-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, oNriOXKcg9IXUMgZvaceTHuipQ3Pvu167lt0RO7OEXJpoy6LwEyUHIVsjrwsJNUH VP6AzHf3skIVwOFKXOHJ4w== 0000906416-95-000018.txt : 19950512 0000906416-95-000018.hdr.sgml : 19950512 ACCESSION NUMBER: 0000906416-95-000018 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950511 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLEGHANY CORP /DE CENTRAL INDEX KEY: 0000775368 STANDARD INDUSTRIAL CLASSIFICATION: TITLE INSURANCE [6361] IRS NUMBER: 510283071 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09371 FILM NUMBER: 95536791 BUSINESS ADDRESS: STREET 1: PARK AVE PLZ CITY: NEW YORK STATE: NY ZIP: 10055 BUSINESS PHONE: 2127521356 MAIL ADDRESS: STREET 1: PARK AVENUE PLAZA CITY: NEW YORK STATE: NY ZIP: 10055 FORMER COMPANY: FORMER CONFORMED NAME: ALLEGHANY FINANCIAL CORP DATE OF NAME CHANGE: 19870115 10-Q 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 MARCH 31, 1995 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 Idenfification Number Park Avenue Plaza, New York, New York 10055 ------------------------------------------------------------ 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 such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ---- ---- Indicate the number of shares outstanding for each of the Issuer's classes of common stock, as of the close of the period covered by this report: 7,053,813 ------------------------- (As of March 31, 1995) PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS ALLEGHANY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994 (dollars in thousands, except share and per share amounts) (unaudited)
1995 1994 * ----------------------- Revenues Title premiums, escrow and trust fees $243,948 $352,759 Net reinsurance premiums earned 68,777 52,679 Interest, dividend and other income 45,355 38,489 Net mineral and filtration sales 41,279 35,964 Net gain (loss) on investment transactions (2,307) 92 ---------------------- Total revenues 397,052 479,983 ---------------------- Costs and expenses Salaries, commissions and other employee benefits 208,354 267,451 Administrative, selling and other operating expenses 82,884 84,331 Provisions for title losses and other claims 19,449 23,421 Property and casualty losses and loss adjustment expenses 49,480 44,160 Cost of mineral and filtration sales 27,809 25,480 Interest expense 6,776 7,076 Corporate administration 2,581 3,507 ---------------------- Total costs and expenses 397,333 455,426 ---------------------- Earnings (loss) from continuing operations, before income taxes (281) 24,557 Income taxes (1,074) 7,568 ---------------------- Net earnings from continuing operations 793 16,989 ---------------------- Discontinued operations Earnings from discontinued operations, net of tax 0 2,950 ---------------------- Net earnings $793 $19,939 ====================== Earnings per share of common stock Operations $0.11 $2.47 Discontinued operations 0.00 0.42 ---------------------- Total earnings per share $0.11 $2.89 ====================== Dividends per share of common stock ** ** ====================== Average number of outstanding shares of common stock *** 7,045,662 6,894,410 ======================
* Restated to reflect discontinued operations. ** In March 1995 and 1994, Alleghany declared a dividend consisting of one share of Alleghany common stock for every fifty shares outstanding. *** Adjusted to reflect common stock dividends declared in March 1995 and 1994. ALLEGHANY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS MARCH 31, 1995 AND DECEMBER 31, 1994 (dollars in thousands, except share and per share amounts)
March 31, December 31, 1995 1994 (Unaudited) ------------------------- Assets Investments: Fixed maturities - available for sale: U.S. Government, government agency and municipal obligations (amortized cost $1,034,130) $1,005,992 $1,006,421 Certificates of deposit and commercial paper (amortized cost 38,214) 38,214 107,082 Bonds, notes and other (amortized cost 418,387) 406,162 465,011 Equity securities (cost 347,187) 544,226 357,220 -------------------------- 1,994,594 1,935,734 Cash 169,215 107,942 Notes receivable 91,536 91,536 Funds held, accounts and other receivables 257,174 211,451 Title records and indexes 156,395 156,293 Property and equipment - at cost, less accumulated depreciation and amortization 208,274 202,918 Reinsurance receivable 428,090 422,683 Other assets 390,788 459,334 -------------------------- $3,696,066 $3,587,891 ========================== Liabilities and Common Stockholders' Equity Title losses and other claims $530,392 $537,073 Property and casualty losses and loss adjustment expenses 970,987 940,527 Other liabilities 420,652 436,180 Long-term debt of parent company 59,600 59,600 Long-term debt of subsidiaries 319,470 275,473 Trust and escrow deposits secured by pledged assets 283,878 317,845 -------------------------- Total liabilities 2,584,979 2,566,698 Common stockholders' equity 1,111,087 1,021,193 -------------------------- $3,696,066 $3,587,891 ========================== Shares of common stock outstanding 7,053,813 7,044,407 * ========================== Common stockholders' equity per share $157.52 $144.97 * ==========================
* Adjusted to reflect the common stock dividend declared in March 1995. ALLEGHANY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994 (dollars in thousands) (unaudited)
1995 1994 * ----------------------- Cash flows from operating activities Earnings from continuing operations $793 $16,989 Adjustments to reconcile earnings from continuing operations to cash provided by continuing operations: Depreciation and amortization 10,549 11,721 Net loss (gain) on investment transactions 2,307 (92) Other charges to continuing operations, net (720) 1,197 Increase in funds held, accounts and other receivables (45,723) (1,104) Increase in reinsurance receivable (5,407) (12,974) (Decrease) increase in title losses and other claims (6,681) 2,353 Increase in property and casualty loss and loss adjustment expenses 30,460 13,215 Decrease (increase) in other assets 6,609 (920) Decrease in other liabilities (15,528) (29,017) Decrease in trust and escrow deposits (33,967) (12,833) --------------------- Net adjustments (58,101) (28,454) --------------------- Cash used in continuing operations (57,308) (11,465) --------------------- Cash provided by discontinued operations 0 2,304 --------------------- Cash used in operations (57,308) (9,161) --------------------- Cash flows from investing activities Purchase of investments (155,552) (380,496) Maturities of investments 133,465 175,586 Sales of investments 98,170 267,646 Purchases of property and equipment (5,904) (7,313) Disposition of property and equipment 3,080 38 Net purchases of title records and indexes (102) (110) --------------------- Net cash provided by investing activities 73,157 55,351 --------------------- Cash flows from financing activities Principal payments on long-term debt (11,022) (5,832) Proceeds of long-term debt 55,000 0 Purchase of treasury shares (778) 0 Common stock distributions 2,224 46 --------------------- Net cash provided by (used in) financing activities 45,424 (5,786) --------------------- Net increase in cash 61,273 40,404 Cash at beginning of period 107,942 109,166 --------------------- Cash at end of period $169,215 $149,570 ===================== Supplemental disclosures of cash flow information Cash paid during the period for: Interest $5,372 $4,941 Income taxes $2,151 $1,142
* Restated to reflect discontinued operations. Notes to Consolidated Financial Statements This report should be read in conjunction with the Annual Report on Form 10-K for the year ended December 31, 1994 (the "1994 Form 10-K Report") 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. Contingencies ------------- The Company's subsidiaries and division 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 March 31, 1995. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL ------------------------------------------------- CONDITION AND RESULTS OF OPERATIONS. ------------------------------------ The Company reported net earnings of $.8 million on revenues of $397.1 million in the 1995 first quarter, compared with $19.9 million on revenues of $480 million in the 1994 first quarter. The Company's net earnings in the 1994 quarter include $2.9 million of earnings from discontinued operations, representing the results of the Company's retail banking subsidiary, Sacramento Savings Bank, which was sold in the fourth quarter of 1994. Chicago Title and Trust Company ("CT&T") recorded a pre-tax loss of $12 million on revenues of $258.3 million, compared with a contribution of pre-tax earnings of $23.3 million on revenues of $364.9 million in the 1994 first quarter. CT&T's title operations in the first quarter of 1994 produced the best first-quarter results in CT&T's history. The first quarter is characteristically a slow period in the title industry, but in 1994 the residential refinancing and resale markets were very active and there was continued momentum in the commercial sector. However, refinancings virtually disappeared from the residential real estate market during the remainder of 1994 as a result of sharp increases in interest rates that began about February 1994. Interest rates continued to rise in early 1995, further depressing real estate markets. Home resales declined nationally from a peak of 417,000 in June 1994 to a low of 210,000 in January 1995. While CT&T responded quickly to bring costs into line with its reduced revenues, such action proved insufficient in the 1995 first quarter. Revenues declined by $106.6 million, from $364.9 million in the 1994 quarter to $258.3 million in the 1995 quarter, while CT&T's expenses declined by $71.4 million, from $341.7 million to $270.3 million. Since March 1994, CT&T has reduced its staff count by over 1,400 full-time equivalent employees or about 16%. Moreover, in 1995, CT&T postponed salary increases and most highly compensated employees have taken pay cuts of 5%-10%. CT&T is continuing its efforts to bring its costs into line with its reduced volume of title business. Title orders have increased substantially since February 1995, indicating improved activity in real estate markets. However, any renewed increases in interest rates could be expected to halt or depress such improvement. CT&T's Financial Services Group contributed pre-tax operating income to CT&T of about $2.8 million in the 1995 first quarter, an increase of about 33% over the 1994 first quarter contribution of $2.1 million, primarily as a result of the inclusion of results of Montag & Caldwell which was acquired by CT&T in July 1994. As of March 31, 1995, the Financial Services Group managed $7.7 billion in assets. Underwriters Reinsurance Company ("Underwriters") contributed pre-tax earnings of $6.6 million in the first quarter of 1995, compared with a pre-tax loss of $2.6 million in the first quarter of 1994. Net written premiums for the 1995 quarter were $72.0 million compared with $57.3 million in the prior year's quarter, reflecting increased business and a $9 million positive premium adjustment on an adjustable rate contract. 1995 results also include a pre-tax benefit from IBNR (incurred but not reported) reserve reductions of about $3.4 million, and a pre-tax loss on investments of about $2.3 million incurred in connection with Underwriters' investment portfolio restructuring. The first quarter of 1994 included a pre-tax charge of $5 million for estimated losses associated with the earthquake in Northridge, California in January of that year, and a pre-tax loss on investments of about $3.2 million. World Minerals contributed pre-tax earnings of $5.1 million in the first quarter of 1995 on revenues of $41.8 million, compared with $3.1 million on revenues of $36.2 million in the first quarter of 1994. The improved results reflect strong economic activity in markets served by World Minerals and also the benefits of price increases, strategic acquisitions and capital spending and ongoing management attention to improving production efficiency, customer service and cost reduction. World Minerals achieved these results notwithstanding the adverse effects of unusually heavy rains at its Lompoc, California plant. As of March 31, 1995, the Company beneficially owned approximately 18.1 million shares, or 11.8%, of the outstanding common stock of Sante Fe Pacific Corporation which had an aggregate market value on that date of approximately $413 million, or $22.875 per share. The aggregate cost of such shares is approximately $251 million, or $13.92 per share. The Company's results in the first quarter of 1995 are not necessarily indicative of operating results in future periods. The Company and its subsidiaries have adequate internally generated funds, cash revenues and unused credit facilities to provide for the currently foreseeable needs of its and their businesses. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. ------------------ In April 1990, a class action seeking treble damages was filed in the United States District Court for the District of Arizona against six of the nation's largest title insurance companies, including the three principal title insurance companies now owned by CT&T, alleging that the title insurers violated Section 1 of the Sherman Act in connection with their participation in rating bureaus in Arizona and Wisconsin. In June 1994, counsel for the plaintiffs and the defendants filed with the District Court in Arizona a definitive written agreement embodying terms for a proposed class action settlement of the asserted claims, which would become effective upon final approval of the Court. On April 21, 1994, a separate class action suit seeking treble damages was filed in the United States District Court for the Eastern District of Wisconsin, asserting federal antitrust claims against the same six defendants and a number of additional title insurers arising from Wisconsin rating bureau activity. On October 11, 1994, the Wisconsin suit was transferred to and consolidated with the suit in the United States District Court in Arizona. The status of such proceedings was last reported in Item 3 of Part I of the Company's 1994 Form 10-K Report. As previously reported, issues have arisen between the parties to the settlement agreement since it was jointly presented to the District Court in Arizona. The Court has yet to act upon the settlement agreement, and on March 28, 1995, the Court deferred further action to allow the parties to reach agreement on a global settlement of the foregoing actions. The Court has scheduled a status conference for May 18, 1995. Negotiations among the parties are continuing. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. -------------------------------- (a) Exhibits. -------- Exhibit Number Description ------- ----------- 3.1 By-Laws of Alleghany as amended April 18, 1995. 10.1 Letter amendment dated April 6, 1995 to the Stock Purchase Related Agreement dated as of July 28, 1993, as supplemented and amended, among certain persons named therein and Alleghany. 27 Financial Data Schedule. (b) Reports on Form 8-K. ------------------- No reports on Form 8-K were filed during the first quarter of 1995. 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: May 11, 1995 /s/ David B. Cuming -------------------------- David B. Cuming Senior Vice President (and principal financial officer) Exhibit Index ------------- Exhibit Number Description ------- ----------- 3.1 By-Laws of Alleghany as amended April 18, 1995. 10.1 Letter amendment dated April 6, 1995 to the Stock Purchase Related Agreement dated as of July 28, 1993, as supplemented and amended, among certain persons named therein and Alleghany. 27 Financial Data Schedule EX-3.1 2 Exhibit 3.1 ----------- ============================================================= BY-LAWS OF ALLEGHANY CORPORATION ------------ DELAWARE ============================================================= ARTICLE I. STOCKHOLDERS SECTION 1. ANNUAL MEETING The annual meeting of stockholders for the election of directors and for the transaction of any other business that may properly come before the meeting shall be held at such hour and at such place or places within or without the State of Delaware as may from time to time be determined by the Board of Directors, on the fourth Friday of April in each year or such other date as may be set by the Board of Directors not more than 15 days before, nor 15 days after, the fourth Friday of April. SECTION 2. SPECIAL MEETINGS At any time in the interval between regular meetings, special meetings of stockholders may be called by the Chairman, or by a majority of the Board of Directors, to be held at such times and at such places within or without the State of Delaware as may be specified in the notices of such meetings. The notice of any special meeting shall state the purpose of the meeting and specify the action to be taken at said meeting and no business shall be transacted thereat except that specifically named in the notice. SECTION 3. NOTICE OF MEETING Notice of the time and place of every meeting of stockholders shall be delivered personally or mailed at least ten days and not more than sixty days prior thereto to each stockholder of record entitled to vote at his address as it appears on the records of the Corporation. Such further notice shall be given as may be required by law. Business transacted at any special meeting shall be confined to the purpose or purposes stated in the notice of such special meeting. Meetings may be held without notice if all stockholders entitled to vote are present or if notice is waived by those not present. SECTION 4. VOTING At all meetings of stockholders any stockholder entitled to vote may vote in person or by proxy. Such proxy or any revocation or amendment thereof, shall be in writing, but need not be sealed, witnessed or acknowledged, and shall be filed with the Secretary at or before the meeting. The Corporation may require that such proxy indicate whether such stock is beneficially owned by a Substantial Stockholder, as defined in Article NINTH of the Certificate of Incorporation. SECTION 5. QUORUM Unless otherwise required by statute or the Restated Certificate of Incorporation of the Corporation (the "Certificate of Incorporation"), at any annual or special meeting of stockholders the presence in person or by proxy of stockholders entitled to cast a majority of all the votes entitled to be cast at the meeting (after giving effect to the provisions of Article NINTH of the Certificate of Incorporation) shall constitute a quorum, but if at any meeting of the stockholders there be less than a quorum present, the stockholders present at such meeting may, without further notice, adjourn, the same from time to time until a quorum shall attend, but no business shall be transacted at any such adjournment except such as might have been lawfully transacted had the meeting not been adjourned. SECTION 6. ACTION AT MEETINGS Except as otherwise required by law, the Certificate of Incorporation or these By-Laws, a majority of the votes (after giving effect to the provisions of Article NINTH of the Certificate of Incorporation) cast at a meeting at which a quorum is present shall be sufficient to take or authorize action upon any matter which may properly come before the meeting, and the stockholders shall not be entitled to cumulate their votes upon the election of directors, or upon any other matter. Any action required or permitted to be taken by the -1- stockholders must be effected at an annual or special meeting of stockholders and may not be effected by any consent in writing by such stockholders. SECTION 7. PROCEDURE AT MEETINGS The Board of Directors may appoint two or more persons to serve as inspectors of election at any meeting of stockholders. In the absence of such appointment, the Chairman of the Meeting may make such appointment. The inspectors of election shall receive, examine and tabulate all ballots, and proxies, including proxies filed with the Secretary, shall determine the presence or absence of a quorum and shall report to the officer of the Corporation or other person presiding over the meeting the result of all voting taken at the meeting by ballot. The order of business and all other matters of procedure at every meeting of the stockholders may be determined by the officer of the Corporation or other person presiding over the meeting. SECTION 8. BUSINESS OF THE MEETING At any annual meeting of stockholders, only such business shall be conducted as shall have been brought before the meeting (i) by or at the direction of the Board of Directors or (ii) by any stockholder who is entitled to vote with respect thereto and who complies with the notice procedures set forth in this Section 8. For business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder's notice must be delivered or mailed to and received at the principal executive offices of the Corporation not less than 30 days prior to the date of the annual meeting; provided, however, that in the event that less than 40 days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be received not later than the close of business on the 10th day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure was made. A stockholder's notice to the Secretary shall set forth as to each matter such stockholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting; (ii) the name and address, as they appear on the Corporation's books, of the stockholder proposing such business, (iii) the class and number of shares of the Corporation's capital stock that are beneficially owned by such stockholder and (iv) any material interest of such stockholder in such business. Notwithstanding anything in the By-Laws to the contrary, no business shall be brought before or conducted at the annual meeting except in accordance with the provisions of this Section 8. The officer of the Corporation or other person presiding over the annual meeting shall, if the facts so warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section 8 and, if he shall so determine, he shall so declare to the meeting and any such business so determined to be not properly brought before the meeting shall not be so transacted. At any special meeting of stockholders, only such business shall be conducted as shall have been brought before the meeting by or at the direction of the Board of Directors. SECTION 9. NOMINATION OF DIRECTOR Only persons who are nominated in accordance with the procedures set forth in these By-Laws shall be eligible for election as directors. Nominations of persons for election to the Board of Directors of the Corporation may be made at a meeting of stockholders at which directors are to be elected only (i) by or at the direction of the Board of Directors or (ii) by any stockholder of the Corporation entitled to vote for the election of directors at the meeting who complies with the notice procedures set forth in this Section 9. Such nominations, other than those made by or at the direction of the Board of Directors, shall be made by timely notice in writing to the Secretary of the Corporation. To be timely, a stockholder's notice shall be delivered or mailed to and received at the principal executive offices of the Corporation not less than 30 days prior to the date of the meeting, provided, however, that in the event that less than 40 days' notice or prior disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so -2- received not later than the close of business on the 10th day following the date on which such notice of the date of the meeting was mailed or such public disclosure was made. Such stockholder's notice shall set forth (i) as to each person whom such stockholder proposes to nominate for election as a director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected); and (ii) as to the stockholder giving the notice (x) the name and address, as they appear on the Corporation's books, of such stockholder and (y) the class and number of shares of the Corporation's capital stock that are beneficially owned by such stockholder. At the request of the Board of Directors any person nominated by the Board of Directors for election as a director shall furnish to the Secretary of the Corporation that information required to be set forth in a stockholder's notice of nomination which pertains to the nominee. No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the provisions of this Section 9. The officer of the Corporation or other person presiding at the meeting shall, if the facts so warrant, determine and declare to the meeting that a nomination was not made in accordance with such provisions and, if he shall so determine, he shall so declare to the meeting and the defective nomination shall be disregarded. SECTION 10. ADJOURNMENTS Any meeting of stockholders may be adjourned from time to time, whether or not a quorum is present, by the affirma- tive vote of a majority of the votes present and entitled to be cast at the meeting, or by the officer of the Corporation presiding over the meeting, or by the Board of Directors. ARTICLE II. DIRECTORS SECTION 1. NUMBER AND ELECTION Directors (other than such directors, if any, as are elected by holders of preferred stock of the Corporation voting as a separate class) shall be divided into three classes, which shall be as nearly equal in number as practicable. Unless changed by the Board of Directors pursuant hereto the number of directors shall be nine and each class shall consist of three directors. The number of directors and the number of which each class is to consist may be increased or decreased from time to time by a resolution adopted by the vote of in excess of three- quarters (75%) of the Whole Board (as defined in the Certificate of Incorporation); and provided that no decrease in the number of directors shall affect the tenure of office of any existing director. The term of office of the first class shall expire at the 1987 annual meeting of stockholders, the term of office of the second class shall expire at the 1988 annual meeting of stockholders and the term of office of the third class shall expire at the 1989 annual meeting of stockholders, with each director to hold office until his or her successor shall have been duly elected and qualified. At each annual meeting of stockholders, commencing with the 1987 annual meeting, directors elected to succeed those directors whose terms then expire shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election, with each director to hold office until his or her successor shall have been duly elected and qualified. SECTION 2. VACANCIES Subject to the rights of the holders of any series of Preferred Stock, and unless the Board of Directors otherwise determines, newly created directorships resulting from any increase in the authorized number of directors or any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office or other cause may be filled only by a majority vote of the directors then in office, though less than a quorum, and any director so chosen shall hold office for a termexpiring at the annual meeting of stockholders at which the term of office of the class to which such director has been elected expires and until such director's successor shall have been duly elected and qualified. -3- SECTION 3. REGULAR MEETINGS Regular meetings of the Board of Directors shall be held at such times and places as the Board of Directors may from time to time determine. SECTION 4. SPECIAL MEETINGS Special meetings of the Board of Directors may be called at any time, at any place and for any purpose by the Chairman of the Board or by any three directors. SECTION 5. NOTICE OF MEETING Notice of regular meetings of the Board of Directors need not be given. Notice of every special meeting of the Board of Directors shall be given to each director, by (a) deposit in the mail at least seventy-two hours before the meeting, or (b) telephone communication directly with such person, the dispatch of a telegraphic communication to his address, or actual delivery to his address, at least forty-eight hours before the meeting. If given to a director by mail, telegraph or actual delivery to his address, such notice shall be sent or delivered to his business or residential address as shown on the records of the Secretary or an Assistant Secretary of the Corporation, or to such other address as shall have been furnished to the Secretary or an Assistant Secretary of the Corporation by him for the purpose. Such notice need not include a statement of the business to be transacted at, or the purpose of, any such meeting. SECTION 6. QUORUM; ACTION AT MEETINGS A majority of the Board of Directors shall constitute a quorum for the transaction of business, but if, at any meeting of the Board, there be less than a quorum present, the members at the meeting may, without further notice, adjourn the same from time to time until a quorum shall attend. Except as herein or in the Certificate of Incorporation provided or as required by law, a majority of such quorum shall decide any questions that may come before the meeting. SECTION 7. PARTICIPATING IN MEETING BY CONFERENCE TELEPHONE Members of the Board of Directors, or any committee thereof, may participate in a meeting of such Board or committee by means of conference telephone or similar equipment by means of which all persons participating in the meeting can hear each other at the same time and such participation shall constitute presence in person at such meeting. SECTION 8. DIVIDENDS Anything in these By-Laws to the contrary notwithstand- ing, the declaration of dividends or other distributions on the capital stock of the Corporation, whether in cash or property (other than the dividend preference payable on any preferred stock of the Corporation outstanding from time to time), may be authorized only by vote of in excess of three- quarters (75%) of the directors present at a meeting duly called at which a quorum is present. ARTICLE III. COMMITTEES OF THE BOARD OF DIRECTORS SECTION 1. ELECTION The Board of Directors may appoint an Executive Committee and other committees composed of two or more of its members, and may appoint one of the members of each such committee to the office of chairman thereof. Members of the committees of the Board of Directors shall hold office for a term of one year and until their successors are appointed and qualify or until they shall cease to be directors. -4- SECTION 2. POWERS Subject to such limitations as may from time to time be established by resolution of the Board of Directors, the Executive Committee shall have any and may exercise all of the powers of the Board of Directors when the Board of Directors is not in session except that it shall have no power to (a) declare dividends, (b) issue stock of the Corporation, (c) recommend to the stockholders any action which requires stockholder approval, (d) alter, amend or repeal any resolution of the Board of Directors relating to the Executive Committee, or (e) take any other action which legally may be taken only by the Board of Directors. Other committees of the Board of Directors shall have such powers as shall be properly delegated to them by the Board of Directors. SECTION 3. VACANCIES If the office of any member of any committee becomes vacant by death, resignation, or otherwise, such vacancy may be filled from the members of the Board by the Board of Directors. SECTION 4. SUBSTITUTE MEMBERS In the event that a member of any committee is absent from a meeting of the committee, the members of the committee present at the meeting whether or not they constitute a quorum may appoint another director to act in place of the absent member. SECTION 5. MEETINGS AND NOTICE OF MEETINGS The Executive Committee shall meet from time to time on call of the Chairman of the Board, or on call of any three or more members of the Executive Committee, for the transaction of any business. Notice of every meeting of the Executive Committee shall be given to each member, by (a) deposit in the mail at least seventy-two hours before the meeting, or (b) telephonic communication directly with such person, the dispatch of a telegraphic communication to his address, or actual delivery to his address, at least forty-eight hours before the meeting. If given to a member by mail, telegraph or actual delivery to his address, such notice shall be sent or delivered to his business or residential address as shown on the records of the Secretary or an Assistant Secretary of the Corporation, or to such other address as shall have been furnished to the Secretary or an Assistant Secretary of the Corporation by him for this purpose. Such notice need not include a statement of the business to be transacted at, or the purpose of, any such meeting. All other committees of the Board of Directors shall meet at such times and upon such notice as they may determine. SECTION 6. QUORUM; ACTION AT MEETINGS At any meeting of any committee, however called, a majority of the members shall constitute a quorum for the transaction of business. A majority of such quorum shall decide any questions that may come before the meeting. ARTICLE IV. OFFICERS SECTION 1. ELECTION AND NUMBER The Board of Directors may appoint one of its number as Chairman of the Board. The Board of Directors shall appoint a President from among the directors, and a Secretary and a Treasurer, who need not be directors. The Board of Directors may also appoint one or more Senior Vice Presidents and/or Vice Presidents, who need not be directors. All officers of the Corporation shall hold office at the pleasure of the Board of Directors. Any two or more offices, except those of President and Vice President, may, at the -5- discretion of the Board of Directors, be held by the same person. The Board of Directors may from time to time appoint such other officers and agents with such powers and duties as the Board may prescribe. SECTION 2. CHAIRMAN OF THE BOARD The Chairman of the Board shall preside at all meetings of the Board of Directors and shall perform such other duties and exercise such other powers as may be assigned to him from time to time by the Board of Directors. SECTION 3. PRESIDENT The President shall be the chief executive officer and the chief operating officer of the Corporation. He shall preside at all meetings of stockholders and, in the absence of the Chairman of the Board, he shall preside at all meetings of the Board of Directors. Subject to the control of the Board of Directors, he shall have direct power and authority over the business and affairs of the Corporation. The President shall perform such other duties and exercise such other powers as may be assigned to him from time to time by the Board of Directors. SECTION 4. SENIOR VICE PRESIDENTS The Senior Vice President or Senior Vice Presidents shall perform the duties of the President in his absence or during his disability to act. In addition, the Senior Vice President or Senior Vice Presidents shall perform the duties and exercise the powers usually incident to their respective offices and/or such other duties and powers as may be properly assigned to them from time to time by the Board of Directors, the Chairman of the Board or the President. SECTION 5. VICE PRESIDENTS The Vice President or Vice Presidents shall perform the duties of the Senior Vice President or Senior Vice Presidents in his or their absence or disability to act. In addition, the Vice President or Vice Presidents shall perform the duties and exercise the powers usually incident to their respective offices and such other duties and powers as may be properly assigned to them from time to time by the Board of Directors, the Chairman of the Board, the President, or any Senior Vice President having supervisory authority over them. SECTION 6. SECRETARY The Secretary shall issue notices of meetings, keep the minutes of the Board of Directors and its committees, have charge of the corporate seal, and perform such other duties and exercise such other powers as are usually incident to such office or are properly assigned thereto by the Board of Directors, the Chairman of the Board, the President or any Senior Vice President or Vice President having supervisory authority over him. SECTION 7. TREASURER The Treasurer shall have charge of all monies and securities of the Corporation, other than monies and securities of any division of the Corporation which has a treasurer or financial officer appointed by the Board of Directors, and shall keep regular books of account. The funds of the Corporation shall be deposited in the name of the Corporation by the Treasurer with such banks or trust companies as the Board of Directors or the Executive Committee from time to time shall designate. He shall sign or countersign such instruments as require his signature, shall perform all such duties and have all such powers as are usually incident to such office or are properly assigned to him by the Board of Directors, the Chairman of the Board, the President or any Senior Vice President or Vice President having supervisory authority over him, and may be required to give bond for the faithful performance of his duties in such sum and with such surety as may be required by the Board of Directors. -6- SECTION 8. CONTROLLER The Controller shall be responsible for the accounting policies and practices of the Corporation, maintain its financial records, collect and consolidate the financial results of its subsidiaries and other operating units, prepare its financial reports, determine the amount and source of the funds required to meet its financial obligations, and perform such other duties and exercise such other powers as are usually incident to such office or are properly assigned thereto by the Board of Directors, the Chairman of the Board, the President or any Senior Vice President or Vice President having supervisory authority over him. SECTION 9. ASSISTANT SECRETARY; ASSISTANT TREASURER The Board of Directors may appoint one or more assistant secretaries and one or more assistant treasurers, or one appointee to both such positions, which officers shall have such powers and shall perform such duties as are provided in these By-Laws to the Secretary or Treasurer, as the case may be, or as are properly assigned thereto by the Board of Directors, the Chairman of the Board, the President, the Secretary or Treasurer as the case may be, or any other officer having supervisory authority over them. ARTICLE V. FISCAL YEAR The fiscal year of the Corporation shall end on the thirty-first day of December in each year, or on such other day as may be fixed from time to time by the Board of Directors. ARTICLE VI. Seal The Board of Directors shall provide a suitable seal, containing the name of the Corporation, which seal shall be in the charge of the Secretary or an Assistant Secretary. ARTICLE VII. STOCK SECTION 1. CERTIFICATES OF STOCK Certificates of stock shall be issued in such form as may be approved by the Board of Directors and shall be signed, manually or by facsimile, by the Chairman of the Board, President, a Senior Vice President or a Vice President, and by the Treasurer, Assistant Treasurer, Secretary or Assistant Secretary, and sealed with the seal of the Corporation or a facsimile thereof. SECTION 2. TRANSFERS The Board of Directors shall have power and authority to make all such rules and regulations as it may deem expedient concerning the issue, transfer and registration of certifi- cates of stock. The Board of Directors may appoint Transfer Agents and Registrars thereof. SECTION 3. RECORD DATE; CLOSING OF TRANSFER BOOKS The Board of Directors may fix a record date or direct that the stock transfer books be closed for a stated period for the purpose of making any proper determination with respect to stockholders, including which stockholders are entitled to notice of or to vote at a meeting or any adjourn- ment thereof, receive payment of any dividend or other distribution, or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock. The record date may not be more than sixty (60) nor less than ten (10) days before the date on which the action requiring the determination will be taken; the transfer books -7- may not be closed for a period longer than twenty (20) days; and, in the case of a meeting of stockholders, the closing of the transfer books shall be at least ten (10) days before the date of the meeting. SECTION 4. LOST CERTIFICATES The Board of Directors may determine the conditions upon which a new certificate of stock will be issued to replace a certificate which is alleged to have been lost, stolen, mutilated or destroyed, and the Board of Directors may delegate to any officer of the Corporation the power to make such determinations and to cause such replacement certifi- cates to be issued. SECTION 5. WARRANTS The foregoing provisions relative to certificates of stock shall also apply to allotment certificates or other certificates or warrants representing rights with respect to stock in the Corporation, which certificates or warrants may be issued from time to time by a vote of the Board of Directors in such form as they may approve. SECTION 6. STOCK LEDGER The Corporation shall maintain a stock ledger which contains the name and address of each stockholder and the number of shares of stock of each class which the stockholder holds. The stock ledger may be in written form or in any other form which can be converted within a reasonable time into written form for visual inspection. The original stock ledger shall be kept at the office of the Corporation's Transfer Agent. ARTICLE VIII. SIGNATURES SECTION 1. NEGOTIABLE INSTRUMENTS All checks, drafts, notes, or other obligations of the Corporation shall be signed (a) by any two officers of the Corporation of the rank of Chairman of the Board, President, Senior Vice President or Vice President, (b) by the Chairman of the Board, President, any Senior Vice President or any Vice President and by the Treasurer or Assistant Treasurer or Secretary or Assistant Secretary, or (c) as otherwise authorized by the Board of Directors or the Executive Committee; provided, however, that bonds, debentures or notes issued under a mortgage indenture or trust agreement with a bank or trust company as trustee and coupons attached or pertaining to any such bonds, debentures or notes may be executed manually or by facsimile. SECTION 2. STOCK TRANSFERS All endorsements, assignments, transfers, stock powers or other instruments of transfer of securities standing in the name of the Corporation shall be executed for and in the name of the Corporation (a) by any two officers of the Corporation of the rank of Chairman of the Board, President, Senior Vice President or Vice President, or (b) by the Chairman of the Board, President, any Senior Vice President or any Vice President, and by the Secretary or any Assistant Secretary, or (c) as otherwise authorized by the Board of Directors. ARTICLE IX. WAIVER OF NOTICE OF MEETINGS SECTION 1. STOCKHOLDERS Notice of the time, place and/or purpose of any meeting of stockholders shall not be required to be given to any stockholder who shall attend such meeting in person or by proxy; and if any stockholder shall, in a -8- writing filed with the records of the meeting, either before or after the holding thereof, waive notice of any stockholders' meeting, notice thereof need not be given to him. SECTION 2. DIRECTORS Notice of any meeting of the Board of Directors or of any committee thereof need not be given to any director if he shall attend such meeting in person, or shall in a writing filed with the records of the meeting, either before or after the holding thereof, waive such notice; and any meeting of the Board of Directors or of any committee thereof shall be a legal meeting without any notice thereof having been given if all such directors shall be present at such meeting. ARTICLE X. VOTING OF STOCK Unless otherwise ordered by the Board of Directors, the Chairman of the Board, the President, any Senior Vice President or any Vice President of this Corporation shall have full power and authority, on behalf of the Corporation, to attend, act and vote at any meeting of the stockholders of any corporation in which this Corporation may hold stock and at such meeting may exercise any or all rights and powers incident to the ownership of such stock and which as owner thereof the Corporation might exercise if present, and to execute on behalf of the Corporation a proxy or proxies empowering others to act as aforesaid. The Board of Directors by resolution from time to time may confer like powers upon any other person or persons. ARTICLE XI. CHECKS, NOTES, ETC. All checks on the Corporation's bank accounts and all drafts, bills of exchange and promissory notes, and all acceptances, obligations and other instruments for the payment of money, shall be signed by such person or persons as shall be authorized to do so from time to time by the Board of Directors or by the committee or officer or officers of the Corporation to whom the Board shall have delegated the power to authorize such signing; provided, however, that the signature of any person so authorized on checks and drafts drawn on the Corporation's dividend and special accounts may be in facsimile if the Board of Directors or such committee or officer or officers, whichever shall have authorized such person to sign such checks or drafts, shall have authorized such person to sign in facsimile, and provided further that in case notes or other instruments for the payment of money (other than notes, bonds or debentures issued under a trust instrument of the Corporation) are required to be signed by two persons, the signature thereon of only one of the persons signing any such note or other instrument may be in facsimile, and that in the case of notes, bonds or debentures issued under a trust instrument of the Corporation and required to be signed by two officers of the Corporation, the signatures of both such officers may be in facsimile if specifically authorized and directed by the Board of Directors of the Corporation and if such notes, bonds or debentures are required to be authenticated by a corporate trustee which is a party to the trust instrument and provided further that in case any person or persons who shall have signed any such note or other instrument, either manually or in facsimile, shall have ceased to be a person or persons so authorized to sign any such note or other instrument, whether because of death or by reason of any other fact or circumstance, before such note or other instrument shall have been delivered by the Corporation, such note or other instrument may, nevertheless, be adopted by the Corporation and be issued and delivered as though the person or persons who so signed such note or other instrument had not ceased to be such a person or persons. ARTICLE XII. OFFICES The Corporation may have offices outside the State of Delaware at such places as shall be determined from time to time by the Board of Directors. -9- ARTICLE XIII. AMENDMENTS Subject to the provisions of the Certificate of Incorporation, (1) these By-Laws may be amended, altered or repealed by the stockholders at any annual or special meeting by the affirmative vote of at least 75% of the voting power of the outstanding shares of Voting Stock (after giving effect to the provisions of Article NINTH of the Certificate of Incorporation) and (2) these By-Laws may be amended, altered or repealed by the Board of Directors by the affirma- tive vote of a majority of the Whole Board. [As amended April 18, 1995] -10- EX-10.1 3 Exhibit 10.1 ------------ Alleghany Corporation Park Avenue Plaza 55 East 52nd Street New York, New York 10055-0001 John J. Burns, Jr. President April 6, 1995 To the Stockholders who are parties to the Stock Purchase Related Agreement: Reference is made to the Stock Purchase Related Agreement, dated as of July 28, 1993, among the Stockholders (as defined therein) and Alleghany Corporation ("Alleghany"), as supplemented and amended (the "Stock Purchase Related Agreement"). Unless otherwise defined, all capitalized terms used herein have the meanings set forth in the Stock Purchase Related Agreement. As you are aware, net unrealized losses on investments as stated as a separate component of shareholders' equity of URC Holdings Corp. ("URHC") has reduced the book value of URHC common stock. Alleghany has determined that such net unrealized losses may have diminished the incentives provided to you under the Stock Purchase Related Agreement and, therefore, that it is appropriate to relieve you of the potential burden of unrealized losses in certain circumstances. Accordingly, Alleghany hereby agrees, effective on and after the date hereof, that for purposes of determining Adjusted Book Value under the Stock Purchase Related Agreement, the Tangible Book Value Per Share of Common Stock shall be increased in an amount equal to any reduction in fully diluted book value, as determined under the Stock Purchase Related Agreement by URHC's independent public accountants, attributable to net unrealized losses in fixed maturities. Thus, net unrealized losses in fixed maturities will not reduce Adjusted Book Value for purposes of (1) exchange of URHC shares for Alleghany common stock and cash (Section 5(d)), (2) payout of Reload Units (Section 4) and (3) repurchase of URHC shares in the case of termination of employment without cause or as a result of death or disability (proviso to Section 6(a)). Net unrealized losses in fixed maturities will continue to be reflected in determining fully diluted book value, as determined under the Stock Purchase Related Agreement by URHC's independent public accountants, which, among other provisions, is the basis on which shares of URHC are purchased in the event of voluntary termination of employment. If you have any questions about the change described above, please call Bob Hart at 212-752-1356. ALLEGHANY CORPORATION By: /s/ John J. Burns, Jr. ------------------------ John J. Burns, Jr. President and Chief Executive Officer EX-27 4 ARTICLE 7 FDS FOR 10-Q
7 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ALLEGHANY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET FOR THE QUARTER ENDING MARCH 31, 1995 AND THE CONSOLIDATED STATEMENT OF EARNINGS FOR THE 3 MONTHS THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-31-1995 JAN-01-1995 MAR-31-1995 1,450,368 0 0 544,226 0 0 1,994,594 169,215 428,090 0 3,696,066 1,501,379 0 0 0 379,070 0 0 0 1,111,087 3,696,066 312,725 45,355 (2,307) 41,279 68,929 0 0 (281) (1,074) 793 0 0 0 793 0.11 0.11 0 0 0 0 0 0 0
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