The Travelers Benefit Equalization Plan

Exhibit 10.36


THE TRAVELERS BENEFIT EQUALIZATION PLAN


(As Amended and Restated Effective as of January 1, 2009)


TABLE OF CONTENTS


Page


ARTICLE I INTRODUCTION

1

1.1

Plan; Purpose

1

1.2

Non-Qualified " Top-Hat" Plan

1

1.3

Plan Document

1

1.4

Effective Date of Document

2


ARTICLE II DEFINITIONS AND CONSTRUCTION

2

2.1

Definitions

2

2.2

Choice of Law

5


ARTICLE III PARTICIPATION

5

3.1

Participation

5


ARTICLE IV SUPPLEMENTAL BENEFITS

6

4.1

Supplement Benefits

6

4.2

Derivation of Supplemental Benefits

6

4.3

Time and Form of Payment

7

4.4

Earnings Crediting for Accounts

9

4.5

Special Rules

10


ARTICLE V DISTRIBUTIONS AFTER DEATH

10

5.1

Survivor Benefits Prior to Benefit Commencement Dates

10

5.2

Payment After Benefit Commencement Dates

11

5.3

Beneficiary Designation

11

5.4

No Other Survivor Benefits

12


ARTICLE VI CONTRACTUAL OBLIGATIONS AND FUNDING

12

6.1

Payment of Benefits

12

6.2

Corporate Transactions

12

6.3

Funding

12


ARTICLE VII AMENDMENT AND TERMINATION OF PLAN

13

7.1

Right to Amend or Terminate

13

7.2

Limits on Effect of Amendment or Termination

14


ARTICLE VIII ADMINISTRATION/CLAIMS PROCEDURES

14

8.1

Administration

14

8.2

Correction of Errors And Duty to Review Information

15

8.3

Claims Procedure

15

8.4

Indemnification

16

8.5

Exercise of Authority

16

8.6

Telephonic or Electronic Notices and Transactions

17


ARTICLE IX MISCELLANEOUS

17

9.1

Nonassignability

17

9.2

Withholding

17

9.3

Successors of Travelers

17

9.4

Employment Not Guaranteed

17

9.5

Gender, Singular and Plural

17

9.6

Captions

17

9.7

Validity

17

9.8

Waiver of Breach

17

9.9

Notice

18

9.10

Facility of Payment

18


APPENDIX A EXECUTIVE SAVINGS PLUS

A-1


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THE TRAVELERS BENEFIT EQUALIZATION PLAN


ARTICLE I


INTRODUCTION


1.1 PLAN; PURPOSE . THE TRAVELERS BENEFIT EQUALIZATION PLAN is sponsored by The Travelers Companies, Inc. to attract high-quality executives and to provide eligible executives with the additional benefits they would have received under the Retirement Plan but for the limits imposed on the compensation that can be taken into account under the Retirement Plan (Code a7 401(a)(17)), the limits imposed on the benefits accrued and payable under the Retirement Plan (Code a7 415(b)), or the reduction in the compensation base under the Retirement Plan as a result of an election to reduce compensation and make elective deferrals under a nonqualified deferred compensation plan of the Company or an Affiliate.


The Plan was initially adopted effective January 1, 1976 as The St. Paul Companies, Inc. Excess Benefit Plan, and has been amended and restated from time to time thereafter. Effective January 1, 2005, the Plan was amended to " freeze" the Executive Savings Plan component of the Plan (which now appears in Appendix A). Effective January 1, 2009, the Plan is amended and restated to bring the Plan into full documentary compliance with Code a7 409A, and also to reflect the merger of the Travelers Benefit Equalization Plan with and into the Plan. From January 1, 2005 to its restatement effective January 1, 2009, the Plan was operated in good faith compliance with Code a7 409A.


Participants in the Plan who are not Active Participants at any time on or after January 1, 2005 - which is the effective date of Code a7 409A - are intended to be " grandfathered" and thus exempt from the application of Code a7 409A. The rights of such grandfathered Participants will be determined in accordance with the provisions of the Plan in effect prior to January 1, 2005, as such terms may be amended in a manner that preserves " grandfather" status under Code a7 409A.


1.2 NON-QUALIFIED " TOP-HAT" PLAN .


1.2.1 ERISA Status . The Plan is a " top-hat" plan - that is, an unfunded plan maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees within the meaning of ERISA a7a7 201(2), 301(a)(3) and 401(a)(1), and therefore is exempt from Parts 2, 3 and 4 of Title I of ERISA.


1.2.2 Compliance with Code a7 409A . The Plan also is a nonqualified deferred compensation plan that is intended to meet the requirements of paragraph (2), (3) and (4) of Code a7 409A. The terms and provisions of the Plan should be interpreted and applied in a manner consistent with such requirements, including the regulations and other guidance issued under Code a7 409A.


1.3 PLAN DOCUMENT .


1.3.1 Plan Documents . The Plan consists of this document, any appendix to this document and any document that is expressly incorporated by reference into this document.


1.3.2 Modifications by Employment or Similar Agreement . The Company or an Affiliate may be a party to an employment or similar agreement with a Participant, the terms of which may enhance or modify in some respect the benefits provided under this Plan, including, but not necessarily limited to, an enhancement to or modification of the benefit amount, payment forms and/or other rights and features of the Plan. The Plan consists only of this document and the core documents referenced in Sec. 1.3.1. Accordingly, any contractual rights that a Participant may have to any enhancement or modification called for under an employment or similar agreement are rights that derive from such agreement and not directly from the Plan. Nonetheless, the Plan will be applied in a manner that


takes into account any enhancements or modifications called for under an enforceable employment or similar agreement as if such provisions were part of the Plan; provided that, no change can be made to the Plan by means of an employment or similar agreement that would not have been allowed by means of an amendment to the Plan (for example, an amendment inconsistent with Code a7 409A).


1.4 EFFECTIVE DATE OF DOCUMENT . The Plan (as amended and restated in this document) is effective January 1, 2009, to apply to accruals on and after that date, and also to accruals prior to that date with respect to any Participant (or Beneficiary) who has not commenced payment of his/her benefits under the Plan.


ARTICLE II


DEFINITIONS AND CONSTRUCTION


2.1 DEFINITIONS .


2.1.1 " Account" means a hypothetical record-keeping account to which the value of a Participant' s Excess Benefit is credited following Separation from Service to ultimately derive the Supplemental Benefit.


2.1.2 " Administrative Committee" means the committee chartered by the Company to execute the Company' s duties and responsibility as administrator of the Company' s qualified and non-qualified deferred compensation plans.


2.1.3 " Actuarial Equivalent" means a benefit having the same value as the benefit which it replaces, determined using the actuarial assumptions or factors specified in the Plan, or if no assumptions or factors are specified, using the assumptions or factors used for the most comparable purpose under the Retirement Plan.


2.1.4 " Affiliate" means any business entity that is required to be aggregated and treated as one employer with the Company under Code a7 414(b) or (c) (and for purposes of determining whether a Separation from Service has occurred, a standard of " at least 80 percent" will be used to identify an Affiliate under Code a7 414(b) and (c) notwithstanding the default standard of " at least 50 percent" found in Treas. Reg. a7 1.409A-1(h)(3)).


2.1.5 " Beneficiary" means a person or persons designated as such pursuant to Sec. 5.3.


2.1.6 " Benefit Commencement Date" means the date on which a Supplemental Benefit is paid in the form of a lump-sum, or starts to be paid in the form of an annuity or in installments.


2.1.7 " Benefits Investment Committee" means the committee chartered by the Company to manage and invest the assets of the Company' s qualified and non-qualified deferred compensation plans.


2.1.8 " Board" means the Board of Directors of the Company.


2.1.9 " Code" means the Internal Revenue Code of 1986, as amended.


2.1.10 " Company" means The Travelers Companies, Inc.


2.1.11 " Domestic Partner" means a person of the same sex or opposite sex who satisfies the following conditions in relation to the Participant:


(a) The person and the Participant have a long-term, intimate, committed relationship with each other, which is demonstrated to be one of mutual caring, affection, and responsibility for each other' s common welfare;


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(b) The person and the Participant hold themselves out as in a relationship similar to marriage;


(c) The person and the Participant intend to continue our relationship with each other indefinitely;


(d) The person and the Participant meet the following marital status requirements:


(i) If the person and the Participant are of the opposite sex, both the person and the Participant are unmarried to each other or anyone else;


(ii) If the person and the Participant are of the same sex, both the person and the Participant are unmarried to anyone else;


(e) The person and the Participant are each other' s sole domestic partner;


(f) The person and the Participant both are at least 18 years of age and are capable to enter into a contract;


(g) The person and the Participant are not related by blood closer than permitted by marriage law in the Participant' s state of residence;


(h) The person and the Participant share a principal residence and have lived together for at least six consecutive months (and this six-month period immediately precedes the date the Participant completes a domestic partnership affidavit);


(i) The person and the Participant are jointly responsible to each other for basic living expenses; and


(j) The following timing requirements are met (as applicable):


(i) At least six (6) months has elapsed since the later of the divorce of the person or the Participant from a previous spouse, or the death of the previous spouse of the person or the Participant; and


(ii) At least six (6) months has elapsed since the date the Participant notified the Company that his/her previous domestic partnership ended.


A Participant must file an affidavit of domestic partner status attesting to the above with the Company.


2.1.12 " Eligible Employee" means any Employee of the Company or an Affiliate (while it is an Affiliate) who is:


(a) A participant in the Retirement Plan; and


(b) A Highly Compensated Employee (as defined in the Retirement Plan).


The Company, in its sole and absolute discretion, may determine that an Employee described above will not be an Eligible Employee.


The Plan is intended to cover only those Employees who are in a select group of management or highly compensated employees within the meaning of ERISA a7a7 201(2), 301(a)(3) and 401(a)(1); and, accordingly, if any interpretation is issued by the Department of Labor that would exclude any Employee from satisfying that requirement, such Employee immediately will cease to be an Eligible Employee.


2.1.13 " Employee" means any common-law employee of the Company or an Affiliate (while it is an Affiliate).


2.1.14 " ERISA" means the Employee Retirement Income Security Act of 1974, as amended.


2.1.15 " Excess Benefit" means the value calculated under the applicable provisions of Sec. 4.2.1 to generally reflect the benefits lost under the Retirement Plan as a result of certain tax-law limits, and which is used to derive the Supplemental Benefit payable under this Plan.


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2.1.16 " Normal Retirement Age" means age sixty-five (65).


2.1.17 " Participant" means Active Participant or Inactive Participant. An " Active Participant" is described in Article III; and an " Inactive Participant" is any former Active Participant who has not yet received (or deemed to have received) full payment of his/her Supplemental Benefit under Plan.


2.1.18 " Plan" means The Travelers Benefit Equalization Plan.


2.1.19 " Plan Year" means the calendar year.


2.1.20 " Preserved Legacy Travelers Supplemental Benefit" means the supplemental benefit that would have been payable to a participant under the Travelers Benefit Equalization Plan if he/she had terminated employment on December 31, 2004; provided that, if on such date a participant would have been entitled to an enhanced early retirement benefit, this benefit will be calculated as if the Participant were entitled instead to a normal retirement benefit.


2.1.21 " Retirement Plan" means The Travelers Pension Plan.


2.1.22 " Separation from Service" means that the Company and the Participant anticipate that the Participant will perform no future services (as an employee or a contractor) for the Company and its Affiliates or that the level of services (as an employee or contractor) the Participant will perform for the Company and its Affiliates will permanently decrease to twenty percent (20%) or less of the average level of services over the immediately preceding thirty-six (36) month period (or the full period of services if the Participant has been providing services to the Company or an Affiliate for less than thirty-six (36) months). In the event of a bona fide leave of absence, a Separation from Service will be deemed to have occurred on the date that is six (6) months (or in the case of a disability leave, the maximum duration of the leave under the Company' s policies in effect at the time the disability leave begins (the " maximum disability leave period" ), provided, however, that the maximum disability leave period may not exceed twenty-nine (29) months) following the start of such leave, provided that , if the Participant has a statutory or contractual right to return to active employment that extends beyond the end of such six (6) month period or the maximum disability leave period, the Separation from Service will be deemed to have occurred upon the expiration of such statutory or contractual right, and if the individual has a Termination of Employment during such six (6) month period or the maximum disability leave period, the Separation from Service will be deemed to have occurred on such Termination of Employment. A " disability" leave for this purpose means an absence due to a 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 six (6) months, where such impairment causes the Participant to be unable to perform the duties of his/her position of employment or any substantially similar position.


Whether a Separation from Service occurs in the case of a corporate transaction may be affected by the provisions of Sec. 6.2.


2.1.23 " Specified Employee" means an Employee who at any time during the twelve-month period ending on the identification date was a " key employee" as defined under Code a7 416(i) (applied in accordance with the regulations thereunder, but without regard to paragraph (5) thereof).


The Company may adopt a Specified Employee Identification Policy which specifies the identification date, the effective date of any change in the key employee group, compensation definition and other variables that are relevant in identifying Specified Employees, and which may include an alternative method of identifying Specified Employees consistent with the regulations under Code a7 409A. In the absence of any such policy or policy provision, for purposes of the above, the " identification date" is each December 31 st , and an Employee who satisfies the above conditions will be considered to be a " Specified Employee" from April 1 st following the identification date to March 31 st of the following year, and the compensation and other variables, and special rules for corporate events and special


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rules relating to nonresident aliens, that is necessary in identifying Specified Employees will be determined and applied in accordance with the defaults specified in the regulations under Code a7 409A. Any Specified Employee Identification Policy will apply uniformly to all nonqualified deferred compensation plans subject to Code a7 409A that are maintained by the Company or an Affiliate.


2.1.24 " Spouse" means a person of the opposite sex to whom the Participant is legally married under applicable state law as of the determination date (including a common-law spouse in any state that recognizes common-law marriage, provided that acceptable proof and certification of common-law marriage has been received by the Company).


2.1.25 " Supplemental Benefit" means the benefit payable to a Participant under the provisions of the Plan.


2.1.26 " Termination of Employment" means that the common-law employer-employee relationship has ended between the individual and the Company and its Affiliates, as determined under the employment policies and practices of the Company (including by reason of voluntary or involuntary termination, retirement, death, expiration of and failure to return from a recognized leave of absence, or otherwise). A Termination of Employment does not occur merely as a result of transfer of employment from one Affiliate to another Affiliate, or from the Company to an Affiliate or from an Affiliate to the Company.


2.1.27 " Valuation Date" means any date on which trading occurs on the New York Stock Exchange.


2.2 CHOICE OF LAW . The Plan will be governed by the laws of the State of Minnesota to the extent that such laws are not preempted by the laws of the United States. Any legal dispute with respect to a right or entitlement under the Plan that is not covered by the claims and arbitration process required by the Plan, must be submitted to the United States District Court for the District of Minnesota


ARTICLE III


PARTICIPATION


3.1 PARTICIPATION .


3.1.1 Active Participants . All Eligible Employees will be Active Participants, and enrollment is not required to participate in the Plan.


3.1.2 End of Active Participation and Participation . An Active Participant will continue as an Active Participant until the earlier of the following:


(a) The date he/she ceases to be an Eligible Employee (for any reason, including Separation from Service); or


(b) The date on which the Plan is terminated and liquidated pursuant to Sec. 7.2.2.


A Participant will continue as a Participant until having received a full distribution of the benefit due under the Plan.


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ARTICLE IV


SUPPLEMENTAL BENEFITS 4.1 SUPPLEMENT BENEFITS . A Participant' s Supplemental Benefit will be derived from his/her Excess Benefit and/or Preserved Legacy Travelers Supplemental Benefit as determined under Sec. 4.2, and will be paid at the time and in the form provided under Sec. 4.3.


4.2 DERIVATION OF SUPPLEMENTAL BENEFITS .


4.2.1 Excess Benefit . A Participant' s Supplemental Benefit will be derived from his/her Excess Benefit, which is determined as follows:


(a) Cash Balance Only Participant . If the Participant is a " Cash Balance Participant" (as defined below) and is not described in (b) or (c), his Excess Benefit is a single lump-sum amount payable equal to A minus B, where:


" A" = The balance that would have been in the Participant' s Cash Balance Account under the Retirement Plan if credits had been determined without regard to:


(i) The limit on compensation taken into account under the Retirement Plan under Code a7 401(a)(17); and


(iii) The exclusion of amounts deferred by the Participant under The Travelers Deferred Compensation Plan (or other non-qualified deferred compensation plan maintained or previously maintained by the Company or Affiliate) from the compensation base used in determining the benefit accrued and payable under the Retirement Plan.


" A" will also include the difference, if any, between the lump-sum benefit that would be payable under the Retirement Plan without regard to the benefit limits of Code a7 415(b) and the lump-sum benefit actually payable under the Plan.


" B" = The actual balance of the Participant' s Cash Balance Account under the Retirement Plan.


A Participant is a " Cash Balance Participant" for this purpose if he/she has a Cash Balance Accrued Benefit under the Retirement Plan.


(b) Grandfathered Traditional Formula Only Participant - Retirement Eligible . If the Participant is a " Grandfathered Traditional Formula Participant" (as described below) and is not described in (a), and he/she is entitled to an immediate commencement annuity under the Retirement Plan (or would be so entitled if he/she had a Termination of Employment), his/her Excess Benefit is an immediate single life annuity equal to A minus B, where:


" A" = The immediate single life annuity that would be payable under the Retirement Plan (including any early commencement subsidies that would be payable at that point) if such benefit had been determined without regard to:


(i) The limit on compensation taken into account under the Retirement Plan under Code a7 401(a)(17);


(ii) The limit on the benefits payable under the Retirement Plan under Code a7 415(b); and


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(iii) The exclusion of amounts deferred by the Participant under The Travelers Deferred Compensation Plan (or other non-qualified deferred compensation plan maintained or previously maintained by the Company or Affiliate) from the compensation base used in determining the benefit accrued and payable under the Retirement Plan.


" B" = The actual immediate single life annuity under the Retirement Plan.


A Participant is a " Grandfathered Traditional Formula Participant" for this purpose if he/she has a Grandfathered Traditional Formula ...