CHANGE IN CONTROL AGREEMENT
Exhibit 10.29
This Change in Control Agreement (this “Agreement”),
dated as of October 1, 2008, is made by and between The
Chubb Corporation (the “Company”) and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
(the “Executive”).
WHEREAS, the Board of Directors of the Company (the “Board
of Directors”) has determined that it is in the best
interests of the Company and its shareholders to employ the
Executive as the Company’s Executive Vice President and
Chief Financial Officer; and
WHEREAS, the Executive desires to enter into this Agreement to
address the termination of the Executive following a Change in
Control (as defined below) of the Company;
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein and for other good and valuable
consideration, the receipt of which is mutually acknowledged,
the Company and the Executive (individually a “Party”
and together the “Parties”) agree as follows:
1. Change in Control. For purposes of this
Agreement, a “Change in Control” means a Change in
Control as defined under The Chubb Corporation Long-Term Stock
Incentive Plan (2004), as amended, or any successor plan as in
effect immediately prior to such event.
2. Conditions to Severance Benefits. The
benefits provided for in Section 5 shall be payable or
accrue to the Executive if (a) a Change in Control has
occurred and (b) the Executive’s employment with the
Company has terminated within two years after the Change in
Control, other than termination by reason of (i) the
Executive’s death, (ii) the Executive’s
retirement at normal retirement age (“Retirement”)
under the Company’s pension plan as in effect immediately
prior to the Change in Control, (iii) the Executive’s
voluntary termination other than for Good Reason, (iv) the
Executive’s termination for Disability (as defined in this
Section 2) or (v) the Executive’s discharge
for cause.
Termination by the Executive of the Executive’s employment
for “Good Reason” shall mean termination by the
Executive of the Executive’s employment, subsequent to a
Change in Control, because of:
(A) The assignment to the Executive, without the
Executive’s express written consent, of any duties
inconsistent with the Executive’s positions, duties,
responsibilities, authority and status with the Company and its
principal subsidiaries immediately prior to such Change in
Control, or a change in the Executive’s reporting
responsibilities, titles or offices as in effect immediately
prior to the Change in Control, or any removal of the Executive
from or any failure to re-elect the Executive to any of such
positions, except in connection with the termination of the
Executive’s employment for Cause, Disability, Retirement,
as a result of the Executive’s death or by the Executive
other than for Good Reason;
(B) A reduction by the Company in the Executive’s base
salary as in effect at the time of such Change in Control;
(C) A failure by the Company to continue (or to replace
with equivalent plans) the incentive plans in which the
Executive participated for the year immediately preceding such
Change in Control which are in effect at the time of such Change
in Control (the “Bonus Plans”) or a failure by the
Company to continue the Executive as a participant in such Bonus
Plans (or equivalent plans) on a basis which would entitle the
Executive to receive under such Bonus Plans (or equivalent
plans) amounts at least equal to the average amounts the
Executive received pursuant to such Bonus Plans for the three
years preceding such Change in Control;
(D) The Company’s requiring the Executive to maintain
the Executive’s principal office or conduct the
Executive’s principal activities anywhere other than at the
Company’s principal executive offices in the New York
Metropolitan area, including Somerset County, New Jersey;
(E) The failure by the Company to continue in effect (or to
replace with equivalent plans) the Company’s retirement
plans, life insurance plan, health and accident plan, financial
services plan, hospital-medical plan, dental plan, or disability
plan in which the Executive is participating or eligible to
participate at the time of such Change in Control, or the taking
of any action by the Company which would adversely affect the
Executive’s participation in or materially reduce the
Executive’s benefits under any such plans (or equivalent
plans) or deprive the Executive of any material fringe benefit
enjoyed or to be enjoyed by the Executive at the time of such
Change in Control;
(F) The failure by the Company to obtain the assumption of
the agreement to perform this Agreement by any successor as
contemplated in Section 7;
(G) Any purported termination of the Executive’s
employment which is not effected pursuant to a Notice of
Termination (as defined in Section 7) satisfying the
applicable requirements with respect to such Notice;
(H) A determination made by the Executive in good faith,
whether before or after the date the Executive is eligible for
early retirement under the Company’s pension plan, that as
a result of such Change in Control the Executive is not able to
discharge the Executive’s duties effectively; or
(I) Any termination of this Agreement pursuant to
Section 6 prior to the expiration of two years from the
occurrence of the Change in Control.
Termination of the Executive’s employment for
“Cause” shall mean termination because of (A) the
willful and continued failure by the Executive substantially to
perform the Executive’s duties with the Company and its
principal subsidiaries (other than any such failure resulting
from the Executive’s incapacity due to physical or mental
illness), after a demand for substantial performance is
delivered to the Executive by the Chief Executive Officer of the
Company, which specifically identifies the manner in which such
executive believes that the Executive has not substantially
performed the Executive’s duties, or (B) the willful
engaging by the Executive in misconduct which is materially
injurious to the Company, monetarily or otherwise. For purposes
of this paragraph, no act, or failure to act, on the
Executive’s part shall be considered “willful”
unless done, or omitted to be done, by the Executive not in good
faith and without reasonable belief that the Executive’s
action or omission was in or not opposed to the best interests
of the Company. Notwithstanding the foregoing, the Executive
shall not be deemed to have been terminated for Cause unless and
until there shall have been delivered to the Executive a copy of
a Notice of Termination from the Chief Executive Officer of the
Company after reasonable notice to the Executive and an
opportunity for the Executive, together with the
Executive’s counsel, to be heard before the Board of
Directors, and a finding that in the good faith opinion of the
Board the Executive was guilty of conduct set forth above in
clauses (A) or (B) of the first sentence of this
paragraph and specifying the particulars thereof in detail.
Termination of the Executive’s employment for disability
shall mean termination in accordance with the provisions of the
Company’s long term disability plan as in effect
immediately preceding the Change in Control
(“Disability”).
3. Notice of Termination. Any purported
termination of the Executive’s employment shall be
communicated by written Notice of Termination to the other party
hereto. For purposes of this Agreement, a “Notice of
Termination” shall mean a notice which shall indicate the
specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated. No
purported termination of the Executive’s employment by the
Company shall be effective if it is not effected pursuant to a
Notice of Termination satisfying the requirements of this
Section 3.
4. Date of Termination. “Date of
Termination” shall mean (A) if the Executive’s
employment is terminated for Disability, 30 days after
Notice of Termination is given (provided that the Executive
shall not have returned to the performance of the
Executive’s duties on a full-time basis
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during such
30-day
period) and (B) if the Executive’s employment is
terminated for any other reason, the date on which a Notice of
Termination is given.
5. Severance Benefits. Subject to the
conditions in Section 2, on termination of the
Executive’s employment, the Executive shall be entitled to
the following benefits:
(A) The Executive shall be entitled to an amount (the
“Severance Compensation”) equal to 2 times the sum of
(i) one year’s salary at the annual rate in effect at
the time of the Change in Control and (ii) the average for
the three calendar years (or such lesser number of completed
calendar years that the Executive was employed by the Company as
of the Date of Termination) preceding such Change in Control of
the Executive’s bonuses under the Annual Incentive
Compensation Plan (2006) (or successor plan) (the “Average
Bonus Amount”), provided, however, that (x) if the
Date of Termination occurs prior to January 1, 2010, the
Average Bonus Amount shall be deemed to be $1,420,000; and
(y) the Executive’s Severance Compensation shall not
be greater than the amount the Executive would have received as
salary and such bonuses from the Company had the Executive
remained in the employ of the Company from the Date of
Termination until the Executive’s normal retirement date
under the Company’s pension plan (on the assumption that
the Executive’s salary would remain at the same annual rate
as in effect at the time of the Change in Control and that the
Executive’s annual bonuses would be the average of such
bonuses for the three calendar years preceding such Change in
Control). The Severance Compensation will be payable in full six
months after the Executive’s separation from service,
within the meaning of Section 409A of the Internal Revenue
Code (“Separation from Service”).
(B) The Company shall also pay to the Executive an amount
equal to all legal fees and expenses incurred by the Executive
as a result of such termination (including all such fees and
expenses, if any, incurred in contesting or disputing any such
termination or in seeking to obtain or enforce or retain any
right or benefit provided by this Agreement). Reimbursement of
legal fees and expenses must be made no earlier than six months
after the Executive’s Separation from Service and no later
than the end of the year following the year in which such fees
and expenses are incurred. The amount of reimbursement provided
in one year will not affect the amount eligible for
reimbursement in another year. This right to reimbursement does
not expire after a certain time period and is not subject to
liquidation or exchange for another benefit;
(C) The Company shall maintain in full force and effect,
for the Executive’s continued benefit until the earlier of
(a) two years after the Date of Termination or (b) the
Executive’s commencement of full time employment with a new
employer, all life insurance, hospital-medical, dental, health
and accident, and disability plans in which the Executive was
entitled to participate immediately prior to such Change in
Control, provided that the Executive’s continued
participation is possible under the general terms and provisions
of such plans and programs. In the event that the
Executive’s participation in any such plan or program is
barred for any reason whatsoever, the Company shall arrange to
provide the Executive with benefits substantially similar to
those which the Executive is entitled to receive under such plan
or program; and
(D) The Executive shall not be required to mitigate the
amount of any payment provided for in this Section 5 by
seeking other employment or otherwise, nor shall the amount of
any payment provided for in this Section 5 be reduced by any
compensation earned by the Executive as the result of employment
by another employer after the Date of Termination or otherwise.
6. Term of Agreement. This Agreement shall have
an initial term of two (2) years from the date hereof and
shall be automatically extended at the expiration of said
two-year period for successive two (2) year periods unless
the Company gives the Executive one year’s prior written
notice that it is terminating this Agreement at the expiration
of the then current two year period.
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7. Successors: Binding Agreement.
(A) The Company will require any purchaser of all or
substantially all of the business or assets of the Company, by
agreement in form and substance satisfactory to the Executive to
assume and agree to perform this Agreement in the same manner
and to the same extent that the Company would be required to
perform it if no such purchase had taken place. As used in this
Agreement, “Company” shall mean the Company as
hereinbefore defined and any successor to its business or assets
as aforesaid which executes and delivers the agreement provided
for in this Section 7 or which otherwise becomes bound by
all the terms and provisions of this Agreement by operation of
law.
(B) This Agreement shall inure to the benefit of and be
enforceable by the Executive’s personal or legal
representatives, executors, administrators, successors, heirs,
distributees, divisees and legatees. If the Executive should die
while any amount would still be payable to the Executive
hereunder if the Executive had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the
Executive’s devisee, legatee or other designee or, if there
be no such designee, to the Executive’s estate.
8. Notices. For the purposes of this Agreement,
notices and all other communications provided for in this
Agreement shall be in writing and shall be deemed to have been
duly given when delivered or mailed by certified or registered
mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth on the signature page of this
Agreement (as such address may be updated by the applicable
party in writing), provided that all notices to the Company
shall be directed to the attention of the Chief Executive
Officer of the Company, with a copy to the Secretary of the
Company, or to such other address as either party may have
furnished to the other in writing in accordance herewith, except
that notice of change of address shall be effective only upon
receipt.
9. Miscellaneous. No provisions of this
Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing signed
by the Executive and such officer as may be specifically
designated by the Board of Directors. No waiver by either party
hereto at any time of any breach by the other party hereto of,
or compliance with, any condition or provision of this Agreement
to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at
any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are
not expressly set forth in this Agreement; provided, however,
that this Agreement shall not supersede or in any way affect the
rights, duties or obligations the Executive may have under any
other written agreement with the Company. This Agreement shall
be governed by, and construed in accordance with, the laws
(other than principles of conflicts of laws) of the State of
New Jersey.
10. Validity. The invalidity or
unenforceability of any provision of this Agreement in any
respect shall not affect the validity or enforceability of such
provision in any other respect or of any other provision of this
Agreement, all of which shall remain in full force and effect.
11. 409A Compliance. This Agreement shall be
interpreted, operated, and administered in a manner so as not to
subject the Executive to the assessment of additional taxes or
interest under Section 409A of the Internal Revenue Code.
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IN WITNESS WHEREOF, the Company and the Executive have executed
this Agreement as of the date first above written.
THE CHUBB CORPORATION
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chairman, President and Chief Executive Officer
EXECUTIVE
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