Exhibit 10.20

ONEBEACON PERFORMANCE UNIT PLAN
(as amended)

1. Purpose of the Plan. The purpose of the Plan is to advance the interests of
the Company and its members by providing incentives in the form of Performance
Units to certain selected executives and key employees of the Company and its
Subsidiaries.

2. Definitions. The following capitalized terms used in the Plan have the
respective meanings set forth in this Section.

(a) Actual Units. The number of Target Units multiplied by the applicable
Performance Percentage.

(b) Actual Value. The method for calculating the Actual Value of each Actual
Unit shall be defined within the award agreement.

(c) Adverse Change in the Plan. The occurrence of any of the following events:

(i) termination of the Plan;

(ii) amendment of the Plan that materially diminishes the value of Awards that
may be granted under the Plan, either to individual Participants or in the
aggregate, unless there is substituted concurrently a plan or arrangement
providing for the grant of long-term incentive awards of comparable value to
individual Participants in the Plan or in the aggregate, as the case may be; or

(iii) in respect of any holder of an Award, a material diminution in his rights
held under an Award (except as may occur under the terms of the Award as
originally granted) unless there is substituted concurrently a long-term
incentive award with a value at least comparable to the loss in value
attributable to such diminution in rights.

(d) Affiliate. In respect of an entity or person, any entity under the control
of, in control of, or under common control with, such entity or person.

(e) Award. An award of Performance Units granted pursuant to the Plan.

(f) Award Agreement. The agreement between the Participant and the Company
specifying the applicable terms of an Award.

(g) Award Period. A period in respect of any Award, commencing as of the
beginning of the fiscal year of the Company in which such Award is made. An
Award Period may contain any number of Performance Periods.

(h) Board. The Board of Managers of the Company.

(i) Change in Control. The occurrence of any of the following events:

(i) Any person or group (within the meaning of Section 13(d) and 14(d)(2) of the
Exchange Act), other than John J. Byrne, Berkshire Hathaway, Inc. or one of its
wholly owned subsidiaries, an underwriter temporarily holding Parent Shares in
connection with a public issuance thereof or an employee benefit plan of Parent
or its Affiliates, becomes the beneficial owner (within the meaning of Rule
13d-3 under the Exchange Act) of thirty-five percent (35%) or more of the then
outstanding Parent Shares;

 

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(ii) the Continuing Directors cease for any reason to constitute a majority of
the Board of Directors of Parent; or

(iii) Parent or the Company disposes of the business for which the Participant’s
services are principally performed pursuant to a sale or other disposition of
all or substantially all of that business or assets of Parent or the Company
relating to that business (including stock of a subsidiary of Parent or the
Company).

(j) Code. The Internal Revenue Code of 1986, as amended, or any successor
thereto.

(k) Committee. The Human Resources Committee of the Board.

(l) Company. OneBeacon Insurance Group LLC.

(m) Constructive Termination. A termination of employment with the Company and
its Affiliates at the initiative of the Participant that the Participant
declares, by prior written notice delivered to the Secretary of the Company, to
be a Constructive Termination by the Company or an Affiliate and which follows
(i) a material decrease in his salary or (ii) a material diminution in the
authority, duties or responsibilities of his position as a result of which the
Participant determines in good faith that he cannot continue to carry out his
job in substantially the same manner as it was intended to be carried out
immediately before such diminution. Notwithstanding anything herein to the
contrary, a Constructive Termination shall not occur until and unless 30 days
have elapsed from the date the Company receives such written notice from the
Participant and, during that period, the Company fails to cure, or cause to be
cured, the circumstance serving as the basis on which the declaration of
Constructive Termination is given.

(n) Continuing Director. A member of the Board of Directors of Parent (i) who is
not an employee of Parent or its subsidiaries or of a holder of, or an employee
or an Affiliate of an entity or group that holds, thirty-five (35%) or more of
the Parent Shares and (ii) who either was a member of the Board of Directors of
Parent on December 31, 2002, or who subsequently became a director of the Parent
and whose election, or nomination for election, by Parent’s shareholders was
approved by a vote of a majority of the Continuing Directors then on Board of
Directors of Parent (which term, for purposes of this definition, shall mean the
whole Board of Directors of Parent and not any committee thereof).

(o) Earned Payment. With respect to each Award, the amount determined pursuant
to Section 5(c) or Section 7, as applicable.

(p) Employee. Any employee of the Company or of any Subsidiary.

(q) Exchange Act. The Securities Exchange Act of 1934, as amended.

(r) Initial Value. The initial value of each Actual Unit, which shall be $100
unless otherwise specified in the applicable Award Agreement.

(s) Officer. An Employee who is considered an officer of Parent under Rule
16a-1(f) (or any successor rule) promulgated under the Exchange Act.

(t) Parent. White Mountains Insurance Group, Ltd. or any successor thereto.

(u) Parent Shares. Common Shares, par value of $1.00, of Parent.

(v) Participant. An Employee who is selected by the Committee pursuant to
Section 4 to participate in the Plan.

 

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(w) Performance Goal(s). The applicable performance measure(s) selected by the
Committee to determine the applicable Performance Percentage.

(x) Performance Percentage. The percentage of Target Units earned by a
Participant, which shall be from 0% to 200%, based upon the level of fulfillment
of the Performance Goals(s) established with respect to an Award for an Award
Period. The method of determining the applicable Performance Percentage shall be
determined by the Committee and shall be specified in the applicable Award
Agreement.

(y) Performance Period. The calendar year or any other period that the
Committee, in its sole discretion, may determine, provided that each Performance
Period must commence on or after the first day of the Award Period and shall end
no later than the last day of the Award Period.

(z) Performance Units. Notional units which represent the right to receive cash
if specified Performance Goals established by the Committee are satisfied with
respect to an Award.

(aa) Plan. This OneBeacon Performance Unit Plan, as amended from time to time.

(bb) Qualifying Event. With respect to a Participant, the occurrence of either
(i) a Termination Without Cause; (ii) a Constructive Termination; or (iii) an
Adverse Change in the Plan.

(cc) Subsidiary. A subsidiary of the Company, as defined in Section 242(f) of
the Code (or any successor section thereto), or as determined by the Committee,
that in either case adopts the Plan in accordance with Section 12.

(dd) Target Units. The number of Performance Units initially awarded to a
Participant on the date of grant with respect to an Award Period.

(ee) Termination Without Cause. A termination of the Participant’s employment
with the Company or a subsidiary by the Company or the subsidiary other than (i)
due to the Participant’s death or total permanent disability or (ii) for Cause.
A transfer of a Participant’s employment to an Affiliate of the Company shall
not, by itself, be considered a Termination without Cause hereunder. For this
purpose, “Cause” shall mean (a) an act or omission by the Participant that
constitutes a felony or any crime involving moral turpitude; or (b) wilful gross
negligence or wilful gross misconduct by the Participant in connection with his
employment by the Company or by a subsidiary which causes, or is likely to
cause, material loss or damage to the Company. Notwithstanding anything herein
to the contrary, a termination of a Participant’s employment with the Company or
one of its subsidiaries due solely to the consummation of a corporate
transaction described in clause (iii) of the definition of Change in Control
shall not be deemed to be a “Termination Without Cause” if the purchaser
formally assumes the Company’s obligations under this Plan or places the
Participant in a similar or like plan with no diminution of the value of the
awards granted.

3. Administration. The Plan shall be administered by the Committee or such other
persons or entities designated by the Board. The Committee may delegate its
duties and powers in whole or in part to any subcommittee thereof or to the
Board of Directors of any Subsidiary. All references to the Committee hereafter
shall be deemed to be references to the Committee and/or the applicable other
persons, entities or subcommittee(s) to whom administrative duties and/or powers
hereunder have been so delegated. The Committee shall have the authority to
select the Employees who shall be Participants, to determine the size and terms
of an Award (subject to the limitations imposed on Awards in Section 5), to
modify the terms of any Award that has been granted, to determine the time when
Awards will be made, to determine the Award Periods and Performance Periods
applicable to an Award to determine the Performance Percentages applicable to an
Award, to determine the terms of a Participant’s Award Agreement (which need not
be identical or uniform), to establish Performance Goals in respect of such
Performance Periods, to certify whether such Performance Goals were attained and
to make such other

 

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determinations that are not prohibited by this Plan. The Committee is authorized
to interpret the Plan, to establish, amend and rescind any rules and regulations
relating to the Plan, and to make any other determinations that it deems
necessary or desirable. Any decision of the Committee in the interpretation and
administration of the Plan, as described herein, shall lie within its sole and
absolute discretion and shall be final, conclusive and binding on all parties
concerned. Determinations made by the Committee under the Plan need not be
uniform and may be made selectively among Participants, regardless of whether
such Participants are similarly situated. The Committee shall have the right to
deduct from any payment made under the Plan any federal, state, local or foreign
income or other taxes required by law to be withheld with respect to such
payment.

4. Eligibility and Participation. The Committee shall designate those Employees
who shall be Participants. Participants shall be selected from among the
Employees who are in a position to have a material impact on the results of the
operations of the Company or of one or more of its subsidiaries. The designation
of the Participants may be made individually or by groups or classifications of
Employees, as the Committee deems appropriate. Employees shall not have a right
to be designated as Participants and the designation of an Employee as a
Participant shall not obligate the Committee to continue such Employee as a
Participant in subsequent periods.

5. Awards.

(a) Grant. In each Award Agreement, the Committee shall specify (i) the number
of Target Units, (ii) the Performance Goal(s) to be attained within specified
Performance Periods and/or Award Period, (iii) the Award Period, and (iv) the
method for determining the applicable Performance Percentage based upon the
level of achievement of the applicable Performance Goal(s).

(b) Performance Goals. The performance goals for any Award shall be based upon
one or more of the following criteria: (i) consolidated earnings before or after
taxes (including earnings before interest, taxes, depreciation and
amortization); (ii) net income; (iii) operating income; (iv) book value; (v)
return on stockholders’ equity; (vi) expense management; (vii) return on
investment; (viii) improvements in capital structure; (ix) combined ratios (GAAP
or SAP); (x) operating ratios; (xi) profitability of an identifiable business
unit or product; (xii) maintenance or improvement of profit margins; (xiii)
market share; (xiv) revenues or sales; (xv) costs; (xvi) cash flow; (xvii)
working capital; (xviii) return on assets; (xix) customer satisfaction; (xx)
employee satisfaction or (xxi) any other performance measure selected by the
Committee in its sole discretion. The foregoing criteria, as applicable, may
relate to the Company, one or more of its Affiliates, one or more of its
divisions, units, partnerships, joint venturers, minority investments, product
lines or products, or to any combination of the foregoing, and may be applied on
an absolute basis and/or be relative to one or more peer group companies or
indices, or any combination thereof, all as the Committee shall determine. In
addition, the Performance Goals may be calculated without regard to
extraordinary items.

(c) Payment. As soon as practicable after the end of the Award Period or such
earlier date as the Committee in its sole discretion may designate, the
Committee shall determine and certify to the Board (i) whether the applicable
Performance Goal(s) have been attained in whole or in part with respect to a
given Participant’s Award and (ii) the Performance Percentage applicable to a
given Participant’s Award. At the end of the Award Period, the Committee shall
ascertain the Actual Value and the number of Actual Units. Unless otherwise
determined by the Committee, a Participant’s Earned Payment with respect to an
Award shall be equal to the Actual Value multiplied by the number of Actual
Units. A Participant’s Earned Payment shall be settled through a cash payment to
the Participant. Unless payment is deferred in accordance with an election made
by a participant in accordance with procedures adopted by the Company, payment
of any amount in respect for the Performance Units shall be made by the Company
no later than 2 1/2 months after the end of the Company’s fiscal year in which
such Performance Units are earned, and may be made in cash, in shares, or partly
in cash and partly in shares as determined by the Committee.

 

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6. Termination of Employment. Except as set forth in Section 7 or otherwise set
forth in an Award Agreement, a Participant shall immediately forfeit all
outstanding Awards upon any termination of employment prior to the end of the
applicable Award Period. The Committee may, at its discretion, provide that if a
Participant dies, retires, is assigned to a different position, or is granted a
leave of absence, or if the Participant’s employment is otherwise terminated,
during an Award Period, then all or a portion of the Participant’s Award, as
determined by the Committee, may be paid to the Participant (or his or her
beneficiary) after the end of the Performance Period in which the such event
occurs.

7. Change in Control.

(a) If a Qualifying Event occurs with respect to a Participant after a Change in
Control, then each Award held by such Participant that was granted prior to the
Change in Control shall be canceled and such Participant shall be entitled to
receive in respect of each such canceled Award a payment equal to the product of
(i) the Applicable Target Units, (ii) the Applicable Performance Percentage and
(iii) the Applicable Actual Value. For this purpose, (A) the “Applicable Target
Units” is equal to the number of Target Units for each canceled Award multiplied
by a fraction, the numerator of which is the number of full months that has
elapsed since the first day of the applicable Award Period to the date of the
applicable Qualifying Event and the denominator of which is the total number of
months in the Award Period, (B) the “Applicable Performance Percentage” is equal
to 100% and (C) the “Applicable Actual Value” is equal to the greater of the
Actual Value determined as of the last day of the calendar quarter ending prior
to the date of the applicable Qualifying Event or the Actual Value determined by
the Board in connection with the Change in Control. Payment of any amount in
respect of an Award as described above in this Section 7(a) shall be made as
promptly as possible after the occurrence of the Qualifying Event.

(b) Notwithstanding anything herein to the contrary, if, following a Change in
Control, a Participant’s employment remains continuous through the end of an
Award Period, then the Participant shall be paid with respect to those Awards
for which he would have been paid had there not been a Change in Control and the
Earned Payment shall be determined in accordance with Section 5(c).

8. Amendments or Termination. The Board may amend, alter or discontinue the
Plan, but no amendment, alteration or discontinuation shall be made which would
impair any of the accrued rights or obligations under any Award theretofore
granted to a Participant without such Participant’s consent; provided, however,
that the Committee may amend the Plan in such manner as it deems necessary to
permit the granting of Awards meeting the requirements of the Code or other
applicable laws.

9. No Right to Employment. Neither the Plan nor any action taken hereunder shall
be construed as giving any Participant or other person any right to continue to
be employed by, or to continue to perform services for, the Company or any
subsidiary, and the right to terminate the employment of or performance of
services by any Participant at any time and for any reason is specifically
reserved to the Company and its subsidiaries.

10. Nontransferability of Awards. An Award shall not be transferable or
assignable by the Participant otherwise than by will or by the laws of descent
and distribution.

11. Reduction of Awards. Notwithstanding anything to the contrary herein, the
Committee, in its sole discretion (but subject to applicable law), may reduce
any amounts payable to any Participant hereunder in order to satisfy any
liabilities owed to the Company or any of its Subsidiaries by the Participant.

12. Participation of Subsidiaries. If a subsidiary wishes to participate in the
Plan and its participation shall have been approved by the Board, the Board of
Directors of the Subsidiary shall adopt a resolution in form and substance
satisfactory to the Committee authorizing participation by the subsidiary in the
Plan. A Subsidiary that adopts the Plan in accordance with the Section shall be
permitted to rename

 

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the Plan under the name of such Subsidiary. A Subsidiary may cease to
participate in the Plan at any time by action of the Board or by action of the
Board of Directors of such Subsidiary, which latter action shall be effective
not earlier than the date of delivery to the Secretary of the Company of a
certified copy of a resolution of the Subsidiary’s Board of Directors taking
such action. Termination of participation in the Plan shall not relieve a
Subsidiary of any obligations theretofore incurred by it under the Plan. The
Board in its discretion may waive compliance with any provisions in this
section.

13. Claims Procedure. In general, any claim for benefits under the Plan shall be
filed by a Participant or beneficiary (“claimant”) on the form prescribed for
such purpose with the Committee. If a claim for benefits under the Plan is
wholly or partially denied, notice of the decision shall be furnished to the
claimant by the Committee within a reasonable period of time after receipt of
the claim by the Committee. The claims procedure shall be as follows:

(a) Any claimant who is denied a claim for benefits shall be furnished written
notice setting forth:

(i) the specific reason or reasons for the denial;

(ii) specific reference to the pertinent provision of the Plan upon which the
denial is based;

(iii) a description of any additional material or information necessary for the
claimant to perfect the claim; and

(iv) an explanation of the claim review procedure under the Plan.

(b) In order that a claimant may appeal a denial of a claim, the claimant’s duly
authorized representative may:

(i) request a review by written application to the Committee, or its designate,
no later than sixty (60) days after receipt by the claimant of written
notification of denial of a claim;

(ii) review pertinent documents; and

(iii) submit issues and comments in writing.

(c) A decision on review of a denied claim shall be made not later than sixty
(60) days after receipt of a request for review, unless special circumstances
require an extension of time for processing, in which case a decision shall be
rendered within a reasonable period of time, but not later than one hundred and
twenty (120) days after receipt of a request for review. The decision on a
review shall be in writing and shall include the specific reason(s) for the
decision and the specific reference(s) to the pertinent provisions of the Plan
on which the decision is based.

14. Miscellaneous Provisions. The Company is the sponsor and legal obligor under
the Plan and shall make all payments hereunder, other than any payments to be
made by any of the Subsidiaries, as described below (in which case such payments
shall be made by such Subsidiary, as appropriate). If a Subsidiary adopts the
Plan in accordance with Section 12, the Subsidiary shall be responsible for all
payments made under the Plan for Awards granted by the Board of Directors of the
Subsidiary including expenses involved in administering the Plan at the
Subsidiary level. The Plan is unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to ensure the payment of any amounts under the Plan, and the
Participant’s rights to any payment hereunder shall be no greater than the
rights of the Company’s (or the applicable Subsidiary’s) unsecured creditors.
All references to Sections herein shall be deemed to be references to the
specified sections of this Plan.

 

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15. Taxes. The Company and its Subsidiaries shall have the right to deduct from
any payment made under the Plan any federal, state or local income, payroll or
other taxes required by law to be withheld with respect to such payment.

16. Choice of Law. The Plan shall be governed by and construed in accordance
with the laws of the Delaware applicable to contracts made and to be performed
in the State of New York.

17. Designation of Beneficiary by Participant. A Participant may name a
beneficiary to receive any payment to which he may be entitled in respect of
Performance Units or in the event of his death, on a form to be provided by the
Committee. A Participant may change his beneficiary from time to time in the
same manner. If no designated beneficiary is living on the date on which any
amount becomes payable to a Participant’s executors or administrators, the term
“beneficiary” as used in the Plan shall include such person or persons.

18. Effectiveness of the Plan. The Plan shall be effective as of February 12,
2003, and was amended February 9, 2005, and February 8, 2006.

 

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