Exhibit 10.10


 


THE
CHUBB CORPORATION

LONG-TERM STOCK INCENTIVE PLAN

FOR NON-EMPLOYEE DIRECTORS (2004)


 


PERFORMANCE
SHARE AWARD AGREEMENT


 


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


 


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


 


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


 


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


 


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


 


2.                                       Payment
of Earned Performance Shares.


 


(a)                                  Settlement
of Performance Shares.  Subject to
the provisions of this Section 2 and Section 3(e), the Payment Value
of each Performance Share covered by the Award which the Committee determines,
in writing, to be earned pursuant to Section 3 below shall be paid by the
Corporation as soon as administratively practicable after (but no later than 21⁄2
months after the calendar


 










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


 





















 


year end coincident with)
the end of the Performance Cycle described in Section 3(a).  Payments hereunder shall be made in cash,
shares of Stock, or a combination thereof, as determined by the Committee in
its sole discretion.


 


(b)                                 Voluntary
Deferral.  Notwithstanding the
provisions of Section 2(a), the Participant may elect, by election filed
with the Corporation (and on a form acceptable to the Committee) not later than
June 30, 2007 and subject to such terms and conditions as the Committee
may specify, to have any payment that may become due in respect of Performance
Shares covered by the Award deferred until such later time as shall be
specified in such election (or, if applicable, the date determined pursuant to Section 2(c)).


 


(c)                                  Mandatory Deferral of Payment of Earned Performance
Shares.  Notwithstanding anything contained in Section 2(a)
or 2(b) to the contrary (unless the payment date elected pursuant to Section 2(b)
is later than the payment date specified herein, in which case Section 2(b)
shall control), if the Corporation’s Ending Average Value is less than the
Corporation’s Beginning Average Value (as such terms are defined in Section 3(c)),
no settlement shall be made in respect of any Performance Shares earned in
accordance with Section 3  until the first date the
Participant has ceased to be a member of the Board of Directors and has
separated from service from the Corporation and all other members of the
Corporation’s controlled group of entities. 
Once the condition described in the immediately preceding sentence has
been satisfied, settlement shall occur as soon as practicable thereafter, in
cash, shares of Stock, or a combination thereof, as determined by the Committee
in its sole discretion.


 


3.                                       Vesting
Criteria Applicable to Performance Shares.


 


(a)                                  Performance
Cycle.  The Performance Cycle for
this Award shall commence on May 1, 2005, and shall end on December 31,
2007.


 


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


 





















 


conclusion of the
Performance Cycle will be a Comparison Company as long as it files public
reports pursuant to the Act for the entire Performance Cycle (and any company
first included in the S&P 500 after the start of the Performance Cycle will
not be a Comparison Company).


 


(c)                                  Comparison
of Total Shareholder Return.  Except
as provided in Section 4, the Performance Shares covered by the Award
shall be deemed earned based on where the Corporation’s total shareholder
return during the Performance Cycle ranks in relation to the total shareholder
returns of the Comparison Companies during such period.  For purposes of calculating the total
shareholder return of the Corporation and the Comparison Companies during the
Performance Cycle, the value of each such company’s stock at the beginning and
end of the Performance Cycle shall be established based on the average of the
averages of the high and low trading prices of the applicable stock on the
principal exchange on which the stock trades for the 15 trading days occurring
immediately prior to the beginning or end of the Performance Cycle, as the case
may be.  Such averages for each such
company (including the Corporation) shall be referred to herein as the “Beginning
Average Value” and the “Ending Average Value.”  As soon as practicable after the completion
of the Performance Cycle, the total shareholder returns of the Comparison
Companies will be calculated and ranked from highest to lowest.  The Corporation’s total shareholder return
will then be ranked in terms of which percentile it would have placed in among
the Comparison Companies.  In calculating
the total shareholder return with respect to either the Corporation or any of
the Comparison Companies, the Committee shall make or shall cause to be made
such appropriate adjustments to the calculation of total shareholder return for
such entity (including, without limitation, adjusting the Beginning Average
Value) as shall be necessary or appropriate to avoid an artificial increase or
decrease in such return as a result of a stock split (including a reverse stock
split), recapitalization or other similar event affecting the capital structure
of such entity that does not involve the issuance of the entity’s securities in
exchange for money, property or other consideration.


 


(d)                                 Percentage
of Performance Shares Earned.  The
extent to which Performance Shares shall become earned shall be determined
according to the following schedule:


 





















 


	
  Relative

  Performance

  Level Percentile

  	
   

  	
  Percent of

  Performance

  Shares Earned

  	
   

  
	
  85th or higher

  	
   

  	
  200

  	
  %

  
	
  50th

  	
   

  	
  100

  	
  %

  
	
  25th

  	
   

  	
  50

  	
  %

  
	
  Under 25th

  	
   

  	
  0

  	
  %

  



 


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


 


(e)                                  Termination
of Service on the Board of Directors. 
The Participant’s cessation of services as a member of the Board of
Directors for any reason shall have no effect on the rights and entitlements of
the Participant to receive payment in respect of the Performance Shares; provided,
however, that if the Participant’s service on the Board of Directors is
terminated for cause, as determined by the Committee (or if the Committee
determines that the Participant resigned from the Board of Directors in
anticipation of being removed for cause), then the Participant shall forfeit
any and all rights in respect of the Performance Shares covered by the Award
and such Performance Shares shall be immediately forfeited and cancelled without
further action by the Corporation or the Participant as of the date of such
termination of service.


 


4.                                       Change
in Control.  Notwithstanding anything
in Section 2 or 3 to the contrary, in the event a Change in Control
occurs, Performance Shares covered by the Award not previously forfeited
pursuant to Section 3 shall be treated in accordance with Section 9
of the Plan.


 


5.                                       Adjustment
in Capitalization.  In the event that
the Committee shall determine that any stock dividend, stock split, share
combination, extraordinary cash dividend, recapitalization, reorganization,
merger, consolidation, split-up, spin-off, combination, exchange of shares,
warrants or rights offering to purchase Stock at a price substantially below
fair market value, or other similar corporate event affects the Stock such that
an adjustment is required in order to preserve, or to prevent the enlargement
of, the benefits or potential benefits intended to be made available under this
Award, then the Committee shall, in its sole discretion, and in such manner as
the Committee may deem equitable, adjust any or all of the number and kind of
Performance Shares subject to this Award and/or, if deemed appropriate, make
provision for a cash payment to the person holding


 





















 


this Award, provided, however, that, unless the Committee determines
otherwise, the number of Performance Shares subject to this Award shall always
be a whole number.


 


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


 


7.                                       No
Rights as a Shareholder.  Until
shares of Stock are issued, if at all, in satisfaction of the Corporation’s
obligations under this Award, in the time and manner specified in Section 2
or 4, the Participant shall have no rights as a shareholder.


 


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


 


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


 


10.                                 Signature
in Counterpart.  This Agreement may
be signed in counterparts, each of which shall be an original, with the same
effect as if the signature thereto and hereto were upon the same instrument.


 


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


 


12.                                 Amendment.  This Agreement may not be altered, modified,
or amended except by a written instrument signed by the Corporation and the
Participant.


 


13.                                 Sections
and Other Headings.  The section and
other headings contained in this Agreement are for reference purposes only and
shall not affect the meaning or interpretation of this Agreement.


 


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


 





















 


	
   

  	
  THE CHUBB CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Participant