Exhibit 10.1
Summary of Fiscal 2006 Senior Management Bonus Plan for Executive Officers
(October 3, 2005)
The key terms of ACE’s senior management bonus plan for its four current
executive officers for its fiscal year ending June 30, 2006 (the “Bonus Plan”)
are:

•   An annual bonus may be earned by an executive officer based on:

  •   ACE’s financial performance during fiscal 2006, measured by its diluted
earnings per share (the “Financial Performance Component”); and     •   The
executive officer’s performance during fiscal 2006 as determined in the
discretion of the Compensation Committee, including by performance of personal
(financial or non-financial) goals established by the Compensation Committee,
which are intended to enhance ACE’s long-term business (the “Discretionary
Component”).

•   The Financial Performance Component is the same for all of the executive
officers. The Discretionary Component is different for each executive officer.  
•   75% of each executive officer’s target total bonus opportunity relates to or
is based on the Financial Performance Component, and 25% of his target total
bonus opportunity relates to or is based on the Discretionary Component. Because
the Financial Performance Component and the Discretionary Component are
separate, an executive officer could earn a partial bonus if there is
performance only under either the Financial Performance Component or the
Discretionary Component, but not both.   •   The target total bonus opportunity
for each executive officer is a percentage of his annual salary for fiscal 2006.
For Jay B. Shipowitz, President and Chief Executive Officer, the target is 75%
(i.e., $375,000); for Barry M. Barron, Executive Vice President and Chief
Operations Officer, the target is 50% (i.e., $160,000); for William S.
McCalmont, Executive Vice President and Chief Financial Officer, the target is
50% (i.e., $145,500); and for Walter E. Evans, Senior Vice President and General
Counsel, the target is 40% (i.e., $108,000).   •   Each executive officer could
earn a bonus under the Financial Performance Component or under the
Discretionary Component, or both, that is less than or greater than his target
bonus related to or based on that component or those components. If performance
does not correspond to at least a target bonus, but is nevertheless such that
the Compensation Committee deems it appropriate for a bonus under the Bonus
Plan, then an executive officer could receive a bonus less than his target
bonus. If performance exceeds that corresponding to a target bonus, then an
executive officer could receive a bonus that exceeds his target bonus.   •   The
Compensation Committee will evaluate performance and award bonuses (if earned)
to all of the executive officers under the Bonus Plan. The Compensation
Committee received recommendations of the Chief Executive Officer regarding the
bonus opportunities for the other executive officers and expects to obtain
recommendations from the Chief Executive Officer regarding the performance of,
and (if earned) bonuses payable to, the other executive officers. The Bonus Plan
does not contain any limits on the Compensation Committee’s discretion.