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Exhibit 10.15
May __, 1998
Mr. Xxxx Xxx
President and Chief Executive Officer
Chicago Title and Trust Company
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Dear Xxxx:
This letter agreement (the "1995 Plan Award Agreement") is to set
forth our agreement regarding the disposition of the 2,500 performance units for
the 1995-1998 cycle (the "First Cycle Units") and the 5,000 performance units
for the 1997-2000 cycle (the "Second Cycle Units") previously awarded to you
pursuant to Chicago Title and Trust Company's 1995 Performance Unit Plan (the
"1995 Plan"). As you know, Alleghany Corporation ("Alleghany") intends to
transfer all of the issued and outstanding common stock of Chicago Title and
Trust Company ("CT&T") to Chicago Title Corporation, a newly formed holding
company for CT&T ("Chicago Title"), and, thereafter, to distribute all of the
outstanding common stock of Chicago Title ("Chicago Title Common Stock"), other
than shares of restricted stock issued to senior management and non-employee
directors, to the stockholders of Alleghany (the "Distribution"). Prior to the
transfer of CT&T to Chicago Title, CT&T will distribute all of the outstanding
stock of CT&T's subsidiary Alleghany Asset Management, Inc. ("AAM"), to
Alleghany. The Distribution will be effective on a distribution or payment date
determined by the Board of Directors of Alleghany and set forth in its
declaration of the Distribution (the "Distribution Date").
X. Xxxxxx and Timing of Payout
1. With regard to your Second Cycle Units, such Units shall be
cancelled on the Distribution Date and no payments shall thereafter be payable
in respect thereof.
2. In computing benefits payable in respect of your First Cycle
Units, subject to Paragraph B.1. hereof, benefits will be calculated in the
manner set forth in Sections 6 and 13 of the 1995 Plan, except that, for 1998,
benefits will be calculated on the assumption that AAM had remained a subsidiary
of CT&T throughout 1998 and that AAM had achieved 100% of its post-separation
planned results for 1998 (as included in Alleghany's Plan for 1998-2002) (i.e.,
benefits will take into account (x) actual CT&T (or Chicago Title, after it
becomes the parent of CT&T) results through December 31, 1998, and (y) to the
extent that AAM results are not included in subparagraph (x) above, AAM planned
results for such portions of 1998 during which AAM is not a subsidiary of CT&T).
No values will be calculated and no benefits will be accrued for periods
subsequent to December 31, 1998.
3. The payout in respect of your First Cycle Units will be made in
the form of cash.
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4. In determining the amount of the payout in respect of your First
Cycle Units, you shall be entitled to the excess of the value on the
Distribution Date of the shares of common stock of Alleghany ("Alleghany Common
Stock") that you were required to purchase, or that you elected to purchase, in
accordance with the terms of the 1995 Plan over the purchase price therefor as
provided in the 1995 Plan. Such value on the Distribution Date will be based
upon the average of the daily averages of the high and low sales prices of
Alleghany Common Stock as reported on the New York Stock Exchange Composite Tape
for the five trading days preceding the Distribution Date (or, in the event that
there is no trading of Alleghany Common Stock on any day during such
five-trading-day period, for such lesser number of days within such
five-trading-day period that Alleghany Common Stock is traded). For purposes of
the valuation of Alleghany Common Stock in the manner described in the preceding
sentence, regular way prices (i.e., with due bills for the shares of Chicago
Title Common Stock to be distributed in respect of a share of Alleghany Common
Stock) shall be used or, in the absence of such regular way trading on any day
during such five-trading-day period, the valuation of Alleghany Common Stock on
such day shall be an amount equal to the sum of (a) the average of the high and
low ex-distribution or when-issued sales prices of Alleghany Common Stock as
reported on the New York Stock Exchange Composite Tape on such date, plus (b)
the average of the high and low when-issued or regular way sales prices of
Chicago Title Common Stock as reported on the New York Stock Exchange Composite
Tape on such date.
5. Distribution of the payout in respect of your First Cycle Units
will be made during the first calendar quarter of 1999 as soon as reasonably
practicable after the completion of 1998 audited financial statements of Chicago
Title. As a condition to your right to receive any such payout, you must be an
employee of Chicago Title or one of its subsidiaries on the date of the payout.
6. Examples of the valuation of your First Cycle Units and the
fulfillment of the options pursuant thereto are set forth in Exhibit A attached
hereto.
B. Other
1. For purposes of computation of benefits, references in the 1995
Plan to "dividends paid to Alleghany" shall be deemed to include cash dividends
paid by Chicago Title to its stockholders as well as cash dividends paid to
Alleghany by CT&T or Chicago Title prior to the Distribution, and references to
"approval by Alleghany" shall be deemed to mean approval by Alleghany or by the
Compensation Committee of the Board of Directors of Chicago Title.
2. References in the 1995 Plan to administration by "the Company"
shall be deemed replaced by reference to the Compensation Committee of the Board
of Directors of Chicago Title and references in the 1995 Plan to administration
by "the Vice Chairman of the Company" shall be deemed replaced by references to
the Chief Executive Officer of Chicago Title.
3. Except for Sections 1 through 6, Sections 7.E, 7.F and 7.G,
Sections 8 through 11, and Sections 13 and 14, the terms of which shall remain
in effect as modified by the
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provisions set forth in this 1995 Plan Award Agreement, the provisions of the
1995 Plan are of no further force and effect with respect to the First Cycle
Units previously awarded to you.
4. Effective on the Distribution Date, you will only have such
rights in respect of the First Cycle Units and Second Cycle Units as are set
forth in this 1995 Plan Award Agreement. You expressly represent and warrant
that you have elected to enter into this 1995 Plan Award Agreement in
consideration of the grant of restricted stock provided for in the amended and
restated letter agreement which amends and restates the employment agreement
between you and CT&T and other valuable consideration provided thereunder and
hereunder and that you were advised that you had the right (i) to forego said
restricted stock and other consideration and (ii) to continue your First Cycle
Units and Second Cycle Units in accordance with their terms. Accordingly, you
agree that your entering into this 1995 Plan Award Agreement shall not be deemed
to constitute a termination of the 1995 Plan.
If the foregoing is consistent with your understanding, please
countersign the enclosed copy of this letter and return it to me.
CHICAGO TITLE CORPORATION
By
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CHICAGO TITLE AND TRUST
COMPANY
By
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Accepted and agreed to
this ____ day of May, 1998
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Xxxx Xxx
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