<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
THE CHUBB CORPORATION
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(Name of Registrant as Specified in Its Charter)
THE CHUBB CORPORATION
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(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transactions applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:/1
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(4) Proposed maximum aggregate value of transaction:
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/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registrations statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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/1 Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE> 2
THE CHUBB CORPORATION
15 MOUNTAIN VIEW ROAD, P.O. BOX 1615, WARREN, NEW JERSEY 07061-1615
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of The Chubb Corporation will be held at
15 Mountain View Road, Warren, New Jersey on April 25, 1995 at 11:00 A.M., local
time, for the following purposes:
1. To elect fourteen Directors to serve until the next Annual Meeting
of Shareholders and until their respective successors are elected and shall
qualify.
2. To approve the selection of independent auditors for the year
1995.
3. To transact such other business as may properly be brought before
the meeting and any adjournment thereof.
Shareholders of record at the close of business on March 6, 1995 will be
entitled to notice of and to vote at the Annual Meeting and any adjournment
thereof.
By order of the Board of Directors,
HENRY G. GULICK
Vice President and Secretary
Dated: March 14, 1995
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TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE FILL IN, SIGN, DATE
AND RETURN THE PROXY SUBMITTED HEREWITH, IN THE ENCLOSED ADDRESSED ENVELOPE. THE
GIVING OF SUCH PROXY WILL NOT AFFECT YOUR RIGHT TO REVOKE SUCH PROXY BY
APPROPRIATE WRITTEN NOTICE OR TO VOTE IN PERSON SHOULD YOU LATER DECIDE TO
ATTEND THE MEETING.
<PAGE> 3
THE CHUBB CORPORATION
15 MOUNTAIN VIEW ROAD, P.O. BOX 1615, WARREN, NEW JERSEY 07061-1615
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PROXY STATEMENT
------------------
March 14, 1995
The Proxy accompanying this Proxy Statement is solicited by the Board of
Directors of The Chubb Corporation to be voted at the Annual Meeting of
Shareholders on April 25, 1995 and at any adjournment thereof. The Proxy may be
revoked by appropriate written notice at any time before it is exercised. See
"Voting, Solicitation of Proxies and Shareholder Proposals".
A copy of the Corporation's Annual Report to Shareholders for 1994 has been
previously mailed to all Shareholders. This Proxy Statement and Proxy are first
being mailed to Shareholders on March 14, 1995.
As of March 6, 1995, the record date for the determination of Shareholders
entitled to vote at the Annual Meeting, 86,901,145 shares of Common Stock of the
Corporation were issued and outstanding. Each share of Common Stock entitles the
holder to one vote on all matters brought before the Annual Meeting.
THE CORPORATION WILL FURNISH, WITHOUT CHARGE, TO ANY RECORD HOLDER OR
BENEFICIAL OWNER OF ITS COMMON STOCK ON SUCH RECORD DATE, UPON RECEIPT OF A
WRITTEN REQUEST, A COPY OF ITS ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-K. WRITTEN REQUESTS SHOULD BE DIRECTED TO THE CHUBB
CORPORATION TO THE ATTENTION OF HENRY G. GULICK, VICE PRESIDENT AND SECRETARY,
15 MOUNTAIN VIEW ROAD, P.O. BOX 1615, WARREN, NEW JERSEY 07061-1615.
The Corporation is a holding company and is principally engaged, through
subsidiaries, in the businesses of property and casualty insurance, life and
health insurance and real estate development. Its principal subsidiaries are
Chubb & Son Inc., Federal Insurance Company ("Federal"), Pacific Indemnity
Company ("Pacific"), Vigilant Insurance Company ("Vigilant"), Great Northern
Insurance Company ("Great Northern"), Chubb Insurance Company of Canada ("Chubb
Canada"), Chubb Insurance Company of Australia, Limited, Chubb Insurance Company
of Europe, S.A., Chubb Life
<PAGE> 4
Insurance Company of America ("Chubb Life"), The Colonial Life Insurance Company
of America and Bellemead Development Corporation ("Bellemead").
ELECTION OF DIRECTORS
The following persons have been nominated by the Board of Directors to
serve as Directors until the next Annual Meeting of Shareholders and until their
respective successors shall be elected and shall qualify. All of the nominees
were elected as members of the Board of Directors at the Annual Meeting in 1994
except Messrs. David H. Hoag and Raymond G. Seitz, who were elected by the Board
of Directors at its meetings held in September and December 1994, respectively.
Pursuant to the provisions of the By-Laws, the Board of Directors has fixed the
number of Directors to be elected at fourteen. In the event that any of the
nominees should be unable or unwilling to serve as a Director, it is intended
that the Proxy will be voted for such person, if any, as shall be designated by
the Board of Directors. However, the Board of Directors has no reason to believe
that any nominee will be unable or unwilling to serve as a Director.
NOMINEES FOR DIRECTOR
NAME AGE(1)
---- ------
John C. Beck 63
Managing Partner, Beck, Mack & Oliver, an investment counselling firm.
Mr. Beck has been associated with Beck, Mack & Oliver since 1958 and first
became a partner in 1962. He was a Director of Bellemead from 1984 to
1989. He first became a Director of the Corporation in 1988. Mr. Beck is
also a Director of Russell Reynolds Associates, Inc.
Percy Chubb, III 60
Vice Chairman of the Corporation since June 1986. Prior to his election
as Vice Chairman, Mr. Chubb had been an Executive Vice President since
1981. He is also Vice Chairman of Chubb & Son Inc., Bellemead and Chubb
Life, a Senior Vice President of Federal and Chairman of Chubb Canada. Mr.
Chubb has been associated with Chubb & Son Inc. since 1958. He first
became a Director of the Corporation in 1978.
2
<PAGE> 5
NAME AGE(1)
---- ------
Joel J. Cohen 57
Managing Director, Investment Banking Department, and Director, Mergers
and Acquisitions, Donaldson, Lufkin & Jenrette Securities Corporation
since October 1989. Mr. Cohen was a consultant from February 1988 until
October 1989. Mr. Cohen had been General Counsel: Presidential Task Force
on Market Mechanisms from November 1987 through January 1988 and a Partner
of Davis Polk & Wardwell, attorneys, until September 1987. He had been
associated with Davis Polk & Wardwell from 1963 until September 1987 and a
Partner since 1969. He first became a Director of the Corporation in 1984.
Mr. Cohen is also a Director of GTECH Holdings Corporation, Maersk, Inc.,
Maersk Line, Limited and Atlantic Pacific Marine Corporation.
Henry U. Harder 70
Retired. Prior to June 1988, Mr. Harder had been Chairman and Chief
Executive Officer of the Corporation since 1981. Until June 1986, he had
in addition been President and Chief Executive Officer since 1980. Mr.
Harder had been associated with Chubb & Son Inc. since 1948. He first
became a Director of the Corporation in 1974. Mr. Harder is also a
Director of Mid Ocean Ltd.
David H. Hoag 55
Chairman, President and Chief Executive Officer, The LTV Corporation
since January 1991 and President and Chief Executive Officer of LTV Steel
Company from 1983 until 1990. He continues as Chief Executive Officer of
LTV Steel Company. Mr. Hoag has been associated with The LTV Corporation
since 1960. He first became a Director of the Corporation in September
1994. Mr. Hoag is also a Director of The LTV Corporation and Lubrizol
Corporation. Mr. Hoag is also Chairman of the Board of Trustees of
Allegheny College and Chairman of Cleveland Tomorrow.
Robert V. Lindsay 69
Former President and former Director of J. P. Morgan & Co. Incorporated
and its wholly-owned subsidiary, Morgan Guaranty Trust Company of New
York, and Chairman of the latter's International Council from 1987 to
1989. Mr. Lindsay had been associated with The Morgan Bank from 1949 until
his retirement in 1986. He first became a Director of the Corporation in
1977. Mr. Lindsay is also a Director of The Fluor Corporation, Hudson
Chartered Corp., Lomas Financial Corporation, J.P. Morgan (Suisse) S.A.,
Russell Reynolds Associates, Inc. and United Meridian Corporation and is
Senior Advisor to Unibank Denmark A/S. Mr. Lindsay is also Chairman of the
John Simon Guggenheim Memorial Foundation.
Thomas C. MacAvoy 67
Professor of Business Administration, University of Virginia since
1988. He is a former Vice Chairman and Director of Corning, Inc. Mr.
MacAvoy had been associated with Corning, Inc. from 1957 until his
retirement in 1987. He first became a Director of the Corporation in 1981.
Mr. MacAvoy is also a Director of Lubrizol Corporation and Quaker Oats
Company.
3
<PAGE> 6
NAME AGE(1)
---- ------
Gertrude G. Michelson 69
Former Senior Advisor, R.H. Macy & Co., Inc. ("Macy's") from September
1992 until her retirement in December 1994. Prior to September 1992, Mrs.
Michelson had been Senior Vice President of Macy's since 1981. Mrs.
Michelson had been associated with Macy's since 1947. In January 1992,
Macy's filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy
Code. Macy's emerged from bankruptcy in December 1994. Mrs. Michelson
first became a Director of the Corporation in 1974. Mrs. Michelson is also
a Director of Federated Department Stores, General Electric Company, The
Goodyear Tire and Rubber Company, Quaker Oats Company and The Stanley
Works, Inc. Mrs. Michelson is a Governor of the American Stock Exchange
and is Chairman-Emeritus of the Board of Trustees of Columbia University.
Dean R. O'Hare 52
Chairman, President and Chief Executive Officer of the Corporation
since January 1995. Prior to January 1995, Mr. O'Hare had been Chairman
and Chief Executive Officer since June 1988. Mr. O'Hare had been President
from 1986 until 1988, an Executive Vice President since 1985 and a Senior
Vice President since 1979. He is Chairman and President of Federal,
Vigilant and Great Northern, and Chairman of Pacific, Chubb & Son Inc.,
Bellemead and Chubb Life. Mr. O'Hare has been associated with Chubb & Son
Inc. since 1963. He first became a Director of the Corporation in 1984.
Warren B. Rudman 64
Partner, Paul, Weiss, Rifkind, Wharton & Garrison, attorneys, since
January 5, 1993. Prior to January 5, 1993, Senator Rudman had been a
United States Senator from New Hampshire since 1980. Senator Rudman first
became a Director of the Corporation in 1993. He is also a Director of
Raytheon Company and a Director of eighteen funds in the Dreyfus Family of
Mutual Funds. Senator Rudman is also Vice Chairman of the President's
Foreign Intelligence Advisory Board, Co-Chairman of the Concord Coalition
and a Trustee of Boston College and serves on the Senior Advisory Board of
the Institute of Politics of the John F. Kennedy School of Government at
Harvard University.
Sir David G. Scholey, CBE 59
Chairman and Chief Executive Officer, S. G. Warburg Group plc, an
investment banking firm, since February 1995. Prior to February 1995, Sir
David had been Chairman of S. G. Warburg plc since 1984. He first became a
Director of the Corporation in 1991. Sir David is also a Director of S. G.
Warburg Group plc and Bank of England. Sir David is a Governor of the
London School of Economics and Political Science, and a Trustee of the
Glyndebourne Arts Trust and The National Portrait Gallery.
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<PAGE> 7
NAME AGE(1)
---- ------
Raymond G. Seitz 54
Professional Writer since May 1994. Prior to May 1994, Ambassador Seitz
had been the Ambassador of the United States of America to the Court of
St. James's since 1991 and Assistant Secretary of State for European and
Canadian Affairs from 1989 to 1991. Ambassador Seitz had served as an
Officer in the United States Foreign Service since 1966 wherein he held
many positions in the U.S. and abroad. He first became a Director of the
Corporation in December 1994. Ambassador Seitz is also a Director of The
Telegraph Group plc, General Electric Co., plc and Cable & Wireless Co.,
plc. He is a Trustee of the National Gallery, the Royal Academy and the
World Monument Fund, a member of the Advisory Board of Stanford University
and a member of the British-American Business Council and the Institute
for U.S. Studies at Oxford University.
Lawrence M. Small 53
President and Chief Operating Officer, Federal National Mortgage
Association ("Fannie Mae") since February 1992. Prior to September 1991,
when Mr. Small started with Fannie Mae, he had served as Vice Chairman and
Chairman of the Executive Committee, Citicorp and Citibank, N.A. since
January 1990. Prior to assuming that position, Mr. Small had been Sector
Executive since 1985, responsible for Citicorp's and Citibank's
Institutional Bank, which manages their global corporate banking
activities. He had been associated with Citibank since 1964. He first
became a Director of the Corporation in 1989. Mr. Small is also a Director
of Fannie Mae and Marriott International, Inc. He is also a Director of
New York City's Spanish Repertory Theatre. He is a Trustee of Morehouse
College and New York University Medical Center, a Trustee-Emeritus of
Brown University and a member of the U.S. Holocaust Memorial Council.
Richard D. Wood 68
Former Chairman of the Board, Eli Lilly and Company from 1973 until his
retirement in June 1993. Mr. Wood also served as President and Chief
Executive Officer until November 1991. Eli Lilly and Company is a
global-based corporation that develops, manufactures and markets
pharmaceuticals, medical instruments, diagnostic products and animal
health products. Mr. Wood had been associated with Eli Lilly and Company
since 1950. He first became a Director of the Corporation in 1990. Mr.
Wood is also a Director of Eli Lilly and Company, Amoco Corporation,
Chemical Banking Corporation, Chemical Bank and Dow Jones & Company, Inc.
He is Vice Chairman of the Advisory Board of CID Equity Partners and is
also a Trustee of DePauw University, the Indianapolis Museum of Art and
Chairman of the Indiana State Symphony Society.
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(1) As of April 25, 1995.
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<PAGE> 8
BENEFICIAL SHARE OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table lists beneficial ownership of the Corporation's Common
Stock by Directors, the Chief Executive Officer, the four most highly
compensated executive officers other than the Chief Executive Officer, and
Directors and executive officers as a group in accordance with the definitions
adopted by the Securities and Exchange Commission under Rule 13d-3 of the
Securities Exchange Act of 1934, as amended. No Director or officer beneficially
owns as much as one half of 1% of the outstanding Common Stock, except for Mr.
Chubb, whose beneficial ownership reflected in the table is 1.4%.
<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
COMMON STOCK
BENEFICIALLY
OWNED
MARCH 6,
NAME 1995(1)
---- --------------
<S> <C>
John C. Beck.................................................... 32,441(2)
Percy Chubb, III................................................ 1,238,845(3)(16)(17)
Joel J. Cohen................................................... 14,450(6)
Henry U. Harder................................................. 60,222(9)
David H. Hoag................................................... 200
Robert V. Lindsay............................................... 15,350(5)
Thomas C. MacAvoy............................................... 12,450(7)
Gertrude G. Michelson .......................................... 14,450(5)
Dean R. O'Hare.................................................. 108,449(10)(16)(17)
Warren B. Rudman................................................ 4,100(8)
Sir David G. Scholey, CBE....................................... 6,150(11)
Raymond G. Seitz................................................ 100
Lawrence M. Small .............................................. 13,800(12)
Richard D. Wood................................................. 8,505(15)
Robert P. Crawford, Jr. ........................................ 28,914(4)(16)(17)
Richard D. Smith................................................ 64,168(13)(16)
George T. Van Gilder............................................ 35,067(14)(16)(17)
Directors and Executive Officers as a group .................... 1,902,518(18)
</TABLE>
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(1) Each person has sole voting and investment power with respect to the
shares listed, unless otherwise indicated.
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<PAGE> 9
(2) Includes 18,441 shares held in accounts managed by Beck, Mack & Oliver,
of which Mr. Beck disclaims beneficial ownership, and 12,000 shares that may be
purchased within 60 days pursuant to The Chubb Corporation Stock Option Plan for
Non-Employee Directors (1992).
(3) Includes 92,450 shares held by trusts for Mr. Chubb's benefit, 9,542
shares owned by a member of Mr. Chubb's family who lives in his home, 1,404
shares held in trusts of which a member of Mr. Chubb's family who lives in his
home is trustee, 994,775 shares owned by the Victoria Foundation Inc., of which
Mr. Chubb is President and one of thirteen trustees, 25,850 shares which Mr.
Chubb has the right to purchase within 60 days under the Stock Option Plan
(1984) and The Chubb Corporation Long-Term Stock Incentive Plan (1992) and 353
shares which Mr. Chubb has the right to purchase within 60 days under the Stock
Purchase Plan (1989). Mr. Chubb disclaims beneficial ownership of 1,005,721 of
such shares.
(4) Includes 3,276 shares owned by members of Mr. Crawford's family who
live in his home, 15,800 shares which Mr. Crawford has the right to purchase
within 60 days under the Stock Option Plan (1984) and The Chubb Corporation
Long-Term Stock Incentive Plan (1992), 353 shares which Mr. Crawford has the
right to purchase within 60 days under the Stock Purchase Plan (1989), 276
shares held by Mr. Crawford under the Corporation's Dividend Reinvestment Plan,
and 175 shares held under the Dividend Reinvestment Plan by members of Mr.
Crawford's family who live in his home. Mr. Crawford disclaims beneficial
ownership of 3,451 of such shares.
(5) Includes 14,000 shares that may be purchased within 60 days pursuant to
The Chubb Corporation Stock Option Plan for Non-Employee Directors (1992).
(6) Includes 10,000 shares that may be purchased within 60 days pursuant to
The Chubb Corporation Stock Option Plan for Non-Employee Directors (1992).
(7) Includes 8,000 shares that may be purchased within 60 days pursuant to
The Chubb Corporation Stock Option Plan for Non-Employee Directors (1992).
(8) Includes 4,000 shares that may be purchased within 60 days pursuant to
The Chubb Corporation Stock Option Plan for Non-Employee Directors (1992).
(9) Includes 4,000 shares held in a trust of which Mr. Harder is a trustee
and 3,602 shares owned by a member of Mr. Harder's family who lives in his home
and 8,000 shares that may be purchased within 60 days pursuant to The Chubb
Corporation Stock Option Plan for Non-Employee Directors (1992). Mr. Harder
disclaims beneficial ownership of 7,602 of such shares.
(10) Includes 1,012 shares held by Mr. O'Hare as custodian for his children
who live in his home, 50,942 shares which Mr. O'Hare has the right to purchase
within 60 days under the Stock Option Plan (1984) and The Chubb Corporation
Long-Term Stock Incentive Plan (1992) and 353 shares which
7
<PAGE> 10
Mr. O'Hare has the right to purchase within 60 days under the Stock Purchase
Plan (1989). Mr. O'Hare disclaims beneficial ownership of 1,012 of such shares.
(11) Includes 50 shares owned by a member of Sir David Scholey's family who
lives in his home, of which Sir David disclaims beneficial ownership, and 6,000
shares that may be purchased within 60 days pursuant to The Chubb Corporation
Stock Option Plan for Non-Employee Directors (1992).
(12) Includes 1,600 shares owned by members of Mr. Small's family who live
in his home and 10,000 shares that may be purchased within 60 days pursuant to
The Chubb Corporation Stock Option Plan for Non-Employee Directors (1992). Mr.
Small disclaims beneficial ownership of 1,600 of such shares.
(13) Includes 23,700 shares which Mr. Smith has the right to acquire within
60 days pursuant to The Chubb Corporation Long-Term Stock Incentive Plan (1992).
(14) Includes 16,738 shares which Mr. Van Gilder has the right to purchase
within 60 days under the Stock Option Plan (1984) and The Chubb Corporation
Long-Term Stock Incentive Plan (1992) and 100 shares which Mr. Van Gilder has
the right to purchase within 60 days under the Stock Purchase Plan (1989) and
3,598 shares represented by 698 units in the Corporation Stock Fund of the
Capital Accumulation Plan of The Chubb Corporation.
(15) Includes 5 shares held by Mr. Wood under the Corporation's Dividend
Reinvestment Plan and 8,000 shares that may be purchased within 60 days pursuant
to The Chubb Corporation Stock Option Plan for Non-Employee Directors (1992).
(16) Includes 5,158, 203, 8,436, 6,838 and 417 shares which Messrs. Chubb,
Crawford, O'Hare, Smith and Van Gilder, respectively, may acquire within 60 days
by the conversion of convertible debentures issued pursuant to The Chubb
Corporation Long-Term Stock Incentive Plan (1992).
(17) Includes 856, 668, 856 and 856 shares which were allocated to Messrs.
Chubb, Crawford, O'Hare and Van Gilder, respectively, pursuant to The Chubb
Corporation Employee Stock Ownership Plan (the "ESOP").
(18) Such shares include the shares reflected above as to which Messrs.
Beck, Chubb, Crawford, Harder, O'Hare, Scholey and Small disclaim beneficial
ownership, 8,425 shares which executive officers other than those listed in the
table above disclaim beneficial ownership, 7,954 shares which were allocated to
executive officers other than those listed in the table above pursuant to the
ESOP, 127,727 shares which executive officers other than those listed in the
table above have the right to purchase within 60 days under the Stock Option
Plan (1984) and The Chubb Corporation Long-Term Stock Incentive Plan (1992),
2,668 shares which executive officers other than those listed in the table above
have the right to purchase within 60 days under the Stock Purchase Plan (1989),
4,776 shares which
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<PAGE> 11
executive officers other than those listed in the table above have the right to
acquire within 60 days by conversion of convertible debentures issued pursuant
to The Chubb Corporation Long-Term Stock Incentive Plan (1992) and 2,353 shares
represented by 456 units in the Corporation Stock Fund of the Capital
Accumulation Plan which are beneficially owned by three executive officers other
than those listed in the table above, and shares owned by Mrs. Ernesta G.
Procope and Mr. Robert G. Stone, Jr., two Directors not standing for
re-election. Mrs. Procope beneficially owned 15,747 shares of Common Stock
including 14,000 shares which she has the right to acquire within 60 days
pursuant to The Chubb Corporation Stock Option Plan for Non-Employee Directors
(1992) and 357 shares held in the Corporation's Dividend Reinvestment Plan. Mr.
Stone beneficially owned 21,950 shares of Common Stock including 3,000 shares
owned by a member of Mr. Stone's family who lives in his home, 4,500 shares held
in a trust of which Mr. Stone is a trustee and a beneficiary and 14,000 shares
which he has the right to acquire within 60 days pursuant to The Chubb
Corporation Stock Option Plan for Non-Employee Directors (1992). Mr. Stone
disclaims beneficial ownership of 3,000 of said shares. All Directors and
Executive Officers as a group own 2.2% the outstanding Common Stock.
CERTAIN SHAREHOLDERS
As of March 6, 1995, Sun Alliance Group plc ("Sun Alliance") (at 1
Bartholomew Lane, London, EC2N 2AB, England) held 4,511,958 shares of Common
Stock of the Corporation (approximately 5.2% of the outstanding Common Stock at
March 6, 1995). Sun Alliance has reported that it holds such shares for the
purpose of investment.
The Board of Directors knows of no other beneficial owner of five percent
or more of the Corporation's Common Stock nor does it know of any arrangement
which may at a subsequent date result in a change in control of the Corporation.
See "Transactions with Certain Shareholders".
AUDIT, ORGANIZATION & COMPENSATION AND NOMINATING COMMITTEES
The Board of Directors has an Audit Committee, an Organization &
Compensation Committee and a Nominating Committee.
The Audit Committee is composed of Messrs. Small (Chairman), Hoag, Seitz
and Wood and Mrs. Michelson. No officer of the Corporation or of any of its
subsidiaries may serve on the Audit Committee. In 1994, the Committee met four
times. The functions of the Audit Committee include reviewing the accounting
principles and practices employed by the Corporation and, to the extent the
Committee deems appropriate, of the Corporation's subsidiaries; meeting with the
Corporation's independent auditors to review their reports on their audits of
the Corporation's accounts, their comments on the internal accounting controls
and internal audit procedures of the Corporation and the action taken by
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<PAGE> 12
management with regard to such comments; and recommending annually to the Board
of Directors the appointment of the Corporation's independent auditors. The
Committee has the power at its discretion to order interim and surprise audits
and to perform such other duties as may be assigned to it from time to time by
the Board of Directors.
The Organization & Compensation Committee is composed of Messrs. Lindsay
(Chairman), Cohen, Small and Wood and Mrs. Michelson. No officer of the
Corporation or any of its subsidiaries may serve on the Organization &
Compensation Committee. In 1994, the Committee met five times. The Committee
monitors the performance and oversees the promotion of the senior executive
officers of the Corporation and its principal operating subsidiaries and
periodically consults with the Chief Executive Officer and other members of
senior management regarding the development of qualified replacements to succeed
key executives and other aspects of succession planning. The Committee
determines overall compensation policy for senior management of the Corporation,
recommending to the Board of Directors new compensation programs or changes in
existing programs which the Committee finds appropriate. Any action to be taken
with regard to the salary of any employee of the Corporation or any of its
subsidiaries, which is in excess of certain amounts, is subject to ratification
by the Committee. In addition, the Committee performs administrative functions
pursuant to The Chubb Corporation Director's Charitable Award Program, The Chubb
Corporation Long-Term Stock Incentive Plan (1992) (the "Long-Term Stock
Incentive Plan"), the Annual Incentive Compensation Plan, The Chubb Corporation
Investment Department/Chubb Asset Managers, Inc. Incentive Compensation Plan,
the Stock Purchase Plan (1989) and the Stock Option Plan (1984) and ratifies
certain awards made pursuant to incentive or bonus plans of subsidiaries of the
Corporation.
The Nominating Committee is composed of Mrs. Michelson (Chairperson) and
Messrs. Cohen and Lindsay. The Committee seeks out, evaluates and recommends
qualified nominees for election as Directors and makes recommendations
concerning the size and composition of the Board. In 1994, the Committee met
once. The Committee will consider Shareholder recommendations for Director upon
receipt of appropriate biographical information and confirmation of the proposed
nominee's bona fide intent to serve on the Board of Directors if nominated and
elected. For additional information on this process, Shareholders should write
to Henry G. Gulick, Vice President and Secretary, The Chubb Corporation, 15
Mountain View Road, P.O. Box 1615, Warren, New Jersey 07061-1615.
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<PAGE> 13
DIRECTORS' ATTENDANCE
In fiscal year 1994, there were four meetings of the Board of Directors of
the Corporation. All of the incumbent Directors attended 75% or more of the
aggregate of their respective Board and Committee meetings.
DIRECTORS' COMPENSATION
All Directors of the Corporation are also directors of three of the
Corporation's subsidiaries: Federal, Vigilant and Chubb Life. Certain of the
Corporation's Directors are also directors of other subsidiaries of the
Corporation. It is the practice of the Corporation's Board of Directors to hold
concurrent meetings with the Boards of Directors of Federal, Vigilant and Chubb
Life.
Each Director receives an annual stipend in the amount of $25,000, all of
which is paid by the Corporation. In addition, a meeting fee of $1,000 is paid
to Directors for each meeting of the Board of Directors attended, of which the
Corporation, Federal, Vigilant and Chubb Life each pay $250. Directors receive a
fee of $1,000 for each Committee meeting attended. In those instances where
Committees of the Corporation, Federal, Vigilant and Chubb Life meet
concurrently, each shares proportionately in the payment of the fee. In
addition, members of the Finance Committee, the Executive Committee, the
Organization & Compensation Committee, the Audit Committee and the Pension and
Profit Sharing Committee receive an annual stipend from the Corporation of
$5,000. The Chairmen of the Audit Committee and of the Organization &
Compensation Committee receive annual stipends from the Corporation of $10,000
for service on those committees in lieu of the foregoing committee stipends.
Members of the Life Advisory Committee of Chubb Life receive an annual stipend
of $5,000 in addition to a fee of $1,000 for each Committee meeting attended,
both of which are paid by Chubb Life. Directors who are officers of the
Corporation receive meeting fees for attendance at Directors' meetings only and
do not receive stipends or fees for Committee meetings.
For the year 1994, Messrs. Chubb, Harder and O'Hare also received
directors' fees from certain subsidiaries of the Corporation totalling $2,000,
$4,500 and $2,000, respectively.
Pursuant to the Deferred Compensation Plan for Non-Employee Directors
adopted by the Corporation in 1987, Directors may elect to defer, until a date
specified, receipt of all or a portion of their compensation. This plan provides
that, in addition to a Cash Account upon which amounts deferred earn interest
compounded quarterly, at the prime rate of Citibank, N.A. in effect on certain
specified dates, amounts deferred may also be allocated to a Market Value
Account, the value of which is based upon the market value of the Corporation's
Common Stock from time to time, a Shareholder's Equity
11
<PAGE> 14
Account, the value of which is based upon the book value of the Corporation's
Common Stock established on an annual basis, or a combination of such accounts.
At March 6, 1995, deferred compensation accounts were maintained for seven
Directors, five of whom are currently deferring compensation pursuant to this
plan. For 1994, Directors deferred receipt of $258,500 of compensation from the
Corporation and its subsidiaries. At December 31, 1994, the aggregate account
values reflecting Directors' deferrals and earnings on such deferrals were as
follows: $1,468,064 for the Market Value Account, $656,708 for the Shareholder's
Equity Account and $15,935 for the Cash Account.
DIRECTOR'S CHARITABLE AWARD PROGRAM
Effective January 1, 1992, the Corporation established the Director's
Charitable Award Program. Under the Program, which is administered by the
Organization & Compensation Committee, each non-employee Director following his
or her first election to the Board of Directors by Shareholders may recommend
that the Corporation direct one or more charitable contributions totalling
$500,000 to eligible tax exempt organizations. Generally, eligible Directors are
paired, and contributions are made to the organizations selected by a Director
upon the death of the second paired Director. At March 6, 1995, twelve eligible
Directors were participating in the Program. The Program may be funded by the
Corporation through, among other vehicles, the purchase of life insurance
policies on the lives of the Directors. Individual Directors derive no financial
benefit from this Program since all charitable deductions accrue solely to the
Corporation. The Program may be terminated at any time by the Organization &
Compensation Committee.
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
The Chubb Corporation Stock Option Plan for Non-Employee Directors (1988)
was adopted by the Board of Directors and approved by Shareholders in 1988 and
was amended, extended and renamed The Chubb Corporation Stock Option Plan for
Non-Employee Directors (1992) (the "1992 Non-Employee Directors Plan") by the
Board of Directors and approved by Shareholders in 1992. The 1992 Non-Employee
Directors Plan provides that an aggregate of 300,000 shares of Common Stock of
the Corporation are available for issuance upon exercise of options granted
thereunder. The 1992 Non-Employee Directors Plan shall terminate on the day
following the 1996 Annual Meeting of Shareholders.
The 1992 Non-Employee Directors Plan is administered by the Board of
Directors. Only Eligible Directors, as defined, are eligible for grant of
options under the 1992 Non-Employee Directors Plan. There are currently fourteen
Eligible Directors. As of the date of each Annual Meeting that occurs while
12
<PAGE> 15
the 1992 Non-Employee Directors Plan is in effect, each individual who is then
an Eligible Director will be granted an option to purchase 2,000 shares of
Common Stock of the Corporation. The purchase price per share of the Common
Stock deliverable upon exercise of the option shall be 100% of the fair market
value per share of Common Stock on the day the option is granted.
Options granted under the 1992 Non-Employee Directors Plan are nonstatutory
options. The options shall be exercisable in whole or in part at all times after
the date of grant. All outstanding options held by an optionee shall be
automatically canceled upon termination of the optionee's service as an Eligible
Director, except for terminations due to retirement and under certain other
specified circumstances.
In the case of certain mergers, consolidations or combinations of the
Corporation with or into other corporations, or in the event of a Change of
Control of the Corporation, as defined, the holder of each option then
outstanding shall (unless the Board of Directors determines otherwise) have the
right to receive on the date or effective date of such event a cash payment in
an amount calculated as set forth in the 1992 Non-Employee Directors Plan.
13
<PAGE> 16
EXECUTIVE COMPENSATION AND CERTAIN TRANSACTIONS
I. SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------- ------------------------
AWARDS PAYOUTS
---------- ----------
SECURITIES
UNDERLYING ALL OTHER
OPTIONS/ LTIP COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY(1) BONUS(2) SARS(3) PAYOUTS(4) SATION(5)
---------------------------- ----- -------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Dean R. O'Hare.............. 1994 $765,232 $628,260 12,000 $289,229 $116,504
Chairman, President and 1993 735,270 661,275 12,000 250,113 121,958
Chief Executive Officer 1992 733,423 644,572 12,000 478,400 139,158
Richard D. Smith............ 1994 484,770 434,738 0 192,819 77,667
Former President 1993 477,308 499,277 8,200 175,079 80,873
1992 466,039 459,646 8,000 363,584 88,887
Percy Chubb, III............ 1994 340,770 275,007 5,000 102,868 46,619
Vice Chairman 1993 326,001 269,285 4,500 100,045 48,897
1992 327,193 259,734 4,500 200,928 54,839
Robert P. Crawford, Jr...... 1994 260,001 298,559 5,000 89,951 37,553
Executive Vice President 1993 212,500 143,275 4,500 84,450 31,795
1992 195,192 115,000 3,300 172,224 34,366
George T. Van Gilder........ 1994 261,231 170,138 3,800 89,951 36,330
Senior Vice President 1993 242,462 170,383 4,000 87,539 34,798
1992 228,750 120,000 3,300 191,360 35,959
</TABLE>
---------------
(1) Includes directors fees for 1994, 1993 and 1992 of $6,000, $7,000 and $6,500
for Mr. O'Hare, $4,000, $5,000 and $4,500 for Mr. Smith and $6,000, $7,000
and $7,000 for Mr. Chubb.
(2) Includes amounts paid for such years under the Annual Incentive Compensation
Plan and for 1994 under the Profit Sharing Plan of The Chubb Corporation,
Chubb & Son Inc. and Participating Affiliates (1987) (the "Profit Sharing
Plan (1987)"), and for 1993 a special 1% payment in lieu of profit sharing
and also includes for Messrs. O'Hare, Smith and Chubb amounts paid for such
years and for Mr. Crawford amounts paid for 1994 and for Mr. Van Gilder
amounts paid for 1993 and 1994 in settlement of equity share awards under
the Long-Term Stock Incentive Plan. Payments in settlement of equity share
awards were made partly in cash and partly in convertible debentures. The
convertible debentures are subordinated to the Corporation's other
indebtedness and are convertible into shares of the Corporation's Common
Stock at a conversion price which is equal to
14
<PAGE> 17
the fair market value of such stock on the date of issuance of the
convertible debenture. The debentures have a ten year term and bear a market
rate of interest fixed on the date of issuance. If the executive terminates
employment prior to five years after the issuance of a debenture, the
debenture, or the shares if conversion has occurred, are forfeited except
for certain specified terminations. The debentures are nontransferable
except in the event of death. Shares received upon conversion are also
nontransferable (except in the case of death) for a period of five years
after the date of conversion.
(3) Includes options granted in such years under the Long-Term Stock Incentive
Plan.
(4) Includes payments made in settlement of performance share awards for the
three year periods ended December 31, 1992, 1993 and 1994 under the
Long-Term Stock Incentive Plan.
(5) Includes allocations for 1994, 1993 and 1992 under the qualified Capital
Accumulation Plan and the Capital Accumulation Plan benefit equalization
plan of $49,369, $48,691 and $52,147 for Mr. O'Hare, $33,000, $32,053 and
$33,699 for Mr. Smith, $19,791, $19,121 and $21,193 for Mr. Chubb, $16,000,
$13,100 and $12,962 for Mr. Crawford and $15,449, $14,059 and $12,070 for
Mr. Van Gilder and allocations for 1994, 1993 and 1992 under the ESOP
qualified plan and the ESOP excess plan of $67,135, $73,267 and $87,011 for
Mr. O'Hare, $44,667, $48,820 and $55,188 for Mr. Smith, $26,828, $29,776 and
$33,646 for Mr. Chubb, $21,553, $18,695 and $21,404 for Mr. Crawford, and
$20,881, $20,739 and $23,889 for Mr. Van Gilder.
II. OPTIONS/SAR GRANTS TABLE
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------- POTENTIAL REALIZED
% OF VALUE
TOTAL AT ASSUMED ANNUAL
NUMBER OF OPTIONS/ RATES
SECURITIES SARS OF STOCK PRICE
UNDERLYING GRANTED TO EXERCISE APPRECIATION FOR
OPTIONS/ EMPLOYEES OR BASE OPTION TERM(3)
SARS IN FISCAL PRICE EXPIRATION ---------------------
NAME GRANTED(1) YEAR(2) PER SHARE DATE 5% 10%
---------------------------- ----------- ----------- --------- -------------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Dean R. O'Hare.............. 12,000 1.59% $ 81.9375 June 8, 2004 $618,361 $1,567,047
Richard D. Smith(4)......... 0 0 -- -- -- --
Percy Chubb, III............ 5,000 .66 81.9375 June 8, 2004 257,650 652,936
Robert P. Crawford, Jr...... 5,000 .66 81.9375 June 8, 2004 257,650 652,936
George T. Van Gilder........ 3,800 .50 81.9375 June 8, 2004 195,814 496,232
</TABLE>
---------------
(1) The number of shares for each person represents a stock option granted under
the Long-Term Stock Incentive Plan without a related stock appreciation
right. These options are exercisable for 50% of the number of shares shown
on June 9, 1995 and 100% on June 9, 1996. The exercise price
15
<PAGE> 18
for each stock option is the fair market value of the Corporation's Common
Stock on the date of grant.
(2) Based on total grants during the year of 754,525 shares.
(3) The assumed 5% and 10% annual rates of stock price appreciation used in the
table are prescribed by the proxy rules and are not intended to forecast
possible future appreciation in the price of the Corporation's Common Stock.
(4) Mr. Smith was not awarded options or SARs in 1994 in anticipation of his
scheduled retirement which occurred on December 31, 1994.
III. AGGREGATED OPTION/SAR EXERCISES AND FISCAL YEAR-END
OPTION/SAR VALUE TABLE
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FY-END AT FY-END(1)
----------- ------------
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
---------------------------- --------------- ------- ------------- --------------------
<S> <C> <C> <C> <C>
Dean R. O'Hare.............. 0 0 50,942/18,000 $ 996,785/$0
Richard D. Smith............ 0 0 23,700/ 0 124,844/ 0
Percy Chubb, III............ 0 0 25,850/ 7,250 667,590/ 0
Robert P. Crawford, Jr. .... 800 $34,444 17,200/ 7,250 390,791/ 0
George T. Van Gilder........ 2,175 82,735 16,738/ 5,800 376,647/ 0
</TABLE>
---------------
(1) Based on a value per share at December 31, 1994 of $77.375.
16
<PAGE> 19
IV. LONG-TERM INCENTIVE PLAN AWARDS TABLE
LONG-TERM INCENTIVE PLAN -- AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
PERFORMANCE OR ESTIMATED FUTURE PAYOUTS
NUMBER OF OTHER PERIOD UNDER NON-STOCK PRICE-BASED
SHARES, UNITS UNTIL PLANS (UNITS OR $)
OR OTHER MATURATION OR ----------------------------
NAME RIGHTS(1) PAYOUT THRESHOLD TARGET MAXIMUM
-------------------------------------- ------------- -------------- --------- ------ -------
<S> <C> <C> <C> <C> <C>
Dean R. O'Hare(1)..................... 4,100 1994-96 2,050 4,100 6,150
(2)..................... 4,000 1994-95 2,000 4,000 6,000
Richard D. Smith(1)................... 2,800 1994-96 1,400 2,800 4,200
(2)................... 2,700 1994-95 1,350 2,700 4,050
Percy Chubb, III(1)................... 1,800 1994-96 900 1,800 2,700
(2)................... 1,350 1994-95 675 1,350 2,025
Robert P. Crawford, Jr.(1)............ 2,000 1994-96 1,000 2,000 3,000
(2)............ 1,450 1994-95 725 1,450 2,175
George T. Van Gilder(1)............... 1,300 1994-96 650 1,300 1,950
(2)............... 1,300 1994-95 650 1,300 1,950
</TABLE>
---------------
(1) Includes performance share awards granted under the Corporation's Long-Term
Stock Incentive Plan in 1994 with respect to the three year performance
cycle ending December 31, 1996. The number of shares earned is dependent on
the achievement of a specified earnings per share target established by the
Organization & Compensation Committee for the three year period. Settlement
of the awards may be in shares or cash or a combination of both in the
discretion of the Organization & Compensation Committee.
(2) Pursuant to proposed regulations under Section 162(m) of the Internal
Revenue Code (the "Code"), performance share awards granted in 1993 for the
three year performance cycle ending December 31, 1995 did not satisfy all of
the requirements of these regulations and payments of these awards to
"covered employees" earning in excess of $1 million would not qualify for
tax deductibility. Accordingly, these awards were canceled and replaced on
March 3, 1994 with revised performance share awards issued for the same
number of shares and having a two year cycle ending December 31, 1995 which
are intended to qualify for deductibility under Section 162(m) of the Code.
Notwithstanding anything to the contrary set forth in any of the
Corporation's previous filings under the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended, that might incorporate future
filings, including this Proxy Statement, in whole or in part, the following
Performance Graph and the Organization & Compensation Committee Report on pages
18 through 24 shall not be incorporated by reference into any such filings.
17
<PAGE> 20
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG THE CORPORATION'S COMMON STOCK,
THE STANDARD & POOR'S 500 STOCK INDEX, THE STANDARD & POOR'S
PROPERTY AND CASUALTY INDEX AND THE STANDARD & POOR'S
MULTI-LINE INSURANCE INDEX
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) CHUBB S&P 500(R) S&P P&C(R) S&P M-L(R)
<S> <C> <C> <C> <C>
1989 100 100 100 100
1990 117 97 98 82
1991 170 126 122 110
1992 200 136 143 125
1993 179 150 141 140
1994 183 152 148 148
</TABLE>
---------------
* Assumes that the investment in the Corporation's Common Stock and each index
was $100 on December 31, 1989 and that all dividends were reinvested.
18
<PAGE> 21
ORGANIZATION & COMPENSATION COMMITTEE REPORT
EXECUTIVE OFFICER COMPENSATION POLICIES
The Corporation's executive compensation program is designed to align
Shareholder interests with business strategy, company values and management
initiatives. It is based on the following four principles: (i) to link the
interests of management with those of Shareholders by making a substantial
portion of executive compensation depend upon the Corporation's financial
performance and by encouraging stock ownership in the Corporation, (ii) to
attract and retain superior executives by providing them with the opportunity to
earn total compensation packages that are among the most competitive in the
industry, (iii) to reward individual results by recognizing performance through
salary, annual cash incentive and long-term incentives, and (iv) to manage
compensation based on the level of skill, knowledge, effort and responsibility
needed to perform the job successfully.
The keystone of the Corporation's compensation program is to pay for
performance. Other than base salary, all major elements of the Corporation's
executive compensation program vary directly with both corporate and individual
performance. A position evaluation program establishes grade levels among all
positions reflecting the importance and value of each position to the
Corporation. A position's grade level determines a range of values within which
the executive's compensation is administered.
Executive officers' compensation includes: annual cash compensation
(consisting of base salary and annual incentive awards paid in cash) and
long-term incentive awards, as well as additional features which are available
to most other employees of the Corporation and its subsidiaries, including
profit sharing plans, pension plans, a stock purchase plan and an employee stock
ownership plan, all of which allocate payments generally based on an
individual's level of annual cash compensation.
It is the general policy of the Corporation that executive officer
compensation qualify for tax deductibility under the proposed regulations under
Section 162(m) of the Internal Revenue Code, which was added by the 1993 Omnibus
Budget Reconciliation Act ("OBRA"). Under Section 162(m), which became effective
January 1, 1994, in order to qualify for tax deductibility, payment of
compensation in excess of $1 million to the chief executive officer and the four
other highest paid executive officers must be made in accordance with
performance criteria disclosed to and approved by Shareholders and pursuant to
pre-established arrangements which, among other things, limit the exercise of
discretion to increase the awards beyond the limits initially set. The Committee
believes that mathematical formulas cannot always anticipate and fairly address
every situation which may arise. For this reason, the Committee has historically
retained the authority to adjust compensation awarded in light of extraordinary,
unusual or non-recurring events. The Committee continues to believe that this
reservation of authority, and its exercise under appropriate circumstances,
operates in the best interests
19
<PAGE> 22
of the Corporation and its Shareholders even though in exercising such
authority, compensation might not be deductible.
ANNUAL CASH COMPENSATION
Amounts paid as base salary, including merit salary increases, are
determined by the executive's performance, placement in the salary range
established for the executive's position and the salaries offered in the
industry for comparable positions. Outside independent consultants are
periodically used to gather and analyze industry comparisons of salary data to
insure that the salary ranges used in the compensation program are competitive
for comparable positions. The Committee monitors and approves changes in base
salary for senior executive officers (including the executive officers named in
the Summary Compensation Table). Promotional salary increases reflect the
executive's movement from one grade level to another and are granted when
earned.
The Committee sets and approves the formulas which establish the amounts
available for annual incentive awards. For 1994, incentive awards paid to most
executive officers were determined under the Annual Incentive Compensation Plan.
This plan's formula measures the Corporation's performance, including combined
loss and expense ratio ("combined ratio"), net income and return on equity
against the results of an industry comparison group. Net income under this
formula is the Corporation's investment income arising from the property and
casualty insurance business and underwriting profit or loss from that business.
Each year the Committee approves goals for the combined ratio and net income
based on the outlook for business conditions that year. After the close of
business each year, the formula takes into account how well the Corporation
performed against its own goals and how well it performed against an industry
comparison group's average combined ratio and return on equity. Included in this
industry comparison group are those companies which, along with the Corporation,
comprise the Standard & Poor's Property and Casualty Index (except for a
reinsurance company included in this index) and the companies which comprise the
Standard & Poor's Multi-Line Insurance Index used in the Performance Graph on
page 18 as well as three other insurance companies against which the Corporation
has over time compared itself.
The annual incentive pool actually paid is determined by weighing the
combined ratio result as well as the net income and return on equity results to
generate a total award pool under the Plan. A percent is applied to the target
dollar award pool for each job grade to develop a final cash award pool. The
pool can range from 0% to 200% of the target dollar award for all participants
covered by the Plan.
Amounts actually paid for annual incentive awards to executives are based
on the executive's individual performance and salary grade midpoint. Where
applicable, individual performance is judged on the following considerations:
profit, growth, expense control, productivity, leadership, staff develop-
20
<PAGE> 23
ment, diversity management, performance/compensation management, innovation,
collaboration and internal/external customer service. Awards are approved by the
Committee based upon recommendations by management after year end. Over the past
few years, annual cash compensation has been administered to slow the growth in
base salaries and place a greater proportion of the executive's annual cash
compensation at risk through the variable amounts available for an annual
incentive award.
Other annual cash incentive plans in which certain executive officers
participate include the Bellemead Development Corporation Incentive Compensation
Plan (the "Bellemead Incentive Plan"), the Chubb LifeAmerica Incentive
Compensation Plan (the "Chubb Life Incentive Plan"), The Chubb Corporation
Investment Department/Chubb Asset Managers, Inc. Incentive Compensation Plan
(the "Investment Department Incentive Plan"), The Profit Sharing Plan (1987),
The Bellemead Profit Sharing Plan and the Chubb Life Profit Sharing Plan. The
Bellemead Incentive Plan and the Chubb Life Incentive Plan are each based on a
formula which measures the achievement of actual net income against planned net
income. The Investment Department Incentive Plan provides both annual and
long-term cash awards which are competitive with those provided by similar
financial institutions, including property and casualty insurance companies and
banks. Such awards are granted to the Corporation's investment professionals and
are based on results measured against market indices which represent standards
of investment performance regularly used by investment analysts to compare and
analyze the performance of investment professionals responsible for managing a
particular asset class. The Profit Sharing Plan (1987) provides employees of the
Corporation and its participating subsidiaries with cash awards on a sliding
scale of 0% to 4% of a participant's eligible compensation based on a schedule
relating to the consolidated return on premiums earned by the property and
casualty insurance subsidiaries of the Corporation. The Bellemead Profit Sharing
Plan provides for cash awards on a sliding scale of 0% to 10% of a participant's
annual compensation depending upon the relationship of planned to actual net
income for the year. The Chubb Life Profit Sharing Plan provides for cash awards
on a sliding scale of 0% to 11% of a participant's annual compensation depending
on Chubb Life's annual results.
LONG-TERM INCENTIVE AWARDS
Long-term incentive awards are made under the Long-Term Stock Incentive
Plan. The Long-Term Stock Incentive Plan, which is administered by the
Committee, is an omnibus plan and provides stock based awards to eligible
employees which include most levels of management as well as the Corporation's
executive officers. The Plan was designed in consultation with a
nationally-recognized executive compensation consulting firm which periodically
provides advice with regard to the ongoing administration of the Plan. Awards
granted to executive officers include stock options, performance share awards,
restricted stock awards and equity share/convertible debenture awards.
21
<PAGE> 24
Stock option awards are based on guidelines that provide for larger awards
commensurate with position level and that reflect competitive grant practices of
a comparison group within the insurance and financial services industry.
Included in this group are two of the five companies which, along with the
Corporation, comprise the Standard & Poor's Property and Casualty Index, two of
the three companies which comprise the Standard & Poor's Multi-Line Index, two
additional insurance companies against which the Corporation has over time
compared itself, as well as five banking institutions reflecting the fact that
the Corporation, while principally engaged in the business of insurance, also
operates generally within the financial services industry. The number of option
shares granted to an executive in any year may vary based upon the most recent
assessment of the executive's performance.
Performance share awards are generally granted annually and are earned
based on earnings per share targets or other selected corporate financial goals
for three year performance periods. As with options, the number of performance
shares granted is based on position level and the executive's most recent level
of performance. Payment values are dependent on the Corporation's stock price at
the end of the performance period, thus linking executives' interests directly
with Shareholders, as well as the achievement of selected corporate financial
goals. In 1994, a performance goal was established for the three year
performance period ending in 1996 reflecting a cumulative operating earnings per
share target for such period. Because performance share awards granted in 1993
would not satisfy all of the requirements under proposed regulations under
Section 162(m) of the Internal Revenue Code, payment of these awards to "covered
employees" earning in excess of $1 million would not qualify for tax
deductibility. Accordingly, these awards made to "covered employees" or
individuals who potentially could become "covered employees" were canceled and
replaced in March 1994 with revised performance share awards issued for the same
number of shares and having a two-year cycle ending December 31, 1995 which are
intended to qualify for tax deductibility. In determining operating income under
performance share award calculations for the three-year performance period ended
December 31, 1994, the Committee eliminated the effect of the previously
disclosed 1993 third quarter net charge to income of $357.5 million after taxes
(the "third quarter charge") relating to two unrelated events, the Fibreboard
asbestos litigation settlement and the commutation of a medical malpractice
reinsurance agreement.
Restricted stock awards are generally granted as an alternative to
performance shares to a limited number of executive officers in positions
requiring specialized skills and knowledge that do not entail the broad
management responsibilities most appropriately tied to performance share grants.
22
<PAGE> 25
With respect to equity share/convertible debenture awards, the Committee
approves a profit participation pool which historically has been less than
one-half of one percent of the Corporation's operating income above a ten
percent return on beginning equity. Certain percentage amounts of the pool are
allocated to selected senior corporate executives based on their potential
performance and long range contribution to the Corporation. As a consequence of
their participation in this program, these executives are subsequently granted
approximately 20% fewer stock options and performance share grants than they
otherwise would have received pursuant to established guidelines. Awards earned
are paid in the form of subordinated convertible debentures which are fully
forfeitable upon termination of employment within five years of issue for any
reason except death, disability or retirement.
CEO COMPENSATION
Mr. O'Hare is a participant in all of the aforementioned components of the
compensation program except restricted stock awards. The value of his
compensation from each component of the program is a direct reflection of both
his individual performance and the Corporation's performance as described below.
Mr. O'Hare's salary was reviewed in June 1994 under the Corporation's
normal merit guidelines. Based upon the Committee's judgment that his
performance was excellent during the 15 month review period, Mr. O'Hare received
an increase of 6.1%. The principal performance criteria considered by the
Committee were the Corporation's key financial measures such as growth in
earnings per share, net income, operating income, return on equity and revenue
against established targets. Additional criteria considered were global
expansion, industry leadership, corporate citizenship and succession planning.
Mr. O'Hare's annual cash incentive award for 1994 was $555,000, which
represents an increase of 17% from the incentive award paid for 1993. The
Corporation achieved a combined loss and expense ratio of 99.5%, which
outperformed the combined ratio average of 112.1% for the industry comparison
group referred to above under the discussion concerning Annual Cash
Compensation. In addition, although the Corporation slightly underperformed its
net income (as defined) goal, it achieved an operating earnings return on equity
of 11.5%, which surpassed the industry comparison group's average of 4.6%. The
Committee determined that Mr. O'Hare's leadership skills and financial
management talent contributed substantially to these results and reflected this
in the incentive award paid to him. Mr. O'Hare, as did all other eligible
employees, received a payment of one percent (1%) of eligible compensation for
the 1994 plan year pursuant to the terms of the Profit Sharing Plan (1987).
In June 1994, Mr. O'Hare was granted 4,100 performance shares for the three
year performance period ending December 1996 as well as stock options for 12,000
shares. The Committee recognized
23
<PAGE> 26
that, excluding the third quarter charge, the Corporation achieved outstanding
results in 1993 as measured by, among other things, the principal performance
criteria described above. The Committee decided to award grants that were highly
competitive within the insurance and financial services industry described above
under the general discussion concerning Long-Term Incentive Awards. Each of the
grants is near the top of the grant guideline range which the Committee has
established for Mr. O'Hare's position (after taking into account the
approximately 20% reduction due to Mr. O'Hare's participation in the equity
share/convertible debenture award). In March 1994, Mr. O'Hare was also granted
4,000 performance shares for the two-year performance period ending December 31,
1995. This grant was issued to replace his 1993 performance share grant which
was canceled, in response to the tax deductibility concerns described in the
Long-Term Incentive Awards discussion above.
With respect to performance shares granted in June 1992 for the three year
performance period which ended December 1994, excluding the 1993 third quarter
charge, the cumulative earnings per share during this performance period was
slightly below the target established by the Committee in 1992. On this basis,
Mr. O'Hare earned performance shares having a value of $289,229, compared with
the performance share award payment made last year of $250,113.
Based on the Corporation's operating income, Mr. O'Hare was paid a gross
equity share award of $60,918 for 1994 results. This compares with his gross
1993 equity share award of $173,992. After applying appropriate tax withholding,
the net amount of the award was reflected in the issuance to Mr. O'Hare of a ten
year subordinated convertible debenture in the amount of $31,677 bearing annual
interest of 7.25%. The Committee believes that the percentage of the profit
participation pool granted to Mr. O'Hare reflects his contribution to the
Corporation's results and directly relates to the financial interests of
Shareholders, management and employees.
Total compensation reported for Mr. O'Hare for 1994, including payment of
performance shares for the three year cycle ended December 31, 1994, was
$1,799,225 which is 2% more than his corresponding 1993 total compensation of
$1,768,616.
The foregoing report has been furnished by the following members of the
Board of Directors of the Corporation who constitute the Organization &
Compensation Committee:
Robert V. Lindsay (Chairman) Joel J. Cohen
G. G. Michelson Lawrence M. Small
Richard D. Wood
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<PAGE> 27
PENSION PROGRAM
Eligible employees of the Corporation and certain of its subsidiaries
participate in The Pension Plan of The Chubb Corporation, Chubb & Son Inc. and
Participating Affiliates (the "Pension Plan"). As in effect during 1994, the
Pension Plan provides to each such employee annual retirement income beginning
at age 65 equal to the product of (x) the total number of years of participation
in the Pension Plan (but not more than 35 years) and (y) the difference between
(i) 1 3/4% of average compensation for the five years in the last ten years of
participation prior to retirement during which the employee was most highly paid
("final average earnings") and (ii) an amount related to the employee's primary
Social Security benefit.
The Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
and the Internal Revenue Code of 1986, as amended (the "Code"), impose maximum
limitations on the annual amount of a pension which may be paid under a funded
defined benefit plan such as the Pension Plan. The Pension Plan complies with
these limitations. The Board of Directors adopted, effective as of January 1,
1976, an unfunded benefit equalization plan of the type permitted by ERISA which
will provide annual payments to persons who are participants under the Pension
Plan and their beneficiaries. Such payments will be equal to the difference
between (a) the benefits which would be payable to such persons under the
Pension Plan, without taking into consideration the limitations imposed by ERISA
and the Code, and (b) the maximum annual benefits to which such persons are
entitled under the Pension Plan by reason of such limitations.
The table which follows shows the estimated annual benefits payable upon
retirement to persons in specified remuneration and years-of-service
classifications under the Pension Plan and the unfunded benefit equalization
plan (referred to collectively as the "Pension Program"). The retirement
benefits shown are based upon retirement at the age of 65 and computed on the
basis of straight life annuity benefits. Such benefits, as shown in the
following table, are subject to an offset of an amount related to the primary
Social Security benefits in an amount approved by the Internal Revenue Service
in effect at the time of retirement.
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<PAGE> 28
ESTIMATED ANNUAL RETIREMENT BENEFITS PAYABLE AT AGE 65
STRAIGHT LIFE ANNUITY BASIS
TO AN EMPLOYEE RETIRING IN 1995
<TABLE>
<CAPTION>
YEARS OF CREDITED SERVICE
FINAL -------------------------------------------------------------------
AVERAGE 35 OR
EARNINGS 15 20 25 30 MORE
----------- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C>
$ 100,000 ............... $ 26,250 $ 35,000 $ 43,750 $ 52,500 $ 61,250
200,000 ............... 52,500 70,000 87,500 105,000 122,500
300,000 ............... 78,750 105,000 131,250 157,500 183,750
400,000 ............... 105,000 140,000 175,000 210,000 245,000
500,000 ............... 131,250 175,000 218,750 262,500 306,250
600,000 ............... 157,500 210,000 262,500 315,000 367,500
700,000 ............... 183,750 245,000 306,250 367,500 428,750
800,000 ............... 210,000 280,000 350,000 420,000 490,000
900,000 ............... 236,250 315,000 393,750 472,500 551,250
1,000,000 ............... 262,500 350,000 437,500 525,000 612,500
1,100,000 ............... 288,750 385,000 481,250 577,500 673,750
1,300,000 ............... 341,250 455,000 568,750 682,500 796,250
1,500,000 ............... 393,750 525,000 656,250 787,500 918,750
1,600,000 ............... 420,000 560,000 700,000 840,000 980,000
1,700,000 ............... 446,250 595,000 743,750 892,500 1,041,250
</TABLE>
Remuneration covered by the Pension Program includes salary (including
salary contributed to the Capital Accumulation Plan of The Chubb Corporation,
Chubb & Son Inc. and Participating Affiliates), overtime and awards under the
Annual Incentive Plan (1984), the Bellemead Incentive Plan, the Chubb Life
Incentive Plan, the Investment Department Incentive Plan and the Profit Sharing
Plan (1987) in the year paid rather than the year earned and, effective January
1, 1992, includes awards under the Bellemead Profit Sharing Plan and the Chubb
Life Profit Sharing Plan.
With respect to the individuals named in the Summary Compensation Table on
page 14, Messrs. Chubb, Crawford, O'Hare, Smith and Van Gilder have 35, 28,
27 1/2, 35 and 22 1/2 years of credited service, respectively, and their 1994
remuneration for purposes of the Pension Program was $494,770, $400,001,
$1,234,232, $825,001 and $386,231, respectively.
26
<PAGE> 29
EXECUTIVE SEVERANCE AGREEMENTS
Pursuant to a recommendation by the Organization & Compensation Committee
and authorization by the Board of Directors, the Corporation has in force
severance agreements with four executive officers of the Corporation. Each
agreement becomes operative only upon a "Change in Control" that occurs when the
officer is in the employ of the Corporation. Under the agreements, a "Change in
Control" occurs if (a) following a tender or exchange offer for voting
securities of the Corporation, a proxy contest for election of the directors, or
a merger or consolidation or sale of all or substantially all of its business or
assets, its directors immediately prior to such event cease to constitute a
majority of the Board of Directors when such event occurs or within one year
thereafter or (b) any person or group acquires 25% or more of the outstanding
voting securities of the Corporation without prior approval by a majority of the
directors then in office. Such agreements have an initial term of two years and
are automatically extended for successive two-year periods unless the
Corporation gives one year's prior notice that it is terminating an agreement at
the end of the then current two-year period.
If a change in control occurs and the officer's employment with the
Corporation terminates within two years thereafter (other than by reason of
death, disability, retirement at normal retirement age, discharge for cause, or
voluntary termination by the officer except for Good Reason), the officer
becomes entitled to the severance benefits described below. Termination for
"Good Reason" means termination because of, among other things, the involuntary
assignment of such officer to duties inconsistent with his position prior to
such change in control; reduction of the officer's base salary or bonus; the
Corporation acting with adverse effect upon the officer's benefits under any
benefit plans in which he is participating at the time of such change in
control; or a determination made by the officer in good faith that as a result
of such change in control the officer cannot discharge his duties effectively.
Upon such termination, the officer's severance benefits shall equal a
multiple of 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 of the officer's annual
awards under the Corporation's, Bellemead's and Chubb Life's incentive
compensation plans for the three years preceding such change in control. The
multiple is four in the case of Mr. O'Hare and two in the case of the other
officers. Also, the Corporation must maintain in force the insurance and
disability benefits available to the officer immediately prior to the change in
control, or their equivalents, for two years after such termination or until the
earlier commencement of new, full-time employment by the officer. The officer is
not required to mitigate the amount of any payments by seeking other employment.
The Corporation must pay all legal fees and expenses incurred by the officer as
a result of such termination, including any incurred in seeking to enforce the
severance agreement.
27
<PAGE> 30
As of March 6, 1995, payments to the officers with whom the Corporation has
severance agreements would have been as follows: Mr. Percy Chubb, III,
$1,079,735; Mr. Robert P. Crawford, Jr., $936,069; Mr. Donn H. Norton, $733,333
and Mr. Dean R. O'Hare, $5,160,003. The Corporation does not believe that
payment of these amounts would have a material adverse effect on the financial
or operating condition of the Corporation. The Stock Option Plan (1984) and the
Long-Term Stock Incentive Plan both provide for the accelerated payment or
vesting of awards granted under such plans in the event of a Change in Control
of the Corporation.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Organization & Compensation Committee is composed of Messrs. Lindsay
(Chairman), Cohen, Small and Wood and Mrs. Michelson. No current or former
officers or employees of the Corporation or any of its subsidiaries served on
the Organization & Compensation Committee and no executive officer of the
Corporation has served on the compensation committee of another corporation.
Mr. Joel J. Cohen is a Managing Director of Donaldson, Lufkin & Jenrette
Securities Corporation ("DLJ"), which firm provides investment banking and
securities brokerage services to the Corporation and its subsidiaries. In
addition, certain subsidiaries of the Corporation participate as limited
partners in an investment partnership (the "Partnership") of which DLJ Merchant
Banking Inc. is the managing general partner.
Mr. Lawrence M. Small is President and Chief Operating Officer of Fannie
Mae. The Corporation and its subsidiaries purchase, in the ordinary course of
business, debt securities guaranteed by Fannie Mae.
The Corporation believes that the above transactions were effected on terms
as favorable to the Corporation and its subsidiaries as could have been obtained
from other sources in view of the nature of the services rendered.
TRANSACTIONS WITH DIRECTORS AND THEIR ASSOCIATES
Messrs. Cohen and Small, members of the Corporation's Organization &
Compensation Committee, are affiliated with organizations that did business with
the Corporation and its subsidiaries during 1994. See "Compensation Committee
Interlocks and Insider Participation."
Senator Rudman is a Partner of Paul, Weiss, Rifkind, Wharton & Garrison,
which firm has acted as counsel to a subsidiary of the Corporation.
28
<PAGE> 31
Sir David G. Scholey is Chairman and Chief Executive Officer of S. G.
Warburg Group plc, an investment banking firm, which through its affiliate
companies during 1994 provided certain securities transaction services and
currency exchange services to the Corporation.
The Corporation believes that the above transactions were effected on terms
as favorable to the Corporation and its subsidiaries as could have been obtained
from other sources in view of the nature of the services rendered.
In 1994, various subsidiaries of the Corporation had transactions in the
ordinary course of their business with certain Directors and officers of the
Corporation and their associates in connection with policies of insurance issued
to them by such subsidiaries. All employees of the Corporation and certain of
its subsidiaries are offered the opportunity to obtain property and casualty
personal insurance from various subsidiaries of the Corporation at a price
representing a maximum discount of 10% from the normal price.
TRANSACTIONS WITH CERTAIN SHAREHOLDERS
The Corporation has relationships with insurance companies which are
subsidiaries of Sun Alliance, an insurance holding company organized under the
laws of England (collectively, the "Sun Group"). As reported, the Sun Group as
of March 6, 1995 was the beneficial owner of approximately 5.2% of the
Corporation's Common Stock, acquired solely for the purpose of investment.
The Corporation's property and casualty insurance subsidiaries reinsure
approximately 14% of their United States insurance business on a quota share
basis with one of the Sun Group companies. In 1994, this Sun Group company's
premiums earned arising from such reinsurance were $489,727,000. Pursuant to the
contract which governs the relationship, this Sun Group company pays to the
Corporation's property and casualty insurance subsidiaries an override
commission and a profit commission, the latter determined by the prior year's
results of that business. Such payments were $8,085,000 and $4,458,000,
respectively, in 1994. Pursuant to an agreement effective January 1, 1992, Chubb
& Son Inc. provides staff for several of the Sun Group companies on a cost
reimbursement basis. The amount of the cost reimbursement for 1994 under this
agreement was approximately $150,000.
A wholly-owned subsidiary of the Corporation assumes reinsurance from
members of the Sun Group with respect to certain of the Sun Group's property and
casualty insurance business. Assumed reinsurance premiums earned from this
business amounted to $264,343,000 for the year 1994. Members of the Sun Group
receive profit commissions which are determined by the results of that business.
In 1994, commission payments of approximately $467,000 were made.
The Corporation's property and casualty insurance subsidiaries entered into
a stop loss reinsurance agreement with a subsidiary of the Sun Group, effective
year end 1985, relating to medical malpractice
29
<PAGE> 32
loss reserves. The agreement provides that the Sun Group will pay up to
$285,000,000 of losses and loss adjustment expenses for this discontinued class
of business in excess of the initial $225,000,000 to be paid by the property and
casualty insurance subsidiaries subsequent to December 31, 1985. In 1994, the
property and casualty subsidiaries recovered $9,507,000 of loss and loss
adjustment expenses from the Sun Group under this agreement. The agreement
provides for contingent profit sharing payments to the property and casualty
insurance subsidiaries computed as of December 31, 1990, December 31, 1992 and
December 31, 1994. Based on the profit sharing computation as of December 31,
1994, the property and casualty insurance subsidiaries received $20,062,000 in
January 1995. The agreement also provides that the property and casualty
insurance subsidiaries may elect to commute the remaining liability as of
December 31, 1995. In August 1993, the Corporation announced the intention of
the property and casualty subsidiaries to exercise this election. The
commutation will result in a payment by the Sun Group to the property and
casualty subsidiaries of approximately $190,000,000 at year end 1995 and a
concurrent reduction in reinsurance recoverable from the Sun Group of
approximately $65,000,000. The difference of $125,000,000 represents return
premium and was recognized as such in 1993.
Wholly-owned subsidiaries of the Corporation have entered into two joint
ventures with Sun Group companies to market homeowners insurance and surety
bonds, respectively.
Additionally, in the regular course of their international business, the
Corporation's property and casualty insurance subsidiaries may and do assume and
cede reinsurance to and from members of the Sun Group, as they do with other
insurers on similar terms and conditions.
The Corporation believes that such transactions are all on terms as
favorable to the Corporation as those available from unrelated third parties.
APPROVAL OF SELECTION OF
INDEPENDENT AUDITORS
The Board of Directors, acting upon the recommendation of the Audit
Committee, recommends for approval by the Shareholders the selection of Ernst &
Young LLP ("Ernst & Young") as the independent auditors of the Corporation for
the year 1995. Ernst & Young has acted as such auditors for the Corporation for
many years.
In addition to its principal service of auditing the financial statements
of the Corporation and its subsidiaries, Ernst & Young provided certain
non-audit services for the Corporation and its subsidiaries during 1994, and
such services were approved by the Audit Committee. In approving such services,
the Audit Committee determined that the nature of the services and the estimated
fees to be charged would have no adverse effect on the independence of the
auditors.
30
<PAGE> 33
Representatives of Ernst & Young are expected to be present at the Annual
Meeting and to have the opportunity to make a statement should they desire to do
so and to be available to respond to appropriate questions.
VOTING, SOLICITATION OF PROXIES AND SHAREHOLDER PROPOSALS
The Proxy, if returned properly executed and not subsequently revoked by
written notice delivered to the Secretary of the Corporation, will be voted in
accordance with the choice made by the Shareholder with respect to the proposals
listed thereon. If a choice is not made with respect to such proposals and
authority to vote for Directors is not withheld, the Proxy will be voted in
favor of such proposals and will be voted for the election of Directors as
described under "Election of Directors" above.
Under New Jersey law and the Corporation's By-Laws, each share of Common
Stock outstanding on the record date is entitled to one vote at the Annual
Meeting of Shareholders, and the presence in person or by proxy of the holders
of shares entitled to cast a majority of the votes constitutes a quorum. Votes
are tabulated by the Corporation's transfer agent using the transfer agent's
automated system. Under New Jersey law, Directors are elected by a plurality of
the votes cast at the meeting. The approval of the other proposals at the
meeting requires the affirmative vote of a majority of the votes cast by
Shareholders entitled to vote at the meeting. Proxies submitted with abstentions
and broker non-votes are included in determining whether or not a quorum is
present. Votes withheld for the election of Directors have no impact on the
election of Directors, except that votes withheld may result in another
individual receiving a higher number of votes. Abstentions and broker non-votes
are not counted in tabulating the number of votes cast on other proposals
presented to Shareholders.
The Board of Directors is aware of no matters other than those specifically
stated in the Notice of Annual Meeting which are to be presented for action at
the meeting. However, should any further matter requiring a vote of the
Shareholders arise, it is the intention of the persons named in the Proxy to
vote the Proxy in accordance with their judgment.
The cost of this solicitation of proxies is being borne by the Corporation.
In addition to the solicitation of proxies by use of the mails, the Corporation
may use the services of one or more Directors, officers or other regular
employees of the Corporation (who will receive no additional compensation for
their services in such solicitation) to solicit proxies personally and by
telephone. Arrangements will be made with brokerage firms and other custodians,
nominees and fiduciaries to forward solicitation material to the beneficial
owners of the shares held of record by such persons and the Corporation will
reimburse them for reasonable expenses actually incurred by them in so doing. In
addition, the
31
<PAGE> 34
Corporation has retained Georgeson & Company Inc., New York, New York, to aid in
the solicitation of proxies by mail, in person and by telephone for a fee which
is estimated not to exceed $12,500 plus out-of-pocket expenses.
Proposals by Shareholders intended to be presented at the 1996 Annual
Meeting must be received by the Corporation no later than November 15, 1995 in
order to be qualified for inclusion in the Corporation's Proxy Statement and
form of proxy for such meeting.
By order of the Board of Directors,
HENRY G. GULICK
Vice President and Secretary
March 14, 1995
32
<PAGE> 35
NOTICE OF
ANNUAL MEETING
AND
PROXY STATEMENT
Annual Meeting of
Shareholders
April 25, 1995
(LOGO)
THE CHUBB CORPORATION
<PAGE> 36
PROXY
THE CHUBB CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE CORPORATION FOR ANNUAL MEETING APRIL 25, 1995
The undersigned shareholder of THE CHUBB CORPORATION (the "Corporation")
acknowledges receipt of the Notice of the Annual Meeting of Shareholders and
Proxy Statement each dated March 14, 1995 and the undersigned revokes all prior
proxies and appoints DEAN R. O'HARE, HENRY G. GULICK and PHILIP J. SEMPIER, and
each of them, proxies for the undersigned to vote all shares of Common Stock of
the Corporation, which the undersigned would be entitled to vote at the Annual
Meeting of Shareholders to be held at 15 Mountain View Road, Warren, New Jersey
at 11:00 a.m. on April 25, 1995 and any adjournment or postponement thereof, on
all matters coming properly before said meeting.
Election of Directors, Nominees:
John C. Beck, Percy Chubb, III, Joel J. Cohen, Henry U. Harder,
David H. Hoag, Robert V. Lindsay, Thomas C. MacAvoy,
Gertrude G. Michelson, Dean R. O'Hare, Warren B. Rudman,
Sir David G. Scholey, CBE, Raymond G. H. Seitz, Lawrence M. Small,
and Richard D. Wood.
PLEASE MARK, SIGN, DATE AND RETURN PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
SEE REVERSE SIDE
/ X / PLEASE MARK YOUR VOTES AS THIS EXAMPLE 7668
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1 AND 2.
THE BOARD OF DIRECTORS OF THE CHUBB CORPORATION RECOMMENDS A VOTE FOR:
1. Election of Directors (see reverse)
FOR WITHHELD
/ / / /
For, except vote withheld from the following nominee(s):
----------------------------------------------------------------------------
2. Approval of Ernst & Young LLP as the independent auditors of the
Corporation.
FOR AGAINST ABSTAIN
/ / / / / /
SIGNATURE(S)________________________________________________ DATE______________
NOTE: Please sign name exactly as printed hereon. Joint owners should each
sign. When signing as attorney, administrator, executor, guardian or
trustee, please give title as such.
