Employment Agreement - Travelers Corp. and Edward H. Budd
December 21, 1993
Mr. Edward H. Budd
The Travelers Companies
One Tower Square
Hartford, CT 06183
Dear Ed:
This letter sets forth our agreement with respect to
your continued involvement with The Travelers Corporation
("The Travelers") following the merger of The Travelers with
Primerica Corporation pursuant to an Agreement and Plan of
Merger dated as of September 23, 1993 (the "Merger").
Following the Merger, you will serve as Chairman of
The Travelers Insurance Group Inc. at a salary equal to your
current salary at a rate of $800,000 per annum. You will con-
tinue to be eligible for a discretionary annual bonus and for
welfare, fringe and other employee benefits on the same terms
and conditions as other senior executives of the surviving
company in the Merger (the "Company"). Following the Merger,
you will also serve as a member of the Board of Directors (the
"Board") of the Company, and as Chairman of the Executive
Committee of the Board.
You have previously received awards of stock
options, restricted stock and performance stock pursuant to
the Company's 1988 Stock Incentive Plan and 1982 Stock Option
Plan. Those awards will continue outstanding, under the terms
and conditions in effect on the date of this letter, except
that upon the consummation of the Merger, your currently
outstanding vested and unvested options (the "Rollover
Options") will be assumed by the Company pursuant to the terms
and conditions set forth in the Primerica Prospectus
Supplement, dated December 15, 1993, as modified by the
provisions of this letter. The approval of the Merger by the
Company's shareholders will be treated as a "Change in
Control" for purposes of your restricted stock and performance
stock awards. As a result, all of your shares of "time lapse"
restricted stock and 50% of your shares of "performance" re-
stricted stock will vest at the time of such shareholder ap-
proval.
<PAGE>
Immediately following the Merger, but in no event
later than January 10, 1994, you will be granted options under
the Primerica Corporation Stock Option Plan (the "New
Options") to purchase 50,000 shares of common stock of the
Company ("Common Stock") at an exercise price per share equal
to the fair market value thereof on the date of grant (as de-
termined pursuant to the rules established by the Committee
administering such Plan), pursuant to the customary form of
agreement under such Plan. The New Options will become ex-
ercisable in five equal installments on the anniversary of the
date of grant (or earlier in accordance with the terms of such
Plan), and will remain exercisable through January 15, 1999
(subject to extension as described below). In addition,
following the Merger, you will be granted under the Primerica
Corporation Capital Accumulation Plan (the "CAP Plan"),
pursuant to the customary form of agreement under the CAP
Plan, an aggregate of 40,000 shares of Common Stock, which
shares shall become fully vested and no longer subject to re-
striction or risk of forfeiture upon December 31, 1995 (or
earlier in accordance with the terms of the CAP Plan) regard-
less of whether your employment with the Company terminates
prior to such date, unless your employment with the Company is
involuntarily terminated by the Company for "cause" (as cur-
rently defined in The Travelers Severance Plan for Officers).
If your employment terminates for any reason
(including without limitation retirement, death, disability,
voluntary termination, or involuntary termination), you will
be entitled to benefits under The Travelers Severance Plan for
Officers, as in effect at the time of such termination, as if
you had been terminated without cause.
In addition, you will be entitled to receive pension
benefits under The Travelers qualified and nonqualified
retirement plans for service since 1955 as an employee of The
Travelers. You will also receive all benefits and amounts to
which you are entitled as a result of your service as a direc-
tor of The Travelers, and, additionally, as a director and
chief executive officer of The Travelers with service credit
to age 65. The actual amount you receive will depend on the
date of your termination and the benefit form you select. You
may elect to commence receiving such pension benefits im-
mediately upon termination of your employment for any reason
(such amounts to be determined in accordance with the plans as
if you retired on such date with the service credit provided
for herein). To the extent that the additional years of age
and service credit and the election to commence receiving
benefits referred to above are not permitted to be taken into
account for purposes of any qualified retirement plans, the
Company shall pay the additional amounts that would have been
payable to you (or your beneficiary) under such qualified
retirement plan if such additional years and such election had
been permitted, at the times and in the manner that such
amounts would otherwise have been paid under such plan. The
payments required by the preceding sentence may be made
through a nonqualified retirement plan.
<PAGE>
All New Options and Rollover Options will continue
to vest in accordance with the vesting schedule and applicable
plan provisions in effect immediately before the termination
of your employment and will remain exercisable through January
15, 1999 (in the case of New Options) and December 31, 1998
(or, if sooner, until the final expiration date of any such
Rollover Option) (in the case of Rollover Options); provided,
--------
however, that if on January 15, 1999, you reasonably determine
-------
that the exercise of any New Option and/or the sale of any
Common Stock issuable upon exercise thereof could subject you
to liability under the federal securities laws, such January
15, 1999 date will be automatically extended until 30 days
following the date on which you reasonably determine that such
risk has terminated. If necessary under the terms of the
applicable plan in order to permit the vesting or
exercisability of New Options or Rollover Options in ac-
cordance with the preceding sentence, the Company will
continue to maintain your status as an employee (but such
status shall not preclude your receipt of benefits under The
Travelers Severance Plan for Officers and pension benefits, as
set forth above).
Finally, the provisions of Section XI of The Travel-
ers Severance Plan for Officers (entitled "Certain Additional
Payments By the Company") as in effect on the date hereof
shall apply with respect to all payments, benefits, awards and
distributions by The Travelers, the Company, The Travelers
Insurance Group Inc., Primerica Corporation and/or any of
their respective affiliates to you or for your benefit,
whether pursuant to this letter or otherwise.
Please indicate your acceptance of the terms and
conditions set forth in this letter by signing the enclosed
copy of this letter in the space provided below and returning
it to me.
<PAGE>
Very truly yours,
Primerica Corporation
By: /s/ Charles O. Prince,III
-------------------------
Name: Charles O. Prince, III
Title: Senior Vice President
and General Counsel
AGREED TO AND ACCEPTED:
/s/ Edward H. Budd
------------------
Edward H. Budd