REGISTRATION NO. 333-45203
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PRE-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
NORTHERN TRUST CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 36-2723087
(State or other jurisdiction of (I.R.S employer identification
incorporation or organization) number)
FIFTY SOUTH LASALLE STREET
CHICAGO, ILLINOIS 60075
(312) 630-6000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Peter L. Rossiter
Executive Vice President
and General Counsel
Northern Trust Corporation
Fifty South LaSalle Street
Chicago, Illinois 60075
(312) 444-3716
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
________________________________
<PAGE> 2
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM
TIME TO TIME AFTER THE REGISTRATION STATEMENT BECOMES EFFECTIVE.
________________________________
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, check the
following box. [x]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for
the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Proposed
maximum Proposed
Amount offering maximum
Title of each class of securities to to be price aggregate Amount of
be registered registered per share offering price registration fee
------------------------------------- ---------- --------- -------------- ----------------
<S> <C> <C> <C> <C>
Common Stock, $1.66-2/3 par value per 250,000 $62.0625(1) $15,515,625.00(1) $4,577.11(1)
share (including associated Preferred shares
Stock Purchase Rights)
</TABLE>
(1) Computed on the basis of the average of the high and low sales
prices of the Common Stock reported on The Nasdaq Stock Market on
January 23, 1998 pursuant to Rule 457(c) of the Securities Act of
1933, as amended, solely for the purpose of calculating the
amount of the registration fee. This registration fee was paid
at the time of the initial filing of this Registration Statement
on January 29, 1998.
<PAGE> 3
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES
THAT THIS REGISTRATION STATEMENT WILL THEREAFTER BECOME EFFECTIVE IN
ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL
THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION ACTING PURSUANT TO SAID SECTION 8(A) MAY DETERMINE.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT
BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE
REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR
SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH
OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE> 4
SUBJECT TO COMPLETION, DATED MARCH 18, 1998
NORTHERN TRUST CORPORATION
250,000 SHARES OF COMMON STOCK
This Prospectus relates to up to 250,000 shares of Common Stock,
$1.66-2/3 par value per share (the "Common Stock"), of Northern Trust
Corporation (the "Corporation"), which may be offered and sold
pursuant to the exercise of transferable nonqualified stock options
granted to participants under the Northern Trust Corporation Amended
1992 Incentive Stock Plan (the "Plan") and transferred by those
participants to certain transferees as permitted by the Plan and the
grant documents specifying the terms and conditions of such stock
options. Permitted transferees include the participants' spouses or
lineal descendants, trusts for the primary benefit of the
participants' spouses or lineal descendants, or partnerships of which
the participants' spouses and lineal descendants are the only
partners. This Prospectus also relates to the offer and sale of
Common Stock pursuant to the exercise of such stock options to the
beneficiaries of such permitted transferees or the executors,
administrators or beneficiaries of their estates, or other persons
duly authorized by law to administer the estate or assets of such
persons.
The Common Stock is traded on the Nasdaq Stock Market ("Nasdaq")
under the symbol "NTRS." On March 17, 1998 the closing sale price of
the Common Stock on Nasdaq was $75-5/8 per share.
______________________________
THESE SECURITIES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND
ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY
OTHER GOVERNMENTAL AGENCY.
_______________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE
COMMISSIONER ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
No person is authorized to give any information or to make any
representation not contained in this Prospectus, and, if given or
made, such information or representation should not be relied upon as
having been authorized by the Corporation. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to purchase
the securities offered by this Prospectus in any jurisdiction in
which, or to or from any person to or from whom, it is unlawful to
make such an offer, or solicitation of an offer. Neither the delivery
of this Prospectus nor any distribution of the securities offered
<PAGE> 5
pursuant to this Prospectus shall under any circumstances create an
implication that there has been no change in the information set forth
herein or in the affairs of the Corporation since the date of this
Prospectus or that the information herein is correct as of any time
subsequent to its date.
_____________________
The date of this Prospectus is ____________, 1998
<PAGE> 6
TABLE OF CONTENTS
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Page
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Available Information . . . . . . . . . . . . . . . . . . . 6
Information Incorporated by Reference . . . . . . . . . . . 7
The Corporation . . . . . . . . . . . . . . . . . . . . . . 7
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . 8
The Plan and the Stock Options . . . . . . . . . . . . . . 8
Federal Income Tax Consequences . . . . . . . . . . . . . . 14
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . 17
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . 17
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and in accordance therewith files reports, proxy statements and other
information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other information
filed by the Corporation with the Commission can be inspected and
copied at the public reference facilities maintained by the Commission
at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at
the regional offices of the Commission located at 7 World Trade
Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
such material can also be obtained from the Public Reference Section
of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. Such material can also be accessed electronically
by means of the Commission's home page on the Internet at
http://www.sec.gov.
The Corporation has filed with the Commission a Registration
Statement on Form S-3 (together with all amendments and exhibits
thereto, the "Registration Statement") under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the
securities offered hereby. This Prospectus does not contain all the
information set forth in the Registration Statements, certain portions
of which have been omitted as permitted by the rules and regulations
of the Commission. For further information with respect to the
Corporation and the Common Stock, reference is made to the
Registration Statement and the exhibits and the financial statements,
notes and schedules filed as a part thereof or incorporated by
reference therein, which may be inspected at the above-referenced
public reference facilities of the Commission at the addresses set
forth above or through the Commission's home page on the Internet.
Statements concerning the provisions of any documents referred to
herein are not necessarily complete and in each instance are qualified
in all respects by reference to the copy of such document filed as an
exhibit to the Registration Statement.
<PAGE> 7
INFORMATION INCORPORATED BY REFERENCE
The following documents filed by the Corporation with the
Commission are incorporated by reference into this Prospectus:
1. The Corporation's Annual Report on Form 10-K for the year
ended December 31, 1997; and
2. The Corporation's Current Report on Form 8-K filed on
January 21, 1998.
Each document or report filed by the Corporation with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date of this Prospectus and prior to the
termination of this offering shall be deemed to be incorporated by
reference into this Prospectus and to be a part of this Prospectus
from the date of filing of such document or report. Any statement
contained herein, or in a document incorporated or deemed to be
incorporated by reference herein, shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document
that is also incorporated or deemed to be incorporated by reference
herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
The Corporation will provide without charge to any person to whom
this Prospectus is delivered, on the written or oral request of such
person, a copy of any or all of the foregoing documents incorporated
by reference herein (other than exhibits not specifically incorporated
by reference into the texts of such documents). Requests for such
documents should be directed to Northern Trust Corporation, Fifty
South LaSalle Street, Chicago, Illinois 60675, Attention: Secretary,
telephone number (312) 630-6000.
THE CORPORATION
Northern Trust Corporation (the "Corporation") is a bank holding
company within the meaning of the Bank Holding Company Act of 1956, as
amended. The Corporation, through its subsidiaries, provides banking,
trust and related services to the public. Its principal banking
subsidiary is The Northern Trust Company (the "Bank"), which was
founded in 1889. In addition to the Bank, the Corporation owns banks
in Arizona, California, Florida and Texas, trust companies in
Connecticut and New York and various other non-bank subsidiaries,
including a securities brokerage firm and a retirement services
company.
The Corporation was organized in Delaware in 1971. Its
principal executive offices are located at Fifty South LaSalle Street,
Chicago, Illinois 60675, and its telephone number is (312) 630-6000.
<PAGE> 8
USE OF PROCEEDS
The amount of proceeds to be received by the Corporation upon the
exercise of the transferable stock options and the sale of the Common
Stock to which this Prospectus relates will depend upon the exercise
prices of the options and the extent to which the options are
exercised. The Corporation intends that the net proceeds from the
sale of the Common Stock offered hereby will be added to its general
corporate funds and used for general corporate purposes.
THE PLAN AND THE STOCK OPTIONS
GENERAL
The Northern Trust Corporation Amended 1992 Incentive Stock Plan
(the "Plan") is a stock-based compensation plan providing for the
grant of nonqualified stock options, incentive stock options, stock
appreciation rights, restricted stock, performance shares and other
stock-based awards to key officers of the Corporation and its
subsidiaries and directors of the Corporation. The purpose of the
Plan is to provide a sense of recognition and managerial participation
among key officers by providing them with opportunities to acquire
shares of Common Stock and awards that increase in value with an
increase in the market value of shares of Common stock and to allow
the Corporation to compensate directors under the Plan for their
services in a manner that aligns their interests with those of
stockholders.
The Plan was adopted by the Board of Directors of the Corporation
as of May 1, 1992, and approved by the stockholders of the Corporation
at the 1992 annual meeting of stockholders. Amendments to the Plan
have been adopted by the Board of Directors at various times since
1992, including amendments approved by stockholders at the 1995 and
1997 annual meetings of stockholders.
A copy of the Plan is filed as an exhibit to the Registration
Statement of which this Prospectus forms a part. The following is a
description of the Plan. This description summarizes certain material
provisions of the Plan, and as such, it does not purport to be
complete and is qualified in its entirety by reference to the Plan.
Terms used herein and not otherwise defined shall have the respective
meanings set forth in the Plan.
DESCRIPTION OF THE PLAN
The Plan is administered by the Compensation and Benefits
Committee (the "Committee") of the Board of Directors of the
Corporation. The Committee is comprised solely of non-employee
directors, each of whom qualifies as (i) an "outside director" under
Section 162(m) of the Internal Revenue Code and the regulations
thereunder, and (ii) a "non-employee director" under Rule 16b-3 of the
<PAGE> 9
Exchange Act. The Committee determines the key officers of the
Corporation and its subsidiaries who participate in the Plan based
upon their contributions and value to the Corporation. The Committee
also determines the number and types of awards to be granted to key
employees and directors under the Plan and the terms and conditions of
such awards. The determination of awards under the Plan is made on a
year-to-year basis by the Committee. No separate determination of
eligibility for awards under the Plan for key officers is made by the
Committee from among the approximately 3,253 officers of the
Corporation and its subsidiaries.
An aggregate of 16,000,000 shares of Common Stock, consisting of
authorized but unissued shares or treasury shares, may be issued under
the Plan from and after the date of its initial adoption in 1992.
Shares representing the unexercised portion of any lapsed or cancelled
awards, or forfeited awards, also become available for future issuance
under the Plan. As of December 30, 1997, 5,939,752 shares were
subject to outstanding options, 1,442,972 shares were subject to other
outstanding awards, and 1,282,838 shares have previously been issued
under the Plan, thereby leaving 7,334,438 shares available for future
grants.
Awards available under the Plan are stock options, stock
appreciation rights, stock awards, performance shares and stock
equivalents, each of which is described below.
STOCK OPTIONS. The Plan provides for the grant of nonqualified
stock options and incentive stock options. The prices at which, and
the periods during which, options may be exercised are fixed by the
Committee, but in no case may be the price be less than 100% of the
fair market value of the shares on the date of the grant. Options are
exercisable not earlier than six months after the date of grant and
terminate not later than three years after termination of employment
for any reason other than death (except that nonqualified stock
options granted on or after April 18, 1995 terminate not later than
five years from the date of the participant's termination of
employment on account of retirement, disability or death). In the
event of the death of a participant during employment or prior to
termination, expiration, cancellation or forfeiture of options held by
the participant, the options are exercisable to the extent provided in
the grant documents not later than five years after death. In
addition, options may become exercisable upon a "change in control" of
the Corporation, as defined in the Plan. Upon exercise of an option,
payment of the purchase price must be made in full, in cash or shares
of Common Stock or a combination thereof, as provided in the grant
documents. As described below under "Transferability of Stock
Options," options are non-transferable except by will or the laws of
descent and distribution, and, in the case of nonqualified stock
options, by a participant's assignment, at any time prior to his or
her death, to (i) the participant's spouse or lineal descendants, (ii)
a trustee of a trust for the primary benefit of the participant's
spouse or lineal descendants, or (iii) a partnership of which the
<PAGE> 10
participant's spouse and lineal descendants are the only partners.
The maximum number of shares of Common Stock as to which a participant
may receive stock options and related stock appreciation rights during
the term of the Plan is 1,200,000.
STOCK APPRECIATION RIGHTS. Stock appreciation rights may be
granted with respect to options granted under the Plan. Each right
permits the holder to receive, in lieu of exercising the related
option, up to 100% of the difference between the market price of the
option shares on the date of exercise of the right and the aggregate
option price thereof. Stock appreciation rights are exercisable only
if and to the extent that the related options are exercisable. Upon
exercise, stock appreciation rights are paid in cash or shares of
Common Stock (based upon their fair market value on the date of
exercise) or a combination thereof, as set forth in the right.
STOCK AWARDS. Stock awards may be granted to participants in the
Plan, consisting of shares of Common Stock transferred to participants
for consideration at or less than the fair market value thereof as the
Committee deems appropriate, or as a bonus for services rendered and
without further consideration. Such award are subject to terms and
conditions determined by the Committee, which may include restrictions
on transferability, rights of the Corporation to reacquire the shares
upon termination of the participant's employment and forfeiture of the
shares under certain circumstances prescribed by the Committee.
PERFORMANCE SHARES. Performance shares may be granted to
participants in the Plan, subject to terms and conditions determined
by the Committee, which may include restrictions on transferability or
rights of the Corporation to reacquire the shares upon termination of
the participant's employment. A participant may be entitled to have a
portion of the awarded Common Stock credited to an account maintained
for the participant if established performance goals are achieved for
one or more of the "performance periods" designated for the
participant. Such performance goals shall relate to the Corporation's
return-on-equity, earnings per share or Common Stock price, and may be
absolute in their terms or measured against or in relationship to the
performance of other companies or indices selected by the Committee.
After stock has been credited to an account and until it is
distributed, the account will also be credited with amounts equal to
dividends payable with respect to the number of shares credited to the
account. Each participant's account will be distributed upon the
first to occur during employment of (i) retirement, disability or
death, (ii) a "change in control" of the Corporation, (iii) the third
anniversary date on which an award was credited to the participant's
account, or (iv) for any reason deemed appropriate by the Committee
in its sole discretion. The maximum number of performance shares that
may be granted to any participant in any year after 1997 is 75,000.
STOCK EQUIVALENTS. Stock equivalents may be granted entitling
the holders thereof to receive a payment in an amount equal to the
fair market value or book value of a designated number of shares of
<PAGE> 11
Common Stock on a specified date or dates (which may be the date of
the award) or the increase in the fair market value or book value of a
designated number of shares of Common Stock during a specified period
of time. Such payment is made in cash or shares of Common Stock, as
provided in the award, at the date or dates, not later than ten years
after the date of the award, set forth in the award. Stock
equivalents may also provide for the payment to the recipients of
"dividend equivalents" on the shares designated in an award and are
subject to such other terms and conditions as the Committee
determines, which may include the requirement of achievement of
specified performance goals.
ADJUSTMENT UPON CHANGES IN CAPITALIZATION. The Board of
Directors of the Corporation, in its sole discretion, may adjust the
aggregate number of shares of Common Stock issuable under the Plan,
the aggregate number of shares of Common Stock subject to each
outstanding award and, where applicable, the exercise price per share
of each award, in each case for any increase or decease in the number
of shares of issued Common Stock resulting from a subdivision of
consolidation of shares, whether through reorganization,
recapitalization, stock split-up, stock distribution or combination of
shares or the payment of a share dividend or other increase or
decrease in the number of such shares outstanding effected without
receipt of consideration by the Corporation.
SUSPENSION, AMENDMENT OR TERMINATION OF THE PLAN. The Board of
Directors of the Corporation may at any time suspend, terminate, or
amend the Plan as it deems advisable and in the best interests of the
Corporation, provided that stockholder approval shall be required for
any amendment that would (i) materially increase the total number of
shares of Common Stock that may be issued under the Plan (except for
adjustments upon changes in capitalization as described above), (ii)
increase the amount or type of benefits that may be granted under the
Plan, (iii) materially change the class of eligible employees, or (iv)
materially increase the benefits to any participant who is subject to
Section 16 of the Exchange Act. Any award in effect at the
termination of the Plan shall remain in effect according to its
original terms.
DURATION OF THE PLAN The Plan is effective until April 30, 2002.
No awards, including options, may be granted under the Plan after that
date, but awards, including options, granted prior to that date may
extend beyond that date.
TRANSFERABILITY OF STOCK OPTIONS
GENERAL. Except as described below, each option granted under to
the Plan to a participant shall not be transferable other than by will
or the laws of descent and distribution and, during the lifetime of
the participant, shall be exercisable only by such participant.
Notwithstanding the foregoing, the Committee may grant nonqualified
stock options under the Plan that are transferable ("Transferable
<PAGE> 12
Options"), or amend outstanding nonqualified stock options granted
under the Plan to make them transferable, by the participant, at any
time prior to the participant's death, to (i) the participant's spouse
or lineal descendants, (ii) a trustee of a trust for the primary
benefit of the participant's spouse or lineal descendants, or (iii) a
partnership of which the participant's spouse and lineal descendants
are the only partners. The purpose of this limited transferability
provision is to allow participants who receive Transferable Options to
make a gift of such Options for estate planning purposes.
Transfer of Transferable Options will be permitted only if the
participant does not receive any consideration for the transfer, and
the transfer is expressly permitted by the grant documents (including
the stock option agreement) approved by the Committee. The transfer
of Transferable Options shall be evidenced by an appropriate written
document executed by the participant, and a copy thereof shall be
delivered to the Committee on or prior to the effective date of the
transfer. As used herein, "Stock Option Transferee" refers to a
transferee (I.E., a participant's spouse or lineal descendants (or
such person's beneficiary, estate or other legal representative), a
trust for the primary benefit of the participant's spouse or lineal
descendants, or a partnership of which the participant's spouse or
lineal descendants are the only partners), that has received stock
options in a valid transfer, and "Participant Transferor" refers to
the participant under the Plan who transferred stock options held by a
particular Stock Option Transferee.
Upon transfer to a Stock Option Transferee, a Transferable Option
continues to be governed by and subject to the terms and limitations
of the Plan and the grant documents, and, except as described in the
next paragraph, the Stock Option Transferee is entitled to the same
rights as the Participant Transferor thereunder as if no transfer had
taken place. Accordingly, the rights of the Stock Option Transferee
are subject to the terms and limitations of the grant to the
Participant Transferor, including provisions relating to expiration
date, exercisability, exercise price and forfeiture. For information
regarding the terms of a particular Transferable Option grant, Stock
Option Transferees should review the grant documents and may contact
the Northern Trust Corporation, Fifty South LaSalle Street, Chicago,
Illinois 60675, Attention: Secretary, telephone number (312) 630-6000.
Once a Transferable Option has been transferred by a Participant
Transferor to a Stock Option Transferee, it may not be subsequently
transferred by the Stock Option Transferee except by will or the laws
of descent and distribution. A Stock Option Transferee may designate
in writing to the Corporation before his or her death one or more
beneficiaries to receive, in the event of his or her death, any rights
to which the Stock Option Transferee would be entitled under the Plan.
A Stock Option Transferee may also designate an alternate beneficiary
to receive payments if the primary beneficiary predeceases the Stock
Option Transferee. A beneficiary designation may be changed or revoked
in writing by the Stock Option Transferee at any time. Changes in
<PAGE> 13
beneficiary designation should be sent to Northern Trust Corporation,
Fifty South LaSalle Street, Chicago, Illinois 60675, Attention:
Secretary, telephone number (312) 630-6000.
EXERCISE BY STOCK OPTION TRANSFEREES. A Transferable Option may
be exercised by a Stock Option Transferee at any time from the time
first established by the Committee in the grant to the Participant
Transferor until the close of business on the expiration date of the
stock option. The purchase price of the shares of Common Stock as to
which Transferable Options are exercised shall be paid to the
Corporation in full at the time of exercise in cash, in shares of
Common Stock or a combination thereof, as provided in the grant
documents. Once the exercise is completed, stock certificates for the
appropriate number of shares will be delivered to the Stock Option
Transferee or his or her estate or beneficiaries, or otherwise
delivered in such manner as the person(s) entitled thereto may direct.
A Transferable Option will be deemed exercised on the date the
Secretary of the Corporation has received written notice of exercise
on an exercise form signed by the Stock Option Transferee and
accompanied by a check and/or shares of Common Stock, as applicable.
The stock option shares will generally be transferred to the Stock
Option Transferee as of the day following the date that (i) the above
conditions have been met, and (ii) the funds and/or shares of Common
Stock paid by the Stock Option Transferee in satisfaction of the
exercise price have been received by the Company free and clear of all
restrictions.
TERMINATION. Because Transferable Options transferred to Stock
Option Transferees continue to be governed by the terms of the Plan
and the grant documents, their exercisability continues to be affected
by the Participant Transferor's employment or directorship status with
the Corporation. In addition to terminating upon exercise and upon
expiration of the stated term of the option, each Transferable Option
shall terminate after termination of a participant's employment or
directorship status. See discussion above under " -- Description of
the Plan -- Stock Options" for limitations on the exercise of options
upon termination of employment or directorship status.
Transferable Options granted under the Plan shall not be affected
by any change of duties or position of the Participant Transferor, so
long as the Participant Transferor continues to be an officer of the
Corporation or any of its subsidiaries or a director of the
Corporation. Any stock option and any rules and regulations relating
to the Plan may contain such provisions as the Committee shall approve
with reference to the determination of the date employment terminates
and the effect of leaves of absence. Nothing in the Plan or in any
stock option granted pursuant to the Plan obligates the Corporation or
any of its subsidiaries to continue the employment of any participant
for any particular period, nor does the granting of an award
constitute a request or consent to postpone the retirement date of any
participant.
<PAGE> 14
FEDERAL INCOME TAX CONSEQUENCES
GENERAL
This section is not intended to be a complete statement of the
Federal income tax aspects of the Plan and does not describe the
possible effects of state and other income taxes or of gift, estate,
inheritance and generation skipping taxes. Prior to making a transfer
of a Transferable Option, a participant should consult with his or her
personal tax advisors concerning the possible Federal and state gift,
estate, inheritance, and generation skipping tax consequences of such
a transfer, as well as the Federal, state and local income tax
consequences which are not addressed herein. The discussion of Federal
income tax consequences for the Participant Transferor and the Stock
Option Transferee set forth below assumes that the Transferable Option
does not have a readily ascertainable fair market value at the date of
grant and that the transfer of a Transferable Option during a
participant's lifetime is made by way of gift and no consideration is
received therefor.
NONQUALIFIED STOCK OPTIONS. Tax aspects of nonqualified stock
options granted under the Plan generally are as follows: (a) no income
will be realized by the participant at the time the option is granted,
(b) at exercise, ordinary income will be realized by the participant
in an amount equal to the excess of the fair market value of the
shares on the date of exercise over the option exercise price, and the
Corporation will receive a tax deduction for the same amount, and (c)
upon sale of such shares, any gain or loss realized is treated as
either short-term or long-term capital gain or loss depending on
whether the shares have been held more than one year. If the shares
have been held for over 18 months, more preferential long-term capital
gains rates may apply under recently enacted tax legislation.
INCENTIVE STOCK OPTIONS. Stock options granted under the Plan
may qualify as incentive stock options if the exercise price is not
less than 100% of the fair market value of the shares on the date of
the grant and such options may not be exercised later than three
months after termination of employment for any reason other than death
or disability and not later than one year after termination for
disability. Incentive stock options also may not be exercisable later
than 10 years after the date of grant. If shares are issued to a
participant pursuant to an incentive stock option, and if no
disqualifying disposition of such shares is made by such participant
within one year after the transfer of such shares to such participant
or within two years after the date of grant, (a) no income will be
realized by the participant at the time of the grant of the option,
(b) no income will be realized by the participant at the date of
exercise, (c) upon sale of such shares, any amount realized in excess
of the option price will be taxed to the participant, for federal
income tax purposes, as a long-term capital gain and any loss
sustained will be a long-term capital loss, and (d) no deduction will
<PAGE> 15
be allowed to the Corporation for federal tax purposes. Upon exercise
of an incentive stock option, the participant may be subject to
alternative minimum tax on certain items of tax preference.
STOCK APPRECIATION RIGHTS. At the date of granting of stock
appreciation rights, the participant will not be deemed to receive
income, and the Corporation will not be entitled to a deduction. Upon
exercise, the holder of a stock appreciation right will realize
ordinary income equal to the amount of cash or the market value of the
shares received on exercise. The Corporation will be entitled to a
deduction with respect to the ordinary income realized by the
exercising holder.
STOCK AWARDS AND PERFORMANCE SHARES. Ordinary income will be
realized by a recipient of a stock award or performance shares upon
becoming entitled to transfer the shares at the end of the restriction
period, if any, without forfeiture. The amount of income realized
will be equal to the fair market value of the shares on the first day
after the end of the restriction period. Such amount will also
constitute the tax basis for the shares. In addition, the holding
period commences on the day following the day the restriction expires
for purposes of determining whether the recipient has long-term or
short-term capital gain or loss on a subsequent sale of shares. The
Corporation will be entitled to a deduction with respect to the
ordinary income realized by the recipient.
A recipient of a stock award who makes an election under Section
83(b) of the Internal Revenue Code within 30 days after the date of
grant will have ordinary income equal to the fair market value on the
date of grant, and will recognize no additional income until the
shares are subsequently sold. If the shares subject to such election
are forfeited, the recipient will not be entitled to any deduction,
refund, or loss for tax purposes, and the Corporation will have to
include the amount that it previously deducted from its gross income
in the taxable year of the forfeiture. Upon the sale of the shares
after the forfeiture period has expired, the tax basis will be equal
to the fair market value on the date of grant and the holding period
for capital gains purposes commences on the day following the day the
restriction expires.
STOCK EQUIVALENTS. Stock equivalents will not result in taxable
income to a recipient or provide a deduction to the Corporation until
a payment is made to a participant. Upon such a payment, the
recipient will realize ordinary income measured by the amount so paid
and a corresponding amount will ordinarily be deductible by the
Corporation.
<PAGE> 16
TRANSFERABLE OPTIONS
PARTICIPANT TRANSFERORS. A Participant Transferor who transfers
a Transferable Option to his or her spouse or lineal descendants, a
trust for the primary benefit of his or her spouse or lineal
descendants or a partnership of which his or her spouse or lineal
descendants are the only partners will not recognize income at the
time of the transfer. Instead, at the time the Stock Option
Transferee exercises the Transferable Option, the Participant
Transferor will generally recognize ordinary income in an amount equal
to the excess of the fair market value of the shares on the date of
exercise over the option exercise price. Moreover, such income will
be subject to payment and withholding of income and FICA taxes.
Normally, Participant Transferors may satisfy the withholding
obligation by writing a check to the Corporation or by another method
permitted under the Plan. Subject to certain limitations, the
Corporation will generally be entitled to claim a Federal income tax
deduction at the same time, and in the same amount, as the Participant
Transferor recognizes ordinary income. In the event the Stock Option
Transferee exercises the Transferable Option after the death of the
Participant Transferor, any such ordinary income will be recognized by
the Participant Transferor's estate.
STOCK OPTION TRANSFEREES. A Stock Option Transferee will not
recognize taxable income at the time of the transfer of the
Transferable Option. As described in the preceding paragraph, the
Participant Transferor (or the estate of the Participant Transferor,
as the case may be) and not the Stock Option Transferee will generally
recognize ordinary income at the time the Stock Option Transferee
exercises the Transferable Option. A Stock Option Transferee who
chooses to exercise a Transferable Option in whole or in part by
delivery of other Common Stock already owned by the Stock Option
Transferee should consult with his or her own tax advisor concerning
the tax consequences of such a transaction.
SUBSEQUENT SALE OF STOCK. If shares acquired upon exercise of a
Transferable Option are later sold or exchanged by the Stock Option
Transferee, then the difference between the sales price and the Stock
Option Transferee's tax basis for the shares will generally be taxable
to the Stock Option Transferee as long-term or short-term capital gain
or loss (if the stock is a capital asset of the Stock Option
Transferee) depending upon whether the shares have been held for more
than one year after the exercise date. If the shares have been held
for over 18 months, more preferential long-term capital gains rates
may apply under recently enacted tax legislation. The tax basis for
the shares in the hands of the Stock Option Transferee would be equal
to the fair market value of the shares at the time of exercise of the
Transferable Option.
<PAGE> 17
LEGAL MATTERS
The validity of the Common Stock offered in this Prospectus will
be passed upon for the Corporation by Peter L. Rossiter, Executive
Vice President and General Counsel of the Corporation. As of
December 30, 1997, Mr. Rossiter beneficially owned 125,149 shares of
Common Stock, which includes 114,870 shares issuable pursuant to stock
options exercisable within the next 60 days.
EXPERTS
The consolidated financial statements and schedules of the
Corporation and its subsidiaries incorporated in this Prospectus by
reference to the Corporation's Annual Report on Form 10-K for the year
ended December 31, 1997 have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with
respect thereto, and are incorporated herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving
said report.
<PAGE> 18
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with the offering are as
follows:
Registration fee under the Securities Act . . . . . . . $ 4,577
Legal fees and expenses . . . . . . . . . . . . . . . . . 10,000
Accounting fees and expenses . . . . . . . . . . . . . . . 5,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . 523
------
Total . . . . . . . . . . . . . . . . . . $20,100
======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law and Article
Eighth of the Corporation's Restated Certificate of Incorporation
provide for indemnification of the Corporation's directors and
officers in a variety of circumstances, which may include liabilities
under the Securities Act. The general effect of these provisions is
to provide that the Corporation shall indemnify its directors and
officers against all liabilities and expenses reasonably incurred in
connection with the defense or settlement of any judicial or
administrative proceedings in which they become involved by reason of
their status as corporate directors or officers, if they acted in good
faith and in the reasonable belief that their conduct was neither
unlawful (in the case of criminal proceedings) nor inconsistent with
the best interests of the Corporation. With respect to legal
proceedings by or in the right of the Corporation in which a director
or officer is adjudged liable for improper performance of his duty to
the Corporation, indemnification is limited by such provisions to that
amount which is permitted by the court. In addition, the Corporation
has purchased insurance as permitted by Delaware law on behalf of
directors, officers, employees or agents, which may cover liabilities
under the Securities Act.
ITEM 16. EXHIBITS.
The Exhibits filed herewith are set forth on the Exhibit Index
filed as part of this Registration Statement.
<PAGE> 19
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the
Registration Statement (or the most recent post-
effective amendment thereof) which, individually
or in the aggregate, represent a fundamental
change in the information set forth in this
Registration Statement. Notwithstanding the
foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high
end of the estimated maximum offering rang may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 242(b) if, in the
aggregate, the changes in volume and price
represent no more than a 20% change in the maximum
aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective registration statement; and
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in this Registration
Statement or any material change to such
information in this Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii)
do not apply if the registration statement is on Form S-3,
Form S-8 or Form F-3, and the information required to be
included in a post-effective amendment by those paragraphs
is contained in periodic reports filed with or furnished to
the Commission by the Registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
<PAGE> 20
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each
filing of the Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15 (d)
of the Exchange Act) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State
of Illinois, on March 18, 1998.
NORTHERN TRUST CORPORATION
(Registrant)
By: /s/ Perry R. Pero
-------------------------------
Perry R. Pero
Senior Executive Vice
President and
Chief Financial Officer
<PAGE> 21
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
William A. Osborn* Chairman and Chief March 18, 1998
----------------------- Executive Officer
William A. Osborn
/s/ Perry R. Pero Senior Executive Vice March 18, 1998
----------------------- President and
Perry R. Pero Chief Financial Officer
/s/ Harry W. Short Senior Vice President March 18, 1998
----------------------- and Controller
Harry W. Short (Chief Accounting Officer)
Duane L. Burnham* Director March 18, 1998
-----------------------
Duane L. Burnham
Dolores E. Cross* Director March 18, 1998
-----------------------
Dolores E. Cross
Susan Crown* Director March 18, 1998
-----------------------
Susan Crown
Robert S. Hamada* Director March 18, 1998
-----------------------
Robert S. Hamada
Barry G. Hastings* Director March 18, 1998
-----------------------
Barry G. Hastings
Robert A. Helman* Director March 18, 1998
-----------------------
Robert A. Helman
Arthur L. Kelly* Director March 18, 1998
-----------------------
Arthur L. Kelly
<PAGE> 22
SIGNATURE TITLE DATE
--------- ----- ----
Frederick A. Krehbiel* Director March 18, 1998
-----------------------
Frederick A. Krehbiel
William G. Mitchell* Director March 18, 1998
-----------------------
William G. Mitchell
Edward J. Mooney* Director March 18, 1998
-----------------------
Edward J. Mooney
Harold B. Smith* Director March 18, 1998
-----------------------
Harold B. Smith
William D. Smithburg* Director March 18, 1998
-----------------------
William D. Smithburg
Bide L. Thomas* Director March 18, 1998
-----------------------
Bide L. Thomas
*By /s/ Perry R. Pero
-------------------
Perry R. Pero
Attorney-in-Fact
(Pursuant to Powers
of Attorney filed
as Exhibits to this
Registration Statement)
<PAGE> 23
INDEX TO EXHIBITS
Exhibit Number Description
------------- -----------
4.1 Restated Certificate of Incorporation, as amended
(Incorporated by reference to Exhibit 3(ii) to the
Registrant's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1997).
4.2 By-Laws, as amended (Incorporated by reference to
Exhibit 3(ii) to the Registrant's Annual Report on Form
10-K for the year ended January 31, 1996).
5 Opinion of Counsel.*
23.1 Consent of Counsel.*
23.2 Consent of Independent Public Accountants.
24 Powers of Attorney.*
99 Northern Trust Corporation Amended 1992 Incentive Stock
Plan (Incorporated by reference to Exhibit 10(iii) to
the Registrant's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1997).
__________
* Previously filed.
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our
report dated January 20, 1998, included in the Northern Trust
Corporation's Form 10-K for the year ended December 31, 1997 and to
all references to our Firm included in this registration statement.
Chicago, Illinois /s/ ARTHUR ANDERSEN LLP
March 18, 1998 -----------------------
ARTHUR ANDERSEN LLP
