UNITRIN, INC. PENSION EQUALIZATION PLAN

Exhibit 10.12

UNITRIN, INC. PENSION EQUALIZATION PLAN

As Amended and Restated Effective January 1, 2009

TABLE OF CONTENTS

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UNITRIN, INC. PENSION EQUALIZATION PLAN

The Unitrin, Inc. Pension Equalization Plan (the “ Plan ”) was adopted effective April 10, 1990, was amended and restated effective January 19, 1995 and hereby is further amended and restated, effective January 1, 2009, to comply with Section 409A of the Internal Revenue Code. The Plan is established and maintained by Unitrin, Inc. for the purpose of providing benefits in excess of the limitations on benefits imposed by Section 415 of the Internal Revenue Code for certain of its or its Affiliates’ employees who participate in any Qualified Plan, as hereinafter defined.

Also, only with respect to those Participants hereunder who are Top Hat Participants as defined in Section 1.25, the Plan shall provide benefits in excess of the limitations on benefits imposed by Section 401(a)(17) of the Internal Revenue Code.

ARTICLE I

DEFINITIONS

1.1 General . For purposes of the Plan, the following terms, when capitalized, will have the following meanings. The masculine pronoun wherever used herein will include the feminine gender, the singular number will include the plural, and the plural will include the singular, unless the context clearly indicates a different meaning.

1.2 “ Affiliated Company” or “Affiliate ” means any corporation, trade or business entity which is a member of a controlled group of corporations, trades or businesses of which the Company is also a member, as provided in Code Sections 414(b) or (c).

1.3 “ Beneficiary ” means the person designated as a beneficiary by the Participant in accordance with such procedures as may be established by the Company.

1.4 “ Board ” means the Board of Directors of the Company.

1.5 “ Change of Control Event ” means the occurrence of any of the following events described in subsections (a) through (d) below:

(a) any “Person” (defined below) is or becomes the “Beneficial Owner,” (defined below) directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its “Affiliate” (defined below)) representing 25% or more of the combined voting power of the Company’s then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (1) of subsection (c) below; or

(b) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on December 31, 2008, constituted the Board of Directors and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of directors of the Company) whose appointment or election by the Board of Directors or nomination for election by the Company’s

shareholders was approved or recommended by a vote of at least two-thirds of the directors still in office who either were directors on December 31, 2008 or whose appointment, election or nomination for election was previously so approved or recommended; or

(c) there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation, other than (i) a merger or consolidation which results in the directors of the Company immediately prior to such merger or consolidation continuing to constitute at least a majority of the board of directors of the surviving entity or any parent thereof, or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliate) representing 25% or more of the combined voting power of the Company’s then outstanding securities; or

(d) the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company of all or substantially all of the Company’s assets immediately following which the individuals who comprise the Board of Directors immediately prior thereto constitute at least a majority of the board of directors of the entity to which such assets are sold or disposed or any parent thereof.

(e) As used in this definition of Change of Control Event:

(i) “Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”);

(ii) “Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Exchange Act; and

(iii) “Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified in Sections 13(d)(3) and 14(d)(2) thereof, except that such term shall not include (1) the Company or any entity, more than 50% of the voting securities of which are Beneficially Owned by the Company, (2) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (3) an underwriter temporarily holding securities pursuant to an offering of such securities, (4) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company, (5) any individual, entity or group whose ownership of securities of the Company is reported on Schedule 13G pursuant to Rule 13d-1 promulgated under the Exchange Act (but only for so long as such ownership is so reported) or (6) Singleton Group LLC or any successor in interest to such entity.

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1.6 “ Code ” means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated thereunder.

1.7 “ Committee ” means the Compensation Committee of the Board.

1.8 “ Company ” means Unitrin, Inc., a Delaware corporation, or, to the extent provided in Section 9.11, any successor corporation or other entity resulting from a reorganization, merger or consolidation into or with the Company, or a transfer or sale of substantially all of the assets of the Company.

1.9 “ Early Retirement Date ” means any date, prior to a Participant’s normal retirement date under the Qualified Plan, on which a Participant is eligible to begin payment of his or her Qualified Plan Retirement Benefit.

1.10 “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated thereunder.

1.11 “ Employer ” means the Company and its Affiliates.

1.12 “ Normal Retirement Date ” means the first day of the month coinciding with or next following the date on which a Participant attains age 65.

1.13 “ Participant ” means an employee of the Company or of an Affiliated Company who at any time after April 10, 1990 is a participant under a Qualified Plan and to whom or with respect to whom a benefit is payable under the Plan. The term “Participant” shall include Top Hat Participants.

1.14 “ Plan ” means the Unitrin, Inc. Pension Equalization Plan.

1.15 “ Qualified Plan ” means any tax-qualified defined benefit pension plan maintained by the Company or any Affiliate and each predecessor, successor or replacement to any such Qualified Plan, excluding any Qualified Plan maintained solely pursuant to a collective bargaining agreement.

1.16 “ Qualified Plan Retirement Benefit ” means the accrued benefit, determined as of the relevant determination date, which a Participant would be entitled to receive for his or her life under a Qualified Plan commencing on his or her normal retirement date (as defined in the Qualified Plan) by assuming that, as of such determination date, the Participant had a termination of employment with the Company and all Affiliates for any reason other than death. Where a Qualified Plan provides for an offset to a Participant’s accrued benefit thereunder to reflect the accrued benefit the Participant earned under other defined benefit pension plans of the Company or an Affiliated Company, the Participant’s Qualified Plan Retirement Benefit shall be the total value of all such accrued benefits.

1.17 “ Qualified Plan Surviving Spouse Benefit ” means the aggregate benefit payment to the Surviving Spouse of a Participant with respect to the Participant’s Qualified Plan Retirement Benefit in the event of the death of the Participant at any time prior to commencement of payment of his or her Qualified Plan Retirement Benefit.

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1.18 “ Regulations ” means the regulations, as amended from time to time, which are issued under Code Section 409A.

1.19 “ Separation from Service ” means the Participant’s termination from employment from the Employer for reasons other than death, subject to the following and other provisions of the Regulations:

(a) The employment relationship is treated as continuing intact while the Participant is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six months, or if longer, so long as the individual retains a right to reemployment with the Employer under an applicable statute or by contract. A leave of absence constitutes a bona fide leave of absence only if there is a reasonable expectation that the Participant will return to perform services for the Employer. If the period of leave exceeds six months and the Participant does not retain a right to reemployment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first day immediately following such six-month period. Notwithstanding the foregoing, where a leave of absence is due to any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six months, where such impairment causes the Participant to be unable to perform the duties of his or her position of employment or any substantially similar position of employment, a 29-month period of absence may be substituted for such six-month period.

(b) In determining whether a Separation from Service has occurred, the following presumptions, which may be rebutted as provided in the Regulations, shall apply:

(i) A Participant is presumed to have separated from service where the level of bona fide services performed decreases to a level equal to 20% or less of the average level of services performed by the Participant during the immediately preceding 36-month period.

(ii) A Participant will be presumed not to have separated from service where the level of bona fide services performed continues at a level that is 50% or more of the average level of services performed by the Participant during the immediately preceding 36-month period.

No presumption applies to a decrease in the level of bona fide services performed to a level that is more than 20% but less than 50% of the average level of bona fide services performed during the immediately preceding 36-month period. If a Participant had not performed services for the Employer for 36 months, the full period that the Participant has performed services for the Employer shall be substituted for 36 months.

(c) For purposes of this Section, the term “Employer” has the meaning set forth in Section 1.11, provided that the following shall apply in determining whether a person is an Affiliate as defined in Section 1.2:

(i) In applying Code Sections 1563(a)(1), (2) and (3) for purposes of determining a controlled group of corporations under Code Section 414(b), the phrase “at least 50 percent” shall be used instead of “at least 80 percent” each place it appears in Code Sections 1563(a)(1), (2) and (3); and

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(ii) In applying Treas. Reg. Section 1.414(c)-2 for purposes of determining trades or businesses (whether or not incorporated) that are under common control for purposes of Code Section 414(c), “at least 50 percent” is used instead of “at least 80 percent” each place it appears in Treas. Reg. Section 1.414(c)-2.

(d) In the event of the sale or other disposition of assets by the Company or an Affiliate (the “ Seller ”) to an unrelated service recipient (the “ Buyer ”), the Seller and the Buyer may specify whether a Separation from Service has occurred for a Participant who would otherwise experience a Separation from Service with the Seller, in accordance with the rules set forth in Section 1.409A-1(h)(4) of the Regulations.

1.20 “ Supplemental Non-Spousal Benefit ” means the benefit payable to a Beneficiary pursuant to Article V of the Plan.

1.21 “ Supplemental Retirement Benefit ” means the benefit payable to a Participant pursuant to the Plan by reason of his or her Separation from Service for any reason other than death.

1.22 “ Supplemental Retirement Payment Date ” means the date on which the Participant’s Supplemental Retirement Benefit is, or commences to be, paid pursuant to Sections 3.3, 3.4 or 9.10 as applicable.

1.23 “ Surviving Spouse ” means a person who is married to a Participant at the date of his or her death within the meaning of the laws of the state of the Participant’s residence and as evidenced by a valid marriage certificate or other proof acceptable to the Company.

1.24 “ Supplemental Surviving Spouse Benefit ” means the benefit payable to a Surviving Spouse pursuant to the Plan.

1.25 “ Top Hat Participant ” means a Participant who qualifies for inclusion in a “select group of management or highly compensated employees” as provided in Sections 201(2), 301(a)(3), 401(a)(1) and 4021(b)(6) of ERISA and who has been designated as a Top Hat Participant by the Board, as reflected in Board minutes or other official records of the Board.

ARTICLE II

ELIGIBILITY

An employee who is eligible to receive a Qualified Plan Retirement Benefit, the amount of which is reduced by reason of the application of the limitations on benefits imposed by application of Code Section 415 (or in the case of a Top Hat Participant, is reduced by the limitations on benefits imposed by application of Code Section 401(a)(17)), shall be eligible to receive a Supplemental Retirement Benefit. If a Participant described in the preceding sentence dies prior to his or her Supplemental Retirement Payment Date, a Supplemental Surviving Spouse Benefit or a Supplemental Non-Spousal Benefit shall be payable if so provided by Article IV or V. The Participant must be fully vested in his or her Qualified Plan Retirement Benefit in order for the Participant, his Surviving Spouse or Beneficiary to receive a benefit under the Plan.

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ARTICLE III

SUPPLEMENTAL RETIREMENT BENEFIT

3.1 Amount . The Supplemental Retirement Benefit payable to a Participant in the form of a single life annuity over the lifetime of the Participant only, commencing on the later of his