THE CHUBB CORPORATION LONG-TERM STOCK INCENTIVE PLAN (2004)Executive Compensation Plan Agreement |
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Exhibit 10.7
THE CHUBB CORPORATION
LONG-TERM STOCK
INCENTIVE PLAN (2004)
Non-statutory Stock Option Award Agreement
This NON-STATUTORY STOCK OPTION AWARD AGREEMENT, dated as of March 3, 2005, 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 Non-statutory Stock Options 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 Non-statutory Stock Options on the terms and
conditions set forth herein.
NOW THEREFORE,
the Participant and the Corporation agree as follows:
1.
Grant of Options;
Exercise Price.
Pursuant to the provisions of the Plan, on the date set forth above (the
“Grant Date”), the Corporation has granted and hereby
evidences the grant to the Participant, subject to the terms and conditions set
forth herein and in the Plan, of options to purchase from the Corporation
[ ] shares of Stock (the
“Option”). The exercise price for each share of Stock
covered by the Option shall be equal to
[$ ], which was the Fair Market Value
of the Stock on the Grant Date. Upon any exercise of the Options, the
Corporation shall cause a book entry account maintained for the Participant to
be credited for the number of shares of Stock to be issued to the Participant
(or shall evidence the issuance of Stock by such other reasonable method as the
Committee may determine in its sole discretion).
2.
Exercisability. Except as provided in
Sections 5 and 6, and subject to the Participant’s continued employment
with the Corporation or a Subsidiary through the applicable vesting date, the
Options shall become vested and exercisable in accordance with the following
schedule:
1
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Date |
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Options Vested & Exercisable |
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1st anniversary of Grant Date |
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1/3 of the Options |
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2nd anniversary of Grant Date |
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1/3 of the Options |
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3rd anniversary of Grant Date |
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1/3 of the Options |
Once vested in accordance with the provisions of this Agreement, Options may be exercised at any time, and from time to time, prior to the date such Options terminate as determined under Section 3(a) or 5. Options may only be exercised with respect to full shares of Stock and no fractional shares of Stock shall be issued. Any exercise of the Option shall be made by giving the Corporation or its designee written notice of exercise specifying the number of shares of Stock to be purchased. The notice of exercise shall be accompanied by tender to the Corporation of the full purchase price of said shares and the related amount of taxes required 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 the Stock deliverable hereunder, unless the Participant has elected to have shares of Stock withheld to satisfy such tax withholding in accordance with the rules promulgated by the Committee. Payment of the purchase price of the shares of Stock shall be made in cash, check, shares of Stock owned by the Participant for at least six months which are not the subject of any pledge or other security interest, in a combination of the foregoing, or by any other method or procedure as shall be permitted by the Plan or the Committee provided, however, that the Committee may, in its sole discretion, prohibit or limit the use of shares of Stock as part or full payment of the purchase price and any related tax withholding obligation.
3.
Conditions
Applicable to Options.
It is understood and agreed that the Option is subject to the following
conditions:
(a)
Normal Termination
of Options.
The Options shall not in any event be exercisable on or after and shall be
forfeited as of the tenth anniversary of the Grant Date.
(b) Restrictions on Transfer. The Options may not be sold, assigned, hypothecated, pledged or otherwise transferred or encumbered i
