Exhibit 10.18


 


ST. PAUL TRAVELERS


STOCK
OPTION GRANT NOTIFICATION AND AGREEMENT [U. S. VP LEVEL]


 


	
  Participant:

  	
   

  	
  Grant Date:

  	
   

  	
   

  
	
  Number of Shares:

  	
   

  	
  Grant Price:

  	
   

  	
  $         

  
	
  Expiration Date:

  	
   

  	
   

  	
   

  	
   

  



 


1.              Grant of Option. This
option 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 a
non-qualified stock option (the “Option”) to purchase the number of shares set
forth above of the Company’s common stock, no par value (“Common Stock”), at an
option price per share (the “Grant Price”) set forth above, 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 Option are specified
in this grant 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 exercise, all of which are
hereby incorporated by reference into this grant notification and agreement to
the extent not otherwise set forth herein. The terms, conditions and
restrictions in this grant notification and agreement, the Prospectus, and the
Plan constitute the Option agreement between the Participant and the Company (“Agreement”).
By accepting this Option, the Participant acknowledges receipt of the
Prospectus and that he or she has read and understands the Prospectus.


 


The Participant understands that this Option 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
Option is contingent, and depends on the future market price of the Company’s
common stock, among other factors. The Participant further confirms his or her
understanding that the Option is intended to promote employee retention and
stock ownership and to align employees’ interests with those of shareholders,
is subject to vesting conditions and will be canceled if vesting conditions are
not satisfied. Thus, Participant understands that (a) any monetary value
assigned to the Option 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
Option 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) vesting may be subject to confirmation and final
determination by the Company’s Board of Directors or a Committee of the Board
that conditions to vesting have been satisfied. The Participant shall have no
rights as a stockholder of the Company with respect to any shares covered by
this Option unless and until the Option vests, is properly exercised and shares
of Company common stock are issued.


 


3.              Vesting. The
Option shall vest and become exercisable on the dates set forth below, in
installments equal to the percentage amounts set forth below, multiplied by the
number of shares subject to the Agreement set forth above. The Option will
expire on the tenth (10th) anniversary of the Grant Date set forth
above, provided the Participant remains continuously employed by the Company or
one of its subsidiaries.


 


	
  INSTALLMENT PERCENTAGES

  	
   

  	
  VESTING DATES

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 

















 


4.              Exercise of Option.
The Option may be exercised in whole or in part by the Participant
upon notice to the Company together with provision for payment of the Grant
Price and applicable withholding taxes. Such notice shall be given in the
manner prescribed by the Company and shall specify the date and method of
exercise and the number of shares being exercised. The Participant acknowledges
that the laws of the country in which the Participant is working at the time of
grant or exercise of the Option (including any rules or regulations
governing securities, foreign exchange, tax, or labor matters) or Company
accounting or other policies dictated by such country’s political or regulatory
climate, may restrict or prohibit any one or more of the stock option
exercise methods described in the Prospectus, that such restrictions may apply
differently if the Participant is a resident or expatriate employee, and that
such restrictions are subject to change at any time.


 


5.              Termination of, and
Breaks in, Employment. The terms and conditions set forth on Exhibit A
hereto shall apply with respect to terminations of, and breaks in, employment.


 


6.              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 site to which Participant has
access.


 


7.              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 Option, 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.


 


8.              Entire Agreement; No
Right to Employment. The Agreement constitutes the entire understanding
between the parties hereto regarding the Option 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.


 


9.              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 grant notification and agreement, or
the terms, conditions, and restrictions of the Option as specified in the
Prospectus, the Plan shall control.


 


10.       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 B,
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 B.


 


11.       Acceptance and Agreement by
Participant; Forfeiture upon Failure to Accept. By clicking the button
below, Participant accepts the Option and agrees to be bound by the terms,
conditions, and restrictions set forth in the Prospectus, the Plan, this
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 Stock Option Grant 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 Option may be canceled before the end of the vesting
period and the vesting and exercisability of your Option may be affected.


 


The provisions in the chart below apply to Options made under the Plan.
Additional rules for vesting and exercisability 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 Options:

  
	
   

  	
   

  	
   

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

  	
   

  	
  Vesting stops and unvested options will be
  cancelled on the termination date. You may exercise your vested options
  for up to 90 days after the termination date but no later than the original
  option expiration date.

  
	
   

  	
   

  	
   

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

  	
   

  	
  Options continue to vest on schedule through
  an approved disability leave (which includes approximately 13 weeks of
  short-term disability and 9 months of long-term disability). Upon termination
  of your employment after 12 continuous months on approved disability leave,
  your unvested options will vest immediately, and you may exercise
  options for up to one year from such vesting but no later than the original
  option expiration date.

  
	
   

  	
   

  	
   

  
	
  Take an approved personal leave of absence

  	
   

  	
  For the first three months of an approved
  personal leave, vesting continues. If the approved leave exceeds three
  months, vesting is suspended until you return to work and remain actively
  employed for 30 calendar days thereafter at which time vesting will be
  restored retroactively. Vested options may be exercised during approved
  leave, but no later than the original option expiration date. If you
  terminate employment for any reason during the first year of an approved
  leave, the applicable termination provisions will apply. If the leave exceeds
  one year, all options will be canceled immediately.

  
	
   

  	
   

  	
   

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

  	
   

  	
  Options will continue to vest on schedule,
  and you may exercise vested options during the leave but no later than
  the original option expiration date.

  
	
   

  	
   

  	
   

  
	
  Die

  	
   

  	
  Options fully vest upon death. Your estate may exercise
  options for up to one year from the date of death but no later than the
  original option expiration date.

  
	
   

  	
   

  	
   

  
	
  Are terminated involuntarily for gross
  misconduct or for cause

  	
   

  	
  Vesting stops and all outstanding options
  are cancelled on the termination date. You may exercise vested options
  on or before the termination date but no later than the original option
  expiration date.

  



 


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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)

  	
   

  	
  Vesting stops on the termination date. You may exercise
  vested options for up to 90 days after the termination date but no later than
  the original option expiration date.

  



 


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

  	
   

  	
  Options
  fully vest on the termination date and may be exercised for up to three
  years from the termination date, but no later than the original option
  expiration date, provided that you do not engage in any activities that
  compete with the business operations of the Company. You are not subject to
  this competition provision if you are terminated involuntarily.

  



 


Notes to the termination
provisions


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


 


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EXHIBIT B


 


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.


 


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


 


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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 Agreement, including the terms
of the Non-Solicitation

and Non-Disclosure Agreement. You will not be able to undo this change.)


 


Agree/Accept


 


(Click
on the button below to return to ECW and accept the terms of your Agreement at
another time. You

will not be able to undo this change.)


 


Return to Equity Compensation Web


 


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