As filed with the U.S. Securities and Exchange Commission on August 5, 2011

Registration No. 333-175398

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Amendment No. 1 to

 

Form S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

Allied World Assurance Company Holdings, AG

(Exact name of registrant as specified in its charter)

 

Lindenstrasse 8, 6340 Baar

Zug, Switzerland

41-41-768-1080

(Address, including ZIP Code, and Telephone Number, including Area Code, of Registrant’s Principal Executive Offices)

 

CT Corporation System

111 Eighth Avenue, 13th Floor

New York, New York 10011

(212) 894-8940

(Name, Address, including ZIP Code, and Telephone Number, including Area Code, of Agent for Service)

 

Copies to:

 

 

 

Approximate date of commencement of proposed sale of the securities to the public:  As soon as practicable after this Registration Statement becomes effective and upon completion of the merger described in the enclosed joint proxy statement/prospectus.

 

If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  o

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

(Do not check if a smaller reporting company)

 

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

 

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)  o

 

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)  o

 

CALCULATION OF REGISTRATION FEE

 

 

 

 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act, or until the Registration Statement shall become effective on such dates as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

 

PRELIMINARY — SUBJECT TO COMPLETION — DATED AUGUST 5, 2011

 

 

PROPOSED MERGER — YOUR VOTE IS VERY IMPORTANT

 

Allied World Assurance Company Holdings, AG (“Allied World”) and Transatlantic Holdings, Inc. (“Transatlantic”) have agreed to a “merger of equals” business combination of the two companies pursuant to the terms of an Agreement and Plan of Merger, dated as of June 12, 2011 (the “merger agreement”). Pursuant to the terms of the merger agreement, GO Sub, LLC, a wholly-owned subsidiary of Allied World (“Merger Sub”), will merge with and into Transatlantic (the “merger”), with Transatlantic surviving as a wholly-owned subsidiary of Allied World. Upon completion of the merger, Allied World will be the parent company of Transatlantic and Allied World’s name will be changed to “TransAllied Group Holdings, AG”.

 

Upon completion of the merger, Transatlantic stockholders will be entitled to receive 0.88 registered shares (Namenaktien) of Allied World (“Allied World shares”) for each share of Transatlantic common stock, par value $1.00 per share (“Transatlantic common stock”), that they own immediately prior to the effective time of the merger (the “exchange ratio”), together with cash in lieu of Allied World fractional shares. This exchange ratio is fixed and will not be adjusted to reflect stock price changes prior to the closing of the merger. Based on the closing price of Allied World shares on the New York Stock Exchange, Inc. (the “NYSE”) on June 10, 2011, the last trading day before public announcement of the merger, the exchange ratio represented approximately $51.10 in value for each share of Transatlantic common stock. Based on the closing price of Allied World shares on the NYSE on          , 2011, the latest practicable trading day before the date of this joint proxy statement/prospectus, the exchange ratio represented approximately $     in value for each share of Transatlantic common stock. Allied World shareholders will continue to own their existing Allied World shares after the merger. Allied World shares are currently traded on the NYSE under the symbol “AWH,” and Transatlantic common stock is currently traded on the NYSE under the symbol “TRH.” We urge you to obtain current market quotations of Allied World shares and Transatlantic common stock.

 

Based on the estimated number of Allied World shares and Transatlantic common stock that will be outstanding immediately prior to the closing of the merger, we estimate that, on a fully diluted basis, upon such closing, former Allied World shareholders will own approximately 42% of the combined company and former Transatlantic stockholders will own approximately 58% of the combined company.

 

Allied World and Transatlantic will each hold a meeting of their respective shareholders (the “Special Shareholder Meetings”) in connection with the merger. At the extraordinary general meeting of Allied World shareholders, (the “Allied World Special Shareholder Meeting”), Allied World shareholders will be asked to vote on proposals to increase the ordinary share capital, conditional share capital and authorized share capital of Allied World, a proposal to approve the issuance of Allied World shares to Transatlantic stockholders, a proposal to amend the Allied World Articles of Association to change Allied World’s name to “TransAllied Group Holdings, AG”, a proposal to elect directors to the combined company’s board of directors upon completion of the merger, and certain other related proposals. At the special meeting of Transatlantic stockholders (the “Transatlantic Special Shareholder Meeting”), Transatlantic stockholders will be asked to vote on the adoption of the merger agreement and certain other related proposals.

 

We cannot complete the merger unless the holders of each company’s shares approve the proposals related to the merger. Your vote is very important, regardless of the number of shares you own. Whether or not you expect to attend either Special Shareholder Meeting in person, please submit a proxy to vote your shares as promptly as possible so that your shares may be represented and voted at the Allied World or Transatlantic Special Shareholder Meeting, as applicable.

 

The Allied World board of directors has unanimously approved the merger agreement and determined that the merger agreement and the transactions contemplated thereby are in the best interests of Allied World. The Allied World board of directors unanimously recommends that the Allied World shareholders vote (i) “FOR” the proposals to increase the ordinary share capital, (ii) “FOR” the

proposal to issue shares of Allied World in the merger, (iii) “FOR” the proposal to amend Allied World’s Articles of Association to change the company’s name, (iv) “FOR” the proposal to elect directors to the combined company’s board of directors, (v) “FOR” the proposal to effect a capital reduction to allow for the payment of a dividend to the combined company’s shareholders after the completion of the merger and (vi) “FOR” the proposal to approve the fourth amendment and restatement of the Allied World Third Amended and Restated 2004 Stock Incentive Plan.

 

The Transatlantic board of directors has unanimously approved the merger agreement and determined that the merger agreement and the transactions contemplated thereby are in the best interests of Transatlantic and its stockholders. The Transatlantic board of directors unanimously recommends that Transatlantic stockholders vote (i) “FOR” the proposal to adopt the merger agreement, (ii) “FOR” the proposal to approve adjournment of the Transatlantic Special Shareholder Meeting, if necessary or appropriate, to solicit additional proxies and (iii) “FOR” the proposal to approve, on an advisory (non-binding) basis, the compensation that may be paid or become payable to Transatlantic’s named executive officers in connection with the merger and the agreements and understandings pursuant to which such compensation may be paid or become payable.

 

The obligations of Allied World and Transatlantic to complete the merger are subject to the satisfaction or waiver of several conditions. The accompanying joint proxy statement/prospectus contains detailed information about Allied World, Transatlantic, the meetings, the merger agreement and the merger. You should read this joint proxy statement/prospectus carefully and in its entirety before voting, including the section entitled “Risk Factors” beginning on page 22.

 

We look forward to the successful combination of Allied World and Transatlantic.

 

Sincerely,

 

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued under this joint proxy statement/prospectus or determined if this joint proxy statement/prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

This joint proxy statement/prospectus is dated          , 2011 and is first being mailed to the holders of shares of Allied World and Transatlantic on or about          , 2011.

 

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
Lindenstrasse 8, 6340 Baar
Zug, Switzerland

 

NOTICE OF SPECIAL SHAREHOLDER MEETING
TO BE HELD ON          , 2011

 

August   , 2011

 

To the Shareholders of Allied World Assurance Company Holdings, AG:

 

We are pleased to invite you to attend the extraordinary general meeting of shareholders of Allied World Assurance Company Holdings, AG (“Allied World”), a Swiss corporation, which will be held at Allied World’s corporate headquarters, Lindenstrasse 8, 6340 Baar, Zug, Switzerland, on          , 2011, at [2:00] p.m. local time, for the following purposes (the “Allied World Special Shareholder Meeting”):

 

 

 

Completion of the merger is conditioned on, among other things, approval of each of the proposals described above.

 

In addition, there are two additional proposals, the approval of the second proposal is conditioned upon the approval of the proposals set forth above:

 

 

 

Allied World will transact no other business at the meeting except such business as may properly be brought before the Allied World Special Shareholder Meeting or any adjournment or postponement thereof. Please refer to the joint proxy statement/prospectus of which this notice forms a part for further information with respect to the business to be transacted at the Allied World Special Shareholder Meeting.

 

The Allied World board of directors has unanimously approved the merger agreement and determined that the merger agreement and the transactions contemplated thereby, including the merger, the issuance of the Allied World shares to Transatlantic stockholders pursuant to the merger and the amendment of the Allied World Articles, are in the best interests of Allied World. The Allied World board of directors unanimously recommends that Allied World shareholders vote “FOR” each of the proposals set forth above.

 

The Allied World board of directors has fixed the close of business on July 22, 2011 as the record date for determination of Allied World shareholders entitled to receive notice of, and to vote at, the Allied World Special Shareholder Meeting or any adjournments or postponements thereof. Only holders of record of Allied World shares at the close of business on the record date are entitled to receive notice of, and to vote at, the Allied World Special Shareholder Meeting.

 

The approval of each of the proposals to increase the share capital of Allied World requires the approval of at least 662/3% of the votes represented at the Allied World Special Shareholder Meeting and a majority of the nominal value of the Allied World shares represented at such meeting, where holders of at least 50% of the total outstanding Allied World shares are represented and voting and who are entitled to vote on such proposal. The approval of the proposals to issue the Allied World shares pursuant to the merger and to amend and restate the Stock Incentive Plan in order to increase the shares reserved for issuance thereunder requires the affirmative vote of the holders of a majority of shares entitled to vote on the proposal and present in person or represented by proxy at the Allied World Special Shareholder Meeting; provided that the total votes cast on each such proposal represent over 50% of the outstanding Allied World shares entitled to vote on such proposal (whereby abstentions will be treated as votes cast for purposes of such proposal and will have the effect of votes “against” such proposals, and broker non-votes will not be treated as votes cast for purposes of such proposal). The approval of the proposals to amend the Allied World Articles to change Allied World’s name to “TransAllied Group Holdings, AG” following the completion of the merger, to elect the directors as described above and to approve a capital reduction to allow for payment of a dividend to the combined company shareholders after the completion of the merger, require a majority of the votes cast in favor of such proposals at the Allied World Special Shareholder Meeting (whereby abstentions and broker non-votes will not be treated as votes cast for purposes of such proposal) where holders of at least 50% of the total outstanding Allied World shares are represented and voting and who are entitled to vote on such proposals.

 

Your vote is very important. Whether or not you expect to attend in person, we urge you to submit a proxy to vote your shares as promptly as possible by signing and returning the enclosed proxy card in the postage-paid envelope provided, so that your shares may be represented and voted at the Allied World Special Shareholder Meeting. If your shares are held in an Allied World plan or in the name of a bank, brokerage firm or other nominee, please follow the instructions on the voting instruction card furnished by the plan trustee or administrator, or record holder, as appropriate.

 

The enclosed joint proxy statement/prospectus provides a detailed description of the merger and the merger agreement. We urge you to read the joint proxy statement/prospectus of which this notice forms a part, including any documents incorporated by reference, and the Annexes carefully and in their entirety. If you

have any questions concerning the merger or this joint proxy statement/prospectus, would like additional copies or need help voting your Allied World shares, please contact Allied World’s proxy solicitor:

 

MacKenzie Partners, Inc.

105 Madison Avenue

New York, NY 10016

(800) 322-2885

or

(212) 929-5500 (collect)

E-mail: proxy@mackenziepartners.com

 

By Order of the Board of Directors of

Allied World Assurance Company Holdings, AG,

 

Wesley D. Dupont

Corporate Secretary

TRANSATLANTIC HOLDINGS, INC.
80 Pine Street
New York, NY 10005

 

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON          , 2011

 

August   , 2011

 

To the Stockholders of Transatlantic Holdings, Inc.:

 

We are pleased to invite you to attend the special meeting of stockholders of Transatlantic Holdings, Inc. (“Transatlantic”), a Delaware corporation, which will be held at           on          , 2011 at [8:00] a.m. local time, for the following purposes (the “Transatlantic Special Shareholder Meeting”):

 

 

 

Completion of the merger is conditioned on, among other things, approval of the proposal to adopt the merger agreement.

 

Transatlantic will transact no other business at the Transatlantic Special Shareholder Meeting except such business as may properly be brought before the Transatlantic Special Shareholder Meeting or any adjournment or postponements thereof. Please refer to the joint proxy statement/prospectus of which this notice forms a part for further information with respect to the business to be transacted at the Transatlantic Special Shareholder Meeting.

 

The Transatlantic board of directors has unanimously approved the merger agreement and determined that the merger agreement and the transactions contemplated thereby, including the merger, are advisable and in the best interests of Transatlantic and its stockholders. The Transatlantic board of directors unanimously recommends that Transatlantic stockholders vote “FOR” each of the proposals set forth above.

 

The Transatlantic board of directors has fixed the close of business on July 22, 2011 as the record date for determination of Transatlantic stockholders entitled to receive notice of, and to vote at, the Transatlantic Special Shareholder Meeting or any adjournments or postponements thereof. Only holders of record of Transatlantic common stock (“Transatlantic common stock”) at the close of business on the record date are entitled to receive notice of, and to vote at, the Transatlantic Special Shareholder Meeting. A list of the names of Transatlantic stockholders of record will be available for ten days prior to the Transatlantic Special Shareholder Meeting for any purpose germane to the Transatlantic Special Shareholder Meeting between the regular business hours of 9:00 a.m. and 5:00 p.m., local time, at Transatlantic’s headquarters, 80 Pine Street, New York, NY. The Transatlantic stockholder list will also be available at the Transatlantic Special

Shareholder Meeting during the whole time thereof for examination by any stockholder present at such meeting.

 

Adoption of the merger agreement requires the affirmative vote of holders of a majority of the outstanding shares of Transatlantic common stock entitled to vote thereon. Approval of the proposal to adjourn the Transatlantic Special Shareholder Meeting, if necessary or appropriate, for the purpose of soliciting additional proxies requires the affirmative vote of the holders of a majority of the shares of Transatlantic common stock entitled to vote and present in person or represented by proxy, whether or not a quorum is present. Approval, on an advisory (non-binding) basis, of the compensation that may be paid or become payable to Transatlantic’s named executive officers in connection with the merger, and the agreements and understandings pursuant to which such compensation may be paid or become payable, requires the affirmative vote of the holders of a majority of the shares of Transatlantic common stock present in person or represented by proxy and entitled to vote thereon.

 

Your vote is very important. Whether or not you expect to attend the Transatlantic Special Shareholder Meeting in person, we urge you to submit a proxy to vote your shares as promptly as possible by either: (1) logging onto http://proxy.georgeson.com and following the instructions on your proxy card; (2) dialing 1-800-652-VOTE (8683) and listening for further directions; or (3) signing and returning the enclosed proxy card in the postage-paid envelope provided, so that your shares may be represented and voted at the Transatlantic Special Shareholder Meeting. If your shares are held in the name of a bank, brokerage firm or other nominee, please follow the instructions on the voting instruction card furnished by the record holder, as appropriate.

 

The enclosed joint proxy statement/prospectus provides a detailed description of the merger and the merger agreement. We urge you to read the joint proxy statement/prospectus of which this notice forms a part, including any documents incorporated by reference, and the Annexes carefully and in their entirety. If you have any questions concerning the merger or this joint proxy statement/prospectus, would like additional copies or need help voting your shares of Transatlantic common stock, please contact Transatlantic’s proxy solicitor:

 

Georgeson Inc.

199 Water Street

New York, NY 10038

(888) 613-9817

(Banks and brokers please call: (212) 440-9800)

E-mail: transatlantic@georgeson.com

 

By Order of the Board of Directors of

Transatlantic Holdings, Inc.,

 

Amy M. Cinquegrana

Secretary

ADDITIONAL INFORMATION

 

This joint proxy statement/prospectus incorporates important business and financial information about Allied World and Transatlantic from other documents that are not included in or delivered with this joint proxy statement/prospectus. This information is available to you without charge upon your request. You can obtain the documents incorporated by reference into this joint proxy statement/prospectus free of charge by requesting them in writing or by telephone from the appropriate company at the following addresses and telephone numbers:

 

 

Investors may also consult Allied World’s or Transatlantic’s website for more information concerning the merger described in this joint proxy statement/prospectus. Allied World’s website is www.awac.com.  Transatlantic’s website is www.transre.com. Information included on these websites is not incorporated by reference into this joint proxy statement/prospectus.

 

If you would like to request any documents, please do so by          , 2011 in order to receive them before the meetings.

 

For a more detailed description of the information incorporated by reference in this joint proxy statement/prospectus and how you may obtain it, see “Where You Can Find More Information” beginning on page 183.

ABOUT THIS JOINT PROXY STATEMENT/PROSPECTUS

 

This joint proxy statement/prospectus, which forms part of a registration statement on Form S-4 filed with the U.S. Securities and Exchange Commission (the “SEC”) by Allied World, constitutes a prospectus of Allied World under Section 5 of the Securities Act of 1933, as amended (the “Securities Act”), with respect to the Allied World registered shares (the “Allied World shares”) to be issued to the Transatlantic stockholders pursuant to the merger. This joint proxy statement/prospectus also constitutes a joint proxy statement for both Allied World and Transatlantic under Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). It also constitutes a notice of meeting with respect to the extraordinary general meeting of Allied World shareholders (the “Allied World Special Shareholder Meeting”) and a notice of meeting with respect to the special meeting of Transatlantic stockholders (the “Transatlantic Special Shareholder Meeting”).

 

You should rely only on the information contained in or incorporated by reference into this joint proxy statement/prospectus. No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this joint proxy statement/prospectus. This joint proxy statement/prospectus is dated          , 2011. You should not assume that the information contained in this joint proxy statement/prospectus is accurate as of any date other than that date. You should not assume that the information incorporated by reference into this joint proxy statement/prospectus is accurate as of any date other than the date of the incorporated document. Neither our mailing of this joint proxy statement/prospectus to Allied World shareholders or Transatlantic stockholders nor the issuance by Allied World of Allied World shares pursuant to the merger will create any implication to the contrary.

 

This joint proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation. Information contained in this joint proxy statement/prospectus regarding Allied World has been provided by Allied World and information contained in this joint proxy statement/prospectus regarding Transatlantic has been provided by Transatlantic.

 

All references in this joint proxy statement/prospectus to “Allied World” refer to Allied World Assurance Company Holdings, AG, a Swiss corporation, and/or its consolidated subsidiaries, unless the context requires otherwise; all references in this joint proxy statement/prospectus to “Transatlantic” refer to Transatlantic Holdings, Inc., a Delaware corporation, and/or its consolidated subsidiaries, unless the context requires otherwise; all references to “Merger Sub” refer to GO Sub, LLC, a Delaware limited liability company and wholly-owned subsidiary of Allied World formed for the sole purpose of effecting the merger; unless otherwise indicated or as the context requires, all references in this joint proxy statement/prospectus to “we,” “our” and “us” refer to Allied World and Transatlantic collectively; and, unless otherwise indicated or as the context requires, all references to the “merger agreement” refer to the Agreement and Plan of Merger, dated as of June 12, 2011, as it may be amended from time to time, by and among Allied World, Transatlantic and Merger Sub, a copy of which is included as Annex A to this joint proxy statement/prospectus. Allied World, following completion of the merger, is sometimes referred to in this joint proxy statement/prospectus as “TransAllied” or the “combined company.” Also, in this joint proxy statement/prospectus, “$” and “USD” refer to U.S. dollars and “CHF” refers to Swiss francs; and “local time” means the local time in Switzerland with respect to the Allied World Special Shareholder Meeting and related matters, and the local time in New York City with respect to the Transatlantic Special Shareholder Meeting and related matters.

 

TABLE OF CONTENTS

 

 

The following are some questions that you, as a shareholder of Allied World Assurance Company Holdings, AG (an “Allied World shareholder”) or a stockholder of Transatlantic Holdings, Inc. (a “Transatlantic stockholder”), may have regarding the merger and the other matters being considered at the contemplated meetings and the answers to those questions. Allied World Assurance Company Holdings, AG (“Allied World”) and Transatlantic Holdings, Inc. (“Transatlantic”) urge you to carefully read the remainder of this joint proxy statement/prospectus because the information in this section does not provide all the information that might be important to you with respect to the merger and the other matters being considered at the Special Shareholder Meetings. Additional important information is also contained in the Annexes to, and the documents incorporated by reference into, this joint proxy statement/prospectus.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SUMMARY

 

The Companies

 

The Merger

	•	Class II (to hold office commencing upon the completion of the merger and ending upon TransAllied’s Annual Shareholder Meeting in 2012): Ian H. Chippendale, John L. McCarthy and one former independent Allied World director;

	•	Class III (to hold office commencing upon the completion of the merger and ending upon TransAllied’s Annual Shareholder Meeting in 2013): Stephen P. Bradley, John G. Foos and two former independent Allied World directors; and

	•	Class I (to hold office commencing upon the completion of the merger and ending upon TransAllied’s Annual Shareholder Meeting in 2014): Scott A. Carmilani, Richard S. Press, Michael C. Sapnar, and one former independent Allied World director.

	•	approval by the Allied World shareholders of (i) the share capital increase proposals, (ii) the NYSE share issuance proposal and (iii) the name change proposal;
	•	approval by the Transatlantic stockholders of the adoption of the merger agreement proposal;
	•	authorization of the listing of the Allied World shares to be issued in the merger on the NYSE, subject to official notice of issuance;
	•	the waiting period (and any extension thereof) applicable to the merger under the HSR Act having expired or been earlier terminated;
	•	obtaining any necessary approvals of the applicable insurance regulatory authorities in New York, Bermuda and Switzerland;
	•	receipt of other requisite regulatory approvals;
	•	all consents and approvals of, and filings with, governmental agencies having been made, obtained and in full force, other than those that would not reasonably be expected to have a material adverse effect on Allied World and Transatlantic after giving effect to the merger;
	•	effectiveness of the registration statement of which this joint proxy statement/prospectus forms a part and the absence of a stop order or proceedings threatened or initiated by the SEC for that purpose;
	•	absence of any order, injunction, decree, statute, rule or regulation by a court or other governmental entity that makes illegal or prohibits the completion of the merger or the other transactions contemplated by the merger agreement;
	•	approval by the Allied World shareholders of the election of directors proposal and execution of a written consent of the TransAllied board approving certain committee and officer appointments;
	•	a ruling from the Swiss Commercial Register having been obtained; and
	•	the purchase by Allied World, following receipt of the requisite Allied World and Transatlantic shareholder approvals, of 45,000 shares of Transatlantic common stock having been completed.

	•	the representations and warranties of each party, other than the representations related to the shares issued and outstanding or reserved for issuance, the necessary corporate power and authority to execute and deliver the merger agreement, and the brokers’ and finders’ fees, will be true and correct (without giving effect to any materiality qualifications contained in such representations and warranties) as of the date of the merger agreement and as of the closing date (other than those representations and warranties that were made only as of a specified date, which need only be true and correct as of such

		specified date), except where the failure of such representations and warranties to be so true and correct (without giving effect to any limitation as to “materiality” or to material adverse effect set forth therein), individually or in the aggregate, has not had, and would not reasonably be expected to have, a material adverse effect on such party;

	•	the representations and warranties of each party relating to the shares issued and outstanding or reserved for issuance, the necessary corporate power and authority to execute and deliver the merger agreement, and the brokers and finders’ fees, will be true and correct in all material respects as of the date of the merger agreement and as of the closing date (except to the extent such representations or warranties were made as of an earlier date, in which case, as of such earlier date);
	•	each party having performed or complied with, in all material respects, all its obligations under the merger agreement at or prior to the effective time of the merger; and
	•	receipt of a certificate executed by each party’s chief executive officer or chief financial officer as to the satisfaction of the conditions described in the preceding three bullet points.

	•	by mutual written consent of Allied World and Transatlantic; or
	•	by either party, if:

	•	a governmental entity issues a final and nonappealable order, decree or ruling or takes any other action (including the failure to have taken an action) having the effect of permanently enjoining or otherwise prohibiting the merger or the other transactions contemplated by the merger agreement;
	•	the required approval by the shareholders of Allied World or the stockholders of Transatlantic has not been obtained at the respective Special Shareholder Meeting (or at any adjournment or postponement thereof);
	•	the merger has not been completed on or before January 31, 2012 (the “end date”), subject to extension by the mutual agreement of Allied World and Transatlantic;

	•	the other party has breached any of its agreements or representations in the merger agreement, in a way that the conditions to such non-breaching party’s obligation to complete the merger would not then be satisfied and such breach is either incurable or not cured by the end date; or
	•	prior to obtaining the requisite stockholder approval, the board of directors of the other party changes its recommendation that its stockholders vote in favor of the merger and the transactions contemplated by the merger agreement.

 

The Meetings

	•	the proposal to increase Allied World’s ordinary share capital pursuant to article 3a(a) of the Allied World Articles by CHF     (equaling USD     ) to CHF     (equaling USD     ) by the issuance of           Allied World shares to Transatlantic stockholders pursuant to, and only in connection with, the merger as contemplated by the merger agreement, including the exclusion of all preferential subscription rights to which Allied World shareholders may be entitled, referred to herein as the “article 3 share capital increase proposal”; the contributions for the new registered shares are paid by converting existing reserves (Kapitalreserven) into share capital;
	•	the proposal to increase Allied World’s conditional share capital pursuant to article 5(a) of the Allied World Articles by CHF     (equaling USD     ) to CHF     (equaling USD     ), only in connection with the merger, referred to herein as the “article 5 share capital increase proposal”;
	•	the proposal to increase Allied World’s authorized share capital pursuant to article 6(a) of the Allied World Articles by CHF     (equaling USD     ) to CHF     (equaling USD     ), only in connection with the merger, referred to herein as the “article 6 share capital increase proposal” and, together with the article 3 share capital increase proposal and the article 5 share capital increase proposal, the “share capital increase proposals”;
	•	the proposal to issue Allied World shares to Transatlantic stockholders pursuant to the merger and as contemplated by the merger agreement as required by NYSE rules, referred to herein as the “NYSE share issuance proposal”;
	•	the proposal to amend article 1 of the Allied World Articles to change Allied World’s name to “TransAllied Group Holdings, AG” immediately following, and conditioned upon, the completion of the merger, referred to herein as the “name change proposal”;
	•	the proposal to elect (x) three Class II directors to hold office commencing upon the completion of the merger and ending upon TransAllied’s Annual Shareholder Meeting in 2012, (y) four Class III directors to hold office commencing upon the completion of the merger and ending upon TransAllied’s Annual Shareholder Meeting in 2013 and (z) four Class I directors to hold office commencing upon the completion of the merger and ending upon TransAllied’s Annual Shareholder Meeting in 2014, referred to herein as the “election of directors proposal”;

	•	the proposal to effect a capital reduction to allow for the payment of a dividend to the combined company’s shareholders after the completion of the merger, referred to herein as the “capital reduction proposal”; and
	•	the proposal to amend and restate the Stock Incentive Plan, the form of which is included as Annex E to the joint proxy statement/prospectus, as required by NYSE rules, to, among other things, increase the number of shares reserved for issuance under the Stock Incentive Plan and to extend the Plan’s termination date effective upon the completion of the merger, referred to herein as the “Stock Incentive Plan proposal.”

	•	the proposal to adopt the merger agreement, which is further described in the sections entitled “The Merger” and “The Merger Agreement,” beginning on pages 42 and 105, respectively, referred to herein as the “adoption of the merger agreement proposal”;

	•	the proposal to adjourn the Transatlantic Special Shareholder Meeting, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes to approve the foregoing proposal, referred to herein as the “adjournment proposal”; and
	•	the proposal, on an advisory (non-binding) basis, to approve the compensation that may be paid or become payable to Transatlantic’s named executive officers in connection with the merger, and the agreements and understandings pursuant to which such compensation may be paid or become payable as described in the section entitled “The Merger — Interests of Transatlantic’s Directors and Executive Officers in the Merger — Golden Parachute Compensation”, referred to herein as the “golden parachute proposal.”

 

Summary Historical Consolidated Financial Data

		Three Months Ended
		March 31,								Year Ended December 31,
		2011				2010				2010				2009				2008				2007				2006
		($ in millions, except per share amounts and ratios)
Summary Statement of Operations Data:
Gross premiums written		$	560.7			$	504.2			$	1,758.4			$	1,696.3			$	1,445.6			$	1,505.5			$	1,659.0
Net premiums written		$	480.9			$	433.3			$	1,392.4			$	1,321.1			$	1,107.2			$	1,153.1			$	1,306.6
Net premiums earned		$	334.9			$	338.3			$	1,359.5			$	1,316.9			$	1,117.0			$	1,159.9			$	1,252.0
Net investment income			50.2				68.9				244.1				300.7				308.8				297.9				244.4
Net realized investment gains (losses)			50.4				77.5				285.6				126.4				(60.0	)			37.0				(4.8	)
Net impairment charges recognized in earnings			—				(0.2	)			(0.2	)			(49.6	)			(212.9	)			(44.6	)			(23.9	)
Other income			—				0.3				0.9				1.5				0.7				—				—
Net losses and loss expenses			304.4				232.1				707.9				604.1				641.1				682.3				739.1
Acquisition costs			38.1				40.8				159.5				148.9				112.6				119.0				141.5
General and administrative expenses			68.0				63.5				286.5				248.6				185.9				141.6				106.1
Amortization and impairment of intangible assets			0.8				0.9				3.5				11.1				0.7				—				—
Interest expense			13.7				9.5				40.2				39.0				38.7				37.8				32.6
Foreign exchange (gain) loss			(0.4	)			1.1				0.4				0.7				(1.4	)			(0.8	)			0.6
Income tax expense (benefit)			2.3				3.2				26.9				36.6				(7.6	)			1.1				5.0
Net income		$	8.6			$	133.7			$	665.0			$	606.9			$	183.6			$	469.2			$	442.8
Per Share Data:
Earnings per share:
Basic		$	0.23			$	2.67			$	14.30			$	12.26			$	3.75			$	7.84			$	8.09
Diluted			0.21				2.52				13.32				11.67				3.59				7.53				7.75
Weighted average number of common shares outstanding:
Basic			38,199,867				50,023,816				46,491,279				49,503,438				48,936,912				59,846,987				54,746,613
Diluted			40,383,523				53,115,756				49,913,317				51,992,674				51,147,215				62,331,165				57,115,172
Dividends declared per share		$	—	*		$	0.20			$	1.05			$	0.74			$	0.72			$	0.63			$	0.15

*		On August 5, 2011 Allied World expects to distribute the first of its quarterly dividends, as approved by the shareholders at its 2011 annual general shareholder meeting on May 5, 2011.

		Three Months Ended
		March 31,								Year Ended December 31,
		2011				2010				2010				2009				2008				2007				2006
Selected Ratios:
Loss and loss expense ratio(1)			90.9	%			68.6	%			52.1	%			45.9	%			57.4	%			58.8	%			59.0	%
Acquisition cost ratio(2)			11.4				12.1				11.7				11.3				10.1				10.3				11.3
General and administrative expense ratio(3)			20.3				18.8				21.1				18.9				16.6				12.2				8.5
Expense ratio(4)			31.7				30.9				32.8				30.2				26.7				22.5				19.8
Combined ratio(5)			122.6				99.5				84.9				76.1				84.1				81.3				78.8

		As of March 31,								As of December 31,
		2011				2010				2010				2009				2008				2007				2006
		($ in millions, except per share amounts)
Summary Balance Sheet Data:
Cash and cash equivalents		$	694.0			$	452.1			$	757.0			$	292.2			$	655.8			$	202.6			$	366.8
Investments at fair value			7,245.7				7,357.9				7,183.6				7,156.3				6,157.1				6,029.3				5,440.3
Reinsurance recoverable			975.5				920.5				927.6				920.0				888.3				682.8				689.1
Total assets			10,668.8				10,324.5				10,427.6				9,653.2				9,022.5				7,899.1				7,620.6
Reserve for losses and loss expenses			5,100.6				4,853.4				4,879.2				4,761.8				4,576.8				3,919.8				3,637.0
Unearned premiums			1,096.3				1,007.9				962.2				928.6				930.4				811.1				813.8
Total debt			797.8				499.0				797.7				498.9				742.5				498.7				498.6
Total shareholders’ equity			2,951.0				3,338.8				3,075.8				3,213.3				2,416.9				2,239.8				2,220.1
Book value per common share(6)		$	77.86			$	66.17			$	80.75			$	64.61			$	49.29			$	45.95			$	36.82

(1)		Calculated by dividing net losses and loss expenses by net premiums earned.
(2)		Calculated by dividing acquisition costs by net premiums earned.
(3)		Calculated by dividing general and administrative expenses by net premiums earned.
(4)		Calculated by combining the acquisition cost ratio and the general and administrative expense ratio.
(5)		Calculated by combining the loss ratio, acquisition cost ratio and general and administrative expense ratio.
(6)		Book value per common share is total shareholders’ equity divided by common shares outstanding.

 

Summary Historical Consolidated Financial Data of Transatlantic

		Three Months Ended
		March 31,								Years Ended December 31,
		2011				2010				2010				2009				2008				2007				2006
		(in thousands, except per share amounts and ratios)
Net premiums written		$	1,043,824			$	1,026,299			$	3,881,693			$	3,986,101			$	4,108,092			$	3,952,899			$	3,633,440
Net premiums earned		$	956,829			$	992,595			$	3,858,620			$	4,039,082			$	4,067,389			$	3,902,669			$	3,604,094
Net losses and loss adjustment expenses incurred			(1,169,052	)			(786,324	)			(2,681,774	)			(2,679,171	)			(2,907,227	)			(2,638,033	)			(2,462,666	)
Net commissions			(241,001	)			(234,512	)			(932,820	)			(927,918	)			(980,626	)			(980,121	)			(903,666	)
Increase (decrease) in deferred policy acquisition costs			32,160				5,500				2,898				(12,406	)			6,956				16,901				13,471
Other underwriting expenses			(36,725	)			(44,129	)			(177,624	)			(158,181	)			(131,555	)			(115,760	)			(102,339	)
Underwriting (loss) profit(1)			(457,789	)			(66,870	)			69,300				261,406				54,937				185,656				148,894
Net investment income			106,840				112,610				473,547				467,402				440,451				469,772				434,540
Realized net capital gains (losses)(2)			55,412				(1,889	)			30,101				(70,641	)			(435,541	)			9,389				10,862
(Loss) gain on early extinguishment of debt			(1,179	)			—				(115	)			9,869				10,250				—				—
Interest on senior notes			(16,894	)			(17,086	)			(68,272	)			(43,454	)			(43,359	)			(43,421	)			(43,405	)
Other expenses, net			(7,152	)			(7,685	)			(31,773	)			(28,549	)			(23,515	)			(25,644	)			(10,983	)
(Loss) income before income taxes			(320,762	)			19,080				472,788				596,033				3,223				595,752				539,908
Income (taxes) benefits			130,610				(3,205	)			(70,587	)			(118,371	)			99,031				(108,611	)			(111,756	)
Net (loss) income		$	(190,152	)		$	15,875			$	402,201			$	477,662			$	102,254			$	487,141			$	428,152
Per Common Share:
Net (loss) income:
Basic		$	(3.05	)		$	0.24			$	6.28			$	7.20			$	1.54			$	7.37			$	6.49
Diluted			(3.05	)			0.24				6.19				7.15				1.53				7.31				6.46
Cash dividends declared			0.21				0.20				0.83				0.79				0.73				0.62				0.53
Share Data:
Weighted average common shares outstanding:
Basic			62,365				65,879				64,092				66,381				66,270				66,124				65,955
Diluted			62,365				66,551				64,930				66,802				66,722				66,654				66,266
Ratios:(3)
Loss ratio			122.2	%			79.2	%			69.5	%			66.3	%			71.5	%			67.6	%			68.3	%
Commission ratio			21.8				23.1				24.1				23.3				23.9				24.7				24.7
Other underwriting expense ratio			3.8				4.4				4.6				3.9				3.2				2.9				2.9
Underwriting expense ratio			25.6				27.5				28.7				27.2				27.1				27.6				27.6
Combined ratio			147.8	%			106.7	%			98.2	%			93.5	%			98.6	%			95.2	%			95.9	%

		As of March 31,								As of December 31,
		2011				2010				2010				2009				2008				2007				2006
		($ in thousands, except per share amounts)
Total investments		$	13,152,050			$	12,178,336			$	12,972,739			$	12,315,395			$	10,229,557			$	12,500,540			$	11,130,832
Cash and cash equivalents			331,307				423,784				284,491				195,723				288,920				255,432				205,264
Total assets			16,335,382				15,134,408				15,705,354				14,943,659				13,376,938				15,484,327				14,268,464
Unpaid losses and loss adjustment expenses			9,773,978				8,706,265				9,020,610				8,609,105				8,124,482				7,926,261				7,467,949
Unearned premiums			1,321,276				1,243,803				1,212,535				1,187,526				1,220,133				1,226,647				1,144,022
Senior notes			1,005,683				1,033,193				1,030,511				1,033,087				722,243				746,930				746,633
Total stockholders’ equity			4,041,373				3,985,114				4,284,459				4,034,380				3,198,220				3,349,042				2,958,270
Book value per common share(4)		$	64.69			$	61.97			$	68.83			$	60.77			$	48.19			$	50.56			$	44.80

(1)		Includes pre-tax net catastrophe (costs) of ($545) million in the first quarter of 2011, ($130) million in the first quarter of 2010, ($202) million in the full year 2010, $6 million in the full year 2009, ($170) million in the full year 2008, ($55) million in the full year 2007 and ($29) million in the full year 2006.
(2)		Includes other-than-temporary impairment write-downs charged to earnings of ($2) million in the first quarter of 2011, ($6) million in the first quarter of 2010, ($8) million in the full year 2010, ($83) million in the full year 2009, ($318) million in the full year 2008, ($27) million in the full year 2007 and ($1) million in the full year 2006.
(3)		The loss ratio represents the absolute value of net losses and loss adjustment expenses incurred expressed as a percentage of net premiums earned. The underwriting expense ratio represents the sum of the commission ratio and the other underwriting expense ratio. The commission ratio represents the absolute value of the sum of net commission and the (decrease) increase in deferred policy acquisition costs expressed as a percentage of net premiums earned. The other underwriting expense ratio represents the absolute value of other underwriting expenses expressed as a percentage of net premiums earned. The combined ratio represents the sum of the loss ratio and the underwriting expense ratio.
(4)		Book value per common share is stockholders’ equity divided by common shares outstanding.

 

Summary Unaudited Pro Forma Condensed Consolidated
Financial Information of Allied World and Transatlantic

		As of
		March 31, 2011
		(Unaudited)
		(in thousands of U.S. dollars)
ASSETS
Total investments		$	20,397,744
Cash and cash equivalents and restricted cash			1,063,544
Insurance and reinsurance assets			3,659,542
Goodwill			—
Intangible assets			276,711
All other assets			1,376,223
Total assets		$	26,773,764
LIABILITIES AND SHAREHOLDERS’ EQUITY
Unpaid losses and loss adjustment expenses		$	14,808,258
Unearned premiums			2,408,610
Senior notes			1,861,890
All other liabilities			950,207
Total liabilities			20,028,965
Total shareholders’ equity			6,744,799
Total liabilities and shareholders’ equity		$	26,773,764

		Three Months Ended				Year Ended
		March 31, 2011				December 31, 2010
		(Unaudited)
		(in thousands, except shares outstanding and per share data)
Revenues:
Net premiums written		$	1,524,695			$	5,274,148
Increase in net unearned premiums			(232,990	)			(55,980	)
Net premiums earned			1,291,705				5,218,168
Net investment income			155,767				712,565
Realized net capital gains			106,230				315,101
Loss on early extinguishment of debt			(1,179	)			(115	)
Total revenues			1,552,523				6,245,719
Expenses:
Net losses and loss adjustment expenses			1,473,504				3,389,657
Acquisition costs			246,923				1,089,411
Other underwriting expenses			103,529				467,724
Interest on senior notes			28,095				99,647
Other expenses, net			8,604				146,292
Total expenses			1,860,655				5,192,731
(Loss) income before income taxes			(308,132	)			1,052,988
Income taxes (benefits)			(128,327	)			97,532
Net (loss) income		$	(179,805	)		$	955,456
Net (loss) income per common share:
Basic		$	(1.93	)		$	9.27
Diluted			(1.93	)			8.93
Dividends per common share			—				1.05
Weighted average common shares outstanding:
Basic			93,213,924				103,025,196
Diluted			93,213,924				107,045,083

 

Unaudited Comparative Per Share Data

		Three Months				Year Ended
		Ended				December 31,
Allied World — Historical		March 31, 2011				2010
Net income per share:
Basic		$	0.23			$	14.30
Diluted		$	0.21			$	13.32
Book value per share of common stock		$	77.86			$	80.75
Transatlantic — Historical
Net (loss) income per share:
Basic		$	(3.05	)		$	6.28
Diluted		$	(3.05	)		$	6.19
Book value per share of common stock		$	64.69			$	68.83
Allied World Unaudited Pro Forma Consolidated Amounts
Net (loss) income per share:
Basic		$	(1.93	)		$	9.27
Diluted		$	(1.93	)		$	8.93
Pro forma book value per share of common stock		$	72.52				(1	)
Transatlantic Unaudited Pro Forma Equivalent Per Share Data
Net (loss) income per share:
Basic		$	(1.70	)		$	8.16
Diluted		$	(1.70	)		$	7.85
Pro forma book value per share of common stock		$	63.81				(1	)

(1)		Not applicable.