Document:

Exhibit

Exhibit 10.2

OneBeacon Insurance Group, Ltd.
Long-Term Incentive Plan
2016-2018 Performance Unit Grant

THIS GRANT (this “Grant”) is made, effective as of February 24, 2016, between OneBeacon Insurance Group, Ltd., a Bermuda company (the "Company") and <First NAME> <Last NAME> (the "Participant").
RECITALS:

WHEREAS, the Board of Directors of the Company has adopted the OneBeacon Long-Term Incentive Plan (2007), as amended (the “Plan”), which Plan is incorporated herein by reference and made part of this Grant; and
 
WHEREAS, the Performance Compensation Subcommittee of the Compensation Committee of the Board of Directors (the “Committee”) has determined that it would be in the best interests of the Company to grant the performance unit 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.Definitions. Capitalized terms not defined in the body of this Grant have the meanings ascribed to them in the Annex attached hereto and incorporated by reference. Capitalized terms not defined in the body of this Grant or in the Annex have the meanings ascribed to them in the Plan.

2.Grant of Performance Units. Pursuant to Section 7 of the Plan, the Company hereby grants to the Participant a Performance Unit Award (the “Award”) of <# Of UNITS> units (the “Units”) in consideration of services to be rendered by Participant to the Company. The value of one Unit shall be fixed at $100.00 (the “Unit Value”) for all purposes under this Grant.

3.Vesting. Except as otherwise provided herein, provided that the Participant has remained continuously employed through the applicable Vesting Date, the Units will vest on December 31, 2018 (the “Vesting Date”).

4.Award Period. The Award Period shall be January 1, 2016 through December 31, 2018.

5.Performance Objective. The Performance Objective applicable to this Award shall be an Adjusted Economic Combined Ratio for the Company and its subsidiaries (the “Adjusted Economic Combined Ratio” or “AECR”) of 95.8% for the Award Period as a whole. The Adjusted Economic Combined Ratio for the Award Period as a whole will be the average (mean) of the AECR for each of the three Performance Periods as determined by the Committee in its sole discretion.

6.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:
	
		
	Average Adjusted Economic Combined Ratio for the Award Period
	Performance Percentage

	90.8% or lower
	200%

	95.8%
	100%

	100.8% or higher
	0%

    

Exhibit 10.2

The AECR for the Award Period is calculated to the nearest one-tenth of one percent. In the event that the AECR 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 AECR values from the table above.

7.Award Payment. Subject to all terms and conditions of the Plan and to Participant’s compliance with Section 10 of this Agreement, the Participant’s Actual Value at the end of the Award Period will be settled in cash, in the Company’s Class A common shares (“Shares”), or partly in cash and partly in Shares, as determined by the Committee.

a.To the extent settled in cash, the cash value will be:

		
	i.
	the number of Units granted, times 

		
	ii.
	the Performance Percentage, times 

		
	iii.
	the Unit Value, times 

		
	iv.
	the percentage of the Award settled in cash.

b.To the extent settled in Shares, the number of Shares issued will be:

		
	i.
	the number of Units granted, times 

		
	ii.
	the Performance Percentage, times

		
	iii.
	the Unit Value divided by the fair market value of one Share on the date that the Board certified the Performance Percentage; times

		
	iv.
	the percentage of the Award settled in Shares.

8.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.

9.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.

10.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, including cash or Shares payable in settlement of this Award, or other amount owing from the Company to the Participant), to satisfy all obligations for the payment of such taxes and other amounts.

11.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.

12.Clawback Policy. Amounts paid pursuant to this Grant are subject to clawback by the Company pursuant to the Clawback Policy adopted by the Board of Directors of the Company on June 16, 2010.  The Clawback Policy provides that, in the event of a restatement of the financial statements of the Company for failure to comply with the federal securities laws due to misconduct of the Participant, the Board of Directors of the Company may require the Participant to reimburse the Company for all or a portion 

    

Exhibit 10.2

of his or her Award; provided, however, that in the event of fraud, the Participant shall reimburse the Company for all of his or her Award.

13.Securities Laws. If any portion of this Award is settled in Shares, at the termination of the Award Period, the Participant will make or enter into such written representations, warranties and agreements as the Committee may reasonably request in order to comply with applicable securities laws and with this Agreement.

14.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.

15.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 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.

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.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.

18.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. 

19.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.
20.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.
21.Governing Law. This Agreement shall be governed by and construed in accordance with the laws of Bermuda.
22.Entire Agreement. This Agreement, the Plan, and the rules and procedures adopted by the 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.

    

Exhibit 10.2

23.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                
                
                            
By:  _____________________            
 
  <First Name><Last Name>
                    
    _____________________
    Date

ONEBEACON INSURANCE GROUP, LTD

By:    /s/    T. Michael Miller

T. Michael Miller
President and Chief Executive Officer

Award Details:

2016-2018 Performance Unit Plan
<# Units> Units Granted

    

Exhibit 10.2

Annex

Key Definitions

Terms used in this Grant shall have the following meanings:

Adjusted Economic Combined Ratio shall mean:  

Reported GAAP Combined Ratio for the underwriting reportable segments (currently defined as the summation of the Specialty Industries and Specialty Products reportable segments, to be adjusted to include any additional underwriting reportable segments in the future) 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 pretax impact of items above divided by GAAP earned premium for the underwriting reportable segments.

Board shall mean:

The Board of Directors of the Company, or the 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 6 of this Performance Unit Grant. 

Performance Period shall mean:

Each of the fiscal years of the Company ending December 31, 2016, 2017 and 2018, 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.Exhibit

Exhibit 10.3

OneBeacon Insurance Group, Ltd.
Long-Term Incentive Plan
2016 Special Restricted Share Award Agreement

THIS AGREEMENT (this "Agreement") is made effective as of the 24th day of February, 2016, between OneBeacon Insurance Group, Ltd. (the "Company") and <First><Last> (the "Participant").

RECITALS:

WHEREAS, the Board of Directors of the Company has adopted the OneBeacon Long-Term Incentive Plan (2007), as amended (the "Plan"), which Plan is incorporated herein by reference and made part of this Agreement; and 

WHEREAS, the Performance Compensation Subcommittee of the Compensation Committee of the Board of Directors (the "Committee") has determined that it would be in the best interests of the Company to grant this award of restricted shares of the Company’s Class A Common Shares, par value $.01 per share (the “Restricted Shares”) to the Participant pursuant to the Plan and the terms set forth herein.

NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties hereto agree as follows:

1.Grant of the Restricted Shares. Pursuant to Section 5 of the Plan, the Company hereby grants to the Participant a Restricted Share Award (this “Award”) consisting of, in the aggregate, <grant> Restricted Shares, in consideration for services to be rendered by the Participant to the Company. The Restricted Shares shall be subject to the Company's option to repurchase such shares, in accordance with the provisions of Section 2 hereof. Capitalized terms used but not defined in this Restricted Share Award Agreement are defined in the Plan.

2.Vesting.
(a)Except as otherwise provided herein, provided that the Participant has remained continuously employed through the applicable Vesting Date, the Restricted Shares will vest and no longer be subject to restriction or potential forfeiture on February 24, 2018 (the “Vesting Date”) (the period during which restrictions apply, the “Restricted Period”).
(b)Subject to any exceptions set forth in this Agreement or the Plan, during the Restricted Period, unvested Restricted Shares may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of or encumbered by the Participant, except by will or the laws of descent and distribution.
3.Repurchase Option. Except as otherwise set forth herein or in the Plan, the Participant shall forfeit, and the Company shall have the option to repurchase unvested Restricted Shares, in accordance with Section 5(b) of the Plan, during the Restricted Period at a price equal to $.001 per Restricted Share, in the event that the Participant's continuous employment with the Company or any of its subsidiaries is terminated.  The Company may exercise such option at any time within 90 days of such termination of employment by providing written notice to the Participant and payment in full of the purchase price.
4.Vesting in the Event of Termination Without Cause.  If the Participant has been in the continuous employment of the Company or a subsidiary of the Company and such Participant’s 

Exhibit 10.3

employment with the Company is Terminated Without Cause during the Restricted Period, then the Company’s option to repurchase (and any and all other restrictions on) unvested Restricted Shares shall lapse and cease to be effective as of the date of such Termination Without Cause. For the avoidance of doubt, Sections 5(b)(iii) and (iv) of the Plan shall also apply to this Agreement.
5.Book Entry.  The Restricted Shares shall be registered in the Participant's name in book entry form on the share transfer books of the Company promptly after the date hereof. 
6.Rights as a Shareholder.  The Participant shall be the record owner of the Restricted Shares until and unless such Restricted Shares are sold to the Company pursuant to Section 3 hereof and as record owner shall be entitled to all rights of a common shareholder of the Company, including the right to vote the Restricted Shares and receive dividends thereon. As soon as practicable following the end of the Restricted Period, the Company shall, on or about such date(s), deliver to the Participant evidence of ownership in book entry form of the number of Shares set forth opposite such date.
7.Legend.  The Restricted Shares shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations, and other requirements of the Securities and Exchange Commission, any share exchange upon which such Shares are listed, and any applicable federal, state or foreign laws, and the Committee may cause an appropriate reference to such restrictions to be made in the Company’s share transfer books or on any certificate that may be issued to evidence the Restricted Shares.
8.Withholding.  The Participant agrees to make appropriate arrangements with the Company for satisfaction of any applicable income tax withholding requirements or like requirements, including the payment to the Company, at the termination of the Restricted Period (or such earlier date as may be applicable, including if an election has been made under Section 83(b) of the Internal Revenue 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 Restricted Shares otherwise deliverable to Participant hereunder and/or, subject to applicable law, 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.  The Participant may make and file with the Internal Revenue Service an election under Section 83(b) of the Code within 30 days of the the grant of the Restricted Shares, electing to include in the Participant’s gross income as of the grant date of the Award the fair market value of the Restricted Shares as of such grant date.  The Participant shall promptly provide a copy of such election to the Company.
9.Clawback Policy.  Amounts paid pursuant to this Agreement are subject to clawback by OneBeacon pursuant to the Clawback Policy adopted by the Board of Directors of the Company on June 16, 2010.  The Clawback Policy provides that, in the event of a restatement of the financial statements of the Company for failure to comply with the federal securities laws due to misconduct of the Participant, the Board of Directors of the Company may require the Participant to reimburse the Company for all or a portion of his or her Award; provided, however, that in the event of fraud, the Participant shall reimburse the Company for all of his or her Award.
10.Securities Laws.  At the termination of the Restricted Period, the Participant will make or enter into such written representations, warranties and agreements as the Committee may reasonably request in order to comply with applicable securities laws and with this Agreement.
11.No Right to Continued Employment.  Neither the Plan nor this Agreement 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 or any of its subsidiaries may at any time dismiss the Participant or discontinue any consulting relationship, free from any liability 

    

Exhibit 10.3

or any claim under the Plan or this Agreement, except as otherwise expressly provided herein in this Agreement or the Plan. In additional, nothing herein shall obligate the Company to make future awards to the Participant.
12.Award Subject to Plan.  By entering into this Agreement, 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 Agreement and that this Award is subject to all of the terms and provisions set forth in the Plan and in this Agreement and accepts this Award subject to all such terms and conditions which are incorporated herein by reference, including, but not limited to, the requirement to execute a Confidentiality and Nonsolicitation Agreement.  In the event of a conflict between any term or provision contained in this Agreement and a terms or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail. 
13.Successors and Assigns.  This Award 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 (the “Purchaser”) to fully assume the obligations of the Company under this Award.  If a Purchaser declines to assume such obligations, the Company shall remain obligated under the terms of this Award.
14.Notice.  Any notice necessary under this Award shall be addressed to the Corporate Secretary of the Company at the Company’s principal executive offices 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. 
15.Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of Bermuda.
16. Entire Agreement.  This Agreement, the Plan, and the rules and procedures adopted by the Committee, contain all of the provisions applicable to the Award 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 Participant.
17.Signature in Counterparts.  This Agreement 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 Agreement.

             OneBeacon Insurance Group, Ltd. 
            
		
	By:__________________________________
	By:     /s/  T. Michael Miller 

		
	     <first><last>
	T. Michael Miller

President and Chief Executive Officer

    

Exhibit 10.3

Date:_______________________

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