Exhibit 10.10

 

THE CHUBB CORPORATION
LONG-TERM STOCK INCENTIVE PLAN
FOR NON-EMPLOYEE DIRECTORS (2004)

 

PERFORMANCE SHARE AWARD AGREEMENT

 

This PERFORMANCE SHARE AWARD AGREEMENT dated as of April 27, 2005, is by and
between The Chubb Corporation (the “Corporation”) and [            ] (the
“Participant”), pursuant to The Chubb Corporation Long-Term Stock Incentive Plan
for Non-Employee Directors (2004) (the “Plan”).  Capitalized terms that are not
defined herein shall have the same meanings given to such terms in the Plan.  If
any provision of this Agreement conflicts with any provision of the Plan (as
either may be interpreted from time to time by the Committee), the Plan shall
control.

 

WHEREAS, pursuant to the provisions of the Plan, the Participant has been
granted Performance Shares; and

 

WHEREAS, the Participant and the Corporation desire to enter into this Agreement
to evidence and confirm the grant of such Performance Shares on the terms and
conditions set forth herein.

 

NOW THEREFORE, the Participant and the Corporation agree as follows:

 

1.                                       GRANT OF PERFORMANCE SHARES.  PURSUANT
TO THE PROVISIONS OF THE PLAN, THE CORPORATION ON THE DATE SET FORTH ABOVE (THE
“GRANT DATE”) HAS GRANTED AND HEREBY EVIDENCES THE GRANT TO THE PARTICIPANT,
SUBJECT TO THE TERMS AND CONDITIONS SET FORTH HEREIN AND IN THE PLAN, OF AN
AWARD OF [            ]  PERFORMANCE SHARES (THE “AWARD”). (1)

 

2.                                       PAYMENT OF EARNED PERFORMANCE SHARES.

 

(A)                                  SETTLEMENT OF PERFORMANCE SHARES.  SUBJECT
TO THE PROVISIONS OF THIS SECTION 2 AND SECTION 3(E), THE PAYMENT VALUE OF EACH
PERFORMANCE SHARE COVERED BY THE AWARD WHICH THE COMMITTEE DETERMINES, IN
WRITING, TO BE EARNED PURSUANT TO SECTION 3 BELOW SHALL BE PAID BY THE
CORPORATION AS SOON AS ADMINISTRATIVELY PRACTICABLE AFTER (BUT NO LATER THAN 2½
MONTHS AFTER THE CALENDAR

 

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(1)  The number of Performance Shares shall be equal to the quotient of (i)
$67,500 divided by (ii) the average of the high and low trading prices of the
Stock on the Grant Date, rounded up to the nearest whole number.

 

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YEAR END COINCIDENT WITH) THE END OF THE PERFORMANCE CYCLE DESCRIBED IN
SECTION 3(A).  PAYMENTS HEREUNDER SHALL BE MADE IN CASH, SHARES OF STOCK, OR A
COMBINATION THEREOF, AS DETERMINED BY THE COMMITTEE IN ITS SOLE DISCRETION.

 

(B)                                 VOLUNTARY DEFERRAL.  NOTWITHSTANDING THE
PROVISIONS OF SECTION 2(A), THE PARTICIPANT MAY ELECT, BY ELECTION FILED WITH
THE CORPORATION (AND ON A FORM ACCEPTABLE TO THE COMMITTEE) NOT LATER THAN
JUNE 30, 2007 AND SUBJECT TO SUCH TERMS AND CONDITIONS AS THE COMMITTEE MAY
SPECIFY, TO HAVE ANY PAYMENT THAT MAY BECOME DUE IN RESPECT OF PERFORMANCE
SHARES COVERED BY THE AWARD DEFERRED UNTIL SUCH LATER TIME AS SHALL BE SPECIFIED
IN SUCH ELECTION (OR, IF APPLICABLE, THE DATE DETERMINED PURSUANT TO
SECTION 2(C)).

 

(C)                                  MANDATORY DEFERRAL OF PAYMENT OF EARNED
PERFORMANCE SHARES.  NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 2(A) OR 2(B)
TO THE CONTRARY (UNLESS THE PAYMENT DATE ELECTED PURSUANT TO SECTION 2(B) IS
LATER THAN THE PAYMENT DATE SPECIFIED HEREIN, IN WHICH CASE SECTION 2(B) SHALL
CONTROL), IF THE CORPORATION’S ENDING AVERAGE VALUE IS LESS THAN THE
CORPORATION’S BEGINNING AVERAGE VALUE (AS SUCH TERMS ARE DEFINED IN
SECTION 3(C)), NO SETTLEMENT SHALL BE MADE IN RESPECT OF ANY PERFORMANCE SHARES
EARNED IN ACCORDANCE WITH SECTION 3 UNTIL THE FIRST DATE THE PARTICIPANT HAS
CEASED TO BE A MEMBER OF THE BOARD OF DIRECTORS AND HAS SEPARATED FROM SERVICE
FROM THE CORPORATION AND ALL OTHER MEMBERS OF THE CORPORATION’S CONTROLLED GROUP
OF ENTITIES.  ONCE THE CONDITION DESCRIBED IN THE IMMEDIATELY PRECEDING SENTENCE
HAS BEEN SATISFIED, SETTLEMENT SHALL OCCUR AS SOON AS PRACTICABLE THEREAFTER, IN
CASH, SHARES OF STOCK, OR A COMBINATION THEREOF, AS DETERMINED BY THE COMMITTEE
IN ITS SOLE DISCRETION.

 

3.                                       VESTING CRITERIA APPLICABLE TO
PERFORMANCE SHARES.

 

(A)                                  PERFORMANCE CYCLE.  THE PERFORMANCE CYCLE
FOR THIS AWARD SHALL COMMENCE ON MAY 1, 2005, AND SHALL END ON DECEMBER 31,
2007.

 

(B)                                 PERFORMANCE GOAL.  THE PERFORMANCE GOAL FOR
THE PERFORMANCE CYCLE IS THE TOTAL RETURN PER SHARE OF STOCK TO THE
CORPORATION’S SHAREHOLDERS, INCLUSIVE OF DIVIDENDS PAID (REGARDLESS OF WHETHER
PAID IN CASH OR PROPERTY, WHICH DIVIDENDS SHALL BE DEEMED REINVESTED IN STOCK),
DURING THE PERFORMANCE CYCLE IN COMPARISON TO THE TOTAL RETURN PER SHARE OF
STOCK, INCLUSIVE OF DIVIDENDS PAID (REGARDLESS OF WHETHER PAID IN CASH OR
PROPERTY, WHICH DIVIDENDS SHALL BE DEEMED REINVESTED IN STOCK) ACHIEVED BY THE
COMPANIES (I) WHICH ARE IN THE STANDARD & POORS 500 INDEX (THE “S&P 500”) ON THE
DATE THE PERFORMANCE CYCLE BEGINS AND (II) WHICH CONTINUE TO FILE PUBLIC REPORTS
PURSUANT TO THE ACT FOR THE ENTIRETY OF THE PERFORMANCE CYCLE (SUCH COMPANIES,
THE “COMPARISON COMPANIES”).  FOR THE AVOIDANCE OF DOUBT, A COMPANY INCLUDED IN
THE S&P 500 ON THE DATE THE PERFORMANCE CYCLE COMMENCES THAT IS NOT INCLUDED IN
THE S&P 500 AT THE

 

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CONCLUSION OF THE PERFORMANCE CYCLE WILL BE A COMPARISON COMPANY AS LONG AS IT
FILES PUBLIC REPORTS PURSUANT TO THE ACT FOR THE ENTIRE PERFORMANCE CYCLE (AND
ANY COMPANY FIRST INCLUDED IN THE S&P 500 AFTER THE START OF THE PERFORMANCE
CYCLE WILL NOT BE A COMPARISON COMPANY).

 

(C)                                  COMPARISON OF TOTAL SHAREHOLDER RETURN. 
EXCEPT AS PROVIDED IN SECTION 4, THE PERFORMANCE SHARES COVERED BY THE AWARD
SHALL BE DEEMED EARNED BASED ON WHERE THE CORPORATION’S TOTAL SHAREHOLDER RETURN
DURING THE PERFORMANCE CYCLE RANKS IN RELATION TO THE TOTAL SHAREHOLDER RETURNS
OF THE COMPARISON COMPANIES DURING SUCH PERIOD.  FOR PURPOSES OF CALCULATING THE
TOTAL SHAREHOLDER RETURN OF THE CORPORATION AND THE COMPARISON COMPANIES DURING
THE PERFORMANCE CYCLE, THE VALUE OF EACH SUCH COMPANY’S STOCK AT THE BEGINNING
AND END OF THE PERFORMANCE CYCLE SHALL BE ESTABLISHED BASED ON THE AVERAGE OF
THE AVERAGES OF THE HIGH AND LOW TRADING PRICES OF THE APPLICABLE STOCK ON THE
PRINCIPAL EXCHANGE ON WHICH THE STOCK TRADES FOR THE 15 TRADING DAYS OCCURRING
IMMEDIATELY PRIOR TO THE BEGINNING OR END OF THE PERFORMANCE CYCLE, AS THE CASE
MAY BE.  SUCH AVERAGES FOR EACH SUCH COMPANY (INCLUDING THE CORPORATION) SHALL
BE REFERRED TO HEREIN AS THE “BEGINNING AVERAGE VALUE” AND THE “ENDING AVERAGE
VALUE.”  AS SOON AS PRACTICABLE AFTER THE COMPLETION OF THE PERFORMANCE CYCLE,
THE TOTAL SHAREHOLDER RETURNS OF THE COMPARISON COMPANIES WILL BE CALCULATED AND
RANKED FROM HIGHEST TO LOWEST.  THE CORPORATION’S TOTAL SHAREHOLDER RETURN WILL
THEN BE RANKED IN TERMS OF WHICH PERCENTILE IT WOULD HAVE PLACED IN AMONG THE
COMPARISON COMPANIES.  IN CALCULATING THE TOTAL SHAREHOLDER RETURN WITH RESPECT
TO EITHER THE CORPORATION OR ANY OF THE COMPARISON COMPANIES, THE COMMITTEE
SHALL MAKE OR SHALL CAUSE TO BE MADE SUCH APPROPRIATE ADJUSTMENTS TO THE
CALCULATION OF TOTAL SHAREHOLDER RETURN FOR SUCH ENTITY (INCLUDING, WITHOUT
LIMITATION, ADJUSTING THE BEGINNING AVERAGE VALUE) AS SHALL BE NECESSARY OR
APPROPRIATE TO AVOID AN ARTIFICIAL INCREASE OR DECREASE IN SUCH RETURN AS A
RESULT OF A STOCK SPLIT (INCLUDING A REVERSE STOCK SPLIT), RECAPITALIZATION OR
OTHER SIMILAR EVENT AFFECTING THE CAPITAL STRUCTURE OF SUCH ENTITY THAT DOES NOT
INVOLVE THE ISSUANCE OF THE ENTITY’S SECURITIES IN EXCHANGE FOR MONEY, PROPERTY
OR OTHER CONSIDERATION.

 

(D)                                 PERCENTAGE OF PERFORMANCE SHARES EARNED. 
THE EXTENT TO WHICH PERFORMANCE SHARES SHALL BECOME EARNED SHALL BE DETERMINED
ACCORDING TO THE FOLLOWING SCHEDULE:

 

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Relative
Performance
Level Percentile

 

Percent of
Performance
Shares Earned

 

85th or higher

 

200

%

50th

 

100

%

25th

 

50

%

Under 25th

 

0

%

 

TO THE EXTENT THAT THE CORPORATION’S TOTAL SHAREHOLDER RETURN RANKS IN A
PERCENTILE BETWEEN THE 25TH AND THE 50TH PERCENTILE, OR BETWEEN THE 50TH AND THE
85TH PERCENTILE, OF COMPARATIVE PERFORMANCE, THEN THE NUMBER OF PERFORMANCE
SHARES EARNED SHALL BE DETERMINED BY MULTIPLYING THE RELATIVE PERCENTILE OF
COMPARATIVE PERFORMANCE ACHIEVED BY THE CORPORATION BY TWO (E.G., IF THE
CORPORATION’S TOTAL SHAREHOLDER RETURN WOULD HAVE PLACED IN THE 40TH PERCENTILE,
THEN 80% OF THE PERFORMANCE SHARES COVERED BY THE AWARD BECOME EARNED; IF THE
CORPORATION’S TOTAL SHAREHOLDER RETURN WOULD HAVE PLACED IN THE 75TH PERCENTILE,
THEN 150% OF THE PERFORMANCE SHARES COVERED BY THE AWARD BECOME EARNED).

 

(E)                                  TERMINATION OF SERVICE ON THE BOARD OF
DIRECTORS.  THE PARTICIPANT’S CESSATION OF SERVICES AS A MEMBER OF THE BOARD OF
DIRECTORS FOR ANY REASON SHALL HAVE NO EFFECT ON THE RIGHTS AND ENTITLEMENTS OF
THE PARTICIPANT TO RECEIVE PAYMENT IN RESPECT OF THE PERFORMANCE SHARES;
PROVIDED, HOWEVER, THAT IF THE PARTICIPANT’S SERVICE ON THE BOARD OF DIRECTORS
IS TERMINATED FOR CAUSE, AS DETERMINED BY THE COMMITTEE (OR IF THE COMMITTEE
DETERMINES THAT THE PARTICIPANT RESIGNED FROM THE BOARD OF DIRECTORS IN
ANTICIPATION OF BEING REMOVED FOR CAUSE), THEN THE PARTICIPANT SHALL FORFEIT ANY
AND ALL RIGHTS IN RESPECT OF THE PERFORMANCE SHARES COVERED BY THE AWARD AND
SUCH PERFORMANCE SHARES SHALL BE IMMEDIATELY FORFEITED AND CANCELLED WITHOUT
FURTHER ACTION BY THE CORPORATION OR THE PARTICIPANT AS OF THE DATE OF SUCH
TERMINATION OF SERVICE.

 

4.                                       CHANGE IN CONTROL.  NOTWITHSTANDING
ANYTHING IN SECTION 2 OR 3 TO THE CONTRARY, IN THE EVENT A CHANGE IN CONTROL
OCCURS, PERFORMANCE SHARES COVERED BY THE AWARD NOT PREVIOUSLY FORFEITED
PURSUANT TO SECTION 3 SHALL BE TREATED IN ACCORDANCE WITH SECTION 9 OF THE PLAN.

 

5.                                       ADJUSTMENT IN CAPITALIZATION.  IN THE
EVENT THAT THE COMMITTEE SHALL DETERMINE THAT ANY STOCK DIVIDEND, STOCK SPLIT,
SHARE COMBINATION, EXTRAORDINARY CASH DIVIDEND, RECAPITALIZATION,
REORGANIZATION, MERGER, CONSOLIDATION, SPLIT-UP, SPIN-OFF, COMBINATION, EXCHANGE
OF SHARES, WARRANTS OR RIGHTS OFFERING TO PURCHASE STOCK AT A PRICE
SUBSTANTIALLY BELOW FAIR MARKET VALUE, OR OTHER SIMILAR CORPORATE EVENT AFFECTS
THE STOCK SUCH THAT AN ADJUSTMENT IS REQUIRED IN ORDER TO PRESERVE, OR TO
PREVENT THE ENLARGEMENT OF, THE BENEFITS OR POTENTIAL BENEFITS INTENDED TO BE
MADE AVAILABLE UNDER THIS AWARD, THEN THE COMMITTEE SHALL, IN ITS SOLE
DISCRETION, AND IN SUCH MANNER AS THE COMMITTEE MAY DEEM EQUITABLE, ADJUST ANY
OR ALL OF THE NUMBER AND KIND OF PERFORMANCE SHARES SUBJECT TO THIS AWARD
AND/OR, IF DEEMED APPROPRIATE, MAKE PROVISION FOR A CASH PAYMENT TO THE PERSON
HOLDING

 

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THIS AWARD, PROVIDED, HOWEVER, THAT, UNLESS THE COMMITTEE DETERMINES OTHERWISE,
THE NUMBER OF PERFORMANCE SHARES SUBJECT TO THIS AWARD SHALL ALWAYS BE A WHOLE
NUMBER.

 

6.                                       RESTRICTIONS ON TRANSFER.  PERFORMANCE
SHARES MAY NOT BE SOLD, ASSIGNED, HYPOTHECATED, PLEDGED OR OTHERWISE TRANSFERRED
OR ENCUMBERED IN ANY MANNER EXCEPT (I) BY WILL OR THE LAWS OF DESCENT AND
DISTRIBUTION OR (II) TO A PERMITTED TRANSFEREE (AS DEFINED IN SECTION 11(A) OF
THE PLAN) WITH THE PERMISSION OF, AND SUBJECT TO SUCH CONDITIONS AS MAY BE
IMPOSED BY, THE COMMITTEE.

 

7.                                       NO RIGHTS AS A SHAREHOLDER.  UNTIL
SHARES OF STOCK ARE ISSUED, IF AT ALL, IN SATISFACTION OF THE CORPORATION’S
OBLIGATIONS UNDER THIS AWARD, IN THE TIME AND MANNER SPECIFIED IN SECTION 2 OR
4, THE PARTICIPANT SHALL HAVE NO RIGHTS AS A SHAREHOLDER.

 

8.                                       NOTICE.  ANY NOTICE GIVEN HEREUNDER TO
THE CORPORATION SHALL BE ADDRESSED TO THE CHUBB CORPORATION, ATTENTION
SECRETARY, 15 MOUNTAIN VIEW ROAD, P.O.  BOX 1615, WARREN, NEW JERSEY 07061-1615,
AND ANY NOTICE GIVEN HEREUNDER TO THE PARTICIPANT SHALL BE ADDRESSED TO THE
PARTICIPANT AT THE PARTICIPANT’S ADDRESS AS SHOWN ON THE RECORDS OF THE
CORPORATION.

 

9.                                       GOVERNING LAW.  THE AWARD AND THE LEGAL
RELATIONS BETWEEN THE PARTIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW JERSEY (WITHOUT REFERENCE TO THE PRINCIPLES OF
CONFLICTS OF LAW).

 

10.                                 SIGNATURE IN COUNTERPART.  THIS AGREEMENT
MAY BE SIGNED IN COUNTERPARTS, EACH OF WHICH SHALL BE AN ORIGINAL, WITH THE SAME
EFFECT AS IF THE SIGNATURE THERETO AND HERETO WERE UPON THE SAME INSTRUMENT.

 

11.                                 BINDING EFFECT; BENEFITS. THIS AGREEMENT
SHALL BE BINDING UPON AND INURE TO THE BENEFIT OF THE CORPORATION AND THE
PARTICIPANT AND THEIR RESPECTIVE SUCCESSORS AND PERMITTED ASSIGNS.  NOTHING IN
THIS AGREEMENT, EXPRESS OR IMPLIED, IS INTENDED OR SHALL BE CONSTRUED TO GIVE
ANY PERSON OTHER THAN THE CORPORATION OR THE PARTICIPANT OR THEIR RESPECTIVE
SUCCESSORS OR ASSIGNS ANY LEGAL OR EQUITABLE RIGHT, REMEDY OR CLAIM UNDER OR IN
RESPECT OF ANY AGREEMENT OR ANY PROVISION CONTAINED HEREIN.

 

12.                                 AMENDMENT.  THIS AGREEMENT MAY NOT BE
ALTERED, MODIFIED, OR AMENDED EXCEPT BY A WRITTEN INSTRUMENT SIGNED BY THE
CORPORATION AND THE PARTICIPANT.

 

13.                                 SECTIONS AND OTHER HEADINGS.  THE
SECTION AND OTHER HEADINGS CONTAINED IN THIS AGREEMENT ARE FOR REFERENCE
PURPOSES ONLY AND SHALL NOT AFFECT THE MEANING OR INTERPRETATION OF THIS
AGREEMENT.

 

IN WITNESS WHEREOF, the Corporation, by its duly authorized officer, and the
Participant have executed this Agreement in duplicate as of the day and year
first above written.

 

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THE CHUBB CORPORATION

 

 

 

By:

 

 

 

Secretary

 

 

 

 

By:

 

 

 

Participant

 

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