Exhibit 10.20

 

ST. PAUL TRAVELERS

 PERFORMANCE SHARE AWARD NOTIFICATION AND AGREEMENT [U. S.]

12.]

 

Participant:

 

Grant Date:

 

 

Target Number of Performance Shares:

 

 

 

 

Performance Period: January 1, 2006 to December 31, 2008

 

 

 

 

 

1.              Grant of Performance Shares. This performance share award is
granted pursuant to The St. Paul Travelers Companies, Inc. 2004 Stock Incentive
Plan (the “Plan”), by The St. Paul Travelers Companies, Inc. (the “Company”) to
you, an employee of the Company or a subsidiary of the Company (the
“Participant”). The Company hereby grants to the Participant an award for the
target number of Performance Shares set forth above (the “Award”), pursuant to
the Plan, as it may be amended from time to time, and subject to the terms,
conditions, and restrictions set forth herein.

 

2.              Terms and Conditions. The terms, conditions, and restrictions
applicable to the Award are specified in this award notification and agreement,
the Plan, the prospectus dated [              ] (titled “St. Paul Travelers
Equity Awards”), and any applicable prospectus supplement (together, the
“Prospectus”). The terms, conditions and restrictions in the Prospectus include,
but are not limited to, provisions relating to amendment, vesting, cancellation,
and settlement, all of which are hereby incorporated by reference into this
grant notification and agreement. The terms, conditions and restrictions in this
award notification and agreement, the Prospectus, and the Plan constitute the
Award agreement between the Participant and the Company (the “Agreement”). By
accepting this Award, the Participant acknowledges receipt of the Prospectus and
that he or she has read and understands the Prospectus.

 

The Participant understands that this Award and all other incentive awards are
entirely discretionary and that no right to receive an award exists absent a
prior written agreement with the Company to the contrary. The Participant also
understands that the value that may be realized, if any, from the Award is
contingent, and depends on the future financial performance of the Company,
among other factors. The Participant further confirms his or her understanding
that the Award is intended to promote employee retention and stock ownership and
to align employees’ interests with those of shareholders, is subject to
performance conditions and will be canceled if the performance conditions are
not satisfied. Thus, Participant understands that (a) any monetary value
assigned to the Award in any communication regarding the Award is contingent,
hypothetical, or for illustrative purposes only, and does not express or imply
any promise or intent by the Company to deliver, directly or indirectly, any
certain or determinable cash value to the Participant; (b) receipt of this Award
or any incentive award in the past is neither an indication nor a guarantee that
an incentive award of any type or amount will be made in the future, and that
absent a written agreement to the contrary, the Company is free to change its
practices and policies regarding incentive awards at any time; and
(c) performance may be subject to confirmation and final determination by the
Company’s Board of Directors or a Committee of the Board that the performance
conditions have been satisfied. The Participant shall have no rights as a
stockholder of the Company with respect to any shares covered by this Award
unless and until the Award is earned and settled in shares of Common Stock.

 

3.              Performance Period. For purposes of this Award, the Performance
Period shall be defined as the three-year period commencing January 1, 2006 and
ending December 31, 2008.

 

4.              Vesting. The Participant’s right to the Performance Shares vests
on the last day of the Performance Period if the Participant remains
continuously employed by the Company or one of its subsidiaries on such day. If
the Participant’s employment with the Company and its subsidiaries terminates
during the Performance Period, the Participant’s rights to the Performance
Shares will be determined in accordance with Exhibit A.

 

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5.              Settlement of Award. The number of Performance Shares earned by
the Participant (which shall include any additional Performance Shares credited
to the Participant’s account pursuant to Section 6) shall be calculated based on
the Performance Earnout Schedule table set forth in Exhibit B. The Company shall
deliver to the Participant, subject to any certification of satisfaction of the
performance goal as required by the Plan in order to comply with Section 162(m)
of the Internal Revenue Code, a number of shares of Common Stock equal to the
number of vested and earned Performance Shares on January 1 of the year
following the end of the Performance Period or as soon as administratively
practicable thereafter (but no later than March 15 of the year following the end
of the Performance Period). The number of shares of Common Stock delivered to
the Participant shall be reduced by a number of shares of Common Stock having a
Fair Market Value on the date of delivery equal to the tax withholding
obligation, unless the Plan administrator is notified in advance of the Award
settlement and the Participant elects another method for tax withholding.

 

6.              Dividend Equivalents. The Participant shall be entitled to
receive additional Performance Shares with respect to any cash dividends
declared by the Company. The number of additional Performance Shares shall be
determined by multiplying the number of Performance Shares credited to the
Participant’s account (which shall include the target number of Performance
Shares set forth above, plus any Performance Shares credited in connection with
dividend payments under this Section 6), times the dollar amount of the cash
dividend per share of Common Stock, and then dividing by the Fair Market Value
of the Common Stock as of the dividend payment date. The Participant’s right to
any Performance Shares credited to the Participant’s account in connection with
dividends shall vest in the same manner described in Section 4. As described in
Section 5, such additional Performance Shares shall be included in the total
number of Performance Shares credited to the Participant’s account for purposes
of applying the Performance Earnout Schedule.

 

7.              Consent to Electronic Delivery. In lieu of receiving documents
in paper format, the Participant agrees, to the fullest extent permitted by law,
to accept electronic delivery of any documents that the Company may be required
to deliver (including, but not limited to, prospectuses, prospectus supplements,
grant or award notifications and agreements, account statements, annual and
quarterly reports, and all other forms or communications) in connection with
this and any other prior or future incentive award or program made or offered by
the Company or its predecessors or successors. Electronic delivery of a document
to the Participant may be via a Company e-mail system or by reference to a
location on a Company intranet or internet site to which Participant has access.

 

8.              Administration. In administering the Plan, or to comply with
applicable legal, regulatory, tax, or accounting requirements, it may be
necessary for the Company or the subsidiary employing the Participant to
transfer certain Participant data to the Company, its subsidiaries, outside
service providers, or governmental agencies. By accepting the Award, the
Participant consents, to the fullest extent permitted by law, to the use and
transfer, electronically or otherwise, of his or her personal data to such
entities for such purposes.

 

9.              Entire Agreement; No Right to Employment. The Agreement
constitutes the entire understanding between the parties hereto regarding the
Award and supersedes all previous written, oral, or implied understandings
between the parties hereto about the subject matter hereof. Nothing contained
herein, in the Plan, or in the Prospectus shall confer upon the Participant any
rights to continued employment or employment in any particular position, at any
specific rate of compensation, or for any particular period of time.

 

10.       Arbitration; Conflict. Any disputes under this Agreement shall be
resolved by arbitration in accordance with the Company’s arbitration policies.
In the event of a conflict between the Plan and this award notification and
agreement, or the terms, conditions, and restrictions of the Award as specified
in the Prospectus, the Plan shall control.

 

11.       Non-Solicitation and Non-Disclosure Agreement. The Participant agrees
to be bound by the terms of the Non-Solicitation and Non-Disclosure Agreement
attached hereto as Exhibit C, which provides for the consequences set forth
therein in the event the Participant breaches the non-solicitation and
non-disclosure covenants contained therein, as more fully described in
Exhibit C.

 

12.       Acceptance and Agreement by Participant; Forfeiture upon Failure to
Accept. By clicking the button below, Participant accepts the Award and agrees
to be bound by the terms, conditions, and restrictions set forth in the
Prospectus, the Plan, this notification and agreement, the Non-Solicitation and
Non-Disclosure Agreement and the Company’s policies, as in effect from time to
time, relating to the Plan.

 

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EXHIBIT A

 

To St. Paul Travelers Performance Share Award Notification and Agreement

 

WHEN YOU LEAVE THE COMPANY

 

References to “you” or “your” are to the Participant

 

If you terminate your employment or if there’s a break in your employment, your
Award may be canceled before the end of the Performance Period and your rights
to vesting and settlement of your Award may be affected.

 

The provisions in the chart below apply to Awards made under the Plan.
Additional rules for vesting and settlement of your Award apply in cases of
termination if you satisfy certain age and years of service requirements
(“Retirement Rule”), as set forth in “Retirement Rule” below.

 

If you:

 

Here’s what happens to Your Award:

 

 

 

Resign, or retire (and do not meet the Retirement Rule)

 

Your rights under the Award are cancelled and your right to the Performance
Shares is forfeited.

 

 

 

Become disabled (as defined under the Company’s applicable long-term disability
plan)

 

You will be entitled to receive a payout equal to the number of shares of Common
Stock you would have received, if any, if your employment had not terminated due
to disability, multiplied by a fraction equal to the number of days worked in
the Performance Period divided by the total number of days in the Performance
Period. Any such payout will be made at the time of settlement of the
Performance Shares after the end of the Performance Period.

 

 

 

Take an approved personal leave of absence

 

Your rights under the Award continue when you are on such leave of absence for
up to three months. Once your approved leave of absence exceeds three months,
your rights under the Award are suspended until you return to work and remain
actively employed for 30 calendar days, after which your rights under the Award
will be restored retroactively. If you terminate employment during the leave for
any reason, the applicable termination provisions will apply. If your personal
leave of absence exceeds one year, your rights under the Award are cancelled and
your right to the Performance Shares is forfeited.

 

 

 

Are on an approved family leave, medical leave, dependent care leave, military
leave, or other statutory leave of absence

 

Your rights under the Award continue when you are an such leave of absence.

 

 

 

Die

 

Your estate will be entitled to receive a payout equal to the number of shares
of Common Stock you would have received at the target level of performance
(which is equal to the target number of Performance Shares set forth at the
beginning of this Award), multiplied by a fraction equal to the number of days
worked in the Performance Period divided by the total number of days in the
Performance Period. Any such payout will be made as soon as administrative
possible following your death.

 

 

 

Are terminated involuntarily for gross misconduct or for cause

 

Your rights under the Award are cancelled and your right to the Performance
Shares is forfeited.

 

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Are terminated involuntarily other than for gross misconduct or for cause
(including under the Company’s applicable separation pay plan or any successor
or comparable arrangement)

 

Your rights under the Award are cancelled and your right to the Performance
Shares is forfeited.

 

RETIREMENT RULE

 

If, as of your termination date, you are at least (i) age 65, (ii) age 62 with
one or more full years of service, or (iii) age 55 with 10 or more full years of
service, then you meet the “Retirement Rule.”  If you are terminated under the
Company’s applicable separation pay plan or any successor or comparable
arrangement, if any, your termination date for purposes of determining whether
you qualify under the Retirement Rule is your last day of active employment with
the Company.

 

The Retirement Rule does not apply if you were involuntarily terminated for
gross misconduct or for cause. If you retire and do not meet the Retirement
Rule, you will be considered to have resigned.

 

If you:

 

 

 

 

 

Meet the Retirement Rule

 

You will be entitled to receive a payout a number of shares of Common Stock
equal to the shares you would have received, if any, if your employment had not
terminated due to retirement in accordance with the Retirement Rule, multiplied
by a fraction equal to the number of days worked in the Performance Period
divided by the total number of days in the Performance Period. Any such payout
will be made at the time of settlement of the Performance Shares after the end
of the Performance Period.

 

NOTES TO THE TERMINATION PROVISIONS

•                  The Committee determines what constitutes “gross misconduct”
and “cause.”

 

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EXHIBIT B

 

To St. Paul Travelers Performance Share Award Notification and Agreement

 

Performance Earnout Schedule:

 

Performance Period ROE*

 

% of Target Performance Shares Earned

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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EXHIBIT C

 

NON-SOLICITATION AND NON-DISCLOSURE AGREEMENT

 

THIS NON-SOLICITATION AND NON-DISCLOSURE AGREEMENT (“Agreement”) is a part of
the terms and conditions of the award issued by The St. Paul Travelers
Companies, Inc., a Minnesota corporation with its principal place of business
located in St. Paul, Minnesota and its affiliated entities (collectively, the
“Company”), in favor of the participant named in the term sheet (the “Employee”)
to which this Agreement is attached as an exhibit.

 

WITNESSETH:

 

WHEREAS, the Employee is employed by the Company; and

 

WHEREAS, the Company is engaged in the business of marketing and selling
insurance and insurance-related products throughout the United States.

 

NOW, THEREFORE, in consideration of the promises and the mutual covenants and
obligations hereinafter set forth, the parties agree as follows:

 

1.                                      Consideration. As consideration for the
execution of this Agreement, the Employee acknowledges receipt of an award(s)
issued pursuant to the Company’s 2004 Stock Incentive Plan (the
“Consideration”), as evidenced by term sheet(s) setting forth the terms and
conditions of such award(s) to which this Agreement is attached as an exhibit,
which constitutes good, valuable and independent consideration for all of
Employee’s covenants and obligations in this Agreement and above and beyond any
compensation Employee is entitled to receive from the Company.

 

2.                                      Non-Disclosure of Confidential
Information.

 

(a)                                  Employee recognizes that the Company has
developed information that is confidential, proprietary and/or nonpublic that is
related to its business, operations, services, finances, clients, customers,
policyholders, vendors and agents (“Confidential Information”). Employee
understands and agrees that he/she is prohibited from using, disclosing,
divulging or misappropriating any Confidential Information for his/her own
personal benefit or for the benefit of any person or entity, except that
Employee may disclose Confidential Information pursuant to a properly issued
subpoena, court order, other legal process, or official inquiry of a federal,
state or local taxing authority, or other governmental agency with a legitimate
legal right to know the Confidential Information. If disclosure is compelled of
Employee by subpoena, court order or other legal process, or as otherwise
required by law, Employee agrees to notify Company as soon as notice of such
process is received and before disclosure and/or appearance takes place.
Employee will use reasonable and prudent care to safeguard and prevent the
unauthorized use or disclosure of Confidential Information. Confidential
Information shall not include any information that:  (a) is or becomes a part of
the public domain through no act or omission of Employee or is otherwise
available to the public other than by breach of this Agreement; (b) was in
Employee’s lawful possession prior to the disclosure and had not been obtained
by Employee either directly or indirectly as a result of Employee’s employment
with or other service to the Company; (c) is disclosed to Employee by a third
party who has authority from the Company to make such disclosure and such
disclosure to Employee is not confidential; or (d) is independently developed by
Employee outside of Employee’s employment with the Company and without the use
of any Confidential Information. Employee further acknowledges that Employee, in
the course of employment, has had and will have access to such Confidential
Information.

 

(b)                                 Employee agrees that every document,
computer disk, electronic file, computerized information, computer software
program, notation, record, diary, memorandum, development, investigation, or the
like, and any method or manner of doing business of the Company containing
Confidential Information made or acquired by the Employee during employment by
the Company is and shall be the sole and exclusive property of Company. The
Employee will deliver the same (and every copy, disk, abstract, summary, or
reproduction of the same made by or for the Employee or acquired by the
Employee) whenever the Company may so require and in any event prior to or at
the termination of employment. Nothing in Section 2 is intended or shall be
interpreted to mean that the Company may withhold information, including
computerized information, relating to Employee’s personal contacts and personal
information that may be stored or contained in Employee’s physical or electronic
files. The Company further agrees not to unreasonably withhold information
relating to Employee’s business-related contacts, to the extent such information
falls outside the definition of Confidential Information set forth in
Section 2(a) above.

 

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3.                                      Non-Solicitation/Non-Interference.

 

(a)                                  The parties understand and agree that this
Agreement is intended to protect the Company against the Employee raiding its
employees and/or its business during the twelve (12) month period following the
Separation Date (whether voluntary or involuntary) (the “Restricted Period”),
while recognizing that after conclusion of his/her employment (the “Separation
Date”), Employee is still permitted to freely compete with the Company, except
to the extent Confidential Information is used in such solicitation and subject
to certain restrictions set forth below. Further, nothing in this Agreement is
intended to grant or limit any rights or claims as to any future employer of
Employee. To this end, any court considering the enforcement of this Agreement
for a breach of this Agreement, must accept this statement of intent.

 

(b)                                 After Employee has left the employment of
the Company and during the Restricted Period, Employee will not seek to recruit
or solicit, or assist in recruiting or soliciting, participate in or promote the
solicitation of, interfere with, attempt to influence or otherwise affect the
employment of any person who was or is employed by the Company at any time
during the last three months of Employee’s employment or thereafter. Further,
Employee shall not, on behalf of himself/herself or any other person, hire,
employ or engage any such person. The parties agree that Employee shall not
directly engage in the aforesaid conduct through a third party for the purpose
of colluding to avoid the restrictions in this Agreement. However, nothing in
this Agreement precludes Employee from directing a third party (including but
not limited to employees of his/her subsequent employer or a search firm) to
broadly solicit, recruit, and hire individuals, some of whom may be employees of
the Company, provided that Employee does not specifically direct such third
party to specifically target the Company’s employees generally or specific
individual employees of the Company.

 

(c)                                  After Employee has left the employment of
the Company, accepts a position as an employee, consultant or contractor with a
direct competitor of the Company, and during the Restricted Period, Employee
will not utilize Confidential Information to seek to solicit or assist in
soliciting, participate in or otherwise promote the solicitation of,
interference with, attempt to influence or otherwise affect any person or
entity, who is a client, customer, policyholder, or agent of the Company, to
discontinue business with the Company, and/or move that business elsewhere.
Employee also agrees not to be directly and personally involved in the
negotiation or solicitation of any individual book roll over(s) or other book of
business transfer arrangements involving the transfer of business away from
Company, even if Confidential Information is not involved. However, nothing in
this Agreement precludes the Employee from directing a third party (including
but not limited to employees of his/her subsequent employer) to solicit, compete
for, negotiate and execute book roll over deals or other book of business
transfer arrangements provided that (i) Confidential Information provided by the
Employee is not used, (ii) Employee is not personally and directly involved in
such negotiations, and (iii) Employee does not direct such third party to target
specific agents of Company. Furthermore, nothing in this Agreement precludes the
Employee from freely competing with the Company including but not limited to
competing on an account by account or deal by deal basis to the extent that
he/she does not use Confidential Information.

 

4.                                      Forfeiture of Consideration; Other
Remedies. Employee agrees that if Employee breaches this Agreement during the
Restricted Period, Employee will immediately forfeit any award that has not yet
been paid, exercised or vested and that serves as Consideration for this
Agreement. In addition, the Company will be entitled to recapture from Employee
any and all compensatory value that Employee received within twelve months prior
to or twelve months after the Separation Date from any award that has already
been paid, exercised or vested and that serves as Consideration for this
Agreement. The value subject to recapture includes the amount of any cash
payment made to Employee upon exercise or settlement of the award, and/or the
amount included as compensation in the taxable income of Employee upon vesting
or exercise of the award. Employee will promptly pay the full amount subject to
recapture to the Company upon demand in the form of cash or shares of Company
Common Stock with a current fair market value equal to the amount subject to
recapture. In addition to the remedies set forth in Sections 2, 3 and 4 of this
Agreement, Company may avail itself of any other remedies available under
statute or common law.

 

5.                                      Consent to Jurisdiction. Jurisdiction
and venue for enforcement of this Agreement, and for resolution of any dispute
under this Agreement, shall be exclusively in the federal or state courts in the
state and county where the Employee resides at the time that the Company
commences an action under this Agreement. Employee agrees to notify Company of
any changes in his/her residence after the Separation Date.

 

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6.                                      Modification. This Agreement may not be
terminated or modified without the express written consent of both the Employee
and the Company.

 

7.                                      Employment At Will. Employee
specifically recognizes and agrees that nothing in this Agreement shall be
deemed to establish an employment relationship on a basis other than terminable
at will, that the Company is not obligated to continue Employee’s employment for
any particular period, and that this Agreement is not an employment agreement
for continued employment.

 

8.                                      Governing Law. This Agreement shall be
construed, interpreted and applied in accordance with the laws of the State of
Minnesota.

 

9.                                      Waiver. The waiver of a breach of any
provision of this Agreement shall not operate as or be construed as a waiver of
any subsequent breach of this Agreement.

 

10.                               Severability. If any provision, section or
subsection of this Agreement is adjudged by any court to be void or
unenforceable in whole or in part, this adjudication shall not affect the
validity of the remainder of the Agreement, including any other provision,
section or subsection. Each provision, section, and subsection of this Agreement
is separable from every other provision, section and subsection and constitutes
a separate and distinct covenant. Both Employee and the Company agree that if
any court rules that a restriction contained in this Agreement is unenforceable
as written, the parties will: (a) jointly request and consent to the reformation
of the restriction by the court to the extent necessary to make the Agreement
enforceable, and (b) not to seek to enforce the ruling in any state other than
the state where the ruling was made.

 

11.                               Assignment. This Agreement shall be binding
upon and inure to the benefit of the Company, its successors and assigns and to
the benefit of Employee, his/her heirs and legal representatives. This Agreement
is not assignable by Employee. This Agreement may be assigned by the Company.
Employee transfers to any corporate parent, affiliate or subsidiary of the
Company shall constitute an assignment.

 

12.                               Entire Agreement. This Agreement and any award
agreement or term sheet documenting the equity award(s) that constitutes the
Consideration constitute the entire Agreement and understanding between the
Company and the Employee concerning the subject matters hereof. No modification,
amendment, termination or waiver of this Agreement shall be binding unless in
writing and signed by a duly authorized representative of the Company. Employee
acknowledges and represents that s/he has carefully read this Agreement, that
s/he has considered the terms and conditions contained herein, and that s/he
voluntarily assents to all of these terms and conditions, and that s/he is
accepting this Agreement by Employee’s own free will.

 

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THE ST. PAUL TRAVELERS COMPANIES, INC.

 

PARTICIPANT’S ACCEPTANCE

 

(Click on the button below to accept the terms of your Award, including the
terms of the Non-Solicitation and
Non-Disclosure Agreement. You will not be able to undo this change.)

 

AGREE/ACCEPT

 

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