<PAGE>
================================================================================
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1995
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 0-5965
NORTHERN TRUST CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 36-2723087
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
50 SOUTH LA SALLE STREET
CHICAGO, ILLINOIS 60675
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 630-6000
----------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [_]
55,466,443 Shares -- $1.66 2/3 Par Value
(Shares of Common Stock Outstanding on September 30, 1995)
================================================================================
1
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CONSOLIDATED BALANCE SHEET Northern Trust Corporation
<TABLE>
<CAPTION>
SEPTEMBER 30 December 31 September 30
------------ ----------- ------------
($ In Millions) 1995 1994 1994
- ------------------------------------- ------------ ----------- ------------
<S> <C> <C> <C>
ASSETS
Cash and Due from Banks $ 1,444.7 $ 1,192.5 $ 1,309.9
Money Market Assets
Federal Funds Sold and Securities
Purchased under Agreements to Resell 247.2 777.0 193.1
Time Deposits with Banks 1,616.4 1,864.7 2,121.0
Other 11.9 9.5 111.5
- ------------------------------------- --------- --------- ---------
Total 1,875.5 2,651.2 2,425.6
- ------------------------------------- --------- --------- ---------
Securities (Fair value $5,885.3 at
September 1995, $5,069.7 at December
1994 and $5,517.6 at September 1994) 5,855.4 5,053.1 5,491.4
Loans and Leases (Net of unearned
income of $81.0 at September 1995,
$70.4 at December 1994 and $68.3 at
September 1994) 9,808.3 8,590.6 8,452.6
Reserve for Credit Losses (147.3) (144.8) (144.9)
Buildings and Equipment 280.0 274.7 271.8
Customers' Acceptance Liability 50.0 56.3 64.9
Trust Security Settlement Receivables 234.5 305.7 210.9
Other Assets 778.6 582.3 587.5
- ------------------------------------- --------- --------- ---------
Total Assets $20,179.7 $18,561.6 $18,669.7
- ------------------------------------- --------- --------- ---------
LIABILITIES
Deposits
Demand and Other Noninterest-Bearing $ 2,642.2 $ 2,604.7 $ 2,344.1
Savings and Money Market Deposits 3,102.1 3,176.3 3,142.8
Savings Certificates 2,106.1 1,524.5 1,279.7
Other Time 375.5 342.2 289.1
Foreign Offices--Demand 310.2 225.4 509.4
--Time 2,820.9 3,861.3 3,706.0
- ------------------------------------- --------- --------- ---------
Total Deposits 11,357.0 11,734.4 11,271.1
Federal Funds Purchased 2,199.7 972.0 1,102.3
Securities Sold under Agreements to
Repurchase 1,277.2 2,216.9 994.6
Commercial Paper 145.6 123.8 172.3
Other Borrowings 2,805.6 1,077.9 2,421.7
Senior Medium-Term Notes 117.0 547.0 807.0
Notes Payable 341.1 244.8 248.3
Liability on Acceptances 50.0 56.3 64.9
Other Liabilities 475.9 307.8 326.6
- ------------------------------------- --------- --------- ---------
Total Liabilities 18,769.1 17,280.9 17,408.8
- ------------------------------------- --------- --------- ---------
STOCKHOLDERS' EQUITY
Preferred Stock 170.0 170.0 170.0
Common Stock -- $1.66 2/3 Par Value 93.6 90.6 90.6
</TABLE>
<TABLE>
<CAPTION>
SEPTEMBER 1995 December 1994 September 1994
<S> <C> <C> <C>
-----------------------------------------------------------
Shares authorized 140,000,000 140,000,000 140,000,000
Shares issued 56,158,064 54,360,374 54,360,374
Shares outstanding 55,466,443 54,089,259 54,162,085
</TABLE>
<TABLE>
<S> <C> <C> <C>
Capital Surplus 308.2 302.2 302.2
Retained Earnings 888.4 762.7 738.8
Net Unrealized Loss on Securities (2.7) (15.8) (12.9)
Translation Adjustments -- -- --
Common Stock Issuable -- Performance
Plan 16.5 17.9 20.2
Deferred Compensation -- ESOP and
Other (34.6) (38.8) (43.2)
Treasury Stock -- at cost, 691,621
shares at September 1995, 271,115
shares at December 1994 and 198,289
shares at September 1994 (28.8) (8.1) (4.8)
- ------------------------------------- --------- --------- ---------
Total Stockholders' Equity 1,410.6 1,280.7 1,260.9
- ------------------------------------- --------- --------- ---------
Total Liabilities and Stockholders'
Equity $20,179.7 $18,561.6 $18,669.7
- ------------------------------------- --------- --------- ---------
</TABLE>
<PAGE>
CONSOLIDATED STATEMENT OF INCOME Northern Trust Corporation
<TABLE>
<CAPTION>
THIRD QUARTER
ENDED SEPTEMBER 30 NINE MONTHS
($ In Millions Except Per Share --------------------- ---------------------
Information) 1995 1994 1995 1994
- --------------------------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Interest Income
Money Market Assets
Federal Funds Sold and
Securities Purchased under
Agreements to Resell $ 1.9 $ 2.0 $ 9.3 $ 6.0
Time Deposits with Banks 22.4 26.1 69.9 74.7
Other .2 1.7 .7 4.4
- --------------------------------- ---------- ---------- ---------- ----------
Total 24.5 29.8 79.9 85.1
- --------------------------------- ---------- ---------- ---------- ----------
Securities 99.0 62.1 273.2 161.1
Loans and Leases 162.3 129.6 465.0 359.5
- --------------------------------- ---------- ---------- ---------- ----------
Total Interest Income 285.8 221.5 818.1 605.7
- --------------------------------- ---------- ---------- ---------- ----------
Interest Expense
Deposits -- Savings and Money
Market Deposits 27.5 22.1 81.5 61.8
-- Savings Certificates 32.6 14.4 87.7 38.2
-- Other Time 8.6 5.5 23.0 12.9
-- Foreign Offices 43.4 38.2 141.2 92.4
Federal Funds Purchased 29.9 13.3 62.1 40.1
Securities Sold under Agreements
to Repurchase 26.6 19.8 75.7 39.5
Commercial Paper 2.1 1.7 6.4 4.0
Other Borrowings 17.8 6.6 44.2 27.5
Senior Medium-Term Notes 2.8 9.5 15.5 23.5
Notes Payable 5.1 5.4 14.9 18.0
- --------------------------------- ---------- ---------- ---------- ----------
Total Interest Expense 196.4 136.5 552.2 357.9
- --------------------------------- ---------- ---------- ---------- ----------
Net Interest Income 89.4 85.0 265.9 247.8
Provision for Credit Losses 2.0 1.0 5.0 5.0
- --------------------------------- ---------- ---------- ---------- ----------
Net Interest Income after
Provision for Credit Losses 87.4 84.0 260.9 242.8
- --------------------------------- ---------- ---------- ---------- ----------
Noninterest Income
Trust Fees 127.3 115.8 371.4 338.8
Security Commissions and Trading
Income 5.8 4.4 16.9 17.2
Other Operating Income 40.0 32.6 114.7 125.1
Investment Security Gains (Losses) .3 (.2) .5 (.1)
- --------------------------------- ---------- ---------- ---------- ----------
Total Noninterest Income 173.4 152.6 503.5 481.0
- --------------------------------- ---------- ---------- ---------- ----------
Income before Noninterest
Expenses 260.8 236.6 764.4 723.8
- --------------------------------- ---------- ---------- ---------- ----------
Noninterest Expenses
Salaries 84.0 80.6 250.9 235.6
Pension and Other Employee
Benefits 20.4 18.1 62.7 56.2
Occupancy Expense 15.6 14.4 45.1 42.7
Equipment Expense 12.0 10.8 36.6 44.8
Other Operating Expenses 43.5 42.3 135.4 136.3
- --------------------------------- ---------- ---------- ---------- ----------
Total Noninterest Expenses 175.5 166.2 530.7 515.6
- --------------------------------- ---------- ---------- ---------- ----------
Income before Income Taxes 85.3 70.4 233.7 208.2
Provision for Income Taxes 27.2 22.4 73.2 66.1
- --------------------------------- ---------- ---------- ---------- ----------
NET INCOME $ 58.1 $ 48.0 $160.5 $142.1
- --------------------------------- ---------- ---------- ---------- ----------
Net Income Applicable to Common
Stock $ 56.0 $ 46.2 $154.1 $136.9
- --------------------------------- ---------- ---------- ---------- ----------
NET INCOME PER COMMON SHARE
-- Primary $ .99 $ .83 $ 2.74 $ 2.48
-- Fully Diluted .98 .83 2.71 2.47
- --------------------------------- ---------- ---------- ---------- ----------
Average Number of Common Shares
Outstanding -- Primary 56,686,283 55,334,790 56,249,528 55,095,368
-- Fully Diluted 58,118,792 56,539,610 57,771,187 56,304,643
- --------------------------------- ---------- ---------- ---------- ----------
</TABLE>
3
<PAGE>
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Northern Trust Corporation
<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER 30
------------------
(In Millions) 1995 1994
- ------------------------------------------ -------- --------
<S> <C> <C>
PREFERRED STOCK
Balance at January 1 and September 30 $ 170.0 $ 170.0
- ------------------------------------------ -------- --------
COMMON STOCK
Balance at January 1 90.6 89.7
Stock Issued--Incentive Plan and Awards .3 --
Pooled Affiliate--Stock Issued 2.7 .9
- ------------------------------------------ -------- --------
Balance at September 30 93.6 90.6
- ------------------------------------------ -------- --------
CAPITAL SURPLUS
Balance at January 1 302.2 303.0
Stock Issued--Incentive Plan and Awards (.9) (.4)
Pooled Affiliate--Stock Issued 6.9 (.4)
- ------------------------------------------ -------- --------
Balance at September 30 308.2 302.2
- ------------------------------------------ -------- --------
RETAINED EARNINGS
Balance at January 1 762.7 631.9
Net Income 160.5 142.1
Dividends Declared on Common Stock (43.2) (35.6)
Dividends Declared on Preferred Stock (6.7) (5.0)
Pooled Affiliate 15.1 5.4
- ------------------------------------------ -------- --------
Balance at September 30 888.4 738.8
- ------------------------------------------ -------- --------
NET UNREALIZED LOSS ON SECURITIES
Balance at January 1 (15.8) (.4)
Unrealized Gain (Loss), net 13.1 (12.5)
- ------------------------------------------ -------- --------
Balance at September 30 (2.7) (12.9)
- ------------------------------------------ -------- --------
TRANSLATION ADJUSTMENTS
Balance at January 1 -- .6
Sale of Foreign Investment -- (.6)
- ------------------------------------------ -------- --------
Balance at September 30 -- --
- ------------------------------------------ -------- --------
COMMON STOCK ISSUABLE--PERFORMANCE PLAN
Balance at January 1 17.9 11.8
Stock Issuable, net of Stock Issued (1.4) 8.4
- ------------------------------------------ -------- --------
Balance at September 30 16.5 20.2
- ------------------------------------------ -------- --------
DEFERRED COMPENSATION--ESOP AND OTHER
Balance at January 1 (38.8) (43.5)
Compensation Deferred (1.4) (5.3)
Compensation Amortized 5.6 5.6
- ------------------------------------------ -------- --------
Balance at September 30 (34.6) (43.2)
- ------------------------------------------ -------- --------
TREASURY STOCK
Balance at January 1 (8.1) (11.4)
Stock Options and Awards 15.4 9.0
Stock Purchased (36.1) (2.4)
- ------------------------------------------ -------- --------
Balance at September 30 (28.8) (4.8)
- ------------------------------------------ -------- --------
TOTAL STOCKHOLDERS' EQUITY AT SEPTEMBER 30 $1,410.6 $1,260.9
- ------------------------------------------ -------- --------
</TABLE>
4
<PAGE>
<TABLE>
CONSOLIDATED STATEMENT OF CASH FLOWS Northern Trust Corporation
Nine Months
Ended September 30,
-----------------------
(In Millions) 1995 1994
- ----------------------------------------------------------------------- ---------- ---------
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income $ 160.5 $ 142.1
Adjustments to Reconcile Net Income to Net Cash Provided by
Operating Activities:
Provision for Credit Losses 5.0 5.0
Depreciation on Buildings and Equipment 32.2 31.8
(Increase) Decrease in Interest Receivable (29.7) 14.8
Increase in Interest Payable 8.8 5.8
Amortization and Accretion of Securities and Unearned Income (132.6) 8.4
Gain on Sale of Foreign Investment (34.5)
Net Increase in Trading Account Securities (53.2) (23.7)
Other Noncash, net 4.3 89.2
- ----------------------------------------------------------------------- ---------- ---------
Net Cash Flows from Operating Activities (4.7) 238.9
- ----------------------------------------------------------------------- ---------- ---------
Cash Flows from Investing Activities:
Net Decrease in Federal Funds Sold and Securities Purchased
under Agreements to Resell 542.9 384.7
Net (Increase) Decrease in Time Deposits with Banks 248.3 (30.6)
Net Increase in Other Money Market Assets (2.4) (35.5)
Purchases of Securities-Held to Maturity (625.4) (344.3)
Proceeds from Maturity and Redemption of Securities-Held to Maturity 703.6 374.5
Purchases of Securities-Available for Sale (23,494.1) (6,798.7)
Proceeds from Sale, Maturity and Redemption of Securities-Available
for Sale 22,900.5 5,309.5
Net Increase in Loans and Leases (1,131.3) (837.2)
Purchases of Buildings and Equipment (33.1) (21.4)
Sale of Foreign Investment - 58.1
Net Decrease in Trust Security Settlement Receivables 71.2 82.2
Other, net 2.9 10.5
- ----------------------------------------------------------------------- ---------- ---------
Net Cash Flows from Investing Activities (816.9) (1,848.2)
- ----------------------------------------------------------------------- ---------- ---------
Cash Flows from Financing Activities:
Net Increase (Decrease) in Deposits (556.8) 937.7
Net Increase (Decrease) in Federal Funds Purchased 1,227.7 (113.5)
Net Increase (Decrease) in Securities Sold under Agreement to
Repurchase (939.7) 392.4
Net Increase in Commercial Paper 21.8 48.2
Net Increase in Short-Term Other Borrowings 2,019.9 261.4
Proceeds from Term Federal Funds Purchased 2,383.0 3,113.6
Repayments of Term Federal Funds Purchased (2,675.3) (3,113.8)
Proceeds from Senior Medium-Term Notes - 330.0
Repayments of Senior Medium-Term Notes (430.0) (340.0)
Proceeds from Notes Payable 100.0 -
Repayment of Notes Payable (3.7) (78.5)
Treasury Stock Purchased-Incentive Plans (2.2) (0.7)
Treasury Stock Purchased-Buy Back Program (29.8) -
Net Proceeds from Stock Options 5.1 3.6
Cash Dividends Paid on Common and Preferred Stock (49.5) (40.2)
Other, net 3.3 (0.7)
- ----------------------------------------------------------------------- ---------- ---------
Net Cash Flows from Financing Activities 1,073.8 1,399.5
- ----------------------------------------------------------------------- ---------- ---------
Increase (Decrease) in Cash and Due from Banks 252.2 (209.8)
Cash and Due from Banks at Beginning of Year 1,192.5 1,519.7
- ----------------------------------------------------------------------- ---------- ---------
Cash and Due from Banks at September 30 $ 1,444.7 $ 1,309.9
- ----------------------------------------------------------------------- ---------- ---------
Schedule of Noncash Investing and Financing Activities:
Acquisition of Affiliate for Stock $ 24.7 $ 6.4
Supplemental Disclosures of Cash Flow Information:
Interest Paid on Deposits and Short- and Long-Term Borrowings $ 543.4 $ 352.1
Income Taxes Paid 42.6 30.3
- ----------------------------------------------------------------------- ---------- ---------
</TABLE>
5
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION - The consolidated financial statements include the
accounts of Northern Trust Corporation and its subsidiaries (Northern Trust),
all of which are wholly owned. Significant intercompany balances and
transactions have been eliminated. The consolidated financial statements as of
September 30, 1995 and 1994 have not been audited by independent public
accountants. In the opinion of management, all adjustments necessary for a fair
presentation of the financial position and the results of operations for the
interim periods have been made. All such adjustments are of a normal recurring
nature. Certain reclassifications have been made to prior periods' consolidated
financial statements to place them on a basis comparable with the current
period's consolidated financial statements. For a description of Northern
Trust's significant accounting principles, refer to the Notes to Consolidated
Financial Statements in the 1994 Annual Report to Stockholders.
2. SECURITIES - The following table summarizes the book and fair values of
securities.
<TABLE>
<CAPTION>
September 30, 1995 December 31, 1994 September 30, 1994
-------------------- --------------------- --------------------
Book Fair Book Fair Book Fair
(In Millions) Value Value Value Value Value Value
- --------------------------- --------- --------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Held to Maturity
U.S. Government $ 102.0 $ 102.0 $ 137.2 $ 137.0 $ 105.5 $ 105.4
Obligations of States
and Political Subdivisions 435.7 465.7 474.5 491.3 455.1 481.4
Federal Agency 22.2 22.1 - - - -
Other 30.3 30.3 29.6 29.6 29.9 29.9
- --------------------------- -------- -------- -------- -------- -------- --------
Subtotal 590.2 620.1 641.3 657.9 590.5 616.7
- --------------------------- -------- -------- -------- -------- -------- --------
Available for Sale
U.S. Government 1,512.0 1,512.0 801.3 801.3 861.3 861.3
Federal Agency 3,414.2 3,414.2 3,251.5 3,251.5 3,611.8 3,611.8
Preferred Stock 164.8 164.8 196.6 196.6 200.6 200.6
Other 117.0 117.0 158.4 158.4 167.2 167.2
- --------------------------- -------- ------- ------- ------- -------- --------
Subtotal 5,208.0 5,208.0 4,407.8 4,407.8 4,840.9 4,840.9
- --------------------------- -------- -------- -------- -------- -------- --------
Trading Account 57.2 57.2 4.0 4.0 60.0 60.0
- --------------------------- -------- -------- -------- -------- -------- --------
Total Securities $5,855.4 $5,885.3 $5,053.1 $5,069.7 $5,491.4 $5,517.6
- --------------------------- -------- -------- -------- -------- -------- --------
</TABLE>
<TABLE>
<CAPTION>
Reconciliation of Book
Values to Fair Values of
Securities Held to Maturity September 30, 1995
- --------------------------- ----------------------------------------
Book Gross Unrealized Fair
(In Millions) Value Gains Losses Value
- --------------------------- ------ ----- ---------- ------
<S> <C> <C> <C> <C>
Held to Maturity
U.S. Government $102.0 $ .1 $.1 $102.0
Obligations of States
and Political Subdivisions 435.7 30.1 .1 465.7
Federal Agency 22.2 - .1 22.1
Other 30.3 - - 30.3
- --------------------------- ------ ----- -- ------
Total $590.2 $30.2 $.3 $620.1
- --------------------------- ------ ----- --- ------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Reconciliation of
Amortized Cost to Fair
Values of
Securities Available for
Sale September 30, 1995
- --------------------------- -------------------------------------------
Gross Unrealized
Amortized ------------------- Fair
(In Millions) Cost Gains Losses Value
- --------------------------- --------- -------- --------- --------
<S> <C> <C> <C> <C>
Available for Sale
U.S. Government $1,514.8 $1.1 $3.9 $1,512.0
Federal Agency 3,410.4 5.0 1.2 3,414.2
Preferred Stock 164.9 .2 .3 164.8
Other 119.1 .5 2.6 117.0
- --------------------------- -------- -------- -------- --------
Total $5,209.2 $6.8 $8.0 $5,208.0
- --------------------------- -------- -------- -------- --------
</TABLE>
Unrealized gains and losses on off-balance sheet financial instruments used to
hedge available for sale securities totaled $.8 million and $3.8 million,
respectively, as of September 30, 1995. Unrealized gains on these hedges are
reported as other assets in the consolidated balance sheet; unrealized losses
are reported as other liabilities. As of September 30, 1995, stockholders'
equity included a charge of $2.7 million, net of tax, to recognize the
depreciation on securities available for sale and the related hedges.
3. PLEDGED ASSETS - Securities and loans pledged to secure public and trust
deposits, repurchase agreements and for other purposes as required or permitted
by law were $5.2 billion on September 30, 1995, $3.7 billion on December 31,
1994 and $4.8 billion on September 30, 1994.
4. CONTINGENT LIABILITIES - Standby letters of credit outstanding were $911.0
million on September 30, 1995, $819.9 million on December 31, 1994 and $833.4
million on September 30, 1994.
5. LOANS AND LEASES - Amounts outstanding in selected loan categories are
shown below.
<TABLE>
<CAPTION>
September 30 December 31 September 30
------------ ----------- ------------
(In Millions) 1995 1994 1994
- --------------------------- ------------ ----------- ------------
<S> <C> <C> <C>
Domestic
Commercial $3,207.6 $2,672.0 $2,672.7
Residential Real Estate 3,750.6 3,299.1 3,244.9
Commercial Real Estate 505.4 494.1 472.7
Broker 225.0 274.6 356.8
Consumer 772.0 662.1 622.5
Other 706.4 642.1 452.2
Lease Financing 181.5 159.9 148.1
- --------------------------- -------- -------- --------
Total Domestic 9,348.5 8,203.9 7,969.9
International 459.8 386.7 482.7
- --------------------------- -------- -------- --------
Total Loans and Leases $9,808.3 $8,590.6 $8,452.6
- --------------------------- -------- -------- --------
</TABLE>
7
<PAGE>
At September 30, 1995, other domestic and international loans include $946.9
million of overnight trust-related advances in connection with next day security
settlements, compared with $716.6 million at December 31, 1994 and $609.9
million at September 30, 1994.
Northern Trust adopted Statements of Financial Accounting Standards Nos. 114 and
118, "Accounting by Creditors for Impairment of a Loan", effective January 1,
1995. These statements provide guidance as to when loans should be classified
and reported as impaired and address how the reserve for credit losses related
to these loans should be determined. Any shortfall in the estimated value of an
impaired loan compared with the recorded investment of the loan, is identified
as an allocated portion of the reserve for credit losses and is one of the
factors considered by management in their overall assessment of reserve
adequacy. No changes were required to Northern Trust's accounting policies for
loans, charge-offs and interest income as a result of adopting these statements.
These policies are described in Notes to Consolidated Financial Statements
(Footnotes 1E and 1F) in the 1994 Annual Report.
At September 30, 1995, nonperforming assets totaled $35.4 million. Included in
this amount were loans with a recorded investment of $27.7 million which were
also classified as impaired. Impaired loans totaling $24.5 million had no
portion of the reserve for credit losses allocated to them, while $3.2 million
had an allocated reserve of $.4 million. For the third quarter of 1995, the
total recorded investment in impaired loans averaged $29.0 million. Total
interest income recognized on impaired loans for the quarter ended September 30,
1995 was $149 thousand, most of which was recognized using the cash-basis method
of accounting.
6. RESERVE FOR CREDIT LOSSES - Changes in the reserve for credit losses were as
follows.
<TABLE>
<CAPTION>
Nine Months
Ended September 30
-------------------
(In Millions) 1995 1994
- ------------- ------ -------
<S> <C> <C>
Balance at Beginning of Period $144.8 $145.5
Charge-Offs (7.8) (8.8)
Recoveries 3.0 3.2
------ ------
Net Charge-Offs (4.8) (5.6)
Provision for Credit Losses 5.0 5.0
Reserve Related to Acquisitions 2.3 -
------ ------
Balance at End of Period $147.3 $144.9
------ ------
</TABLE>
7. ACQUISITIONS - The acquisition of Tanglewood Bancshares, Inc., parent company
of Tanglewood Bank N.A. Houston was completed on July 31, 1995 for $32.5
million in cash.
8
<PAGE>
On October 31, 1995 Northern Trust completed the acquisition of RCB
International, Inc. (RCB), an international provider of institutional investment
management services. RCB shareholders received at closing $11.0 million in cash,
$.6 million in notes and 392.4 thousand shares of Northern Trust Corporation
common stock. The transaction was recorded under the purchase method of
accounting. In addition, 216.1 thousand shares of Northern Trust Corporation
common stock and $2.6 million in cash were allocated for various deferred
compensation plans and other deferred payment arrangements. Shares and cash
available under these deferred payment arrangements are payable over one to
seven years and are contingent upon continued employment, non-competition
agreements and, in some cases, meeting predetermined performance goals.
8. NOTES PAYABLE - Under the terms of a September 6, 1995 Offering Circular, The
Northern Trust Company has the ability to offer from time to time up to $1.7
billion aggregate principal amount at any time outstanding of its senior bank
notes (less certain medium-term bank notes issued prior to April 1993 and still
outstanding), with maturities ranging from 30 days to 15 years and may offer up
to $300 million aggregate principal amount of its subordinated bank notes with
maturities ranging from 5 years to 15 years. On September 19, 1995, The Northern
Trust Company issued $100 million of 6.7% Subordinated Notes due 2005.
9
<PAGE>
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
THIRD QUARTER EARNINGS HIGHLIGHTS
Net income for the third quarter totaled a record $58.1 million, an increase of
21% from the $48.0 million reported in the third quarter of 1994. Net income
per common share on a fully diluted basis increased 18% to $.98 from $.83 in
1994. This earnings performance produced an annualized return on average common
equity (ROE) of 18.11% versus 17.02% reported last year and an annualized return
on average assets (ROA) of 1.14% versus 1.05% in 1994. Record levels of trust
fees, foreign exchange trading profits, and net interest income contributed to
the quarter's performance. Total noninterest expenses increased 5.5% from the
previous year while declining from the first and second quarters of 1995.
NONINTEREST INCOME
Noninterest income increased 14% and totaled $173.4 million for the quarter,
accounting for 64% of total taxable equivalent revenue. Trust fees, which
represent 73% of noninterest income and 47% of total taxable equivalent revenue,
grew 10% or $11.5 million over the comparable quarter of last year reaching
$127.3 million. The increase reflects an 8% growth level in Corporate and
Institutional Services (C&IS) and a 12% increase in Personal Financial Services
(PFS). Total trust assets under administration at quarter-end were $585.4
billion, up $90.6 billion from one year ago.
Trust fees from C&IS increased $4.9 million to $64.8 million. The increase in
fees reflects new business and strong growth across all products, particularly
custody, retirement services, securities lending and investment management.
Custody fees increased $1.6 million and totaled $30.6 million for the quarter.
The growth was centered primarily in domestic custody driven by an increase in
transaction-based fee revenues and new business from both new and existing
clients. Fees from retirement services generated by Hazlehurst & Associates,
Inc. increased 18% from the year ago quarter. Domestic securities lending
fees, up 28% versus last year, reflect a 26% increase in the volume of
securities loaned as well as higher spreads earned from the investment of the
cash collateral. Investment management fees increased 26%, primarily as a
result of new business. C&IS trust assets under administration grew 18% or
$80.4 billion over last year and now total $525.0 billion. C&IS assets under
the management of Northern Trust total $60.6 billion, up 29% from a year ago.
PFS trust fees amounted to $62.5 million, up 12% or $6.6 million from the
corresponding 1994 quarter. Total personal trust assets under administration
increased $10.2 billion over last year and totaled $60.4 billion, with $36.6
billion under management. The primary contributors to this fee growth were the
Wealth Management Group and PFS offices in Chicago, Florida and California.
PFS fees benefited from new business growth and higher market values of assets
under administration. The increase in trust fees also reflects the contribution
of Beach Bank, a March 31, 1995 acquisition.
10
<PAGE>
Security commissions and trading income totaled $5.8 million, compared with $4.4
million reported in the third quarter of last year. The increase resulted
primarily from a higher volume of trading activity by individual clients.
Other operating income in the quarter totaled $40.0 million, compared to $32.6
million in the third quarter of 1994. The principal items included in other
operating income are foreign exchange trading profits and treasury management
fees. Foreign exchange trading profits were at record levels and totaled $16.2
million, an increase of $6.6 million. Foreign exchange revenues, which are
generated in both Chicago and London, have benefited from an increase in cross-
border investment activities of Master Trust/Master Custody clients and
favorable market conditions. The fee portion of treasury management revenues
rose 9% to $12.5 million. Total treasury management revenues, which, in
addition to fees, include the value of compensating deposit balances, increased
during the quarter and reflect growth across each treasury management product,
particularly electronic services. These revenues increased despite the fact
that $.8 million was credited to treasury management clients as a result of a
retroactive reduction in FDIC deposit insurance premiums.
NET INTEREST INCOME
Net interest income for the third quarter totaled $89.4 million, 5% higher than
the $85.0 million reported in the third quarter of 1994. Net interest income is
defined as the total of interest income and amortized fees on earning assets
less interest expense on deposits and borrowed funds adjusted for the impact of
off-balance sheet hedging activity. When net interest income is adjusted to a
fully taxable equivalent (FTE) basis, yields on taxable, nontaxable and
partially taxable assets are comparable, although the adjustment to a FTE basis
has no impact on net income. Net interest income on a FTE basis for the third
quarter was $98.9 million, up 6% from the $93.2 million reported in 1994. This
increase is due to higher levels of average earning assets, reflecting in part
the Beach Bank acquisition and the acquisition of Tanglewood Bank on July 31.
Earning assets for the third quarter averaged $17.8 billion, up 11% from the
$16.0 billion in the third quarter of 1994. The $1.8 billion growth in earning
assets reflects an 11% or $922 million increase in average loans, a $1.6 billion
or 30% growth in average securities and a $685 million or 28% decrease in
average money market assets.
Overall loan volume reflected a $1.0 billion or 13% increase in domestic
lending, which was partially offset by a decline in international lending.
Approximately 46% of the increase in domestic lending is attributable to
residential mortgage loans now accounting for 39% of the total average loan
portfolio. Commercial and industrial loans grew 13% or $372 million to average
$3.1 billion for the quarter. In addition, domestic and international overnight
advances related to processing certain trust client investments averaged $697
million, up $118 million from a year ago. Securities for the quarter averaged
$6.7 billion, up 30% from the $5.1 billion reported last year, due primarily to
a $1.4 billion increase in short-term federal agency securities. The decline in
money market assets of $685 million was due to short-term interest rates
providing fewer opportunities to add marginal net interest income.
11
<PAGE>
The growth in average earning assets was funded primarily by increased levels of
interest-bearing time deposits, federal funds purchased and other borrowings,
and noninterest-related funds. Interest-bearing deposits averaged $9.4 billion,
up $705 million from the third quarter of 1994. This growth came principally
from savings certificates (up $893 million), partially offset by a $239 million
decline in foreign office time deposits. The 72% increase in the average volume
of savings certificates is due in large part to successful certificate of
deposit campaigns conducted periodically during last year's fourth quarter and
the first quarter of 1995. Average noninterest-related funds increased $163
million, due primarily to growth in stockholders' equity. Total average
stockholders' equity increased $150 million or 12% from the third quarter of
1994. The increase primarily reflects the growth in retained earnings.
The net interest margin decreased to 2.21% compared with 2.31% last year due
primarily to narrowing spreads between short-term assets and various short-term
funding sources. Also contributing to the decline in the net interest margin
was the increase in the level of nonearning trust-related overnight advances.
PROVISION FOR CREDIT LOSSES
The provision for credit losses of $2.0 million compares to $1.0 million in the
third quarter of 1994. For a discussion of the reserve for credit losses, refer
to the Asset Quality section on pages 14 and 15.
NONINTEREST EXPENSES
Noninterest expenses totaled $175.5 million for the quarter, up 5.5% from $166.2
million in the third quarter of 1994 and less than the Corporation's noninterest
expenses for each of the first two quarters of 1995. The third quarter expenses
included a $3.9 million pension settlement charge for retiring officers, $1.2
million in staff-related severance costs and approximately $2.3 million of
expenses from the Beach Bank and Tanglewood Bank acquisitions. These expenses
were largely offset by a $4.6 million refund in FDIC deposit insurance premiums
paid for the June through September 1995 period. The majority of the remaining
increase in noninterest expenses was concentrated primarily in technology
spending and personal trust business expansion.
Salaries and benefits, which represent 60% of total noninterest expenses,
increased 6% to $104.4 million. The principal items contributing to the change
were merit increases, incentive compensation, severance costs, and additions to
staff at Hazlehurst & Associates to support Northern's growing retirement
services business and from the Beach Bank and Tanglewood Bank acquisitions.
Higher costs related to retirement benefits, health care and payroll taxes also
contributed to the overall increase. Staff on a full-time equivalent basis
totaled 6,465 at September 30, 1995. Adjusting for the positions added by the
Beach Bank and Tanglewood Bank acquisitions, staff levels declined by 285
positions since the end of 1994.
12
<PAGE>
Net occupancy expenses totaled $15.6 million, up 9% or $1.2 million from $14.4
million in the third quarter of 1994. The principal components of the increase
were higher real estate taxes and utility costs, amortization and depreciation
of leasehold improvements and buildings, as well as expansion costs related to
the opening of new offices in Florida, Illinois and Texas.
Equipment expense, which includes depreciation, rental, and maintenance costs,
totaled $12.0 million, up $1.2 million or 11% from the third quarter of 1994.
The principal components of the increase were higher rental costs for computers
and equipment and increased depreciation expense primarily related to personal
computers.
Other operating expenses totaled $43.5 million, up 2% from $42.3 million in the
third quarter of 1994. Reflected in other operating expenses is the $3.9
million pension settlement charge, as well as a credit for the $4.6 million
refund of FDIC deposit insurance premiums. Increases in computer software
amortization, up $2.4 million to $8.7 million, along with higher costs incurred
from processing errors, were partially offset by lower levels of professional
service costs, transaction-based depository fees and other real estate owned
operating costs.
PROVISION FOR INCOME TAXES
The provision for income taxes was $27.2 million for the third quarter compared
with $22.4 million in the year ago quarter. The higher tax provision in 1995
resulted from the growth in taxable earnings for federal income tax purposes
while tax-exempt income declined slightly. Partially offsetting this was a
lower state income tax provision due to increased levels of tax-exempt income
for state purposes. The effective tax rate was 32% for both years.
NINE MONTHS EARNINGS HIGHLIGHTS
Net income totaled $160.5 million for the nine months ended September 30, 1995
compared to $142.1 million last year, an increase of 13%. On a fully diluted
basis, net income per common share was $2.71, up 9% from the $2.47 earned last
year. The ROE for the nine month period was 17.37% versus 17.64% one year ago,
while the ROA was 1.12% versus 1.07% in 1994.
Noninterest income increased 5% to $503.5 million from $481.0 million in the
like period of 1994. Excluding the $28.5 million gain recorded from the 1994
sale of the Corporation's interest in Banque Scandinave en Suisse (BSS), the
year-to-year increase was $51.0 million or 11%. Noninterest income comprised
63% of total taxable equivalent revenue. Trust fees totaled $371.4 million, up
10% from $338.8 million last year. Security commissions and trading income
totaled $16.9 million, down $.3 million from the $17.2 million earned last year.
Other operating income, exclusive of the BSS gain from the prior year, increased
19% to $114.7 million. Foreign exchange trading profits were at record levels
and totaled $43.0 million, an increase of $17.2 million compared with one year
ago. The fee portion of treasury management revenues totaled $36.9 million, a
5% improvement from the $35.1 million reported in 1994. Total treasury
management revenues, which, in addition to fees, include the value of
compensating deposit balances, also increased and contributed to the improvement
in net interest income.
13
<PAGE>
Net interest income stated on a fully taxable equivalent basis totaled a record
$294.5 million, up 8% from the $272.1 million reported in the like period of
1994. The provision for credit losses remained unchanged at $5.0 million. Net
loan charge-offs declined to $4.8 million from $5.6 million in 1994.
Noninterest expenses totaled $530.7 million, up 3% from $515.6 million in
1994. Exclusive of nonrecurring charges in 1994, total noninterest expenses
increased 7% from prior year levels.
BALANCE SHEET
Total assets as of September 30, 1995 were $20.2 billion and averaged $19.1
billion for the first nine months, up 8% from last year's average of $17.7
billion. With increased lending activity, in addition to the Beach Bank and
Tanglewood Bank acquisitions, loans and leases totaled $9.8 billion at
September 30, 1995, and averaged $9.0 billion for the first nine months. This
compares with $8.5 billion in total loans at September 30, 1994 and $8.2 billion
on average for the first nine months of last year. Driven primarily by
continued strong earnings growth and the acquisition of Beach Bank, common
stockholders' equity increased 14% and totaled $1.24 billion at September 30,
1995, versus $1.09 billion at September 30, 1994. Total stockholders' equity
also increased and totaled $1.41 billion at September 30, 1995 compared with
$1.26 billion at September 30, 1994.
During the quarter, the Corporation purchased approximately 630,000 common
shares in connection with its stock buyback program. The Northern Trust Company
successfully completed a $100 million subordinated bank note offering, adding
Tier 2 capital at favorable rates. Northern Trust's risk-based capital ratios
remained strong at 8.9% for tier 1 and 12.7% for total capital at September 30,
1995. These capital ratios are well above the minimum regulatory requirements
of 4% for tier 1 and 8% for total risk-based capital ratios. The leverage ratio
(tier 1 capital to third quarter average assets) of 6.2% at September 30, 1995,
also exceeded the regulatory requirement of 3%.
Refer to footnote 7 in Notes to Consolidated Financial Statements for a
description of acquisitions.
ASSET QUALITY
Nonperforming assets consist of nonaccrual loans and leases, restructured loans,
and other real estate owned (OREO). Nonperforming assets at September 30, 1995
totaled $35.4 million, compared with $30.0 million at December 31, 1994 and
$39.2 million at September 30, 1994. Domestic nonaccrual loans and leases,
consisting primarily of commercial loans, totaled $30.4 million, or .33% of
total domestic loans and leases at September 30, 1995. Included in this total
are commercial real estate loans of $5.0 million.
The following Nonperforming Asset table presents the outstanding amounts of
nonaccrual loans and leases, restructured loans and OREO. Also shown are loans
that have interest or principal payments that are delinquent 90 days or more and
are still accruing interest. The balance in this category at any quarter end
can fluctuate widely based on the timing of cash collections, renegotiations and
renewals.
14
<PAGE>
Nonperforming Assets and 90 Day Past Due Loans and Leases
<TABLE>
<CAPTION>
September 30 June 30 December 31 September 30
(In Millions) 1995 1995 1994 1994
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Nonaccrual Loans
Domestic $30.4 $29.8 $26.5 $34.3
International .4 .7 1.3 1.3
- ------------------------------------------------------------------------------------
Total Nonaccrual Loans 30.8 30.5 27.8 35.6
Restructured Loans 2.8 2.8 - -
OREO 1.8 1.2 2.2 3.6
- ------------------------------------------------------------------------------------
Total Nonperforming Assets $35.4 $34.5 $30.0 $39.2
- ------------------------------------------------------------------------------------
Total 90 Day Past Due Loans
(still accruing) $21.5 $14.1 $17.3 $23.9
- ------------------------------------------------------------------------------------
</TABLE>
PROVISION AND RESERVE FOR CREDIT LOSSES. The provision for credit losses is
the charge against current earnings that is determined by management through a
disciplined credit review process as the amount needed to maintain a reserve
that is sufficient to absorb credit losses inherent in Northern Trust's loan and
lease portfolios and other credit undertakings. While the largest portion of
this reserve is intended to cover loan and lease losses, it is considered a
general reserve that is available to cover all credit-related exposures.
The 1995 third quarter provision for credit losses was $2.0 million, compared
with $1.0 million in 1994. Net charge-offs totaled $1.8 million in the third
quarter of 1995 versus net charge-offs of $1.0 million last year. The reserve
for credit losses was $147.3 million, equal to 1.50% of outstanding loans at
September 30, 1995. This compares with $144.8 million or 1.69% of outstanding
loans at December 31, 1994 and $144.9 million or 1.71% of outstanding loans at
September 30, 1994. The lower reserve to outstanding loans ratio at September
30, 1995 is attributable to loan growth, a significant portion of which is in
low-risk residential lending and overnight trust related advances.
The overall credit quality of the domestic portfolio has remained good as
evidenced by the low level of nonperforming loans and net charge-offs.
Management's assessment of the current U.S. economy, the financial condition of
certain clients facing financial difficulties, bank acquisitions and portfolio
growth were primary factors impacting management's decision to increase the
reserve for credit losses to $147.3 million at September 30, 1995, up slightly
from December 31, 1994 and September 30, 1994.
Northern Trust continues to monitor closely several credits, but the overall
quality of its loan portfolio remains sound and the reserve for credit losses is
adequate to cover credit-related uncertainties as they exist today. Established
credit review procedures ensure that close attention is given to commercial real
estate-related loans and other commercial loans, as well as other credit
exposures that might be adversely affected by significant increases in interest
rates or unexpected downturns in segments of the economies of the United States
or other countries.
15
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
16
<PAGE>
The following schedule should be read in conjunction with the Net Interest
Income section of Management's Discussion and Analysis of Financial Condition
and Results of Operations.
CONSOLIDATED ANALYSIS OF NET INTEREST INCOME
<TABLE>
<CAPTION>
THIRD QUARTER
--------------------------------------------------
(Interest and rate on a 1995 1994
taxable equivalent basis) ------------------------ ------------------------
($ Amounts in Millions) INTEREST VOLUME RATE Interest Volume Rate
- -------------------------- -------- --------- ----- -------- --------- -----
<S> <C> <C> <C> <C> <C> <C>
AVERAGE EARNING ASSETS
Money Market Assets
Federal Funds Sold and
Repurchase Agreements $ 1.9 $ 125.7 6.04% $ 2.0 $ 177.8 4.65%
Time Deposits with Banks 22.4 1,604.2 5.53 26.1 2,107.6 4.90
Other .2 9.9 8.76 1.7 139.6 4.88
- -------------------------- ------ --------- ----- ------ --------- -----
Total Money Market Assets 24.5 1,739.8 5.59 29.8 2,425.0 4.88
- -------------------------- ------ --------- ----- ------ --------- -----
Securities
U.S. Government 20.1 1,339.6 5.94 13.5 1,172.3 4.59
Obligations of States and
Political Subdivisions 11.5 433.1 10.61 12.6 454.9 11.04
Federal Agency 69.8 4,499.3 6.16 36.8 3,054.8 4.79
Other 5.2 341.6 6.09 5.3 403.2 5.23
Trading Account 1.1 63.7 7.02 1.2 55.5 8.01
- -------------------------- ------ --------- ----- ------ --------- -----
Total Securities 107.7 6,677.3 6.41 69.4 5,140.7 5.37
- -------------------------- ------ --------- ----- ------ --------- -----
Loans and Leases 163.1 9,356.9 6.91 130.5 8,434.9 6.14
- -------------------------- ------ --------- ----- ------ --------- -----
Total Earning Assets $295.3 $17,774.0 6.59% $229.7 $16,000.6 5.70%
- -------------------------- ------ --------- ----- ------ --------- -----
AVERAGE SOURCE OF FUNDS
Deposits
Savings and Money Market
Deposits $ 27.5 $ 3,327.0 3.28% $ 22.1 $ 3,391.6 2.58%
Savings Certificates 32.6 2,124.7 6.09 14.4 1,232.0 4.66
Other Time 8.6 584.8 5.82 5.5 469.5 4.59
Foreign Offices Time 43.4 3,338.4 5.15 38.2 3,576.9 4.24
- -------------------------- ------ --------- ----- ------ --------- -----
Total Deposits 112.1 9,374.9 4.74 80.2 8,670.0 3.67
Federal Funds Purchased 29.9 2,047.1 5.80 13.3 1,163.7 4.54
Repurchase Agreements 26.6 1,830.6 5.76 19.8 1,779.5 4.41
Commercial Paper 2.1 147.5 5.86 1.7 153.5 4.59
Other Borrowings 17.8 1,292.0 5.47 6.6 668.8 3.94
Senior Medium-Term Notes 2.8 174.6 6.44 9.5 801.6 4.69
Notes Payable 5.1 254.1 7.90 5.4 273.6 7.91
- -------------------------- ------ --------- ----- ------ --------- -----
Total Interest-Related
Funds 196.4 15,120.8 5.15 136.5 13,510.7 4.01
- -------------------------- ------ --------- ----- ------ --------- -----
Interest Rate Spread -- -- 1.44% -- -- 1.69%
- -------------------------- ------ --------- ----- ------ --------- -----
Noninterest-Related Funds -- 2,653.2 -- -- 2,489.9 --
- -------------------------- ------ --------- ----- ------ --------- -----
Total Source of Funds $196.4 $17,774.0 4.38% $136.5 $16,000.6 3.39%
- -------------------------- ------ --------- ----- ------ --------- -----
NET INTEREST INCOME/MARGIN $ 98.9 -- 2.21% $ 93.2 -- 2.31%
- -------------------------- ------ --------- ----- ------ --------- -----
</TABLE>
ANALYSIS OF NET INTEREST INCOME CHANGES DUE TO VOLUME AND RATE
<TABLE>
<CAPTION>
THIRD QUARTER
1995/94 NINE MONTHS 1995/94
------------------ ---------------------
CHANGE DUE
TO CHANGE DUE TO
------------ -------------
(In Millions) VOLUME RATE TOTAL VOLUME RATE TOTAL
- ---------------------- ------ ----- ----- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Earning Assets $29.0 $36.6 $65.6 $77.7 $139.0 $216.7
Interest-Related Funds 23.5 36.4 59.9 50.0 144.3 194.3
- ---------------------- ----- ----- ----- ----- ------ ------
Net Interest Income $ 5.5 $ .2 $ 5.7 $27.7 $ (5.3) $ 22.4
- ---------------------- ----- ----- ----- ----- ------ ------
</TABLE>
17
<PAGE>
Northern Trust Corporation
<TABLE>
<CAPTION>
NINE MONTHS
--------------------------------------------------
1995 1994
------------------------ ------------------------
INTEREST VOLUME RATE Interest Volume Rate
-------- --------- ----- -------- --------- -----
<S> <C> <C> <C> <C> <C>
$ 9.3 $ 205.4 6.09% $ 6.0 $ 197.7 4.07%
69.9 1,647.2 5.67 74.7 2,154.4 4.63
.7 12.7 7.07 4.4 140.1 4.22
------ --------- ----- ------ --------- -----
79.9 1,865.3 5.73 85.1 2,492.2 4.57
------ --------- ----- ------ --------- -----
45.9 1,083.8 5.65 61.9 2,052.9 4.03
36.0 442.1 10.87 39.9 469.4 11.32
197.4 4,166.7 6.33 63.3 1,882.7 4.50
17.1 366.7 6.23 14.2 372.3 5.08
2.6 49.3 7.14 3.3 55.2 7.90
------ --------- ----- ------ --------- -----
299.0 6,108.6 6.54 182.6 4,832.5 5.05
------ --------- ----- ------ --------- -----
467.8 8,958.5 6.98 362.3 8,214.2 5.90
------ --------- ----- ------ --------- -----
$846.7 $16,932.4 6.68% $630.0 $15,538.9 5.42%
------ --------- ----- ------ --------- -----
$ 81.5 $ 3,293.3 3.31% $ 61.8 $ 3,436.2 2.40%
87.7 1,949.2 6.02 38.2 1,162.4 4.40
23.0 527.4 5.82 12.9 399.8 4.30
141.2 3,607.6 5.23 92.4 3,105.3 3.98
------ --------- ----- ------ --------- -----
333.4 9,377.5 4.75 205.3 8,103.7 3.39
62.1 1,416.2 5.86 40.1 1,408.7 3.81
75.7 1,731.8 5.84 39.5 1,349.8 3.91
6.4 145.9 5.89 4.0 135.9 3.98
44.2 1,089.1 5.43 27.5 1,101.0 3.34
15.5 340.2 6.05 23.5 785.7 3.98
14.9 247.9 8.02 18.0 308.8 7.81
------ --------- ----- ------ --------- -----
552.2 14,348.6 5.14 357.9 13,193.6 3.63
------ --------- ----- ------ --------- -----
-- -- 1.54% -- -- 1.79%
------ --------- ----- ------ --------- -----
-- 2,583.8 -- -- 2,345.3 --
------ --------- ----- ------ --------- -----
$552.2 $16,932.4 4.36% $357.9 $15,538.9 3.08%
------ --------- ----- ------ --------- -----
$294.5 -- 2.32% $272.1 -- 2.34%
------ --------- ----- ------ --------- -----
</TABLE>
18
<PAGE>
PART II - OTHER INFORMATION
Item 5. Other Information
On October 3, 1995, William A. Osborn became Chairman and Chief
Executive Officer and Barry G. Hastings became President and Chief
Operating Officer, implementing a previously announced succession
plan approved by the Corporation's Board of Directors. Their
elections followed the retirement of David W. Fox after 40 years
of service with the Corporation and its principal subsidiary, The
Northern Trust Company.
Item 6. Exhibits and Reports on Form 8-K
(a.) Exhibits
--------
Exhibit (3) Amendment to By-laws of the Corporation and By-laws as
amended.
Exhibit (4) Instruments Defining the Rights of Security Holders
(i) Form of The Northern Trust Company's Global Senior
Bank Note (Fixed Rate).
(ii) Form of The Northern Trust Company's Global Senior
Bank Note (Floating Rate).
(iii) Form of The Northern Trust Company's Global
Subordinated Medium-Term Bank Note (Fixed Rate).
(iv) Form of The Northern Trust Company's Global
Subordinated Medium-Term Bank Note (Floating Rate).
Exhibit (11) Computation of Per Share Earnings
Exhibit (27) Financial Data Schedule
(b.) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed for the three months ended
September 30, 1995.
19
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NORTHERN TRUST CORPORATION
--------------------------
(Registrant)
Date: November 13, 1995 By: PERRY R. PERO
------------------------------
PERRY R. PERO
Senior Executive Vice President
and Chief Financial Officer
Date: November 13, 1995 By: HARRY W. SHORT
------------------------------
HARRY W. SHORT
Senior Vice President and Controller
(Chief Accounting Officer)
20
<PAGE>
EXHIBIT INDEX
-------------
The following exhibits have been filed herewith.
Exhibit
Number Description
- ------ -----------
(3) Amendment to By-laws of the Corporation and By-laws as amended.
(4) Instruments Defining the Rights of Security Holders
(i) Form of The Northern Trust Company's Global Senior Bank Note
(Fixed Rate).
(ii) Form of The Northern Trust Company's Global Senior Bank Note
(Floating Rate).
(iii) Form of The Northern Trust Company's Global Subordinated
Medium-Term Bank Note (Fixed Rate).
(iv) Form of The Northern Trust Company's Global Subordinated
Medium-Term Bank Note (Floating Rate).
(11) Computation of Per Share Earnings.
(27) Financial Data Schedule.
21
<PAGE>
Board of Directors Exhibit Number (3)
To 9/30/95 Form 10-Q
Resolution 8/15/95
- --------------------------------------------------------------------------------
Northern Trust Corporation
AMENDED AND RESTATED BY-LAWS
- ----------------------------
RESOLVED, that the By-Laws of Northern Trust Corporation are hereby amended
and restated in their entirety, to read as set forth in the form of By-Laws
presented to this meeting, a copy of which shall be maintained in the
Secretary's file.
<PAGE>
Exhibit Number (3)
To 9/30/95 Form 10-Q
By-laws
of
Northern Trust Corporation
Chicago, Illinois
As Effective August 15, 1995
<PAGE>
<TABLE>
<CAPTION>
Table of Contents
<C> <S> <C>
Article I--The Stockholders
SECTION 1.1 --ANNUAL MEETING.............................................. 1
SECTION 1.2 --SPECIAL MEETINGS............................................ 1
SECTION 1.3 --NOTICE OF MEETINGS.......................................... 1
SECTION 1.4 --FIXING DATE OF RECORD....................................... 1
SECTION 1.5 --INSPECTORS OF ELECTION...................................... 2
SECTION 1.6 --QUORUM...................................................... 3
SECTION 1.7 --CUMULATIVE VOTING RIGHTS.................................... 3
SECTION 1.8 --PROXIES..................................................... 3
SECTION 1.9 --VOTING BY BALLOT............................................ 3
SECTION 1.10 --VOTING LISTS................................................ 3
SECTION 1.11 --PLACE OF MEETING............................................ 3
SECTION 1.12 --VOTING OF SHARES OF CERTAIN HOLDERS......................... 4
Article II--The Board of Directors
SECTION 2.1 --GENERAL POWERS.............................................. 4
SECTION 2.2 --NUMBER, TENURE AND QUALIFICATIONS........................... 4
SECTION 2.3 --REGULAR MEETINGS............................................ 4
SECTION 2.4 --SPECIAL MEETINGS; NOTICE.................................... 4
SECTION 2.5 --TIME OF NOTICE.............................................. 5
SECTION 2.6 --QUORUM...................................................... 5
SECTION 2.7 --MANNER OF ACTING............................................ 5
SECTION 2.8 --DIRECTORS' COMPENSATION..................................... 5
SECTION 2.9 --VACANCIES................................................... 5
SECTION 2.10 --CONSENT IN LIEU OF MEETING.................................. 6
Article III--The Executive Committee
SECTION 3.1 --NUMBER, TENURE, AND QUORUM.................................. 6
SECTION 3.2 --POWERS...................................................... 6
SECTION 3.3 --MEETINGS.................................................... 6
SECTION 3.4 --RECORDS AND REPORTS......................................... 6
Article IV--The Audit Committee
SECTION 4.1 --FUNCTIONS................................................... 7
SECTION 4.2 --COMPOSITION................................................. 7
SECTION 4.3 --PROCEDURES.................................................. 7
SECTION 4.4 --COUNSEL..................................................... 7
Article V--The Nominating Committee
SECTION 5.1 --THE NOMINATING COMMITTEE.................................... 8
Article VI--The Compensation and Benefits Committee
SECTION 6.1 --THE COMPENSATION AND BENEFITS
COMMITTEE................................................... 8
Article VII--The Personal Financial Services Committee
SECTION 7.1 --THE PERSONAL FINANCIAL SERVICES COMMITTEE................... 8
Article VIII--The Corporate and Institutional Services Committee
SECTION 8.1 --THE CORPORATE AND INSTITUTIONAL SERVICES COMMITTEE.......... 9
</TABLE>
i
<PAGE>
<TABLE>
<C> <S> <C>
Article IX--The Officers
SECTION 9.1 --NUMBER AND TERM OF OFFICE................................... 9
SECTION 9.2 --REMOVAL..................................................... 9
SECTION 9.3 --THE CHAIRMAN OF THE BOARD................................... 9
SECTION 9.4 --THE PRESIDENT............................................... 9
SECTION 9.5 --THE CHIEF EXECUTIVE OFFICER................................. 10
SECTION 9.6 --THE VICE CHAIRMEN........................................... 10
SECTION 9.7 --THE EXECUTIVE VICE PRESIDENTS............................... 10
SECTION 9.8 --THE VICE PRESIDENTS......................................... 10
SECTION 9.9 --THE TREASURER............................................... 10
SECTION 9.10 --THE SECRETARY............................................... 11
SECTION 9.11 --ASSISTANT TREASURERS AND ASSISTANT SECRETARIES.............. 11
SECTION 9.12 --SALARIES.................................................... 11
Article X--Contracts, Loans, Checks and Deposits
SECTION 10.1 --CONTRACTS................................................... 11
SECTION 10.2 --LOANS....................................................... 11
SECTION 10.3 --CHECKS, DRAFTS, ETC......................................... 11
SECTION 10.4 --DEPOSITS.................................................... 11
SECTION 10.5 --POWER TO EXECUTE PROXIES.................................... 12
Article XI--Certificates for Shares and Their Transfer
SECTION 11.1 --CERTIFICATES FOR SHARES..................................... 12
SECTION 11.2 --TRANSFERS OF SHARES......................................... 12
Article XII--Fiscal Year
SECTION 12.1 --FISCAL YEAR................................................. 12
Article XIII--SEAL
SECTION 13.1 --SEAL........................................................ 12
Article XIV--Waiver of Notice
SECTION 14.1 --WAIVER OF NOTICE............................................ 13
Article XV--Indemnification
SECTION 15.1 --INDEMNIFICATION REQUEST..................................... 13
SECTION 15.2 --DETERMINATION OF INDEMNIFICATION REQUEST.................... 13
SECTION 15.3 --PRESUMPTION OF ENTITLEMENT; CONCLUSIVE EFFECT OF FINDINGS OF
FACT AND LAW; OTHER PROCEDURES.............................. 13
SECTION 15.4 --COOPERATION AND EXPENSES.................................... 14
SECTION 15.5 --SELECTION OF INDEPENDENT COUNSEL............................ 14
SECTION 15.6 --TIME FOR DETERMINATION...................................... 14
SECTION 15.7 --FAILURE TO MAKE DETERMINATION; REMEDIES FOR ENFORCEMENT..... 15
SECTION 15.8 --APPEAL OF ADVERSE DETERMINATION............................. 15
SECTION 15.9 --BURDEN OF PROOF............................................. 15
SECTION 15.10 --DEFINITION OF "DISINTERESTED DIRECTOR"...................... 15
SECTION 15.11 --DEFINITION OF "CHANGE OF CONTROL"........................... 15
SECTION 15.12 --ADVANCEMENT OF EXPENSES..................................... 16
SECTION 15.13 --PERSONAL LIABILITY OF DIRECTORS............................. 16
Article XVI--Amendments
SECTION 16.1 --AMENDMENTS.................................................. 16
</TABLE>
ii
<PAGE>
By-laws
of
The Northern Trust Corporation
Chicago, Illinois
ARTICLE I
THE STOCKHOLDERS
SECTION 1.1 Annual Meeting. There shall be an annual meeting of the
stockholders on the third Tuesday in April of each year at ten-thirty o'clock
A.M., or at such other date or time as shall be designated from time to time by
the Board of Directors and stated in the notice of the meeting, for the election
of Directors and for the transaction of such other business as may come before
the meeting.
SECTION 1.2 Special Meetings. A special meeting of the stockholders may be
called at any time by the Board of Directors, the Chairman of the Board, the
President, or a Vice Chairman, and shall be called upon request in writing from
the holders of at least one-third of the issued and outstanding shares of
capital stock of the Corporation entitled to vote at such meeting specifying the
purpose or purposes for which such meeting shall be called.
SECTION 1.3 Notice of Meetings. Unless a different manner of giving notice
is prescribed by statute, written or printed notice stating the place, day, and
hour of the meeting, and in case of a special meeting, the purpose or purposes
for which the meeting is called, shall be delivered not more than 50 days nor
less than 10 days (or less than 20 days if a merger or consolidation of the
Corporation,or a sale, lease or exchange of all or substantially all of the
Corporation's property or assets, is to be acted upon at the meeting) before the
date of the meeting either personally or by mail, to each stockholder of record
entitled to vote at such meeting. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail with postage thereon prepaid
addressed to the stockholder at the stockholder's address as it appears on the
records of the Corporation.
<PAGE>
SECTION 1.4. Fixing Date of Record.
(a) In order that the Corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, the Board of Directors may fix a record date, which record
date shall not precede the date on which the resolution fixing the record date
is adopted by the Board of Directors, and which record date shall not be more
than 60 nor less than 10 days (or less than 20 days if a merger or consolidation
of the Corporation, or a sale, lease or exchange of all or substantially all of
the Corporation's property or assets, is to be acted upon at the meeting) before
the date of such meeting. If no record date is fixed by the Board of Directors,
the record date for determining stockholders entitled to notice of or to vote at
a meeting of stockholders shall be at the close of business on the next day
preceding the day on which notice is given, or, if notice is waived, at the
close of business on the day next preceding the day on which the meeting is
held. A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to an adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
1
<PAGE>
ARTICLE (b) In order that the Corporation may determine the stockholders
I entitled to consent to corporate action in writing without a
meeting, the Board of Directors may fix a record date, which
record date shall not precede the date on which the resolution
fixing the record date is adopted by the Board of Directors, and
which date shall not be more than 10 days after the date upon
which the resolution fixing the record date is adopted by the
Board of Directors. If no record date has been fixed by the Board
of Directors, the record date for determining stockholders
entitled to consent to corporate action in writing without a
meeting, when no prior action by the Board of Directors is
required by the Restated Certificate of Incorporation of the
Corporation or by statute, shall be the first date on which a
signed written consent setting forth the action taken or proposed
to be taken is delivered in the manner required by law to the
Corporation at its registered office in the State of Delaware or
at its principal place of business or to an officer or agent of
the Corporation having custody of the book in which proceedings of
meetings of the Corporation's stockholders are recorded. Delivery
made to the Corporation's registered office shall be by hand
delivery or by certified or registered mail, return receipt
requested. If no record has been fixed by the Board of Directors
and prior action by the Board of Directors is required by the
Restated Certificate of Incorporation or by statute, the record
date for determining stockholders entitled to consent to corporate
action in writing without a meeting shall be at the close of
business on the day on which the Board of Directors adopts the
resolution taking such prior action.
(c) In order that the Corporation may determine the stockholders
entitled to receive payment of any dividend or other distribution
or allotment of any rights or the stockholders entitled to
exercise any rights in respect of any change, conversion or
exchange of stock, or for the purpose of any other lawful action,
the Board of Directors may fix a record date, which record date
shall not precede the date upon which the resolution fixing the
record date is adopted, and which record date shall not be more
than 60 days prior to such action. If no record date is fixed, the
record date for determining stockholders for any such purpose
shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto.
(d) Only those who shall be stockholders of record on the record
date so fixed as aforesaid shall be entitled to such notice of,
and to vote at, such meeting and any adjournment thereof, or to
receive payment of such dividend or other distribution, or to
receive such allotment of rights, or to exercise such rights, as
the case may be, notwithstanding the transfer of any stock on the
books of the Corporation after the applicable record date.
SECTION 1.5. Inspectors of Election. The Board of Directors or
the Executive Committee of the Board of Directors of the
Corporation shall appoint, in advance, one or more inspectors to
act at each meeting of the stockholders of the Corporation. If no
inspector has been appointed or one or more have been appointed
but are unable or fail to act, the presiding officer of any
meeting of the stockholders shall appoint one or more persons as
inspectors for such meeting. Such inspectors shall ascertain the
number of shares of stock of the Corporation outstanding and
entitled to vote at the meeting and the voting power of each
share; determine and report the number of shares represented at
the meeting, based upon their determination of the validity and
effect of proxies and ballots; count all votes and ballots and
report the results; and do such other acts as are required by law
or are proper to conduct the election and voting with impartiality
and fairness to all the stockholders. Each report of an inspector
shall be in writing and signed by him or her or a majority of them
if there is more than one inspector acting at such meeting. If
there is more than one inspector, the report of a majority shall
be the report of the inspectors. The report of the inspector or
inspectors on the number of shares represented at the meeting and
the results of the voting shall be prima facie evidence thereof.
The inspector or inspectors may appoint or retain other persons or
entities to assist in performing their duties.
2
<PAGE>
ARTICLE SECTION 1.6. Quorum. A majority of the outstanding
I shares of capital stock entitled to vote at the
meeting, represented in person or by proxy, shall
constitute a quorum at a meeting of stockholders.
In the absence of a quorum, a meeting may be
adjourned from time to time without notice to the
stockholders except as otherwise required by law.
SECTION 1.7. Cumulative Voting Rights. At all
elections of Directors of the Corporation, each
stockholder entitled generally to vote for the
election of Directors shall be entitled to as many
votes as shall equal the number of votes which
(except for this provision as to cumulative voting)
the stockholder would be entitled to cast for the
election of Directors with respect to the
stockholder's shares of stock multiplied by the
number of Directors to be elected, and the
stockholder may cast all of such votes for a
single Director or may distribute them among the
number to be voted for, or for any two or more of
them as the stockholder may see fit.
SECTION 1.8. Proxies. At all meetings of
stockholders, a stockholder entitled to vote may
vote either in person or by proxy executed in
writing by the stockholder or by the stockholder's
duly authorized attorney-in-fact. Such proxy shall
be filed with the Secretary before or at the time of
the meeting. No proxy shall be valid after eleven
months from the date of its execution, unless
otherwise provided in the proxy.
SECTION 1.9. Voting by Ballot. Voting in any
election for Directors shall be by ballot.
SECTION 1.10. Voting Lists. The officer who has
charge of the stock ledger of the Corporation shall
prepare and make, at least ten days before every
meeting of stockholders, a complete list of the
stockholders entitled to vote at the meeting,
arranged in alphabetical order, and showing the
address of each stockholder and the number of
shares registered in the name of each stockholder.
Such list shall be open to the examination of any
stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a
period of at least ten days prior to the meeting,
either at a place within the city where the meeting
is to be held, which place shall be specified in
the notice of the meeting, or, if not so specified,
at the place where the meeting is to be held. The
list shall also be produced and kept at the time
and place of the meeting during the whole time
thereof, and may be inspected by any stockholder
who is present.
SECTION 1.11. Place of Meeting. The Board of
Directors may designate any place, either within or
without the State of Delaware, as the place of
meeting for any annual meeting or any special
meeting called by the Board of Directors. If no
designation is made, or if a special meeting is
otherwise called, the place of meeting shall be the
principal office of the Corporation in the City of
Chicago.
3
<PAGE>
ARTICLE SECTION 1.12. Voting of Shares of Certain Holders.
I Shares of capital stock of the Corporation standing
in the name of another corporation, domestic or
foreign, may be voted by such officer, agent, or
proxy as the by-laws of such corporation may
prescribe, or, in the absence of such provision, as
the board of directors of such corporation may
determine.
Shares of capital stock of the Corporation standing
in the name of a deceased person, a minor ward or
an incompetent person, may be voted by his or her
administrator, executor, court appointed guardian
or conservator, either in person or by proxy
without a transfer of such shares into the name of
such administrator, executor, court appointed
guardian or conservator. Shares of capital stock of
the Corporation standing in the name of a trustee
may be voted by the trustees, either in person or by
proxy.
Shares of capital stock of the Corporation standing
in the name of a receiver may be voted by such
receiver, and shares held by or under the control
of a receiver may be voted by such receiver without
the transfer thereof into the receiver's name if
authority so to do be contained in an appropriate
order of the court by which such receiver was
appointed.
A stockholder whose shares are pledged shall be
entitled to vote such shares until the shares have been
transferred into the name of the pledgee, and thereafter the
pledgee shall be entitled to vote the shares so transferred.
Shares of its own capital stock belonging to this
Corporation shall not be voted, directly or
indirectly, at any meeting and shall not be counted
in determining the total number of outstanding
shares at any given time, but shares of its own
stock held by it in a fiduciary capacity may be
voted and shall be counted in determining the total
number of outstanding shares at any given time.
ARTICLE II
THE BOARD OF DIRECTORS
SECTION 2.1. General Powers. The business and
affairs of the Corporation shall be managed by or
under the direction of its Board of Directors.
SECTION 2.2. Number, Tenure and Qualifications. The
Board of Directors of the Corporation shall consist
of such number of Directors, not less than 5 nor
more than 25, as shall be fixed from time to time
by the Board of Directors. Each Director shall hold
office until the next annual meeting of
stockholders or until a successor is elected.
SECTION 2.3. Regular Meetings. A regular meeting of
the Board of Directors shall be held at least once
each quarter at such place, date and hour as the
Board may appoint. Notice of each regular meeting,
unless waived, shall be given in the same manner as
is provided for notice of a special meeting.
SECTION 2.4. Special Meetings; Notice. A special
meeting of the Board of Directors may be called by
or at the request of the Chairman of the Board, the
President, a Vice Chairman, or any two Directors.
The person or persons calling or requesting such
meeting may fix the place, date and hour thereof.
Notice of the place, date, and hour of each special
meeting, unless waived, shall be given to a
Director in person, by mail, by telegram or cable,
by telephone or wireless, or by any other means
that reasonably may be expected to provide similar
4
<PAGE>
ARTICLE notice. Except in emergency situations as described
II below, notice by any means shall be given at least
two days prior to the meeting. For purposes of
dealing with an emergency situation (as
conclusively determined by the officer or Directors
calling the meeting), notice may be given in
person, by telegram or cable, by telephone or
wireless, or by any other means that reasonably may
be expected to provide similar notice, not less
than two hours prior to the meeting. Such notice
may be given by the Secretary or by the officer or
Directors calling the meeting.
SECTION 2.5. Time of Notice. If notice to a
Director is given:
(a) in person, such notice shall be deemed to have
been given when delivered;
(b) by mail, such notice shall be deemed to have
been given when deposited in the United States
mail, postage prepaid, addressed to the Director at
such address as appears on the records of the
Corporation for such Director;
(c) by telegram, cable or other similar means (not
including mail) that provide written notice, such
notice shall be deemed to have been given when
delivered to any transmission company, with charges
prepaid, addressed to the Director at such address
as appears on the records of the Corporation for
such Director; or
(d) by telephone, wireless or other means of voice
transmission, such notice shall be deemed to have
been given when transmitted to such number or call
designation as appears on the records of the
Corporation for such Director.
Any meeting of the Board of Directors shall be a
legal meeting without any notice having been given
if all the Directors are present at the meeting,
and no notice of a meeting shall be required to be
given to any Director who attends such meetings.
SECTION 2.6. Quorum. A majority of the Board of
Directors shall constitute a quorum for the
transaction of business at any meeting of the Board
of Directors, provided that if less than a majority
of the Directors are present at said meeting, a
majority of the Directors present may adjourn the
meeting from time to time without further notice.
SECTION 2.7. Manner of Acting. The act of the
majority of the Directors present at a meeting at
which a quorum is present shall be the act of the
Board of Directors, except on additions,
amendments, repeal or any changes whatsoever in the
By-laws or the adoption of new By-laws, when the
affirmative votes of at least a majority of the
members of the Board shall be necessary for the
adoption of such changes.
A director may participate in a meeting of the
Board of Directors or any committee thereof by
means of conference telephone or similar
communications equipment by means of which all
persons participating in the meeting can hear each
other, and such participation shall constitute
presence in person at such meetings.
SECTION 2.8. Directors' Compensation. The Directors
shall receive such compensation as may be fixed by
the Board for services to the Corporation.
SECTION 2.9. Vacancies. If vacancies occur in the
Board of Directors caused by death, resignation,
retirement, disqualification or removal from office
of any Director or Directors, or otherwise, or if
any new Directorship is created by any increase in
the authorized number of Directors, a majority of
the surviving or remaining Directors then in
office, though less than a quorum, may choose a
successor or successors, or fill the newly created
Directorship, and the Directors so chosen shall
hold office until the next annual meeting of
stockholders or until their successors are elected.
5
<PAGE>
ARTICLE SECTION 2.10. Consent in Lieu of Meeting. Unless
II otherwise restricted by the Restated Certificate of
Incorporation or these By-laws, any action required
or permitted to be taken at any meeting of the
Board of Directors or any committee thereof may be
taken without a meeting if all members of the Board
or committee thereof, as the case may be, consent
thereto in writing, and the writing or writings are
filed with the minutes of the proceedings of the
Board or committee.
ARTICLE III
THE EXECUTIVE COMMITTEE
SECTION 3.1. Number, Tenure and Quorum. The
Directors shall each year appoint no less than five
Directors, one of whom shall be the Chairman of the
Board and one of whom shall be the President if the
President is designated the Chief Executive Officer,
who shall constitute and be called the Executive
Committee. Each Director so appointed shall act as a
member of the Committee until another is appointed and
acts in the Director's place. The Chairman of the Board
shall preside at meetings of the Committee. In the
absence or disqualification of a member of the
Committee, the members thereof present at any meeting
and not disqualified from voting, whether or not they
constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at
the meeting in the place of any such absent or
disqualified member. In the absence or inability to act
of the Chairman of the Board, or upon the request of
the Chairman, the President, if the President is a
member of the Committee, or a member elected by the
Committee shall preside at meetings of the Committee.
A majority of the members of the Executive
Committee shall constitute a quorum for the
transaction of business.
SECTION 3.2. Powers. The Executive Committee may,
while the Board of Directors is not in session,
exercise all or any of the powers of the Board of
Directors; except that the Executive Committee
shall not have the power or authority of the Board
of Directors in reference to amending the Restated
Certificate of Incorporation, adopting an agreement
of merger or consolidation, recommending to the
stockholders the sale, lease or exchange of all or
substantially all of the Corporation's property and
assets, recommending to the stockholders a
dissolution of the Corporation or a revocation of a
dissolution, or amending the By-laws of the
Corporation, or declaring a dividend or authorizing
the issuance of stock.
SECTION 3.3. Meetings. Meetings of the Executive
Committee shall be held at the office of the
Corporation, or elsewhere, and at such time as they
may appoint, but the Committee shall at all times
be subject to the call of the Chairman of the Board
or any member of the Committee.
SECTION 3.4. Records and Reports. The Executive
Committee, through the Secretary or any Assistant
Secretary, shall keep books of separate minutes and
report all its action at every regular meeting of
the Board of Directors, or as often as may be
required by the Board.
6
<PAGE>
ARTICLE IV
THE AUDIT COMMITTEE
SECTION 4.1. Functions. An Audit Committee shall be
appointed each year by the Board of Directors. The
Committee shall perform the following functions for
the Corporation and its subsidiaries on a
consolidated basis and for such individual banking
subsidiaries as the Board shall direct:
(a) Reviewing with management and the independent
public accountant the reports issued with respect
to the annual financial statements, the internal
control structure and procedures for financial
reporting and compliance with laws and regulations
and the basis for such reports.
(b) Reviewing with management and the independent
public accountant the scope of services required by
the annual audit, significant accounting policies,
and audit conclusions regarding significant
accounting estimates.
(c) Reviewing with management and the independent
public accountant their assessments of the adequacy
of internal controls, and the resolution of
identified material weaknesses and reportable
conditions in internal controls over financial
reporting, including the prevention or detection of
management override or compromise of the internal
control system.
(d) Reviewing with management and the independent
public accountant compliance with those laws and
regulations with respect to which management and
the independent public accountant are required to
report.
(e) Discussing with management the selection and
termination of the independent public accountant
and any significant disagreements between the
independent public accountant and management.
(f) Reviewing the internal audit program and
results of examinations.
(g) Reviewing the program of the Chief Compliance
Officer and the compliance function generally.
(h) Reviewing the results of regulatory
examinations.
(i) Reviewing such other matters as the Committee
deems appropriate.
SECTION 4.2. Composition. The Committee shall
consist of no less than four Directors. All of the
members of the Committee shall, in the judgement of
the Board of Directors, be independent of management
of the Corporation and its subsidiaries and shall
meet other applicable regulatory requirements.
SECTION 4.3. Procedures. The Committee shall be
appointed annually at the organization meeting of
the Board of Directors and at the same time a
Chairman shall be appointed. The Committee shall
meet upon the call of the Chairman or any member of
the Committee. In the absence or disqualification
of a member of the Committee, the members thereof
present at any meeting and not disqualified from
voting, whether or not they constitute a quorum,
may unanimously appoint another qualified member of
the Board of Directors to act at the meeting in the
place of any such absent or disqualified member.
SECTION 4.4. Counsel. The Committee may, in order
to assist it in the performance of its functions,
engage counsel of its choosing without the approval
of the engagement by the Board of Directors or
management and may direct the proper officers of
the Corporation to pay the reasonable fees and
expenses of any such counsel.
7
<PAGE>
ARTICLE V
THE NOMINATING COMMITTEE
SECTION 5.1. The Nominating Committee. A Nominating
Committee and its Chairman shall be appointed each
year by the Board of Directors to receive
recommendations for, and to review, study and
evaluate the qualifications of all candidates for
senior management succession and for nomination to
the Board of Directors or its Committees. The
Committee shall report to the Board its conclusions
with respect to such candidates and its
recommendations for nominees for election or
reelection or appointment to fill vacancies in the
Board and as officers of the Corporation. The
Committee shall consist of no less than four
Directors and shall meet upon the call of the
Chairman or any member of the Committee. In the
absence or disqualification of a member of the
Committee, the members thereof present at any
meeting and not disqualified from voting, whether
or not they constitute a quorum, may unanimously
appoint another member of the Board of Directors to
act at the meeting in the place of any such absent
or disqualified member.
ARTICLE VI
THE COMPENSATION AND BENEFITS COMMITTEE
SECTION 6.1. The Compensation and Benefits
Committee. A Compensation and Benefits Committee
and its Chairman shall be appointed each year by
the Board of Directors to study, review and make
recommendations to the Board with respect to the
salary policy for the Corporation, the compensation
of senior officers, and the development of and
amendment to incentive and benefit plans. The
Committee shall consist of no less than three
Directors, none of whom shall be an active officer
of the Corporation. The Committee shall meet upon
the call of the Chairman or any member of the
Committee. In the absence or disqualification of a
member of the Committee, the members thereof
present at any meeting and not disqualified from
voting, whether or not they constitute a quorum,
may unanimously appoint another member of the Board
of Directors to act at the meeting in the place of
any such absent or disqualified member.
ARTICLE VII
THE PERSONAL FINANCIAL SERVICES COMMITTEE
SECTION 7.1. The Personal Financial Services
Committee. A Personal Financial Services Committee
and its Chairman shall be appointed each year by
the Board of Directors to review the policies,
strategies and performance of the Personal Financial
Services Business Unit of the Corporation and such
other related matters as may from time to time be
deemed appropriate by the Committee. The
Committee shall consist of no less than four
Directors, none of whom shall be an active officer
of the Corporation. The Committee shall meet upon
the call of the Chairman or any member of the
Committee. In the absence or disqualification of
a member of the Committee, the members thereof
present at any meeting and not disqualified from
voting, whether or not they constitute a quorum,
may unanimously appoint another member of the
Board of Directors to act at the meeting in the
place of any such absent or disqualified member.
8
<PAGE>
ARTICLE VIII
THE CORPORATE AND INSTITUTIONAL SERVICES COMMITTEE
SECTION 8.1. The Corporate and Institutional
Services Committee. A Corporate and Institutional
Services Committee and its Chairman shall be
appointed each year by the Board of Directors
to review the policies, strategies, and
performance of the Corporate and Institutional
Services Business Unit of the Corporation and such
other related matters as may from time to time be
deemed appropriate by the Committee. The Committee
shall consist of no less than four Directors, none
of whom shall be an active officer of the
Corporation. The Committee shall meet upon the
call of the Chairman or any member of the
Committee. In the absence or disqualification of
a member of the Committee, the members thereof
present at any meeting and not disqualified from
voting, whether or not they constitute a quorum,
may unanimously appoint another member of the
Board of Directors to act at the meeting in the
place of any such absent or disqualified member.
ARTICLE IX
THE OFFICERS
SECTION 9.1. Number and Term of Office. The
officers of the Corporation shall be a Chairman of
the Board and a President, one of whom shall be
designated Chief Executive Officer by the Board
of Directors, and may also include one or more
Vice Chairmen, one or more Executive Vice
Presidents (any of whom may be designated a
Senior Executive Vice President), such additional
Vice Presidents with such designations, if any,
as may be determined by the Board of Directors, a
Secretary, and a Treasurer and one or more
Assistant Secretaries and Assistant Treasurers as
may be determined by the Board of Directors, and
such other officers as may from time to time be
appointed by the Board of Directors. Any two or more
offices may be held by the same person. The Chairman
of the Board, the President and the Vice Chairmen
shall be elected from among the Directors; the
other officers may be appointed by the Board of
Directors.
The officers of the Corporation shall be elected or
appointed annually by the Board of Directors at the
first meeting of the Board of Directors held after
each annual meeting of stockholders. Vacancies or
new offices may be filled at any time. Each officer
shall hold office until a successor shall have
been duly elected or appointed or until his or her
death or until he or she shall resign or shall have
been removed by the Board of Directors.
SECTION 9.2. Removal. An officer may be removed by
the Board of Directors whenever in its judgment the
best interests of the Corporation would be served
thereby.
SECTION 9.3. The Chairman of the Board. The
Chairman of the Board shall have such powers as
are vested in him or her by the Board of Directors,
by law or by these By-laws. The Chairman shall
preside at the meetings of the stockholders, of the
Board of Directors, and of the Executive Committee.
SECTION 9.4. The President. The President shall
have the powers and duties vested in him or her by
the Board of Directors, by law or by these By-laws.
In the absence or inability to act of the Chairman of
the Board, or upon the request of the Chairman of
the Board, the President shall preside at meetings of
the stockholders and of the Board of Directors and
shall have and exercise all of the powers and
duties of the Chairman of the Board.
9
<PAGE>
ARTICLE SECTION 9.5. The Chief Executive Officer. The
IX Chief Executive Officer of the Corporation shall
have, subject to the supervision and direction
of the Board of Directors or of the Executive
Committee, general supervision of the business,
property and affairs of the Corporation and the
powers vested in him or her by the Board of Directors,
by law or by these By-laws or which usually attach or
pertain to such office. Except in those instances
in which the authority to execute is expressly
delegated to another officer or agent of the
Corporation or a different mode of execution is
expressly prescribed by the Board of Directors,
the Chief Executive Officer may execute for the
Corporation any contracts, deeds, mortgages, bonds,
or other instruments which the Board of Directors
has authorized, and the Chief Executive Officer may
(without previous authorization by the Board of
Directors) execute such contracts and other
instruments as the conduct of the Corporation's
business in its ordinary course requires.
SECTION 9.6. The Vice Chairmen. A Vice Chairman
shall have such powers as are vested in him or her by
the Board of Directors, by law or by these By-laws. In
the absence or inability to act of the Chairman of
the Board and the President, or upon request of the
Chairman of the Board, or in his or her absence upon
request of the President, a Vice Chairman (or in
the event there be more than one Vice Chairman, the
Vice Chairmen in the order designated, or in the
absence of any designation, then in the order of
their election) shall preside at meetings of
stockholders and of the Board of Directors and
shall have and exercise all their powers and
duties.
SECTION 9.7. The Executive Vice Presidents. In the
absence of the Chairman of the Board, the President
and the Vice Chairmen or in the event of their
inability or refusal to act, the Executive Vice
President (or in the event there be more than one
Executive Vice President, the Executive Vice
Presidents in the order designated, or in the
absence of any designation, then in the order of
their election) shall perform the duties of the
Chairman of the Board, of the President, and of the
Vice Chairmen and when so acting, shall have all
the powers of and be subject to all the
restrictions upon the Chairman of the Board, the
President and the Vice Chairmen. Any Executive Vice
President may sign, with the Secretary or any
Assistant Secretary, certificates for shares of the
corporation; and shall perform such other duties as
from time to time may be assigned to him or her by
the Chairman of the Board, the President, a Vice
Chairman, the Board of Directors, or these By-laws.
SECTION 9.8. The Vice Presidents. The Vice
Presidents shall perform such duties as may be
assigned to them from time to time by the Chairman
of the Board, the President, the Vice Chairmen, or
the Board of Directors, or these By-laws. Any Vice
President may sign, with the Secretary or an
Assistant Secretary, certificates for shares of the
Corporation.
SECTION 9.9. The Treasurer. If required by the
Board of Directors, the Treasurer shall give a bond
for the faithful discharge of his or her duties in
such sum and with such surety or sureties as the
Board of Directors shall determine. The Treasurer
shall (a) have charge and custody of and be
responsible for all funds and securities of the
Corporation; receive and give receipts for moneys
due and payable to the Corporation from any source
whatsoever, and deposit all such moneys in the name
of the Corporation in such banks, trust companies or
other depositaries as shall be selected in accordance
with the provisions of Article X of these By-laws;
(b) in general perform all the duties incident to the
office of Treasurer and such other duties as from
time to time may be assigned to him or her by the
Chairman of the Board, the President, a Vice Chairman,
the Board of Directors, or these By-laws.
10
<PAGE>
ARTICLE SECTION 9.10. The Secretary. The Secretary shall
IX have the custody of the corporate seal and the
Secretary or any Assistant Secretary shall affix
the same to all instruments or papers requiring the
seal of the Corporation. The Secretary, or in his or
her absence, any Assistant Secretary, shall see that
proper notices are sent of the meetings of the
stockholders, the Board of Directors and the
Executive Committee, and shall see that all proper
notices are given, as required by these By-laws.
The Secretary or any Assistant Secretary shall keep
the minutes of all meetings of stockholders and
Directors and all committees which may request
their services.
SECTION 9.11. Assistant Treasurers and Assistant
Secretaries. The Assistant Treasurers shall
respectively, if required by the Board of
Directors, give bonds for the faithful discharge of
their duties in such sums and with such sureties as
the Board of Directors shall determine. The
Assistant Secretaries as thereunto authorized by
the Board of Directors may sign with the Chairman
of the Board, the President, a Vice Chairman, or an
Executive Vice President certificates for shares of
the Corporation, the issue of which shall have been
authorized by a resolution of the Board of
Directors. The Assistant Treasurers and Assistant
Secretaries, in general, shall perform such duties
as shall be assigned to them by the Treasurer or
the Secretary, respectively, or by the Chairman of
the Board, the President, a Vice Chairman, the
Board of Directors, or these By-laws.
SECTION 9.12. Salaries. The salaries of the
officers shall be fixed from time to time by the
Board of Directors and no officer shall be
prevented from receiving such salary by reason of
the fact that the officer is also a director of the
Corporation.
ARTICLE X
CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 10.1. Contracts. The Board of Directors may
authorize any officer or officers, agent or agents,
to enter into any contract or execute and deliver
any instrument in the name of and on behalf of the
Corporation, and such authority may be general or
confined to specific instances.
SECTION 10.2. Loans. No loans shall be contracted on
behalf of the Corporation and no evidences of
indebtedness shall be issued in its name unless
authorized by a resolution of the Board of
Directors. Such authority may be general or
confined to specific instances.
SECTION 10.3. Checks, Drafts, etc. All checks,
drafts or other orders for the payment of money,
notes or other evidences of indebtedness issued in
the name of the Corporation, shall be signed by
such officer or officers, agent or agents of the
Corporation and in such manner as shall from
time to time be determined by resolution of the
Board of Directors.
SECTION 10.4. Deposits. All funds of the Corporation
not otherwise employed shall be deposited from time
to time to the credit of the Corporation in such
banks, trust companies or other depositaries as the
Board of Directors may select.
11
<PAGE>
ARTICLE SECTION 10.5. Power to Execute Proxies. The Chairman
X of the Board, the President, a Vice Chairman, or
any Executive Vice President may execute proxies on
behalf of the Corporation with respect to the
voting of any shares of stock owned by the
Corporation.
ARTICLE XI
CERTIFICATES FOR SHARES
AND THEIR TRANSFER
SECTION 11.1. Certificates for Shares. Certificates
representing shares of the Corporation shall be in
such form as may be determined by the Board of
Directors. Such certificates shall be signed by the
Chairman of the Board, the President, a Vice
Chairman, an Executive Vice President or a Vice
President and by the Secretary or an Assistant
Secretary and shall be sealed with the seal of the
Corporation. The seal may be a facsimile. If a
stock certificate is countersigned (i) by a
transfer agent other than the Corporation or its
employee, or (ii) by a registrar other than the
Corporation or its employee, any other signature on
the certificate may be a facsimile. In case any
officer, transfer agent or registrar who has signed
or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer,
transfer agent, or registrar before such
certificate is issued, it may be issued by the
Corporation with the same effect as if he or she were
such officer, transfer agent or registrar at the date
of issue. All certificates for shares shall be
consecutively numbered or otherwise identified. The
name of the person to whom the shares represented
thereby are issued, with the number of shares and
date of issue, shall be entered on the books of the
Corporation.
All certificates surrendered to the Corporation for
transfer shall be cancelled and no new certificates
shall be issued until the former certificate for a
like number of shares shall have been surrendered
and cancelled, except that in case of a lost,
destroyed or mutilated certificate a new one may be
issued therefor upon such terms and indemnity to
the Corporation as the Board of Directors may
prescribe.
SECTION 11.2. Transfers of Shares. Transfers of
shares of the Corporation shall be made only on the
books of the Corporation by the holder of record
thereof or by the holder's legal representative, who
shall furnish proper evidence of authority to transfer,
or by the holder's attorney thereunto authorized by
power of attorney duly executed and filed with the
Secretary of the Corporation, and on surrender for
cancellation of the certificate for such shares.
The person in whose name shares stand on the books
of the Corporation shall be deemed the owner
thereof for all purposes as regards the
Corporation.
ARTICLE XII
FISCAL YEAR
SECTION 12.1. Fiscal Year. The fiscal year of the
Corporation shall begin on the first day of January
in each year and end on the last day of December in
each year.
ARTICLE XIII
SEAL
SECTION 13.1. Seal. The Board of Directors shall
provide a corporate seal which shall be in the form
of a circle and shall have inscribed thereon the
name of the Corporation.
12
<PAGE>
ARTICLE XIV
WAIVER OF NOTICE
SECTION 14.1. Waiver of Notice. Whenever any notice
whatever is required to be given under the
provisions of these By-laws or under the provisions
of the Restated Certificate of Incorporation or
under the provisions of the General Corporation Law
of Delaware, waiver thereof in writing, signed by
the person or persons entitled to such notice, whether
before or after the time stated therein, shall be
deemed equivalent to the giving of such notice.
Attendance of any person at a meeting for which any
notice whatever is required to be given under the
provisions of these By-laws, the Restated
Certificate of Incorporation or the General
Corporation Law of Delaware shall constitute a
waiver of notice of such meeting, except when the
person attends for the express purpose of
objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is
not lawfully called or convened.
ARTICLE XV
INDEMNIFICATION
SECTION 15.1. Indemnification Request. A director,
officer or other person (the ``Indemnitee'') who
seeks indemnification (other than advancement of
expenses pursuant to Section 15.12 hereof), in
respect of amounts paid or owing as expenses,
judgments, fines, or in settlement, shall submit a
written request for indemnification (the
``Indemnification Request'') to the Board of
Directors of the Corporation by delivering or
mailing the same, registered or certified mail, to
the Board of Directors c/o the Secretary of the
Corporation at the Corporation's principal
executive offices. If mailed, the Indemnification
Request shall be deemed made 48 hours after
depositing the same in the United States mail
addressed as aforesaid.
SECTION 15.2. Determination of Indemnification
Request. The determination of the Indemnitee's
entitlement to indemnification as set forth in the
Indemnification Request shall be made in the
specific case, at the expense of the Corporation,
as set forth in paragraph 5 of Article Eighth of
the Restated Certificate of Incorporation. However,
in the event a Change of Control (as hereinafter
defined) shall have occurred, such determination
shall be made by Independent Counsel in a written
opinion to the Board of Directors, a copy of which
shall be delivered to the Indemnitee.
SECTION 15.3. Presumption of Entitlement;
Conclusive Effect of Findings of Fact and Law;
Other Procedures. The termination with respect to
the Indemnitee of any action, suit or proceeding or
of any claim, issue or matter therein, by judgment,
order, settlement or conviction, or upon a plea of
nolo contendere or its equivalent, shall not of
itself adversely affect the right of the Indemnitee
to indemnification or create a presumption that the
Indemnitee did not meet the standard of conduct
required by Article Eighth of the Restated
Certificate of Incorporation for indemnification.
If the Indemnitee is a person referred to in
paragraphs 1, 2 or 3 Article Eighth of the Restated
Certificate of Incorporation, the Indemnitee shall
be presumed to have met the required standard of
conduct but only to the extent not contrary to any
final findings of fact or law made in any action,
suit or proceeding to which the Indemnitee is or
was a party and for which indemnification is
requested. The person, persons or entity making the
determination of the Indemnitee's entitlement to
indemnification shall be entitled to rely upon all
such findings of fact and law made known to such
person, persons or entity. Such person, persons or
entity may consider such other matters as they or
it deem appropriate, shall not be required to
receive or hear evidence, oral presentations,
briefs or other submission, shall not be required
to hold hearings, and shall not otherwise be
subject to any rules of evidence or procedure
applicable to judicial or other proceedings.
13
<PAGE>
ARTICLE SECTION 15.4. Cooperation and Expenses. The
XV Indemnitee shall cooperate with the person, persons
or entity making the determination with respect to
the Indemnitee's entitlement to indemnification,
including providing to such person, persons or
entity upon reasonable advance request, any
documentation or information which is not
privileged or otherwise protected from disclosure
and which is reasonably available to the Indemnitee
and reasonably necessary to such determination. Any
costs or expenses (including attorneys' fees and
disbursements) reasonably incurred by the
Indemnitee in so cooperating with the person,
persons or entity making such determination shall
be borne by the Corporation irrespective of the
determination as to the Indemnitee's entitlement to
indemnification.
SECTION 15.5. Selection of Independent Counsel. If
a determination of the Indemnitee's entitlement to
indemnification is to be made by Independent Counsel,
the Independent Counsel shall be selected as provided
in this Section 15.5. If a Change of Control shall
not have occurred, Independent Counsel shall be
selected by a majority vote of a quorum of the
Board of Directors consisting of Disinterested
Directors. If a Change of Control shall have
occurred, or if a quorum shall decline or fail to
select Independent Counsel within five business days
after having directed, pursuant to paragraph 5(b)
of Article Eighth of the Restated Certificate of
Incorporation, the determination of the
Indemnitee's entitlement to indemnification to be
submitted to Independent Counsel, then Independent
Counsel shall be selected by the law firm regularly
or most frequently engaged by the Corporation
during the preceding three years for representation
or counseling in connection with general corporate
matters. In any event, Independent Counsel shall be
selected from among those Chicago, Illinois, or
Delaware law firms having a significant and
continuous practice in the field of corporate law
but excluding any firm that: (i) has, within the
preceding three years represented the Corporation,
the Indemnitee or affiliates of either in any
significant matter; (ii) has, within the preceding
three years, represented any other party in any
significant judicial or other proceeding against or
in opposition to the Corporation, the Indemnitee or
any affiliate of either; (iii) had any involvement
of any significant nature in or with respect to the
claim for which indemnification is requested; or
(iv) has any other material conflict of interest in
being engaged as Independent Counsel.
SECTION 15.6. Time for Determination. The
determination of the Indemnitee's entitlement to
indemnification shall be made within 60 days after
such Indemnitee shall have submitted all such
additional information, if any, as shall have been
reasonably requested during the 30-day period
following the initial submission of the
Indemnification Request to the Board of Directors
pursuant to Section 15.1 hereof. The foregoing
notwithstanding, in the event that the claim with
respect to which indemnification is requested is
the subject of a judicial, government or other
proceeding, the Board of Directors, stockholders or
Independent Counsel, as the case may be, may defer
their determination until 60 days after any such
proceeding shall have been finally adjudicated or
terminated (by settlement or otherwise) and all
periods for appeal, rehearing or reinstitution of
such proceeding (whether in a different forum or
otherwise) have expired.
14
<PAGE>
ARTICLE SECTION 15.7. Failure To Make Determination;
XV Remedies For Enforcement. If a determination of the
Indemnitee's entitlement to indemnification shall
not be made within the period specified in these
By-laws, unless due to a material failure of the
Indemnitee to comply with his or her obligations
under Section 15.4 hereof, then the Indemnitee
shall be entitled to indemnification to the extent
and in the manner set forth in the Indemnification
Request. The Indemnitee may only enforce his or her
rights to indemnification, whether pursuant to a
determination that the Indemnitee is entitled to
indemnification or pursuant to this Section 15.7,
in any judicial proceeding brought, at the election
of the Indemnitee, in any court having jurisdiction
within the State of Delaware, the State of
Illinois, or the state in which the Corporation
shall then have its principal executive offices.
The Indemnitee shall be entitled to all expenses
actually and reasonably incurred by him or her in
connection with the successful enforcement of the
Indemnitee's right to indemnification.
SECTION 15.8. Appeal of Adverse Determination. In
the event that a determination shall be made that
the Indemnitee is not entitled to indemnification,
in whole or in part, the Indemnitee may only
institute an action in any court having
jurisdiction within the State of Delaware, the
State of Illinois, or the state in which the
Corporation shall have its principal executive
offices to establish the Indemnitee's right to
indemnification. Any such proceeding shall be
conducted in all respects as a de novo
determination on the merits and any such prior
determination made pursuant to these By-laws that
the Indemnitee is not entitled to indemnification
shall not constitute a presumption that the
Indemnitee is not entitled to indemnification.
SECTION 15.9. Burden of Proof. In any judicial
proceeding regarding the Indemnitee's right or
entitlement to indemnification or advancement of
expenses, the Corporation shall have the burden of
proving that any Indemnitee who is a person
referred to in paragraphs 1, 2 or 3 of Article
Eighth of the Restated Certificate of Incorporation
is not entitled to indemnification or advancement
of expenses as the case may be, subject, however,
to principles of res judicata and collateral
estoppel relating to prior judicial proceedings to
which the Indemnitee is or was a party. In cases in
which the Indemnitee is not a person referred to in
paragraphs 1, 2 or 3 of Article Eighth of the
Restated Certificate of Incorporation, the
Indemnitee shall have the burden of proving he or
she is entitled to indemnification or the
advancement of expenses.
SECTION 15.10. Definition of ``Disinterested
Director.'' A Disinterested Director shall mean any
director who (i) was not a party to the claim or
proceeding with respect to which indemnification is
requested; (ii) has not submitted an
Indemnification Request or a request for
advancement of expenses on his or her own behalf
that has not been finally resolved; or (iii) does
not have any direct and material financial or other
personal interest in the determination of the
Indemnification Request.
SECTION 15.11. Definition of ``Change of Control.''
A Change of Control shall be deemed to have
occurred on the earliest of:
(a) The receipt by the Corporation of a Schedule
13D or other statement filed under Section 13(d) of
the Securities Exchange Act of 1934, as amended
(the ``Exchange Act''), indicating that any entity,
person, or group has acquired beneficial ownership,
as that term is defined in Rule 13d-3 under the
Exchange Act, of more than 30% of the outstanding
capital stock of the Corporation entitled to vote
for the election of directors (``voting stock'');
15
<PAGE>
ARTICLE (b) The commencement by an entity, person, or group
XV (other than the Corporation or a subsidiary of the
Corporation) of a tender offer or an exchange offer
for more than 20% of the outstanding voting stock
of the Corporation;
(c) The effective time of (i) a merger or
consolidation of the Corporation with one or more
other corporations as a result of which the holders
of the outstanding voting stock of the Corporation
immediately prior to such merger or consolidation
hold less than 80% of the voting stock of the
surviving or resulting corporation, or (ii) a transfer
of substantially all of the property of the
Corporation other than to an entity of which the
Corporation owns at least 80% of the voting stock; or
(d) The election to the Board of Directors of the
Corporation, without the recommendation or approval
of the incumbent Board of Directors of the
Corporation, of the lesser of (i) three directors
or (ii) directors constituting a majority of the
number of directors of the Corporation then in
office.
SECTION 15.12. Advancement of Expenses. Expenses
as may be incurred by a person referred to in
paragraphs 1, 2 or 3 of Article Eighth of the
Restated Certificate of Incorporation in defending
a civil or criminal action, suit or proceeding
shall be paid by the Corporation in advance of the
final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on
behalf of such person to repay such amount if it
shall ultimately be determined that he or she is
not entitled to be indemnified by the Corporation
as authorized in such Article Eighth. Such expenses
as may be incurred by other employees and agents
may be so paid on such terms and conditions, if
any, as the Board of Directors deems appropriate.
For purposes of the foregoing, a determination that
a person referred to in paragraphs 1, 2 or 3 of
Article Eighth of the Restated Certificate of
Incorporation is not entitled to be indemnified by
the Corporation shall be made in the manner
hereinbefore provided for the determination of an
Indemnification Request; provided, however, that
the Board of Directors may initiate such
determination whenever it shall deem the same to be
appropriate. In connection with such determination,
such person shall be subject to all requirements of
these By-laws imposed on an ``Indemnitee'' in
respect of a determination made pursuant to Section
15.2 hereof.
SECTION 15.13. Personal Liability of Directors. No
director of the Corporation shall be personally
liable to any person seeking indemnification or
advancement of expenses for any determination, act
or omission in connection therewith.
ARTICLE XVI
AMENDMENTS
SECTION 16.1. Amendments. These By-laws may be
altered, amended or repealed and new By-laws may be
adopted at any meeting of the Board of Directors of
the Corporation by the affirmative vote of a
majority of the members of the Board. The By-laws
may also be amended or repealed, or new By-laws may
be adopted, by action taken by the stockholders of
the Corporation.
16
<PAGE>
Exhibit Number (4)(i)
To 9/30/95 Form 10-Q
UNLESS THIS SENIOR NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE BANK
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SENIOR
NOTE ISSUED UPON REGISTRATION OR TRANSFER OF, OR IN EXCHANGE FOR, OR IN LIEU OF,
THIS SENIOR NOTE IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
IF THIS SENIOR NOTE IS ISSUED WITH "ORIGINAL ISSUE DISCOUNT" FOR PURPOSES
OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, THE FOLLOWING
SHALL BE COMPLETED: THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR PURPOSES
OF APPLYING SECTIONS 1272, 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE
CODE OF 1986, AS AMENDED, TO THIS SENIOR NOTE. THE ISSUE DATE OF THIS SENIOR
NOTE IS _______________. THE ISSUE PRICE OF THIS SENIOR NOTE IS _____% OF ITS
PRINCIPAL AMOUNT. THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THIS SENIOR NOTE IS
$______________ PER $1,000 OF THE INITIAL PRINCIPAL AMOUNT, THE YIELD TO
MATURITY IS _____%, AND THE AMOUNT OF THE ORIGINAL ISSUE DISCOUNT ALLOCABLE TO
THE INITIAL SHORT ACCRUAL PERIOD, IF ANY, IS $_________ PER $1,000 OF THE
INITIAL PRINCIPAL AMOUNT, DETERMINED ON THE BASIS OF THE EXACT METHOD.
No. SEN FXR-______________ REGISTERED
CUSIP NO.: ________________________
THE NORTHERN TRUST COMPANY
GLOBAL SENIOR BANK NOTE
(FIXED RATE)
ORIGINAL ISSUE DATE: PRINCIPAL AMOUNT:
INTEREST RATE: _______% MATURITY DATE:
INTEREST PAYMENT REGULAR RECORD DATES (If other than the April 1
DATES: or October 1, prior to each Interest Payment
Date):
INITIAL REDEMPTION DATE: INITIAL REDEMPTION
PERCENTAGE:
ANNUAL REDEMPTION HOLDER'S OPTIONAL
PERCENTAGE REDUCTION: REPAYMENT DATE(S):
<PAGE>
ORIGINAL ISSUE OID AMOUNT:
DISCOUNT NOTE:
Yes:_____ No:_____ DEFAULT RATE: ____ %
OTHER PROVISIONS:
The Northern Trust Company, an Illinois banking corporation (the "Bank"),
for value received, hereby promises to pay to ____________________ or registered
assigns, the principal sum of _________________ United States Dollars on the
Maturity Date specified above and to pay interest thereon from the Original
Issue Date specified above or from the most recent interest payment date to
which interest on this Senior Note (or any predecessor Senior Note) has been
paid or duly provided for, semi-annually on April 15 and October 15 of each year
(unless otherwise specified on the face hereof) (each, an "Interest Payment
Date") and at maturity or upon earlier redemption or repayment, if applicable,
commencing on the first Interest Payment Date next succeeding the Original Issue
Date (or, if the Original Issue Date is between a Regular Record Date and the
Interest Payment Date immediately following such Regular Record Date, on the
second Interest Payment Date following the Original Issue Date), at the Interest
Rate per annum specified above, until the principal hereof is paid or made
available for payment, and (to the extent that the payment of such interest
shall be legally enforceable) at such Interest Rate (or the Default Rate per
annum specified above) on any overdue principal and premium, if any, and on any
overdue installment of interest. Notwithstanding the foregoing, if this Senior
Note has a maturity of one year or less, interest will be paid only at maturity.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will be paid to the person in whose name this Senior Note
(or any predecessor Senior Note) is registered at the close of business on the
Regular Record Date for such interest, which shall be the April 1 and October 1
(whether or not a Business Day (as defined below)), as the case may be, next
preceding the applicable Interest Payment Date (unless otherwise specified on
the face hereof); provided, however, that interest payable at maturity or upon
earlier redemption or repayment, if applicable, will be payable to the person to
whom principal shall be payable. Any such interest not so punctually paid or
duly provided for shall forthwith cease to be payable to the holder on such
Regular Record Date and may either be paid to the person in whose name this
Senior Note (or any predecessor Senior Note) is registered at the close of
business on a special record date for the payment of such defaulted interest
(the "Special Record Date") to be fixed by the Bank, notice of which shall be
given to the holders of Senior Notes not less than 10 calendar days prior to
such Special Record Date, or be paid at any time in any other lawful manner.
-2-
<PAGE>
Payment of principal of, and premium, if any, and interest on, this Senior
Note will be made in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
The Bank will at all times appoint and maintain a paying agent (the "Paying
Agent") authorized by the Bank to pay the principal of, and premium, if any, and
interest on, this Senior Note on behalf of the Bank and having an office or
agency (the "Paying Agent Office") in The City of New York or the City of
Chicago, Illinois (the "Place of Payment"), where this Senior Note may be
presented or surrendered for payment and where notices, designations or requests
in respect of payments with respect to this Senior Note may be served. The Bank
has initially appointed itself as the Paying Agent, with the Paying Agent Office
currently located at 50 South LaSalle Street (Level BB-A), Chicago, Illinois
60675, Attention: Securities Services.
THIS SENIOR NOTE IS A DIRECT, UNCONDITIONAL, UNSECURED AND UNSUBORDINATED
GENERAL OBLIGATION OF THE BANK AND DOES NOT EVIDENCE A DEPOSIT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. THIS
SENIOR NOTE RANKS PARI PASSU WITH ALL OTHER UNSECURED AND UNSUBORDINATED
OBLIGATIONS OF THE BANK, EXCEPT DEPOSITS AND OTHER OBLIGATIONS THAT ARE SUBJECT
TO A PRIORITY OR PREFERENCE. UNDER APPLICABLE LAW, CLAIMS OF CERTAIN CREDITORS,
INCLUDING HOLDERS OF DEPOSITS IN THE BANK, WOULD BE ENTITLED TO PRIORITY OVER
CLAIMS OF UNSECURED GENERAL CREDITORS OF THE BANK, INCLUDING THE HOLDER OF THIS
SENIOR NOTE, IN THE EVENT OF A LIQUIDATION OR OTHER RESOLUTION OF THE BANK.
Payment of the principal of, and premium, if any, and interest on, this
Senior Note due at maturity or upon earlier redemption or repayment, if
applicable, will be made in immediately available funds upon presentation and
surrender of this Senior Note to the Paying Agent at the Paying Agent Office in
the Place of Payment; provided that this Senior Note is presented to the Paying
Agent in time for the Paying Agent to make such payment in accordance with its
normal procedures. Payments of interest on this Senior Note (other than at
maturity or upon earlier redemption or repayment) will be made by wire transfer
to such account as has been appropriately designated to the Paying Agent by the
person entitled to such payments.
This Senior Note is one of a duly authorized issue of Senior Bank Notes due
from 30 days to fifteen years from date of issue of the Bank (herein called the
"Senior Notes").
Payments of interest hereon on any Interest Payment Date will include
interest accrued to, but excluding, such Interest Payment Date. Interest hereon
shall be computed on the basis of a 360-day year of twelve 30-day months,
provided that if this
-3-
<PAGE>
Senior Note has a maturity of one year or less, interest hereon shall be
computed on the basis of actual days divided by 360.
If any Interest Payment Date, Maturity Date or date of earlier redemption
or repayment of this Senior Note falls on a day which is not a Business Day, the
related payment of principal, premium, if any, or interest shall be made on the
next succeeding Business Day with the same force and effect as if made on the
date such payment were due, and no interest shall accrue on the amount so
payable for the period from and after such Interest Payment Date, Maturity Date
or date of earlier redemption or repayment, as the case may be. "Business Day"
means any day that is not a Saturday or Sunday and that is not a day on which
banking institutions in The City of New York or the City of Chicago, Illinois
generally are authorized or obligated by law or executive order to close.
This Senior Note will not be subject to any sinking fund. If so provided on
the face of this Senior Note, this Senior Note may be redeemed by the Bank on
and after the Initial Redemption Date, if any, specified on the face hereof. If
no Initial Redemption Date is specified on the face hereof, this Senior Note may
not be redeemed prior to the Maturity Date. On and after the Initial Redemption
Date, if any, this Senior Note may be redeemed at any time either in whole or in
part from time to time in increments of $1,000 (provided that any remaining
principal amount hereof shall be at least $250,000) at the option of the Bank at
the applicable Redemption Price (as defined below), together with accrued and
unpaid interest hereon at the applicable rate borne by this Senior Note to the
date of redemption (each such date, a "Redemption Date"), on written notice
given not more than 60 nor less than 30 calendar days prior to the Redemption
Date by the Bank to the registered holder hereof. Whenever less than all the
Senior Notes at any time outstanding are to be redeemed, the terms of the Senior
Notes to be so redeemed shall be selected by the Bank. If less than all the
Senior Notes with identical terms at any time outstanding are to be redeemed,
the Senior Notes to be so redeemed shall be selected by the Paying Agent by lot
or in any usual manner approved by it. In the event of redemption of this
Senior Note in part only, a new Senior Note for the unredeemed portion hereof
shall be issued in the name of the holder hereof upon the surrender hereof.
The "Redemption Price" shall initially be the Initial Redemption Percentage
specified on the face hereof of the principal amount of this Senior Note to be
redeemed and shall decline at each anniversary of the Initial Redemption Date
specified on the face hereof by the Annual Redemption Percentage Reduction, if
any, specified on the face hereof, of the principal
-4-
<PAGE>
amount to be redeemed until the Redemption Price is 100% of such principal
amount.
This Senior Note may be subject to repayment at the option of the holder
hereof in accordance with the terms hereof on the Holder's Optional Repayment
Date(s), if any, specified on the face hereof. If no Holder's Optional
Repayment Date is specified on the face hereof, this Senior Note will not be so
repayable at the option of the holder hereof prior to maturity. On any Holder's
Optional Repayment Date, this Senior Note will be repayable in whole or in part
in increments of $1,000 (provided that any remaining principal amount hereof
will be at least $250,000) at the option of the holder hereof at a repayment
price equal to 100% of the principal amount to be repaid, together with accrued
and unpaid interest hereon payable to the date of repayment. For this Senior
Note to be repaid in whole or in part at the option of the holder hereof on a
Holder's Optional Repayment Date, this Senior Note must be given, with the form
entitled "Option to Elect Repayment" below duly completed, to the Paying Agent
at its offices located at 50 South LaSalle Street (Level BB-A), Chicago,
Illinois 60675, Attention: Securities Services, or at such other address
which the Bank shall from time to time notify the holders of the Senior Notes,
not more than 60 nor less than 30 days prior to such Holder's Optional Repayment
Date. Exercise of such repayment option by the holder hereof shall be
irrevocable.
If this Senior Note is an Original Issue Discount Note and if an Event of
Default with respect to the Senior Notes shall have occurred and be continuing,
the Default Amount (as defined hereafter) of this Senior Note may be declared
due and payable in the manner and with the effect provided herein. The "Default
Amount" shall be equal to the adjusted issue price as of the first day of the
accrual period as determined under Proposed Treasury Regulation Section 1.1272-
1(e) (or successor regulation) under the United States Internal Revenue Code of
1986, as amended, in which the date of acceleration occurs increased by the
daily portion of the original issue discount for each day in such accrual period
ending on the date of acceleration, as determined under Proposed Treasury
Regulation Section 1.1272-1(c) (or successor regulation) under the United States
Internal Revenue Code of 1986, as amended. Upon payment of (i) the amount of
principal or premium, if any, so declared due and payable and (ii) interest on
any overdue principal and overdue interest or premium, if any, (in each case to
the extent that the payment of such interest shall be legally enforceable), all
of the Bank's obligations in respect of the payment of the principal of, and
interest or premium, if any, on, this Senior Note shall terminate.
-5-
<PAGE>
In case any Senior Note shall at any time become mutilated, destroyed, lost
or stolen and such Senior Note or evidence satisfactory to the Bank of the loss,
theft or destruction thereof (together with indemnity satisfactory to the Bank
and such other documents or proof as may be required in the premises) shall be
delivered to the Bank, a new Senior Note of like tenor will be issued by the
Bank in exchange for the Senior Note so mutilated, or in lieu of the Senior Note
so destroyed or lost or stolen. All expenses and reasonable charges associated
with procuring the indemnity referred to above and with the preparation,
authentication and delivery of a new Senior Note shall be borne by the holder of
the Senior Note so mutilated, destroyed, lost or stolen. If any Senior Note
which has matured or is about to mature shall become mutilated, destroyed, lost
or stolen, the Bank may, instead of issuing a substitute Senior Note, pay or
authorize the payment of the same (without surrender thereof except in the case
of a mutilated Senior Note) upon compliance by the holder thereof with the
provisions of this paragraph.
No recourse shall be had for the payment of the principal of, premium, if
any, or interest on, this Senior Note, for any claim based hereon, or otherwise
in respect hereof, against any shareholder, employee, officer or director, as
such, past, present or future, of the Bank or of any successor corporation,
either directly or through the Bank or any successor corporation, whether by
virtue of any constitution, statute or rule of law or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and part of the consideration for the issue hereof, expressly waived and
released.
The occurrence of any of the following events shall constitute an "Event of
Default" with respect to this Senior Note: (i) default in the payment of any
interest with respect to this Senior Note when due, which continues for 30 days;
(ii) default in the payment of any principal of, or premium, if any, on, this
Senior Note when due; (iii) the entry by a court having jurisdiction in the
premises of (a) a decree or order for relief in respect of the Bank in an
involuntary case or proceeding under any applicable United States federal or
state bankruptcy, insolvency, reorganization or other similar law or (b) a
decree or order appointing a conservator, receiver, liquidator, assignee,
trustee, sequestrator or any other similar official of the Bank, or of
substantially all of the property of the Bank, or ordering the winding up or
liquidation of the affairs of the Bank, and the continuance of any such decree
or order for relief or any such other decree or order unstayed and in effect for
a period of 60 consecutive days; or (iv) the commencement by the Bank of a
voluntary case or proceeding under any applicable United States federal or state
bankruptcy, insolvency,
-6-
<PAGE>
reorganization or other similar law or of any other case or proceeding to be
adjudicated as bankrupt or insolvent, or the consent by the Bank to the entry of
a decree or order for relief in an involuntary case or proceeding under any
applicable United States federal or state bankruptcy, insolvency, reorganization
or other similar law or to the commencement of any bankruptcy or insolvency case
or proceeding, or the filing by the Bank of a petition or answer or consent
seeking reorganization or relief under any applicable United States federal or
state law, or the consent by the Bank to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or similar official of the Bank or of
substantially all of the property of the Bank, or the making by the Bank of an
assignment for the benefit of creditors, or the taking of corporate action by
the Bank in furtherance of any such action. If an Event of Default shall occur
and be continuing, the holder of this Senior Note may declare the principal
amount of, and accrued interest and premium, if any, on, this Senior Note due
and payable immediately by written notice to the Bank. Upon such declaration and
notice, such principal amount, accrued interest and premium, if any, shall
become due and payable seven calendar days after such notice. Any Event of
Default with respect to this Senior Note may be waived by the holder hereof.
No provision of this Senior Note shall alter or impair the obligation of
the Bank, which is absolute and unconditional, to pay the principal of, and
premium, if any, and interest on, this Senior Note in U.S. dollars at the times,
places and rate herein prescribed.
The Bank shall cause to be kept at the corporate trust office of the Senior
Note Registrar designated below a register (the register maintained in such
corporate trust office or any other office or agency of the Bank in the Place of
Payment herein referred to as the "Senior Note Register") in which, subject to
such reasonable regulations as it may prescribe, the Bank shall provide for the
registration of the Senior Notes and of transfers of the Senior Notes. The Bank
is hereby initially appointed "Senior Note Registrar" for the purpose of
registering the Senior Notes and transfers of the Senior Notes as herein
provided.
The transfer of this Senior Note is registrable in the Senior Note
Register, upon surrender of this Senior Note for registration of transfer at the
office or agency of the Bank in the Place of Payment, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the Bank
and the Paying Agent duly executed by, the holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Senior Notes of like tenor,
of authorized denominations and for the same aggregate principal amount, will be
issued to the
-7-
<PAGE>
designated transferee or transferees. Notwithstanding the foregoing, the Bank
shall not be required to register the transfer of any Senior Note that has been
called for redemption during a period beginning at the opening of business
fifteen calendar days before the day of mailing of a notice of such redemption
and ending at the close of business on the day of such mailing.
No service charge shall be made for any such registration of transfer or
exchange, but the Bank may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection therewith.
The Senior Notes are issuable only in registered form without coupons in
minimum denominations of $250,000 and any integral multiple of $1,000 in excess
thereof. Each owner of a beneficial interest in this Senior Note is required to
hold a beneficial interest in $250,000 principal amount or any integral multiple
of $1,000 in excess thereof of this Senior Note at all times.
Prior to due presentment of this Senior Note for registration of transfer,
the Bank, the Paying Agent or any agent of the Bank or the Paying Agent may
treat the person in whose name this Senior Note is registered as the owner
hereof for all purposes, whether or not this Senior Note be overdue, and neither
the Bank, the Paying Agent nor any such agent shall be affected by notice to the
contrary.
All notices to the Bank under this Senior Note shall be in writing and
addressed to the Bank at 50 South LaSalle Street (Level BB-A), Chicago, Illinois
60675, Attention: Securities Services, or to such other address of the Bank as
the Bank may notify the holders of the Senior Notes.
This Senior Note shall be governed by, and construed in accordance with,
the laws of the State of Illinois.
IN WITNESS WHEREOF, the Bank has caused this instrument to be duly
executed.
THE NORTHERN TRUST COMPANY
By:
------------------------------
Authorized Signatory
-8-
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
the within Senior Note, shall be construed as though they were written out in
full according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and
not as tenants in common
UNIF GIFT MIN ACT - _______________ Custodian ______________
(Cust) (Minor)
under Uniform Gifts to Minors Act
__________________________
(State)
Additional abbreviations may also be used
though not in the above list.
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto ___________________________________________________________________________
________________________________________________________________________________
PLEASE INSERT SOCIAL SECURITY NUMBER OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
_____________________________________
_____________________________________
________________________________________________________________________________
(Please print or typewrite name and address,
including postal zip code, of assignee)
________________________________________________________________________________
the within Senior Note and all rights thereunder, and hereby irrevocably
constitutes and appoints _______________________________________________________
________________________________________________________________________________
________________________________________________________________________________
to transfer said Senior Note on the books of the Bank, with full power of
substitution in the premises.
Dated:_____________________
__________________________________________
Notice: The signature to this assignment
must correspond with the name as written
upon the face of the within Senior Note in
every particular, without alteration or
enlargement or any change whatsoever.
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the Bank to
repay this Senior Note (or portion hereof specified below) pursuant to its terms
and at a price equal to 100% of the principal amount hereof to be repaid,
together with accrued and unpaid interest hereon, payable to the date of
repayment, to the undersigned, at ______________________________________________
________________________________________________________________________________
(Please print or typewrite name and address of the undersigned)
For this Senior Note to be repaid, the undersigned must give to the Paying
Agent at its offices located at 50 South LaSalle Street (Level BB-A), Chicago,
Illinois 60675, Attention: Securities Services, or at such other place or places
of which the Bank shall from time to time notify the holders of the Senior
Notes, not more than 60 days nor less than 30 days prior to the date of
repayment, this Senior Note with this "Option to Elect Repayment" form duly
completed.
If less than the entire principal amount of this Senior Note is to be
repaid, specify the portion hereof (which shall be increments of $1,000) which
the holder elects to have repaid and specify the denomination or denominations
(which shall be $250,000 or an integral multiple of $1,000 in excess thereof) of
the Senior Notes to be issued to the holder for the portion of this Senior Note
not being repaid (in the absence of any such specification, one such Senior Note
will be issued for the portion not being repaid):
$___________________
Dated:______________ __________________________________________
NOTICE: The signature on this "Option to
Elect Repayment" form must correspond with
the name as written upon the face of the
within Senior Note in every particular,
without alteration or enlargement or any
change whatsoever.
<PAGE>
Exhibit Number (4)(ii)
To 9/30/95 Form 10-Q
UNLESS THIS SENIOR NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE BANK
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SENIOR
NOTE ISSUED UPON REGISTRATION OF TRANSFER OF, OR IN EXCHANGE FOR, OR IN LIEU OF,
THIS SENIOR NOTE IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
IF THIS SENIOR NOTE IS ISSUED WITH "ORIGINAL ISSUE DISCOUNT" FOR PURPOSES
OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, THE FOLLOWING
SHALL BE COMPLETED: THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR PURPOSES OF
APPLYING SECTIONS 1272, 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE CODE
OF 1986, AS AMENDED, TO THIS SENIOR NOTE. THE ISSUE DATE OF THIS SENIOR NOTE IS
_____________. THE ISSUE PRICE OF THIS SENIOR NOTE IS _____% OF ITS PRINCIPAL
AMOUNT. THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THIS SENIOR NOTE IS $_________
PER $1,000 OF THE INITIAL PRINCIPAL AMOUNT, THE YIELD TO MATURITY IS ____%, AND
THE AMOUNT OF THE ORIGINAL ISSUE DISCOUNT ALLOCABLE TO THE INITIAL SHORT ACCRUAL
PERIOD, IF ANY, IS $_____ PER $1,000 OF THE INITIAL PRINCIPAL AMOUNT, DETERMINED
ON THE BASIS OF THE EXACT METHOD.
No. SEN FLR-______________ REGISTERED
CUSIP NO.: ________________________
THE NORTHERN TRUST COMPANY
GLOBAL SENIOR BANK NOTE
(FLOATING RATE)
ORIGINAL ISSUE DATE: PRINCIPAL AMOUNT:
INITIAL INTEREST RATE: ______% MATURITY DATE:
INTEREST RATE BASIS: INDEX MATURITY:
SPREAD AND/OR SPREAD REGULAR RECORD DATES (If other than the 15th
MULTIPLIER: day prior to each Interest Payment Date):
MAXIMUM INTEREST RATE: MINIMUM INTEREST RATE:
INTEREST PAYMENT DATES: INTEREST PAYMENT PERIOD:
INTEREST RESET DATES: INTEREST RESET PERIOD:
<PAGE>
INITIAL REDEMPTION DATE: ANNUAL REDEMPTION PERCENTAGE REDUCTION:
INITIAL REDEMPTION PERCENTAGE: HOLDER'S OPTIONAL REPAYMENT DATE:
ORIGINAL ISSUE DISCOUNT NOTE: OID AMOUNT:
Yes: ______ No: _____
OTHER PROVISIONS: CALCULATION AGENT:
DEFAULT RATE: ____ %
ALTERNATE RATE EVENT SPREAD:
The Northern Trust Company, an Illinois banking corporation (the "Bank"),
for value received, hereby promises to pay to __________________________________
________________________________________________, or registered assigns, the
principal sum of _______________________________________________________________
________________________________________ United States Dollars on the Maturity
Date specified above and to pay interest thereon from the Original Issue Date
specified above or from the most recent interest payment date (or, if the
Interest Reset Period specified above is daily or weekly, from, and including,
the day following the most recent Regular Record Date) to which interest on this
Senior Note (or any predecessor Senior Note) has been paid or duly provided for
(each, an "Interest Payment Date"), on the Interest Payment Dates specified
above and at maturity or upon earlier redemption or repayment, if applicable,
commencing on the first Interest Payment Date next succeeding the Original Issue
Date (or, if the Original Issue Date is between a Regular Record Date and the
Interest Payment Date immediately following such Regular Record Date, on the
second Interest Payment Date following the Original Issue Date), at a rate per
annum equal to the Initial Interest Rate specified above until the first
Interest Reset Date following the Original Issue Date and, on and after such
Interest Reset Date, at the rate determined in accordance with the provisions
set forth herein, until the principal hereof is paid or made available for
payment, and (to the extent that the payment of such interest shall be legally
enforceable) at the last rate in effect prior to any payment default (or the
Default Rate per annum specified above, if such Default Rate is specified above)
on any overdue principal and premium, if any, and on any overdue installment of
interest. The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will be paid to the person in whose name this Senior
Note (or any predecessor Senior Note) is registered at the close of business on
the Regular Record Date for such interest, which shall be the 15th calendar day
(whether or not a Business Day (as defined below)) before such Interest Payment
Date (unless otherwise specified on the face hereof);
-2-
<PAGE>
provided, however, that interest payable at maturity or upon earlier redemption
or repayment, if applicable, will be payable to the person to whom principal
shall be payable. Any such interest not so punctually paid or duly provided for
shall forthwith cease to be payable to the holder on such Regular Record Date
and may either be paid to the person in whose name this Senior Note (or any
predecessor Senior Note) is registered at the close of business on a special
record date for the payment of such defaulted interest (the "Special Record
Date") to be fixed by the Bank, notice of which shall be given to the holders of
Senior Notes not less than 10 calendar days prior to such Special Record Date,
or be paid at any time in any other lawful manner.
Payment of principal of, and premium, if any, and interest on, this
Senior Note will be made in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. The Bank will at all times appoint and maintain a paying agent
(the "Paying Agent") authorized by the Bank to pay the principal of, and
premium, if any, and interest on, this Senior Note on behalf of the Bank and
having an office or agency (the "Paying Agent Office") in The City of New York
or the City of Chicago, Illinois (the "Place of Payment"), where this Senior
Note may be presented or surrendered for payment and where notices, designations
or requests in respect of payments with respect to this Senior Note may be
served. The Bank has initially appointed itself as such Paying Agent, with the
Paying Agent Office currently located at 50 South LaSalle Street (Level BB-A),
Chicago, Illinois 60675, Attention: Securities Services.
THIS SENIOR NOTE IS A DIRECT, UNCONDITIONAL, UNSECURED AND UNSUBORDINATED
GENERAL OBLIGATION OF THE BANK AND DOES NOT EVIDENCE A DEPOSIT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. THIS
SENIOR NOTE RANKS PARI PASSU WITH ALL OTHER UNSECURED AND UNSUBORDINATED
OBLIGATIONS OF THE BANK, EXCEPT DEPOSITS AND OTHER OBLIGATIONS THAT ARE SUBJECT
TO A PRIORITY OR PREFERENCE. UNDER APPLICABLE LAW, CLAIMS OF CERTAIN CREDITORS,
INCLUDING HOLDERS OF DEPOSITS IN THE BANK, WOULD BE ENTITLED TO PRIORITY OVER
CLAIMS OF UNSECURED GENERAL CREDITORS OF THE BANK, INCLUDING THE HOLDER OF THIS
SENIOR NOTE, IN THE EVENT OF A LIQUIDATION OR OTHER RESOLUTION OF THE BANK.
Payment of the principal of, and premium, if any, and interest on, this
Senior Note due at maturity or upon earlier redemption or repayment, if
applicable, will be made in immediately available funds upon presentation and
surrender of this Senior Note to the Paying Agent at the Paying Agent Office in
the Place of Payment; provided that this Senior Note is presented to the Paying
Agent in time for the Paying Agent to
-3-
<PAGE>
make such payment in accordance with its normal procedures. Payments of interest
on this Senior Note (other than at maturity or upon earlier redemption or
repayment) will be made by wire transfer to such account as has been
appropriately designated to the Paying Agent by the person entitled to such
payments.
This Senior Note is one of a duly authorized issue of Senior Bank Notes
due from 30 days to fifteen years from date of issue of the Bank (herein called
the "Senior Notes").
Unless otherwise indicated on the face hereof, if the rate of interest on
this Senior Note resets daily, weekly or monthly the Interest Payment Date for
this Senior Note will be the third Wednesday of each month; if the rate of
interest on this Senior Note resets quarterly, the Interest Payment Date for
this Senior Note will be the third Wednesday of March, June, September and
December of each year; if the rate of interest on this Senior Note resets semi-
annually, the Interest Payment Date for this Senior Note will be the third
Wednesday of each of two months of each year specified on the face hereof that
are six months apart; and if the rate of interest on this Senior Note resets
annually, the Interest Payment Date for this Senior Note will be the third
Wednesday of the month specified on the face hereof. If any Interest Payment
Date, Maturity Date or date of earlier redemption or repayment of this Senior
Note falls on a day that is not a Business Day, such Interest Payment Date,
Maturity Date or date of earlier redemption or repayment will be the next
succeeding Business Day; provided, however, that if the Interest Rate Basis
specified on the face hereof is LIBOR and such next succeeding Business Day is
in the next succeeding calendar month, such Interest Payment Date, Maturity Date
or date of earlier redemption or repayment will be the immediately preceding
Business Day. "Business Day" means any day that is not a Saturday or Sunday and
that is not a day on which banking institutions in The City of New York or the
City of Chicago, Illinois generally are authorized or obligated by law or
executive order to close, and with respect to Senior Notes with respect to which
the Interest Rate Basis specified on the face hereof is LIBOR, any day on which
dealings in deposits in U.S. dollars are transacted in the London interbank
market (a "London Business Day").
This Senior Note will not be subject to any sinking fund. If so provided
on the face of this Senior Note, this Senior Note may be redeemed by the Bank on
and after the Initial Redemption Date, if any, specified on the face hereof. If
no Initial Redemption Date is specified on the face hereof, this Senior Note may
not be redeemed prior to the Maturity Date. On and after the Initial Redemption
Date, if any, this Senior Note may be redeemed at any time either in whole or in
part from time to time in increments of $1,000 (provided that any remaining
principal
-4-
<PAGE>
amount hereof shall be at least $250,000) at the option of the Bank at the
applicable Redemption Price (as defined below), together with accrued and unpaid
interest hereon at the applicable rate borne by this Senior Note to the date of
redemption (each such date, a "Redemption Date"), on written notice given not
more than 60 nor less than 30 calendar days prior to the Redemption Date by the
Bank to the registered holder hereof. Whenever less than all the Senior Notes at
any time outstanding are to be redeemed, the terms of the Senior Notes to be so
redeemed shall be selected by the Bank. If less than all the Senior Notes with
identical terms at any time outstanding are to be redeemed, the Senior Notes to
be so redeemed shall be selected by the Paying Agent by lot or in any usual
manner approved by it. In the event of redemption of this Senior Note in part
only, a new Senior Note for the unredeemed portion hereof shall be issued in the
name of the holder hereof upon the surrender hereof.
The "Redemption Price" shall initially be the Initial Redemption
Percentage specified on the face hereof of the principal amount of this Senior
Note to be redeemed and shall decline at each anniversary of the Initial
Redemption Date specified on the face hereof by the Annual Redemption Percentage
Reduction, if any, specified on the face hereof, of the principal amount to be
redeemed until the Redemption Price is 100% of such principal amount.
This Senior Note may be subject to repayment at the option of the holder
hereof in accordance with the terms hereof on the Holder's Optional Repayment
Date(s), if any, specified on the face hereof. If no Holder's Optional
Repayment Date is specified on the face hereof, this Senior Note will not be so
repayable at the option of the holder hereof prior to maturity. On any Holder's
Optional Repayment Date, this Senior Note will be repayable in whole or in part
in increments of $1,000 (provided that any remaining principal amount hereof
will be at least $250,000) at the option of the holder hereof at a repayment
price equal to 100% of the principal amount to be repaid, together with accrued
and unpaid interest hereon payable to the date of repayment. For this Senior
Note to be repaid in whole or in part at the option of the holder hereof on a
Holder's Optional Repayment Date, this Senior Note must be given, with the form
entitled "Option to Elect Repayment" below duly completed, to the Paying Agent
at its offices located at 50 South LaSalle Street (Level BB-A), Chicago,
Illinois 60675, Attention: Securities Services, or at such address which the
Bank shall from time to time notify the holders of the Senior Notes, not more
than 60 nor less than 30 days prior to such Holder's Optional Repayment Date.
Exercise of such repayment option by the holder hereof shall be irrevocable.
-5-
<PAGE>
The rate of interest on this Senior Note will be reset daily, weekly,
monthly, quarterly, semi-annually or annually (each such period, an "Interest
Reset Period" for this Senior Note, and the first calendar day of an Interest
Reset Period, an "Interest Reset Date"), as specified on the face hereof.
Unless otherwise indicated on the face hereof, if this Senior Note resets daily,
the Interest Reset Date will be each Business Day; if this Senior Note resets
weekly and the Interest Rate Basis is not the Treasury Rate, the Interest Reset
Date will be the Wednesday of each week; if this Senior Note resets weekly and
the Interest Rate Basis is the Treasury Rate, the Interest Reset Date will be
the Tuesday of each week (except as provided below); if this Senior Note resets
monthly and the Interest Rate Basis is not the 11th District Cost of Funds Rate,
the Interest Reset Date will be the third Wednesday of each month; if this
Senior Note resets monthly and the Interest Rate Basis is the 11th District Cost
of Funds Rate, the Interest Reset Date will be the first calendar day of each
month; if this Senior Note resets quarterly, the Interest Reset Date will be the
third Wednesday of March, June, September and December; if this Senior Note
resets semi-annually, the Interest Reset Date will be the third Wednesday of
each of two months of each year that are six months apart, as specified on the
face hereof; and if this Senior Note resets annually, the Interest Reset Date
will be the third Wednesday of one month of each year, as specified on the face
hereof; provided, however, that (i) the interest rate in effect from the
Original Issue Date to the first Interest Reset Date will be the Initial
Interest Rate specified on the face hereof, and (ii) the interest rate in effect
for the ten calendar days immediately prior to maturity or earlier redemption or
repayment of any installment of principal hereof will be the interest rate in
effect on the tenth calendar day preceding such Maturity Date or date of earlier
redemption or repayment, as the case may be. If any Interest Reset Date with
respect to this Senior Note would otherwise be a day that is not a Business Day,
such Interest Reset Date will be the next succeeding Business Day, except that
in the case that the Interest Rate Basis specified on the face hereof is LIBOR,
if such Business Day is in the next succeeding calendar month, such Interest
Reset Date will be the immediately preceding Business Day.
Except as otherwise specified in this paragraph, the rate of interest on
this Senior Note for each Interest Reset Date shall be the rate determined in
accordance with the provisions set forth under the applicable heading below
corresponding to the Interest Rate Basis specified on the face hereof:
Commercial Paper Rate. If the Interest Rate Basis of this Senior Note is
the Commercial Paper Rate, the interest rate hereon for any Interest Reset Date
shall equal the Commercial Paper Rate (as determined below), as adjusted (x) by
the addition
-6-
<PAGE>
or subtraction of the Spread, if any, specified on the face hereof and/or (y) by
the multiplication by the Spread Multiplier, if any, specified on the face
hereof. "Commercial Paper Rate" means, with respect to any Commercial Paper
Interest Determination Date (as defined below), the Money Market Yield
(calculated as described below) of the rate on the relevant Commercial Paper
Interest Determination Date for commercial paper having the Index Maturity
specified on the face hereof as such rate is published by the Board of Governors
of the Federal Reserve System in the weekly statistical release entitled
"Statistical Release H.15(519), Selected Interest Rates" or any successor
publication published by the Board of Governors of the Federal Reserve System
("H.15(519)") under the heading "Commercial Paper". If such rate is not
published prior to 3:00 P.M., New York City time, on the Calculation Date
pertaining to such Commercial Paper Interest Determination Date, then the
Commercial Paper Rate will be the Money Market Yield (calculated as described
below) of the rate on such Commercial Paper Interest Determination Date for
commercial paper having the Index Maturity specified on the face hereof as such
rate is published by the Federal Reserve Bank of New York in its daily
statistical release entitled "Composite 3:30 P.M. Quotations for U.S. Government
Securities" or any successor publication published by the Federal Reserve Bank
of New York ("Composite Quotations") under the heading "Commercial Paper". If
such rate is published in neither H.15(519) nor in Composite Quotations by 3:00
P.M., New York City time, on such Calculation Date, the Commercial Paper Rate
for such Commercial Paper Interest Determination Date will be the Money Market
Yield of the arithmetic mean of the offered rates as of 11:00 A.M., New York
City time, on such Commercial Paper Interest Determination Date, of three
leading dealers of commercial paper in The City of New York (which may include
one or more of the Agents (as defined below)) selected by the Calculation Agent
for commercial paper having the Index Maturity specified on the face hereof
placed for an industrial issuer whose senior unsecured bond rating is "AA", or
the equivalent, from at least two nationally recognized rating agencies;
provided, however, that if the dealers selected as aforesaid by the Calculation
Agent are not quoting as mentioned in this sentence, the Commercial Paper Rate
determined on such Commercial Paper Interest Determination Date will be the
Commercial Paper Rate determined on the immediately preceding Commercial Paper
Interest Determination Date or, in the case of the first Commercial Paper
Interest Determination Date, the Initial Interest Rate specified on the face
hereof.
-7-
<PAGE>
"Money Market Yield" shall be a yield (expressed as a percentage)
calculated in accordance with the following formula:
D x 360
Money Market Yield = _______________ x 100
360 - (D x M)
where "D" refers to the per annum rate for commercial paper quoted on a bank
discount basis and expressed as a decimal; and "M" refers to the actual number
of days in the interest period for which interest is being calculated.
LIBOR. If the Interest Rate Basis of this Senior Note is LIBOR, the
interest rate hereon for any Interest Reset Date shall equal LIBOR (as
determined below), as adjusted (x) by the addition or subtraction of the Spread,
if any, specified on the face hereof and/or (y) by the multiplication by the
Spread Multiplier, if any, specified on the face hereof. LIBOR shall be
determined by the Calculation Agent in accordance with the following provisions:
(a) With respect to any LIBOR Interest Determination Date (as defined
below), LIBOR will be either: (i) if "LIBOR Reuters" is specified on the
face hereof, the arithmetic mean of the offered rates for deposits in U.S.
dollars having the Index Maturity specified on the face hereof, commencing
on the second London Business Day immediately following such LIBOR Interest
Determination Date, that appear on the Reuters Screen LIBO Page (as defined
below) as of 11:00 A.M. London time on such LIBOR Interest Determination
Date, if at least two such offered rates appear on the Reuters Screen LIBO
Page, or (ii) if "LIBOR Telerate" is specified on the face hereof, the rate
for deposits in U.S. dollars having the Index Maturity specified on the
face hereof, commencing on the second London Business Day immediately
following such LIBOR Interest Determination Date, that appears on Telerate
Page 3750 (as defined below) as of 11:00 A.M. London time, on such LIBOR
Interest Determination Date. The "Reuters Screen LIBO Page" means the
display designated as page "LIBO" on the Reuters Monitor Money Rates
Service (or such other page as may replace the LIBO page on that service
for purposes of displaying London interbank offered rates of major banks).
"Telerate Page 3750" means the display designated as page 3750 on the Dow
Jones Telerate Service (or such other page or pages as may replace the 3750
page on that service or such other service or services as may be nominated
by the British Bankers' Association for the purpose of displaying London
interbank offered rates for U.S. dollar deposits). If neither LIBOR
Reuters nor LIBOR Telerate is specified on the face hereof, LIBOR will be
determined as if LIBOR Reuters has been
-8-
<PAGE>
specified. Notwithstanding the foregoing, if fewer than two offered rates
appear on the Reuters Screen LIBO Page, or no rate appears on Telerate Page
3750, as applicable, LIBOR in respect of a related LIBOR Interest
Determination Date will be determined as if the parties had specified the
rate described in paragraph (b) below.
(b) With respect to a LIBOR Interest Determination Date on which fewer
than two offered rates appear on the Reuters Screen LIBO Page, as specified
in paragraph (a)(i) above, or on which no rate appears on Telerate Page
3750, as specified in paragraph (a)(ii) above, as the case may be, the
Calculation Agent will request the principal London offices of each of four
major reference banks in the London interbank market, as selected by the
Calculation Agent, to provide the Calculation Agent with its offered
quotation for deposits for the period of the Index Maturity specified on
the face hereof, commencing on the second London Business Day immediately
following such LIBOR Interest Determination Date, to prime banks in the
London interbank market at approximately 11:00 A.M., London time, on such
LIBOR Interest Determination Date and in a principal amount of not less
than $1,000,000 that is representative for a single transaction in such
market at such time. If at least two such quotations are provided, LIBOR
determined on such LIBOR Interest Determination Date will be the arithmetic
mean of such quotations. If fewer than two quotations are provided, LIBOR
determined on such LIBOR Interest Determination Date will be the arithmetic
mean of the rates quoted at approximately 11:00 A.M. New York City time on
such LIBOR Interest Determination Date by three major banks in The City of
New York selected by the Calculation Agent for loans in U.S. dollars to
leading European banks, having the Index Maturity specified on the face
hereof, commencing on the second London Business Day following such LIBOR
Interest Determination Date, and in a principal amount of not less than
$1,000,000 that is representative for a single transaction in such market
at such time; provided, however, that if the banks so selected by the
Calculation Agent are not quoting as mentioned in this sentence, LIBOR
determined on such LIBOR Interest Determination Date will be LIBOR
determined on the immediately preceding LIBOR Interest Determination Date
or, in the case of the first LIBOR Interest Determination Date, the Initial
Interest Rate specified on the face hereof.
Treasury Rate. If the Interest Rate Basis of this Senior Note is the
Treasury Rate, the interest rate hereon for any Interest Reset Date shall equal
the Treasury Rate (as determined below) as adjusted (x) by the addition or
subtraction of the Spread, if any, specified on the face hereof and/or (y) by
the
-9-
<PAGE>
multiplication by the Spread Multiplier, if any, specified on the face hereof.
"Treasury Rate" means the rate for the most recent auction of direct obligations
of the United States ("Treasury bills") having the Index Maturity specified on
the face hereof, as such rate is published in H.15(519) under the heading "U.S.
Government Securities/Treasury Bills/Auction Average (Investment)" or, if such
rate is not so published by 3:00 P.M., New York City time, on the Calculation
Date, the auction average rate (expressed as a bond equivalent, on the basis of
a year of 365 or 366 days, as applicable, and applied on a daily basis) for such
auction as otherwise announced by the United States Department of the Treasury
by 3:00 P.M., New York City time, on such Calculation Date. If the results of
the auction of Treasury bills having the Index Maturity specified on the face
hereof are neither published in H.15(519) nor otherwise published or reported as
provided above by 3:00 P.M., New York City time, on such Calculation Date, or if
no such auction is held in a particular week, then the Treasury Rate will be
calculated by the Calculation Agent and will be a yield to maturity (expressed
as a bond equivalent, on the basis of a year of 365 or 366 days, as applicable,
and applied on a daily basis) of the arithmetic mean of the secondary market bid
rates as of 3:30 P.M., New York City time, on such Treasury Interest
Determination Date (as defined below), of three leading primary United States
government securities dealers in The City of New York selected by the
Calculation Agent, for the issue of Treasury bills with a remaining maturity
closest to the Index Maturity specified on the face hereof or, if there are two
such issues which are equidistant from the Index Maturity specified on the face
hereof, then the longer of the two; provided, however, that if the dealers
selected as aforesaid by the Calculation Agent are not quoting as mentioned in
this sentence, the Treasury Rate determined on such Treasury Interest
Determination Date will be the Treasury Rate determined on the immediately
preceding Treasury Interest Determination Date or, in the case of the first
Treasury Interest Determination Date, the Initial Interest Rate specified on the
face hereof.
CD Rate. If the Interest Rate Basis of this Senior Note is the CD Rate,
the interest rate hereon for any Interest Reset Date shall equal the CD Rate (as
determined below), as adjusted (x) by the addition or subtraction of the Spread,
if any, specified on the face hereof and/or (y) by the multiplication by the
Spread Multiplier, if any, specified on the face hereof. "CD Rate" means the
rate on the relevant CD Interest Determination Date (as defined below) for
negotiable certificates of deposit having the Index Maturity specified on the
face hereof, as published in H.15(519) under the heading "CDs (Secondary
Market)". If such rate is not so published before 3:00 P.M., New York City
time, on the Calculation Date pertaining to such CD Interest Determination Date,
then the CD Rate will be the rate on such CD Interest
-10-
<PAGE>
Determination Date for negotiable certificates of deposit having the Index
Maturity specified on the face hereof as published in Composite Quotations under
the heading "Certificates of Deposit". If such rate is published neither in
H.15(519) nor in Composite Quotations by 3:00 P.M., New York City time, on such
Calculation Date, the CD Rate will be calculated by the Calculation Agent and
will be the arithmetic mean of the secondary market offered rates as of 10:00
A.M., New York City time, on such CD Interest Determination Date, of three
leading non-bank dealers of negotiable U.S. dollar certificates of deposit in
The City of New York (which may include one or more of the Agents) selected by
the Calculation Agent for negotiable certificates of deposit of the four highest
rated banks (as rated by two nationally recognized rating agencies) of the 25
largest United States banks based on the most recent year-end survey published
in The American Banker (or a comparable publication) with a remaining maturity
closest to the Index Maturity specified on the face hereof in a denomination of
$5,000,000; provided, however, that, if the dealers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the CD Rate
determined on such CD Interest Determination Date will be the CD Rate determined
on the immediately preceding CD Interest Determination Date or, in the case of
the first CD Interest Determination Date, the Initial Interest Rate specified on
the face hereof.
Federal Funds Rate. If the Interest Rate Basis of this Senior Note is the
Federal Funds Rate, the interest rate hereon for any Interest Reset Date shall
equal the Federal Funds Rate (as determined below, as adjusted (x) by the
addition or subtraction of the Spread, if any, specified on the face hereof
and/or (y) by the multiplication by the Spread Multiplier, if any, specified on
the face hereof. "Federal Funds Rate" means the rate on the relevant Federal
Funds Interest Determination Date (as defined below) for Federal Funds having
the Index Maturity specified on the face hereof, as published in H.15(519) under
the heading "Federal Funds (Effective)". If such rate is not published by 3:00
P.M., New York City time, on the Calculation Date pertaining to such Federal
Funds Interest Determination Date, then the Federal Funds Rate will be the rate
on such Federal Funds Interest Determination Date as published in Composite
Quotations under the heading "Federal Funds/Effective Rate". If such rate is
published neither in H.15(519) nor in Composite Quotations by 3:00 P.M., New
York City time, on such Calculation Date, the Federal Funds Rate will be
calculated by the Calculation Agent and will be the arithmetic mean of the
rates, as of 3:00 P.M., New York City time, on such Federal Funds Interest
Determination Date, for the last transaction in overnight Federal Funds arranged
by three leading brokers of Federal Funds transactions in The City of New York
(which may include one or more of the Agents) selected by the Calculation Agent;
provided, however, that if the brokers selected as
-11-
<PAGE>
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the Federal Funds Rate determined on such Federal Funds Interest
Determination Date will be the Federal Funds Rate determined on the immediately
preceding Federal Funds Interest Determination Date or, in the case of the first
Federal Funds Interest Determination Date, the Initial Interest Rate specified
on the face hereof.
Prime Rate. If the Interest Rate Basis of this Senior Note is the Prime
Rate, the interest rate hereon for any Interest Reset Date shall equal the Prime
Rate (as determined below), as adjusted (x) by the addition or subtraction of
the Spread, if any, specified on the face hereof and/or (y) by the
multiplication by the Spread Multiplier, if any, specified on the face hereof.
"Prime Rate" means the rate set forth on the relevant Prime Interest
Determination Date (as defined below) in H.15(519) under the heading "Bank Prime
Loan". If such rate is not published prior to 9:00 A.M., New York City time, on
the Calculation Date pertaining to such Prime Interest Determination Date, then
the Prime Rate will be determined by the Calculation Agent and will be the
arithmetic mean of the rates of interest publicly announced by each bank that
appears on the Reuters Screen NYMF Page (as defined below) as such bank's prime
rate or base lending rate as in effect for such Prime Interest Determination
Date. If fewer than four such rates but two or more such rates appear on the
Reuters Screen NYMF Page on such Prime Interest Determination Date, the Prime
Rate will be determined by the Calculation Agent and will be the arithmetic mean
of the prime rates quoted on the basis of the actual number of days in the year
divided by a 360-day year as of the close of business on such Prime Interest
Determination Date by three major money center banks in The City of New York
selected by the Calculation Agent. If fewer than two such rates appear on the
Reuters Screen NYMF Page, the Prime Rate will be determined by the Calculation
Agent on the basis of the rates furnished in The City of New York by the
appropriate number of substitute banks or trust companies organized and doing
business under the laws of the United States, or any State thereof, having total
equity capital of at least $500,000,000 and being subject to supervision or
examination by Federal or State authority, selected by the Calculation Agent to
provide such rate or rates; provided, however, that if the banks or trust
companies selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the Prime Rate determined on such Prime Interest
Determination Date will be the Prime Rate determined on the immediately
preceding Prime Interest Determination Date or, in the case of the first Prime
Interest Determination Date, the Initial Interest Rate specified on the face
hereof. "Reuters Screen NYMF Page" means the display designated as page "NYMF"
on the Reuters Monitor Money Rates Service (or such other page as may replace
the NYMF page on that service for the purpose of
-12-
<PAGE>
displaying prime rates or base lending rates of major United States banks).
11th District Cost of Funds Rate Notes. If the Interest Rate Basis of this
Senior Note is the 11th District Cost of Funds Rate, the interest rate hereon
for any Interest Reset Date shall equal the 11th District Cost of Funds Rate (as
determined below), as adjusted (x) by the addition or subtraction of the Spread,
if any, specified on the face hereof and/or (y) by the multiplication by the
Spread Multiplier, if any, specified on the face hereof.
"11th District Cost of Funds Rate" means the rate equal to the monthly
weighted average cost of funds for the calendar month immediately preceding the
month in which the relevant 11th District Cost of Funds Interest Determination
Date (as defined below) falls, as set forth under the caption "11th District" on
Telerate Page 7058 (as defined below) as of 11:00 A.M., San Francisco time, on
such 11th District Cost of Funds Interest Determination Date. If such rate does
not appear on Telerate Page 7058 on any related 11th District Cost of Funds
Interest Determination Date, the 11th District Cost of Funds Rate for such 11th
District Cost of Funds Interest Determination Date shall be the monthly weighted
average cost of funds paid by member institutions of the 11th Federal Home Loan
Bank District that was most recently announced (the "11th District Cost of Funds
Index") by the Federal Home Loan Bank of San Francisco (the "FHLB of San
Francisco") as such cost of funds for the calendar month immediately preceding
the date of such announcement. If the FHLB of San Francisco fails to announce
such rate for the calendar month immediately preceding such 11th District Cost
of Funds Interest Determination Date, then the 11th District Cost of Funds Rate
determined as of such 11th District Cost of Funds Interest Determination Date
will be the 11th District Cost of Funds Rate determined on the immediately
preceding 11th District Cost of Funds Interest Determination Date or, in the
case of the first 11th District Cost of Funds Interest Determination Date, the
Initial Interest Rate specified on the face hereof.
"Telerate Page 7058" means the display designated as page "7058" on the Dow
Jones Telerate Service (or such other page as may replace the 7058 page on that
service for the purpose of displaying the monthly weighted average cost of funds
paid by member institutions of the 11th Federal Home Loan Bank District).
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, specified on the face hereof and
shall not be lower than the Minimum Interest Rate, if any, specified on the face
hereof. In addition, the interest rate hereon will in no event be higher
-13-
<PAGE>
than the maximum rate permitted by Illinois law, as the same may be modified by
United States law of general application.
The Bank will at all times appoint and maintain a banking institution as
Calculation Agent hereunder. Unless otherwise specified on the face hereof, the
Bank has initially appointed itself as Calculation Agent. Upon the request of
the holder of this Senior Note, the Calculation Agent will provide the interest
rate then in effect, and, if different, the interest rate which will become
effective as a result of a determination made on the most recent Interest
Determination Date with respect to this Senior Note.
Unless otherwise specified on the face hereof, all percentages resulting
from any calculation on this Senior Note will be rounded, if necessary, to the
nearest one-hundred thousandth of a percentage point, with five one-millionths
of a percentage point rounded upwards (e.g., 9.876545% (or .09876545) being
rounded to 9.87655% (or .0987655) and 9.876544% (or .09876544) being rounded to
9.87654% (or .0987654)), and all dollar amounts used in or resulting from such
calculation on this Senior Note will be rounded to the nearest cent (with one-
half cent being rounded upwards). The interest rate in effect on any Interest
Reset Date will be the applicable rate as reset on such Interest Reset Date.
The interest rate applicable to any other day is the interest rate from the
immediately preceding Interest Reset Date (or, if none, the Initial Interest
Rate). The Calculation Agent's determination of any interest rate will be final
and binding in the absence of manifest error.
The Interest Determination Date pertaining to an Interest Reset Date if the
rate of interest hereon shall be determined in accordance with the provisions
under the headings above entitled "Commercial Paper Rate" (the "Commercial Paper
Interest Determination Date"), "CD Rate" (the "CD Interest Determination Date"),
"Federal Funds Rate" (the "Federal Funds Interest Determination Date") or "Prime
Rate" (the "Prime Interest Determination Date") will be the second Business Day
preceding such Interest Reset Date. The Interest Determination Date pertaining
to an Interest Reset Date if the rate of interest hereon shall be determined in
accordance with the provisions under the heading above entitled "11th District
Cost of Funds Rate" (the "11th District Cost of Funds Interest Determination
Date") will be the last working day of the month immediately preceding such
Interest Reset Date on which the FHLB of San Francisco publishes the 11th
District Cost of Funds Index. The Interest Determination Date pertaining to an
Interest Reset Date if the rate of interest hereon shall be determined in
accordance with the provisions under the heading above entitled "LIBOR" (the
"LIBOR Interest Determination Date") will be the second London Business Day
preceding such Interest Reset Date. The Interest
-14-
<PAGE>
Determination Date pertaining to an Interest Reset Date if the rate of interest
hereon shall be determined in accordance with the provisions under the heading
above entitled "Treasury Rate" (the "Treasury Interest Determination Date") will
be that day of the week in which such Interest Reset Date falls on which
Treasury bills would normally be auctioned. Treasury bills are normally sold at
auction on Monday of each week, unless that day is a legal holiday, in which
case the auction is usually held on the following Tuesday, except that such
auction may be held on the preceding Friday. If, as the result of a legal
holiday, an auction is so held on the preceding Friday, such Friday will be the
Treasury Interest Determination Date pertaining to the Interest Reset Date
occurring in the next succeeding week. If an auction date shall fall on any
Interest Reset Date for a Senior Note with respect to which the Interest Rate
Basis specified on the face hereof is the Treasury Rate, then such Interest
Reset Date shall instead be the first Business Day immediately following such
auction date.
The Calculation Date pertaining to the Interest Determination Date for any
Senior Note shall be the tenth calendar day after such Interest Determination
Date or, if any such day is not a Business Day, the next succeeding Business
Day.
Payments of interest hereon with respect to any Interest Payment Date will
include interest accrued from, and including, the Original Issue Date or from,
and including, the last date on which interest has been paid to, but excluding,
such Interest Payment Date; provided, however, that, if the Interest Reset
Period with respect to this Senior Note is daily or weekly, the interest payable
on any Interest Payment Date, other than interest payable on any date on which
principal of this Senior Note is payable, will include interest accrued from,
and including, the Original Issue Date or from, but excluding, the last date in
respect of which interest has been paid or made available for payment, as the
case may be, to, and including, the Regular Record Date next preceding such
Interest Payment Date, except that the interest payable at maturity or upon
earlier redemption or repayment will include interest accrued to, but excluding,
the Maturity Date or the date of earlier redemption or repayment, as the case
may be.
Accrued interest on this Senior Note from the Original Issue Date or from
the last date to which interest has been paid or duly provided is calculated by
multiplying the face amount of this Senior Note by an accrued interest factor.
Such accrued interest factor is computed by adding the interest factor
calculated for each day from the Original Issue Date or from the last date to
which interest has been paid or duly provided for, as the case may be, to the
date for which accrued interest is being calculated in the period for which
interest is being
-15-
<PAGE>
calculated. The interest factor for each such day is computed by dividing the
interest rate applicable to such date by 360, in the case that the Interest Rate
Basis specified on the face hereof is the Commercial Paper Rate, LIBOR, CD Rate,
Federal Funds Rate, Prime Rate or 11th District Cost of Funds Rate, or by the
actual number of days in the year, in the case that the Interest Rate Basis
specified on the face hereof is the Treasury Rate.
If this Senior Note is an Original Issue Discount Note and if an Event of
Default with respect to the Senior Notes shall have occurred and be continuing,
the Default Amount (as defined hereafter) of this Senior Note may be declared
due and payable in the manner and with the effect provided herein. The "Default
Amount" shall be equal to the adjusted issue price as of the first day of the
accrual period as determined under Proposed Treasury Regulation Section
1.1272-1(e) (or successor regulation) under the United States Internal Revenue
Code of 1986, as amended, in which the date of acceleration occurs increased by
the daily portion of the original issue discount for each day in such accrual
period ending on the date of acceleration, as determined under Proposed Treasury
Regulation Section 1.1272-1(c) (or successor regulation) under the United States
Internal Revenue Code of 1986, as amended. Upon payment of (i) the amount of
principal or premium, if any, so declared due and payable and (ii) interest on
any overdue principal and overdue interest or premium, if any (in each case to
the extent that the payment of such interest shall be legally enforceable), all
of the Bank's obligations in respect of the payment of the principal of, and
interest or premium, if any, on, this Senior Note shall terminate.
In case any Senior Note shall at any time become mutilated, destroyed, lost
or stolen and such Senior Note or evidence satisfactory to the Bank of the loss,
theft or destruction thereof (together with indemnity satisfactory to the Bank
and such other documents or proof as may be required in the premises) shall be
delivered to the Bank, a new Senior Note of like tenor will be issued by the
Bank in exchange for the Senior Note so mutilated, or in lieu of the Senior Note
so destroyed or lost or stolen. All expenses and reasonable charges associated
with procuring the indemnity referred to above and with the preparation,
authentication and delivery of a new Senior Note shall be borne by the holder of
the Senior Note so mutilated, destroyed, lost or stolen. If any Senior Note
which has matured or is about to mature shall become mutilated, destroyed, lost
or stolen, the Bank may, instead of issuing a substitute Senior Note, pay or
authorize the payment of the same (without surrender thereof except in the case
of a mutilated Senior Note) upon compliance by the holder thereof with the
provisions of this paragraph.
-16-
<PAGE>
No recourse shall be had for the payment of the principal of, premium, if
any, or interest on, this Senior Note, for any claim based hereon, or otherwise
in respect hereof, against any shareholder, employee, officer or director, as
such, past, present or future, of the Bank or of any successor corporation,
either directly or through the Bank or any successor corporation, whether by
virtue of any constitution, statute or rule of law or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issue hereof, expressly waived
and released.
The occurrence of any of the following events shall constitute an "Event of
Default" with respect to this Senior Note: (i) default in the payment of any
interest with respect to this Senior Note when due, which continues for 30 days;
(ii) default in the payment of any principal of, or premium, if any, on, this
Senior Note when due; (iii) the entry by a court having jurisdiction in the
premises of (a) a decree or order for relief in respect of the Bank in an
involuntary case or proceeding under any applicable United States federal or
state bankruptcy, insolvency, reorganization or other similar law or (b) a
decree or order appointing a conservator, receiver, liquidator, assignee,
trustee, sequestrator or any other similar official of the Bank, or of
substantially all of the property of the Bank, or ordering the winding up or
liquidation of the affairs of the Bank, and the continuance of any such decree
or order for relief or any such other decree or order unstayed and in effect for
a period of 60 consecutive days; or (iv) the commencement by the Bank of a
voluntary case or proceeding under any applicable United States federal or state
bankruptcy, insolvency, reorganization or other similar law or of any other case
or proceeding to be adjudicated as bankrupt or insolvent, or the consent by the
Bank to the entry of a decree or order for relief in an involuntary case or
proceeding under any applicable United States federal or state bankruptcy,
insolvency, reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding, or the filing by the Bank of a
petition or answer or consent seeking reorganization or relief under any
applicable United States federal or state law, or the consent by the Bank to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or similar
official of the Bank or of substantially all of the property of the Bank, or the
making by the Bank of an assignment for the benefit of creditors, or the taking
of corporate action by the Bank in furtherance of any such action. If an Event
of Default shall occur and be continuing, the holder of this Senior Note may
declare the principal amount of, and accrued interest and premium, if any, on,
this Senior Note due and payable immediately by written notice to the Bank.
Upon such declaration and notice,
-17-
<PAGE>
such principal amount, accrued interest and premium, if any, shall become due
and payable seven calendar days after such notice. Any Event of Default with
respect to this Senior Note may be waived by the holder hereof.
No provision of this Senior Note shall alter or impair the obligation of
the Bank, which is absolute and unconditional, to pay the principal, and
premium, if any, and interest on, this Senior Note in U.S. dollars at the times,
places and rate herein prescribed.
The Bank shall cause to be kept at the corporate trust office of the Senior
Note Registrar designated below a register (the register maintained in such
corporate trust office or any other office or agency of the Bank in the Place of
Payment herein referred to as the "Senior Note Register") in which, subject to
such reasonable regulations as it may prescribe, the Bank shall provide for the
registration of the Senior Notes and of transfers of the Senior Notes. The Bank
is hereby initially appointed "Senior Note Registrar" for the purposes of
registering the Senior Notes and transfers of the Senior Notes as herein
provided.
The transfer of this Senior Note is registrable in the Senior Note
Register, upon surrender of this Senior Note for registration of transfer at the
office or agency of the Bank in the Place of Payment, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the Bank
and the Paying Agent duly executed by, the holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Senior Notes of like tenor,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees. Notwithstanding the
foregoing, the Bank shall not be required to register the transfer of any Senior
Note that has been called for redemption during a period beginning at the
opening of business fifteen calendar days before the date of mailing of a notice
of such redemption and ending at the close of business on the date of such
mailing.
No service charge shall be made for any such registration of transfer or
exchange, but the Bank may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection therewith.
The Senior Notes are issuable only in registered form without coupons in
minimum denominations of $250,000 and any integral multiple of $1,000 in excess
thereof. Each owner of a beneficial interest in this Senior Note is required to
hold a beneficial interest in $250,000 principal amount or any integral
-18-
<PAGE>
multiple of $1,000 in excess thereof of this Senior Note at all times.
Prior to due presentment of this Senior Note for registration of transfer,
the Bank, the Paying Agent or any agent of the Bank or the Paying Agent may
treat the person in whose name this Senior Note is registered as the owner
hereof for all purposes, whether or not this Senior Note be overdue, and neither
the Bank, the Paying Agent nor any such agent shall be affected by notice to the
contrary.
All notices to the Bank under this Senior Note shall be in writing and
addressed to the Bank at 50 South LaSalle Street, Chicago, Illinois 60675, or to
such other address of the Bank as the Bank may notify the holders of the Senior
Notes.
This Senior Note shall be governed by, and construed in accordance with,
the laws of the State of Illinois.
As used in this Senior Note, the term "Agents" shall mean Goldman Sachs &
Co., CS First Boston Corporation, J.P. Morgan Securities Inc., Lehman Brothers,
Lehman Brothers Inc. and Merrill Lynch & Co., Merrill Lynch, Pierce Fenner &
Smith Incorporated, and any other person, firm or entity which shall hereafter
be designated as an "Agent" under that certain Amended and Restated Distribution
Agreement, dated September 6, 1995, among the Bank, Northern Trust Corporation
and the Agents (as hereinabove defined).
IN WITNESS WHEREOF, the Bank has caused this instrument to be duly
executed.
THE NORTHERN TRUST COMPANY
By:__________________________________
Authorized Signatory
-19-
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of the within Senior Note, shall be construed as though they were written out in
full according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as
tenants in common
UNIF GIFT MIN ACT - __________ Custodian ___________
(Cust) (Minor)
under Uniform Gifts to Minors Act
_________________________________
(State)
Additional abbreviations may also be used
though not in the above list.
-20-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto __________________________________________________________
___________________________________________________________________________
PLEASE INSERT SOCIAL SECURITY NUMBER OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
___________________________
| |
___________________________
___________________________________________________________________________
___________________________________________________________________________
(Please print or typewrite name and address,
including postal zip code, of assignee)
_____________________________________________________________________________
the within Senior Note and all rights thereunder, and hereby irrevocably
constitutes and appoints ____________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
to transfer said Senior Note on the books of the Bank, with full power of
substitution in the premises.
Dated:__________________________
______________________________________________
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of the within Senior Note in every
particular, without alteration or enlargement
or any change whatsoever.
-21-
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the Bank to
repay this Senior Note (or portion hereof specified below) pursuant to its terms
and at a price equal to 100% of the principal amount hereof to be repaid,
together with accrued and unpaid interest hereon, payable to the date of
repayment, to the undersigned, at _____________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address of the undersigned)
For this Senior Note to be repaid, the undersigned must give to the Paying
Agent at its offices located at 50 South LaSalle Street (Level BB-A), Chicago,
Illinois 60675, Attention: Securities Services, or at such other place or places
of which the Bank shall from time to time notify the holders of the Senior
Notes, not more than 60 days nor less than 30 days prior to the date of
repayment, this Senior Note with this "Option to Elect Repayment" form duly
completed.
If less than the entire principal amount of this Senior Note is to be
repaid, specify the portion hereof (which shall be increments of $1,000) which
the holder elects to have repaid and specify the denomination or denominations
(which shall be $250,000 or an integral multiple of $1,000 in excess thereof) of
the Senior Notes to be issued to the holder for the portion of this Senior Note
not being repaid (in the absence of any such specification, one such Senior Note
will be issued for the portion not being repaid):
$________________________
Dated:___________________ __________________________________________
NOTICE: The signature on this "Option to
Elect Repayment" form must correspond with
the name as written upon the face of the
within Senior Note in every particular,
without alteration or enlargement or any
change whatsoever.
-22-
<PAGE>
Exhibit Number (4)(iii)
To 9/30/95 Form 10-Q
UNLESS THIS SUBORDINATED NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE BANK OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY SUBORDINATED NOTE ISSUED UPON REGISTRATION OR TRANSFER OF, OR
IN EXCHANGE FOR, OR IN LIEU OF, THIS SUBORDINATED NOTE IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
IF THIS SUBORDINATED NOTE IS ISSUED WITH "ORIGINAL ISSUE DISCOUNT" FOR
PURPOSES OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, THE
FOLLOWING SHALL BE COMPLETED: THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR
PURPOSES OF APPLYING SECTIONS 1272, 1273 AND 1275 OF THE UNITED STATES INTERNAL
REVENUE CODE OF 1986, AS AMENDED, TO THIS SUBORDINATED NOTE. THE ISSUE DATE OF
THIS SUBORDINATED NOTE IS _______________. THE ISSUE PRICE OF THIS SUBORDINATED
NOTE IS _____% OF ITS PRINCIPAL AMOUNT. THE AMOUNT OF ORIGINAL ISSUE DISCOUNT
ON THIS SUBORDINATED NOTE IS $______________ PER $1,000 OF THE INITIAL PRINCIPAL
AMOUNT, THE YIELD TO MATURITY IS _____%, AND THE AMOUNT OF THE ORIGINAL ISSUE
DISCOUNT ALLOCABLE TO THE INITIAL SHORT ACCRUAL PERIOD, IF ANY, IS $_________
PER $1,000 OF THE INITIAL PRINCIPAL AMOUNT, DETERMINED ON THE BASIS OF THE EXACT
METHOD.
No. SUB FXR-______________ REGISTERED
CUSIP NO.: ________________________
THE NORTHERN TRUST COMPANY
GLOBAL SUBORDINATED MEDIUM-TERM BANK NOTE
(FIXED RATE)
ORIGINAL ISSUE DATE: PRINCIPAL AMOUNT:
INTEREST RATE: _______% MATURITY DATE:
INTEREST PAYMENT REGULAR RECORD DATES (If other than the
DATES: April 1 or October 1, prior to each
Interest Payment Date):
INITIAL REDEMPTION DATE: INITIAL REDEMPTION
PERCENTAGE:
<PAGE>
ANNUAL REDEMPTION
PERCENTAGE REDUCTION:
ORIGINAL ISSUE OID AMOUNT:
DISCOUNT NOTE:
Yes:_____ No:_____
OTHER PROVISIONS:
The Northern Trust Company, an Illinois banking corporation (the "Bank"),
for value received, hereby promises to pay to ____________________ or registered
assigns, the principal sum of _________________ United States Dollars on the
Maturity Date specified above and to pay interest thereon from the Original
Issue Date specified above or from the most recent interest payment date to
which interest on this Subordinated Note (or any predecessor Subordinated Note)
has been paid or duly provided for, semi-annually on April 15 and October 15 of
each year (unless otherwise specified on the face hereof) (each, an "Interest
Payment Date") and at maturity or upon earlier redemption, if applicable,
commencing on the first Interest Payment Date next succeeding the Original Issue
Date (or, if the Original Issue Date is between a Regular Record Date and the
Interest Payment Date immediately following such Regular Record Date, on the
second Interest Payment Date following the Original Issue Date), at the Interest
Rate per annum specified above, until the principal hereof is paid or made
available for payment, and (to the extent that the payment of such interest
shall be legally enforceable) at such Interest Rate on any overdue principal and
premium, if any, and on any overdue installment of interest. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will be paid to the person in whose name this Subordinated Note (or any
predecessor Subordinated Note) is registered at the close of business on the
Regular Record Date for such interest, which shall be the April 1 and October 1
(whether or not a Business Day (as defined below)), as the case may be, next
preceding the applicable Interest Payment Date (unless otherwise specified on
the face hereof); provided, however, that interest payable at maturity or upon
earlier redemption, if applicable, will be payable to the person to whom
principal shall be payable. Any such interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the holder on such Regular
Record Date and may either be paid to the person in whose name this Subordinated
Note (or any predecessor Subordinated Note) is registered at the close of
business on a special record date for the payment of such defaulted interest
(the "Special Record Date") to be fixed by the Bank, notice of which shall be
given to the holders of Subordinated Notes not less than 10 calendar days
-2-
<PAGE>
prior to such Special Record Date, or be paid at any time in any other lawful
manner.
Payment of principal of, and premium, if any, and interest on, this
Subordinated Note will be made in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. The Bank will at all times appoint and maintain a paying agent
(the "Paying Agent") authorized by the Bank to pay the principal of, and
premium, if any, and interest on, this Subordinated Note on behalf of the Bank
and having an office or agency (the "Paying Agent Office") in The City of New
York or the City of Chicago, Illinois (the "Place of Payment"), where this
Subordinated Note may be presented or surrendered for payment and where notices,
designations or requests in respect of payments with respect to this
Subordinated Note may be served. The Bank has initially appointed itself as the
Paying Agent, with the Paying Agent Office currently located at 50 South LaSalle
Street (Level BB-A), Chicago, Illinois 60675, Attention: Securities Services.
THIS SUBORDINATED NOTE IS A DIRECT, UNCONDITIONAL AND UNSECURED GENERAL
OBLIGATION OF THE BANK, DOES NOT EVIDENCE A DEPOSIT AND IS NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. THIS
SUBORDINATED NOTE IS SUBORDINATE TO THE CLAIMS OF DEPOSITORS AND GENERAL
CREDITORS OF THE BANK.
Payment of the principal of, and premium, if any, and interest on, this
Subordinated Note due at maturity or upon earlier redemption, if applicable,
will be made in immediately available funds upon presentation and surrender of
this Subordinated Note to the Paying Agent at the Paying Agent Office in the
Place of Payment; provided that this Subordinated Note is presented to the
Paying Agent in time for the Paying Agent to make such payment in accordance
with its normal procedures. Payments of interest on this Subordinated Note
(other than at maturity or upon earlier redemption) will be made by wire
transfer to such account as has been appropriately designated to the Paying
Agent by the person entitled to such payments.
This Subordinated Note is one of a duly authorized issue of Subordinated
Medium-Term Bank Notes due from five to fifteen years from date of issue of the
Bank (herein called the "Subordinated Notes").
Payments of interest hereon on any Interest Payment Date will include
interest accrued to, but excluding, such Interest Payment Date. Interest hereon
shall be computed on the basis of a 360-day year of twelve 30-day months.
-3-
<PAGE>
If any Interest Payment Date, Maturity Date or date of earlier redemption
of this Subordinated Note falls on a day which is not a Business Day, the
related payment of principal, premium, if any, or interest shall be made on the
next succeeding Business Day with the same force and effect as if made on the
date such payment were due, and no interest shall accrue on the amount so
payable for the period from and after such Interest Payment Date, Maturity Date
or date of earlier redemption, as the case may be. "Business Day" means any day
that is not a Saturday or Sunday and that is not a day on which banking
institutions in The City of New York or the City of Chicago, Illinois generally
are authorized or obligated by law or executive order to close.
The indebtedness of the Bank evidenced by this Subordinated Note, including
principal and interest, is unsecured and subordinate and junior in right of
payment to the Bank's obligations to its depositors, its obligations under
bankers' acceptances and letters of credit, and its obligations to its other
creditors (including any obligations to any Federal Reserve Bank and the Federal
Deposit Insurance Corporation), whether now outstanding or hereafter incurred,
other than any obligations which rank on a parity with, or junior to, the
Subordinated Notes. In the event of any insolvency proceeding, receivership,
conservatorship, reorganization, readjustment of debt, marshalling of assets and
liabilities or similar proceedings or any liquidation or winding-up of the Bank,
whether voluntary or involuntary, all such obligations (except obligations which
rank on a parity with, or junior to, the Subordinated Notes) shall be entitled
to be paid in full before any payment shall be made on account of the principal
of, or interest on, the Subordinated Notes. In the event of any such
proceeding, after payment in full of all sums owing with respect to such prior
obligations, the holders of the Subordinated Notes, together with the holders of
any obligations of the Bank ranking on a parity with the Subordinated Notes,
shall be entitled to be paid, from the remaining assets of the Bank, the unpaid
principal of, and the unpaid interest on, the Subordinated Notes or such other
obligations before any payment or other distribution, whether in cash, property,
or otherwise, shall be made on account of any capital stock or any obligations
of the Bank ranking junior to the Subordinated Notes.
The Subordinated Notes shall rank on a parity with the subordinated note in
the principal amount of $50,000,000, due January 2, 2000, issued by the Bank to
Northern Trust Corporation (the "Corporation"), the subordinated note in the
principal amount of $25,000,000, due July 1, 2002, issued by the Bank to the
Corporation, the $100,000,000 aggregate principal amount of 6.5% Subordinated
Notes due 2003 issued by the Bank in 1993, and such other obligations which may
be issued by the Bank which are specifically designated as ranking on a parity
with the
-4-
<PAGE>
Subordinated Notes by express provision in the instruments creating or
evidencing such obligations.
This Subordinated Note will not be subject to any sinking fund. If so
provided on the face of this Subordinated Note and subject to the approval of
the Federal Reserve Bank of Chicago, this Subordinated Note may be redeemed by
the Bank on and after the Initial Redemption Date, if any, specified on the face
hereof. If no Initial Redemption Date is specified on the face hereof, this
Subordinated Note may not be redeemed prior to the Maturity Date. On and after
the Initial Redemption Date, if any, and subject to the approval of the Federal
Reserve Bank of Chicago, this Subordinated Note may be redeemed at any time
either in whole or in part from time to time in increments of $1,000 (provided
that any remaining principal amount hereof shall be at least $250,000) at the
option of the Bank at the applicable Redemption Price (as defined below),
together with accrued and unpaid interest hereon at the applicable rate borne by
this Subordinated Note to the date of redemption (each such date, a "Redemption
Date"), on written notice given not more than 60 nor less than 30 calendar days
prior to the Redemption Date by the Bank to the registered holder hereof.
Whenever less than all the Subordinated Notes at any time outstanding are to be
redeemed, the terms of the Subordinated Notes to be so redeemed shall be
selected by the Bank. If less than all the Subordinated Notes with identical
terms at any time outstanding are to be redeemed, the Subordinated Notes to be
so redeemed shall be selected by the Paying Agent by lot or in any usual manner
approved by it. In the event of redemption of this Subordinated Note in part
only, a new Subordinated Note for the unredeemed portion hereof shall be issued
in the name of the holder hereof upon the surrender hereof.
The "Redemption Price" shall initially be the Initial Redemption Percentage
specified on the face hereof of the principal amount of this Subordinated Note
to be redeemed and shall decline at each anniversary of the Initial Redemption
Date specified on the face hereof by the Annual Redemption Percentage Reduction,
if any, specified on the face hereof, of the principal amount to be redeemed
until the Redemption Price is 100% of such principal amount.
This Subordinated Note will not be repayable at the option of the holder
hereof prior to maturity.
If this Subordinated Note is an Original Issue Discount Note and if an
Event of Default with respect to this Subordinated Note shall have occurred and
be continuing, the Default Amount (as defined hereafter) of this Subordinated
Note may be declared due and payable in the manner and with the effect provided
herein. The "Default Amount" shall be equal to the adjusted issue price
-5-
<PAGE>
as of the first day of the accrual period as determined under Proposed Treasury
Regulation Section 1.1272-1(e) (or successor regulation) under the United States
Internal Revenue Code of 1986, as amended, in which the date of acceleration
occurs increased by the daily portion of the original issue discount for each
day in such accrual period ending on the date of acceleration, as determined
under Proposed Treasury Regulation Section 1.1272-1(c) (or successor regulation)
under the United States Internal Revenue Code of 1986, as amended. Upon payment
of (i) the amount of principal or premium, if any, so declared due and payable
and (ii) interest on any overdue principal and overdue interest or premium, if
any, (in each case to the extent that the payment of such interest shall be
legally enforceable), all of the Bank's obligations in respect of the payment of
the principal of, and interest or premium, if any, on, this Subordinated Note
shall terminate.
In case any Subordinated Note shall at any time become mutilated,
destroyed, lost or stolen and such Subordinated Note or evidence satisfactory to
the Bank of the loss, theft or destruction thereof (together with indemnity
satisfactory to the Bank and such other documents or proof as may be required in
the premises) shall be delivered to the Bank, a new Subordinated Note of like
tenor will be issued by the Bank in exchange for the Subordinated Note so
mutilated, or in lieu of the Subordinated Note so destroyed or lost or stolen.
All expenses and reasonable charges associated with procuring the indemnity
referred to above and with the preparation, authentication and delivery of a new
Subordinated Note shall be borne by the holder of the Subordinated Note so
mutilated, destroyed, lost or stolen. If any Subordinated Note which has
matured or is about to mature shall become mutilated, destroyed, lost or stolen,
the Bank may, instead of issuing a substitute Subordinated Note, pay or
authorize the payment of the same (without surrender thereof except in the case
of a mutilated Subordinated Note) upon compliance by the holder thereof with the
provisions of this paragraph.
No recourse shall be had for the payment of the principal of, premium, if
any, or interest on, this Subordinated Note, for any claim based hereon, or
otherwise in respect hereof, against any shareholder, employee, officer or
director, as such, past, present or future, of the Bank or of any successor
corporation, either directly or through the Bank or any successor corporation,
whether by virtue of any constitution, statute or rule of law or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and part of the consideration for the issue hereof,
expressly waived and released.
-6-
<PAGE>
An "Event of Default" with respect to this Subordinated Note will occur if
the Bank shall consent to, or a court or other governmental agency shall enter a
decree or order for, the appointment of a receiver or other similar official in
any liquidation, insolvency or similar proceeding with respect to the Bank or
all or substantially all of its property and, in the case of a decree or order,
such decree or order shall have remained in force for a period of 60 days. If
an Event of Default shall occur and be continuing, the holder of this
Subordinated Note may declare the principal amount of, and accrued interest and
premium, if any, on, this Subordinated Note due and payable immediately by
written notice to the Bank. Upon such declaration and notice, such principal
amount, accrued interest and premium, if any, shall become due and payable seven
calendar days after such notice. Any Event of Default with respect to this
Subordinated Note may be waived by the holder hereof. NO PAYMENT MAY BE MADE ON
THIS SUBORDINATED NOTE IN THE EVENT OF ACCELERATION RESULTING FROM AN EVENT OF
DEFAULT WITHOUT THE PRIOR WRITTEN CONSENT OF THE FEDERAL RESERVE BANK OF
CHICAGO. THERE IS NO RIGHT OF ACCELERATION IN THE CASE OF A DEFAULT IN THE
PAYMENT OF PRINCIPAL OF, OR INTEREST ON, THIS SUBORDINATED NOTE OR IN THE
PERFORMANCE OF ANY OTHER OBLIGATION OF THE BANK UNDER THIS SUBORDINATED NOTE OR
UNDER ANY OTHER SECURITY ISSUED BY THE BANK.
No provision of this Subordinated Note shall alter or impair the obligation
of the Bank, which is absolute and unconditional, to pay the principal of, and
premium, if any, and interest on, this Subordinated Note in U.S. dollars at the
times, places and rate herein prescribed.
The Bank shall cause to be kept at the corporate trust office of the
Subordinated Note Registrar designated below a register (the register maintained
in such corporate trust office or any other office or agency of the Bank in the
Place of Payment herein referred to as the "Subordinated Note Register") in
which, subject to such reasonable regulations as it may prescribe, the Bank
shall provide for the registration of the Subordinated Notes and of transfers of
the Subordinated Notes. The Bank is hereby initially appointed "Subordinated
Note Registrar" for the purpose of registering the Subordinated Notes and
transfers of the Subordinated Notes as herein provided.
The transfer of this Subordinated Note is registrable in the Subordinated
Note Register, upon surrender of this Subordinated Note for registration of
transfer at the office or agency of the Bank in the Place of Payment, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Bank and the Paying Agent duly executed by, the holder
hereof or his attorney duly authorized in writing, and thereupon one or more new
Subordinated Notes of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to
-7-
<PAGE>
the designated transferee or transferees. Notwithstanding the foregoing, the
Bank shall not be required to register the transfer of any Subordinated Note
that has been called for redemption during a period beginning at the opening of
business fifteen calendar days before the day of mailing of a notice of such
redemption and ending at the close of business on the day of such mailing.
No service charge shall be made for any such registration of transfer or
exchange, but the Bank may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection therewith.
The Subordinated Notes are issuable only in registered form without coupons
in minimum denominations of $250,000 and any integral multiple of $1,000 in
excess thereof. Each owner of a beneficial interest in this Subordinated Note
is required to hold a beneficial interest in $250,000 principal amount or any
integral multiple of $1,000 in excess thereof of this Subordinated Note at all
times.
Prior to due presentment of this Subordinated Note for registration of
transfer, the Bank, the Paying Agent or any agent of the Bank or the Paying
Agent may treat the person in whose name this Subordinated Note is registered as
the owner hereof for all purposes, whether or not this Subordinated Note be
overdue, and neither the Bank, the Paying Agent nor any such agent shall be
affected by notice to the contrary.
All notices to the Bank under this Subordinated Note shall be in writing
and addressed to the Bank at 50 South LaSalle Street (Level BB-A), Chicago,
Illinois 60675, Attention: Securities Services, or to such other address of the
Bank as the Bank may notify the holders of the Subordinated Notes.
This Subordinated Note shall be governed by, and construed in accordance
with, the laws of the State of Illinois.
IN WITNESS WHEREOF, the Bank has caused this instrument to be duly
executed.
THE NORTHERN TRUST COMPANY
By:______________________________________
Authorized Signatory
-8-
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
the within Subordinated Note, shall be construed as though they were written out
in full according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not
as tenants in common
UNIF GIFT MIN ACT - _______________ Custodian ______________
(Cust) (Minor)
under Uniform Gifts to Minors Act
__________________________
(State)
Additional abbreviations may also be used
though not in the above list.
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ___________________________________________________________
____________________________________________________________________________
PLEASE INSERT SOCIAL SECURITY NUMBER OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
-------------------------------------
| |
-------------------------------------
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address,
including postal zip code, of assignee)
______________________________________________________________________________
the within Subordinated Note and all rights thereunder, and hereby irrevocably
constitutes and appoints _____________________________________________________
______________________________________________________________________________
______________________________________________________________________________
to transfer said Subordinated Note on the books of the Bank, with full power of
substitution in the premises.
Dated:____________________________
__________________________________________
Notice: The signature to this assignment
must correspond with the name as written
upon the face of the within Subordinated
Note in every particular, without alteration
or enlargement or any change whatsoever.
<PAGE>
Exhibit Number (4)(iv)
To 9/30/95 Form 10-Q
UNLESS THIS SUBORDINATED NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE BANK OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY SUBORDINATED NOTE ISSUED UPON REGISTRATION OF TRANSFER OF, OR
IN EXCHANGE FOR, OR IN LIEU OF, THIS SUBORDINATED NOTE IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
IF THIS SUBORDINATED NOTE IS ISSUED WITH "ORIGINAL ISSUE DISCOUNT" FOR
PURPOSES OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, THE
FOLLOWING SHALL BE COMPLETED: THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR
PURPOSES OF APPLYING SECTIONS 1272, 1273 AND 1275 OF THE UNITED STATES INTERNAL
REVENUE CODE OF 1986, AS AMENDED, TO THIS SUBORDINATED NOTE. THE ISSUE DATE OF
THIS SUBORDINATED NOTE IS _____________. THE ISSUE PRICE OF THIS SUBORDINATED
NOTE IS _____% OF ITS PRINCIPAL AMOUNT. THE AMOUNT OF ORIGINAL ISSUE DISCOUNT
ON THIS SUBORDINATED NOTE IS $_________ PER $1,000 OF THE INITIAL PRINCIPAL
AMOUNT, THE YIELD TO MATURITY IS ____%, AND THE AMOUNT OF THE ORIGINAL ISSUE
DISCOUNT ALLOCABLE TO THE INITIAL SHORT ACCRUAL PERIOD, IF ANY, IS $_____ PER
$1,000 OF THE INITIAL PRINCIPAL AMOUNT, DETERMINED ON THE BASIS OF THE EXACT
METHOD.
No. SUB FLR-______________ REGISTERED
CUSIP NO.: ________________________
THE NORTHERN TRUST COMPANY
GLOBAL SUBORDINATED MEDIUM-TERM BANK NOTE
(FLOATING RATE)
ORIGINAL ISSUE DATE: PRINCIPAL AMOUNT:
INITIAL INTEREST RATE: ______% MATURITY DATE:
INTEREST RATE BASIS: INDEX MATURITY:
SPREAD AND/OR SPREAD REGULAR RECORD DATES (If other than the 15th
MULTIPLIER: day prior to each Interest Payment Date):
MAXIMUM INTEREST RATE: MINIMUM INTEREST RATE:
INTEREST PAYMENT DATES: INTEREST PAYMENT PERIOD:
<PAGE>
INTEREST RESET DATES: INTEREST RESET PERIOD:
INITIAL REDEMPTION DATE: ANNUAL REDEMPTION PERCENTAGE REDUCTION:
INITIAL REDEMPTION PERCENTAGE:
ORIGINAL ISSUE DISCOUNT NOTE: OID AMOUNT:
Yes: ______ No: _____
OTHER PROVISIONS: CALCULATION AGENT:
ALTERNATE RATE EVENT SPREAD:
The Northern Trust Company, an Illinois banking corporation (the "Bank"),
for value received, hereby promises to pay to __________________________________
________________________________________________, or registered assigns, the
principal sum of _______________________________________________________________
________________________________________ United States Dollars on the Maturity
Date specified above and to pay interest thereon from the Original Issue Date
specified above or from the most recent interest payment date (or, if the
Interest Reset Period specified above is daily or weekly, from, and including,
the day following the most recent Regular Record Date) to which interest on this
Subordinated Note (or any predecessor Subordinated Note) has been paid or duly
provided for (each, an "Interest Payment Date"), on the Interest Payment Dates
specified above and at maturity or upon earlier redemption, if applicable,
commencing on the first Interest Payment Date next succeeding the Original Issue
Date (or, if the Original Issue Date is between a Regular Record Date and the
Interest Payment Date immediately following such Regular Record Date, on the
second Interest Payment Date following the Original Issue Date), at a rate per
annum equal to the Initial Interest Rate specified above until the first
Interest Reset Date following the Original Issue Date and, on and after such
Interest Reset Date, at the rate determined in accordance with the provisions
set forth herein, until the principal hereof is paid or made available for
payment, and (to the extent that the payment of such interest shall be legally
enforceable) at the last rate in effect prior to any payment default on any
overdue principal and premium, if any, and on any overdue installment of
interest. The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will be paid to the person in whose name this
Subordinated Note (or any predecessor Subordinated Note) is registered at the
close of business on the Regular Record Date for such interest, which shall be
the 15th calendar day (whether or not a Business Day (as defined below)) before
such Interest Payment Date (unless otherwise specified on the face hereof);
provided, however, that
-2-
<PAGE>
interest payable at maturity or upon earlier redemption, if applicable, will be
payable to the person to whom principal shall be payable. Any such interest not
so punctually paid or duly provided for shall forthwith cease to be payable to
the holder on such Regular Record Date and may either be paid to the person in
whose name this Subordinated Note (or any predecessor Subordinated Note) is
registered at the close of business on a special record date for the payment of
such defaulted interest (the "Special Record Date") to be fixed by the Bank,
notice of which shall be given to the holders of Subordinated Notes not less
than 10 calendar days prior to such Special Record Date, or be paid at any time
in any other lawful manner.
Payment of principal of, and premium, if any, and interest on, this
Subordinated Note will be made in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. The Bank will at all times appoint and maintain a paying agent
(the "Paying Agent") authorized by the Bank to pay the principal of, and
premium, if any, and interest on, this Subordinated Note on behalf of the Bank
and having an office or agency (the "Paying Agent Office") in The City of New
York or the City of Chicago, Illinois (the "Place of Payment"), where this
Subordinated Note may be presented or surrendered for payment and where notices,
designations or requests in respect of payments with respect to this
Subordinated Note may be served. The Bank has initially appointed itself as
such Paying Agent, with the Paying Agent Office currently located at 50 South
LaSalle Street (Level BB-A), Chicago, Illinois 60675, Attention: Securities
Services.
THIS SUBORDINATED NOTE IS A DIRECT, UNCONDITIONAL AND UNSECURED GENERAL
OBLIGATION OF THE BANK, DOES NOT EVIDENCE A DEPOSIT AND IS NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. THIS
SUBORDINATED NOTE IS SUBORDINATE TO THE CLAIMS OF DEPOSITORS AND GENERAL
CREDITORS OF THE BANK.
Payment of the principal of, and premium, if any, and interest on, this
Subordinated Note due at maturity or upon earlier redemption, if applicable,
will be made in immediately available funds upon presentation and surrender of
this Subordinated Note to the Paying Agent at the Paying Agent Office in the
Place of Payment; provided that this Subordinated Note is presented to the
Paying Agent in time for the Paying Agent to make such payment in accordance
with its normal procedures. Payments of interest on this Subordinated Note
(other than at maturity or upon earlier redemption) will be made by wire
transfer to such account as has been appropriately designated to the Paying
Agent by the person entitled to such payments.
-3-
<PAGE>
This Subordinated Note is one of a duly authorized issue of Subordinated
Medium-Term Bank Notes due from five to fifteen years from date of issue of the
Bank (herein called the "Subordinated Notes").
Unless otherwise indicated on the face hereof, if the rate of interest on
this Subordinated Note resets daily, weekly or monthly, the Interest Payment
Date for this Subordinated Note will be the third Wednesday of each month; if
the rate of interest on this Subordinated Note resets quarterly, the Interest
Payment Date for this Subordinated Note will be the third Wednesday of March,
June, September and December of each year; if the rate of interest on this
Subordinated Note resets semi-annually, the Interest Payment Date for this
Subordinated Note will be the third Wednesday of each of two months of each year
specified on the face hereof that are six months apart; and if the rate of
interest on this Subordinated Note resets annually, the Interest Payment Date
for this Subordinated Note will be the third Wednesday of the month specified on
the face hereof. If any Interest Payment Date, Maturity Date or date of earlier
redemption of this Subordinated Note falls on a day that is not a Business Day,
such Interest Payment Date, Maturity Date or date of earlier redemption will be
the next succeeding Business Day; provided, however, that, if the Interest Rate
Basis specified on the face hereof is LIBOR and such next succeeding Business
Day is in the next succeeding calendar month, such Interest Payment Date,
Maturity Date or date of earlier redemption will be the immediately preceding
Business Day. "Business Day" means any day that is not a Saturday or Sunday and
that is not a day on which banking institutions in The City of New York or the
City of Chicago, Illinois generally are authorized or obligated by law or
executive order to close, and with respect to Subordinated Notes with respect to
which the Interest Rate Basis specified on the face hereof is LIBOR, any day on
which dealings in deposits in U.S. dollars are transacted in the London
interbank market (a "London Business Day").
The indebtedness of the Bank evidenced by this Subordinated Note,
including principal and interest, is unsecured and subordinate and junior in
right of payment to the Bank's obligations to its depositors, its obligations
under bankers' acceptances and letters of credit, and its obligations to its
other creditors (including any obligations to any Federal Reserve Bank and the
Federal Deposit Insurance Corporation), whether now outstanding or hereafter
incurred, other than any obligations which rank on a parity with, or junior to,
the Subordinated Notes. In the event of any insolvency proceeding,
receivership, conservatorship, reorganization, readjustment of debt, marshalling
of assets and liabilities or similar proceedings or any liquidation or winding-
up of the Bank, whether voluntary or involuntary, all such obligations (except
obligations which rank
-4-
<PAGE>
on a parity with, or junior to, the Subordinated Notes) shall be entitled to be
paid in full before any payment shall be made on account of the principal of, or
interest on, the Subordinated Notes. In the event of any such proceeding, after
payment in full of all sums owing with respect to such prior obligations, the
holders of the Subordinated Notes, together with the holders of any obligations
of the Bank ranking on a parity with the Subordinated Notes, shall be entitled
to be paid, from the remaining assets of the Bank, the unpaid principal of, and
the unpaid interest on, the Subordinated Notes or such other obligations before
any payment or other distribution, whether in cash, property, or otherwise,
shall be made on account of any capital stock or any obligations of the Bank
ranking junior to the Subordinated Notes.
The Subordinated Notes shall rank on a parity with the subordinated note
in the principal amount of $50,000,000, due January 2, 2000, issued by the Bank
to Northern Trust Corporation (the "Corporation"), the subordinated note in the
principal amount of $25,000,000, due July 1, 2002, issued by the Bank to the
Corporation, the $100,000,000 aggregate principal amount of 6.5% Subordinated
Notes due 2003 issued by the Bank in 1993, and such other obligations which may
be issued by the Bank which are specifically designated as ranking on a parity
with the Subordinated Notes by express provision in the instruments creating or
evidencing such obligations.
This Subordinated Note will not be subject to any sinking fund. If so
provided on the face of this Subordinated Note and subject to the approval of
the Federal Reserve Bank of Chicago, this Subordinated Note may be redeemed by
the Bank on and after the Initial Redemption Date, if any, specified on the face
hereof. If no Initial Redemption Date is specified on the face hereof, this
Subordinated Note may not be redeemed prior to the Maturity Date. On and after
the Initial Redemption Date, if any, and subject to the approval of the Federal
Reserve Bank of Chicago, this Subordinated Note may be redeemed at any time
either in whole or in part from time to time in increments of $1,000 (provided
that any remaining principal amount hereof shall be at least $250,000) at the
option of the Bank at the applicable Redemption Price (as defined below),
together with accrued and unpaid interest hereon at the applicable rate borne by
this Subordinated Note to the date of redemption (each such date, a "Redemption
Date"), on written notice given not more than 60 nor less than 30 calendar days
prior to the Redemption Date by the Bank to the registered holder hereof.
Whenever less than all the Subordinated Notes at any time outstanding are to be
redeemed, the terms of the Subordinated Notes to be so redeemed shall be
selected by the Bank. If less than all the Subordinated Notes with identical
terms at any time outstanding are to be redeemed, the Subordinated Notes to be
so redeemed shall be selected by the
-5-
<PAGE>
Paying Agent by lot or in any usual manner approved by it. In the event of
redemption of this Subordinated Note in part only, a new Subordinated Note for
the unredeemed portion hereof shall be issued in the name of the holder hereof
upon the surrender hereof.
The "Redemption Price" shall initially be the Initial Redemption
Percentage specified on the face hereof of the principal amount of this
Subordinated Note to be redeemed and shall decline at each anniversary of the
Initial Redemption Date specified on the face hereof by the Annual Redemption
Percentage Reduction, if any, specified on the face hereof, of the principal
amount to be redeemed until the Redemption Price is 100% of such principal
amount.
This Subordinated Note will not be repayable at the option of the holder
hereof prior to maturity.
The rate of interest on this Subordinated Note will be reset daily,
weekly, monthly, quarterly, semi-annually or annually (each such period, an
"Interest Reset Period" for this Subordinated Note, and the first calendar day
of an Interest Reset Period, an "Interest Reset Date"), as specified on the face
hereof. Unless otherwise indicated on the face hereof, if this Subordinated
Note resets daily, the Interest Reset Date will be each Business Day; if this
Subordinated Note resets weekly and the Interest Rate Basis is not the Treasury
Rate, the Interest Reset Date will be the Wednesday of each week; if this
Subordinated Note resets weekly and the Interest Rate Basis is the Treasury
Rate, the Interest Reset Date will be the Tuesday of each week (except as
provided below); if this Subordinated Note resets monthly and the Interest Rate
Basis is not the 11th District Cost of Funds Rate, the Interest Reset Date will
be the third Wednesday of each month; if this Subordinated Note resets monthly
and the Interest Rate Basis is the 11th District Cost of Funds Rate, the
Interest Reset Date will be the first calendar day of each month; if this
Subordinated Note resets quarterly, the Interest Reset Date will be the third
Wednesday of March, June, September and December; if this Subordinated Note
resets semi-annually, the Interest Reset Date will be the third Wednesday of
each of two months of each year which are six months apart, as specified on the
face hereof; and if this Subordinated Note resets annually, the Interest Reset
Date will be the third Wednesday of one month of each year, as specified on the
face hereof; provided, however, that (i) the interest rate in effect from the
Original Issue Date to the first Interest Reset Date will be the Initial
Interest Rate specified on the face hereof, and (ii) the interest rate in effect
for the ten calendar days immediately prior to maturity or earlier redemption
hereof will be the interest rate in effect on the tenth calendar day preceding
such Maturity Date or date of earlier redemption, as
-6-
<PAGE>
the case may be. If any Interest Reset Date with respect to this Subordinated
Note would otherwise be a day that is not a Business Day, such Interest Reset
Date will be the next succeeding Business Day, except that in the case that the
Interest Rate Basis specified on the face hereof is LIBOR, if such Business Day
is in the next succeeding calendar month, such Interest Reset Date will be the
immediately preceding Business Day.
Except as otherwise specified in this paragraph, the rate of interest on
this Subordinated Note for each Interest Reset Date shall be the rate determined
in accordance with the provisions set forth under the applicable heading below
corresponding to the Interest Rate Basis specified on the face hereof:
Commercial Paper Rate. If the Interest Rate Basis of this Subordinated
Note is the Commercial Paper Rate, the interest rate hereon for any Interest
Reset Date shall equal the Commercial Paper Rate (as determined below), as
adjusted (x) by the addition or subtraction of the Spread, if any, specified on
the face hereof and/or (y) by the multiplication by the Spread Multiplier, if
any, specified on the face hereof. "Commercial Paper Rate" means, with respect
to any Commercial Paper Interest Determination Date (as defined below), the
Money Market Yield (calculated as described below) of the rate on the relevant
Commercial Paper Interest Determination Date for commercial paper having the
Index Maturity specified on the face hereof as such rate is published by the
Board of Governors of the Federal Reserve System in the weekly statistical
release entitled "Statistical Release H.15(519), Selected Interest Rates" or any
successor publication published by the Board of Governors of the Federal Reserve
System ("H.15(519)") under the heading "Commercial Paper". If such rate is not
published prior to 3:00 P.M., New York City time, on the Calculation Date
pertaining to such Commercial Paper Interest Determination Date, then the
Commercial Paper Rate will be the Money Market Yield (calculated as described
below) of the rate on such Commercial Paper Interest Determination Date for
commercial paper having the Index Maturity specified on the face hereof as such
rate is published by the Federal Reserve Bank of New York in its daily
statistical release entitled "Composite 3:30 P.M. Quotations for U.S. Government
Securities" or any successor publication published by the Federal Reserve Bank
of New York ("Composite Quotations") under the heading "Commercial Paper". If
such rate is published in neither H.15(519) nor in Composite Quotations by 3:00
P.M., New York City time, on such Calculation Date, the Commercial Paper Rate
for such Commercial Paper Interest Determination Date will be the Money Market
Yield of the arithmetic mean of the offered rates as of 11:00 A.M., New York
City time, on such Commercial Paper Interest Determination Date, of three
leading dealers of commercial paper in The City of New York (which may include
one or more of the Agents (as defined below)) selected by the
-7-
<PAGE>
Calculation Agent for commercial paper having the Index Maturity specified on
the face hereof placed for an industrial issuer whose senior unsecured bond
rating is "AA", or the equivalent, from at least two nationally recognized
rating agencies; provided, however, that if the dealers selected as aforesaid by
the Calculation Agent are not quoting as mentioned in this sentence, the
Commercial Paper Rate determined on such Commercial Paper Interest Determination
Date will be the Commercial Paper Rate determined on the immediately preceding
Commercial Paper Interest Determination Date or, in the case of the first
Commercial Paper Interest Determination Date, the Initial Interest Rate
specified on the face hereof.
"Money Market Yield" shall be a yield (expressed as a percentage)
calculated in accordance with the following formula:
D x 360
Money Market Yield = _______________ x 100
360 - (D x M)
where "D" refers to the per annum rate for commercial paper quoted on a bank
discount basis and expressed as a decimal; and "M" refers to the actual number
of days in the interest period for which interest is being calculated.
LIBOR. If the Interest Rate Basis of this Subordinated Note is LIBOR,
the interest rate hereon for any Interest Reset Date shall equal LIBOR (as
determined below), as adjusted (x) by the addition or subtraction of the Spread,
if any, specified on the face hereof and/or (y) by the multiplication by the
Spread Multiplier, if any, specified on the face hereof. LIBOR shall be
determined by the Calculation Agent in accordance with the following provisions:
(a) With respect to any LIBOR Interest Determination Date (as defined
below), LIBOR will be either: (i) if "LIBOR Reuters" is specified on the
face hereof, the arithmetic mean of the offered rates for deposits in U.S.
dollars having the Index Maturity specified on the face hereof, commencing
on the second London Business Day immediately following such LIBOR Interest
Determination Date, that appear on the Reuters Screen LIBO Page (as defined
below) as of 11:00 A.M. London time on such LIBOR Interest Determination
Date, if at least two such offered rates appear on the Reuters Screen LIBO
Page, or (ii) if "LIBOR Telerate" is specified on the face hereof, the rate
for deposits in U.S. dollars having the Index Maturity specified on the
face hereof, commencing on the second London Business Day immediately
following such LIBOR Interest Determination Date, that appears on Telerate
Page 3750 (as defined below) as of 11:00 A.M. London time, on such LIBOR
Interest
-8-
<PAGE>
Determination Date. The "Reuters Screen LIBO Page" means the display
designated as page "LIBO" on the Reuters Monitor Money Rates Service (or
such other page as may replace the LIBO page on that service for purposes
of displaying London interbank offered rates of major banks). "Telerate
Page 3750" means the display designated as page 3750 on the Dow Jones
Telerate Service (or such other page or pages as may replace the 3750 page
on that service or such other service or services as may be nominated by
the British Bankers' Association for the purpose of displaying London
interbank offered rates for U.S. dollar deposits). If neither LIBOR Reuters
nor LIBOR Telerate is specified on the face hereof, LIBOR will be
determined as if LIBOR Reuters has been specified. Notwithstanding the
foregoing, if fewer than two offered rates appear on the Reuters Screen
LIBO Page, or no rate appears on Telerate Page 3750, as applicable, LIBOR
in respect of a related LIBOR Interest Determination Date will be
determined as if the parties had specified the rate described in paragraph
(b) below.
(b) With respect to a LIBOR Interest Determination Date on which fewer
than two offered rates appear on the Reuters Screen LIBO Page, as specified
in paragraph (a)(i) above, or on which no rate appears on Telerate Page
3750, as specified in paragraph (a)(ii) above, as the case may be, the
Calculation Agent will request the principal London offices of each of four
major reference banks in the London interbank market, as selected by the
Calculation Agent, to provide the Calculation Agent with its offered
quotation for deposits for the period of the Index Maturity specified on
the face hereof, commencing on the second London Business Day immediately
following such LIBOR Interest Determination Date, to prime banks in the
London interbank market at approximately 11:00 A.M., London time, on such
LIBOR Interest Determination Date and in a principal amount of not less
than $1,000,000 that is representative for a single transaction in such
market at such time. If at least two such quotations are provided, LIBOR
determined on such LIBOR Interest Determination Date will be the arithmetic
mean of such quotations. If fewer than two quotations are provided, LIBOR
determined on such LIBOR Interest Determination Date will be the arithmetic
mean of the rates quoted at approximately 11:00 A.M. New York City time on
such LIBOR Interest Determination Date by three major banks in The City of
New York selected by the Calculation Agent for loans in U.S. dollars to
leading European banks, having the Index Maturity specified on the face
hereof, commencing on the second London Business Day following such LIBOR
Interest Determination Date, and in a principal amount of not less than
$1,000,000 that is representative for a single transaction in such market
at such time; provided, however,
-9-
<PAGE>
that if the banks so selected by the Calculation Agent are not quoting as
mentioned in this sentence, LIBOR determined on such LIBOR Interest
Determination Date will be LIBOR determined on the immediately preceding
LIBOR Interest Determination Date or, in the case of the first LIBOR
Interest Determination Date, the Initial Interest Rate specified on the
face hereof.
Treasury Rate. If the Interest Rate Basis of this Subordinated Note is the
Treasury Rate, the interest rate hereon for any Interest Reset Date shall equal
the Treasury Rate (as determined below) as adjusted (x) by the addition or
subtraction of the Spread, if any, specified on the face hereof and/or (y) by
the multiplication by the Spread Multiplier, if any, specified on the face
hereof. "Treasury Rate" means the rate for the most recent auction of direct
obligations of the United States ("Treasury bills") having the Index Maturity
specified on the face hereof, as such rate is published in H.15(519) under the
heading "U.S. Government Securities/Treasury Bills/Auction Average (Investment)"
or, if such rate is not so published by 3:00 P.M., New York City time, on the
Calculation Date, the auction average rate (expressed as a bond equivalent, on
the basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis) for such auction as otherwise announced by the United States Department
of the Treasury by 3:00 P.M., New York City time, on such Calculation Date. If
the results of the auction of Treasury bills having the Index Maturity specified
on the face hereof are neither published in H.15(519) nor otherwise published or
reported as provided above by 3:00 P.M., New York City time, on such Calculation
Date, or if no such auction is held in a particular week, then the Treasury Rate
will be calculated by the Calculation Agent and will be a yield to maturity
(expressed as a bond equivalent, on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) of the arithmetic mean of the
secondary market bid rates as of 3:30 P.M., New York City time, on such Treasury
Interest Determination Date (as defined below), of three leading primary United
States government securities dealers in The City of New York selected by the
Calculation Agent, for the issue of Treasury bills with a remaining maturity
closest to the Index Maturity specified on the face hereof or, if there are two
such issues which are equidistant from the Index Maturity specified on the face
hereof, then the longer of the two; provided, however, that if the dealers
selected as aforesaid by the Calculation Agent are not quoting as mentioned in
this sentence, the Treasury Rate determined on such Treasury Interest
Determination Date will be the Treasury Rate determined on the immediately
preceding Treasury Interest Determination Date or, in the case of the first
Treasury Interest Determination Date, the Initial Interest Rate specified on the
face hereof.
-10-
<PAGE>
CD Rate. If the Interest Rate Basis of this Subordinated Note is the CD
Rate, the interest rate hereon for any Interest Reset Date shall equal the CD
Rate (as determined below), as adjusted (x) by the addition or subtraction of
the Spread, if any, specified on the face hereof and/or (y) by the
multiplication by the Spread Multiplier, if any, specified on the face hereof.
"CD Rate" means the rate on the relevant CD Interest Determination Date (as
defined below) for negotiable certificates of deposit having the Index Maturity
specified on the face hereof, as published in H.15(519) under the heading "CDs
(Secondary Market)". If such rate is not so published before 3:00 P.M., New
York City time, on the Calculation Date pertaining to such CD Interest
Determination Date, then the CD Rate will be the rate on such CD Interest
Determination Date for negotiable certificates of deposit having the Index
Maturity specified on the face hereof as published in Composite Quotations under
the heading "Certificates of Deposit". If such rate is published neither in
H.15(519) nor in Composite Quotations by 3:00 P.M., New York City time, on such
Calculation Date, the CD Rate will be calculated by the Calculation Agent and
will be the arithmetic mean of the secondary market offered rates as of 10:00
A.M., New York City time, on such CD Interest Determination Date, of three
leading non-bank dealers of negotiable U.S. dollar certificates of deposit in
The City of New York (which may include one or more of the Agents) selected by
the Calculation Agent for negotiable certificates of deposit of the four highest
rated banks (as rated by two nationally recognized rating agencies) of the 25
largest United States banks based on the most recent year-end survey published
in The American Banker (or a comparable publication) with a remaining maturity
closest to the Index Maturity specified on the face hereof in a denomination of
$5,000,000; provided, however, that, if the dealers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the CD Rate
determined on such CD Interest Determination Date will be the CD Rate determined
on the immediately preceding CD Interest Determination Date or, in the case of
the first CD Interest Determination Date, the Initial Interest Rate specified on
the face hereof.
Federal Funds Rate. If the Interest Rate Basis of this Subordinated Note
is the Federal Funds Rate, the interest rate hereon for any Interest Reset Date
shall equal the Federal Funds Rate (as determined below, as adjusted (x) by the
addition or subtraction of the Spread, if any, specified on the face hereof
and/or (y) by the multiplication by the Spread Multiplier, if any, specified on
the face hereof. "Federal Funds Rate" means the rate on the relevant Federal
Funds Interest Determination Date (as defined below) for Federal Funds having
the Index Maturity specified on the face hereof, as published in H.15(519) under
the heading "Federal Funds (Effective)". If such rate is not published by 3:00
P.M., New York City time, on the
-11-
<PAGE>
Calculation Date pertaining to such Federal Funds Interest Determination Date,
then the Federal Funds Rate will be the rate on such Federal Funds Interest
Determination Date as published in Composite Quotations under the heading
"Federal Funds/Effective Rate". If such rate is published neither in H.15(519)
nor in Composite Quotations by 3:00 P.M., New York City time, on such
Calculation Date, the Federal Funds Rate will be calculated by the Calculation
Agent and will be the arithmetic mean of the rates, as of 3:00 P.M., New York
City time, on such Federal Funds Interest Determination Date, for the last
transaction in overnight Federal Funds arranged by three leading brokers of
Federal Funds transactions in The City of New York (which may include one or
more of the Agents) selected by the Calculation Agent; provided, however, that
if the brokers selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the Federal Funds Rate determined on such Federal
Funds Interest Determination Date will be the Federal Funds Rate determined on
the immediately preceding Federal Funds Interest Determination Date or, in the
case of the first Federal Funds Interest Determination Date, the Initial
Interest Rate specified on the face hereof.
Prime Rate. If the Interest Rate Basis of this Subordinated Note is the
Prime Rate, the interest rate hereon for any Interest Reset Date shall equal the
Prime Rate (as determined below), as adjusted (x) by the addition or subtraction
of the Spread, if any, specified on the face hereof and/or (y) by the
multiplication by the Spread Multiplier, if any, specified on the face hereof.
"Prime Rate" means the rate set forth on the relevant Prime Interest
Determination Date (as defined below) in H.15(519) under the heading "Bank Prime
Loan". If such rate is not published prior to 9:00 A.M., New York City time, on
the Calculation Date pertaining to such Prime Interest Determination Date, then
the Prime Rate will be determined by the Calculation Agent and will be the
arithmetic mean of the rates of interest publicly announced by each bank that
appears on the Reuters Screen NYMF Page (as defined below) as such bank's prime
rate or base lending rate as in effect for such Prime Interest Determination
Date. If fewer than four such rates but two or more such rates appear on the
Reuters Screen NYMF Page on such Prime Interest Determination Date, the Prime
Rate will be determined by the Calculation Agent and will be the arithmetic mean
of the prime rates quoted on the basis of the actual number of days in the year
divided by a 360-day year as of the close of business on such Prime Interest
Determination Date by three major money center banks in The City of New York
selected by the Calculation Agent. If fewer than two such rates appear on the
Reuters Screen NYMF Page, the Prime Rate will be determined by the Calculation
Agent on the basis of the rates furnished in The City of New York by the
appropriate number of substitute banks or trust companies organized and doing
business under the laws of
-12-
<PAGE>
the United States, or any State thereof, having total equity capital of at least
$500,000,000 and being subject to supervision or examination by Federal or State
authority, selected by the Calculation Agent to provide such rate or rates;
provided, however, that if the banks or trust companies selected as aforesaid by
the Calculation Agent are not quoting as mentioned in this sentence, the Prime
Rate determined on such Prime Interest Determination Date will be the Prime Rate
determined on the immediately preceding Prime Interest Determination Date or, in
the case of the first Prime Interest Determination Date, the Initial Interest
Rate specified on the face hereof. "Reuters Screen NYMF Page" means the display
designated as page "NYMF" on the Reuters Monitor Money Rates Service (or such
other page as may replace the NYMF page on that service for the purpose of
displaying prime rates or base lending rates of major United States banks).
11th District Cost of Funds Rate Notes. If the Interest Rate Basis of this
Subordinated Note is the 11th District Cost of Funds Rate, the interest rate
hereon for any Interest Reset Date shall equal the 11th District Cost of Funds
Rate (as determined below), as adjusted (x) by the addition or subtraction of
the Spread, if any, specified on the face hereof and/or (y) by the
multiplication by the Spread Multiplier, if any, specified on the face hereof.
"11th District Cost of Funds Rate" means the rate equal to the monthly
weighted average cost of funds for the calendar month immediately preceding the
month in which the relevant 11th District Cost of Funds Interest Determination
Date (as defined below) falls, as set forth under the caption "11th District" on
Telerate Page 7058 (as defined below) as of 11:00 A.M., San Francisco time, on
such 11th District Cost of Funds Interest Determination Date. If such rate does
not appear on Telerate Page 7058 on any related 11th District Cost of Funds
Interest Determination Date, the 11th District Cost of Funds Rate for such 11th
District Cost of Funds Interest Determination Date shall be the monthly weighted
average cost of funds paid by member institutions of the 11th Federal Home Loan
Bank District that was most recently announced (the "11th District Cost of Funds
Index") by the Federal Home Loan Bank of San Francisco (the "FHLB of San
Francisco") as such cost of funds for the calendar month immediately preceding
the date of such announcement. If the FHLB of San Francisco fails to announce
such rate for the calendar month immediately preceding such 11th District Cost
of Funds Interest Determination Date, then the 11th District Cost of Funds Rate
determined as of such 11th District Cost of Funds Interest Determination Date
will be the 11th District Cost of Funds Rate determined on the immediately
preceding 11th District Cost of Funds Interest Determination Date or, in the
case of the first
-13-
<PAGE>
11th District Cost of Funds Interest Determination Date, the Initial Interest
Rate specified on the face hereof.
"Telerate Page 7058" means the display designated as page "7058" on the Dow
Jones Telerate Service (or such other page as may replace the 7058 page on that
service for the purpose of displaying the monthly weighted average cost of funds
paid by member institutions of the 11th Federal Home Loan Bank District).
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, specified on the face hereof and
shall not be lower than the Minimum Interest Rate, if any, specified on the face
hereof. In addition, the interest rate hereon will in no event be higher than
the maximum rate permitted by Illinois law, as the same may be modified by
United States law of general application.
The Bank will at all times appoint and maintain a banking institution as
Calculation Agent hereunder. Unless otherwise specified on the face hereof, the
Bank has initially appointed itself as Calculation Agent. Upon the request of
the holder of this Subordinated Note, the Calculation Agent will provide the
interest rate then in effect, and, if different, the interest rate which will
become effective as a result of a determination made on the most recent Interest
Determination Date with respect to this Subordinated Note.
Unless otherwise specified on the face hereof, all percentages resulting
from any calculation on this Subordinated Note will be rounded, if necessary, to
the nearest one-hundred thousandth of a percentage point, with five one-
millionths of a percentage point rounded upwards (e.g., 9.876545% (or .09876545)
being rounded to 9.87655% (or .0987655) and 9.876544% (or .09876544) being
rounded to 9.87654% (or .0987654)), and all dollar amounts used in or resulting
from such calculation on this Subordinated Note will be rounded to the nearest
cent (with one-half cent being rounded upwards). The interest rate in effect on
any Interest Reset Date will be the applicable rate as reset on such Interest
Reset Date. The interest rate applicable to any other day is the interest rate
from the immediately preceding Interest Reset Date (or, if none, the Initial
Interest Rate). The Calculation Agent's determination of any interest rate will
be final and binding in the absence of manifest error.
The Interest Determination Date pertaining to an Interest Reset Date if the
rate of interest hereon shall be determined in accordance with the provisions
under the headings above entitled "Commercial Paper Rate" (the "Commercial Paper
Interest Determination Date"), "CD Rate" (the "CD Interest Determination Date"),
"Federal Funds Rate" (the "Federal Funds Interest Determination Date") or "Prime
Rate" (the "Prime Interest
-14-
<PAGE>
Determination Date") will be the second Business Day preceding such Interest
Reset Date. The Interest Determination Date pertaining to an Interest Reset Date
if the rate of interest hereon shall be determined in accordance with the
provisions under the heading above entitled "11th District Cost of Funds Rate"
(the "11th District Cost of Funds Interest Determination Date") will be the last
working day of the month immediately preceding such Interest Reset Date on which
the FHLB of San Francisco publishes the 11th District Cost of Funds Index. The
Interest Determination Date pertaining to an Interest Reset Date if the rate of
interest hereon shall be determined in accordance with the provisions under the
heading above entitled "LIBOR" (the "LIBOR Interest Determination Date") will be
the second London Business Day preceding such Interest Reset Date. The Interest
Determination Date pertaining to an Interest Reset Date if the rate of interest
hereon shall be determined in accordance with the provisions under the heading
above entitled "Treasury Rate" (the "Treasury Interest Determination Date") will
be that day of the week in which such Interest Reset Date falls on which
Treasury bills would normally be auctioned. Treasury bills are normally sold at
auction on Monday of each week, unless that day is a legal holiday, in which
case the auction is usually held on the following Tuesday, except that such
auction may be held on the preceding Friday. If, as the result of a legal
holiday, an auction is so held on the preceding Friday, such Friday will be the
Treasury Interest Determination Date pertaining to the Interest Reset Date
occurring in the next succeeding week. If an auction date shall fall on any
Interest Reset Date for a Subordinated Note with respect to which the Interest
Rate Basis specified on the face hereof is the Treasury Rate, then such Interest
Reset Date shall instead be the first Business Day immediately following such
auction date.
The Calculation Date pertaining to the Interest Determination Date for any
Subordinated Note shall be the tenth calendar day after such Interest
Determination Date or, if any such day is not a Business Day, the next
succeeding Business Day.
Payments of interest hereon with respect to any Interest Payment Date will
include interest accrued from, and including, the Original Issue Date or from,
and including, the last date on which interest has been paid to, but excluding,
such Interest Payment Date; provided, however, that, if the Interest Reset
Period with respect to this Subordinated Note is daily or weekly, the interest
payable on any Interest Payment Date, other than interest payable on any date on
which principal of this Subordinated Note is payable, will include interest
accrued from, and including, the Original Issue Date or from, but excluding, the
last date in respect of which interest has been paid or made available for
payment, as the case may be, to, and including, the Regular Record Date next
preceding such Interest Payment Date,
-15-
<PAGE>
except that the interest payable at maturity or upon earlier redemption will
include interest accrued to, but excluding, the Maturity Date or the date of
earlier redemption, as the case may be.
Accrued interest on this Subordinated Note from the Original Issue Date or
from the last date to which interest has been paid or duly provided is
calculated by multiplying the face amount of this Subordinated Note by an
accrued interest factor. Such accrued interest factor is computed by adding the
interest factor calculated for each day from the Original Issue Date or from the
last date to which interest has been paid or duly provided for, as the case may
be, to the date for which accrued interest is being calculated in the period for
which interest is being calculated. The interest factor for each such day is
computed by dividing the interest rate applicable to such date by 360, in the
case that the Interest Rate Basis specified on the face hereof is the Commercial
Paper Rate, LIBOR, CD Rate, Federal Funds Rate, Prime Rate or 11th District Cost
of Funds Rate, or by the actual number of days in the year, in the case that the
Interest Rate Basis specified on the face hereof is the Treasury Rate.
If this Subordinated Note is an Original Issue Discount Note and if an
Event of Default with respect to this Subordinated Note shall have occurred and
be continuing, the Default Amount (as defined hereafter) of this Subordinated
Note may be declared due and payable in the manner and with the effect provided
herein. The "Default Amount" shall be equal to the adjusted issue price as of
the first day of the accrual period as determined under Proposed Treasury
Regulation Section 1.1272-1(e) (or successor regulation) under the United States
Internal Revenue Code of 1986, as amended, in which the date of acceleration
occurs increased by the daily portion of the original issue discount for each
day in such accrual period ending on the date of acceleration, as determined
under Proposed Treasury Regulation Section 1.1272-1(c) (or successor regulation)
under the United States Internal Revenue Code of 1986, as amended. Upon payment
of (i) the amount of principal or premium, if any, so declared due and payable
and (ii) interest on any overdue principal and overdue interest or premium, if
any (in each case to the extent that the payment of such interest shall be
legally enforceable), all of the Bank's obligations in respect of the payment of
the principal of, and interest or premium, if any, on, this Subordinated Note
shall terminate.
In case any Subordinated Note shall at any time become mutilated,
destroyed, lost or stolen and such Subordinated Note or evidence satisfactory to
the Bank of the loss, theft or destruction thereof (together with indemnity
satisfactory to the Bank and such other documents or proof as may be required in
the premises) shall be delivered to the Bank, a new Subordinated Note
-16-
<PAGE>
of like tenor will be issued by the Bank in exchange for the Subordinated Note
so mutilated, or in lieu of the Subordinated Note so destroyed or lost or
stolen. All expenses and reasonable charges associated with procuring the
indemnity referred to above and with the preparation, authentication and
delivery of a new Subordinated Note shall be borne by the holder of the
Subordinated Note so mutilated, destroyed, lost or stolen. If any Subordinated
Note which has matured or is about to mature shall become mutilated, destroyed,
lost or stolen, the Bank may, instead of issuing a substitute Subordinated Note,
pay or authorize the payment of the same (without surrender thereof except in
the case of a mutilated Subordinated Note) upon compliance by the holder thereof
with the provisions of this paragraph.
No recourse shall be had for the payment of the principal of, premium, if
any, or interest on, this Subordinated Note, for any claim based hereon, or
otherwise in respect hereof, against any shareholder, employee, officer or
director, as such, past, present or future, of the Bank or of any successor
corporation, either directly or through the Bank or any successor corporation,
whether by virtue of any constitution, statute or rule of law or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.
An "Event of Default" with respect to this Subordinated Note will occur if
the Bank shall consent to, or a court or other governmental agency shall enter a
decree or order for, the appointment of a receiver or other similar official in
any liquidation, insolvency or similar proceeding with respect to the Bank or
all or substantially all of its property and, in the case of a decree or order,
such decree or order shall have remained in force for a period of 60 days. If
an Event of Default shall occur and be continuing, the holder of this
Subordinated Note may declare the principal amount of, and accrued interest and
premium, if any, on, this Subordinated Note due and payable immediately by
written notice to the Bank. Upon such declaration and notice, such principal
amount, accrued interest and premium, if any, shall become due and payable seven
calendar days after such notice. Any Event of Default with respect to this
Subordinated Note may be waived by the holder hereof. NO PAYMENT MAY BE MADE ON
THIS SUBORDINATED NOTE IN THE EVENT OF ACCELERATION RESULTING FROM AN EVENT OF
DEFAULT WITHOUT THE PRIOR WRITTEN CONSENT OF THE FEDERAL RESERVE BANK OF
CHICAGO. THERE IS NO RIGHT OF ACCELERATION IN THE CASE OF A DEFAULT IN THE
PAYMENT OF PRINCIPAL OF, OR INTEREST ON, THIS SUBORDINATED NOTE OR IN THE
PERFORMANCE OF ANY OTHER OBLIGATION OF THE BANK UNDER THIS SUBORDINATED NOTE OR
UNDER ANY OTHER SECURITY ISSUED BY THE BANK.
-17-
<PAGE>
No provision of this Subordinated Note shall alter or impair the obligation
of the Bank, which is absolute and unconditional, to pay the principal, and
premium, if any, and interest on, this Subordinated Note in U.S. dollars at the
times, places and rate herein prescribed.
The Bank shall cause to be kept at the corporate trust office of the
Subordinated Note Registrar designated below a register (the register maintained
in such corporate trust office or any other office or agency of the Bank in the
Place of Payment herein referred to as the "Subordinated Note Register") in
which, subject to such reasonable regulations as it may prescribe, the Bank
shall provide for the registration of the Subordinated Notes and of transfers of
the Subordinated Notes. The Bank is hereby initially appointed "Subordinated
Note Registrar" for the purposes of registering the Subordinated Notes and
transfers of the Subordinated Notes as herein provided.
The transfer of this Subordinated Note is registrable in the Subordinated
Note Register, upon surrender of this Subordinated Note for registration of
transfer at the office or agency of the Bank in the Place of Payment, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Bank and the Paying Agent duly executed by, the holder
hereof or his attorney duly authorized in writing, and thereupon one or more new
Subordinated Notes of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees. Notwithstanding the foregoing, the Bank shall not be required to
register the transfer of any Subordinated Note that has been called for
redemption during a period beginning at the opening of business fifteen calendar
days before the day of mailing of a notice of such redemption and ending at the
close of business on the day of such mailing.
No service charge shall be made for any such registration of transfer or
exchange, but the Bank may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection therewith.
The Subordinated Notes are issuable only in registered form without coupons
in minimum denominations of $250,000 and any integral multiple of $1,000 in
excess thereof. Each owner of a beneficial interest in this Subordinated Note
is required to hold a beneficial interest in $250,000 principal amount or any
integral multiple of $1,000 in excess thereof of this Subordinated Note at all
times.
Prior to due presentment of this Subordinated Note for registration of
transfer, the Bank, the Paying Agent or any agent of the Bank or the Paying
Agent may treat the person in whose
-18-
<PAGE>
name this Subordinated Note is registered as the owner hereof for all purposes,
whether or not this Subordinated Note be overdue, and neither the Bank, the
Paying Agent nor any such agent shall be affected by notice to the contrary.
All notices to the Bank under this Subordinated Note shall be in writing
and addressed to the Bank at 50 South LaSalle Street, Chicago, Illinois 60675,
or to such other address of the Bank as the Bank may notify the holders of the
Subordinated Notes.
This Subordinated Note shall be governed by, and construed in accordance
with, the laws of the State of Illinois.
As used in this Subordinated Note, the term "Agents" shall mean Goldman,
Sachs & Co., CS First Boston Corporation, J.P. Morgan Securities Inc., Lehman
Brothers, Lehman Brothers Inc. and Merrill Lynch & Co., Merrill Lynch, Pierce
Fenner & Smith Incorporated, and any other person, firm or entity which shall
hereafter be designated as an "Agent" under that certain Amended and Restated
Distribution Agreement, dated September 6, 1995, among the Bank, Northern Trust
Corporation and the Agents (as hereinabove defined).
IN WITNESS WHEREOF, the Bank has caused this instrument to be duly
executed.
THE NORTHERN TRUST COMPANY
By:_______________________________
Authorized Signatory
-19-
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of the within Subordinated Note, shall be construed as though they were written
out in full according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as
tenants in common
UNIF GIFT MIN ACT - __________ Custodian ___________
(Cust) (Minor)
under Uniform Gifts to Minors Act
_________________________________
(State)
Additional abbreviations may also be used
though not in the above list.
-20-
<PAGE>
ASSIGNMENT
FOR VALVE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
PLEASE INSERT SOCIAL SECURITY NUMBER OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
_______________________________
_______________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address,
including postal zip code, of assignee)
________________________________________________________________________________
the within Subordinated Note and all rights thereunder, and hereby irrevocably
constitutes and appoints _______________________________________________________
________________________________________________________________________________
________________________________________________________________________________
to transfer said Subordinated Note on the books of the Bank, with full power of
substitution in the premises.
Dated:____________________________
________________________________________
NOTICE: The signature to this assigment
must correspond with the name as written
upon the face of the within Subordinated
Note in every particular, without
alteration or enlargement or any change
whatsoever.
-21-
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NUMBER (11)
TO 9/30/95 FORM 10-Q
NORTHERN TRUST CORPORATION
COMPUTATION OF PER SHARE EARNINGS
Third Quarter Ended September 30, Nine Months Ended September 30,
----------------------------------- ---------------------------------
1995 1994 1995 1994
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
Computations Required by
- ------------------------
Regulation S-K
- ------------------------
Primary Earnings Per Share
- ---------------------------
Net Income Applicable to
Common Shares $55,933,249 $46,138,483 $154,061,092 $136,870,925
=========== =========== ============ ============
Weighted Average Number of Common
and Common Equivalent Shares
Outstanding
Common Shares 55,702,458 54,107,073 55,314,848 53,772,565
Dilutive Effect of Common
Equivalent Shares (A)
Stock Options 595,957 803,157 572,246 925,444
Long Term Performance Stock Plan 371,585 413,744 350,102 388,436
Other 16,283 10,816 12,332 8,924
----------- ----------- ------------ ------------
56,686,283 55,334,790 56,249,528 55,095,368
=========== =========== ============ ============
Net Income Per Common and
Common Equivalent Share $ 0.99 $ 0.83 $ 2.74 $ 2.48
=========== =========== ============ ============
</TABLE>
(A) Determined by application of the treasury stock method.
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NUMBER (11)
TO 9/30/95 FORM 10-Q
NORTHERN TRUST CORPORATION
COMPUTATION OF PER SHARE EARNINGS
Third Quarter Ended September 30, Nine Months Ended September 30,
----------------------------------- ---------------------------------
1995 1994 1995 1994
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
Computations Required by
- ------------------------
Regulation S-K
- ------------------------
Fully Diluted Earnings Per Share
- --------------------------------
Net Income Applicable to
Common Shares $55,933,249 $46,138,483 $154,061,092 $136,870,925
Add Back: Dividend on Series E Convertible
Preferred Stock 781,250 798,422 2,343,750 2,343,750
----------- ----------- ------------ ------------
$56,714,499 $46,936,905 $156,404,842 $139,214,675
=========== =========== ============ ============
Weighted Average Number of Common
and Common Equivalent Shares Outstanding
Common Shares 55,702,458 54,107,073 55,314,848 53,772,565
Dilutive Effect of Common
Equivalent Shares (A)
Stock Options 796,429 803,157 872,424 929,245
Long Term Performance Stock Plan 395,981 413,744 364,940 388,964
Other 19,104 10,816 14,155 9,049
Other Potentially Dilutive Securities
Equivalent Shares Assuming Conversion
of Series E Convertible Preferred
Stock 1,204,820 1,204,820 1,204,820 1,204,820
----------- ----------- ------------ ------------
58,118,792 56,539,610 57,771,187 56,304,643
=========== =========== ============ ============
Net Income Per Common and
Common Equivalent Share $ 0.98 $ 0.83 $ 2.71 $ 2.47
=========== =========== ============ ============
</TABLE>
(A) Determined by application of the treasury stock method.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND> This schedule contains summary financial information extracted from
the Consolidated Balance Sheet and the Consolidated Statement of Income and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 1,444,681
<INT-BEARING-DEPOSITS> 1,616,427
<FED-FUNDS-SOLD> 247,252
<TRADING-ASSETS> 57,220
<INVESTMENTS-HELD-FOR-SALE> 5,207,955
<INVESTMENTS-CARRYING> 590,182
<INVESTMENTS-MARKET> 620,107
<LOANS> 9,808,307
<ALLOWANCE> 147,254
<TOTAL-ASSETS> 20,179,731
<DEPOSITS> 11,357,056
<SHORT-TERM> 6,528,081
<LIABILITIES-OTHER> 525,914
<LONG-TERM> 358,086
<COMMON> 93,597
0
170,000
<OTHER-SE> 1,146,997
<TOTAL-LIABILITIES-AND-EQUITY> 20,179,731
<INTEREST-LOAN> 464,973
<INTEREST-INVEST> 270,714
<INTEREST-OTHER> 82,383
<INTEREST-TOTAL> 818,070
<INTEREST-DEPOSIT> 333,358
<INTEREST-EXPENSE> 552,163
<INTEREST-INCOME-NET> 265,907
<LOAN-LOSSES> 5,000
<SECURITIES-GAINS> 526
<EXPENSE-OTHER> 530,652
<INCOME-PRETAX> 233,722
<INCOME-PRE-EXTRAORDINARY> 233,722
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 160,491
<EPS-PRIMARY> 2.74
<EPS-DILUTED> 2.71
<YIELD-ACTUAL> 2.10
<LOANS-NON> 30,879
<LOANS-PAST> 21,368
<LOANS-TROUBLED> 2,786
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 144,838
<CHARGE-OFFS> 7,754
<RECOVERIES> 2,952
<ALLOWANCE-CLOSE> 147,254
<ALLOWANCE-DOMESTIC> 115,260
<ALLOWANCE-FOREIGN> 2,735
<ALLOWANCE-UNALLOCATED> 29,259
</TABLE>
