Exhibit 10.4

For Awards made after August 16, 2006

Restricted Stock Unit Award Terms

under the

ACE Limited 2004 Long-Term Incentive Plan

The Participant has been granted a Restricted Stock Unit Award by ACE Limited
(the “Company”) under the ACE Limited 2004 Long-Term Incentive Plan (the
“Plan”). The Restricted Stock Unit Award shall be subject to the following
Restricted Stock Unit Award Terms:

1. Terms of Award. Subject to the following Restricted Stock Unit Award Terms,
the Participant has been granted the right to receive shares of Stock of the
Company (“Units”) as of the Delivery Date. Each “Unit” represents the right to
receive one share of Stock. The following words and phrases used in these
Restricted Stock Unit Award Terms shall have the meanings set forth in this
paragraph 1:

(a) The “Participant” is the individual recipient of the Unit Award on the
specified Grant Date.

(b) The “Grant Date” is [Insert the date].

(c) The number of “Units” shall be that number of Units awarded to the
Participant on the Grant Date as reflected in the corporate records and shown in
the Record-Keeping System in the Participant’s individual account records.

(d) The “Delivery Date” shall be end of the Restricted Period, with respect to
the applicable Units.

(e) Other words and phrases used in these Restricted Stock Unit Award Terms are
defined pursuant to paragraph 9 or elsewhere in these Restricted Stock Unit
Award Terms.

2. Restricted Period. Subject to the limitations of these Restricted Stock Unit
Award Terms, the “Restricted Period” for each Installment of Units shall begin
on the Grant Date and end as described in the following schedule (but only if
the Date of Termination has not occurred before the end of the Restricted
Period):

 

INSTALLMENT  

RESTRICTED

PERIOD WILL

END ON:

 1/4 of Restricted Stock Units   One year anniversary of the Grant Date  1/4 of
Restricted Stock Units   Two year anniversary of the Grant Date  1/4 of
Restricted Stock Units   Three year anniversary of the Grant Date  1/4 of
Restricted Stock Units   Four year anniversary of the Grant Date

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The Restricted Period shall end prior to the date specified in the foregoing
schedule to the extent set forth below:

(a) For Installments as to which the Restricted Period has not ended prior to
the Date of Termination, the Restricted Period for such Installments shall end
upon the Participant’s Date of Termination, if the Date of Termination occurs by
reason of the Participant’s death.

(b) For Installments as to which the Restricted Period has not ended prior to
the Date of Termination, the Restricted Period for such Installments shall end
upon the Participant’s Date of Termination, if the Date of Termination occurs by
reason of the Participant’s Long-Term Disability.

(c) For Installments as to which the Restricted Period has not ended prior to
the date of a Change in Control, the Restricted Period for such Installments
shall end upon a Change in Control, provided that such Change in Control occurs
on or before the Date of Termination.

3. Transfer and Forfeiture of Shares. Except as otherwise determined by the
Committee in its sole discretion, the Participant shall forfeit the Units as of
the Participant’s Date of Termination, if such Date of Termination occurs prior
to the end of the Restricted Period which applies to those Installments. If the
Participant’s Date of Termination has not occurred prior to the last day of the
Restricted Period with respect to any Installment of the Units, then, as soon as
administratively practicable following the end of such Restricted Period, that
Installment of Units shall be delivered to the Participant in the form of Stock
free of all restrictions.

4. Withholding. All deliveries and distributions under these Restricted Stock
Unit Award Terms are subject to withholding of all applicable taxes. At the
election of the Participant, and subject to such rules and limitations as may be
established by the Committee from time to time, such withholding obligations may
be satisfied through the surrender of shares of Stock which the Participant
already owns, or to which the Participant is otherwise entitled under the Plan.

5. Transferability. Except as otherwise provided by the Committee, the
Restricted Stock Unit Award may not be sold, assigned, transferred, pledged or
otherwise encumbered during the Restricted Period.

6. Dividends. The Participant shall be permitted to receive cash payments equal
to the dividends and distributions paid on shares of Stock to the same extent as
if each Unit was a Share of Stock, and those shares were not subject to the
restrictions imposed by this Agreement and the Plan; provided, however, that no
dividends or distributions shall be payable to or for the benefit of the
Participant with respect to record dates for such dividends or distributions
occurring on or after the date, if any, on which the Participant has forfeited
the Units.

7. Voting. The Participant shall not be a shareholder of record with respect to
the Units and shall have no voting rights with respect to the Units during the
Restricted Period.

 

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8. Participant’s Rights to Shares. Prior to the delivery of shares of Stock
which are to be delivered pursuant to this Agreement,(a) the Participant shall
not be treated as owner of the shares, shall not have any rights as a
shareholder as to those shares, and shall have only a contractual right to
receive them, unsecured by any assets of the Company or its subsidiaries; and
(b) the Participant’s right to receive such shares will be subject to the
adjustment provisions relating to mergers, reorganizations, and similar events
set forth in the Plan.

9. Definitions. For purposes of these Restricted Stock Unit Award Terms, words
and phrases shall be defined as follows:

(a) Change in Control. The term “Change in Control” shall be defined as set
forth in the Plan.

(b) Date of Termination. A Participant’s “Date of Termination” means, with
respect to an employee, the date on which the Participant’s employment with the
Company and Related Companies terminates for any reason, and with respect to a
Director, the date immediately following the last day on which the Participant
serves as a Director; provided that a Date of Termination shall not be deemed to
occur by reason of a Participant’s transfer of employment between the Company
and a Related Company or between two Related Companies; further provided that a
Date of Termination shall not be deemed to occur by reason of a Participant’s
cessation of service as a Director if immediately following such cessation of
service the Participant becomes or continues to be employed by the Company or a
Related Company, nor by reason of a Participant’s termination of employment with
the Company or a Related Company if immediately following such termination of
employment the Participant becomes or continues to be a Director; and further
provided that a Participant’s employment shall not be considered terminated
while the Participant is on a leave of absence from the Company or a Related
Company approved by the Participant’s employer.

(c) Director. The term “Director” means a member of the Board, who may or may
not be an employee of the Company or a Related Company.

(d) Long-Term Disability. A Participant shall be considered to have a “Long-Term
Disability” if the Participant is determined to be eligible for long-term
disability benefits under the long-term disability plan in which the Participant
participates and which is sponsored by the Company or a Related Company; or if
the Participant does not participate in a long-term disability plan sponsored by
the Company or a Related Company, then the Participant shall be considered to
have a “Long-Term Disability” if the Committee determines, under standards
comparable to those of the Company’s long-term disability plan, that the
Participant would be eligible for long-term disability benefits if he or she
participated in such plan.

(e) Record-Keeping System. The term “Record-Keeping System” means the
record-keeping system developed and maintained by third parties contracted by
the Company to keep records and facilitate Participant interfaces with respect
to the Plan and awards granted thereunder.

 

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10. Plan Definitions. Except where the context clearly implies or indicates the
contrary, a word, term, or phrase used in the Plan is similarly used in these
Restricted Stock Unit Award Terms.

11. Heirs and Successors. The Restricted Stock Unit Award Terms shall be binding
upon, and inure to the benefit of, the Company and its successors and assigns,
and upon any person acquiring, whether by merger, consolidation, purchase of
assets or otherwise, all or substantially all of the Company’s assets and
business. If any benefits deliverable to the Participant under these Restricted
Stock Unit Award Terms have not been delivered at the time of the Participant’s
death, such benefits shall be delivered to the Designated Beneficiary, in
accordance with the provisions of these Restricted Stock Unit Award Terms and
the Plan. The “Designated Beneficiary” shall be the beneficiary or beneficiaries
designated by the Participant in a writing filed with the Committee in such form
and at such time as the Committee shall require. If a deceased Participant fails
to designate a beneficiary, or if the Designated Beneficiary does not survive
the Participant, any rights that would have been exercisable by the Participant
and any benefits distributable to the Participant shall be distributed to the
legal representative of the estate of the Participant. If a deceased Participant
designates a beneficiary and the Designated Beneficiary survives the Participant
but dies before the complete distribution of benefits to the Designated
Beneficiary under these Restricted Stock Unit Award Terms, then any benefits
distributable to the Designated Beneficiary shall be distributed to the legal
representative of the estate of the Designated Beneficiary.

12. Administration. The authority to manage and control the operation and
administration of these Restricted Stock Unit Award Terms shall be vested in the
Committee, and the Committee shall have all powers with respect to these
Restricted Stock Unit Award Terms as it has with respect to the Plan. Any
interpretation of these Restricted Stock Unit Award Terms by the Committee and
any decision made by it with respect to these Restricted Stock Unit Award Terms
are final and binding on all persons.

13. Plan and Corporate Records Govern. Notwithstanding anything in these
Restricted Stock Unit Award Terms to the contrary, these Restricted Stock Unit
Award Terms shall be subject to the terms of the Plan, a copy of which may be
obtained by the Participant from the office of the Secretary of the Company; and
these Restricted Stock Unit Award Terms are subject to all interpretations,
amendments, rules and regulations promulgated by the Committee from time to time
pursuant to the Plan. Notwithstanding anything in the Restricted Stock Unit
Terms to the contrary, in the event of any discrepancies between the corporate
records regarding this award and the Record-Keeping System, the corporate
records shall control.

14. Not An Employment Contract. The Restricted Stock Unit Award will not confer
on the Participant any right with respect to continuance of employment or other
service with the Company or any Related Company, nor will it interfere in any
way with any right the Company or any Related Company would otherwise have to
terminate or modify the terms of such Participant’s employment or other service
at any time.

15. Notices. Any written notices provided for in these Restricted Stock Unit
Award Terms or the Plan shall be in writing and shall be deemed sufficiently
given if either hand delivered or if sent by fax or overnight courier, or by
postage paid first class mail. Notices sent

 

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by mail shall be deemed received three business days after mailing but in no
event later than the date of actual receipt. Notices shall be directed, if to
the Participant, at the Participant’s address indicated by the Company’s
records, or if to the Company, at the Company’s principal executive office.

16. Fractional Shares. In lieu of issuing a fraction of a share, resulting from
an adjustment of the Restricted Stock Unit Award pursuant to paragraph 5.2(f) of
the Plan or otherwise, the Company will be entitled to pay to the Participant an
amount equal to the fair market value of such fractional share.

17. Amendment. The Restricted Stock Unit Award Terms may be amended in
accordance with the provisions of the Plan, and may otherwise be amended by
written agreement of the Participant and the Company without the consent of any
other person.

IN WITNESS WHEREOF, the Company has caused these presents to be executed in its
name and on its behalf, all as of the Grant Date.

 

ACE LIMITED By:  

 

Its:  

 

 

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