EXHIBIT 10.39

 

Director Compensation

 

Under the ACE Limited 2004 Long-Term Incentive Plan, director compensation,
non-management directors receive $150,000 per year for their service as
directors. The Company pays 60% of this fee in the form of restricted stock
units having a fair market value, based on the value of the Company’s Ordinary
Shares, of $90,000. Beginning with the 2004 annual general meeting, these stock
units are awarded at the annual general meeting and will vest at the next annual
general meeting. The remaining $60,000 of the annual fee to directors are paid
in cash quarterly, following the general meeting. Committee chairmen receive
committee chair retainers as follows: Audit—$20,000; Compensation—$10,000; and
other—$5,000. The Lead Director receives a retainer of $15,000, which is in
addition to any retainer received as a committee chairman. All members of the
Audit Committee, other than the chairman, receive a premium of $10,000 per year
and all members of the Compensation Committee, other than the chairman, $5,000
per year. Directors are not paid fees for attending regular Board or committee
meetings, but in extraordinary circumstances requiring many meetings, may be
paid an additional $2,000 fee for each special Board meeting attended, at the
discretion of the Chairman of the Board. The premiums for committee
chairmanships, Lead Director, Audit or Compensation Committee service and
special Board meeting fees is paid quarterly in cash. Directors may elect to
receive all of their compensation (other than for special meetings) in the form
of stock units issued on an annual basis. Ordinary Shares will be issued for
stock units six months after a director’s termination from the Board. Until such
Ordinary Shares are issued, the stock units awarded to directors may not be sold
or transferred. When the Company pays dividends on its stock, it will issue
stock units to directors equivalent in value to the dividend payments that they
would have received if they held stock rather than stock units.

 

In addition to the above described compensation, the Company has a matching
contribution program for non-management directors pursuant to which the Company
will match director charitable contributions to registered charities, churches
or schools up to a maximum of $10,000 per year, with a $5,000 maximum per
organization.