Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.      )

Filed by the Registrant o
Filed by a Party other than the Registrant o
Check the appropriate box:
ý		Preliminary Proxy Statement
o		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
o		Definitive Proxy Statement
o		Definitive Additional Materials
o		Soliciting Material under §240.14a-12

 

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
ý		No fee required.
o		Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
		(1)		Title of each class of securities to which transaction applies:
		(2)		Aggregate number of securities to which transaction applies:
		(3)		Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
		(4)		Proposed maximum aggregate value of transaction:
		(5)		Total fee paid:
o		Fee paid previously with preliminary materials.
o		Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
		(1)		Amount Previously Paid:
		(2)		Form, Schedule or Registration Statement No.:
		(3)		Filing Party:
		(4)		Date Filed:

---

Table of Contents

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

NOTICE OF 2015
ANNUAL SHAREHOLDER MEETING

		March [13], 2015
DATE:		Thursday, April 30, 2015
TIME:		2:00 p.m., local time
PLACE:		Corporate headquarters: Park Tower, 15th floor, Gubelstrasse 24, 6300 Zug, Switzerland

 

ITEMS OF BUSINESS:
		Amend the Articles of Association to change the company's Swiss registered office.
		Amend the Articles of Association to define the duties of the Compensation Committee.
		Amend the Articles of Association to define the company's compensation principles.
		Amend the Articles of Association to limit the notice period in employment agreements with executive officers and agreements with directors, and to prohibit loans and credit to executives and directors.
		Amend the Articles of Association to limit the number of outside board seats our directors and executives may hold.
		Amend the Articles of Association to provide for say-on-pay votes required under Swiss law.
		Elect the board of directors.
		Elect the Chairman of the board of directors.
		Elect the Compensation Committee members.
		Elect the independent proxy.
		Approve the 2015 compensation for executives as required under Swiss law.
		Approve the 2015 compensation for directors as required under Swiss law.
		Approve, on an advisory basis, 2014 executive compensation as required under U.S. securities laws.
		Approve the 2014 Annual Report and financial statements.
		Approve the retention of disposable profits.
		Approve the payment of dividends to shareholders.

---

Table of Contents

		Approve the cancelling of treasury shares.
		Elect Deloitte & Touche LLP as independent auditor and Deloitte AG as statutory auditor.
		Elect PricewaterhouseCoopers AG as special auditor.
		Discharge of the board of directors and executive officers from liabilities for their actions during the year ended December 31, 2014.
		Transact any further business that lawfully may be brought before the meeting.

 

RECORD DATE:		Only shareholders of record holding common shares, as shown on our transfer books, as of the close of business on March 4, 2015 are entitled to vote at the Annual Shareholder Meeting.
MATERIALS TO REVIEW:		This document contains our Notice of 2015 Annual Shareholder Meeting and Proxy Statement. Our 2014 Annual Report accompanies this Proxy Statement but is not a part of our proxy solicitation materials.
PROXY VOTING:		It is important that your shares be represented and voted at the Annual Shareholder Meeting. Please promptly sign, date and return the enclosed proxy card in the return envelope furnished for that purpose whether or not you plan to attend the meeting. If you later desire to revoke your proxy for any reason, you may do so in the manner described in the attached proxy statement.

 

		By Order of the Board of Directors,
		Wayne H. Datz Corporate Secretary

---

TABLE OF CONTENTS

				Page
Proxy Statement Summary				1
General Meeting Information				7
Proposal 1:		Amend the Articles of Association to Change the Company's Swiss Registered Office		15
Proposal 2:		Amend the Articles of Association to Define the Duties of the Compensation Committee		15
Proposal 3:		Amend the Articles of Association to Define the Company's Compensation Principles		16
Proposal 4:		Amend the Articles of Association to Limit the Notice Period in Employment Agreements with Executive Officers and Agreements with Directors, and to Prohibit Loans and Credit to Executives and Directors		17
Proposal 5:		Amend the Articles of Association to Limit the Number of Outside Board Seats Our Directors and Executives May Hold		18
Proposal 6:		Amend the Articles of Association to Provide for Say-on-Pay Votes Required Under Swiss Law		19
Proposal 7:		Elect the Board of Directors		20
Proposal 8:		Elect the Chairman of the Board of Directors		31
Proposal 9:		Elect the Compensation Committee Members		31
Proposal 10:		Elect the Independent Proxy		32
Proposal 11:		Approve the 2015 Compensation for Executives as Required Under Swiss Law		32
Proposal 12:		Approve the 2015 Compensation for Directors as Required Under Swiss Law		35
Proposal 13:		Advisory Vote on 2014 Executive Compensation as Required Under U.S. Securities Laws		37
Proposal 14:		Approve the 2014 Annual Report and Financial Statements		38
Proposal 15:		Approve the Retention of Disposable Profits		38
Proposal 16:		Approve the Payment of Dividends to Shareholders		39
Proposal 17:		Approve the Cancelling of Treasury Shares		41
Proposal 18:		Elect Deloitte & Touche LLP as Independent Auditor and Deloitte AG as Statutory Auditor		41
Proposal 19:		Elect PricewaterhouseCoopers AG as Special Auditor		43
Proposal 20:		Discharge of the Board of Directors and Executive Officers from Liabilities		43
Certain Relationships and Related Transactions				44
Principal Shareholders				45
Executive Officers				47

-i-

---

				Page
Executive Compensation				50
Shareholder Communication				85
Shareholder Proposals for 2016 Annual Shareholder Meeting				86
Other Matters				86
Section 16(a) Beneficial Ownership Reporting Compliance				86
Notice of Internet Availability of Proxy Materials				86
Appendix A — Board Policy on Director Independence				A-1
Appendix B — Articles of Association				B-1

-ii-

---

Table of Contents

---

PROXY STATEMENT SUMMARY

---

Allied World 2014 Highlights

              In 2014, we continued to expand our insurance and reinsurance product offerings across a wide array of specialty coverages and jurisdictions. In North America, we further developed and expanded our suite of specialty products to meet our clients' needs. We focused on building out our Global Markets Insurance segment in Europe and Asia, including expanding our lines of business and successfully migrating in-house the managing agency for our Lloyd's Syndicate 2232. In Asia Pacific, we launched an Australia branch office and signed agreements to acquire the Hong Kong and Singapore operations of Royal & Sun Alliance Insurance plc ("RSA") to deepen and broaden our presence in the region. We also realigned our two business insurance operating segments in order to best serve our clients and trading partners.

              In 2014, we generated net income of $490.3 million and our year-end diluted book value per share was $38.27, an 11.9% increase for the year. We had a combined ratio of 85.2% and underwriting performance benefitted from profitable growth across our portfolio of insurance and reinsurance business. Favorable reserve releases of $212.6 million, total return on the company's investment portfolio of $265.8 million and successful management of expenses also combined to contribute to our success.

              On May 1, 2014, the shareholders approved a 3-for-1 stock split of the company's common shares. All historical share and per share amounts in this Proxy Statement reflect the effect of the stock split.

-1-

---

Table of Contents

Financial Performance

              The following table contains key financial data for each of the last three fiscal years, including data as of each year end.

Operating Results		2014			2013			2012
		($ in millions, except share, per share and percentage data)
Total Assets		$	12,422		$	11,946		$	12,030
Total Debt and Other Liabilities		$	8,644		$	8,426		$	8,704
Total Shareholders' Equity		$	3,778		$	3,520		$	3,326
Diluted Book Value per Share		$	38.27		$	34.20		$	30.86
Growth in Diluted Book Value per Share		​	11.9%		​	10.8%		​	15.6%
Gross Premiums Written		$	2,935		$	2,739		$	2,239
Net Income		$	490		$	418		$	493
Operating Income		$	415		$	364		$	203
Total Return on Investments		​	3.1%		​	2.6%		​	5.5%
Net Income Return on Average Shareholders' Equity			13.4%			12.2%			15.3%
Operating Return on Average Shareholders' Equity		​	11.4%		​	10.6%		​	6.3%
Combined Ratio(1)			85.2%			86.2%			94.5%
Cash Dividends Paid		$	77		$	47		$	68
Number of Common Shares Outstanding			96,195,482			100,253,646			104,493,343
Weighted Average Common Shares Outstanding- Diluted		​	99,591,773		​	104,865,834		​	111,209,655
Repurchase of Common Shares		$	175		$	175		$	264

---

(1)

A measure of underwriting performance. The combined ratio represents the total cost per $100 of earned premium. A combined ratio below 100% demonstrates underwriting profit while a combined ratio above 100% demonstrates underwriting loss.

Detailed information of our financial and operational performance is contained in our Annual Report on Form 10-K that is included in our 2014 Annual Report accompanying this Proxy Statement. See our Annual Report on Form 10-K for a reconciliation of the non-GAAP financial measures included in the table above.

Company's Performance Relative
to Its Peer Group as of December 31, 2014
(In quartiles. 1=first quartile, the highest level; 4=fourth quartile, the lowest level)

Performance Metric		2014 (one year) Rank			2012-2014 (three year) Rank			2010-2014 (five year) Rank
Diluted Book Value per Share Growth (adjusted for dividends)		​	1		​	1		​	1
Annualized Net Income Return on Average Equity (adjusted for other comprehensive income)			2			1			1
Combined Ratio		​	1		​	1		​	1
Total Shareholder Return			4			1			1

-2-

---

Table of Contents

Shareholder Voting Recommendations

Our Board of Directors unanimously makes the following recommendations:

		Proposal		Vote Recommendation		See Page Number for More Information
Proposal 1		Amend the Articles of Association to Change the Company's Swiss Registered Office		FOR		p. 15
Proposal 2		Amend the Articles of Association to Define the Duties of the Compensation Committee		FOR		p. 15
Proposal 3		Amend the Articles of Association to Define the Company's Compensation Principles		FOR		p. 16
Proposal 4		Amend the Articles of Association to Limit the Notice Period in Employment Agreements with Executive Officers and Agreements with Directors, and to Prohibit Loans and Credit to Executives and Directors		FOR		p. 17
Proposal 5		Amend the Articles of Association to Limit the Number of Outside Board Seats Our Directors and Executives May Hold		FOR		p. 18
Proposal 6		Amend the Articles of Association to Provide for Say-on-Pay Votes Required Under Swiss Law		FOR		p. 19
Proposal 7		Elect the Board of Directors		FOR EACH NOMINEE		p. 20
Proposal 8		Elect the Chairman of the Board of Directors		FOR		p. 31
Proposal 9		Elect the Compensation Committee Members		FOR EACH NOMINEE		p. 31
Proposal 10		Elect the Independent Proxy		FOR		p. 32
Proposal 11		Approve the 2015 Compensation for Executives as Required under Swiss Law		FOR		p. 32
Proposal 12		Approve the 2015 Compensation for Directors as Required under Swiss Law		FOR		p. 35
Proposal 13		Advisory Vote on 2014 Executive Compensation as Required under U.S. Securities Laws		FOR		p. 37
Proposal 14		Approve the 2014 Annual Report and Financial Statements		FOR		p. 38
Proposal 15		Approve the Retention of Disposable Profits		FOR		p. 38
Proposal 16		Approve the Payment of Dividends to Shareholders		FOR		p. 39
Proposal 17		Approve the Cancelling of Treasury Shares		FOR		p. 41
Proposal 18		Elect Deloitte & Touche LLP as Independent Auditor and Deloitte AG as Statutory Auditor		FOR		p. 41
Proposal 19		Elect PricewaterhouseCoopers AG as Special Auditor		FOR		p. 43
Proposal 20		Discharge of the Board of Directors and Executive Officers from Liabilities		FOR		p. 43

-3-

---

Table of Contents

Corporate Governance Highlights

              The company is committed to strong corporate governance, which promotes the long-term interests of shareholders, strengthens the accountability of the board of directors (the "Board") and management and helps build public trust in the company. Highlights include the following:

​	​	​	​	​	​	​	​	​
		Board and Other Governance Information				2015
​	​	​	​	​	​	​	​	​
		Size of Board		​		7		​
		Average Age of Directors				62.7
​		Percentage of Independent Directors		​		86%		​
		Diverse Board (Gender, Experience and Skills)				Yes
​		Majority Voting for Directors		​		Yes		​
		Annual Election of All Directors				Yes
​		Annual Election of Chairman of the Board		​		Yes		​
		Annual Election of Compensation Committee Members				Yes
​		Use of Independent Proxy to Represent Shareholders		​		Yes		​
		No Director Holds More than 3 other Public Company Board Seats				Yes
​		Lead Independent Director		​		Yes		​
		Separate Chairman & CEO				No
​		CEO Holds No Other Public Company Board Seat		​		Yes		​
		Independent Directors Meet Without Management				Yes
​		Annual Board and Committees Self-Evaluations		​		Yes		​
		Annual Equity Grant to Non-Employee Directors				Yes
​		Board Orientation/Education Program		​		Yes		​
		Number of Board Meetings Held in 2014				6
​		Code of Business Conduct and Ethics for Directors and Executives		​		Yes		​
		Stock Ownership Policy for Directors and Senior Management				Yes
​		Disclosure Committee for Financial Reporting		​		Yes		​
		Annual Approval of Executive Compensation				Yes
​		Shareholder Ability to Call Special Meetings		​		Yes		​
		Policy Prohibiting Insider Pledging or Hedging of Company Common Shares				Yes
​	​	​	​	​	​	​	​	​

-4-

---

Table of Contents

Our Director Nominees

              You are being asked to vote on the election of the following seven directors to the Board. All directors are elected annually by a majority of the votes cast. Detailed information about each director's background and key attributes, experience and skills can be found beginning on page 21 of this Proxy Statement.

												Committees
		Age		Director   Since		Primary Occupation		Principal   Skills
Name										Independent		AC		CC		ERC		Exec		IC		N&CG
Barbara T. Alexander		66		2009		Independent Consultant		Corporate Finance, Investment, Strategic Planning		Yes		C		·		·		​		·		​
Scott Carmilani		50		2003		President, CEO and Chairman Allied World Assurance Company Holdings, AG		Insurance and Reinsurance Industry Leadership		No								C
James F. Duffy		71		2006		Former Chairman and CEO The St. Paul Reinsurance Group		Insurance and Reinsurance Industry Leadership		Yes		·		·		​		·		​		·
Bart Friedman		70		2006		Partner Cahill Gordon Reindel LLP		Investment, Corporate Governance		Lead Independent Director				·						·		C
Patrick de Saint-Aignan		66		2008		Former Advisory Director Morgan Stanley		Corporate Finance, Risk Management, Investment		Yes		·		·		C		​		·		​
Eric S. Schwartz		52		2013		CEO and Founder 76 West Holdings		Corporate Finance, Investment		Yes				·						C
Samuel J. Weinhoff		64		2006		Independent Consultant		Corporate Finance, Insurance and Reinsurance, Strategic Planning		Yes		·		C		·		·		·		​

 

C		Chair
AC		Audit Committee		Exec		Executive Committee
CC		Compensation Committee		IC		Investment Committee
ERC		Enterprise Risk Committee		N&CG		Nominating & Corporate Governance Committee

-5-

---

Table of Contents

Executive Compensation Philosophy and Goals

              The Compensation Committee believes that an effective executive compensation program is one that is designed to:

			Reward strong company and individual performance,
			Align the interests of the executive officers with the company's shareholders, and
			Balance the objectives of pay-for-performance and retention.

              The Compensation Committee's objectives for the company's compensation programs include:

			Driving and rewarding employee performance that supports the company's business objectives and financial success;
			Attracting and retaining talented and highly-skilled employees;
			Aligning the interests of the named executive officers with the company's shareholders by:

	·		having a substantial portion of compensation in long-term, performance-based equity awards, a large portion of which is "at risk" with vesting dependent on the company achieving certain performance targets over time, particularly at the senior officer level where such persons can more directly affect the company's financial success;
	·		regularly evaluating the company's compensation programs to help ensure that they do not encourage excessive risk taking;
	·		tying incentive opportunity to a blend of metrics that focus on key company objectives, correlate with the creation of shareholder value and encourage prudent risk taking; and

 

			Remaining competitive with other insurance and reinsurance companies, particularly other insurance and reinsurance companies with which the company competes for talent.

-6-

Table of Contents

PROXY STATEMENT

GENERAL MEETING INFORMATION

-7-

Table of Contents

-8-

Table of Contents

-9-

Table of Contents

·

Abstentions and "broker non-votes" will be counted toward the presence of a quorum at the Annual Shareholder Meeting.



·

"Broker non-votes" are shares held by banks or brokers for which voting instructions have not been received from the beneficial owners or the persons entitled to vote those shares and for which the bank or broker does not have discretionary voting power under rules applicable to broker-dealers. If you own shares through a bank or brokerage firm and you do not instruct your bank or broker how to vote, your bank or broker will nevertheless have discretion to vote your shares on "routine" matters, such as the election of Deloitte & Touche LLP, our independent auditors. More importantly, without instructions from you, your bank or broker will not have discretion to vote on "non-routine" matters, such as the election of directors, the votes on executive compensation, the payment of the dividend to our shareholders and any shareholder proposals.

-10-

Table of Contents

-11-

Table of Contents

-12-

Table of Contents

-13-

Table of Contents

Organizational Matters Required by Swiss Law

Admission to the Annual Shareholder Meeting

              Shareholders who are registered in our share register on the Record Date will receive the Proxy Statement and proxy card from Continental Stock Transfer & Trust Company, our transfer agent. Beneficial owners of shares will receive instructions from their bank, brokerage firm or other nominee acting as shareholder of record to indicate how they wish their shares to be voted. Beneficial owners who wish to vote in person at the Annual Shareholder Meeting are requested to obtain a power of attorney from their bank, brokerage firm or other nominee that authorizes them to vote the shares held by them on their behalf. In addition, you must bring to the Annual Shareholder Meeting an account statement or letter from your bank, brokerage firm or other nominee indicating that you are the owner of the common shares. Shareholders of record registered in our share register are entitled to participate in and vote at the Annual Shareholder Meeting. Each share is entitled to one vote. The exercise of voting rights is subject to the voting restrictions set out in the company's Articles of Association, a summary of which is contained in "— How many votes do I have?" Please see the questions and answers provided under "— General Meeting Information" for further information.

Granting a Proxy

              If you are a shareholder of record please see "— How do I vote?" and "— How do I appoint and vote via an independent proxy if I am a shareholder of record?" above in the Proxy Statement for more information on appointing an independent proxy.

              Registered shareholders who have appointed the independent proxy as a proxy may not vote in person at the Annual Shareholder Meeting or send a proxy of their choice to the meeting unless they revoke or change their proxies. Revocations to the independent proxy must be received by him by no later than 6:00 a.m., local time, on April 30, 2015 either by mail to Buis Buergi AG, Muehlebachstrasse 8, P.O. Box 672, CH-8024 Zurich, Switzerland or by e-mail at proxy@bblegal.ch.

              As indicated on the proxy card, with regard to the items listed on the agenda and without any explicit instructions to the contrary, the independent proxy will vote according to the recommendations of the Board. If new agenda items (other than those on the agenda) or new proposals or motions regarding agenda items set out in the invitation to the Annual Shareholder Meeting are being put forth before the meeting, the independent proxy will vote in accordance with the position of the Board in the absence of other specific instructions.

              Beneficial owners who have not obtained a power of attorney from their bank, brokerage firm or other nominee are not entitled to participate in or vote at the Annual Shareholder Meeting.

Admission office

              The admission office opens on the day of the Annual Shareholder Meeting at 1:30 p.m. local time. Shareholders of record attending the meeting are kindly asked to present their proxy card as proof of admission at the entrance.

Annual Report of Allied World Assurance Company Holdings, AG

              The company's 2014 Annual Report, which accompanies this Proxy Statement, contains the company's audited consolidated financial statements, its audited statutory financial statements prepared in accordance with Swiss law and the remuneration report of the board of directors and executives required under Swiss law. The 2014 Annual Report can be accessed through the company's

-14-

Table of Contents

website at www.awac.com under the "Financial Reports" link located in the section entitled "Investor Relations." Copies of the 2014 Annual Report may be obtained without charge upon written request to the Corporate Secretary, attention: Wayne H. Datz, at Allied World Assurance Company Holdings, AG, Park Tower, 15^th floor, Gubelstrasse 24, 6300 Zug, Switzerland, or via e-mail at secretary@awac.com. The 2014 Annual Report may be physically inspected at the company's headquarters at Park Tower, 15^th floor, Gubelstrasse 24, 6300 Zug, Switzerland.

PROPOSAL 1
AMEND THE ARTICLES OF ASSOCIATION
TO CHANGE THE COMPANY'S SWISS REGISTERED OFFICE

              The company has moved its corporate headquarters from the town of Baar in the Canton of Zug, Switzerland, to the city of Zug in the Canton of Zug, Switzerland. Under Swiss law, and pursuant to paragraph 1(g) of Article 16 of the Articles of Association, the company's shareholders must approve this change to the company's registered office.

              The Board is proposing that the shareholders amend Article 1 of the Articles of Association to reflect that the company's registered office is now located in the city of Zug.

              Pursuant to Swiss law, we are required to submit to you for your approval both the English version and the (authoritative) German version of the proposed amendments to the company's Articles of Association. Upon the approval of this proposal, Article 1 of the Articles of Association will be amended to read as follows:

              If the shareholders do not approve this proposal, the Board may call an extraordinary general meeting of shareholders for reconsideration of the proposal.

              Your Board unanimously recommends a vote FOR the amendment of Article 1 of the Articles of Association as described in this proposal.

PROPOSAL 2
AMEND THE ARTICLES OF ASSOCIATION
TO DEFINE THE DUTIES OF THE COMPENSATION COMMITTEE

              Pursuant to changes under Swiss law that became effective as of January 1, 2014 (the "Ordinance"), we are required to amend our Articles of Association to define the duties of the Compensation Committee. The company is proposing that the shareholders adopt a new Article 20a in order to comply with these requirements of the Ordinance.

              The Compensation Committee members are elected annually, which was previously approved by shareholders at the 2014 Annual Shareholder Meeting. As required by the Ordinance, Article 20a provides: (i) that the Chair of the Compensation Committee be elected by the Board; (ii) that vacancies

-15-

Table of Contents

on the Compensation Committee be filled at the Board's discretion, with such appointee to serve until the next annual shareholder meeting; and (iii) the duties of the Compensation Committee, which are set forth in the Compensation Committee's Charter that is approved by the Board of Directors. As noted in "Proposal 7 — Election of Directors — Board Leadership Structure" below, a copy of the Compensation Committee Charter is available on our website at www.awac.com under "Investor Relations — Corporate Information — Governance Documents".

              Pursuant to Swiss law, we are required to submit to you for your approval both the English version and the (authoritative) German version of the proposed amendment to the Articles of Association. The foregoing summary of the proposed changes to the company's current Articles of Association is qualified in its entirety by express reference to the text of Article 20a of the Articles of Association, a copy of which has been marked to indicate changes from the company's current Articles of Association and is attached as Appendix B to this Proxy Statement.

              If the shareholders do not approve this proposal, the Board may call an extraordinary general meeting of shareholders for reconsideration of the proposal.

              Your Board unanimously recommends a vote FOR the adoption of Article 20a of the Articles of Association as described in this proposal and set forth in Appendix B.

PROPOSAL 3
AMEND THE ARTICLES OF ASSOCIATION
TO DEFINE THE COMPANY'S COMPENSATION PRINCIPLES

              Pursuant to the Ordinance, we are required to amend our Articles of Association to define the principles of compensation, including performance-based compensation and equity grants. The company is proposing that shareholders adopt a new Article 20b to the company's Articles of Association to comply with Swiss law and define such principles.

              The company's principles of compensation, as recommended by the Compensation Committee and approved by the Board, are discussed in detail in "Executive Compensation — Compensation Discussion and Analysis" beginning on page 50 of this Proxy Statement (the "CD&A"). Proposed Article 20b (i) specifies the components of compensation that may be paid to directors and executives officers; and (ii) provides for the payment of retirement, health and welfare benefits, all consistent with the company's current pay practices as discussed in this Proxy Statement. Article 20b also permits the company to purchase director and officer liability insurance and other liability insurance and that the payment of the premium for such insurance shall not be deemed compensation to the directors and executive officers. The company believes that such liability insurance coverage is an important element of its overall risk management program and that this coverage is provided by the company's competitors. Proposed Article 20b also specifies that any additional shares received by the directors or executive officers as shareholders of the company shall not be deemed compensation.

              Pursuant to the Ordinance, the Board is also required to annually issue a compensation report detailing the compensation of the company's directors and executives. The Ordinance states that this obligation of the Board may not be delegated. The company is proposing an amendment to Article 19(6) to reflect this requirement. The Ordinance further requires that the Board may delegate the management of the company's business only to the directors or to one or more natural persons, as opposed to corporations and other legal entities. Accordingly, the company is proposing a clarifying amendment to Article 18(b) to allow delegation only to natural persons.

-16-

Table of Contents

              Pursuant to Swiss law, we are required to submit to you for your approval both the English version and the (authoritative) German version of the proposed amendment to the Articles of Association. The foregoing summary of the proposed changes to the company's current Articles of Association is qualified in its entirety by express reference to the texts of Article 20b, Article 18(b), and Article 19(6) of the Articles of Association, a copy of which has been marked to indicate changes from the company's current Articles of Association and is attached as Appendix B to this Proxy Statement.

              If the shareholders do not approve this proposal, the Board may call an extraordinary general meeting of shareholders for reconsideration of the proposal.

              Your Board unanimously recommends a vote FOR the adoption of Article 20b of the Articles of Association and FOR the related amendments to Articles 18(b) and Article 19(6) as described in this proposal and set forth in Appendix B.

PROPOSAL 4
AMEND THE ARTICLES OF ASSOCIATION TO LIMIT THE NOTICE PERIOD IN
EMPLOYMENT AGREEMENTS WITH EXECUTIVE OFFICERS AND AGREEMENTS
WITH DIRECTORS, AND TO PROHIBIT LOANS AND
CREDIT TO EXECUTIVES AND DIRECTORS

              Pursuant to the Ordinance, we are required to amend our Articles of Association to limit the "notice period" (as discussed below) in any compensation-related agreements we enter into with our directors and executive officers. We are also required to prohibit any loans or credit to our directors and executive officers. The company is proposing that shareholders adopt a new Article 20c to the Articles of Association to comply with the Ordinance.

              Limitation on Notice Period

              The "notice period" is the period of time after the company or the respective director or executive has given notice of termination of his or her agreement and before the effective time of termination of his or her employment with the company. During the notice period, the company is required to continue to pay a director's or executive's salary, health and welfare benefits and other compensation and the respective director or executive generally has to continue to fulfill his or her duties towards the company. With respect to service agreements with directors or employment agreements with executives, it is common in Europe that the notice period is transferred into a "garden leave", which means that the company releases the director or executive from his or her duties but continues to pay compensation for the remaining notice period. The Ordinance provides that the notice period of the service agreements with directors and employment agreements with executives that form the basis for their compensation may not exceed 12 months. The Board is proposing that the company's Articles of Association limit the notice period of any compensation-related agreements with directors and any employment agreements with executive officers to 12 months.

              Proposed Article 20c a) states that the company may enter into service agreements with directors and employment agreements with executives for a fixed term or for an indefinite term so long as the notice period under such agreements does not exceed 12 months. The company does not currently, and in the future does not plan to, enter into service agreements with its directors. If the shareholders approve this Proposal 4, employment agreements with the company's key executives will be amended accordingly before December 31, 2015.

-17-

Table of Contents

              Limit on Loans and Credit to Directors and Executives

              The company does not currently, and in the future does not plan to, extend loans or credit to its directors or executives. The Board is proposing that the company's Articles of Association specify that the company does not engage in such practice. Accordingly, proposed Article 20c b) states that as a rule, the company does not grant any loans or credit to directors or officers.

              Pursuant to Swiss law, we are required to submit to you for your approval both the English version and the (authoritative) German version of the proposed amendment to the Articles of Association. The foregoing summary of the proposed changes to the company's current Articles of Association is qualified in its entirety by express reference to the text of Article 20c of the Articles of Association, a copy of which has been marked to indicate changes from the company's current Articles of Association and is attached as Appendix B to this Proxy Statement.

              If the shareholders do not approve this proposal, the Board may call an extraordinary general meeting of shareholders for reconsideration of the proposal.

              Your Board unanimously recommends a vote FOR the adoption of Article 20c of the Articles of Association as described in this proposal and set forth in Appendix B.

PROPOSAL 5
AMEND THE ARTICLES OF ASSOCIATION
TO LIMIT THE NUMBER OF OUTSIDE BOARD SEATS
OUR DIRECTORS AND EXECUTIVES MAY HOLD

              Pursuant to the Ordinance, we are required to amend our Articles of Association to limit the number of outside board seats that directors and executive officers can hold. While our Articles of Association currently do not provide for a limit to the number of outside board seats that our directors can maintain, the Board expects each director and executive officer to ensure that any commitment they make to other organizations will not interfere with their ability to devote sufficient time and attention to company matters. In addition, it is the policy of the Board that each director not serve on more than three additional public company boards of directors and that a director notify the Chairman of the Board prior to accepting any invitation to serve on another public company board in order to ensure that conflicts of interest, antitrust issues or a failure to maintain independence does not arise. It is the policy of the company that all executive officers obtain written approval before serving as a director of a for-profit corporation.

              The Board is proposing that the shareholders adopt a new Article 20d to the company's Articles of Association that would limit the number of outside director seats that directors can hold to ten, of which not more than three may be with an additional public company, and the number of outside director seats that executives can hold to five, of which not more than one may be with an additional public company. Any outside board seat that is held by a director or an executive officer with any subsidiary or affiliate of the company shall not count against these limits. Outside board seats that are held by a director or executive officer at the request of the company or with a non-profit organization shall each be limited to no more than ten such directorships.

              Pursuant to Swiss law, we are required to submit to you for your approval both the English version and the (authoritative) German version of the proposed amendment to the Articles of Association. The foregoing summary of the proposed changes to the company's current Articles of Association is qualified in its entirety by express reference to the texts of Article 20d of the Articles of

-18-

Table of Contents

Association, a copy of which has been marked to indicate changes from the company's current Articles of Association and is attached as Appendix B to this Proxy Statement.

              If the shareholders do not approve this proposal, the Board may call an extraordinary general meeting of shareholders for reconsideration of the proposal.

              Your Board unanimously recommends a vote FOR the adoption of Article 20d of the Articles of Association as described in this proposal and set forth in Appendix B.

PROPOSAL 6
AMEND THE ARTICLES OF ASSOCIATION
TO PROVIDE FOR SAY-ON-PAY VOTES REQUIRED UNDER SWISS LAW

              The Ordinance requires the company to hold binding shareholder say-on-pay votes for director and executive compensation. The Ordinance also requires amendments to our Articles of Association to define the details regarding these binding say-on-pay votes. The Ordinance mandates that shareholders vote separately on the aggregate compensation of directors as a group and on the aggregate compensation of executives as a group. Under the Ordinance, organizations may conduct these binding say-on-pay votes either prospectively or retrospectively. That is, companies may choose whether shareholders vote to approve the actual compensation that has already been paid by the company or whether shareholders approve a compensation budget that is proposed to be paid by the company for a specified period. If the company conducts prospective say-on-pay votes, it must specify the fiscal year, calendar year or other period of the time for which shareholders are being asked to approve the compensation budget (the "Approval Period").

              In accordance with SEC requirements, each year since 2011, the company has provided shareholders with the opportunity to cast an advisory vote on executive compensation retrospectively. Each year, these advisory votes have received overwhelming shareholder approval with over 98% of the votes cast in favor of the company's say-on-pay proposal. The Board therefore proposes that the company's Articles of Association provide that the binding say-on-pay votes required by the Ordinance be conducted prospectively in order to alleviate any uncertainty that may occur if the shareholders did not approve the binding say-on-pay votes required by the Ordinance, but did approve the advisory say-on-pay vote conducted pursuant to SEC requirements, or vice versa. The Board is proposing that the Approval Period applicable to each say-on-pay vote be the current calendar year. Accordingly, the Approval Period for the say-on-pay votes that will be conducted at this Annual Shareholder Meeting, as described in Proposals 11 and 12 in this Proxy Statement, will be the 2015 calendar year.

              The Ordinance also provides that, if a company elects to conduct prospective binding say-on-pay votes, the Articles of Association may provide for a specified additional amount to be available for the compensation of executives who are appointed after shareholder approval of the say-on-pay votes. This additional amount may be paid to such executives without any further shareholder action, but only if the aggregate amount approved by the shareholders for executives is insufficient to compensate the newly appointed executive(s). The Board is proposing that the Articles of Association include a provision that an additional amount of up to 40% of the previously approved total aggregate compensation of executives be available for the compensation of each new executive appointed after the say-on-pay vote for 2015.

              The Ordinance also requires that the Articles of Association provide details regarding how to proceed if shareholders do not approve the say-on-pay votes required by the Ordinance. The Board proposes that the Articles of Association provide that in such event, the Board may call an extraordinary meeting of shareholders in order to submit a new proposal for shareholder approval.

-19-

Table of Contents

              The Board is proposing that the shareholders adopt a new Article 20e to the company's Articles of Association that would define the details regarding the binding say-on-pay votes. The proposed Article 20e would also clarify that: (i) amounts paid to directors and executives as reimbursement of business expenses incurred in connection with their service to the company will not constitute compensation subject to shareholder approval; (ii) directors and executives may receive compensation for services rendered to the company's subsidiaries, which may be paid by the company or its subsidiaries, if such amounts are included in the total aggregate amount of compensation approved by shareholders; and (iii) compensation approved by the shareholders may be paid in whole or in part after the Approval Period for which it was approved if it is paid for the performance of services during the Approval Period for which it was approved. In addition, the Board is proposing to adopt a new Article 9(5) to state specifically that shareholders must approve the compensation amount for the directors and the executive officers. The Board is also proposing that Article 17 of the Articles of Association be amended to delete paragraph c) since the Ordinance requires that the compensation of directors be subject to shareholder approval rather than determined by the Board.

              Pursuant to Swiss law, we are required to submit to you for your approval both the English version and the (authoritative) German version of the proposed amendment to the Articles of Association. The foregoing summary of the proposed changes to the company's current Articles of Association is qualified in its entirety by express reference to the texts of Article 9(5) and Article 20e of the Articles of Association, a copy of which has been marked to indicate changes from the company's current Articles of Association and is attached as Appendix B to this Proxy Statement.

              If the shareholders do not approve this proposal, the Board may call an extraordinary general meeting of shareholders for reconsideration of the proposal.

              Your Board unanimously recommends a vote FOR the adoption of Article 9(5) and Article 20e and the deletion of paragraph c) of Article 17 of the Articles of Association as described in this proposal and set forth in Appendix B.

PROPOSAL 7
ELECT THE BOARD OF DIRECTORS

              Each member of our Board is being nominated for election at this Annual Shareholder Meeting. Each of the nominees is a current member of the Board and was recommended for appointment to the Board by the Nominating & Corporate Governance Committee to serve until the Annual Shareholder Meeting in 2016.

              Your Board unanimously recommends a vote FOR each of the nominees as listed on the enclosed proxy card. It is not expected that any of the nominees will become unavailable for election as a director but, if any nominee should become unavailable prior to the meeting, proxies will be voted in accordance with the general instructions provided on the proxy card with regard to such other person as your Board shall recommend and nominate. In the absence of other specific instructions, proxies will be voted as your Board shall recommend.

              The biography of each nominee below contains information regarding the person's service as a director on the Board, his or her business experience, director positions at other companies held currently or at any time during the last five years, and their applicable experiences, qualifications, attributes and skills. Mr. Scott Hunter, a current director, is retiring from the Board and is not a nominee for reelection.

-20-

Table of Contents

      Nominees for Election

-21-

Table of Contents

-22-

Table of Contents

-23-

Table of Contents

-24-

Table of Contents

Board and Committee Membership⁽¹⁾

Director Independence

              The Board has determined that Ms. Alexander and Messrs. Duffy, Friedman, Hunter, de Saint-Aignan, Schwartz and Weinhoff are independent directors under the listing standards of the New York Stock Exchange (the "NYSE"). We require that a majority of our directors meet the criteria for independence under applicable law and the rules of the NYSE. The Board has adopted a policy to assist it and the Nominating & Corporate Governance Committee in their determination as to whether a nominee or director qualifies as independent. This policy contains categorical standards for determining independence and includes the independence standards required by the SEC and the NYSE, as well as standards published by institutional investor groups and other corporate governance experts. In making its determination of independence, the Board applied these standards for director independence and determined that no material relationship existed between the company and these directors. A copy of the Board Policy on Director Independence is attached as Appendix A to this Proxy Statement.

-25-

Table of Contents

Meetings and Committees of the Board

              During the year ended December 31, 2014, there were six meetings of our Board (including regularly scheduled and special meetings), six meetings of the Audit Committee, four meetings of the Compensation Committee, five meetings of the Enterprise Risk Committee, no meeting of the Executive Committee, four meetings of the Investment Committee and three meetings of the Nominating & Corporate Governance Committee. Each of our directors attended at least 75% of the aggregate number of Board meetings and committee meetings of which he or she was a member during the period he or she served on the Board. Our non-management directors meet separately from the other directors in an executive session at least quarterly. Mr. Friedman, our Vice Chairman of the Board and Lead Independent Director, or his designee, served as the presiding director of the executive sessions of our non-management and independent directors held in 2014. The Lead Independent Director also has the authority to call meetings of the independent directors or full Board.

Board Leadership Structure

              The Board has chosen a leadership structure that combines the role of the Chief Executive Officer and the Chairman of the Board while also having a Lead Independent Director. The Lead Independent Director assumes many of the responsibilities typically held by a non-executive chairman of the board and a list of his responsibilities is provided in the chart below. The company's rationale for combining the Chief Executive Officer and Chairman of the Board positions relates principally to the Board's belief that at this stage of our development and continued global expansion, the company and its shareholders will be best served if the Chairman is in close proximity to the senior management team on a regular and continual basis.