Document:

Exhibit 10.24

OneBeacon
Long-  Term Incentive  Plan

1.            
PURPOSE

The purpose of the
OneBeacon Long-Term Incentive Plan (the “Plan”) is to advance the interests of
OneBeacon Insurance Group, Ltd. (the “Company”) and its stockholders by
providing long-term incentives to certain executives, consultants and directors
of the Company and of its subsidiaries.

2.            
ADMINISTRATION

Prior to the
initial public offering of the Company’s common shares (the “IPO”), the Plan
shall be administered by the compensation committee of the board of directors
of White Mountains Insurance Group, Ltd.  After the IPO, the Plan shall be
administered by the Compensation Committee (the “Committee”) of the Board of
Directors (the “Board”) of the Company;  provided that each member of the
Committee qualifies as (a) a “non-employee director” under Rule 16b-3 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), and (b) an “outside
director” under Section 162(m) of the Internal Revenue Code of 1986, as amended
(the “Code”).  In the event that any member of the Committee does not so
qualify, the Plan shall be administered by a sub-committee of Committee members
who do so qualify.  If it is later determined that one or more members of
the Committee do not so qualify, actions taken by the Committee prior to such
determination shall be valid despite such failure to qualify.

The Committee
shall have exclusive authority to select the employees, directors and
consultants to be granted awards under the Plan (“Awards”), to determine the
type, size and terms of the Awards and to prescribe the form of the instruments
embodying Awards.  With respect to Awards made to directors and
consultants, the Committee shall, and with respect to employees may, specify
the terms and conditions applicable to such Awards in an Award agreement. 
The Committee shall be authorized to interpret the Plan and the Awards granted
under the Plan, to establish, amend and rescind any rules and regulations
relating to the Plan and to make any other determinations which it believes
necessary or advisable for the administration of the Plan.  In connection
with any Award, the Committee in its sole discretion may provide for vesting
provisions that are different from the default vesting provisions that are
contained in the Plan and such alternative provisions shall not be deemed to
conflict with the Plan.  The Committee may correct any defect or supply
any omission or reconcile any inconsistency in the Plan or in any Award in the
manner

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and to the extent
the Committee deems desirable to carry it into effect.  Any decision of
the Committee in the administration of the Plan, as described herein, shall be
final and conclusive.  The Committee may act only by a majority of its
members in office, except that the members thereof may authorize any one or
more of their number or any officer of the Company to execute and deliver
documents on behalf of the Committee.  No member of the Company shall be
liable for anything done or omitted to be done by him or by any other member of
the Committee in connection with the Plan, except for his own willful
misconduct or as expressly provided by statute.

3.            
PARTICIPATING SUBSIDIARIES

If a subsidiary of
the Company wishes to participate in the Plan and its participation shall have
been approved by the Board, the Board of Directors of the subsidiary shall
adopt a resolution in form and substance satisfactory to the Committee
authorizing participation by the subsidiary in the Plan.  As used herein, “subsidiary”
shall mean a “subsidiary corporation” as defined in Section 424 (f) of the
Code.

A subsidiary may
cease to participate in the Plan at any time by action of the Board or by
action of the Board of Directors of such subsidiary, which latter action shall
be effective not earlier than the date of delivery to the Secretary of the
Company of a certified copy of a resolution of the subsidiary’s Board of
Directors taking such action.  Termination of participation in the Plan
shall not relieve a subsidiary of any obligations theretofore incurred by it
under the Plan.

4.            
AWARDS

(a)                                   Eligible
Participants . 
Any employee, director or consultant of the Company or any of its subsidiaries
is eligible to receive an Award hereunder.  The Committee shall select
which eligible employees, directors or consultants shall be granted Awards
hereunder.  No employee, director or consultant shall have a right to
receive an Award hereunder and the grant of an Award to an employee, director
or consultant shall not obligate the Committee to continue to grant Awards to
such employee, director or consultant in subsequent periods.

(b)                                  Type
of Awards.  Awards
shall be limited to the following five types: (i) ”Stock Options,” (ii) “Stock
Appreciation Rights,” (iii) “Restricted Stock,” (iv) “Performance Shares” and
(v) “Performance Units.”  Stock Options, which include “Incentive Stock
Options” and other stock options or combinations thereof, are rights to
purchase shares of Common Stock of the Company (“Shares”).  A Stock
Appreciation Right is a right to receive, without payment to the Company, cash
and/or Shares in lieu of

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the purchase of
Shares under the Stock Option to which the Stock Appreciation Right relates.

(c)                                  
Maximum Number of Shares That May Be
Issued.  A maximum of 3,750,000(1) Shares (subject to
adjustment as provided in Section 15) may be granted at target pursuant to
Awards made under the Plan and, accordingly, up to 7,500,000 Shares
(subject to adjustment as provided in Section 15) may be issued by the Company
in satisfaction of its obligations with respect to such Award grants.  For
purposes of the foregoing, the exercise of a Stock Appreciation Right shall constitute
the issuance of Shares equal to the Shares covered by the related Stock
Option.  If any Shares issued as Restricted Stock shall be repurchased
pursuant to the Company’s option described in Section 6 below, or if any Shares
issued under the Plan shall be reacquired pursuant to restrictions imposed at
the time of issuance, such Shares may again be issued under the Plan.

(d)                                 
Rights With Respect to Shares.

(i)                                     
A participant to whom Restricted Stock has been issued shall have prior to the
expiration of the Restricted Period or the earlier repurchase of such Shares as
herein provided, ownership of such Shares, including the right to vote the same
and to receive dividends thereon, subject, however, to the options,
restrictions and limitations imposed thereon pursuant hereto.

(ii)                                  
A participant to whom Stock Options, Stock Appreciation Rights or Performance
Shares are granted (and any person succeeding to such participant’s rights
pursuant to the Plan) shall have no rights as a shareholder with respect to any
Shares issuable pursuant thereto until the date of the issuance of a stock
certificate (whether or not delivered) therefor.  Except as provided in
Section 15, no adjustment shall be made for dividends, distributions or other
rights (whether ordinary or extraordinary, and whether in cash, securities or
other property) the record date for which is prior to the date such stock
certificate is issued.

(iii)                               
The Company, in its discretion, may hold custody during the Restricted Period
of any Shares of Restricted Stock

5.            
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS

The Committee may
grant to participants Stock Options (including, in its discretion, Stock
Appreciation Rights).  The maximum of Shares with

(1)          
Assuming 100,000,000 shares outstanding, this would represent 2.5% of total
shares outstanding at target.

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respect to which
Stock Options and Stock Appreciation Rights (not including Stock Appreciation
Rights attached to Stock Options) may be issued to a participant in one year is
2,500,000.  Each Stock Option shall comply with the following terms and
conditions:

(a)                                  
The per share exercise price shall not be less than the greater of (i) the fair
market value per Share at the time of grant, as determined in good faith by the
Committee, or (ii) the par value per Share.  However, the exercise price
of an Incentive Stock Option granted to a participant who owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or of a subsidiary (a “Ten Percent Participant”) shall not
be less than the greater of 110% of such fair market value, or the par value
per Share.

(b)                                 
The Committee shall initially determine the number of Shares to be subject to
each Stock Option.  The number of Shares subject to a Stock Option will
subsequently be reduced on a Share-for-Share basis to the extent that Shares
under such Stock Option are used to calculate the cash and/or Shares received
pursuant to exercise of a Stock Appreciation Right attached to such Stock
Option.

(c)                                  
The Stock Option shall not be transferable by the optionee otherwise than by
will or the laws of descent and distribution, and shall be exercisable during
his lifetime only by him.

(d)                                 
The Stock Option shall not be exercisable:

(i)                                     
after the expiration of ten years from the date it is granted (or such earlier
date specified in the grant of the Stock Option) and may be exercised during
such period only at such time or times as the Committee may establish;

(ii)                                  
unless payment in full is made for the Shares being acquired thereunder at the
time of exercise (including any federal, state or local income or other taxes
which the Committee determines are required to be withheld in respect of such
shares); such payment shall be made (A) in United States dollars by cash or
check, (B) by tendering to the Company Shares owned by the person exercising
the Stock Option and having a fair market value equal to the cash exercise
price thereof, such fair market value to be determined in such reasonable
manner as may be provided for from time to time by the Committee or as may be
required in order to comply with or to conform to the requirements of any
applicable or relevant laws or regulations, (C) if there shall be a public
market for the Shares at such time, subject to such rules as may be established
by the Committee, through delivery of irrevocable instructions to a broker to
sell a number of Shares otherwise deliverable upon the exercise

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of the Stock
Option and to deliver promptly to the Company an amount equal to the exercise
price, or (D) by a combination of United States dollars and Shares pursuant to
(A), (B) and/or (C) above;

(iii)                               
by participants who were employees of the Company or one of its subsidiaries at
the time of the grant of the Stock Option unless such participant has been, at
all times during the period beginning with the date of grant of the Stock
Option and ending on the date three months prior to such exercise, an officer
or employee of the Company or a subsidiary, or of a corporation, or a parent or
subsidiary of a corporation, issuing or assuming the Stock Option in a
transaction to which Section 424(a) of the Code is applicable, except that:

(A)                              
if such person shall cease to be an officer or employee of the Company or one
of its subsidiary corporations solely by reason of a period of Related
Employment as defined in Section 10, he may, during such period of Related
Employment (but in no event after the Stock Option has expired under the
provisions of Section 5(d)(i) hereof), exercise such Stock Option as if he
continued to be such an officer or employee; or

(B)                                
if an optionee shall become disabled as defined in Section 9 he may, at any
time within three years of the date he becomes disabled (but in no event after
the Stock Option has expired under the provisions of Section 5(d)(i) hereof),
exercise the Stock Option with respect to (i) any Shares as to which he could
have exercised the Stock Option on the date he became disabled and (ii) if the
Stock Option is not fully exercisable on the date he becomes disabled, the
number of additional Shares as to which the Stock Option would have become exercisable
had he remained an employee through the next date on which additional Shares
were scheduled to become exercisable under the Stock Option; or

(C)                                
if an optionee shall die while holding a Stock Option, his executors,
administrators, heirs or distributees, as the case may be, at any time within
one year after the date of such death (but in no event after the Stock Option
has expired under the provisions of Section 5(d)(i) hereof), may exercise the
Stock Option with respect to (i) any Shares as to which the decedent could have
exercised the Stock Option at the time of his death, and if the Stock Option is
not fully exercisable on the date of his death, the number of

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additional Shares
as to which the Stock Option would have become exercisable had he remained an
employee through the next date on which additional Shares were scheduled to
become exercisable under the Stock Option; provided, however, that if death
occurs during the three-year period following a disability as described in
Section 5(d)(iii)(B) hereof or any period following a voluntary termination
(including retirement) in respect of which the Committee has exercised its
discretion to grant continuing exercise rights as provided in Section
5(d)(iii)(D) hereof, the Stock Option shall not become exercisable as to any
Shares in addition to those as to which the decedent could have exercised the
Stock Option at the time of his death; or

(D)                               
if such person shall voluntarily terminate his employment with the Company
(including retirement), the Committee, in its sole discretion, may determine
that the optionee may exercise the Stock Option with respect to some or all of
the Shares subject to the Stock Option as to which it would not otherwise be
exercisable on the date of his voluntary termination provided, however, that in
no event may such exercise take place after the Stock Option has expired under
the provisions of Section 5(d)(i) hereof.

(e)                                  
The aggregate market value of Shares (determined at the time of grant of the
Stock Option pursuant to Section 5(a) of the Plan) with respect to which
Incentive Stock Options granted to any participant under the Plan are
exercisable for the first time by such participant during any calendar year may
not exceed the maximum amount permitted under Section 422(d) of the Code at the
time of the Award grant.  In the event this limitation would be exceeded
in any year, the optionee may elect either (i) to defer to a succeeding year
the date on which some or all of such Incentive Stock Options would first
become exercisable or (ii) convert some or all of such Incentive Stock Options
into non-qualified Stock Options.

(f)                                    
If the Committee, in its discretion, so determines, there may be related to the
Stock Option, either at the time of grant or by amendment, a Stock Appreciation
Right which shall be subject to such terms and conditions, not inconsistent
with the Plan, as the Committee shall impose, including the following:

(i)                                     
A Stock Appreciation Right may be exercised only:

(A)                              
to the extent that the Stock Option to which it relates is at the time
exercisable, and

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(B)                                
if

(1)                                  
in the case of a Stock Option other than an Incentive Stock Option only, such
Stock Option will expire by its terms within 30 days (90 days if the optionee
is at the time an officer of the Company who is required to file reports
pursuant to Section 16(a) of the Exchange Act);

(2)                                  
the optionee has become disabled or ceased to be an officer or employee by
reason of his retirement with the approval of the Committee in its sole
discretion; or

(3)                                  
the optionee has died.

However, if the
Stock Option to which the Stock Appreciation Right relates is exercisable and
if the optionee is at the time an officer of the Company who is required to
file reports pursuant to Section 16(a) of the Exchange Act, the Stock
Appreciation Right may, subject to the approval of the Committee, be exercised
during such periods, as may be specified by the Committee;

(ii)                                  
A Stock Appreciation Right shall entitle the optionee (or any person entitled
to act under the provisions of Section 5(d)(iii)(C) hereof) to surrender
unexercised the related Stock Option (or any portion of such Option) to the
Company and to receive from the Company in exchange therefor that number of
Shares having an aggregate market value equal to the excess of the market value
of one Share (provided that, if such value exceeds 150% of the per share
exercise price specified in such Stock Option, such value shall be deemed to be
150% of such Stock Option price) over the exercise price of such Stock Option
price per share, times the number of Shares subject to the Stock Option, or
portion thereof, which is so surrendered.  The Committee shall be entitled
to elect to settle the obligation arising out of the exercise of a Stock
Appreciation Right by the payment of cash equal to the aggregate value of the
Shares it would otherwise be obligated to deliver or partly by the payment of
cash and partly by the delivery of Shares.  Any such election shall be
made within 15 business days after the receipt by the Committee of written
notice of the exercise of the Stock Appreciation Right.  The market value
of a Share for this purpose shall be the market value thereof on the last
business day preceding the date of the election to exercise the Stock
Appreciation Right, provided that if notice of such election is

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received by the
Committee more than three business days after the date of such election (as
such date of election is stated in the notice of election), the Committee may,
but need not, determine the market value of a Share as of the day preceding the
date on which the notice of election is received;

(iii)                               
No fractional Shares shall be delivered under this Section 5(f), but in lieu
thereof a cash adjustment shall be made; and

(iv)                              
In the case of a Stock Appreciation Right attached to an Incentive Stock
Option, such Stock Appreciation Right shall only be transferable when such
Incentive Stock Option is transferable pursuant to Section 5 (c) hereof.

(g)                                 
Notwithstanding anything herein to the contrary:

(i)                                     
in the event a Change in Control as defined in Section 11(a) occurs and within
24 months thereafter: (A) there is a Termination Without Cause, as defined in
Section 12, of an optionee’s employment; or (B) there is a Constructive
Termination as defined in Section 13, of an optionee’s employment; or (C) there
occurs an Adverse Change in the Plan, as defined in Section 14, in respect of
an optionee affecting any Award held by such optionee and if the optionee then
holds a Stock Option,

(A)                              
in the case of a Termination Without Cause or a Constructive Termination, the
optionee may exercise the entire Stock Option, at any time within 30 days of
such Termination Without Cause or such Constructive Termination (but in no
event after the option has expired under the provisions of Sections (5)(d)(i)),
and

(B)                                
in the case of an Adverse Change in the Plan, the optionee may exercise the
entire Stock Option at any time after such Adverse Change in the Plan in
respect of him and prior to the date 30 days following his termination of
employment as a result of a Termination Without Cause or a Constructive
Termination (but in no event after the option has expired under the provisions
of Section 5(d) (i)).

6.            
RESTRICTED STOCK

Each Award of
Restricted Stock shall comply with the following terms and conditions:

(a)                                  
The Committee shall determine the number of Shares to be issued to a
participant pursuant to the Award.

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(b)                                 
Shares issued may not be sold, assigned, transferred, pledged, hypothecated or
otherwise disposed of, except by will or the laws of descent and distribution,
for such period from the date on which the Award is granted (the “Restricted
Period”) as the Committee shall determine.  The Company shall have the
option to repurchase the Shares subject to the Award at such price as the
Committee shall have fixed, in its sole discretion, when the Award was made,
which option will be exercisable if the participant’s continuous employment
with the Company or a subsidiary shall terminate for any reason, except solely
by reason of an event described in Section 6(c), prior to the expiration of the
Restricted Period or the earlier lapse of the option.  Such option shall
be exercisable on such terms, in such manner and during such period as shall be
determined by the Committee when the Award is made.  Certificates for
Shares issued pursuant to Restricted Stock Awards shall bear an appropriate
legend referring to the foregoing option and other restrictions.  Any
attempt to dispose of any such Shares in contravention of the foregoing option
and other restrictions shall be null and void and without effect.  If
Shares issued pursuant to a Restricted Stock Award shall be repurchased
pursuant to the option described above, the participant to whom the Award was
granted, or in the event of his death after such option become exercisable, his
executor or administrator, shall forthwith deliver to the Secretary of the
Company any certificates for the Shares awarded to the participant, accompanied
by such instruments of transfer, if any, as may reasonably be required by the
Secretary of the Company.  If the option described above is not exercised
by the Company, such option and the restriction imposed pursuant to the first
sentence of this Section 6(b) shall terminate and be of no further force and
effect.  Notwithstanding anything to the contrary in this Section 6(b),
neither any Restricted Period nor any option shall lapse to the extent the Company
or any subsidiary would be unable to take a deduction with respect to such
lapse by reason of Section 162(m) of the Code.

(c)                                  
If a participant who has been in the continuous employment of the Company or of
a subsidiary shall:

(i)                                     
die or become disabled (as defined in Section 9) during the Restricted Period,
the option of the Company to repurchase (and any and all other restrictions on)
a pro rata portion of the Shares awarded to him under such Award shall lapse
and cease to be effective as of the date on which his death or disability
occurs which shall be determined as follows: (A) the number of Shares awarded
under the Award multiplied  by (B) a percentage, the numerator of
which is equal to the number of months elapsed in the Restricted Period as of
the date of death or disability (counting the month in which the death or
disability occurred as a full month) and the denominator of which is equal to
the number of months in the Restricted Period.

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(ii)                                  
voluntarily terminate his employment with the Company (including retirement)
during the Restricted Period, the Committee may determine that all or any
portion of the option to repurchase and any and all other restrictions on some
or all of the Shares awarded to him under such Award, if such option and other
restrictions are still in effect, shall lapse and cease to be effective as the
date on which such voluntary termination or retirement occurs.

(d)                                 
In the event within 24 months after a Change in Control as defined in Section
11(a) and during the Restricted Period:

(i)                                     
there is a Termination Without Cause, as defined in Section 12, of the employment
of a participant;

(ii)                                  
there is a Constructive Termination, as defined in Section 13, of the
employment of a participant; or

(iii)                               
there occurs an Adverse Change in the Plan, as defined in Section 14, in
respect of a participant, then

the option to
repurchase (and any and all other restrictions on) all Shares awarded to him
under his Award shall lapse and cease to be effective as of the date on which
such event occurs.

7.            
PERFORMANCE SHARES

The grant of a
Performance Share Award to a participant will entitle him to receive, without
payment to the Company, all or part of a specified amount (the “Actual Value”)
determined by the Committee, if the terms and conditions specified herein and
in the Award are satisfied.  Payment in respect of an Award shall be made
as provided in Section 7(h).  Each Performance Share Award shall be
subject to the following terms and conditions:

(a)                                  
The Committee shall determine the target number of Performance Shares to be
granted to a participant.  The maximum number of Performance Shares that
may be earned by a participant for any single Award Period of one year or
longer shall not exceed 2,500,000.  Performance Share Awards may be
granted in different classes or series having different terms and conditions.

(b)                                 
The Actual Value of a Performance Share Award shall be the product of (i) the
target number of Performance Shares subject to the Performance Share Award,
(ii) the Performance Percentage (as determined below) applicable to the
Performance Share Award and (iii) the market value of a Share on the date the
Award is paid or becomes payable to the participant.  The “Performance
Percentage” applicable to a Performance Share Award

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shall be a
percentage of no less than 0% and no more than 200%, which percentage shall be
determined by the Committee based upon the extent to which the Performance
Objectives (as determined below) established for such Award are achieved during
the Award Period.  The method for determining the applicable Performance
Percentage shall also be established by the Committee.

(c)                                  
At the time each Performance Share Award is granted, the Committee shall
establish performance objectives (“Performance Objectives”) to be attained
within the Award Period as the means of determining the Performance Percentage
applicable to such Award.  The Performance Objectives shall be approved by
the Committee (i) while the outcome for that Award Period is substantially
uncertain and (ii) no more than 90 days after the commencement of the Award
Period to which the Performance Objective relates or, if less than 90 days, the
number of days which is equal to 25 percent of the relevant Award Period. 
The Performance Objectives established with respect to a Performance Share
Award shall be specific performance targets established by the Committee with
respect to one or more of the following criteria selected by the Committee: (i)
consolidated earnings before or after taxes (including earnings before
interest, taxes, depreciation and amortization); (ii) net income; (iii)
operating income; (iv) earnings per Share; (v) book value per Share; (vi)
return on stockholders’ equity; (vii) expense management; (viii) return on
investment; (ix) improvements in capital structure; (x) share price; (xi)
combined ratio; (xii) operating ratio; (xiii) profitability of an identifiable
business unit or product; (xiv) maintenance or improvement of profit margins;
(xv) market share; (xvi) revenues or sales; (xvii) costs; (xviii) cash flow;
(xix) working capital; (xx) return on assets; (xxi) customer satisfaction;
(xxii) employee satisfaction; (xxiii) economic value per Share, (xxiv) underwriting
return on capital and (xxv) underwriting return on equity.  The foregoing
criteria may relate to the Company, one or more of its subsidiaries or one or
more of its divisions, units, partnerships, joint ventures or minority
investments, product lines or products or any combination of the foregoing, and
may be applied on an absolute basis and/or be relative to one or more peer
group companies or indices, or any combination thereof, all as the Committee
shall determine.  In addition, to the degree consistent with Section
162(m) of the Code (or any successor section thereto), the Performance
Objectives may be calculated without regard to extraordinary items.

(d)                                 
The award period (the “Award Period”) in respect of any grant of a Performance
Share Award shall be such period as the Committee shall determine commencing as
of the beginning of the fiscal year of the Company in which such grant is
made.  An Award Period may contain a number of performance periods; each
performance period shall commence on or after the first day of the Award Period
and shall end no later than the last day of the Award Period.  If the
Committee does not specify in a

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Performance Share
Award agreement or elsewhere the performance periods contained in an Award
Period, each 12-month period beginning with the first day of such Award Period
shall be deemed to be a performance period.

(e)                                  
Except as otherwise determined by the Committee, Performance Shares shall be canceled
if the participant’s continuous employment with the Company or any of its
subsidiaries shall terminate for any reason prior to the end of the Award
Period, except by reason of a period of Related Employment as defined in
Section 10, and except as otherwise specified in this Section 7(e) or in
Section 7(f).  Notwithstanding the foregoing and without regard to Section
7(g), if an employee participant shall:

(i)                                     
while in such employment, die or become disabled as described in Section 9
prior to the end of an Award Period, the Performance Share Award for such Award
Period shall be immediately canceled and he, or his legal representative, as
the case may be, shall receive as soon as administratively feasible a payment in
respect of such canceled Performance Share Award equal to the product of (A)(i)
the target number of Performance Shares for such Award multiplied by (ii) a
fraction, the numerator of which is equal to the number of full or partial
months within the Award Period during which employee was continuously employed
by the Company or its subsidiaries (including, for this purpose, the month in
which the death or disability occurs), and the denominator of which is equal to
the total number of months within such Award Period, multiplied by (B)
the market value of a Share on the last day of the performance period in which
the death or disability occurred, multiplied by (C) the Performance
Percentage determined by the Board to have been achieved through the end of the
performance period in which the death or disability occurred (but which in no
event shall be less than 50%); provided, however, that no such continuation
shall be deemed to have occurred for purposes of applying Section 7(f) in the
event of an Adverse Change in the Plan in respect of the participant following
a Change in Control; or

(ii)                                  
retire with the approval of the Committee in its sole discretion prior to the
end of the Award Period, the Performance Share Award for such Award Period
shall be immediately canceled; provided that the Committee in its sole
discretion may determine to make a payment to the participant in respect of
such canceled Performance Share Award, and

(f)                                    
If within 24 months after a Change in Control as defined in Section 11(a):

(i)                                     
there is a Termination Without Cause, as defined in Section 12, of the
employment of a participant;

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(ii)                                  
there is a Constructive Termination, as defined in Section 13, of the
employment of a participant; or

(iii)                               
there occurs an Adverse Change in the Plan, as defined in Section 14, in
respect of a participant (any such occurrence under the above clauses (i), (ii)
or (iii), a “Trigger Event”), then

with respect to
Performance Share Awards that were outstanding on the date of the Trigger Event
(each, an “Applicable Award”), each such Applicable Award shall be immediately
canceled and, in respect thereof, such participant shall be entitled to receive
a cash payment equal to the product of (A) (i) the target number of Performance
Shares for such Applicable Award multiplied  by (ii) a fraction,
the numerator of which is equal to the number of full months within the Award
Period during which the participant was continuously employed by the Company or
its subsidiaries, and the denominator of which is equal to the total number of
months within such Award Period, multiplied  by (B) the greater of
(i) the market value of a Share immediately prior to the Change in Control and
(ii) the market value of a Share on the date the applicable Trigger Event
occurs, multiplied  by (C) a Performance Percentage equal to
100%.  If following a Change in Control, a Participant’s employment
remains continuous through the end of an Award Period, then the Participant
shall be paid with respect to such Awards for which he would have been paid had
there not been a Change in Control and the Actual Value shall be determined in
accordance with Section 7(g) below.

(g)                                 
Except as otherwise provided in Section 7(f), as soon as practicable after the
end of the Award Period or such earlier date as the Committee in its sole
discretion may designate, the Committee shall (i) determine, based on the
extent to which the applicable Performance Objectives have been achieved, the
Performance Percentage applicable to an Award of Performance Shares, (ii)
calculate the Actual Value of the Performance Share Award and (iii) shall
certify the foregoing to the Board of Directors.  The Committee shall
cause an amount equal to the Actual Value of the Performance Shares earned by
the participant to be paid to him or his beneficiary.

(h)                                 
Unless payment is deferred in accordance with an election made by the
participant in accordance with procedures adopted by the Company, payment of
any amount in respect of the Performance Shares 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 Performance Shares are earned, and may be made in cash, in Shares or
partly in cash and partly in Shares as determined by the Committee.

 A-13
 

 

8.            
PERFORMANCE UNITS

The grant of a
Performance Unit Award to a participant will entitle him to receive, without
payment to the Company, all or part of a specified amount (the “Earned Value”)
determined by the Committee, if the terms and conditions specified herein and
in the Award are satisfied.  Payment in respect of a Performance Unit
Award shall be made as provided in Section 8(h).  Each Performance Unit
Award shall be subject to the following terms and conditions:

(a)                                  
The Committee shall determine the target number of Performance Units to be
granted to a participant.  The maximum Earned Value that may be earned by
a participant for Performance Units for any single Award Period of one year or
longer shall not exceed $25,000,000.  Performance Unit Awards may be granted
in different classes or series having different terms and conditions.

(b)                                 
The Earned Value of an Award of Performance Units shall be the product of (i)
the target number of Performance Units subject to the Performance Unit Award, (ii)
the Performance Percentage (as determined below) applicable to the Performance
Unit Award and (iii) the Value (as determined below) of a Unit on the date the
Award is paid or becomes payable to the employee.  The “Performance
Percentage” applicable to a Performance Unit Award shall be a percentage of no
less than 0% and no more than 200%, which percentage shall be determined by the
Committee based upon the extent to which the Performance Objectives (as
determined below) established for such Award are achieved during the Award
Period.  The method for determining the applicable Performance Percentage
shall also be established by the Committee.  The “Value” of a Unit shall
be determined by multiplying $100 by the sum of (i) 100% and (ii) the aggregate
standard pre-tax insurance return-on-equity of the Company, any of its
subsidiaries or any combination thereof as set forth in the Award Agreement
over the Award Period (or such earlier date as required by the Plan), as
determined in good faith by the Committee.

(c)                                  
At the time each Performance Unit Award is granted the Committee shall
establish performance objectives (“Performance Objectives”) to be attained
within the Award Period as the means of determining the Performance Percentage
applicable to such Award.  The Performance Objectives shall be approved by
the Committee (i) while the outcome for that Award Period is substantially
uncertain and (ii) no more than 90 days after the commencement of the
performance period to which the performance objective relates or, if less than
90 days, the number of days which is equal to 25 percent of the relevant
performance period.  The Performance Objectives established with respect
to a Performance Unit Awards shall be specific performance targets established
by the Committee with respect to one or more of the following criteria selected

 A-14
 

 

by the Committee:
(i) consolidated earnings before or after taxes (including earnings before
interest, taxes, depreciation and amortization); (ii) net income; (iii)
operating income; (iv) earnings per Share; (v) book value per Share; (vi)
return on stockholders’ equity; (vii) expense management; (viii) return on
investment; (ix) improvements in capital structure; (x) share price; (xi)
combined ratio; (xii) operating ratio; (xiii) profitability of an identifiable
business unit or product; (xiv) maintenance or improvement of profit margins;
(xv) market share; (xvi) revenues or sales; (xvii) costs; (xviii) cash flow;
(xix) working capital; (xx) return on assets; (xxi) customer satisfaction;
(xxii) employee satisfaction; (xxiii) economic value per Share, (xxiv)
underwriting return on capital and (xxv) underwriting return on equity. 
 The foregoing criteria may relate to the Company, one or more of its
subsidiaries or one or more of its divisions, units, partnerships, joint
ventures or minority investments, product lines or products or any combination
of the foregoing, and may be applied on an absolute basis and/or be relative to
one or more peer group companies or indices, or any combination thereof, all as
the Committee shall determine.  In addition, to the degree consistent with
Section 162(m) of the Code (or any successor section thereto), the Performance
Objectives may be calculated without regard to extraordinary items.

(d)                                 
The award period (the “Award Period”) in respect of any grant of a Performance
Unit Award shall be such period as the Committee shall determine commencing as
of the beginning of the fiscal year of the Company in which such grant is
made.  An Award Period may contain a number of performance periods; each
performance period shall commence on or after the first day of the Award Period
and shall end no later than the last day of the Award Period.  If the
Committee does not specify in a Performance Unit Award agreement or elsewhere
the performance periods contained in an Award Period, each 12-month period
beginning with the first day of such Award Period shall be deemed to be a
performance period.

(e)                                  
Except as otherwise determined by the Committee, Performance Units shall be
cancelled if the participant’s continuous employment with the Company or any of
its subsidiaries shall terminate for any reason prior to the end of the Award Period,
except solely by reason of a period of Related Employment as defined in Section
10, and except as otherwise specified in this Section 8(e) or in Section
8(f).  Notwithstanding the foregoing and without regard to Section 8(f),
if an employee participant shall:

(i)                                     
while in such employment, die or become disabled as described in Section 9
prior to the end of an Award Period, the Performance Unit Award for such Award
Period shall be immediately canceled and he, or his legal representative, as
the case may be, shall receive as soon as administratively feasible a payment
in respect of such

 A-15
 

 

canceled
Performance Unit Award equal to the product of (A)(i) the target number of
Performance Units for such Award multiplied by (ii) a fraction, the numerator
of which is equal to the number of full or partial months within the Award
Period during which employee was continuously employed by the Company or its
subsidiaries (including, for this purpose, the month in which the death or
disability occurs), and the denominator of which is equal to the total number
of months within such Award Period, multiplied by (B) the value of a
Performance Unit on the last day of the performance period in which the death
or disability occurred, multiplied by (C) the Performance Percentage
determined by the Board to have been achieved through the end of the
performance period in which the death or disability occurred; provided,
however, that no such continuation shall be deemed to have occurred for purposes
of applying Section 8(f) in the event of an Adverse Change in the Plan in
respect of the participant following a Change in Control; or

(ii)                                  
retire with the approval of the Committee in its sole discretion prior to the
end of the Award Period, the Performance Unit Award for such Award Period shall
be immediately canceled; provided that the Committee in its sole discretion may
determine to make a payment to the participant in respect of such canceled
Performance Unit Award.

(f)                                    
If within 24 months after a Change in Control as defined in Section 11(a), a
Trigger Event occurs, then with respect to Performance Unit Awards that were
outstanding on the date of the Trigger Event (each, an “Applicable Award”),
each such Applicable Award shall be immediately canceled and, in respect
thereof, such participant shall be entitled to receive a cash payment equal to
the product of (A) (i) the target number of Performance Units for such
Applicable Award multiplied  by (ii) a fraction, the numerator of
which is equal to the number of full months within the Award Period during
which the participant was continuously employed by the Company or its
subsidiaries, and the denominator of which is equal to the total number of
months within such Award Period, multiplied  by (B) the greater of
(i) the value of a Performance Unit immediately prior to the Change in Control
and (ii) the value of Performance Unit on the date the applicable Trigger Event
occurs, multiplied  by (C) a Performance Percentage equal to
100%.  If following a Change in Control, a Participant’s employment
remains continuous through the end of an Award Period, then the Participant
shall be paid with respect to such Awards for which he would have been paid had
there not been a Change in Control and the Actual Value shall be determined in
accordance with Section 8(g) below.

 A-16
 

 

(g)                                 
Except as otherwise provided in Section 8(f), as soon as practicable after the
end of the Award Period or such earlier date as the Committee in its sole
discretion may designate, the Committee shall (i) determine, based on the
extent to which the applicable Performance Objectives have been achieved, the
Performance Percentage applicable to an Award of Performance Units, (ii)
calculate the Earned Value of the Performance Unit Award and (iii) shall
certify all of the foregoing to the Board of Directors.  The Committee
shall cause an amount equal to the Earned Value of the Performance Units earned
by the participant to be paid to him or his beneficiary.

(h)                                 
Unless payment is deferred in accordance with an election made by the
participant in accordance with procedures adopted by the Company, payment of
any amount in respect of the Performance Units 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 Performance Units are earned, and may be made in cash, in Shares or partly
in cash and partly in Shares as determined by the Committee.

9.            
DISABILITY

For the purposes
of this Plan, a participant shall be deemed to be disabled if the Committee
shall determine that the physical or mental condition of the participant is
such as would entitle him to payment of long-term disability benefits under any
disability plan of the Company or a subsidiary in which he is a participant.

10.         
RELATED EMPLOYMENT

For the purposes
of this Plan, Related Employment shall mean the employment of a participant by
an employer which is neither the Company nor a subsidiary provided: (i) such
employment is undertaken by the participant and continued at the request of the
Company or a subsidiary; (ii) immediately prior to undertaking such employment,
the participant was an officer or employee of the Company or a subsidiary, or
was engaged in Related Employment as herein defined; and (iii) such employment
is recognized by the Committee, in its sole discretion, as Related Employment
for the purposes of this Section 10.  The death or disability of a
participant during a period of Related Employment as herein defined shall be
treated, for purposes of this Plan, as if the death or onset of disability had
occurred while the participant was an officer or employee of the Company.

11.         
CHANGE IN CONTROL

(a)                                  
For purposes of this Plan, a “Change in Control” within the meaning of this
Section 11(a) shall occur if:

 A-17
 

 

(i)                                     
Any person or group (within the meaning of Section 13(d) and 14(d)(2) of the
Exchange Act), other than White Mountains Insurance Group, Ltd. or one of its
wholly owned subsidiaries, or an underwriter temporarily holding Shares in
connection with a public issuance thereof or an employee benefit plan of the
Company or its affiliates, becomes the beneficial owner (within the meaning of
Rule 13d-3 under the Exchange Act) of thirty-five percent (35%) or more of the
Company’s then outstanding Shares and such percentage exceeds the beneficial
ownership percentage of the Company’s then outstanding Shares attributed to
White Mountains Insurance Group, Ltd., together with its wholly owned
subsidiaries;

(ii)                                  
the Continuing Directors, as defined in Section 11(b), cease for any reason to
constitute a majority of the Board of the Company; or

(iii)                               
the business of the Company for which the participant’s services are
principally performed is disposed of by the Company pursuant to a sale or other
disposition of all or substantially all of the business or business-related
assets of the Company (including stock of a subsidiary of the Company).

(b)                                 
For the purposes of this Plan, “Continuing Director” shall mean a member of the
Board (A) who is not an employee of the Company or its subsidiaries or of a
holder of, or an employee or an affiliate of an entity or group that holds,
thirty-five percent (35%) or more of the Company’s Shares and (B) who either
was a member of the Board on October 18 th , 2006, or who
subsequently became a director of the Company and whose election, or nomination
for election, by the Company’s shareholders was approved by a vote of a
majority of the Continuing Directors then on the Board (which term, for
purposes of this definition, shall mean the whole Board and not any committee
thereof).

(c)                                  
In the event of a Change in Control, the Committee as constituted immediately
prior to the Change in Control shall determine the manner in which “market
value” of Shares will be determined following the Change in Control.

12.         
TERMINATION WITHOUT CAUSE

For purposes of
this Plan, “Termination Without Cause” shall mean a termination of the
participant’s employment with the Company or subsidiary or business unit of the
Company by the Company (or subsidiary or business unit, as applicable) or, by a
purchaser of the participant’s subsidiary or business unit after a Change in
Control as described in Subsection 11(a)(iii), other than (i) for death or
disability as described in Section 9 or (ii) for Cause.  “Cause” shall
mean (a) an act or omission by

 A-18
 

 

the participant
that constitutes a felony or any crime involving moral turpitude; or (b)
willful gross negligence or willful gross misconduct by the participant in
connection with his employment which causes, or is likely to cause, material
loss or damage to the Company, subsidiary or business unit. Notwithstanding
anything herein to the contrary, if the participant’s employment with the
Company, subsidiary or business unit  shall terminate due to a Change in
Control as described in Subsection 11(a)(iii), where the purchaser (the “Purchaser”),
as described in such subsection, formally assumes the Company’s obligations
under this Plan or places the participant in a similar or like plan with no
diminution of the value of the awards, such termination shall not be deemed to
be a “Termination Without Cause.”

13.         
CONSTRUCTIVE TERMINATION

“Constructive
Termination” shall mean a termination of employment with the Company or a
subsidiary at the initiative of the participant that the participant declares
by prior written notice delivered to the Secretary of the Company to be a
Constructive Termination by the Company or a subsidiary and which follows (a) a
material decrease in his total compensation opportunity or (b) a material
diminution in the authority, duties or responsibilities of his position with
the result that the participant makes a determination in good faith that he
cannot continue to carry out his job in substantially the same manner as it was
intended to be carried out immediately before such diminution. 
Notwithstanding anything herein to the contrary, Constructive Termination shall
not occur within the meaning of this Section 13 until and unless 30 days have
elapsed from the date the Company receives such written notice from the
participant without the Company curing or causing to be cured the circumstance
or circumstances described in this Section 13 on the basis of which the declaration
of Constructive Termination is given.

14.         
ADVERSE CHANGE IN THE PLAN

An “Adverse Change
in the Plan” shall mean

(a)                                  
termination of the Plan pursuant to Section 19(a);

(b)                                 
amendment of the Plan pursuant to Section 18 that materially diminishes the
value of Awards that may be granted under the Plan, either to individual
participants or in the aggregate, unless there is substituted concurrently
authority to grant long-term incentive awards of comparable value to individual
participants in the Plan or in the aggregate, as the case may be; or ,

(c)                                  
in respect of any holder of an Award a material diminution in his rights held
under such Award (except as may occur under the terms of the

 A-19
 

 

Award as
originally granted) unless there is substituted concurrently a long-term
incentive award with a value at least comparable to the loss in value
attributable to such diminution in rights.

In no event shall
any amendment of the Plan or an Award contemplated by Section 15 hereof be
deemed an Adverse Change in the Plan.

15.         
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 4, in the number
or kind of Shares subject to, or the Stock Option price per share under, any
outstanding Stock Option, in the number or kind of Shares which have been
awarded as Restricted Stock or in the repurchase option price per share
relating thereto, in the target number of Performance Shares which have been
awarded to any participant, or in any measure of performance, then such
adjustment shall be made by the Committee and shall be conclusive and binding
for all purposes of the Plan.

16.         
DESIGNATION OF BENEFICIARY BY PARTICIPANT

A participant may
name a beneficiary to receive any payment to which he may be entitled in
respect of Performance Shares, Performance Units or Stock Appreciation Rights
under the Plan in the event of his death, on a form to be provided by the
Committee.  A participant may change his beneficiary from time to time in
the same manner.  If no designated beneficiary is living on the date on
which any amount becomes payable to a participant’s executors or
administrators, the term “beneficiary” as used in the Plan shall include such
person or persons.

17.         
MISCELLANEOUS PROVISIONS

(a)                                  
No employee or other person shall have any claim or right to be granted an
Award under the Plan.  Neither the Plan nor any action taken hereunder
shall be construed as giving an employee any right to be retained in the employ
of the Company or any subsidiary.

(b)                                 
A participant’s rights and interest under the Plan may not be assigned or
transferred in whole or in part either directly or by operation of law or
otherwise (except in the event of a participant’s death), including but not
limited to, execution, levy, garnishment, attachment, pledge, bankruptcy

 A-20
 

 

or in any other
manner and no such right or interest of any participant in the Plan shall be
subject to any obligation or liability or such participant.

(c)                                  
No Shares shall be issued hereunder unless counsel for the Company shall be
satisfied that such issuance will be in compliance with applicable Federal and
state securities laws and Bermuda law.

(d)                                 
The Company and its subsidiaries shall have the right to deduct from any
payment made under the Plan any federal, state or local income or other taxes
required by law to be withheld with respect to such payment.  It shall be
a condition to the obligation of the Company to issue Shares upon exercise of a
Stock Option, upon settlement of a Stock Appreciation Right, or upon payment of
a Performance Share or a Performance Unit that the participant (or any
beneficiary or person entitled to payment under Section 5(d)(iii)(C) hereof)
pay to the Company, upon its demand, such amount as may be required by the
Company for the purpose of satisfying any liability to withhold Federal, state
or local income or other taxes.  If the amount requested is not paid, the
Company may refuse to issue Shares.

(e)                                  
The expenses of the Plan shall be borne by the Company.  However, if an
Award is made to an employee of a subsidiary:

(i)                                     
if such Award results in payment of cash to the participant, such subsidiary
shall pay to the Company an amount equal to such cash payment; and

(ii)                                  
if the Award results in the issuance to the participant of Shares, such
subsidiary shall pay to the Company an amount equal to fair market value
thereof, as determined by the Committee, on the date such Shares are issued
(or, in the case of issuance of Restricted Stock or of Shares subject to transfer
and forfeiture conditions, equal to the fair market value thereof on the date
on which such Shares are no longer subject to applicable restriction), minus
the amount, if any received by the Company in exchange for such Shares.

(f)                                    
The Plan shall be unfunded.  The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any Award under the Plan.

(g)                                 
By accepting any Award or other benefit under the Plan, each participant and
each person claiming under or through him shall be conclusively deemed to have
indicated his acceptance and ratification of, and consent to, any action taken
under the Plan by the Company, the Board or the Committee.

(h)                                 
If a Purchaser of a subsidiary or business unit agrees to fully assume the
obligations of the Company under a Participant’s outstanding Awards

 A-21
 

 

under the Plan or
to replace them with similar or like awards with no diminution of value of the
Awards as described in Section 12, then the Company shall be released from its
obligations to such Participant with respect to such Awards without the
requirement of any action by or approval of the Participant.  If a
Purchaser declines to assume or replace such obligations, the Company shall
remain obligated under the Awards as provided in the Plan.

18.         
AMENDMENT

The Plan may be
amended at any time and from time to time by the Board, but no amendment which
increases the aggregate number of Shares which may be issued pursuant to the
Plan or the class of employees eligible to participate shall be effective
unless and until the same is approved by the shareholders of the Company. 
No amendment of the Plan shall adversely affect any right of any participant
with respect to any Award previously granted without such participant’s written
consent.

19.         
TERMINATION

This Plan shall
terminate upon the earlier of the following dates or events to occur:

(a)                                  
the adoption of a resolution of the Board terminating the Plan; or

(b)                                 
ten years from the date the Plan is initially or subsequently approved and
adopted by the shareholders of the Company in accordance with Section 19
hereof.

No termination of
the Plan shall alter or impair any of the rights or obligations of any person,
without his consent, under any Award previously granted under the Plan.

 

 

 A-22Exhibit 10.25

ONEBEACON INSURANCE GROUP, LTD.

NON-QUALIFIED STOCK OPTION AGREEMENT

AGREEMENT made as of this 18th day of October, 2006, by and
between OneBeacon Insurance Group, Ltd. (“the Company”), a Bermuda company
limited by shares (“the Company”), and T. Michael Miller
(“the Optionee”).

W I T N E S S E T H :

WHEREAS, the Optionee is now employed by the Company or a
subsidiary of the Company and the Company desires to promote the interests of
the Company and its subsidiaries by providing the Optionee with incentives to
continue and increase his or her efforts with respect to, and remain in the
employ of, the Company and its subsidiaries and, as an inducement thereto, the
Company has determined to grant to the Optionee an option pursuant to the
OneBeacon Long-Term Incentive Plan (the “Plan”).

NOW, THEREFORE, it is agreed between the parties as follows:

i)  Grant of Option.  Subject to the terms and conditions hereof,
the Company hereby grants to the Optionee the right and option to purchase from
the Company up to, but not exceeding in the aggregate, 277,826
shares of the Company’s Common Shares, $­­­0.01 par value (the “Common Shares”),
at an exercise price of $30.00 per share (the “Option”).  The Option is not intended to be an incentive
stock option within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended (the “Code”).

ii)  Vesting of Right to Exercise Option.  The Optionee may purchase from the Company
the following aggregate number of shares covered by the Option on and after each
of the following dates during the term of the Option:

 

	
  Date

  	
   

  	
  Number of Shares Available

  On a Cumulative Basis

  
	
   

  	
   

  	
   

  
	
  Third
  anniversary of the date the 

  Company consummates the initial public 

  offering of its Common Shares

  	
   

  	
  One-third of all option shares, rounded

  down to the nearest whole number of 

  shares

  
	
   

  	
   

  	
   

  
	
  Fourth
  anniversary of the date the 

  Company consummates the initial public 

  offering of its Common Shares

  	
   

  	
  Two-thirds of all option shares, rounded 

  down to the nearest whole number of 

  shares

  
	
   

  	
   

  	
   

  
	
  Fifth
  anniversary of the date the Company consummates the initial public offering
  of its Common Shares

  	
   

  	
  100% of all option shares

  

 

The Option, to the extent vested, shall be exercisable in
whole at any time or in part from time to time during the term of the
Option.  The term of the Option shall be
five (5) years and six (6) months from the date the Company consummates the
initial public offering of its Common Shares or such shorter period as is
prescribed in paragraph 3. 
Notwithstanding anything in this Agreement or the Plan to the contrary,
this Option shall not be exercisable unless, on or before the sixtieth day
after the date of this award agreement, the Company consummates the initial
public offering of its Common Shares.

3.  Termination of Employment.  If at any time the Optionee’s employment with
the Company or any subsidiary shall be terminated for any reason other than
death or Disability (as described below), the Optionee shall have the right to exercise
this Option to the extent of the shares with respect to which the Option could
have been exercised by the Optionee as of the date of his or her termination of
employment in accordance with its terms but in no event beyond the earlier of
(i) three months after the date of termination of employment or
(ii) the scheduled expiration of such Option.  If the Optionee shall voluntarily terminate
his or her employment with the Company (including retirement), the Board may
determine that the Optionee may exercise his or her Option with respect to some
or all of the shares subject to the Option as to which it would not otherwise
be exercisable on the date of his or her voluntary termination; provided,
however, that in no event may the Option be exercised after the
scheduled expiration of the Option.

If an Optionee shall become Disabled, he may, at any time
within three years of the date he becomes disabled (but in no event after the
scheduled expiration date of the Option) exercise the Option with respect to (i) any
shares as to which he could have exercised the Option on the date he became
Disabled and (ii) if the Option is not fully exercisable on the date he
becomes Disabled, the number of additional shares as to which the Option would
have become exercisable had he remained an employee through the next date on
which additional shares were scheduled to become exercisable under the Option.

If an Optionee
shall die while holding an Option, his executors, administrators, heirs or
distributees, as the case may be, at any time within one year after the date of
such death (but in no event after the scheduled expiration of Option), may
exercise the Option with respect to (i) any shares as to which the
decedent could have exercised the Option at the time of his death, and
(ii) if the Option is not fully exercisable on the date of his death, the
number of additional shares as to which the Option would have become
exercisable had he remained an employee through the next date on which
additional shares were scheduled to become exercisable under the Option; provided,

however,
that if death occurs during the three-year period following a Disability, the
three-year period following a retirement or any period following a voluntary
termination in respect of which the Board has exercised its discretion to grant
continuing exercise rights, the Option shall not become exercisable as to any
shares in addition to those as to which the decedent could have exercised the
Option at the time of his death.

If an Optionee ceases to be employed by the Company or one of
its subsidiaries by reason of Related Employment, he shall not be considered to
have incurred a termination of employment for purposes of this Agreement.

4.  Exercise of Option.  The Optionee, from time to time during the
period when the Option hereby granted may by its terms be exercised, may
exercise the Option by delivering to the Company a written notice signed by the
Optionee stating the number of shares that the Optionee has elected to purchase
and the manner of payment for such shares. 
The notice shall be accompanied by payment in full by (a) cash or
check, or, (b) delivery of shares of Common Shares, duly endorsed for
transfer (or with duly executed stock powers attached), (c) Optionee’s written
request that the Company withhold a number of the Common Shares being acquired
by Optionee having a fair market value equal to the cash exercise price
thereof, such fair market value to be determined in such reasonable manner as
may be provided from time to time by the Committee or as may be required in
order to comply with or to conform to the requirements of any applicable or
relevant laws or regulations or (d) any combination of the foregoing, for an
amount equal to the purchase price of the shares then to be purchased (including
any withholding taxes as determined by the Committee).  Common Shares surrendered as payment for
shares purchased pursuant to the exercise of this Option will be valued, for
such purposes, at fair market value (as determined by the Committee) on the date
of such Option exercise.  As soon as
practicable after receipt of the foregoing, the Company shall issue the shares
in the name of the Optionee and deliver the certificates therefor to the
Optionee.

Anything to the contrary herein notwithstanding, the Company’s
obligation to sell and deliver Common Shares under this Option is subject to
such compliance with Federal and state laws, rules and regulations applying to
the authorization, issuance or sale of securities as the Company deems
necessary or advisable.  The Company
shall not be required to sell and deliver stock pursuant hereto unless and
until it receives satisfactory proof that the provisions of the Securities Act
of 1933 or the Securities Exchange Act of 1934 or the rules and regulations of
the Securities and Exchange Commission promulgated thereunder or the provisions
of any state law governing the sale of securities, or that there has been
compliance with the provisions of such acts, rules, regulations and state laws.

5.  Non-Assignability.  The Option shall not be transferable by the
Optionee other than by will or the laws of descent and distribution and may be
exercised during the Optionee’s lifetime only by the Optionee or by his or her
guardian or legal representative.  Any
transferee of the Option shall be subject to the terms and conditions of this
Agreement.  No such transfer of the
Option shall be effective to bind the Company 

unless the Company shall
have been furnished with written notice thereof and a copy of the will and/or
such other evidence as the Company may deem necessary to establish the validity
of the transfer and the acceptance by the transferee or transferees of the
terms and conditions of this Agreement. 
No assignment or transfer of this Option, or of the rights represented
thereby, whether voluntary or involuntary, by operation of law or otherwise
except a transfer by the Optionee by will or by the laws of descent and
distribution, shall vest in the purported assignee or transferee any interest
or right herein whatsoever.

6.  Disputes.  As a condition of the granting of the Option,
the Optionee and the Optionee’s successors and assigns agree that any dispute
or disagreement which shall arise under or as a result of this Agreement shall
be determined by the Committee in its sole discretion and judgment and that any
such determination and any interpretation by such Committee of the terms of
this Agreement shall be final and shall be binding and conclusive for all
purposes.

7. Dilution and
Other Adjustments.  In the event of
any change in the Outstanding Shares of the Company by reason of any stock
split, stock dividend, recapitalization, merger, consolidation, reorganization,
combination or exchange of shares or other similar event, and if the Committee
shall determine, in its sole discretion, that such change equitably requires an
adjustment in the number of shares subject to, or the Option price per share
under, any outstanding Option, which has been awarded to any participant
Optionee, then such adjustment shall be made by the Committee and shall be
conclusive and binding for all purposes of the Plan.

8.  Rights as Shareholder.  The Optionee shall have no rights as a
shareholder of the Company with respect to any of the unexercised shares until
the issuance of a stock certificate or certificates upon the exercise of the
Option in full or in part, and then only with respect to the shares represented
by such certificate or certificates.

9.  Notices.  Every notice relating to this Agree­ment
shall be in writing and if given by mail shall be given by registered or
certified mail with return receipt request­ed. 
All notices to the Company shall be delivered to the Committee or
addressed to the Compensation Committee of the Company at its offices at One
Beacon Street, Boston, Massachusetts 02108. 
All notices by the Company to the Optionee shall be delivered to the
Optionee personally or addressed to the Optionee at the Optionee’s last address
as then contained in the records of the Company or such other address as the
Optionee may designate.  Either party by
notice to the other may designate a different address to which notices shall be
addressed.  Any notice given by the
Company to the Optionee at the Optionee’s last designated address shall be
effective to bind any other person who shall acquire rights hereunder.

10.  Provisions of Plan Controlling.  The provisions hereof are subject to the
terms and conditions of the Plan.  In the
event of any conflict between the provisions of this Option and the provisions
of the Plan, the provisions of the Plan shall control.  All 

capitalized concerning
this Agreement shall have the same meaning, as in the Plan unless otherwise
defined in this Agreement.

*     *    
*     *     *

IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.

	
  

  	
   

  	
  ONEBEACON INSURANCE GROUP, LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: /s/ T. Michael Miller

  
	
   

  	
   

  	
  Name: T. Michael Miller

  
	
   

  	
   

  	
  Its: President & CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  OPTIONEE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  T. Michael Miller

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Award Information

  	
   

  	
   

  
	
  Grant Date: October 18, 2006

  	
   

  	
   

  
	
  Options awarded: 277,826

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