1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED JUNE 30, 2001
COMMISSION FILE NUMBER 1-9371
ALLEGHANY CORPORATION
---------------------
EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER
DELAWARE
--------
STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION
51-0283071
----------
INTERNAL REVENUE SERVICE EMPLOYER IDENTIFICATION NUMBER
375 PARK AVENUE, NEW YORK, NEW YORK 10152
-----------------------------------------
ADDRESS OF PRINCIPAL EXECUTIVE OFFICE, INCLUDING ZIP CODE
212 / 752-1356
--------------
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE
NOT APPLICABLE
--------------
FORMER NAME, FORMER ADDRESS, AND FORMER FISCAL YEAR,
IF CHANGED SINCE LAST REPORT
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS
REQUIRED TO FILE).
YES [X] NO [ ]
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASS OF
COMMON STOCK, AS OF THE CLOSE OF THE PERIOD COVERED BY THIS REPORT:
7,239,811
---------
(AS OF JUNE 30, 2001)
2
ITEM 1. FINANCIAL STATEMENTS
ALLEGHANY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDED
JUNE 30, 2001 AND 2000
(dollars in thousands, except share and per share amounts)
(unaudited)
2001 2000 ***
----------- -----------
REVENUES
Net property and casualty premiums earned $ 97,197 $ 69,241
Interest, dividend and other income 50,895 64,171
Net mineral and filtration sales 58,023 51,090
Gain on sale of subsidiary (13) 158,521
Net gain (loss) on investment transactions 1,915 (321)
----------- -----------
Total revenues 208,017 342,702
----------- -----------
COSTS AND EXPENSES
Commissions and brokerage expenses 29,101 25,910
Salaries, administrative and other operating expenses 61,689 101,986
Property and casualty losses and loss adjustment expenses 79,635 64,445
Cost of mineral and filtration sales 39,916 35,641
Interest expense 3,970 6,132
Corporate administration 8,976 5,266
----------- -----------
Total costs and expenses 223,287 239,380
----------- -----------
Earnings (loss) from continuing operations, before income taxes (15,270) 103,322
Income taxes (5,952) (4,677)
----------- -----------
Earnings (loss) from continuing operations (9,318) 107,999
DISCONTINUED OPERATIONS
Earnings from discontinued operations, net of tax 0 8,057
----------- -----------
Net earnings (loss) $ (9,318) $ 116,056
=========== ===========
BASIC EARNINGS (LOSS) PER SHARE OF COMMON STOCK **
Continuing operations $ (1.29) $ 14.33
Discontinued operations 1.07
----------- -----------
Basic net earnings (loss) per share $ (1.29) $ 15.40
=========== ===========
DILUTED EARNINGS (LOSS) PER SHARE OF COMMON STOCK **
Continuing operations $ (1.29) $ 14.14
Discontinued operations 1.05
----------- -----------
Diluted net earnings (loss) per share $ (1.29) $ 15.19
=========== ===========
Dividends per share of common stock * *
=========== ===========
Average number of outstanding shares of common stock ** 7,243,780 7,538,231
=========== ===========
* In March 2001, Alleghany declared a dividend consisting of one share of
Alleghany common stock for every fifty shares outstanding.
** Adjusted to reflect the common stock dividend declared in March 2001.
*** Amounts have been restated to reflect the elimination of the one-quarter
lag in the reporting of Alleghany Insurance Holdings' results.
2
3
ALLEGHANY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE SIX MONTHS ENDED
JUNE 30, 2001 AND 2000
(dollars in thousands, except share and per share amounts)
(unaudited)
2001 2000 ***
----------- -----------
REVENUES
Net property and casualty premiums earned $ 173,644 $ 224,330
Interest, dividend and other income 106,308 117,617
Net mineral and filtration sales 108,181 100,196
Net gain on sale of subsidiary 775,810 158,521
Net gain on investment transactions 2,980 73
----------- -----------
Total revenues 1,166,923 600,737
----------- -----------
COSTS AND EXPENSES
Commissions and brokerage expenses 49,700 70,046
Salaries, administrative and other operating expenses 114,862 155,087
Property and casualty losses and loss adjustment expenses 143,305 230,449
Cost of mineral and filtration sales 78,829 70,299
Interest expense 7,984 13,831
Corporate administration 32,707 10,837
----------- -----------
Total costs and expenses 427,387 550,549
----------- -----------
Earnings from continuing operations, before income taxes 739,536 50,188
Income tax expense (benefit) 288,379 (24,479)
----------- -----------
Earnings from continuing operations 451,157 74,667
DISCONTINUED OPERATIONS
Earnings (loss) from discontinued operations, net of tax (5,066) 16,683
----------- -----------
Net earnings $ 446,091 $ 91,350
=========== ===========
BASIC EARNINGS PER SHARE OF COMMON STOCK **
Continuing operations $ 62.37 $ 9.87
Discontinued operations (0.70) 2.21
----------- -----------
Basic net earnings per share $ 61.67 $ 12.08
=========== ===========
DILUTED EARNINGS PER SHARE OF COMMON STOCK **
Continuing operations $ 61.56 $ 9.78
Discontinued operations (0.69) 2.19
----------- -----------
Diluted net earnings per share $ 60.87 $ 11.97
=========== ===========
Dividends per share of common stock * *
=========== ===========
Average number of outstanding shares of common stock ** 7,233,145 7,562,381
=========== ===========
* In March 2001, Alleghany declared a dividend consisting of one share of
Alleghany common stock for every fifty shares outstanding.
** Adjusted to reflect the common stock dividend declared in March 2001.
*** Amounts have been restated to reflect the elimination of the one-quarter
lag in the reporting of Alleghany Insurance Holdings' results.
3
4
ALLEGHANY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2001 AND DECEMBER 31, 2000
(dollars in thousands, except share and per share amounts)
(Unaudited)
June 30, December 31,
2001 2000
---------- ----------
ASSETS 6/30/01 12/31/00
Available for sale securities: ------- --------
Equity Securities (cost $248,980 $222,101 ) $ 619,087 $ 535,377
Other (cost $ 9,262 $ 8,882 ) 9,262 8,882
Short-term investments 1,050,893 342,341
---------- ----------
1,679,242 886,600
Cash 9,799 10,247
Premium trust funds 447,493 312,610
Notes receivable 92,155 92,156
Funds held, accounts and other receivables 222,511 190,221
Property and equipment - at cost, less accumulated depreciation and amortization 171,945 165,819
Reinsurance receivable 602,339 462,387
Other assets 510,208 525,791
Net assets of discontinued operations 0 61,785
---------- ----------
$3,735,692 $2,707,616
========== ==========
LIABILITIES AND COMMON STOCKHOLDERS' EQUITY
Property and casualty losses and loss adjustment expenses $1,029,767 $ 855,905
Unearned premiums 234,970 217,754
Other liabilities 515,803 188,458
Long-term debt of subsidiaries 237,530 228,343
Net deferred tax liability 67,889 52,082
---------- ----------
Total liabilities 2,085,959 1,542,542
Common stockholders' equity 1,649,733 1,165,074
---------- ----------
$3,735,692 $2,707,616
========== ==========
Shares of common stock outstanding * 7,239,811 7,211,820
========== ==========
Common stockholders' equity per share * $ 227.87 $ 161.55
========== ==========
* Adjusted to reflect the common stock dividend declared in March 2001.
4
5
ALLEGHANY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE THREE MONTHS ENDED
JUNE 30, 2001 AND 2000
(dollars in thousands)
(unaudited)
2001 2000
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings from continuing operations $ 451,157 $ 74,667
Adjustments to reconcile net earnings to cash provided by (used in) operations:
Depreciation and amortization 8,523 10,586
Net gain on investment transactions (477,786) (159,010)
Tax benefit on stock options exercised 725 3,127
Other charges, net (16,136) (41,383)
Increase in funds held, accounts and other receivables (32,290) (157,572)
Increase in reinsurance receivable (139,952) (167,081)
Increase in property and casualty losses and loss adjustment expenses 173,862 257,816
Increase in unearned premium reserves 17,216 68,445
Increase in premium trust funds (134,883) (75,220)
Increase in other assets 15,584 (65,810)
Increase in other liabilities 327,345 278,252
--------- ---------
Net adjustments (257,792) (47,850)
--------- ---------
Cash provided by operations 193,365 26,817
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments (77,042) (126,755)
Maturities of investments 0 0
Sales of investments 48,468 41,496
Purchases of property and equipment (5,681) (6,917)
Net change in short-term investments (705,443) (436,482)
Other, net 828 33,555
Proceeds from sale of subsidiaries, net of cash disposed 531,477 463,900
--------- ---------
Net cash (used in) provided by investing activities (207,393) (31,203)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on long-term debt (172,112) (18,000)
Proceeds of long-term debt 181,628 19,114
Treasury stock acquisitions (5,971) (38,609)
Net cash provided by discontinued operations 0 18,000
Other, net 10,035 5,245
--------- ---------
Net cash provided (used in) by financing activities 13,580 (14,250)
--------- ---------
Net (decrease) increase in cash (448) (18,636)
Cash at beginning of period 10,247 25,001
--------- ---------
Cash at end of period $ 9,799 $ 6,365
========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 8,002 $ 3,948
Income taxes $ 3,459 $ 389
5
6
Notes to the Consolidated Financial Statements
This report should be read in conjunction with the Annual Report on Form
10-K for the year ended December 31, 2000 (the "2000 Form 10-K") and the
Quarterly Report on Form 10-Q for the quarter ended March 31, 2001 of Alleghany
Corporation (the "Company").
The information included in this report is unaudited but reflects all
adjustments which, in the opinion of management, are necessary to a fair
statement of the results of the interim periods covered thereby. All adjustments
are of a normal and recurring nature except as described herein.
In June 2001, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 141, "Business Combinations"
and Statement of Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets." Statement 141 supersedes APB Opinion No. 16, "Business
Combinations" and FASB Statement No. 38, "Accounting for Preacquisition
Contingencies of Purchased Enterprises," and requires all business
combinations in the scope of the Statement to be accounted for using the
purchase method. Statement 142 supersedes APB Opinion No. 17, "Intangible
Assets," and, among other items, addresses how goodwill and other intangible
assets should be accounted for after they have been initially recognized in
the financial statements.
Statement 141 applies to all business combinations initiated after June
30, 2001. Statement 142 is required to be applied starting with fiscal years
beginning after December 15, 2001. Early application of Statement 142 is not
permitted. The Company is studying the potential effects of Statement 142, and
expects that Statement 142 may require the Company to record material charges
for the write-off of the goodwill in Alleghany Insurance Holdings LLC and its
subsidiaries. As of June 30, 2001, the goodwill in respect of Alleghany
Insurance Holdings was $138.0 million.
Comprehensive Income
The Company's total comprehensive (loss) income for the three months and
six months ended June 30, 2001 and 2000 was $(8,643) thousand and $132,409
thousand, and $480,316 thousand and $92,017 thousand, respectively.
Comprehensive income (loss) includes the Company's net earnings adjusted for
changes in unrealized appreciation (depreciation) of investments, which was
$1,794 thousand and $21,442 thousand, and $37,309 thousand and $4,995 thousand,
and cumulative translation adjustments, which was $(1,119) thousand and $(4,089)
thousand, and $(3,084) thousand and $(4,328) thousand, for the three months and
six months ended June 30, 2001 and 2000, respectively.
6
7
Segment Information
Information concerning the Company's continuing operations by industry
segment is summarized below (in thousands):
For the three months ended For the six months ended
June 30, June 30, June 30, June 30,
2001 2000 2001 2000
--------- --------- ----------- ---------
REVENUES
Property and casualty
insurance* $ 108,494 $ 82,581 $ 194,723 $ 261,262
Mining and filtration 57,828 52,026 107,885 100,821
Industrial fasteners 30,665 39,400 64,428 62,976
Corporate activities 11,030 168,695 799,887 175,678
--------- --------- ----------- ---------
Total $ 208,017 $ 342,702 $ 1,166,923 $ 600,737
========= ========= =========== =========
EARNINGS (LOSS) FROM
CONTINUING OPERATIONS
Property and casualty
insurance* $ (13,481) $ (44,949) $ (18,609) (103,873)
Mining and filtration 7,020 (14,481) 8,099 (10,614)
Industrial fasteners (8,781) 1,433 (12,669) 4,215
Corporate activities (28) 161,319 762,715 160,460
--------- --------- ----------- ---------
Total (15,270) 103,322 739,536 50,188
Income taxes (5,952) (4,677) 288,379 (24,479)
--------- --------- ----------- ---------
Earnings from continuing
operations (9,318) 107,999 451,157 74,667
June 30, December 31,
2001 2000
---------- ----------
IDENTIFIABLE ASSETS
Asset management $ -- $ 61,785
Property and casualty
insurance 1,943,439 1,193,459
Mining and filtration 324,639 301,390
Industrial fasteners 99,249 117,639
Corporate activities 1,368,365 1,033,343
---------- ----------
Total $3,735,692 $2,707,616
========== ==========
* Includes the operations of Underwriters Re Group until its sale to Swiss Re
America Holding Corporation on May 10, 2000.
7
8
Contingencies
The Company"s subsidiaries are parties to pending claims and litigation in
the ordinary course of their businesses. Each such operating unit makes
provisions on its books in accordance with generally accepted accounting
principles for estimated losses to be incurred as a result of such claims and
litigation, including related legal costs. In the opinion of management, such
provisions are adequate as of June 30, 2001.
ITEM 2. MANAGEMENT"S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION.
The Company reported net losses from continuing operations in the second
quarter of 2001 of $9.3 million on revenues of $208.0 million, compared with net
earnings of $108.0 million on revenues of $342.7 million in the second quarter
of 2000. Net losses including discontinued operations were $9.3 million in the
second quarter of 2001, compared with net earnings including discontinued
operations of $116.1 million in the 2000 period. Discontinued operations consist
of the operations of Alleghany Asset Management prior to its disposition in
February 2001. The 2000 second quarter results include the after-tax gain of
$143.0 million on the sale of Underwriters Re Group which occurred in May 2000
and a $44.6 million pre-tax loss on the operations of Underwriters Re Group
(excluding Alleghany Underwriting Holdings Ltd, which was retained by the
Company upon the sale of Underwriters Re Group) through the close of the sale,
principally due to costs relating to the sale.
In the first six months of 2001, the Company's net earnings from
continuing operations were $451.2 million on revenues of $1,167.0 million,
compared with $74.7 million on revenues of $600.7 million in the first six
months of 2000. Net earnings including discontinued operations were $446.1
million in the first six months of 2001, compared with $91.4 million in the 2000
period. The 2001 results include the gain on the disposition of Alleghany Asset
Management, which merged into a wholly owned subsidiary of ABN AMRO North
America Holding Company on February 1, 2001. The Company received cash proceeds
of $825 million and recorded an after-tax gain of about $474.8 million,
excluding certain expenses relating to the closing of the transaction. The tax
on the gain is approximately $300 million, which is included in other
liabilities on the Company's June 30, 2001 balance sheet.
Alleghany Insurance Holdings LLC ("Alleghany Insurance Holdings," the
parent company of Alleghany Underwriting Holdings Ltd) recorded pre-tax losses
of $13.5 million on revenues of $108.5 million in the 2001 second quarter,
compared with pre-tax losses of $0.4 million on revenues of $74.8 million in the
corresponding 2000 period, and pre-tax losses of $18.6 million on revenues of
$194.7 million in the first six months of 2001, compared with pre-tax losses of
$47.8 million on revenues of $135.3 million in the first six months of 2000.
8
9
The 2001 second quarter losses of Alleghany Insurance Holdings reflect
strengthening of its loss reserves in the amount of $11.6 million pre-tax in
2001 for the 1998, 1999 and 2000 years of account following the completion of a
recent reserve study, which showed increased adverse loss development in those
years of account, and a pre-tax charge of $2.5 million for uncollectible
reinsurance. The 2001 six-month results also reflect $8.4 million of pre-tax
losses net of reinsurance relating to the Petrobras oil rig explosion off the
coast of Brazil earlier this year. Investment income in 2001 increased from the
prior year period as a result of the cash and marketable securities contributed
to Alleghany Insurance Holdings by the Company. Approximately $278 million of
such cash and securities is securing Alleghany Insurance Holdings' letter of
credit agreement, which supports its underwriting activities. The credit
agreement was secured by the stock of Alleghany Asset Management prior to its
sale.
The 2000 losses reflect strengthening of its loss reserves in the amount
of $44.0 million pre-tax for the 1998, 1999 and 2000 years of account following
the completion of a reserve study. The results of Alleghany Insurance Holdings
were reported on a one-quarter lag for a transitional period. The lag was
eliminated in the Company's results for the year ended December 31, 2000, and
the Company's 2000 results have been restated to reflect such elimination.
World Minerals Inc. ("World Minerals") recorded pre-tax earnings of $7.0
million on revenues of $57.8 million in the 2001 second quarter, compared with
pre-tax losses of $14.5 million on revenues of $52.0 million in the 2000 second
quarter, and pre-tax earnings of $8.1 million on revenues of $107.9 million in
the first six months of 2001, compared with pre-tax losses of $10.6 million on
revenues of $100.8 million in the first six months of 2000. The 2001 results
reflect an increase in net sales, and improved profitability in the second
quarter despite the continued high North American energy costs, particularly in
California, and a weak Euro relative to the U.S. dollar. The 2000 results
include non-recurring charges of $20.2 million pre-tax for the write-off of
certain joint venture investments and assets no longer used in production, and
expenses relating to changes in World Minerals' senior management. Excluding
such non-recurring charges, World Minerals would have contributed pre-tax
earnings of $5.7 million in the 2000 second quarter.
Heads & Threads International LLC ("Heads & Threads") recorded pre-tax
losses of $8.8 million on revenues of $30.7 million in the 2001 second quarter,
compared with pre-tax earnings of $1.4 million on revenues of $39.4 million in
the 2000 second quarter, and pre-tax losses of $12.7 million on revenues of
$64.4 million in the first six months of 2001, compared with pre-tax earnings of
$4.2 million on revenues of $63.0 million in the first six months of 2000. The
2001 periods reflect a material slowdown in the markets for its products, a
strengthening of its inventory reserves, costs of assimilating the acquisitions
made in 2000, and $2.5 million of pre-tax charges for write-offs relating to
9
10
its computer system and the closure of certain branches and sales offices, and
expenses relating to changes in Heads & Threads' senior management. The 2000
results include the gain on the sale of a warehouse property.
Net gains on investment transactions from continuing operations after
taxes in the second quarter of 2001 totalled $1.2 million, compared with a loss
of $200 thousand in the 2000 period. The gains in 2001 principally resulted from
the sales of portfolio securities by Alleghany Insurance Holdings.
As of June 30, 2001, the Company beneficially owned approximately 17.95
million shares, or 4.6 percent, of the outstanding common stock of Burlington
Northern Santa Fe Corporation, which had an aggregate market value on that date
of approximately $543.9 million, or $30.30 per share, compared with a market
value on December 31, 2000 of $508.2 million, or $28.3125 per share. The
aggregate cost of such shares is approximately $201.3 million, or $11.21 per
share.
The Company has previously announced that it may purchase shares of its
common stock in open market transactions from time to time. In the second
quarter of 2001, the Company purchased an aggregate of 28,527 shares of its
common stock for about $5.6 million, for an average cost of about $198.18 per
share. As of June 30, 2001, the Company had 7,239,811 shares of its common stock
outstanding.
The Company's common stockholders' equity per share at June 30, 2001 was
$227.87 per share, a 41 percent increase from common stockholders' equity per
share of $161.55 as of December 31, 2000 (adjusted for the March 2001 stock
dividend), primarily reflecting the gain on the disposition of Alleghany Asset
Management.
On July 20, 2001, the Company announced the signing of a definitive merger
agreement under which the Company will acquire Capitol Transamerica Corporation
("Capitol Transamerica"), an insurance holding company based in Madison,
Wisconsin (Nasdaq: CATA), at an aggregate price of about $182 million in cash.
Capital Transamerica writes specialty lines of property and casualty insurance
as well as fidelity and surety coverages, primarily through its subsidiary
Capitol Indemnity Corporation. The Capitol Transamerica Group is rated A+
(Superior) by A.M. Best Company, Inc., an independent organization that analyzes
the insurance industry. A closing is expected to occur before the end of the
year.
The Company's results in the first six months of 2001 are not indicative
of operating results in future periods. The Company and its subsidiaries have
adequate internally generated funds and unused credit facilities to provide for
the currently foreseeable needs of its and their businesses.
10
11
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Market risk is the risk of loss from adverse changes in market prices and
rates, such as interest rates, foreign currency exchange rates and commodity
prices. The primary market risk related to the Company's non-trading financial
instruments is the risk of loss associated with adverse changes in interest
rates.
The Company's 2000 Form 10-K provides a more detailed discussion of the
market risks affecting its operations. Based on the Company's estimates as of
June 30, 2001, no material change has occurred in its market risks, as compared
to amounts disclosed in its 2000 Form 10-K.
Forward-Looking Statements
The "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Quantitative and Qualitative Disclosures About
Market Risk" contain disclosures which are forward-looking statements.
Forward-looking statements include all statements that do not relate solely to
historical or current facts, and can be identified by the use of words such as
"may," "will," "expect," "project," "estimate," "anticipate," "plan" or
"continue." These forward-looking statements are based upon the Company's
current plans or expectations and are subject to a number of uncertainties and
risks that could significantly affect current plans, anticipated actions and the
Company's future financial condition and results. The uncertainties and risks
include, but are not limited to, those relating to conducting operations in a
competitive environment; acquisition and disposition activities; and general
economic conditions. As a consequence, current plans, anticipated actions and
future financial condition and results may differ from those expressed in any
forward-looking statements made by or on behalf of the Company.
11
12
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES.
(c) Recent Sales of Unregistered Securities.
On March 20, and July 16, 2001, the Company issued 824 and 302 shares of
common stock, respectively, to Paul F. Woodberry, director of Alleghany
Properties, Inc., a wholly owned subsidiary of the Company, pursuant to a
long-term incentive arrangement with the Company in respect of sales of real
estate assets by Alleghany Properties, Inc. The sale of common stock was exempt
from registration under the Securities Act pursuant to Section 4(2) thereof, as
a transaction not involving a public offering.
On April 12, 2001, the Company issued 1,960 shares of common stock to
Allan P. Kirby, Jr. upon the exercise of an option to purchase 1,000 shares of
the Company's common stock, subject to adjustment for stock dividends and the
spin-off of Chicago Title, at an exercise price of $48.8991 per share, or
$95,842.23 in the aggregate, granted to Mr. Kirby on April 29, 1991, pursuant to
the Alleghany Corporation Amended and Restated Directors' Stock Option Plan. The
sale of the common stock was exempt from registration under the Securities Act
of 1933, as amended (the "Securities Act"), pursuant to Section 4(2) thereof, as
a transaction not involving a public offering.
On May 1, 2001, the Company issued an aggregate of 455 shares of the
Company's common stock to seven non-employee directors of the Company pursuant
to the Alleghany Corporation Directors' Equity Compensation Plan representing
one-half of the value of each director's retainer for the following twelve
months' service as a director, exclusive of any per meeting fees, committee fees
or expense reimbursements. The sale of common stock was exempt from registration
under the Securities Act pursuant to Section 4(2) thereof, as a transaction not
involving a public offering.
The above does not include unregistered issuances of the Company's common
stock that did not involve a sale, consisting of issuances of common stock and
other securities pursuant to employee incentive plans.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Company"s 2001 Annual Meeting of Stockholders was held on April 27,
2001. At the Annual Meeting, three directors were elected to serve for
three-year terms on the Company"s Board of Directors, by the following votes:
FOR WITHHELD
--- --------
Three-Year Term:
---------------
Allan P. Kirby, Jr 6,111,282 65,400
Thomas S. Johnson 6,153,228 23,454
James F. Will 6,153,175 23,507
The selection of KPMG LLP as auditors for the Company for the year 2001
was ratified by a vote of 6,172,658 shares in favor and 3,425 shares opposed. A
total of 599 shares abstained from voting.
12
13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
--------------------------------
(a) Exhibits.
Exhibit Number Description
-------------- -----------
10.1(a) Agreement and Plan of Merger dated as of July
20, 2001 by and among Capitol Transamerica
Corporation, ABC Acquisition Corp. and
Alleghany Corporation (the "Capitol
Transamerica Merger Agreement")
10.1(b) List of Contents of Exhibits and Schedules to the
Capitol Transamerica Merger Agreement. The
Company agrees to furnish supplementally a copy
of any omitted exhibit or schedule to the
Securities and Exchange Commission upon request.
13
14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ALLEGHANY CORPORATION
Registrant
Date: August 14, 2001 /s/ David B. Cuming
--------------------
David B. Cuming
Senior Vice President
(and principal financial officer)
14