Exhibit 10.3


 


	
  

  	
  St. Paul
  Travelers

  385 Washington Street

  St. Paul, MN 55102-1396

  651-310-7911 TEL

  www.stpaultravelers.com

  



 


 


April 27, 2005


 


 


William Heyman


1111 Park Avenue, Apt# 9C


NY, NY 10128


 


Dear Bill:


 


The purpose of this letter agreement (“Letter Agreement”) is to confirm
our respective understandings and agreements regarding your waiver of rights
and agreement to certain terms under The St. Paul Companies, Inc. Amended and
Restated Special Severance Policy (the “Policy”) in exchange for consideration
from The St. Paul Travelers Companies, Inc. (the “Company”), as set forth in
this Letter Agreement.


 


I.                                         PAYMENT
TERMS


 


For purposes of this Letter Agreement and the
Policy, it is agreed that (a) there has been a Change in Control for purposes
of the Policy, and (b) you would be entitled to receive severance benefits
under the Policy if you had a Qualifying Termination (as defined under the
Policy) and signed a Release and Separation Agreement.  In exchange for your waiver of rights under
the Policy and agreement to the terms of this Letter Agreement, the Company
agrees to pay and provide: (i) a cash payment of One
Million Eight Hundred Fifty One Thousand Six Hundred Sixty Nine Dollars
($1,851,669), less applicable withholdings (the “Cash Payment”); and (ii)
excise tax treatment pursuant to Section 4(a) of and Exhibit A to the
Policy [the combination of (i) and (ii) referred to
as the “Benefits”].  If the Internal
Revenue Code would otherwise impose an excise tax on the Cash Payment because
the payment is considered an “excess parachute payment,” the Company shall
provide a gross-up payment to offset the excise tax.  However, if the Cash Payment would not be
subject to the excise tax if it were reduced by less than 10% of the portion
that would be treated as an “excess parachute payment” under the Internal
Revenue Code, then the Cash Payment shall be reduced to the maximum amount that
could be paid without giving rise to the excise tax.  Payment will be made within 20 days of the
date this Letter Agreement is executed by both parties.


 


II.                                     WAIVER
OF RIGHTS


 


As a material inducement for Company to
provide the consideration set forth in Section I of this Letter Agreement,
you have agreed to waive any rights you may have had under the Policy.  You acknowledge that the consideration is
good and valuable consideration in exchange for this Letter Agreement.


 





















 


III.                                 SEPARATION
OF EMPLOYMENT


 


A.                                    Covenants
Not to Solicit/Interfere.  As
further material inducement for Company to enter into this Letter Agreement,
you agree that if your employment with Company terminates prior to April 2,
2008, you will be subject to the following restrictive covenants:


 


You acknowledge and agree that, by virtue of opportunities derived from
your access to confidential information and employment with Company, you are
capable of significantly and adversely impacting the existing relationships of
Company with its clients, customers, policyholders, vendors, consultants,
employees, and/or agents.  You acknowledge
that Company has a legitimate interest in protecting these relationships
against solicitation and/or interference by you for a reasonable period of time
following the date on which you leave the Company (“Separation Date”).  Accordingly, the parties agree that the
covenants described in this Section and its subparts shall apply for a
duration of twelve (12) months following the Separation Date (“the Restricted
Period”).  You acknowledge and agree that
the covenants described in this Section and its subparts are expressly
intended to protect and preserve the legitimate business interests and goodwill
of Company.  You acknowledge that the
Cash Payment received includes fair consideration for these covenants.  You further acknowledge and agree that your
breach of this Section and its subparts will cause Company irreparable
injury and damage that cannot be reasonably or adequately compensated by
monetary damages.  You, therefore,
expressly agree that Company shall be entitled to injunctive or other equitable
relief in order to prevent a breach of this Section and its subparts, in
addition to such other remedies as are legally available to Company.  You will expressly waive the claim that
Company has an adequate remedy at law.


 


1.                                       Solicitation
of Employees.  You shall not,
without the prior written consent of Company, at any time during the Restricted
Period, directly or indirectly, solicit, 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 any Company on the
Separation Date or thereafter or, on behalf of you or any other person, hire,
employ or engage any such person.  You
further agree that, during such time, if a person who is employed by Company contacts
you about prospective employment, you will inform such person that you cannot
discuss the matter, unless and until consent of Company has been obtained.  For purposes of this subsection, requests for
consent must be delivered via facsimile to John Clifford, the Senior Vice
President of Human Resources for the Company (or his successor), with the
original sent via certified mail to Kenneth F. Spence, III, Executive Vice
President and General Counsel for the Company (or his successor).


 


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2.                                       Solicitation of and/or Interference with Existing
Commercial Relationships. 
You shall not, without the prior written consent of Company, at any time
during the Restricted Period, directly or indirectly, solicit any person or
entity, who or that, as of the Separation Date, was or is a client, customer,
policyholder, vendor, consultant or agent of any Company, to discontinue
business with Company, and/or move that business elsewhere or otherwise change
an existing customer relationship with Company. 
You further agree that, during such time, if such a client, customer,
policyholder, vendor, consultant or agent contacts you about discontinuing
business with Company, and/or moving that business elsewhere, or otherwise
changing an existing commercial relationship with Company, you will inform such
client, customer, policyholder, vendor, consultant or agent that you cannot
discuss the matter without notifying Company. 
Prior to any discussion of the matter, you are obligated to notify
Company of the name of the person who made the contact, the customer,
policyholder, vendor, consultant or agent with whom the person is affiliated,
and the nature and the date of the contact. After notifying Company of the
contact, you must receive written consent from Company before discussing the
matter with such client, customer, policyholder, vendor, consultant or
agent.  For purposes of this subsection,
notification and requests for consent must be delivered via facsimile to the
current Executive Vice President of the business unit for which you worked as
of the Separation Date, with the original sent via certified mail to Kenneth F.
Spence, III, Executive Vice President and General Counsel for the Company (or
his successor).


 


IV.                                SATISFACTION
OF OBLIGATIONS


 


The Consideration to be provided under Section I
of this Letter Agreement is in satisfaction of, and not in addition to,
payments otherwise provided under the Policy or any other Company severance
plan or contractual agreement under which you could assert that Company is obligated
to provide benefits, for a period extending three (3) years from the date this
Letter Agreement is executed.


 


V.                                    MISCELLANEOUS
PROVISIONS


 


A.                                   Amendment or Termination.  This Letter Agreement may not be amended or
terminated without the prior written consent of you and Company.


 


B.                                     Execution.  This Letter Agreement may be executed in any
number of counterparts that together shall constitute but one agreement.  However, the Letter Agreement shall not be
effective until it has been executed by both parties.


 


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C.                                     Assignment.  The rights and obligations described in this
Letter Agreement may not be assigned by either party without the prior written
consent of the other party, except that Company may assign its rights or
delegate its obligations to any direct or indirect wholly owned subsidiary of
The St. Paul Travelers Companies, Inc., without your consent.  This Letter Agreement shall be binding on and
inure to the benefit of our respective successors and, in your case, your heirs
and other legal representatives.


 


D.                                    Release.  In consideration of the payments contemplated
herein, you will execute a release in its customary form, releasing Company
from all claims arising from your employment through the date on which you sign
this Letter Agreement.


 


E.                                      Arbitration; Governing Law.  Any controversy or claim between Company and
you arising out of this Letter Agreement will be resolved by binding
arbitration in the State of Minnesota using the Laws of the State of Minnesota
in accordance with the Arbitration Rules of the American Arbitration
Association. Any judgment on the award rendered by the arbitration(s) may be
entered in any court having jurisdiction over such matters.


 


If you are in agreement with the terms of this letter, please indicate
that acceptance by signing below. Keep one original for your files and return
the other to me. To the extent that the content of this letter conflicts in any
way with previous written or oral communication between you, me or any other
representatives of The St. Paul Travelers Companies, Inc., the content of this
letter will control and take precedence over such previous communication.


 


 


	
  Entered into this 29th day of April, 2005.

  	
   

  
	
   

  	
   

  
	
  WILLIAM HEYMAN

  	
  THE ST. PAUL TRAVELERS

  COMPANIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
     /s/ William H. Heyman

  	
   

  	
  By:

  	
     /s/ John P. Clifford

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
     SVP – HR

  	
   

  
	
   

  	
   

  	
     4/29/05

  
					



 


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