SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of
1934 (Amendment No. )
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Marshall & Ilsley Corporation
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MARSHALL & ILSLEY CORPORATION
770 North Water Street
Milwaukee, Wisconsin 53202
-----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 23, 2002
TO THE SHAREHOLDERS OF MARSHALL & ILSLEY CORPORATION:
The 2002 Annual Meeting of Shareholders of Marshall & Ilsley Corporation
will be held at the Milwaukee Athletic Club, 758 North Broadway, Grand
Ballroom, 4th Floor, Milwaukee, Wisconsin, on Tuesday, April 23, 2002 at 10:00
a.m., local time, for the following purposes:
(1) To elect six Directors to serve until the 2005 Annual Meeting of
Shareholders and until their respective successors are elected and
qualified;
(2) To approve the Marshall & Ilsley Corporation Annual Executive Incentive
Compensation Plan; and
(3) To transact such other business as may properly come before the Annual
Meeting, all in accordance with the accompanying Proxy Statement.
Shareholders of record at the close of business on February 28, 2002 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.
MARK F. FURLONG, Executive Vice
President, Chief Financial Officer
and Secretary
March 11, 2002
MARSHALL & ILSLEY CORPORATION
770 North Water Street
Milwaukee, Wisconsin 53202
March 11, 2002
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 23, 2002 (the "Annual Meeting"). At
the Annual Meeting, the shareholders of the Company will elect six Class III
Directors, each of whom will hold office until April 2005 and, with respect to
each Director, until his or her successor is elected and qualified. The
Company's shareholders will also be asked to approve the Company's Annual
Executive Incentive Compensation Plan.
The expense of printing and mailing proxy materials, including expenses
involved in forwarding materials to beneficial owners of common stock held in
the name of another person, will be borne by the Company. No solicitation other
than by mail is contemplated, except that officers or employees of the Company
or its subsidiaries may solicit the return of proxies from certain shareholders
by telephone. In addition, the Company has retained 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 11, 2002. 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 28, 2002
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 convertible preferred stock (the "Preferred Stock"). As of February 28, 2002,
the Company had outstanding 103,913,315 shares of Common Stock and 336,370
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 executing a later-dated proxy or voting 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 Continental Stock Transfer and
Trust Company, as Trustee. Under the provisions of the Reinvestment Plan,
shares of Common Stock are acquired and held in nominee name by Continental
Stock Transfer and Trust Company 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, 2001 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 III Director and FOR
approval of the Annual Executive Incentive Compensation Plan. Abstentions and
broker non-votes (i.e., proxies from brokers or nominees indicating that such
persons have not received instructions from the beneficial owners to vote
shares as to a matter with respect to which the brokers or nominees do not have
discretionary power to vote) will be treated as present for purposes of
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 six nominees 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. Approval of the
Annual Executive Incentive Compensation Plan requires that the votes cast to
approve the plan exceed the votes cast opposing the approval of the plan.
Abstentions and broker non-votes will not be counted as votes cast and
therefore will not affect the determination of whether the plan is approved.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table lists as of January 31, 2002 information regarding the
beneficial ownership of shares of Common Stock by each current director, each
nominee for director who is not currently a director (Messrs. Mellowes and
O'Toole), 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
current directors and executive officers of the Company as a group:
Amount and
Nature of Percent
Name and Address Beneficial of
of Beneficial Owner Ownership(1) Class
------------------- ------------ -------
Marshall & Ilsley Corporation 9,227,898(2) 8.9%
770 North Water Street
Milwaukee, WI 53202
The Northwestern Mutual Life 7,757,473(3) 7.2%
Insurance Company
720 East Wisconsin Avenue
Milwaukee, WI 53202
Richard A. Abdoo 8,100(4) *
David L. Andreas 1,840,797(5) 1.8%
Oscar C. Boldt 113,786(6) *
Thomas M. Bolger 124,192(7) *
Wendell F. Bueche 32,656(8) *
Jon F. Chait 55,834(9) *
Joseph L. Delgadillo 112,003(10) *
Mark F. Furlong 10,000(11) *
Timothy E. Hoeksema 8,000(4) *
Bruce E. Jacobs 24,100(12) *
Burleigh E. Jacobs 50,540(13) *
Donald R. Johnson 8,550(14) *
Ted D. Kellner 434,830(15) *
James F. Kress 28,000(16) *
Dennis J. Kuester 648,961(17) *
Katharine C. Lyall 12,850(18) *
John A. Mellowes 0 *
Edward L. Meyer, Jr. 43,540(19) *
San W. Orr, Jr. 446,562(20) *
Robert J. O'Toole 0 *
Peter M. Platten, III 279,715(21) *
Robert A. Schaefer 76,568(22) *
John S. Shiely 9,500(4) *
James A. Urdan 54,026(23) *
George E. Wardeberg 19,086(24) *
James B. Wigdale 939,817(25) *
All current directors and executive officers of the Company as a group (33
persons) own 5,895,296 shares of Common Stock or 5.7% of the total Common Stock
outstanding. (26)
--------
*less than 1%
(1) Except as indicated below, all shares shown in the table are owned with
sole voting and investment power. Includes options transferred to the
employee's immediate family or trust or partnership for the benefit thereof.
2
(2) This information is based on Amendment No. 21 to Schedule 13-G filed on
February 12, 2002. All such shares are owned by wholly-owned subsidiaries
of the Company as trustee or in other fiduciary capacities. The
subsidiaries are Marshall & Ilsley Trust Company N.A. (the "Trust Company")
and M&I Investment Management Corp. Of these shares, one or more of the
subsidiaries has sole voting power as to 1,307,112 shares, shared voting
power as to 6,176,500 shares, sole investment power as to 2,443,202 shares
and shared investment power as to 6,784,696 shares. The amount and
percentage of shares beneficially owned, and the amount of shares to which
the Trust Company has shared voting or investment power, include 5,768,723
shares held by the Trust Company as to which the Company and the Trust
Company disclaim beneficial ownership.
(3) This information is based on Amendment No. 13 to Schedule 13-G filed on
February 7, 2002. Of these shares, 3,844,228 may be acquired by conversion
of 336,370 shares of Preferred Stock, 32,500 are owned by investment
company affiliates of The Northwestern Mutual Life Insurance Company
("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 and shared voting and investment power as to 3,913,245
shares. In 1999, the Board of Governors 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 7,500 shares which could be acquired pursuant to the exercise of
stock options within 60 days of January 31, 2002.
(5) Includes 1,559,842 shares held in a partnership for the benefit of family
members. Mr. Andreas has sole voting power and shared investment power but
no pecuniary interest in these shares.
(6) Includes 35,451 shares held by Mr. Boldt's family as to which he disclaims
beneficial ownership, 30,400 shares which could be acquired pursuant to the
exercise of stock options within 60 days of January 31, 2002, and 3,318
shares credited under the Company's deferred compensation plan for
directors.
(7) Includes 243 shares held by Mr. Bolger's family as to which he disclaims
beneficial ownership, 83,333 shares which could be acquired pursuant to the
exercise of stock options within 60 days of January 31, 2002, and 3,000
shares of restricted stock as to which Mr. Bolger exercises sole voting
power.
(8) Includes 20,000 shares which could be acquired pursuant to the exercise of
stock options within 60 days of January 31, 2002 and 2,556 shares credited
under the Company's deferred compensation plan for directors.
(9) Includes 22,500 shares which could be acquired pursuant to the exercise of
stock options within 60 days of January 31, 2002 and 14,847 shares credited
under the Company's deferred compensation plan for directors.
(10) Includes 90,999 shares which could be acquired pursuant to the exercise of
stock options within 60 days of January 31, 2002.
(11) Shares of restricted stock as to which Mr. Furlong exercises sole voting
power.
(12) Includes 1,200 shares held by Mr. Jacobs' family as to which he disclaims
beneficial ownership, 7,500 shares which could be acquired pursuant to the
exercise of stock options within 60 days of January 31, 2002, and 4,988
shares credited under the Company's deferred compensation plan for
directors.
(13) Includes 20,540 shares held by trust for which Mr. Jacobs disclaims
beneficial ownership and 7,500 shares which could be acquired pursuant to
the exercise of stock options within 60 days of January 31, 2002.
(14) Includes 7,500 shares which could be acquired pursuant to the exercise of
stock options within 60 days of January 31, 2002 and 1,050 shares credited
under the Company's deferred compensation plan for directors.
(15) Includes 25,000 shares held by trust for which Mr. Kellner exercises
shared voting and investment power, 399,998 shares held in the Kellner
Family Limited Partnership as to which he disclaims beneficial ownership
in excess of his pecuniary interest, and 832 shares credited under the
Company's deferred compensation plan for directors.
3
(16) Includes 17,500 shares which could be acquired pursuant to the exercise of
stock options within 60 days of January 31, 2002.
(17) Includes 12,795 shares as to which Mr. Kuester exercises sole voting power
and 448,000 shares which could be acquired pursuant to the exercise of
stock options within 60 days of January 31, 2002.
(18) Includes 12,500 shares which could be acquired pursuant to the exercise of
stock options within 60 days of January 31, 2002.
(19) Includes 2,540 shares held by Mr. Meyer's family as to which he disclaims
beneficial ownership, 35,400 shares which could be acquired pursuant to
the exercise of stock options within 60 days of January 31, 2002, and
3,430 shares credited under the Company's deferred compensation plan for
directors.
(20) 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, 22,500 shares which could be acquired pursuant to the exercise
of stock options within 60 days of January 31, 2002, and 15,788 shares
credited under the Company's deferred compensation plan for directors.
(21) Includes 8,868 shares held by Mr. Platten's family as to which he
disclaims beneficial ownership, 126,552 shares as to which Mr. Platten
exercises sole voting power, and 12,500 shares of which could be acquired
pursuant to the exercise of stock options within 60 days of January 31,
2002.
(22) Includes 10,000 shares which could be acquired pursuant to the exercise of
stock options within 60 days of January 31, 2002 and 1,706 shares credited
under the Company's deferred compensation plan for directors.
(23) Includes 7,200 shares held by Mr. Urdan's family as to which he disclaims
beneficial ownership, 5,000 shares which could be acquired pursuant to the
exercise of stock options within 60 days of January 31, 2002, and 17,026
shares credited under the Company's deferred compensation plan for
directors.
(24) Includes 12,500 shares which could be acquired pursuant to the exercise of
stock options within 60 days of January 31, 2002 and 6,586 shares credited
under the Company's deferred compensation plan for directors.
(25) Includes 11,678 shares held by Mr. Wigdale's family as to which he
disclaims beneficial ownership and 613,500 shares which could be acquired
pursuant to the exercise of stock options within 60 days of January 31,
2002.
(26) Includes 21,000 shares of restricted stock as to which the holders
exercise sole voting power and 1,827,096 shares which could be acquired
pursuant to the exercise of stock options within 60 days of January 31,
2002.
In addition to the ownership of Company Common Stock described above, each
of Messrs. Bolger, Bueche, Kuester, Orr, Shiely, Urdan and Wigdale beneficially
owns a total of 28 shares of Series A Adjustable Rate Preferred Stock (the
"Preferred Stock") of the Company's subsidiaries formed as real estate
investment trusts (the "REIT Subsidiaries"). Mr. Kuester's wife also owns a
total of 28 shares of Preferred Stock of the REIT Subsidiaries. Mr. Kuester
disclaims beneficial ownership of these shares. Mr. Kellner exercises sole
voting and investment power with respect to a total of 28 shares of Preferred
Stock of the REIT Subsidiaries held by a family member's estate for which Mr.
Kellner serves as the executor. Each such person owns less than 1% of the
outstanding Preferred Stock of each subsidiary. All current directors and
executive officers as a group beneficially own a total of 308 shares of
Preferred Stock of the REIT Subsidiaries, representing less than 1% of the
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 six Class III Directors to serve until the Company's
2005 Annual Meeting of Shareholders and, with respect to each Director, until
his or her successor is elected and qualified. Each Class III Director's term
expires at the 2002 Annual Meeting. The following table sets forth certain
information with regard to each of the nominees for election as a Director as
well as each of the Company's continuing Class I and Class II Directors.
4
Mr. Oscar C. Boldt, who has been a Director for eight years, Mr. Burleigh E.
Jacobs, who has been a Director for 35 years, and Mr. James F. Kress, who has
been a Director for 16 years, will be retiring from the Board at the 2002
Annual Meeting. The Company expresses its thanks to Messrs. Boldt, Jacobs and
Kress for their many years of loyal service.
NOMINEES STANDING FOR ELECTION
Principal Occupation
Name and Directorships
---- -----------------
Class III Directors (terms expiring April 2005)
David L. Andreas President and Chief Executive Officer from 1998 to July 2001 and Chairman of the
Age 53 Board and Chief Executive Officer from 1987 to 1998 of National City Bancorporation,
a bank holding company. A Director since August 2001.
Timothy E. Hoeksema Chairman, President and Chief Executive Officer of Midwest Express Holdings, Inc., a
Age 55 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.
John A. Mellowes Chairman and Chief Executive Officer since 1980 of Charter Manufacturing Company,
Age 63 Inc., a producer of bar, rod, wire and wire parts for the auto industry and other
industries. A director of Twin Disc, Inc.
Robert J. O'Toole Chairman since 1992 and President and Chief Executive Officer since 1989 of A. O.
Age 61 Smith Corporation, a manufacturer of electric motors and water systems technologies. A
director of Briggs & Stratton Corporation.
Robert A. Schaefer Retired; Former Director, Executive Vice President and Chief Operating Officer of
Age 64 Security Capital Corporation, a bank holding company, and Former Director, President
and Chief Operating Officer of Security Bank S.S.B. A Director since December 1997.
John S. Shiely President and Chief Executive Officer since 2001, President and Chief Operating
Age 49 Officer from 1994 to 2001, Executive Vice President-Administration from 1991 to
1994, Briggs & Stratton Corporation, a manufacturer of gasoline engines for outdoor
power equipment. Also a director of Briggs & Stratton Corporation. A Director since
April 1999.
CONTINUING DIRECTORS
Principal Occupation
Name and Directorships
---- -----------------
Class I Directors (terms expiring April 2003)
Richard A. Abdoo Chairman of the Board, President and Chief Executive Officer, Wisconsin Energy
Age 58 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. Also a director of Cobalt Corporation
(formerly United Wisconsin Services, Inc.), AK Steel Corporation and Sensient
Technologies Corporation. A Director since July 1994.
Wendell F. Bueche Retired; Chairman, August 1994 to July 1998, Chief Executive Officer, February 1993
Age 71 to July 1997, President, February 1993 to August 1994, Director, February 1993 to April
1999, IMC Global, Inc., a producer of agricultural crop nutrients and animal feed
ingredients. A Director since 1983.
5
Principal Occupation
Name and Directorships
---- -----------------
Ted D. Kellner Chairman and Chief Executive Officer of Fiduciary Management, Inc., an investment
Age 55 management firm, since 1980. A Director since April 2000.
Katharine C. Lyall President of the University of Wisconsin System since 1992. Also a director of Alliant
Age 60 Energy Corporation. A Director since December 1997.
Peter M. Platten, III Retired; Vice Chairman of the Board of the Company from May 1994 to May 1997;
Age 62 Former President and Chief Executive Officer, January 1989 to May 1994, Valley
Bancorporation, a bank holding company. A Director since May 1994.
James A. Urdan Retired Partner, Quarles & Brady, L.L.P., a law firm. A Director since April 2001.
Age 70
James B. Wigdale Chairman of the Board of the Company from December 1992 to present, Chief
Age 65 Executive Officer of the Company from October 1992 to December 2001, Vice
Chairman of the Board of the Company from December 1988 to December 1992;
Chairman of the Board, January 1989 to October 2001, Chief Executive Officer,
September 1987 to October 2001, and Director since 1981 of M&I Marshall & Ilsley
Bank; Director, Metavante Corporation. A Director since 1988.
Class II Directors (terms expiring April 2004)
Jon F. Chait Chairman and Chief Executive Officer of Spring Group, plc, a provider of workforce
Age 51 management solutions, May 2000 to present; Chairman and Chief Executive Officer of
Magenta.com, a developer of web-enabled human resource solutions, July 1999 to May
2000; 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.
Bruce E. Jacobs President and Chief Executive Officer of Grede Foundries, Inc., a manufacturer of grey
Age 54 and ductile iron, steel and alloyed castings, since 1994. A Director since April 2001. Mr.
Jacobs is the son of Mr. Burleigh E. Jacobs.
Donald R. Johnson President and Chief Executive Officer since 1998 and President and Chief Operating
Age 60 Officer from 1996 to 1998 of Modine Manufacturing Company, a provider of heat-
transfer and heat storage technology. Also a director of Modine Manufacturing
Company. A Director since April 2001.
Dennis J. Kuester Chief Executive Officer since January 2002 and President since 1987 of the Company;
Age 60 Chairman and Chief Executive Officer since October 2001, President from 1989 to
October 2001 and Director since 1989, M&I Marshall & Ilsley Bank; Chairman of the
Board and Director, Metavante Corporation. Also a director of Modine Manufacturing
Company and Wausau-Mosinee Paper Corporation. A Director since February 1994.
Edward L. Meyer, Jr. Chairman of the Board, Anamax Corporation, a processor of hides and skins and
Age 64 manufacturer of various rendered products. A Director since May 1994.
San W. Orr, Jr. Chairman of the Board and Director, Wausau-Mosinee Paper Corporation; Attorney,
Age 60 Estate of A.P. Woodson & Family. A Director since July 1994.
George E. Wardeberg Vice Chairman, Wisconsin Energy Corporation, a holding company with subsidiaries in
Age 66 utility and nonutility businesses, since April 2000; Chairman and Chief Executive
Officer from 1997 to 2000, 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.
6
The Board of Directors of the Company has standing Compensation and Human
Resources, Audit, Retirement Investment, Nominating and Executive Committees.
The Board of Directors held six meetings in 2001. Each incumbent Director
attended at least 75% of the meetings of the Board and Board Committees on
which the Director served.
The Compensation and Human Resources 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 (LTIP) and the
Annual Executive Incentive Compensation Plan. The current members of the
Compensation and Human Resources Committee are Messrs. Burleigh E. Jacobs
(Chairman), Bueche, Johnson, Shiely and Wardeberg, none of whom are, or have
been, employees of the Company or any of its subsidiaries. The Compensation and
Human Resources Committee held four meetings in 2001.
The Audit Committee has responsibility for nominating the Company's
independent auditors for approval by the Board of Directors, reviewing the
scope, results and costs of the audit with the Company's independent auditors
and reviewing the financial statements of the Company and the audit function to
ensure full compliance with requirements of regulatory agencies and full
disclosure of necessary information to the shareholders of the Company. The
Board of Directors has adopted a written charter for the Audit Committee. The
current members of the Audit Committee, all of whom are non-employee directors,
are Messrs. Orr (Chairman), Hoeksema and Bruce E. Jacobs and Ms. Lyall. The
members of the Audit Committee are independent in accordance with the listing
standards of the New York Stock Exchange. The Audit Committee held three
meetings in 2001.
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 Program. The members
of the Retirement Investment Committee, none of whom are employees of the
Company, are Messrs. Kellner (Chairman), Abdoo and Chait. The Committee held
two meetings in 2001.
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. Platten (Chairman), Boldt, Chait, and Kellner. 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 2001.
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 current members of the Executive Committee
are Messrs. Wigdale (Chairman), Abdoo, Bueche, Bruce E. Jacobs, Burleigh E.
Jacobs, Kuester, Urdan and Wardeberg. The Executive Committee held two meetings
in 2001.
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,
2001, 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 3.8% of shareholders equity at December
31, 2001. In addition to loans, bank subsidiaries of the Company provide other
banking services in the ordinary course of business to directors and executive
officers and their related interests.
7
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.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Compensation and Human Resources Committee are
Messrs. Burleigh E. Jacobs, Bueche, Johnson, Shiely and Wardeberg, none of whom
is, or has been, an officer or employee of the Company. Mr. Kuester, President
and Chief Executive Officer of the Company, serves as a director and member of
the compensation committee of the board of directors of Modine Manufacturing
Company. Mr. Johnson, President and Chief Executive Officer of Modine
Manufacturing Company, serves as a member of the Human Resources and
Compensation Committee.
SUMMARY COMPENSATION TABLE
Long Term Compensation(1)
-------------------------------------
Awards Payouts
-------------------------- ----------
Restricted Securities LTIP
Stock Underlying Payouts All Other
Name and Principal Position Year Salary($) Bonus($) Awards($) Options/SARs(#) $(2) Compensation($)(3)(4)
--------------------------- ---- --------- ---------- ---------- --------------- ---------- ---------------------
James B. Wigdale............. 2001 $800,000 $1,000,000 0 122,500 $1,380,224 $142,126
Chairman of the Board(5) 2000 725,000 440,873 0 122,500 907,410 154,694
1999 700,000 750,540 0 122,500 1,838,895 121,542
Dennis J. Kuester............ 2001 680,000 837,925 0 122,500 1,196,194 179,240
Chief Executive Officer 2000 630,000 339,730 0 80,000 786,422 136,448
and President 1999 600,000 576,601 0 69,500 1,593,709 99,384
Thomas M. Bolger............. 2001 375,288 479,340 148,290 50,000 552,090 54,360
Executive Vice President 2000 300,000 136,950 0 39,000 241,976 46,087
and President, M&I 1999 260,000 212,342 0 29,000 245,186 39,200
Marshall and Ilsley Bank
Mark F. Furlong(6)........... 2001 284,615 369,080 503,000 100,000 0 264,025
Executive Vice President
and Chief Financial Officer
Joseph L. Delgadillo......... 2001 380,000 210,000 0 40,000 552,090 47,500
President and Chief 2000 380,000 150,000 0 29,000 362,964 60,780
Executive Officer, 1999 360,000 316,000 0 29,000 490,372 57,391
Metavante Corporation
--------
(1) As of December 31, 2001, the following executives had unreleased Key
Restricted Stock: Mr. Bolger--3,000 shares value at $186,840 and Mr.
Furlong--10,000 shares valued at $622,800. The values were arrived at using
a year end 2001 closing market price of $63.28 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 2001 the named executive officers received
payouts for awards made with respect to the three-year period from January
1999 through December 2001. The performance criteria for this three-year
cycle were based upon both the Company's total shareholder return in
relation to companies in the Keefe, Bruyette & Woods 50 Bank Index (the
"KBW 50 Index") and the Company's cumulative three-year earnings per share
relative to predetermined goals. During this period, both the Company's
total shareholder return and earnings per share performance exceeded the
target levels, which resulted in payouts above the total targeted level of
the plan.
8
(3) Includes the following amounts paid by M&I under the Retirement Program for
2001: Mr. Wigdale--$18,700; Mr. Kuester--$14,960; Mr. Bolger--$18,700; and
Mr. Delgadillo--$18,700. Includes the following amounts paid by M&I under a
Split Dollar Life Insurance Plan for the benefit of the executives for
2001: Mr. Wigdale--$13,842 and Mr. Kuester--$6,384. Includes the following
employer contributions under the Supplementary Retirement Benefits Plan and
the Executive Deferred Compensation Plan based on compensation paid or
deferred during 2001: Mr. Wigdale--$85,670; Mr. Kuester--$71,368; Mr.
Bolger--$27,379; Mr. Furlong--$27,869; and Mr. Delgadillo--$28,800.
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 2001: Mr. Wigdale--$23,914; Mr.
Kuester--$86,528; Mr. Bolger--$8,281; and Mr. Furlong--$211. Includes the
following relocation expenses: Mr. Furlong--$235,945.
(4) Does not include amounts accrued by M&I under the Non-Qualified Retirement
Benefit Plan. The estimated benefits payable to the named executive
officers under the Non-Qualified Retirement Benefit Plan are disclosed
under "Retirement Plans." In 1999 an accrual for this plan was disclosed in
this column of the following amounts: Mr. Wigdale--$393,173 and Mr.
Kuester--$180,334.
(5) Mr. Wigdale served as Chief Executive Officer through December 31, 2001.
Amounts shown were paid to Mr. Wigdale as compensation for his services as
Chairman of the Board and Chief Executive Officer.
(6) Mr. Furlong joined the Company in April 2001. Upon hire, Mr. Furlong
received an award of 60,000 options to purchase the Company's Common Stock
and an award of 10,000 shares of Key Restricted Stock, which awards are
reflected in the table.
The following table provides information on options granted to the named
executive officers during 2001.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants
% of Total
Options/
Number of SARs
Securities Granted to Exercise
Underlying Employees or Base Grant Date
Options/SARs in Fiscal Price Expiration Present
Name Granted(#)(1) Year ($/Sh)(2) Date Value($)(3)
---- ------------- ---------- --------- ---------- -----------
James B. Wigdale.... 122,500 6.4% $63.90 12/20/11 $2,520,928
Dennis J. Kuester... 122,500 6.4 63.90 12/20/11 2,520,928
Thomas M. Bolger.... 50,000 2.6 63.90 12/20/11 1,028,950
Mark F. Furlong(4).. 40,000 2.1 63.90 12/20/11 823,160
60,000 3.1 51.30 04/16/11 962,640
Joseph L. Delgadillo 40,000 2.1 63.90 12/20/11 823,160
--------
(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) With respect to the December 20, 2001 grant, 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 4.75%; an expected dividend yield of 1.82%; and a
volatility factor of
9
31.09%. With respect to the April 16, 2001 grant, the grant date present
values were determined using the Black-Scholes model with the following
assumptions: a six-year expected period of time to exercise; a risk-free
rate of return of 5.10%; an expected dividend yield of 2.26%; and a
volatility factor of 31.22%.
(4) Mr. Furlong joined the Company in April 2001. Upon hire, Mr. Furlong
received an award of 60,000 options to purchase the Company's Common Stock,
which award is reflected in the table.
The following table provides information on options exercised during 2001,
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
Number of Securities Value of Unexercised
Shares Underlying Unexercised In-the-Money Options/SARs
Acquired Options/SARs at FY-End(#)(1) at FY-End($)(2)
on Value ---------------------------- -------------------------
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ----------- ----------- ------------- ----------- -------------
James B. Wigdale.... 150,000 6,265,800 613,500 0 8,194,105 0
Dennis J. Kuester... 100,000 3,616,900 448,000 0 6,130,640 0
Thomas M. Bolger.... 4,000 148,308 83,333 85,667 1,499,880 583,082
Mark F. Furlong..... 0 -- 0 100,000 0 718,800
Joseph L. Delgadillo 9,000 285,363 90,999 69,001 1,663,918 359,032
--------
(1) Includes shares which were transferred to the employees' immediate family
or trusts or partnerships for the benefit thereof.
(2) For valuation purposes, a year end 2001 market price of $63.28 was used.
The following table provides information on long-term incentive plan awards
to the named executive officers.
LONG-TERM INCENTIVE PLAN--AWARDS IN LAST FISCAL YEAR
Awards Granted December 2001 for the Performance
Period Beginning January 2002
------------------------------------------------------------------
Number of Shares, Targeted Cash Performance or Other Period
Name Units or Other Rights(1) Payment(2) Until Maturation or Payout
---- ------------------------ ------------- ---------------------------
James B. Wigdale.... 7,500 0 3 Years
Dennis J. Kuester... 7,500 0 3 Years
Thomas M. Bolger.... 4,000 0 3 Years
Mark F. Furlong(3).. 3,000 0 3 Years
Joseph L. Delgadillo 0 $250,000 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, 2002 and
ending on December 31, 2004 for awards granted in December 2001. 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
10
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 Compensation and
Human Resources Committee must certify the extent to which the performance
criteria have been met.
(2) Cash-based awards are made under Metavante Corporation's LTIP. The
performance period is the three years commencing on January 1, 2002 and
ending on December 31, 2004 for awards granted in December 2001. The
performance criterion is based on attaining cumulative three-year net
income targets. A payout multiple is applied to the cash award made to a
participant based on Metavante Corporation's cumulative net income for the
three-year period. The minimum payout multiple is zero and the maximum is
200%. In the event of a change of control of Metavante Corporation or M&I,
each participant will be entitled to a payment equal to 125% of established
target notwithstanding continued employment by the acquiring company. In
the event of a participant's death, disability or retirement in accordance
with the plan's specifications, the participant or his estate will continue
as a plan participant for the remainder of the outstanding award period.
(3) Mr. Furlong joined the Company in April 2001. In addition to the 3,000
Units reflected in the table, upon hire Mr. Furlong received an award for
3,000 Units under the Company's LTIP for the performance period beginning
in 2001.
RETIREMENT PLANS
The Marshall & Ilsley Corporation Nonqualified Retirement Benefit Plan (the
"Nonqualified Plan") provides two current executive officers of M&I with a
supplemental retirement benefit. The purpose of the Nonqualified Plan is to
provide an annual retirement benefit such that the sum of the benefits from the
Retirement Growth Plan, the Corporation's Amended and Restated Supplementary
Retirement Benefits Plan (the "SERP"), the SERP Account of the Corporation's
Amended and Restated Deferred Compensation Plan, Social Security and this plan
equals 60% of the participant's average salary and annual short-term incentive
for his last five years of employment. The total benefit under this plan is
adjusted in the event of death or early retirement before age 62, and can be
paid for life with a 120-month certain pay-out or on a joint and survivor basis
at the option of the participant. The pay-out option elected may also affect
the amount of the annual benefit. For Mr. Wigdale, the monthly retirement
benefit under this plan is $41,313. For Mr. Kuester, the estimated monthly
retirement benefit beginning at age 65 is $31,482 (assuming he retires on or
after attaining age 62), determined based on the five year average compensation
earned through December 31, 2001 and various actuarial and interest rate
assumptions. In the event of a Change in Control (as defined in the
Nonqualified Plan), each participant who is actively employed will be deemed to
retire on the Change of Control date but will have no reduction in benefits
under the Plan for retiring prior to age 62. 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 of Control
regardless of his age at that point. Under the terms of the plan, Mr. Wigdale
is eligible to begin receiving benefits in January of 2002. However, in
connection with his continued full-time active employment, Mr. Wigdale has
elected to forego the payments otherwise due to him for 2002.
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 N.A. is the trustee (the "Trust").
11
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.
In lieu of certain benefits under the Deferred Compensation Plan and/or the
SERP, Messrs. Wigdale, Kuester and Delgadillo and two other senior executives
will receive life insurance benefits. Under this arrangement, M&I will pay
premiums on the life insurance policies purchased for the benefit of the
participants and will retain a collateral interest in those policies equal to
the amount of the premiums paid by M&I under a split-dollar arrangement. The
present value cost of any life insurance purchased under these split-dollar
life insurance arrangements will have an economic cost to the Company, after
the return of premiums, equal to the present value of the reduction in
projected benefits payable under the plans.
CHANGE OF CONTROL AGREEMENTS AND RELATED MATTERS
In order to assure management continuity and stability, as of February 1,
2002, M&I had substantially similar Change of Control Agreements (the "Change
of Control Agreements") outstanding with all of the named executive officers,
nine additional executive officers and 16 other officers and employees of the
Company and its subsidiaries (collectively, the "Executives"). The Change of
Control Agreements with the named executive officers each have a term of three
years. The Change of Control Agreements with the other Executives each have a
term of two years.
The Change of Control 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 Change of Control 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 Change of
Control Agreements). In addition, in the case of some Change of Control
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.
12
The Change of Control Agreements provide that upon a change of control most
restrictions limiting the exercise, transferability or other incidents of
ownership of any outstanding award, restricted stock, options, stock
appreciation rights, or other property rights of M&I granted to the Executive
shall lapse, and such awards shall become fully vested, except in certain
circumstances. The Change of Control Agreements also provide for "gross-up"
payments in the event payments to an Executive under the Change of Control
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. Boldt, Bueche, Chait, Bruce E.
Jacobs, Johnson, Kellner, Meyer, Schaefer, Urdan, Wardeberg and Gus A. Zuehlke
(Mr. Zuehlke retired from the Board in February 2001) elected to defer
compensation under the plan during 2001. 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.
In connection with the merger with National City Bancorporation on August 1,
2001, M&I entered into a consulting and noncompetition agreement with Mr.
Andreas. M&I agreed to pay Mr. Andreas a monthly consulting fee of $25,000 and
provide health and dental benefits to Mr. Andreas and his family for a term of
one year beginning on January 1, 2002. Mr. Andreas agreed to provide consulting
services to the Company and abide by certain confidentiality, nonsolicitation
and noncompetition provisions for the term of the agreement.
13
COMPENSATION AND HUMAN RESOURCES COMMITTEE REPORT
General Policy
The Compensation and Human Resources 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 Company's compensation program is
designed to offer a competitive total compensation value that will attract and
retain high quality talent and ensure alignment of a significant portion of the
executive's total compensation to the annual and long-term performance of the
Company as well as the creation of stockholder value. 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 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.
2001 Compensation
Overview
With regard to 2001 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, the market relationship of
compensation paid to the Company's executive officers and other information
which the Committee deemed relevant in the case of any particular individual.
The Committee also compared the Company's compensation levels and financial
performance to the companies in the KBW 50 Index, which is the same peer group
used in the performance graph, and a more defined group of similarly sized bank
holding companies. In addition, the Committee consulted with Hewitt Associates
LLC, the Committee's compensation consultants, in connection with various
compensation decisions. In making compensation decisions, the Committee did not
set the compensation for the Company's executive officers at a specific level
as compared to the executives in the peer groups. 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.
14
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. The performance criterion for 2001 was based upon earnings
per share adjusted for certain non-recurring items of income or loss. Reported
operating earnings per share for 2001 reflect an increase of 12% over year
2000. Results under the plan exceeded the target performance levels established
by the Committee for 2001, and resulted in eligible senior executives receiving
payouts ranging from 42% to 125% of their respective 2001 base salaries as
compared to payouts ranging from 18% to 61% of base salaries in 2000. In future
years, the Committee may use performance criteria different than earnings per
share.
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 opportunities of each senior executive officer. The Committee
deemed it appropriate to increase the 2001 base salaries for certain senior
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.
The Committee made long-term incentive awards in 2001 under the Company's
Executive Stock Option and long-term incentive plans. 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 2001 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.
In determining the total number of options to be granted in 2001 to all
employee 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. Based upon this review, the
Committee determined an increase in the Company's overall option awards was
appropriate. In 2001, grants to employees totaled 1,920,550 options, or
approximately 1.8% of shares outstanding as of January 31, 2002. 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 1999 through December 2001. The performance criteria for this
three-year cycle were based upon both the Company's total shareholder return in
relation to companies in the KBW 50 Index and the Company's cumulative
three-year earnings per share relative to predetermined goals. During this
period, the Company's total shareholder return and the earnings per share
performance exceeded the target levels under the plan.
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
approximately 125% of his base salary, resulting from the Company's 2001
adjusted 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.
15
The Compensation Committee:
Mr. Burleigh E. Jacobs, Chairman Mr. Bueche Mr. Johnson Mr. Shiely Mr. Wardeberg
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.
[CHART]
M&I S&P 500 KBW 50
12/31/1996 100 100 100
12/31/1997 183 133 146
12/31/1998 174 171 158
12/31/1999 191 208 153
12/31/2000 157 189 183
12/31/2001 200 166 176
12/31/96 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01
-------- -------- -------- -------- -------- --------
M&I....................... $100 $183 $174 $191 $157 $200
S&P 500................... 100 133 171 208 189 166
KBW 50.................... 100 146 158 153 183 176
KBW = KEEFE, BRUYETTE & WOOD, INC. 50-BANK INDEX; S&P = STANDARD & POOR'S 500.
16
AUDIT COMMITTEE REPORT
The Audit Committee of Marshall & Ilsley Corporation has:
(1) Reviewed and discussed the audited financial statements with
management;
(2) Discussed with Arthur Andersen LLP the matters required to be
discussed by Statement on Auditing Standards No. 61, Communication with
Audit Committees;
(3) Received the written disclosures and the letter from Arthur Andersen
LLP required by Independent Standards Board Standard No. 1, Independence
Discussions with Audit Committees; and
(4) Discussed with Arthur Andersen LLP the auditors' independence.
Based on these reviews and discussions, the Audit Committee recommended to
the Board of Directors that the audited financial statements be included in the
Annual Report on Form 10-K for fiscal year ended December 31, 2001.
Audit Fees. The aggregate fees billed for professional services rendered by
the independent auditors for (1) the audit of the Company's financial
statements as of and for the year ended December 31, 2001 and (2) the review of
the financial statements included in the Company's Quarterly Reports on Form
10-Q for the year were approximately $740,900.
Financial Information Systems Design and Implementation Fees. The aggregate
fees billed for professional services rendered by the independent auditors
during 2001 for (1) operating, or supervising the operation of, the Company's
information systems or managing its local area networks and (2) designing or
implementing a hardware or software system that aggregates source data
underlying the Company's financial statements or generates information that is
significant to its financial statements taken as a whole were zero.
All Other Fees. The aggregate fees billed for non-audit and non-information
systems related services rendered by the independent auditors during 2001 were
approximately $2,357,300. These fees were comprised of five basic categories:
$866,000 for tax return preparation for federal and state purposes and tax
consulting concerning entities included in the audited financial statements;
$535,300 for consultation and assistance provided for various entities included
in the consolidated financial statements resulting primarily from eight
acquisitions announced in 2001 and the registration and issuance of securities;
$520,000 for SAS 70 reviews performed for customers; $415,000 for business
consulting at a wholly-owned subsidiary of the Company; and $21,000 for
internal audit assistance.
The Audit Committee has considered whether the provision of financial
information systems design and implementation services and other non-audit
services is compatible with the independent auditors' independence and
satisfied itself as to the auditors' independence.
The Audit Committee:
Mr. Orr, Chairman Mr. Hoeksema Mr. Bruce E. Jacobs Ms. Lyall
17
ANNUAL EXECUTIVE INCENTIVE COMPENSATION PLAN
The complete text of the Annual Executive Incentive Compensation Plan is set
forth in Appendix A. The following summary of the material features of the plan
does not purport to be complete and is qualified in its entirety by reference
to Appendix A.
The Board of Directors recommends a vote FOR approval of the Annual
Executive Incentive Compensation Plan.
The Compensation and Human Resources Committee and the Board of Directors
have approved the Annual Executive Incentive Compensation Plan for 2002 and
subsequent years unless and until terminated by the committee. The plan will
replace the Company's prior incentive plan which was in effect for calendar
years 1997 through and including 2001. The purpose of the plan is to determine
the annual incentives (bonuses) of the Company's Chairman, Chief Executive
Officer and other officers who may be designated as eligible to participate in
the plan. The plan rewards eligible participants with an incentive award if the
performance goals set by the committee pursuant to the terms of the plan are
met. The plan, as adopted, is subject to approval by the Company's shareholders
and will only take effect if such approval is obtained. The plan is intended to
meet the requirements of Section 162(m) of the Internal Revenue Code, and the
regulations thereunder, so that compensation received will be performance-based
compensation excludable from the $1 million limitation on deductible
compensation.
The plan establishes a correlation between the annual incentives awarded to
the participants and the Company's financial performance. Each year, the
committee will fix, during the first ninety days of a performance year, the
performance criteria and goals to be achieved before any award will be payable.
The performance criteria among which the committee may select are earnings per
share, earnings, return on average equity or return on average assets, to be
used singularly or in combination, as the committee determines, to measure the
performance of the Company. The performance criteria and the percentage of base
salary awarded for achieving the goals set by the committee may vary from year
to year.
If and to the extent the performance criteria set by the committee are
achieved, all or a portion of the award will be paid, based on a percentage of
each participant's base salary earned for the performance period. For example,
if the targeted performance level is achieved for 2002, the Chief Executive
Officer will receive an award of 95% of base salary. If the performance
achieved for 2002 is less than threshold, the Chief Executive Officer will not
receive an award. If the maximum performance level is achieved, the Chief
Executive Officer will receive an award equal to 162% of base salary. The
percentage opportunities will be less for other participants in the plan. If
the performance falls between the performance goals established by the
committee, the plan provides that the award will be determined by
interpolation. In succeeding performance years, the awards may be larger or
smaller depending upon a variety of factors, such as the extent to which
performance targets are attained, the base salary for that performance year,
and the individual award percentages, but in no event will a participant
receive an award in any year that exceeds $2,000,000. The committee retains
full discretion to reduce or eliminate any award which may be earned by a
participant under the plan. The committee may amend or terminate the plan at
any time, provided that to the extent required to meet the requirements of
Section 162(m) of the Internal Revenue Code for performance-based compensation,
any amendment that makes a material change to the plan must be approved by the
shareholders of the Company. Any amounts to be received by participants under
the plan are not yet determinable.
SUBMISSION OF SHAREHOLDER PROPOSALS
The 2003 Annual Meeting of Shareholders is scheduled for April 22, 2003. 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 2003 Annual Meeting of Shareholders and any other shareholder proposed
business to be brought before the 2003 Annual Meeting of Shareholders must be
submitted to the Company no later than January 23, 2003. 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
18
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 2003 Annual Meeting of Shareholders of the Company must be
received by the Company at its principal executive offices, 770 North Water
Street, Milwaukee, Wisconsin 53202 on or before November 11, 2002. Proposals
should be directed to Mr. Mark F. Furlong, Executive Vice President, Chief
Financial Officer 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, 2002.
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.
PENDING LEGAL PROCEEDINGS
No director or 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 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 2001
all filing requirements were complied with, with the exception of filings for
two persons. Mr. Timothy E. Hoeksema failed to timely report one transaction on
Form 4 and Mr. Leigh I. Sherman failed to timely report one transaction on Form
4.
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 11:00 p.m. Central Time, on April 22, 2002. 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.
By Order of the Board of Directors,
Mark F. Furlong, Executive Vice
President, Chief Financial Officer
and Secretary
19
Appendix A
MARSHALL & ILSLEY CORPORATION
ANNUAL EXECUTIVE INCENTIVE COMPENSATION PLAN
1. Purpose. The Board of Directors of Marshall & Ilsley Corporation adopted
this Annual Executive Incentive Compensation Plan (the "Plan") on February 21,
2002. The Plan is intended to establish a correlation between the annual
incentives awarded to the participants and the Company's financial performance.
The participants will receive an incentive award if the performance goals, as
fixed by the Compensation and Human Resources Committee of the Board of
Directors of Marshall & Ilsley Corporation (the "Committee") pursuant to the
terms of the Plan, are met. Subject to approval by the shareholders of Marshall
& Ilsley Corporation, the Plan will be applicable to 2002 and subsequent years
unless and until terminated by the Committee. If shareholder approval is not
obtained, the Plan will not take effect. The Plan is intended to meet the
requirements of Section 162(m) of the Internal Revenue Code, and the
regulations thereunder, so that compensation received pursuant to the Plan will
be performance-based compensation excludable from the $1 million limitation on
deductible compensation.
2. Definitions. As used in the Plan, the following terms have the meanings
indicated:
(a) "Award Table" means a table similar in type to Exhibit A, with
changes necessary to adapt to the performance criteria selected by the
Committee for the Performance Year and to display other objective factors
necessary to determine the amount, if any, of the incentive award for the
Performance Year.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
(d) "Committee" means the Compensation and Human Resources Committee of
the Board.
(e) "Company" means Marshall & Ilsley Corporation and its subsidiaries
including subsidiaries of subsidiaries and partnerships and other ventures
in which Marshall & Ilsley Corporation has a significant equity interest, as
determined in the sole discretion of the Committee.
(f) "Disability" means a condition that entitles the Participant to
disability payments under the terms of the Company's long-term disability
plan.
(g) "Earnings" means the after-tax consolidated net income of the Company
computed in accor-dance with generally accepted accounting principles and
adjusted to eliminate the following if the impact on net income is material:
(i) gain or loss attributable to the disposition of investment in
subsidiaries, and (ii) extraordinary and nonrecurring items of income or
loss.
(h) "Earnings per Share" means the portion of the Company's Earnings
allocable to each outstanding share of common stock during the accounting
period, based on the average number of shares outstanding, computed on a
diluted basis in accordance with generally accepted accounting principles.
(i) "Participant" means any employee of the Company designated to
participate in the Plan.
(j) "Performance Goal" means one or more of Earnings Per Share, Earnings,
Return on Average Equity, or Return on Average Assets, which may be used
singularly or in combination, as the Committee determines, to measure the
performance of the Company for the purpose of determining whether, and to
what extent, an award will be payable under the Plan for the Performance
Year.
(k) "Performance Year" means the Company's fiscal year. The initial
Performance Year is 2002.
(l) "Plan" means the Marshall & Ilsley Corporation Annual Executive
Incentive Compensation Plan.
A-1
(m) "Retirement" or "Retires" means the termination of employment of a
Participant on or after attaining age 65, or due to early retirement with
the consent of the Committee.
(n) "Return on Average Assets" or "ROAA" means Earnings for the
accounting period divided by total average assets.
(o) "Return on Average Equity or "ROAE" means Earnings for the accounting
period divided by total average equity.
(p) "Salary" means base salary earned for each Performance Year
determined in accordance with principles employed for reporting salary to
the shareholders of Marshall & Ilsley Corporation in the annual Proxy
Statement.
3. Participation. Participation in the Plan shall be limited to the
Chairman, Chief Executive Officer and any other Participants designated by the
Committee or senior management. A person who becomes a Participant after the
commencement of a Performance Year shall be eligible to receive a pro rata
award pursuant to Section 4, based on the number of full months remaining in
the Performance Year after he or she becomes a Participant.
4. Determination of Awards.
(a) Before April 1, 2002, and thereafter, during the first ninety days of
each succeeding Performance Year, the Committee will complete and adopt an
Award Table substantially in the form attached as Exhibit A. The Award Table
will fix the objective components for determining whether an award will be
paid and, if so, the amount of the award. Awards are based on a percentage
of each Participant's Salary for the Performance Year, if and to the extent
the Performance Goal is achieved. If the performance falls between the
Performance Goals set forth in the Award Table, the amount of the award will
be determined by interpolation. The Performance Goals and targets for a
Performance Year may not be modified after the first ninety days of a
calendar year have elapsed.
(b) Before any award may be paid for a Performance Year, the Committee
shall certify that the Performance Goals and other requirements of the Plan
have been satisfied for the Performance Year. No payments shall be made
unless and until the Committee makes this certification.
(c) Even though the Performance Goals have been met, (i) no award to a
Participant with respect to a Performance Year shall exceed $2,000,000, and
(ii) the Committee expressly reserves the right to reduce or eliminate
entirely any award if it determines it is in the best interests of the
Company to do so. Such determination shall be conclusive and binding.
5. Payment of Awards.
(a) If the Committee has made the certification required pursuant to
Section 4(b), subject to Section 4(c), awards shall be payable not later
than 60 days following the last day of the Performance Year for which they
are computed. Notwithstanding the foregoing, a Participant may defer receipt
of an award by filing a timely election pursuant to the Company's 1997
Executive Deferred Compensation Plan. All awards under the Plan are subject
to federal, state and local income and payroll tax withholding when paid.
(b) A Participant shall receive no award for a year if the Participant's
employment with the Company terminates prior to the last day of the
Performance Year for any reason other than death, Disability, Retirement, or
a Change in Control as defined in the Company's 2000 Executive Stock Option
and Restricted Stock Plan, as amended from time to time. A Participant who
terminates employment for one of the reasons described in the preceding
sentence shall be eligible to receive a pro rata award, if an award is
otherwise payable pursuant to Section 4, based on the number of full months
elapsed in the Performance Year ending with the date the event occurred. A
Participant shall not forfeit an award if the participant's employment
terminates after the end of the applicable Performance Year, but prior to
the distribution of the award for such year. Notwithstanding the foregoing,
in the event of a Change in Control, any payments owing to a Participant
under the Plan for the year of his termination of employment shall be
reduced, but not below zero, by any amount payable to the Participant as a
bonus for the year of termination of employment pursuant to the
Participant's Change in Control Agreement with the Company.
A-2
(c) If a Participant dies and is subsequently entitled to receive an
award under the Plan, the award shall be paid to the Participant's estate.
6. Administration. The Plan shall be administered by the Committee. The
Committee may adopt rules and regulations for carrying out the Plan, and the
Committee may take such actions as it deems appropriate to ensure that the Plan
is administered in the best interests of the Company. The Committee has the
authority to construe and interpret the Plan, resolve any ambiguities, and make
determinations with respect to the eligibility for or amount of any award. The
interpretation, construction and administration of the Plan by the Committee
shall be final and conclusive. The Committee may consult with counsel, who may
be counsel to the Company, and shall not incur any liability for any action
taken in good faith in reliance upon the advice of counsel.
7. Rights. Participation in the Plan and the right to receive awards under
the Plan shall not give a Participant any proprietary interest in the Company
or any of its assets. A Participant shall for all purposes be a general
creditor of the Company. The interests of a Participant cannot be assigned,
anticipated, sold, encumbered or pledged and shall not be subject to the claims
of his creditors. Nothing in the Plan shall confer upon any Participant the
right to continue in the employ of the Company, or shall interfere with or
restrict in any way the right of the Company to discharge a Participant at any
time for any reason whatsoever, with or without cause.
8. Successors. The Plan shall be binding on the Participants and their
personal representatives. If the Company becomes a party to any merger,
consolidation, reorganization or other corporate transaction, the Plan shall
remain in full force and effect as an obligation of the Company or its
successor in interest.
9. Amendment and Termination. The Committee may amend or terminate the Plan
at any time as it deems appropriate; provided that to the extent required to
meet the requirements of Code Section 162(m) for performance-based
compensation, any amendment that makes a material change to the Plan must be
approved by the shareholders of Marshall & Ilsley Corporation.
10. Interpretation. If any provision of the Plan would cause the Plan to
fail to meet the Code Section 162(m) requirements for performance-based
compensation, then that provision of the Plan shall be deemed modified to the
extent necessary to meet the requirements of Code Section 162(m).
A-3
Exhibit A
AWARD TABLE
PERFORMANCE YEAR 20__
A-----------(-)-----------B------------(+)------------C
Threshold Target Maximum
Performance Level Performance Level Performance Level
Specified: Specified: Specified:
Title % of Salary % of Salary % of Salary
----------------------------------------------------------------------------------------------------------------
--% --% --%
----------------------------------------------------------------------------------------------------------------
--% --% --%
----------------------------------------------------------------------------------------------------------------
--% --% --%
During the first 90 days of each Performance Year, the Committee shall set the
Performance Goals using the following process.
Award Derivations
1. Specify performance criteria to be used as the Performance Goals for the
Performance Year (i.e., one or more of Earnings per Share, Earnings, Return
on Average Equity or Return on Average Assets, which may be used singularly
or in combination, as the Committee determines, to measure the performance
of the Company for the purpose of determining whether an award will be
payable under the Plan for the Performance Year).
2. Fix the target Performance Goal and percentage of salary. (B)
3. Fix the threshold Performance Goal below which no award is payable and
percentage of salary. (A)
4. Fix maximum Performance Goal which results in maximum permitted award and
percentage of salary. (C)
5. If the result achieved for the Performance Year is less or greater than the
goal specified in B, but greater than the goal specified in A, the
percentage award payable will be determined by interpolating, as provided in
the Plan, between A and B and B and C, as the case may be with C being the
maximum.
A-4
PROXY BY MAIL
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE
VOTED "FOR" THE PROPOSALS. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS.
Please mark your votes like this [X]
WITHHOLD
FOR AUTHORITY
1. ELECTION OF CLASS III DIRECTORS: [_] [_]
(To withhold authority to vote for any individual nominee, strike a line through
that nominee's name in the list below)
Class III (with terms expiring April 2005): David L. Andreas, Timothy E.
Hoeksema, John A. Mellowes, Robert J. O'Toole, Robert A. Schaefer, and John S.
Shiely.
2. PROPOSAL TO APPROVE THE ANNUAL EXECUTIVE INCENTIVE COMPENSATION PLAN.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
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IF YOU WISH TO VOTE ELECTRONICALLY, PLEASE READ THE INSTRUCTIONS BELOW.
--------------------------------------------------------------------------------
-------------------------------------------- =============================
COMPANY NUMBER:
PROXY NUMBER:
ACCOUNT NUMBER:
-------------------------------------------- =============================
Signature Signature Date
-------------------- ------------------- ---------------
NOTE: Please sign exactly as name appears hereon. When shares are held by joint
owners, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give 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.
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/\FOLD AND DETACH HERE AND READ THE REVERSE SIDE /\
Marshall & Ilsley Corporation
Voting by telephone or Internet is quick, easy and immediate. As a
Marshall & Ilsley Corporation shareholder, you now have the option of
voting your shares electronically through the Internet or on the
telephone, eliminating the need to return the proxy card. Your
electronic vote authorizes the named proxies to vote your shares in
the same manner as if you marked, signed, dated and returned the proxy
card.
To Vote Your Proxy by Internet
------------------------------
www.continentalstock.com
Have your proxy card available when you access the above website. You
will be prompted to enter the company number, proxy number and
account number to create an electronic ballot. Follow the prompts to
vote your shares.
To Vote Your Proxy by Phone
---------------------------
1 (800) 293-8533
Use any touch-tone telephone to vote your proxy. Have your proxy card
available when you call. You will be prompted to enter the company
number and proxy number. Follow the voting instructions to vote your
shares.
PLEASE DO NOT RETURN THE ABOVE CARD IF YOU ARE VOTING ELECTRONICALLY.
To Vote Your Proxy by Mail
--------------------------
Mark, sign and date your proxy card above, detach it and return it in
the postage-paid envelope provided.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
MARSHALL & ILSLEY CORPORATION
The undersigned appoints James B. Wigdale and Dennis 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 28, 2002 at the 2002 Annual Meeting of
Shareholders of Marshall & Ilsley Corporation to be held on April 23, 2002 or at
any adjournment thereof.
(Continued, and to be marked, dated and signed, on the other side)
--------------------------------------------------------------------------------
/\ FOLD AND DETACH HERE /\
Marshall & Ilsley Corporation
2002 Annual Meeting of Shareholders
Tuesday, April 23, 2002
10:00 a.m. CST
Milwaukee Athletic Club
758 N. Broadway
Milwaukee, Wisconsin 53202
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