Exhibit 10.1


 


AMENDMENT No. 1 TO NONQUALIFIED STOCK OPTION
AGREEMENT (this “Amendment”) made as of this 10th day of August 2010, by
and between White Mountains Insurance Group, Ltd., a Bermuda corporation
(the “Company”), and Raymond Barrette (the “Optionee”).


 


W I
T N E S S E T H :


 


WHEREAS,
the Company and the Optionee entered into a Nonqualified Stock Option Agreement
on March 6, 2007 (the “Agreement”); and


 


WHEREAS,
as described in the Company’s Proxy Statement dated March 29, 2010, the
Company’s Compensation Committee (the “Committee”) has determined to amend the
terms of the Option, including (i) extending the terms of the Option by
three years, (ii) freezing the exercise price of the Option at $742, (iii) extinguishing
75,000 of the 200,000 shares subject to the Option and (iv) limiting the
potential in-the-money value of the Option in excess of $100 million to 50% of
the amount in excess of $100 million, and the Optionee has agreed to such
amendments; and


 


WHEREAS,
the amendments to the terms of the Option were subject to approval by the
Company’s shareholders, which approval was obtained at the Company’s annual
general meeting of members held on May 26, 2010.


 


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


 


1.  Number of Shares subject to the Option.  The number of shares which the Option
provides Optionee the right and option to purchase from the Company is reduced
from 200,000 to 125,000.


 


2.  Exercise Price.  The “Applicable Exercise Price” under the
Agreement is fixed at $742 (subject to adjustment pursuant to Section 7 of
the Agreement).  For the avoidance of
doubt, Schedule I is to have no further force or effect under the Agreement.


 


3.  Term. 
The term of the Option is extended from seven years from the Grant Date
to ten years from the Grant Date and shall expire immediately thereafter.


 


4.  Vesting of Right to Exercise Option.  As of the date hereof, the Option is vested
with respect to 120,000 of the shares subject to the Option.  Subject to the original provisions of the Agreement,
the Option shall vest with respect to the remaining 5,000 shares subject to the
Option on January 20, 2011.


 


5.  Limitation on Realized In-the-Money Value.  When the aggregate realized in-the-money
value (as defined below) of the Option equals $100 million (the “Threshold”),
the number of remaining shares subject to the Option immediately and
automatically shall be reduced by fifty (50%) percent (the “Share Reduction”).  If the Threshold would be exceeded by the
full satisfaction any single Option exercise request, the exercise will be
bifurcated as necessary to permit the application of the Share Reduction.


 

















 


6.  Definitions.  Capitalized but otherwise undefined terms
used in this Amendment have the meanings given to them in the Agreement, and:


 


(a) 
“Fair Market Value” shall mean, with respect to a share as of any date, (i) the
closing per-share sales price of the shares (A) as reported by the New
York Stock Exchange for such date or (B) if the shares are listed on any
other national stock exchange, as reported on the stock exchange composite tape
for securities traded on such stock exchange for such date or, with respect to
each of clauses (A) and (B), if there were no sales on such date, on the
closest preceding date on which there were sales of shares or (ii) in the
event there shall be no public market for the shares on such date, the fair
market value of the Shares as determined in good faith by the Committee;
provided, that (x) if Optionee shall disagree with the good faith
determination of fair market value made by the Committee under this clause
(ii), and if the disagreement cannot be resolved by negotiation between
Optionee and the Committee, the parties hereto shall submit to binding
arbitration on the matter of the fair market value of the Shares before an
arbitrator mutually agreed by Optionee and the Committee, and (y) if
Optionee and the Committee cannot agree on a single arbitrator, each party
shall appoint one arbitrator experienced in complex financial matters and the
two shall jointly select a third similarly experienced arbitrator, and the
matter shall be heard by the three arbitrators; provided further, that the
Company shall bear the arbitrators’ fees and expenses; and


 


(b)   “realized in-the-money value” of the Option
means the sum of the differences, if positive, between the Fair Market Value of
each share acquired pursuant to the Option as determined on the last trading
day immediately preceding the date of exercise with respect to such share, and
the Applicable Exercise Price paid therefore.


 


7.  Continuing Agreement.  Except as specifically modified by this
Amendment, the Agreement remains in full force and effect.


 


2

















 


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


 


 


	
   

  	
  WHITE
  MOUNTAINS INSURANCE

  
	
   

  	
  GROUP, LTD.,

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  OPTIONEE,

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Raymond
  Barrette

  



 


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