8-KMaterial Agreements

Chubb Ltd 8-K Report, Material Agreement (Oct 4, 2006)

Filed October 4, 2006For Securities:CB

Summary

This 8-K filing from ACE Limited (now Chubb Ltd) on October 4, 2006, primarily announces a material definitive agreement related to the retirement of Gary Schmalzriedt, former Chairman and CEO of ACE Overseas General. The company entered into a consulting agreement with GTS Consulting, LLC, owned by Mr. Schmalzriedt, for his continued advisory services for a one-year term. This arrangement aims to leverage his expertise on strategic matters and training program development, ensuring a smooth transition and continued value to the company. Key financial implications for investors include the compensation structure for Mr. Schmalzriedt's consulting services, which includes a cash payment and the continued vesting of previously awarded stock options and restricted shares. These provisions are contingent on his satisfactory performance, providing a performance-based incentive. The agreement also includes confidentiality and non-compete clauses, as well as indemnification for Mr. Schmalzriedt, standard for such arrangements.

Key Highlights

  • 1ACE Limited entered into a consulting services agreement with GTS Consulting, LLC, owned by former executive Gary Schmalzriedt.
  • 2The agreement is effective from October 1, 2006, through September 30, 2007.
  • 3Consulting services will focus on strategic matters as directed by the Board of Directors and/or CEO, and training program development.
  • 4Mr. Schmalzriedt will receive $100,000 in cash compensation, payable quarterly, plus reasonable out-of-pocket expenses.
  • 5Unvested stock options and restricted shares previously awarded to Mr. Schmalzriedt will continue to vest during the consulting term, contingent on performance.
  • 6The agreement includes confidentiality obligations and a non-compete covenant for the duration of the consulting term.
  • 7ACE Limited will indemnify Mr. Schmalzriedt for liabilities related to his consulting services.

Frequently Asked Questions

This filing announces a material definitive agreement between ACE Limited and GTS Consulting, LLC (owned by former executive Gary Schmalzriedt) for consulting services following his retirement as Chairman and CEO of ACE Overseas General. It details the terms of his continued engagement.

Mr. Schmalzriedt will receive $100,000 in cash, paid quarterly, and reimbursement for reasonable out-of-pocket expenses. Additionally, his unvested stock options and restricted shares will continue to vest during the consulting term, subject to performance.

The continued vesting of Mr. Schmalzriedt's unvested stock options and restricted shares is expressly conditioned on his satisfactory performance of the consulting services under the agreement.

Mr. Schmalzriedt and GTS Consulting, LLC are subject to confidentiality obligations and a covenant not to compete with ACE Limited during the term of the consulting agreement.