EXHIBIT 4 (ii)
Rev. 9/00
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 BANK NOTE
(Floating Rate)
ORIGINAL ISSUE DATE: PRINCIPAL AMOUNT:
INITIAL BASE RATE: ______% MATURITY DATE:
INTEREST RATE BASIS: INDEX MATURITY:
SPREAD AND/OR SPREAD MULTIPLIER: REGULAR RECORD DATES (If other
than the 15th 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:
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 Cede & Co., or registered assigns,
the principal amount specified on the face hereof in 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 made available for payment (each, an A"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 Base Rate specified above,
as adjusted by the addition or subtraction of the Spread, if any, specified
above and/or by the multiplication by the Spread Multiplier, if any,
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 made
available for payment, 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 interest payable at
maturity or upon earlier redemption, if applicable, will be payable to the
person to whom principal shall be payable.
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.
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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
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 or the
third Wednesday of March, June, September and December of each year; 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 (unless it is also the Maturity
Date) for this Subordinated Note falls on a day that is not a Business Day, such
Interest Payment Date will be postponed to 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 (unless it is also the Maturity Date)
will be the immediately preceding Business Day. If any Maturity Date or date of
earlier redemption or repayment of this Subordinated Note falls on a day that is
not a Business Day, the related payment of interest shall be made on the next
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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 Maturity Date or date of earlier redemption or
repayment. "Business Day" means any day other than a Saturday, Sunday or 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
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 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.
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The Subordinated Notes shall rank on a parity with the $100,000,000
aggregate principal amount of 6.5% Subordinated Notes due 2003 issued by the
Bank in 1993, the $100,000,000 aggregate principal amount of 6.70% Subordinated
Notes due 2005 issued by the Bank in 1995, the $100,000,000 aggregate principal
amount of 7.30% Subordinated Notes due 2006 issued by the Bank in 1996, the
$100,000,000 aggregate principal amount of 6.25% Subordinated Notes due 2008
issued by the Bank in 1998, the $200,000,000 aggregate principal amount of 7.10%
Subordinated Notes due 2009 issued by the Bank in 1999 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 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
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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, the Interest Reset
Date will be the third Wednesday 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 the base rate in effect from the Original Issue Date to the first
Interest Reset Date will be the Initial Base Rate specified on the face hereof.
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
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LIBOR, if such Business Day is in the next succeeding calendar month, such
Interest Reset Date will be the immediately preceding Business Day.
All calculations relating to this Subordinated Note will be made by the
"Calculation Agent." The Bank will serve as Calculation Agent for this
Subordinated Note as of its Original Issue Date, unless otherwise specified on
the face hereof. The Bank may appoint a different institution to serve as
Calculation Agent from time to time after the Original Issue Date of this
Subordinated Note without the consent of the holder and without notice.
The Calculation Agent will determine the interest rate that takes effect on
an Interest Reset Date by reference to the Interest Determination Date. Unless
otherwise specified on the face hereof, (i) if the Interest Rate Basis is not
LIBOR or the Treasury Rate, the Interest Determination Date will be the second
Business Day before the Interest Reset Date; (ii) if the Interest Rate Basis is
LIBOR, the Interest Determination Date will be the second London Business Day
(as defined below) preceding the Interest Reset Date; and (iii) if the Interest
Rate Basis is the Treasury Rate, the Interest Determination Date will be the day
of the week in which the Interest Reset Date falls on which treasury
bills--i.e., direct obligations of the U.S. government--would normally be
auctioned. Treasury bills are usually sold at auction on the Monday of each
week, unless that day is a legal holiday, in which case the auction is usually
held on the following Tuesday but may be held on the preceding Friday. If as the
result of a legal holiday an auction is held on the preceding Friday, that
Friday will be the Treasury Interest Determination Date relating to the Interest
Reset Date occurring in the next succeeding week. If the auction is held on a
day that would otherwise be an Interest Reset Date, then the Interest Reset Date
will instead be the first Business Day following the auction date.
Unless the Interest Rate is LIBOR, the Calculation Agent will calculate the
interest rate that takes effect on a particular Interest Reset Date no later
than the corresponding Interest Calculation Date. The Interest Calculation Date
will be the earlier of (i) the tenth calendar day after the Interest
Determination Date or, if that tenth calendar day is not a
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Business Day, the next succeeding Business Day, and (ii) the Business Day
immediately preceding the Interest Payment Date or the Maturity Date on which
the next payment of interest will be due. The Calculation Agent need not wait
until the relevant Interest Calculation Date to determine the interest rate if
the rate information it needs to make the determination is available from the
relevant sources sooner.
For each Interest Reset Period, the Calculation Agent will calculate the
amount of accrued interest by multiplying the face amount of this Subordinated
Note by an accrued interest factor for the Interest Reset Period. This factor
will equal the sum of the interest factors calculated for each day during the
Interest Reset Period. The interest factor for each day will be expressed as a
decimal and will be calculated by dividing the interest rate (also expressed as
a decimal) applicable to that day (i) by 360, if the Interest Rate Basis is the
Commercial Paper Rate, the Prime Rate, LIBOR, the CD Rate or the Federal Funds
Rate, or (ii) by the actual number of days in the year, if the Interest Rate
Basis is the Treasury Rate or the CMT Rate.
Upon the request of the holder of this Subordinated Note, the Calculation
Agent will provide such holder with the interest rate then in effect for this
Subordinated Note and, if determined, the interest rate that will become
effective on the next Interest Reset Date. The Calculation Agent's
determination of any interest rate, and its calculation of the amount of
interest for any Interest Reset Period, will be final and binding in the absence
of manifest error.
All percentages resulting from any calculation relating to this
Subordinated Note will be rounded upward or downward, as appropriate, to the
next higher or lower one hundred-thousandth of a percentage point. For example,
9.876541% (or .09876541) would be rounded down to 9.87654% (or .0987654) and
9.876545% (or .09876545) would be rounded up to 9.87655% (or .0987655). All
amounts used in or resulting from any calculation relating to this Subordinated
Note will be rounded upward or downward, as appropriate, to the nearest cent,
with one-half cent or more being rounded upward.
In determining the Base Rate that applies this Subordinated Note during a
particular Interest Reset Period, the Calculation
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Agent may obtain rate quotes from various banks or dealers active in the
relevant market, as described in the following subsections. Those reference
banks and dealers may include the Calculation Agent itself, including the Bank,
and its affiliates.
Except as otherwise provided herein, the rate of interest on this
Subordinated Note for each Interest Reset Date will 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.
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 greater than
the maximum rate permitted by Illinois law, as the same may be modified by
United States law of general application.
Commercial Paper Rate. If the Interest Rate Basis of this Subordinated
---------------------
Note is the Commercial Paper Rate, this Subordinated Note will bear interest at
a Base Rate equal to the Commercial Paper Rate, as adjusted by the Spread or
Spread Multiplier, if any, specified on the face hereof.
The Commercial Paper Rate will be the Money Market Yield (as defined below)
of the rate, for the relevant Interest Determination Date, for commercial paper
having the Index Maturity (as defined below) specified on the face of this
Subordinated Note, as published in H.15(519) (as defined below) under the
heading "Commercial Paper--Nonfinancial." If the Commercial Paper Rate cannot be
determined as described above, the following procedures will apply:
(i) If the rate described above does not appear in H.15(519) at 3:00
P.M., New York City time, on the relevant Interest Calculation Date (unless
the calculation is made earlier and the rate is available from that source
at that time), then the Commercial Paper Rate will be the rate, for the
relevant Interest Determination Date, for commercial paper having the Index
Maturity specified on the face of this Subordinated Note, as published in
H.15 Daily Update (as defined below) or another recognized electronic
source used for displaying that rate, under the heading "Commercial
Paper--Nonfinancial."
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(ii) If the rate described above does not appear in H.15(519), H.15
Daily Update or another recognized electronic source at 3:00 P.M., New York
City time, on the relevant Interest Calculation Date (unless the
calculation is made earlier and the rate is available from one of those
sources at that time), the Commercial Paper Rate 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 the relevant Interest Determination Date, by three
leading U.S. dollar commercial paper dealers in New York City selected by
the Calculation Agent for U.S. dollar commercial paper that has the
relevant Index Maturity and is placed for an industrial issuer whose bond
rating is "AA", or the equivalent, from a nationally recognized rating
agency.
(iii) If fewer than three dealers selected by the Calculation Agent
are quoting as described above, the Commercial Paper Rate for the new
Interest Reset Period will be the rate in effect for the prior Interest
Reset Period.
LIBOR. If the Interest Rate Basis of this Subordinated Note is LIBOR,
-----
this Subordinated Note will bear interest at a Base Rate equal to LIBOR, as
adjusted by the Spread or Spread Multiplier, if any, specified on the face
hereof. LIBOR will be the London interbank offered rate for deposits of U.S.
dollars. LIBOR will be either (a) the offered rate appearing on the Telerate
LIBOR Page (as defined below) or (b) the arithmetic mean of the offered rates
appearing on the Reuters screen LIBOR Page (as defined below), unless that page
by its terms cites only one rate, in which case that rate; in either case, as of
11:00 A.M., London time, on the relevant LIBOR Interest Determination Date, for
deposits of U.S. dollars having the relevant Index Maturity beginning on the
relevant Interest Reset Date. If no reference page is specified on the face of
this Subordinated Note, the Telerate LIBOR Page will apply. If LIBOR cannot be
determined in this manner, the following procedures will apply:
(i) If the Telerate LIBOR Page applies and the rate described above
does not appear on that page, or if the Reuters Screen LIBOR Page applies
and fewer than two of the rates described above appear on that page or no
rate appears on any page on which only one rate normally appears, then
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LIBOR will be determined on the basis of the rates, at approximately 11:00
A.M., London time, on the relevant LIBOR Interest Determination Date, at
which deposits of U.S. dollars having the relevant Index Maturity,
beginning on the relevant Interest Reset Date and in a Representative
Amount (as defined below) are offered to prime banks in the London
interbank market by four major banks in that market selected by the
Calculation Agent. The Calculation Agent will request the principal London
office of each of these banks to provide a quotation of its rate. If at
least two quotations are provided, LIBOR for the relevant LIBOR Interest
Determination Date will be the arithmetic mean of the quotations.
(ii) If fewer than two quotations are provided as described above,
LIBOR for the relevant LIBOR Interest Determination Date will be the
arithmetic mean of the rates for loans of U.S. dollars having the relevant
Index Maturity, beginning on the relevant Interest Reset Date and in a
Representative Amount to leading European banks quoted, at approximately
11:00 A.M., New York City time, on that LIBOR Interest Determination Date,
by three major banks in New York City selected by the Calculation Agent.
(iii) If fewer than three banks selected by the Calculation Agent are
quoting as described above, LIBOR for the new Interest Reset Period will be
the rate in effect for the prior Interest Reset Period.
Treasury Rate. If the Interest Rate Basis of this Subordinated Note is the
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Treasury Rate, this Subordinated Note will bear interest at a Base Rate equal to
the Treasury Rate, as adjusted by the Spread or Spread Multiplier, if any,
specified on the face hereof.
The Treasury Rate will be the rate for the auction, on the relevant
Treasury Interest Determination Date, of treasury bills having the Index
Maturity specified in the on the face of this Subordinated Note, as that rate
appears on Telerate Page (as defined below) 56 or 57 under the heading
"Investment Rate." If the Treasury Rate cannot be determined in this manner,
the following procedures will apply:
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(i) If the rate described above does not appear on either page at
3:00 P.M., New York City time, on the relevant Interest Calculation Date
(unless the calculation is made earlier and the rate is available from that
source at that time), the Treasury Rate will be the Bond Equivalent Yield
(as defined below) of the rate, for the relevant Interest Determination
Date, for the type of treasury bill described above, as published in H.15
Daily Update or another recognized electronic source used for displaying
that rate, under the heading "U.S. Government Securities/Treasury
Bills/Auction High."
(ii) If the rate described in the prior paragraph does not appear in
H.15 Daily Update or another recognized electronic source at 3:00 P.M., New
York City time, on the relevant Interest Calculation Date (unless the
calculation is made earlier and the rate is available from one of those
sources at that time), the Treasury Rate will be the Bond Equivalent Yield
of the auction rate, for the relevant Treasury Interest Determination Date
and for treasury bills of the kind described above, as announced by the
U.S. Department of the Treasury.
(iii) If the auction rate described in the prior paragraph is not so
announced by 3:00 P.M., New York City time, on the relevant Interest
Calculation Date, or if no such auction is held for the relevant week, then
the Treasury Rate will be the Bond Equivalent Yield of the rate, for the
relevant Treasury Interest Determination Date and for treasury bills having
a remaining maturity closest to the specified Index Maturity, as published
in H.15(519) under the heading "U.S. Government Securities/Treasury
Bills/Secondary Market."
(iv) If the rate described in the prior paragraph does not appear in
H.15(519) at 3:00 P.M., New York City time, on the relevant Interest
Calculation Date (unless the calculation is made earlier and the rate is
available from one of those sources at that time), then the Treasury Rate
will be the rate, for the relevant Treasury Interest Determination Date and
for treasury bills having a remaining maturity closest to the specified
Index Maturity, as published in H.15 Daily Update or another recognized
electronic source used for displaying that rate, under the
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heading "U.S. Government Securities/Treasury Bills/Secondary Market."
(v) If the rate described in the prior paragraph does not appear in
H.15 Daily Update or another recognized electronic source at 3:00 P.M., New
York City time, on the relevant Interest Calculation Date (unless the
calculation is made earlier and the rate is available from one of those
sources at that time), the Treasury Rate will be the Bond Equivalent Yield
of the arithmetic mean of the secondary market bid rates as of
approximately 3:30 P.M., New York City time, on the relevant Treasury
Interest Determination Date, of three primary U.S. government securities
dealers in New York City selected by the Calculation Agent for the issue of
treasury bills with a remaining maturity closest to the specified Index
Maturity.
(vi) If fewer than three dealers selected by the Calculation Agent
are quoting as described in the prior paragraph, the Treasury Rate in
effect for the new Interest Reset Period will be the rate in effect for the
prior Interest Reset Period.
CMT Rate. If the Interest Rate Basis of this Subordinated Note is the CMT
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Rate, this Subordinated Note will bear interest at a Base Rate equal to the CMT
Rate, as adjusted by the Spread or Spread Multiplier, if any, specified on the
face hereof.
The CMT Rate will be the rate displayed on the Designated CMT Telerate Page
(as defined below) under the heading ". . . Treasury Constant Maturities . . .
Federal Reserve Board Release H.15 . . . Mondays Approximately 3:45 P.M.," under
the column for the Designated CMT Index Maturity (as defined below), as follows:
(a) if the Designated CMT Telerate Page is Telerate Page 7051, the rate for the
relevant Interest Determination Date, or (b) if the Designated CMT Telerate Page
is Telerate Page 7052, the weekly or monthly average, as specified on the face
of this Subordinated Note, for the week that ends immediately before the week in
which the relevant Interest Determination Date falls, or for the month that ends
immediately before the month in which the relevant Interest Determination Date
falls, as applicable. If the CMT Rate cannot be determined in this manner, the
following procedures will apply:
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(i) If the applicable rate described above is not displayed on the
relevant Designated CMT Telerate Page at 3:00 P.M., New York City time, on
the relevant Interest Calculation Date (unless the calculation is made
earlier and the rate is available from that source at that time), then the
CMT Rate will be the applicable treasury constant maturity rate described
above--that is, for the Designated CMT Index Maturity and for either the
relevant Interest Determination Date or the weekly or monthly average, as
applicable--as published in H.15(519).
(ii) If the applicable rate described above does not appear in
H.15(519) at 3:00 P.M., New York City time, on the relevant Interest
Calculation Date (unless the calculation is made earlier and the rate is
available from one of those sources at that time), then the CMT Rate will
be the treasury constant maturity rate, or other U.S. treasury rate, for
the Designated CMT Index Maturity and with reference to the relevant
Interest Determination Date, that (a) is published by the Board of
Governors of the Federal Reserve System, or the U.S. Department of the
Treasury, and (b) is determined by the Calculation Agent to be comparable
to the applicable rate formerly displayed on the Designated CMT Telerate
Page and published in H.15(519).
(iii) If the rate described in the prior paragraph does not appear at
3:00 P.M., New York City time, on the relevant Interest Calculation Date
(unless the calculation is made earlier and the rate is available from one
of those sources at that time), then the CMT Rate will be the yield to
maturity of the arithmetic mean of the offered rates, as of approximately
3:30 P.M., New York City time, on the relevant Interest Determination Date,
of three primary U.S. government securities dealers in New York City
selected by the Calculation Agent for the most recently issued treasury
notes having an original maturity of approximately the Designated CMT Index
Maturity and a remaining term to maturity of not less than the Designated
CMT Index Maturity minus one year, and in a Representative Amount. In
selecting these offered rates, the Calculation Agent will request
quotations from five of these primary dealers and will disregard the
highest quotation--or, if there is equality, one of the highest--and the
lowest quotation--
-15-
or, if there is equality, one of the lowest. Treasury notes are direct,
non-callable, fixed rate obligations of the U.S. government.
(iv) If the Calculation Agent is unable to obtain three quotations
of the kind described in the prior paragraph, the CMT rate will be the
yield to maturity of the arithmetic mean of the offered rates, as of
approximately 3:30 P.M., New York City time, on the relevant Interest
Determination Date, of three primary U.S. government securities dealers in
New York City selected by the Calculation Agent for treasury notes with an
original maturity longer than the Designated CMT Index Maturity, with a
remaining term to maturity closest to the Designated CMT Index Maturity and
in a Representative Amount. In selecting these offered rates, the
Calculation Agent will request quotations from five of these primary
dealers and will disregard the highest quotation--or, if there is equality,
one of the highest--and the lowest quotation--or, if there is equality, one
of the lowest. If two treasury notes with an original maturity longer than
the Designated CMT Index Maturity have remaining terms to maturity that are
equally close to the Designated CMT Index Maturity, the Calculation Agent
will obtain quotations for the treasury note with the shorter remaining
term to maturity.
(v) If fewer than five but more than two of these primary dealers
are quoting as described in the prior paragraph, then the CMT Rate for the
relevant Interest Determination Date will be based on the arithmetic mean
of the offered rates so obtained, and neither the highest nor the lowest of
those quotations will be disregarded.
(vi) If two or fewer primary dealers selected by the Calculation
Agent are quoting as described above, the CMT Rate in effect for the new
Interest Reset Period will be the rate in effect for the prior Interest
Reset Period.
CD Rate. If the Interest Rate Basis of this Subordinated Note is the CD
-------
Rate, this Subordinated Note will bear interest at a Base Rate equal to the CD
Rate, as adjusted by the Spread or Spread Multiplier, if any, specified on the
face hereof.
-16-
The CD Rate will be the rate, on the relevant Interest Determination Date,
for negotiable U.S. dollar certificates of deposit having the Index Maturity
specified on the face of this Subordinated Note, as published in H.15(519) under
the heading "CDs (Secondary Market)." If the CD Rate cannot be determined in
this manner, the following procedures will apply:
(i) If the rate described above does not appear in H.15(519) at
3:00 P.M., New York City time, on the relevant Interest Calculation Date
(unless the calculation is made earlier and the rate is available from that
source at that time), then the CD Rate will be the rate, for the relevant
Interest Determination Date, described above as published in H.15 Daily
Update or another recognized electronic source used for displaying that
rate, under the heading "CDs (Secondary Market)."
(ii) If the rate described above does not appear in H.15(519), H.15
Daily Update or another recognized electronic source at 3:00 P.M., New York
City time, on the relevant Interest Calculation Date (unless the
calculation is made earlier and the rate is available from one of those
sources at that time), the CD Rate will be the arithmetic mean of the rates
offered as of 10:00 A.M., New York City time, on the relevant Interest
Determination Date, by three leading nonbank dealers in negotiable U.S.
dollar certificates of deposit in New York City, as selected by the
Calculation Agent for negotiable U.S. dollar certificates of deposit of
major U.S. money center banks with a remaining maturity closest to the
specified Index Maturity, and in a Representative Amount.
(iii) If fewer than three dealers selected by the Calculation Agent
are quoting as described above, the CD Rate in effect for the new Interest
Reset Period will be the rate in effect for the prior Interest Reset
Period.
Federal Funds Rate. If the Interest Rate Basis of this Subordinated Note
------------------
is the Federal Funds Rate, this Subordinated Note will bear interest at a Base
Rate equal to the Federal Funds Rate, as adjusted by the Spread or Spread
Multiplier, if any, specified on the face hereof.
-17-
The Federal Funds Rate will be the rate for U.S. dollar federal funds on
the relevant Interest Determination Date, as published in H.15(519) under the
heading "Federal Funds (Effective)," as that rate is displayed on Telerate Page
120. If the Federal Funds Rate cannot be determined in this manner, the
following procedures will apply:
(i) If the rate described above is not displayed on Telerate Page
120 at 3:00 P.M., New York City time, on the relevant Interest Calculation
Date (unless the calculation is made earlier and the rate is available from
that source at that time), then the Federal Funds Rate, for the relevant
Interest Determination Date, will be the rate described above as published
in H.15 Daily Update or another recognized electronic source used for
displaying that rate, under the heading "Federal Funds (Effective)."
(ii) If the rate described above is not displayed on Telerate Page
120 and does not appear in H.15 Daily Update or another recognized
electronic source at 3:00 P.M., New York City time, on the relevant
Interest Calculation Date (unless the calculation is made earlier and the
rate is available from one of those sources at that time), the Federal
Funds Rate will be the arithmetic mean of the rates for the last
transaction in overnight, U.S. dollar federal funds arranged, before 9:00
A.M., New York City time, on the relevant Interest Determination Date, by
three leading brokers of U.S. dollar federal funds transactions in New York
City selected by the Calculation Agent.
(iii) If fewer than three brokers selected by the Calculation Agent
are quoting as described above, the Federal Funds Rate in effect for the
new Interest Reset Period will be the rate in effect for the prior Interest
Reset Period.
Prime Rate. If the Interest Rate Basis of this Subordinated Note is the
----------
Prime Rate, this Subordinated Note will bear interest at a Base Rate equal to
the Prime Rate, as adjusted by the Spread or Spread Multiplier, if any,
specified on the face hereof.
The Prime Rate will be the rate, for the relevant Interest Determination
Date, published in H.15(519) under the heading
-18-
"Bank Prime Loan." If the Prime Rate cannot be determined as described above,
the following procedures will apply.
(i) If the rate described above does not appear in H.15(519) at
3:00 P.M., New York City time, on the relevant Interest Calculation Date
(unless the calculation is made earlier and the rate is available from that
source at that time), then the Prime Rate will be the rate, for the
relevant Interest Determination Date, as published in H.15 Daily Update or
another recognized electronic source used for the purpose of displaying
that rate, under the heading "Bank Prime Loan."
(ii) If the rate described above does not appear in H.15(519), H.15
Daily Update or another recognized electronic source at 3:00 P.M., New York
City time, on the relevant Interest Calculation Date (unless the
calculation is made earlier and the rate is available from one of those
sources at that time), then the Prime Rate will be the arithmetic mean of
the rates of interest publicly announced by each bank appearing on the
Reuters Screen US PRIME 1 Page (as defined below) as that bank's prime rate
or base lending rate, as of 11:00 A.M., New York City time, on the relevant
Interest Determination Date.
(iii) If fewer than four of these rates appear on the Reuters Screen
US PRIME 1 Page, the Prime Rate will be the arithmetic mean of the prime
rates or base lending rates, as of the close of business on the relevant
Interest Determination Date, of three major banks in New York City selected
by the Calculation Agent. For this purpose, the Calculation Agent will use
rates quoted on the basis of the actual number of days in the year divided
by a 360-day year.
(iv) If fewer than three banks selected by the Calculation Agent are
quoting as described above, the Prime Rate for the new Interest Reset
Period will be the rate in effect for the prior Interest Reset Period.
Definitions of Terms Used in Interest Rate Bases. The terms listed below
------------------------------------------------
are defined as follows:
-19-
"Bond Equivalent Yield" means a yield expressed as a percentage and
calculated in accordance with the following formula:
D x N x 100
---------------
360 - (D x M)
where (i) "D" means the annual rate for treasury bills quoted on a bank discount
basis and expressed as a decimal, (ii) "N" means the number of days in the year,
365 or 366, as the case may be, and (iii) "M" means the actual number of days in
the applicable Interest Reset Period.
"Business Day" means, for purposes of calculating interest on this
Subordinated Note, a day that is a Monday, Tuesday, Wednesday, Thursday or
Friday that is not a day on which banking institutions in New York City
generally are authorized or obligated by law, regulation or executive order to
close and, if the Interest Rate Basis specified on the face hereof is LIBOR, is
also a London Business Day.
"Designated CMT Index Maturity" means the Index Maturity for a Note having
as its Interest Rate Basis the CMT Rate and will be the original period to
maturity of a U.S. treasury security--either 1, 2, 3, 5, 7, 10, 20 or 30
years--specified in the applicable pricing supplement. If no such original
maturity period is so specified, the Designated CMT Index Maturity will be 2
years.
"Designated CMT Telerate Page" means the Telerate Page specified on the
face of this Subordinated Note (if the Interest Rate Basis is the CMT Rate) that
displays treasury constant maturities as reported in H.15(519). If no Telerate
Page is so specified, then the applicable page will be Telerate Page 7052. If
Telerate Page 7052 applies but this Subordinated Note does not specify whether
the weekly or monthly average applies, the weekly average will apply.
"H.15(519)" means the weekly statistical release entitled "Statistical
Release H.15 (519)," or any successor publication, published by the Board of
Governors of the Federal Reserve System.
-20-
"H.15 Daily Update" means the daily update of H.15(519) available through
the world wide web site of the Board of Governors of the Federal Reserve System,
at http://www.bog.frb.fed.us/releases/h15/update or any successor site or
publication.
"Index Maturity" means the period to maturity of the instrument or
obligation on which the interest rate formula is based, as specified on the face
of this Subordinated Note.
"London Business Day" means any day on which dealings in U.S. dollars are
transacted in the London interbank market.
"Money Market Yield" means a yield expressed as a percentage and calculated
in accordance with the following formula:
D x 360 x 100
---------------
360 - (D x M)
where (a) "D" means the annual rate for commercial paper quoted on a bank
discount basis and expressed as a decimal, and (b) "M" means the actual number
of days in the relevant Interest Reset Period.
"Representative Amount" means an amount that, in the Calculation Agent's
judgment, is representative of a single transaction in the relevant market at
the relevant time.
"Reuters Screen LIBOR Page" means the display on the Reuters Monitor Money
Rates Service, or any successor service, on the page designated as "LIBO" or any
replacement page or pages on which London interbank rates of major banks for
U.S. dollars are displayed.
"Reuters Screen US PRIME 1 Page" means the display on the "US PRIME 1" page
on the Reuters Monitor Money Rates Service, or any successor service, or any
replacement page or pages on that service, for the purpose of displaying prime
rates or base lending rates of major U.S. banks.
-21-
"Telerate LIBOR Page" means Telerate Page 3750 or any replacement page or
pages on which London interbank rates of major banks for U.S. dollars are
displayed.
"Telerate Page" means the display on Bridge Telerate, Inc., or any
successor service, on the page or pages specified in a Subordinated Note, or any
replacement page or pages on that service.
References to particular headings on pages designated by the following
terms include any successor or replacement heading or headings as determined by
the Calculation Agent: CMT Telerate Page, H.15(519), H.15 Daily Update, Reuters
Screen LIBOR Page, Reuters Screen US PRIME 1 Page, Telerate LIBOR Page or
Telerate Page.
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 Treasury Regulation
Section 1.1275-1(b) (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
Treasury Regulation Section 1.1275-1(b) (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
-22-
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 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
-23-
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, 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
-24-
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, 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.
IN WITNESS WHEREOF, the Bank has caused this instrument to be duly
executed.
THE NORTHERN TRUST COMPANY
By:______________________________
Authorized Signatory
-25-
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.
-26-
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.
-27-