exv10w194






Exhibit 10.194




FORM OF

RESTRICTED STOCK UNIT AWARD

NOTIFICATION AND AGREEMENT




Retention Restricted Stock Unit Award




	 	 	 	 	 
	Participant:

	 	Grant Date:	 	 
	 
	 	 	 	 
	Number of Award Shares:

	 	Vesting Date:
	 	4th Anniversary of Grant Date





1. Grant of Restricted Stock Units. This restricted stock unit award (“Award”) is granted pursuant
to the Liberty Mutual Agency Corporation 2010 Executive Long-Term Incentive Plan (the “Plan”), by
Liberty Mutual Agency Corporation (the “Company”) to the Participant as an employee of the Company.
The Company hereby grants to the Participant as of the Grant Date (set forth above) the Award
consisting of a right to receive the number of shares set forth above (“Award Shares”) of the
Company’s Class A common stock, $0.01 par value (“Common Stock”), upon the Vesting Date, pursuant
to the Plan, as it may be amended from time to time, and subject to the terms, conditions, and
restrictions set forth herein. Capitalized terms in this award notification and award agreement
(the “Award Agreement”) shall have the meaning specified in the Plan, unless a different meaning is
specified herein.



2. Terms and Conditions. The terms, conditions, and restrictions applicable to this Award are
specified in the Plan, this Award Agreement, including Exhibit A
–  Award Rules and Exhibit B –
Section 280G Rules, and the prospectus dated _____________ and any applicable prospectus supplement
(together, the “Prospectus”). The terms, conditions and restrictions in the Plan and the
Prospectus include, but are not limited to, provisions relating to amendment, vesting,
cancellation, and settlement, all of which are hereby incorporated by reference into this Award
Agreement to the extent not otherwise set forth herein.



By accepting this Award, the Participant acknowledges receipt of the Prospectus and that he or she
has read and understands the Prospectus.



The Participant understands that this Award and all other incentive awards are entirely
discretionary and that no right to receive an award exists absent a prior written agreement with
the Company to the contrary. The Participant also understands that the value that may be realized,
if any, from this Award is contingent, and depends on the future market price of the Common Stock,
among other factors. The Participant further confirms the Participant’s understanding that this
Award is intended to promote employee retention and stock ownership and to align employees’
interests with those of shareholders, is subject to vesting conditions and will be cancelled if the
vesting conditions are not satisfied. Thus, the Participant
understands that (a) any monetary value
assigned to this Award in any communication regarding this Award is contingent, hypothetical, or
for illustrative purposes only, and does not express or imply any promise or intent by the Company
to deliver, directly or indirectly, any certain or determinable cash value to the Participant;
(b) receipt of this Award or any incentive award in the past is neither an indication nor a
guarantee that an incentive award of any type or amount will be made in the future, and that absent
a written agreement to the contrary, the Company is free to change its practices and policies
regarding incentive awards at any time; (c) vesting may be subject to confirmation and final
determination by the Committee that the vesting conditions have been satisfied; and (d) Award
Shares shall be subject to lock-up restrictions as described in Section 15 of this Award Agreement.
The Participant shall have no rights as a stockholder of the Company with respect to any shares
covered by this Award unless and until this Award is vested and settled in shares of Common Stock.



3. Vesting. This Award shall vest in full on the Vesting Date set forth above provided the
Participant remains continuously employed by a member of the LMAC Group (as defined in this Section
14) or an Affiliated Employer (as defined in the Plan). Notwithstanding the foregoing,





	 	(a)	 	in the event that a Participant dies or suffers a Disability (as defined in
Section 14 below) while employed by either the LMAC Group or an Affiliated Employer,
this Award shall vest in full; and




 









 












	 	(b)	 	in the event the Company (or a successor) terminates the Participant’s
employment without Cause (as defined in Section 14 below) or the Participant
terminates his employment for Good Reason (as defined in Section 14 below) within the
twelve (12) month period commencing upon a Change in Control (as defined in the Plan),
this Award shall vest in full.




The Participant shall be credited with an amount in cash (without interest) equal to the dividends
the Participant would have received if the Participant had been the owner of a number of shares of
Common Stock equal to the number of Award Shares; provided, however, that no amount shall be
credited with respect to Shares that have been delivered to the Participant as of the applicable
record date. Dividend equivalents shall be subject to the same terms and conditions as the Award
Shares, and shall vest (or, if applicable, be forfeited) at the same time as the Award Shares.



Notwithstanding the foregoing, vesting of the Award (and any dividend equivalents) shall be
prohibited to the extent it would violate applicable law.



4. Termination of Employment.  If the Participant has a termination of, or break in, employment
prior to exercise or expiration of this Award, the Participant’s rights to this Award shall be
determined under the Award Rules set forth in Exhibit A, which shall be enforceable as if set forth
in this Award Agreement. Notwithstanding the foregoing, the unvested portion of this Award as
determined under Section 3 above shall expire and be permanently forfeited upon employment
termination with the LMAC Group and its Affiliated Employers.



5. Settlement of Award. Subject to Section 7 below, the Company shall deliver to the Participant
 a number of shares of Common Stock equal to the number of vested Award Shares on the Vesting Date
or as soon as administratively practicable thereafter, but in no event later than two and one-half
(2-1/2) months following the end of the calendar year in which your Award vests (the “Short-Term
Deferral Period”). For avoidance of doubt, the Company shall be entitled to delay the issuance of
shares to a date not later than the end of the Short-Term Deferral Period as the Committee may deem
necessary or appropriate to avoid having the Company inadvertently cease to be a member of an
“affiliated group” (within the meaning of Section 1504 of the Code) with Liberty Mutual Group Inc.
The dividend equivalents described in Section 3 above shall be paid in cash at the same time as the
delivery of the Shares under this Section 5 which correspond to such dividend equivalents.



6. Compliance with Non-Compete; Compensation Recovery.  The Award Shares shall be subject to
forfeiture as a result of the Participant’s violation of the Agreement not to Compete and shall be
subject to being recovered under any compensation recovery policy that may be adopted from time to
time by the Company or any of its Affiliated Employers. For avoidance of doubt, compensation
recovery rights to Award Shares shall extend to the proceeds realized by the Participant due to
the sale or other transfer of the Award Shares. The Participant’s prior execution of the Agreement
not to Compete and confirmation of Participant’s non-solicitation obligations was a material
inducement for the Company’s grant of this Award.



7. Taxes; Limitation on Excess Parachute Payments.  The settlement of this Award is conditioned on
the Participant making arrangements reasonably satisfactory to the Company for the withholding of
all applicable federal, state, local or foreign taxes as may be required under applicable law. The
Participant shall bear all expense of, and be solely responsible for, all federal, state, local or
foreign taxes due with respect to any payment received under this Award Agreement. Notwithstanding
any other provision in this Agreement to the contrary, any payment or benefit received or to be
received by the Participant in connection with a Change in Control or
the termination of employment whether payable under the terms of this Award Agreement or any other plan, arrangement or
agreement with the Company or an affiliate (collectively, the “Payments”) that would constitute a
“parachute payment” within the meaning of Section 280G of the Code, shall be reduced to the extent
necessary so that no portion thereof shall be subject to the excise tax imposed by Section 4999 of
the Code (the “Excise Tax”), but only if, by reason of such reduction, the net after-tax benefit
received by the Participant shall exceed the net after-tax benefit that would be received by the
Participant if no such reduction was made. Whether and how the limitation under this Section 7 is
applicable shall be determined under the Section 280G Rules set forth in Exhibit B, which shall be
enforceable as if set forth in this Award Agreement. The Committee, in its sole discretion, may
satisfy the Participant’s withholding tax obligations by reducing the amount of Award Shares to
which the Participant is entitled under the Award.







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8. Consent to Electronic Delivery. In lieu of receiving documents in paper format, the Participant
agrees, to the fullest extent permitted by law, to accept electronic delivery of any documents that
the Company may be required to deliver (including, but not limited to, prospectuses, prospectus
supplements, grant or award notifications and agreements, account statements, annual and quarterly
reports, and all other agreements, forms and communications) in connection with this and any other
prior or future incentive award or program made or offered by the Company or its predecessors or
successors. Electronic delivery of a document to the Participant may be via a Company e-mail
system or by reference to a location on a Company intranet site to which the Participant has
access.



9. Administration. In administering the Plan, or to comply with applicable legal, regulatory,
tax, or accounting requirements, it may be necessary for a member of the LMAC Group to transfer
certain Participant data to another member of the LMAC Group, an Affiliated Employer, or to its
outside service providers or governmental agencies. By accepting the Award, the Participant
consents, to the fullest extent permitted by law, to the use and transfer, electronically or
otherwise, of the Participant’s personal data to such entities for such purposes.



10. Entire Agreement/Amendment/Survival/Assignment. The terms, conditions and restrictions set
forth in the Plan, this Award Agreement and the Prospectus, constitute the entire understanding
between the parties hereto regarding this Award and supersede all previous written, oral, or
implied understandings between the parties hereto about the subject matter hereof. This Award
Agreement may be amended by a subsequent writing (including e-mail or other electronic form) agreed
to between the Company and the Participant. Section headings herein are for convenience only and
have no effect on the interpretation of this Award Agreement. The provisions of this Award
Agreement that are intended to survive the Termination Date of a Participant shall survive such
date. The Company may assign this Award Agreement and its rights and obligations hereunder to any
current or future member of the LMAC Group or an Affiliated Employer.



11. No Right to Employment. The Participant agrees that nothing in this Award Agreement
constitutes a contract of employment with the Company or an Affiliated Employer for a definite
period of time. The employment relationship is “at will,” which affords the Participant or the LMAC
Group the right to terminate the relationship at any time for any reason or no reason not otherwise
prohibited by applicable law. The LMAC Group retains the right to decrease the Participant’s
compensation and/or benefits, transfer or demote the Participant or otherwise change the terms or
conditions of the Participant’s employment with the LMAC Group.



12. Transfer Restrictions. The Participant may not sell, assign, transfer, pledge, encumber or
otherwise alienate, hypothecate or dispose of this Award or the Participant’s right hereunder to
receive any Award Shares, except as otherwise provided in the Committee’s sole discretion
consistent with the Plan and applicable securities laws.



13. Conflict. This Award Agreement is subject to the terms and provisions of the Plan, including
but not limited to the adjustment provisions under Section 12 of the Plan. In the event of a
conflict between the Plan, this Award Agreement and/or the Prospectus, the documents shall control
in that order (that is, the Plan, this Award Agreement, and then the Prospectus).



14. Definitions. For purposes of this Award Agreement, the following terms shall be as defined
below:




     (a) “Cause” for termination of a Participant’s employment by the Company shall arise when
termination results from (A) conviction of, or the pleading of nolo contendere to, a felony; (B)
misconduct by the Participant which is of such a serious and substantial nature that a reasonable
likelihood exists that such misconduct will materially injure the reputation of the Company, the
LMAC Group or an Affiliated Employer if the Participant was to remain employed by the Company or
Affiliated Employer; or (C) proven gross negligence.



     (b) “Disability” shall mean a physical or mental condition of an apparently permanent nature
which prevents a Participant from performing the principal duties of the Participant’s regular
occupation with the Company or an Affiliated Employer, as determined to the sole satisfaction of
the Committee.



     (c) “Good Reason” shall mean a Participant’s termination of employment with the Company within
ninety (90) days following any of the following events: (A) a decrease in the Participant’s base
salary below its level



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in effect on the date prior to such termination, (B) a material reduction in the Participant’s job
responsibilities without Participant’s consent, (C) a geographical relocation of the Participant
more than fifty (50) miles from the current location of the Participant’s place of employment
without his consent, or (D) a change in the Participant’s job responsibilities that requires an
increase in travel of more than 25%.





	 	(d)	 	“LMAC Group” shall mean the Company and its direct and indirect subsidiaries.






	 	(e)	 	“Termination Date” shall have the meaning set forth in Exhibit A.




15. Lock-up Restriction. The Participant agrees that, if the Company proposes to offer for sale
any Shares pursuant to a public offering under the Securities Act of 1933 and if requested by the
Company and any underwriter engaged by the Company for a reasonable period of time specified by the
Company or such underwriter following the effective date of the registration statement filed with
respect to such offering, the Participant will not, directly or indirectly, offer, sell, pledge,
contract to sell (including any short sale), grant any option to purchase, or otherwise dispose of
any securities of the Company held by the Participant or enter into any Hedging Transaction (as
defined below) relating to any securities of the Company held by the Participant. For purposes of
this Section, a “Hedging Transaction” means any short sale (whether or not against the box) or any
purchase, sale or grant of any right (including, without limitation, any put or call option) with
respect to any security (other than a broad-based market basket or index) that includes, relates
to or derives any significant part of its value from the Shares.



16. Exemption from Section 409A. This Award is intended to be a short-term deferral exempt from
Section 409A of the Code and shall be interpreted consistent with this intention.



17. Governing Law. This Award Agreement shall be legally binding and shall be executed
and construed and its provisions enforced and administered in accordance with the laws of
the Commonwealth of Massachusetts.




[Signature Page to Follow]







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     IN WITNESS WHEREOF, the Company by one of its duly authorized officers has executed this Award
Agreement as of the day and year first above written.



	 	 	 	 	 
	 	LIBERTY MUTUAL AGENCY CORPORATION

 	 
	 	By:  	 	 
	 	 	Its: 	 	 
	 	 	 	 
	 




     Please indicate your acceptance of the terms and conditions of this Award Agreement by signing
in the space provided below and returning a signed copy of this Award Agreement to the Company. IF
A FULLY EXECUTED COPY OF THIS AWARD AGREEMENT HAS NOT BEEN RECEIVED BY THE COMPANY BY
_________________, THE AWARD UNDER THIS AWARD AGREEMENT SHALL BE CANCELLED.


BY SIGNING BELOW, YOU ACKNOWLEDGE AND AGREE THAT YOU HAVE RECEIVED A COPY OF THE PLAN AND ARE
FAMILIAR WITH THE TERMS AND PROVISIONS THEREOF, INCLUDING THE TERMS AND PROVISIONS OF THIS AWARD
AGREEMENT. YOU HAVE REVIEWED THE PLAN AND THIS AWARD AGREEMENT IN THEIR ENTIRETY, HAVE HAD AN
OPPORTUNITY TO OBTAIN THE ADVICE OF COUNSEL PRIOR TO EXECUTING THIS AWARD AGREEMENT AND FULLY
UNDERSTAND ALL PROVISIONS OF THIS AWARD AGREEMENT. FINALLY, YOU HEREBY AGREE TO ACCEPT AS
BINDING, CONCLUSIVE AND FINAL ALL DECISIONS OR INTERPRETATIONS OF THE ADMINISTRATOR UPON ANY
QUESTIONS ARISING UNDER THE PLAN OR THIS AWARD AGREEMENT.



The undersigned hereby accepts, and agrees to, all terms and provisions of this Award Agreement,
and the Plan as they pertain hereto.




	 	 	 	 	 
	 	 	 
	 	By:  	 	 
	 	 	Name: 	 	 
	 	 	 	 



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EXHIBIT
A—Award Rules

To Restricted Stock Unit Award Notification and Agreement

When you leave the Company



References to “you” or “your” are to the Participant. “Termination Date” means the date on which
you terminate employment with the LMAC Group and its Affiliated Employers (whether voluntary or
involuntary). “Terminate employment” or “termination of employment” means the cessation of your
employment with the LMAC Group and the Affiliated Employers.



If you terminate your employment or if there is a break in your employment, your Award may be
cancelled before the Vesting Date and the vesting and settlement of your Award may be affected.



The provisions in the chart below apply to the Award granted to you in this Award Agreement.




	 	 	 
	If You:	 	Here’s What Happens to Your Award:
	Resign (other than for Good Reason 

before a Change in Control)

	 	Vesting stops and the unvested portion of your Award is cancelled effective
on the Termination Date.
	 
	 	 
	Incur a Disability

	 	The unvested portion of your Award will vest immediately.
	 
	 	 
	Take an approved personal leave of
absence

	 	The vesting of your Award will continue during the first three months of an
approved personal leave of absence. Once the approved leave of absence
exceeds three months, vesting is suspended until you return to work and
remain actively employed for 30 calendar days, after which time vesting
will be restored retroactively. If you terminate employment during the
leave for any reason, the termination of employment provisions will apply.
If the leave exceeds one year, your Award will be cancelled immediately.
	 
	Are on an approved family and
medical leave, military leave, or
other statutory leave of absence

	 	The unvested portion of your Award will continue to vest while you are on
an approved leave.
	 
	 	 
	Die while you are employed

	 	The unvested portion of your Award will vest immediately.
	 
	 	 
	Are terminated involuntarily for 

Cause*

	 	Vesting stops and your Award will be cancelled on the Termination Date.
If the Committee discovers after your employment termination that you
engaged in conduct or actions while employed by the Company, the LMAC
Group, or its Affiliates that constituted grounds for employment
termination for Cause, it may determine, in its sole discretion, to forfeit the
otherwise vested portion of your Award and/or require repayment of any
Award Shares (or proceeds thereof) you received upon settlement of your
Award after having engaged in such conduct or actions.
	 
	 	 
	Are terminated involuntarily other 

than for Cause (including under the 

Company’s applicable separation 

pay plan)

	 	Vesting stops and the unvested portion of your Award will be cancelled on
the Termination Date.
	 
	 	 
	Are terminated involuntarily other
than for Cause or you terminate
your employment for Good Reason,
in either case, within one (1) year
following a Change in Control

	 	Upon the Termination Date the unvested portion of your Award will vest
immediately.






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	If You:	 	Here’s What Happens to Your Award:
	While employed and at any time
during the Restricted Period, breach
the Agreement not to Compete

	 	In addition to all rights and remedies available to the Company at law and
in equity, you will immediately forfeit any of your outstanding rights under
this Award Agreement.






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Exhibit B—Section 280G Rules




To Restricted Stock Unit Award Notification and Agreement




When you receive benefits in connection with a Change in Control



The following rules shall apply for purposes of determining whether and how the limitations
provided under Section 7 are applicable to the Participant.



1. The “net after-tax benefit” shall mean (i) the Payments (as defined in Section 7) which the
Participant receives or is then entitled to receive from the Company, the LMAC Group or the
Affiliated Employers that would constitute “parachute payments” within the meaning of Section 280G
of the Code, less (ii) the amount of all federal, state and local income and employment taxes
payable by the Participant with respect to the foregoing calculated at the highest marginal income
tax rate for each year in which the foregoing shall be paid to the Participant (based on the rate
in effect for such year as set forth in the Code as in effect at the time of the first payment of
the foregoing), less (iii) the amount of Excise Tax imposed with respect to the payments and
benefits described in (i) above.



2. All determinations under Section 7 of this Award Agreement and this Exhibit B will be made by an
accounting firm or law firm that is selected for this purpose by the Company’s Chief Executive
Officer prior to a Change in Control (the “280G Firm”). All fees and expenses of the 280G Firm
shall be borne by the Company. The Company will direct the 280G Firm to submit any determination it
makes under Section 7 of this Award Agreement and this Exhibit B and detailed supporting
calculations to both the Participant and the Company as soon as reasonably practicable.



3. If the 280G Firm determines that one or more reductions are required under Section 7 of this
Award Agreement, the 280G Firm shall also determine which Payments shall be reduced (first from
cash payments and then from non-cash benefits) to the extent necessary so that no portion thereof
shall be subject to the excise tax imposed by Section 4999 of the Code, and the Company shall pay
such reduced amount to the Participant. The 280G Firm shall make reductions required under Section
7 of this Award Agreement in a manner that maximizes the net after-tax amount payable to the
Participant.



4. As a result of the uncertainty in the application of Section 280G at the time that the 280G Firm
makes its determinations under this Section, it is possible that amounts will have been paid or
distributed to the Participant that should not have been paid or distributed (collectively, the
“Overpayments”), or that additional amounts should be paid or distributed to the Participant
(collectively, the “Underpayments”). If the 280G Firm determines, based on either the assertion of
a deficiency by the Internal Revenue Service against the Company or the Participant, which
assertion the 280G Firm believes has a high probability of success or controlling precedent or
substantial authority, that an Overpayment has been made, the Participant must repay to the
Company, without interest; provided, however, that no loan will be deemed to have been made and no
amount will be payable by the Participant to the Company unless, and then only to the extent that,
the deemed loan and payment would either reduce the amount on which the Participant is subject to
tax under Section 4999 of the Code or generate a refund of tax imposed under Section 4999 of the
Code. If the 280G Firm determines, based upon controlling precedent or substantial authority, that
an Underpayment has occurred, the 280G Firm will notify the Participant and the Company of that
determination and the amount of that Underpayment will be paid to the Participant promptly by the
Company.



5. The Participant will provide the 280G Firm access to, and copies of, any books, records, and
documents in the Participant’s possession as reasonably requested by the 280G Firm, and otherwise
cooperate with the 280G Firm in connection with the preparation and issuance of the determinations
and calculations contemplated by Section 7 of this Award Agreement and this Exhibit B.





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