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As of 1/1/92
THE CHUBB CORPORATION
DEFERRED COMPENSATION PLAN
FOR DIRECTORS
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SECTION 1. EFFECTIVE DATE
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The effective date of the Plan is July 1, 1987.
SECTION 2. ELIGIBILITY
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Any Director of The Chubb Corporation (the "Company") or any Director of a
participating subsidiary of the Company who is also a Director of the Company,
who is not an officer or employee of the Company or a subsidiary thereof is
eligible to participate in the Plan. A subsidiary shall become a participating
subsidiary upon adoption of this Plan by the Board of Directors and by obtaining
the consent to such adoption from the Board of Directors of the Company.
SECTION 3. DEFERRED COMPENSATION ACCOUNTS
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There shall be established for each participant a deferred compensation account
or accounts in the participant's name.
SECTION 4. AMOUNT OF DEFERRAL
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A participant may elect to defer receipt for any Plan Year of all compensation
payable to the participant in the form of stipends and/or meeting fees for
serving on the Board of Directors of the Company and Committees of the Board of
Directors as well as compensation payable to the participant in the form of
stipends and/or meeting fees for serving on the Board of Directors and
Committees of the Board of Directors of participating subsidiaries of the
Company.
SECTION 5. INVESTMENT OF DEFERRED AMOUNTS
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(a) GENERAL. A participant may designate, in increments of 10%, what part of the
compensation to be deferred or compensation already deferred that should be
allocated to a cash account, a market value account and a shareholder's
equity value account or any combination of such accounts. With the exception
of allocations to a shareholder's equity account (which must be made in
accordance with Section 5(d)), any change in such designation may be made no
later than the 15th day of each March, June, September and December during
the deferral period to be effective on the date next following such
notification that compensation would have been paid in accordance with the
Company's normal practice, or as applicable, the participating subsidiary's
normal practice, but for the election to defer.
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(b) CASH ACCOUNT. The amount, if any, allocated to the participant's
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deferred compensation cash account shall be credited with interest, to
be compounded quarterly, calculated prospectively at a rate equal to the
prime rate of Citibank, N.A. in effect on the first day of each January,
April, July and October during the deferral period.
(c) MARKET VALUE ACCOUNT. The amount, if any, allocated to the
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participant's deferred compensation market value account on each date
compensation would have been paid in accordance with the Company's
normal practice, or as applicable, the participating subsidiary's normal
practice, but for the election to defer shall be expressed in units, the
number of which shall be equal to such amount divided by the closing
price of shares of the Company's Common Stock on the New York Stock
Exchange (hereinafter referred to as "Market Value") on such date or on
the trading day next preceding such date if such date is not a trading
day. On each date that the Company pays a regular cash dividend on
shares of its Common Stock outstanding, the participant's account shall
be credited with a number of units equal to the amount of such dividend
per share multiplied by the number of units in the participant's account
on such date divided by the Market Value on such dividend date or on the
trading day next preceding such date if the dividend payment date is not
a trading day. The value of the units in the participant's market value
account on any given date shall be determined by reference to the Market
Value on such date.
(d) SHAREHOLDER'S EQUITY ACCOUNT. Beginning January 1, 1988, at any time
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during the period commencing January 1 and ending March 15 of any
calendar year, the participant may elect to allocate on April 1 of such
year to a deferred compensation shareholder's equity account
compensation payable on April 1 of such year which he has previously
elected to defer, amounts in the participant's cash and market value
accounts on such date, or any combination (in increments of 10%) of such
compensation or cash account or market value account balance. The
amounts so allocated shall be expressed in units, the number of which
shall be equal to such amount divided by the shareholder's equity per
share as reported in the Company's Annual Report to Shareholders for the
year just ended. Any amount allocated to a shareholder's equity account
may not thereafter be reallocated to any other account.
On each date that the Company pays a regular cash dividend on shares of
its Common Share outstanding, the participant's shareholder's equity
account shall be credited with a number of units equal to the amount of
such a dividend per share multiplied by the number of units in the
participant's shareholder's equity account on such date divided by the
Market Value on such dividend date or on the trading day next preceding
such date if the dividend payment date is not a trading day. The value
of the units in the participant's shareholder's equity account on any
given date shall be determined by reference to the shareholder's equity
at the close of the most recent fiscal year.
(e) RECAPITALIZATION. The number of units in the participant's market value
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and shareholder's equity accounts shall be proportionally adjusted for
any increase or decrease in the number of issued shares of Common Stock
of the Company resulting from a subdivision or consolidation of shares
or other capital adjustment, or the payment of a stock dividend or other
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increase or decrease in such shares effected without receipt of
consideration by the Company, or any distribution or spin-off of
assets (other than cash) to the shareholders of the Company.
SECTION 6. PERIOD OF DEFERRAL
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A participant may elect to defer receipt of compensation either (a) until a
specified year in the future or (b) until the participant's termination of
service as a Director of the Company. If alternative (a) is elected, actual
payment will be made or will commence within ninety days after the beginning of
the year specified. If alternative (b) is elected, payment will be made or will
commence within ninety days after termination of services as a Director of the
Company.
SECTION 7. FORM OF PAYMENT
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A participant may elect to receive the compensation deferred under the plan in
either (a) a lump sum or (b) a number of annual installments as specified by
the participants. All amounts shall be paid in cash.
SECTION 8. DEATH OR DISABILITY PRIOR TO RECEIPT
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In the event that a participant dies or becomes totally and permanently
disabled prior to receipt of any or all of the amounts payable to the
participant pursuant to the Plan, any amounts remaining in the participant's
deferred compensation account shall be paid to his estate or personal
representative in a lump sum within ninety (90) days following the Company's
notification of the participant's death or disability.
SECTION 9. TIME OF ELECTION OF DEFERRAL
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The Plan Year shall be the period from July 1, 1987 to December 31, 1987 and
effective January 1, 1988, the period commencing January 1 and ending December
31 of each year.
All election to defer compensation may be made by a nominee for election as a
Director prior to, or concurrently with the nominee's election for, the term for
which the nominee is being elected, and may be made by a person then currently
serving as a Director for the next succeeding Plan Year no later than the
preceding December 15th (or June 15, 1987 for the Plan Year beginning July 1,
1987).
SECTION 10. MANNER OF ELECTING DEFERRAL
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A participant may elect to defer stipend and/or meeting fee compensation by
giving written notice to the Secretary of the Company on a form provided by the
Company, which notice shall include the accounts to which such deferred amounts
are to be allocated and the percentage (in increments of 10%) of such amounts
to be allocated to each account, the period of deferral, and the form of
payment, including the number of installments.
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SECTION 11. EFFECT OF ELECTION
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An election to defer compensation shall be irrevocable once the Plan Year to
which it applies has commenced. An election covering more than one Plan Year
may be revoked or modified with respect to Plan Years not yet begun by
notifying the Secretary of the Company in writing at least fifteen (15) days
prior to the commencement of such Plan Year.
SECTION 12. PARTICIPANT'S RIGHTS UNSECURED
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The right of any participant to receive future payments under the provisions of
the Plan shall be an unsecured claim against the general assets of the Company,
or as applicable, the participating subsidiary.
SECTION 13. STATEMENT OF ACCOUNTS
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Statements will be sent to each participant by April 1st of each year as to the
value of the participant's deferred compensation accounts as of the end of the
preceding December.
SECTION 14. ASSIGNABILITY
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No right to receive payments hereunder shall be transferable or assignable by a
participant, except by will or by the laws of descent and distribution. The
participant may not sell, assign, transfer, pledge or otherwise encumber any
interest in the participant's deferred compensation account and any attempt to
do so shall be void against, and shall not be recognized by, the Company or
participating subsidiaries.
SECTION 15. ADMINISTRATION
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The Plan shall be administered by the Secretary and the General Counsel of the
Company, who together shall have the authority to adopt rules and regulations
for carrying out the Plan and interpret, construe and implement the provisions
of the Plan.
SECTION 16. AMENDMENT
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The Plan may at any time or from time to time be amended, modified or
terminated by the Company. No amendment, modification or termination shall,
without the consent of the participant, adversely effect accruals in such
participant's deferred compensation account or accounts at the time of such
amendment, modification or termination.