Exhibit 10.2

PERFORMANCE AWARD AGREEMENT

 

This Performance Award Agreement is made as of the GRANT_DATE,’MONTH DD,YYYY’
(“Date of Grant”), between ARGO GROUP INTERNATIONAL HOLDINGS, LTD. (the
"Company"), and FIRST_NAME MIDDLE_NAME LAST_NAME (the "Participant").

 

R E C I T A L S

 

A.The Company's 2014 Long-Term Incentive Plan (the "Plan") provides for the
granting of performance awards consisting of the right to receive Common Shares
of the Company.

 

B.Pursuant to the Plan, the administration of the Plan has been delegated to the
Human Resources Committee of the Board of Directors of the Company (the
"Committee").

 

C.Pursuant to the Plan, the Committee has determined that it is in the best
interest of the Company and its stockholders to make a performance restricted
share unit grant to the Participant covering a defined amount of Common Shares
(the “target grant” or “grant at target”) of the Company and has approved the
execution of this Performance Award Agreement (the “Agreement”) between the
Company and the Participant, contingent upon achievement of performance goals
and thresholds set forth in Exhibit A hereto, as an inducement to remain in the
employ of the Company and as an incentive for increased effort during such
service, and has approved the execution of this Agreement between the Company
and the Participant. The amount of the target grant may be adjusted upwards or
downwards based on the criteria set forth in Exhibit A to determine the final
amount of the award prior to vesting and issuance (the “Earned Shares”).  

 

D.All capitalized terms that are used in this Agreement and not otherwise
defined herein shall have the meanings ascribed to them in the Plan.

 

A G R E E M E N T

 

NOW, THEREFORE, the parties hereto agree as follows:

 

1.The Company hereby makes a performance restricted share unit grant to the
Participant, on the terms and conditions hereinafter set forth, in the target
grant amount of TOTAL_SHARES_GRANTED Common Shares (the “Shares”) of the
Company, subject to the achievement of the performance conditions set forth in
Exhibit A hereto.

 

2.Participant shall not be deemed vested in or to have earned the Shares and
shall not have any of the rights or privileges of a stockholder of the Company
in respect of the Shares until such Shares have vested (such Shares being
referred to as “Vested Shares”) as hereinafter provided.  Until Shares become
Vested Shares, the Company shall not issue certificates representing such
Shares.  The Earned Shares shall become Vested Shares on the [fourth]
anniversary of the Date of Grant, provided that on such date the Participant
remains an employee

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of the Company or a subsidiary corporation (as defined in Section 424(f) of the
United States Internal Revenue Code of 1986, as amended (the
“Code”)).  Dividends declared during the vesting period with respect to the
Shares can accumulate, but may only be paid to Participant at the time of
issuance of the Vested Shares and shall only be paid with respect to the Vested
Shares.

 

In the event that the Participant ceases for any reason (other than as indicated
in Section 3 or Section 4 below) to be an employee of the Company or any
subsidiary corporation of the Company prior to an indicated date for vesting,
then all Shares which had not theretofore become Vested Shares shall
automatically be forfeited and returned to the Company.  

 

3.In the event of a Change in Control, the number of Earned Shares will be
determined as set forth in Exhibit A.  Notwithstanding the vesting date set
forth in Section 2, all shares subject to this grant shall become immediately
vested if within [twenty-four (24)] months after the occurrence of a Change in
Control, Participant’s employment is involuntarily terminated by the Company or
any of its Subsidiaries for any reason other than Cause or Participant’s death
or Disability, or Participant’s voluntarily termination of his or her employment
with the Company and all Subsidiaries for Good Reason within sixty (60) days
after the occurrence of the event giving rise to such Good Reason. As used
herein, "Good Reason" shall be defined as defined in Participant's employment
agreement with the Company or any of its affiliates.  

 

4.Notwithstanding the vesting provisions set forth in Section 2 of this
Agreement, in the event that the Participant’s termination of employment is due
to death or Disability, the number of Shares earned based on the achievement of
the performance goals as set forth in Exhibit A and calculated as of the date of
termination shall become Vested Shares.  In addition, for purposes of said
Section 2, the employment of the Participant shall be deemed to continue during
any leave of absence which has been authorized by the Company, unless the
Committee makes a different or contrary determination.

 

5.No Shares shall be issued and delivered unless and until there shall have been
full compliance with all applicable requirements of the United States Securities
Act of 1933, all applicable listing requirements of any national securities
exchange on which shares of the same class are then listed and any other
requirements of law or of any regulatory bodies having jurisdiction over such
issuance and delivery.

 

6.In connection with the vesting of Shares in accordance with this Agreement, or
at any other time that the Company is required to make withholding under
applicable tax law, the Company shall have the right to require Participant or
Participant's legal successor in interest to pay the Company the amount of
taxes, if any, which the Company may be required to withhold with respect to
such Shares. The Company shall have the right, without the Participant's prior
approval or direction, to satisfy such withholding tax by withholding all or any
part of the Shares that would otherwise become Vested Shares, with any Shares so
withheld to be valued at the fair market value of the Common Share on the date
of such withholding.  Any Shares withheld to satisfy this obligation will not
exceed the minimum statutory withholding requirement.  The Participant, with the
consent of the Company, may satisfy such withholding tax (i) in cash or

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certified or cashier's check payable to the order of the Company, or (ii) by
having the Company withhold Shares that would otherwise become Vested Shares,
with any Shares so withheld to be valued at the fair market value of the Common
Share on the date of such withholding, or any combination thereof.

 

7.Shares that are the subject of this grant, and the rights and privileges
pertaining thereto, shall not be transferred, assigned, pledged or hypothecated
in any way, whether by operation of the law or otherwise, except by will or the
laws of descent and distribution; provided, that the foregoing restriction on
transfer shall cease to apply as and to the extent that the Shares become Vested
Shares.  Upon any attempt so to transfer, assign, pledge, hypothecate or
otherwise dispose of Shares contrary to the provisions hereof, this Agreement
and all rights and privileges contained herein shall immediately become null and
void and of no further force or effect.

 

8.If the outstanding common shares of the Company are increased, decreased,
changed into, or exchanged for a different number or kind of shares or
securities of the Company through reorganization, recapitalization,
reclassification, stock dividend, stock split or reverse stock split, or other
similar transaction, an appropriate and proportionate adjustment (to be
conclusively determined by the Committee) shall be made in the number and kind
of securities subject to this Agreement.

 

Upon the dissolution or liquidation of the Company, or upon a reorganization,
merger or consolidation of the Company with one or more corporations as a result
of which the Company is not the surviving corporation, or upon the sale of
substantially all the assets or more than 80% of the then outstanding stock of
the Company to another corporation, then unless express written provision is
made in connection with such transaction for the assumption of this Agreement or
the substitution therefore of a new restricted share unit award covering the
stock of a successor employer corporation, or a parent or subsidiary thereof,
with appropriate adjustments as to number and kind of securities, such
adjustments to be conclusively determined by the Committee, the Participant
shall receive a payment in cash or stock in lieu of and in complete satisfaction
of the performance restricted stock units evidenced by this Agreement.

 

Adjustments under this Section 8 shall be made by the Committee, whose
determination as to what adjustments shall be made, and the extent thereof shall
be final, binding and conclusive.  No fractional shares of stock shall be issued
under the Plan on any such adjustment.

 

9.Neither the Participant nor any other person legally entitled to the benefits
hereof shall be entitled to any of the rights or privileges of a stockholder of
the Company in respect of any of the Shares unless and until a certificate or
certificates representing such Shares shall have been actually issued and
delivered to him.

10.Confidential Information.

 

a.The Company shall disclose to the Participant, or place the Participant in a
position to have access to or develop, trade secrets or confidential information
of the Company

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or its Affiliates (as defined below); and/or shall entrust the Participant with
business opportunities of the Company or its Affiliates; and/or shall place the
Participant in a position to develop business good will on behalf of the Company
or its Affiliates.

b.The Participant acknowledges that during his employment with the Company he
occupies a position of trust and confidence and agrees that he shall treat as
confidential and shall not, without prior written authorization from the
Company, directly or indirectly, disclose or make known to any person or use for
his own benefit or gain, the methods, process or manner of accomplishing the
business undertaken by the Company or its Affiliates, or any non-public
information, plans, formulas, products, trade secrets, marketing or
merchandising strategies, or confidential material or information and
instructions, technical or otherwise, issued or published for the sole use of
the Company, or information which is disclosed to the Participant or in any
acquired by him during his employment with the Company, or any information
concerning the present or future business, processes, or methods of operation of
the Company or its Affiliates, or concerning improvement, inventions or know how
relating to the same or any part thereof, it being the intent of the Company,
with which intent the Participant hereby agrees, to restrict him from
disseminating or using for his own benefit any information belonging directly or
indirectly to the Company which is unpublished and not readily available to the
general public (collectively, “Confidential Information”).

c.The confidentiality obligations set forth in (a) and (b) of this Section 10
shall apply during the Participant’s employment by the Company and indefinitely
thereafter.

d.All information, ideas, concepts, improvements, discoveries, and inventions,
whether patentable or not, that are conceived, made, developed or acquired by
the Participant, individually or in conjunction with others, during the
Participant’s employment with the Company (whether during business hours or
otherwise and whether on the premises of the Company or an Affiliate or
otherwise) that relate to the business, products or services of the Company or
any Affiliate shall be disclosed to the Board and are and shall be the sole and
exclusive property of the Company or such Affiliate.  Moreover, all documents,
drawings, memoranda, notes, records, files, correspondence, manuals, models,
specifications, computer programs, e-mail, voice mail, electronic data bases,
maps and all other writings and materials of any type embodying any such
information, ideas, concepts, improvements, discoveries and inventions are and
shall be the sole and exclusive property of the Company.  Upon termination of
the Participant’s employment for any reason, the Participant promptly shall
deliver the same, and all copies thereof, to the Company.

e.If, during the Participant’s employment by the Company, the Participant
creates any work of authorship fixed in any tangible medium of expression that
is the subject matter of copyright (such as video tapes, written presentations,
or acquisitions, computer programs, e-mail, voice mail, electronic data bases,
drawings, maps, architectural renditions, models, manuals, brochures or the
like) relating to the Company’s business, products or services, whether such
work is created solely by the Participant or jointly with others (whether during
business hours or otherwise and whether on the Company’s premises or otherwise),
the Company shall be deemed the author of such work if the work is prepared by
the Participant in the scope of the Participant’s employment.

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11.Non-Solicitation.  

a.For the purposes of this Section, the following words have the following
meanings:

i.“Affiliate” means, with respect to any individual or a corporation,
partnership, trust, incorporated or unincorporated association, joint venture,
limited liability company, joint stock company, government (or an agency or
political subdivision thereof) or other entity of any kind (each a “person”),
any other person that directly or indirectly controls or is controlled by or
under common control with such person.  For the purposes of this definition,
“control” when used with respect to any person, means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of such person, whether through the ownership of voting securities, by
contract or otherwise; and the terms of “affiliated”, “controlling” and
“controlled” have meanings correlated to the foregoing.

ii.“Company Services” means any services (including but not limited to technical
and product support, technical advice, underwriting and customer services)
supplied by the Company or its Affiliates in the specialty property and/or
casualty insurance business.

iii.“Confidential Information” has the meaning ascribed thereto in Section 10.

iv.“Customer” means any person or firm or company or other organization
whatsoever to whom or which the Company supplied Company Services during the
Restricted Period and with whom or which, during the Restricted Period: (x) the
Participant had material personal dealings pursuant to his employment, or (y)
any employee who was under the direct or indirect supervision of the Participant
had material personal dealings pursuant to his or her employment.

v.“Prospective Customer” means any person or firm or company or other
organization whatsoever with whom or which the Company or its Affiliates shall
have had negotiations or material discussions regarding the possible
distribution, sale or supply of Company Services during the Restricted Period
and with whom or which during such period: (x) the Participant shall have had
material personal dealings pursuant to his employment, or (y) any employee who
was under the direct or indirect supervision of the Participant shall have had
material personal dealings pursuant to his or her employment, or (z) the
Participant was directly responsible in a client management capacity on behalf
of the Company.

vi. “Restricted Employee” means any person who on the date of the Participant’s
termination of employment by the Company was at the level of director, manager,
underwriter or salesperson with whom the Participant had material contact or
dealings in the course of his employment during the Restricted Period;

vii.“Restricted Period” means the period of twelve months ending on the last day
of the Participant’s employment with the Company or, in the event that no duties
were assigned to the Participant, the twelve months immediately preceding the
last day on which the Participant carried out any duties for the Company.

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viii.“Restricted Services” means Company Services or any services of the same or
of a similar kind.

b.The Participant recognizes that, while performing his duties for the Company,
he will have access to and come into contact with trade secrets and Confidential
Information belonging to the Company and its Affiliates and will obtain personal
knowledge of and influence over its or their customers and/or employees.  The
Participant therefore agrees that the restrictions set out in this Section 11
are reasonable and necessary to protect the legitimate business interests of the
Company and its Affiliates both during and after the termination of his
employment.

c.The Participant hereby undertakes with the Company that he shall not during
his employment with the Company and for the period of twelve months after he
ceases to be employed by the Company for any reason, whether the termination is
by the Company, by the Participant, due to Disability, without the prior written
consent of the Company, whether by himself, through his employers or employees
or agents or otherwise, howsoever and whether on his own behalf or on behalf of
any other person, firm, company or other organization directly or indirectly:

i.

in competition with the Company, solicit business from or endeavor to entice
away or canvass any Customer or Prospective Customer if such solicitation or
canvassing is in respect of Restricted Services;

ii.

solicit or induce or endeavor to solicit or induce any Restricted Employee to
cease working for or providing services to the Company, or hire any Restricted
Employee.

d.This Section 11 shall be for the benefit of the Company and each of its
Affiliates and the Company reserves the right to assign the benefit of such
provisions to any of its Affiliates, in addition such provisions also apply as
though there were substituted for references to “the Company” references to each
of its Affiliates in relation to which the Participant has in the course of his
duties for the Company or by reason of rendering services to or holding office
in such Affiliate: (x) acquired knowledge of its trade secrets or Confidential
Information; or (y) had material personal dealings with its Customers or
Prospective Customers; or (z) supervised directly or indirectly employees having
material personal dealings with its Customers or Prospective Customers but so
that references in this Section 11 to “the Company” shall for this purpose be
deemed to be replaced by references to the relevant Affiliate.  The obligations
undertaken by the Participant pursuant to this Section 11 shall, with respect to
each Affiliate of the Company, constitute a separate and distinct covenant and
the invalidity or unenforceability of any such covenant shall not affect the
validity or enforceability of the covenants in favor of any other Affiliate or
the Company.

e.While the restrictions in this Section 11 (on which the Participant has had
the opportunity to take independent advice, as the Participant hereby
acknowledges) are considered by the parties to be reasonable in all the
circumstances, it is agreed that if any such restrictions, by themselves, or
taken together, shall be adjudged to go beyond what is reasonable in all the
circumstances for the protection of the legitimate interests of the Company or
its Affiliates but

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would be adjudged reasonable if part or parts of the wording thereof were
deleted, the relevant restriction or restrictions shall apply with such
deletion(s) as may be necessary to make it or them valid and effective.

12.The restricted share award granted hereby is subject to, and the Company and
the Participant agree to be bound by, all of the terms and conditions of the
Company's 2014 Long-Term Incentive Plan, as the same shall be amended from time
to time in accordance with the terms thereof, but no such amendment shall
adversely affect the Participant's rights under this grant without the prior
written consent of Participant. The terms of the Plan are incorporated into and
form part of this Agreement.

 

13.

Miscellaneous.

a.No Representations or Warranties. Neither the Company nor the Committee or any
of their representatives or agents has made any representations or warranties to
the Participant with respect to the income tax or other consequences of the
transactions contemplated by this Agreement, and the Participant is in no manner
relying on the Company, the Committee or any of their representatives or agents
for an assessment of such tax or other consequences.

b.No Employment Guarantee. Nothing in this Agreement nor in the Plan nor in the
making of the Award shall confer on the Participant any right to or guarantee of
continued employment with the Company or any of its subsidiaries or in any way
limit the right of the Company or any of its subsidiaries to terminate the
employment of the Participant at any time.

c.Necessary Acts. The Participant and the Company hereby agree to perform any
further acts and to execute and deliver any documents which may be reasonably
necessary to carry out the provisions of this Agreement.

d.Section 409A.  This Agreement is intended to comply with, or be exempt from,
the applicable requirements of Section 409A of the Code and shall be limited,
construed and interpreted in accordance with such intent.  Notwithstanding any
contrary provision in this Agreement, in the event that Participant is a
“specified employee” (as defined under Section 409A of the Code), any payment(s)
of “nonqualified deferred compensation” (within the meaning of Section 409A of
the Code) that are otherwise required to be made under this Agreement as a
result of Participant’s separation from service (other than a payment that is
not subject to Section 409A of the Code) shall be delayed for the first six (6)
months following such separation from service (or, if earlier, the date of death
of Participant) and shall instead be paid upon the first business day following
the expiration of such delay period.

e.Entire Agreement.  This Agreement contains the entire understanding, and
cancels and supersedes all prior agreements, including, without limitation, any
employment agreement between the Company and the Participant relating to the
subject matter of this Agreement, and any agreement in principle or oral
statement, letter of intent, statement of understanding or guidelines of the
parties hereto with respect to the subject matter hereof.  

f.Binding Effect; Applicable Law. This Agreement shall bind and inure to the
benefit of the Company and its successors and assigns, and the Participant and
any heir, legatee, or legal

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representative of the Participant. This Agreement shall be interpreted under and
governed by and constructed in accordance with the laws of Texas.

g.Administration. The authority to manage and control the operation and
administration of this Agreement shall be vested in the Committee, and the
Committee shall have all powers with respect to this Agreement as it has with
respect to the Plan. Any interpretation of the Agreement by the Committee and
any decision made by it with respect to the Agreement are final and binding.

 

ARGO GROUP INTERNATIONAL HOLDINGS, LTD.

 

          

By  _______________________________________

      [                                                  ]

 

 

 

PARTICIPANT

 

By   _______________________________________

 

Print Name  _____________________________________

 

 

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Exhibit A

 

The Shares underlying the performance restricted share units granted pursuant to
the Agreement shall become earned over a [three-year] performance period
commencing on the Date of Grant (the “Performance Period”) based on the
Company’s attainment of certain [thirty-day] average closing stock price levels,
as provided in the payout scale set forth in the table below.

 

Average Stock Price1

% of Target Shares Earned2

 

 

 

 

 

 

 

 

 

1 The average stock price shall be measured over [thirty] consecutive trading
days.

2 There shall be no interpolation between average stock prices in the payout
scale.  The percentage of shares earned may exceed 100% to the extent set forth
in the above table.

 

Forfeiture.  Any Shares that are unearned at the end of the Performance Period
shall be forfeited.  If the closing stock price of a Common Share on the last
day of the Performance Period (or, if such day is not a trading day, on the
trading day immediately preceding such day) is less than the closing stock price
of a Common Share on the Date of Grant, then any Earned Shares shall be
forfeited.  

 

Death or Disability.  In the event of the Participant’s termination of
employment during the Performance Period due to the Participant’s death or
Disability, the Participant’s Earned Shares as of the date of termination, if
any, shall become fully vested on the date of termination, even if the closing
stock price of a Common Share on the date of termination is less that the
closing stock price of a Common Share on the Date of Grant, and any unearned
Shares shall be forfeited.

 

Changes in Capitalization.  In the event of a change to the number or kind of
shares or securities of the Company due to an event described in Section 4.2(b)
of the Plan, an appropriate and proportionate adjustment (to be conclusively
determined by the Committee) shall be made to the average stock price targets
set forth in this Exhibit A.  

 

Change in Control.  In the event of a Change in Control during the Performance
Period, the Performance Period shall end on the date of the Change in Control
and the final determination of the number of Shares that shall become earned
(over and above any Shares that have become earned prior to the date of the
Change in Control) shall be based on the per share price to be paid in respect
of a Common Share in connection with the Change in Control, as determined by the
Committee (the “Change in Control Price”), rather than the [thirty-day] average
closing stock price of a Common Share; provided, that no Shares shall become
earned unless the Change in Control Price is equal to or greater than the
closing stock price of a Common Share on the Date of Grant.  Any Earned Shares
shall be converted into time-based restricted shares and shall vest in
accordance with Section 2 of the Agreement, subject to the accelerated vesting
provisions set forth in Section 3 of the Agreement.  Any unearned Shares as of
the date of the Change in Control shall be forfeited on such date.

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