Exhibit 10.16
TRAVELERS
PERFORMANCE SHARE AWARD NOTIFICATION AND AGREEMENT
(This award must be accepted by
. on
, or it will be forfeited. Refer below to
Section 12.)
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Participant:
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Grant
Date:
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Number
of Performance Shares:
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Performance
Period:
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1. Grant of Performance
Shares. This performance share award is granted pursuant
to The Travelers. 2004 Stock Incentive Plan (the
“Plan”), by The Travelers Companies, Inc. (the
“Company”) to you, an employee of the Company or a
subsidiary of the Company (the “Participant”). The
Company hereby grants to the Participant an award for the number of
Performance Shares set forth above (the “Award”),
pursuant to the Plan, as it may be amended from time to time, and
subject to the terms, conditions, and restrictions set forth
herein.
2. Terms and
Conditions. The terms, conditions, and restrictions
applicable to the Award are specified in this award notification
and agreement, the Plan, the prospectus dated February 5, 2008
(titled “Travelers Equity Awards”), and any applicable
prospectus supplement (together, the “Prospectus”). The
terms, conditions and restrictions in the Prospectus include, but
are not limited to, provisions relating to amendment, vesting,
cancellation, and settlement, all of which are hereby incorporated
by reference into this grant notification and agreement. The terms,
conditions and restrictions in this award notification and
agreement, the Prospectus, and the Plan constitute the Award
agreement between the Participant and the Company (the
“Agreement”). By accepting this Award, the Participant
acknowledges receipt of the Prospectus and that he or she has read
and understands the Prospectus.
The Participant
understands that this Award and all other incentive awards are
entirely discretionary and that no right to receive an award exists
absent a prior written agreement with the Company to the contrary.
The Participant also understands that the value that may be
realized, if any, from the Award is contingent, and depends on the
future financial performance of the Company, among other factors.
The Participant further confirms his or her understanding that the
Award is intended to promote employee retention and stock ownership
and to align employees’ interests with those of shareholders,
is subject to performance conditions and will be cancelled if the
performance conditions are not satisfied. Thus, Participant
understands that (a) any monetary value assigned to the Award
in any communication regarding the Award is contingent,
hypothetical, or for illustrative purposes only, and does not
express or imply any promise or intent by the Company to deliver,
directly or indirectly, any certain or determinable cash value to
the Participant; (b) receipt of this Award or any incentive
award in the past is neither an indication nor a guarantee that an
incentive award of any type or amount will be made in the future,
and that absent a written agreement to the contrary, the Company is
free to change its practices and policies regarding incentive
awards at any time; and (c) performance may be subject to
confirmation and final determination by the Company’s Board
of Directors or a Committee of the Board that the performance
conditions have been satisfied. The Participant shall have no
rights as a stockholder of the Company with respect to any shares
covered by this Award unless and until the Award is vested and
settled in shares of Common Stock.
3. Performance
Period. For purposes of this Award, the Performance
Period shall be defined as the three-year period commencing
January 1, 2008 and ending December 31, 2010.
4. Vesting. The
Participant’s right to the Performance Shares vests on the
last day of the Performance Period if the Participant remains
continuously employed by the Company or one of its subsidiaries on
such day. If the Participant’s employment with the Company
and its subsidiaries terminates during the Performance Period, the
Participant’s right to the Performance Shares will be
determined in accordance with Exhibit A.
5. Settlement of
Award. The number of Performance Shares vested (which
shall include any additional Performance Shares credited to the
Participant’s account pursuant to Section 6) shall be
calculated based on the Performance Share Vesting Grid set forth in
Exhibit B. The Company shall deliver to the Participant,
subject to any certification of satisfaction of the performance
goal as required by the Plan in order to comply with Section
162(m) of the
Internal Revenue Code, a number of shares of Common Stock equal to
the number of vested Performance Shares on January 1 of the
year following the end of the Performance Period or as soon as
administratively practicable thereafter (but no later than
March 15 of the year following the end of the Performance
Period). The number of shares of Common Stock delivered to the
Participant shall be reduced by a number of shares of Common Stock
having a Fair Market Value on the date of delivery equal to the tax
withholding obligation, unless the Plan administrator is notified
in advance of the Award settlement and the Participant elects
another method for tax withholding.
6. Dividend
Equivalents. The Participant shall be entitled to
receive additional Performance Shares with respect to any cash
dividends declared by the Company. The number of additional
Performance Shares shall be determined by multiplying the number of
Performance Shares credited to the Participant’s account
(which shall include the number of Performance Shares set forth
above, plus any Performance Shares credited in connection with
dividend payments under this Section 6), times the dollar
amount of the cash dividend per share of Common Stock, and then
dividing by the Fair Market Value of the Common Stock as of the
dividend payment date. The Participant’s right to any
Performance Shares credited to the Participant’s account in
connection with dividends shall vest in the same manner described
in Section 4. As described in Section 5, such additional
Performance Shares shall be included in the total number of
Performance Shares credited to the Participant’s account for
purposes of applying the Performance Share Vesting Grid.
7. Consent to Electronic
Delivery. In lieu of receiving documents in paper
format, the Participant agrees, to the fullest extent permitted by
law, to accept electronic delivery of any documents that the
Company may be required to deliver (including, but not limited to,
prospectuses, prospectus supplements, grant or award notifications
and agreements, account statements, annual and quarterly reports,
and all other forms or communications) in connection with this and
any other prior or future incentive award or program made or
offered by the Company or its predecessors or successors.
Electronic delivery of a document to the Participant may be via a
Company e-mail system or by reference to a location on a Company
intranet or internet site to which Participant has access.
8. Administration.
In administering the Plan, or to comply with applicable legal,
regulatory, tax, or accounting requirements, it may be necessary
for the Company or the subsidiary employing the Participant to
transfer certain Participant data to the Company, its subsidiaries,
outside service providers, or governmental agencies. By accepting
the Award, the Participant consents, to the fullest extent
permitted by law, to the use and transfer, electronically or
otherwise, of his or her personal data to such entities for such
purposes.
9. Entire Agreement; No Right
to Employment. The Agreement constitutes the entire
understanding between the parties hereto regarding the Award and
supersedes all previous written, oral, or implied understandings
between the parties hereto about the subject matter hereof. Nothing
contained herein, in the Plan, or in the Prospectus shall confer
upon the Participant any rights to continued employment or
employment in any particular position, at any specific rate of
compensation, or for any particular period of time.
10. Dispute and Claims
Resolution; Conflict. Any disputes, claims and
counterclaims under this Agreement shall be resolved in accordance
with any internal dispute resolution policy of the Company in
effect from time to time, including any arbitration provisions
thereof. In the event of a conflict between the Plan and this
grant notification and agreement, or the terms, conditions, and
restrictions of the Award as specified in the Prospectus, the Plan
shall control.
11. Non-Solicitation and
Non-Disclosure Agreement. The Participant agrees to be
bound by the terms of the Non-Solicitation and Non-Disclosure
Agreement attached hereto as Exhibit C, which provides for the
consequences set forth therein in the event the Participant
breaches the non-solicitation and non-disclosure covenants
contained therein, as more fully described in Exhibit C.
12. Acceptance and Agreement
by Participant; Forfeiture upon Failure to Accept. By
clicking the button below, Participant accepts the Award and agrees
to be bound by the terms, conditions, and restrictions set forth in
the Prospectus, the Plan, this notification and agreement, the
Non-Solicitation and Non-Disclosure Agreement and the
Company’s policies, as in effect from time to time, relating
to the Plan. The Participant’s rights under the Award will
lapse at 12:00 a.m. on June 3, 2008 and the Award will be
forfeited on such date if the Participant does not accept the Award
by clicking the button below on or before 11:59 p.m. on
June 2, 2008.
EXHIBIT A
To
Travelers Performance Share Award Notification and
Agreement
When you leave the Company
References to
“you” or “your” are to the
Participant. “Termination date” refers to the
date of termination of your employment as reflected on the books
and records of the Company.
If you terminate your
employment or if there’s a break in your employment, your
Award may be cancelled before the end of the Performance Period and
your rights to vesting and settlement of your Award may be
affected.
The provisions in the
chart below apply to Awards granted under the Plan. Special
rules apply for vesting and settlement of your Award in cases
of termination of employment if you satisfy certain age and years
of service requirements (“Retirement Rule”), as set
forth in “Retirement Rule” below.
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If you:
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Here’s what happens to Your Award:
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Resign, or retire (and do not
meet the Retirement Rule)
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Your rights under the
Award are cancelled, and your right to the Performance Shares is
forfeited.
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Become
disabled (as defined under the Company’s applicable long-term
disability plan)
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You will be entitled to
receive the number of shares of Common Stock you would have
received, if any, if your employment had not terminated due to
disability, multiplied by a fraction equal to the number of days
from the first day of the Performance Period to your date of
termination, divided by the total number of days in the Performance
Period. Any such shares will be received at the time of settlement
of the Performance Shares after the end of the Performance
Period.
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Take
an approved personal leave of absence
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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.
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Are on
an approved family leave, medical leave, dependent care leave,
military leave, or other statutory leave of absence
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Your rights under the
Award continue when you are on such leave of absence.
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Die
while employed or following employment while your award is
outstanding
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Your estate will be
entitled to receive a number of shares of Common Stock equal to the
number of Performance Shares set forth at the beginning of this
Award, plus any Performance Shares credited as dividend equivalents
in connection with the dividends paid or payable as of the date of
your death), multiplied by a fraction equal to the number of days
in the Performance Period from the first day of the Performance
Period to your date of death, divided by the total number of days
in the Performance Period. Any such shares will be received as soon
as administratively possible following your death.
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Are
terminated involuntarily for gross misconduct or for
cause
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Your rights under the
Award are cancelled, and your right to the Performance Shares is
forfeited.
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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)
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Your rights under the
Award are cancelled, and your right to
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