Exhibit 10.20
ONEBEACON PERFORMANCE UNIT
PLAN
(as amended)
1. Purpose of the Plan. The
purpose of the Plan is to advance the interests of the Company and
its members by providing incentives in the form of Performance
Units to certain selected executives and key employees of the
Company and its Subsidiaries.
2. Definitions. The following
capitalized terms used in the Plan have the respective meanings set
forth in this Section.
(a) Actual Units. The number
of Target Units multiplied by the applicable Performance
Percentage.
(b) Actual Value. The method
for calculating the Actual Value of each Actual Unit shall be
defined within the award agreement.
(c) Adverse Change in the
Plan. The occurrence of any of the following events:
(i) termination of the
Plan;
(ii) amendment of the Plan 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 a plan or arrangement
providing for the grant of long-term incentive awards of comparable
value to individual Participants in the Plan or in the aggregate,
as the case may be; or
(iii) in respect of any holder of an
Award, a material diminution in his rights held under an Award
(except as may occur under the terms of the 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.
(d) Affiliate. In respect of
an entity or person, any entity under the control of, in control
of, or under common control with, such entity or person.
(e) Award. An award of
Performance Units granted pursuant to the Plan.
(f) Award Agreement. The
agreement between the Participant and the Company specifying the
applicable terms of an Award.
(g) Award Period. A period in
respect of any Award, commencing as of the beginning of the fiscal
year of the Company in which such Award is made. An Award Period
may contain any number of Performance Periods.
(h) Board. The Board of
Managers of the Company.
(i) Change in Control. The
occurrence of any of the following events:
(i) Any person or group (within the
meaning of Section 13(d) and 14(d)(2) of the Exchange Act), other
than John J. Byrne, Berkshire Hathaway, Inc. or one of its wholly
owned subsidiaries, an underwriter temporarily holding Parent
Shares in connection with a public issuance thereof or an employee
benefit plan of Parent 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 then outstanding Parent
Shares;
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(ii) the Continuing Directors cease
for any reason to constitute a majority of the Board of Directors
of Parent; or
(iii) Parent or the Company disposes
of the business for which the Participant’s services are
principally performed pursuant to a sale or other disposition of
all or substantially all of that business or assets of Parent or
the Company relating to that business (including stock of a
subsidiary of Parent or the Company).
(j) Code. The Internal
Revenue Code of 1986, as amended, or any successor
thereto.
(k) Committee. The Human
Resources Committee of the Board.
(l) Company. OneBeacon
Insurance Group LLC.
(m) Constructive Termination.
A termination of employment with the Company and its Affiliates 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 an Affiliate and
which follows (i) a material decrease in his salary or (ii) a
material diminution in the authority, duties or responsibilities of
his position as a result of which the Participant determines 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, a Constructive Termination shall not occur until
and unless 30 days have elapsed from the date the Company receives
such written notice from the Participant and, during that period,
the Company fails to cure, or cause to be cured, the circumstance
serving as the basis on which the declaration of Constructive
Termination is given.
(n) Continuing Director. A
member of the Board of Directors of Parent (i) who is not an
employee of Parent or its subsidiaries or of a holder of, or an
employee or an Affiliate of an entity or group that holds,
thirty-five (35%) or more of the Parent Shares and (ii) who either
was a member of the Board of Directors of Parent on December 31,
2002, or who subsequently became a director of the Parent and whose
election, or nomination for election, by Parent’s
shareholders was approved by a vote of a majority of the Continuing
Directors then on Board of Directors of Parent (which term, for
purposes of this definition, shall mean the whole Board of
Directors of Parent and not any committee thereof).
(o) Earned Payment. With
respect to each Award, the amount determined pursuant to Section
5(c) or Section 7, as applicable.
(p) Employee. Any employee of
the Company or of any Subsidiary.
(q) Exchange Act. The
Securities Exchange Act of 1934, as amended.
(r) Initial Value. The
initial value of each Actual Unit, which shall be $100 unless
otherwise specified in the applicable Award Agreement.
(s) Officer. An Employee who
is considered an officer of Parent under Rule 16a-1(f) (or any
successor rule) promulgated under the Exchange Act.
(t) Parent. White Mountains
Insurance Group, Ltd. or any successor thereto.
(u) Parent Shares. Common
Shares, par value of $1.00, of Parent.
(v) Participant. An Employee
who is selected by the Committee pursuant to Section 4 to
participate in the Plan.
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(w) Performance Goal(s). The
applicable performance measure(s) selected by the Committee to
determine the applicable Performance Percentage.
(x) Performance Percentage.
The percentage of Target Units earned by a Participant, which shall
be from 0% to 200%, based upon the level of fulfillment of the
Performance Goals(s) established with respect to an Award for an
Award Period. The method of determining the applicable Performance
Percentage shall be determined by the Committee and shall be
specified in the applicable Award Agreement.
(y) Performance Period. The
calendar year or any other period that the Committee, in its sole
discretion, may determine, provided that each Performance Period
must commence on or after the first day of the Award Period and
shall end no later than the last day of the Award
Period.
(z) Performance Units.
Notional units which represent the right to receive cash if
specified Performance Goals established by the Committee are
satisfied with respect to an Award.
(aa) Plan. This OneBeacon
Performance Unit Plan, as amended from time to time.
(bb) Qualifying Event. With
respect to a Participant, the occurrence of either (i) a
Termination Without Cause; (ii) a Constructive Termination; or
(iii) an Adverse Change in the Plan.
(cc) Subsidiary. A subsidiary
of the Company, as defined in Section 242(f) of the Code (or any
successor section thereto), or as determined by the Committee, that
in either case adopts the Plan in accordance with Section
12.
(dd) Target Units. The number
of Performance Units initially awarded to a Participant on the date
of grant with respect to an Award Period.
(ee) Termination Without
Cause. A termination of the Participant’s employment with
the Company or a subsidiary by the Company or the subsidiary other
than (i) due to the Participant’s death or total permanent
disability or (ii) for Cause. A transfer of a Participant’s
employment to an Affiliate of the Company shall not, by itself, be
considered a Termination without Cause hereunder. For this purpose,
“Cause” shall mean (a) an act or omission by the
Participant that constitutes a felony or any crime involving moral
turpitude; or (b) wilful gross negligence or wilful gross
misconduct by the Participant in connection with his employment by
the Company or by a subsidiary which causes, or is likely to cause,
material loss or damage to the Company. Notwithstanding anything
herein to the contrary, a termination of a Participant’s
employment with the Company or one of its subsidiaries due solely
to the consummation of a corporate transaction described in clause
(iii) of the definition of Change in Control shall not be deemed to
be a “Termination Without Cause” if the purchaser
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 granted.
3. Administration. The Plan
shall be administered by the Committee or such other persons or
entities designated by the Board. The Committee may delegate its
duties and powers in whole or in part to any subcommittee thereof
or to the Board of Directors of any Subsidiary. All references to
the Committee hereafter shall be deemed to be references to the
Committee and/or the applicable other persons, entities or
subcommittee(s) to whom administrative duties and/or powers
hereunder have been so delegated. The Committee shall have the
authority to select the Employees who shall be Participants, to
determine the size and terms of an Award (subject to the
limitations imposed on Awards in Section
