Exhibit 10.9

 

The Chubb Corporation

Key Employee Deferred Compensation Plan (2005)

 

                WHEREAS, The Chubb Corporation (the “Company”) maintains The
Chubb Corporation Executive Deferred Compensation Plan (the “Former Plan”)
pursuant to which key employees of the Company and its subsidiaries were able to
defer a portion of their compensation otherwise payable to them;

                WHEREAS, Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), which became effective January 1, 2005, provides new
distribution, election and funding restrictions for nonqualified deferred
compensation;

                WHEREAS, the Company wishes to continue to provide a program
under which key employees may continue to defer a portion of their compensation
that meets the requirements of Section 409A of the Code;

                WHEREAS, in order to continue providing a deferred compensation
program for its key employees, the Company desires to adopt The Chubb
Corporation Key Employee Deferred Compensation Plan (2005) (the “Plan”), as set
forth herein, pursuant to which certain key employees of the Company and its
subsidiaries may defer a portion of their compensation earned with respect to
services performed after December 31, 2004 (and to continue to defer
compensation in which they were not vested prior to 2005 but in which they
become vested after 2004) under a plan that meets the requirements of Section
409A of the Code; and

                WHEREAS, all compensation deferred on or before December 31,
2004 by Plan participants will continue to be deferred under the Former Plan and
all deferrals made after December 31, 2004 shall be made under this Plan;

                NOW THEREFORE, the Plan is hereby established under the
following terms and conditions:

1.                                      Statement of Purpose

                                                The purpose of The Chubb
Corporation Key Employee Deferred Compensation Plan (2005) (the “Plan”) is to
aid the Company and its subsidiaries in attracting and retaining key employees
by providing a non-qualified compensation deferral vehicle.

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2.             Definitions

2.01                           Beneficiary — “Beneficiary” means the person or
persons designated as such in accordance with Section 9.

2.02                           Board of Directors — “Board of Directors” means
the Board of Directors of The Chubb Corporation.

2.03                           Calendar Quarter — “Calendar Quarter” means any
of the four calendar quarters in a full calendar year (e.g., January, February
and March comprise the first calendar quarter).

2.04                           Cash Based Compensation — “Cash Based
Compensation” means the Participant’s Salary, any cash bonus(es) paid under a
plan sponsored by the Company that permits such amounts to be deferred, and any
other amounts designated as Cash Based Compensation by the Committee.

2.05                           Change in Control Event — “Change in Control
Event” means a change in the ownership or effective control of The Chubb
Corporation or a change in the ownership of a substantial portion of the assets
of The Chubb Corporation as defined in Exhibit A.

2.06                           Code — “Code” means the Internal Revenue Code of
1986, as amended.

2.07                           Committee — “Committee” means the Organization &
Compensation Committee of the Board of Directors that will administer the Plan
pursuant to the provisions of Section 3.

2.08                           Company — “Company” means The Chubb Corporation
and, for such other purposes as determined by the Committee, shall include any
subsidiary of The Chubb Corporation.

2.09                           Company Stock — “Company Stock” means the common
stock of The Chubb Corporation.

2.10                           Company Stock Unit Account — “Company Stock Unit
Account” means an investment option providing for a return based on the
hypothetical investment of the Deferral Amount from Stock Based Compensation in
whole or fractional Units of Company Stock.

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2.11                           Cycle — “Cycle” means the twelve (12) month
period, beginning each January 1, in which Participants may defer a portion of
their Cash Based or Stock Based Compensation.

2.12                           Declining Balance Installments — “Declining
Balance Installments” means a series of annual payments such that each payment
is determined by taking that portion of the Participant’s Deferred Compensation
Account as of the Valuation Date immediately preceding the Distribution Date and
dividing by the number of years of distributions remaining.

2.13                           Deferral Amount  — “Deferral Amount” means the
total amount of Elective Deferred Compensation and/or Non-Elective Deferred
Compensation with respect to a Participant.

2.14                           Deferred Compensation Account — “Deferred
Compensation Account” means the account maintained on the books of account of
the Company for a Participant pursuant to Section 7.

2.15                           Disability or Disabled — “Disability” or
“Disabled” means a Participant who is, by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than twelve (12) months,
receiving income replacement benefits for a period of not less than three (3)
months under The Chubb Corporation Long-Term Disability Plan.

2.16                           Distribution Date — “Distribution Date” means the
date on which the Company makes distributions from the Participant’s Deferred
Compensation Account(s).

2.17                           Dividends — “Dividends” means an amount equal to
the number of Units in a Participant’s Deferred Compensation Account multiplied
by the amount of quarterly dividends payable to Company Stock shareholders for
each share of Company Stock.  The amount of Dividends on a payment date for a
quarterly dividend shall be determined based on the number of Units in the
Participant’s Deferred Compensation Account as of the preceding Valuation Date.

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2.18                           Effective Date — “Effective Date” means the date
on which this Plan is effective, January 1, 2005.

2.19                           Election Form — “Election Form” means the form or
forms prescribed by the Committee from time to time and filed with the Committee
by the Participant in order to participate in the Plan.  The terms and
conditions specified in the Election Form(s) are incorporated by reference
herein and form a part of the Plan.

2.20                           Elective Deferred Compensation — “Elective
Deferred Compensation” means the total amount of Cash Based and/or Stock Based
Compensation elected to be deferred by an Eligible Employee on his/her Election
Form, subject to confirmation by the Company.

2.21                           Eligible Employee — “Eligible Employee” means any
employee of The Chubb Corporation, Federal Insurance Company, or one of the
other of the Company’s subsidiaries, who is a Vice President or higher assigned
to pay band 6 or higher, or such other key employees of the Company or its
subsidiaries as may be designated by the Chief Executive Officer of The Chubb
Corporation.

2.22                           Investment Allocation Change Form — “Investment
Allocation Change Form” means the form prescribed by the Committee from time to
time and filed by the Participant in order to request a change in the allocation
of the Participant’s Deferral Amounts amongst the Investment Funds.  The terms
and conditions specified in the Investment Allocation Change Form are
incorporated by reference herein and form a part of the Plan.

2.23                           Investment Funds — “Investment Funds” means those
mutual funds, investment indices or other funds or measures of performance
identified from time to time by the Committee and used to determine the
return(s) on a Participant’s Deferral Amount that is deemed invested (i.e.,
hypothetically invested) in the Investment Funds pursuant to the Participant’s
investment request made pursuant to Section 7.03.  The Investment Funds are
listed and described in Appendix A.  The Investment Funds may be changed by the
Committee from time to time, in the sole discretion of the Committee.

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2.24                           Key Employee — “Key Employee” means a key
employee as defined in Section 416(i) of the Code, without regard to paragraph
(5) thereof, of a corporation any stock in which is publicly traded on an
established securities market or otherwise.

2.25                           Non-Elective Deferred Compensation —
“Non-Elective Deferred Compensation” means the amount awarded, if any, to a
Participant by the Committee pursuant to Section 4.02.

2.26                           Participant — “Participant” means an Eligible
Employee participating in the Plan in accordance with the provisions of Section
4.

2.27                           Plan Year — “Plan Year” means the calendar year.

2.28                           Salary — “Salary” means the Participant’s annual
base salary.

2.29                           Stock Based Compensation — “Stock Based
Compensation” means awards made under any equity-based plan sponsored the
Company that permits such award(s) to be deferred.

2.30                           Termination of Employment — “Termination of
Employment” means the end of a Participant’s employment with the Company and
other members of its controlled group of entities (within the meaning of Section
414(c) of the Code) for any reason other than death or Disability.

2.31                           Unforeseeable Emergency — “Unforeseeable
Emergency” means a severe financial hardship to a Participant (a) resulting from
an illness or accident of the Participant, the Participant’s spouse, or a
dependent (as defined in Section 152(a) of the Code) of the Participant, (b)
loss of the Participant’s property due to casualty, or (c) other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Participant.

2.32                           Unit — “Unit” means a unit credited to a
Participant’s Deferred Compensation Account and deemed invested in the Company
Stock Unit Account pursuant to Section 7.  For valuation and distribution
purposes, each Unit shall be equivalent to one share of Company Stock.

2.33                           Valuation Date — “Valuation Date” means the date
on which the value of a Participant’s Deferred Compensation Account is
determined as provided

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in Section 7.  Unless and until changed by the Committee, the Valuation Dates
within each Cycle shall be each day that trading occurs in the Investment Funds
in which the Deferral Amounts are hypothetically invested.

3.             Administration of the Plan

                                                3.01         Plan
Administrator.  The Committee, subject to Section 3.02, will administer the
Plan.  The Committee shall have the power to formulate rules and regulations for
carrying out the administration of the Plan including, but not limited to,
regulations for electronic transmission of forms.  The Committee also has the
power to make any and all determinations that may be necessary or desirable for
the effective administration of the Plan.  The Committee is authorized to engage
such accountants, consultants and other service providers necessary to assist in
the administration of the Plan.  Any decision or interpretation of any provision
of the Plan adopted by the Committee shall be final and conclusive.

                                                3.02         Delegation of
Duties.  The Committee may delegate any or all of its duties as to the
administration of the Plan to other individuals or groups of individuals within
the Company, as it deems appropriate.

4.             Participation

                                                4.01         Elective
Participation

                                                                a.            
Any Eligible Employee may elect to participate in the Plan for a given Cycle by
filing a completed Election Form for the Cycle with the Company.  With regard to
an election to participate:

1.             The Election Form must be filed as follows:

A.                                   An election to defer Salary or any
non-performance-based bonus must be filed by December 31 of the year prior to
the year the services on which the Salary or the non-performance-based bonus is
based are performed and shall apply for that Plan Year only.

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B.                                     An election to defer any
performance-based compensation (within the meaning of Section 409A of the Code)
earned over a period of at least twelve (12) months (including performance-based
bonuses) must be filed no later than six (6) months before the end of the
service period to which the performance-based compensation relates.

C.                                     An election to defer Stock Based
Compensation (that is not considered performance-based compensation within the
meaning of Section 409A of the Code) must be filed by December 31 of the year
prior to the year in which the grant is made.

D.                                    Notwithstanding the foregoing, an Eligible
Employee who first becomes eligible to participate in the Plan, may elect to
participate, if the election is filed within thirty (30) days after the
Participant becomes eligible to participate in the Plan; provided, the election
relates to Cash Based Compensation or Stock Based Compensation for services to
be performed subsequent to the election.

2.                                       The minimum deferral for a Cycle shall
be $5,000.

3.                                       The maximum deferral for a Cycle shall
be one hundred percent (100%) of a Participant’s Cash Based Compensation and
Stock Based Compensation; provided, however, that no election shall be effective
to reduce amounts paid by the Company to an Eligible Employee to an amount which
is less than the sum of the amount the Company is required to withhold for a
Cycle for purposes of federal, state or local taxes (including but not limited
to, income and FICA withholding) and the amount the Company is required to
withhold for contributions to any employee benefit plan (other than this Plan).

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4.                                       A Participant who is not a Key
Employee, may elect to receive payment of amounts deferred during a Cycle upon:
(A) Termination of Employment, (B) death, (C) the date the Participant becomes
Disabled, (D) a Change in Control Event, or (E) on March 31 of the year
specified by the Participant which shall be no earlier than in the third Plan
Year following the Plan Year in which such amounts are deferred.  Further, a
Participant may elect to receive a payment in a lump sum or in up to fifteen
(15) annual installments subject to the provisions of Section 8.02(b).

5.                                       A Participant who is a Key Employee may
elect to receive payment of amounts deferred during a Cycle upon: (A)
Termination of Employment, (B) death, or (C) on March 31 of the year specified
by the Participant (or death, if earlier) which shall be no earlier than in the
third Plan Year following the Plan Year in which such amounts are deferred;
subject to the restriction on payments to Key Employees in Section 8.06(c).  A
Participant who is a Key Employee may elect to receive a payment in a lump sum
or in up to fifteen (15) annual installments subject to the provisions of
Section 8.02(b).

                                                               
b.                                      A Participant’s election to defer future
Cash Based and/or Stock Based Compensation is irrevocable upon the filing of
his/her Election Form with the Company pursuant to Section 4.01(a)(1); provided,
however, that an election to defer Salary for a future Plan Year may be
terminated by December 31 of the Plan Year preceding the Plan Year to which such
termination relates by mutual agreement in writing between the Participant and
the Committee.

                                                4.02         Non-Elective
Participation.

a.                                       The Committee may, in its sole
discretion, award to an Eligible Employee Non-Elective Deferred Compensation. 
Unless otherwise specified by the Committee, the Participant shall determine the

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timing and form of payment of any Non-Elective Deferred Compensation, provided:

1.                                       The election to determine the timing
and form of payment is made by December 31 of the year before the year the
services to which the Non-Elective Deferred Compensation relates are performed.

2.                                       In the case of the first year in which
a Participant becomes eligible to participate in the Plan, the election to
determine the timing and form of payment is made within thirty (30) days after
the date the Participant becomes eligible to participate in the Plan and the
Non-Elective Deferred Compensation relates to services to be performed
subsequent to the election; or

3.                                       In the case of any Non-Elective
Deferred Compensation that is performance-based compensation (within the meaning
of Section 409A of the Code) earned over a period of at least twelve (12) months
that relates to individual or Company performance, the election is made no later
than six (6) months before the end of the service period to which such
performance-based compensation relates.

b.                                      A Participant who is not a Key Employee,
may elect to receive payment of amounts of Non-Elective Deferred Compensation
awarded during a Plan Year upon: (A) Termination of Employment, (B) death, (C)
the date the Participant becomes Disabled, (D) a Change in Control Event, or (E)
on March 31 of the year specified by the Participant which shall be no earlier
than in the third Plan Year following the Plan Year in which such amounts are
awarded.  Further, a Participant may elect to receive a payment in a lump sum or
in up to fifteen (15) annual installments subject to the provisions of Section
8.02(b).

c.                                       A Participant who is a Key Employee may
elect to receive payment of amounts of Non-Elective Deferred Compensation
awarded during a Plan Year upon: (A) Termination of Employment, (B)

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death, or (C) on March 31 of the year specified by the Participant which shall
be no earlier than in the third Plan Year following the Plan Year in which such
amounts are deferred; subject to the restriction on payments to Key Employees in
Section 8.06(c).  A Participant who is a Key Employee may elect to receive a
payment in a lump sum or in up to fifteen (15) annual installments subject to
the provisions of Section 8.02(b).

5.           Deferrals Subject to Section 409A of the Internal Revenue Code

The Plan is intended to comply with the provisions of Section 409A of the Code
and the Deferral Amounts hereunder are subject to the terms and conditions of
such Section.  To the extent deferrals made under the Former Plan (as defined in
the preamble) are (or become) subject to the provisions of Section 409A of the
Code, such deferrals shall hereinafter be considered to be made under this Plan
and shall be subject to all the terms and conditions hereunder.  The Committee
may, with the Participant’s consent, adjust or modify a Participant’s elections
to conform to the provisions of Section 409A of the Code.

6.           Vesting of Deferred Compensation Account

A Participant’s interest in his/her Deferred Compensation Account shall vest
immediately.

7.                                      Accounts and Valuations

                                                7.01         Deferred
Compensation Accounts.  The Committee shall establish and maintain a separate
Deferred Compensation Account for each Participant for each Cycle.

7.02                      Crediting of Deferral Amounts.  Deferral Amounts from
Elective Deferred Compensation will be credited to a Participant’s Deferred
Compensation Account on the first day of the month following the time at which
the amount would otherwise have been paid or delivered to the Participant.  Any
Non-Elective Deferred Compensation awarded to a Participant shall be credited to
the Participant’s Deferred Compensation Account on the date awarded unless
otherwise specified by the Committee.

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7.03                      Allocation of Deferral Amounts to Investment
Options.   A Participant’s Elective Deferred Compensation that is derived from
Cash Based Compensation and Non-Elective Deferred Compensation awarded to a
Participant, if any, may be deemed to be invested in the Investment Funds in
accordance with the Participant’s request on his or her Investment Allocation
Change Form.  Amounts deferred from Stock Based Compensation shall be deemed to
be invested in the Company Stock Unit Account.

7.04                      Crediting of Investment Return in the Investment
Funds.  That portion of the Participant’s Deferral Amounts that is deemed
invested in the Investment Funds shall be credited on each Valuation Date with
an investment return, from the time the Deferral Amounts are credited to the
Participant’s Deferred Compensation Account, based on the investment return
(gain or loss) of the Investment Funds in which the Deferral Amount is deemed to
be hypothetically invested.

7.05                      Change of Allocation in Investment Funds by a
Participant.  A Participant may request different investment allocations for
each Cycle, and may request to change a Cycle’s investment allocation once each
day that trading occurs in the Investment Funds in which the Deferral Amounts
are hypothetically invested.  Any change will be effective as of the date the
Investment Allocation Change Form is filed at the closing price of the
Investment Funds, if it is filed before the close of trading on the New York
Stock Exchange.  If such Investment Allocation Change Form is filed after the
close of trading on the New York Stock Exchange, it will be effective as of the
next day that trading occurs on the New York Stock Exchange at the closing price
on that date.

7.06                      Change of Investment Funds by Committee.  The
Committee will determine and may change the Investment Funds from time to time. 
In the event of any such change, all Participants shall be given notice of the
change at least thirty (30) days before the change is to be effective.  In
addition, each Participant shall be given the opportunity to change his or her
allocation of Investment Funds for his or her Deferred Compensation Account as
of the effective date for the change; this change shall be in addition to any
change permitted under Section 7.05.  The Committee’s decision to change the
Investment Funds shall not in any manner alter the

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returns on the Participant’s Deferred Compensation Accounts prior to the
effective date of the change.

7.07                           Valuation of the Company Stock Unit Account. 
That portion of the Participant’s Deferral Amount that is deemed invested in the
Company Stock Unit Account shall be valued based upon the value of Company
Stock.  All amounts that are deemed invested in the Company Stock Unit Account
shall be credited in Units or fractional Units with each Unit having a value
equivalent to one share of Company Stock.  The number of such credited Units on
the date any Deferral Amount is credited pursuant to Section 7.02 shall be
determined based on the closing price of one share of Company Stock as of the
close of business on the New York Stock Exchange Composite Listing on the date
the Deferral Amount is credited.  Dividends shall be reflected by the crediting
of additional Units or fractional Units equal to the value of the Dividends and
based upon the closing price of one share of Company Stock as of the close of
business on the New York Stock Exchange Composite Listing on the payment date
for each dividend payable to Company Stock shareholders.  The value of the
Participant’s Deferral Amounts that are deemed invested in the Company Stock
Unit Account shall be determined by multiplying the number of Units by the value
of the closing price of one share of Company Stock on the New York Stock
Exchange Composite Listing on the applicable Valuation Date.  In the event the
New York Stock Exchange Composite Listing is closed on the payment date on which
any dividends are paid on Company Stock or on any applicable Valuation Date, the
Units and their related value shall be determined based upon the closing price
of one share of Company Stock on the New York Stock Exchange Composite Listing
on the last business day immediately preceding such date.

7.08                           Changes in Capitalization.  If there is any
change in the number or class of shares of Company Stock through the declaration
of a stock dividend or other extraordinary dividends or recapitalization
resulting in stock splits, or combinations or exchanges of such shares or in the
event of similar corporate transactions, the Units credited to a Participant’s
Deferred Compensation Account shall be equitably adjusted to reflect any such

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change in the number or class of issued shares of Company Stock or to reflect
such similar corporate transaction.

7.09                           Nature of Account Entries.  The establishment and
maintenance of Participants’ Deferred Compensation Accounts and the crediting of
gains and losses pursuant to this Section 7, shall be merely bookkeeping entries
and shall not be construed as giving any person any interest in any specific
assets of the Company or of any subsidiary of the Company or any trust created
by the Company, including any mutual funds, Company Stock or other investment
funds owned by the Company or any such subsidiary or trust.  The hypothetical
investment of the Participants’ Deferred Compensation Accounts in the Investment
Funds and/or in the Company Stock Unit Account shall be for bookkeeping purposes
only, and shall not require the establishment of actual corresponding funds by
the Committee or the Company.  Benefits accrued under this Plan shall constitute
an unsecured general obligation of the Company.

8.             Benefits

8.01                           Payment of Benefits

a.                                       All Deferral Amounts payable to a
Participant that are deemed invested in the Investment Funds shall be paid in
cash.

b.                                      All Deferral Amounts payable to a
Participant that are deemed invested in the Company Stock Unit Account shall be
paid in Company Stock with one share distributed for each Unit credited pursuant
to Section 7.07.  All fractional Units shall be payable in cash.

8.02                           Normal Benefit

a.                                       A Participant’s Deferred Compensation
Account shall be paid to the Participant in accordance with the terms of the
Participant’s Election Form, subject to the terms and conditions set forth in
the Plan, except as follows:

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1.                                 Upon receipt of a domestic relations order as
described in Section 414(p)(1)(B) of the Code, payment will be made in
accordance with the domestic relations order.

2.                                 If, on the date a Participant has a
Termination of Employment, the value of the Participant’s Deferred Compensation
Accounts for all Cycles does not exceed $10,000, then, notwithstanding the
elections made by such Participant on the Election Form(s) filed with the
Committee, all of the Participant’s Deferral Amounts shall be paid in a lump sum
at the time provided in Section 8.06 for a Termination of Employment.

b.                                      If a Participant elects to receive
payment of that portion of his or her Deferred Compensation Account in annual
installments, subject to a maximum of fifteen (15) installments, payments shall
be made in Declining Balance Installments.

                                                8.03         Unforeseeable
Emergency.  In the event that the Committee, upon written petition of the
Participant, determines in its sole discretion that the Participant has suffered
an Unforeseeable Emergency, the Company shall pay to the Participant, as soon as
is practicable following such determination, an amount necessary to satisfy the
Unforeseeable Emergency plus amounts necessary to pay taxes reasonably
anticipated as a result of the distribution.  In making a decision regarding
whether a request meets the definition of an Unforeseeable Emergency, the
Committee shall take into account the extent to which the hardship is or may be
relieved through reimbursement by insurance or by liquidation of the
Participant’s assets, to the extent the liquidation of such assets would not
itself cause severe financial hardship.  The Deferred Compensation Account of
the Participant thereafter shall be reduced to reflect the Unforeseeable
Emergency payment.

                                                8.04         Request to
Committee for Delay in Payment.  A Participant shall have no right to modify in
any way the schedule for the distribution of amounts from his or her Deferred
Compensation Account that the Participant has specified in his or her Election
Form.  However, upon a written request submitted by the Participant to the
Committee (on an Election Form), the

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Committee may, in its sole discretion, postpone the payment, change the form of
payment to annual installments or increase the number of installments not to
exceed fifteen (15), provided:

a.             The postponement in the payment, change to annual installments,
or increase in the number of installments to a number of installments not to
exceed fifteen (15) does not take effect until at least twelve (12) months after
the date the Election Form on which the request is based is filed;

b.             The postponement in the payment must be for a period of at least
five (5) years from the date the payment would otherwise have been made, except
in the case of elections relating to distributions on death, Disability or
Unforeseeable Emergency; and

c.             The request to postpone the payment, change to annual
installments, or increase the number of installments to a number of installments
not to exceed fifteen (15), must be made at least twelve (12) months prior to
the date of the first scheduled payment.

8.05                           Taxes; Withholding.  To the extent required by
law, the Company shall withhold from payments made hereunder an amount equal to
at least the minimum taxes required to be withheld by the federal and any state
or local government.

8.06                           Date of Payments.

a.             Except as otherwise provided in this Plan, with respect to
Termination of Employment, death, Disability or a Change in Control Event,
payments under this Plan shall be made (or begin in the case of installments) at
the end of the Calendar Quarter during which the Participant or Beneficiary
becomes eligible to receive such payment, unless the Termination of Employment,
death, Disability or Change in Control Event occurs within the last ten (10)
days of a Calendar Quarter, in which case, payment will be made (or installments
will begin) on the last day of the following Calendar Quarter; provided,
however, that payments must be made (or begin in the case of installments) no
later than the later of (i)

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December 31 of the year in which the distribution event occurs, or (ii) thirty
(30) days after the distribution event.

                                                                                         
b.             Payments that are to be made on March 31 of a specified year
shall be made (or begin in the case of installments) on, or as soon as
administratively practicable after, such date; provided, however, that payments
must be made (or begin in the case of installments) no later than thirty (30)
days after the date.

                                                                                               
c.             Notwithstanding anything in the Plan to the contrary, if the
Participant is a Key Employee, then, notwithstanding the Election Form filed
with the Committee, no payment may be made (or begin in the case of
installments) to such Key Employee prior to the date which is six (6) months
following the Key Employee’s Termination of Employment (or death, if earlier).

                                                8.07         Allocation of
Distributions.  If a distribution of a portion of a Deferred Compensation
Account for a Cycle is made to a Participant or Beneficiary, and the amounts for
such Cycle are invested in more than one of the Investment Funds, then a portion
of such distribution shall be deemed to have been made from each of the
Investment Funds on a pro rata basis, based on the values of the Investment
Funds as of the Valuation Date immediately preceding the distribution.

9.             Beneficiary Designation

                                                At any time prior to the
complete distribution of the benefits due to a Participant under the Plan, he or
she shall have the right to designate, change, and/or cancel, any person(s) or
entity as his or her Beneficiary (either primary or contingent) to whom payment
under this Plan shall be made in the event of his or her death.  Each
beneficiary designation shall become effective only when filed in writing with
the Company during the Participant’s lifetime on a form provided by the
Company.  The filing of a new beneficiary designation form will cancel all
previously filed beneficiary designations relating to such Cycle or Cycles. 
Further, any finalized divorce of a Participant subsequent to the date of filing
of a beneficiary designation form in favor of Participant’s spouse shall
automatically revoke such designation without any action having to be taken by
the Participant.

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                                                Additionally, the spouse of a
Participant domiciled in a community property jurisdiction shall join in the
Participant’s designation of any Beneficiary other than his or her spouse.

                                                If a Participant fails to
designate a Beneficiary as provided above, or if his or her beneficiary
designation is revoked by divorce or otherwise without execution of a new
designation, or if all designated Beneficiaries predecease the Participant, then
the distribution of such benefits shall be made to the Participant’s estate in a
lump sum.  If the Participant’s designated Beneficiary survives the Participant
but dies before receiving a complete distribution of the Participant’s account,
the remaining Deferred Compensation Account balance shall be paid to the estate
of such Beneficiary in a lump sum.

10.                               Amendment and Termination of Plan

                                                10.01       Amendment.  The
Board of Directors may amend the Plan at any time in whole or in part, provided,
however, that, except as provided in Section 10.02, no amendment shall be
effective to decrease the benefits under the Plan payable to any Participant or
Beneficiary with respect to any Elective or Non-Elective Deferred Compensation
deferred prior to the date of the amendment.  Written notice of any amendment
shall be given to each Participant; provided, that no notice shall be required
with respect to amendments that are non-material or administrative in nature.

                                                10.02       Suspension of Plan

a.             Company’s Right to Suspend.  The Board of Directors may suspend
the Plan at any time.

b.             Payments Upon Suspension.  Upon any suspension of the Plan under
this Section 10.02, a Participant may no longer defer Cash Based or Stock Based
Compensation on a prospective basis and, with respect to compensation deferred
previously, the Company will pay benefits in accordance with Section 8.

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                                                10.03       Termination of Plan

                                                                a.            
Company’s Right to Terminate.  The Board of Directors may terminate the Plan
within the twelve (12) month period after a Change in Control Event.

                                                                                               
b.             Payments upon Termination.  Upon the termination of the Plan
under this Section 10.03, all Cash Based or Stock Based Compensation deferred
under the Plan shall be paid to the Participants within 30 days after the date
the Board of Directors acts to terminate the Plan.

11.          Miscellaneous

                                                11.01       Unsecured General
Creditor.  Participants and their beneficiaries, heirs, successors and assignees
shall have no legal or equitable rights, interests, or other claims in any
property or assets of the Company, nor shall they be beneficiaries of, or have
any rights, claims, or interests in any life insurance policies, annuity
contracts, or the policies therefrom owned or that may be acquired by the
Company (“policies”).  Such policies or other assets of the Company shall not be
held in any way as collateral security for the fulfilling of the obligations of
the Company under this Plan.  Any and all of the Company’s assets and policies
shall be and will remain general, unpledged, unrestricted assets of the
Company.  The Company’s obligation under the Plan shall be that of an unfunded
and unsecured promise of the Company to pay money in the future.

                                                11.02       Grantor Trust. 
Although the Company is responsible for the payment of all benefits under the
Plan, the Company, in its sole discretion, may contribute funds as it deems
appropriate to a grantor trust for the purpose of paying benefits under this
Plan.  Such trust may be irrevocable, but assets of the trust shall be subject
to the claims of creditors of the Company.  Such grantor trust shall not in any
event locate or transfer its assets to a location outside the United States nor
shall it provide that assets will be restricted to the provision of benefits
payable under the Plan in the event of a change in the Company’s financial
health.  To the extent any benefits provided under the Plan actually are paid
from the trust, the Company shall have no further obligation with respect
thereto, but to the

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extent not so paid, such benefits shall remain the obligation of, and shall be
paid by, the Company.  Participants shall have the status of unsecured creditors
on any legal claim for benefits under the Plan, and shall have no security
interest in any such grantor trust.

                                                11.03       Successors and
Mergers, Consolidations or Change in Control.  The terms and conditions of this
Plan shall inure to the benefit of the Participants and shall bind the Company,
its successors, assignees, and personal representatives.  If substantially all
of the stock or assets of the Company are acquired by another entity, or if the
Company is merged into, or consolidated with, another entity, then the
obligations created hereunder shall be obligations of the acquirer or successor
entity.

                                                11.04       Non-Assignability. 
Neither a Participant, nor any other person, shall have any right to commute,
sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber,
transfer, hypothecate, or convey in advance of the actual receipt, any amounts
payable hereunder, or any part thereof.  All rights to payments expressly are
declared to be unassignable and nontransferable.  No part of the amounts
payable, prior to actual payment, shall be subject to seizure or sequestration
for the payment of any debts, judgments, alimony or separate maintenance owed by
a Participant, or any other person, nor shall they be transferable by operation
of law in the event of a Participant’s, or any other person’s, bankruptcy or
insolvency.

                                                11.05       Employment or Future
Eligibility to Participate Not Guaranteed.  Nothing contained in this Plan, nor
any action taken hereunder, shall be construed as a contract of employment, or
as giving any Eligible Employee any right to be retained in the employ of the
Company.  Designation as an Eligible Employee may be revoked at any time by the
Company with respect to any compensation not yet deferred.

                                                11.06       Protective
Provisions.  A Participant will cooperate with the Company by furnishing any and
all information requested by the Company in order to facilitate the payment of
benefits hereunder, including taking such physical examinations as the Company
reasonably may deem necessary and taking such other relevant action as may be
requested by the Company.  If a Participant refuses to cooperate, the
Participant’s election

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to defer any Cash Based or Stock Based Compensation which has not yet been
deferred shall become null and void, and the Participant shall not be eligible
to make any further deferral elections under the Plan.

                                                11.07       Gender, Singular and
Plural.  All pronouns, and any variations thereof, shall be deemed to refer to
the masculine, feminine, or neuter, as the identity of the person(s) or
entity(ies) may require.  As the context may require, the singular may be read
as the plural and the plural as the singular.

                                                11.08       Captions.  The
captions to the articles, sections, and paragraphs of this Plan are for
convenience only and shall not control or affect the meaning or construction of
any of its provisions.

                                                11.09       Applicable Law. 
This Plan shall be governed and construed in accordance with the laws of the
State of New York (without reference to the principles of conflict of laws).

                                                11.10       Validity.  In the
event any provision of this Plan is found to be invalid, void, or unenforceable,
the same shall not affect, in any respect whatsoever, the validity of any other
provision of this Plan.

                                                11.11       Notice.  Any notice
or filing required or permitted to be given to the Committee shall be sufficient
if in writing and hand delivered, or sent by registered or certified mail, to
the principal office of the Company at 15 Mountain View Road, Warren, NJ  07059,
directed to the attention of the Compensation Manager (or any successor
thereto).  Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the receipt
for registration or certification.  Any notice to the Participant shall be
addressed to the Participant at the Participant’s residence address as
maintained in the Company’s records.  Any party may change the address for such
party here set forth by giving notice of such change to the other parties
pursuant to this Section 11.11.

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                IN WITNESS WHEREOF, The Chubb Corporation has caused this Plan
to be duly executed this          day of                         , 2005.

 

 

 

 

 

THE CHUBB CORPORATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:                                             

 

 

 

 

Title:                                             

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EXHIBIT A

 

DEFINITION OF CHANGE IN CONTROL EVENT

                “Change in Control Event” shall mean the occurrence of a change
in the ownership of The Chubb Corporation (the “Company”) (as described in
Section 1 below) and/or a change in the effective control of the Company (as
described in Section 2 below) and/or a change in the ownership of a substantial
portion of the assets of the Company (as described in Section 3 below).

 

                For purposes of Sections 1, 2 and 3 below, section 318(a) of the
Internal Revenue Code of 1986, as amended (the “Code”), shall apply to determine
stock ownership.  Stock underlying a vested option is considered owned by the
individual who holds the vested option (and stock underlying an unvested option
is not considered owned by the individual who holds the unvested option).  For
purposes of the preceding sentence, however, if a vested option is exercisable
for stock that is not substantially vested (within the meaning of Treas. Reg.
§§1.83-3(b) and (j)), the stock underlying the option is not treated as owned by
the individual who holds the option.

                                                1.     (a)       Change in the
Ownership of the Company.  A change in the ownership of the Company occurs on
the date that any one person, or more than one person acting as a group (as
described in subsection (b) below), acquires ownership of stock of the Company
that, together with stock held by such person or group, constitutes more than 50
percent of the total fair market value or total voting power of the stock of the
Company.  However, if any one person or more than one person acting as a group,
is considered to own more than 50 percent of the total fair market value or
total voting power of the stock of the Company, the acquisition of additional
stock by the same person or persons is not considered to cause a change in the
ownership of the Company (or to cause a change in the effective control of the
Company (within the meaning of Section 2 below)).  An increase in the percentage
of stock owned by any one person, or persons acting as a group, as a result of a
transaction in which the Company acquires its stock in exchange for property
will be treated as an acquisition of stock for purposes of this Section.  This
Section applies only when there is a transfer of stock of the Company (or
issuance of stock of the Company) and stock in the Company remains outstanding
after the transaction (see Section 3 below for rules regarding the transfer of
assets of the Company).

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                                                        (b)       Persons Acting
as a Group.  For purposes of subsection (a) above, persons will not be
considered to be acting as a group solely because they purchase or own stock of
the same corporation at the same time, or as a result of the same public
offering.  However, persons will be considered to be acting as a group if they
are owners of a corporation that enters into a merger, consolidation, purchase
or acquisition of stock, or similar business transaction with the Company.  If a
person, including an entity, owns stock in both corporations that enter into a
merger, consolidation, purchase or acquisition of stock, or similar transaction,
such shareholder is considered to be acting as a group with other shareholders
in a corporation prior to the transaction giving rise to the change and not with
respect to the ownership interest in the other corporation.

                                                        (c)       Stock
Ownership.  For purposes of determining stock ownership, see above.

                                                2.     (a)       Change in the
Effective Control of the Company.  Notwithstanding that the Company has not
undergone a change in ownership under Section 1 above, a change in the effective
control of the Company occurs on the date that either —

                                                                                                           
(i)        Any one person, or more than one person acting as a group (as
determined under subsection (d) below), acquires (or has acquired during the
12-month period ending on the date of the most recent acquisition by such person
or persons) ownership of stock of the Company possessing 35 percent or more of
the total voting power of the stock of the Company; or

                                                                                                           
(ii)       A majority of the members of the Company’s board of directors is
replaced during any 12-month period by directors whose appointment or election
is not endorsed by a majority of the

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members of the Company’s board of directors prior to the date of the appointment
or election.

                                                                                                           
In the absence of an event described in paragraph (i) or (ii) above, a change in
the effective control of the Company will not have occurred.

                                                                       
(b)       Multiple Changes in Control.  A change in effective control also may
occur in any transaction in which either of the two companies involved in the
transaction has a Change in Control under Section 1 above or Section 3 below. 
Thus, for example, assume Corporation P transfers more than 40 percent of the
total gross fair market value of its assets to Corporation O in exchange for 35
percent of O’s stock.  P has undergone a change in ownership of a substantial
portion of its assets under Section 3 below and O has a change in effective
control under this Section.

                                                                       
(c)       Acquisition of Additional Control.  If any one person, or more than
one person acting as a group, is considered to effectively control the Company
(within the meaning of this Section), the acquisition of additional control of
the Company by the same person or persons is not considered to cause a change in
the effective control of the Company (or to cause a change in the ownership of
the Company within the meaning of Section 1 above).

                                                                       
(d)       Persons Acting as a Group.  Persons will not be considered to be
acting as a group solely because they purchase or own stock of the same
corporation at the same time, or as a result of the same public offering. 
However, persons will be considered to be acting as a group if they are owners
of a corporation that enters into a merger, consolidation, purchase or
acquisition of stock, or similar business transaction with the Company.  If a
person, including an entity, owns stock in both corporations that enter into a
merger, consolidation, purchase or acquisition of stock, or similar transaction,
such shareholder is considered to be acting as a group with other shareholders
in a corporation only with respect to the ownership in that corporation prior to
the transaction giving rise to the change and not with respect to the ownership
interest in the other corporation.

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(e)       Stock Ownership.  For purposes of determining stock ownership, see
above.

                                                3.     (a)       Change in the
Ownership of a Substantial Portion of the Company’s Assets.  A change in the
ownership of a substantial portion of the Company’s assets occurs on the date
that any one person, or more than one person acting as a group (as determined in
subsection (c) below), acquires (or has acquired during the 12-month period
ending on the date of the most recent acquisition by such person or persons)
assets from the Company that have a total gross fair market value equal to or
more than 40 percent of the total gross fair market value of all of the assets
of the Company immediately prior to such acquisition or acquisitions.  For this
purpose, gross fair market value means the value of the assets of the Company,
or the value of the assets being disposed of, determined without regard to any
liabilities associated with such assets.

                                                                       
(b)       Transfers to a Related Person.  There is no Change in Control under
this Section when there is a transfer to an entity that is controlled by the
shareholders of the transferring company immediately after the transfer, as
provided in this subsection (b).  A transfer of assets by the Company is not
treated as a change in the ownership of such assets if the assets are
transferred to —

                                                                                                           
(i)        A shareholder of the Company (immediately before the asset transfer)
in exchange for or with respect to its stock;

                                                                                                           
(ii)       An entity, 50 percent or more of the total value or voting power of
which is owned, directly or indirectly, by the Company;

                                                                                                           
(iii)      A person, or more than one person acting as a group, that owns,
directly or indirectly, 50 percent or more of the total value or voting power of
all the outstanding stock of the Company; or

                                                                                                           
(iv)      An entity, at least 50 percent of the total value or voting power of
which is owned, directly or indirectly, by a person described in paragraph (iii)
above.

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For purposes of this subsection (b) and except as otherwise provided, a person’s
status is determined immediately after the transfer of the assets.  For example,
a transfer to a company in which the transferor Company has no ownership
interest before the transaction, but which is a majority-owned subsidiary of the
transferor Company after the transaction is not treated as a change in the
ownership of the assets of the transferor Company.

                                                                       
(c)       Persons Acting as a Group.  Persons will not be considered to be
acting as a group solely because they purchase assets of the same corporation at
the same time, or as a result of the same public offering.  However, persons
will be considered to be acting as a group if they are owners of a corporation
that enters into a merger, consolidation, purchase or acquisition of assets, or
similar business transaction with the Company.  If a person, including an entity
shareholder, owns stock in both corporations that enter into a merger,
consolidation, purchase or acquisition of stock, or similar transaction, such
shareholder is considered to be acting as a group with other shareholders in a
corporation only to the extent of the ownership in that corporation prior to the
transaction giving rise to the change and not with respect to the ownership
interest in the other corporation.

                                                                       
(d)       Stock Ownership.  For purposes of determining stock ownership, see
above.

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APPENDIX A

 

Investment Funds

 

 

The following Investment Funds are available under the Plan:

 

The Bond Index Account provides for a return based upon a hypothetical
investment in the Vanguard Bond Index Fund-Total Bond Market Portfolio.

 

The Capital Appreciation Account provides for a return based upon a hypothetical
investment in the Fidelity Contrafund.

 

The Equity Index Account provides for a return based upon a hypothetical
investment in the Fidelity Spartan U.S. Equity Index Fund.

 

The International Blended Equity Account provides for a return based upon a
hypothetical investment in the Fidelity Diversified International Fund.

 

The Stable Value Account provides for a return based on a hypothetical
investment in the Stable Value Portfolio of the Chubb Capital Accumulation Plan.

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