Exhibit 10.1


 


SECOND AMENDMENT


TO


THE ST. PAUL TRAVELERS COMPANIES, INC.


SEVERANCE PLAN


(Effective April 1, 2004)


 


The St. Paul Travelers
Companies, Inc. Severance Plan (effective April 1, 2004) is hereby
amended effective September 28, 2005, as follows:


 


I.


 


Section II.7 through
II.17 are renumbered as II.8 through II. 18, and a new Section II.7 is
added to read as follows:


 


II.7          “Specified Employee” means an Employee who is a key
employee, as that term is defined in Internal Revenue Code (“Code”) Section 416(i),
without regard to Code section 416(i)(5). 
An Employee is a Specified Employee for the twelve (12)-month period
beginning April 1 and ending the following March 31 if he/she was a
key employee any time during the twelve (12)-month period ending on the December 31
preceding such April 1.


 


II.


 


Section II.18 (as renumbered above) is amended by
restating the first paragraph thereof to read as follows (the remaining
paragraph is unaltered by this amendment):


 


II.18        “Year of Service” means each of an Employee’s twelve
(12)-month periods of continuous employment with the Company or an Affiliate,
commencing with the Employee’s most recent date of employment with the Company
or an Affiliate (while it is an Affiliate) or with Travelers Property Casualty
Corp. or any subsidiary of Travelers Property Casualty Corp.  An Employee will not receive pro-rated credit
for any partial year worked.


 


III.


 


The first paragraph of Section I of Schedule A
is amended by adding the following to the end:


 


provided,
however, that any Employee who is eligible for Severance
Benefits under Schedule B will receive such benefits in lieu of the
Severance Benefits under this Schedule A.


 


IV.


 


The first paragraph of Section I.A.
of Schedule A is amended to read as follows (in its entirety – that is,
the second sentence of the first paragraph is deleted but the remaining
paragraphs are unaltered by this amendment):


 


The
Employee will be eligible to receive a Severance Benefit in an amount equal to
two (2) weeks of his/her base salary as of the date of termination for
each full Year of Service with a minimum payment equal to four (4) weeks
of base salary and a maximum payment equal to fifty-two (52) weeks of base
salary.


 


V.


 


The first paragraph of Section II of Schedule A
is amended by adding the following to the end:


 


provided,
however, that any Employee who is eligible for Severance
Benefits under Schedule B will receive such benefits in lieu of the
Severance Benefits under this Schedule A.


 





















 


VI.


 


The first paragraph of Section II.A.
of Schedule A is amended to read as follows (in its entirety – that is,
the second clause of the first sentence is deleted but the remaining paragraphs
are unaltered by this amendment):


 


The
Employee will be eligible to receive a Severance Benefit in an amount equal to
two (2) weeks of his/her base salary as of the date of termination for
each full Year of Service with a minimum payment equal to four (4) weeks
of base salary and a maximum payment equal to fifty-two (52) weeks of base
salary.


 


VII.


 


The following new Schedule B is added:


 


Severance Payment Schedule B


 


Executive Severance Policy


 


This Schedule B
applies to Terminations of Employment due to a Reduction in Force (“RIF”) that
occur on or after September 28, 2005 with respect to any Employee who is serving
the Employer in a position of Executive Vice President, Senior Vice President
or Vice President.  In order to be
eligible for the Severance Benefits described below, the Employee must first
execute a Waiver and Release of all claims against the Employer in the form
provided to the Employee by the Employer.


 


For purposes of this Schedule B,
“total monthly cash compensation” equals one twelfth (1/12) of the Employee’s
annual base salary in effect at the time of his/her Termination of Employment
plus one twelfth (1/12) of the average of his/her two most recent cash payments
under the annual incentive compensation plan of the Company.


 


I.              This Section I
of Schedule B applies to Terminations of Employment due to RIF by
Employees who are Executive Vice Presidents.


 


The
Employee will be eligible to receive a Severance Benefit in an amount equal to
the number of months specified in the chart below (determined based on his/her
Years of Service at Termination of Employment) multiplied by his/her total
monthly cash compensation:


 


	
   

  	
   

  	
  Years of Service

  	
   

  
	
   

  	
   

  	
  Less than 5

  	
   

  	
  5 but less than 10

  	
   

  	
  10 or more

  	
   

  
	
  Months of Severance Benefit

  	
   

  	
  18

  	
   

  	
  21

  	
   

  	
  24

  	
   

  



 


The
Severance Benefit will be paid as follows:


 


A.           No amount
will be paid until the first day of the seventh month following the Employee’s
Termination of Employment.


 


B.            On the
first day of the seventh month following the Employee’s Termination of
Employment, or as soon as administratively practicable thereafter, the Employee
will receive a single lump-sum payment equal to one-half of his/her annual base
salary in effect at Termination of Employment.


 


C.            Starting
with the seventh month following the Employee’s Termination of Employment and
continuing for a total of six (6) months, the Employee will receive a
monthly amount (paid in accordance with the Company’s payroll practices) equal
to one twelfth (1/12) of his/her annual base salary in effect at the time of
his/her Termination of Employment.


 





















 


D.           On the
first day of the month following the one year anniversary of the Employee’s
Termination of Employment, or as soon as administratively practicable
thereafter, the Employee will receive a single lump-sum payment equal to
his/her total Severance Benefit calculated above, reduced by the previous
payments made to the Employee under A., B., and C.


 


II.            This Section II
of Schedule B applies to Terminations of Employment due to RIF by
Employees who are Senior Vice Presidents.


 


The
Employee will be eligible to receive a Severance Benefit in an amount equal to
the number of months specified in the chart below (determined based on his/her
Years of Service at Termination of Employment) multiplied by his/her total
monthly cash compensation:


 


	
   

  	
   

  	
  Years of Service

  	
   

  
	
   

  	
   

  	
  Less than 5

  	
   

  	
  5 but less than 10

  	
   

  	
  10 or more

  	
   

  
	
  Months of Severance Benefit

  	
   

  	
  12

  	
   

  	
  15

  	
   

  	
  18

  	
   

  



 


The
Severance Benefit will be paid as follows:


 


A.           No amount
will be paid until the first day of the seventh month following the Employee’s
Termination of Employment.


 


B.            On the
first day of the seventh month following the Employee’s Termination of
Employment, or as soon as administratively practicable thereafter, the Employee
will receive a single lump-sum payment equal to one-half of his/her annual base
salary in effect at Termination of Employment.


 


C.            Starting
with the seventh month following the Employee’s Termination of Employment and
continuing for a total of six (6) months, the Employee will receive a
monthly amount (paid in accordance with the Company’s payroll practices) equal
to one twelfth (1/12) of his/her annual base salary in effect at the time of
his/her Termination of Employment.


 


D.           On the
first day of the month following the one year anniversary of the Employee’s
Termination of Employment, or as soon as administratively practicable
thereafter, the Employee will receive a single lump-sum payment equal to
his/her total Severance Benefit calculated above, reduced by the previous
payments made to the Employee under A., B., and C.


 


III.           This Section III
of Schedule B applies to Terminations of Employment due to RIF by
Employees who are Vice Presidents.


 


The
Employee will be eligible to receive a Severance Benefit in an amount equal to
the number of months specified in the chart below (determined based on his/her
Years of Service at Termination of Employment) multiplied by his/her total
monthly cash compensation:


 


	
   

  	
   

  	
  Years of Service

  	
   

  
	
   

  	
   

  	
  Less than 5

  	
   

  	
  5 but less than 10

  	
   

  	
  10 or more

  	
   

  
	
  Months of Severance Benefit

  	
   

  	
  6

  	
   

  	
  9

  	
   

  	
  12

  	
   

  



 





















 


The
Severance Benefit will be paid as follows:


 


A.           In the
case of an Employee who is not a Specified Employee, such Employee will receive
a monthly amount (paid in accordance with the Company’s payroll practices)
equal to one twelfth (1/12) of his/her annual base salary in effect at the time
of his/her Termination of Employment, with payments commencing as soon as
administratively practicable following the later of (i) the date of the
Employee’s Termination of Employment; or (ii) twenty-five (25) days after
the Employee executes the Waiver and Release in the form provided to the
Employee by the Employer.  Such payments
will continue until the total payments to the Employee equal the full Severance
Benefit calculated above (with the final payment being equal to the full
Severance Benefit minus all prior monthly payments) or until twelve (12)
monthly payments have been made, whichever occurs first.


 


B.            If a
Severance Benefit remains after the monthly payments have been made under A.,
then, on the first day of the month following the last such monthly payment,
the Employee will receive a single lump-sum payment equal to his/her total
Severance Benefit calculated above, reduced by the previous payments to the
Employee made under A.


 


In the
case of an Employee who is a Specified Employee, such Employee’s Severance
Benefit will be paid as follows:


 


A.           No amount
will be paid until the first day of the seventh month following the Employee’s
Termination of Employment.


 


B.            On the
first day of the seventh month following the Employee’s Termination of
Employment, or as soon as administratively practicable thereafter, the Employee
will receive a single lump-sum payment equal to one-half of his/her annual base
salary in effect at Termination of Employment.


 


C.            Starting
with the seventh month following the Employee’s Termination of Employment, the
Employee will receive a monthly amount (paid in accordance with the Company’s
payroll practices) equal to one twelfth (1/12) of his/her annual base salary in
effect at the time of his/her Termination of Employment. Such payments will
continue until the total payments to the Employee made under B. and C. equal
the full Severance Benefit calculated above (with the final payment being equal
to the full Severance Benefit minus all prior payments made under B. or C.) or
until six (6) monthly payments have been paid, whichever occurs first.


 


D.           If a
Severance Benefit remains after the payments have been made under B. and C.,
then, on the first day of the month following the last such monthly payment,
the Employee will receive a single lump-sum payment equal to his/her total
Severance Benefit calculated above, reduced by the previous payments to the
Employee made under B and C.


 


 


	
  Executed this 3rd
  day of November, 2005.

  	
   

  
	
   

  	
   

  
	
   

  	
  THE ST. PAUL
  TRAVELERS COMPANIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John P.
  Clifford, Jr.

  	
   

  
	
   

  	
   

  	
  John P.
  Clifford, Jr.

  
	
   

  	
   

  	
  Senior Vice
  President – Human Resources