Exhibit 10.1
ALLEGHANY CORPORATION
Restricted Stock Award Agreement
Restricted Stock Award Agreement (this "Agreement"), dated as of December
21, 2004, between Alleghany Corporation, a Delaware corporation ("Alleghany"),
and Xxxxx X. Xxxxxx (the "Participant").
Section 1. Restricted Stock Award. Alleghany hereby grants to the
Participant, on the terms and conditions hereinafter set forth, a restricted
stock award of 3,565 shares of the common stock, par value $1.00 per share (the
"Common Stock") of Alleghany (the "Restricted Shares"). This grant has been made
by the Compensation Committee of the Board of Directors of Alleghany (the
"Committee") pursuant to the terms of the Alleghany Corporation 2002 Long-Term
Incentive Plan (the "Plan") and is intended to qualify as "performance-based
compensation" for purposes of Section 162(m) of the Internal Revenue Code of
1986, as amended. The applicable terms of the Plan are incorporated herein by
reference. Any terms used but not defined herein shall have the meanings
ascribed thereto in the Plan. Any ambiguity between any term used in this
Agreement and a term used in the Plan shall be resolved in favor of and in
accordance with the term used in the Plan. Any interpretation, determination or
decision made or taken by the Committee regarding the Plan or this Agreement
shall be final and binding upon Alleghany and the Participant.
Section 2. Vesting of Restricted Shares. Subject to Section 3 hereof, the
Restricted Shares shall vest and become nonforfeitable as follows:
(a) If Alleghany achieves average annual compound growth in Stockholders'
Equity Per Share equal to 10% or more as measured over a calendar year
period commencing January 1, 2005 and ending on December 31, 2008,
2009, 2010 or 2011, the Restricted Shares will vest and become
nonforfeitable upon the certification by the Committee that such
performance goal has been met.
(b) If the performance goal set forth in (a) above has not been achieved
as of December 31, 2011, the Restricted Shares will vest and become
nonforfeitable when Alleghany achieves average annual compound growth
in Stockholders' Equity Per Share equal to 7% or more as measured over
a calendar year period commencing January 1, 2005 and ending on
December 31, 2012, 2013 or 2014 and upon the certification by the
Committee that such performance goal has been met.
(c) If the performance goals provided above are not achieved as of
December 31, 2014, the Participant will forfeit all of the Restricted
Shares.
(d) "Stockholders' Equity Per Share" shall mean the stockholders' equity
per share of Common Stock of Alleghany, determined, except
as otherwise herein provided, on the basis of the same accounting
principles used in the preparation of Alleghany's consolidated balance
sheet for the calendar year in question which is included in
Alleghany's Annual Report to Stockholders for such calendar year.
Stockholders' Equity Per Share shall be determined and certified in
writing by the Committee, with such adjustments as the Committee shall
deem to be required to take account of the effects on Stockholders'
Equity Per Share of any stock dividend, unusual cash distributions,
spin-off, stock split, recapitalization, merger, consolidation or
other similar event and will also be automatically adjusted to reflect
reinvestment of the value of dividends and distributions other than
stock dividends. The Committee's determination with respect to any
such adjustments shall be final and binding.
Section 3. Custody and Delivery of Shares. Alleghany shall hold the
certificate or certificates representing the Restricted Shares subject to this
Award until such Restricted Shares have vested pursuant to Section 2 hereof.
Contemporaneous with the execution of this Agreement, the Participant shall
execute and deliver to Alleghany one or more irrevocable stock powers related
thereto to facilitate the transfer of the Restricted Shares subject to this
Award to Alleghany (or its assignee or nominee) if such Restricted Shares are
forfeited pursuant hereto. Upon the vesting of the Restricted Shares subject to
this Award pursuant to Section 2 hereof, Alleghany shall deliver or cause to be
delivered the certificate or certificates representing such Restricted Shares to
the Participant, shall destroy the related stock power or powers, and shall pay
all original issue or transfer taxes and all fees and expenses incident to such
delivery.
Section 4. Termination of Employment. If the Participant's employment with
Alleghany is terminated for any reason prior to the occurrence of any otherwise
applicable vesting date provided in Section 2 hereof, the Participant shall (i)
forfeit his interest in any Restricted Shares that have not yet become vested,
(ii) assign, transfer, and deliver any certificates evidencing ownership of such
Restricted Shares to Alleghany, and (iii) cease for all purposes to be a
stockholder with respect to such Restricted Shares; provided, however, that if,
subsequent to December 31, 2006, Alleghany terminates the Participant's
employment other than for Cause or other than in the case of Total Disability,
and, as of the calendar year end immediately preceding such termination, the
performance goal set forth in Section 2(b) has been satisfied in all respects
except for the passage of the required period of time, the following number of
Restricted Shares shall vest and become nonforfeitable upon written
certification by the Committee that such pro rated performance goal has been
achieved: 3,565 multiplied by a fraction the numerator of which is the number of
full calendar years beginning January 1, 2005 and ending on or before the date
of such termination, and the denominator of which is ten. For purposes hereof,
"Cause" shall mean conviction of a felony; willful failure to implement
reasonable directives of the President, Chairman or the Board of Directors of
Alleghany after written notice, which failure is not corrected within ten days
following notice thereof; or gross misconduct in connection with the performance
of any of Participant's duties; and "Total Disability" shall mean Participant's
inability to discharge his duties due to physical or
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mental illness or accident for one or more periods totaling six months during
any consecutive twelve-month period.
Section 5. Rights as a Stockholder. Subject to the otherwise applicable
provisions of the Plan and this Agreement, the Participant will have all rights
of a stockholder of the shares of Common Stock in respect of which the
Restricted Shares are granted to the Participant hereunder, including the right
to vote the shares and receive all dividends and other distributions paid in
respect thereof; provided, however, that Alleghany shall retain all cash
dividends or other cash distributions on the Restricted Shares until they vest,
using such cash to purchase shares of Common Stock at the Fair Market Value
thereof on the date paid, and the Participant shall deliver any stock dividends
or other non-cash distributions on the Restricted Shares until they vest
(including, without limitation, shares of any corporation distributed in a
spin-off), together with appropriate stock transfer or other assignment
documents, to Alleghany. The Common Stock acquired with the cash dividends or
other cash distributions on the Restricted Shares or distributed as a stock
dividend and any other non-cash distributions on the Restricted Shares (the
"Distribution Amounts") shall be held by Alleghany until the Restricted Shares
in respect of which such Distribution Amounts were paid vest and become
nonforfeitable, at which time such Distribution Amounts shall also vest and
become nonforfeitable, and the certificates or other evidence of the
Distribution Amounts shall be delivered, or caused to be delivered, by
Alleghany. Alleghany shall also destroy the related stock power or powers, and
shall pay all original issue or transfer taxes and all fees and expenses
incident to such delivery. To the extent that any Restricted Shares are
forfeited pursuant to the terms of this Agreement, the Distribution Amounts paid
in respect thereof shall also be forfeited.
Section 6. Restrictions on Transfer. Neither this Agreement nor any
Restricted Shares covered hereby or dividends or other distributions paid in
respect thereof may be sold, assigned, transferred, encumbered, hypothecated or
pledged by the Participant, other than to Alleghany as a result of forfeiture of
the Restricted Shares and dividends or other distributions as provided herein,
or unless such Restricted Shares and dividends or other distributions have
vested and become nonforfeitable in accordance herewith. Any such disposition by
the Participant shall be made in compliance with all applicable securities laws.
The Participant hereby represents and warrants to Alleghany that the Restricted
Shares are being acquired for investment and not with a view to the distribution
thereof, and not with any present intention of distributing the same.
Section 7. Tax Withholding. Alleghany's obligation to deliver the
Restricted Shares to the Participant pursuant to Section 3 hereof and any
Distribution Amount is subject to the Participant's making provision for the
payment or withholding of any taxes required to be paid or withheld pursuant to
any applicable law in respect of the receipt of, or lapse of forfeiture
restrictions with respect to, such Restricted Shares and the payment or delivery
of any Distribution Amounts. At the written election of Participant, and upon
the approval of the Committee, any such required withholding payments may be
made in Restricted Shares or Distribution Amounts, in each case valued at Fair
Market Value on the date of payment.
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Section 8. No Right of Employment. Nothing in this Agreement shall confer
upon the Participant any right to continue as an employee of Alleghany or to
interfere in any way with the right of Alleghany to terminate the Participant's
employment at any time.
Section 9. Entire Agreement. This Agreement contains the entire
understanding of Alleghany and the Participant with respect to the subject
matter hereof. Any amendment or modification of this Agreement shall not be
binding unless in writing and signed by Alleghany and the Participant.
Section 10. Governing Law. This Agreement shall be governed by and
enforceable in accordance with the laws of the State of New York, without giving
effect to the principles of conflict of laws thereof.
IN WITNESS WHEREOF, the Participant has duly executed this Agreement and
Alleghany has duly caused this Agreement to be executed in its name and on its
behalf, all as of December 21, 2004.
ALLEGHANY CORPORATION
By: Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
President
PARTICIPANT
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
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