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
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
CITICORP
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(Name of Registrant as Specified In Its Charter)
.................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] 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 transaction
applies:
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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it was
determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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4) Date Filed:
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<PAGE>
CITICORP PROXY STATEMENT
NOTICE OF 1997
ANNUAL MEETING OF STOCKHOLDERS
& PROXY STATEMENT
CITICORP [Logo]
SPACE IN THE 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 letter from the broker
or bank are examples of proof of ownership.
<PAGE>
CITICORP [Logo]
- --------------------------------------------------------------------------------
Citicorp John S. Reed
399 Park Avenue Chairman
New York, New York 10043
February 25, 1997
Dear Stockholder:
You are cordially invited to the Annual Meeting of Stockholders of Citicorp.
It will be held on Wednesday, April 9, 1997, at 9:00 A.M. (Eastern time) in
the Ashe Auditorium of the James L. Knight International Center at 400 S.E.
Second Avenue in Miami, Florida.
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
<PAGE>
CITICORP [Logo]
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Date: Wednesday, April 9, 1997
Time: 9:00 A.M. (Eastern time)
Place: James L. Knight International Center
Ashe Auditorium
400 S.E. Second Avenue
Miami, Florida 33131
At the Annual Meeting, the following proposals are on the agenda for action by
the stockholders:
o To elect fourteen directors to hold office until the 1998 Annual Meeting
and until the election and qualification of their successors;
o To approve a new stock incentive plan;
o To ratify the selection of KPMG Peat Marwick LLP as independent auditors;
o To act upon certain stockholder proposals; and
o 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., Eastern time) on February 10, 1997 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 offices of KPMG Peat Marwick LLP, One
Biscayne Tower, 2 South Biscayne Boulevard, Miami, Florida 33131-1806, 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
<PAGE>
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 Wednesday,
April 9, 1997. Holders of common stock of record at the close of business
(5:00 P.M., Eastern time) on February 10, 1997 are entitled to one vote for
each share held. On that date there were 461,702,410 shares of Citicorp common
stock outstanding and eligible to vote. This Proxy Statement and Form of Proxy
are first being sent to stockholders on February 25, 1997.
I. ELECTION OF DIRECTORS
Fourteen 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 holders of
common stock 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, 1997, 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 activities of
the nominees.
[Photo] Former Chairman and Chief Executive Officer
D. Wayne Calloway PepsiCo, Inc.
61 o Joined PepsiCo, Inc. -- 1967
3,877 shares o President and Chief Operating Officer, Frito-Lay,
1988 Inc. -- 1976
o Chairman of the Board and Chief Executive
Officer, Frito- Lay, Inc. -- 1978
o Director of PepsiCo, Inc. -- 1983
o Executive Vice President and Chief Financial
Officer, PepsiCo, Inc. -- 1983
o President and Chief Operating Officer -- 1985
o Chairman and Chief Executive Officer -- 1986 to
1996
o Committees: Directors, Personnel and Subsidiaries
and Capital
o Other Directorships: Citibank, N.A., Exxon
Corporation, General Electric Company and
PepsiCo, Inc.
o Other Activities: The Business Council
1
<PAGE>
[Photo] Vice Chairman
Paul J. Collins Citicorp and Citibank, N.A.
60 o Joined Citibank, N.A. -- 1961
797,416 shares(1) o Head, Investment Bank -- 1982
1985 o Senior Corporate Officer for North America/Chief
Planning Officer -- 1985
o Vice Chairman, Senior Corporate Officer for
Europe and the Middle East -- 1988
o Vice Chairman, Finance -- 1991
o Vice Chairman, Emerging Markets -- 1996
o Committees: Executive (ex-officio) and
Subsidiaries and Capital (Chairman)
o Other Directorships: Citibank, N.A. and
Kimberly-Clark Corporation
(1) Includes 595,369 shares which Mr. Collins has
the right to acquire within 60 days pursuant to
employee benefit plans.
[Photo] Chairman and Chief Executive Officer
Kenneth T. Derr Chevron Corporation
60 o Joined Chevron Corporation -- 1960
8,230 shares o Assistant to the President -- 1969
1987 o Vice President -- 1972
o President and Chief Executive Officer, Chevron,
USA Inc. -- 1979 to 1984
o Director, Chevron Corporation -- 1981
o Vice Chairman -- 1985 to 1988
o Chairman and Chief Executive Officer -- 1989
o Committees: Executive, Personnel, Subsidiaries
and Capital and Citibank, N.A. Consulting
o Other Directorships: AT&T Corp. and Potlatch
Corporation
o Other Activities: American Petroleum Institute
(Director), The Business Council, The Business
Roundtable and The California Business Roundtable
2
<PAGE>
[Photo] Institute Professor
John M. Deutch Massachusetts Institute of Technology
58 o Director, Energy Research of the U.S. Department
10,728 shares of Energy -- 1978
1996 o Undersecretary, U.S. Department of Energy -- 1979
to 1980
o Dean of Science, M.I.T. -- 1982 to 1985
o Provost and Karl T. Compton Professor of
Chemistry, M.I.T. -- 1985 to 1990
o Institute Professor, M.I.T. -- 1990 to 1993
o Undersecretary, Department of Defense -- 1993
o Deputy Secretary, Department of Defense -- 1994
o Director, C.I.A. -- 1995 to 1996
o Institute Professor, M.I.T. -- 1996
o Committees: Audit and Public Issues
o Other Directorships: Citibank, N.A., Palomar
Medical Technologies, Inc. and CMS Energy
[Photo] Chairman and Chief Executive Officer
Reuben Mark Colgate-Palmolive Company
58 o Joined Colgate-Palmolive Company -- 1963
5,913 shares o President and General Manager (Venezuela and
1996 Canada) -- 1970 to 1974
o Vice President and General Manager -- 1974 to
1979
o Group Vice President -- 1979 to 1981
o Executive Vice President -- 1981 to 1983
o Director, Colgate-Palmolive Company -- 1983
o President (Chief Operating Officer) -- 1983 to
1984
o Chief Executive Officer -- 1984 to 1986
o Chairman of the Board and Chief Executive Officer
-- 1986
o Committees: Audit, Directors and Subsidiaries and
Capital
o Other Directorships: Citibank, N.A., New York
Stock Exchange, Inc., Pearson plc and Time Warner
Inc.
3
<PAGE>
[Photo] President
Richard D. Parsons Time Warner, Inc.
48 o Assistant and First Assistant Counsel to the
1,730 shares Governor, State of New York -- 1971 to 1974
1996 o Deputy Counsel to the Vice President, Office of
the Vice President of the United States -- 1975
o General Counsel and Associate Director, Domestic
Council, White House -- 1975 to 1977
o Managing Partner, Patterson Belknap, Webb & Tyler
-- 1977 to 1988
o President and Chief Operating Officer, Dime
Savings Bank of New York -- 1988 to 1990
o Chairman and Chief Executive Officer, Dime
Savings Bank of New York -- 1991 to 1995
o President, Time Warner, Inc. -- 1995
o Committees: Audit and Subsidiaries and Capital
o Other Directorships: Citibank, N.A., Federal
National Mortgage Association, Philip Morris
Companies, Inc. and Time Warner, Inc.
[Photo] Chairman
John S. Reed Citicorp and Citibank, N.A.
58 o Joined Citibank, N.A. -- 1965
1,621,624 shares(2) o Head, Individual Bank -- 1975
1982 o Vice Chairman -- 1982
o Chairman and Chief Executive Officer -- 1984
o Committees: Directors (Chairman) and Executive
(ex-officio)
o Other Directorships: Citibank, N.A., Monsanto
Company and Philip Morris Companies, Inc.
o Other Activities: The Business Council and The
Bankers Roundtable
(2) Includes 600,000 shares which Mr. Reed has the
right to acquire within 60 days pursuant to
employee benefit plans.
4
<PAGE>
[Photo] Vice Chairman
William R. Rhodes Citicorp and Citibank, N.A.
61 o Joined Citibank, N.A. -- 1957
333,421 shares(3) o Senior Corporate Officer responsible for the
1991 Caribbean, Central and South America and
Sub-Sahara Africa -- 1969
o Chairman, Citicorp and Citibank, N.A.
Restructuring Committee -- 1984
o Group Executive -- 1986
o Senior Executive, International -- 1990
o Vice Chairman -- 1991
o Committees: Executive (ex-officio)
o Other Directorships: Citibank, N.A. and Private
Export Funding Corporation (PEFCO) Other
Activities: Brown University, Council of the
Americas, Council on Foreign Relations, The
Institute for International Finance, New York
City Partnership, New York City Chamber of
Commerce, New York Hospital, The Metropolitan
Museum of Art, Northfield Mount Hermon School,
Lincoln Center Consolidated Corporate Fund,
Institute for EastWest Studies, Group of 30 and
U.S.-Egyptian Presidents' Council
(3) Includes 228,334 shares which Mr. Rhodes has
the right to acquire within 60 days pursuant to
employee benefit plans.
[Photo] Former Assistant Secretary of State
Rozanne L. Ridgway for Europe and Canada
61 o U.S. Department of State: Ambassador to Finland
1,995 shares -- 1977 to 1980; Counselor -- 1980 to 1981;
1990 Ambassador to German Democratic Republic -- 1982
to 1985; Assistant Secretary of State -- 1985 to
1989
o President, The Atlantic Council of the United
States -- 1989 to 1992
o Co-Chair -- 1993 to 1996
o Committees: Audit and Public Issues
o Other Directorships: Citibank, N.A., Bell
Atlantic Corporation, The Boeing Company, Emerson
Electric Co., Minnesota Mining and Manufacturing
Company, RJR Nabisco, Inc., Sara Lee Corporation
and Union Carbide Corporation
o Other Activities: The Atlantic Council of the
United States (Director), American Academy of
Diplomacy (Director),The Brookings Institution
(Trustee), The CNA Corporation (Trustee),
National Geographic Society (Trustee) and
Baltic-American Enterprise Fund (Chair)
5
<PAGE>
[Photo] Vice Chairman
H. Onno Ruding Citicorp and Citibank, N.A.
57 o Executive Director of the International Monetary
264,483 shares(4) Fund -- 1977 to 1981
1990 o Member of the Board of Managing Directors of
Amsterdam-Rotterdam Bank -- 1981 to 1982
o Minister of Finance of the Kingdom of the
Netherlands -- 1982 to 1989
o Chairman of the Netherlands Christian Federation
of Employers -- 1990 to 1992
o Joined Citibank, N.A. management -- 1992
o Vice Chairman -- 1992
o Committees: Executive (ex-officio) and Citibank,
N.A. Consulting
o Other Directorships: Amsterdamsch Trustees
Kantoor B.V. (Supervisory Director), Pechiney
S.A. (Director), Unilever N.V. and Unilever PLC
(Advisory Director) and Corning Incorporated
(Director)
(4) Includes 219,287 shares which Mr. Ruding has
the right to acquire within 60 days pursuant to
employee benefit plans.
[Photo] Chairman, President and Chief Executive Officer
Robert B. Shapiro Monsanto Company
58 o Joined G.D. Searle & Co. (subsequently acquired
2,237 shares by Monsanto Company) -- 1979
1994 President, The NutraSweet Group (a division of G.D.
Searle & Co.) -- 1982 to 1985
o Chairman and Chief Executive Officer, The
NutraSweet Company (a subsidiary of Monsanto
Company) -- 1985 to 1990
o President, The Agricultural Group (a division of
Monsanto Company) -- 1990 to 1993
o President and Chief Operating Officer, Monsanto
Company -- 1993 to 1995
o Chairman, President and Chief Executive Officer,
Monsanto Company -- 1995
o Committees: Audit (Chairman)
o Other Directorships: Citibank, N.A. and Silicon
Graphics, Inc.
6
<PAGE>
[Photo] Chairman Emeritus
Frank A. Shrontz The Boeing Company
65 o Joined The Boeing Company -- 1958
9,850 shares o Assistant Secretary of the U.S. Air Force -- 1973
1986 to 1976
o Assistant Secretary of Defense -- 1976 to 1977
o Rejoined The Boeing Company -- 1977
o President and Director -- 1985
o Chief Executive Officer -- 1986
o Chairman and Chief Executive Officer -- 1988 to
1996
o Chairman -- 1996 to 1997
o Committees: Directors, Executive, Personnel
(Chairman) and Public Issues
o Other Directorships: Citibank, N.A., The Boeing
Company, Boise Cascade Corporation, Chevron
Corporation and Minnesota Mining and
Manufacturing Company
o Other Activities: The Business Council
[Photo] Former President
Franklin A. Thomas The Ford Foundation
62 o President, Bedford-Stuyvesant Restoration
15,288 shares Corporation -- 1967 to 1977
1970 o Private practice of law -- 1978 to 1979
o President, The Ford Foundation -- 1979 to 1996
o Committees: Directors, Executive, Personnel and
Public Issues (Chairman)
o Other Directorships: Citibank, N.A., ALCOA,
Cummins Engine Company, Inc., Lucent Technologies
and PepsiCo, Inc.
[Photo] Chairman
Edgar S. Woolard, Jr. E.I. du Pont de Nemours & Company
62 o Joined E.I. du Pont de Nemours & Company -- 1957
28,069 shares o Executive Vice President and Director -- 1983
1987 o Vice Chairman -- 1985
o President and Chief Operating Officer -- 1987
o Chairman and Chief Executive Officer -- 1989
o Chairman -- 1995
o Committees: Executive, Personnel, Subsidiaries
and Capital and Citibank, N.A. Consulting
o Other Directorships: Apple Computer, Inc. and
Zurich Holding Company of America, Inc.
o Other Activities: The Business Council
7
<PAGE>
Share Ownership of Management
Shares owned by Messrs. Reed, Collins, Rhodes, Ruding and Campbell,
including those acquired through the staff compensation plans of Citicorp and
Citibank, N.A., are described separately in this Proxy Statement.
As of January 31, 1997, the current directors and executive officers of
Citicorp as a group beneficially owned 5,030,632 shares of Citicorp common stock
(including 2,945,932 shares which the directors and executive officers have the
right to acquire within 60 days pursuant to employee benefit plans),
representing approximately 1.09% of Citicorp's outstanding shares. No single
executive officer or director beneficially owned at that date more than 0.35% of
Citicorp's outstanding stock, and all directors as a group beneficially owned at
that date less than 0.68% of Citicorp's outstanding stock.
- --------------------------------------------------------------------------------
Section 16(a) Beneficial Ownership Reporting Compliance
Based on its review of the reports furnished to Citicorp for 1996 pursuant
to Section 16 of the Securities Exchange Act of 1934 (the 'Exchange Act'),
Citicorp believes all of the reports required to be filed under Section 16 were
filed on a timely basis.
- --------------------------------------------------------------------------------
Certain Other Share Owners
His Royal Highness Prince Alwaleed Bin Talal Bin Abdulaziz Al Saud, P.O.
Box 8653, Riyadh, 11492, Saudi Arabia is the only person known by Citicorp to
own beneficially more than five percent of any class of Citicorp's voting
securities. Prince Alwaleed's Schedule 13D under the Exchange Act as filed with
the Securities and Exchange Commission (the 'SEC'), as amended through February
5, 1996, indicates that, as of January 26, 1996, Prince Alwaleed beneficially
owned 41,114,149 shares of Citicorp common stock, which shares represent
approximately 8.90% of Citicorp's outstanding common stock as of January 31,
1997. Prince Alwaleed has sole voting and dispositive power with respect to all
of such shares.
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Board Meetings
There were 11 meetings of the Board during 1996. All directors except Mr.
Parsons attended 75% or more of the total Board and committee meetings held.
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Size of the Board
The number of directors on the Board is fixed at fourteen. 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.
- --------------------------------------------------------------------------------
Board Committees
Audit Committee. The Audit Committee supervises independent audits of
Citicorp and oversees the establishment of appropriate accounting policies for
Citicorp and Citibank, N.A. Current members are Mr. Shapiro (Chairman), Mr.
Deutch, Mr. Mark, Mr. Parsons and Ambassador Ridgway. The Audit Committee met
five times during 1996.
8
<PAGE>
The Audit Committee's principal functions include reviews of: the audit
plans, scope of audit and audit findings of both the independent auditors and
the corporation's internal corporate audit group; significant tax and legal
matters; reports on credit portfolios and processes; and internal controls.
Further, it is the responsibility of the Committee to recommend to the Board the
annual appointment of the independent auditors, to review the findings of
internal and independent auditors, financial controllers and external regulatory
agencies and to review the accounting policies used in preparing the financial
statements of Citicorp and Citibank, N.A.
Committee on Directors. The Committee on Directors recommends qualified
candidates for membership on the Boards of Directors of Citicorp and Citibank,
N.A. Current members are Mr. Reed (Chairman), Mr. Calloway, Mr. Mark, Mr.
Shrontz and Mr. Thomas. The Committee on Directors met once during 1996.
The Committee on Directors actively solicits recommendations for
prospective directors and recommends the approval of a candidate. The nominees
are then presented to the Board, which proposes the slate of directors to be
submitted to the stockholders at the Annual Meeting. In addition, the Committee
is charged with keeping current with and recommending changes in directors'
compensation.
Personnel Committee. The Personnel Committee oversees employee policies and
programs of Citicorp and Citibank, N.A. Current members are Mr. Shrontz
(Chairman), Mr. Calloway, Mr. Derr, Mr. Thomas and Mr. Woolard. The Personnel
Committee met six times during 1996.
The Personnel Committee reviews and approves compensation policy and other
personnel-related programs to maintain an environment at Citicorp and Citibank,
N.A. 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
has a Committee on Subsidiaries and Capital, an Executive Committee and a Public
Issues Committee. Their functions and members are described in Citicorp's 1996
Annual Report.
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Board Compensation
Directors of Citicorp who are not officers of Citicorp or Citibank, N.A.
received an annual retainer of $40,000 for their services in 1996, of which
$10,000 is deferred under Citicorp's Directors' Deferred Compensation Plan
described below and is payable in Citicorp common stock upon a director's
retirement. In addition, outside directors received a fee of $950 for each
Board, committee or other 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 and the Chairman of the Public Issues Committee
received a stipend of $10,000.
Outside directors of Citicorp who served on the Citibank, N.A. Board of
Directors received an annual retainer of $10,000 for those services in 1996.
Citicorp directors who did not serve on the Citibank, N.A. Board of Directors
served on the Consulting Committee to the Citibank, N.A. Board of Directors; and
of these, the outside directors on the Consulting Committee received an annual
retainer of $10,000 for those services in 1996. In addition, each outside
director and each outside member of the Consulting Committee received a fee of
$950 for each meeting of the Citibank, N.A. Board of Directors attended. Outside
members of the Audit Committee of the Citibank, N.A. Board of Directors received
a fee of $950 for each meeting of that committee attended. In lieu of committee
meeting fees, the
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Chairman of the Audit Committee of the Citibank, N.A. Board of Directors
received a stipend of $10,000. Those directors who are officers of Citicorp or
Citibank, N.A. received no additional compensation for their services on the
Board or the Citibank, N.A. 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, N.A. Savings Incentive Plan (the 'Savings
Incentive Plan'), a plan available to all regular United States employees of
Citibank, N.A. 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 Citicorp common stock. Payments of deferred compensation credited to
investment accounts which mirror funds other than Fund B will be in cash.
10
<PAGE>
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.
<TABLE>
<CAPTION>
Name Age Position and Office Held and Date from Which Held
- ---------------------------- ----- ----------------------------------------------------------
<S> <C> <C>
Roberta J. Arena............ 48 Executive Vice President, Bankcards Europe and North
America -- 1994
William I. Campbell......... 52 Executive Vice President, Citibanking Worldwide Consumer
Bank -- 1996
Alvaro A.C. de Souza........ 48 Executive Vice President, Private Bank -- 1996
Edward D. Horowitz.......... 49 Executive Vice President, Advanced Development: New
Products and Services -- 1997
Thomas E. Jones............. 58 Executive Vice President and a Principal Financial
Officer -- 1990
Charles E. Long............. 56 Executive Vice President and Secretary -- 1987
Dionisio R. Martin.......... 53 Executive Vice President, Emerging Markets -- 1996
Robert A. McCormack......... 53 Executive Vice President, Global Relationship
Banking -- 1996
Victor J. Menezes........... 47 Executive Vice President, Chief Financial Officer -- 1995
Lawrence R. Phillips........ 57 Senior Human Resources Officer -- 1993
John J. Roche............... 61 Executive Vice President, Legal Affairs -- 1989
Mary Alice W. Taylor........ 47 Executive Vice President, Worldwide Operations and
Technology -- 1997
</TABLE>
The group of all executive officers consists of 16 individuals, including
Messrs. Reed, Collins, Rhodes and Ruding (who are all directors of Citicorp) and
the 12 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, N.A. for more than the last five years, except for Messrs. Campbell,
Horowitz and Phillips and Ms. Taylor. Mr. Campbell joined Citicorp in 1996 and
from July 1995 to December 1995 was a consultant to Citicorp. Prior to that time
Mr. Campbell had served in a number of executive positions with Philip Morris
Companies, Inc., most recently as Chairman of U.S. Operations. Mr. Horowitz
joined Citibank in January 1997 and, prior to that time, from 1989 was Senior
Vice President-Technology at Viacom, Inc. and Chairman and Chief Executive
Officer of Viacom Interactive Media. Mr. Phillips joined Citicorp in 1993 and,
prior to that time, had been Vice President of Human Resources for the GE
Aerospace division of General Electric Company. Ms. Taylor joined Citibank in
January 1997 and, prior to that time, was a Senior Vice President at Federal
Express Corporation. Before that, Ms. Taylor held management positions with
Shell Oil Corporation, Cook Industries and Northern Telecom, Inc.
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 1996 between Citicorp and Citibank,
N.A. on the one hand and certain directors or executive officers of Citicorp and
Citibank, N.A., 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
11
<PAGE>
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.
COMPENSATION
The tables on pages 13 through 15 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 1996 and
aggregate option exercises in 1996 for the Chairman and each of the four 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 1996, set forth below, which is
consistent with the other tables. It has been previously used by Citicorp and
is provided to insure continuity.
<TABLE>
<CAPTION>
MANAGEMENT COMPENSATION PROFILE FOR 1996
- -----------------------------------------------------------------------------------------------------------------
Citicorp Stock Salary and Restricted Stock Granted Since
Beneficially Savings Restricted Program Inception (1986)
Owned as of Incentive Annual Stock Stock -------------------------------
January 31, Plan Incentive Shares Options 1996
1997(1) Name and Position Benefits(2) Awards(3) Granted Granted(4) Shares Value(5) Dividends
- -------------- ----------------- ----------- --------- ---------- ---------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1,021,624 J.S. Reed, $1,554,667 $2,000,000 - 0 - 182,000 235,000 $27,348,125 $ 198,000
Chairman
202,047 P.J. Collins, 848,000 500,000 - 0 - 75,000 107,700 12,533,588 111,600
Vice Chairman
105,087 W.R. Rhodes, Vice 848,000 500,000 - 0 - 50,000 55,700 6,482,088 63,000
Chairman
45,196 H.O. Ruding, Vice 848,000 500,000 - 0 - 50,000 - 0 - - 0 - - 0 -
Chairman
3,000 W.I. Campbell, 686,741 650,000 - 0 - 105,000 - 0 - - 0 - - 0 -
Executive Vice
President
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------------------------------------------------------
Stock Options Granted
Citicorp Stock Since 1987
Beneficially -----------------------
Owned as of Avg. Grant
January 31, Options Price Per
1997(1) Name and Position Granted(6) Share
- ------------- ----------------- ---------- ----------
1,021,624 J.S. Reed, 1,761,000 $ 39.90
Chairman
202,047 P.J. Collins, 990,000 37.33
Vice Chairman
105,087 W.R. Rhodes, Vice 809,000 37.09
Chairman
45,196 H.O. Ruding, Vice 670,000 40.83
Chairman
3,000 W.I. Campbell, 305,000 81.48
Executive Vice
President
- ----------------------------------------------------------
(1) Does not include shares which individuals have the right to acquire
pursuant to stock option awards.
(2) Total salary and savings incentive plan benefits shown reflect amounts
earned in 1996 constituting salary and 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 constituting salary reflect any
increase in salary granted in March 1996 based on corporate and individual
performance in 1995. 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 either $50,000 or 10% of the total annual salary and
bonus reported for any individual named.
(3) Incentive awards were made in January 1997 based on 1996 performance.
Seventy-five percent of each award was paid in cash and, as described in
the Personnel Committee Report on Executive Compensation below, 25% of
each award was deferred into share units whose return is equivalent to the
return on shares of Citicorp common stock for a period of five years from
the date the award was granted, at which time the deferred award is
payable in cash unless further deferred. To the extent dividends are
declared on Citicorp's common stock, dividend equivalents will be credited
on the share units in the form of additional units, which will
automatically be reinvested.
(4) Numbers of stock options shown reflect stock options granted in January
1997 to each of the Named Executives based on corporate and individual
performance in 1996. Options granted in January 1997 under the 1988 Stock
Incentive Plan to each of the Named Executives have an exercise price of
$110.50 per share, a term of ten years and vest three years from the date
of grant with respect to 50% of such options; the balance of the options
will vest four years from the date of grant.
(5) Total shares of restricted stock granted multiplied by the closing price
on the New York Stock Exchange composite tape on January 31, 1997
($116.375).
(6) Numbers of options shown include stock options granted in January 1997
based on corporate and individual performance in 1996.
12
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- ------------------------------------------------------------------------------------------------------------
Annual Compensation Long-Term Compensation
----------------------------------- Awards
Other -----------------------
Annual Restricted Shares All Other
Name and Compensa- Stock Underlying Compensa-
Principal Position Year Salary Bonus(1) tion(2) Awards(3) Options(4) tion(5)
- ------------------- ---- ---------- ---------- --------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
J.S. Reed, 1996 $1,466,667 $2,000,000 $ - 0 - - 0 - 182,000 $ 88,000
Chairman (Chief 1995 1,300,000 3,000,000 - 0 - - 0 - 100,000 78,000
Executive Officer) 1994 1,275,000 3,000,000 - 0 - - 0 - 250,000 76,500
P.J. Collins, 1996 800,000 500,000 - 0 - - 0 - 75,000 48,000
Vice Chairman 1995 791,667 750,000 - 0 - - 0 - 75,000 47,500
1994 750,000 475,000 - 0 - - 0 - 100,000 45,000
W.R. Rhodes, 1996 800,000 500,000 - 0 - - 0 - 50,000 48,000
Vice Chairman 1995 783,333 750,000 - 0 - - 0 - 75,000 47,000
1994 700,000 950,000 - 0 - - 0 - 100,000 42,000
H.O. Ruding, 1996 800,000 500,000 - 0 - - 0 - 50,000 48,000
Vice Chairman 1995 791,667 750,000 - 0 - - 0 - 75,000 47,500
1994 750,000 665,000 - 0 - - 0 - 100,000 45,000
W.I. Campbell, 1996 686,741 650,000 - 0 - - 0 - 105,000 - 0 -
Executive Vice 1995 - 0 - - 0 - - 0 - - 0 - 200,000 - 0 -
President(6) 1994 - 0 - - 0 - - 0 - - 0 - - 0 - - 0 -
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For 1996 and 1995, 75% of the annual incentive award to each Named
Executive was paid in cash and, as described in the Personnel Committee
Report on Executive Compensation below, 25% of such award was deferred
into share units whose return is equivalent to the return on shares of
Citicorp common stock for a period of five years from the date the award
was granted, at which time the deferred award is payable in cash unless
further deferred. To the extent dividends are declared on Citicorp's
common stock, dividend equivalents will be credited on the share units in
the form of additional units, which will automatically be reinvested.
(2) 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 either
$50,000 or 10% of the total annual salary and bonus reported for any
individual named.
(3) The number of shares and value of aggregate restricted stock holdings of
each of the Named Executives on December 31, 1996 were 110,000 and
$11,330,000 (Mr. Reed), 62,000 and $6,386,000 (Mr. Collins), and 35,000
and $3,605,000 (Mr. Rhodes). For purposes of the year-end calculation, the
value of the restricted stock is determined by multiplying the total
shares held by the closing price on the New York Stock Exchange composite
tape on December 31, 1996 ($103.00). 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 are not reflected in this table;
those shares were described in Citicorp's 1996 Proxy Statement. To the
extent dividends are declared on Citicorp's common stock, dividends will
be paid on the restricted stock holdings.
(4) All options for 1996 were granted in January 1997. Each of the Named
Executives, except Mr. Reed and Mr. Campbell, received a grant of options
covering 75,000 shares in August 1995. Mr. Reed received a grant of
options covering 100,000 shares in September 1995. Mr. Campbell received
grants of options covering a total of 200,000 shares in January 1996 in
connection with his employment by Citicorp in January 1996; those shares
are listed as 1995 options, consistent with all January grants of options.
Options for 1994 were granted in January 1995.
(5) 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.
(6) Mr. Campbell has been employed by Citicorp since January 1996. Mr.
Campbell was a consultant to Citicorp from July 1995 to December 1995 and
received fees from Citicorp for his consulting services for that period in
an aggregate amount of $250,000. Mr. Campbell received grants of options
covering a total of 200,000 shares in January 1996 in connection with his
employment by Citicorp in January 1996; those shares are listed as 1995
options, consistent with all January grants of options.
13
<PAGE>
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
- -------------------------------------------------------------------------------------------------------------------
Potential Realizable Value at
Assumed Annual Rates of
Individual Stock Appreciation for
Grants Option Term(3)
- -------------------------------------------------------------------------------------------------------------------
Number of Percent
Shares of Total
Underlying Options Exercise
Options Granted to Price Expiration
Name Granted(1) Employees(2) (per share) Date 5% 10%
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
J.S. Reed 182,000 2.45% $110.50 January 21, 2007 $ 12,647,700 $ 32,051,755
P.J. Collins 75,000 1.01 110.50 January 21, 2007 5,211,964 13,208,141
W.R. Rhodes 50,000 0.67 110.50 January 21, 2007 3,474,643 8,805,427
H.O. Ruding 50,000 0.67 110.50 January 21, 2007 3,474,643 8,805,427
W.I. Campbell 105,000 1.41 110.50 January 21, 2007 7,296,750 18,491,397
All Stockholders(4) N/A N/A N/A N/A 30,005,413,446 76,039,608,872
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Numbers of shares underlying options shown reflect stock options granted
in January 1997 to each of the Named Executives based on corporate and
individual performance in 1996. Options granted in January 1997 to each of
the Named Executives have a term of ten years and vest three years from
the date of grant with respect to 50% of such options; the balance of the
options will vest four years from the date of grant. Mr. Campbell received
additional grants of options covering a total of 200,000 shares in January
1996 in connection with his employment by Citicorp. Options granted with
respect to 100,000 of such shares are identical to the January 1997 option
grants, except that the exercise price is $66.25 per share. Options
granted in January 1996 to Mr. Campbell with respect to an additional
100,000 shares have an exercise price of $66.25 per share, a term of five
years and vested with respect to 50% of such options when the market price
of Citicorp common stock reached $100 per share and remained at or above
that level for 20 trading days in a consecutive 30-trading-day period; the
balance of the options will vest when the stock price reaches $115 per
share and remains at or above that level for 20 trading days in a
consecutive 30-trading-day period.
(2) Total options granted to employees are options granted to employees in
January 1997 based on corporate and individual performance in 1996.
(3) 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. The terms of such options are described
above. 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.
(4) The potential realizable gain to all stockholders (based on 463,217,018
shares outstanding as of December 31, 1996, with a market price per share
of $103.00) at 5% and 10% assumed annual rates over a term of ten years,
commencing on January 1, 1997, is provided as a comparison to the
potential gain realizable by the Named Executives at the same assumed
annual rates of stock appreciation.
14
<PAGE>
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUE
- --------------------------------------------------------------------------------------------------
Number of Shares
Underlying Unexercised Value of Unexercised
Shares Options In-the-Money Options
Acquired at Fiscal Year-End(3) at Fiscal Year-End(3)
on Value -------------------------- --------------------------
Name Exercise(1) Realized(2) Exercisable Unexercisable Exercisable Unexercisable
- ------------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
J.S. Reed 679,000 $40,054,875 600,000 482,000 $40,068,750 $17,081,250
P.J. Collins 107,131 5,938,895 595,369 212,500 44,443,880 7,604,688
W.R. Rhodes 375,466 22,141,449 228,334 187,500 14,495,574 7,604,688
H.O. Ruding 182,453 8,709,020 244,287 187,500 16,256,189 7,604,688
W.I. Campbell -0- -0- 50,000 255,000 1,837,500 5,512,500
- --------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes all exercises during calendar year 1996.
(2) The value realized equals the market value of the common stock acquired on
the date of exercise minus the exercise price. With respect to options
exercised by Mr. Reed, Mr. Reed has retained ownership of all shares
acquired on exercise.
(3) Included in fiscal year-end figures are shares underlying options granted
in January 1997 based on corporate and individual performance in 1996.
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 number of shares
reflected in the table is the market or book value (using whichever value
would produce the greatest number of shares) of common stock on December
31, 1996. 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, 1996 minus the related market or book value
exercise price. The market value of common stock on the New York Stock
Exchange composite tape as of December 31, 1996 was $103.00 per share and
the book value of common stock on such date was $40.25 per share. All
options exercised in and granted for 1996 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, 1996, 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)
- --------------------------------------------------------------------------------
Years of Service
----------------------------------------------------------
Remuneration 15 20 25 30 35
- --------------------------------------------------------------------------------
$ 200,000......... $ 60,000 $ 80,000 $ 100,000 $ 120,000 $ 127,500
500,000......... 150,000 200,000 250,000 300,000 318,750
1,000,000......... 300,000 400,000 500,000 600,000 637,500
2,000,000......... 600,000 800,000 1,000,000 1,200,000 1,275,000
3,000,000......... 900,000 1,200,000 1,500,000 1,800,000 1,912,500
6,000,000......... 1,800,000 2,400,000 3,000,000 3,600,000 3,825,000
- --------------------------------------------------------------------------------
(1) This table reflects a straight-life annuity benefit.
The years of credited service under the Retirement Plan as of December 31,
1996 for Messrs. Reed, Campbell, Collins, Rhodes and Ruding were approximately
31, 11, 35, 35 and 15, respectively. Covered compensation under the Retirement
Plan and supplemental
15
<PAGE>
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 years of the last ten years of
employment. Messrs. Reed, Campbell, Collins, Rhodes and Ruding will be credited
with approximately 35, 23, 35, 35 and 22 years of service, respectively, upon
normal retirement at age 65. Each of Mr. Ruding and Mr. Campbell was credited
with 10 years of service at the beginning of his employment.
- -------------------------------------------------------------------------------
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:
o salary;
o an annual incentive award; and
o long-term incentive awards, typically in the form of stock options.
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 for each executive are set every three years and
reviewed annually. These targets are based on the level of responsibility, scope
and complexity of the executive's position relative to other senior management
positions internally and at competitive frame companies. With respect to the top
five named executive officers, target pay levels are established in accordance
with the plan described in the next paragraph. The external comparison is based
on the results of an annual report prepared by an independent compensation
consulting firm. This report (which gathered information on 1995 compensation)
surveys the compensation levels of executive officers at a group of nineteen
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 nineteen 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), are considered by the Personnel Committee to be similar to Citicorp
in complexity and, therefore, constitute a relevant competitive frame for
purposes of compensation decisions. Total compensation (including
16
<PAGE>
salary, annual incentive awards and long-term incentive awards) is targeted at
the 75th percentile of this competitive frame when Citicorp has strong
performance, as measured against its plan, historical results and the
performance of peer companies. However, in line with the corporation's pay for
performance orientation, total compensation levels may exceed the 75th
percentile when results are exceptionally strong or fall below the targeted
level if performance is below plan or peer companies.
Annual incentive awards to the Chairman and the next four most highly paid
executives referred to as 'covered employees' under Section 162(m) of the
Internal Revenue Code (the 'Code') were granted under the Citicorp 1994 Annual
Incentive Plan ('AIP') which was approved by stockholders at the 1994 Annual
Meeting and became effective January 1, 1994. Consistent with Code requirements,
to preserve Citicorp's deductibility of these awards, the AIP specifies that the
maximum amount payable for any year to the top five named executive officers
will be limited to 0.5% of Citicorp's annual net income (before extraordinary
items and the cumulative effect of accounting changes), plus the amount (not to
exceed $3,000,000) that was available to pay awards under the AIP for prior
years, but was not so paid. Further, under the AIP the Personnel Committee is
required to set annually the maximum awards payable to each named executive. The
maximums are expressed as a percentage of the total amount available in a given
year, with the AIP specifying that the maximum any participating executive may
receive is 35% of the fund. For 1996, maximum awards were set at 35% and 16% of
the fund for the Chairman and the next four participating executives, Messrs.
Campbell, Collins, Rhodes and Ruding, respectively. As the Code only allows the
Personnel Committee the discretion to reduce the awards granted under this plan
from these maximum targets, the targets are set well above the 75th percentile
to ensure that, consistent with the corporation's compensation philosophy, when
performance warrants, the Personnel Committee has the ability to appropriately
reward participating executives.
Salary and annual incentive awards reward executives for their current
performance and contributions. Stock options are provided to reward senior
management for taking actions which will contribute to the corporation's
long-term growth and success, and to link their interests to those of Citicorp's
stockholders. Restricted stock grants are provided on a selective basis to
recruit or retain executives in connection with the corporation's attainment of
its long-term goals. To further focus senior executives on the importance of
balancing short- and long-term performance, 25% of each senior executive's
annual incentive award is deferred into share units whose return is equivalent
to the return on shares of Citicorp common stock for a period of five years from
the date the award is granted, at which time the deferred award is payable in
cash unless further deferred. Dividend equivalents are credited on these units
during the deferral period in the form of additional units, which are
automatically reinvested.
The determination of salary increases, annual incentive awards and
long-term incentive awards is reviewed annually based on the performance of
Citicorp (and, in the case of executives responsible for a particular business,
that business' results). Also factored into these decisions is each executive's
individual performance and contribution to Citicorp's future positioning.
Although the components of compensation (salary, annual incentive awards and
long-term incentive awards) are reviewed separately, compensation decisions are
made based on a review of the total compensation level awarded relative to the
targeted compensation structure established by the Personnel Committee. For
purposes of evaluating total compensation and establishing targeted and actual
long-term incentive grant levels,
17
<PAGE>
the value of option grants are set periodically based on one-third of the fair
market value of the stock, although the Personnel Committee believes that
there is no truly satisfactory method for determining the value of option
grants. 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.
For each year since 1973, the Chairman and senior management have provided
the Personnel Committee and the Board of Directors a written Corporate
Performance Summary detailing in a textured and comprehensive way the annual
results of Citicorp and each of its principal businesses. The report starts with
an overview; outlines 1996 financial results (revenue, expense, margin, credit,
taxes) versus plan and previous years; compares Citicorp's results (from the
perspectives of shareholder return, market value to book value and return on
equity) with peer financial and select global enterprises on a one-year and
five-year basis; and discusses customer and franchise performance, and risk,
strategic cost and people management. The companies against which results are
compared are the same as the competitive frame companies used by the Personnel
Committee to determine market compensation levels.
In determining the level of annual incentive awards to be paid to senior
executives for 1996 results, the Personnel Committee reviewed the Corporate
Performance Summary and evaluated 1996 performance versus plan and the previous
year. The Committee also reviewed 1996 results in the context of the 1995-2005
Business Directions Statement which calls for the strategic repositioning of the
corporation to a global growth and performance company over this ten-year
period. This transformation is being accomplished by focusing on the 'basics'
and running the business for performance with specific focus on the following
five dimensions: financial and customer/franchise performance, and strategic
cost, risk and people management.
Based on an evaluation of the above, it was the Personnel Committee's view
that Citicorp's 1996 results, as reflected in the Corporate Performance Summary,
represented strong performance. The Committee noted the following factors in
support of its conclusion:
o Net income of $3.8 billion, on plan and up $324 million, or 9%, from
1995;
o Sustained balance sheet strength, with an increase in free capital
($3.0 billion, up 71% over 1995), maintenance of Tier 1 capital
slightly above the target ratio of 8.0-8.3% ($19.8 billion), and
continued improvement in debt ratings, while repurchasing $3.1
billion of common stock;
o Return on common equity of 20.4%, above the long-term goal of 18%
per year;
o Continued superior return to Citicorp common stockholders (price of
Citicorp common stock appreciated 53% during 1996), relative to
other banks and the S&P 500 Index;
o Strengthening of Citicorp's franchise position across all major
business segments;
o Focused, strong improvement in risk management; and
o Continued progress in identifying talent and developing top
performers.
Based on overall 1996 corporate performance, the Committee determined that
annual incentive awards should be at a level which, when combined with salary,
would position executive officers' direct compensation (base salary and annual
incentive award) at or near
18
<PAGE>
the 75th percentile of the competitive frame. Awards to the top five named
executives were below the maximum awards available to each under the AIP.
In January 1997, the Personnel Committee granted stock options to
executive officers based on both Citicorp's and their individual performance in
1996. In determining the size of each participating executive's grant, the
Committee assessed corporate and individual performance according to the same
standards used to determine their annual incentive awards, with grant levels
varying accordingly. The options granted will expire ten years from the date of
grant, with 50% vesting and becoming exercisable three years from the date of
grant and the remaining 50% vesting and becoming exercisable four years from the
grant date. The exercise price for each option granted was equal to the average
of the high and low trading price of Citicorp common stock on the New York Stock
Exchange for the date of grant ($110.50 per share). In addition to these option
grants, certain select executive officers (but no Named Executives) received
special restricted stock grants in January 1997 in recognition of their
individual contributions and to retain them in connection with their potential
future impact on the corporation's attainment of its long-term goals.
Based on its assessment of the Chairman's performance, his leadership in
producing sustained levels of strong performance and a review of the competitive
frame market data, the Personnel Committee increased Mr. Reed's salary in March
1996 to $1,500,000 on an annualized basis. Prior to this adjustment, Mr. Reed's
salary had remained unchanged since March 1994. In addition, the Committee
awarded Mr. Reed a 1996 annual incentive award of $2,000,000. Seventy-five
percent of this award was paid in cash and 25% was paid in share units, as
discussed above. As reviewed earlier in this report, under the AIP, the maximum
annual incentive award payable to the Chairman for 1996 was set at 35% of the
fund generated by the plan's formula. Based on Citicorp's 1996 results, this
equated to a maximum award of $6.63 million. In January 1997, Mr. Reed was
awarded ten-year options covering 182,000 shares; the terms and conditions of
this grant being consistent with the grants to all other executive officers
discussed above.
In accordance with changes made in 1993 to the Code relating to the
disallowance of a deduction for remuneration in excess of $1,000,000 to certain
executive officers, through adoption of the AIP (discussed earlier in this
report) the corporation has secured the continued deductibility of annual
incentive awards paid to these named executive officers, which includes Mr.
Reed. Under the Code, any compensation expense relating to options granted under
the corporation's stock option plans prior to Citicorp's 1997 Annual Meeting is
also deductible. If shareholders approve the 1997 Stock Incentive Plan described
below at the 1997 Annual Meeting, any compensation expense relating to options
granted under that plan will also be deductible. The deductibility of the cost
of restricted stock grants to officers to which Section 162(m) of the Code is
applicable depends on the circumstances at the time the stock becomes vested.
Amounts paid as salary to Mr. Reed in excess of the $1,000,000 cap will not be
deductible.
By the Personnel Committee
Frank A. Shrontz, Chairman Franklin A. Thomas
D. Wayne Calloway Edgar S. Woolard, Jr.
Kenneth T. Derr
19
<PAGE>
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
[The following table also appeared as a line graph in the printed material.]
-------------------------------------------------------------------
1991 1992 1993 1994 1995 1996
-------------------------------------------------------------------
Citicorp $100 $214 $355 $403 $671 $1050
S&P 500 100 108 119 121 166 204
BoD Index(1) 100 103 114 116 174 264
KBW 50(2) 100 127 134 128 204 289
-------------------------------------------------------------------
(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, The Chase Manhattan 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.
(2) The Keefe, Bruyette & Woods 50 Bank Index is designed to measure the stock
price performance of the nation's largest banks.
20
<PAGE>
- --------------------------------------------------------------------------------
II. STOCKHOLDER APPROVAL OF NEW STOCK INCENTIVE PLAN
Citicorp seeks stockholder approval of the 1997 Stock Incentive Plan (the
'1997 Plan') which has been approved by the Board of Directors to replace the
1988 Stock Incentive Plan (the '1988 Plan') that expires on December 31, 1997.
If approved by the stockholders, the 1997 Plan will be effective on April 9,
1997 and will expire on December 31, 2006. The 1997 Plan authorizes the
Personnel Committee, or such other committee as is appointed by the Board to
administer the 1997 Plan (the 'Committee'), to grant awards to officers or other
employees of Citicorp or entities in which Citicorp has a controlling or
significant equity interest. As of December 31, 1996, there were approximately
89,400 employees of Citicorp and its affiliates.
The purposes of the 1997 Plan are to help align employees' long-term
financial interests with those of shareholders, reinforce a performance-oriented
culture and strategy, reward employees for increasing Citicorp's stock price
over time and attract, retain and motivate employees. Outside directors are not
eligible to receive awards.
Compensation to senior management employees under both the 1988 Plan and
the 1997 Plan is structured to emphasize long-term incentives. A program change
was implemented under the 1988 Plan two years ago pursuant to which option
grants were made to a broader group of officers. This program change
significantly increased eligibility and participation. This redistribution of
option grants engages more employees in Citicorp's long-term success and has
been accomplished while the number of shares granted has remained unchanged.
Under this revised program, participation is not automatic but must be earned
annually by demonstrating strong performance and potential.
The 1997 Plan authorizes the Committee to grant any of the following
awards to eligible employees: options to purchase common stock; stock
appreciation rights; other stock awards; and stock payments, any of which may be
granted singly, in tandem or in combination as the Committee may determine.
Shares of stock subject to awards are shares of common stock, par value $1.00
per share, of Citicorp. If the 1997 Plan had been in effect in 1996, the awards
granted under the 1997 Plan to eligible employees would not have been materially
different from the awards granted under the 1988 Plan.
A stock option represents the right to purchase a specified number of
shares at a stated exercise price for a specified time. The 1997 Plan permits
the grant of options to purchase shares at not less than 100% of the fair market
value of the shares on the date of grant. The 1988 Plan permitted grants at not
less than 50% of the same amount. The 1988 Plan permitted, and the 1997 Plan
permits, the grant of stock options in the form of nonqualified stock options as
well as incentive stock options as described in Section 422 of the Code.
The exercise period for any stock option granted will be determined by the
Committee at the time of grant, but will not be longer than 10 years from the
date of grant. Upon exercise, the option exercise price may be paid in cash, by
tendering shares of Citicorp stock owned by the optionee, by authorizing
Citicorp or its affiliates to sell the shares subject to the option and
assigning to Citicorp a sufficient amount of the sale proceeds to pay the option
price, or any combination of such methods. A stock appreciation right (an 'SAR')
represents a right to receive a payment in cash, shares or a combination of both
equal to the excess of the fair market value of a specified number of shares on
the date the SAR is exercised over an amount which is no less than the fair
market value of the shares on the date of grant, unless such award is granted
retroactively in substitution for an existing stock
21
<PAGE>
option. SARs generally are granted only to non-U.S. participants to whom stock
options cannot be issued due to foreign legal restrictions or adverse tax
consequences.
Stock awards (including restricted stock) and stock payments may also be
granted pursuant to the 1997 Plan. Stock awards may be made in shares of common
stock or denominated in units equivalent in value to shares or may otherwise be
based on or related to shares of common stock. All or part of any stock award
may be subject to conditions and restrictions established by the Committee,
which may include continuous service and/or achievement of performance goals.
The performance criteria that may be used by the Committee in granting awards
contingent on performance goals for officers to which Section 162(m) of the Code
is applicable consist of stock price, earnings level and return on equity. The
Committee may select one criterion or multiple criteria for measuring
performance and the measurement may be based on the performance of Citicorp
and/or on comparative performance with other companies. The Committee may grant
awards under the 1997 Plan which are not based on the performance criteria
specified above, in which case the compensation paid under such awards to
officers to which Section 162(m) of the Code is applicable may not be
deductible. In all cases, the minimum vesting requirement for all or a portion
of any stock award will be one year. Stock payments may be made pursuant to the
1997 Plan to compensate individuals for amounts otherwise payable in cash, in
which case the shares used for such payment will not be applied to the share
limitations of the 1997 Plan and no minimum vesting period will apply.
Stock options remain Citicorp's primary long-term incentive vehicle and
act as an important tool which can be used to support the strong performance
that has been seen over the past years. This is evidenced by the fact that under
the 1988 Plan, over 96% of shares granted to date were stock options. In recent
years, restricted stock grants have only been used for retention and recruiting
purposes.
Neither the grant of stock options under the 1997 Plan nor the exercise of
an incentive stock option results in taxable income to the grantee under the
Code. The exercise of a nonqualified stock option results in taxable income to
the grantee equal to the excess, if any, of (i) the fair market value of the
stock on the date it is purchased over (ii) the price at which it is purchased,
at such time as the stock is purchased. Citicorp or any of its participating
related corporations may claim an income tax deduction equal to the amount on
which the grantee of a nonqualified stock option is taxed as described in the
preceding sentence.
Stock options, stock appreciation rights, other stock awards and stock
payments may be granted to employees of other companies who become employees of
Citicorp or an affiliate as a result of a merger, consolidation or acquisition
in substitution for stock options or other stock denominated awards held by such
employees in such other companies.
The 1997 Plan provides that in any calendar year up to 1.5% of Citicorp's
common shares outstanding, common share equivalents and treasury shares as
reported in Citicorp's Annual Report and Form 10-K for the preceding year may be
subject to awards under the 1997 Plan. The 1988 Plan permitted 2% of such shares
to be subject to awards. Any unused shares may be carried forward for awards in
future years. Overall, no more than 4,500,000 shares represented by awards may
be granted to any single individual over the life of the 1997 Plan. Initially,
25,000,000 shares of common stock will be reserved for issuance under the 1997
Plan. These shares may be either authorized but unissued shares or treasury
shares. All shares of common stock subject to the 1997 Plan and covered by
outstanding awards will be proportionately adjusted, subject to the Committee's
discretion, for any future stock splits or consolidations or other corporate
transactions.
22
<PAGE>
The provisions governing the disposition of specific awards granted under
the 1997 Plan in the event of the retirement, disability, death or other
termination of employment of the participant will be determined by the Committee
at the time such awards are granted. Awards granted under the 1997 Plan will not
be transferable or assignable other than by will or the laws of descent and
distribution.
Prior to a change of control of Citicorp, the Committee may alter, amend,
suspend or discontinue the 1997 Plan or any agreements granted thereunder to the
extent permitted by law. However, approval of a majority of the stockholders is
necessary to increase materially the number of shares available for awards or to
cancel any outstanding stock options or stock appreciation rights for the
purpose of replacing or regranting such awards with an exercise price that is
less than the original exercise price.
In the event of a change of control of Citicorp or an affiliate, the
Committee may take action to accelerate the time period for exercising or
realizing awards, to provide for the purchase of awards for an amount equal to
the amount that could have been obtained upon the exercise or realization of
rights had the awards been currently exercisable or payable, to make adjustments
to the awards to reflect the change of control, or to cause outstanding awards
to be assumed, or new rights substituted therefore, by the corporation surviving
such change.
A copy of the complete text of the 1997 Plan may be obtained by writing to
the Office of the Secretary, Citicorp, 399 Park Avenue, New York, New York
10043.
Approval of the 1997 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.
- ------------------------------------------------------------------------------
III. 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 LLP ( 'KPMG'), certified public accountants,
as auditors of Citicorp for the year 1997. 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, N.A., who reviewed the
professional competence of the firm and its audit program. As independent
auditors of Citicorp in 1997, KPMG would also audit Citibank, N.A. KPMG has
served as the independent auditor for Citibank, N.A. 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 KPMG partner in charge of
Citicorp's assignment to be rotated from time to time, rather than changing
accounting firms at intervals.
The firm provides various audit services to Citicorp and its subsidiaries
on a worldwide basis. Fees for such audit services during 1996 amounted to
approximately $18,900,000.
Representatives of KPMG 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.
23
<PAGE>
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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.
- -------------------------------------------------------------------------------
IV. STOCKHOLDER PROPOSAL
John J. Gilbert, 29 East 64th Street, New York, NY 10021, who holds 200
shares of common stock, and Margaret R. and/or John J. Gilbert, executors U/W of
Lewis D. Gilbert for 200 shares, have advised Citicorp that it is their
intention to present the following resolution for consideration and action by
stockholders at the 1997 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 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%, 5,825 owners of 83,882,143 shares,
were cast in favor of this proposal. The vote against included 5,590 unmarked
proxies.
A California law provides that all state pension holdings and 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. In many cases
companies get around it by forming holding companies without cumulative voting.
Banking authorities have the right to question the capability of directors to be
on banking boards. In many cases authorities come in after and say the director
or directors were not qualified. We were delighted to see that the SEC has
finally taken action to prevent bad directors from being on the boards of public
companies. The SEC should have hearings to prevent such persons becoming
directors before they harm investors.
We think cumulative voting is the answer to find new directors for various
committees. Some recommendations have been made to carry out the CERES 10
points. The 11th, in our opinion, should be having cumulative voting and ending
staggered boards.
When Alaska became a state it took away cumulative voting over our
objections. The Valdez oil spill might have been prevented if environmental
directors were elected through cumulative voting. The huge derivative losses
might have also been prevented with cumulative voting.
Many successful corporations have cumulative voting. Example, Pennzoil
defeated Texaco in that famous case. Ingersoll-Rand, also having cumulative
voting, won two awards. FORTUNE magazine ranked it second in its industry as
'America's Most Admired Corporations' and the WALL STREET TRANSCRIPT noted 'on
almost any criteria used to evaluate management, Ingersoll-Rand excels.' In 1994
and 1995 they raised their dividend.
24
<PAGE>
Lockheed-Martin, as well as VWR Corporation now have a provision that if
anyone has 40% of the shares, cumulative voting applies. It applies at the
latter company.
In 1995 American Premier adopted cumulative voting. Allegheny Power System
tried to take away cumulative voting, as well as put in a stagger system, and
stockholders defeated it, showing stockholders are interested in their rights.
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
Beginning with the 1974 Annual Meeting, this proposal has been rejected
fifteen times by Citicorp's stockholders.
Under Citicorp's present method of democratic elections, our directors
exercise free judgment and their loyalty to all stockholders is clear.
Cumulative voting, however, would enable a small faction of stockholders to band
together and pool their voting power in order to elect one or more candidates
who will advocate the faction's special viewpoints, even if those viewpoints
diverge from the interests of all other stockholders. Consequently, directors
elected as a result of cumulative voting, beholden to those who elected them,
could inject an adversarial element to the Board's deliberative process. Indeed,
partisan advocacy, rather than constructive, objective analysis, could prevail
in our boardroom, hampering the Board's ability to make sound and timely
decisions beneficial to all stockholders.
Citicorp firmly believes that the selection of directors should be
predicated on their ability and willingness to serve all the stockholders of
Citicorp. In our opinion, therefore, a vote against cumulative voting is in the
best interests of Citicorp and its stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
- --------------------------------------------------------------------------------
V. STOCKHOLDER PROPOSAL
Evelyn Y. Davis, Watergate Office Building, 2600 Virginia Ave. N.W., Suite
215, Washington, DC 20037, who is the owner of 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 1997 Annual
Meeting:
RESOLVED, that the stockholders of Citicorp recommend that the Board of
Directors take the necessary steps to appoint a President and Chief Operating
Officer.
REASONS: We do have a Chairman and CEO and several Vice-Chairmen.
A Company of the size and stature of Citicorp ought to have a defined
Number Two man as well as a number one man. We do have a Chairman and CEO but
now is the time for the Board to appoint number two. Waiting any longer is in
our opinion not in the best interest of the Corporation and its stockholders.
Uncertainty about succession should be cleared up now.
Last year owners of 11,360,052 shares, representing 3.5% of shares voted,
voted for this proposal.
If you AGREE, please mark your proxy FOR this proposal.
25
<PAGE>
MANAGEMENT'S COMMENT
Citicorp believes that the concerns expressed in this proposal are
unfounded at this time. The Board does review succession planning regularly.
Citicorp's current senior management structure, comprising the Chairman, Vice
Chairmen, and Executive Vice Presidents, serves the dual purpose of maximizing
oversight and flexibility among Citicorp's principal businesses and affords the
Board of Directors ample opportunities to evaluate potential successors based on
their performance in senior level positions.
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 $19,000 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 holders of common stock of record at the close of business (5:00
P.M., Eastern time) on February 10, 1997, 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 1997
Stock Incentive Plan, (iii) for the approval of the selection of independent
auditors and (iv) 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, 1996 may be obtained without charge by writing to Corporate Affairs
Distribution, Citicorp, 850 Third Avenue, 13th Floor, New York, NY 10043,
Attention: Jeffrey Barnard, or by telephone request to (212) 559-0233.
Stockholders may receive a report on all proposals at the 1997 Annual
Meeting without charge by writing to the Office of the Assistant Secretary,
Citicorp, 399 Park Avenue, New York, NY 10043.
26
<PAGE>
- --------------------------------------------------------------------------------
SUBMISSION OF STOCKHOLDER PROPOSALS FOR INCLUSION IN CITICORP'S 1998 PROXY
STATEMENT
In accordance with Rule 14a-8 of the SEC under the Exchange Act, Citicorp
will accept proposals of stockholders for possible inclusion in Citicorp's 1998
Proxy Statement through the close of business on October 28, 1997.
By order of the Board of Directors,
/s/ CHARLES E. LONG
CHARLES E. LONG
Executive Vice President and Secretary
27
<PAGE>
[Logo]
Printed on recycled paper.
<PAGE>
Appendix
Telephone Proxy Voting Service
Now you can vote your proxy right over
the telephone. It's fast, convenient,
and your proxy is immediately confirmed
and posted.
Simply dial 1-800-690-6903 and follow
the 4 east steps below. If you prefer,
you can send in your proxy vote by
filling in the proxy form below.
Just follow these 4 easy steps:
- --------------------------------------------------------------------------------
1. Read the accompanying Proxy Statement and the proxy form below.
2. Phone the toll free number 1-800-690-6903.
3. Once you've been connected, enter your Control Number printed below.
4. Then follow the simple instructions the Vote voice will provide you.
- --------------------------------------------------------------------------------
Registered stockholders who plan to attend the meeting 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. A recent brokerage statement or a letter from the broker or bank
are examples of proof of ownership.
Note: Please indicate how your stock is to be voted. UNLESS YOU OTHERWISE
INDICATE, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF DIRECTORS, "FOR" THE
PROPOSAL ON THE INDEPENDENT AUDITORS, "FOR" THE PROPOSAL ON THE STOCK INCENTIVE
PLAN, AND "AGAINST" THE STOCKHOLDER PROPOSALS. Please mark all choices like this
[X].
1997 Proxy
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSALS REGARDING:
- -------------------------------------------------------------------------------------------------------------------------------
(1) ELECTION OF DIRECTORS:
FOR WITHHOLD FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
ALL NOMINEES LISTED ON THE [_] AUTHORITY TO VOTE FOR ALL [_]
REVERSE SIDE (EXCEPT AS NOMINEES ON THE REVERSE SIDE
MARKED TO THE CONTRARY (2) Independent Auditors [_] [_] [_]
BELOW)
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.) (3) Stock Incentive Plan [_] [_] [_]
- -------------------------------------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE STOCKHOLDER PROPOSALS REGARDING:
FOR AGAINST ABSTAIN
--- ------- -------
(4) Cumulative Voting [_] [_] [_]
(5) Appoint a President and Chief
Operating Officer [_] [_] [_]
- -------------------------------------------------------------------------------------------------------------------------------
PLEASE CHECK THIS BOX IF YOU HAVE
INDICATED A CHANGE OF ADDRESS [_] To eliminate duplicate mailings, please check this box.
Securities and Exchange Commission, rules require that [_]
at least one account continue to receive an annual report.
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
[reverse side of proxy card]
1997 PROXY
- --------------------------------------------------------------------------------
Director Nominees:
Annual Meeting of Stockholders
- April 9, 1997, 9:00 A.M.,
James L. Knight International
Center, Ashe Auditorium, 400
S.E. Second Avenue, Miami,
Florida 33131
D.W. Calloway R.D. Parsons R.B. Shapiro The undersigned appoints P.J.
P.J. Collins J.S. Reed F.A. Shrontz Collins, J.S. Reed, and W.R.
K.T. Derr W.R. Rhodes F.A. Thomas Rhodes, or any of them,
J.M. Deutch R.L. Ridgway E.S. Woolard, Jr. proxies, each having power to
R. Mark H.O. Ruding substitute another person, to
vote all the stock of Citicorp
held of record by the
undersigned on February 10,
1997 at the Annual Meeting of
Stockholders of Citicorp, to be
held on April 9, 1997 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 ON THE INDEPENDENT
AUDITORS, "FOR" THE PROPOSAL ON
THE STOCK INCENTIVE PLAN, 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 attend. We thank
you for your interest.
THIS PROXY IS SOLICITED ON
BEHALF OF THE BOARD OF
DIRECTORS.
<PAGE>
CITICORP
1997 STOCK INCENTIVE PLAN
1. PURPOSE
The purposes of the Citicorp 1997 Stock Incentive Plan (the "Plan") are to (i)
help align employees' long-term financial interests with those of shareholders;
(ii) reinforce a performance-oriented culture/strategy; (iii) reward employees
for increasing Citicorp stock price over time; and (iv) attract, retain and
motivate employees.
2. EFFECTIVE DATE AND DURATION OF PLAN
The Plan shall become effective April 9, 1997 subject to its approval by the
stockholders of Citicorp. Unless previously terminated by Citicorp's Board of
Directors (the "Board"), the Plan shall expire at the close of business on
December 31, 2006.
3. DEFINITIONS
(a) "1934 Act" means the Securities and Exchange Act of 1934, as amended,
including the rules and regulations promulgated thereunder.
(b) "Award" means a stock option (including an ISO), SAR, stock Award, any
other award made pursuant to the terms of the Plan, or any combination of
them, as described in and granted under the Plan.
(c) "Change of Control" is defined in Section 11(b).
(d) "Code" means the Internal Revenue Code of 1986, as amended, including any
rules and regulations promulgated thereunder.
(e) "Committee" means the Personnel Committee of the Board or such other
committee as is appointed by the Board to administer the Plan .
(f) "Company" means any entity that is directly or indirectly controlled by
Citicorp Companyor any entity, including an acquired entity, in which
Citicorp has a significant equity interest, as determined by the
Committee.
(g) "Employee" means an employee of a Company.
(h) "Fair Market Value" means the average of the highest and the lowest quoted
selling prices of the Shares on the New York Stock Exchange Composite Tape
on the valuation date, or, if there were no sales on the valuation date,
the average of the highest and lowest quoted selling prices on the New
York Stock Exchange Composite Tape on the first trading day before and the
first trading day after the valuation date, in each case rounded up to the
nearest one-eighth.
(i) "ISO" means an incentive stock option as defined in Section 422 of the
Code.
(j) "Participant" means an Employee who has been granted an Award under the
Plan.
(k) "Plan Year" means a twelve-month period beginning with January 1 of each
year.
(l) "Prior Plan" means the Citicorp 1988 Stock Incentive Plan.
(m) "SAR" means a stock appreciation right.
(n) "Shares" means the common stock of Citicorp, par value $1.00 per share.
(o) "Treasury Shares" means authorized and issued, but not outstanding Shares.
4. PLAN ADMINISTRATION
(a) The Committee -- The Committee shall be responsible for administering the
Plan. If considered
1
<PAGE>
appropriate by the Board in light of applicable laws, rules, or
regulations, the Committee shall be comprised of two or more non-employee
members of the Board each of whom is a "Non-Employee Director" within the
meaning of Rule 16b-3 under the 1934 Act and an "outside director" within
the meaning of Section 162(m) of the Code.
(b) Committee Authority -- The Committee may at any time prior to a C hange of
C ontrol alter, amend, suspend or discontinue the Plan or any or all
agreements granted under the Plan to the extent permitted by law. The
Committee shall have full and exclusive power to interpret the Plan and to
adopt such rules, regulations, and guidelines for carrying out the Plan as
it may deem necessary or proper, all of which power shall be executed in
the best interests of Citicorp and in keeping with the provisions and
objectives of the Plan. This power includes, but is not limited to (i)
selecting A ward recipients and the extent of their participation; (ii)
establishing all A ward terms and conditions; (iii) adopting procedures
and regulations governing A wards; and (iv) making all other
determinations necessary or advisable for the administration of the Plan.
All decisions made by the Committee shall be final, binding and conclusive
on all persons interested herein.
The Committee may delegate to one or more executive officers or directors
of Citicorp the authority to carry out some or all of its responsibilities
provided that the Committee may not delegate its authority and powers in
any way which would be inconsistent with the requirements of the Code or
the 1934 Act. The Committee may at any time rescind the authority
delegated to any such executive officer or director.
Subject to Section 7(b), in no event shall the Committee have the right to
(i) cancel outstanding stock options or SARs for the purpose of replacing
or regranting such options or SARs with an exercise price that is less
than the original exercise price of the option or SAR, or (ii) materially
increase the number of shares available for issuance in accordance with
Section 6 of the Plan (except in accordance with Section 6(c)) without
shareholder approval.
No member of the Committee shall be liable for any action or determination
with respect to the Plan, and the members shall be entitled to
indemnification and reimbursement in the manner provided in Citicorp's
Restated Certificate of Incorporation, as amended. In the performance of
its functions under the Plan, the Committee shall be entitled to rely upon
information and advice furnished by the Company's officers, accountants,
counsel and any other party the Committee deems necessary, and no member
of the Committee shall be liable for any action taken or not taken in
reliance upon any such advice.
5. PARTICIPATION
The individuals who shall be eligible to receive Awards under the Plan shall be
officers or other selected employees of Citicorp or any Company as the Committee
shall approve from time to time.
In the event of a change in a Participant's duties and responsibilities, or a
transfer of the Participant to a different position, the Committee may terminate
any Award granted to such Participant or reduce the number of Shares subject
thereto commensurate with the transfer or change in responsibility, as
determined by the Committee in its discretion.
6. AVAILABLE SHARES OF COMMON STOCK
(a) Share Limitations - Subject to Section 6(a)(ii), any adjustment in
accordance with the provisions of Section 6(c), and except for shares
granted under Section 7(d) of the Plan,
(i) the aggregate number of Shares as to which Awards may be granted in
any Plan Year shall not exceed 1.5% of the total of the common
shares outstanding, common share equivalents and Treasury Shares as
reported in the Annual Report and Form 10-K of Citicorp for the
fiscal year ending immediately prior to such Plan Year; provided
however that for the 1997 Plan Year the number of Shares for which
Awards may be granted under this Plan shall not exceed the amount
available under the Prior Plan for 1997 after giving affect to any
grants of Awards under the Prior Plan in 1997.
(ii) any unused portion of the limit for a Plan Year shall be carried
forward and shall be available for Awards in succeeding Plan Years
without regard to Section 6(a)(i). In addition, the number of
2
<PAGE>
Shares available pursuant to Section 6(a)(i) shall be increased by
any Shares represented by Awards or portions of Awards made under
the Plan or the Prior Plan which are forfeited, expire or are
canceled or settled without issuance; and any Shares available for
grants under the Prior Plan which have not been committed for
issuance under grants made under the Prior Plan.
(iii) the aggregate number of Shares that may be represented by Awards
granted to any single individual under the Plan under Sections 7(a),
7(b) and 7(c) of the Plan shall not exceed 4,500,000.
(iv) the aggregate number of Shares that may be covered by Awards made in
the form of ISOs shall not exceed 50,000,000.
(b) Shares not applied to limitations - The following will not be applied to
the share limitations of Section 6(a)(i) above: (i) dividends or dividend
equivalents paid in cash in connection with outstanding A wards, (ii)
stock denominated A wards which by their terms may be settled only in
cash, and (iii) Shares and any A wards that are granted through the
assumption of, or in substitution for, outstanding A wards previously
granted to Employees of a Company as the result of a merger,
consolidation, or acquisition of the employing company as the result of
which it becomes a Company .
(c) Adjustments - In the event of any stock dividend, stock split, combination
or exchange of equity securities, merger, consolidation, recapitalization,
divestiture or other distribution (other than ordinary cash dividends) of
assets to stockholders, or any other change affecting Shares or Share
price, such proportionate adjustments, if any, as the Committee in its
discretion may deem appropriate to reflect such change shall be made with
respect to the limitations on the numbers of Shares that may be issued and
represented by Aawards under the Plan. Upon the occurrence of any such
event, the Committee may also (or in lieu of any of the foregoing
adjustments) make such other equitable adjustments as it shall consider
appropriate to preserve the benefits or potential benefits intended to be
made available to Participants.
The stock subject to the provisions of the Plan shall be Shares of authorized
but unissued common stock and Treasury Shares.
7. AWARDS UNDER THE PLAN
The following types of Awards may be granted under this Plan, singly, in
combination or in tandem as the Committee may determine:
(a) Stock Options - A stock option shall represent a right to purchase a
specified number of Shares at a stated exercise price during a specified
time, not to exceed ten years from the date of grant, as determined by the
Committee. The exercise price per Share for each stock option shall not be
less than 100% of the Fair Market Value on the date of grant. A stock
option may be in the form of an ISO which is consistent with the
applicable terms, conditions, and limitations established by the
Committee. Upon satisfaction of the applicable conditions to
exercisability specified in the terms and conditions of the Award, the
Participant shall be entitled to exercise the option in whole or in part
and to receive, upon satisfaction or payment of the exercise price in the
manner contemplated in this Section 7(a), the number of Shares in respect
of which the option shall have been exercised.
The Shares covered by a stock option may be purchased by methods permitted
by the Committee including (i) a cash payment (ii) tendering (either
actually or by attestation) Shares, owned for at least six months by the
Participant, valued at the Fair Market Value at the date of exercise;
(iii) authorizing the Company to sell the Shares (or a sufficient portion
thereof) acquired upon exercise of a stock option, and assigning to the
Company a sufficient amount of the sale proceeds to pay for all the Shares
acquired through such exercise and any tax withholding obligations
resulting from such exercise, or (iv) any combination of the above.
(b) SARs - An SAR shall represent a right to receive a payment in cash,
Shares, or a combination thereof, equal to the excess of the Fair Market
Value of a specified number of Shares on the date the SAR is exercised
over an amount which shall be no less than the Fair Market Value on the
date the SAR was granted as set forth in the applicable Award agreement;
except that if an SAR is granted retroactively in substitution for a stock
option, the designated Fair Market Value in the applicable Award agreement
may be the Fair Market Value on the date such stock option was granted.
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(c) Other Stock Awards - A stock Award shall represent an Award made in
Shares or denominated in units equivalent in value to Shares or any other
Award based on or related to Shares. All or part of any stock Award may
be subject to conditions and restrictions established by the Committee,
and set forth in the applicable Award agreement, which may include, but
are not limited to continuous service with Citicorp or the Company and/or
the achievement of performance goals. In all cases, the minimum vesting
for all or a portion for these Awards will be one year. The performance
criteria that may be used by the Committee in granting stock Awards
contingent on performance goals for officers to which 162(m) of the Code
is applicable shall consist of stock price, earnings level, and return on
equity. The Committee may select one criterion or multiple criteria for
measuring performance, and the measurement may be based on the performance
of Citicorp and/or on comparative performance with other companies.
(d) Stock Payment - Shares may be used as payment for compensation which
otherwise would have been delivered in cash (including without limitation
any compensation that is intended to qualify as performance-based
compensation for purposes of Section 162(m) of the Code), in which case
the shares do not count against the share pool and no minimum vesting
period applies. Any Shares used for such payment will be valued at their
Fair Market Value at the time of payment and shall be subject to such
restrictions (including without limitation restrictions on transfer), if
any, and other terms and conditions as shall be determined by the
Committee at the time of payment.
8. DIVIDENDS AND DIVIDEND EQUIVALENTS
The Committee may provide that Awards under Section 7(c) or 7(d) of the Plan
earn dividends or dividend equivalents. Such dividends or dividend equivalents
may be paid currently or may be credited to a participant's account. Any
crediting of dividends or dividend equivalents may be subject to such
restrictions and conditions as the Committee may establish, including
reinvestment in additional Shares or Share equivalents.
9. PAYMENTS AND PAYMENT DEFERRALS
Payment of Awards may be in the form of cash, Shares, other Awards, or
combinations thereof as the Committee shall determine, and with such
restrictions as it may impose. The Committee also may require or permit
participants to elect to defer the receipt or issuance of Shares from stock
options or stock Awards or the settlement of Awards in cash under such rules and
procedures as it may establish under the Plan. It also may provide that deferred
settlements of Awards include the payment or crediting of earnings on deferred
amounts, or the payment or crediting of dividend equivalents where the deferred
amounts are denominated in Share equivalents. In addition, the Committee may
stipulate in an Award agreement, either at the time of grant or by subsequent
amendment, that a payment or portion of a payment of an Award be delayed in the
event that Section 162(m) of the Code (or any successor or similar provision of
the Code affecting tax deductibility) would disallow a tax deduction by the
Company for all or a portion of such payment. The period of any such delay in
payment shall be until the payment, or portion thereof, is tax deductible, or
such earlier date as the Committee shall determine.
10. TRANSFERABILITY
Awards granted under the Plan shall not be transferable or assignable other than
by will or the laws of descent and distribution and during the lifetime of a
Participant, the Award shall be exercisable only by such Participant.
11. CHANGE OF CONTROL
(a) In order to maintain the Participants' rights in the event of a Change of
Control, the Committee in its sole discretion may, either at the time an
Award is made hereunder or at any time prior, or coincident with or after
the time of a Change of Control:
(i) provide for the acceleration of any time periods relating to the
exercise or realization of such Awards so that such Awards may be
exercised or realized in full on or before a date fixed by the
Committee;
(ii) provide for the purchase of such Awards, upon the Participant's
request, for an amount of cash equal to the amount which could have
been obtained upon the exercise or realization of such
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rights had such Awards been currently exercisable or payable;
(iii) make such adjustment to the Awards then outstanding as the Committee
deems appropriate to reflect such transaction or change; or
(iv) cause the Awards then outstanding to be assumed, or new rights
substituted therefore, by the surviving corporation in such change.
The Committee may, in its discretion, include such further provisions
and limitations in any agreement documenting such Awards as it may deem
equitable and in the best interests of Citicorp.
(b) A "Change of Control" shall be deemed to occur if and when:
(i) any person, including a "person" as such term is used in Section
14(d)(2) of the 1934 Act (a "Person"), is or becomes a beneficial
owner (as such term is defined in Rule 13d-3 under the 1934 Act),
directly or indirectly, of securities of Citicorp 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) any plan or proposal for the liquidation of Citicorp is adopted by
the stockholders of Citicorp;
(v) individuals who, as of the date hereof, 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 subsequent to the date hereof whose election,
or nomination for election by Citicorp's shareholders, 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;
(vi) all or substantially all or the assets of Citicorp are sold,
liquidated or distributed; or
(vii) there occurs a reorganization, merger, consolidation or other
corporate transaction involving a Company (a "Transaction"), in
each case, with respect to which the stockholders of the Company
immediately prior to such Transaction do not, immediately after the
Transaction, own more than 50 percent of the combined voting power
of the Company or other corporation resulting from such
Transaction.
Any good faith determination by the Incumbent Board of whether a Change of
Control within the meaning of this definition has occurred shall be conclusive.
12. AWARD AGREEMENTS
Each Award under the Plan shall be evidenced by an agreement setting forth its
terms, conditions, and limitations for each Award, the provisions applicable in
the event the Participant's employment terminates, and Citicorp's authority
unilaterally or bilaterally to amend, modify, suspend, cancel, or rescind any
Award. The Committee need not require the execution of any such agreement by the
recipient, in which case acceptance of the Award by the respective Participant
shall constitute agreement by the Participant to the terms and conditions of the
Awards.
13. TAX WITHHOLDING
Citicorp shall have the right to deduct from any settlement of an Award made
under the Plan, including the
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delivery or vesting of Shares, or require the payment of, a sufficient amount to
cover withholding of any federal, state or local or other governmental taxes or
charges required by law or such greater amount of withholding as the Committee
shall determine from time to time and as permitted by applicable rules and
regulations, or to take such other action as may be necessary to satisfy any
such withholding obligations. If the Committee permits or requires Shares to be
used to satisfy required tax withholding, such Shares shall be valued at the
Fair Market Value as of the tax recognition date for such Award or such other
date as may be required by applicable law, rule or regulation.
14. OTHER BENEFIT AND COMPENSATION PROGRAMS
Unless otherwise specifically determined by the Committee, settlements of Awards
received by Pparticipants under the Plan shall not be deemed a part of a
Participant's regular, recurring compensation for purposes of calculating
payments or benefits from any Company benefit plan or severance program.
Further, Citicorp or any Company may adopt other compensation programs, plans or
arrangements as it deems appropriate or necessary.
15. UNFUNDED PLAN
Unless otherwise determined by the Committee, the Plan shall be unfunded and
shall not create (or be construed to create) a trust or a separate fund or
funds. The Plan shall not establish any fiduciary relationship between Citicorp
and any participant or other person. To the extent any person holds any rights
by virtue of an Award granted under the Plan, such rights shall constitute
general unsecured liabilities of Citicorp and shall not confer upon any
participant any right, title, or interest in any assets of Citicorp.
16. REGULATORY APPROVALS
The implementation of the Plan, the granting of any Award under the Plan, and
the issuance of Shares upon the exercise or settlement or any Award shall by
subject to the Company's procurement of all approvals and permits required by
regulatory authorities having jurisdiction over the Plan, the Awards granted
under it, or the Shares issued pursuant to it.
17. RIGHTS AS A STOCKHOLDER
A Participant shall have no rights as a stockholder with respect to shares
covered by an Award until the date the Participant or his nominee is the holder
of record. No adjustment will be made for dividends or other rights for which
the record date is prior to such date, except as provided in Section 6(c).
18. FUTURE RIGHTS
No person shall have any claim or right to be granted an Award, and the grant of
an Award shall not be construed as giving a Participant the right to be retained
in the employ of Citicorp or a Company or to participate in any other
compensation or benefit plan, program or arrangement of Citicorp or any other
Company. In addition, Citicorp expressly reserves the right at any time to
dismiss a Participant free from any liability or any claim under the Plan,
except as provided herein or in any agreement entered into hereunder.
19. GOVERNING LAW
The Plan and all agreements entered into under the Plan shall be construed in
accordance with and governed by the laws of the State of New York.
20. SUCCESSORS AND ASSIGNS
The Plan and any applicable Award agreement entered into under the Plan shall be
binding on all successors and assigns of a Participant, including, without
limitation, the estate of such Participant and the executor, administrator or
trustee of such estate, or any receiver or trustee in bankruptcy or
representative of the participant's creditors.
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CITICORP
STOCK OPTION AGREEMENT - TERMS AND CONDITIONS
Pursuant To The Citicorp 1997 Stock Incentive Plan
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The following terms and conditions apply with respect to each stock option (the
"Option") granted pursuant to the Citicorp 1997 Stock Incentive Plan (the
"Plan"), as adopted by the Citicorp Board of Directors on February 18, 1997 and
approved by the stockholders at the annual meeting on April 9, 1997 effective as
of April 9, 1997. The Plan is administered by a Committee appointed by the
Citicorp Board of Directors (the "Committee"). The grant of such an Option will
be evidenced by a Stock Option Notification (the "Notification") executed by
Citicorp and the individual to whom the Option is granted (the "Optionee") which
will set forth the number of shares of Citicorp common stock ("Shares") subject
to the Option, the price per share for which such Option is exercisable (the
"Option Price") and the date of the grant to the Optionee. The Notification and
the terms and conditions contained herein shall collectively constitute the
Stock Option Agreement (the "Agreement").
Whenever the word "Optionee" is used in any provisions of the Agreement under
circumstances where the provision should logically be construed to apply to the
estate, personal representative or beneficiary to whom this Option may be
transferred by will or by the laws of descent and distribution, it will be
deemed to include such person.
The terms of the Plan are hereby incorporated in these Terms and Conditions.
Terms used in these Terms and Conditions which are not defined herein have the
meanings as used or defined in the Plan.
1. GRANT OF OPTION
(a) The Optionee may purchase from Citicorp such number of Shares, as noted
on the Notification, at the Option Price, subject to the limitations set
forth in the Agreement.
(b) Stock Option grants may be deemed an Incentive Stock Option ("ISO"),
which shall be subject to the provisions of Section 6(a) of the Plan. Such
an option will apply only to the number of whole Shares, together with any
other Shares subject to option for which an ISO has been deemed, the
aggregate value of which (determined as provided in the Plan) does not
exceed $100,000 in the year in which such options first become
exercisable. If the Option is deemed to be an ISO, and the Option would
otherwise exceed the limitation of the preceding sentence, the excess will
be considered a separate Option which is not an ISO.
2. EXERCISE OF OPTION
The Option granted as described in the Notification may be exercised in
installments, in whole or in part, at any time and from time to time as follows:
(a) The aggregate number of Shares set forth in the Notification will be
divided into two equal installments. The first installment will be
exercisable, in whole or in part, three years from the date of the grant,
and the second installment will be exercisable, in whole or in part, four
years from the date of grant. Once exercisable, an Option may be exercised
up to no more than ten years from the date of grant (the "Term"). The
Option will become immediately exercisable in full upon retirement or
death. The grant of an Option shall impose no obligation upon the Optionee
to exercise such Option.
(b) No less than 100 Shares may be purchased upon any one exercise of the
Option granted hereby unless the number of Shares purchased at such time
is the total number of Shares in respect of which the Option granted is
then exercisable. In no event shall the Option be exercisable for a
fractional Share.
(c) The Committee may provide that the Option may not be exercised in whole
or in part for any period of time. Anything in these Terms and Conditions
to the contrary notwithstanding, the Option shall not be exercisable at
any time when such exercise would violate any securities trading policy of
Citicorp or any Company applicable to the Optionee.
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3. METHOD OF EXERCISING OPTION AND PAYMENT OF OPTION PRICE
(a) The Option shall be exercised by the Optionee delivering to Citicorp,
from time to time, on any business day, written notice specifying the
number of Shares the Optionee then desires to purchase (the "Notice").
Payment for the Shares exercised may be via (i) Cash Purchase - An
authorized debit to the Optionee's Citibank, N.A., New York checking
account or IMRA, or by personal check, bank draft or money order payable
to the order of Citicorp N.A. (such modes of payment are collectively
referred to as "Cash") for an amount in United States dollars equal to the
Option Price times the number of Shares specified in the Notice (the
"Total Option Price"); (ii) Stock Swap - Shares with a value (as defined
in clause 3(c)) equal to or less than the Total Option Price plus Cash in
United States dollars equal to the amount, if any, by which the Total
Option Price exceeds the value of such Shares; or (iii) an "exersale" - in
which a participant may sell all or part of Shares to be obtained upon
exercise of an Option pursuant to which Share certificates received upon
exercise of such Option are delivered to a brokerage firm against payment
to Citicorp of the Total Option Price of such Shares. The "Exercise Date"
means the business day on which the Notice is delivered to the Stock Plans
Unit, or such later date as may be specified in the Notice.
(b) Payment of the Total Option Price in shares of Citicorp Common Stock,
owned for at least six months by the Participant, may be made by delivery
to Citicorp of a verifiable attestation, in the form provided by Citicorp,
of record and beneficial ownership of the required number of Shares, or
may be made by delivery of the share certificate(s) representing the
required number of Shares, with the Optionee signing his or her name on
the back, or by attaching executed stock powers. The Optionee's Signature
must be guaranteed in either case.
(c) The value of Shares tendered to exercise an Option will be the average of
the highest and the lowest quoted selling prices of the Shares on the New
York Stock Exchange Composite Tape on the valuation date, or, if there
were no sales on the valuation date, the average of the highest and lowest
quoted selling prices on the New York Stock Exchange Composite Tape on the
first trading day before and the first trading day after the valuation
date, in each case rounded up to the nearest one-eighth.
(d) Within a reasonable period of time after the Exercise Date and subject to
receipt of withholding tax, if any, Citicorp will issue to the Optionee
the number of Shares with respect to which the Option has been exercised,
and deliver to the Optionee certificates therefor. The exercise at the
same time of both an ISO and a Non-Qualified Stock Option ("NQSO") shall
cause a separate certificate to be issued to the Optionee in respect of
the ISO and NQSO.
4. TERMINATION OF OPTION
(a) The Option will terminate and be of no force or effect upon the earliest
to occur of the following events:
(i) The expiration of ten years from the date of the grant (the "Term").
(ii) Termination of the Optionee's employment, except as provided in
clause 4(b) below and except in the case of the Optionee's
retirement or death. For these purposes, retirement is defined as
termination of employment on or after age 55, except for cause, or
as defined as an earlier date in a regular Citicorp Retirement Plan
in a country outside of the United States.
(iii) The expiration of five years after the date of the Optionee's
retirement. The Committee may extend the time period over which such
Option held by a retired Optionee may be exercised, but in no event
may such period be beyond the end of the Term.
(iv) The expiration of five years after the date of death of the Optionee
if the Optionee dies while employed by Citicorp or otherwise within
the period of time after retirement during which the Optionee was
entitled to exercise the Option but in no event beyond the Term.
During such five-year period, the Optionee's estate, personal
representative, or beneficiary shall have the right to exercise the
Optionee's Option to the extent the right to exercise such Option
has not been exercised prior to the Optionee's death.
(v) The occurrence of a date, which shall be no later than the end of
the Term, specified by the Committee after the date of grant of the
Option as the termination date of the Option.
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(b) 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) or a spin-off of a Company or other corporate
re-organization 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 paragraph shall be binding on all persons
affected thereby. Employment by Citicorp shall be deemed to include
employment of the Optionee by, and to continue during any period in which
the Optionee is in the employment of, a Company as that term is defined in
the Plan.
5. CHANGE OF OPTIONEE'S STATUS
In the event of a change in the Optionee's duties and responsibilities, or a
transfer of the Optionee to a different position, the Committee may terminate
the Option or reduce the number of Shares subject to Option under the Agreement
in a manner which, in the sole discretion of the Committee, will make the
Option, after adjustment, commensurate with options under the Plan awarded to
other Employees with duties, responsibilities or position similar to those of
the Optionee.
6. CITICORP'S RIGHTS
The existence of the Option shall not affect in any way the right or power of
Citicorp or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in Citicorp's capital
structure or its business, or any merger or consolidation of Citicorp, or any
issue of bonds, debentures, preferred or prior preference stocks ahead of or
convertible into, or otherwise affecting the Shares or the rights thereof, or
the dissolution or liquidation of Citicorp, or any sale or transfer of all or
any part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.
In addition, neither the Agreement, nor any action taken hereunder, shall be
deemed to limit or restrict the right of Citicorp to terminate the Optionee's
employment at any time, for any reason, with or without cause.
The Optionee agrees to give written notice to Citicorp of any disposition of
stock received upon exercise of an ISO before the expiration of the applicable
holding periods under the Internal Revenue Code of 1986, as amended (a
disqualifying disposition).
7. PREEMPTION OF APPLICABLE LAWS AND REGULATIONS
Anything in the Agreement to the contrary notwithstanding, if, at any time
specified herein for the issuance of Shares to the Optionee, any law, regulation
or requirement of any governmental authority having jurisdiction shall require
either Citicorp or the Optionee to take any action in connection with Shares
then to be issued, the issuance of such Shares shall be deferred until such
action shall have been taken.
8. INTERPRETATION OF THE AGREEMENT
Any dispute or disagreement which shall arise under, or as a result of, or
pursuant to, or in connection with, the Agreement shall be determined by the
Benefits Appeal Committee ("BAC") or such other committee as authorized by the
Committee, and any such determination or any other determination by the BAC
under or pursuant to the Agreement and any interpretation by the BAC of the
terms of the Agreement, shall be binding on all persons affected thereby.
9. AMENDMENTS
The Committee shall have the right prior to a Change of Control without the
consent of the Optionee to alter or amend the Agreement, from time to time, in
any manner consistent with the provisions of the Plan, but only if all
agreements granting Options to purchase Shares pursuant to the Plan which are in
effect and not wholly exercised at the time of such alteration or amendment
shall also be similarly altered or amended with substantially the same effect,
and any alteration or amendment of the Agreement by the Committee shall, upon
adoption, become and be binding on all persons affected thereby without
requirement for consent or other action with respect thereto by any such person.
Citicorp shall give written notice to the Optionee of any such alteration or
amendment of the Agreement by the Committee as soon as practicable after the
adoption thereof. The foregoing shall not restrict the ability of the Optionee
and Citicorp by mutual written consent to alter or amend the Agreement in any
manner which is consistent with the Plan and approved by the Committee.
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10. NOTICE REQUIREMENTS
Any notice which either party hereto may be required or permitted to give to the
other shall be in writing, and may be delivered to Citicorp in care of the Stock
Option Plan Unit personally or by certified mail postage prepaid or, at such
other address as Citicorp, by notice to the Optionee, may designate in writing
from time to time, and to the Optionee at the Optionee's address shown on the
records of Citicorp or such other address as the Optionee, by notice to
Citicorp, may designate in writing from time to time.
11. CONSTRUCTION
The terms and conditions stated herein incorporate by reference the definitions
and the terms and conditions of the Plan, and wherever a conflict may arise
between these terms and the terms of the Plan, the terms of the Plan shall
control.
12. AGREEMENT TO COMPLY WITH SECURITIES LAWS AND THE INTERNAL REVENUE CODE
Before Citicorp delivers any Shares purchased, the following written statement
may be required from the Optionee:
"I agree not to dispose of the Shares purchased by me pursuant to the Citicorp
Stock Option Agreement Terms and Conditions and the Citicorp 1997 Stock
Incentive Plan, otherwise than in compliance with the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder".
13. NO TRANSFER
The Option shall not be transferable by the Optionee other than by will or the
laws of descent and distribution and shall be exercisable during the lifetime of
the Optionee only by the Optionee.
14. GOVERNING LAW
The Option and the legal relations between the parties shall be governed by and
construed in accordance with the laws of the State of New York.
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