Exhibit 10.14
SUMMARY OF THE
WHITE MOUNTAINS INSURANCE GROU
DEFERRED COMPENSATION PLAN
I.
INTRODUCTION
White Mountains Insurance Group,
Ltd. (the “Company”) has established the White
Mountains Insurance Group Deferred Compensation Plan (the
“Plan”) to provide members of the Company’s Board
of Directors (the “Board”) and designated key employees
and consultants of the Company and its subsidiaries with the
opportunity to defer the receipt of compensation that would
otherwise be payable to them. The Company intends that the
Plan be an unfunded, non-qualified deferred compensation plan
maintained primarily for the purpose of providing deferred
compensation for directors and a select group of management or
highly compensated employees or consultants of the Company and its
subsidiaries.
This description briefly describes
the material features of the Plan. This summary also
describes the material administrative procedures of the Plan
adopted by the Administrator pursuant to the authority delegated by
the Plan, which may be amended or modified from time to time by the
Administrator, the Board or the Human Resources Committee of the
Board (the “Committee”). The
“Administrator” is the person or committee designated
by the Committee as responsible for the day-to-day operation of the
Plan, provided that the Committee is the Administrator with respect
to participants who are nonemployee directors of the Company.
However, the Plan document governs the rights and obligations of
participants in the Plan and this description is qualified in its
entirety by the Plan document. In the event of any
inconsistency between this description and the Plan document, the
terms of the Plan document will control.
II.
ELIGIBILITY
Directors who are not employees of
the Company or its subsidiaries are automatically eligible to
participate in the Plan.
Before the beginning of each
calendar year (known as a “Plan Year”), the Plan
Administrator will designate those employees of, or consultants to,
the Company and its subsidiaries who are eligible to participate in
the Plan. Employees or consultants eligible to participate in
the Plan are determined on a calendar year-by-calendar year basis
and selection as an eligible individual for one Plan Year does not
guarantee that an employee or consultant will be eligible to
participate in the Plan in subsequent Plan Years. Eligible
employees and consultants will be promptly notified of their
selection and provided the necessary election forms to participate
in the Plan for the relevant Plan Year.
III.
DEFERRALS
Directors will be permitted to defer
retainers or other fees paid by the Company for service on the
Board or any committee thereof that would otherwise be paid in the
next Plan Year. An eligible employee or consultant will be
permitted to defer the receipt of compensation or fees that would
otherwise by paid in the next Plan Year. Specifically, an
eligible employee can elect to defer some or all of the (i) base
salary, (ii) annual bonus or (iii) long-term incentive
compensation that, in each case, would be paid
to him/her in the next Plan Year. Notwithstanding the
foregoing, (i) any director who is first elected to the Board
during a Plan Year or any eligible employee who is first hired by
the Company or a participating subsidiary during a Plan Year may
elect within 30 days after becoming a director or an eligible
employee, as applicable, to defer any unpaid portion of his base
salary, annual bonus or long-term incentive compensation in respect
of such Plan Year and (ii) directors and eligible employees may
elect to defer any unpaid base salary, annual bonus or long-term
incentive compensation for the Plan Year in which the Plan is first
adopted by the Board.
Example . An individual designated as an eligible
employee in 2003 will have the opportunity to defer some or all or
his/her base salary, annual bonus or long-term incentive
compensation that would otherwise be paid in 2004.
To actually defer amounts under the
Plan, an eligible individual must file a deferral election with the
Administrator before the date specified by the Administrator, which
must in any event be before the start of the relevant Plan
Year. After the date specified by the Administrator, an
eligible individual cannot make, change or revoke any deferral
elections that apply to that year.
Example . An individual designated as an eligible
employee for the 2004 Plan Year must file a deferral election
before the date specified by the Administrator, which must be on or
before December 31, 2003 to defer any compensation that would
otherwise be paid in 2004. After the date determined by the
Administrator, this eligible employee cannot make, change or revoke
any deferral election that applies to 2004.
An election made by an eligible
individual will apply only to the relevant Plan Year and
will not apply to subsequent Plan Years. Therefore, an
eligible individual will need to make a separate deferral election
for each Plan Year in which he/she is eligible to participate in
the Plan.
The Administrator will create a
bookkeeping account for each eligible individual who elects to
defer amounts under the Plan. A person who actually elects to
defer amounts under the Plan is called a
“participant”.
The total amount credited to a
participant’s account (which includes deferrals and all
related earnings) cannot exceed $50 million (or such other amount
designated by the Committee). Any amounts credited to a
participant’s account in excess of the applicable limit will
be promptly distributed to the participant and additional deferrals
by the participant will be suspended.
IV.
INVESTMENTS
A.
General Rules.
Amounts deferred by a participant
will be credited to the bookkeeping account established on his/her
behalf by the Administrator on the first business day after the
date it would otherwise have been paid to the participant.
Additions to a participant’s account will be deemed to be
invested as described below as soon as administratively feasible
after the date they are
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credited to the participant’s
account. A participant’s account will be adjusted (as
appropriate) based on the performance of its deemed
investments.
From time to time, the Administrator
will make certain investment funds available under the Plan in
which a participant may elect to have his/her deferrals deemed to
be notionally invested. The investment funds currently
available as notional investment alternatives under the Plan are
set forth on Exhibit A. The Administrator can add or delete
funds at any time without the consent of participants.
A participant may direct, in
accordance with rules established by the Administrator, the deemed
investment of his/her account among the investment funds available
under the Plan. Except as otherwise provided herein, a
participant’s account will be deemed to be invested in
accordance with his/her instructions. A participant may amend
his/her investment directions by filing a new investment form with
the Administrator. A participant’s new investment
directions will generally take effect as set forth on Exhibit A (or
on such other timing as specified by the Administrator).
On each “valuation
date”, a participant’s account will be adjusted to
reflect any gains or losses attributable to the deemed investment
of his/her account. A “valuation date” will
generally be the last business day of each calendar quarter (or
such other date specified by the Administrator). However,
certain funds available under the Plan may have semi-annual or
annual valuation dates.
A participant’s account will
generally be deemed to be invested in accordance with the
participant’s investment directions. However, the
Committee may, in its sole discretion, disregard the
participant’s election and treat his/her account as being
deemed invested in any investment fund selected by the
Committee. In the event that any fund under which any portion
of the participant’s account is deemed to be invested ceases
to exist, such portion of the account thereafter shall be deemed
held in the fund selected by the participant or, in the absence of
any instructions from the participant, by the Committee, subject to
subsequent deemed investment elections.
The Administrator will establish
rules and procedures regarding the deemed investment of a
participant’s account. To the extent inconsistent with
this summary, the rules and procedures adopted by the Administrator
shall govern the deemed investment of a participant’s
account.
The Company shall provide an annual
statement to the participant showing such information as is
appropriate, including the aggregate amount credited to the
account, as of a reasonably current date.
B.
Company Shares
.
Unless otherwise determined by the
Committee or the Administrator, a deemed investment alternative of
common shares of the Company, par value $1.00 (“Company
Shares”), will be made available under the Plan. A
participant who is a director or who is considered an
“officer” for purposes of Section 16(b) of the
Securities Exchange Act of 1934, as amended (collectively,
“Section 16(b) person”) may, but is not required
to, elect to treat up to 100% of the
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amounts he/she defers under the Plan as deemed
invested in Company Shares. Each other participant may, but
is not required to, elect to treat up to 50% of the amounts he/she
defers under the Plan as deemed invested in Company
Shares.
In addition, there are additional
restrictions on a participant’s ability to transfer amounts
into and out of a deemed investment in Company Shares. A
participant will not be permitted to notionally invest in Company
Shares (i) any amounts deferred under the Plan that are initially
deemed to be invested in an alternative other than Company Shares
or (ii) amounts credited to a participant’s account that are
deemed to be transferred out of Company Shares into another
investment alternative. A participant may, however, have
future amounts deferred under the Plan deemed to be invested in
Company Shares.
Example 1 . Participant X (who is a
Section 16(b) person) de
