Exhibit 10.3
ALLEGHANY CORPORATION
Restricted Stock Unit Matching Grant Agreement
Restricted Stock Unit Matching Grant Agreement ("Agreement"), dated
as of October 7, 2002, between Alleghany Corporation, a Delaware corporation
("Alleghany"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (the "Participant").
Section 1. Restricted Stock Matching Grant. Alleghany hereby grants
to the Participant, on the terms and conditions hereinafter set forth and
subject thereto, a restricted stock unit matching grant of two restricted stock
units (each a "Restricted Stock Unit") for every share of common stock, par
value $1.00 per share (the "Common Stock"), of Alleghany purchased by the
Participant on or before September 30, 2003 (each an "Owned Share"), up to a
maximum of 30,000 Restricted Stock Units (subject to increase to reflect any
stock dividend paid in 2003) in respect of up to a maximum of 15,000 Owned
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"). 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. Restricted Stock Units. The Restricted Stock Units are
notional units of measurement denominated in shares of Common Stock and, subject
to the terms and conditions of this Agreement and the Plan, entitle the
Participant to payment on account of such Restricted Stock Units in an amount
equal to the Fair Market Value on the payment date of a number of shares of
Common Stock equal to the number of Restricted Stock Units to which the
Participant is entitled to payment. Alleghany shall establish on its books a
Restricted Stock Unit Account for the Participant and shall credit two
Restricted Stock Units to such Restricted Stock Unit Account for each Owned
Share, upon submission to Alleghany of appropriate evidence thereof. The
Restricted Stock Account shall be debited in respect of any disposition of Owned
Shares as provided in Section 3 hereof. The Restricted Stock Unit Account shall
reflect the investment experience which the account would have had if such
account held whole or fractional shares of Common Stock equal to the number of
credited Restricted Stock Units. The Restricted Stock Unit Account shall be
adjusted as appropriate to reflect cash and stock dividends, stock splits, and
other similar distributions which may, from time to time, occur with respect to
Common Stock during the relevant period. Dividends and other distributions shall
be automatically credited to the Restricted Stock Account at their cash value or
the fair market value of any non-cash dividend or other distribution and shall
be deemed to purchase Restricted Stock Units at a price equal to the Fair Market
Value of Common Stock on the date of payment thereof.
Section 3. Owned Shares. It is a condition to payment in respect of
the Restricted Stock Units that the Participant shall have maintained
unencumbered beneficial ownership of the Owned Shares in respect of which such
Restricted Stock Units were credited, and any stock dividends or stock splits
paid in respect thereof, continuously throughout the period commencing with the
initial purchase of Owned Shares and ending October 7, 2012, or the earlier date
of payment in respect of a pro rata payout as provided in Section 4(b) hereof
(the "Ownership Period"), and that the Participant shall not (i) have sold,
assigned, transferred, pledged, or hypothecated the Owned Shares, including any
stock dividends paid in respect thereof, or (ii) have engaged in any short sale
or other transaction that would have the effect of decreasing his economic risk
with regard to the Owned Shares, including any stock dividends paid in respect
thereof, at any time during the Ownership Period (any such action in subsection
(i) or (ii) being hereinafter referred to as a "disposition"). In the event of a
disposition of any of the Owned Shares, or related stock dividend shares, during
the Ownership Period, the Participant's Restricted Stock Unit Account shall be
debited in an amount equal to two Restricted Stock Units for each Owned Share so
disposed (the "Disposed Owned Share"), together with the investment experience
and dividends and distributions theretofore credited from the date of purchase
of the Disposed Owned Share. The Participant shall provide such evidence and
certification of continued satisfaction of such continuous ownership requirement
(including certification that he has not effected a disposition of any Owned
Shares) from time to time as requested by Alleghany. Evidence of continued
satisfaction of the continuous ownership requirement requested by Alleghany may
include certification of ownership by a brokerage or other financial
institution. Notwithstanding the requirements set forth in this Section 3, the
Owned Shares, and related stock dividend shares, shall at all times throughout
the Ownership Period remain the property of the Participant and be subject to
his exclusive control and, with respect thereto, Participant shall have all
rights of a stockholder of Alleghany.
Section 4. Vesting of Restricted Stock Units. The Restricted Stock
Units shall vest and become nonforfeitable and be paid, as follows:
(a) All of the Restricted Stock Units included in the Restricted
Stock Unit Account on October 7, 2012 shall vest and become
nonforfeitable on such date, and all Restricted Stock Units
thereafter credited to the Restricted Stock Unit Account
pursuant to Section 2 hereof shall be fully vested and
nonforfeitable as and when credited thereto; all Restricted
Stock Units included in the Restricted Stock Unit Account on
the date of the filing of Alleghany's Annual Report on Form
10-K in respect of the year in which Participant's employment
is terminated for any reason shall be paid to Participant on
such date.
(b) In the event of the termination of the Participant's
employment, in any case prior to October 7, 2012, by Alleghany
without Cause or in the case of termination of employment by
reason of Participant's death or Total Disability, in any case
prior to October 7, 2012, a pro rata portion of the Restricted
Stock Units included in the Restricted Stock Unit Account on
the date of such termination shall vest and become
nonforfeitable on the basis of 10% of such Account for each
full year of employment with Alleghany
-2-
measured from the date hereof and will be paid to the
Participant upon the filing of Alleghany's Annual Report on
Form 10-K in respect of the year in which such employment was
terminated, and the balance of the Restricted Stock Units
included in such Account shall be forfeited and the
Participant shall be entitled to no payments in respect
thereof.
(c) If the Participant voluntarily terminates his employment with
Alleghany prior to October 7, 2012, or if Alleghany terminates
the Participant's employment for Cause prior to October 7,
2012, all of the Restricted Stock Units included in
Participant's Restricted Stock Unit Account shall be forfeited
and the Participant shall be entitled to no payments in
respect thereof.
(d) "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 mental illness or accident for
one or more periods totaling six months during any consecutive
twelve-month period.
Section 5. Payment; Tax Withholding. Payment in respect of
Restricted Stock Units which have vested and become nonforfeitable pursuant
hereto shall be made in such combination of cash and shares of Common Stock
(valued at Fair Market Value on the payment date) or all in cash or all in
Common Stock, as the Committee may determine. Shares of Common Stock delivered
on payment of Restricted Stock Units may be treasury shares, authorized but
unissued shares, or both. Payments in respect of, or upon the vesting of,
Restricted Stock Units shall be subject to applicable tax withholding as
provided in the Plan.
Section 6. Restrictions on Transfer; Beneficiaries. Neither this
Agreement nor any Restricted Stock Units covered hereby may be sold, assigned,
transferred, encumbered, hypothecated or pledged by the Participant. The
Participant shall be entitled to select (and change) a beneficiary or
beneficiaries to receive any payment in respect of Restricted Stock Units which
have vested and become non-forfeitable pursuant hereto following the
Participant's death by giving Alleghany written notice thereof. In the event of
the Participant's death, all references in the Agreement to the Participant
shall be deemed, where appropriate, to refer to his beneficiary or estate. Any
shares of Common Stock received by the Participant in payment of Restricted
Stock Units may only be disposed of in compliance with all applicable securities
laws.
Section 7. Treatment of Restricted Stock Units; No Rights as a
Stockholder. Until paid, the amounts credited to the Restricted Stock Unit
Account shall be a part of the general assets of Alleghany, and the
Participant's right to receive payment in respect thereof shall be no greater
than the right of any other unsecured general creditor. The Restricted Stock
Units, whether or not vested, will not confer upon the Participant any voting or
other rights of a stockholder.
-3-
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, the letter agreement
dated October 7, 2002 and the Restricted Stock Award Agreement dated as of
October 7, 2002 contain the entire understanding of Alleghany and the
Participant with respect to the subject matter hereof and thereof and, except as
specifically provided herein or therein, cancel and supersede any and all other
agreements between Alleghany and the Participant with respect to the subject
matter hereof and thereof. 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 October 7, 2002.
ALLEGHANY CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
President
PARTICIPANT
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-4-