Exhibit 4.6


 


ONEBEACON 401(k)

SAVINGS PLAN


Amended and Restated

Effective as of January 1, 2006
















ONEBEACON 401(k)

SAVINGS PLAN


TABLE OF CONTENTS


	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE 1 - NAME AND PURPOSE

  	
   

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.1

  	
   

  	
  Name of Plan

  	
   

  	
  2

  
	
  1.2

  	
   

  	
  Purpose

  	
   

  	
  2

  
	
  1.3

  	
   

  	
  Effective Date

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2 -
  DEFINITIONS

  	
   

  	
  2

  
	
   

  	
   

  	
   

  
	
  2.1

  	
   

  	
  “Account”

  	
   

  	
  2

  
	
  2.2

  	
   

  	
  “Administrator”

  	
   

  	
  2

  
	
  2.3

  	
   

  	
  “Affiliated Employer”

  	
   

  	
  2

  
	
  2.4

  	
   

  	
  “After-Tax Contributions”

  	
   

  	
  2

  
	
  2.5

  	
   

  	
  “After-Tax Contributions
  Account”

  	
   

  	
  3

  
	
  2.6

  	
   

  	
  “Beneficiary”

  	
   

  	
  3

  
	
  2.7

  	
   

  	
  “Board”

  	
   

  	
  3

  
	
  2.8

  	
   

  	
  “Break in Service”

  	
   

  	
  3

  
	
  2.9

  	
   

  	
  “Code”

  	
   

  	
  3

  
	
  2.10

  	
   

  	
  “Commercial Union Plan”

  	
   

  	
  3

  
	
  2.11

  	
   

  	
  “Compensation”

  	
   

  	
  3

  
	
  2.12

  	
   

  	
  “Computation Period”

  	
   

  	
  4

  
	
  2.13

  	
   

  	
  “Disability Retirement”

  	
   

  	
  4

  
	
  2.14

  	
   

  	
  “Elapsed Time Transition
  Date”

  	
   

  	
  4

  
	
  2.15

  	
   

  	
  “Eligible Employee”

  	
   

  	
  4

  
	
  2.16

  	
   

  	
  “Employee”

  	
   

  	
  4

  
	
  2.17

  	
   

  	
  “Employer”

  	
   

  	
  4

  
	
  2.18

  	
   

  	
  “Employer Matching
  Contributions”

  	
   

  	
  4

  
	
  2.19

  	
   

  	
  “Employment Commencement
  Date”

  	
   

  	
  4

  
	
  2.20

  	
   

  	
  “ERISA”

  	
   

  	
  4

  
	
  2.21

  	
   

  	
  “Forfeiture Account”

  	
   

  	
  4

  
	
  2.22

  	
   

  	
  “Former Participant”

  	
   

  	
  5

  
	
  2.23

  	
   

  	
  “Highly Compensated
  Employee”

  	
   

  	
  5

  
	
  2.24

  	
   

  	
  “Hour of Service”

  	
   

  	
  5

  
	
  2.25

  	
   

  	
  “IPO Date”

  	
   

  	
  6

  
	
  2.26

  	
   

  	
  “Late Retirement”

  	
   

  	
  7

  
	
  2.27

  	
   

  	
  “Leased Employee”

  	
   

  	
  7

  
	
  2.28

  	
   

  	
  “Leave of Absence”

  	
   

  	
  7

  
	
  2.29

  	
   

  	
  “Matching Contributions
  Account”

  	
   

  	
  7

  
	
  2.30

  	
   

  	
  “Normal Retirement”

  	
   

  	
  7

  
	
  2.31

  	
   

  	
  “Normal Retirement Date”

  	
   

  	
  7

  
	
  2.32

  	
   

  	
  “OneBeacon Stock”

  	
   

  	
  7

  
	
  2.33

  	
   

  	
  “OneBeacon Stock Fund”

  	
   

  	
  7

  
	
  2.34

  	
   

  	
  “Participant”

  	
   

  	
  8

  
	
  2.35

  	
   

  	
  “Participating Employer”

  	
   

  	
  8

  
	
  2.36

  	
   

  	
  “Period of Service”

  	
   

  	
  8

  
	
  2.37

  	
   

  	
  “Period of Severance”

  	
   

  	
  9

  
	
  2.38

  	
   

  	
  “Plan”

  	
   

  	
  9

  



 









 



 


	
  2.39

  	
   

  	
  “Plan Year”

  	
   

  	
  10

  
	
  2.40

  	
   

  	
  “Reemployment Date”

  	
   

  	
  10

  
	
  2.41

  	
   

  	
  “Regulation”

  	
   

  	
  10

  
	
  2.42

  	
   

  	
  “Retirement”

  	
   

  	
  10

  
	
  2.43

  	
   

  	
  “Rollover Contribution”

  	
   

  	
  10

  
	
  2.44

  	
   

  	
  “Rollover Contribution
  Account”

  	
   

  	
  10

  
	
  2.45

  	
   

  	
  “Salary Deferral
  Contributions”

  	
   

  	
  10

  
	
  2.46

  	
   

  	
  “Salary Deferral
  Contributions Account”

  	
   

  	
  10

  
	
  2.47

  	
   

  	
  “Severance from Service
  Date”

  	
   

  	
  10

  
	
  2.48

  	
   

  	
  “Testing Compensation”

  	
   

  	
  10

  
	
  2.49

  	
   

  	
  “Totally and Permanently
  Disabled”

  	
   

  	
  11

  
	
  2.50

  	
   

  	
  “Transfer Account”

  	
   

  	
  11

  
	
  2.51

  	
   

  	
  “Trust”

  	
   

  	
  11

  
	
  2.52

  	
   

  	
  “Trust Agreement”

  	
   

  	
  11

  
	
  2.53

  	
   

  	
  “Trust Fund”

  	
   

  	
  11

  
	
  2.54

  	
   

  	
  “Trustee”

  	
   

  	
  11

  
	
  2.55

  	
   

  	
  “Valuation Date”

  	
   

  	
  11

  
	
  2.56

  	
   

  	
  “White Mountains Account”

  	
   

  	
  11

  
	
  2.57

  	
   

  	
  “White Mountains Stock”

  	
   

  	
  11

  
	
  2.58

  	
   

  	
  “White Mountains Stock
  Fund”

  	
   

  	
  11

  
	
  2.59

  	
   

  	
  “WMIG”

  	
   

  	
  12

  
	
  2.60

  	
   

  	
  “Year of Eligibility
  Service”

  	
   

  	
  12

  
	
  2.61

  	
   

  	
  “Year of Vesting Service”

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3 -
  ELIGIBILITY TO PARTICIPATE IN THE PLAN

  	
   

  	
  16

  
	
   

  	
   

  	
   

  
	
  3.1

  	
   

  	
  Requirements to Become a
  Participant.

  	
   

  	
  16

  
	
  3.2

  	
   

  	
  Eligibility Following a
  Termination of Employment

  	
   

  	
  16

  
	
  3.3

  	
   

  	
  Eligible Classification

  	
   

  	
  16

  
	
  3.4

  	
   

  	
  Determination of
  Eligibility by Administrator

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4 -
  CONTRIBUTIONS TO THE PLAN

  	
   

  	
  17

  
	
   

  	
   

  	
   

  
	
  4.1

  	
   

  	
  Matching Contributions

  	
   

  	
  17

  
	
  4.2

  	
   

  	
  Salary Deferral
  Contributions

  	
   

  	
  19

  
	
  4.3

  	
   

  	
  Catch-up Contributions

  	
   

  	
  22

  
	
  4.4

  	
   

  	
  Rollover Contributions.

  	
   

  	
  23

  
	
  4.5

  	
   

  	
  Withholding and Payment of
  Contributions

  	
   

  	
  24

  
	
  4.6

  	
   

  	
  Deductibility

  	
   

  	
  25

  
	
  4.7

  	
   

  	
  Obligation of Trustee

  	
   

  	
  25

  
	
  4.8

  	
   

  	
  After-Tax Contributions

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5 -
  ALLOCATION OF CONTRIBUTIONS AND TRUST ASSETS

  	
   

  	
  25

  
	
   

  	
   

  	
   

  
	
  5.1

  	
   

  	
  Accounts of Participants

  	
   

  	
  25

  
	
  5.2

  	
   

  	
  Allocation of Contributions

  	
   

  	
  25

  
	
  5.3

  	
   

  	
  Limitation on Annual
  Additions

  	
   

  	
  26

  
	
  5.4

  	
   

  	
  Net Value of the Trust;
  Allocation of Income

  	
   

  	
  28

  
	
  5.5

  	
   

  	
  Limitation of Participant’s
  Rights

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6 - BENEFITS
  BECAUSE OF RETIREMENT OR DISABILITY

  	
   

  	
  28

  
	
   

  	
   

  	
   

  
	
  6.1

  	
   

  	
  Normal Retirement

  	
   

  	
  28

  
	
  6.2

  	
   

  	
  Late Retirement

  	
   

  	
  28

  
	
  6.3

  	
   

  	
  Disability Retirement

  	
   

  	
  28

  
	
  6.4

  	
   

  	
  Retirement Benefits

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7 - BENEFITS
  BECAUSE OF DEATH

  	
   

  	
  29

  
	
   

  	
   

  	
   

  
	
  7.1

  	
   

  	
  Death of a Participant or
  Former Participant

  	
   

  	
  29

  



 



 ii
 






 



 


	
  7.2

  	
   

  	
  Designation of Beneficiary

  	
   

  	
  29

  
	
  7.3

  	
   

  	
  Distribution in Case No
  Beneficiary Designated or Surviving

  	
   

  	
  30

  
	
  7.4

  	
   

  	
  Death of a Beneficiary

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8 - BENEFITS
  BECAUSE OF SEVERANCE

  	
   

  	
  30

  
	
   

  	
   

  	
   

  
	
  8.1

  	
   

  	
  Severance Benefit

  	
   

  	
  30

  
	
  8.2

  	
   

  	
  Vesting

  	
   

  	
  30

  
	
  8.3

  	
   

  	
  Years of Service

  	
   

  	
  31

  
	
  8.4

  	
   

  	
  Severance Benefit in
  Certain Cases

  	
   

  	
  31

  
	
  8.5

  	
   

  	
  Separate Accounts

  	
   

  	
  32

  
	
  8.6

  	
   

  	
  Disposition of Forfeitures

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9 - PAYMENT
  OR DISTRIBUTION OF BENEFITS

  	
   

  	
  32

  
	
   

  	
   

  	
   

  
	
  9.1

  	
   

  	
  Payment of Benefits

  	
   

  	
  32

  
	
  9.2

  	
   

  	
  Distribution of Death Benefits

  	
   

  	
  33

  
	
  9.3

  	
   

  	
  Manner and Timing of
  Distributions

  	
   

  	
  33

  
	
  9.4

  	
   

  	
  Minimum Distribution
  Requirements

  	
   

  	
  34

  
	
  9.5

  	
   

  	
  Direct Rollover

  	
   

  	
  36

  
	
  9.6

  	
   

  	
  Notice of Death, Retirement
  or Separation from Service

  	
   

  	
  37

  
	
  9.7

  	
   

  	
  Obligation to Furnish
  Current Address; Missing Persons

  	
   

  	
  38

  
	
  9.8

  	
   

  	
  Mailing of Benefits

  	
   

  	
  38

  
	
  9.9

  	
   

  	
  Minors and Incompetents

  	
   

  	
  38

  
	
  9.10

  	
   

  	
  Meaning of Participant

  	
   

  	
  38

  
	
  9.11

  	
   

  	
  Reinvestment and Valuation
  of Account

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10 - IN
  SERVICE WITHDRAWALS, DISTRIBUTIONS AND LOANS FROM ACCOUNTS

  	
   

  	
  39

  
	
   

  	
   

  	
   

  
	
  10.1

  	
   

  	
  Refunds.

  	
   

  	
  39

  
	
  10.2

  	
   

  	
  Withdrawals – General Rules

  	
   

  	
  39

  
	
  10.3

  	
   

  	
  Withdrawals from Other Than
  Salary Deferral Contributions Accounts.

  	
   

  	
  39

  
	
  10.4

  	
   

  	
  Distributions From Salary
  Deferral Contributions Account

  	
   

  	
  40

  
	
  10.5

  	
   

  	
  Distribution of Excess
  Deferrals

  	
   

  	
  41

  
	
  10.6

  	
   

  	
  Loans to Participants

  	
   

  	
  42

  
	
  10.7

  	
   

  	
  Restrictions on
  Distributions From Salary Deferral Contributions Account

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 11 -
  ADMINISTRATION OF THE PLAN

  	
   

  	
  44

  
	
   

  	
   

  	
   

  
	
  11.1

  	
   

  	
  Appointment of
  Administrator

  	
   

  	
  44

  
	
  11.2

  	
   

  	
  Powers and Duties of
  Administrator; Administrator Not to Act in Discriminatory Manner

  	
   

  	
  45

  
	
  11.3

  	
   

  	
  Administrator to Keep
  Accurate Records

  	
   

  	
  46

  
	
  11.4

  	
   

  	
  Reliance on Specialists

  	
   

  	
  46

  
	
  11.5

  	
   

  	
  Compensation; Liability

  	
   

  	
  46

  
	
  11.6

  	
   

  	
  Claims Procedure

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 12 - TRUSTEE;
  PARTICIPANT-DIRECTED INVESTMENTS

  	
   

  	
  50

  
	
   

  	
   

  	
   

  
	
  12.1

  	
   

  	
  Trust Agreement

  	
   

  	
  50

  
	
  12.2

  	
   

  	
  Investment of Trust Fund

  	
   

  	
  50

  
	
  12.3

  	
   

  	
  Participant-Directed
  Investments

  	
   

  	
  50

  
	
  12.4

  	
   

  	
  Allocation of Trust Income

  	
   

  	
  53

  
	
  12.5

  	
   

  	
  Trustee’s Accounts

  	
   

  	
  53

  
	
  12.6

  	
   

  	
  Trustee’s Records

  	
   

  	
  53

  
	
  12.7

  	
   

  	
  Trustee’s Liability

  	
   

  	
  53

  
	
  12.8

  	
   

  	
  Trustee’s Compensation and Expenses

  	
   

  	
  53

  
	
  12.9

  	
   

  	
  Voting Rights with Respect
  to White Mountains Stock and OneBeacon Stock

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 13 -
  AMENDMENT AND TERMINATION

  	
   

  	
  56

  
	
   

  	
   

  	
   

  
	
  13.1

  	
   

  	
  Permanence of Plan

  	
   

  	
  56

  



 



 iii
 






 



 


	
  13.2

  	
   

  	
  Right to Amend or Terminate

  	
   

  	
  56

  
	
  13.3

  	
   

  	
  Termination of Plan or Plan
  and Trust

  	
   

  	
  58

  
	
  13.4

  	
   

  	
  Vesting on Termination or
  Partial Termination of Plan

  	
   

  	
  58

  
	
  13.5

  	
   

  	
  Liquidation of Trust

  	
   

  	
  58

  
	
  13.6

  	
   

  	
  Merger or Consolidation of
  Plan

  	
   

  	
  59

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 14 -
  EXCLUSIVE BENEFIT; EXPENSES; SPENDTHRIFT PROVISION

  	
   

  	
  59

  	 

	
   

  	
   

  	
   

  	 

	
  14.1

  	
   

  	
  Exclusive Benefit

  	
   

  	
  59

  
	
  14.2

  	
   

  	
  Expenses

  	
   

  	
  60

  
	
  14.3

  	
   

  	
  Prohibition on Assignment
  or Alienation

  	
   

  	
  60

  
	
  14.4

  	
   

  	
  Qualified Domestic
  Relations Order

  	
   

  	
  60

  
	
  14.5

  	
   

  	
  Offset of Benefits

  	
   

  	
  61

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 15 -
  AFFILIATED EMPLOYER PROVISIONS

  	
   

  	
  62

  	 

	
   

  	
   

  	
   

  	 

	
  15.1

  	
   

  	
  Affiliated Employer
  Requirements

  	
   

  	
  62

  
	
  15.2

  	
   

  	
  Adoption of Plan by
  Affiliated Employer

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 16 -
  TOP-HEAVY PLAN PROVISIONS

  	
   

  	
  63

  	 

	
   

  	
   

  	
   

  	 

	
  16.1

  	
   

  	
  Definitions

  	
   

  	
  63

  
	
  16.2

  	
   

  	
  When Provisions Apply

  	
   

  	
  66

  
	
  16.3

  	
   

  	
  Minimum Contributions

  	
   

  	
  66

  
	
  16.4

  	
   

  	
  Eligibility for Top-Heavy
  Minimum Benefit

  	
   

  	
  66

  
	
  16.5

  	
   

  	
  Vesting Requirements

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 17 -
  MISCELLANEOUS

  	
   

  	
  67

  	 

	
   

  	
   

  	
   

  	 

	
  17.1

  	
   

  	
  Rights of Employees

  	
   

  	
  67

  
	
  17.2

  	
   

  	
  Obligation of the
  Affiliated Employers

  	
   

  	
  67

  
	
  17.3

  	
   

  	
  Action by the Employer

  	
   

  	
  67

  
	
  17.4

  	
   

  	
  Liability of Employer

  	
   

  	
  67

  
	
  17.5

  	
   

  	
  Construction

  	
   

  	
  68

  
	
  17.6

  	
   

  	
  Titles

  	
   

  	
  68

  
	
  17.7

  	
   

  	
  Counterparts

  	
   

  	
  68

  
	
  17.8

  	
   

  	
  Military Leave

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 18 - MERGER
  OF COMMERCIAL UNION PLAN; SPECIAL PROVISIONS REGARDING CNA PLAN

  	
   

  	
  68

  	 

	
   

  	
   

  	
   

  	 

	
  18.1

  	
   

  	
  Merger of Plans

  	
   

  	
  68

  
	
  18.2

  	
   

  	
  Transfer of Commercial
  Union Plan Accounts

  	
   

  	
  68

  
	
  18.3

  	
   

  	
  Transfer of CNA Plan
  Amounts

  	
   

  	
  69

  
	
  18.4

  	
   

  	
  Vesting in CNA Subaccounts

  	
   

  	
  70

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 19 - SPECIAL
  PROVISIONS CONCERNING EMPLOYEES OF CGU LIFE INSURANCE COMPANY OF AMERICA

  	
   

  	
  70

  	 

	
   

  	
   

  	
   

  	 

	
  19.1

  	
   

  	
  Participation of CGU Life
  Companies in the Plan and Membership of CGU Life Employees

  	
   

  	
  70

  
	
  19.2

  	
   

  	
  Spin-Off of CGU Life Plan

  	
   

  	
  70

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE A

  	
   

  	
  72

  	 

								



 



 iv














 


ONEBEACON 401(k)

SAVINGS PLAN


PREAMBLE


WHEREAS, General
Accident Insurance Company of America (“General Accident”) adopted the
Employees’ Savings Plan of General Accident Insurance Company of America (the “Plan”)
effective April 1, 1978;


WHEREAS, General Accident
amended and restated the Plan effective January 1, 1989, in order to comply
with the Tax Reform Act of 1986 and other changes in applicable law and to make
certain other changes, and subsequently amended the Plan for time to time;


WHEREAS, Commercial
Union Insurance Company (“Commercial Union”), an affiliate of General Accident,
maintained the Employees’ Savings Plan of the Commercial Union Insurance
Companies (the “Commercial Union Plan”) which also provided that contributions
for the benefit of members of the Commercial Union Plan be held, in trust, by a
trustee;


WHEREAS, CGU plc
(the ultimate foreign parent of Commercial Union) acquired the common stock of
General Accident plc (the ultimate foreign parent of General Accident),
effective June 2, 1998;


WHEREAS,
Commercial Union Corporation, the immediate parent of Commercial Union,
acquired General Accident effective December 31, 1998;


WHEREAS,
Commercial Union and General Accident merged the Commercial Union Plan with and
into the General Accident Plan, with General Accident as plan sponsor, and
renamed the merged Plan the “CGU Savings Plan” (the “Plan”), and amended the
merged Plan to comply with the Small Business Job Protection Act of 1996, the
Taxpayer Relief Act of 1997, and other recent laws and regulations, and to make
certain other changes;


WHEREAS, General
Accident was renamed “CGU Insurance Company” (“CGU”) effective August 25, 1999;


WHEREAS, the Plan
sponsor was changed to OneBeacon Insurance Company and the Plan name changed to
OneBeacon Insurance Savings Plan, effective June 1, 2001.


WHEREAS, the Plan
has been significantly amended several times since its last amendment and
restatement effective January 1, 1999; and


WHEREAS, OneBeacon
Insurance Company desires to amend and restate the Plan, effective January 1,
2006, in order to incorporate into the Plan all of the amendments made to it 









 



since its last amendment
and restatement effective January 1, 1999, to comply with recent laws and
regulations, and to make certain other changes;


NOW THEREFORE,
effective January 1, 2006, except as otherwise specifically provided herein,
the Plan is hereby amended and restated as follows:


ARTICLE 1


Name and Purpose


1.1           Name of Plan.  The Plan shall be known as the “OneBeacon
401(k) Savings Plan”.


1.2           Purpose.  This Plan is maintained to enable Eligible
Employees to save and invest in accordance with the Plan embodied herein.  The Plan is intended to qualify as a profit
sharing plan under Section 401(a) of the Code that includes a qualified cash or
deferred arrangement under Section 401(k) of the Code.  The Plan is also intended to qualify under
Section 404(c) of ERISA.


1.3           Effective Date.
This Plan was most recently restated effective as of January 1, 1999.  This restatement of the Plan is effective as
of January 1, 2006, except as otherwise provided herein.  The rights of any Employee or Participant who
separated from service before the date described in the preceding sentence
shall be governed by the terms of the Plan and Trust Agreement as in effect at
the time of his separation from service, unless he subsequently returns to
service with the Employer.


ARTICLE 2


Definitions


2.1           “Account” means a Salary
Deferral Contributions Account, a Matching Contributions Account, a Rollover
Contribution Account, an After-Tax Contributions Account, a Transfer Account
and a White Mountains Account, as applicable.


2.2           “Administrator”
means the Employer, or such other individual, committee or firm as the Employer
shall designate from time to time in accordance with Section 11.1.


2.3           “Affiliated Employer”
means the Employer and each of the Affiliated Employers.  “Affiliated Employers” means the Employer and
all other corporations, partnerships, trades or businesses (whether or not
incorporated) which are members of an affiliated group as described in Section
15.1.


2.4           “After-Tax
Contributions” means contributions made to the Plan by the Participant in
accordance with Section 4.8.  After-Tax
Contributions are not excludible from the Participant’s wages for Federal income
tax purposes.



 2
 






 



2.5           “After-Tax
Contributions Account” means an account maintained on the books of the Plan for
the purpose of recording the After-Tax Contributions made by a Participant and
any income, expenses, gains or losses attributable thereto and any refunds,
withdrawals or distributions therefrom. 
Separate accounting shall be maintained for After-Tax Contributions made
prior to January 1, 1987, and After-Tax Contributions made on or after January
1, 1987.


2.6           “Beneficiary” means any
individual, trust, estate or other recipient entitled to receive death benefits
hereunder, on either a primary or a contingent basis.


2.7           “Board” means the board
of managers of the Employer.


2.8           “Break in Service” means a Computation Period
during which the Employee does not complete more than 500 Hours of Service.


2.9           “Code” means the
Internal Revenue Code of 1986, as amended from time to time.


2.10         “Commercial
Union Plan” means The Employee Savings Plan of the Commercial Union Insurance
Companies, as in effect prior to January 1, 1999.


2.11         (a)           “Compensation” means
the sum of:


(i)            the base compensation
(including shift differentials) paid to the Participant by the Employer during
the Plan Year, excluding overtime pay, bonuses, deferred compensation, or other
types of extra compensation, or any Employer payments for group insurance,
public or private employee welfare benefits, or Employer contributions to a
pension or profit-sharing plan; plus


(ii)           elective amounts that
are not includible in the gross income of the Participant under Sections 125,
402(e)(3), 402(h), 403(b) and 132(f) of the Code.


For purposes of clause
(ii) in the preceding sentence, elective amounts that are not includible in the
gross income of the Participant under Section 125 of the Code shall include any
amount not available to a Participant in cash in lieu of health coverage
because the Participant is unable to certify that he has other health
coverage.  An amount will be treated as
described under the preceding sentence only if the Employer does not request or
collect information regarding the Participant’s other health coverage as part
of the enrollment process for the health plan.


(b)           The
Compensation of a Participant taken into account under the Plan shall not
exceed $220,000, as adjusted under Section 401(a)(17) of the Code.  In the case of a Plan Year of less than 12
months, the dollar limitation under this subsection shall be the amount
determined by multiplying the applicable amount described in the preceding
sentence by a fraction, the numerator of which is the number of months in the
Plan Year and the denominator of which is 12. 
In the case of a Participant who commences or ceases participation in
the Plan on 



 3
 






 



a date other than
the first or last day of the Plan Year, no adjustment shall be made to the
applicable dollar limitation.


2.12         “Computation
Period” means a 12-month period beginning on an Employee’s Employment
Commencement Date or Reemployment Commencement Date or any anniversary thereof.


2.13         “Disability
Retirement” means separation from service as a result of which a Participant is
entitled to receive benefits under Section 6.3.


2.14         “Elapsed
Time Transition Date” means the date on and after which the Employee’s Years of
Eligibility Service and Years of Vesting Service are measured using the elapsed
time method, which shall be the first day of his Computation Period beginning
in 1998; provided, however, that if the Employee completes 1,000 Hours of
Service during his Computation Period beginning in 1998 and before December 31,
1998, so that he is credited with a Year of Vesting Service under Section
2.60(a)(3), his Elapsed Time Transition Date shall be the first day of his
Computation Period beginning in 1999.


2.15         “Eligible Employee” means
an Employee of a Participating Employer who is not ineligible to participate in
the Plan under Section 3.3.  An
independent contractor shall not be an Eligible Employee, even if the Internal
Revenue Service characterizes or recharacterizes such individual as a common
law employee of the Employer.


2.16         “Employee” means an
individual who is a common law employee of an Affiliated Employer, and any
Leased Employee.  “Employee” does not
include anyone serving solely as a director of the Employer.


2.17         “Employer” means OneBeacon
Insurance Company, a Pennsylvania corporation, and any sole proprietorship,
partnership or corporation that succeeds to the business and assumes the
obligations of the Employer hereunder. 
When used in relation to an Employee of a Participating Employer, such
term includes the Participating Employer.


2.18         “Employer
Matching Contributions” means contributions made to the Plan by the Employer
under Section 4.1.


2.19         “Employment Commencement
Date” means the first day on which an individual is credited with an Hour of
Service.


2.20         “ERISA” means the Employee
Retirement Income Security Act of 1974, as amended from time to time.


2.21         “Forfeiture
Account” means an account maintained on the books of the Plan for the purpose
of recording amounts held in suspense in accordance with Section 8.6.



 4
 






 



2.22         “Former
Participant” means a Participant who has ceased to be an Employee for any
reason and for whom an amount continues to be held by the Trustee.


2.23         “Highly
Compensated Employee” means an individual who is a common law employee of the
Employer and who:


(a)           (i)            owns more than a 5% interest in an
Affiliated Employer at any time during the Plan Year or the preceding Plan
Year; or


(ii)           received
earnings from the Affiliated Employers in excess of $90,000 during the
preceding Plan Year.


(b)           For purposes of
subsection (a):


(i)            The
term “earnings” means earnings as defined in Section 5.3(a)(ii).  For Plan Years beginning before 1998,
earnings shall also include elective amounts that are not includible in the
gross income of the employee under Section 125, 402(e)(3), 402(h) or 403(b) of
the Code.


(ii)           The
dollar limit referred to in subsection (a)(ii) shall be adjusted in accordance
with Regulations for increases in the cost of living using the calendar quarter
ending September 30, 1996, as the base period.


(c)           The determination of
who is a Highly Compensated Employee shall be made in accordance with Section
414(q) of the Code and Regulations thereunder.


2.24        (a)            “Hour of Service” means:


(i)            each
hour for which an individual is compensated, or entitled to be compensated, by
the Employer for the performance of duties;


(ii)           each
hour for which an individual is compensated, or entitled to be compensated, by
the Employer for a period during which no duties are performed by such
individual (irrespective of whether the employment relationship has terminated)
due to vacation, holiday, illness, incapacity (including disability), layoff,
jury duty, military duty or Leave of Absence, up to a maximum of 501 hours for
any single continuous period during which no duties are performed (whether or
not such period falls within a single Plan Year or other computation
period).  Hours shall not be credited for
payment to an individual from a plan required by workers’ compensation,
unemployment compensation or disability insurance laws, nor shall hours be
credited for reimbursement of an individual for medical or medically related
expenses;


(iii)          each hour for which back pay, irrespective of
mitigation of damages, has been awarded or agreed to by the Employer, provided
that, if such award or agreement of back pay is for reasons other than the
performance of duties, such hours shall be subject to the restrictions of
paragraph (ii), and hours credited under this paragraph shall be 



 5
 






 



credited for the
period or periods to which the award or agreement pertains rather than to the
period in which the award, agreement or payment is made; and


(iv)          for
purposes of determining whether a Break in Service has occurred only, each hour
to a maximum of 501 hours for any single continuous period of absence,
regardless of whether the individual is compensated for such absence, if such
absence occurs by reason of pregnancy of the individual, birth of a child of
the individual, adoption of a child by the individual or the individual caring
for a child for the period beginning immediately following such birth or
adoption, if such Hours of Service would otherwise have been credited to such
individual but for such absence.  Hours
of Service credited under this paragraph shall be credited in the year in which
such absence commences or, if unnecessary to prevent a Break in Service in that
year, in the immediately following year. 
Hours of Service credited under this paragraph shall only be credited to
the individual upon receipt by the Administrator of such timely information as
may be reasonably required to establish the existence and duration of such
absence.


(v)           An
Employee shall be credited with 190 Hours of Service for each month in which
one Hour of Service is performed.


(b)           The
same Hours of Service shall not be credited under more than one of the
paragraphs of subsection (a).  All Hours
of Service shall be computed and credited to computation periods in accordance
with Sections 2530.200b-2(b) and (c) of the Department of Labor regulations.


(c)           In
determining whether an individual has completed a Year of Eligibility Service
or a Year of Vesting Service, Hours of Service shall be credited for the
following:


(i)            the
period during which such individual performs services as a Leased Employee;


(ii)           the period during which
such individual would have been a Leased Employee but for the failure to
satisfy the requirements of subsection (a)(ii) of the definition herein of a “Leased
Employee”;


(iii)          the period during which such individual is a
common law employee of an Affiliated Employer other than the Employer; and


(iv)          the
period during which such individual performs services for the Employer as a
common law employee in a classification of such employees who are not eligible
to participate in the Plan.


2.25         “IPO Date” means the
first date on which OneBeacon Stock is traded on a national securities
exchange.



 6
 






 



2.26         “Late Retirement” means
separation from service as a result of which a Participant or Former
Participant is entitled to receive benefits under Section 6.2.


2.27         (a)           “Leased Employee” means, subject to
subsection (b), an individual who performs services for an Affiliated Employer,
other than as a common law employee, if: 
(i) such services are provided pursuant to a written or oral agreement
between an Affiliated Employer and any other person;  (ii) the individual has performed during any
consecutive 12-month period (A) at least 1,500 Hours of Service for the
Affiliated Employers or (B) a number of Hours of Service which is at least 501
and which is at least equal to 75% of the median Hours of Service that are
customarily performed by any employee of the Affiliated Employers in the
particular position in which such individual is performing services; and (iii)
such services are performed under primary direction or control by the entity
for which such services are provided.


(b)           An individual shall not
be considered to be a Leased Employee if: 
(i) such individual participates in a money purchase pension plan
providing:  (A) a nonintegrated employer
contribution at a rate not less than 10% of the individual’s Compensation, (B)
immediate participation and (C) full and immediate vesting; and (ii) Leased
Employees, determined without regard to this sentence, do not constitute more
than 20% of the nonhighly compensated work force of the Affiliated Employers.


2.28         “Leave of Absence” means
any extended absence from employment that is due to (a) service in the Armed
Forces of the United States if and for such periods as the Employee’s
reemployment rights are guaranteed by law, (b) temporary incapacity, or (c)
other good cause which is authorized by the Employer. Effective August 5, 1993,
such term includes any absence or reduced work schedule for a reason designated
by the Employer as qualifying under the Family and Medical Leave Act of 1993,
if such Act applies to the Employer.


2.29         “Matching
Contributions Account” means an account maintained on the books of the Plan for
the purpose of recording the Employer Matching Contributions made on behalf of
a Participant, and any income, expenses, gains or losses attributable thereto,
and any withdrawals or distributions therefrom.


2.30         “Normal
Retirement” means separation from service as a result of which a Participant is
entitled to receive benefits under Section 6.1.


2.31         “Normal
Retirement Date” means a Participant’s 65th birthday.


2.32         “OneBeacon
Stock” means, on and after the IPO Date, common shares of OneBeacon Insurance
Group, Ltd. as traded on a national securities exchange.  OneBeacon Insurance Group, Ltd. is, on and
after the IPO Date, the indirect foreign parent of the Employer.


2.33         “OneBeacon
Stock Fund” means an investment fund consisting of OneBeacon Stock and
short-term money market investments in which funds may be temporarily invested
pending investment in OneBeacon Stock. 
Such fund shall be invested by the Trustee solely in OneBeacon Stock
purchased by the Trustee in the open market or by private purchase from 



 7
 






 



OneBeacon
Insurance Group, Ltd. or others at the fair market value of such shares at the
time of purchase as determined by the Trustee. 
OneBeacon Stock may also be acquired within the Plan for the Accounts of
Participants from the Accounts of Participants who elect, or whose
Beneficiaries elect, to receive cash distributions from the Plan instead of
OneBeacon Stock allocated to their Accounts. 
In acquiring OneBeacon Stock for Accounts of Participants the Trustee
may net purchases, including internal acquisitions of the kind decribed above,
against sales of OneBeacon Stock. 
Dividends, interest and other distributions received by the Trustee in
respect of the OneBeacon Stock Fund, shall be reinvested in the OneBeacon Stock
Fund.  However, pending reinvestment, any
such dividends, interest, and other distributions in respect of the OneBeacon
Stock Fund shall be invested by the Trustee in short-term fixed income
investments.


2.34         “Participant” means an
Employee who has satisfied the requirements of Article 3 for eligibility to
participate in the Plan and whose service with the Affiliated Employers has not
terminated.


2.35         “Participating Employer” means (a) the
Employer, (b) any Affiliated Employer listed on Schedule A attached hereto,
which is incorporated herein by reference, as of January 1, 2006, and (c) any
other Affiliated Employer that has adopted the Plan in accordance with Section
15.2 and is listed on Schedule A by way of amendment thereto after January 1,
2006.


2.36         “Period
of Service” means a period commencing on an Employee’s Employment Commencement
Date or Reemployment Date (or, if later, on the Employee’s Elapsed Time
Transition Date) and ending on the Employee’s Severance from Service Date.  All of an Employee’s Periods of Service shall
be aggregated, except as otherwise provided in Sections 3.2 and 8.3.


The following Periods of Severance shall also be taken
into account as Periods of Service, provided that no period prior to the
Employee’s Elapsed Time Transition Date shall be treated as a Period of
Service.


(a)           If
an Employee severs from service by reason of a quit, discharge, or retirement
and the Employee then performs an Hour of Service within 12 months of his
Severance from Service Date, such Period of Severance shall be taken into
account; and


(b)           If
an Employee severs from service by reason of a quit, discharge, or retirement
during an absence from service of 12 months or less for any reason other than a
quit, discharge, or retirement, and then performs an Hour of Service within 12
months of the date on which the Employee was first absent from service, such
Period of Severance shall be taken into account.


(c)           In
the case of a Participant who was terminated from the Employer in conjunction
with the sale of New York Commercial business renewal rights to Tower Insurance
Group, and who subsequently became an employee of Tower Insurance Group on or
prior to December 1, 2004, Period of Service for such Participant shall also
include continuous 



 8
 






 



employment with
Tower Insurance Group for purposes of accumulating Years of Vesting Service.


(d)           In
the case of a Participant who terminates from the Employer in conjunction with
Employer’s sale of assets to Western States Insurance Company and immediately
thereafter commences employment with OneCIS Insurance Company (“OneCIS”), such
Participant’s Period of Service for purposes of his or her Years of Vesting
Service shall also include the Participant’s periods of service with OneCIS or
with any other organiz00ation which together with OneCIS is treated as a single
employer under Section 414(b), (c), (m) or (o) of the Code.


(e)           In
the case of a Participant who was terminated from the Employer in conjunction
with the sale of National Farmers Union Property and Casulty Company to QBE
Insurance Group, and who subsequently became an employee of QBE Insurance Group
on June 30, 2005, Period of Service for such Participant shall also include
continuous employment with QBE Insurance Group for purposes of accumulating
Years of Vesting Service.


2.37         “Period
of Severance” means the period commencing on an Employee’s Severance from
Service Date and ending on the date on which the Employee again performs an
Hour of Service; provided, however, that if an Employee completes at least 500
Hours of Service during his Computation Period beginning in 1998 (disregarding
any Hours of Service after December 31, 1998) or any earlier Computation
Period, his Period of Severance shall not begin until the first day after such
Period.


Notwithstanding the foregoing, in the case of an
Employee who is absent from work by reason of (i) the pregnancy of the
Employee, (ii) the birth of a child of the Employee, (iii) the adoption of a
child by the Employee, or (iv) the Employee caring for a child for the period
beginning immediately following such birth or adoption, the Period of Severance
shall not begin on the Employee’s Severance from Service Date, i.e., the
first anniversary of the first date on which the Employee was absent for such
reason but shall instead begin on the second anniversary of the first date on
which the Employee was absent for such reason. 
The period between the first and second anniversaries of the first date
of such absence is neither a Period of Service nor a Period of Severance.


Notwithstanding any other provision of the Plan to the
contrary, service shall be credited during a leave of absence to the extent
required by the Family and Medical Leave Act of 1993 to prevent a Period of
Severance.


For purposes of measuring the length of an Employee’s
Period of Severance, any Breaks in Service prior to an Employee’s Elapsed Time
Transition Date shall be treated as a Period of Severance.


2.38         “Plan” means the OneBeacon
401(k) Savings Plan as set forth herein, together with any and all supplements,
schedules and amendments hereto that may be in effect.



 9
 






 



2.39         “Plan Year” means the 12-month period ending on
December 31 of each year.


2.40         “Reemployment
Date” means the date on which an Employee performs his first Hour of Service
following his most recent Period of Severance.


2.41         “Regulation”
means any rule or regulation promulgated under the Code by the Secretary of the
Treasury or his delegate.


2.42         “Retirement” means the
Normal Retirement, Late Retirement or Disability Retirement of a Participant.


2.43         “Rollover Contribution”
means a contribution to the Plan by or on behalf of an Employee that satisfies
the conditions for tax-free treatment to such Employee and such other
requirements as the Administrator may impose pursuant to Section 4.4.


2.44         “Rollover Contribution
Account” means an account maintained on the books of the Plan for the purpose
of recording any Rollover Contribution made by or on behalf of an Employee, and
any income, expenses, gains and losses attributable thereto, and any
withdrawals or distributions therefrom.


2.45         “Salary
Deferral Contributions” means contributions made to the Plan by the Employer
under Section 4.2 and 4.3 in accordance with a Participant’s election under
Section 4.5.


2.46         “Salary Deferral
Contributions Account” means an account maintained on the books of the Plan for
the purpose of recording the Salary Deferral Contributions made on behalf of a
Participant and any income, expenses, gains or losses attributable thereto, and
any refunds, withdrawals or distributions therefrom.


2.47         “Severance
from Service Date” means the earlier of:


(a)           the
date on which an Employee quits, retires, is discharged, or dies; or


(b)           the
first anniversary of the first date of a period in which an Employee remains
absent from service with or without pay for any reason other than a quit,
retirement, discharge, or death.


2.48         “Testing
Compensation” means, for any Plan Year, a Participant’s “Earnings” as defined
in Section 5.3(a)(ii) received by the Participant while a Participant.


The Testing Compensation of a Participant taken into
account under the Plan shall not exceed $220,000 as adjusted under Section
401(a)(17) of the Code.  In the case of a
Plan Year of less than 12 months, the dollar limitation in the preceding
sentence shall be the amount determined by multiplying the applicable amount
described in the preceding sentence by a fraction, the numerator of which is
the number of months in the Plan Year and the denominator of which is 12.  In the case of a Participant who commences or
ceases participation in the Plan on 



 10
 






 



a date other than
the first or last day of the Plan Year, no adjustment shall be made to the
applicable dollar limit.


2.49         “Totally and Permanently
Disabled” means a physical or mental disability of such severity and probable
duration as to render the Participant unable to perform the duties of his job
or of any job with the Employer for which he is suited by reason of training,
education, or experience, such disability to be determined by a licensed
physician chosen by the Administrator, or the receipt of benefits under the
Employer’s long-term disability program.


2.50         “Transfer
Account” means an account maintained on the books of the Plan for the purpose
of recording a Participant’s transfer amount i.e., an amount transferred to the
Plan directly from another qualified plan prior to January 1, 1999, and any
income, expenses, gains or losses attributable thereto, and any refunds,
withdrawals or distributions therefrom.


2.51         “Trust”
means the trust created by the Trust Agreement.


2.52         “Trust Agreement” means the
agreement between the Employer and the Trustee relating to the Plan, together
with any and all supplements and amendments thereto that may be in effect.


2.53         “Trust
Fund” means all the assets held by the Trustee under the Trust Agreement.


2.54         “Trustee” means the person or persons who may
from time to time be acting as trustee or trustees under the Trust Agreement.


2.55         “Valuation Date” means each
business day of the Plan Year.


2.56         “White
Mountains Account” means an account maintained on the books of the Plan for
purpose of recording the portion of a Participant’s Account invested as described
in Section 4.1(d), and any income, expenses, gains or losses attributable
thereto, and any refunds, withdrawals or distributions therefrom.


2.57         “White
Mountains Stock” means common shares of WMIG with a $1.00 par value, as traded
on the New York Stock Exchange.


2.58         “White
Mountains Stock Fund” means an investment fund consisting of White Mountains
Stock and short-term money market investments in which funds may be temporarily
invested pending investment in White Mountains Stock.  Such fund shall be invested by the Trustee
solely in White Mountains Stock purchased by the Trustee in the open market or
by private purchase from WMIG or others at the fair market value of such shares
at the time of purchase as determined by the Trustee.  White Mountains Stock may also be acquired
within the Plan for the Accounts of Participants from the Accounts of
Participants who elect, or whose Beneficiaries elect, to receive cash
distributions from the Plan instead of White Mountains Stock allocated to their
Accounts.  In acquiring White Mountains
Stock for the Accounts of Participants the Trustee may net purchases, including
internal acquisitions of the kind described 



 11
 






 



above, against
sales of White Mountains Stock. 
Dividends, interest and other distributions received by the Trustee in
respect of the White Mountains Stock Fund, shall be reinvested in the White
Mountains Stock Fund.  However, pending
reinvestment, any such dividends, interest, and other distributions in respect
of the White Mountains Stock Fund shall be invested by the Trustee in
short-term fixed income investments.


2.59         “WMIG”
means White Mountains Insurance Group, Ltd., a Bermuda Company, which, prior to
the IPO Date was the indirect foreign parent of the Employer and, on and after
the IPO Date, is the majority shareholder of OneBeacon Insurance Group, Ltd.


2.60         “Year
of Eligibility Service”


(a)           General
Rule.


An Employee shall
be credited with a Year of Eligibility Service for each Computation Period
during which he completes at least 1,000 Hours of Service.


(b)           Special Rules.


(1)           For Oregon Auto and
North Pacific Employees.  The
individuals described in Section 2.60(b)(3) (relating to certain “OAIC” and “North
Pacific” employees) shall receive credit for eligibility for their service with
OAIC or North Pacific as though such service had been service with the
Employer.


(2)           For Silvey and Royal
Employees.  The individuals described
in Section 2.60(b)(4) (relating to certain “Silvey” and “Royal” employees)
shall receive credit for eligibility for their service with Silvey or its
subsidiaries or with Royal (but, in the case of Royal, only while Royal and
Silvey were members of the same “controlled group of companies,” within the
meaning of Section 414(b) of the Code) as though such service had been service
with the Employer.


(3)           For Hawkeye, Western
States, and United Security Employees. 
The individuals described in Section 2.60(b)(5) (relating to certain “Hawkeye,”
“Western States,” and “United Security” employees) shall receive credit for
eligibility for their service with Hawkeye, Western States, or United Security
as though such service had been service with the Employer.


(4)           For Commercial Union
Employees.  The individuals described
in Section 2.60(b)(6) (relating to certain “Commercial Union” employees) shall
receive credit for eligibility for their service with Commercial Union
Insurance Company and its affiliates as though such service had been service
with the Employer; provided, however, that such an individual’s Years of
Eligibility Service for periods prior to January 1, 1999, shall in no event be
less than his years of service credited for eligibility purposes under the
provisions of the Commercial Union Plan in effect on December 31, 1998.



 12
 






 



(5)           For Atlantic Mutual
Employees.  The individuals described
in Section 2.60(b)(8) (relating to certain “Atlantic Mutual” employees) shall
receive credit for eligibility for their service with Atlantic Mutual Insurance
Company and its affiliates, as though such service had been service with the
Employer.


(6)           For First Media
Insurance Company Employees.  The
individuals described in Section 2.58(b)(9) (relating to certain “First Media”
employees) shall receive credit for eligibility for their service with First
Media Insurance Company, as though such services had been services with the
Employer.


(7)           For Chubb Specialty
Insurance Employees.  The individuals
described in Section 2.58(b)(10) (relating to certain “Chubb” employees) shall
receive credit for eligibility for their service with Chubb Specialty
Insurance, as though such service had been service with the Employer.


2.61         “Year
of Vesting Service”


(a)           General
Rules.


(1)           Prior to 1978.  Any Employee eligible to enter the Plan on
April 1, 1978, shall be credited with whole Years of Vesting Service for the
period (consisting of years and any fractional year of six months or more) of
his continuous employment before January 1, 1978.  Employment shall be deemed continuous where
there is no break of more than a year.


(2)           After 1978 but prior
to Elapsed Time Transition Date.  An
Employee shall be credited with a Year of Vesting Service for each Computation
Period which begins on or after January 1, 1978, but before his Elapsed Time
Transition Date, during which he completes at least 1,000 Hours of Service.


(3)           Computation Period
Beginning in 1998.  An Employee shall
be credited with a Year of Vesting Service for his Computation Period beginning
in 1998 if he completes at least 1,000 Hours of Service during such Period,
disregarding any Hours of Service completed after December 31, 1998.


(4)           After Elapsed Time
Transition Date.  An Employee shall
receive credit for a Year of Vesting Service for each 12-month Period of
Service on and after his Elapsed Time Transition Date.  If the Employee has more than one Period of
Service, such periods shall be aggregated, except as otherwise provided in
Section 8.3.  Any fraction of a Year of
Vesting Service resulting after such aggregation shall be disregarded.



 13
 






 



(b)           Special Rules.


(1)           For A. Paull
Employees.  Any employee of the A.
Paull Branch who was eligible to enter the Plan on July 1, 1981, and who did so
before October 1, 1981 shall be credited with whole Years of Vesting Service
(consisting of years and any fractional year of six months or more) of his
continuous employment with A. Paull & Son, Inc.  Employment shall be deemed continuous where
there is no break of more than a year (but time during a break of less than a
year shall not be credited toward vesting service).


A. Paull &
Son, Inc. employees who did not enter the Plan by October 1, 1981 shall have
their vesting service counted for all years as described in subsection (a)
above.  “Employment Date” shall mean the
date on which such individuals became Employees of the Employer.


(2)           For A.L. Williams
Employees.  Employees of the A.L.
Williams Branch were eligible to enter the Plan on September 1, 1983, provided
they had completed one year of service on or before August 31, 1983.  Employees who enter the Plan shall have their
vesting service counted as described in subsection (a) above.  “Employment Date” shall mean August 1, 1982,
the date on which such individuals became Employees of the Employer.


(3)           For Oregon Auto and
North Pacific Employees.  Employees
of Oregon Automobile Insurance Company (“OAIC”) and its wholly owned subsidiary,
North Pacific Insurance Company (“North Pacific”), as of August 15, 1986, the
date General Accident Insurance Company of America purchased all of the issued
and outstanding stock of OAIC from Northwestern National Insurance Company of
Milwaukee, Wisconsin (a wholly owned subsidiary of Armco Insurance Group, Inc.)
shall receive credit for vesting for their service with OAIC or North Pacific
as though such service had been service with the Employer.


(4)           For Silvey and Royal
Employees.  Employees of the Silvey
Corporation (“Silvey”) or its subsidiaries, and those employees of Royal
Indemnity Company “on loan” to Silvey, who became Employees as a result of
General Accident Insurance Company of America’s purchase of all of the issued
and outstanding stock of Silvey Corporation from Royal Group, Inc. in 1990
shall receive credit for vesting for their service with Silvey or its
subsidiaries or with Royal (but, in the case of Royal, only while Royal and
Silvey were members of the same “controlled group of corporations,”


within the meaning
of Section 414(b) of the Code) as though such service had been service with the
Employer.


(5)           For Hawkeye, Western
States, and United Security Employees. 
Employees of Hawkeye-Security Insurance Company (“Hawkeye”) or its subsidiaries
– Western States Insurance Company (“Western States”) and United Security
Insurance 



 14
 






 



Company (“United
Security”) – as of July 30, 1991, the date General Accident Insurance Company
of America purchased all of the issued and outstanding common stock of Hawkeye
(which in turn owns all of the issued and outstanding common stock (other than
director’s qualifying shares) of Western States and United Security) from IB
Holdings, Inc. (a wholly-owned subsidiary of USLICO Corporation), shall receive
credit for vesting for their service with Hawkeye, Western States, or United
Security as though such service had been service with the Employer.


(6)           For Commercial Union
Employees.  Employees who were in
covered employment under the Commercial Union Plan prior to January 1, 1999,
shall receive credit for vesting for their service with Commercial Union
Insurance Company and its affiliates and for any service with a prior employer
which was counted for vesting purposes under the Commercial Union Plan as of
December 31, 1998 as though such service had been service with the Employer;
provided, however, that such an Employee’s Years of Vesting Service for periods
prior to January 1, 1999, shall in no event be less than his years of service
credited for vesting purposes under the provisions of the Commercial Union Plan
in effect on December 31, 1998.


(7)           For WMIG Employees.  In the case of a Participant who was employed
by WMIG or a predecessor thereof immediately before becoming a Participant,
such Participant shall receive additional credit for Years of Vesting Service
by applying the rules of Section 2.35 as if WMIG had been an Affiliated
Employer for the period it employed such Participant.


(8)           For Atlantic Mutual
Insurance Company Employees. 
Employees who were employed by Atlantic Mutual Insurance Company in
2003, who are hired by the Employer on or prior to December 31, 2004 or who
became an Eligible Employee as a result of the Employer’s acquisition of
Atlantic Specialty Insurance Company, shall receive credit for service with the
Atlantic Mutual Insurance Company and its affiliates for purposes of vesting
and in the determination of such Employee’s Period of Service.


(9)           For First Media
Insurance Company Employees. 
Employees who were employed by First Media Insurance Company who are
hired by the Employer on May 1, 2005 shall receive credit for service with
First Media Insurance Company for purposes of vesting and in the determination
of such Employee’s Periods of Service.


(10)         For Chubb Specialty
Insurance Employees.  Employees who
were employed by the Chubb Specialty Insurance Group who are hired by the
Employer on June 16, 2005 shall receive credit for service with the Chubb
Specialty Insurance Group for purposes of vesting and in the determination of
such Employee’s Periods of Service.



 15














 


ARTICLE 3


Eligibility to
Participate in the Plan


3.1   Requirements
to Become a Participant.


(a)           Any
Eligible Employee who was a Participant of the Plan on December 31, 2005 shall
be a Participant of the Plan on January 1, 2006, provided he continues to be an
Eligible Employee.


(b)           Each other Eligible Employee shall become a Participant of
the Plan, subject to Section 3.3, on the later of:


(1)           January 1, 2006; or


(2)           the first day of the payroll period following the date he
completes 60 days of service for an Affiliated Employer, provided he continues
to be an Eligible Employee on such date. 
If he is not an Eligible Employee on such date, he shall become a
Participant on the first date on which he again becomes an Eligible Employee.


3.2           Eligibility Following a
Termination of Employment.  If an
Employee (whether or not he has become a Participant) who has no vested
interest in his Account terminates employment and incurs a Period of Severance,
and if the length of the Period of Severance equals or exceeds the greater of
(i) the number of his Years of Eligibility Service prior to the Period of
Severance, or (ii) five, then, in the event he returns to employment, he shall
be treated as a new Employee for all purposes of this Plan, except as
specifically provided herein.


In all other cases
where an Employee terminates employment after becoming a Participant and is
later rehired, he shall again become a Participant on the earlier of the date
of his reemployment or the date on which he again becomes an Eligible Employee.


In all other cases
where an Employee terminates employment before becoming a Participant and is
later rehired, he shall become a Participant in accordance with Section 3.1(b),
counting his Years of Eligibility Service (if any) completed before he terminated
employment.


3.3           Eligible Classification.  Notwithstanding the foregoing provisions of
this Article 3, an Employee shall not be an Eligible Employee if the Employee
is a member of a classification of Employees that the Employer has designated
as not eligible to participate in the Plan. 
The Employer may at any time and from time to time remove any one or
more Employees or any group(s) or class(es) of them from eligibility for
participation in this Plan, provided that no such removal shall reduce the amounts
theretofore credited to the Accounts of any Participant.  An Employee shall not be an Eligible Employee
if he or she is (a) an intern;



 16
 






 



(b) a co-op associate;
(c) a member of a collective bargaining unit, unless the members of the unit
are eligible to become Participants of the Plan pursuant to the terms of the
unit’s collective bargaining agreement with the Employer; or (d) a Leased
Employee.


3.4           Determination
of Eligibility by Administrator.  The
determination of an Employee’s eligibility to participate in the Plan shall be
made by the Administrator from the records of the Affiliated Employers and the
Administrator’s determination shall be conclusive and binding upon all persons.


ARTICLE 4


Contributions to the Plan


4.1           Matching Contributions.  (a)  The
Employer shall, for each payroll period, make Employer Matching Contributions
in an amount equal to 50% of the first six percent of a Participant’s Salary
Deferral Contributions and After-Tax Contributions for such payroll
period.  Employer Matching Contributions
on behalf of any Participant shall not exceed three percent of the Participant’s
Compensation for the payroll period.


(b)           The Participants entitled to share in
an allocation of Employer Matching Contributions for a Plan Year are those
Participants or Former Participants who have made Salary Deferral Contributions
and/or After-Tax Contributions during the Plan Year.


(c)           Notwithstanding subsections (a) and
(b), if so determined by the Employer, a portion or all of the Employer
Matching Contributions made for a Plan Year shall be allocated exclusively
among the Participants who are not Highly Compensated Employees with respect to
a portion or all of such Participants’ Salary Deferral Contributions for the
Plan Year, if and to the extent such allocations enable the Plan to satisfy in
part or in whole the requirements of Section 4.2 and, on and after January 1,
2006, comply with the requirements of Section 1.401(k)-2(a)(6) of the
Regulations.  In such event, such
Employer Matching Contributions shall be allocated to, and treated for all
purposes as part of, the Salary Deferral Contributions Account of each such
Participant, except that they shall not be distributed under Section 10.4.


(d)           In addition to the contributions
described in Section 4.1(a), the Employer shall on December 31, 2001 make a
one-time contribution to the Trust of two common shares of White Mountains
Stock on behalf of each Eligible Employee (other than an employee of A. W. G.
Dewar, Inc. or an employee under the management of the National Indemnity
Company) who was employed by the Employer on June 1, 2001 and continued in such
employment as of December 31, 2001.  The
Employer shall also contribute two common shares of White Mountains Stock on
behalf of each Eligible Employee not described in the preceding sentence (other
than an employee of A. W. G. Dewar, Inc., an employee under the management of
National Indemnity Company, or an Employee whose Employment Commencement Date
is after April 11, 2003) on the first day of the second month following the
twelve month anniversary of such Eligible Employee’s Employment Commencement
Date.  Contributions made under this
Section 4.1(d) shall be invested in the White Mountains Stock Fund and shall be
treated as Employer Matching Contributions except that they shall be maintained
in



 17
 






 



the Participant’s White
Mountains Account.  If an Account has not
previously been established for an Eligible Employee on whose behalf such a
contribution is made, the Administrator shall establish such an account consisting
of a White Mountains Account showing the Employee’s interest in the White
Mountains Stock Fund attributable to the two shares of White Mountains Stock.


(e)           For each Plan Year, the Plan must
satisfy one of the following tests:


(i)            the actual contribution percentage
in the current Plan Year of all Participants who are Highly Compensated
Employees does not exceed the actual contribution percentage in the preceding
Plan Year of all Participants who were not Highly Compensated Employees in such
year, multiplied by 1.25, or


(ii)           the actual contribution percentage in
the current Plan Year of all Participants who are Highly Compensated Employees
does not exceed twice the actual contribution percentage in the preceding Plan
Year of all Participants who were not Highly Compensated Employees in such
year, and the actual contribution percentage of all Participants who are Highly
Compensated Employees is not more than two percentage points higher than such
actual contribution percentage of all Participants who were not Highly
Compensated Employees.


(f)            (i)            For
purposes of this section, the term “actual contribution percentage” means, with
respect to a specified group of Participants, the average of the ratios,
calculated separately for each Participant in such group, of the sum of the
Employer Matching Contributions allocated to the Participant’s Matching
Contributions Account for such Plan Year and the After-Tax Contributions
allocated to the Participant’s After-Tax Contributions Account for such Plan
Year to the Participant’s Testing Compensation for such Plan Year.  The “actual contribution percentage” and the “average
of the ratios” shall be calculated to the nearest 1/100 of one percent.


(ii)           The actual contribution ratio of any
Highly Compensated Employee who is eligible to receive matching contributions
or make After-Tax Contributions under two or more qualified plans maintained by
the Affiliated Employers shall be determined as if all such contributions were
made under a single plan.  This Plan and
any plan aggregated with this Plan to meet the requirements of Section 410(b)
of the Code shall be treated as a single plan.


(iii)          For purposes of this section, the term
“actual contribution ratio” means, with respect to a Participant, the ratio
described in paragraph (i).


(iv)          The Administrator shall monitor the
Plan’s compliance with subsection (e) and shall cause the Plan to comply
therewith for each Plan Year.


(g)           (i)            If
the actual contribution percentage of all Participants who are Highly
Compensated Employees does not satisfy
subsection (e) for a Plan Year, the Administrator shall cause the Plan to
satisfy the requirements thereof by reducing such actual contribution
percentage to the extent necessary to satisfy subsection (e).  Such reduction shall be effected by reducing
the actual contribution ratio of each Highly Compensated Employee, beginning
with the Highly Compensated Employee with the highest such ratio and continuing
in descending order, until the actual contribution 



 18
 






 



percentage satisfies subsection (e). 
The amount of such reduction with respect to any Highly Compensated
Employee shall be the lesser of the amount required to cause the actual
contribution percentage of all Highly Compensated Employees to satisfy
subsection (e) or the amount required to cause the actual contribution ratio of
such Highly Compensated Employee to equal the actual contribution ratio of the
Highly Compensated Employee having the next highest such ratio; this process
shall be repeated until the Plan satisfies subsection (e).


 


(ii)           The aggregate amount of required
reduction, determined under paragraph (i), shall be allocated among the Highly
Compensated Employees whose actual contribution ratios were reduced thereunder,
starting with the Highly Compensated Employee with the largest dollar amount of
Employer Matching Contributions and After-Tax Contributions, by allocating to
each such Highly Compensated Employee the amount of reduction necessary to
cause the dollar amount of such Highly Compensated Employee’s Employer Matching
Contributions and After-Tax Contributions for the Plan Year to equal the dollar
amount of Employer Matching Contributions and After-Tax Contributions made on
behalf of the Highly Compensated Employee with the next highest dollar amount
of Employer Matching Contributions and After-Tax Contributions or to reduce the
amount of excess Employer Matching Contributions and After-Tax Contributions
that have not been allocated to a Highly Compensated Employee under this
paragraph to zero.


(iii)          The
amount by which a Highly Compensated Employee’s Employer Matching Contributions
and After-Tax Contributions are reduced under paragraph (ii), together with
earnings or losses thereon for the Plan Year for which the Employer Matching
Contributions and/or After-Tax Contributions were made, and for the period from
the end of such Plan Year to the date of such reduction, or a date not more
than seven days before the date of such reduction as directed by the
Administrator, shall be forfeited, to the extent forfeitable, and otherwise shall
be distributed to the Highly Compensated Employee.  Any amount to be forfeited or distributed in
accordance with the preceding sentence shall first be treated as distributions
of the Participant’s After-Tax Contributions for the Plan Year which have not
been matched by the Employer.  Any
remainder to be forfeited or distributed shall be distributed from the
Participant’s After-Tax Contributions Account and any Employer Matching
Contributions attributable thereto shall be forfeited if otherwise forfeitable
or, if not forfeitable, distributed from the Participant’s Employer Matching
Contributions Account, in proportion to the Participant’s After-Tax
Contributions for the Plan Year which have been matched by the Employer and
Employer Matching Contributions for the Plan Year.  Any remainder to be forfeited or distributed
shall be forfeited from the Participant’s Employer Matching Contributions
Account if forfeitable, or if not forfeitable, distributed from such Account.


(iv)          Any
payment under paragraph (iii) shall ordinarily be made within 21⁄2 months after
the end of the Plan Year for which the excess Employer Matching Contributions
and/or After-Tax Contributions were made, but in no event shall any such
payment be made later than 12 months after the end of such Plan Year.


4.2           Salary
Deferral Contributions.  (a)  Subject to the limitations in this Section
4.2, each Plan Year the Employer shall make Salary Deferral Contributions in an
amount elected by each Participant instead of paying such amount to the
Participant in cash.



 19
 






 



(b)           A
Participant may, in accordance with such procedures as may be established by
the Administrator, make Salary Deferral Contributions, specified as a dollar
amount or a percentage of the portion of the Compensation payable to the
Participant, at such times and subject to such restrictions as the
Administrator may specify.  Any such
amount may be contributed ratably throughout the Plan Year, or on a nonratable
single sum basis.  The rate of Salary
Deferral Contributions elected by a Participant shall not be less than 1% of
the Participant’s Compensation.  The
aggregate amount of Salary Deferral Contributions made with respect to a
Participant for any Plan Year shall not exceed the lesser of (i) 40% of the
Participant’s Compensation (determined without regard to the individual’s
status as a Participant) for the 12-month period ending on the last day of the
Plan Year, or (ii) the maximum amount permitted under Section 402(g) of the
Code (as adjusted in accordance with Section 402(g)(4) of the Code).


(c)           If
a Participant does not make an affirmative election in accordance with
subsection (b), the Participant shall be deemed to have elected to reduce his
Compensation effective as of the first payroll period following the date on
which the Eligible Employee becomes a Participant by 2%, which 2% of
Compensation shall constitute Salary Deferral Contributions.  Such Participant’s rate of Salary Deferral
Contributions shall continue in effect until the Participant makes a new
election in accordance with subsection (b) either changing the rate of Salary
Deferral Contributions to another rate of Salary Deferral Contributions or
electing to cease participation in the Plan.


(d)           The
aggregate amount of Salary Deferral Contributions and Employer Matching Contributions
made with respect to all Participants for any Plan Year shall not exceed the
maximum amount deductible from the Employer’s income under Section 404 of the
Code, nor shall the aggregate amount of all contributions allocated to the
Accounts of any Participant for any Plan Year exceed the applicable limitation
set forth in Section 5.3.


(e)           For each Plan Year, the Plan must
satisfy one of the following tests:


(i)            the actual deferral percentage in
the current Plan Year of all Participants who are Highly Compensated Employees
does not exceed the actual deferral percentage in the preceding Plan Year of
all Participants who were not Highly Compensated Employees in such year,
multiplied by 1.25, or


(ii)           the actual deferral percentage in the
current Plan Year of all Participants who are Highly Compensated Employees does
not exceed twice the actual deferral percentage in the preceding Plan Year of
Participants who were not Highly Compensated Employees in such year, and the
actual deferral percentage of all Participants who are Highly Compensated
Employees is not more than two percentage points higher than the actual
contribution percentage of all Participants who were not Highly Compensated
Employees for the preceding Plan Year.



 20
 






 



(f)            (i)            The
Administrator shall monitor the Plan’s compliance with subsections (b), (c),
(d) and (e) and shall cause the Plan to comply therewith for each Plan Year.


(ii)           If the Plan does not satisfy
subsection (b)(ii) for a Plan Year with respect to a Participant, the
Administrator shall cause the Plan to distribute excess Salary Deferral
Contributions to the Participant, together with earnings or losses thereon for
the Plan Year for which the excess Salary Deferral Contributions were made and
for the period between the end of such Plan Year and the date on which such
excess Salary Deferral Contributions are distributed or a date not more than
seven days before the date of such distribution, as directed by the
Administrator.


(iii)          If the actual deferral percentage of
all Participants who are Highly Compensated Employees does not satisfy subsection (e) for a Plan Year, the Administrator
shall cause the Plan to satisfy the requirements thereof not later than the
last day of the succeeding Plan Year by distributing the excess contributions
to Participants who are Highly Compensated Employees or by causing the Employer
to make nonforfeitable Employer contributions on behalf of designated
Participants who are not Highly Compensated Employees (in accordance with
Section 1.401(k)-2(a)(6) of the Regulations on and after January 1, 2006).  Any contributions made under this section
shall be allocated to, and treated for all purposes as part of, the Participant’s
Salary Deferral Contributions Account, except that they shall not be
distributed under Section 10.4.


(iv)          If excess contributions for a Plan
Year are to be corrected by distributing such excess contributions under
paragraph (iii), the amount to be distributed to each Participant who is a
Highly Compensated Employee shall be determined as follows:


(A)          The Administrator shall reduce the
actual deferral percentage of all Participants who are Highly Compensated
Employees to the extent necessary to satisfy subsection (e).  Such reduction shall be effected by reducing the
actual deferral ratio of each Highly Compensated Employee, beginning with the
Highly Compensated Employee with the highest such ratio and continuing in
descending order, until the actual deferral percentage satisfies subsection
(e).  The amount of such reduction with
respect to any Highly Compensated Employee shall be the lesser of the amount
required to cause the actual deferral percentage of all Highly Compensated
Employees to satisfy subsection (e) or the amount required to cause the actual
deferral ratio of such Highly Compensated Employee to equal the actual deferral
ratio of the Highly Compensated Employee having the next highest such ratio;
this process shall be repeated until the Plan satisfies subsection (e).


(B)           The aggregate amount of required
reduction, determined under subparagraph (A), shall be allocated among the
Highly Compensated Employees whose actual deferral ratios were reduced
thereunder, starting with the Highly Compensated Employee with the largest
dollar amount of Salary Deferral Contributions, by allocating to each such
Highly Compensated Employee the



 21
 






 



amount of
reduction necessary to cause the dollar amount of such Highly Compensated
Employee’s Salary Deferral Contributions for the Plan Year to equal the dollar
amount of Salary Deferral Contributions made on behalf of the Highly
Compensated Employee with the next highest dollar amount of Salary Deferral
Contributions or to reduce the amount of excess contributions that have not
been allocated to a Highly Compensated Employee under this subparagraph to
zero.


(C)           The amount by which a Highly
Compensated Employee’s Salary Deferral Contributions are reduced under
subparagraph (B), together with earnings or losses thereon for the Plan Year
for which the Salary Deferral Contributions were made and for the period from
the end of such Plan Year to the date of such reduction, or a date not more
than seven days before the date of such reduction as directed by the
Administrator, shall be distributed to the Highly Compensated Employee.  Any Employer Matching Contributions made with
respect to any Salary Deferral Contributions returned to a Highly Compensated
Employee pursuant to the preceding sentence shall be forfeited.


(D)          Any payment under subparagraph (C)
shall ordinarily be made within 21⁄2 months after the end of the Plan Year for
which the excess contributions were made, but in no event shall any such
payment be made later than 12 months after the end of such Plan Year.


(g)           (i)            For
purposes of this section, the term “actual deferral percentage” means, with
respect to a specified group of Participants, the average of the ratios,
calculated separately for each Participant in such group, of the Salary
Deferral Contributions allocated to the Participant’s Salary Deferral
Contributions Account for such Plan Year to the Participant’s Testing
Compensation for such Plan Year.  The “actual
deferral percentage” and the “average of the ratios” shall be calculated to the
nearest 1/100 of one percent.


(ii)           The actual deferral ratio of any
Highly Compensated Employee who is eligible to have elective contributions made
on his behalf under two or more qualified plans maintained by the Affiliated
Employers shall be determined as if all such contributions were made under a
single plan.  This Plan and any plan
aggregated with this Plan to meet the requirements of Section 410(b) of the
Code shall be treated as a single plan.


(iii)          For
purposes of this section, the term “actual deferral ratio” means, with respect
to a Participant, the ratio described in paragraph (i).


(iv)          For
purposes of this section, the term “excess contributions” means Salary Deferral
Contributions in excess of the limitations of subsection (e).


4.3           Catch-up
Contributions.  (a)  A Participant who has, or who by the end of a
Plan Year will have, attained age 50 may, in accordance with such procedures as
may be established by the Administrator, make catch-up contributions during
such Plan Year in accordance with, and subject to the limitations of, Section
414(v) of the Code.



 22
 






 



(b)           Contributions
made under this section shall be allocated to the Participant’s Salary Deferral
Contributions Account.


(c)           Contributions
made under this section shall not be taken into account for purposes of
applying the limits on contributions set forth in Section 4.2(b) and (e) and Section 5.3(b).


(d)           For
purposes of determining the amount of Employer Matching Contributions to be
made or allocated on behalf of a Participant under Section 4.1(a), the term
Salary Deferral Contributions shall not include catch-up contributions made
under this section.


(e)           If
the Plan does not satisfy the limitation of this Section for a Plan Year with
respect to a Participant, the Administrator shall cause the Plan to distribute
to the Participant ineligible catch-up contributions, together with earnings or
losses thereon for the Plan Year for which the catch-up contributions were made
and for the period between the end of such Plan Year and the date on which such
catch-up contributions are distributed (or a date not more than seven days
before the date of such distribution, as directed by the Administrator).  Any such payment shall ordinarily be made
within 2-1/2 months after the end of the Plan Year for which the ineligible
catch-up contributions were made, but in no event shall any such payment be
made later than 12 months after the end of such Plan Year.


4.4           Rollover
Contributions.  (a)  The Administrator, in its sole discretion,
may permit to be made by or on behalf of an Eligible Employee (whether or not
such Employee has become a Participant under Section 3.1) a Rollover Contribution
that satisfies the requirements of this section.  In determining whether to permit a Rollover
Contribution with respect to any Eligible Employee, the Administrator shall be
concerned primarily with whether such contribution satisfies all requirements
of the Code and Regulations relating to such contributions.  In making any such determination, the
Administrator may require the Employee to furnish such certificates,
affidavits, opinions of counsel, rulings of the Internal Revenue Service, or
other information or data as the Administrator, in its sole discretion, may
deem necessary or appropriate.


(b)           Subject
to subsection (a), a Rollover Contribution will be accepted only if it is a
direct rollover, or contribution made by an Employee, of an eligible rollover
distribution from:


(i)            a
qualified plan described in Section 401(a) or 403(a) of the Code;


(ii)           an
annuity contract described in Section 403(b) of the Code, excluding after-tax
employee contributions;


(iii)          an
eligible plan under Section 457(b) of the Code maintained by a state, political
subdivision of a state, or any agency or instrumentality of a state or
political subdivision of a state; or



 23
 






 



(iv)          an
individual retirement account or annuity described in Section 408(a) or (b) of
the Code to the extent such distribution would otherwise be includible in gross
income.


A separate subaccount of the Participant’s Rollover
Account shall be established for any after-tax contributions contributed to
this Plan as part of an eligible rollover distribution described in clause (i)
above and any earnings or losses with respect to such contributions shall be
credited to such subaccount.  An eligible
rollover distribution described in clause (i) above shall be treated as consisting
first of the portion thereof that is includible in gross income determined
without regard to Sections 402(c)(1) or 403(a)(4) of the Code.


(c)           A
Rollover Contribution may be made either directly to the Trustee or to the
Administrator for transmittal to the Trustee as soon as practical after the
receipt thereof, as directed by the Administrator.  Any such contribution shall be credited to
the Rollover Contribution Account of the Employee.  No amounts representing the Employee’s
after-tax contributions to an individual retirement account or annuity shall be
permitted as part of a Rollover Contribution. 
In no event shall the Rollover Contribution Account of an Employee be
forfeited.


(d)           An
Eligible Employee who is a former employee of the Atlantic Mutual Insurance
Company who became an Eligible Employee on April 1, 2004 as a result of the
Employer’s acquisition of Atlantic Specialty Insurance Company may make a
direct rollover of any outstanding loan balance from the Atlantic Mutual 401(k)
Savings Plan to this Plan, and may continue making loan repayments to the Plan
in accordance with the terms of the payroll authorization form and any loan
documents associated with the loan rollover.


4.5           Withholding and Payment of Contributions.  (a)  An
Eligible Employee who has satisfied the requirements of Section 3.1 may, by
applying to the Administrator, either in writing or by utilization of telephone
or electronic procedures established for such purpose, at least 15 days before
the first day of any payroll period, elect to have Salary Deferral Contributions
or After-Tax Contributions made to the Plan in lieu of receiving cash
Compensation.  A Participant may decrease
or increase his Salary Deferral Contributions or After-Tax Contributions by
giving written, telephonic or electronic notice to the Administrator; any such
change shall become effective as of the first payroll period following the
Administrator’s receipt of such notice. 
A Participant may discontinue or resume Salary Deferral Contributions or
After-Tax Contributions by giving written, telephonic or electronic notice to
the Administrator; any such discontinuance or resignation shall become
effective as of the first payroll period following the Administrator’s receipt
of such notice.  Subject to the
foregoing, the manner in which Participants may elect Salary Deferral
Contributions and After-Tax Contributions shall be subject to such rules and
procedures as the Administrator shall establish from time to time.


(b)           All
Salary Deferral Contributions and After-Tax Contributions shall be paid by the
Employer to the Trustee by the earlier of (i) the date on which such
contributions can reasonably be segregated from the Employer’s other assets, or
(ii) the 15th business day of the



 24
 






 



month following
the month in which such contributions would otherwise have been paid in cash to
the Participant.


(c)           Employer
Matching Contributions shall be paid by the Employer to the Trustee at such
time as the Employer shall determine, but not later than the due date
(including extensions) for filing the Employer’s federal income tax return for
the taxable year of the Employer to which such contributions relate.


(d)           If
a Participant is on a paid leave of absence or receiving benefits under the
Employer’s short-term disability program, he may either continue his Salary
Deferral Contributions and/or After-Tax Contributions or he may suspend such
contributions.


4.6           Deductibility.  The maximum amount the Employer may
contribute to the Plan for any taxable year of the Employer shall be the amount
deductible under Section 404 of the Code, and all contributions under Sections
4.1 and 4.2 are hereby specifically conditioned upon their deductibility.


4.7           Obligation
of Trustee.  The Trustee shall be
under no duty to inquire into the correctness of the amount of, nor to enforce
payment of, any contribution to be made hereunder.


4.8           After-Tax
Contributions.  A Participant may
make After-Tax Contributions subject to the limitations of Section 4.1.  A Participant’s After-Tax Contributions shall
be in whole percentages not in excess of 40% of Compensation and a Participant’s
aggregate Salary Deferral Contributions and After-Tax Contributions shall not
exceed 40% of the Participant’s Compensation. 
The Participant’s After-Tax Contributions shall be credited to the
Participant’s After-Tax Contributions Account.


ARTICLE 5


Allocation of
Contributions and Trust Assets


5.1           Accounts
of Participants.  The Administrator
or Trustee shall maintain separate accounts on the books of the Plan for each
Participant, including, as appropriate, a Salary Deferral Contributions
Account, a Matching Contributions Account, a Rollover Contribution Account, a
Transfer Account, an After-Tax Contributions Account and a White Mountains
Account.


5.2           Allocation
of Contributions .  Subject to
Section 5.3, the Salary Deferral Contributions, Employer Matching
Contributions, and After-Tax Contributions for each Plan Year and any Rollover
Contributions shall be allocated among the Accounts of Participants in
accordance with Article 4.



 25
 






 



5.3           Limitation
on Annual Additions.  (a)  The following definitions apply for purposes
of this Section 5.3:


(i)            “Annual
additions” means, with respect to a Participant for each limitation year, the
sum of:


(A)          the
contributions by the Employer or an Affiliated Employer to this Plan or any
other qualified defined contribution plan;


(B)                                any
forfeitures allocated to a Participant under such a plan;


(C)                                any
contribution to such a plan by the Participant; and


(D)          any
contribution by an Affiliated Employer allocated to an individual medical
account, as defined in Section 415(l)(2) of the Code, established for a
Participant under any pension or annuity plan, and, in the case of an
individual who is or was at any time a key employee, as defined in Section
416(i) of the Code, any contribution by an Affiliated Employer paid or accrued
to a separate account in a funded welfare benefit plan, as defined in Section
419(e) of the Code, established for the purpose of providing post-retirement
medical benefits.


The term “annual
additions” shall not include any investment earnings allocated to a Participant’s
Accounts, amounts recontributed to this Plan or any Rollover Contribution
(including amounts received by a trustee of a plan of an Affiliated Employer in
a direct transfer from another qualified plan).


(ii)           “Earnings”
means wages, as defined in Section 3401(a) of the Code, and other compensation
received by a Participant during a limitation year that are reported in Box 1
on IRS Form W-2 (Wage and Tax Statement) for the calendar year in which such
limitation year ends.  Earnings shall be
determined without regard to any rules under Section 3401(a) of the Code that
limit the remuneration included in wages on the basis of the nature or location
of the employment or the services performed. 
Earnings shall also include elective amounts that are not includible in
the gross income of the Participant under Section 125, 402(e)(3), 402(h),
403(b) and 132(f)(4) of the Code.  For
purposes of the preceding sentence, elective amounts that are not includible in
the gross income of the Participant under Section 125 of the Code shall include
any amounts not available to a Participant in cash in lieu of group health
coverage because the Participant is unable to certify that he has other health
coverage.  An amount will be treated as
described under the preceding sentence only if the Employer does not request or
collect information regarding the Participant’s other health coverage as part
of the enrollment process for the health plan.


Notwithstanding the foregoing, “Earnings” shall not include
amounts paid or reimbursed by the Employer for moving expenses incurred by the
Participant, to the extent that at



 26
 






 



the time of the
payment it is reasonable to believe that these amounts are deductable by the
Participant under Section 217of the Code.


(iii)          “Excess amount”
means the amount allocated or credited to a Participant in excess of the
limitations set forth in subsection (b).


(iv)          “Limitation
year” means the Plan Year.


(b)           (i)            Notwithstanding any other provision
of the Plan, the maximum annual additions credited to any Participant for any
limitation year, under this Plan and any other qualified defined contribution
plan maintained by an Affiliated Employer, shall not exceed the lesser of (A)
100% of the Participant’s earnings for the limitation year, or (B) $40,000, as
adjusted under Section 415(d) of the Code for increases in the cost of living
using the third calendar quarter of 2001 as the base period.


(ii)           For
purposes of the limitation set forth in paragraph (i)(A), any contribution
described in subsection (a)(i)(D) shall not be taken into account.


(c)           If
an excess amount is determined for a Participant for a limitation year, and if
such excess amount is due to the allocation of forfeitures, a reasonable error
in estimating a Participant’s annual earnings or determining the amount of
elective deferrals (as defined in Section 402(g)(3) of the Code) that may be
made with respect to the Participant under the limits of Section 415 of the
Code, or such other limited facts and circumstances as the Commissioner of
Internal Revenue finds justifiable, such excess amount shall be treated as
follows:


(i)            Any After-Tax Contributions made to
this Plan or any nondeductible voluntary contributions made to any other
qualified plan maintained by an Affiliated Employer shall be returned to the
Participant and any Salary Deferral Contributions shall be distributed to the
Participant, to the extent that such return or distribution would reduce the
excess amount.  Any Employer Matching
Contributions made with respect to such After-Tax Contributions or Salary
Deferral Contributions shall be forfeited.


(ii)           Any remaining excess amount shall be
treated as follows:


(A)          If the Employer’s contribution for the
limitation year has not been made, the amount that would otherwise be
contributed to the Plan shall be reduced by such excess amount.


(B)           If the Employer’s contribution for
the limitation year has been made, any remaining excess amount that is
contributed under a mistake of fact or that is nondeductible shall be returned
to the Employer.  Any remaining excess
amount after the return of contributions to the Employer shall be credited to
an unallocated suspense account.  The
amount credited to the suspense account, and any earnings or losses thereon,
shall be allocated in accordance with this subparagraph.  If the Participant is entitled to participate
in any Employer



 27
 






 



Matching Contributions at the end of the succeeding
limitation year, any remaining excess amount shall be applied to reduce the
contributions of the Employer for such limitation year (and for succeeding
limitation years, as necessary) for such Participant, so that in each such year
the sum of actual contributions and the amount applied from the suspense
account shall equal the amount that would otherwise be allocated to the
Participant’s Accounts.  If the
Participant is not entitled to participate in Employer Matching Contributions
at the end of the succeeding limitation year, then such excess amount shall be
applied to reduce contributions of the Employer for all remaining
Participants.  If the Plan is terminated
while there remains an excess amount that cannot under the limitations of
subsection (b) be allocated to the Account of any Participant, such excess
amount shall be returned to the Employer, notwithstanding any other provision
of the Plan.


(d)           In
lieu of or in addition to the procedures described in subsection (c), the
Employer may reduce its contributions to the Plan for allocation to the
Accounts of the Participant in question by the amount necessary to eliminate
the excess amount.


5.4           Net
Value of the Trust;  Allocation of Income.  The Trustee shall ascertain the net value of
the Trust as of the last day of each Plan Year on the basis of the fair market
values of the assets and liabilities as of such date.  Such net value shall reflect any estimated
and unpaid liabilities.  Income, gains,
losses and expenses of the Trust Fund shall be allocated to the Accounts of
Participants in accordance with Article 12.


5.5           Limitation
of Participant’s Rights.  Nothing
contained in this Article 5 or elsewhere in the Plan shall be deemed to give a
Participant any interest in any specific part of the Trust Fund or any interest
other than his right to receive benefits in accordance with the applicable
provisions of the Plan.


ARTICLE 6


Benefits Because
of Retirement or Disability


6.1           Normal
Retirement.  Upon attaining his
Normal Retirement Date, an Employee shall be 100% vested in any Account held on
his behalf under the Plan and may retire from the service of the Employer.  Such retirement shall be a Normal Retirement.


6.2           Late
Retirement.  A Participant who
continues in the service of the Employer after his Normal Retirement Date may
retire from the service of the Employer at any time thereafter.  Such retirement shall be a Late Retirement.


6.3           Disability
Retirement.  A Participant who
separates from service with the Employer before Normal Retirement Date by
reason of becoming Totally and Permanently



 28
 






 



Disabled shall be
100% vested in the Accounts held on his behalf. 
Such a separation from service shall be a Disability Retirement.


6.4           Retirement
Benefits.  Upon the Normal, Late or
Disability Retirement of a Participant, he shall be entitled to receive a
distribution of his Accounts.  Benefits
payable under this Article shall be paid at the time and in the manner provided
in Article 9.


ARTICLE 7


Benefits Because of Death


7.1           Death
of a Participant or Former Participant. 
(a)  If a Participant dies prior
to the termination of his employment, his Accounts shall thereupon become 100%
vested and his Beneficiary or Beneficiaries shall be entitled to receive a
distribution of the value of such Accounts.


(b)           If
a Former Participant dies before distribution to him commences or before
distribution to him of all of the benefits to which he is entitled under the
Plan has been completed, such Former Participant’s Beneficiary or Beneficiaries
shall be entitled to benefits under the Plan to the extent of the vested
balance of the Former Participant’s Accounts or the remaining amount thereof,
as the case may be.


(c)           Benefits
payable under this Article shall be paid at the time and in the manner provided
in Article 9.


7.2           Designation
of Beneficiary.  (a)  Subject to subsection (b), a Participant or
Former Participant may designate a Beneficiary or Beneficiaries, and may revoke
or change any prior designation of Beneficiary or Beneficiaries, by filing with
the Administrator a written designation of Beneficiary, signed by the
Participant or Former Participant, on a form acceptable to the Administrator.


(b)           A
Participant’s or Former Participant’s designation of a Beneficiary other than
his spouse shall not take effect unless either (i) the Participant’s or Former
Participant’s spouse consents in writing to such specific designation, and the
spouse’s consent acknowledges the effect of such designation and is witnessed
by a notary public or a representative of the Plan, or (ii) it is established
to the satisfaction of the Administrator that the Participant or Former
Participant has no spouse, or that the spouse’s consent cannot be obtained
because the spouse cannot be located or because of such other circumstances as
may be prescribed in Regulations under Section 417 of the Code.  If the spouse is legally incompetent to give
consent, the spouse’s legal guardian may give consent, even if such guardian is
the Participant.


(c)           No
designation of Beneficiary shall be effective unless filed with the
Administrator before the death of the Participant or Former Participant.  The last such designation filed with the
Administrator shall revoke all previous designations and shall govern the
designation of Beneficiary.



 29
 






 



(d)           Notwithstanding
the foregoing, if the Beneficiary is convicted in a Court of competent
jurisdiction of the murder of the Participant, the Beneficiary shall not be
entitled to any benefits hereunder and any benefits payable as a result of the
Participant’s death shall be paid in accordance with Section 7.3 as though the
Beneficiary had predeceased the Participant.


7.3           Distribution
in Case No Beneficiary Designated or Surviving.  If no Beneficiary has been properly
designated or if no designated Beneficiary survives a Participant or Former
Participant, the benefits otherwise distributable to such deceased Participant
or Former Participant shall be paid to the Participant’s or Former Participant’s
surviving spouse or, if there is no surviving spouse, to the Participant’s or
Former Participant’s estate.  As a
condition of any such payment, the Administrator may require such receipts,
releases, indemnity agreements, waivers, proofs and other documents as it deems
necessary or desirable.


7.4           Death
of a Beneficiary.  Unless otherwise
specified in a designation of Beneficiary, upon the death of a Beneficiary who
has become entitled to receive benefits under the Plan by reason of the death
of a Participant or Former Participant, any benefits remaining to be paid to
such deceased Beneficiary shall be paid to a Beneficiary designated in a
writing filed with the Administrator by such deceased Beneficiary before such
Beneficiary’s death; or if there is no such designated Beneficiary, the
deceased Beneficiary’s surviving spouse; or if there is no surviving spouse,
the estate of such deceased Beneficiary.


ARTICLE 8


Benefits Because of
Severance


8.1           Severance Benefit.  (a)  A
Participant who separates from service with the Affiliated Employers for any
reason other than Retirement or death shall be entitled to receive a severance
benefit equal to the vested balance of his Accounts.  Upon such a separation from service, any
portion of the Participant’s Employer Matching Contributions Account not then
vested under Section 8.2 shall be forfeited. 
If the Participant is subsequently reemployed prior to incurring a
five-year Period of Severance, the forfeited amount shall again be credited to
the Participant’s Employer Matching Contributions Account, provided, however,
if the Participant received a distribution of the entire vested balance of his
Accounts as a result of his separation from service, the forfeited amount shall
not again be credited unless the Participant repays the full amount of the
prior distribution before the fifth anniversary of the Participant’s
Reemployment Date.


(b)           Any
severance benefit determined under this Article shall be paid at the time and
in the manner provided in Article 9.


8.2           Vesting.  (a)  A
Participant or Former Participant shall at all times be 100% vested in his
Salary Deferral Contributions Account, and any
Rollover Contribution Account, Transfer Account, After-Tax Contributions
Account or White Mountains Account.



 30














 


(b)           The
vested portion of the Employer Matching Contributions Account of a Participant or Former Participant shall be 100% when
the Participant completes three years of vesting service, except as otherwise
provided in Sections 6.1, 6.3 and 7.1.


(c)           In
the case of a Participant who was terminated from the Employer in conjunction
with the sale of New York Commercial business renewal rights to Tower Insurance
Group, and who subsequently became an employee of Tower Insurance Group on or
prior to December 1, 2004, such Participant shall receive Years of Vesting
Service based on his continuous service with the Tower Insurance Group.


In the case of a Participant who terminates from the
Employer in conjunction with the Employer’s sale of assets to Western States
Insurance Company and immediately thereafter commences employment with OneCIS
Insurance Company (“OneCIS”), such Participant will continue to receive Years
of Vesting Service based on his continuous service with OneCIS.


In the case of a Participant who is terminated from
service with the Employer and all Affiliated Employers as a direct consequence
of the sale of the Employer’s property and casualty insurance business in 42
states and the District of Columbia to Liberty Mutual Insurance Company
pursuant to the Master Agreement by and among WMIG, the Employer and Liberty
Mutual Insurance Company dated as of October 30, 2001, such Participant shall
be 100% vested in his Employer Matching Contributions Account.  Whether a Participant’s termination of
service qualifies under the preceding sentence shall be determined by the
Administrator based on all the facts and circumstances and in a
nondiscriminatory manner.


(d)           In
the case of a Participant who terminated from the Employer in conjunction with
the sale of National Farmers Union Property and Casulty Company to QBE
Insurance Group on June 30, 2005, and immediately thereafter commences
employment with QBE Insurance Group, such Participant will continue to receive
Years of Vesting Service based on his continuous service with QBE Insurance
Group.


8.3           Years
of Service.  (a)  In the case of a Former Participant who
returns to employment with the Employer following a Period of Severance, for
purposes of determining the vested portion of an Account of the Participant
attributable to Employer Matching Contributions and forfeitures allocated
before the Period of Severance, the Participant’s Years of Vesting Service
after such Period of Severance shall be included, unless the Participant
incurred at least a five year Period of Severance.


(b)           In
determining the vested portion of an Account of a Participant described in
subsection (a) attributable to Employer Matching Contributions and forfeitures
allocated after the Period of Severance, Years of Vesting Service prior to such
Period of Severance shall be included in the number of Years of Vesting Service
of the Participant.


8.4           Severance
Benefit in Certain Cases.  In
applying the provisions of Section 8.2 to a Participant who has received a
severance benefit under Section 8.1 with respect to his Employer Matching
Contributions Account on account of a prior separation from service, if the
Participant



 31
 






 



did not incur at
least a five year Period of Severance, the vested amount remaining in such
Account or Accounts at any time shall be determined in accordance with the
formula:


Vested Amount = P(AB+D) - D


where (i) P equals
the vested percentage at the relevant time; (ii) AB is the credit balance of
the Account as of the appropriate Valuation Date; and (iii) D is the amount
previously distributed.  The amount of
severance benefit distributable to the terminated Participant in accordance
with the preceding sentence shall be reduced by any distribution to such
Participant since the appropriate Valuation Date.


8.5           Separate
Accounts.  In the case of a Former
Participant who returns to employment with the Employer following a five year
Period of Severance, separate accounts shall be maintained with respect to the
portions of such Participant’s Employer Matching Contributions Account attributable
to Employer Matching Contributions made before
and after such five year Period of Severance.


8.6           Disposition
of Forfeitures.  (a)  Forfeitures derived from Employer Matching
Contributions shall be used to offset future Employer Matching Contributions
under Section 4.1.


(b)           If
any amount is required to be restored to the Employer Matching Contributions Account of a Participant under Section 8.1, it shall be
derived from forfeitures occurring in the Plan Year in which the Participant
returns to employment or, if such forfeitures are insufficient, from additional
Employer Contributions allocable solely to the Employer Matching Contributions Account of such Participant.  Any such Employer Contributions shall not be
an annual addition for purposes of Section 5.3.


ARTICLE 9


Payment or
Distribution of Benefits


9.1           Payment
of Benefits.  (a)  Upon a Participant’s separation from service
with the Affiliated Employers for any reason, if the value of the vested
portion of the Participant’s Accounts does not exceed $5,000 ($1,000 on and
after March 28, 2005) the Administrator shall direct the Trustee to distribute
the value of such Accounts to the Participant or his Beneficiary in a lump sum
as soon as practicable following such separation from service.  Such distribution shall be made
notwithstanding any other election or waiver in effect under the Plan.


(b)           Upon
the death of a Participant, if the value of the vested portion of the
Participant’s Accounts exceeds $5,000 ($1,000 on and after March 28, 2005),
distribution of such Accounts shall be made in accordance with Section 9.2.


(c)           Upon
a Participant’s separation from service, other than by reason of death, if the
value of the vested portion of the Participant’s Accounts exceeds $5,000
($1,000 on



 32
 






 



and after March
28, 2005), distribution of such Accounts shall be made in accordance with
Section 9.3.


9.2           Distribution
of Death Benefits.


(a)           Spouse
as Beneficiary.  Upon the death of a
Participant before the commencement of benefits under Section 9.3, the value of
the Participant’s Accounts shall be distributed to his surviving spouse unless
the surviving spouse has consented to the designation of another Beneficiary
under Section 7.2.  Such distribution
shall be made in accordance with Section 9.3.


(b)           Other
death benefits.  Upon the death of a
Participant who is not married or whose spouse has consented to the designation
of another Beneficiary in accordance with Section 7.2, the value of the
Participant’s Accounts shall be distributed to the Participant’s Beneficiary or
Beneficiaries in accordance with Section 9.3.


9.3           Manner
and Timing of Distributions. 
(a)  Subject to the other
provisions of this Article, a Participant’s Accounts shall be distributed to
the Participant or to his Beneficiary or Beneficiaries in one of the following
forms of payment, as elected by the Participant or Beneficiary:




	
  Option A:

  	
   

  	
  A single lump sum payment in cash.

  
	
  Option B:

  	
   

  	
  Substantially equal installment payments or
  installment payments that vary with the income earned, over a period of not
  more than 30 years.

  
	
  Option C:

  	
   

  	
  A combination of the methods described in A and B
  above.

  






 


(b)           (i)            Distribution of benefits shall be
made as soon as administratively feasible following receipt of a Participant’s
or Beneficiary’s written request for payment. 
In the absence of an election by the Participant to defer the
commencement of benefits, payment of benefits shall commence no later than 60 days after the end of the Plan
Year in which occurs the latest of the Participant’s Normal Retirement Date,
separation from service with the Employer or the 10th anniversary of the date on which the
Participant commenced participation in the Plan.


(ii)           A
Participant who fails to submit a written request for payment under paragraph
(i) shall be deemed to have elected to defer the commencement of benefits.  In no event may the commencement of benefits
be deferred beyond the date specified in subsection (c).


(iii)          After
a Participant’s separation from service with the Employer, his Accounts shall
continue to be invested as part of the Trust Fund in accordance with Article
12.


(iv)          If
a Former Participant returns to the service of the Employer and again becomes a
Participant, his Account(s), including any additional amounts that may be
allocated thereto, shall continue to be held and invested as part of the Trust
Fund.



 33
 






 



(c)           (i)            Except as otherwise provided in
paragraph (ii), payment of benefits hereunder shall commence no later than the
April 1 next following the later of the calendar year in which an individual
attains age 70-1/2 or the calendar year in which the individual separates from
service with the Affiliated Employers.


(ii)           Payment
of benefits to an individual who is a 5-percent owner shall commence no later
than April 1 of the calendar year next following the calendar year in which the
individual attains age 70-1/2.


(iii)          For
purposes of paragraph (ii), “5-percent owner” means an individual who, at any
time during the Plan Year ending in the calendar year in which the individual
attains age 70-1/2 or during any of the four preceding Plan Years, is a
5-percent owner, as defined in Section 416 of the Code.


9.4           Minimum Distribution Requirements.  (a) 
Notwithstanding any other provision of the Plan, distributions under the
Plan shall be made in accordance with this section and Section 401(a)(9) of the
Code and Regulations thereunder.


(b)           A Participant’s Accounts shall be
distributed, or distribution of such Accounts shall commence, no later than the
Participant’s required beginning date.


(c)           If a Participant dies before
distribution of his Accounts begins, distribution of such Accounts shall be
made as follows:


(i)            If the Participant’s surviving
spouse is the Participant’s sole designated beneficiary, distributions to the
surviving spouse shall commence by the later of December 31 of the calendar
year following the calendar year in which the Participant dies or December 31
of the calendar year in which the Participant would have attained age 70-1/2.


(ii)           If the Participant’s surviving spouse
is not the Participant’s sole designated beneficiary, distributions shall
commence by December 31 of the calendar year following the calendar year in
which the Participant dies.


(iii)          If there is no designated beneficiary
as of September 30 of the calendar year following the calendar year in which
the Participant dies, the Participant’s Accounts shall be distributed in their
entirety by the end of the calendar year in which occurs the fifth anniversary
of the Participant’s death.


(iv)          If the Participant’s surviving spouse
is the Participant’s sole designated beneficiary and the surviving spouse dies
after the Participant but before the commencement of distributions, paragraphs
(ii) and (iii) shall apply as if the surviving spouse were the Participant.


(v)           For purposes of this subsection and
subsection (f), distributions are considered to begin on a Participant’s
required beginning date, unless paragraph (iv) applies, in



 34
 






 



which event distributions
are considered to begin on the date on which distributions are required to
begin to the surviving spouse under paragraph (i).


(d)           Unless a Participant’s Accounts are
distributed in a single sum no later than the Participant’s required beginning
date, distributions shall be made in accordance with subsections (e) and (f).


(e)           For each distribution calendar year
during a Participant’s life, the amount distributed from the Participant’s
Accounts shall not be less than the lesser of:


(i)            The amount determined by dividing
the Participant’s account balance by the distribution period shown in the
Uniform Lifetime Table set forth in Section 1.401(a)(9)-9 of the Regulations,
based upon the Participant’s attained age as of the last day of the
distribution calendar year; or


(ii)           If the Participant’s sole designated
beneficiary for the distribution calendar year is his spouse, the amount
determined by dividing the Participant’s account balance by the number in the
Joint and Last Survivor Table set forth in Section 1.401(a)(9)-9 of the
Regulations, based upon the attained ages of the Participant and his spouse as
of the last day of the distribution calendar year.


(f)            (i)            If
a Participant dies on or after the date on which distributions commence and
there is a designated beneficiary, the minimum amount to be distributed for
each distribution calendar year beginning after the Participant’s death shall
be determined by dividing the Participant’s account balance by the greater of
the Participant’s remaining life expectancy or the remaining life expectancy of
the designated beneficiary.


(ii)           If a Participant dies on or after the
date on which distributions commence and there is no designated beneficiary as
of September 30 of the year following the year of the Participant’s death, the
minimum amount to be distributed for each distribution calendar year after the
year of the Participant’s death shall be the amount determined by dividing the
Participant’s account balance by the Participant’s remaining life expectancy,
using the age of the Participant in the year of death reduced by one for each
subsequent year.


(g)           The minimum distributions required by
subsections (e) and (f) for a Participant’s first distribution calendar year
shall be made no later than the Participant’s required beginning date.  For each other distribution calendar year,
such distributions shall be made no later than the end of such year.


(h)           (i)            If
a Participant dies before the date on which distributions commence and there is
a designated beneficiary, the minimum amount to be distributed for each
distribution calendar year after the year of the Participant’s death shall be
the amount determined by dividing the Participant’s account balance by the
remaining life expectancy of the designated beneficiary.



 35
 






 



(ii)           If a Participant dies before the date
on which distributions commence and there is no designated beneficiary as of
September 30 of the year following the year of the Participant’s death,
distribution of the Participant’s Accounts shall be completed by the end of the
calendar year in which occurs the fifth anniversary of the Participant’s death.


(iii)          If a Participant dies before the
commencement of distributions and the surviving spouse of the Participant is
the sole designated beneficiary, upon the death of the surviving spouse before
distributions to the surviving spouse are required to commence under subsection
(c)(i), this subsection shall apply as if the surviving spouse were the
Participant.


(i)            The following definitions apply for
purposes of this section:


(i)            “Account balance” means the balance
of a Participant’s or Former Participant’s Accounts as of the day before a
distribution calendar year.


(ii)           “Designated beneficiary” means the
Beneficiary described in Section 1.401(a)(9)-4 of the Regulations.


(iii)          “Distribution calendar year” means a
calendar year for which this section requires that a minimum distribution be
made.  The first distribution calendar
year is the earlier of the calendar year preceding the calendar year in which a
Participant’s required beginning date occurs or the calendar year in which
distributions are required by subsection (c) to commence following a
Participant’s death.  For lifetime
distributions, the last distribution calendar year is the year in which a
Participant dies.


(iv)          “Life expectancy” means an individual’s
life expectancy as determined under the Single Life Table set forth in Section
1.401(a)(9)-9 of the Regulations.


(v)           “Required
beginning date” means the date described in Section 9.3(c)(i) or (ii), as
applicable.


9.5           Direct
Rollover.  (a)  For purposes of this section, the following
terms shall have the meanings set forth below:


(i)            “Direct
rollover” means a payment to one or more eligible retirement plans specified by
a distributee.


(ii)           “Distributee”
means an Employee or former Employee; the surviving spouse of an Employee or
former Employee; and the spouse or former spouse of an Employee or former
Employee who is the alternate payee under a qualified domestic relations order
as defined in Section 414(p) of the Code.


(iii)          “Eligible
retirement plan” means an individual retirement account or annuity described in
Section 408(a) or (b) of the Code, an annuity plan or contract described in
Section 403(a) or (b) of the Code, an eligible plan under Section 457(b) of the
Code maintained



 36
 






 



by a state,
political subdivision of a state, or any agency or instrumentality of a state
or political subdivision of a state, or a qualified trust described in Section
401(a) of the Code that will accept a distributee’s eligible rollover
distribution.


(iv)          “Eligible
rollover distribution” means the distribution under the Plan of all or a
portion of the balance to the credit of a distributee, other than: one or more
distributions to be made during a taxable year of the distributee which in the
aggregate are reasonably expected to be less than $200; a distribution that is
one of a series of substantially equal periodic payments made not less
frequently than annually for the life or life expectancy of the distributee or
the joint lives or joint life expectancy of the distributee and the distributee’s
designated beneficiary, or for a specified period of ten years or more;
payments under an annuity contract made in or after the year in which the
employee attains (or would, if living, have attained) age 70-1/2; the portion
of any distribution that is required to be made under Section 401(a)(9) of the
Code; and the portion of any distribution that is made upon the financial
hardship before the Employee attains age 59-1/2 or separates from service with
the Employer.


(b)           Notwithstanding
any other provision of the Plan, a distributee may elect, in accordance with
procedures established by the Administrator, that all or a portion of an
eligible rollover distribution to be made to the distributee shall instead be
distributed in a direct rollover.  If a
portion but not all of an eligible rollover distribution is to be distributed
in a direct rollover, such portion may not be less than $500.  In the case of an eligible rollover
distribution not exceeding $500, any direct rollover must consist of the entire
amount of the eligible rollover distribution.


(c)           (i)            Not less than 30 days before the
date of a distribution to a distributee who is entitled to receive an eligible
rollover distribution, the Administrator shall, in accordance with Section
402(f) of the Code, provide the distributee with a written explanation of the
rules governing rollovers (including the right to make a direct rollover under
subsection (b)), the special tax treatment available to lump sum distributions
and the mandatory federal income tax withholding on any eligible rollover
distribution for which no election is made under subsection (b).  No later than the date on which the
information required by this paragraph is provided to a distributee, the Administrator
shall notify the distributee that he or she is entitled to consider, for a
period of at least 30 days following receipt of such information, whether or
not to make an election under subsection (b).


(ii)           Notwithstanding
paragraph (i), a direct rollover or distribution may be made less than 30 days
after the distributee receives the information required by paragraph (i), if
the distributee affirmatively elects to receive a distribution or to make a
direct rollover under subsection (b).


9.6           Notice
of Death, Retirement or Separation from Service.  Whenever benefits become payable under the
Plan because of the death, Retirement or other separation from service of a
Participant, the Administrator shall transmit to the Trustee a notice
specifying the name and address of the Participant (including, if applicable,
any designated or contingent Beneficiary) or Beneficiary who is entitled to
receive benefits under the Plan and the medium of payment.



 37
 






 



9.7           Obligation
to Furnish Current Address; Missing Persons.  (a)  An
individual for whom vested benefits are being held by the Trustee shall keep
the Administrator notified of a current mailing address.  The Administrator and the Employer shall be
discharged from any liability resulting from a failure to pay benefits if
reasonable effort has been made to contact the individual at the last address
on record.


(b)           If
an individual entitled to benefits under the Plan cannot be located after
diligent search and the whereabouts of such individual continues to be unknown
until five years after the later of the Participant’s Normal Retirement Date or
the date he actually retires, such benefits shall be forfeited and the amount
thereof shall be disposed of in accordance with Section 8.6.  Such benefits shall be restored to the
Participant or Beneficiary entitled thereto upon such individual’s claim
therefor filed within the time prescribed by applicable law.


9.8           Mailing
of Benefits.  Whenever the Trustee is
directed to make payment or delivery of benefits in accordance with a notice of
the Administrator, mailing a check in the appropriate amount to the person or
persons entitled thereto at the address designated in such notice shall be
adequate delivery by the Trustee for all purposes.


9.9           Minors
and Incompetents.  If any benefit
hereunder becomes payable to a minor, to an individual under a legal
disability, or to an individual not judicially declared incompetent but who, by
reason of illness or mental or physical disability, is, in the opinion of the
Administrator, unable properly to administer such benefit, such benefit shall
be paid to the legally appointed guardian or conservator of such individual, or
to a relative or friend for the care and support of such individual, as
selected by the Administrator, and the Trustee, the Administrator and the
Employer shall not incur any liability therefor.


9.10         Meaning
of Participant.  For purposes of this
Article, the term “Participant” includes a Former Participant.


9.11         Reinvestment
and Valuation of Account.


(a)           Reinvestment.  As soon as practicable after the earlier of a
Participant’s  request for benefit
payment or the receipt of notification of the Participant’s death, the portion
of the Participant’s Accounts invested other than in the Vanguard Prime Money
Market (the “Money Market Fund”), shall be liquidated and transferred on that
day to the Money Market Fund.


(b)           Valuation.  For purposes of the distribution of a
Participant’s benefits, a Participant’s Account shall be valued as
follows:  Pursuant to subsection (a)
above; all amounts in the Participant’s Account shall be invested in the Money
Market Fund.  The share balance of the
Participant’s Account invested in that Fund shall equal the number of shares
credited to the Participant’s Account as of the Valuation Date immediately
preceding the date of benefit payment, including any shares of that Fund
purchased on that Valuation Date as a result of the



 38
 






 



reinvestment
required by subsection (a) above.  The
distribution value shall equal the share price as of the actual liquidation
date multiplied by the number of shares.


ARTICLE 10


In Service
Withdrawals, Distributions and Loans From Accounts


10.1         Refunds.  As provided in Section 5.3(c), the
Administrator may direct the Trustee to distribute amounts as described in
Section 5.3 as necessary to comply with the limitations on contributions set
forth in Section 5.3.  As provided in
Sections 4.1 and 4.2, the Administrator may direct the Trustee to distribute
amounts from the Trust Fund in order to comply with the limitations set forth
in such sections.


10.2         Withdrawals
— General Rules.  In accordance with
such procedures as the Administrator may establish from time to time, a
Participant or Former Participant may withdraw all or a portion of the vested
balance of his Accounts.  Withdrawals
from Salary Deferral Contributions Accounts are subject to Sections 10.4.  Withdrawals from all other Accounts are
subject to Section 10.3.  A Participant
or Former Participant may not make more than three withdrawals in any Plan Year
other than for financial hardship pursuant to Section 10.4


10.3         Withdrawals
from Other Than Salary Deferral Contributions Accounts.  A Participant or Former Participant may
withdraw all or a portion of the vested balance of his Accounts as set forth
below, other than his Salary Deferral Contributions Account.  The order of withdrawal from the Participant’s
Accounts shall be as follows:


(a)           First,
from the Participant’s After-Tax Contributions Account and from the after-tax
portion (if any) of the Participant’s Transfer Account (excluding income and
appreciation on both) attributable to pre-1987 After-Tax Contributions or
pre-1987 after-tax deposits to a plan from which the Participant transferred
assets hereto;


(b)           Second,
pro rata (i) from the Participant’s After-Tax Contributions Account and the
after-tax portion (if any) of the Participant’s Transfer Account attributable
to post-1986 After-Tax Contributions or post-1986 after —tax deposits to a plan
from which the Participant transferred assets hereto and (ii) from the income
and appreciation thereon;


(c)           Third,
from the income and appreciation on the Participant’s pre-1987 After-Tax
Contributions held in the Participant’s After-Tax Contributions Account and
from the pre-1987 after-tax portion (if any) of the Participant’s Transfer
Account;


(d)           Fourth,
from the Participant’s vested Employer Matching Contribution Account and White
Mountains Account; if the Participant will not have attained at least age 59 1⁄2
by the date of the withdrawal, the amount withdrawable from his vested Employer
Matching Contributions Account shall be limited to an amount which is not
greater than the excess of the amount in that Account over the amount of
Employer Matching Contributions credited to that Account within the two-year
period preceding the date his request for withdrawal is received by



 39
 






 



the Administrator;
if the Participant will have attained at least 59 1⁄2 by the date of the
withdrawal, the preceding limitation shall be inapplicable;


(e)           Fifth,
from the Participant’s Rollover Account; and


(f)            Last,
from the Participant’s Transfer Account (except to the extent any assets in the
Transfer Account are attributable to the Participant’s pre-tax deposits under
any plan from which the Participant transferred assets hereto).


A Participant who makes a withdrawal under this
Section shall not incur any period of suspension of participation.


10.4         Distributions
From Salary Deferral Contributions Account. 
(a)  If the Administrator
determines that a distribution from the Plan is needed by a Participant on
account of financial hardship described in this section, and the Participant
has obtained all other distributions and nontaxable loans then available under
the Plan and under all other tax-qualified retirement plans maintained by the
Affiliated Employers, the Administrator shall direct the Trustee to make a
distribution to the Participant from his Salary Deferral Contributions Account
(and/or an amount from his Transfer Account attributable to the Participant’s
pre-tax deposits under any plans from which the Participant transferred assets
hereto) of an amount not to exceed the vested balance held in such Account
exclusive of any Trust income credited to such Account, after December 31,
1988.


(b)           For
purposes of this section, a financial hardship shall exist only if the
Administrator determines that the funds are needed by the Participant for or
because of one or more of the following:


(i)            Expenses
for medical care, as described in Section 213(d) of the Code, previously
incurred by the Participant, the Participant’s spouse or any dependent of the
Participant (as defined in Section 152 of the Code) or necessary for any such
individual to obtain such medical care;


(ii)           Costs,
other than mortgage payments, directly related to the purchase of a principal
residence for the Participant;


(iii)          Payment
of tuition and related educational fees for the next 12 months of
post-secondary education for the Participant, or the Participant’s spouse,
child or dependent (as defined in Section 152 of the Code);


(iv)          Payments
necessary to prevent the eviction of the Participant from the Participant’s
principal residence or foreclosure on the mortgage on such residence; or


(v)           Funeral
expenses of a family member; or



 40
 






 



(vi)          Any
other event deemed an immediate and heavy financial need by the Commissioner of
the Internal Revenue Service in revenue rulings, notices and other documents of
general applicability.


(c)           No
distribution shall be permitted under this section to the extent that the
distribution would exceed the amount of the financial need of the Participant,
which need shall include amounts necessary to pay any federal, state or local
income taxes or penalties reasonably anticipated to result from the
distribution.


(d)           If
a Participant receives a financial hardship distribution under this section,
his right to authorize Salary Deferral Contributions and After Tax
Contributions under the Plan and elective contributions under all other
tax-qualified retirement plans and nonqualified plans of deferred compensation
maintained by the Affiliated Employers shall be suspended for a period of 6
months after the receipt of such distribution, except that such suspension of
contributions shall not apply to a health or welfare benefit plan, including
one that is part of a cafeteria plan within the meaning of Section 125 of the
Code.


(e)           If
a Participant has attained age 59 1/2, he may withdraw the vested balance of
his Salary Deferral Contributions Account (and the vested balance of his
Transfer Account attributable to the Participant’s pre-tax deposits under any
plans from which the Participant transferred assets hereto).  A Participant who makes a withdrawal under
this subsection (e) may continue to make Salary Deferral Contributions and
After-Tax Contributions and continue to receive Employer Matching Contributions
after the withdrawal.


10.5         Distribution
of Excess Deferrals.  (a)  No later than the March 1 following a Plan
Year, a Participant or Former Participant may submit a written claim to the
Administrator specifying the Participant’s or Former Participant’s excess
deferral amount for such Plan Year.  Any
such claim shall include a statement by the Participant or Former Participant
that if the excess deferral amount is not distributed, the Participant’s or
Former Participant’s elective amounts for such Plan Year under plans or
arrangements described in Sections 401(k), 408(h) and 403(b) of the Code will
exceed the limit imposed by Section 402(g) of the Code.


(b)           The
amount specified by the Participant or Former Participant in such written
claim, together with earnings or losses thereon for the Plan Year for which the
Salary Deferral Contributions were made and for the period from the end of such
Plan Year to the date of such distribution, or a date not more than seven days
before the date of such distribution as directed by the Administrator, shall be
distributed to the Participant or Former Participant no later than April 15
following the Administrator’s receipt of the written claim.


(c)           If any Employer Matching Contribution
was allocated to the Participant’s or Former Participant’s Employer Matching
Contributions Account with respect to an excess deferral amount distributed
under this section, such Employer Matching Contribution, together with any
earnings or losses allocable thereto, shall be forfeited and disposed of in
accordance with Section 8.6.



 41
 






 



(d)           For
purposes of this section, “excess deferral amount” means the amount of any
Salary Deferral Contributions that a Participant or Former Participant
designates as attributable to the Plan under this section.


10.6         Loans
to Participants.


(a)           Upon
a Participant’s written application to the Administrator, the Administrator
may, but shall in no case be required to, direct the Trustee to make a loan
from the Trust, in an amount specified by the Administrator, to such
Participant if the Participant agrees to sign the appropriate loan document
and, in the Administrator’s reasonable belief, the Participant is capable of
repaying the loan in accordance with its terms.


(b)           Each
loan shall be subject to the following conditions:


(i)            The
amount of all loans outstanding to a borrower, under the Plan and any other
qualified plan maintained by an Affiliated Employer, shall not exceed the
lesser of (A) 50% of the value of the vested portion of the borrower’s Accounts
and his nonforfeitable accrued benefits under all such other qualified plans
when the loan is made, or (B) $50,000, reduced by the excess, if any, of the
highest outstanding balance of loans to the borrower under all such plans
during the one-year period ending on the day before the day on which the loan
is made over the outstanding balance of such loans.  For purposes hereof, the value of the vested
portion of a borrower’s accounts shall be determined as of the date the
borrower’s request for a loan is approved by the Administrator.


(ii)           No
loan shall be made in an amount less than $500.


(iii)          The maximum number of loans that a
Participant may have outstanding is two; provided that
a Participant who has three loans outstanding as of December 31, 2001 shall be
deemed in compliance with this sentence until such time as the third loan is
repaid.


(iv)          Each Participant who receives a loan
shall pay a loan processing and maintenance fee in such amount as may be
established by the Administrator.


(v)           Each
loan shall be repayable in substantially equal installments no less often than
quarterly over a term not to exceed five years, except that a loan the proceeds
of which are used to purchase a dwelling unit to be used (determined at the
time the loan is made) as a principal residence of the Participant may, at the
Administrator’s discretion, be for a longer term not to exceed twenty (20)
years.  A loan shall in any event become
due and payable in full when any amount becomes distributable as a benefit to
the Participant following the Participant’s separation from service with the
Affiliated Employers.  If so directed by
the Administrator, the Participant’s payments of principal and interest shall
be made in whole or in part by mandatory payroll deduction or withholding.  Effective December 12, 1994, loan repayments
will be suspended under the Plan as permitted under Section 414(u)(4) of the
Code.  Additionally, the 



 42
 






 



Administrator may
suspend loan repayments for up to twelve months for any Participant who is on
an unpaid leave of absence.


(vi)          Each
loan shall be made against adequate collateral which shall be limited to the
assignment of up to 50% of the borrower’s entire interest in the Trust Fund,
supported by the borrower’s collateral promissory note for the amount of the
loan, including interest, payable to the order of, and in form satisfactory to,
the Trustee.  “Adequate collateral” means
that amount of the Participant’s Accounts, the value of which the Administrator
reasonably believes would be required as collateral in an otherwise identical
transaction in an arm’s-length setting by any entity in the business of lending
money.  The value of the collateral must
be such that it can be reasonably anticipated that the Plan will not suffer a
loss of principal or interest from making the loan.


(vii)         Each
loan shall bear interest at a fixed rate which shall be equal to the prime
lending rate, as reported by Reuters on the first business day of the month in
which the loan is made plus one percentage point, or such other rate as the
Administrator determines to be the prevailing rate charged for similar loans
made under like circumstances by entities in the business of lending money.


(c)           Subject
to the approval of the Administrator, the Participant shall determine whether
and to what extent the loan proceeds shall be disbursed from any of the
Accounts maintained for the Participant under the Plan.  For purposes of Section 12.3, any loan shall
be deemed to constitute an investment option selected by the Participant in
accordance with Section 12.3.  The
Participant shall direct that an amount equal to the principal of such loan be
transferred or withdrawn from his other investment options from which the loan
proceeds shall be disbursed to the Participant. 
All of the Participant’s payments of principal and interest shall be allocated
exclusively to the Participant’s Accounts.


(d)           The
Administrator may foreclose on the portion of a Participant’s Accounts pledged
as security for a loan after a reasonable period of time has elapsed after the
Administrator has sent a notice to the Participant stating that a default has
occurred that must be remedied.  The
Administrator shall so foreclose when it becomes reasonably clear to the
Administrator that the Plan will experience a loss of principal or interest if
there is a delay in foreclosing.  A
default shall occur when the Participant fails to make any payment of principal
or interest when due under the terms of the loan.  Notwithstanding any such default, the Participant’s
indebtedness shall not be canceled or discharged, and the Participant’s note
shall continue to be held by the Plan. 
Such indebtedness shall be discharged and such note shall be distributed
to the Participant whenever an event permitting distribution to the Participant
under the terms of the Plan shall have occurred.


(e)           Subject
to the foregoing provisions of this section, the Administrator shall from time
to time establish the terms and conditions under which loans will be made
(which terms and conditions are hereby incorporated into the Plan by
reference).  In making determinations
with regard to eligibility for loans, the Administrator may take into
consideration the Participant’s financial need and factors considered in a
normal commercial setting by entities



 43
 






 



in the business of
lending money.  In making such determinations,
the Administrator shall adopt and follow uniform and nondiscriminatory rules so
that loans are available to all Participants on a reasonably equivalent
basis.  The Administrator’s determination
in all such matters shall be final and binding.


(f)            All
loans which were rolled-over by an Eligible Employee who is a former employee
of the Atlantic Mutual Insurance Company who became an Eligible Employee on
April 1, 2004 as a result of the Employer’s acquisition of Atlantic Specialty
Insurance Company, in accordance with the provisions of Section 4.4(d) of the
Plan, will be subject to the terms of any loan documents which apply to the
outstanding loan which was the subject of the rollover.


(g)           Notwithstanding
anything contained in this Section 10.6 to the contrary, a Participant who was
employed with the Contract Inspection Services division at the Employer may
elect to roll-over any outstanding loan balance to the U.S. Laboratories, Inc.
401(k) Plan within 30 days of hire at OneCIS, and the terms of such loan will
not be accelerated, and the loan will not be considered to be in default as a
result of the Participants separation from service with the Employer.


10.7         Restrictions
on Distributions From Salary Deferral Contributions Account.


Except as otherwise provided in this Article, no
amounts credited to a Participant’s Salary Deferral Contributions Account (or
the portion of his Transfer Account, if any, attributable to the Participant’s
pre-tax deposits under any plans from which the Participant transferred assets
hereto) may be withdrawn by or distributed to the Participant before the
earliest of:


(a)                                  The
Participant’s Retirement or death;


(b)                                 The
Participant’s severance from employment with the Affiliated Employers;


(c)           The
Participant’s attainment of age 59-1/2; or


(d)           The
termination of the Plan without establishment of a successor plan.


ARTICLE 11


Administration of
the Plan


11.1         Appointment
of Administrator.  In the absence of
any action by the Employer to appoint an Administrator, the Employer shall be
the Administrator of the Plan.  The
Employer may appoint one or more individuals, firms, corporations or other
entities to be the Administrator of the Plan, and the Employer may, at any time
and from time to time, remove such person(s) as Administrator, with or without
cause.  Additionally, in lieu of the
preceding, the Chief Executive Officer of the Employer may appoint a committee
to be the Administrator, which committee shall consist of a Chairman and such
additional members as the said officer shall from time to



 44
 






 



time determine. 
Each member of the committee shall be appointed for such term as the
appointing officer shall specify.  Any
member of the committee may resign by delivering his written resignation to the
said Chief Executive Officer and to the other members of the committee.  The said Chief Executive Officer may remove
any member of the committee with or without cause by giving written notice to
the member so removed and to the other members of the committee.  Any members of the committee who are
Employees shall not receive Compensation with respect to their services for the
committee.  The members of the committee
shall be bonded in accordance with law, and the cost thereof shall be paid by
the Employer.


The committee shall act by a majority vote.  A quorum to do business shall be at least
half of those who are then members.  Any
written instrument signed by a majority of the members of the committee or by
any member of such committee who has been authorized to act on behalf of the
committee shall have the same force and effect as a formal resolution adopted
in open meeting.


Subject to the terms of this Plan, the committee may,
in its discretion, set and change its rules for transacting business and
administering the Plan.


11.2         Powers
and Duties of Administrator; Administrator Not to Act in Discriminatory Manner.  (a) 
The Administrator shall constitute the “named fiduciary” and the “administrator”
with respect to the Plan as such terms are defined in ERISA, and in such
capacities it shall have authority to control and manage the operation and
administration of the Plan.  The
Administrator shall have the powers and duties specified in the Plan, including
the discretionary authority to interpret the provisions of the Plan and to
determine all questions relating to eligibility for benefits hereunder.  Any such interpretation or determination
adopted by the Administrator in good faith shall be binding upon the Employer
and on all Participants, Former Participants and Beneficiaries.  The Administrator, in exercising its
discretion shall do so in a uniform and nondiscriminatory manner, treating all
individuals in similar circumstances alike.


(b)           The
Administrator shall establish a funding method and policy consistent with the
objectives of the Plan, and shall determine the Plan’s short-and long-term
financial needs and communicate such requirements to the Trustee.  The Administrator shall also inform the
Trustee as to the specific investment options available for investment under
the Plan, including any discontinued or additional options and shall also
inform the Trustee should investments under the Plan no longer be Participant
directed.


(c)           The
Administrator may employ such accountants, counsel, specialists and other
persons as it deems necessary or desirable in connection with the
administration of this Plan.  To the
extent permitted by ERISA, the Administrator may delegate any of its fiduciary
responsibilities or other duties or responsibilities to such persons as the
Administrator deems appropriate.


(d)           The
Administrator may correct any defect, supply any omission, reconcile any
inconsistency, and adopt such rules and procedures with respect to the
administration of this



 45
 






 



Plan in such
manner and to such extent as it may deem necessary and expedient to carry out
the Plan.


(e)           The
Administrator may remedy any inequity resulting from incorrect information
received or communicated in good faith or as a result of an administrative or
operational error.  Such remedial action
may include taking such actions as may be required under any correction program
established by the Internal Revenue Service, the Department of Labor or any
other administrative agency, including the Employee Plans Compliance Resolution
System of the Internal Revenue Service; reallocation of Plan assets; adjusting
the amount of future payments to Participants, Former Participants,
Beneficiaries or alternate payees; and the institution and prosecution of legal
actions to recover benefit payments made in error.


11.3         Administrator
to Keep Accurate Records.  The
Administrator shall keep accurate records and minutes of its proceedings and
actions with respect to the Plan.  It
shall maintain, or cause to be maintained, accounts showing the operation and
condition of the Trust Fund, and shall keep, or cause to be kept, in convenient
form such data as may be necessary for the valuation of the assets and
liabilities of the Plan.  The
Administrator shall prepare or cause to be prepared and distributed to
Employees, Participants, Former Participants and Beneficiaries and to be filed
with the appropriate government agencies, as the case may be, all necessary
descriptions, reports, information and data required by the Code, ERISA and any
other applicable law.


11.4         Reliance
on Specialists.  None of the Employer,
its officers, directors and employees, the Administrator or the Trustee shall
be responsible for any reports furnished by any specialist retained or employed
by the Administrator but they shall be entitled to rely thereon as well as on
certificates furnished by an accountant, and on all opinions of counsel.  The Employer, its officers, directors and
employees, the Administrator and the Trustee shall be fully protected with
respect to any action taken or suffered by them in good faith in reliance upon
such specialist, accountant or counsel, and all actions taken or suffered in
such reliance shall be conclusive upon each of them and upon all Employees,
Participants, Former Participants, Beneficiaries and any other persons
interested hereunder and under the Trust Agreement.


11.5         Compensation;
Liability.  (a)              The Administrator shall be
entitled to reimbursement for its reasonable expenses incurred hereunder.  Individuals serving as Administrator who are
also full-time employees of the Employer shall not be compensated for their
services as Administrator, except as their compensation as employees may be
such compensation.  Other individuals or
entities serving as Administrator shall be entitled to reasonable compensation
for their services.


(b)           The
Employer shall indemnify the Administrator who is also a full-time employee of
the Employer against all liability occasioned by any act or omission to act,
provided that the Administrator acted in good faith.  The Employer shall be entitled to defend or
maintain, either in its own name or in the name of the Administrator or any
member thereof, any suit or litigation arising hereunder with respect to the
Administrator or any member thereof, and may act as counsel or employ its own
counsel for such purpose.  Except as may
be required by ERISA, no



 46
 






 



bond or other
security shall be required of the Administrator for the faithful performance of
its duties hereunder.


11.6         Claims Procedure.


(a)           Any Participant,
surviving spouse, Beneficiary or authorized representative of a Participant,
surviving spouse, or Beneficiary (the “claimant”) may file a written claim for
a Plan benefit with the Employer’s Human Resources Department.  Written notice of the disposition of the
claim shall be furnished to the claimant within 90 days after the claim is
filed unless the Administrator needs additional time to process the claim.  In such case, the Administrator shall notify
the claimant in writing, and shall indicate the special circumstances requiring
an extension of time and the date by which the Administrator expects to render
the determination.  The additional time
needed to review the claim may not exceed 90 days from the date the initial 90
day review period ends.


In the case of a claim for disability benefits, the Administrator shall
notify the claimant of its determination within a reasonable period of time not
to exceed 45 days after the claim is filed. 
This period may be extended once for an additional 30 days if the
Administrator determines that additional time is needed due to matters beyond
its control, and notifies the claimant before the end of the initial 45-day
period of the circumstances requiring the extension, and the date by which it
expects to make a decision.  An
additional 30 day extension is available if the Administrator determines that
due to circumstances beyond its control a determination cannot be made, and it
notifies the claimant before the end of the first extension period of the
circumstances necessitating the second extension and when the claimant can
expect a determination.  Notices of
extension under this paragraph must explain (i) the standards used to determine
entitlement to benefits, (ii) the unresolved issues that prevent a
determination, and (iii) any additional information needed to make a
determination.  The claimant shall have
at least 45 days from receipt of the notice to provide the requested
information.


If the claim is denied, the Administrator’s written notice to the
claimant shall contain the following information in a manner clearly understood
by the claimant:


(i)            The specific
reasons for the denial;


(ii)           Specific reference
to pertinent Plan provisions on which the denial is based;


(iii)          A description of
any additional material or information that the claimant needs to provide to
perfect the claim, and an explanation of why the requested material or
information is necessary;


(iv)          A description of the
Plan’s review procedures and the time limits that apply to such procedures and
a statement that the claimant has the right to bring an action under ERISA
Section 502(a) following an adverse benefit determination on review as
described in (b) below;



 47














 


 


(v)           In the case of
disability benefits:


(1)           If an internal rule, guideline, or protocol was used to
deny a claim, a statement that a copy of such rule, guideline or protocol that
was used to deny the claim is available free of charge and upon request; and


(2)           If the denial is based on medical necessity or
experimental treatment or similar exclusion or limit, a statement that an
explanation shall be available free of charge and upon request.


(b)           Any claimant who has
been denied a benefit by a decision of the Administrator pursuant to (a) above
shall have 60 days from receipt of the written notification provided for in (a)
above to appeal the adverse benefit determination.  On appeal, the Administrator will provide:


(i)            Claimants the
opportunity to submit written comments, documents, records, and other
information related to the claim;


(ii)           That a claimant may
obtain, upon request and free of charge, reasonable access to all documents,
records, and other information related to the claim; and


(iii)          For a review that
takes into account all comments, documents, records, and other information
submitted by the claimant with respect to the claim regardless of whether such
information was submitted or considered in the initial determination.


If the denied benefit was a disability benefit, a claimant may appeal a
determination within 180 days following receipt of an adverse
determination.  The review will be
conducted by a Plan fiduciary who did not make the initial adverse determination
or is a subordinate of the individual who rendered the initial adverse
determination.  The review shall not take
into account the initial adverse determination. 
In the event that the denial was based in whole or in part on medical
judgment, including determinations with respect to a particular treatment ,
drug, or other item that is experimental, investigational, or not medically
necessary or appropriate, the Administrator shall consult with a health care
professional who has the appropriate training and experience to provide a
medical judgment.  Such health care
professional may not have been involved in the original determination or be the
subordinate of an individual involved in the original determination.  The Administrator shall provide the
identification of the medical or vocational experts consulted with respect to
an adverse determination even if the advice was not relied upon in the
determination.


If the Administrator denies a claim in whole or in part on review, then
the claimant must be notified within 60 days after the claimant files a request
for a review of the initial adverse benefit determination unless the
Administrator needs additional time to process the review.  In such case, the Administrator shall notify
the claimant in writing, and shall indicate the special circumstances requiring
an extension of time and the date by which the Administrator 



 48
 






 



expects
to render the benefit determination.  The
additional time needed to review the claim may not exceed 60 days from the date
the initial 60-day review period ends. 
If the claim is for disability benefits, “60 days” shall be replaced by “45
days” everywhere “60 days” appears in this paragraph.


If the Administrator holds regular meetings at least quarterly, then a
benefit determination must be made no later than the date of the meeting
immediately following the request for review if the request is filed 30 or more
days prior to the meeting.  If a request
is filed within 30 days prior to the meeting, then the determination must be
made by the date of the second meeting after the Administrator receives the
request for review.  If special
circumstances apply that require an extension of time, then the determination
may be made by the third meeting following receipt of the request for review.  In such a case, the Administrator must,
before the extension period begins, provide the claimant with written notice of
the extension, a description of the special circumstances and the date by which
the benefit determination is expected to be made.  The Administrator must notify the claimant of
the determination no later than five days after the determination is made.


The Administrator shall notify the claimant in writing of its benefit
determination.  In the event of an
adverse determination, the notice shall contain the following information in a
manner clearly understood by the claimant:


(i)            The specific
reasons for the denial;


(ii)           Specific reference
to pertinent Plan provisions on which the denial is based;


(iii)          A statement that
the claimant may receive free of charge and upon request, reasonable access to
and copies of all documents, records and any other additional material or
information relevant to the claim for benefits;


(iv)          A statement
describing any voluntary appeal procedures under the Plan and the claimant’s
right to information about the procedures and a statement that the claimant has
the right to bring an action under ERISA Section 502(a); and


(v)           In the case of
disability benefits:


(1)           If an internal rule, guideline, or protocol was used to
deny a claim, a statement that a copy of such rule, guideline or protocol that
was used to deny the claim is available free of charge and upon request;


(2)           If the denial is based on medical necessity or
experimental treatment or similar exclusion or limit, a statement that an
explanation shall be available free of charge and upon request; and



 49
 






 



 


(3)           The following statement: 
“You and your plan may have other voluntary alternative dispute
resolution options, such as mediation. 
One way to find out what may be available is to contact your local U.S.
Department of Labor Office and your State insurance regulatory agency.”


(c)           If a decision is not
rendered by the Administrator within the time periods prescribed above, such
claim shall be deemed denied.


(d)           It is intended that
the claims procedure of this Plan be administered in accordance with the claims
procedure regulations of the Department of Labor set forth in 29 CFR
§2560.503-1.





ARTICLE 12


Trustee; Participant-Directed Investments


12.1         Trust
Agreement.  The Employer and the
Trustee shall enter into a Trust Agreement establishing the Trust Fund and
prescribing the powers, duties, obligations and functions of the Trustee with
respect to the Trust Fund.  Such Trust
Agreement, as in effect from time to time, is hereby incorporated into and made
a part of this Plan.


12.2         Investment
of Trust Fund.  Except as provided in
Section 12.3, the Trustee shall invest and reinvest the assets of the Trust
Fund in its discretion in accordance with all applicable rules, regulations and
requirements, including, among others, the prudence and diversification
requirements of ERISA.  The Trust
Agreement may provide for investment of all or any part of the Trust Fund in a
common or collective trust and for the appointment by the Trustee of a
corporation or trust company as trustee or managing agent of that portion of
the Trust Fund to be so invested; during such time as any part or all of the
Trust Fund is so invested, such common or collective trust shall constitute a
part of this Plan.


12.3         Participant-Directed
Investments.  (a)  To the extent directed by the Administrator,
the Trustee shall invest the assets of the Trust Fund allocable to each
Participant’s Account solely in accordance with the investment instructions of
the Participant.


(b)           To the extent permitted by the Administrator and in
accordance with the rules of Section 404(c) of ERISA, each Participant shall
have the authority and responsibility to direct the Administrator as to the
investment of assets in his Accounts from time to time.  The Administrator is the fiduciary designated
under the Plan for receiving investment instructions from Participants and,
upon the request of any Participant who has provided an investment instruction
under this section, shall provide a written confirmation of the investment instruction
to such Participant.  In the absence of
investment instructions by a Participant, an Account shall be invested in the
primary investment fund described in subsection (e).


Anything contained in this Section 12.3 to the
contrary notwithstanding, for the period beginning August 27, 2001 and ending
December 31, 2002, 50% of Employer Matching 



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Contributions made
pursuant to Section 4.1 shall be invested in the White Mountains Stock Fund.


(c)           The
Administrator shall from time to time specify investment options which, subject
to subsection (d), shall be available for the investment of amounts allocated
to a Participant’s Account.  Such
investment options may include: (i) regulated investment companies, within the
meaning of Section 851(a) of the Code, including closed-end investment
companies and open-end mutual funds; (ii) bank collective investment funds for
employee retirement plans; (iii) insurance company group or individual annuity
contracts; (iv) a bank account; (v) a separate brokerage or agency account
subject to the Participant’s direction and control; (vi) individual life
insurance policies; and (vii) any other investment media authorized by the
Administrator for the investment of Accounts.


Notwithstanding anything contained herein to the
contrary, the investment options under the Plan shall include the White
Mountains Stock Fund and, on and after the IPO Date, the OneBeacon Stock Fund.


(d)           In
connection with the designation of investment options, the Administrator may
establish a schedule of fees or charges payable by an Account for the use of
any one or more of the investment options, which fees or charges shall be the
amounts reasonably estimated by the Administrator as required to defray the
expenses incurred by the Trust Fund to maintain the investment option or
options.  Any such fees or charges shall
be determined and payable on a uniform and nondiscriminatory basis by every
Account selecting the particular investment option.


(e)           The Administrator may from time to
time designate one of the available investment options as the “primary
investment fund”.  Such primary
investment fund shall be as determined from time to time by the Administrator
and as communicated to Participants.


(f)            If
the Administrator discontinues the availability of any previously offered
investment option, it shall give notice of such action to Participants.  The Administrator shall determine whether or
to what extent investments therein may be continued or must be liquidated and
transferred to one or more of the other available investment options.


(g)           To the extent permitted by the
Administrator and subject to such reasonable and nondiscriminatory rules and
procedures as the Administrator or the Trustee may adopt from time to time,
each Participant may direct the investment of his Accounts in any one or more
of the available investment options, except that a Participant may not direct
any of the following investments:  (i)
stock or securities of the Employer other than investment in the White
Mountains Stock Fund, and, on and after the IPO Date, the OneBeacon Stock Fund,
or any other investment that may inure to the direct or indirect benefit of any
Employer, or any of its officers, directors, shareholders or employees, other
than the Participant; (ii) any investment that would constitute a “prohibited
transaction” within the meaning of Section 406 of ERISA or Section 4975 of the
Code; (iii) any investment that would constitute a direct or indirect
distribution of benefits or transfer to or for the benefit of the Participant; (iv)
any investment that would result in 



 51
 






 



the realization by the
Trust Fund of unrelated business taxable income as defined in Section 512 of
the Code; or (v) any investment in a collectible within the meaning of Section
408(m) of the Code.


(h)           To
the extent permitted by the Administrator, each Participant may control and
alter the investment of his Accounts within the limits set forth in this
section.  All directions from a
Participant with respect to the investment of his Accounts shall be given by
the Participant in such manner as the Administrator shall require or permit
from time to time.  Any costs actually
incurred by the Trustee with respect to the acquisition of assets pursuant to a
Participant’s election of available investment options (including, without
limitation, brokerage commissions, redemption fees, account maintenance
charges, investment management fees and taxes) shall be charged to the
Participant’s Accounts.  In the event
that a transfer between investment options is effected without the actual sale
of shares of a regulated investment company or liquidation to cash of any other
investments, the amount deemed transferred from the investment option shall be
the bid or redemption price, whichever is higher, of the investment company
shares that the Participant directed be transferred or the fair market value of
other investments, as determined by the Administrator, as of the date on or as
of which the transfer occurs.


(i)            As
promptly as possible after receipt of each contribution by or on behalf of a
Participant, the Trustee shall invest such contribution in the investment
option or options selected by the Participant. 
In the absence of an effective written, electronic or telephonic
election by a Participant, the Trustee shall take such action as it deems
appropriate, including, without limitation, investment in the investment option
described in subsection (e) (or if there is no such investment option, in the
available investment option providing for maximum safety of principal) or
retention of such contribution uninvested pending receipt of an effective
election from the Participant.  If
investment of a contribution or transfer from one investment option to another
on behalf of a Participant in accordance with the Participant’s election is delayed
or rendered impossible because the investment option elected by the Participant
is not readily available in the ordinary course of business, the Trustee shall
invest such contribution or transferred amount in the investment option
described in subsection (e) (or if there is no such investment option, in the
available investment option providing for maximum safety of principal) until
such time as investment in the appropriate investment options(s) can be made.


(j)            To
the extent the Plan satisfies the requirements of Section 404(c) of ERISA, the
Employer, the Administrator and the Trustee, and any officer, director,
shareholder, partner, employee or agent of any of them, shall not have any
liability or responsibility for any loss or expense to a Participant’s Account
resulting from any investment made in accordance with the directions of the
Participant under this section.


(k)           For
purposes of this section, the term “Participant” includes a Former Participant
and, following the death of a Participant or Former Participant, the
Beneficiary or Beneficiaries of either.



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12.4         Allocation of Trust Income.  (a)  As
of the last day of each Plan Year, and as of such additional dates during each
Plan Year as the Administrator may direct, income, gains, losses and expenses
of the Trust Fund shall be allocated to the Accounts of Participants in the
proportion that the balance of each such Account bears to the total balances of
all Accounts on the last date as of which such amounts were allocated, taking
into account any refunds, withdrawals or distributions from such Account since
such date.


(b)           Notwithstanding
subsection (a), to the extent that a Participant, Former Participant or
Beneficiary directs the investment of his Account(s) under Section 12.3,
income, gains, losses and expenses of the Trust Fund attributable to such
Account(s) shall be allocated solely to such Account(s).


12.5         Trustee’s
Accounts.  The assets of the Trust
Fund shall be valued at their fair market value annually by the Trustee as of
the last day of each Plan Year, or such other date as may be designated by the
Administrator, and the values reported to the Employer and the Administrator,
together with a statement of receipts and disbursements for the Plan Year and
such other information regarding the Trust Fund as the Employer may request.


12.6         Trustee’s
Records.  The Trustee shall keep and
maintain records under the direction of the Administrator which shall
accurately disclose at all times the state of the Trust Fund.


12.7         Trustee’s
Liability.  The Trustee shall not be
responsible for the validity of the Plan or Trust Agreement or for the adequacy
of the Trust Fund to meet its obligations hereunder, but shall be accountable
only for funds paid to it under the Trust Agreement.


12.8         Trustee’s
Compensation and Expenses.  The
Trustee shall be entitled to reimbursement for its reasonable expenses incurred
hereunder.  An individual serving as
Trustee who is also a full-time employee of the Employer shall not be
compensated for his services as Trustee, except as his compensation as an
employee of the Employer may be such compensation.  Other individuals and any corporation or
trust company serving as Trustee shall be entitled to compensation for its
services in such amount as the Employer and such Trustee may agree upon from
time to time.  Such reimbursement or
compensation due a Trustee, if not paid by the Employer, shall constitute a
charge upon the Trust Fund.  The Trustee
shall be entitled to indemnification from the Employer only if and to the
extent so provided in the Trust Agreement.


12.9         Voting
Rights with Respect to White Mountains Stock and OneBeacon Stock.  Each Participant (or Beneficiary of a
deceased Participant) shall be entitled to instruct the Trust with respect to
voting and/or giving proxies to vote the number of shares, including fractional
shares, of White Mountains Stock in the White Mountains Stock Fund allocated to
the Participant’s (or Beneficiary’s) Account, and, on and after the IPO Date,
the number of shares, including fractional shares, of OneBeacon Stock in the
OneBeacon Stock Fund allocated to the Participant’s (or Beneficary’s) Account,
on the applicable record date with respect to any corporate matter which
involves the voting of such shares.  With
respect to the voting of shares of White Mountains Stock in the White Mountains
Stock Fund, and, on and after the IPO Date, 



 53
 






 



shares of
OneBeacon Stock in the OneBeacon Stock Fund, the following additional
provisions shall apply:


(a)           Effect
of Directions Received from Participants on General Corporate Matters.  The Trustee shall designate an individual
(the “Trustee’s Designee”), other than an officer, director or employee of the
Employer or any other Affiliated Employer, to receive all voting directions
from Participants (or Beneficiaries). 
The Trustee’s Designee shall convey the totals of such voting directions
to the Trustee, but the manner in which each individual Participant (or
Beneficiary) instructs the Trustee with respect to voting and/or giving proxies
to vote shall be held by the Trustee’s Designee in confidence and shall not be
divulged or released to any person, including officers or employees of the
Employer or any other Affiliated Employer. 
Unless otherwise required by applicable law —


(i)            The Trustee shall vote or give proxies
to vote such shares of White Mountains Stock held in the White Mountains Stock
Fund and, on and after the IPO Date, shares of OneBeacon Stock held in the OneBeacon
Stock Fund, as directed by the Participants (or Beneficiaries); and


(ii)           Shares of White Mountains Stock in the White Mountains Stock Fund, and,
on and after the IPO Date, shares of OneBeacon Stock in the OneBeacon Stock
Fund, on the applicable record date for which instructions from the
Participants (or Beneficiaries) are not timely received shall be voted (or
proxies shall be given) by the Trustee in the same proportions as the Trustee
votes or gives proxies in accordance with directions of Participants or
Beneficiaries;


provided that if
shares are not voted (and proxies given) pursuant to (i) and (ii), above, then
the Trustee shall vote such shares (and give such proxies) in the Trustee’s
discretion in accordance with the principles of Section 404(a) of ERISA


(b)           Proxy
Statements and Form for Voting Instructions.  The Administrator shall furnish to each
Participant (or Beneficiary) entitled under Section 12.9(a) to instruct the
Trustee with respect to voting or giving proxies to vote those shares of White
Mountains Stock in the White Mountains Stock Fund, and, on and after the IPO
Date, those shares of OneBeacon Stock in the OneBeacon Stock Fund, allocated to
Participant’s (or Beneficiaries) Account a copy of any proxy statement and/or
other information, if any, furnished to the shareholders of WMIG and, on and
after the IPO Date, shareholders of OneBeacon Insurance Group, Ltd.  In connection with each such proxy statement
and other information, if any, the Employer shall also furnish each Participant
(or Beneficiary) with a form on which to give voting instructions to the
Trustee, the name of the Trustee’s Designee to receive voting directions, the
address to which instructions should be mailed, and a statement of the number
of shares of White Mountains Stock and, on and after the IPO Date, OneBeacon
Stock, which the Participant or Beneficiary is entitled to direct the Trustee
to vote or give proxies to vote.


(c)           Rights
on Tender or Exchange Offer.  Each
present or former participant (or, in the event of a Participant’s death, his
Beneficiary) shall have the right, to the extent of the 



 54
 






 



number of shares
of White Mountains Stock and, on and after the IPO Date, OneBeacon Stock,
allocated to his Account, to instruct the Trustee in writing as to the manner
in which to respond to a tender or exchange offer with respect to such shares
of White Mountains Stock and, on and after the IPO Date, OneBeacon Stock.  The Employer shall use its best efforts to
distribute or cause to be distributed in a timely manner to each present or
former Participant (or Beneficiary thereof) such information as will be distributed
to stockholders of WMIG and, on and after the IPO Date, shareholders of
OneBeacon Insurance Group, Ltd., in connection with any such tender offer or
exchange offer.  Upon timely receipt of
such instructions, the Trustee shall respond as instructed with respect to such
shares of White Mountains Stock and, on and after the IPO Date, OneBeacon
Stock.  The instructions received by the
Trustee from Participants shall be held by the Trustee in confidence and shall not
be divulged or released to any person, including officers or employees of the
Employer or any Affiliated Employer.  If
the Trustee does not receive timely instruction from a Participant (or
Beneficiary) as to the manner in which to respond to such a tender or exchange
offer, such Participant (or Beneficiary) shall be deemed to have instructed the
Trustee not to tender or exchange the shares of White Mountains Stock and, on
and after the IPO Date, OneBeacon Stock, allocated to his Account, and the
Trustee shall not tender or exchange any such shares.


If pursuant to instructions from any Participant or
Beneficiary (each in this Section 12.9(c) being referred to as a “Tendering
Participant”) given pursuant to this Section 12.9(c), the Trustee tenders
shares of White Mountains Stock or, on and after the IPO Date, OneBeacon Stock,
in the Tendering Participant’s Account, and receives cash for these shares, the
portion of the Tendering Participant’s Account, if any, invested in the White
Mountains Stock Fund and, on and after the IPO Date, OneBeacon Stock, shall be
reduced by the number of shares in the White Mountains Stock Fund and, on and
after the IPO Date, the OneBeacon Stock Fund, as applicable, portion of his
Account which were sold, and the proceeds of the sale if they consist of cash
shall be invested in any one or more of the other available investment options
as directed by the Tendering Participant. 
If the Trustee receives property other than cash for any tendered shares
of White Mountains Stock, and, on and after the IPO Date, OneBeacon Stock, the
portion of the Tendering Participant’s Account, if any, invested in the White
Mountains Stock Fund shall be reduced by the number of shares in the White
Mountains Stock Fund and, on and after the IPO Date, the OneBeacon Stock Fund,
as applicable, portion of his Account which were sold, the property received
shall be retained in a separate fund within the Trust pending a decision by the
Trustee as to its disposition, and the Tendering Participant shall be credited
with his allocable share of such separate fund.


(d)           Confidentiality.  The Trustees shall not reveal or release to
the Employer, any affiliated company, or their officers, directors, employees,
or representatives any individual Participant’s or Beneficiary’s voting
directions.  If some but not all White
Mountains Stock and, on and after the IPO Date, OneBeacon Stock, is sold,
exchanged, or transferred pursuant to an offer, the Employer, with the Trustees’
cooperation, shall take such action as is necessary to maintain the
confidentiality of Participant and Beneficiary records including, without
limitation, establishment of security systems and procedures which restrict
access to Participant and Beneficiary records and retention of an independent
agent to maintain such records.  If an
independent record-keeping agent is retained, such agent must agree, as a
condition of its 



 55
 






 



retention by the
Employer or the Trustees, not to disclose the composition of any affected
Participant or Beneficiary account to the Employer, any affiliated company, or
its officers, directors, employees, or representatives; provided, that at such
time as the Trustees shall determine that such record-keeping duties may be
returned to the Employer without breaching the confidentiality of a Participant’s
or Beneficiary’s directions as to such offer, then the record-keeping duties
may be returned to the Employer, but in no event shall this return be sooner
than one year after such sale, exchange, or transfer.


Notwithstanding the foregoing, the Trustees may inform
the Employer or other party soliciting proxies or consents, at their request,
of the approximate number of shares of White Mountains Stock and, on and after
the IPO Date, OneBeacon Stock, for which voting directions have been received
as of a given point in time and the manner in which such shares are required to
be voted in the aggregate when the votes are cast by the Trustees.


ARTICLE 13


Amendment and Termination


13.1         Permanence
of Plan.  The Employer has
established the Plan with the bona fide intention and expectation that it will
be able to make contributions indefinitely, but the Employer shall be under no
obligation or liability whatsoever to maintain the Plan (or the Trust) for any
given length of time.


13.2         Right
to Amend or Terminate.  (a)  The Chief Executive Officer of the Employer,
or an officer designated by him (hereinafter referred to as the “Designated
Officer”), may approve and execute changes of a technical nature to the Plan
which do not materially affect the substance thereof and which, in the opinion of
the Chief Executive Officer or the Designated Officer, are necessary and
desirable.  In addition, the Chief
Executive Officer, or the Designated Officer may approve and execute any
amendment to the Plan that may be necessary to conform the Plan to the requirements
of the District Director of Internal Revenue, of any law or regulation to which
the Plan is subject.  The Employer
reserves the right at any time and from time to time to amend the Plan by
resolution of the Board, and to terminate the Plan or the Trust by delivering
to the Trustee a copy of a notice of termination executed by an officer of the
Employer duly authorized by the Board. 
Notwithstanding the preceding sentence, the Employer, the Chief
Executive Officer and the Designated Officer shall have no power to amend or
terminate the Plan or to terminate the Trust in such manner as would:


(i)            increase the duties or liabilities
of the Trustee without the written
consent of the Trustee;


(ii)           cause or permit any of the Trust
assets to be diverted to purposes
other than for the exclusive benefit of the Participants, Former Participants
or their Beneficiaries;



 56
 






 



 


(iii)          cause any reduction in the amount
theretofore credited to any Participant, Former Participant or Beneficiary or,
except as permitted by Regulations, deprive any such person of any benefit distribution
option theretofore accrued and available;


(iv)          deprive any Participant, Former
Participant or Beneficiary
of any optional time or, except as permitted under subsection (c), form of
benefit payment with respect to amounts accrued prior to the effective date of
such amendment; or


(v)           cause or permit any portion of the
Trust Fund to revert to or
become the property of the Employer, except as provided in this Article or
Section 14.1.


(b)           If
the Employer adopts an amendment changing the vesting provisions of the Plan,
or any other amendment that directly or indirectly affects the computation of
the vested percentage of any Account, a Participant or Former Participant who
has at least three Years of Service may elect to have his vested percentage
determined in accordance with the vesting schedule in effect immediately before
the effective date of the amendment, unless the individual’s vested percentage
under the Plan as amended cannot at any time be less than such percentage
determined without regard to such amendment. 
Such election shall be made in writing and be filed with the
Administrator by the latest of (i) 60 days after the amendment is adopted, (ii)
60 days after the amendment becomes effective, or (iii) 60 days after written
notice of the amendment is issued to the Participant or Former Participant by
the Administrator.  The Participant or
Former Participant must have completed the required three years by the latest
date on which an election may be filed hereunder.  A Participant or Former Participant’s vested
percentage shall not be less than the percentage to which he would have been
entitled in the event of separation from service immediately before the date on
which such amendment is adopted or the effective date of such amendment,
whichever is later.


(c)           The
Employer may amend the Plan to eliminate or restrict the ability of a
Participant to receive payment of his Account under a particular optional form
of benefit, provided the amendment satisfies the following conditions:


(i)            The amendment provides a single-sum
distribution form that is otherwise identical to the optional form of benefit
eliminated or restricted.  For purposes
of this paragraph, a single-sum distribution form is otherwise identical only
if it is identical in all respects to the eliminated or restricted optional
form of benefit (or would be identical except that it provides greater rights
to the participant) except with respect to the timing of payment after
commencement.


(ii)           The amendment shall not apply to any distribution earlier than the earlier
of: (A) the 90th day after the date the Participant receiving
the distribution has been furnished a summary that reflects the amendment and
that satisfies the ERISA requirements at 29 CFR 2520.104b-3 (relating to a
summary of material modifications) or (B) the first day of the second Plan Year
following the Plan Year in which the amendment is adopted.



 57
 






 



 


13.3         Termination of Plan or Plan and
Trust.  (a)  Both the Plan and the Trust shall
automatically terminate upon the bankruptcy or dissolution of the Employer
without continuation of the business of the Employer by a successor
proprietorship, partnership or corporation that assumes the obligations of the
Employer hereunder. The Plan and, if so directed by the Employer, the Trust
shall terminate upon delivery to the Trustee of a notice of termination
executed on behalf of the Employer by an officer specifying the date as of
which the Plan, or the Plan and the Trust, shall terminate.


(b)           A successor to the business of the
Employer may continue the Plan and Trust by executing appropriate supplementary
instruments, and such successor shall thereupon succeed to all of the rights,
powers and duties of the Employer hereunder. 
A successor to the business of a Participating Employer may, with the
consent of the Sponsor, continue the Plan and Trust by executing appropriate
supplementary instruments, and such successor shall thereupon succeed to all of
the rights, powers and duties of the Participating Employer hereunder.  The employment of any Employee who has
continued in the employ of any such successor shall not be deemed to have been
terminated or severed for any purpose hereunder if any such supplementary
instrument so provides.


13.4         Vesting on Termination or Partial
Termination of Plan.  Notwithstanding
any other provision of the Plan, upon the termination or partial termination of
the Plan (irrespective of whether the Trust is terminated), the rights of each
Participant or Former Participant, or in the case of a partial termination, the
rights of each Participant or Former Participant affected by such partial
termination, and each Beneficiary, to benefits accrued to the date of such
termination or partial termination, to the extent then funded, shall become
nonforfeitable.


13.5         Liquidation
of Trust.  (a)  In the event of the termination of the Plan,
the Employer shall direct the Trustee:


(i)            to reduce to cash all or part of the
Trust Fund, as the Employer may deem appropriate;


(ii)           to pay the liabilities, if any, of
the Trust;


(iii)          to value the remaining assets of the
Trust as of the date of termination; and


(iv)          to allocate any previously unallocated
assets and adjust
the Account balances as provided in Article 5.


(b)           In
the event the Trust is also terminated, the Employer shall also direct the
Trustee to distribute the assets of the Trust in cash or in kind, or partly in
cash and partly in kind to the persons having an interest in the Trust in
proportion to the amounts standing to the credit of their respective Accounts
as of the termination date.



 58














 


 


In the case of any distributee described herein at the
time of distribution upon termination of the Plan or Trust whose whereabouts
are unknown, the Administrator shall notify such individual at the last known
address by certified mail with return receipt requested advising such
individual of the right to such a benefit. 
If the distributee cannot be located in this manner, the Trustee shall
establish a savings account for the individual’s benefit in which the
individual’s Account balance shall be deposited.  Upon the distribution of all Plan assets, the
Trustee shall be discharged from all obligations under the Plan and Trust, and
no Participant or Beneficiary shall have any further rights or claims
thereunder.


If the Trust is not terminated, the Employer shall so
notify the Trustee and the Trustee shall continue to administer the Trust Fund
as provided in the Plan and the Trust Agreement.


13.6         Merger
or Consolidation of Plan.  The Plan
shall not merge or consolidate with another plan or transfer assets and
liabilities to another trust, unless each Participant is, in the event of plan
termination immediately after the merger, consolidation or transfer, entitled
to a benefit at least equal to the benefit such Participant would have been
entitled to receive if the Plan had terminated immediately before such merger,
consolidation or transfer.  In any
transaction described in the preceding sentence, the Trust Fund shall be
allocated in accordance with Section 414(l) of the Code.


ARTICLE 14


Exclusive Benefit;
Expenses; Spendthrift Provision


14.1         Exclusive Benefit.  (a) Except as otherwise provided in this
Article, the assets of the Plan shall never be paid or revert to the Employer,
or be used for any purpose other than the exclusive purpose of providing
benefits to Participants, Former Participants or their Beneficiaries and
defraying the reasonable expenses of administering the Plan.


(b)           If
the Administrator determines that the Employer has contributed any amount to
the Trustee by reason of a mistake of fact, the Administrator may direct the
Trustee in writing to return to the Employer, within one year after the payment
of the contribution, the lesser of the amount actually contributed by such
mistake of fact or its then current value.


(c)           All
contributions hereunder are made on the condition that the Plan and the Trust
initially qualify under Sections 401(a) and 501 of the Code.  If the Internal Revenue Service determines
that the Plan and Trust do not initially qualify, the Administrator, upon the
written request of the Employer, shall direct the Trustee to return to the
Employer the then current value of any Employer contributions within one year
following the denial of initial qualification.


(d)           All contributions hereunder other
than After-Tax Contributions are made on the condition that they are deductible
under Section 404 of the Code.  If the
Internal Revenue Service determines that any portion of the Employer’s
contribution for a Plan Year is not 



 59
 






 



deductible, the
Administrator, upon the written request of the Employer, shall direct the
Trustee to return to the Employer the lesser of such disallowed portion or its
then current value within one year following the disallowance of the deduction.


14.2         Expenses.  All expenses incurred in establishing and
operating the Plan, including, but not limited to, legal fees, brokerage
commissions, administrative expenses and Trustee’s expenses, shall be paid by
the Trustee from the Trust Fund to the extent permitted under Sections
403(c)(1) and 404(a)(1)(A) of ERISA, unless paid by the Employer.  In accordance with Prohibited Transaction
Class Exemption 80-26, the Employer may advance to the Trustee amounts
necessary to pay the ordinary operating expenses of the Plan or may pay such
expenses itself, and in either event the Employer shall be entitled to be
reimbursed by the Trustee for such advances or payments.


14.3         Prohibition
on Assignment or Alienation.  The
beneficial interest in the Trust of a Participant, Former Participant or
Beneficiary shall not be assignable or subject to attachment or receivership,
nor shall it pass to any trustee in bankruptcy or be reached or applied by any
legal process for the payment of any obligation of the Participant, Former
Participant or Beneficiary


14.4         Qualified
Domestic Relations Order.  (a)  Section 14.3 shall not apply to a qualified
domestic relations order.  The
Administrator shall abide by the terms of any qualified domestic relations
order.  A “qualified domestic relations
order” means any judgment, decree or order (including approval of a property
settlement agreement) that creates or recognizes the existence of an alternate
payee’s right to receive all or a portion of the benefits payable to a
Participant hereunder pursuant to a state’s domestic relations law relating to
the provision of child support, alimony payments or marital property rights to
a spouse, former spouse, child or other dependent of the Participant, which
specifically states:


(i)            The name and last
known mailing address of the Participant and of each alternate payee covered by
such order;


(ii)           The amount or
percentage of the Participant’s benefits to be paid by the Plan to each
alternate payee or the manner in which such amount or percentage is to be
determined;


(iii)          The
number of payments or the period to which such order applies; and


(iv)          The
name of each plan to which such order applies.


(b)           The Administrator shall establish
reasonable written procedures to determine the qualified status of domestic
relations orders and to administer distributions made



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thereunder consistent
with the following:


(i)            The
Administrator shall promptly notify the Participant and any named alternate
payee of the receipt of a domestic relations order and the procedures used for
determining whether such order is qualified under Section 414(p) of the Code.


(ii)           The
Administrator shall, within a reasonable time following receipt, determine
whether such order is qualified and notify the Participant and each alternate
payee of such determination.


(iii)          During
the period beginning upon receipt of the order and ending on the earlier of the
date of determination of its qualified status or the expiration of 18 months,
the Administrator shall separately account for the amounts which will be
payable to the alternate payee if the domestic relations order is determined to
be qualified.


(iv)          If,
within 18 months of receipt, the order is determined to be qualified, the
Administrator shall pay the amounts described in paragraph (iii) to the
alternate payee pursuant to the terms of the order.  If, within 18 months of receipt, the order is
determined not to be qualified, or the order’s status is unresolved, the
Administrator shall pay the amounts described in paragraph (iii) to the person
or persons entitled to such amounts under the terms of the Plan as if no order
had been received.


(v)           A
determination that a domestic relations order is qualified made later than 18
months after the receipt of such order shall only operate prospectively.


(c)           Payments
made under this section shall completely discharge the Plan of its obligations
with respect to the Participant and each alternate payee to the extent of any
such payments.


(d)           To the extent authorized by a
qualified domestic relations order, a distribution under the Plan may be made
to an alternate payee before the Participant whose benefits are subject to such
order attains the earliest retirement age (as defined in Section 414(p)(4)(B)
of the Code), provided that the alternate payee consents to such distribution
if the amount payable to the alternate payee exceeds $5,000 ($1,000 on and
after March 28, 2005).


14.5         Offset of Benefits.  (a) 
Subject to subsection (b), the foregoing prohibitions against alienation
shall not apply to any offset of a Participant’s benefits, made in accordance
with the provisions of paragraphs (C) and (D) of Section 401(a)(13) of the
Code, against an amount that the Participant is ordered or required to pay to
the Plan if the order or requirement to pay is due to:  (i) a judgment of conviction against the
Participant for a crime involving the Plan; (ii) a civil judgment (including a
consent order or decree) entered by a court in an action brought against the
Participant in connection with a violation (or alleged violation) of the
fiduciary provisions of part 4 of subtitle B of title I of ERISA; or (iii) a
settlement agreement between the Department of Labor or the Pension Benefit
Guaranty Corporation and the Participant in connection with a violation (or
alleged violation) of the fiduciary provisions of ERISA.



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(b)           This
section applies to judgments, orders and decrees issued, and settlement
agreements entered into, on or after August 5, 1997.  Any such judgment, order, decree or
settlement agreement must expressly provide for the offset of all or part of
the amount ordered or required to be paid to the Plan from the Participant’s
benefits under the Plan.


(c)           In the case of a married Participant
to whom the survivor annuity requirements of Section 401(a)(11) of the Code
apply, no offset shall be made under this section unless the written consent of
the Participant’s spouse, witnessed by a notary public or a representative of
the Plan, has been obtained or it has been established to the satisfaction of
the Administrator that such consent cannot be obtained because the Participant
has no spouse, because the spouse cannot be located, or because of such other
circumstances as may be prescribed in Regulations under Section 417 of the
Code.


ARTICLE 15


Affiliated Employer Provisions


15.1         Affiliated Employer Requirements.  (a) 
For purposes of Section 2.3 and the other provisions of the Plan in
which such term appears, “Affiliated Employers” means the Employer and all
corporations, partnerships, trades or businesses (whether or not incorporated)
that constitute a controlled group of corporations with the Employer, a group
of trades or businesses under common control with the Employer, an affiliated
service group or other controlled group, within the meaning of Section 414(b),
Section 414(c), Section 414(m) or Section 414(o), respectively, of the Code.  For purposes of the limitations on
contributions in Section 5.3, “Affiliated Employers” means the Employer and all
corporations, partnerships, trades or businesses (whether or not incorporated)
that constitute a controlled group of corporations with the Employer or a group
of trades or businesses under common control with the Employer, within the
meaning of Section 414(b) or Section 414(c) of the Code, as modified by Section
415(h) of the Code, or that constitute an affiliated service group or other
controlled group within the meaning of Section 414(m) or Section 414(o) of the
Code.


(b)           In furtherance and not in limitation
of the other provisions of this Plan, all service of an Employee with any one
or more of the Affiliated Employers (after such entity has become an Affiliated
Employer) shall be treated as employment by the Employer for purposes of
determining the Employee’s Hours of Service, Period of Service, eligibility to
become a Participant under Article 3, and the limitations on contributions in
Section 5.3.  The transfer of employment
by an Employee to another Affiliated Employer shall not be a Retirement or
other separation from service with the Employer for purposes of the Plan.


(c)           In addition to those corporations,
partnerships, trades or businesses that constitute Affiliated Employers under
subsection (a), the Employer may from time to time designate other
corporations, partnerships, trades or businesses as Affiliated Employers for
any or all purposes of this Plan, but only if such other corporations,
partnerships, trades or businesses are affiliated with one or more other
Affiliated Employers through joint ownership, continuing or recurring
contractual 



 62
 






 



relationships, or
otherwise, and such designation does not discriminate in favor of Highly Compensated
Employees.  The Employer may remove any
such other corporation, partnership, trade or business from the status of an
Affiliated Employer at any time, but only if any such removal does not have the
effect of reducing the vested balance of the Account of any Participant, Former
Participant or Beneficiary.


15.2         Adoption of Plan by Affiliated
Employer.  With the written approval
of the Employer, an Affiliated Employer may become a Participating Employer by
adopting the Plan for the benefit of its employees.  In the event of such adoption, the Affiliated
Employer shall by appropriate written instruments(s) join in the Plan and the
Trust Agreement, and the provisions of the Plan shall be construed as necessary
to account for participation herein by the Affiliated Employer and its
employees.  No Affiliated Employer shall
be, or have the power to designate, the Administrator of the Plan, nor shall it
have the power to amend or terminate the Plan or the Trust Agreement, nor shall
it have any of the other powers, duties or responsibilities of the Employer,
such powers as set forth herein being hereby reserved exclusively to the
Employer.  Each Participating Employer
appoints the Employer as its agent to exercise on its behalf any action
required or permitted to be taken under the Plan by the Employer.


ARTICLE 16


Top-Heavy Plan Provisions


16.1         Definitions.  For purposes of this Article:


(a)           (i)      “Top-heavy plan” means this Plan for any
Plan Year beginning after 1983 in which, as of the determination date:


(A)           it is not included in an aggregation
group and the sum of the account balances of key employees exceeds 60% of the
sum of all account balances under the Plan, or


(B)           it is required to be included in a
top-heavy group.


(ii)     Except as otherwise provided in paragraph
(iii), paragraph (i)(A) shall be applied by taking into account distributions
made to any employee or beneficiary during the one-year period ending on the
determination date and any amount distributed under a terminated plan which
would have been required to be included in the aggregation group.  In the case of a distribution made for a
reason other than separation from service, death or disability, the preceding
sentence shall be applied by substituting ‘five-year period’ for ‘one-year
period’.


(iii)    Paragraph (i)(A) shall be applied by
disregarding:


(A)           deductible voluntary contributions;



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(B)           the account balance of a former key
employee (or the beneficiary of a former key employee) for all Plan Years after
ceasing to be a key employee;


(C)           for Plan Years beginning after
December 31, 1984, the account balance of an individual who has not performed
services for an Affiliated Employer at any time during the Plan Year ending on
the determination date;


(D)           any account balance attributable to
employer contributions rolled over or transferred on behalf of an individual
after December 31, 1983, which contributions were originally made to a
qualified retirement plan maintained by an employer other than an Affiliated
Employer or were otherwise rolled over or transferred into the Trust Fund at
the direction of the individual; and


(E)            benefits paid on account of death,
to the extent such benefits exceed the individual’s account balance immediately
before death.


The account balance of an
individual that has been disregarded under subparagraph (C) shall be taken into
account on the determination date next following the date on which such
individual again performs services for an Affiliated Employer.


(b)             “Top-heavy
group” means the aggregation group which, if viewed as a single plan, would be
a top-heavy plan.  For purposes of the
preceding sentence, the determination of the present value of an accrued
benefit shall be based only on the interest rate and mortality tables used by
the defined benefit retirement plan under which such benefit accrued.  In determining whether the aggregation group
is top-heavy, the accrued benefits or the account balances of all plans shall
be valued as of the determination dates for such plans that fall within the
same calendar year.  The accrued benefit
of any non-key employee shall be determined under the method, if any, that
uniformly applies for accrual purposes under all defined benefit plans
maintained by the aggregation group or, if there is no such method, as if such
benefit accrued not more rapidly than under the slowest accrual rate permitted
under the fractional accrual rule of Section 411(b)(1)(C) of the Code.


(c)             “Determination
date” means, for this Plan and any other plan included in the aggregation
group, the last day of such plan’s preceding plan year, or in the case of the
first plan year of the plan, the last day of such plan year.


(d)           (i)      “Aggregation group” means:


(A)           Each qualified defined benefit and
defined contribution retirement plan of the Affiliated Employers in which a key
employee is or was a participant during the Plan Year ending on the
determination date;


(B)           Each other qualified defined benefit
and defined contribution retirement plan of the Affiliated Employers that
enables any plan 



 64
 






 



described in subparagraph (A) to meet the requirements
of Sections 401(a)(4) and 410 of the Code; and


(C)           All other qualified defined benefit
or defined contribution retirement plans of the Affiliated Employers elected by
the Administrator that do not cause the aggregation group to fail to satisfy
the requirements of Sections 401(a)(4) and 410 of the Code.


(ii)     For purposes of this subsection, a
qualified retirement plan shall include any frozen or terminated plan
maintained during the Plan Year ending on the determination date.


(e)           (i)      “Key employee” means an employee who, at
any time during the Plan Year containing the determination date, is:


(A)           An officer of an Affiliated Employer
whose earnings exceed $130,000,  as
adjusted under Section 416(i)(1) of the Code for Plan Years beginning after
2002;


(B)           An owner of more than a 5% interest
in an Affiliated Employer; or


(C)           An owner of more than a 1% interest
in an Affiliated Employer whose earnings from the Affiliated Employers exceed
$150,000 for the Plan Year.


(ii)     For purposes of this subsection, the term ‘employee’
includes a terminated, retired, disabled, deceased or part-time employee, and a
Leased Employee.  A Beneficiary of an
individual described in this subsection shall be considered a key employee.


(iii)    For purposes of paragraph (i)(A), if there
are more than three officers of the Affiliated Employers, no more than 10% of
all employees of the Affiliated Employers, based on the highest number of
employees during the Plan Year ending on the determination date, to a maximum
of 50, shall be treated as officers. 
Individuals performing executive functions for a sole proprietorship,
partnership, association or trust that is an Affiliated Employer shall be
treated as officers.


(iv)    In determining ownership for purposes of
this subsection, the constructive ownership provisions of Section 318 of the
Code shall apply utilizing a 5% test in lieu of the 50% test set forth in
subsection (a)(2)(C) thereof, but the aggregation rules of Section 414(b), (c),
(m) and (o) of the Code shall not apply.


(f)              “Non-key
employee” means an employee who is not a key employee.



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(g)             “Earnings”
means earnings as defined in Section 5.3(a)(ii).  Except for purposes of determining status as
a key employee under subsection (e), an individual’s earnings for any year
shall be deemed not to exceed $220,000, as adjusted under Section 401(a)(17) of
the Code.


(h)             “Year(s)
of service” means the period of service used to determine the vested percentage
of a Participant ‘s benefits under a defined benefit or defined contribution
retirement plan of an Affiliated Employer.


16.2         When Provisions Apply Except
where provided otherwise, the following sections of this Article shall apply
for any Plan Year during which this Plan is a top-heavy plan.  Notwithstanding the preceding sentence,
Sections 16.3, 16.5 and 16.6 shall not apply to an individual who is included
in a unit of employees covered by a collective bargaining agreement between
employee representatives and one or more employers if retirement benefits were
the subject of good faith bargaining between such representatives and
employers.


16.3         Minimum Contributions.  (a) 
Subject to subsection (b), there shall be allocated to the Accounts of
each non-key employee who is a Participant in the Plan and who has not
separated from service with the Employer at the end of the Plan Year Employer
contributions and forfeitures equal to the lesser of (i) 3% of such Participant’s
earnings for the Plan Year or (ii) the percentage amount of earnings allocated
or required to be allocated to the key employee receiving the highest such
percentage for the Plan Year under this and all other defined contribution
retirement plans required to be included in an aggregation group.  Clause (ii) of the preceding sentence shall
not apply if the Plan and a defined benefit retirement plan are required to be
included in an aggregation group and the Plan enables such other plan to meet
the qualification requirements of the Code. 
Employer contributions on behalf of key employees that are attributable
to amounts deferred under an arrangement described in Section 401(k) of the
Code shall be taken into account for purposes of determining the percentage
amount described in clause (ii) of the first sentence of this subsection, but
such contributions on behalf of non-key employees shall not be taken into
account for purposes of satisfying the requirements of this section.


(b)           If a non-key employee participates in
two or more top-heavy defined contribution retirement plans of the Affiliated
Employers, the minimum contribution requirements of subsection (a) may be
satisfied by combining the contributions provided under such plans.  A non-key employee who during any Plan Year
participates in one or more top-heavy defined benefit retirement plans and one
or more top-heavy defined contribution retirement plans of the Affiliated
Employers shall receive, in lieu of the amount required by subsection (a) a
benefit accrued for the year under the defined benefit retirement plan or plans
at least equal to the defined benefit minimum.


16.4         Eligibility for Top-Heavy Minimum
Benefit.  The eligibility of a
non-key employee who is a Participant in the Plan for a minimum benefit under
Section 16.3 shall be determined without regard to employment on a specified
date or exclusion from participation or failure to accrue a benefit by reason
of compensation being less than a stated amount or failure to make mandatory
contributions.



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16.5         Vesting Requirements.  (a)  If
a Participant is credited with at least one Hour of Service on or after the
first day of a Plan Year during which the Plan is a top-heavy plan, and if the
following schedule would result in faster vesting for the Participant, it shall
be substituted for the vesting provisions of Sections 8.2 and 8.3, commencing
with the first Plan Year in which the Plan is a top-heavy plan:




	
  Less than 3 Years of Vesting
  Service

  	
   

  	
  0

  	
  %

  
	
  At least 3 Years of
  Vesting Service

  	
   

  	
  100

  	
  %

  






 


(b)           The
vesting schedule set forth in subsection (a) shall apply only to Plan Years in
which the Plan is a top-heavy plan.  When
the vesting schedule set forth in subsection (a) ceases to apply by reason of
the preceding sentence, Section 13.2(b) shall apply as if the Plan had been
amended, effective immediately, on the first day of the Plan Year in which the
Plan is no longer a top-heavy plan.


ARTICLE 17


Miscellaneous


17.1         Rights of Employees.  The adoption and maintenance of the Plan and
the Trust shall not be deemed to be a contract between an Affiliated Employer
and any Employee.  Nothing herein contained
shall be deemed to give any Employee the right to be retained in the employ of
an Affiliated Employer or to diminish the right of an Affiliated Employer to
discharge any Employee at any time, nor shall it be deemed to give an
Affiliated Employer the right to require any Employee to remain in its employ
or interfere with the Employee’s right to terminate his employment at any time.


17.2         Obligation of the Affiliated
Employers.  All benefits payable
under the Plan shall be paid or provided for solely from the Trust Fund and
neither an Affiliated Employer nor the Trustee assumes any personal liability
or responsibility therefor.


17.3         Action by the Employer.  Whenever, under the terms of this Plan, the
Employer is permitted or required to do or perform any act or thing, it shall
be done or performed by an officer thereunto duly authorized by the Board.


17.4         Liability of Employer.  The only duty of the Employer hereunder shall
be to use reasonable care in the selection of the Administrator and the
Trustee.  Subject to its agreement to
indemnify the Administrator as provided in Section 11.5 and the Trustee to the
extent provided in the Trust Agreement, neither the Employer nor any person
acting on behalf of the Employer shall be liable for any act or omission on the
part of the Trustee, or for any act performed or the failure to perform any act
by any person with respect to the Plan or the Trust.



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17.5         Construction.  (a) 
The provisions of the Plan shall be construed, administered and enforced
according to the laws of the United States of America insofar as they may be
applicable, and otherwise according to the laws of the Commonwealth of
Massachusetts.


(b)           The
masculine gender shall include both sexes; and the singular shall include the
plural and the plural the singular, unless the context otherwise requires.


(c)           Any
provision of the Plan or the Trust Agreement susceptible to more than one
interpretation shall be interpreted in a manner that is consistent with the
Plan and the Trust being an employees’ plan and trust within the meaning of
Sections 401(a) and 501 of the Code.


(d)           In
any question of interpretation or other matter of doubt, the Trustee, the
Administrator and the Employer may rely upon the legal opinion of counsel for
the Employer or any other attorney designated by the Employer.


17.6         Titles.  The titles of the Articles and sections
hereof are included for convenience only and shall not be construed as part of
the Plan or as in any respect affecting or modifying its provisions.  Such words in this Plan as “herein,” “hereinafter,”
“hereof” and “hereunder” refer to this instrument as a whole and not merely to
the subdivision in which such words appear.


17.7         Counterparts.  This Plan may be executed in multiple
counterparts and each fully executed counterpart shall be deemed an original.


17.8         Military Leave.  Notwithstanding any provision of the Plan to
the contrary, contributions, benefits and service credit with respect to
qualified military service shall be provided in accordance with Section 414(u) of
the Code.


17.9         Former Employees.  Except as otherwise specifically provided in
the Plan, or in the Plan as in effect before January 1, 2006, each Employee who
retired or otherwise separated from service with the Employer before January 1,
2006, shall have his rights and benefits determined under the Plan as in effect
on the date he separated from service.


ARTICLE 18


Merger of Commercial Union Plan; Special Provisions
Regarding CNA Plan


18.1         Merger of Plans.  Effective January 1, 1999, the Commercial
Union Plan and the trust thereunder was merged with and into this Plan and
Trust.  Upon the merger, the account
balance of each member of the Commercial Union Plan was transferred to this
Plan in the manner described in Section 18.2.


18.2         Transfer of Commercial Union Plan
Accounts.  Effective January 1, 1999,
except as otherwise provided in Section 18.3, the amounts in Participants’
Commercial Union Plan accounts shall be transferred to the corresponding
accounts under this Plan in the following manner.



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(a)           Any
amounts in a Participant’s subaccount consisting of pre-tax Participant
contributions and earnings thereon shall be transferred to his Salary Deferral
Contributions Account.


(b)           Any
amounts in a Participant’s subaccount consisting of after-tax Participant
contributions and earnings thereon shall be transferred to his After-tax
Contributions Account.


(c)           Any
amounts in a Participant’s subaccount consisting of employer contributions and
earnings thereon shall be transferred to his Employer Matching Contributions
Account.


Effective January 1, 1999, the transferred amounts
described above shall be maintained, and shall be subject to distribution,
withdrawal, or pledge as security for a loan, in accordance with the provisions
of this Plan applicable to the particular type of Account to which such amounts
were transferred.


Any individual who, as of December 31, 1998, had a
vested right to receive a deferred benefit from the Commercial Union Plan shall
receive such benefit from his Participant Accounts in this Plan in accordance
with the applicable provisions of the Commercial Union Plan.  Notwithstanding the foregoing, all
distributions from this Plan are subject to the applicable requirements of
Section 9.4.


18.3         Transfer of CNA Plan Amounts.  On or about December 30, 1997, certain
amounts were transferred to the Commercial Union Plan from the CNA Employees’
Savings Plan (the “CNA Plan”) with respect to members of the Commercial Union
Plan who had previously participated in the CNA Plan.  Effective January 1, 1999, the amounts in
Participant’s Commercial Union Plan accounts attributable to amounts
transferred from the CNA Plan to the Commercial Union Plan shall be transferred
to separate subaccounts (the “CNA Subaccounts”) under this Plan in the
following manner:


(a)           Any
amounts attributable to a Participant’s “Deferred Account” under the CNA Plan
shall be transferred to his Salary Deferral Contributions Account and held in a
separate subaccount thereunder.


(b)           Any
amounts attributable to a Participant’s “Regular Account” or “Additional
Account” under the CNA Plan shall be transferred to his After-Tax Contributions
Account and held in a separate subaccount thereunder.


(c)           Any
amounts attributable to a Participant’s “Employer Account” under the CNA Plan
shall be transferred to his Employer Matching Contributions Account and held in
a separate subaccount thereunder.



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(d)           Any
amounts attributable to a Participant’s “Rollover Account” under the CNA Plan
shall be transferred to his Rollover Account and held in a separate subaccount
thereunder.


Effective
January 1, 1999, except as otherwise provided in this Article, the transferred
amounts described above shall be maintained, and shall be subject to
distribution, withdrawal, or pledge as security for a loan, in accordance with
the provisions of this Plan applicable to the particular type of Account to
which such amounts were transferred. 
Notwithstanding the foregoing, all distributions from this Plan are
subject to the applicable requirements of Section 9.4.


18.4         Vesting
in CNA Subaccounts.  Notwithstanding
the provisions of Section 8.2, the following rules shall apply with respect to
the amounts in a Participant’s CNA Subaccounts.


(a)           A
participant shall be 100 percent vested in amounts in his CNA Subaccounts if he
terminates employment after completing at least five Years of Eligibility
Service, if the sum of his age and Years of Eligibility Service (both
determined in years and whole months) at the time of his termination of
employment is at least 65.


(b)           A
Member who was a participant in the CNA Plan on July 1, 1983, shall be 100
percent vested in the amounts in his CNA Subaccounts when he completes two
Years of Vesting Service.  Any other
Participant shall be 100 percent vested in the amounts in his CNA Subaccounts
attributable to contributions made prior to July 1, 1983, when he completes two
Years of Vesting Service.


(c)           A
Participant who was an employee of Continental Insurance Company on December
31, 1995, shall be 100 percent vested in the amounts in his CNA Subaccounts
attributable to Continental Insurance Company Employer Account balance as of
such date.


ARTICLE 19


Special Provisions Concerning Employees of CGU Life
Insurance Company of America


19.1         Participation
of CGU Life Companies in the Plan and Membership of CGU Life Employees.  CGU Life Insurance Company of America, CGU
Life Insurance Company of New York and CGU Annuity Service Corporation ceased
to be Participating Employers in the Plan effective as of June 1, 2001.  Any Participant who was an employee of one of
the companies referred to in the preceding sentence on such date ceased to be a
Participant as of such date.  Any
Participant who was an employee of one of the companies referred to in the
first sentence hereof at the time such Participant retired or terminated
service with the Employer also ceased to be a Participant as of June 1, 2001.


19.2         Spin-Off
of CGU Life Plan.  All of the assets
and liabilities attributable to the former Participants described in Section
19.1  were spun-off into a new defined contribution
401(k) plan to be established by CGU Life Insurance Company of America for the
benefit of 



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such former
Participants.  The spin-off occurred
pursuant to Section 13.6 of this Plan and in accordance with Section 414 (l) of
the Code and the regulations thereunder.


IN WITNESS WHEREOF, OneBeacon Insurance Company has
caused this instrument to be duly executed in its name and on its behalf this 27th day of October, 2006.


	
   

  	
  ONEBEACON INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas N. Schmitt

  	
   

  
	
   

  	
   

  	
  Thomas N.
  Schmitt

  
	
   

  	
   

  	
  SVP. Human
  Resources

  



 


	
  ATTEST:

  
	
   

  
	
   

  
	
  /s/ Laura J.
  Kenney

  	
   

  



 



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SCHEDULE A


PARTICIPATING EMPLOYERS


The following entities are Participating Employers pursuant to Section
2.32 and Article 15 of the Plan:


OneBeacon
Insurance Company


OneBeacon
Professional Partners, Inc.


A.W.G. Dewar, Inc.



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