TRAVELERS INC, DEF 14A, 1994-03-30

TRAVELERS INC
DEF 14A, 1994-03-30
PERSONAL CREDIT INSTITUTIONS

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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )

Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12

THE TRAVELERS INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

N/A
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)

Payment of filing fee (Check the appropriate box):

[X] $125 Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).

[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.

(1) Title of each class of securities to which transaction applies:

- --------------------------------------------------------------------------------

(2) Aggregate number of securities to which transaction applies:

- --------------------------------------------------------------------------------

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)

- --------------------------------------------------------------------------------

(4) Proposed maximum aggregate value of transaction:

- --------------------------------------------------------------------------------

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.

(1) Amount previously paid:

- --------------------------------------------------------------------------------

(2) Form, schedule or registration statement no.:

- --------------------------------------------------------------------------------

(3) Filing party:

- --------------------------------------------------------------------------------

(4) Date filed:

- --------------------------------------------------------------------------------

- ---------------
(1) Set forth the amount on which the filing fee is calculated and state how it
was determined.

<PAGE>

["The Travelers" logo]

THE TRAVELERS INC.
65 East 55th Street
New York, New York 10022

March 30, 1994

Dear Stockholder:

You are cordially invited to attend the Annual Meeting of Stockholders of
The Travelers Inc. on Wednesday, April 27, 1994. The meeting will be held at
Carnegie Hall, 881 Seventh Avenue, New York, New York, at 10:00 a.m. local time.
The entrance to Carnegie Hall is on 57th Street just east of Seventh Avenue.

At this meeting of stockholders, we will be voting on a number of matters.
Please take the time to read carefully each of the proposals for stockholder
action described in the proxy materials.

Thank you for your continued support of our Company.

Sincerely,
/s/ Sanford I. Weill
Sanford I. Weill
Chairman of the Board
and Chief Executive Officer
<PAGE>

THE TRAVELERS INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

The Annual Meeting of Stockholders of The Travelers Inc. (formerly
Primerica Corporation) (the "Company") will be held at Carnegie Hall, 881
Seventh Avenue, New York, New York, on Wednesday, April 27, 1994 at 10:00 a.m.
local time, for the following purposes:

ITEM 1. To elect to the Board for a three-year term one class of
directors, consisting of seven directors;

ITEM 2. To ratify the selection of the Company's independent auditors
for 1994;

ITEM 3. To approve and adopt The Travelers Inc. Employee Discount Stock
Purchase Plan including the issuance of up to 750,000 shares of
common stock of the Company thereunder;

ITEM 4. To approve and adopt The Travelers Inc. Executive Performance
Compensation Plan;

and to transact such other business as may properly come before the Annual
Meeting.

The Board of Directors has set the close of business on March 8, 1994 as
the record date for determining stockholders entitled to notice of and to vote
at the Annual Meeting. A list of stockholders entitled to vote at the Annual
Meeting is maintained at the Company's headquarters, 65 East 55th Street, New
York, New York.

All stockholders are cordially invited to attend the Annual Meeting.

By Order of the Board of Directors
/s/ Charles O. Prince, III
Charles O. Prince, III
Secretary

March 30, 1994

IT IS IMPORTANT THAT THE ENCLOSED PROXY CARD BE SIGNED, DATED AND PROMPTLY
RETURNED IN THE ENCLOSED ENVELOPE, SO THAT YOUR SHARES WILL BE REPRESENTED
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING.
<PAGE>

THE TRAVELERS INC.
65 EAST 55TH STREET
NEW YORK, NEW YORK 10022

------------------------
PROXY STATEMENT
------------------------

ANNUAL MEETING OF STOCKHOLDERS

This Proxy Statement is being furnished to stockholders of The Travelers
Inc. (formerly Primerica Corporation) (the "Company") in connection with the
solicitation by the Board of Directors of the Company of proxies for use at the
Annual Meeting of Stockholders of the Company to be held at Carnegie Hall, 881
Seventh Avenue, New York, New York, on Wednesday, April 27, 1994 at 10:00 a.m.
local time, and at any adjournments or postponements of such Meeting. This Proxy
Statement and the accompanying proxy card are being mailed beginning on or about
March 30, 1994 to stockholders of the Company on March 8, 1994, the record date
for the Annual Meeting. The Company's Annual Report to Stockholders for the
fiscal year ended December 31, 1993 will be delivered prior to or concurrently
with mailing of the proxy material.

Stockholders of the Company are cordially invited to attend the Annual
Meeting. Whether or not you expect to attend, it is important that you complete
the enclosed proxy card, and sign, date and return it as promptly as possible in
the envelope enclosed for that purpose. You have the right to revoke your proxy
at any time prior to its use by filing a written notice of revocation with the
Secretary of the Company prior to the convening of the Annual Meeting, or by
presenting another proxy card with a later date. If you attend the Annual
Meeting and desire to vote in person, you may request that your previously
submitted proxy card not be used.

The cost of soliciting proxies and the cost of the Annual Meeting will be
borne by the Company. In addition to the solicitation of proxies by mail,
proxies may be solicited by personal interview, telephone and similar means by
directors, officers or employees of the Company, none of whom will be specially
compensated for such activities. The Company also intends to request that
brokers, banks and other nominees solicit proxies from their principals and will
pay such brokers, banks and other nominees certain expenses incurred by them for
such activities. The Company has retained Morrow & Co., Inc., a proxy soliciting
firm, to assist in the solicitation of proxies, for an estimated fee of $17,000,
plus reimbursement of certain out-of-pocket expenses.

The Company paid two stock dividends during 1993, and in connection with
the merger of The Travelers Corporation ("old Travelers") with and into the
Company on December 31, 1993 (the "Travelers Merger"), issued 0.80423 shares of
the Company's common stock, par value $.01 per share (the "Common Stock"), in
exchange for each share of old Travelers common stock (with certain exceptions).
As a result of these transactions, certain Company records, including but not
limited to those relating to stock option grants and deferred directors shares,
include fractional share amounts. The Company cannot issue fractional share
interests, however, and accordingly fractional share amounts have been deleted
from the numbers reported in this proxy statement.

VOTING RIGHTS

As of March 8, 1994, the record date for determination of stockholders
entitled to notice of and to vote at the Annual Meeting (the "Record Date"), the
outstanding stock of the Company entitled to receive notice of and to vote at
the Annual Meeting consisted of 323,716,455 shares of the Company's Common
Stock, and 4,406,431 shares of $4.53 ESOP Convertible Preferred Stock, Series C,
par value $1.00 per share (the "Series C Preferred Stock"). The Series C
Preferred Stock was issued in exchange for the Series A Preference Stock of old
Travelers following the Travelers Merger effective December 31, 1993. Each share
of Common Stock is entitled to one vote on each matter that is voted on at the

<PAGE>

Annual Meeting and each share of Series C Preferred Stock is entitled to 1.3
votes on each matter that is voted on at the Annual Meeting, and there is no
cumulative voting. The Common Stock and the Series C Preferred Stock will vote
together as a single class on all matters scheduled to be voted on at the Annual
Meeting.

The Company's other series of preferred stock, $1.00 par value, including
the 8.125% Cumulative Preferred Stock, Series A, the 5.50% Convertible Preferred
Stock, Series B, and the 9.25% Preferred Stock, Series D, have no right to vote
on any of the matters that are scheduled to be voted on at the Annual Meeting.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

To the best knowledge of the Company, as of the Record Date no person
"beneficially owned" (as that term is defined by the Securities and Exchange
Commission (the "SEC")) more than 5% of the Common Stock outstanding and
entitled to vote at the Annual Meeting.

All of the Series C Preferred Stock is held of record by Dory & Co., the
nominee of Shawmut Bank Connecticut, National Association, 777 Main Street,
Hartford, Connecticut 06115, as trustee (the "ESOP Trustee") acting on behalf of
the employee stock ownership feature of the former The Travelers Savings,
Investment and Stock Ownership Plan (the "TESIP Plan"), which the Company has
assumed and is currently continuing in place. As of the Record Date, the shares
of Series C Preferred Stock were beneficially held by approximately 21,000
holders through their participation in the TESIP Plan.

QUORUM; VOTING PROCEDURES

The presence at the Annual Meeting, in person or by proxy, of the holders
of a majority of the shares of Common Stock and Series C Preferred Stock
outstanding and entitled to vote shall constitute a quorum. Pursuant to
applicable Delaware law, and subject to the voting of Series C Preferred
Stock by the ESOP Trustee, described below, only votes cast "for" a
matter constitute affirmative votes. Votes "withheld" or abstaining
from voting are counted for quorum purposes, but since they are not
cast "for" a particular matter, they will have the same effect as
negative votes or votes "against" a particular matter. The votes required
with respect to the items set forth in the Notice of Annual Meeting of
Stockholders are set forth in the discussion of each item herein.

Unless contrary instructions are indicated on the proxy card, all shares of
Common Stock represented by valid proxies will be voted FOR the four items
listed on the proxy card and described below, and will be voted in the
discretion of the proxies in respect of such other business, if any, as may
properly be brought before the Annual Meeting. As of the date hereof, the Board
of Directors knows of no other business that will be presented for consideration
at the Annual Meeting other than those matters referred to herein. If you give
specific voting instructions by marking the boxes on the proxy card, your
shares of Common Stock will be voted in accordance with such instructions.

The ESOP Trustee, as the record holder of the Series C Preferred Stock,
will vote shares of Series C Preferred Stock that have been allocated to TESIP
Plan participants' accounts in accordance with instructions received from such
participants. Shares of Series C Preferred Stock as to which no instructions are
received and shares that have not been allocated to the accounts of participants
in the TESIP Plan will be voted by the ESOP Trustee in the same proportion as
votes in respect of allocated shares as to which participants in the TESIP Plan
have given instructions.

2
<PAGE>

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth, as of the Record Date, the Common Stock and
Series C Preferred Stock ownership of each director and certain executive
officers of the Company. As of the Record Date, the directors and the executive
officers of the Company as a group (26 persons) beneficially owned 9,514,262
shares of Common Stock and 2,483 shares of Series C Preferred Stock (or
approximately 2.9% of the total voting power of the Common Stock and Series C
Preferred Stock outstanding and entitled to vote at the Annual Meeting),
including an aggregate of 1,593,647 shares of Common Stock that such persons
may acquire pursuant to options exercisable within 60 days of the Record Date.
As of the Record Date, all current and former employees as a group, including
the executive officers of the Company, beneficially owned or had received
through employee stock incentive or purchase plans an aggregate of
approximately 33 million shares of Common Stock and beneficially owned
all of the 4,406,431 shares of Series C Preferred Stock, which amount of
Common Stock includes an aggregate of 7,550,313 shares of Common Stock
that such persons may acquire pursuant to options exercisable within 60
days of the Record Date. Had such 33 million shares of Common Stock
been held of record on the Record Date, such shares of Common Stock
and Series C Preferred Stock would have represented approximately 11.5%
of the total voting power of the shares of Common Stock and Series C
Preferred Stock then outstanding and eligible to vote. These amounts
are based upon the Company's records of beneficial ownership by its current
officers and ownership by all employees under The Travelers Inc. Stock Option
Plan (the "Option Plan"), the Savings Plan, The Travelers Inc. Capital
Accumulation Plan (the "CAP Plan") and the TESIP Plan. The actual ownership by
employees is not determinable by the Company since employees may own shares of
Common Stock in street name.

As of the Record Date, no individual director or executive officer
beneficially owned one percent or more of the Common Stock outstanding and
entitled to vote at the Annual Meeting, except Mr. Weill who beneficially owned
4,489,656 shares (1.4%) of Common Stock, including 708,888 shares that he had
the right to acquire pursuant to options exercisable within 60 days of the
Record Date. As of the Record Date, no individual director or executive officer
beneficially owned one percent or more of the Series C Preferred Stock, and no
director or executive officer beneficially owned any shares of any other
series of the Company's preferred stock. Except as otherwise expressly
stated in the footnotes to the following table, beneficial ownership
of shares means that the beneficial owner thereof has sole voting
and investment power over such shares.

(Chart continued and footnotes begin on the following page)

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<PAGE>

(Chart continued)

<TABLE> <CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
------------------------------------------------------------------------
STOCK OPTIONS
COMMON STOCK EXERCISABLE TOTAL
BENEFICIALLY OWNED WITHIN 60 COMMON STOCK SERIES C
EXCLUDING DAYS OF BENEFICIALLY PREFERRED STOCK
NAME/TITLE OPTIONS RECORD DATE OWNED(1) BENEFICIALLY OWNED(2)
- --------------------------------------- ------------------ ------------- -------------- ---------------------
<S> <C> <C> <C> <C>
James Dimon............................ 438,107 60,055 498,162 --
Director and Executive Officer
Leslie B. Disharoon.................... 72,692 (3) 72,692 --
Director
Gerald R. Ford......................... 20,281 (3) 20,281 --
Director
Robert F. Greenhill.................... 1,554,955 0 1,554,955 --
Director and Executive Officer
Ann Dibble Jordan...................... 3,449 (3) 3,449 --
Director
Robert I. Lipp(7)...................... 388,503 60,787 449,290 --
Director and Executive Officer
Dudley C. Mecum(8)..................... 37,003 (3) 37,003 --
Director
Andrall E. Pearson..................... 27,252 (3) 27,252 --
Director
Frank J. Tasco......................... 6,568 (3) 6,568 --
Director
Linda J. Wachner....................... 5,959 (3) 5,959 --
Director
Sanford I. Weill(9).................... 3,780,768 708,888 4,489,656 --
Director and Chief Executive Officer
Joseph R. Wright, Jr................... 20,040 (3) 20,040 --
Director
Arthur Zankel(10)...................... 89,655 (3) 89,655 --
Director
Frank G. Zarb(11)...................... 488,788 361,357 850,145 --
Director and Executive Officer
All directors and executive officers as
a group (26 persons)(12)............... 7,920,615 1,593,647 9,514,262 2,483
</TABLE>

- ---------------

(1) This information includes, as of the Record Date, the following shares
which are also deemed "beneficially owned": (i) the following number of
shares of Common Stock granted in payment of directors' fees to
non-employee directors under the Company's plan, but receipt of which is
deferred: Mr. Bialkin, 26,692; Mr. Budd, 2,694; Mr. Califano, 17,602;
Mr. Danforth, 22,756; Mr. Disharoon, 26,692; Mr. Mecum, 26,692; Mr.
Pearson, 26,692; Mr. Tasco, 4,568; Mr. Wright, 12,640; and Mr. Zarb, 9,089;
(ii) the following number of shares of Common Stock issued in exchange for
shares of old Travelers common stock held under the old Travelers Deferred
Compensation Plan for Non-employee Directors, receipt of which is deferred:
Mr. Armstrong, 3,737; Mr. Lipp, 665; Mr. Weill, 891; and Mr. Zarb, 395;
(iii) the following number of shares of Common Stock held (as of February
28, 1994, unless otherwise noted) under the Savings Plan of the Company or
its subsidiaries, as to which the holder has voting power but not
dispositive power: Mr. Dimon, 202; Mr. Lipp, 4,102; Mr. Weill, 4,508; and
Mr. Zarb, 119 (as of December 31, 1993); (iv) the following number of
shares of Common Stock issued in exchange for shares of common stock of old
Travelers under the savings and investment feature of the TESIP Plan: Mr.
Booth, 1,161; and Mr. Budd, 3,029; and (v) the following number of shares
of Common Stock

(Footnotes continued on following page)

4
<PAGE>

(Footnotes continued from preceding page)

awarded pursuant to the CAP Plan as to which the holder may direct the vote
but which remain subject to forfeiture and restrictions on disposition: Mr.
Budd, 40,000; Mr. Dimon, 38,734; Mr. Lipp, 38,615; Mr. Weill, 83,976; and
Mr. Zarb, 69,550. Mr. Greenhill holds 573,467 shares of restricted stock
under his employment contract. See "Executive Compensation--Employment
Protection Agreements," below.

(2) The TESIP Plan was assumed by the Company in connection with the Travelers
Merger. The TESIP Plan includes a tax-deferred savings and investment
feature (similar to the Company's 401(k) Plan) that permits investment in
the Company's Common Stock. In addition, the employer match feature of the
TESIP Plan is currently made in the form of Series C Preferred Stock, held
of record by the ESOP Trustee, and convertible into one share of the
Company's Common Stock for each $66.21 of stated value of the Series C
Preferred Stock. Accordingly, the number of shares of Series C Preferred
Stock set forth in this table (as of February 28, 1994) may (by virtue of
such currently exercisable conversion right) be deemed to represent
beneficial ownership of an aggregate of approximately 1,996 shares of
Common Stock.

(3) Non-employee directors are not eligible to receive stock option grants
under the Company's plans.

(4) Includes 11 shares of Common Stock owned by Mr. Booth's wife, as to which
Mr. Booth disclaims beneficial ownership.

(5) Includes 703 shares of Common Stock owned by Mr. Budd's wife, as to which
Mr. Budd disclaims beneficial ownership.

(6) Includes 800 shares of Common Stock owned by Mr. Califano's wife and 120
shares held by Mr. Califano as custodian, as to which Mr. Califano
disclaims beneficial ownership.

(7) Includes 10,000 shares of Common Stock owned by Mr. Lipp's children, as to
which Mr. Lipp disclaims beneficial ownership.

(8) Includes 711 shares of Common Stock owned by Mr. Mecum's wife, as to which
Mr. Mecum disclaims beneficial ownership.

(9) Includes 100 shares of Common Stock owned by Mr. Weill's wife, as to which
Mr. Weill disclaims beneficial ownership.

(10) Includes 3,000 shares of Common Stock owned by Mr. Zankel's wife and 1,200
shares held by a trust of which Mr. Zankel is a trustee, as to which Mr.
Zankel disclaims beneficial ownership.

(11) Includes 6,804 shares of Common Stock owned by Mr. Zarb's wife and 200
shares owned by Mr. Zarb's daughter, as to which Mr. Zarb disclaims
beneficial ownership.

(12) This information also includes as "beneficially owned" (i) an aggregate of
19,372 shares of Common Stock and 2,483 shares of Series C Preferred Stock
held under the Savings Plan of the Company or its subsidiaries, or under
the TESIP Plan, as to which the holder has voting power but not dispositive
power, and (ii) an aggregate of 918,971 shares of Common Stock awarded
under the CAP Plan, as to which the holder may direct the vote but which
remain subject to forfeiture and restrictions on disposition.

------------------------

Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors, and persons who
own more than ten percent of a registered class of the Company's equity
securities, to file reports of ownership and changes in ownership with the SEC
and the New York Stock Exchange (the "NYSE"), and to furnish the Company with
copies of all such Section 16(a) forms they file. Based solely on its review of
the copies of such forms received by it, or written representations from
certain reporting persons, the Company believes that, during the year ended
December 31, 1993, each of its officers, directors and greater than ten
percent stockholders complied with all such applicable filing requirements.

5
<PAGE>

ITEM 1:
ELECTION OF DIRECTORS

The Board of Directors of the Company is classified into three classes. The
seven directors serving in Class III have terms expiring at the Annual Meeting.
The Class III directors currently serving on the Board, Messrs. Danforth,
Daniell, Disharoon, Ford, Lipp and Pearson, and Mrs. Wachner, have been
nominated by the Board of Directors for re-election to three-year terms at the
Annual Meeting.

Each Class III nominee elected will hold office until the Annual Meeting of
Stockholders to be held in 1997 and until his or her successor has been duly
elected and qualified, unless prior to such meeting a director shall resign, or
his or her directorship shall become vacant due to his or her death or removal.

The following information with respect to the principal occupation and
business experience and other affiliations of the directors during the past five
years has been furnished to the Company by the directors. All ages are given as
of the Record Date. Directors' terms as stated below include periods of Board
membership with Commercial Credit Company ("CCC"), a predecessor corporation of
the Company.

Class III: Nominated for election at the Annual Meeting for a term ending 1997

Douglas D. Danforth

Mr. Danforth, 71, has been a director of the Company since 1987. He has
been the Managing Partner of the Pittsburgh Pirates Baseball Club since 1988. He
was Chairman of the Board and Chief Executive Officer of Westinghouse Electric
Corporation from December 1983 to December 1987, and was Vice Chairman and Chief
Operating Officer of Westinghouse from 1978 to 1983. Mr. Danforth is a director
of The Rubatex Corp., The Sola Corporation and The American European
Association, and Chairman of Simmons Upholstered Furniture Corp. Mr. Danforth is
also a Trustee of Carnegie-Mellon University, Syracuse University, Allegheny
Health Education and Research Foundation, Inc. and the Pittsburgh Trust for
Cultural Resources. He is also a member of the Executive Committee of the
Allegheny Conference on Community Development, and a director of the Pittsburgh
Foundation.

Robert F. Daniell

Mr. Daniell, 60, became a director of the Company in December 1993. He is
Chairman and Chief Executive Officer of United Technologies Corporation, a broad
based designer and manufacturer of high technology products, located in
Hartford, Connecticut. He joined the Sikorsky Aircraft Division of United
Technologies Corporation in 1956 and served as President of Sikorsky Aircraft
from 1981 to 1983. He was a Senior Vice President of United Technologies from
1983 to 1984 and served as its President and Chief Operating Officer from 1984
to February 1992. He was elected a director of United Technologies in 1984,
Chief Executive Officer in 1986 and Chairman in 1987. Mr. Daniell is a director
of Shell Oil Company. He is also a member of the Conference Board and The
Business Council.

Leslie B. Disharoon

Mr. Disharoon, 61, has been a director of the Company since 1986. He was
Chairman of the Board, President and Chief Executive Officer of Monumental
Corporation (an insurance holding company) from 1978 to 1988. He is a director
of The Johns Hopkins Health System, Aegon USA, Inc., GRC International Inc. and
M.S.D. & T. Funds, Inc., and President of the Caves Valley Club Inc.

Gerald R. Ford

The Honorable Gerald R. Ford, 80, has been a director or an honorary
director of the Company since 1986. Mr. Ford was President of the United States
from August 1974 through January 1977, having served as Vice President of the
United States from December 1973 through August 1974. He is

6
<PAGE>

Class III (continued)

a lecturer and a business consultant to several corporations. He is also an
advisory director to Texas Commerce Bankshares, Inc. and American Express
Company.

Robert I. Lipp

Mr. Lipp, 55, has been a director of the Company since 1991, and is a Vice
Chairman and Group Chief Executive of the Company. In November 1993, he was
named a member of the newly-created Office of the Chairman of the Company. Since
completion of the Travelers Merger, Mr. Lipp has acted as chief executive
officer of the Travelers insurance companies based in Hartford, Connecticut (the
"Travelers Insurance Operations"). From 1991 to 1993, he was Chairman and Chief
Executive Officer of CCC, a wholly owned subsidiary of the Company. From April
1986 through September 1991, he was an Executive Vice President of the Company
and its corporate predecessor. Prior to joining the Company in 1986, he was a
President and a director of Chemical New York Corporation and Chemical Bank
where he held senior executive positions for more than five years prior thereto.
Mr. Lipp is a director of The New York City Ballet.

Andrall E. Pearson

Mr. Pearson, 68, has been a director of the Company since 1986. He has been
a Professor at the Harvard Business School since 1985. He was President of
Pepsico, Inc. from 1970 to 1984. He is a director of The May Department Stores
Company, Pepsico, Inc., Kendall Company and Lexmark Inc. Mr. Pearson is also a
director and limited partner of Clayton, Dublier & Rice, Inc., a private
investment firm specializing in leveraged acquisitions involving management
participation.

Linda J. Wachner

Mrs. Wachner, 48, has been a director of the Company since 1991. She has
been Chairman, President and Chief Executive Officer of the Warnaco Group, Inc.
and of Warnaco Inc., a Fortune 500 apparel company, since April 1986, and
Chairman and Chief Executive Officer of Authentic Fitness Corporation, an
activewear manufacturer, since May 1990. Mrs. Wachner is also a director of
Castle & Cooke Homes, Inc. and the New York City Partnership. She currently
serves on the Policy Committee of The Business Roundtable, and on the Board of
Trustees of The Aspen Institute and Carnegie Hall. She is a member of the
Council on Foreign Relations and the Board of Overseers of Memorial Sloan-
Kettering Cancer Center. In 1991, Mrs. Wachner was reappointed by President Bush
to the Advisory Committee for Trade Policy Negotiations, on which she also
served under President Reagan.

Class I: Term ending 1995

Richard H. Booth

Mr. Booth, 46, became a director of the Company in December 1993. He is
President of the Travelers Insurance Operations. He joined old Travelers in
1978, became Senior Vice President of Corporate Finance in 1986 and transferred
to the Agency Marketing Group in 1989. He was elected Vice Chairman and Chief
Insurance Officer of old Travelers in 1990 and its President and Chief Operating
Officer in February 1991. Mr. Booth is a Certified Public Accountant, a
Chartered Life Underwriter and a Chartered Financial Consultant. He is a member
of the American Institute of Certified Public Accountants, the American Society
of Chartered Life Underwriters, the American Society of Chartered Financial
Consultants and the Financial Analysts Federation. He is a member of the Boards
of the World Affairs Council, the University of Hartford, the Old State House
Association, Wadsworth Atheneum, Church Homes, and Babson College.

Edward H. Budd

Mr. Budd, 60, has been a director of the Company since 1992. Mr. Budd
joined The Travelers Corporation in 1955, and was elected a director in 1976 and
became Chief Executive Officer in 1981

7
<PAGE>

Class I (continued)

and Chairman of the Board in 1982. He served as its President from 1976 to 1983
and from 1985 to February 1991. Since completion of the merger of The Travelers
Corporation into Primerica Corporation, Mr. Budd has served as Chairman of the
Travelers Insurance Operations and as Chairman of the Executive Committee of the
Board of Directors of the Company. He is also a director of Delta Air Lines,
Inc. and GTE Corporation and a member of The Business Council. Mr. Budd is a
director of The American Insurance Association. He is a member of the American
Academy of Actuaries, and a Fellow of the Casualty Actuarial Society.

Joseph A. Califano, Jr.

Mr. Califano, 62, has been a director of the Company since 1988. He is
Chairman and President of the Center on Addiction and Substance Abuse at
Columbia University, an independent not-for-profit organization established to
combat all forms of substance abuse. From 1983 to 1992, he was a Senior Partner
at the law firm of Dewey Ballantine, which performs legal services for the
Company from time to time. He is a director of Authentic Fitness Corporation,
Automatic Data Processing, Inc., Chrysler Corporation, Kmart Corporation, New
York Telephone and Warnaco Inc., and a trustee of the American Ditchley
Foundation, New York University and The Twentieth Century Fund. He serves as
Chairman of the Institute for Social and Economic Policy in the Middle East at
the Kennedy School of Government at Harvard University, and as a Governor of New
York Hospital, as a Director of Georgetown University and a member of the
governing council of the Institute of Medicine of the National Academy of
Sciences. Mr. Califano served as Secretary of the United States Department of
Health, Education and Welfare from 1977 to 1979. He was Special Assistant for
Domestic Affairs to the President of the United States for the period from 1965
to 1969, and held various positions in the United States Department of Defense
from 1961 to 1965. He is the author of eight books.

Robert W. Crispin

Mr. Crispin, 47, became a director of the Company in December 1993. Since
July 1991, he has been Vice Chairman and Chief Investment Officer of the
Travelers Insurance Operations. Mr. Crispin joined Capital Holding Corporation
in 1981 and served as Senior Vice President from 1984 to 1986. He was Executive
Vice President, Investments and Individual Life Insurance, of Lincoln National
Corporation from 1986 to 1991. Mr. Crispin is a Chartered Financial Analyst, and
a member of the American Council of Life Insurance Task Force on Requirements
for Market Value Accounting and the Committee on Investment Executive Seminars.
He is a board member of the Connecticut Business and Industry Association, and
also serves on the portfolio subcommittee of Wesleyan University and the
Hartford Whalers Advisory Board.

James Dimon

Mr. Dimon, 37, has been a director of the Company since September 1991. He
is President, Chief Operating Officer and Chief Financial Officer of the
Company. In November 1993, he was named a member of the newly-created Office of
the Chairman of the Company. He was, from May 1988 to September 1991, Executive
Vice President and Chief Financial Officer of the Company, and was Senior
Executive Vice President and Chief Administrative Officer of Smith Barney Inc.,
a subsidiary of the Company, from 1990 to 1991. He is also a director, the Chief
Operating Officer and a member of the Executive Committee of Smith Barney
Shearson Inc., the Company's investment banking and securities brokerage
subsidiary ("SBS"), and a director and the Chief Operating Officer of Smith
Barney Shearson Holdings Inc. ("SBS Holdings"), the immediate parent company of
SBS. From 1986 to 1988, Mr. Dimon was Senior Vice President and Chief Financial
Officer of CCC, the Company's predecessor. From 1982 to 1985, he was a Vice
President of American Express Company and Assistant to the President,
Sanford I. Weill. Mr. Dimon is a trustee of New York University Medical Center,
Chairman of the Board of the New York Academy of Finance, and a member of the
Young Presidents' Organization.

8
<PAGE>

Class I (continued)

Ann Dibble Jordan

Ms. Jordan, 59, has been a director of the Company since 1989. She is a
consultant and serves on the Board of Directors of Johnson & Johnson
Corporation, Capital Cities/ABC, Inc., Hechinger Company, the National Symphony
Orchestra, The Phillips Gallery, Child Welfare League, National Health
Laboratories, Automatic Data Processing, Inc. and the Salant Corp. She was
formerly the Director of the Department of Social Services for the University of
Chicago Medical Center from 1986 to 1987, and was also Field Work Associate
Professor at the School of Social Service Administration of the University of
Chicago from 1970 to 1987. She served as the Director of Social Services of
Chicago Lying-in Hospital from 1970 to 1985.

Frank J. Tasco

Mr. Tasco, 66, has been a director of the Company since 1992. He is
Chairman of the Executive Committee of the Board of Directors of Marsh &
McLennan Companies, Inc., a professional services firm with insurance and
reinsurance broking, consulting and investment management businesses which,
together with certain of its subsidiaries, has had transactions with the Company
and various of its subsidiaries in the ordinary course of business. Mr. Tasco
began his career with Marsh & McLennan Companies, Inc. in 1954. He was elected
its President and Chief Operating Officer in September 1984, and served as its
Chief Executive Officer from January 1986 until his retirement in May 1992 and
as its Chairman from May 1986 until his retirement in May 1992. Mr. Tasco is
currently a director of Marsh & McLennan Companies, Inc. and the Terra Nova
Insurance Company, Ltd. He became Chairman of the Board of Directors of Borden,
Inc. in December 1993 and is a member of the Board of Directors of NYNEX--New
York. He was a member of the President's Drug Advisory Council and is at present
Chairman of New York Drugs Don't Work and its Leadership Committee. He is
Chairman of the Board of Directors of the Phoenix House Foundation; a member of
the Board of Directors of St. Francis Hospital, Roslyn, New York; and former
Chairman of the New York Stock Exchange Listed Companies Advisory Committee. Mr.
Tasco is a member of the Board of Trustees of New York University and of the New
York City Partnership and is chairman of its Public Safety Committee. He serves
as a trustee of the Inner-City Scholarship Fund. He is a member of the Council
on Foreign Relations, the Lincoln Center Consolidated Corporate Fund Leadership
Committee, the Foreign Policy Association and the Business Council for the
United Nations. In addition, he has served on the Mayor's Private Sector Survey
for the City of New York.

Frank G. Zarb

Mr. Zarb, 59, has been a director of the Company since 1986, and is a Vice
Chairman and Group Chief Executive of the Company. In November 1993, he was
named a member of the newly-created Office of the Chairman of the Company. He
was Chairman and Chief Executive Officer of Smith Barney Inc. and Smith Barney,
Harris Upham & Co. Incorporated from November 1988 to June 1993, and President
of such corporations from June 1989 to June 1993. He was a General Partner at
Lazard Freres & Co. (an investment banking firm) from 1978 to 1988. Previously,
he served in the United States Government as Administrator for the Federal
Energy Administration from 1974 to 1977; Assistant to the President of the
United States for Energy Affairs from 1975 to 1977; Associate Director of the
United States Office of Management and Budget from 1973 to 1974; and United
States Assistant Secretary of Labor from 1971 to 1972. Mr. Zarb is a director of
the Securities Investor Protection Corporation, and Foamex International, Inc.
and a member of the Board of Trustees of Hofstra University and the Gerald R.
Ford Foundation. He is a member of the New York Stock Exchange Nominating
Committee, and serves on the U.S. Enrichment Corporation's Board of Directors.

9
<PAGE>

Class II: Term ending 1996

C. Michael Armstrong

Mr. Armstrong, 55, became a director of the Company in December 1993. He is
Chairman and Chief Executive Officer of Hughes Aircraft Company, a designer and
manufacturer of electronics, space and communications products and services,
located in Los Angeles, California. Mr. Armstrong joined IBM Corporation in 1961
and was appointed Senior Vice President in 1983. In 1988 he became a member of
IBM's Management Committee and in 1989 was appointed Chairman of IBM World Trade
Corporation, positions which he held through February 1992. Mr. Armstrong was
elected Chairman and Chief Executive Officer of Hughes Aircraft Company in March
1992. He is a member of the National Advisory Committee, College of Engineering
of the University of Michigan and the Board of Trustees of Johns Hopkins
University. He is a member of the Board of Trustees of The Conference Board, the
Council on Foreign Relations and the Supervisory Board of the Thyssen-Bornemisza
Group. Mr. Armstrong is also a member of the National Security
Telecommunications Advisory Committee and the Defense Policy Advisory Committee
on Trade, and serves on the Board of Directors of The Los Angeles World Affairs
Council and the Board of Directors of Rebuild LA.

Kenneth J. Bialkin

Mr. Bialkin, 64, has been a director of the Company since 1986. He has been
for more than five years a partner in the law firm of Skadden, Arps, Slate,
Meagher & Flom, which performs legal services for the Company from time to time.
Mr. Bialkin is also a director of The Municipal Assistance Corporation for the
City of New York, Oshap Technologies, Ltd., Tecnomatix Technologies Ltd. and
Sapiens International Corporation N.V.

Robert F. Greenhill

Mr. Greenhill, 57, became a director of the Company in August 1993. In
November 1993, he was named a member of the newly-created Office of the Chairman
of the Company. He became Chairman and Chief Executive Officer of SBS, the
Company's investment banking and securities brokerage subsidiary, in June 1993.
He also serves as Chairman and Chief Executive Officer of SBS Holdings. Mr.
Greenhill was President of Morgan Stanley Group, Inc. from January 1991 to June
1993. Morgan Stanley has provided investment banking services to the Company or
its subsidiaries in the ordinary course from time to time. Mr. Greenhill joined
Morgan Stanley in 1962 and became a Partner in 1970. In 1972, he directed Morgan
Stanley's newly-formed Mergers and Acquisitions Department. In 1980, Mr.
Greenhill was named director of Morgan Stanley's Investment Banking Division
with responsibility for domestic and international corporate finance, mergers
and acquisitions, merchant banking, capital market services and real estate. In
1980, he also became a member of Morgan Stanley's Management Committee which was
the firm's policy-making group. He became a Vice Chairman of Morgan Stanley
Group, Inc. in January 1989. Mr. Greenhill is a trustee of the Whitney Museum of
American Art, a trustee of the American Enterprise Institute for Public Policy
Research, a member of the International Advisory Board of the British-American
Chamber of Commerce, and is also a member of the Advisory Board of the New York
Academy of Finance.

Dudley C. Mecum

Mr. Mecum, 59, has been a director of the Company since 1986. Since August
1989, Mr. Mecum has been a Partner in the firm of G.L. Ohrstrom & Co. (a
merchant banking firm). Formerly, he was Chairman of Mecum Associates, Inc. (a
management consulting firm) from 1987 to 1989. He was President of Environmental
and Engineering Services and was a senior executive and director of Combustion
Engineering, Inc. from 1985 to December 1987. Mr. Mecum was Managing Partner of
the New York office of Peat Marwick Mitchell & Co. (now KPMG Peat Marwick) from
1979 to 1985. He served in the United States Government as Assistant Director of
the United States Office of Management and Budget in 1973 and as United States
Assistant Secretary of the Army (Installations and Logistics) from 1971 to 1973.
Mr. Mecum is a director of Fingerhut Companies, Inc., Dyncorp, Vicorp

10
<PAGE>

Class II (continued)

Restaurants, Inc., Lyondell Petrochemical Corp. and Roper Industries, Inc. Mr.
Mecum is also a director and Chairman of Alden Industries, Inc., a privately
held company manufacturing commercial water heaters and boilers.

Sanford I. Weill

Mr. Weill, 60, has been a director of the Company since 1986. He has been
Chairman of the Board and Chief Executive Officer of the Company and its
predecessor, CCC, since 1986; he was also its President from 1986 until 1991. He
was President of American Express Company from 1983 to 1985; Chairman of the
Board and Chief Executive Officer of American Express Insurance Services, Inc.
from 1984 to 1985; Chairman of the Board and Chief Executive Officer, or a
principal executive officer, of Shearson Lehman Brothers Inc. from 1965 to 1984;
Chairman of the Board of Shearson Lehman Brothers Holdings Inc. from 1984 to
1985; and a founding partner of Shearson's predecessor partnership from 1960 to
1965. He is Chairman of the Board of Trustees of Carnegie Hall, and a director
of the Baltimore Symphony Orchestra. Mr. Weill is a member of the Board of
Governors of New York Hospital and is Vice Chairman of the Board of Overseers of
Cornell University Medical Center and a member of the Joint Board of New York
Hospital--Cornell University Medical College. He is a member of Cornell
University's Johnson Graduate School of Management Advisory Board and a Board of
Trustees Fellow. He has served as Chairman of the Joint Mayoral/City Council
Commission on Early Child and Child Care Programs during the Dinkins
Administration. He is co-chair, serving with New York Lieutenant Governor Stan
Lundine, of the Leadership Council for the Early Childhood Investment Fund. He
is also a member of The Business Roundtable.

Joseph R. Wright, Jr.

Mr. Wright, 55, has been a director of the Company since 1990. From 1989
to 1993, he was Executive Vice President and Vice Chairman of W.R. Grace & Co.
(a $6 billion international specialty chemicals and healthcare company). Mr.
Wright is a member of the Board of Directors/Advisors of Baker & Taylor
Holdings, Inc., the National Association of Manufacturers, the Freedom
Foundation, Ardshiel, Inc., the Council for Excellence in Government, the
Board of Trustees of Hampton University, and a member of the President's
Export Council, Chief Executives Organization, World Business Council,
National Academy for Public Administration, the Budget Process
Reform Commission and the Citizens for a Sound Economy. He was
Director and Deputy Director of the United States Office of
Management and Budget from 1982 to 1989, and a member of President Reagan's
Cabinet and Deputy Secretary of Commerce from 1981 to 1982. Prior thereto, he
was president of two Citicorp retail credit card subsidiaries and a partner of
Booz, Allen & Hamilton. He received the President's "Citizenship Award" in
1989.

Arthur Zankel

Mr. Zankel, 62, has been a director of the Company since 1986. He has been
Co-Managing Partner of First Manhattan Co. (a research and investment management
company) since 1980. He is also a director of Vicorp Restaurants, Inc. and Fund
American Enterprises Holdings, Inc. and a trustee of Skidmore College, Carnegie
Hall and New York Foundation.

MEETINGS OF THE BOARD OF DIRECTORS

The Board of Directors met ten times during 1993. Each director attended at
least 75 percent of the meetings of the Board of Directors of the Company and
Board Committees of which he or she was a member during 1993 or the period
thereof during which he or she was a member.

11
<PAGE>

COMMITTEES OF THE BOARD OF DIRECTORS

The following are the current members and functions of the standing
committees of the Board of Directors.

Executive Committee. The members of the Executive Committee are Messrs.
Budd (Chairman), Bialkin, Weill, Wright, Zankel and Zarb. The Executive
Committee meets in place of the full Board of Directors when scheduling makes it
difficult to convene all of the directors or when issues arise requiring
immediate attention. The Executive Committee met three times during 1993.

Audit Committee. The members of the Audit Committee are Messrs. Mecum
(Chairman), Califano, Danforth, Disharoon, Tasco and Wright. The primary
functions of the Audit Committee, composed entirely of non-management directors,
are to pass upon the scope of the independent certified public accountants'
examination, to review with the independent certified public accountants and the
Company's principal financial and accounting officers the audited financial
statements and matters that arise in connection with the examination, to review
the Company's accounting policies and the adequacy of the Company's internal
accounting controls, and to review and approve the independence of the
independent certified public accountants. The Audit Committee met seven times
during 1993.

Nominations and Compensation Committee. In January 1993, the Stock Option
Committee and Compensation Committee were consolidated into the Nominations and
Compensation Committee (the "Committee"). The members of the Committee are
Messrs. Zankel (Chairman), Bialkin, Ford and Pearson, Ms. Jordan and Mrs.
Wachner.

From time to time, the Committee acts as a nominating committee in
recommending candidates to the Board as nominees for election at the Annual
Meeting of Stockholders or to fill such Board vacancies as may occur during the
year. The Committee will consider candidates suggested by directors or
stockholders. Nominations from stockholders, properly submitted in writing to
the Secretary of the Company, will be referred to the Committee for
consideration.

The Committee represents the full Board of Directors in matters relating to
the compensation of Company officers and, from time to time, recommends to the
full Board of Directors appropriate methods and rates of director compensation.
It also administers the Company's Option Plan, the Company's CAP Plan and those
option plans of old Travelers assumed by the Company in connection with the
Travelers Merger. The Committee will also be responsible for administration of
The Travelers Inc. Executive Performance Compensation Plan (the "Compensation
Plan") if it is approved by stockholders at the Annual Meeting. See "Item 4:
Approval and Adoption of The Travelers Inc. Executive Performance Compensation
Plan."

The Committee met eight times during 1993.

HONORARY DIRECTORS

Honorary directors may be designated by the Board of Directors from time to
time on an annual basis. There are no designated honorary directors for 1994.

RECOMMENDATION

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ELECTION
OF EACH OF THE SEVEN NOMINEES IN CLASS III, DOUGLAS D. DANFORTH, ROBERT F.
DANIELL, LESLIE B. DISHAROON, THE HONORABLE GERALD R. FORD, ROBERT I. LIPP,
ANDRALL E. PEARSON AND LINDA J. WACHNER, AS A DIRECTOR OF THE COMPANY FOR A
THREE-YEAR TERM. Assuming the presence of a quorum, directors shall be elected
by a plurality of the votes cast at the Annual Meeting by holders of Common
Stock and Series C Preferred Stock, voting as a single class, for the election
of directors. Under applicable Delaware law, in tabulating the vote, broker
non-votes will not be considered present at the Annual Meeting, and will have no
effect on the vote.

12
<PAGE>

EXECUTIVE COMPENSATION

REPORT OF THE NOMINATIONS AND COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION

Statement of Philosophy. The Company seeks to attract and retain highly
qualified employees at all levels, including particularly executive officers
whose performance is critical to the Company's success. In order to accomplish
this, the Company is willing to provide superior compensation for superior
performance. The Committee measures such performance on either a company-wide or
a business unit basis, or using both criteria, as the nature of an executive's
responsibilities may dictate.

Compensation of executive officers in 1993 consisted of base salary and
discretionary bonuses, a significant portion of which was restricted stock
awarded pursuant to the Company's CAP Plan. In addition, under the Company's
long-standing policy of providing economic incentives to its employees at all
levels in the form of stock ownership, the Company from time to time grants
stock options not only to executive officers but to a broad range of employees.
All executives who are members of the Company's Planning Group have previously
represented that, for so long as they are members of such group and
participate in the reload program under the Option Plan, they will not
dispose of their Common Stock except for donations to charity or for use in
connection with participation in the stock option and restricted stock plans
of the Company.

It is also the Company's policy to take all reasonable steps to obtain the
fullest possible corporate tax deduction for compensation paid to its executive
officers by qualifying for the exemptions from limitations on such deductibility
under Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"). To this end, in 1993 the Company requested and received stockholder
approval for changes to the Option Plan to meet such Code requirements, and
seeks stockholder approval at the Annual Meeting of a bonus compensation plan
designed to have such effect.

1993 Committee Review Process. Executive compensation is reviewed and
approved annually by this Committee, which is composed entirely of non-employee
directors. The Committee considered and gave various weight to both qualitative
and quantitative factors, including such factors as earnings, earnings per
share, return on equity and return on assets. In conducting such review, the
Committee has generally examined changes in the Company's financial results over
time, both overall corporate results and on an operating unit basis, and
comparative data for comparable companies, to the extent it is publicly
available. However, the analysis of corporate performance in financial reporting
terms alone is not determinative. The Committee has given significant weight to
qualitative factors in approving 1993 compensation with particular emphasis on
the performance of the Company's executive team in a year in which two major
acquisitions have been completed and the scope of responsibilities of each of
the most senior executive officers has been expanded.

With regard to its consideration of compensation for the chief executive
officer and the four other most highly compensated executive officers of the
Company, the Committee requested the assistance of the Actuarial, Benefits and
Compensation Consulting Services of the accounting firm of Ernst & Young. Ernst
& Young identified 14 comparator companies as competing in whole or in part
directly with one or more business segments of the Company. Of this group of 14
companies, ten are companies included in the industry peer group used in the
performance graph included in these proxy materials.

Ernst & Young concluded that it was appropriate to examine compensation of
comparable chief executive officers in companies within the comparator group
most nearly coinciding with the responsibilities of each of the Company's
executive officers. Comparisons were then made in each of the areas of annual
compensation, long-term compensation and total compensation between the
Company's compensation of the five individuals named in the Summary Compensation
Table and the compensation reported by the most nearly comparable companies
within the comparator group. Based upon such analysis, Ernst & Young opined
affirmatively as to the appropriateness of the 1993 compensation of the
Company's five senior executives.

13
<PAGE>

The Committee has reviewed the Ernst & Young data and, in addition to
factors considered by the Committee as discussed elsewhere in this report, has
concluded that the compensation of each of the senior executives named in the
Summary Compensation Table was appropriate.

Base Salary. Increases in base salary paid to all executive officers are
determined periodically, based upon the individual's performance, any change in
the scope of responsibilities and the individual's seniority and experience.
Examination of competitors' pay practices in this area is conducted periodically
to ensure that the Company will be in a position to attract new talent and
retain current valuable employees.

Incentive Bonuses. Although there was no fixed formula for each
component of
overall compensation for 1993, discretionary bonus awards were a substantial
part of total compensation of Company executives. Factors considered included
not only individual performance but also performance of each business unit for
which the executive may be directly responsible, and such individual's
contributions to overall Company policy and strategic decisions through
membership in the corporate Planning Group that consists of the most senior
executives of the Company. Because a percentage of executive compensation is
paid in the form of restricted stock under the Company's CAP Plan, bonus awards
are not only a short-term cash reward but also a long-term incentive that ties
future realization of benefits by such executives to the enhancement of
stockholder values. The restricted period applicable to awards to executive
officers under the CAP Plan will be extended from two to three years beginning
with the awards made with respect to 1994, in furtherance of the long term
nature of such compensation. In addition, the Executive Performance Compensation
Plan that is proposed for stockholder action at the 1994 Annual Meeting will
result in determination of maximum bonuses payable under such plan to the chief
executive officer and the other four most highly compensated executives.

Stock Options. Other than grants of stock options that arose by operation
of the reload feature of the Option Plan approved by stockholders in 1992, no
grants of stock options were made except those in consideration of the promotion
of Mr. Dimon and his assumption of greater corporate responsibilities as
President and Chief Operating Officer of the Company, and in order to attract to
the Company an executive of the caliber of Mr. Greenhill to enhance the
operations of the new Smith Barney Shearson. In making option awards generally,
the Committee considers the number of options previously granted to each
executive in order to determine whether the total number of shares covered by
all outstanding option awards adequately reflects the individual's importance to
the future success and profitability of the Company.

Compensation of the Chief Executive Officer. 1993 was an extraordinary
year, marked by completion of two major acquisitions that changed the profile of
the Company and substantially increased its size. Operationally, the Company
achieved a significant increase in earnings and, the Committee believes, in
stockholder value as well. Mr. Weill provided the leadership for these
accomplishments.

Accordingly, the Committee believes that an increase of approximately 6.5%
in Mr. Weill's salary and an approximate 89% increase in his cash bonus
compensation is consistent with the relative importance given to salary and
bonus compensation discussed above. No grants of additional stock options were
made, other than by operation of the reload feature of the Company's Option Plan
upon Mr. Weill's exercise of his Control Data options and the reload options
associated with such exercise.

THE NOMINATIONS AND COMPENSATION COMMITTEE:

ARTHUR ZANKEL (Chairman) ANN DIBBLE JORDAN
KENNETH J. BIALKIN ANDRALL E. PEARSON
THE HONORABLE GERALD R. FORD LINDA J. WACHNER

14
<PAGE>

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Kenneth J. Bialkin is a partner in the law firm of Skadden, Arps, Slate,
Meagher & Flom, which performs legal services for the Company from time to time.
In addition, pursuant to the Stock Purchase Agreement dated September 20, 1992
between the Company and old Travelers under which the Company acquired an
approximate 27% investment in old Travelers, the Company obtained the right
to have proportional representation on the Board of Directors of old Travelers
and on each of the Committees of the Board of Directors of old Travelers.
Accordingly, during 1993, one of the Company's executive officers (Mr. Weill)
was one of four members of the Nominations, Compensation and Human Resources
Committee of the Board of Directors of old Travelers. Mr. Budd, former
Chairman and Chief Executive Officer of old Travelers, is a member of
the Board of Directors of the Company (but not a member of the Company's
Nominations and Compensation Committee). On December 31, 1993, upon
receipt of stockholder approval, and pursuant to the Plan and Agreement
of Merger dated as of September 23, 1993, old Travelers was merged with
and into the Company. In addition to these transactions during 1993,
the Company and various of its subsidiaries engaged in insurance and other
business transactions with old Travelers in the ordinary course from time to
time.

SUMMARY COMPENSATION TABLE

The following Summary Compensation Table sets forth compensation paid by
the Company and its subsidiaries to the chief executive officer and the four
other most highly compensated executive officers for services rendered to the
Company and its subsidiaries in all capacities during each of the fiscal years
ended December 31, 1993, 1992 and 1991. The format of this table has been
established by the SEC. ALL SHARE NUMBERS IN COLUMN (G) AND IN THE FOOTNOTES TO
THE TABLE HAVE BEEN RESTATED TO THE EXTENT NECESSARY TO GIVE EFFECT TO THE TWO
STOCK DIVIDENDS DECLARED AND PAID DURING 1993.

SUMMARY COMPENSATION TABLE

<TABLE> <CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS(A)
--------------------------------------- -----------------------------
(A) (B) (C) (D) (E) (F) (G) (I)
- ------------------------------ --------- ----------- ----------- ------------- ----------- ---------------- ---------------
OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING STOCK ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARDS OPTIONS (NUMBER COMPENSATION
PRINCIPAL POSITIONS YEAR ($) ($) ($) ($)(C) OF SHARES) ($)(D)
- ------------------------------ --------- ----------- ----------- ------------- ----------- ---------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Sanford I. Weill.............. 1993 $ 1,018,750 $ 3,030,313 $ 242,290 $ 1,618,515 2,057,219 $ 2,404
Chairman of the Board and 1992 957,308 1,603,750 190,821 1,028,317 4,871,102 1,900
Chief Executive Officer 1991 857,219 1,345,695 872,373 1,250,081
Frank G. Zarb................. 1993 832,083 2,101,250 (B) 1,145,659 581,270 1,000
Vice Chairman and Group 1992 794,400 1,622,500 (B) 969,975 374,634 1,000
Chief Executive 1991 741,667 1,524,583 900,547 118,824
Robert I. Lipp................ 1993 532,083 1,276,979 (B) 666,691 184,541 1,900
Vice Chairman and Group 1992 503,846 910,000 (B) 519,955 400,613 1,576
Chief Executive 1991 453,846 771,538 437,947 104,641
James Dimon................... 1993 518,750 1,430,312 (B) 726,202 450,530 1,132
President, Chief Financial 1992 453,462 885,000 (B) 486,664 483,104 1,132
Officer and Chief 1991 406,731 708,317 388,901 122,840
Operating Officer
Robert F. Greenhill(E)........ 1993 516,635 3,448,341 (B) 19,982,785 1,333,333 0
Chairman and CEO, Smith
Barney Shearson Inc.
</TABLE>

(Footnotes on following page)

15
<PAGE>

(Footnotes for preceding page)

Ownership of Common Stock as of the Record Date for the named
individuals--Mr.Weill: 3,692,181 shares; Mr. Zarb: 403,024 shares; Mr. Lipp:
335,784 shares; Mr. Dimon: 399,158 shares; and Mr. Greenhill: 981,488 shares.
- ---------------

(A) The shares reflected as grants of stock options for 1991, 1992 and 1993
were in each case reload options created automatically upon an exercise
of outstanding options by a surrender of previously owned shares, except
for options covering 230,666 shares granted to Mr. Dimon in 1993 and
covering 1,333,333 shares granted to Mr. Greenhill in 1993.
(B) No disclosure is required in this column for fiscal years ended before
December 15, 1992. Except as set forth in this column, none of the
executive officers received perquisites or other personal benefits during
1993 in an amount equal to or exceeding $50,000. The aggregate amount set
forth for Mr. Weill for 1993 includes perquisites of which $45,418 was
for use of Company transportation and $36,303 was for financial planning
services.
(C) Restricted stock awards are made under the Company's CAP Plan. The CAP
Plan provides for payment, mandatory as to senior executives and others
within the Company, of a portion of compensation in the form of awards of
restricted stock at a discount (currently 25%) from market value. Under
the current award formula in effect under the CAP Plan for corporate
executives, the following percentages of annual compensation are payable
in the form of shares of restricted stock:

<TABLE> <CAPTION>
ANNUAL COMPENSATION % IN RESTRICTED STOCK
- -------------------------------------------------------------------- ---------------------------
<S> <C>
Up to $200,000...................................................... 10%
$200,001 to $400,000................................................ 15%
$400,001 to $600,000................................................ 20%
Amounts over $600,000............................................... 25%
</TABLE>

Annual compensation generally consists of salary and incentive awards.
Except under limited circumstances, the recipient of restricted stock is
not permitted to sell or otherwise dispose of such stock (except by will or
the laws of descent and distribution) for a period of two years from the
date of grant (or such other period as may be determined to be applicable
to various classes of participants in the sole discretion of the
Committee). Except as noted in footnote (E), all of the awards listed in
the table vest on the second anniversary of the date of grant. The
restricted period applicable to awards made for the 1994 plan year,
however, will generally be three years. Upon expiration of such restricted
period, and assuming the recipient's continued employment with the Company,
the shares of restricted stock become fully vested and freely transferable.
From the date of grant, the recipient may vote the restricted stock and
receives dividends or dividend equivalents on the shares of restricted
stock at the same rate as dividends are paid on all outstanding shares of
Common Stock. As of December 31, 1993, the total holdings of CAP Plan
restricted stock and the market value at such date of such shares for each
of the persons in the Summary Compensation Table were as follows: Mr.
Weill: 83,976 shares ($3,264,567); Mr. Zarb: 69,550 shares
($2,703,756.25); Mr. Lipp: 38,615 shares ($1,501,158.125); Mr. Dimon:
38,734 shares ($1,505,784.25); and Mr. Greenhill: 40,134 shares
($1,560,209.25). The year-end market price was $38.875 per share.
(D) Represents the Company matching grant for 1993 pursuant to the Company's
Savings Plan (in the form of Common Stock having a market value of $1,000
at December 31, 1993) and supplemental life insurance premiums paid by the
Company. No disclosure is required in this column for fiscal years ended
before December 15, 1992.
(E) Mr. Greenhill joined the Company in June 1993. In addition to the
restricted stock awarded under the CAP Plan (referred to in Footnote C
above), Mr. Greenhill received a restricted stock award pursuant to his
employment agreement. See "Employment Protection Agreements," below. Such
award covered 533,333 shares, with an aggregate year-end market price (at
$38.875 per share) of $20,733,320, and vests at a rate of 20% per year on
the anniversary of the date of grant.

16
<PAGE>

STOCK OPTIONS GRANTED

The following table sets forth information with respect to stock options
granted during 1993 to each of the executives named in the Summary Compensation
Table. All options granted arose under the reload feature of the Option Plan
except for Mr. Dimon's grant covering 230,666 shares and Mr. Greenhill's grant
covering 1,333,333 shares. For Messrs. Weill, Lipp and Dimon (except as noted),
these reload options arose upon the excercise of reload options associated with
the stock options granted by Control Data Corporation ("Control Data Options")
in 1986 when it was the parent company of the Company's corporate predecessor
to facilitate the public offering of such subsidiary's stock.

The "Grant Date Present Value" numbers set forth in the table below were
derived by application of a variation of the Black-Scholes option pricing model.
The following assumptions were used in employing such model:

. stock price volatility was calculated by using the closing price
of the Company's Common Stock on the NYSE Composite Transactions
Tape for the one year period prior to the grant date of each option;

. the risk-free interest rate for each option grant was the closing
market yields on 5-year Treasury notes or 10-year Treasury bonds on
the date of grant, as reported by the Federal Reserve;

. the dividend yield on the date of the option grant (based upon the
actual dividend rate of either 12 cents per share during the first
two quarters of 1993 or 12.5 cents per share during the last two
quarters of 1993) was assumed to be constant over the life of the
option;

. exercise of the option was deemed to occur 3.75 years after the date
of grant, based upon the Company's historical experience of the
average period between the grant date and exercise date for those
options that have vested; and

. a discount of 9.375% was applied to the option value derived from the
model to reflect the nontransferability and risk of forfeiture of
such employee stock options during the average 3.75 years between
grant date and exercise date referred to in the preceding paragraph.

The potential value of options granted depends entirely upon a long-term
increase in the market price of the Common Stock: if the stock price does not
increase, the options would be worthless and if the stock price does increase,
this increase would benefit both option holders and all stockholders
commensurately. ALL SHARE NUMBERS IN COLUMN (B) AND EXERCISE PRICES IN COLUMN
(D) HAVE BEEN RESTATED TO THE EXTENT NECESSARY TO GIVE EFFECT TO THE TWO STOCK
DIVIDENDS DECLARED AND PAID DURING 1993.

OPTION GRANTS IN 1993(A)

<TABLE> <CAPTION>
INDIVIDUAL GRANTS(B)
(A) (B) (C) (D) (E) (H)
- -----------------------------------------------------------------------------------------------------------
NUMBER OF
SECURITIES % OF
UNDERLYING TOTAL OPTIONS EXERCISE OR
OPTIONS GRANTED GRANTED TO ALL BASE PRICE GRANT DATE
(NUMBER OF EMPLOYEES ($ PER EXPIRATION PRESENT
NAME SHARES) IN 1993 SHARE) DATE VALUE ($)
- ----------------------------------------------- ---------------- --------------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Sanford I. Weill............................... 101,346 1.1% $ 26.0625 02/18/03 $ 658,403
1,558,730 16.7 34.9688 04/30/03 14,363,109
397,143 4.3 49.1250 10/30/02 5,407,008
Frank G. Zarb.................................. 108,554 1.2 26.4375 11/01/98 685,710
218,141 2.3 34.5000 11/01/98 1,944,130
55,045 0.6 39.4688 11/01/98 577,227
88,170 0.9 41.6250 11/01/98 981,498
111,360 1.2 39.1250 01/16/04 1,230,602
Robert I. Lipp................................. 68,826 0.7 25.8750 02/22/03 447,209
85,864 0.9 33.5625 05/02/03 762,915
29,851 0.3 48.0000 11/02/02 395,390
James Dimon.................................... 61,892 0.7 25.9375 02/19/03 404,437
122,396 1.3 34.9688 04/30/03 1,127,832
230,666 2.5 40.1250 08/28/03 2,584,481
35,576 0.4 49.1250 10/30/02 484,359
Robert F. Greenhill............................ 1,333,333 14.3 34.5000 06/23/03 12,355,831

<FN>
(Footnotes on following page)

17
<PAGE>

(Footnotes for preceding page)

- ---------------
(A) Ownership of Common Stock as of the Record Date for the named individuals--
Mr. Weill: 3,692,181 shares; Mr. Zarb: 403,024 shares; Mr. Lipp: 335,784
shares; Mr. Dimon: 399,158 shares; and Mr. Greenhill: 981,488 shares.

(B) The option price of each option granted under the Option Plan is not less
than the fair market value of the Common Stock subject to the option,
determined in good faith by the Committee. Under current rules established
by the Committee, fair market value is the closing sale price of Common
Stock on the NYSE Composite Transactions Tape on the last trading day prior
to the date of grant of the option. Options (other than certain reload
options) generally vest in cumulative installments of 20% on each
anniversary of the date of grant such that the options are fully
exercisable on and after five years from the date of grant until ten years
and one month following such grant (in the case of non-qualified stock
options, which represent all options currently outstanding). The Committee
has discretion to establish a slower vesting schedule for options granted
under the Option Plan.

Participants are entitled to direct the Company to withhold shares
otherwise issuable upon an option exercise to cover in whole or in part
the tax liability associated with such exercise, or participants may cover
such liability by surrendering previously owned shares (other than
restricted stock).

Under the reload feature of the Option Plan, participants who tender
previously owned shares (including CAP Plan restricted stock) to pay all
or a portion of the exercise price of vested stock options or tender
previously owned shares or have shares withheld to cover the associated
tax liability may be eligible to receive a reload option covering the same
number of shares as are tendered or withheld for such purposes. Such
optionee may choose to receive either (i) unrestricted incremental shares
(as defined below) and no reload option, or (ii) incremental shares subject
to a period of restriction on the ability to sell or otherwise transfer
such shares (except in certain circumstances) and a reload option to be
granted in accordance with the applicable terms of the Option Plan. The
initial Committee determination has set the restricted period at two years.
Although the optionee may not transfer his or her incremental shares during
the applicable restricted period, such optionee receives such shares free
and clear upon completion of such restricted period without any risk of
forfeiture, even if such person has retired or is otherwise no longer an
employee of the Company. Unless the Committee in its discretion modifies
or eliminates such restrictions, optionees are permitted to transfer their
incremental shares during the restricted period only under the limited
circumstances of (i) a contribution of such shares to a charitable
organization, or (ii) an event of financial hardship demonstrated to the
reasonable satisfaction of the Senior Vice President, Human Resources,
of the Company.

Further, in order for an optionee to receive a reload option in connection
with his or her exercise of a vested option, the market price of Common
Stock on the date of exercise must equal or exceed the minimum market price
level established by the Committee from time to time (the "Market Price
Requirement"). The Committee has established that the initial Market Price
Requirement shall be a market price on the date of exercise equal to or
greater than 120% of the option exercise price. If the market price does
not equal or exceed the applicable Market Price Requirement, a vested
option may be exercised but no reload option will be
granted in connection with such exercise.

(Footnotes continued on following page)

18
<PAGE>

(Footnotes from preceding page)

"Incremental shares" are those shares of Common Stock actually issued to
an optionee who exercises an option by surrendering previously owned stock
or restricted stock awarded under the CAP Plan to pay the exercise price of
an option, or by surrendering previously owned stock or requesting the
Company to withhold the appropriate number of shares otherwise issuable, to
cover the withholding tax liability associated with option exercise. The
number of incremental shares issued is typically the number of option
shares exercised minus the number of shares deemed "surrendered" to pay for
such exercise and minus the number of shares used or withheld to satisfy
any resulting tax liability in connection with such exercise.

The market value on the date of grant of a reload option establishes the
exercise price of such option, with one of the following sets of other
terms: (1) a term equal to the remaining term of the original option,
except that the reload option will not be exercisable until six months
after its date of grant, or (2) a term of ten years from the date of grant
of the reload option and vesting at the rate of 20% per year.

Reload options are designed to encourage employees to exercise options at
an earlier date and to retain the shares so acquired, in furtherance of
the Company's long-standing policy of encouraging increased employee stock
ownership. With standard stock options, sale of at least a portion of the
stock to be acquired by exercise is often necessitated to cover the
exercise price or the associated withholding tax liability. The employee
thereby receives fewer shares upon exercise, and also forgoes any future
appreciation in the stock sold. By use of previously owned shares to
exercise an option, the employee is permitted to gain from the past price
appreciation in such shares, and receives a new option at the current
market price. The reload option so granted enables the employee to
recognize future stock price appreciation.
</TABLE>

STOCK OPTIONS EXERCISED

The following table sets forth, in the aggregate, the number of securities
underlying options exercised during 1993 and states the value at year-end of
exercisable and unexercisable options remaining outstanding. The "Value
Realized" column reflects the difference between the market price on the date of
exercise and the market price on the date of grant (which establishes the
exercise price for the option) for all options exercised, even though the
executive may have actually received fewer shares as a result of the surrender
of previously owned shares to pay the exercise price or the tax liability, or
the withholding of shares to cover the tax liability associated with option
exercise. Accordingly, the "Value Realized" numbers do not necessarily reflect
what the executive might receive, should he choose to sell the shares acquired
by the option exercise, since the market price of the shares so acquired may at
any time be higher or lower than the price on the exercise date of the option.

ALL SHARE NUMBERS HAVE BEEN RESTATED TO THE EXTENT NECESSARY TO GIVE EFFECT TO
THE TWO STOCK DIVIDENDS DECLARED AND PAID DURING 1993.

19
<PAGE>

AGGREGATED OPTION EXERCISES IN 1993
AND
1993 YEAR-END OPTION VALUES(A)

<TABLE> <CAPTION>
NUMBER OF SECURITIES
NUMBER OF UNDERLYING UNEXERCISED
SECURITIES VALUE OPTIONS AT VALUE OF UNEXERCISED
UNDERLYING OPTIONS REALIZED ($) 1993 YEAR-END IN THE MONEY OPTIONS
NAME EXERCISED(B) (C) (NUMBER OF SHARES) AT 1993 YEAR-END ($)
- --------------------------- ------------------ -------------- -------------------------- ---------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Sanford I. Weill........... 2,729,018 $ 46,899,961 0 4,305,126 $ 0 $ 47,287,541
Frank G. Zarb.............. 762,014 12,695,577 273,187 472,717 954,368 0
Robert I. Lipp............. 235,225 3,101,383 0 349,930 0 4,121,156
James Dimon................ 281,731 4,179,605 0 651,904 0 4,853,202
Robert F. Greenhill........ 0 0 0 1,333,333 0 5,833,332

<FN>
- ---------------
(A) All of the stock options exercised by Messrs. Weill, Lipp and Dimon in 1993 were reload options arising from
Control Data Option exercises. Stock options exercised by Mr. Zarb were either options granted under the old
Primerica Corporation (formerly American Can Company) Long-Term Incentive Plan or reload options associated
with their exercise.
(B) This column reflects the number of shares underlying options exercised in 1993 by the named executive
officers. The actual number of shares received by these individuals from options exercised in 1993 (net of
shares surrendered or withheld to cover the exercise price and tax liabilities) was--Mr. Weill: 671,798
shares; Mr. Zarb: 180,741 shares; Mr. Lipp: 50,683 shares; Mr. Dimon: 61,867 shares; and Mr. Greenhill: 0
shares.
Ownership of Common Stock as of the Record Date for the named individuals--Mr. Weill: 3,692,181 shares; Mr.
Zarb: 403,024 shares; Mr. Lipp: 335,784 shares; Mr. Dimon: 399,158 shares; and Mr. Greenhill: 981,488 shares.
(C) "Value Realized" is in each case calculated as the difference between the market price on the date of
exercise and the market price on the date of grant, which establishes the exercise price for option exercise.
</TABLE>

PERFORMANCE GRAPH

The following line graph compares annual changes in "Cumulative Total
Return" of the Company (as defined below) with (i) Cumulative Total Return of a
performance indicator of equity stocks in the overall stock market, the S&P 500
Index, and (ii) Cumulative Total Return of a "Peer Index," each for the last
five years. The Peer Index is the S&P Financial Index, which comprises the
following Standard & Poor's industry groups: Money Center Banks, Major Regional
Banks, Other Major Banks, Savings & Loan, Life Insurance, Multi-Line Insurance,
Property and Casualty Insurance, Personal Loans and Financial Services
(excluding the Company and both of the government-sponsored entities: the
Federal Home Loan Mortgage Corporation and the Federal National Mortgage
Association). The Peer Index has been weighted based on market capitalization.
"Cumulative Total Return" is calculated (in accordance with SEC instructions) by
dividing (i) the sum of (A) the cumulative amount of dividends during the
relevant period, assuming dividend reinvestment at the end of the month in which
such dividends were paid, and (B) the difference between the market
capitalization at the end and the beginning of such period, by (ii) the market
capitalization at the beginning of such period.

20
<PAGE>

The comparisons in this table are set forth in response to SEC disclosure
requirements, and therefore are not intended to forecast or be indicative of
future performance of the Common Stock.

THE TRAVELERS INC. (FORMERLY PRIMERICA CORPORATION)
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN

[PERFORMANCE GRAPH]

1988 1989 1990 1991 1992 1993
---- ---- ---- ---- ---- ----
The Travelers Inc. 100.00 132.54 107.90 188.44 235.39 383.58
S & P 500 100.00 131.63 127.55 166.32 178.97 196.98
Peer Index 100.00 130.55 102.79 151.05 187.68 208.11

- --------------------
Assumes $100 invested at the closing price on December 31, 1988 in the Company's
Common Stock, the S&P 500 Index, and a Peer Index representing the S&P Financial
Index (excluding the Company and both of the government-sponsored entities: the
Federal Home Loan Mortgage Corporation and the Federal National Mortgage
Association). The Peer Index has been weighted based on market capitalization.

COMPENSATION OF DIRECTORS

Pursuant to the Company's By-Laws, the members of the Board of Directors
are compensated in a manner and at a rate determined from time to time by the
Board of Directors. It has been the practice of the Company since its initial
public offering in 1986 to pay its outside directors in Common Stock, in order
to assure that the directors have an ownership interest in the Company in common
with other stockholders. Compensation of outside directors and designated
honorary directors of the Company currently consists of an annual retainer of
$75,000, payable in Common Stock. A director may elect to defer receipt of
compensation, in which case the annual retainer will be paid entirely in shares
of Common Stock. In the case of directors electing current receipt of
compensation, only such portion that

21
<PAGE>

approximates the current tax liability incurred by the director in respect of
such compensation is paid in cash, and the balance in Common Stock.

Directors receive no additional compensation for participation on
committees of the Board. Additional compensation, if any, for special
assignments undertaken by directors will be determined on a case by case basis,
but no such additional compensation was paid to any director in 1993. Directors
who are employees of the Company or its subsidiaries do not receive any
compensation for their services as directors.

RETIREMENT PLANS

Prior to January 1, 1994, executive officers and employees generally were
eligible to participate in The Travelers Inc. Retirement Plan (the "Retirement
Plan") during their first year of service. Effective January 1, 1994,
eligibility begins on the later of attaining age 21 or completion of one year of
service. Benefits under the Retirement Plan vest after five years of service
with the Company or its subsidiaries. The normal form of retirement benefit is,
in the case of a married participant, a joint and survivor annuity payable over
the life of the participant and his or her spouse, or in the case of an
unmarried participant, an annuity payable over the participant's life. Instead
of such normal form of payment, participants may elect to receive other types of
annuities or a single sum payable at retirement or other termination of service.

When expressed as a single sum payment option, benefits accrue for the
first five years of covered service at an annual rate varying between .75% and
4.0% of the participant's qualifying compensation, depending upon the
participant's age at the time of accrual. "Qualifying compensation" generally
includes base salary (before pre-tax contributions to the Savings Plan or other
benefit plans), overtime pay, commissions and bonuses. Under rules promulgated
by the Internal Revenue Service (the "Service"), a ceiling of $235,840 for 1993
(which will be adjusted annually) is imposed on the amount of compensation that
may be considered "qualifying compensation" under the Retirement Plan.
Legislation adopted in 1993 capped annual qualifying compensation beginning in
1994 at $150,000 (subject to annual adjustment).

During the period of the sixth through the fifteenth year of covered
service, benefits accrue at an annual rate of between 1.25% and 5.0% of the
participant's qualifying compensation, depending upon the participant's age at
the time of accrual. After a participant has completed 15 years of covered
service, benefits accrue at an annual rate varying between 1.25% and 7.0% of the
participant's qualifying compensation, depending upon the participant's age at
the time of accrual. There are also minimum benefits provided for under the
Retirement Plan.

Subject to the statutory maximum benefits payable by a qualified plan (as
described below), a participant also accrues annually an additional amount
calculated as 1.0% to 2.5% of qualifying compensation (again depending upon his
or her age) for that part of qualifying compensation in excess of the amount of
the Social Security wage base. There is an interest accrual added to the
participant's single sum entitlement. This interest amount is determined by
multiplying the prior year's single sum by a percentage determined annually by
the Company.

The Retirement Plan contains transitional provisions for employees who meet
certain age and service requirements. Employees who by January 1, 1990 either
had reached age 63, or had reached the age of 55 and had more than 20 years of
service, are eligible to retire under the provisions of the plans applicable to
them prior to the effective date of the establishment of the Retirement Plan.

The statutory maximum retirement benefit that may be paid to any one
individual by a tax qualified defined benefit pension plan in 1993 is $112,221
annually. Years of service credited under the Retirement Plan to date for each
of the individuals named in the Summary Compensation Table are as

22
<PAGE>

follows: Mr. Weill, 7 years; Mr. Zarb, 5 years; Mr. Lipp, 7 years; Mr. Dimon, 7
years; and Mr. Greenhill, 0.

The Company and certain Company subsidiaries provide certain pension
benefits, in addition to the statutory maximum benefit payable under tax
qualified pension plans, under non-funded, non-qualified retirement benefit
equalization plans ("RBEPs"). The benefits payable under RBEPs are unfunded, and
will come from the general assets of each plan's sponsor. In 1993, the Committee
amended the RBEPs in two respects: first, to exclude certain executives of the
Company and its subsidiaries (including each of the persons named in the Summary
Compensation Table) and employees of certain subsidiaries from further
participation in the RBEPs, and second, to limit the compensation covered by
such plans to a fixed amount of $300,000 (equal to twice the 1994 statutory
maximum qualifying compensation without giving effect to any future adjustments)
less amounts covered by the Retirement Plan, thereby limiting benefits payable
under the RBEPs to all participants. Benefits were accrued through the end of
1993 under one such RBEP for the account of each of the persons named in the
Summary Compensation Table other than Mr. Zarb and Mr. Greenhill.

Effective at the end of 1993, the Committee also froze benefits payable
under the Company's Supplemental Retirement Plan ("SERP") covering supplemental
retirement benefits to designated senior executives of the Company and its
subsidiaries. At that time, 24 individuals were SERP participants, including
each of the individuals named in the Summary Compensation Table. The maximum
benefit payable under SERP is also reduced by any benefits payable under the
Retirement Plan (or its predecessor plans, if applicable), under any applicable
RBEP, under any other Company or subsidiary sponsored qualified or non-qualified
defined benefit or defined contribution pension plan (other than the Savings
Plan or other 401(k) plans), and under the Social Security benefit program.

Estimated annual benefits under the three benefit plans of the Company for
the five executive officers named in the Summary Compensation Table using the
applicable formulas under the Retirement Plan and the frozen RBEP and SERP Plans
and assuming their retirement at age 65, would be as follows: Mr.
Weill--$619,511; Mr. Zarb--$382,652; Mr. Lipp--$295,851; Mr. Dimon--$256,471;
and Mr. Greenhill--$134,558. These estimates were calculated assuming that the
interest accrual was 8% for 1989 through 1991, and 6% for 1992 and thereafter
until the participant retires at the age of 65, and that the current salary of
the participant, the 1994 dollar ceiling on qualifying compensation (which was
set by legislation adopted in 1993 at $150,000 annually), the 1993 Social
Security wage base and the current regulatory formula to convert lump-sum
payments to annual annuity figures each remains unchanged.

EMPLOYMENT PROTECTION AGREEMENTS

The Company has entered into employment protection agreements with certain
of its executive officers. Under the agreement with Mr. Weill, the Company
agrees to employ Mr. Weill as its Chief Executive Officer (and Mr. Weill agrees
to serve in such capacity) with an annual salary, incentive participation and
employee benefits as determined from time to time by the Company's Board of
Directors. The agreement contains automatic one-year renewals (unless notice of
nonrenewal is given by either party). In the event of his termination of
employment without cause, Mr. Weill will be deemed to be vested in the Company's
Retirement Plan, and the agreement further provides that Mr. Weill will be paid
and entitled to receive other employee benefits (as in effect at the termination
date) through the remaining term of the agreement and will be entitled to two
years additional vesting and exercise of his stock options (and a cash payment
based on the value of any portion of the stock options that would not vest
within such additional period). During such period of continuing payments and
stock option vesting and exercise, Mr. Weill would be subject to a
noncompetition agreement in favor of the Company.

The Company has agreed with Mr. Zarb that he will be employed by the
Company as a Vice Chairman and Group Chief Executive for a one-year term with
automatic one-year renewals (unless

23
<PAGE>

notice of nonrenewal is given by either party). Mr. Zarb is to receive a minimum
annual salary and participate in incentive and employee benefit programs offered
to senior executives. In the event that Mr. Zarb is terminated without cause, he
will be deemed to be vested in the Company's Retirement Plan (with credit based
upon a normal retirement age), will be deemed vested in the options granted to
him pursuant to the agreement, and will have an additional 24 months in which to
exercise any such options outstanding on the date of termination. Mr. Zarb would
be subject to a noncompetition agreement in favor of the Company during any
period of continuing payments or vesting and exercise.

Mr. Greenhill entered into an employment agreement dated June 24, 1993
under which he agreed to serve as Chairman of the Board and Chief Executive
Officer of SBS. The agreement, as amended to date, has a term of seven years
and provides for annual compensation based upon a percentage of the
consolidated after-tax earnings of SBS and its subsidiaries, and certain
designated Company subsidiaries. As noted in Item 4, below, Mr. Greenhill has
agreed to terminate the compensation calculation provisions of his agreement to
permit operation of the terms of the Compensation Plan. Under the agreement, Mr.
Greenhill was granted an option to purchase 1,333,333 shares of the Company's
Common Stock at an option price of the then-current market price of $34.50 per
share (all share numbers and prices in this paragraph have been restated for the
subsequent stock split in August 1993). The option has a ten year life and vests
at a rate of 20% per year on the anniversary date of the grant. If Mr.
Greenhill's employment is terminated because of his death or disability, by SBS
without cause (as defined in the agreement), by Mr. Greenhill if SBS is in
material breach of the agreement, or at the end of the term of the agreement,
that portion of the option that was exercisable on or within two years after the
termination date will remain exercisable during such two-year period, and Mr.
Greenhill shall be entitled to receive a cash payment for the shares covered by
the unexercisable portion of the option. Mr. Greenhill also received a grant of
533,333 shares of restricted stock, vesting at a rate of 20% per year on the
anniversary of the grant date. If Mr. Greenhill's employment terminates under
the circumstances described above, the restricted stock grant will also be
subject to continued vesting during the two-year period following such
termination, and Mr. Greenhill will be entitled to a cash payment with respect
to unvested shares. Upon entering into the agreement, Mr. Greenhill also
purchased from the Company 1,000,000 shares of the Company's Common Stock at the
then-current market price, and acquired certain registration rights with respect
to such shares. Pursuant to the terms of his employment agreement, Mr. Greenhill
is entitled to be reimbursed for use of personal aircraft for company business
at an arms' length rate charged for air charter by an unaffiliated third party.
During 1993, such reimbursements to two aircraft companies of which Mr.
Greenhill is sole stockholder totalled approximately $115,000. Mr. Greenhill is
entitled to receive compensation payments calculated for various circumstances
under which his employment may terminate. During any period after termination in
which he receives compensation under the terms of the agreement, Mr. Greenhill
will be subject to a prohibition on hiring certain former employees of SBS
and its subsidiaries.

CERTAIN INDEBTEDNESS

Certain executive officers have from time to time, including periods during
1993, incurred indebtedness to SBS, a wholly owned subsidiary of the Company and
a registered broker-dealer, on margin loans against securities accounts with
SBS. Such margin loans were made in the ordinary course of SBS's business, were
made on substantially the same terms (including interest rates and collateral)
as those prevailing for comparable transactions for other persons, and did not
involve more than the normal risk of collectability or present other unfavorable
features.

CERTAIN TRANSACTIONS

Each of Richard H. Booth, Edward H. Budd and Robert W. Crispin, current
members of the Board of Directors of the Company and employees of The Travelers
Insurance Group Inc., one of the Company's subsidiaries ("TIG"), entered into
employment agreements with TIG in December 1993

24
<PAGE>

with respect to their continuing involvement in the Travelers Insurance
Operations. Mr. Booth's agreement provides that he will serve as President of
TIG for a term of three years. TIG agreed to continue to pay the base salary in
effect on the date of the agreement, and to provide continuing participation in
the benefit plans and other arrangements generally available to senior
executives of TIG. In the event of termination of employment without cause
(or resignation following a reduction in base salary) prior to the term of the
agreement, Mr. Booth would be entitled to continued payment of base salary over
the remaining term of the agreement (together with, if such termination occurs
prior to December 31, 1994, payment of a bonus for 1994 equal to that for 1993),
executive outplacement services, reimbursement of certain tax and other
financial planning services expenses and continued participation in employee
medical plans for one year following the termination. In the event of a
resignation prior to the first anniversary of the contract, Mr. Booth would be
entitled to payment of one year's base salary and continued participation for
one year in employee medical plans. Mr. Budd agreed to serve as Chairman of
TIG at his current salary, including continued eligibility for annual bonuses
and other benefits on the same terms and conditions as senior executive
officers. He was also granted new options to purchase 50,000 shares of Common
Stock of the Company and an award under the CAP Plan of an aggregate of 40,000
shares of Common Stock. If his employment terminates, Mr. Budd will be
entitled to an amount equivalent to the severance payments and will also
receive other benefits payable under the old Travelers severance plan. Mr.
Budd is also entitled to receive retirement benefits under the old Travelers'
qualified and non-qualified retirement plans for service since 1955 as an
employee of old Travelers and as a director and chief executive
officer of old Travelers with service credit to age 65. Such agreement also
reflects Mr. Budd's entitlement to participate in the welfare, benefit and other
plans of old Travelers assumed by the Company. Robert W. Crispin agreed to serve
as Vice Chairman of TIG for a period of three years on terms substantially
similar to those in Mr. Booth's agreement, but with additional service credit
for vesting and benefit determination under the old Travelers retirement plan,
and in the event of a resignation prior to the first anniversary of the
contract, Mr. Crispin would be entitled to payment of an amount relating to
certain unvested stock options (estimated at not more than approximately
$665,000).

ITEM 2:
RATIFICATION OF SELECTION OF AUDITORS

The Board of Directors has selected KPMG Peat Marwick ("Peat Marwick") as
the independent auditors of the Company for 1994. Peat Marwick has served as the
independent auditors of the Company and its predecessors since 1969.
Arrangements have been made for a representative of Peat Marwick to attend the
Annual Meeting. The representative will have an opportunity to make a statement
if he or she desires to do so, and will be available to respond to appropriate
stockholder questions.

RECOMMENDATION

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR RATIFICATION
OF THE SELECTION OF KPMG PEAT MARWICK AS THE COMPANY'S INDEPENDENT AUDITORS FOR
1994. Assuming the presence of a quorum, the affirmative vote of a majority of
the votes cast by the holders of shares of Common Stock and Series C Preferred
Stock present and entitled to vote on this item at the Annual Meeting, voting
as a single class, is required to ratify the selection of the Company's
auditors. Under applicable Delaware law, in determining whether this item has
received the requisite number of affirmative votes, abstentions and broker
non-votes will be counted and will have the same effect as a vote against this
item.

ITEM 3:
APPROVAL AND ADOPTION OF THE TRAVELERS INC.
EMPLOYEE DISCOUNT STOCK PURCHASE PLAN

The Company seeks stockholder approval of The Travelers Inc. Employee
Discount Stock Purchase Plan (the "Plan") because the Code requires such
approval for any plan that is intended to constitute an "employee stock purchase
plan" under Section 423 of the Code. The Board of Directors adopted the Plan on
October 27, 1993 and recommended that it be submitted to the stockholders of the
Company for approval. If the stockholders approve the Plan at the Annual
Meeting, the Plan will become effective retroactively to January 1, 1994.

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The purpose of the Plan is to provide a method for eligible employees of
the Company and its subsidiaries to acquire a proprietary interest in the
Company through the purchase of shares of Common Stock from the Company at a
discount from fair market value, by means of voluntary payroll deductions of an
amount up to $100 per month. A total of 750,000 shares of Common Stock of the
Company (subject to adjustment for stock dividends, stock splits,
recapitalization and other corporate restructuring) has been authorized for
issuance under the Plan. The full text of the Plan, as approved and
adopted by the Board of Directors, is set forth in Annex A to this proxy
statement, and the following description of the Plan is qualified in its
entirety by reference to the text of the Plan.

DESCRIPTION OF THE PLAN

General. The committee generally composed of Company employees that
administers the Plan (the "Plan Committee") will periodically make available to
eligible employees who elect to participate in the Plan (the "Participants") a
maximum number of shares (the "Shares") of Common Stock for a specified period
in an "Offering." Eligible employees will be able to purchase Common Stock
during an Offering at a price less than the fair market value of the Common
Stock on the date of purchase, from funds accumulated through payroll deductions
beginning on the effective date of each such Offering (the "Effective Date").
The current discount from market value has been set at 10%. The maximum number
of Shares that each Participant may purchase under each Offering will be
determined by the Senior Vice President, Human Resources of the Company (the
"Vice President") by dividing the aggregate number of Shares available for
purchase during such Offering by the number of Participants. The right of an
eligible employee to purchase Shares in any Offering is referred to as an
"Option."

Shares purchased under the Plan will be held for each Participant's account
("Account") on the records of an agent for the Plan (the "Plan Agent"). The
Company will, upon the request of a Participant, not more often than once during
any calendar year, deliver a certificate to such Participant representing all or
a portion of his or her full Shares, provided that such Shares have been held in
such Participant's Account for at least the holding period provided for under
the Plan (which shall be determined for each Offering by the Vice President in
his or her discretion) (the "Minimum Holding Period"). The current Minimum
Holding Period is 12 months.

Eligibility. The Plan is open to each person who is determined by the Vice
President to be a "full-time" employee of the Company or one of its Subsidiaries
(as defined in the Plan) but excluding (i) any employee who is a "highly
compensated employee" (as that term is defined in Section 414(q) of the Code),
or (ii) any employee who after the grant of an Option would own stock possessing
5% or more of the total combined voting power of all classes of stock of the
Company or any of its Subsidiaries, or (iii) any employee who has been
designated by the Board of Directors of the Company as a person subject to the
reporting and short-swing profit liability provisions of Section 16 of the
Exchange Act. For the purposes of the Plan, a full-time employee is one whose
customary employment is for more than 20 hours per week and more than five
months in any calendar year. As of December 31, 1993, under such definition,
approximately 22,600 persons were eligible to participate in the Plan.

The Plan is designed to be unavailable to any executive officers of the
Company (including the individuals named in the Summary Compensation Table) and
any non-employee directors of the Company. The group of eligible employees may,
however, include non-executive officers of the Company and any of its
participating subsidiaries. Since participation by any eligible employee is
elective, it is not possible to predict the benefits that may accrue to any
individual or group of individuals under the Plan.

Administration. The Plan is administered by the Plan Committee which has
responsibility for general operation of the Plan and has the power to interpret
provisions of the Plan. The Vice President will designate the maximum number of
Shares available for purchase by Participants in an Offering.
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The Vice President may also in his or her discretion increase or decrease the
Minimum Holding Period from time to time. In addition, the Vice President will
establish the terms of each Offering and Option, and will determine the persons
eligible to participate in each such Offering, subject in each case to the terms
of the Plan.

Participation. After a Participant's enrollment in the Plan becomes
effective, the amount to be deducted from a Participant's payroll check for a
given pay period will be deducted and allocated to such Participant's Account
under the Plan. Following the closing of enrollment for any Offering, the
maximum number of Shares that each Participant may purchase under such
Offering will be established.

On the last business day of an Offering for which payroll deductions will
be made (the "Expiration Date"), each Participant will be deemed automatically
to have exercised the Option granted to him or her, and all of the funds
accumulated in such Participant's Account from payroll deductions will be
applied to the purchase from the Company of the largest possible number of whole
Shares. Fractional Shares will be allocated to a Participant's Account but will
not be issued at any time. If the funds in a Participant's Account are
insufficient to purchase all of the Shares comprising the Option, such
Participant's Option with respect to such excess Shares will be deemed to have
lapsed. The Shares purchased under the Plan may consist of newly-issued, or
previously issued and reacquired, shares of Common Stock, or both.

The purchase price of each Share purchased under the Plan will be an amount
equal to a percentage determined by the Vice President (the "Discount
Percentage") multiplied by the lesser of (i) the Fair Market Value per Share on
the Expiration Date, or (ii) the average of the Fair Market Values determined on
the last trading day of each of the months covered by the Offering. "Fair Market
Value" is defined as the closing price of the Common Stock on the date of the
determination, as reported on the NYSE Composite Transactions Tape. The Code
requires that the purchase price will in no event ever be less than 85% of the
lesser of the Fair Market Value on the Effective Date or the Fair Market Value
on the Expiration Date. The initial Discount Percentage under the Plan has
been set at 90%.

Shares will be held in custody for the Account of each Participant. Once
during each calendar year, a Participant may obtain a stock certificate
representing Shares held in his or her Account by sending a written request
therefor to the Plan Committee. Except in certain limited circumstances as more
fully described below, Participants will not be able to withdraw Shares as to
which the Minimum Holding Period has not expired. A Participant will possess all
the rights and privileges of a stockholder of the Company with respect to all of
the Shares held in his or her Account under the Plan, including the right to
direct the vote with respect to such Shares, and will receive all distributions
(other than cash dividends which will be reinvested) and stockholder
communications with respect to such Shares. A Participant will not be able to
pledge, transfer or sell such shares until they are issued to the Participant in
certificate form after satisfaction of the Minimum Holding Period. Withdrawals
of Shares prior to the end of the applicable Minimum Holding Period will be
permitted only for the purpose of (i) charitable contributions of such Shares,
or (ii) financial Hardship, demonstrated to the reasonable satisfaction of the
Plan Committee and in accordance with the "Hardship" definition in the Plan. No
fractional shares will be issued under the Plan.

No interest will be payable on amounts held in Accounts, and the proceeds
received by the Company upon exercise of Options under the Plan will constitute
general funds of the Company. An Option granted under the Plan will not be
transferable and will be exercisable only by the Participant to whom it is
granted.

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Each calendar quarter, the Plan Agent will send each Participant a
statement of such Participant's Account that will include Plan information to
the extent required by the Code.

Dividends. Cash dividends paid on all Shares held under the Plan on the
record date on behalf of each Participant will be invested promptly in shares of
Common Stock at the full Fair Market Value on such date, and the resulting
shares or fractional shares will be allocated to each Participant's Account
under the Plan.

Withdrawal. A Participant may stop participating in the Plan at any time by
suspending payroll deductions entirely but partial withdrawals will not be
permitted. Upon a withdrawal, the balance of cash in such Participant's Account
will be forwarded to the employee by the Plan Agent. Shares held in a
Participant's Account shall remain in the custody of the Plan Committee and may
be issued in certificate form to the Participant after the expiration of the
applicable Minimum Holding Periods and the taking of the appropriate steps by
the Participant to request the issuance of such certificates. After terminating
his or her participation in an Offering, such employee may not re-enroll in such
Offering or in the next succeeding Offering but may enroll in any other future
Offerings for which such employee is eligible under the Plan by following the
procedures for enrollment.

Expenses. Fees and expenses incurred in connection with the administration
of the Plan will be paid by the Company.

Amendments to and Discontinuance of the Plan. The Board of Directors of the
Company or the Vice President may suspend or terminate the Plan, or amend or
modify the terms of the Plan at any time except that (i) no amendment shall
cause any Option to fail to qualify as a stock purchase option under Section
423 of the Code; (ii) stockholder approval is required for any amendment that
would increase the total number of shares of Common Stock issuable under the
Plan (other than pursuant to provisions of the Plan relating to adjustments in
the event of stock splits, stock dividends, mergers and other changes in the
capitalization of the Company), and (iii) no termination or amendment of the
Plan may adversely affect the rights of a Participant under an Option
outstanding at the time of such termination or amendment without the consent of
such Participant.

Stockholder Approval; Effectiveness. The Plan will be effective as of
January 1, 1994, subject to receipt of stockholder approval within 12 months
after its adoption by the Board of Directors. If the stockholders of the Company
do not approve the Plan at the Annual Meeting, the Plan will terminate, the
unexercised portions of all Options granted prior to the Annual Meeting will be
rendered null and void and any shares of Common Stock issued under the Plan will
be cancelled. In that event, the Company will return to the Participants,
without interest, all funds obtained from such Participants through payroll
deductions.

FEDERAL INCOME TAX CONSEQUENCES

Amounts deducted from a Participant's payroll check under the Plan continue
to be taxable income to the Participant in the year such amounts are earned.
Such income would be subject to taxation to the same extent (Federal, state, and
local) as other compensation income received by the Participant. Participants
will not recognize additional taxable income either (i) at the time an Option is
granted pursuant to the Plan, or (ii) at the time an Option is exercised under
the Plan.

The tax basis of Shares purchased under the Plan will be the price at which
they are purchased by the Plan Committee for the Accounts of the Participants.
The Participant's Minimum Holding Period for a Share will begin on the date the
Share is purchased and credited to such Participant's Account. A Participant
will not realize any taxable income when he or she receives a certificate
representing full
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Shares withdrawn from his or her Plan Account, either upon his or her request
for withdrawal of Shares or upon complete withdrawal from or termination of the
Plan.

A Participant who purchases Shares pursuant to an Option under the Plan and
disposes (by sale or exchange) of such Shares more than two years after the
Option is granted and more than one year after the Option is exercised, or who
dies at any time while holding the Shares, will recognize ordinary income at the
time of disposition or death in an amount equal to the lesser of (i) the excess,
if any, of the Fair Market Value of the Shares at the time of the disposition or
death over the purchase price paid for the Shares, or (ii) the excess of the
Fair Market Value of the Shares at the time the Option was granted over the
purchase price that would have been paid had such price been calculated by
multiplying the Discount Percentage by the Fair Market Value determined on the
Effective Date. The Participant's basis in the Shares disposed of will be
increased by the amount of ordinary income recognized. Any further gain
recognized on the disposition will be taxed as long-term capital gain.

A Participant who purchases Shares pursuant to an Option under the Plan and
disposes of such Shares less than two years after the Option is granted or less
than one year after the Option is exercised will recognize ordinary income at
the time of disposition in an amount equal to the excess of the Fair Market
Value of the Shares on the date of exercise of the Option over the purchase
price paid for such Shares. Any additional gain or loss recognized by the
Participant on the disposition will be short-term or long-term capital gain or
loss, depending on the Participant's holding period for the Shares transferred.

PARTICIPANTS ARE URGED TO CONSULT WITH THEIR OWN TAX ADVISORS TO DETERMINE
THE PARTICULAR TAX CONSEQUENCES THAT MAY RESULT FROM PARTICIPATION IN THE PLAN
AND THE SUBSEQUENT DISPOSAL OF SHARES PURCHASED PURSUANT TO THE PLAN. NOTHING
CONTAINED HEREIN SHALL BE TREATED AS TAX ADVICE.

The Plan is not subject to the provisions of the Employee Retirement Income
Security Act of 1974, as amended, and is not qualified under Section 401(a) of
the Code.

RECOMMENDATION

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR APPROVAL AND
ADOPTION OF THE TRAVELERS INC. EMPLOYEE DISCOUNT STOCK PURCHASE PLAN. Assuming
the presence of a quorum, the affirmative vote of a majority of the votes cast
by the holders of shares of Common Stock and Series C Preferred Stock present
and entitled to vote on this item at the Annual Meeting, voting as a single
class, is required to approve and adopt the Plan. Under applicable Delaware law,
in determining whether this item has received the requisite number of
affirmative votes, abstentions and broker non-votes will be counted and will
have the same effect as a vote against this item.

ITEM 4:
APPROVAL AND ADOPTION OF THE TRAVELERS INC.
EXECUTIVE PERFORMANCE COMPENSATION PLAN

On February 25, 1994, the Committee adopted the Compensation Plan and
recommended that it be submitted to stockholders for approval at the Annual
Meeting. The Compensation Plan establishes certain performance criteria for
determining the maximum amount of bonus compensation available under the
Compensation Plan, including that portion of bonuses payable in the form of
restricted stock under the Company's CAP Plan, for those executive officers who,
on the last day of the Company's taxable year, consist of the chief executive
officer and the four other most highly compensated executive officers of the
Company or its subsidiaries named in the Summary Compensation Table in the
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Company's proxy statement from time to time (the "Covered Employees"). The
performance criteria under the Compensation Plan will generally be based upon
overall Company performance for those executives whose responsibilities are
principally company-wide, and specific subsidiary or segment performance for
those executives whose principal responsibilities relate to particular
subsidiaries or segments, as determined by the Committee from time to time.
Bonuses based upon the formulas established under the Compensation Plan may be
subject to significant variations from year to year, given the potential
volatility of certain of the financial services businesses in which the Company
engages.

The Compensation Plan is intended to address certain limitations on the
deductibility of executive compensation under Section 162(m) of the Code, as
amended by the Omnibus Budget Reconciliation Act of 1993 (the "Revenue Act").
The Revenue Act limits the deductibility of certain compensation in excess of $1
million per year paid by a publicly traded corporation to Covered Employees.
Certain types of compensation may be excluded from the limitations on
deductibility, including compensation that qualifies as "performance-based
compensation."

The Service in its proposed regulations under Section 162(m) has indicated
that four tests must be met to qualify as performance-based compensation.
Compensation will not be subject to the deduction limit if (i) it is payable on
account of the attainment of one or more performance goals; (ii) the performance
goals are established by a compensation committee of the board of directors that
comprises solely two or more outside directors; (iii) the material terms of the
compensation and the performance goals are disclosed to and approved by
stockholders before payment; and (iv) the compensation committee certifies that
the performance goals have been satisfied before payment. In an effort to comply
with the provisions of the Revenue Act and to qualify the compensation payable
to Covered Employees under the Compensation Plan (and the related restricted
stock awards under the CAP Plan) as performance-based compensation, eligible for
exclusion from the deduction limit, the Compensation Plan is being submitted to
stockholders for approval at the Annual Meeting. The full text of the
Compensation Plan is set forth in Annex B to this proxy statement, and the
following description of the Compensation Plan is qualified in its entirety by
reference to the text of such Plan.

The Compensation Plan establishes performance goals for the award of
bonuses to each of the Covered Employees, who are expected to be the executive
officers named in the Summary Compensation Table. The Compensation Plan sets
forth performance-based criteria based on the consolidated net income of the
Company and its subsidiaries for the four Covered Employees other than Mr.
Greenhill (the "Four Covered Employees"), each of whom, as an executive officer,
has wide ranging responsibilities for the Company's overall performance. Mr.
Greenhill's performance criteria are based principally upon the results of SBS,
the corporate entity under his direction as President, Chairman and Chief
Executive Officer pursuant to a written agreement described under "Executive
Compensation--Employment Protection Agreements," above.

The creation of a bonus pool in which the Four Covered Employees will
participate is contingent upon the Company achieving at least a certain minimum
return on common equity ("Return on Equity"). Return on Equity levels will be
determined by dividing (i) the consolidated net income of the Company for the
Bonus Year (as defined below) subject to certain adjustments described below
(the "Adjusted Net Income"), by (ii) the common stockholders' equity of the
Company reported at the beginning of the Bonus Year ("Stockholders' Equity").
The Return on Equity calculation will not take into account the payment of the
bonuses determined thereunder.

The starting point for determination of Adjusted Net Income will be "Net
Income," the consolidated net income figure disclosed on the Consolidated
Statement of Income in the Company's Annual Report for the relevant Bonus Year.
In determining "Adjusted Net Income," Net Income will be
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reduced by dividends on the Company's preferred stock and will be adjusted by
the exclusion of the after-tax earnings impact of certain items to the extent
they are applicable in a given Bonus Year. The Compensation Plan lists the
excluded items as:

. realized investment gains and losses (including those resulting from
sale of subsidiaries and affiliates);

. the cumulative effect to the beginning of the year of changes in
accounting principles mandated by any governing body that sets
accounting standards applicable to the determination of net income;

. the cumulative effect to the beginning of the year of changes in tax
law; and

. extraordinary items, as defined under generally accepted accounting
principles. Extraordinary items would not include such items as
catastrophic insurance losses or restructuring charges.

The term "Bonus Year" shall mean the period for which the calculation of a
bonus award is to be made. The audited financial statements will serve as the
basis of such a calculation and the "Bonus Year" would in each case correspond
to a calendar year. "Stockholders' Equity" will equal the beginning common
stockholders' equity number appearing on the Company's Consolidated Statement of
Changes in Stockholders' Equity for the Bonus Year.

If Return on Equity is less than 10%, no bonus pool will be created. If a
Return on Equity of 10% is achieved, a bonus pool equal to 1.4% of Adjusted Net
Income will be established. The amount of the bonus pool will be subject to
cumulative increases based upon the extent to which the Return on Equity exceeds
the 10% minimum threshold. If the Return on Equity is greater than 10% but not
more than 12.5%, the bonus pool will be increased by the addition of 2.4% of the
amount by which Adjusted Net Income exceeds 10% of Stockholders' Equity. If the
Return on Equity is greater than 12.5% but not more than 15%, the bonus pool
will be increased by the addition of 3.4% of the amount by which Adjusted Net
Income exceeds 12.5% of Stockholders' Equity. If the Return on Equity exceeds
15%, the bonus pool will be increased by the addition of 3.8% of the amount by
which Adjusted Net Income exceeds 15% of Stockholders' Equity. Accordingly, the
Return on Equity calculation established under the Compensation Plan will be
the basis on which both the availability and size of the bonus pool is
determined.

The Compensation Plan also establishes for each of the Four Covered
Employees their maximum percentage share in any bonus pool that may be
established under the formula, as follows: Mr. Weill: 31%; Mr. Dimon: 23%; Mr.
Lipp: 23%; and Mr. Zarb: 23%. Any portion (up to $3 million) of a share of the
bonus pool calculated for any of the Four Covered Employees for a particular
Bonus Year may be awarded by the Committee to such Covered Employee in a
succeeding year to the extent not awarded for the Bonus Year; provided
that such award by the Committee will only be made to reward extraordinary
performance by any such Covered Employee.

Because earnings may be subject to significant business fluctuations, and
because of the fundamental change in the composition of the Company effected in
1993 by the acquisition of the retail and asset management businesses of
Shearson Lehman and the old Travelers businesses, the hypothetical amounts that
individuals could have received had the Compensation Plan been in place in 1993
should not be seen as accurate predictions of any future payments, should the
Compensation Plan be implemented. Furthermore, with the acquisition of old
Travelers in exchange for shares of Common Stock of the Company, the historical
return on equity results are not necessarily an appropriate indication of future
results, since old Travelers has historically had a lower rate of return than
the
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Company, and the Stockholder's Equity of the Company has increased by more
than $3
billion as a result of the old Travelers acquisition. Nevertheless, had the
Compensation Plan been in place in 1993, the maximum bonus pool would have
consisted of $19.9 million, subject to reduction by the Committee in its
discretion under the Compensation Plan, and the maximum bonus amounts applicable
to the Four Covered Employees who would have been subject to the terms of the
Compensation Plan would have been: Mr. Weill, $6.3 million; and to each of
Messrs. Dimon, Lipp and Zarb, $4.7 million, each amount subject to reduction by
the Committee in its discretion under the Compensation Plan. Bonuses actually
awarded in the past three years to the individuals named in the Summary
Compensation Table are set forth in such Table, above.

In the event that any of the Four Covered Employees does not qualify as a
Covered Employee for a particular Bonus Year (e.g., due to a termination of
employment), the percentage share of the bonus pool otherwise allocable to such
person shall be allocated to the executive officer who replaces him or her as a
Covered Employee for such year. In the event that an individual (other than Mr.
Greenhill) is added to the Four Covered Employees, the calculation of the bonus
pool will be made as if there were four Covered Employees and the bonus pool
will then be increased by the dollar amount allocated to any one of the Four
Covered Employees (other than the chief executive officer) for such Bonus Year.
Such increase will represent the maximum share allocated to such new Covered
Employee. In the event one of the Four Covered Employees, or his or her
replacement, becomes the chief executive officer of the Company, such Covered
Employee shall be allocated the percentage share allocated to the chief
executive officer.

Robert F. Greenhill entered into an employment agreement with SBS in June
1993, when he became a director of the Company and President, Chairman and Chief
Executive Officer of SBS. See "Executive Compensation--Employment Protection
Agreements," above, for a description of Mr. Greenhill's agreement. In order to
assist the Company in preserving the corporate tax deduction associated with his
bonus payment, Mr. Greenhill has agreed, upon the mailing of this proxy
statement, to terminate the compensation provisions of the contract entered into
in June 1993 and to enter into a revised compensation arrangement that will
provide him with a base salary of $995,000 per annum, with his bonus
compensation being established under the Compensation Plan. Accordingly, the
Compensation Plan provisions applicable to Mr. Greenhill contemplate that Mr.
Greenhill will not be entitled to a bonus unless the "Defined After-Tax
Earnings" for a Bonus Year exceed $100,000,000. For this purpose, "Defined
After-Tax Earnings" for any fiscal year shall mean the aggregate of (i) the
consolidated after-tax net income of SBS Holdings and its subsidiaries and (ii)
the after-tax net income of those Company subsidiaries designated in his
employment agreement, in each case as reflected on its audited financial
statements for such year, prepared in accordance with generally accepted
accounting principles consistently applied and certified by independent public
accountants. Furthermore, if Defined After-Tax Earnings exceed $100 million,
Mr. Greenhill will be entitled to receive 2% of Defined After-Tax Earnings from
$49,750,000 up to and including $750 million, 1.5% of Defined After-Tax Earnings
in excess of $750 million up to but not exceeding $1 billion, and 1% of Defined
After-Tax Earnings in excess of $1 billion. The Compensation Plan further
provides for adjustments in the calculation of Defined After-Tax Earnings for
periods of less than a full fiscal year. Had the Compensation Plan
been in place in 1993, and had Mr. Greenhill been employed by SBS for the
entire year,
Mr. Greenhill would have been entitled to a bonus payment of $4.9 million.
Because earnings may be subject to significant business fluctuations, such
hypothetical amount should not be seen as an accurate prediction of any future
payments. The bonus received by Mr. Greenhill for the portion of the 1993
calendar year that he was employed by SBS is shown in the Summary Compensation
Table, above.

The Return on Equity calculation applicable to the Four Covered Employees
and the Defined After-Tax Earnings calculation for Mr. Greenhill represent what
the Company believes to be performance-based compensation in accordance with the
requirements of Section 162(m) of the Code. If the
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applicable minimum performance-based requirement is not met, no bonus payments
will be made under the Compensation Plan to the Four Covered Employees or to Mr.
Greenhill. In the event that bonus compensation thresholds are met and the
percentages set forth in the Compensation Plan are applied, the Committee
nevertheless retains discretion to reduce or eliminate payments under the
Compensation Plan for any of the Four Covered Employees to take into account
subjective factors, including an individual's performance or other relevant
criteria.

The Compensation Plan also provides that, if permitted under Section 162(m)
of the Code, payments may be made before year-end based upon estimates of the
applicable performance goals, as certified by the Committee, for the relevant
bonus year, or, alternatively, the Committee may pay all or a portion of bonus
compensation before the end of a calendar year by setting a measurement period
other than the calendar year for determining the bonus pool, if the Committee
concludes that all or a portion of bonus compensation should be paid before the
end of that calendar year. Any such change to the measurement period will be
made before the new measurement period begins. In such event, all
determinations will be based upon the books and records of the Company for
the applicable performance goal measurement period. The bonus year will, in
any event, continue to be the calendar year.

In the event that subsequent guidance provided by the Service under Section
162(m) is substantially different from the proposed regulations, with the effect
that the Compensation Plan fails to ensure the deductibility of compensation
payable thereunder, the Committee retains the right to modify the Compensation
Plan for the Four Covered Employees to the extent necessary to conform any
provisions to bring them into compliance, including but not limited to
deletion of any non-conforming provisions, or to discontinue the Compensation
Plan and determine that it shall be of no effect, notwithstanding the receipt
of stockholder approval at the Annual Meeting. The Plan will take effect as
of January 1, 1994, subject to receipt of stockholder approval. If the
Compensation Plan is not approved by stockholders, it will not have any
effect.

RECOMMENDATION

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR APPROVAL
AND ADOPTION OF THE TRAVELERS INC. EXECUTIVE PERFORMANCE COMPENSATION PLAN.
Assuming the presence of a quorum, the affirmative vote of a majority of the
votes cast by the holders of shares of Common Stock and Series C Preferred
Stock present and entitled to vote on this item at the Annual Meeting,
voting as a single class, is required to approve and adopt the Compensation
Plan. Under applicable Delaware law, in determining whether this item has
received the requisite number of affirmative votes, abstentions and broker
non-votes will be counted and will have the same effect as a vote against this
item.

SUBMISSION OF FUTURE STOCKHOLDER PROPOSALS

Any stockholder who intends to present a proposal at the next Annual
Meeting of Stockholders and who wishes such proposal to be included in the
proxy statement for that meeting must submit such proposal in writing to
the Secretary of the Company, at the address of the Company set forth on
the first page of this proxy statement, and such proposal must be received
on or before November 30, 1994.

OTHER MATTERS

The Board of Directors and management of the Company know of no other
matters to be brought before the Annual Meeting. If other matters should arise
at the Annual Meeting, shares represented by proxies will be voted at the
discretion of the proxy holder.

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ANNEX A

THE TRAVELERS INC.
EMPLOYEE DISCOUNT STOCK PURCHASE PLAN
ARTICLE I
PURPOSE

SECTION 1.1 This Employee Discount Stock Purchase Plan is intended to
encourage employees of The Travelers Inc. ("Travelers") and its subsidiaries
(collectively, together with Travelers, the "Company") to remain in the employ
of the Company and to acquire a proprietary interest in Travelers through the
purchase of common stock of Travelers. It is intended that this Plan shall
constitute an "Employee Stock Purchase Plan" within the meaning of Section 423
of the Internal Revenue Code of 1986, as amended. Pursuant to this Plan, certain
employees will be able to purchase common stock of Travelers at a price less
than the fair market value on the date of purchase, from funds accumulated
through payroll deductions within a period of not more than 27 months from the
effective date of any Offering under this Plan.

ARTICLE II
DEFINITIONS

SECTION 2.1 The following words and phrases shall have the meanings
indicated for the purpose of the Plan unless the context clearly indicates
otherwise:

(a) ACCOUNT. The account established by the Committee for each
Participant.

(b) BOARD OR BOARD OF DIRECTORS. The Board of Directors of Travelers.

(d) COMMITTEE. The Committee named by the Vice President from time to
time to administer the Plan.

(e) COMPANY. Travelers and any of its subsidiaries whose employees are
participating in this Plan.

(f) COMMISSION. The United States Securities and Exchange Commission or
any successor agency.

(g) EFFECTIVE DATE. The first date on which payroll deductions shall be
withdrawn for the purpose of purchasing Stock pursuant to each
Offering under the Plan. Such date shall be specified in each
Offering.

(h) EMPLOYEE. Any person who is a common law employee of the Company
except for any employee whose customary employment is for either not
more than 20 hours per week, or not more than five months during any
calendar year.

(i) EXCHANGE ACT. The Securities Exchange Act of 1934, as amended.

(j) EXPIRATION DATE. The last day on which payroll deductions may be
withdrawn and if not withdrawn, the last day on which payroll
deductions will be made for the purpose of purchasing Stock pursuant
to the terms of an Offering. Such date shall be specified in each
Offering, and shall be not later than 27 months from the Effective
Date of any Offering.

A-1
<PAGE>

(k) HARDSHIP. For purposes of this Plan, each of the following
circumstances shall be deemed to be a hardship: (i) unreimbursed
medical expenses as described in Section 213(d) of the Code incurred
by the Optionee or the Optionee's spouse or any dependents, (ii)
purchase (including mortgage payments) of a principal residence for
the Optionee, (iii) payment of tuition for the next semester or
quarter of post-secondary education for the Optionee or the
Optionee's children or dependents, (iv) payment of amounts necessary
to prevent the eviction of the Optionee from his or her principal
residence or foreclosure on the mortgage of the Optionee's principal
residence, (v) payment of funeral and other expenses incurred in
connection with the death of a member of the Optionee's immediate
family, or (vi) any other deemed immediate and heavy financial need
set forth in Treasury Regulations or Revenue Rulings governing plans
described in Section 401(k) of the Code. The Vice President's
determination of the existence of an Optionee's immediate and heavy
financial hardship shall be final and binding on the Optionee.

(l) MINIMUM HOLDING PERIOD. The period of time Shares purchased under
the Plan are to be held in custody in a Participant's Account, as
specified by the Vice President, in connection with establishment of
the terms and conditions of each Offering.

(m) OFFERING. Any offering made by Travelers in accordance with
applicable laws and regulations, and the terms and conditions of the
Plan, permitting Participants to purchase Stock under the Plan.

(n) OPTION. The right of an eligible Employee to purchase Stock by
participating in an Offering.

(o) OPTIONEE OR PARTICIPANT. An Employee who exercises his or her Option
by authorizing payroll deductions pursuant to Section 6.2 hereof.

(p) PLAN. The Travelers Inc. Employee Discount Stock Purchase Plan, as
herein set forth, and as amended from time to time pursuant to
Section 12.1.

(q) SHARES or STOCK. Shares of the common stock, par value $.01 per
share, of Travelers.

(r) SUBSIDIARIES. Any entity described in Section 423(b)(3) of the Code.

(s) TRAVELERS. The Travelers Inc. (formerly Primerica Corporation), a
Delaware corporation, and its successors.

(t) VICE PRESIDENT. The Senior Vice President, Human Resources of
Travelers.

SECTION 2.2 The masculine gender shall include the feminine, and the
singular shall include the plural, where appropriate.

ARTICLE III
ADMINISTRATION OF THE PLAN

SECTION 3.1 The Plan shall be administered by the Committee.

SECTION 3.2 The Committee shall have full and exclusive power and
discretion to construe and interpret the Plan, and generally to determine any
and all questions arising under the Plan.

SECTION 3.3 The Vice President shall have the exclusive power to determine
and fix the terms of Offerings and Options, subject to the express requirements
and provisions of the Plan.

SECTION 3.4 The Committee or the Vice President may from time to time
designate a plan agent to fulfill the custody and record-keeping requirements
under the Plan (the "Plan Agent"). The Plan Agent may consist of employees of
the Company or third parties.

A-2
<PAGE>

ARTICLE IV
EMPLOYEES ELIGIBLE TO PURCHASE STOCK

SECTION 4.1(a) All Employees shall be eligible to purchase Stock under the
Plan except the following groups:

(i) any Employee who is a "highly compensated employee" (as that term
is defined in Section 414(q) of the Code) for the calendar year preceding
the Offering or who is expected to be a highly compensated employee for the
calendar year of the Offering; or

(ii) any Employee who, immediately after the granting of an Option,
would own (or be deemed to own under the rules of Section 423(b)(3) of the
Code) stock of Travelers of any class possessing five percent (5%) or more
of the total combined voting power or value of all classes of stock of
Travelers or any of its Subsidiaries. If the effect of the granting of an
Option to an Employee is such that his total stock ownership (as determined
under Section 423(b)(3) of the Code) equals or exceeds such five percent
(5%) limitation, such Option shall be entirely void as if it had never been
granted; or

(iii) any Employee who has been designated by the Board of Directors
of Travelers as a person subject to the reporting and short-swing profit
liability provisions of Section 16 of the Exchange Act with respect to
Travelers.

SECTION 4.1(b) Any determination of an Employee's eligibility status shall
be made by the Vice President whose determination shall be final and binding on
all parties.

ARTICLE V
STOCK

SECTION 5.1 The Stock subject to Offerings shall be Shares of Travelers'
authorized but unissued, or reacquired, common stock.

ARTICLE VI
OFFERINGS; GRANTING OF OPTIONS; AUTHORIZATION OF PAYROLL
DEDUCTIONS BY PARTICIPANTS

SECTION 6.1 Offerings may be made from time to time to all Employees who
meet all of the standards of eligibility set forth in Article IV. Proposed
Offerings shall be established and announced by the Vice President. Every
eligible Employee on the Effective Date of any Offering shall be deemed to have
been granted an Option pursuant to the terms of that Offering.

SECTION 6.2 Each eligible Employee shall be entitled to become a
Participant and to purchase Stock pursuant to the terms of an Offering by filing
an election to participate in that Offering in the form of a payroll deduction
authorization with the Human Resources Department of Travelers on a form
prescribed by the Committee within such times as may be specified in such
Offering. Payroll deductions shall (i) commence with the first regular payroll
period coinciding with or ending on the Effective Date, or at such other time as
may be specified in such Offering, and (ii) shall end on the earlier of the last
regular payroll period coinciding with or ending before the Expiration Date or
upon the termination of the employment of a Participant by the Company.

A-3
<PAGE>

ARTICLE VII
TERMS AND CONDITIONS OF OFFERINGS AND OPTIONS

SECTION 7.1 Except as provided in subparagraphs (a) and (e) of this Section
7.1, all eligible Employees shall have the same rights and privileges.

(a) NUMBER OF SHARES: Each Offering shall specify the maximum number of
shares available under such Offering and the method of determining
the maximum number of Shares which may be purchased pursuant to any
Offering by each Participant, subject to any stated maximum number
of shares that may be specified by the Committee and to the
limitations of subparagraph (e) of this Section 7.1. Notice that the
Employee has been granted and effectively exercised an Option to
purchase Stock hereunder will be delivered to each Participant.

(b) OPTION PRICE: Each Offering shall state that the price per share at
which Stock may be purchased thereunder shall be not less than the
lesser of (a) eighty-five percent (85%) of the fair market value per
share of Stock on the Expiration Date or (b) eighty-five percent
(85%) of the fair market value per share of Stock on the date the
Option is granted. The fair market value per share of Stock shall be
the closing price reported on the New York Stock Exchange Composite
Tape for the date on which such value is being determined, provided,
however, that if any such date is not a stock trading date, then
such price on the next trade date. In no event, however, shall the
price per share at which Stock may be purchased pursuant to any
Offering ever be less than the par value per share of Stock.

(c) MEDIUM AND TIME PAYMENT: Payment for Shares purchased by any
Participant pursuant to an Offering shall be effected from funds
accumulated through payroll deductions from the salary or wages paid
to the Participant by the Company, or as otherwise permitted by the
Committee, under rules of uniform application over the time period
specified in such Offering.

(d) TERM OF OFFERING: The term and Expiration Date of each Offering
shall be specified in such Offering, but in no event shall the
Expiration Date of any Offering be more than twenty-seven (27)
months after the Effective Date of such Offering.

(e) ACCRUAL LIMITATION: Notwithstanding any other provision of the Plan,
no Option shall be granted to any Employee which would permit such
Employee to purchase Stock pursuant to all unexpired offerings under
all existing employee stock purchase plans, as defined in Section
423 of the Code, accruing at a rate which exceeds at any time
twenty-five thousand dollars ($25,000) of the fair market value of
the Stock (determined at the time such Option is granted) during any
calendar year in which such Option is outstanding. For the purpose
of this subparagraph (e),

(i) an Option accrues when the Option (or any portion thereof) first
becomes exercisable during any calendar year;

(ii) an Option accrues at the rate provided in the applicable
Offering, but in no case may such rate for any employee exceed
twenty-five thousand dollars ($25,000) of the fair market value
of the Stock determined at the time the Option is granted for
any one calendar year;

(iii) an Option that has accrued under any one Offering may not be
carried over by a Participant to any other Offering; and

(iv) only rights to purchase Stock that have been granted under an
employee stock purchase plan which complies with Section 423 of
the Code shall be taken into account for purposes of this
subparagraph (e).

A-4
<PAGE>

(f) NONTRANSFERABILITY OF OPTIONS: An Option shall not be transferable
by the Employee to whom it has been granted otherwise than by will
or the laws of descent and distribution and shall be exercisable,
during his lifetime, only by him. However, in the discretion of the
Committee, the terms of any Offering may prohibit transfer under any
circumstances and provide for cancellation of the unexercised
portion of any Option upon the death of a Participant.

(g) REQUIREMENTS OF LAW: This Plan and the issuance of any Stock
hereunder is conditioned upon the approval of the stockholders of
Travelers. In the event the stockholders shall not approve the Plan
in accordance with the requirements of the Code, then all funds in
all Accounts established hereunder shall be returned to Participants
as soon as reasonably practicable.

The issuance of any Stock hereunder is further conditioned upon
registration of the Stock to be issued with the Commission. In no
event shall any Stock be issued hereunder prior to the declaration
of effectiveness of such registration statement by the Commission.

In no event shall the Company, any member of the Committee, the Vice
President or any Plan Agent be liable for any loss resulting from or
incurred in connection with or by reason of (i) any delay or failure
of the stockholders to approve the Plan, or (ii) any delay incurred
in connection with, or failure to secure, registration of the Stock
with the Commission.

(h) OTHER PROVISIONS: Each Offering shall contain such other provision
as the Vice President shall deem advisable, including restrictions
on resale of Stock purchased through an Offering, provided that no
such provisions may in anyway conflict, or be inconsistent, with the
terms of the Plan as amended from time to time.

ARTICLE VIII
WITHDRAWAL OF FUNDS

SECTION 8.1 The Committee shall maintain an Account for each of the
Participants.

SECTION 8.2

(a) A Participant may at any time prior to the Expiration Date for any
reason withdraw all cash amounts in his or her Account and thereby
cancel his or her Option and withdraw from participation in such
Offering. Partial withdrawals shall not be permitted. The Committee
may require withdrawal requests to be on forms supplied and to be
timely received by the Human Resources Department of Travelers or
any other specified recipient.

(b) A Participant may request once in each calendar year that Travelers
deliver a stock certificate representing all or any portion of the
Shares (in whole number of shares) held in his or her Account for at
least the Minimum Holding Period. A Participant shall not be
permitted to pledge, transfer or sell Shares held in his or her
Account until they are issued in certificate form after satisfaction
of the Minimum Holding Period. Withdrawals of Shares prior to the
end of the applicable Minimum Holding Period will be permitted only
for the purpose of (i) charitable contributions of such Shares, or
(ii) financial hardship, demonstrated to the reasonable satisfaction
of the Vice President and in accordance with the "Hardship"
definition herein.

(c) Subject to Section 8.2(b), a Participant will possess all the rights
and privileges of a stockholder of Travelers with respect to all of
the Shares held in his or her Account under

A-5
<PAGE>

the Plan, including the right to vote such Shares, and will receive
all distributions and stockholder communications with respect to
such Shares.

(d) Cash dividends will not be distributed to Participants directly, but
will be invested in shares of Common Stock at the full fair market
value on the date of such investment, and such shares will be held
in Accounts under the Plan.

ARTICLE IX
RECAPITALIZATION OR REORGANIZATION AND STOCK DIVIDENDS

SECTION 9.1 If Travelers shall be the surviving corporation in any merger,
consolidation, or reorganization, each outstanding Option shall pertain to and
apply to the securities to which a holder of a number of shares subject to the
Option would have been entitled. In the event of a dissolution or liquidation of
Travelers, or any merger, consolidation or reorganization in which Travelers is
not the surviving corporation, the Committee, at its election, may cause each
outstanding Option to terminate, provided, however, that each Optionee shall, in
such event, subject to such rules and limitations of uniform application as the
Committee may prescribe, be entitled to the rights of terminating Participants
provided in Sections 8.2(a) and (b).

SECTION 9.2 The aggregate number of Shares which may be purchased by the
exercise of outstanding Options and the Option price per share covered by each
such outstanding Option and the number of Shares held in a Participant's
Account, shall be proportionately adjusted for any increase or decrease in the
number of issued Shares resulting from a subdivision or consolidation of Shares
or other capital adjustment, or the payment of a stock dividend or other
increase or decrease in such Shares effected without the receipt of
consideration by Travelers.

SECTION 9.3 Except as provided in this Article, no Optionee shall have any
rights by reason of any subdivision or consolidation of shares of stock of any
class or the payment of any stock dividend of any other increase or decrease in
the number of shares of stock of any class or by reason of any dissolution,
liquidation, merger, or reorganization.

SECTION 9.4 The grant of an Option under the Plan shall not affect in
anyway the right or power of Travelers to make adjustments, reclassifications,
reorganizations, or changes of its capital or business structure, or to merge,
consolidate, dissolve, liquidate, sell, or transfer all or any part of its
business or assets.

ARTICLE X
RIGHTS AS A STOCKHOLDER

SECTION 10.1 No Optionee shall have any rights as a stockholder of
Travelers except in accordance with Section 8.2(b) and (c) hereof. No adjustment
shall be made for dividends (ordinary or extraordinary, whether in cash,
securities or other property) or distributions or other rights for which the
record date is prior to the date such Participant becomes a stockholder of
record. Stock certificates shall be held by Travelers or the Plan Agent and
issued only after satisfaction of the Minimum Holding Period and once a calendar
year, upon the request of a Participant, subject to delays beyond the reasonable
control of Travelers such as but not limited to completion of registration of
the Stock with the Commission or compliance with any Federal or State law, rule
or regulation.

A-6
<PAGE>

ARTICLE XI
NUMBER OF SHARES

SECTION 11.1 The aggregate number of shares that may be sold pursuant to
all Offerings under the Plan shall not exceed 750,000 Shares, as adjusted
pursuant to Article IX.

ARTICLE XII
AMENDMENT OF THE PLAN

SECTION 12.1 Each of the Board and the Vice President may suspend or
terminate the Plan, reconstitute the Plan in whole or in part, or amend or
revise the Plan in any respect whatsoever except that (i) no amendment shall
cause any Option to fail to qualify as an option under an "employee stock
purchase plan" as defined in Section 423 of the Code, (ii) without approval of
the stockholders, no amendment shall increase the number of shares which may be
sold under the Plan or make any change in the Employees or class of Employees
eligible to participate in the Plan, and (iii) without the approval of an
Optionee, no change shall be made in the terms of any outstanding Option adverse
to the interest of the Optionee.

ARTICLE XIII
APPLICATION OF FUNDS AND OBLIGATION TO EXERCISE OPTION

SECTION 13.1 Any proceeds received by Travelers from the sale of Stock
hereunder shall be used for general corporate purposes.

SECTION 13.2 The granting of an Option shall impose no obligation upon the
Optionee to exercise such Option.

ARTICLE XIV
EFFECTIVE DATE AND APPROVAL OF STOCKHOLDERS

SECTION 14.1 The Plan shall become effective on January 1, 1994, subject
however, to receipt of the approval of Travelers' stockholders on or before
October 26, 1994.

ARTICLE XV
MISCELLANEOUS

SECTION 15.1 Neither the Plan nor any document generated in connection
herewith shall be construed to give any employee the right to be retained in the
employ of the Company. The Company retains the unqualified right to terminate
the employment of any employee at any time.

A-7
<PAGE>
ANNEX B

THE TRAVELERS INC.
EXECUTIVE PERFORMANCE COMPENSATION PLAN
ARTICLE I
PURPOSE

SECTION 1.1 The purpose of The Travelers Inc. (the "Company") Executive
Performance Compensation Plan (the "Plan") is to establish certain performance
criteria for determining the maximum amount of any bonus that may be paid under
the Plan including that portion of the bonus paid in the form of restricted
stock under the Company's Capital Accumulation Plan, for those executive
officers who, on the last day of the Company's taxable year, consist of the
chief executive officer and the four other most highly compensated executive
officers of the Company or its subsidiaries named in the Summary Compensation
Table in the Company's proxy statement from time to time.

The Plan is intended to address certain limitations on the deductibility of
executive compensation under Section 162(m) of the Internal Revenue Code of
1986, as amended by the Omnibus Budget Reconciliation Act of 1993 (the "Revenue
Act"). The Revenue Act limits the deductibility of certain compensation in
excess of $1 million per year paid by a publicly traded corporation to Covered
Employees (as defined in such Act).

ARTICLE II
DEFINITIONS

SECTION 2.1 The following words and phrases shall have the meanings
indicated for the purpose of the Plan unless the context clearly indicates
otherwise:

(a) ADJUSTED NET INCOME shall mean the Net Income (i) reduced by the
aggregate amount of dividends on the Company's preferred stock, and
(ii) increased or reduced by the after-tax earnings impact of each of
the following items if they occur during a Bonus Year:

(i) realized investment gains and losses, including those resulting
from the sale of subsidiaries and affiliates, for the Bonus Year;

(ii) the cumulative effect to the beginning of the year of changes
in accounting principles for the Bonus Year required by the Financial
Accounting Standards Board, the Securities and Exchange Commission or
any other governing body that sets accounting standards as set forth in
the Consolidated Statement of Income or the Notes thereto as reported in
the Annual Report;

(iii) the cumulative effect to the beginning of the year of changes
in the tax law occurring during the Bonus Year as set forth in the
Consolidated Statement of Income or the Notes thereto as reported in the
Annual Report; and

(iv) extraordinary items, as defined under generally accepted
accounting principles, during the Bonus Year as set forth in the
Consolidated Statement of Income as reported in the Annual Report.
Extraordinary items would not include such items as catastrophic
insurance losses or restructuring charges.

(b) ANNUAL REPORT shall mean the Annual Report to Stockholders of the
Company containing the audited financial statements of the Company.

B-1
<PAGE>

(c) BOARD shall mean the Board of Directors of The Travelers Inc.
(d) BONUS POOL shall mean the total maximum amount available to be paid
as bonus compensation to all Covered Employees for each Bonus Year,
whether paid in cash or restricted stock under the CAP Plan. If,
however, the Segment Executive is a Covered Employee, the Bonus
Pool shall be the total amount available to all Covered Employees
other than the Segment Executive.
(e) BONUS YEAR shall mean the annual period corresponding to a calendar
year for which the calculation of a bonus award is to be made.
(f) CAP PLAN shall mean the Company's Capital Accumulation Plan, as the
same shall be in effect from time to time.
(g) CHIEF EXECUTIVE OFFICER shall mean the Chief Executive Officer of
the Company or the individual acting in such capacity.
(h) CODE shall mean the Internal Revenue Code of 1986, as amended.
(i) COMMITTEE shall mean the Nominations and Compensation Committee of
the Board, or any subcommittee thereof.
(j) COMMON EQUITY shall mean the common stockholders' equity appearing
on the Consolidated Statements of Changes in Stockholders' Equity
in the Company's Annual Report as of the beginning of the Bonus
Year.
(k) COMPANY shall mean The Travelers Inc. and its successors. Where the
context requires, the "Company" shall mean The Travelers Inc. and
its consolidated subsidiaries.
(l) COVERED EMPLOYEE shall mean the Chief Executive Officer of the
Company (or the individual acting in such capacity) and the four
other most highly compensated executive officers of the Company as
determined on the last day of the taxable year and in accordance
with Section 162(m) of the Code.
(m) DEFINED AFTER-TAX EARNINGS shall mean the aggregate of (i) the
consolidated after-tax net income of Smith Barney Shearson Holdings
Inc. and its subsidiaries and (ii) the after-tax net income of
those additional subsidiaries of the Company designated in the
employment agreement between SBS and Mr. Greenhill dated June 24,
1993, and all amendments thereto as filed with the Securities and
Exchange Commission as exhibits to the Company's Quarterly Report
on Form 10-Q for the quarter ended September 30, 1993 and to the
Company's Annual Report on Form 10-K for the year ended December
31, 1993, in each case as reflected on its audited financial
statements for such year, prepared in accordance with generally
accepted accounting principles consistently applied and certified
by independent public accountants.
(n) EXCHANGE ACT shall mean the Securities Exchange Act of 1934, as
amended.
(o) MD&A shall mean Management's Discussion and Analysis of Financial
Condition and Results of Operations as reported in the Company's
Annual Report.
(p) MEASUREMENT PERIOD shall mean any period other than the calendar
year determined by the Committee pursuant to Section 6.1.
(q) NET INCOME shall mean the consolidated net income of the Company
as disclosed in the Consolidated Statement of Income as reported
in the Company's Annual Report for the Bonus Year.
(r) OUTSIDE DIRECTOR shall mean a member of the Board who falls within
the definition of an "outside director" under Section 162(m) of
the Code and any regulations promulgated thereunder, including
any transition or interim rules for such definition.
(s) PERFORMANCE GOAL shall mean the financial measurements of
corporate performance that must be met in order for a Covered
Employee to receive a payment under this Plan.
(t) RETURN ON EQUITY shall mean the percentage equivalent to the
fraction resulting from dividing (i) Adjusted Net Income by
(ii) Common Equity.

B-2
<PAGE>

(u) SBS shall mean Smith Barney Shearson Inc.
(v) SEGMENT EXECUTIVE shall mean Mr. Robert F. Greenhill.

ARTICLE III
ADMINISTRATION OF THE PLAN

SECTION 3.1 The Plan shall be administered by the Committee. If, however,
the Committee shall fail to be composed solely of Outside Directors, then those
members of the Committee that are Outside Directors shall act as the Committee.

SECTION 3.2 The Plan shall be interpreted and construed in accordance with
Section 162(m) of the Code and the regulations issued thereunder. Any specific
action by the Committee that would be violative of Section 162(m) of the Code
and the regulations thereunder shall be void. Otherwise the Committee shall
have full and exclusive authority, power and discretion to construe and
interpret the Plan (subject to the advice of the Company's General
Counsel with respect to any question of law), and generally to determine
any and all questions arising under the Plan. The Committee shall have
the authority to reduce the bonus of any Covered Employee (other than
the Segment Executive) earned under this Plan even if the Performance
Goals applicable to maximum bonus awards to such Employee have been
met. The Committee shall not have any authority hereunder to increase
any bonus compensation calculated in accordance with this Plan.

SECTION 3.3 The Committee shall be responsible for certifying in writing to
the Company that the applicable Performance Goals have been met before any bonus
payments are made under this Plan. If permitted under Section 162(m) of the
Code, such certification may be based upon reasonably estimated financial
information available prior to the end of the Bonus Year.

ARTICLE IV
CALCULATION OF BONUS AMOUNTS FOR COVERED EMPLOYEES
(OTHER THAN THE SEGMENT EXECUTIVE)

SECTION 4.1 As soon as practicable following the certification described in
Section 3.3 above, and subject to the Committee's discretion to reduce bonuses
under Section 3.2, Covered Employees (other than the Segment Executive) shall be
entitled to receive for the Bonus Year a maximum bonus (whether paid in cash or
restricted stock under the CAP Plan) not exceeding the following percentages of
the Bonus Pool:

<TABLE>
<S> <C>
The Chief Executive Officer.............................................. 31%
Each other Covered Employee (other than the Segment Executive)........... 23%
</TABLE>

SECTION 4.2 The Bonus Pool for any Bonus Year shall be equal to a
percentage of the Adjusted Net Income for such Bonus Year. Adjusted Net Income
shall be calculated without giving effect to the

B-3
<PAGE>
payment of bonuses provided for under the Plan. The percentage shall be based
upon the Return on Equity, as follows:

IF THE RETURN ON EQUITY IS: THE MAXIMUM AMOUNT OF THE BONUS POOL SHALL BE:
- --------------------------------------- ------------------------------------------------------------------------
<S> <C>
less than 10% (A) = 0%
10% (B) = 1.4% of Adjusted Net Income
greater than 10% up to and including (C) = the amount determined under (B) PLUS 2.4% of the amount by which
12.5% Adjusted Net Income exceeds 10% of Common Equity
greater than 12.5% up to and including (D) = the amount determined under (C) PLUS 3.4% of the amount by which
15% Adjusted Net Income exceeds 12.5% of Common Equity
greater than 15% (E) = the amount determined under (D) PLUS 3.8% of the amount by which
Adjusted Net Income exceeds 15% of Common Equity
</TABLE>

In the event that any of the Covered Employees (other than the Segment
Executive) does not qualify as a Covered Employee for a particular Bonus Year,
the percentage share of the Bonus Pool otherwise allocable to such person shall
be allocated to the executive officer who replaces him or her as a Covered
Employee for such Bonus Year. In the event that an individual (other than the
Segment Executive) is added to the Covered Employees, the calculation of the
Bonus Pool will be made without taking such additional individual into account
and the Bonus Pool will then be increased by the dollar amount for any one of
the Covered Employees (other than the chief executive officer or the Segment
Executive) for such Bonus Year. Such increase will represent the maximum share
of the Bonus Pool allocated to such Covered Employee. In the event one of the
Covered Employees (other than the Segment Executive), or his or her
replacement, becomes the chief executive officer of the Company, such Covered
Employee shall be allocated the percentage share allocated to the chief
executive officer.

SECTION 4.3 Any portion (up to $3 million) of a share of the Bonus Pool
calculated for any Covered Employee (other than the Segment Executive) for
a particular Bonus Year may be awarded by the Committee to such Covered
Employee in a succeeding year to the extent not awarded for the Bonus Year;
provided that such award by the Committee will only be made to reward
extraordinary performance by any such Covered Employee.

ARTICLE V
CALCULATION OF BONUS AMOUNTS FOR THE SEGMENT EXECUTIVE

SECTION 5.1 If one of the Covered Employees is the Segment Executive, his
bonus in any Bonus Year shall be equal to a percentage of Defined After-Tax
Earnings, but only if Defined After-Tax Earnings are at least $100,000,000, as
follows:

DEFINED AFTER-TAX EARNINGS BONUS PERCENTAGE
- -------------------------------------------------------------------------- ---------------------
<S> <C>
up to $49,750,000......................................................... 0
$49,750,000 to $750,000,000............................................... 2.0%
$750,000,001 to $1 billion................................................ 1.5%
in excess of $1 billion................................................... 1.0%
</TABLE>

SECTION 5.2 If any of the entities whose after-tax net income is included
in "Defined After-Tax Earnings" should have a short fiscal year or if the
Segment Executive is employed by SBS for less than a full calendar year, the
Defined After-Tax Earnings on the financial statements for such short period
shall be annualized in order to apply the above calculations. The bonus paid
shall be pro rated by multiplying the number obtained on an annualized basis by
a fraction the numerator of which shall be
B-4

<PAGE>
the number of months in such short period and the denominator of which is 12.
Such bonus shall be paid notwithstanding that the Segment Executive may no
longer be a Covered Employee under the Code.

SECTION 5.3 No payments shall be made to the Segment Executive hereunder
until after certification by the Committee of achievement of the relevant
Performance Goals, in accordance with Section 3.3 hereof.

ARTICLE VI
CHANGE OF MEASUREMENT PERIOD

SECTION 6.1 If permitted by Section 162(m) of the Code, the Committee (as
constituted in Section 3.1 of the Plan) may establish a Measurement Period other
than the calendar year for determining the Bonus Pool if the Committee concludes
that all or a portion of the Bonus Pool for any Bonus Year should be paid to
Covered Employees (other than the Segment Executive) before the end of any
calendar year. Any such change will be made before the new Measurement Period
begins. In such event all relevant criteria will be based upon the books and
records of the Company for the Measurement Period in a manner consistent with
the terms of this Plan.

ARTICLE VII
STOCKHOLDER APPROVAL AND AMENDMENT

SECTION 7.1 This Plan shall become effective as of January 1, 1994,
subject, however, to the approval of the Company's stockholders at the 1994
Annual Meeting of the Stockholders of the Company.

SECTION 7.2 The Plan applicable to Covered Employees (other than the
Segment Executive) may be amended at any time by the Committee which shall act
in accordance with Section 3.1 of the Plan. In the event that subsequent
guidance under Section 162(m) is substantially different, with the effect
that the Plan fails to ensure the deductibility of the compensation payable
hereunder, the Committee shall retain the right to modify the Plan for Covered
Employees (other than the Segment Executive) to the extent necessary to
conform any provisions hereof to bring them into compliance, including but
not limited to deletion of any non-conforming provisions, or to discontinue
the Plan altogether. No amendment shall be made without approval of
the stockholders of the Company if such approval is required in order for the
Plan to continue to meet the requirements of Section 162(m) of the Code.

B-5

<PAGE>

THE TRAVELERS INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE TRAVELERS INC. FOR THE ANNUAL MEETING
APRIL 27, 1994

The undersigned hereby constitutes and appoints Sanford I. Weill, James
Dimon and Charles O. Prince, III, and each of them his or her true and lawful
agents and proxies with full power of substitution in each, to represent the
undersigned at the Annual Meeting of Stockholders of The Travelers Inc. to be
held at Carnegie Hall, 881 Seventh Avenue, New York, New York on Wednesday,
April 27, 1994 at 10:00 a.m. local time, and at any adjournments or
postponements thereof, on all matters properly coming before said Annual
Meeting, including but not limited to the matters set forth on the reverse side.

If shares of The Travelers Inc. Common Stock are issued to or held for the
account of the undersigned under employee plans and voting rights attach to such
shares (any of such plans, a "Voting Plan"), then the undersigned hereby directs
the respective fiduciary of each applicable Voting Plan to vote all shares of
The Travelers Inc. Common Stock in the undersigned's name and/or account under
such Plan in accordance with the instructions given herein, at the Annual
Meeting and at any adjournments or postponements thereof, on all matters
properly coming before the Annual Meeting, including but not limited to the
matters set forth on the reverse side.

YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES,
SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. YOUR PROXY CANNOT
BE VOTED UNLESS YOU SIGN, DATE AND RETURN THIS CARD.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS
1, 2, 3 AND 4 AND WILL BE VOTED IN THE DISCRETION OF THE PROXIES (OR, IN THE
CASE OF A VOTING PLAN, WILL BE VOTED IN THE DISCRETION OF THE PLAN TRUSTEE OR
ADMINISTRATOR) UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE ANNUAL
MEETING.

(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)

<PAGE>

[X] PLEASE MARK VOTES AS IN THIS EXAMPLE.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2, 3 AND 4.

1. Proposal to elect one class of directors (consisting of seven directors) to a
three-year term.

Nominees: Douglas D. Danforth, Robert F. Daniell, Leslie B. Disharoon, The
Honorable Gerald R. Ford, Robert I. Lipp, Andrall E. Pearson and
Linda J. Wachner:

FOR [ ] WITHHELD [ ]
[ ]
_______________________________________________________________________________
FOR, EXCEPT AUTHORITY TO VOTE WITHHELD FROM THE ABOVE NOMINEE(S)
(WRITE NAME(S) ON LINE)

2. Proposal to ratify the selection of KPMG Peat Marwick as the Company's
independent auditors for 1994.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

3. Proposal to approve and adopt The Travelers Inc. Employee Discount Stock
Purchase Plan including issuance of up to 750,000 shares of common stock of
the Company thereunder.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

4. Proposal to approve and adopt The Travelers Inc. Executive Performance
Compensation Plan.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW [ ] The signer(s) hereby
acknowledge(s) receipt of the
Notice of Annual Meeting of
Stockholders and accompanying
Proxy Statement.

The signer(s) hereby revoke(s)
all proxies heretofore given by
the signer(s) to vote at said
Annual Meeting and any
adjournments or postponements
thereof.

NOTE: PLEASE SIGN EXACTLY AS
NAME APPEARS HEREIN.
JOINT OWNERS SHOULD EACH
SIGN. WHEN SIGNING AS
ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR
GUARDIAN, PLEASE GIVE
FULL TITLE AS SUCH.

Signature: ________________________ Date ______

IF NO BOXES ARE MARKED, THIS PROXY WILL BE VOTED IN THE MANNER DESCRIBED ON THE
REVERSE SIDE.