Exhibit 10.06(b)

ALLEGHANY CORPORATION

Performance Share Award Agreement

This award of Performance Shares (the “Award”) is made as of [—], by and between
Alleghany Corporation, a Delaware corporation (the “Corporation”), and [—] (the
“Participant”), pursuant to the Alleghany Corporation 2012 Long-Term Incentive
Plan (the “Plan”) and the following terms and conditions of this agreement (the
“Agreement”):

Section 1. Terms and Conditions; Definitions. This Award is subject to all of
the terms and conditions of the Plan. All capitalized terms not defined in this
Agreement shall have the meaning stated in the Plan. If there is any
inconsistency between the terms of this Agreement and the terms of the Plan, the
terms of the Plan shall control unless this Agreement expressly states that an
exception to the Plan is being made. Any interpretation, determination or
decision made or taken by the Committee regarding the Plan or this Agreement
shall be final and binding upon the Corporation and Participant. The Award,
including the Performance Shares and Dividend Equivalent Units credited and paid
hereunder, are intended to qualify as “performance-based compensation” for
purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended (the
“Code”).

Section 2. Performance Share Award. The Corporation hereby grants to
Participant, on the terms and conditions hereinafter set forth:

             Target Performance Shares.

The Target Performance Shares awarded to Participant shall be credited to a
separate bookkeeping account that the Corporation has established for
Participant under the Plan (the “Account”). Each Target Performance Share so
credited, and each Dividend Equivalent Unit, if any, credited to Participant’s
Account pursuant to Section 3 below (such Target Performance Shares and Dividend
Equivalent Units, collectively referred to herein as Participant’s “Credited
Performance Shares”), shall represent one notional share of Common Stock. All
amounts representing the Credited Performance Shares in Participant’s Account
shall continue for all purposes to be part of the general assets of the
Corporation and, with respect to Participant’s interest in the Account,
Participant shall be only a general, unsecured creditor of the Corporation.

Section 3. Dividend Equivalent Units. Unless and until payment is made with
respect to Participant’s Credited Performance Shares pursuant to Section 6
below, additional Performance Shares (a “Dividend Equivalent Unit”) will be
credited to Participant’s Account on each date on which the Corporation pays a
dividend on its Common Stock (a “Dividend Payment Date”). To the extent the
Corporation’s dividend is in the form of cash, the number of Dividend Equivalent
Units that will be credited to Participant’s Account will be determined by
dividing (A) the product of (i) the total number of Credited Performance Shares
in Participant’s Account immediately prior to the Dividend Payment Date, and
(ii) the per-share amount of the dividend paid on the Dividend Payment Date, by
(B) the closing price per share of the Corporation’s Common Stock on the
Dividend Payment Date. To the extent the Corporation’s dividend is in the form
of Common Stock, the number of Dividend Equivalent Units that will be credited
to Participant’s Account will be equal to the product of (A) the total number of
Credited Performance Shares in Participant’s Account immediately prior to the
Dividend Payment Date, and (B) the number of shares of Common Stock paid as a
dividend per share of Common Stock.

Section 4. Performance Goal.

 

(a) Subject to Section 5, the actual number of Performance Shares that
Participant shall be entitled to receive following the Performance Period may be
different from the number of Target Performance Shares, depending upon the
Corporation’s Adjusted Book Value Per Common Share, as follows:

 

Adjusted Book Value Per

Common Share

   Adjustment Multiple

less than 5%

   0% 5% but less than 7%    50% 7% but less than 9%    100% 9% or more    150%

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An Adjustment Multiple between percentages indicated in the table above will be
calculated using straight-line interpolation.

 

(b) If a minimum Adjusted Book Value Per Common Share of at least 5% is not
achieved by the last day of the Performance Period, Participant shall forfeit
all Credited Performance Shares without consideration. The maximum number of
Performance Shares that may be earned by Participant pursuant to this Award
shall be equal to 150% of the number of Credited Performance Shares in
Participant’s Account.

 

(c) The Committee will determine whether the Adjusted Book Value Per Common
Share has been met for the Performance Period and the total number of
Participant’s Target Performance Shares and Dividend Equivalent Units shall be
multiplied by the applicable Adjustment Multiple, and the result shall be the
final number of Performance Shares awarded under this Agreement (the “Actual
Performance Shares”). All calculations shall be rounded down to the nearest
whole Actual Performance Share; no payment shall be made in respect of
fractional Actual Performance Shares.

Section 5. Termination of Employment.

 

(a)

Subject to Section 5(b) of this Agreement, if Participant incurs a Termination
of Employment for any reason prior to the January 1st of the calendar year
following the end of the Performance Period, Participant shall forfeit, without
consideration, all rights to, or interests in, the Credited Performance Shares
in Participant’s Account.

 

(b)

Notwithstanding Section 5(a) of this Agreement, if, prior to the end of the
Performance Period, Participant incurs a Termination of Employment by action of
the Corporation without Cause (other than on account of Participant’s death or
Total Disability), Participant shall become vested in a number of Credited
Performance Shares equal to the product of (a) the Actual Performance Shares
determined based on the table in Section 4 and the achievement of Adjusted Book
Value Per Common Share as of the December 31st immediately preceding the date of
Participant’s Termination of Employment as if such December 31st was the last
day of the Performance Period and (b) a fraction the numerator of which is the
number of whole calendar years beginning as of the first day of the Performance
Period and ending on or before the date of Participant’s Termination of
Employment, and the denominator of which is four.

Section 6. Payment. Subject to Section 5 and the terms of the Plan,
Participant’s Actual Performance Shares will be paid to Participant in either
cash or whole shares of Common Stock, as elected by Participant in accordance
with the rules and procedures established by the Committee. No fractional shares
of Common Stock shall be issued. Payment shall be made to Participant upon the
earlier of (a) Participant’s Termination of Employment or (b) in the calendar
year following the last day of the Performance Period.

Section 7. Rights as a Stockholder. Subject to the otherwise applicable
provisions of the Plan and this Agreement, Participant shall have no rights of a
stockholder of shares of Common Stock in respect of the Credited Performance
Shares in Participant’s Account.

Section 8. Taxes.

 

(a) The Corporation shall have the right to deduct from any portion of the Award
hereunder paid in cash any federal, state, local or foreign taxes required by
law to be withheld with respect to such payments and, with respect to any
portion of the Award paid in Common Stock, to require the payment by Participant
(through withholding from Participant’s salary or otherwise) of any such taxes,
but the Committee may make such arrangements for the payment of such taxes as
the Committee in its discretion shall determine, including payment with shares
of Common Stock (including net payments of awards paid in Common Stock).

 

(b)

This Agreement is intended to comply with the requirements of Section 409A of
the Code and shall be administered in accordance with Section 409A of the Code.
In no event may Participant, directly or indirectly, designate the calendar year
of any payment to be made under this Agreement. Notwithstanding any other
provision to the contrary, in the event that Participant is a Specified Employee
as of his Termination of Employment, Participant’s Actual Performance Shares, if
any, will be settled and paid on the

 

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  first business day after the date that is six months following Participant’s
Termination of Employment; provided that, if Participant’s Termination of
Employment is on account of Participant’s death or Participant dies following
Participant’s Termination of Employment and prior to the payment of the Actual
Performance Shares, such Actual Performance Shares shall be paid to the personal
representative of Participant’s estate within thirty days after the date of
Participant’s death.

Section 9. Definitions. As used herein, each of the following terms shall have
the following respective meaning:

“Adjusted Book Value Per Common Share” means the average annual compound growth
in Book Value Per Common Share achieved by the Corporation during the
Performance Period, measured from a base equal to the Book Value Per Common
Share on December 31, 2012, as reported in the Corporation’s 2012 Annual Report
to Stockholders, provided that, Adjusted Book Value Per Common Share shall
exclude (i) the costs arising from the 2002 Long-Term Incentive Plan, 2007
Long-Term Incentive Plan, 2012 Long-Term Incentive Plan and any successor or new
incentive plan and (ii) all acquisition related costs incurred in any business
combination (as such terms are interpreted and applied under FAS 141(R).

“Book Value Per Common Share” means, as of the close of business on any date,
the stockholders’ equity, as publicly reported by the Corporation, divided by
the total number of outstanding shares of Common Stock and other equity of the
Corporation, as publicly reported by the Corporation. In the event of any
subdivision or combination of the outstanding shares of the Corporation’s Common
Stock, stock dividend, stock split, spin-off, split-off, recapitalization,
capital reorganization, liquidation, reclassification of shares of Common Stock,
merger or consolidation in which shares of Common Stock are converted or changed
into cash, securities or other property, cash or other distribution, stock
repurchases or redemptions at prices in excess of Book Value Per Common Share,
stock issuances or sales at prices less than Book Value Per Common Share, sale,
lease or transfer of substantially all the assets of the Corporation or other
event similar in type or effect to an event herein listed (a “Transaction”), the
Committee shall make such equitable adjustments as is appropriate in the base
from which growth in Book Value Per Common Share is to be measured, the Adjusted
Book Value Per Common Share growth requirements, the Book Value Per Common
Share, the length of the Performance Period, and the making of payment on
account thereof, so that the Credited Performance Shares payable to a
participant following the Transaction shall equal, as nearly as possible, the
Credited Performance Shares which would have been payable in the absence of such
Transaction.

“Cause” means Participant’s (a) conviction of a felony; (b) willful failure to
implement reasonable directives of a senior employee; or (c) gross misconduct in
connection with the performance of any of Participant’s duties.

“Performance Period” means the five year period commencing January 1, 2013 and
ending December 31, 2016.

“Specified Employee” means a “specified employee” within the meaning of
Section 409A of the Code, as determined in accordance with the methodology
established by the Company as in effect on the Termination of Employment.

“Termination of Employment” means Participant’s “separation from service” within
the meaning of Section 409A of the Code.

“Total Disability” means Participant’s inability to discharge his duties due to
a physical or mental illness or accident for one or more periods totaling six
months during any consecutive twelve-month period.

Section 10. Limits on Transferability. Neither the Award nor any rights or
interests herein shall be pledged, encumbered, or hypothecated to, or in favor
of, or be subject to any lien, obligation, or liability of Participant to, any
party, other than the Corporation or any subsidiary, nor shall the Award or any
rights or interests herein be assignable or transferable by Participant except
in the event of Participant’s death.

 

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Section 11. No Right of Employment. Nothing in this Agreement shall confer upon
Participant any right to continue as an employee of the Corporation or its
subsidiaries to interfere in any way with the right of the Corporation or its
subsidiaries to terminate Participant’s employment at any time.

Section 12. Entire Agreement. This Agreement contains the entire understanding
of the Corporation and Participant with respect to the subject matter hereof and
thereof and, except as specifically provided herein, cancel and supersede any
and all other agreements between the Corporation and Participant with respect to
the subject matter hereof. Any amendment or modification of this Agreement shall
not be binding unless in writing and signed by the Corporation and Participant.

Section 13. Governing Law. This Agreement shall be governed by and enforceable
in accordance with the laws of the State of New York, without giving effect to
the principles of conflict of laws thereof.

Section 14. Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, and each other provision of this Agreement shall be
severable and enforceable to the extent permitted by law.

Section 15. Bound by the Plan. By signing this Agreement, Participant
acknowledges that he has received a copy of the Plan and has had an opportunity
to review the Plan and agrees to be bound by all the terms and provisions of the
Plan.

Section 16. Headings. The headings of the Sections hereof are provided for
convenience only and are not to serve as a basis for interpretation or
construction and shall not constitute a part of this Agreement.

Section 17. Signature in Counterparts. This Agreement may be signed in
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.

 

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IN WITNESS WHEREOF, Participant has duly executed this Agreement and the
Corporation has duly caused this Agreement to be executed in its name and on its
behalf, all as of [—].

 

ALLEGHANY CORPORATION By:  

 

    PARTICIPANT

 

 

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