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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
CITICORP
(Name of Registrant as Specified in Its Charter)
CITICORP
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per 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:
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(2) Aggregate number of securities to which transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:/1
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(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 registrations statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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- ---------------
/1 Set forth the amount on which the filing fee is calculated and state how it
was determined.
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CITICORP PROXY STATEMENT
NOTICE OF 1994
ANNUAL MEETING OF
STOCKHOLDERS &
PROXY STATEMENT
(PICTURE OF GLOBE)
SPACE IN OUR AUDITORIUM
IS LIMITED.
Registered stockholders may be
asked for identification.
If you are a beneficial owner
of Citicorp stock held by
a bank, broker, or investment
plan ("in street name"),
you will need proof of ownership
to be admitted to the meeting.
A recent brokerage statement or
a letter from the broker
or bank are examples of proof
of ownership. (LOGO)
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(LOGO)
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Citicorp JOHN S. REED
399 Park Avenue Chairman
New York, New York 10043
March 7, 1994
Dear Stockholder:
You are cordially invited to the Annual Meeting of Stockholders of Citicorp.
It will be held on Tuesday, April 19, 1994, at 9:00 A.M. (New York City time) in
the auditorium at Citicorp headquarters at 399 Park Avenue in New York City.
We urge you to attend, if at all possible. We in Citicorp's management consider
the Annual Meeting an excellent opportunity for us to discuss your corporation's
progress with you in person. If you cannot attend, please be sure to vote your
preferences on the enclosed proxy card and return it promptly.
Whether in person or by proxy, it is important that your shares be voted. The
participation of the owners of the business in its affairs is an essential
ingredient of Citicorp's vitality.
Sincerely,
/s/ John S. Reed
3
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(LOGO)
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
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Date: Tuesday, April 19, 1994
Time: 9:00 A.M. (New York City time)
Place: 399 Park Avenue
New York, New York 10043
(53rd Street and Park Avenue)
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At the Annual Meeting, the following proposals are on the agenda for action by
the stockholders:
- -TO ELECT SIXTEEN DIRECTORS TO HOLD OFFICE UNTIL THE 1995 ANNUAL MEETING AND
UNTIL THE ELECTION AND QUALIFICATION OF THEIR SUCCESSORS;
- -TO APPROVE AN AMENDED AND RESTATED STOCK PURCHASE PLAN;
- -TO APPROVE THE 1994 ANNUAL INCENTIVE PLAN;
- -TO RATIFY THE SELECTION OF KPMG PEAT MARWICK AS INDEPENDENT AUDITORS;
- -TO ACT UPON CERTAIN STOCKHOLDER PROPOSALS; AND
- -TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
It is important that your shares be voted. Please complete the proxy card and
return it promptly in the enclosed envelope. If you decide to attend the meeting
in person, you can withdraw your proxy and vote at that time. Voting is by
secret ballot. Stockholders of record at the close of business (5:00 P.M., New
York City time) on February 18, 1994 are entitled to one vote for each share
held. A list of these stockholders will be available for inspection for ten days
preceding the meeting at the office of the Assistant Secretary of Citicorp at
399 Park Avenue, New York, New York 10043, and will also be available for
inspection at the meeting itself.
By order of the Board of Directors,
/s/ Charles E. Long
Charles E. Long
Executive Vice President and Secretary
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PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Citicorp (the "Board"). These proxies will
be voted at the Annual Meeting of Stockholders of Citicorp on Tuesday, April 19,
1994. Stockholders of record at the close of business (5:00 P.M., New York City
time) on February 18, 1994 are entitled to one vote for each share held. On that
date there were 388,732,526 shares of Citicorp common stock outstanding and
eligible to vote. This Proxy Statement and Form of Proxy are first being sent to
stockholders on March 7, 1994.
I. ELECTION OF DIRECTORS
Sixteen nominees have been proposed by the Committee on Directors and
approved by the Board for election as directors of Citicorp. The affirmative
vote of a plurality of the votes cast at the Annual Meeting by stockholders
entitled to vote thereon is required for the election of each nominee as a
director of Citicorp.
The following information with respect to each nominee is set forth below:
name, age, the number of shares of Citicorp common stock beneficially owned by
the nominee as of January 31, 1994, the year in which the nominee became a
director of Citicorp, principal occupation, business experience, the standing
committees of the Board of which the nominee is a member, the names of other
companies of which the nominee is a director and certain other of the nominee's
activities.
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CHAIRMAN AND CHIEF EXECUTIVE OFFICER
- ------------------- PEPSICO, INC.
- Joined PepsiCo, Inc.--1967
(PHOTO) - President and Chief Operating Officer, Frito-Lay,
Inc.--1976
- Chairman of the Board and Chief Executive Officer,
- ------------------- Frito-Lay, Inc.--1978
D. WAYNE CALLOWAY
58 - Director of PepsiCo, Inc.--1983
3,315 shares
1988 - Executive Vice President and Chief Financial Officer,
PepsiCo, Inc.--1983
- President and Chief Operating Officer--1985
- Chairman and Chief Executive Officer--1986
- Committees: Audit and Subsidiaries and Capital
- Other Directorships: Citibank, Exxon Corporation and
General Electric Company
- Other Activities: The Business Council, The Business
Council of New York State, The Business Roundtable and
Grocery Manufacturers of America
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FORMER CHAIRMAN AND CHIEF EXECUTIVE OFFICER
- ------------------- EASTMAN KODAK COMPANY
- Joined Eastman Kodak Company--1950
(PHOTO) - Director--1974 to 1993
- President--1977
- ------------------- - Chairman and Chief Executive Officer--1983 to 1990
COLBY H. CHANDLER
68 - Committees: Directors, Subsidiaries and Capital and
17,315 shares Citibank Consulting
1984 - Other Directorships: Digital Equipment Corporation,
Ford Motor Company and J.C. Penney Company, Inc.
- Other Activities: The Business Council and The
Business-Higher Education Forum
VICE CHAIRMAN
- ------------------- CITICORP AND CITIBANK, N.A.
- Joined Citibank--1974
(PHOTO) - Group Executive, U.S. Card Products Group, Individual
Bank--1985
- Group Executive, Consumer Services Group
- ------------------- International, Individual Bank--1987 to 1990
PEI-YUAN CHIA
55 - Sector Executive, Global Consumer--1990
442,138 shares(1)
1993 - Senior Executive Vice President--1992
- Vice Chairman--1994
- Committees: Executive (ex-officio)
- Other Directorships: Citibank
(1) Includes 313,118 shares which Mr. Chia has the right
to acquire within 60 days pursuant to stock option
awards.
VICE CHAIRMAN
- ------------------- CITICORP AND CITIBANK, N.A.
- Joined Citibank--1961
(PHOTO) - Head, Investment Bank--1982
- Senior Corporate Officer for North America/Chief
Planning Officer--1985
- -------------------
PAUL J. COLLINS - Vice Chairman, Senior Corporate Officer for Europe and
57 the Middle East--1988
583,341 shares(2)
1985 - Vice Chairman, Finance and Administration--1991
- Committees: Executive (ex-officio) and Subsidiaries
and Capital (Chairman)
- Other Directorships: Citibank and Kimberly-Clark
Corporation
(2) Includes 406,387 shares which Mr. Collins has the
right to acquire within 60 days pursuant to stock option
awards.
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CHAIRMAN AND CHIEF EXECUTIVE OFFICER
- ------------------- CHEVRON CORPORATION
- Joined Chevron Corporation--1960
(PHOTO) - Assistant to the President--1969
- Vice President--1972
- ------------------- - President and Chief Executive Officer of Chevron, USA
KENNETH T. DERR Inc.--1979 to 1984
57
8,315 shares - Director, Chevron Corporation--1981
1987 - Vice Chairman--1985
- Chairman and Chief Executive Officer--1989
- Committees: Audit, Personnel and Citibank Consulting
- Other Directorships: Potlatch Corporation
- Other Activities: American Petroleum Institute
(Director), The Business Council, The Business
Roundtable, The California Business Roundtable and
President's Council on Sustainable Development
DIRECTOR AND SENIOR COUNSELOR
- ------------------- BECHTEL GROUP, INC.
- Chairman of the Board and Chief Executive Officer of
(PHOTO) the Standard Oil Company of California--1974 to 1981
- Joined Bechtel Group, Inc.--1981
- Committees: Audit, Directors, Executive, Personnel and
- ------------------- Subsidiaries and Capital
H.J. HAYNES
68 - Other Directorships: Citibank, The Boeing Company,
21,315 shares Fremont Group, Inc., Hewlett-Packard Company, PACCAR
1972(3) Inc and Saudi Arabian Oil Company
- Other Activities: The Business Council
(3) Mr. Haynes served as a director from 1972 until 1982
and was reelected in 1984.
CHAIRMAN
- ------------------- CITICORP AND CITIBANK, N.A.
- Joined Citibank--1965
(PHOTO) - Head, Individual Bank--1975 to 1985
- Vice Chairman--1982
- ------------------- - Chairman and Chief Executive Officer--1984
JOHN S. REED
55 - Committees: Directors (Chairman) and Executive
1,092,861 shares(4) (ex-officio)
1982
- Other Directorships: Citibank, Monsanto Company and
Philip Morris Companies Inc.
- Other Activities: The Business Council and The
Business Roundtable
(4) Includes 645,407 shares which Mr. Reed has the right
to acquire within 60 days pursuant to stock option
awards.
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VICE CHAIRMAN
- ------------------- CITICORP AND CITIBANK, N.A.
- Joined Citibank--1957
(PHOTO) - Senior Corporate Officer responsible for the
Caribbean, Central and South America and Sub-Sahara
Africa--1969
- ------------------- - Chairman, Citicorp and Citibank Restructuring
WILLIAM R. RHODES Committee--1984
58
353,538 shares(5) - Group Executive--1986
1991 - Senior Executive, International--1990
- Vice Chairman--1991
- Committees: Executive (ex-officio)
- Other Directorships: Citibank and Private Export
Funding Corporation (PEFCO)
- Other Activities: Council of the Americas, Council on
Foreign Relations, The Institute for International
Finance, New York Hospital and The Metropolitan Museum
of Art
(5) Includes 278,904 shares which Mr. Rhodes has the
right to acquire within 60 days pursuant to stock option
awards.
CO-CHAIR
- ------------------- THE ATLANTIC COUNCIL OF THE UNITED STATES
- U.S. Department of State: Ambassador to Finland--1977
to 1980; Counselor--1980 to 1981; Special Assistant to
(PHOTO) Secretary: Negotiations--1981 to 1982; Ambassador to
German Democratic Republic--1982 to 1985; Assistant
Secretary of State--1985 to 1989
- ------------------- - President, The Atlantic Council of the United
ROZANNE L. RIDGWAY States--1989
58
1,426 shares - Co-Chair--1993
1990
- Committees: Audit, Public Issues and Subsidiaries and
Capital
- Other Directorships: Citibank, Bell Atlantic
Corporation, The Boeing Company, Minnesota Mining and
Manufacturing Company, RJR Nabisco, Inc., Sara Lee
Corp. and Union Carbide Corporation
- Other Activities: The CNA Corporation (Trustee),
National Geographic Society (Trustee) and The New
Prospective Fund (Member, International Advisory
Board)
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VICE CHAIRMAN
- ------------------- CITICORP AND CITIBANK, N.A.
- Executive Director of the International Monetary
(PHOTO) Fund--1977 to 1981
- Member of the Board of Managing Directors of
Amsterdam-Rotterdam Bank--1981 to 1982
- ------------------- - Minister of Finance of the Kingdom of the
H. ONNO RUDING Netherlands--1982 to 1989
54
297,600 shares(6) - Chairman of the Netherlands Christian Federation of
1990 Employers--1990 to 1992
- Joined Citibank management--1992
- Vice Chairman--1992
- Committees: Executive (ex-officio) and Citibank
Consulting
- Other Directorships: Amsterdamsch Trustees Kantoor
B.V. (Supervisory Director), Pechiney Nederland, N.V.
(Supervisor Director) and Unilever N.V. and PLC
(Advisory Director)
(6) Includes 297,500 shares which Mr. Ruding has the
right to acquire within 60 days pursuant to stock option
awards.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
- ------------------- THE BOEING COMPANY
- Joined The Boeing Company--1958
(PHOTO) - Assistant Secretary of the U.S. Air Force--1973 to
1976
- Assistant Secretary of Defense--1976 to 1977
- -------------------
FRANK A. SHRONTZ - Rejoined The Boeing Company--1977
62
8,784 shares - President and Director--1985
1986
- Chief Executive Officer--1986
- Chairman--1988
- Committees: Directors, Executive, Personnel (Chairman)
and Public Issues
- Other Directorships: Citibank, Boise Cascade
Corporation and Minnesota Mining and Manufacturing
Company
- Other Activities: The Business Council and The
Business Roundtable
VICE CHAIRMAN, BRAZILIAN INSTITUTE OF ECONOMICS
- ------------------- THE GETULIO VARGAS FOUNDATION
- Director, Post Graduate School of Economics,
(PHOTO) The Getulio Vargas Foundation--1965 to 1974
- President, Fundacao Movimento Brasileiro de
Alfabetizacao--1970 to 1974
- ------------------- - Finance Minister of Brazil--1974 to 1978
MARIO H. SIMONSEN
59 - Minister of Planning of Brazil--1979
13,065 shares
1979 - Vice Chairman, Brazilian Institute of Economics--1979
- Committees: Audit, Subsidiaries and Capital and
Citibank Consulting
- Other Directorships: Institute for International
Economics
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FORMER CHAIRMAN AND CHIEF EXECUTIVE OFFICER
- ------------------- GENERAL MOTORS CORPORATION
- Joined General Motors Corporation--1949
(PHOTO) - Director--1974 to 1993
- Chairman and Chief Executive Officer--1981 to 1990
- ------------------- - Committees: Audit, Executive, Public Issues and
ROGER B. SMITH Citibank Consulting
68
2,315 shares(7) - Other Directorships: International Paper Company,
1987 Johnson & Johnson and PepsiCo, Inc.
- Other Activities: The Business Council
(7) Mr. Smith also owns 34,000 depositary shares
representing shares of Citicorp's Conversion Preferred
Stock, Series 15, representing less than 1% of the
outstanding securities of such series.
SENIOR EXECUTIVE VICE PRESIDENT
- ------------------- CITICORP AND CITIBANK, N.A.
- Vice President, Finance, Hyatt Corporation--1981
(PHOTO) - Vice President and Controller, Chrysler
Corporation--1981 to 1989
- Executive Vice President and Chief Financial Officer,
- ------------------- Honeywell Inc.--1989 to 1993
CHRISTOPHER J. STEFFEN
52 - Senior Vice President and Chief Financial Officer,
170,000 shares(8) Eastman Kodak Company--1993
1993
- Joined Citibank--1993
- Senior Executive Vice President--1993
- Other Directorships: Citibank
(8) Includes 150,000 shares which Mr. Steffen has the
right to acquire within 60 days pursuant to stock option
awards.
PRESIDENT
- ------------------- THE FORD FOUNDATION
- President, Bedford-Stuyvesant Restoration
(PHOTO) Corporation--1967 to 1977
- Private practice of law--1978 to 1979
- President, The Ford Foundation--1979
- -------------------
FRANKLIN A. THOMAS - Committees: Executive, Personnel, Public Issues
59 (Chairman) and Subsidiaries and Capital
12,941 shares
1970 - Other Directorships: Citibank, Aluminum Company of
America, American Telephone & Telegraph Company, CBS
Inc. and Cummins Engine Company, Inc.
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CHAIRMAN AND CHIEF EXECUTIVE OFFICER
- ------------------- E.I. DU PONT DE NEMOURS & COMPANY
- Joined E.I. du Pont de Nemours & Company--1957
(PHOTO) - Executive Vice President and Director--1983
- Vice Chairman--1985
- ------------------- - President and Chief Operating Officer--1987
EDGAR S. WOOLARD, JR.
59 - Chairman and Chief Executive Officer--1989
23,115 shares
1987 - Committees: Personnel, Subsidiaries and Capital and
Citibank Consulting
- Other Directorships: International Business Machines
Corporation and The Seagram Company Ltd.
- Other Activities: The Business Council and The
Business Roundtable
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SHARE OWNERSHIP OF MANAGEMENT
Shares owned by Messrs. Chia, Collins, Reed, Rhodes, Ruding and Steffen,
including those acquired through the staff compensation plans of Citicorp and
Citibank, are described separately in this Proxy Statement.
As of January 31, 1994, the current directors and executive officers of
Citicorp as a group beneficially owned approximately 7,778,528 shares of
Citicorp common stock, representing approximately 1.98% of Citicorp's
outstanding shares. In addition to the nominees for election as directors at the
Annual Meeting, the current directors include Lawrence E. Fouraker and Donald V.
Seibert, who are retiring. As of January 31, 1994, Dr. Fouraker owned 15,115
shares of Citicorp common stock and Mr. Seibert owned 2,315 shares. No single
executive officer or director beneficially owns more than 0.28% of Citicorp's
outstanding stock, and all directors as a group beneficially own less than 0.79%
of Citicorp's outstanding stock.
- --------------------------------------------------------------------------------
CERTAIN OTHER SHARE OWNERS
FMR Corp. ("FMR"), 82 Devonshire Street, Boston, Massachusetts 02109, is
the only person known by Citicorp to own beneficially more than 5% of any class
of Citicorp's voting securities. FMR's Schedule 13G under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), dated February 11, 1994,
as filed with the Securities and Exchange Commission (the "SEC"), indicates
that, as of December 31, 1993, FMR beneficially owned 32,302,178 shares of
Citicorp common stock, representing approximately 8.11% of Citicorp's
outstanding common stock, of which 28,734,623 shares, representing approximately
7.22% of Citicorp's outstanding common stock, were beneficially owned by FMR's
wholly-owned subsidiary, Fidelity Management & Research Company. FMR held sole
dispositive power with respect to all of such shares, sole voting power with
respect to 2,609,027 of such shares, and no voting power with respect to the
balance of such shares. The number of shares beneficially owned by FMR at
December 31, 1993 included shares of common stock resulting from the assumed
conversion of shares of convertible preferred stock of Citicorp owned by FMR.
In February 1991, His Royal Highness Prince Alwaleed Bin Talal Bin
Abdulaziz Al Saud, P.O. Box 8653, Riyadh, 11492, Saudi Arabia, purchased 5,900
shares of Citicorp's non-voting Convertible Preferred Stock, Series 12, which
are convertible into 36,875,000 shares of Citicorp
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common stock. Prince Alwaleed had previously acquired beneficial ownership of
16,610,550 shares of Citicorp common stock. Prince Alwaleed's Schedule 13D under
the Exchange Act as filed with the SEC, as amended through June 18, 1993,
indicates that in April and June 1993, Prince Alwaleed sold an aggregate of
12,371,401 shares of Citicorp common stock, reducing his holdings to 4,239,149
shares. Those shares of common stock, together with the shares that could be
acquired upon conversion of the Convertible Preferred Stock owned by Prince
Alwaleed, would represent approximately 9.68% of Citicorp's common stock
outstanding if conversion had occurred as of January 31, 1994.
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BOARD MEETINGS
There were 11 meetings of the Board during 1993. All directors attended 75%
or more of the total Board and committee meetings held.
- --------------------------------------------------------------------------------
SIZE OF THE BOARD
In February 1994, the Board fixed the number of directors at sixteen.
Directors standing for election will hold office until the next annual meeting
and until the election and qualification of their successors. If any nominee is
unable to serve out his or her term, the Committee on Directors may recommend a
successor to fill the unexpired portion, subject to subsequent appointment by
the Board.
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BOARD COMMITTEES
Audit Committee. The Audit Committee supervises independent audits of
Citicorp and oversees the establishment of appropriate accounting policies for
Citicorp and Citibank. Members are Mr. Seibert, Chairman; Mr. Calloway, Mr.
Derr, Mr. Haynes, Ambassador Ridgway, Dr. Simonsen and Mr. Smith. The Audit
Committee met eight times during 1993.
The Audit Committee's principal functions include reviews of the audit
plans, scope of examination and audit findings of both the independent auditors
and the corporation's internal corporate audit group; significant legal matters;
credit portfolios; internal control; and the adequacy of corporate insurance
coverage. Also, this committee monitors the conduct of Citicorp's subsidiaries
and affiliates in providing fiduciary and investment services, receives periodic
reports from the senior management of such entities and reports to the Citicorp
Board. Further, it is the responsibility of this committee to recommend to the
Board the annual appointment of the outside auditors, to review the findings of
internal and independent auditors, financial controllers and external regulatory
agencies and to oversee the accounting policies used in preparing the financial
statements of Citicorp and Citibank.
Committee on Directors. The Committee on Directors recommends qualified
candidates for membership on the Boards of Directors of Citicorp and Citibank.
Members are Mr. Reed, Chairman; Mr. Chandler, Dr. Fouraker, Mr. Haynes and Mr.
Shrontz. The Committee on Directors met twice during 1993.
The Committee on Directors actively solicits recommendations for
prospective directors from their current members and stockholders and,
consistent with the needs of the corporation and representation of the various
services and customers, recommends the approval of a candidate. The nominees are
then presented to the Board, which proposes the slate of directors
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to be submitted to the stockholders at the Annual Meeting. In addition, the
committee is charged with keeping current and recommending changes in directors'
compensation.
Personnel Committee. The Personnel Committee oversees employee policies
and programs of Citicorp and Citibank. Members are Mr. Shrontz, Chairman; Mr.
Derr, Mr. Haynes, Mr. Seibert, Mr. Thomas and Mr. Woolard. The Personnel
Committee met seven times during 1993.
The Personnel Committee reviews and approves compensation policy and other
personnel-related programs to maintain an environment at Citicorp and Citibank
that attracts and retains people of high capability, commitment and integrity.
In addition, the committee oversees succession planning.
Other Committees. In addition to the committees described above, the Board
also has a Committee on Subsidiaries and Capital, an Executive Committee, a
Public Issues Committee and a Consulting Committee to the Citibank Board of
Directors. Their functions and members are described in Citicorp's 1993 Annual
Report.
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BOARD COMPENSATION
Directors of Citicorp who are not officers of Citicorp or Citibank received
an annual retainer of $40,000 for their services in 1993. In addition, outside
directors received a fee of $950 for each Board, committee or other meeting
attended. Those directors who reside abroad received an additional $3,500 for
each Board meeting attended. In lieu of the committee meeting fees, the Chairmen
of the Audit Committee and the Personnel Committee each received a stipend of
$20,000, the Chairman of the Public Issues Committee received a stipend of
$10,000 and from April through December 1993, the Chairman of the Capital
Subcommittee of the Committee on Subsidiaries and Capital received a stipend of
$15,000.
Outside directors of Citicorp who served on the Citibank Board of Directors
received an annual retainer of $10,000 for those services in 1993. Directors who
did not serve on the Citibank Board of Directors served on the Consulting
Committee to the Citibank Board of Directors, and outside directors received an
annual retainer of $10,000 for those services in 1993. In addition, each outside
director and each outside member of the Consulting Committee also received a fee
of $950 for each meeting of the Citibank Board of Directors attended, and each
outside member of the Audit Committee of the Citibank Board of Directors
received a fee of $950 for each meeting of that committee attended. Those
directors who are officers of Citicorp or Citibank received no additional
compensation for their services on the Board or the Citibank Board of Directors
or any committee thereof.
Under Citicorp's Directors' Deferred Compensation Plan, outside directors
may elect to defer all or part of their retainers and/or fees. Amounts deferred
are credited to investment accounts whose returns correspond to the funds
established under the Citibank Savings Incentive Plan (the "Savings Incentive
Plan"), a plan available to all regular United States employees of Citibank and
certain affiliates (including directors who are also employees). The amounts
credited are expressed in units in those investment accounts, which have the
same value as the corresponding units in a fund under the Savings Incentive Plan
on the date of such crediting and thereafter will have the value set on the
immediately preceding valuation date for the corresponding fund. Payments of
deferred compensation credited to the investment account mirroring Fund B
established under the Savings Incentive Plan will be in shares of
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Citicorp common stock. Payments of deferred compensation credited to investment
accounts which mirror funds other than Fund B will be in cash.
In November 1993, each director of Citicorp who was not an officer of
Citicorp or Citibank received a one-time grant of deferred compensation
equivalent in value to 1,000 shares of Citicorp common stock (which had a market
value of $36.75 per share on the grant date). The amount of this award and a
portion of each outside director's annual retainer were required to be invested
in the Directors' Deferred Compensation Plan in the account mirroring Fund B
established under the Savings Incentive Plan.
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EXECUTIVE OFFICERS
The following information with respect to each executive officer of
Citicorp who is not a nominee for election as a director is set forth below:
name, age and the position held with Citicorp and the date from which such
position has been continuously held.
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NAME AGE POSITION AND OFFICE HELD AND DATE FROM WHICH HELD
- ----------------------------- --- ---------------------------------------------------------
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Shaukat Aziz................. 45 Executive Vice President, Asia/Pacific Corporate--1993
James L. Bailey.............. 48 Executive Vice President, North America Consumer--1992
Ernst W. Brutsche............ 56 Executive Vice President, European Corporate--1992
Colin Crook.................. 51 Senior Technology Officer--1990
Arthur M. de Graffenried, 45 Chairman, Restructuring Committee, Cross-Border--1992
III........................
David E. Gibson.............. 54 Executive Vice President, Central and Eastern
Europe/Middle East/Africa Corporate--1993
Dennis O. Green.............. 53 Chief Auditor--1990
Guenther E. Greiner.......... 55 Executive Vice President, World Corporation Group--1992
Thomas E. Jones.............. 55 Executive Vice President and a Principal Financial
Officer--1990
Charles E. Long.............. 54 Executive Vice President--1982; Secretary--1987
Alan S. MacDonald............ 51 Executive Vice President, North America Corporate--1992
Dionisio R. Martin........... 50 Executive Vice President, Latin America Corporate--1993
Robert H. Martinsen.......... 59 Chairman, Credit Policy Committee--1990
Robert A. McCormack.......... 50 Executive Vice President, Real Estate--1992
Victor J. Menezes............ 44 Executive Vice President, European Consumer--1992
Lawrence R. Phillips......... 54 Senior Human Resources Officer--1993
John J. Roche................ 58 Executive Vice President, Legal Affairs--1989
Hubertus M. Rukavina......... 44 Executive Vice President, Private Bank--1993
Gurvirendra Talwar........... 45 Executive Vice President, Asia/Pacific Consumer--1992
Alan J. Weber................ 45 Executive Vice President, Financial Institutions and
Transaction Services--1992
Masamoto Yashiro............. 65 Executive Vice President, Japan Corporate/Consumer--1992
Ronald X. Zettel............. 59 Executive Vice President, Latin America Consumer--1992
</TABLE>
The group of all executive officers consists of 28 individuals, including
Messrs. Reed, Chia, Collins, Rhodes, Ruding and Steffen (who are all directors
of Citicorp) and the 22 officers named above. Officers serve at the pleasure of
the Board.
Each executive officer who is not a director of Citicorp has been employed
in such position or in other executive or management positions with Citicorp and
Citibank for more than the last five years, except for Mr. Brutsche, who
rejoined Citicorp in 1989 and, prior to that time, had been a director and chief
executive of the investment banking sector at Midland Bank in London; Mr. Crook,
who joined Citicorp in 1990 and, prior to that time, had been Senior Vice
15
<PAGE> 15
President of Data General Corporation; Mr. Green, who joined Citicorp in 1990
and, prior to that time, had been General Auditor of Ford Motor Company; and Mr.
Phillips, who joined Citicorp in 1993 and, prior to that time, had been director
of human resources for the GE Aerospace division of General Electric Company.
Mr. Ruding has entered into an agreement which provides for his employment
as Vice Chairman of Citicorp and Citibank through March 1, 1997. If Mr. Ruding's
employment is terminated other than for cause or he resigns for good reason, he
will receive payments consisting of his salary for the remainder of the
agreement's term, a pro rata bonus, if authorized by the Personnel Committee,
and any deferred bonus awards.
- --------------------------------------------------------------------------------
DIRECTOR AND OFFICER TRANSACTIONS
Certain transactions involving loans, deposits and sales of commercial
paper, certificates of deposit and other money market instruments and certain
other banking transactions occurred during 1993 between Citicorp and Citibank on
the one hand and certain directors or executive officers of Citicorp and
Citibank, members of their immediate families or associates of the directors,
the executive officers or their family members on the other. All such
transactions were made in the ordinary course of business on substantially the
same terms, including interest rates and collateral, that prevailed at the time
for comparable transactions with other persons and did not involve more than the
normal risk of collectibility or present other unfavorable features.
In November 1993, Mr. Collins purchased a house in London from Citibank for
L1,950,000. As required by Citibank procedures for purchases of bank-owned
property by international staff employees, which were followed in this
transaction, the purchase price was set at the average of the highest two of
three valuations received from independent property valuation firms of
recognized standing. The sale of the property was approved by the Board on
November 16, 1993.
- --------------------------------------------------------------------------------
COMPENSATION
The tables on pages 18 through 20 set forth a profile of Citicorp's
executive compensation and show, among other things, salaries and bonuses paid
during the last three years, options granted with respect to 1993 and aggregate
option exercises in 1993 for the Chairman and each of the five other most highly
compensated executive officers (the "Named Executives"). These tables are
specified by current SEC requirements. There is also included a table,
Management Compensation Profile for 1993, on page 17, which is consistent with
the other tables. It has been previously used by Citicorp and is provided to
insure continuity.
16
<PAGE> 16
MANAGEMENT COMPENSATION PROFILE FOR 1993
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
CITICORP
STOCK RESTRICTED STOCK GRANTED SINCE
BENEFICIALLY SALARY AND RESTRICTED PROGRAM INCEPTION (1986)
OWNED AS OF SAVINGS ANNUAL STOCK STOCK -------------------------------
JANUARY 31, NAME AND INCENTIVE PLAN INCENTIVE SHARES OPTIONS 1993
1994(1) POSITION BENEFITS(2) AWARDS(3) GRANTED(4) GRANTED(5) SHARES VALUE(6) DIVIDENDS
- ---------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C> <C> <C> <C>
447,454 J.S. Reed, $ 1,219,000 $3,000,000 50,000 450,000 235,000 $10,281,250 -0-
Chairman
129,020 P.Y. Chia, 795,000 612,500 -0- 250,000 99,700 4,361,875 -0-
Vice Chairman
176,954 P.J. Collins, 795,000 437,500 -0- 300,000 107,700 4,711,875 -0-
Vice Chairman
74,634 W.R. Rhodes, 742,000 875,000 -0- 270,000 55,700 2,436,875 -0-
Vice Chairman
100 H.O. Ruding, 787,500 612,500 -0- 250,000 -0- -0- -0-
Vice Chairman
20,000 C.J. Steffen, 437,500 875,000 20,000 325,000 20,000 875,000 -0-
Senior Executive
Vice President
- ---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------
STOCK OPTIONS
SINCE 1984
-------------------------------
NAME AND OPTIONS AVG. GRANT
POSITION GRANTED(7) PRICE
- ------------------------------------------------------------------
<S> <C> <C>
J.S. Reed, 1,406,407 $26.19
Chairman
P.Y. Chia, 460,618 30.04
Vice Chairman
P.J. Collins, 813,027 26.19
Vice Chairman
W.R. Rhodes, 624,932 26.25
Vice Chairman
H.O. Ruding, 445,000 28.86
Vice Chairman
C.J. Steffen, 325,000 33.60
Senior Executive
Vice President
- ------------------------------------------------------------------
</TABLE>
(1) Does not include shares which individuals have the right to acquire pursuant
to stock option awards.
(2) Total 1993 compensation includes salary and cash compensation earned in
accordance with the Savings Incentive Plan, a portion of which is deferred
and the balance of which is paid in cash. Amounts shown do not include
amounts expended by Citicorp pursuant to plans (including group life, health
and international service) that do not discriminate in scope, terms or
operation in favor of executive officers or directors of Citicorp and that
are generally available to all salaried employees. Amounts shown also do not
include amounts expended by Citicorp which may have a value as a personal
benefit to the named individual. The value of such benefits, however, did
not exceed the lesser of $50,000 or 10% of the total annual salary and bonus
reported for any individual named.
(3) Cash incentive awards were distributed in January 1994 based on 1993
performance.
(4) Grants of restricted stock are for shares of Citicorp common stock which are
restricted as to transfer and/or vesting for a period determined by the
Personnel Committee of the Board at the time of grant. The 50,000 shares
granted to Mr. Reed in January 1994 will vest in January 1999. The 20,000
shares granted to Mr. Steffen in June 1993 will vest with respect to 25% of
such shares on each of the first, second, third and fourth anniversary of
the grant date.
(5) Options to purchase Citicorp stock for 1993 were granted to each of the
Named Executives under two programs. Options granted in July 1993 (150,000
to each of the Named Executives) have an exercise price of $31.75 per share,
a term of five years and vest with respect to 50% of such options when
Citicorp's common stock price has reached $50 per share, an additional 25%
when Citicorp's common stock price has reached $55 per share and the
remaining 25% when Citicorp's common stock price has reached $60 per share,
provided in each case that the stock price remains at or above the specified
level for at least 20 trading days in a period of 30 consecutive trading
days. Options granted in January 1994 have an exercise price of $40.75 per
share, a term of 10 years and vest with respect to 50% of such options on
the first anniversary of the grant date and the balance on the second
anniversary of the grant date. Options covering 75,000 shares granted to Mr.
Steffen in June 1993 have an exercise price of $27.75 per share, a term of
ten years and vest with respect to 50% of such options on the first
anniversary of the grant date and the balance on the second anniversary of
the grant date.
(6) Total shares of restricted stock granted multiplied by the closing price on
the New York Stock Exchange composite tape on January 31, 1994 ($43.75).
(7) Options are to purchase shares of Citicorp common stock.
17
<PAGE> 17
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG-TERM COMPENSATION
---------------------------------------- AWARDS
OTHER --------------------------
ANNUAL RESTRICTED SHARES ALL OTHER
NAME AND COMPENSA- STOCK UNDERLYING COMPENSA-
PRINCIPAL POSITION YEAR SALARY BONUS TION(1) AWARDS(2) OPTIONS(3) TION(4)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
J.S. Reed, 1993 $1,150,000 $3,000,000 -0- $2,062,500 450,000 $69,000
Chairman (Chief 1992 1,150,000 1,035,000 -0- -0- 250,000 69,000
Executive Officer) 1991 1,150,000 -0- -0- -0- 300,000 69,000
P.Y. Chia, 1993 750,000 612,500 -0- -0- 250,000 45,000
Vice Chairman 1992 675,000 -0- -0- -0- 95,000 40,500
1991 471,667 200,000 -0- 725,000 -0- 28,300
P.J. Collins, 1993 750,000 437,500 -0- -0- 300,000 45,000
Vice Chairman 1992 750,000 225,000 -0- -0- 135,000 45,000
1991 650,000 -0- -0- -0- 175,000 39,000
W.R. Rhodes, 1993 700,000 875,000 -0- -0- 270,000 42,000
Vice Chairman 1992 633,333 810,000 -0- -0- 75,000 38,000
1991 423,333 -0- -0- -0- 175,000 25,400
H.O. Ruding, 1993 750,000 612,500 -0- -0- 250,000 37,500
Vice Chairman 1992(5) 646,750(6) 225,000 $1,000,000(7) -0- 195,000 -0-
C.J. Steffen, 1993(8) 437,500 875,000 -0- 552,500 325,000 -0-
Senior Executive Vice
President
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Amounts shown do not include amounts expended by Citicorp pursuant to plans
(including group life, health and international service) that do not
discriminate in scope, terms or operation in favor of executive officers or
directors of Citicorp and that are generally available to all salaried
employees. Amounts shown also do not include amounts expended by Citicorp
which may have a value as a personal benefit to the named individual. The
value of such benefits did not exceed the lesser of either $50,000 or 10%
of the total annual salary and bonus reported for any individual named.
(2) The value for each restricted stock grant reflected in this column is
determined by multiplying the total shares awarded by the closing price on
the New York Stock Exchange composite tape on the grant date. The number of
shares and value of aggregate restricted stock holdings of each of the
Named Executives on December 31, 1993 were 160,000 and $5,900,000 (Mr.
Reed), 68,000 and $2,507,500 (Mr. Chia), 100,000 and $3,687,500 (Mr.
Collins), 49,000 and $1,806,875 (Mr. Rhodes) and 20,000 and $737,500 (Mr.
Steffen). For purposes of the year-end calculation, the value of the
restricted stock is determined by multiplying the total shares awarded by
the closing price on the New York Stock Exchange composite tape on December
31, 1993 ($36.875). Mr. Chia received an award of 50,000 shares of
restricted stock in 1991, and Mr. Steffen received an award of 20,000
shares of restricted stock in 1993 at the commencement of his employment by
Citicorp. In each case, 25% of the shares granted will vest on each of the
first, second, third and fourth anniversary of the grant date. In January
1994, Mr. Reed received an award of 50,000 shares of restricted stock based
on 1993 performance and as a long-term incentive; such shares will vest on
the fifth anniversary of the grant date. To the extent dividends are
declared on Citicorp's common stock, dividends will be paid on these
restricted stock holdings.
(3) Mr. Steffen received a grant of options covering 75,000 shares in June 1993
at the commencement of his employment by Citicorp. Each of the Named
Executives received a grant of options covering 150,000 shares in July
1993. The remaining options for 1993 were granted to the Named Executives
in January 1994. Options for each of 1992 and 1991 were granted in the
following year, except that Mr. Ruding received a grant of options covering
100,000 shares in March 1992 in connection with his employment agreement
with Citicorp.
(4) Cash compensation earned in accordance with the Savings Incentive Plan.
Amounts in excess of contribution limits established by the Internal
Revenue Code are paid in cash to the Named Executive.
(5) Mr. Ruding's employment as an officer of Citicorp commenced in March 1992.
(6) Salary shown for Mr. Ruding includes $21,750 earned as a director of
Citicorp prior to March 1, 1992.
(7) The amount shown is a one-time payment for housing pursuant to Mr. Ruding's
employment agreement with Citicorp.
(8) Mr. Steffen's employment as an officer of Citicorp commenced in June 1993.
18
<PAGE> 18
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
- --------------------------------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE VALUE
AT
ASSUMED ANNUAL RATES OF
STOCK APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM(1)
- --------------------------------------------------------------------------------------------------------------------------
PERCENT
NUMBER OF OF TOTAL
SHARES OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES IN PRICE
NAME GRANTED(2) FISCAL YEAR (PER SHARE) EXPIRATION DATE 5% 10%
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
J.S. Reed 150,000 1.00% $31.75 July 20, 1998 -0- $ 1,453,753
300,000 2.00 40.75 January 18, 2004 $ 7,688,303 19,482,983
P.Y. Chia 150,000 1.00 31.75 July 20, 1998 -0- 1,453,753
100,000 0.67 40.75 January 18, 2004 2,562,768 6,494,328
P.J. Collins 150,000 1.00 31.75 July 20, 1998 -0- 1,453,753
150,000 1.00 40.75 January 18, 2004 3,844,151 9,741,491
W.R. Rhodes 150,000 1.00 31.75 July 20, 1998 -0- 1,453,753
120,000 0.80 40.75 January 18, 2004 3,075,321 7,793,193
H.O. Ruding 150,000 1.00 31.75 July 20, 1998 -0- 1,453,753
100,000 0.67 40.75 January 18, 2004 2,562,768 6,494,328
C.J. Steffen 75,000 0.50 27.75 June 15, 2003 1,308,898 3,316,888
150,000 1.00 31.75 July 20, 1998 -0- 1,453,753
100,000 0.67 40.75 January 18, 2004 2,562,768 6,494,328
All Stockholders(3) N/A N/A N/A N/A 8,962,972,685 22,713,133,356
</TABLE>
- --------------------------------------------------------------------------------
(1) Amounts for the Named Executives shown in these columns have been derived by
multiplying the exercise price by the annual appreciation rate shown
(compounded for the term of the options), multiplying the result by the
number of shares covered by the options, and subtracting the aggregate
exercise price of the options. No values are shown under the 5% heading for
the options expiring in July 1998 because such options would not become
exercisable before their expiration date at that level of stock price
appreciation. The terms of such options are described below. The dollar
amounts set forth under this heading are the result of calculations at the
5% and 10% rates set by the SEC and therefore are not intended to forecast
possible future appreciation, if any, of the stock price of Citicorp.
(2) Options granted to the Named Executives in January 1994 (based on individual
and corporate performance during 1993) and options granted to Mr. Steffen in
June 1993 have a term of ten years and vest on the first anniversary of the
date of grant to the extent of 50% of such options and on the second
anniversary of the grant date to the extent of the balance. Options granted
to the Named Executives in July 1993 have a term of five years and vest to
the extent of 50% of such options when Citicorp's stock price reaches $50
per share, an additional 25% when Citicorp's stock price reaches $55 per
share and the remaining 25% when Citicorp's stock price reaches $60 per
share, provided in each case that the stock price remains at or above the
specified level for at least 20 trading days in a period of 30 consecutive
trading days. Options granted in January 1993 based on corporate and
individual performance in 1992 are not reflected in this table; those option
grants were described in Citicorp's 1993 Proxy Statement.
(3) The potential realizable gain to all stockholders (based on 386,490,167
shares outstanding at December 31, 1993, with a market price per share of
$36.875) at 5% and 10% assumed annual rates over a term of ten years,
commencing on January 1, 1994, is provided as a comparison to the potential
gain realizable by the Named Executives at the same assumed annual rates of
stock appreciation.
19
<PAGE> 19
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUE
- -----------------------------------------------------------------------------------------------------------------------
NUMBER OF SHARES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT
SHARES AT FISCAL YEAR-END FISCAL YEAR-END(4)
ACQUIRED ON VALUE --------------------------------------------------------------------
NAME EXERCISE(1) REALIZED(2) EXERCISABLE UNEXERCISABLE(3) EXERCISABLE UNEXERCISABLE
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
J.S. Reed 36,000 $177,750 406,407 1,000,000 $ 4,918,820 $ 10,775,000
P.Y. Chia 8,000 69,000 115,618 345,000 1,447,204 1,991,875
P.J. Collins 20,000 103,750 203,027 610,000 2,620,620 6,466,250
W.R. Rhodes 10,000 53,125 104,932 520,000 1,300,945 5,693,750
H.O. Ruding -0- -0- 50,000 395,000 981,250 2,973,125
C.J. Steffen -0- -0- -0- 325,000 -0- 1,453,125
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes all exercises during calendar 1993.
(2) The value realized equals the market value of the common stock acquired at
exercise minus the exercise price.
(3) Includes options granted in June and July 1993 and options granted in
January 1994 based on individual and corporate performance during 1993.
(4) Options were granted in tandem prior to 1988; such options are exercisable
for either book value or market value shares (but only one of those
alternatives), at the choice of the optionee. The value of those options
reflected in the table is the market or book value (using whichever value
would produce the greater profit) of common stock on December 31, 1993 minus
the related market or book value exercise price. The market value of common
stock on the New York Stock Exchange composite tape at close of business on
December 31, 1993 was $36.875 per share and the book value of common stock
on such date was $26.04 per share. All options exercised in 1993 and all
options granted in 1993 or January 1994 were market value options.
Citicorp also provides compensation in the form of a benefit under the
Retirement Plan. The following table sets forth the estimated annual retirement
benefits as of December 31, 1993, as provided by the Retirement Plan and
supplemental non-qualified pension plans, payable upon retirement to employees
in specified remuneration and years-of-service classifications. Amounts include
estimated Social Security benefits which would be deducted in calculating
benefits payable under the Retirement Plan. The estimated amounts are based on
the assumption that payments under the Retirement Plan will commence upon
retirement at age 65.
PENSION PLAN TABLE(1)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
YEARS OF SERVICE
------------------------------------------------------------------
REMUNERATION 15 20 25 30 35
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 200,000................... $ 60,000 $ 80,000 $ 100,000 $ 120,000 $ 127,500
800,000................... 240,000 320,000 400,000 480,000 510,000
1,400,000................... 420,000 560,000 700,000 840,000 892,500
2,000,000................... 600,000 800,000 1,000,000 1,200,000 1,275,000
2,600,000................... 780,000 1,040,000 1,300,000 1,560,000 1,657,500
5,200,000................... 1,560,000 2,080,000 2,600,000 3,120,000 3,315,000
- --------------------------------------------------------------------------------------------------
</TABLE>
(1) This table reflects a straight life annuity benefit.
The years of credited service under the Retirement Plan as of December 31,
1993 for Messrs. Reed, Chia, Collins, Rhodes, Ruding and Steffen were 28, 20,
32, 35, 11 and 10, respectively. Covered compensation under the Retirement Plan
and supplemental non-qualified pension plans is the participant's base salary
plus awards granted under the Executive Incentive Compensation Plan, and, for
years beginning with 1991, any bonus paid under any annual performance program.
With respect to the individuals named in the Summary Compensation Table, covered
compensation does not differ substantially (by more than 10%) from the
compensation set forth under the headings "Salary" and "Bonus" therein. The
benefit payable at retirement is based on a specified percentage of the average
of covered compensation for the five highest paid of the last ten years of
employment. Messrs. Reed, Chia, Collins, Rhodes,
20
<PAGE> 20
Ruding and Steffen will be credited with 35, 30, 35, 35, 22 and 24 years of
service, respectively, upon normal retirement at age 65. Mr. Ruding's and Mr.
Steffen's credited years of service reflect separate contractual agreements.
- --------------------------------------------------------------------------------
PERSONNEL COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Personnel Committee of the Board of Directors reviews and approves
compensation levels for Citicorp's executive officers and oversees and
administers the corporation's executive compensation programs. The Personnel
Committee recommends, and the Board of Directors determines based on such
recommendations, compensation for the Chairman. Compensation levels for the
other executive officers of Citicorp are determined by the Personnel Committee
based on the recommendations of the Chairman. All members of the Personnel
Committee are outside directors who are not eligible to participate in any of
the compensation programs that the Committee oversees.
Citicorp's executive compensation plans are designed to attract, retain,
motivate and appropriately reward individuals who are responsible for Citicorp's
short-and long-term profitability, growth and return to shareholders.
Compensation for Citicorp executive officers consists of:
- salary;
- an annual cash incentive award; and
- long-term incentive awards, typically in the form of stock options or
restricted stock.
Executive officers also participate in a retirement plan, a savings incentive
plan, a stock purchase plan, a medical plan and other benefit plans available to
employees generally.
Target pay levels and option grants for each executive are set annually.
These targets are based on the level of responsibility, job description and job
complexity and on the results of an annual report prepared by an independent
compensation consulting firm. This report (which gathered information on 1992
compensation) surveys the compensation levels of executive officers at a group
of seventeen companies comprised of a set of competing banks and financial
service companies and, in order to provide broader perspective, a number of
market-dominant global enterprises. The seventeen companies, all of which were
included in last year's Board of Directors' Index (which is described in the
next section of this Proxy Statement), were considered by the Personnel
Committee to be similar to Citicorp in complexity and therefore to constitute a
relevant competitive frame for purposes of compensation decisions. Although the
Board has made certain changes in the composition of the Board of Directors'
Index for this year's Proxy Statement, the companies included in last year's
index have been used as the competitive frame for 1993 compensation, primarily
because compensation target levels for 1993 were set prior to the changes in the
composition of the index. Total compensation (including salary, annual cash
incentive awards and long-term incentive awards) is targeted to vary between the
50th and 75th percentile depending on results; the 75th percentile should be
achieved when Citicorp has strong performance, measured against its plan,
historical results and the performance of peer companies. The value of the July
1993 option grants and the special restricted stock awards described below was
not included in the total compensation calculation for purposes of comparison
with the seventeen competitive companies. The grants of restricted stock and
options to Mr. Steffen in connection with the commencement of his employment
were negotiated between Mr. Steffen and Citicorp and were approved by the
Personnel Committee.
Salary levels are reviewed annually, and increases are given when warranted
by individual performance and when salary levels are low as compared to the
group of enterprises described
21
<PAGE> 21
above. The Personnel Committee also uses stock options and restricted stock to
reward senior management and to link them to the long-term results and
stockholder interests of Citicorp. The levels of option grants are determined
primarily by allotting to all executive officers as a group a portion of the
annual option grants available under Citicorp's Stock Incentive Plan, and by
allocating that portion among the executive officers based on their levels of
responsibility. Previous grants of stock options and restricted stock are
reviewed but are not considered the most important factor in determining the
size of any executive's stock option or restricted stock award in a particular
year.
The determination of salary increases, annual cash incentive awards and
long-term incentive awards is first based on the performance of Citicorp (and,
in the case of executives responsible for a particular business, that business's
results), then on the contribution of each individual. Although the components
of compensation (salary, annual cash incentive awards and long-term incentive
awards) are reviewed separately, compensation decisions are made based on a
review of total compensation. The number of shares covered by option grants for
each executive is determined in the context of this review. For purposes of
evaluating total compensation, option grants are valued under a mathematical
model, although the Personnel Committee believes that there is no truly
satisfactory method for determining the value of option grants.
For each year since 1973, the Chairman and senior management have provided
the Personnel Committee and the Board a written Corporate Performance Summary
detailing in a textured and comprehensive way the results of Citicorp and each
of its principal businesses. The report typically runs fifteen to twenty-five
pages; starts with an overview; goes over the financial results (revenue,
expense, margin, credit, taxes); deals with capital, reserves and funding;
reviews the portfolio; discusses management, organizational and control and
compliance issues; and compares Citicorp's results (shareholder return, market
value to book value, as well as return on equity) with peer financial as well as
global enterprises on a one-year and five-year basis.
For 1993 the Personnel Committee reviewed the Corporate Performance Summary
with respect to 1993 performance versus plan, as well as 1993 performance in the
context of Citicorp's 1991-95 turnaround effort. This effort was initially
delineated in the Five-Point Plan for the years 1991 and 1992 described in
Citicorp's 1992 Annual Report and in 1993 by its publicly announced 1995 goals
of a 16% to 18% return on total equity, over $2.5 billion of net income, a
market value/book value ratio of 2:1 for Citicorp common stock, satisfactory
asset quality and an effective control environment.
In the Personnel Committee's view, Citicorp's 1993 performance as reflected
in the Corporate Performance Summary demonstrated substantial progress. The
Committee considered the following indicators of this progress to be especially
important:
- The clear momentum and credibility that Citicorp has achieved over the
last two years.
- The better than plan performance within the context of the 1991-95
effort.
- Operating earnings ($1.9 billion) and margin ($7.7 billion) at an all
time high.
- Total capital ($23.2 billion) and Tier I capital ($13.4 billion, 6.6%) in
the "well capitalized" category and ahead of plan.
- Solid business performance around the world.
- Return on total equity of 15.3%, moving towards the announced long-term
goal of 16% to 18%.
- A 65.7% total return to Citicorp common stockholders in 1993.
The Committee determined that overall 1993 corporate performance was
significantly better than planned. Accordingly, it granted the executive
officers annual cash incentive awards
22
<PAGE> 22
which, when combined with salary and long-term incentive awards, exceeded
targeted levels. Total 1993 compensation (including salary, annual incentive
awards and January 1994 long-term incentive awards) for executive officers as a
group was approximately at the 75th percentile of the competitive enterprises
referred to earlier. The Chairman's total compensation was above the 75th
percentile.
Stock options for 1993 were awarded under two programs. In January 1994 (as
part of its normal program), the Personnel Committee awarded ten-year options,
with terms similar to those granted in previous years, based on corporate and
individual performance in 1993. In determining the January 1994 option grants,
the Committee assessed corporate and individual performance according to the
same standards used to determine annual incentive awards. In addition (as has
been disclosed), in July 1993, the Personnel Committee approved a special
incentive stock option program designed to help Citicorp achieve the goals set
by the Chairman. The program was adopted in recognition that the achievement of
these objectives will require leadership, effort and energy and will be tightly
coupled with shareholder value. Grants under the special program were made to
selected senior executives believed to have a critical impact on the attainment
of Citicorp's goals. These options were not granted based on individual
performance, but were awarded in equal numbers to executives at the same
management level in recognition that a team approach is necessary to meet these
goals. The number of options granted at each management level was determined
based on the Committee's judgment of the appropriate size of award for that
level. Options granted under this program will expire five years from the date
of grant, and will vest dependent on the corporation's stock price performance.
Half of the options will vest when the stock price reaches $50 per share, an
additional 25% will vest when the stock price reaches $55 per share, and the
remaining options will vest when the stock price reaches $60 per share. The
stock price must remain at or above these levels for 20 trading days in a
consecutive 30-trading-day period for the options to vest. The exercise price is
equal to $31.75 per share, the market price of the stock on the grant date.
In determining the Chairman's 1993 annual incentive award, the Personnel
Committee focused on Citicorp's achievement versus its operating plan and the
1991-1995 effort described above, other corporate performance issues considered
in assessing senior executive pay levels generally, and the compensation levels
at the group of enterprises described above. In addition, the Committee noted
the Chairman's vision and tenacity in overseeing Citicorp's return to corporate
strength, and determined that Mr. Reed personally deserved credit for
accomplishing this recovery without disposing of any of the core businesses
which contribute to Citicorp's unique global strength and balance. In light of
the corporation's strong results and Mr. Reed's individual performance, the
Personnel Committee recommended, and the Board of Directors approved, that an
appropriate annual cash incentive award for Mr. Reed was $3,000,000, versus
$1,035,000 in 1992 and no award in 1990 and 1991. In January 1994, Mr. Reed was
awarded ten-year options covering 300,000 shares and 50,000 shares of restricted
stock (vesting on the fifth anniversary of the grant date). In July 1993 he
received five-year options covering 150,000 shares, the same amount granted to
each of the other Named Executives. Both awards of options were made as part of
grants to all senior executives. In addition to Mr. Reed, certain other
executive officers (but none of the other Named Executives) also received
special restricted stock grants in January 1994 as an incentive to further
Citicorp's long-term goals. The size of the restricted stock award to Mr. Reed
was based on the Committee's judgment of his importance to the attainment of
those long-term goals. Mr. Reed's salary in 1993 remained at $1,150,000, the
level set in March 1990.
The Committee has reviewed the corporation's compensation plans in light of
recent changes to the Internal Revenue Code relating to the disallowance of
deductions for remuneration in excess of $1,000,000 to certain executive
officers. All compensation paid to Citicorp's
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executive officers for 1993 will be fully deductible, except that the
deductibility of the cost of the restricted stock granted to Mr. Reed will
depend on the circumstances at the time the stock becomes vested. Any
compensation expense relating to options granted under the corporation's stock
option plans will continue to be allowed as a deduction in 1994. Amounts paid as
salary to Mr. Reed, however, will not be deductible to the extent that his
annual salary exceeds $1,000,000. With respect to annual cash incentive awards
which would otherwise exceed the limits on deductibility established by the new
tax provision, the Committee has adopted the performance-based incentive plan
submitted for shareholder approval in this Proxy Statement.
By the Personnel Committee
Frank A. Shrontz, Chairman Donald V. Seibert
Kenneth T. Derr Franklin A. Thomas
H.J. Haynes Edgar S. Woolard, Jr.
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COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG CITICORP,
THE S&P 500, THE BOARD OF DIRECTORS' INDEX
AND THE KEEFE, BRUYETTE & WOODS 50 BANK INDEX
<TABLE>
<CAPTION>
MEASUREMENT PERIOD BOD(2) IN- KBW IN-
(FISCAL YEAR COVERED) CITICORP DEX S&P 500 DEX(1)
<S> <C> <C> <C> <C>
1988 100 100 100 100
1989 118 123 132 119
1990 56 132 128 85
1991 49 167 166 135
1992 105 173 179 172
1993 173 190 197 182
</TABLE>
(1) The Board of Directors' Index consists of the following 19 market-dominant
global enterprises and financial services companies similar to Citicorp in
complexity: General Motors Corporation, Exxon Corporation, International
Business Machines Corporation, General Electric Company, Philip Morris
Companies Inc., Procter & Gamble Company, Eastman Kodak Company, PepsiCo
Inc., Johnson & Johnson, Chemical Banking Corporation, BankAmerica
Corporation, J. P. Morgan & Co. Incorporated, Bankers Trust New York
Corporation, Banc One Corp., Dean Witter Discover & Co., NationsBank Corp.,
Travelers Inc., American Express Company and Merrill Lynch & Co. Inc.
The Board of Directors' Index used in Citicorp's 1993 Proxy Statement (the
"1993 Index") included all of the foregoing companies except BancOne, Dean
Witter Discover, NationsBank and Travelers, and also included American
Telegraph & Telephone Company ("AT&T") and Sears, Roebuck & Company
("Sears"), which had been included primarily because of their financial
services operations. The Board determined to replace these companies because
Sears transferred a substantial portion of its financial services business
to Dean Witter Discover during 1993 and because the Board believes that the
businesses of Banc One, NationsBank and Travelers are more closely
comparable to Citicorp's than those of AT&T.
If the group of companies included in the 1993 Index had comprised the
current Board of Directors' Index, the levels for that index, instead of
those reflected in the chart above, would have been as follows: 1988, $100;
1989, $125; 1990, $128; 1991, $162; 1992, $172; and 1993, $189.
(2) The Keefe, Bruyette & Woods 50 Bank Index is designed to measure the stock
price performance of the nation's largest banks.
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<PAGE> 24
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II. STOCKHOLDER APPROVAL OF AMENDED AND RESTATED STOCK PURCHASE PLAN
Citicorp seeks stockholder approval of the amendment and restatement of the
1988 Stock Purchase Plan. The amended and restated plan (the "Stock Purchase
Plan") was approved by the Board of Directors on December 21, 1993, subject to
such stockholder approval. If approved, the Stock Purchase Plan will become
effective on May 1, 1994. The principal changes made to the 1988 Stock Purchase
Plan by the amendment and restatement are the authorization of additional shares
of Citicorp common stock for issuance thereunder and the extension (until April
30, 1999) of the latest date on which agreements may be entered into under the
Stock Purchase Plan.
The Plan provides that all permanent employees (full-and part-time) of
Citicorp or a participating Related Corporation (as defined in the Plan) are
eligible to participate in the Stock Purchase Plan. Prior to the amendment and
restatement, the 1988 Stock Purchase Plan required at least two years' service
as a condition of eligibility for certain employees. Approximately 70,000
employees would currently be eligible to participate in the Stock Purchase Plan.
Up to 25,000,000 shares of Citicorp common stock (subject to adjustments for
stock dividends and stock splits) may be issued under the plan. Shares purchased
under the plan may be either authorized but unissued shares or treasury shares.
Under the plan, a participant can purchase for any calendar year shares having
an aggregate purchase price not in excess of the percentage of the employee's
compensation specified by the Personnel Committee or $25,000, whichever is less.
The Stock Purchase Plan provides for two types of offerings: fixed price
offerings and periodic purchase offerings. The Personnel Committee determines
the type of offerings to be made under the plan.
Fixed Price Offerings. Each participant in a fixed price offering must
enter into an agreement with Citicorp indicating the total number of shares of
common stock to be purchased and authorizing Citicorp to withhold from his or
her compensation amounts sufficient to accumulate over the offering period,
together with interest, the aggregate purchase price of such shares. Amounts
withheld are deposited in a purchase account for the benefit of the participant
and bear interest at a rate specified in the agreement.
On the closing date for the fixed price offering, if the fair market value
of a share of common stock is equal to or greater than the purchase price
specified in the agreement, Citicorp will apply funds accumulated in the
participant's account from payroll deductions, including interest, to the
purchase of the shares not previously purchased unless the participant elected
not to purchase any shares or to purchase fewer shares. Any balance in the
account after purchase of the shares will be paid to the participant.
A participant may purchase all or a part of the common stock he or she has
elected to purchase on or before the closing date. If the participant elects to
purchase fewer than all of such shares prior to the closing date, he or she will
apply funds on deposit in the account toward the stock purchase and either
retain the right to purchase the balance of the shares or terminate further
participation in the offering. If, in the event of a purchase of stock prior to
the closing date, the amount on deposit in the participant's account is not
sufficient to cover the purchase price, the participant must pay the balance in
cash. In addition, a participant may
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<PAGE> 25
terminate his or her stock purchase agreement at any time before the closing
date and receive a cash refund of amounts on deposit, including interest.
If the employment of a participant terminates, other than upon retirement
or death, the participant will receive a cash refund of amounts on deposit,
including interest. If termination of employment is due to retirement or death,
shares can be purchased within a specified period or on the closing date,
whichever comes first.
Periodic Purchase Offerings. In a periodic purchase offering each
participant authorizes Citicorp to withhold from his or her compensation amounts
to be applied to the purchase of shares of common stock on dates specified by
the Personnel Committee. The purchase price will be determined in a manner
specified by the Personnel Committee, but in no event will it be less than 85%
of the fair market value of a share on the date of purchase. Shares purchased
will be held in the participant's investment account. Any dividends on such
shares will be paid in cash or automatically applied to the purchase of
additional shares.
A participating employee may at any time withdraw the balance of payroll
deductions not invested. The employee would thereupon cease to be a participant
in the Stock Purchase Plan and could not renew such participation during the
time period specified by the Personnel Committee. If the employment of a
participant terminates, he or she will receive a stock certificate representing
the number of full shares credited to the participant's investment account, the
cash equivalent of the fair market value of the fractional shares credited to
that account and a refund of any payroll deductions not previously invested.
Other Provisions. In order to maintain the participants' rights in the
event of a change in control (as defined in the Stock Purchase Plan) of
Citicorp, the Personnel Committee may, in its sole discretion, either at the
time any purchase agreement is entered into or at any time prior to, coincident
with or after the time of the change of control make such adjustment to the
purchase agreements then outstanding as it deems appropriate to reflect such
change of control or cause the purchase agreements then outstanding to be
assumed, or new purchase agreements substituted therefor, by the surviving
corporation in such change of control.
The Personnel Committee may from time to time amend, suspend or discontinue
the Stock Purchase Plan or amend any and all purchase agreements entered into
under the plan. However, the Personnel Committee may not, without the approval
of the Board and a majority of the stockholders, alter the provisions of the
plan so as to: (a) increase the maximum number of shares which may be covered by
all agreements entered into under the plan or the maximum number of shares which
each eligible employee can elect to have covered by an agreement, (b) extend the
latest date on which agreements may be entered into under the plan beyond April
30, 1999 or the maximum term of any fixed price purchase agreement entered into
under the plan beyond 27 months or any periodic purchase agreement entered into
under the plan beyond five years or (c) decrease the purchase prices specified
in the plan or, directly or indirectly (by cancellation and substitution of
purchase agreements or otherwise), decrease the purchase price applicable to any
purchase agreement entered into under the plan.
The Stock Purchase Plan, which is not regarded as a qualified plan under
Section 401(a) of the Internal Revenue Code, is a tax-qualified "Employee Stock
Purchase Plan" under Section 423 of the Code pursuant to which the participant
is not subject to federal income tax on the excess, if any, of (i) the value of
the stock on the date it is purchased over (ii) the price at which it is
purchased, until such time as the stock is sold or otherwise disposed of.
Citicorp or any of its participating Related Corporations may claim an income
tax deduction equal to the excess described above to the extent that a
participant sells or otherwise disposes of shares
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<PAGE> 26
acquired under the Stock Purchase Plan and does not meet certain holding period
requirements or the sale or other disposition takes place within a stated period
of time.
To date, three fixed price offerings and no periodic purchase offerings
have been made under the 1988 Stock Purchase Plan. For each of the three fixed
price offerings, each of which extended into three calendar years, each
participating employee was eligible to purchase shares of common stock having an
aggregate purchase price equal to the lesser of $75,000 or 40% of the employee's
annual base salary. Although the terms of any future offerings under the Stock
Purchase Plan have not been determined, management expects to recommend that a
fixed price offering be made, commencing in 1994, on similar terms to those
previously made under the 1988 Stock Purchase Plan. In that case, each of the
executive officers of Citicorp would be eligible to purchase stock having an
aggregate purchase price of $25,000 per calendar year in which the fixed price
offering was extended and, if such a purchase were made, would realize a gain to
the extent of any appreciation in the market value of the common stock over the
purchase price fixed at the commencement of the offering.
Management considers the Stock Purchase Plan to be an effective means of
aligning the interests of a broad range of employees with the interests of
Citicorp's stockholders. Adoption of the plan requires the affirmative vote of a
majority of the votes cast at the meeting by the stockholders entitled to vote
thereon.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
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III. STOCKHOLDER APPROVAL OF 1994 ANNUAL INCENTIVE PLAN
Citicorp seeks stockholder approval of the 1994 Annual Incentive Plan for
Selected Executive Officers (the "Plan"). The Plan was adopted by the Personnel
Committee of the Board of Directors and approved by the Board on February 15,
1994, subject to such stockholder approval. If approved, the Plan will be
effective as of January 1, 1994.
The Plan provides that Citicorp may make annual incentive awards, which may
not exceed the amounts specified in the Plan, to the executive officers
described below. The maximum amount payable under the Plan for any year to all
such executive officers will be limited to 0.5% of Citicorp's net income for
that year, plus the amount (not to exceed $3,000,000) that was available to pay
awards under the Plan for prior years but was not so paid. For the purposes of
the Plan, net income is defined as consolidated net income before extraordinary
items and the cumulative effect of accounting changes.
Prior to the start of each year, the Personnel Committee will establish the
maximum award, expressed as a percentage of the total amount available for
awards under the Plan for that year, that each participating executive officer
may receive. The Committee's determination for 1994 was made on February 15,
1994. Subject to those maximum percentages, the Committee will determine the
amount of each executive officer's award after the end of the year. In any
event, no executive officer may receive an award for any year in an amount
greater than 35% of the maximum amount that may be paid to all executive
officers under the Plan.
The Plan has been designed to enable Citicorp to receive federal income tax
deductions for awards paid under the Plan to certain executive officers, even if
any such executive officer's compensation exceeds $1,000,000 in any year. Under
amendments to the Internal Revenue Code (the "Code") adopted in 1993,
corporations whose stock is publicly traded generally will not be entitled to
deduct remuneration paid to "covered employees" to the extent that
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<PAGE> 27
payments for any year to any such employee exceed $1,000,000, unless the
payments are made under qualifying performance-based compensation plans.
Citicorp believes that if the Plan is approved by the stockholders, it will
qualify as a performance-based compensation plan under the Code and proposed
regulations published by the Internal Revenue Service, although Citicorp has not
requested or received, and does not expect to receive, a ruling from the
Internal Revenue Service to that effect.
Because the Plan has been designed solely to meet the requirements of the
Code, it will be applicable only to annual incentive awards paid to those
executive officers who are "covered employees" (as defined in the applicable
provision of the Code) for that year. Citicorp expects that annual incentive
awards to those executives will be paid under the Plan rather than under the
current annual incentive program. Currently, "covered employees" include the
Chairman and the four most highly compensated executive officers other than the
Chairman. Citicorp intends to continue to compensate its other executive
officers under the compensation plans and policies described elsewhere in this
Proxy Statement under the caption "Personnel Committee Report on Executive
Compensation."
Awards under the Plan may be paid in cash, Citicorp stock or any other
consideration determined by the Personnel Committee at or prior to the time the
awards are made. The awards may be payable immediately or on a deferred basis.
The Personnel Committee will have the authority to amend the Plan, provided that
no amendment that requires stockholder approval under the Code and the related
regulations may be made without such approval.
The amounts of any awards that may be payable to participating executive
officers under the Plan in future years cannot currently be determined. If the
Plan had been in effect in 1993, the maximum awards payable, in the discretion
of the Personnel Committee, to the covered executive officers would have been
approximately $9,600,000 to all five executive officers as a group and
$3,400,000 to any one executive officer. The Personnel Committee believes that
it would have awarded to each of the executive officers the same annual cash
incentive award that he received in January 1994. As described on page 18 of
this Proxy Statement, all such executive officers as a group received annual
incentive awards of $5,975,000, and the highest award paid to any such executive
officer was $3,000,000.
Approval of the Plan requires the affirmative vote of a majority of the
votes cast at the meeting by the stockholders entitled to vote thereon.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
- --------------------------------------------------------------------------------
IV. STOCKHOLDER APPROVAL OF SELECTION OF INDEPENDENT AUDITORS
The Board believes it appropriate to submit for action by the stockholders
its selection of KPMG Peat Marwick ("Peat Marwick"), certified public
accountants, as auditors of Citicorp for the year 1994. The appointment of this
firm was recommended to the Board by its Audit Committee, composed of directors
who are not officers or employees of Citicorp or Citibank, who reviewed the
professional competence of the firm and its audit program. As auditors of
Citicorp in 1994, Peat Marwick would also audit Citibank. Peat Marwick has
served as the independent auditor for Citibank since 1964 and for Citicorp since
it commenced operations in 1968. For reasons of effectiveness and economy, it
has been Citicorp's practice to require the Peat Marwick partner in charge of
Citicorp's assignment to be rotated from time to time, rather than changing
accounting firms at intervals.
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<PAGE> 28
The firm provides various audit services to Citicorp and its subsidiaries
on a worldwide basis. Fees for such audit services during 1993 amounted to
$15,464,000.
Representatives of Peat Marwick are expected to be present at the Annual
Meeting with the opportunity to make a statement and to be available to respond
to questions regarding these or any other appropriate matters.
Adoption of this proposal requires the affirmative vote of a majority of
the votes cast at the meeting by the stockholders entitled to vote thereon.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
- --------------------------------------------------------------------------------
STOCKHOLDER PROPOSALS
Management has determined that each of the following stockholder proposals
should be opposed. Adoption of each stockholder proposal requires the
affirmative vote of a majority of the votes cast at the meeting by the
stockholders entitled to vote thereon.
- --------------------------------------------------------------------------------
V. STOCKHOLDER PROPOSAL
Mr. John J. Gilbert, 1165 Park Avenue, New York, New York 10128, who holds
200 shares of Citicorp common stock and represents an additional family interest
of 600 shares, together with the late Lewis D. Gilbert, has advised Citicorp
that it is his intention to present the following resolution for consideration
and action by stockholders at the 1994 Annual Meeting:
RESOLVED, that the stockholders of Citicorp, assembled in annual meeting in
person and by proxy, hereby request the Board of Directors to take the steps
necessary to provide for cumulative voting in the election of directors, which
means each stockholder shall be entitled to as many votes as shall equal the
number of shares he or she owns multiplied by the number of directors to be
elected, and he or she may cast all of such votes for a single candidate, or any
two or more of them as he or she may see fit.
REASONS: Continued very strong support along the lines we suggest were
shown at the last annual meeting when 26.2%, owners of 61,485,246 shares, were
cast in favor of this proposal. The vote against included 5,211 unmarked
proxies.
A law in California provides that all state pension holdings, as well as
state college funds, invested in shares, must be voted in favor of cumulative
voting proposals, showing increasing recognition of the importance of this
democratic means of electing directors.
The National Bank Act provides for cumulative voting. Unfortunately, in
many cases companies get around it by forming holding companies without
cumulative voting. Thus, with many banking failures the result is that taxpayers
have to make up the losses. Banking authorities have the right to question the
capability of directors to be on banking boards. Unfortunately, in many cases
authorities come in after and say the director or directors were not qualified.
So there is no reason why this could not be done for corporations under the SEC
and banking authorities.
Because of the normal need to find new directors and the need for directors
on the compensation and other committees, we think cumulative voting is the
answer; and also to see that dividends are paid, so that dividend reinvestment
plans are possible, like other banks have. In addition, some recommendations
have been made to carry out the Valdez 10 points. The
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<PAGE> 29
11th should be to have cumulative voting and to end stagger systems of electing
directors, in our opinion.
Alaska took away cumulative voting, over our objections, when it became a
state. Perhaps, if the citizens had insisted on proper representation the
disastrous Valdez oil spill might have been prevented if environmental directors
were elected through cumulative voting.
Many successful corporations have cumulative voting. For example, Pennzoil
having cumulative voting defeated Texaco in that famous case. Another example,
in spite of still having a stagger system of electing directors, Ingersoll-Rand,
which has cumulative voting, won two awards. In Fortune magazine it was ranked
second as "America's Most Admired Corporations" and the Wall Street Transcript
noted "on almost any criteria used to evaluate management, Ingersoll-Rand
excels." We believe Citicorp should follow their example.
If you agree, please mark your proxy for this resolution; otherwise it is
automatically cast against it, unless you have marked to abstain.
MANAGEMENT'S COMMENT
Cumulative voting is not in the best interest of Citicorp or its
stockholders. Directors elected as a result of cumulative voting are likely to
advocate the special viewpoints of the few stockholders who elected them rather
than those of all stockholders. Cumulative voting is not part of the democratic
political process, and Citicorp does not believe it should become part of its
corporate electoral process.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
- --------------------------------------------------------------------------------
VI. STOCKHOLDER PROPOSAL
Evelyn Y. Davis, Watergate Office Building, 2600 Virginia Ave. N.W., Suite
215, Washington, D.C. 20037, who represents 200 shares of Citicorp common stock,
has advised Citicorp that it is her intention to present the following
resolution for consideration and action by stockholders at the 1994 Annual
Meeting:
RESOLVED, that the stockholders of Citicorp recommend that the Board take
the necessary steps so that future outside directors shall not serve for more
than six years.
REASONS, the President of the U.S.A. has a term limit, so do Governors of
many states.
Newer directors may bring in fresh outlooks and different approaches with
benefits to all shareholders.
No director should be able to feel that his or her directorship is until
retirement.
If you AGREE, please mark your proxy FOR this resolution.
MANAGEMENT'S COMMENT
Implementation of this proposal would be detrimental to Citicorp in two key
respects. First, since the proposal would arbitrarily disqualify those directors
who had served for six years, Citicorp stockholders would be denied the
opportunity to evaluate and vote for or against those directors on the basis of
merit. Second, Citicorp management's effectiveness would be undermined rather
than enhanced because Citicorp would be deprived of sophisticated, insightful
and experienced directors for no compelling reason. Indeed, experience as a
member
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<PAGE> 30
of the Board is a particularly valuable asset for a Citicorp director because of
the complexities associated with formulating policies and strategies for
Citicorp's global franchise within the regulatory framework in which the
corporation operates.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
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VII. STOCKHOLDER PROPOSAL
Sister Kathleen Gilbride, Corporate Responsibility Coordinator for the
Sisters of Charity of Saint Vincent de Paul of New York, Mount St.
Vincent-on-Hudson, Bronx, New York 10471, owners of 8,100 shares of Citicorp
common stock, Sister Laurie Michalowski, SSSF for the Passionist Missions, 5700
N. Harlem Avenue, Chicago, Illinois 60631, owners of 100 shares, and Michael
Kelly, Manager, Corporate Cash and Investments, Sisters of Charity of the
Incarnate Word Health Care System, 2600 North Loop West, Houston, Texas 77092,
owners of 45,000 shares, have advised Citicorp that it is their intention to
present the following resolution for consideration and action by the
stockholders at the 1994 Annual Meeting:
WHEREAS, the developing world owes over $1.3 trillion to industrialized
countries, one-third of this debt is owed to U.S. commercial banks and the U.S.
government. In 1990, debt service resulted in a net transfer of approximately
$60 billion from the South to the North, according to the World Bank. This
enormous financial drain has had an adverse effect on the debtor countries'
poorest sectors, which in many cases never benefited from loans and certainly
did not incur them;
Michel Camdessus, the IMF's former Managing Director, said: "Too often in
recent years it is the poorest segments of the population that have carried the
heaviest burden of economic adjustment." UNICEF noted that for one-sixth of
humanity "the march of human progress has become a retreat . . . it is the
children who are bearing the heaviest burden of debt and recession in the
1990's";
Latin American countries owe U.S. commercial banks more than half a
trillion dollars. One of five Latin Americans lives in poverty, one of every
three consumes fewer calories than the level recommended by the World Health
Organization. One out of every 20 of the region's children dies before the age
of one;
In industrializing countries like Mexico, Argentina and the Philippines, we
believe that loans were largely absorbed not by projects which foster widespread
social development but by (1) large projects which did little to reduce poverty,
resulting in (2) burdensome interest payments on past loans, and permitting (3)
capital flight, and (4) military spending;
For example, Brazil used foreign loans to finance three dysfunctional
nuclear power plants which cost billions of dollars and produce no electricity;
We believe more responsible lending criteria will reduce the bank's future
risks and losses by taking into full account the potential loans' social,
economic, political, and ecological impact on the people and environment of less
economically developed countries;
We believe the bank's long-term investment mandates lending, restructuring
and write-off criteria, which support debtor nations' human rights, economic and
political democracy, environmental protection and sustainable growth;
RESOLVED, that the shareholders request that Citicorp take the following
measures to protect itself, its shareholders, the financial community and the
people of developing countries
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from unsustainable exposure in those countries by establishing and disclosing to
shareholders human rights, social, political, and ecological criteria for:
1. Extending loans to or promoting other bank products in developing
countries, and
2. Writing off existing loans which place an intolerable burden on the
population.
SUPPORTING STATEMENT: We believe it is important to protect the people of
the developing countries from past loan practices which have at times
jeopardized their economies and ecologies and even the very survival of the
poor. Responsible lending practices which promote a more viable global economy
are also needed to protect our corporation and its shareholders, as well as U.S.
jobs and overseas markets.
MANAGEMENT'S COMMENT
Citicorp's position on this issue is unchanged since this proposal was last
submitted in 1991, when over 96% of the shares voting supported the Board of
Directors' position and voted against the proposal.
Since 1982, Citicorp has devoted substantial resources to managing the
Third World debt problem. During this period, Citicorp has played a leading role
in the banking industry's collective effort to restructure, reschedule and
refinance the commercial bank debt of affected debtor countries.
Management believes that Citicorp's comprehensive involvement in and
long-term commitment to the developing world has provided Citicorp with a unique
understanding and sensitivity to the concerns expressed in the proposal. Indeed,
Citicorp is one of the few major international banks to have continued and
expanded its business interests in developing countries.
The proposal, however, requests Citicorp to disclose the criteria employed
by its credit officers in making specific credit decisions. That would be
undesirable for two reasons. First, it is likely that confidential customer
information would be divulged. Second, management's independent decision-making
function of attributing greater weight to certain factors at the expense of
others would be undermined.
At the same time, Citicorp management does not believe that writing off or
forgiving commercial bank loans is the answer to economic problems facing these
countries. In cooperation with governments of many borrower countries, creditor
banks have found other ways to ease the debt burden over the years--including
the lengthening of loan payback periods, the lowering of interest payments and
the provision of debt-for-equity swaps. A number of countries have resolved
their external-debt problems through negotiations with creditors, and others are
doing so. These approaches, together with other sound business and government
policies, can help to bring about real growth in a country's economy, and
thereby offer the chance of lasting prosperity.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
- --------------------------------------------------------------------------------
VIII. STOCKHOLDER PROPOSAL
Richard A. Dee, 115 East 89th Street, New York, New York 10128, who holds
144 shares of Citicorp common stock, has advised Citicorp that it is his
intention to present the following resolution for consideration and action by
the stockholders at the 1994 Annual Meeting:
Stockholders of publicly-owned corporations do not "elect" directors.
Directors are selected by incumbent directors and managements, and stockholders
merely "ratify" or approve those selections--in much the same way that they
ratify selections of auditors.
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Approval of this proposal would provide the owners of Citicorp, its
stockholders, a real opportunity each year to vote for and to elect, from a
group of nominees, those director candidates whose qualifications and stated
intentions they favor.
The term "Election of Directors" has been misused for many years in proxy
materials to refer to the process by which directors are empowered. The term is
not only inappropriate, it is misleading. Regardless of how many stockholders
have been "deceived" into believing that they participated in genuine elections
of directors, all stockholders have been "denied" their rights to genuine
elections.
Incumbent directors and managements anxiously protect their absolute power
over corporate activities and corporate governance. The base of that power is
control of board composition. By ignoring the "elective process rights of
stockholders," they preserve that absolute power--aided, unintentionally, by
those stockholders who, lacking interest and/or concern, willingly forgo their
rights as corporate owners.
Elected public officials, as was emphatically demonstrated in the last two
general elections, are being held accountable by constituents. Corporate
directors, however, continue to answer only to fellow directors, most of whom
are friendly top management folk moonlighting very profitably on one another's
boards. Perhaps "directors for hire" would be on fewer boards, and would devote
more time to and serve more effectively their primary employers, if directors'
fees went to those employers instead of to directors.
As long as incumbents select only the number of so-called candidates as
there are directorships to be filled, and as long as it is virtually impossible
for stockholders to utilize successfully what is purported to be their right to
nominate and to elect directors, no practical means exists for stockholders to
bring about director turnover.
It is hereby proposed that the Board of Directors, at its next meeting,
adopt a resolution calling for the Committee on Directors to nominate each year
twice as many candidates as there are directorships to be filled, including
among candidate qualifications presented to stockholders in the Proxy Statement,
a Statement from each as to why he or she deserves to be elected.
Although all nominees would continue to be selected by incumbents, approval
of this proposal would enable stockholders to replace from one director to the
entire board if they become dissatisfied with corporate activities, policies or
performance. That's not a happy prospect even for those able to nominate all of
their possible successors!
Current statutory restraints make it impossible to include in this proposal
any mechanism to enable stockholders to participate meaningfully in director
nominations. Citicorp is incorporated in Delaware, a.k.a. "Corporate
Heaven"--which boasts a long and profitable history of "stockholder abuse" based
on its continual pandering to those who get control of corporations instead of
to those who own them.
Please vote FOR this proposal.
MANAGEMENT'S COMMENT
In Citicorp management's opinion, the proposal is clearly not in the best
interest of the corporation. The Citicorp Board's Committee on Directors
carefully considers nominees for directorships among a select group of
individuals who are both professionally qualified and legally eligible to serve
as directors of a U.S. bank holding company. Based on its judgment as to which
of those candidates will best serve the interests of stockholders, the Committee
makes
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<PAGE> 33
its recommendations to the Board. Therefore, in calling for the Committee to
nominate each year twice as many candidates as there are directorships to be
filled, the proposal imposes an unreasonable burden on the Committee and
diminishes the value of the Committee's recommendations without justification.
The proposal not only lacks merit, but also contains a number of statements
which lack a sound basis. In particular, the proponent's assertions which impugn
the integrity not only of Citicorp's directors and its electoral process, but
even its reasons for incorporating in Delaware, are unfounded.
Citicorp's directors are accountable to stockholders in two significant
ways. First, directors are legally accountable by virtue of their fiduciary
responsibilities. Second, stockholders who are dissatisfied with management
performance may seek recourse by simply exercising their legal authority to
withhold their votes for one or more nominees. Indeed, given these dual sources
of accountability, the proposal's assertions grossly misrepresent the serious
manner in which members of Citicorp's Board select nominees for directorships
and fulfill their fiduciary obligations to stockholders.
With respect to the corporation's state of incorporation, Citicorp, along
with many other companies, incorporated in Delaware in order to avail itself of
that state's progressive corporation laws and efficient governmental apparatus,
as well as its experienced judiciary, which is sensitive to the interests of
both management and stockholders. These are significant factors which have
contributed to the success of the corporation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
- --------------------------------------------------------------------------------
OTHER MATTERS
The cost of solicitation of proxies will be borne by Citicorp. Proxies may
be solicited by mail, personal interview, telephone or telegraph. Directors,
officers and regular employees of Citicorp may solicit proxies by such methods
without additional compensation. Banks, brokerage houses and other institutions,
nominees and fiduciaries will be requested to forward the soliciting material to
their principals and to obtain authorizations for the execution of proxy cards
and will, upon request, be reimbursed for reasonable expenses incurred.
Employees of Georgeson & Co. Inc. will also solicit proxies at a fee of
approximately $17,000 plus out-of-pocket expenses.
As of the date of this Proxy Statement, Citicorp does not intend to present
and has not been informed that any other person intends to present any business
not specified in this Proxy Statement for action at the meeting. If any other
matters come before the meeting, proxies will be voted on such matters in
accordance with the judgment of the person or persons authorized to vote the
proxies.
Only stockholders of record at the close of business (5:00 P.M., New York
City time) on February 18, 1994, will be entitled to notice of and to vote at
the meeting. Stockholders are urged to sign the enclosed proxy card, solicited
on behalf of Citicorp's Board of Directors, and to return it promptly in the
enclosed envelope. Proxies will be voted in accordance with stockholders'
directions. Signing the proxy card does not affect a stockholder's right to vote
in person at the meeting, and the proxy may be revoked prior to its exercise by
appropriate notice to the undersigned. If no directions are given, proxies will
be voted (i) for the election of directors, (ii) for the approval of the amended
and restated Stock Purchase Plan, (iii) for the
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<PAGE> 34
approval of the 1994 Annual Incentive Plan, (iv) for the approval of the
selection of independent auditors and (v) against the stockholders' proposals.
On any of these matters, abstentions and broker non-votes are not considered
votes cast.
Copies of Citicorp's Annual Report and Form 10-K for the year ended
December 31, 1993 may be obtained without charge by writing to Corporate Affairs
Distribution, Citicorp, 850 Third Avenue, 13th Floor, New York, New York 10043,
Attention: Jeffrey Barnard, or by telephone request to (212) 559-3199.
Stockholders may receive a report on all proposals at the 1994 Annual
Meeting without charge by writing to the Office of the Assistant Secretary,
Citicorp, 399 Park Avenue, New York, New York 10043.
- --------------------------------------------------------------------------------
SUBMISSION OF STOCKHOLDER PROPOSALS FOR INCLUSION IN CITICORP'S
1995 PROXY STATEMENT
In accordance with Rule 14a-8 of the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended, Citicorp will accept
proposals of stockholders for possible inclusion in Citicorp's 1995 Proxy
Statement through the close of business on November 8, 1994.
By order of the Board of Directors,
/s/ Charles E. Long
CHARLES E. LONG
Executive Vice President and Secretary
35
<PAGE> 35
(LOGO)
Printed on recycled paper.
<PAGE> 36
APPENDIX TO ELECTRONIC FORMAT DOCUMENT
On the cover of the printed version, there is a halftone illustration
of the earth from above the Pacific Ocean, with lines of longitude and latitude
shown.
In the section in the printed version on the Election of Directors,
appear head and shoulder photographs of the 16 nominees.
<PAGE> 37
PROXY CITICORP
PROPOSALS OF THE BOARD OF DIRECTORS
The Directors Recommend a Vote FOR
I. Election of Directors *
FOR NOT FOR ABSTAIN
/ / / / / /
II. To approve an amended and restated Stock Purchase Plan
FOR AGAINST ABSTAIN
/ / / / / /
III. To approve the 1994 Annual Incentive Plan
FOR AGAINST ABSTAIN
/ / / / / /
IV. Independent Auditors
FOR AGAINST ABSTAIN
/ / / / / /
* To withhold authority to vote for any individual see instructions on the
reverse side of this card.
STOCKHOLDER PROPOSALS
The Directors Recommend a Vote AGAINST
V. Cumulative Voting
FOR AGAINST ABSTAIN
/ / / / / /
VI. Limit terms of outside directors to six years
FOR AGAINST ABSTAIN
/ / / / / /
VII. Establish and disclose to stockholders the social, political,
ecological, and human rights criteria for extending loans, promoting
bank products, and writing off loans in less developed countries
FOR AGAINST ABSTAIN
/ / / / / /
VIII. Committee on Directors should recommend twice as many directors as
there are directorships to be filled for election at each annual meeting
FOR AGAINST ABSTAIN
/ / / / / /
/ / Check box to eliminate sending future annual reports for this account.
Securities and Exchange Commission rules require that at least one account
continue to receive the annual report.
Unless you otherwise indicate, this proxy will be voted "FOR" the election of
directors, "FOR" the proposal to approve an amended and restated Stock
Purchase Plan, "FOR" the proposal to approve the 1994 Annual Incentive Plan,
"FOR" the proposal on Independent Auditors, and "AGAINST" the stockholder
proposals.
This Proxy is Solicited on Behalf of the
Board of Directors
- ----------------------------------------
Please Sign Here exactly as your name(s)
appear(s) to the left
________________________________________
________________________________________
Dated___________________________________
When signing as attorney, executor,
administrator, trustee, or guardian,
please give full title.
<PAGE> 38
PROXY CITICORP
- ---------------------------------------------------------------------------
INSTRUCTIONS - To withhold authority to vote for any individual nominee, write
that nominee's name on the line provided below.
D.W. Calloway J.S. Reed R.B. Smith
C.H. Chandler W.R. Rhodes C.J. Steffen
P.Y. Chia R.L. Ridgway F.A. Thomas
P.J. Collins H.O. Ruding E.S. Woolard, Jr.
K.T. Derr F.A. Shrontz
H.J. Haynes M.H. Simonsen
Stock is NOT to be voted for the following nominee(s) for director:
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
Annual Meeting of Stockholders - April 19, 1994, 9:00 A.M. (New York City
Time), 399 Park Avenue, New York, NY
The undersigned appoints P.J. Collins, J.S. Reed, and W.R. Rhodes, or any of
them, proxies, each having power to substitute another person, to vote all the
stock of Citicorp held of record by the undersigned on February 18, 1994 at the
Annual Meeting of Stockholders of Citicorp, to be held on April 19, 1994 and at
any adjournment thereof. The proxies have authority to vote such stock, as
indicated on the reverse side hereof, (1) to elect directors and (2) on the
other matters set forth in the Proxy Statement. The proxies are further
authorized to vote such stock upon any other business that may properly come
before the meeting or any adjournment thereof.
- ---------------------------------------------------------------------------
Please indicate on the reverse side of this card how your stock is to be voted.
Unless you otherwise indicate, this proxy will be voted "FOR" the election of
directors, "FOR" the proposal to approve an amended and restated Stock Purchase
Plan, "FOR" the proposal to approve the 1994 Annual Incentive Plan, "FOR" the
proposal on Independent Auditors, and "AGAINST" the stockholder proposals.
- ---------------------------------------------------------------------------
Please date and sign this proxy on the reverse side and return it promptly
whether or not you expect to attend the meeting. You may, nevertheless, vote in
person if you do attend. We thank you for your interest.
This Proxy is Solicited on Behalf of the Board of Directors
<PAGE> 39
ATTACHMENT 1
CITICORP 1994 STOCK PURCHASE PLAN
1. Definitions
(a) "Agreement" means a stock purchase agreement, the form of
which has been approved by the Committee, pursuant to
which Employees may purchase Common Stock under the Plan.
(b) "Board" means the Board of Directors of Citicorp.
(c) "Closing Date" means the last day of the stated term of
an Agreement as set forth therein and as established by
the Committee.
(d) "Committee" means the Personnel Committee of the Board.
(e) "Common Stock" means Citicorp common stock, $1.00 par
value.
(f) "Compensation" means regular fixed basic compensation
plus "regular" shift differential, as of the date
indicated in the related Agreement, expressed as an
annual rate. It does not include any bonus, overtime
payments, or similar distributions or contributions to
any employee benefit plan of Citicorp or any Related
Corporation.
(g) "Employees" means all U.S. and non-U.S. based regular
employees (full- and part-time) of Citicorp or a
participating Related Corporation (including officers and
directors who are also employees of Citicorp or a
participating Related Corporation) who were actually
employed by Citicorp or a participating Related
Corporation as of the date indicated in the related
Agreement and remain actively employed through the date
on which employees and Citicorp enter into Agreements
with respect to such offering.
(h) "Fair Market Value" as of any given date means the
average of the highest and the lowest quoted selling
price on the New York Stock Exchange (the "NYSE") of a
share of Common Stock on such date.
(i) "Plan" means the 1988 Stock Purchase Plan, as hereby
amended and restated in its entirety, hereafter known as
the 1994 Stock Purchase Plan, and as described herein.
(j) "Related Corporation" means any corporation (other than Citicorp)
in an unbroken chain of corporations including Citicorp provided
that, on the date of each Agreement hereunder, each of the
corporations (other than the last corporation in the unbroken
chain) owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the corporations
in such chain.
(k) "Resulting Shares" means all shares issued by means of
dividends, splits, combinations or reclassifications
thereon and any securities issued in respect thereto.
1
<PAGE> 40
CITICORP 1994 STOCK PURCHASE PLAN
2. Purpose
This 1994 Stock Purchase Plan is intended to serve as an
employment incentive and to encourage equity ownership by
Employees in order to increase their proprietary interest in
Citicorp's success. This Plan is intended to amend and
restate Citicorp's 1988 Stock Purchase Plan.
3. Administration
The Plan will be administered by the Committee. The Committee
may (but is under no obligation to) in its sole discretion
determine, from time to time, that Citicorp shall offer to
enter into Agreements with Employees and the Committee shall
determine whether such Agreements shall be offered under
Section 7 or Section 8 of the Plan. The Committee may also,
in its sole discretion but subject to the express provisions
of the Plan:
(a) determine the form and provisions of the Agreements to be
entered into hereunder;
(b) determine which Related Corporations shall participate in
the Plan;
(c) decide questions which may arise with respect to the
interpretation, construction or application of the Plan
or any Agreement; and
(d) prescribe, amend and rescind rules and regulations
relating to the Plan.
Any interpretation and construction by the Committee of any
Plan provision or any Agreement or any determination by the
Committee pursuant to any Plan provision or any Agreement
shall be final and conclusive. No member of the Committee
shall be liable for any action or determination made in good
faith, and the members shall be entitled to indemnification
and reimbursement in the manner provided in Citicorp's
Restated Certificate of Incorporation, as it may be amended
from time to time.
The Committee may designate persons other than its members to
carry out its responsibilities other than its authority to
determine, from time to time, that Citicorp shall offer to
enter into Agreements.
4. Eligibility
(a) Only Employees are eligible to participate in the Plan.
For purposes of determining whether or not an individual
is an Employee:
(i) employment by an entity all or substantially
all of the assets of which have been acquired
by or which have been merged into Citicorp or
a Related Corporation shall be considered as
employment by Citicorp or a Related
Corporation; and
(ii) employment by any other entity which the
Committee determines,
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<PAGE> 41
CITICORP 1994 STOCK PURCHASE PLAN
under nondiscriminatory rules uniformly applied
to similarly situated persons, shall be deemed to
be employment by Citicorp or a Related Corporation.
(b) No Employee may enter into an Agreement if such Employee,
immediately after the Agreement is entered into, owns
stock possessing 5% or more of the total combined voting
power or value of all classes of stock of Citicorp or any
Related Corporation. For this purpose, the rules of
Section 424(d) of the Internal Revenue Code shall apply
in determining the stock ownership of an Employee, and
stock which the Employee may purchase under outstanding
Agreements shall be treated as stock owned by the
Employee.
5. Stock
(a) The stock subject to Agreements shall be shares of
authorized but unissued Common Stock, shares of Common
Stock held as Treasury Stock or shares of Common Stock
purchased on the open market. Subject to adjustment in
accordance with the provisions of Section 9 below, the
total number of shares of Common Stock which may be the
subject of Agreements shall not exceed 25,000,000 shares.
(b) In the event that any Agreement for any reason expires or
is terminated, any shares of Common Stock which were the
subject of such Agreement but were not thereby purchased
may be subject to a subsequent Agreement or other
agreement entered into under a similar stock purchase
plan or otherwise.
6. Number of Shares An Employee May Purchase
(a) Citicorp may grant to Employees an election to purchase,
pursuant to the terms of an Agreement, such number of
shares of Common Stock as shall have an aggregate
purchase price not in excess of such percentage (not to
exceed 100%) of each Employee's Compensation, if any, as
the Committee may specify or may be permitted by
applicable law or such aggregate purchase price of shares
as the Committee may specify. For purposes of each
Agreement, Compensation will be determined from the
payroll records of Citicorp or the Related Corporation,
or both, on the date the Employee enters into the
Agreement with Citicorp or such other date as may be
stated in the Agreement pursuant to which Employees
enroll to purchase shares under the Plan. An Employee
may elect to purchase shares with an aggregate purchase
price that is less than the aggregate purchase price
which he or she is eligible to elect to purchase and to
make multiple elections to purchase shares so long as the
aggregate purchase price of all shares purchased does not
exceed the amount for which such Employee is enrolled.
(b) Notwithstanding the foregoing provisions of this Plan, no
Employee may enter into an Agreement permitting the
purchase of shares if such Employee would thereby have
entered into Agreements under the Plan and/or any other
stock purchase plan of Citicorp and its Related
Corporations that would permit such Employee to purchase
shares of Common Stock at a rate based on the aggregate
purchase price of such
3
<PAGE> 42
CITICORP 1994 STOCK PURCHASE PLAN
shares that exceeds a total of $25,000 in Fair Market
Value of such shares (determined at the date of the
Agreement) for each calendar year in which any such
Agreement with such Employee is outstanding at any time.
Any Agreement which causes such total to exceed such
limit (determined at the date of such Agreement) shall be
null and void to the extent of such excess.
7. Terms and Conditions Of Agreements For Fixed Purchase Price
Offerings
Agreements to be entered into under this Section pursuant to
which an Employee will be granted the right to purchase shares
of Common Stock shall be in such form as the Committee shall,
from time to time, approve, and shall comply with and be
subject to the following terms and conditions:
(a) Purchase Price
The "Purchase Price" for a share of Common Stock
purchased under an Agreement will be the Fair Market
Value of a share on the date of the Agreement.
(b) Purchase of Shares
Shares of Common Stock purchased by an Employee under the Plan
shall be paid for with: (1) funds accumulated in the Purchase
Account as described in Section 7(c); (2) a combination of such
funds together with additional funds, if necessary, provided by the
Employee in the event of a purchase of shares pursuant to Section
7(i) or Section 7(j); (3) shares of Common Stock, as provided in
Section 7(d); or (4) in any other manner as may be approved by
the Committee and set forth in such Agreement.
(c) Purchase Account
(i) Pursuant to the terms of each Agreement, each
Employee who enrolls in the Plan will authorize
Citicorp or the Related Corporation, as the case
may be, to deduct from his or her compensation,
throughout the duration of such Agreement,
commencing on the date indicated in such Agreement,
substantially equal amounts sufficient to
accumulate as of the Closing Date, with allowance
for interest paid thereon as determined in
accordance with the terms of such Agreement, the
aggregate purchase price of the shares covered by
such Employee's Agreement. Each Employee shall
direct Citicorp or the Related Corporation, as the
case may be, to deposit such withheld amounts in a
time deposit open account (the "Purchase Account")
with Citibank, N.A. or a subsidiary bank or other
depository institution of Citicorp (the "Bank").
The Employee shall further agree that he or she
shall only withdraw and be paid the funds so
accumulated on his or her behalf in the Purchase
Account pursuant to the terms of the Agreement.
(ii) If required by applicable law or regulation,
Purchase Accounts may be opened at foreign branches
of the Bank, at branches of a Related Corporation
or at other banks or depository institutions
approved by Citicorp. Such accounts
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<PAGE> 43
CITICORP 1994 STOCK PURCHASE PLAN
shall be maintained and bear interest in
accordance with local practice.
(iii) Citicorp shall cause the Bank at all times to
pay interest on amounts held in any Purchase
Account at a rate which may be calculated by
reference to a formula or another rate, in
each case as established by the Committee
prior to the commencement of each offering
under the Plan. Such interest rate shall
remain in force for the full term of any
Agreement entered into under the terms of the
Plan. Records shall be maintained showing the
amount on deposit in each Purchase Account and
the amount of interest allocable to it, as
well as the amount held in such Purchase
Account on behalf of each Employee.
(d) Purchase With Common Stock
Notwithstanding the provisions of Section 7(c) concerning
Purchase Accounts, the Committee in its discretion may
permit Employees to purchase shares covered by an
Agreement with shares of Common Stock, under any terms or
conditions as may be set forth in the Agreement.
(e) Term Of Agreements
Each Agreement shall have a stated term as established by
the Committee but in no event shall any Agreement have a
term of more than 27 months.
(f) Date On Which Shares Must Be Purchased
Each Agreement shall provide that, subject to termination
pursuant to Section 7(h) or to earlier purchase pursuant
to Section 7(i), any shares to be purchased thereunder
must be purchased on the Closing Date provided for in the
Agreement.
(g) Employee's Purchase Directions
(i) Subject to termination pursuant to Section 7(h) or
to earlier purchase pursuant to Section 7(i), each
Agreement entered into under this Section 7 shall
specify the aggregate purchase price of shares of
Common Stock or the means for calculating the
number of shares of Common Stock that the Employee
may thereby purchase and shall provide that the
Employee may purchase all of such shares on or
prior to the Closing Date. Each Agreement shall
further provide that on the Closing Date Citicorp
will purchase shares of Common Stock with all the
funds in the Purchase Account on the Closing Date,
without further authorization, but only if the Fair
Market Value on the Closing Date is equal to or
higher than the Purchase Price. If the Fair Market
Value on the Closing Date is lower than the
Purchase Price, the amount then held in the
Purchase Account on behalf of Employees will be
returned to such Employees by check.
(ii) If an Employee desires to purchase fewer than all
of the shares covered by his
5
<PAGE> 44
CITICORP 1994 STOCK PURCHASE PLAN
or her Agreement, such Employee may do so by notifying the
party specified in the Agreement in the manner so provided on
or before the Closing Date. Should the Employee fail to
deliver such notification, such failure shall be deemed an
election by the Employee to purchase the number of shares for
which such Employee had enrolled (and not already purchased)
under the Agreement on the Closing Date and to have any
amount in the Purchase Account held on behalf of such
Employee applied toward such purchase, subject
to clause (i) above.
(h) Termination of Agreement
An Employee who has entered into an Agreement under this
Section may at any time on or before the Closing Date
terminate the Agreement in its entirety by written notice
of such termination delivered in the manner set forth in
the Agreement to such person or persons as may be
specified in the Agreement. Upon such termination,
Citicorp shall cause all funds including interest, if
any, then held on deposit on behalf of such Employee in
the Purchase Account to be paid to such Employee and
further payroll deductions shall cease within a
reasonable time of notification of such Employee's
termination of such Agreement.
(i) Election To Purchase Prior To Closing Date
Each Agreement shall provide that Employees may elect,
prior to the Closing Date, to purchase all or a portion
of the shares covered by an Agreement by providing a
notification to the party specified in the Agreement by
the date specified therein to purchase shares on the last
business day of the month in which such notification is
received.
(j) Termination of Employment
The rights granted to each Employee under an Agreement shall
terminate at the earliest occurrence of any of the following:
(i) termination of employment, except as provided in
the paragraph below and except in the case of the
retirement or death of such Employee. For these
purposes, retirement is defined as termination of
employment on or after age 55, except for cause.
If, however, such termination of employment results
from the discontinuance or sale of the business
that employed such Employee, then, at the sole
discretion of the Committee, the Employee shall be
deemed to have continued in employment until the
end of the month following such Employee's
termination (unless the Closing Date would occur
first, in which event such employment shall be
deemed to have continued only until the Closing
Date).
(ii) the expiration of three months after the date of
such Employee's retirement, or such lesser period
as may be required under applicable provisions of
the Internal Revenue Code of 1986, as amended. The
Committee may extend the
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CITICORP 1994 STOCK PURCHASE PLAN
time period over which an Employee may exercise his or her
rights under an Agreement in the event of such Employee's
retirement, but in no event may such period extend beyond
the Closing Date specified in such Agreement.
(iii) the expiration of twelve months after the date
of such Employee's death if such Employee dies
while employed by Citicorp or within the
period of time after such Employee's
retirement commences during which such
Employee was entitled to exercise his or her
rights under such Agreement, but in no event
beyond the Closing Date specified in such
Agreement. During such twelve-month period,
such Employee's estate, personal
representative, or beneficiary shall have the
right to exercise such Employee's rights under
such Agreement to the extent such rights have
not been exercised prior to such Employee's
death.
(iv) action by the Committee at any time prior to a
Change of Control (as defined in Section 10 below)
specifying a termination date of such Employee's
rights under such Agreement in the event of a
Change in Control.
The Committee shall have discretion to determine whether
military or government service or an authorized leave of
absence (as a result of disability or otherwise) shall
constitute a termination of employment for purposes of the
Agreement. Any determination made by the Committee with
respect to any matter referred to in this Section shall be
binding on all persons affected thereby. In the event that an
Employee's employment is terminated following a Change in
Control, such Employee's rights under an Agreement shall not
terminate on such date but shall instead continue in force and
effect, and may be exercised, until the date that is one year
after such date of termination of employment (or such later
date as may be determined as provided above), provided that in
no event shall any Employee's rights under any Agreement
continue in force and effect after the Closing Date specified
in the Agreement.
8. Terms And Conditions Of Agreements For Periodic Purchase
Offerings
Agreements to be entered into under this Section pursuant to
which an eligible Employee will be granted the right to
purchase shares of Common Stock shall be in such form as the
Committee shall, from time to time, approve and shall comply
with and be subject to the following terms and conditions.
(a) Purchase Price
The purchase price shall be determined in a manner
determined by the Committee but in no event shall the
purchase price be less than 85 percent of the Fair Market
Value of a share on the Purchase Date (as defined in
Section 8(c)).
(b) Election To Participate
Each Employee may participate in the Plan by filing with
the Committee or its designee, prior to the effective
date of the first offering under this Section 8 and any
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CITICORP 1994 STOCK PURCHASE PLAN
subsequent anniversary thereof, an Election to Purchase
form authorizing specified regular payroll deduction
amounts over the following twelve-month period not to
exceed in total amount over such period such maximum
amount (subject to the limits of Section 6(b)) or such
minimum amount as the Committee shall determine. Payroll
deductions shall be made regularly and in equal amounts
during the period of one year commencing on the effective
date of the first offering under this Section 8 or each
anniversary date thereof, as the case may be (the
"Purchase Period"), and shall be credited, as promptly as
practicable, to the name of each Participant. A
participating Employee may at any time withdraw the
balance of his or her payroll deductions not theretofore
invested and thereby cease to be a participating Employee
in the Plan until such period as the Committee shall
specify if the Agreement must elapse before his or her
participation may re-commence. Subject to such rules as
the Committee may establish, a participating Employee may
decrease his or her payroll deduction during the Purchase
Period by filing a new Election to Purchase form.
(c) Purchase Date
The Committee shall have the authority to establish the
dates (each a "Purchase Date") on which share purchases
shall be made during a Purchase Period. As of each
Purchase Date, there shall be purchased the number of
whole and fractional shares determined by dividing the
amount of the participating Employee's accumulated
payroll deductions not theretofore invested by the
purchase price as determined in Section 8(a).
(d) Investment Accounts
All whole and fractional shares purchased shall be
credited to a separate investment account for each
participating Employee. The Committee may specify in the
Agreement that all dividends paid with respect to the
whole and fractional shares in a participating Employee's
investment account shall be paid in cash or that
dividends shall be combined with payroll deductions and
automatically applied to the purchase of whole and
fractional shares of Common Stock. The procedure for the
issuance of certificates representing full shares held in
the investment accounts will be established by the
Committee from time to time.
(e) Title of Accounts
Each investment account shall be in the name of the
Employee, or at the discretion of the Committee, in the
participating Employee's name jointly with a member of
his or her family with right of survivorship or, if a
participating Employee is a resident of a jurisdiction
which does not recognize such a joint tenancy, in his or
her name as tenant in common with a family member,
without right of survivorship.
(f) Retirement, Termination And Death
In the event of a participating Employee's retirement or
termination of employment, a certificate for the full
shares in his or her investment account shall be issued
to him
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CITICORP 1994 STOCK PURCHASE PLAN
or her, and cash equivalent to the Fair Market
Value of his or her fractional shares and the cash
amounts credited to the name of such participant not
theretofore invested shall be refunded to him or her. In
the event of the death of a participating Employee, his
or her investment account, if without rights of
survivorship, shall be distributed to his or her
executor, administrator, or personal representative.
(g) Termination Of Plan
In the event of termination of the Plan, a certificate
for the full shares in each participating Employee's
investment account shall be issued to him or her, and the
cash equivalent at Fair Market Value of each
participant's fractional shares and the cash amounts
credited to the name of each participant not theretofore
invested shall be refunded to each participant.
(h) Term Of Agreements
Each Agreement shall have a stated term as established by
the Committee but in no event shall any Agreement have a
term of more than five years.
9. Recapitalization
The aggregate number of shares of Common Stock which may be
covered by all Agreements, the number of shares covered by
each Agreement, and the price per share as established in
accordance with each such Agreement shall all be
proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock 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 receipt
of consideration by Citicorp; provided, however, that any
fractional shares resulting from any such adjustment shall be
eliminated. The Committee may also make proportional
adjustments in the Agreements of non-insiders in its
discretion if an increase or decrease in the number of issued
shares results from events other than those described in the
preceding sentence.
10. Change of Control
(a) In order to maintain Employees' rights in the event of a
Change of Control, as hereinafter defined, the Committee,
in its sole discretion, may, either at the time an
Agreement is entered into or at any time prior to or
coincident with or after the time of a Change of Control,
make such adjustment to the Agreements then outstanding
as the Committee deems appropriate to reflect such Change
of Control or cause the Agreements then outstanding to be
assumed, or new Agreements substituted therefor, by the
surviving corporation in such Change of Control. The
Committee may, in its discretion, include such further
provisions and limitations in any Agreement as it may
deem equitable and in the best interests of Citicorp.
(b) The Committee may determine that a "Change of Control" of
Citicorp shall be deemed to have occurred if and when:
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CITICORP 1994 STOCK PURCHASE PLAN
(i) any person, including a "person" as such term is
used in Section 14(d)(2) of the Securities Exchange
Act of 1934 (the "1934 Act"), is or becomes a
beneficial owner (as such term is defined in Rule
13d-3 under the 1934 Act), directly or indirectly,
of securities representing 25% or more of the
combined voting power of Citicorp's then
outstanding securities;
(ii) any transaction occurs with respect to Citicorp
which is subject to the prior notice requirements
of the Change in Bank Control Act of 1978;
(iii) any transaction occurs with respect to Citicorp
which will require a "company" as defined in the
Bank Holding Company Act of 1956, as amended, to
obtain prior approval of the Federal Reserve Board
under Regulation Y;
(iv) the adoption of any plan or proposal for the
liquidation of Citicorp by the stockholders of
Citicorp; or
(v) individuals who, as of the date of adoption,
constitute the Board (the "Incumbent Board") cease
for any reason to constitute at least a majority
of the Board; provided, however, that any individual
becoming a director after the date of adoption of
this Plan whose election, or nomination for election
by Citicorp's stockholders, was approved by a vote
of at least a majority of the directors then
comprising the Incumbent Board shall be considered
as though such individual were a member of the
Incumbent Board, but excluding, for this purpose,
any such individual whose initial assumption of
office occurs as a result of either an actual or
threatened election contest (as such terms are used
in Rule 14a-11 of Regulation 14A promulgated under
the 1934 Act) or other actual or threatened
solicitation of proxies or consents by or on behalf
of a person other than the Board.
(c) Notwithstanding the foregoing, the following acquisitions
of shares or other securities of Citicorp shall not
constitute a Change of Control: (i) any acquisition
directly from Citicorp; (ii) any acquisition by Citicorp;
and (iii) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by Citicorp or
any corporation controlled by Citicorp.
(d) Any good faith determination by the Incumbent Board of
whether a Change of Control within the meaning of this
Plan has occurred shall be conclusive.
11. Assignability
(a) No Agreement shall be assignable or transferable except
by will or by the laws of descent and distribution.
During the lifetime of an Employee who is a party to such
an Agreement the shares which are covered by such
Agreement may be purchased only by the Employee.
(b) Amounts on deposit in the Purchase Account may be
assigned. If, by the Closing Date of any Agreement
entered into pursuant to Section 7, any assignment made
has
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CITICORP 1994 STOCK PURCHASE PLAN
not been revoked, the portion of such assigned amount
will be paid to that third party. Any remaining balance
in such account will be disposed of as provided in the
Agreement.
12. Rights As A Stockholder
An Employee who is a party to an Agreement entered into under
the Plan shall have no rights as a stockholder with respect to
shares covered by such Agreement until such date as the
Employee or his or her nominee is the holder of record of such
shares. No adjustment will be made for dividends or other
rights for which the record date is prior to such date.
13. Miscellaneous
(a) All Agreements entered into and all transactions that
occur under this Plan are intended to comply with all
applicable requirements of Section 423 or any successor
Section of the Internal Revenue Code of 1986, as amended
from time to time, and, with respect to persons subject
to Section 16 of the 1934 Act, with the conditions of
Rule 16b-3 or its successors under the 1934 Act. To the
extent any provision of the Plan or any Agreement fails
to so comply, such provision shall be deemed invalid and
shall be omitted from the Agreements entered into under
the Plan to the extent permitted by law and deemed
advisable by such administrator, and the remaining terms
of the Plan and such Agreements shall not be affected
thereby.
(b) The Committee may, in its discretion and subject to
Section 15, modify the Agreements under the Plan to
comply with local laws and regulations in order to permit
eligible Employees employed outside the United States to
receive benefits under the Plan.
(c) Agreements entered into under the Plan may contain such
other provisions as the Committee shall deem advisable.
14. Term Of Plan
The effective date of this Plan is May 1, 1994 subject to its
approval by shareholders of Citicorp. No Agreement shall be
entered into pursuant to the Plan after April 30, 1999.
15. Amendments
The Committee may from time to time alter, amend, suspend, or
discontinue the Plan or alter or amend any and all Agreements
granted under the Plan to the extent permitted by law.
However, no such action of the Committee may, without the
approval of the Board and the stockholders, alter the
provisions of the Plan so as to:
(a) increase the maximum number of shares which may be
covered by all Agreements entered into under the Plan or
the maximum number of shares which each Employee can
elect to have covered by the Agreement;
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CITICORP 1994 STOCK PURCHASE PLAN
(b) extend the latest date on which Agreements may be entered
into under the Plan beyond April 30, 1999 or the maximum
term of any Agreement entered into under Section 7 of the
Plan beyond 27 months or any Agreement entered into under
Section 8 of the Plan beyond five years; or
(c) decrease the purchase prices specified in Section 7(a) or
Section 8(a) hereof, or, directly or indirectly (by
cancellation and substitution of Agreements or
otherwise), decrease the purchase price applicable to any
Agreement entered into under the Plan.
16. Application Of Funds
The proceeds received by Citicorp from the sale of Common
Stock pursuant to Agreements entered into under the Plan will
be used for general corporate purposes.
17. No Obligation To Purchase Shares
The entering into an Agreement under the Plan shall impose no
obligation upon the Employee to purchase any shares covered by
such Agreement.
18. Withholding
Any amounts to be paid or shares to be delivered by Citicorp
under the Plan shall be reduced by any sums required by law to
be withheld by Citicorp.
19. Governing Law
This Plan and all Agreements entered into under this Plan
shall be construed in accordance with and governed by the laws
of the State of New York.
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ATTACHMENT 2
1994 CITICORP ANNUAL INCENTIVE PLAN FOR SELECTED EXECUTIVE OFFICERS
1. PURPOSE
The purpose of the Plan is to permit the Company, through
awards of annual incentive compensation qualifying for federal
income tax deductions, to attract and retain executives and to
motivate these executives to promote the profitability and
growth of the Company.
2. DEFINITIONS
o "Award" shall mean the amount granted to a Participant by
the Committee for a Performance Period under the Plan.
o "Award Payment Date" shall mean, for each Performance
Period, the date that the amount of the Award for that
Performance Period shall be paid to the Participant under
Section 6 of the Plan, without regard to any election to
defer receipt of the Award made by the Participant under
Section 7 of the Plan.
o "Board of Directors" shall mean the Board of Directors of
the Company.
o "Carryforward Amount," for any Performance Period, means
the sum of all amounts included in the Pool Amounts for
all prior Performance Periods but not actually paid as
Awards, provided that the Carryforward Amount shall never
be more than $3 million.
o "Code" shall mean the Internal Revenue Code of 1986, as
amended, and references to particular provisions of the
Code shall include any amendments thereto or successor
provisions and any rules and regulations promulgated
thereunder.
o "Committee" shall mean the Personnel Committee of the
Board of Directors or any other duly established
committee or subcommittee meeting the requirements of
Section 162(m)(4)(c) of the Code that the Personnel
Committee of the Board of Directors determines shall act
as the Committee for purposes of the Plan.
o "Company" shall mean Citicorp.
o "Disability" shall mean a disability as defined under the
Company's Disability Benefits Plan.
o "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations
promulgated thereunder.
o "Executive" shall mean any executive officer of the Company.
o "Net Income," for any Performance Period, shall mean
Citicorp's consolidated net income for the period before
extraordinary items and the cumulative effect of
accounting changes, determined in accordance with
generally accepted accounting principles consistently
applied and as reported by management of Citicorp to the
Board of Directors following the end of the Performance
Period, provided that Net Income shall never be less than
zero.
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o "Participant," for a Performance Period, shall mean each
Executive who is a "covered employee" (as defined in
Section 162(m) of the Code) for that Performance Period.
o "Performance Period" shall mean the taxable year of the
Company or any other period designated by the Committee
with respect to which an Award may be granted.
o "Plan" shall mean this 1994 Citicorp Annual Incentive
Plan for Selected Executive Officers, as it may be
amended from time to time.
o "Pool Amount," for any Performance Period, shall mean (a)
0.5% of Net Income plus (b) the Carryforward Amount.
o "Retirement" shall mean retirement under any retirement
plan maintained by the Company.
3. ADMINISTRATION
The Plan shall be administered by the Committee, which shall
have full authority to interpret the Plan, to establish rules
and regulations relating to the operation of the Plan, to
determine the amount of any Awards (subject to the limitations
of Section 4) and the type of consideration in which they
shall be paid and to make all other determinations and take
all other actions necessary or appropriate for the proper
administration of the Plan. The Committee's interpretation of
the Plan, and all actions taken within the scope of its
authority, shall be final and binding on the Company, its
stockholders and Participants, Executives, former Executives
and beneficiaries. No member of the Committee shall be
eligible to participate in the Plan.
4. ELIGIBILITY AND PARTICIPATION; DETERMINATION OF AWARDS
(a) Prior to the beginning of each Performance Period, or at
such later time as may be permitted by applicable
provisions of the Code, the Committee shall establish for
each Participant a maximum Award, expressed as a
percentage of the Pool Amount for that Performance
Period, provided that the total of all such maximum
percentages shall not exceed 100% (except to the extent
permitted by Section 162(m) of the Code), and the maximum
percentage for any single Participant shall not exceed
35%. For the 1994 Performance Period, the Committee
shall make the determinations referred to in this
paragraph before April 1, 1994.
(b) Following the end of each Performance Period, the
Committee may determine to grant to any Participant an
Award, which may not exceed that Participant's maximum
Award. The aggregate amount of all Awards under the Plan
for any Performance Period shall not exceed the
applicable Pool Amount.
5. PAYMENT OF AWARDS
Subject to the limitations of Section 6, each Participant
shall be eligible to receive, as soon as practicable after the
amount of such Participant's Award for a Performance Period
has been determined, all or a portion of that Award. Awards
may be paid in cash, stock (which may have such restrictions
as to transferability or vesting as the Committee shall
determine), any other form of consideration determined by the
Committee or any combination thereof, provided that for
purposes of the Plan the value of any stock so granted shall
be the average of the highest and lowest quoted selling prices
on the New York Stock Exchange on the date of grant and the
value of any other non-cash Award shall be determined by the
Committee
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at the time it is granted. Any stock so granted
shall be awarded pursuant to, and subject to the limits on
aggregate amounts of stock issuable under, the 1988 Citicorp
Stock Incentive Plan, as it may be amended from time to time.
In the event a partial amount is paid, the Committee may
determine, in its sole discretion, the date when the remaining
portion will be paid to the Participant for that Performance
Period.
6. LIMITATION ON RIGHT TO PAYMENT OF AWARD
(a) No Participant shall have any right to receive payment of
any Award under the Plan for a Performance Period unless
the Participant remains in the employ of the Company
through the end of the Performance Period. However, in
the event that, prior to the end of the Performance
Period, a Participant's employment with the Company or
any of its affiliates is terminated due to the
Participant's death, Disability or Retirement, the
Participant (or the Participant's beneficiary) shall
remain eligible to receive a portion of the Award, on the
Award Payment Date, based on the amount of time the
Participant was employed during this Performance Period.
Notwithstanding the preceding two sentences, the
Committee may approve payment of an Award to a
Participant whose employment terminates prior to the
Award Payment Date for reasons other than death,
Disability or Retirement.
(b) Furthermore, no Participant shall have any right to
receive payment of an Award under the Plan if, subsequent
to the commencement of the Performance Period and prior
to the Award Payment Date, the Participant either (i)
engaged directly or indirectly, either personally or as
an employee, agent, partner, stockholder, officer or
director of, or consultant to, any entity or person
engaged in any business in which the Company or its
affiliates is engaged, and, in the opinion of the
Committee, such entity or person has engaged in
competition with the Company or any of its affiliates or
(ii) at any time divulged to any person or entity other
than the Company or any of its affiliates, any of the
trade secrets, methods, processes or the proprietary or
confidential information of the Company or any of its
affiliates. For the purpose of this paragraph, a
Participant shall not be deemed a stockholder of a
competing entity if the Participant's record and
beneficial ownership amount to not more than one percent
of the outstanding capital stock of any company subject
to the periodic and other reporting requirements of the
Securities Exchange Act of 1934, as amended.
7. DEFERRAL OF PAYMENT OF AWARDS
Notwithstanding the provisions of Section 5 hereof, and at the
discretion of the Committee, a Participant may, subject to
such terms and conditions as the Committee may determine,
elect to defer payment of all or part of any Award which the
Participant might earn with respect to a Performance Period
(together with interest thereon from the Award Payment Date at
the rate, if any, fixed by the Committee) by complying with
such procedures as the Committee may prescribe.
8. DESIGNATION OF BENEFICIARY
A Participant may designate a beneficiary or beneficiaries
who, in the event of the Participant's death prior to full
payment of any Award hereunder, shall receive payment of any
Award due under the Plan. Such designation shall be made by
the Participant on a form prescribed by the Committee. The
Participant may at any time change or revoke such designation.
A beneficiary designation, or revocation of a prior
beneficiary designation, will be effective only if it is made
in writing on a form provided by the Company, signed by the
Participant and received by the Company. If the Participant
does not designate a beneficiary
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<PAGE> 54
or the beneficiary dies prior to receiving any payment of any
the Plan shall be paid to the Award, Awards payable under
beneficiary dies after receiving any Participant's estate. If
the payment of an Award, any amounts remaining to be paid shall
be paid to the beneficiary's estate.
9. CORPORATE CHANGE
In the event of a corporate change (e.g. an extraordinary
dividend, a merger or other reorganization, or a sale or lease
of substantially all the assets of the Company) which
substantially affects the determination of the Company's
performance, the Committee may, if it determines such action
is in the best interest of the Company and obtains prior
approval of the Board of Directors, equitably adjust the
Awards to be made under the Plan, subject to the limits set
forth in Section 4 and any other restrictions imposed by the
Code.
10. AMENDMENTS
The Committee may at any time amend this Plan, provided that
no such amendment that would require the vote of the
stockholders of the Company pursuant to Section 162(m) of the
Code or Section 16 of the Exchange Act shall be effective
without such consent. No such amendment which adversely
affects a Participant's rights to or interest in an Award
granted prior to the date of the amendment shall be effective
unless the Participant shall have agreed thereto.
11. TERMINATION
(a) The Board of Directors may terminate this Plan at any
time, and in the case of such termination, the following
provisions of this Section 11 shall apply notwithstanding
any other provisions of the Plan to the contrary.
(b) Each Award payable under Section 5 shall be paid as soon
as practicable, but in no event later than 30 days after
the termination date of the Plan.
(c) Payment of deferred amounts plus any earnings may be
accelerated with respect to any affected Participant in
the discretion of the Board of Directors and paid as soon
as practicable, but in no event shall the termination of
the Plan adversely affect the rights of any Participant
to deferred amounts plus any earnings thereon previously
awarded such Participant.
12. MISCELLANEOUS PROVISIONS
(a) This Plan is not a contract between the Company and its
Executives. No Executive or other person shall have any
claim or right to be granted an Award under this Plan
until such Award is actually granted. Neither the
establishment of this Plan, nor any action taken
hereunder, shall be construed as giving any Executive any
right to be retained in the employ of the Company.
Nothing contained in this Plan shall limit the ability of
the Company to make payments or awards to Executives
under any other plan, agreement or arrangement.
(b) A Participant's right and interest under the Plan may not
be assigned or transferred, except as provided in Section
8 hereof, and any attempted assignment or transfer shall
be null and void and shall extinguish, in the Company's
sole discretion, the Company's obligation under the Plan
to pay Awards with respect to the Participant.
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(c) The Plan shall be unfunded. The Company shall not be
required to establish any special segregation of assets
to assure payment of Awards.
(d) The Company shall have the right to deduct from Awards
paid any taxes or other amounts required by law to be
withheld. If the Committee so determines, a Participant
may elect, subject to any restrictions which may be
imposed by the Committee or by applicable law, that any
such deduction, with respect to Awards paid in stock or
other non-cash consideration, shall be made by
withholding a portion of such stock or other
consideration.
(e) All questions pertaining to the construction, regulation,
validity and effect of the provisions of the Plan shall
be determined in accordance with the laws of the State of
New York.
(f) If any provision of this Plan would cause Awards not to
constitute "qualified performance-based compensation"
under Section 162(m) of the Code, that provision shall be
severed from, and shall be deemed not to be a part of,
this Plan, but the other provisions hereof shall remain
in full force and effect.
(g) No member of the Board of Directors of the Company or an
affiliate or the Committee, and no officer, employee or
agent of the Company or a subsidiary shall be liable for
any act or action hereunder, whether of commission or
omission, taken by any other member, or by any officer,
agent, or employee, or, except in circumstances involving
bad faith, for anything done or omitted to be done in the
administration of the Plan.
13. EFFECTIVE DATE
The Plan shall be effective for the Performance Period
beginning on January 1, 1994, subject to approval by the
stockholders of the Company in accordance with Section 162(m)
of the Code.
5
