-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IvwRz68J2kDuBnUVYpQcq/PpskUDLTUI5Iq7oR2ZgkzXw9Yo6Llb4HBPCUEPFCb8 DSsz+aSib3O33AfnDZeGeg== 0000950131-97-001637.txt : 19970310 0000950131-97-001637.hdr.sgml : 19970310 ACCESSION NUMBER: 0000950131-97-001637 CONFORMED SUBMISSION TYPE: S-4/A PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 19970307 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARSHALL & ILSLEY CORP/WI/ CENTRAL INDEX KEY: 0000062741 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 390968604 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-19809 FILM NUMBER: 97552707 BUSINESS ADDRESS: STREET 1: 770 N WATER ST CITY: MILWAUKEE STATE: WI ZIP: 53202 BUSINESS PHONE: 4147657801 MAIL ADDRESS: STREET 1: 770 NORTH WATER ST CITY: MILWAUKEE STATE: WI ZIP: 53202 S-4/A 1 AMENDMENT #1 TO FORM S-4 REGISTRATION STATEMENT AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 7, 1997 333-19809 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------- AMENDMENT NO. 1 TO FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------- MARSHALL & ILSLEY CORPORATION M&I CAPITAL TRUST A (EXACT NAME OF REGISTRANT AS (EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER) SPECIFIED IN DECLARATION OF TRUST)
WISCONSIN 6021 39-0968604 DELAWARE 6199 39-6643782 (STATE OF (PRIMARY STANDARD (I.R.S. EMPLOYER (STATE OF (PRIMARY STANDARD (I.R.S. EMPLOYER INCORPORATION) INDUSTRIAL CLASSIFICATION IDENTIFICATION NO.) ORGANIZATION) INDUSTRIAL CLASSIFICATION IDENTIFICATION NO.) CODE NO.) CODE NO.)
770 NORTH WATER STREET MILWAUKEE, WISCONSIN 53202 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF EACH REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) --------------- M.A. HATFIELD, SECRETARY MARSHALL & ILSLEY CORPORATION, 770 NORTH WATER STREET, MILWAUKEE, WISCONSIN 53202 (414) 765-7801 (NAME, ADDRESS INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE OF EACH REGISTRANT) COPIES TO: LARRY D. LIEBERMAN GODFREY & KAHN, S.C. 780 NORTH WATER STREET MILWAUKEE, WISCONSIN 53202 (414) 273-3500 --------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after the effective date of this Registration Statement. If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, please check the following box. [_]. --------------- THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- PROSPECTUS M&I CAPITAL TRUST A LOGO OFFER TO EXCHANGE ITS 7.65% CAPITAL SECURITIES WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 FOR ANY AND ALL OF ITS OUTSTANDING 7.65% CAPITAL SECURITIES. (LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY) FULLY AND UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY MARSHALL & ILSLEY CORPORATION THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME ON APRIL 10, 1997, UNLESS EXTENDED. M&I Capital Trust A, a trust formed under the laws of the State of Delaware (the "Trust"), hereby offers, upon the terms and subject to the conditions set forth in this Prospectus (as the same may be amended or supplemented from time to time, the "Prospectus") and in the accompanying Letter of Transmittal (which together constitute the "Exchange Offer"), to exchange up to $200,000,000 aggregate Liquidation Amount of its 7.65% Capital Securities (the "New Capital Securities") which have been registered under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to (Continued on next page.) --------------- SEE "RISK FACTORS" COMMENCING ON PAGE 16 FOR CERTAIN INFORMATION THAT SHOULD BE CONSIDERED BY HOLDERS WHO TENDER OLD CAPITAL SECURITIES IN THE EXCHANGE OFFER. --------------- THESE SECURITIES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY. --------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. --------------- The New Capital Securities (as herein defined) and the Old Capital Securities (as herein defined) (together, the "Capital Securities"), represent beneficial interests in the Trust. M&I is the owner of all of the beneficial interests represented by common securities of the Trust (as herein defined) (the "Common Securities" and, collectively with the Capital Securities, the "Trust Securities"). The Chase Manhattan Bank is the Institutional Trustee of the Trust. The Trust exists for the sole purpose of issuing the Trust Securities and investing the proceeds thereof in the Old Subordinated Debt Securities and New Subordinated Debt Securities (together, the "Subordinated Debt Securities"). The Subordinated Debt Securities will mature on December 1, 2026. The date of this Prospectus is March 7, 1997. (continued from cover page) a Registration Statement (as defined herein) of which this Prospectus constitutes a part, for a like Liquidation Amount of its outstanding 7.65% Capital Securities (the "Old Capital Securities"), of which $200,000,000 aggregate Liquidation Amount is outstanding. Pursuant to the Exchange Offer, Marshall & Ilsley Corporation, a Wisconsin corporation ("M&I" or the "Company"), is also exchanging its guarantee of the payment of Distributions (as defined below) and payments on liquidation or redemption of the Old Capital Securities (the "Old Guarantee") for a like guarantee of the New Capital Securities (the "New Guarantee") and all of its 7.65% Junior Subordinated Deferrable Interest Debentures due 2026 (the "Old Subordinated Debt Securities"), of which $206,186,000 aggregate principal amount is outstanding, for a like aggregate principal amount of its 7.65% Junior Subordinated Deferrable Interest Debentures due 2026 (the "New Subordinated Debt Securities"), which New Guarantee and New Subordinated Debt Securities also have been registered under the Securities Act. The Old Capital Securities, the Old Guarantee and the Old Subordinated Debt Securities are collectively referred to herein as the "Old Securities" and the New Capital Securities, the New Guarantee and the New Subordinated Debt Securities are collectively referred to herein as the "New Securities." The terms of the New Securities are identical in all material respects to the respective terms of the Old Securities, except that (i) the New Securities will have been registered under the Securities Act and therefore will not be subject to certain restrictions on transfer applicable to the Old Securities and (ii) holders of New Capital Securities will not be entitled to certain rights of holders of Old Capital Securities under the Registration Rights Agreement (as defined below) which will terminate upon consummation of the offer made hereby. The New Capital Securities are being offered for exchange in order to satisfy certain obligations of M&I and the Trust under the Registration Rights Agreement dated as of December 2, 1996 (the "Registration Rights Agreement") among M&I, the Trust and Salomon Brothers Inc, Goldman, Sachs & Co. and Robert W. Baird & Co. Incorporated (the "Initial Purchasers"). In the event that the Exchange Offer is consummated, any Old Capital Securities which remain outstanding after consummation of the Exchange Offer and the New Capital Securities issued in the Exchange Offer will vote together as a single class for purposes of determining whether holders of the requisite percentage in outstanding Liquidation Amount thereof have taken certain actions or exercised certain rights under the Declaration (as defined below). The New Subordinated Debt Securities and the New Guarantee when issued will be an unsecured obligation of the Company and will be subordinate and junior in right of payment to other indebtedness of the Company, as described herein. Upon an event of default under the Declaration (as defined herein) in respect of the Trust, the holders of Capital Securities issued by the Trust will have a preference over the holders of the Common Securities of the Trust with respect to payments in respect of distributions and payments upon redemption, liquidation and otherwise. Holders of the Capital Securities are entitled to receive cumulative cash distributions at an annual rate of 7.65% per annum of the liquidation amount of $1,000 per Capital Security, accruing from December 9, 1996 and (subject to the extensions of distribution payment periods described below) payable semiannually in arrears on June 1 and December 1 of each year, commencing June 1, 1997 ("Distributions"). The payment of distributions on the Capital Securities out of moneys held by the Trust and payments on liquidation of the Trust or the redemption of Capital Securities, as set forth below, are guaranteed by the Company (the "Guarantee") to the extent described herein. The Guarantee covers payments of distributions and other payments on the Capital Securities only if and to the extent that the Trust has funds available therefor, which funds will not be available except to the extent the Company has made payments of interest or principal (or premium, if any) or other payments on the Subordinated Debt Securities held by the Trust. The Guarantee, when taken together with the Company's obligations under the Subordinated Debt Securities, the Declaration and the Indenture (as defined below), including its obligations to pay costs, 2 expenses, debts and other obligations of the Trust (other than with respect to the Trust Securities), provide a full and unconditional guarantee on a subordinated basis by the Company of amounts due on the Capital Securities. See "Risk Factors--Guarantee Covers Distributions and Other Payments Only to the Extent the Trust Has Available Funds; Related Remedies" herein. The obligations of the Company under the Guarantee and Subordinated Debt Securities are subordinate and junior in right of payment to all present and future Senior Indebtedness (as defined herein) of the Company and are also effectively subordinate to claims of creditors of the Company's subsidiaries. As of December 31, 1996, the Company had approximately $257 million principal amount of Senior Indebtedness (excluding indebtedness of the Company's subsidiaries) and the Company's subsidiaries had in the aggregate approximately $1.7 billion of indebtedness. There are no terms in the Subordinated Debt Securities, the Capital Securities or the Guarantee that limit the ability of the Company or its subsidiaries to incur additional indebtedness, including indebtedness that ranks senior to the Subordinated Debt Securities and the Guarantee. The distribution rate and the distribution payment dates and other payment dates for the Capital Securities will correspond to the interest rate and interest rate payment dates and other payment dates on the Subordinated Debt Securities held by the Trust, which are the sole assets of the Trust. As a result, if no principal (or premium, if any) or interest is paid on the Subordinated Debt Securities, the Trust will not have sufficient funds to make distributions on the Capital Securities, and the Guarantee will not apply to distributions for which the Trust has insufficient funds available. The Company has the right, subject to the conditions set forth herein, to defer payments of interest on the Subordinated Debt Securities by extending the interest payment period on the Subordinated Debt Securities at any time and from time to time for up to 10 consecutive semiannual periods (each such extended interest payment period, an "Extension Period"), provided no Extension Period may extend beyond the maturity of the Subordinated Debt Securities. If interest payments are so deferred, distributions on the Capital Securities issued by the Trust will also be deferred. During any such Extension Period, distributions will continue to accrue at the distribution rate equal to 7.65% per annum for Capital Securities, compounded semiannually (to the extent permitted by applicable law), and holders of the Capital Securities will be subject to United States federal income tax on the deferred amounts in advance of receipt of cash distributions with respect to such deferred interest payments. There could be multiple Extension Periods of varying lengths, each up to 10 consecutive semiannual periods, throughout the term of the Subordinated Debt Securities. See "Description of the Subordinated Debt Securities--Option to Extend Interest Payment Period," "Risk Factors-- Option to Extend Interest Payment Period" and "United States Federal Income Taxation--Original Issue Discount." The Subordinated Debt Securities are redeemable by the Company at the Call Price (as defined herein), plus accrued and unpaid interest to the date of redemption, in whole or in part, at any time and from time to time, on or after December 1, 2006 (the "Optional Redemptions"). In certain limited circumstances, upon the occurrence of a Tax Event (as defined herein), the Subordinated Debt Securities are also redeemable in whole or in part by the Company at their full principal amounts, together with accrued and unpaid interest thereon to the date of the redemption. Either redemption prior to maturity is subject to the Company having received prior approval from the Board of Governors of the Federal Reserve System (the "Federal Reserve") if then required under applicable capital guidelines or policies of the Federal Reserve. See "Description of the Capital Securities--Tax Event Redemption" and "Description of the Subordinated Debt Securities." Upon redemption or maturity of the Subordinated Debt Securities, the Trust must redeem on a pro rata basis its Trust Securities, having an aggregate liquidation amount equal to the aggregate principal amount of the Subordinated Debt Securities so redeemed or matured, at a redemption price (the "Redemption Price") equal to (i) $1,000 per Trust Security redeemed upon maturity of the Subordinated Debt Securities or upon the occurrence and continuation of a Tax Event under certain limited circumstances as described herein 3 or (ii) in the case of Optional Redemptions of Subordinated Debt Securities an amount per Trust Security equal to the product of $1,000 and the applicable percentage used to determine the Call Price for the Subordinated Debt Securities being redeemed, plus in all cases accrued and unpaid distributions on such Trust Securities to the date fixed for redemption. See "Description of the Capital Securities--Redemption." The Company, as the holder of all of the outstanding Common Securities of the Trust, has the right at any time, subject to the receipt of prior approval by the Federal Reserve, if then required under applicable capital guidelines or policies of the Federal Reserve, to dissolve the Trust (including without limitation upon the occurrence of a Tax Event). In any such dissolution, after satisfaction of liabilities to creditors of the Trust, the Subordinated Debt Securities must be distributed to the holders of the Trust Securities on a pro rata basis in accordance with the aggregate stated liquidation amount thereof in liquidation of the Trust. In the event of the involuntary or voluntary dissolution of the Trust, other than in connection with a redemption of Subordinated Debt Securities, after satisfaction of liabilities to creditors of the Trust (to the extent not satisfied by the Company), the holders of the Capital Securities will be entitled to receive a Liquidation Amount (as defined herein) plus accumulated and unpaid distributions thereon to the date of payment, unless, in connection with such dissolution, the Subordinated Debt Securities held by the Trust are distributed to the holders of the Trust Securities as would be required in certain circumstances. See "Description of the Capital Securities--Liquidation Distribution upon Dissolution." The Capital Securities will be issued and may be transferred only in blocks having a stated liquidation amount of not less than $100,000 (100 Capital Securities). See "Description of Capital Securities--Restrictions on Transfer." The Company and the Trust do not intend to apply for listing of the Capital Securities issued in the Exchange Offer as debt securities on a securities exchange or for quotation through the National Association of Securities Dealers Automated Quotation System. However, if the Subordinated Debt Securities are distributed to the holders of the Capital Securities, and the Capital Securities are then listed on such exchange or for such quotation, the Company will use its best efforts to have the Subordinated Debt Securities listed on such exchange or for such quotation as the Capital Securities are then listed. Based on interpretations by the staff of the Securities and Exchange Commission (the "Commission"), as set forth in no-action letters issued to third parties, the Company and the Trust believe that the New Capital Securities issued pursuant to the Exchange Offer may be offered for resale, resold or otherwise transferred by holders thereof (other than any holder that is an "affiliate" of the Company or the Trust as defined under Rule 405 of the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such New Capital Securities are acquired in the ordinary course of such holders' business and such holders are not engaged in, and do not intend to engage in, a distribution of such New Capital Securities and have no arrangement or understanding with any person to participate in the distribution of such New Capital Securities. However, the staff of the Commission has not considered the Exchange Offer in the context of a no-action letter, and there can be no assurance that the staff of the Commission would make a similar determination with respect to the Exchange Offer as in such other circumstances. By tendering the Old Capital Securities in exchange for New Capital Securities, each holder, other than a broker-dealer, will represent to the Company and the Trust that: (i) it is not an affiliate of either the Company or the Trust (as defined under Rule 405 of the Securities Act); (ii) any New Capital Securities to be received by it were acquired in the ordinary course of its business; and (iii) at the time of commencement of the Exchange Offer, it has no arrangement with any person to participate in the distribution (within the meaning of the Securities Act) of the New Capital Securities. Each broker-dealer that receives New Capital Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such New Capital Securities. The Letter of Transmittal states that by so acknowledging and by 4 delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Securities received in exchange for Old Capital Securities where such Old Capital Securities were acquired by such broker-dealer as a result of market-making activities or other trading activities. The Company and the Trust have agreed that, starting on the date of the original issuance of the Old Capital Securities and ending on the close of business one year after such date, they will make this Prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution." THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION. HOLDERS OF OLD CAPITAL SECURITIES ARE URGED TO READ THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING WHETHER TO TENDER THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER. Old Capital Securities may be tendered for exchange on or prior to 5:00 p.m., New York City time, on April 10, 1997 (such time on such date being hereinafter called the "Expiration Date"), unless the Exchange Offer is extended by M&I and the Trust (in which case the term "Expiration Date" shall mean the latest date and time to which the Exchange Offer is extended). Tenders of Old Capital Securities may be withdrawn at any time on or prior to the Expiration Date. The Exchange Offer is not conditioned upon any minimum Liquidation Amount of Old Capital Securities being tendered for exchange. However, the Exchange Offer is subject to certain events and conditions which may be waived by M&I or the Trust and to the terms and provisions of the Registration Rights Agreement. Old Capital Securities may be tendered in whole or in part having a Liquidation Amount of not less than $100,000 (100 Capital Securities) and any integral multiple of $1,000 Liquidation Amount (1 Capital Security) in excess thereof. M&I has agreed to pay all expenses of the Exchange Offer. See "The Exchange Offer -- Fees and Expenses." Each New Capital Security will pay cumulative Distributions from the most recent Distribution Date (as defined below) on the Old Capital Securities surrendered in exchange for such New Capital Securities or, if no Distributions have been paid on such Old Capital Securities, from December 9, 1996. Holders of the Old Capital Securities whose Old Capital Securities are accepted for exchange will not receive accumulated Distributions on such Old Capital Securities for any period from and after the last Distribution Date on such Old Capital Securities prior to the original issue date of the New Capital Securities or, if no such Distributions have been paid, will not receive any accumulated Distributions on such Old Capital Securities, and will be deemed to have waived the rights to receive any Distributions on such Old Capital Securities accumulated from and after such Distribution Date or, if no such Distributions have been paid or duly provided for, from and after December 9, 1996. This Prospectus, together with the Letter of Transmittal, is being sent to all registered holders of Old Capital Securities as of March 11, 1997. Neither M&I nor the Trust will receive any cash proceeds from the issuance of the New Capital Securities offered hereby. No dealer-manager is being used in connection with this Exchange Offer. See "Use of Proceeds" and "Plan of Distribution." 5 AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith, files reports, proxy statements and other information with the Commission. Such reports, proxy statements and other information can be inspected and copied at the public reference facilities of the Commission at Room 1024, 450 Fifth Street, N.W., Washington D.C. 20549 and at the regional offices of the Commission located at 7 World Trade Center, 13th Floor, Suite 1300, New York, New York 10048 and Suite 1400, Citicorp Center, 14th Floor, 500 West Madison Street, Chicago, Illinois 60661. Copies of such material can also be obtained at prescribed rates by writing to the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Such information may also be accessed electronically by means of the Commission's home page on the Internet (http://www.sec.gov). In addition, the Company's common stock is included for quotation on the NASDAQ/NMS, and such reports, proxy statements and other information concerning the Company is available for inspection and copying at the offices of the National Association of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006. No separate financial statements of the Trust have been included herein. The Company and the Trust do not consider that such financial statements would be material to holders of the Capital Securities because the Trust is a newly formed special purpose entity, has virtually no operating history or independent operations and is not engaged in and does not propose to engage in any activity other than holding as trust assets the Subordinated Debt Securities and issuing the Trust Securities. See "M&I Capital Trust A", "Description of Capital Securities", "Description of Subordinated Debt Securities" and "Description of Guarantee". In addition, the Company does not expect that the Trust will file reports under the Exchange Act with the Commission. This Prospectus constitutes a part of a registration statement on Form S-4 (the "Registration Statement") filed by the Company and the Trust with the Commission under the Securities Act. This Prospectus does not contain all the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission, and reference is hereby made to the Registration Statement and to the exhibits relating thereto for further information with respect to the Company and the Capital Securities. Any statements contained herein concerning the provisions of any document are not necessarily complete, and, in each instance, reference is made to the copy of such document filed as an exhibit to the Registration Statement or otherwise filed with the Commission. Each such statement is qualified in its entirety by such reference. 6 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The Company's Annual Report on Form 10-K for the year ended December 31, 1996 is incorporated into this Prospectus by reference. Each document or report filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the termination of any offering of securities made by this Prospectus shall be deemed to be incorporated by reference into this Prospectus and to be a part of this Prospectus from the date of filing of such document. Any statement contained herein, or in a document all or a portion of which is incorporated or deemed to be incorporated by reference herein, shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or superseded such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. As used herein, the terms "Prospectus" and "herein" mean this Prospectus, including such documents incorporated or deemed to be incorporated herein by reference, as the same may be amended, supplemented or otherwise modified from time to time. Statements contained in this Prospectus as to the contents of any contract or other document referred to herein do not purport to be complete, and where reference is made to the particular provisions of such contract or other document, such provisions are qualified in all respects by reference to all of the provisions of such contract or other document. THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED OR DELIVERED HEREIN. THE COMPANY WILL PROVIDE WITHOUT CHARGE TO ANY PERSON TO WHOM THIS PROSPECTUS IS DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF SUCH PERSON, A COPY OF ANY OR ALL OF THE FOREGOING DOCUMENTS INCORPORATED BY REFERENCE HEREIN (OTHER THAN EXHIBITS NOT SPECIFICALLY INCORPORATED BY REFERENCE INTO THE TEXTS OF SUCH DOCUMENTS). REQUESTS FOR SUCH DOCUMENTS SHOULD BE ADDRESSED TO MARSHALL & ILSLEY CORPORATION, 770 NORTH WATER STREET, MILWAUKEE, WISCONSIN 53202, TELEPHONE: (414) 765-7801, ATTENTION: SECRETARY. IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY APRIL 2, 1997. 7 SUMMARY The following summary is qualified in its entirety by the more detailed information and the financial statements, including the notes thereto, appearing elsewhere or incorporated by reference into this Prospectus. Prospective investors should consider carefully the factors set forth herein under "Risk Factors." As used in this Prospectus, "M&I" includes its respective predecessors and subsidiaries, except as the context otherwise may require. M&I CAPITAL TRUST A The Trust is a statutory business trust formed under Delaware law pursuant to (i) a Declaration of Trust executed by the Company, as Sponsor, and the M&I Trustees (as defined herein), and (ii) the filing of a certificate of trust with the Delaware Secretary of State on December 2, 1996. The Trust exists for the exclusive purposes of (i) issuing the Trust Securities, (ii) investing the gross proceeds from the sale of the Trust Securities to acquire the Subordinated Debt Securities issued by the Company, and (iii) engaging in only those other activities necessary or incidental thereto. Accordingly, the Subordinated Debt Securities are the sole assets of the Trust, and payments under the Subordinated Debt Securities will be the sole revenues of the Trust. All of the Common Securities are owned by M&I. The principal place of business is c/o Marshall & Ilsley Corporation, 770 North Water Street, Milwaukee, Wisconsin 53202, and its telephone number is (414) 765-7801. MARSHALL & ILSLEY CORPORATION Marshall & Ilsley Corporation ("M&I" or "the Company"), is a registered bank holding company headquartered in Milwaukee, Wisconsin. M&I's principal assets are the stock of its bank and nonbank subsidiaries and the assets of its Data Services Division ("M&I Data Services"). M&I's bank and savings association subsidiaries provide a full range of banking services to individuals, businesses and governments throughout Wisconsin and the Phoenix, Arizona metropolitan area. M&I's nonbank subsidiaries operate a variety of bank-related businesses, including investment management services, insurance services, trust services, equipment lease financing, commercial and residential mortgage banking, venture capital, brokerage services and financial advisory services. M&I Data Services is a major supplier of financial and data processing services and software to banking, financial and related organizations. As of December 31, 1996, M&I had consolidated total assets of approximately $14.8 billion and consolidated total deposits of approximately $11.0 billion. Because M&I is a holding company, the Subordinated Debt Securities and the Guarantee are effectively subordinated to all existing and future liabilities of M&I's subsidiaries, except to the extent that M&I is a creditor of the subsidiaries recognized as such. The principal executive offices of M&I are located at 770 North Water Street, Milwaukee, Wisconsin 53202. M&I's telephone number is (414) 765-7801. THE EXCHANGE OFFER The Exchange Offer........ Up to $200,000,000 aggregate Liquidation Amount of New Capital Securities are being offered in ex- change for a like aggregate Liquidation Amount of Old Capital Securities. Old Capital Securities may be tendered for exchange in whole or in part in a Liquidation Amount of $100,000 (100 Capital Securi- ties) or any integral multiple of $1,000 in excess thereof. M&I and the Trust are 8 making the Exchange Offer in order to satisfy its obligations under the Registration Rights Agreement relating to the Old Capital Securities. For a de- scription of the procedures for tendering Old Capi- tal Securities, see "The Exchange Offer--Procedures for Tendering Old Capital Securities." Expiration Date........... 5:00 p.m., New York City time, on April 10, 1997 (such time on such date being hereinafter called the "Expiration Date") unless the Exchange Offer is extended by M&I and the Trust (in which case the term "Expiration Date" shall mean the latest date and time to which the Exchange Offer is extended). See "The Exchange Offer--Expiration Date; Exten- sions; Amendments." Conditions to the The Exchange Offer is subject to certain condi- Exchange.................. tions, which may be waived by M&I and the Trust in their sole discretion. The Exchange Offer is not conditioned upon any minimum Liquidation Amount of Old Capital Securities being tendered. See "The Exchange Offer--Conditions to the Exchange Offer." M&I and the Trust reserve the right in their sole and absolute discretion, subject to applicable law, at any time and from time to time, (i) to delay the acceptance of the Old Capital Securities, (ii) to terminate the Exchange Offer if certain specified conditions have not been satisfied, (iii) to extend the Expiration Date of the Exchange Offer and re- tain all Old Capital Securities tendered pursuant to the Exchange Offer, subject, however, to the right of holders of Old Capital Securities to with- draw their tendered Old Capital Securities, or (iv) to waive any condition or otherwise amend the terms of the Exchange Offer in any respect. See "The Ex- change Offer--Expiration Date; Extensions; Amend- ments." Listing................... The Company and the Trust do not intend to apply for listing of the Capital Securities issued in the Exchange Offer as debt securities on a securities exchange or for quotation through the National As- sociation of Securities Dealers Automated Quotation System. However, if the Subordinated Debt Securi- ties are distributed to the holders of the Capital Securities, and the Capital Securities are then listed on such exchange or for such quotation, the Company will use its best efforts to have the Sub- ordinated Debt Securities listed on such exchange or for such quotation as the Capital Securities are then listed. Withdrawal Rights......... Tenders of Old Capital Securities may be withdrawn at any time on or prior to the Expiration Date by delivering a written notice of such withdrawal to the Exchange Agent in conformity with certain pro- cedures as set forth below under "The Exchange Of- fer--Withdrawal Rights." Procedures for Tendering Old Capital Securities.... Tendering holders of Old Capital Securities must complete and sign a Letter of Transmittal in accor- dance with the instructions contained therein and forward the same by mail, facsimile transmission or hand delivery, together with any other required docu- 9 ments, to the Exchange Agent, either with the Old Capital Securities to be tendered or in compliance with the specified procedures for guaranteed deliv- ery of Old Capital Securities. Certain brokers, dealers, commercial banks, trust companies and other nominees may also effect tenders by book-en- try transfer, including an Agent's Message in lieu of a Letter of Transmittal. Holders of Old Capital Securities registered in the name of a broker, dealer, commercial bank, trust company or other nominee are urged to contact such person promptly if they wish to tender Old Capital Securities pur- suant to the Exchange Offer. See "The Exchange Of- fer--Procedures for Tendering Old Capital Securi- ties." Letters of Transmittal and certificates represent- ing Old Capital Securities should not be sent to M&I or the Trust. Such documents should only be sent to the Exchange Agent. Questions regarding how to tender and requests for information should be directed to the Exchange Agent. See "The Exchange Offer--Exchange Agent." Resales of New Capital Securities................ Based on interpretations by the staff of the Com- mission, as set forth in no-action letters issued to third parties, the Company and the Trust believe that holders of Old Capital Securities (other than any holder that is an "affiliate" of the Company or the Trust as defined under Rule 405 of the Securi- ties Act) who exchange their Old Capital Securities for New Capital Securities pursuant to the Exchange Offer may offer such New Capital Securities for re- sale, resell such New Capital Securities and other- wise transfer such New Capital Securities without compliance with the registration and prospectus de- livery provisions of the Securities Act, provided that such New Capital Securities are acquired in the ordinary course of such holders' business and such holders are not engaged in, and do not intend to engage in, a distribution of such New Capital Securities and have no arrangement or understanding with any person to participate in the distribution of such New Capital Securities. However, the staff of the Commission has not considered the Exchange Offer in the context of a no-action letter, and there can be no assurance that the staff of the Commission would make a similar determination with respect to the Exchange Offer. Each broker-dealer that receives New Capital Securities for its own account in exchange for Old Capital Securities, where such Old Capital Securities were acquired by such broker-dealer as a result of market-making ac- tivities or other trading activities, must acknowl- edge that it will deliver a prospectus in connec- tion with any resale of such New Capital Securi- ties. See "Plan of Distribution." Exchange Agent............ The exchange agent with respect to the Exchange Of- fer is The Chase Manhattan Bank (the "Exchange Agent"). The address, and telephone and facsimile numbers of the Exchange Agent are set forth in "The Exchange Offer--Exchange Agent" and in the Letter of Transmittal. 10 Use of Proceeds........... Neither M&I nor the Trust will receive any cash proceeds from the issuance of the New Capital Secu- rities offered hereby. See "Use of Proceeds." Certain United States Federal Income Tax Considerations; ERISA Considerations............ Holders of Old Capital Securities should review the information set forth under "United States Federal Income Taxation" and "ERISA Considerations" prior to tendering Old Capital Securities in the Exchange Offer. THE CAPITAL SECURITIES Securities Offered........ $200,000,000 aggregate liquidation amount of New Capital Securities (liquidation amount $1,000 per Capital Security). The terms of the New Capital Se- curities are identical in all material respects to the terms of the Old Capital Securities, except that the New Capital Securities have been regis- tered under the Securities Act and therefor are not subject to certain restrictions on transfer appli- cable to the Old Capital Securities and will not provide for increase in the Distribution rate thereon. General................... The Capital Securities represent undivided benefi- cial interests in the Trust's assets, which consist solely of the Subordinated Debt Securities. The Subordinated Debt Securities, in which the proceeds of the Trust Securities are invested, mature on December 1, 2026, unless the Subordinated Debt Se- curities are redeemed by the Company prior to such maturity as described under "Description of the Capital Securities--Redemption" and "Description of the Capital Securities--Tax Event Redemption." Distributions............. The distributions payable on the Capital Securities will be fixed at a rate per annum of 7.65% of the stated liquidation amount of $1,000 per Capital Se- curity and will be cumulative, will accrue from De- cember 9, 1996, the date of issuance of the Old Capital Securities, and (subject to the extension of distribution payment periods described below) will be payable semiannually, in arrears, on June 1 and December 1 of each year, commencing June 1, 1997. See "Description of the Capital Securities-- Distributions." Option to Extend Interest Payment Period............ The Company has the right, at any time, subject to certain conditions, to defer payments of interest on the Subordinated Debt Securities for Extension Periods, each not exceeding 10 consecutive semian- nual periods; provided, that no Extension Period may extend beyond the maturity date of the Subordi- nated Debt Securities. As a consequence of the Company's extension of the interest payment period, distributions on the Capital Securities would be deferred (though such distributions would continue to accrue interest thereon compounded semiannually (to the extent 11 permitted by law)), since interest would continue to accrue with interest thereon compounded semiannually on the Subordinated Debt Securities during any such Extension Period. In the event the Company exercises its right to extend an interest payment period, then during any Extension Period, subject to certain exceptions, (i) the Company shall not declare or pay any dividend on, make any distributions with respect to, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock or rights to acquire such capital stock or make any guarantee payments with respect to the foregoing and (ii) the Company shall not make any payment of interest on or prin- cipal of (or premium, if any, on), or repay, repur- chase or redeem, any debt securities issued by the Company which rank pari passu with or junior to the Subordinated Debt Securities. Upon the termination of any Extension Period and the payment of all amounts then due, the Company may commence a new Extension Period, subject to certain requirements. See "Description of the Subordinated Debt Securi- ties--Option to Extend Interest Payment Period." Should an Extension Period occur with respect to the Capital Securities, holders of Capital Securi- ties will continue to recognize interest income for United States federal income tax purposes. As a re- sult, such holders will be required to include such interest in gross income for United States federal income tax purposes in advance of the receipt of cash, and such holders will not receive the cash from the Trust related to such income if such hold- ers dispose of Capital Securities prior to the rec- ord date for payment of distributions. See "United States Federal Income Taxation--US Holders--Origi- nal Issue Discount." Liquidation .............. The Company, as the holder of all of the Common Se- curities, has the right at any time to dissolve the Trust (including but not limited to the occurrence of a Tax Event), subject to certain conditions, with the result that, after satisfaction of liabil- ities to creditors of the Trust (to the extent not satisfied by the Company), the Subordinated Debt Securities would be distributed to the holders of the Trust Securities in liquidation of the holders' interests in the Trust on a pro rata basis in ac- cordance with its aggregate stated liquidation amount thereof, in liquidation of the Trust. In ad- dition, the Trust is required to be liquidated un- der certain other circumstances. See "Description of the Capital Securities--Liquidation Distribution upon Dissolution." Liquidation Amount........ In the event of the liquidation of the Trust, after satisfaction of liabilities to creditors of the Trust (to the extent not satisfied by the Company), holders of Capital Securities issued by the Trust will be entitled to receive $1,000 per Capital Se- curity plus an amount equal to accrued and unpaid distributions thereon to the date of payment, un- less the Subordinated Debt Securities are distrib- uted to holders of Trust Securities in the Trust. See "Description of the Capital Securities--Liqui- dation Distribution Upon Dissolution." 12 Maturity.................. Upon the repayment of the Subordinated Debt Securi- ties at maturity, the proceeds from such repayment will be applied by the Institutional Trustee to re- deem a like amount of Trust Securities, upon the terms and conditions described herein. See "De- scription of the Capital Securities--Redemption." Optional Redemption....... The Company has the right to redeem the Subordi- nated Debt Securities on or after December 1, 2006, in whole or in part at any time, subject to the conditions described in "Description of the Subor- dinated Debt Securities--Redemption," at the Call Price described herein, together with accrued and unpaid interest to the date of redemption. Upon the redemption of the Subordinated Debt Securities, the proceeds of such redemption will be applied by the Institutional Trustee to redeem a like amount of Trust Securities at the applicable Redemption Price, upon the terms and conditions described herein. See "Description of the Capital Securi- ties--Redemption." Tax Event Redemption...... If at any time a Tax Event shall occur and would continue despite liquidation of the Trust and dis- tribution of the Subordinated Debt Securities to the holders of the Trust Securities, the Company may, within 90 days of the occurrence of such Tax Event, redeem the Subordinated Debt Securities in whole or in part at their full principal amounts, plus any accrued and unpaid interest to the redemp- tion date. See "Description of the Capital Securi- ties--Tax Event Redemption." Upon the redemption of the Subordinated Debt Securities, the proceeds of such redemption will be applied by the Institu- tional Trustee to redeem a like amount of Trust Se- curities at the applicable Redemption Price, upon the terms and conditions described herein. See "De- scription of the Capital Securities--Redemption." Voting Rights............. Generally, the holders of the Capital Securities will not have any voting rights. See "Description of the Capital Securities--Voting Rights." The Guarantee............. The payment of distributions out of moneys held by the Trust, payments on liquidation of the Trust and payment upon the redemption of Capital Securities of the Trust are guaranteed by the Company as de- scribed herein under "Description of the Guaran- tee." The guarantee covers payments of distribu- tions and other payments on the Capital Securities only if and to the extent that the Trust has funds available therefor, which funds will not be avail- able except to the extent the Company has made pay- ments of interest (or premium, if any) or principal or other payments on the Subordinated Debt Securi- ties. The Guarantee, when taken together with the Company's obligations under the Subordinated Debt Securities and the Indenture, including its obliga- tions to pay costs, expenses, debts and other lia- bilities of the Trust (other than with respect to the Trust Securities), provide a full and uncondi- tional guarantee on a subordinated basis by the Company of amounts due on the Capital Securities. 13 Ranking................... The Common Securities of the Trust rank pari passu, and payments thereon will be made pro rata, with the Capital Securities issued by the Trust except that upon the occurrence and during the continuance of a Declaration Event of Default (as defined here- in) under the Trust, the rights of the holders of the Common Securities of the Trust to receive pay- ment of periodic distributions and payments upon liquidation, redemption or otherwise will be subor- dinated to the rights of the holders of the Capital Securities. See "Description of the Capital Securi- ties--General." The Subordinated Debt Securities are unsecured and subordinate and junior in right of payment to the extent and in the manner set forth in the Indenture to all Senior Indebtedness (as defined herein). See "Description of Subordi- nated Debt Securities." The Guarantee constitutes an unsecured obligation of the Company and will rank subordinate and junior in right of payment to the extent and in the manner set forth in the Guar- antee to all Senior Indebtedness. See "Description of Guarantee." Rating.................... The New Capital Securities are expected to be rated "A-" by Standard & Poor's Rating Services and "a1" by Moody's Investors Services, Inc. A security rat- ing is not a recommendation to buy, sell or hold securities and may be subject to revision or with- drawal at any time by the assigning rating organi- zation. Use of Proceeds........... Neither M&I nor the Trust will receive any cash proceeds from the issuance of the New Capital Secu- rities offered hereby. M&I's proceeds from the sale of the Old Subordinated Debt Securities were added to the general funds of M&I and were and may be used for general corporate purposes, including, without limitation, funding the repurchase of shares of its common stock, reduction of indebted- ness (including the refinancing of M&I's outstand- ing commercial paper), investments in or advances to subsidiaries and possible future acquisitions of bank and non-bank subsidiaries. See "Use of Pro- ceeds." Absence of Market for the Capital Securities........ The New Capital Securities will be a new issue of securities for which there is currently no market. There can be no assurance as to the development of liquidity of any market for the Capital Securities. Trading Price............. The New Capital Securities are expected to trade at a price per Capital Security plus accrued and un- paid distributions, if any, to the date of settle- ment. For additional information with respect to the Capital Securities, see "Description of the Capital Securities," "Description of the Subordinated Debt Securities," "Description of the Guarantee," "United States Federal Income Taxation" and "Notice to Investors." RISK FACTORS Prospective investors should carefully consider the matters set forth under "Risk Factors." 14 MARSHALL & ILSLEY CORPORATION SELECTED CONSOLIDATED FINANCIAL DATA The following table sets forth selected consolidated financial data and other operating information for each of the five years in the period ended December 31, 1996. Data relating to periods prior to 1994 has been restated to give effect to the merger with Valley Bancorporation ("Valley") on May 31, 1994, which was accounted for as a pooling of interests. Consolidated earnings and per share data are taken from audited consolidated financial statements of M&I. The data and other operating information should be read in conjunction with and are qualified in their entirety by the financial statements and more detailed information incorporated herein by reference. See "Incorporation of Certain Documents by Reference."
YEARS ENDED DECEMBER 31, --------------------------------------------------------------- 1996 1995 1994 1993 1992 ----------- ----------- ----------- ----------- ----------- (IN THOUSANDS, EXCEPT PER SHARE DATA) SUMMARIZED INCOME STATEMENT DATA: Net Interest Income..... $ 505,719 $ 491,477 $ 491,227 $ 480,279 $ 472,551 Provisions for Loan Losses................. 15,194 16,158 24,907 18,034 23,546 Other Income............ 503,320 424,182 361,481 371,926 328,411 Other Expense........... 680,704 599,622 584,770 569,587 545,624 Merger/Restructuring Expense................ -- -- 75,228 -- -- Provision for Income Taxes.................. 109,711 106,580 73,405 93,190 75,391 ----------- ----------- ----------- ----------- ----------- Income Before Extraordinary Items and Cumulative Effect of Changes in Accounting Principles............. 203,430 193,299 94,398 171,394 156,401 Extraordinary Items, Net of Income Taxes........ -- -- 11,542 -- -- Cumulative Effect of Changes in Accounting Principles, Net of Income Taxes........... -- -- -- -- (9,134) ----------- ----------- ----------- ----------- ----------- Net Income.............. $ 203,430 $ 193,299 $ 105,940 $ 171,394 $ 147,267 =========== =========== =========== =========== =========== PER SHARE DATA: Primary................. $ 2.07 $ 1.96 $ 1.07 $ 1.67 $ 1.46 Fully Diluted........... 2.02 1.90 1.04 1.60 1.40 Book Value.............. 13.37 12.92 11.01 11.35 10.76 Cash Dividends Per Common Share........... 0.720 0.645 0.59 0.54 0.47 AVERAGE BALANCE SHEET DATA: Investment Securities... $ 3,391,495 $ 2,400,873 $ 2,467,882 $ 2,636,940 $ 2,473,706 Loans, Net of Unearned Income................. 8,978,273 9,027,965 8,710,706 8,180,292 7,694,097 Total Earning Assets.... 12,565,578 11,661,963 11,379,769 11,002,235 10,539,984 Total Assets............ 13,655,557 12,725,511 12,432,461 12,039,468 11,525,409 Deposits................ 10,213,896 9,609,415 9,670,097 9,774,732 9,452,595 Long-term Debt.......... 656,786 801,176 447,254 272,041 284,333 Shareholders' Equity.... 1,280,841 1,177,825 1,097,963 1,121,314 1,010,667 SELECTED FINANCIAL RATIOS: Return on Average Assets (Annualized)........... 1.49% 1.52% 0.85% 1.42% 1.28% Return on Average Equity (Annualized)........... 15.88 16.41 9.65 15.29 14.57 Taxable-Equivalent Net Interest Income to Average Earning Assets (Annualized)........... 4.14 4.30 4.40 4.48 4.65 Common Dividend Payout.. 35.64 33.95 56.73 33.75 33.57 Average Shareholders' Equity to Average Total Assets................. 9.38 9.26 8.83 9.31 8.77 Tier 1 Risk-Based Capital................ 12.71 11.71 11.15 11.47 -- Total Risk-Based Capital................ 14.90 14.04 13.62 14.06 -- Tier 1 Leverage......... 9.61 9.07 8.39 8.74 -- Net Charge-offs to Average Loans and Leases Outstanding (Annualized)........... 0.23 0.10 0.05 0.11 0.12 Allowance for Loan Losses to Total Loans and Leases Outstanding. 1.68 1.82 1.75 1.55 1.55 Allowance for Loan Losses to Nonperforming Loans and Leases(1).... 225 261 265 237 187 Nonperforming Loans and Leases to Loans and Leases Outstanding, End of Period(1)........... 0.75 0.70 0.66 0.65 0.83 Nonperforming Assets to Loans and Leases Outstanding Plus Loan- Related Assets at End of Period(1)........... 0.81 0.79 0.80 0.80 1.07 RATIO OF EARNINGS TO FIXED CHARGES(2) Excluding Interest on Deposits............... 3.76x 3.76x 3.18x 6.52x 5.57x Including Interest on Deposits............... 1.66x 1.68x 1.50x 1.83x 1.60x
- ------ (1) Nonperforming loans include non-accrual loans, restructured loans and loans 90 days or more past due and still accruing interest. Nonperforming assets include nonperforming loans plus assets acquired through foreclosure or repossession. (2) The ratio of earnings to fixed charges has been computed by dividing earnings before income taxes and fixed charges by fixed charges. Fixed charges, excluding interest on deposits, consists of interest on indebtedness and one-third of rental expense (which is deemed representative of the interest factor). Fixed charges, including interest on deposits, consist of both the foregoing items plus interest on deposits. 15 RISK FACTORS Prior to making an investment decision, prospective purchasers of New Capital Securities should carefully review the information contained elsewhere or incorporated by reference in this Prospectus and should particularly consider the following matters. RANKING OF SUBORDINATE OBLIGATIONS UNDER THE GUARANTEE AND THE SUBORDINATED DEBT SECURITIES The obligations of M&I under the Guarantee and the Subordinated Debt Securities are subordinate and junior in right of payment to all present and future Senior Indebtedness (as defined herein) of M&I. No payment of principal of (including redemption payments, if any) or premium, if any, or interest on the Subordinated Debt Securities may be made if (i) any Senior Indebtedness of M&I is not paid when due and any applicable grace period with respect to such default has ended with such default not having been cured or waived or ceasing to exist or (ii) the maturity of any Senior Indebtedness of M&I has been accelerated because of a default. As of December 31, 1996, M&I had approximately $257 million principal amount of Senior Indebtedness outstanding, and the Company's subsidiaries had in the aggregate approximately $1.7 billion of indebtedness. There are no terms in the Capital Securities, the Subordinated Debt Securities, or the Guarantee that limit the ability of M&I or its subsidiaries to incur additional indebtedness, including indebtedness that ranks senior to the Subordinated Debt Securities and the Guarantee. See "Description of the Guarantee--Status of the Guarantee" and "Description of the Subordinated Debt Securities." Because M&I is a bank holding company, the Subordinated Debt Securities and the Guarantee are effectively subordinated to all existing and future liabilities of M&I's subsidiaries, except to the extent that M&I is a creditor of the subsidiaries recognized as such. There are also various legal limitations on the extent to which M&I's depository subsidiaries may extend credit, pay dividends or otherwise supply funds to M&I or various of its affiliates. GUARANTEE COVERS DISTRIBUTIONS AND OTHER PAYMENTS ONLY TO THE EXTENT THE TRUST HAS AVAILABLE FUNDS: RELATED REMEDIES The terms of the Guarantee are those set forth in an indenture and those made part of such Guarantee by the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), under which The Chase Manhattan Bank will act as trustee (the "Guarantee Trustee"). The Guarantee Trustee will hold the Guarantee for the benefit of the holders of the Capital Securities. The Guarantee guarantees to the holders of the Capital Securities the following payments, to the extent not paid by the Trust: (i) any accrued and unpaid distributions required to be paid on the Capital Securities, to the extent the Trust has funds available therefor, (ii) the Redemption Price (as defined herein), including all accrued and unpaid distributions with respect to Capital Securities called for redemption by the Trust, to the extent the Trust has funds available therefor, and (iii) upon a voluntary or involuntary dissolution, winding-up or termination of the Trust (other than in connection with the distribution of Subordinated Debt Securities to the holders of Capital Securities upon a redemption of all the Capital Securities), the lesser of (a) the aggregate of the liquidation amount and all accrued and unpaid distributions on the Capital Securities to the date of the payment, to the extent the Trust has funds available therefor or (b) the amount of assets of the Trust remaining available for distribution to holders of the Capital Securities in liquidation of the Trust. The Guarantee is subordinated as described under "--Ranking of Subordinate Obligations under the Guarantee and the Subordinated Debt Securities." The holders of a majority in liquidation amount of the Capital Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee or to direct the exercise of any trust or power conferred upon the Guarantee 16 Trustee under the Guarantee. A holder of record of the Capital Securities may institute a legal proceeding directly against M&I to enforce the Guarantee Trustee's rights without first instituting any legal proceeding against the Trust, the Guarantee Trustee or any other person or entity. Notwithstanding the foregoing, any holder of record of Capital Securities may, after such holder's written request to the Guarantee Trustee to pursue such trustee's remedies under the Guarantee and any failure by such trustee to do so, institute a legal proceeding directly against M&I, without first instituting a legal proceeding against the Trust, the Guarantee Trustee or any other person or entity, for enforcement of payment, on or after the respective due dates specified in the Capital Securities, to such holder of distributions on the Capital Securities of such holder. If M&I were to default on its obligation to pay amounts payable on the Subordinated Debt Securities, the Trust would lack available funds for the payment of distributions or amounts payable on redemption of the Capital Securities or otherwise, and, in such event, holders of the Capital Securities would not be able to rely upon the Guarantee for payment of such amounts. Instead, each holder of Capital Securities would rely on the enforcement (i) by the Institutional Trustee (as defined herein) of its rights as registered holder of the Subordinated Debt Securities against M&I pursuant to the terms of the Subordinated Debt Securities or (ii) by such holder of Capital Securities of its right against M&I to enforce payments of principal (and premium, if any) and interest on Subordinated Debt Securities having an aggregate principal amount equal to the aggregate liquidation amount of Capital Securities of such holder. See "Description of the Capital Securities," "Description of the Guarantee" and "Description of the Subordinated Debt Securities." The Declaration provides that each holder of Capital Securities, by acceptance thereof, agrees to the provisions of the Guarantee, including the subordination provisions thereof, and the Indenture. ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF CAPITAL SECURITIES If a Declaration Event of Default (as defined herein) with respect to the Trust occurs and is continuing, then the holders of Capital Securities issued by the Trust would, except as provided below, rely on the enforcement by the Institutional Trustee of its rights as holder of the Subordinated Debt Securities issued to the Trust against M&I. The holders of a majority in liquidation amount of the Capital Securities issued by the Trust will have the right to direct the time, method, and place of conducting any proceeding for any remedy available to the Institutional Trustee with respect to such Capital Securities or to direct the exercise of any trust or power conferred upon the Institutional Trustee under the Declaration, including the rights to direct the Institutional Trustee to exercise the remedies available to it as a holder of the Subordinated Debt Securities. If the Institutional Trustee fails to enforce its rights under the Subordinated Debt Securities after the holders of a majority in liquidation amount of the Capital Securities have so directed such Institutional Trustee, a holder of record of the Capital Securities may institute a legal proceeding directly against M&I to enforce the rights of the Institutional Trustee under the Subordinated Debt Securities, without first instituting any legal proceeding against such Institutional Trustee or any other person. Notwithstanding the foregoing, if a Declaration Event of Default with respect to the Trust has occurred and is continuing and such event is attributable to the failure of the Company to pay interest or principal (or premium, if any) on the Subordinated Debt Securities issued to the Trust on the respective dates such interest or principal (or premium, if any) is payable (or in the case of redemption, on the redemption date), then a holder of record of such Capital Securities may institute directly against the Company, a proceeding for enforcement of payment, on or after the respective due dates specified in the Subordinated Debt Securities, to such holder directly of the principal of (or premium, if any) or interest on Subordinated Debt Securities having an aggregate principal amount equal to the aggregate liquidation amount of the Capital Securities of such holder (a "Direct Action"). In connection with such Direct Action, the Company will be subrogated to the rights of such holder of Capital Securities under the Declaration to the extent of any payment made by the Company to such holder of Capital Securities in such Direct Action; provided, however, that no such subrogation right may be 17 exercised so long as a Declaration Event of Default has occurred and is continuing. The holders of Capital Securities will not be able to exercise directly any other remedy available to the holders of the Subordinated Debt Securities. OPTION TO EXTEND INTEREST PAYMENT PERIOD FOR UP TO TEN SEMIANNUAL PERIODS; TAX CONSEQUENCES M&I has the right under the Indenture to defer payments of interest on the Subordinated Debt Securities by extending the interest payment period at any time, and from time to time, subject to certain conditions, for Extension Periods, each up to 10 consecutive semiannual periods. During each such Extension Period, semiannual distributions on the Capital Securities would be deferred (but would continue to accrue, despite such deferral, with interest thereon compounded semiannually to the fullest extent permitted by law) by the Trust. In the event that M&I exercises this right to defer interest payments, then during any Extension Period (a) M&I shall not declare or pay dividends on, or make a distribution with respect to, or redeem, purchase or acquire, or make a liquidation payment with respect to, any of its capital stock or rights to acquire capital stock (other than (i) purchases or acquisitions of shares of any such capital stock or rights to acquire such capital stock in connection with the satisfaction by M&I of its obligations under any employee benefit plans, (ii) as a result of a reclassification of M&I's capital stock or rights to acquire such capital stock or the exchange or conversion of one class or series of M&I's capital stock or rights to acquire such capital stock for another class or series of M&I's capital stock or rights to acquire such capital stock, (iii) the purchase of fractional interests in shares of M&I's capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged or (iv) dividends and distributions made on M&I's capital stock or rights to acquire such capital stock with M&I's capital stock or rights to acquire such capital stock) or make guarantee payments with respect to the foregoing and (b) M&I shall not make any payment of interest, principal or premium if any, on or repay, repurchase or redeem any debt securities issued by M&I that rank pari passu with or junior to the Subordinated Debt Securities. Prior to the termination of any such Extension Period, M&I may further extend the interest payment period; provided that each such Extension Period, together with all such previous and further extensions thereof, may not exceed 10 consecutive semiannual periods or extend beyond the maturity of the Subordinated Debt Securities. Upon the termination of any Extension Period and the payment of all amounts then due, M&I may commence a new Extension Period, subject to the terms set forth herein. See "Description of the Capital Securities" and "Description of the Subordinated Debt Securities." During each Extension Period, if any, each holder of Capital Securities will continue to accrue income (as original issue discount ("OID")) in respect of the deferred interest (see "United States Federal Income Taxation") allocable to its Capital Securities for United States federal income tax purposes, which will be allocated but not distributed. In such event, each holder of Capital Securities will recognize income for United States federal income tax purposes in advance of the receipt of cash, and will not receive cash related to such income from the Trust if such holder disposes of its Capital Securities prior to the record date for payment of such deferred interest. See "United States Federal Income Taxation." M&I has no current intention of exercising its right to defer payments of interest on the Subordinated Debt Securities. However, should M&I determine to exercise such right in the future, the market price of the Capital Securities is likely to be affected. A holder that disposes of its Capital Securities during an Extension Period, therefore, might not receive the same return on its investment as a holder that continues to hold its Capital Securities. In addition, as a result of the existence of M&I's right to defer interest payments, the market price of the Capital Securities (which represent undivided beneficial interests in the Subordinated Debt Securities) may be more volatile than other securities on which OID accrues that do not have such rights. 18 PROPOSED TAX LEGISLATION On February 6, 1997, President Clinton proposed certain tax law changes as a part of his 1998 budget plan that would, among other things, generally deny corporate issuers a deduction for interest in respect of certain debt obligations having a maximum term of more than 15 years and which are not shown as indebtedness on the separate balance sheet of the issuer (the "Proposed Legislation"). This provision would apply to instruments issued on or after the date of first committee action. There can be no assurance, however, that the effective date proposed will not be altered to a retroactive date if the Proposed Legislation is enacted, or that other legislation enacted after the date hereof will not otherwise adversely affect the ability of the Company to deduct the interest payable on the Subordinated Debt Securities. Accordingly, there can be no assurance that a Tax Event will not occur. It is expected that if the Proposed Legislation were to be enacted, such legislation would not apply to the Subordinated Debt Securities. See "--Redemption," "Description of the Subordinated Debt Securities--Proposed Tax Legislation." EXCHANGE OF CAPITAL SECURITIES FOR SUBORDINATED DEBT SECURITIES; TAX EVENT REDEMPTION The Company, as the holder of all of the outstanding Common Securities of the Trust, has the right at any time to dissolve the Trust (including but not limited to the occurrence of a Tax Event) and, after satisfaction of liabilities to creditors of the Trust, cause the Subordinated Debt Securities to be distributed to the holders to the Trust Securities on a pro rata basis in accordance with the aggregate stated liquidation amount thereof, in liquidation of the Trust. See "Description of the Capital Securities-- Liquidation Distribution Upon Dissolution." Upon the occurrence of a Tax Event, in certain circumstances described herein, the Company will have the right to redeem the Subordinated Debt Securities, in whole or in part, in which event the Trust will redeem the Trust Securities on a pro rata basis to the same extent as such Subordinated Debt Securities are redeemed by the Company. See "Description of the Capital Securities--Tax Event Redemption." The exercise of such rights is subject to M&I having received prior approval to do so from the Federal Reserve if then required under applicable guidelines or policies of the Federal Reserve. Under current United States federal income tax law, a distribution of Subordinated Debt Securities upon the dissolution of the Trust would not be a taxable event to holders of the Capital Securities. Upon the occurrence of a Tax Event, however, a dissolution of the Trust in which holders of the Capital Securities receive cash would be a taxable event to such holders. See "United States Federal Income Taxation--US Holders--Receipt of Subordinated Debt Securities or Cash upon Liquidation of Trust." There can be no assurance as to the market prices for the Capital Securities or the Subordinated Debt Securities that may be distributed in exchange for Capital Securities if a dissolution or liquidation of the Trust were to occur. Accordingly, the Capital Securities that an investor may purchase, whether in the secondary market or otherwise, or the Subordinated Debt Securities that a holder of Capital Securities may receive on dissolution and liquidation of the Trust, may trade at a discount to the price paid to purchase the Capital Securities. Because the ability of the Trust to pay amounts due on the Capital Securities is wholly dependent upon M&I's making payments on the Subordinated Debt Securities as and when required, and because holders of Capital Securities may receive Subordinated Debt Securities upon liquidation of the Trust, prospective purchasers of Capital Securities are also making an investment decision with regard to the Subordinated Debt Securities and should carefully review all the information regarding the Subordinated Debt Securities contained herein and evaluate the credit risk of M&I. See "Description of the Capital Securities" and "Description of the Subordinated Debt Securities." CONSEQUENCES OF HIGHLY LEVERAGED TRANSACTION The Indenture does not contain any provisions that afford holders of the Subordinated Debt Securities protection in the event of a highly leveraged transaction, including a change of control, or 19 other similar transactions involving M&I that may adversely affect such holders. See "Description of the Subordinated Debt Securities." LIMITED VOTING RIGHTS Holders of Capital Securities will have limited voting rights and will not be entitled to vote to appoint, remove or replace any M&I Trustee (as defined herein), or to increase or decrease the number of M&I Trustees. Such voting rights with respect to the M&I Trustees are vested exclusively in the holder of the Common Securities which will be M&I. See "Description of the Capital Securities." TRADING PRICE The Capital Securities are expected to trade at a price per Capital Security plus accrued and unpaid distributions, if any to the date of settlement. Because the Capital Securities pay distributions at a fixed rate based upon the fixed interest rate payable on the Subordinated Debt Securities, the trading price of the Capital Securities may decline if interest rates rise. CONSEQUENCES OF A FAILURE TO EXCHANGE OLD CAPITAL SECURITIES The Old Capital Securities have not been registered under the Securities Act or any state securities laws and therefore may not be offered, sold or otherwise transferred except in compliance with the registration requirements of the Securities Act and any other applicable securities laws, or pursuant to an exemption therefrom or in a transaction not subject thereto, and in each case in compliance with certain other conditions and restrictions. Old Capital Securities which remain outstanding after consummation of the Exchange Offer will continue to bear a legend reflecting such restrictions on transfer. In addition, upon consummation of the Exchange Offer, holders of Old Capital Securities which remain outstanding will not be entitled to any rights to have such Old Capital Securities registered under the Securities Act or to any similar rights under the Registration Rights Agreement. M&I and the Trust do not intend to register under the Securities Act any Old Capital Securities which remain outstanding after consummation of the Exchange Offer. To the extent that Old Capital Securities are tendered and accepted in the Exchange Offer, any trading market for Old Capital Securities which remain outstanding after the Exchange Offer could be adversely affected. The New Capital Securities and any Old Capital Securities which remain outstanding after consummation of the Exchange Offer will constitute a single series of Capital Securities under the Declaration and, accordingly, will vote together as a single class for purposes of determining whether holders of the requisite percentage in outstanding Liquidation Amount thereof have taken certain actions or exercised certain rights under the Declaration. The Old Capital Securities provide that, if the Exchange Offer is not consummated within 180 days of the original issuance of the Old Capital Securities, the Distribution rate borne by the Old Capital Securities will increase by 0.25% per annum commencing on the 181st day after the original issuance of the Old Capital Securities, until the Exchange Offer is consummated. Following consummation of the Exchange Offer, the Old Capital Securities will not be entitled to any increase in the Distribution rate thereon. The New Capital Securities will not be entitled to any such increase in the interest rate thereon. ABSENCE OF PUBLIC MARKET The Old Capital Securities were issued to, and the Company believes are currently owned by, a relatively small number of beneficial owners. The Old Capital Securities have not been registered 20 under the Securities Act and will continue to be subject to restrictions on transferability to the extent that they are not exchanged for the New Capital Securities. Although the New Capital Securities will generally be permitted to be resold or otherwise transferred by the holders (who are not affiliates of M&I or the Trust) without compliance with the registration requirements under the Securities Act, they will constitute a new issue of securities with no established trading market. Capital Securities may be transferred by the holders thereof only in blocks having a Liquidation Amount of not less than $100,000 (100 Capital Securities). Accordingly, no assurance can be given that an active public or other market will develop for the New Capital Securities or the Old Capital Securities. If an active public market does not develop, the market price and liquidity of the New Capital Securities may be adversely affected. If a public trading market develops for the New Capital Securities, future trading prices of such securities will depend on many factors, including, among other things, prevailing interest rates, results of operations and the market for similar securities. Depending on prevailing interest rates, the market for similar securities and other factors, including the financial condition of M&I, the New Capital Securities may trade at a discount. The Company and the Trust do not intend to apply for listing of the Capital Securities issued in the Exchange Offer as debt securities on a securities exchange or for quotation through the National Association of Securities Dealers Automated Quotation System. However, if the Subordinated Debt Securities are distributed to the holders of the Capital Securities, and the Capital Securities are then listed on such exchange or for such quotation, the Company will use its best efforts to have the Subordinated Debt Securites listed on such exchange or for such quotation as the Capital Securities are then listed. Notwithstanding the registration of the New Capital Securities in the Exchange Offer, holders who are "affiliates" (as defined under Rule 405 of the Securities Act) of M&I or the Trust may publicly offer for sale or resell the New Notes only in compliance with the provisions of Rule 144 under the Securities Act or any other available exemptions under the Securities Act. Each broker-dealer that receives New Capital Securities for its own account in exchange for Old Capital Securities, where such Old Capital Securities were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such New Capital Securities. See "Plan of Distribution." EXCHANGE OFFER PROCEDURES Issuance of the New Capital Securities in exchange for Old Capital Securities pursuant to the Exchange Offer will be made only after a timely receipt by the Exchange Agent of (i) such Old Capital Securities or a book- entry confirmation of a book-entry transfer of the Old Capital Securities into the Exchange Agent's account at The Depository Trust Company ("DTC"), including an Agent's Message if the tendering holder has not delivered a Letter of Transmittal, the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees or (in the case of a book-entry transfer) an Agent's Message in lieu of the Letter of Transmittal, and (iii) any other documents required by the Letter of Transmittal. The term "Agent's Message" means a message, transmitted by DTC to and received by the Exchange Agent and forming part of a book-entry confirmation, which states that such participant has received and agrees to be bound by the Letter of Transmittal and that the Trust and M&I may enforce such Letter of Transmittal against such participant. Therefore, holders of the Old Capital Securities desiring to tender such Old Capital Securities in exchange for New Capital Securities should allow sufficient time to ensure timely delivery. The Company, the Trust and the Exchange Agent are under no duty to give notification of defects or irregularities with respect to the tenders of Old Capital Securities for exchange. 21 CAPITALIZATION The following table sets forth the consolidated capitalization of M&I and its subsidiaries at December 31, 1996, and "as adjusted" to reflect, on a pro forma basis as of such date, the application of the estimated net proceeds from the sale of the Old Capital Securities. No adjustment has been made for any possible redemption of any common stock of M&I. See "Use of Proceeds." The table should be read in conjunction with M&I's consolidated financial statements and notes thereto incorporated herein by reference. See "Available Information."
DECEMBER 31, 1996 ---------------------- AS ACTUAL ADJUSTED ---------- ---------- (IN THOUSANDS) Long-Term Debt...................................... $ 336,096 $ 137,065 Company-Obligated Mandatorily Redeemable Capital Trust Pass-through Securities of Subsidiary Trust holding solely a Company Guaranteed Related Subordinated Debt(1)............................... -- 200,000 Shareholders' Equity Series A Convertible Preferred Stock, $1.00 Par Value, 2,000,000 Shares Authorized, 517,129 Shares Issued; Liquidation Preference Of $51,713.......... 517 517 Common Stock, $1.00 Par Value, 160,000,000 Shares Authorized, 99,494,335 Shares Issued............... 99,494 99,494 Additional Paid-In Capital.......................... 204,135 204,135 Retained Earnings................................... 1,209,167 1,209,167 Treasury Stock, At Cost (10,910,798 Shares)......... (279,143) (279,143) Deferred Compensation............................... (825) (825) Net Unrealized Gains On Securities Available For Sale, Net of Related Income Taxes.................. 27,865 27,865 ---------- ---------- Total Shareholders' Equity........................ 1,261,210 1,261,210 ---------- ---------- Total Capitalization............................ $1,597,306 $1,598,275 ========== ==========
- -------- (1) The Company-Obligated Mandatorily Redeemable Capital Trust Pass-through Securities of Subsidiary Trust holding solely a Company Guaranteed Related Subordinated Debt reflects the Capital Securities. The Trust is a wholly owned subsidiary of the Company and holds the Subordinated Debt Securities as its sole asset. The SEC staff will accept the classification of such securities in the Company's consolidated financial statements as debt. RATIO OF EARNINGS TO FIXED CHARGES The following table sets forth the ratio of earnings to fixed charges for M&I for the periods indicated:
YEARS ENDED DECEMBER 31, ---------------------------- RATIO OF EARNINGS TO FIXED CHARGES(1) 1996 1995 1994 1993 1992 - ------------------------------------- ---- ---- ---- ---- ---- Excluding Interest on Deposits.................... 3.76x 3.76x 3.18x 6.52x 5.57x Including Interest on Deposits.................... 1.66x 1.68x 1.50x 1.83x 1.60x
- -------- (1) The ratio of earnings to fixed charges has been computed by dividing earnings before income taxes and fixed charges by fixed charges. Fixed charges, excluding interest on deposits, consists of interest on indebtedness and one-third of rental expense (which is deemed representative of the interest factor). Fixed charges, including interest on deposits, consist of both the foregoing items plus interest on deposits. 22 ACCOUNTING TREATMENT The financial statements of the Trust will be consolidated into M&I's consolidated financial statements with the Capital Securities shown as "Company-Obligated Mandatorily Redeemable Capital Trust Pass-through Securities of Subsidiary Trust holding solely a Company Guaranteed Related Subordinated Debt" or its equivalent. The Trust is a wholly owned subsidiary of the Company and holds the Subordinated Debt Securities as its sole asset. See "Capitalization." USE OF PROCEEDS Neither M&I nor the Trust will receive any cash proceeds from the issuance of the New Capital Securities offered hereby. In consideration for issuing the New Capital Securities in exchange for Old Capital Securities as described in this Prospectus, the Trust will receive Old Capital Securities in like Liquidation Amount. The Old Capital Securities surrendered in exchange for the New Capital Securities will be retired and canceled. The net proceeds to the Trust from the offering of the Old Capital Securities was approximately $199.0 million (before deducting expenses associated with the offering). All of the net proceeds from the sale of Capital Securities were invested by the Trust in the Old Subordinated Debt Securities. M&I's net proceeds from the sale of the Old Subordinated Debt Securities were added to the general funds of M&I and were and may be used for general corporate purposes, including, without limitation, funding the repurchase of shares of its common stock, reduction of indebtedness (including the refinancing of M&I's outstanding commercial paper), investments in or advances to subsidiaries and possible future acquisitions of bank and non-bank subsidiaries. THE TRUST The Trust is a statutory business trust created under Delaware law pursuant to (i) a separate declaration of trust (the "Original Declaration") executed by the Company, as sponsor for the Trust (the "Sponsor"), and the M&I Trustees (as defined herein) for the Trust and (ii) the filing of a certificate of trust for the Trust with the Delaware Secretary of State on December 2, 1996. The Original Declaration was amended and restated in its entirety pursuant to an Amended and Restated Declaration of Trust dated as of December 9, 1996 (the "Declaration") executed by the Sponsor and the M&I Trustees (as defined below). The Declaration has been qualified under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). The Trust exists for the exclusive purposes of (i) issuing the Trust Securities representing undivided beneficial interests in the assets of the Trust, (ii) investing the gross proceeds of such Trust Securities in the Subordinated Debt Securities, and (iii) engaging in only those other activities necessary or incidental thereto. All of the Common Securities of the Trust will be directly or indirectly owned by the Company. The Common Securities of the Trust rank pari passu, and payments will be made thereon pro rata, with the Capital Securities of the Trust except that upon an event of default under the Declaration in respect of the Trust, the rights of the holders of the Common Securities of the Trust to payment in respect of distributions and payments upon liquidation, redemption and otherwise will be subordinated to the rights of the holders of the Capital Securities of the Trust. The Company acquired Common Securities in an aggregate liquidation amount equal to 3% of the total capital of the Trust. The Trust has a term of approximately 55 years, but may earlier terminate as provided in the Declaration. The Trust's business and affairs will be conducted by the trustees (the "M&I Trustees") appointed by the Company, as the holder of all the Common Securities. The holder of the Common Securities of the Trust will be entitled to appoint, remove or replace any of, or increase or reduce the number of, the M&I Trustees of the Trust. The duties and obligations of the M&I Trustees of the Trust shall be governed by the Declaration of Trust. A majority of the M&I Trustees (the "Regular Trustees") of the Trust will be persons who are employees or officers of or affiliated with the Company. One M&I Trustee will be a financial institution that will be unaffiliated with the Company and will be eligible and act as property trustee and as indenture trustee pursuant to the terms set forth herein (the "Institutional Trustee"). 23 Pursuant to the Declaration, the number of M&I Trustees of the Trust is five. Three of the trustees of the Trust are Regular Trustees. The fourth trustee of the Trust is the Institutional Trustee. Initially, The Chase Manhattan Bank, a New York State banking corporation, is the Institutional Trustee until removed or replaced by the holder of the Common Securities of the Trust. The Chase Manhattan Bank is also trustee under the Guarantee. The fifth trustee of the Trust is required to be an entity that maintains its principal place of business in the State of Delaware (the "Delaware Trustee"). Chase Manhattan Bank Delaware, an affiliate of the Institutional Trustee, is the Delaware Trustee. See "Description of the Capital Securities--Voting Rights" herein. The Institutional Trustee holds title to the Subordinated Debt Securities for the benefit of the holders of the Trust Securities issued by the Trust, and the Institutional Trustee holds the power to exercise all rights, powers and privileges under the Indenture as the holder of the Subordinated Debt Securities. In addition, the Institutional Trustee maintains exclusive control of a separate segregated non-interest bearing trust account (the "Property Account") to hold all payments made in respect of the Subordinated Debt Securities for the benefit of the holders of the Trust Securities issued by the Trust. The Institutional Trustee will make payments of distributions and payments on liquidation, redemption and otherwise to the holders of record of the Trust Securities issued by the Trust out of funds from the Property Account of the Trust. The Company, as holder of all the Common Securities of the Trust, has the right, subject to the Trust Indenture Act with respect to the Institutional Trustee and Delaware law with respect to the Delaware Trustee, to appoint, remove or replace any M&I Trustee and to increase or decrease the number of M&I Trustees. The Company will pay all fees and expenses related to the Trust and the offering and sale of the Trust Securities of the Trust. See "Description of the Subordinated Debt Securities--Miscellaneous." The rights of the holders of the Capital Securities of the Trust, including economic rights, rights to information and voting rights, are set forth in the Declaration with respect to the Trust, the Delaware Business Trust Act, as amended (the "Trust Act"), and the Trust Indenture Act. See "Description of the Capital Securities." The principal place of business of the Trust is c/o Marshall & Ilsley Corporation, 770 North Water Street, Milwaukee, Wisconsin 53202, and its telephone number is (414) 765-7801. MARSHALL & ILSLEY CORPORATION Marshall & Ilsley Corporation ("M&I") is a registered bank holding company under the Bank Holding Company Act of 1956, as amended (the "BHCA"). As of December 31, 1996, M&I had consolidated total assets of approximately $14.8 billion and consolidated total deposits of approximately $11.0 billion, making M&I the second largest bank holding company headquartered in Wisconsin. The executive offices of M&I are located at 770 North Water Street, Milwaukee, Wisconsin 53202 (telephone number (414) 765-7801). M&I's principal assets are the stock of its bank and nonbank subsidiaries and the assets of its Data Services Division ("M&I Data Services"). M&I's subsidiaries include 29 commercial banks, one savings association and a number of companies engaged in businesses that the Federal Reserve Board has determined to be closely-related or incidental to the business of banking. M&I provides its subsidiaries with financial and managerial assistance in such areas as budgeting, tax planning, compliance assistance, asset and liability management, investment administration and portfolio planning, business development, advertising and human resources management. M&I's bank and savings association subsidiaries provide a full range of banking services to individuals, businesses and governments throughout Wisconsin and the Phoenix, Arizona metropolitan area. These subsidiaries offer retail, institutional, international, business and correspondent banking, investment and trust services through the operation of 226 banking offices in Wisconsin and 12 offices in Arizona. M&I Marshall & Ilsley Bank is M&I's largest bank subsidiary, with consolidated assets as of December 31, 1996 of approximately $4.8 billion. 24 M&I Data Services and three other nonbank subsidiaries are major suppliers of financial and data processing services and software to banking, financial and related organizations. M&I Data Services provides services and software to over 600 financial institution customers in the United States, as well as institutions in numerous foreign countries. On August 7, 1996, M&I acquired EastPoint Technology, Inc., a software development company located in Bedford, New Hampshire which specializes in client/server technology, for approximately $25.5 million in cash. M&I's nonbank subsidiaries operate a variety of bank- related businesses, including those providing investment management services, insurance services, trust services, equipment lease financing, commercial and residential mortgage banking, venture capital, brokerage services and financial advisory services. M&I Investment Management Corp. offers a full range of asset management services to M&I's trust company subsidiaries, the Marshall Funds and other individual, business and institutional customers. M&I's trust company subsidiaries provide trust and employee benefit plan services to customers in Wisconsin, Arizona and Florida. M&I First National Leasing Corp. leases a variety of equipment and machinery to large and small businesses. M&I Mortgage Corp. originates, purchases, sells and services residential mortgages. The Richter-Schroeder Company originates and services long-term commercial real estate loans for institutional investors. M&I Capital Markets Group, Inc. provides venture capital, financial advisory and strategic planning services to customers, including assistance in connection with the private placement of securities, raising funds for expansion, leveraged buy-outs, divestitures, mergers and acquisitions and small business investment company transactions. M&I Brokerage Services, Inc., a broker-dealer registered with the National Association of Securities Dealers, Inc. (the "NASD") and the Securities and Exchange Commission (the "SEC"), provides brokerage and other investment related services to a variety of retail and commercial customers. As a registered bank holding company and savings and loan holding company, M&I is subject to regulation and examination by the Federal Reserve under the BHCA. M&I's state bank subsidiaries and savings association are subject to regulation and examination by the Wisconsin Department of Financial Institutions or in the case of M&I Thunderbird Bank, the Arizona State Banking Department, and the Federal Reserve (for state banks). M&I's national bank subsidiary is subject to regulation and examination by the Office of the Comptroller of the Currency. In addition, all of M&I's bank subsidiaries are subject to examination by the FDIC. Under Federal Reserve policy, M&I is expected to act as a source of financial strength to each of its bank subsidiaries and to commit resources to support each bank subsidiary in circumstances when it might not do so absent such requirements. In addition, the bank subsidiaries of M&I, are subject to certain restrictions imposed by federal law on any extensions of credit to, and certain other transactions with, M&I and certain other affiliates, and on investments in stock or other securities thereof. In addition, payment of dividends to M&I by the subsidiary banks is subject to ongoing review of banking regulators and is subject to various statutory limitations and in certain circumstances requires approval by banking regulatory authorities. Furthermore, there are numerous other federal and state laws and regulations which regulate the activities of M&I and its bank subsidiaries, including requirements and limitations relating to capital and reserve requirements, permissible investments and lines of business, transactions with affiliates, mergers and acquisitions, issuances of securities, extensions of credit and branch banking. The federal regulatory agencies have implemented provisions of the Federal Deposit Insurance Corporation Improvement Act of 1991 by creating standards for when they will take prompt corrective action if a depository institution fails to maintain a certain capital level within specified categories ranging from "critically undercapitalized" to "well capitalized." Information regarding capital requirements for bank holding companies and tables reflecting M&I's regulatory capital position at December 31, 1996 can be found in Note 13 of the Notes to the Consolidated Financial Statements contained in Item 8 of M&I's Form 10-K for the fiscal year ended December 31, 1996, which is incorporated herein by reference. For additional information regarding M&I, see the documents incorporated by reference herein as described in "Incorporation of Certain Documents by Reference." 25 THE EXCHANGE OFFER PURPOSE AND EFFECT OF THE EXCHANGE OFFER In connection with the sale of the Old Capital Securities, M&I and the Trust entered into the Registration Rights Agreement with the Initial Purchasers, pursuant to which M&I and the Trust agreed to file and to use their best efforts to cause to become effective with the Commission a registration statement with respect to the exchange of the Old Capital Securities for capital securities with terms identical in all material respects to the terms of the Old Capital Securities. A copy of the Registration Rights Agreement has been filed as an exhibit to the Registration Statement of which this Prospectus is a part. The Exchange Offer is being made to satisfy the contractual obligations of M&I and the Trust under the Registration Rights Agreement. The form and terms of the New Capital Securities are the same as the form and terms of the Old Capital Securities except that the New Capital Securities have been registered under the Securities Act and therefore will not be subject to certain restrictions on transfer applicable to the Old Capital Securities and will not provide for any increase in the Distribution rate thereon. In that regard, the Old Capital Securities provide, among other things, that, if the Exchange Offer is not consummated by June 7, 1997, the Distribution rate borne by the Old Capital Securities commencing on June 8, 1997, will increase by 0.25% per annum until the Exchange Offer is consummated. Upon consummation of the Exchange Offer, holders of Old Capital Securities will not be entitled to any increase in the Distribution rate thereon or any further registration rights under the Registration Rights Agreement, except under limited circumstances. See "Risk Factors--Consequences of a Failure to Exchange Old Capital Securities." The Exchange Offer is not being made to, nor will the Company accept tenders for exchange from, holders of Old Capital Securities in any jurisdiction in which the Exchange Offer or the acceptance thereof would not be in compliance with the securities or blue sky laws of such jurisdiction. Unless the context requires otherwise, the term "holder" with respect to the Exchange Offer means any person in whose name the Old Capital Securities are registered on the books of the Company or any other person who has obtained a properly completed bond power from the registered holder, or any participant in DTC whose name appears on a security position listing as a holder of Old Capital Securities (which, for purposes of the Exchange Offer, include beneficial interests in the Old Capital Securities, held by direct or indirect participants in DTC and Old Capital Securities held in definitive form). Pursuant to the Exchange Offer, M&I will exchange as soon as practicable after the date hereof the Old Guarantee for the New Guarantee and all of the Old Subordinated Debt Securities, of which $206,186,000 aggregate principal amount is outstanding, for like aggregate principal of the New Subordinated Debt Securities. The New Guarantee and New Subordinated Debt Securities have been registered under the Securities Act. TERMS OF THE EXCHANGE The Company hereby offers, upon the terms and subject to the conditions set forth in this Prospectus and in the accompanying Letter of Transmittal, to exchange up to $200,000,000 aggregate Liquidation Amount of New Capital Securities for a like aggregate Liquidation Amount of Old Capital Securities properly tendered on or prior to the Expiration Date (as defined below) and not properly withdrawn in accordance with the procedures described below. The Company will issue, promptly after the Expiration Date, an aggregate Liquidation Amount of up to $200,000,000 of New Capital Securities in exchange for a like principal amount of outstanding Old Capital Securities tendered and accepted in connection with the Exchange Offer. Holders may tender their Old Capital Securities in whole or in part in a Liquidation Amount of not less than $100,000 or any integral multiple of $1,000 in excess thereof. 26 The Exchange Offer is not conditioned upon any minimum Liquidation Amount of Old Capital Securities being tendered. As of the date of this Prospectus, $200,000,000 aggregate Liquidation Amount of the Old Capital Securities is outstanding. Holders of Old Capital Securities do not have any appraisal or dissenters' rights in connection with the Exchange Offer. Old Capital Securities which are not tendered for or are tendered but not accepted in connection with the Exchange Offer will remain outstanding and not be entitled to any further registration rights under the Registration Rights Agreement, except under limited circumstances. See "Risk Factors--Consequences of a Failure to Exchange Old Capital Securities". If any tendered Old Capital Securities are not accepted for exchange because of an invalid tender, the occurrence of certain other events set forth herein or otherwise, certificates for any such unaccepted Old Capital Securities will be returned, without expense, to the tendering holder thereof promptly after the Expiration Date. Holders who tender Old Capital Securities in connection with the Exchange Offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the Letter of Transmittal, transfer taxes with respect to the exchange of Old Capital Securities in connection with the Exchange Offer. M&I will pay all charges and expenses, other than certain applicable taxes described below, in connection with the Exchange Offer. See "--Fees and Expenses." NEITHER THE BOARD OF DIRECTORS OF M&I NOR THE TRUSTEES OF THE TRUST MAKES ANY RECOMMENDATION TO HOLDERS OF OLD CAPITAL SECURITIES AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL OR ANY PORTION OF THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER. IN ADDITION, NO ONE HAS BEEN AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF OLD CAPITAL SECURITIES MUST MAKE THEIR OWN DECISION WHETHER TO TENDER PURSUANT TO THE EXCHANGE OFFER AND, IF SO, THE AGGREGATE AMOUNT OF OLD CAPITAL SECURITIES TO TENDER AFTER READING THIS PROSPECTUS AND THE LETTER OF TRANSMITTAL AND CONSULTING WITH THEIR ADVISERS, IF ANY, BASED ON THEIR FINANCIAL POSITION AND REQUIREMENTS. EXPIRATION DATE; EXTENSIONS, AMENDMENTS The term "Expiration Date" means 5:00 p.m., New York City time, on April 10, 1997 unless the Exchange Offer is extended by M&I and the Trust (in which case the term "Expiration Date" shall mean the latest date and time to which the Exchange Offer is extended). M&I and the Trust expressly reserves the right in their sole and absolute discretion, subject to applicable law, at any time and from time to time, (i) to delay the acceptance of the Old Capital Securities for exchange, (ii) to terminate the Exchange Offer (whether or not any Old Capital Securities have theretofore been accepted for exchange) if M&I and the Trust determine, in their sole and absolute discretion, that any of the events or conditions referred to under "--Conditions to the Exchange Offer" has occurred or exists or has not been satisfied, (iii) to extend the Expiration Date of the Exchange Offer and retain all Old Capital Securities tendered pursuant to the Exchange Offer, subject, however, to the right of holders of Old Capital Securities to withdraw their tendered Old Capital Securities as described under "-- Withdrawal Rights", and (iv) to waive any condition or otherwise amend the terms of the Exchange Offer in any respect. If the Exchange Offer is amended in a manner 27 determined by M&I and the Trust to constitute a material change, or if M&I and the Trust waives a material condition of the Exchange Offer, M&I and the Trust will promptly disclose such amendment by means of a prospectus supplement that will be distributed to the registered holders of the Old Capital Securities, and M&I and the Trust will extend the Exchange Offer to the extent required by Rule 14e-1 under the Exchange Act. Any such delay in acceptance, extension, termination or amendment will be followed promptly by oral or written notice thereof to the Exchange Agent (any such oral notice to be promptly confirmed in writing) and by making a public announcement thereof, and such announcement in the case of an extension will be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. Without limiting the manner in which M&I and the Trust may choose to make any public announcement and subject to applicable laws, M&I and the Trust shall have no obligation to publish, advertise or otherwise communicate any such public announcement other than by issuing a release to an appropriate news agency. ACCEPTANCE FOR EXCHANGE AND ISSUANCE OF NEW CAPITAL SECURITIES Upon the terms and subject to the conditions of the Exchange Offer, the Trust will exchange, and will issue to the Exchange Agent, New Capital Securities for Old Capital Securities validly tendered and not withdrawn (pursuant to the withdrawal rights described under "--Withdrawal Rights") promptly after the Expiration Date. In all cases, delivery of New Capital Securities in exchange for Old Capital Securities tendered and accepted for exchange pursuant to the Exchange Offer will be made only after timely receipt by the Exchange Agent of (i) Old Capital Securities or a book-entry confirmation of a book-entry transfer of Old Capital Securities into the Exchange Agent's account at DTC, including an Agent's Message if the tendering holder has not delivered a Letter of Transmittal, (ii) the Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees, or (in the case of a book-entry tender) an Agent's Message in lieu of the Letter of Transmittal, and (iii) any other documents required by the Letter of Transmittal. The term "book-entry confirmation" means a timely confirmation of a book- entry transfer of Old Capital Securities into the Exchange Agent's account at DTC. Subject to the terms and conditions of the Exchange Offer, the Trust will be deemed to have accepted for exchange, and thereby exchanged, Old Capital Securities validly tendered and not withdrawn as, if and when the Trust gives oral or written notice to the Exchange Agent (any such oral notice to be promptly confirmed in writing) of the Trust's acceptance of such Old Capital Securities for exchange pursuant to the Exchange Offer. The Exchange Agent will act as agent for the Trust for the purpose of receiving tenders of Old Capital Securities, Letters of Transmittal and related documents, and as agent for tendering holders for the purpose of receiving Old Capital Securities, Letters of Transmittal and related documents and transmitting New Capital Securities to validly tendered holders. Such exchange will be made promptly after the Expiration Date. If for any reason whatsoever, acceptance for exchange or the exchange of any Old Capital Securities tendered pursuant to the Exchange Offer is delayed (whether before or after the Trust's acceptance for exchange of Old Capital Securities) or the Trust extends the Exchange Offer or is unable to accept for exchange or exchange Old Capital Securities tendered pursuant to the Exchange Offer, then, without prejudice to the Trust's rights set forth herein, the Exchange Agent may, nevertheless, on behalf of the Trust and subject to Rule 14e-1(c) under the Exchange Act, retain tendered Old Capital Securities and such Old Capital Securities may not be withdrawn except to the extent tendering holders are entitled to withdrawal rights as described under "--Withdrawal Rights". 28 Pursuant to the Letter of Transmittal or Agent's Message in lieu thereof, a holder of Old Capital Securities will warrant and agree in the Letter of Transmittal that it has full power and authority to tender, exchange, sell, assign and transfer Old Capital Securities, that the Trust will acquire good, marketable and unencumbered title to the tendered Old Capital Securities, free and clear of all liens, restrictions, charges and encumbrances, and the Old Capital Securities tendered for exchange are not subject to any adverse claims or proxies. The holder also will warrant and agree that it will, upon request, execute and deliver any additional documents deemed by the Trust or the Exchange Agent to be necessary or desirable to complete the exchange, sale, assignment, and transfer of the Old Capital Securities tendered pursuant to the Exchange Offer. PROCEDURES FOR TENDERING OLD CAPITAL SECURITIES Valid Tender. Except as set forth below, in order for Old Capital Securities to be validly tendered pursuant to the Exchange Offer, either (i) a properly completed and duly executed Letter of Transmittal (or facsimile thereof), with any required signature guarantees, or (in the case of a book-entry tender) an Agent's Message in lieu of the Letter of Transmittal, and any other required documents, must be received by the Exchange Agent at the address set forth under "--Exchange Agent," on or prior to the Expiration Date and (a) tendered Old Capital Securities must be received by the Exchange Agent, or (b) such Old Capital Securities must be tendered pursuant to the procedures for book-entry transfer set forth below and a book-entry confirmation including an Agent's Message if the tendering holder has not delivered a Letter of Transmittal, must be received by the Exchange Agent, in each case on or prior to the Expiration Date, or (ii) the guaranteed delivery procedures set forth below must be complied with. If less than all of the Old Capital Securities are tendered, a tendering holder should fill in the amount of Old Capital Securities being tendered in the appropriate box on the Letter of Transmittal or so indicate in an Agent's Message in lieu of the Letter of Transmittal. The entire amount of Old Capital Securities delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, IS AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL, RETURN RECEIPT REQUESTED, PROPERLY INSURED, OR AN OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. Book-Entry Transfer. The Exchange Agent will establish an account with respect to the Old Capital Securities at DTC for purposes of the Exchange Offer within two business days after the date of this Prospectus. Any financial institution that is a participant in DTC's book-entry transfer facility system may make a book-entry delivery of the Old Capital Securities by causing DTC to transfer such Old Capital Securities into the Exchange Agent's account at DTC in accordance with DTC's procedures for transfers. However, although delivery of Old Capital Securities may be effected through book-entry transfer into the Exchange Agent's account at DTC, the Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees, or an Agent's Message in lieu of the Letter of Transmittal, and any other required documents, must in any case be delivered to and received by the Exchange Agent at its address set forth under "--Exchange Agent" on or prior to the Expiration Date, or the guaranteed delivery procedure set forth below must be complied with. DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT. Signature Guarantees. Certificates for the Old Capital Securities need not be endorsed and signature guarantees on the Letter of Transmittal are unnecessary unless (a) a certificate for the Old Capital Securities is registered in a name other than that of the person surrendering the certificate or 29 (b) such registered holder completes the box entitled "Special Issuance Instructions" or "Special Delivery Instructions" in the Letter of Transmittal. In the case of (a) or (b) above, such certificates for Old Capital Securities must be duly endorsed or accompanied by a properly executed bond power, with the endorsement or signature on the bond power and on the Letter of Transmittal guaranteed by a firm or other entity identified in Rule 17Ad-15 under the Exchange Act as an "eligible guarantor institution," including (as such terms are defined therein): (i) a bank; (ii) a broker, dealer, municipal securities broker or dealer or government securities broker or dealer; (iii) a credit union; (iv) a national securities exchange, registered securities association or clearing agency; or (v) a savings association that is a participant in a Securities Transfer Association (an "Eligible Institution"), unless surrendered on behalf of such Eligible Institution. See Instruction 1 to the Letter of Transmittal. Guaranteed Delivery. If a holder desires to tender Old Capital Securities pursuant to the Exchange Offer and the certificates for such Old Capital Securities are not immediately available or time will not permit all required documents to reach the Exchange Agent on or before the Expiration Date, or the procedures for book-entry transfer cannot be completed on a timely basis, such Old Capital Securities may nevertheless be tendered, provided that all of the following guaranteed delivery procedures are complied with: (i) such tenders are made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form accompanying the Letter of Transmittal, is received by the Exchange Agent, as provided below, on or prior to Expiration Date; and (iii) the certificates (or book-entry confirmation) representing all tendered Old Capital Securities, in proper form for transfer, together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof or Agent's Message in lieu thereof), with any required signature guarantees and any other documents required by the Letter of Transmittal, are received by the Exchange Agent within three New York Stock Exchange trading days after the date of execution of such Notice of Guaranteed Delivery. The Notice of Guaranteed Delivery may be delivered by hand, or transmitted by facsimile or mail to the Exchange Agent and must include a guarantee by an Eligible Institution in the form set forth in such notice. Notwithstanding any other provision hereof, the delivery of New Capital Securities in exchange for Old Capital Securities tendered and accepted for exchange pursuant to the Exchange Offer will in all cases be made only after timely receipt by the Exchange Agent of Old Capital Securities, or of a book- entry confirmation with respect to such Old Capital Securities, and a properly completed and duly executed Letter of Transmittal (or facsimile thereof or Agent's Message in lieu thereof), together with any required signature guarantees and any other documents required by the Letter of Transmittal. Accordingly, the delivery of New Capital Securities might not be made to all tendering holders at the same time, and will depend upon when Old Capital Securities, book-entry confirmations with respect to Old Capital Securities and other required documents are received by the Exchange Agent. The Trust's acceptance for exchange of Old Capital Securities tendered pursuant to any of the procedures described above will constitute a binding agreement between the tendering holder and the Trust upon the terms and subject to the conditions of the Exchange Offer. Determination of Validity. All questions as to the form of documents, validity, eligibility (including time of receipt) and acceptance for exchange of any tendered Old Capital Securities will be determined by the Trust, in its sole discretion, whose determination shall be final and binding on all parties. The Trust reserves the absolute right, in its sole and absolute discretion, to reject any and all tenders determined by it not to be in proper form or the acceptance of which, or exchange for, may, in the view of counsel to the Trust, be unlawful. The Trust also reserves the absolute right, subject to applicable law, to waive any of the conditions of the Exchange Offer as set forth under "--Conditions to the Exchange Offer" or any condition or irregularity in any tender of Old Capital Securities of any particular holder whether or not similar conditions or irregularities are waived in the case of other holders. 30 The Trust's interpretation of the terms and conditions of the Exchange Offer (including the Letter of Transmittal and the instructions thereto) will be final and binding. No tender of Old Capital Securities will be deemed to have been validly made until all irregularities with respect to such tender have been cured or waived. Neither the Trust, any affiliates or assigns of the Trust, the Exchange Agent or any other person shall be under any duty to give any notification of any irregularities in tenders or incur any liability for failure to give any such notification. If any Letter of Transmittal, endorsement, bond power, power of attorney, or any other document required by the Letter of Transmittal is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and unless waived by the Trust, evidence satisfactory to the Trust, in its sole discretion, of such person's authority to so act must be submitted. A beneficial owner of Old Capital Securities that are held by or registered in the name of a broker, dealer, commercial bank, trust company or other nominee or custodian is urged to contact such entity promptly if such beneficial holder wishes to participate in the Exchange Offer. RESALES OF NEW CAPITAL SECURITIES Based on interpretations by the staff of the Commission, as set forth in no- action letters issued to third parties, the Company and the Trust believe that holders of Old Capital Securities (other than any holder that is an "affiliate" of the Company or the Trust as defined under Rule 405 of the Securities Act) who exchange their Old Capital Securities for New Capital Securities pursuant to the Exchange Offer may offer such New Capital Securities for resale, resell such New Capital Securities and otherwise transfer such New Capital Securities without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such New Capital Securities are acquired in the ordinary course of such holders' business and such holders are not engaged in, and do not intend to engage in, a distribution of such New Capital Securities and have no arrangement or understanding with any person to participate in the distribution of such New Capital Securities. However, the staff of the Commission has not considered the Exchange Offer in the context of a no-action letter, and there can be no assurance that the staff of the Commission would make a similar determination with respect to the Exchange Offer. Each broker-dealer that receives New Capital Securities for its own account in exchange for Old Capital Securities, where such Old Capital Securities were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such New Capital Securities. See "Plan of Distribution." WITHDRAWAL RIGHTS Except as otherwise provided herein, tenders of Old Capital Securities may be withdrawn at any time on or prior to the Expiration Date. In order for a withdrawal to be effective a written, telegraphic or facsimile transmission of such notice of withdrawal must be timely received by the Exchange Agent at one of its addresses set forth under "Exchange Agent" on or prior to the Expiration Date. Any such notice of withdrawal must specify the name of the person who tendered the Old Capital Securities to be withdrawn, the aggregate principal amount of Old Capital Securities to be withdrawn, and (if certificates for such Old Capital Securities have been tendered) the name of the registered holder of the Old Capital Securities as set forth on the Old Capital Securities, if different from that of the person who tendered such Old Capital Securities. If Old Capital Securities have been delivered or otherwise identified to the Exchange Agent, then prior to the physical release of such Old Capital Securities, the tendering holder must submit the serial numbers shown on the particular Old Capital Securities to be withdrawn and the signature on the notice of withdrawal must be guaranteed by an Eligible Institution, except in the case of Old Capital 31 Securities tendered for the account of an Eligible Institution. If Old Capital Securities have been tendered pursuant to the procedures for book-entry transfer set forth in "Procedures for Tendering Old Capital Securities," the notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawal of Old Capital Securities, in which case a notice of withdrawal will be effective if delivered to the Exchange Agent by written, telegraphic or facsimile transmission. Withdrawals of tenders of Old Capital Securities may not be rescinded. Old Capital Securities properly withdrawn will not be deemed validly tendered for purposes of the Exchange Offer, but may be retendered at any subsequent time on or prior to the Expiration Date by following any of the procedures described above under "Procedures for Tendering Old Capital Securities." All questions as to the validity, form and eligibility (including time of receipt) of such withdrawal notices will be determined by the Trust, in its sole discretion, whose determination shall be final and binding on all parties. Neither the Trust, any affiliates or assigns of the Trust, the Exchange Agent or any other person shall be under any duty to give any notification of any irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. Any Old Capital Securities which have been tendered but which are withdrawn will be returned to the holder thereof promptly after withdrawal. DISTRIBUTIONS ON THE NEW CAPITAL SECURITIES Holders of Old Capital Securities whose Old Capital Securities are accepted for exchange will not receive accumulated Distributions on such Old Capital Securities for any period from and after the last Distribution Date with respect to such Old Capital Securities prior to the original issue date of the New Capital Securities or, if no such Distributions have been made, will not receive any accumulated Distributions on such Old Capital Securities, and will be deemed to have waived the right to receive any Distributions on such Old Capital Securities accumulated from and after such Distribution Date or, if no such Distributions have been made, from and after December 9, 1996. CONDITIONS TO THE EXCHANGE OFFER Notwithstanding any other provisions of the Exchange Offer, or any extension of the Exchange Offer, M&I and the Trust will not be required to accept for exchange, or to exchange, any Old Capital Securities for any New Capital Securities, and, as described below, may terminate the Exchange Offer (whether or not any Old Capital Securities have theretofore been accepted for exchange) or may waive any conditions to or amend the Exchange Offer, if any of the following conditions have occurred or exists or have not been satisfied: (a) there shall occur a change in the current interpretation by the staff of the Commission which permits the New Capital Securities issued pursuant to the Exchange Offer in exchange for Old Capital Securities to be offered for resale, resold and otherwise transferred by holders thereof (other than broker-dealers and any such holder which is an "affiliate" of M&I or the Trust within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act provided that such New Capital Securities are acquired in the ordinary course of such holders' business and such holders have no arrangement or understanding with any person to participate in the distribution of such New Capital Securities; (b) any action or proceeding shall have been instituted or threatened in any court or by or before any governmental agency or body with respect to the Exchange Offer which, in M&I and the Trust's judgment, would reasonably be expected to impair the ability of M&I and the Trust to proceed with the Exchange Offer; (c) any law, statute, rule or regulation shall have been adopted or enacted which, in M&I and the Trust's judgment, would reasonably be expected to impair the ability of M&I and the Trust to proceed with the Exchange Offer; 32 (d) a banking moratorium shall have been declared by United States federal or Wisconsin or New York State authorities which, in the Company's judgment, would reasonably be expected to impair the ability of the Company to proceed with the Exchange Offer; (e) trading on the New York Stock Exchange or generally in the United States over-the-counter market shall have been suspended by order of the Commission or any other governmental authority which, in M&I and the Trust's judgment, would reasonably be expected to impair the ability of M&I and the Trust to proceed with the Exchange Offer; (f) a stop order shall have been issued by the Commission or any state securities authority suspending the effectiveness of the Registration Statement or proceedings shall have been initiated or, to the knowledge of M&I or the Trust, threatened for that purpose or that any governmental approval has not been obtained, which approval M&I and the Trust shall, in their sole discretion, deem necessary for the consummation of the Exchange Offer as contemplated hereby; or (g) any change, or any development involving a prospective change, in the business or financial affairs of M&I and the Trust or any of their subsidiaries have occurred which, in the sole judgment of M&I and the Trust, might materially impair the ability of M&I and the Trust to proceed with the Exchange Offer. If M&I and the Trust determines in their sole and absolute discretion that any of the foregoing events or conditions has occurred or exists or has not been satisfied, M&I and the Trust may, subject to applicable law, terminate the Exchange Offer (whether or not any Old Capital Securities have theretofore been accepted for exchange) or may waive any such condition or otherwise amend the terms of the Exchange Offer in any respect. If such waiver or amendment constitutes a material change to the Exchange Offer, M&I and the Trust will promptly disclose such waiver by means of a prospectus supplement that will be distributed to the registered holders of the Old Capital Securities, and M&I and the Trust will extend the Exchange Offer to the extent required by Rule 14e-1 under the Exchange Act. EXCHANGE AGENT The Chase Manhattan Bank has been appointed as Exchange Agent for the Exchange Offer. Delivery of the Letters of Transmittal and any other required documents, questions, requests for assistance, and requests for additional copies of this Prospectus or of the Letter of Transmittal should be directed to the Exchange Agent as follows: The Chase Manhattan Bank 55 Water Street Room 234-North Building New York, New York 10041 Attention: Carlos Esteves Telephone: (212) 638-0828 Facsimile: (212) 638-7375 or (212) 344-9367 Delivery to other than the above address or facsimile numbers will not constitute a valid delivery. FEES AND EXPENSES M&I has agreed to pay the Exchange Agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of-pocket expenses in connection therewith. M&I will also pay brokerage houses and other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding copies of this Prospectus and related documents to the beneficial owners of Old Capital Securities, and in handling or tendering for their customers. Holders who tender their Old Capital Securities for exchange will not be obligated to pay any transfer taxes in connection therewith. If, however, New Capital Securities are to be delivered to, or are to be issued in the name of, any person other than the registered holder of the Old Capital Securities tendered, or if a transfer tax is imposed for any reason other than the exchange of Old 33 Capital Securities in connection with the Exchange Offer, then the amount of any such transfer taxes (whether imposed on the registered holder or any other persons) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with the Letter of Transmittal, the amount of such transfer taxes will be billed directly to such tendering holder. Neither M&I nor the Trust will make any payment to brokers, dealers or others soliciting acceptances of the Exchange Offer. DESCRIPTION OF THE CAPITAL SECURITIES The Old Capital Securities were issued and the New Capital Securities will be issued pursuant to the terms of the Declaration. The Institutional Trustee, The Chase Manhattan Bank, is trustee for the Capital Securities under the Declaration. The terms of the Capital Securities include those stated in the Declaration and those made part of the Declaration by the Trust Indenture Act. The following summary of the material terms and provisions of the Capital Securities does not purport to be complete and is subject to, and qualified in its entirety by reference to the Declaration (a copy of which has been filed as an exhibit to the Registration Statement of which this Prospectus is a part), the Trust Act and the Trust Indenture Act. GENERAL The Declaration authorizes the Regular Trustees of the Trust to issue, on behalf of the Trust, the Trust Securities in respect of the Trust, which represent undivided beneficial interests in the assets of the Trust. All of the Common Securities of the Trust are owned by the Company. The Common Securities of the Trust rank pari passu, and payments will be made thereon on a pro rata basis, with the Capital Securities of the Trust, except that upon the occurrence and during the continuance of a Declaration Event of Default (as defined herein) with respect to the Trust, the rights of the holders of the Common Securities of the Trust to receive payment of periodic distributions and payments upon liquidation, redemption and otherwise will be subordinated to the rights of the holders of the Capital Securities of the Trust. The Declaration does not permit the issuance by the Trust of any securities other than the Trust Securities in respect of the Trust or the incurrence of any indebtedness by the Trust. Pursuant to the Declaration of Trust, the Institutional Trustee holds legal title to the Subordinated Debt Securities purchased by the Trust for the benefit of the holders of the Trust Securities of the Trust. The payment of distributions out of money held by the Trust, and payments upon redemption of the Capital Securities of the Trust upon liquidation of the Trust, are guaranteed by the Company as described under "Description of the Guarantee." The Guarantee is held by The Chase Manhattan Bank, the Guarantee Trustee, for the benefit of the holders of the Capital Securities. The Guarantee does not cover payment of distributions in respect of Capital Securities of the Trust to the extent the Trust does not have available funds to pay such distributions. In such event, the remedy of holders of such Capital Securities would be, through the vote of holders of a majority in liquidation amount of such Capital Securities, to direct the Institutional Trustee to enforce the Institutional Trustee's rights under the Subordinated Debt Securities held by the Trust except in the circumstances in which a holder of such Capital Securities may take Direct Action. See "-- Voting Rights" and "--Declaration Events of Default." DISTRIBUTIONS Distributions on the Capital Securities is fixed at a rate per annum of 7.65% of the stated liquidation amount of $1,000 per Capital Security. Except as set forth below in respect of an Extension Period, distributions in arrears for more than one semiannual period will accrue on the Capital 34 Securities at the distribution rate per annum of 7.65%, compounded semiannually to the extent permitted by law. The term "distribution" as used herein includes cash distributions and any such compounded distributions payable unless otherwise stated. The amount of distributions payable for any period will be computed on the basis of a 360-day year of twelve 30-day months and the actual number of days elapsed per 30-day month. Distributions on the Capital Securities are cumulative, accrue from December 9, 1996, the date of issuance of the Old Capital Securities, and will be payable (subject to extension of distribution payment periods as described herein) semiannually in arrears on June 1 and December 1 of each year (each, a "Distribution Payment Date"), commencing June 1, 1997, when, as and if available for payment. Distributions will be made by the Institutional Trustee, except as otherwise described below. The Company has the right under the Indenture to defer payments of interest on the Subordinated Debt Securities by extending the interest payment period at any time and from time to time, subject to the conditions described below. If such right is exercised, semiannual distributions on the Capital Securities will also be deferred (though such distributions would continue to accrue at the distribution rate of 7.65% per annum compounded semiannually (to the extent permitted by law) since interest would continue to accrue on the Subordinated Debt Securities at a rate of 7.65% per annum, compounded semiannually to the extent permitted by law) during any Extension Period. Such right to extend any interest payment period for the Subordinated Debt Securities is limited to Extension Periods, each not exceeding 10 consecutive semiannual periods, and no Extension Period may be initiated while accrued interest from a prior, completed Extension Period is unpaid or while the Company is in default on the payment of interest that has become due and payable on the Subordinated Debt Securities, and no Extension Period may extend beyond the maturity of the Subordinated Debt Securities. In the event that the Company exercises this right, then during any Extension Period (a) the Company shall not declare or pay dividends on, make a distribution with respect to, or redeem, purchase or acquire, or make a liquidation payment with respect to, any of its capital stock or rights to acquire such capital stock (other than (i) purchases or acquisitions of shares of any such capital stock or rights to acquire such capital stock in connection with the satisfaction by the Company of its obligations under any employee benefit plans, (ii) as a result of a reclassification of the Company's capital stock or rights to acquire such capital stock or the exchange or conversion of one class or series of the Company's capital stock or rights to acquire such capital stock for another class or series of the Company's capital stock or rights to acquire such capital stock, (iii) the purchase of fractional interests in shares of the Company's capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged or (iv) dividends and distributions made on the Company's capital stock or rights to acquire such capital stock with the Company's capital stock or rights to acquire such capital stock) or make guarantee payments with respect to the foregoing, and (b) the Company shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by the Company that rank pari passu with or junior to the Subordinated Debt Securities. Prior to the termination of any such Extension Period in respect of the Subordinated Debt Securities, the Company may further extend the interest payment period; provided that each such Extension Period in respect of the Subordinated Debt Securities, together with all such previous and further extensions thereof, may not exceed 10 consecutive semiannual periods or extend beyond the maturity of the Subordinated Debt Securities. Upon the termination of any Extension Period in respect of the Subordinated Debt Securities and the payment of all amounts then due, the Company may commence a new Extension Period, subject to the above requirements. See "Description of the Subordinated Debt Securities--Interest" "--Option to Extend Interest Payment Period" and "Certain Covenants." If distributions are deferred, the distributions due shall be paid on the date that the related Extension Period terminates, or, if such date is not a Distribution Payment Date, on the immediately following Distribution Payment Date, to holders of applicable Capital Securities as they appear on the books and records of the Trust on the record date immediately preceding such date. 35 Distributions on the Capital Securities must be paid on the dates payable (after giving effect to any Extension Period) to the extent that the Trust has funds available for the payment of such distributions in the Property Account of the Trust. The Trust's funds available for distribution to the holders of the Capital Securities issued by the Trust will be limited to payments received from the Company on the Subordinated Debt Securities. See "Description of the Subordinated Debt Securities." The payment of distributions out of moneys held by the Trust is guaranteed by the Company to the extent set forth under "Description of the Guarantee." Distributions on the Capital Securities will be payable to the holders thereof as they appear on the books and records of the Trust on the relevant record dates, which, as long as the Capital Securities are held in book-entry only form, will be one Business Day (as defined below) prior to the relevant payment dates. Such distributions will be paid through the Institutional Trustee who will hold amounts received in respect of the Subordinated Debt Securities in the Property Account of the Trust for the benefit of the holders of the Trust Securities. Subject to any applicable laws and regulations and the provisions of the Declaration, each such payment will be made as described under "--Book-Entry Only Issuance--The Depository Trust Company" below. At any time when the Capital Securities are not held solely in book-entry only form, the Regular Trustees shall select record dates, which shall be 15 days prior to the relevant payment date. In the event that any date on which distributions are to be made on the Capital Securities is not a Business Day, then payment of the distributions payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay) with the same force and effect as if made on such payment date. A "Business Day" shall mean any day other than Saturday, Sunday or any other day on which banking institutions in New York City (in the State of New York) are permitted or required by any applicable law to close. REDEMPTION The Subordinated Debt Securities will mature on December 1, 2026 and may be redeemed by the Company at par, together with accrued and unpaid interest thereon to the date of redemption, in whole or in part, at any time in certain circumstances upon the occurrence of a Tax Event. In addition, the Subordinated Debt Securities may be redeemed by the Company, in whole or in part, at any time and from time to time on or after December 1, 2006 (the "Optional Redemptions"), other than upon the occurrence of a Tax Event, at the call prices (expressed as a percentage of the principal amount) expressed below:
IF REDEEMED DURING THE 12-MONTH PERIOD BEGINNING, DECEMBER 1, CALL PRICE ------------------------------- ---------- 2006 103.5820% 2007 103.2238 2008 102.8656 2009 102.5074 2010 102.1492 2011 101.7910 2012 101.4328 2013 101.0746 2014 100.7164 2015 100.3582
and at 100% of the principal amount on or after December 1, 2016 (each a "Call Price"), together, in each case, with accrued and unpaid interest thereon to the date of redemption. In each case, the right of the Company to redeem the Subordinated Debt Securities is subject to receipt of prior approval by the Federal Reserve if then required under applicable capital guidelines or policies of the Federal Reserve. 36 Upon the repayment in full at maturity or redemption in whole or in part of the Subordinated Debt Securities (other than following the distribution of the Subordinated Debt Securities to the holders of the Trust Securities), the proceeds from such repayment or payment shall simultaneously be applied to redeem on a pro rata basis at the Redemption Price, Trust Securities of the Trust having an aggregate liquidation amount equal to the aggregate principal amount of the Subordinated Debt Securities so repaid or redeemed; provided, however, that holders of such Trust Securities shall be given not less than 30 nor more than 60 days' notice of such redemption (other than at the scheduled maturity of the Subordinated Debt Securities). See "Description of the Subordinated Debt Securities--Redemption." In the event that fewer than all of the outstanding Capital Securities are to be redeemed, such Capital Securities will be redeemed in accordance with the procedures of DTC (as defined herein) as described under "--Book-Entry Only Issuance--The Depository Trust Company" below. TAX EVENT REDEMPTION "Tax Event" means that the Regular Trustees of the Trust shall have received an opinion of a nationally recognized independent tax counsel to the Company experienced in such matters to the effect that, as a result of (a) any amendment to, clarification of or change (including any announced prospective change) in, the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein, (b) any judicial decision or official administrative pronouncement, ruling, regulatory procedure, notice or announcement, including any notice or announcement of intent to adopt such procedures or regulations (an "Administrative Action") or (c) any amendment to, clarification of or change in the administrative position or interpretation of any Administrative Action or judicial decision that differs from the theretofore generally accepted position, in each case, by any legislative body, court, governmental agency or regulatory body, irrespective of the manner in which such amendment, clarification or change is made known, which amendment, clarification or change is effective or such Administrative Action or decision is announced, in each case, on or after December 2, 1996, there is more than an insubstantial risk that (i) the Trust is, or will be within 90 days of the date thereof, subject to United States federal income tax with respect to interest accrued or received on the Subordinated Debt Securities held by the Trust or subject to more than a de minimis amount of other taxes, duties or other governmental charges, (ii) any portion of interest payable by the Company to the Trust on the Subordinated Debt Securities is not, or within 90 days of the date thereof will not be, deductible by the Company for United States federal income tax purposes, or (iii) the Company could become liable to pay, on the next date on which any amount would be payable with respect to the Subordinated Debt Securities, any Additional Interest (as defined herein). If, at any time, a Tax Event in respect of the Trust shall occur and be continuing, and the Company receives an opinion (a "Redemption Tax Opinion") of nationally recognized independent tax counsel experienced in such matters that, as a result of such Tax Event in respect of the Trust, there is more than an insubstantial risk that the Company would be precluded from deducting the interest on the Subordinated Debt Securities held by the Institutional Trustee for United States federal income tax purposes, even if the Subordinated Debt Securities were distributed to the holders of Trust Securities in liquidation of such holders' interests in the Trust (as described in "--Liquidation Distribution Upon Dissolution" below), the Company shall have the right at any time, subject to receipt of prior approval by the Federal Reserve if then required under applicable capital guidelines or policies of the Federal Reserve, within 90 days following the occurrence of such Tax Event, upon not less than 30 nor more than 60 days' notice, to redeem the Subordinated Debt Securities held by the Institutional Trustee, in whole or in part, for cash so long as such Tax Event is continuing at their full principal amounts plus any accrued and unpaid interest thereon to the dates of redemption (the "Tax Event Redemption"), and, following such redemption, Trust Securities of the Trust with an aggregate liquidation amount equal to the aggregate principal amount of the Subordinated Debt Securities so redeemed shall be redeemed by the Trust at the applicable Redemption Price; provided, however, that (i) if at the time 37 there is available to the Company or the Trust the opportunity to eliminate, within such 90-day period the adverse effects of the Tax Event by taking some ministerial action, such as filing a form or making an election or pursuing some other similar reasonable measure that will have no adverse effect on the Trust, the Company or the holders of the Trust Securities and (ii) if such notice has not been given, the Company or the Trust will pursue such measure in lieu of redemption. REDEMPTION PROCEDURES The Trust may not redeem fewer than all of the outstanding Capital Securities issued by the Trust unless all accrued and unpaid distributions have been paid on all such Capital Securities for all semiannual distribution periods terminating on or prior to the date of redemption. If the Trust gives a notice of redemption, which notice will be irrevocable, in respect of Capital Securities issued by the Trust, and held in book entry form, by 12:00 noon, New York City time, on the redemption date, provided that the Company has paid to the Institutional Trustee a sufficient amount of cash in connection with the related redemption or maturity of the Subordinated Debt Securities, the Institutional Trustee will irrevocably deposit with the Depositary or its nominee funds sufficient to pay the applicable Redemption Price and will give the Depositary irrevocable instructions and authority to pay such Redemption Price to the holders of such Capital Securities. See "-- Book-Entry Only Issuance--The Depository Trust Company." If notice of redemption shall have been given and funds deposited as required, then, immediately prior to the close of business on the date of such deposit, distributions will cease to accrue on the Capital Securities so called for redemption and all rights of holders of such Capital Securities so called for redemption will cease, except the right of the holders of such Capital Securities to receive the applicable Redemption Price but without interest on such Redemption Price. In the event that any date fixed for redemption of Capital Securities is not a Business Day, then payment of the Redemption Price payable on such date will be made on the next succeeding day that is a Business Day (without any interest or other payment in respect of any such delay), except that, if such Business Day falls in the next calendar year, such payment will be made on the immediately preceding Business Day. In the event that payment of the Redemption Price in respect of Capital Securities is improperly withheld or refused and not paid by the Institutional Trustee, or by the Company pursuant to the Guarantee, distributions on such Capital Securities will continue to accrue at the then applicable rate from the original redemption date to the actual date of payment, in which case the actual payment date will be considered the date fixed for redemption for purposes of calculating the Redemption Price. In the event that fewer than all of the outstanding Capital Securities issued by the Trust are to be redeemed, Capital Securities will be redeemed in accordance with the procedures of DTC as described below under "--Book-Entry Only Issuance--The Depository Trust Company." In the event of any redemption of Capital Securities issued by the Trust in part, the Trust shall not be required to (i) issue, register the transfer of or exchange any Certificated Security (as defined herein) during a period beginning at the opening of business 15 days before any selection for redemption of Capital Securities and ending at the close of business on the earliest date on which the relevant notice of redemption is deemed to have been given to all holders of Capital Securities to be so redeemed or (ii) register the transfer of or exchange any Certificated Securities so selected for redemption, in whole or in part, except for the unredeemed portion of any Certificated Securities being redeemed in part. Subject to the foregoing and applicable law (including, without limitation, United States federal securities laws), provided the acquiror is not the holder of the Common Securities or the obligor under the Subordinated Debt Securities, the Company or its subsidiaries may at any time, and from time to time, purchase outstanding Capital Securities by tender, in the open market or by private agreement. 38 LIQUIDATION DISTRIBUTION UPON DISSOLUTION Pursuant to the Declaration, the Trust shall dissolve (i) on December 31, 2051, the expiration of the term of the Trust, (ii) upon the bankruptcy of the Company, (iii) (other than in connection with a merger, consolidation or similar transaction not prohibited by the Indenture, the Declaration or the Guarantee, as the case may be) upon the filing of a certificate of dissolution or its equivalent with respect to the Company, upon the consent of the holders of at least a majority in liquidation amount of the Trust Securities issued by Trust voting together as a single class to file a certificate of cancellation with respect to the Trust, or upon the revocation of the charter of the Company and the expiration of 90 days after the date of revocation without a reinstatement thereof, (iv) upon exercise of the right of the holder of all of the outstanding Common Securities of the Trust to dissolve the Trust as described below, (v) upon the entry of a decree of a judicial dissolution of the Company or the Trust, or (vi) upon the redemption of all of the Trust Securities issued by the Trust. Pursuant to the Declaration, as soon as practicable after the dissolution of the Trust and upon completion of the winding up of the Trust, the Trust shall terminate upon the filing of a certificate of cancellation. In the event of any voluntary or involuntary dissolution of the Trust (each a "Dissolution Event") other than in connection with a redemption of the Subordinated Debt Securities as previously described, the holders of the Capital Securities issued by the Trust will be entitled to receive out of the assets of the Trust, after satisfaction of liabilities to creditors of the Trust (to the extent not satisfied by the Company), distributions in an amount equal to the aggregate of the stated liquidation amount of $1,000 per Capital Security (the "Liquidation Amount") plus accrued and unpaid distributions thereon to the date of payment (the "Liquidation Distribution"), unless, in connection with such Dissolution Event, Subordinated Debt Securities in an aggregate stated principal amount equal to the aggregate stated liquidation amount of, with identical premium to, if any, with an interest rate identical to the distribution rate of, and bearing accrued and unpaid interest equal to accrued and unpaid distributions on, such Capital Securities have been distributed on a pro rata basis to the holders of such Capital Securities in exchange for such Capital Securities as is required under certain circumstances as described below. Upon any Dissolution Event in connection with which the Subordinated Debt Securities are distributed, if at the time of such Dissolution Event the Capital Securities are rated by at least one nationally recognized statistical rating organization, the Company will use its best efforts to obtain from at least one nationally recognized statistical rating organization a rating for the Subordinated Debt Securities. The Company, as the holder of all of the Common Securities, has the right at any time to dissolve the Trust (including but not limited to the occurrence of a Tax Event), subject to certain conditions, with the result that, after satisfaction of liabilities to creditors of the Trust (to the extent not satisfied by the Company), unless the Subordinated Debt Securities held by the Trust are redeemed in the circumstances described herein, the Subordinated Debt Securities would be distributed to the holders of the Trust Securities in liquidation of the holders' interests in the Trust on a pro rata basis in accordance with its aggregate stated liquidation amount thereof, in liquidation of the Trust. If an early dissolution occurs as described in clause (i), (ii), (iii) or (v), the Trust shall be liquidated by the M&I Trustees as expeditiously as such M&I Trustees determine to be possible by distributing, after satisfaction of liabilities to creditors of the Trust, to the holders of the Trust Securities, the Subordinated Debt Securities, unless such distribution is determined by the Institutional Trustee not to be practical, in which event such holders will be entitled to receive out of the assets of the Trust available for distribution to holders, after satisfaction of liabilities to creditors of the Trust, an amount equal to the Liquidation Distribution. An early dissolution of the Trust pursuant to clause (iv) above shall occur only if the M&I Trustees determine that such liquidation is possible by distributing, after satisfaction of liabilities to creditors of the Trust, to the holders of the Trust Securities issued by the Trust, the Subordinated Debt Securities, and such distribution occurs. 39 If, upon any such Dissolution Event, the Liquidation Distribution can be paid only in part because the Trust has insufficient assets available to pay in full the aggregate Liquidation Distribution, then the amounts payable directly by the Trust on such Capital Securities shall be paid on a pro rata basis. The holders of the Common Securities issued by the Trust will be entitled to receive distributions upon any such Dissolution Event pro rata with the holders of such Capital Securities, except that if a Declaration Event of Default has occurred and is continuing in respect of the Trust, the Capital Securities shall have a preference over the Common Securities with regard to such distributions. After the date for any distribution of Subordinated Debt Securities upon dissolution of the Trust, (i) the Trust Securities of the Trust will be deemed to be no longer outstanding, (ii) the Depositary (as defined herein) or its nominee, as the record holder of the Capital Securities, will receive a registered Global Certificate (as defined herein) or Certificates representing the Subordinated Debt Securities to be delivered upon such distribution, and (iii) any certificates representing Capital Securities not held by the Depositary or its nominee will be deemed to represent undivided beneficial interests in such of the Subordinated Debt Securities as have an aggregate principal amount equal to the aggregate stated liquidation amount of, with an interest rate identical to the distribution rate of, and bearing accrued and unpaid interest equal to accrued and unpaid distributions on, such Capital Securities until such certificates are presented to the Company or its agent for transfer or reissuance. There can be no assurance as to the market prices for either the Capital Securities or the Subordinated Debt Securities that may be distributed in exchange for the Capital Securities if a dissolution and liquidation of the Trust were to occur. Accordingly, the Capital Securities that an investor may purchase, whether in the secondary market or otherwise, or the Subordinated Debt Securities that an investor may receive if a dissolution and liquidation of the Trust were to occur, may trade at a discount to the price paid to purchase the Capital Securities. DECLARATION EVENTS OF DEFAULT An event of default under the Indenture in respect of the Subordinated Debt Securities issued to the Trust (an "Indenture Event of Default") constitutes an event of default under the Declaration of Trust with respect to the Trust Securities issued by the Trust (each a "Declaration Event of Default"); provided, that pursuant to the Declaration of Trust, the holder of the Common Securities of the Trust will be deemed to have waived any Declaration Event of Default with respect to such Common Securities until all Declaration Events of Default with respect to the Capital Securities of the Trust have been cured, waived or otherwise eliminated. Until such Declaration Events of Default with respect to such Capital Securities have been so cured, waived, or otherwise eliminated, the Institutional Trustee will be deemed to be acting solely on behalf of the holders of the Capital Securities of the Trust and only the holders of such Capital Securities will have the right to direct the Institutional Trustee with respect to certain matters under the Declaration, and therefore the Indenture. The holders of a majority in liquidation amount of the Capital Securities of the Trust will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Institutional Trustee or to direct the exercise of any trust or power conferred upon the Institutional Trustee Trust under the Declaration, including the right to direct the Institutional Trustee to exercise the remedies available to it as holder of the Subordinated Debt Securities. If the Institutional Trustee fails to enforce its rights under the Subordinated Debt Securities after the holders of a majority in liquidation amount of such Capital Securities have so directed the Institutional Trustee, to the fullest extent permitted by law. a holder of record of such Capital Securities may institute a legal proceeding against the Company to enforce the Institutional Trustee's rights under the Subordinated Debt Securities without first instituting any legal proceeding against the Institutional Trustee or any other person or entity. Notwithstanding the foregoing, if a Declaration Event of Default relating to Capital Securities of the Trust has occurred and is continuing and such event is attributable to the failure of the Company to pay interest or principal (or premium, if any) on the Subordinated Debt Securities issued to the Trust on the respective dates such interest or principal (or premium, if any) is payable (or in the case of redemption, the 40 redemption date), then a holder of record of such Capital Securities may institute a Direct Action against the Company for payment, on or after the respective due dates specified in the Subordinated Debt Securities, to such holder directly of the principal of (or premium, if any) or interest on Subordinated Debt Securities having an aggregate principal amount equal to the aggregate liquidation amount of the Capital Securities of such holder. In connection with such Direct Action, the Company will be subrogated to the rights of such holder of Capital Securities under the applicable Declaration to the extent of any payment made by the Company to such holder of Capital Securities in such Direct Action; provided, however, that no such subrogation right may be exercised so long as a Declaration Event of Default has occurred and is continuing. The holders of Capital Securities will not be able to exercise directly any other remedy available to the holders of the Subordinated Debt Securities. Upon the occurrence of a Declaration Event of Default relating to Capital Securities of the Trust, the Institutional Trustee, so long as it is the sole holder of the Subordinated Debt Securities issued to the Trust, will have the right under the Indenture to declare the principal of (or premium, if any) and interest on the Subordinated Debt Securities to be immediately due and payable. The Company and the Trust are each required to file annually with the Institutional Trustee an officer's certificate as to its compliance with all conditions and covenants under the Declaration. VOTING RIGHTS Except as described herein, under the Trust Act and under "Description of the Guarantee--Modification of the Guarantee; Assignment", and as otherwise required by law and the Declaration, the holders of the Capital Securities will have no voting rights. The Regular Trustees of the Trust are required to call a meeting of the holders of the Capital Securities of the Trust if directed to do so by holders of at least 10% in aggregate liquidation amount thereof. Subject to the requirements set forth in this paragraph, the holders of a majority in aggregate liquidation amount of the Capital Securities of the Trust have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Institutional Trustee, or exercising any trust or power conferred upon such Institutional Trustee under the Declaration, including the right to direct such Institutional Trustee, as holder of the Subordinated Debt Securities, to (i) exercise the remedies available to it under the Indenture as a holder of the Subordinated Debt Securities, (ii) waive any past default that is waivable under the Indenture, (iii) exercise any right to rescind or annul a declaration that the principal of all the Subordinated Debt Securities shall be due and payable or (iv) consent on behalf of all the holders of the Capital Securities of the Trust to any amendment, modification or termination of the Indenture or the Subordinated Debt Securities where such consent shall be required; provided, however, that where a consent or action under the Indenture would require the consent or act of holders of more than a majority in principal amount of the Subordinated Debt Securities (a "Super-Majority") affected thereby, the Institutional Trustee may only give such consent or take such action at the written direction of the holders of at least the proportion in aggregate liquidation amount of the Capital Securities outstanding which the relevant Super-Majority represents of the aggregate principal amount of the Subordinated Debt Securities outstanding. If the Institutional Trustee fails to enforce its rights under the Subordinated Debt Securities after the holders of a majority in liquidation amount of such Capital Securities have so directed the Institutional Trustee, to the extent permitted by law, a holder of record of the Capital Securities may institute a legal proceeding directly against the Company to enforce the Institutional Trustee's rights under the Subordinated Debt Securities without first instituting any legal proceeding against the Institutional Trustee or any other person or entity. Notwithstanding the foregoing, if a Declaration Event of Default relating to the Capital Securities of the Trust has occurred and is continuing and such event is attributable to the failure of the Company to pay interest or principal (or premium if any) on the Subordinated Debt Securities on the respective dates such interest or principal is payable (or in the case of redemption, the redemption date) then a holder of record of Capital Securities of the Trust may directly institute a proceeding for enforcement of payment, on or after the respective due dates specified in the Subordinated Debt 41 Securities, to such holder directly of the principal of (or premium, if any) or interest on the Subordinated Debt Securities having an aggregate principal amount equal to the aggregate liquidation amount of the Capital Securities of such holder. The Institutional Trustee shall notify all holders of the Capital Securities of the Trust of any default actually known to the Institutional Trustee with respect to the Subordinated Debt Securities unless (x) such defaults have been cured prior to the giving of such notice or (y) the Institutional Trustee determines in good faith that the withholding of such notice is in the interest of the holders of such Capital Securities, except where the default relates to the payment of interest or principal of (or premium, if any) on any of the Subordinated Debt Securities. Such notice shall state that such Indenture Event of Default also constitutes a Declaration Event of Default. Except with respect to directing the time, method and place of conducting a proceeding for a remedy, the Institutional Trustee shall not take any of the actions described in clauses (i), (ii) or (iii) above unless the Institutional Trustee has obtained an opinion of tax counsel to the effect that, as a result of such action, the Trust will not be classified as other than a grantor trust for United States federal income tax purposes. In the event the consent of the Institutional Trustee, as the holder of the Subordinated Debt Securities, is required under the Indenture with respect to any amendment, modification or termination of the Indenture, such Institutional Trustee shall request the direction of the holders of the Trust Securities of the Trust with respect to such amendment, modification or termination and shall vote with respect to such amendment, modification or termination as directed by a majority in liquidation amount of such Trust Securities voting together as a single class; provided, however, that where a consent under the Indenture would require the consent of a Super-Majority, the Institutional Trustee may only give such consent at the direction of the holders of at least the proportion in liquidation amount of such Trust Securities outstanding which the relevant Super-Majority represents of the aggregate principal amount of the Subordinated Debt Securities outstanding. The Institutional Trustee shall not take any such action in accordance with the directions of the holders of such Trust Securities unless the Institutional Trustee has obtained an opinion of tax counsel to the effect that, as a result of such action, the Trust will not be classified as other than a grantor trust for United States federal income tax purposes. A waiver of an Indenture Event of Default will constitute a waiver of the corresponding Declaration Event of Default. Any required approval or direction of holders of Capital Securities of the Trust may be given at a separate meeting of such holders convened for such purpose, at a meeting of all of the such holders of Trust Securities of the Trust or pursuant to written consent. The Regular Trustees of the Trust will cause a notice of any meeting at which holders of Capital Securities of the Trust are entitled to vote, or of any matter upon which action by written consent of such holders is to be taken, to be mailed to each holder of record of such Capital Securities. Each such notice will include a statement setting forth the following information: (i) the date of such meeting or the date by which such action is to be taken; (ii) a description of any resolution proposed for adoption at such meeting on which such holders are entitled to vote or of such matter upon which written consent is sought; and (iii) instructions for the delivery of proxies or consents. No vote or consent of the holders of Capital Securities of the Trust will be required for such Trust to redeem and cancel such Capital Securities or distribute the Subordinated Debt Securities in accordance with the Declaration. Notwithstanding that holders of Capital Securities are entitled to vote or consent under any of the circumstances described above, any of the Capital Securities that are owned at such time by the Company or any entity directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Company, shall not entitle the holders thereof to vote or consent and shall, for purposes of such vote or consent, be treated as if such Capital Securities were not outstanding. The procedures by which holders of Capital Securities may exercise their voting rights are described below. See "--Book-Entry Only Issuance--The Depository Trust Company" below. 42 Holders of the Capital Securities will have no rights to appoint or remove the M&I Trustees, who may be appointed, removed or replaced solely by the Company as the holder of all of the Common Securities of the Trust. MODIFICATION OF THE DECLARATION The Declaration with respect to the Trust may be amended without the consent of the holders of the Trust Securities of the Trust to: (i) cure any ambiguity; (ii) correct or supplement any provision in such Declaration that may be defective or inconsistent with any other provision of such Declaration; (iii) add to the covenants, restrictions or obligations of the Company; (iv) conform to any change in Rule 3a-5 under the Investment Company Act of 1940, as amended (the "1940 Act"), or a written change in interpretation or application of Rule 3a-5 by any legislative body, court, government agency or regulatory authority, which amendment does not have a material adverse effect on the rights, preferences or privileges of the holders of such Trust Securities; and (v) modify, eliminate and add to any provision of such Declaration, provided, that no such modification, elimination or addition shall adversely affect the powers, preferences or special rights of the holders of such Trust Securities. In addition, the Declaration with respect to the Trust may be modified and amended if approved by the Regular Trustees of the Trust (and in certain circumstances the Institutional Trustee and the Delaware Trustee), provided that, if any proposed amendment provides for, or such Regular Trustees otherwise propose to effect, (i) any action that would adversely affect the powers, preferences or special rights of the Trust Securities of the Trust, whether by way of amendment to the Declaration or otherwise or (ii) the dissolution, winding-up or termination of the Trust other than pursuant to the terms of the Declaration, then the holders of such Trust Securities voting together as a single class will be entitled to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval of the holders of at least a majority in liquidation amount of the Trust Securities affected thereby; provided, that if any amendment or proposal referred to in clause (i) above would adversely affect only the Capital Securities or only the Common Securities of the Trust, then only the affected class will be entitled to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval of a majority in liquidation amount of such class of Trust Securities. Notwithstanding the foregoing, no amendment or modification may be made to the Declaration if such amendment or modification would (i) cause the Trust to be classified for purposes of United States federal income taxation as other than a grantor trust, (ii) reduce or otherwise adversely affect the powers of the Institutional Trustee or (iii) cause the Trust to be deemed an "investment company" which is required to be registered under the 1940 Act. Notwithstanding any provision of the Declaration, the provisions of Section 316(b) of the Trust Indenture Act incorporated by reference into the Indenture provides that the right of any holder of Capital Securities to receive payments of distributions and other payments upon redemption or otherwise on or after their respective due dates, or to institute suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such holder. MERGERS, CONSOLIDATIONS OR AMALGAMATIONS The Trust may not consolidate, amalgamate, merge with or into, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to, any corporation or other body, except as described below. The Trust may, with the consent of a majority of the Regular Trustees of the Trust and without the consent of the holders of the Trust Securities of the Trust, the Institutional Trustee or the Delaware Trustee, consolidate, amalgamate, merge with or into, or be replaced by, a trust organized as such under the laws of any State of the United States; provided that (i) if the Trust 43 is not the survivor, such successor entity either (x) expressly assumes all of the obligations of the Trust under Trust Securities issued by the Trust or (y) substitutes for the Trust Securities other securities having substantially the same terms as the Trust Securities (the "Successor Securities"), so that the Successor Securities rank the same as the Trust Securities rank with respect to distributions and payments upon liquidation, redemption and otherwise, (ii) the Company expressly acknowledges a trustee of such successor entity possessing the same powers and duties as the Institutional Trustee as the holder of the Subordinated Debt Securities, (iii) the Capital Securities of the Trust or any Successor Securities are listed, or any Successor Securities will be listed upon notification of issuance, on any national securities exchange or with another organization on which such Capital Securities are then listed or quoted, if any, (iv) such merger, consolidation, amalgamation or replacement does not cause the Capital Securities (including any Successor Securities) to be downgraded by any nationally recognized statistical rating organization, (v) such merger, consolidation, amalgamation or replacement does not adversely affect the rights, preferences and privileges of the holders of such Trust Securities (including any Successor Securities) in any material respect (other than with respect to any dilution of the holders' interest in such successor entity), (vi) such successor entity has a purpose substantially identical to that of the Trust, (vii) prior to such merger, consolidation, amalgamation or replacement, the Company has received an opinion of a nationally recognized independent counsel to the Trust experienced in such matters to the effect that (A) (based on certain assumptions) such merger, consolidation, amalgamation or replacement does not adversely affect the rights, preferences and privileges of the holders of the Trust Securities (including any Successor Securities) in any material respect (other than with respect to any dilution of the holders' interest in such successor entity), (B) following such merger, consolidation, amalgamation or replacement, neither the Trust nor such successor entity will be required to register as an investment company under the 1940 Act and (C) following such merger, consolidation, amalgamation or replacement, neither the Trust nor such successor entity will be classified as other than a grantor trust for United States federal income tax purposes, and (viii) the Company guarantees the obligations of such successor entity under the Successor Securities at least to the extent provided by the applicable Guarantee. Notwithstanding the foregoing, the Trust shall not, except with the consent of holders of 100% in liquidation amount of the Trust Securities of the Trust, consolidate, amalgamate, merge with or into, or be replaced by, any other entity or permit any other entity to consolidate, amalgamate, merge with or into, or replace it, if such consolidation, amalgamation, merger or replacement would cause the Trust or the successor entity to be classified as other than a grantor trust for United States federal income tax purposes. BOOK-ENTRY ONLY ISSUANCE--THE DEPOSITORY TRUST COMPANY The description of book-entry procedures in this Prospectus includes summaries of certain rules and operating procedures of The Depository Trust Company ("DTC") that affect transfers of interests in the global certificate or certificates issued in connection with sales of Capital Securities. Except as described in the next paragraph, the Capital Securities will be issued only as fully registered securities registered in the name of Cede & Co. (as nominee for DTC). One or more fully registered global Capital Security certificates (the "Global Certificates") will be issued, representing, in the aggregate, the New Capital Securities, and will be deposited with DTC. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of securities in definitive form. Such laws may impair the ability to transfer beneficial interests in the global Capital Securities as represented by a Global Certificate. DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds securities that its participants ("Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited 44 securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Participants in DTC include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations ("Direct Participants"). DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others, such as securities brokers and dealers, banks and trust companies that clear transactions through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. Purchases of Capital Securities within the DTC system must be made by or through Direct Participants, which will receive a credit for the Capital Securities on DTC's records. The ownership interest of each actual purchaser of each Capital Security ("Beneficial Owner") is in turn to be recorded on the Direct Participants' and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchases, but Beneficial Owners are expected to receive written confirmations providing details of the transactions, as well as periodic statements of their holdings, from the Direct or Indirect Participants through which the Beneficial Owners purchased Capital Securities. Transfers of ownership interests in the Capital Securities are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Capital Securities, except in the event that use of the book-entry system for the Capital Securities is discontinued. To facilitate subsequent transfers, all the Capital Securities deposited by Participants with DTC will be registered in the name of DTC's nominee, Cede & Co. The deposit of Capital Securities with DTC and their registration in the name of Cede & Co. will effect no change in beneficial ownership. DTC will have no knowledge of the actual Beneficial Owners of the Capital Securities. DTC's records will reflect only the identity of the Direct Participants to whose accounts such Capital Securities are credited, which may or may not be the Beneficial Owners. The Direct Participants and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. So long as DTC, or its nominee, is the registered owner or holder of a Global Certificate in respect of the Capital Securities, DTC or such nominee, as the case may be, will be considered the sole owner or holder of the Capital Securities represented thereby for all purposes under the Declaration in respect of such Capital Securities and such Capital Securities. No Beneficial Owner of an interest in a Global Certificate will be able to transfer that interest except in accordance with DTC's applicable procedures. DTC has advised the Company that it will take any action permitted to be taken by a holder of Capital Securities (including the presentation of Capital Securities for exchange as described below) only at the direction of one or more Participants to whose accounts the DTC interests in the Global Certificates are credited and only in respect of such portion of the aggregate liquidation amount of Capital Securities as to which such Participant or Participants has or have given such direction. However, if there is a Declaration Event of Default with respect to the Capital Securities, DTC will, upon notice, exchange the Global Certificates in respect of such Capital Securities for certificated securities, which it will distribute to its Participants. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices in respect of the Capital Securities held in book-entry form will be sent to Cede & Co. If less than all of the Capital Securities are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant to be redeemed. 45 Although voting with respect to the Capital Securities is limited, in those cases where a vote is required, neither DTC nor Cede & Co. will itself consent or vote with respect to Capital Securities. Under its usual procedures, DTC would mail an omnibus proxy to the Trust as soon as possible after the record date. The omnibus proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Capital Securities are credited on the record date (identified in a listing attached to the omnibus proxy). Distributions on the Capital Securities held in book-entry form will be made to DTC in immediately available funds. DTC's practice is to credit Direct Participants' accounts on the relevant payment date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payments on such payment date. Payments by Direct Participants and Indirect Participants to Beneficial Owners will be governed by standing instructions and customary practices and will be the responsibility of such Direct Participants and Indirect Participants and not of DTC, the Trust or the Company, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of distributions to DTC is the responsibility of the Trust, disbursement of such payments to Direct Participants is the responsibility of DTC, and disbursement of such payments to the Beneficial Owners is the responsibility of Direct Participants and Indirect Participants. Except as provided herein, a Beneficial Owner of an interest in a Global Certificate will not be entitled to receive physical delivery of Capital Securities. Accordingly, each Beneficial Owner must rely on the procedures of DTC, the Direct Participants and the Indirect Participants to exercise any rights under the Capital Securities. Although DTC has agreed to the foregoing procedures in order to facilitate transfers of interests in the Global Certificates among Participants of DTC, DTC is under no obligation to perform or continue to perform such procedures, and such procedures may be discontinued at any time. None of the Company, the Trust or any Institutional Trustee will have any responsibility for the performance by DTC or its Direct Participants or Indirect Participants under the rules and procedures governing DTC. DTC may discontinue providing its services as securities depositary with respect to the Capital Securities at any time by giving notice to the Trust. Under such circumstances, in the event that a successor securities depositary is not obtained, Capital Security certificates will be required to be printed and delivered. Additionally, the Trust (with the consent of the Company) may decide to discontinue use of the system of book-entry transfers through DTC (or a successor depositary) with respect to the Capital Securities of the Trust. In that event, certificates for such Capital Securities will be printed and delivered. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the Company and the Trust believes to be reliable, but neither the Company nor the Trust takes responsibility for the accuracy thereof. PAYMENT AND PAYING AGENCY Payments in respect of the Capital Securities represented by the Global Certificates shall be made to DTC, which shall credit the relevant accounts at DTC on the applicable distribution payment dates or, in the case of Certificated Securities in non-book-entry form, such payments shall be made by check mailed to the address of the holder entitled thereto as such address shall appear on books and records of the Trust. The paying agent for the Trust Securities (the "Paying Agent") shall initially be The Chase Manhattan Bank. The Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written notice to the Institutional Trustee. In the event that The Chase Manhattan Bank shall no longer be the Paying Agent, the Institutional Trustee shall appoint a successor to act as Paying Agent (which shall be a bank or trust company). 46 RESTRICTIONS ON TRANSFER The Capital Securities will be issued and may be transferred only in blocks having an aggregate liquidation amount of not less that $100,000 (100 Capital Securities). Any such transfer of Capital Securities in a block having an aggregate liquidation amount of less than $100,000 shall be deemed to be null and void and of no legal effect whatsoever. Any such transferee shall be deemed not to be the holder of such Capital Securities for any purpose, including but not limited to the receipt of distributions on such Capital Securities, and such transferee shall be deemed to have no interest whatsoever in such Capital Securities. REGISTRAR, TRANSFER AGENT AND PAYING AGENT The Institutional Trustee will act as registrar, transfer agent and Paying Agent for the Capital Securities of the Trust. Registration of transfers or exchanges of Capital Securities will be effected without charge by or on behalf of the Trust, but upon payment (with the giving of such indemnity as the Trust or the Company may require) in respect of any tax or other government charges which may be imposed in relation to it. The Trust will not be required to register or cause to be registered the transfer or exchange of Capital Securities after such Capital Securities have been called for redemption. INFORMATION CONCERNING THE INSTITUTIONAL TRUSTEE The Institutional Trustee, prior to the occurrence of a default with respect to the Trust Securities of the Trust and after the curing of any defaults that may have occurred, undertakes to perform only such duties as are specifically set forth in the Declaration and, after default, shall exercise such of the rights and powers vested in it by such Declaration, and use the same degree of care and skill in their exercise, as a prudent individual would exercise or use in the conduct of his or her own affairs. Subject to such provisions, the Institutional Trustee is under no obligation to exercise any of the powers vested in it by the Declaration at the request of any holder of Capital Securities of the Trust, unless offered reasonable indemnity by such holder against the costs, expenses and liabilities which might be incurred thereby. The holders of Capital Securities of the Trust will not be required to offer such indemnity in the event such holders, by exercising their voting rights, direct the Institutional Trustee to take any action it is empowered to take under the Declaration following a Declaration Event of Default. The Institutional Trustee of a the Trust also serves as trustee under the Guarantee and the Indenture. The Company and certain of its subsidiaries conduct certain banking transactions with the Institutional Trustee in the ordinary course of their business. Whenever in the exercise of its rights or powers or the performance of its duties under the Declaration the Institutional Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action thereunder, the Institutional Trustee (i) may request instructions from the holders of the Capital Securities of the Trust which instructions may only be given by the holders of a majority, or such other proportion, in liquidation amount of the Capital Securities of the Trust as would be entitled to direct the Institutional Trustee under the terms of such Capital Securities in respect of such remedy, right or action, (ii) may refrain from enforcing such remedy or right or taking such other action until such instructions are received, and (iii) shall be protected in conclusively relying on or acting in or accordance with such instructions. PROPOSED TAX LEGISLATION On February 6, 1997, President Clinton proposed certain tax law changes that would, among other things, generally deny corporate issuers a deduction for interest in respect of certain debt obligations 47 issued on or after the date of first committee action (the "Proposed Legislation") if such debt obligations have a maximum term in excess of fifteen years and are not shown as indebtedness on the issuer's separate balance sheet. There can be no assurance, however, that the effective date proposed will not be altered to a retroactive date if the Proposed Legislation is enacted, or that other legislation enacted after the date hereof will not otherwise adversely affect the ability of the Company to deduct the interest payable on the Subordinated Debt Securities. Accordingly, there can be no assurance that a Tax Event will not occur. It is expected that if the Proposed Legislation were to be enacted, such legislation would not apply to the Subordinated Debt Securities. See "Description of the Capital Securities--Tax Event Redemption." GOVERNING LAW The Declaration and the Capital Securities of the Trust will be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to principles of conflict of laws. MISCELLANEOUS The Regular Trustees of the Trust are authorized and directed to operate the Trust in such a way so that the Trust will not be required to register as an "investment company" under the 1940 Act nor be characterized as other than a grantor trust for United States federal income tax purposes. The Company is authorized and directed to conduct its affairs so that the Subordinated Debt Securities will be treated as indebtedness of the Company for United States federal income tax purposes. In this connection, the Company and the Regular Trustees are authorized to take any action, not inconsistent with applicable law, the Declaration or the certificates of incorporation of the Company, that each of the Company and the Regular Trustees determine in their discretion to be necessary or desirable to achieve such end, as long as such action does not adversely affect the interests of the holders of the Capital Securities or vary the terms thereof. Holders of the Capital Securities have no preemptive rights. DESCRIPTION OF THE GUARANTEE Set forth below is a summary of information concerning the Guarantee which has been executed and delivered by the Company for the benefit of the holders from time to time of the Capital Securities. Chase Manhattan Bank is trustee (the "Guarantee Trustee") under the Guarantee. The terms of the Guarantee are those set forth in the Guarantee and those made part of such Guarantee by the Trust Indenture Act. This summary of the material terms of the Guarantee does not purport to be complete and is subject in all respects to the provisions of, and is qualified in its entirety by reference to, the Guarantee (a copy of which has been filed as an exhibit to the Registration Statement of which this Prospectus is a part) and the Trust Indenture Act. The Guarantee will be held by the Guarantee Trustee for the benefit of the holders of the Capital Securities of the Trust. The Guarantee has been qualified under the Trust Indenture Act. GENERAL Pursuant to the Guarantee, the Company has irrevocably and unconditionally agreed, to the extent set forth therein, to pay in full, to the holders of the Capital Securities issued by the Trust, the Guarantee Payments (as defined herein) (except to the extent paid by the Trust), as and when due, regardless of any defense, right of set-off or counterclaim which the Trust may have or assert. The following payments with respect to Capital Securities issued by the Trust, to the extent not paid by the Trust (the "Guarantee Payments"), are subject to the Guarantee (without duplication): (i) any accrued and unpaid distributions which are required to be paid on Capital Securities, to the extent the Trust 48 shall have funds available therefor; (ii) the Redemption Price, to the extent the Trust has funds available therefor, with respect to any Capital Securities called for redemption by the Trust; and (iii) upon a voluntary or involuntary dissolution, winding-up or termination of the Trust (other than in connection with the distribution of Subordinated Debt Securities to the holders of Capital Securities upon the redemption of all of the Capital Securities), the lesser of (a) the aggregate of the liquidation amount and all accrued and unpaid distributions on such Capital Securities to the date of payment, to the extent the Trust has funds available therefor, and (b) the amount of assets of the Trust remaining available for distribution to holders of such Capital Securities in liquidation of the Trust. The Company's obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by the Company to the holders of Capital Securities or by causing the Trust to pay such amounts to such holders. The Guarantee in respect of the Trust will not apply to any payment of distributions except to the extent the Trust shall have funds available therefor, which funds will not be available except to the extent the Company has made payments of interest (or premium, if any) or principal or other payments on the Subordinated Debt Securities purchased by the Trust. See "Description of the Subordinated Debt Securities--Certain Covenants." The Guarantee, when taken together with the Company's obligations under the Subordinated Debt Securities, the Declaration and the Indenture, including its obligations to pay costs, expenses, debts and liabilities of the Trust (other than with respect to the Trust Securities), the Indenture and each Declaration, will provide a full and unconditional guarantee on a subordinated basis by the Company of payments due on the Capital Securities. Because the Guarantee is a guarantee of payment and not of collection, holders of the Capital Securities may proceed directly against the Company as guarantor, rather than having to proceed against the Trust before attempting to collect from the Company, and the Company waives any right or remedy to require that any action be brought against the Trust or any other person or entity before proceeding against the Company. Such obligations will not be discharged except by payment of the Guarantee Payments in full. The Guarantee will be deposited with the Guarantee Trustee to be held for the benefit of the holders of Capital Securities. Except as otherwise noted herein, the Guarantee Trustee has the right to enforce the Guarantee on behalf of the holders of the Capital Securities. The Company has also agreed separately to irrevocably and unconditionally guarantee the obligations of the Trust with respect to Common Securities issued by Trust (the "Common Securities Guarantee") to the same extent as the respective Guarantee, except that upon an event of default under the Declaration of Trust, holders of Capital Securities of the Trust shall have priority over holders of Common Securities of Trust with respect to distributions and payments on liquidation, redemption or otherwise. CERTAIN COVENANTS OF THE COMPANY UNDER THE GUARANTEE In the Guarantee, the Company will covenant that, so long as any Capital Securities issued by the Trust remain outstanding, if the Company shall be in default under such Guarantee or there shall have occurred and be continuing any event that would constitute an event of default under the Declaration of the Trust or an Extension Period shall be continuing, then (a) the Company shall not declare or pay any dividend on, make a distribution with respect to, or redeem, purchase or make a liquidation payment with respect to, any of the Company's capital stock or rights to acquire such capital stock (other than (i) purchases or acquisitions of shares of any such capital stock or rights to acquire such capital stock in connection with the satisfaction by the Company of its obligations under any employee benefit plans, (ii) as a result of a reclassification of the Company's capital stock or rights to acquire such capital stock or the exchange or conversion of one class or series of the Company's capital stock or rights to acquire such capital stock for another class or series of the Company's capital stock or rights to acquire such capital stock, (iii) the purchase of fractional interests in shares of the Company's 49 capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged, or (iv) dividends and distributions made on the Company's capital stock or rights to acquire such capital stock with the Company's capital stock or rights to acquire such capital stock), or make any guarantee payments with respect to the foregoing and (b) the Company shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by the Company that rank pari passu with or junior to the Subordinated Debt Securities. MODIFICATION OF THE GUARANTEE; ASSIGNMENT Except with respect to any changes which do not adversely affect the rights of holders of Capital Securities in any material respect (in which case no vote of such holders will be required), the Guarantee may be amended only with the prior approval of the holders of not less than a majority in liquidation amount of the outstanding Capital Securities issued by such the Trust. All guarantees and agreements contained in the Guarantee shall bind the successors, assigns, receivers, trustees and representatives of the Company and shall inure to the benefit of the holders of the Capital Securities then outstanding. TERMINATION The Guarantee will terminate as to the Capital Securities issued by the Trust (a) upon full payment of the Redemption Price of all Capital Securities of the Trust, (b) upon distribution of the Subordinated Debt Securities held by the Trust to the holders of the Capital Securities of the Trust or (c) upon full payment of the amounts payable in accordance with the Declaration of Trust upon liquidation of the Trust. Notwithstanding the foregoing, the Guarantee will continue to be effective or will be reinstated, as the case may be, if at any time any holder of Capital Securities issued by the Trust must restore payment of any sums paid under such Capital Securities or Guarantee. EVENTS OF DEFAULT An event of default under a Guarantee in respect of the Trust will occur upon the failure of the Company to perform any of its payment or other obligations thereunder. The holders of a majority in liquidation amount of the Capital Securities issued by the Trust have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee in respect of the Guarantee of such Capital Securities or to direct the exercise of any trust or power conferred upon the Guarantee Trustee under such Guarantee. A holder of record of such Capital Securities may institute a legal proceeding directly against the Company to enforce the Guarantee Trustee's rights under such Guarantee, without first instituting a legal proceeding against the Trust, the Guarantee Trustee or any other person or entity. Pursuant to the Guarantee, the Company will waive any right or remedy to require that any action be brought first against the Trust or any other person or entity before proceeding directly against the Company. STATUS OF THE GUARANTEE The Company's obligations under the Guarantee are subordinate and junior in right of payment to all present and future Senior Indebtedness (as defined herein) of the Company and are also effectively subordinated to claims of creditors of the Company's subsidiaries. The terms of the Capital Securities provide that each holder of Capital Securities issued by the Trust by acceptance thereof agrees to the subordination provisions and other terms of the Guarantee relating thereto. Because the Company is a holding company, the right of the Company to participate in any distribution of assets of any subsidiary upon such subsidiary's liquidation or reorganization or otherwise is subject to the prior claims of creditors of that subsidiary, except to the extent the Company may itself be recognized as a 50 creditor of that subsidiary. Accordingly, the Company's obligations under the Guarantee will be effectively subordinated to all existing and future liabilities of the Company's subsidiaries, and claimants should look only to the assets of the Company for payments thereunder. See "Marshall & Ilsley Corporation." The Guarantee does not limit the incurrence or issuance of other secured or unsecured debt of the Company, including Senior Indebtedness, whether under the Indenture, any other indenture that the Company may enter into in the future or otherwise. INFORMATION CONCERNING THE GUARANTEE TRUSTEE The Guarantee Trustee, prior to the occurrence of a default with respect to the Guarantee and after the curing of all defaults that may have occurred, undertakes to perform only such duties as are specifically set forth in such Guarantee and, after default, shall exercise such of the rights and powers vested in it by such Guarantee, and use the same degree of care and skill in their exercise, as a prudent individual would exercise or use in the conduct of his or her own affairs. Subject to such provisions, the Trustee is under no obligation to exercise any of the powers vested in it by the Guarantee at the request of any holder of Capital Securities, unless offered reasonable indemnity against the costs, expenses and liabilities which might be incurred thereby. The Company and certain of its affiliates maintain a banking relationship with the Guarantee Trustee. GOVERNING LAW The Guarantee is governed by and construed in accordance with the laws of the State of New York, without regard to conflict of laws principles. DESCRIPTION OF THE SUBORDINATED DEBT SECURITIES Set forth below is a description of the principal terms of the Subordinated Debt Securities. The following description does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the Indenture, dated as of December 9, 1996 (the "Base Indenture"), among the Company and The Chase Manhattan Bank, as trustee (the "Debt Trustee"), as supplemented by a First Supplemental Indenture dated as of December 9, 1996 (the Base Indenture, as so supplemented, is herein referred to as the "Indenture".) Certain capitalized terms used herein are defined in the Indenture. The terms of the Indenture will be those set forth in the Indenture and those made part thereof by the Trust Indenture Act. The Indenture, by its terms, requires the Company and the Debt Trustee to comply with the Trust Indenture Act. This summary of the material terms of the Indenture does not purport to be complete and is subject in all respects to the provisions of, and is qualified in its entirety by reference to, the Indenture (a copy of which has been filed as an exhibit to the Registration Statement of which this Prospectus is a part) and the Trust Indenture Act. The Indenture has been qualified under the Trust Indenture Act. Certain capitalized terms used herein are defined in the Indenture. Under certain circumstances involving the dissolution of the Trust following the occurrence of a Tax Event, Subordinated Debt Securities may be distributed to the holders of the Trust Securities of the Trust in liquidation of the Trust. See "Description of the Capital Securities--Tax Event Redemption." GENERAL Concurrently with the issuance of the Old Capital Securities, the Trust invested the proceeds thereof, together with the consideration paid by the Company for the Common Securities, in the Old Subordinated Debt Securities issued by the Company. The Old Subordinated Debt Securities were and the New Subordinated Debt Securities exchanged for the Old Subordinated Debt Securities under the 51 Exchange Offer will be issued as unsecured debt under the Indenture. Subordinated Debt Securities will be limited to such amount being the sum of the aggregate stated liquidation amounts of the Trust Securities of the Trust. The amount of securities that may be issued under the Indenture is unlimited. The Subordinated Debt Securities are not subject to a sinking fund provision. The entire principal amount of the Subordinated Debt Securities will mature and become due and payable, together with any accrued and unpaid interest thereon including Compounded Interest (as defined herein) and Additional Interest (as defined herein), if any, on December 1, 2026. If the Subordinated Debt Securities are distributed to holders of Capital Securities of the Trust in liquidation of such holders' interests in Trust, the Subordinated Debt Securities will, with respect to Capital Securities in book-entry Form, initially be issued as a Global Security (as defined herein) having an aggregate principal amount equal to the liquidation amount of such Capital Securities and, with respect to such Capital Securities held in Certificated non-book entry form, will initially be deemed to be represented by such certificates and to have an aggregate principal amount equal to the liquidation amount of such Capital Securities. As described herein, under certain limited circumstances, Subordinated Debt Securities may be issued in certificated non-book entry form in exchange for a Global Security. See "-- Book-Entry and Settlement" below. Subordinated Debt Securities deemed to be represented by a Capital Security certificate will be issued in certificated form upon presentation for transfer or reissuance. In the event that Subordinated Debt Securities are issued in certificated non- book entry form, such Subordinated Debt Securities will be in denominations of $1,000 and integral multiples thereof and may be transferred or exchanged at the offices described below. Payments on Subordinated Debt Securities issued as a Global Security will be made to DTC, a successor depositary or, in the event that no depositary is used, to a paying agent for the Subordinated Debt Securities. In the event Subordinated Debt Securities are issued in certificated non-book entry form, interest or principal (and premium, if any) will be payable, the transfer of the Subordinated Debt Securities will be registrable and Subordinated Debt Securities will be exchangeable for Subordinated Debt Securities of other denominations of a like aggregate principal amount at the corporate trust office of the Debt Trustee in New York, New York; provided that payment of interest may be made at the option of the Company by check mailed to the address of the holder entitled thereto or by wire transfer to an account appropriately designated by the holder entitled thereto. Notwithstanding the foregoing, so long as the holder of any Subordinated Debt Securities is the Institutional Trustee, the payment of interest or principal (and premium, if any) on the Subordinated Debt Securities held by such Institutional Trustee will be made at such place and to such account as may be designated by such Institutional Trustee. The Indenture does not contain provisions that afford holders of the Subordinated Debt Securities protection in the event of a highly leveraged transaction or other similar transaction involving the Company that may adversely affect such holders. SUBORDINATION The Indenture provides that the Subordinated Debt Securities are subordinated and junior in right of payment to all present and future Senior Indebtedness of the Company. No payment of principal (including redemption payments), premium, if any, or interest on the Subordinated Debt Securities may be made (in cash, property, securities, by set-off or otherwise) if (i) any Senior Indebtedness of the Company, as the case may be, is not paid when due and any applicable grace period with respect to a payment default under such Senior Indebtedness has ended and such default has not been cured or waived or ceased to exist or (ii) the maturity of any Senior Indebtedness of the Company has been accelerated because of a default. Upon any distribution of assets of the Company to creditors upon any dissolution, winding-up, liquidation or reorganization, whether voluntary or involuntary, or in bankruptcy, insolvency, receivership or other proceedings, all principal, premium, if any, and interest 52 due or to become due on all Senior Indebtedness of the Company must be paid in full before the holders of Subordinated Debt Securities are entitled to receive or retain any payment. Upon satisfaction of all claims of all Senior Indebtedness then outstanding, the rights of the holders of the Subordinated Debt Securities will be subrogated to the rights of the holders of Senior Indebtedness of the Company to receive payments or distributions applicable to Senior Indebtedness until all amounts owing on the Subordinated Debt Securities are paid in full. The term "Senior Indebtedness" means, with respect to the Company (i) the principal, premium, if any, and interest in respect of (A) indebtedness of such obligor for money borrowed and (B) indebtedness evidenced by securities, debentures, notes, bonds or other similar instruments issued by such obligor, including, without limitation, any current of future indebtedness under any indenture (other than the Indenture) to which the Company is party; (ii) the Company's 8 1/2% Convertible Subordinated Notes due 1997; (iii) any current or future indebtedness issued under that certain indenture dated as of July 15, 1993 between the Company and Chemical Bank, as Trustee, as such indenture may be amended from time to time; (iv) all capital lease obligations of such obligor, (v) all obligations of such obligor issued or assumed as the deferred purchase price of property, all conditional sale obligations of such obligor and all obligations of such obligor under any title retention agreement, (vi) all obligations of such obligor for the reimbursement on any letter of credit, any banker's acceptance, any security purchase facility, any repurchase agreement or similar arrangement, any interest rate swap, any other hedging arrangement, any obligation under options or any similar credit or other transaction, (vii) all obligations of the type referred to in clauses (i) through (vi) above of other persons for the payment of which such obligor is responsible or liable as obligor, guarantor or otherwise and (viii) all obligations of the type referred to in clauses (i) through (vii) above of other persons secured by any lien on any property or asset of such obligor (whether or not such obligation is assumed by such obligor), except for (1) any indebtedness between or among the Company or any affiliate of the Company, (2) any other debt securities issued pursuant to the Indenture and guarantees in respect of those debt securities and (3) any obligation as to which, in the instrument creating or evidencing the same or pursuant to which the same is outstanding, it is specifically designated by express provision that such obligation is not Senior Indebtedness. Such Senior Indebtedness shall continue to be Senior Indebtedness and be entitled to the benefits of the subordination provisions irrespective of any amendment, modification or waiver of any term of such Senior Indebtedness. The Company is legal entity separate and distinct from its banking and non- banking affiliates. The Company's principal assets are the stock of its bank and non-bank subsidiaries and the assets of M&I Data Services. The Company relies primarily on dividends from such subsidiaries to meet its obligations for payment of principal and interest on its outstanding debt obligations and corporate expenses. The principal sources of the Company's' income are dividends, interest and fees from the banking and non-banking affiliates. The bank subsidiaries of the Company are subject to certain restrictions imposed by federal law on any extensions of credit to, and certain other transactions with the Company and certain other affiliates and on investments in stock or other securities thereof. In addition, payment of dividends to the Company by the subsidiary banks is subject to ongoing review by banking regulators and is subject to various statutory limitations and in certain circumstances requires approval by banking regulatory authorities. Accordingly, the Subordinated Debt Securities will be effectively subordinated to all existing and future liabilities of the Company's subsidiaries. The Indenture does not limit the aggregate amount of Senior Indebtedness that may be issued by the Company. As of December 31, 1996, the Company had approximately $257 million principal amount of Senior Indebtedness (excluding indebtedness of subsidiaries of the Company) and the Company's subsidiaries had in the aggregate approximately $1.7 billion of indebtedness. REDEMPTION The Company may redeem the Subordinated Debt Securities, in whole or in part, at any time and from time to time, on or after December 1, 2006 upon not less than 30 nor more than 60 days' notice, 53 at the Call Price described under "Description of the Capital Securities-- Redemption," plus accrued and unpaid interest to the redemption date. In addition, Subordinated Debt Securities may be redeemed by the Company at any time in certain circumstances upon the occurrence of a Tax Event as described under "Description of the Capital Securities--Tax Event Redemption," upon not less than 30 nor more than 60 days' notice, at a redemption price equal to 100% of the principal amount to be redeemed plus any accrued and unpaid interest to the redemption date. Either redemption prior to maturity is subject to the Company having received prior approval of the Federal Reserve to do so if then required under applicable capital guidelines or policies of the Federal Reserve. INTEREST Subordinated Debt Securities shall bear interest at the rate of 7.65% per annum, from the original date of issuance, payable semiannually in arrears on June 1 and December 1 of each year (each an "Interest Payment Date"), commencing June 1, 1997, to the person in whose name such Subordinated Debt Security is registered, subject to certain exceptions, at the close of business on the Business Day next preceding such Interest Payment Date. The term "interest" as used herein, as such term relates to the Subordinated Debt Securities, includes any Compounded Interest, Additional Interest or Special Payment payable unless otherwise stated. In the event the Subordinated Debt Securities shall not be held solely in book-entry only form, the Company shall select relevant record dates, which shall be 15 days prior to the relevant Interest Payment Date. The amount of interest payable for any period will be computed on the basis of a 360-day year of twelve 30-day months. The amount of interest payable for any period shorter than a full semiannual period for which interest is computed will be computed on the basis of the actual number of days elapsed per 30-day month. In the event that any date on which interest is payable on the Subordinated Debt Securities is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay) with the same force and effect as if made on such date. OPTION TO EXTEND INTEREST PAYMENT PERIOD So long as the Company is not in default in the payment of interest that has become due and payable on the Subordinated Debt Securities and no accrued interest from a prior completed Extension Period is unpaid, the Company shall have the right to defer payments of interest on the Subordinated Debt Securities by extending the interest payment period, at any time and from time to time, for Extension Periods, each not exceeding 10 consecutive semiannual periods, and on the date on which each such Extension Period ends or, if such date is not an Interest Payment Date, on the immediately following Interest Payment Date, the Company shall pay all interest then accrued and unpaid, together with interest thereon compounded semiannually at the rate specified for the Subordinated Debt Securities to the extent permitted by applicable law ("Compounded Interest"); provided that during any Extension Period (a) the Company shall not declare or pay dividends on, make any distribution with respect to, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of its capital stock or rights to acquire such capital stock (other than (i) purchases or acquisitions of shares of any such capital stock or rights to acquire such capital stock in connection with the satisfaction by the Company, respectively, of its obligations under any employee benefit plans, (ii) as a result of a reclassification of the Company's capital stock or rights to acquire such capital stock or the exchange or conversion of one class or series of the Company's capital stock or rights to acquire such capital stock for another class or series of the Company's capital stock or rights to acquire such capital stock, (iii) the purchase of fractional interests in shares of the Company's capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged 54 or (iv) dividends and distributions made on the Company's capital stock or rights to acquire such capital stock with the Company's capital stock or rights to acquire such capital stock), or make any guarantee payments with respect to the foregoing, and (b) the Company shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by the Company that rank pari passu with or junior to the Subordinated Debt Securities. Prior to the termination of any such Extension Period, the Company may further defer payments of interest by extending the interest payment period; provided, however, that each such Extension Period, including all such previous and further extension thereof, may not exceed 10 consecutive semiannual periods or extend beyond the maturity of the Subordinated Debt Securities. Upon the termination of any Extension Period and the payment of all amounts then due, the Company may commence a new Extension Period, subject to the terms set forth in this section. No interest during an Extension Period, except on the date on which such Extension Period terminates (or if such date is not an Interest Payment Date, on the immediately following Interest Payment Date), shall be due and payable. The Company has no present intention of exercising its right to defer payments of interest on the Subordinated Debt Securities. If the Institutional Trustee shall be the sole holder of the Subordinated Debt Securities, the Company shall give the Regular Trustees, the Institutional Trustee and the Debt Trustee notice of its initiation of any Extension Period one Business Day prior to the earlier of (i) the date distributions on the Capital Securities of the Trust are payable or (ii) the date the Regular Trustees of the Trust are required to give notice to holders of the Capital Securities of the Trust (or any national securities exchange or other organization on which the Capital Securities are listed, if any) of the record date or the distribution payment date, in each case with respect to distributions on the Trust Securities of the Trust the payment of which is being deferred. The Regular Trustees of the Trust shall give notice of the Company's initiation of any Extension Period to the holders of such Capital Securities. If the Institutional Trustee shall not be the sole holder of the Subordinated Debt Securities, the Company shall give the holders of such Subordinated Debt Securities notice of its initiation of such Extension Period at least 10 Business Days prior to the earlier of (i) the next succeeding Interest Payment Date or (ii) the date upon which the Company is required to give notice to holders of such Subordinated Debt Securities (or any national securities exchange or other organization on which the corresponding Capital Securities are listed, if any) of the record date or interest payment date, in each case with respect to interest payments the payment of which is being deferred. ADDITIONAL INTEREST If at any time the Trust shall be required to pay any taxes, duties, assessments or governmental charges of whatever nature (other than withholding taxes) imposed by the United States, or any other taxing authority, then, in any such case, the Company will pay as additional interest ("Additional Interest") on the Subordinated Debt Securities held by the Institutional Trustee such additional amounts as shall be required so that the net amounts received and retained by the Trust after paying any such taxes, duties, assessments or other governmental charges will equal the amounts the Trust and the Institutional Trustee would have received had no such taxes, duties, assessments or other governmental charges been imposed. PROPOSED TAX LEGISLATION On February 6, 1997, President Clinton proposed the Proposed Legislation which, among other things, would generally deny corporate issuers a deduction for interest in respect of certain debt obligations issued on or after the date of first committee action, if such debt obligations have a maximum term in excess of fifteen years and are not shown as indebtedness on the issuer's separate balance sheet. There can be no assurance, however, that the effective date proposed will not be altered to a retroactive date if the Proposed Legislation is enacted, or that other legislation enacted 55 after the date hereof will not otherwise adversely affect the ability of the Company to deduct the interest payable on the Subordinated Debt Securities. Accordingly, there can be no assurance that a Tax Event will not occur. It is expected that if the Proposed Legislation were to be enacted, such legislation would not apply to the Subordinated Debt Securities. See "Description of the Capital Securities--Tax Event Redemption." CERTAIN COVENANTS If (i) there shall have occurred and be continuing any event that would constitute an Event of Default (as defined herein), (ii) the Company shall be in default with respect to its payment of any obligations under the Guarantee or Common Securities Guarantee (as defined in the Indenture), or (iii) the Company shall have given notice of its election to defer payments of interest on the Subordinated Debt Securities by extending the interest payment period as provided in the Indenture and such period, or any extension thereof, shall be continuing, then (a) the Company shall not declare or pay any dividend on, make a distribution with respect to, or redeem, purchase or make a liquidation payment with respect to, any of its capital stock or rights to acquire such capital stock (other than (i) purchases or acquisitions of shares of any such capital stock or rights to acquire such capital stock in connection with the satisfaction by the Company of its obligations under any employee benefit plans, (ii) as a result of a reclassification of the Company's capital stock or rights to acquire such capital stock or the exchange or conversion of one class or series of the Company's capital stock or rights to acquire such capital stock for another class or series of the Company's capital stock or rights to acquire such capital stock, (iii) the purchase of fractional interests in shares of the Company's capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged, or (iv) dividends and distributions made on the Company's capital stock or rights to acquire such capital stock with the Company's capital stock or rights to acquire such capital stock), or make any guarantee payments with respect to the foregoing and (b) the Company shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by the Company that rank pari passu with or junior to such Subordinated Debt Securities. For so long as the Trust Securities remain outstanding, the Company will covenant (i) to maintain 100% ownership of the Common Securities of the Trust; provided, however, that any permitted successor of the Company under the Indenture may succeed to the Company's ownership of such Common Securities, (ii) to use its reasonable efforts to cause the Trust (a) to remain a statutory business trust, except in connection with the distribution of Subordinated Debt Securities to the holders of Trust Securities in liquidation of the Trust, the redemption of all of the Trust Securities of the Trust or certain mergers, consolidations or amalgamations, each as permitted by the Declaration, and (b) to otherwise continue to be classified as a grantor trust for United States federal income tax purposes and (iii) to use its reasonable efforts to cause each holder of Trust Securities issued by the Trust to be treated as owning an undivided beneficial interest in the Subordinated Debt Securities issued to the Trust. LIMITATION ON MERGERS AND SALES OF ASSETS Nothing contained in the Indenture or in the Subordinated Debt Securities shall prevent any consolidation or merger of the Company with or into any other corporation (whether or not affiliated with the Company) or successive consolidations or mergers in which the Company or its successor or successors shall be a party, or shall prevent any sale, conveyance, transfer or other disposition of the property of the Company or its successor or successors as an entirety, or substantially as an entirety, to any other corporation (whether or not affiliated with the Company or its successor or successors) authorized to acquire and operate the same; provided, however, that the Company shall, upon any such consolidation, merger, sale, conveyance, transfer or other disposition, cause the obligations of the Company under Subordinated Debt Securities and under the Indenture, to be expressly assumed, 56 by supplemental indenture satisfactory in form to the Debt Trustee and executed and delivered to the Debt Trustee, by the successor entity formed by such consolidation or into which the Company shall have been merged, or which shall have acquired such property. Upon execution and delivery of such supplemental indenture to the Debt Trustee, such successor entity will be substituted under the Indenture and thereupon the Company will be relieved of any further liability or obligation thereunder. EVENTS OF DEFAULT, WAIVER AND NOTICE The Indenture provides that any one or more of the following described events which has occurred and is continuing with respect to the Subordinated Debt Securities constitutes an "Event of Default" with respect to the Subordinated Debt Securities: (a) default for 30 days in payment of any interest on the Subordinated Debt Securities, including any Compounded Interest, Additional Interest or Special Payment in respect thereof, when due; provided, however, that a valid extension of the interest payment period by the Company shall not constitute a default in the payment of interest for this purpose; or (b) default in payment of principal and premium, if any, on the Subordinated Debt Securities when due either at maturity, upon redemption, by declaration or otherwise; provided, however, that a valid extension of the maturity of such Subordinated Debt Securities shall not constitute a default for this purpose; or (c) default by the Company in the performance of any other of the covenants or agreements in the Indenture which shall not have been remedied for a period of 90 days after notice; or (d) certain events of bankruptcy, insolvency or reorganization of the Company; or (e) as to Subordinated Debt Securities issued to the Trust, the voluntary or involuntary dissolution, winding-up or termination of the Trust, except in connection with the distribution of Subordinated Debt Securities to the holders of Trust Securities in liquidation of the Trust, the redemption of all of the Trust Securities of the Trust, or certain mergers, consolidations or amalgamations, each as permitted by the Declaration of Trust. The Indenture provides that the Debt Trustee may, under certain circumstances, withhold from the holders notice of default with respect to the Subordinated Debt Securities (except for any default in payment of principal of or interest or premium on the Subordinated Debt Securities) if the Trustee considers it in the interest of such holders to do so. The Indenture provides that if an Event of Default in respect of the Subordinated Debt Securities shall have occurred and be continuing, either the Debt Trustee or the holders of not less than 25% in aggregate principal amount of the Subordinated Debt Securities then outstanding may declare the principal of and accrued interest on all Subordinated Debt Securities to be due and payable immediately, but upon certain conditions such declarations may be annulled and past defaults may be waived (except defaults in payment of principal of or interest or premium on the Subordinated Debt Securities, which must be cured or paid in full) by the holders of a majority in aggregate principal amount of the Subordinated Debt Securities then outstanding. No holder of any Subordinated Debt Security shall have any right to institute any suit, action or proceeding for any remedy under the Indenture, unless such holder previously shall have given to the Debt Trustee written notice of a continuing Event of Default with respect to the Subordinated Debt Securities and unless the holders of not less than 25% in aggregate principal amount of the Subordinated Debt Securities then outstanding shall have given the Debt Trustee a written request to institute such action, suit or proceeding and shall have offered to the Debt Trustee such reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred thereby, and the Debt Trustee for 60 days after its receipt of such notice, request and offer of indemnity shall have failed to institute any such action, suit or proceeding; provided that no holder of Subordinated Debt Securities 57 shall have any right to prejudice the rights of any other holder of Subordinated Debt Securities, obtain priority or preference over any other such holder or enforce any right under this Indenture except as provided in the Indenture and for the equal, ratable and common benefit of all holders of Subordinated Debt Securities. Notwithstanding the foregoing, the right of any holder of any Subordinated Debt Security to receive payment of the principal of, premium, if any, and interest, on such Subordinated Debt Security when due, or to institute suit for the enforcement of any such payment, shall not be impaired or affected without the consent of such holder. The holders of a majority in aggregate principal amount of the Subordinated Debt Securities then outstanding shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to, or exercising any trust or power conferred on, the Debt Trustee under the Indenture; provided, however, that, except under certain circumstances, the Debt Trustee may decline to follow any such direction if the Debt Trustee determines that the action so directed would be unjustly prejudicial to holders not taking part in such direction or would be unlawful or would involve the Debt Trustee in personal liability. The Indenture requires the annual filing by the Company with the Debt Trustee of a certificate as to the absence of certain defaults under the Indenture. An Event of Default under the Indenture also constitutes a Declaration Event of Default. The holders of Capital Securities of the Trust in certain circumstances have the right to direct the Institutional Trustee of Trust to exercise its rights as the holder of the Subordinated Debt Securities. See "Description of the Capital Securities--Declaration Events of Default" and "-- Voting Rights." Notwithstanding the foregoing, if an Indenture Event of Default has occurred and is continuing and such event is attributable to the failure of the Company to pay interest or principal (or premium, if any) on the Subordinated Debt Securities on the respective dates such interest or principal (or premium, if any) is payable (or in the case of redemption, on the redemption date), the Company acknowledges that a holder of record of Capital Securities of the Trust may institute a Direct Action for payment, on or after the respective due dates specified in such Subordinated Debt Securities, to such holder directly of the principal of (or premium, if any) or interest on Subordinated Debt Securities having an aggregate principal amount equal to the aggregate liquidation amount of the Capital Securities of such holder. Notwithstanding any payments made to such holder of Capital Securities by the Company in connection with a Direct Action, the Company shall remain obligated to pay the principal of (or premium, if any) or interest on the Subordinated Debt Securities held by the Trust or the Institutional Trustee, and the Company shall be subrogated to the rights of such holder of such Capital Securities under the Declaration to the extent of any payments made by the Company to such holder in any Direct Action; provided, however, that no such subrogation right may be exercised so long as a Declaration Event of Default has occurred and is continuing. Except to the extent described above under "Description of the Capital Securities-- Declaration Events of Default" and "--Voting Rights," the holders of Capital Securities will not be able to exercise directly any other remedy available to the holders of the Subordinated Debt Securities. MODIFICATION OF THE INDENTURE The Indenture contains provisions permitting the Company and the Debt Trustee, with the consent of the holders of not less than a majority in principal amount of the Subordinated Debt Securities by such modification at the time outstanding, to modify the Indenture or any supplemental indenture or the rights of the holders of the Subordinated Debt Securities; provided, however, that no such modification shall without the consent of the holder of each Subordinated Debt Security so affected (i) extend the fixed maturity of any Subordinated Debt Security, or reduce the principal amount thereof or any premium thereon, or reduce any amount payable on redemption thereof, or reduce the rate or extend the time of payment of interest thereon, or make the principal of, or interest or premium on, the Subordinated Debt Securities payable in any coin or currency other than that provided in the Subordinated Debt Securities, or reduce the amount of principal of an OID security that would be due 58 and payable upon an acceleration of the maturity thereof or the amount payable thereof in bankruptcy or impair or affect the right of any holder of Subordinated Debt Securities to institute suit for the payment thereof or (ii) reduce the aforesaid percentage of Subordinated Debt Securities the consent of the holders of which is required for any such modification. The Company and the Debt Trustee may enter into supplemental indentures, without the consent of any holder of the Subordinated Debt Securities: (i) to evidence the succession of another corporation to the Company and the assumption by the successor corporation of the covenants, agreements and obligations of the Company pursuant to the Indenture; (ii) to add to the covenants of the Company such further covenants, restrictions or conditions for the protection of the holders of the Subordinated Debt Securities and to make the occurrence, or the occurrence and continuance (including any or no grace periods), of a default in any of such additional covenants, restrictions or conditions a default or an Event of Default permitting the enforcement of remedies provided in the Indenture; (iii) to cure any ambiguity or to correct or supplement any provision contained in the Indenture or in any supplemental indenture which may be defective or inconsistent with any other provision contained therein or in any supplemental indenture, or to make such other provisions in regard to matters or questions arising under the Indenture; provided that any such action shall not adversely affect the interests of the holders of the Subordinated Debt Securities; (iv) to add on, delete from, or revise the terms of the Subordinated Debt Securities to provide for transfer procedures and restrictions substantially similar to those applicable to the Capital Securities (for purposes of assuring that no registration of Subordinated Debt Securities is required under the Securities Act); (v) to evidence and provide for the acceptance of appointment under the Indenture by a successor Debt Trustee with respect to the Subordinated Debt Securities and to add to or change any of the provisions of the Indenture as shall be necessary to provide for or facilitate the administration of the trust under the Indenture by more than one Debt Trustee, pursuant to the Indenture; (vi) to make any change that does not adversely affect the rights of any holder of any Subordinated Debt Security in any material respect; or (vii) to provide for the issuance, and establish the form and terms and conditions, of the Subordinated Debt Securities, to establish the form of any certifications required to be furnished pursuant to the terms of the Indenture or the Subordinated Debt Securities or to add to the rights of the holders of the Subordinated Debt Securities. THE DEBT TRUSTEE The Company may have normal banking relationships with the Debt Trustee in the ordinary course of business. BOOK-ENTRY AND SETTLEMENT If distributed to holders of Capital Securities of the Trust in connection with the involuntary or voluntary dissolution, winding-up or liquidation of the Trust as a result of the occurrence of a Tax Event, the Subordinated Debt Securities will with respect to such Capital Securities held in book-entry form, initially be issued in the form of one or more global certificates (each a "Global Security") registered in the name of the Depositary or its nominee. Except under the limited circumstances described below, Subordinated Debt Securities represented by a Global Security will not be exchangeable for, and will not otherwise be issuable as, Subordinated Debt Securities in definitive form. The Global Securities described above may not be transferred except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or to a successor depositary or its nominee. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of such securities in definitive form. Such laws may impair the ability to transfer beneficial interests in such a Global Security. 59 Except as provided below, owners of beneficial interests in a Global Security will not be entitled to receive physical delivery of Subordinated Debt Securities in definitive form and will not be considered the holders (as defined in the Indenture) thereof for any purpose under the Indenture, and no Global Security representing Subordinated Debt Securities shall be exchangeable, except for another Global Security of like denomination and tenor to be registered in the name of the Depositary or its nominee or to a successor Depositary or its nominee. Accordingly, each Beneficial Owner must rely on the procedures of the Depositary or if such person is not a Participant, on the procedures of the Participant through which such person owns its interest to exercise any rights of a holder under the Indenture. THE DEPOSITARY If Subordinated Debt Securities are distributed to holders of Capital Securities in liquidation of such holders' interests in the Trust, DTC will act as securities Depositary for the Subordinated Debt Securities issued by the Trust with respect to Capital Securities held in book-entry form. For a description of DTC and the specific terms of the depositary arrangements, see "Description of the Capital Securities--Book-Entry Only Issuance--The Depository Trust Company." As of the date of this Prospectus, the description herein of DTC's book-entry system and DTC's practices as they relate to purchases, transfers, notices and payments with respect to the Capital Securities apply in all material respects to any debt obligations represented by one or more Global Securities held by DTC. The Company may appoint a successor to DTC or any successor depositary in the event DTC or such successor depositary is unable or unwilling to continue as the Depositary for the Global Securities. None of the Company, the Trust, the Institutional Trustee any paying agent and any other agent of the Company, or the Debt Trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a Global Security for the Subordinated Debt Securities or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. DISCONTINUANCE OF THE DEPOSITARY'S SERVICES A Global Security shall be exchangeable for Subordinated Debt Securities registered in the names of persons other than the Depositary or its nominee only if (i) the Depositary notifies the Company that it is unwilling or unable to continue as a depositary for such Global Security and no successor depositary shall have been appointed, (ii) the Depositary, at any time, ceases to be a clearing agency registered under the Exchange Act at which time the Depositary is required to be so registered to act as such depositary and no successor depositary shall have been appointed, (iii) the Company, in its sole discretion, determines that such Global Security shall be so exchangeable or (iv) there shall have occurred an Indenture Event of Default. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Subordinated Debt Securities registered in such names as the Depositary shall direct. It is expected that such instructions will be based upon directions received by the Depositary from its Participants with respect to ownership of beneficial interests in such Global Security. RESTRICTIONS ON TRANSFER The Subordinated Debt Securities will be issued and may be transferred only in blocks having a liquidation amount of not less than $100,000. Any such transfer of Subordinated Debt Securities in a block having a liquidation amount of less than $100,000 shall be deemed to be null and void and of no legal effect whatsoever. Any such transferee shall be deemed not to be the holder of such Subordinated Debt Securities for any purpose, including but not limited to the receipt of payments on such Subordinated Debt Securities, and such transferee shall be deemed to have no interest whatsoever in such Subordinated Debt Securities. 60 GOVERNING LAW The Indenture and the Subordinated Debt Securities will be governed by, and construed in accordance with, the laws of the State of New York, without regard to conflict of laws principles. MISCELLANEOUS The Indenture provides that the Company will pay all fees and expenses related to (i) the offering and sale of the Trust Securities and the Subordinated Debt Securities, (ii) the organization, maintenance and dissolution of the Trust, (iii) the retention of the M&I Trustees and (iv) the enforcement by the Institutional Trustee of the rights of the holders of the Capital Securities. The Company will have the right at all times to assign any of its respective rights or obligations under the Indenture to a direct or indirect wholly-owned subsidiary of the Company; provided that, in the event of any such assignment, the Company, as the case may be, will remain liable for all of their respective obligations. Subject to the foregoing, the Indenture will be binding upon and inure to the benefit of the parties thereto and their respective successors and assigns. The Indenture provides that it may not otherwise be assigned by the parties thereto. EFFECT OF OBLIGATIONS UNDER THE SUBORDINATED DEBT SECURITIES AND THE GUARANTEE As set forth in the Declaration, the sole purpose of the Trust is to issue and sell the Trust Securities evidencing undivided beneficial interests in the assets of the Trust, and to invest the proceeds from such issuance and sale in the Subordinated Debt Securities issued by the Company in accordance with such Trust Securities. As long as payments of interest and other payments are made when due on the Subordinated Debt Securities, such payments will be sufficient to cover distributions and payments due on the Trust Securities issued by the Trust because of the following factors: (i) the aggregate principal amount of Subordinated Debt Securities will be equal to the aggregate stated liquidation amount of such Trust Securities; (ii) the interest rate and the interest and other payment dates on the Subordinated Debt Securities will match the distribution rate and distribution and other payment dates for such Capital Securities; (iii) the Company shall pay all, and the Trust shall not be obligated to pay directly or indirectly any, costs, expenses, debts, and obligations of the Trust (other than with respect to such Trust Securities); and (iv) the Declaration of the Trust further provides that the Trustees of the Trust shall not take or cause or permit the Trust to, among other things, engage in any activity that is not consistent with the purposes of the Trust. Payments of distributions (to the extent funds therefor are available to the Trust) and other payments due on such Capital Securities (to the extent funds therefor are available to the Trust) are guaranteed by the Company as described under "Description of the Guarantee." If the Company does not make interest payments on the Subordinated Debt Securities, it is expected that the Trust will not have sufficient funds to pay distributions on such Capital Securities. The Guarantee will not apply to any payment of distributions except to the extent that Trust has funds available for the payment of such distributions. The Guarantee will cover the payment of distributions and other payments on such Capital Securities only if and to the extent that the Company has made payments of interest or principal (or premium, if any) on the Subordinated Debt Securities held by the Trust as its sole assets. The Guarantee, when taken together with the Company's obligations under the Subordinated Debt Securities, the Declaration and the Indenture, including its obligations to pay costs, expenses, debts and liabilities of the Trust (other than with respect to the Trust Securities), the Indenture and the Declaration, provide a full and unconditional guarantee on a subordinated basis by the Company of amounts when due on such Capital Securities issued by the Trust. 61 If the Company fails to make interest or other payments on the Subordinated Debt Securities when due (after giving effect to any Extension Period), the Declaration provides a mechanism whereby the holders of the Capital Securities, using the procedures described herein under "Description of the Capital Securities--Book-Entry Only Issuance--The Depository Trust Company" and "--Voting Rights," may direct the Institutional Trustee, to the fullest extent permitted by law to enforce its rights under the Subordinated Debt Securities. If the Institutional Trustee fails to enforce its rights under the Subordinated Debt Securities after a majority in liquidation amount of Capital Securities have so directed the Institutional Trustee, a holder of record of the Capital Securities may institute a legal proceeding against the Company to enforce the Institutional Trustee's rights under the Subordinated Debt Securities without first instituting any legal proceedings against the Institutional Trustee or any other person or entity. Notwithstanding the foregoing, if a Declaration Event of Default has occurred and is continuing and such event is attributable to the failure of the Company to pay principal (or premium, if any) or interest on the Subordinated Debt Securities on the respective dates such principal (or premium, if any) or interest is payable (or in the case of redemption, on the redemption date), then a holder of record of Capital Securities may institute a Direct Action for payment on or after the respective due dates specified in the Subordinated Debt Securities. In connection with such Direct Action, the Company will be subrogated to the rights of such holder of Capital Securities under the Declaration to the extent of any payment made by the Company to such holder of Capital Securities in such Direct Action; provided, however, that no such subrogation right may be exercised so long as a Declaration Event of Default has occurred and is continuing. Because the Company is a holding company, the Subordinated Debt Securities and the Guarantee are effectively subordinated to all existing and future liabilities, including trade payables, of the Company's subsidiaries, except to the extent that the Company is a creditor of the subsidiaries recognized as such. PLAN OF DISTRIBUTION Each broker-dealer that receives New Capital Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such New Capital Securities. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of New Capital Securities received in exchange for Old Capital Securities where such New Capital Securities were acquired as a result of market-making activities or other trading activities. The Company and the Trust have agreed that, starting on the date of the original issuance of the Old Capital Securities and ending on the close of business one year after such date, they will make this Prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. In addition, until June 9, 1997, all dealers offering transactions in the New Capital Securities may be required to deliver a Prospectus. The Company and the Trust will not receive any proceeds from any sale of New Capital Securities by broker-dealers. New Capital Securities received by broker-dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the New Capital Securities or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer and/or the purchasers of any such New Capital Securities. Any broker-dealer that resells New Capital Securities that were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of such New Capital Securities may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit of any such resale of New Capital Securities and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under 62 the Securities Act. The Letter of Transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. Each broker-dealer that surrenders Old Capital Securities pursuant to the Exchange Offer will be deemed to have agreed, by execution of the Letter of Transmittal, to comply with applicable laws in connection with offers and sales by way of this Prospectus including without limitation the prospectus delivery requirements of the Securities Act, the applicable requirements of Rules 10b-5 under the Exchange Act and Regulation M, and to discontinue offers and sales upon notice from the Company of the happening of any event that requires the making of changes in the Registration Statement or the Prospectus so that the statements therein are not misleading and do not omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in light of the circumstances under which they were made) not misleading. The Company has agreed, subject to certain exceptions, to make any such required change promptly following the occurrence of any such event. For a period of one year after the original issuance of the Old Capital Securities, the Company and the Trust will promptly send additional copies of this Prospectus and any amendment or supplement to this Prospectus to any broker-dealer that requests such documents in the Letter of Transmittal. The Company and the Trust have agreed to pay all expenses incident to the Exchange Offer (including the expenses of one counsel for the holders of the Old Capital Securities) other than commissions or concessions of any brokers or dealers and will indemnify the holders of the Old Capital Securities (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act. UNITED STATES FEDERAL INCOME TAXATION GENERAL In addition to the two specific opinions referred to below under "--US Holders--Characterization of the Trust" and "--Characterization of the Subordinated Debt Securities," Godfrey & Kahn, S.C., counsel to the Company and the Trust ("Counsel"), has, in connection with the issuance of the Old Capital Securities, rendered its opinion generally to the effect that, subject to the exceptions and qualifications set forth therein, the discussion of United States federal income taxation which follows summarizes the material United States federal income tax consequences of the purchase, ownership and disposition of Capital Securities. This summary is based on the Internal Revenue Code of 1986, as amended (the "Code"), Treasury regulations thereunder, and administrative and judicial interpretations thereof, each as of the date hereof, all of which are subject to change, possibly on a retroactive basis. Except as otherwise stated, this summary deals only with Capital Securities held as a capital asset by a holder who or which (i) purchased Capital Securities upon original issuance (an "Initial Holder") and (ii) is a US Holder (as defined below). It does not deal with all aspects of United States federal income taxation, nor with the particular United States federal income tax (hereafter, "income tax") consequences which may be applicable to certain classes of US Holders (such as banks, thrift institutions, real estate investment trusts, regulated investment companies, insurance companies, brokers and dealers in securities or currencies, other financial institutions, tax-exempt organizations, persons holding Capital Securities as a position in a "straddle," as part of a "synthetic security or hedge," as part of a "conversion transaction" or as part of any other integrated investment, persons having a functional currency other than the U.S. Dollar and certain United States expatriates). Further, this summary does not address (a) the income tax consequences to shareholders in, or partners or beneficiaries of, a holder of Capital Securities, (b) the United States federal alternative minimum tax consequences of the purchase, ownership or disposition of Capital Securities, or (c) any state, local or foreign tax consequences of the purchase, ownership and disposition of Capital Securities. 63 A "US Holder" is a holder of Capital Securities who or which is a citizen or individual resident (or is treated as a citizen or individual resident) of the United States for income tax purposes, a corporation or partnership created or organized (or treated as created or organized for income tax purposes) in or under the laws of the United States or any political subdivision thereof, an estate the income of which is includible in its gross income for United States federal income tax purposes without regard to its source or a trust if, and only if, (i) a court within the United States is able to exercise primary supervision over the administration of the trust and (ii) one or more United States trustees have the authority to control all substantial decisions of the trust. EXCHANGE OF CAPITAL SECURITIES The exchange of Old Capital Securities for New Capital Securities should not be a taxable event to holders for income tax purposes. The exchange of Old Capital Securities for New Capital Securities pursuant to the Exchange Offer should not be treated as an "exchange" for federal income tax purposes because the degree to which the New Capital Securities differ from the Old Capital Securities is not economically significant and because the exchange will occur by operation of the terms of the Old Capital Securities. Accordingly, the New Capital Securities should have the same issue price as the Old Capital Securities, and a holder should have the same adjusted basis and holding period in the New Capital Securities as the holder had in the Old Capital Securities immediately before the exchange. Therefore, the tax opinions rendered by Counsel in connection with the issuance of the Old Capital Securities, when read in conjunction with the tax opinion rendered in connection with the Exchange Offer, are equally applicable to this issuance of New Capital Securities. US HOLDERS CHARACTERIZATION OF THE TRUST In connection with the issuance of the Old Capital Securities, Counsel rendered its opinion generally to the effect that, under then current law and assuming full compliance with the terms of the Declaration (and other documents), and based on certain assumptions and qualifications referenced in the opinion, the Trust will be characterized for United States federal income tax purposes as a grantor trust and will not be characterized as an association taxable as a corporation for such purposes. Accordingly, for income tax purposes, each holder of Capital Securities generally will be considered the owner of an undivided interest in the Subordinated Debt Securities owned by the Trust, and each US Holder will be required to include all income or gain recognized for income tax purposes with respect to its allocable share of the Subordinated Debt Securities on its own income tax return. CHARACTERIZATION OF THE SUBORDINATED DEBT SECURITIES In connection with the issuance of the Old Subordinated Debt Securities, Counsel rendered its opinion generally to the effect that, under then current law and assuming full compliance with the terms of the Indenture (and other documents), and based on certain assumptions and qualifications referenced in the opinion, the Subordinated Debt Securities will be characterized for United States federal income tax purposes as debt of the Company. ORIGINAL ISSUE DISCOUNT Under the terms of the Subordinated Debt Securities, the Company has the option to defer payments of interest from time to time by extending the interest payment period for a period not exceeding 10 consecutive semiannual periods, but not beyond the maturity of the Subordinated Debt Securities. Recently issued Treasury regulations under Section 1273 of the Code provide that debt instruments like the Subordinated Debt Securities will not be considered issued with OID by reason of the Company's option to defer payments of interest if the likelihood of deferral is "remote." 64 The Company has concluded, and this discussion assumes, that, as of the date of this Prospectus, the likelihood of exercise of that option is "remote" within the meaning of the applicable regulations, in part because exercising that option would prevent the Company from declaring dividends on its stock and would prevent the Company from making any payments with respect to debt securities that rank pari passu or junior to the Subordinated Debt Securities. Therefore, the Subordinated Debt Securities should not be treated as issued with OID by reason of the Company's deferral option. Rather, stated interest on the Subordinated Debt Securities will generally be taxable to a US Holder, as ordinary income, when paid or accrued in accordance with that holder's method of accounting for income tax purposes. It should be noted, however, that these regulations have not yet been addressed in any rulings or other interpretations by the Service. Accordingly, it is possible that the Service could take a position contrary to the interpretation described herein. In the event the Company subsequently exercised its option to defer payments of interest, the Subordinated Debt Securities would be treated as reissued for OID purposes and the sum of the remaining interest payments on the Subordinated Debt Securities would thereafter be treated as OID, which would accrue, and be includible in a US Holder's taxable income, on an economic accrual basis (regardless of the US Holder's method of accounting for income tax purposes) over the remaining term of the Subordinated Debt Securities (including any period of interest deferral), without regard to the timing of payments under the Subordinated Debt Securities. (Subsequent distributions of interest on the Subordinated Debt Securities generally would not be taxable.) The amount of OID that accrued in any period would generally equal the amount of interest that accrued on the Subordinated Debt Securities in that period at the stated interest rate. Consequently, during any period of interest deferral, US Holders will include OID in gross income in advance of the receipt of cash, and a US Holder which disposes of a Capital Security prior to the record date for payment of distributions on the Subordinated Debt Securities following that period will be subject to income tax on OID accrued through the date of disposition (and not previously included in income), but will not receive cash from the Trust with respect to that OID. If the Company's option to defer payments of interest were not treated as remote, the Subordinated Debt Securities would be treated as initially issued with OID in an amount equal to the aggregate stated interest over the term of the Subordinated Debt Securities. That OID would generally be includible in a US Holder's taxable income, over the term of the Subordinated Debt Securities, on an economic accrual basis. CHARACTERIZATION OF INCOME Because the income underlying the Capital Securities will not be characterized as dividends for income tax purposes, corporate holders of Capital Securities will not be entitled to a dividends-received deduction for any income recognized with respect to the Capital Securities. MARKET DISCOUNT AND BOND PREMIUM Holders of Capital Securities other than Initial Holders may be considered to have acquired their undivided interests in the Subordinated Debt Securities with market discount or acquisition premium (as each phrase is defined for income tax purposes). RECEIPT OF SUBORDINATED DEBT SECURITIES OR CASH UPON LIQUIDATION OF THE TRUST The Company will have the right to distribute Subordinated Debt Securities to holders in exchange for the Capital Securities and in liquidation of the Trust. Except as discussed below, such a distribution would not be a taxable event for income tax purposes, and each US Holder would have an aggregate adjusted basis in its Subordinated Debt Securities for income tax purposes equal to such holder's aggregate adjusted basis in its Capital Securities. For income tax purposes, a US Holder's holding 65 period in the Subordinated Debt Securities received in such a liquidation of the Trust would include the period during which the Capital Securities were held by the holder. If, however, the relevant event is a Tax Event which results in the Trust being treated as an association taxable as a corporation, the distribution would likely constitute a taxable event to US Holders of the Capital Securities for income tax purposes. Under certain circumstances described herein (see "Description of the Capital Securities"), the Subordinated Debt Securities may be redeemed for cash and the proceeds of such redemption distributed to holders in redemption of their Capital Securities. Such a redemption would be taxable for income tax purposes, and a US Holder would recognize gain or loss as if it had sold the Capital Securities for cash. See "--Sales of Capital Securities" below. SALES OF CAPITAL SECURITIES A US Holder that sells Capital Securities will recognize gain or loss equal to the difference between its adjusted basis in the Capital Securities and the amount realized on the sale of such Capital Securities. A US Holder's adjusted basis in the Capital Securities generally will be its initial purchase price, increased by OID previously included (or currently includible) in such holder's gross income to the date of disposition, and decreased by payments received on the Capital Securities (other than any interest received with respect to the period prior to the effective date of the Company's first exercise of its option to defer payments of interest). Any such gain or loss generally will be capital gain or loss, and generally will be a long-term capital gain or loss if the Capital Securities have been held for more than one year. A holder who disposes of his Capital Securities between record dates for payments of distributions thereon will be required to include accrued but unpaid interest (or OID) on the Subordinated Debt Securities through the date of disposition in its taxable income for income tax purposes (notwithstanding that the holder may receive a separate payment from the purchaser with respect to accrued interest), and to deduct that amount from the sales proceeds received (including the separate payment, if any, with respect to accrued interest) for the Capital Securities (or as to OID only, to add such amount to such holder's adjusted tax basis in its Capital Securities). To the extent the selling price is less than the holder's adjusted tax basis (which will include accrued but unpaid OID, if any), a holder will recognize a capital loss. Subject to certain limited exceptions, capital losses cannot be applied to offset ordinary income for income tax purposes. NON-US HOLDERS The following discussion applies to an Initial Holder who is not a US Holder (a "Non-US Holder"). Payments to a holder of a Capital Security which is a Non-US Holder will generally not be subject to withholding of income tax, provided that (a) the beneficial owner of the Capital Security does not (directly or indirectly, actually or constructively) own 10% or more of the total combined voting power of all classes of stock of the Company entitled to vote, (b) the beneficial owner of the Capital Security is not a controlled foreign corporation that is related to the Company through stock ownership, and (c) either (I) the beneficial owner of the Capital Securities certifies to the Trust or its agent, under penalties of perjury, that it is a Non-US Holder and provides its name and address, or (II) a securities clearing organization, bank or other financial institution that holds customers' securities in the ordinary course of its trade or business (a "Financial Institution"), and holds the Capital Security in such capacity, certifies to the Trust or its agent, under penalties of perjury, that such a statement has been received from the beneficial owner by it or by another Financial Institution between it and the beneficial owner in the chain of ownership, and furnishes the Trust or its agent with a copy thereof. 66 As discussed above (see "Description of the Capital Securities--Tax Event Redemption"), changes in legislation affecting the income tax consequences of the Subordinated Debt Securities are possible, and could adversely affect the ability of the Company to deduct the interest payable on the Subordinated Debt Securities. Moreover, any such legislation could, as the Proposed Legislation would have, adversely affect Non-US Holders by characterizing income derived from the Subordinated Debt Securities as dividends, generally subject to a 30% income tax (on a withholding basis) when paid to a Non-US Holder, rather than as interest which, as discussed above, is generally exempt from income tax in the hands of a Non-US Holder. A Non-US Holder of a Capital Security will generally not be subject to withholding of income tax on any gain realized upon the sale or other disposition of a Capital Security. A Non-US Holder which holds Capital Securities in connection with the active conduct of a United States trade or business will be subject to income tax on all income and gains recognized with respect to its proportionate share of the Subordinated Debt Securities. INFORMATION REPORTING In general, information reporting requirements will apply to payments made on, and proceeds from the sale of, Capital Securities held by a noncorporate US Holder within the United States. In addition, payments made on, and payments of the proceeds from the sale of, Capital Securities to or through the United States office of a broker are subject to information reporting unless the holder thereof certifies as to its non-United States status or otherwise establishes an exemption from information reporting and backup withholding (see "--Backup Withholding" below). Taxable income on the Capital Securities for a calendar year should be reported to US Holders on Forms 1099 by the following January 31st. BACKUP WITHHOLDING Payments made on, and proceeds from the sale of, the Capital Securities may be subject to a "backup" withholding tax of 31% unless the holder complies with certain identification or exemption requirements. Any amounts so withheld will be allowed as a credit against the holder's income tax liability, or refunded, provided the required information is provided to the United States Internal Revenue Service. * * * THE PRECEDING DISCUSSION IS ONLY A SUMMARY AND DOES NOT ADDRESS THE CONSEQUENCES TO A PARTICULAR HOLDER OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF CAPITAL SECURITIES. POTENTIAL HOLDERS OF CAPITAL SECURITIES ARE URGED TO CONTACT THEIR OWN TAX ADVISORS TO DETERMINE THEIR PARTICULAR TAX CONSEQUENCES. ERISA CONSIDERATIONS Each fiduciary of a pension, profit-sharing or other employee benefit plan subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA") (a "Plan"), should consider the fiduciary standards of ERISA in the context of the Plan's particular circumstances before authorizing an investment in the Capital Securities. Accordingly, among other factors, the fiduciary should consider whether the investment would satisfy the prudence and diversification requirements of ERISA and would be consistent with the documents and instruments governing the Plan. Section 406 of ERISA and Section 4975 of the Code prohibit Plans, as well as individual retirement accounts and Keogh plans subject to Section 4975 of the Code (also "Plans"), from engaging in certain transactions involving "plan assets" with persons who are "parties in interest" 67 under ERISA or "disqualified persons" under the Code ("Parties in Interest") with respect to such Plan. A violation of these "prohibited transaction" rules may result in an excise tax or other liabilities under ERISA and/or Section 4975 of the Code for such persons, unless exemptive relief is available under an applicable statutory or administrative exemption. Employee benefit plans that are governmental plans (as defined in Section 3(32) of ERISA), certain church plans (as defined in Section 3(33) of ERISA) and foreign plans (as described in Section 4(b)(5) of ERISA) are not subject to the requirements of ERISA or Section 4975 of the Code. Under a regulation (the "Plan Assets Regulation") issued by the U.S. Department of Labor (the "DOL"), the assets of the Trust would be deemed to be "plan assets" of a Plan for purposes of ERISA and Section 4975 of the Code if "plan assets" of the Plan were used to acquire an equity interest in such Trust and no exception were applicable under the Plan Assets Regulation. An "equity interest" is defined under the Plan Assets Regulation as any interest in an entity other than an instrument which is treated as indebtedness under applicable local law and which has no substantial equity features and specifically includes a beneficial interest in a trust. Pursuant to an exception contained in the Plan Assets Regulation, the assets of the Trust would not be deemed to be "plan assets" of investing Plans if, immediately after the most recent acquisition of any equity interest in the Trust, less than 25% of the value of each class of equity interests in the Trust were held by Plans, other employee benefit plans not subject to ERISA or Section 4975 of the Code (such as governmental, church and foreign plans), and entities holding assets deemed to be "plan assets" of any Plan (collectively, "Benefit Plan Investors"). No assurance can be given by the Initial Purchasers that the value of the Capital Securities held by Benefit Plan investors will be less than 25% of the total value of such Capital Securities at the completion of the initial offering or thereafter, and no monitoring or other measures will be taken with respect to the satisfaction of the conditions to this exception. All of the Common Securities will be purchased and held by the Company. Certain transactions involving the Trust could be deemed to constitute direct or indirect prohibited transactions under ERISA and Section 4975 of the Code with respect to a Plan if the Capital Securities of the Trust were acquired with "plan assets" of such Plan and assets of the Trust were deemed to be "plan assets" of Plans investing in the Trust. For example, if the Company is a Party in interest with respect to an investing Plan (either directly or by reason of its ownership of its subsidiaries), extensions of credit between the Company and the Trust (as represented by the Subordinated Debt Securities and the Guarantees) would likely be prohibited by Section 406(a)(1)(B) of ERISA and Section 4975(c)(1)(B) of the Code, unless exemptive relief were available under an applicable administrative exemption (see below). The DOL has issued five prohibited transaction class exemptions ("PTCEs") that may provide exemptive relief for direct or indirect prohibited transactions resulting from the purchase or holding of the Capital Securities, assuming that assets of the Trust were deemed to be "plan assets" of Plans investing in the Trust (see above). Those class exemptions are PTCE 96-23 (for certain transactions determined by in-house asset managers), PTCE 95-60 (for certain transactions involving insurance company general accounts), PTCE 91-38 (for certain transactions involving bank collective investment funds), PTCE 90-1 (for certain transactions involving insurance company separate accounts), and PTCE 84-14 (for certain transactions determined by independent qualified asset managers). Because the Capital Securities may be deemed to be equity interests in the Trust for purposes of applying ERISA and Section 4975 of the Code, the Capital Securities may not be purchased or held by any Plan, any entity whose underlying assets include "plan assets" by reason of any Plan's investment in the entity (a "Plan Asset Entity") or any person investing "plan assets" of any Plan, unless such purchaser or holder is eligible for the exemptive relief available under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14. Any purchaser or holder of the Capital Securities or any interest therein will be deemed to have represented by its purchase and holding thereof that it either (a) is not a Plan or a 68 Plan Asset Entity and is not purchasing such securities on behalf of or with "plan assets" of any Plan or (b) is eligible for the exemptive relief available under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 with respect to such purchase or holding. See "Notice to Investors" herein. Due to the complexity of these rules and the penalties that may be imposed upon persons involved in non-exempt prohibited transactions, it is particularly important that fiduciaries or other persons considering purchasing Capital Securities on behalf of or with "plan assets" of any Plan consult with their counsel regarding the potential consequences if the assets of the Trust were deemed to be "plan assets" and the availability of exemptive relief under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14. LEGAL MATTERS Certain matters of Delaware law relating to the validity of the New Capital Securities will be passed upon on behalf of the Trust by Morris, Nichols, Arsht & Tunnell, special Delaware counsel to the Trust. The validity under Wisconsin law of the Subordinated Debt Securities and the Guarantee will be passed upon for M&I by Godfrey & Kahn, S.C., Milwaukee, Wisconsin. Certain United States federal income tax matters have been, and will be in connection with the Exchange Offer, passed upon for M&I and the Trust by Godfrey & Kahn, S.C. INDEPENDENT PUBLIC ACCOUNTANTS The consolidated financial statements of the Company and its subsidiaries included in the Company's Annual Report on Form 10-K for the year ended December 31, 1996, have been audited by Arthur Andersen LLP, independent public accountants, as set forth in their report therein and herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given upon the authority of such firm as experts in accounting and auditing. 69 NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFOR- MATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER MADE HEREBY EXCEPT AS CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, NO SUCH INFORMA- TION OR REPRESENTATIONS SHOULD BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE TRUST, PROSPECTUS OR ANY OF THEIR RESPECTIVE AGENTS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIR- CUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE INFOR- MATION SET FORTH HEREIN OR IN THE AFFAIRS OF THE COMPANY OR THE TRUST SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE CAPITAL SECURITIES BY ANYONE IN ANY JU- RISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. --------------- TABLE OF CONTENTS
PAGE ---- Available Information..................................................... 6 Incorporation of Certain Documents by Reference........................... 7 Summary................................................................... 8 Risk Factors.............................................................. 16 Capitalization............................................................ 22 Ratio of Earnings to Fixed Charges........................................ 22 Accounting Treatment...................................................... 23 Use of Proceeds........................................................... 23 The Trust................................................................. 23 Marshall & Ilsley Corporation............................................. 24 The Exchange Offer........................................................ 26 Description of the Capital Securities..................................... 34 Description of the Guarantee.............................................. 48 Description of the Subordinated Debt Securities........................... 51 Effect of Obligations Under the Subordinated Debt Securities and the Guarantee................................................................ 61 Plan of Distribution...................................................... 62 United States Federal Income Taxation..................................... 63 ERISA Considerations...................................................... 67 Legal Matters............................................................. 69 Independent Public Accountants............................................ 69
$200,000,000 M&I CAPITAL TRUST A 7.65% CAPITAL TRUST PASS-THROUGH SECURITIESSM (TRUPSSM) (LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY) FULLY AND UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY MARSHALL & ILSLEY CORPORATION LOGO PROSPECTUS DATED MARCH 7, 1997 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Sections 180.0850 to 180.0859 of the Wisconsin Statutes require a corporation to indemnify any director or officer who is a party to any threatened, pending or completed civil, criminal, administrative or investigative action, suit, arbitration or other proceeding, whether formal or informal, which involves foreign, federal, state or local law and which is brought by or in the right of the corporation or by any other person. A corporation's obligation to indemnify any such person includes the obligation to pay any judgment, settlement, penalty, assessment, forfeiture or fine, including any excise tax assessed with respect to an employee benefit plan, and all reasonable expenses including fees, costs, charges, disbursements, attorney's and other expenses except in those cases in which liability was incurred as a result of the breach or failure to perform a duty which the director or officer owes to the corporation and the breach or failure to perform constitutes: (i) a willful failure to deal fairly with the corporation or its shareholders in connection with a matter in which the director or officer has a material conflict of interest; (ii) a violation of criminal law, unless the person has reasonable cause to believe his conduct was lawful or had no reasonable cause to believe his conduct was unlawful; (iii) a transaction from which the person derived an improper personal profit; or (iv) willful misconduct. Unless otherwise provided in a corporation's articles of incorporation or By-Laws or by written agreement, an officer or director seeking indemnification is entitled to indemnification if approved in any of the following manners: (i) by majority vote of a disinterested quorum of the board of directors, or if such quorum of disinterested directors cannot be obtained, by a majority vote of a committee of two or more disinterested directors; (ii) by independent legal counsel; (iii) by a panel of three arbitrators; (iv) by affirmative vote of shareholders; (v) by a court; or (vi) with respect to any additional right to indemnification granted by any other method permitted in Section 180.0858 of the Wisconsin Statutes. Reasonable expenses incurred by a director or officer who is a party to a proceeding may be reimbursed by a corporation at such time as the director or officer furnishes to the corporation written affirmation of his good faith belief that he has not breached or failed to perform his duties and a written undertaking to repay any amounts advanced if it is determined that indemnification by the corporation is not required. The indemnification provisions of Sections 180.0850 to 180.0859 are not exclusive. A corporation may expand an officer's or director's right to indemnification (i) in its articles of incorporation or by-laws; (ii) by written agreement; (iii) by resolution of its board of directors; or (iv) by resolution of a majority of all of the corporation's voting shares then issued and outstanding. As permitted by Section 180.0858, M&I has adopted indemnification provisions in its By-Laws which closely track the statutory indemnification provisions with certain exceptions. In particular, Section 7.1 of M&I's By-Laws, among other items, provides that (i) any individual shall be indemnified unless it is proven by a final judicial adjudication that indemnification is prohibited and (ii) payment or reimbursement of expenses, subject to certain limitations, will be mandatory rather than permissive. M&I has purchased directors' and officers' liability insurance which insures M&I's officers and directors against certain liabilities which may arise under the Securities Act of 1933. Under the Declaration, M&I will agree to indemnify each of the Trustees of the Trust, and to hold the Trustees harmless against, any loss, damage, claims, liability or expense incurred without negligence or bad faith on the Trustees' part, arising out of or in connection with the acceptance or administration of the Declaration, including the costs and expenses of defending themselves against any claim or liability in connection with the exercise or performance of any of their powers or duties under the Declaration. ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 4.1 Certificate of Trust of M&I Capital Trust A** 4.2 Amended and Restated Declaration of Trust dated as of December 9, 1996 among Marshall & Ilsley Corporation, as Sponsor, The Chase Manhattan Bank, as Institutional Trustee, Chase Manhattan Bank Delaware, as Delaware Trustee, J.B. Wigdale, G.H. Gunnlaugsson and M.A. Hatfield, as Regular Trustees, and the holders from time to time of undivided interests in the assets of the Trust** 4.3 Indenture, dated as of December 9, 1996, between Marshall & Ilsley Corporation and The Chase Manhattan Bank, as Indenture Trustee** 4.4 First Supplemental Indenture, dated as of December 9, 1996, between Marshall & Ilsley Corporation and The Chase Manhattan Bank, as Indenture Trustee** 4.5 Form of Capital Security Certificate for M&I Capital Trust A (included as Exhibit A-2 to Exhibit 4.2)** 4.6 Capital Securities Guarantee Agreement, dated as of December 9, 1996, between Marshall & Ilsley Corporation and The Chase Manhattan Bank, as Guarantee Trustee** 4.7 Registration Rights Agreement dated December 2, 1996, by and among Marshall & Ilsley Corporation, M&I Capital Trust A and Salomon Brothers Inc, as Representative of the Initial Purchasers** 4.8 Form of Subordinated Debt Security (included as part of Exhibit 4.4)** 5.1 Opinion of Godfrey & Kahn, S.C. as to legality of the Junior Subordinated Deferrable Interest Debentures to be issued by M&I Capital Trust A and the Capital Securities Guarantee* 5.2 Opinion of Morris, Nichols, Arsht & Tunnell as to legality of the 7.65% Capital Trust Pass-through Securities to be issued by M&I Capital Trust A* Opinion of Godfrey & Kahn, S.C. as to certain federal income tax 8 matters* 12 Computation of ratio of earnings to fixed charges* 23.1 Consent of Arthur Andersen LLP* 23.2 Consent Godfrey & Kahn, S.C. (included in Exhibits 5.1 and 8)* Consent of Morris, Nichols, Arsht & Tunnell (included in Exhibit 23.3 5.2)* 24 Powers of Attorney** 25.1 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to act as trustee under the Indenture** 25.2 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to act as trustee under the Amended and Restated Declaration of Trust** 25.3 Form T-1 Statement of Eligibility of The Chase Manhattan Bank under the Capital Securities Guarantee Agreement for the benefit of the holders of Capital Securities of M&I Capital Trust A** 99.1 Form of Letter of Transmittal* 99.2 Form of Notice of Guaranteed Delivery* 99.3 Form of Exchange Agent Agreement *
- -------- * Filed herewith. ** Previously filed. 2 ITEM 22. UNDERTAKINGS Each of the undersigned Registrants hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, as amended, each filing of a Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of each Registrant pursuant to the provisions, or otherwise, each Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and therefore is unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by each Registrant of expenses incurred or paid by a director, officer of controlling person of each Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, each Registrant will, unless in the opinion of its counsel the matter has been settled by the controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. The undersigned Registrants hereby undertake to respond to requests for information that is incorporated by reference into the Prospectus pursuant to Item 4, 10(b), 11 or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. The undersigned Registrants hereby undertake to supply by means of a post- effective amendment all information concerning a transaction, and the company being acquired or involved therein, that was not the subject of and included in the registration statement when it became effective. 3 SIGNATURES PURSUANT TO REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING A FORM S-4 AND HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF MILWAUKEE, STATE OF WISCONSIN, ON MARCH 6, 1997. MARSHALL & ILSLEY CORPORATION (Registrant) /s/ J.B. Wigdale By: _________________________________ J.B. Wigdale Chairman of the Board PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATED INDICATED:
SIGNATURE TITLE DATE --------- ----- ---- /s/ J.B. Wigdale Chairman of the Board and a March 6, 1997 ____________________________________ Director (Chief Executive J.B. Wigdale Officer) /s/ G.H. Gunnlaugsson Executive Vice President and March 6, 1997 ____________________________________ a Director (Chief G.H. Gunnlaugsson Financial Officer) /s/ P.R. Justiliano Senior Vice President and March 6, 1997 ____________________________________ Corporate Controller P.R. Justiliano (Principal Accounting Officer) Directors: Oscar C. Boldt, Wendell F. Bueche, Glenn A. Francke, G.H. Gunnlaugsson, Burleigh E. Jacobs, Jack F. Kellner, James F. Kress, D.J. Kuester, Edward L. Meyer, Jr., Don R. O'Hare, San W. Orr, Jr., Peter M. Platten, III, J.A. Puelicher, Stuart W. Tisdale, J.B. Wigdale and James O. Wright. /s/ M.A. Hatfield As Attorney-in-Fact* ____________________________________ M.A. Hatfield
- -------- * Pursuant to authority granted by powers of attorney, copies of which are filed herewith. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, M&I CAPITAL TRUST A CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL THE REQUIREMENTS FOR FILING ON FORM S-4 AND HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF MILWAUKEE, AND STATE OF WISCONSIN ON MARCH 6, 1997. M&I Capital Trust A /s/ G.H. Gunnlaugsson By: _________________________________ G.H. Gunnlaugsson Regular Trustee /s/ M.A. Hatfield By: _________________________________ M.A. Hatfield Regular Trustee 4 EX-5.1 2 OPINION OF GODFREY & KAHN / LEGALITY OF DEBENTURES Exhibit 5.1 [Godfrey & Kahn, S.C. letterhead] March 7, 1997 Marshall & Ilsley Corporation 770 North Water Street Milwaukee, WI 53202 Re: Registration Statement on Form S-4 for Capital Trust Securities Ladies and Gentlemen: We have acted as counsel to Marshall & Ilsley Corporation, a Wisconsin corporation (the "Company") and Sponsor of M&I Capital Trust A, a Delaware business trust (the "Trust"), in connection with a Registration Statement on Form S-4 (the "Registration Statement") relating to: (i) the proposed issuance by the Trust of $200,000,000 aggregate Liquidation Amount of the Trust's 7.65% Capital Securities due December 1, 2026 (the "New Capital Securities") registered under the Securities Act of 1933, as amended (the "Securities Act"), in exchange for up to $200,000,000 aggregate Liquidation Amount of the Trust's outstanding 7.65% Capital Securities due December 1, 2026 (the "Old Capital Securities"); (ii) the proposed issuance by the Company to the Trust of $206,186,000 aggregate principal amount of the Company's 7.65% Junior Subordinated Deferrable Interest Debentures (the "New Subordinated Debt Securities") registered under the Securities Act, in exchange for up to $206,186,000 aggregate principal of the Company's outstanding 7.65% Junior Subordinated Deferrable Interest Debentures (the "Old Subordinated Debt Securities"); and (iii) the Company's guarantee (the "New Guarantee"), which guarantees the payment of Distributions and payments on liquidation or redemption of the New Capital Securities, registered under the Securities Act, in exchange for the guarantee (the "Old Guarantee") which guarantees the payment of Distributions and payments on liquidation or redemption of the Old Capital Securities. The New Capital Securities are issuable under an Amended and Restated Trust Agreement dated as of December 9, 1996 (the "Trust Agreement") between the Company, as Sponsor, The Chase Manhattan Bank, as Delaware Trustee and Institutional Trustee, and the Regular Trustees named therein; the New Subordinated Debt Securities are issuable under an Indenture dated as of December 9, 1996 (the "Indenture") between the Company and The Chase Manhattan Bank, as Trustee; and the New Guarantee is issuable under the Guarantee Agreement dated as of December 9, 1996 (the "Guarantee Agreement") between the Company and The Chase Manhattan Bank, as Guarantee Trustee. Marshall & Ilsley Corporation March 7, 1997 Page 2 We have examined such documents and have reviewed such questions of law as we have considered necessary and appropriate for the purposes of our opinions set forth below. In rendering our opinions, we have assumed the authenticity of all documents submitted to us as originals, the genuineness of all signatures and the conformity to authentic originals of all documents submitted to us as copies. We have also assumed the legal capacity for all purposes relevant hereto of all natural persons and, with respect to all parties to agreements or instruments relevant hereto other than the Company and the Trust, that such parties had the requisite power and authority (corporate or otherwise) to execute, deliver and perform such agreements or instruments, that such agreements or instruments have been duly authorized by all requisite action (corporate or otherwise), executed and delivered by such parties and that such agreements or instruments are the valid, binding and enforceable obligations of such parties. As to questions of fact material to our opinions, we have relied upon certificates of officers of the Company and the Trust and of public officials. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to them in the Trust Agreement, the Indenture and the Guarantee Agreement, as applicable. Based on the foregoing, we are of the opinion that: (1) The New Subordinated Debt Securities have been duly authorized by all requisite corporate action and, when executed and authenticated as specified in the Indenture and delivered against surrender of the Company and cancellation of a like amount of Old Subordinated Debt Securities in the manner described in the Registration Statement, the New Subordinated Debt Securities will constitute valid and binding obligations of the Company, enforceable in accordance with their terms; and (2) The New Guarantee has been duly authorized by all requisite corporate action of the Company and constitutes the valid and binding obligation of the Company, enforceable in accordance with its terms. The opinions set forth above are subject to the following qualifications and exceptions: (a) Our above opinions are subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or other similar law of general application affecting creditors' rights; and (b) Our above opinions are subject to the effect of general principles of equity, including (without limitation) concepts of materiality, reasonableness, good faith and fair dealing, and other similar doctrines affecting the enforceability of agreements generally (regardless of whether considered in a proceeding in equity or at law). Our opinions expressed above are limited to the laws of the State of Wisconsin and the federal laws of the United States. With certain exceptions, we are members of the Bar of the Marshall & Ilsley Corporation March 7, 1997 Page 3 State of Wisconsin and do not hold ourselves out as experts on the law of any state other than Wisconsin. Regardless of references herein or in any document mentioned herein to the laws of another state, our opinion does not relate to the laws of any jurisdiction other than Wisconsin and the federal laws of the United States. We have assumed the applicability of Wisconsin law to the operative documents notwithstanding any choice of law provisions to the contrary or rules relating to conflicts of laws in Wisconsin. We hereby consent to your filing of this opinion as an exhibit to the Registration Statement, and to the reference to our firm under the caption "Legal Matters" contained in the Prospectus included therein. Very truly yours, /s/ Godfrey & Kahn, S.C. GODFREY & KAHN, S.C. MW1-67521-2 EX-5.2 3 OPINION OF MORRIS, NICHOLS, ARSHT & TUNNELL Exhibit 5.2 [Letterhead of Morris, Nichols, Arsht & Tunnell] March 7, 1997 M&I Capital Trust A c/o Marshall & Ilsley Corporation 770 North Water Street Milwaukee, Wisconsin 53202 Re: M&I Capital Trust A ------------------- Ladies and Gentlemen: We have acted as special Delaware counsel to M&I Capital Trust A, a Delaware statutory business trust (the "Trust"), in connection with certain matters relating to the creation of the Trust and the proposed issuance of Exchange Capital Securities to beneficial owners pursuant to and as described in Registration Statement No. 333-19809 (and the Prospectus forming a part thereof) on Form S-4 filed with the Securities and Exchange Commission on January 15, 1997, as amended by Pre-Effective Amendment No. 1 thereto (as so amended, the "Registration Statement"). Capitalized terms used herein and not otherwise herein defined are used as defined in the Amended and Restated Declaration of Trust of the Trust dated as of December 9, 1996 (the "Governing Instrument"). In rendering this opinion, we have examined and relied upon copies of the following documents in the forms provided to us: the Certificate of Trust of the Trust as filed in the Office of the Secretary of State of the State of Delaware (the "State Office") on December 2, 1996 (the "Certificate of Trust"); a Declaration of Trust of the Trust dated as of December 2, 1996 (the "Original Governing Instrument"); the Governing Instrument; the Indenture dated as of December 9, 1996 between Marshall & Ilsley Corporation, a Wisconsin corporation ("M&I"), and The Chase Manhattan Bank, as Trustee, and the form of First Supplemental Indenture to be entered into in connection therewith; the Guarantee Agreement to be entered into between M&I and The Chase Manhattan Bank, as Trustee, relating to the Exchange Capital Securities; the Registration Rights Agreement dated December 2, 1996 among the Trust, M&I and the "Initial Purchasers" (as defined therein) (the "Registration Rights Agreement"); the Registration Statement; and a certificate of good standing of the Trust obtained as of a recent date from the State Office. In such examinations, we have assumed the genuineness of all signatures, the conformity to original documents of all documents submitted to us as drafts or copies or forms of documents to be executed and the legal capacity of natural persons to complete the execution of documents. We have further assumed for purposes of this opinion: (i) the due formation or organization, valid existence and good standing of each entity (other than the Trust) that is a M&I Capital Trust A March 7, 1997 Page 2 party to any of the documents reviewed by us under the laws of the jurisdiction of its respective formation or organization; (ii) the due authorization, execution and delivery by, or on behalf of, each of the parties thereto of the above-referenced documents (including, without limitation, the due authorization, execution and delivery of the Governing Instrument and the Registration Rights Agreement prior to the first issuance of Exchange Capital Securities); (iii) that no event has occurred subsequent to the filing of the Certificate of Trust that would cause a dissolution or liquidation of the Trust under the Original Governing Instrument or the Governing Instrument, as applicable; (iv) that the activities of the Trust have been and will be conducted in accordance with the Original Governing Instrument or the Governing Instrument, as applicable, and the Delaware Business Trust Act, 12 Del. C. (S) 3801 et seq. (the "Delaware Act"); (v) that each Person that will acquire Exchange Capital Securities in the "Exchange Offer" (as defined in the Registration Statement and as used herein, the "Exchange Offer") will validly tender Initial Capital Securities in exchange therefor, that such Initial Capital Securities will be duly accepted, and that such Person will duly receive Exchange Capital Security Certificates in consideration thereof, all in accordance with the terms and conditions of the Governing Instrument, the Registration Statement and the Registration Rights Agreement and that the Exchange Capital Securities are otherwise issued and sold to the Exchange Capital Securities Holders in accordance with the terms, conditions, requirements and procedures set forth in the Governing Instrument, the Registration Statement and the Registration Rights Agreement; and (vi) that the documents examined by us are in full force and effect, express the entire understanding of the parties thereto with respect to the subject matter thereof and have not been modified, supplemented or otherwise amended, except as herein referenced. We have not reviewed any documents other than those identified above in connection with this opinion, and we have assumed that there are no other documents that are contrary to or inconsistent with the opinions expressed herein. Further, we express no opinion with respect to, and assume no responsibility for the contents of, the Registration Statement or any other offering material relating to the Exchange Capital Securities. No opinion is expressed herein with respect to the requirements of, or compliance with, federal or state securities or blue sky laws. As to any fact material to our opinion, other than those assumed, we have relied without independent investigation on the above-referenced documents and on the accuracy, as of the date hereof, of the matters therein contained. Based on and subject to the foregoing, and limited in all respects to matters of Delaware law, it is our opinion that: 1. The Trust is a duly created and validly existing business trust in good standing under the laws of the State of Delaware. 2. The Exchange Capital Securities, upon issuance pursuant to the Exchange Offer, will constitute validly issued and, subject to the qualifications set forth in paragraph 3 below, fully paid and nonassessable beneficial interests in the assets of the Trust. M&I Capital Trust A March 7, 1997 Page 3 3. Under the Delaware Act and the terms of the Governing Instrument, each Exchange Capital Security Holder of the Trust, in such capacity, will be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware; provided, however, we express no opinion with respect to the liability of any Exchange Capital Security Holder who is, was or may become a named Trustee of the Trust. Notwithstanding the foregoing, we note that pursuant to Section 11.4 of the Governing Instrument, the Trust may withhold amounts otherwise distributable to a Holder and pay over such amounts to the applicable jurisdictions in accordance with federal, state and local law and any amount withheld will be deemed to have been distributed to such Holder and that, pursuant to the Governing Instrument, Exchange Capital Security Holders may be obligated to make payments or provide indemnity or security under the circumstances set forth therein. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name and reference to our opinion under the heading "LEGAL MATTERS" in the Prospectus forming a part thereof. In giving this consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission thereunder. This opinion speaks only as of the date hereof and is based on our understandings and assumptions as to present facts, and on our review of the above-referenced documents and the application of Delaware law as the same exist as of the date hereof, and we undertake no obligation to update or supplement this opinion after the date hereof for the benefit of any person or entity with respect to any facts or circumstances that may hereafter come to our attention or any changes in facts or law that may hereafter occur of take effect. This opinion is intended solely for the benefit of the addressee hereof in connection with the matters contemplated hereby and may not be relied on by any other person or entity or for any other purpose without our prior written consent. Very truly yours, MORRIS, NICHOLS, ARSHT & TUNNELL /s/ Morris, Nichols, Arsht & Tunnell EX-8 4 OPINION OF GODFREY & KAHN / FED INCOME TAX MATTERS Exhibit 8 [Godfrey & Kahn, S.C. Letterhead] March 7, 1997 Marshall & Ilsley Corporation 780 North Water Street Milwaukee, WI 53202 RE: Marshall & Ilsley Corporation M&I Capital Trust A $200,000,000 7.65% Capital Trust Pass-through Securities/SM/ (TruPS/SM/) Ladies and Gentlemen: We have acted as special tax counsel to Marshall & Ilsley Corporation ("M&I") and to M&I Capital Trust A (the "Trust") in connection with the Registration Statement (Form S-4) for the offer to exchange the Trust's outstanding 7.65% Capital Securities for the Trust's 7.65% Capital Securities which have been registered under the Securities Act of 1933 (the "Registration Statement"). Terms not defined in this letter have the same meaning as in the Registration Statement. The purpose of this letter is to confirm the opinions contained in our letter dated December 9, 1996 that (i) the Trust will be characterized as a grantor trust for U.S. federal income tax purposes and not as an association subject to tax as a corporation and (ii) for U.S. federal income tax purposes, the Subordinated Debt Securities will constitute indebtedness of the Company. Further, it is our opinion that the statements contained in the Registration Statement under the caption "United States Federal Income Taxation" and "ERISA Considerations" do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The opinion expressed above is based on existing provisions of the Internal Revenue Code of 1986, as amended (the "Code"), existing Treasury Regulations, published interpretations of the Code and such Treasury Regulations by the Internal Revenue Service, and existing court decisions, any of which could be changed at any time. Any such changes may or may not be Marshall & Ilsley Corporation March 7, 1997 Page 2 retroactively applied. We note that there is no authority directly on point dealing with securities such as the Capital Securities or transactions of the type described herein and that our opinion is not binding on the Internal Revenue Service or the courts, either of which could take a contrary position. Attorneys involved in the preparation of this opinion are admitted to practice law in the State of Wisconsin and we do not purport to be experts on, or express any opinion herein concerning any law other than the laws of the State of Wisconsin and the federal laws of the United States of America. This opinion is not being delivered for the benefit of, nor may it be relied upon by, any party to which it is not specifically addressed. We consent to the filing of this opinion as an exhibit to the Registration Statement. In giving this consent, however, we do not admit that we are "experts" within the meaning of Section 11 of the Securities Act of 1933, as amended, or within the category of persons whose consent is required by Section 7 of said Act. Very truly yours, /s/ Godfrey & Kahn, S.C. GODFREY & KAHN, S.C. EX-12 5 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES Exhibit 12 Marshall & Ilsley Corporation Computation of Ratio of Earnings to Fixed Charges ($000's)
Years Ended December 31, ------------------------------------------------ 1996 1995 1994 1993 1992 -------- -------- -------- -------- -------- Earnings: Earnings before income taxes, extraordinary items and cumulative effect of changes in accounting principles.. $313,141 $299,879 $167,803 $264,584 $231,792 Fixed charges, excluding interest on deposits........... 113,515 108,683 77,074 47,905 50,687 -------- -------- -------- -------- -------- Earnings including fixed charges but excluding interest on deposits................................... 426,656 408,562 244,877 312,489 282,479 Interest on deposits.................................... 360,838 331,734 255,861 272,100 334,443 -------- -------- -------- -------- -------- Earnings including fixed charges and interest on deposits............................................ $787,494 $740,296 $500,738 $584,589 $616,922 ======== ======== ======== ======== ======== Fixed Charges: Interest Expense: Borrowings: Short-term............................................. $ 62,071 $ 47,740 $ 39,681 $ 18,010 $ 17,606 Long-term.............................................. 42,808 53,709 30,537 23,088 26,439 One-third of rental expense for all operating leases (the amount deemed representative of the interest factor)................................... 8,636 7,234 6,856 6,807 6,642 -------- -------- -------- -------- -------- Fixed charges excluding interest on deposits............ 113,515 108,683 77,074 47,905 50,687 Interest on deposits.................................... 360,838 331,734 255,861 272,100 334,443 -------- -------- -------- -------- -------- Fixed charges including interest on deposits............ $474,353 $440,417 $332,935 $320,005 $385,130 ======== ======== ======== ======== ======== Ratio of Earnings to Fixed Charges: Excluding interest on deposits.......................... 3.76x 3.76x 3.18x 6.52x 5.57x Including interest on deposits.......................... 1.66x 1.68x 1.50x 1.83x 1.60x
EX-23.1 6 CONSENT OF ARTHUR ANDERSEN LLP Exhibit 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this Form S-4 registration statement to register Capital Securities of M&I Capital Trust A of our report dated January 31, 1997, included in the Marshall & Ilsley Corporation and subsidiaries' Form 10-K for the year ended December 31, 1996, and to all references to our Firm included in such registration statement. Milwaukee, Wisconsin ARTHUR ANDERSEN LLP March 3, 1997 EX-99.1 7 FORM OF LETTER OF TRANSMITTAL LETTER OF TRANSMITTAL M&I CAPITAL TRUST A OFFER TO EXCHANGE ITS 7.65% CAPITAL SECURITIES WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 FOR ANY AND ALL OF ITS OUTSTANDING 7.65% CAPITAL SECURITIES (LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY) PURSUANT TO THE PROSPECTUS DATED MARCH 7, 1997 THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON APRIL 10, 1997, UNLESS THE EXCHANGE OFFER IS EXTENDED. The Exchange Agent for the Exchange Offer is: THE CHASE MANHATTAN BANK By Mail or Hand By Facsimile To Confirm by Telephone: Delivery: Transmission: Carlos Esteves: (212) The Chase Manhattan (212) 638-7375 638-0828 Bank or (212) 344-9367 55 Water Street, Second Floor Room 234--North Building New York, New York 10041 Attn: Carlos Esteves DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. Capitalized terms used but not defined herein shall have the same meaning given them in the Prospectus (as defined below). This Letter of Transmittal is to be completed by holders of Old Capital Securities (as defined below) either if Old Capital Securities are to be forwarded herewith or if tenders of Old Capital Securities are to be made by book-entry transfer to an account maintained by The Chase Manhattan Bank (the "Exchange Agent") at The Depository Trust Company ("DTC") pursuant to the procedures set forth in "The Exchange Offer--Procedures for Tendering Old Capital Securities" in the Prospectus and an Agent's Message (as defined herein) is not delivered. Holders of Old Capital Securities whose certificates (the "Certificates") for such Old Capital Securities are not immediately available or who cannot deliver their Certificates and all other required documents to the Exchange Agent on or prior to the Expiration Date (as defined in the Prospectus) or who cannot complete the procedures for book-entry transfer on a timely basis, must tender their Old Capital Securities according to the guaranteed delivery procedures set forth in "The Exchange Offer--Procedures for Tendering Old Capital Securities" in the Prospectus. DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT. NOTE: SIGNATURES MUST BE PROVIDED BELOW PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY ALL TENDERING HOLDERS COMPLETE THIS BOX: DESCRIPTION OF OLD CAPITAL SECURITIES TENDERED - -------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER OLD CAPITAL SECURITIES TENDERED (FILL IN, IF BLANK) (ATTACH ADDITIONAL SIGNED SCHEDULE IF NECESSARY) - ------------------------------------------------------------------------------------ AGGREGATE LIQUIDIATION LIQUIDATION CERTIFICATE AMOUNT TENDERED AMOUNT NUMBER OF NUMBERS* (ATTACH TENDERED BENEFICIAL (ATTACH ADDITIONAL ADDITIONAL LIST (IF LESS HOLDERS FOR LIST IF NECESSARY) IF NECESSARY) THAN ALL)** WHOM HELD --------------------------------------------------- $ $ --------------------------------------------------- --------------------------------------------------- --------------------------------------------------- --------------------------------------------------- --------------------------------------------------- TOTAL AMOUNT TENDERED: $ $
* Need not be completed by book-entry holders. Such holders should check the appropriate box below and provide the requested information. ** Need not be completed if tendering for exchange all Old Capital Securities held. Old Capital Securities may be tendered in whole or in part in denominations of $100,000 and integral multiples of $1,000 in excess thereof, provided that if any Old Capital Securities are tendered for exchange in part, the untendered principal amount thereof must be $100,000 or any integral multiple of $1,000 in excess thereof. All Old Capital Securities held shall be deemed tendered unless a lesser number is specified in this column. (BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY. SEE INSTRUCTION 1) [_]CHECK HERE IF TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED BY BOOK- ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT AT DTC AND COMPLETE THE FOLLOWING: Name of Tendering Institution: ------------------------------- DTC Account Number: ------------------------------- Transaction Code Number: ------------------------------- [_]CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING: Name of Registered Holder: ------------------------------- Window Ticket Number (if any): ------------------------------- Date of Notice of Guaranteed Delivery: ------------------------------- Institution which Guaranteed Delivery: ------------------------------- If Guaranteed Delivery is to be made by book-entry transfer: Name of Tendering Institution: ------------------------------- DTC Account Number: ------------------------------- Transaction Code Number: ------------------------------- 2 [_]CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED OLD CAPITAL SECURITIES ARE TO BE RETURNED BY CREDITING THE DTC ACCOUNT NUMBER SET FORTH ABOVE. [_]CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD CAPITAL SECURITIES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER") AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO. Name: ------------------------------------------------------ Address: ------------------------------------------------------ Telephone Number and Contact Person: ------------------------------- LADIES AND GENTLEMEN: The undersigned hereby tenders to M&I Capital Trust A, a Delaware business trust (the "Trust") and Marshall & Ilsley Corporation, a Wisconsin corporation, as Depositor ("M&I"), the above described aggregate Liquidation Amount of the Trust's 7.65% Capital Securities due December 1, 2026 (the "Old Capital Securities") in exchange for a like aggregate Liquidation Amount of the Trust's 7.65% Capital Securities due December 1, 2026 (the "New Capital Securities") which have been registered under the Securities Act of 1933 (the "Securities Act"), upon the terms and subject to the conditions set forth in the Prospectus dated March 7, 1997 (as the same may be amended or supplemented from time to time, the "Prospectus"), receipt of which is acknowledged, and in this Letter of Transmittal (which, together with the Prospectus, constitute the "Exchange Offer"). Subject to and effective upon the acceptance for exchange of all or any portion of the Old Capital Securities tendered herewith in accordance with the terms and conditions of the Exchange Offer (including, if the Exchange Offer is extended or amended, the terms and conditions of any such extension or amendment), the undersigned hereby sells, assigns and transfers to or upon the order of the Trust all right, title and interest in and to such Old Capital Securities as are being tendered herewith. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent as its agent and attorney-in-fact (with full knowledge that the Exchange Agent is also acting as agent of the Trust and M&I in connection with the Exchange Offer) with respect to the tendered Old Capital Securities, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), subject only to the right of withdrawal described in the Prospectus, to: (i) deliver Certificates for Old Capital Securities to the Trust or M&I together with all accompanying evidences of transfer and authenticity to, or upon the order of, the Trust, upon receipt by the Exchange Agent, as the undersigned's agent, of the New Capital Securities to be issued in exchange for such Old Capital Securities; (ii) present Certificates for such Old Capital Securities for transfer, and to transfer the Old Capital Securities on the books of the Trust; and (iii) receive for the account of the Trust all benefits and otherwise exercise all rights of beneficial ownership of such Old Capital Securities, all in accordance with the terms and conditions of the Exchange Offer. THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT THE UNDERSIGNED HAS FULL POWER AND AUTHORITY TO TENDER, EXCHANGE, SELL, ASSIGN AND TRANSFER THE OLD CAPITAL SECURITIES TENDERED HEREBY AND THAT, WHEN THE SAME ARE ACCEPTED FOR EXCHANGE, THE TRUST WILL ACQUIRE GOOD, MARKETABLE AND UNENCUMBERED TITLE THERETO, FREE AND CLEAR OF ALL LIENS, RESTRICTIONS, 3 CHARGES AND ENCUMBRANCES, AND THAT THE OLD CAPITAL SECURITIES TENDERED HEREBY ARE NOT SUBJECT TO ANY ADVERSE CLAIMS OR PROXIES. THE UNDERSIGNED WILL, UPON REQUEST, EXECUTE AND DELIVER ANY ADDITIONAL DOCUMENTS DEEMED BY M&I, THE TRUST OR THE EXCHANGE AGENT TO BE NECESSARY OR DESIRABLE TO COMPLETE THE EXCHANGE, ASSIGNMENT AND TRANSFER OF THE OLD CAPITAL SECURITIES TENDERED HEREBY, AND THE UNDERSIGNED WILL COMPLY WITH ITS OBLIGATIONS UNDER THE CAPITAL SECURITIES REGISTRATION RIGHTS AGREEMENT. THE UNDERSIGNED HAS READ AND AGREES TO ALL OF THE TERMS OF THE EXCHANGE OFFER. The name(s) and address(es) of the registered holder of the Old Capital Securities tendered hereby should be printed above, if they are not already set forth above, as they appear on the Certificates representing such Old Capital Securities. The Certificate number(s) and the Old Capital Securities that the undersigned wishes to tender should be indicated in the appropriate boxes above. If any tendered Old Capital Securities are not exchanged pursuant to the Exchange Offer for any reason, or if Certificates are submitted for more Old Capital Securities than are tendered or accepted for exchange, Certificates for such nonexchanged or nontendered Old Capital Securities will be returned (or, in the case of Old Capital Securities tendered by book-entry transfer, such Old Capital Securities will be credited to an account maintained at DTC), without expense to the tendering holder promptly following the expiration or termination of the Exchange Offer. The undersigned understands that tenders of Old Capital Securities pursuant to any one of the procedures described in "The Exchange Offer--Procedures for Tendering Old Capital Securities" in the Prospectus and in the instructions herein will, upon M&I's and the Trust's acceptance for exchange of such tendered Old Capital Securities, constitute a binding agreement between the undersigned, M&I and the Trust upon the terms and subject to the conditions of the Exchange Offer. The undersigned recognizes that, under certain circumstances set forth in the Prospectus, M&I and the Trust may not be required to accept for exchange any of the Old Capital Securities tendered hereby. Unless otherwise indicated herein in the box entitled "Special Issuance Instructions" below, the undersigned hereby directs that the New Capital Securities be issued in the name(s) of the undersigned or, in the case of a book-entry transfer of Old Capital Securities, that such New Capital Securities be credited to the account indicated above maintained at DTC. If applicable, substitute Certificates representing Old Capital Securities not exchanged or not accepted for exchange will be issued to the undersigned or, in the case of a book-entry transfer of Old Capital Securities, will be credited to the account indicated above maintained at DTC. Similarly, unless otherwise indicated under "Special Delivery Instructions," please deliver New Capital Securities to the undersigned at the address shown below the undersigned's signature. BY TENDERING OLD CAPITAL SECURITIES AND EXECUTING THIS LETTER OF TRANSMITTAL, THE UNDERSIGNED HEREBY REPRESENTS AND AGREES THAT: (i) THE UNDERSIGNED (IF NOT A BROKER-DEALER) IS NOT AN "AFFILIATE" OF M&I OR THE TRUST; (ii) ANY NEW CAPITAL SECURITIES TO BE RECEIVED BY THE UNDERSIGNED ARE BEING ACQUIRED IN THE ORDINARY COURSE OF ITS BUSINESS; AND (iii) THE UNDERSIGNED HAS NO ARRANGEMENT OR UNDERSTANDING WITH ANY PERSON TO PARTICIPATE IN A DISTRIBUTION (WITHIN THE MEANING OF THE SECURITIES ACT) OF NEW CAPITAL SECURITIES TO BE RECEIVED IN THE EXCHANGE OFFER. BY TENDERING OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER AND EXECUTING THIS LETTER OF TRANSMITTAL, A HOLDER OF OLD CAPITAL SECURITIES WHICH IS A BROKER-DEALER REPRESENTS AND AGREES, CONSISTENT WITH CERTAIN INTERPRETIVE LETTERS ISSUED BY THE STAFF OF THE DIVISION OF CORPORATION FINANCE OF THE SECURITIES AND EXCHANGE COMMISSION TO THIRD PARTIES, THAT: (i) SUCH OLD CAPITAL SECURITIES HELD BY THE BROKER-DEALER ARE HELD ONLY AS A NOMINEE; OR (ii) SUCH OLD CAPITAL 4 SECURITIES WERE ACQUIRED BY SUCH BROKER-DEALER FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES AND IT WILL DELIVER THE PROSPECTUS MEETING THE REQUIREMENTS OF THE SECURITIES ACT IN CONNECTION WITH ANY RESALE OF SUCH NEW CAPITAL SECURITIES (PROVIDED THAT, BY SO ACKNOWLEDGING AND BY DELIVERING A PROSPECTUS, SUCH BROKER-DEALER WILL NOT BE DEEMED TO ADMIT THAT IT IS AN "UNDERWRITER" WITHIN THE MEANING OF THE SECURITIES ACT). M&I AND THE TRUST HAVE AGREED THAT, SUBJECT TO THE PROVISIONS OF THE CAPITAL SECURITIES REGISTRATION RIGHTS AGREEMENT, THE PROSPECTUS MAY BE USED BY A PARTICIPATING BROKER-DEALER (AS DEFINED BELOW) IN CONNECTION WITH RESALES OF NEW CAPITAL SECURITIES RECEIVED IN EXCHANGE FOR OLD CAPITAL SECURITIES, WHERE SUCH OLD CAPITAL SECURITIES WERE ACQUIRED BY SUCH PARTICIPATING BROKER-DEALER FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES, FOR A PERIOD ENDING ONE YEAR AFTER THE ORIGINAL ISSUANCE OF THE OLD CAPITAL SECURITIES. IN THAT REGARD, EACH BROKER-DEALER WHO ACQUIRED OLD CAPITAL SECURITIES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING OR OTHER TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER"), BY TENDERING SUCH OLD CAPITAL SECURITIES AND EXECUTING THIS LETTER OF TRANSMITTAL, AGREES TO COMPLY WITH APPLICABLE LAWS IN CONNECTION WITH OFFERS AND SALES BY WAY OF THIS PROSPECTUS INCLUDING WITHOUT LIMITATION THE PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT, THE APPLICABLE REQUIREMENTS OF RULE 10B-5 AND UNDER THE EXCHANGE ACT AND REGULATION M, AND THAT, UPON RECEIPT OF NOTICE FROM M&I OR THE TRUST OF THE OCCURRENCE OF ANY EVENT OR THE DISCOVERY OF ANY FACT WHICH MAKES ANY STATEMENT RESPECT OR WHICH CAUSES THE PROSPECTUS TO OMIT TO STATE A MATERIAL FACT NECESSARY CONTAINED OR INCORPORATED BY REFERENCE IN THE PROSPECTUS UNTRUE IN ANY MATERIAL IN ORDER TO MAKE THE STATEMENTS CONTAINED OR INCORPORATED BY REFERENCE THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING OR OF THE OCCURRENCE OF CERTAIN OTHER EVENTS SPECIFIED IN THE CAPITAL SECURITIES REGISTRATION RIGHTS AGREEMENT, SUCH PARTICIPATING BROKER-DEALER WILL SUSPEND THE SALE OF NEW CAPITAL SECURITIES PURSUANT TO THE PROSPECTUS UNTIL M&I AND THE TRUST HAVE AMENDED OR SUPPLEMENTED THE PROSPECTUS TO CORRECT SUCH MISSTATEMENT OR OMISSION AND HAS FURNISHED COPIES OF THE AMENDED OR SUPPLEMENTED PROSPECTUS TO THE PARTICIPATING BROKER-DEALER OR M&I OR THE TRUST HAS GIVEN NOTICE THAT THE SALE OF THE NEW CAPITAL SECURITIES MAY BE RESUMED, AS THE CASE MAY BE. Holders of Old Capital Securities whose Old Capital Securities are accepted for exchange will not receive accumulated distributions on such Old Capital Securities for any period from and after the last Distribution Payment Date to which distributions have been paid or duly provided for on such Old Capital Securities prior to the original issue date of the New Capital Securities or, if no such distributions have been paid or duly provided for, will not receive any accumulated distributions on such Old Capital Securities, and the undersigned waives the right to receive any distributions on such Old Capital Securities accrued from and after such Distribution Payment Date or, if no such distributions have been paid or duly provided for, from and after December 9, 1996. 5 All authority herein conferred or agreed to be conferred in this Letter of Transmittal shall survive the death or incapacity of the undersigned and any obligation of the undersigned hereunder shall be binding upon the heirs, executors, administrators, personal representatives, trustees in bankruptcy, legal representatives, successors and assigns of the undersigned. Except as stated in the Prospectus, this tender is irrevocable. PLEASE SIGN HERE PLEASE SIGN HERE - ------------------------------------- ------------------------------------- Authorized Signature Authorized Signature Name: _______________________________ Name: _______________________________ Title: ______________________________ Title: ______________________________ Address: ____________________________ Address: ____________________________ ------------------------------------- - ------------------------------------- Telephone Number: ___________________ Telephone Number: ___________________ Dated: ______________________________ Dated: ______________________________ ------------------------------------- - ------------------------------------- Taxpayer Identification or Social Security Number Taxpayer Identification or Social Security Number (NOTE: Signature(s) must be guaranteed if required by Instruction 2.) (Must be signed by registered holder exactly as name(s) appear(s) on Certificate(s) for the Old Capital Securities hereby tendered or on a security position listing, or by any person(s) authorized to become the registered holder(s) by endorsements and documents transmitted herewith, including such opinions of counsel, certifications and other information as may be required by the Trust or the Trustee for the Old Capital Securities to comply with the restrictions on transfer applicable to the Old Capital Securities. If signature is by an attorney-in-fact, executor, administrator, trustee, guardian, officer of a corporation or another acting in a fiduciary capacity or representative capacity, please set forth the signer's full title.) (See Instructions 2, 5 and 6) (Please complete substitute Form W-9 below) 6 GUARANTEE OF SIGNATURE(S) (IF REQUIRED -- SEE INSTRUCTIONS 2 AND 5) ------------------------------------- Date: _______________________________ Authorized Signature Name of Eligible Institution Guaranteeing Signature: ------------------------------------- Address: ____________________________ Capacity (full title): ______________ ------------------------------------- Telephone Number: ___________________ ------------------------------------- SPECIAL DELIVERY INSTRUCTIONS SPECIAL ISSUANCE INSTRUCTIONS (SEE INSTRUCTIONS 1, 5 AND 6) (SEE INSTRUCTIONS 1, 5 AND 6) To be completed ONLY if New Capital To be completed ONLY if the New Securities or any Old Capital Capital Securities or any Old Securities that are not tendered are Capital Securities that are not to be sent to someone other than the tendered are to be issued in the registered holder of the Old Capital name of someone other than the Securities whose name(s) appear(s) registered holder of the Old Capital above, or to such registered Securities whose name(s) appear(s) holder(s) at an address other than above. that shown above. Issue: Mail: [_] Old Capital Securities not tendered [_] Old Capital Securities not tendered [_] New Capital Securities, to: [_] New Capital Securities, to: Name(s): ____________________________ Name(s): ____________________________ Address: ____________________________ Address: ____________________________ ------------------------------------- ------------------------------------- Telephone Number: ___________________ Telephone Number: ___________________ ------------------------------------- ------------------------------------- Taxpayer Identification or Social Taxpayer Identification or Social Security Number Security Number 7 INSTRUCTIONS (FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER) 1. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY PROCEDURES. This Letter of Transmittal is to be completed either if (a) Certificates are to be forwarded herewith or (b) tenders are to be made pursuant to the procedures for tender by book-entry transfer set forth in "The Exchange Offer--Procedures for Tendering Old Capital Securities" in the Prospectus and an Agent's Message is not delivered. Certificates, or timely confirmation of a book-entry transfer of such Old Capital Securities into the Exchange Agent's account at DTC, as well as this Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent at its address set forth herein on or prior to the Expiration Date. Tenders by book-entry transfer may also be made by delivering an Agent's Message in lieu of this Letter of Transmittal. The term "book-entry confirmation" means a timely confirmation of book-entry transfer of Old Capital Securities into the Exchange Agent's account at DTC. The term "Agent's Message" means a message, transmitted by DTC to and received by the Exchange Agent and forming a part of a book-entry confirmation, which states that DTC has received an express acknowledgement from the tendering participant, which acknowledgement states that such participant has received and agrees to be bound by the Letter of Transmittal and that the Trust and M&I may enforce the Letter of Transmittal against such participant. Old Capital Securities may be tendered in whole or in part in the principal amount of $100,000 (100 Capital Securities) and integral multiples of $1,000 in excess thereof, provided that, if any Old Capital Securities are tendered for exchange in part, the untendered principal amount thereof must be $100,000 (100 Capital Securities) or any integral multiple of $1,000 in excess thereof. Holders who wish to tender their Old Capital Securities and: (i) whose Old Capital Securities are not immediately available; (ii) who cannot deliver their Old Capital Securities, this Letter of Transmittal and all other required documents to the Exchange Agent on or prior to the Expiration Date; or (iii) who cannot complete the procedures for delivery by book-entry transfer on a timely basis, may tender their Old Capital Securities by properly completing and duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedures set forth in "The Exchange Offer--Procedures for Tendering Old Capital Securities" in the Prospectus. Pursuant to such procedures: (i) such tender must be made by or through an Eligible Institution (as defined below); (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form made available by the Trust, must be received by the Exchange Agent on or prior to the Expiration Date; and (iii) the Certificates (or a book-entry confirmation) representing all tendered Old Capital Securities, in proper form for transfer, together with a Letter of Transmittal (or facsimile thereof or Agent's Message in lieu thereof), properly completed and duly executed, with any required signature guarantees and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent within three New York Stock Exchange, Inc. trading days after the date of execution of such Notice of Guaranteed Delivery, all as provided in "The Exchange Offer--Procedures for Tendering Old Capital Securities" in the Prospectus. The Notice of Guaranteed Delivery may be delivered by hand or transmitted by facsimile or mail to the Exchange Agent and must include a guarantee by an Eligible Institution in the form set forth in such Notice. For Old Capital Securities to be properly tendered pursuant to the guaranteed delivery procedure, the Exchange Agent must receive a Notice of Guaranteed Delivery on or prior to the Expiration Date. As used herein and in the Prospectus, "Eligible Institution" means a firm or other entity identified in Rule 17Ad-15 under the Exchange Act as "an eligible guarantor institution," including (as such terms are defined therein): (i) a bank; (ii) a broker, dealer, municipal securities broker or dealer or government securities broker or dealer; (iii) a credit union; (iv) a national securities exchange, registered securities association or clearing agency; or (v) a savings association that is a participant in a Securities Transfer Association. 8 THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, OR OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. Neither M&I nor the Trust will accept any alternative, conditional or contingent tenders. Each tendering holder, by execution of a Letter of Transmittal (or facsimile thereof or Agent's Message in lieu thereof), waives any right to receive any notice of the acceptance of such tender. 2. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of Transmittal is required if: (i) this Letter of Transmittal is signed by the registered holder (which shall include any participant in DTC whose name appears on a security position listing as the owner of the Old Capital Securities) of Old Capital Securities tendered herewith, unless such holder has completed either the box entitled "Special Issuance Instructions" or the box entitled "Special Delivery Instructions" above; or (ii) such Old Capital Securities are tendered for the account of a firm that is an Eligible Institution. In all other cases, an Eligible Institution must guarantee the signature(s) on this Letter of Transmittal. See Instruction 5. 3. INADEQUATE SPACE. If the space provided in the box captioned "Description of Old Capital Securities Tendered" is inadequate, the Certificate number(s) and/or the principal amount of Old Capital Securities and any other required information should be listed on a separate signed schedule which is attached to this Letter of Transmittal. 4. PARTIAL TENDERS AND WITHDRAWAL RIGHTS. Tenders of Old Capital Securities will be accepted only in the principal amount of $100,000 (100 Capital Securities) and integral multiples of $1,000 in excess thereof, provided that if any Old Capital Securities are tendered for exchange in part, the untendered principal amount thereof must be $100,000 (100 Capital Securities) or any integral multiple of $1,000 in excess thereof. If less than all the Old Capital Securities evidenced by any Certificate submitted are to be tendered, fill in the principal amount of Old Capital Securities which are to be tendered in the box entitled "Liquidation Amount Tendered (if less than all)." In such case, new Certificate(s) for the remainder of the Old Capital Securities that were evidenced by your old Certificate(s) will be sent to the holder of the Old Capital Security, promptly after the Expiration Date unless the appropriate boxes on this Letter of Transmittal are completed. All Old Capital Securities represented by Certificates delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. Except as otherwise provided herein, tenders of Old Capital Securities may be withdrawn at any time on or prior to the Expiration Date. In order for a withdrawal to be effective on or prior to that time, a written or facsimile transmission of such notice of withdrawal must be timely received by the Exchange Agent at its address set forth above or in the Prospectus on or prior to the Expiration Date. Any such notice of withdrawal must specify the name of the person who tendered the Old Capital Securities to be withdrawn, the aggregate principal amount of Old Capital Securities to be withdrawn, and (if Certificates for Old Capital Securities have been tendered) the name of the registered holder of the Old Capital Securities as set forth on the Certificate for the Old Capital Securities, if different from that of the person who tendered such Old Capital Securities. If Certificates for the Old Capital Securities have been delivered or otherwise identified to the Exchange Agent, then prior to the physical release of such Certificates for the Old Capital Securities, the tendering holder must submit the serial numbers shown on the particular Certificates for the Old Capital Securities to be withdrawn and the signature on the notice of withdrawal must be guaranteed by an Eligible Institution, except in the case of Old Capital Securities tendered for the account of an Eligible Institution. If Old Capital Securities have been tendered pursuant to the procedures for book-entry transfer set forth in "The Exchange Offer--Procedures for Tendering Old Capital Securities," the notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawal of Old Capital Securities, 9 in which case a notice of withdrawal will be effective if delivered to the Exchange Agent by written or facsimile transmission. Withdrawals of tenders of Old Capital Securities may not be rescinded. Old Capital Securities properly withdrawn will not be deemed validly tendered for purposes of the Exchange Offer, but may be retendered at any subsequent time on or prior to the Expiration Date by following any of the procedures described in the Prospectus under "The Exchange Offer--Procedures for Tendering Old Capital Securities." All questions as to the validity, form and eligibility (including time of receipt) of such withdrawal notices will be determined by M&I and the Trust, in their sole discretion, whose determination shall be final and binding on all parties. M&I and the Trust, any affiliates or assigns of M&I and the Trust, the Exchange Agent or any other person shall not be under any duty to give any notification of any irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. Any Old Capital Securities which have been tendered but which are withdrawn will be returned to the holder thereof without cost to such holder promptly after withdrawal. 5. SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND ENDORSEMENTS. If this Letter of Transmittal is signed by the registered holder(s) of the Old Capital Securities tendered hereby, the signature(s) must correspond exactly with the name(s) as written on the face of the Certificate(s) or on a security position listing without alteration, enlargement or any change whatsoever. If any of the Old Capital Securities tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If any tendered Old Capital Securities are registered in different name(s) on several Certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal (or facsimiles thereof or Agent's Message in lieu thereof) as there are different registrations of Certificates. If this Letter of Transmittal or any Certificates or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing and must submit proper evidence satisfactory to M&I and the Trust, in their sole discretion, of such persons' authority to so act. When this Letter of Transmittal is signed by the registered owner(s) of the Old Capital Securities listed and transmitted hereby, no endorsement(s) of Certificate(s) or separate bond power(s) are required unless New Capital Securities are to be issued in the name of a person other than the registered holder(s). Signature(s) on such Certificate(s) or bond power(s) must be guaranteed by an Eligible Institution. If this Letter of Transmittal is signed by a person other than the registered owner(s) of the Old Capital Securities listed, the Certificates must be endorsed or accompanied by appropriate bond powers, signed exactly as the name or names of the registered owner(s) appear(s) on the Certificates, and also must be accompanied by such opinions of counsel, certifications and other information as M&I, the Trust or the Trustee for the Old Capital Securities may require in accordance with the restrictions on transfer applicable to the Old Capital Securities. Signatures on such Certificates or bond powers must be guaranteed by an Eligible Institution. 6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If New Capital Securities are to be issued in the name of a person other than the signer of this Letter of Transmittal, or if New Capital Securities are to be sent to someone other than the signer of this Letter of Transmittal or to an address other than that shown above, the appropriate boxes on this Letter of Transmittal should be completed. Certificates for Old Capital Securities not exchanged will be returned by mail or, if tendered by book-entry transfer, by crediting the account indicated above maintained at DTC. See Instruction 4. 10 7. IRREGULARITIES. M&I and the Trust will determine, in their sole discretion, all questions as to the form of documents, validity, eligibility (including time of receipt) and acceptance for exchange of any tender of Old Capital Securities, which determination shall be final and binding on all parties. M&I and the Trust reserve the absolute right to reject any and all tenders determined by either of them not to be in proper form or the acceptance of which, or exchange for, may, in the view of counsel to M&I and the Trust, be unlawful. M&I and the Trust also reserve the absolute right, subject to applicable law, to waive any of the conditions of the Exchange Offer set forth in the Prospectus under "The Exchange Offer--Conditions to the Exchange Offer" or any conditions or irregularity in any tender of Old Capital Securities of any particular holder whether or not similar conditions or irregularities are waived in the case of other holders. M&I's and the Trust's interpretation of the terms and conditions of the Exchange Offer (including this Letter of Transmittal and the instructions hereto) will be final and binding. No tender of Old Capital Securities will be deemed to have been validly made until all irregularities with respect to such tender have been cured or waived. M&I, the Trust, any affiliates or assigns of M&I, the Trust, the Exchange Agent, or any other person shall not be under any duty to give notification of any irregularities in tenders or incur any liability for failure to give such notification. 8. QUESTIONS, REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions and requests for assistance may be directed to the Exchange Agent at its address and telephone number set forth above. Additional copies of the Prospectus, the Notice of Guaranteed Delivery and the Letter of Transmittal may be obtained from the Exchange Agent or from your broker, dealer, commercial bank, trust company or other nominee. 9. BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal income tax law, a holder whose tendered Old Capital Securities are accepted for exchange is required to provide the Exchange Agent with such holder's correct taxpayer identification number ("TIN") on Substitute Form W-9 below. If the Exchange Agent is not provided with the correct TIN, the Internal Revenue Service (the "IRS") may subject the holder or other payee to a $50 penalty. In addition, payments to such holders or other payees with respect to Old Capital Securities exchanged pursuant to the Exchange Offer may be subject to 31% backup withholding. The box in Part 2 of the Substitute Form W-9 may be checked if the tendering holder has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future. If the box in Part 2 is checked, the holder or other payee must also complete the Certificate of Awaiting Taxpayer Identification Number below in order to avoid backup withholding. Notwithstanding that the box in Part 2 is checked and the Certificate of Awaiting Taxpayer Identification Number is completed, the Exchange Agent will withhold 31% of all payments made prior to the time a properly certified TIN is provided to the Exchange Agent. The Exchange Agent will retain such amounts withheld during the 60 day period following the date of the Substitute Form W- 9. If the holder furnishes the Exchange Agent with its TIN within 60 days after the date of the Substitute Form W-9, the amounts retained during the 60 day period will be remitted to the holder and no further amounts shall be retained or withheld from payments made to the holder thereafter. If, however, the holder has not provided the Exchange Agent with its TIN within such 60 day period, amounts withheld will be remitted to the IRS as backup withholding. In addition, 31% of all payments made thereafter will be withheld and remitted to the IRS until a correct TIN is provided. The holder is required to give the Exchange Agent the TIN (e.g., social security number or employer identification number) of the registered owner of the Old Capital Securities or of the last transferee appearing on the transfers attached to, or endorsed on, the Old Capital Securities. If the Old Capital Securities are registered in more than one name or are not in the name of the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional guidance on which number to report. 11 Certain holders (including, among others, corporations, financial institutions and certain foreign persons) may not be subject to these backup withholding and reporting requirements. Such holders should nevertheless complete the attached Substitute Form W-9 below, and write "exempt" on the face thereof, to avoid possible erroneous backup withholding. A foreign person may qualify as an exempt recipient by submitting a properly completed IRS Form W-8, signed under penalties of perjury, attesting to that holder's exempt status. Please consult the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional guidance on which holders are exempt from backup withholding. Backup withholding is not an additional U.S. Federal income tax. Rather, the U.S. Federal income tax liability of a person subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained. 10. LOST, DESTROYED OR STOLEN CERTIFICATES. If any Certificate(s) representing Old Capital Securities have been lost, destroyed or stolen, the holder should promptly notify the Exchange Agent. The holder will then be instructed as to the steps that must be taken in order to replace the Certificate(s). This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost, destroyed or stolen Certificate(s) have been followed. 11. SECURITY TRANSFER TAXES. Holders who tender their Old Capital Securities for exchange will not be obligated to pay any transfer taxes in connection therewith. If, however, New Capital Securities are to be delivered to, or are to be issued in the name of, any person other than the registered holder of the Old Capital Securities tendered, or if a transfer tax is imposed for any reason other than the exchange of Old Capital Securities in connection with the Exchange Offer, then the amount of any such transfer tax (whether imposed on the registered holder or any other persons) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with the Letter of Transmittal, the amount of such transfer taxes will be billed directly to such tendering holder. IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF OR AGENT'S MESSAGE IN LIEU THEREOF) AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE EXCHANGE AGENT ON OR PRIOR TO THE EXPIRATION DATE. 12 TO BE COMPLETED BY ALL TENDERING SECURITYHOLDERS: (SEE INSTRUCTION 9) PAYER'S NAME: THE CHASE MANHATTAN BANK - ------------------------------------------------------------------------------- SUBSTITUTE PART 1--PLEASE PROVIDE Social Security Number or FORM W-9 YOUR TIN ON THE LINE AT Employer Identification RIGHT AND CERTIFY BY Number SIGNING AND DATING BELOW DEPARTMENT OF THE TREASURY INTERNAL --------------------------- REVENUE SERVICE ---------------------------------------------------------- PART 2--CERTIFICATION--Under penalties of perjury, I certify that: PAYER'S REQUEST FOR (1) The number shown on this form is my correct TAXPAYER'S taxpayer identification number (or I am waiting for IDENTIFICATION a number to be issued to me); NUMBER (TIN) (2) I am not subject to backup withholding either because: (a) I am exempt from backup withholding; (b) I have not been notified by the Internal Revenue Service ("IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends; or (c) the IRS has notified me that I am no longer subject to backup withholding; and (3) Any other information provided on this form is true and correct. CERTIFICATION INSTRUCTIONS--You must cross out item (2) above if you have been notified by the IRS that you are subject to backup withholding because of underreporting interest or dividends on your tax return and you have not been notified by the IRS that you are no longer subject to backup withholding. ---------------------------------------------------------- Signature: ________________ PART 3-- Date: _____________________ Awaiting TIN [_] NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY IN CERTAIN CIRCUMSTANCES RESULT IN BACKUP WITHHOLDING OF 31% OF ANY AMOUNTS PAID TO YOU PURSUANT TO THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, 31% of all payments made to me on account of the New Capital Securities shall be retained until I provide a taxpayer identification number to the Exchange Agent and that, if I do not provide my taxpayer identification number within 60 days, such retained amounts shall be remitted to the Internal Revenue Service as backup withholding and 31% of all reportable payments made to me thereafter will be withheld and remitted to the Internal Revenue Service until I provide a taxpayer identification number. ------------------------------------- ___________________, 1997 Signature Date 13 EX-99.2 8 FORM OF NOTICE OF GUARANTEED DELIVERY NOTICE OF GUARANTEED DELIVERY FOR TENDER OF 7.65% CAPITAL SECURITIES (LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY) OF M&I CAPITAL TRUST A FULLY AND UNCONDITIONALLY GUARANTEED BY MARSHALL & ILSLEY CORPORATION As set forth in the Exchange Offer, this Notice of Guaranteed Delivery, or one substantially equivalent to this form, must be used to accept the Exchange Offer (as defined below) if (i) certificates for the Trust's (as defined below) 7.65% Capital Securities due December 1, 2026 (the "Old Capital Securities") are not immediately available, (ii) Old Capital Securities, the Letter of Transmittal and all other required documents cannot be delivered to The Chase Manhattan Bank (the "Exchange Agent") on or prior to the Expiration Date (as defined in the Prospectus referred to below) or (iii) the procedures for delivery by book-entry transfer cannot be completed on a timely basis. This Notice of Guaranteed Delivery may be delivered by hand, overnight courier or mail, or transmitted by facsimile transmission, to the Exchange Agent. See "The Exchange Offer--Procedures for Tendering Old Capital Securities" in the Prospectus. The Exchange Agent for the Exchange Offer is: THE CHASE MANHATTAN BANK By Mail or Hand Delivery: By Facsimile To Confirm by Telephone: Transmission: The Chase Manhattan Bank (212) 638-7375 Carlos Esteves: (212) or 638-0828 55 Water Street, Second (212) 344-9367 Floor Room 234--North Building New York, New York 10041 Attn: Carlos Esteves DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY VIA FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL. LADIES AND GENTLEMEN: The undersigned hereby tenders to M&I Capital Trust A, a Delaware business trust (the "Trust"), upon the terms and subject to the conditions set forth in the Prospectus dated March 7, 1997 (as the same may be amended or supplemented from time to time, the "Prospectus"), and the related Letter of Transmittal (which together constitute the "Exchange Offer"), receipt of which is hereby acknowledged, the aggregate liquidation amount of Old Capital Securities set forth below pursuant to the guaranteed delivery procedures set forth in the Prospectus under the caption "The Exchange Offer--Procedures for Tendering Old Capital Securities." Certificate No(s). (if available): Name of Registered Holder(s): - ------------------------------------- ------------------------------------- - ------------------------------------- ------------------------------------- Aggregate Liquidation Amount Tendered: Address: - ------------------------------------- ------------------------------------- Area Code and Telephone Number(s): ------------------------------------- - ------------------------------------- ------------------------------------- If Old Capital Securities will be tendered by book-entry transfer, provide the following information: Signature(s): _________________________________________________________________ DTC Account Number: ___________________________________________________________ Date: _________________________________________________________________________ GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, a firm or other entity identified in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, as an "eligible guarantor institution," including (as such terms are defined therein): (i) a bank; (ii) a broker, dealer, municipal securities broker, municipal securities dealer, government securities broker or government securities dealer; (iii) a credit union; (iv) a national securities exchange, registered securities association or clearing agency; or (v) a savings association that is a participant in a Securities Transfer Association recognized program (each of the foregoing being referred to as an "Eligible Institution"), hereby guarantees to deliver to the Exchange Agent, at one of its addresses set forth above, either the Old Capital Securities tendered hereby in proper form for transfer, or confirmation of the book-entry transfer of such Old Capital Securities to the Exchange Agent's account at The Depository Trust Company ("DTC"), pursuant to the procedures for book-entry transfer set forth in the Prospectus, in either case together with one or more properly completed and duly executed Letter(s) of Transmittal (or facsimile thereof or Agent's Message in lieu thereof) and any other required documents within three business days after the date of execution of this Notice of Guaranteed Delivery. The undersigned acknowledges that it must deliver the Letters of Transmittal (or a facsimile thereof or Agent's Message in lieu thereof) and the Old Capital Securities (or a book- entry confirmation) tendered hereby to the Exchange Agent within the time period set forth above and that failure to do so could result in a financial loss to the undersigned. Name of Firm: -------------------------- ------------------------------------- Address: Authorized Signature ------------------------------ Name: - ------------------------------------- -------------------------------- Title: Telephone Number: --------------------------------- --------------------- Dated: -------------------------------- NOTE: DO NOT SEND OLD CAPITAL SECURITIES WITH THIS NOTICE OF GUARANTEED DELIVERY. ACTUAL SURRENDER OF OLD CAPITAL SECURITIES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS. 2 EX-99.3 9 FORM OF EXCHANGE AGENT AGREEMENT Exhibit 99.3 March ___, 1997 EXCHANGE AGENT AGREEMENT ------------------------ The Chase Manhattan Bank 450 West 33rd Street, 15th Floor New York, NY 10001 Ladies and Gentlemen: M&I Capital Trust A, a Delaware statutory business trust (the "Trust") proposes to make an offer (the "Exchange Offer") to exchange up to $200,000,000 aggregate liquidation amount of its 7.65% Capital Securities (liquidation amount $1,000 per Capital Security) (the "New Capital Securities"), which have been registered under the Securities Act of 1933, as amended (the "Securities Act"), for a like liquidation amount of its outstanding 7.65% Capital Securities (liquidation amount $1,000 per Capital Security) (the "Old Capital Securities"), of which $200,000,000 aggregate liquidation amount is outstanding. The terms and conditions of the Exchange Offer as currently contemplated are set forth in a prospectus, dated March 7, 1997 (the "Prospectus"), a copy of which is attached to this Agreement as Attachment A, proposed to be distributed to all record holders of the Old Capital Securities. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to them in the Prospectus. The Trust hereby appoints The Chase Manhattan Bank to act as exchange agent (the "Exchange Agent") in connection with the Exchange Offer. References hereinafter to "you" shall refer to The Chase Manhattan Bank. The Exchange Offer is expected to be commenced by the Trust on or about March 11, 1997. The Letter of Transmittal accompanying the Prospectus is to be used by the holders of the Old Capital Securities to accept the Exchange Offer, and contains certain instructions with respect to the Exchange Offer. The Exchange Offer shall expire at 5:00 p.m., New York City time, on April 10, 1997 or on such later date or time to which the Trust or Marshall & Ilsley Corporation (the "Company") may extend the Exchange Offer (the "Expiration Date"). Subject to the terms and conditions set forth in the Prospectus, the Trust and the Company expressly reserve the right to extend the Exchange Offer from time to time and may extend the Exchange Offer by giving oral (promptly confirmed in writing) or written notice to you no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. The Trust and the Company expressly reserve the right to amend or terminate the Exchange Offer, and not to accept for exchange any Old Capital Securities not theretofore accepted for exchange, upon the occurrence of any of the conditions of the Exchange Offer specified in the Prospectus under the caption "The Exchange Offer - Conditions to the Exchange Offer." The Trust or the Company will give oral (promptly confirmed in writing) or written notice of any amendment, termination or nonacceptance to you as promptly as practicable. In carrying out your duties as Exchange Agent, you are to act in accordance with the following instructions: 1. You will perform such duties and only such duties as are specifically set forth in the section of the Prospectus captioned "The Exchange Offer" and as specifically set forth herein and such duties which are necessarily incidental thereto; provided, however, that in no way will your general duty to act in good faith be discharged by the foregoing. 2. You will establish an account with respect to the Old Capital Securities at The Depository Trust Company (the "Book-Entry Transfer Facility") for purposes of the Exchange Offer within two business days after the date of the Prospectus, and any financial institution that is a participant in the Book- Entry Transfer Facility's systems may make book-entry delivery of the Old Capital Securities by causing the Book-Entry Transfer Facility to transfer such Old Capital Securities into your account in accordance with the Book-Entry Transfer Facility's procedures for such transfer. 3. You are to examine each of the Letters of Transmittal, certificates for Old Capital Securities and confirmations of book-entry transfers into your account at the Book-Entry Transfer Facility and any Agent's Message or other documents delivered or mailed to you by or for holders of the Old Capital Securities to ascertain whether: (i) the Letters of Transmittal and any such other documents are duly executed and properly completed in accordance with instructions set forth therein and (ii) the Old Capital Securities have otherwise been properly tendered. In each case where the Letter of Transmittal or any other document has been improperly completed or executed or any of the certificates for Old Capital Securities are not in proper form for transfer or some other irregularity in connection with the acceptance of the Exchange Offer exists, you will endeavor to inform the presenters of the need for fulfillment of all requirements and to take any other action as may be necessary or advisable to cause such irregularity to be corrected. 4. With the approval of the Trust or the Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer or the Secretary of the Company (such approval, if given orally, to be confirmed in writing) or any other party designated by the Trust or such officer of the Company in writing, you are authorized to waive any irregularities in connection with any tender of Old Capital Securities pursuant to the Exchange Offer. 5. Tenders of Old Capital Securities may be made only as set forth in the section of the Prospectus captioned "The Exchange Offer - Procedures for Tendering Old Capital Securities" or in the Letter of Transmittal and Old Capital Securities shall be considered properly tendered to you only when tendered in accordance with the procedures set forth therein. 2 Notwithstanding the provisions of this paragraph 5, Old Capital Securities which the Trust or any other party designated by the Trust in writing shall approve as having been properly tendered shall be considered to be properly tendered (such approval, if given orally, shall be confirmed in writing). 6. You shall advise the Trust with respect to any Old Capital Securities delivered subsequent to the Expiration Date and accept its instructions with respect to disposition of such Old Capital Securities. 7. You shall accept tenders: (a) in cases where the Old Capital Securities are registered in two or more names only if signed by all named holders; (b) in cases where the signing person (as indicated on the Letter of Transmittal) is acting in a fiduciary or a representative capacity only when proper evidence of his or her authority to act is submitted; and (c) from persons other than the registered holder of Old Capital Securities provided that customary transfer requirements, including any applicable transfer taxes, are fulfilled. You shall accept partial tenders of Old Capital Securities where so indicated and as permitted in the Letter of Transmittal and deliver certificates for Old Capital Securities to the transfer agent for split-up and return any untendered Old Capital Securities to the holder (or to such other person as may be designated in the Letter of Transmittal) as promptly as practicable after expiration or termination of the Exchange Offer. 8. Upon satisfaction or waiver of all of the conditions to the Exchange Offer, the Trust will notify you (such notice if given orally, to be promptly confirmed in writing) of the Company's and Trust's acceptance, promptly after the Expiration Date, of all Old Capital Securities properly tendered and you, on behalf of the Trust, will exchange such Old Capital Securities for New Capital Securities and cause such Old Capital Securities to be canceled. Delivery of New Capital Securities will be made on behalf of the Trust by you at the rate of $1,000 liquidation amount of New Capital Securities for each $1,000 liquidation amount of the Old Capital Securities tendered promptly after notice (such notice if given orally, to be promptly confirmed in writing) of acceptance of said Old Capital Securities by the Trust; provided, however, that in all cases, Old Capital Securities tendered pursuant to the Exchange Offer will be exchanged only after timely receipt by you of certificates for such Old Capital Securities (or confirmation of book-entry transfer into your account at the Book-Entry Transfer Facility); a properly completed and duly executed Letter of Transmittal (or facsimile thereof) with any required signature guarantees (or in lieu thereof an Agent's Message) and any 3 other required document. You shall issue New Capital Securities only in denominations of $1,000 or any integral multiple thereof, provided that no New Capital Securities will be issued except in an aggregate amount of at least $100,000. 9. Tenders pursuant to the Exchange Offer are irrevocable, except that, subject to the terms and upon the conditions set forth in the Prospectus and the Letter of Transmittal, Old Capital Securities tendered pursuant to the Exchange Offer may be withdrawn at any time on or prior to the Expiration Date. 10. The Company and the Trust shall not be required to exchange any Old Capital Securities tendered if any of the conditions set forth in the Exchange Offer are not met. Notice of any decision by the Company and the Trust not to exchange any Old Capital Securities tendered shall be given (such notice, if given orally, shall be promptly confirmed in writing) by the Company or the Trust to you. 11. If, pursuant to the Exchange Offer, the Company or the Trust does not accept for exchange all or part of the Old Capital Securities tendered because of an invalid tender, the occurrence of certain other events set forth in the Prospectus under the caption "The Exchange Offer - Conditions to the Exchange Offer" or otherwise, you shall as soon as practicable after the expiration or termination of the Exchange Offer return those certificates for unaccepted Old Capital Securities (or effect the appropriate book-entry transfer of the unaccepted Old Capital Securities), and return any related required documents and the Letters of Transmittal relating thereto that are in your possession, to the persons who deposited them. 12. All certificates for reissued Old Capital Securities or for unaccepted Old Capital Securities shall be forwarded by (a) first-class mail, return receipt requested, under a blanket surety bond protecting you, the Trust and the Company from loss or liability arising out of the non-receipt or non-delivery of such certificates or (b) by registered mail insured separately for the replacement value of such certificates. 13. You are not authorized to pay or offer to pay any concessions, commissions or solicitation fees to any broker, dealer, bank or other persons or to engage or utilize any person to solicit tenders. 14. As Exchange Agent hereunder you: (a) will be regarded as making no representations and having no responsibilities as to the validity, sufficiency, value or genuineness of Old Capital Securities, and will not be required to and will make no representation as to the validity, value or genuineness of the Exchange Offer; provided, however, that in no way will your general duty to act in good faith be discharged by the foregoing; (b) shall not be obligated to take any legal action hereunder which might in your reasonable judgment involve any expense or liability, unless you shall have been furnished with reasonable indemnity; 4 (c) shall not be liable to the Company or the Trust for any action taken or omitted by you, or any action suffered by you to be taken or omitted, without negligence, misconduct or bad faith on your part, by reason of or as a result of the administration of your duties hereunder in accordance with the terms and conditions of this Agreement or by reason of your compliance with the instructions set forth herein or with any written or oral instructions delivered to you pursuant hereto, and may reasonably rely on and shall be protected in acting in good faith in reliance upon any certificate, instrument, opinion, notice, letter, facsimile or other document or security delivered to you and reasonably believed by you to be genuine and to have been signed by the proper party or parties; (d) may reasonably act upon any tender, statement, request, comment, agreement or other instrument whatsoever not only as to its due execution and validity and the effectiveness of its provisions, but also as to the truth and accuracy of any information contained therein, which you shall in good faith reasonably believe to be genuine or to have been signed or represented by a proper person or persons; (e) may rely on and shall be protected in acting upon written or oral instructions from the Trust or any officer of the Company with respect to the Exchange Offer; (f) shall not advise any person tendering Old Capital Securities pursuant to the Exchange Offer as to the wisdom of making such tender or as to the market value or decline or appreciation in market value of any Old Capital Securities; and (g) may consult with your counsel with respect to any questions relating to your duties and responsibilities and the written opinion of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by you hereunder in good faith and in accordance with such written opinion of such counsel. 15. You shall take such action as may from time to time be requested by the Company, the Trust or their counsel (and such other action as you may reasonably deem appropriate) to furnish copies of the Prospectus, Letter of Transmittal and the Notice of Guaranteed Delivery, or such other forms as may be approved from time to time by the Company or the Trust, to all persons requesting such documents and to accept and comply with telephone requests for information relating to the Exchange Offer, provided that such information shall relate only to the procedures for accepting (or withdrawing from) the Exchange Offer. The Company or the Trust will furnish you with copies of such documents at your request. All other requests for information relating to the Exchange Offer shall be directed to the Secretary of the Company at: 770 North Water Street, Milwaukee, Wisconsin 53202. 16. You shall advise by facsimile transmission or telephone, and promptly thereafter confirm in writing to the Trust, the Company and Godfrey & Kahn, S.C., counsel for the Company and the Trust, and such other person or persons as they may request, daily, and more frequently if reasonably requested, up to and including the Expiration Date, as to the liquidation 5 amount of the Old Capital Securities which have been tendered pursuant to the Exchange Offer and the items received by you pursuant to this Agreement, separately reporting and giving cumulative totals as to items properly received and items improperly received and items covered by Notices of Guaranteed Delivery. In addition, you will also inform, and cooperate in making available to, the Company and the Trust or any such other person or persons as the Company or the Trust request from time to time prior to the Expiration Date of such other information as they, or he reasonably requests. Such cooperation shall include, without limitation, the granting by you to the Company, the Trust and such person as the Company or the Trust may request of access to those persons on your staff who are responsible for receiving tenders, in order to ensure that immediately prior to the Expiration Date, the Company and the Trust shall have received information in sufficient detail to enable them to decide whether to extend the Exchange Offer. You shall prepare a list of persons who failed to tender or whose tenders were accepted and the aggregate liquidation amount of Old Capital Securities not tendered or Old Capital Securities not accepted and deliver said list to the Company and the Trust at least seven days prior to the Expiration Date. You shall also prepare a final list of all persons whose tenders were accepted, the aggregate liquidation amount of Old Capital Securities tendered and the aggregate liquidation amount of Old Capital Securities accepted and deliver said list to the Company. 17. Letters of Transmittal and Notices of Guaranteed Delivery shall be stamped by you as to the date and the time of receipt thereof and shall be preserved by you for a period of time at least equal to the period of time you preserve other records pertaining to the transfer of securities. You shall dispose of unused Letters of Transmittal and other surplus materials by returning them to the Company. 18. For services rendered as Exchange Agent hereunder you shall be entitled to a fee of $5,000 and you shall be entitled to reimbursement of your expenses (including fees and expenses of your counsel, which fees are expected under normal circumstances to be not in excess of $5,000 incurred in connection with the Exchange Offer). The obligations under this Section 18 shall constitute joint and several obligations of the Trust and the Company. 19. You hereby acknowledge receipt of the Prospectus and the Letter of Transmittal attached hereto and further acknowledge that you have examined each of them to the extent necessary to perform your obligations hereunder. Any inconsistency between this Agreement, on the one hand, and the Prospectus and the Letter of Transmittal (as they may be amended from time to time), on the other hand, shall be resolved in favor of the latter two documents, except with respect to the duties, liabilities and indemnification of you as Exchange Agent, which shall be controlled by this Agreement. 20. The Company and the Trust jointly and severally agree to indemnify and hold you harmless in your capacity as Exchange Agent hereunder against any liability, cost or expense, including reasonable attorneys' fees, arising out of or in connection with the acceptance or administration of your duties hereunder, including, without limitation, in connection with any act, omission, delay or refusal made by you in reasonable reliance upon any signature, endorsement, assignment, certificate, order, request, notice, instruction or other instrument or document 6 reasonably believed by you to be valid, genuine and sufficient and in accepting any tender or effecting any transfer of Old Capital Securities reasonably believed by you in good faith to be authorized, and in delaying or refusing in good faith to accept any tenders or effect any transfer of Old Capital Securities; provided, however, that the Company and the Trust shall not be liable for indemnification or otherwise for any loss, liability, cost or expense to the extent arising out of your negligence, willful breach of this Agreement, willful misconduct or bad faith. In no case shall the Company and the Trust be liable under this indemnity with respect to any claim against you unless the Company and the Trust shall be notified by you, by letter or cable or by facsimile confirmed by letter, of the written assertion of a claim against you or of any other action commenced against you, promptly after you shall have received any such written assertion or commencement of action. The Company and the Trust shall be entitled to participate at their own expense in the defense of any such claim or other action, and, if the Company and the Trust so elect, the Company and the Trust shall assume the defense of any suit brought to enforce any such claim. In the event that the Company and the Trust shall assume the defense of any such suit, the Company and the Trust shall not be liable for the fees and expenses of any additional counsel thereafter retained by you so long as the Company and the Trust shall retain counsel reasonably satisfactory to you to defend such suit. You shall not compromise or settle any such action or claim without the consent of the Company and the Trust. 21. This Agreement and your appointment as Exchange Agent hereunder shall be construed and enforced in accordance with the laws of the State of New York applicable to agreements made and to be performed entirely within such state, and without regard to conflicts of law principles, and shall inure to the benefit of, and the obligations created hereby shall be binding upon, the successors and assigns of each of the parties hereto. 22. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which taken together shall constitute one and the same instrument. 23. In case any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 24. This Agreement shall not be deemed or construed to be modified, amended, rescinded, canceled or waived, in whole or in part, except by a written instrument signed by a duly authorized representative of the party to be charged. This Agreement may not be modified orally. 25. Unless otherwise provided herein, all notices, requests and other communications to any party hereunder shall be in writing (including facsimile) and shall be given to such party, addressed to it, at its address or telecopy number set forth below: 7 If to the Company or the Trust: Marshall & Ilsley Corporation 770 North Water Street Milwaukee, Wisconsin 53202 Facsimile: (414) 765-7899 Attention: M.A. Hatfield With a copy to: Godfrey & Kahn, S.C. 780 North Water Street Milwaukee, Wisconsin 53202 Facsimile: (414) 273-5198 Attention: Larry D. Lieberman If to the Exchange Agent: The Chase Manhattan Bank 450 West 33rd Street, 15th Floor New York, New York 10001 Facsimile: (212) 946-8159 Attention: Gregory Shea 26. Unless terminated earlier by the parties hereto, this Agreement shall terminate 90 days following the Expiration Date. Notwithstanding the foregoing, Paragraphs 18 and 20 shall survive the termination of this Agreement. Except as provided in Section 17, upon any termination of this Agreement, you shall promptly deliver to the Company any funds or property (including, without limitation, Letters of Transmittal and any other documents relating to the Exchange Offer) then held by you as Exchange Agent under this Agreement. 27. This Agreement shall be binding and effective as of the date hereof. Please acknowledge receipt of this Agreement and confirm the arrangements herein provided by signing and returning the enclosed copy. MARSHALL & ILSLEY CORPORATION By: ---------------------------------- M.A. Hatfield, Senior Vice President & Secretary 8 M&I CAPITAL TRUST A By: ---------------------------- M.A. Hatfield, Regular Trustee Accepted as the date first above written: THE CHASE MANHATTAN BANK By: -------------------------------- Name: Title: 9 -----END PRIVACY-ENHANCED MESSAGE-----