Exhibit 10.2

 

THE HANOVER INSURANCE GROUP, INC.

2006 LONG-TERM INCENTIVE PLAN

CORPORATE GOAL PERFORMANCE-BASED RESTRICTED STOCK UNIT AGREEMENT

 

This Corporate Goal Performance-Based Restricted Stock Unit Agreement (the
“Agreement”) is effective as of <GRANT DATE> (the “Grant Date”) by and between
The Hanover Insurance Group, Inc., a Delaware corporation (the “Company”), and
<PARTICIPANT NAME> (the “Participant” or “you”). Capitalized terms used without
definition herein shall have the meanings set forth in The Hanover Insurance
Group, Inc. 2006 Long-Term Incentive Plan (the “Plan”).

 

P R E A M B L E

 

WHEREAS, pursuant to the terms of the Plan and this Agreement, the Administrator
has agreed to grant to the Participant a target number of corporate goal
performance-based restricted stock units (the “Corporate Goal PBRSUs”); and

 

WHEREAS, the Corporate Goal PBRSUs will be subject to certain restrictions, the
attainment of certain performance criteria and other terms and conditions as set
forth in this Agreement.

 

NOW, THEREFORE, for and in consideration of the foregoing and the mutual
covenants and promises hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

 

 

1.

Corporate Goal PBRSUs. The Administrator hereby grants to the Participant
<NUMBER OF PBRSUs> Corporate Goal PBRSUs, each representing the right to receive
one share of Stock upon and subject to the restrictions, terms and conditions
set forth below. The Stock issued upon vesting of the Corporate Goal PBRSUs, if
any, shall be referred to hereinafter as the “Shares”. The actual number
Corporate Goal PBRSUs granted herein shall be subject to adjustment as set forth
on Schedule A.

 

 

2.

Vesting. The Corporate Goal PBRSUs shall vest as set forth below.

 

The Corporate Goal PBRSUs will vest on the third anniversary of the Grant Date
(the “Time-Based Vesting Date”) provided:

 

 

i)

The Company achieves the corporate goals set forth on Schedule A (the “Corporate
Goals”) by the date set forth on Schedule A (the “Goal Completion Date”). The
actual number of Corporate Goal PBRSUs that shall be awarded shall be determined
in accordance with the terms set forth on Schedule A; and

 

 

ii)

The Participant is an Employee of the Company or one of its subsidiaries or
affiliates (the Company and its subsidiaries and affiliates hereinafter referred
to as “THG”) during the entire period from the Grant Date to the Time-Based
Vesting Date.

 

The determination of (i) whether and to the extent the Corporate Goals set forth
on Schedule A have been achieved, and (ii) any adjustment to the actual number
of Corporate Goal PBRSUs, shall be in the sole and absolute discretion of the
Administrator. All decisions by the Administrator shall be final and binding
upon the Participant. Subject to Section 9, as soon as reasonably practicable
following the vesting of the Corporate Goal PBRSUs, the Company shall issue the
Shares to the Participant, provided that, if any law or regulation requires the
Company to take action before the issuance of such Shares, delivery of such
Shares shall be extended for the period necessary to take such action. Any
fractional share shall be rounded up such that only whole shares are issued.

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3.

Termination of Employment. Except as provided in Sections 4, 5 and 6, upon the
termination of Participant’s Employment with THG for whatever reason, whether
with or without Cause, for good reason or otherwise, any non-vested Corporate
Goal PBRSUs shall be automatically cancelled and forfeited and be returned to
the Company for no consideration.

 

 

4.

Disability. In the event Participant is placed in a long term disability status
(as such term is defined in the Company’s Long-Term Disability Program, as in
effect at such time) (“LTD Status”), the Participant shall vest in the Corporate
Goal PBRSUs as follows:

 

 

i)

No vesting shall occur pursuant to Section 2 if the Company does not achieve the
Corporate Goals by the Goal Completion Date; and

 

 

ii)

If the Company achieves the Corporate Goals, and the Participant is placed in
LTD Status prior to the Time-Based Vesting Date, then the Participant shall vest
in a pro-rata portion of the Corporate Goal PBRSUs. For purposes of this
subsection, the pro-rata portion of the Corporate Goal PBRSUs that otherwise
would vest on the Time-Based Vesting Date shall be determined by dividing the
number of days that the Participant was an active Employee (plus any days
counted pursuant to the next paragraph) since the Grant Date by 1,095 and
applying this percentage to such Corporate Goal PBRSUs.

 

Provided Participant remains in LTD Status through such date, and solely for the
limited purpose of calculating Participant’s pro rated vesting of the Corporate
Goal PBRSUs pursuant to the preceding paragraph, the Participant shall continue
to vest pursuant to Section 2(ii) until the first anniversary of the date
Participant was placed in LTD Status (the “LTD Vesting Extension Period”).
Notwithstanding the foregoing, if, prior to the expiration of the LTD Vesting
Extension Period, Participant is removed from LTD Status and immediately
thereafter returns to active Employment with THG, Participant shall be treated
(for the purposes of Section 2(ii) of this Agreement) as if he/she were never
placed in LTD Status, shall be given credit toward vesting pursuant to Section
2(ii) for the period Participant was in LTD Status, and this Agreement shall
remain in full force and effect in accordance with its terms.

 

 

5.

Retirement. In the event of Participant’s Retirement, the Participant shall vest
in the Corporate Goal PBRSUs as follows:

 

 

i)

No vesting shall occur pursuant to Section 2 if the Company does not achieve the
Corporate Goals by the Goal Completion Date; and

 

 

ii)

If the Company achieves the Corporate Goals, and the Participant Retires prior
to the Time-Based Vesting Date, then the Participant shall vest in a pro-rata
portion of the Corporate Goal PBRSUs. For purposes of this subsection, the
pro-rata portion of the Corporate Goal PBRSUs that otherwise would vest on the
Time-Based Vesting Date shall be determined by dividing the number of days that
the Participant was an Employee since the Grant Date by 1,095 and applying this
percentage to such Corporate Goal PBRSUs.

 

 

iii)

For the purpose of this Agreement, a Participant shall be deemed to “Retire” if
(i) his/her Employment with THG terminates (other than for Cause), (ii) he or
she is 65 years of age or older as of such termination date, and (iii)
immediately prior to such termination, Participant has been continuously
Employed by THG for 10 or more years.

 

 

6.

Death. In the event Participant dies, the Participant shall vest in the
Corporate Goal PBRSUs as follows:

 

 

i)

No vesting shall occur pursuant to Section 2 if the Company does not achieve the
Corporate Goals by the Goal Completion Date; and

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ii)

If the Company achieves the Corporate Goals, and the Participant dies before the
Time-Based Vesting Date, then the Participant shall vest in a pro-rata portion
of the Corporate Goal PBRSUs. For purposes of this subsection, the pro-rata
portion of the Corporate Goal PBRSUs that vest on the Time-Based Vesting Date
shall be determined by dividing the number of days that the Participant was an
Employee since the Grant Date by 1,095 and applying this percentage to such
Corporate Goal PBRSUs.

 

 

7.

Covered Transaction/Change in Control. In the event of a Covered Transaction
(other than a Change in Control, whether or not it is a Covered Transaction),
the Corporate Goal PBRSUs shall be fully governed by the applicable provisions
of Section 7(a) of the Plan. Notwithstanding the terms of the Plan, in the event
of a Change in Control (whether or not it is a Covered Transaction), the
Participant shall vest in the Corporate Goal PBRSUs as follows:

 

 

i)

No vesting shall occur pursuant to Section 2 if the Company does not achieve the
Corporate Goals by the Goal Completion Date; provided, however, to the extent
the effective date of the Change in Control is prior to the Goal Completion Date
and the Corporate Goals have not yet been achieved (at the target level set
forth on Schedule A) as of such date, such Corporate Goals shall be deemed
satisfied at such level determined in accordance with Schedule A; and

 

 

ii)

If the Company achieves the Corporate Goals (or is deemed to have done so
pursuant to Section 7(i)), and the effective date of the Change in Control
occurs before the Time-Based Vesting Date, Participant shall vest in a pro-rata
portion of the Corporate Goal PBRSUs. For purposes of this subsection, the
pro-rata portion of the Corporate Goal PBRSUs that vest shall be determined by
dividing the number of days between the Grant Date and the effective date of the
Change in Control by 1,095 and applying this percentage to such Corporate Goal
PBRSUs.

 

 

8.

Termination of Agreement. Except as otherwise expressly set forth herein, if the
Corporate Goals are not satisfied in accordance with the terms set forth on
Schedule A by the Goal Completion Date, this Agreement shall automatically
terminate and Participant shall be deemed to have forfeited all rights to the
Corporate Goal PBRSUs.

 

 

9.

Section 162(m). If at the time the Corporate Goal PBRSUs vest, the Participant
is a “Covered Employee” (as that term is defined in Section 162(m) of the
Internal Revenue Code of 1986, as amended) or the Company in its sole discretion
believes that the Participant will be a Covered Employee, the Participant hereby
acknowledges that an amount of Shares that would result in the Participant not
being a Covered Employee or, if necessary, all of the Shares, shall be deferred
to reduce the impact of Section 162(m) to the Company. The deferral of such
Shares will continue until the time when the Company could distribute some or
all of such Shares to the Participant without any negative impact to the Company
due to Section 162(m). If less than all of the Shares are distributed to the
Participant, the Company will distribute to the Participant the maximum number
of Shares that it may distribute to the Participant without any impact from
Section 162(m). This distribution will occur each year until all deferred Shares
have been completely distributed to the Participant. Notwithstanding the
foregoing, if a deferral pursuant to the provisions of this section is a
violation of Internal Revenue Code Section 409A, as amended from time to time
(“Section 409A”), or any other law or regulation, then the Participant and the
Company hereby agree to modify, to the extent possible, the deferral required
hereunder such that it is in compliance with Section 409A and/or such other law
or regulation.

 

 

10.

Notices. Notices hereunder shall be in writing and, if to the Company, shall be
delivered personally to the Human Resources Department or such other party as
designated by the Company or mailed to its principal office and, if to the
Participant, shall be delivered personally or mailed to the Participant at his
or her address on the records of the Company.

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11.

Dividend and Voting Rights. The Participant will not be entitled to any
dividends (or dividend equivalency rights) upon the Corporate Goal PBRSUs or
have any voting rights until and to the extent the Corporate Goal PBRSUs vest
and are exchanged for Shares.

 

 

12.

Non-Hire/Solicitation/Confidentiality. As a condition of your eligibility to
receive these Corporate Goal PBRSUs and regardless of whether such Corporate
Goal PBRSUs vest, you agree that you will (i) not, directly or indirectly,
during the term of your employment with THG, and for a period of one year
thereafter, hire, solicit, entice away or in any way interfere with THG’s
relationship with, any of its officers or employees, or in any way attempt to do
so or participate with, assist or encourage a third party to do so, and (ii)
neither disclose any of THG’s confidential and proprietary information to any
third party, nor use such information for any purpose other than for the benefit
of THG and in accordance with THG policy. The terms of this Section 12 shall
survive the expiration or earlier termination of this Agreement.

 

 

13.

Specific Performance. The Participant hereby acknowledges and agrees that in the
event of any breach of Section 12 of this Agreement, the Company would be
irreparably harmed and could not be made whole by monetary damages. The
Participant accordingly agrees to waive the defense in any action for injunctive
relief or specific performance that a remedy at law would be adequate and that
the Company, in addition to any other remedy to which it may be entitled at law
or in equity, shall be entitled to an injunction or to compel specific
performance of Section 12.

 

 

14.

Successors. The provisions of this Agreement will benefit and will be binding
upon the permitted assigns, successors in interest, personal representatives,
estates, heirs and legatees of each of the parties hereto. However, the
Corporate Goal PBRSUs are non-assignable, except as may be permitted by the
Plan.

 

 

15.

Interpretation. The terms of the Corporate Goal PBRSUs are as set forth in this
Agreement and in the Plan. The Plan is incorporated into this Agreement by
reference, which means that this Agreement is limited by and subject to the
express terms and provisions of the Plan. In the event of a conflict between the
terms of this Agreement and the terms of the Plan, the terms of the Plan shall
control.

 

 

16.

Governing Law. This Agreement shall be construed and applied (except as to
matters governed by the Delaware General Corporation Law, as to which Delaware
law shall apply) in accordance with the laws of the Commonwealth of
Massachusetts.

 

 

17.

Facsimile and Electronic Signature. The parties may execute this Agreement by
means of a facsimile or electronic signature.

 

 

18.

Entire Agreement; Counterparts. This Agreement and the Plan contains the entire
understanding between the parties concerning the subject contained in this
Agreement. Except for the Agreement and the Plan, there are no representations,
agreements, arrangements, or understandings, oral or written, between or among
the parties hereto, relating to the subject matter of this Agreement, that are
not fully expressed herein. This Agreement may be signed in one or more
counterparts, all of which shall be considered one and the same agreement.

 

 

19.

Further Assurances. Each party to this Agreement agrees to perform all further
acts and to execute and deliver all further documents as may be reasonably
necessary to carry out the intent of this Agreement.

 

 

20.

Severability. In the event that any of the provisions, or portions thereof, of
this Agreement are held to be unenforceable or invalid by any court of competent
jurisdiction, the validity and enforceability of the remaining provisions, or
portions thereof, will not be affected, and such unenforceable provisions shall
be automatically replaced by a provision as similar in terms as may be valid and
enforceable.

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21.

Construction. Whenever used in this Agreement, the singular number will include
the plural, and the plural number will include the singular, and the masculine
or neuter gender shall include the masculine, feminine, or neuter gender. The
headings of the Sections of this Agreement have been inserted for purposes of
convenience and shall not be used for interpretive purposes. The Administrator
shall have full discretion to interpret and administer this Agreement. Any
actions or decisions by the Administrator in connection with this Agreement
shall be conclusive and binding upon the Participant.

 

 

22.

No Effect on Employment. Nothing contained in this Agreement shall be construed
to limit or restrict the right of THG to terminate the Participant’s employment
at any time, with or without cause, or to increase or decrease the Participant’s
compensation from the rate of compensation in existence at the time this
Agreement is executed.

 

 

23.

Taxes. If at the time the Corporate Goal PBRSUs vest the Company determines that
under applicable law and regulations it could be liable for the withholding of
any federal, state or local tax, Participant shall remit to the Company any
amounts determined by the Company to be required to be withheld or the Company
may, at its option, withhold from such units, or the Shares which such units
represent, a sufficient number of units/Shares to satisfy the minimum federal,
state and local tax withholding due, if any, and remit the balance of the
units/Shares to the Participant. Notwithstanding any language contained herein
to the contrary, in no event shall the Company be liable for any taxes,
penalties or other amounts for which Participant may be liable because of a
violation of Section 409A or other such law or regulation.

 

 

24.

Key Employees. To the extent the Participant is a key employee as defined in
Internal Revenue Code Section 409A and any payment or distribution hereunder is
required to be delayed until six months following a separation from service,
such payment or distribution shall be so delayed, but not more than is required
to comply with such rules.

 

 

IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of
the Grant Date.

 

 

THE HANOVER INSURANCE GROUP, INC.

 

 

 

 

 

By: 

 

 

 

Name: Bryan D. Allen

 

 

 

Title: Vice President & Chief Human Resources Officer

 

 

 

 

 

 

 

 

 

 

 

<PARTICIPANT NAME>

 

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Schedule A