Exhibit 10.8

 

THE CHUBB CORPORATION
LONG-TERM STOCK
INCENTIVE PLAN (2004)

 

Non-statutory Stock Option Award Agreement

 

This NON-STATUTORY STOCK OPTION AWARD AGREEMENT, dated as of March 3, 2005, is
by and between The Chubb Corporation (the “Corporation”) and [         ] (the
“Participant”), pursuant to The Chubb Corporation Long-Term Stock Incentive Plan
(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 Committee has authorized
the grant to the Participant of Non-statutory Stock Options in accordance with
the terms and conditions of this Agreement; and

 

WHEREAS, the Participant and the Corporation desire to enter into this Agreement
to evidence and confirm the grant of such Non-statutory Stock Options on the
terms and conditions set forth herein.

 

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

 

1.                                       GRANT OF OPTIONS; EXERCISE PRICE. 
PURSUANT TO THE PROVISIONS OF THE PLAN, ON THE DATE SET FORTH ABOVE (THE
“GRANT DATE”), THE CORPORATION HAS GRANTED AND HEREBY EVIDENCES THE GRANT TO THE
PARTICIPANT, SUBJECT TO THE TERMS AND CONDITIONS SET FORTH HEREIN AND IN THE
PLAN, OF OPTIONS TO PURCHASE FROM THE CORPORATION [          ] SHARES OF STOCK
(THE “OPTION”).  THE EXERCISE PRICE FOR EACH SHARE OF STOCK COVERED BY THE
OPTION SHALL BE EQUAL TO [$        ], WHICH WAS THE FAIR MARKET VALUE OF THE
STOCK ON THE GRANT DATE.  UPON ANY EXERCISE OF THE OPTIONS, THE CORPORATION
SHALL CAUSE A BOOK ENTRY ACCOUNT MAINTAINED FOR THE PARTICIPANT TO BE CREDITED
FOR THE NUMBER OF SHARES OF STOCK TO BE ISSUED TO THE PARTICIPANT (OR SHALL
EVIDENCE THE ISSUANCE OF STOCK BY SUCH OTHER REASONABLE METHOD AS THE COMMITTEE
MAY DETERMINE IN ITS SOLE DISCRETION).

 

2.                                       EXERCISABILITY.  EXCEPT AS PROVIDED IN
SECTIONS 5 AND 6, AND SUBJECT TO THE PARTICIPANT’S CONTINUED EMPLOYMENT WITH THE
CORPORATION OR A SUBSIDIARY THROUGH THE APPLICABLE VESTING DATE, THE OPTIONS
SHALL BECOME VESTED AND EXERCISABLE IN ACCORDANCE WITH THE FOLLOWING SCHEDULE:

 

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Date

 

Options Vested & Exercisable

 

 

 

4th anniversary of Grant Date

 

100% of the Options

 

Once vested in accordance with the provisions of this Agreement, Options may be
exercised at any time, and from time to time, prior to the date such Options
terminate as determined under Section 3(a) or 5.  Options may only be exercised
with respect to full shares of Stock and no fractional shares of Stock shall be
issued.  Any exercise of the Option shall be made by giving the Corporation or
its designee written notice of exercise specifying the number of shares of Stock
to be purchased.  The notice of exercise shall be accompanied by tender to the
Corporation of the full purchase price of said shares and the related amount of
taxes required to be withheld as may be necessary in the opinion of the
Corporation to satisfy tax withholding required under the laws of any country,
state, province, city or other jurisdiction with respect to the Stock
deliverable hereunder, unless the Participant has elected to have shares of
Stock withheld to satisfy such tax withholding in accordance with the rules
promulgated by the Committee.  Payment of the purchase price of the shares of
Stock shall be made in cash, check, shares of Stock owned by the Participant for
at least six months which are not the subject of any pledge or other security
interest, in a combination of the foregoing, or by any other method or procedure
as shall be permitted by the Plan or the Committee provided, however, that the
Committee may, in its sole discretion, prohibit or limit the use of shares of
Stock as part or full payment of the purchase price and any related tax
withholding obligation.

 

3.                                       CONDITIONS APPLICABLE TO OPTIONS.  IT
IS UNDERSTOOD AND AGREED THAT THE OPTION IS SUBJECT TO THE FOLLOWING CONDITIONS:

 

(A)                                  NORMAL TERMINATION OF OPTIONS.  THE OPTIONS
SHALL NOT IN ANY EVENT BE EXERCISABLE ON OR AFTER, AND SHALL BE FORFEITED AS OF,
THE TENTH ANNIVERSARY OF THE GRANT DATE.

 

(B)                                 RESTRICTIONS ON TRANSFER.   THE OPTIONS 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(B) OF
THE PLAN) WITH THE PERMISSION OF, AND SUBJECT TO SUCH CONDITIONS AS MAY BE
IMPOSED BY, THE COMMITTEE.

 

(C)                                  NO RIGHTS AS SHAREHOLDER.  NEITHER THE
PARTICIPANT NOR ANY LEGAL REPRESENTATIVE, LEGATEE, DISTRIBUTEE OR PERMITTED
TRANSFEREE SHALL BE DEEMED TO BE A HOLDER OF OR POSSESS ANY SHAREHOLDER RIGHTS
WITH RESPECT TO ANY SHARES OF STOCK SUBJECT TO THE OPTION PRIOR TO THE ISSUANCE
OF SUCH SHARES UPON EXERCISE OF THE OPTION.

 

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(D)                                 NO RIGHT TO COMPENSATION OR FUTURE OPTIONS. 
THE GRANT OF THE OPTION SHALL BE CONSIDERED EXTRAORDINARY, AND IS NOT PART OF
THE PARTICIPANT’S REGULAR COMPENSATION.  THE GRANTING OF OPTIONS MAY BE
TERMINATED AT ANY TIME, AND THIS CURRENT GRANT DOES NOT CONFER ANY RIGHT OR
EXPECTATION THAT AWARDS (INCLUDING OPTIONS) WILL BE MADE TO THE PARTICIPANT IN
THE FUTURE.

 

4.                                       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 SHARES SUBJECT TO THIS OPTION, THE EXERCISE
PRICE WITH RESPECT TO SHARES OF STOCK COVERED BY THE OPTION AND/OR, IF DEEMED
APPROPRIATE, MAKE PROVISION FOR A CASH PAYMENT TO THE PERSON HOLDING THIS
OPTION, PROVIDED, HOWEVER, THAT THE NUMBER OF SHARES SUBJECT TO THIS OPTION
SHALL ALWAYS BE A WHOLE NUMBER.

 

5.                                       TERMINATION OF EMPLOYMENT.

 

(A)                                  QUALIFYING TERMINATION OF EMPLOYMENT.  IF
THE PARTICIPANT’S EMPLOYMENT TERMINATES BY REASON OF A QUALIFYING TERMINATION OF
EMPLOYMENT ON OR AFTER THE FIRST ANNIVERSARY OF THE GRANT DATE, ALL OF THE
OPTIONS GRANTED HEREUNDER SHALL BECOME VESTED AND THE PARTICIPANT MAY EXERCISE
THE OPTIONS UNTIL THE NORMAL TERMINATION DATE SPECIFIED IN SECTION 3(A).

 

(B)                                 TERMINATION FOR ANY OTHER REASON.  IF THE
PARTICIPANT’S EMPLOYMENT TERMINATES FOR ANY REASON OTHER THAN A QUALIFYING
TERMINATION OF EMPLOYMENT ON OR AFTER THE FIRST ANNIVERSARY OF THE GRANT DATE,
ANY OPTIONS NOT EXERCISED ON OR PRIOR TO THE DATE OF TERMINATION (INCLUDING,
WITHOUT LIMITATION, ANY PORTION OF THE OPTIONS THAT ARE NOT THEN EXERCISABLE)
SHALL BE FORFEITED AND CANCELLED WITHOUT FURTHER ACTION BY THE CORPORATION OR
THE PARTICIPANT AS OF THE DATE OF SUCH TERMINATION OF EMPLOYMENT.

 

(C)                                  TRANSFERS BETWEEN THE CORPORATION AND
SUBSIDIARIES; LEAVES, OTHER ABSENCES AND SUSPENSION.  TRANSFER FROM THE
CORPORATION TO A SUBSIDIARY, FROM A SUBSIDIARY TO THE CORPORATION, OR FROM ONE
SUBSIDIARY TO ANOTHER SHALL NOT BE CONSIDERED A TERMINATION OF EMPLOYMENT.  ANY
QUESTION REGARDING WHETHER A PARTICIPANT’S EMPLOYMENT HAS TERMINATED IN
CONNECTION WITH A LEAVE OF ABSENCE OR OTHER ABSENCE FROM ACTIVE EMPLOYMENT SHALL
BE DETERMINED BY THE COMMITTEE, IN ITS SOLE DISCRETION, TAKING INTO ACCOUNT THE
PROVISIONS OF APPLICABLE LAW AND THE CORPORATION’S GENERALLY APPLICABLE
EMPLOYMENT POLICIES AND PRACTICES.  THE COMMITTEE MAY ALSO SUSPEND THE OPERATION
OF THE TERMINATION OF EMPLOYMENT PROVISIONS OF THIS AGREEMENT FOR SUCH PERIOD
AND UPON

 

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SUCH TERMS AND CONDITIONS AS IT MAY DEEM NECESSARY OR APPROPRIATE TO FURTHER THE
INTERESTS OF THE CORPORATION.

 

(D)                                 TERMINATION PURSUANT TO A CHANGE IN
CONTROL.  NOTWITHSTANDING THE PROVISIONS OF SECTION 5(B), IF THE PARTICIPANT’S
EMPLOYMENT IS INVOLUNTARILY TERMINATED OTHER THAN FOR CAUSE OR IF THE
PARTICIPANT TERMINATES EMPLOYMENT DUE TO DEATH OR DISABILITY, IN ALL SUCH CASES
ON OR AFTER THE DATE THE CORPORATION’S SHAREHOLDERS APPROVE A CHANGE IN CONTROL
PURSUANT TO SUBSECTIONS (III) OR (IV) OF SUCH DEFINITION BUT PRIOR TO THE
CONSUMMATION OF SUCH CHANGE IN CONTROL, THE PARTICIPANT SHALL BE TREATED AS
HAVING CONTINUED EMPLOYMENT THROUGH, AND TERMINATED EMPLOYMENT IMMEDIATELY
AFTER, SUCH CHANGE IN CONTROL.

 

6.                                       CHANGE IN CONTROL.  NOTWITHSTANDING
ANYTHING IN SECTION 2 TO THE CONTRARY, IN THE EVENT A CHANGE IN CONTROL OCCURS,
OPTIONS NOT PREVIOUSLY FORFEITED PURSUANT TO SECTIONS 3 AND 5 SHALL BE TREATED
AS PROVIDED FOR IN SECTION 9 OF THE PLAN, IN WHICH CASE THE OPTIONS SHALL ALL
BECOME VESTED AND EXERCISABLE IMMEDIATELY PRIOR TO THE CHANGE IN CONTROL AND
SHALL BE PAYABLE AS PROVIDED IN SECTIONS 9(A)(I) AND 9(A)(III) OF THE PLAN OR,
IF APPLICABLE, BE HONORED, ASSUMED OR SUBSTITUTED FOR IN ACCORDANCE WITH
SECTION 9(B) OF THE PLAN.

 

7.                                       NOTICE.  ANY NOTICE TO BE GIVEN
HEREUNDER TO THE CORPORATION, OTHER THAN WITH RESPECT TO OPTION EXERCISES, 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.

 

8.                                       NO RIGHT TO CONTINUED EMPLOYMENT. 
NEITHER THE EXECUTION AND DELIVERY HEREOF NOR THE GRANTING OF THE AWARD SHALL
CONSTITUTE OR BE EVIDENCE OF ANY AGREEMENT OR UNDERSTANDING, EXPRESS OR IMPLIED,
ON THE PART OF THE CORPORATION OR ANY OF THE SUBSIDIARIES TO EMPLOY OR CONTINUE
THE EMPLOYMENT OF THE PARTICIPANT FOR ANY PERIOD.

 

9.                                       COMMITTEE DISCRETION; DELEGATION. 
NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT TO THE CONTRARY, THE
COMMITTEE, IN ITS SOLE DISCRETION AND IN ACCORDANCE WITH THE TERMS OF THE PLAN,
MAY TAKE ANY ACTION THAT IS AUTHORIZED UNDER THE TERMS OF THE PLAN THAT IS NOT
CONTRARY TO THE EXPRESS TERMS HEREOF, INCLUDING ACCELERATING THE VESTING AND
EXERCISABILITY OF OPTIONS, AT SUCH TIMES (INCLUDING, WITHOUT LIMITATION, UPON OR
IN CONNECTION WITH THE PARTICIPANT’S TERMINATION OF EMPLOYMENT) AND UPON SUCH
TERMS AND CONDITIONS AS THE COMMITTEE SHALL DETERMINE.  NOTHING IN THIS
AGREEMENT SHALL LIMIT OR IN ANY WAY RESTRICT THE POWER OF THE COMMITTEE,
CONSISTENT WITH THE TERMS OF THE PLAN, TO DELEGATE ANY OF THE POWERS RESERVED TO
IT HEREUNDER TO SUCH PERSON OR PERSONS AS IT SHALL DESIGNATE FROM TIME TO TIME.

 

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10.                                 GOVERNING LAW.  THE OPTION 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).

 

11.                                 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.

 

12.                                 BINDING EFFECT; BENEFITS.  THE PARTICIPANT
AGREES TO BE BOUND BY THE TERMS AND CONDITIONS HEREOF AND OF THE PLAN.  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.

 

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

 

14.                                 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.

 

 

 

THE CHUBB CORPORATION

 

 

 

 

 

 

 

By:

 

 

 

 

Secretary

 

 

 

 

 

 

 

By:

 

 

 

 

Participant

 

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