Exhibit 10.2
OneBeacon Insurance Group, Ltd.
Long-Term Incentive Plan
Form of 2009-2011 Performance Unit
Grant
THIS GRANT (this
“Grant”) is made, effective as of February 24,
2009, between OneBeacon Insurance Group, Ltd., a Bermuda company
(the “Company”) and <First NAME> <Last
NAME> (the “Participant”).
RECITALS:
WHEREAS, the Company has adopted the
Long-Term Incentive Plan (“Plan”), which Plan is
incorporated herein by reference and made part of this Grant;
and
WHEREAS, the Board has determined
that it would be in the best interest of the Company and its owners
to grant the award provided for herein to the Participant pursuant
to the Plan and the terms set forth herein.
NOW THEREFORE, for good and valuable
consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1.
Grant : Subject to the terms and conditions of
the Plan and the additional terms and conditions set forth in this
Grant, the Company hereby grants to the Participant a Performance
Unit Award of <# Of UNITS> units. The value of
one Unit shall be fixed at $100.00 (the “Unit Value”)
for all purposes under this Grant.
2.
Award Period:
The Award Period shall be
January 1, 2009 through December 31, 2011.
3.
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”) of 95% 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 Adjusted
Economic Combined Ratio for each of the three Performance Periods
as determined by the Board in its sole discretion.
4.
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:
|
Adjusted Economic
Combined Ratio for the
Award Period
|
|
Performance
Percentage
|
|
99% or higher
|
|
0%
|
|
98%
|
|
35%
|
|
97%
|
|
65%
|
|
96%
|
|
85%
|
|
95%
|
|
100%
|
|
94%
|
|
115%
|
|
93%
|
|
135%
|
|
92%
|
|
165%
|
|
91% or lower
|
|
200%
|
The Adjusted Economic Combined Ratio for the
Award Period is calculated to the nearest one-tenth of one
percent. In the event that the Adjusted Economic Combined
Ratio for the Award Period is not a whole percentage value, the
Performance Percentage shall be determined by straight-line
interpolation between the two successive whole Adjusted Economic
Combined Ratio values from the table above.
5.
Award Payment:
Subject to all terms and
conditions of the Plan, the Participant’s actual value at the
end of the Award Period will be settled in cash, in the
Company’s Class A common stock (“Shares”),
or partly in cash and partly in Shares, as determined by the
Committee.
If settled entirely or partially in cash, the
cash value will be:
(a) the number of Performance Units
granted, times
(b) the Performance Percentage,
times
(c) the Unit Value, times
(d) the percentage of the Award settled in
cash.
If settled entirely or partially in Shares, the
number of Shares issued will be:
(a) the number of Performance Units
granted, times
(b) the Performance Percentage,
times
(c) the Unit Value divided by the fair
market value of one Share on the date that the Board certifies the
Performance Percentage, times
d) the percentage of the Award settled in
shares.
6.
Termination of
Employment : Except
as provided in Section 6 of the Plan, this Award shall be
canceled, and no payment shall be payable hereunder, if the
Participant’s continuous employment or Related Employment
with the Company shall terminate for any reason prior to the end of
the Award Period.
7.
Successors and Assigns
: This Grant shall inure to
the benefit of and be binding upon the Company and its successors
and assigns. The Company shall request any purchaser of a
business unit in which the Participant is employed (a
“Purchaser”), to fully assume the obligations of the
Company under this Grant. If a Purchaser declines to assume
such obligations, the Company shall remain obligated under the
terms of this Grant.
8.
Definitions:
All terms not otherwise
defined herein shall have the same meaning as in the
Plan.
9.
Withholding
: The Participant agrees to
make appropriate arrangements with the
Company for satisfaction of any applicable
income tax withholding requirements, including the payment to the
Company, at the termination of the Award Period (or such earlier or
later date as may be applicable under the Code), of all such taxes
and other amounts, and the Company shall be authorized to take such
action as may be necessary, in the opinion of the Company’s
counsel (including, without limitation, withholding amounts from
any compensation or other amount owing from the Company to the
Participant), to satisfy all obligations for t
