Exhibit 10.33


 




	
  Please review this agreement and scroll to
  the bottom to accept or to return to the Equity Compensation Web.

  






 


TRAVELERS

PERFORMANCE SHARE AWARD NOTIFICATION AND AGREEMENT


 


(This award must be accepted by 11:59 p.m. on June 1, 2009,
or it will be forfeited. Refer below to Section 17.)


 


	
   

  	
  Participant:

  	
  Jay S. Fishman

  	
  Grant Date:

  	
  February 3, 2009

  
	
   

  	
  Number of Performance Shares: XXX

  	
   

  	
   

  
	
   

  	
  Performance Period: January 1, 2009 to December 31,
  2011

  	
   

  



 


1.             Grant of Performance Shares. This performance share award is granted
pursuant to The Travelers Companies, Inc. Amended and Restated 2004 Stock
Incentive Plan (the “Plan”), by The Travelers Companies, Inc. (the
“Company”) to you as an employee of the Company or an affiliate of the Company
(together, the “Travelers Group”). The Company hereby grants to the Participant
as of the Grant Date an award (“Award”) for the initial number of Performance
Shares 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 Award are specified in the Plan, this grant notification and
agreement, including Exhibits A, B and C (the “Award Agreement”), and the
prospectus dated February 3, 2009 (titled “Travelers Equity Awards”) and
any applicable prospectus supplement (together, the “Prospectus”). The terms,
conditions and restrictions in the Plan and 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 Award
Agreement to the extent not otherwise set forth herein.


 


By accepting the Award, the
Participant acknowledges receipt of the Prospectus and that he or she has read
and understands the Prospectus.


 


The Participant understands that the 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 cancelled if the
performance conditions are not satisfied. Thus, the 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 the 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 its
Compensation Committee (the “Committee”) 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 the Award unless and until the Award is vested and settled in shares
of Common Stock.


 

















 


3.             Performance Period. For purposes of the Award, the Performance
Period shall be defined as the three-year period commencing January 1,
2009 and ending December 31, 2011, or such shorter period as provided in
the Addendum.


 


4.             Vesting.  The
Award shall vest in full on the last day of the Performance Period, provided
the Participant remains continuously employed within the Travelers Group.  If the Participant has a termination of, or
break in, employment prior to the last day of the Performance Period, the
Participant’s rights are determined under the Award Rules of Exhibit A,
or if applicable, the Addendum.


 


5.             Settlement of Award.  The
number of Performance Shares vested (which shall include any additional
Performance Shares credited to the Participant’s account pursuant to Section 6)
shall be calculated based on the Performance Share Vesting Grid 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 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), except as provided in the
Addendum. 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 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 Share Vesting Grid.


 


7.             Acceptance of Exhibit A
– Award Rules.  The Participant agrees to be bound by the
terms of the Award Rules set forth in Exhibit A (“Award Rules”).


 


8.             Acceptance of Exhibit C
– Principles of Employment Agreement.  The Participant agrees to be
bound by the terms of the Principles of Employment Agreement (including all
later versions thereof which the Participant may agree to at a later time; for
example, as an exhibit to a subsequent equity grant), the current version of
which is attached hereto as Exhibit C (the “POE Agreement”).


 


 9.            Acceptance of
Non-Solicitation Conditions.   The
Participant agrees to be bound by the following conditions (the
“Non-Solicitation Conditions”):


 


(a)           The
Company and the Participant understand, intend and agree that the
Non-Solicitation Conditions of this Section 9 are intended to protect the
Travelers Group against the Participant raiding its employees and/or its
business during the twelve (12) month period (the “Restricted Period”)
following the date of the conclusion of the Participant’s employment with the
Travelers Group (whether voluntary or involuntary) as reflected on the books
and records of the


 

















 


Travelers
Group (the “Termination Date”), while recognizing that after the Termination
Date, the Participant is still permitted to freely compete with the Travelers
Group, except to the extent “Confidential Information” (which means any
technical or business information developed by, for, or at the expense of the
Travelers Group, or assigned or entrusted to the Travelers Group, unless such
information is generally known outside of the Travelers Group) is used in such
solicitation and subject to certain restrictions set forth below. Further, nothing
in this Section 9 is intended to grant or limit any rights or claims as to
any future employer of the Participant.


 


(b)           During the Restricted Period, the Participant
will not seek to recruit or solicit, or assist, participate in or promote the
recruiting or solicitation of, interfere with, attempt to influence or
otherwise affect the employment of any person who was or is employed by the
Travelers Group at any time during the last three months of the Participant’s
employment or during the Restricted Period. Further, the Participant shall not,
on behalf of himself or herself or any other person, hire, employ or engage any
such person. The Participant shall not directly engage in the aforesaid conduct
through a third party for the purpose of colluding to avoid the restrictions in
this Section 9. However, the Non-Solicitation Conditions do not preclude
the Participant 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 Travelers
Group, provided that the Participant does not specifically direct such third
party specifically to target employees of the Travelers Group generally or
specific individual employees of the Travelers Group.


 


(c)           If, after the Termination Date, the
Participant accepts a position as an employee, consultant or contractor with a
direct competitor of the Company, then, during the Restricted Period, the
Participant will not use Confidential Information to seek to recruit or
solicit, or assist, participate in or promote the recruiting or solicitation
of, interference with, attempt to influence or otherwise affect any person or
entity who is a client, customer, policyholder, or agent of the Travelers
Group, to discontinue business with the Travelers Group, and/or move that
business elsewhere.  The Participant also
agrees not to be directly and personally involved in the negotiation,
competition for, solicitation or execution of any individual book roll over(s) or
other book of business transfer arrangements involving the transfer of business
away from Travelers Group, at any time after the Termination Date, even if
Confidential Information is not involved. 
The Participant may, at any time after the Termination Date, direct a
third party (including but not limited to employees of his/her subsequent
employer) to negotiate, compete for, solicit and execute such book roll over(s) or
other book of business transfer arrangements, provided that (i) Confidential
Information is not involved, (ii) the Participant is not personally and
directly involved in such activities, and (iii) the Participant does not
direct such third party specifically to target agents of Travelers Group.


 


(d)           Subject to the non-competition obligations in
the Award Rules that apply to Participants meeting the “Retirement Rule,”
at any time after the Termination Date, the Participant may otherwise freely
compete with the Travelers Group, including but not limited to competing on an
account by account or deal by deal basis, to the extent that he or she does not
violate the provisions of subsection (c) above.


 


10.          Forfeiture
of Performance Share Award.


 


(a)           Participant
acknowledges and agrees as follows:


 


(i)            The
Participant acknowledges that the receipt of the Award constitutes good,
valuable and independent consideration for the Participant’s acceptance of and
compliance with the provisions of the Award Agreement, including the forfeiture
and recapture provision below, the Non-Solicitation Conditions and the POE
Agreement.


 

















 


(ii)           To the extent that the terms of the POE Agreement attached
hereto as Exhibit C differ from the terms of any prior POE Agreement (or
similar agreement) that the Participant has agreed to in connection with any prior
equity grant by the Company, the Participant understands that his or her
acceptance of the Award will result in the terms of the POE Agreement attached
hereto as Exhibit C applying under his or her prior equity grant(s) as
well as the current Award.


 


(b)           The Participant agrees that, during the term of his or her
employment with the Travelers Group and during the Restricted Period, if the
Participant breaches the Non-Solicitation Conditions and/or the POE Agreement,
in addition to all rights and remedies available to the Company at law and in
equity (including without limitation those set forth in the Award Rules for
involuntary termination), the Participant will immediately forfeit any award
issued pursuant to this Award Agreement  that has not yet been paid,
exercised or vested.  The
Company may also recapture from the Participant any and all compensatory value
that the Participant received for the last twelve (12) months of his or her
employment and through the end of the Restricted Period from any such award
(including without limitation the amount of any cash payment made to the
Participant upon exercise or settlement of the award, and/or the amount
included as compensation in the taxable income of the Participant upon vesting
or exercise of the award). The Participant will promptly pay the full amount
due upon demand by the Company, in the form of cash or shares of Common Stock
at current fair market value.


 


(c)           The forfeiture and recapture remedies under
paragraph (b) shall not limit or modify the Company’s rights and remedies
with respect to any breaches of the Award Agreement at any time after the end
of the Restricted Period.


 


(d)           The Award Rules provide a right to
payment, subject to certain conditions, following the Participant’s Termination
Date if the Participant meets the Retirement Rule which, among other
conditions, requires that the Participant not engage in any activities that
complete with the business operations of the Travelers Group through the
settlement date of the Award (such non-compete condition may extend beyond the
Restricted Period).  The remedies for a
violation of such non-compete conditions are specified in the Award Rules and
are in addition to any remedies of the Travelers Group under this Section 10.


 


11.          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 agreements, forms and
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 the Participant has access.


 


12.          Administration. In administering the Plan, or to comply with
applicable legal, regulatory, tax, or accounting requirements, it may be
necessary for a member of the Travelers Group to transfer certain Participant
data to another member of the Travelers Group, or to its 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.


 


13.          Entire
Agreement/Amendment/Survival/Assignment. The terms, conditions and restrictions set forth in the Plan, this
Award Agreement, the Prospectus, and POE Agreement in effect from time to time,
as later agreed to by the Participant, and other Company policies in effect
from time to time relating to the Plan, 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.  This Award Agreement may be amended by a
subsequent writing (including e-mail or electronic form) agreed to between the
Company and the Participant.  Section headings
herein are for convenience only and have no effect on the interpretation of
this Award Agreement.  The provisions of
the Award Agreement that are intended to survive the Termination Date of a
Participant shall survive such date.  The
Company may assign this Award Agreement and its rights and obligations hereunder
to any current or future member of the Travelers Group.


 


14.          No
Right to Employment.  The Participant agrees that nothing in this
Award Agreement constitutes a contract of employment with the Company for a
definite period of time.  The employment
relationship is “at will,” which affords the Participant or the Travelers Group
the right to terminate the relationship at any time for any reason or no reason
not otherwise prohibited by applicable law. 
The Travelers Group retains the right to decrease the Participant’s
compensation and/or benefits, transfer or demote the Participant or otherwise
change the terms or conditions of the Participant’s employment with the
Travelers Group.


 


15.          Transfer
Restrictions. The
Participant may not sell, assign, transfer, pledge, encumber or otherwise
alienate, hypothecate or dispose of the Award or his or her right hereunder to
receive any Performance Shares, except as otherwise provided in the Prospectus.


 


16.          Conflict.  In
the event of a conflict between the Plan, the Award Agreement and/or the
Prospectus, the documents shall control in that order (that is, the Plan, the
Award Agreement and the Prospectus).


 


17.          Acceptance
and Agreement by the Participant; Forfeiture upon Failure to Accept.  By
clicking the button after the text of Exhibit C, the Participant accepts
the Award and agrees to be bound by the terms, conditions, and restrictions set
forth in the Award Agreement. The Participant’s rights under the Award will
lapse at 12:00 a.m. on June 2, 2009, and the Award will be forfeited
on such date if the Participant does not accept the Award by clicking the
button on or before 11:59 p.m. on June 1, 2009.  For the avoidance of doubt, the Participant’s
failure to accept the Award Agreement shall not affect his or her continuing
obligations under any other agreement between the Company and the Participant.


 


EXHIBIT
A—Award Rules


To
Travelers’ Performance Share Award Notification and Agreement


 


When you
leave the Company


 


References
to “you” or “your” are to the Participant. 
“Termination Date” is defined in Section 9(a) of the Award
Agreement and means the date of the conclusion of your employment with the
Travelers Group (whether voluntary or involuntary) as reflected on the books
and records of the Travelers Group.


 


If
you terminate your employment or if there is a break in your employment, your
Award may be cancelled before the end of the Performance Period and the vesting
and settlement of your Award may be affected.


 


The
provisions in the chart below apply to Awards granted under the Plan. Special rules apply
for vesting and settlement of your Award in cases of termination of employment
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 (but 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 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 from the
  first day of the Performance Period to the Termination Date, divided by the
  total number of days in the Performance Period. Any such shares will be
  received 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 termination of employment
  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 on such leave of
  absence.

  
	
   

  	
   

  	
   

  
	
  Die while employed or following employment while
  your Award is outstanding

  	
   

  	
  Your estate will be entitled to receive a number of shares of Common
  Stock equal to the initial number of Performance Shares set forth at the
  beginning of the Award, plus any Performance Shares credited as dividend
  equivalents in connection with the dividends paid or payable as of the date
  of your death), multiplied by a fraction equal to the number of days in the
  Performance Period from the first day of the Performance Period to your date
  of death, divided by the total number of days in the Performance Period. Any
  such shares will be delivered as soon as administratively possible following
  your death. No Performance Shares shall be credited with respect to any cash
  dividends paid by the Company after the date of the Participant’s death but
  prior to the distribution with respect to Performance Shares already credited
  to the Participant’s account.

  
	
   

  	
   

  	
   

  
	
  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.

  



 






*            The
Committee, in its sole discretion, determines what constitutes “gross
misconduct” and “cause.”


 

















 


	
  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.

  
	
   

  	
   

  	
   

  
	
  While employed and at any time during the Restricted
  Period, breach the Non-Solicitation Conditions and/or the POE Agreement

  	
   

  	
  As set forth in Section 10 of the Award Agreement, in addition
  to all rights and remedies available to the Company at law and in equity
  (including the above rights and remedies relating to involuntary
  termination), you will immediately forfeit any award to you under the Award
  Agreement that has not yet been paid, exercised or vested. The Company may
  also recapture from you any and all compensatory value that you received for
  the last 12 months of your employment and through the end of the Restricted
  Period from any such award (including the amount of any cash payment made to
  you upon settlement of the Award, and/or the amount included as compensation
  in your taxable income upon settlement of the Award). You will promptly pay
  the full amount due upon demand, in the form of cash or shares of Common
  Stock at current fair market value.

  



 


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 are terminated under the Company’s applicable separation pay plan or 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.


 

















 


	
  If you:

  	
   

  	
   

  
	
  Meet the Retirement Rule

  	
   

  	
  You will be entitled to receive 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 from the first day of
  the Performance Period to the Termination Date, divided by the total number
  of days in the Performance Period. Any such shares will be received at the
  time of settlement of the Performance Shares after the end of the Performance
  Period. You will have a right to payment under the Retirement
  Rule provided that, prior to the time of settlement, you do not engage
  in any activities that compete with the business operations of the Travelers
  Group, including, but not limited to, working for another insurance company
  engaged in the property casualty insurance business as either an employee or
  independent contractor. You are not subject to this competition provision if
  you are terminated involuntarily, but you remain subject to Sections 9 and 10
  of the Award Agreement, and the POE Agreement.

  



 


When
called for under the above rules, as a condition to receiving payment, you will
be required to certify to the Company that you have not engaged in any
activities that compete with the business operations of the Travelers Group
since your Termination Date, and provide such other evidence of your compliance
with the Retirement Rule as the Company may require.


 


EXHIBIT
B—Performance Share Vesting Grid


To
Travelers’ Performance Share Award Notification and Agreement


 


	
  Performance Period ROE*

  	
   

  	
  % of Performance Shares Vested

  
	
   

  	
   

  	
   

  
	
  > 16.0

  	
  %

  	
   

  	
  160

  	
  %

  	
  (Maximum)

  
	
  15.5

  	
   

  	
   

  	
  150

  	
   

  	
   

  
	
  15.0

  	
   

  	
   

  	
  140

  	
   

  	
   

  
	
  14.5

  	
   

  	
   

  	
  130

  	
   

  	
   

  
	
  14.0

  	
   

  	
   

  	
  120

  	
   

  	
   

  
	
  13.0

  	
   

  	
   

  	
  110

  	
   

  	
   

  
	
  12.0

  	
   

  	
   

  	
  100

  	
   

  	
   

  
	
  10.0

  	
   

  	
   

  	
  75

  	
   

  	
   

  
	
  8.0

  	
   

  	
   

  	
  50

  	
   

  	
  (Threshold)

  
	
  < 8.0

  	
   

  	
   

  	
  0

  	
   

  	
   

  



 






*
For any Performance Period ROE (as defined below) that is at least 8.0%, but
falls between two Performance Period ROE performance levels, the percentage of
Performance Shares vested shall be interpolated (for example, if Performance
Period ROE is 13.5%, 115% of the Performance Shares would be vested).


 


Definitions:


 


“Performance Period ROE” is defined as the sum of the Adjusted ROE
for each of the three years in the Performance Period, divided by three.


 


“Adjusted ROE” is defined as Adjusted Operating Income
divided by Adjusted Shareholders’ Equity.


 














 


“Adjusted Operating
Income”  for each year
in the Performance Period is defined as the Company’s net income from
continuing operations as reported in the Company’s financial statements
(including accompanying footnotes and management’s discussion and analysis),
adjusted as set forth in the immediately following sentence.  In calculating Adjusted Operating Income, net
income from continuing operations shall be adjusted as follows: first (A) remove
the after-tax effects of the following items: (i) losses (net of
reinsurance) from catastrophes (as designated by the Insurance Service Office’s
Property Claims Service Group, the Lloyd’s Claim Office, Swiss Reinsurance
Company’s sigma report, or a comparable report or organization generally
recognized by the insurance industry, and reported by the Company as a
catastrophe); asbestos and environmental reserve charges (or releases); net
realized investment gains or losses in the fixed maturities and real estate
portfolios; and (ii) extraordinary items, the cumulative effect of
accounting changes and federal income tax rate changes, and restructuring
charges, each as defined by generally accepted accounting principles in the
United States, and each as reported in the Company’s financial statements
(including accompanying footnotes and management’s discussion and analysis);
and (B) reduced, as to the first year in the Performance Period (2009), by
$360.0 million, as to the second year in the Performance Period (2010), by
$360.0 million times the ratio of:  the
Company’s 2010 consolidated personal lines homeowners net written premium plus
commercial lines property net written premium plus 50% of commercial lines
multi peril net written premium divided by the Company’s 2009 consolidated
personal lines homeowners net written premium plus commercial lines property
net written premium plus 50% of commercial lines multi peril net written
premium, and as to the third year in the Performance Period (2011), by $360.0
million times the ratio of:  the Company’s
2011 consolidated personal lines homeowners net written premium plus commercial
lines property net written premium plus 50% of commercial lines multi peril net
written premium divided by the Company’s 2009 consolidated personal lines
homeowners net written premium plus commercial lines property net written
premium plus 50% of commercial lines multi peril net written premium.


 


“Adjusted Shareholders’ Equity” for each year in the Performance Period is
defined as the sum of the Company’s total common stockholders’ equity as
reported in the Company’s balance sheet as of the beginning and end of the year
(excluding net unrealized appreciation or depreciation of investments and
adjusted as set forth in the immediately following sentence), divided by two.
In calculating Adjusted Shareholders’ Equity, the Company’s total common
shareholders’ equity as of the beginning and end of the year shall be adjusted
to remove the cumulative after-tax impact of the following items during the
Performance Period: (i) discontinued operations and (ii) the
adjustments and reductions made in calculating Adjusted Operating Income.


 

















 


EXHIBIT C —


To
Travelers’ Performance Share Award Notification and Agreement


 


PRINCIPLES OF EMPLOYMENT AGREEMENT


 


As a condition
and in consideration of your employment with The Travelers Companies, Inc.
or one of its subsidiaries, affiliates, successors or assigns (together, the “Company”
or “Travelers”), the Company wishes to set forth and obtain your agreement on
certain matters that are important to both of us.


 


Your acceptance
of this Principles of Employment Agreement (the “POE Agreement”), if you have
not already accepted its provisions in their current form pursuant to a prior
Company option agreement or employment agreement or policy, constitutes your
acknowledgment and acceptance of and agreement to the provisions set forth
below and the Travelers’ (i) Employee Policies [LINK], (ii) Internal
Dispute Resolution Policy (“IDR Policy”) [LINK] and (iii) Employment
Arbitration Policy (the “Arbitration Policy”) [LINK], each of which the Company
may amend or supplement from time to time.


 


You may print and retain a hard copy of the Employee Policies, the IDR
Policy and the Arbitration Policy at any time.  
Please review this POE Agreement and these other documents carefully.  If you have any questions about them at any
time, please ask your manager.


 


Arbitration/Dispute
Policies


 


1.  While the Company hopes that disputes with
its employees will never arise, the Company wants them resolved promptly if
they do.  The IDR and Arbitration Policy
(together, the “Arbitration Policies”) cover any employment and
compensation-related disputes that you may have with the Company and its
current and former officers, directors, employees and agents, including
disputes regarding termination of employment, but excluding certain specific
claims described in these policies.  The
Arbitration Policies do not preclude the Company from taking disciplinary
action against you (including termination) at any time, but if you dispute such
action, you and the Company agree that the disagreement will be resolved solely
through the processes set forth in the Arbitration Policies.


 


2.  For claims covered by the Arbitration
Policies, the process is divided into two parts.  First, under the IDR, you may seek internal
review of any action regarding your employment or termination of your
employment that you think is unfair. 
Second, in the unusual situation when this internal process does not
fully resolve an employment-related dispute and the dispute is based upon legally
protected rights, you and the Company agree to submit the dispute to binding
arbitration in accordance with the Arbitration Policy.


 

















 


3.  As set forth in the Arbitration Policies, you
acknowledge and agree that any breach or threatened breach of the Intellectual
Property and Confidentiality provisions set forth below will constitute a
violation of your covenants and obligations to the Company with respect to
intellectual property and/or confidentiality/non-disclosure and, therefore, the
Company has the right (but not the obligation) to bring a court action, rather
than arbitration, to seek injunctive relief or specific performance.  You and the Company agree that any such
action will be brought solely in the state or federal courts located in St.
Paul, Minnesota, and you submit to the exclusive jurisdiction of these courts
and agree not to challenge such venue. 
You agree that this POE Agreement shall be construed in accordance with
and governed for all purposes by the laws of the State of Minnesota.


 


Intellectual
Property and Confidentiality


 


4.  You
agree that you will not, either during or after your employment, use, publish,
make available, or otherwise disclose, except for the Company’s benefit in the
course of such employment, any technical or business information developed by,
for, or at the expense of the Company, or assigned or entrusted to the Company,
unless such information is generally known outside of the Company. In addition,
you will keep at all times subject to the Company’s control and will deliver to
or leave with the Company all written and other materials in any form or medium
(including, but not limited to, print, tape, digital, computerized and
electronic data, parts, tools, or equipment) containing such information upon
termination of your employment.  You also
agree to cooperate to remedy any unauthorized use of such information and not
to violate any Company policy regarding same.


 


5.  You
agree that all records, reports, notes, compilations, or other recorded matter,
and copies or reproductions thereof, relating to the Company’s operations,
activities or business, made or received by you during your employment with the
Company are, and shall be, the property of the Company exclusively, and you
will keep the same at all times subject to the Company’s control and will
deliver to or leave with the Company the same at the termination of your
employment.


 


6.  You
agree that all trade secrets, inventions, works of authorship (including,
without limitation, illustrations, writings, multimedia works, software and
computer programs), improvements, systems, apparatuses, designs, practices,
processes, analytical models, ways of doing business, formulae and all other
business or technical information (collectively, “Inventions”) created, conceived,
or reduced to practice, by you, either alone or with others, while employed by
the Company and related to the existing or anticipated business, research, or
development of the Company, or resulting from your work with the Company,
belong solely to the Company, including all intellectual property rights
therein.


 

















 


7.  You
are hereby notified that the assignment and ownership provisions herein do not
apply to any Inventions: (i) that you create, conceive or reduce to
practice entirely on your own time, without using the Company’s equipment,
supplies, facilities or trade secret information, and that do not (a) relate
directly at the time of such creation, conception, or reduction to practice to
the Company’s business or actual or demonstrably anticipated research or
development or (b) result from any work you perform for the Company;
and/or (ii) for which such provisions would be unenforceable under any
state statute.


 


8.  You
agree to: (i) promptly disclose to the Company all Inventions that belong to
the Company under this POE Agreement; (ii) cooperate with the Company regarding
the filing and prosecution of any patent applications relating to such
Inventions; (iii) assign, and you hereby assign, to the Company, or to others
as directed by the Company, all of your interest (if any) in such Inventions
and all intellectual property rights therein; and (iv) execute any papers and
do any acts which the Company may consider necessary to secure to it and
perfect any and all rights relating to such Inventions, including all patents
and copyrights (and renewals thereof) in any country (without charge to the
Company, but at the expense of the Company). You hereby waive all “moral rights”
and the like with respect to all such works of authorship to the extent allowed
by applicable law. Until proven otherwise, any Invention shall be presumed to
have been conceived during your employment with the Company if within three (3)
months after termination of such employment with the Company it is disclosed to
others, or it is completed, or it has a patent application filed thereon.


 


9.  You
represent that you have provided to the Company a complete list of all
Inventions (if any) that you have made or conceived prior to your employment by
the Company that (i) relate to the business, research or development of
the Company and (ii) are owned or controlled by you personally.  You further represent that you are not a
party to any other agreement that conflicts with your obligations under this
POE Agreement.


 


Miscellaneous


 


10.  You agree that you have accepted this POE
Agreement in the belief that its provisions are reasonable and
enforceable.  However, if any one or more
of the provisions contained in this POE Agreement shall be held to be invalid
or unenforceable, then such provisions shall be deemed to be modified or
restricted to the minimum extent necessary to render them valid and
enforceable, and this POE Agreement will be construed and enforced to the
maximum extent permitted by law.


 

















 


11.  You agree that nothing herein constitutes a
contract of employment for a definite period of time.  The employment relationship is “at will,”
which affords you or the Company the right to terminate the relationship at any
time for any reason or no reason not otherwise prohibited by applicable
law.  The Company retains the right to
decrease your compensation and/or benefits, transfer or demote or otherwise
change the terms or conditions of your employment with the Company.


 


12.  You agree that your obligations under this
POE Agreement shall survive the termination of your employment with the Company
regardless of the reason.


 


THE
TRAVELERS COMPANIES, INC.


 


THE
PARTICIPANT’S ACCEPTANCE


 


(Click on
the button below to accept the terms of this Award Agreement, including
Exhibits thereto. You will not be able to undo this change.)


 


o            Agree/Accept


 


(Click on
the button below to return to ECW and accept the terms of this Award Agreement
at another time.)


 


o            Return to Equity Compensation Web


 

















 


ADDENDUM TO AWARD AGREEMENT


— Special Rules Applicable
to Jay S. Fishman


 


The special rules set forth in this Addendum
will modify, and form part of, the Award Agreement for Jay S. Fishman (the “Participant”)
for his Performance Share Award granted February 3, 2009.  Reference is made in this Addendum to the letter
agreement between the Company and the Participant dated December 19, 2008,
governing certain terms and conditions of the Participant’s employment with the
Company (the “Letter Agreement”).


 


The special rules set forth in the Addendum
will apply if the Participant’s Termination Date occurs at any time during the
period starting January 1, 2009 and ending December 31, 2011 due to
his death, his Disability (as defined in the Letter Agreement), action by the
Company without Cause (as defined in the Letter Agreement), or action by him
for Good Reason (as defined in the Letter Agreement) (each, a “Good Leave
Termination”).


 


1.             Performance Period and
Performance Period ROE.


 


In the event of a Good Leave Termination, the
Performance Period under the Award Agreement shall be as follows:


 


(a)                                  If the Good Leave Termination occurs before January 1,
2011, the Performance Period shall be the one-year period starting January 1,
2009 and ending December 31, 2009.


 


(b)                                 If the Good Leave Termination occurs during
the year commencing January 1, 2011 and ending December 31, 2011, the
Performance Period shall be the two-year period starting January 1, 2009
and ending December 31, 2010.


 


To determine the Participant’s percentage under the
Performance Share Vesting Grid set forth in Exhibit B, the “Performance
Period ROE” shall be the sum of the Adjusted ROE for each of the years in the
Performance Period, divided by the number of years in the Performance Period.


 


2.             Settlement of Award.


 


In the event of a Good Leave Termination, the number
of Performance Shares (including Performance Shares granted in this Award, plus
any additional Performance Shares credited as dividend equivalents under Section
6 of the Award Agreement) vesting pursuant to the Performance Share Vesting
Grid set forth in Exhibit B shall be delivered to Participant as soon as administratively
practicable (but no later than 20 days) following the later of (a) certification
of the performance results after the end of the Performance Period (which
certification shall occur between January 1 and March 15 of the year
following the end of the Performance Period, as determined in 1. of this
Addendum), or (b) the first day of the seventh (7th) month following his separation from service (as defined in the Letter
Agreement) (or, if the Participant’s Termination Date occurs due to his death,
as soon as administratively practicable (but no later than 20 days) following
his Termination Date).


 


The Participant shall remain subject to the
Non-Solicitation Conditions and the Principals of Employment Agreement that
form part of the Award Agreement (including the forfeiture provisions in Section 10
of the Award Agreement).  However, if the
Good Leave Termination otherwise falls under the “Retirement Rule” set forth in
Exhibit A, the Participant shall not be subject to the non-compete
requirements otherwise attendant to the Retirement Rule.  Notwithstanding any contrary provision of
this Award Agreement (including the Award Rules of Exhibit A), the
number of Performance Shares due to the Participant shall not be prorated in
the event of a Good Leave Termination.


 

















 


3.             Minimum Number of Shares in Event
of Death or Disability.


 


In the event of a Good Leave Termination due
to the Participant’s death or Disability (as defined in the Letter Agreement),
the number of Performance Shares vested shall not be less than one hundred
percent (100%) of the number of Performance Shares granted in this Award, plus
any additional Performance Shares credited as dividend equivalents under Section 6
of the Award Agreement.