<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 7, 1997
333-19809
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
MARSHALL & ILSLEY CORPORATION M&I CAPITAL TRUST A
(EXACT NAME OF REGISTRANT AS (EXACT NAME OF REGISTRANT AS
SPECIFIED IN CHARTER) SPECIFIED IN DECLARATION OF TRUST)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
WISCONSIN 6021 39-0968604 DELAWARE 6199 39-6643782
(STATE OF (PRIMARY STANDARD (I.R.S. EMPLOYER (STATE OF (PRIMARY STANDARD (I.R.S. EMPLOYER
INCORPORATION) INDUSTRIAL CLASSIFICATION IDENTIFICATION NO.) ORGANIZATION) INDUSTRIAL CLASSIFICATION IDENTIFICATION NO.)
CODE NO.) CODE NO.)
</TABLE>
770 NORTH WATER STREET
MILWAUKEE, WISCONSIN 53202
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
EACH REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
M.A. HATFIELD, SECRETARY
MARSHALL & ILSLEY CORPORATION, 770 NORTH WATER STREET, MILWAUKEE, WISCONSIN
53202
(414) 765-7801
(NAME, ADDRESS INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE OF EACH REGISTRANT)
COPIES TO:
LARRY D. LIEBERMAN
GODFREY & KAHN, S.C.
780 NORTH WATER STREET
MILWAUKEE, WISCONSIN 53202
(414) 273-3500
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, please check the following box. [_].
---------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PROSPECTUS
M&I CAPITAL TRUST A
LOGO
OFFER TO EXCHANGE ITS 7.65% CAPITAL SECURITIES
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 FOR ANY AND ALL OF
ITS OUTSTANDING 7.65% CAPITAL SECURITIES.
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY MARSHALL &
ILSLEY CORPORATION
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME ON APRIL 10, 1997, UNLESS EXTENDED.
M&I Capital Trust A, a trust formed under the laws of the State of Delaware
(the "Trust"), hereby offers, upon the terms and subject to the conditions set
forth in this Prospectus (as the same may be amended or supplemented from time
to time, the "Prospectus") and in the accompanying Letter of Transmittal
(which together constitute the "Exchange Offer"), to exchange up to
$200,000,000 aggregate Liquidation Amount of its 7.65% Capital Securities (the
"New Capital Securities") which have been registered under the Securities Act
of 1933, as amended (the "Securities Act"), pursuant to
(Continued on next page.)
---------------
SEE "RISK FACTORS" COMMENCING ON PAGE 16 FOR CERTAIN INFORMATION THAT SHOULD
BE CONSIDERED BY HOLDERS WHO TENDER OLD CAPITAL SECURITIES IN THE EXCHANGE
OFFER.
---------------
THESE SECURITIES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND
ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION
OR ANY OTHER GOVERNMENTAL AGENCY.
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------
The New Capital Securities (as herein defined) and the Old Capital
Securities (as herein defined) (together, the "Capital Securities"), represent
beneficial interests in the Trust. M&I is the owner of all of the beneficial
interests represented by common securities of the Trust (as herein defined)
(the "Common Securities" and, collectively with the Capital Securities, the
"Trust Securities"). The Chase Manhattan Bank is the Institutional Trustee of
the Trust. The Trust exists for the sole purpose of issuing the Trust
Securities and investing the proceeds thereof in the Old Subordinated Debt
Securities and New Subordinated Debt Securities (together, the "Subordinated
Debt Securities"). The Subordinated Debt Securities will mature on December 1,
2026.
The date of this Prospectus is March 7, 1997.
<PAGE>
(continued from cover page)
a Registration Statement (as defined herein) of which this Prospectus
constitutes a part, for a like Liquidation Amount of its outstanding 7.65%
Capital Securities (the "Old Capital Securities"), of which $200,000,000
aggregate Liquidation Amount is outstanding. Pursuant to the Exchange Offer,
Marshall & Ilsley Corporation, a Wisconsin corporation ("M&I" or the
"Company"), is also exchanging its guarantee of the payment of Distributions
(as defined below) and payments on liquidation or redemption of the Old
Capital Securities (the "Old Guarantee") for a like guarantee of the New
Capital Securities (the "New Guarantee") and all of its 7.65% Junior
Subordinated Deferrable Interest Debentures due 2026 (the "Old Subordinated
Debt Securities"), of which $206,186,000 aggregate principal amount is
outstanding, for a like aggregate principal amount of its 7.65% Junior
Subordinated Deferrable Interest Debentures due 2026 (the "New Subordinated
Debt Securities"), which New Guarantee and New Subordinated Debt Securities
also have been registered under the Securities Act. The Old Capital
Securities, the Old Guarantee and the Old Subordinated Debt Securities are
collectively referred to herein as the "Old Securities" and the New Capital
Securities, the New Guarantee and the New Subordinated Debt Securities are
collectively referred to herein as the "New Securities."
The terms of the New Securities are identical in all material respects to
the respective terms of the Old Securities, except that (i) the New Securities
will have been registered under the Securities Act and therefore will not be
subject to certain restrictions on transfer applicable to the Old Securities
and (ii) holders of New Capital Securities will not be entitled to certain
rights of holders of Old Capital Securities under the Registration Rights
Agreement (as defined below) which will terminate upon consummation of the
offer made hereby. The New Capital Securities are being offered for exchange
in order to satisfy certain obligations of M&I and the Trust under the
Registration Rights Agreement dated as of December 2, 1996 (the "Registration
Rights Agreement") among M&I, the Trust and Salomon Brothers Inc, Goldman,
Sachs & Co. and Robert W. Baird & Co. Incorporated (the "Initial Purchasers").
In the event that the Exchange Offer is consummated, any Old Capital
Securities which remain outstanding after consummation of the Exchange Offer
and the New Capital Securities issued in the Exchange Offer will vote together
as a single class for purposes of determining whether holders of the requisite
percentage in outstanding Liquidation Amount thereof have taken certain
actions or exercised certain rights under the Declaration (as defined below).
The New Subordinated Debt Securities and the New Guarantee when issued will
be an unsecured obligation of the Company and will be subordinate and junior
in right of payment to other indebtedness of the Company, as described herein.
Upon an event of default under the Declaration (as defined herein) in respect
of the Trust, the holders of Capital Securities issued by the Trust will have
a preference over the holders of the Common Securities of the Trust with
respect to payments in respect of distributions and payments upon redemption,
liquidation and otherwise.
Holders of the Capital Securities are entitled to receive cumulative cash
distributions at an annual rate of 7.65% per annum of the liquidation amount
of $1,000 per Capital Security, accruing from December 9, 1996 and (subject to
the extensions of distribution payment periods described below) payable
semiannually in arrears on June 1 and December 1 of each year, commencing June
1, 1997 ("Distributions"). The payment of distributions on the Capital
Securities out of moneys held by the Trust and payments on liquidation of the
Trust or the redemption of Capital Securities, as set forth below, are
guaranteed by the Company (the "Guarantee") to the extent described herein.
The Guarantee covers payments of distributions and other payments on the
Capital Securities only if and to the extent that the Trust has funds
available therefor, which funds will not be available except to the extent the
Company has made payments of interest or principal (or premium, if any) or
other payments on the Subordinated Debt Securities held by the Trust.
The Guarantee, when taken together with the Company's obligations under the
Subordinated Debt Securities, the Declaration and the Indenture (as defined
below), including its obligations to pay costs,
2
<PAGE>
expenses, debts and other obligations of the Trust (other than with respect to
the Trust Securities), provide a full and unconditional guarantee on a
subordinated basis by the Company of amounts due on the Capital Securities.
See "Risk Factors--Guarantee Covers Distributions and Other Payments Only to
the Extent the Trust Has Available Funds; Related Remedies" herein. The
obligations of the Company under the Guarantee and Subordinated Debt
Securities are subordinate and junior in right of payment to all present and
future Senior Indebtedness (as defined herein) of the Company and are also
effectively subordinate to claims of creditors of the Company's subsidiaries.
As of December 31, 1996, the Company had approximately $257 million principal
amount of Senior Indebtedness (excluding indebtedness of the Company's
subsidiaries) and the Company's subsidiaries had in the aggregate
approximately $1.7 billion of indebtedness. There are no terms in the
Subordinated Debt Securities, the Capital Securities or the Guarantee that
limit the ability of the Company or its subsidiaries to incur additional
indebtedness, including indebtedness that ranks senior to the Subordinated
Debt Securities and the Guarantee.
The distribution rate and the distribution payment dates and other payment
dates for the Capital Securities will correspond to the interest rate and
interest rate payment dates and other payment dates on the Subordinated Debt
Securities held by the Trust, which are the sole assets of the Trust. As a
result, if no principal (or premium, if any) or interest is paid on the
Subordinated Debt Securities, the Trust will not have sufficient funds to make
distributions on the Capital Securities, and the Guarantee will not apply to
distributions for which the Trust has insufficient funds available.
The Company has the right, subject to the conditions set forth herein, to
defer payments of interest on the Subordinated Debt Securities by extending
the interest payment period on the Subordinated Debt Securities at any time
and from time to time for up to 10 consecutive semiannual periods (each such
extended interest payment period, an "Extension Period"), provided no
Extension Period may extend beyond the maturity of the Subordinated Debt
Securities. If interest payments are so deferred, distributions on the Capital
Securities issued by the Trust will also be deferred. During any such
Extension Period, distributions will continue to accrue at the distribution
rate equal to 7.65% per annum for Capital Securities, compounded semiannually
(to the extent permitted by applicable law), and holders of the Capital
Securities will be subject to United States federal income tax on the deferred
amounts in advance of receipt of cash distributions with respect to such
deferred interest payments. There could be multiple Extension Periods of
varying lengths, each up to 10 consecutive semiannual periods, throughout the
term of the Subordinated Debt Securities. See "Description of the Subordinated
Debt Securities--Option to Extend Interest Payment Period," "Risk Factors--
Option to Extend Interest Payment Period" and "United States Federal Income
Taxation--Original Issue Discount."
The Subordinated Debt Securities are redeemable by the Company at the Call
Price (as defined herein), plus accrued and unpaid interest to the date of
redemption, in whole or in part, at any time and from time to time, on or
after December 1, 2006 (the "Optional Redemptions"). In certain limited
circumstances, upon the occurrence of a Tax Event (as defined herein), the
Subordinated Debt Securities are also redeemable in whole or in part by the
Company at their full principal amounts, together with accrued and unpaid
interest thereon to the date of the redemption. Either redemption prior to
maturity is subject to the Company having received prior approval from the
Board of Governors of the Federal Reserve System (the "Federal Reserve") if
then required under applicable capital guidelines or policies of the Federal
Reserve. See "Description of the Capital Securities--Tax Event Redemption" and
"Description of the Subordinated Debt Securities." Upon redemption or maturity
of the Subordinated Debt Securities, the Trust must redeem on a pro rata basis
its Trust Securities, having an aggregate liquidation amount equal to the
aggregate principal amount of the Subordinated Debt Securities so redeemed or
matured, at a redemption price (the "Redemption Price") equal to (i) $1,000
per Trust Security redeemed upon maturity of the Subordinated Debt Securities
or upon the occurrence and continuation of a Tax Event under certain limited
circumstances as described herein
3
<PAGE>
or (ii) in the case of Optional Redemptions of Subordinated Debt Securities an
amount per Trust Security equal to the product of $1,000 and the applicable
percentage used to determine the Call Price for the Subordinated Debt
Securities being redeemed, plus in all cases accrued and unpaid distributions
on such Trust Securities to the date fixed for redemption. See "Description of
the Capital Securities--Redemption."
The Company, as the holder of all of the outstanding Common Securities of
the Trust, has the right at any time, subject to the receipt of prior approval
by the Federal Reserve, if then required under applicable capital guidelines
or policies of the Federal Reserve, to dissolve the Trust (including without
limitation upon the occurrence of a Tax Event). In any such dissolution, after
satisfaction of liabilities to creditors of the Trust, the Subordinated Debt
Securities must be distributed to the holders of the Trust Securities on a pro
rata basis in accordance with the aggregate stated liquidation amount thereof
in liquidation of the Trust.
In the event of the involuntary or voluntary dissolution of the Trust, other
than in connection with a redemption of Subordinated Debt Securities, after
satisfaction of liabilities to creditors of the Trust (to the extent not
satisfied by the Company), the holders of the Capital Securities will be
entitled to receive a Liquidation Amount (as defined herein) plus accumulated
and unpaid distributions thereon to the date of payment, unless, in connection
with such dissolution, the Subordinated Debt Securities held by the Trust are
distributed to the holders of the Trust Securities as would be required in
certain circumstances. See "Description of the Capital Securities--Liquidation
Distribution upon Dissolution."
The Capital Securities will be issued and may be transferred only in blocks
having a stated liquidation amount of not less than $100,000 (100 Capital
Securities). See "Description of Capital Securities--Restrictions on
Transfer." The Company and the Trust do not intend to apply for listing of the
Capital Securities issued in the Exchange Offer as debt securities on a
securities exchange or for quotation through the National Association of
Securities Dealers Automated Quotation System. However, if the Subordinated
Debt Securities are distributed to the holders of the Capital Securities, and
the Capital Securities are then listed on such exchange or for such quotation,
the Company will use its best efforts to have the Subordinated Debt Securities
listed on such exchange or for such quotation as the Capital Securities are
then listed.
Based on interpretations by the staff of the Securities and Exchange
Commission (the "Commission"), as set forth in no-action letters issued to
third parties, the Company and the Trust believe that the New Capital
Securities issued pursuant to the Exchange Offer may be offered for resale,
resold or otherwise transferred by holders thereof (other than any holder that
is an "affiliate" of the Company or the Trust as defined under Rule 405 of the
Securities Act) without compliance with the registration and prospectus
delivery provisions of the Securities Act, provided that such New Capital
Securities are acquired in the ordinary course of such holders' business and
such holders are not engaged in, and do not intend to engage in, a
distribution of such New Capital Securities and have no arrangement or
understanding with any person to participate in the distribution of such New
Capital Securities. However, the staff of the Commission has not considered
the Exchange Offer in the context of a no-action letter, and there can be no
assurance that the staff of the Commission would make a similar determination
with respect to the Exchange Offer as in such other circumstances. By
tendering the Old Capital Securities in exchange for New Capital Securities,
each holder, other than a broker-dealer, will represent to the Company and the
Trust that: (i) it is not an affiliate of either the Company or the Trust (as
defined under Rule 405 of the Securities Act); (ii) any New Capital Securities
to be received by it were acquired in the ordinary course of its business; and
(iii) at the time of commencement of the Exchange Offer, it has no arrangement
with any person to participate in the distribution (within the meaning of the
Securities Act) of the New Capital Securities.
Each broker-dealer that receives New Capital Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Capital Securities. The
Letter of Transmittal states that by so acknowledging and by
4
<PAGE>
delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act. This Prospectus,
as it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of Exchange Securities received in
exchange for Old Capital Securities where such Old Capital Securities were
acquired by such broker-dealer as a result of market-making activities or
other trading activities. The Company and the Trust have agreed that, starting
on the date of the original issuance of the Old Capital Securities and ending
on the close of business one year after such date, they will make this
Prospectus available to any broker-dealer for use in connection with any such
resale. See "Plan of Distribution."
THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION. HOLDERS OF OLD CAPITAL SECURITIES ARE URGED TO READ THIS
PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING
WHETHER TO TENDER THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER.
Old Capital Securities may be tendered for exchange on or prior to 5:00
p.m., New York City time, on April 10, 1997 (such time on such date being
hereinafter called the "Expiration Date"), unless the Exchange Offer is
extended by M&I and the Trust (in which case the term "Expiration Date" shall
mean the latest date and time to which the Exchange Offer is extended).
Tenders of Old Capital Securities may be withdrawn at any time on or prior to
the Expiration Date. The Exchange Offer is not
conditioned upon any minimum Liquidation Amount of Old Capital Securities
being tendered for exchange. However, the Exchange Offer is subject to certain
events and conditions which may be waived by M&I or the Trust and to the terms
and provisions of the Registration Rights Agreement. Old Capital Securities
may be tendered in whole or in part having a Liquidation Amount of not less
than $100,000 (100 Capital Securities) and any integral multiple of $1,000
Liquidation Amount (1 Capital Security) in excess thereof. M&I has agreed to
pay all expenses of the Exchange Offer. See "The Exchange Offer -- Fees and
Expenses." Each New Capital Security will pay cumulative Distributions from
the most recent Distribution Date (as defined below) on the Old Capital
Securities surrendered in exchange for such New Capital Securities or, if no
Distributions have been paid on such Old Capital Securities, from December 9,
1996. Holders of the Old Capital Securities whose Old Capital Securities are
accepted for exchange will not receive accumulated Distributions on such Old
Capital Securities for any period from and after the last Distribution Date on
such Old Capital Securities prior to the original issue date of the New
Capital Securities or, if no such Distributions have been paid, will not
receive any accumulated Distributions on such Old Capital Securities, and will
be deemed to have waived the rights to receive any Distributions on such Old
Capital Securities accumulated from and after such Distribution Date or, if no
such Distributions have been paid or duly provided for, from and after
December 9, 1996. This Prospectus, together with the Letter of Transmittal, is
being sent to all registered holders of Old Capital Securities as of March 11,
1997.
Neither M&I nor the Trust will receive any cash proceeds from the issuance
of the New Capital Securities offered hereby. No dealer-manager is being used
in connection with this Exchange Offer. See "Use of Proceeds" and "Plan of
Distribution."
5
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities of the Commission at
Room 1024, 450 Fifth Street, N.W., Washington D.C. 20549 and at the regional
offices of the Commission located at 7 World Trade Center, 13th Floor, Suite
1300, New York, New York 10048 and Suite 1400, Citicorp Center, 14th Floor,
500 West Madison Street, Chicago, Illinois 60661. Copies of such material can
also be obtained at prescribed rates by writing to the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.
Such information may also be accessed electronically by means of the
Commission's home page on the Internet (http://www.sec.gov). In addition, the
Company's common stock is included for quotation on the NASDAQ/NMS, and such
reports, proxy statements and other information concerning the Company is
available for inspection and copying at the offices of the National
Association of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C.
20006.
No separate financial statements of the Trust have been included herein. The
Company and the Trust do not consider that such financial statements would be
material to holders of the Capital Securities because the Trust is a newly
formed special purpose entity, has virtually no operating history or
independent operations and is not engaged in and does not propose to engage in
any activity other than holding as trust assets the Subordinated Debt
Securities and issuing the Trust Securities. See "M&I Capital Trust A",
"Description of Capital Securities", "Description of Subordinated Debt
Securities" and "Description of Guarantee". In addition, the Company does not
expect that the Trust will file reports under the Exchange Act with the
Commission.
This Prospectus constitutes a part of a registration statement on Form S-4
(the "Registration Statement") filed by the Company and the Trust with the
Commission under the Securities Act. This Prospectus does not contain all the
information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the Commission,
and reference is hereby made to the Registration Statement and to the exhibits
relating thereto for further information with respect to the Company and the
Capital Securities. Any statements contained herein concerning the provisions
of any document are not necessarily complete, and, in each instance, reference
is made to the copy of such document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. Each such statement is
qualified in its entirety by such reference.
6
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended December 31,
1996 is incorporated into this Prospectus by reference.
Each document or report filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the
termination of any offering of securities made by this Prospectus shall be
deemed to be incorporated by reference into this Prospectus and to be a part
of this Prospectus from the date of filing of such document. Any statement
contained herein, or in a document all or a portion of which is incorporated
or deemed to be incorporated by reference herein, shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
superseded such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
As used herein, the terms "Prospectus" and "herein" mean this Prospectus,
including such documents incorporated or deemed to be incorporated herein by
reference, as the same may be amended, supplemented or otherwise modified from
time to time. Statements contained in this Prospectus as to the contents of
any contract or other document referred to herein do not purport to be
complete, and where reference is made to the particular provisions of such
contract or other document, such provisions are qualified in all respects by
reference to all of the provisions of such contract or other document.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
OR DELIVERED HEREIN. THE COMPANY WILL PROVIDE WITHOUT CHARGE TO ANY PERSON TO
WHOM THIS PROSPECTUS IS DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF SUCH
PERSON, A COPY OF ANY OR ALL OF THE FOREGOING DOCUMENTS INCORPORATED BY
REFERENCE HEREIN (OTHER THAN EXHIBITS NOT SPECIFICALLY INCORPORATED BY
REFERENCE INTO THE TEXTS OF SUCH DOCUMENTS). REQUESTS FOR SUCH DOCUMENTS
SHOULD BE ADDRESSED TO MARSHALL & ILSLEY CORPORATION, 770 NORTH WATER STREET,
MILWAUKEE, WISCONSIN 53202, TELEPHONE: (414) 765-7801, ATTENTION: SECRETARY.
IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE
MADE BY APRIL 2, 1997.
7
<PAGE>
SUMMARY
The following summary is qualified in its entirety by the more detailed
information and the financial statements, including the notes thereto,
appearing elsewhere or incorporated by reference into this Prospectus.
Prospective investors should consider carefully the factors set forth herein
under "Risk Factors." As used in this Prospectus, "M&I" includes its respective
predecessors and subsidiaries, except as the context otherwise may require.
M&I CAPITAL TRUST A
The Trust is a statutory business trust formed under Delaware law pursuant to
(i) a Declaration of Trust executed by the Company, as Sponsor, and the M&I
Trustees (as defined herein), and (ii) the filing of a certificate of trust
with the Delaware Secretary of State on December 2, 1996. The Trust exists for
the exclusive purposes of (i) issuing the Trust Securities, (ii) investing the
gross proceeds from the sale of the Trust Securities to acquire the
Subordinated Debt Securities issued by the Company, and (iii) engaging in only
those other activities necessary or incidental thereto. Accordingly, the
Subordinated Debt Securities are the sole assets of the Trust, and payments
under the Subordinated Debt Securities will be the sole revenues of the Trust.
All of the Common Securities are owned by M&I. The principal place of business
is c/o Marshall & Ilsley Corporation, 770 North Water Street, Milwaukee,
Wisconsin 53202, and its telephone number is (414) 765-7801.
MARSHALL & ILSLEY CORPORATION
Marshall & Ilsley Corporation ("M&I" or "the Company"), is a registered bank
holding company headquartered in Milwaukee, Wisconsin. M&I's principal assets
are the stock of its bank and nonbank subsidiaries and the assets of its Data
Services Division ("M&I Data Services"). M&I's bank and savings association
subsidiaries provide a full range of banking services to individuals,
businesses and governments throughout Wisconsin and the Phoenix, Arizona
metropolitan area. M&I's nonbank subsidiaries operate a variety of bank-related
businesses, including investment management services, insurance services, trust
services, equipment lease financing, commercial and residential mortgage
banking, venture capital, brokerage services and financial advisory services.
M&I Data Services is a major supplier of financial and data processing services
and software to banking, financial and related organizations. As of December
31, 1996, M&I had consolidated total assets of approximately $14.8 billion and
consolidated total deposits of approximately $11.0 billion.
Because M&I is a holding company, the Subordinated Debt Securities and the
Guarantee are effectively subordinated to all existing and future liabilities
of M&I's subsidiaries, except to the extent that M&I is a creditor of the
subsidiaries recognized as such.
The principal executive offices of M&I are located at 770 North Water Street,
Milwaukee, Wisconsin 53202. M&I's telephone number is (414) 765-7801.
THE EXCHANGE OFFER
The Exchange Offer........ Up to $200,000,000 aggregate Liquidation Amount of
New Capital Securities are being offered in ex-
change for a like aggregate Liquidation Amount of
Old Capital Securities. Old Capital Securities may
be tendered for exchange in whole or in part in a
Liquidation Amount of $100,000 (100 Capital Securi-
ties) or any integral multiple of $1,000 in excess
thereof. M&I and the Trust are
8
<PAGE>
making the Exchange Offer in order to satisfy its
obligations under the Registration Rights Agreement
relating to the Old Capital Securities. For a de-
scription of the procedures for tendering Old Capi-
tal Securities, see "The Exchange Offer--Procedures
for Tendering Old Capital Securities."
Expiration Date...........
5:00 p.m., New York City time, on April 10, 1997
(such time on such date being hereinafter called
the "Expiration Date") unless the Exchange Offer is
extended by M&I and the Trust (in which case the
term "Expiration Date" shall mean the latest date
and time to which the Exchange Offer is extended).
See "The Exchange Offer--Expiration Date; Exten-
sions; Amendments."
Conditions to the The Exchange Offer is subject to certain condi-
Exchange.................. tions, which may be waived by M&I and the Trust in
their sole discretion. The Exchange Offer is not
conditioned upon any minimum Liquidation Amount of
Old Capital Securities being tendered. See "The
Exchange Offer--Conditions to the Exchange Offer."
M&I and the Trust reserve the right in their sole
and absolute discretion, subject to applicable law,
at any time and from time to time, (i) to delay the
acceptance of the Old Capital Securities, (ii) to
terminate the Exchange Offer if certain specified
conditions have not been satisfied, (iii) to extend
the Expiration Date of the Exchange Offer and re-
tain all Old Capital Securities tendered pursuant
to the Exchange Offer, subject, however, to the
right of holders of Old Capital Securities to with-
draw their tendered Old Capital Securities, or (iv)
to waive any condition or otherwise amend the terms
of the Exchange Offer in any respect. See "The Ex-
change Offer--Expiration Date; Extensions; Amend-
ments."
Listing...................
The Company and the Trust do not intend to apply
for listing of the Capital Securities issued in the
Exchange Offer as debt securities on a securities
exchange or for quotation through the National As-
sociation of Securities Dealers Automated Quotation
System. However, if the Subordinated Debt Securi-
ties are distributed to the holders of the Capital
Securities, and the Capital Securities are then
listed on such exchange or for such quotation, the
Company will use its best efforts to have the Sub-
ordinated Debt Securities listed on such exchange
or for such quotation as the Capital Securities are
then listed.
Withdrawal Rights......... Tenders of Old Capital Securities may be withdrawn
at any time on or prior to the Expiration Date by
delivering a written notice of such withdrawal to
the Exchange Agent in conformity with certain pro-
cedures as set forth below under "The Exchange Of-
fer--Withdrawal Rights."
Procedures for Tendering
Old Capital Securities....
Tendering holders of Old Capital Securities must
complete and sign a Letter of Transmittal in accor-
dance with the instructions contained therein and
forward the same by mail, facsimile transmission or
hand delivery, together with any other required
docu-
9
<PAGE>
ments, to the Exchange Agent, either with the Old
Capital Securities to be tendered or in compliance
with the specified procedures for guaranteed deliv-
ery of Old Capital Securities. Certain brokers,
dealers, commercial banks, trust companies and
other nominees may also effect tenders by book-en-
try transfer, including an Agent's Message in lieu
of a Letter of Transmittal. Holders of Old Capital
Securities registered in the name of a broker,
dealer, commercial bank, trust company or other
nominee are urged to contact such person promptly
if they wish to tender Old Capital Securities pur-
suant to the Exchange Offer. See "The Exchange Of-
fer--Procedures for Tendering Old Capital Securi-
ties."
Letters of Transmittal and certificates represent-
ing Old Capital Securities should not be sent to
M&I or the Trust. Such documents should only be
sent to the Exchange Agent. Questions regarding how
to tender and requests for information should be
directed to the Exchange Agent. See "The Exchange
Offer--Exchange Agent."
Resales of New Capital
Securities................
Based on interpretations by the staff of the Com-
mission, as set forth in no-action letters issued
to third parties, the Company and the Trust believe
that holders of Old Capital Securities (other than
any holder that is an "affiliate" of the Company or
the Trust as defined under Rule 405 of the Securi-
ties Act) who exchange their Old Capital Securities
for New Capital Securities pursuant to the Exchange
Offer may offer such New Capital Securities for re-
sale, resell such New Capital Securities and other-
wise transfer such New Capital Securities without
compliance with the registration and prospectus de-
livery provisions of the Securities Act, provided
that such New Capital Securities are acquired in
the ordinary course of such holders' business and
such holders are not engaged in, and do not intend
to engage in, a distribution of such New Capital
Securities and have no arrangement or understanding
with any person to participate in the distribution
of such New Capital Securities. However, the staff
of the Commission has not considered the Exchange
Offer in the context of a no-action letter, and
there can be no assurance that the staff of the
Commission would make a similar determination with
respect to the Exchange Offer. Each broker-dealer
that receives New Capital Securities for its own
account in exchange for Old Capital Securities,
where such Old Capital Securities were acquired by
such broker-dealer as a result of market-making ac-
tivities or other trading activities, must acknowl-
edge that it will deliver a prospectus in connec-
tion with any resale of such New Capital Securi-
ties. See "Plan of Distribution."
Exchange Agent............ The exchange agent with respect to the Exchange Of-
fer is The Chase Manhattan Bank (the "Exchange
Agent"). The address, and telephone and facsimile
numbers of the Exchange Agent are set forth in "The
Exchange Offer--Exchange Agent" and in the Letter
of Transmittal.
10
<PAGE>
Use of Proceeds........... Neither M&I nor the Trust will receive any cash
proceeds from the issuance of the New Capital Secu-
rities offered hereby. See "Use of Proceeds."
Certain United States
Federal Income Tax
Considerations; ERISA
Considerations............
Holders of Old Capital Securities should review the
information set forth under "United States Federal
Income Taxation" and "ERISA Considerations" prior
to tendering Old Capital Securities in the Exchange
Offer.
THE CAPITAL SECURITIES
Securities Offered........ $200,000,000 aggregate liquidation amount of New
Capital Securities (liquidation amount $1,000 per
Capital Security). The terms of the New Capital Se-
curities are identical in all material respects to
the terms of the Old Capital Securities, except
that the New Capital Securities have been regis-
tered under the Securities Act and therefor are not
subject to certain restrictions on transfer appli-
cable to the Old Capital Securities and will not
provide for increase in the Distribution rate
thereon.
General................... The Capital Securities represent undivided benefi-
cial interests in the Trust's assets, which consist
solely of the Subordinated Debt Securities. The
Subordinated Debt Securities, in which the proceeds
of the Trust Securities are invested, mature on
December 1, 2026, unless the Subordinated Debt Se-
curities are redeemed by the Company prior to such
maturity as described under "Description of the
Capital Securities--Redemption" and "Description of
the Capital Securities--Tax Event Redemption."
Distributions............. The distributions payable on the Capital Securities
will be fixed at a rate per annum of 7.65% of the
stated liquidation amount of $1,000 per Capital Se-
curity and will be cumulative, will accrue from De-
cember 9, 1996, the date of issuance of the Old
Capital Securities, and (subject to the extension
of distribution payment periods described below)
will be payable semiannually, in arrears, on June 1
and December 1 of each year, commencing June 1,
1997. See "Description of the Capital Securities--
Distributions."
Option to Extend Interest
Payment Period............
The Company has the right, at any time, subject to
certain conditions, to defer payments of interest
on the Subordinated Debt Securities for Extension
Periods, each not exceeding 10 consecutive semian-
nual periods; provided, that no Extension Period
may extend beyond the maturity date of the Subordi-
nated Debt Securities. As a consequence of the
Company's extension of the interest payment period,
distributions on the Capital Securities would be
deferred (though such distributions would continue
to accrue interest thereon compounded semiannually
(to the extent
11
<PAGE>
permitted by law)), since interest would continue
to accrue with interest thereon compounded
semiannually on the Subordinated Debt Securities
during any such Extension Period. In the event the
Company exercises its right to extend an interest
payment period, then during any Extension Period,
subject to certain exceptions, (i) the Company
shall not declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect
to, any of its capital stock or rights to acquire
such capital stock or make any guarantee payments
with respect to the foregoing and (ii) the Company
shall not make any payment of interest on or prin-
cipal of (or premium, if any, on), or repay, repur-
chase or redeem, any debt securities issued by the
Company which rank pari passu with or junior to the
Subordinated Debt Securities. Upon the termination
of any Extension Period and the payment of all
amounts then due, the Company may commence a new
Extension Period, subject to certain requirements.
See "Description of the Subordinated Debt Securi-
ties--Option to Extend Interest Payment Period."
Should an Extension Period occur with respect to
the Capital Securities, holders of Capital Securi-
ties will continue to recognize interest income for
United States federal income tax purposes. As a re-
sult, such holders will be required to include such
interest in gross income for United States federal
income tax purposes in advance of the receipt of
cash, and such holders will not receive the cash
from the Trust related to such income if such hold-
ers dispose of Capital Securities prior to the rec-
ord date for payment of distributions. See "United
States Federal Income Taxation--US Holders--Origi-
nal Issue Discount."
Liquidation .............. The Company, as the holder of all of the Common Se-
curities, has the right at any time to dissolve the
Trust (including but not limited to the occurrence
of a Tax Event), subject to certain conditions,
with the result that, after satisfaction of liabil-
ities to creditors of the Trust (to the extent not
satisfied by the Company), the Subordinated Debt
Securities would be distributed to the holders of
the Trust Securities in liquidation of the holders'
interests in the Trust on a pro rata basis in ac-
cordance with its aggregate stated liquidation
amount thereof, in liquidation of the Trust. In ad-
dition, the Trust is required to be liquidated un-
der certain other circumstances. See "Description
of the Capital Securities--Liquidation Distribution
upon Dissolution."
Liquidation Amount........ In the event of the liquidation of the Trust, after
satisfaction of liabilities to creditors of the
Trust (to the extent not satisfied by the Company),
holders of Capital Securities issued by the Trust
will be entitled to receive $1,000 per Capital Se-
curity plus an amount equal to accrued and unpaid
distributions thereon to the date of payment, un-
less the Subordinated Debt Securities are distrib-
uted to holders of Trust Securities in the Trust.
See "Description of the Capital Securities--Liqui-
dation Distribution Upon Dissolution."
12
<PAGE>
Maturity.................. Upon the repayment of the Subordinated Debt Securi-
ties at maturity, the proceeds from such repayment
will be applied by the Institutional Trustee to re-
deem a like amount of Trust Securities, upon the
terms and conditions described herein. See "De-
scription of the Capital Securities--Redemption."
Optional Redemption....... The Company has the right to redeem the Subordi-
nated Debt Securities on or after December 1, 2006,
in whole or in part at any time, subject to the
conditions described in "Description of the Subor-
dinated Debt Securities--Redemption," at the Call
Price described herein, together with accrued and
unpaid interest to the date of redemption. Upon the
redemption of the Subordinated Debt Securities, the
proceeds of such redemption will be applied by the
Institutional Trustee to redeem a like amount of
Trust Securities at the applicable Redemption
Price, upon the terms and conditions described
herein. See "Description of the Capital Securi-
ties--Redemption."
Tax Event Redemption...... If at any time a Tax Event shall occur and would
continue despite liquidation of the Trust and dis-
tribution of the Subordinated Debt Securities to
the holders of the Trust Securities, the Company
may, within 90 days of the occurrence of such Tax
Event, redeem the Subordinated Debt Securities in
whole or in part at their full principal amounts,
plus any accrued and unpaid interest to the redemp-
tion date. See "Description of the Capital Securi-
ties--Tax Event Redemption." Upon the redemption of
the Subordinated Debt Securities, the proceeds of
such redemption will be applied by the Institu-
tional Trustee to redeem a like amount of Trust Se-
curities at the applicable Redemption Price, upon
the terms and conditions described herein. See "De-
scription of the Capital Securities--Redemption."
Voting Rights............. Generally, the holders of the Capital Securities
will not have any voting rights. See "Description
of the Capital Securities--Voting Rights."
The Guarantee............. The payment of distributions out of moneys held by
the Trust, payments on liquidation of the Trust and
payment upon the redemption of Capital Securities
of the Trust are guaranteed by the Company as de-
scribed herein under "Description of the Guaran-
tee." The guarantee covers payments of distribu-
tions and other payments on the Capital Securities
only if and to the extent that the Trust has funds
available therefor, which funds will not be avail-
able except to the extent the Company has made pay-
ments of interest (or premium, if any) or principal
or other payments on the Subordinated Debt Securi-
ties. The Guarantee, when taken together with the
Company's obligations under the Subordinated Debt
Securities and the Indenture, including its obliga-
tions to pay costs, expenses, debts and other lia-
bilities of the Trust (other than with respect to
the Trust Securities), provide a full and uncondi-
tional guarantee on a subordinated basis by the
Company of amounts due on the Capital Securities.
13
<PAGE>
Ranking................... The Common Securities of the Trust rank pari passu,
and payments thereon will be made pro rata, with
the Capital Securities issued by the Trust except
that upon the occurrence and during the continuance
of a Declaration Event of Default (as defined here-
in) under the Trust, the rights of the holders of
the Common Securities of the Trust to receive pay-
ment of periodic distributions and payments upon
liquidation, redemption or otherwise will be subor-
dinated to the rights of the holders of the Capital
Securities. See "Description of the Capital Securi-
ties--General." The Subordinated Debt Securities
are unsecured and subordinate and junior in right
of payment to the extent and in the manner set
forth in the Indenture to all Senior Indebtedness
(as defined herein). See "Description of Subordi-
nated Debt Securities." The Guarantee constitutes
an unsecured obligation of the Company and will
rank subordinate and junior in right of payment to
the extent and in the manner set forth in the Guar-
antee to all Senior Indebtedness. See "Description
of Guarantee."
Rating.................... The New Capital Securities are expected to be rated
"A-" by Standard & Poor's Rating Services and "a1"
by Moody's Investors Services, Inc. A security rat-
ing is not a recommendation to buy, sell or hold
securities and may be subject to revision or with-
drawal at any time by the assigning rating organi-
zation.
Use of Proceeds........... Neither M&I nor the Trust will receive any cash
proceeds from the issuance of the New Capital Secu-
rities offered hereby. M&I's proceeds from the sale
of the Old Subordinated Debt Securities were added
to the general funds of M&I and were and may be
used for general corporate purposes, including,
without limitation, funding the repurchase of
shares of its common stock, reduction of indebted-
ness (including the refinancing of M&I's outstand-
ing commercial paper), investments in or advances
to subsidiaries and possible future acquisitions of
bank and non-bank subsidiaries. See "Use of Pro-
ceeds."
Absence of Market for the
Capital Securities........
The New Capital Securities will be a new issue of
securities for which there is currently no market.
There can be no assurance as to the development of
liquidity of any market for the Capital Securities.
Trading Price............. The New Capital Securities are expected to trade at
a price per Capital Security plus accrued and un-
paid distributions, if any, to the date of settle-
ment.
For additional information with respect to the Capital Securities, see
"Description of the Capital Securities," "Description of the Subordinated Debt
Securities," "Description of the Guarantee," "United States Federal Income
Taxation" and "Notice to Investors."
RISK FACTORS
Prospective investors should carefully consider the matters set forth under
"Risk Factors."
14
<PAGE>
MARSHALL & ILSLEY CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
The following table sets forth selected consolidated financial data and other
operating information for each of the five years in the period ended December
31, 1996. Data relating to periods prior to 1994 has been restated to give
effect to the merger with Valley Bancorporation ("Valley") on May 31, 1994,
which was accounted for as a pooling of interests. Consolidated earnings and
per share data are taken from audited consolidated financial statements of M&I.
The data and other operating information should be read in conjunction with and
are qualified in their entirety by the financial statements and more detailed
information incorporated herein by reference. See "Incorporation of Certain
Documents by Reference."
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------------------------------
1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- -----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
SUMMARIZED INCOME
STATEMENT DATA:
Net Interest Income..... $ 505,719 $ 491,477 $ 491,227 $ 480,279 $ 472,551
Provisions for Loan
Losses................. 15,194 16,158 24,907 18,034 23,546
Other Income............ 503,320 424,182 361,481 371,926 328,411
Other Expense........... 680,704 599,622 584,770 569,587 545,624
Merger/Restructuring
Expense................ -- -- 75,228 -- --
Provision for Income
Taxes.................. 109,711 106,580 73,405 93,190 75,391
----------- ----------- ----------- ----------- -----------
Income Before
Extraordinary Items and
Cumulative Effect of
Changes in Accounting
Principles............. 203,430 193,299 94,398 171,394 156,401
Extraordinary Items, Net
of Income Taxes........ -- -- 11,542 -- --
Cumulative Effect of
Changes in Accounting
Principles, Net of
Income Taxes........... -- -- -- -- (9,134)
----------- ----------- ----------- ----------- -----------
Net Income.............. $ 203,430 $ 193,299 $ 105,940 $ 171,394 $ 147,267
=========== =========== =========== =========== ===========
PER SHARE DATA:
Primary................. $ 2.07 $ 1.96 $ 1.07 $ 1.67 $ 1.46
Fully Diluted........... 2.02 1.90 1.04 1.60 1.40
Book Value.............. 13.37 12.92 11.01 11.35 10.76
Cash Dividends Per
Common Share........... 0.720 0.645 0.59 0.54 0.47
AVERAGE BALANCE SHEET
DATA:
Investment Securities... $ 3,391,495 $ 2,400,873 $ 2,467,882 $ 2,636,940 $ 2,473,706
Loans, Net of Unearned
Income................. 8,978,273 9,027,965 8,710,706 8,180,292 7,694,097
Total Earning Assets.... 12,565,578 11,661,963 11,379,769 11,002,235 10,539,984
Total Assets............ 13,655,557 12,725,511 12,432,461 12,039,468 11,525,409
Deposits................ 10,213,896 9,609,415 9,670,097 9,774,732 9,452,595
Long-term Debt.......... 656,786 801,176 447,254 272,041 284,333
Shareholders' Equity.... 1,280,841 1,177,825 1,097,963 1,121,314 1,010,667
SELECTED FINANCIAL
RATIOS:
Return on Average Assets
(Annualized)........... 1.49% 1.52% 0.85% 1.42% 1.28%
Return on Average Equity
(Annualized)........... 15.88 16.41 9.65 15.29 14.57
Taxable-Equivalent Net
Interest Income to
Average Earning Assets
(Annualized)........... 4.14 4.30 4.40 4.48 4.65
Common Dividend Payout.. 35.64 33.95 56.73 33.75 33.57
Average Shareholders'
Equity to Average Total
Assets................. 9.38 9.26 8.83 9.31 8.77
Tier 1 Risk-Based
Capital................ 12.71 11.71 11.15 11.47 --
Total Risk-Based
Capital................ 14.90 14.04 13.62 14.06 --
Tier 1 Leverage......... 9.61 9.07 8.39 8.74 --
Net Charge-offs to
Average Loans and
Leases Outstanding
(Annualized)........... 0.23 0.10 0.05 0.11 0.12
Allowance for Loan
Losses to Total Loans
and Leases Outstanding. 1.68 1.82 1.75 1.55 1.55
Allowance for Loan
Losses to Nonperforming
Loans and Leases(1).... 225 261 265 237 187
Nonperforming Loans and
Leases to Loans and
Leases Outstanding, End
of Period(1)........... 0.75 0.70 0.66 0.65 0.83
Nonperforming Assets to
Loans and Leases
Outstanding Plus Loan-
Related Assets at End
of Period(1)........... 0.81 0.79 0.80 0.80 1.07
RATIO OF EARNINGS TO
FIXED CHARGES(2)
Excluding Interest on
Deposits............... 3.76x 3.76x 3.18x 6.52x 5.57x
Including Interest on
Deposits............... 1.66x 1.68x 1.50x 1.83x 1.60x
</TABLE>
- ------
(1) Nonperforming loans include non-accrual loans, restructured loans and loans
90 days or more past due and still accruing interest. Nonperforming assets
include nonperforming loans plus assets acquired through foreclosure or
repossession.
(2) The ratio of earnings to fixed charges has been computed by dividing
earnings before income taxes and fixed charges by fixed charges. Fixed
charges, excluding interest on deposits, consists of interest on
indebtedness and one-third of rental expense (which is deemed
representative of the interest factor). Fixed charges, including interest
on deposits, consist of both the foregoing items plus interest on deposits.
15
<PAGE>
RISK FACTORS
Prior to making an investment decision, prospective purchasers of New
Capital Securities should carefully review the information contained elsewhere
or incorporated by reference in this Prospectus and should particularly
consider the following matters.
RANKING OF SUBORDINATE OBLIGATIONS UNDER THE GUARANTEE AND THE SUBORDINATED
DEBT SECURITIES
The obligations of M&I under the Guarantee and the Subordinated Debt
Securities are subordinate and junior in right of payment to all present and
future Senior Indebtedness (as defined herein) of M&I. No payment of principal
of (including redemption payments, if any) or premium, if any, or interest on
the Subordinated Debt Securities may be made if (i) any Senior Indebtedness of
M&I is not paid when due and any applicable grace period with respect to such
default has ended with such default not having been cured or waived or ceasing
to exist or (ii) the maturity of any Senior Indebtedness of M&I has been
accelerated because of a default. As of December 31, 1996, M&I had
approximately $257 million principal amount of Senior Indebtedness
outstanding, and the Company's subsidiaries had in the aggregate approximately
$1.7 billion of indebtedness. There are no terms in the Capital Securities,
the Subordinated Debt Securities, or the Guarantee that limit the ability of
M&I or its subsidiaries to incur additional indebtedness, including
indebtedness that ranks senior to the Subordinated Debt Securities and the
Guarantee. See "Description of the Guarantee--Status of the Guarantee" and
"Description of the Subordinated Debt Securities."
Because M&I is a bank holding company, the Subordinated Debt Securities and
the Guarantee are effectively subordinated to all existing and future
liabilities of M&I's subsidiaries, except to the extent that M&I is a creditor
of the subsidiaries recognized as such. There are also various legal
limitations on the extent to which M&I's depository subsidiaries may extend
credit, pay dividends or otherwise supply funds to M&I or various of its
affiliates.
GUARANTEE COVERS DISTRIBUTIONS AND OTHER PAYMENTS ONLY TO THE EXTENT THE TRUST
HAS AVAILABLE FUNDS: RELATED REMEDIES
The terms of the Guarantee are those set forth in an indenture and those
made part of such Guarantee by the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), under which The Chase Manhattan Bank will act as
trustee (the "Guarantee Trustee"). The Guarantee Trustee will hold the
Guarantee for the benefit of the holders of the Capital Securities.
The Guarantee guarantees to the holders of the Capital Securities the
following payments, to the extent not paid by the Trust: (i) any accrued and
unpaid distributions required to be paid on the Capital Securities, to the
extent the Trust has funds available therefor, (ii) the Redemption Price (as
defined herein), including all accrued and unpaid distributions with respect
to Capital Securities called for redemption by the Trust, to the extent the
Trust has funds available therefor, and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Trust (other than in connection
with the distribution of Subordinated Debt Securities to the holders of
Capital Securities upon a redemption of all the Capital Securities), the
lesser of (a) the aggregate of the liquidation amount and all accrued and
unpaid distributions on the Capital Securities to the date of the payment, to
the extent the Trust has funds available therefor or (b) the amount of assets
of the Trust remaining available for distribution to holders of the Capital
Securities in liquidation of the Trust. The Guarantee is subordinated as
described under "--Ranking of Subordinate Obligations under the Guarantee and
the Subordinated Debt Securities." The holders of a majority in liquidation
amount of the Capital Securities have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Guarantee
Trustee or to direct the exercise of any trust or power conferred upon the
Guarantee
16
<PAGE>
Trustee under the Guarantee. A holder of record of the Capital Securities may
institute a legal proceeding directly against M&I to enforce the Guarantee
Trustee's rights without first instituting any legal proceeding against the
Trust, the Guarantee Trustee or any other person or entity. Notwithstanding
the foregoing, any holder of record of Capital Securities may, after such
holder's written request to the Guarantee Trustee to pursue such trustee's
remedies under the Guarantee and any failure by such trustee to do so,
institute a legal proceeding directly against M&I, without first instituting a
legal proceeding against the Trust, the Guarantee Trustee or any other person
or entity, for enforcement of payment, on or after the respective due dates
specified in the Capital Securities, to such holder of distributions on the
Capital Securities of such holder. If M&I were to default on its obligation to
pay amounts payable on the Subordinated Debt Securities, the Trust would lack
available funds for the payment of distributions or amounts payable on
redemption of the Capital Securities or otherwise, and, in such event, holders
of the Capital Securities would not be able to rely upon the Guarantee for
payment of such amounts. Instead, each holder of Capital Securities would rely
on the enforcement (i) by the Institutional Trustee (as defined herein) of its
rights as registered holder of the Subordinated Debt Securities against M&I
pursuant to the terms of the Subordinated Debt Securities or (ii) by such
holder of Capital Securities of its right against M&I to enforce payments of
principal (and premium, if any) and interest on Subordinated Debt Securities
having an aggregate principal amount equal to the aggregate liquidation amount
of Capital Securities of such holder. See "Description of the Capital
Securities," "Description of the Guarantee" and "Description of the
Subordinated Debt Securities." The Declaration provides that each holder of
Capital Securities, by acceptance thereof, agrees to the provisions of the
Guarantee, including the subordination provisions thereof, and the Indenture.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF CAPITAL SECURITIES
If a Declaration Event of Default (as defined herein) with respect to the
Trust occurs and is continuing, then the holders of Capital Securities issued
by the Trust would, except as provided below, rely on the enforcement by the
Institutional Trustee of its rights as holder of the Subordinated Debt
Securities issued to the Trust against M&I. The holders of a majority in
liquidation amount of the Capital Securities issued by the Trust will have the
right to direct the time, method, and place of conducting any proceeding for
any remedy available to the Institutional Trustee with respect to such Capital
Securities or to direct the exercise of any trust or power conferred upon the
Institutional Trustee under the Declaration, including the rights to direct
the Institutional Trustee to exercise the remedies available to it as a holder
of the Subordinated Debt Securities. If the Institutional Trustee fails to
enforce its rights under the Subordinated Debt Securities after the holders of
a majority in liquidation amount of the Capital Securities have so directed
such Institutional Trustee, a holder of record of the Capital Securities may
institute a legal proceeding directly against M&I to enforce the rights of the
Institutional Trustee under the Subordinated Debt Securities, without first
instituting any legal proceeding against such Institutional Trustee or any
other person.
Notwithstanding the foregoing, if a Declaration Event of Default with
respect to the Trust has occurred and is continuing and such event is
attributable to the failure of the Company to pay interest or principal (or
premium, if any) on the Subordinated Debt Securities issued to the Trust on
the respective dates such interest or principal (or premium, if any) is
payable (or in the case of redemption, on the redemption date), then a holder
of record of such Capital Securities may institute directly against the
Company, a proceeding for enforcement of payment, on or after the respective
due dates specified in the Subordinated Debt Securities, to such holder
directly of the principal of (or premium, if any) or interest on Subordinated
Debt Securities having an aggregate principal amount equal to the aggregate
liquidation amount of the Capital Securities of such holder (a "Direct
Action"). In connection with such Direct Action, the Company will be
subrogated to the rights of such holder of Capital Securities under the
Declaration to the extent of any payment made by the Company to such holder of
Capital Securities in such Direct Action; provided, however, that no such
subrogation right may be
17
<PAGE>
exercised so long as a Declaration Event of Default has occurred and is
continuing. The holders of Capital Securities will not be able to exercise
directly any other remedy available to the holders of the Subordinated Debt
Securities.
OPTION TO EXTEND INTEREST PAYMENT PERIOD FOR UP TO TEN SEMIANNUAL PERIODS; TAX
CONSEQUENCES
M&I has the right under the Indenture to defer payments of interest on the
Subordinated Debt Securities by extending the interest payment period at any
time, and from time to time, subject to certain conditions, for Extension
Periods, each up to 10 consecutive semiannual periods. During each such
Extension Period, semiannual distributions on the Capital Securities would be
deferred (but would continue to accrue, despite such deferral, with interest
thereon compounded semiannually to the fullest extent permitted by law) by the
Trust. In the event that M&I exercises this right to defer interest payments,
then during any Extension Period (a) M&I shall not declare or pay dividends
on, or make a distribution with respect to, or redeem, purchase or acquire, or
make a liquidation payment with respect to, any of its capital stock or rights
to acquire capital stock (other than (i) purchases or acquisitions of shares
of any such capital stock or rights to acquire such capital stock in
connection with the satisfaction by M&I of its obligations under any employee
benefit plans, (ii) as a result of a reclassification of M&I's capital stock
or rights to acquire such capital stock or the exchange or conversion of one
class or series of M&I's capital stock or rights to acquire such capital stock
for another class or series of M&I's capital stock or rights to acquire such
capital stock, (iii) the purchase of fractional interests in shares of M&I's
capital stock pursuant to the conversion or exchange provisions of such
capital stock or the security being converted or exchanged or (iv) dividends
and distributions made on M&I's capital stock or rights to acquire such
capital stock with M&I's capital stock or rights to acquire such capital
stock) or make guarantee payments with respect to the foregoing and (b) M&I
shall not make any payment of interest, principal or premium if any, on or
repay, repurchase or redeem any debt securities issued by M&I that rank pari
passu with or junior to the Subordinated Debt Securities. Prior to the
termination of any such Extension Period, M&I may further extend the interest
payment period; provided that each such Extension Period, together with all
such previous and further extensions thereof, may not exceed 10 consecutive
semiannual periods or extend beyond the maturity of the Subordinated Debt
Securities. Upon the termination of any Extension Period and the payment of
all amounts then due, M&I may commence a new Extension Period, subject to the
terms set forth herein. See "Description of the Capital Securities" and
"Description of the Subordinated Debt Securities."
During each Extension Period, if any, each holder of Capital Securities will
continue to accrue income (as original issue discount ("OID")) in respect of
the deferred interest (see "United States Federal Income Taxation") allocable
to its Capital Securities for United States federal income tax purposes, which
will be allocated but not distributed. In such event, each holder of Capital
Securities will recognize income for United States federal income tax purposes
in advance of the receipt of cash, and will not receive cash related to such
income from the Trust if such holder disposes of its Capital Securities prior
to the record date for payment of such deferred interest. See "United States
Federal Income Taxation."
M&I has no current intention of exercising its right to defer payments of
interest on the Subordinated Debt Securities. However, should M&I determine to
exercise such right in the future, the market price of the Capital Securities
is likely to be affected. A holder that disposes of its Capital Securities
during an Extension Period, therefore, might not receive the same return on
its investment as a holder that continues to hold its Capital Securities. In
addition, as a result of the existence of M&I's right to defer interest
payments, the market price of the Capital Securities (which represent
undivided beneficial interests in the Subordinated Debt Securities) may be
more volatile than other securities on which OID accrues that do not have such
rights.
18
<PAGE>
PROPOSED TAX LEGISLATION
On February 6, 1997, President Clinton proposed certain tax law changes as a
part of his 1998 budget plan that would, among other things, generally deny
corporate issuers a deduction for interest in respect of certain debt
obligations having a maximum term of more than 15 years and which are not
shown as indebtedness on the separate balance sheet of the issuer (the
"Proposed Legislation"). This provision would apply to instruments issued on
or after the date of first committee action. There can be no assurance,
however, that the effective date proposed will not be altered to a retroactive
date if the Proposed Legislation is enacted, or that other legislation enacted
after the date hereof will not otherwise adversely affect the ability of the
Company to deduct the interest payable on the Subordinated Debt Securities.
Accordingly, there can be no assurance that a Tax Event will not occur. It is
expected that if the Proposed Legislation were to be enacted, such legislation
would not apply to the Subordinated Debt Securities. See "--Redemption,"
"Description of the Subordinated Debt Securities--Proposed Tax Legislation."
EXCHANGE OF CAPITAL SECURITIES FOR SUBORDINATED DEBT SECURITIES; TAX EVENT
REDEMPTION
The Company, as the holder of all of the outstanding Common Securities of
the Trust, has the right at any time to dissolve the Trust (including but not
limited to the occurrence of a Tax Event) and, after satisfaction of
liabilities to creditors of the Trust, cause the Subordinated Debt Securities
to be distributed to the holders to the Trust Securities on a pro rata basis
in accordance with the aggregate stated liquidation amount thereof, in
liquidation of the Trust. See "Description of the Capital Securities--
Liquidation Distribution Upon Dissolution." Upon the occurrence of a Tax
Event, in certain circumstances described herein, the Company will have the
right to redeem the Subordinated Debt Securities, in whole or in part, in
which event the Trust will redeem the Trust Securities on a pro rata basis to
the same extent as such Subordinated Debt Securities are redeemed by the
Company. See "Description of the Capital Securities--Tax Event Redemption."
The exercise of such rights is subject to M&I having received prior approval
to do so from the Federal Reserve if then required under applicable guidelines
or policies of the Federal Reserve.
Under current United States federal income tax law, a distribution of
Subordinated Debt Securities upon the dissolution of the Trust would not be a
taxable event to holders of the Capital Securities. Upon the occurrence of a
Tax Event, however, a dissolution of the Trust in which holders of the Capital
Securities receive cash would be a taxable event to such holders. See "United
States Federal Income Taxation--US Holders--Receipt of Subordinated Debt
Securities or Cash upon Liquidation of Trust."
There can be no assurance as to the market prices for the Capital Securities
or the Subordinated Debt Securities that may be distributed in exchange for
Capital Securities if a dissolution or liquidation of the Trust were to occur.
Accordingly, the Capital Securities that an investor may purchase, whether in
the secondary market or otherwise, or the Subordinated Debt Securities that a
holder of Capital Securities may receive on dissolution and liquidation of the
Trust, may trade at a discount to the price paid to purchase the Capital
Securities. Because the ability of the Trust to pay amounts due on the Capital
Securities is wholly dependent upon M&I's making payments on the Subordinated
Debt Securities as and when required, and because holders of Capital
Securities may receive Subordinated Debt Securities upon liquidation of the
Trust, prospective purchasers of Capital Securities are also making an
investment decision with regard to the Subordinated Debt Securities and should
carefully review all the information regarding the Subordinated Debt
Securities contained herein and evaluate the credit risk of M&I. See
"Description of the Capital Securities" and "Description of the Subordinated
Debt Securities."
CONSEQUENCES OF HIGHLY LEVERAGED TRANSACTION
The Indenture does not contain any provisions that afford holders of the
Subordinated Debt Securities protection in the event of a highly leveraged
transaction, including a change of control, or
19
<PAGE>
other similar transactions involving M&I that may adversely affect such
holders. See "Description of the Subordinated Debt Securities."
LIMITED VOTING RIGHTS
Holders of Capital Securities will have limited voting rights and will not
be entitled to vote to appoint, remove or replace any M&I Trustee (as defined
herein), or to increase or decrease the number of M&I Trustees. Such voting
rights with respect to the M&I Trustees are vested exclusively in the holder
of the Common Securities which will be M&I. See "Description of the Capital
Securities."
TRADING PRICE
The Capital Securities are expected to trade at a price per Capital Security
plus accrued and unpaid distributions, if any to the date of settlement.
Because the Capital Securities pay distributions at a fixed rate based upon
the fixed interest rate payable on the Subordinated Debt Securities, the
trading price of the Capital Securities may decline if interest rates rise.
CONSEQUENCES OF A FAILURE TO EXCHANGE OLD CAPITAL SECURITIES
The Old Capital Securities have not been registered under the Securities Act
or any state securities laws and therefore may not be offered, sold or
otherwise transferred except in compliance with the registration requirements
of the Securities Act and any other applicable securities laws, or pursuant to
an exemption therefrom or in a transaction not subject thereto, and in each
case in compliance with certain other conditions and restrictions. Old Capital
Securities which remain outstanding after consummation of the Exchange Offer
will continue to bear a legend reflecting such restrictions on transfer. In
addition, upon consummation of the Exchange Offer, holders of Old Capital
Securities which remain outstanding will not be entitled to any rights to have
such Old Capital Securities registered under the Securities Act or to any
similar rights under the Registration Rights Agreement. M&I and the Trust do
not intend to register under the Securities Act any Old Capital Securities
which remain outstanding after consummation of the Exchange Offer.
To the extent that Old Capital Securities are tendered and accepted in the
Exchange Offer, any trading market for Old Capital Securities which remain
outstanding after the Exchange Offer could be adversely affected.
The New Capital Securities and any Old Capital Securities which remain
outstanding after consummation of the Exchange Offer will constitute a single
series of Capital Securities under the Declaration and, accordingly, will vote
together as a single class for purposes of determining whether holders of the
requisite percentage in outstanding Liquidation Amount thereof have taken
certain actions or exercised certain rights under the Declaration.
The Old Capital Securities provide that, if the Exchange Offer is not
consummated within 180 days of the original issuance of the Old Capital
Securities, the Distribution rate borne by the Old Capital Securities will
increase by 0.25% per annum commencing on the 181st day after the original
issuance of the Old Capital Securities, until the Exchange Offer is
consummated. Following consummation of the Exchange Offer, the Old Capital
Securities will not be entitled to any increase in the Distribution rate
thereon. The New Capital Securities will not be entitled to any such increase
in the interest rate thereon.
ABSENCE OF PUBLIC MARKET
The Old Capital Securities were issued to, and the Company believes are
currently owned by, a relatively small number of beneficial owners. The Old
Capital Securities have not been registered
20
<PAGE>
under the Securities Act and will continue to be subject to restrictions on
transferability to the extent that they are not exchanged for the New Capital
Securities. Although the New Capital Securities will generally be permitted to
be resold or otherwise transferred by the holders (who are not affiliates of
M&I or the Trust) without compliance with the registration requirements under
the Securities Act, they will constitute a new issue of securities with no
established trading market. Capital Securities may be transferred by the
holders thereof only in blocks having a Liquidation Amount of not less than
$100,000 (100 Capital Securities). Accordingly, no assurance can be given that
an active public or other market will develop for the New Capital Securities
or the Old Capital Securities. If an active public market does not develop,
the market price and liquidity of the New Capital Securities may be adversely
affected.
If a public trading market develops for the New Capital Securities, future
trading prices of such securities will depend on many factors, including,
among other things, prevailing interest rates, results of operations and the
market for similar securities. Depending on prevailing interest rates, the
market for similar securities and other factors, including the financial
condition of M&I, the New Capital Securities may trade at a discount. The
Company and the Trust do not intend to apply for listing of the Capital
Securities issued in the Exchange Offer as debt securities on a securities
exchange or for quotation through the National Association of Securities
Dealers Automated Quotation System. However, if the Subordinated Debt
Securities are distributed to the holders of the Capital Securities, and the
Capital Securities are then listed on such exchange or for such quotation, the
Company will use its best efforts to have the Subordinated Debt Securites
listed on such exchange or for such quotation as the Capital Securities are
then listed.
Notwithstanding the registration of the New Capital Securities in the
Exchange Offer, holders who are "affiliates" (as defined under Rule 405 of the
Securities Act) of M&I or the Trust may publicly offer for sale or resell the
New Notes only in compliance with the provisions of Rule 144 under the
Securities Act or any other available exemptions under the Securities Act.
Each broker-dealer that receives New Capital Securities for its own account
in exchange for Old Capital Securities, where such Old Capital Securities were
acquired by such broker-dealer as a result of market-making activities or
other trading activities, must acknowledge that it will deliver a prospectus
in connection with any resale of such New Capital Securities. See "Plan of
Distribution."
EXCHANGE OFFER PROCEDURES
Issuance of the New Capital Securities in exchange for Old Capital
Securities pursuant to the Exchange Offer will be made only after a timely
receipt by the Exchange Agent of (i) such Old Capital Securities or a book-
entry confirmation of a book-entry transfer of the Old Capital Securities into
the Exchange Agent's account at The Depository Trust Company ("DTC"),
including an Agent's Message if the tendering holder has not delivered a
Letter of Transmittal, the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees
or (in the case of a book-entry transfer) an Agent's Message in lieu of the
Letter of Transmittal, and (iii) any other documents required by the Letter of
Transmittal. The term "Agent's Message" means a message, transmitted by DTC to
and received by the Exchange Agent and forming part of a book-entry
confirmation, which states that such participant has received and agrees to be
bound by the Letter of Transmittal and that the Trust and M&I may enforce such
Letter of Transmittal against such participant. Therefore, holders of the Old
Capital Securities desiring to tender such Old Capital Securities in exchange
for New Capital Securities should allow sufficient time to ensure timely
delivery. The Company, the Trust and the Exchange Agent are under no duty to
give notification of defects or irregularities with respect to the tenders of
Old Capital Securities for exchange.
21
<PAGE>
CAPITALIZATION
The following table sets forth the consolidated capitalization of M&I and
its subsidiaries at December 31, 1996, and "as adjusted" to reflect, on a pro
forma basis as of such date, the application of the estimated net proceeds
from the sale of the Old Capital Securities. No adjustment has been made for
any possible redemption of any common stock of M&I. See "Use of Proceeds." The
table should be read in conjunction with M&I's consolidated financial
statements and notes thereto incorporated herein by reference. See "Available
Information."
<TABLE>
<CAPTION>
DECEMBER 31, 1996
----------------------
AS
ACTUAL ADJUSTED
---------- ----------
(IN THOUSANDS)
<S> <C> <C>
Long-Term Debt...................................... $ 336,096 $ 137,065
Company-Obligated Mandatorily Redeemable Capital
Trust Pass-through Securities of Subsidiary Trust
holding solely a Company Guaranteed Related
Subordinated Debt(1)............................... -- 200,000
Shareholders' Equity
Series A Convertible Preferred Stock, $1.00 Par
Value, 2,000,000 Shares Authorized, 517,129 Shares
Issued; Liquidation Preference Of $51,713.......... 517 517
Common Stock, $1.00 Par Value, 160,000,000 Shares
Authorized, 99,494,335 Shares Issued............... 99,494 99,494
Additional Paid-In Capital.......................... 204,135 204,135
Retained Earnings................................... 1,209,167 1,209,167
Treasury Stock, At Cost (10,910,798 Shares)......... (279,143) (279,143)
Deferred Compensation............................... (825) (825)
Net Unrealized Gains On Securities Available For
Sale, Net of Related Income Taxes.................. 27,865 27,865
---------- ----------
Total Shareholders' Equity........................ 1,261,210 1,261,210
---------- ----------
Total Capitalization............................ $1,597,306 $1,598,275
========== ==========
</TABLE>
- --------
(1) The Company-Obligated Mandatorily Redeemable Capital Trust Pass-through
Securities of Subsidiary Trust holding solely a Company Guaranteed Related
Subordinated Debt reflects the Capital Securities. The Trust is a wholly
owned subsidiary of the Company and holds the Subordinated Debt Securities
as its sole asset. The SEC staff will accept the classification of such
securities in the Company's consolidated financial statements as debt.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
M&I for the periods indicated:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------
RATIO OF EARNINGS TO FIXED CHARGES(1) 1996 1995 1994 1993 1992
- ------------------------------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Excluding Interest on Deposits.................... 3.76x 3.76x 3.18x 6.52x 5.57x
Including Interest on Deposits.................... 1.66x 1.68x 1.50x 1.83x 1.60x
</TABLE>
- --------
(1) The ratio of earnings to fixed charges has been computed by dividing
earnings before income taxes and fixed charges by fixed charges. Fixed
charges, excluding interest on deposits, consists of interest on
indebtedness and one-third of rental expense (which is deemed
representative of the interest factor). Fixed charges, including interest
on deposits, consist of both the foregoing items plus interest on
deposits.
22
<PAGE>
ACCOUNTING TREATMENT
The financial statements of the Trust will be consolidated into M&I's
consolidated financial statements with the Capital Securities shown as
"Company-Obligated Mandatorily Redeemable Capital Trust Pass-through
Securities of Subsidiary Trust holding solely a Company Guaranteed Related
Subordinated Debt" or its equivalent. The Trust is a wholly owned subsidiary
of the Company and holds the Subordinated Debt Securities as its sole asset.
See "Capitalization."
USE OF PROCEEDS
Neither M&I nor the Trust will receive any cash proceeds from the issuance
of the New Capital Securities offered hereby. In consideration for issuing the
New Capital Securities in exchange for Old Capital Securities as described in
this Prospectus, the Trust will receive Old Capital Securities in like
Liquidation Amount. The Old Capital Securities surrendered in exchange for the
New Capital Securities will be retired and canceled.
The net proceeds to the Trust from the offering of the Old Capital
Securities was approximately $199.0 million (before deducting expenses
associated with the offering). All of the net proceeds from the sale of
Capital Securities were invested by the Trust in the Old Subordinated Debt
Securities. M&I's net proceeds from the sale of the Old Subordinated Debt
Securities were added to the general funds of M&I and were and may be used for
general corporate purposes, including, without limitation, funding the
repurchase of shares of its common stock, reduction of indebtedness (including
the refinancing of M&I's outstanding commercial paper), investments in or
advances to subsidiaries and possible future acquisitions of bank and non-bank
subsidiaries.
THE TRUST
The Trust is a statutory business trust created under Delaware law pursuant
to (i) a separate declaration of trust (the "Original Declaration") executed
by the Company, as sponsor for the Trust (the "Sponsor"), and the M&I Trustees
(as defined herein) for the Trust and (ii) the filing of a certificate of
trust for the Trust with the Delaware Secretary of State on December 2, 1996.
The Original Declaration was amended and restated in its entirety pursuant to
an Amended and Restated Declaration of Trust dated as of December 9, 1996 (the
"Declaration") executed by the Sponsor and the M&I Trustees (as defined
below). The Declaration has been qualified under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"). The Trust exists for the
exclusive purposes of (i) issuing the Trust Securities representing undivided
beneficial interests in the assets of the Trust, (ii) investing the gross
proceeds of such Trust Securities in the Subordinated Debt Securities, and
(iii) engaging in only those other activities necessary or incidental thereto.
All of the Common Securities of the Trust will be directly or indirectly owned
by the Company. The Common Securities of the Trust rank pari passu, and
payments will be made thereon pro rata, with the Capital Securities of the
Trust except that upon an event of default under the Declaration in respect of
the Trust, the rights of the holders of the Common Securities of the Trust to
payment in respect of distributions and payments upon liquidation, redemption
and otherwise will be subordinated to the rights of the holders of the Capital
Securities of the Trust. The Company acquired Common Securities in an
aggregate liquidation amount equal to 3% of the total capital of the Trust.
The Trust has a term of approximately 55 years, but may earlier terminate as
provided in the Declaration.
The Trust's business and affairs will be conducted by the trustees (the "M&I
Trustees") appointed by the Company, as the holder of all the Common
Securities. The holder of the Common Securities of the Trust will be entitled
to appoint, remove or replace any of, or increase or reduce the number of, the
M&I Trustees of the Trust. The duties and obligations of the M&I Trustees of
the Trust shall be governed by the Declaration of Trust. A majority of the M&I
Trustees (the "Regular Trustees") of the Trust will be persons who are
employees or officers of or affiliated with the Company. One M&I Trustee will
be a financial institution that will be unaffiliated with the Company and will
be eligible and act as property trustee and as indenture trustee pursuant to
the terms set forth herein (the "Institutional Trustee").
23
<PAGE>
Pursuant to the Declaration, the number of M&I Trustees of the Trust is
five. Three of the trustees of the Trust are Regular Trustees. The fourth
trustee of the Trust is the Institutional Trustee. Initially, The Chase
Manhattan Bank, a New York State banking corporation, is the Institutional
Trustee until removed or replaced by the holder of the Common Securities of
the Trust. The Chase Manhattan Bank is also trustee under the Guarantee. The
fifth trustee of the Trust is required to be an entity that maintains its
principal place of business in the State of Delaware (the "Delaware Trustee").
Chase Manhattan Bank Delaware, an affiliate of the Institutional Trustee, is
the Delaware Trustee. See "Description of the Capital Securities--Voting
Rights" herein. The Institutional Trustee holds title to the Subordinated Debt
Securities for the benefit of the holders of the Trust Securities issued by
the Trust, and the Institutional Trustee holds the power to exercise all
rights, powers and privileges under the Indenture as the holder of the
Subordinated Debt Securities. In addition, the Institutional Trustee maintains
exclusive control of a separate segregated non-interest bearing trust account
(the "Property Account") to hold all payments made in respect of the
Subordinated Debt Securities for the benefit of the holders of the Trust
Securities issued by the Trust. The Institutional Trustee will make payments
of distributions and payments on liquidation, redemption and otherwise to the
holders of record of the Trust Securities issued by the Trust out of funds
from the Property Account of the Trust. The Company, as holder of all the
Common Securities of the Trust, has the right, subject to the Trust Indenture
Act with respect to the Institutional Trustee and Delaware law with respect to
the Delaware Trustee, to appoint, remove or replace any M&I Trustee and to
increase or decrease the number of M&I Trustees. The Company will pay all fees
and expenses related to the Trust and the offering and sale of the Trust
Securities of the Trust. See "Description of the Subordinated Debt
Securities--Miscellaneous." The rights of the holders of the Capital
Securities of the Trust, including economic rights, rights to information and
voting rights, are set forth in the Declaration with respect to the Trust, the
Delaware Business Trust Act, as amended (the "Trust Act"), and the Trust
Indenture Act. See "Description of the Capital Securities." The principal
place of business of the Trust is c/o Marshall & Ilsley Corporation, 770 North
Water Street, Milwaukee, Wisconsin 53202, and its telephone number is (414)
765-7801.
MARSHALL & ILSLEY CORPORATION
Marshall & Ilsley Corporation ("M&I") is a registered bank holding company
under the Bank Holding Company Act of 1956, as amended (the "BHCA"). As of
December 31, 1996, M&I had consolidated total assets of approximately $14.8
billion and consolidated total deposits of approximately $11.0 billion, making
M&I the second largest bank holding company headquartered in Wisconsin. The
executive offices of M&I are located at 770 North Water Street, Milwaukee,
Wisconsin 53202 (telephone number (414) 765-7801).
M&I's principal assets are the stock of its bank and nonbank subsidiaries
and the assets of its Data Services Division ("M&I Data Services"). M&I's
subsidiaries include 29 commercial banks, one savings association and a number
of companies engaged in businesses that the Federal Reserve Board has
determined to be closely-related or incidental to the business of banking. M&I
provides its subsidiaries with financial and managerial assistance in such
areas as budgeting, tax planning, compliance assistance, asset and liability
management, investment administration and portfolio planning, business
development, advertising and human resources management.
M&I's bank and savings association subsidiaries provide a full range of
banking services to individuals, businesses and governments throughout
Wisconsin and the Phoenix, Arizona metropolitan area. These subsidiaries offer
retail, institutional, international, business and correspondent banking,
investment and trust services through the operation of 226 banking offices in
Wisconsin and 12 offices in Arizona. M&I Marshall & Ilsley Bank is M&I's
largest bank subsidiary, with consolidated assets as of December 31, 1996 of
approximately $4.8 billion.
24
<PAGE>
M&I Data Services and three other nonbank subsidiaries are major suppliers
of financial and data processing services and software to banking, financial
and related organizations. M&I Data Services provides services and software to
over 600 financial institution customers in the United States, as well as
institutions in numerous foreign countries. On August 7, 1996, M&I acquired
EastPoint Technology, Inc., a software development company located in Bedford,
New Hampshire which specializes in client/server technology, for approximately
$25.5 million in cash. M&I's nonbank subsidiaries operate a variety of bank-
related businesses, including those providing investment management services,
insurance services, trust services, equipment lease financing, commercial and
residential mortgage banking, venture capital, brokerage services and
financial advisory services. M&I Investment Management Corp. offers a full
range of asset management services to M&I's trust company subsidiaries, the
Marshall Funds and other individual, business and institutional customers.
M&I's trust company subsidiaries provide trust and employee benefit plan
services to customers in Wisconsin, Arizona and Florida. M&I First National
Leasing Corp. leases a variety of equipment and machinery to large and small
businesses. M&I Mortgage Corp. originates, purchases, sells and services
residential mortgages. The Richter-Schroeder Company originates and services
long-term commercial real estate loans for institutional investors. M&I
Capital Markets Group, Inc. provides venture capital, financial advisory and
strategic planning services to customers, including assistance in connection
with the private placement of securities, raising funds for expansion,
leveraged buy-outs, divestitures, mergers and acquisitions and small business
investment company transactions. M&I Brokerage Services, Inc., a broker-dealer
registered with the National Association of Securities Dealers, Inc. (the
"NASD") and the Securities and Exchange Commission (the "SEC"), provides
brokerage and other investment related services to a variety of retail and
commercial customers.
As a registered bank holding company and savings and loan holding company,
M&I is subject to regulation and examination by the Federal Reserve under the
BHCA. M&I's state bank subsidiaries and savings association are subject to
regulation and examination by the Wisconsin Department of Financial
Institutions or in the case of M&I Thunderbird Bank, the Arizona State Banking
Department, and the Federal Reserve (for state banks). M&I's national bank
subsidiary is subject to regulation and examination by the Office of the
Comptroller of the Currency. In addition, all of M&I's bank subsidiaries are
subject to examination by the FDIC.
Under Federal Reserve policy, M&I is expected to act as a source of
financial strength to each of its bank subsidiaries and to commit resources to
support each bank subsidiary in circumstances when it might not do so absent
such requirements. In addition, the bank subsidiaries of M&I, are subject to
certain restrictions imposed by federal law on any extensions of credit to,
and certain other transactions with, M&I and certain other affiliates, and on
investments in stock or other securities thereof. In addition, payment of
dividends to M&I by the subsidiary banks is subject to ongoing review of
banking regulators and is subject to various statutory limitations and in
certain circumstances requires approval by banking regulatory authorities.
Furthermore, there are numerous other federal and state laws and regulations
which regulate the activities of M&I and its bank subsidiaries, including
requirements and limitations relating to capital and reserve requirements,
permissible investments and lines of business, transactions with affiliates,
mergers and acquisitions, issuances of securities, extensions of credit and
branch banking. The federal regulatory agencies have implemented provisions of
the Federal Deposit Insurance Corporation Improvement Act of 1991 by creating
standards for when they will take prompt corrective action if a depository
institution fails to maintain a certain capital level within specified
categories ranging from "critically undercapitalized" to "well capitalized."
Information regarding capital requirements for bank holding companies and
tables reflecting M&I's regulatory capital position at December 31, 1996 can
be found in Note 13 of the Notes to the Consolidated Financial Statements
contained in Item 8 of M&I's Form 10-K for the fiscal year ended December 31,
1996, which is incorporated herein by reference.
For additional information regarding M&I, see the documents incorporated by
reference herein as described in "Incorporation of Certain Documents by
Reference."
25
<PAGE>
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
In connection with the sale of the Old Capital Securities, M&I and the Trust
entered into the Registration Rights Agreement with the Initial Purchasers,
pursuant to which M&I and the Trust agreed to file and to use their best
efforts to cause to become effective with the Commission a registration
statement with respect to the exchange of the Old Capital Securities for
capital securities with terms identical in all material respects to the terms
of the Old Capital Securities. A copy of the Registration Rights Agreement has
been filed as an exhibit to the Registration Statement of which this
Prospectus is a part.
The Exchange Offer is being made to satisfy the contractual obligations of
M&I and the Trust under the Registration Rights Agreement. The form and terms
of the New Capital Securities are the same as the form and terms of the Old
Capital Securities except that the New Capital Securities have been registered
under the Securities Act and therefore will not be subject to certain
restrictions on transfer applicable to the Old Capital Securities and will not
provide for any increase in the Distribution rate thereon. In that regard, the
Old Capital Securities provide, among other things, that, if the Exchange
Offer is not consummated by June 7, 1997, the Distribution rate borne by the
Old Capital Securities commencing on June 8, 1997, will increase by 0.25% per
annum until the Exchange Offer is consummated. Upon consummation of the
Exchange Offer, holders of Old Capital Securities will not be entitled to any
increase in the Distribution rate thereon or any further registration rights
under the Registration Rights Agreement, except under limited circumstances.
See "Risk Factors--Consequences of a Failure to Exchange Old Capital
Securities."
The Exchange Offer is not being made to, nor will the Company accept tenders
for exchange from, holders of Old Capital Securities in any jurisdiction in
which the Exchange Offer or the acceptance thereof would not be in compliance
with the securities or blue sky laws of such jurisdiction.
Unless the context requires otherwise, the term "holder" with respect to the
Exchange Offer means any person in whose name the Old Capital Securities are
registered on the books of the Company or any other person who has obtained a
properly completed bond power from the registered holder, or any participant
in DTC whose name appears on a security position listing as a holder of Old
Capital Securities (which, for purposes of the Exchange Offer, include
beneficial interests in the Old Capital Securities, held by direct or indirect
participants in DTC and Old Capital Securities held in definitive form).
Pursuant to the Exchange Offer, M&I will exchange as soon as practicable
after the date hereof the Old Guarantee for the New Guarantee and all of the
Old Subordinated Debt Securities, of which $206,186,000 aggregate principal
amount is outstanding, for like aggregate principal of the New Subordinated
Debt Securities. The New Guarantee and New Subordinated Debt Securities have
been registered under the Securities Act.
TERMS OF THE EXCHANGE
The Company hereby offers, upon the terms and subject to the conditions set
forth in this Prospectus and in the accompanying Letter of Transmittal, to
exchange up to $200,000,000 aggregate Liquidation Amount of New Capital
Securities for a like aggregate Liquidation Amount of Old Capital Securities
properly tendered on or prior to the Expiration Date (as defined below) and
not properly withdrawn in accordance with the procedures described below. The
Company will issue, promptly after the Expiration Date, an aggregate
Liquidation Amount of up to $200,000,000 of New Capital Securities in exchange
for a like principal amount of outstanding Old Capital Securities tendered and
accepted in connection with the Exchange Offer. Holders may tender their Old
Capital Securities in whole or in part in a Liquidation Amount of not less
than $100,000 or any integral multiple of $1,000 in excess thereof.
26
<PAGE>
The Exchange Offer is not conditioned upon any minimum Liquidation Amount of
Old Capital Securities being tendered. As of the date of this Prospectus,
$200,000,000 aggregate Liquidation Amount of the Old Capital Securities is
outstanding.
Holders of Old Capital Securities do not have any appraisal or dissenters'
rights in connection with the Exchange Offer. Old Capital Securities which are
not tendered for or are tendered but not accepted in connection with the
Exchange Offer will remain outstanding and not be entitled to any further
registration rights under the Registration Rights Agreement, except under
limited circumstances. See "Risk Factors--Consequences of a Failure to
Exchange Old Capital Securities".
If any tendered Old Capital Securities are not accepted for exchange because
of an invalid tender, the occurrence of certain other events set forth herein
or otherwise, certificates for any such unaccepted Old Capital Securities will
be returned, without expense, to the tendering holder thereof promptly after
the Expiration Date.
Holders who tender Old Capital Securities in connection with the Exchange
Offer will not be required to pay brokerage commissions or fees or, subject to
the instructions in the Letter of Transmittal, transfer taxes with respect to
the exchange of Old Capital Securities in connection with the Exchange Offer.
M&I will pay all charges and expenses, other than certain applicable taxes
described below, in connection with the Exchange Offer. See "--Fees and
Expenses."
NEITHER THE BOARD OF DIRECTORS OF M&I NOR THE TRUSTEES OF THE TRUST MAKES
ANY RECOMMENDATION TO HOLDERS OF OLD CAPITAL SECURITIES AS TO WHETHER TO
TENDER OR REFRAIN FROM TENDERING ALL OR ANY PORTION OF THEIR OLD CAPITAL
SECURITIES PURSUANT TO THE EXCHANGE OFFER. IN ADDITION, NO ONE HAS BEEN
AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF OLD CAPITAL SECURITIES
MUST MAKE THEIR OWN DECISION WHETHER TO TENDER PURSUANT TO THE EXCHANGE OFFER
AND, IF SO, THE AGGREGATE AMOUNT OF OLD CAPITAL SECURITIES TO TENDER AFTER
READING THIS PROSPECTUS AND THE LETTER OF TRANSMITTAL AND CONSULTING WITH
THEIR ADVISERS, IF ANY, BASED ON THEIR FINANCIAL POSITION AND REQUIREMENTS.
EXPIRATION DATE; EXTENSIONS, AMENDMENTS
The term "Expiration Date" means 5:00 p.m., New York City time, on April 10,
1997 unless the Exchange Offer is extended by M&I and the Trust (in which case
the term "Expiration Date" shall mean the latest date and time to which the
Exchange Offer is extended).
M&I and the Trust expressly reserves the right in their sole and absolute
discretion, subject to applicable law, at any time and from time to time, (i)
to delay the acceptance of the Old Capital Securities for exchange, (ii) to
terminate the Exchange Offer (whether or not any Old Capital Securities have
theretofore been accepted for exchange) if M&I and the Trust determine, in
their sole and absolute discretion, that any of the events or conditions
referred to under "--Conditions to the Exchange Offer" has occurred or exists
or has not been satisfied, (iii) to extend the Expiration Date of the Exchange
Offer and retain all Old Capital Securities tendered pursuant to the Exchange
Offer, subject, however, to the right of holders of Old Capital Securities to
withdraw their tendered Old Capital Securities as described under "--
Withdrawal Rights", and (iv) to waive any condition or otherwise amend the
terms of the Exchange Offer in any respect. If the Exchange Offer is amended
in a manner
27
<PAGE>
determined by M&I and the Trust to constitute a material change, or if M&I and
the Trust waives a material condition of the Exchange Offer, M&I and the Trust
will promptly disclose such amendment by means of a prospectus supplement that
will be distributed to the registered holders of the Old Capital Securities,
and M&I and the Trust will extend the Exchange Offer to the extent required by
Rule 14e-1 under the Exchange Act.
Any such delay in acceptance, extension, termination or amendment will be
followed promptly by oral or written notice thereof to the Exchange Agent (any
such oral notice to be promptly confirmed in writing) and by making a public
announcement thereof, and such announcement in the case of an extension will
be made no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled Expiration Date. Without limiting the manner in
which M&I and the Trust may choose to make any public announcement and subject
to applicable laws, M&I and the Trust shall have no obligation to publish,
advertise or otherwise communicate any such public announcement other than by
issuing a release to an appropriate news agency.
ACCEPTANCE FOR EXCHANGE AND ISSUANCE OF NEW CAPITAL SECURITIES
Upon the terms and subject to the conditions of the Exchange Offer, the
Trust will exchange, and will issue to the Exchange Agent, New Capital
Securities for Old Capital Securities validly tendered and not withdrawn
(pursuant to the withdrawal rights described under "--Withdrawal Rights")
promptly after the Expiration Date.
In all cases, delivery of New Capital Securities in exchange for Old Capital
Securities tendered and accepted for exchange pursuant to the Exchange Offer
will be made only after timely receipt by the Exchange Agent of (i) Old
Capital Securities or a book-entry confirmation of a book-entry transfer of
Old Capital Securities into the Exchange Agent's account at DTC, including an
Agent's Message if the tendering holder has not delivered a Letter of
Transmittal, (ii) the Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature guarantees, or (in
the case of a book-entry tender) an Agent's Message in lieu of the Letter of
Transmittal, and (iii) any other documents required by the Letter of
Transmittal.
The term "book-entry confirmation" means a timely confirmation of a book-
entry transfer of Old Capital Securities into the Exchange Agent's account at
DTC.
Subject to the terms and conditions of the Exchange Offer, the Trust will be
deemed to have accepted for exchange, and thereby exchanged, Old Capital
Securities validly tendered and not withdrawn as, if and when the Trust gives
oral or written notice to the Exchange Agent (any such oral notice to be
promptly confirmed in writing) of the Trust's acceptance of such Old Capital
Securities for exchange pursuant to the Exchange Offer. The Exchange Agent
will act as agent for the Trust for the purpose of receiving tenders of Old
Capital Securities, Letters of Transmittal and related documents, and as agent
for tendering holders for the purpose of receiving Old Capital Securities,
Letters of Transmittal and related documents and transmitting New Capital
Securities to validly tendered holders. Such exchange will be made promptly
after the Expiration Date. If for any reason whatsoever, acceptance for
exchange or the exchange of any Old Capital Securities tendered pursuant to
the Exchange Offer is delayed (whether before or after the Trust's acceptance
for exchange of Old Capital Securities) or the Trust extends the Exchange
Offer or is unable to accept for exchange or exchange Old Capital Securities
tendered pursuant to the Exchange Offer, then, without prejudice to the
Trust's rights set forth herein, the Exchange Agent may, nevertheless, on
behalf of the Trust and subject to Rule 14e-1(c) under the Exchange Act,
retain tendered Old Capital Securities and such Old Capital Securities may not
be withdrawn except to the extent tendering holders are entitled to withdrawal
rights as described under "--Withdrawal Rights".
28
<PAGE>
Pursuant to the Letter of Transmittal or Agent's Message in lieu thereof, a
holder of Old Capital Securities will warrant and agree in the Letter of
Transmittal that it has full power and authority to tender, exchange, sell,
assign and transfer Old Capital Securities, that the Trust will acquire good,
marketable and unencumbered title to the tendered Old Capital Securities, free
and clear of all liens, restrictions, charges and encumbrances, and the Old
Capital Securities tendered for exchange are not subject to any adverse claims
or proxies. The holder also will warrant and agree that it will, upon request,
execute and deliver any additional documents deemed by the Trust or the
Exchange Agent to be necessary or desirable to complete the exchange, sale,
assignment, and transfer of the Old Capital Securities tendered pursuant to
the Exchange Offer.
PROCEDURES FOR TENDERING OLD CAPITAL SECURITIES
Valid Tender. Except as set forth below, in order for Old Capital Securities
to be validly tendered pursuant to the Exchange Offer, either (i) a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), with
any required signature guarantees, or (in the case of a book-entry tender) an
Agent's Message in lieu of the Letter of Transmittal, and any other required
documents, must be received by the Exchange Agent at the address set forth
under "--Exchange Agent," on or prior to the Expiration Date and (a) tendered
Old Capital Securities must be received by the Exchange Agent, or (b) such Old
Capital Securities must be tendered pursuant to the procedures for book-entry
transfer set forth below and a book-entry confirmation including an Agent's
Message if the tendering holder has not delivered a Letter of Transmittal,
must be received by the Exchange Agent, in each case on or prior to the
Expiration Date, or (ii) the guaranteed delivery procedures set forth below
must be complied with.
If less than all of the Old Capital Securities are tendered, a tendering
holder should fill in the amount of Old Capital Securities being tendered in
the appropriate box on the Letter of Transmittal or so indicate in an Agent's
Message in lieu of the Letter of Transmittal. The entire amount of Old Capital
Securities delivered to the Exchange Agent will be deemed to have been
tendered unless otherwise indicated.
THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS, IS AT THE OPTION AND SOLE RISK OF THE TENDERING
HOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL, RETURN RECEIPT
REQUESTED, PROPERLY INSURED, OR AN OVERNIGHT DELIVERY SERVICE IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Book-Entry Transfer. The Exchange Agent will establish an account with
respect to the Old Capital Securities at DTC for purposes of the Exchange
Offer within two business days after the date of this Prospectus. Any
financial institution that is a participant in DTC's book-entry transfer
facility system may make a book-entry delivery of the Old Capital Securities
by causing DTC to transfer such Old Capital Securities into the Exchange
Agent's account at DTC in accordance with DTC's procedures for transfers.
However, although delivery of Old Capital Securities may be effected through
book-entry transfer into the Exchange Agent's account at DTC, the Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees, or an Agent's Message in lieu of the Letter
of Transmittal, and any other required documents, must in any case be
delivered to and received by the Exchange Agent at its address set forth under
"--Exchange Agent" on or prior to the Expiration Date, or the guaranteed
delivery procedure set forth below must be complied with.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE
AGENT.
Signature Guarantees. Certificates for the Old Capital Securities need not
be endorsed and signature guarantees on the Letter of Transmittal are
unnecessary unless (a) a certificate for the Old Capital Securities is
registered in a name other than that of the person surrendering the
certificate or
29
<PAGE>
(b) such registered holder completes the box entitled "Special Issuance
Instructions" or "Special Delivery Instructions" in the Letter of Transmittal.
In the case of (a) or (b) above, such certificates for Old Capital Securities
must be duly endorsed or accompanied by a properly executed bond power, with
the endorsement or signature on the bond power and on the Letter of
Transmittal guaranteed by a firm or other entity identified in Rule 17Ad-15
under the Exchange Act as an "eligible guarantor institution," including (as
such terms are defined therein): (i) a bank; (ii) a broker, dealer, municipal
securities broker or dealer or government securities broker or dealer; (iii) a
credit union; (iv) a national securities exchange, registered securities
association or clearing agency; or (v) a savings association that is a
participant in a Securities Transfer Association (an "Eligible Institution"),
unless surrendered on behalf of such Eligible Institution. See Instruction 1
to the Letter of Transmittal.
Guaranteed Delivery. If a holder desires to tender Old Capital Securities
pursuant to the Exchange Offer and the certificates for such Old Capital
Securities are not immediately available or time will not permit all required
documents to reach the Exchange Agent on or before the Expiration Date, or the
procedures for book-entry transfer cannot be completed on a timely basis, such
Old Capital Securities may nevertheless be tendered, provided that all of the
following guaranteed delivery procedures are complied with:
(i) such tenders are made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form accompanying the Letter of Transmittal,
is received by the Exchange Agent, as provided below, on or prior to
Expiration Date; and
(iii) the certificates (or book-entry confirmation) representing all
tendered Old Capital Securities, in proper form for transfer, together with
a properly completed and duly executed Letter of Transmittal (or facsimile
thereof or Agent's Message in lieu thereof), with any required signature
guarantees and any other documents required by the Letter of Transmittal,
are received by the Exchange Agent within three New York Stock Exchange
trading days after the date of execution of such Notice of Guaranteed
Delivery.
The Notice of Guaranteed Delivery may be delivered by hand, or transmitted
by facsimile or mail to the Exchange Agent and must include a guarantee by an
Eligible Institution in the form set forth in such notice.
Notwithstanding any other provision hereof, the delivery of New Capital
Securities in exchange for Old Capital Securities tendered and accepted for
exchange pursuant to the Exchange Offer will in all cases be made only after
timely receipt by the Exchange Agent of Old Capital Securities, or of a book-
entry confirmation with respect to such Old Capital Securities, and a properly
completed and duly executed Letter of Transmittal (or facsimile thereof or
Agent's Message in lieu thereof), together with any required signature
guarantees and any other documents required by the Letter of Transmittal.
Accordingly, the delivery of New Capital Securities might not be made to all
tendering holders at the same time, and will depend upon when Old Capital
Securities, book-entry confirmations with respect to Old Capital Securities
and other required documents are received by the Exchange Agent.
The Trust's acceptance for exchange of Old Capital Securities tendered
pursuant to any of the procedures described above will constitute a binding
agreement between the tendering holder and the Trust upon the terms and
subject to the conditions of the Exchange Offer.
Determination of Validity. All questions as to the form of documents,
validity, eligibility (including time of receipt) and acceptance for exchange
of any tendered Old Capital Securities will be determined by the Trust, in its
sole discretion, whose determination shall be final and binding on all
parties. The Trust reserves the absolute right, in its sole and absolute
discretion, to reject any and all tenders determined by it not to be in proper
form or the acceptance of which, or exchange for, may, in the view of counsel
to the Trust, be unlawful. The Trust also reserves the absolute right, subject
to applicable law, to waive any of the conditions of the Exchange Offer as set
forth under "--Conditions to the Exchange Offer" or any condition or
irregularity in any tender of Old Capital Securities of any particular holder
whether or not similar conditions or irregularities are waived in the case of
other holders.
30
<PAGE>
The Trust's interpretation of the terms and conditions of the Exchange Offer
(including the Letter of Transmittal and the instructions thereto) will be
final and binding. No tender of Old Capital Securities will be deemed to have
been validly made until all irregularities with respect to such tender have
been cured or waived. Neither the Trust, any affiliates or assigns of the
Trust, the Exchange Agent or any other person shall be under any duty to give
any notification of any irregularities in tenders or incur any liability for
failure to give any such notification.
If any Letter of Transmittal, endorsement, bond power, power of attorney, or
any other document required by the Letter of Transmittal is signed by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and unless waived by the Trust,
evidence satisfactory to the Trust, in its sole discretion, of such person's
authority to so act must be submitted.
A beneficial owner of Old Capital Securities that are held by or registered
in the name of a broker, dealer, commercial bank, trust company or other
nominee or custodian is urged to contact such entity promptly if such
beneficial holder wishes to participate in the Exchange Offer.
RESALES OF NEW CAPITAL SECURITIES
Based on interpretations by the staff of the Commission, as set forth in no-
action letters issued to third parties, the Company and the Trust believe that
holders of Old Capital Securities (other than any holder that is an
"affiliate" of the Company or the Trust as defined under Rule 405 of the
Securities Act) who exchange their Old Capital Securities for New Capital
Securities pursuant to the Exchange Offer may offer such New Capital
Securities for resale, resell such New Capital Securities and otherwise
transfer such New Capital Securities without compliance with the registration
and prospectus delivery provisions of the Securities Act, provided that such
New Capital Securities are acquired in the ordinary course of such holders'
business and such holders are not engaged in, and do not intend to engage in,
a distribution of such New Capital Securities and have no arrangement or
understanding with any person to participate in the distribution of such New
Capital Securities. However, the staff of the Commission has not considered
the Exchange Offer in the context of a no-action letter, and there can be no
assurance that the staff of the Commission would make a similar determination
with respect to the Exchange Offer. Each broker-dealer that receives New
Capital Securities for its own account in exchange for Old Capital Securities,
where such Old Capital Securities were acquired by such broker-dealer as a
result of market-making activities or other trading activities, must
acknowledge that it will deliver a prospectus in connection with any resale of
such New Capital Securities. See "Plan of Distribution."
WITHDRAWAL RIGHTS
Except as otherwise provided herein, tenders of Old Capital Securities may
be withdrawn at any time on or prior to the Expiration Date.
In order for a withdrawal to be effective a written, telegraphic or
facsimile transmission of such notice of withdrawal must be timely received by
the Exchange Agent at one of its addresses set forth under "Exchange Agent" on
or prior to the Expiration Date. Any such notice of withdrawal must specify
the name of the person who tendered the Old Capital Securities to be
withdrawn, the aggregate principal amount of Old Capital Securities to be
withdrawn, and (if certificates for such Old Capital Securities have been
tendered) the name of the registered holder of the Old Capital Securities as
set forth on the Old Capital Securities, if different from that of the person
who tendered such Old Capital Securities. If Old Capital Securities have been
delivered or otherwise identified to the Exchange Agent, then prior to the
physical release of such Old Capital Securities, the tendering holder must
submit the serial numbers shown on the particular Old Capital Securities to be
withdrawn and the signature on the notice of withdrawal must be guaranteed by
an Eligible Institution, except in the case of Old Capital
31
<PAGE>
Securities tendered for the account of an Eligible Institution. If Old Capital
Securities have been tendered pursuant to the procedures for book-entry
transfer set forth in "Procedures for Tendering Old Capital Securities," the
notice of withdrawal must specify the name and number of the account at DTC to
be credited with the withdrawal of Old Capital Securities, in which case a
notice of withdrawal will be effective if delivered to the Exchange Agent by
written, telegraphic or facsimile transmission. Withdrawals of tenders of Old
Capital Securities may not be rescinded. Old Capital Securities properly
withdrawn will not be deemed validly tendered for purposes of the Exchange
Offer, but may be retendered at any subsequent time on or prior to the
Expiration Date by following any of the procedures described above under
"Procedures for Tendering Old Capital Securities."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Trust, in its
sole discretion, whose determination shall be final and binding on all
parties. Neither the Trust, any affiliates or assigns of the Trust, the
Exchange Agent or any other person shall be under any duty to give any
notification of any irregularities in any notice of withdrawal or incur any
liability for failure to give any such notification. Any Old Capital
Securities which have been tendered but which are withdrawn will be returned
to the holder thereof promptly after withdrawal.
DISTRIBUTIONS ON THE NEW CAPITAL SECURITIES
Holders of Old Capital Securities whose Old Capital Securities are accepted
for exchange will not receive accumulated Distributions on such Old Capital
Securities for any period from and after the last Distribution Date with
respect to such Old Capital Securities prior to the original issue date of the
New Capital Securities or, if no such Distributions have been made, will not
receive any accumulated Distributions on such Old Capital Securities, and will
be deemed to have waived the right to receive any Distributions on such Old
Capital Securities accumulated from and after such Distribution Date or, if no
such Distributions have been made, from and after December 9, 1996.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provisions of the Exchange Offer, or any extension
of the Exchange Offer, M&I and the Trust will not be required to accept for
exchange, or to exchange, any Old Capital Securities for any New Capital
Securities, and, as described below, may terminate the Exchange Offer (whether
or not any Old Capital Securities have theretofore been accepted for exchange)
or may waive any conditions to or amend the Exchange Offer, if any of the
following conditions have occurred or exists or have not been satisfied:
(a) there shall occur a change in the current interpretation by the staff
of the Commission which permits the New Capital Securities issued pursuant
to the Exchange Offer in exchange for Old Capital Securities to be offered
for resale, resold and otherwise transferred by holders thereof (other than
broker-dealers and any such holder which is an "affiliate" of M&I or the
Trust within the meaning of Rule 405 under the Securities Act) without
compliance with the registration and prospectus delivery provisions of the
Securities Act provided that such New Capital Securities are acquired in
the ordinary course of such holders' business and such holders have no
arrangement or understanding with any person to participate in the
distribution of such New Capital Securities;
(b) any action or proceeding shall have been instituted or threatened in
any court or by or before any governmental agency or body with respect to
the Exchange Offer which, in M&I and the Trust's judgment, would reasonably
be expected to impair the ability of M&I and the Trust to proceed with the
Exchange Offer;
(c) any law, statute, rule or regulation shall have been adopted or
enacted which, in M&I and the Trust's judgment, would reasonably be
expected to impair the ability of M&I and the Trust to proceed with the
Exchange Offer;
32
<PAGE>
(d) a banking moratorium shall have been declared by United States
federal or Wisconsin or New York State authorities which, in the Company's
judgment, would reasonably be expected to impair the ability of the Company
to proceed with the Exchange Offer;
(e) trading on the New York Stock Exchange or generally in the United
States over-the-counter market shall have been suspended by order of the
Commission or any other governmental authority which, in M&I and the
Trust's judgment, would reasonably be expected to impair the ability of M&I
and the Trust to proceed with the Exchange Offer;
(f) a stop order shall have been issued by the Commission or any state
securities authority suspending the effectiveness of the Registration
Statement or proceedings shall have been initiated or, to the knowledge of
M&I or the Trust, threatened for that purpose or that any governmental
approval has not been obtained, which approval M&I and the Trust shall, in
their sole discretion, deem necessary for the consummation of the Exchange
Offer as contemplated hereby; or
(g) any change, or any development involving a prospective change, in the
business or financial affairs of M&I and the Trust or any of their
subsidiaries have occurred which, in the sole judgment of M&I and the
Trust, might materially impair the ability of M&I and the Trust to proceed
with the Exchange Offer.
If M&I and the Trust determines in their sole and absolute discretion that
any of the foregoing events or conditions has occurred or exists or has not
been satisfied, M&I and the Trust may, subject to applicable law, terminate
the Exchange Offer (whether or not any Old Capital Securities have theretofore
been accepted for exchange) or may waive any such condition or otherwise amend
the terms of the Exchange Offer in any respect. If such waiver or amendment
constitutes a material change to the Exchange Offer, M&I and the Trust will
promptly disclose such waiver by means of a prospectus supplement that will be
distributed to the registered holders of the Old Capital Securities, and M&I
and the Trust will extend the Exchange Offer to the extent required by Rule
14e-1 under the Exchange Act.
EXCHANGE AGENT
The Chase Manhattan Bank has been appointed as Exchange Agent for the
Exchange Offer. Delivery of the Letters of Transmittal and any other required
documents, questions, requests for assistance, and requests for additional
copies of this Prospectus or of the Letter of Transmittal should be directed
to the Exchange Agent as follows:
The Chase Manhattan Bank
55 Water Street
Room 234-North Building
New York, New York 10041
Attention: Carlos Esteves
Telephone: (212) 638-0828
Facsimile: (212) 638-7375 or
(212) 344-9367
Delivery to other than the above address or facsimile numbers will not
constitute a valid delivery.
FEES AND EXPENSES
M&I has agreed to pay the Exchange Agent reasonable and customary fees for
its services and will reimburse it for its reasonable out-of-pocket expenses
in connection therewith. M&I will also pay brokerage houses and other
custodians, nominees and fiduciaries the reasonable out-of-pocket expenses
incurred by them in forwarding copies of this Prospectus and related documents
to the beneficial owners of Old Capital Securities, and in handling or
tendering for their customers.
Holders who tender their Old Capital Securities for exchange will not be
obligated to pay any transfer taxes in connection therewith. If, however, New
Capital Securities are to be delivered to, or are to be issued in the name of,
any person other than the registered holder of the Old Capital Securities
tendered, or if a transfer tax is imposed for any reason other than the
exchange of Old
33
<PAGE>
Capital Securities in connection with the Exchange Offer, then the amount of
any such transfer taxes (whether imposed on the registered holder or any other
persons) will be payable by the tendering holder. If satisfactory evidence of
payment of such taxes or exemption therefrom is not submitted with the Letter
of Transmittal, the amount of such transfer taxes will be billed directly to
such tendering holder.
Neither M&I nor the Trust will make any payment to brokers, dealers or
others soliciting acceptances of the Exchange Offer.
DESCRIPTION OF THE CAPITAL SECURITIES
The Old Capital Securities were issued and the New Capital Securities will
be issued pursuant to the terms of the Declaration. The Institutional Trustee,
The Chase Manhattan Bank, is trustee for the Capital Securities under the
Declaration. The terms of the Capital Securities include those stated in the
Declaration and those made part of the Declaration by the Trust Indenture Act.
The following summary of the material terms and provisions of the Capital
Securities does not purport to be complete and is subject to, and qualified in
its entirety by reference to the Declaration (a copy of which has been filed
as an exhibit to the Registration Statement of which this Prospectus is a
part), the Trust Act and the Trust Indenture Act.
GENERAL
The Declaration authorizes the Regular Trustees of the Trust to issue, on
behalf of the Trust, the Trust Securities in respect of the Trust, which
represent undivided beneficial interests in the assets of the Trust. All of
the Common Securities of the Trust are owned by the Company. The Common
Securities of the Trust rank pari passu, and payments will be made thereon on
a pro rata basis, with the Capital Securities of the Trust, except that upon
the occurrence and during the continuance of a Declaration Event of Default
(as defined herein) with respect to the Trust, the rights of the holders of
the Common Securities of the Trust to receive payment of periodic
distributions and payments upon liquidation, redemption and otherwise will be
subordinated to the rights of the holders of the Capital Securities of the
Trust. The Declaration does not permit the issuance by the Trust of any
securities other than the Trust Securities in respect of the Trust or the
incurrence of any indebtedness by the Trust. Pursuant to the Declaration of
Trust, the Institutional Trustee holds legal title to the Subordinated Debt
Securities purchased by the Trust for the benefit of the holders of the Trust
Securities of the Trust. The payment of distributions out of money held by the
Trust, and payments upon redemption of the Capital Securities of the Trust
upon liquidation of the Trust, are guaranteed by the Company as described
under "Description of the Guarantee." The Guarantee is held by The Chase
Manhattan Bank, the Guarantee Trustee, for the benefit of the holders of the
Capital Securities. The Guarantee does not cover payment of distributions in
respect of Capital Securities of the Trust to the extent the Trust does not
have available funds to pay such distributions. In such event, the remedy of
holders of such Capital Securities would be, through the vote of holders of a
majority in liquidation amount of such Capital Securities, to direct the
Institutional Trustee to enforce the Institutional Trustee's rights under the
Subordinated Debt Securities held by the Trust except in the circumstances in
which a holder of such Capital Securities may take Direct Action. See "--
Voting Rights" and "--Declaration Events of Default."
DISTRIBUTIONS
Distributions on the Capital Securities is fixed at a rate per annum of
7.65% of the stated liquidation amount of $1,000 per Capital Security. Except
as set forth below in respect of an Extension Period, distributions in arrears
for more than one semiannual period will accrue on the Capital
34
<PAGE>
Securities at the distribution rate per annum of 7.65%, compounded
semiannually to the extent permitted by law. The term "distribution" as used
herein includes cash distributions and any such compounded distributions
payable unless otherwise stated. The amount of distributions payable for any
period will be computed on the basis of a 360-day year of twelve 30-day months
and the actual number of days elapsed per 30-day month.
Distributions on the Capital Securities are cumulative, accrue from December
9, 1996, the date of issuance of the Old Capital Securities, and will be
payable (subject to extension of distribution payment periods as described
herein) semiannually in arrears on June 1 and December 1 of each year (each, a
"Distribution Payment Date"), commencing June 1, 1997, when, as and if
available for payment. Distributions will be made by the Institutional
Trustee, except as otherwise described below.
The Company has the right under the Indenture to defer payments of interest
on the Subordinated Debt Securities by extending the interest payment period
at any time and from time to time, subject to the conditions described below.
If such right is exercised, semiannual distributions on the Capital Securities
will also be deferred (though such distributions would continue to accrue at
the distribution rate of 7.65% per annum compounded semiannually (to the
extent permitted by law) since interest would continue to accrue on the
Subordinated Debt Securities at a rate of 7.65% per annum, compounded
semiannually to the extent permitted by law) during any Extension Period. Such
right to extend any interest payment period for the Subordinated Debt
Securities is limited to Extension Periods, each not exceeding 10 consecutive
semiannual periods, and no Extension Period may be initiated while accrued
interest from a prior, completed Extension Period is unpaid or while the
Company is in default on the payment of interest that has become due and
payable on the Subordinated Debt Securities, and no Extension Period may
extend beyond the maturity of the Subordinated Debt Securities. In the event
that the Company exercises this right, then during any Extension Period (a)
the Company shall not declare or pay dividends on, make a distribution with
respect to, or redeem, purchase or acquire, or make a liquidation payment with
respect to, any of its capital stock or rights to acquire such capital stock
(other than (i) purchases or acquisitions of shares of any such capital stock
or rights to acquire such capital stock in connection with the satisfaction by
the Company of its obligations under any employee benefit plans, (ii) as a
result of a reclassification of the Company's capital stock or rights to
acquire such capital stock or the exchange or conversion of one class or
series of the Company's capital stock or rights to acquire such capital stock
for another class or series of the Company's capital stock or rights to
acquire such capital stock, (iii) the purchase of fractional interests in
shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged
or (iv) dividends and distributions made on the Company's capital stock or
rights to acquire such capital stock with the Company's capital stock or
rights to acquire such capital stock) or make guarantee payments with respect
to the foregoing, and (b) the Company shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities issued by the Company that rank pari passu with or junior to the
Subordinated Debt Securities. Prior to the termination of any such Extension
Period in respect of the Subordinated Debt Securities, the Company may further
extend the interest payment period; provided that each such Extension Period
in respect of the Subordinated Debt Securities, together with all such
previous and further extensions thereof, may not exceed 10 consecutive
semiannual periods or extend beyond the maturity of the Subordinated Debt
Securities. Upon the termination of any Extension Period in respect of the
Subordinated Debt Securities and the payment of all amounts then due, the
Company may commence a new Extension Period, subject to the above
requirements. See "Description of the Subordinated Debt Securities--Interest"
"--Option to Extend Interest Payment Period" and "Certain Covenants." If
distributions are deferred, the distributions due shall be paid on the date
that the related Extension Period terminates, or, if such date is not a
Distribution Payment Date, on the immediately following Distribution Payment
Date, to holders of applicable Capital Securities as they appear on the books
and records of the Trust on the record date immediately preceding such date.
35
<PAGE>
Distributions on the Capital Securities must be paid on the dates payable
(after giving effect to any Extension Period) to the extent that the Trust has
funds available for the payment of such distributions in the Property Account
of the Trust. The Trust's funds available for distribution to the holders of
the Capital Securities issued by the Trust will be limited to payments
received from the Company on the Subordinated Debt Securities. See
"Description of the Subordinated Debt Securities." The payment of
distributions out of moneys held by the Trust is guaranteed by the Company to
the extent set forth under "Description of the Guarantee."
Distributions on the Capital Securities will be payable to the holders
thereof as they appear on the books and records of the Trust on the relevant
record dates, which, as long as the Capital Securities are held in book-entry
only form, will be one Business Day (as defined below) prior to the relevant
payment dates. Such distributions will be paid through the Institutional
Trustee who will hold amounts received in respect of the Subordinated Debt
Securities in the Property Account of the Trust for the benefit of the holders
of the Trust Securities. Subject to any applicable laws and regulations and
the provisions of the Declaration, each such payment will be made as described
under "--Book-Entry Only Issuance--The Depository Trust Company" below. At any
time when the Capital Securities are not held solely in book-entry only form,
the Regular Trustees shall select record dates, which shall be 15 days prior
to the relevant payment date. In the event that any date on which
distributions are to be made on the Capital Securities is not a Business Day,
then payment of the distributions payable on such date will be made on the
next succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay) with the same force and effect as if
made on such payment date. A "Business Day" shall mean any day other than
Saturday, Sunday or any other day on which banking institutions in New York
City (in the State of New York) are permitted or required by any applicable
law to close.
REDEMPTION
The Subordinated Debt Securities will mature on December 1, 2026 and may be
redeemed by the Company at par, together with accrued and unpaid interest
thereon to the date of redemption, in whole or in part, at any time in certain
circumstances upon the occurrence of a Tax Event. In addition, the
Subordinated Debt Securities may be redeemed by the Company, in whole or in
part, at any time and from time to time on or after December 1, 2006 (the
"Optional Redemptions"), other than upon the occurrence of a Tax Event, at the
call prices (expressed as a percentage of the principal amount) expressed
below:
<TABLE>
<CAPTION>
IF REDEEMED DURING THE 12-MONTH
PERIOD BEGINNING, DECEMBER 1, CALL PRICE
------------------------------- ----------
<S> <C>
2006 103.5820%
2007 103.2238
2008 102.8656
2009 102.5074
2010 102.1492
2011 101.7910
2012 101.4328
2013 101.0746
2014 100.7164
2015 100.3582
</TABLE>
and at 100% of the principal amount on or after December 1, 2016 (each a "Call
Price"), together, in each case, with accrued and unpaid interest thereon to
the date of redemption. In each case, the right of the Company to redeem the
Subordinated Debt Securities is subject to receipt of prior approval by the
Federal Reserve if then required under applicable capital guidelines or
policies of the Federal Reserve.
36
<PAGE>
Upon the repayment in full at maturity or redemption in whole or in part of
the Subordinated Debt Securities (other than following the distribution of the
Subordinated Debt Securities to the holders of the Trust Securities), the
proceeds from such repayment or payment shall simultaneously be applied to
redeem on a pro rata basis at the Redemption Price, Trust Securities of the
Trust having an aggregate liquidation amount equal to the aggregate principal
amount of the Subordinated Debt Securities so repaid or redeemed; provided,
however, that holders of such Trust Securities shall be given not less than 30
nor more than 60 days' notice of such redemption (other than at the scheduled
maturity of the Subordinated Debt Securities). See "Description of the
Subordinated Debt Securities--Redemption." In the event that fewer than all of
the outstanding Capital Securities are to be redeemed, such Capital Securities
will be redeemed in accordance with the procedures of DTC (as defined herein)
as described under "--Book-Entry Only Issuance--The Depository Trust Company"
below.
TAX EVENT REDEMPTION
"Tax Event" means that the Regular Trustees of the Trust shall have received
an opinion of a nationally recognized independent tax counsel to the Company
experienced in such matters to the effect that, as a result of (a) any
amendment to, clarification of or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United States or
any political subdivision or taxing authority thereof or therein, (b) any
judicial decision or official administrative pronouncement, ruling, regulatory
procedure, notice or announcement, including any notice or announcement of
intent to adopt such procedures or regulations (an "Administrative Action") or
(c) any amendment to, clarification of or change in the administrative
position or interpretation of any Administrative Action or judicial decision
that differs from the theretofore generally accepted position, in each case,
by any legislative body, court, governmental agency or regulatory body,
irrespective of the manner in which such amendment, clarification or change is
made known, which amendment, clarification or change is effective or such
Administrative Action or decision is announced, in each case, on or after
December 2, 1996, there is more than an insubstantial risk that (i) the Trust
is, or will be within 90 days of the date thereof, subject to United States
federal income tax with respect to interest accrued or received on the
Subordinated Debt Securities held by the Trust or subject to more than a de
minimis amount of other taxes, duties or other governmental charges, (ii) any
portion of interest payable by the Company to the Trust on the Subordinated
Debt Securities is not, or within 90 days of the date thereof will not be,
deductible by the Company for United States federal income tax purposes, or
(iii) the Company could become liable to pay, on the next date on which any
amount would be payable with respect to the Subordinated Debt Securities, any
Additional Interest (as defined herein).
If, at any time, a Tax Event in respect of the Trust shall occur and be
continuing, and the Company receives an opinion (a "Redemption Tax Opinion")
of nationally recognized independent tax counsel experienced in such matters
that, as a result of such Tax Event in respect of the Trust, there is more
than an insubstantial risk that the Company would be precluded from deducting
the interest on the Subordinated Debt Securities held by the Institutional
Trustee for United States federal income tax purposes, even if the
Subordinated Debt Securities were distributed to the holders of Trust
Securities in liquidation of such holders' interests in the Trust (as
described in "--Liquidation Distribution Upon Dissolution" below), the Company
shall have the right at any time, subject to receipt of prior approval by the
Federal Reserve if then required under applicable capital guidelines or
policies of the Federal Reserve, within 90 days following the occurrence of
such Tax Event, upon not less than 30 nor more than 60 days' notice, to redeem
the Subordinated Debt Securities held by the Institutional Trustee, in whole
or in part, for cash so long as such Tax Event is continuing at their full
principal amounts plus any accrued and unpaid interest thereon to the dates of
redemption (the "Tax Event Redemption"), and, following such redemption, Trust
Securities of the Trust with an aggregate liquidation amount equal to the
aggregate principal amount of the Subordinated Debt Securities so redeemed
shall be redeemed by the Trust at the applicable Redemption Price; provided,
however, that (i) if at the time
37
<PAGE>
there is available to the Company or the Trust the opportunity to eliminate,
within such 90-day period the adverse effects of the Tax Event by taking some
ministerial action, such as filing a form or making an election or pursuing
some other similar reasonable measure that will have no adverse effect on the
Trust, the Company or the holders of the Trust Securities and (ii) if such
notice has not been given, the Company or the Trust will pursue such measure
in lieu of redemption.
REDEMPTION PROCEDURES
The Trust may not redeem fewer than all of the outstanding Capital
Securities issued by the Trust unless all accrued and unpaid distributions
have been paid on all such Capital Securities for all semiannual distribution
periods terminating on or prior to the date of redemption.
If the Trust gives a notice of redemption, which notice will be irrevocable,
in respect of Capital Securities issued by the Trust, and held in book entry
form, by 12:00 noon, New York City time, on the redemption date, provided that
the Company has paid to the Institutional Trustee a sufficient amount of cash
in connection with the related redemption or maturity of the Subordinated Debt
Securities, the Institutional Trustee will irrevocably deposit with the
Depositary or its nominee funds sufficient to pay the applicable Redemption
Price and will give the Depositary irrevocable instructions and authority to
pay such Redemption Price to the holders of such Capital Securities. See "--
Book-Entry Only Issuance--The Depository Trust Company." If notice of
redemption shall have been given and funds deposited as required, then,
immediately prior to the close of business on the date of such deposit,
distributions will cease to accrue on the Capital Securities so called for
redemption and all rights of holders of such Capital Securities so called for
redemption will cease, except the right of the holders of such Capital
Securities to receive the applicable Redemption Price but without interest on
such Redemption Price. In the event that any date fixed for redemption of
Capital Securities is not a Business Day, then payment of the Redemption Price
payable on such date will be made on the next succeeding day that is a
Business Day (without any interest or other payment in respect of any such
delay), except that, if such Business Day falls in the next calendar year,
such payment will be made on the immediately preceding Business Day. In the
event that payment of the Redemption Price in respect of Capital Securities is
improperly withheld or refused and not paid by the Institutional Trustee, or
by the Company pursuant to the Guarantee, distributions on such Capital
Securities will continue to accrue at the then applicable rate from the
original redemption date to the actual date of payment, in which case the
actual payment date will be considered the date fixed for redemption for
purposes of calculating the Redemption Price.
In the event that fewer than all of the outstanding Capital Securities
issued by the Trust are to be redeemed, Capital Securities will be redeemed in
accordance with the procedures of DTC as described below under "--Book-Entry
Only Issuance--The Depository Trust Company."
In the event of any redemption of Capital Securities issued by the Trust in
part, the Trust shall not be required to (i) issue, register the transfer of
or exchange any Certificated Security (as defined herein) during a period
beginning at the opening of business 15 days before any selection for
redemption of Capital Securities and ending at the close of business on the
earliest date on which the relevant notice of redemption is deemed to have
been given to all holders of Capital Securities to be so redeemed or (ii)
register the transfer of or exchange any Certificated Securities so selected
for redemption, in whole or in part, except for the unredeemed portion of any
Certificated Securities being redeemed in part.
Subject to the foregoing and applicable law (including, without limitation,
United States federal securities laws), provided the acquiror is not the
holder of the Common Securities or the obligor under the Subordinated Debt
Securities, the Company or its subsidiaries may at any time, and from time to
time, purchase outstanding Capital Securities by tender, in the open market or
by private agreement.
38
<PAGE>
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
Pursuant to the Declaration, the Trust shall dissolve (i) on December 31,
2051, the expiration of the term of the Trust, (ii) upon the bankruptcy of the
Company, (iii) (other than in connection with a merger, consolidation or
similar transaction not prohibited by the Indenture, the Declaration or the
Guarantee, as the case may be) upon the filing of a certificate of dissolution
or its equivalent with respect to the Company, upon the consent of the holders
of at least a majority in liquidation amount of the Trust Securities issued by
Trust voting together as a single class to file a certificate of cancellation
with respect to the Trust, or upon the revocation of the charter of the
Company and the expiration of 90 days after the date of revocation without a
reinstatement thereof, (iv) upon exercise of the right of the holder of all of
the outstanding Common Securities of the Trust to dissolve the Trust as
described below, (v) upon the entry of a decree of a judicial dissolution of
the Company or the Trust, or (vi) upon the redemption of all of the Trust
Securities issued by the Trust. Pursuant to the Declaration, as soon as
practicable after the dissolution of the Trust and upon completion of the
winding up of the Trust, the Trust shall terminate upon the filing of a
certificate of cancellation.
In the event of any voluntary or involuntary dissolution of the Trust (each
a "Dissolution Event") other than in connection with a redemption of the
Subordinated Debt Securities as previously described, the holders of the
Capital Securities issued by the Trust will be entitled to receive out of the
assets of the Trust, after satisfaction of liabilities to creditors of the
Trust (to the extent not satisfied by the Company), distributions in an amount
equal to the aggregate of the stated liquidation amount of $1,000 per Capital
Security (the "Liquidation Amount") plus accrued and unpaid distributions
thereon to the date of payment (the "Liquidation Distribution"), unless, in
connection with such Dissolution Event, Subordinated Debt Securities in an
aggregate stated principal amount equal to the aggregate stated liquidation
amount of, with identical premium to, if any, with an interest rate identical
to the distribution rate of, and bearing accrued and unpaid interest equal to
accrued and unpaid distributions on, such Capital Securities have been
distributed on a pro rata basis to the holders of such Capital Securities in
exchange for such Capital Securities as is required under certain
circumstances as described below. Upon any Dissolution Event in connection
with which the Subordinated Debt Securities are distributed, if at the time of
such Dissolution Event the Capital Securities are rated by at least one
nationally recognized statistical rating organization, the Company will use
its best efforts to obtain from at least one nationally recognized statistical
rating organization a rating for the Subordinated Debt Securities.
The Company, as the holder of all of the Common Securities, has the right at
any time to dissolve the Trust (including but not limited to the occurrence of
a Tax Event), subject to certain conditions, with the result that, after
satisfaction of liabilities to creditors of the Trust (to the extent not
satisfied by the Company), unless the Subordinated Debt Securities held by the
Trust are redeemed in the circumstances described herein, the Subordinated
Debt Securities would be distributed to the holders of the Trust Securities in
liquidation of the holders' interests in the Trust on a pro rata basis in
accordance with its aggregate stated liquidation amount thereof, in
liquidation of the Trust.
If an early dissolution occurs as described in clause (i), (ii), (iii) or
(v), the Trust shall be liquidated by the M&I Trustees as expeditiously as
such M&I Trustees determine to be possible by distributing, after satisfaction
of liabilities to creditors of the Trust, to the holders of the Trust
Securities, the Subordinated Debt Securities, unless such distribution is
determined by the Institutional Trustee not to be practical, in which event
such holders will be entitled to receive out of the assets of the Trust
available for distribution to holders, after satisfaction of liabilities to
creditors of the Trust, an amount equal to the Liquidation Distribution. An
early dissolution of the Trust pursuant to clause (iv) above shall occur only
if the M&I Trustees determine that such liquidation is possible by
distributing, after satisfaction of liabilities to creditors of the Trust, to
the holders of the Trust Securities issued by the Trust, the Subordinated Debt
Securities, and such distribution occurs.
39
<PAGE>
If, upon any such Dissolution Event, the Liquidation Distribution can be
paid only in part because the Trust has insufficient assets available to pay
in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on such Capital Securities shall be paid on a pro rata
basis. The holders of the Common Securities issued by the Trust will be
entitled to receive distributions upon any such Dissolution Event pro rata
with the holders of such Capital Securities, except that if a Declaration
Event of Default has occurred and is continuing in respect of the Trust, the
Capital Securities shall have a preference over the Common Securities with
regard to such distributions.
After the date for any distribution of Subordinated Debt Securities upon
dissolution of the Trust, (i) the Trust Securities of the Trust will be deemed
to be no longer outstanding, (ii) the Depositary (as defined herein) or its
nominee, as the record holder of the Capital Securities, will receive a
registered Global Certificate (as defined herein) or Certificates representing
the Subordinated Debt Securities to be delivered upon such distribution, and
(iii) any certificates representing Capital Securities not held by the
Depositary or its nominee will be deemed to represent undivided beneficial
interests in such of the Subordinated Debt Securities as have an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the distribution rate of, and bearing accrued and
unpaid interest equal to accrued and unpaid distributions on, such Capital
Securities until such certificates are presented to the Company or its agent
for transfer or reissuance.
There can be no assurance as to the market prices for either the Capital
Securities or the Subordinated Debt Securities that may be distributed in
exchange for the Capital Securities if a dissolution and liquidation of the
Trust were to occur. Accordingly, the Capital Securities that an investor may
purchase, whether in the secondary market or otherwise, or the Subordinated
Debt Securities that an investor may receive if a dissolution and liquidation
of the Trust were to occur, may trade at a discount to the price paid to
purchase the Capital Securities.
DECLARATION EVENTS OF DEFAULT
An event of default under the Indenture in respect of the Subordinated Debt
Securities issued to the Trust (an "Indenture Event of Default") constitutes
an event of default under the Declaration of Trust with respect to the Trust
Securities issued by the Trust (each a "Declaration Event of Default");
provided, that pursuant to the Declaration of Trust, the holder of the Common
Securities of the Trust will be deemed to have waived any Declaration Event of
Default with respect to such Common Securities until all Declaration Events of
Default with respect to the Capital Securities of the Trust have been cured,
waived or otherwise eliminated. Until such Declaration Events of Default with
respect to such Capital Securities have been so cured, waived, or otherwise
eliminated, the Institutional Trustee will be deemed to be acting solely on
behalf of the holders of the Capital Securities of the Trust and only the
holders of such Capital Securities will have the right to direct the
Institutional Trustee with respect to certain matters under the Declaration,
and therefore the Indenture. The holders of a majority in liquidation amount
of the Capital Securities of the Trust will have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Institutional Trustee or to direct the exercise of any trust or power
conferred upon the Institutional Trustee Trust under the Declaration,
including the right to direct the Institutional Trustee to exercise the
remedies available to it as holder of the Subordinated Debt Securities. If the
Institutional Trustee fails to enforce its rights under the Subordinated Debt
Securities after the holders of a majority in liquidation amount of such
Capital Securities have so directed the Institutional Trustee, to the fullest
extent permitted by law. a holder of record of such Capital Securities may
institute a legal proceeding against the Company to enforce the Institutional
Trustee's rights under the Subordinated Debt Securities without first
instituting any legal proceeding against the Institutional Trustee or any
other person or entity. Notwithstanding the foregoing, if a Declaration Event
of Default relating to Capital Securities of the Trust has occurred and is
continuing and such event is attributable to the failure of the Company to pay
interest or principal (or premium, if any) on the Subordinated Debt Securities
issued to the Trust on the respective dates such interest or principal (or
premium, if any) is payable (or in the case of redemption, the
40
<PAGE>
redemption date), then a holder of record of such Capital Securities may
institute a Direct Action against the Company for payment, on or after the
respective due dates specified in the Subordinated Debt Securities, to such
holder directly of the principal of (or premium, if any) or interest on
Subordinated Debt Securities having an aggregate principal amount equal to the
aggregate liquidation amount of the Capital Securities of such holder. In
connection with such Direct Action, the Company will be subrogated to the
rights of such holder of Capital Securities under the applicable Declaration
to the extent of any payment made by the Company to such holder of Capital
Securities in such Direct Action; provided, however, that no such subrogation
right may be exercised so long as a Declaration Event of Default has occurred
and is continuing. The holders of Capital Securities will not be able to
exercise directly any other remedy available to the holders of the
Subordinated Debt Securities.
Upon the occurrence of a Declaration Event of Default relating to Capital
Securities of the Trust, the Institutional Trustee, so long as it is the sole
holder of the Subordinated Debt Securities issued to the Trust, will have the
right under the Indenture to declare the principal of (or premium, if any) and
interest on the Subordinated Debt Securities to be immediately due and
payable. The Company and the Trust are each required to file annually with the
Institutional Trustee an officer's certificate as to its compliance with all
conditions and covenants under the Declaration.
VOTING RIGHTS
Except as described herein, under the Trust Act and under "Description of
the Guarantee--Modification of the Guarantee; Assignment", and as otherwise
required by law and the Declaration, the holders of the Capital Securities
will have no voting rights. The Regular Trustees of the Trust are required to
call a meeting of the holders of the Capital Securities of the Trust if
directed to do so by holders of at least 10% in aggregate liquidation amount
thereof.
Subject to the requirements set forth in this paragraph, the holders of a
majority in aggregate liquidation amount of the Capital Securities of the
Trust have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Institutional Trustee, or
exercising any trust or power conferred upon such Institutional Trustee under
the Declaration, including the right to direct such Institutional Trustee, as
holder of the Subordinated Debt Securities, to (i) exercise the remedies
available to it under the Indenture as a holder of the Subordinated Debt
Securities, (ii) waive any past default that is waivable under the Indenture,
(iii) exercise any right to rescind or annul a declaration that the principal
of all the Subordinated Debt Securities shall be due and payable or (iv)
consent on behalf of all the holders of the Capital Securities of the Trust to
any amendment, modification or termination of the Indenture or the
Subordinated Debt Securities where such consent shall be required; provided,
however, that where a consent or action under the Indenture would require the
consent or act of holders of more than a majority in principal amount of the
Subordinated Debt Securities (a "Super-Majority") affected thereby, the
Institutional Trustee may only give such consent or take such action at the
written direction of the holders of at least the proportion in aggregate
liquidation amount of the Capital Securities outstanding which the relevant
Super-Majority represents of the aggregate principal amount of the
Subordinated Debt Securities outstanding. If the Institutional Trustee fails
to enforce its rights under the Subordinated Debt Securities after the holders
of a majority in liquidation amount of such Capital Securities have so
directed the Institutional Trustee, to the extent permitted by law, a holder
of record of the Capital Securities may institute a legal proceeding directly
against the Company to enforce the Institutional Trustee's rights under the
Subordinated Debt Securities without first instituting any legal proceeding
against the Institutional Trustee or any other person or entity.
Notwithstanding the foregoing, if a Declaration Event of Default relating to
the Capital Securities of the Trust has occurred and is continuing and such
event is attributable to the failure of the Company to pay interest or
principal (or premium if any) on the Subordinated Debt Securities on the
respective dates such interest or principal is payable (or in the case of
redemption, the redemption date) then a holder of record of Capital Securities
of the Trust may directly institute a proceeding for enforcement of payment,
on or after the respective due dates specified in the Subordinated Debt
41
<PAGE>
Securities, to such holder directly of the principal of (or premium, if any)
or interest on the Subordinated Debt Securities having an aggregate principal
amount equal to the aggregate liquidation amount of the Capital Securities of
such holder. The Institutional Trustee shall notify all holders of the Capital
Securities of the Trust of any default actually known to the Institutional
Trustee with respect to the Subordinated Debt Securities unless (x) such
defaults have been cured prior to the giving of such notice or (y) the
Institutional Trustee determines in good faith that the withholding of such
notice is in the interest of the holders of such Capital Securities, except
where the default relates to the payment of interest or principal of (or
premium, if any) on any of the Subordinated Debt Securities. Such notice shall
state that such Indenture Event of Default also constitutes a Declaration
Event of Default. Except with respect to directing the time, method and place
of conducting a proceeding for a remedy, the Institutional Trustee shall not
take any of the actions described in clauses (i), (ii) or (iii) above unless
the Institutional Trustee has obtained an opinion of tax counsel to the effect
that, as a result of such action, the Trust will not be classified as other
than a grantor trust for United States federal income tax purposes.
In the event the consent of the Institutional Trustee, as the holder of the
Subordinated Debt Securities, is required under the Indenture with respect to
any amendment, modification or termination of the Indenture, such
Institutional Trustee shall request the direction of the holders of the Trust
Securities of the Trust with respect to such amendment, modification or
termination and shall vote with respect to such amendment, modification or
termination as directed by a majority in liquidation amount of such Trust
Securities voting together as a single class; provided, however, that where a
consent under the Indenture would require the consent of a Super-Majority, the
Institutional Trustee may only give such consent at the direction of the
holders of at least the proportion in liquidation amount of such Trust
Securities outstanding which the relevant Super-Majority represents of the
aggregate principal amount of the Subordinated Debt Securities outstanding.
The Institutional Trustee shall not take any such action in accordance with
the directions of the holders of such Trust Securities unless the
Institutional Trustee has obtained an opinion of tax counsel to the effect
that, as a result of such action, the Trust will not be classified as other
than a grantor trust for United States federal income tax purposes.
A waiver of an Indenture Event of Default will constitute a waiver of the
corresponding Declaration Event of Default.
Any required approval or direction of holders of Capital Securities of the
Trust may be given at a separate meeting of such holders convened for such
purpose, at a meeting of all of the such holders of Trust Securities of the
Trust or pursuant to written consent. The Regular Trustees of the Trust will
cause a notice of any meeting at which holders of Capital Securities of the
Trust are entitled to vote, or of any matter upon which action by written
consent of such holders is to be taken, to be mailed to each holder of record
of such Capital Securities. Each such notice will include a statement setting
forth the following information: (i) the date of such meeting or the date by
which such action is to be taken; (ii) a description of any resolution
proposed for adoption at such meeting on which such holders are entitled to
vote or of such matter upon which written consent is sought; and (iii)
instructions for the delivery of proxies or consents. No vote or consent of
the holders of Capital Securities of the Trust will be required for such Trust
to redeem and cancel such Capital Securities or distribute the Subordinated
Debt Securities in accordance with the Declaration.
Notwithstanding that holders of Capital Securities are entitled to vote or
consent under any of the circumstances described above, any of the Capital
Securities that are owned at such time by the Company or any entity directly
or indirectly controlling or controlled by, or under direct or indirect common
control with, the Company, shall not entitle the holders thereof to vote or
consent and shall, for purposes of such vote or consent, be treated as if such
Capital Securities were not outstanding.
The procedures by which holders of Capital Securities may exercise their
voting rights are described below. See "--Book-Entry Only Issuance--The
Depository Trust Company" below.
42
<PAGE>
Holders of the Capital Securities will have no rights to appoint or remove
the M&I Trustees, who may be appointed, removed or replaced solely by the
Company as the holder of all of the Common Securities of the Trust.
MODIFICATION OF THE DECLARATION
The Declaration with respect to the Trust may be amended without the consent
of the holders of the Trust Securities of the Trust to: (i) cure any
ambiguity; (ii) correct or supplement any provision in such Declaration that
may be defective or inconsistent with any other provision of such Declaration;
(iii) add to the covenants, restrictions or obligations of the Company; (iv)
conform to any change in Rule 3a-5 under the Investment Company Act of 1940,
as amended (the "1940 Act"), or a written change in interpretation or
application of Rule 3a-5 by any legislative body, court, government agency or
regulatory authority, which amendment does not have a material adverse effect
on the rights, preferences or privileges of the holders of such Trust
Securities; and (v) modify, eliminate and add to any provision of such
Declaration, provided, that no such modification, elimination or addition
shall adversely affect the powers, preferences or special rights of the
holders of such Trust Securities.
In addition, the Declaration with respect to the Trust may be modified and
amended if approved by the Regular Trustees of the Trust (and in certain
circumstances the Institutional Trustee and the Delaware Trustee), provided
that, if any proposed amendment provides for, or such Regular Trustees
otherwise propose to effect, (i) any action that would adversely affect the
powers, preferences or special rights of the Trust Securities of the Trust,
whether by way of amendment to the Declaration or otherwise or (ii) the
dissolution, winding-up or termination of the Trust other than pursuant to the
terms of the Declaration, then the holders of such Trust Securities voting
together as a single class will be entitled to vote on such amendment or
proposal and such amendment or proposal shall not be effective except with the
approval of the holders of at least a majority in liquidation amount of the
Trust Securities affected thereby; provided, that if any amendment or proposal
referred to in clause (i) above would adversely affect only the Capital
Securities or only the Common Securities of the Trust, then only the affected
class will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval of a
majority in liquidation amount of such class of Trust Securities.
Notwithstanding the foregoing, no amendment or modification may be made to
the Declaration if such amendment or modification would (i) cause the Trust to
be classified for purposes of United States federal income taxation as other
than a grantor trust, (ii) reduce or otherwise adversely affect the powers of
the Institutional Trustee or (iii) cause the Trust to be deemed an "investment
company" which is required to be registered under the 1940 Act.
Notwithstanding any provision of the Declaration, the provisions of Section
316(b) of the Trust Indenture Act incorporated by reference into the Indenture
provides that the right of any holder of Capital Securities to receive
payments of distributions and other payments upon redemption or otherwise on
or after their respective due dates, or to institute suit for the enforcement
of any such payment on or after such respective dates, shall not be impaired
or affected without the consent of such holder.
MERGERS, CONSOLIDATIONS OR AMALGAMATIONS
The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any corporation or other body, except as
described below. The Trust may, with the consent of a majority of the Regular
Trustees of the Trust and without the consent of the holders of the Trust
Securities of the Trust, the Institutional Trustee or the Delaware Trustee,
consolidate, amalgamate, merge with or into, or be replaced by, a trust
organized as such under the laws of any State of the United States; provided
that (i) if the Trust
43
<PAGE>
is not the survivor, such successor entity either (x) expressly assumes all of
the obligations of the Trust under Trust Securities issued by the Trust or (y)
substitutes for the Trust Securities other securities having substantially the
same terms as the Trust Securities (the "Successor Securities"), so that the
Successor Securities rank the same as the Trust Securities rank with respect
to distributions and payments upon liquidation, redemption and otherwise, (ii)
the Company expressly acknowledges a trustee of such successor entity
possessing the same powers and duties as the Institutional Trustee as the
holder of the Subordinated Debt Securities, (iii) the Capital Securities of
the Trust or any Successor Securities are listed, or any Successor Securities
will be listed upon notification of issuance, on any national securities
exchange or with another organization on which such Capital Securities are
then listed or quoted, if any, (iv) such merger, consolidation, amalgamation
or replacement does not cause the Capital Securities (including any Successor
Securities) to be downgraded by any nationally recognized statistical rating
organization, (v) such merger, consolidation, amalgamation or replacement does
not adversely affect the rights, preferences and privileges of the holders of
such Trust Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of the holders' interest in
such successor entity), (vi) such successor entity has a purpose substantially
identical to that of the Trust, (vii) prior to such merger, consolidation,
amalgamation or replacement, the Company has received an opinion of a
nationally recognized independent counsel to the Trust experienced in such
matters to the effect that (A) (based on certain assumptions) such merger,
consolidation, amalgamation or replacement does not adversely affect the
rights, preferences and privileges of the holders of the Trust Securities
(including any Successor Securities) in any material respect (other than with
respect to any dilution of the holders' interest in such successor entity),
(B) following such merger, consolidation, amalgamation or replacement, neither
the Trust nor such successor entity will be required to register as an
investment company under the 1940 Act and (C) following such merger,
consolidation, amalgamation or replacement, neither the Trust nor such
successor entity will be classified as other than a grantor trust for United
States federal income tax purposes, and (viii) the Company guarantees the
obligations of such successor entity under the Successor Securities at least
to the extent provided by the applicable Guarantee. Notwithstanding the
foregoing, the Trust shall not, except with the consent of holders of 100% in
liquidation amount of the Trust Securities of the Trust, consolidate,
amalgamate, merge with or into, or be replaced by, any other entity or permit
any other entity to consolidate, amalgamate, merge with or into, or replace
it, if such consolidation, amalgamation, merger or replacement would cause the
Trust or the successor entity to be classified as other than a grantor trust
for United States federal income tax purposes.
BOOK-ENTRY ONLY ISSUANCE--THE DEPOSITORY TRUST COMPANY
The description of book-entry procedures in this Prospectus includes
summaries of certain rules and operating procedures of The Depository Trust
Company ("DTC") that affect transfers of interests in the global certificate
or certificates issued in connection with sales of Capital Securities. Except
as described in the next paragraph, the Capital Securities will be issued only
as fully registered securities registered in the name of Cede & Co. (as
nominee for DTC). One or more fully registered global Capital Security
certificates (the "Global Certificates") will be issued, representing, in the
aggregate, the New Capital Securities, and will be deposited with DTC.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of securities in definitive form. Such laws may impair
the ability to transfer beneficial interests in the global Capital Securities
as represented by a Global Certificate.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited
44
<PAGE>
securities through electronic computerized book-entry changes in Participants'
accounts, thereby eliminating the need for physical movement of securities
certificates. Participants in DTC include securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations
("Direct Participants"). DTC is owned by a number of its Direct Participants
and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc.,
and the National Association of Securities Dealers, Inc. Access to the DTC
system is also available to others, such as securities brokers and dealers,
banks and trust companies that clear transactions through or maintain a
custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The rules applicable to DTC and its
Participants are on file with the Securities and Exchange Commission.
Purchases of Capital Securities within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Capital
Securities on DTC's records. The ownership interest of each actual purchaser
of each Capital Security ("Beneficial Owner") is in turn to be recorded on the
Direct Participants' and Indirect Participants' records. Beneficial Owners
will not receive written confirmation from DTC of their purchases, but
Beneficial Owners are expected to receive written confirmations providing
details of the transactions, as well as periodic statements of their holdings,
from the Direct or Indirect Participants through which the Beneficial Owners
purchased Capital Securities. Transfers of ownership interests in the Capital
Securities are to be accomplished by entries made on the books of Participants
acting on behalf of Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interests in the Capital Securities,
except in the event that use of the book-entry system for the Capital
Securities is discontinued.
To facilitate subsequent transfers, all the Capital Securities deposited by
Participants with DTC will be registered in the name of DTC's nominee, Cede &
Co. The deposit of Capital Securities with DTC and their registration in the
name of Cede & Co. will effect no change in beneficial ownership. DTC will
have no knowledge of the actual Beneficial Owners of the Capital Securities.
DTC's records will reflect only the identity of the Direct Participants to
whose accounts such Capital Securities are credited, which may or may not be
the Beneficial Owners. The Direct Participants and Indirect Participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
So long as DTC, or its nominee, is the registered owner or holder of a
Global Certificate in respect of the Capital Securities, DTC or such nominee,
as the case may be, will be considered the sole owner or holder of the Capital
Securities represented thereby for all purposes under the Declaration in
respect of such Capital Securities and such Capital Securities. No Beneficial
Owner of an interest in a Global Certificate will be able to transfer that
interest except in accordance with DTC's applicable procedures.
DTC has advised the Company that it will take any action permitted to be
taken by a holder of Capital Securities (including the presentation of Capital
Securities for exchange as described below) only at the direction of one or
more Participants to whose accounts the DTC interests in the Global
Certificates are credited and only in respect of such portion of the aggregate
liquidation amount of Capital Securities as to which such Participant or
Participants has or have given such direction. However, if there is a
Declaration Event of Default with respect to the Capital Securities, DTC will,
upon notice, exchange the Global Certificates in respect of such Capital
Securities for certificated securities, which it will distribute to its
Participants.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed
by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices in respect of the Capital Securities held in book-entry
form will be sent to Cede & Co. If less than all of the Capital Securities are
being redeemed, DTC's practice is to determine by lot the amount of the
interest of each Direct Participant to be redeemed.
45
<PAGE>
Although voting with respect to the Capital Securities is limited, in those
cases where a vote is required, neither DTC nor Cede & Co. will itself consent
or vote with respect to Capital Securities. Under its usual procedures, DTC
would mail an omnibus proxy to the Trust as soon as possible after the record
date. The omnibus proxy assigns Cede & Co.'s consenting or voting rights to
those Direct Participants to whose accounts the Capital Securities are
credited on the record date (identified in a listing attached to the omnibus
proxy).
Distributions on the Capital Securities held in book-entry form will be made
to DTC in immediately available funds. DTC's practice is to credit Direct
Participants' accounts on the relevant payment date in accordance with their
respective holdings shown on DTC's records unless DTC has reason to believe
that it will not receive payments on such payment date. Payments by Direct
Participants and Indirect Participants to Beneficial Owners will be governed
by standing instructions and customary practices and will be the
responsibility of such Direct Participants and Indirect Participants and not
of DTC, the Trust or the Company, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of distributions
to DTC is the responsibility of the Trust, disbursement of such payments to
Direct Participants is the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners is the responsibility of Direct Participants
and Indirect Participants.
Except as provided herein, a Beneficial Owner of an interest in a Global
Certificate will not be entitled to receive physical delivery of Capital
Securities. Accordingly, each Beneficial Owner must rely on the procedures of
DTC, the Direct Participants and the Indirect Participants to exercise any
rights under the Capital Securities.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Certificates among Participants of DTC,
DTC is under no obligation to perform or continue to perform such procedures,
and such procedures may be discontinued at any time. None of the Company, the
Trust or any Institutional Trustee will have any responsibility for the
performance by DTC or its Direct Participants or Indirect Participants under
the rules and procedures governing DTC. DTC may discontinue providing its
services as securities depositary with respect to the Capital Securities at
any time by giving notice to the Trust. Under such circumstances, in the event
that a successor securities depositary is not obtained, Capital Security
certificates will be required to be printed and delivered. Additionally, the
Trust (with the consent of the Company) may decide to discontinue use of the
system of book-entry transfers through DTC (or a successor depositary) with
respect to the Capital Securities of the Trust. In that event, certificates
for such Capital Securities will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company and the Trust believes to be
reliable, but neither the Company nor the Trust takes responsibility for the
accuracy thereof.
PAYMENT AND PAYING AGENCY
Payments in respect of the Capital Securities represented by the Global
Certificates shall be made to DTC, which shall credit the relevant accounts at
DTC on the applicable distribution payment dates or, in the case of
Certificated Securities in non-book-entry form, such payments shall be made by
check mailed to the address of the holder entitled thereto as such address
shall appear on books and records of the Trust. The paying agent for the Trust
Securities (the "Paying Agent") shall initially be The Chase Manhattan Bank.
The Paying Agent shall be permitted to resign as Paying Agent upon 30 days'
written notice to the Institutional Trustee. In the event that The Chase
Manhattan Bank shall no longer be the Paying Agent, the Institutional Trustee
shall appoint a successor to act as Paying Agent (which shall be a bank or
trust company).
46
<PAGE>
RESTRICTIONS ON TRANSFER
The Capital Securities will be issued and may be transferred only in blocks
having an aggregate liquidation amount of not less that $100,000 (100 Capital
Securities). Any such transfer of Capital Securities in a block having an
aggregate liquidation amount of less than $100,000 shall be deemed to be null
and void and of no legal effect whatsoever. Any such transferee shall be
deemed not to be the holder of such Capital Securities for any purpose,
including but not limited to the receipt of distributions on such Capital
Securities, and such transferee shall be deemed to have no interest whatsoever
in such Capital Securities.
REGISTRAR, TRANSFER AGENT AND PAYING AGENT
The Institutional Trustee will act as registrar, transfer agent and Paying
Agent for the Capital Securities of the Trust.
Registration of transfers or exchanges of Capital Securities will be
effected without charge by or on behalf of the Trust, but upon payment (with
the giving of such indemnity as the Trust or the Company may require) in
respect of any tax or other government charges which may be imposed in
relation to it.
The Trust will not be required to register or cause to be registered the
transfer or exchange of Capital Securities after such Capital Securities have
been called for redemption.
INFORMATION CONCERNING THE INSTITUTIONAL TRUSTEE
The Institutional Trustee, prior to the occurrence of a default with respect
to the Trust Securities of the Trust and after the curing of any defaults that
may have occurred, undertakes to perform only such duties as are specifically
set forth in the Declaration and, after default, shall exercise such of the
rights and powers vested in it by such Declaration, and use the same degree of
care and skill in their exercise, as a prudent individual would exercise or
use in the conduct of his or her own affairs. Subject to such provisions, the
Institutional Trustee is under no obligation to exercise any of the powers
vested in it by the Declaration at the request of any holder of Capital
Securities of the Trust, unless offered reasonable indemnity by such holder
against the costs, expenses and liabilities which might be incurred thereby.
The holders of Capital Securities of the Trust will not be required to offer
such indemnity in the event such holders, by exercising their voting rights,
direct the Institutional Trustee to take any action it is empowered to take
under the Declaration following a Declaration Event of Default. The
Institutional Trustee of a the Trust also serves as trustee under the
Guarantee and the Indenture. The Company and certain of its subsidiaries
conduct certain banking transactions with the Institutional Trustee in the
ordinary course of their business.
Whenever in the exercise of its rights or powers or the performance of its
duties under the Declaration the Institutional Trustee shall deem it desirable
to receive instructions with respect to enforcing any remedy or right or
taking any other action thereunder, the Institutional Trustee (i) may request
instructions from the holders of the Capital Securities of the Trust which
instructions may only be given by the holders of a majority, or such other
proportion, in liquidation amount of the Capital Securities of the Trust as
would be entitled to direct the Institutional Trustee under the terms of such
Capital Securities in respect of such remedy, right or action, (ii) may
refrain from enforcing such remedy or right or taking such other action until
such instructions are received, and (iii) shall be protected in conclusively
relying on or acting in or accordance with such instructions.
PROPOSED TAX LEGISLATION
On February 6, 1997, President Clinton proposed certain tax law changes that
would, among other things, generally deny corporate issuers a deduction for
interest in respect of certain debt obligations
47
<PAGE>
issued on or after the date of first committee action (the "Proposed
Legislation") if such debt obligations have a maximum term in excess of
fifteen years and are not shown as indebtedness on the issuer's separate
balance sheet. There can be no assurance, however, that the effective date
proposed will not be altered to a retroactive date if the Proposed Legislation
is enacted, or that other legislation enacted after the date hereof will not
otherwise adversely affect the ability of the Company to deduct the interest
payable on the Subordinated Debt Securities. Accordingly, there can be no
assurance that a Tax Event will not occur. It is expected that if the Proposed
Legislation were to be enacted, such legislation would not apply to the
Subordinated Debt Securities. See "Description of the Capital Securities--Tax
Event Redemption."
GOVERNING LAW
The Declaration and the Capital Securities of the Trust will be governed by,
and construed in accordance with, the laws of the State of Delaware, without
regard to principles of conflict of laws.
MISCELLANEOUS
The Regular Trustees of the Trust are authorized and directed to operate the
Trust in such a way so that the Trust will not be required to register as an
"investment company" under the 1940 Act nor be characterized as other than a
grantor trust for United States federal income tax purposes. The Company is
authorized and directed to conduct its affairs so that the Subordinated Debt
Securities will be treated as indebtedness of the Company for United States
federal income tax purposes. In this connection, the Company and the Regular
Trustees are authorized to take any action, not inconsistent with applicable
law, the Declaration or the certificates of incorporation of the Company, that
each of the Company and the Regular Trustees determine in their discretion to
be necessary or desirable to achieve such end, as long as such action does not
adversely affect the interests of the holders of the Capital Securities or
vary the terms thereof.
Holders of the Capital Securities have no preemptive rights.
DESCRIPTION OF THE GUARANTEE
Set forth below is a summary of information concerning the Guarantee which
has been executed and delivered by the Company for the benefit of the holders
from time to time of the Capital Securities. Chase Manhattan Bank is trustee
(the "Guarantee Trustee") under the Guarantee. The terms of the Guarantee are
those set forth in the Guarantee and those made part of such Guarantee by the
Trust Indenture Act. This summary of the material terms of the Guarantee does
not purport to be complete and is subject in all respects to the provisions
of, and is qualified in its entirety by reference to, the Guarantee (a copy of
which has been filed as an exhibit to the Registration Statement of which this
Prospectus is a part) and the Trust Indenture Act. The Guarantee will be held
by the Guarantee Trustee for the benefit of the holders of the Capital
Securities of the Trust. The Guarantee has been qualified under the Trust
Indenture Act.
GENERAL
Pursuant to the Guarantee, the Company has irrevocably and unconditionally
agreed, to the extent set forth therein, to pay in full, to the holders of the
Capital Securities issued by the Trust, the Guarantee Payments (as defined
herein) (except to the extent paid by the Trust), as and when due, regardless
of any defense, right of set-off or counterclaim which the Trust may have or
assert. The following payments with respect to Capital Securities issued by
the Trust, to the extent not paid by the Trust (the "Guarantee Payments"), are
subject to the Guarantee (without duplication): (i) any accrued and unpaid
distributions which are required to be paid on Capital Securities, to the
extent the Trust
48
<PAGE>
shall have funds available therefor; (ii) the Redemption Price, to the extent
the Trust has funds available therefor, with respect to any Capital Securities
called for redemption by the Trust; and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Trust (other than in connection
with the distribution of Subordinated Debt Securities to the holders of
Capital Securities upon the redemption of all of the Capital Securities), the
lesser of (a) the aggregate of the liquidation amount and all accrued and
unpaid distributions on such Capital Securities to the date of payment, to the
extent the Trust has funds available therefor, and (b) the amount of assets of
the Trust remaining available for distribution to holders of such Capital
Securities in liquidation of the Trust. The Company's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts
by the Company to the holders of Capital Securities or by causing the Trust to
pay such amounts to such holders.
The Guarantee in respect of the Trust will not apply to any payment of
distributions except to the extent the Trust shall have funds available
therefor, which funds will not be available except to the extent the Company
has made payments of interest (or premium, if any) or principal or other
payments on the Subordinated Debt Securities purchased by the Trust. See
"Description of the Subordinated Debt Securities--Certain Covenants." The
Guarantee, when taken together with the Company's obligations under the
Subordinated Debt Securities, the Declaration and the Indenture, including its
obligations to pay costs, expenses, debts and liabilities of the Trust (other
than with respect to the Trust Securities), the Indenture and each
Declaration, will provide a full and unconditional guarantee on a subordinated
basis by the Company of payments due on the Capital Securities.
Because the Guarantee is a guarantee of payment and not of collection,
holders of the Capital Securities may proceed directly against the Company as
guarantor, rather than having to proceed against the Trust before attempting
to collect from the Company, and the Company waives any right or remedy to
require that any action be brought against the Trust or any other person or
entity before proceeding against the Company. Such obligations will not be
discharged except by payment of the Guarantee Payments in full. The Guarantee
will be deposited with the Guarantee Trustee to be held for the benefit of the
holders of Capital Securities. Except as otherwise noted herein, the Guarantee
Trustee has the right to enforce the Guarantee on behalf of the holders of the
Capital Securities.
The Company has also agreed separately to irrevocably and unconditionally
guarantee the obligations of the Trust with respect to Common Securities
issued by Trust (the "Common Securities Guarantee") to the same extent as the
respective Guarantee, except that upon an event of default under the
Declaration of Trust, holders of Capital Securities of the Trust shall have
priority over holders of Common Securities of Trust with respect to
distributions and payments on liquidation, redemption or otherwise.
CERTAIN COVENANTS OF THE COMPANY UNDER THE GUARANTEE
In the Guarantee, the Company will covenant that, so long as any Capital
Securities issued by the Trust remain outstanding, if the Company shall be in
default under such Guarantee or there shall have occurred and be continuing
any event that would constitute an event of default under the Declaration of
the Trust or an Extension Period shall be continuing, then (a) the Company
shall not declare or pay any dividend on, make a distribution with respect to,
or redeem, purchase or make a liquidation payment with respect to, any of the
Company's capital stock or rights to acquire such capital stock (other than
(i) purchases or acquisitions of shares of any such capital stock or rights to
acquire such capital stock in connection with the satisfaction by the Company
of its obligations under any employee benefit plans, (ii) as a result of a
reclassification of the Company's capital stock or rights to acquire such
capital stock or the exchange or conversion of one class or series of the
Company's capital stock or rights to acquire such capital stock for another
class or series of the Company's capital stock or rights to acquire such
capital stock, (iii) the purchase of fractional interests in shares of the
Company's
49
<PAGE>
capital stock pursuant to the conversion or exchange provisions of such
capital stock or the security being converted or exchanged, or (iv) dividends
and distributions made on the Company's capital stock or rights to acquire
such capital stock with the Company's capital stock or rights to acquire such
capital stock), or make any guarantee payments with respect to the foregoing
and (b) the Company shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities issued
by the Company that rank pari passu with or junior to the Subordinated Debt
Securities.
MODIFICATION OF THE GUARANTEE; ASSIGNMENT
Except with respect to any changes which do not adversely affect the rights
of holders of Capital Securities in any material respect (in which case no
vote of such holders will be required), the Guarantee may be amended only with
the prior approval of the holders of not less than a majority in liquidation
amount of the outstanding Capital Securities issued by such the Trust. All
guarantees and agreements contained in the Guarantee shall bind the
successors, assigns, receivers, trustees and representatives of the Company
and shall inure to the benefit of the holders of the Capital Securities then
outstanding.
TERMINATION
The Guarantee will terminate as to the Capital Securities issued by the
Trust (a) upon full payment of the Redemption Price of all Capital Securities
of the Trust, (b) upon distribution of the Subordinated Debt Securities held
by the Trust to the holders of the Capital Securities of the Trust or (c) upon
full payment of the amounts payable in accordance with the Declaration of
Trust upon liquidation of the Trust. Notwithstanding the foregoing, the
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any holder of Capital Securities issued by the Trust must
restore payment of any sums paid under such Capital Securities or Guarantee.
EVENTS OF DEFAULT
An event of default under a Guarantee in respect of the Trust will occur
upon the failure of the Company to perform any of its payment or other
obligations thereunder.
The holders of a majority in liquidation amount of the Capital Securities
issued by the Trust have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of the Guarantee of such Capital Securities or to direct the exercise
of any trust or power conferred upon the Guarantee Trustee under such
Guarantee. A holder of record of such Capital Securities may institute a legal
proceeding directly against the Company to enforce the Guarantee Trustee's
rights under such Guarantee, without first instituting a legal proceeding
against the Trust, the Guarantee Trustee or any other person or entity.
Pursuant to the Guarantee, the Company will waive any right or remedy to
require that any action be brought first against the Trust or any other person
or entity before proceeding directly against the Company.
STATUS OF THE GUARANTEE
The Company's obligations under the Guarantee are subordinate and junior in
right of payment to all present and future Senior Indebtedness (as defined
herein) of the Company and are also effectively subordinated to claims of
creditors of the Company's subsidiaries. The terms of the Capital Securities
provide that each holder of Capital Securities issued by the Trust by
acceptance thereof agrees to the subordination provisions and other terms of
the Guarantee relating thereto. Because the Company is a holding company, the
right of the Company to participate in any distribution of assets of any
subsidiary upon such subsidiary's liquidation or reorganization or otherwise
is subject to the prior claims of creditors of that subsidiary, except to the
extent the Company may itself be recognized as a
50
<PAGE>
creditor of that subsidiary. Accordingly, the Company's obligations under the
Guarantee will be effectively subordinated to all existing and future
liabilities of the Company's subsidiaries, and claimants should look only to
the assets of the Company for payments thereunder. See "Marshall & Ilsley
Corporation." The Guarantee does not limit the incurrence or issuance of other
secured or unsecured debt of the Company, including Senior Indebtedness,
whether under the Indenture, any other indenture that the Company may enter
into in the future or otherwise.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of a default with respect to
the Guarantee and after the curing of all defaults that may have occurred,
undertakes to perform only such duties as are specifically set forth in such
Guarantee and, after default, shall exercise such of the rights and powers
vested in it by such Guarantee, and use the same degree of care and skill in
their exercise, as a prudent individual would exercise or use in the conduct
of his or her own affairs. Subject to such provisions, the Trustee is under no
obligation to exercise any of the powers vested in it by the Guarantee at the
request of any holder of Capital Securities, unless offered reasonable
indemnity against the costs, expenses and liabilities which might be incurred
thereby.
The Company and certain of its affiliates maintain a banking relationship
with the Guarantee Trustee.
GOVERNING LAW
The Guarantee is governed by and construed in accordance with the laws of
the State of New York, without regard to conflict of laws principles.
DESCRIPTION OF THE SUBORDINATED DEBT SECURITIES
Set forth below is a description of the principal terms of the Subordinated
Debt Securities. The following description does not purport to be complete and
is subject to, and is qualified in its entirety by reference to, the
Indenture, dated as of December 9, 1996 (the "Base Indenture"), among the
Company and The Chase Manhattan Bank, as trustee (the "Debt Trustee"), as
supplemented by a First Supplemental Indenture dated as of December 9, 1996
(the Base Indenture, as so supplemented, is herein referred to as the
"Indenture".) Certain capitalized terms used herein are defined in the
Indenture. The terms of the Indenture will be those set forth in the Indenture
and those made part thereof by the Trust Indenture Act. The Indenture, by its
terms, requires the Company and the Debt Trustee to comply with the Trust
Indenture Act. This summary of the material terms of the Indenture does not
purport to be complete and is subject in all respects to the provisions of,
and is qualified in its entirety by reference to, the Indenture (a copy of
which has been filed as an exhibit to the Registration Statement of which this
Prospectus is a part) and the Trust Indenture Act. The Indenture has been
qualified under the Trust Indenture Act. Certain capitalized terms used herein
are defined in the Indenture.
Under certain circumstances involving the dissolution of the Trust following
the occurrence of a Tax Event, Subordinated Debt Securities may be distributed
to the holders of the Trust Securities of the Trust in liquidation of the
Trust. See "Description of the Capital Securities--Tax Event Redemption."
GENERAL
Concurrently with the issuance of the Old Capital Securities, the Trust
invested the proceeds thereof, together with the consideration paid by the
Company for the Common Securities, in the Old Subordinated Debt Securities
issued by the Company. The Old Subordinated Debt Securities were and the New
Subordinated Debt Securities exchanged for the Old Subordinated Debt
Securities under the
51
<PAGE>
Exchange Offer will be issued as unsecured debt under the Indenture.
Subordinated Debt Securities will be limited to such amount being the sum of
the aggregate stated liquidation amounts of the Trust Securities of the Trust.
The amount of securities that may be issued under the Indenture is unlimited.
The Subordinated Debt Securities are not subject to a sinking fund
provision. The entire principal amount of the Subordinated Debt Securities
will mature and become due and payable, together with any accrued and unpaid
interest thereon including Compounded Interest (as defined herein) and
Additional Interest (as defined herein), if any, on December 1, 2026.
If the Subordinated Debt Securities are distributed to holders of Capital
Securities of the Trust in liquidation of such holders' interests in Trust,
the Subordinated Debt Securities will, with respect to Capital Securities in
book-entry Form, initially be issued as a Global Security (as defined herein)
having an aggregate principal amount equal to the liquidation amount of such
Capital Securities and, with respect to such Capital Securities held in
Certificated non-book entry form, will initially be deemed to be represented
by such certificates and to have an aggregate principal amount equal to the
liquidation amount of such Capital Securities. As described herein, under
certain limited circumstances, Subordinated Debt Securities may be issued in
certificated non-book entry form in exchange for a Global Security. See "--
Book-Entry and Settlement" below. Subordinated Debt Securities deemed to be
represented by a Capital Security certificate will be issued in certificated
form upon presentation for transfer or reissuance. In the event that
Subordinated Debt Securities are issued in certificated non- book entry form,
such Subordinated Debt Securities will be in denominations of $1,000 and
integral multiples thereof and may be transferred or exchanged at the offices
described below. Payments on Subordinated Debt Securities issued as a Global
Security will be made to DTC, a successor depositary or, in the event that no
depositary is used, to a paying agent for the Subordinated Debt Securities. In
the event Subordinated Debt Securities are issued in certificated non-book
entry form, interest or principal (and premium, if any) will be payable, the
transfer of the Subordinated Debt Securities will be registrable and
Subordinated Debt Securities will be exchangeable for Subordinated Debt
Securities of other denominations of a like aggregate principal amount at the
corporate trust office of the Debt Trustee in New York, New York; provided
that payment of interest may be made at the option of the Company by check
mailed to the address of the holder entitled thereto or by wire transfer to an
account appropriately designated by the holder entitled thereto.
Notwithstanding the foregoing, so long as the holder of any Subordinated Debt
Securities is the Institutional Trustee, the payment of interest or principal
(and premium, if any) on the Subordinated Debt Securities held by such
Institutional Trustee will be made at such place and to such account as may be
designated by such Institutional Trustee.
The Indenture does not contain provisions that afford holders of the
Subordinated Debt Securities protection in the event of a highly leveraged
transaction or other similar transaction involving the Company that may
adversely affect such holders.
SUBORDINATION
The Indenture provides that the Subordinated Debt Securities are
subordinated and junior in right of payment to all present and future Senior
Indebtedness of the Company. No payment of principal (including redemption
payments), premium, if any, or interest on the Subordinated Debt Securities
may be made (in cash, property, securities, by set-off or otherwise) if (i)
any Senior Indebtedness of the Company, as the case may be, is not paid when
due and any applicable grace period with respect to a payment default under
such Senior Indebtedness has ended and such default has not been cured or
waived or ceased to exist or (ii) the maturity of any Senior Indebtedness of
the Company has been accelerated because of a default. Upon any distribution
of assets of the Company to creditors upon any dissolution, winding-up,
liquidation or reorganization, whether voluntary or involuntary, or in
bankruptcy, insolvency, receivership or other proceedings, all principal,
premium, if any, and interest
52
<PAGE>
due or to become due on all Senior Indebtedness of the Company must be paid in
full before the holders of Subordinated Debt Securities are entitled to
receive or retain any payment. Upon satisfaction of all claims of all Senior
Indebtedness then outstanding, the rights of the holders of the Subordinated
Debt Securities will be subrogated to the rights of the holders of Senior
Indebtedness of the Company to receive payments or distributions applicable to
Senior Indebtedness until all amounts owing on the Subordinated Debt
Securities are paid in full.
The term "Senior Indebtedness" means, with respect to the Company (i) the
principal, premium, if any, and interest in respect of (A) indebtedness of
such obligor for money borrowed and (B) indebtedness evidenced by securities,
debentures, notes, bonds or other similar instruments issued by such obligor,
including, without limitation, any current of future indebtedness under any
indenture (other than the Indenture) to which the Company is party; (ii) the
Company's 8 1/2% Convertible Subordinated Notes due 1997; (iii) any current or
future indebtedness issued under that certain indenture dated as of July 15,
1993 between the Company and Chemical Bank, as Trustee, as such indenture may
be amended from time to time; (iv) all capital lease obligations of such
obligor, (v) all obligations of such obligor issued or assumed as the deferred
purchase price of property, all conditional sale obligations of such obligor
and all obligations of such obligor under any title retention agreement, (vi)
all obligations of such obligor for the reimbursement on any letter of credit,
any banker's acceptance, any security purchase facility, any repurchase
agreement or similar arrangement, any interest rate swap, any other hedging
arrangement, any obligation under options or any similar credit or other
transaction, (vii) all obligations of the type referred to in clauses (i)
through (vi) above of other persons for the payment of which such obligor is
responsible or liable as obligor, guarantor or otherwise and (viii) all
obligations of the type referred to in clauses (i) through (vii) above of
other persons secured by any lien on any property or asset of such obligor
(whether or not such obligation is assumed by such obligor), except for (1)
any indebtedness between or among the Company or any affiliate of the Company,
(2) any other debt securities issued pursuant to the Indenture and guarantees
in respect of those debt securities and (3) any obligation as to which, in the
instrument creating or evidencing the same or pursuant to which the same is
outstanding, it is specifically designated by express provision that such
obligation is not Senior Indebtedness. Such Senior Indebtedness shall continue
to be Senior Indebtedness and be entitled to the benefits of the subordination
provisions irrespective of any amendment, modification or waiver of any term
of such Senior Indebtedness.
The Company is legal entity separate and distinct from its banking and non-
banking affiliates. The Company's principal assets are the stock of its bank
and non-bank subsidiaries and the assets of M&I Data Services. The Company
relies primarily on dividends from such subsidiaries to meet its obligations
for payment of principal and interest on its outstanding debt obligations and
corporate expenses. The principal sources of the Company's' income are
dividends, interest and fees from the banking and non-banking affiliates. The
bank subsidiaries of the Company are subject to certain restrictions imposed
by federal law on any extensions of credit to, and certain other transactions
with the Company and certain other affiliates and on investments in stock or
other securities thereof. In addition, payment of dividends to the Company by
the subsidiary banks is subject to ongoing review by banking regulators and is
subject to various statutory limitations and in certain circumstances requires
approval by banking regulatory authorities. Accordingly, the Subordinated Debt
Securities will be effectively subordinated to all existing and future
liabilities of the Company's subsidiaries.
The Indenture does not limit the aggregate amount of Senior Indebtedness
that may be issued by the Company. As of December 31, 1996, the Company had
approximately $257 million principal amount of Senior Indebtedness (excluding
indebtedness of subsidiaries of the Company) and the Company's subsidiaries
had in the aggregate approximately $1.7 billion of indebtedness.
REDEMPTION
The Company may redeem the Subordinated Debt Securities, in whole or in
part, at any time and from time to time, on or after December 1, 2006 upon not
less than 30 nor more than 60 days' notice,
53
<PAGE>
at the Call Price described under "Description of the Capital Securities--
Redemption," plus accrued and unpaid interest to the redemption date.
In addition, Subordinated Debt Securities may be redeemed by the Company at
any time in certain circumstances upon the occurrence of a Tax Event as
described under "Description of the Capital Securities--Tax Event Redemption,"
upon not less than 30 nor more than 60 days' notice, at a redemption price
equal to 100% of the principal amount to be redeemed plus any accrued and
unpaid interest to the redemption date. Either redemption prior to maturity is
subject to the Company having received prior approval of the Federal Reserve
to do so if then required under applicable capital guidelines or policies of
the Federal Reserve.
INTEREST
Subordinated Debt Securities shall bear interest at the rate of 7.65% per
annum, from the original date of issuance, payable semiannually in arrears on
June 1 and December 1 of each year (each an "Interest Payment Date"),
commencing June 1, 1997, to the person in whose name such Subordinated Debt
Security is registered, subject to certain exceptions, at the close of
business on the Business Day next preceding such Interest Payment Date. The
term "interest" as used herein, as such term relates to the Subordinated Debt
Securities, includes any Compounded Interest, Additional Interest or Special
Payment payable unless otherwise stated. In the event the Subordinated Debt
Securities shall not be held solely in book-entry only form, the Company shall
select relevant record dates, which shall be 15 days prior to the relevant
Interest Payment Date.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. The amount of interest payable for
any period shorter than a full semiannual period for which interest is
computed will be computed on the basis of the actual number of days elapsed
per 30-day month. In the event that any date on which interest is payable on
the Subordinated Debt Securities is not a Business Day, then payment of the
interest payable on such date will be made on the next succeeding day that is
a Business Day (and without any interest or other payment in respect of any
such delay) with the same force and effect as if made on such date.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as the Company is not in default in the payment of interest that has
become due and payable on the Subordinated Debt Securities and no accrued
interest from a prior completed Extension Period is unpaid, the Company shall
have the right to defer payments of interest on the Subordinated Debt
Securities by extending the interest payment period, at any time and from time
to time, for Extension Periods, each not exceeding 10 consecutive semiannual
periods, and on the date on which each such Extension Period ends or, if such
date is not an Interest Payment Date, on the immediately following Interest
Payment Date, the Company shall pay all interest then accrued and unpaid,
together with interest thereon compounded semiannually at the rate specified
for the Subordinated Debt Securities to the extent permitted by applicable law
("Compounded Interest"); provided that during any Extension Period (a) the
Company shall not declare or pay dividends on, make any distribution with
respect to, or redeem, purchase, acquire, or make a liquidation payment with
respect to, any of its capital stock or rights to acquire such capital stock
(other than (i) purchases or acquisitions of shares of any such capital stock
or rights to acquire such capital stock in connection with the satisfaction by
the Company, respectively, of its obligations under any employee benefit
plans, (ii) as a result of a reclassification of the Company's capital stock
or rights to acquire such capital stock or the exchange or conversion of one
class or series of the Company's capital stock or rights to acquire such
capital stock for another class or series of the Company's capital stock or
rights to acquire such capital stock, (iii) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted
or exchanged
54
<PAGE>
or (iv) dividends and distributions made on the Company's capital stock or
rights to acquire such capital stock with the Company's capital stock or
rights to acquire such capital stock), or make any guarantee payments with
respect to the foregoing, and (b) the Company shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by the Company that rank pari passu with or junior to
the Subordinated Debt Securities. Prior to the termination of any such
Extension Period, the Company may further defer payments of interest by
extending the interest payment period; provided, however, that each such
Extension Period, including all such previous and further extension thereof,
may not exceed 10 consecutive semiannual periods or extend beyond the maturity
of the Subordinated Debt Securities. Upon the termination of any Extension
Period and the payment of all amounts then due, the Company may commence a new
Extension Period, subject to the terms set forth in this section. No interest
during an Extension Period, except on the date on which such Extension Period
terminates (or if such date is not an Interest Payment Date, on the
immediately following Interest Payment Date), shall be due and payable. The
Company has no present intention of exercising its right to defer payments of
interest on the Subordinated Debt Securities.
If the Institutional Trustee shall be the sole holder of the Subordinated
Debt Securities, the Company shall give the Regular Trustees, the
Institutional Trustee and the Debt Trustee notice of its initiation of any
Extension Period one Business Day prior to the earlier of (i) the date
distributions on the Capital Securities of the Trust are payable or (ii) the
date the Regular Trustees of the Trust are required to give notice to holders
of the Capital Securities of the Trust (or any national securities exchange or
other organization on which the Capital Securities are listed, if any) of the
record date or the distribution payment date, in each case with respect to
distributions on the Trust Securities of the Trust the payment of which is
being deferred. The Regular Trustees of the Trust shall give notice of the
Company's initiation of any Extension Period to the holders of such Capital
Securities. If the Institutional Trustee shall not be the sole holder of the
Subordinated Debt Securities, the Company shall give the holders of such
Subordinated Debt Securities notice of its initiation of such Extension Period
at least 10 Business Days prior to the earlier of (i) the next succeeding
Interest Payment Date or (ii) the date upon which the Company is required to
give notice to holders of such Subordinated Debt Securities (or any national
securities exchange or other organization on which the corresponding Capital
Securities are listed, if any) of the record date or interest payment date, in
each case with respect to interest payments the payment of which is being
deferred.
ADDITIONAL INTEREST
If at any time the Trust shall be required to pay any taxes, duties,
assessments or governmental charges of whatever nature (other than withholding
taxes) imposed by the United States, or any other taxing authority, then, in
any such case, the Company will pay as additional interest ("Additional
Interest") on the Subordinated Debt Securities held by the Institutional
Trustee such additional amounts as shall be required so that the net amounts
received and retained by the Trust after paying any such taxes, duties,
assessments or other governmental charges will equal the amounts the Trust and
the Institutional Trustee would have received had no such taxes, duties,
assessments or other governmental charges been imposed.
PROPOSED TAX LEGISLATION
On February 6, 1997, President Clinton proposed the Proposed Legislation
which, among other things, would generally deny corporate issuers a deduction
for interest in respect of certain debt obligations issued on or after the
date of first committee action, if such debt obligations have a maximum term
in excess of fifteen years and are not shown as indebtedness on the issuer's
separate balance sheet. There can be no assurance, however, that the effective
date proposed will not be altered to a retroactive date if the Proposed
Legislation is enacted, or that other legislation enacted
55
<PAGE>
after the date hereof will not otherwise adversely affect the ability of the
Company to deduct the interest payable on the Subordinated Debt Securities.
Accordingly, there can be no assurance that a Tax Event will not occur. It is
expected that if the Proposed Legislation were to be enacted, such legislation
would not apply to the Subordinated Debt Securities. See "Description of the
Capital Securities--Tax Event Redemption."
CERTAIN COVENANTS
If (i) there shall have occurred and be continuing any event that would
constitute an Event of Default (as defined herein), (ii) the Company shall be
in default with respect to its payment of any obligations under the Guarantee
or Common Securities Guarantee (as defined in the Indenture), or (iii) the
Company shall have given notice of its election to defer payments of interest
on the Subordinated Debt Securities by extending the interest payment period
as provided in the Indenture and such period, or any extension thereof, shall
be continuing, then (a) the Company shall not declare or pay any dividend on,
make a distribution with respect to, or redeem, purchase or make a liquidation
payment with respect to, any of its capital stock or rights to acquire such
capital stock (other than (i) purchases or acquisitions of shares of any such
capital stock or rights to acquire such capital stock in connection with the
satisfaction by the Company of its obligations under any employee benefit
plans, (ii) as a result of a reclassification of the Company's capital stock
or rights to acquire such capital stock or the exchange or conversion of one
class or series of the Company's capital stock or rights to acquire such
capital stock for another class or series of the Company's capital stock or
rights to acquire such capital stock, (iii) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted
or exchanged, or (iv) dividends and distributions made on the Company's
capital stock or rights to acquire such capital stock with the Company's
capital stock or rights to acquire such capital stock), or make any guarantee
payments with respect to the foregoing and (b) the Company shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities issued by the Company that rank pari passu with or
junior to such Subordinated Debt Securities.
For so long as the Trust Securities remain outstanding, the Company will
covenant (i) to maintain 100% ownership of the Common Securities of the Trust;
provided, however, that any permitted successor of the Company under the
Indenture may succeed to the Company's ownership of such Common Securities,
(ii) to use its reasonable efforts to cause the Trust (a) to remain a
statutory business trust, except in connection with the distribution of
Subordinated Debt Securities to the holders of Trust Securities in liquidation
of the Trust, the redemption of all of the Trust Securities of the Trust or
certain mergers, consolidations or amalgamations, each as permitted by the
Declaration, and (b) to otherwise continue to be classified as a grantor trust
for United States federal income tax purposes and (iii) to use its reasonable
efforts to cause each holder of Trust Securities issued by the Trust to be
treated as owning an undivided beneficial interest in the Subordinated Debt
Securities issued to the Trust.
LIMITATION ON MERGERS AND SALES OF ASSETS
Nothing contained in the Indenture or in the Subordinated Debt Securities
shall prevent any consolidation or merger of the Company with or into any
other corporation (whether or not affiliated with the Company) or successive
consolidations or mergers in which the Company or its successor or successors
shall be a party, or shall prevent any sale, conveyance, transfer or other
disposition of the property of the Company or its successor or successors as
an entirety, or substantially as an entirety, to any other corporation
(whether or not affiliated with the Company or its successor or successors)
authorized to acquire and operate the same; provided, however, that the
Company shall, upon any such consolidation, merger, sale, conveyance, transfer
or other disposition, cause the obligations of the Company under Subordinated
Debt Securities and under the Indenture, to be expressly assumed,
56
<PAGE>
by supplemental indenture satisfactory in form to the Debt Trustee and
executed and delivered to the Debt Trustee, by the successor entity formed by
such consolidation or into which the Company shall have been merged, or which
shall have acquired such property. Upon execution and delivery of such
supplemental indenture to the Debt Trustee, such successor entity will be
substituted under the Indenture and thereupon the Company will be relieved of
any further liability or obligation thereunder.
EVENTS OF DEFAULT, WAIVER AND NOTICE
The Indenture provides that any one or more of the following described
events which has occurred and is continuing with respect to the Subordinated
Debt Securities constitutes an "Event of Default" with respect to the
Subordinated Debt Securities:
(a) default for 30 days in payment of any interest on the Subordinated
Debt Securities, including any Compounded Interest, Additional Interest or
Special Payment in respect thereof, when due; provided, however, that a
valid extension of the interest payment period by the Company shall not
constitute a default in the payment of interest for this purpose; or
(b) default in payment of principal and premium, if any, on the
Subordinated Debt Securities when due either at maturity, upon redemption,
by declaration or otherwise; provided, however, that a valid extension of
the maturity of such Subordinated Debt Securities shall not constitute a
default for this purpose; or
(c) default by the Company in the performance of any other of the
covenants or agreements in the Indenture which shall not have been remedied
for a period of 90 days after notice; or
(d) certain events of bankruptcy, insolvency or reorganization of the
Company; or
(e) as to Subordinated Debt Securities issued to the Trust, the voluntary
or involuntary dissolution, winding-up or termination of the Trust, except
in connection with the distribution of Subordinated Debt Securities to the
holders of Trust Securities in liquidation of the Trust, the redemption of
all of the Trust Securities of the Trust, or certain mergers,
consolidations or amalgamations, each as permitted by the Declaration of
Trust.
The Indenture provides that the Debt Trustee may, under certain
circumstances, withhold from the holders notice of default with respect to the
Subordinated Debt Securities (except for any default in payment of principal
of or interest or premium on the Subordinated Debt Securities) if the Trustee
considers it in the interest of such holders to do so.
The Indenture provides that if an Event of Default in respect of the
Subordinated Debt Securities shall have occurred and be continuing, either the
Debt Trustee or the holders of not less than 25% in aggregate principal amount
of the Subordinated Debt Securities then outstanding may declare the principal
of and accrued interest on all Subordinated Debt Securities to be due and
payable immediately, but upon certain conditions such declarations may be
annulled and past defaults may be waived (except defaults in payment of
principal of or interest or premium on the Subordinated Debt Securities, which
must be cured or paid in full) by the holders of a majority in aggregate
principal amount of the Subordinated Debt Securities then outstanding.
No holder of any Subordinated Debt Security shall have any right to
institute any suit, action or proceeding for any remedy under the Indenture,
unless such holder previously shall have given to the Debt Trustee written
notice of a continuing Event of Default with respect to the Subordinated Debt
Securities and unless the holders of not less than 25% in aggregate principal
amount of the Subordinated Debt Securities then outstanding shall have given
the Debt Trustee a written request to institute such action, suit or
proceeding and shall have offered to the Debt Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred thereby, and the Debt Trustee for 60 days after its receipt of such
notice, request and offer of indemnity shall have failed to institute any such
action, suit or proceeding; provided that no holder of Subordinated Debt
Securities
57
<PAGE>
shall have any right to prejudice the rights of any other holder of
Subordinated Debt Securities, obtain priority or preference over any other
such holder or enforce any right under this Indenture except as provided in
the Indenture and for the equal, ratable and common benefit of all holders of
Subordinated Debt Securities. Notwithstanding the foregoing, the right of any
holder of any Subordinated Debt Security to receive payment of the principal
of, premium, if any, and interest, on such Subordinated Debt Security when
due, or to institute suit for the enforcement of any such payment, shall not
be impaired or affected without the consent of such holder.
The holders of a majority in aggregate principal amount of the Subordinated
Debt Securities then outstanding shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to, or
exercising any trust or power conferred on, the Debt Trustee under the
Indenture; provided, however, that, except under certain circumstances, the
Debt Trustee may decline to follow any such direction if the Debt Trustee
determines that the action so directed would be unjustly prejudicial to
holders not taking part in such direction or would be unlawful or would
involve the Debt Trustee in personal liability. The Indenture requires the
annual filing by the Company with the Debt Trustee of a certificate as to the
absence of certain defaults under the Indenture.
An Event of Default under the Indenture also constitutes a Declaration Event
of Default. The holders of Capital Securities of the Trust in certain
circumstances have the right to direct the Institutional Trustee of Trust to
exercise its rights as the holder of the Subordinated Debt Securities. See
"Description of the Capital Securities--Declaration Events of Default" and "--
Voting Rights." Notwithstanding the foregoing, if an Indenture Event of
Default has occurred and is continuing and such event is attributable to the
failure of the Company to pay interest or principal (or premium, if any) on
the Subordinated Debt Securities on the respective dates such interest or
principal (or premium, if any) is payable (or in the case of redemption, on
the redemption date), the Company acknowledges that a holder of record of
Capital Securities of the Trust may institute a Direct Action for payment, on
or after the respective due dates specified in such Subordinated Debt
Securities, to such holder directly of the principal of (or premium, if any)
or interest on Subordinated Debt Securities having an aggregate principal
amount equal to the aggregate liquidation amount of the Capital Securities of
such holder. Notwithstanding any payments made to such holder of Capital
Securities by the Company in connection with a Direct Action, the Company
shall remain obligated to pay the principal of (or premium, if any) or
interest on the Subordinated Debt Securities held by the Trust or the
Institutional Trustee, and the Company shall be subrogated to the rights of
such holder of such Capital Securities under the Declaration to the extent of
any payments made by the Company to such holder in any Direct Action;
provided, however, that no such subrogation right may be exercised so long as
a Declaration Event of Default has occurred and is continuing. Except to the
extent described above under "Description of the Capital Securities--
Declaration Events of Default" and "--Voting Rights," the holders of Capital
Securities will not be able to exercise directly any other remedy available to
the holders of the Subordinated Debt Securities.
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Debt
Trustee, with the consent of the holders of not less than a majority in
principal amount of the Subordinated Debt Securities by such modification at
the time outstanding, to modify the Indenture or any supplemental indenture or
the rights of the holders of the Subordinated Debt Securities; provided,
however, that no such modification shall without the consent of the holder of
each Subordinated Debt Security so affected (i) extend the fixed maturity of
any Subordinated Debt Security, or reduce the principal amount thereof or any
premium thereon, or reduce any amount payable on redemption thereof, or reduce
the rate or extend the time of payment of interest thereon, or make the
principal of, or interest or premium on, the Subordinated Debt Securities
payable in any coin or currency other than that provided in the Subordinated
Debt Securities, or reduce the amount of principal of an OID security that
would be due
58
<PAGE>
and payable upon an acceleration of the maturity thereof or the amount payable
thereof in bankruptcy or impair or affect the right of any holder of
Subordinated Debt Securities to institute suit for the payment thereof or (ii)
reduce the aforesaid percentage of Subordinated Debt Securities the consent of
the holders of which is required for any such modification.
The Company and the Debt Trustee may enter into supplemental indentures,
without the consent of any holder of the Subordinated Debt Securities: (i) to
evidence the succession of another corporation to the Company and the
assumption by the successor corporation of the covenants, agreements and
obligations of the Company pursuant to the Indenture; (ii) to add to the
covenants of the Company such further covenants, restrictions or conditions
for the protection of the holders of the Subordinated Debt Securities and to
make the occurrence, or the occurrence and continuance (including any or no
grace periods), of a default in any of such additional covenants, restrictions
or conditions a default or an Event of Default permitting the enforcement of
remedies provided in the Indenture; (iii) to cure any ambiguity or to correct
or supplement any provision contained in the Indenture or in any supplemental
indenture which may be defective or inconsistent with any other provision
contained therein or in any supplemental indenture, or to make such other
provisions in regard to matters or questions arising under the Indenture;
provided that any such action shall not adversely affect the interests of the
holders of the Subordinated Debt Securities; (iv) to add on, delete from, or
revise the terms of the Subordinated Debt Securities to provide for transfer
procedures and restrictions substantially similar to those applicable to the
Capital Securities (for purposes of assuring that no registration of
Subordinated Debt Securities is required under the Securities Act); (v) to
evidence and provide for the acceptance of appointment under the Indenture by
a successor Debt Trustee with respect to the Subordinated Debt Securities and
to add to or change any of the provisions of the Indenture as shall be
necessary to provide for or facilitate the administration of the trust under
the Indenture by more than one Debt Trustee, pursuant to the Indenture; (vi)
to make any change that does not adversely affect the rights of any holder of
any Subordinated Debt Security in any material respect; or (vii) to provide
for the issuance, and establish the form and terms and conditions, of the
Subordinated Debt Securities, to establish the form of any certifications
required to be furnished pursuant to the terms of the Indenture or the
Subordinated Debt Securities or to add to the rights of the holders of the
Subordinated Debt Securities.
THE DEBT TRUSTEE
The Company may have normal banking relationships with the Debt Trustee in
the ordinary course of business.
BOOK-ENTRY AND SETTLEMENT
If distributed to holders of Capital Securities of the Trust in connection
with the involuntary or voluntary dissolution, winding-up or liquidation of
the Trust as a result of the occurrence of a Tax Event, the Subordinated Debt
Securities will with respect to such Capital Securities held in book-entry
form, initially be issued in the form of one or more global certificates (each
a "Global Security") registered in the name of the Depositary or its nominee.
Except under the limited circumstances described below, Subordinated Debt
Securities represented by a Global Security will not be exchangeable for, and
will not otherwise be issuable as, Subordinated Debt Securities in definitive
form. The Global Securities described above may not be transferred except by
the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or to a
successor depositary or its nominee.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of such securities in definitive form. Such laws may
impair the ability to transfer beneficial interests in such a Global Security.
59
<PAGE>
Except as provided below, owners of beneficial interests in a Global
Security will not be entitled to receive physical delivery of Subordinated
Debt Securities in definitive form and will not be considered the holders (as
defined in the Indenture) thereof for any purpose under the Indenture, and no
Global Security representing Subordinated Debt Securities shall be
exchangeable, except for another Global Security of like denomination and
tenor to be registered in the name of the Depositary or its nominee or to a
successor Depositary or its nominee. Accordingly, each Beneficial Owner must
rely on the procedures of the Depositary or if such person is not a
Participant, on the procedures of the Participant through which such person
owns its interest to exercise any rights of a holder under the Indenture.
THE DEPOSITARY
If Subordinated Debt Securities are distributed to holders of Capital
Securities in liquidation of such holders' interests in the Trust, DTC will
act as securities Depositary for the Subordinated Debt Securities issued by
the Trust with respect to Capital Securities held in book-entry form. For a
description of DTC and the specific terms of the depositary arrangements, see
"Description of the Capital Securities--Book-Entry Only Issuance--The
Depository Trust Company." As of the date of this Prospectus, the description
herein of DTC's book-entry system and DTC's practices as they relate to
purchases, transfers, notices and payments with respect to the Capital
Securities apply in all material respects to any debt obligations represented
by one or more Global Securities held by DTC. The Company may appoint a
successor to DTC or any successor depositary in the event DTC or such
successor depositary is unable or unwilling to continue as the Depositary for
the Global Securities.
None of the Company, the Trust, the Institutional Trustee any paying agent
and any other agent of the Company, or the Debt Trustee will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a Global
Security for the Subordinated Debt Securities or for maintaining, supervising
or reviewing any records relating to such beneficial ownership interests.
DISCONTINUANCE OF THE DEPOSITARY'S SERVICES
A Global Security shall be exchangeable for Subordinated Debt Securities
registered in the names of persons other than the Depositary or its nominee
only if (i) the Depositary notifies the Company that it is unwilling or unable
to continue as a depositary for such Global Security and no successor
depositary shall have been appointed, (ii) the Depositary, at any time, ceases
to be a clearing agency registered under the Exchange Act at which time the
Depositary is required to be so registered to act as such depositary and no
successor depositary shall have been appointed, (iii) the Company, in its sole
discretion, determines that such Global Security shall be so exchangeable or
(iv) there shall have occurred an Indenture Event of Default. Any Global
Security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for Subordinated Debt Securities registered in such names as the
Depositary shall direct. It is expected that such instructions will be based
upon directions received by the Depositary from its Participants with respect
to ownership of beneficial interests in such Global Security.
RESTRICTIONS ON TRANSFER
The Subordinated Debt Securities will be issued and may be transferred only
in blocks having a liquidation amount of not less than $100,000. Any such
transfer of Subordinated Debt Securities in a block having a liquidation
amount of less than $100,000 shall be deemed to be null and void and of no
legal effect whatsoever. Any such transferee shall be deemed not to be the
holder of such Subordinated Debt Securities for any purpose, including but not
limited to the receipt of payments on such Subordinated Debt Securities, and
such transferee shall be deemed to have no interest whatsoever in such
Subordinated Debt Securities.
60
<PAGE>
GOVERNING LAW
The Indenture and the Subordinated Debt Securities will be governed by, and
construed in accordance with, the laws of the State of New York, without
regard to conflict of laws principles.
MISCELLANEOUS
The Indenture provides that the Company will pay all fees and expenses
related to (i) the offering and sale of the Trust Securities and the
Subordinated Debt Securities, (ii) the organization, maintenance and
dissolution of the Trust, (iii) the retention of the M&I Trustees and (iv) the
enforcement by the Institutional Trustee of the rights of the holders of the
Capital Securities.
The Company will have the right at all times to assign any of its respective
rights or obligations under the Indenture to a direct or indirect wholly-owned
subsidiary of the Company; provided that, in the event of any such assignment,
the Company, as the case may be, will remain liable for all of their
respective obligations. Subject to the foregoing, the Indenture will be
binding upon and inure to the benefit of the parties thereto and their
respective successors and assigns. The Indenture provides that it may not
otherwise be assigned by the parties thereto.
EFFECT OF OBLIGATIONS UNDER THE SUBORDINATED DEBT
SECURITIES AND THE GUARANTEE
As set forth in the Declaration, the sole purpose of the Trust is to issue
and sell the Trust Securities evidencing undivided beneficial interests in the
assets of the Trust, and to invest the proceeds from such issuance and sale in
the Subordinated Debt Securities issued by the Company in accordance with such
Trust Securities.
As long as payments of interest and other payments are made when due on the
Subordinated Debt Securities, such payments will be sufficient to cover
distributions and payments due on the Trust Securities issued by the Trust
because of the following factors: (i) the aggregate principal amount of
Subordinated Debt Securities will be equal to the aggregate stated liquidation
amount of such Trust Securities; (ii) the interest rate and the interest and
other payment dates on the Subordinated Debt Securities will match the
distribution rate and distribution and other payment dates for such Capital
Securities; (iii) the Company shall pay all, and the Trust shall not be
obligated to pay directly or indirectly any, costs, expenses, debts, and
obligations of the Trust (other than with respect to such Trust Securities);
and (iv) the Declaration of the Trust further provides that the Trustees of
the Trust shall not take or cause or permit the Trust to, among other things,
engage in any activity that is not consistent with the purposes of the Trust.
Payments of distributions (to the extent funds therefor are available to the
Trust) and other payments due on such Capital Securities (to the extent funds
therefor are available to the Trust) are guaranteed by the Company as
described under "Description of the Guarantee." If the Company does not make
interest payments on the Subordinated Debt Securities, it is expected that the
Trust will not have sufficient funds to pay distributions on such Capital
Securities. The Guarantee will not apply to any payment of distributions
except to the extent that Trust has funds available for the payment of such
distributions. The Guarantee will cover the payment of distributions and other
payments on such Capital Securities only if and to the extent that the Company
has made payments of interest or principal (or premium, if any) on the
Subordinated Debt Securities held by the Trust as its sole assets. The
Guarantee, when taken together with the Company's obligations under the
Subordinated Debt Securities, the Declaration and the Indenture, including its
obligations to pay costs, expenses, debts and liabilities of the Trust (other
than with respect to the Trust Securities), the Indenture and the Declaration,
provide a full and unconditional guarantee on a subordinated basis by the
Company of amounts when due on such Capital Securities issued by the Trust.
61
<PAGE>
If the Company fails to make interest or other payments on the Subordinated
Debt Securities when due (after giving effect to any Extension Period), the
Declaration provides a mechanism whereby the holders of the Capital
Securities, using the procedures described herein under "Description of the
Capital Securities--Book-Entry Only Issuance--The Depository Trust Company"
and "--Voting Rights," may direct the Institutional Trustee, to the fullest
extent permitted by law to enforce its rights under the Subordinated Debt
Securities. If the Institutional Trustee fails to enforce its rights under the
Subordinated Debt Securities after a majority in liquidation amount of Capital
Securities have so directed the Institutional Trustee, a holder of record of
the Capital Securities may institute a legal proceeding against the Company to
enforce the Institutional Trustee's rights under the Subordinated Debt
Securities without first instituting any legal proceedings against the
Institutional Trustee or any other person or entity. Notwithstanding the
foregoing, if a Declaration Event of Default has occurred and is continuing
and such event is attributable to the failure of the Company to pay principal
(or premium, if any) or interest on the Subordinated Debt Securities on the
respective dates such principal (or premium, if any) or interest is payable
(or in the case of redemption, on the redemption date), then a holder of
record of Capital Securities may institute a Direct Action for payment on or
after the respective due dates specified in the Subordinated Debt Securities.
In connection with such Direct Action, the Company will be subrogated to the
rights of such holder of Capital Securities under the Declaration to the
extent of any payment made by the Company to such holder of Capital Securities
in such Direct Action; provided, however, that no such subrogation right may
be exercised so long as a Declaration Event of Default has occurred and is
continuing.
Because the Company is a holding company, the Subordinated Debt Securities
and the Guarantee are effectively subordinated to all existing and future
liabilities, including trade payables, of the Company's subsidiaries, except
to the extent that the Company is a creditor of the subsidiaries recognized as
such.
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Capital Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Capital Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of New Capital Securities
received in exchange for Old Capital Securities where such New Capital
Securities were acquired as a result of market-making activities or other
trading activities. The Company and the Trust have agreed that, starting on
the date of the original issuance of the Old Capital Securities and ending on
the close of business one year after such date, they will make this
Prospectus, as amended or supplemented, available to any broker-dealer for use
in connection with any such resale. In addition, until June 9, 1997, all
dealers offering transactions in the New Capital Securities may be required to
deliver a Prospectus.
The Company and the Trust will not receive any proceeds from any sale of New
Capital Securities by broker-dealers. New Capital Securities received by
broker-dealers for their own account pursuant to the Exchange Offer may be
sold from time to time in one or more transactions in the over-the-counter
market, in negotiated transactions, through the writing of options on the New
Capital Securities or a combination of such methods of resale, at market
prices prevailing at the time of resale, at prices related to such prevailing
market prices or negotiated prices. Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such broker-dealer and/or the
purchasers of any such New Capital Securities. Any broker-dealer that resells
New Capital Securities that were received by it for its own account pursuant
to the Exchange Offer and any broker or dealer that participates in a
distribution of such New Capital Securities may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit of any
such resale of New Capital Securities and any commissions or concessions
received by any such persons may be deemed to be underwriting compensation
under
62
<PAGE>
the Securities Act. The Letter of Transmittal states that by acknowledging
that it will deliver and by delivering a prospectus, a broker-dealer will not
be deemed to admit that it is an "underwriter" within the meaning of the
Securities Act.
Each broker-dealer that surrenders Old Capital Securities pursuant to the
Exchange Offer will be deemed to have agreed, by execution of the Letter of
Transmittal, to comply with applicable laws in connection with offers and
sales by way of this Prospectus including without limitation the prospectus
delivery requirements of the Securities Act, the applicable requirements of
Rules 10b-5 under the Exchange Act and Regulation M, and to discontinue offers
and sales upon notice from the Company of the happening of any event that
requires the making of changes in the Registration Statement or the Prospectus
so that the statements therein are not misleading and do not omit to state a
material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading. The Company has
agreed, subject to certain exceptions, to make any such required change
promptly following the occurrence of any such event.
For a period of one year after the original issuance of the Old Capital
Securities, the Company and the Trust will promptly send additional copies of
this Prospectus and any amendment or supplement to this Prospectus to any
broker-dealer that requests such documents in the Letter of Transmittal. The
Company and the Trust have agreed to pay all expenses incident to the Exchange
Offer (including the expenses of one counsel for the holders of the Old
Capital Securities) other than commissions or concessions of any brokers or
dealers and will indemnify the holders of the Old Capital Securities
(including any broker-dealers) against certain liabilities, including
liabilities under the Securities Act.
UNITED STATES FEDERAL INCOME TAXATION
GENERAL
In addition to the two specific opinions referred to below under "--US
Holders--Characterization of the Trust" and "--Characterization of the
Subordinated Debt Securities," Godfrey & Kahn, S.C., counsel to the Company
and the Trust ("Counsel"), has, in connection with the issuance of the Old
Capital Securities, rendered its opinion generally to the effect that, subject
to the exceptions and qualifications set forth therein, the discussion of
United States federal income taxation which follows summarizes the material
United States federal income tax consequences of the purchase, ownership and
disposition of Capital Securities.
This summary is based on the Internal Revenue Code of 1986, as amended (the
"Code"), Treasury regulations thereunder, and administrative and judicial
interpretations thereof, each as of the date hereof, all of which are subject
to change, possibly on a retroactive basis.
Except as otherwise stated, this summary deals only with Capital Securities
held as a capital asset by a holder who or which (i) purchased Capital
Securities upon original issuance (an "Initial Holder") and (ii) is a US
Holder (as defined below). It does not deal with all aspects of United States
federal income taxation, nor with the particular United States federal income
tax (hereafter, "income tax") consequences which may be applicable to certain
classes of US Holders (such as banks, thrift institutions, real estate
investment trusts, regulated investment companies, insurance companies,
brokers and dealers in securities or currencies, other financial institutions,
tax-exempt organizations, persons holding Capital Securities as a position in
a "straddle," as part of a "synthetic security or hedge," as part of a
"conversion transaction" or as part of any other integrated investment,
persons having a functional currency other than the U.S. Dollar and certain
United States expatriates). Further, this summary does not address (a) the
income tax consequences to shareholders in, or partners or beneficiaries of, a
holder of Capital Securities, (b) the United States federal alternative
minimum tax consequences of the purchase, ownership or disposition of Capital
Securities, or (c) any state, local or foreign tax consequences of the
purchase, ownership and disposition of Capital Securities.
63
<PAGE>
A "US Holder" is a holder of Capital Securities who or which is a citizen or
individual resident (or is treated as a citizen or individual resident) of the
United States for income tax purposes, a corporation or partnership created or
organized (or treated as created or organized for income tax purposes) in or
under the laws of the United States or any political subdivision thereof, an
estate the income of which is includible in its gross income for United States
federal income tax purposes without regard to its source or a trust if, and
only if, (i) a court within the United States is able to exercise primary
supervision over the administration of the trust and (ii) one or more United
States trustees have the authority to control all substantial decisions of the
trust.
EXCHANGE OF CAPITAL SECURITIES
The exchange of Old Capital Securities for New Capital Securities should not
be a taxable event to holders for income tax purposes. The exchange of Old
Capital Securities for New Capital Securities pursuant to the Exchange Offer
should not be treated as an "exchange" for federal income tax purposes because
the degree to which the New Capital Securities differ from the Old Capital
Securities is not economically significant and because the exchange will occur
by operation of the terms of the Old Capital Securities. Accordingly, the New
Capital Securities should have the same issue price as the Old Capital
Securities, and a holder should have the same adjusted basis and holding
period in the New Capital Securities as the holder had in the Old Capital
Securities immediately before the exchange. Therefore, the tax opinions
rendered by Counsel in connection with the issuance of the Old Capital
Securities, when read in conjunction with the tax opinion rendered in
connection with the Exchange Offer, are equally applicable to this issuance of
New Capital Securities.
US HOLDERS
CHARACTERIZATION OF THE TRUST
In connection with the issuance of the Old Capital Securities, Counsel
rendered its opinion generally to the effect that, under then current law and
assuming full compliance with the terms of the Declaration (and other
documents), and based on certain assumptions and qualifications referenced in
the opinion, the Trust will be characterized for United States federal income
tax purposes as a grantor trust and will not be characterized as an
association taxable as a corporation for such purposes. Accordingly, for
income tax purposes, each holder of Capital Securities generally will be
considered the owner of an undivided interest in the Subordinated Debt
Securities owned by the Trust, and each US Holder will be required to include
all income or gain recognized for income tax purposes with respect to its
allocable share of the Subordinated Debt Securities on its own income tax
return.
CHARACTERIZATION OF THE SUBORDINATED DEBT SECURITIES
In connection with the issuance of the Old Subordinated Debt Securities,
Counsel rendered its opinion generally to the effect that, under then current
law and assuming full compliance with the terms of the Indenture (and other
documents), and based on certain assumptions and qualifications referenced in
the opinion, the Subordinated Debt Securities will be characterized for United
States federal income tax purposes as debt of the Company.
ORIGINAL ISSUE DISCOUNT
Under the terms of the Subordinated Debt Securities, the Company has the
option to defer payments of interest from time to time by extending the
interest payment period for a period not exceeding 10 consecutive semiannual
periods, but not beyond the maturity of the Subordinated Debt Securities.
Recently issued Treasury regulations under Section 1273 of the Code provide
that debt instruments like the Subordinated Debt Securities will not be
considered issued with OID by reason of the Company's option to defer payments
of interest if the likelihood of deferral is "remote."
64
<PAGE>
The Company has concluded, and this discussion assumes, that, as of the date
of this Prospectus, the likelihood of exercise of that option is "remote"
within the meaning of the applicable regulations, in part because exercising
that option would prevent the Company from declaring dividends on its stock
and would prevent the Company from making any payments with respect to debt
securities that rank pari passu or junior to the Subordinated Debt Securities.
Therefore, the Subordinated Debt Securities should not be treated as issued
with OID by reason of the Company's deferral option. Rather, stated interest
on the Subordinated Debt Securities will generally be taxable to a US Holder,
as ordinary income, when paid or accrued in accordance with that holder's
method of accounting for income tax purposes. It should be noted, however,
that these regulations have not yet been addressed in any rulings or other
interpretations by the Service. Accordingly, it is possible that the Service
could take a position contrary to the interpretation described herein.
In the event the Company subsequently exercised its option to defer payments
of interest, the Subordinated Debt Securities would be treated as reissued for
OID purposes and the sum of the remaining interest payments on the
Subordinated Debt Securities would thereafter be treated as OID, which would
accrue, and be includible in a US Holder's taxable income, on an economic
accrual basis (regardless of the US Holder's method of accounting for income
tax purposes) over the remaining term of the Subordinated Debt Securities
(including any period of interest deferral), without regard to the timing of
payments under the Subordinated Debt Securities. (Subsequent distributions of
interest on the Subordinated Debt Securities generally would not be taxable.)
The amount of OID that accrued in any period would generally equal the amount
of interest that accrued on the Subordinated Debt Securities in that period at
the stated interest rate. Consequently, during any period of interest
deferral, US Holders will include OID in gross income in advance of the
receipt of cash, and a US Holder which disposes of a Capital Security prior to
the record date for payment of distributions on the Subordinated Debt
Securities following that period will be subject to income tax on OID accrued
through the date of disposition (and not previously included in income), but
will not receive cash from the Trust with respect to that OID.
If the Company's option to defer payments of interest were not treated as
remote, the Subordinated Debt Securities would be treated as initially issued
with OID in an amount equal to the aggregate stated interest over the term of
the Subordinated Debt Securities. That OID would generally be includible in a
US Holder's taxable income, over the term of the Subordinated Debt Securities,
on an economic accrual basis.
CHARACTERIZATION OF INCOME
Because the income underlying the Capital Securities will not be
characterized as dividends for income tax purposes, corporate holders of
Capital Securities will not be entitled to a dividends-received deduction for
any income recognized with respect to the Capital Securities.
MARKET DISCOUNT AND BOND PREMIUM
Holders of Capital Securities other than Initial Holders may be considered
to have acquired their undivided interests in the Subordinated Debt Securities
with market discount or acquisition premium (as each phrase is defined for
income tax purposes).
RECEIPT OF SUBORDINATED DEBT SECURITIES OR CASH UPON LIQUIDATION OF THE TRUST
The Company will have the right to distribute Subordinated Debt Securities
to holders in exchange for the Capital Securities and in liquidation of the
Trust. Except as discussed below, such a distribution would not be a taxable
event for income tax purposes, and each US Holder would have an aggregate
adjusted basis in its Subordinated Debt Securities for income tax purposes
equal to such holder's aggregate adjusted basis in its Capital Securities. For
income tax purposes, a US Holder's holding
65
<PAGE>
period in the Subordinated Debt Securities received in such a liquidation of
the Trust would include the period during which the Capital Securities were
held by the holder. If, however, the relevant event is a Tax Event which
results in the Trust being treated as an association taxable as a corporation,
the distribution would likely constitute a taxable event to US Holders of the
Capital Securities for income tax purposes.
Under certain circumstances described herein (see "Description of the
Capital Securities"), the Subordinated Debt Securities may be redeemed for
cash and the proceeds of such redemption distributed to holders in redemption
of their Capital Securities. Such a redemption would be taxable for income tax
purposes, and a US Holder would recognize gain or loss as if it had sold the
Capital Securities for cash. See "--Sales of Capital Securities" below.
SALES OF CAPITAL SECURITIES
A US Holder that sells Capital Securities will recognize gain or loss equal
to the difference between its adjusted basis in the Capital Securities and the
amount realized on the sale of such Capital Securities. A US Holder's adjusted
basis in the Capital Securities generally will be its initial purchase price,
increased by OID previously included (or currently includible) in such
holder's gross income to the date of disposition, and decreased by payments
received on the Capital Securities (other than any interest received with
respect to the period prior to the effective date of the Company's first
exercise of its option to defer payments of interest). Any such gain or loss
generally will be capital gain or loss, and generally will be a long-term
capital gain or loss if the Capital Securities have been held for more than
one year.
A holder who disposes of his Capital Securities between record dates for
payments of distributions thereon will be required to include accrued but
unpaid interest (or OID) on the Subordinated Debt Securities through the date
of disposition in its taxable income for income tax purposes (notwithstanding
that the holder may receive a separate payment from the purchaser with respect
to accrued interest), and to deduct that amount from the sales proceeds
received (including the separate payment, if any, with respect to accrued
interest) for the Capital Securities (or as to OID only, to add such amount to
such holder's adjusted tax basis in its Capital Securities). To the extent the
selling price is less than the holder's adjusted tax basis (which will include
accrued but unpaid OID, if any), a holder will recognize a capital loss.
Subject to certain limited exceptions, capital losses cannot be applied to
offset ordinary income for income tax purposes.
NON-US HOLDERS
The following discussion applies to an Initial Holder who is not a US Holder
(a "Non-US Holder").
Payments to a holder of a Capital Security which is a Non-US Holder will
generally not be subject to withholding of income tax, provided that (a) the
beneficial owner of the Capital Security does not (directly or indirectly,
actually or constructively) own 10% or more of the total combined voting power
of all classes of stock of the Company entitled to vote, (b) the beneficial
owner of the Capital Security is not a controlled foreign corporation that is
related to the Company through stock ownership, and (c) either (I) the
beneficial owner of the Capital Securities certifies to the Trust or its
agent, under penalties of perjury, that it is a Non-US Holder and provides its
name and address, or (II) a securities clearing organization, bank or other
financial institution that holds customers' securities in the ordinary course
of its trade or business (a "Financial Institution"), and holds the Capital
Security in such capacity, certifies to the Trust or its agent, under
penalties of perjury, that such a statement has been received from the
beneficial owner by it or by another Financial Institution between it and the
beneficial owner in the chain of ownership, and furnishes the Trust or its
agent with a copy thereof.
66
<PAGE>
As discussed above (see "Description of the Capital Securities--Tax Event
Redemption"), changes in legislation affecting the income tax consequences of
the Subordinated Debt Securities are possible, and could adversely affect the
ability of the Company to deduct the interest payable on the Subordinated Debt
Securities. Moreover, any such legislation could, as the Proposed Legislation
would have, adversely affect Non-US Holders by characterizing income derived
from the Subordinated Debt Securities as dividends, generally subject to a 30%
income tax (on a withholding basis) when paid to a Non-US Holder, rather than
as interest which, as discussed above, is generally exempt from income tax in
the hands of a Non-US Holder.
A Non-US Holder of a Capital Security will generally not be subject to
withholding of income tax on any gain realized upon the sale or other
disposition of a Capital Security.
A Non-US Holder which holds Capital Securities in connection with the active
conduct of a United States trade or business will be subject to income tax on
all income and gains recognized with respect to its proportionate share of the
Subordinated Debt Securities.
INFORMATION REPORTING
In general, information reporting requirements will apply to payments made
on, and proceeds from the sale of, Capital Securities held by a noncorporate
US Holder within the United States. In addition, payments made on, and
payments of the proceeds from the sale of, Capital Securities to or through
the United States office of a broker are subject to information reporting
unless the holder thereof certifies as to its non-United States status or
otherwise establishes an exemption from information reporting and backup
withholding (see "--Backup Withholding" below). Taxable income on the Capital
Securities for a calendar year should be reported to US Holders on Forms 1099
by the following January 31st.
BACKUP WITHHOLDING
Payments made on, and proceeds from the sale of, the Capital Securities may
be subject to a "backup" withholding tax of 31% unless the holder complies
with certain identification or exemption requirements. Any amounts so withheld
will be allowed as a credit against the holder's income tax liability, or
refunded, provided the required information is provided to the United States
Internal Revenue Service.
* * *
THE PRECEDING DISCUSSION IS ONLY A SUMMARY AND DOES NOT ADDRESS THE
CONSEQUENCES TO A PARTICULAR HOLDER OF THE PURCHASE, OWNERSHIP AND DISPOSITION
OF CAPITAL SECURITIES. POTENTIAL HOLDERS OF CAPITAL SECURITIES ARE URGED TO
CONTACT THEIR OWN TAX ADVISORS TO DETERMINE THEIR PARTICULAR TAX CONSEQUENCES.
ERISA CONSIDERATIONS
Each fiduciary of a pension, profit-sharing or other employee benefit plan
subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA") (a "Plan"), should consider the fiduciary standards of ERISA in the
context of the Plan's particular circumstances before authorizing an
investment in the Capital Securities. Accordingly, among other factors, the
fiduciary should consider whether the investment would satisfy the prudence
and diversification requirements of ERISA and would be consistent with the
documents and instruments governing the Plan.
Section 406 of ERISA and Section 4975 of the Code prohibit Plans, as well as
individual retirement accounts and Keogh plans subject to Section 4975 of the
Code (also "Plans"), from engaging in certain transactions involving "plan
assets" with persons who are "parties in interest"
67
<PAGE>
under ERISA or "disqualified persons" under the Code ("Parties in Interest")
with respect to such Plan. A violation of these "prohibited transaction" rules
may result in an excise tax or other liabilities under ERISA and/or Section
4975 of the Code for such persons, unless exemptive relief is available under
an applicable statutory or administrative exemption. Employee benefit plans
that are governmental plans (as defined in Section 3(32) of ERISA), certain
church plans (as defined in Section 3(33) of ERISA) and foreign plans (as
described in Section 4(b)(5) of ERISA) are not subject to the requirements of
ERISA or Section 4975 of the Code.
Under a regulation (the "Plan Assets Regulation") issued by the U.S.
Department of Labor (the "DOL"), the assets of the Trust would be deemed to be
"plan assets" of a Plan for purposes of ERISA and Section 4975 of the Code if
"plan assets" of the Plan were used to acquire an equity interest in such
Trust and no exception were applicable under the Plan Assets Regulation. An
"equity interest" is defined under the Plan Assets Regulation as any interest
in an entity other than an instrument which is treated as indebtedness under
applicable local law and which has no substantial equity features and
specifically includes a beneficial interest in a trust.
Pursuant to an exception contained in the Plan Assets Regulation, the assets
of the Trust would not be deemed to be "plan assets" of investing Plans if,
immediately after the most recent acquisition of any equity interest in the
Trust, less than 25% of the value of each class of equity interests in the
Trust were held by Plans, other employee benefit plans not subject to ERISA or
Section 4975 of the Code (such as governmental, church and foreign plans), and
entities holding assets deemed to be "plan assets" of any Plan (collectively,
"Benefit Plan Investors"). No assurance can be given by the Initial Purchasers
that the value of the Capital Securities held by Benefit Plan investors will
be less than 25% of the total value of such Capital Securities at the
completion of the initial offering or thereafter, and no monitoring or other
measures will be taken with respect to the satisfaction of the conditions to
this exception. All of the Common Securities will be purchased and held by the
Company.
Certain transactions involving the Trust could be deemed to constitute
direct or indirect prohibited transactions under ERISA and Section 4975 of the
Code with respect to a Plan if the Capital Securities of the Trust were
acquired with "plan assets" of such Plan and assets of the Trust were deemed
to be "plan assets" of Plans investing in the Trust. For example, if the
Company is a Party in interest with respect to an investing Plan (either
directly or by reason of its ownership of its subsidiaries), extensions of
credit between the Company and the Trust (as represented by the Subordinated
Debt Securities and the Guarantees) would likely be prohibited by Section
406(a)(1)(B) of ERISA and Section 4975(c)(1)(B) of the Code, unless exemptive
relief were available under an applicable administrative exemption (see
below).
The DOL has issued five prohibited transaction class exemptions ("PTCEs")
that may provide exemptive relief for direct or indirect prohibited
transactions resulting from the purchase or holding of the Capital Securities,
assuming that assets of the Trust were deemed to be "plan assets" of Plans
investing in the Trust (see above). Those class exemptions are PTCE 96-23 (for
certain transactions determined by in-house asset managers), PTCE 95-60 (for
certain transactions involving insurance company general accounts), PTCE 91-38
(for certain transactions involving bank collective investment funds), PTCE
90-1 (for certain transactions involving insurance company separate accounts),
and PTCE 84-14 (for certain transactions determined by independent qualified
asset managers).
Because the Capital Securities may be deemed to be equity interests in the
Trust for purposes of applying ERISA and Section 4975 of the Code, the Capital
Securities may not be purchased or held by any Plan, any entity whose
underlying assets include "plan assets" by reason of any Plan's investment in
the entity (a "Plan Asset Entity") or any person investing "plan assets" of
any Plan, unless such purchaser or holder is eligible for the exemptive relief
available under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14. Any purchaser or
holder of the Capital Securities or any interest therein will be deemed to
have represented by its purchase and holding thereof that it either (a) is not
a Plan or a
68
<PAGE>
Plan Asset Entity and is not purchasing such securities on behalf of or with
"plan assets" of any Plan or (b) is eligible for the exemptive relief
available under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 with respect to such
purchase or holding. See "Notice to Investors" herein.
Due to the complexity of these rules and the penalties that may be imposed
upon persons involved in non-exempt prohibited transactions, it is
particularly important that fiduciaries or other persons considering
purchasing Capital Securities on behalf of or with "plan assets" of any Plan
consult with their counsel regarding the potential consequences if the assets
of the Trust were deemed to be "plan assets" and the availability of exemptive
relief under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14.
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the New Capital
Securities will be passed upon on behalf of the Trust by Morris, Nichols,
Arsht & Tunnell, special Delaware counsel to the Trust. The validity under
Wisconsin law of the Subordinated Debt Securities and the Guarantee will be
passed upon for M&I by Godfrey & Kahn, S.C., Milwaukee, Wisconsin. Certain
United States federal income tax matters have been, and will be in connection
with the Exchange Offer, passed upon for M&I and the Trust by Godfrey & Kahn,
S.C.
INDEPENDENT PUBLIC ACCOUNTANTS
The consolidated financial statements of the Company and its subsidiaries
included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1996, have been audited by Arthur Andersen LLP, independent
public accountants, as set forth in their report therein and herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon the authority of such firm
as experts in accounting and auditing.
69
<PAGE>
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFOR-
MATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER MADE HEREBY
EXCEPT AS CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, NO SUCH INFORMA-
TION OR REPRESENTATIONS SHOULD BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY, THE TRUST, PROSPECTUS OR ANY OF THEIR RESPECTIVE AGENTS. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIR-
CUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE INFOR-
MATION SET FORTH HEREIN OR IN THE AFFAIRS OF THE COMPANY OR THE TRUST SINCE
THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, THE CAPITAL SECURITIES BY ANYONE IN ANY JU-
RISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information..................................................... 6
Incorporation of Certain Documents by Reference........................... 7
Summary................................................................... 8
Risk Factors.............................................................. 16
Capitalization............................................................ 22
Ratio of Earnings to Fixed Charges........................................ 22
Accounting Treatment...................................................... 23
Use of Proceeds........................................................... 23
The Trust................................................................. 23
Marshall & Ilsley Corporation............................................. 24
The Exchange Offer........................................................ 26
Description of the Capital Securities..................................... 34
Description of the Guarantee.............................................. 48
Description of the Subordinated Debt Securities........................... 51
Effect of Obligations Under the Subordinated Debt Securities and the
Guarantee................................................................ 61
Plan of Distribution...................................................... 62
United States Federal Income Taxation..................................... 63
ERISA Considerations...................................................... 67
Legal Matters............................................................. 69
Independent Public Accountants............................................ 69
</TABLE>
$200,000,000
M&I CAPITAL
TRUST A
7.65% CAPITAL TRUST PASS-THROUGH
SECURITIESSM (TRUPSSM)
(LIQUIDATION AMOUNT $1,000 PER
CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED,
AS DESCRIBED HEREIN, BY
MARSHALL & ILSLEY CORPORATION
LOGO
PROSPECTUS
DATED MARCH 7, 1997
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Sections 180.0850 to 180.0859 of the Wisconsin Statutes require a
corporation to indemnify any director or officer who is a party to any
threatened, pending or completed civil, criminal, administrative or
investigative action, suit, arbitration or other proceeding, whether formal or
informal, which involves foreign, federal, state or local law and which is
brought by or in the right of the corporation or by any other person. A
corporation's obligation to indemnify any such person includes the obligation
to pay any judgment, settlement, penalty, assessment, forfeiture or fine,
including any excise tax assessed with respect to an employee benefit plan,
and all reasonable expenses including fees, costs, charges, disbursements,
attorney's and other expenses except in those cases in which liability was
incurred as a result of the breach or failure to perform a duty which the
director or officer owes to the corporation and the breach or failure to
perform constitutes: (i) a willful failure to deal fairly with the corporation
or its shareholders in connection with a matter in which the director or
officer has a material conflict of interest; (ii) a violation of criminal law,
unless the person has reasonable cause to believe his conduct was lawful or
had no reasonable cause to believe his conduct was unlawful; (iii) a
transaction from which the person derived an improper personal profit; or (iv)
willful misconduct.
Unless otherwise provided in a corporation's articles of incorporation or
By-Laws or by written agreement, an officer or director seeking
indemnification is entitled to indemnification if approved in any of the
following manners: (i) by majority vote of a disinterested quorum of the board
of directors, or if such quorum of disinterested directors cannot be obtained,
by a majority vote of a committee of two or more disinterested directors; (ii)
by independent legal counsel; (iii) by a panel of three arbitrators; (iv) by
affirmative vote of shareholders; (v) by a court; or (vi) with respect to any
additional right to indemnification granted by any other method permitted in
Section 180.0858 of the Wisconsin Statutes.
Reasonable expenses incurred by a director or officer who is a party to a
proceeding may be reimbursed by a corporation at such time as the director or
officer furnishes to the corporation written affirmation of his good faith
belief that he has not breached or failed to perform his duties and a written
undertaking to repay any amounts advanced if it is determined that
indemnification by the corporation is not required.
The indemnification provisions of Sections 180.0850 to 180.0859 are not
exclusive. A corporation may expand an officer's or director's right to
indemnification (i) in its articles of incorporation or by-laws; (ii) by
written agreement; (iii) by resolution of its board of directors; or (iv) by
resolution of a majority of all of the corporation's voting shares then issued
and outstanding.
As permitted by Section 180.0858, M&I has adopted indemnification provisions
in its By-Laws which closely track the statutory indemnification provisions
with certain exceptions. In particular, Section 7.1 of M&I's By-Laws, among
other items, provides that (i) any individual shall be indemnified unless it
is proven by a final judicial adjudication that indemnification is prohibited
and (ii) payment or reimbursement of expenses, subject to certain limitations,
will be mandatory rather than permissive. M&I has purchased directors' and
officers' liability insurance which insures M&I's officers and directors
against certain liabilities which may arise under the Securities Act of 1933.
Under the Declaration, M&I will agree to indemnify each of the Trustees of
the Trust, and to hold the Trustees harmless against, any loss, damage,
claims, liability or expense incurred without negligence or bad faith on the
Trustees' part, arising out of or in connection with the acceptance or
administration of the Declaration, including the costs and expenses of
defending themselves against any claim or liability in connection with the
exercise or performance of any of their powers or duties under the
Declaration.
<PAGE>
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
<TABLE>
<C> <S>
4.1 Certificate of Trust of M&I Capital Trust A**
4.2 Amended and Restated Declaration of Trust dated as of December 9,
1996 among Marshall & Ilsley Corporation, as Sponsor, The Chase
Manhattan Bank, as Institutional Trustee, Chase Manhattan Bank
Delaware, as Delaware Trustee, J.B. Wigdale, G.H. Gunnlaugsson and
M.A. Hatfield, as Regular Trustees, and the holders from time to time
of undivided interests in the assets of the Trust**
4.3 Indenture, dated as of December 9, 1996, between Marshall & Ilsley
Corporation and The Chase Manhattan Bank, as Indenture Trustee**
4.4 First Supplemental Indenture, dated as of December 9, 1996, between
Marshall & Ilsley Corporation and The Chase Manhattan Bank, as
Indenture Trustee**
4.5 Form of Capital Security Certificate for M&I Capital Trust A
(included as Exhibit
A-2 to Exhibit 4.2)**
4.6 Capital Securities Guarantee Agreement, dated as of December 9, 1996,
between Marshall & Ilsley Corporation and The Chase Manhattan Bank,
as Guarantee Trustee**
4.7 Registration Rights Agreement dated December 2, 1996, by and among
Marshall & Ilsley Corporation, M&I Capital Trust A and Salomon
Brothers Inc, as Representative of the Initial Purchasers**
4.8 Form of Subordinated Debt Security (included as part of Exhibit
4.4)**
5.1 Opinion of Godfrey & Kahn, S.C. as to legality of the Junior
Subordinated Deferrable Interest Debentures to be issued by M&I
Capital Trust A and the Capital Securities Guarantee*
5.2 Opinion of Morris, Nichols, Arsht & Tunnell as to legality of the
7.65% Capital Trust Pass-through Securities to be issued by M&I
Capital Trust A*
Opinion of Godfrey & Kahn, S.C. as to certain federal income tax
8 matters*
12 Computation of ratio of earnings to fixed charges*
23.1 Consent of Arthur Andersen LLP*
23.2 Consent Godfrey & Kahn, S.C. (included in Exhibits 5.1 and 8)*
Consent of Morris, Nichols, Arsht & Tunnell (included in Exhibit
23.3 5.2)*
24 Powers of Attorney**
25.1 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to act
as trustee under the Indenture**
25.2 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to act
as trustee under the Amended and Restated Declaration of Trust**
25.3 Form T-1 Statement of Eligibility of The Chase Manhattan Bank under
the Capital Securities Guarantee Agreement for the benefit of the
holders of Capital Securities of M&I Capital Trust A**
99.1 Form of Letter of Transmittal*
99.2 Form of Notice of Guaranteed Delivery*
99.3 Form of Exchange Agent Agreement *
</TABLE>
- --------
* Filed herewith.
** Previously filed.
2
<PAGE>
ITEM 22. UNDERTAKINGS
Each of the undersigned Registrants hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of a Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d)
of the Securities Exchange Act of 1934) that is incorporated by reference
statement relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
each Registrant pursuant to the provisions, or otherwise, each Registrant has
been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and
therefore is unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by each Registrant of
expenses incurred or paid by a director, officer of controlling person of each
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, each Registrant will, unless in the opinion
of its counsel the matter has been settled by the controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
The undersigned Registrants hereby undertake to respond to requests for
information that is incorporated by reference into the Prospectus pursuant to
Item 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.
The undersigned Registrants hereby undertake to supply by means of a post-
effective amendment all information concerning a transaction, and the company
being acquired or involved therein, that was not the subject of and included
in the registration statement when it became effective.
3
<PAGE>
SIGNATURES
PURSUANT TO REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING A FORM S-4 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF MILWAUKEE, STATE OF WISCONSIN, ON MARCH 6, 1997.
MARSHALL & ILSLEY CORPORATION
(Registrant)
/s/ J.B. Wigdale
By: _________________________________
J.B. Wigdale
Chairman of the Board
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATED INDICATED:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ J.B. Wigdale Chairman of the Board and a March 6, 1997
____________________________________ Director (Chief Executive
J.B. Wigdale Officer)
/s/ G.H. Gunnlaugsson Executive Vice President and March 6, 1997
____________________________________ a Director (Chief
G.H. Gunnlaugsson Financial Officer)
/s/ P.R. Justiliano Senior Vice President and March 6, 1997
____________________________________ Corporate Controller
P.R. Justiliano (Principal Accounting
Officer)
Directors: Oscar C. Boldt, Wendell F. Bueche, Glenn A. Francke, G.H.
Gunnlaugsson, Burleigh E. Jacobs, Jack F. Kellner, James F. Kress, D.J.
Kuester, Edward L. Meyer, Jr., Don R. O'Hare, San W. Orr, Jr., Peter M.
Platten, III, J.A. Puelicher, Stuart W. Tisdale, J.B. Wigdale and James O.
Wright.
/s/ M.A. Hatfield As Attorney-in-Fact*
____________________________________
M.A. Hatfield
</TABLE>
- --------
* Pursuant to authority granted by powers of attorney, copies of which are
filed herewith.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, M&I CAPITAL
TRUST A CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL
THE REQUIREMENTS FOR FILING ON FORM S-4 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF MILWAUKEE, AND STATE OF WISCONSIN ON MARCH 6, 1997.
M&I Capital Trust A
/s/ G.H. Gunnlaugsson
By: _________________________________
G.H. Gunnlaugsson
Regular Trustee
/s/ M.A. Hatfield
By: _________________________________
M.A. Hatfield
Regular Trustee
4
<PAGE>
Exhibit 5.1
[Godfrey & Kahn, S.C. letterhead]
March 7, 1997
Marshall & Ilsley Corporation
770 North Water Street
Milwaukee, WI 53202
Re: Registration Statement on Form S-4 for Capital Trust Securities
Ladies and Gentlemen:
We have acted as counsel to Marshall & Ilsley Corporation, a Wisconsin
corporation (the "Company") and Sponsor of M&I Capital Trust A, a Delaware
business trust (the "Trust"), in connection with a Registration Statement on
Form S-4 (the "Registration Statement") relating to: (i) the proposed issuance
by the Trust of $200,000,000 aggregate Liquidation Amount of the Trust's 7.65%
Capital Securities due December 1, 2026 (the "New Capital Securities")
registered under the Securities Act of 1933, as amended (the "Securities Act"),
in exchange for up to $200,000,000 aggregate Liquidation Amount of the Trust's
outstanding 7.65% Capital Securities due December 1, 2026 (the "Old Capital
Securities"); (ii) the proposed issuance by the Company to the Trust of
$206,186,000 aggregate principal amount of the Company's 7.65% Junior
Subordinated Deferrable Interest Debentures (the "New Subordinated Debt
Securities") registered under the Securities Act, in exchange for up to
$206,186,000 aggregate principal of the Company's outstanding 7.65% Junior
Subordinated Deferrable Interest Debentures (the "Old Subordinated Debt
Securities"); and (iii) the Company's guarantee (the "New Guarantee"), which
guarantees the payment of Distributions and payments on liquidation or
redemption of the New Capital Securities, registered under the Securities Act,
in exchange for the guarantee (the "Old Guarantee") which guarantees the payment
of Distributions and payments on liquidation or redemption of the Old Capital
Securities.
The New Capital Securities are issuable under an Amended and Restated Trust
Agreement dated as of December 9, 1996 (the "Trust Agreement") between the
Company, as Sponsor, The Chase Manhattan Bank, as Delaware Trustee and
Institutional Trustee, and the Regular Trustees named therein; the New
Subordinated Debt Securities are issuable under an Indenture dated as of
December 9, 1996 (the "Indenture") between the Company and The Chase Manhattan
Bank, as Trustee; and the New Guarantee is issuable under the Guarantee
Agreement dated as of December 9, 1996 (the "Guarantee Agreement") between the
Company and The Chase Manhattan Bank, as Guarantee Trustee.
<PAGE>
Marshall & Ilsley Corporation
March 7, 1997
Page 2
We have examined such documents and have reviewed such questions of law as
we have considered necessary and appropriate for the purposes of our opinions
set forth below. In rendering our opinions, we have assumed the authenticity of
all documents submitted to us as originals, the genuineness of all signatures
and the conformity to authentic originals of all documents submitted to us as
copies. We have also assumed the legal capacity for all purposes relevant hereto
of all natural persons and, with respect to all parties to agreements or
instruments relevant hereto other than the Company and the Trust, that such
parties had the requisite power and authority (corporate or otherwise) to
execute, deliver and perform such agreements or instruments, that such
agreements or instruments have been duly authorized by all requisite action
(corporate or otherwise), executed and delivered by such parties and that such
agreements or instruments are the valid, binding and enforceable obligations of
such parties. As to questions of fact material to our opinions, we have relied
upon certificates of officers of the Company and the Trust and of public
officials. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in the Trust Agreement, the Indenture and the
Guarantee Agreement, as applicable.
Based on the foregoing, we are of the opinion that:
(1) The New Subordinated Debt Securities have been duly authorized by all
requisite corporate action and, when executed and authenticated as specified in
the Indenture and delivered against surrender of the Company and cancellation of
a like amount of Old Subordinated Debt Securities in the manner described in the
Registration Statement, the New Subordinated Debt Securities will constitute
valid and binding obligations of the Company, enforceable in accordance with
their terms; and
(2) The New Guarantee has been duly authorized by all requisite corporate
action of the Company and constitutes the valid and binding obligation of the
Company, enforceable in accordance with its terms.
The opinions set forth above are subject to the following qualifications
and exceptions:
(a) Our above opinions are subject to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or other similar law of
general application affecting creditors' rights; and
(b) Our above opinions are subject to the effect of general principles of
equity, including (without limitation) concepts of materiality, reasonableness,
good faith and fair dealing, and other similar doctrines affecting the
enforceability of agreements generally (regardless of whether considered in a
proceeding in equity or at law).
Our opinions expressed above are limited to the laws of the State of
Wisconsin and the federal laws of the United States. With certain exceptions,
we are members of the Bar of the
<PAGE>
Marshall & Ilsley Corporation
March 7, 1997
Page 3
State of Wisconsin and do not hold ourselves out as experts on the law of any
state other than Wisconsin. Regardless of references herein or in any document
mentioned herein to the laws of another state, our opinion does not relate to
the laws of any jurisdiction other than Wisconsin and the federal laws of the
United States. We have assumed the applicability of Wisconsin law to the
operative documents notwithstanding any choice of law provisions to the contrary
or rules relating to conflicts of laws in Wisconsin.
We hereby consent to your filing of this opinion as an exhibit to the
Registration Statement, and to the reference to our firm under the caption
"Legal Matters" contained in the Prospectus included therein.
Very truly yours,
/s/ Godfrey & Kahn, S.C.
GODFREY & KAHN, S.C.
MW1-67521-2
<PAGE>
Exhibit 5.2
[Letterhead of Morris, Nichols, Arsht & Tunnell]
March 7, 1997
M&I Capital Trust A
c/o Marshall & Ilsley Corporation
770 North Water Street
Milwaukee, Wisconsin 53202
Re: M&I Capital Trust A
-------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel to M&I Capital Trust A, a
Delaware statutory business trust (the "Trust"), in connection with certain
matters relating to the creation of the Trust and the proposed issuance of
Exchange Capital Securities to beneficial owners pursuant to and as described in
Registration Statement No. 333-19809 (and the Prospectus forming a part thereof)
on Form S-4 filed with the Securities and Exchange Commission on January 15,
1997, as amended by Pre-Effective Amendment No. 1 thereto (as so amended, the
"Registration Statement"). Capitalized terms used herein and not otherwise
herein defined are used as defined in the Amended and Restated Declaration of
Trust of the Trust dated as of December 9, 1996 (the "Governing Instrument").
In rendering this opinion, we have examined and relied upon copies of the
following documents in the forms provided to us: the Certificate of Trust of the
Trust as filed in the Office of the Secretary of State of the State of Delaware
(the "State Office") on December 2, 1996 (the "Certificate of Trust"); a
Declaration of Trust of the Trust dated as of December 2, 1996 (the "Original
Governing Instrument"); the Governing Instrument; the Indenture dated as of
December 9, 1996 between Marshall & Ilsley Corporation, a Wisconsin corporation
("M&I"), and The Chase Manhattan Bank, as Trustee, and the form of First
Supplemental Indenture to be entered into in connection therewith; the Guarantee
Agreement to be entered into between M&I and The Chase Manhattan Bank, as
Trustee, relating to the Exchange Capital Securities; the Registration Rights
Agreement dated December 2, 1996 among the Trust, M&I and the "Initial
Purchasers" (as defined therein) (the "Registration Rights Agreement"); the
Registration Statement; and a certificate of good standing of the Trust obtained
as of a recent date from the State Office. In such examinations, we have assumed
the genuineness of all signatures, the conformity to original documents of all
documents submitted to us as drafts or copies or forms of documents to be
executed and the legal capacity of natural persons to complete the execution of
documents. We have further assumed for purposes of this opinion: (i) the due
formation or organization, valid existence and good standing of each entity
(other than the Trust) that is a
<PAGE>
M&I Capital Trust A
March 7, 1997
Page 2
party to any of the documents reviewed by us under the laws of the jurisdiction
of its respective formation or organization; (ii) the due authorization,
execution and delivery by, or on behalf of, each of the parties thereto of the
above-referenced documents (including, without limitation, the due
authorization, execution and delivery of the Governing Instrument and the
Registration Rights Agreement prior to the first issuance of Exchange Capital
Securities); (iii) that no event has occurred subsequent to the filing of the
Certificate of Trust that would cause a dissolution or liquidation of the Trust
under the Original Governing Instrument or the Governing Instrument, as
applicable; (iv) that the activities of the Trust have been and will be
conducted in accordance with the Original Governing Instrument or the Governing
Instrument, as applicable, and the Delaware Business Trust Act, 12 Del. C. (S)
3801 et seq. (the "Delaware Act"); (v) that each Person that will acquire
Exchange Capital Securities in the "Exchange Offer" (as defined in the
Registration Statement and as used herein, the "Exchange Offer") will validly
tender Initial Capital Securities in exchange therefor, that such Initial
Capital Securities will be duly accepted, and that such Person will duly receive
Exchange Capital Security Certificates in consideration thereof, all in
accordance with the terms and conditions of the Governing Instrument, the
Registration Statement and the Registration Rights Agreement and that the
Exchange Capital Securities are otherwise issued and sold to the Exchange
Capital Securities Holders in accordance with the terms, conditions,
requirements and procedures set forth in the Governing Instrument, the
Registration Statement and the Registration Rights Agreement; and (vi) that the
documents examined by us are in full force and effect, express the entire
understanding of the parties thereto with respect to the subject matter thereof
and have not been modified, supplemented or otherwise amended, except as herein
referenced. We have not reviewed any documents other than those identified above
in connection with this opinion, and we have assumed that there are no other
documents that are contrary to or inconsistent with the opinions expressed
herein. Further, we express no opinion with respect to, and assume no
responsibility for the contents of, the Registration Statement or any other
offering material relating to the Exchange Capital Securities. No opinion is
expressed herein with respect to the requirements of, or compliance with,
federal or state securities or blue sky laws. As to any fact material to our
opinion, other than those assumed, we have relied without independent
investigation on the above-referenced documents and on the accuracy, as of the
date hereof, of the matters therein contained.
Based on and subject to the foregoing, and limited in all respects to
matters of Delaware law, it is our opinion that:
1. The Trust is a duly created and validly existing business trust in good
standing under the laws of the State of Delaware.
2. The Exchange Capital Securities, upon issuance pursuant to the Exchange
Offer, will constitute validly issued and, subject to the qualifications set
forth in paragraph 3 below, fully paid and nonassessable beneficial interests in
the assets of the Trust.
<PAGE>
M&I Capital Trust A
March 7, 1997
Page 3
3. Under the Delaware Act and the terms of the Governing Instrument, each
Exchange Capital Security Holder of the Trust, in such capacity, will be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware; provided, however, we express no opinion with respect
to the liability of any Exchange Capital Security Holder who is, was or may
become a named Trustee of the Trust. Notwithstanding the foregoing, we note that
pursuant to Section 11.4 of the Governing Instrument, the Trust may withhold
amounts otherwise distributable to a Holder and pay over such amounts to the
applicable jurisdictions in accordance with federal, state and local law and any
amount withheld will be deemed to have been distributed to such Holder and that,
pursuant to the Governing Instrument, Exchange Capital Security Holders may be
obligated to make payments or provide indemnity or security under the
circumstances set forth therein.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name and reference to our opinion
under the heading "LEGAL MATTERS" in the Prospectus forming a part thereof. In
giving this consent, we do not thereby admit that we come within the category of
persons whose consent is required under Section 7 of the Securities Act of 1933,
as amended, or the rules and regulations of the Securities and Exchange
Commission thereunder. This opinion speaks only as of the date hereof and is
based on our understandings and assumptions as to present facts, and on our
review of the above-referenced documents and the application of Delaware law as
the same exist as of the date hereof, and we undertake no obligation to update
or supplement this opinion after the date hereof for the benefit of any person
or entity with respect to any facts or circumstances that may hereafter come to
our attention or any changes in facts or law that may hereafter occur of take
effect. This opinion is intended solely for the benefit of the addressee hereof
in connection with the matters contemplated hereby and may not be relied on by
any other person or entity or for any other purpose without our prior written
consent.
Very truly yours,
MORRIS, NICHOLS, ARSHT & TUNNELL
/s/ Morris, Nichols, Arsht & Tunnell
<PAGE>
Exhibit 8
[Godfrey & Kahn, S.C. Letterhead]
March 7, 1997
Marshall & Ilsley Corporation
780 North Water Street
Milwaukee, WI 53202
RE: Marshall & Ilsley Corporation
M&I Capital Trust A
$200,000,000 7.65% Capital Trust Pass-through
Securities/SM/ (TruPS/SM/)
Ladies and Gentlemen:
We have acted as special tax counsel to Marshall & Ilsley Corporation
("M&I") and to M&I Capital Trust A (the "Trust") in connection with the
Registration Statement (Form S-4) for the offer to exchange the Trust's
outstanding 7.65% Capital Securities for the Trust's 7.65% Capital Securities
which have been registered under the Securities Act of 1933 (the "Registration
Statement"). Terms not defined in this letter have the same meaning as in the
Registration Statement.
The purpose of this letter is to confirm the opinions contained in our
letter dated December 9, 1996 that (i) the Trust will be characterized as a
grantor trust for U.S. federal income tax purposes and not as an association
subject to tax as a corporation and (ii) for U.S. federal income tax purposes,
the Subordinated Debt Securities will constitute indebtedness of the Company.
Further, it is our opinion that the statements contained in the Registration
Statement under the caption "United States Federal Income Taxation" and "ERISA
Considerations" do not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
The opinion expressed above is based on existing provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), existing Treasury Regulations,
published interpretations of the Code and such Treasury Regulations by the
Internal Revenue Service, and existing court decisions, any of which could be
changed at any time. Any such changes may or may not be
<PAGE>
Marshall & Ilsley Corporation
March 7, 1997
Page 2
retroactively applied. We note that there is no authority directly on point
dealing with securities such as the Capital Securities or transactions of the
type described herein and that our opinion is not binding on the Internal
Revenue Service or the courts, either of which could take a contrary position.
Attorneys involved in the preparation of this opinion are admitted to
practice law in the State of Wisconsin and we do not purport to be experts on,
or express any opinion herein concerning any law other than the laws of the
State of Wisconsin and the federal laws of the United States of America.
This opinion is not being delivered for the benefit of, nor may it be
relied upon by, any party to which it is not specifically addressed. We consent
to the filing of this opinion as an exhibit to the Registration Statement. In
giving this consent, however, we do not admit that we are "experts" within the
meaning of Section 11 of the Securities Act of 1933, as amended, or within the
category of persons whose consent is required by Section 7 of said Act.
Very truly yours,
/s/ Godfrey & Kahn, S.C.
GODFREY & KAHN, S.C.
<PAGE>
Exhibit 12
Marshall & Ilsley Corporation
Computation of Ratio of Earnings to Fixed Charges
($000's)
<TABLE>
<CAPTION>
Years Ended December 31,
------------------------------------------------
1996 1995 1994 1993 1992
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Earnings:
Earnings before income taxes, extraordinary items and
cumulative effect of changes in accounting principles.. $313,141 $299,879 $167,803 $264,584 $231,792
Fixed charges, excluding interest on deposits........... 113,515 108,683 77,074 47,905 50,687
-------- -------- -------- -------- --------
Earnings including fixed charges but excluding
interest on deposits................................... 426,656 408,562 244,877 312,489 282,479
Interest on deposits.................................... 360,838 331,734 255,861 272,100 334,443
-------- -------- -------- -------- --------
Earnings including fixed charges and interest
on deposits............................................ $787,494 $740,296 $500,738 $584,589 $616,922
======== ======== ======== ======== ========
Fixed Charges:
Interest Expense:
Borrowings:
Short-term............................................. $ 62,071 $ 47,740 $ 39,681 $ 18,010 $ 17,606
Long-term.............................................. 42,808 53,709 30,537 23,088 26,439
One-third of rental expense for all operating
leases (the amount deemed representative of
the interest factor)................................... 8,636 7,234 6,856 6,807 6,642
-------- -------- -------- -------- --------
Fixed charges excluding interest on deposits............ 113,515 108,683 77,074 47,905 50,687
Interest on deposits.................................... 360,838 331,734 255,861 272,100 334,443
-------- -------- -------- -------- --------
Fixed charges including interest on deposits............ $474,353 $440,417 $332,935 $320,005 $385,130
======== ======== ======== ======== ========
Ratio of Earnings to Fixed Charges:
Excluding interest on deposits.......................... 3.76x 3.76x 3.18x 6.52x 5.57x
Including interest on deposits.......................... 1.66x 1.68x 1.50x 1.83x 1.60x
</TABLE>
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-4 registration statement to register Capital Securities
of M&I Capital Trust A of our report dated January 31, 1997, included in the
Marshall & Ilsley Corporation and subsidiaries' Form 10-K for the year ended
December 31, 1996, and to all references to our Firm included in such
registration statement.
Milwaukee, Wisconsin ARTHUR ANDERSEN LLP
March 3, 1997
<PAGE>
LETTER OF TRANSMITTAL
M&I CAPITAL TRUST A
OFFER TO EXCHANGE ITS
7.65% CAPITAL SECURITIES
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING
7.65% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
PURSUANT TO THE PROSPECTUS DATED MARCH 7, 1997
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON APRIL 10, 1997, UNLESS THE EXCHANGE OFFER IS
EXTENDED.
The Exchange Agent for the Exchange Offer is:
THE CHASE MANHATTAN BANK
By Mail or Hand By Facsimile To Confirm by Telephone:
Delivery: Transmission:
Carlos Esteves: (212)
The Chase Manhattan (212) 638-7375 638-0828
Bank or
(212) 344-9367
55 Water Street, Second
Floor
Room 234--North
Building
New York, New York
10041
Attn: Carlos Esteves
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TO A NUMBER
OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. THE
INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF
TRANSMITTAL IS COMPLETED.
Capitalized terms used but not defined herein shall have the same meaning
given them in the Prospectus (as defined below).
This Letter of Transmittal is to be completed by holders of Old Capital
Securities (as defined below) either if Old Capital Securities are to be
forwarded herewith or if tenders of Old Capital Securities are to be made by
book-entry transfer to an account maintained by The Chase Manhattan Bank (the
"Exchange Agent") at The Depository Trust Company ("DTC") pursuant to the
procedures set forth in "The Exchange Offer--Procedures for Tendering Old
Capital Securities" in the Prospectus and an Agent's Message (as defined
herein) is not delivered.
Holders of Old Capital Securities whose certificates (the "Certificates")
for such Old Capital Securities are not immediately available or who cannot
deliver their Certificates and all other required documents to the Exchange
Agent on or prior to the Expiration Date (as defined in the Prospectus) or who
cannot complete the procedures for book-entry transfer on a timely basis, must
tender their Old Capital Securities according to the guaranteed delivery
procedures set forth in "The Exchange Offer--Procedures for Tendering Old
Capital Securities" in the Prospectus.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE
AGENT.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
<PAGE>
ALL TENDERING HOLDERS COMPLETE THIS BOX:
DESCRIPTION OF OLD CAPITAL SECURITIES TENDERED
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NAME(S) AND
ADDRESS(ES) OF
REGISTERED HOLDER OLD CAPITAL SECURITIES TENDERED
(FILL IN, IF BLANK) (ATTACH ADDITIONAL SIGNED SCHEDULE IF NECESSARY)
- ------------------------------------------------------------------------------------
AGGREGATE
LIQUIDIATION LIQUIDATION
CERTIFICATE AMOUNT TENDERED AMOUNT NUMBER OF
NUMBERS* (ATTACH TENDERED BENEFICIAL
(ATTACH ADDITIONAL ADDITIONAL LIST (IF LESS HOLDERS FOR
LIST IF NECESSARY) IF NECESSARY) THAN ALL)** WHOM HELD
---------------------------------------------------
<S> <C> <C> <C> <C>
$ $
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
TOTAL AMOUNT TENDERED: $ $
</TABLE>
* Need not be completed by book-entry holders. Such holders should check the
appropriate box below and provide the requested information.
** Need not be completed if tendering for exchange all Old Capital Securities
held. Old Capital Securities may be tendered in whole or in part in
denominations of $100,000 and integral multiples of $1,000 in excess
thereof, provided that if any Old Capital Securities are tendered for
exchange in part, the untendered principal amount thereof must be $100,000
or any integral multiple of $1,000 in excess thereof. All Old Capital
Securities held shall be deemed tendered unless a lesser number is
specified in this column.
(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY. SEE INSTRUCTION 1)
[_]CHECK HERE IF TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED BY BOOK-
ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT AT DTC
AND COMPLETE THE FOLLOWING:
Name of Tendering Institution: -------------------------------
DTC Account Number: -------------------------------
Transaction Code Number: -------------------------------
[_]CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF
TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE
FOLLOWING:
Name of Registered Holder: -------------------------------
Window Ticket Number (if any): -------------------------------
Date of Notice of Guaranteed Delivery:
-------------------------------
Institution which Guaranteed Delivery:
-------------------------------
If Guaranteed Delivery is to be made by book-entry transfer:
Name of Tendering Institution: -------------------------------
DTC Account Number: -------------------------------
Transaction Code Number: -------------------------------
2
<PAGE>
[_]CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED OLD CAPITAL
SECURITIES ARE TO BE RETURNED BY CREDITING THE DTC ACCOUNT NUMBER SET FORTH
ABOVE.
[_]CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD CAPITAL
SECURITIES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER
TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER") AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR
SUPPLEMENTS THERETO.
Name: ------------------------------------------------------
Address: ------------------------------------------------------
Telephone Number and Contact Person:
-------------------------------
LADIES AND GENTLEMEN:
The undersigned hereby tenders to M&I Capital Trust A, a Delaware business
trust (the "Trust") and Marshall & Ilsley Corporation, a Wisconsin
corporation, as Depositor ("M&I"), the above described aggregate Liquidation
Amount of the Trust's 7.65% Capital Securities due December 1, 2026 (the "Old
Capital Securities") in exchange for a like aggregate Liquidation Amount of
the Trust's 7.65% Capital Securities due December 1, 2026 (the "New Capital
Securities") which have been registered under the Securities Act of 1933 (the
"Securities Act"), upon the terms and subject to the conditions set forth in
the Prospectus dated March 7, 1997 (as the same may be amended or supplemented
from time to time, the "Prospectus"), receipt of which is acknowledged, and in
this Letter of Transmittal (which, together with the Prospectus, constitute
the "Exchange Offer").
Subject to and effective upon the acceptance for exchange of all or any
portion of the Old Capital Securities tendered herewith in accordance with the
terms and conditions of the Exchange Offer (including, if the Exchange Offer
is extended or amended, the terms and conditions of any such extension or
amendment), the undersigned hereby sells, assigns and transfers to or upon the
order of the Trust all right, title and interest in and to such Old Capital
Securities as are being tendered herewith. The undersigned hereby irrevocably
constitutes and appoints the Exchange Agent as its agent and attorney-in-fact
(with full knowledge that the Exchange Agent is also acting as agent of the
Trust and M&I in connection with the Exchange Offer) with respect to the
tendered Old Capital Securities, with full power of substitution (such power
of attorney being deemed to be an irrevocable power coupled with an interest),
subject only to the right of withdrawal described in the Prospectus, to: (i)
deliver Certificates for Old Capital Securities to the Trust or M&I together
with all accompanying evidences of transfer and authenticity to, or upon the
order of, the Trust, upon receipt by the Exchange Agent, as the undersigned's
agent, of the New Capital Securities to be issued in exchange for such Old
Capital Securities; (ii) present Certificates for such Old Capital Securities
for transfer, and to transfer the Old Capital Securities on the books of the
Trust; and (iii) receive for the account of the Trust all benefits and
otherwise exercise all rights of beneficial ownership of such Old Capital
Securities, all in accordance with the terms and conditions of the Exchange
Offer.
THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT THE UNDERSIGNED HAS FULL
POWER AND AUTHORITY TO TENDER, EXCHANGE, SELL, ASSIGN AND TRANSFER THE OLD
CAPITAL SECURITIES TENDERED HEREBY AND THAT, WHEN THE SAME ARE ACCEPTED FOR
EXCHANGE, THE TRUST WILL ACQUIRE GOOD, MARKETABLE AND UNENCUMBERED TITLE
THERETO, FREE AND CLEAR OF ALL LIENS, RESTRICTIONS,
3
<PAGE>
CHARGES AND ENCUMBRANCES, AND THAT THE OLD CAPITAL SECURITIES TENDERED HEREBY
ARE NOT SUBJECT TO ANY ADVERSE CLAIMS OR PROXIES. THE UNDERSIGNED WILL, UPON
REQUEST, EXECUTE AND DELIVER ANY ADDITIONAL DOCUMENTS DEEMED BY M&I, THE TRUST
OR THE EXCHANGE AGENT TO BE NECESSARY OR DESIRABLE TO COMPLETE THE EXCHANGE,
ASSIGNMENT AND TRANSFER OF THE OLD CAPITAL SECURITIES TENDERED HEREBY, AND THE
UNDERSIGNED WILL COMPLY WITH ITS OBLIGATIONS UNDER THE CAPITAL SECURITIES
REGISTRATION RIGHTS AGREEMENT. THE UNDERSIGNED HAS READ AND AGREES TO ALL OF
THE TERMS OF THE EXCHANGE OFFER.
The name(s) and address(es) of the registered holder of the Old Capital
Securities tendered hereby should be printed above, if they are not already
set forth above, as they appear on the Certificates representing such Old
Capital Securities. The Certificate number(s) and the Old Capital Securities
that the undersigned wishes to tender should be indicated in the appropriate
boxes above.
If any tendered Old Capital Securities are not exchanged pursuant to the
Exchange Offer for any reason, or if Certificates are submitted for more Old
Capital Securities than are tendered or accepted for exchange, Certificates
for such nonexchanged or nontendered Old Capital Securities will be returned
(or, in the case of Old Capital Securities tendered by book-entry transfer,
such Old Capital Securities will be credited to an account maintained at DTC),
without expense to the tendering holder promptly following the expiration or
termination of the Exchange Offer.
The undersigned understands that tenders of Old Capital Securities pursuant
to any one of the procedures described in "The Exchange Offer--Procedures for
Tendering Old Capital Securities" in the Prospectus and in the instructions
herein will, upon M&I's and the Trust's acceptance for exchange of such
tendered Old Capital Securities, constitute a binding agreement between the
undersigned, M&I and the Trust upon the terms and subject to the conditions of
the Exchange Offer. The undersigned recognizes that, under certain
circumstances set forth in the Prospectus, M&I and the Trust may not be
required to accept for exchange any of the Old Capital Securities tendered
hereby.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, the undersigned hereby directs that the New Capital
Securities be issued in the name(s) of the undersigned or, in the case of a
book-entry transfer of Old Capital Securities, that such New Capital
Securities be credited to the account indicated above maintained at DTC. If
applicable, substitute Certificates representing Old Capital Securities not
exchanged or not accepted for exchange will be issued to the undersigned or,
in the case of a book-entry transfer of Old Capital Securities, will be
credited to the account indicated above maintained at DTC. Similarly, unless
otherwise indicated under "Special Delivery Instructions," please deliver New
Capital Securities to the undersigned at the address shown below the
undersigned's signature.
BY TENDERING OLD CAPITAL SECURITIES AND EXECUTING THIS LETTER OF
TRANSMITTAL, THE UNDERSIGNED HEREBY REPRESENTS AND AGREES THAT: (i) THE
UNDERSIGNED (IF NOT A BROKER-DEALER) IS NOT AN "AFFILIATE" OF M&I OR THE
TRUST; (ii) ANY NEW CAPITAL SECURITIES TO BE RECEIVED BY THE UNDERSIGNED ARE
BEING ACQUIRED IN THE ORDINARY COURSE OF ITS BUSINESS; AND (iii) THE
UNDERSIGNED HAS NO ARRANGEMENT OR UNDERSTANDING WITH ANY PERSON TO PARTICIPATE
IN A DISTRIBUTION (WITHIN THE MEANING OF THE SECURITIES ACT) OF NEW CAPITAL
SECURITIES TO BE RECEIVED IN THE EXCHANGE OFFER. BY TENDERING OLD CAPITAL
SECURITIES PURSUANT TO THE EXCHANGE OFFER AND EXECUTING THIS LETTER OF
TRANSMITTAL, A HOLDER OF OLD CAPITAL SECURITIES WHICH IS A BROKER-DEALER
REPRESENTS AND AGREES, CONSISTENT WITH CERTAIN INTERPRETIVE LETTERS ISSUED BY
THE STAFF OF THE DIVISION OF CORPORATION FINANCE OF THE SECURITIES AND
EXCHANGE COMMISSION TO THIRD PARTIES, THAT: (i) SUCH OLD CAPITAL SECURITIES
HELD BY THE BROKER-DEALER ARE HELD ONLY AS A NOMINEE; OR (ii) SUCH OLD CAPITAL
4
<PAGE>
SECURITIES WERE ACQUIRED BY SUCH BROKER-DEALER FOR ITS OWN ACCOUNT AS A RESULT
OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES AND IT WILL DELIVER
THE PROSPECTUS MEETING THE REQUIREMENTS OF THE SECURITIES ACT IN CONNECTION
WITH ANY RESALE OF SUCH NEW CAPITAL SECURITIES (PROVIDED THAT, BY SO
ACKNOWLEDGING AND BY DELIVERING A PROSPECTUS, SUCH BROKER-DEALER WILL NOT BE
DEEMED TO ADMIT THAT IT IS AN "UNDERWRITER" WITHIN THE MEANING OF THE
SECURITIES ACT).
M&I AND THE TRUST HAVE AGREED THAT, SUBJECT TO THE PROVISIONS OF THE CAPITAL
SECURITIES REGISTRATION RIGHTS AGREEMENT, THE PROSPECTUS MAY BE USED BY A
PARTICIPATING BROKER-DEALER (AS DEFINED BELOW) IN CONNECTION WITH RESALES OF
NEW CAPITAL SECURITIES RECEIVED IN EXCHANGE FOR OLD CAPITAL SECURITIES, WHERE
SUCH OLD CAPITAL SECURITIES WERE ACQUIRED BY SUCH PARTICIPATING BROKER-DEALER
FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING
ACTIVITIES, FOR A PERIOD ENDING ONE YEAR AFTER THE ORIGINAL ISSUANCE OF THE
OLD CAPITAL SECURITIES. IN THAT REGARD, EACH BROKER-DEALER WHO ACQUIRED OLD
CAPITAL SECURITIES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING OR OTHER
TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER"), BY TENDERING SUCH OLD
CAPITAL SECURITIES AND EXECUTING THIS LETTER OF TRANSMITTAL, AGREES TO COMPLY
WITH APPLICABLE LAWS IN CONNECTION WITH OFFERS AND SALES BY WAY OF THIS
PROSPECTUS INCLUDING WITHOUT LIMITATION THE PROSPECTUS DELIVERY REQUIREMENTS
OF THE SECURITIES ACT, THE APPLICABLE REQUIREMENTS OF RULE 10B-5 AND UNDER THE
EXCHANGE ACT AND REGULATION M, AND THAT, UPON RECEIPT OF NOTICE FROM M&I OR
THE TRUST OF THE OCCURRENCE OF ANY EVENT OR THE DISCOVERY OF ANY FACT WHICH
MAKES ANY STATEMENT RESPECT OR WHICH CAUSES THE PROSPECTUS TO OMIT TO STATE A
MATERIAL FACT NECESSARY CONTAINED OR INCORPORATED BY REFERENCE IN THE
PROSPECTUS UNTRUE IN ANY MATERIAL IN ORDER TO MAKE THE STATEMENTS CONTAINED OR
INCORPORATED BY REFERENCE THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH
THEY WERE MADE, NOT MISLEADING OR OF THE OCCURRENCE OF CERTAIN OTHER EVENTS
SPECIFIED IN THE CAPITAL SECURITIES REGISTRATION RIGHTS AGREEMENT, SUCH
PARTICIPATING BROKER-DEALER WILL SUSPEND THE SALE OF NEW CAPITAL SECURITIES
PURSUANT TO THE PROSPECTUS UNTIL M&I AND THE TRUST HAVE AMENDED OR
SUPPLEMENTED THE PROSPECTUS TO CORRECT SUCH MISSTATEMENT OR OMISSION AND HAS
FURNISHED COPIES OF THE AMENDED OR SUPPLEMENTED PROSPECTUS TO THE
PARTICIPATING BROKER-DEALER OR M&I OR THE TRUST HAS GIVEN NOTICE THAT THE SALE
OF THE NEW CAPITAL SECURITIES MAY BE RESUMED, AS THE CASE MAY BE.
Holders of Old Capital Securities whose Old Capital Securities are accepted
for exchange will not receive accumulated distributions on such Old Capital
Securities for any period from and after the last Distribution Payment Date to
which distributions have been paid or duly provided for on such Old Capital
Securities prior to the original issue date of the New Capital Securities or,
if no such distributions have been paid or duly provided for, will not receive
any accumulated distributions on such Old Capital Securities, and the
undersigned waives the right to receive any distributions on such Old Capital
Securities accrued from and after such Distribution Payment Date or, if no
such distributions have been paid or duly provided for, from and after
December 9, 1996.
5
<PAGE>
All authority herein conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, personal representatives, trustees in bankruptcy,
legal representatives, successors and assigns of the undersigned. Except as
stated in the Prospectus, this tender is irrevocable.
PLEASE SIGN HERE PLEASE SIGN HERE
- ------------------------------------- -------------------------------------
Authorized Signature Authorized Signature
Name: _______________________________ Name: _______________________________
Title: ______________________________ Title: ______________________________
Address: ____________________________ Address: ____________________________
-------------------------------------
- ------------------------------------- Telephone Number: ___________________
Telephone Number: ___________________ Dated: ______________________________
Dated: ______________________________ -------------------------------------
- ------------------------------------- Taxpayer Identification or Social
Security Number
Taxpayer Identification or Social
Security Number
(NOTE: Signature(s) must be guaranteed if required by Instruction 2.) (Must
be signed by registered holder exactly as name(s) appear(s) on Certificate(s)
for the Old Capital Securities hereby tendered or on a security position
listing, or by any person(s) authorized to become the registered holder(s) by
endorsements and documents transmitted herewith, including such opinions of
counsel, certifications and other information as may be required by the Trust
or the Trustee for the Old Capital Securities to comply with the restrictions
on transfer applicable to the Old Capital Securities. If signature is by an
attorney-in-fact, executor, administrator, trustee, guardian, officer of a
corporation or another acting in a fiduciary capacity or representative
capacity, please set forth the signer's full title.) (See Instructions 2, 5
and 6) (Please complete substitute Form W-9 below)
6
<PAGE>
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 2 AND 5)
------------------------------------- Date: _______________________________
Authorized Signature
Name of Eligible Institution Guaranteeing Signature:
------------------------------------- Address: ____________________________
Capacity (full title): ______________ -------------------------------------
Telephone Number: ___________________ -------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
SPECIAL ISSUANCE INSTRUCTIONS (SEE INSTRUCTIONS 1, 5 AND 6)
(SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if New Capital
To be completed ONLY if the New Securities or any Old Capital
Capital Securities or any Old Securities that are not tendered are
Capital Securities that are not to be sent to someone other than the
tendered are to be issued in the registered holder of the Old Capital
name of someone other than the Securities whose name(s) appear(s)
registered holder of the Old Capital above, or to such registered
Securities whose name(s) appear(s) holder(s) at an address other than
above. that shown above.
Issue:
Mail:
[_] Old Capital Securities not
tendered
[_] Old Capital Securities not
tendered
[_] New Capital Securities, to:
[_] New Capital Securities, to:
Name(s): ____________________________
Name(s): ____________________________
Address: ____________________________ Address: ____________________________
-------------------------------------
-------------------------------------
Telephone Number: ___________________
Telephone Number: ___________________
------------------------------------- -------------------------------------
Taxpayer Identification or Social Taxpayer Identification or Social
Security Number Security Number
7
<PAGE>
INSTRUCTIONS
(FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER)
1. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be completed either if (a)
Certificates are to be forwarded herewith or (b) tenders are to be made
pursuant to the procedures for tender by book-entry transfer set forth in "The
Exchange Offer--Procedures for Tendering Old Capital Securities" in the
Prospectus and an Agent's Message is not delivered. Certificates, or timely
confirmation of a book-entry transfer of such Old Capital Securities into the
Exchange Agent's account at DTC, as well as this Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees and any other documents required by this Letter of
Transmittal, must be received by the Exchange Agent at its address set forth
herein on or prior to the Expiration Date. Tenders by book-entry transfer may
also be made by delivering an Agent's Message in lieu of this Letter of
Transmittal. The term "book-entry confirmation" means a timely confirmation of
book-entry transfer of Old Capital Securities into the Exchange Agent's
account at DTC. The term "Agent's Message" means a message, transmitted by DTC
to and received by the Exchange Agent and forming a part of a book-entry
confirmation, which states that DTC has received an express acknowledgement
from the tendering participant, which acknowledgement states that such
participant has received and agrees to be bound by the Letter of Transmittal
and that the Trust and M&I may enforce the Letter of Transmittal against such
participant. Old Capital Securities may be tendered in whole or in part in the
principal amount of $100,000 (100 Capital Securities) and integral multiples
of $1,000 in excess thereof, provided that, if any Old Capital Securities are
tendered for exchange in part, the untendered principal amount thereof must be
$100,000 (100 Capital Securities) or any integral multiple of $1,000 in excess
thereof.
Holders who wish to tender their Old Capital Securities and: (i) whose Old
Capital Securities are not immediately available; (ii) who cannot deliver
their Old Capital Securities, this Letter of Transmittal and all other
required documents to the Exchange Agent on or prior to the Expiration Date;
or (iii) who cannot complete the procedures for delivery by book-entry
transfer on a timely basis, may tender their Old Capital Securities by
properly completing and duly executing a Notice of Guaranteed Delivery
pursuant to the guaranteed delivery procedures set forth in "The Exchange
Offer--Procedures for Tendering Old Capital Securities" in the Prospectus.
Pursuant to such procedures: (i) such tender must be made by or through an
Eligible Institution (as defined below); (ii) a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form made
available by the Trust, must be received by the Exchange Agent on or prior to
the Expiration Date; and (iii) the Certificates (or a book-entry confirmation)
representing all tendered Old Capital Securities, in proper form for transfer,
together with a Letter of Transmittal (or facsimile thereof or Agent's Message
in lieu thereof), properly completed and duly executed, with any required
signature guarantees and any other documents required by this Letter of
Transmittal, must be received by the Exchange Agent within three New York
Stock Exchange, Inc. trading days after the date of execution of such Notice
of Guaranteed Delivery, all as provided in "The Exchange Offer--Procedures for
Tendering Old Capital Securities" in the Prospectus.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
facsimile or mail to the Exchange Agent and must include a guarantee by an
Eligible Institution in the form set forth in such Notice. For Old Capital
Securities to be properly tendered pursuant to the guaranteed delivery
procedure, the Exchange Agent must receive a Notice of Guaranteed Delivery on
or prior to the Expiration Date. As used herein and in the Prospectus,
"Eligible Institution" means a firm or other entity identified in Rule 17Ad-15
under the Exchange Act as "an eligible guarantor institution," including (as
such terms are defined therein): (i) a bank; (ii) a broker, dealer, municipal
securities broker or dealer or government securities broker or dealer; (iii) a
credit union; (iv) a national securities exchange, registered securities
association or clearing agency; or (v) a savings association that is a
participant in a Securities Transfer Association.
8
<PAGE>
THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
HOLDER AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, OR OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN
ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Neither M&I nor the Trust will accept any alternative, conditional or
contingent tenders. Each tendering holder, by execution of a Letter of
Transmittal (or facsimile thereof or Agent's Message in lieu thereof), waives
any right to receive any notice of the acceptance of such tender.
2. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required if: (i) this Letter of Transmittal is signed by the
registered holder (which shall include any participant in DTC whose name
appears on a security position listing as the owner of the Old Capital
Securities) of Old Capital Securities tendered herewith, unless such holder
has completed either the box entitled "Special Issuance Instructions" or the
box entitled "Special Delivery Instructions" above; or (ii) such Old Capital
Securities are tendered for the account of a firm that is an Eligible
Institution. In all other cases, an Eligible Institution must guarantee the
signature(s) on this Letter of Transmittal. See Instruction 5.
3. INADEQUATE SPACE. If the space provided in the box captioned "Description
of Old Capital Securities Tendered" is inadequate, the Certificate number(s)
and/or the principal amount of Old Capital Securities and any other required
information should be listed on a separate signed schedule which is attached
to this Letter of Transmittal.
4. PARTIAL TENDERS AND WITHDRAWAL RIGHTS. Tenders of Old Capital Securities
will be accepted only in the principal amount of $100,000 (100 Capital
Securities) and integral multiples of $1,000 in excess thereof, provided that
if any Old Capital Securities are tendered for exchange in part, the
untendered principal amount thereof must be $100,000 (100 Capital Securities)
or any integral multiple of $1,000 in excess thereof. If less than all the Old
Capital Securities evidenced by any Certificate submitted are to be tendered,
fill in the principal amount of Old Capital Securities which are to be
tendered in the box entitled "Liquidation Amount Tendered (if less than all)."
In such case, new Certificate(s) for the remainder of the Old Capital
Securities that were evidenced by your old Certificate(s) will be sent to the
holder of the Old Capital Security, promptly after the Expiration Date unless
the appropriate boxes on this Letter of Transmittal are completed. All Old
Capital Securities represented by Certificates delivered to the Exchange Agent
will be deemed to have been tendered unless otherwise indicated.
Except as otherwise provided herein, tenders of Old Capital Securities may
be withdrawn at any time on or prior to the Expiration Date. In order for a
withdrawal to be effective on or prior to that time, a written or facsimile
transmission of such notice of withdrawal must be timely received by the
Exchange Agent at its address set forth above or in the Prospectus on or prior
to the Expiration Date. Any such notice of withdrawal must specify the name of
the person who tendered the Old Capital Securities to be withdrawn, the
aggregate principal amount of Old Capital Securities to be withdrawn, and (if
Certificates for Old Capital Securities have been tendered) the name of the
registered holder of the Old Capital Securities as set forth on the
Certificate for the Old Capital Securities, if different from that of the
person who tendered such Old Capital Securities. If Certificates for the Old
Capital Securities have been delivered or otherwise identified to the Exchange
Agent, then prior to the physical release of such Certificates for the Old
Capital Securities, the tendering holder must submit the serial numbers shown
on the particular Certificates for the Old Capital Securities to be withdrawn
and the signature on the notice of withdrawal must be guaranteed by an
Eligible Institution, except in the case of Old Capital Securities tendered
for the account of an Eligible Institution. If Old Capital Securities have
been tendered pursuant to the procedures for book-entry transfer set forth in
"The Exchange Offer--Procedures for Tendering Old Capital Securities," the
notice of withdrawal must specify the name and number of the account at DTC to
be credited with the withdrawal of Old Capital Securities,
9
<PAGE>
in which case a notice of withdrawal will be effective if delivered to the
Exchange Agent by written or facsimile transmission. Withdrawals of tenders of
Old Capital Securities may not be rescinded. Old Capital Securities properly
withdrawn will not be deemed validly tendered for purposes of the Exchange
Offer, but may be retendered at any subsequent time on or prior to the
Expiration Date by following any of the procedures described in the Prospectus
under "The Exchange Offer--Procedures for Tendering Old Capital Securities."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by M&I and the Trust,
in their sole discretion, whose determination shall be final and binding on
all parties. M&I and the Trust, any affiliates or assigns of M&I and the
Trust, the Exchange Agent or any other person shall not be under any duty to
give any notification of any irregularities in any notice of withdrawal or
incur any liability for failure to give any such notification. Any Old Capital
Securities which have been tendered but which are withdrawn will be returned
to the holder thereof without cost to such holder promptly after withdrawal.
5. SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Old
Capital Securities tendered hereby, the signature(s) must correspond exactly
with the name(s) as written on the face of the Certificate(s) or on a security
position listing without alteration, enlargement or any change whatsoever.
If any of the Old Capital Securities tendered hereby are owned of record by
two or more joint owners, all such owners must sign this Letter of
Transmittal.
If any tendered Old Capital Securities are registered in different name(s)
on several Certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal (or facsimiles thereof or Agent's Message
in lieu thereof) as there are different registrations of Certificates.
If this Letter of Transmittal or any Certificates or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity,
such persons should so indicate when signing and must submit proper evidence
satisfactory to M&I and the Trust, in their sole discretion, of such persons'
authority to so act.
When this Letter of Transmittal is signed by the registered owner(s) of the
Old Capital Securities listed and transmitted hereby, no endorsement(s) of
Certificate(s) or separate bond power(s) are required unless New Capital
Securities are to be issued in the name of a person other than the registered
holder(s). Signature(s) on such Certificate(s) or bond power(s) must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Old Capital Securities listed, the Certificates
must be endorsed or accompanied by appropriate bond powers, signed exactly as
the name or names of the registered owner(s) appear(s) on the Certificates,
and also must be accompanied by such opinions of counsel, certifications and
other information as M&I, the Trust or the Trustee for the Old Capital
Securities may require in accordance with the restrictions on transfer
applicable to the Old Capital Securities. Signatures on such Certificates or
bond powers must be guaranteed by an Eligible Institution.
6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If New Capital Securities are
to be issued in the name of a person other than the signer of this Letter of
Transmittal, or if New Capital Securities are to be sent to someone other than
the signer of this Letter of Transmittal or to an address other than that
shown above, the appropriate boxes on this Letter of Transmittal should be
completed. Certificates for Old Capital Securities not exchanged will be
returned by mail or, if tendered by book-entry transfer, by crediting the
account indicated above maintained at DTC. See Instruction 4.
10
<PAGE>
7. IRREGULARITIES. M&I and the Trust will determine, in their sole
discretion, all questions as to the form of documents, validity, eligibility
(including time of receipt) and acceptance for exchange of any tender of Old
Capital Securities, which determination shall be final and binding on all
parties. M&I and the Trust reserve the absolute right to reject any and all
tenders determined by either of them not to be in proper form or the
acceptance of which, or exchange for, may, in the view of counsel to M&I and
the Trust, be unlawful. M&I and the Trust also reserve the absolute right,
subject to applicable law, to waive any of the conditions of the Exchange
Offer set forth in the Prospectus under "The Exchange Offer--Conditions to the
Exchange Offer" or any conditions or irregularity in any tender of Old Capital
Securities of any particular holder whether or not similar conditions or
irregularities are waived in the case of other holders. M&I's and the Trust's
interpretation of the terms and conditions of the Exchange Offer (including
this Letter of Transmittal and the instructions hereto) will be final and
binding. No tender of Old Capital Securities will be deemed to have been
validly made until all irregularities with respect to such tender have been
cured or waived. M&I, the Trust, any affiliates or assigns of M&I, the Trust,
the Exchange Agent, or any other person shall not be under any duty to give
notification of any irregularities in tenders or incur any liability for
failure to give such notification.
8. QUESTIONS, REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions and
requests for assistance may be directed to the Exchange Agent at its address
and telephone number set forth above. Additional copies of the Prospectus, the
Notice of Guaranteed Delivery and the Letter of Transmittal may be obtained
from the Exchange Agent or from your broker, dealer, commercial bank, trust
company or other nominee.
9. BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal income tax
law, a holder whose tendered Old Capital Securities are accepted for exchange
is required to provide the Exchange Agent with such holder's correct taxpayer
identification number ("TIN") on Substitute Form W-9 below. If the Exchange
Agent is not provided with the correct TIN, the Internal Revenue Service (the
"IRS") may subject the holder or other payee to a $50 penalty. In addition,
payments to such holders or other payees with respect to Old Capital
Securities exchanged pursuant to the Exchange Offer may be subject to 31%
backup withholding.
The box in Part 2 of the Substitute Form W-9 may be checked if the tendering
holder has not been issued a TIN and has applied for a TIN or intends to apply
for a TIN in the near future. If the box in Part 2 is checked, the holder or
other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 2 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Exchange Agent will
withhold 31% of all payments made prior to the time a properly certified TIN
is provided to the Exchange Agent. The Exchange Agent will retain such amounts
withheld during the 60 day period following the date of the Substitute Form W-
9. If the holder furnishes the Exchange Agent with its TIN within 60 days
after the date of the Substitute Form W-9, the amounts retained during the 60
day period will be remitted to the holder and no further amounts shall be
retained or withheld from payments made to the holder thereafter. If, however,
the holder has not provided the Exchange Agent with its TIN within such 60 day
period, amounts withheld will be remitted to the IRS as backup withholding. In
addition, 31% of all payments made thereafter will be withheld and remitted to
the IRS until a correct TIN is provided.
The holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the registered owner of
the Old Capital Securities or of the last transferee appearing on the
transfers attached to, or endorsed on, the Old Capital Securities. If the Old
Capital Securities are registered in more than one name or are not in the name
of the actual owner, consult the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for additional guidance
on which number to report.
11
<PAGE>
Certain holders (including, among others, corporations, financial
institutions and certain foreign persons) may not be subject to these backup
withholding and reporting requirements. Such holders should nevertheless
complete the attached Substitute Form W-9 below, and write "exempt" on the
face thereof, to avoid possible erroneous backup withholding. A foreign person
may qualify as an exempt recipient by submitting a properly completed IRS Form
W-8, signed under penalties of perjury, attesting to that holder's exempt
status. Please consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
holders are exempt from backup withholding.
Backup withholding is not an additional U.S. Federal income tax. Rather, the
U.S. Federal income tax liability of a person subject to backup withholding
will be reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained.
10. LOST, DESTROYED OR STOLEN CERTIFICATES. If any Certificate(s)
representing Old Capital Securities have been lost, destroyed or stolen, the
holder should promptly notify the Exchange Agent. The holder will then be
instructed as to the steps that must be taken in order to replace the
Certificate(s). This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost, destroyed or stolen
Certificate(s) have been followed.
11. SECURITY TRANSFER TAXES. Holders who tender their Old Capital Securities
for exchange will not be obligated to pay any transfer taxes in connection
therewith. If, however, New Capital Securities are to be delivered to, or are
to be issued in the name of, any person other than the registered holder of
the Old Capital Securities tendered, or if a transfer tax is imposed for any
reason other than the exchange of Old Capital Securities in connection with
the Exchange Offer, then the amount of any such transfer tax (whether imposed
on the registered holder or any other persons) will be payable by the
tendering holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted with the Letter of Transmittal, the
amount of such transfer taxes will be billed directly to such tendering
holder.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF OR AGENT'S
MESSAGE IN LIEU THEREOF) AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY
THE EXCHANGE AGENT ON OR PRIOR TO THE EXPIRATION DATE.
12
<PAGE>
TO BE COMPLETED BY ALL TENDERING SECURITYHOLDERS:
(SEE INSTRUCTION 9)
PAYER'S NAME: THE CHASE MANHATTAN BANK
- -------------------------------------------------------------------------------
SUBSTITUTE PART 1--PLEASE PROVIDE Social Security Number or
FORM W-9 YOUR TIN ON THE LINE AT Employer Identification
RIGHT AND CERTIFY BY Number
SIGNING AND DATING BELOW
DEPARTMENT OF THE
TREASURY INTERNAL ---------------------------
REVENUE
SERVICE ----------------------------------------------------------
PART 2--CERTIFICATION--Under penalties of perjury, I
certify that:
PAYER'S
REQUEST FOR (1) The number shown on this form is my correct
TAXPAYER'S taxpayer identification number (or I am waiting for
IDENTIFICATION a number to be issued to me);
NUMBER (TIN) (2) I am not subject to backup withholding either
because: (a) I am exempt from backup withholding;
(b) I have not been notified by the Internal
Revenue Service ("IRS") that I am subject to backup
withholding as a result of a failure to report all
interest or dividends; or (c) the IRS has notified
me that I am no longer subject to backup
withholding; and
(3) Any other information provided on this form is true
and correct.
CERTIFICATION INSTRUCTIONS--You must cross out item (2)
above if you have been notified by the IRS that you are
subject to backup withholding because of underreporting
interest or dividends on your tax return and you have
not been notified by the IRS that you are no longer
subject to backup withholding.
----------------------------------------------------------
Signature: ________________ PART 3--
Date: _____________________ Awaiting TIN [_]
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY IN CERTAIN CIRCUMSTANCES
RESULT IN BACKUP WITHHOLDING OF 31% OF ANY AMOUNTS PAID TO YOU PURSUANT
TO THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9
FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX
IN PART 3 OF THE SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(2) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number by the
time of payment, 31% of all payments made to me on account of the New
Capital Securities shall be retained until I provide a taxpayer
identification number to the Exchange Agent and that, if I do not provide my
taxpayer identification number within 60 days, such retained amounts shall
be remitted to the Internal Revenue Service as backup withholding and 31% of
all reportable payments made to me thereafter will be withheld and remitted
to the Internal Revenue Service until I provide a taxpayer identification
number.
------------------------------------- ___________________, 1997
Signature Date
13
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
7.65% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
OF
M&I CAPITAL TRUST A
FULLY AND UNCONDITIONALLY GUARANTEED BY
MARSHALL & ILSLEY CORPORATION
As set forth in the Exchange Offer, this Notice of Guaranteed Delivery, or
one substantially equivalent to this form, must be used to accept the Exchange
Offer (as defined below) if (i) certificates for the Trust's (as defined
below) 7.65% Capital Securities due December 1, 2026 (the "Old Capital
Securities") are not immediately available, (ii) Old Capital Securities, the
Letter of Transmittal and all other required documents cannot be delivered to
The Chase Manhattan Bank (the "Exchange Agent") on or prior to the Expiration
Date (as defined in the Prospectus referred to below) or (iii) the procedures
for delivery by book-entry transfer cannot be completed on a timely basis.
This Notice of Guaranteed Delivery may be delivered by hand, overnight courier
or mail, or transmitted by facsimile transmission, to the Exchange Agent. See
"The Exchange Offer--Procedures for Tendering Old Capital Securities" in the
Prospectus.
The Exchange Agent for the Exchange Offer is:
THE CHASE MANHATTAN BANK
By Mail or Hand Delivery: By Facsimile To Confirm by Telephone:
Transmission:
The Chase Manhattan Bank (212) 638-7375 Carlos Esteves: (212)
or 638-0828
55 Water Street, Second (212) 344-9367
Floor
Room 234--North Building
New York, New York 10041
Attn: Carlos Esteves
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY VIA
FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A
VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
LADIES AND GENTLEMEN:
The undersigned hereby tenders to M&I Capital Trust A, a Delaware business
trust (the "Trust"), upon the terms and subject to the conditions set forth in
the Prospectus dated March 7, 1997 (as the same may be amended or supplemented
from time to time, the "Prospectus"), and the related Letter of Transmittal
(which together constitute the "Exchange Offer"), receipt of which is hereby
acknowledged, the aggregate liquidation amount of Old Capital Securities set
forth below pursuant to the guaranteed delivery procedures set forth in the
Prospectus under the caption "The Exchange Offer--Procedures for Tendering Old
Capital Securities."
<PAGE>
Certificate No(s). (if available): Name of Registered Holder(s):
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
Aggregate Liquidation Amount Tendered: Address:
- ------------------------------------- -------------------------------------
Area Code and Telephone Number(s): -------------------------------------
- ------------------------------------- -------------------------------------
If Old Capital Securities will be tendered by book-entry transfer, provide the
following information:
Signature(s): _________________________________________________________________
DTC Account Number: ___________________________________________________________
Date: _________________________________________________________________________
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm or other entity identified in Rule 17Ad-15 under the
Securities Exchange Act of 1934, as amended, as an "eligible guarantor
institution," including (as such terms are defined therein): (i) a bank; (ii)
a broker, dealer, municipal securities broker, municipal securities dealer,
government securities broker or government securities dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association
or clearing agency; or (v) a savings association that is a participant in a
Securities Transfer Association recognized program (each of the foregoing
being referred to as an "Eligible Institution"), hereby guarantees to deliver
to the Exchange Agent, at one of its addresses set forth above, either the Old
Capital Securities tendered hereby in proper form for transfer, or
confirmation of the book-entry transfer of such Old Capital Securities to the
Exchange Agent's account at The Depository Trust Company ("DTC"), pursuant to
the procedures for book-entry transfer set forth in the Prospectus, in either
case together with one or more properly completed and duly executed Letter(s)
of Transmittal (or facsimile thereof or Agent's Message in lieu thereof) and
any other required documents within three business days after the date of
execution of this Notice of Guaranteed Delivery. The undersigned acknowledges
that it must deliver the Letters of Transmittal (or a facsimile thereof or
Agent's Message in lieu thereof) and the Old Capital Securities (or a book-
entry confirmation) tendered hereby to the Exchange Agent within the time
period set forth above and that failure to do so could result in a financial
loss to the undersigned.
Name of Firm:
--------------------------
-------------------------------------
Address: Authorized Signature
------------------------------
Name:
- ------------------------------------- --------------------------------
Title:
Telephone Number: ---------------------------------
---------------------
Dated:
--------------------------------
NOTE: DO NOT SEND OLD CAPITAL SECURITIES WITH THIS NOTICE OF GUARANTEED
DELIVERY. ACTUAL SURRENDER OF OLD CAPITAL SECURITIES MUST BE MADE PURSUANT TO,
AND BE ACCOMPANIED BY, A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF
TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS.
2
<PAGE>
Exhibit 99.3
March ___, 1997
EXCHANGE AGENT AGREEMENT
------------------------
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 10001
Ladies and Gentlemen:
M&I Capital Trust A, a Delaware statutory business trust (the "Trust")
proposes to make an offer (the "Exchange Offer") to exchange up to $200,000,000
aggregate liquidation amount of its 7.65% Capital Securities (liquidation amount
$1,000 per Capital Security) (the "New Capital Securities"), which have been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
for a like liquidation amount of its outstanding 7.65% Capital Securities
(liquidation amount $1,000 per Capital Security) (the "Old Capital Securities"),
of which $200,000,000 aggregate liquidation amount is outstanding. The terms
and conditions of the Exchange Offer as currently contemplated are set forth in
a prospectus, dated March 7, 1997 (the "Prospectus"), a copy of which is
attached to this Agreement as Attachment A, proposed to be distributed to all
record holders of the Old Capital Securities. Capitalized terms used herein and
not otherwise defined shall have the meanings assigned to them in the
Prospectus.
The Trust hereby appoints The Chase Manhattan Bank to act as exchange agent
(the "Exchange Agent") in connection with the Exchange Offer. References
hereinafter to "you" shall refer to The Chase Manhattan Bank.
The Exchange Offer is expected to be commenced by the Trust on or about
March 11, 1997. The Letter of Transmittal accompanying the Prospectus is to be
used by the holders of the Old Capital Securities to accept the Exchange Offer,
and contains certain instructions with respect to the Exchange Offer.
The Exchange Offer shall expire at 5:00 p.m., New York City time, on April
10, 1997 or on such later date or time to which the Trust or Marshall & Ilsley
Corporation (the "Company") may extend the Exchange Offer (the "Expiration
Date"). Subject to the terms and conditions set forth in the Prospectus, the
Trust and the Company expressly reserve the right to extend the Exchange Offer
from time to time and may extend the Exchange Offer by giving oral (promptly
confirmed in writing) or written notice to you no later than 9:00 a.m., New York
City time, on the next business day after the previously scheduled Expiration
Date.
The Trust and the Company expressly reserve the right to amend or terminate
the Exchange Offer, and not to accept for exchange any Old Capital Securities
not theretofore
<PAGE>
accepted for exchange, upon the occurrence of any of the conditions of the
Exchange Offer specified in the Prospectus under the caption "The Exchange
Offer - Conditions to the Exchange Offer." The Trust or the Company will give
oral (promptly confirmed in writing) or written notice of any amendment,
termination or nonacceptance to you as promptly as practicable.
In carrying out your duties as Exchange Agent, you are to act in accordance
with the following instructions:
1. You will perform such duties and only such duties as are specifically
set forth in the section of the Prospectus captioned "The Exchange Offer" and as
specifically set forth herein and such duties which are necessarily incidental
thereto; provided, however, that in no way will your general duty to act in good
faith be discharged by the foregoing.
2. You will establish an account with respect to the Old Capital Securities
at The Depository Trust Company (the "Book-Entry Transfer Facility") for
purposes of the Exchange Offer within two business days after the date of the
Prospectus, and any financial institution that is a participant in the Book-
Entry Transfer Facility's systems may make book-entry delivery of the Old
Capital Securities by causing the Book-Entry Transfer Facility to transfer such
Old Capital Securities into your account in accordance with the Book-Entry
Transfer Facility's procedures for such transfer.
3. You are to examine each of the Letters of Transmittal, certificates for
Old Capital Securities and confirmations of book-entry transfers into your
account at the Book-Entry Transfer Facility and any Agent's Message or other
documents delivered or mailed to you by or for holders of the Old Capital
Securities to ascertain whether: (i) the Letters of Transmittal and any such
other documents are duly executed and properly completed in accordance with
instructions set forth therein and (ii) the Old Capital Securities have
otherwise been properly tendered. In each case where the Letter of Transmittal
or any other document has been improperly completed or executed or any of the
certificates for Old Capital Securities are not in proper form for transfer or
some other irregularity in connection with the acceptance of the Exchange Offer
exists, you will endeavor to inform the presenters of the need for fulfillment
of all requirements and to take any other action as may be necessary or
advisable to cause such irregularity to be corrected.
4. With the approval of the Trust or the Chairman of the Board, the Chief
Executive Officer, the Chief Financial Officer or the Secretary of the Company
(such approval, if given orally, to be confirmed in writing) or any other party
designated by the Trust or such officer of the Company in writing, you are
authorized to waive any irregularities in connection with any tender of Old
Capital Securities pursuant to the Exchange Offer.
5. Tenders of Old Capital Securities may be made only as set forth in the
section of the Prospectus captioned "The Exchange Offer - Procedures for
Tendering Old Capital Securities" or in the Letter of Transmittal and Old
Capital Securities shall be considered properly tendered to you only when
tendered in accordance with the procedures set forth therein.
2
<PAGE>
Notwithstanding the provisions of this paragraph 5, Old Capital Securities
which the Trust or any other party designated by the Trust in writing shall
approve as having been properly tendered shall be considered to be properly
tendered (such approval, if given orally, shall be confirmed in writing).
6. You shall advise the Trust with respect to any Old Capital Securities
delivered subsequent to the Expiration Date and accept its instructions with
respect to disposition of such Old Capital Securities.
7. You shall accept tenders:
(a) in cases where the Old Capital Securities are registered in two
or more names only if signed by all named holders;
(b) in cases where the signing person (as indicated on the Letter of
Transmittal) is acting in a fiduciary or a representative capacity only when
proper evidence of his or her authority to act is submitted; and
(c) from persons other than the registered holder of Old Capital
Securities provided that customary transfer requirements, including any
applicable transfer taxes, are fulfilled.
You shall accept partial tenders of Old Capital Securities where so
indicated and as permitted in the Letter of Transmittal and deliver certificates
for Old Capital Securities to the transfer agent for split-up and return any
untendered Old Capital Securities to the holder (or to such other person as may
be designated in the Letter of Transmittal) as promptly as practicable after
expiration or termination of the Exchange Offer.
8. Upon satisfaction or waiver of all of the conditions to the Exchange
Offer, the Trust will notify you (such notice if given orally, to be promptly
confirmed in writing) of the Company's and Trust's acceptance, promptly after
the Expiration Date, of all Old Capital Securities properly tendered and you, on
behalf of the Trust, will exchange such Old Capital Securities for New Capital
Securities and cause such Old Capital Securities to be canceled. Delivery of New
Capital Securities will be made on behalf of the Trust by you at the rate of
$1,000 liquidation amount of New Capital Securities for each $1,000 liquidation
amount of the Old Capital Securities tendered promptly after notice (such notice
if given orally, to be promptly confirmed in writing) of acceptance of said Old
Capital Securities by the Trust; provided, however, that in all cases, Old
Capital Securities tendered pursuant to the Exchange Offer will be exchanged
only after timely receipt by you of certificates for such Old Capital Securities
(or confirmation of book-entry transfer into your account at the Book-Entry
Transfer Facility); a properly completed and duly executed Letter of Transmittal
(or facsimile thereof) with any required signature guarantees (or in lieu
thereof an Agent's Message) and any
3
<PAGE>
other required document. You shall issue New Capital Securities only in
denominations of $1,000 or any integral multiple thereof, provided that no New
Capital Securities will be issued except in an aggregate amount of at least
$100,000.
9. Tenders pursuant to the Exchange Offer are irrevocable, except that,
subject to the terms and upon the conditions set forth in the Prospectus and the
Letter of Transmittal, Old Capital Securities tendered pursuant to the Exchange
Offer may be withdrawn at any time on or prior to the Expiration Date.
10. The Company and the Trust shall not be required to exchange any Old
Capital Securities tendered if any of the conditions set forth in the Exchange
Offer are not met. Notice of any decision by the Company and the Trust not to
exchange any Old Capital Securities tendered shall be given (such notice, if
given orally, shall be promptly confirmed in writing) by the Company or the
Trust to you.
11. If, pursuant to the Exchange Offer, the Company or the Trust does not
accept for exchange all or part of the Old Capital Securities tendered because
of an invalid tender, the occurrence of certain other events set forth in the
Prospectus under the caption "The Exchange Offer - Conditions to the Exchange
Offer" or otherwise, you shall as soon as practicable after the expiration or
termination of the Exchange Offer return those certificates for unaccepted Old
Capital Securities (or effect the appropriate book-entry transfer of the
unaccepted Old Capital Securities), and return any related required documents
and the Letters of Transmittal relating thereto that are in your possession, to
the persons who deposited them.
12. All certificates for reissued Old Capital Securities or for unaccepted
Old Capital Securities shall be forwarded by (a) first-class mail, return
receipt requested, under a blanket surety bond protecting you, the Trust and the
Company from loss or liability arising out of the non-receipt or non-delivery of
such certificates or (b) by registered mail insured separately for the
replacement value of such certificates.
13. You are not authorized to pay or offer to pay any concessions,
commissions or solicitation fees to any broker, dealer, bank or other persons or
to engage or utilize any person to solicit tenders.
14. As Exchange Agent hereunder you:
(a) will be regarded as making no representations and having no
responsibilities as to the validity, sufficiency, value or genuineness of Old
Capital Securities, and will not be required to and will make no representation
as to the validity, value or genuineness of the Exchange Offer; provided,
however, that in no way will your general duty to act in good faith be
discharged by the foregoing;
(b) shall not be obligated to take any legal action hereunder which
might in your reasonable judgment involve any expense or liability, unless you
shall have been furnished with reasonable indemnity;
4
<PAGE>
(c) shall not be liable to the Company or the Trust for any action
taken or omitted by you, or any action suffered by you to be taken or omitted,
without negligence, misconduct or bad faith on your part, by reason of or as a
result of the administration of your duties hereunder in accordance with the
terms and conditions of this Agreement or by reason of your compliance with the
instructions set forth herein or with any written or oral instructions delivered
to you pursuant hereto, and may reasonably rely on and shall be protected in
acting in good faith in reliance upon any certificate, instrument, opinion,
notice, letter, facsimile or other document or security delivered to you and
reasonably believed by you to be genuine and to have been signed by the proper
party or parties;
(d) may reasonably act upon any tender, statement, request, comment,
agreement or other instrument whatsoever not only as to its due execution and
validity and the effectiveness of its provisions, but also as to the truth and
accuracy of any information contained therein, which you shall in good faith
reasonably believe to be genuine or to have been signed or represented by a
proper person or persons;
(e) may rely on and shall be protected in acting upon written or oral
instructions from the Trust or any officer of the Company with respect to the
Exchange Offer;
(f) shall not advise any person tendering Old Capital Securities
pursuant to the Exchange Offer as to the wisdom of making such tender or as to
the market value or decline or appreciation in market value of any Old Capital
Securities; and
(g) may consult with your counsel with respect to any questions
relating to your duties and responsibilities and the written opinion of such
counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by you hereunder in good faith and in
accordance with such written opinion of such counsel.
15. You shall take such action as may from time to time be requested by
the Company, the Trust or their counsel (and such other action as you may
reasonably deem appropriate) to furnish copies of the Prospectus, Letter of
Transmittal and the Notice of Guaranteed Delivery, or such other forms as may be
approved from time to time by the Company or the Trust, to all persons
requesting such documents and to accept and comply with telephone requests for
information relating to the Exchange Offer, provided that such information shall
relate only to the procedures for accepting (or withdrawing from) the Exchange
Offer. The Company or the Trust will furnish you with copies of such documents
at your request. All other requests for information relating to the Exchange
Offer shall be directed to the Secretary of the Company at: 770 North Water
Street, Milwaukee, Wisconsin 53202.
16. You shall advise by facsimile transmission or telephone, and promptly
thereafter confirm in writing to the Trust, the Company and Godfrey & Kahn,
S.C., counsel for the Company and the Trust, and such other person or persons as
they may request, daily, and more frequently if reasonably requested, up to and
including the Expiration Date, as to the liquidation
5
<PAGE>
amount of the Old Capital Securities which have been tendered pursuant to the
Exchange Offer and the items received by you pursuant to this Agreement,
separately reporting and giving cumulative totals as to items properly received
and items improperly received and items covered by Notices of Guaranteed
Delivery. In addition, you will also inform, and cooperate in making available
to, the Company and the Trust or any such other person or persons as the Company
or the Trust request from time to time prior to the Expiration Date of such
other information as they, or he reasonably requests. Such cooperation shall
include, without limitation, the granting by you to the Company, the Trust and
such person as the Company or the Trust may request of access to those persons
on your staff who are responsible for receiving tenders, in order to ensure that
immediately prior to the Expiration Date, the Company and the Trust shall have
received information in sufficient detail to enable them to decide whether to
extend the Exchange Offer. You shall prepare a list of persons who failed to
tender or whose tenders were accepted and the aggregate liquidation amount of
Old Capital Securities not tendered or Old Capital Securities not accepted and
deliver said list to the Company and the Trust at least seven days prior to the
Expiration Date. You shall also prepare a final list of all persons whose
tenders were accepted, the aggregate liquidation amount of Old Capital
Securities tendered and the aggregate liquidation amount of Old Capital
Securities accepted and deliver said list to the Company.
17. Letters of Transmittal and Notices of Guaranteed Delivery shall be
stamped by you as to the date and the time of receipt thereof and shall be
preserved by you for a period of time at least equal to the period of time you
preserve other records pertaining to the transfer of securities. You shall
dispose of unused Letters of Transmittal and other surplus materials by
returning them to the Company.
18. For services rendered as Exchange Agent hereunder you shall be
entitled to a fee of $5,000 and you shall be entitled to reimbursement of your
expenses (including fees and expenses of your counsel, which fees are expected
under normal circumstances to be not in excess of $5,000 incurred in connection
with the Exchange Offer). The obligations under this Section 18 shall constitute
joint and several obligations of the Trust and the Company.
19. You hereby acknowledge receipt of the Prospectus and the Letter of
Transmittal attached hereto and further acknowledge that you have examined each
of them to the extent necessary to perform your obligations hereunder. Any
inconsistency between this Agreement, on the one hand, and the Prospectus and
the Letter of Transmittal (as they may be amended from time to time), on the
other hand, shall be resolved in favor of the latter two documents, except with
respect to the duties, liabilities and indemnification of you as Exchange Agent,
which shall be controlled by this Agreement.
20. The Company and the Trust jointly and severally agree to indemnify and
hold you harmless in your capacity as Exchange Agent hereunder against any
liability, cost or expense, including reasonable attorneys' fees, arising out of
or in connection with the acceptance or administration of your duties hereunder,
including, without limitation, in connection with any act, omission, delay or
refusal made by you in reasonable reliance upon any signature, endorsement,
assignment, certificate, order, request, notice, instruction or other instrument
or document
6
<PAGE>
reasonably believed by you to be valid, genuine and sufficient and in accepting
any tender or effecting any transfer of Old Capital Securities reasonably
believed by you in good faith to be authorized, and in delaying or refusing in
good faith to accept any tenders or effect any transfer of Old Capital
Securities; provided, however, that the Company and the Trust shall not be
liable for indemnification or otherwise for any loss, liability, cost or expense
to the extent arising out of your negligence, willful breach of this Agreement,
willful misconduct or bad faith. In no case shall the Company and the Trust be
liable under this indemnity with respect to any claim against you unless the
Company and the Trust shall be notified by you, by letter or cable or by
facsimile confirmed by letter, of the written assertion of a claim against you
or of any other action commenced against you, promptly after you shall have
received any such written assertion or commencement of action. The Company and
the Trust shall be entitled to participate at their own expense in the defense
of any such claim or other action, and, if the Company and the Trust so elect,
the Company and the Trust shall assume the defense of any suit brought to
enforce any such claim. In the event that the Company and the Trust shall assume
the defense of any such suit, the Company and the Trust shall not be liable for
the fees and expenses of any additional counsel thereafter retained by you so
long as the Company and the Trust shall retain counsel reasonably satisfactory
to you to defend such suit. You shall not compromise or settle any such action
or claim without the consent of the Company and the Trust.
21. This Agreement and your appointment as Exchange Agent hereunder shall
be construed and enforced in accordance with the laws of the State of New York
applicable to agreements made and to be performed entirely within such state,
and without regard to conflicts of law principles, and shall inure to the
benefit of, and the obligations created hereby shall be binding upon, the
successors and assigns of each of the parties hereto.
22. This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original and all of which taken together shall
constitute one and the same instrument.
23. In case any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
24. This Agreement shall not be deemed or construed to be modified,
amended, rescinded, canceled or waived, in whole or in part, except by a written
instrument signed by a duly authorized representative of the party to be
charged. This Agreement may not be modified orally.
25. Unless otherwise provided herein, all notices, requests and other
communications to any party hereunder shall be in writing (including facsimile)
and shall be given to such party, addressed to it, at its address or telecopy
number set forth below:
7
<PAGE>
If to the Company or the Trust:
Marshall & Ilsley Corporation
770 North Water Street
Milwaukee, Wisconsin 53202
Facsimile: (414) 765-7899
Attention: M.A. Hatfield
With a copy to:
Godfrey & Kahn, S.C.
780 North Water Street
Milwaukee, Wisconsin 53202
Facsimile: (414) 273-5198
Attention: Larry D. Lieberman
If to the Exchange Agent:
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, New York 10001
Facsimile: (212) 946-8159
Attention: Gregory Shea
26. Unless terminated earlier by the parties hereto, this Agreement shall
terminate 90 days following the Expiration Date. Notwithstanding the foregoing,
Paragraphs 18 and 20 shall survive the termination of this Agreement. Except as
provided in Section 17, upon any termination of this Agreement, you shall
promptly deliver to the Company any funds or property (including, without
limitation, Letters of Transmittal and any other documents relating to the
Exchange Offer) then held by you as Exchange Agent under this Agreement.
27. This Agreement shall be binding and effective as of the date hereof.
Please acknowledge receipt of this Agreement and confirm the arrangements
herein provided by signing and returning the enclosed copy.
MARSHALL & ILSLEY CORPORATION
By:
----------------------------------
M.A. Hatfield,
Senior Vice President & Secretary
8
<PAGE>
M&I CAPITAL TRUST A
By:
----------------------------
M.A. Hatfield,
Regular Trustee
Accepted as the date
first above written:
THE CHASE MANHATTAN BANK
By:
--------------------------------
Name:
Title:
9
