Document:

Exhibit 10.4

 

THE CHUBB CORPORATION

LONG-TERM STOCK INCENTIVE PLAN (2004)

 

RESTRICTED STOCK UNIT AGREEMENT

 

This RESTRICTED STOCK UNIT AGREEMENT, dated as of                      ,
2006, 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 Restricted Stock Units 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 Restricted Stock Units on the terms and conditions set forth
herein.

 

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

 

1.             Grant
of Restricted Stock Units. 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 [  ] Restricted Stock Units (the “Award”).

 

2.             Vesting
and Rights as a Shareholder. It is understood and agreed that the grant of
the Award evidenced hereby is subject to the following conditions:

 

(a)           Restrictions
on Transfer. Until settlement of the Restricted Stock Units in accordance
with Section 6, the Restricted Stock Units 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.

 

(b)           Restriction
Period. The Restriction Period applicable to the Restricted Stock Units
covered by the Award shall begin on the date hereof and, except as otherwise
provided in Section 3 or 4, shall, subject to the Participant’s continued
employment from the Grant Date, lapse on the third anniversary of the Grant
Date (such date to be hereafter referred to as the “Vesting Date”).

 

(c)           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 provided in Section 6, the Participant
shall have no rights as a shareholder.

 

(d)           Dividend
Equivalents. Without limiting the generality of the foregoing, until
settlement of the Restricted Stock Units in accordance with Section 6, as soon
as practicable after dividends are paid on the Stock, the Participant shall be
paid an amount in cash equal to the amount of dividends paid on that number of
shares of the Stock as is equal to the number of the Participant’s Restricted
Stock Units.

 

3.             Termination
of Employment.

 

(a)           Qualifying
Termination of Employment. If the Participant’s employment terminates by
reason of a Qualifying Termination of Employment during the Restriction Period
(i.e., before the Vesting Date), the Restriction Period shall lapse as to (and
there shall become vested and non-forfeitable) that number of Restricted Stock Units
equal to the product of (i) the number of Restricted Stock Units covered by the
Award and (ii) a fraction, the numerator of which is the number of full
calendar months during the Restriction Period that the Participant was employed
and the denominator of which is 36. The remainder of the Restricted Stock Units
covered by the Award shall be forfeited and cancelled without further action by
the Corporation or the Participant as of the date of such termination of
employment.

 

(b)           Termination
for any Other Reason. If the Participant’s employment terminates for any
reason other than a Qualifying Termination of Employment during the Restriction
Period (i.e., before the Vesting Date), all of the Restricted Stock Units
covered by the Award shall be forfeited and cancelled without further action by
the Corporation or the Participant as of the date of such termination of
employment. 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
Restricted Stock Units covered by the Award 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.

 

2

 

(d)           Termination
Pursuant to a Change in Control. Notwithstanding the provisions of Section
3(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.

 

4.             Change
in Control. Notwithstanding anything in Section 6 to the contrary, in the
event a Change in Control occurs, Restricted Stock Units covered by the Award
not previously forfeited pursuant to Section 3 shall be treated as provided for
in Section 9 of the Plan, in which case the Restricted Stock Units covered by
the Award shall become payable as provided in Sections 9(a)(i) and 9(a)(iii) of
the Plan or, if applicable, be honored, assumed or substituted for in
accordance with Section 9(b) of the Plan. Notwithstanding the foregoing, if the
Restricted Stock Units shall become earned and payable as provided in Sections
9(a)(i) and 9(a)(iii) of the Plan, but the accelerated payment of the
Restricted Stock Units 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.

 

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 units (or other property) subject to this
Award and/or, if deemed appropriate, make provision for a cash payment to the
person holding this Award, provided, however, that the number of
Restricted Stock Units subject to this Award shall always be a whole number.

 

6.             Settlement
of Restricted Stock Units. Subject to the provisions of Section 4 and this
Section 6, the Corporation shall deliver to the Participant (or, if applicable,
the Participant’s Designated Beneficiary or legal representative) that number
of shares of Stock as is equal to the number of Restricted Stock Units covered
by the Award that have become vested and nonforfeitable as soon as
administratively practicable after the earlier of (i) the Vesting Date or (ii)
a Qualifying Termination of Employment, but in no event later than 2 1⁄2 months
after the end of the calendar year in which the event described in clause (i)
or (ii) occurred; provided, however, that if
the Participant terminates employment by reason of Retirement, the distribution
of shares of Stock in respect of the Participant’s Restricted Stock Units shall
be delayed for six months from the date of the Participant’s Retirement if the
Participant is a “specified

 

3

 

employee” (as that term is defined in Section
409A(a)(2)(B)(i) of the Code) if necessary to avoid the imposition of taxes to
the Participant under
Section 409A of the Code. If the Participant is (or is reasonably
expected to be) a “covered employee” within the meaning of Section 162(m) of
the Code for the calendar year in which delivery of Stock would ordinarily be
made to the Participant, the Corporation shall delay delivery of all of such
shares of Stock to such Participant until the Participant’s termination of
employment with the Corporation and all members of the controlled group of
entities of which the Corporation is a member. Such Stock shall be delivered to
such Participant or (if the Participant has elected payment in a form other
than a lump sum) commence to be delivered to such Participant as soon as
administratively practicable after the date which is six months after the date
of such termination of employment. Subject to the immediately preceding two
sentences, the Participant may 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 December 31 of the calendar year before the calendar
year of the Grant Date and subject to such terms and conditions as the
Committee may specify, elect to have shares of Stock deliverable in respect of vested
and nonforfeitable Restricted Stock Units deferred until such later date(s) as
shall be specified in such election. Any deferral election made for such
Restricted Stock Units after such December 31 shall be deemed void and without
force and effect.

 

7.             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.

 

8.             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, 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.

 

(b)           Non-Solicitation.
Unless the Participant has received prior written authorization from the
Committee, 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

 

4

 

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.

 

(c)           Non-Competition.
Unless the Participant has received prior written authorization from the
Committee, the Participant shall not, whether during his or her employment or
service with the Corporation or any of the Subsidiaries or during the
Restricted Period, directly or indirectly compete with the business of the
Corporation or any of the Subsidiaries by becoming an officer, agent, employee,
consultant, partner or director of a Competitive Business, or otherwise render
services to or assist or hold an interest (except as a less than one (1)
percent shareholder of a public company) in any Competitive Business.

 

“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.

 

(d)           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.

 

(e)           Relief
with Respect to Violations of Covenants. Failure to comply with the
provisions of this Section 8 at any point before the Restricted Stock Units
covered by the Award are settled in accordance with Section 6 of this Agreement
shall cause such Restricted Stock Units to be cancelled and rescinded without
any payment therefor. For the avoidance of doubt, following a failure to comply
with this

 

5

 

Section 8, all shares of Stock in respect of any portion of the
Restricted Stock Units covered by the Award for which delivery has 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 delivery or payment in respect of any such shares. In the
event that all or any portion of the Restricted Stock Units 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 8 shall have first occurred, the
Committee may require that the Participant repay (with appreciation (if any),
determined up to the date repayment is made), and the Participant shall
promptly repay, to the Corporation the Fair Market Value of any Stock conveyed
to the Participant within such period in respect of such Restricted Stock Units.
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 8. 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 8 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.

 

(f)            Reformation.
The Participant agrees that the provisions of this Section 8 are necessary and
reasonable to protect the Corporation in the conduct of its business. If any
restriction contained in this Section 8 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.

 

9.             Withholding.
At the Committee’s discretion, the Participant shall be required to either pay
to the Corporation the amount of any 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 with respect to Stock deliverable hereunder 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.

 

10.           Committee
Discretion; Delegation. Notwithstanding anything contained in this
Agreement to the contrary, the Committee, in its sole discretion and in
accordance with the terms of the Plan, may take any action that is authorized
under the terms of the Plan that is not contrary to the express terms hereof,
including accelerating the lapse of the Restriction Period with respect to all
or any portion of the Restricted Stock Units covered by the Award, at such
times (including, without limitation, upon or in connection with the
Participant’s termination of employment) and upon such terms and conditions as
the Committee shall determine. Nothing in this Agreement shall limit or in any
way restrict the power of the Committee, consistent with the terms of the Plan,
to

 

6

 

delegate any of the powers reserved to it hereunder to such person or
persons as it shall designate from time to time.

 

11.           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.

 

12.           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).

 

13.           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.

 

14.           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.

 

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

 

16.           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

  

 

7Exhibit 10.5

 

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 25, 2006, 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
shall be paid by the Corporation 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).

(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.

 

 

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, 2008 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 administratively 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 January 1,
2006, and shall end on December 31, 2008.

 

(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; provided, however, that if the accelerated 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.

 

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:

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