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DIRECTOR’S STOCK OPTION
AGREEMENT
This Agreement , made as of ___,
between Alleghany Corporation, a Delaware corporation
(“Alleghany”), and ___, a non-employee member of
Alleghany’s Board of Directors (the
“Director”).
Whereas , in order to encourage
increased stock ownership by the non-employee directors of
Alleghany, Alleghany has adopted the Alleghany Corporation 2005
Directors’ Stock Plan (the “Plan”).
Now, Therefore , in consideration
of the covenants and agreements herein contained, the parties
hereto hereby agree as follows:
1. Grant
. Alleghany herby grants to the Director an option (the
“Option”) to purchase 500 shares (the “Option
Shares”) of Alleghany common stock, par value $1.00 per share
(“Alleghany Common Stock”), at $ per share
(the “Option Price”).
2. Manner of
Exercise . Subject to the provisions of the Plan, the Option
may be exercised at any time during the period hereinafter
permitted by written notice to Alleghany stating the number of
shares with respect to which it is being exercised and accompanied
by payment of the Option Price (a) in the United States
dollars by cash or check, or (b) by tendering to Alleghany
shares of Alleghany Common Stock owned by the Director and having a
Fair Market Value (as defined in the Plan) equal to the cash
exercise price applicable to the Option, or (c) directing
Alleghany to withhold the number of shares issuable upon exercise
having a Fair Market Value equal to the Option Price, or
(d) by a combination of United States dollars, owned shares of
Alleghany Common Stock and shares issuable upon exercise as
aforesaid. It shall be a condition to the obligation of Alleghany
to issue shares of Alleghany Common Stock upon exercise of the
Option that the Director (or any other person entitled to exercise
the Option as provided in Paragraph 4 hereof) pay to
Alleghany, upon demand by Alleghany, such amount as may be
requested by Alleghany for the purpose of satisfying any liability
to withhold federal, state, local or foreign income or other taxes,
and if the amount requested is not paid Alleghany may refuse to
issue shares of Alleghany Common Stock.
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3. Timing of
Exercise; Term . The Option shall not be exercisable before the
expiration of one year from the date hereof or after the expiration
of ten years from the date hereof and may be exercised during such
period as follows: one-third (33-1/3 percent) of the total
number of shares of Common Stock covered by the Option shall become
exercisable each year beginning with the first anniversary of the
date hereof; provided that the Option shall automatically become
immediately exercisable in full when the Director ceases to be a
non-employee director of Alleghany for any reason other than
resignation as a director prior to the next Annual Meeting
succeeding the date hereof. If the Director resigns as a
non-employee director of Alleghany prior to the next Annual Meeting
succeeding the date hereof, the Option shall terminate
simultaneously with his resignation.
4.
Transferability and Sale . During the one-year period
following the grant of the Option, the Option shall not be
transferable by the Director otherwise than by will or the laws of
decent and distribution and shal
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