SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
Marshall & Ilsley Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act
Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how
it was determined):
4) Proposed maximum aggregate value of transaction:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is
offset as provided by Exchange Act Rule 0-
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the offsetting fee was paid previously.
Identify the previous filing by registration
statement number, or the Form or Schedule and
the date of its filing.
1) Amount Previously Paid:
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<PAGE>
[PRELIMINARY COPY]
MARSHALL & ILSLEY CORPORATION
770 North Water Street
Milwaukee, Wisconsin 53202
_____________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 25, 2000
To the Shareholders of Marshall & Ilsley Corporation:
The 2000 Annual Meeting of Shareholders of
Marshall & Ilsley Corporation will be held at
_____________________________________________, on Tuesday,
April 25, 2000 at _________, local time, for the following purposes:
(1) To elect seven Directors to serve until the 2003
Annual Meeting of Shareholders and until their
successors are elected and qualified;
(2) To approve the Marshall & Ilsley Corporation 2000
Employee Stock Purchase Plan;
(3) To approve the Marshall & Ilsley Corporation 2000
Executive Stock Option and Restricted Stock Plan;
(4) To amend the Restated Articles of Incorporation of
Marshall & Ilsley Corporation to increase the
authorized Common Stock from 160,000,000 shares to
320,000,000 shares; and
(5) To transact such other business as may properly
come before the Annual Meeting, all in accordance with
the accompanying Proxy Statement.
Shareholders of record at the close of business on
February 29, 2000 are entitled to notice of and to vote
at the Annual Meeting.
Holders of a majority of the outstanding shares
must be present in person or by proxy in order for the
meeting to be held. Therefore, whether or not you
expect to attend the annual meeting in person, you are
urged to vote by completing and returning the
accompanying proxy in the enclosed envelope, by a
telephone vote or by voting electronically via the
Internet. If you attend the meeting and wish to vote
your shares personally, you may do so by revoking your
proxy at any time prior to the voting thereof. In
addition, you may revoke your proxy at any time before
it is voted by written notice of revocation to the
Secretary of the Company or by submitting a later-dated
proxy.
M. A. HATFIELD,
Secretary
March 13, 2000
<PAGE>
[PRELIMINARY COPY]
MARSHALL & ILSLEY CORPORATION
770 North Water Street
Milwaukee, Wisconsin 53202
March 13, 2000
Proxy Statement
The proxy you received is solicited by the Board
of Directors of Marshall & Ilsley Corporation (the
"Company" or "M&I") for use at the Annual Meeting of
Shareholders to be held on Tuesday, April 25, 2000 (the
"Annual Meeting"). At the Annual Meeting, the
shareholders of the Company will elect seven Class I
Directors, each of whom will hold office until April
2003 and, with respect to each Director, until his
successor is elected and qualified. The Company's
shareholders also will be asked to approve the
Company's 2000 Employee Stock Purchase Plan (the "Stock
Purchase Plan"), the Company's 2000 Executive Stock
Option and Restricted Stock Plan (the "2000 Stock
Option Plan"), and an amendment to the Company's
Restated Articles of Incorporation to increase the
authorized common stock of the Company from 160,000,000
shares to 320,000,000 shares.
The expense of printing and mailing proxy
materials, including expenses involved in forwarding
materials to beneficial owners of common stock held in
the name of another person, will be borne by the
Company. No solicitation other than by mail is
contemplated, except that officers or employees of the
Company or its subsidiaries may solicit the return of
proxies from certain shareholders by telephone. In
addition, the Company has retained Morrow & Co., Inc.
to assist in the solicitation of proxies for a fee of
approximately $6,500. The Proxy Statement and the Proxy
are being sent to the Company's shareholders commencing
on or about March 13, 2000. Shareholders who have
consented to electronic delivery of the Proxy Statement
and the Company's Annual Report on Form 10-K will
receive those documents via posting on M&I's web site:
www.micorp.com/ereports.html.
Each shareholder of record at the close of
business on February 29, 2000 will be entitled to one
vote for each share of common stock registered in such
shareholder's name. The Company has two classes of
capital stock outstanding: its $1.00 par value common
stock (the "Common Stock") and its non-voting Series A
preferred stock (the "Preferred Stock"). As of
February 29, 2000, the Company had outstanding
__________ shares of Common Stock and __________ shares
of Preferred Stock. The presence, in person or by
proxy, of the holders of a majority of the shares of
the Common Stock outstanding on the record date is
required for a quorum with respect to the matters on
which action is to be taken at the Annual Meeting.
Any shareholder executing and delivering his or
her proxy may revoke the same at any time prior to the
voting thereof by advising the Secretary of the Company
in writing (including a later-dated proxy or via the
Internet) or by telephone of such revocation.
The Company has instituted the Dividend
Reinvestment and Cash Investment Plan (the
"Reinvestment Plan") administered by BankBoston, N.A.,
as Trustee. Under the provisions of the Reinvestment
Plan, shares of Common Stock are acquired and held in
nominee name by BankBoston, N.A. for participating
shareholders. Shares so held have been separately
designated on the proxy card pertaining to each
participant and will be voted at the Annual Meeting in
the same manner in which the participant votes those
shares registered in his or her own name either by
proxy or in person.
The Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1999, is being provided
to shareholders with this Proxy Statement.
Unless otherwise directed, all proxies will be
voted FOR the election of each of the individuals
nominated to serve as a Class I Director, FOR approval
of the Stock Purchase Plan, FOR approval of the 2000
Stock Option Plan and FOR approval of the proposed
amendment to the Company's Restated Articles of
Incorporation.
Abstentions and broker non-votes (i.e., proxies
from brokers or nominees indicating that such persons
have not received instructions from the beneficial
owners to vote shares as to a matter with respect to
<PAGE>
which the brokers or nominees do not have discretionary
power to vote) will be treated as present for purposes
of determining a quorum.
Directors are elected by a plurality of the votes
cast by holders of the Company's Common Stock entitled
to vote at a meeting at which a quorum is present. In
other words, the seven directors who receive the
largest number of votes will be elected as directors.
Any shares not voted, whether by withheld authority,
broker non-vote or otherwise, will have no effect in
the election of directors except to the extent that the
failure to vote for an individual results in another
individual receiving a larger number of votes. Any
votes attempted to be cast "against" a candidate are
not given legal effect and are not counted as votes
cast in an election of directors. The affirmative vote
of a majority of the shares present or represented and
entitled to vote is required to approve the Stock
Purchase Plan and the 2000 Stock Option Plan. With
respect to the proposals to approve the Stock Purchase
Plan and the 2000 Stock Option Plan, abstentions will
have the effect of votes against such proposals and
broker non-votes will not be counted as shares entitled
to vote on either proposal. The affirmative vote of
the holders of two-thirds of the outstanding shares is
required to approve the proposed amendment to the
Company's Restated Articles of Incorporation. With
respect to the proposal to approve the amendment to the
Company's Restated Articles of Incorporation,
abstentions and broker non-votes will have the effect
of votes against such proposal.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table lists as of February 29, 2000
information regarding the beneficial ownership of
shares of Common Stock by each director, each nominee
for director (Ted Kellner), each named executive
officer of the Company, each person believed by the
Company to be a beneficial owner of more than 5% of
Common Stock, and all directors and executive officers
of the Company as a group:
Name and Address Amount and Nature of
of Beneficial Owner Beneficial Ownership(1) Percent of Class
Marshall & Ilsley Trust Company 9,747,940 (2) _____%
1000 North Water Street
Milwaukee, WI 53202
The Northwestern Mutual Life 7,734,673 (3) _____%
Insurance Company
720 East Wisconsin Avenue
Milwaukee, WI 53202
Richard A. Abdoo 600 *
Oscar C. Boldt 107,105 (4) *
T.M. Bolger 82,983 (5) *
Wendell F. Bueche 22,800 (6) *
Jon F. Chait 33,487 (7) *
J.L. Delgadillo 82,004 (8) *
G.H. Gunnlaugsson 325,767 (9) *
Timothy E. Hoeksema 7,500 (10) *
Burleigh E. Jacobs 52,500 (10) *
Jack F. Kellner 511,702 (11) *
Ted D. Kellner
James F. Kress 28,000 (12) *
D.J. Kuester 548,128 (13) *
Katharine C. Lyall 5,350 (14) *
Edward L. Meyer, Jr. 33,359 (15) *
Don R. O'Hare 23,806 (7) *
San W. Orr, Jr. 418,713 (16) *
P.M. Platten, III 286,792 (17) *
Robert A. Schaefer 74,776 (18) *
John S. Shiely 9,500 (10) *
<PAGE>
Stuart W. Tisdale 18,780 (19) *
George E. Wardeberg 5,000 (14) *
J.B. Wigdale 782,852 (20) *
James O. Wright 16,000 (21) *
Gus A. Zuehlke 159,395 (22) *
All current directors and executive officers of
the Company (excluding Ted Kellner) as a group (____ persons)
own __________ shares of Common Stock or _____% of the
total Common Stock outstanding. (23)
_______________
*less than 1%
(1) Except as indicated below, all shares shown in the
table are owned with sole voting and investment
power.
(2) This information is based on Amendment No. 19 to
Schedule 13-G dated February 11, 2000. All such
shares are owned by Marshall & Ilsley Trust
Company (the "Trust Company") as trustee or in
other fiduciary capacities. The Trust Company has
no economic interest in such shares. Of these
shares, the Trust Company has sole voting power as
to 950,325 shares (approximately ____%), shared
voting power as to 6,150,796 shares (approximately
____%), sole investment power as to 2,608,496
shares (approximately _____%), and shared
investment power as to 7,139,445 shares
(approximately _____%). The amount and percentage
of shares beneficially owned, and the amount of
shares as to which the Trust Company has shared
voting or investment power, include 5,748,276
shares held by the Trust Company as to which it
disclaims beneficial ownership. The Company owns
all of the issued and outstanding capital stock of
the Trust Company.
(3) This information is based on Amendment No. 11 to
Schedule 13-G dated February 9, 2000. The
Northwestern Mutual Life Insurance Company ("NML")
beneficially owns 7,734,673 shares. Of these
shares, 3,844,228 may be acquired by conversion of
336,370 shares of Preferred Stock, 9,700 are owned
by investment company affiliates of NML and
3,880,745 are owned by Lydell, Inc., an indirect,
wholly-owned subsidiary of NML. NML has sole
voting and investment power as to 3,844,228 of
these shares (approximately ___%) and shared
voting and investment power as to 3,890,445 shares
(approximately ___%). In 1999, the Board of
Governers of the Federal Revenue Board ("FRB")
released NML from the limitations set forth in the
December 27, 1985 letter to NML from the FRB. In
connection with such action, NML agreed to notify
the FRB prior to acquiring additional shares such
that NML's total investment in the Company would
exceed 9.9% of the Company's total outstanding
Common Stock or prior to taking any other action
that would trigger any rebuttable presumption of
control under FRB regulations.
(4) Includes 33,962 shares held by Mr. Boldt's family
as to which he disclaims beneficial ownership and
30,400 shares which could be acquired pursuant to
the exercise of stock options within 60 days of
February 29, 2000.
(5) Includes 120 shares held by Mr. Bolger's family as
to which he disclaims beneficial ownership and
50,000 shares which could be acquired pursuant to
the exercise of stock options within 60 days of
February 29, 2000.
(6) Includes 12,500 shares which could be acquired
pursuant to the exercise of stock options within
60 days of February 29, 2000.
(7) Includes 15,000 shares which could be acquired
pursuant to the exercise of stock options within
60 days of February 29, 2000.
(8) Includes 61,000 shares which could be acquired
pursuant to the exercise of stock options within
60 days of February 29, 2000.
(9) Includes 2,700 shares held by Mr. Gunnlaugsson's
family as to which he disclaims beneficial
ownership and 203,575 shares which could be
acquired pursuant to the exercise of stock options
within 60 days of February 29, 2000.
(10) Includes 7,500 shares which could be acquired
pursuant to the exercise of stock options within
60 days of February 29, 2000.
(11) Includes 504,200 shares held in the Kellner Family
Limited Partnership as to which he disclaims
beneficial ownership and 7,500 shares which could
be acquired pursuant to the exercise of stock
options within 60 days of February 29, 2000.
(12) Includes 17,500 shares which could be acquired
pursuant to the exercise of stock options within
60 days of February 29, 2000.
<PAGE>
(13) Includes 14,462 shares as to which Mr. Kuester
exercises sole voting power, and 345,500 shares
which could be acquired pursuant to the exercise
of stock options within 60 days of February 29,
2000.
(14) Includes 5,000 shares which could be acquired
pursuant to the exercise of stock options within
60 days of February 29, 2000.
(15) Includes 2,380 shares held by Mr. Meyer's family
as to which he disclaims beneficial ownership and
27,900 shares which could be acquired pursuant to
the exercise of stock options within 60 days of
February 29, 2000.
(16) Includes 403,713 shares held by trusts for which
Mr. Orr exercises shared voting and investment
power and as to which Mr. Orr disclaims beneficial
ownership, and 15,000 shares which could be
acquired pursuant to the exercise of stock options
within 60 days of February 29, 2000.
(17) Includes 6,343 shares held by Mr. Platten's family
as to which he disclaims beneficial ownership,
182,164 shares as to which Mr. Platten exercises
sole voting power and 5,000 shares of which could
be acquired pursuant to the exercise of stock
options within 60 days of February 29, 2000.
(18) Includes 10,000 shares which could be acquired
pursuant to the exercise of stock options within
60 days of February 29, 2000.
(19) Includes 180 shares held by Mr. Tisdale's family
as to which he disclaims beneficial ownership and
15,000 shares which could be acquired pursuant to
the exercise of stock options within 60 days of
February 29, 2000.
(20) Includes 11,678 shares held by Mr. Wigdale's
family as to which he disclaims beneficial
ownership and 518,500 shares which could be
acquired pursuant to the exercise of stock options
within 60 days of February 29, 2000.
(21) Includes 7,000 shares which could be acquired
pursuant to the exercise of stock options within
60 days of February 29, 2000, 8,500 shares held by
trust for which Mr. Wright exercises shared voting
and investment power and as to which he disclaims
beneficial ownership and 500 shares owned by
Badger Meter Foundation as to which he disclaims
beneficial ownership.
(22) Includes 11,771 shares held by Mr. Zuehlke's
family as to which he disclaims beneficial
ownership, 45,819 shares as to which Mr. Zuehlke
exercises sole voting power, and 17,500 shares
which could be acquired pursuant to the exercise
of stock options within 60 days of February 29,
2000.
(24) Includes 3,600 shares of restricted stock as to
which the holders exercise sole voting power and
[1,490,550] shares which could be acquired
pursuant to the exercise of stock options within
60 days of February 29, 2000.
In addition to the ownership of Company Common
Stock described above, each of Messrs. Boldt, Bolger,
Bueche, Gunnlaugsson, Kellner, Kuester, O'Hare, Orr,
Wigdale, Wright and Zuehlke beneficially owns one share
of Series A Adjustable Rate Preferred Stock (the
"Preferred Stock") of each of 28 subsidiaries of the
Company formed as real estate investment trusts. Mr.
Kuester's wife also owns one share of Preferred Stock
of each subsidiary. Mr. Kuester disclaims beneficial
ownership of these shares. Each such person owns less
than 1% of the outstanding Preferred Stock of each
subsidiary. All directors and executive officers as a
group hold 17 shares of Preferred Stock of each
subsidiary, representing _____% of Preferred Stock of
each subsidiary.
ELECTION OF DIRECTORS
The Company's Restated Articles of Incorporation
provide that the Company's Directors are divided into
three classes, designated Class I, Class II and Class
III, with staggered terms of three years each. At the
Annual Meeting, shareholders will elect seven Class I
Directors to serve until the Company's 2003 Annual
Meeting of Shareholders and until their successors are
elected and qualified. Each Class I Director's term
expires at the 2000 Annual Meeting. The following
table sets forth certain information with regard to
each of the nominees for election as a Director as well
as each of the Company's continuing Class II and Class
III Directors.
Mr. James O. Wright, who has been a director of
the Company for 40 years, and Mr. Jack F. Kellner, who
has been a director of the Company for 24 years, will
be retiring from the Board at the 2000 Annual Meeting.
The Company expresses its thanks to Messrs. Wright and
Kellner for their many years of loyal service.
<PAGE>
NOMINEES STANDING FOR ELECTION
Principal Occupation
Name and Directorships
Class I Directors (terms expiring April 2003)
Richard A. Abdoo Chairman of the Board, President and
Age 56 Chief Executive Officer, Wisconsin Energy
Corporation, a holding company with
subsidiaries in utility and nonutility
businesses, since May 1991. Chairman of
the Board and Chief Executive Officer of
Wisconsin Electric Power Company since
June 1990. A director of United
Wisconsin Services, Inc. and Universal
Foods Corporation. A Director since July 1994.
Wendell F. Bueche Retired; Chairman, August 1994 to July
Age 69 1998, Chief Executive Officer, February
1993 to July 1997, President, February
1993 to August 1994, Director, February
1993 to April 1999, IMC Global, Inc.
Also a director of WICOR, Inc. A
Director since 1983.
G.H. Gunnlaugsson Executive Vice President and Chief
Age 55 Financial Officer of the Company since
1987; Vice President of M&I Marshall &
Ilsley Bank since 1976. A Director since
February 1994.
Ted D. Kellner Chairman and Chief Executive Officer of
Age 53 Fiduciary Management, Inc., an investment
management firm, since 1980.
Katharine C. Lyall President of the University of Wisconsin
Age 58 System since 1992. Also a director of
Alliant Energy Co., Kemper National
Insurance Companies and the Carnegie
Foundation for the Advancement of
Teaching. A Director since December 1997.
P.M. Platten, III Retired; Vice Chairman of the Board of
Age 60 the Company from May 1994 to May 1997;
Former President and Chief Executive
Officer, January 1989 to May 1994, Valley
Bancorporation. A Director since May 1994.
J.B. Wigdale Chairman of the Board of the Company from
Age 63 December 1992 to present, Chief Executive
Officer of the Company from October 1992
to present, Vice Chairman of the Board of
the Company from December 1988 to
December 1992; Chairman of the Board,
January 1989 to present, Chief Executive
Officer, September 1987 to present, of
M&I Marshall & Ilsley Bank. A Director
since 1988.
CONTINUING DIRECTORS
Principal Occupation
Name and Directorships
Class II Directors (terms expiring April 2001)
Jon F. Chait Chairman and Chief Executive Officer of
Age 49 Magenta.com, a provider of human resource
solutions via the Internet, July 1999 to
present; Independent Financial
Consultant, July 1998 to July 1999;
Executive Vice President, Secretary and
Director, August 1991 to July 1998,
Managing Director - International
Operations, 1995 to July 1998, Chief
Financial Officer, August 1993 to 1995,
Manpower Inc. and Executive Vice
President, September 1989 to July 1998,
Manpower International Inc., a provider
of temporary employment services. A
Director since 1990.
<PAGE>
D.J. Kuester President of the Company since 1987;
Age 58 President and Director since January
1989, M&I Marshall & Ilsley Bank;
Chairman of the Board and Director, M&I
Data Services. Also a director of Modine
Manufacturing Company. A Director since
February 1994.
Edward L. Meyer, Jr. Chairman of the Board, Anamax
Age 62 Corporation, a processor of hides and
manufacturer of tallow. A Director since
May 1994.
Don R. O'Hare Retired; Consultant, September 1994 to
Age 77 April 1997, Chairman of the Board,
September 1994 to October 1996, Chief
Executive Officer, April 1979 to April
1997, and Director, Sundstrand
Corporation, a manufacturer of aerospace
and industrial products. A Director
since 1977.
San W. Orr, Jr. Attorney, Estates of A.P. Woodson &
Age 58 Family; Chairman of the Board and
Director, Wausau-Mosinee Paper
Corporation. Also a Director of MDU
Resources Group, Inc. A Director since
July 1994.
Stuart W. Tisdale Retired; Chairman of the Board and Chief
Age 71 Executive Officer, August 1992 to
February 1994, President and Chief
Executive Officer, April 1986 to August
1992, and Director, WICOR, Inc. A
Director since 1986.
George E. Wardeberg Chairman and Chief Executive Officer
Age 64 since 1997, President and Chief Executive
Officer from 1994 to 1997, WICOR, Inc., a
holding company with subsidiaries in
energy services and pump manufacturing.
Also a director of Twin Disc, Inc. A
Director since April 1999.
Class III Directors (terms expiring April 2002)
Oscar C. Boldt Chairman, The Boldt Group, Inc.,
Age 75 subsidiaries in general contracting,
development and related businesses. A
Director since May 1994.
Timothy E. Hoeksema Chairman and Chief Executive Officer of
Age 53 Midwest Express Holdings, Inc., a holding
company with a principal subsidiary in
the passenger jet airline business, since
1983. Also a director of The Marcus
Corporation. A Director since April 1999.
Burleigh E. Jacobs Chairman of the Board and Director, Grede
Age 80 Foundries, Inc., a manufacturer of grey
and ductile iron, steel, and alloyed
castings. A Director since 1967.
James F. Kress Chairman, Green Bay Packaging, Inc., a
Age 70 manufacturer of corrugated and packaging
materials. A Director since 1986.
Robert A. Schaefer Retired; Former Director, Executive Vice
Age 62 President and Chief Operating Officer of
Security Capital Corporation and Former
Director, President and Chief Operating
Officer of Security Bank S.S.B. A
Director since December 1997.
John S. Shiely President, Chief Operating Officer and
Age 47 Director since 1994, Executive Vice
President-Administration from 1991 to
1994, Briggs & Stratton Corporation, a
manufacturer of gasoline engines for
outdoor power equipment. Also a director
of Consolidated Paper, Inc. and
Quad/Graphics, Inc. A Director since
April 1999.
Gus A. Zuehlke Retired; Former Chairman, Valley
Age 78 Bancorporation until May 1994; Former
Chairman, Valley Bank, Appleton,
Wisconsin, until May 1994. A Director
since May 1994.
<PAGE>
The Board of Directors of the Company has standing
Executive Compensation, Audit, Retirement Investment,
Nominating and Executive Committees. The Board of
Directors held six meetings in 1999. Each incumbent
Director attended at least 75% of the meetings of the
Board and Board Committees on which the director
served.
The Executive Compensation Committee is
responsible for administering compensation levels for
certain senior officers of the Company and its
subsidiaries, including all executive officers of the
Company, and for administering the Company's
nonqualified compensation plans, including the
Executive Stock Option Plans, the 1994 Long-Term
Incentive Plan and the Annual Executive Incentive
Compensation Plan. The members of the Executive
Compensation Committee in 1999 were Messrs. Jacobs
(Chairman), Kellner, O'Hare and Wright, none of whom
are employees of the Company or any of its
subsidiaries. The Executive Compensation Committee
held four meetings in 1999. Salaries for other
employees of the Company and its subsidiaries are
determined by the management of the respective
subsidiaries and are reviewed by the compensation
committee of the Board of Directors of the subsidiary
involved.
The Audit Committee has responsibility for nominating the Company's
independent auditors for approval by the Board of Directors, reviewing the
scope, results and costs of the audit with the Company's independent
auditors and reviewing the financial statements of the Company and the audit
function to ensure full compliance with requirements of regulatory agencies
and full disclosure of necessary information to the shareholders of the
Company. In 1999, the members of the Audit Committee, all of whom are non-
employee directors, were Messrs. Kellner (Chairman), O'Hare and Wright. The
Audit Committee held three meetings in 1999.
The Retirement Investment Committee is responsible, in relation to
funding policy, for reviewing the activities of and decisions made by the
trustees of, and the investment managers for, the Company's Retirement
Growth Plan and Incentive Savings Plan. The members of the Retirement
Investment Committee, none of whom are employees of the Company, are Messrs.
O'Hare (Chairman), Chait and Tisdale. The Committee held two meetings in
1999.
The Nominating Committee is responsible for
recommending to the Board nominees to stand for
election as directors and to fill any vacancies which
may occur from time to time. In addition, the
Nominating Committee is responsible for considering any
nominations for director submitted by shareholders and
for reviewing the size and composition of the Board and
the criteria for selecting nominees to the Board.
Current employees of the Company are not eligible to
serve on the Nominating Committee. The members of the
Nominating Committee are Messrs. Tisdale (Chairman),
Chait and Boldt. The Nominating Committee has not
established procedures for shareholders to recommend
nominees for director beyond those contained in the
Company's By-laws. The Nominating Committee held one
meeting in 1999.
The Executive Committee has the authority to act
on behalf of the full Board of Directors in managing
the business and affairs of the Company when the Board
of Directors is not in session. The members of the
Executive Committee in 1999 were Messrs. Wigdale
(Chairman), Jacobs, Kellner and Tisdale. The Executive
Committee held four meetings in 1999.
LOANS AND OTHER TRANSACTIONS WITH THE COMPANY
Customers of the bank subsidiaries of the Company
include nominees, directors and officers of the Company
and their associates. Since January 1, 1999, such
persons and firms have been indebted to the Company's
bank subsidiaries for loans made in the ordinary course
of business. All such loans were made on substantially
the same terms, including interest rates and
collateral, as those prevailing at the time for
comparable transactions with others and did not involve
more than the normal risk of collectibility or present
other unfavorable features. Loans to directors and
executive officers, including their related interests,
by the Company and its significant subsidiaries
represented approximately _____% of shareholders equity
at December 31, 1999.
From time to time, directors and officers of the
Company and their associates may sell shares of their
Common Stock to the Company pursuant to the Company's
stock repurchase program. The purchase price for any
such sales is the prevailing market price at the time
of such sale.
<PAGE>
<TABLE>
SUMMARY COMPENSATION TABLE
Long-Term Compensation(1)
Awards Payouts
Annual Securities
Name and Compensation Underlying LTIP All Other
Principal Position Year Salary($) Bonus($) Options/SARs(#) Payouts $(2) Compensation($)(3)
<S> <C> <C> <C> <C> <C> <C>
J.B. Wigdale 1999 $700,000 $750,540 122,500 $1,838,895 $514,715
Chairman of the Board 1998 700,000 586,250 100,000 738,825 502,625
and Chief Executive 1997 625,000 526,813 30,000 779,850 456,894
Officer
D.J. Kuester 1999 600,000 576,601 69,500 1,593,709 279,718
President 1998 600,000 506,490 50,000 640,315 279,334
1997 525,000 446,123 26,000 675,870 235,874
G.H. Gunnlaugsson 1999 500,000 480,518 55,000 1,103,337 178,924
Executive Vice 1998 500,000 422,068 40,000 443,295 178,745
President and Chief 1997 400,000 340,130 20,000 467,910 156,387
Financial Officer
J.L. Delgadillo 1999 360,000 316,000 29,000 490,372 57,391
Senior Vice President 1998 320,000 250,000 20,000 197,020 51,052
1997 300,000 200,000 12,000 207,960 41,007
T.M. Bolger 1999 260,000 212,342 29,000 245,186 39,200
Senior Vice President 1998 230,000 170,000 20,000 0 35,836
1997 200,000 125,000 8,000 0 31,474
</TABLE>
____________________
(1) As of December 31, 1999, Mr. Delgadillo had 2,000
shares of unreleased Key Restricted Stock valued
at $123,625 The value was arrived at using a
December 31, 1999 closing market price of $62.8125
per share less consideration which is paid by the
executive upon issuance of award. Dividends are
paid on restricted stock.
(2) LTIP payouts in any given year are based on the
number of LTIP units awarded with respect to the
prior three-year period and the Company's
performance during such period. Accordingly, the
amount of LTIP payouts may vary from year to year
and in some years, like 1996, there may be no
payouts under the LTIP. For 1999 the named
executive officers received payouts for awards
made with respect to the three-year period from
January 1997 through December 1999. The
performance criteria for this three-year cycle was
based upon the Company's total shareholder return
in relation to companies in the Keefe, Bruyette &
Woods 50 Bank Index (the "KBW 50 Index"). During
this period, the Company's total shareholder
return was 31% higher than the average total
shareholder return of companies in the KBW 50
Index.
(3) Includes the following amounts paid by M&I under
the Retirement Program for 1999: J.B. Wigdale -
$17,600; D.J. Kuester - $13,200; G.H. Gunnlaugsson
- $17,600; J.L. Delgadillo - $17,600 and T.M.
Bolger - $17,600. Includes the following amounts
paid by M&I under a Split Dollar Life Insurance
Plan for the benefit of the executives for 1999:
J.B. Wigdale - $13,842; D.J. Kuester - $6,384 and
G.H. Gunnlaugsson - $5,974. Includes the
following employer contributions under the
Supplementary Retirement Benefits Plan and the
Executive Deferred Compensation Plan based on
compensation paid or deferred during 1999:
J.B. Wigdale - $90,100; D.J. Kuester - $79,800;
G.H. Gunnlaugsson - $60,700; J.L. Delgadillo -
$36,000 and T.M. Bolger - $21,600. Includes the
following above-market amount accrued by M&I on
account balances under the Supplementary
Retirement Benefits Plan and the Executive
Deferred Compensation Plan for 1999: J.L.
Delgadillo - $3,791. Also includes the following
amounts accrued by M&I under the Non-Qualified
Retirement Benefit Plan for 1999: J.B. Wigdale -
$393,173; D.J. Kuester - $180,334 and G.H.
Gunnlaugsson - $94,650.
<PAGE>
The following table provides information on options
granted to the named executive officers during 1999.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise or Grant Date
Options/SARs Employees in Base Price Expiration Present
Name Granted (#)(1) Fiscal Year ($/Sh)(2) Date Value($)(3)
J.B. Wigdale 122,500 7.9% $61.50 12/16/09 $2,393,822
D.J. Kuester 69,500 4.5 61.50 12/16/09 1,358,127
G.H. Gunnlaugsson 55,000 3.6 61.50 12/16/09 1,074,777
J.L. Delgadillo 29,000 1.9 61.50 12/16/09 566,701
T.M. Bolger 29,000 1.9 61.50 12/16/09 566,701
______________
(1) Includes options transferable to the employees'
immediate family or trusts or partnerships for the
benefit thereof. Options generally become
exercisable based on the following schedule: one-
third on the first anniversary of the date of
grant, an additional one-third on the second
anniversary of the date of grant and the remaining
one-third on the third anniversary of the date of
grant. All options will become immediately
exercisable upon a "Triggering Event" (which
relates to a change of control of the Company).
Employees who have attained age 55 and have at
least ten years of service with the Company or a
subsidiary receive options which are fully vested
on the date of grant.
(2) All options have an exercise price equal to 100%
of the fair market value of the Company's Common
Stock on the date of grant. The exercise price
may be paid in cash or by delivery of shares of
the Company's Common Stock. Upon exercise of an
option, the holder may satisfy any tax obligations
either by having the Company withhold shares or by
delivering shares such holder already owns.
(3) The grant date present values were determined
using the Black-Scholes model with the following
common assumptions: a six year expected period of
time to exercise; a risk-free rate of return of
6.30%; an expected dividend yield of 1.56%; and a
volatility factor of 24.36%.
The following table provides information on
options exercised during 1999, and options held at year
end, by the named executive officers.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FY-END OPTION/SAR VALUES
<TABLE>
Number of Securities Value of Unexercised
Shares Underlying Unexercised In-the-Money Options/SARs
Acquired on Value Options/SARs at FY-End(#)(1) at FY-End($)(2)
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
J.B. Wigdale 75,000 3,532,478 518,500 0 12,696,706 0
D.J. Kuester 60,000 2,685,110 345,500 0 9,161,919 0
G.H. Gunnlaugsson 45,175 2,200,324 203,575 20,000 4,902,679 220,000
J.L. Delgadillo 0 0 61,000 39,000 1,730,066 148,063
T.M. Bolger 0 0 50,000 39,000 1,459,128 148,063
</TABLE>
______________
(1) Includes shares which were transferred to the
employees' immediate family or trusts or
partnerships for the benefit thereof.
(2) For valuation purposes, a December 31, 1999 market
price of $62.8125 was used.
In past years the Company has provided information
on long-term incentive plan awards with respect to the
performance period commencing in the prior fiscal year.
However, the Company has not provided information on
awards granted in the prior fiscal year. For example,
in this proxy statement the Company would have included
awards granted in December 1998 for the performance
period beginning January 1999. The Company has decided
<PAGE>
to change this practice and include information on
awards granted in both the current and prior fiscal
years. Accordingly, the following table provides
information on long-term incentive plan awards to the
named executive officers with respect to 1999 and 2000.
LONG-TERM INCENTIVE PLAN-AWARDS IN LAST FISCAL YEAR
Awards Granted December1999 Awards Granted December 1998
for the Performance Period for the Performance
Beginning January 2000 Period Beginning January 1999
Number of Performance or Number of Performance or
Shares, Other Period Shares, Other Period
Units or Until Units or Until
Other Maturation or Other Maturation or
Name Rights Payout (1) Rights Payout (1)
J. B. Wigdale 7,500 3 Years 15,000 3 Years
D. J. Kuester 6,500 3 Years 13,000 3 Years
G. H. Gunnlaugson 5,000 3 Years 10,000 3 Years
J. L. Delgadillo 3,000 3 Years 6,000 3 Years
T. M. Bolger 3,000 3 Years 6,000 3 Years
_________________
(1) Units awarded represent share equivalents of the
Company's Common Stock. The performance period is
the three years commencing on January 1, 2000 and
ending on December 31, 2002 for awards made with
respect to 2000 and the three years commencing on
January 1, 1999 and ending on December 31, 2001
for awards made with respect to 1999. Additional
Units will be credited to each participant's
account when dividends are paid on shares of the
Company's Common Stock. Vesting of Units occurs
at the end of the three-year period with the
exception of the death or disability of the
participant, termination of a participant's
employment due to retirement or the occurrence of
a "Triggering Event" (which relates to a change in
control of the Company). A payout multiple is
applied to the Units awarded to a participant
based on the Company's performance in relation to
two equally weighted performance criteria, which
represent (i) the total return of the Company's
Common Stock for the three-year period when
compared with the total return for those stocks
composing the KBW 50 Index and (ii) the Company's
cumulative earnings per share for the three-year
period. The Company's performance in relation to
the performance criteria is calculated
independently, thereby allowing a participant to
receive a payout under one of the criterion but
not under the other. The minimum payout multiple
is zero for each criterion and the maximum is
137.50%, resulting in a combined maximum of 275%.
The resulting payout multiple is applied to the
Units awarded plus those credited in lieu of
dividends. Before awards are paid, the Committee
must certify the extent to which the performance
criteria have been met.
RETIREMENT PLANS
The Marshall & Ilsley Corporation Nonqualified
Retirement Benefit Plan (the "Nonqualified Plan")
provides five of the executive officers of M&I with a
monthly supplemental retirement benefit. The original
purpose of the Nonqualified Plan was to provide a
benefit such that the sum of benefits from the
Retirement Growth Plan, Social Security, the
Supplementary Retirement Benefits Plan and the
Nonqualified Plan would equal 60% of each participant's
average salary and bonus for his last five years of
employment. The monthly benefit under the Nonqualified
Plan, starting in most instances when an individual
reaches age 65, is fixed based on various actuarial and
interest rate assumptions. As of February 1, 2000, the
monthly benefits are $24,167, $23,167 and $14,958 for
Messrs. Wigdale, Kuester and Gunnlaugsson,
respectively, and $3,292 for one other executive
officer. The benefit will be adjusted in the event of
death before age 62 or early retirement and can be paid
for life with a 120-month certain payout or on a joint
and survivor basis at the option of the participant.
The pay-out option elected will also affect the amount
of the annual benefit. If a participant leaves the
employ of the Company prior to age 55, he will receive
no benefits under the Nonqualified Plan. In the event
of a Change in Control of the Company (as defined in
the Nonqualified Plan), each participant will receive
the full monthly benefit set forth above regardless of
his age when the Change in Control occurs and whether
he remains in the employ of M&I until age 55. A
participant has the option, in certain circumstances,
to elect to receive the present value of the benefits
to which he is entitled under the Nonqualified Plan
upon a Change in Control regardless of his age at that
point.
<PAGE>
The Marshall & Ilsley Corporation Executive
Deferred Compensation Plan (the "Deferred Compensation
Plan") provides selected key employees of M&I,
including the named executive officers, with the
ability to defer up to 80% of base salary and 100% of
bonus. Those employees electing to participate have
two investment options for amounts deferred: a fixed
rate option equal to the Moody's A Long-Term Corporate
Bond Rate for the month of September of the previous
year and an equity option equal to the total return of
the S&P 500 Index. The percentage allocated to any
investment option may not be less than 10% and
elections may be changed semi-annually. Amounts
deferred are distributable upon termination of
employment at the election of the participant. Choices
range from a lump sum distribution upon termination of
employment to a pay-out over 15 years if a
participant's employment terminates on or after age 55,
other than because of death or disability, with at
least 10 years of service. Amounts deferred and
investment returns thereon are held in the Marshall &
Ilsley Corporation Deferred Compensation Trust II of
which Marshall & Ilsley Trust Company is the trustee
(the "Trust").
M&I's Supplementary Retirement Benefits Plan (the
"SERP") is a nonqualified benefit plan which covers
employees whose compensation exceeds the statutory
limits on compensation which can be taken into account
for purposes of crediting contributions to M&I's
Retirement Growth Plan, including all of the executive
officers named in the Summary Compensation Table. The
SERP was suspended in August 1999 and M&I will make no
further contributions to the SERP. Existing account
balances under M&I's Retirement Growth Plan in the SERP
will continue to vest as long as the participant
remains employed by M&I and will be credited with the
applicable investment return until pay-out pursuant to
the terms of the SERP. The Deferred Compensation Plan
was amended such that persons eligible to participate
therein will receive an allocation equal to the amount
that would have formerly been allocated under the SERP.
This amount, which would have been allocated to such
participant's account under M&I's Retirement Growth
Plan absent the statutory limitations, is credited to
an account which vests after an employee has five years
of vesting service as defined in M&I's Retirement
Growth Plan. Participants have the same investment and
pay-out elections as other accounts in the Deferred
Compensation Plan, described above, and amounts
credited under the SERP are held in the Trust.
EMPLOYMENT AGREEMENTS AND RELATED MATTERS
In order to assure management continuity and
stability, as of February 1, 2000, M&I has entered into
substantially similar Employment Agreements (the
"Employment Agreements") with the named executive
officers, seven additional executive officers and 21
other officers and employees of the Company and its
subsidiaries (collectively, the "Executives"). The
Employment Agreements with the named executive officers
each have a term of three years. The Employment
Agreements with the other Executives each have a term
of two years.
The Employment Agreements guarantee the Executives
specific payments and benefits upon a termination of
employment as a result of a change of control of M&I.
If a change of control occurs, the contract becomes
effective and continues for the relevant term. The
employment term renews on a daily basis until M&I gives
notice to terminate the daily renewal.
The Employment Agreements provide for specified
benefits after a change of control if the Executive
voluntarily terminates for "good reason" or is
involuntarily terminated other than for "cause" (as
defined in the Employment Agreements). In addition, in
the case of some Employment Agreements, at the end of
six months after a change of control, the Executive may
terminate employment for any reason and is entitled to
receive full benefits. Upon a termination, the
Executive is entitled to (a) a lump sum payment equal
to two or three times (depending on whether the
contract is a two- or three-year contract) the sum of
the Executive's current base salary plus the higher of
the Executive's bonus for the last year or the
Executive's average bonus for the past three years, (b)
a proportionate amount of any unpaid bonus deemed
earned for the year of termination, (c) a lump sum
payment equal to the retirement benefits lost as a
result of not having been employed for the remaining
contract term, (d) health and other benefits for the
remaining contract term, and (e) payments for certain
other fringe benefits. In the event of a termination
of employment as a result of his death, the Executive's
beneficiary is entitled to six months of base salary.
No additional benefits are guaranteed under the
contract upon an Executive's disability or termination
by M&I for cause.
The Employment Agreements provide that upon a
change of control most restrictions limiting the
exercise, transferability or other incidents of
ownership of any outstanding award, restricted stock,
options, stock appreciation rights, or other property
rights of M&I granted to the Executive shall lapse, and
such awards shall become fully
<PAGE>
vested, except in certain circumstances. Some of the Employment
Agreements also provide for "gross-up" payments in the
event payments to an Executive under the Employment
Agreement are subject to Section 4999 of the Internal
Revenue Code of 1986, as amended (the "Code"), (the
"Excise Tax") or any similar federal, state or local
tax which may be imposed, in an amount such that the
net amount retained by the Executive, after deduction
of any Excise Tax on the payments and any federal,
state and local income tax and Excise Tax on the
gross-up payment, shall be equal to the payments then
due.
NON-EMPLOYEE DIRECTOR COMPENSATION
Directors of M&I who are not employees are paid a
retainer fee of $12,000 per year. In addition, non-
employee directors receive a fee of $1,500 for each
Board meeting which they attend and $500 for each
Committee meeting which they attend. M&I has
established a deferred compensation plan for its
Directors. Under such plan, all or part of the fees
received by a Director may be deferred at the election
of the Director. Amounts deferred may be allocated to
one of two accounts as selected by the participating
Director: (i) the Common Stock account or (ii) a cash
account, earning interest at a rate equal to that
earned on U.S. Treasury Bills with maturities of 13
weeks. Deferred amounts are payable in a lump sum or
in not less than two nor more than 10 annual
installments, as elected by the participating Director,
or, if no such election is made, in five annual
installments. Messrs.
_______________________________________ elected to
defer compensation under the plan during 1999.
Directors of M&I who are also Directors of subsidiaries
of M&I receive compensation from such subsidiaries in
varying amounts based on the Director compensation
schedule of such subsidiaries. Directors of
subsidiaries of M&I may also elect to defer
compensation under the plan.
Directors of M&I who are not employees of M&I or
its subsidiaries ("Participants") also participate in
the 1995 Directors Stock Option Plan. On the date of
each Annual Meeting of Shareholders, each Participant
elected or re-elected as a director at such Annual
Meeting receives an option for that number of shares of
Common Stock equal to the multiple of 2,500 and the
number of years in the term to which such Participant
has been elected. In addition, a Participant who is
appointed to fill a vacancy on the Board of Directors,
or a director who becomes a Participant because such
director ceases to be employed by the Company or its
subsidiaries, will receive, on the date of the next
Annual Meeting, an option for that number of shares of
Common Stock equal to a multiple of 2,500 and the
number of years remaining in such Participant's term as
a director of the Company. Under the terms of this
plan, the option price per share will not be less than
100% of the fair market value of the shares on the date
the option is granted, the options will not be
exercisable more than 10 years after the date of grant,
and the options will terminate no later than three
years after the Participant ceases to be a director of
the Company for any reason. Such options may be
exercised at any time after they are granted. The
exercise price of an option may, at the Participant's
election, be paid in cash or previously owned shares of
Common Stock or a combination thereof.
In connection with the merger with Valley
Bancorporation on May 31, 1994, M&I agreed to provide
Mr. Zuehlke with a $100,000 annual consulting fee for
the remainder of his life. Mr. Zuehlke also receives a
car, office space and membership in a professional
organization.
EXECUTIVE COMPENSATION COMMITTEE REPORT
General Policy
The Executive Compensation Committee (the
"Committee") determines the compensation policy for
executive officers, makes awards and sets performance
criteria under the Company's incentive plans, and
determines the salary levels for executive officers.
The Committee bases its compensation decisions
primarily on its overall assessment of the executive's
contribution to the profitability of the Company on
both a long-term and short-term basis and the relevant
market relationship of the executive officer's
compensation. The Committee reviews the executive's
performance in light of both the historical financial
performance of the Company and the Committee's
assessment of the executive's role in ensuring the
future financial success of the Company. In this
respect, the Committee seeks to reward leadership,
innovation and entrepreneurship. The compensation
package for senior executives has both objective
(performance based) and subjective elements. Awards
under the Annual Executive Incentive Plan are based on
the achievement of specified performance criteria
determined by the Committee. For certain executive
officers, the financial performance of the business
unit or division for which
<PAGE>
that executive has responsibility may receive a proportionately
larger consideration by the Committee in determining that
executive's compensation. The Committee reviews the
compensation plans for executives in order to determine
whether such plans are consistent with the Company's
objectives and financial performance.
The Committee is aware of the limitations imposed
by Section 162(m) of the Internal Revenue Code of 1986,
as amended, on the deductibility of compensation paid
to certain senior executives to the extent it exceeds
$1 million per executive. The Committee currently
intends to recommend compensation amounts and plans
which will meet the requirements for deductibility.
1999 Compensation
Overview
With regard to 1999 compensation decisions, the
Committee reviewed the Company's financial performance
on both a long-term and short-term basis, the overall
performance of each executive officer, and various peer
group analyses and other information which the
Committee deemed relevant in the case of any particular
individual. The peer group analyses provided the
Committee with information on the market relationship
of compensation paid to the Company's executive
officers. The analyses included information on the
companies in the KBW 50 Index which is the same peer
group used in the performance graph. The Committee
also compared the Company's compensation levels and
financial performance to a more defined peer group of
similarly sized bank holding companies which is not
identical to the KBW 50 Index. In reviewing this
information, the Committee took into account the
Company's size and performance relative to the
companies in the peer groups. The Committee did not,
however, set the compensation for the Company's
executive officers at a specific level as compared to
the executives in either peer group. The Committee's
compensation determinations generally reflect
competitive factors and performance. In the case of
any particular individual, circumstances unique to such
individual such as increased responsibilities or
extraordinary effort may also be reflected. In
assessing the Company's performance, the Committee
considered, among other things, the profitability of
the Company as a whole on both a long-term and short-
term basis (including net income, earnings per share,
return on average shareholders' equity and return on
average assets). The Committee's decisions with
respect to compensation generally reflect all of the
factors considered, including objective factors and the
Committee's subjective assessment of the executive's
performance.
Annual Executive Incentive Plan
The Annual Executive Incentive Plan provides for
annual cash incentives (bonuses) to the participants
based upon one or more objective financial performance
criteria selected by the Committee. The Annual
Executive Incentive Plan rewards eligible senior
executives with an incentive award based on a
percentage of each participant's base salary if the
performance goals set by the Committee are met for that
year. In evaluating the participants' bonus
opportunity under the Annual Executive Incentive Plan,
the Committee compared each participant's base salary
and bonus opportunity relative to those provided by
peer companies. Based upon this analysis, the
Committee determined that it was appropriate to
increase the 1999 targeted incentive percentages for
certain senior executive officers, including the chief
executive officer. These increases were done in
conjunction with the Committee's decision to leave the
base salaries unchanged from 1998 for each of the top
three executive officers. The performance criteria for
1999 was based upon reported earnings per share. In
future years, the Committee may use a performance
criteria different than reported earnings per share or
may adjust performance to reflect extraordinary events.
For example, if the Company were to incur extraordinary
charges in connection with an acquisition, the
performance may be adjusted to exclude such charges.
The Company earned $3.14 per share, representing a
13.8% increase over 1998. This exceeded the targeted
performance level established by the Committee for
1999, and resulted in eligible executive officers
receiving payouts ranging from 33% to 107% of their
respective 1999 base salaries.
Base Salary and Long-Term Incentive Compensation
In determining the base salaries for the Company's
executive officers, the Committee takes a long-term
view of the executive's job performance, the Company's
financial performance and the salaries paid in the
marketplace to executives with similar
responsibilities. The Committee also reviewed the
total compensation
<PAGE>
opportunities of each senior
executive officer. The Committee deemed it appropriate
to leave the base salaries unchanged from 1998 for the
top three executive officers. The Committee believes
the base salaries, when viewed in conjunction with the
annual incentive opportunities of the executive
officers, are commensurate with the Committee's
evaluation of the information reviewed. Such
compensation decisions were based on all the factors,
both objective and subjective, considered by the
Committee and generally no one specific criteria was
applied in making such decisions.
The Committee made long-term incentive awards in
1999 under the Company's Executive Stock Option Plans
and the LTIP. The purpose of these awards is to
furnish long-term incentives to executive officers to
build shareholder value and to motivate and retain the
personnel critical to the Company's success. It is the
intention of the Committee to continue to emphasize
long-term incentives in the compensation provided to
the Company's executive officers. In arriving at the
1999 long-term incentive award levels, the Committee
compared the total compensation opportunities of each
senior executive officer, and the values of each
compensation component, in relation to those provided
by peer companies for similar positions. After the
Committee determined the appropriate value of the total
long-term awards provided to each senior executive
officer, the Committee then determined the mix between
stock options and long-term incentive plan units. The
Committee also considered the impact of different types
of long-term compensation on the financial performance
of the Company. Based upon this analysis and other
information reviewed, the Committee decided to reduce
the number of LTIP Units and increase the number of
stock options awarded to senior executives in
comparison to preceding years. This resulted in senior
executives receiving LTIP Unit awards which were one-
half the size of the 1998 awards.
In determining the total number of options to be
granted in 1999 to all recipients, including the
executive officers, the Committee reviewed the annual
option awards and cumulative options outstanding of the
peer group companies in relation to outstanding shares.
The Committee also considered the reduction in LTIP
Unit awards described above. Based upon this review,
and recognizing the Company's growth, the Committee
determined an increase in the Company's overall option
awards was appropriate. In 1999, grants to employees
totaled 1,549,225 options, or approximately 1.5% of
shares outstanding. The Committee believes annual
awards at this level are comparable to the award levels
of the peer group companies.
Participants in the Company's LTIP, including the
executive officers, received payouts for awards made
with respect to the three-year period from January 1997
through December 1999. The performance criteria for
this three-year cycle was based upon the Company's
total shareholder return in relation to companies in
the KBW 50 Index. During this period, the Company's
total shareholder return was 31% higher than the
average total shareholder return of companies in the
KBW 50 Index.
Chief Executive Officer Compensation
In determining Mr. Wigdale's salary and long-term
incentive awards, the Committee's review concentrated
on the prevailing market rates of compensation for his
position and the Company's current and prior year's
financial performance. The Committee considered the
compensation of the chief executive officers of the
peer group companies, taking into account the Company's
size and performance relative to the companies in the
peer groups, in order to determine whether Mr. Wigdale
is compensated on a basis which is reasonably
consistent. Mr. Wigdale received an Annual Executive
Incentive Plan Award of 107% of his base salary,
resulting from the Company's 1999 earnings per share
performance in relation to the goals established under
the plan. It is the Committee's conclusion that Mr.
Wigdale's compensation is fair and appropriate.
The Compensation Committee:
Mr. Jacobs, Chairman Mr. Kellner Mr. O'Hare Mr. Wright
<PAGE>
PERFORMANCE GRAPH
The following graph shows the cumulative total
stockholder return on the Company's Common Stock over
the last five fiscal years compared to the returns of
the Standard & Poor's 500 Stock Index and the KBW 50
Index.
CUMULATIVE TOTAL RETURN
ASSUMES DIVIDENDS & CAPITAL GAINS REINVESTED
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
M&I $100 $141 $192 $350 $335 $366
S&P 500 100 138 169 226 290 351
KBW 50 100 160 227 331 359 346
KBW = KEEFE, BRUYETTE & WOOD, INC. 50-BANK INDEX; S&P = STANDARD & POOR'S 500
<PAGE>
2000 EMPLOYEE STOCK PURCHASE PLAN
The complete text of the Stock Purchase Plan is
set forth in Appendix A. The following summary of the
material features of the Stock Purchase Plan is
qualified in its entirety by reference to Appendix A.
The Board of Directors recommends a vote FOR
approval of the Stock Purchase Plan.
The Board of Directors approved the Company's
Stock Purchase Plan on February 10, 2000, subject to
approval by the Company's shareholders. The purpose of
the Stock Purchase Plan is to provide employees of the
Company and its subsidiaries with an opportunity to
purchase the Company's Common Stock through one or more
offerings. The aggregate number of shares of Common
Stock subject to the Stock Purchase Plan is 1,000,000,
plus an annual increase on each January 1 beginning on
January 1, 2001 equal to the lesser of (i) 100,000
shares, (ii) the number of shares purchased under the
Stock Purchase Plan in the previous year or (iii) a
lesser amount determined by the Board of Directors. No
one person may purchase shares of Common Stock under
the Stock Purchase Plan or any other stock purchase
plan of the Company or its subsidiaries having a fair
market value in excess of $25,000 for each calendar
year, and no employee may be granted an option under
the Stock Purchase Plan if, immediately after the
grant, such employee would own 5% or more of the total
combined voting power or value of all classes of stock
of the Company or its subsidiaries.
The term of each offering under the Stock Purchase
Plan is 12 months, commencing on July 1, 2000 and on
the first trading day on or after July 1 of each
calendar year thereafter, and ending on the last
trading day in June of such calendar year. Eligible
employees who elect to participate in the Stock
Purchase Plan authorize periodic payroll deductions
from their compensation. A payroll deduction account
is maintained for each employee. At the end of an
offering period, the payroll deduction account is
totaled and the employee is deemed to have purchased
shares of the Company's Common Stock at the purchase
price, which is 85% of the lesser of the fair market
value of the Company's Common Stock on the first or
last days of the offering period.
The Stock Purchase Plan may be amended by the
Board of Directors at any time, provided that no
amendment may be made without shareholder approval to
increase the aggregate number of shares which may be
issued under the Stock Purchase Plan or for which
shareholder approval is required under applicable tax,
securities or other laws. If the Board of Directors
determines that the ongoing operation of the Stock
Purchase Plan may result in unfavorable financial
accounting consequences, the Board may amend the Stock
Purchase Plan to reduce or eliminate such accounting
consequences. Such amendments may be made without
shareholder approval or without the consent of
participating employees.
Counsel for the Company has advised that the
federal income tax consequences to employees who
purchase shares of Common Stock under the Stock
Purchase Plan are generally as follows. Participating
employees will not be deemed to have recognized taxable
income upon the grant or exercise of an option to
purchase shares of Common Stock. If, however, a
participating employee disposes of any shares received
by such employee pursuant to the Stock Purchase Plan
within two years after the first day of the offering
period during which the employee purchases such shares,
the participating employee will recognize ordinary
income at the time of such disposition in an amount
equal to the excess of the fair market value of the
shares at the end of the offering period over the price
the participating employee paid for the shares. If a
participating employee disposes of such shares at any
time after the expiration of the two-year holding
period described above, the participating employee will
recognize ordinary income at the time of such
disposition only to the extent of an amount equal to
the lesser of (i) the excess of the fair market value
of the shares at the time of such disposition over the
price the employee paid for the shares, or (ii) 15% of
the fair market value of the shares on the first day of
the offering period. The remainder of the gain, if
any, recognized on such disposition will be taxed as
capital gain.
2000 EXECUTIVE STOCK OPTION AND RESTRICTED STOCK PLAN
The complete text of the 2000 Stock Option Plan is
set forth in Appendix B. The following summary of the
material features of the 2000 Stock Option Plan is
qualified in its entirety by reference to Appendix B.
<PAGE>
The Board of Directors recommends a vote FOR
approval of the 2000 Stock Option Plan.
The Board of Directors adopted the 2000 Stock
Option Plan to provide officers, key employees, non-
employee directors and consultants of the Company and
its subsidiaries with additional incentives by
increasing their proprietary interest in the Company.
The aggregate number of shares of Common Stock subject
to the 2000 Stock Option Plan is 5,000,000 shares, all
of which may be granted as incentive stock options. No
one person may receive options over more than 1,000,000
shares during the term of the 2000 Stock Option Plan,
and the Company will not issue more than 250,000
restricted shares of Common Stock during the term of
the 2000 Stock Option Plan.
The 2000 Stock Option Plan permits the Company to
grant non-qualified stock options ("Non-qualified
Options"), incentive stock options ("ISOs"), as defined
in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), and restricted shares of Common
Stock ("Restricted Shares") (individually, an "Award"
and collectively, "Awards"). No Award may be granted
under the 2000 Stock Option Plan after February 9,
2010.
Under the 2000 Stock Option Plan, Awards may be
granted to current and prospective employees, non-
employee directors, consultants and other persons who
provide services to the Company. The holder of an
Award is referred to herein as a "Participant." As of
February 15, 2000, approximately 3,400 individuals
would be eligible to participate in the 2000 Stock
Option Plan.
In the event of any changes in the capital
structure of the Company, the Compensation Committee
may make equitable adjustments to outstanding Awards so
that the net value of the Award is not changed. Any
unvested Awards will vest upon the occurrence of a
Change in Control of the Company (as defined in the
2000 Stock Option Plan).
The 2000 Stock Option Plan is intended to qualify
for favorable treatment under Section 16 of the
Securities Exchange Act of 1934, as amended (the
"Exchange Act"), pursuant to Rule 16b-3 and is designed
to qualify for treatment as "performance-based
compensation" under Section 162(m) of the Code
("Section 162(m)") as regards the options. The 2000
Stock Option Plan will be administered by the
Compensation Committee, which is comprised of at least
two directors, all of whom are "disinterested" within
the meaning of Rule 16b-3 and "outside directors"
within the meaning of Section 162(m).
The exercise price for Non-qualified Options
granted under the 2000 Stock Option Plan may be no less
than 100% of the fair market value of the Common Stock
on the date of grant of the option. The exercise price
for ISOs granted under the 2000 Stock Option Plan may
be no less than 100% of the fair market value of the
Common Stock on the date of grant (or 110% in the case
of ISOs granted to Participants owning more than 10% of
the Common Stock). Options will be exercisable during
the period specified in each option agreement and will
generally be exercisable in installments pursuant to a
vesting schedule to be designated by the Compensation
Committee. No option will remain exercisable later
than ten years after the date of grant (or five years
from the date of grant in the case of ISOs granted to
holders of more than 10% of the Common Stock). The
closing sale price of the Common Stock on the New York
Stock Exchange on February 15, 2000 was $49.9375.
Restricted Shares may also be granted under the
2000 Stock Option Plan. An award of Restricted Shares
involves the immediate transfer by the Company to a
Participant of ownership of a specific number of shares
of Common Stock in consideration of the performance of
services and such other consideration as the
Compensation Committee may designate. Restricted
Shares must be subject to a "substantial risk of
forfeiture" for a period to be determined by the
Compensation Committee. In order to enforce these
forfeiture provisions, the transferability of
Restricted Shares will be prohibited or restricted in a
manner and to the extent prescribed by the Compensation
Committee for the period during which the forfeiture
provisions are to continue.
In the event of termination of employment or
service other than as a result of death, disability or
Retirement (as defined in the 2000 Stock Option Plan),
a Participant will generally have 90 days after
termination to exercise options which were vested on
the date of termination. A Participant who is a
director of the Company will generally have until the
earlier of the tenth anniversary of the date of grant
or the third anniversary of the termination of the
Participant's service as a director to exercise options
which were vested on the date of termination. The
Compensation Committee has discretion to provide the
period for which, and the extent to which,
<PAGE>
options remain exercisable in the event of termination
of employment resulting from death, disability or
Retirement. Restricted Shares are generally forfeited
upon termination of employment for any reason.
The 2000 Stock Option Plan may be amended by the
Board of Directors, but certain amendments adversely
affecting the rights of a Participant under any
existing Award may not be made without obtaining the
Participant's written consent, and amendments
increasing the number of shares which may be issued
under the 2000 Stock Option Plan may not be made
without obtaining shareholder approval.
Counsel for the Company has advised that the
federal income tax consequences of Non-qualified
Options, ISOs and Restricted Shares granted under the
2000 Stock Option Plan are generally as follows:
Non-qualified Options. The grant of a Non-
qualified Option will have no federal income tax
consequences to the Company or to a Participant. A
Participant will recognize taxable ordinary income at
the time of exercise of the option in an amount equal
to the excess of the fair market value of the shares
acquired at the time of exercise over the option price,
and the Company will ordinarily be entitled to a
deduction for such amount.
The holder of shares acquired upon exercise of a
Non-qualified Option will, upon a subsequent
disposition of such shares, generally recognize a short-
term or long term capital gain or loss, depending upon
the holding period of the shares, equal to the
difference between the amount realized on the sale and
the basis in such shares (the sum of the option price
and the amount taxed as ordinary income at the time of
exercise).
ISOs. Neither the grant nor exercise of an ISO
will generally have any federal income tax consequences
for a Participant. The amount by which the fair market
value of the shares acquired upon the exercise of any
ISO exceeds the option price as of the date of
exercise, however, is an item of "tax preference" for
purposes of computing the alternative minimum tax on
individuals. If a Participant has held the shares
acquired on the exercise of an ISO for at least two
years from the date of the grant of the option and at
least one year from the date of exercise, the
Participant will recognize taxable long-term capital
gain or loss upon a subsequent disposition of the
shares. In such circumstances, no deduction would be
allowed to the Company for federal income tax purposes
in connection with the grant or exercise of the option
or the transfer of shares acquired upon such exercise.
If, however, the Participant disposes of his or
her shares within the holding periods described above,
(i) the Participant will recognize ordinary income in
an amount equal to the difference between the fair
market value of such shares on the date of exercise and
the option price, provided that, if the disposition is
a sale or exchange with respect to which a loss (if
sustained) would be recognized by the Participant and
the amount realized from such sale or exchange is less
than the fair market value on the exercise date, then
the ordinary income will be limited to the excess of
the amount realized upon the sale or exchange of the
shares over the option price; (ii) the Company will be
entitled to a deduction for such year in the amount of
the ordinary income so recognized; and (iii) the
Participant will recognize capital gain or loss, as the
case may be, in an amount equal to the difference
between the amount realized upon such sale or exchange
of the shares and the sum of the option price plus the
amount of ordinary income, if any, recognized upon such
disposition.
Restricted Shares. The grant of Restricted Shares
is not a taxable event to a Participant, absent an
election under Section 83(b) of the Code. If no
election is made, the Participant will recognize
income, taxable for income tax purposes at ordinary
rates, upon the lapse of the restrictions governing the
shares. The amount of the income will equal the fair
market value of the shares when the restrictions lapse.
If the Participant makes a Section 83(b) election
within 30 days of the date of grant, he or she will be
deemed to have received ordinary income at the time of
the grant of the Restricted Shares equal to their fair
market value at the date of grant less any amount paid
by the Participant for the shares, determined without
regard to the restrictions imposed thereon. If the
Restricted Shares are subsequently forfeited after a
Section 83(b) election and before the restrictions
lapse, the Participant is not entitled to claim the
loss for income tax purposes.
The Company or a subsidiary will be entitled to a
deduction for income tax purposes when the Participant
recognizes ordinary income, either as a result of a
Section 83(b) election or because of the lapse of the
restrictions. The amount of the deduction will equal
the amount of ordinary income recognized by the
Participant.
<PAGE>
AMENDMENT TO THE RESTATED ARTICLES OF INCORPORATION
The Board of Directors recommends a vote FOR
approval of the amendment to the Company's Restated
Articles of Incorporation.
The proposed amendment to the Company's Restated
Articles of Incorporation increases the number of
authorized shares of Common Stock from 160,000,000
shares to 320,000,000 shares. As of February ___,
2000, of the 160,000,000 shares of Common Stock
presently authorized, ___________ shares were issued
and outstanding and _________ shares were reserved for
issuance pursuant to the Company's stock option and
stock purchase plans (including the Stock Purchase Plan
and the 2000 Stock Option Plan).
The additional authorized shares of the Company's
Common Stock may be used for any proper corporate
purpose approved by the Board of Directors of the
Company. Their availability could enable the Board of
Directors to act with flexibility when favorable
opportunities arise to expand or strengthen the
Company's business through the issuance of Common
Stock. Among the reasons for issuing additional shares
would be to increase the Company's capital through sale
of the Company's Common Stock, to engage in other types
of capital transactions, to undertake acquisitions and
to satisfy contractual commitments, including the
Company's stock option and stock purchase plans. The
Board of Directors has not proposed the increase in
authorized capital stock with the intention of
discouraging tender offers or takeover attempts.
However, the availability of authorized shares for
issuance could render more difficult or discourage a
merger, tender offer, proxy contest or other attempt to
obtain control of the Company.
The Company regularly reviews a range of financing
transactions including the issuance of the Company's
Common Stock. Except for shares reserved for issuance
as described above, the Company has no present
intention of issuing or selling Common Stock for any
purpose, but may do so if market and other conditions
indicate that such a course of action is advisable.
If the amendment to the Company's Restated
Articles of Incorporation is approved, the Board of
Directors generally may issue the additional authorized
shares of Common Stock without further shareholder
approval. In some instances, shareholder approval for
the issuance of additional shares may be required by
law or by the requirements of the New York Stock
Exchange, on which the Common Stock is listed, or may
otherwise be necessary or desirable. Except in such
cases, the Company does not anticipate that further
shareholder authorization will be solicited.
Shareholders are not entitled to preemptive rights to
purchase any new issue of Common Stock.
SUBMISSION OF SHAREHOLDER PROPOSALS
The 2001 Annual Meeting of Shareholders is
scheduled for April 24, 2001. In accordance with the
Company's By-Laws, nominations, other than by or at the
direction of the Board of Directors, of candidates for
election as directors at the 2001 Annual Meeting of
Shareholders and any other shareholder proposed
business to be brought before the 2001 Annual Meeting
of Shareholders must be submitted to the Company no
later than January 24, 2001. Shareholder proposed
nominations and other shareholder proposed business
must be made in accordance with the Company's By-Laws
which provide, among other things, that shareholder
proposed nominations must be accompanied by certain
information concerning the nominee and the shareholder
submitting the nomination, and that shareholder
proposed business must be accompanied by certain
information concerning the proposal and the shareholder
submitting the proposal. To be considered for
inclusion in the proxy statement solicited by the Board
of Directors, shareholder proposals for consideration
at the 2001 Annual Meeting of Shareholders of the
Company must be received by the Company at its
principal executive offices, 770 North Water Street,
Milwaukee, Wisconsin 53202 on or before November 3,
2000. Proposals should be directed to Mr. M.A.
Hatfield, Senior Vice President and Secretary. To
avoid disputes as to the date of receipt, it is
suggested that any shareholder proposal be submitted by
certified mail, return receipt requested.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Arthur
Andersen LLP as the Company's independent auditors for
the fiscal year ending December 31, 2000.
Representatives of Arthur Andersen LLP will be present
at the Annual Meeting to make any statement they may
desire and to respond to questions from shareholders.
<PAGE>
PENDING LEGAL PROCEEDINGS
No director or named executive officer is an
adverse party or has an interest adverse to the Company
or any of its subsidiaries in any material pending
legal proceeding.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act
of 1934 requires the Company's directors and officers
to file reports with the Securities and Exchange
Commission disclosing their ownership, and changes in
their ownership, of stock in the Company. Copies of
these reports must also be furnished to the Company.
Based solely on a review of these copies, the Company
believes that during 1999 all filing requirements were
complied with.
OTHER VOTING INFORMATION
Shareholders may vote over the Internet, by
telephone or by completing a traditional proxy card.
Votes submitted electronically over the Internet or by
telephone must be received by _________________,
Central Standard Time, on April ____, 2000. To vote
over the Internet or by telephone, please refer to the
instructions on the accompanying proxy card.
The Internet and telephone voting procedures are
designed to authenticate shareholder identities, to
allow shareholders to give their voting instructions
and to confirm that shareholders' instructions have
been recorded properly. Shareholders voting via the
Internet should understand that there may be costs
associated with electronic access, such as usage
charges from Internet access providers and telephone
companies, that must be borne by the shareholder.
OTHER MATTERS
Although management is not aware of any other
matters that may come before the meeting, if any such
matters should be presented, the persons named in the
accompanying proxy intend to vote such proxy in
accordance with their best judgment.
The Company's financial statements, supplementary
financial information, management's discussion and
analysis of financial condition and results of
operations and quantitative and qualitative disclosures
about market risk are incorporated herein by reference
to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1999.
By Order of the Board of Directors,
M.A. Hatfield, Senior Vice President
and Secretary
<PAGE>
Appendix A
MARSHALL & ILSLEY CORPORATION
2000 EMPLOYEE STOCK PURCHASE PLAN
1. Purpose. The purpose of the Plan is to provide
eligible employees of the Company and its Designated
Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll
deductions. It is the intention of the Company to have
the Plan qualify as an "Employee Stock Purchase Plan"
under Section 423 of the Code. The provisions of the
Plan, accordingly, shall be construed so as to extend
and limit participation in a manner consistent with the
requirements of that section of the Code.
2. Definitions.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Change of Control" shall mean the first to occur of the following:
(1) The acquisition by any individual, entity or
"group" (within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of thirty-three percent (33%) or more of
either (i) the then outstanding shares of common stock
of the Company (the "Outstanding Company Common Stock")
or (ii) the combined voting power of the then
outstanding voting securities of the Company entitled
to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); provided,
however, that the following acquisitions of Common
Stock shall not constitute a Change of Control: (i)
any acquisition directly from the Company (excluding an
acquisition by virtue of the exercise of a conversion
privilege or by one person or a group of persons acting
in concert), (ii) any acquisition by the Company, (iii)
any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company
or any corporation controlled by the Company or (iv)
any acquisition by any corporation pursuant to a
reorganization, merger, statutory share exchange or
consolidation which would not be a Change of Control
under subsection (3) below; or
(2) Individuals who, as of the date hereof, constitute
the Board (the "Incumbent Board") cease for any reason
to constitute at least a majority of the Board;
provided, however, that any individual becoming a
director subsequent to the date hereof whose election,
or nomination for election by the Company's
shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent
Board shall be considered as though such individual
were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial
assumption of office occurs as a result of either an
actual or threatened "election contest" or other actual
or threatened "solicitation" (as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) of proxies or consents by or on behalf of
a person other than the Incumbent Board; or
(3) Consummation of a reorganization, merger,
statutory share exchange or consolidation, unless,
following such reorganization, merger, statutory share
exchange or consolidation, (i) more than two-thirds
(2/3) of, respectively, the then outstanding shares of
common stock of the corporation resulting from such
reorganization, merger, statutory share exchange or
consolidation and the combined voting power of the then
outstanding voting securities of such corporation
entitled to vote generally in the election of directors
is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and
entities who were the beneficial owners, respectively,
of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such
reorganization, merger, statutory share exchange or
consolidation in substantially the same proportions as
their ownership, immediately
<PAGE>
prior to such reorganization, merger, statutory share exchange
or consolidation, (ii) no person (excluding the Company,
any employee benefit plan (or related trust) of the
Company or such corporation resulting from such
reorganization, merger, statutory share exchange or
consolidation and any person beneficially owning,
immediately prior to such reorganization, merger,
statutory share exchange or consolidation, directly or
indirectly, thirty-three percent (33%) or more of the
Outstanding Company Common Stock or Outstanding Voting
Securities, as the case may be) beneficially owns,
directly or indirectly, thirty-three percent (33%) or
more of, respectively, the then outstanding shares of
common stock of the corporation resulting from such
reorganization, merger, statutory share exchange or
consolidation or the combined voting power of the then
outstanding voting securities of such corporation,
entitled to vote generally in the election of directors
and (iii) at least a majority of the members of the
board of directors of the corporation resulting from
such reorganization, merger, statutory share exchange
or consolidation were members of the Incumbent Board at
the time of the execution of the initial agreement
providing for such reorganization, merger or
consolidation; or
(4) Consummation of (i) a complete liquidation or
dissolution of the Company or (ii) the sale or other
disposition of all or substantially all of the assets
of the Company, other than to a corporation, with
respect to which following such sale or other
disposition, (A) more than two-thirds (2/3) of,
respectively, the then outstanding shares of common
stock of such corporation and the combined voting power
of the then outstanding voting securities of such
corporation entitled to vote generally in the election
of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the
individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities
immediately prior to such sale or other disposition in
substantially the same proportion as their ownership,
immediately prior to such sale or other disposition, of
the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be, (B) no
person (excluding the Company and any employee benefit
plan (or related trust) of the Company or such
corporation and any person beneficially owning,
immediately prior to such sale or other disposition,
directly or indirectly, thirty-three percent (33%) or
more of the Outstanding Company Common Stock or
Outstanding Company Voting Securities, as the case may
be) beneficially owns, directly or indirectly, thirty-
three percent (33%) or more of, respectively, the then
outstanding shares of common stock of such corporation
or the combined voting power of the then outstanding
voting securities of such corporation entitled to vote
generally in the election of directors and (C) at least
a majority of the members of the board of directors of
such corporation were members of the Incumbent Board at
the time of the execution of the initial agreement or
action of the Board providing for such sale or other
disposition of assets of the Company.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(d) "Committee" shall mean the Board or such other
persons or committee as the Board shall designate to
administer the Plan.
(e) "Common Stock" shall mean the Common Stock of the Company.
(f) "Company" shall mean Marshall & Ilsley Corporation, a Wisconsin
corporation.
(g) "Corporate Change" shall mean a general workforce
reduction (as determined in the sole discretion of the
Committee) instituted by the Company or a Designated
Subsidiary, the sale of the applicable Designated
Subsidiary, or the sale of the bank branch or other
business to which a participant's employment was
primarily related.
(h) "Designated Subsidiary" shall mean any Subsidiary,
other than a Subsidiary which has been designated by
the Board or Committee from time to time in its sole
discretion as not eligible to participate in the Plan.
<PAGE>
(i) "Employee" shall mean any regular full time or
part-time employee of the Company or a Designated
Subsidiary customarily employed to work at least 17.5
hours per week. A person shall not cease to be an
Employee in the event that service is interrupted due
to sick leave, military leave or any other leave of
absence approved by the Committee, provided that such
leave is for a period of not more than ninety (90)
days, unless employment upon the expiration of such
leave is guaranteed by contract or statute, or unless
provided otherwise pursuant to Company policy adopted
from time to time.
(j) "Enrollment Date" shall mean the first day of each Offering Period.
(k) "Enrollment Period" shall mean the period
specified by the Committee during which eligible
Employees may elect to participate in the Plan for the
upcoming Offering Period.
(l) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
(m) "Exercise Date" shall mean the last day of each Offering Period.
(n) "Fair Market Value" shall mean, as of any date,
the value of Common Stock determined as follows:
(1) If the Common Stock is listed on any established
stock exchange or a national market system, its Fair
Market Value shall be the closing sales price for such
stock (or the closing bid, if no sales were reported)
as quoted on such exchange or system for the date of
such determination, as reported in The Wall Street
Journal or such other source as the Board deems
reliable; or
(2) If the Common Stock is not so listed, the Fair
Market Value thereof shall be determined in good faith
by the Board.
(o) "Offering Period" shall mean a period of
approximately twelve (12) months during which an option
granted pursuant to the Plan may be exercised,
commencing on the first trading day on or after July 1
of each calendar year, commencing July 1, 2000, and
terminating on the last trading day in June of such
calendar year. The duration of Offering Periods may be
changed pursuant to Section 4 of this Plan.
(p) "Plan" shall mean this 2000 Employee Stock Purchase Plan.
(q) "Purchase Price" shall mean an amount equal to 85%
of the Fair Market Value of a share of Common Stock on
the Enrollment Date or on the Exercise Date, whichever
is lower.
(r) "Subsidiary" shall mean any bank or corporation,
domestic or foreign, of which not less than 50% of the
voting power is held by the Company or a Subsidiary,
whether or not such bank or corporation now exists or
is hereafter organized or acquired by the Company or a
Subsidiary.
3. Eligibility.
(a) Any person who is an Employee as of the April 30
preceding the applicable Offering Period shall be
eligible to participate in the Plan with respect to
such Offering Period.
(b) Any provisions of the Plan to the contrary
notwithstanding, no Employee shall be granted an option
under the Plan (i) to the extent that, immediately
after the grant, such Employee (or any other person
whose stock would be attributed to such Employee
pursuant to Section 424(d) of the Code) would own
capital stock of the Company and/or hold outstanding
options to purchase such stock possessing five percent
(5%) or more of the total combined voting power or
value of all classes of the capital stock of the
Company or of any Subsidiary, or (ii) to the extent
that his or her rights to purchase stock under all
employee stock purchase plans of the Company and its
Subsidiaries accrues at a rate which exceeds Twenty-
Five Thousand Dollars ($25,000) worth of stock
(determined at the fair market value of the shares at
the time such option is granted) for each calendar year
in which such option is outstanding at any time. These
limitations are in addition to
<PAGE>
any other limitations set forth herein, including any limits
that the Committee establishes in accordance with Section 6(a).
4. Offering Periods. The Plan shall be implemented
by consecutive Offering Periods with a new Offering
Period commencing on the first business day on or after
July 1 each year, or on such other date as the
Committee shall determine, and continuing thereafter
until terminated in accordance with Section 20 hereof.
The Committee shall have the power to change the
duration of Offering Periods (including the
commencement dates thereof) with respect to future
offerings without shareholder approval.
5. Participation.
(a) An eligible Employee may become a participant in
the Plan by completing a subscription agreement
authorizing payroll deductions in the form approved by
the Committee and filing it with the Human Resources
Corporate Benefits Department during the applicable
Enrollment Period. A participant must file a new
subscription agreement for each Offering Period.
(b) Payroll deductions for a participant shall begin
on the first payroll following the Enrollment Date and
shall end on the last payroll in the Offering Period to
which such authorization is applicable, unless sooner
discontinued or terminated by the participant as
provided in Section 6(c) or Section 10 hereof.
6. Payroll Deductions.
(a) At the time a participant files his or her
subscription agreement, he or she shall elect to have
payroll deductions made on each pay day during the
Offering Period in an amount set forth in the
subscription agreement, not less than $10 for each pay
day. The Committee annually may determine, in its sole
discretion, to establish a maximum dollar amount or
percentage of compensation that an eligible Employee is
entitled to authorize for payroll deductions during a
calendar year, which limitations shall apply to all
eligible Employees. Any such limit established by the
Committee shall fall within the parameters of Section
423 of the Code.
(b) All payroll deductions made for a participant
shall be credited to his or her account under the Plan.
A participant may not make any additional payments into
such account.
(c) A participant may withdraw from the Plan as
provided in Section 10 hereof. Alternatively, a
participant may elect to discontinue making additional
payroll deductions during the Offering Period by
completing and filing with the Human Resources
Corporate Benefits Department a written notice in such
form approved by the Committee. The election shall be
effective no later than the first full payroll period
following ten (10) business days after the Company's
receipt of the notice. If a participant elects to
discontinue making additional payroll deductions, all
payroll deductions previously credited to his or her
account will purchase Common Stock at the end of the
Offering Period subject to the other terms of the Plan.
Except to withdraw in accordance with Section 10 or to
discontinue additional payroll deductions as stated
above, a participant may not change his or her payroll
deduction rate.
(d) At the time the option is exercised, in whole or
in part, or at the time some or all of the Company's
Common Stock issued under the Plan is disposed of, the
participant must make adequate provision for the
Company's federal, state, or other tax withholding
obligations, if any, which arise upon the exercise of
the option or the disposition of the Common Stock and
the Company is authorized to take any action reasonably
necessary to enforce the withholding requirements
including without limitation withholding the
appropriate amount from the proceeds of any stock sale
by the participant. At any time, the Company may, but
shall not be obligated to, withhold from the
participant's compensation the amount necessary for the
Company to meet applicable withholding obligations,
including any withholding required to make available to
the Company any tax deductions or benefits attributable
to sale or early disposition of Common Stock by the
Employee.
7. Grant of Option. On the Enrollment Date of each
Offering Period, each eligible Employee participating
in such Offering Period shall be granted an option to
purchase on the Exercise Date of such Offering Period
(at the applicable Purchase Price) up to a number of
shares of the Company's Common Stock determined by
dividing such Employee's payroll deductions accumulated
on or prior to such Exercise Date and retained in the
<PAGE>
Participant's account as of the Exercise Date by the
applicable Purchase Price and provided that such
purchase shall be subject to the limitations set forth
in Sections 3(b), 6(a) and 13 hereof. Exercise of the
option shall occur as provided in Section 8 hereof,
unless the participant has withdrawn pursuant to
Section 10 hereof. The Option shall expire immediately
following the Exercise Date.
8. Exercise of Option. Unless a participant
withdraws from the Plan as provided in Section 10
hereof, his or her option for the purchase of shares
shall be exercised automatically on the Exercise Date,
and the maximum number of shares subject to option
shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll
deductions in his or her account. A participant in the
Plan initially will hold his or her shares in book-
entry form through an agent designated by the
Committee, and fractional shares will be purchased on
behalf of the participant. During a participant's
lifetime, a participant's option to purchase shares
hereunder is exercisable only by him or her.
9. Delivery. As promptly as administratively
practicable after each Exercise Date on which a
purchase of shares occurs, the Company shall deliver
the purchased shares to the agent designated by the
Committee to hold the shares for participants. An
Employee may, at any time, request that the agent
deliver to him or her a certificate for the full shares
held for his or her account and cash for any fractional
share.
10. Withdrawal.
(a) A participant may withdraw all but not less than
all the payroll deductions credited to his or her
account and not yet used to exercise his or her option
under the Plan at any time by giving written notice to
the Company in such form approved by the Committee.
All of the participant's payroll deductions credited to
his or her account shall be paid to such participant
after receipt of notice of withdrawal as soon as
administratively practicable and such participant's
option for the Offering Period shall be automatically
terminated. Payroll deductions for the purchase of
shares during the Offering Period shall cease as soon
as administratively practicable. If a participant
withdraws from an Offering Period, payroll deductions
shall not resume at the beginning of the succeeding
Offering Period unless the participant delivers to the
Company a new subscription agreement.
(b) A participant's withdrawal from an Offering Period
shall not have any effect upon his or her eligibility
to participate in any similar plan which may hereafter
be adopted by the Company or in succeeding Offering
Periods which commence after the termination of the
Offering Period from which the participant withdraws.
11. Termination of Employment.
(a) Except as provided in Section 11(b) or 11(c), upon
a participant's ceasing to be an employee of the
Company or a Designated Subsidiary for any reason
(including without limitation upon death, disability or
retirement or if a participant's employer shall cease
to be a Designated Subsidiary), he or she shall be
deemed to have elected to withdraw from the Plan and
the payroll deductions credited to such participant's
account during the Offering Period but not yet used to
exercise the option shall be returned to such
participant or, in the case of his or her death, to the
person or persons entitled thereto under Section 15
hereof, and such participant's option shall be
automatically terminated.
(b) Subject in the Committee's discretion to the
Company's receipt of an appropriate private letter
ruling from the Internal Revenue Service, if a
participant ceases to be an employee of the Company or
a Designated Subsidiary within the last three months of
the Offering Period solely due to a Corporate Change,
the participant's option for the then current Offering
Period shall not terminate. In that event, the
participant will be deemed to have elected to cease
making additional payroll deductions for the purchase
of shares following the cessation of the participant's
employment. All payroll deductions credited to his or
her account with respect to the Offering Period will
remain subject to the terms of the Plan, unless the
participant elects to withdraw in accordance with
Section 10.
(c) Subject in the Committee's discretion to the
Company's receipt of an appropriate private letter
ruling from the Internal Revenue Service, if a
participant ceases to be an employee of the Company or a
<PAGE>
Designated Subsidiary prior to the last three months
of the Offering Period solely due to a Corporate
Change, then the Offering Period applicable to the
participant shall be shortened, and a new Exercise Date
(the "New Exercise Date") shall be established. The
New Exercise Date shall be before the date of
termination of employment. The Company shall notify
the participant in writing at least ten (10) business
days prior to the New Exercise Date that the Exercise
Date for the participant's option has been changed to
the New Exercise Date and that the participant's option
shall be exercised automatically on the New Exercise
Date, unless prior to such date the participant has
withdrawn from the Offering Period as provided in
Section 10 hereof.
12. Interest. No interest shall accrue on the payroll
deductions of a participant in the Plan.
13. Stock.
(a) Subject to adjustment upon changes in
capitalization of the Company as provided in Section 19
hereof, the maximum number of shares of the Company's
Common Stock which shall be made available for sale
under the Plan shall be one million (1,000,000) shares,
plus an annual increase to be added on each January 1
beginning on January 1, 2001 equal to the lesser of (i)
one hundred thousand (100,000) shares, (ii) the number
of shares purchased hereunder in the previous year or
(iii) a lesser amount determined by the Board. If, on
a given Exercise Date, the number of shares with
respect to which options are to be exercised exceeds
the number of shares then available under the Plan, the
Committee shall make a pro rata allocation of the
shares remaining available for purchase among the
participants in such manner as it may determine in its
sole discretion.
(b) The participant shall have no interest or voting
right in shares covered by his option until such option
has been exercised.
14. Administration. The Plan shall be administered by
the Committee. The Committee shall have full and
exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine
eligibility and to adjudicate all disputed claims filed
under the Plan. Every finding, decision and
determination made by the Committee shall, to the full
extent permitted by law, be final and binding upon all
parties.
15. Designation of Beneficiary.
(a) A participant may designate, on the subscription
agreement filed with the Committee, a beneficiary who
is to receive any shares and cash, if any, from the
participant's account under the Plan in the event of
such participant's death subsequent to an Exercise Date
but prior to delivery of such shares and cash to the
agent designated to hold the shares. In addition, a
participant may file a written designation of a
beneficiary who is to receive any cash from the
participant's account under the Plan in the event of
such participant's death prior to exercise of the
option.
(b) Such designation of beneficiary may be changed by
the participant at any time by written notice. In the
event of the death of a participant and in the absence
of a beneficiary validly designated under the Plan who
is living at the time of such participant's death, the
Company shall deliver such shares and/or cash to the
estate of the participant.
16. Transferability. Neither payroll deductions
credited to a participant's account nor any rights with
regard to the exercise of an option or to receive
shares under the Plan may be assigned, transferred,
pledged or otherwise disposed of in any way (other than
by will, the laws of descent and distribution or as
provided in Section 15 hereof) by the participant. Any
such attempt at assignment, transfer, pledge or other
disposition shall be without effect, except that the
Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with
Section 10 hereof.
17. Use of Funds. All payroll deductions received or
held by the Company under the Plan may be used by the
Company for any corporate purpose, and the Company
shall not be obligated to segregate such payroll
deductions.
18. Reports. Individual accounts shall be maintained
for each participant in the Plan. Statements of
account shall be given to participating Employees at
least annually, which statements shall set forth the
amounts of
<PAGE>
payroll deductions, the Purchase Price, the
number of shares purchased under the Plan, the
remaining cash balance, if any, and, if applicable, the
number of shares held by the agent designated to hold
the shares for the participant and the shares purchased
by the participant in connection with participation in
any related dividend reinvestment feature.
19. Adjustments Upon Changes in Capitalization, Merger or Asset Sale.
(a) Changes in Capitalization. Subject to any
required action by the shareholders of the Company, the
shares reserved for issuance under the Plan, as well as
the price per share and the number of shares of Common
Stock covered by each option under the Plan which has
not yet been exercised shall be proportionately
adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination
or reclassification of the Common Stock, or any other
increase or decrease in the number of shares of Common
Stock effected without receipt of consideration by the
Company. Such adjustment shall be made by the Board,
whose determination in that respect shall be final,
binding and conclusive.
(b) Change of Control. In the event of a Change of
Control, the Offering Period then in progress shall be
shortened by the Committee's setting a new Exercise
Date (the "New Exercise Date"). The New Exercise Date
shall be before the date of the Change of Control. The
Company shall notify each participant in writing, at
least ten (10) business days prior to the New Exercise
Date, that the Exercise Date for the participant's
option has been changed to the New Exercise Date and
that the participant's option shall be exercised
automatically on the New Exercise Date, unless prior to
such date the participant has withdrawn from the
Offering Period as provided in Section 10 hereof.
Immediately following such New Exercise Date, the Plan
shall terminate.
20. Amendment or Termination.
(a) The Board may at any time, or from time to time,
amend this Plan in any respect; provided, however, that
no amendment shall be made without the approval of the
shareholders of the Company to increase the aggregate
number of shares which may be issued under this Plan
(other than as provided in Paragraph 13(a) or 19(a)
hereof) or for which shareholder approval is required
under applicable tax, securities or other laws.
(b) Without limitation of paragraph 20(a), in the
event that the Board determines that the ongoing
operation of the Plan may result in unfavorable
financial accounting consequences, the Board may, in
its discretion and, to the extent necessary or
desirable, amend the Plan to reduce or eliminate such
accounting consequence including, but not limited to:
(i) altering the Purchase Price for any Offering
Period including an Offering Period underway at the
time of the change in Purchase Price;
(ii) shortening any Offering Period such that the
Offering Period ends on a new Exercise Date, including
an Offering Period underway at the time of the action
of the Board; and
(iii) allocating shares.
(c) This Plan and all rights of Employees under any
offering hereunder shall terminate at any time, at the
discretion of the Board or Committee. Upon any
termination of this Plan, all amounts in the accounts
of participating Employees shall be either (i) promptly
refunded in total or (ii) refunded to the extent not
used to purchase Common Stock, in the sole discretion
of the Board or Committee.
Such amendments shall be made without the approval of
the shareholders of the Company or the consent of any
participating Employees.
<PAGE>
21. Notices. All notices or other communications by a
participant to the Company under or in connection with
the Plan shall be deemed to have been duly given when
received in the form specified by the Company at the
location, or by the person, designated by the Company
for the receipt thereof.
22. Conditions Upon Issuance of Shares. Shares shall
not be issued with respect to an option unless the
exercise of such option and the issuance and delivery
of such shares pursuant thereto shall comply with all
applicable provisions of law, domestic or foreign,
including, without limitation, the Securities Act of
1933, as amended, and the rules and regulations
promulgated thereunder.
23. Term of Plan. The Plan shall become effective
upon its adoption by the Board, but shall be subject to
its approval by the shareholders of the Company. It
shall continue in effect for a term of ten (10) years
unless sooner terminated under Section 20 hereof.
<PAGE>
Appendix B
MARSHALL & ILSLEY CORPORATION
2000 EXECUTIVE STOCK OPTION AND RESTRICTED STOCK PLAN
1. Objectives. The Marshall & Ilsley Corporation
2000 Executive Stock Option and Restricted Stock Plan
is designed to attract and retain certain selected
officers, key employees, non-employee directors and
consultants whose skills and talents are important to
the Company's operations, and reward them for making
major contributions to the success of the Company.
These objectives are accomplished by making awards
under the Plan, thereby providing Participants with a
proprietary interest in the growth and performance of
the Company.
2. Definitions.
(a) "Award" shall mean the grant of any form
of stock option or stock award to a Plan
Participant pursuant to such terms, conditions and
limitations as the Board or Committee may
establish in order to fulfill the objectives of
the Plan.
(b) "Award Agreement" shall mean the
agreement that sets forth the terms, conditions
and limitations applicable to an Award.
(c) "Board" shall mean the Board of
Directors of Marshall & Ilsley Corporation.
(d) "Cause" shall mean the discharge of an
employee on account of fraud or embezzlement
against the Company or serious and willful acts of
misconduct which, in the reasonable judgment of
the Committee, are detrimental to the business of
the Company.
(e) "Change in Control" shall mean any of
the following:
(i) The acquisition by any individual,
entity or "group" (within the meaning of
Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended
(the "Exchange Act")) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of thirty-three
percent (33%) or more of either (A) the then
outstanding shares of common stock of the
Company (the "Outstanding Company Common
Stock") or (B) the combined voting power of
the then outstanding voting securities of the
Company entitled to vote generally in the
election of directors (the "Outstanding
Company Voting Securities"); provided,
however, that the following acquisitions of
common stock shall not constitute a Change in
Control: (A) any acquisition directly from
the Company (excluding an acquisition by
virtue of the exercise of a conversion
privilege or by one person or a group of
persons acting in concert), (B) any
acquisition by the Company, (C) any
acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the
Company or any corporation controlled by the
Company or (D) any acquisition by any
corporation pursuant to a reorganization,
merger, statutory share exchange or
consolidation which would not be a Change in
Control under paragraph (iii) of this Section
2(e); or
(ii) Individuals who, as of the date
hereof, constitute the Board (the "Incumbent
Board") cease for any reason to constitute at
least a majority of the Board; provided,
however, that any individual becoming a
director subsequent to the date hereof whose
election, or nomination for election by the
Company's shareholders, was approved by a
vote of at least a majority of the directors
then comprising the Incumbent Board shall be
considered as though such individual were a
member of the Incumbent Board, but excluding,
for this purpose, any such individual whose
initial assumption of office occurs as a
result of either an actual or threatened
"election contest" or other actual or
threatened "solicitation" (as such terms are used
<PAGE>
in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) of
proxies or consents by or on behalf of a
person other than the Incumbent Board; or
(iii) Consummation of a reorganization,
merger, statutory share exchange or
consolidation, unless, following such
reorganization, merger, statutory share
exchange or consolidation, (A) more than two-
thirds (2/3) of, respectively, the then
outstanding shares of common stock of the
corporation resulting from such
reorganization, merger, statutory share
exchange or consolidation and the combined
voting power of the then outstanding voting
securities of such corporation entitled to
vote generally in the election of directors
is then beneficially owned, directly or
indirectly, by all or substantially all of
the individuals and entities who were the
beneficial owners, respectively, of the
Outstanding Company Common Stock and
Outstanding Company Voting Securities
immediately prior to such reorganization,
merger, statutory share exchange or
consolidation in substantially the same
proportions as their ownership, immediately
prior to such reorganization, merger,
statutory share exchange or consolidation,
(B) no person (excluding the Company, any
employee benefit plan (or related trust) of
the Company or such corporation resulting
from such reorganization, merger, statutory
share exchange or consolidation and any
person beneficially owning, immediately prior
to such reorganization, merger, statutory
share exchange or consolidation, directly or
indirectly, thirty-three percent (33%) or
more of the Outstanding Company Common Stock
or Outstanding Voting Securities, as the case
may be) beneficially owns, directly or
indirectly, thirty-three percent (33%) or
more of, respectively, the then outstanding
shares of common stock of the corporation
resulting from such reorganization, merger,
statutory share exchange or consolidation or
the combined voting power of the then
outstanding voting securities of such
corporation, entitled to vote generally in
the election of directors and (C) at least a
majority of the members of the board of
directors of the corporation resulting from
such reorganization, merger, statutory share
exchange or consolidation were members of the
Incumbent Board at the time of the execution
of the initial agreement providing for such
reorganization, merger or consolidation; or
(iv) Consummation of (A) a complete
liquidation or dissolution of the Company or
(B) the sale or other disposition of all or
substantially all of the assets of the
Company, other than to a corporation, with
respect to which following such sale or other
disposition, (1) more than two-thirds (2/3)
of, respectively, the then outstanding shares
of common stock of such corporation and the
combined voting power of the then outstanding
voting securities of such corporation
entitled to vote generally in the election of
directors is then beneficially owned,
directly or indirectly, by all or
substantially all of the individuals and
entities who were the beneficial owners,
respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting
Securities immediately prior to such sale or
other disposition in substantially the same
proportion as their ownership, immediately
prior to such sale or other disposition, of
the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the
case may be, (2) no person (excluding the
Company and any employee benefit plan (or
related trust) of the Company or such
corporation and any person beneficially
owning, immediately prior to such sale or
other disposition, directly or indirectly,
thirty-three percent (33%) or more of the
Outstanding Company Common Stock or
Outstanding Company Voting Securities, as the
case may be) beneficially owns, directly or
indirectly, thirty-three percent (33%) or
more of, respectively, the then outstanding
shares of common stock of such corporation or
the combined voting power of the then
outstanding voting securities of such
corporation entitled to vote generally in the
election of directors and (C) at least a
majority of the members of the board of
directors of such corporation were members of
the Incumbent Board at the time of the
execution of the initial agreement or action
of the Board providing for such sale or other
disposition of assets of the Company.
(f) "Common Stock" or "stock" shall mean the
authorized and issued or unissued $1.00 par value
common stock of the Company.
<PAGE>
(g) "Code" shall mean the Internal Revenue
Code of 1986, as amended from time to time.
(h) "Committee" shall mean the Executive
Compensation Committee of the Board of Directors
of Marshall & Ilsley Corporation. The Committee
shall be comprised of at least two non-employee
directors all of whom are "disinterested" within
the meaning of Rule 16b-3 promulgated under the
Securities Exchange Act of 1934 and "outside
directors" within the meaning of Section 162(m) of
the Code.
(i) "Company" shall mean Marshall & Ilsley
Corporation and its subsidiaries including
subsidiaries of subsidiaries and partnerships and
other business ventures in which Marshall & Ilsley
Corporation has a significant equity interest, as
determined in the sole discretion of the
Committee.
(j) "Fair Market Value" shall mean the
closing sale price of Common Stock on the New
York Stock Exchange as reported in the Midwest
Edition of the Wall Street Journal for the date of
grant provided that, if no sales of Common Stock
were made on said exchange on that date, "Fair
Market Value" shall mean the closing sale price of
Common Stock as reported for the most recent
preceding day on which sales of Common Stock were
made on said exchange, or, failing any such sales,
such other market price as the Board or the
Committee may determine in conformity with
pertinent law and regulations of the Treasury
Department.
(k) "Participant" shall mean a current or
prospective employee, non-employee director,
consultant or other person who provides services
to the Company to whom an Award has been made
under the Plan.
(l) "Plan" shall mean the Marshall & Ilsley
Corporation 2000 Executive Stock Option and
Restricted Stock Plan.
(m) "Retirement" shall mean the termination
of a Participant's employment on or after age 65.
3. Eligibility. Current and prospective
employees, non-employee directors, consultants or other
persons who provide services to the Company eligible
for an Award under the Plan are those who hold, or will
hold, positions of responsibility and whose
performance, in the judgment of the Committee or the
management of the Company (if such responsibility is
delegated pursuant to Section 6 hereof), can have a
significant effect on the success of the Company.
4. Common Stock Available for Awards. Subject to
adjustment as provided in Section 14 hereof, the number
of shares that may be issued under the Plan for Awards
during the term of the Plan is 5,000,000 shares of
Common Stock, all of which may be in the form of
incentive stock options. Any shares subject to an
Award which are used in settlement of tax withholding
obligations shall be deemed not to have been issued for
purposes of determining the maximum number of shares
available for issuance under the Plan. Likewise, if
any Stock Option is exercised by tendering shares,
either actually or by attestation, to the Company as
full or partial payment for such exercise under this
Plan, only the number of shares issued net of the
shares tendered shall be deemed issued for purposes of
determining the maximum number of shares available for
issuance under the Plan. No individual shall be
eligible to receive Awards aggregating more than
1,000,000 shares of Common Stock reserved under the
Plan during the term of the Plan and the Company will
not issue more than 250,000 shares of Restricted Stock
during the term of the Plan. The Company shall take
whatever actions are necessary to file required
documents with the U.S. Securities and Exchange
Commission and any other appropriate governmental
authorities and stock exchanges to make shares of
Common Stock available for issuance pursuant to Awards.
5. Administration. The Plan shall be
administered by the Committee, which shall have full
and exclusive power to interpret the Plan, to determine
which persons are Plan Participants, to grant waivers
of Award restrictions, and to adopt such rules,
regulations and guidelines for carrying out the Plan as
it may deem necessary or proper, all of which powers
shall be executed in the best interests of the Company
and in keeping with the objectives of the Plan.
<PAGE>
6. Delegation of Authority. Except to the extent
prohibited by applicable law or the applicable rules of
a stock exchange, the Committee may delegate to the
chief executive officer and to other senior officers of
the Company its duties under the Plan pursuant to such
conditions or limitations as the Committee may
establish. Any such delegation may be revoked by the
Committee at any time.
7. Awards. The Committee shall determine the
type or types of Award(s) to be made to each
Participant and shall set forth in the related Award
Agreement the terms, conditions and limitations
applicable to each Award including any vesting
requirements. In all events, upon the occurrence of a
Change in Control, all Awards will become fully vested
and immediately exercisable. The type of Awards
available under the Plan are those listed in this
Section 7.
(a) Stock Option. A grant of a right to
purchase a specified number of shares of Common
Stock the purchase price of which shall be not
less than 100% of Fair Market Value on the date of
grant, as determined by the Committee. A stock
option may be in the form of a nonqualified stock
option for all Participants or an incentive stock
option ("ISO") for Participants who are employees.
An ISO, in addition to being subject to applicable
terms, conditions and limitations established by
the Committee, complies with Section 422 of the
Code which, among other limitations, provides that
the aggregate Fair Market Value (determined at the
time the option is granted) of Common Stock for
which ISOs are exercisable for the first time by a
Participant during any calendar year shall not
exceed $100,000; that ISOs shall be priced at not
less than 100% of the Fair Market Value on the
date of the grant (110% in the case of a
Participant who is a 10% shareholder of the
Company within the meaning of Section 422 of the
Code); and that ISOs shall be exercisable for a
period of not more than ten years (five years in
the case of a Participant who is a 10% shareholder
of the Company).
(b) Restricted Stock Award. An Award of
stock for such consideration as the Committee may
specify and which may contain transferability or
forfeiture provisions including a requirement of
future services and such other restrictions and
conditions as may be established by the Committee
and set forth in the Award Agreement.
8. Deferred Payment of Awards. The Committee may
permit selected Participants to elect to defer payments
of some or all types of Awards in accordance with
procedures established by the Committee which are
intended to permit such deferrals to comply with
applicable requirements of the Code including, at the
choice of Participants, the capability to make further
deferrals for payment after retirement. Dividends or
dividend equivalent rights may be extended to and made
part of any Award denominated in stock or units of
stock, subject to such terms, conditions and
restrictions as the Committee may establish. The
Committee may also establish rules and procedures for
the crediting of dividend equivalents for deferred
payments denominated in stock or units of stock.
9. Stock Option Exercise. The price at which
shares of Common Stock may be purchased under a Stock
Option shall be paid in full at the time of the
exercise in cash or by means of tendering Common Stock,
either directly or by attestation, valued at Fair
Market Value on the date of exercise, or any
combination thereof.
10. Tax Withholding. The Company shall have the
right to deduct applicable taxes from any Award payment
and withhold, at the time of delivery or vesting of
shares under the Plan, an appropriate number of shares
for payment of taxes required by law or to take such
other action as may be necessary in the opinion of the
Company to satisfy all obligations for withholding of
such taxes. The Company may defer making delivery with
respect to Common Stock obtained pursuant to an Award
hereunder until arrangements satisfactory to it have
been made with respect to any such withholding
obligation. If Common Stock is used to satisfy tax
withholding, such stock shall be valued based on the
Fair Market Value when the tax withholding is required
to be made.
11. Amendment or Discontinuance of the Plan.
The Board may, at any time, amend or terminate the
Plan; provided, however, that
<PAGE>
(a) subject to Section 14 hereof, no amendment
or termination may, in the absence of
written consent to the change by the
affected Participant (or, if the Participant
is not then living, the affected
beneficiary), adversely affect the rights of
any Participant or beneficiary under any
Award granted under the Plan prior to the
date such amendment is adopted by the Board;
and
(b) without further approval of the shareholders
of the Company, no amendment shall increase
the number of shares of Common Stock which
may be issued pursuant to Awards hereunder,
except for increases resulting from Section
14 hereof.
12. Termination of Employment or Service. If the
employment of a Participant terminates, other than
pursuant to paragraphs (a) through (c) of this Section
12, all unexercised, deferred and unpaid Awards shall
terminate 90 days after such termination of employment
or service, unless the Award Agreement provides
otherwise, and during such 90-day period shall be
exercisable only to the extent provided in the Award
Agreement. Notwithstanding the foregoing, (i) if a
Participant's employment is terminated for Cause, to
the extent the Award is not effectively exercised or
has not vested prior to such termination, it shall
lapse or be forfeited to the Company immediately upon
termination and (ii) a director's option shall
terminate upon the earlier of the tenth anniversary of
the date of grant or the third anniversary of the
termination of the Participant's service as a director.
In all events, an Award will not be exercisable after
the end of its term as set forth in the Award
Agreement.
(a) Retirement. When a Participant's
employment terminates as a result of Retirement,
or early retirement with the consent of the
Committee, the Committee (in the form of an Award
Agreement or otherwise) may permit Awards to
continue in effect beyond the date of Retirement,
or early retirement, and the exercisability and
vesting of any Award may be accelerated.
(b) Resignation in the Best Interests of the
Company. When a Participant resigns from the
Company and, in the judgment of the chief
executive officer or other senior officer
designated by the Committee, the acceleration
and/or continuation of outstanding Awards would be
in the best interests of the Company, the
Committee may authorize, where appropriate taking
into account any regulatory or accounting
implications of such action, the acceleration
and/or continuation of all or any part of Awards
granted prior to such termination.
(c) Death or Disability of a Participant.
(i) In the event of a
Participant's death, the Participant's estate
or beneficiaries shall have a period
specified in the Award Agreement within which
to receive or exercise any outstanding Award
held by the Participant under such terms, and
to the extent, as may be specified in the
applicable Award Agreement. Rights to any
such outstanding Awards shall pass by will or
the laws of descent and distribution in the
following order: (a) to beneficiaries so
designated by the Participant; if none, then
(b) to a legal representative of the
Participant; if none, then (c) to the persons
entitled thereto as determined by a court of
competent jurisdiction. Subject to
subparagraph (iii) below, Awards so passing
shall be exercised or paid out at such times
and in such manner as if the Participant were
living.
(ii) In the event a Participant is
deemed by the Company to be disabled within
the meaning of the Company's long-term
disability plan, the Award shall be
exercisable for the period, and to the
extent, specified in the Award Agreement.
Awards and rights to any such Awards may be
paid to or exercised by the Participant, if
legally competent, or a legally designated
guardian or representative if the Participant
is legally incompetent by virtue of such
disability.
(iii) After the death or
disability of a Participant, the Committee
may in its sole discretion at any time (1)
terminate restrictions in Award Agreements;
(2) accelerate any or all installments and
rights; and (3) instruct the Company to pay
the total of any accelerated
<PAGE>
payments in a lump sum to the Participant, the
Participant's estate, beneficiaries or
representative, notwithstanding that, in the
absence of such termination of restrictions
or acceleration of payments, any or all of
the payments due under the Awards might
ultimately have become payable to other
beneficiaries.
(iv) In the event of uncertainty
as to interpretation of or controversies
concerning this paragraph (c) of Section 12,
the Committee's determinations shall be
binding and conclusive.
(d) No Employment or Service Rights. The
Plan shall not confer upon any Participant any
right with respect to continuation of employment
by the Company or service as a director, nor shall
it interfere in any way with the right of the
Company to terminate any Participant's employment
at any time.
13. Nonassignability. Except as provided in
subsection (c) of Section 12 and this Section 13, no
Award or any other benefit under the Plan shall be
assignable or transferable, or payable to or
exercisable by anyone other than the Participant to
whom it was granted. Notwithstanding the foregoing,
the Committee (in the form of an Award Agreement or
otherwise) may permit Awards, other than ISOs, to be
transferred to members of the Participant's immediate
family, to trusts for the benefit of the Participant
and/or such immediate family members, and to
partnerships or other entities in which the Participant
and/or such immediate family members own all the equity
interests. For purposes of the preceding sentence,
"immediate family" shall mean a Participant's spouse,
issue and spouses of his issue.
14. Adjustments. In the event of any change in
the outstanding Common Stock of the Company by reason
of a stock split, stock dividend, combination or
reclassification of shares, recapitalization, merger,
or similar event, the Committee may adjust
proportionally (a) the number of shares of Common Stock
(i) reserved under the Plan, (ii) available for ISOs,
(iii) for which Awards may be granted to an individual
Participant, and (iv) covered by outstanding Awards
denominated in stock, (b) the stock prices related to
outstanding Awards; and (c) the appropriate Fair Market
Value and other price determinations for such Awards.
In the event of any other change affecting the Common
Stock or any distribution (other than normal cash
dividends) to holders of Common Stock, such adjustments
as may be deemed equitable by the Committee, including
adjustments to avoid fractional shares, shall be made
to give proper effect to such event. In the event of a
corporate merger, consolidation, acquisition of
property or stock, separation, reorganization or
liquidation, the Committee shall be authorized to issue
or assume Stock Options, whether or not in a
transaction to which Section 424(a) of the Code
applies, by means of substitution of new Stock Options
for previously issued Stock Options or an assumption of
previously issued Stock Options.
15. Notice. Any notice to the Company required
by any of the provisions of the Plan shall be addressed
to the director of human resources or to the chief
executive officer of the Company in writing, and shall
become effective when it is received by the office of
either of them.
16. Unfunded Plan. The Plan shall be unfunded.
Although bookkeeping accounts may be established with
respect to Participants who are entitled to Common
Stock under the Plan, any such accounts shall be used
merely as a bookkeeping convenience. The Company shall
not be required to segregate any Common Stock, nor
shall the Plan be construed as providing for such
segregation, nor shall the Company nor the Board nor
the Committee be deemed to be a trustee of any Common
Stock to be granted under the Plan. Any liability of
the Company to any Participant with respect to a grant
of Common Stock or rights thereto under the Plan shall
be based solely upon any contractual obligations that
may be created by the Plan and any Award Agreement; no
such obligation of the Company shall be deemed to be
secured by any pledge or other encumbrance on any
property of the Company. Neither the Company nor the
Board nor the Committee shall be required to give any
security or bond for the performance of any obligation
that may be created by the Plan.
17. Governing Law. The Plan and all
determinations made and actions taken pursuant hereto
shall be governed by the laws of the State of Wisconsin
without giving effect to its conflicts of law
provisions.
<PAGE>
18. Effective and Termination Dates. The
effective date of the Plan is February 10, 2000. The
Plan shall terminate on February 9, 2010 subject to
earlier termination by the Board pursuant to Section
11, after which no Awards may be made under the Plan,
but any such termination shall not affect Awards then
outstanding or the authority of the Committee to
continue to administer the Plan.
19. Other Benefit and Compensation Programs.
Payments and other benefits received by a Participant
pursuant to an Award shall not be deemed a part of such
Participant's regular, recurring compensation for
purposes of the termination or severance plans of the
Company and shall not be included in, nor have any
effect on, the determination of benefits under any
other employee benefit plan, contract or similar
arrangement, unless the Committee expressly determines
otherwise.
<PAGE>
[PRELIMINARY COPY]
Proxy Card
MARSHALL & ILSLEY CORPORATION
You May Vote By Telephone, By Internet or By Mail
(See instructions below)
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned appoints J.B. Wigdale and D.J.
Kuester, and each of them, as proxies, each with the
power to appoint his substitute, and authorizes each of
them to represent and to vote, as designated on the
reverse hereof, all of the shares of stock of Marshall
& Ilsley Corporation held of record by the undersigned
on February 29, 2000 at the 2000 Annual Meeting of
Shareholders of Marshall & Ilsley Corporation to be
held on April 25, 2000 or at any adjournment thereof.
This proxy when properly executed will be voted in
the manner directed herein by the undersigned
shareholder. If no direction is made, this proxy will
be voted "FOR" the election of all nominees for
directors, "FOR" approval of the 2000 Employee Stock
Purchase Plan, "FOR" approval of the 2000 Executive
Stock Option and Restricted Stock Plan and "FOR"
approval of the proposed amendment to the Restated
Articles of Incorporation.
To vote by telephone or via the Internet, follow these steps:
1. Call toll-free on a touch-tone phone 1-877-779-8683
(or for shareholders residing outside the United States,
call on a touch-tone phone 1-201-536-8073, or go to
http://www.eproxyvote.com/MI.
2. Enter your 14-digit voter control number located
on this Proxy Card above your name.
Do not return your Proxy Card if you are voting
by telephone or the Internet.
3. Follow the instructions provided.
(Continued and to be signed on the reverse side.)
<PAGE>
Please mark boxes in blue or black ink.
1. ELECTION OF CLASS I DIRECTORS:
FOR all nominees below to serve for the terms
indicated below and until their successors are
elected and qualified (except as marked to the
contrary below). [ ]
WITHHOLD AUTHORITY to vote for all nominees listed
below. [ ]
(To withhold authority to vote for any individual
nominee, strike a line through that nominee's name
in the list below)
Class I (with terms expiring April 2003): Richard
A. Abdoo, Wendell F. Bueche, Gordon H. Gunnlaugsson,
Ted D. Kellner, Katharine C. Lyall, Peter M.
Platten, III and James B. Wigdale.
2. PROPOSAL TO APPROVE THE 2000 EMPLOYEE STOCK PURCHASE PLAN:
FOR approval of the 2000 Employee Stock Purchase Plan. [ ]
AGAINST approval of the 2000 Employee Stock Purchase Plan. [ ]
ABSTAIN from voting on the 2000 Employee Stock Purchase Plan. [ ]
3. PROPOSAL TO APPROVE THE 2000 EXECUTIVE STOCK
OPTION AND RESTRICTED STOCK PLAN:
FOR approval of the 2000 Executive Stock Option and
Restricted Stock Plan. [ ]
AGAINST approval of the 2000 Executive Stock Option
and Restricted Stock Plan. [ ]
ABSTAIN from voting on the 2000 Executive Stock
Option and Restricted Stock Plan. [ ]
4. PROPOSAL TO AMEND THE RESTATED ARTICLES OF INCORPORATION:
FOR approval of the proposed amendment to the
Restated Articles of Incorporation. [ ]
AGAINST approval of the proposed amendment to the
Restated Articles of Incorporation. [ ]
ABSTAIN from voting on the proposed amendment to the
Restated Articles of Incorporation. [ ]
5. In their discretion, the Proxies are authorized to
vote upon such other business as may properly come
before the meeting.
Please sign exactly as your name appears below.
When shares are held by joint tenants, both
should sign. When signing as attorney,
executor, administrator, trustee or guardian,
please give full title as such. If a
corporation, please sign in full corporate name by
President or other authorized officer. If a
partnership, please sign in partnership name by
authorized person.
Date:________________________________, 2000
______________________________________
(Signature of Shareholder)
Please mark, sign, date and return
this Proxy Card promptly using the ----------------------------------------
envelope provided. (Signature of Shareholder - if held jointly)
Do not return your Proxy Card if you are voting by telephone or the Internet.
