Employment Agreement - Citigroup Inc. and Robert E. Rubin
October 26, 1999
PERSONAL AND CONFIDENTIAL
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Mr. Robert E. Rubin
Citigroup
153 East 53rd Street C 4th Floor
New York, NY 10043
Dear Bob:
We are pleased to offer you employment as Director, Chairman of the
Executive Committee of the Board of Directors and member of the Office of the
Chairman of Citigroup Inc. (together with its direct and indirect successors,
the "COMPANY" and, together with its subsidiaries, "CITIGROUP"). Your employment
will commence as soon as possible and will continue until terminated by you, by
the Company or by reason of your death.
Working with us in the newly constituted Office of the Chairman consisting
exclusively of you and the Chairmen of the Board of Directors of the Company,
you will participate in strategic managerial and operational matters of
Citigroup worldwide, but will not have line responsibilities or any other
reporting relationships.
Your compensation will consist of the following:
o Salary, paid in accordance with the Company's standard
policies in effect from time to time (currently semi-monthly),
at an annual rate of not less than $1.0 million.
o Guaranteed level of incentive compensation for calendar years
1999 (subject to proration as described below), 2000 and,
subject to any extraordinary circumstances drastically
negatively affecting Citigroup reported operating results and
in the event of such circumstances and results only to the
extent of any similar effect on total compensation (including
incentive compensation awards) made to the other members of
the Office of the Chairman, 2001 of not less than $14.0
million, of which up to 25% (or, to the extent the other
members of the Office of the Chairman are similarly affected,
an amount equal to 25% of total compensation) shall be paid to
you in the form of awards of restricted stock (or, at your
election, deferred stock and/or options) pursuant to the
Travelers Group Capital Accumulation Plan, as in effect from
time to time
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("CAP"), including the discounted price provisions thereof;
provided that the vesting period with respect to any such
awards shall be the period applicable to contemporary such
awards made to the other members of the Office of the
Chairman, but in no event more than three years. Such
incentive compensation shall be paid and awarded at the same
time as other such incentive compensation and awards made for
the respective year to senior executives of the Company, but
in no event later than paid or awarded to the other members of
the Office of the Chairman. Notwithstanding the foregoing, to
the extent necessary to avoid any loss of deduction with
respect thereto under Section 162(m) of the Internal Revenue
Code or any applicable successor provision, payment of such
incentive compensation (other than CAP awards) shall be
deferred as described in Schedule A attached hereto. Your
incentive compensation for the year 1999 will be a prorated
portion (i.e., 18.36%) of the foregoing annual guaranteed
amount. Incentive compensation with respect to any calendar
year after 2001 will be paid in accordance with the Citigroup
1999 Executive Performance Plan or any applicable successor
plan.
o A grant made to you on the date hereof of 1.5 million options
on Citigroup common stock, pursuant to the Citigroup 1999
Stock Incentive Plan ("SIP"), with an exercise price equal to
the closing market price (composite transactions) on October
25, 1999. In addition, an additional grant of 1.5 million
options of Citigroup common stock (or, if a stock split,
recapitalization or other event has occurred prior to such
additional grant, an amount of such options adjusted to
reflect such event) ("SECOND OPTION"), also pursuant to SIP
(as then in effect), with an exercise price equal to the
closing market price (composite transactions) on the day
before the date of grant, which will be made not later than
October 2000 by the Personnel, Compensation and Directors
Committee.
o All options granted to you shall have a term of not less than
ten years, shall vest and become exercisable at a rate of at
least 20% per year and the shares received upon exercise shall
be fully vested, except as required in connection with reload
eligibility or pursuant to CAP to the same extent in either
case as applicable to the other members of the Office of the
Chairman.
o In the event of a Change of Control, as defined in either CAP
or SIP, you will be accorded not less favorable treatment in
terms of compensation and awards under the Citigroup
compensation and benefit plans and arrangements, as applies to
the other members of the Office of the Chairman, and, in light
of your unique circumstances, you will also be entitled to
payments sufficient to reimburse you fully on an after-tax
basis
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for any tax under Section 4999 of the Internal Revenue Code or
any applicable successor provision, as well as any costs,
including professional fees, associated with determining and
resolving the application of such tax to you.
Notwithstanding anything to the contrary in CAP, SIP, the Citigroup 1999
Executive Performance Plan, any successor plans or any award agreements executed
pursuant to those plans, we have also agreed on the following provisions:
o If any of the events listed in Part A of Schedule B attached
hereto should occur, you shall be entitled to terminate your
employment by notice in writing delivered after you have had a
reasonable opportunity to evaluate such event and you will
receive (i) continued payment of salary through the later of
December 31, 2001 or 12 months following such date of
termination (the "SEVERANCE PERIOD"), (ii) continued payment
with respect to the Severance Period of incentive compensation
equal to the guaranteed incentive compensation for calendar
years 2000 and 2001 (if not already paid) and with respect to
any period after December 31, 2001 equal to the amount of
incentive compensation for the most recent calendar year
(prorated for a partial calendar year), (iii) the grant on a
fully vested basis, not later than October, 2000, of the
Second Option, if not previously granted, (iv) the immediate
lapse of all restrictions on and vesting of any restricted or
deferred stock, options or other awards made or received under
CAP, SIP or otherwise ("AWARDS"), (v) continued benefits
during the Severance Period and (vi) any payment due to you
under Schedule A attached hereto. In connection with the
foregoing, (a) any incentive compensation paid after the date
of termination will be paid without participation in CAP or
any similar program, (b) payments to you of incentive
compensation in respect of any year during the Severance
Period shall be made when similar payments are made to the
other members of the Office of the Chairman, but in no event
later than March 31 of the following year and will not be
subject to the deferred arrangement described above, (c) stock
options will be exercisable for two years following
termination of employment and (d) exercise of options
following the date of termination will not be eligible to
participate in reload grants.
o If any of the events listed in Part B of Schedule B attached
hereto should occur, then your employment will be
automatically terminated and you (or your estate) will receive
(i) payment of salary through the date of termination, (ii)
guaranteed unpaid incentive compensation prorated through the
date of termination and, if such termination occurs after
December 31, 2001, such incentive compensation payment shall
be based on the amount of incentive compensation for the most
recent
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calendar year and (iii) the immediate lapse of restrictions on
and vesting of all Awards and the grant on a fully vested
basis, not later than October 2000, of the Second Option if
not previously granted; and in this connection, clauses (a)
through (d) of the preceding paragraph shall also apply.
o If you leave employment for any reason other than a reason
specified in Schedule B attached hereto, you will receive no
continuing compensation or option vesting or exercisability
after the date of your leaving, including with respect to any
awards granted under CAP.
o Your rights, following any leaving, under any other programs
and policies of Citigroup shall be governed by the terms of
such programs and policies.
o Following any leaving of employment, you agree to maintain the
confidentiality of proprietary Citigroup information and to
not solicit any of our senior employees to leave their
employment for at least two years following the date of your
leaving.
o The provisions of CAP, SIP and any successor plans with
respect to the vesting, payment and exercisability of awards
thereunder and the treatment of such awards upon and following
termination of employment, including forfeiture and deferral
provisions, are superseded by the provisions of this letter to
the extent inconsistent herewith, except to the extent
consented to by you in writing.
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We have also agreed that, separate from your role with Citigroup and
notwithstanding anything to the contrary in any policy of the Company, including
the Citigroup Employee Handbook and the Citigroup Principles of Employment, you
will be free to continue your long personal history of involvement in public
policy issues and to engage in other charitable and civic activities; to serve
on corporate or advisory boards or in similar capacities, including with respect
to investment partnerships, (and to be compensated for the same); and to manage
your personal investments, provided that such separate activities do not
materially conflict with your new responsibilities at Citigroup.
Except as otherwise provided herein or as necessary and appropriate in
terms of governance, as a member of the Office of the Chairman, you will be
accorded the same status as the other members of the Office of the Chairman
(except with respect to non-material matters such as security and administrative
support). Thus, from the onset of your employment, you will be covered by the
same policies and be eligible to participate in the same compensation programs
and to receive the same benefits that have been or are enjoyed by other senior
executives and employees of Citigroup, including the other members of the Office
of the Chairman. Without limiting the foregoing, you will have the use of a
personal car and driver, as well as access to the Company's planes for your
business and personal needs to the same extent as the same are available to the
other members of the Office of the Chairman.
You will also be eligible to participate in a comprehensive employee
benefits program, which includes medical and dental coverage, life insurance,
disability insurance, retirement plan and 401(k) savings plan, in accordance
with their terms, most of which permit participation on the first day of your
employment.
This letter describes Citigroup's offer of employment. Any other
discussions that you have had with us are not part of our offer unless they are
described in this letter, CAP, the Citigroup 1999 Executive Performance Plan,
SIP, the Citigroup Employee Handbook or the Citigroup Principles of Employment
or are agreed upon in writing by you and the Company.
Welcome to Citigroup!
Sincerely,
/s/ John S. Reed /s/ Sanford I. Weill
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John S. Reed Sanford I. Weill
Agreed:
/s/ Robert E. Rubin Date: January 11, 2000
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Schedule B
Schedule of Termination Events
Part A
o any failure by the Company to comply with any of the provisions of
the foregoing letter or the Trust Agreement, other than an isolated,
insubstantial and/or inadvertent failure not occurring in bad faith
and which is promptly remedied by the Company after receipt of
written notice thereof given by Mr. Rubin, including any diminution
of Mr. Rubin's position, including status, offices, titles,
reporting relationships or lack of meaningful participation in the
strategic managerial and operational matters of Citigroup worldwide
o any failure of the Company to nominate or recommend for election Mr.
Rubin as a Director, any failure of the shareholders of the Company
to so elect Mr. Rubin or any failure of the Board of Directors to
elect Mr. Rubin as Chairman of the Executive Committee of the Board
of Directors
o change in the composition of the Office of the Chairman to include
anyone other than Mr. Rubin and the Chairman or Chairmen of the
Board of Directors of the Company in office from time to time
o resignation with the written consent of the Company
o at the written request of the Company or following receipt of
written notice from the Company of termination of Mr. Rubin's
employment
o a relocation of Mr. Rubin's office more than 25 miles outside of
New York City
Part B
o retirement, for which Mr. Ruhin shall be eligible after completing 5
years of service with the Company, whereupon Mr. Rubin's combined
age and service shall be deemed to equal 75 for purposes of all
plans and programs of Citigroup (other than any pension plans
sponsored by the Company or any of its affiliates)
o death or disability