We put this answer on the Card FAQ.
How does War Hammer's -4 penalty apply to Target X and Area attacks?
Assuming I wound a Character with Boosted War Hammer:
Say I am attacked by Kobold and Large Wurm and X=2 for Target X. How much Power will my Primary Target face? How much will Adventurer 2 face from Large Wurm?
This is one of the few situations where you can have two encounters in one. The Player may choose which attacker gains the -4.
Say I am attacked by Kobold and Falling Stones. How much will each Adventurer face?
As this is all part of the same attack, the -4 goes to the Primary target Attackers.