Exhibit Number (10)(ii)
To 3/31/96 Form ID-Q
NORTHERN TRUST CORPORATION
MANAGEMENT PERFORMANCE PLAN
1996
I. Purpose of Plan
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The purpose of the Annual Performance Plan (the "Plan") is to promote the
achievement of superior financial and operating performance of the
Northern Trust Corporation and its subsidiaries (hereinafter referred to
as the "Corporation"), and further the objective of delivering unrivaled
service quality to its clients and partners through the awarding of cash
incentive payments to selected officers.
II. Plan Year
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The Plan is effective from January 1, 1996 to December 31, 1996.
III. Eligibility and Participation
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Eligibility to participate in the Plan is restricted to selected
executive officers and subject to approval by the Compensation and
Benefits Committee of the Board of Directors (the "Committee").
IV. Participant Target Awards
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At the beginning of the Plan year, the Committee shall determine
individual target awards. The target award will be described as a percent
of the annual base salary earned during the Plan year.
V. Award Determination
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The Committee establishes a Corporate Earnings Target for the Plan at the
beginning of the Plan year. The available funding for participant awards
will be based on (a) the aggregate of participants' target award amounts
and (b) the Corporation's financial achievement versus the Corporate
Earnings Target. The amount of the award funding will either increase or
decrease as calculated by the formula detailed in Attachment I.
VI. Payment of Awards
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Awards will be paid in cash as soon as practicable following the
completion of the Plan year. Any award amount that, with all other
compensation paid or to be paid for that year to the participant, exceeds
the level of tax deductible compensation to the Corporation, as
determined under Section 162(m) of the Internal Revenue Code, will be
deferred and paid in the year following the participant's retirement or
at which time the amount is no longer subject to such restrictions.
Deferred award balances will be adjusted with an interest factor as shall
be determined at the time of the deferral by the Committee.
VII. Administration
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The Plan shall be administered by the Committee. Subject to the
provisions of the Plan, the Committee shall be authorized to interpret
the Plan, to establish, amend and rescind any rules and regulations
relating to the Plan, and to make all other determinations necessary or
advisable for the administration of the Plan. The determinations of the
Committee in the effective administration of the Plan, as described
herein, shall be final and conclusive.
The Board of Directors of the Corporation, by written resolution, may
amend, suspend, or terminate any or all provisions of the Plan at any
time.
VIII. Miscellaneous Provisions
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The following miscellaneous provisions are applicable to the Plan:
(a) In the event of a participant's death, disability or retirement,
awards shall be prorated to the date of the event, and paid as
described in Section VI.
(b) Termination of employment by a participant during the Plan year, for
reasons other than death, disability, or retirement shall result in
immediate exclusion from the Plan unless the Compensation and
Benefits Committee decides otherwise in its sole discretion.
(c) Except in the event of the death of a participant, the rights and
interests of a participant under the Plan shall not be assigned,
encumbered, or transferred.
(d) No employee or other person shall have any claim or right to be
granted an award under the Plan. Neither the Plan, nor any action
taken thereunder, shall be construed as giving any employee or other
person any right to be retained in the employ of the Corporation.
(e) The Corporation shall have the right to deduct from all payments
made under the Plan any taxes required by law to be withheld with
respect to such payment.
(f) All questions pertaining to the validity, construction and
administration of the Plan and any award hereunder shall be
determined in conformity with the laws of the State of Illinois.
(g) Each participant shall designate a beneficiary (the "Designated
Beneficiary") to receive the award, if any, allocated to a
participant, in the event of such participant's death. If no
Designated Beneficiary survives the participant, it shall be the
surviving spouse of the participant or, if there is no surviving
spouse, it shall be the participant's estate.
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