Exhibit 10.2

TERMS AND CONDITIONS

2006 STOCK UNIT AWARD

NORTHERN TRUST CORPORATION 2002 STOCK PLAN

THIS STOCK UNIT AGREEMENT (AS DEFINED BELOW) IS AN AGREEMENT BETWEEN YOU AND
NORTHERN TRUST CORPORATION. PLEASE READ THIS AGREEMENT CAREFULLY. IF YOU AGREE
TO BE BOUND BY ALL OF THE TERMS AND CONDITIONS OF THIS AGREEMENT, PLEASE CLICK
THE “I ACCEPT” BUTTON AT THE END OF THIS AGREEMENT. IF YOU DO NOT AGREE TO THESE
TERMS AND CONDITIONS, PLEASE CLICK THE “I DECLINE” BUTTON AT THE END OF THIS
AGREEMENT, IN WHICH CASE THIS AGREEMENT WILL BE OF NO FORCE AND EFFECT AND YOUR
AWARD UNDER THIS AGREEMENT WILL BE CANCELLED.

Your stock unit grant is subject to the provisions of the Northern Trust
Corporation 2002 Stock Plan (the “Plan”) and the stock unit award notice (the
“Award Notice”). The Award Notice and these Terms and Condition constitute the
“Stock Unit Agreement” as defined in the Plan. If there is any conflict between
the information in the Stock Unit Agreement and the Plan, the Plan will govern.

 

1. Grant. The Corporation hereby grants to the Participant an award of Stock
Units, as set forth in the Award Notice, subject to the terms and conditions of
the Plan and the Stock Unit Agreement. A Stock Unit is the right, subject to the
terms and conditions of the Plan and the Stock Unit Agreement, to receive a
distribution of a share of Common Stock pursuant to Paragraph 6 of these Terms
and Conditions.

 

2. Stock Unit Account. The Corporation 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 these Terms and
Conditions.

 

3. Dividend Equivalents. 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 these Terms and Conditions, the
Corporation 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 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. The Stock Units granted to the Participant pursuant to the Stock
Unit Agreement shall be forfeited and revert to the Corporation if prior to the
date on which the Stock Units vest pursuant to Paragraph 5 of these Terms and
Conditions (a) the Participant violates any provision of Paragraph 7 of these
Terms and Conditions, or (b) except as described in Paragraphs 5 and 8 of these
Terms and Conditions, the Participant’s employment with the Corporation or any
of its Subsidiaries terminates.

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5. Vesting. The Participant shall become vested in the Stock Units in accordance
with the vesting schedule set forth in the Award Notice, subject to (a) prorated
vesting in accordance with Paragraph 8 of these Terms and Conditions upon the
Participant’s death, Retirement or Disability (each as defined below) or upon
termination of employment under certain circumstances described in Paragraph 8
of these Terms and Conditions where the Participant is entitled to severance
benefits, (b) prorated vesting in accordance with Paragraph 8 of these Terms and
Conditions in the event that prior to vesting the Participant’s employment with
the Corporation or any of its Subsidiaries has terminated and (i) the
Participant is a Management Committee member on the date of grant, (ii) the
Participant is 55 years or older on the date of termination of employment and
(iii) the Participant has not violated any provision of Paragraph 7 of these
Terms and Conditions during the period ending on the latest vesting date set
forth in the Award Notice (“Vesting Period”), or (c) full vesting in the event
of a Change in Control (as defined in the Plan) of the Corporation. If the
Participant’s employment with the Corporation or any of its Subsidiaries
terminates for any reason other than as set forth above in this Paragraph 5, the
Stock Units in the Participant’s Stock Unit Account that have not yet vested
shall be forfeited and revert to the Corporation on such termination date, and
the Corporation shall have no further obligation after such date to pay Dividend
Equivalents pursuant to Paragraph 3 of these Terms and Conditions. The
Corporation shall have no further obligation to the Participant under these
Terms and Conditions following the Participant’s forfeiture of Stock Units.

For purposes of these Terms and Conditions, “Retirement” means retirement
occurring by reason of the Participant having qualified for a Normal, Early, or
Postponed Retirement under The Northern Trust Company Pension Plan.

For purposes of these Terms and Conditions, “Disability” means a disability that
continues for a period of 12 months as defined by Northern Trust’s Managed
Disability Program.

 

6. Distribution. Except as provided below in this Paragraph 6 or in Paragraphs 9
or 10 of these Terms and Conditions, the Participant shall become entitled to
the distribution of the Participant’s Stock Units on the Applicable Date in the
year in which the Stock Units vest pursuant to Paragraph 5 of these Terms and
Conditions, and such distribution shall be made to the Participant as soon as
practicable thereafter.

In the event of the Participant’s death prior to the end of the Vesting Period,
the Participant’s beneficiary shall become entitled to the distribution of any
vested Stock Units on the Applicable Date immediately after the Participant’s
death in accordance with Paragraph 8 of these Terms and Conditions, and such
distribution shall be made (a) as soon as practicable thereafter, and (b) to
such beneficiary and in such proportions as the Participant may designate in
writing, and 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,

 

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  •   The Participant’s brothers and sisters (in equal amounts); if none, then,

 

  •   The Participant’s estate.

In the event of the Participant’s Retirement or Disability prior to the end of
the Vesting Period, the Participant shall become entitled to the distribution of
any vested Stock Units on the Applicable Date immediately after the
Participant’s Retirement or Disability in accordance with Paragraph 8 under
these Terms and Conditions.

Stock Units shall be distributed only in shares of Common Stock so that,
pursuant to Paragraph 1 of these Terms and Conditions 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, the Corporation may
rely upon information reasonably available to it or upon representations of the
Participant’s legal or personal representative.

For purposes of these Terms and Conditions, “Applicable Date” with respect to a
given year means the first trading day of that year, after the vesting of the
Stock Units, on which the Corporation’s trading blackout is not in effect for
the Participant, except that for a Participant subject to Paragraph 9 of these
Terms and Conditions, “Applicable Date” with respect to a given year means the
first trading day of the fourth quarter of that year on which the Corporation’s
trading blackout is not in effect for the Participant; or, in any case, such
other date in that year as the Committee or the Executive Vice President of
Human Resources may determine.

 

7. Restricted Activity. Despite anything to the contrary in Paragraph 5, 6 or 8
of these Terms and Conditions, the Participant’s Stock Units (whether vested or
unvested) shall be forfeited and the Corporation shall have no obligation to
distribute the Stock Units to the Participant (or the Participant’s beneficiary)
pursuant to Paragraph 6, or to pay any Dividend Equivalents pursuant to
Paragraph 3, if the Participant:

 

  (a) at any time after the date of these Terms and Conditions, has divulged,
directly or indirectly, or used, for the Participant’s own or another’s benefit,
any Confidential Information; or

 

  (b) at any time after the date of these Terms and Conditions and through a
period of twelve (12) months after the Participant ceases to be employed by the
Corporation or any of its Subsidiaries for any reason, has Solicited, or
assisted in the Solicitation of, any Client or Prospective Client; or solicited,
encouraged, advised, induced or caused any employee of the Corporation or any of
its Subsidiaries to terminate his or her employment with the Corporation or any
of its Subsidiaries, or provided any assistance, encouragement, information, or
suggestion to any person or entity regarding the solicitation or hiring of any
employee of the Corporation or any of its Subsidiaries; provided, however, this
clause (b) shall not prohibit the Participant’s Solicitation of any Client or
Prospective Client with

 

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whom he or she had a business relationship prior to the start of his or her
employment with the Corporation or any of its Subsidiaries, provided no
Confidential Information, directly or indirectly, is used in such Solicitation.

 

  (c) If the Participant shall have so engaged in any such activity described in
clauses (a) or (b) above without the written consent of the Corporation, the
Participant’s Stock Units (whether vested or unvested) shall be forfeited to the
Corporation by notice in writing to the Participant within a reasonable period
of time after the Corporation acquires knowledge of the Participant’s violation
of this Paragraph 7. Any failure by the Participant to comply with this
Paragraph 7 shall entitle the Corporation, as determined by the Committee in its
sole discretion, to (i) cancel and terminate all of the Participant’s
unexercised, unexpired, unpaid or deferred Stock Units (whether vested or
unvested) under the Plan, and (ii) rescind any exercise, payment or delivery
with respect to any Stock Units occurring within twelve (12) months prior to, or
at any time following, the date of the Participant’s termination of employment
for any reason (including but not limited to termination of employment due to
Retirement or Disability). Upon any such rescission, (1) the Participant shall
immediately pay to the Corporation the amount of any gain realized or payment
received, and (2) the Participant shall immediately forfeit to the Corporation
any shares of the Corporation’s Common Stock received, in each case as a result
of the rescinded exercise, payment or delivery with respect to any Stock Units,
in such manner and on such terms and conditions as the Committee shall require,
and the Corporation shall be entitled, as permitted by applicable law, to deduct
from any amounts the Corporation owes the Participant from time to time the
amount of any such gain realized or payment received. “Gain realized” shall be
determined by the Committee in its sole discretion.

 

8. Proration.

 

  (a) The Participant shall cease to participate in the Plan under these Terms
and Conditions as of the date of the Participant’s death, Disability or
Retirement. If the Participant’s death, Retirement or Disability occurs prior to
the end of the Vesting Period, or if prior to the end of the Vesting Period, the
Participant’s employment is terminated under circumstances that entitle the
Participant to severance benefits under the Northern Trust Corporation Severance
Plan (the “Severance Plan”) and the Participant has executed and not revoked a
settlement agreement, waiver and release under the Severance Plan (a “Release”),
then, in each such case, the Participant shall have credited, and be deemed
vested in, on such date of death, Retirement or Disability or date of
termination of employment, a number of Stock Units as determined by multiplying
the number of Stock Units which would have been distributable to the Participant
if the Participant had participated in the Plan under these Terms and Conditions
for the full Vesting Period, by the ratio of the number of full calendar months
of the Participant’s actual participation in the Plan under these Terms and
Conditions during the Vesting Period to the number of full calendar months in
the Vesting Period.

 

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  (b) If, prior to the end of the Vesting Period, a Participant’s employment
with the Corporation or any of its Subsidiaries has terminated and (i) the
Participant is 55 years or older on the date of such termination and (ii) the
Participant has not violated any provision of Paragraph 7 of these Terms and
Conditions during the Vesting Period, then the Participant shall have credited,
and be deemed vested in, on the vesting date of the award, a number of Stock
Units as determined by multiplying the number of Stock Units which would have
been distributable to the Participant if the Participant had been employed by
the Corporation or any of its Subsidiaries for the full Vesting Period, by the
ratio of the number of full calendar months of the Participant’s actual
employment by the Corporation or any of its Subsidiaries under these Terms and
Conditions during the Vesting Period to the number of full calendar months in
the Vesting Period.

 

9. Mandatory Deferral. Subject to applicable law, if the Participant is, or in
the sole judgment of the Committee is reasonably expected to be, a “covered
employee” within the meaning of Section 162(m) of the Internal Revenue Code of
1986, as amended (the “Code”) and the regulations promulgated thereunder
(“Section 162(m)”) in the calendar year in which the Participant would otherwise
become entitled to the distribution of the Participant’s Stock Units, the
Participant shall not become entitled to the distribution of the Participant’s
Stock Units until the Applicable Date in the first calendar year that the
Participant is not a “covered employee” under Section 162(m), as determined by
the Committee. Notwithstanding the foregoing, the Committee, in its sole
discretion, shall have the right to distribute to the Participant all or any
portion of the Stock Units or any deferred Stock Units that it determines is not
subject to the deduction limitation of Section 162(m) in a given calendar year,
after taking into account all other compensation payable to the Participant for
that year that it determines is subject to the deduction limitation of
Section 162(m). All determinations relating to “covered employee” status and the
application of the deduction limitation of Section 162(m) shall be made by the
Committee, in its sole discretion, as promptly as reasonably practical. The
provisions of this Paragraph 9 shall not apply following a Change in Control of
the Corporation, and the Participant shall be entitled to the distribution of
the Participant’s Stock Units without regard to the Participant’s status as a
“covered employee” within the meaning of Section 162(m).

 

10. Voluntary Deferral.

 

  (a) Subject to applicable law, in addition and subject to any mandatory
deferral under Paragraph 9 of this Agreement, the Participant may elect to defer
all or any portion of the Stock Units so that the Participant becomes entitled
to the distribution of any vested Stock Units on the Applicable Date of any year
that is (i) no earlier than the end of the third calendar year after the
calendar year in which the Stock Units vest pursuant to Paragraph 5 of these
Terms and Conditions, and (ii) no later than the fifth calendar year beginning
after the Participant’s Retirement or other termination of employment.
Notwithstanding the previous sentence, in no event shall distribution of the
Stock Units begin earlier than six months following termination of employment,
unless due to the Participant’s death, if the Participant was a “Specified
Employee” (as defined in

 

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Section 409A(a)(2)(B)(i) of the Code) of the Corporation at termination of
employment, as determined in accordance with procedures adopted by the
Corporation pursuant to Section 409A of the Code and related regulations.

 

  (b) The Participant shall make any election to defer receipt of the payment of
all or any portion of the Stock Units by filing a deferral election form with
the Corporation within thirty (30) days after the date of these Terms and
Conditions and at least thirteen (13) months prior to the end of the Vesting
Period set forth in the Award Notice.

 

  (c) Distribution of any deferred Stock Units pursuant to this Section 10 shall
be made at one time or in up to five (5) annual installments, as the Participant
shall have elected in the deferral election form described in clause (b) above.
If the Participant has elected an installment distribution, the initial
installment shall be distributed as soon as practical after the Applicable Date
in the first year to which distribution has been deferred, and the remaining
installments shall be distributed on each anniversary date of the initial
distribution.

 

11. Delivery of Shares. The Corporation shall not be required to issue or
deliver any shares of Common Stock pending compliance with applicable federal
and state securities laws (including any registration required) and compliance
with applicable stock exchange rules and practices. The Corporation shall use
its reasonable efforts to cause compliance with those laws, rules and practices.

 

12. Adjustment. The Stock Units provided herein are subject to adjustment in
accordance with the provisions of Section 11 of the Plan.

 

13. No Right to Employment. Nothing in the Plan or the Stock Unit Agreement
shall be construed as creating any right in the Participant to continued
employment or as altering or amending the existing terms and conditions of
employment of the Participant except as otherwise specifically provided in the
Stock Unit Agreement.

 

14. Nontransferability. No interest hereunder of the Participant is transferable
except as provided in the Stock Unit Agreement.

 

15. Withholding. The Corporation shall have the right to deduct from any
distribution made hereunder in cash any sum required to be withheld by the
Corporation for federal, state or local taxes. In the case of any distribution
made hereunder in shares of Common Stock, the Corporation requires as a
condition of distribution that the Participant or the Participant’s beneficiary
pay the Corporation the amount which the Corporation determines to be required
to be withheld for federal, state or local taxes. Unless the Participant
otherwise elects, the tax withholding obligation with respect to shares of
Common Stock shall be satisfied by the Corporation’s withholding a portion of
such shares otherwise distributable to the Participant. The Participant may
elect to satisfy the tax withholding obligation by the delivery to the
Corporation’s of shares of Common Stock acceptable to the Corporation. Any
shares withheld or delivered shall be valued at their fair market value as of
the date of distribution.

 

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16. Administration. The Plan is administered by the Committee. The rights of the
Participant hereunder are expressly subject to the terms and conditions of the
Plan (including continued shareholder approval of the Plan), together with such
guidelines as have been or may be adopted from time to time by the Committee.
The Participant hereby acknowledges receipt of a copy of the Plan.

 

17. No Rights as Shareholder. Except as provided herein, the Participant will
have no rights as a shareholder with respect to the Stock Units.

 

18. Interpretation. Any interpretation by the Committee of the terms and
conditions of the Plan, the Stock Unit Agreement or any guidelines shall be
final. The Stock Unit Agreement shall be construed under the laws of the State
of Illinois without regard to the conflict of law provisions of any state.

 

19. Sole Agreement. The Stock Unit Agreement, together with the Plan, is the
entire Agreement between the parties hereto, all prior oral and written
representations being merged herein. No amendment or modification of the terms
of the Stock Unit Agreement shall be binding on either party unless reduced to
writing and signed by the party to be bound. The Stock Unit Agreement shall be
binding upon, inure to the benefit of, and be enforceable by the parties hereto
and their respective successors.

 

20. Definitions. Capitalized terms not defined in the Stock Unit Agreement shall
have the meanings assigned to them in the Plan. For purposes of the Stock Unit
Agreement:

 

  (a) “Client” means any person or entity with which the Corporation, or any of
its Subsidiaries, did business and with which the Participant had contact, or
about which the Participant had access to Confidential Information, during the
last twelve (12) months of his or her employment.

 

  (b) “Competitive Service or Product” means any service or product: (i) that is
substantially similar to or competitive with any service or product that the
Participant created or provided, or of which the Participant assisted in the
creation or provision, during his or her employment by the Corporation or any of
its Subsidiaries; or (ii) about which the Participant had access to Confidential
Information during his or her employment by the Corporation or any of its
Subsidiaries.

 

  (c) “Confidential Information” means any trade secrets or other information,
including, but not limited to, any client information (for example, client
lists, information about client accounts, borrowings, and current or proposed
transactions), any internal analysis of clients, marketing strategies, financial
reports or projections, business or other plans, data, procedures, methods,
computer data or system program or design, devices, lists, tools, or
compilation, which relate to the present or planned business of the Corporation
or any of its Subsidiaries and which has not been made generally known to the
public by authorized representatives of the Corporation.

 

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  (d) “Prospective Client” means any person or entity to which the Corporation,
or any of its Subsidiaries, provided, or from which the Corporation, or any of
its Subsidiaries received, a proposal, bid, or written inquiry (general
advertising or promotional materials and mass mailings excepted) and with which
the Participant had contact, or about which the Participant had access to
Confidential Information, during the last twelve (12) months of his or her
employment.

 

  (e) “Solicit” and “Solicitation” (with respect to Clients or Prospective
Clients) mean directly or indirectly, and without the Corporation’s written
authorization, to invite, encourage, request, or induce (or to assist another to
invite, encourage, request or induce) any Client or Prospective Client of the
Corporation, or any of its Subsidiaries, to: (i) surrender, redeem or terminate
a product, service or relationship with the Corporation, or any of its
Subsidiaries; (ii) obtain any Competitive Service or Product from the
Participant or any third party; or (iii) transfer a product, service or
relationship from the Corporation, or any of its Subsidiaries, to the
Participant or any third party.

 

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