Exhibit 10.3


THE CHUBB
CORPORATION 

LONG-TERM STOCK INCENTIVE PLAN (2004)


Performance Share Award Agreement


This PERFORMANCE SHARE
AWARD AGREEMENT (this “Agreement”), dated as of                       ,
2007, 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 Performance Shares 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 Performance Shares on the terms and conditions
set forth herein.


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


1.             Grant of Performance Shares.  Pursuant to the provisions of the Plan, the
Corporation on the date set forth above (the “Grant Date”) has granted
and hereby evidences the grant to the Participant, subject to the terms and
conditions set forth herein and in the Plan, of an Award of
[             ]
Performance Shares (the “Award”).


2.             Payment
of Earned Performance Shares.


(a)            Settlement of Performance Shares.  Subject to the provisions of this
Section 2, Section 4 and Section 5, the Payment Value of each
Performance Share covered by the Award which the Committee determines, in
writing, to be earned pursuant to Section 3 shall be paid by the
Corporation on a date (the “vesting date”) as soon as administratively
practicable after (but no later than 21⁄2 months after the calendar year end
coincident with) the end of the Performance Cycle described in Section
3(a).  Payments hereunder shall be made in
cash, shares of Stock, or a combination thereof, as determined by the Committee
in its sole discretion.  Notwithstanding
the aforementioned, the vesting date shall be the last day of the Performance
Cycle if (i) the Participant experiences a Qualifying Termination of
Employment on or after December 31, 2007 or (ii) the Committee determines,
in its discretion, pursuant to Section 4(b), that the Participant will not
forfeit his or her rights to Performance Shares upon his or her termination of
employment for other reasons; in either case, provided the Committee
determines, in writing, that Performance Shares are to be awarded hereunder.













(b)           Voluntary Deferral.  Notwithstanding the provisions of Section
2(a), the Participant may elect, by election filed with the Corporation under
its Key Employee Deferred Compensation Plan (2005) (or any successor plan or
program) (the “Deferred Compensation Plan”), and on a form acceptable to the
Committee, not later than June 30, 2009 and subject to such terms and
conditions as the Committee may specify, to have any payment that may become
due in respect of Performance Shares covered by the Award deferred until such
later time as shall be specified in such election.


3.             Vesting Criteria Applicable to Performance Shares.


(a)           Performance Cycle.  The Performance Cycle for this Award shall
commence on January 1, 2007, and shall end on December 31, 2009.


(b)           Performance Goal.  The Performance Goal for the Performance
Cycle is the total return per share of Stock to the Corporation’s shareholders,
inclusive of dividends paid (regardless of whether paid in cash or property,
which dividends shall be deemed reinvested in Stock), during the Performance
Cycle in comparison to the total return per share of stock, inclusive of
dividends paid (regardless of whether paid in cash or property, which dividends
shall be deemed reinvested in stock), achieved by the companies (i) which
are in the Standard & Poors 500 Index (the “S&P 500”) on the
date the Performance Cycle begins and (ii) which continue to file public
reports pursuant to the Act for the entirety of the Performance Cycle (such
companies, the “Comparison Companies”). 
For the avoidance of doubt, a company included in the S&P 500 on the
date the Performance Cycle commences that is not included in the S&P 500 at
the conclusion of the Performance Cycle will be a Comparison Company as long as
it files public reports pursuant to the Act for the entire Performance Cycle
(and any company first included in the S&P 500 after the start of the
Performance Cycle would not be a Comparison Company).


(c)           Comparison of Total Shareholder
Return.  Except as provided in
Section 5, the Performance Shares covered by the Award shall be deemed
earned based on where the Corporation’s total shareholder return during the
Performance Cycle ranks in relation to the total shareholder returns of the
Comparison Companies during such period. 
For purposes of calculating the total shareholder return of the
Corporation and the Comparison Companies during the Performance Cycle, the value
of each such company’s stock at the beginning and end of the Performance Cycle
shall be established based on the average of the averages of the high and low
trading prices of the applicable stock on the principal exchange on which the
stock trades for the 15 trading days occurring immediately prior to the
beginning or end of the Performance Cycle, as the case may be.  Such averages for each such company
(including the Corporation) shall be referred to herein as the “Beginning
Average Value” and the “Ending Average Value.”  As soon as practicable after the completion
of the Performance Cycle, the total shareholder returns of the Comparison
Companies will be calculated and ranked from highest to lowest.  The Corporation’s total shareholder return
will then be ranked in terms of which percentile it would have placed in among
the Comparison Companies.  In calculating
the total shareholder return with respect to either the Corporation or any of
the 



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Comparison
Companies, the Committee shall make or shall cause to be made such appropriate
adjustments to the calculation of total shareholder return for such entity
(including, without limitation, adjusting the Beginning Average Value) as shall
be necessary or appropriate to avoid an artificial increase or decrease in such
return as a result of a stock split (including a reverse stock split),
recapitalization or other similar event affecting the capital structure of such
entity that does not involve the issuance of the entity’s securities in
exchange for money, property or other consideration.


(d)           Percentage of Performance Shares
Earned.  The extent to which
Performance Shares shall become earned on the vesting date described in
Section 2(a) shall be determined according to the following schedule:




	
  Relative Performance Level

  Percentile

  	
   

  	
  Percent of Performance

  Shares Earned

  
	
  85th or higher

  	
   

  	
  200%

  
	
  50th

  	
   

  	
  100%

  
	
  25th

  	
   

  	
  50%

  
	
  Under 25th

  	
   

  	
  0%

  






 


To the extent that the Corporation’s total shareholder return ranks in
a percentile between the 25th and the 50th percentile, or between the 50th and the 85th percentile, of
comparative performance, then the number of Performance Shares earned on the
vesting date shall be determined by multiplying the relative percentile of
comparative performance achieved by the Corporation by two (e.g., if the
Corporation’s total shareholder return would have placed in the 40th percentile, then 80% of the Performance Shares
covered by the Award become earned on the vesting date; if the Corporation’s
total shareholder return would have placed in the 75th percentile, then 150% of the Performance
Shares covered by the Award become earned on the vesting date).


4.             Termination of Employment.  Except as provided in this Section 4 or
in Section 5, the Participant shall not have any right to any payment
hereunder unless the Participant is employed by the Corporation or a Subsidiary
on the date the Performance Shares subject to this Award are settled pursuant
to Section 2(a) (or would have been settled without regard to any other
provision of Section 2).


(a)           Qualifying Termination of
Employment.  If the Participant’s
employment terminates by reason of a Qualifying Termination of Employment on or
after December 31, 2007, the Participant shall be entitled to receive the same
Payment Values (without pro-ration) in respect of the Performance Shares
covered by the Award as would have been payable, and at the same time and
subject to the same conditions, had his or her employment continued until the
end of the Performance Cycle.


(b)           Termination for any Other Reason.  Unless otherwise determined by the Committee,
if the Participant’s employment is terminated prior to the date on which the
Performance Shares subject to this Award are settled pursuant to 



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Section 2(a) (or
would have been settled without regard to any other provision of
Section 2) for any reason other than a Qualifying Termination of
Employment occurring on or after December 31, 2007, all of the Participant’s
rights to Performance Shares covered by the Award shall be immediately
forfeited and canceled without further action by the Corporation or the
Participant as of the date of such termination of employment.  Notwithstanding the preceding sentence, the
Participant’s Performance Shares shall be immediately forfeited and cancelled
without further action by the Corporation or the Participant upon the
Participant’s termination of employment for Cause.  For purposes of the Award, the term “Retirement”
shall mean a termination of the Participant’s employment other than for Cause
at or after the Participant’s normal retirement age or earliest retirement
date, in each case as specified in the Corporation’s Pension Plan.  Accordingly, all of the Participant’s
Performance Shares shall be forfeited and cancelled without further action by
the Corporation or the Participant as of the date a Participant is terminated
for Cause, whether prior to, on, or after the Participant’s normal retirement
age or earliest retirement date, in each case as specified in the Corporation’s
Pension Plan.


(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 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 4(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.


5.             Change
in Control.  Notwithstanding anything
in Section 2 or 3 to the contrary, in the event a Change in Control
occurs, Performance Shares covered by the Award not previously forfeited
pursuant to Section 4 shall be treated in accordance with Section 9 of the
Plan, in which case the Performance Shares covered by the Award shall become earned
and payable as provided in Sections 9(a)(ii) 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. 
Notwithstanding the foregoing, if the Performance Shares shall become
earned and payable as provided in Sections 9(a)(ii) and 9(a)(iii) of the Plan,
but the accelerated 



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payment of the
Performance Shares would subject the Participant to taxation under Section 409A
of the Code, then the payment due to the Participant shall not be made until
the earliest permissible payment date (including, but not limited to, the
vesting date) that would not subject the Participant to taxation under Section
409A of the Code.


6.             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 such manner as the Committee may deem
equitable (as determined in its sole discretion), adjust any or all of the
number and kind of Performance Shares subject to this Award and/or, if deemed
appropriate, make provision for a cash payment to the person holding this
Award, provided, however, that, unless the Committee determines otherwise, the
number of Performance Shares subject to this Award shall always be a whole
number.


7.             Restrictions
on Transfer.  Performance Shares may
not be sold, assigned, hypothecated, pledged or otherwise transferred or
encumbered in any manner except (i) by will or the laws of descent and
distribution or (ii) to a “Permitted Transferee”(as defined in
Section 11(b) of the Plan) with the permission of, and subject to such
conditions as may be imposed by, the Committee.


8.             No
Rights as a Shareholder.  Until
shares of Stock are issued, if at all, in satisfaction of the Corporation’s
obligations under this Award, in the time and manner specified in Section 2 or
5, the Participant shall have no rights as a shareholder.


9.             Notice.  Any notice given hereunder to the Corporation
shall be addressed to The Chubb Corporation, Attention Secretary, 15 Mountain
View Road, P.O. Box 1615, Warren, New Jersey 07061-1615, and any notice
given hereunder to the Participant shall be addressed to the Participant at the
Participant’s address as shown on the records of the Corporation.


10.           Restrictive
Covenants.  As a condition to the
receipt of the Award made hereby, the Participant agrees to be bound by the
terms and conditions hereof and of the Plan, including the following
restrictive covenants:


(a)           Non-Disclosure. 
The Participant shall not, without prior written authorization from the
Corporation’s Chief Executive Officer, disclose to anyone outside the
Corporation, or use (other than in the Corporation’s or any of the Subsidiaries’
business), any confidential information or material relating to the business of
the Corporation or any of the Subsidiaries that is acquired by the Participant
either during or after employment with the Corporation or any of the
Subsidiaries.



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(b)           Non-Solicitation.  Unless the Participant has received prior
written authorization from the Corporation’s Chief Executive Officer, the
Participant shall not during his or her employment or service with the
Corporation or any of the Subsidiaries and for a period of one (1) year
following any termination of such employment or service relationship (the “Restricted
Period”):


(i)            Directly or
indirectly, employ, solicit, persuade, encourage or induce any individual
employed by the Corporation or any of the Subsidiaries to become employed by or
associated with any person or entity other than the Corporation or any of the
Subsidiaries; or


(ii)           Directly or indirectly,
solicit business on behalf of a Competitive Business from any Customer with
whom the Participant has had, or employees reporting to the Participant have
had, personal contact or dealings with on behalf of the Corporation or any of
the Subsidiaries during the one (1) year period preceding the Restricted
Period.


“Customer” shall mean a person or entity to
which the Corporation or any of the Subsidiaries is at the time providing
services.


“Competitive Business” shall mean any person or
entity (including any joint venture, partnership, firm, corporation or limited
liability company) that engages, directly or indirectly, in the property and
casualty insurance business, including, but not limited to, commercial
insurance, personal insurance, specialty insurance, surety, excess and surplus
lines and/or reinsurance, and/or any other business which is a significant
business of, the Corporation and the Subsidiaries as of the date of the
Participant’s termination of employment or service with the Corporation or any
of the Subsidiaries; provided however, that a business set forth above shall
not be considered a “Competitive Business” in the event that, as of the date of
the Participant’s termination of employment or service with the Corporation or
any of the Subsidiaries, such business is no longer a business of the
Corporation or any of the Subsidiaries.


(c)           Inventions.  A Participant shall disclose promptly and
assign to the Corporation all right, title, and interest in any invention or
idea, patentable or not, made or conceived by the Participant during employment
by the Corporation or any of the Subsidiaries, relating in any manner to the
actual or anticipated business, research or development work of the Corporation
or any of the Subsidiaries and shall do anything reasonably necessary to enable
the Corporation or any of the Subsidiaries to secure a patent, copyright or any
other intellectual property rights where appropriate in the United States and
in foreign countries.


(d)           Relief with Respect to Violations
of Covenants.  Failure to comply with
the provisions of this Section 10 at any point before payment in respect
of earned Performance Shares covered by the Award is made pursuant to the
provisions of Section 2 or 5 shall cause all Performance Shares covered by
the Award to be cancelled and rescinded without any payment therefor.  For the avoidance of doubt, following a
failure to comply with this Section 10, payments in respect of any portion of
the 



 6
 









Performance Shares
covered by the Award that have been deferred under the Deferred Compensation
Plan in accordance with Section 2 hereof shall be forfeited, and accordingly
the Participant shall have no further right to receive any such
payment(s).  In the event that all or any
portion of the Performance Shares covered by this Award shall have been settled
in accordance with the terms of this Agreement within twelve (12) months of the
date on which any breach by the Participant of any of the provisions of this
Section 10 shall have first occurred, the Committee may require that the
Participant repay (with interest or appreciation (if any), as applicable,
determined up to the date payment is made), and the Participant shall promptly
repay, to the Corporation the value of any cash or property (including the Fair
Market Value of any Stock) conveyed to the Participant within such period in
respect of such Performance Shares. 
Additionally, the Participant agrees that the Corporation shall be
entitled to an injunction, restraining order or such other equitable relief restraining
the Participant from committing any violation of the covenants or obligations
contained in this Section 10.  These
rescission rights and injunctive remedies are cumulative and are in addition to
any other rights and remedies the Corporation may have at law or in
equity.  The Participant acknowledges and
agrees that the covenants and obligations in this Section 10 relate to
special, unique and extraordinary matters and that a violation or threatened
violation of any of the terms of such covenants or obligations will cause the
Corporation and the Subsidiaries irreparable injury for which adequate remedies
are not available at law.


(e)           Reformation.  The Participant agrees that the provisions of
this Section 10 are necessary and reasonable to protect the Corporation in
the conduct of its business.  If any
restriction contained in this Section 10 shall be deemed to be invalid,
illegal or unenforceable by reason of the extent, duration or geographical
scope hereof, or otherwise, then the court making such determination shall have
the right to reduce such extent, duration, geographical scope or other
provisions hereof, and in its reduced form such restriction shall then be
enforceable in the manner contemplated hereby.


11.           Withholding.  The Corporation shall have the right to
deduct from all amounts paid to the Participant in cash in respect of
Performance Shares covered by the Award any amount of taxes required by law 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.  In the case of
any payments of Performance Shares covered by the Award in the form of Stock,
at the Committee’s discretion, the Participant shall be required to either pay
to the Corporation the amount of any taxes required to be withheld with respect
to such Stock or, in lieu thereof, the Corporation shall have the right to
retain (or the Participant may be offered the opportunity to elect to tender)
the number of shares of Stock whose Fair Market Value equals such amount
required to be withheld.


12.           Committee Discretion; Delegation.  Notwithstanding anything contained in this
Agreement to the contrary, the Committee may take any action that is authorized
under the terms of the Plan that is not contrary to the express terms hereof,
including permitting the Participant to receive (upon such terms and conditions
as the Committee shall determine) all or a portion of the Performance Shares
covered by the 



 7
 









Award, up to the
maximum amount that would have been payable, despite the termination of the
Participant’s employment prior to the settlement date specified pursuant to
Section 2(a).  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.


13.           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.


14.           Governing
Law.  The Award and the legal
relations between the parties shall be governed by and construed in accordance
with the laws of the State of New Jersey (without reference to the principles
of conflicts of law).


15.           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.  This Agreement may be
executed by the Participant by means of manual signature, electronic signature
or electronic acceptance.


16.           Binding
Effect; Benefits. This Agreement shall be binding upon and inure to the
benefit of the Corporation and the Participant and their respective successors
and permitted assigns.  Nothing in this
Agreement, express or implied, is intended or shall be construed to give any
person other than the Corporation or the Participant or their respective
successors or assigns any legal or equitable right, remedy or claim under or in
respect of any agreement or any provision contained herein.


17.           Amendment.  This Agreement may not be altered, modified
or amended except by a written instrument signed by the Corporation and the
Participant.  Notwithstanding the
foregoing sentence, to the extent determined necessary or advisable by the
Committee in its sole discretion, the Agreement shall be interpreted to the
extent possible to comply with the provisions of Section 409A of the Code (or,
if applicable, to avoid application of such Code section).  Participant hereby consents to any amendments
to this Agreement that the Committee, in its sole discretion, determines are
necessary or advisable to comply with the provisions of Section 409A of the
Code (or, if applicable, to avoid application of such Code section).  Adjustments made pursuant to this Section 17
shall, to the extent determined necessary or advisable in the sole discretion
of the Committee, be made in compliance with the requirements of Section 409A
of the Code (or, if applicable, to avoid application of such Code section).  As soon as is administratively practicable
following the date of any such amendments, the Corporation shall notify the
Participant of any amendments to this Agreement made pursuant to this Section
17 in order to comply with Section 409A of the Code (or, if applicable, to
avoid application of such Code section); provided, however, that failure to
provide such notice shall not invalidate or otherwise impair the enforceability
of such amendments.  For purposes of this
Section 17, Section 409A of the Code refers to such Code section as well 



 8
 









as to any successor or
companion provisions thereto and any regulations promulgated thereunder.


18.           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:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Chairman,
  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Participant

  



 



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