Exhibit 10.11

Unitrin, Inc. 2005 Restricted Stock and Restricted Stock Unit Plan

PERFORMANCE-BASED RESTRICTED STOCK AWARD AGREEMENT

This PERFORMANCE-BASED RESTRICTED STOCK AWARD AGREEMENT (“Agreement”) is made as
of this      day of                     , 2       (“Grant Date”) between
UNITRIN, INC., a Delaware corporation (the “Company” or “Unitrin”), and «Name»
(the “Restricted Stockholder”) for an award of restricted stock consisting of an
aggregate of «shares» («number») shares of restricted stock.

SIGNATURES

As of the date set forth above, the parties have executed this Agreement,
including Exhibit A:

 

UNITRIN, INC.       RESTRICTED STOCKHOLDER By:   

 

     

 

   «Authorized Officer»       «Name»

By his or her signature below, the spouse of the Restricted Stockholder agrees
to be bound by all of the terms and conditions of the foregoing Restricted Stock
Agreement.

 

     

 

        

 

         Print Name

RECITALS

A. The Board of Directors of the Company has adopted the 2005 Restricted Stock
and Restricted Stock Unit Plan, including any and all amendments to date (the
“Plan”).

B. The Plan is administered by the Compensation Committee of the Company’s Board
of Directors (the “Committee”).

C. The Plan provides for the granting to selected employees and other persons
furnishing services to the Company or any subsidiary or affiliate of the
Company, as the Committee may from time to time determine, of restricted stock
which shall be shares of the Company’s Common Stock (the “Shares”).

 

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D. Pursuant to the Plan, the Committee has determined that it is to the
advantage and best interest of the Company and its stockholders to grant an
award of restricted stock to the Restricted Stockholder as an inducement to
remain in the service of the Company and as an incentive for increased effort
during such service, and has approved the execution of this Agreement between
the Company and the Restricted Stockholder.

NOW, THEREFORE, the parties hereto agree as follows:

1. Grant. The Company grants to the Restricted Stockholder an award of
restricted stock on the terms and conditions hereinafter set forth, consisting
of the aggregate number of Shares of restricted stock set forth above on page
one (the “Restricted Stock”).

2. Vesting and Forfeiture.

(a) Restricted Period. The Restricted Stock shall be restricted during a period
(the “Restricted Period”) beginning on the Grant Date and expiring on the date
that the Shares vest (the “Vesting Date”) or are forfeited in accordance with
the terms of this Agreement. The Shares will vest on the Vesting Date only to
the extent provided in and in accordance with the provisions of Exhibit A.

(b) Forfeiture or Early Vesting upon Retirement, Death, Disability and Other
Events. During the Restricted Period, the Restricted Stock may be subject to
forfeiture or early vesting in accordance with the vesting provisions set forth
in Part E of Exhibit A.

3. Delivery of Restricted Stock; Stockholder Rights. The Shares of Restricted
Stock will be issued and delivered to a book entry account maintained by the
Company’s transfer agent. Thereafter, subject to the forfeiture provisions
referenced in Section 2(b) above, the Restricted Stockholder shall be entitled
to the rights and privileges of a stockholder of the Company in respect to such
Shares of Restricted Stock, including the right to vote and receive dividends
(subject to applicable tax withholding obligations) during the Restricted Period
on the same basis as all other issued and outstanding Shares.

4. Fair Market Value of Common Stock. The fair market value (“Fair Market
Value”) of a Share of Common Stock shall be determined for purposes of this
Agreement by reference to the closing price of a share of Common Stock as
reported by the New York Stock Exchange (or such other exchange on which the
Shares of Common Stock are primarily traded) for the Grant Date or Vesting Date,
as applicable, or if no prices are reported for that day, the last preceding day
on which such prices are reported (or, if for any reason no such price is
available, in such other manner as the Committee in its sole discretion may deem
appropriate to reflect the fair market value thereof).

5. Withholding of Taxes. The Restricted Stockholder acknowledges that the
vesting of Restricted Stock Shares will generally be a taxable event. The
Company will instruct the

 

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transfer agent to deduct from the Restricted Stockholder’s book entry account
whole Shares having a Fair Market Value equal to the amount determined by the
Company to satisfy any applicable minimum statutory withholding or other tax
obligations that may arise upon such vesting, and the Restricted Stockholder
shall remit to the Company in cash any and all applicable withholding taxes
resulting from fractional shares. The Company shall withhold from any dividends
paid during the Restricted Period only the amounts the Company is required to
withhold to satisfy any applicable tax withholding requirements with respect to
such dividends based on minimum statutory withholding rates for federal and
state tax purposes, including any payroll taxes.

6. No Assignment or Other Transfer. During the Restricted Period, neither this
Agreement, the Restricted Stock or any rights and privileges granted hereby may
be transferred, assigned, pledged or hypothecated in any way, whether by
operation of the law or otherwise, except by will or the laws of descent and
distribution. Without limiting the generality of the preceding sentence, no
rights or privileges granted hereby may be assigned or otherwise transferred
during the Restricted Period to the spouse or former spouse of the Restricted
Stockholder pursuant to any divorce proceedings, settlement or judgment. Any
attempt to transfer, assign, pledge, hypothecate or otherwise dispose of this
Agreement, the Restricted Stock or any other rights or privileges granted hereby
contrary to the provisions hereof shall be null and void and of no force or
effect.

7. Certain Adjustments. The provisions of Articles 4.4 and 12 of the Plan
relating to certain adjustments in the case of stock splits, reorganizations,
equity restructurings, change of control events and similar matters described
therein are hereby incorporated in and made a part of this Agreement. In
evaluating performance in connection with this Award, the Committee may include
or exclude any of the following events that occur during the Performance Period:
(a) asset write-downs, (b) litigation or claim judgments or settlements, (c) the
effect of changes in tax laws, accounting principles, or other laws or
provisions affecting reported results, (d) any reorganization and restructuring
programs, (e) extraordinary nonrecurring items as described in FASB Accounting
Standards Codification™ 225-20 – Extraordinary and Unusual Items (or a successor
pronouncement) and/or in the Company’s periodic reports filed with the
Securities and Exchange Commission for periods within the applicable year, and
(f) acquisitions or divestitures. Any such adjustments shall be made by the
Committee, whose determination as to what adjustments shall be made, and the
extent thereof, shall be final, binding and conclusive. No fractional Shares of
stock shall be issued under the Plan on any such adjustment.

8. Participation by Restricted Stockholder in Other Company Plans. Nothing
herein contained shall affect the right of the Restricted Stockholder to
participate in and receive benefits under and in accordance with the then
current provisions of any retirement plan or employee welfare benefit plan or
program of the Company or of any subsidiary or affiliate of the Company, subject
in each case, to the terms and conditions of any such plan or program.

9. Not an Employment or Service Contract. Nothing herein contained shall be
construed as an agreement by the Company or any of its subsidiaries or
affiliates, expressed or implied, to employ or contract for the services of the
Restricted Stockholder, to restrict the right

 

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of the Company or any of its subsidiaries or affiliates to discharge the
Restricted Stockholder or cease contracting for the Restricted Stockholder’s
services or to modify, extend or otherwise affect in any manner whatsoever, the
terms of any employment agreement or contract for services which may exist
between the Restricted Stockholder and the Company or any of its subsidiaries or
affiliates.

10. Agreement Subject to Restricted Stock Plan. The Restricted Stock hereby
granted is subject to, and the Company and the Restricted Stockholder agree to
be bound by, all of the terms and conditions of the Plan, as the same may be
amended from time to time hereafter in accordance with the terms thereof, but no
such amendment shall adversely affect the Restricted Stockholder’s rights under
this Agreement without the prior written consent of the Restricted Stockholder.
To the extent that the terms or conditions of this Agreement conflict with the
terms or conditions of the Plan, the Plan shall govern.

11. Arbitration. All disputes related to this Agreement or any Restricted Stock
granted hereunder, shall be submitted to binding arbitration with the American
Arbitration Association (“AAA”) pursuant to the AAA Employment Arbitration Rules
and Mediation Procedures (“AAA Rules”). A copy of the AAA Rules is available to
the Restricted Stockholder upon written request to the Company’s Director of
Human Resources at One East Wacker Drive, Chicago, Illinois 60601 (or such other
address as the Company may specify from time to time), or may be obtained online
at: www.adr.org.

To initiate arbitration, either party must file a Demand for Arbitration
(“Demand”) in the manner described in the AAA Rules. After a demand has been
filed and served, either party may request that the dispute initially be
mediated pursuant to the AAA Rules. If mediation does not fully resolve the
dispute, then the matter will be subject to arbitration before a single
arbitrator who shall have the power to award any types of legal or equitable
relief available in a court of competent jurisdiction [excluding punitive
damages], including, but not limited to, attorneys’ fees and costs, to the
extent such relief is available under applicable law, and all defenses that
would be applicable in a court of competent jurisdiction shall be available. All
administrative costs of arbitration (including reimbursement of filing fees) and
the fees of the arbitrator will be paid by the Company.

12. Execution. This Agreement has been executed and delivered as of the day and
year first above written at Chicago, Illinois, and the interpretation,
performance and enforcement of this Agreement shall be governed by the laws of
the state of Delaware without application of its conflicts of laws principles.

13. Miscellaneous. This Agreement, together with the Plan, is the entire
agreement of the parties with respect to the Restricted Stock granted hereby and
may not be amended except in a writing signed by both Unitrin, Inc. and the
Restricted Stockholder.

 

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<ADD THE NEXT SECTION FOR ALL GRANTS TO ALL EXECUTIVE OFFICERS OF THE COMPANY,
EFFECTIVE 2/1/11:>

14. Clawbacks. Notwithstanding the vesting terms or any other provision set
forth in this Agreement, the rights, payments, and benefits with respect to this
Award are subject to reduction, cancellation, forfeiture, or recoupment by the
Company if and to the extent required by applicable law, regulation of the
Securities and Exchange Commission, or rule or listing requirement of the New
York Stock Exchange (collectively “Applicable Requirements”) in connection with
an accounting restatement or under such other circumstances as specified in the
Applicable Requirements. Any action taken by the Company under this provision
shall be made pursuant to the Committee’s determination, which shall be final,
binding and conclusive.

<ADD THE NEXT SECTION FOR ALL GRANTS TO THE FOLLOWING OFFICERS OF THE COMPANY:
CEO; COO; PRESIDENT; AND VICE PRESIDENTS; EFFECTIVE 2/1/06:>

15. Stock Holding Period. The Restricted Stockholder agrees to hold the shares
of Restricted Stock acquired hereunder for a minimum of twelve months following
their Vesting Date. This holding period shall not apply to shares of Restricted
Stock withheld by the Company to settle tax liabilities related to the vesting
of such shares.

 

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EXHIBIT A

Vesting Schedule for the Award Agreement

A. Definition of Terms:

“Additional Shares” means any Shares of Restricted Stock to be issued to the
Restricted Stockholder on the Vesting Date in the event that Unitrin’s Relative
TSR Percentile Rank exceeds the Target Performance Level.

“Award Agreement” means the Performance-Based Restricted Stock Award Agreement
to which this Exhibit is a part, pursuant to which an award of performance-based
Restricted Stock has been granted.

“Grant Date” is defined in the Award Agreement.

“Peer Group” means the peer group approved by Committee which shall be the
companies that comprised the S&P Supercomposite Insurance Index at the beginning
of the Performance Period (other than Unitrin), adjusted as of the end of the
Performance Period to remove any such companies which are no longer included in
the S&P Supercomposite Insurance Index as of the last day of the Performance
Period.

“Performance Period” means the three-year period ending on the December 31
immediately preceding the Vesting Date.

“Unitrin’s Relative TSR Percentile Rank” means the Company’s TSR Percentile Rank
relative to the companies in the Peer Group as determined by the Committee for
the Performance Period.

“Target Shares” means the number of Shares of performance-based Restricted Stock
granted on the Grant Date pursuant to the Award Agreement.

“Target Performance Level” means Unitrin’s Relative TSR Percentile Rank at the
50th percentile.

“TSR” means Total Shareholder Return as determined by the Committee for the
Performance Period.

“TSR Percentile Rank” means the percentile performance of the Company and each
of the companies in the Peer Group based on the TSR for such company as
determined by the Committee for the Performance Period.

“Vesting Date” means the three-year anniversary of the Grant Date.

 

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B. Determination of Vesting Date Events:

As soon as practicable following the end of the Performance Period, the
Committee will determine Unitrin’s Relative TSR Percentile Rank in accordance
with the methodology described in the next section below. Unitrin’s Relative TSR
Percentile Rank will determine the number of Target Shares that will vest or be
forfeited on the Vesting Date, and the number of Additional Shares of Restricted
Stock, if any, that will be granted on the Vesting Date, as described below
under “Vesting Determination”.

C. TSR Percentile Rank Calculation Methodology:

Unitrin’s Relative TSR Percentile Rank will be calculated in a two-step process.
First, the TSR will be calculated for Unitrin and each company in the Peer
Group. Then, the TSR Percentile Rank for Unitrin and each of the companies in
the Peer Group will be determined. The TSR and the TSR Percentile Rank will be
determined by the Committee in accordance with the formula and methods approved
by the Committee, as described below.

Formula for Calculating TSR

For purposes of this Exhibit A to the Award Agreement, TSR for Unitrin and each
of the companies comprising the Peer Group will be calculated as follows:

Ending Stock Price – Beginning Stock Price + Dividends Reinvested on all
Ex-Dividend Dates

Beginning Stock Price

Share Price Averaging Period

The beginning and ending stock prices in the above formula for TSR will be
calculated using a trailing average approach (i.e., average of the closing stock
prices for 20 consecutive trading days prior to the beginning and end of the
Performance Period).

Reinvestment of Dividends and Other Adjustments

The above TSR formula assumes that dividends are paid and reinvested into
additional shares of common stock on their ex-dividend dates. TSR will be
adjusted for stock dividends, stock splits, spin-offs and other corporate
changes having a similar effect.

Calculation of TSR Percentile Rank

The percentile performance for determining the TSR Percentile Rank will be
measured using the Microsoft Excel function PERCENTRANK.

D. Vesting Determination:

Once Unitrin’s Relative TSR Percentile Rank is determined by the Committee, the
Company will confirm the number of Target Shares that will vest or be forfeited
on the Vesting Date, and the number of Additional Shares of Restricted Stock, if
any, that will be granted on the Vesting Date consistent with the following
provisions:

 

  •  

If Unitrin’s Relative TSR Percentile Rank is at the Target Performance Level,
100% of the Target Shares will vest on the Vesting Date. If Unitrin’s Relative
TSR Percentile Rank is above the Target Performance Level, Additional Shares
will also be granted on the Vesting Date. If Unitrin’s Relative TSR Percentile
Rank is less than the Target Performance Level, some or all of the Target Shares
will be forfeited.

 

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  •  

The number of the Target Shares that will vest on the Vesting Date, and the
number of any Additional Shares that will be granted on the Vesting Date, will
be determined in accordance with the table set forth below. Any Target Shares
that do not vest in accordance with the table will be forfeited on the Vesting
Date.

If Unitrin’s Relative TSR Percentile Rank for the Performance Period falls
between the percentile levels specified in the first column of the table, the
number of Shares that will vest or be granted or forfeited on the Vesting Date
shall equal the number corresponding to the percentage interpolated on a
straight-line basis from the percentages specified in the second column of the
table.

 

    

Unitrin’s Relative TSR

Percentile Rank

   Total Shares to Vest (and/
or to be Granted) on Vesting  Date as
Percentage of Target Shares          

90th or Higher

     200 %       

75th

     150 %       

50th

     100 %       

25th

     50 %       

Below 25th

     0 %   

 

  •  

Additional Shares granted in accordance with the table above will be time-vested
shares of Restricted Stock with a vesting date on the three-month anniversary of
the date such Additional Shares are granted.

E. Determination of Vesting in Case of Certain Terminations and Other Events:

Notwithstanding any contrary provisions of the Plan:

(1) Retirement. If the Restricted Stockholder retires but continues to render
services to Unitrin or one of its affiliates as a director, or as a consultant
or advisor pursuant to a written agreement, all Shares of Restricted Stock held
by the Restricted Stockholder will remain outstanding while such services
continue. At the time such post-retirement services end (other than as a result
of death or disability), or upon retirement if the Restricted Stockholder does
not continue to render such services as a director, or as a consultant or
advisor pursuant to a written agreement, if the Restricted Stockholder:

(a) is not eligible to make an election to begin receiving early or regular
retirement benefits under the Company’s defined benefit pension plan and does
not begin receiving tax penalty-free early distributions (other than a rollover
to another retirement plan) from the Company’s defined contribution retirement
plan, then the Restricted Stock will be forfeited; or

 

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(b) is eligible to make an election to begin receiving early or regular
retirement benefits under the Company’s defined benefit pension plan, or begins
receiving tax penalty-free early distributions (other than a rollover to another
retirement plan) from the Company’s defined contribution retirement plan, then
the Restricted Stock will vest, to the extent earned for the Performance Period,
in an amount equal to the number of Target Shares that would vest in accordance
with the provisions of Parts A – D above, if any, multiplied by a fraction, the
numerator of which is the number of full months in the Performance Period during
which the Restricted Stockholder was an active employee and the denominator of
which is the total number of months in the Performance Period. A partial month
worked shall be counted as a full month if the Restricted Stockholder was an
active employee for fifteen (15) days or more in that month. No Additional
Shares shall be granted, and all Shares of Restricted Stock that do not vest in
accordance with this provision shall be forfeited.

(2) Termination on Death or Disability. Upon the termination of the Restricted
Stockholder’s employment or service agreement due to death or disability:
(a) the Performance Period shall be deemed to have been completed, and the
Vesting Date shall be deemed to have occurred, on the effective date of such
employment termination; and (b) a number of Shares of Restricted Stock shall
vest in an amount equal to the number of Target Shares multiplied by a fraction,
the numerator of which is the number of full months in the Performance Period
during which the Restricted Stockholder was an active employee and the
denominator of which is the total number of months in the original Performance
Period. A partial month worked shall be counted as a full month if the
Restricted Stockholder was an active employee for fifteen (15) days or more in
that month. No Additional Shares shall be granted, and all Shares of Restricted
Stock that do not vest in accordance with this provision shall be forfeited.

(3) Termination on Divestiture or Reduction in Force. In the event that the
Restricted Stockholder’s employment is terminated (a) upon and as result of the
sale or divestiture by the Company of an affiliate which employs the Restricted
Stockholder, or (b) by the affiliate of the Company which employs the Restricted
Stockholder as part of a reduction in force, then the provisions on Vesting
Date, Performance Period and vesting determination set forth in Parts A – D
above shall be deemed revised as follows:

 

  •  

The Performance Period shall be deemed revised to end on the effective date of
such employment termination;

 

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  •  

Unitrin’s Relative TSR Percentile Rank will be determined for such truncated
Performance Period by the Committee in accordance with the methodology set forth
above, the Vesting Date shall be deemed revised to the date of such
determination;

 

  •  

The Target Shares will vest or be forfeited in accordance with the table set
forth below, but no Additional Shares will be granted to the Restricted
Stockholder; and

 

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If Unitrin’s Relative TSR Percentile Rank for the truncated Performance Period
falls between the percentile levels specified in the first column of the table
set forth below, the number of Target Shares that will vest on the Vesting Date
shall equal the number corresponding to the percentage interpolated on a
straight-line basis from the percentages specified in the second column of the
table.

 

    

Unitrin’s Relative TSR

Percentile Rank

   Total Shares to Vest on Vesting Date as
Percentage of Target Shares          

50th or Higher

     100 %       

25th

     50 %       

Below 25th

     0 %   

(4) Leave of Absence. In the event that the Restricted Stockholder is on an
approved leave of absence (other than a short-term disability leave) at the end
of the Performance Period, or takes such a leave of absence at any time during
the Performance Period, then the Restricted Stock will vest, forfeit or be
granted, as applicable, to the extent earned for the Performance Period, in an
amount equal to the number of Target Shares that would vest and the number of
Additional Shares that would be granted in accordance with the provisions of
Parts A – D above, if any, multiplied by a fraction, the numerator of which is
the number of full months in the Performance Period during which the Restricted
Stockholder was an active employee not on such leave of absence and the
denominator of which is the total number of months in the Performance Period.

(5) Change of Control. Upon the dissolution or liquidation of the Company, or
upon a reorganization, merger or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving corporation,
or upon a sale of substantially all the property or more than eighty percent
(80%) of the then outstanding Shares of the Company to another corporation (any
of the foregoing, an “Event”), the Performance Period shall be deemed revised so
that such Performance Period ends on the effective date of the Event, and a
number of Shares of Restricted Stock shall vest, in an amount equal to the
number of Target Shares multiplied by a fraction, the numerator of which is the
number of full months in the Performance Period during which the Restricted
Stockholder was an active employee and the denominator of which is the total
number of months in the original Performance Period. A partial month worked
shall be counted as a full month if the Restricted Stockholder was an active
employee for fifteen (15) days or more in that month. No Additional Shares shall
be granted, and all Shares of Restricted Stock that do not vest in accordance
with this provision shall be forfeited.

 

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