Document:

Exhibit 10.42

 

THE TRAVELERS COMPANIES, INC.

POLICY REGARDING EXECUTIVE INCENTIVE COMPENSATION RECOUPMENT

 

The
Board of Directors (the “Board”) of The Travelers Companies, Inc.
(the “Company”) believes that it is appropriate to have a policy
regarding the recoupment of incentive compensation from any Covered Executive
(as defined below) in certain situations involving fraud or willful misconduct
resulting in a financial restatement. The Company’s policy reads as follows:

 

It is
the Company’s policy that, subject to the terms of this policy, the Company
will require reimbursement and/or cancellation of all or a portion of any incentive
cash bonus or equity-based incentive compensation awarded to a Covered
Executive after February 1, 2010 where the Compensation Committee of the
Board has determined that all of the following factors are present: (a) the
award and/or payout thereof was predicated upon the achievement of certain
financial results that were subsequently the subject of a restatement, (b) the
Covered Executive engaged in fraud or willful misconduct that was a significant
contributing factor in causing the restatement and (c) a lower award
and/or payout thereof would have been made to the Covered Executive based upon
the restated financial results.

 

Incentive
compensation shall be granted subject to the policy that, in each such instance
described above, the Company will, to the extent permitted by applicable law
and subject to the discretion and approval of the Compensation Committee of the
Board, taking into account such facts and circumstances as it deems
appropriate, including the costs and benefits of doing so, seek to recover the Covered
Executive’s cash incentive bonus award and/or equity-based incentive compensation
paid or issued to the Covered Executive in excess of the amount that would have
been paid or issued based on the restated financial results (the “Excess Amount”).

 

Any
recoupment under this policy shall be in addition to, and shall not preclude,
any other remedies that may be available to the Company.  Accordingly, the remedies provided for under
this policy shall be in addition to, and shall not be preclude, any remedies
against the Covered Executive for fraud or misconduct, whether or not there is
a restatement.  If the Board learns of
any misconduct by a Covered Executive that contributed to the Company having to
restate all or a portion of its financial statements, it shall take such action
as it deems necessary to remedy the misconduct, prevent its recurrence and, if
appropriate, based on all relevant facts and circumstances, take remedial
action against the wrongdoer in a manner it deems appropriate.

 

Notwithstanding
the foregoing, if the Compensation Committee determines (taking into account
such factors and circumstances as it deems appropriate, which may include costs
to the Company of doing so and any fines, penalties or legal or other expenses
which were or may be incurred by the Covered Executive) that, after recovery of
an Excess Amount from a Covered Executive, the Covered Executive is nonetheless
unjustly enriched, it may seek recovery of more than such Excess Amount up to
the entire amount of the incentive compensation.

 

For
purposes of this policy, the term “Covered Executive” means (a) any member
of the Management Committee of the Company and (b) any other “officer” of
the Company, as defined in Rule 16a-1(f) under the Securities
Exchange Act of 1934, as amended, including the principal accounting officer.  “Management Committee” means the most senior
policy setting group of executives within the Company.Exhibit 10.43

 

NON-COMPETITION AGREEMENT

 

This
NON-COMPETITION AGREEMENT (“Non-Competition Agreement”) is made and entered
into this        day of                   ,
20    , by and between                             
(“Employee”), The Travelers Indemnity Company, a Connecticut corporation (the “Company”),
and The Travelers Companies, Inc., a Minnesota corporation (“Parent” and,
together with its subsidiaries, including the Company, “Travelers”).

 

WITNESSETH:

 

WHEREAS, Travelers is currently engaged in the property and
casualty insurance business (the “Business”); and

 

WHEREAS, Employee is employed by the Company in a position
of trust and confidence and has had and will continue to have access to and
become familiar with the products, methods, technology, services and procedures
used by Travelers in connection with the Business; and

 

WHEREAS, in connection with Employee’s employment with the
Company, Employee has and will continue to have access to confidential,
proprietary and trade secret information of Travelers and relating to the
Business, which confidential, proprietary and trade secret information
Travelers desires to protect from unfair competition.

 

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

 

SECTION 1.                                                    CONSIDERATION.

 

(a)                                  As
consideration for Employee’s execution of this Non-Competition Agreement and
for Employee agreeing to comply with Employee’s obligations under this Non-Competition
Agreement, Parent will grant Employee (within 30 days after the date hereof,
subject to Employee’s acceptance of such grant) such number of  restricted stock units (or, at Parent’s option, shares of
restricted stock) of Parent, equal to $10,000 divided by the closing price of
Parent’s common stock determined on The New York Stock Exchange on                     
    , 20     (rounded to the nearest
whole number), pursuant to the terms and conditions set forth in a Restricted
Stock Unit Award Notification and Agreement (or, if applicable, Restricted
Stock Grant Notification and Agreement),  The Travelers
Companies, Inc. Amended and Restated 2004 Stock Incentive Plan, as it may
be amended from time to time, and the prospectus dated January 29, 2010
and any applicable prospectus supplement. 
The restricted stock units (or, if applicable shares of restricted
stock) shall be fully vested upon grant, shall pay cash dividend equivalents
(or, if applicable, cash dividends) in the same amount and at the same time as
unrestricted common stock and shall be subject to the holding requirement set
forth in the award agreement.

 

(b)                                 If Travelers
elects to exercise its Non-Competition Option (as defined in Section 3(c)(i))
and provided Employee complies with all of Employee’s obligations under this
Non-Competition Agreement, then:

 

 

Form Non-Compete Agreement for Management Committee Members

 

(i)                                     Employee will
receive the following additional amounts in cash, paid in accordance with Section 1(d):

 

(A)                              an amount equal to six (6) months
of Employee’s Monthly Base Salary; plus

 

(B)                                an amount equal to fifty
percent (50%) of Employee’s Average Annual Bonus; plus

 

(C)                                an amount equal to fifty
percent (50%) of Employee’s Average Annual Equity Award; and

 

(ii)                                  If the Company
or any other Travelers entity maintains an employer-sponsored group medical
and/or dental plan (whether insured or self-funded) at the Termination Date
under which Employee was covered immediately prior to the Termination Date, and
if Employee is eligible to and properly elects to continue coverage under such
plan after the Termination Date under Part 6 of Subtitle B of Subchapter I
of Employee Retirement Income Security Act of 1974, as amended, or any
comparable continuation coverage requirements under then-current federal or
state law, the Company will reimburse Employee for the difference, if any,
between (1) the total premiums or contributions properly charged to
Employee for such continuation coverage during the Restricted Period, and (2) the
total premiums or contributions that would have been charged to Employee for
comparable coverage under the plan had Employee remained employed by the
Company during the Restricted Period. 
Nothing in this Non-Competition Agreement shall in any way limit or
restrict the right of the Company or any other Travelers entity to amend or
terminate its group medical and/or dental plan at any time and for any reason,
including any amendment that applies to a group of employees that includes
Employee.  If then-current law would
prohibit Employee from electing continuation coverage because of the payment
called for under this Section 1(b)(ii), then Employee shall be entitled to
such payment even though Employee does not elect continuation coverage, with
the amount determined under (1) above being based on the premium or
contribution that would have been charged to Employee if Employee were eligible
to elect and had elected continuation coverage or, alternatively, Employee may
waive the payment called for under this Section 1(b)(ii) so that
Employee may elect continuation coverage. 
If the plan sponsor determines that any provision of then-current law
would prohibit the payment called for under this Section 1(b)(ii), impose
a tax or penalty on the Company or any Travelers entity that is more than five
times (5x) the payment due to the Employee under this Section 1(b)(ii), or
impose any adverse tax consequence or penalty on the plan or other employees as
a result of the payment called for under this Section 1(b)(ii), and such
prohibition or adverse consequence can be avoided by reformation of the terms
of such payment in a manner that preserves the value of the payment to Employee
at a comparable cost to the Company or other Travelers entity, and such
reformation is not prohibited and does not create an adverse tax consequence to
the Company or other Travelers entity, the plan, other employees or Employee,
such reformation shall be made in a manner that preserves as closely as 

 

2

 

possible
the current structure of this Section 1(b)(ii).  Otherwise, the foregoing provisions of this Section 1(b)(ii) shall
be ineffective and the payment will not be made to Employee.

 

(c)                                  Notwithstanding
the foregoing, if Employee was hired after the Company granted its last annual
bonus and/or annual equity awards and, as a result, Employee has not received
any annual cash bonus payments and/or any annual equity awards prior to the
Termination Date, then the amount payable to Employee under each of Sections
1(b)(i)(B) and (C) shall be equal to fifty percent (50%) of the
amount set forth in Employee’s offer letter (or, if there is no such amount or
letter, a letter for purposes of this calculation containing such amount) as
Employee’s indicated or expected annual cash bonus and/or annual equity award
for the next award cycle, respectively (provided that, if a range of indicated
or expected annual cash bonus and/or annual equity awards is specified in
Employee’s offer letter, the amount payable under each of Sections 1(b)(i)(B) and
(C) shall be equal to fifty percent (50%) of the mid-point of the
applicable indicated or expected range).

 

(d)                                 If Travelers
elects to exercise its Non-Competition Option and Employee complies with all of
Employee’s obligations under this Non-Competition Agreement, then the Company
shall pay to Employee (or, in the event Employee dies before receipt of
payment, to Employee’s estate or to such other person as Employee may designate
in a written notification in accordance with Section 4 before Employee’s
death) (i) the amounts calculated under Section 1(b)(i) (or Section 1(c),
if applicable), and (ii) the amount due under Section 1(b)(ii).  Such amounts shall be paid in cash in a lump
sum on or about the Company’s first regular payroll date that is after the
six-month anniversary of the Termination Date.

 

(e)                                  If Travelers
elects to exercise its Non-Competition Option and Employee fails to comply with
any of Employee’s obligations under this Non-Competition Agreement, then
Travelers shall be entitled to exercise its remedies under Section 3.

 

(f)                                    If Travelers
elects to exercise (or is deemed to have exercised) its Waiver Option (as
defined in Section 3(c)(ii)), then Employee shall not be entitled to any
of the amounts calculated under Section 1(b)(i) (or Section 1(c),
if applicable) or any of the continued benefits under Section 1(b)(ii).

 

(g)                                 The Company or
any other Travelers entity may withhold from any amounts payable under this Section 1
such federal, state and local income and employment taxes as it shall determine
are required or authorized to be withheld pursuant to any applicable law or
regulation.

 

SECTION 2.                                                    CERTAIN
DEFINITIONS.

 

(a)                                  “Aggregate Grant Date Fair
Value” for purposes of calculating Employee’s Average Annual Equity Award means
the aggregate grant date fair value of any annual equity awards, as calculated
by Travelers, as of the grant date of each relevant award, for purposes of determining and communicating to Employee the total
direct compensation of Employee.

 

3

 

(b)                                 “Average Annual Bonus” means the cash bonus amount calculated by
reference to the bonus, if any, Employee received in respect of the two annual
bonus periods that ended with or immediately prior to the Separation
Acknowledgement Date.  If Employee was
eligible to receive a bonus for both of such bonus periods, then Employee’s “Average
Annual Bonus” is the sum of the bonuses received for such bonus periods (which
may be zero if Employee did not receive a bonus for either such period) divided
by two.  If Employee was eligible to
receive a bonus for only one bonus period, then Employee’s “Average Annual
Bonus” equals the amount of the bonus received for such bonus period (which may
be zero if Employee did not receive a bonus for such period).  If an Employee is awarded an annual cash
bonus and defers receipt of all or part of it pursuant to a deferred
compensation plan of Travelers, such bonus shall be considered to have been received
by Employee for purposes of the calculations in this Non-Competition Agreement.

 

(c)                                  “Average Annual Equity Award” means the Aggregate Grant Date Fair
Value of the annual equity awards, if any, Employee received as part of the two
most recent annual equity grants made to employees (excluding any off-cycle
awards) prior to the Separation Acknowledgement Date.  If Employee was eligible to receive annual
equity awards for both of such annual equity award periods, then Employee’s “Average
Annual Equity Award” equals the Aggregate Grant Date Fair Value of the total
annual equity awards received for such periods (which may be zero if Employee
did not receive an annual equity award for either such period) divided by
two.  If Employee was eligible to receive
an annual equity award for only one annual equity award period, then Employee’s
“Average Annual Equity Award” equals the Aggregate Grant Date Fair Value of the
annual equity award received for such period (which may be zero if Employee did
not receive an annual equity award for such period).

 

(d)                                 “Code” means the Internal Revenue Code of 1986, as amended.  Any reference to a specific provision of the
Code includes a reference to such provisions as it may be amended from time to
time, any successor provision, and current and future guidance and regulations
interpreting such provision.

 

(e)                                  “Management Committee” shall mean the most senior policy setting
group of executives within Travelers (or, if applicable, any surviving or
successor entity or any ultimate parent of Parent), excluding any member of
such group of executives who has given or received oral or written notice of
intent to terminate employment as of the date of this Non-Competition Agreement
and who in fact terminates employment by             ,
20    .

 

(f)                                    “Monthly Base Salary” means one twelfth (1/12) of Employee’s
annual base salary in effect immediately prior to the Termination Date.

 

(g)                                 “Restricted Period” means the six (6) month period
immediately following Employee’s Termination Date.

 

(h)                                 “Restricted Territory” means anywhere (A) in the United
States or (B) in any other country where Travelers is physically present
and engaged in the Business domestically in that country as of the Termination
Date.

 

4

 

(i)                                     “Separation Acknowledgement Date”  means
the date a written notice complying with Section 4 (A) is received by
Employee from Travelers informing Employee that Employee’s employment will be
terminated or (B) is received by Travelers from Employee informing
Travelers that Employee is resigning from employment, provided that, in the
event that no such written communication is received by either party prior to
the Termination Date, such date shall be the Termination Date.

 

(j)                                     “Termination Date” means the date of Employee’s “separation from
service” with Travelers within the meaning of section 409A(a)(2)(A)(i) of
the Code, whether such separation from service is at the initiative of Employee
or Travelers.

 

SECTION 3.                                                    NON-COMPETITION COVENANT.

 

(a)                                  If Travelers elects to exercise its Non-Competition Option in
accordance with Section 3(c)(i), then, during the Restricted Period in the
Restricted Territory, Employee shall not, 
directly or indirectly, in any manner or capacity, including without
limitation as a proprietor, principal, agent, partner, officer, director,
stockholder, employee, member of any association, consultant or otherwise, (i) perform
services for or have any ownership interest in (1) any entity that, taken
together with its affiliates, is primarily engaged in the Business, or (2) any
business, business unit or division that is primarily engaged in the Business
(in each case, a “Restricted Entity”) or (ii) engage in the Business.  If Travelers elects to exercise (or is deemed
to have exercised) its Waiver Option (as defined in Section 3(c)(ii)),
then this Section 3(a) shall not apply.

 

(b)                                 Notwithstanding the foregoing, the following shall not constitute
non-compliance with this Agreement or a breach of Section 3(a): (i) ownership
by Employee, as a passive investment, of less than 5.0% of the outstanding
voting shares of any entity, (ii) performing services for or having an
ownership interest in an entity (other than a Restricted Entity) that is
engaged in the business of acting as an agent or broker (including those
engaged in the distribution of property and casualty insurance) so long as
Employee is not actively engaged in underwriting, claims, investment activities
or third party administration, in each case, relating to property and casualty
insurance, (iii) seeking and/or accepting (and taking any action in
furtherance of seeking and/or accepting, including discussions regarding
potential investment) any position or relationship with an entity that would
otherwise breach Section 3(a), so long as such position, relationship or
investment or any services related thereto does not commence before the end of
the Restricted Period and (iv) non-compliance with Section 3(a) that
is isolated, unintentional and immaterial.

 

(c)                                  Travelers shall, in its sole discretion, have the right to:

 

(i)                                     elect to enforce the provisions of Section 3(a) if and
only if a Travelers entity notifies Employee in accordance with Section 4
no later than five (5) business days following the first business day
after the Separation Acknowledgement Date that Travelers elects to enforce such
provisions (the “Non-Competition Option”); or

 

(ii)                                  waive the provisions of Section 3(a) by a Travelers
entity notifying Employee in accordance with Section 4 no later than five (5) business
days following the 

 

5

 

first business day after the Separation
Acknowledgement Date that Travelers elects to waive the provisions of Section 3(a) or
by failing to provide Employee with notice under Section 3(c)(i) within
the period specified therein (in either case, the “Waiver Option”).

 

(d)                                 Employee hereby acknowledges that the provisions of this
Non-Competition Agreement are reasonable and necessary to protect the
legitimate interests of Travelers, including without limitation, Travelers’
trade secrets, customer and supplier relationships, goodwill and loyalty, and
that any violation of this Non-Competition Agreement by Employee would cause
substantial and irreparable harm to Travelers such that monetary damages alone
would be an inadequate remedy. 
Therefore, in the event that Employee violates any provision of this
Non-Competition Agreement, Travelers shall be entitled to (i) an
injunction (incorporating the provisions of Section 3(e)) restraining
Employee from violating or continuing to violate the provisions of this
Non-Competition Agreement, (ii) withhold payments not yet made and/or
shares of stock not yet issued, in each case, that may (assuming satisfaction
of the conditions in Section 3(g)) be subject to forfeiture and/or
recapture under Section 3(d)(iii) and (iii) forfeiture (and, if
applicable, recapture) of any amounts, benefits and awards hereunder, under
Travelers’ employee severance plans or agreements and under any individual
separation arrangement.  The foregoing
remedies shall be Travelers’ sole and exclusive remedies for a violation of
this Non-Competition Agreement.

 

(e)                                  Notwithstanding anything herein to the contrary, if Employee
breaches any of the provisions of Section 3(a), and if (and only if)
Travelers brings legal enforcement action during the Restricted Period  and (either during or after the
Restricted Period) injunctive relief is ordered by a court of competent
jurisdiction after an evidentiary hearing or there has been a final
non-appealable adjudication by a court of competent jurisdiction that Employee
has breached a provision of Section 3(a), then one day of additional time
shall be added to the restriction (and to the definition of Restricted Period)
for each day of noncompliance, up to a maximum of six (6) months, so that
Travelers is given the benefit of Employee’s compliance with the restriction
for six (6) months.

 

(f)                                    Notwithstanding anything herein to the contrary, Travelers may
seek to exercise its remedy under Section 3(d) to withhold payments
not yet made and/or shares of stock not yet issued to Employee only if a
Travelers entity shall have commenced legal enforcement action by the time
payment would have otherwise been payable.

 

(g)                                 Notwithstanding anything herein to the contrary, Travelers shall
only be entitled under Section 3(d) to the remedies of forfeiture
and/or recapture if (i) there has been a final non-appealable adjudication
by a court of competent jurisdiction that Employee has breached any provision
of this Non-Competition Agreement and (ii) a Travelers entity shall have
commenced legal enforcement action within twelve (12) months of the Termination
Date.  Employee shall pay over to
Travelers promptly following notice to Employee in accordance with Section 4
any amounts, benefits and awards that are subject to recapture as provided in
the previous sentence.  If Travelers
seeks to exercise its remedy to recapture the compensatory value received under
Section 1(a) more than three (3) years after the date hereof,
then such value shall be deemed to be $10,000.

 

6

 

(h)                                 Travelers shall be deemed to have commenced legal enforcement
action under Sections 3(e), (f) and (g) if it shall have notified
Employee in accordance with Section 4 of intent to seek enforcement
followed within twenty-one (21) days by the commencement of a formal
enforcement action.

 

SECTION 4.                                                    NOTICES.

 

Any notice required or permitted under
this Non-Competition Agreement shall be sufficient if in writing (which must be
delivered by hand or sent by overnight mail, postage prepaid and return receipt
requested) if to Employee at the most current address of Employee appearing in
the Company’s records, or if to Travelers at the following address: The Travelers Companies, Inc.,
385 Washington Street, Mail Code 515A, St. Paul, Minnesota 55102-1396, Attn:
General Counsel with a copy to: The
Travelers Companies, Inc., 385 Washington Street, Mail Code
9275-SB02W, St. Paul, Minnesota 55102-1396, Attn: Executive Vice President of
Human Resources.  Employee and Travelers
may designate a different address through written notice as provided in this
Section.  Notice shall not be effective
until actual delivery to the address of the other party in accordance with this
Section 4.

 

SECTION 5.                                                    ATTORNEYS’ FEES.

 

If litigation arises concerning the terms
and conditions of this Non-Competition Agreement, Employee, the Company and
Travelers agree to pay their own respective attorneys’ fees and costs, except
that if a court of competent jurisdiction determines in a final non-appealable
adjudication that Employee is the prevailing party, then the Company shall pay
promptly Employee’s reasonable and documented attorneys’ fees and costs
incurred in connection with the litigation.

 

SECTION 6.                                                    CONSENT TO JURISDICTION.

 

Jurisdiction for enforcement of this
Non-Competition Agreement, and for the resolution of any dispute under this
Non-Competition Agreement, shall be exclusively in the federal or state courts
in the state and county where Employee resides at the time that Travelers
commences an enforcement action.  If
requested, Employee shall reasonably promptly advise the Company’s General
Counsel of Employee’s residence during the Restricted Period.

 

SECTION 7.                                                    EMPLOYEE-AT-WILL.

 

Employee specifically recognizes and agrees
that nothing in this Non-Competition Agreement shall be deemed to change the
existing employment relationship between Employee and the Company, and that
this Non-Competition Agreement is not an employment agreement for continued
employment.

 

7

 

SECTION 8.                                                    GOVERNING LAW.

 

This Non-Competition Agreement shall be
construed and interpreted in accordance with the laws of the State of
Minnesota.

 

SECTION 9.                                                    WAIVER.

 

The waiver of a breach of any provision of
this Non-Competition Agreement shall not operate as or be construed as a waiver
of any subsequent breach of this Non-Competition Agreement.

 

SECTION 10.                                             SEVERABILITY.

 

If any provision, section or subsection of
this Non-Competition 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 Non-Competition Agreement, including any other
provision, section or subsection.  Each
provision, section, and subsection of this Non-Competition Agreement is
separable from every other provision, section and subsection and constitutes a
separate and distinct covenant.  The
parties agree that if any court rules that a restriction contained in this
Non-Competition Agreement is unenforceable as written, the parties will meet
and confer to negotiate the reformation of the provision.

 

SECTION 11.                                             SECTION 409A.

 

This Non-Competition Agreement is intended
to satisfy, or be exempt from, the requirements of sections 409A(a)(2), (3) and
(4) of the Code, and shall be construed and interpreted in a manner
consistent with such intention.

 

SECTION 12.                                             ENTIRE AGREEMENT.

 

(a)                                  This Non-Competition Agreement constitutes the entire agreement
between the parties concerning the subject matter hereof.  No modification, amendment, termination or
waiver of this Non-Competition Agreement shall be binding unless in writing and
signed by the party to be bound thereby. 
For the avoidance of any doubt, this Non-Competition Agreement does not
supersede or replace any other written agreements between Employee and the
Company or Travelers (including any written agreements accepted electronically
by Employee), including without limitation the Non-Solicitation and
Non-Disclosure Agreement, the Principles of Employment Agreement between
Employee and Travelers and any equity award agreements between Employee and
Travelers, as well as any employee agreement of Employee with non-competition
terms, if any, each of which agreements shall remain in full force and effect
in accordance with their terms.  The
parties agree that this Non-Competition Agreement will only become effective
upon the signing by all existing members of the Management Committee of a
non-competition agreement that is in the same form as this Non-Competition
Agreement no later than                     
    , 20XX.

 

8

 

(b)                                 If Employee is involuntarily removed from the Management Committee
by Travelers prior to the Separation Acknowledgement Date, this Non-Competition
Agreement shall no longer be in force and effect with respect to such Employee
(such change, however, shall not impact any non-competition agreement of
another employee).  Nothing in this
Non-Competition Agreement shall restrict Travelers from removing Employee from
the Management Committee at any time.

 

(c)                                  Parent and the Company also agree that, in the event that, prior to the Separation Acknowledgement Date,
any future member of the Management Committee (i) remains a member for 12
months after joining the Management Committee and (ii) does not execute
within such 12-month period a non-competition agreement in the same form as
this Non-Competition Agreement, as such form may have been amended consistent
with Section 12(d) (except for (1) conforming changes, technical
changes and corrections which are not more favorable to such person than as
provided in this Non-Competition Agreement as then in effect, including without
limitation updating the dates in Section 1(a), and (2) the
consideration in Section 1(a) for any future Management Committee
member’s non-competition agreement may be $10,000 in cash in lieu of restricted
stock or restricted stock units) (a “Conforming Non-Competition Agreement”),
such future Management Committee member shall be immediately removed from the
Management Committee. Such 12-month period shall instead be a one month period
for any person who was an employee of Travelers for at least six months prior
to joining the Management Committee.  After
the Separation Acknowledgement Date, Employee shall have no rights under this Section 12(c).

 

(d)                                 If, prior to the
Separation Acknowledgement Date,
the Company amends, alters, modifies or otherwise changes the terms of the
corresponding non-competition agreement (whether directly, or indirectly by any
other agreement or arrangement) for any present or future Management Committee
member such that such agreement is no longer a Conforming Non-Competition
Agreement because it is less restrictive and/or more favorable to such person
than the terms set forth in this Non-Competition Agreement, then the terms of
this Non-Competition Agreement will be deemed to be modified to reflect the
less restrictive and/or more favorable terms. 
If such circumstance arises, Travelers agrees to notify Employee in
writing within fourteen (14) days of the amendment, alteration, modification or
change of such non-competition agreement; provided, that the failure to give
such notice shall not impair the enforceability of this Non-Competition
Agreement as deemed to be amended. 
Notwithstanding the foregoing, after
another employee’s Separation Acknowledgement Date (as such term is defined in
such employee’s Conforming Non-Competition Agreement), the Company may amend, alter, modify, or otherwise change or waive, conditionally
or otherwise, any term of the non-competition agreement of such employee,
directly or indirectly, and any such amendment, alteration, modification or
change will not require the Company to modify the terms of this Non-Competition
Agreement nor will the terms of this Non-Competition Agreement be deemed to be
modified, provided that such employee’s Termination Date (as such term is defined in such employee’s Conforming
Non-Competition Agreement) is no
more than six (6) months after such employee’s Separation Acknowledgement
Date and further provided that the effective date of the amendment, alteration,
modification or change must be not prior to such employee’s Termination Date.

 

9

 

(e)                                  Travelers shall have the unilateral right to terminate this
Non-Competition Agreement and all other similar Management Committee
non-competition agreements at the same time (other than any agreement,
including this Non-Competition Agreement, in respect of which Travelers has, at
such time, exercised its non-competition option).

 

(f)                                    If there is a Change of Control, then, unless the Separation
Acknowledgement Date has occurred on or before thirty (30) days after the date
of such Change of Control, this Non-Competition Agreement shall automatically
become null and void.  For purposes of
this Non-Competition Agreement, “Change of Control” shall mean any of the
following:

 

(i)                                 members of the Board of Directors of Parent on February 2,
2010 (“Incumbent Board”) cease for any reason to constitute a majority thereof,
provided that persons subsequently becoming directors with the approval of
directors constituting at least two-thirds (2/3) of the Incumbent Board (either
by a specific vote or by approval of the proxy statement of Parent in which
such person is named as a nominee for director, without written objection to
such nomination) will be considered as members of the Incumbent Board provided, however, that no individual initially elected or
nominated as a director of Parent as a result of an actual or threatened
election contest (as described in Rule 14a-11 under the Securities
Exchange Act of 1934 (the “Act”)) (“Election Contest”) or any other actual or
threatened solicitation of proxies or consents by or on behalf of any “person” (as
such term is defined in Section 3(a)(9) of the Act) other than the
Board (“Proxy Contest”), including by reason of any agreement intended to avoid
or settle any Election Contest or Proxy Contest, shall be deemed to be a member
of the Incumbent Board, or

 

(ii)                                  any person as defined in the Act, other than Parent, a subsidiary
of Parent, any employee benefit plan (or related trust) sponsored or maintained
by Parent or any subsidiary of Parent, any employee or any group of persons
including an employee (or any entity controlled by an employee or any group of
persons including an employee) or an underwriter temporarily holding securities
pursuant to an offering of such securities, is or becomes the beneficial owner,
directly or indirectly, of 30% or more of Parent’s voting securities, or

 

(iii)                               the consummation of a merger, consolidation, statutory share
exchange or similar form of corporate transaction involving Parent, or any of
its subsidiaries that requires the approval of Parent’s stockholders, whether
for such transaction or the issuance of securities in the transaction, or the
sale or other disposition of all or substantially all of Travelers’ assets to
an unaffiliated entity, unless immediately after such corporate transaction or
sale, (A) more than 60% of the total voting securities of the corporation
resulting from such corporate transaction or sale (or if applicable, the
ultimate parent corporation that directly or indirectly has beneficial
ownership of 100% of the voting securities eligible to elect directors of the
surviving company) is represented by voting securities of Parent that were
outstanding immediately prior to such corporate transaction or sale (or by
shares into which such Parent voting securities were converted pursuant to such
corporate transaction or sale) and such voting power among the holders thereof
is in substantially the same proportion as the voting power of such Parent
voting 

 

10

 

securities
among the holders thereof immediately prior to the corporate transaction or
sale, (B) no person (other than any employee benefit plan (or related
trust) sponsored or maintained by the surviving company or the parent company)
is or becomes the beneficial owner, directly or indirectly, of 30% or more of
the total voting power of the outstanding voting securities eligible to elect
directors of the parent company (or, if there is no parent company, the
surviving company) and (C) at least a majority of the members of the board
of directors of the parent company (or, if there is no parent company, the
surviving company) following the consummation of the corporate transaction or
sale were members of the Incumbent Board at the time of the Board’s approval of
the execution of the initial agreement providing for such corporate transaction
or sale (any corporate transaction or sale which satisfies all of the criteria
specified in (A) (B) and (C) above shall be deemed to be a “Non-Qualifying
Transaction”); or

 

(iv) Parent’s shareholders approve a
plan of complete liquidation or dissolution of Parent.

 

Notwithstanding the foregoing, a Change of
Control shall not be deemed to occur solely because any person acquires
beneficial ownership of more than 30% of Parent’s voting securities as a result
of the acquisition of Parent voting securities by Travelers which reduces the
number of Parent voting securities outstanding; provided
that if after such acquisition by Travelers such person becomes the
beneficial owner of additional Parent voting securities that increases the
percentage of outstanding Parent voting securities beneficially owned by such
person, a Change of Control shall then occur.

 

**[Signature Page Follows]**

 

11

 

IN WITNESS WHEREOF, the Company, Parent
and Employee have duly executed this Non-Competition Agreement as of the day
and year first written above.

 

 

	
  EMPLOYEE

  	
   

  	
  THE TRAVELERS INDEMNITY COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE TRAVELERS COMPANIES, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

12

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