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Non-employee Director Stock Retainer Plan

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THE ST. PAUL COMPANIES, INC.
NON-EMPLOYEE DIRECTOR STOCK RETAINER PLAN


1. PURPOSE. The purpose of the Non-Employee Director Stock Retainer Plan (the "Plan") is to advance the interests of The St. Paul Companies, Inc. (the "Company") and its shareholders by providing non-employee directors with the ability to increase their proprietary interest in the Company's long-term success and progress and more closely identify themselves with the interests of the Company's shareholders through the payment of all or a portion of their annual retainer in the form of common stock of the Company that is subject to certain service-related restrictions.


2. ADMINISTRATION. The Plan shall be administered by a committee (the "Committee") consisting solely of three or more members of the Board of Directors of the Company (the "Board"). All questions of interpretation of the Plan or of any stock issued under it shall be determined by the Committee, and such determination shall be final and binding upon all persons having an interest in the Plan. The Committee, however, shall have no power to (a) determine the eligibility for participation in the Plan or the timing, pricing, amount or other terms and conditions of stock issued to any participant, or (b) take any action specifically delegated to the Board under the Plan. Members of the Committee shall be appointed from time-to-time by the Board, shall serve at the pleasure of the Board and may resign at any time upon written notice to the Board. A majority of the members of the Committee shall constitute a quorum. The Committee shall act by majority approval of the members present at a meeting and shall keep minutes of its meetings. Action of the Committee may be taken without a meeting if the written consent of all the members is given.


3. PARTICIPATION IN THE PLAN. Directors of the Company who are not employees of the Company or any subsidiary of the Company ("Eligible Directors") shall be eligible to participate in the Plan.


4. STOCK SUBJECT TO THE PLAN.


(a) NUMBER OF SHARES. The maximum number of shares of Common Stock that shall be reserved for issuance under the Plan shall be 50,000 shares of the Company's common stock without par value (the "Common Stock"), subject to adjustment upon changes in capitalization of the Company as provided in Section 4(b) below. The maximum number of shares authorized may be increased from time-to-time by approval of the Board and, if required pursuant to Rule 16b-3 of the Securities and Exchange Commission or the applicable rules of any stock exchange, the shareholders of the Company. Shares of Common Stock that are issued under the Plan shall be applied to reduce the maximum number of shares of Common Stock remaining available for use under the Plan.


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(b) CHANGES IN STOCK. If any change is made in the terms or provisions of the Common Stock subject to the Plan (whether by reason of reorganization, merger, consolidation, recapitalization, stock dividend, stock split, combination of shares, exchange of shares, change in corporate structure or otherwise), then appropriate adjustments shall be made to the maximum number of shares subject to and reserved under the Plan.


5. ANNUAL RETAINER ELECTION.


(a) ELECTION TO RECEIVE STOCK. Each Eligible Director shall be given an opportunity by the Company, on an annual basis, to elect to receive all or a portion of his or her Annual Retainer (as defined below) for the succeeding calendar year in the form of shares of Common Stock that are subject to the service-related restrictions described in Section 5(b) below (the "Restricted Stock"). An election pursuant to this Section 5(a) must be in writing, must be effective before January 1 of the calendar year to which the election relates and must be irrevocable. Such an election will entitle the Eligible Director to be issued a number of shares of Restricted Stock determined by dividing 110% of the Annual Retainer for which the election is being made by the average of the Fair Market Value (as defined in Section 5(e) below) of one share of Common Stock as
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