Exhibit 10.33
THE HANOVER INSURANCE GROUP,
INC.
2006 LONG-TERM INCENTIVE
PLAN
NON-QUALIFIED STOCK OPTION
AGREEMENT
This Non-Qualified Stock Option
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
”).
PREAMBLE
WHEREAS, the Company considers it
desirable and in the best interests of the Company that the
Participant be given an opportunity to acquire a proprietary
interest in the Company in the form of options to purchase shares
of Stock.
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:
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1.
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Grant of
Option. The Administrator
hereby grants to the Participant a non-statutory stock option (the
“ Stock Option ”) to purchase <NUMBER OF
OPTIONS> shares of Stock (the “ Shares ”),
for a price of <GRANT PRICE> per share (the “ Option
Price ”), which is not less than the per-Share fair
market value on the Grant Date. The Stock Option is intended to be,
and is hereby designated, a non-statutory option that does
not qualify as an incentive stock option as defined in
Section 422 of the Internal Revenue Code.
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2.
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Expiration
of Option . The Stock
Option shall automatically terminate and cease being exercisable on
the tenth anniversary of the Grant Date (the “ Expiration
Date ”).
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3.
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Vesting.
Subject to the terms of this Agreement and the Plan, and provided
Participant remains continuously an Employee of the Company or one
of its subsidiaries or affiliates (the Company and its subsidiaries
and affiliates hereinafter referred to as “
THG”) through the applicable vesting date, the Stock
Option shall vest and become exercisable in the following
cumulative installments:
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•
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As to one half (50%) of the
total number of Shares, on or after the third anniversary of the
Grant Date; and
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As to the remaining one half
(50%) of the total number of Shares, on or after the fourth
anniversary of the Grant Date.
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4.
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Termination
of Employment and Other Events .
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(a) Termination for Cause .
If Participant's Employment with THG is terminated for Cause,
effective immediately prior to such termination, the Stock Option,
whether or not vested, shall be automatically cancelled and
forfeited and be returned to the Company for no
consideration.
(b) Voluntary Termination .
If Participant voluntarily terminates his/her Employment with THG,
effective immediately prior to such termination, any portion of the
Stock Option not then vested shall be automatically cancelled and
forfeited and be returned to the Company for no consideration, and
such portion of the Stock Option that is then vested shall remain
exercisable until the earlier of (i) 60 days following the
date of termination, or (ii) the Expiration Date.
(c) Disability . Subject to
the remainder of this Section 4(c), if 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 ”), for so long as
Participant remains in LTD Status, the Stock Option shall continue
to vest in accordance with this Agreement, and to the extent vested
shall
remain exercisable, until the
earlier of (i) the first anniversary of the date the
Participant was placed in LTD Status, or (ii) the Expiration
Date (the “ LTD Extension Period ”). At the
expiration of the LTD Extension Period, the Stock Option, whether
or not vested, shall be automatically cancelled and forfeited and
be returned to the Company for no consideration.
If, prior to the first anniversary
of the date Participant was placed in LTD Status, Participant is
removed from LTD Status and immediately thereafter returns to
active Employment with THG, Participant shall be treated (for the
purposes of this Agreement) as if he/she were never placed in LTD
Status and remained an active Employee of THG, shall be given
credit toward vesting pursuant to Section 3 for the period
Participant was in LTD Status, and this Agreement shall remain in
full force and effect in accordance with its terms.
(d) Death. If Participant
dies, effective immediately prior to death, any portion of the
Stock Option not then vested shall be automatically cancelled and
forfeited and be returned to the Company for no consideration, and
such portion of the Stock Option that is then vested shall remain
exercisable until the earlier of (i) one (1) year
following the date of death, or (ii) the Expiration
Date.
(e) Retirement . If
Participant Retires, effective immediately prior to the effective
date of Participant’s Retirement, any portion of the Stock
Option not then vested shall be automatically cancelled and
forfeited and be returned to the Company for no consideration, and
such portion of the Stock Option that is then vested shall remain
exercisable until the earlier of (i) three (3) years
following the effective date of the Participant’s Retirement,
or (ii) the Expiration Date.
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.
(f) 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
Stock Options 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 following rules shall apply:
(i) Except as provided below in
Section 4(f)(ii), in the event of a Change in Control the
Participant shall automatically vest in 100% of the Stock
Options.
(ii) Notwithstanding
Section 4(f)(i), no acceleration of vesting shall occur with
respect to the Stock Options if the Administrator reasonably
determines in good faith prior to the occurrence of a Change in
Control that this Award shall be honored or assumed, or new rights
substituted therefor (such honored, assumed or substituted award
hereinafter called an “ Alternative Award ”), by
Participant's employer (or the parent or a subsidiary of such
employer) immediately following the Change in Control, provided
that any such Alternative Award must:
(A) be based on stock which is
traded, or will be traded upon consummation of the Change in
Control, on an established securities market;
(B) provide such Participant (or
each Participant in a class of Participants) with rights and
entitlements substantially equivalent to or better than the rights,
terms and conditions applicable under this Award, including, but
not limited to, an identical or better vesting schedule;
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(C) have substantially equivalent
economic value to this Award (determined at the time of the Change
in Control); and
(D) have terms and conditions which
provide that in the event that the Participant's employment is
involuntarily terminated (other than for Cause) or Participant
terminates employment for “Good Reason” (as defined
below) prior to the second anniversary of the Change in Control,
the Participant shall automatically vest in 100% of the Alternative
Award and any conditions on a Participant's rights under, or any
restrictions on transfer or exercisability applicable to, the
vested portion of such Alternative Award shall
