Exhibit 10.4.12

 

OneBeacon Insurance Group, Ltd.

Long-Term Incentive Plan

2011-2013 Performance Share Grant

 

THIS GRANT (this “Grant”) is made, effective as of February 22, 2011, between
OneBeacon Insurance Group, Ltd., a Bermuda company limited by shares (the
“Company”) and <First NAME> <Last NAME> (the “Participant”).

 

RECITALS:

 

WHEREAS, the Company has adopted the Long-Term Incentive Plan (“Plan”), which
Plan is incorporated herein by reference and made part of this Grant; and

 

WHEREAS, the Board has determined that it would be in the best interest of the
Company and its owners to grant the award provided for herein to the Participant
pursuant to the Plan and the terms set forth herein.

 

NOW THEREFORE, for good and valuable consideration the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

 

1.                                       Grant:  Subject to the terms and
conditions of the Plan and the additional terms and conditions set forth in this
Grant, the Company hereby grants to the Participant a Performance Share Award of
<# Of SHARES> shares.

 

2.                                       Award Period:  The Award Period shall
be January 1, 2011 through December 31, 2013.

 

3.                                       Performance Objective:  The Performance
Objective shall be annual 11% Growth in Book Value per Common Share (GBVPS)
including an adjustment for dividends paid.  The GBVPS for the Award Period as a
whole will be the average (mean) of the GBVPS as determined by the Board in its
sole discretion for each of the three Performance Periods.

 

4.                                       Performance Percentage:  The
Performance Percentage shall be dependent on the extent to which the Performance
Objective is attained, and shall be determined as follows:

 

GBVPS

 

Performance Percentage

 

4% or lower

 

0

%

11%

 

100

%

18% or higher

 

200

%

 

The Growth in Book Value per Common Share for the Award Period is calculated to
the nearest one-tenth of one percent.  For GBVPS between 4% and 18%, the
Performance Percentage will be determined on the basis of straight line
interpolation.

 

5.                                       Award Payment:  Subject to all terms
and conditions of the Plan, the Participant’s Actual Value at the end of the
Award Period will be settled in cash, in Class A Common Shares (“Shares”), or
partly in cash and partly in Shares, as determined by the Committee.

 

In the event of any cash, the cash value will be:

(a) the Actual Value, times

(b) the percentage of the Award settled in cash;

 

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and the number of Shares issued will be:

(a) the Actual Value, divided by

(b) the Market Value of a share, times

(c) the percentage of the Award settled in Shares

 

If settled entirely in Shares, the number of Shares issued will be:

(a) the Actual Value, divided by

(b) the Market Value of a share.

 

6.                                       Termination of Employment:  Except as
provided in Section 6 of the Plan, this Award shall be canceled, and no payment
shall be payable hereunder, if the Participant’s continuous employment or
Related Employment with the Company shall terminate for any reason prior to the
end of the Award Period.  Notwithstanding the preceding sentence, the special
rule provided in Section 6(f)(iii) for an Adverse Change in the Plan shall not
apply to this Award.

 

7.                                       Successors and Assigns:  This Grant
shall inure to the benefit of and be binding upon the Company and its successors
and assigns.  The Company shall request any purchaser of a business unit in
which the Participant is employed (a “Purchaser”), to fully assume the
obligations of the Company under this Grant.  If a Purchaser declines to assume
such obligations, the Company shall remain obligated under the terms of this
Grant.

 

8.                                       Definitions:  All terms not otherwise
defined herein shall have the same meaning as in the Plan.

 

9.                                       Withholding:  The Participant agrees to
make appropriate arrangements with the Company for satisfaction of any
applicable income tax withholding requirements, including the payment to the
Company, at the termination of the Award Period (or such earlier or later date
as may be applicable under the Code), of all such taxes and other amounts, and
the Company shall be authorized to take such action as may be necessary, in the
opinion of the Company’s counsel (including, without limitation, withholding
amounts from any compensation or other amount owing from the Company to the
Participant), to satisfy all obligations for the payment of such taxes and other
amounts.

 

10.                                 Reduction of the Award:  Notwithstanding
anything to the contrary herein, the Board, in its sole discretion (but subject
to applicable law), may reduce any amounts payable to the Participant in order
to satisfy any liabilities owed to the Company by the Participant.

 

11.                                 No Right to Continued Employment:  Neither
the Plan nor this Grant shall be construed as giving the Participant the right
to be retained in the employ of, or in any consulting relationship to, the
Company or any of its subsidiaries.  Further, the Company may at any time
dismiss the Participant or discontinue any consulting relationship, free from
any liability or any claim under the Plan or this Grant, except as otherwise
expressly provided in the Plan and in this Grant.  In addition, nothing herein
shall obligate the Company to make future Grants to the Participant.

 

12.                                 Award Subject to Plan:  By entering in this
Grant the Participant agrees and acknowledges that the Participant has received
and read a copy of the Plan, understands the terms of the Plan and this Award
and that this Award is subject to all of the terms and provisions set forth in
the Plan and in this Grant and accepts this Performance Share Award subject to
all such terms and conditions which are incorporated herein by reference,
including, but not limited to, the eligibility requirement to execute a
Confidentiality and Nonsolicitation Agreement.  In the event of a conflict
between any term or provision contained in this Grant and a terms or provision
of the Plan, the applicable terms and provisions of the Plan will govern and
prevail.

 

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13.                                 Designation of Beneficiary by Participant: 
A Participant may name a beneficiary to receive any payment to which he/she may
be entitled in respect of this Award in the event of his/her death, by notifying
the Company.  A Participant may change his/her beneficiary from time to time in
the same manner.  If the Participant has not designated a beneficiary or if no
designated beneficiary is living on the date on which any amount becomes payable
to a Participant’s beneficiary, that amount shall be paid to the Participant’s
estate.

 

14.                                 No Rights as Shareholder: You will not be
considered a shareholder of the Company for any purpose with respect to this
Award unless and until shares of Stock are issued to you in settlement of this
Award.

 

15.                                 Compliance with Section 409A of the Internal
Revenue Code:  Notwithstanding anything in this Agreement to the contrary, to
the extent that this Agreement constitutes a nonqualified deferred compensation
plan to which Internal Revenue Code Section 409A applies, the administration of
this Award (including time and manner of payments under it) shall comply with
Section 409A.

 

16.                                 Dilution and Other Adjustments:  In the
event of any change in the Outstanding Shares of the Company by reason of any
stock split, stock or extraordinary cash dividend, recapitalization, merger,
consolidation, reorganization, combination or exchange of Shares or other
similar event, or in the event of an extraordinary cash dividend or other
similar event, and if the Committee shall determine, in its sole discretion,
that such change equitably requires an adjustment in the number or kind of
Shares that may be issued under the Plan pursuant to Section 3 and subject to
this Award, in the target number of Performance Shares which have been awarded
to you, including by payment of cash to you, in any measure of performance, or
in any other terms that the Committee determines equitably require adjustment,
then such adjustment shall be made by the Committee and shall be conclusive and
binding for all purposes of the Plan and this Award.

 

17.                                 Notices:  Any notice necessary under this
Grant shall be addressed to the Company and to the Participant at the address
appearing in the personnel records of the Company for such Participant or to
either party at such other address as such party hereto may hereafter designate
in writing to the other. Any such notice shall be deemed effective upon receipt
thereof by the addressee.

 

18.                                 Governing Law:  This Agreement shall be
governed by and construed in accordance with the laws of Bermuda.

 

19.                                 Signature in Counterparts:  This Grant may
be signed in counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Grant as of the day
and year first above written.

 

 

PARTICIPANT

 

ONEBEACON INSURANCE GROUP, LTD.

 

 

 

 

 

 

By:

 

 

By:

/s/ Mike Miller

<First Name> <Last Name>

 

Name:

Mike Miller

 

 

Title:

President & CEO

 

 

 

 

 

 

 

 

 

Date

 

 

 

 

 

 

 

 

Award Details:

 

 

 

 

 

2011 — 2013 Performance Share Plan

 

 

<# Shares> Shares Granted

 

 

 

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Annex

 

Key Definitions

 

Terms used in this Grant shall have the following meanings:

 

Actual Value shall mean:

 

i)                                         the number of Performance Shares
granted, times

 

ii)                                      the Performance Percentage, times

 

iii)                                   (a) the Market Value of a Share at the
date that the Compensation Committee certifies the Performance Percentage, plus
(b) the per share equivalent of Dividends Paid in the period February 22, 2011
to the date that the Compensation Committee certifies the Performance
Percentage.

 

Growth in Book Value per Common Share shall mean:

 

The annual internal rate of return produced by a) the Change in Per Share GAAP
Shareholders Equity plus b) Dividends Paid during the period.  For purposes of
this calculation the following definitions should be used:

 

i)                                         Change in Per Share GAAP
Shareholders’ Equity - (a) the Company’s GAAP Shareholders’ Equity at the end of
the period (measured on an as converted/as diluted basis) divided by (b) the
number of as converted / as diluted common shares of the Company outstanding at
the end of the period, minus (c) the Company’s GAAP Shareholders’ Equity at the
beginning of the period (measured on an as converted/as diluted basis) divided
by (d) the number of as converted / as diluted common shares of the Company
outstanding at the beginning of the period,

 

ii)                                      Dividends Paid - the per share
dividends paid on the Company’s Common Shares over the period.

 

Market Value shall mean:

 

the average closing price of the company’s Shares calculated using the closing
price of the Shares on each of the five (5) trading days preceding the date that
the Compensation Committee certifies the Performance Percentage.

 

Performance Percentage shall mean:

 

a percentage of no less than 0% and no more than 200%, which percentage was
determined by the Committee, as outlined in paragraph four (4) of this
Performance Share Grant.

 

Performance Period shall mean:

 

Each of the fiscal years of the Company ending December 31, 2011, 2012 and 2013,
respectively.

 

Performance Share shall mean:

 

a performance share granted to participant under the Company’s Long-Term
Incentive Plan having the financial equivalence of one Class A common share of
the Company, conditioned upon the attainment of the specified Performance
Objective(s) over the specified Award Period.

 

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