Travelers 2014 Annual Report Download - page 350

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 Shares Award granted XXXXX XX, 20XX. 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 set forth special time vesting rules that apply with respect to the Award and special rules that
will apply in the event of the Participant
’ s death, termination due to Disability (as defined in the Letter Agreement), termination by the Company
without Cause (as defined in the Letter Agreement), or termination by the Participant for Good Reason (as defined in the Letter Agreement) prior to
the normal scheduled settlement of the Award.
1. Special 4
- Year Ratable Time Vesting; Delayed Settlement for Final Vesting Tranche. As contemplated pursuant to the Letter
Agreement, the Participant
’ s rights with respect to the Award shall generally be subject to a 4 year ratable time vesting requirement (in addition to
the normal performance vesting requirements) such that the Participant shall become time
- vested in one - quarter of the Award on each of
December 31, 2015, December 31, 2016, December 31, 2017 and December 31, 2018 (the “Final Vesting Date” ). Accordingly, subject to the
Participant
’ s continued employment through the end of the Performance Period, the Participant will be time vested in 75% of the Award (to the
extent earned based on actual performance) and will receive a distribution of 75% of the earned Performance Shares on a date determined by the
Company that is between January 1 and March 15 of 2018 (the “Regular Settlement Date”
). Subject to the Participant ’ s continued employment
through the Final Vesting Date, he will receive the final remaining earned portion of the Award (including any additional dividend equivalents
earned thereon) on such date.
2.
Treatment upon Termination Without Cause, for Good Reason or Disability. In the event of the Participant ’ s termination of employment
prior to the Final Vesting Date due to a termination without Cause, a termination for Good Reason or a termination due to Disability, the Participant
shall remain entitled to receive the full amount of earned Performance Shares (based on actual performance during the Performance Period) with
such full amount of earned Performance Shares payable on the Regular Settlement Date (or, if later, on the first day of the seventh (7th) month
following his separation from service, as defined in the Letter Agreement); provided
, however, that in the case of a termination due to Disability
prior to the end of the Performance Period, the earned number of Performance Shares shall be no less than one hundred percent (100%) of the
number of Performance Shares granted in this Award (without regard to actual performance), plus any additional Performance Shares credited as
dividend equivalents under Section 6 of the Award Agreement.
3.
Treatment upon Retirement. In the event of the Participant ’ s retirement in accordance with the Retirement Rule prior to the Final Vesting
Date, the Participant shall remain entitled to receive 100% of the portion of earned Performance Shares that was time
- vested at the time of such
retirement and a pro
- rata portion of the earned Performance Shares that was not yet time - vested at the time of such retirement (in each case, with
the earned portion of Performance Shares determined based on actual performance during the Performance Period) payable on the Regular
Settlement Date (or, if later, on the first day of the seventh (7th) month following his separation from service, as defined in the Letter Agreement).
The pro
- ration with respect to each remaining unvested tranche of the Award shall be determined by measuring the portion of the period from the
commencement of the Performance Period through the scheduled vesting date of such tranche for which the Participant was employed prior to
retirement. For example, if the participant retires on December 31, 2016, he will have fully vested in the first two time
- vesting tranches of the Award
(representing 50% of the total Award), he will become vested in 2/3 of the third tranche of the Award (i.e., reflecting his employment for 2/3 of the
vesting period related to such third tranche, with such portion representing 16.7% of the total Award), and he will become vested in 50% of the
fourth tranche of the Award (i.e., reflecting his employment for half of the vesting period related to such fourth tranche, with such portion
representing 12.5% of the total Award).
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4.
Treatment upon Death.
(a) Generally. Notwithstanding the forgoing, in the event of the Participant ’ s death at any time prior to the end of the Performance
Period while the Award remains outstanding (including if such death occurs after the Participant
’ s termination of employment), then in lieu of the
treatment described in Sections 2 and 3 of this Addendum, the Participant
’ s estate shall immediately (or as soon as practicable following the
truncated Performance Period as described below) become entitled to receive the greater of (i) one hundred percent (100%) of the number of
Performance Shares granted in this Award (without regard to actual performance), plus any additional Performance Shares credited as dividend
equivalents under Section 6 of the Award Agreement or (ii) the full number of Performance Shares that would have been earned based on actual
performance measured by reference to the truncated Performance Period described in Section 4(b) of this Addendum. In the event of the
Participant
’ s death at any time following the end of the Performance Period while the Award remains outstanding (including if such death occurs
after the Participant
’ s termination of employment), then the Participant ’ s estate shall immediately receive his vested and earned Performance Shares
as determined pursuant to Sections 2 and 3 of this Addendum; provided that if the Participant was employed immediately prior to his death, then he
shall be deemed to have been fully vested in the final tranche of his Award and such tranche shall be immediately paid.
(b)
Truncated Performance Period . For purposes of measuring actual performance achievement in the event of the Participant ’ s
death prior to the end of the Performance Period:
(i) If the Participant
’ s death occurs before January 1, 2017, the Performance Period shall be the one - year period starting January 1,
2015 and ending December 31, 2015.
(ii) If the Participant ’ s death occurs during the year commencing January 1, 2017 and ending December 31, 2017, the Performance