SECOND AMENDMENT OF THE NORTHERN TRUST CORPORATION SEVERANCE PLAN

EX-10.II 4 dex10ii.htm SECOND AMENDMENT OF THE SEVERANCE PLAN Second Amendment of the Severance Plan

Exhibit 10(ii)

 

SECOND AMENDMENT

OF THE

NORTHERN TRUST CORPORATION

SEVERANCE PLAN

 

WHEREAS, the Northern Trust Corporation (the “Corporation”) maintains the Northern Trust Corporation Severance Plan (the “Plan”); and

 

WHEREAS, amendment of the Plan is now considered desirable;

 

NOW, THEREFORE, by virtue and in exercise of the amending power reserved to the Corporation under Section 6.1 of the Plan, the Plan is hereby amended as follows effective as of January 1, 2005:

 

1. Paragraph (A) of Section 2.13 of Plan shall be deleted in its entirety and the following substituted therefor:

 

“(A) comparable employment with an Employer (as determined by the Employer in the Employer’s sole discretion) in a position which does not require relocation to a non-commutable distance, or.”

 

2. The second and third sentences of Section 3.3(iii) of the Plan shall be deleted in their entirety and the following substituted therefor:

 

“If such an Eligible Employee is able to return to active employment within six (6) months from such Eligible Employee’s first day of absence due to disability, such Eligible Employee’s employment will be terminated, and such Eligible Employee will be entitled to Severance Benefits, subject to Section 4.4. However, if such an Eligible Employee is absent from employment due to disability for more than six (6) months, such Eligible Employee will no longer be entitled to any Severance Benefits regardless of the reasons for or timing of such Employee’s Termination of employment.”

 

3. The first two sentences of Section 4.2 of the Plan shall be deleted in their entirety and the following sentence substituted therefor:

 

“An Eligible Employee will receive Severance Benefits in the form of a lump sum cash payment to be made as soon as practicable following Termination Based on Employer Action.”

 

4.          (a)    To delete the third sentence of Section 5.6 of the Plan in its entirety and to substitute the following therefor:
          “The Committee shall render a decision on the appeal no later than the date of the Committee meeting which immediately follows the

          Committee’s receipt of the claimant’s request for review, unless the request for review is filed within thirty (30) days preceding the date of such meeting. In such case, a decision will be made no later than the date of the second meeting following the Committee’s receipt of the claimant’s request for review. The Committee may extend this review until no later than its third meeting following the claimant’s request for review if special circumstances apply and the Committee notifies the claimant of such extension.”
           (b)    To delete the fifth sentence of Section 5.6 of the Plan in its entirety and to substitute the following therefor:
          “The Committee shall notify the claimant of its decision in writing or electronically within a reasonable time (but not later than five (5) business days) after the Committee meeting at which the claimant’s request for review is considered.”
           (c)    To add the following at the end of Section 5.6 of the Plan:
          “The Committee has full discretion and authority to construe and interpret all provisions of the Plan. The claimant may not bring a legal action in any court under the Plan until the claim and appeal rights described in this Section have been exercised and exhausted, and the eligibility or benefits requested in the appeal have been denied, in whole or in part.”
5.   

To delete the Severance Schedule for Termination by Employer Action in its entirety and to substitute therefor the Several Schedule for Termination by Employer Action that is attached to this Second Amendment.

 

IN WITNESS WHEREOF, the Corporation has caused this amendment to be executed on its behalf this 9th of March, 2005 effective as of January 1, 2005.

 

NORTHERN TRUST CORPORATION
By:  

/s/ Timothy P. Moen

Name:   Timothy P. Moen
Title:   Executive Vice President and Human Resources Department Head

 

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REVISED EFFECTIVE 1/1/05

 

Severance Schedule for Termination By Employer Action*

 

SEVERANCE BENEFITS PAYMENTS**

 

Official Status

   

Years of Service

     Less than 3 Years   

Greater than or equal to 3 Years

but less than 25 Years

    Greater than or equal to 25 Years
Officer*    4 weeks of Base Pay    2 weeks of Base Pay per completed Year of Service    52 weeks of Base Pay
Non-Officer*    2 weeks of Base Pay    1 week of Base Pay per completed Year of Service    26 weeks of Base Pay
** Minimum Severance Benefits Pay is 2 weeks of Base Pay and Maximum Severance Benefits Pay is 52 weeks of Base Pay. Total Severance Benefits payments may not exceed twice an Eligible Employee’s annual Base Pay in the year prior to Termination. Severance Benefits Payments and any COBRA Subsidy will be paid as a lump sum.

 

WELFARE BENEFITS

 

COBRA Continuation Coverage: An Eligible Employee and eligible dependents have the right to continue medical, dental and vision coverage in accordance with the time periods set forth under the provisions of the federal Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”). Medical, dental and vision coverage will automatically cease on the last day of the month in which an Eligible Employee’s Termination of employment occurs unless an Eligible Employee elects such continuation coverage under the provisions of COBRA. The costs of such coverage shall be payable by the Eligible Employee for the duration of the COBRA coverage, to be paid monthly by personal check, as the premiums become due.

 

COBRA Subsidy*: The Employer shall provide a COBRA subsidy payment to assist the Eligible Employee in paying the costs of coverage under applicable employee welfare benefit plans (medical and dental). The amount of the COBRA subsidy payment shall equal the difference between an Eligible Employee’s active employee medical and/or dental premium(s) as of the first day of the Notification Period (described in Section 4.2) and the rate under COBRA on such date, including the 2% administrative fee, multiplied by the number of weeks to which an Eligible Employee is eligible for Severance Benefits Payments as described above. The COBRA subsidy payment shall be made in the form of a lump sum.

Outplacement Assistance*: Varied levels of outplacement assistance will be offered through a firm selected by the Employer. Outplacement assistance will be available on the first day of an Eligible Employee’s Notification Period. The level and duration of outplacement assistance will be determined by an Eligible Employee’s official status in accordance with the Employer’s policies and practices. In order to use outplacement assistance, an Eligible Employee must begin outplacement assistance no later than 30 days after Termination of employment.

 

Non-contributory Life Insurance, Business Travel, Workers Compensation    Coverage ends upon Termination.
Contributory Life Insurance, Dependent Life Insurance, 24-Hour Accident Insurance    Coverage ends on the last day of the month for which a premium contribution from an Eligible Employee’s salary was made.
Health Care Account, Day Care Account    Eligible Employees may submit claims for expenses incurred prior to Termination date in accordance with applicable plan terms and administrative requirements. Claims must be submitted prior to end of first quarter of the year following Termination. Health Care Account may be extended on after-tax basis through a valid COBRA election.
Educational Assistance*    Existing tuition reimbursement repayment obligations will be waived. At the Eligible Employee’s Termination of employment, if enrolled and attending course(s), the Eligible Employee will be reimbursed in accordance with the Educational Assistance Program.
Short-Term Disability, Long-Term Disability    Coverage ends upon Termination, unless disabled on the date of Termination. If disabled on the date of Termination, coverage will generally continue until individual determined to be medically able to return to work, in accordance with applicable disability plan terms. See also Plan Section 3.3 (ii) and (iii).
Family Assistance and LifeCare® Programs    Eligible Employees will have access to these programs for 90 days following Termination.

ENHANCED RETIREMENT AND OTHER BENEFITS

 

Pension Plan and TIP*    Enhanced retirement eligibility, vesting and related benefits will be provided in accordance with the applicable retirement plans.
Stock Options*    Enhanced vesting and other benefits may be provided in accordance with the applicable stock option plan and the Eligible Employee’s stock option agreements.
* NOTE: Eligibility for receipt of all benefits is conditioned on execution (and non-revocation) of a settlement agreement, waiver and release (“Release”) in accordance with Section 4.4., provided that an Eligible Employee who does not execute (or who revokes within the revocation period) such a Release shall be entitled to (i) severance benefits, payable in the form of a lump sum, in the amount of one (1) week of Base Pay for non-officers and two (2)weeks of Base Pay for officers, (ii) access to (A) the Employer’s Family Assistance and LifeCare® Programs for 90 days following Termination and (B) basic outplacement assistance and (iii) the opportunity to work with a recruiting consultant to perform an internal search for a new position during the Notification Period.

 

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