Exhibit
10.1


April 15, 2007


Mr. Alan D.
Schnitzer

425 Lexington Avenue


New York, NY 10017


Dear Alan:


It is my pleasure to provide you with this letter to
confirm our offer for the position of Vice Chairman and Chief Legal Officer of The
Travelers Companies, Inc. (“Travelers”). 
Your first day of employment will be April 23, 2007 or such earlier date
as we agree.  I am very excited about the
future of Travelers, and your leadership and experience will be invaluable to
our continued success.


The following are the principal terms on which you
will be employed:


	
  Position; Duties

  	
   

  	
  You will be Vice Chairman and Chief Legal Officer, and a member of Travelers’ most senior policy
  setting committee of executives, currently the Management Committee. You
  will report directly to me and, to the extent consistent with Travelers’
  by-laws, the Board of Directors and perform such duties as are consistent
  with your positions. Without limiting the generality of the foregoing, your
  specific responsibilities shall include management and direct oversight of
  the legal and government affairs functions.

  
	
   

  	
   

  	
   

  
	
  Base Salary

  	
   

  	
  $650,000 per annum, payable in accordance with
  normal payroll, to be reviewed annually and subject to adjustment in the
  discretion of our Compensation Committee.

  
	
   

  	
   

  	
   

  
	
  Annual Cash Incentives

  	
   

  	
  In respect of the fiscal year ending December 31,
  2007, you will be paid a bonus of not less than $1,500,000, provided, that
  your entitlement to a minimum amount shall be conditioned upon the
  achievement for fiscal year 2007 of the return on equity performance goal set
  forth in Travelers’ Senior Executive Performance Plan. This bonus will be
  paid at the same time as 2007 bonuses are paid to senior executives of
  similar rank. In respect of years following 2007, you will be paid a bonus at
  the discretion of our Compensation Committee comparable to, and paid at the
  same time as, bonuses to senior executives of similar rank. However, assuming
  

  



 



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  acceptable performance by you and Travelers during
  an applicable year, it is anticipated that you will be paid a bonus with a
  range between $1,000,000 and $2,000,000, with a normal expectation of
  $1,500,000. Such range and normal expectation will be reviewed annually when
  base salary is reviewed and subject to adjustment at the discretion of the
  Compensation Committee. You must be actively employed by Travelers at the
  time of payment to receive any bonus described above.

  
	
   

  	
   

  	
   

  
	
  Equity Grants

  	
   

  	
  Beginning in the first quarter of 2008, you will be
  eligible for an equity award in respect of the prior fiscal year with an
  approximate fair value at grant equal to 300% of the annual rate of your
  then-current base salary. The actual multiple of base salary represented by
  each annual equity award may vary from year to year depending upon any
  factors our Compensation Committee deems appropriate. These awards will have
  terms and conditions similar to those applicable to, and granted at the same
  time as, awards of other senior executives of similar rank.

  
	
   

  	
   

  	
   

  
	
  Sign-On Incentive

  	
   

  	
  Upon your commencement date (which shall be your
  actual first day of employment), you will be entitled to: (i) $500,000 in
  cash, payable upon or as soon as practicable after your commencement date,
  (ii) an award of restricted stock units (the “RSUs”) for such number of
  shares of Travelers’ common stock equal to $8,000,000 divided by the closing
  price per share of Travelers’ common stock on your commencement date, (iii)
  an award of a stock option (the “Option”) having an exercise price equal to
  the closing price per share of Travelers’ common stock on your commencement
  date and exercisable for such number of shares of Travelers’ common stock so
  that the fair market value of the Option, calculated with the same
  methodology and assumptions used by Travelers for financial reporting
  purposes (excluding estimate for forfeitures) at the date of such award,
  equals $2,000,000. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The RSUs and the Option will be granted pursuant to
  our 2004 Stock Incentive Plan attached as Exhibit A (the “2004 Plan”), and
  such grants will be evidenced by and subject to the terms and conditions of
  the Notification and Agreements attached as Exhibit B and Exhibit C,
  respectively.

  



 



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  Pension Buyout

  	
   

  	
  In recognition of your forfeiture of certain pension
  benefits, upon your commencement date, you will be entitled to a deferred
  compensation credit of $4,000,000 to a bookkeeping account (the “Deferred
  Compensation Account”) established, and treated as the deferral of an
  Incentive Award, under our Deferred Compensation Plan, attached as Exhibit D,
  and you shall be deemed to have elected a lump sum form of distribution
  thereunder. This deferred compensation credit is in the nature of a sign-on
  incentive and will not be benefit bearing for purposes of Travelers’ employee
  benefit programs.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The deferred compensation credit called for above
  will be added to a separate Deferred Compensation Account and will be subject
  to the terms of the Deferred Compensation Plan, including your right to
  notionally invest such account among the available notional investments;
  provided, however, that if prior to the first anniversary of your
  commencement date, Travelers terminates your employment for Cause, or you
  resign without Good Reason, you will forfeit the balance of such Deferred
  Compensation Account; and provided further that except as set forth in the
  preceding proviso, such Deferred Compensation Account will in no event be
  subject to forfeiture, offset or reduction. The Distribution Event Date under
  the Deferred Compensation Plan for such Deferred Compensation Account shall
  be as specified in Section 2.2(e)(1) of such plan. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  You will otherwise be eligible to participate in the
  Deferred Compensation Plan on the same terms as are applicable to other
  senior executives of Travelers.

  
	
   

  	
   

  	
   

  
	
  Severance/Non-Solicitation

  	
   

  	
  You will be entitled to
  participate in the  St. Paul Travelers
  Companies, Inc. Severance Plan  attached
  as Exhibit E, or any successor or other severance plan in which senior
  executives of similar rank participate.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  In addition, as a condition to
  commencement of your employment, you must execute, and Travelers will
  execute, the Non-Solicitation and Non-Disclosure Agreement attached as
  Exhibit F.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Notwithstanding anything to the
  contrary, including, without limitation, any provisions of the St. Paul
  Travelers Companies, Inc. Severance Plan  attached
  as 

  



 



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  Exhibit E, no benefit under this
  letter (including any accelerated vesting of any equity award) will operate as
  an offset to any severance entitlement.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With respect to the calculation of
  your severance entitlement for any severance-triggering termination, until
  the time you have received two payments under the annual incentive
  compensation plan, (i) for any year in which you have not received an annual
  bonus, you will be treated as having received an annual bonus of $2,000,000,
  and (ii) for any year in which you have received an annual bonus, you will be
  treated as having received an annual bonus equal to the greater of your
  actual bonus or $2,000,000.

  
	
   

  	
   

  	
   

  
	
  Executive Tax and Financial Planning/Executive
  Physical

  	
   

  	
  You will be eligible for executive tax and financial
  planning provided to other senior executives of similar rank. You will also
  be eligible for an annual executive physical as provided to other senior
  executives of similar rank.

  
	
   

  	
   

  	
   

  
	
  Miscellaneous

  	
   

  	
  You will be entitled to four weeks vacation per year.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  You will be eligible for reimbursement of
  professional service expenses incurred in association with negotiating this
  agreement with the Company.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  You will be made whole, on an
  after-tax basis, for any taxes imposed or arising by reason of any imputed
  income attributable to your travel from New York to any of our offices.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If, prior to the time the
  sign-on incentives hereunder have vested in full, there occurs a transaction
  described in Section 280G of the Internal Revenue Code of 1986, as amended
  (the “Code”) or any successor thereto, you will also be made whole, on an
  after-tax basis, for any taxes imposed or arising under Section 4999 of the
  Code or any successor thereto in connection with (A) your involuntary
  termination without Cause, (B) your voluntary termination with Good Reason
  and/or (C) the early vesting or payout of an award hereunder in connection
  with such a transaction and with Board or committee approval of such early
  vesting or payout. Notwithstanding the foregoing, if all taxes under Section 4999 of the
  Code could be eliminated if your payments in the nature of compensation
  contingent upon the

  



 



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  applicable
  transaction (within the meaning of Section 280G of the Code) were reduced by
  no more than 10%, then such payments will be so reduced. Any make-whole
  payment to which you are entitled will be made contemporaneously with the
  withholding of any taxes imposed by Section 4999 of the Code and in any case
  no later than 5 days after the date of your payment of any such taxes.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Except as specifically provided in this letter, you
  will be entitled and subject to all changes in benefits and perquisite plans
  applicable to other senior executives of similar rank.

  
	
   

  	
   

  	
   

  
	
  Good Reason

  	
   

  	
  For purpose hereof, “Good Reason” shall exist if (i)
  there is a reduction in your base salary or a
  reduction in your bonus opportunity below the amounts described above (other
  than proportionate reductions that apply equally to all senior executives of
  similar rank), (ii) there is a diminution in your title, duties, or
  responsibilities, (iii) there is a consequential, involuntary relocation of
  your principal place of business, (iv) Mr. Fishman is no longer Chief
  Executive Officer of Travelers (or its successor) or you report to someone
  other than Mr. Fishman or the Board and/or (v) other events not identified
  above that would constitute Constructive Discharge, as defined in Exhibit F.

  
	
   

  	
   

  	
   

  
	
  Cause

  	
   

  	
  For purposes hereof, “Cause” shall be as defined in
  Exhibit F.

  



 


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If you have any questions at any time, please give me
a call.


	
  Sincerely,

  
	
   

  
	
   

  
	
  /s/ Jay S. Fishman

  	
   

  
	
  Jay S. Fishman

  
	
  Chief Executive Officer

  
	
   

  
	
   

  
	
  Accepted:

  
	
   

  
	
   

  
	
  /s/ Alan D. Schnitzer

  	
   

  
	
  Alan D. Schnitzer

  	
   

  



 



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