Document:

Unitrin, Inc. Non-Qualified Deferred Compensation Plan

 Exhibit 10.14 
 AMENDMENT NO. 1 TO THE 
 UNITRIN, INC. NON-QUALIFIED DEFERRED COMPENSATION
PLAN 
 WHEREAS, Unitrin, Inc., a Delaware corporation (the “Company”), amended and restated the Unitrin, Inc.
Non-Qualified Deferred Compensation Plan, effective January 1, 2009 (the “Plan”); and 
 WHEREAS, the Administrative
Committee of the Unitrin, Inc. 401(k) Savings Plan (the “Committee”) has the authority to amend the Plan, except for amendments which would have a material adverse financial impact on the Company and participating employers under the Plan;
and 
 WHEREAS, the Committee now desires to amend the Plan to permit eligible employees to defer a portion of any multi-year incentive
award. 
 NOW, THEREFORE, the Committee, on behalf of the Company, does hereby adopt the following amendments to the Plan
effective January 1, 2011, except as otherwise provided herein 
 1. The definition of Bonus Compensation at
Section 1.7 is amended to read as follows: 
 “1.7 “Bonus Compensation” means the annual formula and
annual discretionary management bonuses earned in a given year and generally paid in the following year. Bonus Compensation does not include other bonuses such as a relocation bonus, a hiring bonus, Multi-Year Incentive Compensation or other
periodic bonuses.” 
 2. The first sentence of the definition of Deferral Election at Section 1.12 is amended to read
as follows: 
 “1.12 “Deferral Election” means the following: (a) for Employee Participants, an
election to defer all or a part of such Participant’s Regular Base Salary, such Participant’s Bonus Compensation, or such Participant’s Multi-Year Incentive Compensation, all pursuant to Section 3.1, and (b) for Outside
Director Participants, an election to defer Director Fees pursuant to Section 3.1.” 
 3. The definition of Eligible
Compensation at Section 1.14 is amended to read as follows: 
 “1.14 “Eligible Compensation” means
Regular Base Salary, Bonus Compensation, Multi-Year Incentive Compensation or Director Fees.” 
 4. The following
Section 1.33 is added to the Plan: 
 “1.33 “Multi-Year Incentive Compensation” means compensation
based on the achievement of one or more performance goals measured over more than a one year period. Multi-Year Incentive Compensation does not include Bonus Compensation.” 

5. The second sentence in Section 3.1 is amended to read as follows: 

“A separate election for Regular Base Salary, Bonus Compensation, Multi-Year Incentive Compensation and Director Fees must be
made.” 
 6. The following sentence is added to the end of Section 3.1: 

“Employee Participants may also elect to defer up to 100% of their Multi-Year Incentive Compensation to the extent that Multi-Year
Incentive Compensation plus Bonus Compensation plus non-deferred Regular Base Salary is in excess of the 401(a)(17) Limit in effect for the last year of the performance period for the Multi-Year Incentive Compensation, instead of for the year of
payment. The first Multi-Year Incentive Compensation which an Employee Participant may elect to defer shall be Multi-Year Incentive Compensation for which the performance period begins on January 1, 2011.” 

7. Subsection 3.2(a) is amended to read as follows effective with respect to Deferral Elections made in 2010 with respect to Eligible
Compensation for a period of service that begins after December 31, 2010: 

 “(a) An Employee Participant desiring to participate in the Plan must file with the
Company a Deferral Election not later than the close of the Participant’s taxable year next preceding the period of service for which the right to the compensation arises, at which time the election shall become irrevocable. For avoidance of
doubt, this means that with respect to Multi-Year Incentive Compensation with a three year performance period, a Deferral Election must be filed prior to the beginning of the first year of the three year performance period. A Deferral Election shall
be effective on the first day of the Plan Year following the filing thereof.” 
 8. The second sentence in Subsection 3.2(d)
is amended to read as follows: 
 “All amounts shall be withheld ratably throughout the Plan Year except for any bonus or
incentive amounts, which shall be withheld in a single lump sum.” 
 IN WITNESS WHEREOF, a duly appointed member
of the Committee has executed this Amendment No. 1 to the Plan on this 22nd day of December, 2010. 
  

			
	UNITRIN, INC.
		
	By: 	 	 /s/ Lisa KingForm of Annual Incentive Award Agreement

 Exhibit 10.18 
 Unitrin, Inc. 2009 Performance Incentive Plan 
 ANNUAL INCENTIVE AWARD
AGREEMENT 
 This ANNUAL INCENTIVE AWARD AGREEMENT (“Agreement”) is made as of this
     day of                     , 2       (“Grant Date”) between
[EMPLOYER NAME] (the “Company”), and «Name» (the “Participant”). 
 SIGNATURES

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

 

							
	COMPANY	  		  	PARTICIPANT
				
	By:	  	  
	  		  	  

		  	«Authorized Officer»	  		  	            «Name»

 By his or her signature below, the spouse of the Participant agrees to be bound by all of the terms and conditions of this Agreement. 

 

							
		  		  	  

				
		  		  		  	  

		  		  		  	Print Name

 RECITALS

 A. The Compensation Committee of the Board of Directors of Unitrin, Inc. (the “Committee”) has adopted the
2009 Performance Incentive Plan, including any and all amendments to date (the “Plan”). 
 B. The Plan provides for
the granting of annual and multi-year incentive awards to selected employees of Unitrin, Inc. or any of its affiliates. 

  
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 NOW, THEREFORE, the parties hereto agree as follows: 

1. Grant. The Company grants to the Participant an annual incentive award on the terms and conditions hereinafter set forth
(the “Award”), subject to the provisions set forth on Exhibit A. 
 2. Vesting and Forfeiture.

 (a) Performance Period. The Performance Period (the “Performance Period”) for this Award
shall be the period set forth in the attached Exhibit. Subject to the forfeiture and early vesting provisions referenced in Section 2(b) below, the Award will vest on the last day of the Performance Period only to the extent set forth and in
accordance with the terms of Exhibit A with regard to the performance condition(s) referenced therein. 
 (b)
Forfeiture or Early Vesting upon Retirement, Death, Disability or Other Events. During the Performance Period, the Award may be subject to forfeiture or early vesting upon the termination of the Participant’s employment due to
retirement, death, disability or other events in accordance with the provisions of Articles 6 or 11 of the Plan, which are incorporated in and made a part of this Agreement. 
 3. Withholding of Taxes. The Company shall withhold from any payouts under the Award the amounts the Company is required to withhold to satisfy any applicable tax withholding requirements
based on minimum statutory withholding rates for federal and state tax purposes, including any payroll taxes. 
 4. No
Assignment or Other Transfer. Neither this Agreement, the Award 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 to the spouse or former spouse of the Participant pursuant to any divorce
proceedings, settlement or judgment. Any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of this Agreement, the Award or any other rights or privileges granted hereby contrary to the provisions hereof shall be null and void and
of no force or effect. 
 5. Participation by Participant in Other Company Plans. Nothing herein contained shall
affect the right of the Participant 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. 

  
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 6. 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 the Participant, to restrict the right of the Company or any of its subsidiaries or affiliates to discharge the Participant or to
modify, extend or otherwise affect in any manner whatsoever, the terms of any employment agreement which may exist between the Participant and the Company or any of its subsidiaries or affiliates. 

7. Agreement Subject to Award Plan. The Award hereby granted is subject to, and the Company and the Participant 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 Participant’s rights under this Agreement
without the prior written consent of the Participant. To the extent that the terms or conditions of this Agreement conflict with the terms or conditions of the Plan, the Plan shall govern. 

8. Arbitration. All disputes related to this Agreement or any Award 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 Participant upon written request
to the Director of Human Resources, Unitrin Services Company, 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, 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. 
 9. 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 Illinois without application of its conflicts of laws principles. 

  
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 10. Miscellaneous. This Agreement, together with the Plan, is the entire
agreement of the parties with respect to the Award granted hereby and may not be amended except in a writing signed by both the Company and the Participant. 
 <ADD THE NEXT SECTION FOR ALL GRANTS TO ALL EXECUTIVE OFFICERS OF THE COMPANY, EFFECTIVE 2/1/11:> 
 11. 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. 

  
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 Exhibit A 
 To Annual Incentive Award Agreement 
 – 

Overview: This Exhibit A sets forth the terms that will determine the amount of the cash payout, if any, that the Participant may be entitled to
receive pursuant to the Award based on the achievement of the applicable performance goals measured over the Performance Period. 

Performance Period: January 1, 2011 through December 31, 2011. 
 Threshold, Target and Maximum performance levels: The applicable Threshold, Target and Maximum levels of performance for the Award are set forth below.  

Table 1. Performance Levels 
  

							
	 Type of Award
	 	 Threshold
	 	 Target
	 	 Maximum

	 Annual Award
	 		 		 	

 Target Bonus Percentage: The applicable Target Bonus Percentage for the Award is set forth in Table 1
above, under the heading “Target”. The Target Bonus Percentage is expressed as a percentage of the Participant’s Base Salary, as defined herein. 
 Base Salary: Base Salary is the Participant’s annual base salary in effect as of April 1 of the Performance Period. 
 Performance Measures: The performance measures applicable to this Award are Profit Margin and Premium and Auto Finance Revenue Growth, as defined herein. The performance goals for each applicable
measure are shown in the Performance Matrix in Exhibit A-1, which shows Profit Margin on the X axis and Premium and Auto Finance Revenue Growth on the Y axis. 
 Profit Margin: Profit Margin is defined as Net Income From Operations divided by Premium and Auto Finance Revenues. 
 Premium and Auto Finance Revenue Growth: Premium and Auto Finance Revenue Growth is defined as the percentage increase in Premium and Auto Finance Revenues in 2011 from such revenues in 2010.

 Premium and Auto Finance Revenues: Premium Revenues is defined as earned premiums as reported in the Financial Analysis Summaries for
the following operating companies: Kemper, Unitrin Specialty, Unitrin Direct, Career Agency Companies, Reserve National and Unitrin Business Insurance. Auto Finance Revenues is defined as gross income as reported in the Fireside Bank Financial
Analysis Summary minus the gross income of the Fireside Bank corporate product line. 
 Net Income From Operations: Net Income From
Operations includes the sum of net incomes as reported in the Financial Analysis Summaries (excluding corporate divisions) for the following operating companies: Kemper, Unitrin Specialty, Unitrin Direct, Career Agency Companies, Reserve National
and Fireside Bank. (excluding Fireside Bank’s corporate line of business). Net Income From Operations also includes the after-tax investment income pertaining to the reserve run-off of discontinued operations (Unitrin Business Insurance and
First Nonprofit). 

  
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 Target Multiplier: At the end of the Performance Period, the Participant will be assigned a Target
Multiplier, which is derived from the Performance Matrix set forth on Exhibit A-1 based on achievement of the performance goals. For performance between points on the Performance Matrix, the Target Multiplier will be interpolated on a straight-line
basis. 
 Award Percentage: The Target Multiplier will be applied against Participant’s Target Bonus Percentage to arrive at the
Award Percentage for the Participant. 
 Award Calculation: The determination of the amount of the payout, if any, under the Award will
be calculated by multiplying the Participant’s Award Percentage by the Participant’s Base Salary. 
 Target Multiplier
* Participant’s applicable Target Bonus Percentage = Award Percentage 
 Award Percentage * Base Salary =
Final Cash Award payable under the Plan 
 Illustrative Example: Below is an illustrative example of a calculation for a potential payout
under the Award for a sample participant with a Base Salary of $100,000. 
 Table 2. Illustrative Example:

 Based on Profit Plan 2010-I, at -6.44% Growth Rate & 7.35% Profit Margin 

 

																			
	Example of
Individual
Target Bonus
Percentage
from Table 1	 	 	Example of Target
Multiplier
interpolated from
Performance
Matrix	 	 	Example of Total
Award 
Percentage
(AxB)	 	 	Example of Base
Salary	 	 	Example of
Estimated final
Cash Award
payable under
the Plan (CxD)	 
	A	 	 	B	 	 	C	 	 	D	 	 	E	 
	 	50.0	% 	 	 	155.5	% 	 	 	77.8	% 	 	 	100,000	  	 	 	77,800	  

 Adjustments: The Compensation
Committee of the Unitrin, Inc. Board of Directors may, in its discretion: 
  

	(i)	in evaluating performance in connection with this Award, include or exclude any of the following events that occur during a 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 or restructuring;
(e) extraordinary nonrecurring items as described in FASB Accounting Standards CodificationTM 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 Performance Period; and (f) acquisitions or divestitures; and 

  
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	(ii)	make adjustments to the established performance goals applicable to this Award to reflect changes to the job responsibilities of the Participant or the structure of the
Company or its Affiliates that relate directly to such established performance goals for all or a portion of the applicable Performance Period; provided, however, that no such adjustment shall be made to an Award to an employee whose compensation is
subject to Section 162(m) of the Internal Revenue Code of 1986, as amended, if such adjustment would cause the compensation payable under the Award to fail to qualify as performance-based compensation under Section 162(m).

  
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