EX-10.1:



 




Exhibit 10.1



THE CHUBB CORPORATION



ASSET MANAGERS INCENTIVE COMPENSATION PLAN
(2005)



(As Amended and Restated, Effective
January 1, 2005)



     
WHEREAS, The Chubb
Corporation Investment Department/ Asset Managers, Inc.
Incentive Compensation Plan (the “Former Plan”) was
originally effective January 1, 1987;



     
WHEREAS, the Former
Plan provided incentive compensation, in accordance with the
purpose set forth in Section 1 below, to certain employees
of Chubb Asset Managers, Inc., a wholly-owned subsidiary of The
Chubb Corporation (the “Corporation”);



     
WHEREAS, the
employees who participated in the Former Plan who are still
employed by the Corporation’s controlled group of entities
are now employees of Federal Insurance Company, also a
wholly-owned subsidiary of the Corporation;



     
WHEREAS, the
Corporation desires to amend and restate the Former Plan to make
various changes to it so that its operation is more consistent
with the operation of other incentive plans sponsored by the
Corporation for its executives and to give its participants the
opportunity to defer the payment of the incentive compensation
awarded under it;



     
NOW, THEREFORE, the
Former Plan is hereby amended and restated and renamed “The
Chubb Corporation Asset Managers Incentive Compensation Plan
(2005),” all effective as of January 1, 2005, as set
forth on the following pages.



     
SECTION 1.     Purpose



     
The purpose of The Chubb Corporation Asset
Managers Incentive Compensation Plan (2005) (the
“Plan”) is to provide annual and long-term cash
incentives to key employees of Federal Insurance Company, a
wholly-owned subsidiary of the Corporation and currently the
sole participating employer in the Plan (and to key employees of
the Corporation or any of its other subsidiaries who become
participating employers in the Plan in the future, if any),
whose primary responsibility is to manage the Corporation’s
invested assets.



     
SECTION 2.     Definitions.
Capitalized terms used herein without definition shall have the
respective meanings set forth below:



     
“Annual Award”
means the Annual Award Segment of the
Target Award that is approved for payment by the OCC.



     
“Annual Award Segment”
means that portion of the Target Award
that is determined by evaluating the performance of each
Participant or group of Participants with respect to one or more
asset classes against specific performance goals and during a
one-year performance cycle.



     
“Board of Directors”
means the Board of Directors of the
Corporation.



     
“Cause”
means (i) the willful
failure of a Participant to perform substantially his or her
employment-related duties; (ii) a Participant’s
willful or serious misconduct that has caused or could
reasonably be expected to result in material injury to the
business or reputation of the Corporation or any of subsidiaries
or affiliates; (iii) a Participant’s conviction
of, or entering a plea of guilty or nolo contendere to, a crime
constituting a felony; or (iv) the breach by a
Participant of any written covenant or agreement with the
Corporation (or any participating employer) or of any material
written policy of the Corporation (or any participating
employer), provided that if a Participant is a party to an
employment or individual severance agreement with the
Corporation (or any participating employer) that defines the
term “Cause” then, with respect to any Annual Award or
Long-Term Award that may be paid to such Participant,
“Cause” shall have the meaning set forth in such
agreement.



     
“CFO”
means the Corporation’s Chief
Financial Officer.








 



     
“Change in Control”
means the first occurrence of any of
the following events after the effective date of this amended
and restated Plan:




		
	 	     
    (i) the acquisition by any person, entity or
    “group” (as defined in Section 13(d) of the
    Securities Exchange Act of 1934, as amended), other than the
    Corporation, any of its subsidiaries, and any employee benefit
    plan of the Corporation or its subsidiaries, of 20% or more of
    the combined voting power of the Corporation’s then
    outstanding voting securities;
    
	 
	 	     
    (ii) the persons who were serving as the
    members of the Board of Directors immediately prior to the
    commencement of a proxy contest relating to the election of
    directors or a tender or exchange offer for voting securities of
    the Corporation (the “Incumbent Directors”) shall
    cease to constitute at least a majority of the Board of
    Directors (or the board of directors of any successor to the
    Corporation) at any time within one year of the election of
    directors as a result of such contest or the purchase or
    exchange of voting securities of the Corporation pursuant to
    such offer, provided that any director elected to the Board of
    Directors, or nominated for election, by a majority of the
    Incumbent Directors then still in office and whose nomination or
    election was not made at the request or direction of the
    person(s) initiating such contest or making such offer shall be
    deemed to be an Incumbent Director for purposes of this
    clause (ii);
    
	 
	 	     
    (iii) the shareholders of the Corporation
    approve a merger, reorganization or consolidation of the
    Corporation, which is consummated and as a result of which
    persons who were shareholders of the Corporation immediately
    prior to such merger, reorganization or consolidation, do not,
    immediately thereafter, own, directly or indirectly and in
    substantially the same proportions as their ownership of the
    stock of the Corporation immediately prior to the merger,
    reorganization or consolidation, more than 50% of the combined
    voting power entitled to vote generally in the election of
    directors of (x) the merged, reorganized or consolidated
    Corporation or (y) an entity that, directly or indirectly,
    owns more than 50% of the combined voting power entitled to vote
    generally in the election of directors of the corporation
    described in subclause (x); and
    
	 
	 	     
    (iv) the shareholders of the Corporation
    approve a sale, transfer or other disposition of all or
    substantially all of the assets of the Corporation, which is
    consummated and immediately following which the persons who were
    shareholders of the Corporation immediately prior to such sale,
    transfer or disposition, do not own, directly or indirectly and
    in substantially the same proportions as their ownership of the
    stock of the Corporation immediately prior to the sale, transfer
    or disposition, of more than 50% of the combined voting power
    entitled to vote generally in the election of directors of
    (x) the entity or entities to which such assets are sold or
    transferred or (y) an entity that, directly or indirectly,
    owns more than 50% of the combined voting power entitled to vote
    generally in the election of directors of the entities described
    in subclause (x).
    




     
“Corporation”
means The Chubb Corporation.



     
“Effective Date”
means January 1, 2005. (The Plan
was originally effective January 1, 1987.)



     
“Long-Term Award”
means the Long-Term Award Segment of
the Target Award that is approved for payment by the OCC.



     
“Long-Term Award Segment”
means that portion of the Target Award
that is determined by evaluating the performance of each
Participant or group of Participants with respect to one or more
asset classes against specific performance goals and during a
specified performance cycle of more than one year.



     
“OCC”
means the Organization &
Compensation Committee of the Board of Directors.



     
“Participant”
means a key employee of Federal
Insurance Company (or any other participating employer in the
Plan) whose primary responsibility is to manage the
Corporation’s invested assets and who is selected by the
CFO for a potential award under the Plan.



     
“Pension Plan”
means the Pension Plan of The Chubb
Corporation, Chubb & Son Inc., and Participating
Affiliates.



     
“Plan Year”
means the Corporation’s fiscal
year.








 



     
“Qualified Termination”
means termination of employment due to
death, becoming “Disabled” (as defined in the Pension
Plan), or retirement on or after the Participant attains his or
her “Early Retirement Age” or “Normal Retirement
Date” (both as defined in the Pension Plan).



     
“Target Award”
means a cash bonus for a Participant
or a group of Participants that is recommended by the CFO to the
OCC that may become payable if specific performance goals are
met with respect to one or more asset classes. There may also be
potential cash bonuses payable for performance above or below
the Target Award level.



     
SECTION 3.     Administration



     
The Plan shall be administered by the OCC.
Subject to the provisions of the Plan, the OCC is authorized to
interpret the Plan, to establish, amend and rescind any rules
and regulations relating to the Plan, and to make all other
determinations necessary or advisable for the administration of
the Plan. The determination of the OCC in the administration of
the Plan, as described herein, shall be final and conclusive.
The OCC may, in its discretion, delegate its administrative
authority as it deems proper to the CFO, except that it may not
delegate its authority to approve Target Awards (and potential
awards above and below the Target Award level, if any) (all as
described below) or to make award determinations.



     
SECTION 4.     Covered
Employees



     
Potential awards under the Plan may be granted to
those key employees of Federal Insurance Company (and to key
employees of any other participating employer in the Plan, if
any) whose primary responsibility is to manage the
Corporation’s invested assets, as selected by the CFO in
his or her sole and absolute discretion.



     
SECTION 5.     Target
Award Determination



     
As soon as practicable after the beginning of
each Plan Year, the CFO shall designate Participants for such
Plan Year and recommend to the OCC Target Awards (and, if the
CFO so chooses, awards above and below the Target Award level)
for each Participant or group of Participants and with respect
to one or more asset classes. Target Awards shall include an
Annual Award Segment and a Long-Term Award Segment. The CFO
shall recommend the specific performance goals related to an
Annual Award Segment and Long-Term Award Segment to the OCC. The
recommended performance goals, Target Awards, and any awards
above or below the Target Award level shall be presented to the
OCC at its first meeting of each Plan Year (or earlier) by the
CFO (or his or her designee) for approval. The OCC shall
consider the recommendations, and either approve them as
presented or revise some or all of them before approving them.



     
SECTION 6.     Individual
Award Determination



     
After an Annual Award Segment and/or a Long-Term
Award Segment has elapsed, the CFO, in his or her discretion,
will recommend individual awards after comparing the individual
Participant’s or group of Participants’ performance
with respect to one or more asset classes as required for the
Target Awards (and for awards above and below the Target Award
level, if any). The CFO (or his or her designee) will present
the individual and/or group award recommendations to the OCC for
its approval at its first meeting of the respective Plan Year
(or earlier) for the Annual Award and Long-Term Award Segments.




		
	 	     
    (a) Annual Award — The
    Annual Award (if any) will be determined at the meeting
    described above by evaluating the Participant’s and/or
    group of Participants’ performance with respect to one or
    more asset classes for the immediately preceding Annual Award
    Segment.
    
	 
	 	     
    (b) Long-Term Award — The
    Long-Term Award (if any) will be determined at the meeting
    described above by evaluating the Participant’s and/or
    group of Participants’ cumulative performance with respect
    to one or more asset classes for the Long-Term Award Segment
    that ended on the December 31 before the date of the
    meeting.
    









 



     
SECTION 7.     Award
Payment



     
Annual Awards and Long-Term Awards that have been
approved in accordance with Sections 6(a) and 6(b),
respectively, shall be paid as follows:




		
	 	     
    (a) Annual Award Payment. Except to
    the extent a Participant defers all or a portion of such payment
    (pursuant to Section 7(c)), Annual Awards shall be paid in
    cash as soon as practicable after the OCC has approved the
    Annual Award pursuant to Section 6(a).
    
	 
	 	     
    (b) Long-Term Award Payment. Except
    to the extent a Participant defers all or a portion of such
    payment (pursuant to Section 7(c)), Long-Term Awards shall
    be paid in cash as soon as practicable after the OCC’s
    first meeting of the fourth Plan Year beginning after the end of
    the Long-Term Award Segment.
    
	 
	 	     
    (c) Participants may defer all or a portion
    of an Annual Award and/or a Long-Term Award that otherwise
    becomes payable under Section 6(a) and/or
    Section 6(b), respectively, under the terms and conditions
    of The Chubb Corporation Key Employee Deferred Compensation Plan
    (2005), or any successor plan or program.
    
	 
	 	     
    (d) Payments under Sections 7(a) and
    7(b) will only be made to those Participants who are eligible to
    receive such payments pursuant to Sections 8(g) and 8(h).
    




     
SECTION 8.     Miscellaneous
Provisions



     
(a) Except in the event of the death of a
Participant, the rights and interests of a Participant under the
Plan may not be assigned, encumbered or transferred.



     
(b) No employee or other person shall have
any right to be granted a potential award under the Plan.
Neither the Plan nor any action taken thereunder shall be
construed as giving any employee or other person any right to
continued employment by the Corporation or any of its
subsidiaries.



     
(c) Award payments shall be treated as
compensation under the Excess Benefit Plan of The Chubb
Corporation, Chubb & Son Inc., and Participating
Affiliates, but shall not be deemed compensation in determining
the amount of any entitlement under any other employee benefit
plan of the Corporation, unless so provided under the terms of
such plan.



     
(d) All payments made under the Plan shall
be made by the Corporation from its general assets. The
Corporation shall have the right to deduct from all awards paid
under the Plan any taxes required by law to be withheld with
respect to such awards.



     
(e) The Plan shall be construed in
accordance with and governed by the laws of the state of New
Jersey (without reference to the principles of conflict of laws).



     
(f) Each Participant shall designate in a
manner determined by the OCC a beneficiary to receive payments
due hereunder in the event of such Participant’s death.
Each beneficiary designation shall be substantially in the form
set forth in Appendix A attached hereto and shall be
effective only when filed with the OCC during the
Participant’s lifetime. Any beneficiary designation may be
changed by a Participant without the consent of any previously
designated beneficiary or any other person by the filing of a
new beneficiary designation with the OCC. The filing of a new
beneficiary designation shall cancel all beneficiary
designations previously filed. If a Participant fails to
designate a beneficiary or if no designated beneficiary survives
the Participant, the beneficiary shall be the estate of the
Participant.



     
(g) Conditions to Annual Award Payment



     
(i) Except as described below, and unless
otherwise determined by the OCC in its sole discretion,
Participants who terminate employment (either voluntarily or
involuntarily) prior to the Annual Award payment date set forth
in Section 7(a) shall not receive payment with respect to
any potential or approved Annual Award.








 



     
(ii) Except as otherwise determined by the
OCC in its sole discretion, if a Participant experiences a
Qualified Termination within the first six months of an Annual
Award Segment, the Participant shall not receive payment of the
potential Annual Award.



     
(iii) The CFO may, in his or her sole
discretion, permit a Participant who experiences a Qualified
Termination on or after the first day of the seventh month (but
on or before the last day) of an Annual Award Segment, to
receive (provided the OCC, pursuant to Section 6(a),
determines that an Annual Award should be paid for such Annual
Award Segment) a prorated portion of his or her Annual Award,
payable in accordance with Section 7(a). A
Participant’s prorated Annual Award shall be determined by
multiplying the amount of the Annual Award by a fraction, the
numerator of which shall be the number of full calendar months
from the start of the Annual Award Segment through the date of
the Qualified Termination, and the denominator of which shall be
12.



     
(iv) Except as otherwise determined by the
OCC in its sole discretion, a Participant who experiences a
Qualified Termination after an Annual Award Segment has ended
but before such Annual Award has been paid shall be entitled to
receive (provided the OCC, pursuant to Section 6(a),
determines that an Annual Award should be paid for such Annual
Award Segment) payment of such Annual Award in accordance with
Section 7(a).



     
(v) Except as otherwise determined by the
OCC in its sole discretion, a Participant whose employment is
involuntarily terminated and whose position is classified as
“outsourced” on the Corporation’s (or applicable
participating employer’s) payroll records after an Annual
Award Segment has ended but before the Annual Award has been
paid shall be entitled to receive (provided the OCC, pursuant to
Section 6(a), determines that an Annual Award should be
paid for such Annual Award Segment) payment of such Annual Award
in accordance with Section 7(a).



     
(vi) Except as otherwise determined by the
OCC in its sole discretion, a Participant whose employment is
involuntarily terminated for reasons other than Cause after the
Annual Award Segment but prior to the Annual Award payment date
(set forth in Section 7(a)) shall be entitled to receive
(provided the OCC, pursuant to Section 6(a), determines
that an Annual Award should be paid for such Annual Award
Segment) payment of such Annual Award in accordance with
Section 7(a).



     
(h) Conditions to Long-Term Award
Payment



     
(i) Except as described below, and unless
otherwise determined by the OCC in its sole discretion,
Participants who terminate employment (either voluntarily or
involuntarily) prior to the Long-Term Award payment date set
forth in Section 7(b) shall not receive payment with
respect to any potential or approved Long-Term Award.



     
(ii) Except as otherwise determined by the
OCC in its sole discretion, if a Participant experiences a
Qualified Termination within the first six months of a Long-Term
Award Segment, the Participant shall not receive payment of the
potential Long-Term Award.



     
(iii) Except as otherwise determined by the
OCC in its sole discretion, a Participant who experiences a
Qualified Termination on or after the first day of the seventh
month (but on or before the last day) of a Long-Term Award
Segment shall receive (provided the OCC, pursuant to
Section 6(b), determines that a Long-Term Award shall be
paid for such Long-Term Award Segment) a prorated portion of his
or her Long-Term Award, payable as soon as practicable after the
OCC determines, pursuant to Section 6(b), that a Long-Term
Award shall be paid for such Long-Term Award Segment. A
Participant’s prorated Long-Term Award shall be determined
by multiplying the amount of the Long-Term Award by a fraction,
the numerator of which shall be the number of full calendar
months from the start of the Long-Term Award Segment through the
date of the Qualified Termination, and the denominator of which
shall be 60.



     
(iv) Except as otherwise determined by the
OCC in its sole discretion, a Participant who experiences a
Qualified Termination after a Long-Term Award Segment has ended
but before such Long-Term Award has been paid shall be entitled
to receive (provided the OCC, pursuant to Section 6(b), has
determined that a Long-Term Award should be paid for such
Long-Term Award Segment) payment of such Long-Term Award as soon
as practicable after his or her Qualified








 




Termination (or as soon as practicable after the
OCC determines that a Long-Term Award should be paid for such
Long-Term Award Segment if such Qualified Termination occurs
prior to the OCC’s approval); provided that no such payment
may be made later than 2 1/2 months after the end of the Plan
Year in which the Qualified Termination occurs.




     
(v) Except as otherwise determined by the
OCC in its sole discretion, a Participant whose employment is
involuntarily terminated and whose position is classified as
“outsourced” on the Corporation’s (or applicable
participating employer’s) payroll records after a Long-Term
Award Segment has ended but before the Long-Term Award has been
paid shall be entitled to receive (provided the OCC, pursuant to
Section 6(b), has determined that a Long-Term Award should
be paid for such Long-Term Award Segment) payment of such
Long-Term Award as soon as practicable after his or her
termination of employment (or as soon as practicable after the
OCC determines that a Long-Term Award should be paid for such
Long-Term Award Segment if such termination of employment occurs
prior to the OCC’s approval); provided that no such payment
may be made later than 2 1/2 months after the end of the Plan
Year in which the termination of employment occurs.



     
(vi) Except as otherwise determined by the
OCC in its sole discretion, a Participant whose employment is
involuntarily terminated for reasons other than for Cause after
the beginning of the fourth plan year beginning after the end of
the Long-Term Segment but prior to the Long-Term Award payment
date (set forth in Section 7(b)) shall be entitled to
receive (provided the OCC, pursuant to Section 6(b), has
determined that a Long-Term Award should be paid for such
Long-Term Award Segment) payment of such Long-Term Award as soon
as practicable after his or her termination of employment.



     
(i) All potential Long-Term Awards and
Long-Term Award Segments that are in progress as of
January 1, 2005 shall be subject to the terms and
conditions of the Plan, as amended and restated effective
January 1, 2005. The OCC may, in its sole discretion,
adjust the Target Awards (and awards above or below the Target
Award level, if any) related to such potential and outstanding
Long-Term Awards as it desires or deems necessary. Long-Term
Award Segments that have been completed but for which Long-Term
Awards have not been paid as of the Effective Date shall be
subject to the terms and conditions of the Plan as in effect
prior to this amendment and restatement.



     
(j) Upon a Change in Control that occurs
during an Annual Award Segment or Long-Term Award Segment, at
least the Target Award value of any potential and outstanding
Annual Awards and Long-Term Awards subject to this Plan shall
become due and payable, subject to any upward (but not downward)
adjustment that the CFO, in his or her sole discretion, believes
should be made to reflect the Change in Control more equitably
and/or to reflect a Participant’s actual performance from
the end of the Annual Award Segment or Long-Term Award Segment
to the Change in Control. Upon a Change in Control that occurs
after an Annual Award Segment and/or Long-Term Award Segment
(provided that the OCC determines, pursuant to
Sections 6(a) and/or 6(b) that an Annual Award and/or
Long-Term Award shall be paid for such Annual Award Segment
and/or Long-Term Award Segment), such Award(s) shall become due
and payable. Payments made on account of a Change in Control
shall be made in cash as soon as practicable after the Change in
Control becomes effective.



     
(k) The Board of Directors may amend or
terminate the Plan, in whole or in part, at any time.



     
(l) Nothing contained in this Plan, nor any
action taken hereunder, shall be construed as a contract of
employment, or as giving any Participant any right to be
retained in the employ of the Corporation, as applicable.



     
(m) If the Corporation undergoes a Change in
Control pursuant to subsections (iii) or (iv) of such
definition, then the obligations created hereunder shall become
obligations of the acquirer or successor entity.








 



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




		
	 	
    THE CHUBB CORPORATION
    





			
	 	By: 	




		
	 	
    






			
	 	Title: 	




		
	 	
    










 




APPENDIX A




THE CHUBB CORPORATION



ASSET MANAGERS INCENTIVE COMPENSATION PLAN
(2005)




(As Amended and Restated, Effective
January 1, 2005)



BENEFICIARY DESIGNATION FORM


     
This Form is for your use under The Chubb
Corporation Asset Managers Incentive Compensation Plan (2005)
(the “Plan”) to name a beneficiary for the Annual and
Long-Term Award payments that may be payable to you from the
Plan. You should complete the Form, sign it, have it signed by
your employer, and date it.




*          *          *          *



     
I understand that in the event of my death before
I receive either the Annual and/or Long-Term Award payment that
may be payable to me under the Plan, the Annual and/or Long-Term
Award payment will be paid to the beneficiary designated by me
below or, if none or if my designated beneficiary predeceases
me, to my estate. I further understand that the last beneficiary
designation filed by me during my lifetime and accepted by The
Chubb Corporation Board of Directors’
Organization & Compensation Committee cancels all prior
beneficiary designations previously filed by me under the Plan.



     
I hereby state that
                                         
[insert name], residing at
                                                                                                      
[insert address], whose Social Security number is
                                        
, is designated as my beneficiary.




	 	 	 
	
	 	

	
    
    Signature of Participant
    

    	 	
    Date
    
	 	 	
    ACCEPTED:
    
	 	 	

	 	 	
    The Chubb Corporation Board of Directors’
    Organization & Compensation Committee
    
	 	 	
    

    By: 
	 	 	

	 	 	
    

    Date: 
	 	 	





A-1