FORM OF DIRECTOR STOCK AGREEMENT UNDER THE NORTHERN TRUST CORPORATION 2002 STOCK PLANEquity Incentive Plan Agreement |
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Exhibit 10.6
FORM OF
DIRECTOR STOCK AGREEMENT
UNDER THE NORTHERN TRUST CORPORATION
2002 STOCK PLAN
This Agreement is entered into as of the day of , 200 , between Northern Trust Corporation (“Northern”) and (“Participant”).
The 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.
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] [ Stock Units equal in value to $60,000, as determined by the average of the high and low sale prices of Northern’s Common Stock (as defined below) on the date of the 200_ annual meeting of stockholders], 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, $1.66 2/3 par value per share, of Northern (“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 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’s service on the Board of Directors of Northern terminates for any reason prior to the Annual Meeting of the Stockholders of Northern held in 200_, the Participant’s Stock Units that have not yet vested shall be forfeited and revert to Northern. Northern shall have no further obligation to the Participant under this Agreement with respect to any forfeited Stock Units. |
| 5. | Vesting. The Stock Units shall become vested in accordance with the vesting schedule attached as Exhibit A to this Agreement. |
| 6. | Distribution. Except as provided below in Paragraph 7 of this Agreement, the Participant’s Stock Units shall be distributed to the Participant as soon as practicable after vesting. 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. No distribution shall be made prior to the first date that shares of Common Stock may be distributed to the Participant without penalty or forfeiture under federal or state laws or regulations governing short swing trading of securities. In determining whether a distribution would result in such a penalty or forfeiture, Northern may rely upon information reasonably available to it or upon representations of the Participant’s legal or personal representative. |
If a Participant’s service on the Board of Directors of Northern shall terminate by reason of death, or if the Participant shall die after becoming entitled to distribution hereunder, but prior to receipt of the entire distribution, 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. |
Such distribution shall be made as soon as practicable after the death of the Participant or on such other date designated by the Participant or the Participant’s Beneficiary, but in any event not later than two years after the death of the Participant.
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