Exhibit 10.23


 


ONEBEACON’S 2009 MANAGEMENT INCENTIVE PLAN


 


Purpose


The Management Incentive
Plan (MIP) is an integral part of the total compensation program for managers
and certain senior key individual contributors. Its primary purpose is to focus
attention on 2009 profitability goals and to reward eligible participants for
the achievement of those goals.


 


Eligibility


The Plan is
limited to home office and field office senior staff who have a significant
impact on OneBeacon’s operating results.


 


Target Awards


Target awards for
all participants are expressed as a percent of salary.


 


Performance Measures


The Corporate
MIP pool will be established based upon achievement of a 95% GAAP combined
ratio for total OneBeacon operations. At a corporate combined ratio of 95%, the plan will
fund an amount equal the sum of each of the plan’s participant’s potential
award at their target bonus percentage. The OneBeacon Insurance Group, Ltd. Compensation
Committee (the “Compensation Committee”) may adjust the size of the pool based
on under or over achievement of the company’s target combined ratio and other objectives
at its sole discretion.


 


Individual
Awards


Each
business unit will be judged against a number of metrics including, where
appropriate, a combined ratio target, agreed to in advance with the
President of OneBeacon.  Generally these
targets will relate to the aggregate financial plan rolled up by branch and
line of business, but the targets will not always match the plan (in many
cases, the targets are more aggressive). If the combined ratio target is
achieved, in conjunction with other business metrics, the business may be
awarded 100% of its indicated share of the corporate pool. Businesses failing
to reach target may or may not, at the discretion of the President, receive a
reduced, partial allocation of the pool. Businesses exceeding objectives may
receive greater than 100% of indicated allocation.  In no event will the sum of the performance
adjusted business unit pools be greater than the performance adjusted company
pool as authorized by the Compensation Committee.


 


Within
each business, it will be the prerogative of the business leader, with guidance
from and after consultation with the company President, to further allocate the
business’ pool amount to the constituent branches, lines of business and
individuals, based upon performance against targets established within the business.
It will be the responsibility of the business leader, with guidance from the President,
to establish appropriate targets for the constituent branches, lines of
business, departments, or individuals at the outset of the MIP year.


 


For
corporate or administrative functions that support all or multiple regions or businesses,
MIP individuals will receive allocations from the corporate pool based upon
attainment of their department and individual MIP goals for 2009.


 


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The salary used to
determine the amount of the individual awards will be that in effect at the end
of the plan year (12/31/09).


 


Plan Participation for New Hires


Employees hired
during the plan year are eligible to participate in the MIP.  Awards will be pro-rated specifically based
on date of hire.


 


Payment of Awards


Unless payment is deferred in accordance with an election made by the
participant in accordance with procedures adopted by OneBeacon Insurance
Company, payment of any MIP award 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 MIP award
is earned, but in any event not prior to the Compensation Committee’s review
and evaluation of performance results following the end of the plan year.  In all cases, no payment
will be made until the Compensation Committee approves the overall corporate
performance factor and performance adjusted MIP pool and no payment will be
made to the CEO or any of the other executive officers without specific
approval from the Committee.


 


Special
Circumstances


The Compensation
Committee may, in its sole discretion, also recognize extraordinary conditions
or circumstances in determining payment levels.


 


In the event of
termination prior to the payment of awards, no incentive payments will be
made.  However, in the event of retirement
or reduction in force at or after the end of the plan year, but before payment
is made, incentive payments may be made if approved by the senior business
leader. Payment shall be contingent upon the participant signing a OneBeacon
Agreement and Release as consideration for all incentive payments. No participant
who was terminated prior to the payment of awards due to a reduction in force
may be considered for an incentive payment unless the participant also signed
the Agreement and Release provided to the participant at the time of
termination within the time period specified in the Agreement and Release. For
purposes of the plan, “retirement” shall mean termination of service with the
company, other than for cause, at any time after attaining age sixty (60) or
termination of service under circumstances which the Committee deems equivalent
to retirement. These exceptions will be made on a case by case basis. In the
event of death or disability, the plan participant or beneficiary may be
considered for a partial award payment if approved by the senior business
leader.


 


In no way does
eligibility in this plan imply an obligation of payment on the part of
OneBeacon nor should it be construed as a promise of continued employment.


 


Effect on Benefit Plans


Amounts paid under the terms of
this plan will not be counted for purposes of determining compensation under
any employee benefit plan sponsored by OneBeacon.


 


Plan
Continuation


Notwithstanding any of the aforementioned, the plan may be amended or
terminated, in whole or in part, at any time, by the Compensation Committee.


 


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