<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
MARSHALL & ILSLEY CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
MARSHALL & ILSLEY CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $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 transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
/ / 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> 2
NOTICE OF
1995 ANNUAL MEETING
AND
PROXY STATEMENT
<PAGE> 3
MARSHALL & ILSLEY CORPORATION
770 NORTH WATER STREET
MILWAUKEE, WISCONSIN 53202
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 25, 1995
TO THE SHAREHOLDERS OF MARSHALL & ILSLEY CORPORATION:
The 1995 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, April 25, 1995 at 10:00 a.m., local time, for
the following purposes:
(1) To elect seven Directors to serve until the 1998 Annual Meeting of
Shareholders and until their successors are elected and qualified;
(2) To approve the Marshall & Ilsley Corporation 1995 Directors Stock
Option 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 March 6, 1995 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, YOU ARE URGED TO
DATE, SIGN AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE WHETHER OR
NOT YOU 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
March 10, 1995
<PAGE> 4
MARSHALL & ILSLEY CORPORATION
770 NORTH WATER STREET
MILWAUKEE, WISCONSIN 53202
MARCH 10, 1995
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, April 25, 1995 (the "Annual Meeting"). At
the Annual Meeting, the shareholders of the Company will elect seven Class II
Directors, each of whom will hold office until April 1998, 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 1995 Directors
Stock Option 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 March 10, 1995.
Each shareholder of record at the close of business on March 6, 1995 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 March 6, 1995, the Company had
outstanding 94,137,099 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, 1994, was mailed to shareholders of the
Company commencing on March 10, 1995.
UNLESS OTHERWISE DIRECTED, ALL PROXIES WILL BE VOTED FOR THE ELECTION OF
EACH OF THE INDIVIDUALS NOMINATED TO SERVE AS A CLASS II DIRECTOR AND FOR
APPROVAL OF THE 1995 DIRECTORS STOCK OPTION 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
1
<PAGE> 5
BROKERS OR NOMINEES DO NOT HAVE DISCRETIONARY POWER TO VOTE) WILL BE TREATED AS
PRESENT FOR PURPOSES OF 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 1995 DIRECTORS
STOCK OPTION PLAN. WITH RESPECT TO THE PROPOSAL TO APPROVE THE 1995 DIRECTORS
STOCK OPTION 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 March 6, 1995 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 10,447,024(2) 11.10%
1000 North Water Street
Milwaukee, WI 53202
The Northwestern Mutual Life 8,665,374(3) 8.51%
Insurance Company
720 East Wisconsin Avenue
Milwaukee, WI 53202
Richard A. Abdoo 600 *
Oscar C. Boldt 82,658(4) *
J.P. Bolduc -0- *
Wendell F. Bueche 10,500 *
Jon F. Chait 32,895 *
J.L. Delgadillo 38,000(5) *
Glenn A. Franke 190,283 *
G.H. Gunnlaugsson 282,653(6) *
Burleigh E. Jacobs 40,500 *
Jack F. Kellner 490,702 *
James F. Kress 10,500 *
D.J. Kuester 419,729(7) *
Edward L. Meyer, Jr. 16,028(8) *
Don R. O'Hare 3,600 *
San W. Orr, Jr. 325,154(9) *
Peter M. Platten, III 373,426(10) *
J.A. Puelicher 651,228(11) *
Stuart W. Tisdale 1,602 *
J.B. Wigdale 614,530(12) *
James O. Wright 7,620(13) *
Gus A. Zuehlke 159,260(14) *
</TABLE>
All directors and executive officers of the Company as a group (28 persons,
including the above) own 4,290,665 shares of Common Stock or 4.49% 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. 14 to Schedule 13-G dated
February 10, 1995. 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 2,109,055 shares
(approximately 2.24%), and shared voting power as to 46,736 shares (less
than 1.0%); sole investment power as to 10,027,428 shares (approximately
10.65%), and shared investment power as to 1,046,595 shares (approximately
1.11%). The Company owns all of the issued and outstanding capital stock of
the Trust Company.
(3) This information is based on Amendment No. 8 to Schedule 13-G dated
February 8, 1995. 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
1,870,057 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 30,914 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 March 6, 1995.
(5) Includes 12,000 shares which could be acquired pursuant to the exercise of
stock options within sixty days of March 6, 1995.
(6) Includes 2,700 shares held by Mr. Gunnlaugsson's family as to which he
disclaims beneficial ownership and 173,000 shares which could be acquired
pursuant to the exercise of stock options within sixty days of March 6,
1995.
(7) Includes 251,000 shares which could be acquired pursuant to the exercise of
stock options within sixty days of March 6, 1995.
4
<PAGE> 8
(8) Includes 1,248 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 March 6, 1995.
(9) 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.
(10) Includes 5,443 shares held by Mr. Platten's family as to which he disclaims
beneficial ownership and 189,063 shares as to which Mr. Platten exercises
sole voting power.
(11) 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 March 6, 1995.
(12) Includes 11,550 shares held by Mr. Wigdale's family as to which he
disclaims beneficial ownership and 298,000 shares which could be acquired
pursuant to the exercise of stock options within sixty days of March 6,
1995.
(13) Includes 3,120 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.
(14) 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 March 6,
1995.
(15) Includes 116,200 shares of restricted stock as to which the holders
exercise sole voting power and 1,521,345 shares which could be acquired
pursuant to the exercise of stock options within sixty days of March 6,
1995.
ELECTION OF DIRECTORS
The Company's Restated Articles of Incorporation provide that the Company's
Directors are 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 II Directors to serve until the Company's
1998 Annual Meeting of Shareholders and until their successors are elected and
qualified. Each Class II Director's term expires at the 1995 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 I and Class III Directors.
5
<PAGE> 9
NOMINEES STANDING FOR ELECTION
<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 44 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 53 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. A Director since
February 1994.
Edward L. Meyer, Jr. President, Anamax Corporation, a processor of hides and
Age 57 manufacturer of tallow. A Director since May 1994.
Don R. O'Hare Chairman of Board and Chief Executive Officer, September 1994
Age 72 to present, Sundstrand Corporation; consultant to Sundstrand
Corporation, August 1991 to September 1994; 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 Sauer,
Inc. A Director since 1977.
San W. Orr, Jr. Attorney, Estates of A.P. Woodson & Family; Chairman of the
Age 53 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 74 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 Sentry Insurance, A Mutual
Company and W.R. Grace & Co. A Director since 1959.
Stuart W. Tisdale Retired; Chairman of the Board and Chief Executive Officer,
Age 66 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 70 subsidiaries in general contracting, development and related
businesses. A Director since May 1994.
</TABLE>
6
<PAGE> 10
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AND DIRECTORSHIPS
- ---------------------------- ---------------------------------------------------------------
<S> <C>
J.P. Bolduc President and Chief Executive Officer, January 1993 to March
Age 55 1995, President and Chief Operating Officer, August 1990 to
January 1993, Vice Chairman, November 1986 to August 1990,
Executive Vice President and Chief Financial Officer, February
1986 to November 1986, Senior Vice President 1983 to November
1986, W.R. Grace & Co.; Chief Operating Officer of President
Reagan's Private Sector Survey on Cost Control in the Federal
Government from 1982 through 1984. Also a director of W.R.
Grace & Co., Sundstrand Corporation, Newton Mining Corporation,
Brothers Gourmet Coffees, Inc. and Unisys Corporation. A
Director since 1987.
Glenn A. Francke Retired; Chairman of the Board, 1971 through January 1987, M&I
Age 73 Northern Bank, a subsidiary of the Company. A Director since
1960.
Burleigh E. Jacobs Chairman of the Board, Chief Executive Officer and Director,
Age 75 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 65 Packaging, Inc., a manufacturer of corrugated and packaging
materials. A Director since 1986.
Gus A. Zuehlke Chairman, Valley Bancorporation until May 1994; Chairman,
Age 73 Valley Bank, Appleton, Wisconsin, until May 1994. A Director
since May 1994.
Class I Directors (terms expiring in 1997)
Richard A. Abdoo Chairman of the Board, President and Chief Executive Officer,
Age 51 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 Chairman since August 1994, President, February 1993 to August
Age 64 1994, Chief Executive Officer and Director, February 1993 to
present, IMC Global, Inc.; 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. A Director since
February 1994.
</TABLE>
7
<PAGE> 11
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AND DIRECTORSHIPS
- ---------------------------- ---------------------------------------------------------------
<S> <C>
Jack F. Kellner Retired; Chairman of the Board from July 1991 to September
Age 78 1994, President, 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 55 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 58 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 74 manufacturer of products using flow measurement technology
serving utility, industrial and commercial markets. A Director
since 1960.
</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 1994. Each Director attended at least 75% of the meetings
of the Board and Board Committees on which the director served, except for Mr.
Bueche who did not attend two Board meetings.
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, the 1988 Restricted Stock Plan
and the 1994 Long-Term Incentive 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 five meetings in 1994. 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 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 1994.
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
8
<PAGE> 12
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 five meetings in 1994.
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 Bylaws. The Nominating Committee held
one meeting in 1994.
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,
1994, 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 of
the Company and its significant subsidiaries represented 13.9% of shareholders
equity at December 31, 1994.
9
<PAGE> 13
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
AWARDS
------------------------------
ANNUAL COMPENSATION RESTRICTED SECURITIES
NAME AND PRINCIPAL -------------------- STOCK UNDERLYING ALL OTHER
POSITION YEAR SALARY($) BONUS($) AWARDS($)(1) OPTIONS/SARS(#) COMPENSATION($)(2)
- ------------------------- ---- --------- -------- ------------ --------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
J.B. Wigdale 1994 $ 550,000 $225,000 -0- 56,000 $194,812
Chairman of the Board 1993 450,000 325,000 204,092
and Chief Executive 1992 400,000 300,000 214,980
Officer
D.J. Kuester 1994 475,000 177,601 -0- 48,000 133,521
President 1993 375,000 277,335 141,193
1992 350,000 227,108 149,545
G.H. Gunnlaugsson 1994 325,000 177,136 -0- 34,000 76,594
Executive Vice President 1993 300,000 201,954 87,283
and Chief Financial 1992 275,000 166,775 94,763
Officer
P.M. Platten, III (3) 1994 277,083 102,100 -0- 100,000 22,166
Vice Chairman of the
Board
J.L. Delgadillo 1994 220,000 120,000 91,250 14,000 20,600
Senior Vice President 1993 173,750 130,889 27,562
1992 150,000 103,956 32,140
</TABLE>
- ------------------
(1) As of December 31, 1994, the following individuals have unreleased Key
Restricted Stock: Mr. Wigdale, 36,000 shares valued at $672,120; Mr.
Kuester, 27,000 shares valued at $504,090; Mr. Gunnlaugsson, 18,000 shares
valued at $336,060; and Mr. Delgadillo, 8,900 shares valued at $162,813.
Dividends are paid on restricted stock.
(2) Includes the following amounts paid by M&I under a 401(k) Thrift Plan for
1994: J.B. Wigdale - $4,500; D.J. Kuester - $4,500; G.H. Gunnlaugsson -
$4,500; P.M. Platten - $0; and J.L. Delgadillo - $3,000. Includes the
following amounts paid by M&I under the Retirement Growth Plan for 1994:
J.B. Wigdale - $12,000; D.J. Kuester - $12,000; G.H. Gunnlaugsson -
$12,000; P.M. Platten - $12,000; and J.L. Delgadillo - $12,000. Includes
the following amounts paid by M&I under a Split Dollar Life Insurance Plan
for the benefit of the executives for 1994: J.B. Wigdale - $13,842; D.J.
Kuester - $8,164; G.H. Gunnlaugsson - $7,506; P.M. Platten - $0; and J.L.
Delgadillo - $0. Includes the following amounts accrued by M&I under the
Supplementary Retirement Benefits Plan for 1994: J.B. Wigdale - $32,000;
D.J. Kuester - $26,000; G.H. Gunnlaugsson - $14,000; P.M. Platten -
$10,166; and J.L. Delgadillo - $5,600. Also includes the following amounts
accrued by M&I under the Nonqualified Supplemental Retirement Plan for
1994: J.B. Wigdale - $132,470; D.J. Kuester - $82,857; G.H. Gunnlaugsson -
$38,588; P.M. Platten - $0; and J.L. Delgadillo - $0.
(3) M&I employee as of June 1, 1994. Salary and bonus paid in 1994 are prorated
amounts of $475,000 and $175,000, respectively.
10
<PAGE> 14
The following table provides information on options granted to the named
executive officers during 1994.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
% OF TOTAL
OPTIONS/SARS
NUMBER OF SECURITIES GRANTED TO EXERCISE OR GRANT DATE
UNDERLYING OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION PRESENT
NAME GRANTED(#)(1) FISCAL YEAR ($/SH)(2) DATE VALUE($)(3)
- --------------------------- ----------------------- ------------ ----------- ---------- ------------
<S> <C> <C> <C> <C> <C>
J.B. Wigdale 26,000 5.0% $ 21.00 2-15-04 $183,456
30,000 19.25 12-15-04 194,040
D.J. Kuester 22,000 4.3 21.00 2-15-04 155,232
26,000 19.25 12-15-04 168,168
G.H. Gunnlaugsson 16,000 3.0 21.00 2-15-04 112,896
18,000 19.25 12-15-04 116,424
P.M. Platten, III 100,000 8.9 21.75 6-1-04 730,800
J.L. Delgadillo 6,000 1.2 21.00 2-15-04 42,336
8,000 19.25 12-15-04 51,744
</TABLE>
- ------------------
(1) Options become exercisable on the following schedule: 50% after 12 months
from the date of grant, an additional 25% after 18 months from the date of
grant, and the remaining 25% after 24 months from the date of grant;
provided that the options will become immediately exercisable upon a
"Triggering Event" (which relates to a change of control of the Company).
(2) All options have an exercise price equal to 100% of the fair market of the
Company's Common Stock on the date of grant. The exercise price may be paid
in cash or by delivery of shares of the Company's Common Stock. Upon
exercise of an option, the holder may satisfy any tax obligations either by
having the Company withhold shares or by delivering shares such holder
already owns.
(3) The grant date present values were determined using the Black-Scholes model
with the following common assumptions: a ten year expected period of time to
exercise; a risk-free rate of return of 7.50%; an expected dividend yield of
2.54%; and a volatility factor of 18.68%.
The following table provides information on option exercises by the named
executive officers during 1994.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS AT IN-THE-MONEY OPTIONS/SARS
SHARES FY-END(#) AT FY-END($)(1)
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
J.B. Wigdale 30,000 $ 343,740 285,000 56,000 $ 1,425,630 $ -0-
D.J. Kuester 30,000 339,990 240,000 48,000 1,256,250 -0-
G.H. Gunnlaugsson -0- -0- 165,000 34,000 795,630 -0-
P.M. Platten, III -0- -0- -0- 100,000 -0- -0-
J.L. Delgadillo 18,000 198,369 18,000 14,000 85,500 -0-
</TABLE>
- ------------------
(1) For valuation purposes, a December 31, 1994 market price of $19.00 was used.
11
<PAGE> 15
The following table provides information on long-term incentive plan awards
to the named executive officers with respect to 1994. Awards with respect to
1995 have not been included.
LONG-TERM INCENTIVE PLANS-AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
NUMBER OF SHARES, UNITS PERFORMANCE OR OTHER PERIOD
NAME OR OTHER RIGHTS UNTIL MATURATION OR PAYOUT(1)
- --------------------------------------------- ----------------------- -----------------------------
<S> <C> <C>
J.B. Wigdale 13,000 3 Years
D.J. Kuester 11,000 3 Years
G.H. Gunnlaugsson 8,000 3 Years
P.M. Platten, III -0- --
J.L. Delgadillo 3,000 3 Years
</TABLE>
- ------------------
(1) 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 of the
Company's Common Stock. 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" (which relates to a change in control of the Company). The value of
the award at the end of the three-year period is dependent on the total
return of the Company's Common Stock for the three-year period when compared
with the total return for those stocks composing the Keefe, Bruyette, &
Woods, 50 Bank 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 Common Stock 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%).
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 when adopted was to provide five 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 would 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 and $100,000 for Messrs.
Wigdale, Kuester 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
12
<PAGE> 16
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), 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, Gunnlaugsson, Platten and Delgadillo, seven
additional executive officers and 15 officers and other employees of the Company
and its subsidiaries (collectively, the "Executives"). The Employment Agreements
with Messrs. Wigdale, Kuester, Gunnlaugsson, and Platten 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.
Upon consummation of the merger of Valley Bancorporation ("Valley") into
M&I on May 31, 1994, M&I became the successor to certain continuing obligations
of Valley to Mr. Platten arising from the
13
<PAGE> 17
settlement of his employment contract with Valley. From June 1, 1994 through
December 31, 1994, Mr. Platten received $4,246 as the cash equivalent of certain
benefits and perquisites he would have received under his employment contract
with Valley. Payment for these items continues through March 1, 1997 in the
amounts of $16,984 in 1995 and 1996, and $4,246 in 1997. In addition, pursuant
to the settlement of Mr. Platten's employment agreement with Valley, commencing
on July 1, 1997, Mr. Platten will receive an enhanced supplemental pension
benefit of $17,903 per month until age 65. Starting at age 65 and until his
death, Mr. Platten will receive $8,259 per month as an enhanced supplemental
pension benefit. If Mr. Platten's wife survives him, she will receive 50% of
such benefits for the remainder of her life. In addition, to the extent any of
the foregoing benefits are subject to excise taxes under Section 4999 of the
Internal Revenue Code of 1986, as amended, Mr. Platten will receive a gross-up
payment such that he will be in the same after-tax economic position as if no
excise tax were imposed. Mr. Platten is also eligible to receive retirement
benefits under the Valley Pension Plan and the Valley Excess Benefits Plan.
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 or
the Common Stock. 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 1994. 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 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. Mr. Puelicher also receives a supplemental retirement benefit of
$58,333 per month under his Supplemental Retirement Plan dated December 10,
1992. 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.
14
<PAGE> 18
EXECUTIVE 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. The Committee currently intends to recommend compensation amounts and
plans which will meet the requirements for deductibility.
1994 COMPENSATION
Overview
With regard to 1994 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 reviewed this information for comparison
purposes, taking into account the Company's size relative to the size of the
companies in the peer group. The Committee did not, however, set the
compensation for the Company's executive officers at a specific level as
compared to the peer group. The Committee's compensation 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 Company's
performance, the Committee considered, among other things, the profitability of
the Company as a whole on both a long-term and short-term basis, and the impact
of the merger with Valley Bancorporation on the Company. With respect to the
merger with Valley, the Committee considered the increased size of the Company,
the extraordinary effort required to complete the merger on schedule and within
cost estimates, and the added responsibilities of managing a much larger
organization.
15
<PAGE> 19
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 decisions
with respect to all elements of compensation were based on all the factors
considered by the Committee, including objective factors and the Committee's
subjective assessment of the executive's performance.
Base Salary and Bonus
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 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.
The Committee viewed the performance of the Company's senior executive
officers in 1994 very favorably, particularly their efforts in completing the
merger with Valley. The Committee believed that as between current cash
compensation (salary and bonus) and long-term incentives (stock options and LTIP
awards), it was appropriate in 1994 to emphasize and reward the senior
executives with increased long-term incentives. This reflects the Committee's
belief that the senior executives should be rewarded for the long-term financial
success of the strategic initiatives commenced in 1993 and 1994. Accordingly,
total cash compensation (salary and bonus) for certain senior executive officers
remained the same as for the preceding year, and long-term incentive
compensation was increased. For 1994, Mr. Platten's compensation was approved by
the Board of Directors in connection with the Company's merger with Valley.
Other executive officers received adjustments in salaries and bonuses in amounts
the Committee considered appropriate in relation to such officers' individual
circumstances.
Long-Term Incentive Compensation
The Committee made awards to the Company's executive officers in 1994 under
the 1993 Executive Stock Option Plan ("Stock Option Plan") and the 1994
Long-Term Incentive Plan ("LTIP"). The purpose of these awards is to furnish
long-term incentives to executive officers to build shareholder value, and to
motivate and retain the personnel critical to the Company's success. It is the
intention of the Committee to continue to emphasize long-term incentives in the
compensation provided to the Company's executive officers. Each executive
officer received an award in 1994 based upon that officer's relative position,
responsibilities and performance. In determining the size of the awards, the
Committee considered information provided by professional compensation
consultants on stock option and long-term incentive plan awards by companies in
the peer group referred to above. However, the Committee did not base the size
of the awards at any specific level in comparison to the peer group, nor did the
Committee base the awards on any specific element of the Company's performance.
Chief Executive Officer Compensation
In determining Mr. Wigdale's compensation for 1994, the Compensation
Committee considered a variety of factors, including the successful completion
of the acquisition of Valley Bancorporation, and the added responsibilities of
managing a much larger organization. The Compensation Committee also considered
16
<PAGE> 20
Mr. Wigdale's 32 years of service to the Company. The Committee also reviewed
Mr. Wigdale's total compensation package in light of prevailing market factors.
Mr. Wigdale was awarded stock options under the Stock Option Plan and
performance units under the LTIP in 1994. The Compensation Committee believes
such compensation is fair and appropriate under the circumstances.
The Compensation Committee:
Mr. Jacobs, Chairman Mr. Kellner Mr. O'Hare Mr. Wright
17
<PAGE> 21
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.
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
M&I 100 87 171 202 231 191
S&P 100 97 126 136 150 152
KBW 100 72 114 145 153 145
</TABLE>
18
<PAGE> 22
1995 DIRECTORS STOCK OPTION PLAN
The complete text of the 1995 Directors Stock Option Plan is set forth as
Appendix A to this Proxy Statement. The following summary of the material
features of the Directors Stock Option 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 1995 DIRECTORS
STOCK OPTION PLAN.
GENERAL
At the Annual Meeting, shareholders will be requested to approve the 1995
Directors Stock Option Plan ("Directors Plan") which was adopted by the Board of
Directors and the Executive Compensation Committee on February 16, 1995, subject
to approval of the shareholders at the Annual Meeting.
The Board of Directors believes that the adoption of the Directors Plan is
desirable since it will serve to promote the interests of M&I and its
shareholders by providing the non-employee directors with an opportunity to
acquire a proprietary interest in the Company thereby more closely aligning
their interests with those of shareholders and providing a stronger incentive
for them to put forth maximum effort for the continued success and growth of the
Company. In addition, the Board of Directors believes the opportunity to acquire
a propriety interest in the Company will aid the Company in attracting and
retaining qualified personnel to serve as directors of the Company.
BENEFITS
Participants under the Directors Plan will be limited to directors of the
Company who are not employees of the Company or its subsidiaries
("Participants"). Currently 16 directors would be eligible to participate in the
Directors Plan. The Directors Plan provides that on the date of the Company's
1995 Annual Meeting, each Participant whose term of office as a director
continues after such meeting will be granted an option for that number of shares
of Common Stock equal to the multiple of 2,500 and the number of years remaining
in such Participant's term as a director of the Company. On the date of each
Annual Meeting after the 1995 Annual Meeting of Shareholders, each Participant
elected or re-elected as a director at such Annual Meeting will receive an
option for that number of shares of Common Stock equal to the multiple of 2,500
and the number of years in the term to which such Participant has been elected.
In addition, a Participant who is appointed to fill a vacancy on the Board of
Directors, or a director who becomes a Participant because such director ceases
to be employed by the Company or its subsidiaries, will receive, on the date of
the next Annual Meeting, an option for that number of shares of Common Stock
equal to a multiple of 2,500 and the number of years remaining in such
Participant's term as a director of the Company.
Only non-qualified stock options will be granted under the Directors Plan.
The Directors Plan provides that the option price per share will not be less
than 100% of the fair market value of the shares on the date the option is
granted, that such options will not be exercisable more than 10 years after the
date of grant, and that such options will terminate no later than three years
after the Participant ceases to be a director of the Company for any reason.
Options granted under the Directors Plan may be exercised at any time after they
are granted. The exercise price of an option granted under the Directors Plan
may, at the Participant's election, be paid in cash or previously owned shares
of Common Stock or a combination thereof.
19
<PAGE> 23
ADMINISTRATION
The Board of Directors will administer the Directors Plan; provided,
however, that the Board of Directors may appoint a committee of not less than
three directors to administer the Directors Plan if the Board of Directors deems
it necessary or advisable to appoint such committee, or if it is otherwise
necessary to appoint such committee in order to comply with the exemptive rules
promulgated pursuant to Section 16(b) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Grants of options under the Directors Plan and the
amount, price, and timing of the awards to be granted will be automatic as
described above.
COMMON STOCK SUBJECT TO THE DIRECTORS PLAN
Under the Directors Plan, the maximum number of shares of Common Stock
which may be issued or sold (subject to adjustment for certain events as
described below) is 500,000. The shares may consist of treasury shares or
unissued shares, or a combination of both. Upon the expiration or termination
(whether by voluntary surrender, lapse of time or otherwise), in whole or in
part, of unexercised options, the shares of Common Stock subject thereto will
again be available for regrant as options under the Directors Plan. On March 6,
1995, the closing sale price of a share of Common Stock on the NASDAQ/NMS was
$20.875.
ADJUSTMENT IN EVENT OF CAPITAL CHANGES
The Directors Plan provides that the Board of Directors may make equitable
adjustments designed to protect against dilution in respect of the number of
shares authorized for issuance under the Directors Plan in the event of any
change in M&I's capitalization, including recapitalizations, stock splits, stock
dividends and similar transactions. In the event of a merger, consolidation or
any other transaction as a result of which the Common Stock will cease to be
registered under Section 12 of the Exchange Act or listed on any national
securities exchange or authorized to be quoted on a inter-dealer quotation
system of a registered national securities association, each outstanding option
will pertain to and apply to the securities which a holder of the number of
shares subject to the option would have been entitled to receive pursuant to
such transaction, with any such adjustment as the Board of Directors shall deem
appropriate. A dissolution of M&I or a sale of all or substantially all the
assets and property of M&I will cause each outstanding option to terminate
forthwith; provided, however, that the holders of outstanding options may
exercise such options to the extent exercisable immediately prior to such
dissolution or sale.
DURATION AND AMENDMENT OF THE DIRECTORS PLAN
No stock option may be granted pursuant to the Directors Plan after
February 16, 2005. The Board of Directors may at any time terminate the
Directors Plan with respect to any shares of Common Stock not at the time
subject to an outstanding option and may alter or amend the Directors Plan;
provided, however, that without the approval of M&I's stockholders, no amendment
may be made which would cause the Plan to no longer comply with Rule 16b-3 under
the Exchange Act, or any successor rule or other regulatory requirements.
Presently, Rule 16b-3 forbids any amendment without shareholder approval that
(i) materially increases the number of shares which may be issued under the Plan
(except in the case of adjustments in the event of capital changes as described
above), (ii) materially increases the benefits accruing to Participants under
the Plan, or (iii) materially modifies the requirements for eligibility for
participation in the Plan.
It is intended that the Directors Plan and any award made to a person
subject to Section 16 of the Exchange Act, and any transaction or election
thereunder by any such person, meet all of the requirements of
20
<PAGE> 24
Rule 16b-3, as such rule is currently in effect or as hereafter modified or
amended. If any provision of the Plan or any award thereunder would disqualify
the Directors Plan or such award under, or would not comply with, Rule 16b-3,
such provision or award shall be construed or deemed amended to conform to Rule
16b-3.
TAX STATUS OF OPTIONS
A Participant will not be deemed to have received taxable income upon the
grant of a non-qualified stock option. Upon the exercise of a non-qualified
stock option, a Participant generally will be deemed to have received income,
taxable for federal income tax purposes at ordinary income rates, equal to the
excess of the fair market value of the Common Stock received on the date of
exercise over the option price. However, if the sale of such stock at a profit
would subject the Participant to suit under Section 16(b) of the Exchange Act,
the Participant will not recognize income due to the exercise of the option
(unless the Participant elects to be taxed upon exercise under Section 83(b) of
the Code) until the Participant ceases to be subject to this provision, at which
time the Participant will recognize as ordinary income an amount equal to the
excess of the then fair market value of the Common Stock issued upon exercise
over the option price.
Upon the exercise of a non-qualified stock option, M&I will be entitled to
a deduction for Federal income tax purposes in an amount equal to the amount
included in income by the Participant as a result of such exercise. The basis of
shares received upon the exercise of a non-qualified stock option will be the
option exercise price paid plus the amount recognized by the Participant as
taxable income attributable to such shares as a result of the exercise. Gain or
loss recognized by the Participant on a subsequent disposition of any such
shares will be capital gain or loss if such shares constitute a capital asset in
the hands of the Participant. A Participant's holding period will commence on
the date of exercise. However, if a Participant is subject to Section 16(b) of
the Exchange Act with respect to any option shares, there will be included only
the period beginning at the time the restriction lapses or, if the election
under Section 83(b) of the Code is made, at the time of exercise. This deduction
will be available in the tax year of M&I in which the Participant recognizes the
income.
SUBMISSION OF SHAREHOLDER PROPOSALS
The 1996 Annual Meeting of Shareholders is scheduled for April 23, 1996. 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 1996 Annual Meeting of Shareholders must be submitted to the Company not
later than March 23, 1996. To be considered for inclusion in the proxy statement
solicited by the Board of Directors, shareholder proposals for consideration at
the 1996 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 11, 1995. 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 LLP as the Company's
independent auditors for the fiscal year ending December 31, 1995.
Representatives of Arthur Andersen LLP will be present at the Annual Meeting to
make any statement they may desire and to respond to questions from
shareholders.
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PENDING LEGAL PROCEEDINGS
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.
SECTION 16(a) REPORTING DELINQUENCIES
The Company believes that during 1994 its officers and directors complied
with all filing requirements under Section 16(a) of the Securities Exchange Act
of 1934 except as described below. Mr. Wright filed one Form 4 late with respect
to a transaction by a trust.
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
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APPENDIX A
MARSHALL & ILSLEY CORPORATION
1995 DIRECTORS STOCK OPTION PLAN
1. PURPOSE OF THE PLAN
The purpose of the Marshall & Ilsley Corporation 1995 Directors Stock
Option Plan (the "Plan") is to promote the best interests of Marshall & Ilsley
Corporation (the "Company") and its shareholders by providing the non-employee
directors of the Company with an opportunity to acquire a proprietary interest
in the Company thereby more closely aligning their interests with those of
shareholders and providing a stronger incentive for them to put forth maximum
effort for the continued success and growth of the Company. In addition, the
opportunity to acquire a proprietary interest in the Company will aid the
Company in attracting and retaining qualified personnel to serve as directors of
the Company.
2. ADMINISTRATION OF THE PLAN
(a) Procedure; Disinterested Directors. The Board of Directors will
administer the Plan; provided, however, that the Board of Directors may appoint
a committee (the "Committee") of not less than three (3) directors to administer
the Plan if the Board of Directors deems it necessary or advisable to appoint
such Committee, or if it is otherwise necessary to appoint such Committee in
order to comply with the exemptive rules promulgated pursuant to Section 16(b)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
(b) Powers. Grants of options to purchase the common stock, par value $1.00
per share ("Common Stock"), of the Company under the Plan (the "Options") and
the amount, price, and timing of the awards to be granted will be automatic as
described in Section 5. However, all questions of interpretation of the Plan
will be determined by the Board of Directors or the Committee, as applicable,
and such determination will be final and binding upon all parties.
3. PARTICIPANTS IN THE PLAN
Participants in the Plan shall consist of all present or future directors
of the Company who are not employees of the Company or its subsidiaries. Any
director who is an employee of the Company or its subsidiaries and who
subsequently ceases to be an employee of the Company and its subsidiaries, but
remains a director of the Company, shall become eligible to participate in the
Plan at the time such director ceases to be employed by the Company or its
subsidiaries.
4. SHARES RESERVED UNDER THE PLAN
The aggregate number of shares of the Company's Common Stock which may be
issued under the Plan shall not exceed an aggregate of five hundred thousand
(500,000) shares of Common Stock, which may be treasury shares or authorized but
unissued shares, or a combination of the two, subject to adjustment as provided
in Paragraph 11 hereof. Any shares of Common Stock which are subject to an
Option which expires or terminates for any reason (whether by voluntary
surrender, lapse of time, or otherwise) and which is unexercised as to such
shares, may again be the subject of an Option under the Plan. The holder of an
Option shall be entitled to the rights and privileges of ownership with respect
to the shares of Common Stock subject
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to the Option only after actual purchase and issuance of such shares of Common
Stock pursuant to the exercise of all or part of an Option.
5. NUMBER OF SHARES TO BE GRANTED EACH ELIGIBLE DIRECTOR; EXERCISE
(a) Automatic Grant. On the date of the Company's 1995 Annual Meeting of
Shareholders, each eligible director of the Company whose term of office
continues after the Company's 1995 Annual Meeting of Shareholders shall be
granted an Option to purchase that number of shares of Common Stock equal to the
multiple of two thousand five hundred (2,500) and the number of years remaining
in such director's term as a director of the Company. On the date of each Annual
Meeting of Shareholders of the Company after the Company's 1995 Annual Meeting
of Shareholders, each eligible director elected or re-elected at such Annual
Meeting shall be granted an Option to purchase that number of shares of Common
Stock equal to the multiple of two thousand five hundred (2,500) and the number
of years in the term to which such director has been elected to the Company's
Board of Directors. Each eligible director appointed to the Board of Directors
to fill a vacancy on the Board of Directors, including a vacancy resulting from
an increase in the number of directors, and each director who becomes an
eligible director because such director ceases to be employed by the Company or
its subsidiaries, shall, at the next Annual Meeting of Shareholders of the
Company after such appointment or change in employment status, as the case may
be, if such eligible director is not elected or re-elected at such Annual
Meeting, be granted an option to purchase that number of shares of Common Stock
equal to the multiple of two thousand five hundred (2,500) and the number of
years remaining in such director's term as a director of the Company.
(b) Exercise. An Option may be exercised in whole at any time or in part
from time to time on or after the date of grant; provided, however, that if an
Option is exercised within six (6) months from the date of grant, the Common
Stock issued upon exercise of such Option may not be sold, transferred, or
otherwise disposed of by the director exercising such Option until such six (6)
month period has expired.
(c) Written Agreement. Each Option shall be evidenced by an appropriate
written agreement, the form of which shall be consistent with the terms and
conditions of the Plan and applicable law, and which shall be signed by one or
more designated members of the Board of Directors or the Committee and the
non-employee director.
(d) Tax Status of Options. Options granted hereunder shall not comply with
the provisions of Section 422 of the Internal Revenue Code of 1986, as amended.
6. OPTION PRICE; TERM
Options granted hereunder shall consist of options to purchase shares of
Common Stock at purchase prices per share of not less than 100 percent of the
fair market value per share of the shares of Common Stock on the date the Option
is granted. For purposes of this Plan, the fair market value per share of the
Common Stock on any date shall be the closing sale price per share of the Common
Stock on the National Association of Securities Dealers Automated
Quotation/National Market System ("NASDAQ/NMS") on the business day immediately
preceding such date. If the Common Stock ceases to be listed on the NASDAQ/NMS,
the Board of Directors or the Committee, as applicable, shall designate an
alternative method of determining the fair market value per share of the Common
Stock. No Option will be exercisable after the expiration of ten (10) years
after the date of its grant, and each Option will terminate no later than three
(3) years after the holder thereof ceases to be a director of the Company for
any reason (but in no event later than ten (10) years after its date of grant).
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7. FORM OF PAYMENT
The exercise price of the Option shall be payable in whole or in part in
cash or in shares of Common Stock held by the director for more than six (6)
months. If the director elects to pay all or a part of the exercise price in
shares of Common Stock, such director may make such payment by delivering to the
Company a number of shares already owned by the director equal to the exercise
price. All shares of Common Stock so delivered shall be valued at their fair
market value per share on the date delivered.
8. 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 grant or exercise of any Option
under the Plan, and the Company may defer making delivery with respect to the
Common Stock obtained pursuant to exercise of any Option until arrangements
satisfactory to it have been made with respect to any such withholding
obligations. A director exercising an Option may, at such director's election
and subject to Paragraph 5(b), satisfy the obligation for payment of withholding
taxes either by having the Company retain a number of shares having an aggregate
fair market value per share 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 director having an aggregate fair market value per share on the
date the shares are delivered equal to the amount of the withholding tax.
9. TRANSFERABILITY
Options granted to a director under this Plan shall not be transferable and
during the lifetime of such director shall be exercisable only by such director.
A director shall have the right to transfer the Options granted to such director
upon such director's death, either by the terms of such director's will or under
the laws of descent and distribution, subject to the limitations set forth
herein, and all such distributees shall be subject to all terms and conditions
of this Plan to the same extent as would such director if still alive, except as
otherwise expressly provided herein.
10. SECURITIES LAW
Each Option agreement shall contain such representations, warranties and
other terms and conditions as shall be necessary in the opinion of counsel to
the Company to comply with all applicable federal and state securities law. The
Company shall have the right to delay the issue or delivery of any shares of
Common Stock under the Plan until (a) the completion of such registration or
qualification of such shares under any federal or state law, ruling or
regulation as the Company shall determine to be necessary or advisable, and (b)
receipt from the holder of the Option of such documents and information as the
Company may deem necessary or appropriate in connection with such registration
or qualification.
11. ADJUSTMENT PROVISIONS
If the Company shall effect a subdivision or consolidation of the Common
Stock or other capital readjustment, the payment of a stock dividend, or other
increase or reduction in the number of shares of Common Stock outstanding, or
shall effect a spin-off, split-off, or other distribution of assets to
shareholders, in any case without receiving consideration therefor in money,
services or property, the number of shares of Common Stock then remaining
subject to or available for Options, including shares as to which Options have
been granted but which remain unexercised and shares of Common Stock reserved
for Options, shall be
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appropriately adjusted by the Board of Directors or the Committee, as
applicable, subject to the express terms and conditions of this Plan.
Subject to any required action by the Company's shareholders, if the
Company shall be a party to any merger or consolidation in which the Company is
not the surviving corporation or any other transaction or series of transactions
which has a reasonable likelihood or a purpose of causing the Common Stock to be
neither listed on any national securities exchange nor authorized to be quoted
on an inter-dealer quotation system of any registered national securities
association, or registered under Section 12 of the Exchange Act, each
outstanding Option shall pertain to and apply to the securities which a holder
of the number of shares of Common Stock subject to the Option would have been
entitled to receive pursuant to such transaction, with any such adjustment in
the exercise price as the Board of Directors or the Committee, as applicable,
shall deem appropriate. A dissolution of the Company or a sale of all or
substantially all of the assets and property of the Company shall cause each
outstanding Option to terminate forthwith; provided, however, the holders of
outstanding Options may exercise such Options to the extent exercisable
immediately prior to such dissolution or sale.
12. EFFECTIVENESS OF THE PLAN
The Plan shall become effective on February 16, 1995, subject to approval
of the Plan by the shareholders of the Company.
13. RULE 16b-3
It is intended that the Plan and any award made to a person subject to
Section 16 of the Exchange Act, and any transaction or election hereunder by any
such person, shall 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
hereunder, or would not comply with Rule 16b-3, such provision or award shall be
construed or deemed amended to conform to Rule 16b-3.
14. TENURE
The Plan shall not be construed as conferring any rights upon any person
for continuation as a member of the Board of Directors of the Company.
15. TERMINATION AND AMENDMENT
Unless the Plan shall theretofore have been terminated as hereinafter
provided, no Option hereunder shall be granted after February 16, 2005. The Plan
may be terminated, modified or amended by the affirmative vote of the holders of
a majority of the shares of Common Stock present, or represented, and entitled
to vote at a meeting of the shareholders of the Company. The Board of Directors
of the Company may also terminate the Plan or make such modifications or
amendments thereof as it shall deem advisable, including such modifications or
amendments as it shall deem advisable in order to conform to any law or
regulation applicable thereto; provided, however, that the Board of Directors
may not, unless otherwise permitted under the federal securities laws, 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, or any
successor rule or other regulatory requirements. No termination, modification or
amendment of the Plan may, without the consent of the holder an Option granted
hereunder, adversely affect the rights of such holder under an outstanding
Option then held by the holder.
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MARSHALL & ILSLEY CORPORATION
770 North Water Street
Milwaukee, Wisconsin 53202
<PAGE> 31
PROXY CARD
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MARSHALL & ILSLEY CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints J.B. Wigdale and D.J. Kuester,
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 March
6, 1995, at the 1995 Annual Meeting of Shareholders of Marshall & Ilsley
Corporation to be held on April 25, 1995 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 1995
DIRECTORS STOCK OPTION PLAN.
(Continued and to be signed on the reverse side.)
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PLEASE MARK BOXES IN BLUE OR BLACK INK.
1. ELECTION OF CLASS II 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 II (with terms expiring April 1998): Jon F. Chait, D.J.
Kuester, Edward L. Meyer, Jr., Don R. O'Hare, San W. Orr, Jr.,
J.A. Puelicher, Stuart W. Tisdale
2. PROPOSAL TO APPROVE THE 1995 DIRECTORS STOCK OPTION 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: ,1995
(Signature of Shareholder)
PLEASE MARK, SIGN, DATE AND
RETURN THIS PROXY CARD PROMPTLY
USING THE ENVELOPE PROVIDED.
(Signature of Shareholder - if
held jointly)
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