THE CHUBB CORPORATION LONG-TERM INCENTIVE PLAN (2009) RESTRICTED STOCK UNIT AGREEMENT
Exhibit 10.7
THE CHUBB CORPORATION
LONG-TERM INCENTIVE PLAN (2009)
LONG-TERM INCENTIVE PLAN (2009)
This RESTRICTED STOCK UNIT AGREEMENT, dated as of February 24, 2010, is by and between The
Chubb Corporation (the “Corporation”) and (the
“Participant”), pursuant to The Chubb Corporation Long-Term Incentive Plan (2009) (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, subject to the acceptance of its terms by the Participant; 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(c) 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 cash 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. In any event, such payments shall be made by the March 15th following the year in which the
actual dividends are paid on shares of Stock.
3. Termination of Employment.
(a) Qualifying Termination. If the Participant’s employment terminates by reason of a Qualifying Termination during the
Restriction Period, 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 canceled without further action by the Corporation or the Participant as of
the date of such termination.
(b) Termination for any Other Reason. If the Participant’s employment terminates for any reason other than a Qualifying
Termination during the Restriction Period, all of the unvested Restricted Stock Units covered by
the Award shall be forfeited and canceled without further action by the Corporation or the
Participant as of the date of such termination. 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
Pension Plan of The Chubb Corporation or its successor (the “Pension Plan”). Accordingly,
all of the unvested Restricted Stock Units covered by the Award shall be forfeited and canceled
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 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 also may 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.
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4. Change in Control. Notwithstanding anything in Section 6 to the contrary, Section 9 of the Plan shall apply in
the event of a Change in Control.
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 such manner as the Committee may deem equitable (in its sole discretion),
adjust any or all of the number and kind of units 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 Restricted Stock
Units subject to this Award always shall 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 within 90 days after the earlier of (i) death,
(ii) Disability, (iii) Separation from Service, or (iv) the Vesting Date.
Notwithstanding the foregoing, 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
to the Participant of that portion of the shares of Stock for which the Corporation reasonably
believes that Section 162(m) of the Code will preclude the Corporation from taking a compensation
expense deduction until the Participant’s Separation from Service.
Delivery of shares upon a Separation from Service under this Section shall be subject to the
six month delay rule in Section 6(d) of the Plan, if applicable.
In accordance with terms and conditions established by the Committee, the Participant may be
eligible to defer delivery of shares under the terms of the Corporation’s Key Employee Deferred
Compensation Plan (2005) or its successor.
7. Notice. Any notice given hereunder to the Corporation shall be addressed to The Chubb Corporation,
Attention: Secretary, 15 Mountain View Road, X.X. Xxx 0000, Xxxxxx, Xxx Xxxxxx 00000-0000, 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 Committee, disclose
to anyone outside the Corporation, or use (other than in the Corporation’s or any of the
Subsidiaries’ business), any confidential information or
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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 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. Notwithstanding the foregoing, it shall not be a
violation of this Section 8(c) for the Participant to serve as a director for any entity which
would otherwise be a Competitive Business if the Participant was serving as a director for such
entity at the time of his or her termination of employment in compliance with the Corporation’s
Policy Statement on Conflict of Interest.
“Customer” shall mean a person or entity to which the Corporation or any of the
Subsidiaries is at the time providing services (which includes the provision of insurance or any
other contractual obligation under any products of the Corporation or any of the Subsidiaries); for
avoidance of doubt, it is understood and agreed that the term “Customer” includes any broker,
agent, or other third party acting for or on behalf of such broker or agent.
“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 that 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.
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(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 canceled and rescinded without any payment therefor. For the avoidance of doubt, following
a failure to comply with this 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.
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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 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. This Agreement
may be accepted by the Participant by means of an electronic acceptance.
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. The Committee may affirmatively act to amend, modify, or terminate this Agreement at any
time prior to payment in any manner not inconsistent with the terms of the Plan. Any such action
by the Committee shall be subject to the Participant’s consent if the Committee determines that
such action would have a materially adverse effect on the Participant’s rights under such Award,
whether in whole or in part. Notwithstanding the foregoing, the Committee, in its sole discretion,
may amend an Award if it determines such amendment is necessary or advisable for the Corporation to
comply with applicable law (including Section 409A of the Code), regulation, rule, or accounting
standard. As soon as is administratively practicable following the date of any such amendment to
this Agreement, the Corporation shall notify the Participant of the amendment; provided, however,
that failure to provide such notice shall not invalidate or otherwise impair the enforceability of
such amendment.
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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 |
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