Employment Agreement - Smith Barney Shearson Inc., The Travelers Inc. and Robert F. Greenhill
AMENDMENT TO EMPLOYMENT AGREEMENT
Amendment dated as of March 29, 1994 (the "Amendment")
to the Employment Agreement dated June 23, 1993 (the "Employment
Agreement") by and among Smith Barney Shearson Inc., a Delaware
corporation, formerly known as Smith Barney, Harris Upham & Co.
Incorporated (the "Company"), The Travelers Inc., a Delaware
corporation formerly known as Primerica Corporation and the sole
common stockholder of the Company ("The Travelers"), and Robert
F. Greenhill (the "Executive").
WHEREAS, the parties hereto have previously entered
into the Employment Agreement; and
WHEREAS, the parties hereto desire to amend such
Employment Agreement in light of recent changes to the Internal
Revenue Code of 1986, as amended.
NOW, THEREFORE, the parties hereto, each intending to
be legally bound, do hereby agree as follows:
1. Effective upon the mailing of the definitive proxy
statement (the "Proxy Statement") for the 1994 Annual Meeting of
Stockholders (the "Annual Meeting") of The Travelers (which
mailing is expected to occur on or about March 29, 1994),
Paragraphs 5(a) and 5(b) of the Employment Agreement are deleted.
2. Immediately upon approval by the stockholders at
the Annual Meeting of The Travelers Inc. Executive Performance
Compensation Plan, such Paragraphs 5(a) and 5(b) shall be
replaced with new Paragraphs 5(a) and 5(b), as described in
Article V of Annex B to the Proxy Statement and as set forth in
Attachment A hereto, with an effective date of January 1, 1994.
3. In the event that such stockholder approval is not
obtained, the Company and Executive shall enter into good faith
negotiations to enter into a mutually satisfactory replacement
for such Paragraphs 5(a) and 5(b).
4. Except as expressly modified by this Amendment, all
terms of the Employment Agreement in effect on the date hereof
shall remain in full force and effect.
5. This Amendment may be executed in one or more
counterparts, each of which shall be deemed to be an original but
all of which together will constitute one and the same
instrument.
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IN WITNESS WHEREOF, the parties have executed this
Amendment as of the date first above written.
SMITH BARNEY SHEARSON INC.
By: /s/ Barry L. Mannes
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Name: Barry L. Mannes
Title: Executive Vice President
THE TRAVELERS INC.
By: /s/ James Dimon
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Name: James Dimon
Title: President, Chief Financial
Officer and Chief
Operating Officer
/s/ Robert F. Greenhill
---------------------------------
Robert F. Greenhill
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ATTACHMENT A
to Amendment to
Employment Agreement
dated as of March 29, 1994
(a) Compensation. During the Term, the Company
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shall pay or cause to be paid to the Executive (x) an
annual base salary of $995,000 plus (y) a bonus
(together, the "Compensation") for each fiscal year of
the Company equal to the sum of (i) 2% of the After-Tax
Earnings (as hereinafter defined) for such fiscal year
from $49,750,000 up to and including $750,000,000 of
such After-Tax Earnings, (ii) 1.5% of the After-Tax
Earnings in excess of $750,000,000 up to but not
exceeding $1 billion and (iii) 1% of the After-Tax
Earnings in excess of $1 billion provided that if the
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After-Tax Earnings for such fiscal year does not exceed
$100 million, then Executive shall not be entitled to a
bonus. The Compensation shall be subject to increases
from time to time at the sole discretion of the Board
of Directors of the Company. For purposes of this
Agreement, "After-Tax Earnings" for any fiscal year
shall mean the aggregate of (i) the consolidated after-
tax net income of Smith Barney Shearson Holdings Inc.
("SBSH") and its subsidiaries, (ii) for so long as
Greenwich Street Capital Partners Inc. ("GSCP") shall
be a subsidiary of The Travelers and the Executive is
employed by the Company, the after-tax net income of
GSCP, and (iii) the after-tax net income of any other
affiliate of The Travelers with which the Executive has
a relationship similar to that with GSCP with respect
to corporate organization, hiring of employees, setting
of policies or operating guidelines (GSCP and such
other entities referred to collectively as "The
Travelers Entities"), after deduction of the base
salary but prior to deducting the portion of
Compensation in excess of base salary and (except as
otherwise provided in the next sentence with respect to
the years 1993 and 2000) in each case as reflected on
its audited financial statements for such fiscal year
prepared in accordance with generally accepted
accounting principles ("GAAP") consistently applied
and certified by independent public accountants
(provided that, if any of The Travelers Entities shall
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not otherwise cause to be prepared audited financial
statements, the financial statements of any such Entity
included in the financial statements of The Travelers
filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), shall be used for these
purposes. The Company shall pay or cause to be paid
to the Executive the base salary and that portion of
Compensation based upon the After-Tax Earnings of SBSH
and its subsidiaries, and
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The Travelers shall pay or cause to be paid to the
Executive that portion of Compensation based upon the
After-Tax Earnings of The Travelers Entities. With
respect to the period from the Commencement Date to
December 31, 1993 (the "1993 Stub Period") and the
period from January 1, 2000 to the last day of the Term
(the "2000 Stub Period"), the Compensation payable to
the Executive for such periods shall be equal to one-
half of the Compensation determined in accordance with
the formula set forth in the first sentence of this
Paragraph 5(a). For this purpose, After-Tax Earnings
in such formula shall be deemed to be equal to the
product of two (2) multiplied by the After-Tax Earnings
for the fiscal quarters ended September 30, 1993 and
December 31, 1993 (in the case of the 1993 Stub Period)
and the After-Tax Earnings for the fiscal quarters
ended March 31, 2000 and June 30, 2000 (in the case of
the 2000 Stub Period), in each case as reflected in the
interim financial statements of the relevant entities
for such fiscal quarters prepared in accordance with
GAAP consistently applied. For any partial fiscal year
(whether preceding or following the Date of Termination
(as defined in Paragraph 9(f)), the Compensation for
such partial fiscal year shall be calculated by
multiplying the Compensation otherwise calculated for
the full fiscal year by a fraction, the numerator of
which is the number of calendar months in such partial
fiscal year (including, in the case of the partial
fiscal year preceding the Date of Termination, the
month in which the Date of Termination occurs) and the
denominator of which is 12.
(b) Time of Payment. The Compensation shall be paid
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to the Executive as follows:
(i) The Company shall pay to the Executive the
base salary in monthly or more frequent installments in
accordance with the payroll practices for senior
executives of the Company in effect at the time of
payment; and
(ii) Promptly after the relevant audited
financial statements are completed (but in no event
later than the 90th day following the end of each year
or in the case of the 1993 Stub Period and the 2000
Stub Period the applicable Stub Period, as the case may
be) and following the certification by the Nominations
and Compensation Committee of The Travelers Board of
Directors that the applicable performance goals have
been met as required by Section 162(m) of the Internal
Revenue Code of 1986, as amended, the Company shall pay
or cause to be paid to the Executive an amount equal to
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the bonus for such year calculated pursuant to
Paragraph 5(a).
The parties agree that, with regard to the portion of
the Compensation based upon the earnings of SBSH and its
subsidiaries, the financial statements included in SBSH's
periodic filings under the Exchange Act shall be used for
determining the Compensation under this Agreement. With
regard to the portion of the Compensation based upon the
After-Tax Earnings of The Travelers Entities, and in the
event that SBSH ceases to be a reporting company during the
Term, the financial statements of The Travelers Entities and
SBSH and its subsidiaries included in The Travelers'
financial statements filed under the Exchange Act shall be
used for determining the respective portion or portions
of such Compensation unless the parties agree on an
alternate arrangement for providing periodic financial
statements for purposes of this Paragraph.
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