Document:

Exhibit
10.26

 

 

CURRENT DIRECTOR
COMPENSATION PROGRAM

As of February 4,
2009

 

1.               Annual
Retainer:  $90,000 - Paid in
quarterly installments in arrears at the end of each quarter in cash or, if the
director so elects, in deferred stock units to be distributed at a later date
designated by the director.

 

2.               Annual
Deferred Stock Award:  $145,000 –
Awarded to incumbent directors, who are nominated for re-election at the next
shareholders’ meeting in May, on the day the Compensation Committee grants
equity awards to management in early February on the closing price per
share of this Corporation’s common stock on the date the Compensation Committee
approves the awards in the form of deferred stock units (with vesting of such
deferred stock units to occur on the first anniversary of the annual meeting
occurring in the year of grant) and which are distributed either in a lump sum six
months after termination of service as a director or, if the director so
elects, in annual installments beginning at least six months following
termination of service as a director.

 

3.               Committee
Chair Fees:  Currently, the annual
amount of committee chair fees, which are paid quarterly in arrears, are as
follows:  Audit (currently John Dasburg) -
$25,000, Compensation (currently Larry Graev) - $20,000, Nominating and Governance
(currently Glen Nelson) - $20,000, Investment and Capital Markets (currently
Blythe McGarvie) - $20,000, Risk (currently Tom Hodgson) - $20,000 and Advisory
Committee for Public Policy (currently Janet Dolan) - $5,000.

 

4.               Lead
Director:   Effective November 2,
2006, the Board established the position of Lead Director of the Board and agreed
that the Lead Director (currently John Dasburg) will be paid $25,000 per year
(payable in arrears in quarterly installments as of the last business day of
each quarter).Exhibit 10.27

 

THE
TRAVELERS COMPANIES, INC.

385 Washington Street

St. Paul, Minnesota 55102

 

As of December 19, 2008

 

Jay S. Fishman

1200 Mount Curve Avenue

Minneapolis, Minnesota 55403

 

Dear Jay:

 

I am writing this letter on behalf of the
Board of Directors (the “Board”)
of The Travelers Companies, Inc. (the “Company”)
to confirm the terms and conditions of your employment with the Company.

 

1.            
Term of Employment.  Your employment under this Letter Agreement
commenced as of the effective date (the “Effective
Date”) of the consummation of the combination transaction
contemplated by the Agreement of Plan and Merger effective as of November 16,
2003 among The St. Paul Companies, Inc. (“The St. Paul”), Travelers Property Casualty Corp. and Adams Acquisition
Corp. (as amended) (such transaction, the “Merger”)
and, subject to termination as provided in Section 9, will end on the
fifth anniversary of the Effective Date; provided
that on the fourth and each subsequent anniversary of the Effective Date, the
term of your employment will automatically be extended by an additional year
unless the Company or you give the other party written notice, at least 30 days
prior to the applicable anniversary of the Effective Date, that you do not or
it does not want the term to be so extended.  Such employment period, as
may be extended, will hereinafter be referred to as the “Term”. 
The portion of the Term after the date of this letter is referred to as
the “Remaining Term”.

 

2.            
Title and Duties.

 

(a)   Position. 
During the Remaining Term, you will serve as Chief Executive Officer of the
Company, and you will also serve as Chairman of the Board of the Company. 
You will have such duties and responsibilities and power and authority as those
normally associated with such position or positions, as applicable, in public
companies of a similar stature, plus any additional duties, responsibilities
and/or power and authority assigned to you by the Board which are consistent
with such position(s).  During the Remaining Term, you will report solely
and directly to the Board, and all other executives will report to you.

 

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(b)   Board and Committees. 
During the Remaining Term, the Company will use its best efforts to cause you
to be nominated for and elected to the Board, as well as to the Executive
Committee of the Board, including any successor committee performing a similar
function (the “Executive Committee”). 
During the Remaining Term, you will solely preside at such meetings of the
Board and of the Executive Committee.

 

(c)   Outside Interests. 
Nothing contained in this Letter Agreement shall preclude you from (i) serving
on the board of directors of any business corporation; (ii) serving on the
board of or working for any charitable or community organization or (iii) pursuing
your personal financial and legal affairs, so long as the foregoing activities,
individually or collectively, do not materially interfere with the performance
of your duties hereunder and do not violate the provisions of Section 11(b) hereof.

 

3.            
Base Salary.  During the Remaining Term, the Company will pay you a
minimum base salary at the annual rate of $1,000,000 (the “Base Salary”), payable in accordance with
the Company’s regular payroll practices.  The Compensation Committee (the “Committee”) of the Board will review your
Base Salary annually and may, in its sole discretion, increase the Base Salary
based on your performance and the Company’s performance.

 

4.            
Bonus.  During the Remaining Term, you will be eligible to receive
an annual bonus (the “Annual Bonus”)
pursuant to the Company’s annual incentive plan.  The performance
objectives for your Annual Bonus will be determined by the Committee in
consultation with you and will be consistent with performance objectives set
for other senior executives of the Company.

 

5.            
Annual Long-Term Incentive Grant.  In each calendar year of the
Remaining Term, you will receive a long-term incentive grant, consisting of
stock options, restricted stock, other equity-based awards, or a combination
thereof, as determined by the Committee, (the “Annual Equity Grant”) with a then present value equal to not
less than $6.25 million (such value to be based on a Black-Scholes valuation,
in the case of options and similar awards, and on a valuation method mutually
acceptable to you and the Committee, in the case of other awards).  Any
annual cash incentive earned pursuant to Section 4 hereof and paid in the
form of equity-based awards shall not be considered in valuing your entitlement
under this Section 5.  Subject to the specific terms of this Letter
Agreement, the terms and conditions of your Annual Equity Grant will provide
for four (4) year vesting in equal installments and will otherwise be
determined in accordance with the Company’s 2004 Stock Incentive Plan as it
exists on the date hereof or as amended in any respect that is not materially
unfavorable to you or in accordance with any successor plan to the extent not
materially less favorable to you, and the Company’s policy governing similar
awards to other senior executives as in effect from time to time.  Any
portion of an Annual Equity Grant that is not fully vested will become fully
vested upon termination of your employment due to death or Disability (as
defined below in Section 8), or in the event you terminate your employment
for Good Reason (as defined below in Section 8) or in the event you are
terminated by the Company without Cause (as defined below in Section 8).

 

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6.            
Prior Stock Option Grants.  You affirm and acknowledge that (a) so
long as you remain employed as Chief Executive Officer by the Company, and so
long as you also remain employed as Chairman of the Board of the Company, you
would not intend to exercise any of the stock options that were granted to you
by The St. Paul before 2004 until after they would have been exercisable in
accordance with their terms and vesting schedules in effect on November 16,
2003 and (b) the stock option granted to you by The St. Paul on February 2,
2004 will not become exercisable in connection with the Merger, notwithstanding
the terms of the Letter Agreement dated as of October 11, 2001 between The
St. Paul and you (the “Old Letter Agreement”),
and will, instead, become exercisable in accordance with the terms contained in
the term sheet governing such stock option.

 

7.            
Other Benefits During the Remaining Term.

 

(a)   Employee Benefits. 
You will be eligible to participate in the employee benefit plans, programs and
arrangements maintained by the Company, on terms and conditions that are no
less favorable than those applicable to any other senior executive of the
Company.  The Company acknowledges that in connection with your
commencement of employment with The St. Paul pursuant to the Old Letter
Agreement, you received four (4) years of service credit as of the
effective date of such commencement under all such plans, programs and
arrangements (except with respect to any tax-qualified or stock-based plans,
programs and arrangements) and that The St. Paul waived any waiting periods or
similar requirements for all medical, dental and other health plans.

 

(b)   Vacation. 
You will be entitled to four (4) weeks paid vacation per calendar year in
accordance with the Company’s vacation policy as in effect from time to time.

 

(c)   Legal and Other Fees. 
The Company will reimburse you for reasonable legal and other professional and
out-of-pocket expenses incurred by you in connection with the preparation and
negotiation of this Letter Agreement.

 

(d)   Transportation. 
You will be required for security purposes to use the Company aircraft for all
business travel and personal travel; provided,
however, that starting January 1, 2007 your use of the aircraft
for personal travel (which in no event will be deemed to include the use of the
aircraft as described in the third sentence of this Section 7(d)) will be
on the terms set forth in the Time Sharing Agreement in Exhibit C
attached.  The Company will provide you with other transportation on a
basis consistent with that customarily provided to executives of a similar
stature and will gross you up for any income taxes incurred by you as a result
of the provision of such other transportation.  The Company will also
gross you up for any income taxes incurred by you as a result of any imputation
of income in connection with the use of the aircraft for business travel
between the New Jersey region and St. Paul, Minnesota, Baltimore,

 

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Maryland and
Hartford, Connecticut and of Company-arranged ground transportation for
business travel when you are on the East Coast. 
Any amount payable to you as a tax gross up under this Section 7(d) shall
be paid no later than December 31 of the calendar year following the
calendar year in which you remit the corresponding taxes.

 

(e)   Reimbursement. 
The Company will reimburse you for all reasonable expenses and disbursements in
carrying out your duties and responsibilities under this Letter Agreement in
accordance with Company policy for senior executives as in effect from time to
time.

 

(f)   Professional Fees.  The Company will reimburse you for all
reasonable financial planning and tax preparation expenses incurred during the
Term up to $25,000 annually.

 

8.            
Termination of Employment.

 

(a)   Resignation for Good Reason or Termination Without Cause.  If you terminate your employment for Good
Reason or you are terminated by the Company without Cause, you will receive:

 

(i)    immediately
upon the effectiveness of any such termination, a lump-sum cash payment equal
to any earned but unpaid Base Salary or other amounts (including reimbursable
expenses any vested amounts or benefits owing under or in accordance with the
Company’s otherwise applicable employee benefit plans or programs, including
retirement plans and programs) accrued or owing through the date of
termination; and

 

(ii)   on
the first day of the seventh month following the date of your “separation from
service” within the meaning of section 409A(a)(2)(A)(i) of the Internal
Revenue Code of 1986, as amended (the “Code”) and the
regulations and guidance thereunder, a lump-sum cash payment equal to three (3) times
the sum of your (A) then Base Salary (or, if such termination occurs
following a change in control as defined in Exhibit B to this Letter
Agreement occurring after December 13, 2006 (a “Change in Control”), the
highest Base Salary in the 12 months preceding such termination) and (B) the greatest of (x) 150% of such Base
Salary, (y) Annual Bonus for the immediately preceding year and (z) the
greater of Annual Bonus or 150% of Base Salary for the year immediately
preceding a Change in Control if such termination occurs following a Change in
Control; provided that as of the date of the
payment you have executed a release substantially in the form attached hereto
as Exhibit A, all applicable rescission periods provided by law for releases of claims have expired and you
have not rescinded the release.  The
lump-sum payment under this paragraph (ii) also shall

 

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include interest for the period from your termination of employment to
the scheduled date of payment at an annual rate equal to the Treasury Bill rate
(26 week maturity) as reported by the U.S. Department of Treasury for the day
of your termination of employment.

 

In addition to the foregoing lump-sum payment:

 

(x)                    the
Company will continue your participation in the Company’s medical and dental
plans on the same terms as in effect prior to such termination (or, if your
termination of employment occurs within the two-year period following a Change
in Control, as in effect prior to such Change in Control, if more favorable), until
the expiration of the 18-month period commencing on the date of your “separation
from service” within the meaning of section 409A(a)(2)(A)(i) of the Code,
or, if earlier, the date you would no longer be entitled to continuation
coverage under section 4980B of the Code (COBRA).  Thereafter, the Company will provide you
substantially comparable medical and dental coverage on an insured basis (which
may mean continuing on the Company’s medical or dental plan if such plans are
then insured), but only until the earlier of three years following your
termination of employment, or the date on which you become covered by a similar
medical or dental plan, as the case may be, maintained by any subsequent
employer.  If the Company is unable to
obtain insurance on a commercially acceptable basis, the Company instead will
offer continued coverage to you for the period specified above under its
medical and dental plans on an “access-only” basis, meaning that you will pay
the full cost of continued coverage at the rate then established by the Company
for COBRA.   The Company will reimburse
you for the amount of any premium payments you make to purchase access-only
coverage for the period specified above. 
Such reimbursements shall be made promptly, but in no event later than
the last day of the calendar year following the year in which you make the
premium payment, and the amount reimbursed in one year will not affect the
amount eligible for reimbursement in any other year.  If your termination of employment occurs
during the two-year period following a Change in Control, the Company also will
continue your participation in the Company’s accident, disability (other than
long-term disability) and group life insurance plans for you and your
dependents on the same terms as in effect prior to such termination (or prior
to such Change in Control, if more favorable), or if you are ineligible to
continue to participate under the terms thereof, in substitute arrangements
adopted by the Company providing identical benefits on the same after-tax basis
as if such participation had continued, but only until the earlier of three
years following the date of your termination of employment or the date on which
you become eligible for similar accident, disability or life insurance coverage
under a plan maintained by a subsequent employer.

 

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(y)           all
unvested stock options, restricted stock and other equity awards then held by
you will fully vest and become exercisable, if applicable, as of the effective
date of such termination.

 

(z)           with
respect to options and any similar equity awards (i.e. containing or requiring an exercise or similar action)
held by you at the time of such termination, such awards will remain
exercisable (as if you had remained employed with the Company throughout such
term) for the lesser of one (1) year and the remainder of the full term of
such options.

 

(b)   Termination Other
than for Good Reason or for Cause.  If you terminate your
employment other than for Good Reason or if your employment is terminated by
the Company for Cause, you will receive no further payments, compensation or
benefits under this Letter Agreement, except you will be eligible to receive,
immediately upon the effectiveness of such termination, amounts (including
reimbursable expenses and any vested amounts or benefits owing under or in
accordance with the Company’s otherwise applicable employee benefit plans or
programs, including retirement plans and programs) accrued or owing prior to
the effectiveness of your termination and such compensation or benefits that
have been earned and will become payable without regard to future
services.  In addition, if your employment is terminated by you other than
for Good Reason, any vested stock options then outstanding will remain
exercisable for thirty (30) days after such termination (although no further
stock options will vest during such additional thirty (30) day period); provided that an option will not otherwise
be exercisable beyond the stated term of such stock option.

 

(c)   Death or Disability.  In the event your employment terminates by
reason of death, or in the event of your Disability (as defined below), you or
your beneficiaries will receive (i) a pro rata
portion of 250% of your Base Salary for the year, calculated by multiplying
250% of such Base Salary by a fraction, the numerator of which is the number of
days in the year elapsed prior to such death or Disability and the denominator
of which is 365, and (ii) all other unpaid amounts (including reimbursable
expenses and any vested amounts or benefits owing under or in accordance with
the Company’s otherwise applicable employee benefit plans or programs,
including retirement plans and programs) accrued or owing prior to the date of
such death or Disability.  In addition,
all unvested stock options, restricted stock and other stock awards will
immediately vest and, along with previously vested stock options, will remain
exercisable (as if you had remained in your initial position with the Company
throughout such term) for (x) three (3) years, in the case of your
Disability and (y) one (1) year, in the case of termination due to
death (provided that, a stock option will not otherwise be exercisable beyond
the stated term of such stock option).

 

6

 

(d)   Retirement. 
In addition to benefits to which you may be entitled pursuant to this Letter
Agreement, your entitlements in connection with a termination of your
employment pursuant to your retirement under the Company’s otherwise applicable
employee benefit and retirement plans and programs, including without
limitation under the Company’s stock option and equity award plans, shall be
determined in accordance with such applicable employee benefit and retirement
plans and programs and stock option and equity award plans, as applicable,
including with respect to the vesting of and exercise period of stock options
and awards, and the characterization of your termination of employment for
purposes of this Letter Agreement shall not affect any benefit to which you may
be entitled upon “retirement” meeting the conditions set forth in such plan or
program and impacted by this Agreement.

 

For purposes of this Letter Agreement, “Cause” means (i) your willful and continued failure to
substantially perform your duties hereunder; (ii) your conviction of, or
plea of guilty or nolo contendere
to, a felony or other crime involving moral turpitude; or (iii) your
engagement in any malfeasance or fraud or dishonesty of a substantial nature in
connection with your position with the Company or other willful act that
materially damages the reputation of the Company; provided, however, no such act, omission or event will be
treated as “Cause” under this Letter Agreement unless (A) you have been
provided a detailed, written statement of the basis for the Company’s belief
that such act, omission or event constitutes “Cause” and an opportunity to meet
with the Board (together with your counsel if you choose to have your counsel
present at such meeting) after you have had a reasonable period in which to
review such statement and if the allegation is made under clause (i) or (iii) above,
have had at least a thirty (30) day period to take corrective action and (B) the
Board after such meeting (if you meet with the Board) and after the end of such
thirty (30) day correction period determines reasonably and in good faith and
by the affirmative vote of at least two-thirds (2/3) of the members of the
Board then in office at a meeting called and held for such purpose that “Cause”
continues to exist under this Letter Agreement.  For purposes of this
paragraph, (X) no act or failure to act will be considered “willful” unless it is done, or omitted to
be done, in bad faith and without reasonable belief that the action was in the
best interest of the Company and (Y) it shall be understood that poor
Company performance, in and of itself, shall not constitute Cause under this
paragraph in the absence of evidence of the conduct specified above on your
part.

 

For purposes of the Letter Agreement, “Good Reason” means (i) the Company reduces your Base
Salary, reduces the value of your Annual Equity Grant without your express
written consent, or sets your Annual Bonus performance objectives in a manner
that is inconsistent with the performance objectives set for other senior
executives of the Company (or, following a Change in Control, otherwise
materially and adversely changes the formula for your annual target bonus
opportunity), (ii) you cease to be Chairman of the Board of the Company or
a member of the Executive Committee (unless removal from the Executive
Committee is due to a change in law or regulation or is in accordance with
widely accepted corporate governance practices), (iii) the Company reduces
the scope of your duties, responsibilities or authority without your express
written consent (it being understood, without limitation, that such a

 

7

 

reduction will be deemed to have occurred in all events if, following a
Change in Control, (X) the Company or any entity that may have succeeded
it ceases to have a class of voting equity securities registered under Section 12
of the Securities Exchange Act of 1934 or (Y) a person or group beneficially
owns, as such terms are used for purposes of section 13(d) of such act,
more than 40% of the voting power of the voting securities of the Company); (iv) the
Company requires you to report to anyone other than the Board or appoints any
other person to a position of equal or higher authority or having a direct
reporting responsibility to the Board (other than the Company’s internal
auditors); (v) the Company breaches any other provision of this Letter
Agreement; (vi) following a Change in Control, (Q) the Company
requires you to (I) be based anywhere more than thirty (30) miles from the
office where you are located at the time of the Change in Control or (II) travel
on Company business to an extent substantially greater than your travel
obligations immediately prior to such Change in Control, or (R) the
Company fails to continue in effect any employee benefit plan, compensation
plan, welfare benefit plan or fringe benefit plan in which you are
participating immediately prior to such Change in Control, or takes any action
which would materially adversely affect your participation in or reduce your
benefits under any such plan, unless you are permitted to participate in plans
providing you with substantially equivalent benefits (at substantially
equivalent cost with respect to welfare benefit plans), or (vii) the
Company elects not to extend the Term pursuant to Section 1 prior to the
time when you shall have attained age 65; provided,
however, that if you voluntarily consent to any reduction or change
described above in lieu of exercising your right to resign for Good Reason and
deliver such consent to the Company in writing then such reduction or change
will not constitute “Good Reason” hereunder, but you will have the right to
resign for Good Reason under this Letter Agreement as a result of any
subsequent reduction or change described above; and provided further that an isolated, insubstantial and
inadvertent action covered by clause (vi) (Q) or (R) taken in
good faith and which is remedied by the Company within thirty (30) days after
receipt of written notice thereof given by you to the Company’s Executive Vice
President, Human Resources shall not constitute Good Reason.

 

For purposes of this Letter Agreement, “Disability”
will mean an inability to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment that can be
expected to result in death or can be expected to last for a continuous period
of not less than twelve (12) months.  For
purposes of determining whether you are able to engage in any substantial
gainful activity, the Company will refer to the comparable standards then in
effect under its long-term disability plan (as of the date of this letter, you
would be considered disabled under such standards if you are unable to earn
more than 80% of your pre-disability earnings at any gainful occupation for
which you are reasonably qualified taking into account your training, education
and experience).

 

8

 

9.            
Indemnification.

 

(a)   The Company will indemnify and make permitted advances
to you to the fullest extent permitted by applicable law, if you are made or
threatened to be made a party to a proceeding by reason of your being or having
been an officer, director or employee of the Company or any of its subsidiaries
or affiliates or your having served on any other enterprise as a director,
officer or employee at the request of the Company.  In addition, the
Company will maintain insurance, at its expense, to protect you against any
such expense, liability or loss to which you would be entitled to
indemnification or reimbursement under the foregoing sentence.

 

(b)   The Company will indemnify you and hold you harmless
from and against any and all losses, costs, expenses, liabilities, penalties,
claims and other damages incurred or resulting from any claim brought by your
immediately prior employer, Citigroup Inc. (or an affiliate thereof); provided, however, that you promptly
notify the Company in writing of the commencement of any action or other
assertion of a claim.  The Company will assume the defense of any such
action or claim with counsel selected by it and reasonably acceptable to you
(the fees and expenses of such counsel will be paid by the Company).  You
will have the right to participate in such defense and to employ counsel
reasonably acceptable to the Company at the Company’s expense.  You agree
to cooperate with the Company in the defense of any such action or claim,
including providing it with records and information that are reasonably
relevant thereto.  You agree not to admit any liability with respect to,
or settle, compromise or discharge such action or claim without the Company’s
written consent (which will not be unreasonably withheld).

 

10.            
Change in Control.

 

(a)   Tax Indemnity.

 

(i)           If the
Company or the Company’s independent accountants determine that any payments
and benefits called for under this Letter Agreement together with any other
payments and benefits made available to you by the Company or an affiliate of
the Company will result in you being subject to an excise tax under § 4999
of the Code or if such an excise tax is assessed against you as a result of any
such payments and other benefits, the Company will make a Gross Up Payment (as
defined below) to or on behalf of you as and when any such determination or
assessment is made; provided you
take such action (other than waiving your right to any payments or benefits) as
the Company reasonably requests under the circumstances to mitigate or
challenge such tax.  Any Gross Up Payment
shall be paid to you no later than December 31 of the calendar year
following the calendar year in which you remit the corresponding taxes.

 

9

 

(ii)        
Any determinations under this Section 10 will be made in accordance with
§ 280G of the Code and any applicable related regulations (whether
proposed, temporary or final) and any related Internal Revenue Service rulings
and any related case law.  If the Company reasonably requests that you
take action to avoid assessment of, or to mitigate or challenge, any such tax
or assessment, including restructuring your right to receive any payments or
benefits under this Letter Agreement (other than under this Section 10),
you agree to consider such request (but in no event to waive or limit your
right to any payments or benefits in a manner that would not be neutral to you
from a financial point of view), and in connection with any such consideration,
the Company will provide you with such information and such expert advice and
assistance from the Company’s independent accountants, lawyers and other
advisors as you may reasonably request and will pay for all expenses incurred
in effecting your compliance with such request and any related taxes, fines,
penalties, interest and other assessments.

 

(iii)        
Nothing in this Section 10 is intended to violate the Sarbanes-Oxley Act
and to the extent that any advance or payment obligation hereunder would do so,
such obligation shall be modified so as to make the advance a nonrefundable
payment to you and the payment obligation null and void.

 

(iv)        
The term “Gross Up Payment” for
purposes of this Section 10 will mean a payment to or on behalf of you which
will be sufficient to pay (A) any excise tax described in this Section 10
in full, (B) any interest or penalties assessed by the Internal Revenue Service
on you which are related to the payment of such excise tax and (C) any
federal, state and local income tax and social security and other employment
tax on the payment made to pay such excise tax and any related interest or
penalties and on any payments made to avoid assessment of, or mitigate or
challenge, the payment of such tax as well as any additional taxes on such
payments.

 

(v)        
Finally, you and the Company acknowledge and agree that a Gross Up Payment is
intended to put you in the same after-tax position which you would have been in
if there was no excise tax under § 4999 of the Code on any of your
payments or benefits described in this Section 10.  Therefore, you
agree to return to the Company the excess of any Gross Up Payment made to you
over the payment which would have been sufficient to put you in the same
after-tax position which you would have been in if there was no excise tax
under § 4999 of the Code on any of your payments or benefits described in
this Section 10, and the Company agrees that any such

 

10

 

return on one
date will not alter the Company’s obligation to make one, or more than one,
additional Gross Up Payment at any later date to the extent necessary to put
you in the same after-tax position which you would have been in if there was no
excise tax under § 4999 of the Code on any of your payments or benefits
described in this Section 10.

 

The Company
affirms and acknowledges that any payments and benefits that you receive in
connection with the Merger will be covered by this Section 10.

 

(b)  
Continued Effect.  This Section 10
will continue in effect until you agree that all of the Company’s obligations
to you under this Section 10 have been satisfied in full or a court of
competent jurisdiction makes a final determination that the Company has no
further obligations to you under this Section 10, whichever comes first.

 

11.            
Covenants.  In exchange for the remuneration outlined above, in
addition to providing service to the Company as set forth in this Letter
Agreement, you agree to the following covenants:

 

(a)  
Confidentiality.  You
acknowledge that during your employment, you will occupy a position of trust
and confidence.  Accordingly, you agree that following any termination of
your employment, you will keep confidential any trade secrets and confidential
or proprietary information of the Company which are now known to you or which
hereafter may become known to you as a result of your employment or association
with the Company and will not at any time directly or indirectly disclose any
such information to any person, firm or corporation, or use the same in any way
other than in connection with the business of the Company during, and at all
times after, the termination of your employment.  For purposes of this
Letter Agreement, “trade secrets and
confidential or proprietary information” means information unique to
the Company which has a significant business purpose and is not known or
generally available from sources outside the Company or typical of industry
practice, but will not include any of the foregoing (i) that becomes a
matter of public record or is published in a newspaper, magazine or other
periodical available to the general public, other than as a result of any act
or omission of you or (ii) that is required to be disclosed by any law,
regulation or order of any court or regulatory commission, department or
agency; provided that you give
prompt notice of such requirement to the Company to enable the Company to seek
an appropriate protective order or confidential treatment.

 

(b)  
Non-Competition.  You
further covenant that during the Term and for the three (3) year period
(the “Restricted Period”)
following termination of your employment for Cause or following your
termination of employment without Good Reason, you will not, for yourself or on
behalf of any other person, partnership, company or corporation, directly or
indirectly, acquire any financial or beneficial interest in (except

 

11

 

as provided in
the next sentence), be employed by, or own, manage, operate or control any
entity which is primarily engaged in the property and casualty insurance
business in the United States.  Notwithstanding the preceding sentence,
you will not be prohibited from owning less than five percent (5%) of any publicly
traded corporation, whether or not such corporation is in competition with the
Company.

 

(c)  
Non-Solicitation of Employees. 
You further covenant that during the Term and (x) during the Restricted
Period following termination of your employment by the Company for Cause or by
you without Good Reason, or (y) for the one (1) year period following
the termination of your employment for any other reason, you will not, directly
or indirectly, hire, or cause to be hired by an employer with whom you may
ultimately become associated, any senior executive of the Company at the time
of termination of your employment with the Company (defined for such purposes
to include executives that report directly to you or that report directly to
such executives that report directly to you).

 

(d)  
Equitable Relief and Other Remedies. 
You acknowledge and agree that the Company’s remedies at law for a breach or
threatened breach of any of the provisions of this Section 11 would be
inadequate and, in recognition of this fact, you agree that, in the event of
such a breach or threatened breach, in addition to any remedies at law, the
Company, without posting any bond, will be entitled to obtain equitable relief
in the form of specific performance, temporary restraining order, a temporary
or permanent injunction or any other equitable remedy which may then be
available.

 

(e)  
Reformation.  If it is
determined by a court of competent jurisdiction in any state that any
restriction in this Section 11 is excessive in duration or scope or is unreasonable
or unenforceable under the law of that state, it is the intention of the
parties that such restriction may be modified or amended by the court to render
it enforceable to the maximum extent permitted by the law of that state.

 

(f)  
Survival of Provisions. 
Without effect as to the survival of other provisions of this Letter Agreement
intended to survive the termination or expiration of your employment, the
obligations contained in this Section 11 will survive the termination or
expiration of your employment with the Company and will be fully enforceable
thereafter.

 

12.            
Coordination.  With regard to the equity grants, payments and
benefits described in this Letter Agreement (the “Contract Rights”), the provisions of this Letter Agreement, to
the extent that they are more favorable to you, will control over any
provisions to the contrary in any plan, program, or equity grant applicable to
you.  The Company will not impose any restrictions not contained in this
Letter Agreement on the Contract Rights, and will not condition any future
equity grants, payments or benefits not contemplated by this Letter

 

12

 

Agreement upon
your agreement to any additional restrictions on the Contract Rights. 
However, nothing will limit the Company’s discretion to include any new or
different terms, conditions or restrictions in any future equity grant, payment
or benefit to you not contemplated by this Letter Agreement.

 

13.            
Representations.  By signing this Letter Agreement where indicated
below, you represent that, except as previously disclosed to the Company, are
not subject to any employment agreement or non-competition agreement that could
subject the Company to any future liability or obligation to any third party as
a result of the execution of this Letter Agreement and your appointment to the
positions which the Company described above.

 

14.            
Miscellaneous Provisions.

 

(a)  
This Letter Agreement may not be amended or terminated without the prior
written consent of you and the Company.

 

(b)  
This Letter Agreement may be executed in any number of counterparts which
together will constitute but one agreement.

 

(c)  
This Letter Agreement will be binding on and inure to the benefit of our
respective successors and, in your case, your heirs and other legal
representatives.  If you should die while any amount would still be
payable to you hereunder had you continued to live, all such amounts, unless
otherwise provided herein, will be paid in accordance with the terms of this
Letter Agreement to your devisee, legatee or other designee or, if there is no
such designee, to your estate.  The rights and obligations described in
this Letter Agreement may not be assigned by either party without the prior
written consent of the other party.

 

(d)  
All disputes arising under or related to this Letter Agreement will be settled
by arbitration under the Commercial Arbitration Rules of the American
Arbitration Association then in effect, such arbitration to be held in
Minneapolis, Minnesota, as the sole and exclusive remedy of either party. 
Any judgment on the award rendered by such arbitration may be entered in any
court having jurisdiction over such matters.  All costs and expenses of such
arbitration, including your reasonable costs and expenses, will be borne by the
Company.

 

(e)  
All notices under this Letter Agreement will be in writing and will be deemed
effective when delivered in person, or five (5) days after deposit thereof
in the U.S. mail, postage prepaid, for delivery as registered or certified
mail, addressed to the respective party at the address set forth below or to
such other address as may hereafter be designated by like notice.  Unless
otherwise notified as set forth above, notice will be sent to each party as
follows:

 

13

 

You, to:

 

The address
listed above or such other address as is maintained in the Company’s records

 

The Company,
to:

 

The Travelers
Companies, Inc.

385 Washington Street

St. Paul, Minnesota 55102

Attention: 
General Counsel

 

In lieu of
personal notice or notice or notice by deposit in the U.S. mail, a party may
give notice by confirmed telegram, telex or fax, which will be effective upon
receipt.

 

(f)  
This Letter Agreement will be governed by and construed and entered in
accordance with the laws of the State of Minnesota without reference to rules relating
to conflict of laws.

 

(g)  
This Letter Agreement supersedes the Old Letter Agreement and the prior Letter
Agreement dated April 1, 2004 (as amended on November 5, 2004 and December 13,
2006).  This Letter Agreement also supersedes any inconsistent provisions
of any plan or arrangement that would otherwise be applicable to you to the
extent such provisions would limit any rights granted to you hereunder or
expand any restrictions imposed on you hereby.

 

(h)  
In no event shall you be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to you under any of the provisions
of this Letter Agreement, and, except as set forth in Section 8(a)(x),
such amounts shall not be reduced whether or not you obtain other
employment.  Following a Change in Control, the Company’s obligation to
make the payments provided for in this Letter Agreement and otherwise to
perform its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Company may have against you or others.

 

(i)  
The Company agrees to pay as incurred all legal fees and expenses which you may
reasonably incur as a result of any contest pursued or defended against in good
faith by you in respect of a dispute or controversy hereunder arising following
a Change in Control, plus in each case interest on any delayed payment at the
applicable Federal rate provided for in Section 7872(f)(2)(A) of the
Code.  Any dispute or controversy so arising under or in connection with
this Letter Agreement shall be settled exclusively by arbitration in the city
nearest to the place of your residence in which a United States District Court
is situated by three arbitrators in accordance with the rules of the
American

 

14

 

Arbitration
Association then in effect.  Judgment may be entered on the arbitrators’
award in any court having jurisdiction; provided, however, that you shall be
entitled to seek specific performance of your right to be paid under this
Letter Agreement during the pendency of any dispute or controversy arising
under or in connection with this Letter Agreement.  The Company shall bear
all costs and expenses arising in connection with any arbitration proceeding
pursuant to this Section 14(i).

 

(j)  
Expenses eligible for reimbursement under this Employment Agreement shall be
reimbursed as soon as administratively practicable (generally within sixty (60)
days) after the expense has been incurred and the request for reimbursement is
made; except that, if necessary for administrative reasons, the Company may elect
to delay reimbursement, but not later than the last day of the calendar year
after the calendar year in which the expense is incurred.  Expenses eligible for reimbursement, and the
in-kind benefits provided, under this Agreement in any given calendar year will
not affect the expenses eligible for reimbursement or in-kind benefits provided
during any other calendar year.

 

(k)  
Amounts payable under the Employment Agreement are intended to satisfy, or be
exempt from, the requirements of sections 409A(a)(2), (3) and (4) of
the Code, including future and current guidance and regulations interpreting
such provisions, and should be interpreted accordingly.

 

(l)  
This amendment may be executed in any number of counterparts which together
will constitute but one agreement.

 

(m)  
This amendment will be governed by and construed and entered into in accordance
with the laws of the State of Minnesota without reference to rules relating
to conflict of laws.

 

(n)  
Except as amended hereby, the Employment Agreement shall continue in full force
and effect in accordance with its terms.

 

15

 

This Letter Agreement is intended to be a binding obligation upon both
the Company and yourself.  If this Letter Agreement correctly reflects
your understanding, please sign and return one copy to John Clifford for the
Company’s records.

 

 

	
   

  	
  THE TRAVELERS COMPANIES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lawrence G. Graev

  
	
   

  	
   

  	
  Name: Lawrence G. Graev

  
	
   

  	
   

  	
  Title: Director

  

 

The above Letter Agreement correctly reflects our understanding, and I
hereby confirm my agreement to the same.

 

 

	
  Dated as of December 19, 2008

  	
  /s/ Jay S. Fishman

  
	
   

  	
  Jay S. Fishman

  

 

16

 

Exhibit A

 

FULL AND COMPLETE RELEASE

 

I, Jay S. Fishman, in consideration for the payment of the severance
described in my Letter Agreement dated November       ,
2008, for myself and my heirs, executors, administrators and assigns, do hereby
knowingly and voluntarily release and forever discharge The Travelers Companies, Inc.
(the “Company”) and its respective
predecessors, successors and affiliates and current and former directors,
officers and employees from any and all claims, actions and causes of action
under those federal, state and local laws prohibiting employment discrimination
based on age, sex, race, color, national origin, religion, disability, veteran
or marital status, sexual orientation or any other protected trait or
characteristic, or retaliation for engaging in any protected activity,
including without limitation, the Age Discrimination in Employment Act of 1967,
29 U.S.C. § 621 et seq., as
amended by the Older Workers Benefit Protection Act, P.L. 101-433, the Equal
Pay Act of 1963, 9 U.S.C. § 206, et
seq., Title VII of The Civil Rights Act of 1964, as amended, 42
U.S.C. § 2000e et seq., the
Civil Rights Act of 1866, 42 U.S.C. § 1981, the Civil Rights Act of 1991,
42 U.S.C. § 1981a, the Americans with Disabilities Act, 42 U.S.C.
§ 12101, et seq., the
Rehabilitation Act of 1973, 29 U.S.C. § 791 et seq., the Family and Medical Leave Act of 1993, 28 U.S.C.
§§ 2601 and 2611 et seq.,
whether KNOWN OR UNKNOWN, fixed or contingent, which I ever had, now have, or
may have, or which my heirs, executors, administrators or assigns hereafter
can, will or may have from the beginning of time through the date on which I
sign this Full and Complete Release (this “Release”),
including without limitation those arising out of or related to my employment
or separation from employment with the Company (collectively the “Released Claims”).

 

I warrant and represent that I have made no sale, assignment or other
transfer, or attempted sale, assignment or other transfer, of any of the
Released Claims.

 

I fully understand and agree that:

 

1.                                      
this Release is in exchange for severance payment to which I would otherwise
not be entitled;

 

2.                                      
no rights or claims are released or waived that may arise after the date this
Release is signed by me;

 

3.                                      
I am here advised to consult with an attorney before signing this Release;

 

4.                                      
I have 21 days from my receipt of this Release within which to consider whether
or not to sign it;

 

5.                                      
I have 7 days following my signature of this Release to revoke the Release; and

 

A-1

 

6.                                      
this Release will not become effective or enforceable until the revocation
period of 7 days has expired.

 

If I choose to revoke this Release, I must do so by notifying the
Company in writing.  This written notice of revocation must be mailed by U.S.
first class mail or by U.S. certified mail within the 7 day revocation period
and addressed as follows:

 

The Travelers
Companies, Inc.

Attention:  General Counsel

385 Washington Street

St. Paul, Minnesota 55102

 

This Release is the complete understanding between me and the Company
in respect of the subject matter of this Release and supersedes all prior
agreements relating to the same subject matter.  I have not relied upon
any representations, promises or agreements of any kind except those set forth
herein in signing this Release.

 

In the event that any provision of this Release should be held to be
invalid or unenforceable, each and all of the other provisions of this Release
will remain in full force and effect.  If any provision of this Release is
found to be invalid or unenforceable, such provision will be modified as
necessary to permit this Release to be upheld and enforced to the maximum
extent permitted by law.

 

This Release is to be governed and enforced under the laws of the State
of Minnesota (except to the extent that Minnesota conflicts of law rules would
call for the application of the law of another jurisdiction).

 

This Release inures to the benefit of the Company and its successors
and assigns.

 

I have carefully read this Release, fully understand each of its terms
and conditions, and intend to abide by this Release in every respect.  As
such, I knowingly and voluntarily sign this Release.

 

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Jay S. Fishman

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
   

  

 

A-2

 

Exhibit B

 

For ease of
reference, the definition of Change in Control in the Policy is reproduced in
its entirety below:

 

(d)           “Change
in Control” means the occurrence of any one of the following events”

 

(i)           
individuals who, on December 13, 2006, constitute the Board (the “Incumbent
Directors”) cease for any reason to constitute at least a majority of the
Board, provided that any person becoming a director subsequent to December 13,
2006, whose election or nomination for election was approved by a vote of at
least two-thirds of the Incumbent Directors then on the Board (either by a
specific vote or by approval of the proxy statement of the Company in which
such person is named as a nominee for director, without written objection to
such nomination) shall be an Incumbent Director; provided, however, that no individual initially elected or
nominated as a director of the Company 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
an Incumbent Director;

 

(ii)          
any person is or becomes a “beneficial owner” (as defined in Rule 13d-3
under the Act), directly or indirectly, of securities of the Company
representing 30% or more of the combined voting power of the Company’s then
outstanding securities eligible to vote for the election of the Board (the “Company
Voting Securities”); provided, however,
that the event described in this paragraph (ii) shall not be deemed to be
a Change in Control of the Company by virtue of any of the following
acquisitions:  (A) by the Company or any Subsidiary, (B) by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any Subsidiary, (C) by any underwriter temporarily holding securities
pursuant to an offering of such securities, or (D) pursuant to any
acquisition by Participant or any group of persons including Participant (or
any entity controlled by Participant or any group of persons including
Participant);

 

(iii)         
the consummation of a merger, consolidation, statutory share exchange or
similar form of corporate transaction involving the Company or any of its
Subsidiaries that requires the approval of the Company’s stockholders, whether
for such transaction or the issuance of securities in the transaction (a “Reorganization”),
or sale or other disposition of all or substantially all of the Company’s
assets to an entity that is not an affiliate of the Company (a “Sale”), unless
immediately following such Reorganization or Sale:  (A) more than 60%
of the total voting power of (x) the corporation resulting from such
Reorganization or Sale (the “Surviving Company”), or (y) if applicable,
the ultimate

 

B-1

 

parent
corporation that directly or indirectly has beneficial ownership of 100% of the
voting securities eligible to elect directors of the Surviving Company (the “Parent
Company”), is represented by Company Voting Securities that were outstanding
immediately prior to such Reorganization or Sale (or, if applicable, is
represented by shares into which such Company Voting Securities were converted
pursuant to such Reorganization or Sale), and such voting power among the
holders thereof is in substantially the same proportion as the voting power of
such Company Voting Securities among the holders thereof immediately prior to
the Reorganization 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
Reorganization or Sale were Incumbent Directors at the time of the Board’s
approval of the execution of the initial agreement providing for such
Reorganization or Sale (any Reorganization 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)         
the stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company.

 

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

 

B-2

 

Exhibit C

 

AMENDED AND RESTATED TIME SHARING AGREEMENT

 

THIS AMENDED
AND RESTATED TIME SHARING AGREEMENT is entered into as of this 5th day of
August, 2008, by and between THE TRAVELERS COMPANIES, INC., a Minnesota
corporation with a place of business at 385 Washington Street, St. Paul,
Minnesota 55102 (“TRV”), and JAY S. FISHMAN, with a business address at 485
Lexington Avenue, New York, New York 10017 (“Lessee”).

 

WITNESSETH:

 

WHEREAS, TRV
and Lessee entered into a Amended and Restated Time Sharing Agreement dated as
of December 13, 2006 (the “2006 Agreement”) attached as Exhibit A to
a Letter Agreement dated as of December 13, 2006 (the “Letter Agreement”),
pursuant to which TRV agreed to make the aircraft described on Schedule 1
thereto, as amended from time to time, available to Lessee on a non-exclusive “time
sharing” basis as defined in Section 91.501(c)(1) of the Federal
Aviation Regulations (“FAR’s”) upon the terms and subject to the conditions set
forth therein; and

 

WHEREAS, TRV
and Lessee have agreed to amend and restate the 2006 Agreement as forth in its
entirety below; and

 

WHEREAS, TRV
and Lessee hereby acknowledge and agree that this Amended and Restated Time
Sharing Agreement, as amended from time to time, replaces in its entirety, Exhibit A
to the Letter Agreement; and

 

WHEREAS, one
or more affiliates of TRV are the owners of the fixed-wing and rotary-wing
aircraft set forth on Schedule A hereto, as amended from time to time
(collectively, the “Aircraft”); and

 

WHEREAS, TRV
has the right to use each of the Aircraft; and

 

WHEREAS, TRV
and/or one or more of its affiliates employs a fully-qualified and credentialed
flight crew to operate the Aircraft; and

 

WHEREAS, TRV
has agreed to lease the Aircraft, with flight crew, to Lessee on a
non-exclusive “time sharing” basis as defined in Section 91.501(c)(1) of
the FAR’s for his Personal Use (as defined below), upon the terms and subject
to the conditions set forth herein;

 

NOW,
THEREFORE, in consideration of the foregoing premises, and the covenants and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, TRV and Lessee,
intending to be legally bound, hereby agree as follows:

 

C-1

 

1.                                       Lease
of Aircraft.

 

(a)          TRV
agrees to lease the Aircraft to Lessee pursuant to the provisions of Section 91.501(b)(6),
Section 91.501(c)(1) and Section 91.501(d) of the FAR’s and
this Agreement for all Personal Use flights by Lessee during the Term (as
defined in Section 2) of this Agreement, and to provide, at TRV’s sole
cost and expense, a fully-qualified and credentialed flight crew for all
flights to be conducted hereunder.  The
parties acknowledge and agree that this Agreement did not result in any way
from any direct or indirect advertising, holding out or soliciting on the part
of TRV or any person purportedly acting on behalf of TRV.  TRV and Lessee intend that the lease of the
Aircraft effected by this Agreement shall be treated as a “wet lease” pursuant
to which TRV provides transportation services to Lessee in accordance with Section 91.501(b)(6),
Section 91.501(c)(1) and Section 91.501(d) of the FAR’s.  TRV shall cause its subsidiaries and
affiliates to comply with and perform TRV’s obligations under this Agreement to
the extent applicable and any such performance by such subsidiaries and
affiliates shall be treated as performance by STP hereunder.

 

(b)         Notwithstanding
the foregoing, no rotary-wing Aircraft shall be made available to Lessee under
this Agreement unless each of the requirements set forth in this Section 1(b)
has been satisfied: TRV shall be, and at all times thereafter during the Term
shall continue to be, a member in good standing of the National Business
Aviation Association eligible to take advantage of the Small Aircraft Exemption
from FAR Section 91.501(a) available to NBAA members.  In order to satisfy the requirements of the
Small Aircraft Exemption, TRV shall (i) provide to its Flight Standards
District Office the written notice of operations to be conducted under this
Agreement with a rotary-wing Aircraft required under such Exemption, a copy of this
Agreement, and a copy of the inspection program used to conform the rotary-wing
Aircraft with the requirements of FAR Section 91.409(f); and (ii) make all
required logbook entries showing the provision of FAR Section 91.501 pursuant
to which the rotary-wing Aircraft is being operated hereunder. TRV will carry a
copy of this Agreement and a copy of the NBAA Small Aircraft Exemption in each
rotary-wing Aircraft at all times that such rotary-wing Aircraft is being
operated hereunder.

 

(c)          If
TRV sells or otherwise disposes of any of the Aircraft, Schedule A shall be
modified to delete any reference to such Aircraft, and this Agreement shall be
terminated as to such Aircraft but shall remain in full force and effect with
respect to each of the other Aircraft. 
No such termination shall affect any of the rights or obligations of the
parties accrued or incurred hereunder prior to such termination.  If TRV purchases, leases or otherwise
acquires any Aircraft not listed in Schedule A hereto, Schedule A shall be modified
to include such Aircraft, and thereafter this Agreement shall remain in full
force and effect with respect to such Aircraft and each of the other Aircraft.

 

C-2

 

(d)         For
purposes of this Agreement, “Personal Use” means any use of the Aircraft by
Lessee, whether domestic or international, other than for the business purposes
(which business purposes include any business-related travel which would for
Federal income tax purposes be deemed commuting by Lessee) of TRV, its
subsidiaries and affiliates.  “Personal
Use” shall include all Flight Hours (as defined below) for live legs operated
for Lessee hereunder and all Flight Hours for dead-head legs operated by TRV in
order to position the Aircraft to Lessee’s point of initial departure and/or to
re-position the Aircraft from Lessee’s destination to the Aircraft’s home
base.  For purposes of this Agreement,
the term “Flight Hours” means the actual flight time, determined in hours and
tenths of an hour, from the moment of Aircraft lift-off at the departure
airport until the moment of Aircraft touchdown at the arrival airport, and
excludes taxi time.

 

2.                                       Term.  The term of this Agreement (the “Term”) shall
commence on the date first set forth above and, unless terminated in accordance
with the provisions hereof, shall continue for an initial term of one year and
thereafter shall automatically renew for successive one-year terms.  Notwithstanding anything herein to the contrary,
this Agreement shall terminate on the date of expiration or termination of the
letter agreement dated April 1, 2004 between TRV and Lessee relating to
Lessee’s employment, as amended or restated from time to time.  No termination of this Agreement shall affect
any of the rights or obligations of the parties accrued or incurred hereunder
prior to such termination.

 

3.                                       Payment
for Personal Use of Aircraft.  From
and after August 6, 2008, as payment for his Personal Use of the Aircraft
pursuant to this Agreement as provided in Section 2, Lessee shall pay TRV
the maximum amount legally payable for each such flight under FAR Section 91.501(d),
as in effect from time to time.  As of
the date of this Agreement, the maximum amount legally payable for each flight
conducted under this Agreement consists of the following actual expenses of
such flight:

 

(a)          fuel,
oil, lubricants and other additives;

 

(b)         travel
expenses of crew, including food, lodging and ground transportation;

 

(c)          hangar
and tie-down costs away from the Aircraft’s base of operation (currently
Bradley International Airport, Windsor Locks, Connecticut);

 

(d)         additional
insurance obtained for the specific flight;

 

(e)          landing
fees, airport taxes and similar assessments;

 

(f)            customs,
foreign permit and similar fees directly related to the flight;

 

(g)         in-flight
food and beverages;

 

(h)         passenger
ground transportation;

 

C-3

 

(i)             flight
planning and weather contract services; and

 

(j)             an
additional charge equal to 100% of the expenses listed in Section 3(a).

 

Notwithstanding
the foregoing, Lessee shall not be required to pay TRV, for any Personal Use of
the Aircraft, an amount more than the incremental costs to the Corporation in
connection with such Personal Use as such incremental costs are determined for
purposes of Item 402 of Regulation S-K under the Securities Exchange Act of
1934, as amended; provided that, commencing August 6, 2008, Lessee shall
not be obligated to pay TRV any amount for subsequent incremental costs to the
Corporation in connection with such Personal Use up to a sum equal to the
amount in excess of the incremental cost to the Corporation that Lessee shall
have paid to the Corporation for Personal Use of the Aircraft prior to August 6,
2008.

 

4.                                       Operational
Control of Aircraft.  TRV and Lessee
intend and agree that on all flights conducted under this Agreement, TRV shall
have complete and exclusive operational control over the Aircraft, its flight
crews and maintenance, and complete and exclusive possession, command and control
of the Aircraft.  TRV shall have complete
and exclusive responsibility for scheduling, dispatching and flight following
of the Aircraft on all flights conducted under this Agreement, which
responsibility includes the sole and exclusive right over initiating,
conducting and terminating such flights. 
Nothing in this Agreement is intended or shall be construed so as to
convey to Lessee any operational control over, or possession, command and
control of, the Aircraft, all of which are expressly retained by TRV.

 

5.                                       Scheduling.

 

(a)          Lessee
will provide the designated authorized representative(s) of TRV with
requests for flight time and proposed flight schedules as far in advance of any
given flight under this Agreement as possible in accordance with policies
established from time to time by TRV. 
Requests for flight time shall be in such form (whether oral or written)
mutually convenient to, and agreed upon by, the parties.  In addition to proposed schedules and flight
times, Lessee shall upon request provide TRV with the following information for
each proposed flight prior to scheduled departure: (i) departure point; (ii) destination;
(iii) date and time of flight; (iv) the number and names of
anticipated passengers; (v) the nature and extent of luggage to be
carried; (vi) the date and time of a return flight, if any; and (vii) any
other pertinent information concerning the proposed flight that TRV or the
flight crew may request.

 

(b)         Subject
to Aircraft and crew availability, TRV shall use its good faith efforts,
consistent with TRV’s approved policies, in order to accommodate the needs of
Lessee, to avoid conflicts in scheduling, and to enable Lessee to enjoy the
benefits of this Agreement.

 

C-4

 

(c)          Although
every good faith effort shall be made to avoid its occurrence, any flight
scheduled under this Agreement is subject to cancellation by either party
without incurring liability to the other party. 
In the event that cancellation is necessary, the canceling party shall
provide the maximum notice practicable.

 

(d)         TRV
shall not be liable to Lessee or any other person for loss, injury or damage
occasioned by the delay or failure to furnish the Aircraft and flight crew
pursuant to this Agreement for any reason.

 

6.                                       Billing.  TRV shall pay all expenses relating to the
operation of the Aircraft under this Agreement on a monthly basis.  As soon as possible after the end of each
calendar month during the Term, TRV shall provide to Lessee an invoice showing
all use of the Aircraft by Lessee under this Agreement during that month and a
complete accounting detailing all amounts payable by Lessee pursuant to Section 3
for that month, including such detail supporting all expenses paid or incurred
by TRV for which reimbursement is sought as Lessee may reasonably request.  Promptly after execution of this Agreement,
Lessee agrees to maintain with TRV an appropriate agreed-upon advance deposit,
to be applied by TRV against any amounts owed by Lessee under Section 3
and any Federal excise due on such amounts, and to replenish such deposit at
mutually-agreed times in mutually-agreed amounts (with any balance to be
returned to Lessee upon termination of this Agreement).

 

7.                                       Maintenance
of Aircraft.  TRV shall be solely
responsible for securing maintenance, preventive maintenance and inspections of
the Aircraft (utilizing an inspection program listed in FAR Section 91.409(f)),
and shall take such requirements into account in scheduling the Aircraft
hereunder.  TRV shall not delay or postpone
any maintenance, preventive maintenance or inspections of the Aircraft unless
such maintenance or inspection can be deferred in compliance with applicable
laws, regulations and TRV’s maintenance program, and will not, in the
discretion of TRV and the pilot-in-command, adversely affect safety.  TRV shall not be liable to Lessee or any
other person for loss, injury or damage occasioned by the delay or failure to
furnish the Aircraft and flight crew pursuant to this Agreement for any reason,
whether or not maintenance-related.

 

8.                                       Flight
Crew.

 

(a)          TRV
shall employ or engage and pay all salaries, benefits and and/or compensation
for a fully-qualified flight crew with appropriate credentials to conduct each
flight undertaken under this Agreement. 
All flight crewmembers shall be included on any insurance policies that
TRV is required to maintain hereunder.

 

C-5

 

(b)         The
qualified flight crew provided by TRV shall exercise all of its duties and
responsibilities with regard to the safety of each flight conducted hereunder
in accordance with applicable FAR’s. 
Final authority to initiate or terminate each flight, and otherwise to
decide all matters relating to the safety of any given flight or requested
flight, shall rest with the pilot-in-command of that flight.  The flight crew may, in its sole discretion,
terminate any flight, refuse to commence any flight or take any other action
(including, without limitation, determining the route to be flown and the place
of landing) which, in the sole judgment of the pilot-in-command, is
necessitated by considerations of safety. 
No such termination or refusal to commence by the pilot-in-command shall
create or support any liability for loss, injury, damage or delay in favor of
Lessee or any other person.

 

9.                                       Insurance.

 

(a)          At
all times during the term of this Agreement, TRV shall maintain at its sole
cost and expense (i) comprehensive aircraft and liability insurance
against bodily injury and property damage claims, including, without
limitation, contractual liability, premises damage, personal property
liability, personal injury liability, death and property damage liability,
public and passenger legal liability coverage, in an amount not less than
$200,000,000 for each single occurrence, and (ii) hull insurance for the
full replacement cost of the Aircraft.

 

(b)         Any
policies of aircraft and liability insurance carried in accordance with this Section 9
and any policies taken out in substitution or replacement of any such policies
shall (i) name Lessee as an additional insured; (ii) provide that in
respect of the interests of Lessee in such policies, the insurance shall not be
invalidated by any action or inaction of TRV regardless of any breach or
violation of any warranties, declarations or conditions contained in such
policies by or binding upon TRV; (iii) include a waiver of the insurer’s
rights of subrogation against Lessee and a cross-liability clause which
provides that except for the limits of liability, such insurance shall operate
to give Lessee the same protection as if a separate policy had been issued to
him; (iv) include contractual liability coverage covering TRV’s indemnity
obligations hereunder; and (v) permit the use of the Aircraft by TRV for
compensation or hire to the extent necessary to perform its obligations under
this Agreement.  Each such policy shall
be primary insurance, not subject to any co-insurance clause and shall be
without right of contribution from any other insurance.

 

(c)          TRV
shall use reasonable commercial efforts to provide such additional insurance
coverage for specific flights under this Agreement, if any, as Lessee may
request in writing.  Lessee also
acknowledges that any trips scheduled to the European Union may require TRV to
purchase additional insurance to comply with local regulations.  The cost of all additional flight-specific
insurance shall be borne by Lessee as set forth in Section 3(d).

 

C-6

 

(d)         Each
party agrees that it will not do any act or voluntarily suffer or permit any
act to be done whereby any insurance required hereunder shall or may be
suspended, impaired or defeated.

 

(e)          At
Lessee’s request, TRV shall deliver certificates of insurance to Lessee with
respect to the insurance required or permitted to be provided by it hereunder.

 

10.                                 Taxes.  Lessee shall be responsible for paying, and
TRV shall be responsible for collecting from Lessee and paying over to the
appropriate authorities, all applicable Federal excise taxes and all sales, use
and other excise taxes imposed by any governmental authority in connection with
any use of the Aircraft by Lessee hereunder. 
Each party shall indemnify the other party against any and all claims,
liabilities, costs and expenses (including attorney’s fees as and when
incurred) arising out of its breach of this undertaking.

 

11.                                 Lessee’s
Representations and Warranties. 
Lessee represents and warrants that:

 

(a)          Lessee
will use the Aircraft only for his own account, including carriage of his
guests, and not for the purposes of providing transportation of passengers or
cargo in air commerce for compensation or hire or for common carriage.

 

(b)         Lessee
will refrain from incurring any mechanic’s or other liens in connection with
the Aircraft, and shall not convey, mortgage, assign, lease or in any way
alienate the Aircraft or create any kind of lien or security interest involving
the Aircraft or do anything or take any action that might mature into such a
lien, and shall ensure that no liens or encumbrances of any kind whatsoever are
created or placed against the Aircraft for claims against Lessee or by Lessee.

 

(c)          Lessee
will abide by and conform to all laws, governmental and airport orders, rules and
regulations as in effect from time to time, imposed upon the lessee of an
aircraft under a time sharing agreement, and all applicable company policies of
TRV.

 

12.                                 TRV’s
Representations and Warranties.  TRV
represents and warrants that:

 

(a)          It
shall conduct all operations under this Agreement in compliance with (i) all
applicable requirements of all governmental authorities having jurisdiction,
including, but not limited to, the Federal Aviation Administration and the
governmental authorities of each foreign jurisdiction in or over which the
Aircraft may be operated hereunder; (ii) the terms, conditions and
limitations of, and in the geographical areas allowed by, the insurance
policies required hereunder; and (iii) the operating instructions of the
Aircraft’s flight manual and the manufacturers’ operating and maintenance
instructions.

 

C-7

 

(b)   Each of the Aircraft
furnished to Lessee hereunder will be in airworthy condition and in full
compliance with all applicable rules of the Federal Aviation
Administration.

 

(c)   TRV shall not do any act
or voluntarily suffer or permit any act to be done whereby any insurance
required hereunder shall or may be suspended, impaired or defeated.  In no event shall TRV suffer or permit the
Aircraft to be used or operated during the Term without such insurance being fully
in effect or in any geographical area not covered by the policies then in
effect.

 

13.                                 Disclaimer
of Warranties.  EXCEPT AS EXPRESSLY
SET FORTH IN THIS AGREEMENT, TRV HAS MADE NO REPRESENTATIONS OR WARRANTIES,
EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE AIRCRAFT, INCLUDING ANY WITH
RESPECT TO THEIR DESIGN, CONDITION, QUALITY OF MATERIALS AND WORKMANSHIP,
MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE, AIRWORTHINESS OR
SAFETY.  IN NO EVENT SHALL TRV BE LIABLE
TO THE LESSEE OR TO ANY OTHER PERSON FOR ANY INCIDENTAL, CONSEQUENTIAL, PUNITIVE
OR SPECIAL DAMAGES, HOWEVER ARISING, WHETHER TRV KNEW OR SHOULD HAVE KNOWN OF
THE POSSIBILITY OF SUCH DAMAGE, LOSS OR EXPENSE.

 

14.                                 Indemnities.

 

(a)   TRV hereby covenants and
agrees that it shall be fully liable to, and shall promptly upon demand defend,
indemnify and hold harmless Lessee and his agents, guests, invitees, licensees
and employees from and against any and all liabilities, claims, demands, suits,
causes of action, losses, penalties, fines, expenses or damages, including
legal fees, arising out of or in connection with (i) TRV’s use, operation
or maintenance of the Aircraft, (ii) TRV’s performance of or failure to
perform any service or obligation which is the subject matter of this Time
Sharing Agreement, or (iii) any other breach by TRV of any of the
representations, warranties, covenants or agreements set forth in this Time
Sharing Agreement.

 

(b)   Lessee hereby covenants
and agrees that he shall be fully liable to, and shall promptly upon demand
defend, indemnify and hold harmless TRV and its subsidiaries and affiliates and
their respective agents and employees from and against any and all liabilities,
claims, demands, suits, causes of action, losses, penalties, fines, expenses or
damages, including legal fees, arising out of or in connection with any breach
by Lessee of any of the representations, warranties, covenants or agreements
set forth in this Time Sharing Agreement.

 

C-8

 

15.                                 Limitation
on Liability.  Notwithstanding
anything in this Agreement to the contrary, Lessee shall not have any liability
to TRV arising out of this Agreement for any liabilities, claims, demands,
suits, causes of action, losses, penalties, fines, expenses, damages or costs
other than amounts payable by Lessee pursuant to Section 3, Section 9(c),
Section 10 and Section 14(b). 
In no event shall Lessee be liable for any indirect, special,
incidental, punitive or consequential damages.

 

16.                                 Relationship
of Parties.  TRV is strictly an
independent contractor provider of transportation services with respect to
Lessee.  Nothing in this Agreement is
intended, nor shall it be construed so as, to constitute the parties as
partners or joint venturers or principal and agent.  All persons furnished by TRV for the performance
of the operations and activities contemplated by this Agreement shall at all
times and for all purposes be considered TRV’s employees or agents and TRV
shall be solely responsible for their performance.

 

17.                                 Governing
Law; Severability.  This Agreement
shall be governed by and interpreted in accordance with the laws of the State
of Minnesota, without regard to its choice of law rules.  If any provision of this Agreement conflicts
with any such law of the State of Minnesota, or is otherwise unenforceable,
such provision shall be deemed null and void only the extent of such conflict
or unenforceability, and shall be deemed separate from, and shall not
invalidate, any other provision of this Agreement.

 

18.                                 Amendment.  This Agreement may not be amended, supplemented,
modified or terminated, or any of its terms varied, except by an agreement in
writing signed by each of the parties hereto.

 

19.                                 Counterparts.  This Agreement may be executed in
counterparts, each of which shall, for all purposes, be deemed an original and
all such counterparts, taken together, shall constitute one and the same
agreement, even though all parties may not have executed the same
counterpart.  Each party may transmit its
signature by facsimile, and such faxed signature shall have the same force and
effect as an original signature.

 

20.                                 Successors
and Assigns.  This Time Sharing
Agreement shall be binding upon the parties hereto, and their respective heirs,
executors, administrators, other legal representatives, successors and assigns,
and shall inure to the benefit of the parties hereto, and, except as otherwise
provided herein, to their respective heirs, executors, administrators, other
legal representatives, successors and permitted assigns.  Lessee agrees that he shall not sublease,
assign, transfer, pledge or hypothecate this Agreement or any part hereof
(including any assignment or transfer by operation of law) without the prior
written consent of TRV, which may be given or withheld by TRV in its sole and
absolute discretion.

 

C-9

 

21.                                 Notices.  All notices or other communications delivered
or given under this Agreement shall be in writing and shall be deemed to have
been duly given and received on the business day on which hand-delivered, or
one business day after the business day on which sent by nationally-utilized
overnight delivery service on a priority basis. 
Such notices shall be addressed to the parties at the addresses set
forth above, or to such other address as may be designated by any party in a
writing delivered to the other in the manner set forth in this Section 21.  Notices sent by postal service shall not be
effective.  For purposes of this
Agreement, a “business day” is any day, other than a Saturday or Sunday, on which
commercial banks in St. Paul, Minnesota are authorized or required to open for
business.  In the event that TRV and
Lessee so agree, routine communications may be made by e-mail or fax.

 

22.                                 Entire
Agreement.  This Agreement (including
the exhibits hereto) sets forth the entire agreement between the parties with
respect to the subject matter hereof and supersedes any and all other
agreements, understandings, communications, representations or negotiations,
whether oral or written, relating thereto, including, without limitation, the
2006 Agreement.  There are no third-party
beneficiaries of this Agreement, and no other agreements, representations or
warranties, either oral or written, express or implied, relating to the subject
matter of this Agreement that are not expressly set forth in this Agreement.

 

23.                                 Truth-in-Leasing
Compliance.  TRV, on behalf of
Lessee, shall (i) mail a copy of this Agreement to the Aircraft
Registration Branch, Technical Section, of the FAA in Oklahoma City within 24
hours of its execution; (ii) notify the appropriate Flight Standards
District Office at least 48 hours prior to the first flight by TRV under this
Agreement of the registration number of the Aircraft, and the location of the
airport of departure and departure time
of the first flight; and (iii) carry a copy of this Agreement onboard the
Aircraft at all times when the Aircraft is being operated under this Agreement.

 

24.                                 TRUTH IN LEASING STATEMENT UNDER FAR SECTION 91.23:

 

(A) TRV HEREBY CERTIFIES THAT EACH OF THE AIRCRAFT HAS BEEN
MAINTAINED AND INSPECTED UNDER FAR PART 91 DURING THE 12-MONTH PERIOD
PRECEDING THE DATE OF EXECUTION OF THIS AGREEMENT.  EACH OF THE AIRCRAFT WILL BE MAINTAINED AND
INSPECTED IN COMPLIANCE WITH THE MAINTENANCE AND INSPECTION REQUIREMENTS OF FAR
PART 91 FOR ALL OPERATIONS TO BE CONDUCTED UNDER THIS AGREEMENT.

 

(B) TRV, 385 WASHINGTON STREET, ST. PAUL, MINNESOTA 55102, HEREBY
CERTIFIES THAT IT IS RESPONSIBLE FOR OPERATIONAL CONTROL OF EACH OF THE
AIRCRAFT FOR ALL OPERATIONS OF SUCH AIRCRAFT UNDER THIS AGREEMENT.

 

C-10

 

(C) EACH PARTY HEREBY CERTIFIES THAT IT UNDERSTANDS ITS
RESPONSIBILITIES FOR COMPLIANCE WITH APPLICABLE FEDERAL AVIATION REGULATIONS.

 

(D) THE PARTIES UNDERSTAND THAT AN EXPLANATION OF THE FACTORS
BEARING ON OPERATIONAL CONTROL AND THE PERTINENT FEDERAL AVIATION REGULATIONS
CAN BE OBTAINED FROM THE NEAREST FAA FLIGHT STANDARDS DISTRICT OFFICE.

 

(signature page follows)

 

C-11

 

IN WITNESS WHEREOF, TRV and Lessee have executed this Amended and
Restated Time Sharing Agreement effective as of the date first above written.

 

	
   

  	
  THE TRAVELERS COMPANIES, INC.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   /s/ Alan D. Schnitzer

  
	
   

  	
  Name:

  	
    Alan D. Schnitzer

  
	
   

  	
  Title: 

  	
  Vice-Chairman of The Travelers Companies, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LESSEE:

  
	
   

  	
   

  
	
   

  	
  /s/ Jay S. Fishman

  
	
   

  	
  Jay S. Fishman

  
					

 

C-12

 

SCHEDULE A

AIRCRAFT

 

Dassault Aviation Falcon 7X, s/n 35, United States registration N207TR
(fixed-wing)

 

Dassault Aviation Mystere Falcon 900, s/n 200, United States
registration N404ST (fixed-wing)

 

Dassault Aviation Falcon 2000EX, s/n 135, United States registration
N414TR (fixed-wing)

 

Dassault Aviation Falcon 2000, s/n 25, United States registration
N122SC (to be changed to N406ST) (fixed-wing)

 

Sikorsky S-76B, s/n 760462, N403ST (rotary-wing)

 

C-13

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