ESTABLISH PERFORMANCE OBJECTIVES ("PERFORMANCE
OBJECTIVES") TO BE ATTAINED WITHIN THE AWARD PERIOD AS THE MEANS OF DETERMINING
THE PERFORMANCE PERCENTAGE APPLICABLE TO SUCH AWARD.
THE PERFORMANCE OBJECTIVES
ESTABLISHED WITH RESPECT TO A PHANTOM SHARE AWARD SHALL BE SPECIFIC PERFORMANCE
TARGETS ESTABLISHED BY THE COMMITTEE WITH RESPECT TO ONE OR MORE OF THE
FOLLOWING CRITERIA SELECTED BY THE COMMITTEE: (I) CONSOLIDATED EARNINGS BEFORE
OR AFTER TAXES (INCLUDING EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND
AMORTIZATION); (II) NET INCOME; (III) OPERATING INCOME; (IV) EARNINGS PER SHARE;
(V) BOOK VALUE PER SHARE; (VI) RETURN ON STOCKHOLDERS' EQUITY; (VII) EXPENSE
MANAGEMENT; (VIII) RETURN ON INVESTMENT; (IX) IMPROVEMENTS IN CAPITAL STRUCTURE;
(X) STOCK PRICE; (XI) COMBINED RATIO; (XII) OPERATING RATIO; (XIII)
PROFITABILITY OF AN IDENTIFIABLE BUSINESS UNIT OR PRODUCT; (XIV) MAINTENANCE OR
IMPROVEMENT OF PROFIT MARGINS; (XV) MARKET SHARE; (XVI) REVENUES OR SALES;
(XVII) COSTS; (XVIII) CASH FLOW; (XIX) WORKING CAPITAL; (XX) RETURN ON ASSETS;
(XXI) CUSTOMER SATISFACTION; (XXII) EMPLOYEE SATISFACTION; AND (XXIII) ECONOMIC
VALUE PER SHARE (COMPUTED BASED ON BOOK VALUE PER SHARE DETERMINED IN ACCORDANCE
WITH GAAP ADJUSTED FOR CHANGES IN THE INTRINSIC VALUE OF ASSETS AND LIABILITIES
WHOSE VALUE DIFFERS FROM THEIR GAAP CARRYING VALUE).THE FOREGOING CRITERIA MAY
RELATE TO WTM GROUP OR ONE OR MORE OF ITS SUBSIDIARIES OR ONE OR MORE OF ITS
DIVISIONS, UNITS, PARTNERSHIPS, JOINT VENTURES OR MINORITY INVESTMENTS, PRODUCT
LINES OR PRODUCTS OR ANY COMBINATION OF THE FOREGOING, AND MAY BE APPLIED ON AN
ABSOLUTE BASIS AND/ OR BE RELATIVE TO ONE OR MORE PEER GROUP COMPANIES OR
INDICES, OR ANY COMBINATION THEREOF, AS THE COMMITTEE SHALL DETERMINE. IN
ADDITION, THE PERFORMANCE OBJECTIVES MAY BE CALCULATED WITHOUT REGARD TO
EXTRAORDINARY ITEMS.
(C)
THE AWARD PERIOD IN RESPECT OF ANY GRANT OF
A PHANTOM SHARE AWARD SHALL BE SUCH PERIOD AS THE COMMITTEE SHALL DETERMINE
COMMENCING AS OF THE BEGINNING OF THE FISCAL YEAR OF THE COMPANY IN WHICH SUCH
GRANT IS MADE. AN AWARD PERIOD MAY CONTAIN A NUMBER OF PERFORMANCE PERIODS; EACH
PERFORMANCE PERIOD SHALL COMMENCE ON OR AFTER THE FIRST DAY OF THE AWARD PERIOD
AND SHALL END NO LATER THAN THE LAST DAY OF THE AWARD PERIOD.
IF THE COMMITTEE
DOES NOT SPECIFY IN A PHANTOM SHARE AWARD AGREEMENT OR ELSEWHERE THE PERFORMANCE
PERIODS CONTAINED IN AN AWARD PERIOD, EACH 12-MONTH PERIOD BEGINNING WITH THE
FIRST DAY OF SUCH AWARD PERIOD SHALL BE DEEMED TO BE A PERFORMANCE PERIOD.
(D)
EXCEPT AS OTHERWISE DETERMINED BY THE
COMMITTEE, PHANTOM SHARES SHALL BE
CANCELED IF THE PARTICIPANT'S CONTINUOUS
EMPLOYMENT WITH THE COMPANY OR ANY OF ITS SUBSIDIARIES SHALL TERMINATE FOR ANY
REASON PRIOR TO THE END OF THE AWARD
5
Period, except by reason of a period of Related Employment as defined in
Section 10 of the White Mountains Insurance Group Long Term Incentive Plan ("WTM
LTIP"), and except as otherwise specified in this Section or in Section 7 (f) of
the WTM LTIP.
Notwithstanding the foregoing and without regard to Section 7 (g) of the WTM
LTIP, if a Participant shall:
I.
WHILE IN SUCH