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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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ALLEGHANY CORPORATION
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7 Times Square Tower
New York, New York 10036
April 25, 2008 at 10:00 a.m., Local Time
945 East Paces Ferry Road, 18th Floor
Atlanta, Georgia
1. | To elect three directors for terms expiring in 2011. | |
2. | To consider and take action upon a proposal to ratify the selection of KPMG LLP as Alleghany’s independent registered public accounting firm for the year 2008. | |
3. | To transact such other business as may properly come before the meeting, or any adjournment or adjournments thereof. |
Senior Vice President, General Counsel
and Secretary
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7 Times Square Tower
New York, New York 10036
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Amount and Nature of Beneficial Ownership | ||||||||||||||||
Sole Voting | Shared Voting Power | |||||||||||||||
Name and Address | Power and/or Sole | and/or Shared | Percent | |||||||||||||
of Beneficial Owner | Investment Power | Investment Power | Total | of Class | ||||||||||||
F.M. Kirby | 329,311 | 718,863 | 1,048,174 | (1) | 12.8 | |||||||||||
17 DeHart Street P.O. Box 151 Morristown, NJ 07963 | ||||||||||||||||
Allan P. Kirby, Jr. | 542,472 | — | 542,472 | (2) | 6.6 | |||||||||||
14 E. Main Street P.O. Box 90 Mendham, NJ 07945 | ||||||||||||||||
Grace Kirby Culbertson | 167,982 | 238,147 | 406,129 | (3) | 5.0 | |||||||||||
Blue Mill Road Morristown, NJ 07960 | ||||||||||||||||
Estate of Ann Kirby Kirby | 317,881 | 392,786 | 710,667 | (4) | 8.7 | |||||||||||
c/o Carter, Ledyard & Milburn LLP 2 Wall Street New York, NY 10005 | ||||||||||||||||
Franklin Mutual Advisers, LLC | 810,577 | — | 810,577 | (5) | 9.9 | |||||||||||
101 John F. Kennedy Parkway Short Hills, NJ 07078 | ||||||||||||||||
Royce & Associates, LLC | 506,966 | — | 506,966 | (6) | 6.2 | |||||||||||
1414 Avenue of the Americas New York, NY 10019 |
(1) | Includes 110,344 shares of common stock held by F.M. Kirby as sole trustee of trusts for the benefit of his children; 516,551 shares held by a trust of which Mr. Kirby is co-trustee and primary beneficiary; and 202,312 shares held by trusts for the benefit of his children and his children’s descendants as to which Mr. Kirby was granted a proxy and, therefore, had shared voting power. Mr. Kirby disclaims beneficial ownership of the common stock |
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held for the benefit of his children and for the benefit of his children and his children’s descendants. Mr. Kirby held 218,967 shares directly. | ||
(2) | Includes 305,655 shares of common stock held by a trust of which Allan P. Kirby, Jr. is co-trustee (with the final right to vote) and beneficiary; and 10,432 shares issuable under stock options granted pursuant to the 2005 Directors’ Stock Plan, or the “2005 Directors’ Plan,” the Amended and Restated Directors’ Stock Option Plan, or the “1993 Amended Directors’ Plan” and the 2000 Directors’ Stock Option Plan, or the “2000 Directors’ Plan.” Mr. Kirby held 226,385 shares directly, which include 765 shares of restricted common stock granted pursuant to the 2005 Directors’ Plan, as adjusted for stock dividends. | |
(3) | Includes 47,547 shares of common stock held by Grace Kirby Culbertson as co-trustee of trusts for the benefit of her children; and 190,600 shares held by trusts for the benefit of Mrs. Culbertson and her descendants, of which Mrs. Culbertson is co-trustee. Mrs. Culbertson held 167,982 shares directly. | |
(4) | Prior to her death in 1996, Ann Kirby Kirby had disclaimed being a controlling person or member of a controlling group with respect to Alleghany, and had declined to supply information with respect to her ownership of common stock. Since her death, the representatives of the estate of Mrs. Kirby have declined to supply information with respect to ownership of common stock by her estate or its beneficiaries; therefore, Alleghany does not know whether her estate or any beneficiary of her estate beneficially owns more than five percent of its common stock. However, Mrs. Kirby filed a statement on Schedule 13D dated April 5, 1982 with the Securities and Exchange Commission, or the “SEC,” reporting beneficial ownership, both direct and indirect through various trusts, of 710,667 shares of the common stock of Alleghany Corporation, a Maryland corporation and the predecessor of Alleghany, or “Old Alleghany.” Upon the liquidation of Old Alleghany in December 1986, stockholders received $43.05 in cash and one share of common stock for each share of Old Alleghany common stock. The stock ownership information provided herein as to the estate of Mrs. Kirby is based solely on her statement on Schedule 13D and does not reflect the two-percent stock dividends paid in each of the years 1985 through 1997 and 1999 through 2007 by Old Alleghany or Alleghany; if Mrs. Kirby, her estate and her beneficiaries had continued to hold in the aggregate 710,667 shares together with all stock dividends received in consequence through the date hereof, the beneficial ownership reported herein would have increased by 387,996 shares. | |
(5) | According to an amendment dated January 10, 2008 to a Schedule 13G statement filed by Franklin Mutual Advisers, LLC, or “Franklin,” Franklin had sole voting power and sole dispositive power over 810,577 shares of common stock. The statement indicated that such shares may be deemed to be beneficially owned by Franklin, an investment advisory subsidiary of Franklin Resources, Inc., or “FRI,” and that, under Franklin’s advisory contracts, |
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all voting and investment power over such shares was granted to Franklin. The statement also indicated that Charles B. Johnson and Rupert H. Johnson, Jr. were the principal shareholders of FRI, but beneficial ownership of the shares reported therein is not attributed to FRI or Messrs. Johnson because Franklin exercises voting and investment powers over such shares independently of FRI and Messrs. Johnson. Franklin disclaimed any economic interest in or beneficial ownership of such shares. | ||
(6) | According to an amendment dated January 22, 2008 to a Schedule 13G statement filed by Royce & Associates, LLC, an investment advisor, Royce & Associates, LLC has sole voting power and sole dispositive power over 506,966 shares of common stock. |
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• | the audited consolidated annual financial statements of Alleghany and its subsidiaries, including Alleghany’s specific disclosures under management’s discussion and analysis of financial condition and results of operation and critical accounting policies, to be included in Alleghany’s Annual Report onForm 10-K to the SEC and whether to recommend this inclusion, | |
• | the unaudited consolidated quarterly financial statements of Alleghany and its subsidiaries, including management’s discussion and analysis thereof, to be included in Alleghany’s Quarterly Reports onForm 10-Q to the SEC, | |
• | Alleghany’s policies with respect to risk assessment and risk management, |
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• | the adequacy and effectiveness of Alleghany’s internal controls and disclosure controls and procedures, | |
• | the compensation, activities and performance of Alleghany’s internal auditors, and | |
• | the quality and acceptability of Alleghany’s accounting policies, including critical accounting policies and practices and the estimates and assumptions used by management in the preparation of Alleghany’s financial statements. |
• | reviewing and approving the financial goals and objectives relevant to the compensation of the chief executive officer, | |
• | evaluating the chief executive officer’s performance in light of such goals and objectives, and | |
• | determining the chief executive officer’s compensation based on such evaluation. |
• | the compensation of the other Alleghany officers and determining such officers’ compensation, and | |
• | the adjustments proposed to be made to the compensation of the three most highly paid officers of each Alleghany operating subsidiary as recommended by the compensation committee for each such operating subsidiary. |
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• | identifying and screening director candidates, consistent with criteria approved by the Board, | |
• | making recommendations to the Board as to persons to be (i) nominated by the Board for election to the Board by stockholders or (ii) chosen by the Board to fill newly created directorships or vacancies on the Board, | |
• | developing and recommending to the Board a set of corporate governance principles applicable to Alleghany, and | |
• | overseeing the evaluation of the Board, individual directors and Alleghany’s management. |
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• | if addressed to a specific director, to such director, | |
• | if addressed to the non-management directors, to the Chairman of the Nominating and Governance Committee who will report thereon to the non-management directors, or | |
• | if addressed to the Board, to the Chairman of the Board who will report thereon to the Board. |
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• | director or officer of Alleghany or | |
• | immediate family member of such director or officer, which means any child, stepchild, parent, stepparent, spouse, sibling,mother-in-law,father-in-law,son-in-law, |
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to Corporate Governance Guidelines
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• | the director’s qualifications, | |
• | the director’s past and expected future contributions to Alleghany, | |
• | the overall composition of the Board, and | |
• | whether accepting the tendered resignation would cause Alleghany to fail to meet any applicable rule or regulation (including New York Stock Exchange listing standards and federal securities laws). |
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Amount and Nature of Beneficial Ownership | ||||||||||||||||
Sole Voting | Shared Voting Power | |||||||||||||||
Power and Sole | and/or Shared | Percent | ||||||||||||||
Name of Beneficial Owner | Investment Power | Investment Power | Total | of Class | ||||||||||||
Rex D. Adams | 7,788 | — | 7,788 | (1) | 0.09 | |||||||||||
Weston M. Hicks | 68,011 | — | 68,011 | (2) | 0.83 | |||||||||||
Jefferson W. Kirby | 60,205 | 151,192 | 211,397 | (1)(3) | 2.59 | |||||||||||
John J. Burns, Jr. | 83,739 | — | 83,739 | (1)(4) | 1.02 | |||||||||||
Dan R. Carmichael | 19,185 | — | 19,185 | (1)(5) | 0.23 | |||||||||||
Thomas S. Johnson | 12,744 | — | 12,744 | (1) | 0.16 | |||||||||||
Allan P. Kirby, Jr. | 542,472 | — | 542,472 | (6) | 6.63 | |||||||||||
William K. Lavin | 12,237 | — | 12,237 | (1) | 0.15 | |||||||||||
James F. Will | 19,752 | 1,587 | 21,339 | (1) | 0.26 | |||||||||||
Raymond L.M. Wong | 1,427 | — | 1,427 | (1) | 0.02 | |||||||||||
Roger B. Gorham | 6,034 | — | 6,034 | (7) | 0.07 | |||||||||||
Robert M. Hart | 15,844 | — | 15,844 | 0.19 | ||||||||||||
James P. Slattery | 8,936 | — | 8,936 | (8) | 0.11 | |||||||||||
Jerry G. Borrelli | 451 | — | 451 | — | ||||||||||||
All directors, nominees and executive officers as a group (14 persons) | 858,825 | 152,779 | 1,011,604 | (9) | 12.28(10 | ) |
(1) | Includes 10,432 shares of common stock in the case of Messrs. Johnson, Will, Carmichael and Lavin, 6,549 shares of common stock in the case of Mr. Adams, 506 shares of common stock in the case of Messrs. Jefferson W. Kirby and Wong and 167 shares in the case of Mr. Burns, issuable under stock options granted pursuant to the 2005 Directors’ Plan, 1993 Amended Directors’ Plan and the 2000 Directors’ Plan. In addition, includes 765 shares of restricted common stock or restricted stock units granted to each of Messrs. Carmichael, Lavin, Johnson, Will and Adams, 505 shares of restricted common stock or restricted stock units granted to each of Messrs. Jefferson W. Kirby and Wong |
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and 250 shares of restricted common stock granted to Mr. Burns, pursuant to the 2005 Directors’ Plan. | ||
(2) | Includes 27,601 shares representing a restricted stock award and subsequent stock dividends in respect thereof, which are subject to Mr. Hicks’s continuing employment with Alleghany and the achievement of certain performance goals, but does not include any shares that may be paid pursuant to outstanding restricted stock units held by Mr. Hicks. | |
(3) | Includes 129,137 shares of common stock held by a trust; such amount reflects Mr. Jefferson W. Kirby’s share of such trust as co-trustee and secondary beneficiary. As such shares are held by a trust of which his father, Mr. F.M. Kirby, is a co-trustee and primary beneficiary, such 129,137 shares are also included in the amounts set forth for Mr. F.M. Kirby on page 1. Mr. Jefferson W. Kirby granted a proxy to his father with respect to an additional 22,055 shares held by a trust of which Mr. Jefferson W. Kirby is beneficiary and co-trustee, and thus such additional 22,055 shares are included in the amounts set forth for Mr. F.M. Kirby on page 1. Mr. Jefferson W. Kirby held 59,194 shares directly. | |
(4) | Includes 786 shares of common stock owned by Mr. Burns’s wife. Mr. Burns had no voting or investment power over these shares, and he disclaims beneficial ownership of them. | |
(5) | Includes 244 shares of common stock owned by Mr. Carmichael’s wife. Mr. Carmichael had no voting or investment power over these shares, and he disclaims beneficial ownership of them. | |
(6) | See Note (2) on page 2. | |
(7) | Includes 3,783 shares representing a restricted stock award and subsequent stock dividends in respect thereof, which are subject to Mr. Gorham’s continuing employment with Alleghany and the achievement of certain performance goals. | |
(8) | Includes 2,673 shares of common stock owned by Mr. Slattery’s wife. Mr. Slattery had no voting or investment power over these shares, and he disclaims beneficial ownership of them. | |
(9) | Includes a total of 3,703 shares of common stock over which certain of the above persons listed had no voting or investment power, as discussed in Notes (4), (5) and (8) above. | |
(10) | Based on the number of shares of outstanding common stock as of March 3, 2008, adjusted to include shares of common stock issuable within 60 days upon exercise of stock options held by directors. |
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Nominee for Election: Rex D. Adams Age 68 Director since 1999 | ![]() | Director and Chairman of the Board, Invesco Ltd. (investment management); Dean Emeritus, Fuqua School of Business at Duke University; trustee, Committee for Economic Development and Woods Hole Oceanographic Institution. Chairman of the Nominating and Governance Committee and member of the Audit Committee. | ||
Nominee for Election: Weston M. Hicks Age 51 Director since 2004 | ![]() | President and chief executive officer, Alleghany Corporation; director, AllianceBernstein Corporation. Member of the Executive Committee. |
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Nominee for Election: Jefferson W. Kirby Age 46 Director since 2006 | ![]() | Managing Member, Broadfield Capital Management, LLC (investment advisory services). | ||
Allan P. Kirby, Jr. Age 76 Director since 1963 Term expires in 2010 | ![]() | President, Liberty Square, Inc. (investments); management of family and personal affairs.Chairman of the Executive Committee. | ||
Thomas S. Johnson Age 67 Director since 1997 and for1992-1993 Term expires in 2010 | ![]() | Retired Chairman and Chief Executive Officer, GreenPoint Financial Corp. and its subsidiary GreenPoint Bank (banking); director, R.R. Donnelley & Sons Company, The Phoenix Companies, Inc. and Federal Home Loan Mortgage Corporation. Member of the Executive and Nominating and Governance Committees. | ||
James F. Will Age 69 Director since 1992 Term expires in 2010 | ![]() | Vice Chancellor and President Emeritus, Saint Vincent College (education). Member of the Compensation and Nominating and Governance Committees. | ||
John J. Burns, Jr. Age 76 Director since 1968 Term expires in 2009 | ![]() | Chairman of the Board, Alleghany Corporation.Member of the Executive Committee. |
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Dan R. Carmichael Age 63 Director since 1993 Term expires in 2009 | ![]() | Consultant, Liberty Mutual Agency Markets (property and casualty insurance); director, Platinum Underwriters Holdings, Ltd. Chairman of the Compensation Committee and member of the Audit Committee. | ||
William K. Lavin Age 63 Director since 1992 Term expires in 2009 | ![]() | Financial Consultant; director and Chairman of the Board, American Home Food Products, Inc. Chairman of the Audit Committee and member of the Compensation Committee. | ||
Raymond L.M. Wong Age 55 Director since 2006 Term expires in 2009 | ![]() | Managing Director, Spring Mountain Capital, LP (investment management).Member of the Audit Committee. |
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Change in | ||||||||||||||||||||||||||||
Pension | ||||||||||||||||||||||||||||
Value and | ||||||||||||||||||||||||||||
Fees | Nonqualified | |||||||||||||||||||||||||||
Earned | Stock | Option | Non-Equity | Deferred | ||||||||||||||||||||||||
or Paid | Awards | Awards | Incentive Plan | Compensation | All Other | |||||||||||||||||||||||
Name | in Cash | (1) | (2) | Compensation | Earnings | Compensation | Total | |||||||||||||||||||||
Rex D. Adams | $ | 65,500 | $ | 84,418 | $ | 59,843 | — | — | $ | 103,697 | (3) | $ | 313,458 | |||||||||||||||
John J. Burns, Jr. | $ | 400,000 | $ | 60,297 | $ | 15,449 | — | — | $ | 8,187,869 | (4) | $ | 8,663,615 | |||||||||||||||
Dan R. Carmichael | $ | 68,000 | $ | 84,418 | $ | 59,843 | — | — | $ | 128,210 | (3) | $ | 340,471 | |||||||||||||||
Thomas S. Johnson | $ | 53,000 | $ | 84,418 | $ | 59,843 | — | — | $ | 132,493 | (3) | $ | 329,754 | |||||||||||||||
Allan P. Kirby, Jr. | $ | 63,500 | $ | 84,418 | $ | 59,843 | — | — | $ | 161,417 | (3) | $ | 369,178 | |||||||||||||||
Jefferson W. Kirby | $ | 38,500 | $ | 84,418 | $ | 33,998 | — | — | — | $ | 156,916 | |||||||||||||||||
William K. Lavin | $ | 77,500 | $ | 84,418 | $ | 59,843 | — | — | $ | 133,853 | (3) | $ | 355,614 | |||||||||||||||
James F. Will | $ | 55,500 | $ | 84,418 | $ | 59,843 | — | — | $ | 190,274 | (3) | $ | 390,035 | |||||||||||||||
Raymond L.M. Wong | $ | 53,500 | $ | 84,418 | $ | 33,998 | — | — | — | $ | 171,916 |
(1) | Represents the dollar amount recognized for financial statement reporting purposes for the year ended December 31, 2007 in accordance with Statement of Financial Accounting Standards No. 123R, “Share-based Payments,” or “SFAS 123R,” of restricted stock and restricted stock unit awards outstanding under the 2005 Directors’ Plan. See Note 10 to the consolidated financial statements of Alleghany contained in its Annual Report onForm 10-K for the year ended December 31, 2007 for assumptions underlying the valuation of stock-based awards. The full grant date fair value of the restricted stock award of 250 shares of common stock or 250 notional units, or “Restricted Stock Units,” each equivalent to a share of common stock, made |
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to each non-employee director on April 30, 2007, computed in accordance with SFAS 123R, is $90,446. At December 31, 2007, each of Messrs. Adams, Carmichael, Johnson, Allan P. Kirby, Jr., Lavin and Will held 765 shares of restricted stock and/or Restricted Stock Units, each of Messrs Jefferson W. Kirby and Wong held 505 shares of restricted stock and/or Restricted Stock Units and Mr. Burns held 250 shares of restricted common stock. | ||
(2) | Represents the dollar amount recognized for financial statement reporting purposes for the year ended December 31, 2007 in accordance with SFAS 123R of options outstanding. See Note 10 to the consolidated financial statements of Alleghany contained in its Annual Report onForm 10-K for the year ended December 31, 2007 for assumptions underlying valuation of stock-based awards. The full grant date fair value of the option award for 500 shares of common stock made to each non-employee director on April 30, 2007, computed in accordance with SFAS 123R is $69,525. At December 31, 2007, the aggregate number of option awards outstanding was 10,936 for each of Messrs Carmichael, Johnson, Allan P. Kirby, Jr., Lavin and Will, 7,052 for Mr. Adams, 1,010 for each of Messrs. Jefferson W. Kirby and Wong, and 505 for Mr. Burns. | |
(3) | Reflects lump-sum payout in January 2007 of accrued benefit under the Non-Employee Directors’ Retirement Plan. Additional information regarding such payout can be found on pages 20 and 21 in the narrative accompanying this table. | |
(4) | Reflects a payout in February 2007 of (i) $7,856,751 in settlement of all of the outstanding performance shares awarded to Mr. Burns under the 2002 LTIP and (ii) $308,977, representing all of the savings benefits which Mr. Burns had accrued under Alleghany’s Deferred Compensation Plan, in connection with his resignation as a non-executive employee of Alleghany effective January 1, 2007. In addition, such amount reflects a benefit, valued at $13,196, of life insurance maintained by Alleghany on behalf of Mr. Burns; and $8,945 representing payments for reimbursement of taxes and the reimbursement itself. Additional information regarding such amounts can be found on page 21 in the narrative accompanying this table. |
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• | a stock option to purchase 500 shares of Alleghany common stock, subject to anti-dilution adjustments, at an exercise price equal to the fair market value on the date of grant; and | |
• | upon a director’s election either (i) 250 shares of common stock or (ii) 250 Restricted Stock Units, each equivalent to a share of common stock, which are subject to potential forfeiture until the first Annual Meeting of Stockholders following the date of grant, and restrictions upon transfer until the third anniversary of the date of grant. |
• | no future non-employee director was eligible to participate, |
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• | the director’s service after December 31, 2004 was no longer included in measuring the period the director’s annual retirement benefit would be payable, and | |
• | for directors who retire after December 31, 2004, the annual retirement benefit is limited to $30,000, which was the annual retainer at December 31, 2004. |
• | no longer receives any employee benefits apart from life insurance death benefits available to all retired Alleghany officers under its insurance plan, | |
• | received a payout on February 27, 2007 of 11,752 shares of common stock and $3,062,842.50 in settlement of all of the outstanding performance shares awarded to him under the 2002 LTIP in accordance with their terms, and | |
• | received a payout of approximately $308,977 representing all of the savings benefits which he had accrued under Alleghany’s Deferred Compensation Plan. |
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Independent Registered Public Accounting Firm
2007 | 2006 | |||||||
Audit Fees | $ | 2,884,027 | $ | 2,528,503 | ||||
Audit-Related Fees | 76,400 | 656,200 | ||||||
Tax Fees | — | — | ||||||
All Other Fees | 1,500 | 1,500 | ||||||
Total | $ | 2,961,927 | $ | 3,186,203 |
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Rex D. Adams
Dan R. Carmichael
Raymond L.M. Wong
of the Board of Directors
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2008 ANNUAL MEETING
Business Experience During | ||||||||
Name | Age | Current Position (date elected) | Last 5 Years | |||||
Weston M. Hicks | 51 | President, chief executive officer (since December 2004) | Executive Vice President, Alleghany (from October 2002 to December 2004). | |||||
Roger B. Gorham | 45 | Senior Vice President — Finance and Investments and chief financial officer (since January 2006) | Senior Vice President — Finance and chief financial officer, Alleghany (from May 2005 to January 2006); Senior Vice President — Finance, Alleghany (from December 2004 to May 2005); provider of hedge fund consulting services (from December 2003 to December 2004); Senior Vice President and Chief Financial Officer, Chubb Financial Solutions (property and casualty insurance) (July 2000 to July 2003). | |||||
Robert M. Hart | 63 | Senior Vice President, General Counsel (since 1994) and Secretary (since 1995) | Senior Vice President, General Counsel and Secretary, Alleghany. | |||||
James P. Slattery | 56 | Senior Vice President — Insurance (since 2002) | Senior Vice President — Insurance, Alleghany |
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Business Experience During | ||||||||
Name | Age | Current Position (date elected) | Last 5 Years | |||||
Jerry G. Borrelli | 42 | Vice President — Finance, chief accounting officer (since July 2006) | Vice President — Finance, Alleghany (from February 2006); Director of Financial Reporting, American International Group, Inc. (insurance) (from June 2003); Director of Accounting Policy and Special Projects, American International Group, Inc. (from December 1999). |
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William K. Lavin
James F. Will
of the Board of Directors
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AND COMPENSATION MATTERS
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• | 86.7% for Mr. Hicks, | |
• | 74.7% for Mr. Gorham, | |
• | 73.4% for Messrs. Hart and Slattery and | |
• | 53.7% for Mr. Borrelli. |
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• | salaries, | |
• | annual cash incentive compensation, | |
• | annual grants of long-term equity based incentives, | |
• | retirement benefits, and | |
• | savings benefits under our Deferred Compensation Plan. |
• | specifying the time for all payments under the plans, | |
• | specifying the time for making elective deferrals, the timing and form of distributions under the plans and the procedures for making and changing participant elections with respect thereto, and | |
• | providing for the delayed payment of deferred compensation amounts due to any “specified employee,” as such term is defined in Section 409A, and for interest on the amount delayed to compensate for such delay. |
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• | “Target Plan Earnings Per Share” means earnings per share of our common stock as set forth in the strategic plan approved by our Board for the relevant year, less the amount of RSUI catastrophe losses reflected in such plan. | |
• | “Adjusted Earnings Per Share” means the earnings per share as reported in our audited financial statements for the relevant year less RSUI catastrophe losses and realized gains and losses on strategic investments in that year as reflected in our financial statements and adjusted for any stock dividends paid during the year. |
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• | maximum payouts will be made only if average annual compound growth in our Book Value Per Share (as defined by the Compensation Committee pursuant to the 2002 LTIP) equals or exceeds 10.5% as measured from a specified base equal to stockholders’ equity per share at December 31, 2006 as reported in the Annual Report on |
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Form 10K for the year ended December 31, 2006, or $227.17 per share, as adjusted for stock dividends in the2007-2010 award period, |
• | target payouts will be made at 100% if such growth equals 7%, | |
• | no payouts will be made if such growth is less than 3.5%, and | |
• | payouts for growth between 3.5% and 10.5% will be determined by straight line interpolation. |
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Payments under | ||||||||||||||||||||||||||||||||
Severance | Restricted Stock and | Post- | ||||||||||||||||||||||||||||||
under | Restricted Stock Unit | Deferred | Retirement | |||||||||||||||||||||||||||||
Employment | Matching Grant Award | 2002 LTIP | 2005 MIP | Retirement | Compensation | Medical | ||||||||||||||||||||||||||
Agreement | Agreements (2) | (3) | (4) | Plan (5) | Plan (6) | Plan (7) | Total | |||||||||||||||||||||||||
Weston M. Hicks | $ | 1,000,000 | (1) | $ | 11,816,639 | $ | 7,982,213 | $ | 1,500,000 | $ | 1,350,662 | $ | 671,463 | $ | 150,050 | $ | 24,471,027 | |||||||||||||||
Roger B. Gorham | — | $ | 1,140,575 | $ | 2,471,245 | $ | 459,000 | — | $ | 230,379 | — | $ | 4,301,199 | |||||||||||||||||||
Robert M. Hart | — | — | $ | 4,046,130 | $ | 477,000 | $ | 2,389,044 | $ | 1,111,660 | $ | 161,650 | $ | 8,185,484 | ||||||||||||||||||
James P. Slattery | — | — | $ | 3,564,032 | $ | 423,000 | $ | 1,785,979 | $ | 461,110 | $ | 154,986 | $ | 6,389,107 | ||||||||||||||||||
Jerry G. Borrelli | — | — | $ | 604,055 | $ | 192,000 | — | $ | 246,631 | — | $ | 1,042,686 |
(1) | This amount would be paid by Alleghany in the form of continued payments of base salary. |
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(2) | Reflects award amounts payable to Mr. Hicks under his 2004 restricted stock agreement and his 2002 restricted stock unit agreement and to Mr. Gorham under his 2004 restricted stock agreement based on the elapsed portion of the award period prior to termination and average annual compound growth in Book Value Per Share through the date of termination, assuming that the Compensation Committee has determined that such payments should be made in accordance with the terms of the restricted stock and restricted stock unit matching agreements. The terms of these agreements are described on pages 45 through 47. | |
(3) | Reflects payment of all outstanding LTIP awards, including amounts paid in February 2008 for the award period ending December 31, 2007, based on the elapsed portion of the award period prior to termination and average annual compound growth in Book Value Per Share through the date of termination, in accordance with the terms of the awards. | |
(4) | Reflects annual incentive earned in respect of 2007 under the 2005 MIP. These amounts, earned in respect of 2007 performance, were paid to the Named Executive Officers in February 2008 and are reported in the Summary Compensation Table on page 41. | |
(5) | Reflects payment of vested pension benefits, computed as of December 31, 2007, under the Retirement Plan to Messrs. Hart, Hicks and Slattery. No other Named Executive Officer was vested in the Retirement Plan as of December 31, 2007. The determination of these pension benefits is described in more detail on pages 51 through page 53. Does not include retiree life insurance death benefit, equal to the annual salary of a participant at the date of retirement, payable to Messrs. Hart, Hicks and Slattery. No other Named Executive Officer was vested in such retiree life insurance death benefit as of December 31, 2007. | |
(6) | Reflects the aggregate vested account balance at December 31, 2007 of the Named Executive Officer’s savings benefit under the Deferred Compensation Plan. | |
(7) | Reflects accumulated accrued benefit under our Post-Retirement Medical Plan for Messrs. Hart, Hicks and Slattery. No other Named Executive Officer was eligible to receive benefits under this plan at such date. Under the Post-Retirement Medical Plan, Alleghany would pay two-thirds of coverage premium and the Named Executive Officer would pay one-third of the coverage premium. Alleghany may terminate the Post-Retirement Medical Plan at any time. |
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Change in Pension | ||||||||||||||||||||||||||||||||
Value and | ||||||||||||||||||||||||||||||||
Non-Equity | Nonqualified | |||||||||||||||||||||||||||||||
Incentive Plan | Deferred | All Other | ||||||||||||||||||||||||||||||
Name and | Stock | Compensation | Compensation | Compen- | ||||||||||||||||||||||||||||
Principal Position | Year | Salary | Bonus | Awards(1) | (2) | Earnings(3) | sation(4) | Total | ||||||||||||||||||||||||
Weston M. Hicks, | 2007 | $ | 1,000,000 | — | $ | 5,001,272 | $ | 1,500,000 | $ | 1,160,447 | $ | 189,945 | $ | 8,851,664 | ||||||||||||||||||
President and CEO | 2006 | $ | 800,000 | — | $ | 6,527,614 | $ | 1,200,000 | $ | 856,009 | $ | 150,995 | $ | 9,534,618 | ||||||||||||||||||
Roger B. Gorham, | 2007 | $ | 510,000 | — | $ | 1,044,759 | $ | 459,000 | $ | 194,684 | $ | 98,656 | $ | 2,307,099 | ||||||||||||||||||
Senior Vice President- | 2006 | $ | 490,000 | — | $ | 781,053 | $ | 441,000 | $ | 173,622 | $ | 93,997 | $ | 1,979,672 | ||||||||||||||||||
Finance and Investments and CFO | ||||||||||||||||||||||||||||||||
Robert M. Hart, | 2007 | $ | 530,000 | — | $ | 988,552 | $ | 477,000 | $ | 880,724 | $ | 125,068 | $ | 3,001,344 | ||||||||||||||||||
Senior Vice President, | 2006 | $ | 510,000 | — | $ | 1,052,687 | $ | 459,000 | $ | 1,006,955 | $ | 103,875 | $ | 3,132,517 | ||||||||||||||||||
General Counsel and Secretary | ||||||||||||||||||||||||||||||||
James P. Slattery, | 2007 | $ | 470,000 | $ | 872,279 | $ | 423,000 | $ | 557,466 | $ | 105,591 | $ | 2,428,336 | |||||||||||||||||||
Senior Vice President- | 2006 | $ | 450,000 | — | $ | 927,032 | $ | 405,000 | $ | 393,476 | $ | 86,343 | $ | 2,261,851 | ||||||||||||||||||
Insurance | ||||||||||||||||||||||||||||||||
Jerry G. Borrelli, | 2007 | $ | 340,000 | — | $ | 203,411 | $ | 192,000 | $ | 86,051 | $ | 64,893 | $ | 886,355 | ||||||||||||||||||
Vice President and CAO | 2006 | $ | 262,538 | (5) | $ | 100,000 | (6) | $ | 234,247 | $ | 174,000 | $ | 64,190 | $ | 53,450 | $ | 888,425 |
(1) | Represents the dollar amount recognized for financial statement reporting purposes for the years ended December 31, 2007 and December 31, 2006, in accordance with SFAS 123R, of (i) all performance shares awarded to such Named Executive Officers under the 2002 LTIP and outstanding during 2007 and 2006, and (ii) for Messrs. Hicks and Gorham, outstanding restricted stock and stock unit awards. See Note 10 to the consolidated financial statements of Alleghany contained in its Annual Report onForm 10-K for the year ended December 31, 2007 for assumptions underlying the valuation of stock-based awards. Amounts in this column for Mr. Borrelli for the year ended December 31, 2006 reflect the award of additional performance shares in connection with his commencement of employment with Alleghany in February 2006. | |
(2) | Represents cash incentive earned in respect of 2007 and 2006 pursuant to awards under the 2005 MIP. | |
(3) | Reflects change in pension value during 2007 and 2006. |
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(4) | Reflects the following items: |
• | Post-Retirement Medical Plan: $28,462 for Mr. Hicks, $15,263 for Mr. Gorham, $27,981 for Mr. Hart, $25,329 for Mr. Slattery and $11,533 for Mr. Borrelli, representing the change in Post-Retirement Medical Plan benefit value during 2007, and $17,436 for Mr. Hicks, $11,028 for Mr. Gorham, $8,613 for Mr. Hart, $6,162 for Mr. Slattery and $8,431 for Mr. Borrelli, representing the change in Post-Retirement Medical Plan benefit value during 2006. | |
• | Tax reimbursement: Payments of $3,673 to Mr. Hicks, $1,264 to Mr. Gorham, $5,825 to Mr. Hart, $2,370 to Mr. Slattery and $644 to Mr. Borrelli for 2007, and payments of $5,763 to Mr. Hicks, $4,131 to Mr. Gorham, $8,024 to Mr. Hart, $5,763 to Mr. Slattery and $3,167 to Mr. Borrelli for 2006, representing the reimbursement of taxes, and the reimbursement itself, on income imputed to them pursuant to Alleghany’s long-term disability and group term life insurance policies. | |
• | Life insurance: Payments of $9,060 to Mr. Hicks, $5,754 to Mr. Gorham, $12,012 to Mr. Hart, $7,517 to Mr. Slattery and $4,903 to Mr. Borrelli in 2007, and payments of $7,796 to Mr. Hicks, $5,588 to Mr. Gorham, $10,854 to Mr. Hart, $7,026 to Mr. Slattery and $4,284 to Mr. Borrelli in 2006, which are equal to the dollar value of the insurance premiums paid by Alleghany for the benefit of such individuals for life insurance maintained by Alleghany on their behalf. The life insurance policies provide a death benefit to each such officer if he is an employee at the time of his death equal to four times the amount of his annual salary at January 1 of the year of his death. | |
• | Savings benefits: Savings benefits of $148,750 for Mr. Hicks, $76,375 for Mr. Gorham, $79,250 for Mr. Hart, $70,375 for Mr. Slattery and $47,813 for Mr. Borrelli for 2007, and savings benefits of $120,000 for Mr. Hicks, $73,250 for Mr. Gorham, $76,384 for Mr. Hart, $67,392 for Mr. Slattery and $37,568 for Mr. Borrelli for 2006, credited by Alleghany to each of them pursuant to the Deferred Compensation Plan. The method for calculating earnings on the savings benefit amounts under the Deferred Compensation Plan are set out on pages 54 and 55 in the narrative accompanying the “Nonqualified Deferred Compensation” table. |
(5) | Represents pro rata portion of 2006 annual base salary of $290,000, reflecting Mr. Borrelli’s commencement of employment with Alleghany in February 2006. | |
(6) | Represents a bonus paid to Mr. Borrelli upon the commencement of his employment with Alleghany in February 2006. |
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All Other | ||||||||||||||||||||||||||||||||||||
Stock | ||||||||||||||||||||||||||||||||||||
Estimated Possible Payouts Under | Estimated Future Payouts | Awards: | ||||||||||||||||||||||||||||||||||
Non-Equity Incentive | Under Equity Incentive | Number of | Grant Date | |||||||||||||||||||||||||||||||||
Plan Awards(2) | Plan Awards(3) | Shares of | Fair Value | |||||||||||||||||||||||||||||||||
Threshold | Target | Maximum | Threshold | Target | Maximum | Stock or | of Stock | |||||||||||||||||||||||||||||
Name | Grant Date(1) | ($) | ($) | ($) | (#) | (#) | (#) | Units (#) | Awards(4) | |||||||||||||||||||||||||||
Weston M. Hicks | Dec. 19, 2006 | $ | 50,000 | $ | 1,000,000 | $ | 1,500,000 | 1,777 | 5,923 | 8,855 | — | $ | 3,571,569 | |||||||||||||||||||||||
Roger B. Gorham | Dec. 19, 2006 | $ | 15,300 | $ | 306,000 | $ | 459,000 | 544 | 1,813 | 2,720 | — | $ | 1,093,239 | |||||||||||||||||||||||
Robert M. Hart | Dec. 19, 2006 | $ | 15,900 | $ | 318,000 | $ | 477,000 | 565 | 1,883 | 2,825 | — | $ | 1,135,449 | |||||||||||||||||||||||
James P. Slattery | Dec. 19, 2006 | $ | 14,100 | $ | 282,000 | $ | 423,000 | 501 | 1,670 | 2,505 | — | $ | 1,007,010 | |||||||||||||||||||||||
Jerry G. Borrelli | Dec. 19, 2006 | $ | 6,400 | $ | 128,000 | $ | 192,000 | 170 | 568 | 852 | — | $ | 342,504 |
(1) | As our customary practice would have been to grant all of these awards in January 2007, they are included in the table above; the Compensation Committee met in the preceding month of December 2006 to grant all of these awards because the 2002 LTIP, under which the equity incentive plan awards were granted, expired at 2006 year-end. | |
(2) | Reflects awards under the 2005 MIP. Threshold amounts reflect estimated possible payout if Adjusted Earnings Per Share equal 81% of Target Plan Earnings Per Share and maximum amounts reflect estimated possible payout if Adjusted Earnings Per Share equal 110% of Target Plan Earnings Per Share. If Adjusted Earnings Per Share is 80% or below of Target Plan Earnings Per Share, no payment would be made. | |
(3) | Reflects gross number of shares of common stock payable in connection with awards of performance shares for the2007-2010 award period under the 2002 LTIP. Threshold amounts reflect estimated future payout of performance shares if average annual compound growth in Book Value Per Share equals 3.6% in the award period; target amounts reflect estimated future payout of performance shares if average annual compound growth in Book Value Per Share equals 7% in the2007-2010 award period; and maximum amounts reflect estimated future payout of performance shares if average annual compound growth in Book Value Per Share equals or exceeds 10.5% in the2007-2010 award period. If average annual compound growth in Book Value Per Share is 3.5% or lower, none of these performance shares would be payable. | |
(4) | Reflects 2007 SFAS 123R value of performance share awards for the2007-2010 award period under the 2002 LTIP, as adjusted for dividends, assuming payouts at maximum. |
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• | Mr. Hicks’s salary is to be reviewed annually. | |
• | If Mr. Hicks’s employment is terminated by Alleghany other than for “Cause” or other than in the case of his “Total Disability,” Alleghany will continue to pay his base salary after such termination until such payments aggregate $1,000,000 on a gross basis. “Cause” is defined as conviction of a felony; willful failure to implement reasonable directives of the 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 Mr. Hicks’s duties; and “Total Disability” is defined as Mr. Hicks’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. | |
• | Mr. Hicks and Alleghany entered into a restricted stock award agreement dated as of October 7, 2002, whereby Mr. Hicks received an award of 32,473 performance-based, restricted shares of common stock (which includes shares received in subsequent stock dividends which are similarly restricted) under the 2002 LTIP. On February 27, 2007, the Compensation Committee determined that the performance measure for such award had been achieved and as a result, the restricted stock award of 32,473 shares vested and was paid out. | |
• | Mr. Hicks and Alleghany entered into a restricted stock unit matching grant agreement dated as of October 7, 2002, whereby Mr. Hicks received a restricted stock unit matching grant under the 2002 LTIP of two restricted stock units for every share of common stock Mr. Hicks purchased or received pursuant to stock dividends on those purchased shares on or before September 30, 2003 up to a maximum of 30,000 restricted stock units in respect of up to a maximum of 15,000 purchased shares. Material terms of this matching grant agreement are discussed below. | |
• | Mr. Hicks received a second grant of 27,601 performance-based, restricted shares of common stock (which includes shares received in subsequent stock dividends which are similarly restricted) under the 2002 LTIP upon his election as chief executive officer of Alleghany. Material terms of this restricted stock agreement are discussed below. |
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• | 1,719 performance shares, as adjusted for stock dividends, for the four-year award period ending December 31, 2008, which entitle him to a payout of cashand/or common stock up to a maximum amount equal to the value of one and one-half shares of common stock on the payout date for each performance share awarded; and | |
• | 1,289 performance shares, as adjusted for stock dividends, for the three-year award period ending December 31, 2007, which entitle him to a payout of cashand/or common stock up to a maximum amount equal to the value of one share of common stock on the payout date for each performance share awarded. |
• | 631 performance shares, as adjusted for stock dividends, for the four-year award period ending December 31, 2009, which entitle him to a payout of cashand/or common stock up to a maximum amount equal to the value of one and one-half shares of common stock on the payout date for each performance share awarded; | |
• | 363 performance shares, as adjusted for stock dividends, for the three-year award period ending December 31, 2008, which entitle him to a payout of cashand/or common stock |
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up to a maximum amount equal to the value of one share of common stock on the payout date for each performance share awarded; and |
• | 272 performance shares, as adjusted for stock dividends, for the two-year award period ending December 31, 2007, which entitle him to a payout of cashand/or common stock up to a maximum amount equal to the value of one share of common stock on the payout date for each performance share awarded. |
Stock Awards | ||||||||||||||||
Equity Incentive Plan | ||||||||||||||||
Equity Incentive Plan | Awards: Market or | |||||||||||||||
Number of | Market Value of | Awards: Number of | Payout Value of | |||||||||||||
Shares or Units | Shares or Units | Unearned Shares, | Unearned Shares, | |||||||||||||
of Stock That | of Stock That | Units or Other Rights | Units or Other Rights | |||||||||||||
Have Not | Have Not | That Have Not | That Have Not | |||||||||||||
Name | Vested (#) | Vested ($) | Vested (#) | Vested ($) | ||||||||||||
Weston M. Hicks | — | — | 8,237 | (1) | $ | 3,311,073 | ||||||||||
— | — | 6,731 | (2) | $ | 2,705,661 | |||||||||||
— | — | 8,702 | (3) | $ | 3,498,569 | |||||||||||
— | — | 8,885 | (4) | $ | 3,571,569 | |||||||||||
— | — | 27,601 | (5) | $ | 11,095,602 | |||||||||||
21,648 | (6) | $ | 8,702,496 | |||||||||||||
Roger B. Gorham | — | — | 1,934 | (1) | $ | 777,267 | ||||||||||
— | — | 2,580 | (2) | $ | 1,037,160 | |||||||||||
— | — | 3,198 | (3) | $ | 1,285,596 | |||||||||||
— | — | 2,720 | (4) | $ | 1,093,239 | |||||||||||
— | — | 3,783 | (7) | $ | 1,520,766 | |||||||||||
Robert M. Hart | — | — | 4,976 | (1) | $ | 2,000,151 | ||||||||||
— | — | 3,626 | (2) | $ | 1,457,451 | |||||||||||
— | — | 3,329 | (3) | $ | 1,338,057 | |||||||||||
— | — | 2,825 | (4) | $ | 1,135,449 | |||||||||||
James P. Slattery | — | — | 4,377 | (1) | $ | 1,759,554 | ||||||||||
— | — | 3,192 | (2) | $ | 1,283,184 | |||||||||||
— | — | 2,937 | (3) | $ | 1,180,674 | |||||||||||
— | — | 2,505 | (4) | $ | 1,007,010 | |||||||||||
Jerry G. Borrelli | — | — | 408 | (1) | $ | 164,016 | ||||||||||
— | — | 545 | (2) | $ | 218,889 | |||||||||||
— | — | 947 | (3) | $ | 380,493 | |||||||||||
— | — | 852 | (4) | $ | 342,504 |
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(1) | Performance shares under the 2002 LTIP, calculated at maximum payout pursuant to SEC requirements, which vest after completion of the award period ending December 31, 2007. | |
(2) | Performance shares under the 2002 LTIP, calculated at maximum payout pursuant to SEC requirements, which vest after completion of the award period ending December 31, 2008. | |
(3) | Performance shares under the 2002 LTIP, calculated at maximum payout pursuant to SEC requirements, which vest after completion of the award period ending December 31, 2009. | |
(4) | Performance shares under the 2002 LTIP, calculated at maximum payout pursuant to SEC requirements, which vest after completion of the award period ending December 31, 2010. | |
(5) | Restricted stock award under the 2002 LTIP which vests (i) after achievement of average annual compound growth in Stockholders’ Equity Per Share equal to 10% or more over a calendar year period commencing on January 1, 2005 and ending on December 31, 2008, 2009, 2010 or 2011 or (ii) if such performance goal has not been achieved as of December 31, 2011, after achievement of average annual compound growth in Stockholders’ Equity Per Share equal to 7% or more as measured over a calendar year period commencing on January 1, 2005 and ending on December 31, 2012, 2013 or 2014. If the performance goals are not achieved as of December 31, 2014, all of the restricted stock will be forfeited. If Alleghany terminates Mr. Hicks’s employment after December 31, 2006 other than for Cause or Total Disability, and the 7% performance goal has been satisfied in all respects except for the passage of the period of time required under the new award agreement, that number of restricted shares equal to 27,060 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, will vest. | |
(6) | Restricted stock units under the 2002 LTIP vest on October 7, 2012. As further described on page 45, if Mr. Hicks is terminated without Cause or by reason of his death or Total Disability prior to October 7, 2012, a pro rata portion of the restricted stock units credited to him shall vest and become nonforfeitable on the basis of 10% of such account for each full year of employment with Alleghany measured from October 7, 2002. | |
(7) | Restricted stock award under the 2002 LTIP which vests (i) after achievement of average annual compound growth in Stockholders’ Equity Per Share equal to 10% or more over a calendar year period commencing on January 1, 2005 and ending on December 31, 2008, 2009, 2010 or 2011 or (ii) if such performance goal has not been achieved as of December 31, 2011, after achievement of average annual compound growth in Stockholders’ Equity Per Share equal to 7% or more as measured over a calendar year period commencing on January 1, 2005 and ending on December 31, 2012, 2013 or 2014. If Alleghany terminates Mr. Gorham’s employment after December 31, 2006 other than for Cause or Total Disability, and the 7% performance goal has been satisfied in all respects except for the |
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passage of the period of time required under the new award agreement, that number of restricted shares equal to 3,709 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, will vest. |
Stock Awards(1) | ||||||||
Number of Shares | Dollar Value | |||||||
Name | Acquired on Vesting | Realized on Vesting | ||||||
Weston M. Hicks | 40,308 | $ | 15,825,002 | |||||
Roger B. Gorham | 1,224 | $ | 480,545 | |||||
Robert M. Hart | 5,106 | $ | 2,004,626 | |||||
James P. Slattery | 4,312 | $ | 1,692,900 | |||||
Jerry G. Borrelli | 269 | $ | 105,610 |
(1) | Reflects the gross amount of performance shares which vested upon certification of performance by the Compensation Committee on February 27, 2007 with respect to the award period ending December 31, 2006. Payouts of such performance shares were made at maximum. In addition to the above, the amounts for Mr. Hicks reflect the gross amount of 32,473 shares of restricted stock, with a dollar value of $12,748,905 realized on vesting, which vested pursuant to a restricted stock award agreement dated as of October 7, 2002 upon certification of performance by the Compensation Committee on February 27, 2007. Of the gross share amounts reported above, the performance shares, as well as the restricted shares for Mr. Hicks, were settled in cash (representing the minimum statutory withholding requirements in respect of the award) and in common stock, as follows: |
Name | Net Share Portion of Award | Cash Portion of Award | ||||||
Weston M. Hicks | 22,473 | $ | 7,001,675 | |||||
Roger B. Gorham | 810 | $ | 162,424 | |||||
Robert M. Hart | 3,007 | $ | 823,926 | |||||
James P. Slattery | 2,598 | $ | 672,914 | |||||
Jerry G. Borrelli | 178 | $ | 35,696 |
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Number of | Payments | |||||||||||||
Years of | Present Value | During | ||||||||||||
Credited | of Accumulated | Last | ||||||||||||
Name | Plan Name | Service | Benefit(1) | Fiscal Year | ||||||||||
Weston M. Hicks | Alleghany Corporation Retirement Plan | 5 | $ | 3,007,949 | — | |||||||||
Roger B. Gorham | Alleghany Corporation Retirement Plan | 3 | $ | 498,724 | — | |||||||||
Robert M. Hart | Alleghany Corporation Retirement Plan | 18 | (2) | $ | 1,887,679 | (3) | — | |||||||
James P. Slattery | Alleghany Corporation Retirement Plan | 6 | $ | 1,871,426 | — | |||||||||
Jerry G. Borrelli | Alleghany Corporation Retirement Plan | 2 | $ | 150,241 | — |
(1) | Reflects the estimated present value of the retirement benefit accumulated under the Retirement Plan as of December 31, 2007 (after giving effect to reduction for earlier benefit payments) by the Named Executive Officers, based in part on their years of service as of such date, as indicated in the table. The estimated present values are also based in part on the Named Executive Officers’ average compensation as of December 31, 2007 as determined under the Retirement Plan, which was $2,032,500 for Mr. Hicks; $857,399 for Mr. Gorham; $919,183 for Mr. Hart; $812,250 for Mr. Slattery; and $487,375 for Mr. Borrelli. The actuarial assumptions used to compute the present values are: a discount rate of 6.00% for pre-retirement interest, a30-year treasury rate of 4.53% for post-retirement interest and the unloaded 1994 group annuity reserving unisex (projected 8 years) mortality table. | |
(2) | Includes five years of service granted by the Board to Mr. Hart in connection with the commencement of his employment with Alleghany, in addition to the actual number of his years of service with Alleghany. The present value of his accumulated benefit shown in the above table would be lower by approximately $883,038 if these additional five years were not so included. | |
(3) | The present value of Mr. Hart’s accumulated benefit was reduced by $6,059,666, which represents the present value of an earlier payment made to him from the Retirement Plan. |
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Aggregate | ||||||||||||||||||||
Executive | Registrant | Earnings | Aggregate | Aggregate | ||||||||||||||||
Contributions | Contributions | in Last | Withdrawals/ | Balance at Last | ||||||||||||||||
in Last | in Last | Fiscal Year | Distributions | Fiscal Year End | ||||||||||||||||
Name | Fiscal Year | Fiscal Year(1) | (2) | (3) | (4) | |||||||||||||||
Weston M. Hicks | — | $ | 148,750 | $ | 43,202 | $ | 2,157 | $ | 671,463 | |||||||||||
Roger B. Gorham | — | $ | 76,375 | $ | 13,643 | $ | 1,107 | $ | 230,379 | |||||||||||
Robert M. Hart | — | $ | 79,250 | $ | 79,403 | $ | 1,149 | $ | 1,111,660 | |||||||||||
James P. Slattery | — | $ | 70,375 | $ | 35,647 | $ | 1,020 | $ | 461,110 | |||||||||||
Jerry G. Borrelli | $ | 160,000 | $ | 47,813 | $ | 10,430 | $ | 694 | $ | 246,631 |
(1) | Such amounts are included as a component of “All Other Compensation” set forth in the Summary Compensation Table on page 41 and discussed in Note (4) to the Summary Compensation Table. |
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(2) | With respect to Messrs. Hicks, Gorham, Hart and Borrelli, amounts represent interest earned on amounts credited to their savings benefit accounts during 2007. With respect to Mr. Slattery, amount represents interest earned, as well as appreciation and earnings on his common stock account, during 2007. Such amounts are not included in the Summary Compensation Table on page 41 as these amounts are not above-market interest. | |
(3) | Represents distribution for tax purposes. | |
(4) | A portion of this amount reflects contributions made by Alleghany to the savings benefit accounts of Messrs. Hicks, Gorham, Hart and Borrelli during 2006. Such portion is included as a component of “All Other Compensation” for 2006 set forth in the Summary Compensation Table on page 41 and discussed in Note (4) to the Summary Compensation Table. |
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• | the nomination of a person for election as a director, other than a person nominated by or at the direction of the Board, and | |
• | the submission of a proposal, other than a proposal submitted by or at the direction of the Board, at a meeting of stockholders. |
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ALLEGHANY CORPORATION VOTE BY MAIL 7 TIMES SQUARE TOWER Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Alleghany 17TH FLOOR Corporation, c/o Broadridge, 51 Mercedes Way, Edgewood, NEW YORK, NY 10036 NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: [X] ALLGH1 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY ALLEGHANY CORPORATION Vote On Directors Vote On Proposal 1. Election of Directors — The Board of 2. Ratification of Independent Registered Directors recommends a vote FOR the Public Accounting Firm — The Board of For Against Abstain For Against Abstain listed nominees. Directors recommends a vote FOR the following proposal. 1a. Rex D. Adams 0 0 0 Ratification of KPMG LLP as Alleghany 0 0 0 Corporation’s independent registered public accounting firm for the year 2008. 1b. Weston M. Hicks 0 0 0 1c. Jefferson W. Kirby 0 0 0 THIS PROXY WILL BE VOTED IN ACCORDANCE WITH INSTRUCTIONS GIVEN. IF NO CHOICES ARE INDICATED, THIS PROXY WILL BE VOTED FOR ITEMS 1 AND 2. For name or address changes, please check this box and write them on the back where indicated. 0 Authorized Signatures - - This section must be completed for your instructions to be executed — Date and Sign Below. Please sign exactly as your name or names appear(s) hereon. For joint accounts, both owners should sign. When signing as executor, administrator, attorney, trustee or guardian, etc., please give your full title. Signature [PLEASE SIGN WITHIN BOX] Date [mm/dd/yyyy] Signature (Joint Owners) [PLEASE SIGN WITHIN BOX] Date [mm/dd/yyyy] |
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Important Notice Regarding Internet Availability of Proxy Materials for the Alleghany Corporation 2008 Annual Meeting of Stockholders to be Held on April 25,2008 Our proxy materials relating to our Annual Meeting (notice, proxy statement, proxy and 2007 Annual Report to Stockholders on Form 10-K) are also available on the Internet. Please go to www.alleghany.com to view and obtain the proxy materials on line. Please Fold Along the Perforation, Detach and Return the Bottom Portion in the Enclosed Envelope ALLEGHANY CORPORATION PROXY FOR ANNUAL MEETING ON APRIL 25, 2008 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints John J. Burns, Jr., Weston M. Hicks and Robert M. Hart proxies, each with the power to appoint his substitute and with authority in each to act in the absence of the other, to represent and to vote all shares of stock of Alleghany Corporation which the undersigned is entitled to vote at the Annual Meeting of Stockholders of Alleghany Corporation to be held at the offices of its subsidiary RSUI Group, Inc., 945 East Paces Ferry Road, 18th Floor, Atlanta, Georgia, on Friday, April 25, 2008 at 10:00 a.m., local time, and any adjournments thereof, as indicated on the proposals described in the Proxy Statement, and all other matters properly coming before the meeting. Name/Address Changes: (If you noted any name or address changes above, please mark corresponding box on the reverse side.) IMPORTANT — THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE |