Exhibit 10.2

 

OneBeacon Insurance Group, Ltd.

Long-Term Incentive Plan

2013-2015 Performance Unit Grant

 

THIS GRANT (this “Grant”) is made, effective as of February 26, 2013, between
OneBeacon Insurance Group, Ltd., a Bermuda company (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 Unit Award of <# Of UNITS> units.  The
value of one Unit shall be fixed at $100.00 (the “Unit Value”) for all purposes
under this Grant.

 

2.             Award Period:  The Award Period shall be January 1, 2013 through
December 31, 2015.

 

3.             Performance Objective:  The Performance Objective applicable to
this Award shall be a Specialty Only Adjusted Economic Combined Ratio for the
Company and its subsidiaries (the “Specialty Only Adjusted Economic Combined
Ratio” or “SOAECR”) of 92.5% for the Award Period as a whole.  The Specialty
Only Adjusted Economic Combined Ratio for the Award Period as a whole will be
the average (mean) of the SOAECR for each of the three Performance Periods as
determined by the Committee in its sole discretion.

 

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

 

Specialty Only Adjusted
Economic Combined Ratio for
the Award Period

 

Performance
Percentage

 

99.5% or higher

 

0

%

92.5%

 

100

%

87.5% or lower

 

200

%

 

The Specialty Only Adjusted Economic Combined Ratio for the Award Period is
calculated to the nearest one-tenth of one percent.  In the event that the
SOAECR for the Award Period is not a percentage value shown above, the
Performance Percentage shall be determined by straight-line interpolation
between the two successive SOAECR values from the table above.

 

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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 the Company’s Class A common stock (“Shares”), or partly in cash and
partly in Shares, as determined by the Committee.

 

If settled entirely or partially in cash, the cash value will be:

(a) the number of Performance Units granted, times

(b) the Performance Percentage, times

(c) the Unit Value, times

(d) the percentage of the Award settled in cash.

 

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

(a) the number of Performance Units granted, times

(b) the Performance Percentage, times

(c) the Unit Value divided by the fair market value of one Share on the date
that the Board certifies the Performance Percentage, times

d) the percentage of the Award settled in shares.

 

6.             Termination of Employment:  Except as provided in Section 7 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.

 

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 e Plan
and in this Grant. In addition, nothing herein shall obligate the Company to
make future Grants to the Participant.

 

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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 Unit 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.

 

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 are issued to you in settlement of this Award.

 

15.          Restrictions on Transfer of Units:  Units may not be sold,
transferred, pledged, exchanged, hypothecated or disposed of by you and shall
not be subject to execution, attachment or similar process.

 

16.          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.

 

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.          Entire Agreement:  This Agreement, the Plan, and the rules and
procedures adopted by the Compensation Committee, contain all of the provisions
applicable to the Grant and no other statements, documents or practices may
modify, waive or alter such provisions unless expressly set forth in writing,
signed by an authorized officer of the Company and delivered to you.

 

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20.          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.

 

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:

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<First Name> <Last Name>

 

T. Michael Miller

 

 

President and Chief Executive Officer

 

 

 

 

 

 

 

 

 

Date

 

 

 

 

 

 

 

 

Award Details:

 

 

 

 

 

2013-2015 Performance Unit Plan

 

 

<# Units> Units Granted

 

 

 

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Annex

 

Key Definitions

 

Terms used in this Grant shall have the following meanings:

 

Specialty Only Adjusted Economic Combined Ratio shall mean:

 

Reported GAAP Combined Ratio for the Specialty Only reportable segments adjusted
to include all other non-underwriting income and expense items except items
explicitly related to capital and investment activities (including tax items
related to capital and investment activities).

 

The adjustment to GAAP Combined Ratio shall be calculated as the pre tax impact
of items above divided by GAAP earned premium for the Specialty Only reportable
segments.

 

Board shall mean:

 

The Board of Directors of the Company, or the Compensation Committee of the
Board or such other committee or subcommittee that is authorized to determine
performance under the Long-Term Incentive Plan.

 

Performance Percentage shall mean:

 

a percentage of no less than 0% and no more than 200%, as determined by the
Board in its sole discretion and as outlined in paragraph four (4) of this
Performance Unit Grant.

 

Performance Period shall mean:

 

Each of the fiscal years of the Company ending December 31, 2013, 2014 and 2015,
respectively.

 

Performance Unit shall mean:

 

a performance unit granted to participant under the Company’s Long-Term
Incentive Plan having a value of $100.00 per unit for all purposes under the
Grant, conditioned upon the attainment of a specified Performance
Objective(s) over a specified Award Period.

 

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