Document:

Exhibit 10.15

TRAVELERS

STOCK OPTION GRANT NOTIFICATION AND AGREEMENT

 

(This grant must be accepted
by          . on             ,
or it will be forfeited. Refer below to Section 11.)

 

	
  Participant:

  	
   

  	
   

  	
  Grant Date:

  	
   

  	
   

  
	
  Number of Shares:

  	
   

  	
   

  	
  Grant Price:

  	
   

  	
   

  
	
  Expiration Date:

  	
   

  	
   

  	
  Vesting Date:

  	
   

  	
   

  

 

1. Grant
of Option. This
option is granted pursuant to The Travelers 2004 Stock Incentive Plan (the “Plan”),
by The Travelers Companies, Inc. (the “Company”) to you, an employee of
the Company or a subsidiary of the Company (the “Participant”). The Company
hereby grants to the Participant a non-qualified stock option (the “Option”) to
purchase the number of shares set forth above of the Company’s common stock, no
par value (“Common Stock”), at an option price per share (the “Grant Price”)
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 Option are specified
in this grant notification and agreement, the Plan, the prospectus dated February 5,
2008 (titled “Travelers Equity Awards”), and any applicable prospectus
supplement, (together, the “Prospectus”). The terms, conditions and
restrictions in the Prospectus include, but are not limited to, provisions
relating to amendment, vesting, cancellation, and exercise, all of which are
hereby incorporated by reference into this grant notification and agreement to
the extent not otherwise set forth herein. The terms, conditions and
restrictions in this grant notification and agreement, the Prospectus, and the
Plan constitute the Option agreement between the Participant and the Company (“Agreement”).
By accepting this Option, the Participant acknowledges receipt of the
Prospectus and that he or she has read and understands the Prospectus.

 

The Participant
understands that this Option 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 Option is
contingent, and depends on the future market price of the Company’s common
stock, among other factors. The Participant further
confirms his or her understanding that the Option is intended to promote
employee retention and stock ownership and to align employees’ interests with
those of shareholders, is subject to vesting conditions and will be cancelled
if vesting conditions are not satisfied. Thus, Participant understands that (a) any
monetary value assigned to the Option 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 this Option 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) vesting may be subject to confirmation and final determination
by the Company’s Board of Directors or a Committee of the Board that conditions
to vesting have been satisfied. The Participant shall have no rights as a
stockholder of the Company with respect to any shares covered by this Option
unless and until the Option vests, is properly
exercised and shares of Company common stock are issued.

 

 

3.
Vesting. The
Option shall vest in full and become exercisable on the Vesting Date set forth
above. The Option will expire on the tenth (10th) anniversary of the Grant Date
set forth above, provided the Participant remains continuously employed by the
Company or one of its subsidiaries.  (For
the terms and conditions under which an Option will remain exercisable for a
certain period, if at all, after a termination of or break in employment, see Section 4
and Section 5.)

 

4. Exercise of Option.
The Option may be exercised in whole or in part by the Participant on or after
the Vesting Date upon notice to the Company together with provision for payment
of the Grant Price and applicable withholding taxes. Such notice shall be given
in the manner prescribed by the Company and shall specify the date and method
of exercise and the number of shares being exercised. The Participant
acknowledges that the laws of the country in which the Participant is working
at the time of grant or exercise of the Option (including any rules or
regulations governing securities, foreign exchange, tax, or labor matters) or
Company accounting or other policies dictated by such country’s political or regulatory
climate, may restrict or prohibit any one or more of the stock option exercise
methods described in the Prospectus, that such restrictions may apply
differently if the Participant is a resident or expatriate employee, and that
such restrictions are subject to change at any time.  The Committee may suspend the right to
exercise the Option during any period for which (a) there is no
registration statement under the Securities Act of 1933, as amended, in effect
with respect to the shares of Company common stock issuable upon exercise of
the Option, or (b) the Committee determines, in its sole discretion, that
such suspension would be necessary or advisable in order to comply with the
requirements of (i) any applicable federal securities law or rule or regulation
thereunder; (ii) any rule of the New York Stock Exchange or other
self-regulatory organization; or (iii) any other federal or state law or
regulation (an “Option Exercise Suspension”).

 

5.
Termination of, and Breaks in, Employment. The terms and conditions set forth on Exhibit A
hereto shall apply with respect to terminations of, and breaks in, employment.

 

6.
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 forms or 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 Participant has access.

 

7.
Administration.
In administering the Plan, or to comply with applicable legal, regulatory, tax,
or accounting requirements, it may be necessary for the Company or the
subsidiary employing the Participant to transfer certain Participant data to
the Company, its subsidiaries, outside service providers, or governmental
agencies. By accepting the Option, 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.

 

8.
Entire Agreement; No Right to Employment. The Agreement constitutes the entire understanding
between the parties hereto regarding the Option and supersedes all previous
written, oral, or implied understandings between the parties hereto about the
subject matter hereof. Nothing contained herein, in the Plan, or in the
Prospectus shall confer upon the Participant any rights to continued employment
or employment in any particular position, at any specific rate of compensation,
or for any particular period of time.

 

 

9.
Dispute and Claims Resolution; Conflict. Any disputes, claims and counterclaims under this
Agreement shall be resolved in accordance with any internal dispute resolution
policy of the Company in effect from time to time, including any arbitration
provisions thereof.  In the event of a
conflict between the Plan and this grant notification and agreement, or the
terms, conditions, and restrictions of the Option as specified in the
Prospectus, the Plan shall control.

 

10.
Non-Solicitation and Non-Disclosure Agreement. The Participant agrees to be bound by the terms of
the Non-Solicitation and Non-Disclosure Agreement attached hereto as Exhibit B,
which provides for the consequences set forth therein in the event the
Participant breaches the non-solicitation and non-disclosure covenants
contained therein, as more fully described in Exhibit B.

 

11.
Acceptance and Agreement by Participant; Forfeiture upon Failure to Accept. By clicking the button below,
Participant accepts the Option and agrees to be bound by the terms, conditions,
and restrictions set forth in the Prospectus, the Plan, this notification and
agreement, the Non-Solicitation and Non-Disclosure Agreement, and the Company’s
policies, as in effect from time to time, relating to the Plan. The Participant’s
rights under the Option will lapse at 12:00 a.m. on June 3, 2008, and
the Option will be forfeited on such date if the Participant does not accept
the Option by clicking the button below on or before 11:59 p.m. on June 2,
2008.

 

 

EXHIBIT A

 

To Travelers Stock Option Grant
Notification and Agreement

 

When you leave the
Company

 

References to “you” or “your”
are to the Participant.  “Termination
date” refers to the date of termination of your employment as reflected on the
books and records of the Company.

 

If you terminate your
employment or if there’s a break in your employment, your Option may be cancelled
before the end of the vesting period and the vesting and exercisability of your
Option may be affected.

 

The provisions in the
chart below apply to Options granted under the Plan.  Special rules apply for vesting and
exercisability in cases of termination if you satisfy certain age and years of
service requirements (“Retirement Rule”), as set forth in “Retirement Rule”
below.

 

If any Option
exercisability period set forth in the chart below or under “Retirement Rule”
below would otherwise expire during an Option Exercise Suspension, the Option
shall remain exercisable for a period of 30 days after the Option Exercise
Suspension is lifted by the Company, but no later than the original option
expiration date.

 

	
  If you:

  	
   

  	
  Here’s what happens to Your Options:

  
	
  Resign,
  or retire (and do not meet the Retirement Rule)

  	
   

  	
  Vesting stops and
  unvested options are cancelled effective on the termination date. You may
  exercise your vested options for up to 90 days after the termination date but
  no later than the original option expiration date.

  
	
  Become
  disabled (as defined under the Company’s applicable long-term disability
  plan)

  	
   

  	
  Options continue to
  vest on schedule through an approved disability leave (which includes
  approximately 13 weeks of short-term disability and 9 months of long-term
  disability). Upon termination of your employment after your disability leave
  period ends (which occurs 9 months after your transition to long-term
  disability or your transition to unpaid leave if you do not have long-term
  disability coverage under the long-term disability component of the Travelers
  disability program), your unvested options will vest immediately, and you may
  exercise options for up to one year from the date of your termination of
  employment, but no later than the original option expiration date.

  
	
  Take
  an approved personal leave of absence

  	
   

  	
  For the first three
  months of an approved personal leave, vesting continues. If the approved
  leave exceeds three months, vesting is suspended until you return to work and
  remain actively employed for 30 calendar days, after which time vesting will
  be restored retroactively. Vested options may be exercised during approved
  leave, but no later than the original option expiration date. If you
  terminate employment for any reason during the first year of an approved
  leave, the termination of employment provisions will apply. If the leave
  exceeds one year, all options will be cancelled immediately.

  

 

 

	
  Are on
  an approved family leave, medical leave, dependent care leave, military
  leave, or other statutory leave of absence

  	
   

  	
  Options will continue
  to vest on schedule, and you may exercise vested options during the leave but
  no later than the original option expiration date.

  
	
  Die
  while employed or following employment while your option is still outstanding

  	
   

  	
  Options fully vest upon
  death. Your estate may exercise options for up to one year from the date of
  death but no later than the original option expiration date.

  
	
  Are
  terminated involuntarily for gross misconduct or for cause

  	
   

  	
  Vesting stops and all
  outstanding options are cancelled on the termination date. You may exercise
  vested options on or before the termination date but no later than the
  original option expiration date.

  
	
  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)

  	
   

  	
  Vesting stops on the
  termination date. You may exercise vested options for up to 90 days after the
  termination date but no later than the original option expiration date.

  

 

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:

  	
   

  	
   

  
	
  

  Meet the Retirement Rule

  	
   

  	
  Unvested options fully
  vest on the termination date. Vested options may be exercised for up to three
  years from the termination date, but no later than the original option
  expiration date, provided that you do not engage in any activities that
  compete with the business operations of the Company, 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.

  

 

When you exercise any
options subject to the Retirement Rule, your exercise will represent and
constitute your certification to the Company that you have not engaged in any
activities that compete with the business operations of the Company since your
termination date.  You may be required to
provide the Company with other evidence of your compliance with the Retirement Rule as
the Company may require.

 

Notes to
the termination provisions

 

·                  The
Committee determines what constitutes “gross misconduct” and “cause”.

 

 

EXHIBIT B

 

NON-SOLICITATION AND NON-DISCLOSURE
AGREEMENT

 

THIS NON-SOLICITATION AND
NON-DISCLOSURE AGREEMENT (“Agreement”) is a part of the terms and conditions of
the award issued by The Travelers Companies, Inc., a Minnesota corporation
with its principal place of business located in St. Paul, Minnesota and its
affiliated entities (collectively, the “Company”), in favor of the participant
named in the term sheet (the “Employee”) to which this Agreement is attached as
an exhibit.

 

WITNESSETH:

 

WHEREAS, the Employee is employed by the Company; and

 

WHEREAS, the Company is engaged in the business
of marketing and selling insurance and insurance-related products throughout
the United States.

 

NOW, THEREFORE, in consideration of the promises and the mutual
covenants and obligations hereinafter set forth, the parties agree as follows:

 

1. Consideration. As consideration for the execution of
this Agreement, the Employee acknowledges receipt of an award(s) issued
pursuant to the Company’s 2004 Stock Incentive Plan (the “Consideration”), as
evidenced by term sheet(s) setting forth the terms and conditions of such
award(s) to which this Agreement is attached as an exhibit, which
constitutes good, valuable and independent consideration for all of Employee’s
covenants and obligations in this Agreement and above and beyond any
compensation Employee is entitled to receive from the Company.

 

2. Non-Disclosure
of Confidential Information.

 

(a) Employee
recognizes that the Company has developed information that is confidential,
proprietary and/or nonpublic that is related to its business, operations,
services, finances, clients, customers, policyholders, vendors and agents (“Confidential
Information”). Employee understands and agrees that he/she is prohibited from
using, disclosing, divulging or misappropriating any Confidential Information
for his/her own personal benefit or for the benefit of any person or entity,
except that Employee may disclose Confidential Information pursuant to a
properly issued subpoena, court order, other legal process, or official inquiry
of a federal, state or local taxing authority, or other governmental agency
with a legitimate legal right to know the Confidential Information. If
disclosure is compelled of Employee by subpoena, court order or other legal
process, or as otherwise required by law, Employee agrees to notify Company as
soon as notice of such process is received and before disclosure and/or
appearance takes place. Employee will use reasonable and prudent care to
safeguard and prevent the unauthorized use or disclosure of Confidential
Information. Confidential Information shall not include any information that: (a) is
or becomes a part of the public domain through no act or omission of Employee
or is otherwise available to the public other than by breach of this Agreement;
(b) was in Employee’s lawful possession prior to the disclosure and had
not been obtained by Employee either directly or indirectly as a result of
Employee’s employment with or other service to the Company; (c) is
disclosed to Employee by a third party who has authority from the Company to
make such disclosure and such disclosure to Employee is not confidential; or (d) is
independently developed by Employee outside of Employee’s employment with the
Company and without the use of any Confidential Information. Employee further
acknowledges that Employee, in the course of employment, has had and will have
access to such Confidential Information.

 

 

(b) Employee agrees
that every document, computer disk, electronic file, computerized information,
computer software program, notation, record, diary, memorandum, development,
investigation, or the like, and any method or manner of doing business of the
Company containing Confidential Information made or acquired by the Employee
during employment by the Company is and shall be the sole and exclusive
property of Company. The Employee will deliver the same (and every copy, disk,
abstract, summary, or reproduction of the same made by or for the Employee or
acquired by the Employee) whenever the Company may so require and in any event
prior to or at the termination of employment. Nothing in Section 2 is
intended or shall be interpreted to mean that the Company may withhold
information, including computerized information, relating to Employee’s
personal contacts and personal information that may be stored or contained in
Employee’s physical or electronic files. The Company further agrees not to
unreasonably withhold information relating to Employee’s business-related
contacts, to the extent such information falls outside the definition of
Confidential Information set forth in Section 2(a) above.

 

3. Non-Solicitation/Non-Interference.

 

(a) The parties
understand and agree that this Agreement is intended to protect the Company
against the Employee raiding its employees and/or its business during the
twelve (12) month period following the Separation Date (whether voluntary or
involuntary) (the “Restricted Period”), while recognizing that after conclusion
of his/her employment (the “Separation Date”), Employee is still permitted to
freely compete with the Company, except to the extent Confidential Information
is used in such solicitation and subject to certain restrictions set forth
below. Further, nothing in this Agreement is intended to grant or limit any
rights or claims as to any future employer of Employee. To this end, any court
considering the enforcement of this Agreement for a breach of this Agreement,
must accept this statement of intent.

 

(b) After Employee
has left the employment of the Company and during the Restricted Period,
Employee will not seek to recruit or solicit, or assist in recruiting or
soliciting, 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 the Company at any time during the last three months of
Employee’s employment or thereafter. Further, Employee shall not, on behalf of
himself/herself or any other person, hire, employ or engage any such person.
The parties agree that Employee shall not directly engage in the aforesaid
conduct through a third party for the purpose of colluding to avoid the
restrictions in this Agreement. However, nothing in this Agreement precludes
Employee 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 Company, provided
that Employee does not specifically direct such third party to specifically
target the Company’s employees generally or specific individual employees of
the Company.

 

(c) After Employee
has left the employment of the Company, accepts a position as an employee,
consultant or contractor with a direct competitor of the Company, and during
the Restricted Period, Employee will not utilize Confidential Information to
seek to solicit or assist in soliciting, participate in or otherwise promote
the solicitation of, interference with, attempt to influence or otherwise
affect any person or entity, who is a client, customer, policyholder, or agent
of the Company, to discontinue business with the Company, and/or move that
business elsewhere. Employee also agrees not to be directly and personally
involved in the negotiation or solicitation of any individual book roll over(s) or
other book of business transfer arrangements involving the transfer of business
away from Company, even if Confidential Information is not involved. However, nothing
in this Agreement precludes the Employee from directing a third party
(including but not limited to employees of his/her subsequent employer) to
solicit, compete for, negotiate and execute book roll over deals or other book
of business transfer arrangements provided that (i) Confidential
Information provided by the Employee is not used, (ii) Employee is not
personally and directly involved in such negotiations, and (iii) Employee
does not direct such third party to target specific agents of Company. Furthermore,
nothing in this Agreement precludes the Employee from freely competing with the
Company including but not limited to competing on an account by account or deal
by deal basis to the extent that he/she does not use Confidential Information.

 

 

4. Forfeiture
of Consideration; Other Remedies. Employee agrees that if Employee breaches this
Agreement during the Restricted Period, Employee will immediately forfeit any
award that has not yet been paid, exercised or vested and that serves as
Consideration for this Agreement. In addition, the Company will be entitled to
recapture from Employee any and all compensatory value that Employee received
within twelve months prior to or twelve months after the Separation Date from
any award that has already been paid, exercised or vested and that serves as
Consideration for this Agreement. The value subject to recapture includes the
amount of any cash payment made to Employee upon exercise or settlement of the
award, and/or the amount included as compensation in the taxable income of
Employee upon vesting or exercise of the award. Employee will promptly pay the
full amount subject to recapture to the Company upon demand in the form of cash
or shares of Company Common Stock with a current fair market value equal to the
amount subject to recapture. In addition to the remedies set forth in Sections
2, 3 and 4 of this Agreement, Company may avail itself of any other remedies
available under statute or common law.

 

5. Consent
to Jurisdiction.
Jurisdiction and venue for enforcement of this Agreement, and for resolution of
any dispute under this Agreement, shall be exclusively in the federal or state
courts in the state and county where the Employee resides at the time that the
Company commences an action under this Agreement. Employee agrees to notify
Company of any changes in his/her residence after the Separation Date.

 

6. Modification. This Agreement may not be terminated or
modified without the express written consent of both the Employee and the
Company.

 

7. Employment
At Will. Employee specifically recognizes and agrees that
nothing in this Agreement shall be deemed to establish an employment
relationship on a basis other than terminable at will, that the Company is not
obligated to continue Employee’s employment for any particular period, and that
this Agreement is not an employment agreement for continued employment.

 

8. Governing
Law. This
Agreement shall be construed, interpreted and applied in accordance with the
laws of the State of Minnesota.

 

9. Waiver. The waiver of a breach of any provision
of this Agreement shall not operate as or be construed as a waiver of any
subsequent breach of this Agreement.

 

10. Severability. If any provision, section or subsection
of this Agreement is adjudged by any court to be void or unenforceable in whole
or in part, this adjudication shall not affect the validity of the remainder of
the Agreement, including any other provision, section or subsection. Each
provision, section, and subsection of this Agreement is separable from every
other provision, section and subsection and constitutes a separate and distinct
covenant. Both Employee and the Company agree that if any court rules that
a restriction contained in this Agreement is unenforceable as written, the
parties will: (a) jointly request and consent to the reformation of the
restriction by the court to the extent necessary to make the Agreement
enforceable, and (b) not to seek to enforce the ruling in any state other
than the state where the ruling was made.

 

11. Assignment. This Agreement shall be binding upon and
inure to the benefit of the Company, its successors and assigns and to the
benefit of Employee, his/her heirs and legal representatives. This Agreement is
not assignable by Employee. This Agreement may be assigned by the Company.
Employee transfers to any corporate parent, affiliate or subsidiary of the
Company shall constitute an assignment.

 

12. Entire
Agreement.
This Agreement and any award agreement or term sheet documenting the equity
award(s) that constitutes the Consideration constitute the entire
Agreement and understanding between the Company and the Employee concerning the
subject matters hereof. No modification, amendment, termination or waiver of
this Agreement shall be binding unless in writing and signed by a duly
authorized representative of the Company. Employee acknowledges and represents
that he/she has carefully read this Agreement, that he/she has considered the
terms and conditions contained herein, and that he/she voluntarily assents to
all of these terms and conditions, and that he/she is accepting this Agreement
by Employee’s own free will.

 

 

THE TRAVELERS COMPANIES, INC.

 

PARTICIPANT’S
ACCEPTANCE

 

(Click
on the button below to accept the terms of your Agreement, including the terms
of the Non-Solicitation and Non-Disclosure Agreement. You will not be able to
undo this change.)

 

Agree/Accept

 

(Click
on the button below to return to ECW and accept the terms of your Agreement at
another time. You will not be able to undo this change.)

 

Return to Equity Compensation WebExhibit 10.16

TRAVELERS

PERFORMANCE SHARE AWARD NOTIFICATION AND AGREEMENT

 

(This award must be
accepted by            .
on               ,
or it will be forfeited. Refer below to Section 12.)

 

	
  Participant:

  	
  Grant Date: 

  
	
  Number of Performance Shares:

  	
   

  
	
  Performance Period: 

  	
   

  
			

 

1. Grant of Performance Shares. This performance share award is granted
pursuant to The Travelers. 2004 Stock Incentive Plan (the “Plan”),
by The Travelers Companies, Inc. (the “Company”) to you, an employee of
the Company or a subsidiary of the Company (the “Participant”). The
Company hereby grants to the Participant an award for the number of Performance
Shares set forth above (the “Award”), 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 this award notification and agreement,
the Plan, the prospectus dated February 5, 2008 (titled “Travelers Equity
Awards”), and any applicable prospectus supplement (together, the “Prospectus”).
The terms, conditions and restrictions in 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 grant
notification and agreement. The terms, conditions and restrictions in this
award notification and agreement, the Prospectus, and the Plan constitute the
Award agreement between the Participant and the Company (the “Agreement”). By
accepting this Award, the Participant acknowledges receipt of the Prospectus
and that he or she has read and understands the Prospectus.

 

The
Participant understands that this 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, 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 this
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 a Committee of the Board
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
this Award unless and until the Award is vested and settled in shares of Common
Stock.

 

3. Performance Period. For purposes of this Award, the Performance
Period shall be defined as the three-year period commencing January 1,
2008 and ending December 31, 2010.

 

4. Vesting. The Participant’s right to the Performance Shares vests on the last
day of the Performance Period if the Participant remains continuously employed
by the Company or one of its subsidiaries on such day. If the Participant’s
employment with the Company and its subsidiaries terminates during the
Performance Period, the Participant’s right to the Performance Shares will be
determined in accordance with Exhibit A.

 

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). 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. 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 forms or 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 or internet site to which Participant has
access.

 

8. Administration. In administering the Plan, or to comply with applicable legal,
regulatory, tax, or accounting requirements, it may be necessary for the
Company or the subsidiary employing the Participant to transfer certain
Participant data to the Company, its subsidiaries, 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.

 

9. Entire Agreement; No Right to Employment. The Agreement 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. Nothing contained herein, in the Plan, or in
the Prospectus shall confer upon the Participant any rights to continued
employment or employment in any particular position, at any specific rate of
compensation, or for any particular period of time.

 

10. Dispute and Claims Resolution; Conflict. Any disputes, claims and counterclaims under
this Agreement shall be resolved in accordance with any internal dispute
resolution policy of the Company in effect from time to time, including any
arbitration provisions thereof.  In the
event of a conflict between the Plan and this grant notification and agreement,
or the terms, conditions, and restrictions of the Award as specified in the
Prospectus, the Plan shall control.

 

11. Non-Solicitation and Non-Disclosure Agreement. The Participant agrees to be bound by the
terms of the Non-Solicitation and Non-Disclosure Agreement attached hereto as Exhibit C,
which provides for the consequences set forth therein in the event the
Participant breaches the non-solicitation and non-disclosure covenants
contained therein, as more fully described in Exhibit C.

 

12. Acceptance and Agreement by Participant; Forfeiture upon
Failure to Accept. By
clicking the button below, Participant accepts the Award and agrees to be bound
by the terms, conditions, and restrictions set forth in the Prospectus, the
Plan, this notification and agreement, the Non-Solicitation and Non-Disclosure
Agreement and the Company’s policies, as in effect from time to time, relating
to the Plan. The Participant’s rights under the Award will lapse at 12:00 a.m.
on June 3, 2008 and the Award will be forfeited on such date if the
Participant does not accept the Award by clicking the button below on or before
11:59 p.m. on June 2, 2008.

 

 

EXHIBIT A

 

To Travelers
Performance Share Award Notification and Agreement

 

When you leave the
Company

 

References
to “you” or “your” are to the Participant. 
“Termination date” refers to the date of termination of your employment
as reflected on the books and records of the Company.

 

If
you terminate your employment or if there’s a break in your employment, your
Award may be cancelled before the end of the Performance Period and your rights
to 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, or retire (and 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 your date of termination, 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 number of Performance Shares set forth at the beginning of this 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
  received as soon as administratively possible following your death.

  
	
  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.

  
	
  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.

  

 

 

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:

  	
   

  	
   

  
	
  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 date to your date of termination, 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 only if you do not engage in any activities that compete with the
  business operations of the Company, 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.

  

 

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 Company since you
retired, and provide such other evidence as the Company may require.

 

Notes to the termination provisions

 

·                  The
Committee determines what constitutes “gross misconduct” and “cause.”

 

 

EXHIBIT B

 

To Travelers
Performance Share Award Notification and Agreement

 

Performance
Share Vesting Grid:

 

	
  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)

  
	
   

  	
  Less
  than 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 (2008), by
$342.0 million, as to the second year in the Performance Period (2009), by $342.0
million times the ratio of:  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 divided by the Company’s 2008 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

 

 

(2010),
by $342.0 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 2008
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

 

NON-SOLICITATION
AND NON-DISCLOSURE AGREEMENT

 

THIS
NON-SOLICITATION AND NON-DISCLOSURE AGREEMENT (“Agreement”) is a part of the
terms and conditions of the award issued by The Travelers Companies, Inc.,
a Minnesota corporation with its principal place of business located in St.
Paul, Minnesota and its affiliated entities (collectively, the “Company”), in
favor of the participant named in the term sheet (the “Employee”) to which this
Agreement is attached as an exhibit.

 

WITNESSETH:

 

WHEREAS, the Employee is employed by the Company; and

 

WHEREAS, the Company is engaged in the business of
marketing and selling insurance and insurance-related products throughout the
United States.

 

NOW, THEREFORE, in consideration of the promises and the
mutual covenants and obligations hereinafter set forth, the parties agree as
follows:

 

1. Consideration. As consideration for the execution of this
Agreement, the Employee acknowledges receipt of an award(s) issued
pursuant to the Company’s 2004 Stock Incentive Plan (the “Consideration”), as
evidenced by term sheet(s) setting forth the terms and conditions of such
award(s) to which this Agreement is attached as an exhibit, which
constitutes good, valuable and independent consideration for all of Employee’s
covenants and obligations in this Agreement and above and beyond any
compensation Employee is entitled to receive from the Company.

 

2. Non-Disclosure of Confidential Information.

 

(a) Employee
recognizes that the Company has developed information that is confidential,
proprietary and/or nonpublic that is related to its business, operations,
services, finances, clients, customers, policyholders, vendors and agents (“Confidential
Information”). Employee understands and agrees that he/she is prohibited from
using, disclosing, divulging or misappropriating any Confidential Information
for his/her own personal benefit or for the benefit of any person or entity,
except that Employee may disclose Confidential Information pursuant to a
properly issued subpoena, court order, other legal process, or official inquiry
of a federal, state or local taxing authority, or other governmental agency
with a legitimate legal right to know the Confidential Information. If
disclosure is compelled of Employee by subpoena, court order or other legal
process, or as otherwise required by law, Employee agrees to notify Company as
soon as notice of such process is received and before disclosure and/or
appearance takes place. Employee will use reasonable and prudent care to safeguard
and prevent the unauthorized use or disclosure of Confidential Information.
Confidential Information shall not include any information that: (a) is or
becomes a part of the public domain through no act or omission of Employee or
is otherwise available to the public other than by breach of this Agreement; (b) was
in Employee’s lawful possession prior to the disclosure and had not been
obtained by Employee either directly or indirectly as a result of Employee’s
employment with or other service to the Company; (c) is disclosed to
Employee by a third party who has authority from the Company to make such
disclosure and such disclosure to Employee is not confidential; or (d) is
independently developed by Employee outside of Employee’s employment with the
Company and without the use of any Confidential Information. Employee further
acknowledges that Employee, in the course of employment, has had and will have
access to such Confidential Information.

 

 

(b) Employee
agrees that every document, computer disk, electronic file, computerized
information, computer software program, notation, record, diary, memorandum,
development, investigation, or the like, and any method or manner of doing
business of the Company containing Confidential Information made or acquired by
the Employee during employment by the Company is and shall be the sole and
exclusive property of Company. The Employee will deliver the same (and every
copy, disk, abstract, summary, or reproduction of the same made by or for the
Employee or acquired by the Employee) whenever the Company may so require and
in any event prior to or at the termination of employment. Nothing in Section 2
is intended or shall be interpreted to mean that the Company may withhold
information, including computerized information, relating to Employee’s
personal contacts and personal information that may be stored or contained in
Employee’s physical or electronic files. The Company further agrees not to
unreasonably withhold information relating to Employee’s business-related contacts,
to the extent such information falls outside the definition of Confidential
Information set forth in Section 2(a) above.

 

3. Non-Solicitation/Non-Interference.

 

(a) The
parties understand and agree that this Agreement is intended to protect the Company
against the Employee raiding its employees and/or its business during the
twelve (12) month period following the Separation Date (whether voluntary or
involuntary) (the “Restricted Period”), while recognizing that after conclusion
of his/her employment (the “Separation Date”), Employee is still permitted to
freely compete with the Company, except to the extent Confidential Information
is used in such solicitation and subject to certain restrictions set forth
below. Further, nothing in this Agreement is intended to grant or limit any
rights or claims as to any future employer of Employee. To this end, any court
considering the enforcement of this Agreement for a breach of this Agreement,
must accept this statement of intent.

 

(b) After
Employee has left the employment of the Company and during the Restricted
Period, Employee will not seek to recruit or solicit, or assist in recruiting
or soliciting, 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 the Company at any time during the last three months of
Employee’s employment or thereafter. Further, Employee shall not, on behalf of
himself/herself or any other person, hire, employ or engage any such person.
The parties agree that Employee shall not directly engage in the aforesaid
conduct through a third party for the purpose of colluding to avoid the
restrictions in this Agreement. However, nothing in this Agreement precludes
Employee 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 Company, provided
that Employee does not specifically direct such third party to specifically
target the Company’s employees generally or specific individual employees of
the Company.

 

(c) After
Employee has left the employment of the Company, accepts a position as an
employee, consultant or contractor with a direct competitor of the Company, and
during the Restricted Period, Employee will not utilize Confidential
Information to seek to solicit or assist in soliciting, participate in or
otherwise promote the solicitation of, interference with, attempt to influence
or otherwise affect any person or entity, who is a client, customer,
policyholder, or agent of the Company, to discontinue business with the
Company, and/or move that business elsewhere. Employee also agrees not to be
directly and personally involved in the negotiation or solicitation of any
individual book roll over(s) or other book of business transfer
arrangements involving the transfer of business away from Company, even if
Confidential Information is not involved. However, nothing in this Agreement
precludes the Employee from directing a third party (including but not limited
to employees of his/her subsequent employer) to solicit, compete for, negotiate
and execute book roll over deals or other book of business transfer
arrangements provided that (i) Confidential Information provided by the
Employee is not used, (ii) Employee is not personally and directly
involved in such negotiations, and (iii) Employee does not direct such
third party to target specific agents of Company. Furthermore, nothing in this
Agreement precludes the Employee from freely competing with the Company
including but not limited to competing on an account by account or deal by deal
basis to the extent that he/she does not use Confidential Information.

 

 

4. Forfeiture of Consideration; Other Remedies. Employee agrees that if Employee breaches
this Agreement during the Restricted Period, Employee will immediately forfeit
any award that has not yet been paid, exercised or vested and that serves as
Consideration for this Agreement. In addition, the Company will be entitled to
recapture from Employee any and all compensatory value that Employee received
within twelve months prior to or twelve months after the Separation Date from
any award that has already been paid, exercised or vested and that serves as
Consideration for this Agreement. The value subject to recapture includes the
amount of any cash payment made to Employee upon exercise or settlement of the
award, and/or the amount included as compensation in the taxable income of
Employee upon vesting or exercise of the award. Employee will promptly pay the
full amount subject to recapture to the Company upon demand in the form of cash
or shares of Company Common Stock with a current fair market value equal to the
amount subject to recapture. In addition to the remedies set forth in Sections
2, 3 and 4 of this Agreement, Company may avail itself of any other remedies
available under statute or common law.

 

5. Consent to Jurisdiction. Jurisdiction and venue for enforcement of
this Agreement, and for resolution of any dispute under this Agreement, shall
be exclusively in the federal or state courts in the state and county where the
Employee resides at the time that the Company commences an action under this
Agreement. Employee agrees to notify Company of any changes in his/her
residence after the Separation Date.

 

6. Modification. This Agreement may not be terminated or
modified without the express written consent of both the Employee and the
Company.

 

7. Employment At Will. Employee specifically recognizes and agrees
that nothing in this Agreement shall be deemed to establish an employment
relationship on a basis other than terminable at will, that the Company is not
obligated to continue Employee’s employment for any particular period, and that
this Agreement is not an employment agreement for continued employment.

 

8. Governing
Law. This Agreement shall be construed,
interpreted and applied in accordance with the laws of the State of Minnesota.

 

9. Waiver. The waiver of a breach of any provision of this Agreement shall not
operate as or be construed as a waiver of any subsequent breach of this
Agreement.

 

10. Severability. If any provision, section or subsection of
this Agreement is adjudged by any court to be void or unenforceable in whole or
in part, this adjudication shall not affect the validity of the remainder of
the Agreement, including any other provision, section or subsection. Each
provision, section, and subsection of this Agreement is separable from every
other provision, section and subsection and constitutes a separate and distinct
covenant. Both Employee and the Company agree that if any court rules that
a restriction contained in this Agreement is unenforceable as written, the
parties will: (a) jointly request and consent to the reformation of the
restriction by the court to the extent necessary to make the Agreement
enforceable, and (b) not to seek to enforce the ruling in any state other
than the state where the ruling was made.

 

11. Assignment. This Agreement shall be binding upon and
inure to the benefit of the Company, its successors and assigns and to the
benefit of Employee, his/her heirs and legal representatives. This Agreement is
not assignable by Employee. This Agreement may be assigned by the Company.
Employee transfers to any corporate parent, affiliate or subsidiary of the
Company shall constitute an assignment.

 

12. Entire Agreement. This Agreement and any award agreement or
term sheet documenting the equity award(s) that constitutes the
Consideration constitute the entire Agreement and understanding between the
Company and the Employee concerning the subject matters hereof. No
modification, amendment, termination or waiver of this Agreement shall be
binding unless in writing and signed by a duly authorized representative of the
Company. Employee acknowledges and represents that he/she has carefully read
this Agreement, that he/she has considered the terms and conditions contained
herein, and that he/she voluntarily assents to all of these terms and
conditions, and that he/she is accepting this Agreement by Employee’s own free
will.

 

 

THE TRAVELERS COMPANIES, INC.

 

PARTICIPANT’S ACCEPTANCE

 

(Click on the button below to accept the terms of your
Agreement, including the terms of the Non-Solicitation and Non-Disclosure
Agreement. You will not be able to undo this change.)

 

Agree/Accept

 

(Click on the button below to return to ECW and accept
the terms of your Agreement at another time. You will not be able to undo this
change.)

 

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