Document:

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                                                                    Exhibit 10.3

                              ALLEGHANY CORPORATION

                 Restricted Stock Unit Matching Grant Agreement

            Restricted Stock Unit Matching Grant Agreement ("Agreement"), dated
as of October 7, 2002, between Alleghany Corporation, a Delaware corporation
("Alleghany"), and Weston M. Hicks (the "Participant").

            Section 1. Restricted Stock Matching Grant. Alleghany hereby grants
to the Participant, on the terms and conditions hereinafter set forth and
subject thereto, a restricted stock unit matching grant of two restricted stock
units (each a "Restricted Stock Unit") for every share of common stock, par
value $1.00 per share (the "Common Stock"), of Alleghany purchased by the
Participant on or before September 30, 2003 (each an "Owned Share"), up to a
maximum of 30,000 Restricted Stock Units (subject to increase to reflect any
stock dividend paid in 2003) in respect of up to a maximum of 15,000 Owned
Shares. This grant has been made by the Compensation Committee of the Board of
Directors of Alleghany (the "Committee") pursuant to the terms of the Alleghany
Corporation 2002 Long-Term Incentive Plan (the "Plan"). The applicable terms of
the Plan are incorporated herein by reference. Any terms used but not defined
herein shall have the meanings ascribed thereto in the Plan. Any ambiguity
between any term used in this Agreement and a term used in the Plan shall be
resolved in favor of and in accordance with the term used in the Plan. Any
interpretation, determination or decision made or taken by the Committee
regarding the Plan or this Agreement shall be final and binding upon Alleghany
and the Participant.

            Section 2. Restricted Stock Units. The Restricted Stock Units are
notional units of measurement denominated in shares of Common Stock and, subject
to the terms and conditions of this Agreement and the Plan, entitle the
Participant to payment on account of such Restricted Stock Units in an amount
equal to the Fair Market Value on the payment date of a number of shares of
Common Stock equal to the number of Restricted Stock Units to which the
Participant is entitled to payment. Alleghany shall establish on its books a
Restricted Stock Unit Account for the Participant and shall credit two
Restricted Stock Units to such Restricted Stock Unit Account for each Owned
Share, upon submission to Alleghany of appropriate evidence thereof. The
Restricted Stock Account shall be debited in respect of any disposition of Owned
Shares as provided in Section 3 hereof. The Restricted Stock Unit Account shall
reflect the investment experience which the account would have had if such
account held whole or fractional shares of Common Stock equal to the number of
credited Restricted Stock Units. The Restricted Stock Unit Account shall be
adjusted as appropriate to reflect cash and stock dividends, stock splits, and
other similar distributions which may, from time to time, occur with respect to
Common Stock during the relevant period. Dividends and other distributions shall
be automatically credited to the Restricted Stock Account at their cash value or
the fair market value of any non-cash dividend or other distribution and shall
be deemed to purchase Restricted Stock Units at a price equal to the Fair Market
Value of Common Stock on the date of payment thereof.
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            Section 3. Owned Shares. It is a condition to payment in respect of
the Restricted Stock Units that the Participant shall have maintained
unencumbered beneficial ownership of the Owned Shares in respect of which such
Restricted Stock Units were credited, and any stock dividends or stock splits
paid in respect thereof, continuously throughout the period commencing with the
initial purchase of Owned Shares and ending October 7, 2012, or the earlier date
of payment in respect of a pro rata payout as provided in Section 4(b) hereof
(the "Ownership Period"), and that the Participant shall not (i) have sold,
assigned, transferred, pledged, or hypothecated the Owned Shares, including any
stock dividends paid in respect thereof, or (ii) have engaged in any short sale
or other transaction that would have the effect of decreasing his economic risk
with regard to the Owned Shares, including any stock dividends paid in respect
thereof, at any time during the Ownership Period (any such action in subsection
(i) or (ii) being hereinafter referred to as a "disposition"). In the event of a
disposition of any of the Owned Shares, or related stock dividend shares, during
the Ownership Period, the Participant's Restricted Stock Unit Account shall be
debited in an amount equal to two Restricted Stock Units for each Owned Share so
disposed (the "Disposed Owned Share"), together with the investment experience
and dividends and distributions theretofore credited from the date of purchase
of the Disposed Owned Share. The Participant shall provide such evidence and
certification of continued satisfaction of such continuous ownership requirement
(including certification that he has not effected a disposition of any Owned
Shares) from time to time as requested by Alleghany. Evidence of continued
satisfaction of the continuous ownership requirement requested by Alleghany may
include certification of ownership by a brokerage or other financial
institution. Notwithstanding the requirements set forth in this Section 3, the
Owned Shares, and related stock dividend shares, shall at all times throughout
the Ownership Period remain the property of the Participant and be subject to
his exclusive control and, with respect thereto, Participant shall have all
rights of a stockholder of Alleghany.

            Section 4. Vesting of Restricted Stock Units. The Restricted Stock
Units shall vest and become nonforfeitable and be paid, as follows:

            (a)   All of the Restricted Stock Units included in the Restricted
                  Stock Unit Account on October 7, 2012 shall vest and become
                  nonforfeitable on such date, and all Restricted Stock Units
                  thereafter credited to the Restricted Stock Unit Account
                  pursuant to Section 2 hereof shall be fully vested and
                  nonforfeitable as and when credited thereto; all Restricted
                  Stock Units included in the Restricted Stock Unit Account on
                  the date of the filing of Alleghany's Annual Report on Form
                  10-K in respect of the year in which Participant's employment
                  is terminated for any reason shall be paid to Participant on
                  such date.

            (b)   In the event of the termination of the Participant's
                  employment, in any case prior to October 7, 2012, by Alleghany
                  without Cause or in the case of termination of employment by
                  reason of Participant's death or Total Disability, in any case
                  prior to October 7, 2012, a pro rata portion of the Restricted
                  Stock Units included in the Restricted Stock Unit Account on
                  the date of such termination shall vest and become
                  nonforfeitable on the basis of 10% of such Account for each
                  full year of employment with Alleghany

                                      -2-
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                  measured from the date hereof and will be paid to the
                  Participant upon the filing of Alleghany's Annual Report on
                  Form 10-K in respect of the year in which such employment was
                  terminated, and the balance of the Restricted Stock Units
                  included in such Account shall be forfeited and the
                  Participant shall be entitled to no payments in respect
                  thereof.

            (c)   If the Participant voluntarily terminates his employment with
                  Alleghany prior to October 7, 2012, or if Alleghany terminates
                  the Participant's employment for Cause prior to October 7,
                  2012, all of the Restricted Stock Units included in
                  Participant's Restricted Stock Unit Account shall be forfeited
                  and the Participant shall be entitled to no payments in
                  respect thereof.

            (d)   "Cause" shall mean conviction of a felony; willful failure to
                  implement reasonable directives of the President, Chairman or
                  the Board of Directors of Alleghany after written notice,
                  which failure is not corrected within ten days following
                  notice thereof; or gross misconduct in connection with the
                  performance of any of Participant's duties; and "Total
                  Disability" shall mean Participant's inability to discharge
                  his duties due to physical or mental illness or accident for
                  one or more periods totaling six months during any consecutive
                  twelve-month period.

            Section 5. Payment; Tax Withholding. Payment in respect of
Restricted Stock Units which have vested and become nonforfeitable pursuant
hereto shall be made in such combination of cash and shares of Common Stock
(valued at Fair Market Value on the payment date) or all in cash or all in
Common Stock, as the Committee may determine. Shares of Common Stock delivered
on payment of Restricted Stock Units may be treasury shares, authorized but
unissued shares, or both. Payments in respect of, or upon the vesting of,
Restricted Stock Units shall be subject to applicable tax withholding as
provided in the Plan.

            Section 6. Restrictions on Transfer; Beneficiaries. Neither this
Agreement nor any Restricted Stock Units covered hereby may be sold, assigned,
transferred, encumbered, hypothecated or pledged by the Participant. The
Participant shall be entitled to select (and change) a beneficiary or
beneficiaries to receive any payment in respect of Restricted Stock Units which
have vested and become non-forfeitable pursuant hereto following the
Participant's death by giving Alleghany written notice thereof. In the event of
the Participant's death, all references in the Agreement to the Participant
shall be deemed, where appropriate, to refer to his beneficiary or estate. Any
shares of Common Stock received by the Participant in payment of Restricted
Stock Units may only be disposed of in compliance with all applicable securities
laws.

            Section 7. Treatment of Restricted Stock Units; No Rights as a
Stockholder. Until paid, the amounts credited to the Restricted Stock Unit
Account shall be a part of the general assets of Alleghany, and the
Participant's right to receive payment in respect thereof shall be no greater
than the right of any other unsecured general creditor. The Restricted Stock
Units, whether or not vested, will not confer upon the Participant any voting or
other rights of a stockholder.

                                      -3-
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            Section 8. No Right of Employment. Nothing in this Agreement shall
confer upon the Participant any right to continue as an employee of Alleghany or
to interfere in any way with the right of Alleghany to terminate the
Participant's employment at any time.

            Section 9. Entire Agreement. This Agreement, the letter agreement
dated October 7, 2002 and the Restricted Stock Award Agreement dated as of
October 7, 2002 contain the entire understanding of Alleghany and the
Participant with respect to the subject matter hereof and thereof and, except as
specifically provided herein or therein, cancel and supersede any and all other
agreements between Alleghany and the Participant with respect to the subject
matter hereof and thereof. Any amendment or modification of this Agreement shall
not be binding unless in writing and signed by Alleghany and the Participant.

            Section 10. 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.

            IN WITNESS WHEREOF, the Participant has duly executed this Agreement
and Alleghany has duly caused this Agreement to be executed in its name and on
its behalf, all as of October 7, 2002.

                                    ALLEGHANY CORPORATION

                                    By: /s/ John J. Burns, Jr.
                                    ------------------------------
                                            John J. Burns, Jr.
                                            President

                                    PARTICIPANT

                                    /s/ Weston M. Hicks
                                    ------------------------------
                                    Weston M. Hicks

                                      -4-EXHIBIT 10.1 / ANNUAL INCENTIVE PLAN

 

EXHIBIT 10.1

POLO RALPH LAUREN CORPORATION

 EXECUTIVE OFFICER ANNUAL INCENTIVE
PLAN

(As Amended as of August 15,
2002)

1.     Purpose

     
The purposes of the Plan are to promote the
success of the Company; to provide designated Executive Officers
with an opportunity to receive incentive compensation dependent
upon that success; to attract, retain and motivate such
individuals; and to provide Awards that are “qualified
performance-based compensation” under Section 162(m)
of the Code.

2.     Definitions

     
“Award” means an incentive award made
pursuant to the Plan.

     
“Award Formula” means one or more
objective formulas or standards established by the Committee for
purposes of determining an Award based on the level of
performance with respect to one or more Performance Goals. Award
Formulas may vary from Performance Period to Performance Period
and from Participant to Participant and may be established on a
stand-alone basis, in tandem or in the alternative.

     
“Award Schedule” means the Award
Schedule established pursuant to Section 4.1.

     
“Beneficiary” mean the person(s)
designated by the Participant, in writing on a form provided by
the Committee, to receive payments under the Plan in the event
of his death while a Participant or, in the absence of such
designation, the Participant’s estate.

     
“Board of Directors” means the Board of
Directors of the Company.

     
“Code” means the Internal Revenue Code
of 1986, as amended.

     
“Committee” means a committee or
subcommittee of the Board of Directors designated by the Board
of Directors to administer the Plan and composed of not less
than two directors, each of whom is intended to be an
“outside director” (within the meaning of Code
Section 162(m)).

     
“Company” means Polo Ralph Lauren
Corporation and its successors.

     
“Covered Employee” means a covered
employee within the meaning of Code Section 162(m)(3).

     
“Determination Period” means, with
respect to a Performance Period applicable to any Award under
the Plan, the period commencing with the first day of such
Performance Period and ending on the earlier to occur of
(i) 90 days after the commencement of the Performance
Period and (ii) the date upon which twenty-five percent
(25%) of the Performance Period shall have elapsed.

     
“Executive Officer” means a person who
is an executive officer of the Company for purposes of the
Securities Exchange Act of 1934, as amended.

     
“Participant” means an Executive
Officer selected from time to time by the Committee to
participate in the Plan.

     
“Performance Goal” means the level of
performance established by the Committee as the Performance Goal
with respect to a Performance Measure. Performance Goals may
vary from Performance Period to Performance Period and from
Participant to Participant and may be established on a
stand-alone basis, in tandem or in the alternative.

     
“Performance Measure” means one or more
of the following selected by the Committee to measure Company
and/or business unit performance for a Performance Period: basic
or diluted earnings per share, net revenues, gross profit,
income before income taxes, income before income taxes less a
charge for capital, return on capital, return on equity, return
on investment, operating expenses as a percentage of net
revenues,

 

selling, general and administrative expenses as a
percentage of net revenues, working capital ratios, inventory
turn rate and inventory shrinkage control; each as determined in
accordance with generally accepted accounting principles as
consistently applied by the Company and, if so determined by the
Committee prior to the expiration of the Determination Period,
adjusted, to the extent permitted under Section 162(m) of
the Code, to omit the effects of extraordinary items, gain or
loss on the disposal of a business segment, unusual or
infrequently occurring events and transactions and cumulative
effects of changes in accounting principles. Performance
Measures may vary from Performance Period to Performance Period
and from Participant to Participant and may be established on a
stand-alone basis, in tandem or in the alternative.

     
“Performance Period” means one or more
periods of time, as the Committee may designate, over which the
attainment of one or more Performance Goals will be measured for
the purpose of determining a Participant’s right to payment
in respect of an Award.

     
“Plan” means the Polo Ralph Lauren
Corporation Executive Officer Annual Incentive Plan.

     
“Plan Year” means the Company’s
fiscal year.

3.     Participation

     
3.1 Participants shall be selected by the
Committee from among the Executive Officers. The selection
of an Executive Officer as a Participant for a Performance
Period shall not entitle such individual to be selected as a
Participant with respect to any other Performance Period.

4.     Awards

     
4.1 Award Schedules. With respect to
each Performance Period with respect to which an Award may be
earned by a Participant under the Plan, prior to the expiration
of the Determination Period the Committee shall establish in
writing for such Performance Period an Award Schedule for each
Participant. The Award Schedule shall set forth the applicable
Performance Period, Performance Measure(s), Performance Goal(s),
and Award Formula(s) and such other information as the Committee
may determine. Once established for a Plan Year, such items
shall not be amended or otherwise modified to the extent such
amendment or modification would cause the compensation payable
pursuant to the Award to fail to constitute qualified
performance based compensation under Code Section 162(m).
Award Schedules may vary from Performance Period to Performance
Period and from Participant to Participant.

     
4.2 Determination of Awards. A
Participant shall be eligible to receive payment in respect of
an Award only to the extent that the Performance Goal(s) for
such Award are achieved and the Award Formula as applied against
such Performance Goal(s) determines that all of some portion of
such Participant’s Award has been earned for the
Performance Period. As soon as practicable after the close of
each Performance Period, the Committee shall meet to review and
certify in writing whether, and to what extent, the Performance
Goals for the Performance Period have been achieved and, if so,
to calculate and certify in writing that amount of the Award
earned by each Participant for such Performance Period based
upon such Participant’s Award Formula. The Committee shall
then determine the actual amount of the Award to be paid to each
Participant and, in so doing, may use negative discretion to
decrease, but not increase, the amount of the Award otherwise
payable to the Participant based upon such performance. Anything
in this Plan to the contrary notwithstanding, the maximum Award
payable to any Participant with respect to each Plan Year (or
portion thereof) contained within a Performance Period shall be
$10,000,000.

     
4.3 Payment of Awards. Awards shall
be paid in a lump sum cash payment as soon as practicable after
the amount thereof has been determined and certified in
accordance with Section 4.2. The Committee may, subject to
such terms and conditions and within such limits as it may from
time to time establish, permit one or more Participants to defer
the receipt of amounts due under the Plan in a manner consistent
with the requirements of Code Section 162(m) so that any
increase in the amount of an Award that is deferred shall be
based either on a reasonable rate of interest or the performance
of a predetermined investment in accordance with Treasury
Regulation 1.162-27(e)(2)(iii)(B). If any Award which is
earned pursuant to this Section 4 is paid prior to the time
determined when the Award was initially granted, the amount of
such Award shall be reduced by an appropriate discount factor
determined by the Committee.

 

5.     Termination of
Employment

     
5.1 Termination of Employment Prior to
the Last Day of the Performance Period. Except as otherwise
determined by the Committee, no Award with respect to a
Performance Period will be payable to any Participant who is not
an employee of the Company on the last day of such Performance
Period.

6.     Administration

     
6.1 In General. The Committee shall
have full and complete authority, in its sole and absolute
discretion, (i) to exercise all of the powers granted to it
under the Plan, (ii) to construe, interpret and implement
the Plan and any related document, (iii) to prescribe,
amend and rescind rules relating to the Plan, (iv) to make
all determinations necessary or advisable in administering the
Plan, and (v) to correct any defect, supply any omission
and reconcile any inconsistency in the Plan.

     
6.2 Determinations. The actions and
determinations of the Committee or others to whom authority is
delegated under the Plan on all matters relating to the Plan and
any Awards shall be final and conclusive. Such determinations
need not be uniform and may be made selectively among persons
who receive, or are eligible to receive, Awards under the Plan,
whether or not such persons are similarly situated.

     
6.3 Appointment of Experts. The
Committee may appoint such accountants, counsel, and other
experts as it deems necessary or desirable in connection with
the administration of the Plan.

     
6.4 Delegation. The Committee may
delegate to others the authority to execute and deliver such
instruments and documents, to do all such acts and things, and
to take all such other steps deemed necessary, advisable or
convenient for the effective administration of the Plan in
accordance with its terms and purposes, except that the
Committee shall not delegate any authority with respect to
decisions regarding Plan eligibility or the amount, timing or
other material terms of Awards.

     
6.5 Books and Records. The Committee
and others to whom the Committee has delegated such duties shall
keep a record of all their proceedings and actions and shall
maintain all such books of account, records and other data as
shall be necessary for the proper administration of the Plan.

     
6.6 Payment of Expenses. The Company
shall pay all reasonable expenses of administering the Plan,
including, but not limited to, the payment of professional and
expert fees.

     
6.7 Code Section 162(m). It is
the intent of the Company that this Plan and Awards satisfy the
applicable requirements of Code Section 162(m) so that the
Company’s tax deduction for remuneration in respect of this
Plan for services performed by Participants who are or may be
Covered Employees is not disallowed in whole or in part by the
operation of such Code Section. If any provision of this Plan or
if any Award would otherwise frustrate or conflict with such
intent, that provision to the extent possible shall be
interpreted and deemed amended so as to avoid such conflict,
and, to the extent of any remaining irreconcilable conflict with
such intent, that provision shall be deemed void as applicable
to such Covered Employees.

7.     Miscellaneous

     
7.1 Nonassignability. No Award shall
be assignable or transferable (including pursuant to a pledge or
security interest) other than by will or by laws of descent and
distribution.

     
7.2 Withholding Taxes. Whenever
payments under the Plan are to be made or deferred, the Company
will withhold therefrom, or from any other amounts payable to or
in respect of the Participant, an amount sufficient to satisfy
any applicable governmental withholding tax requirements related
thereto.

     
7.3 Amendment or Termination of the
Plan. The Plan may be amended or terminated by the Board of
Directors in any respect except that (i) no amendment may
be made after the date on which an Executive Officer is selected
as a Participant for a Performance Period that would adversely
affect the rights of such Participant with respect to such
Performance Period without the consent of the affected
Participant and (ii) no amendment shall be effective
without the approval of the stockholders of the Company to
increase the maximum Award payable under the Plan or if, in the
opinion of counsel to the Company, such approval is necessary to
satisfy the intent set forth in Section 6.7.

 

     
7.4 Other Payments or Awards. Nothing
contained in the Plan will be deemed in any way to limit or
restrict the Company from making any award or payment to any
person under any other plan, arrangement or understanding,
whether now existing or hereafter in effect.

     
7.5 Payments to Other Persons. If
payments are legally required to be made to any person other
than the person to whom any amount is payable under the Plan,
such payments will be made accordingly. Any such payment will be
a complete discharge of the liability of the Company under the
Plan.

     
7.6 Unfunded Plan. Nothing in this
Plan will require the Company to purchase assets or place assets
in a trust or other entity to which contributions are made or
otherwise to segregate any assets for the purpose of satisfying
any obligations under the Plan. Participants will have no rights
under the Plan other than as unsecured general creditors of the
Company.

     
7.7 Limits of Liability. Neither the
Company nor any other person participating in any determination
of any question under the Plan, or in the interpretation,
administration or application of the Plan, will have any
liability to any party for any action taken or not taken in good
faith under the Plan.

     
7.8 No Right of Employment. Nothing
in this Plan will be construed as creating any contract of
employment or conferring upon any Participant any right to
continue in the employ or other service of the Company or limit
in any way the right of the Company to change such person’s
compensation or other benefits or to terminate the employment or
other service of such person with or without Cause.

     
7.9 Section Headings. The
section headings contained herein are for convenience only, and
in the event of any conflict, the text of the Plan, rather than
the section headings, will control.

     
7.10 Invalidity. If any term or
provision contained herein is to any extent invalid or
unenforceable, such term or provision will be reformed so that
it is valid, and such invalidity or unenforceability will not
affect any other provision or part hereof.

     
7.11 Applicable Law. The Plan will be
governed by the laws of the State of New York, as determined
without regard to the conflict of law principles thereof.

     
7.12 Effective Date/Term. The Plan as
initially adopted became effective upon shareholder approval on
August 19, 1999 for the 2000 Plan Year. Upon the approval
by the shareholders of the Company at the 2002 annual meeting of
stockholders, in a manner consistent with the shareholder
approval requirements of Code Section 162(m), of the
amendments to the Plan adopted by the Board of Directors on
June 13, 2002, the Plan, as amended, shall be effective for
the Plan Year in which such approval occurs and each of the
succeeding Plan Years through (and including) the 2007 Plan
Year, unless sooner terminated by the Board of Directors in
accordance with Section 7.3. For the 2008 Plan Year, the
Plan shall remain in effect in accordance with its terms unless
amended or terminated by the Board of Directors, and the
Committee shall make the determinations required by
Section 4 for such Plan Year, but the Plan shall be
submitted for re-approval by the shareholders of the Company at
the annual meeting of shareholders held during the 2008 Plan
Year, and payment of all Awards under the Plan for the 2007 Plan
Year and any future Plan Years shall be contingent upon such
approval.

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