EX-10.12.B





Exhibit 10.12(b)



ALLEGHANY CORPORATION




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 shall be exercisable during his lifetime
only by him. The Option may be transferred, without consideration,
in whole or in part at any time following the first anniversary of
the grant date to the Director’s immediate family members (i.e.,
children, grandchildren or spouse) or a trust solely for the benefit
of, or a partnership or limited liability company in which the only
partners or members, as the case may be, are the Director and the
Director’s immediate family members. In all cases, the instrument
of transfer shall be approved by, and shall contain such conditions,
restrictions and agreements relating to any further transfer of the
Option or interests in the partnership or limited liability company,
if appropriate, as may be required by, the general counsel of
Alleghany.



5. Requirement of Continuing Service. The Option shall
not be exercisable unless the Director has been, at all times during
the period beginning with the date of grant of the Option and ending
on the date of such exercise, a non-employee director of Alleghany,
except that:



(A) if the Director shall cease to be such a non-employee director
for reasons other than death and such Option has not terminated or
expired and has not been fully exercised, the Director (his
permitted transferees or in the event of his death, his executors,
administrators, heirs or distributees, as the case may be), at any
time within one year of the date the Director ceased to be a non-



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employee director but not thereafter (and in no event after the
Option has expired under the provisions of Paragraph 3 hereof), may
exercise the Option with respect to any shares of Common Stock as to
which the Director could have exercised the Option at the time he
ceased to be such a non-employee director; provided that
notwithstanding the foregoing, if the Director shall cease to be
such a non-employee director after any Annual Meeting on or
following the date the Director attains age 72 and such Option has
not terminated or expired and has not been fully exercised, the
Director (his permitted transferees or in the event of his death,
his executors, administrators, heirs or distributees, as the case
may be), may exercise the Option with respect to any shares of
Common Stock as to which the Director could have exercised the
Option at the time he ceased to be such a non-employee director at
any time during the remaining term of the Option (but in no event
after the Option has expired); and



(B) if the Director shall die and the Option has not been fully
exercised, the person holding the Option may, at any time within one
year after the date of the death of the Director but not thereafter
(and in no event after the Option has expired under the provisions
of Paragraph 3 hereof), exercise the Option with respect to any
shares of Common Stock as to which the Director could have exercised
the Option at the time of his death (in the absence of any permitted
transfer of the Option).



6. No Rights as a Stockholder. The Director (and any
person succeeding to the Director’s rights pursuant to this
Agreement) shall have no rights as a stockholder with respect to any
shares of Alleghany Common Stock issuable pursuant to the Option
until the date of the issuance of a stock certificate for such
shares to the Director (or successor). Except as provided in the
Plan, no adjustment shall be made for dividends, distributions or
other rights (whether ordinary or extraordinary, and whether in
cash, securities or other property) for which the record date is
prior to the date such stock certificate is issued.



7. Legality of Issuance. Alleghany shall not be obligated
to issue any Option Shares pursuant to this Agreement unless
Alleghany’s counsel shall be satisfied that such issuance will be in
compliance with applicable federal, state and other securities laws.



8. Restrictive Legends on Stock Certificates. Stock
certificates evidencing Option Shares may bear such restrictive
legends as Alleghany’s counsel may deem necessary or advisable under applicable
law or pursuant to this Agreement.



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9. Plan. The Option is granted subject to all terms and
conditions of the Plan, which is incorporated herein by reference.
In the event of any inconsistency between the provisions of this
Agreement and the provisions of the Plan, the provisions of the Plan
shall govern.



10. Tax Advice. Alleghany makes no warranties or
representations with respect to the income tax consequences of the
transactions contemplated by this Agreement.



11. Acceptance of Terms. By acceptance of this Option, the
Director indicates his acceptance and ratification of, and his
consent to, the terms and conditions of this Agreement, the Plan and
any action taken under the Plan by Alleghany of the Board of
Directors of Alleghany.



     In Witness Whereof, the parties hereto have executed this Agreement as of the day and
year first above written.



	 	 	 	 	 
	 	ALLEGHANY CORPORATION

 	 
	 	By:  	_______________________
 	 
	 	 	 	 
	 	 	_______________________

Director 	 
	 




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