Committee. The maximum number of Shares which will be distributed to
Participants under the Long-Term Incentive Plan in payment of awards is 600,000
Shares, subject to adjustment for certain corporate events.
TERMINATION OF EMPLOYMENT
If a Participant's employment terminates because of retirement (as defined
in the Long-Term Incentive Plan), then the Participant shall continue in the
Long-Term Incentive Plan, but no further Units shall be awarded him by the
Committee. If a Participant's employment terminates because of death or
disability (as defined in the Long-Term Incentive Plan), or if a retiree dies
while still a Participant, the Committee will determine the extent to which the
applicable performance criteria have been met as of the close of the calendar
year in which the Participant dies or is disabled and will pay the appropriate
amount prorated based on the number of days of the award period that the
Participant was in the Long-Term Incentive Plan. If a Participant's employment
is terminated for any other reason, his participation will cease and he will not
be entitled to any award unless the Committee determines otherwise.
Notwithstanding the foregoing, if (a) a Participant's employment is terminated
as a result of, or in anticipation of, a Triggering Event (defined as certain
change of control transactions), or (b) a Participant's employment is not
terminated, but a Triggering Event occurs, he will be entitled to a pay-out of
his account based on the attainment of the performance criteria on the date the
Triggering Event occurs.
PERFORMANCE CRITERIA
The Long-Term Incentive Plan provides that the Committee will designate the
Participants and the number of Units awarded thereto and will establish
performance criteria which will govern whether and to what extent Participants
will receive a pay-out of their Units. As of June 1, 1994, Units have been
awarded to fourteen full-time employees of the Company. The initial performance
period is the three years commencing on January 1, 1994 and ending on December
31, 1996. Additional Units will be credited to each Participant's account when
dividends are paid on Shares. Vesting of Units occurs at the end of the
three-year period with the exception of the death or disability of the
Participant, termination of a Participant's employment or the occurrence of a
Triggering Event, as described above at "Termination of Employment."
The Committee has established the following criteria for awards under the
Long-Term Incentive Plan, which may be changed for future awards at the
discretion of the Committee. The value of the award at the end of the three-year
period (or at such earlier time as the performance period ends) is dependent on
the total return on the Shares for the three-year period when compared with the
total return for those stocks composing
18
<PAGE> 22
the Keefe, Bruyette, & Woods, 50 Bank Index, which is used in the performance
graph (the "KBW 50 Index"), in accordance with the following table:
<TABLE>
<CAPTION>
% OF INITIAL AWARD
KBW 50 INDEX AND ACCUMULATED DIVIDEND
PERCENTILE RANK UNITS EARNED
----------------------------------------------- ------------------------
<S> <C>
95th Percentile and above 275%
90th Percentile 225%
75th Percentile 185%
50th Percentile 100%
25th Percentile 25%
Below 25th Percentile 0%
</TABLE>
If the total return on the Shares falls between two categories (for example,
between the 50th and 75th percentiles), the percentage earned will be determined
by linear interpolation (in this example, between 100% and 185%). Thus, if the
total return on the Shares for the three-year period is at the 50th percentile
level, each Participant will receive an amount, either in cash, Shares or a
combination thereof, equal to 100% of the initial Units credited to his account
plus those additional Units credited as dividends are paid on the Shares, valued
at fair market value on the date the award vests. Before payment is made, the
Committee must certify the extent to which the performance criteria have been
met.
COMPLIANCE WITH TAX LAWS
The Long-Term Incentive Plan is designed to comply with the requirements of
Section 162(m) of the Code so that all compensation paid pursuant thereto should
be deductible by the Company for federal income tax purposes.
NEW PLAN BENEFITS
MARSHALL & ILSLEY CORPORATION 1994 LONG-TERM INCENTIVE PLAN
<TABLE>
<CAPTION>
NAME AND POSITION NUMBER OF UNITS(1)
---------------------------------------------- ------------------
<S> <C>
J.B. Wigdale 13,000
Chief Executive Officer
D.J. Kuester 11,000
President
G.H. Gunnlaugsson 8,000
Executive Vice President and Chief Financial
Officer
J.L. Delgadillo 3,000
Senior Vice President
Executive Officer Group 35,000
Non-Executive Officer Director Group -0-
Non-Executive Officer Employee Group 22,500
</TABLE>
- - ------------------
(1) Granted March 30, 1994 subject to shareholder approval of the Long-Term
Incentive Plan. The dollar value of the Units granted is not currently
determinable, and, since performance is measured over a three-year period,
the dollar value of the Units granted would not be determinable if it were
assumed that the Long-Term Incentive Plan was in effect in 1993.
19
<PAGE> 23
SUBMISSION OF SHAREHOLDER PROPOSALS
The 1995 Annual Meeting of Shareholders is scheduled for April 25, 1995. In
accordance with the Company's By-Laws, nominations, other than by or at the
direction of the Board of Directors, of candidates for election as directors at
the 1995 Annual Meeting of Shareholders must be submitted to the Company not
later than March 27, 1995. To be considered for inclusion in the proxy statement
solicited by the Board of Directors, shareholder proposals for consideration at
the 1995 Annual Meeting of Shareholders of the Company must be received by the
Company at its principal executive offices, 770 North Water Street, Milwaukee,
Wisconsin 53202 on or before November 19, 1994. Proposals should be directed to
Mr. M.A. Hatfield, Secretary. To avoid disputes as to the date of receipt, it is
suggested that any shareholder proposal be submitted by certified mail, return
receipt requested.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Arthur Andersen & Co. as the Company's
independent auditors for the fiscal year ending December 31, 1994.
Representatives of Arthur Andersen & Co. will be present at the Annual Meeting
to make any statement they may desire and to respond to questions from
shareholders.
OTHER MATTERS
Although management is not aware of any other matters that may come before
the meeting, if any such matters should be presented, the persons named in the
accompanying proxy intend to vote such proxy in accordance with their best
judgment.
SHAREHOLDERS MAY OBTAIN A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AT NO COST BY WRITING TO
THE OFFICE OF THE SECRETARY, MARSHALL & ILSLEY CORPORATION, 770 NORTH WATER
STREET, MILWAUKEE, WISCONSIN 53202.
By Order of the Board of Directors,
M.A. Hatfield, Secretary
20
<PAGE> 24
APPENDIX A
MARSHALL & ILSLEY CORPORATION
1994 LONG-TERM INCENTIVE PLAN FOR EXECUTIVES
1. PURPOSE OF THE PLAN.
The purpose of the Plan is to promote the best interests of Marshall &
Ilsley Corporation and enhance shareholder value by attracting and retaining key
personnel and providing such employees with an incentive to put forth maximum
effort for the continued success and growth of the Company.
2. DEFINITIONS.
(a) "Account" shall mean the account established and administered for the
benefit of a Participant under the Plan.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Committee" shall mean the Committee of the Board of Directors
constituted as provided in Paragraph 3 of the Plan.
(d) "Company" shall mean Marshall & Ilsley Corporation, a Wisconsin
corporation.
(e) "Employees" shall mean those individuals who are executive officers or
senior managers of the Company or its Subsidiaries.
(f) "Market Price" shall mean the closing sale price of a Share on the
NASDAQ National Market System as reported in the Midwest Edition of the Wall
Street Journal, or such other market price as the Committee may determine in
conformity with pertinent law and regulations of the Treasury Department.
(g) "1934 Act" shall mean the Securities Exchange Act of 1934, as amended.
(h) "Parent" shall mean a parent corporation of the Company as defined in
Section 424(e) of the Code.
(i) "Participant" shall mean an Employee designated by the Committee to be
a participant in the Plan.
(j) "Plan" shall mean the 1994 Long-Term Incentive Plan for Executives of
the Company.
(k) "Share" or "Shares" shall mean the $1.00 par value common stock of the
Company.
(l) "Subsidiary" shall mean a subsidiary corporation of the Company as
defined in Section 424(f) of the Code.
(m) "Triggering Event" shall mean any of the following: (a) the
acquisition, by any person or group of persons other than the Company or a
Subsidiary, of twenty-five percent (25%) or more of the outstanding shares of
the common stock of the Company pursuant to a tender or exchange offer; (b) the
acquisition, by any person or group of persons, of the beneficial ownership or
the right to acquire beneficial ownership of twenty-five percent (25%) or more
of the outstanding shares of the common stock of the Company (the term "group"
and "beneficial ownership" as used in this paragraph having the meanings
assigned thereto in Section 13(d) of the 1934 Act and the regulations
promulgated thereunder); or (c) the shareholders of the common stock of the
Company approve a transaction whereby the Company (or any Subsidiary or
Subsidiaries in the aggregate representing at least 25% of the consolidated
assets of the Company), will (i) merge or consolidate with, or enter into any
similar transaction with any person, in which the Company or
A-1
<PAGE> 25
Subsidiary is not the survivor (ii) sell, lease or otherwise dispose of all or
substantially all of the assets of the Company or such Subsidiary or (iii) sell
or otherwise dispose of (including by way of merger, consolidation, share
exchange or any similar transaction) securities representing twenty-five percent
(25%) or more of the voting power of the Company or such Subsidiary.
(n) "Unit" shall mean a bookkeeping entry used by the Company to record and
account for the grant of an award under the Plan denominated in Shares until
such time as the award is paid, cancelled, forfeited or terminated, as the case
may be.
3. ADMINISTRATION OF THE PLAN.
(a) The Plan shall be administered by the Committee. The Committee shall
consist of not less than three members of the Board of Directors of the Company
and shall be so constituted as to permit the Plan to comply with Rule 16b-3
under the 1934 Act, as such rule is currently in effect or as hereafter modified
or amended ("Rule 16b-3"), Section 162(m) of the Code, or any successor rule or
other statutory or regulatory requirements. The members of the Committee shall
be appointed from time to time by the Board of Directors.
(b) The Committee shall have sole authority in its discretion, but always
subject to the express provisions of the Plan, to determine the Employees who
will be Participants, the number of Units which will be credited to each
Account, the performance criteria for earning the Units credited to each Account
and the period of time to which the performance criteria will be applied; to
interpret the plan; to prescribe, amend and rescind rules and regulations
pertaining to the Plan; to determine the terms and provisions of the respective
awards to Participants; and to make all other determinations and interpretations
deemed necessary or advisable for the administration of the Plan. The
Committee's determination of the foregoing matter shall be conclusive and
binding on the Company, all Employees, all Participants and all other persons.
4. ELIGIBILITY.
Only Employees shall be eligible to be Participants under the Plan. In
determining which Employees will be Participants and the amount of the award
hereunder, the Committee may take into account the nature of the services
rendered by the respective Employees, their present and potential contributions
to the success of the Company, and other such factors as the Committee in its
discretion shall deem relevant. An Employee who has been granted an award under
the Plan may be granted additional awards under the Plan if the Committee shall
so determine. The Company shall effect the granting of awards hereunder in such
manner as the Committee determines. No award may be granted under the Plan to a
member of the Committee.
5. ESTABLISHMENT OF ACCOUNTS.
The Company shall establish on its books of account a separate Account for
each Participant, which shall be used for the purpose of determining the
compensation to which the Participant from time to time may be entitled
hereunder. There shall be recorded in each Participant's Account the number of
Units from time to time credited to the Participant by the Committee or pursuant
to Paragraph 8 hereof. In no event will more than 600,000 Units, subject to
adjustment under Paragraph 10 hereof, be earned under the Plan (excluding Units
credited in lieu of dividends under Paragraph 8 hereof). No more than 150,000
Units will be earned by any one individual (again excluding Units credited in
lieu of dividends and subject to adjustment under Paragraph 10). Accounts shall
be maintained solely for accounting purposes, and no assets of the Company shall
be segregated or subject to any trust for any Participant's benefit by reason of
the establishment of the Participant's Account. In addition, no Participant
shall acquire any rights as a shareholder of the Company,
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including the right to vote with respect to any matter before the shareholders
of the Company or to receive dividends payable on the common stock, or, except
as is specifically provided otherwise herein, any other rights, by reason of the
establishment of the Participant's Account.
6. PERFORMANCE CRITERIA.
The Committee shall establish performance criteria which will govern
whether and to what extent Participants will receive a pay-out of their
Accounts. The length of the performance period, the performance objectives to be
achieved during the performance period, and the measure of whether and to what
degree such objectives have been attained shall be conclusively determined by
the Committee. No payment of awards under this Plan shall be made until the
Committee certifies that the performance criteria to which such awards were
subject have been met.
7. PAYMENT OF AWARDS.
The Committee, in its sole discretion, may pay awards earned under the Plan
in cash, Shares or a combination of cash or Shares. In no event will more than
600,000 Shares, subject to adjustment pursuant to Paragraph 10 hereof, be paid
to Participants pursuant to this Plan. These Shares may be treasury Shares or
authorized, but unissued Shares.
8. DIVIDENDS AND DIVIDEND EQUIVALENTS.
At such time as dividends are paid on Shares, an Account of a Participant
shall be credited with that number of additional Units equal to the product of
(a) the number of Units then in the Account times (b) the amount of the dividend
per Share divided by (c) the Market Price of a Share on the date a dividend is
paid.
9. TERMINATION OF EMPLOYMENT.
(a) Any Participant whose employment with the Company or a Subsidiary is
terminated due to retirement on such Participant's normal retirement date (as
defined in the M&I Retirement Growth Plan or any successor thereto) or due to
early retirement with the consent of the Committee shall continue as a
Participant in the Plan as to Units already awarded (and any dividends or
dividend equivalents earned in connection therewith), but shall not be entitled
to the award of any additional Units by the Committee.
(b) Any Participant whose employment with the Company or a Subsidiary is
terminated due to disability (as defined in Section 22(e)(3) of the Code) or
death, or any Participant who dies after retirement, as defined in subparagraph
(a), above, but while he still is a Participant in the Plan, shall continue as a
Participant in the Plan as to Units already awarded (and any dividends or
dividend equivalents earned in connection therewith) until the close of the
calendar year in which the Participant dies or is disabled. The Committee will
determine if and to what extent the performance criteria it established have
been met as of the close of the calendar year. Based on this determination, a
Participant, or, in the case of death, his beneficiary as determined pursuant to
Paragraph 12, hereof, shall receive a prorated award within 90 days of the end
of the calendar year based on a fraction, the numerator of which is the number
of days from the beginning of the award period to the date of death or
disability and the denominator of which is the total number of days in the award
period.
(c) If a Participant's employment is terminated for any reason other than
those specified in subparagraphs (a) and (b), above, his participation in the
Plan shall immediately cease and he shall not be entitled to any award under the
Plan, unless the Committee, in its sole discretion, determines otherwise.
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(d) Notwithstanding the foregoing, if (i) a Participant's employment is
terminated as a result of, or in anticipation of, a Triggering Event, or (ii) a
Participant's employment is not terminated, but a Triggering Event occurs, a
Participant shall receive an amount equal to the amount he would be entitled to
receive at the close of the performance period based on the extent to which the
performance criteria set by the Committee have been met as of the date of the
Triggering Event. Payment of the amount to which the Participant is entitled
hereunder shall be made within 30 days after the occurrence of the Triggering
Event.
(e) The Plan does not confer upon any Participant any right with respect to
continuation of employment by the Company or a Subsidiary, nor shall it
interfere in any way with the right of the Company or any Subsidiary to
terminate any Participant's employment at any time.
10. ADJUSTMENT PROVISIONS.
If the Company shall effect a subdivision or consolidation of Shares or
other capital readjustment, the payment of a stock dividend, or other increase
or reduction in the number of Shares outstanding, or shall effect a spin-off,
split-off, or other distribution of assets to shareholders, without receiving
consideration therefor in money, services or property, the number of Units in
each Account and the number of Shares available for payment of awards hereunder
shall be appropriately adjusted by the Committee.
11. NONASSIGNABILITY.
No Accounts or any payment under the Plan shall be subject in any manner to
alienation, anticipation, sale, transfer (except by will or the laws of descent
and distribution), assignment, pledge, or encumbrance. Any attempt to alienate,
sell, transfer, assign, pledge or otherwise encumber any Account or any payment
under the Plan shall be void and of no legal effect.
12. BENEFICIARY DESIGNATION.
If a Participant dies prior to the distribution to him of all amounts
payable to him under the Plan, the amounts otherwise distributable to the
Participant if living, shall be distributed to his designated beneficiary or
beneficiaries. All beneficiary designations shall be made in the form prescribed
by the Committee from time to time and shall be delivered to the Secretary of
the Company. If there is no effective beneficiary designation on file at the
time of the Participant's death, distribution of amounts otherwise payable to
the deceased Participant under the Plan shall be made to his Estate. If the
beneficiary designated by the Participant shall survive the Participant but die
before receiving all distributions hereunder, all amounts otherwise payable to
the deceased beneficiary shall be paid to such deceased beneficiary's Estate
unless the Participant's beneficiary designation provides otherwise. The Company
shall have no responsibility with respect to the validity of any beneficiary
designation made by a Participant and shall be fully protected if it acts
thereon in good faith.
13. TAXES.
The Company shall be entitled to pay or withhold the amount of any tax
which it believes is required as a result of the payment of any amounts under
the Plan, and the Company may defer making payments hereunder until arrangements
satisfactory to it have been made with respect to any such withholding
obligations. A Participant may, at his election, satisfy his obligation for
payment of withholding taxes by having the Company retain a number of Shares, if
payment of the Account includes Shares, having an aggregate Market Price on the
date the Shares are withheld equal to the amount of the withholding tax or by
delivering to the Company Shares already owned by the Participant having an
aggregate Market Price on the
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date the Shares are delivered equal to the amount of the withholding tax. The
Company shall have the right to rely on a written opinion of legal counsel,
which may be independent legal counsel or legal counsel regularly employed by
the Company, if any question should arise as to the payment or withholding of
taxes.
14. REGULATORY APPROVALS AND RULE 16B-3.
(a) Notwithstanding anything contained in this Plan to the contrary, the
Company shall have no obligation to issue or deliver certificates for Shares
resulting from the payment of an Account hereunder prior to (i) the obtaining of
any approval from any governmental agency which the Company shall, in its sole
discretion, determine to be necessary or advisable, (ii) the admission of such
Shares to listing on the stock exchange on which the Shares may be listed, and
(iii) the completion of any registration or other qualification of said Shares
under any state or federal law or ruling of any governmental body which the
Company shall, in its sole discretion, determine to be necessary or advisable.
(b) It is intended that the Plan and any award made to a person subject to
Section 16 of the 1934 Act, and any transaction or election hereunder by any
such person, meet all of the requirements of Rule 16b-3. If any provision of the
Plan or any award hereunder would disqualify the Plan or such award under, or
would not comply with, Rule 16b-3, such provision or award shall be construed or
deemed to conform to Rule 16b-3.
(c) Any election by a Participant subject to Section 16 of the 1934 Act,
pursuant to Paragraph 13 hereof, may be made only during such times as permitted
by Rule 16b-3 and may be disapproved by the Committee at any time after the
election.
15. EFFECTIVENESS OF THE PLAN.
The Plan shall become effective upon approval by the Company's Executive
Compensation Committee on March 30, 1994, subject to ratification of the Plan by
the vote of the holders of a majority of the Shares present or represented and
entitled to vote at an annual or special meeting of the Company duly called and
held. If shareholder approval is not obtained, any awards previously made
hereunder will be void and of no further effect.
16. TERMINATION AND AMENDMENT.
The Plan may be terminated, modified or amended by the affirmative vote of
the holders of a majority of the Shares of the Company present, or represented,
and entitled to vote at a meeting of the shareholders of the Company. The
Committee may also terminate the Plan or make such modifications or amendments
thereto as it shall deem advisable in order to conform to any law or regulation
applicable thereto; provided, however, that the Committee may not, unless
otherwise permitted under the federal securities law, without further approval
of the shareholders of the Company, adopt any amendment to the Plan which would
cause the Plan to no longer comply with Rule 16b-3, Section 162(m) of the Code
or any successor rule or other regulatory requirements. No termination,
modification or amendment of the Plan may, without the consent of a Participant,
adversely affect the rights of such Participant in his Account, other than a
termination because the requisite shareholder approval is not obtained. In such
event, the last sentence of Paragraph 15 hereof shall apply.
17. GOVERNING LAW.
The Plan shall be construed, administered and governed in all respects
under and by the applicable laws of the State of Wisconsin.
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<PAGE> 29
MARSHALL & ILSLEY CORPORATION
770 North Water Street
Milwaukee, Wisconsin 53202
<PAGE> 30
PROXY CARD
MARSHALL & ILSLEY CORPORATION
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints J.A. Puelicher and J.B. Wigdale, and
each of them, as proxies, each with the power to appoint his substitute, and
hereby authorizes each of them to represent and to vote, as designated on the
reverse hereof, all of the shares of stock of Marshall & Ilsley Corporation
held of record by the undersigned on June 30, 1994, at the 1994 Annual Meeting
of Shareholders of Marshall & Ilsley Corporation to be held on August 23, 1994
or at any adjournment thereof.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this proxy
will be voted "FOR" the election of all nominees for directors and "FOR"
approval of the Marshall & Ilsley Corporation 1994 Long-Term Incentive Plan.
(Continued and to be signed on the reverse side.)
<PAGE> 31
Please mark boxes in blue or black ink.
1. ELECTION OF CLASS I DIRECTORS:
FOR all nominees below to serve for the terms indicated below and until
their successors are elected and qualified (except as marked to the
contrary below). / /
WITHHOLD AUTHORITY to vote for all nominees listed below. / /
(Instruction: To withhold authority to vote for any individual
nominee,strike a line through that nominee's name in the list below).
Class I (with terms expiring April 1997): Richard A. Abdoo, Wendall F.
Bueche, G.H. Gunnlaugsson, Jack F. Kellner, Peter M. Platten, III,
J.B. Wigdale, James O. Wright
2. PROPOSAL TO APPROVE THE 1994 LONG-TERM INCENTIVE PLAN
FOR / / AGAINST / / ABSTAIN / /
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
Please sign exactly as your name appears below. When
shares are held by joint tenants, both should sign.
When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
If a corporation, please sign in full corporate name
by President or other authorized officer. If a
partnership, please sign in partnership name by
authorized person.
Date: 1994
-----------------------------------,
--------------------------------------------------
(Signature of Shareholder)
Please mark, sign, date
and return this Proxy --------------------------------------------------
Card promptly using the (Signature of Shareholder - if held jointly)
envelope provided.
