Exhibit 10(xiv)(7)
FORM OF DIRECTOR PRORATED STOCK
AGREEMENT
UNDER THE AMENDED AND
RESTATED
NORTHERN TRUST CORPORATION 2002
STOCK PLAN
This Agreement is entered into as of
the day of
,
20 , between Northern Trust Corporation
(“Northern”) and
(“Participant”).
The Amended and Restated Northern
Trust Corporation 2002 Stock Plan (“Plan”) provides in
Section 10 of the Plan for the awarding of stock units
(“Stock Units”) to participants, who may include
directors of Northern who are not employees of the Corporation or
its Subsidiaries (collectively, the “Corporation”), as
approved by the Compensation and Benefits Committee
(“Committee”) of the Board of Directors of Northern.
Capitalized terms not defined in this Agreement shall have the
meanings assigned to them in the Plan.
In the exercise of its discretion
under the Plan, the Committee has determined that the Participant
should participate in the Plan and receive an award of Stock Units
under Section 10 of the Plan, and, accordingly, Northern and
the Participant hereby agree as follows:
|
1.
|
Grant . Northern hereby grants to the Participant an
award of Stock Units equal in value to $ ,
as determined by the closing sale price of Northern’s Common
Stock (as defined below) on
,
20 , (which represents a prorated award
based on the Participant’s service on the Board from the date
of election on
,
20 to the regular vesting date set forth in
Paragraph 5 below), subject to the terms and conditions of the Plan
and this Agreement. A Stock Unit is the right, subject to the terms
and conditions of the Plan and this Agreement, to receive a
distribution of a share of common stock (“Common
Stock”), pursuant to Paragraph 6 of this
Agreement.
|
|
2.
|
Stock
Unit Account .
Northern shall maintain an account (“Stock Unit
Account”) on its books in the name of the Participant which
shall reflect the number of Stock Units awarded to the Participant
that the Participant is eligible to receive in distribution
pursuant to Paragraph 6 of this Agreement.
|
|
3.
|
Dividend
Equivalents . Except
as provided below in Paragraph 7 of this Agreement, upon the
payment of any dividend on Common Stock occurring during the period
preceding the distribution of the Participant’s Stock Unit
award pursuant to Paragraph 6 of this Agreement, Northern
shall promptly (and in any event no later than March 15 of the
calendar year following the calendar year in which the dividend is
declared) pay to the Participant an amount in cash equal in value
to the dividends that the Participant would have received had the
Participant been the actual owner on the record date of the number
of shares of Common Stock represented by the Stock Units in the
Participant’s Stock Unit Account on that date
(“Dividend Equivalents”).
|
|
4.
|
Forfeiture . If the Participant incurs a Separation from
Service, as defined in Paragraph 7(c) below prior to the vesting
date set forth in Paragraph 5 of this Agreement, the
Participant’s Stock Units shall be forfeited and revert to
Northern, and Northern shall have no further obligation after such
date to pay Dividend Equivalents pursuant to Paragraph 3 of this
Agreement. Northern shall have no further obligation to the
Participant under this Agreement with respect to such Stock
Units.
|
-1-
|
5.
|
Vesting . The Participant shall become 100% vested in
his Stock Units upon the date (the “vesting date”) that
is the earliest to occur of (a) the date of the
Corporation’s 20 Annual Meeting of
Stockholders (the “regular vesting date”), (b) the
date of the Participant’s death, or (c) the date of a
Change in Control, provided that the Participant has not incurred a
Separation from Service prior to the earliest of the foregoing
three events.
|
|
6.
|
Distribution . Except as provided below in Paragraph 7 of
this Agreement,
|
|
|
(a)
|
Subject to
Paragraph 6(b), if the Participant has become 100% vested in his
Stock Units upon the regular vesting date, the Stock Units shall be
distributed upon such regular vesting date, provided that the
distribution shall be treated as made on such date if made within
the period described in Treasury Regulation
Section 1.409A-3(d), including without limitation the
requirement that the Participant shall in no event have the right
directly or indirectly to designate the taxable year of payment.
Stock Units shall be distributed only in shares of Common Stock so
that, pursuant to Paragraph 1 of this Agreement and this Paragraph
6, a Participant shall be entitled to receive one share of Common
Stock for each Stock Unit in the Participant’s Stock Unit
Account.
|
|
|
(b)
|
If a
Participant’s service on the Board of Directors of Northern
shall terminate by reason of death prior to the regular vesting
date, all cash (as provided in Paragraph 7) or Common Stock then
distributable hereunder with respect to the Participant shall be
distributed to such individual, trustee, trust or other entity
(“Beneficiary”) as the Participant shall have
designated by an instrument in writing last filed with Northern
prior to death, or in the absence of a designation, to the
following persons in the order indicated below:
|
|
|
•
|
|
The Participant’s spouse;
if none, then,
|
|
|
•
|
|
The Participant’s children
(in equal amounts); if none, then,
|
|
|
•
|
|
The Participant’s parents
(in equal amounts); if none, then,
|
|
|
•
|
|
The Participant’s brothers
and sisters (in equal amounts); if none, then,
|
|
|
•
|
|
The Participant’s
estate.
|
Except as otherwise provided in
Paragraph 7(c), such distribution shall be made on the date of
death, provided that the distribution shall be treated as made on
such date if made within the period described in Treasury
Regulation Section 1.409A-3(d), including without limitation the
requirement that neither the Participant (nor the Beneficiary)
shall have the right directly or indirectly to designate the
taxable year of payment.
-2-
|
|
(c)
|
If the
Participant dies on or after the regular vesting date, but prior to
the distribution of all amounts to which the Participant is
entitled hereunder, all cash or Common Stock then distributable
hereunder with respect to the Participant shall be distributed to
the Beneficiary designated by the Participant, or, if none, to the
persons identified in clause (b) of this Paragraph 6, within
the period described in clause (a) of this Paragraph 6, except
as otherwise provided in Paragraph 7(c).
|
|
|
(d)
|
In the case of
Stock Units that become vested as a result of a Change in Control,
the Participant shall not be entitled to a distribution of such
Stock Units upon such Change in Control. Instead, any Stock Units
that become vested as a result of a Change in Control shall be
distributed only upon the date, or the occurrence of the event upon
which, distribution would have been made in the absence of such
Change in Control. For purposes of this Paragraph 6(d) the Annual
Meeting in 20 shall be deemed to occur upon
the third Tuesday in April in that year.
|
|
|
(a)
|
Subject to
applicable law and the provisions of Paragraph 7(b), the
Participant may elect to defer receipt of the payment of all or any
portion of the Stock Units until the d
|
|
