Employee Stock Ownership Plan

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Integrated with the 401(k) plan, the Employee Stock Ownership Plan (ESOP) allows you to participate in  OneBeacon's success through share ownership.  This plan enables employees to be owners of the company and to share in company growth and profits.  Annual contributions are fully funded by the Company, and invested in Company stock.

Eligibility

All employees (excluding interns and co-ops) are automatically enrolled in the ESOP when they are hired. Employees must be on the OneBeacon payroll on the last business day of the year to receive a contribution for that year.  

Contributions

All ESOP contributions are made by the company.  There are potentially two types of contributions: an annual fixed contribution and an additional variable contribution.

• Fixed contribution – 3% of eligible compensation (earned base salary plus overtime pay) up to the Social Security wage base ($106,800 for 2011).
• Variable contribution – 0% to 6% of eligible compensation (earned base salary plus overtime pay) up to the IRS defined compensation limit ($245,000 for 2011).

Typically both the fixed and variable contributions (if applicable) are made during the first quarter of the year following the calendar year for which a contribution is made.  The variable contribution is determined by the Board of Directors based on to what extent the company has achieved its annual financial goals.  Both the fixed and variable contributions will be made in company stock.

All employees are eligible for the fixed contribution.  Employees who participate in any long-term incentive plans are not eligible to receive a variable contribution.

Vesting and Diversification

Employees become 100% vested after three years of participation in the plan, but are always 100% vested in any ESOP dividends.  Participants may diversify their vested balance into any of the funds offered in the plan.

OneBeacon 2011 ESOP Goals

Our 2011 corporate goal is a 95% GAAP combined ratio and our potential variable ESOP awards for 2011 payable during 2012 are as follows: