Exhibit 10.1
CHANGE OF CONTROL
AGREEMENT
THIS AGREEMENT, entered into as of the
19th day of June , 2006, by and between MARSHALL
& ILSLEY CORPORATION (the “Company”), and
Gregory A. Smith (the “Executive”) (hereinafter
collectively referred to as “the parties”).
W I T N E S S E T H:
WHEREAS, the Board of Directors of the
Company (the “Board”) recognizes that the possibility
of a Change of Control (as hereinafter defined in Section 2) exists
and that the threat of or the occurrence of a Change of Control can
result in significant distractions of its key management personnel
because of the uncertainties inherent in such a situation;
and
WHEREAS, the Board has determined that it
is essential and in the best interest of the Company and its
shareholders to retain the services of the Executive in the event
of a threat or occurrence of a Change of Control and to ensure his
continued dedication and efforts in such event without undue
concern for his personal financial and employment security;
and
WHEREAS, in order to induce the Executive
to remain in the employ of the Company, particularly in the event
of a threat of or the occurrence of a Change of Control, the
Company desires to enter into this Agreement with the
Executive.
NOW, THEREFORE, in consideration of the
respective agreements of the parties contained herein, it is agreed
as follows:
1. Employment Term .
(a) The “Employment Term” shall commence on the
first date during the Protected Period (as defined in Section 1(c),
below) on which a Change of Control (as defined in Section 2,
below) occurs (the “Effective Date”) and shall expire
on the third anniversary of the Effective Date; provided ,
however , that at the end of each day of the Employment Term
the Employment Term shall automatically be extended for one (1) day
unless either the Company or the Executive shall have given written
notice to the other at least thirty (30) days prior thereto that
the Employment Term shall not be so extended.
(b) Notwithstanding anything
contained in this Agreement to the contrary, if the
Executive’s employment is terminated prior to the Effective
Date and the Executive reasonably demonstrates that such
termination (i) was at the request of a third party who has
indicated an intention or taken steps reasonably calculated to
effect a Change of Control, or (ii) otherwise occurred in
connection with or in anticipation of a Change of Control, then for
all purposes of this Agreement, the Effective Date shall mean the
date immediately prior to the date of such termination of the
Executive’s employment.
(c) For purposes of this Agreement,
the “Protected Period” shall be the three (3) year
period commencing on the date hereof; provided,
however , that at the end of each day the Protected Period
shall be automatically extended for one (1) day unless at least
thirty (30) days prior thereto the Company shall have given written
notice to the Executive that the Protected Period shall not be so
extended; and provided , further , that
notwithstanding any such notice by the Company not to extend, the
Protected Period shall not end if prior to the expiration thereof
any third party has indicated an intention or taken steps
reasonably calculated to effect a Change of Control, in which event
the Protected Period shall end only after such third party publicly
announces that it has abandoned all efforts to effect a Change of
Control.
2. Change of Control .
For purposes of this Agreement, a “Change of
Control” shall mean the first to occur of the
following:
(a) The acquisition by any
individual, entity or “group” (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”)) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of thirty-three percent (33%) or more of either (i)
the then outstanding shares of common stock of the Company (the
“Outstanding Company Common Stock”) or (ii) the
combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors
(the “Outstanding Company Voting Securities”);
provided , however , that the following acquisitions
of common stock shall not constitute a Change of Control: (i)
any acquisition directly from the Company (excluding an acquisition
by virtue of the exercise of a conversion privilege or by one
person or a group of persons acting in concert), (ii) any
acquisition by the Company, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company or (iv) any
acquisition by any corporation pursuant to a reorganization,
merger, statutory share exchange or consolidation which would not
be a Change of Control under subsection (c) of this Section 2;
or
(b) Individuals who, as of the date
hereof, constitute the Board (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the
Board; provided , however , that any individual
becoming a director subsequent to the date hereof whose election,
or nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of
office occurs as a result of either an actual or threatened
“election contest” or other actual or threatened
“solicitation” (as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act) of proxies or
consents by or on behalf of a person other than the Incumbent
Board; or
(c) Consummation of a
reorganization, merger, statutory share exchange or consolidation,
unless, following such reorganization, merger, statutory share
exchange or consolidation, (i) more than two-thirds (2/3) of,
respectively, the then outstanding shares of common stock of the
corporation resulting from such reorganization, merger, statutory
share exchange or consolidation and the combined voting power of
the then outstanding voting securities of such corporation entitled
to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such
reorganization, merger, statutory share exchange or consolidation
in substantially the same proportions as their ownership,
immediately prior to such reorganization, merger, statutory share
exchange or consolidation, (ii) no person (excluding the Company,
any employee benefit plan (or related trust) of the Company or such
corporation resulting from such reorganization, merger, statutory
share exchange or consolidation and any person beneficially owning,
immediately prior to such reorganization, merger, statutory share
exchange or consolidation, directly or indirectly, thirty-three
percent (33%) or more of the Outstanding Company Common Stock or
Outstanding Voting Securities, as the case may be) beneficially
owns, directly or indirectly, thirty-three percent (33%) or more
of, respectively, the then outstanding shares of common stock of
the corporation resulting from such reorganization, merger,
statutory share exchange or consolidation or the combined voting
power of the then outstanding voting securities of such
corporation, entitled to vote generally in the election of
directors and (iii) at least a majority of the members of the board
of directors of the corporation resulting from such reorganization,
merger, statutory share exchange or consolidation were members of
the Incumbent Board at the time of the execution of the initial
agreement providing for such reorganization, merger or
consolidation; or
(d) Consummation of (i) a complete
liquidation or dissolution of the Company or (ii) the sale or other
disposition of all or substantially all of the assets of the
Company, other than to a corporation, with respect to which
following such sale or other disposition, (A) more than two-thirds
(2/3) of, respectively, the then outstanding shares of common stock
of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such
sale or other disposition in substantially the same proportion as
their ownership, immediately prior to such sale or other
disposition, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (B) no
person (excluding the Company and any employee benefit plan (or
related trust) of the Company or such corporation and any person
beneficially owning, immediately prior to such sale or other
disposition, directly or indirectly, thirty-three percent (33%) or
more of the Outstanding Company Common Stock or Outstanding Company
Voting Securities, as the case may be) beneficially owns, directly
or indirectly, thirty-three percent (33%) or more of, respectively,
the then outstanding shares of common stock of such corporation or
the combined voting power of the then outstanding voting securities
of such corporation entitled to vote generally in the election of
directors and (C) at least a majority of the members of the board
of directors of such corporation were members of the Incumbent
Board at the time of the execution of the initial agreement or
action of the Board providing for such sale or other disposition of
assets of the Company.
3. Employment . (a)
Subject to the provisions of Section 3, hereof, the Company agrees
to continue to employ the Executive and the Executive agrees to
remain in the employ of the Company during the Employment Term.
During the Employment Term, the Executive shall be employed
in such executive capacity as may be mutually agreed to by the
parties. During the Employment Term, Executive’s
position (including status, offices, titles and reporting
requirements), authority, duties and responsibilities shall be at
least commensurate in all material respects with the most
significant of those held or assigned at any time during the twelve
(12) month period immediately preceding the Effective Date, and
Executive’s services shall be performed at the location where
Executive was employed immediately preceding the Effective Date or
at any office or location less than thirty-five (35) miles from
such location, unless mutually agreed to in writing by the
parties.
(b) Excluding periods of vacation
and sick leave to which the Executive is entitled, during the
Employment Term the Executive agrees to devote full time attention
to the business and affairs of the Company to the extent necessary
to discharge the responsibilities assigned to the Executive
hereunder, provided that the Executive may take reasonable amounts
of time to (i) serve on corporate, civil or charitable boards or
committees, and (ii) deliver lectures, fulfill speaking engagements
or teach at educational institutions, if such activities do not
significantly interfere with the performance of the
Executive’s responsibilities hereunder. It is expressly
understood and agreed that to the extent any such activities have
been conducted by the Executive prior to the Effective Date, the
continued conduct of such activities (or the conduct of activities
similar in nature and scope) subsequent to the Effective Date shall
not thereafter be deemed to interfere with the performance of
Executive’s responsibilities hereunder.
4. Compensation . (a)
Base Salary . During the Employment Term, the
Executive shall receive an annual base salary (“Annual Base
Salary”), which shall be paid at a monthly rate, at least
equal to twelve (12) times the highest monthly base salary paid or
payable to the Executive by the Company and its affiliated
companies in respect of the twelve (12) month period immediately
preceding the month in which the Effective Date occurs, including
any amounts which were deferred under any plans of the Company and
its affiliated companies. During the Employment Term, the
Annual Base Salary shall be reviewed at least annually and shall be
increased at any time and from time to time as shall be
substantially consistent with increases in base salary generally
awarded in the ordinary course of business to other peer executives
of the Company and its affiliated companies. Any increase in
Annual Base Salary shall not serve to limit or reduce any other
obligation to the Executive under this Agreement. Annual Base
Salary shall not be reduced after any such increase and the term
Annual Base Salary as utilized in this Agreement shall refer to
Annual Base Salary as so increased. As used in this
Agreement, the term “affiliated companies” shall
include any company controlled by, controlling or under common
control with the Company.
(b) Annual Bonus . In
addition to Annual Base Salary, the Executive shall be awarded, for
each fiscal year ending during the Employment Term, an annual bonus
(the “Annual Bonus”) in cash at least equal to the
average annualized (for any fiscal year consisting of less than
twelve (12) full months or with respect to which the Executive has
been employed by the Company for less than twelve (12) full months)
bonuses paid or payable, including any amounts which were deferred
under any plans of the Company and its affiliated companies, to the
Executive by the Company and its affiliated companies in respect of
the three (3) fiscal years immediately preceding the fiscal year in
which the Effective Date occurs (the “Recent Average
Bonus”). Each such Annual Bonus shall be paid no later
than seventy-five (75) days after the end of the fiscal year for
which the Annual Bonus is awarded, unless the Executive shall elect
to defer the receipt of such Annual Bonus under any plan or
arrangement of the Company allowing therefor.
(c) Incentive, Savings and
Retirement Plans . During the Employment Term, the
Executive shall be entitled to participate in all incentive,
savings and retirement plans, practices, policies and programs
applicable generally to other peer executives of the Company and
its affiliated companies, but in no event shall such plans,
practices, policies and programs provide the Executive with
incentive opportunities (measured with respect to both regular and
special incentive opportunities, to the extent, if any, that such
distinction is applicable), savings opportunities and retirement
benefit opportunities, in each case, less favorable, in the
aggregate, than the most favorable of those provided by the Company
and its affiliated companies for the Executive under such plans,
practices, policies and programs as in effect at any time during
the twelve (12) month period immediately preceding the Effective
Date, or, if more favorable to the Executive, those provided
generally at any time after the Effective Date to other peer
executives of the Company and its affiliated companies.
(d) Benefit Plans .
During the Employment Term, the Executive and/or the
Executive’s family, as the case may be, shall be eligible for
participation in and shall receive all benefits under benefit
plans, practices, policies and programs provided by the Company and
its affiliated companies (including, without limitation, medical,
prescription drug, dental, disability, salary continuance, employee
life, group life, accidental death and travel accident insurance
plans and programs) to the extent applicable generally to other
peer executives of the Company and its affiliated companies and
their families; but in no event shall such plans, practices,
policies and programs provide the Executive with benefits which are
less favorable, in the aggregate, than the most favorable of such
plans, practices, policies and programs in effect for the Executive
and his family at any time during the twelve (12) month period
immediately preceding the Effective Date or, if more favorable to
the Executive, those provided generally at any time after the
Effective Date to other peer executives of the Company and its
affiliated companies and their families.
(e) Expenses . During
the Employment Term, the Executive shall be entitled to receive
prompt reimbursement for all reasonable expenses incurred by the
Executive in accordance with the most favorable policies, practices
and procedures of the Company and its affiliated companies in
effect for the Executive at any time during the twelve (12) month
period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and
its affiliated companies.
(f) Fringe Benefits .
During the Employment Term, the Executive shall be entitled
to fringe benefits (including but not limited to Company cars, club
dues and physical examinations) in accordance with the most
favorable plans, practices, programs and policies of the Company
and its affiliated companies in effect for the Executive at any
time during the twelve (12) month period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer
executives of the Company and its affiliated companies.
(g) Office and Support
Staff . During the Employment Term, the Executive shall
be entitled to an office or offices of a size and with furnishings
and other appointments, and to exclusive personal secretarial and
other assistance, in accordance with the most favorable of the
foregoing provided to the Executive by the company and its
affiliated companies at any time during the twelve (12) month
period immediately preceding the Effective Date or, if more
favorable to the Executive, as provided generally at any time
thereafter with respect to other peer executives of the Company and
its affiliated companies.
(h) Vacation and Sick
Leave . During the Employment Term, the Executive shall
be entitled to paid vacation and sick leave (without loss of pay)
in accordance with the most favorable plans, policies, programs and
practices of the Company and its affiliated companies as in effect
for the Executive at any time during the twelve (12) month period
immediately preceding the Effective Date or, if more favorable to
the Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and its affiliated
companies.
(i) Restrictions . As
of the Effective Date, all restrictions limiting the exercise,
transferability or other incidents of ownership of any outstanding
award, including but not limited to restricted stock, options,
stock appreciation rights, or other property or rights of the
Company granted to the Executive shall lapse, and such awards shall
become fully vested and be held by the Executive free and clear of
all such restrictions. This provision shall apply to all such
property or rights notwithstanding the provisions of any other plan
or agreement, unless the effect of the application of this
provision to a particular right or property would result in the
loss of favorable securities law treatment for participants under
the plan pursuant to which the award was granted.
5. Termination of
Employment . During the Employment Term, the
Executive’s employment hereunder may be terminated under the
following circumstances:
(a) Death or Disability .
The Executive’s employment shall terminate
automatically upon the Executive’s death during the
Employment Term. If the Company determines in good faith that
the Disability of the Executive has occurred during the Employment
Term (pursuant to the definition of Disability set forth below), it
may give to the Executive written notice in accordance with Section
5 of this Agreement of its intention to terminate the
Executive’s employment. In such event, the
Executive’s employment with the Company shall terminate
effective on the thirtieth (30th) day after receipt of such notice
by the Executive (the “Disability Effective Date”),
provided that, within thirty (30) days after such receipt, the
Executive shall not have returned to full-time performance of the
Executive’s duties. For purposes of this Agreement,
“Disability” shall mean the absence of the Executive
from the Executive’s duties with the Company on a full-time
basis for one hundred eighty (180) consecutive business days as a
result of incapacity due to mental or physical illness which is
determined to be total and permanent by a physician selected by the
Company or its insurers and acceptable to the Executive or the
Executive’s legal representative, provided if the parties are
unable to agree, the parties shall request the Dean of the Medical
College of Wisconsin to choose such physician.
(b) Cause . The
Company may terminate the Executive’s employment for
“Cause.” A termination for Cause is a termination
evidenced by a resolution adopted in good faith by a majority of
the Board that the Executive (i) willfully, deliberately and
continually failed to substantially perform his duties under
Section 3, above (other than a failure resulting from the
Executive’s incapacity due to physical or mental illness)
which failure constitutes gross misconduct, and results in and was
intended to result in demonstrable material injury to the Company,
monetary or otherwise, or (ii) committed acts of fraud and
dishonesty constituting a felony, as determined by a final judgment
or order of a court of competent jurisdiction, and resulting or
intended to result in gain to or personal enrichment of the
Executive at the Company’s expense, provided ,
however , that no termination of the Executive’s
employment shall be for Cause as set forth in (i), above, until (a)
Executive shall have had at least sixty (60) days to cure any
conduct or act alleged to provide Cause for termination after a
written notice of demand has been delivered to the Executive
specifying in detail the manner in which the Executive’s
conduct violates this Agreement, and (b) the Executive shall have
been provided an opportunity to be heard by the Board (with the
assistance of the Executive’s counsel if the Executive so
desires). No act, or failure to act, on the Executive’s
part, shall be considered &ldq
