Exhibit 10(c)


 


November 5, 2001


 


Mr. Timothy Yessman


29 Fern Ridge Road


West Hartford, CT 06107


 


Dear Tim:


 


It is my pleasure to provide
you with this letter to confirm our offer for the position of Executive Vice
President - Claim reporting directly to me. I am very excited about the
future of The St. Paul, and your leadership and experience will be invaluable
in building a successful company.


 


Your total compensation package
will consist of the following (effective on the first day of employment:


 


	
  Base Salary

  	
   

  	
  $400,000.00
  per annum

  
	
   

  	
   

  	
   

  
	
  Annual
  Incentives

  	
   

  	
  You will be
  paid guaranteed bonuses of (i) $185,000 in February 2002 and (ii) $400,000 in
  February of 2003.  For subsequent
  years commencing in 2004, the current annual target opportunity for this
  position is 45% of base salary under current guidelines.  Annual payouts, measured on The St. Paul’s
  corporate performance, business unit results, and your individual
  performance, generally range from 0 to 150 percent of the target amount.

  
	
   

  	
   

  	
   

  
	
  Hiring Bonus

  	
   

  	
  You will be
  awarded 20,000 shares of restricted stock of The St. Paul Companies
  (effective on your first day of employment). This stock will vest pro rata
  over three years commencing on the first anniversary of the award date. This
  grant is intended as a “make whole” payment for unvested restricted stock and
  unvested “in the money” stock options which you would have received from your
  current employer. You will be responsible for all applicable taxes upon the
  vesting of the restricted stock.

  
	
   

  	
   

  	
   

  
	
  Initial
  Stock Option

  	
   

  	
  In
  recognition of joining The St. Paul you will receive a Award grant of
  200,000 stock options. The grants will be non­ qualified stock options, will
  have a grant price equal to the closing price of The St. Paul Companies
  common stock on the date of your employment, and have a ten-year expiration
  period and four-year pro-rata (i.e., 50,000 options per year) vesting
  provision. You will be responsible for all applicable taxes.

  
	
   

  	
   

  	
   

  
	
  Stock
  Options

  	
   

  	
  Effective in
  2003, you will also be eligible for an annual stock option grant each year of
  your employment with The St. Paul. Your target option grant under current
  guidelines is 48,000 shares (subject to any future change in targeted annual
  option grants applicable generally to other senior executives of similar
  rank). These options will be similar in terms and conditions to the options
  you receive as part of your initial stock option award.

  
	
   

  	
   

  	
   

  
	
  Executive
  Tax and

  Financial Planning

  	
   

  	
  You will be
  eligible for a first year allowance of $15,000 and an annual allowance of
  $11,000 thereafter in tax and financial planning services.

  
	
   

  	
   

  	
   

  
	
  Executive
  Savings Plus

  	
   

  	
  You will be
  eligible for a non-qualified deferred compensation plan that allows
  executives to save money on a tax deferred basis above IRS imposed limits for
  401(k) plans.

  
	
   

  	
   

  	
   

  
	
  Change in
  Control

  	
   

  	
  As a key
  employee you will be eligible as a Tier One participant in the Amended and
  Restated Special Severance Policy which provides a lump-sum separation
  payment equal to three times the sum of your base salary and target annual
  incentive if your employment is terminated without cause or for “good reason”
  in a two year period following a change in control. A copy of the plan is
  enclosed herewith.

  



 

















 


	
  Senior
  Executive

  	
   

  	
  As a senior
  executive, you will be entitled to the protection Severance Plan of
  the Senior Executive Severance Policy (a copy of which is enclosed herewith).
  If you are terminated without cause or voluntarily terminate your employment
  for “good reason” before February 4, 2004, you will be eligible for a lump
  sum equal to twice the sum of your base salary and target bonus immediately
  following your termination, and continuation of coverage under medical and
  dental plans for two years. All stock option and restricted stock awards
  granted more than one year before termination will vest. Stock options will
  be eligible for exercise for up to three years from termination.  In the event you are terminated (either
  without cause or for “good reason”) within the first year of your employment,
  your initial stock option grant of 200,000 options shall be replaced with a
  cash equivalent, equal to the difference between the original option price
  and the market value of shares on any business day on which you give notice
  to St. Paul, over the course of the three years following such termination of
  employment, and your initial restricted stock grant of 20,000 shares shall be
  settled by a cash equivalent payment.

  
	
   

  	
   

  	
   

  
	
  Miscellaneous

  	
   

  	
  In addition
  to the foregoing, you will be eligible to all changes in compensation
  structure (i.e., annual incentive targets), benefits and perquisites which
  are applicable to other senior executives of similar rank.

  



 


If you have questions at any
time, please give me a call at 651-310-5656.


 


Sincerely,


 


 


	
  Jay S.
  Fishman

  	
   

  
	
  Jay S.
  Fishman

  
	
  Chairman and
  CEO

  



 


Accepted:


 


	
  Timothy
  Yessman

  	
   

  
	
  Timothy
  Yessman

  
	
   

  
	
  Date:
  November 5, 2001

  



 


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