Exhibit 10.1


 


OneBeacon Insurance Group, Ltd.


Long-Term Incentive Plan


Form of 2009-2011 Performance Share Grant


 


THIS
GRANT (this “Grant”) is made, effective as of February 24, 2009, 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, 2009 through December 31, 2011.


 


3.             Performance Objective:  The
Performance Objective shall be annual 12% Growth in Book Value per Common Share
(GBVPS) including an adjustment for dividends paid.).


 


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

  	
   

  
	
  5% or lower

  	
   

  	
  0%

  	
   

  
	
  12%

  	
   

  	
  100%

  	
   

  
	
  19% or higher

  	
   

  	
  200%

  	
   

  






 


For
GBVPS between 5% and 19%, 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;


 


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.


 


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.


 

















 


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:

  	
  

  
	
  <First
  Name> <Last Name>

  	
   

  	
   

  	
  Name:

  	
  Mike Miller

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President &
  CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
   

  
						



 


 


Award Details:


 


2009 — 2011 Performance Share Plan


<# Shares> Shares Granted


 

















 


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, plus (b) the
per share equivalent of Dividends Paid included in the calculation of Growth in
Book Value per Common Share.


 


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
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.