Document:

Exhibit 10.33

 

TRAVELERS

PERFORMANCE SHARE AWARD NOTIFICATION AND AGREEMENT

 

(This award must be accepted
and returned by the end of business on XXXXX, or it will be forfeited.
  Refer below to Section 17.)

 

	
  Participant:

  	
   

  	
  Jay S. Fishman

  	
   

  	
  Grant Date:

  	
   

  	
  XXXXXX

  
	
  Number of Performance Shares:

  	
   

  	
  XXXXXXX to XXXXXXX

  	
   

  	
   

  	
   

  	
   

  

 

1.                                      Grant of Performance
Shares. This
performance share award is granted pursuant to The Travelers Companies, Inc.
Amended and Restated 2004 Stock Incentive Plan (the “Plan”), by The Travelers
Companies, Inc. (the “Company”) to you as an employee of the Company or an
affiliate of the Company (together, the “Travelers Group”). The Company hereby
grants to the Participant as of the Grant Date an award (“Award”) for the
initial number of Performance Shares set forth above, pursuant to the Plan, as
it may be amended from time to time, and subject to the terms, conditions, and
restrictions set forth herein, including, without limitation, the conditions
set forth in Section 7.

 

2.                                      Terms and Conditions. The terms, conditions, and restrictions
applicable to the Award are specified in the Plan, this grant notification and
agreement, including Exhibits A and B (the “Award Agreement”), and the
prospectus dated January 29, 2010 (titled “Travelers Equity Awards”) and
any applicable prospectus supplement (together, the “Prospectus”). The terms,
conditions and restrictions in the Plan and the Prospectus include, but are not
limited to, provisions relating to amendment, vesting, cancellation and
settlement, all of which are hereby incorporated by reference into this Award
Agreement to the extent not otherwise set forth herein.

 

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

 

The Participant
understands that the Award and all other incentive awards are entirely
discretionary and that no right to receive an award exists absent a prior
written agreement with the Company to the contrary. The Participant also
understands that the value that may be realized, if any, from the Award is
contingent, and depends on the future financial performance of the Company,
among other factors. The Participant further confirms his or her understanding
that the Award is intended to promote employee retention and stock ownership
and to align employees’ interests with those of shareholders, is subject to
performance conditions and will be cancelled if the performance conditions are
not satisfied. Thus, the Participant understands that (a) any monetary
value assigned to the Award in any communication regarding the Award is
contingent, hypothetical, or for illustrative purposes only, and does not
express or imply any promise or intent by the Company to deliver, directly or
indirectly, any certain or determinable cash value to the Participant; (b) receipt
of the Award or any incentive award in the past is neither an indication nor a
guarantee that an incentive award of any type or amount will be made in the
future, and that absent a written agreement to the contrary, the Company is
free to change its practices and policies regarding incentive awards at any
time; and (c) performance may be subject to confirmation and final
determination by the Company’s Board of Directors or its Compensation Committee
(the “Committee”) that the performance conditions have been satisfied.  The Participant shall have no rights as a
stockholder of the Company with respect to any shares covered by the Award
unless and until the Award is vested and settled in shares of Common Stock.

 

3.                                      Performance Period. For purposes of the Award, the
Performance Period shall be defined as the three-year period commencing                   
    , 20     and ending                     
    , 20    , or such shorter period as
provided in the Addendum.

 

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

 

5.                                      Settlement of Award. 
The number of Performance Shares vested (which shall include any
additional Performance Shares credited to the Participant’s account pursuant to
Section 6) shall be calculated based on the Performance Share Vesting Grid
set forth in Exhibit B. The Company shall 

 

1

 

deliver to the Participant, subject to any certification of
satisfaction of the performance goal as required by the Plan in order to comply
with Section 162(m) of the Internal Revenue Code, a number of shares
of Common Stock equal to the number of vested Performance Shares on January 1
of the year following the end of the Performance Period or as soon as
administratively practicable thereafter (but no later than March 15 of the
year following the end of the Performance Period), except as provided in the
Addendum. The number of shares of Common Stock delivered to the Participant
shall be reduced by a number of shares of Common Stock having a Fair Market
Value on the date of delivery equal to the tax withholding obligation, unless
the Plan administrator is notified in advance of the Award settlement and the
Participant elects another method for tax withholding.

 

6.                                      Dividend Equivalents. The Participant shall be entitled to
receive additional Performance Shares with respect to any cash dividends
declared by the Company. The number of additional Performance Shares shall be
determined by multiplying the number of Performance Shares credited to the
Participant’s account (which shall include the number of Performance Shares set
forth above, plus any Performance Shares credited in connection with dividend
payments under this Section 6), times the dollar amount of the cash
dividend per share of Common Stock, and then dividing by the Fair Market Value
of the Common Stock as of the dividend payment date. The Participant’s right to
any Performance Shares credited to the Participant’s account in connection with
dividends shall vest in the same manner described in Section 4.  As described in Section 5, such
additional Performance Shares shall be included in the total number of
Performance Shares credited to the Participant’s account for purposes of
applying the Performance Share Vesting Grid.

 

7.                                      Grant Conditioned on
Principles of Employment Agreement.

 

(a) 
Notwithstanding any contrary provision in this grant notification and
agreement, the grant of the Award shall not be effective and shall be null and
void unless the Participant has agreed, in the manner prescribed by the Company
and no later than the date immediately preceding the Grant Date, to be bound by
the Company’s Principles of Employment Agreement in effect on the date
immediately preceding the Grant Date (the “POE Agreement”), as published on the
Company’s intranet site or previously distributed in hard copy to Participant.

 

(b) 
By accepting the Award, the Participant agrees that the POE Agreement shall
supersede and replace the form of Principles of Employment Agreement contained
or referenced in any prior equity award made by the Company to the Participant,
and, accordingly, such prior equity award shall become subject to the terms and
conditions of the POE Agreement.

 

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

 

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

 

(a)                                  The Company and the Participant
understand, intend and agree that the Non-Solicitation Conditions of this Section 9
are intended to protect the Travelers Group against the Participant raiding its
employees and/or its business during the twelve (12) month period (the “Restricted
Period”) following the date of the conclusion of the Participant’s employment
with the Travelers Group (whether voluntary or involuntary) as reflected on the
books and records of the Travelers Group (the “Termination Date”), while
recognizing that after the Termination Date, the Participant is still permitted
to freely compete with the Travelers Group, except to the extent “Confidential
Information” (which means any technical or business information developed by,
for, or at the expense of the Travelers Group, or assigned or entrusted to the
Travelers Group, unless such information is generally known outside of the
Travelers Group) is used in such solicitation and subject to certain
restrictions set forth below. Further, nothing in this Section 9 is
intended to grant or limit any rights or claims as to any future employer of
the Participant.

 

(b)                                 During the Restricted Period, the
Participant will not seek to recruit or solicit, or assist, participate in or
promote the recruiting or solicitation of, interfere with, attempt to influence
or otherwise affect the employment of any person who was or is employed by the
Travelers Group at any time during the last three months of the Participant’s
employment or during the Restricted Period. Further, the Participant shall not,
on behalf of himself or herself or any other person, hire, employ or engage any
such 

 

2

 

person. The Participant shall not directly engage in the aforesaid
conduct through a third party for the purpose of colluding to avoid the
restrictions in this Section 9. However, the Non-Solicitation Conditions
do not preclude the Participant from directing a third party (including but not
limited to employees of his/her subsequent employer or a search firm) to
broadly solicit, recruit, and hire individuals, some of whom may be employees
of the Travelers Group, provided that the Participant does not specifically
direct such third party specifically to target employees of the Travelers Group
generally or specific individual employees of the Travelers Group.

 

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

 

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

 

10.                               Forfeiture of Performance
Share Award.

 

(a)                                The  Participant acknowledges and agrees as follows:

 

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

 

(ii)                                     The Participant acknowledges that his or
her rights with respect to the Award are conditioned on his or her timely acceptance
of the POE Agreement and his or her compliance with the POE Agreement at all
times thereafter.

 

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

 

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

 

3

 

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

 

(e)                                  Except to the extent prohibited by law,
an outstanding Award may be forfeited, and the compensatory value received under
the Award may be subject to recoupment by the Company, in accordance with the
policies of the Company in effect from time to time with respect to forfeiture
and recoupment of bonus payments, retention awards, cash or stock-based
incentive compensation or awards, or similar forms of compensation, and the
terms of any such policy, while it is in effect, are incorporated herein by
reference.

 

11.                               Consent to Electronic
Delivery.  In lieu of receiving documents in paper
format, the Participant agrees, to the fullest
extent permitted by law, to accept electronic delivery of any documents that
the Company may be required to deliver (including, but not limited
to, prospectuses, prospectus supplements, grant or award notifications and
agreements, account statements, annual and quarterly reports, and all other
agreements, forms and communications) in connection with this and any other
prior or future incentive award or program made or offered by the Company or
its predecessors or successors. Electronic delivery of a document to the
Participant may be via a Company e-mail system or by reference to a location on
a Company intranet site to which the Participant has access.

 

12.                               Administration. In administering the Plan, or to comply
with applicable legal, regulatory, tax, or accounting requirements, it may be
necessary for a member of the Travelers Group to transfer certain Participant
data to another member of the Travelers Group, or to its outside service
providers or governmental agencies. By accepting the Award, the Participant
consents, to the fullest extent permitted by law, to the use and transfer,
electronically or otherwise, of his or her personal data to such entities for
such purposes.

 

13.                               Entire
Agreement/Amendment/Survival/Assignment. The terms, conditions and restrictions set forth in
the Plan, this Award Agreement and the Prospectus, constitute the entire
understanding between the parties hereto regarding the Award and supersede all
previous written, oral, or implied understandings between the parties hereto
about the subject matter hereof.  This
Award Agreement may be amended by a subsequent writing (including e-mail or
electronic form) agreed to between the Company and the Participant.  Section headings herein are for
convenience only and have no effect on the interpretation of this Award
Agreement.  The provisions of the Award
Agreement that are intended to survive the Termination Date of a Participant
shall survive such date.  The Company may
assign this Award Agreement and its rights and obligations hereunder to any
current or future member of the Travelers Group.

 

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

 

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

 

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

 

4

 

17.                               Acceptance and Agreement
by the Participant; Forfeiture upon Failure to Accept. 
By signing below after the Addendum to Award Agreement, the Participant
accepts the Award and agrees to be bound by the terms, conditions, and
restrictions set forth in the Award Agreement. The Participant’s rights under
the Award will lapse on XXXXXXX, and the Award will be forfeited on such date
if the Participant does not accept the Award by signing below and mailing the
agreement with a postmark date no later than XXXXXXX, or by hand delivery no
later than XXXXXXX, to                         ,
Compensation, One Tower Square-2MN, Hartford, CT 06183. This grant is null and
void if the Participant has not by the date immediately preceding the Grant
Date agreed to be bound by the POE Agreement. For the avoidance of doubt, the
Participant’s failure to accept the Award Agreement shall not affect his or her
continuing obligations under any other agreement between the Company and the
Participant.

 

18.                               Governing Law.  The Award Agreement shall be legally binding and shall
be executed and construed and its provisions enforced and administered in
accordance with the laws of the State of Minnesota.

 

5

 

EXHIBIT
A—Award Rules

To
Travelers’ Performance Share Award Notification and Agreement

 

When you leave the
Company

 

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

 

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

 

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

 

	
  If You:

  	
   

  	
  Here’s What Happens to Your Award:

  
	
   

  	
   

  	
   

  
	
  Resign
  (but do not meet the Retirement Rule)

  	
   

  	
  Your rights under the
  Award are cancelled, and your right to the Performance Shares is forfeited.

  
	
   

  	
   

  	
   

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

  	
   

  	
  You will be entitled to
  receive the number of shares of Common Stock you would have received, if any,
  if your employment had not terminated due to disability, multiplied by a
  fraction equal to the number of days from the first day of the Performance
  Period to the Termination Date, divided by the total number of days in the
  Performance Period. Any such shares will be received at the time of
  settlement of the Performance Shares after the end of the Performance Period.

  
	
   

  	
   

  	
   

  
	
  Take
  an approved personal leave of absence

  	
   

  	
  Your rights under the
  Award continue when you are on such leave of absence for up to three months.
  Once your approved leave of absence exceeds three months, your rights under
  the Award are suspended until you return to work and remain actively employed
  for 30 calendar days, after which your rights under the Award will be
  restored retroactively. If you terminate employment during the leave for any
  reason, the termination of employment provisions will apply. If your personal
  leave of absence exceeds one year, your rights under the Award are cancelled,
  and your right to the Performance Shares is forfeited.

  
	
   

  	
   

  	
   

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

  	
   

  	
  Your rights under the
  Award continue when you are on such leave of absence.

  
	
   

  	
   

  	
   

  
	
  Die
  while employed or following employment while your Award is outstanding

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Are terminated involuntarily for
  gross misconduct or for 

  	
   

  	
  Your rights under the Award are cancelled, and your
  right to the Performance Shares is forfeited.

  

 

6

 

	
  cause*

  	
   

  	
   

  

 

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

 

7

 

	
  If You:

  	
   

  	
  Here’s What Happens to Your Award:

  
	
   

  	
   

  	
   

  
	
  Are
  terminated involuntarily other than for gross misconduct or for cause
  (including under the Company’s applicable separation pay plan or any
  successor or comparable arrangement)

  	
   

  	
  Your rights under the
  Award are cancelled, and your right to the Performance Shares is forfeited.

  
	
   

  	
   

  	
   

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

  	
   

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

  

 

Retirement Rule

 

If, as of your Termination Date, you are at least (i) age 65, (ii) age
62 with one or more full years of service, or (iii) age 55 with 10 or more
full years of service, then you meet the “Retirement Rule.”  If you are terminated under the Company’s
applicable separation pay plan or any successor or comparable arrangement, if
any, your Termination Date for purposes of determining whether you qualify
under the Retirement Rule is your last day of active employment with the
Company.

 

The Retirement Rule does not apply if you were involuntarily
terminated for gross misconduct or for cause. If you retire and do not meet the
Retirement Rule, you will be considered to have resigned.

 

If you are terminated under the Company’s applicable separation pay
plan or successor or comparable arrangement, if any, your Termination Date for
purposes of determining whether you qualify under the Retirement Rule is
your last day of active employment with the Company.

 

	
  If you:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Meet the Retirement Rule

  	
   

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

  

 

8

 

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

 

EXHIBIT
B—Performance Share Vesting Grid

To
Travelers’ Performance Share Award Notification and Agreement

 

	
  Performance
  Period

  ROE*

  	
   

  	
  % of Performance Shares Vested

  
	
   

  	
   

  	
   

  
	
  > 16.0

  	
  %

  	
   

  	
  150%

  	
  (Maximum)

  
	
  15.5

  	
   

  	
   

  	
  140

  	
   

  
	
  15.0

  	
   

  	
   

  	
  130

  	
   

  
	
  14.5

  	
   

  	
   

  	
  120

  	
   

  
	
  13.5

  	
   

  	
   

  	
  110

  	
   

  
	
  12.0

  	
   

  	
   

  	
  100

  	
   

  
	
  10.0

  	
   

  	
   

  	
  75

  	
   

  
	
  8.0

  	
   

  	
   

  	
  50

  	
  (Threshold)

  
	
  < 8.0

  	
   

  	
   

  	
  0

  	
   

  

 

* For any Performance Period ROE (as defined
below) that is at least 8.0%, but falls between two Performance Period ROE
performance levels, the percentage of Performance Shares vested shall be
interpolated (for example, if Performance Period ROE is 14.0%, 115% of the
Performance Shares would be vested).

 

Definitions:

 

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

 

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

 

“Adjusted
Operating Income”
for each year in the Performance Period is defined as the Company’s net income
from continuing operations as reported in the Company’s financial statements
(including accompanying footnotes and management’s discussion and analysis),
adjusted as set forth in the immediately following sentence. In calculating
Adjusted Operating Income, net income from continuing operations shall be
adjusted as follows: first (A) remove the after-tax effects of the
following items: (i) losses (net of reinsurance) from catastrophes (as
designated by the Insurance Service Office’s Property Claims Service Group, the
Lloyd’s Claim Office, Swiss Reinsurance Company’s sigma report, or a comparable
report or organization generally recognized by the insurance industry, and
reported by the Company as a catastrophe); asbestos and environmental reserve
charges (or releases); net realized investment gains or losses in the fixed
maturities and real estate portfolios; and (ii)  extraordinary items, the
cumulative effect of accounting changes and federal income tax rate changes,
and restructuring charges, each as defined by generally accepted accounting
principles in the United States, and each as reported in the Company’s
financial statements (including accompanying footnotes and management’s
discussion and analysis); (B) reduced, as to the first year in the
Performance Period (20XX), by $                  ,
as to the second year in the Performance Period (20XX), by $                  
times the ratio of: the Company’s 20XX consolidated personal lines homeowners
net written premium plus commercial lines property net written premium plus 50%
of commercial lines multi peril net written premium divided by the Company’s 20XX
consolidated personal lines homeowners net written premium plus commercial
lines property net written premium plus 50% of commercial lines multi peril net
written premium, and as to the third year in the Performance Period (20XX), by $                  
times the ratio of: the Company’s 20XX consolidated personal lines homeowners
net written premium plus commercial lines property net written premium plus 50%
of commercial lines multi peril net written premium divided by the Company’s 20XX
consolidated personal lines homeowners net written premium plus commercial
lines property net written premium plus 50% of commercial lines multi peril net
written premium; and (C) reduced by an amount intended, as of the date of
this award, to approximate historical levels of credit losses (on an after-tax
basis) associated with the Company’s fixed income investments, determined by (i) multiplying
a fixed factor, expressed as 2.25 

 

9

 

basis points, by the
amortized cost of the Company’s fixed maturity investment portfolio at the
beginning of each quarter during the relevant year in the Performance Period
and (ii) adding the sum of the amounts resulting from (i) for such year
in the Performance Period.

 

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

 

10

 

ADDENDUM
TO AWARD AGREEMENT

– Special
Rules Applicable to Jay S. Fishman

 

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

 

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

 

1.                                      Performance Period and
Performance Period ROE.

 

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

 

(a)                                  If the Good Leave Termination occurs
before                   
    , 20    , the Performance Period
shall be the one-year period starting                   
    , 20     and ending                   
    , 20    .

 

(b)                                 If the Good Leave Termination occurs
during the year commencing                   
    , 20     and ending                   
    , 20    , the Performance Period
shall be the two-year period starting                   
    , 20     and ending                   
    , 20    .

 

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

 

2.                                      Settlement of Award.

 

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

 

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

 

11

 

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

 

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

 

	
  THE TRAVELERS COMPANIES, INC.

  	
   

  	
  PARTICIPANT’S SIGNATURE DATE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: John P. Clifford, Jr.

  	
   

  	
  Jay S. Fishman

  
	
  Executive Vice
  President, Human Resources

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Received By

  	
   

  	
  Date

  

 

12Exhibit
10.37

 

FIRST AMENDMENT

TO

THE TRAVELERS DEFERRED COMPENSATION PLAN

(As Amended and Restated Effective January 1, 2009)

 

The Travelers Deferred Compensation Plan (As Amended and Restated
Effective January 1, 2009) is hereby amended effective January 1,
2010 as follows:

 

I.

 

Section 2.2 is amended by restating subsection (n) to read as
follows:

 

(n)                                 For purposes of
applying a Deferral Election under this Plan, “Salary” does not include
long-term disability payments received from any source by the Participant.  Further, for purposes of applying a Deferral
Election under this Plan, in the case of a Participant who transfers during the
Plan Year to employment with a foreign affiliate of the Company or to work in a
foreign assignment for the Company or a U.S. affiliate of the Company, (i) “Salary”
does not include amounts paid to the Participant for services rendered for such
foreign affiliate after such transfer or during such foreign assignment, and (ii) “Incentive
Compensation” does not include that portion of the Incentive Compensation (as
otherwise determined) attributable to services rendered for such foreign
affiliate after such transfer or during such foreign assignment (for this
purpose, Incentive Compensation shall be deemed to be earned ratably over the
Plan Year or that portion of the Plan Year during which he/she is employed with
the Company or affiliate of the Company).

 

 

	
   

  	
  /s/ John P. Clifford Jr.

  
	
   

  	
  John P. Clifford Jr.

  
	
   

  	
  Executive Vice President — Human Resources

  
	
   

  	
   

  
	
   

  	
  Dated: December 21, 2009

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