As filed with the Securities and Exchange Commission on February 5, 1997
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------------
Citicorp Delaware 6711 13-2614988
Citicorp Capital X Delaware 6749 To be applied for
Citicorp Capital XI Delaware 6749 To be applied for
Citicorp Capital XII Delaware 6749 To be applied for
Citicorp Capital XIII Delaware 6749 To be applied for
Citicorp Capital XIV Delaware 6769 To be applied for
(Exact name of (State or other (Primary Standard (I.R.S. Employer
registrant as jurisdiction of Industrial Identification
as specified incorporation or Classification Number.)
in its charter) organization) Number)
399 Park Avenue
New York, New York 10043
(212) 559-1000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Stephen E. Dietz
Associate General Counsel
Citibank, N.A.
425 Park Avenue
New York, New York 10043
(212) 559-1000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
John T. Bostelman
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Approximate date of commencement of proposed sale to the public: As soon
as practicable after the effective date of this Registration Statement and upon
the satisfaction or waiver of all other conditions to the exchange offers
described in the enclosed prospectus.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box: |_|
<PAGE>
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
==========================================================================================================================
Title of each Proposed maximum Proposed maximum
class of securities Amount to offering price per aggregate offering Amount of
to be registered be registered(1) unit (2) price(2) registration fee
==========================================================================================================================
<S> <C> <C> <C> <C>
Capital Securities of Citicorp Capital X 12,900,000 $25.6875 $331,368,750 $100,415
Capital Securities of Citicorp Capital XI 13,900,000 $25.5625 $355,318,750 $107,672
Capital Securities of Citicorp Capital XII 4,900,000 $26.4375 $129,543,750 $39,256
Capital Securities of Citicorp Capital XIII 5,900,000 $26.9375 $158,931,250 $48,161
Capital Securities of Citicorp Capital XIV 4,900,000 $26.4375 $129,543,750 $39,256
Guarantee Obligations of Citicorp with
respect to the above Capital Securities (3) N/A N/A N/A N/A
Junior Subordinated Deferrable Interest
Debentures of Citicorp (4) N/A N/A N/A N/A
Total N/A N/A $1,104,706,250(5) $334,759
==========================================================================================================================
</TABLE>
(1) Expressed as a number of securities, and estimated solely for purposes of
computing the registration fee.
(2) Calculated in accordance with Rule 457(f) under the Securities Act of 1933
on the basis of the high and low prices reported for the respective Depositary
Shares on February 3, 1997. Each holder of a Depositary Share representing
1/10th of a share of the respective Series of Preferred Stock upon exchange will
receive one Capital Security issued by the respective Trust, which will hold
Subordinated Debt Securities for the benefit of the holders of Capital
Securities.
(3) The securities registered include the rights of holders of the Capital
Securities under the Guarantees and certain back-up obligations of Citicorp as
set forth in the Amended and Restated Declaration of each Trust and the
Indenture, in each case as further described in this Registration Statement. The
back-up obligations comprise the obligations of Citicorp to provide certain
indemnities in respect of, and pay and be responsible for, certain costs,
expenses, debts and liabilities of each Trust. The Capital Securities and
Guarantees, when taken together with Citicorp's obligations under the
Subordinated Debt Securities, the Indentures and the Amended and Restated
Declarations of Trust, will provide full and unconditional guarantees on a
subordinated basis by Citicorp of payments due on the Capital Securities. No
separate consideration will be paid for any such obligations of Citicorp.
Pursuant to Rule 457 (n) under the Securities Act of 1933, no separate fee is
payable with respect to the Guarantees.
(4) Citicorp will issue to each Trust, in exchange for the Depository Shares
accepted in the related Offer by each such Trust, Junior Subordinated Deferrable
Interest Debentures in a principal amount equal to the liquidation amount of the
Capital Securities issued in exchange for such Depository Shares, which Junior
Subordinated Deferrable Interest Debentures may later be distributed for no
additional consideration to the holders of the Capital Securities of any such
Trust upon the dissolution of such Trust and the distribution of the assets
thereof.
(5) Such amount represents the aggregate market value of all of the Capital
Securities to be issued and exchanged hereunder as calculated in accordance with
Rule 457 (f).
The Registrants hereby amend this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrants shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
PROSPECTUS
CITICORP
CITICORP CAPITAL X
CITICORP CAPITAL XI
CITICORP CAPITAL XII
CITICORP CAPITAL XIII
CITICORP CAPITAL XIV
OFFER TO EXCHANGE
Citicorp Capital X Up to 12,900,000 Depositary Shares
___% Trust Originated Preferred each representing a 1/10 interest
Securities ("TOPrS") in a share of 8.00% Noncumulative
(Liquidation Amount $25 for Preferred Stock, Series 16, of Citicorp
per Security, fully CUSIP 173034 41 4
and unconditionally guaranteed
by Citicorp to the extent
set forth herein)
Citicorp Capital XI Up to 13,900,000 Depositary Shares
___% TOPrS each representing a 1/10 interest
(Liquidation Amount $25 in a share of 7.50% Noncumulative
per Security, fully for Preferred Stock, Series 17, of Citicorp
and unconditionally guaranteed CUSIP 173034 38 0
by Citicorp to the extent
set forth herein)
Citicorp Capital XII Up to 4,900,000 Depositary Shares
___% TOPrS each representing a 1/10 interest
(Liquidation Amount $25 in a share of 8.30% Noncumulative
per Security, fully for Preferred Stock, Series 20, of Citicorp
and unconditionally guaranteed CUSIP 173034 33 1
by Citicorp to the extent
set forth herein)
Citicorp Capital XIII Up to 5,900,000 Depositary Shares
___% TOPrS each representing a 1/10th interest
(Liquidation Amount $25 in a share of 8.50% Noncumulative
per Security, fully for Preferred Stock, Series 21, of Citicorp
and unconditionally guaranteed CUSIP 173034 31 5
by Citicorp to the extent
set forth herein)
1
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Citicorp Capital XIV Up to 4,900,000 Depositary Shares
___% TOPrS each representing a 1/10 interest
(Liquidation Amount $25 in a share of 7.75% Cumulative
per Security, fully for Preferred Stock, Series 22, of Citicorp
and unconditionally guaranteed CUSIP 173034 28 1
by Citicorp to the extent
set forth herein)
2
<PAGE>
EACH OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON _______________________ 1997, UNLESS SUCH
OFFER IS EXTENDED.
Citicorp, a Delaware corporation, and Citicorp Capital X, Citicorp Capital
XI, Citicorp Capital XII, Citicorp Capital XIII and Citicorp Capital XIV, each a
Delaware statutory business trust (each a "Trust"), hereby respectively offer,
upon the terms and subject to the conditions set forth in this Prospectus and
the accompanying Letters of Transmittal, to exchange the Trust Originated
Preferred Securities of such Trust, representing preferred undivided beneficial
interests in the assets of the Trust (the "TOPrS" or the "Capital Securities" of
such Trust), for up to the Maximum Number (as defined below) of the depositary
shares ("Depositary Shares"), each representing a 1/10 interest in a share of
the series (a "Series") of Preferred Stock, $250 liquidation preference per
share, of Citicorp (the "Preferred Stock"), specified opposite the name of such
Trust above (the "Related Depositary Shares") not owned by Citicorp. This
Prospectus and the Letters of Transmittal for the Depositary Shares together
constitute the "Offers" and, with respect to each Trust's exchange of its
Capital Securities for the Related Depositary Shares, an "Offer". Exchanges will
be made on the basis of one Capital Security of a particular Trust for each
Related Depositary Share, up to the maximum aggregate number of such Related
Depositary Shares set forth on the cover of this Prospectus (with respect to any
series of Related Depositary Shares, the "Maximum Number"), in each case validly
tendered and accepted for exchange in the applicable Offer. If more than the
Maximum Number of Related Depositary Shares for any Series of Preferred Stock is
validly tendered and not withdrawn on or prior to the Expiration Date (as
defined herein) for the applicable Offer, the applicable Trust will accept such
Related Depositary Shares for exchange on a pro rata basis as described herein.
As of the date of this Prospectus, there are outstanding and not owned by
Citicorp: 13,000,000 Depositary Shares for 8.00% Noncumulative Preferred Stock,
Series 16 ("Series 16 Preferred Stock"), 14,000,000 Depositary Shares for 7.50%
Noncumulative Preferred Stock, Series 17 ("Series 17 Preferred Stock"),
5,000,000 Depositary Shares for 8.30% Noncumulative Preferred Stock, Series 20
("Series 20 Preferred Stock"), 6,000,000 Depositary Shares for 8.50%
Noncumulative Preferred Stock, Series 21 ("Series 21 Preferred Stock") and
5,000,000 Depositary Shares for 7.75% Cumulative Preferred Stock, Series 22
("Series 22 Preferred Stock").
Citicorp will own all of the common securities (the "Common Securities"
and together with the Capital Securities, the "Trust Securities") representing
the common undivided beneficial interests in the assets of each Trust.
Concurrently with the issuance of Capital Securities in exchange for Depositary
Shares validly tendered and accepted in each Offer, each Trust will deliver to
Citicorp the Depositary Shares validly tendered and accepted in its Offer and
the proceeds of the Common Securities issued to Citicorp in consideration for
the deposit by Citicorp in the Trust, as trust assets, of the series of Citicorp
Junior Subordinated Deferrable Interest Debentures due 2027 specified herein
(the "Subordinated Debt Securities"), having (for each Trust) an aggregate
principal amount equal to the aggregate stated liquidation amount of the Trust
Securities to be issued by such Trust. The Subordinated Debt Securities of each
series will mature on , 2027. The Subordinated Debt Securities will be unsecured
obligations of Citicorp and will be subordinate and junior in right of payment
to all Senior Indebtedness of Citicorp, as described herein.
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The Subordinated Debt Securities of each series held by a Trust are
redeemable by Citicorp, in whole or in part, from time to time, on and after May
15, 2002, and earlier in certain circumstances upon the occurrence of a Tax
Event or a Regulatory Capital Event (each as defined herein), at the Redemption
Price set forth herein. Any such redemption by Citicorp will result in the
redemption by such Trust of its Trust Securities, as described herein. The
Preferred Stock of each Series, and thus the related Depositary Shares, are
redeemable by Citicorp, in whole or in part, from time to time, at a redemption
price of $250 per share of Preferred Stock, on and after (i) June 1, 1998 (in
the case of Series 16 Preferred Stock), (ii) September 1, 1998 (in the case of
Series 17 Preferred Stock), (iii) November 15, 1999 (in the case of Series 20
Preferred Stock), (iv) February 15, 2000 (in the case of Series 21 Preferred
Stock) and (v) May 15, 2000 (in the case of Series 22 Preferred Stock).
(Continued on next page)
-----------------------
SEE "RISK FACTORS AND SPECIAL CONSIDERATIONS RELATING TO THE OFFERS"
STARTING ON PAGE 28 FOR A DISCUSSION OF CERTAIN FACTORS RELATING TO THE CAPITAL
SECURITIES THAT SHOULD BE CONSIDERED BY INVESTORS, INCLUDING THE PERIOD AND
CIRCUMSTANCES DURING AND UNDER WHICH PAYMENTS OF DISTRIBUTIONS ON THE CAPITAL
SECURITIES MAY BE DEFERRED AND THE RELATED FEDERAL INCOME TAX CONSEQUENCES.
NEITHER THIS TRANSACTION NOR THESE SECURITIES HAVE BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR BY ANY STATE SECURITIES
COMMISSIONS NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SECURITIES OFFERED HEREBY ARE NOT DEPOSITS OR SAVINGS ACCOUNTS AND ARE
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
-------------------
Merrill Lynch & Co. has been retained as Dealer Manager to solicit exchanges of
Depositary Shares for Capital Securities. See "The Offers -- Dealer Manager;
Soliciting Dealers." Citibank, N.A. has been retained as Exchange Agent in
connection with the Offers. has been ________________ retained to act as
Information Agent to assist in connection with the Offers.
-----------------------
The Dealer Manager for the Offers is:
Merrill Lynch & Co.
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The date of this Prospectus is __________, 1997.
SM "Trust Originated Preferred Securities" and "TOPrS" are service marks of
Merrill Lynch & Co.
5
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(Continued from previous page)
NONE OF CITICORP, THE BOARD OF DIRECTORS OF CITICORP, THE TRUSTEES OF ANY
TRUST OR ANY TRUST MAKES ANY RECOMMENDATION TO HOLDERS OF DEPOSITARY SHARES AS
TO WHETHER TO EXCHANGE OR REFRAIN FROM EXCHANGING THEIR DEPOSITARY SHARES IN ANY
OFFER. HOLDERS OF DEPOSITARY SHARES ARE URGED TO CONSULT THEIR FINANCIAL AND TAX
ADVISORS IN MAKING THEIR DECISIONS ON WHAT ACTION TO TAKE IN LIGHT OF THEIR OWN
PARTICULAR CIRCUMSTANCES.
IN ORDER TO PARTICIPATE IN AN OFFER, HOLDERS OF DEPOSITARY SHARES MUST
SUBMIT A LETTER OF TRANSMITTAL AND COMPLY WITH THE OTHER PROCEDURES FOR
TENDERING IN ACCORDANCE WITH THE INSTRUCTIONS CONTAINED HEREIN AND IN THE LETTER
OF TRANSMITTAL PRIOR TO THE APPLICABLE EXPIRATION DATE (AS DEFINED HEREIN). SEE
"THE OFFERS -- PROCEDURES FOR TENDERING."
Each Trust will issue one (and only one) class of Capital Securities in
exchange for up to the Maximum Number of the Related Depositary Shares. The name
of each Trust, its Related Capital Securities, the particular Depositary Shares
that are the subject of the Offer by Citicorp and such Trust and the Maximum
Number of Related Depositary Shares that may be accepted in such Offer are set
forth on the cover page of this Prospectus.
For a description of the other terms of each Offer, see "The Offers --
Terms of the Offers," "-- Expiration Date; Extensions; Amendments; Termination,"
and "--Withdrawal of Tenders." Application will be made to list the Capital
Securities of each Trust on the New York Stock Exchange (the "NYSE"). In order
to satisfy NYSE listing requirements, acceptance of Related Depositary Shares
validly tendered in each Offer is subject to the conditions that as of the
applicable Expiration Date there will be at least 400 record or beneficial
holders of at least 1,000,000 Capital Securities to be issued by the related
Trust in exchange for such Related Depositary Shares (the "Minimum Distribution
Condition"), which condition may not be waived and which condition applies to
each Trust, its Offer and its issue of Capital Securities. See "The Offers --
Expiration Date; Extensions; Amendments; Termination" and "--Conditions to the
Offers."
Each Trust expressly reserves the right, in its sole discretion, subject
to applicable law, to (i) terminate its Offer, not accept for exchange the
Related Depositary Shares and promptly return the Depositary Shares upon the
failure of any condition specified above or in "The Offers -- Conditions to the
Offers," (ii) waive any condition to its Offer (other than the Minimum
Distribution Condition) and accept up to the Maximum Number of Related
Depositary Shares previously tendered pursuant to such Offer, (iii) extend the
Expiration Date (as defined herein) of its Offer and retain all Related
Depositary Shares tendered pursuant to its Offer until the Expiration Date,
subject, however, to all withdrawal rights of holders (see "The Offers --
Withdrawal of Tenders"), (iv) amend the terms of its Offer, (v) modify the form
of the consideration to be paid pursuant to its Offer or (vi) terminate its
Offer, not accept for exchange the Related Depositary Shares at any time on or
prior to the Expiration Date and promptly return the Depository Shares for any
reason. Any amendment applicable to the Offer of a particular Trust will apply
to all Related Depositary Shares tendered pursuant to such Offer. The minimum
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<PAGE>
period during which such Offer must remain open following material changes in
the terms of such Offer or the information concerning such Offer, other than a
decrease in the number of the Related Depositary Shares sought or the amount or
form of consideration offered in exchange therefor, depends upon the facts and
circumstances, including the materiality of such terms or information. See "The
Offers-- Expiration Date; Extensions; Amendments; Termination."
Citicorp will own all of the Common Securities of each Trust. Each Trust
exists for the exclusive purposes of (i) issuing (a) its Capital Securities in
exchange for the Related Depositary Shares validly tendered and accepted in its
Offer and delivering such Depositary Shares to Citicorp in consideration for the
deposit by Citicorp in the Trust, as trust assets, Subordinated Debt Securities
having an aggregate stated principal amount equal to the aggregate stated
liquidation amount of such Capital Securities and (b) its Common Securities to
Citicorp in exchange for cash and investing the proceeds thereof in an
equivalent amount of such Subordinated Debt Securities and (ii) engaging in only
those activities as are necessary or incidental thereto. The Common Securities
rank pari passu, and payments will be made thereon on a pro rata basis, with the
Capital Securities, except that upon the occurrence and during the continuance
of a Declaration Event of Default (as defined herein), the rights of the holders
of the Common Securities to receive payment of periodic distributions and
payments upon liquidation, redemption and otherwise will be subordinated to the
rights of the holders of the Capital Securities. See "Description of Capital
Securities and "Description of the Subordinated Debt Securities."
Holders of the Capital Securities of each Trust are entitled to receive
cumulative cash distributions, at the respective annual rate set forth on the
cover page hereof, on the liquidation amount of $25 per Capital Security,
accruing from the date of original issuance and payable quarterly in arrears on
February 15, May 15, August 15 and November 15 of each year, commencing May 15,
1997 ("distributions"). The payment of distributions out of moneys held by each
Trust and payments on liquidation of each Trust or the redemption of its Capital
Securities, as set forth below, are guaranteed by Citicorp (each, a "Guarantee")
to the extent described under "Description of the Guarantees". Each Guarantee
covers payments of distributions and other payments on the Capital Securities of
a Trust only if and to the extent that such Trust has funds available therefor,
which will not be the case unless Citicorp has made a payment of interest or
principal or other payments on the Subordinated Debt Securities held by the
Trust as its sole asset. As to each Trust, the Guarantee, when taken together
with Citicorp's obligations under the Subordinated Debt Securities, the
Indenture (as defined herein) and the Declaration (as defined herein), including
Citicorp's undertaking to pay all costs, expenses, debts and other obligations
of the Trust (other than with respect to the Trust Securities), provides a full
and unconditional guarantee on a subordinated basis of amounts due on the
Capital Securities. The obligations of Citicorp under the Guarantees are
subordinate and junior in right of payment to all other liabilities of Citicorp
and rank pari passu with the most senior preferred stock issued from time to
time, if any, by Citicorp.
The distribution rate and the distribution payment date and other payment
dates for the Capital Securities of each Trust will correspond to the interest
rate and interest payment date and other payment dates on the Subordinated Debt
Securities held by such Trust, which will be the sole assets of such Trust. As a
result, if principal or interest is not paid on the series of Subordinated Debt
Securities held by a Trust, no amounts will be paid on the Capital Securities of
such Trust. If Citicorp does not make principal or interest payments on the
series of Subordinated Debt
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Securities held by a Trust, the Trust will not have sufficient funds to make
distributions on its Capital Securities, in which event, the Guarantee will not
apply to such distributions until the Trust has sufficient funds available
therefor.
So long as no Indenture Event of Default (as defined herein) has occurred
and is continuing under the applicable Indenture, Citicorp has the right to
defer payments of interest on any series of Subordinated Debt Securities by
extending the interest payment period on such Subordinated Debt Securities at
any time and from time to time for up to 20 consecutive quarterly interest
periods (each, an "Extension Period"), provided that no Extension Period may
extend beyond the Maturity Date (as defined below). If interest payments are so
deferred, distributions on the related Capital Securities will also be deferred.
During such Extension Period, distributions will continue to accrue, with
interest thereon (to the extent permitted by applicable law) compounded
quarterly, and holders of the related Capital Securities will be required to
include deferred interest income in their gross income for United States federal
income tax purposes in advance of receipt of the cash distributions with respect
to such deferred interest payments. There could be multiple Extension Periods of
varying lengths of up to 20 consecutive quarterly interest periods each
throughout the term of any series of Subordinated Debt Securities. See
"Description of the Subordinated Debt Securities--Option to Extend Interest
Payment Period" and "United States Federal Income Taxation--Interest and
Original Issue Discount."
The Subordinated Debt Securities held by each Trust will mature on
____________, 2027 (the "Maturity Date"). The Subordinated Debt Securities held
by each Trust are redeemable by Citicorp, in whole or in part, from time to
time, on or after May 15, 2002, and earlier in certain circumstances upon the
occurrence of a Tax Event or a Regulatory Capital Event. Prior to any such
redemption, Citicorp will obtain any required regulatory approvals. If Citicorp
redeems any Subordinated Debt Securities of any series, the Trust which holds
such Subordinated Debt Securities must redeem Trust Securities having an
aggregate liquidation amount equal to the aggregate principal amount of the
Subordinated Debt Securities so redeemed at the Redemption Price (as defined
herein). See "Description of the Capital Securities--Redemption." The Capital
Securities of each Trust will also be redeemed upon maturity of the related
Subordinated Debt Securities. In addition, upon the occurrence of a Tax Event or
a Regulatory Capital Event, unless the Subordinated Debt Securities held by a
Trust are redeemed in the circumstances described herein, such Trust may be
dissolved, with the result that the Subordinated Debt Securities held by such
Trust will be distributed to the holders of the Capital Securities of such Trust
in lieu of any cash distribution. See "Description of the Capital
Securities--Tax Event Redemption or Distribution" and "--Regulatory Capital
Event Redemption or Distribution."
In the event of the involuntary or voluntary dissolution, winding-up or
termination of a Trust, the holders of the Capital Securities of such Trust will
be entitled to receive for each Capital Security, out of assets of the Trust
available therefor, a liquidation amount of $25 plus accrued and unpaid
distributions thereon (including interest thereon) to the date of payment,
unless, in connection with such dissolution, the Subordinated Debt Securities
held by such Trust are distributed to the holders of the Capital Securities. See
"Description of the Capital Securities-- Liquidation Distribution Upon
Dissolution."
The Depositary Shares for each Series of Preferred Stock are listed and
principally traded on the NYSE. On __________, 1997, the last full day of
trading prior to the first public
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announcement of the Offers, the closing sales price per share of the Depositary
Shares on the NYSE was as follows:
Series 16: $________________
Series 17: $________________
Series 20: $________________
Series 21: $________________
Series 22: $________________
HOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THEIR DEPOSITARY
SHARES. To the extent that Depositary Shares for a Series of Preferred Stock are
tendered and accepted in an Offer, the terms on which untendered Depositary
Shares for such Series could subsequently be sold could be adversely affected.
In addition, following the Expiration Date, and in accordance with and subject
to applicable law, Citicorp may from time to time acquire Depositary Shares for
any or all Series of Preferred Stock in the open market, by tender offer,
subsequent exchange offer, redemption of the underlying Preferred Stock or
otherwise. To the extent that any such acquisition of Depositary Shares causes
the number of outstanding Depositary Shares for any Series of Preferred Stock to
be less than 100,000, the NYSE may delist such Depositary Shares from the NYSE
and the trading market for such outstanding Depositary Shares for such Series of
Preferred Stock could be adversely affected. Citicorp's decision to make such
acquisitions is dependent on many factors, including market conditions in effect
at the time of any contemplated acquisition. Accordingly, Citicorp cannot
predict whether and to what extent it will acquire any additional Depositary
Shares and the consideration to be paid therefor. See "Listing and Trading of
Capital Securities and Depositary Shares." Citicorp also has the right to redeem
the Preferred Stock at specified times, in whole or in part, as described under
"Description of the Preferred Stock and Depository Shares".
Citicorp will pay to Soliciting Dealers (as defined herein) designated by
the record or beneficial owner, as appropriate, of Depositary Shares a
solicitation fee of $ per Depositary Share ($ per Depositary Share with respect
to the solicitation of beneficial holders of 10,000 or more Depositary Shares of
one Series of Preferred Stock) validly tendered and accepted for exchange
pursuant to an Offer, subject to certain conditions. A Soliciting Dealer is not
entitled to a solicitation fee for Depositary Shares beneficially owned by such
Soliciting Dealer. See "The Offers -- Dealer Manager; Soliciting Dealers."
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE OFFERS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS SHOULD NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY CITICORP, THE TRUSTS, THE TRUSTEES OF
ANY TRUST OR THE DEALER MANAGER. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
EXCHANGE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF CITICORP OR ANY TRUST SINCE THE
RESPECTIVE DATES AS OF WHICH INFORMATION IS GIVEN HEREIN. NO OFFER IS BEING MADE
TO (NOR WILL TENDERS BE ACCEPTED FROM OR ON BEHALF OF) HOLDERS OF DEPOSITARY
SHARES IN ANY JURISDICTION IN WHICH THE MAKING OF SUCH OFFER OR THE
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ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF SUCH
JURISDICTION. HOWEVER, CITICORP AND THE TRUSTS MAY, AT THEIR DISCRETION, TAKE
SUCH ACTION AS THEY MAY DEEM NECESSARY TO MAKE THE OFFERS IN ANY SUCH
JURISDICTION. IN ANY JURISDICTION THE SECURITIES LAWS OR BLUE SKY LAWS OF WHICH
REQUIRE ANY OFFER TO BE MADE BY A LICENSED BROKER OR DEALER, THE OFFER IS BEING
MADE ON BEHALF OF EACH TRUST BY THE DEALER MANAGER OR ONE OR MORE REGISTERED
BROKERS OR DEALERS WHICH ARE LICENSED UNDER THE LAWS OF SUCH JURISDICTION.
-----------------------------------------------
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
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TABLE OF CONTENTS
Page
----
Available Information ...................................................... 12
Incorporation of Certain Documents by Reference ............................ 13
Prospectus Summary ......................................................... 14
Risk Factors and Special Considerations Relating to the Offers ............. 28
Comparison of Capital Securities and Depositary Shares ..................... 33
Citicorp ................................................................... 40
Citicorp Selected Financial Data ........................................... 41
Capitalization of Citicorp ................................................. 42
Citicorp Ratios of Income to Fixed Charges ................................. 42
Accounting Treatment ....................................................... 43
The Trusts ................................................................. 43
The Offers ................................................................. 45
Listing and Trading of Capital Securities and Depositary Shares............. 55
Transactions and Arrangements Concerning the Offers ........................ 56
Fees and Expenses; Transfer Taxes .......................................... 56
Price Range of Depositary Shares ........................................... 56
Description of the Subordinated Debt Securities ............................ 57
Description of the Capital Securities ...................................... 66
Description of the Guarantees .............................................. 79
Effect of Obligations under the Subordinated Debt Securities and
the Guarantees ............................................................ 82
Description of the Preferred Stock and Depositary Shares ................... 83
United States Federal Income Taxation ...................................... 94
Validity of Securities ..................................................... 99
Experts .................................................................... 99
ERISA Considerations .......................................................100
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AVAILABLE INFORMATION
This Prospectus constitutes a part of a combined Registration Statement on
Form S-4 (together with all amendments and exhibits thereto, the "Registration
Statement") filed by Citicorp and the Trusts with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Capital Securities, the Guarantees and
the Subordinated Debt Securities. This Prospectus does not con tain all of the
information set forth in such Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission, although
it does include a summary of the material terms of the Indenture and the
Declarations of Trust. Reference is made to such Registration Statement and to
the exhibits relating thereto for further information with respect to the
Company, the Trusts, the Capital Securities, the Guarantees and the Subordinated
Debt Securities. Any statements contained herein concerning the provisions of
any document filed as an exhibit to the Registration Statement or otherwise
filed with the Commission or incorporated by reference herein are not
necessarily complete, and, in each instance, reference is made to the copy of
such document so filed for a more complete description of the matter involved.
Each such statement is qualified in its entirety by such reference.
Citicorp is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Reports, proxy statements and other information concerning Citicorp
can be inspected and copied at prescribed rates at the Commission's Public
Reference Room, Judiciary Plaza, 450 Fifth Street, Northwest, Washington, D.C.
20549, as well as the following Regional Offices of the Commission: 7 World
Trade Center, New York, New York 10048; and Citicorp Center, 500 West Madison
Street, Chicago, Illinois 60661. Copies of such material may be obtained by mail
from the Commission's Public Reference Section at prescribed rates. If
available, such reports and other information may also be accessed through the
Commission's electronic data gathering, analysis and retrieval system ("EDGAR")
via electronic means, including the Commission's web site on the Internet
(http://www.sec.gov). Such reports, proxy statements and other information may
also be inspected at the offices of the New York Stock Exchange, the American
Stock Exchange, the Chicago Stock Exchange and the Pacific Stock Exchange.
No separate financial statements of any of the Trusts have been included
herein. Citicorp does not consider that such financial statements would be
material to holders of the Capital Securities because (i) all of the voting
securities of each of the Trusts will be owned, directly or indirectly, by
Citicorp, a reporting company under the Exchange Act, (ii) each of the Trusts
has no independent operations but exists for the exclusive purposes of issuing
its Capital Securities in exchange for Depositary Shares, issuing its Common
Securities and holding Subordinated Debt Securities issued by Citicorp and (iii)
Citicorp's obligations described herein to provide certain indemnities in
respect of and be responsible for certain costs, expenses, debts and liabilities
of each Trust under the Indenture and pursuant to the Declaration of each Trust,
the Guarantee issued with respect to the Capital Securities issued by that
Trust, the Subordinated Debt Securities held by that Trust and the related
Indenture, taken together, constitute a full and unconditional guarantee on a
subordinated basis of payments due on the Capital Securities. See "Description
of the Subordinated Debt Securities" and "Description of the Guarantees."
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The Trusts are not currently subject to the information reporting
requirements of the Exchange Act. The Trusts will become subject to such
requirements upon the effectiveness of the Registration Statement, although they
intend to seek and expect to receive exemptions therefrom.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by Citicorp pursuant to
Section 13 of the Exchange Act are incorporated by reference in this Prospectus:
(a) Annual Report on Form 10-K for the fiscal year ended December 31,
1995;
(b) Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996,
June 30, 1996 and September 30, 1996; and
(c) Current Reports on Form 8-K dated January 16, 1996, April 16, 1996,
July 22, 1996, October 15, 1996 and January 21, 1997.
All documents filed by Citicorp pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the latest Expiration Date for any Offer shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing of
such documents. Any statement contained in this Prospectus or in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or therein (or in any subsequently filed document
that also is or is deemed to be incorporated by reference herein or therein)
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
Citicorp will provide without charge to each person to whom a copy of this
Prospectus has been delivered, upon the written or oral request of such person,
a copy of any or all of the documents referred to above which have been or may
be incorporated by reference herein (other than exhibits to such documents
unless such exhibits are specifically incorporated by reference in such
documents).
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON
REQUEST FROM THE INVESTOR RELATIONS DEPARTMENT, CITICORP, 399 PARK AVENUE, NEW
YORK, NEW YORK 10043, (212) 559-2718. IN ORDER TO ENSURE TIMELY DELIVERY OF THE
DOCUMENTS, ANY REQUESTS SHOULD BE MADE BY _____________, 1997.
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PROSPECTUS SUMMARY
The following summary does not purport to be complete and is qualified in
its entirety by the detailed information contained elsewhere in, or incorporated
by reference in, this Prospectus. Capitalized terms used in this Prospectus
Summary and not defined herein shall have the respective meanings ascribed to
them elsewhere in this Prospectus.
Citicorp
Citicorp, whose principal subsidiary is Citibank, N.A. ("Citibank"), is a
holding company incorporated under the laws of the State of Delaware on December
4, 1967. Through its subsidiaries and affiliates, including Citibank, Citicorp
is a global financial services organization serving the financial needs of
individuals, businesses, governments and financial institutions in the United
States and throughout the world.
The principal office of Citicorp is located at 399 Park Avenue, New York,
New York 10043, telephone number (212) 559-1000.
The Trusts
Each Trust is a statutory business trust formed under Delaware law
pursuant to (i) a declaration of trust, dated as of ___________, 1997, executed
by Citicorp, as sponsor (the "Sponsor"), and the trustees of such Trust
(respectively, the "Trustees") and (ii) the filing of a certificate of trust
with the Secretary of State of the State of Delaware on ______________, 1997.
Each declaration will be amended and restated in its entirety (for each Trust,
as so amended and restated, the "Declaration") substantially in the form filed
as an exhibit to the Registration Statement of which this Prospectus forms a
part. Each Declaration will be qualified as an indenture under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). Upon issuance of
a Trust's Capital Securities, the purchasers thereof will own all of the issued
and outstanding Capital Securities of such Trust. Citicorp will directly or
indirectly acquire all of the Common Securities of each Trust in an aggregate
liquidation amount equal to approximately 3 percent of the total capital of the
Trust. Each Trust exists for the exclusive purposes of (i) issuing (a) its
Capital Securities in exchange for Depositary Shares validly tendered and
accepted in its Offer and delivering such Depositary Shares to Citicorp in
consideration of the deposit by Citicorp in the Trust, as trust assets, of
Subordinated Debt Securities having an aggregate stated principal amount equal
to the aggregate stated liquidation amount of such Capital Securities and an
interest rate equal to the distribution rate of such Capital Securities, and (b)
its Common Securities to Citicorp in exchange for cash and investing the
proceeds thereof in an equivalent amount of such Subordinated Debt Securities
and (ii) engaging in only those other activities necessary or incidental
thereto.
Pursuant to the Declaration of each Trust, the number of Trustees of each
Trust will initially be three. Two of the Trustees (the "Regular Trustees") of
each Trust will be persons who are employees or officers of, or who are
affiliated with, Citicorp. The third Trustee will be a financial institution
that is unaffiliated with Citicorp, which Trustee will serve as institutional
trustee under the Declaration and as indenture trustee for the purposes of
compliance with the provisions of the Trust Indenture Act (the "Institutional
Trustee"). Initially, Wilmington Trust Company will be the Institutional Trustee
for each Trust until removed or replaced by the holder
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of the Common Securities. For purposes of compliance with the provisions of the
Trust Indenture Act, Wilmington Trust Company will also act as trustee (the
"Guarantee Trustee") under the Guarantee for each Trust and as Debt Trustee (as
defined herein) under the Indenture (as defined herein). Wilmington Trust
Company will also act as Delaware Trustee under each Declaration for purposes of
compliance with the Delaware Business Trust Act (the "Trust Act"). See
"Description of the Guarantees" and "Description of the Capital Securities --
Voting Rights".
The Institutional Trustee will hold title to the Subordinated Debt
Securities held by each Trust for the benefit of the holders of the Trust
Securities of such Trust and will have the power to exercise all rights, powers
and privileges under the Indenture as the holder of the Subordinated Debt
Securities. In addition, for each Trust the Institutional Trustee will maintain
exclusive control of a segregated non-interest bearing bank account (each a
"Property Account") to hold all payments made in respect of such Subordinated
Debt Securities for the benefit of the holders of the Trust Securities of such
Trust. The Institutional Trustee will make payments of distributions and
payments on liquidation, redemption and otherwise to the holders of the Trust
Securities of such Trust out of funds from the Trust's Property Account. The
Guarantee Trustee will hold the Guarantee relating to the Trust's Capital
Securities for the benefit of the holders of the Capital Securities of such
Trust. Citicorp, as the direct or indirect holder of all Common Securities of
each Trust, will have the right to appoint, remove or replace any Trustee and to
increase or decrease the number of Trustees of each Trust, subject to certain
restrictions. Citicorp will pay all fees and expenses related to the Trusts and
the issuance of the Trust Securities.
Certain Potential Benefits and Risks to Investors
Prospective investors should carefully review the information contained
elsewhere in this Prospectus prior to making a decision regarding an Offer and
should particularly consider the following matters:
Potential Benefits to Exchanging Holders
o The cash distributions rate on the Capital Securities will be higher
than the dividend rate on the Series of Preferred Stock underlying
the Related Depositary Shares. See "Comparison of Capital Securities
and Depositary Shares" and the cover page hereof.
o Dividends on the Series of Preferred Stock are noncumulative, except
in the case of the Series 22 Preferred Stock. Interest will accrue
on the Subordinated Debt Securities so long as they are outstanding,
including during the continuance of an Extension Period. See
"Description of the Subordinated Debt Securities".
o The respective Series of Preferred Stock may be redeemed by
Citicorp, at its option, in whole or in part, at specified times
prior to 2002, whereas the Capital Securities may not be redeemed by
Citicorp prior to May 15, 2002, unless a Tax Event or a Regulatory
Capital Event shall have occurred. See "Comparison of Capital
Securities and Depositary Shares", "Description of the Preferred
Stock and Depositary Shares" and "Description of the Capital
Securities".
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o Although the obligations of Citicorp under the Subordinated Debt
Securities are unsecured and will be subordinated and junior in
right of payment to all Senior Indebtedness of Citicorp, they will
rank pari passu with Citicorp's other general unsecured creditors
and will be senior to all capital stock of Citicorp now or hereafter
issued by Citicorp (including each Series of Preferred Stock
underlying the Depositary Shares). See "Description of the
Subordinated Debt Securities".
o While no dividends are required to be paid with respect to the
Depositary Shares, interest payments on each series of Subordinated
Debt Securities, and therefore distributions on the related Capital
Securities, may not be deferred for more than 20 consecutive
quarterly interest periods. Moreover, during any such Extension
Period, (i) subject to certain permitted exceptions, Citicorp shall
not declare or pay any dividend on, make a distribution with respect
to, or redeem, purchase or acquire, or make a liquidation payment
with respect to, any of its capital stock and (ii) Citicorp shall
not make any payment of interest, principal or premium, if any, on
or repay, repurchase or redeem any debt securities issued by
Citicorp that rank pari passu with or junior in right or payment to
the Subordinated Debt Securities. See "Description of the
Subordinated Debt Securities--Option to Extend Interest Payment
Period". Citicorp has no present intention of exercising its right
to defer payments of interest on any of the Subordinated Debt
Securities. However, should Citicorp determine to exercise such
right in the future with respect to any series of Subordinated Debt
Securities, the market price of the related Capital Securities is
likely to be adversely affected. To date Citicorp has made each
quarterly dividend payment with respect to the Depositary Shares on
the scheduled dividend payment date.
o To the extent Depositary Shares are validly tendered and accepted,
the Offers will allow Citicorp to achieve certain tax efficiencies
because, in contrast to dividend payments with respect to the
Preferred Stock underlying the Depositary Shares which are not
deductible by Citicorp, under current law Citicorp will be able to
deduct interest payments on the Subordinated Debt Securities for
United States federal income tax purposes. Such tax efficiencies may
give rise to an incremental increase in cash flow to Citicorp. See
"The Offers -- Purpose of the Offers."
o So long as payments of interest and other payments are made when due
on the Subordinated Debt Securities held by each Trust, such
payments will be sufficient to cover cash distributions and other
payments made on the related Trust Securities because (i) the
aggregate principal amount of Subordinated Debt Securities deposited
as trust assets in each Trust will be equal to the sum of (a) the
aggregate stated liquidation amount of the Capital Securities issued
by such Trust in exchange for the Related Depositary Shares accepted
in its Offer and (b) the amount of proceeds received by such Trust
from the issuance of its Common Securities to Citicorp, which
proceeds will be used by the Trust to purchase an equal principal
amount of such Subordinated Debt Securities, (ii) the interest rate
and interest and other payment dates on such Subordinated Debt
Securities will match the distribution rate and distribution and
other payment dates for the related Trust Securities, (iii) each
Declaration provides that Citicorp shall pay all debts and
obligations (other than with respect to the Trust Securities) and
all costs and
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expenses of the Trust, and (iv) each Declaration further provides
that the Trustees shall not permit the Trust to, among other things,
engage in any activity that is not consistent with the purpose of
the Trust. See "The Trusts," "Description of the Capital
Securities," "Description of the Subordinated Debt Securities," and
"Effect of Obligations Under the Subordinated Debt Securities and
the Guarantees."
o If a Declaration Event of Default (as defined herein) occurs and is
continuing under a Declaration, then the holders of the affected
Capital Securities would be able to rely on the enforcement by the
Institutional Trustee of its rights as a holder of the Subordinated
Debt Securities held by the Trust against Citicorp. In addition, the
holders of a majority in liquidation amount of the Capital
Securities of a Trust will have the right to direct the time, method
and place of conducting any proceeding for any remedy available to
the Institutional Trustee or to direct the exercise of any trust or
power conferred upon the Institutional Trustee under the
Declaration, including the right to direct the Institutional Trustee
to exercise the remedies available to it as a holder of the
Subordinated Debt Securities held by the Trust. If the Institutional
Trustee fails to enforce its rights under the relevant Subordinated
Debt Securities, a holder of the affected Capital Securities may
institute a legal proceeding directly against Citicorp to enforce
the Institutional Trustee's rights under such Subordinated Debt
Securities without first instituting any legal proceeding against
the Institutional Trustee or any other person or entity.
Notwithstanding the foregoing, if a Declaration Event of Default has
occurred with respect to a Trust and is continuing, and such event
is attributable to the failure of Citicorp to pay interest or
principal on the related Subordinated Debt Securities on the date
such interest or principal is otherwise payable (or in the case of
redemption, on the redemption date), then a holder of the Capital
Securities of such Trust may directly institute a proceeding for
enforcement of payment to such holder of the principal of or
interest on the related Subordinated Debt Securities having a
principal amount equal to the aggregate liquidation amount of the
Capital Securities of such holder (a "Direct Action") on or after
the respective due date specified in such Subordinated Debt
Securities. In connection with such Direct Action, Citicorp will be
subrogated to the rights of such holder of Capital Securities under
the relevant Declaration to the extent of any payment made by
Citicorp to such holder of Capital Securities in such Direct Action.
The holders of Capital Securities will not be able to exercise
directly or indirectly any other remedy available to the holder of
the Subordinated Debt Securities. See "Description of the Capital
Securities -- Declaration Events of Default."
Potential Risks to Exchanging Holders
o Participation in an Offer will be a taxable event for holders of
Related Depositary Shares. See "Risk Factors and Special
Considerations Relating to the Offers-- Exchange of Depositary
Shares for Capital Securities is a Taxable Event."
o The obligations of Citicorp under each series of Subordinated Debt
Securities are (i) subordinate and junior in right of payment to all
present and future Senior Indebtedness of Citicorp (including all
subordinated debt securities issued by
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Citicorp (other than securities designated as its Junior
Subordinated Deferrable Interest Debentures)), which Senior
Indebtedness aggregated approximately $__ billion at December 31,
1996, (ii) pari passu with all Trade Credit of Citicorp and (iii)
senior to all capital stock now or hereafter issued by Citicorp. The
obligations of Citicorp under the Guarantees are subordinate and
junior in right of payment to all other liabilities of Citicorp and
rank pari passu with the most senior preferred stock issued, from
time to time, if any, by Citicorp and with any other guarantee by
Citicorp in respect of any preferred stock or equity interest of any
affiliate. See "Risk Factors and Special Considerations Relating to
the Offers -- Ranking of Subordinated Obligations Under the
Guarantees and Subordinated Debt Securities."
o Should Citicorp not make interest or other payments on any
Subordinated Debt Securities for any reason, the Trust holding such
Subordinated Debt Securities will not make distributions or other
payments on the Trust Securities and will not have funds available
therefor. In such event, holders of the Capital Securities of such
Trust would not be able to rely on the related Guarantee since the
Guarantee covers distributions and other payments on the Capital
Securities only if and to the extent that Citicorp has made a
payment to the Trust of interest or principal on the Subordinated
Debt Securities deposited in such Trust as trust assets. In
addition, the interest payment period on any series of Subordinated
Debt Securities may be extended from time to time under certain
circumstances by Citicorp in its sole discretion, for up to 20
consecutive quarterly periods, such extension period not to extend
beyond the Stated Maturity of the Subordinated Debt Securities. See
"Risk Factors and Special Considerations Relating to the Offers --
Rights Under the Guarantees" and "--Option to Extend Interest
Payment Period."
o If Citicorp elects to defer payments of interest on the Subordinated
Debt Securities held by a Trust by extending the interest period
thereon, distributions on such Trust's Capital Securities would also
be deferred but the affected Trust would continue to accrue income
(as original issue discount ("OID")) in respect of such Subordinated
Debt Securities which would be taxable to beneficial owners of such
Capital Securities. As a result, beneficial owners of such Capital
Securities during an Extension Period would include their pro rata
share of the interest in gross income in advance of the receipt of
cash. See "Risk Factors and Special Considerations Relating to the
Offers -- Option to Extend Interest Payment Period."
o Holders of Capital Securities will have limited voting rights and
will not be able to appoint, remove or replace, or to increase or
decrease the number of, Trustees of their Trust, which rights are
vested exclusively in the holder of the Common Securities. See "Risk
Factors and Special Considerations Relating to the Offers -- Limited
Voting Rights" and "Description of the Capital Securities -- Voting
Rights." Holders of Depositary Shares also have limited voting
rights. However, with certain exceptions, in the event that
dividends on one or more Series of the Preferred Stock are in
arrears and unpaid for such number of dividend periods, whether or
not consecutive, which shall in the aggregate contain not less than
540 days, the Board of Directors of Citicorp (the "Citicorp Board")
will be increased
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by two directors and the holders of such Preferred Stock, together
with the holders of all other series of preferred stock then
entitled to vote thereon, would be entitled to elect two directors
of the expanded Citicorp Board at the next annual meeting of
shareholders. See "Description of the Preferred Stock and Depositary
Shares -- Preferred Stock -- Voting Rights."
o The Subordinated Debt Securities, and as a result, the Capital
Securities, are redeemable by Citicorp, in whole or in part, from
time to time, on or after May 15, 2002, or prior to May 15, 2002, in
certain circumstances, upon the occurrence of a Tax Event or a
Regulatory Capital Event. See "Risk Factors and Special
Considerations Relating to the Offers -- Tax Event or Regulatory
Capital Event Redemption or Distribution". Prior to any such
redemption, Citicorp will obtain any required regulatory approvals.
The Depositary Shares and the underlying Preferred Stock are
redeemable at the option of Citicorp, in whole or in part, on or
after specified dates prior to 2002. See "Comparison of Capital
Securities and Depositary Shares" and "Description of Preferred
Stock and Depositary Shares".
o Unlike dividends paid on Depositary Shares, distributions made on
the Capital Securities are not eligible for the dividends received
deduction for corporate holders.
o While application will be made to list the Capital Securities of
each Trust on the NYSE, the Capital Securities of each Trust are a
new issue of securities with no established trading market. In
addition, the liquidity of the Capital Securities of each Trust will
be affected by the number of Related Depositary Shares exchanged in
the Offer. See "Risk Factors and Special Considerations Relating to
the Offers - - Lack of Established Trading Market for Capital
Securities".
o Upon the occurrence of a Tax Event or a Regulatory Capital Event,
Citicorp will have the right to liquidate any Trust and cause the
Subordinated Debt Securities held by such Trust to be distributed to
the holders of its Trust Securities. While Citicorp will use its
best efforts in such a situation to have the Subordinated Debt
Securities listed on the NYSE, there is no guarantee that such
listing will take place or that a market will exist for the
Subordinated Debt Securities. See "Risk Factors and Special
Considerations Relating to the Offers -- Tax Event or Regulatory
Capital Event Redemption or Distribution."
Potential Risks to Non-Exchanging Holders
o The liquidity and trading market for untendered Depositary Shares
for a Series of Preferred Stock, and the terms upon which untendered
Depositary Shares could be sold, could be adversely affected to the
extent Depositary Shares for such Series are tendered and accepted
in the relevant Offer. In addition, following the Expiration Date,
and in accordance with and subject to applicable law, Citicorp may
from time to time acquire Depositary Shares in the open market, by
tender offer, subsequent exchange offer, redemption of the
underlying Preferred Stock or otherwise. To the extent that any such
acquisition of Depositary Shares causes the number of outstanding
Depositary Shares for any Series of Preferred Stock to be
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less than 100,000, the NYSE may delist such Depositary Shares from
the NYSE and the trading market for such outstanding Depositary
Shares for such Series of Preferred Stock could be adversely
affected. Citicorp's decision to make such acquisition is dependent
on many factors, including market conditions in effect at the time
of any contemplated acquisition. Accordingly, Citicorp cannot
predict whether and to what extent it will acquire any additional
Depositary Shares and the consideration to be paid therefor. See
"Risk Factors and Special Considerations Relating to the Offers--
Reduced Trading Market for Depositary Shares."
o The Subordinated Debt Securities will rank senior in right of
payment to each Series of Preferred Stock underlying untendered
Depositary Shares. See "Risk Factors and Special Considerations
Relating to the Offers -- Ranking of Subordinated Obligations Under
Subordinated Debt Securities and the Guarantees."
The Offers
The following description is equally applicable to each Offer by each
Trust to exchange its Capital Securities for the Related Depositary Shares.
Purpose of the Offers
The purpose of the Offers is to refinance the Preferred Stock underlying
the Depositary Shares with the relevant Capital Securities offered in exchange
therefor to achieve certain tax efficiencies while preserving Citicorp's
flexibility with respect to future financings. This refinancing will permit
Citicorp to deduct interest payable on the Subordinated Debt Securities for
United States federal income tax purposes; dividends payable on the Preferred
Stock are not deductible. Under the current capital adequacy guidelines of the
Board of Governors of the Federal Reserve System (the "FRB"), the exchange of
Capital Securities for Preferred Stock will also preserve unaffected Citicorp's
Tier 1 capital level. See "The Offers--Purpose of the Offers."
Terms of the Offers
Upon the terms and subject to the conditions set forth herein and in the
related Letter of Transmittal, each Trust hereby offers to exchange its Capital
Securities for up to the Maximum Number of Related Depositary Shares not owned
by Citicorp. Exchanges will be made on the basis of one Capital Security for
each Related Depositary Share validly tendered and accepted for exchange in an
Offer. See "The Offers--Terms of the Offers."
Expiration Date; Withdrawals
Upon the terms and conditions of its Offer, each Trust will accept for
exchange up to the Maximum Number of Related Depositary Shares validly tendered
and not withdrawn prior to 12:00 Midnight, New York City time, on , 1997, or if
such Offer is extended by the Trust, in its sole discretion, the latest date and
time to which such Offer has been extended (with respect to a particular Offer,
its "Expiration Date"). Tenders of Related Depositary Shares pursuant to an
Offer may be withdrawn at any time prior to the Offer's Expiration Date and,
unless accepted for exchange by the Trust, may be withdrawn after the expiration
of 40 Business
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Days from the date of this Prospectus. A "Business Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions are authorized or obligated by law or executive order to close in
New York City. See "The Offers -- Expiration Date; Extensions; Amendments;
Termination" and -- Withdrawal of Tenders." Tenders must be made to the Exchange
Agent in order to be valid.
Conditions to the Offers; Extensions; Amendments; Termination
Consummation of each Offer is conditioned on, among other things, tenders
by a sufficient number of holders of Depositary Shares to meet the Minimum
Distribution Condition, which condition may not be waived. See "The Offers --
Conditions to the Offers" and "-- Expiration Date; Extensions; Amendments;
Termination."
Each Trust expressly reserves the right, in its sole discretion, subject
to applicable law, to (i) terminate its Offer, and not accept for exchange any
Related Depositary Shares and promptly return the Depositary Shares, upon the
failure of any condition specified above or under "The Offers -- Conditions to
the Offers, (ii) waive any condition to its Offer (other than the Minimum
Distribution Condition) and accept up to the Maximum Number of Related
Depositary Shares previously tendered pursuant to its Offer, (iii) extend the
Expiration Date of its Offer and retain all Related Depositary Shares tendered
pursuant to its Offer until the Expiration Date, subject, however, to all
withdrawal rights of holders, see "The Offers -- Withdrawal of Tenders," (iv)
amend the terms of its Offer, (v) modify the amount or form of the consideration
to be paid pursuant to its Offer, or (vi) terminate its offer, not accept for
exchange the Related Depositary Shares and promptly return such Depositary
Shares at any time on or prior to the Expiration Date, for any reason. Any
amendment applicable to an Offer will apply to all Depositary Shares tendered
pursuant to the Offer. The minimum period during which an Offer must remain open
following material changes in the terms of the Offer or the information
concerning the Offer, other than a decrease in the number of Related Depositary
Shares sought or a change in the amount or form of consideration offered,
depends upon the facts and circumstances, including the materiality of such
terms or information. See "The Offers -- Conditions to the Offers" and "--
Expiration Date; Extensions; Amendments; Termination."
Procedures for Tendering
Each Holder of Depositary Shares wishing to participate in an Offer must
(i) properly complete and sign the related Letter of Transmittal (or where
appropriate, an Agent's Message (as defined herein)) or a facsimile thereof (all
references in this Prospectus to the Letter of Transmittal shall deemed to
include a facsimile thereof) in accordance with the instructions contained
herein and in the Letter of Transmittal, together with any required signature
guarantees, and deliver the same to Citibank, as Exchange Agent, at one of its
addresses forth on the back cover page thereof, prior to the related Expiration
Date and either (a) certificates for Depositary Receipts representing the
Depositary Shares to be tendered must be received by the Exchange Agent at such
address or (b) such Depositary Receipts must be transferred pursuant to the
procedures for book-entry transfer described herein and a confirmation of such
book-entry transfer must be received by the Exchange Agent, in each case prior
to the Expiration Date, or (ii) comply with the guaranteed delivery procedures
described herein. See "The Offers -- Procedures for Tendering."
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IN ORDER TO PARTICIPATE IN AN OFFER, HOLDERS OF RELATED DEPOSITARY SHARES
MUST SUBMIT THE LETTER OF TRANSMITTAL AND COMPLY WITH THE OTHER PROCEDURES FOR
TENDERING IN ACCORDANCE WITH THE INSTRUCTIONS CONTAINED HEREIN AND IN THE LETTER
OF TRANSMITTAL PRIOR TO THE EXPIRATION DATE FOR SUCH OFFER.
LETTERS OF TRANSMITTAL, DEPOSITARY RECEIPTS AND ANY OTHER REQUIRED
DOCUMENTS SHOULD BE SENT ONLY TO THE EXCHANGE AGENT, AND NOT TO CITICORP, THE
TRUSTS, THE DEALER MANAGER OR THE INFORMATION AGENT.
Special Procedure for Beneficial Owners
Any beneficial owner whose Depositary Receipts are registered in the name
of a broker, dealer, commercial bank, trust company or other nominee and who
wishes to tender its Depositary Shares should contact such registered Holder
promptly and instruct such registered Holder to tender on such beneficial
owner's behalf. If such beneficial owner wishes to tender on its behalf, such
owner must, prior to completing and executing the Letter of Transmittal and
delivering the Depositary Receipts for its Depositary Shares, either make
appropriate arrangements to register ownership of such Depositary Receipts in
such owner's name or obtain a properly completed stock power from the registered
Holder. The transfer of registered ownership may take considerable time and may
not be able to be completed prior to the Expiration Date. See "The Offers --
Procedures for Tendering -- Special Procedures for Beneficial Owners."
Guaranteed Delivery Procedures
If a Holder desires to accept an Offer and time will not permit the Letter
of Transmittal or the Related Depositary Shares to reach the Exchange Agent
before the Offer's Expiration Date or the procedures for book-entry transfer
cannot be completed on a timely basis, a tender may be effected in accordance
with the guaranteed delivery procedures set forth in "The Offers -- Procedures
for Tendering -- Guaranteed Delivery."
Acceptance of Shares
Upon the terms and subject to the conditions of relevant Offer, including
the Minimum Distribution Condition, each Trust will accept for exchange up to
the Maximum Number of Related Depositary Shares validly tendered and not
withdrawn prior to the Expiration Date. If more than the Maximum Number of
Related Depositary Shares are validly tendered for exchange pursuant to an Offer
and not withdrawn on or prior to the Expiration Date for such Offer, the
applicable Trust will accept such shares on a pro rata basis, as described below
under "The Offers -- Terms of the Offers". Each Trust expressly reserves the
right, in its sole discretion, to delay acceptance for exchange of Related
Depositary Shares tendered under its Offer and the delivery of the Capital
Securities with respect to the Depositary Shares accepted for exchange (subject
to Rules 13e-4 and 14e-1 under the Exchange Act, which requires that Citicorp
and each Trust consummate the Offers or return the Depositary Shares deposited
by or on behalf of the Holders thereof promptly after the termination or
withdrawal of the Offer), or to amend, withdraw or terminate its Offer, at any
time prior to the Expiration Date for any of the reasons set forth in
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"The Offers -- Conditions to the Offers" and "-- Expiration Date; Extensions;
Amendments; Termination."
If a Trust decides, in its sole discretion, to decrease the number of
Related Depositary Shares sought in its Offer or to increase or decrease the
consideration offered to holders of Related Depositary Shares, and if such Offer
is scheduled to expire less than ten Business Days from and including the date
that notice of such increase or decrease is first published, sent or given in
the manner specified in "The Offers -- Terms of the Offers" and "-- Expiration
Date; Extensions; Amendments; Termination," then such Offer will remain open for
a minimum of ten Business Days from and including the date of such notice.
All Depositary Receipts for Depositary Shares not accepted pursuant to an
Offer will be returned to the tendering Holders at Citicorp's expense as
promptly as practicable following the Expiration Date for such Offer.
Delivery of Capital Securities
Subject to the terms and conditions of the Offer, the delivery of the
Capital Securities to be issued pursuant to an Offer will occur as promptly as
practicable following the related Expiration Date. See "The Offers -- Terms of
the Offers" and "--Expiration Date; Extensions; Amendments; Terminations."
Description of Capital Securities and Subordinated Debt Securities
The Capital Securities of each Trust evidence preferred undivided
beneficial interests in the assets of the Trust. The Common Securities of each
Trust rank pari passu, and payments will be made thereon on a pro rata basis,
with the Capital Securities, except that upon the occurrence and during the
continuance of a Declaration Event of Default, the rights of the holders of the
Common Securities to receive payment of periodic distributions and payments upon
liquidation, redemption and otherwise will be subordinated to the rights of the
holders of the Capital Securities. Each Declaration does not permit the issuance
by the Trust of any securities other than its Trust Securities or the incurrence
of any indebtedness by the Trust. Pursuant to each Declaration, the
Institutional Trustee will own the Subordinated Debt Securities deposited in the
Trust for the benefit of the holders of the Trust Securities. The payment of
distributions out of money held by each Trust and payments upon redemption of
its Capital Securities or liquidation of each Trust, are guaranteed by Citicorp
to the extent described under "Description of the Guarantees." Each Declaration
defines an event of default with respect to the Trust Securities of the Trust (a
"Declaration Event of Default") as the occurrence and continuance of an "event
of default" under the related Indenture (an "Indenture Event of Default").
Distributions on the Capital Securities of the respective Trusts will be
at a fixed rate per annum, as set forth on the cover page hereof, of the stated
liquidation amount of $25 per Capital Security. Distributions in arrears will
bear interest thereon at such rate, compounded quarterly to the extent permitted
by law. The term "distribution" as used herein includes any such compounded
interest payable unless otherwise stated. The amount of distributions payable
for any period shorter than a full quarterly period will be computed on the
basis of a 360-day year of twelve 30-day months. Distributions on the Capital
Securities will be cumulative, will accrue from the related Expiration Date and,
except as otherwise described below, will be payable
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quarterly in arrears on February 15, May 15, August 15 and November 15 of each
year, commencing May 15, 1997. In addition, holders of Capital Securities will
be entitled to an additional cash distribution in an amount equal to, and in
lieu of, dividends accumulating and unpaid from February 15, 1997 through the
applicable Expiration Date on the Series of Preferred Stock underlying their
Related Depositary Shares accepted for exchange, such additional distribution to
be made on May 15, 1997 to holders of such Capital Securities on the record date
for such distribution.
The distribution rate and the distribution and other payment dates for the
Capital Securities of a Trust will correspond to the interest rate and the
interest and other payment dates on the Subordinated Debt Securities deposited
in such Trust as trust assets. As a result, if principal or interest is not paid
on such Subordinated Debt Securities, including as a result of Citicorp's
election to extend the interest payment period on such Subordinated Debt
Securities as described below, the Trust holding such Subordinated Debt
Securities will not make payments on its Trust Securities. Citicorp has the
right under the Indentures, so long as no Indenture Event of Default shall have
occurred and be continuing, to defer payment of interest on any series of
Subordinated Debt Securities by extending the interest payment period from time
to time on such Subordinated Debt Securities, which, if exercised, would defer
quarterly distributions on the related Capital Securities (though such
distributions would continue to accrue with interest since interest would
continue to accrue on the Subordinated Debt Securities) during any such
Extension Period. Such right to extend the interest payment period is limited to
a period not exceeding 20 consecutive quarterly periods and such period may not
extend beyond the Stated Maturity of the Subordinated Debt Securities. In the
event that Citicorp exercises this right, then (i) Citicorp shall not declare or
pay any dividend on, make a distribution with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital stock
(other than (a) purchases or acquisitions of shares of Citicorp common stock in
connection with the satisfaction by Citicorp of its obligations under any
employee benefit plans or any other contractual obligations of Citicorp (other
than a contractual obligation ranking pari passu with or junior to the
Subordinated Debt Securities) entered into prior to the date of issuance of the
Subordinated Debt Securities, (b) as a result of a reclassification of Citicorp
capital stock or the exchange or conversion of one class or series of Citicorp
capital stock for another class or series of Citicorp capital stock or (c) the
purchase of fractional interests in shares of Citicorp's capital stock pursuant
to the conversion or exchange provisions of such Citicorp capital stock or the
security being converted or exchanged) and (ii) Citicorp shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities issued by Citicorp that rank pari passu with or
junior in right of payment to the Subordinated Debt Securities. Prior to the
termination of any such Extension Period, Citicorp may further extend the
interest payment period; provided, that such Extension Period, together with all
such previous and further extensions thereof, may not exceed 20 consecutive
quarters or extend beyond the Stated Maturity of the Subordinated Debt
Securities. Upon the termination of any Extension Period and the payment of all
amounts then due, Citicorp may select a new Extension Period, subject to the
above requirements. If distributions are deferred on Capital Securities of a
Trust, the deferred distributions and accrued interest thereon shall be paid to
holders of record of such Capital Securities as they appear on the books and
records of the Trust on the record date next following the termination of such
Extension Period. See "Risk Factors and Special Considerations Relating to the
Offers--Rights Under the Guarantees" and "--Option to Extent Interest Payment
Period." If Citicorp elects to defer payment of interest on any series of
Subordinated Debt Securities by extending the interest period thereon,
distributions on the Capital Securities of the related Trust
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would also be deferred but the Trust would continue to accrue income (as OID) in
respect of such Subordinated Debt Securities which would be taxable to
beneficial owners of such Capital Securities. As a result, beneficial owners of
such Capital Securities during an Extension Period would include their pro rata
share of the interest in gross income in advance of the receipt of cash. See
"Risk Factors and Special Considerations Relating to the Offers -- Option to
Extend Interest Payment Period."
If the Institutional Trustee shall be the sole holder of a particular
series of Subordinated Debt Securities, Citicorp shall give the Regular Trustees
and the Institutional Trustee of the Trust notice of its selection of such
Extension Period one Business Day prior to the earlier of (i) the date
distributions on the related Capital Securities are payable or (ii) the date the
Regular Trustees are required to give notice to the NYSE or any other applicable
self-regulatory organization, or to the Holders of the Capital Securities, of
the record date or the date such distribution is payable. The Regular Trustees
shall give notice of Citicorp's selection of such Extension Period to the
holders of such Capital Securities. If the Institutional Trustee shall not be
the sole holder of a particular series of Subordinated Debt Securities, Citicorp
shall give the holders of such Subordinated Debt Securities notice of its
selection of such Extension Period ten Business Days prior to the earlier of (i)
the Interest Payment Date (as defined herein) or (ii) the date upon which
Citicorp is required to give notice to the NYSE (or other applicable
self-regulatory organization) or to holders of such Subordinated Debt Securities
of the record or payment date of such related interest payment. See "Description
of the Subordinated Debt Securities -- Option to Extend Interest Payment
Period."
There will be deposited in each Trust as trust assets (i) one series of
Subordinated Debt Securities having an aggregate principal amount equal to the
aggregate stated liquidation amount of the Capital Securities issued by such
Trust in exchange for the Depositary Shares accepted in the Offer by such Trust
and (ii) Subordinated Debt Securities of the same series, having an aggregate
principal amount equal to the amount of proceeds received by such Trust from the
sale of its Common Securities to Citicorp. Such Subordinated Debt Securities
will bear interest at a rate equal to the rate of distributions on the Capital
Securities of the Trust to which such Subordinated Debt Securities are issued.
Distributions on the Capital Securities must be paid on the dates payable to the
extent that the Trust has funds available for the payment of such distributions
in its Property Account. Each Trust's funds available for distribution to the
holders of the Capital Securities will be limited to payments received from
Citicorp on the related Subordinated Debt Securities. See "Description of the
Subordinated Debt Securities." The payment of distributions out of moneys held
by each Trust is guaranteed by Citicorp on a subordinated basis as and to the
extent set forth under "Description of the Guarantees." The Guarantees cover
distributions and other payments on the Capital Securities only if and to the
extent Citicorp has made a payment to the applicable Trust of interest or
principal on the Subordinated Debt Securities deposited in such Trust as trust
assets. The Guarantees, when taken together with Citicorp's obligations under
the Subordinated Debt Securities, the Indenture and the Declarations, including
its obligation to pay costs, expenses and certain liabilities of the Trusts,
constitutes a full and unconditional guarantee on a subordinated basis of
amounts due on the Capital Securities.
The Subordinated Debt Securities of all series will mature on ________
2027. Moreover, the Subordinated Debt Securities of each series are redeemable,
in whole or in part, at the option of Citicorp, at any time on or after May 15,
2002 or prior to May 15, 2002, in certain
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circumstances upon the occurrence of a Tax Event or a Regulatory Capital Event.
See "Description of the Subordinated Debt Securities." Upon the repayment of the
Subordinated Debt Securities held by such Trust, whether at maturity or upon
redemption, the proceeds from such repayment or payment shall simultaneously be
applied to redeem Trust Securities of such Trust having an aggregate liquidation
amount equal to the aggregate principal amount of the Subordinated Debt
Securities so repaid or redeemed at the Redemption Price; provided, that the
holders of Trust Securities shall be given not less than 30 nor more than 60
days' notice of such redemption. See "Description of the Subordinated Debt
Securities -- Optional Redemption." In the event that fewer than all of the
outstanding Capital Securities of a Trust are to be redeemed, the Capital
Securities will be redeemed by such Trust as described under "Description of
Capital Securities -- Book-Entry; Only Issuance -- The Depository Trust
Company." Prior to such distribution or redemption, Citicorp will obtain all
required regulatory approvals.
Citicorp will have the right upon the occurrence of a Tax Event or a
Regulatory Capital Event to liquidate any Trust and cause the Subordinated Debt
Securities held by such Trust to be distributed to the holders of the Trust
Securities. If the Subordinated Debt Securities held by a Trust are distributed
to the holders of the Capital Securities of such Trust, Citicorp will use its
best efforts to have the Subordinated Debt Securities listed on the NYSE or on
such other exchange as the Capital Securities of such Trust are then listed. See
"Description of the Capital Securities -- Tax Event Redemption or Distribution",
"--Regulatory Capital Event Redemption or Distribution" and "Description of the
Subordinated Debt Securities."
Each series of Subordinated Debt Securities will be issued pursuant to an
Indenture, dated as of December 17, 1996 (the "Base Indenture"), between
Citicorp and Wilmington Trust Company as Trustee (the "Debt Trustee"), as
supplemented by a Supplemental Indenture to be dated as of , 1997 (the Base
Indenture, as so supplemented for such series, is herein referred to as the
"Indenture"). See "Description of the Subordinated Debt Securities." The
Subordinated Debt Securities will be issued in multiple series. Citicorp will
issue a different series of Subordinated Debt Securities to each Trust. Each
series of Subordinated Debt Securities will bear interest from the date of
issuance at a fixed rate per annum equal to the distribution rate on the Trust
Securities issued by the Trust to which such series is issued. Interest will be
payable quarterly in arrears on February 15, May 15, August 15 and November 15
of each year, commencing on May 15, 1997; provided that, as described above, so
long as Citicorp shall not be in default in the payment of interest on a series
of Subordinated Debt Securities, Citicorp shall have the right to extend the
interest payment period of such series from time to time for a period not
exceeding 20 consecutive quarterly periods, provided that an Extension Period
may not extend beyond the Stated Maturity of the Subordinated Debt Securities.
Citicorp has no current intention of exercising its right to extend an interest
payment period. However, should Citicorp determine to exercise such right in the
future, the market price of the Capital Securities of the Trust holding such
series of Subordinated Debt Securities is likely to be affected. See "Risk
Factors and Special Considerations Relating to the Offers" and "Description of
the Subordinated Debt Securities -- Option to Extend Interest Payment Period."
Each series of Subordinated Debt Securities will also accrue interest on
the principal amount thereof, at a rate equal to the dividend rate on the
Preferred Stock underlying the Related Depositary Shares exchanged for the
Capital Securities of the Trust to which such series is issued, from February
15, 1997 through the Expiration Date for the related Offer, payable on May 15,
1997 to holders of the Subordinated Debt Securities on the record date for such
distribution. No
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deferral of interest will be permitted with respect to interest accruing from
February 15, 1997 through the Expiration Date.
The obligations of Citicorp under the Subordinated Debt Securities are
subordinate and junior in right of payment to all present and future Senior
Indebtedness of Citicorp. No payment may be made of the principal of (including
redemption payments) or, premium, if any, or interest on the Subordinated Debt
Securities at any time when (i) there is a default on any payment in respect of
any Senior Indebtedness, or (ii) any event of default with respect to any Senior
Indebtedness has occurred and is continuing, permitting the holders of such
Senior Indebtedness (or a trustee on behalf of the holders thereof) to
accelerate the maturity thereof or if any judicial proceeding shall be pending
with respect to any such default. As of December 31, 1996, Senior Indebtedness
of Citicorp aggregated approximately $__ billion. In addition, because Citicorp
is a holding company, its rights and the rights of its creditors, including
holders of the Subordinated Debt Securities, to participate in the assets of any
subsidiary upon the latter's liquidation or recapitalization will be subject to
the prior claims of the subsidiary's creditors, except to the extent that
Citicorp may itself be a creditor with recognized claims against the subsidiary.
There are no terms in the Capital Securities, the Subordinated Debt Securities
or the Guarantees that limit Citicorp's ability to incur additional
indebtedness, including indebtedness which ranks senior to the Subordinated Debt
Securities and the Guarantee. See "Description of the Guarantees -- Status of
the Guarantees" and "Description of the Subordinated Debt Securities --
Subordination."
Certain United States Federal Income Tax Considerations
The exchange of Depositary Shares for Capital Securities pursuant to each
Offer will be a taxable event. Gain or loss generally will be recognized in an
amount equal to the difference between the issue price on the applicable
Expiration Date of the Capital Securities received in the exchange and the
exchanging holder's tax basis in the Related Depositary Shares surrendered. For
this purpose, the issue price of Capital Securities received in exchange for
Related Depositary Shares on the Expiration Date will equal their fair market
value on that date. It is possible that, in certain circumstances, the issue
price of the Capital Securities may exceed their principal amount, in which case
a United States holder generally may elect to amortize such premium over the
term of the Capital Securities. Because the fair market value of the Capital
Securities will not be known until the Expiration Date, it is not possible, as
of the date of this Prospectus, to determine whether any such premium will exist
as of the Expiration Date. Holders of Depositary Shares who will actually or
constructively own shares of any class of Citicorp stock following the exchange
are advised to consult their tax advisors concerning the possibility that
receipt of the Capital Securities will be treated as a dividend, which will be
taxable as ordinary income to the Holder in an amount equal to the value of the
Capital Securities received (rather than capital gain or loss in an amount equal
to the difference between the issue price of the Capital Securities and the
Holder's basis in his or her Depositary Shares). See "United States Federal
Income Taxation - - Exchange of Depositary Shares for Capital Securities."
Assuming full compliance with the terms of the Indenture and the
applicable Declaration, each Trust will be classified for United States federal
income tax purposes as a grantor trust and not as an association taxable as a
corporation. Accordingly, for United States federal income tax purposes, each
Holder of Capital Securities generally will be considered the owner of an
undivided interest in the Subordinated Debt Securities held by such Trust, and
each Holder will be
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required to include in its gross income interest and original issue discount, if
any, accrued with respect to its allocable share of such Subordinated Debt
Securities.
Unlike dividends paid on Depositary Shares, distributions made on the
Capital Securities are not eligible for the dividends received deduction for
corporate holders.
Accounting for Exchange
The refinancing of the Preferred Stock underlying the Depositary Shares
with the respective Capital Securities will decrease Citicorp's stockholders'
equity in the amount of the fair market value of the Capital Securities that are
exchanged. Additionally, earnings applicable to common stockholders used in the
calculation of earnings per share will decrease by the excess of the fair market
value of the applicable Capital Securities over the carrying value of the
related Preferred Stock at the applicable Expiration Date. The financial
statements of the Trusts will be consolidated into Citicorp's consolidated
financial statements, with the Capital Securities included in Citicorp's balance
sheet as a component of Long-Term Debt. The financial statement footnotes of
Citicorp will reflect that the sole assets of the Trusts will be the
Subordinated Debt Securities. See "Capitalization of Citicorp" and "Accounting
Treatment."
Exchange Agent and Information Agent
Citibank has been appointed as Exchange Agent in connection with the
Offers. Questions and requests for assistance, requests for additional copies of
this Prospectus or a Letter of Transmittal and requests for Notices of
Guaranteed Delivery should be directed to which has been retained by Citicorp
and the Trusts to act as Information Agent for the Offers. The addresses and
telephone numbers of the Exchange Agent and the Information Agent are set forth
in "The Offers-- Exchange Agent and Information Agent" and on the outside back
cover of this Prospectus.
Dealer Manager
Merrill Lynch, Pierce, Fenner & Smith Incorporated has been retained as
Dealer Manager in connection with the Offer. For information regarding fees
payable to the Dealer Manager and Soliciting Dealers (as defined herein), see
"The Offers -- Dealer Manager; Soliciting Dealers".
RISK FACTORS AND SPECIAL CONSIDERATIONS RELATING TO THE OFFERS
Prospective exchanging holders of Depositary Shares who plan to
participate in an Offer should carefully consider, in addition to other
information set forth elsewhere in this Prospectus, the following:
Exchange of Depositary Shares for Capital Securities is a Taxable Event
The exchange of Depositary Shares for Capital Securities pursuant to an
Offer will be a taxable event. Generally, gain or loss will be recognized in an
amount equal to the difference between the fair market value on the applicable
Expiration Date of the holder's pro rata share of the related Subordinated Debt
Securities represented by the Capital Securities received in the
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exchange and the exchanging holder's tax basis in the Related Depositary Shares
exchanged therefor. The receipt of Capital Securities by holders who will
actually or constructively own shares of any class of Citicorp stock following
the exchange may, in certain circumstances, be treated as a dividend for tax
purposes, which will be taxable as ordinary income to the holder in an amount
equal to the value of the Capital Securities received in the exchange. See
"United States Federal Income Taxation--Exchange of Depositary Shares for
Capital Securities." All holders of Depositary Shares are advised to consult
their tax advisors regarding the United States federal, state, local and foreign
tax consequences of the exchange of Depositary Shares and the issuance of
Capital Securities.
See "Price Range of Depositary Shares."
Corporate Holders of Capital Securities not Entitled to Dividends Received
Deduction
Unlike dividends paid on Depositary Shares, distributions on the Capital
Securities are not eligible for the dividends received deduction for corporate
holders.
Ranking of Subordinate Obligations Under the Subordinated Debt Securities and
Guarantees
The obligations of Citicorp under the Subordinated Debt Securities are
subordinate and junior in right of payment to all present and future Senior
Indebtedness of Citicorp, including all outstanding subordinated debt securities
(other than those denominated as its Junior Subordinated Deferrable Interest
Debentures) issued by Citicorp. Citicorp's obligations under the Guarantees are
subordinate and junior in right of payment to all liabilities of Citicorp and
rank pari passu with the most senior preferred stock issued from time to time,
if any, by Citicorp and with any other guarantee by Citicorp in respect of any
preferred stock or equity interest of any affiliate. There are no terms in the
Capital Securities, the Subordinated Debt Securities or the Guarantees that
limit Citicorp's ability to incur additional indebtedness, including
indebtedness that ranks senior to the Subordinated Debt Securities and the
Guarantees. See "Description of the Guarantees -- Status of the Guarantees" and
"Description of the Subordinated Debt Securities -- Subordination".
Rights Under the Guarantees
If Citicorp were to default on its obligation to pay amounts payable on
the Subordinated Debt Securities or its other payment obligations to a Trust,
such Trust would lack available funds for the payment of distributions or
amounts payable on redemption of its Capital Securities or otherwise, and, in
such event, holders of the affected Capital Securities would not be able to rely
upon the related Guarantee for payment of such amounts. Instead, holders of the
affected Capital Securities would rely on the enforcement (i) by the
Institutional Trustee (as defined herein) of its rights as registered holder of
Subordinated Debt Securities against Citicorp pursuant to the terms of such
Subordinated Debt Securities or (ii) by such holder of its right against
Citicorp to enforce payments on the Subordinated Debt Securities. See
"Description of the Guarantees" and "Description of the Subordinated Debt
Securities".
Enforcement of Certain Rights by Holders of Capital Securities
If a Declaration Event of Default occurs and is continuing, the holders of
affected Capital Securities would rely on the enforcement by the Institutional
Trustee of its rights as a holder of the Subordinated Debt Securities against
Citicorp. In addition, the holders of a majority in liquidation
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amount of the affected Capital Securities will have the right to direct the
time, method, and place of conducting any proceeding for any remedy available to
the Institutional Trustee or to direct the exercise of any trust or power
conferred upon the Institutional Trustee under the Declaration, including the
right to direct the Institutional Trustee to exercise the remedies available to
it as a holder of the Subordinated Debt Securities. If the Institutional Trustee
fails to enforce its rights under the Subordinated Debt Securities, a holder of
affected Capital Securities may institute a legal proceeding directly against
Citicorp to enforce the Institutional Trustee's rights under the Subordinated
Debt Securities without first instituting any legal proceeding against the
Institutional Trustee or any other person or entity. Notwithstanding the
foregoing, if a Declaration Event of Default has occurred and is continuing and
such event is attributable to the failure of Citicorp to pay interest or
principal on the Subordinated Debt Securities on the date such interest or
principal is otherwise payable (or in the case of redemption, on the redemption
date), then a holder of affected Capital Securities may directly institute a
Direct Action for enforcement of payment to such holder of the principal of or
interest on the Subordinated Debt Securities having a principal amount equal to
the aggregate liquidation amount of the Capital Securities of such holder on or
after the respective due date specified in the Subordinated Debt Securities. In
connection with such Direct Action, Citicorp will be subrogated to the rights of
such holder of Capital Securities under the Declaration to the extent of any
payment made by Citicorp to such holder of Capital Securities in such Direct
Action. The holders of Capital Securities will not be able to exercise directly
any other remedy available to the holders of the Subordinated Debt Securities.
See "Description of the Capital Securities -- Declaration Events of Default."
Option to Extend Interest Payment Period
Citicorp has the right under the Indentures, so long as no Indenture Event
of Default shall have occurred and be continuing, to defer payments of interest
on any series of Subordinated Debt Securities by extending the interest payment
period at any time, and from time to time, on such Subordinated Debt Securities.
As a consequence of such an extension, distributions on the Capital Securities
of the Trust holding such Subordinated Debt Securities would be deferred (but
would continue to accrue, despite such deferral, with interest thereon
compounded quarterly) by the Trust during any such Extension Period. Such right
to extend the interest payment period for the Subordinated Debt Securities is
limited to a period not exceeding 20 consecutive quarterly interest periods.
Prior to the termination of any such Extension Period, Citicorp may further
extend the interest payment period; provided that such Extension Period,
together with all such previous and further extensions thereof, may not exceed
20 consecutive quarterly interest periods or extend beyond the maturity of the
Subordinated Debt Securities. Upon the termination of any Extension Period and
the payment of all amounts then due, Citicorp may commence a new Extension
Period, subject to the above requirements. See "Description of the Capital
Securities -- Distributions" and "Description of the Subordinated Debt
Securities -- Option to Extend Interest Payment Period."
Should Citicorp exercise its right to defer payments of interest by
extending the interest payment period, each Holder of affected Capital
Securities will be required to accrue income (as original issue discount) in
respect of the deferred interest allocable to its Capital Securities for United
States federal income tax purposes, even though such deferred interest is not
distributed to holders of Capital Securities. As a result, each such Holder of
Capital Securities will recognize income for United States federal income tax
purposes in advance of the receipt of cash and will not receive the cash from
the Trust related to such income if such Holder disposes of the Capital
Securities prior to the record date for the date on which distributions of such
amounts are made. Citicorp has no current intention of exercising its right to
defer payments of interest by extending the interest payment period
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on the Subordinated Debt Securities. However, should Citicorp determine to
exercise such right in the future, the market price of the affected Capital
Securities is likely to be affected. A holder that disposes of its Capital
Securities during an Extension Period, therefore, might not receive the same
return on its investment as a holder that continues to hold its Capital
Securities. In addition, as a result of the existence of Citicorp's right to
defer interest payments, the market price of the affected Capital Securities
(which represent undivided beneficial interests in the Subordinated Debt
Securities) may be more volatile than other securities that do not grant such
rights to the issuer. See "United States Federal Income Taxation -- Interest and
Original Issue Discount."
Tax Event or Regulatory Capital Event Redemption or Distribution
Upon the occurrence of a Tax Event or a Regulatory Capital Event, a Trust
may be dissolved, with the result that the Subordinated Debt Securities held by
such Trust would be distributed to the Holders of its Trust Securities in
connection with the liquidation of the Trust. In certain circumstances, Citicorp
will have the right to redeem the Subordinated Debt Securities in lieu of a
distribution of the Subordinated Debt Securities by the Trust. If Subordinated
Debt Securities are redeemed, the Trust holding such Subordinated Debt
Securities will redeem an equivalent amount of Trust Securities. See
"Description of the Capital Securities -- Tax Event Redemption or Distribution"
and "--Regulatory Capital Event Redemption or Distribution."
Under current United States federal income tax law, a distribution of
Subordinated Debt Securities upon the dissolution of the Trust would not be a
taxable event to Holders of the Capital Securities, but a dissolution of the
Trust in which Holders of the Capital Securities receive cash would be a taxable
event to such Holders. See "United States Federal Income Taxation -- Receipt of
Subordinated Debt Securities or Cash Upon Liquidation of the Trust."
Because holders of Capital Securities may receive Subordinated Debt
Securities upon the occurrence of a Tax Event or a Regulatory Capital Event,
prospective purchasers of Capital Securities are also making an investment
decision with regard to the Subordinated Debt Securities and should carefully
review all the information regarding the Subordinated Debt Securities contained
herein and in the accompanying Prospectus. See "Description of the Capital
Securities -- Tax Event Redemption or Distribution" and "--Regulatory Capital
Event Redemption or Distribution" and "Description of the Subordinated Debt
Securities."
Possible Tax Consequences of Sales of Capital Securities Between Record Dates
The Capital Securities may trade at a price that does not fully reflect
the value of any accrued but unpaid interest with respect to the underlying
Subordinated Debt Securities. If Citicorp exercises its right to defer payments
of interest, a Holder that disposes of Capital Securities between record dates
for payments of distributions thereon will be required to include any accrued
but unpaid interest on the related Subordinated Debt Securities through the date
of disposition in income as ordinary income and add such amount to the Holder's
adjusted tax basis in the pro rata share of the underlying Subordinated Debt
Securities deemed disposed of. To the extent the selling price is less than the
holder's adjusted tax basis (which will include all accrued but unpaid
interest), a holder will recognize a capital loss. Subject to certain limited
exceptions, capital losses cannot be applied to offset ordinary income for
United States federal income tax purposes. See "United States Federal Income
Taxation -- Interest and Original Issue Discount" and "-- Sales of Capital
Securities."
31
<PAGE>
Optional Redemption of the Subordinated Debt Securities
Citicorp will have the right to redeem the Subordinated Debt Securities,
in whole or in part, from time to time, on or after May 15, 2002 and earlier in
certain circumstances upon the occurrence of a Tax Event or a Regulatory Capital
Event. Prior to any such optional redemption, Citicorp will obtain all required
regulatory approvals. Upon any such redemption, each Trust holding the
Subordinated Debt Securities so redeemed will redeem an equivalent amount of its
Trust Securities.
Limited Voting Rights
Holders of Capital Securities will have limited voting rights and
generally will not be entitled to vote to appoint, remove or replace, or to
increase or decrease the number of, the Trustees of the related Trust. See
"Description of the Capital Securities-Voting Rights." In addition, holders of
Capital Securities will not have the voting rights possessed by holders of
Preferred Stock. See "Comparison of Capital Securities and Depositary Shares -
Voting Rights/Enforcement" and "Description of the Preferred Stock and
Depositary Shares".
Consequences of Highly Leveraged Transaction
The Indentures do not contain provisions that afford holders of the
Subordinated Debt Securities protection in the event of a highly leveraged
transaction, including a change of control, or other similar transactions
involving Citicorp that may adversely affect such holders. See "Description of
the Subordinated Debt Securities-General."
Lack of Established Trading Market for Capital Securities
The Capital Securities constitute a new issue of securities of each Trust
with no established trading market. While application will be made to list the
Capital Securities of each Trust on the NYSE, there can be no assurance that an
active market for the Capital Securities will develop or be sustained in the
future on such exchange. Although the Dealer Manager has indicated to Citicorp
and the Trusts that it intends to make a market in the Capital Securities of
each Trust following the applicable Expiration Date, as permitted by applicable
laws and regulations prior to the commencement of trading on the NYSE, they are
not obligated to do so and may discontinue any such market-making at any time
without notice. In addition, the liquidity of the Capital Securities of each
Trust will be affected by the number of Related Depositary Shares exchanged in
the related Offer. Accordingly, no assurance can be given as to the liquidity
of, or trading markets for, the Capital Securities. In order to satisfy the NYSE
listing requirements, acceptance of Depositary Shares validly tendered in each
Offer is subject to the Minimum Distribution Condition which condition may not
be waived by Citicorp or any Trust. See "Listing and Trading of Capital
Securities and Depositary Shares."
Reduced Trading Market for Depositary Shares
To the extent Depositary Shares for a Series of Preferred Stock are
tendered and accepted in an Offer, the liquidity and trading market for any
Depositary Shares of such Series remaining outstanding following such Offer, and
the terms upon which such Depositary Shares could be sold, could be adversely
affected. In addition, if an Offer is substantially subscribed, there would be a
32
<PAGE>
significant risk that round lot holdings of the Related Depositary Shares
outstanding following the Offer would be limited. Further, following the
applicable Expiration Dates, and in accordance with and subject to applicable
law, Citicorp may from time to time acquire Depositary Shares in the open
market, by tender offer, subsequent exchange offer, redemption of the underlying
Preferred Stock or otherwise. To the extent that any such acquisition of
Depositary Shares causes the number of outstanding Depositary Shares for any
Series of Preferred Stock to be less than 100,000, the NYSE may delist such
Depositary Shares from the NYSE and the trading market for such outstanding
Depositary Shares for such Series of Preferred Stock could be adversely
affected. Citicorp's decision to make such acquisitions is dependent on many
factors, including market conditions in effect at the time of any contemplated
acquisition. Accordingly, Citicorp cannot predict whether and to what extent it
will acquire any additional Depositary Shares and the consideration to be paid
therefor. See "Listing and Trading of Capital Securities and Depositary Shares."
Citicorp also has the right to redeem the Series of Preferred Stock, in whole or
in part, on or after specific dates. See "Description of the Preferred Stock and
Depositary Shares".
COMPARISON OF CAPITAL SECURITIES AND DEPOSITARY SHARES
The following is a brief summary of certain terms of the Capital
Securities and the Depositary Shares. For a more complete description of the
Capital Securities, see "Description of the Capital Securities." For a
description of the Subordinated Debt Securities which will be deposited in each
Trust as trust assets and will represent the sole source for the payment of
distributions and other payments on the Capital Securities, see "Description of
the Subordinated Debt Securities." For a description of the Depositary Shares,
see "Description of the Preferred Stock and Depositary Shares."
<TABLE>
<CAPTION>
Capital Securities Depositary Shares/Preferred
Stock
------------------ ---------------------------
<S> <C> <C>
Issuer: A Trust. Payment of distributions Citicorp.
and on liquidation or redemption is
guaranteed on a subordinated
basis, as and to the extent
described herein, by Citicorp.
</TABLE>
33
<PAGE>
<TABLE>
<CAPTION>
Capital Securities Depositary Shares/Preferred
Stock
------------------ ---------------------------
<S> <C> <C>
Distribution/Dividend Rate Distributions, at the per annum Dividends payable, at the per
rate specified below, payable in annum rate specified below, on
arrears on February 15, May 15, each Series of Preferred Stock on
August 15 and November 15 of February 15, May 15, August 15
each year, commencing May 15, and November 15 of each year, in
1997, from and including the each case out of funds legally
applicable Expiration Date, but available therefor, when, as and if
only if and to the extent that declared by the Citicorp Board.
interest payments are made in Except in the case of the Series 22
respect of the Subordinated Debt Preferred Stock, dividends are
Securities held by the Trust. non-cumulative. In the case of the
Series 22 Preferred Stock only,
Citicorp Capital X: dividends accrue whether or not
___% Citicorp has earnings, whether or
Citicorp Capital XI: not there are funds legally
___% available for the payment of such
Citicorp Capital XII: dividends and whether or not such
___% dividends are declared. Citicorp
Citicorp Capital XIII: has made each quarterly dividend
___% payment with respect to the
Citicorp Capital XIV: Depositary Shares on the
___% scheduled dividend payment date.
In addition, holders of the Capital
Securities will be entitled to an Dividend Rate
additional cash distribution at the -------------
rates specified below from
February 15, 1997 through the Series 16: 8.00%
applicable Expiration Date in lieu Series 17: 7.50%
of dividends accumulating from Series 20: 8.30%
February 15, 1997 on their Series 21: 8.50%
Depositary Shares accepted for Series 22: 7.75%
exchange, but only if and to the
extent that corresponding interest
payments are made on the
Subordinated Debt Securities held
by the Trusts. Such additional
distribution will be made on May
15, 1997 to the holders of Capital
Securities on the record date for
such distribution.
Citicorp Capital X: 8.00%
Citicorp Capital XI: 7.50%
Citicorp Capital XII: 8.30%
Citicorp Capital XIII: 8.50%
Citicorp Capital XIV: 7.75%
</TABLE>
34
<PAGE>
<TABLE>
<CAPTION>
Capital Securities Depositary Shares/Preferred
Stock
------------------ ---------------------------
<S> <C> <C>
Interest Accrual During any Extension Period on Accrued but unpaid dividends do
the Subordinated Debt Securities, not bear interest.
distribution payments on the
Capital Securities will not be made
but would continue to accrue, and,
in the case of distributions in
arrears, would continue to bear
interest, compounded quarterly to
the extent permitted by applicable
law.
Maturity/Mandatory and The Capital Securities will be No maturity or mandatory
Optional Redemption redeemed upon the maturity or redemption. The Depositary
earlier redemption of the related Shares representing each Series of
Subordinated Debt Securities, at Preferred Stock are redeemable at
the applicable Redemption Price, the option of Citicorp (a) on and
including any distributions after the optional redemption date
accrued as a result of Citicorp's specified below, in whole or in
election to defer payments of part, at a redemption price
interest on the Subordinated Debt equivalent to $25 per Depositary
Securities. The Subordinated Debt Share to be redeemed, plus
Securities are redeemable by accrued and unpaid dividends
Citicorp, in whole or in part, from thereon (whether or not declared)
time to time on or after May 15, (i) in the case of the Series 16, 17,
2002, or, prior to May 15, 2002, in 20 and 21 Preferred Stock, from
certain circumstances upon the the immediately preceding
occurrence of a Tax Event or dividend payment date to the date
Regulatory Capital Event, in each fixed for redemption and (ii) in the
case at the applicable Redemption case of the Series 22 Preferred
Price. In the event that Stock, to the date fixed for
Subordinated Debt Securities are redemption and (b) prior to such
redeemed or upon the repayment date, in whole but not in part, if the
of the Subordinated Debt holders of the applicable Series of
Securities upon maturity or Preferred Stock would be entitled
otherwise, the proceeds thereof to vote upon, or consent to, a
will be promptly applied to redeem merger or consolidation of
the Capital Securities and the Citicorp. Holders of Depositary
Common Securities. The Shares have no right to require
Subordinated Debt Securities Citicorp to redeem the Depositary
mature on _______, 2027. See Shares.
"Description of the Capital
Securities--Mandatory Optional Redemption Date
Redemption" and "--Tax Event ------------------------
Redemption." Holders of Capital Series 16: June 1, 1998
Securities have no right to require Series 17: September 1, 1998
Citicorp to redeem the Capital Series 20: November 15, 1999
Securities at the option of the Series 21: February 15, 2000
holders. Series 22: May 15, 2000
</TABLE>
35
<PAGE>
<TABLE>
<CAPTION>
Capital Securities Depositary Shares/Preferred
Stock
------------------ ---------------------------
<S> <C> <C>
Subordination Subordinated to claims of creditors Subordinated to claims of creditors
of the Trust, if any. The Capital of Citicorp including the
Securities and the Common Subordinated Debt Securities, pari
Securities will have equivalent passu with Citicorp's other series
terms; provided that if a of preferred stock and senior to
Declaration Event of Default shares of Common Stock of
occurs and is continuing, the Citicorp.
holders of the Capital Securities
will have a priority over holders of
the Common Securities with
respect to payments in respect of
distributions and payments upon
liquidation, redemption or
otherwise.
Each Trust is not permitted to issue
any securities other than its Trust
Securities or to incur any
indebtedness.
The Subordinated Debt Securities will
rank subordinate and junior in right
of payment to all present and future
Senior Indebtedness of Citicorp, pari
passu with all Trade Credit of
Citicorp and senior to all capital
stock now or hereafter issued by
Citicorp and to any guarantee now or
hereafter entered into by Citicorp in
respect of any of its capital stock.
The Guarantees will rank subordinate
and junior in right of payment to all
other liabilities of Citicorp, pari
passu with the most senior Citicorp
preferred stock now or hereafter
issued, and senior to Citicorp Common
Stock.
As of December 31, 1996, Citicorp had
Senior Indebtedness of approximately
$___ billion.
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
Capital Securities Depositary Shares/Preferred
Stock
------------------ ---------------------------
<S> <C> <C>
Listing Application will be made to list the The Depositary Shares for each
Capital Securities of each Trust on Series of Preferred Stock are listed
the NYSE under the following on the NYSE under the following
symbol: symbol:
Citicorp Capital X: Series 16: CCI.E
Citicorp Capital XI: Series 17: CCI.F
Citicorp Capital XII: Series 20: CCI.I
Citicorp Capital XIII: Series 21: CCI.J
Citicorp Capital XIV: Series 22: CCI.K
In order to satisfy the NYSE listing
requirements, acceptance of
Depositary Shares for each Series of
Preferred Stock validly tendered in
the Offers is subject to the Minimum
Distribution Condition, which
condition may not be waived.
Dividends Received
Deduction Distributions on the Capital Dividends are eligible for the
Securities are not eligible for the dividends received deduction for
dividends received deduction for corporate holders.
corporate holders.
</TABLE>
37
<PAGE>
<TABLE>
<CAPTION>
Capital Securities Depositary Shares/Preferred
Stock
------------------ ---------------------------
<S> <C> <C>
Voting Rights/Enforcement Holders of Capital Securities have If dividends shall be in arrears for
no voting rights other than as such number of dividend periods,
provided under the Trust Act or whether or not consecutive, which
the Trust Indenture Act, except in shall in the aggregate contain not
the limited circumstances less than 540 days, the Citicorp
discussed below. The Institutional Board will be increased by two
Trustee has the power to exercise directors and holders of Preferred
all rights of each Trust under the Stock will have the right (together
Indenture with respect to the with holders of all other series or
related Subordinated Debt class of preferred stock entitled to
Securities and is also authorized to vote thereon) to elect two directors
enforce the related Guarantee on at the next annual meeting of the
behalf of holders of the Capital shareholders.
Securities. The Institutional
Trustee will request the direction
of the Holders of Trust Securities
with respect to any amendment,
modification or termination of the
Indenture requiring the consent of
the Institutional Trustee. If a
Trust's failure to make
distributions is a consequence of
Citicorp's exercise of its right to
extend the interest payment period
for its Subordinated Debt
Securities as described under
"Description of the Capital
Securities--Distributions," the
Institutional Trustee will have no
right to enforce the payment of
distributions until a Declaration
Event of Default shall have
occurred. Until such Declaration
Event of Default with respect to
the affected Capital Securities has
been cured, waived or otherwise
eliminated, the Institutional
Trustee will be deemed to be
acting solely on behalf of the
holders of such Capital Securities
and only the holders of such
Capital Securities will have the
right to direct the Institutional
Trustee with respect to certain
matters under the Declaration, and
therefore the Indenture.
</TABLE>
38
<PAGE>
If the Institutional Trustee fails to
enforce its rights under the related
Subordinated Debt Securities after a
holder of Capital Securities has made
a written request, such holder of
record of Capital Securities may
institute a legal proceeding against
Citicorp to enforce the Institutional
Trustee's rights under such
subordinated Debt Securities without
first instituting any legal
proceeding against the Institutional
Trustee or any other person or
entity. Notwithstanding the
foregoing, if a Declaration Event of
Default has occurred and is
continuing and such event is
attributable to the failure of
Citicorp to pay interest or principal
on the Subordinated Debt Securities
on the date such interest or
principal is otherwise payable (or in
the case of a redemption, the
redemption date), then a holder of
Capital Securities may institute a
Direct Action for enforcement of
payment to such holder directly of
the principal amount equal to the
aggregate liquidation amount of the
Capital Securities of such holder on
or after the respective due date
specified in the Subordinated Debt
Securities. See "Description of the
Capital Securities," "Description of
the Guarantees" and "Description of
the Subordinated Debt Securities."
39
<PAGE>
CITICORP
Citicorp, whose principal subsidiary is Citibank, is a holding company
incorporated under the laws of the State of Delaware on December 4, 1967. The
principal office of Citicorp is located at 399 Park Avenue, New York, New York
10043; its telephone number is (212) 559-1000. Through its subsidiaries and
affiliates, including Citibank, Citicorp is a global financial services
organization serving the financial needs of individuals, businesses, governments
and financial institutions in the United States and throughout the world.
Holding Company
Citicorp is a legal entity separate and distinct from Citibank and its
other subsidiaries and affiliates. There are various legal limitations on the
extent to which Citicorp's bank subsidiaries may extend credit, pay dividends or
otherwise supply funds to Citicorp. The approval of the Office of the
Comptroller of the Currency is required if total dividends declared by a
national bank in any calendar year exceed net profits (as defined) for that year
combined with its retained net profits for the preceding two years. In addition,
dividends for such a bank may not be paid in excess of the bank's undivided
profits. State-chartered bank subsidiaries are subject to dividend limitations
imposed by applicable state law. In determining whether and to what extent to
pay dividends, each bank subsidiary must also consider the effect of dividend
payments on applicable risk-based capital and leverage ratio requirements as
well as policy statements of the federal regulatory agencies that indicate that
banking organizations should generally pay dividends out of current operating
earnings.
Citicorp also derives dividends from its non-bank subsidiaries. These
subsidiaries are not subject to regulatory restrictions on their payment of
dividends to Citicorp, except that the approval of the Office of Thrift
Supervision may be required if total dividends declared by a savings association
in any calendar year exceed amounts specified in that agency's regulations. In
addition, there are numerous governmental requirements and regulations that
affect the activities of Citicorp and its bank and non-bank subsidiaries.
Under longstanding policy of The Board of Governors of the Federal Reserve
System, a bank holding company is expected to act as a source of financial
strength for its subsidiary banks and to commit resources to support such banks.
As a result of that policy, Citicorp may be required to commit resources to its
subsidiary banks in circumstances where it might not otherwise do so.
Because Citicorp is a holding company, its rights and the rights of its
creditors and stockholders, including the holders of the Subordinated Debt
Securities and the Guarantees, to participate in the assets of any subsidiary
upon the latter's liquidation or recapitalization will be subject to the prior
claims of the subsidiary's creditors, except to the extent that Citicorp may
itself be a creditor with recognized claims against the subsidiary.
40
<PAGE>
CITICORP SELECTED FINANCIAL DATA
The following table sets forth selected financial data for each of the
years in the five-year period ended December 31, 1996. These financial data are
qualified in their entirety by the detailed information and financial statements
included in the documents incorporated herein by reference; these selected
financial data are not covered by the Report of Independent Auditors
incorporated herein by reference. See "Incorporation of Certain Documents by
Reference".
<TABLE>
<CAPTION>
Years Ended December 31,
--------------------------------------------
1996 1995 1994 1993 1992
------- ------- ------- ------- -------
(In millions, except per share amounts)
<S> <C> <C> <C> <C> <C>
Net Interest Revenue $10,940 $ 9,951 $ 8,911 $ 7,690 $ 7,456
Fees, Commissions and Other Revenue 9,256 8,727 7,837 8,385 8,165
------- ------- ------- ------- -------
Total Revenue 20,196 18,678 16,748 16,075 15,621
Provision for Credit Losses 1,926 1,991 1,881 2,600 4,146
Operating Expense 12,197 11,102 10,256 10,615 10,057
------- ------- ------- ------- -------
Income Before Taxes and Cumulative Effects of
Accounting Changes 6,073 5,585 4,611 2,860 1,418
Income Taxes 2,285 2,121 1,189 941 696
------- ------- ------- ------- -------
Income Before Cumulative Effects of Accounting Changes $ 3,788 $ 3,464 $ 3,422 $ 1,919 $ 722
Cumulative Effects of Accounting Changes(A) --- --- (56) 300 --
------- ------- ------- ------- -------
Net Income $ 3,788 $ 3,464 $ 3,366 $ 2,219 $ 722
======= ======= ======= ======= =======
Income Applicable to Common Stock $ 3,631 $ 3,126 $ 3,010 $ 1,900 $ 497
======= ======= ======= ======= =======
Earnings Per Share(B):
On Common and Common Equivalent Shares:
Income Before Cumulative Effects of Accounting Changes $ 7.50 $ 7.21 $ 7.15 $ 3.82 $ 1.35
Cumulative Effects of Accounting Changes(A) --- --- (0.12) 0.68 $---
------- ------- ------- ------- -------
Net Income $ 7.50 $ 7.21 $ 7.03 $ 4.50 $ 1.35
Assuming Full Dilution:
Income Before Cumulative Effects of Accounting Changes $ 7.42 $ 6.48 $ 6.40 $ 3.53 $ 1.35
Cumulative Effects of Accounting Changes(A) --- --- (0.11) 0.58 ---
------- ------- ------- ------- -------
Net Income $ 7.42 $ 6.48 $ 6.29 $ 4.11 $ 1.35
======= ======= ======= ======= =======
Cash Dividends Declared per Common Share (C) $ 1.80 $ 1.20 $ .45 $ --- $ ---
======= ======= ======= ======= =======
(In billions)
Period-End Balances:
Total Loans, Net(D) $ 169.1 $ 160.3 $ 147.3 $ 134.6 $ 135.9
Total Assets(E) 281.0 256.9 250.5 216.6 213.7
Total Deposits 185.0 167.1 155.7 145.1 144.2
Long-Term Debt 18.9 18.5 17.9 18.2 20.2
Total Stockholders' Equity(F) 20.7 19.6 17.8 14.0 11.2
</TABLE>
(A) Refers to the adoption of SFAS No. 112, "Employers' Accounting for
Postemployment Benefits", effective January 1, 1994 and SFAS No. 109,
"Accounting for Income Taxes", effective January 1, 1993.
(B) Based on net income after deducting preferred stock dividends, except
where conversion is assumed, and, unless anti-dilutive, the after-tax
dividend equivalents on shares issuable under Citicorp's Executive
Incentive Compensation Plan.
(C) On October 15, 1991, Citicorp suspended the dividend on its common stock
and resumed paying dividends on April 18, 1994.
(D) Net of unearned income and allowance for credit losses.
(E) Reflects the adoption of FASB Interpretation No. 39, "Offsetting of
Amounts Related to Certain Contracts", effective January 1, 1994.
(F) Reflects the adoption of SFAS No. 115, "Accounting for Certain Investments
in Debt and Equity Securities", effective January 1, 1994.
41
<PAGE>
CAPITALIZATION OF CITICORP
The following table sets forth the consolidated capitalization of Citicorp
as of December 31, 1996 (and as adjusted to give effect to the issuance of the
maximum amounts of Subordinated Debt Securities and Capital Securities that may
be issued in the Offers and the retirement of the Preferred Stock underlying the
Maximum Number of Depositary Shares that may be accepted in the Offers).
<TABLE>
<CAPTION>
December 31, December 31,
1996 1996
Outstanding As Adjusted
(In millions)
<S> <C> <C>
Long-Term Debt:
Various Obligations with Original Maturities of One Year or More $18,550 $18,550
Guaranteed Preferred Beneficial Interests in Citicorp
Subordinated Debt (a) 300 $
------- -------
Total Long-Term Debt $18,850 $______
Stockholders' Equity:
Preferred Stock $2,078 $______
Authorized Shares: 50,000,000
Issued Shares:
4,280,503 of $100 per share, 6,100,000 of $250 per share
(__________ as adjusted) and 250,000 of $500 per share
Common Stock ($1.00 par value) 506 506
Authorized Shares: 800,000,000
Issued Shares: 506,298,235
Surplus 6,595 6,595
Retained Earnings 14,303
Net Unrealized Gains-Securities Available for Sale 676 676
Foreign Currency Translation (486) (486)
Common Stock in Treasury, at cost (2,950) (2,950)
Shares: 43,081,217
Total Stockholders' Equity $20,722 $
------- -------
Total Capitalization $39,572 $
======= =======
</TABLE>
- ----------
(a) The Guaranteed Preferred Beneficial Interests represent interests in
Citicorp Capital I, a trust whose sole asset is $309 million aggregate
principal amount of Citicorp's 7.933% Junior Subordinated Deferrable
Interest Debentures due 2027, and, with respect to the "As Adjusted"
column, interests in Citicorp Capital II, a trust whose sole asset is
$463.5 million aggregate principal amount of Citicorp's 8.015% Junior
Subordinated Deferrable Interest Debentures due 2027, and interests in the
Trusts, whose sole assets will be approximately $__million aggregate
principal amount of Citicorp's Junior Subordinated Deferrable Interest
Debentures due 2027 (assuming the Maximum Number of Related Depositary
Shares are tendered and accepted in each Offer).
CITICORP RATIOS OF INCOME TO FIXED CHARGES
For the fiscal years ended December 31, 1996, 1995, 1994, 1993 and 1992,
Citicorp's consolidated ratios of income to fixed charges, computed as set forth
below, were as follows:
42
<PAGE>
Year Ended
December 31,
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
Income to Fixed Charges:
Excluding Interest on Deposits... 2.69 2.31 1.76 1.44 1.24
Including Interest on Deposits... 1.48 1.42 1.31 1.18 1.09
For purposes of computing the consolidated ratio of income to fixed
charges, income represents net income, before extraordinary items and cumulative
effects of accounting changes, plus income taxes and fixed charges. Fixed
charges, excluding interest on deposits, represent interest expense (except
interest paid on deposits) and the interest factor included in rents. Fixed
charges, including interest on deposits, represent all interest expense and the
interest factor included in rents.
ACCOUNTING TREATMENT
The refinancing of the Preferred Stock underlying the Depositary Shares
with the respective Capital Securities will decrease Citicorp's stockholders'
equity in the amount of the fair market value of the Capital Securities
exchanged. Additionally, earnings applicable to common stockholders used in the
calculation of earnings per share will decrease by the excess of the fair market
value of the Capital Securities over the carrying value of the Preferred Stock
at the applicable Expiration Date.
The financial statements of the Trusts will be consolidated into
Citicorp's financial statements, with the Capital Securities issued by the
Trusts included in Citicorp's balance sheet as a component of Long-Term Debt.
The sole assets of the Trusts will be approximately $__million aggregate
principal amount of Junior Subordinated Deferrable Interest Debentures of
Citicorp due 2027 (assuming the Maximum Number of Related Depositary Shares are
tendered and accepted in each Offer).
All future reports of Citicorp filed under the Exchange Act will (i)
reflect the consolidation of the Trusts into Citicorp's consolidated financial
statements, with the $__million aggregate amount of Capital Securities included
in Citicorp's balance sheet as a component of Long-Term Debt, (ii) include in
the financial statement footnotes of Citicorp disclosure that the sole assets of
the wholly owned Trusts will be the aggregate principal amount of Junior
Subordinated Deferrable Interest Debentures of Citicorp due 2027 issued to such
Trusts and (iii) include in a footnote to the audited financial statements
disclosure that each Trust is wholly owned, that the sole assets of the Trusts
are the Subordinated Debt Securities (specifying as to each Trust the principal
amount, interest rate and maturity date of the Subordinated Debt Securities
held), and that the Guarantee, taken together with Citicorp's obligations under
the Subordinated Debt Securities, the Indenture and the Declaration, provides a
full and unconditional guarantee on a subordinated basis by Citicorp of payments
due on the Capital securities issued by each Trust.
THE TRUSTS
Each of the Trusts is a statutory business trust formed under Delaware law
pursuant to (i) a separate declaration of trust executed by Citicorp, as Sponsor
for such Trust and the Trustees of
43
<PAGE>
such Trust and (ii) the filing of a certificate of trust with the Secretary of
State of the State of Delaware. Each declaration will be amended and restated in
its entirety (each, as so amended and restated, a "Declaration") before the
issuance of the Capital Securities. Each Declaration will be qualified as an
indenture under the Trust Indenture Act. Upon issuance of a Trust's Capital
Securities, the purchasers thereof will own all of the Trust's Capital
Securities. See "Description of the Capital Securities -- Book-Entry Only
Issuance -- The Depository Trust Company." Citicorp will directly or indirectly
acquire all of the Common Securities of each Trust, which will have an aggregate
liquidation amount equal to approximately 3 percent of the total capital of the
Trust. Each Trust exists for the exclusive purposes of (i) issuing its Capital
Securities and Common Securities representing undivided beneficial interests in
the assets of such Trust, (ii) investing the gross proceeds of the Trust
Securities in Subordinated Debt Securities and (iii) engaging in only those
other activities necessary or incidental thereto. The Common Securities will
rank pari passu, and payments will be made thereon pro rata, with the Capital
Securities, except that upon an event of default under the Declaration, the
rights of the holders of the Common Securities to payment in respect of
distributions and payments upon liquidation, redemption and otherwise will be
subordinated to the rights of the holders of the Capital Securities. Each Trust
has a term of approximately 55 years, but may earlier terminate as provided in
the Declaration.
Each Trust's business and affairs will be conducted by the Trustees
appointed by Citicorp, as the direct or indirect holder of all the Common
Securities. The holder of the Common Securities will be entitled to appoint,
remove or replace any of, or increase or reduce the number of, the Trustees of a
Trust. The duties and obligations of the Trustees shall be governed by the
Declaration of such Trust. Pursuant to the Declaration, the number of Trustees
of each Trust will initially be three. Two of the Trustees (the Regular
Trustees) will be persons who are employees or officers of, or who are
affiliated with, Citicorp. The third Trustee (the Institutional Trustee), which
will be a financial institution that is unaffiliated with Citicorp, will serve
as institutional trustee under each Declaration and as indenture trustee for the
purposes of compliance with the provisions of the Trust Indenture Act.
Initially, Wilmington Trust Company will be the Institutional Trustee for each
Trust, until removed or replaced by the holder of the Common Securities. For
purposes of compliance with the provisions of the Trust Indenture Act,
Wilmington Trust Company will also act as Guarantee Trustee under the Guarantee
and as Debt Trustee under the Indenture for each Trust. Wilmington Trust Company
will also act as Delaware Trustee for each Trust under the Declarations for
purposes of compliance with the Trust Act.
The office of the Delaware Trustee for each Trust in the State of
Delaware, and its principal place of business, is Rodney Square North, 1100
North Market Street, Wilmington, Delaware 19890.
The Institutional Trustee will hold title to each Trust's Subordinated
Debt Securities for the benefit of the holders of the related Trust Securities
and will have the power to exercise all rights, powers and privileges under the
Indenture as the holder of the Subordinated Debt Securities. In addition, the
Institutional Trustee will maintain exclusive control of the Property Account
for each Trust to hold all payments made in respect of the applicable
Subordinated Debt Securities for the benefit of the holders of the related Trust
Securities. The Institutional Trustee will make payments of distributions and
payments on liquidation, redemption and otherwise to the holders of the Trust
Securities out of funds from the applicable Property Account. The Guarantee
Trustee will hold the Guarantees for the benefit of the holders of the Capital
Securities of the respective Trusts. Citicorp, as the direct or indirect holder
of all the Common Securities, will have the right to appoint, remove or replace
any Trustee and to increase or decrease the number of Trustees, subject to
certain
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restrictions. Citicorp will pay all fees and expenses related to the Trusts and
the issuance of the Trust Securities. See "Description of the Subordinated Debt
Securities -- Miscellaneous."
The rights of the holders of the Capital Securities of each Trust,
including economic rights, rights to information and voting rights, are set
forth in the related Declaration, the Trust Act and the Trust Indenture Act. See
"Description of the Capital Securities."
THE OFFERS
Purpose Of The Offers
The purpose of each Offer is to refinance Citicorp's obligations under
each Series of Preferred Stock underlying the Depositary Shares with the
Subordinated Debt Securities relating to the Capital Securities issued in
exchange for such Depositary Shares, and to achieve certain tax efficiencies,
while preserving Citicorp's flexibility with respect to future financings. This
refinancing will permit Citicorp to deduct interest payable on the Subordinated
Debt Securities for United States federal income tax purpose; dividends payable
with regard to the Preferred Stock are not deductible. Under current capital
adequacy guidelines of the FRB, this refinancing will also preserve unaffected
Citicorp's Tier 1 capital level.
All shares of Preferred Stock underlying Depositary Shares tendered and
accepted in the Offers will be retired and resume the status of authorized and
unissued shares of preferred stock.
General
PARTICIPATION IN EACH OFFER IS VOLUNTARY AND HOLDERS OF DEPOSITARY SHARES
SHOULD CAREFULLY CONSIDER WHETHER TO ACCEPT. NONE OF CITICORP, THE BOARD OF
DIRECTORS OF CITICORP, THE TRUSTEES NOR THE TRUSTS MAKES ANY RECOMMENDATION TO
HOLDERS AS TO WHETHER TO EXCHANGE OR REFRAIN FROM EXCHANGING THEIR DEPOSITARY
SHARES. HOLDERS OF DEPOSITARY SHARES ARE URGED TO CONSULT THEIR FINANCIAL AND
TAX ADVISORS IN MAKING THEIR DECISIONS ON WHAT ACTION TO TAKE IN LIGHT OF THEIR
OWN PARTICULAR CIRCUMSTANCES. SEE "PRICE RANGE OF DEPOSITARY SHARES."
The Depositary Shares are evidenced by depositary receipts (the
"Depositary Receipts"). See "Description of the Preferred Stock and Depositary
Shares". Unless the context requires otherwise, the term "Holder" with respect
to any Offer means (i) any person in whose name any Depositary Receipts are
registered on the books of Citicorp or (ii) any other person who has obtained a
properly completed stock power from the Holder or (iii) any person whose
Depositary Receipts are held of record by The Depository Trust Company or the
Philadelphia Depository Trust Company (each a "Depository Institution").
No tender of Depositary Shares held by any officer or director of Citicorp
or by any affiliate of Citicorp will be accepted except in accordance with the
terms of the related Offer, as set forth herein.
Terms of the Offers
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Upon the terms and subject to the conditions set forth herein and in the
related Letter of Transmittal, each Trust will exchange its Capital Securities
for up to the Maximum Number of Related Depositary Shares not owned by Citicorp.
Each Offer will be effected on a basis of one Capital Security for each Related
Depositary Share validly tendered and accepted for exchange, as applicable. See
"---Procedures for Tendering". Upon the terms and subject to the conditions set
forth herein and in the related Letter of Transmittal, each Trust will accept up
to the Maximum Number of Related Depositary Shares validly tendered and not
withdrawn prior to the Expiration Date and, unless the Offer has been withdrawn
or terminated, will deliver its Capital Securities in exchange therefor to
tendering Holders of such Related Depositary Shares as promptly as practicable
following the applicable Expiration Date. If more than the Maximum Number of
Related Depositary Shares are validly tendered and not withdrawn on or prior to
the applicable Expiration Date, the applicable Trust will accept such Depositary
Shares for exchange on a pro rata basis as described below. Each Trust expressly
reserves the right, in its sole discretion, to delay acceptance for exchange of
Depositary Shares tendered under its Offer and the delivery of the Capital
Securities with respect to the Depositary Shares accepted for exchange (subject
to Rule 13e-4 and 14e-1 under the Exchange Act, which require that Citicorp and
the Trust consummate the Offer or return the Depositary Shares deposited by or
on behalf of the Holders thereof promptly after the termination or withdrawal of
the Offer ), or amend, withdraw, or terminate the offer, at any time prior to
the Expiration Date for any of the reasons set forth in "-- Conditions to the
Offer" and "--Expiration Date; Extension; Amendments; Termination."
If more than the Maximum Number of Related Depositary Shares are validly
tendered to a Trust pursuant to an Offer prior to the applicable Expiration Date
and are not withdrawn, the applicable Trust will, upon the terms and subject to
the conditions of its Offer, accept such Depositary Shares for payment on a pro
rata basis, with adjustments to avoid purchases of fractional shares. Such
proration shall be based on the quotient of (i) the Maximum Number of Related
Depositary Shares for the Offer divided by (ii) the total number of such Related
Depositary Shares validly tendered pursuant to the Offer and not withdrawn. All
questions as to such proration will be determined by the applicable Trust, whose
determination will be final and binding.
Because of the difficulty of determining the number of Related Depositary
Shares validly tendered and not withdrawn, if proration is required, the Trust
would not expect to announce the final results of proration in respect of its
Offer until approximately seven NYSE trading days after the applicable
Expiration Date. Preliminary results of proration will be announced by press
release as promptly as practicable after the applicable Expiration Date. Holders
of Depositary Shares may obtain such preliminary information from the
Information Agent and may also be able to obtain such preliminary information
from their brokers.
In all cases, except to the extent waived by the relevant Trust, delivery
of Capital Securities issued with respect to the Depositary Shares accepted for
exchange pursuant to an Offer will be made only after timely receipt by the
Exchange Agent of Depositary Receipts for such Depositary Shares (or
confirmation of book-entry transfer thereof), a properly completed and duly
executed Letter of Transmittal and any other documents required thereby.
As of the date of this Prospectus, the number of outstanding Depositary
Shares for each Series of Preferred Stock not owned by Citicorp are as follows:
(i) Series 16 Preferred Stock, 13,000,000 Depositary Shares, (ii) Series 17
Preferred Stock, 14,000,000 Depositary Shares, (iii) Series 20 Preferred Stock,
5,000,000 Depositary Shares, (iv) Series 21 Preferred Stock, 6,000,000
Depositary Shares, (v) Series 22 Preferred Stock, 5,000,000 Depositary Shares.
This Prospectus,
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together with the applicable Letter of Transmittal, is being sent to all
registered Holders on or about the date of this Prospectus. Each Trust shall be
deemed to have accepted validly tendered Depositary Shares (or defectively
tendered Depositary Shares with respect to which such Trust has waived such
defect) when, as and if the Trust has given oral or written notice thereof to
the Exchange Agent. The Exchange Agent will act as agent for the tendering
Holders for the purpose of receiving Depositary Shares from, and remitting the
Capital Securities of the applicable Trust to, tendering Holders who are
participating in an Offer. Upon the terms and subject to the conditions of each
Offer, delivery of Capital Securities to tendering Holders will be made as
promptly as practicable following the applicable Expiration Date.
If any tendered Depositary Receipts for Depositary Shares are not accepted
for exchange because of an invalid tender, the tender of Depositary Shares in
excess of the applicable Maximum Number and the pro rata acceptance thereof, the
occurrence of certain other events set forth herein or otherwise, unless
otherwise requested by the Holder under "Special Delivery Instructions" in the
Letter of Transmittal, such Depositary Shares will be returned, without expense,
to the tendering Holder thereof (or in the case of Depositary Shares tendered by
book-entry transfer of Depositary Receipts into the Exchange Agent's account at
a Depositary Institution, such Depositary Shares will be credited to an account
maintained at the Depositary Institution designated by the participant therein
who so delivered such Depositary Receipts), as promptly as practicable after the
Expiration Date or the withdrawal or termination of the Offer.
Holders of Depositary Shares will not have any appraisal or dissenters'
rights under the Delaware General Corporation Law in connection with any Offer.
Citicorp and the Trusts intend to conduct the Offers in accordance with the
applicable requirements of the Exchange Act and the rules and regulations of the
Commission thereunder.
Holders who tender Depositary Shares in an Offer will not be required to
pay brokerage commissions or fees or, subject to the instruction in the Letter
of Transmittal, transfer taxes with respect to the exchange of Depositary Shares
pursuant to the Offer. See "Fees and Expenses; Transfer Taxes."
Conditions to the Offers
Notwithstanding any other provisions of an Offer, or any extension of an
Offer, a Trust will not be required to deliver its Capital Securities in respect
of any properly tendered Related Depositary Shares and may terminate its Offer
by oral or written notice to the Exchange Agent and the holders of the Related
Depositary Shares, or, at its option, may modify or otherwise amend the Offer
(other than with respect to the Minimum Distribution Condition) with respect to
the Depositary Shares if the condition in clause (a) below is not satisfied at
the Expiration Date or if any of the events specified in clauses (b) through (d)
occurs at or prior to the exchange date for the Depositary Shares:
(a) tenders by a sufficient number of holders of Depositary Shares
to satisfy the Minimum Distribution Condition for the Offer;
(b) any action has been taken or threatened, or any statute, rule
regulation, judgement, order, stay, decree or injunction has been
promulgated, enacted, entered , enforced or deemed applicable to the
Offer, by or before any court or governmental regulatory or administrative
agency or authority or tribunal, domestic or foreign, which (i)
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challenges the making of the offer, or might directly or indirectly
prohibit, prevent, restrict or delay consummation of the Offer, otherwise
and adversely affects in any material manner the Offer or (ii) could
materially adversely affect the business condition (financial or
otherwise), income, operations, properties, assets, liabilities, or
prospects of Citicorp and its subsidiaries, taken as a whole, or
materially impair the contemplated benefits of the Offer to Citicorp,
including any such action, statute, rule, regulation, judgement, order,
stay, decree, or injunction which would constitute a Tax Event if it
occurred after the Expiration Date;
(c) any event has occurred or is likely to occur affecting the
business or financial affairs of Citicorp that would or might prohibit,
prevent, restrict or delay consummation of the Offer or that will, or is
reasonably likely to, materially impair the contemplated benefits of the
Offer or might be material to Holders of Depositary Shares in deciding
whether to accept the Offer and
(d) Any of the following events shall have occurred (i) any general
suspension of or limitation on trading in securities on the NYSE or in the
over-the-counter market (whether or not mandatory), (ii) any significant
adverse change in the price of the Related Depositary Shares, (iii) a
material impairment in the trading market for debt or equity securities on
the NYSE or in the over-the counter market (whether or not mandatory ),
(iv) a declaration of a banking moratorium or any suspension of payments
in respect of banks by federal or state authorities in the United
States(whether or not mandatory), (v) a commencement of a war, armed
hostilities or other national or international crisis directly or
indirectly relating to the United States , (vi) any limitation (whether or
not mandatory) by any governmental authority on, or other event having a
reasonable likelihood of affecting, the extensions of credit by banks or
other events having a reasonable likelihood of affecting, the extension of
credit by banks or other lending institutions in the United States, or
(vii) any significant adverse change in United States securities or
financial markets generally or in the case of any of the forgoing existing
at the time of the commencement of the Offer, a material acceleration or
worsening thereof.
The foregoing conditions are for the sole benefit of the Trusts and
Citicorp and, except for the Minimum Distribution Condition, may be waived by
the Trusts and Citicorp, in the whole or in part, in their sole discretion. Any
determination made by Citicorp or the Trusts concerning an event, development or
circumstance described or referred to above will be final and binding on all
parties.
Expiration Date; Extensions; Amendments; Termination
Each Offer will expire on the applicable Expiration Date. Each Trust
expressly reserves the right, as to its Offer, in its sole discretion, subject
to applicable law, to (i) terminate the Offer, and not accept for exchange any
Related Depositary Shares and promptly return tendered Depository Shares upon
the failure of any of the conditions specified above in " ---Conditions to the
Offer," (ii) waive any conditions to the Offer (other than the Minimum
Distribution Condition) and accept up to the Maximum Number of Related
Depositary Shares previously tendered pursuant to the Offer, (iii) extend the
Expiration Date of the Offer and retain all Related Depositary Shares tendered
pursuant to the Offer until the Expiration Date, subject, however, to all
withdrawal rights of holders, see " -- Withdrawal of Tenders," (iv) amend the
terms of the Offer, (v) modify the amount or form of the consideration to be
paid pursuant to the Offer, or (vi) terminate the Offer and not accept for
exchange the Related Depositary Shares at any time on or prior to the Expiration
Date, for any reason. Any amendment applicable to the Offer will apply to all
Depositary Shares tendered pursuant to the Offer.
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During any extension of the Offer, all Depositary Shares previously tendered
pursuant to the Offer and not withdrawn will remain subject to the Offer.
If a Trust makes a material change in the terms of its Offer, the Trust
will extend the Offer. The minimum period for which the Offer must remain open
following material changes in the terms of the Offer or the information
concerning the Offer, other than a decrease in the amount of Related Depositary
Shares sought for exchange or a change in the amount or form of consideration
offered to Holders of the Related Depositary Shares, will depend upon the facts
and circumstances, including the materiality of the change or information. With
respect to a decrease in the number of Related Depositary Shares sought in the
Offer or a change in the amount or form of consideration offered to Holders of
the Depositary Shares, if required, the Offer will remain open for a minimum of
ten (10) Business Days following public announcement of such change. In the case
of any amendment, withdrawal or termination of the Offer, a public announcement
will be issued no later than 9:00 a.m., New York City time, on the next business
day after the previously scheduled Expiration Date for the Offer. If a Trust
withdraws or terminates its Offer, it will give immediate notice to the Exchange
Agent, and all Depositary Shares theretofore tendered pursuant to its Offer will
be returned promptly to the tendering Holders thereof. See "--Withdrawal of
Tenders." In order to satisfy the NYSE listing requirements, acceptance of
Depositary Shares validly tendered in each Offer is subject to the Minimum
Distribution Condition, which condition may not be waived.
Procedures for Tendering
The tender of Depositary Receipts by a Holder thereof pursuant to one of
the procedures set forth below will constitute an agreement between such Holder
and the related Trust in accordance with the terms and subject to the conditions
set forth herein and in the related Letter of Transmittal and each Trust's right
to terminate or withdraw its Offer at any time for any reason.
EACH HOLDER OF DEPOSITARY SHARES WISHING TO PARTICIPATE IN THE RELATED
OFFER MUST (1) PROPERLY COMPLETE AND SIGN THE LETTER OF TRANSMITTAL IN
ACCORDANCE WITH THE INSTRUCTIONS CONTAINED HEREIN AND IN THE LETTER OF
TRANSMITTAL (EXCEPT WHEN AN AGENT'S MESSAGE IS APPROPRIATE AND UTILIZED),
TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES, AND DELIVER THE SAME TO THE
EXCHANGE AGENT AT ONE OF ITS ADDRESSES SET FORTH ON THE BACK COVER PAGE HEREOF
PRIOR TO THE EXPIRATION DATE AND EITHER (A) CERTIFICATES FOR THE DEPOSITARY
RECEIPTS TO BE TENDERED MUST BE RECEIVED BY THE EXCHANGE AGENT AT SUCH ADDRESS
OR (B) SUCH DEPOSITARY RECEIPTS MUST BE TRANSFERRED PURSUANT TO THE PROCEDURES
FOR BOOK-ENTRY TRANSFER DESCRIBED BELOW AND A CONFIRMATION OF SUCH BOOK-ENTRY
TRANSFER MUST BE RECEIVED BY THE EXCHANGE AGENT, IN EACH CASE PRIOR TO THE
EXPIRATION DATE FOR THE OFFER, OR (2) COMPLY WITH THE GUARANTEED DELIVERY
PROCEDURE DESCRIBED BELOW. LETTERS OF TRANSMITTAL, DEPOSITARY RECEIPTS AND ANY
OTHER REQUIRED DOCUMENTS SHOULD BE SENT ONLY TO THE EXCHANGE AGENT, NOT TO ANY
TRUST, CITICORP, THE DEALER MANAGER OR THE INFORMATION AGENT.
Special Procedures for Beneficial Owners. Any beneficial owner whose
Depositary Receipts for Depositary Shares are held by or registered in the name
of a broker, dealer, commercial bank,
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trust company or other nominee and who wishes to tender such Depositary Shares
should contact such entity promptly and instruct such entity to tender on such
beneficial owner's behalf. If such beneficial owner wishes to tender on its own
behalf, such owner must, prior to completing and executing the Letter of
Transmittal and delivering its Depositary Receipts, either make appropriate
arrangements to register ownership of the Depositary Receipts in such owner's
name or obtain a properly completed stock power from the nominee. The transfer
of registered ownership may take considerable time and may not be able to be
completed prior to the Expiration Date.
THE METHOD OF DELIVERY OF DEPOSITARY RECEIPTS AND ALL OTHER DOCUMENTS IS
AT THE ELECTION AND RISK OF THE HOLDER. IF SENT BY MAIL, IT IS RECOMMENDED THAT
(1) REGISTERED MAIL, RETURN RECEIPT REQUESTED, BE USED, (2) INSURANCE BE
OBTAINED AND (3) THE MAILING BE MADE SUFFICIENTLY IN ADVANCE OF THE APPLICABLE
EXPIRATION DATE TO PERMIT DELIVERY TO THE EXCHANGE AGENT ON OR BEFORE THE
EXPIRATION DATE.
Signature Guarantees. If tendered Depositary Receipts are registered in
the name of the signer of the Letter of Transmittal and the Capital Securities
to be issued in exchange therefor are to be issued (and any untendered
Depositary Receipts are to be reissued) in the name of the registered Holder,
the signature of such signer need not be guaranteed. If the tendered Depositary
Receipts are registered in the name of someone other than the signer of the
Letter Of Transmittal, or if Capital Securities issued in exchange therefor are
to be issued in the name of any person other than the signer of the Letter of
Transmittal, such tendered Depositary Receipts must be endorsed or accompanied
by written instruments of transfer in form satisfactory to the Trust and duly
executed by the registered Holder, and the signature on the endorsement or
instrument of transfer must be guaranteed by a financial institution (including
most banks, savings and loans associations and brokerage houses) that is a
participant in the Security Transfer Agents Medallion Program or the Stock
Exchange Medallion Program (any of the foregoing hereinafter referred to as an
"Eligible Institution"). If the Capital Securities and/or the Depositary
Receipts are not exchanged or are to be delivered to an address other than that
of the registered Holder appearing on the register for the Depositary Receipts,
the signature in the Letter of Transmittal must be guaranteed by an Eligible
Institution .
Book-Entry Transfer. The Trusts understand that the Exchange Agent has
established accounts with respect to the Depositary Receipts for the Related
Depositary Shares at a Depository Institution for the purpose of facilitating
the Offers, and any financial institution that is a participant in a Depository
Institution's system may make book-entry delivery of such Depositary Receipts by
causing the Depository Institution to transfer such Depositary Receipts into the
Exchange Agent's account with respect to the Depositary Receipts in accordance
with such Depository Institution's Automated Tender Offer Program ("ATOP")
procedures for such book-entry transfers. However, the exchange for the
Depositary Shares so tendered will only be made after a timely confirmation (a
"Book-Entry Confirmation") of such book-entry transfer of Depositary Receipts
into the Exchange Agent's account, timely receipt by the Exchange Agent of the
related Letter of Transmittal, or an Agent's Message (as such term is defined in
the next paragraph), and any other documents required by the Letter of
Transmittal.
The term "Agent's Message" means a message, transmitted by a Depository
Institution and received by the Exchange Agent and forming a part of a
Book-Entry Confirmation, which states that such Depository Institution has
received an express acknowledgment from a participant tendering Depositary
Receipts that is the subject of such Book-Entry Confirmation, that such
participant has
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received and agrees to be bound by the terms of the Letter of Transmittal, and
that the Trust may enforce such agreement against such participant.
Guaranteed Delivery. If Holder desires to participate in the Offer and
time will not permit a Letter of Transmittal or Depositary Receipts for the
Related Depositary Shares being tendered to reach the Exchange Agent before the
Expiration Date for the relevant Offer or the procedure for book-entry transfer
cannot be completed on a timely basis, a tender may be effected if the Exchange
Agent has received at one of its addresses on the back cover page hereof prior
to the Expiration Date, a letter, telegram or facsimile transmission from an
Eligible Institution setting forth the name and address of the tendering Holder,
the name(s) in which the Depositary Receipts are registered and, if the
Depositary Receipts are held in certificated form, the certificate number of the
Depositary Receipts to be tendered, and stating that the tender is being made
thereby and guaranteeing that within three NYSE trading days after the date of
execution of such letter, telegram or facsimile transmission by the Eligible
Institution, the Depositary Receipts in proper form for transfer, together with
a properly completed and duly executed Letter of Transmittal (and any other
required documents), or, in the case of a Depository Institution, an Agent's
Message, will be delivered by such Eligible Institution. Unless the Depositary
Receipts being tendered by the above-described method are deposited with the
Exchange Agent within the time period set forth above (accompanied or preceded
by a properly completed Letter of Transmittal or an Agent's Message) or, in the
case of a Depository Institution, in accordance with such Depositary
Institution's ATOP procedures (along with a Letter of Transmittal or Agent's
Message) is received, the Trust may, at its option, reject the tender. In
addition to the copy being transmitted herewith, copies of a Notice of
Guaranteed Delivery which may be used by Eligible Institutions for the purposes
described in this paragraph are available from the Exchange Agent and the
Information Agent.
Miscellaneous. All questions as to the validity, form, eligibility
(including time of receipt) and acceptance for exchange of any tender of
Depositary Receipts will be determined by the applicable Trust, whose
determination will be final and binding. Each Trust reserves the absolute right
to reject any or all tenders not in proper form or the acceptance for exchange
of which may, in the opinion of the Trust's counsel, be unlawful. Each Trust
also reserves the absolute right to waive any defect or irregularity in the
tender of any Depositary Receipts, and the Trust's interpretation of the terms
and conditions of such Offer (including the instructions in the applicable
Letter of Transmittal) will be final and binding. None of the Trusts, the
Exchange Agent, the Dealer Manager, the Information Agent or any other person
will be under any duty to give notification of any defects or irregularities in
tenders or incur any liability for failure to give any such notification.
Tenders of Depositary Receipts involving any irregularities will not be
deemed to have been made until such irregularities have been cured or waived.
Depositary Receipts received by the Exchange Agent that are not validly tendered
and as to which the irregularities have not been cured or waived will be
returned by the Exchange Agent to the tendering Holder (or in the case of
Depositary Receipts entered by book-entry transfer into the Exchange Agent's
account at a Depository Institution, such Depositary Receipts will be credited
to an account maintained at the Depository Institution designated by the
participant therein who so delivered such Depositary Receipts), unless otherwise
requested by the Holder in the Letter of Transmittal, as promptly as practicable
after the applicable Expiration Date or the withdrawal or termination of the
applicable Offer.
Letter of Transmittal
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Each Letter of Transmittal contains, among other things, the following
terms and conditions, which are part of the related Offer. The party tendering
the Depositary Receipts for exchange (the "Transferor") exchanges, assigns and
transfers the Depositary Receipts (and the underlying Depositary Shares) to the
applicable Trust, and irrevocably constitutes and appoints the Exchange Agent as
the Transferor's agent and attorney-in-fact to cause such Depositary Receipts
(and underlying Depositary Shares) to be assigned, transferred and exchanged.
The Transferor represents and warrants that it has full power and authority to
tender, exchange, assign and transfer such Depositary Receipts and the
underlying Preferred Stock and to acquire Capital Securities issuable upon the
exchange of such tendered Depositary Receipts and that, when such Transferor's
Depositary Receipts are accepted for exchange, the Trust accepting such
Depositary Receipts will acquire good and unencumbered title to the Depositary
Shares evidenced by such Depositary Receipts and the underlying Preferred Stock,
free and clear of all liens, restrictions, charges and encumbrances and not
subject to any adverse claim. The Transferor also warrants that it will, upon
request, execute and deliver any additional documents deemed by such Trust to be
necessary or desirable to complete the exchange, assignment and transfer of
tendered Depositary Receipts and the underlying Depositary Shares or transfer
ownership of such Depositary Receipts on the account books maintained by the
Depository Institution. All authority conferred by the Transferor will survive
the death, bankruptcy or incapacity of the Transferor and every obligation of
the Transferor shall be binding upon the heirs, legal representatives,
successors, assigns, executes and administrators of such Transferor.
Withdrawal of Tenders
Tenders of Depositary Receipts pursuant to an Offer may be withdrawn at
any time prior to the applicable Expiration Date and, unless accepted for
exchange by the applicable Trust, may be withdrawn at any time after the
expiration of 40 Business Days from the date of this Prospectus.
To be effective, a written notice of withdrawal delivered by mail, hand
delivery or facsimile transmission must be timely received by the Exchange Agent
at one of its addresses set forth on the back cover page hereof. The method of
notification is at the risk and election of the Holder. Any such notice of
withdrawal must specify (i) the Holder named in the Letter of Transmittal as
having tendered Depositary Receipts to be withdrawn, (ii) if the Depositary
Receipts are held in certificated form, the certificate numbers of the
Depositary Receipts in respect of such Depositary Shares to be withdrawn, (iii)
that such Holder is withdrawing his election to have such Depositary Shares
exchanged and (iv) the name of the registered Holder of the Depositary Receipts
to be withdrawn. In addition, the notice of withdrawal must be signed by the
Holder in the same manner as the original signature on the Letter of Transmittal
(including any required signature guarantees) or be accompanied by evidence
satisfactory to the Trust that the person withdrawing the tender has succeeded
to the beneficial ownership of the Depositary Shares being withdrawn. The
Exchange Agent will return the properly withdrawn Depositary Receipts promptly
following receipt of notice of withdrawal. If Depositary Receipts have been
tendered pursuant to the procedure for book-entry transfer, any notice of
withdrawal must specify the name and number of the account at the Depository
Institution to be credited with the withdrawn Depositary Receipts and otherwise
comply with such Depository Institution procedures. All questions as to the
validity of notice of withdrawal, including time of receipt, will be determined
by the Trust, and such determination will be final and binding on all parties.
Withdrawals of tenders of Depositary Receipts may not be rescinded and any
Depositary Receipts withdrawn will thereafter be deemed not validly tendered for
purposes of the relevant Offer. Properly withdrawn Depositary Receipts, however,
may be retendered by following the procedures therefore described elsewhere
herein at any time prior to the Expiration Date. See "--Procedures for
Tendering."
52
<PAGE>
Upon the terms and subject to the conditions of the Offer, including the
Minimum Distribution Condition, each Trust will accept for exchange up to the
Maximum Amount of Related Depositary Shares that have been validly tendered and
not withdrawn prior to the Expiration Date.
Each Trust expressly reserves the right, in its sole discretion, to delay
acceptance for exchange of Related Depositary Shares tendered under its Offer
and the delivery of the Capital Securities with respect to the Depositary Shares
accepted for exchange (subject to Rules 13e-4 and 14e-1 under the Exchange Act,
which require that Citicorp and the Trust consummate the Offer or return the
Depositary Receipts deposited by or on behalf of the Holders thereof promptly
after the termination or withdrawal of the Offer), or to amend, withdraw or
terminate the Offer, at any time prior to the applicable Expiration Date for any
of the reasons set forth in "---Conditions to the Offers" and "--- Expiration
Date; Extensions; Amendments; Termination."
If a Trust decides, in its sole discretion, to decrease the number of
Depositary Shares sought in its Offer or to change the amount or form of the
consideration offered to Holders of Depositary Shares, and if the Offer is
scheduled to expire less than ten (10) Business Days from and including the date
that notice of such increase or decrease is first published, sent or given in
the manner specified in "---Expiration Date; Extension; Amendments;
Termination", then such Offer will be extended for a minimum of ten (10)
Business Days from and including the date of such notice.
Unless otherwise specified by the Holder under "Special Delivery
Instructions" in the Letter of Transmittal, all Depositary Receipts not accepted
pursuant to the Offer will be returned to the tendering Holders at Citicorp's
expense as promptly as practicable following the Expiration Date.
Exchange Agent and Information Agent
Citibank has been appointed as Exchange Agent for the Offers.
The Exchange Agent is:
Citibank, N.A.
By Hand: By Mail (registered or certified
Citibank, N.A. mail recommended):
Corporate Agency & Trust Services Citibank, N.A.
111 Wall Street, 5th Floor c/o Citicorp Data Distribution, Inc.
New York, New York P.O. Box 7069
Paramus, New Jersey 07653
By Overnight Courier:
Citibank, N.A.
c/o Citicorp Data
Distribution, Inc.
404 Sette Drive
Paramus, New Jersey 07652
By Facsimile:
(For Eligible Institutions Only)
(201) 262-3240
Confirm Receipt of Notice of Guaranteed Delivery by Telephone:
(800) 422-2066
53
<PAGE>
_______________ has been retained as the Information Agent to assist in
connection with the Offers. Questions and requests for assistance regarding the
Offers, requests for additional copies of this Prospectus, the Letter of
Transmittal and requests for Notice of Guaranteed Delivery may be directed to
the Information Agent.
The Information Agent is:
Citicorp will pay the Exchange Agent and the Information Agent reasonable
and customary fees for their services and will reimburse them for all their
reasonable out-of-pocket expenses in connection therewith.
Dealer Manager; Soliciting Dealers
Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Dealer Manager, has
agreed to solicit exchanges of Depositary Shares for Capital Securities. The
maximum fee payable to the Dealer Manager is approximately $_____ plus any
amount that the Dealer Manager may be entitled to pursuant to the next
paragraph. Citicorp will also reimburse the Dealer Manager for certain
reasonable out-of-pocket expenses in connection with the Offers and will
indemnify the Dealer Manager against certain liabilities, including liabilities
under the Securities Act. The Dealer Manager engages in transactions with, and
from time to time has performed services for, Citicorp, including acting as
underwriter for the issuance of the Depositary Shares.
Citicorp will pay to a Soliciting Dealer a solicitation fee of $_____ per
Depositary Share ($____ per Depositary Share with respect to the solicitation of
beneficial holders of 10,000 or more Depositary Shares for a Series of Preferred
Stock) validly tendered and accepted for exchange pursuant to an Offer. As used
in this Prospectus, "Soliciting Dealer" includes (i) any broker or dealer in
securities, including the Dealer Manager in its capacity as a broker or dealer,
who is a member of any national securities exchange or of the National
Association of Securities Dealers, Inc. (the "NASD"), (ii) any foreign broker or
dealer not eligible for membership in the NASD who agrees to conform to the
NASD's Rules of Fair Practice in soliciting tenders outside the United States to
the same extent as though it were an NASD member, or (iii) any bank or trust
company, any one of whom has solicited and obtained a tender pursuant to the
Offer. No solicitation fee shall be payable to a Soliciting Dealer with respect
to the tender of Depositary Receipts evidencing Depositary Shares by a Holder
unless the Letter of Transmittal accompanying such tender designates such
Soliciting Dealer as such in the box captioned "Solicited Tenders".
If tendered Depositary Receipts are being delivered by book-entry transfer
made to an account maintained by the Exchange Agent with the Depository
Institution, the Soliciting Dealer must return a Notice of Solicited Tenders
(included in the materials provided to brokers and dealers) to the Exchange
Agent within three trading days after the relevant Expiration Date in order to
receive a solicitation fee. No solicitation fee shall be payable to a Soliciting
Dealer in respect of Depositary Shares (i) beneficially owned by such Soliciting
Dealer or (ii) the Depositary Receipts for which are registered in the name of
such Soliciting Dealer unless such Depositary Receipts are held by such
Soliciting Dealer as nominee and the underlying Depositary Shares are being
tendered for the benefit of one or more beneficial owners identified on the
Letter of Transmittal or the Notice of Solicited Tenders. No solicitation fee
shall be payable to a Soliciting Dealer with respect to the tender of
54
<PAGE>
Depositary Shares by the Holder of record of the related Depositary Receipts,
for the benefit of the beneficial owner, unless the beneficial owner has
designated such Soliciting Dealer.
No solicitation fee shall be payable to a Soliciting Dealer if such
Soliciting Dealer is required for any reason to transfer any portion of such fee
to a tendering Holder (other than itself). No broker, dealer, bank, trust
company or fiduciary shall be deemed to be the agent of Citicorp, the Trusts,
the Trustees, the Exchange Agent, the Information Agent or the Dealer Manager
for purposes of the Offers.
Other than as described above, Citicorp will not pay any solicitation fees
to any broker, dealer, bank, trust company or other person for any Depositary
Shares exchanged in connection with the Offers. Citicorp will reimburse such
persons for customary handling and mailing expenses incurred in connection with
the Offers.
Additional solicitations may be made by telephone, in person, or otherwise
by officers and regular employees of Citicorp and its affiliates. No additional
compensation will be paid to any such officers and employees who engage in
soliciting tenders.
LISTING AND TRADING OF CAPITAL SECURITIES AND DEPOSITARY SHARES
The Capital Securities of each Trust constitute a new issue of securities
of such Trust with no established trading market. While application has been
made to list the Capital Securities on the NYSE, there can be no assurance that
an active market for the Capital Securities will develop or be sustained in the
future on such exchange. Although the Dealer Manager has indicated to the Trusts
that it intends to make a market in the Capital Securities following the
respective Expiration Dates, as permitted by applicable laws and regulations,
prior to the commencement of trading on the NYSE, it is not obligated to do so
and may discontinue any such market-making at any time without notice.
Accordingly, no assurance can be given as to the liquidity of, or trading
markets for, the Capital Securities. In order to satisfy the NYSE listing
requirements, acceptance of Depositary Shares validly tendered in each Offer is
subject to the Minimum Distribution Condition, which condition may not be
waived.
Following the respective Expiration Dates, and in accordance with and
subject to applicable law, Citicorp may from time to time acquire Related
Depositary Shares in the open market, by tender offer, subsequent exchange
offer, redemption of the underlying Preferred Stock or otherwise. To the extent
that any such acquisition of Depositary Shares causes the number of outstanding
Depositary Shares for any Series of Preferred Stock to be less than 100,000, the
NYSE may delist such Depositary Shares from the NYSE and the trading market for
such outstanding Depositary Shares for such Series of Preferred Stock could be
adversely affected. Citicorp's decision to make such acquisitions is dependent
on many factors, including market conditions in effect at the time of any
contemplated acquisition. Accordingly, Citicorp cannot predict whether and to
what extent it will acquire any additional Depositary Shares and the
consideration to be paid therefor. In addition, if an Offer is substantially
subscribed, there would be a significant risk that round lot holdings of the
Related Depositary Shares outstanding following the Offer would be limited. See
"Risk Factors and Special Considerations Relating to the Offers -- Lack of
Established Trading Market for Capital Securities" and "-- Reduced Trading
Market for Depositary Shares."
55
<PAGE>
TRANSACTIONS AND ARRANGEMENTS CONCERNING THE OFFERS
Except as described herein, there are no contracts, arrangements,
understandings or relationships in connection with the Offers between Citicorp
or any of its directors or executive officers, the Trusts or the Trustees and
any person with respect to any securities of Citicorp or the Trusts, including
the Subordinated Debt Securities, the Preferred Stock, the Depositary Shares and
the Capital Securities.
FEES AND EXPENSES; TRANSFER TAXES
The expenses of soliciting tenders of the Depositary Shares will be borne
by Citicorp. For compensation to be paid to the Dealer Managers and Soliciting
Dealers, see "The Offers -- Dealer Manager; Soliciting Dealers." The total cash
expenditures to be incurred in connection with the Offers, other than fees
payable to the Dealer Manager and Soliciting Dealers, but including the expenses
of the Dealer Manager, printing, accounting and legal fees, and the fees and
expenses of the Exchange Agent, the Information Agent, the Institutional Trustee
and the Delaware Trustee, are estimated to be approximately $ . Citicorp will
pay all transfer taxes, if any, applicable to the exchange of Depositary Shares
pursuant to the Offers. If, however, certificates representing Capital
Securities or Depositary Receipts not tendered or accepted for exchange are to
be delivered to, or are to be issued in the name of, any person other than the
registered Holder of the Depositary Receipts pursuant to an Offer, then the
amount of any such transfer taxes (whether imposed on the registered Holder or
any other persons) will be payable by the tendering Holder. If satisfactory
evidence of payment of such taxes or exemption therefrom is not submitted with
the Letter of Transmittal, the amount of such transfer taxes will be billed
directly to such tendering Holder.
PRICE RANGE OF DEPOSITARY SHARES
Depositary Shares for each Series of Preferred Stock are listed and
principally traded on the NYSE. The following table sets forth, for each period
shown, the high and low sales prices of the Depositary Shares as reported on the
NYSE Composite Tape. For recent closing prices of the Depositary Shares, see the
cover page of this Prospectus.
<TABLE>
<CAPTION>
Series 16 Series 17 Series 20 Series 21 Series 22
----------------- ----------------- ----------------- ---------------- -----------------
High Low High Low High Low High Low High Low
---- --- ---- --- ---- --- ---- --- ---- ---
1995
----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
First Quarter $24.75 $22.50 $23.13 $21.25 $25.25 $23.13 $25.75 $24.50
Second Quarter 26.00 23.63 25.00 22.75 26.25 24.50 26.50 25.13 $25.80 $25.00
Third Quarter 26.00 25.00 25.25 23.50 27.00 25.25 26.75 25.63 26.13 25.00
Fourth Quarter 26.13 25.13 25.63 24.25 26.63 25.50 27.13 26.13 26.50 25.63
1996
----
First Quarter 26.50 25.13 26.13 24.50 27.25 25.00 27.50 25.84 27.00 25.13
Second Quarter 26.00 24.88 25.63 24.13 26.50 24.75 26.88 26.00 26.06 24.75
Third Quarter 25.88 25.00 25.13 24.25 26.50 25.00 26.88 26.13 26.13 24.88
Fourth Quarter 26.13 25.50 26.00 24.63 27.00 25.88 27.38 26.38 27.00 25.50
</TABLE>
56
<PAGE>
<TABLE>
<CAPTION>
Series 16 Series 17 Series 20 Series 21 Series 22
----------------- ----------------- ----------------- ---------------- -----------------
High Low High Low High Low High Low High Low
---- --- ---- --- ---- --- ---- --- ---- ---
1995
----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997
----
First Quarter 26.25 25.62 26.00 25.50 27.25 26.38 27.75 26.75 27.00 26.38
(through
February 3, 1997) _____ _____ _____ _____ _____ _____ _____ _____ _____ _____
</TABLE>
The issuance dates for the Series of Preferred Stock are as follows: (i)
Series 16 Preferred Stock on June 1, 1993, (ii) Series 17 Preferred Stock on
September 7, 1993, (iii) Series 20 Preferred Stock on September 29, 1994, (iv)
Series 21 Preferred Stock on February 15, 1995 and (v) Series 22 Preferred Stock
on May 19, 1995.
DESCRIPTION OF THE SUBORDINATED DEBT SECURITIES
The Subordinated Debt Securities to be held as assets of the respective
Trusts will be issued under the Base Indenture, as supplemented by a separate
Supplemental Indenture for the series of Subordinated Debt Securities issued to
each Trust (as so supplemented, each an "Indenture"), between Citicorp and
Wilmington Trust Company, as Debt Trustee. The terms of the Subordinated Debt
Securities will include those stated in the applicable Indenture and those made
part of the Indenture by reference to the Trust Indenture Act. The following
summary of the material terms applies equally to the Subordinated Debt
Securities issued to each Trust, does not purport to be com plete and is subject
in all respects to the provisions of, and is qualified in its entirety by
reference to, the Base Indenture and the form of Supplemental Indenture, each of
which is filed as an exhibit to the Registration Statement of which this
Prospectus forms a part, and the Trust Indenture Act. Whenever particular
provisions or defined terms in the Indentures are referred to herein, such
provisions or defined terms are incorporated by reference herein.
General
The Subordinated Debt Securities will be unsecured, subordinated
obligations of Citicorp under the Indenture. The Subordinated Debt Securities
will be issued in multiple series. Citicorp will issue a different series of
Subordinated Debt Securities to each Trust. Each series of Subordinated Debt
Securities will bear interest at a fixed rate per annum equal to the
distribution rate on the Trust Securities issued by the Trust to which such
series is issued. The Subordinated Debt Securities held by each Trust will be
limited in aggregate principal amount to an amount equal to the sum of the
aggregate stated liquidation amounts of the Capital Securities and the Common
Securities issued by such Trust. Only one series of Subordinated Debt Securities
will be issued to a Trust or a trustee of such Trust in connection with the
issuance of Trust Securities by such Trust.
The Subordinated Debt Securities are not subject to a sinking fund
provision. The entire principal amount of the Subordinated Debt Securities will
mature and become due and payable, together with any accrued and unpaid interest
thereon including Compound Interest (as defined herein) and Additional Interest
(as defined herein), if any, on _____________, 2027.
Under certain circumstances involving the dissolution of a Trust following
the occurrence of a Tax Event or a Regulatory Capital Event, Subordinated Debt
Securities held by such Trust may be distributed to the holders of the Trust
Securities of such Trust in liquidation thereof. See "Description of the Capital
Securities--Tax Event Redemption or Distribution" and --"Regulatory Capital
Event Redemption or Distribution".
57
<PAGE>
The Subordinated Debt Securities will be issued in fully registered form
without coupons and in denominations of $25 and multiples thereof. No service
charge will be made for any transfer or exchange of Subordinated Debt
Securities, but Citicorp and the Debt Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
If Subordinated Debt Securities are distributed to holders of the related
Capital Securities in liquidation of such holders' interests in a Trust, such
Subordinated Debt Securities will initially be issued as a Global Security (as
defined herein). As described herein, under certain limited circumstances,
Subordinated Debt Securities may be issued in certificated form in exchange for
a Global Security. See "-- Book-Entry and Settlement" below. In the event that
Subordinated Debt Securities are issued in certificated form, such Subordinated
Debt Securities will be in denominations of $25 and integral multiples thereof
and may be transferred or exchanged at the offices described below. Payments on
Subordinated Debt Securities issued as a Global Security will be made to the
Depositary (as defined herein) or, in the event that no depositary is used, to a
Paying Agent for the Subordinated Debt Securities. In the event Subordinated
Debt Securities are issued in certificated form, principal and interest will be
payable, the transfer of the Subordinated Debt Securities will be registrable
and Subordinated Debt Securities will be exchangeable for Subordinated Debt
Securities of other denominations of a like aggregate principal amount at the
corporate trust office of the Debt Trustee in New York, New York; provided, that
payment of interest may be made at the option of Citicorp by check mailed to the
address of the holder entitled thereto or by wire transfer to an account
appropriately designated by the holder entitled thereto. Notwithstanding the
foregoing, so long as the holder of any Subordinated Debt Securities is the
Institutional Trustee, the payment of principal and interest on the Subordinated
Debt Securities held by the Institutional Trustee will be made at such place and
to such account as may be designated by the Institutional Trustee.
The covenants contained in the Indenture would not necessarily afford
protection to holders of the Subordinated Debt Securities in the event of a
decline in credit quality resulting from takeovers, recapitalization or similar
restructurings.
Subordination
The Indenture provides that the Subordinated Debt Securities are
subordinated and junior in right of payment to all Senior Indebtedness of
Citicorp, including all outstanding subordinated debt securities (other than
those denominated as its Junior Subordinated Deferrable Interest Debentures)
issued by Citicorp. No payment of principal of (including redemption payments),
premium, if any, or interest on the Subordinated Debt Securities may be made if
there shall have occurred and be continuing a default in any payment with
respect to Senior Indebtedness or an event of default with respect to any Senior
Indebtedness resulting in the acceleration of the maturity thereof, or if any
judicial proceeding shall be pending with respect to any such default, unless
and until such default shall have been cured or waived or such proceeding shall
be terminated. Upon any distribution of assets of Citicorp to creditors upon any
dissolution, winding-up, liquidation or reorganization, whether voluntary or
involuntary, or in bankruptcy, insolvency, receivership or other proceedings,
all principal, premium, if any, and interest due or to become due on all Senior
Indebtedness of Citicorp must be paid in full before the holders of Subordinated
Debt Securities are entitled to receive or retain any payment. Notwithstanding
the foregoing, the holders of Senior Indebtedness shall not be entitled to
receive payment of any amounts which would otherwise (but for the subordination
provisions of the Indenture) be payable in respect of the Subordinated Debt
Securities but for the fact that any such Senior Indebtedness is by its terms
subordinated in right of payment to Trade Credit (as defined herein) and, as a
result of which subordination, amounts otherwise payable in respect of such
Senior Indebtedness are to be paid to holders of Trade Credit.
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<PAGE>
The term "Senior Indebtedness" means any obligation of Citicorp to its
creditors, whether outstanding or subsequently incurred, except for (w) any
other subordinated debt securities issued under the Base Indenture, (x) all
other debt securities, and guarantees in respect of those debt securities,
issued to any other trust, or a trustee of such trust, partnership or other
entity affiliated with Citicorp that is a financing vehicle of Citicorp (a
"financing entity") in connection with the issuance by such financing entity of
equity securities or other securities guaranteed by Citicorp pursuant to an
instrument that ranks pari passu with, or junior to, the Guarantee, (y)
obligations incurred or assumed by Citicorp in the ordinary course of business
in connection with the obtaining of materials or services, and all obligations
of Citicorp in respect of any guarantees of such obligations of subsidiaries of
Citicorp (provided that obligations described in this clause (y) ("Trade
Credit") shall not include traveler's checks or other unsubordinated financial
instruments) and (z) any other obligations as to which, in the instrument
creating or evidencing the same or pursuant to which the same is outstanding, it
is provided that such obligation is not Senior Indebtedness. Such Senior
Indebtedness shall continue to be Senior Indebtedness and be entitled to the
benefits of the subordination provisions irrespective of any amendment,
modification or waiver of any term of such Senior Indebtedness. The Indenture
does not limit the aggregate amount of Senior Indebtedness that may be issued by
Citicorp. At December 31, 1996, there was approximately $__billion of Citicorp
Senior Indebtedness outstanding.
Interest
Each series of Subordinated Debt Securities will bear interest from the
original date of issuance at a rate equal to the distribution rate on the Trust
Securities issued by the Trust to which such series of Subordinated Debt
Securities is issued, which rate is set forth for each Trust on the cover page
hereof. Such interest will be payable quarterly in arrears on February 15, May
15, August 15 and November 15 of each year (each an "Interest Payment Date"),
commencing May 15, 1997, to the persons in whose name such Subordinated Debt
Securities are registered, subject to certain exceptions, at the close of
business on the Business Day next preceding such Interest Payment Date. In the
event any Subordinated Debt Securities distributed to holders of Capital
Securities shall not continue to remain in book-entry only form, Citicorp shall
have the right to select different record dates, which shall be not less than
one nor more than 15 Business Days prior to the Interest Payment Date.
The Subordinated Debt Securities will also accrue interest at the
respective rates specified below from February 15, 1997 through the applicable
Expiration Date, payable on May 15, 1997. Such interest will be payable to the
holders of the Subordinated Debt Securities on the record date for such Interest
Payment Date. No deferral of interest will be permitted with respect to interest
accruing from February 15, 1997 through the applicable Expiration Date. Such
interest will accrue at the following rates for the series of Subordinated Debt
Securities issued to the Trust indicated opposite such rate:
Citicorp Capital X: 8.00%
Citicorp Capital XI: 7.50%
Citicorp Capital XII: 8.30%
Citicorp Capital XIII: 8.50%
Citicorp Capital XIV: 7.75%
The amount of interest payable for any period shorter than a full
quarterly period will be computed on the basis of a 360-day year of twelve
30-day months. The amount of interest payable for any period of less than one
month will be computed on the basis of the actual number of days
59
<PAGE>
elapsed in such period. In the event that any date on which interest is payable
on the Subordinated Debt Securities is not a Business Day, then payment of the
interest payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding calendar
year, then such payment shall be made on the immediately preceding Business Day,
in each case with the same force and effect as if made on such date.
Option to Extend Interest Payment Period
So long as no Event of Default shall have occurred and be continuing under
the applicable Indenture, Citicorp shall have the right at any time, and from
time to time, during the term of the Subordinated Debt Securities to defer
payments of interest on any series of Subordinated Debt Securities by extending
the interest payment period for a period not exceeding 20 consecutive quarterly
interest periods from the last interest payment date to which interest on such
series was paid in full, at the end of which Extension Period, Citicorp shall
pay all interest then accrued and unpaid (including any Additional Interest, as
herein defined) together with interest thereon compounded quarterly at the rate
specified for such series of Subordinated Debt Securities to the extent
permitted by applicable law ("Compound Interest"); provided that during any such
Extension Period, (a) Citicorp shall not declare or pay dividends on, make any
distribution with respect to, or redeem, purchase, acquire for value or make a
liquidation payment with respect to any of its capital stock (other than (i)
purchases or acquisitions of shares of Citicorp common stock in connection with
the satisfaction by Citicorp of its obligations under any employee benefit plans
or any other contractual obligations of Citicorp (other than a contractual
obligation ranking pari passu with or junior in right of payment to the
Subordinated Debt Securities) entered into prior to the date of issuance of the
Subordinated Debt Securities, (ii) as a result of a reclassification of Citicorp
capital stock or the exchange or conversion of one class or series of Citicorp's
capital stock for another class or series of Citicorp capital stock or (iii) the
purchase of fractional interests in shares of Citicorp's capital stock pursuant
to the conversion or exchange provisions of such Citicorp capital stock or the
security being converted or exchanged) and (b) Citicorp shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities issued by Citicorp that rank pari passu with or
junior in right of payment to the Subordinated Debt Securities. Prior to the
termination of any such Extension Period, Citicorp may further defer payments of
interest by extending the interest payment period; provided, however, that, such
Extension Period, including all such previous and further extensions, may not
exceed 20 consecutive quarterly interest periods or extend beyond the maturity
of the Subordinated Debt Securities. Upon the termination of any Extension
Period and the payment of all amounts then due, Citicorp may commence a new
Extension Period, subject to the terms set forth in this section. No interest
shall be due and payable during an Extension Period, except at the end thereof.
Citicorp has no present intention of exercising its right to defer payments of
interest by extending the interest payment period on any of the Subordinated
Debt Securities. If the Institutional Trustee of a Trust is the sole holder of a
series of Subordinated Debt Securities, Citicorp shall give the Regular Trustees
and the Institutional Trustee of such Trust notice of its selection of such
Extension Period one Business Day prior to the earlier of (i) the date
distributions on the Capital Securities of such Trust are payable or (ii) the
date the Regular Trustees are required to give notice to the NYSE or any other
applicable self-regulatory organization or to holders of the Capital Securities
of the record date or the date such distribution is payable. The Regular
Trustees of such Trust shall give notice of Citicorp's selection of such
Extension Period to the holders of its Capital Securities. If the Institutional
Trustee is not the sole holder of a series of Subordinated Debt Securities,
Citicorp shall give the holders of the applicable series of Subordinated Debt
Securities notice of its selection of such Extension Period 10 Business Days
prior to the earlier
60
<PAGE>
of (i) the Interest Payment Date or (ii) the date upon which Citicorp is
required to give notice to any applicable self-regulatory organization or to
holders of such Subordinated Debt Securities of the record or payment date of
such related interest payment.
Additional Interest
If at any time a Trust or its Institutional Trustee shall be required to
pay any taxes, duties, assessments or governmental charges of whatever nature
(other than withholding taxes) imposed by the United States or any other taxing
authority, then, in any such case, Citicorp will pay as additional interest
("Additional Interest") on the series of Subordinated Debt Securities held by
such Trust such additional amounts as shall be required so that the net amounts
received and retained by the Trust and the Institutional Trustee after paying
any such taxes, duties, assessments or other governmental charges will be not
less than the amounts the Trust or the Institutional Trustee would have received
had no such taxes, duties, assessments or other governmental charges been
imposed.
Optional Redemption
Citicorp will have the right to redeem any series of Subordinated Debt
Securities, in whole or in part, from time to time, on or after May 15, 2002,
and earlier in certain circumstances upon the occurrence of a Tax Event or a
Regulatory Capital Event as described under "Description of the Capital
Securities -- Tax Event Redemption or Distribution" and "--Regulatory Capital
Event Redemption or Distribution," upon not less than 30 nor more than 60 days'
notice, at a redemption price equal to the applicable Redemption Percentage (as
defined under "Description of the Capital Securities -- Redemption") of the
principal amount to be redeemed plus accrued and unpaid interest, including
Additional Interest, if any, to the redemption date; provided, however, that a
series of Subordinated Debt Securities may not be redeemed in part unless all
unpaid interest thereon, including Additional Interest, accrued through the most
recent quarterly interest period ending on or prior to the date fixed for
redemption shall have been paid. Before effecting any optional redemption,
Citicorp will obtain any approvals of regulatory authorities then required by
applicable law.
Events of Default, Waiver and Notice
The Indenture provides than any one or more of the following described
events which has occurred and is continuing constitutes an "Event of Default"
with respect to a series of Subordinated Debt Securities (an "Indenture Event of
Default"):
(a) default for 30 days in payment of any interest on the Subordinated
Debt Securities of that series, including any Additional Interest in respect
thereof, when due; provided, however, that a valid extension of the interest
payment period by Citicorp shall not constitute a default in the payment of
interest for this purpose; or
(b) default in payment of principal and premium, if any, on the
Subordinated Debt Securities of that series when due either at maturity, upon
redemption, by declaration or otherwise; provided, however, that a valid
extension of the maturity of such Subordinated Debt Securities shall not
constitute a default for this purpose; or
(c) default by Citicorp in the performance of any other of the covenants
or agreements in the Indenture which shall not have been remedied for a period
of 90 days after notice; or
(d) certain events of bankruptcy, insolvency or reorganization of
Citicorp; or
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(e) in the event Subordinated Debt Securities of such series are held by a
Trust or a trustee of such Trust, the voluntary or involuntary dissolution,
winding-up or termination of such Trust, except in connection with the
distribution of Subordinated Debt Securities to the holders of Trust Securities
in liquidation of such Trust, the redemption of all of the Trust Securities of
such Trust, certain mergers, consolidations or amalgamations, each as permitted
by the Declaration of such Trust.
The Indenture provides that the Debt Trustee may withhold notice of an
Indenture Event to Default to the holders of a series of Subordinated Debt
Securities (except a default in payment of principal, interest or premium on the
Subordinated Debt Securities) if the Trustee considers it in the interest of
such holders to do so.
The Indenture provides that, (a) if an Indenture Event of Default due to
the default in the payment of principal, interest or premium, if any, on any
series of Subordinated Debt Securities shall have occurred and be continuing,
either the Debt Trustee or the holders of 25 percent in principal amount of the
Subordinated Debt Securities of all series affected thereby then outstanding may
declare the principal of all such Subordinated Debt Securities to be due and
payable immediately, and (b) if an Indenture Event of Default resulting from
default in the performance of any other of the covenants or agreements in the
Indenture or certain events of bankruptcy, insolvency and reorganization of
Citicorp shall have occurred and be continuing, either the Debt Trustee or the
holders of 25 percent in principal amount of all Subordinated Debt Securities
and other Junior Subordinated Deferrable Interest Debentures of Citicorp then
outstanding (treated as one class) may declare the principal of all Subordinated
Debt Securities to be due and payable immediately, but upon certain conditions
such declarations may be annulled and past defaults may be waived (except
defaults in payment of principal of or interest or premium on the Subordinated
Debt Securities) by the holders of a majority in principal amount of the
Subordinated Debt Securities of such series (or of all series, as the case may
be) then outstanding.
The holders of a majority in principal amount of the Subordinated Debt
Securities of any series affected shall have the right, subject to certain
restrictions, to direct the time, method and place of conducting any proceeding
for any remedy available to the Debt Trustee under the Indenture, provided that
the holders of such Subordinated Debt Securities shall have offered to the Debt
Trustee reasonable indemnity against expenses and liabilities. The Indenture
requires the annual filing by Citicorp with the Debt Trustee of a certificate as
to the absence of certain defaults under the Indenture.
An Indenture Event of Default also constitutes a Declaration Event of
Default with respect to a Trust holding the Subordinated Debt Securities to
which the Indenture Event of Default relates. The holders of Capital Securities
of such Trust in certain circumstances have the right to direct the
Institutional Trustee to exercise its rights as the holder of the Subordinated
Debt Securities. See "Description of the Capital Securities -- Declaration
Events of Default" and "-- Voting Rights." Notwithstanding the foregoing, if an
Indenture Event of Default has occurred and is continuing and such event is
attributable to the failure of Citicorp to pay interest or principal on a series
of Subordinated Debt Securities on the date such interest or principal is
otherwise payable, Citicorp acknowledges that a holder of Capital Securities of
the Trust holding such series of Subordinated Debt Securities may then institute
a Direct Action for payment on or after the respective due date specified in the
Subordinated Debt Securities. Notwithstanding any payments made to such holder
of Capital Securities by Citicorp in connection with a Direct Action, Citicorp
shall remain obligated to pay the principal of or interest on the Subordinated
Debt Securities held by such Trust or the
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Institutional Trustee of such Trust, and Citicorp shall be subrogated to the
rights of the holder of such Capital Securities with respect to payments on such
Capital Securities to the extent of any payments made by the Company to such
holder in any Direct Action. The holders of Capital Securities will not be able
to exercise directly any other remedy available to the holders of the
Subordinated Debt Securities.
Book-Entry and Settlement
If distributed to holders of Capital Securities in connection with the
involuntary or voluntary dissolution, winding-up or liquidation of a Trust as a
result of the occurrence of a Tax Event or a Regulatory Capital Event,
Subordinated Debt Securities will be issued in the form of one or more global
certificates (each a "Global Security") registered in the name of the Depositary
(as hereinafter defined) or its nominee. Except under the limited circumstances
described below, Subordinated Debt Securities represented by a Global Security
will not be exchangeable for, and will not otherwise be issuable as,
Subordinated Debt Securities in definitive form. The Global Securities described
above may not be transferred except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or to a successor depositary or its nominee.
Except as provided below, owners of beneficial interests in such a Global
Security will not be entitled to receive physical delivery of Subordinated Debt
Securities in definitive form and will not be considered the holders (as defined
in the Indenture) thereof for any purpose under the applicable Indenture, and no
Global Security representing Subordinated Debt Securities shall be exchangeable,
except for another Global Security of like denomination and tenor to be
registered in the name of the Depositary or its nominee or to a successor
depositary or its nominee. Accordingly, each Beneficial Owner must rely on the
procedures of the Depositary or if such person is not a Participant, on the
procedures of the Participant through which such person owns its interest to
exercise any rights of a holder under the Indenture.
The Depositary
If Subordinated Debt Securities are distributed to holders of Capital
Securities in liquidation of such holders' interests in a Trust, The Depository
Trust Company ("DTC") will act as securities depositary for the Subordinated
Debt Securities. For a description of DTC and the specific terms of the
depositary arrangements, see "Description of the Capital Securities --
Book-Entry Only Issuance -- The Depository Trust Company." As of the date of
this Prospectus, the description herein of DTC's book-entry system and DTC's
practices as they relate to purchases, transfers, notices and payments with
respect to the Capital Securities apply in all material respects to any debt
obligations of Citicorp represented by one or more Global Securities. Citicorp
may appoint a successor to DTC or any successor depositary in the event DTC or
such successor depositary is unable or unwilling to continue as a depositary for
the Global Securities.
None of Citicorp, the Trusts, the Institutional Trustee, any paying agent
and any other agent of Citicorp, or the Debt Trustee will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a Global Security
for such Subordinated Debt Securities or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Discontinuance of the Depositary's Services
A Global Security shall be exchangeable for Subordinated Debt Securities
registered in the names of persons other than the Depositary or its nominee only
if (i) the Depositary notifies Citicorp that it is unwilling or unable to
continue as a depositary for such Global Security and no successor
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depositary shall have been appointed, (ii) the Depositary, at any time, ceases
to be a clearing agency registered under the Exchange Act at which time the
Depositary is required to be so registered to act as such depositary and no
successor depositary shall have been appointed, (iii) Citicorp, in its sole
discretion, determines that such Global Security shall be so exchangeable or
(iv) there shall have occurred an Event of Default with respect to such
Subordinated Debt Securities. Any Global Security that is exchangeable pursuant
to the preceding sentence shall be exchangeable for Subordinated Debt Securities
registered in such names as the Depositary shall direct. It is expected that
such instructions will be based upon directions received by the Depositary from
its Participants with respect to ownership of beneficial interests in such
Global Security.
Certain Covenants of Citicorp
If (i) there shall have occurred any event that would constitute an
Indenture Event of Default or (ii) Citicorp shall be in default with respect to
its payment of any obligations under a Guarantee, then (a) Citicorp shall not
declare or pay any dividend on, make any distributions with respect to, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
its capital stock (other than (x) purchases or acquisitions of shares of
Citicorp common stock in connection with the satisfaction by Citicorp of its
obligations under any employee benefit plans or any other contractual
obligations of Citicorp (other than a contractual obligation ranking pari passu
with or junior in right of payment to the Subordinated Debt Securities) entered
into prior to the date of issuance of the Subordinated Debt Securities, (y) as a
result of a reclassification of Citicorp capital stock or the exchange or
conversion of one class or series of Citicorp capital stock for another class or
series of Citicorp capital stock or (z) the purchase of fractional interests in
shares of Citicorp capital stock pursuant to the conversion or exchange
provisions of such Citicorp capital stock or the security being converted or
exchanged), and (b) Citicorp shall not make any payment of interest, principal
or premium, if any, on or repay, repurchase or redeem any debt securities issued
by the Company that rank pari passu with or junior in right of payment to such
Subordinated Debt Securities.
If Citicorp shall have given notice of its election to defer payments of
interest on a series of Subordinated Debt Securities by extending the interest
payment period as provided in the Indenture and such period, or any extension
thereof, shall be continuing, then (a) subject to certain limited exceptions
Citicorp shall not declare or pay any dividend on, make any distribu tions with
respect to, or redeem, purchase, acquire for value or make a liquidation payment
with respect to, any of its capital stock, and (b) Citicorp shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities (including guarantees) issued by Citicorp which rank
pari passu with or junior in right of payment to such Subordinated Debt
Securities.
In the event Subordinated Debt Securities are held by a Trust or a trustee
of such Trust, for so long as Trust Securities of such Trust remain outstanding,
Citicorp will covenant (i) to directly or indirectly maintain 100 percent
ownership of the Common Securities of such Trust; provided, however, that any
permitted successor of Citicorp under the Indenture may succeed to Citicorp's
ownership of such Common Securities, (ii) to use its reasonable efforts to cause
such Trust (a) to remain a statutory business trust, except in connection with
the distribution of Subordinated Debt Securities to the holders of Trust
Securities in liquidation of such Trust, the redemption of all of the Trust
Securities of such Trust, or certain mergers, consolidations or amalgamations,
each as permitted by the Declaration of such Trust, and (b) to continue not to
be classified as an association taxable as a corporation or a partnership for
United States federal
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income tax purposes and (iii) to use its reasonable efforts to cause each holder
of Trust Securities to be treated as owning an undivided beneficial interest in
the Subordinated Debt Securities.
Limitation on Mergers and Sales of Assets
Citicorp shall not consolidate with, or merge into, any corporation or
convey or transfer its properties and assets substantially as an entirety to any
Person unless (a) the successor entity shall be a corporation organized under
the laws of any domestic or foreign jurisdiction and shall expressly assume the
obligations of Citicorp under the Indenture and (b) after giving effect thereto,
no Event of Default shall have occurred and be continuing under the Indenture.
Modification of the Indenture
The Indenture contains provisions permitting Citicorp and the Debt
Trustee, with the consent of the holders of not less than a majority in
principal amount of all series of Subordinated Debt Securities and other
securities issued under the Indenture affected by such modification at the time
outstanding, to modify the Indenture or the rights of the holders of
Subordinated Debt Securities; provided that no such modification shall (i)
extend the fixed maturity of any security, or reduce the principal amount
thereof (including in the case of a discounted security the amount payable
thereon in the event of acceleration or the amount provable in bankruptcy) or
any redemption premium thereon, or reduce the rate or extend the time of payment
of interest thereon, or make the principal of, or interest or premium on, any
series of Subordinated Debt Securities payable in any coin or currency other
than that provided in such Subordinated Debt Securities, or impair or affect the
right of any holder of Subordinated Debt Securities to institute suit for the
payment thereof or the right of prepayment, if any, at the option of the holder,
without the consent of the holder of each Security so affected, or (ii) reduce
the aforesaid percentage of Subordinated Debt Securities the consent of the
holders of which is required for any such modifi cation without the consent of
the holders of each security affected.
Defeasance and Discharge
The Indenture provides that Citicorp, at Citicorp's option: (a) will be
discharged from any and all obligations in respect of the Subordinated Debt
Securities of a series (except for certain obligations to register the transfer
or exchange of Subordinated Debt Securities, replace stolen, lost or mutilated
Subordinated Debt Securities, maintain paying agencies and hold moneys for
payment in trust) or (b) need not comply with certain restrictive covenants of
the Indenture (including those described above under "--Certain Covenants of
Citicorp"), in each case if Citicorp deposits, in trust with the Debt Trustee or
the Defeasance Agent, money or U.S. Government Obligations which through the
payment of interest thereon and principal thereof in accordance with their terms
will provide money, in an amount sufficient to pay all the principal of, and
interest and premium, if any, on, the Subordinated Debt Securities of such
series on the dates such payments are due in accordance with the terms of such
Subordinated Debt Securities and if certain other conditions are met. To
exercise any such option, Citicorp is required to deliver to the Debt Trustee
and the Defeasance Agent, if any, an opinion of counsel to the effect that (i)
the deposit and related defeasance would not cause the holders of the
Subordinated Debt Securities of such series to recognize income, gain or loss
for U.S. federal income tax purposes and, in the case of a discharge pursuant to
clause (a), such opinion shall be accompanied by a private letter ruling to the
effect received by Citicorp from the United States Internal Revenue Service or a
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revenue ruling pertaining to a comparable form of transaction to the effect
published by the United States Internal Revenue Service, and (ii) if listed on
any national securities exchange, such Subordinated Debt Securities would not be
delisted from such exchange as a result of the exercise of such option.
Governing Law
The Indenture and the Subordinated Debt Securities will be governed by,
and construed in accordance with, the laws of the State of New York.
The Debt Trustee
Citicorp or its affiliates maintain certain accounts and other banking
relationships with the Debt Trustee and its affiliates.
Miscellaneous
The Indenture will provide that Citicorp will pay all fees and expenses
related to (i) the offering of the Subordinated Debt Securities, (ii) the
organization, maintenance and dissolution of the Trusts, (iii) the retention of
the Trustees and (iv) the enforcement by the Institutional Trustee of the rights
of the holders of the Capital Securities.
Citicorp will have the right at all times to assign any of its respective
rights or obligations under the Indenture to a direct or indirect wholly owned
subsidiary of Citicorp; provided that, in the event of any such assignment,
Citicorp will remain liable for all of their respective obligations. Subject to
the foregoing, the Indenture will be binding upon and inure to the benefit of
the parties thereto and their respective successors and assigns. The Indenture
provides that it may not otherwise be assigned by the parties thereto.
DESCRIPTION OF THE CAPITAL SECURITIES
The Capital Securities will be issued pursuant to the terms of the
Declaration of the issuing Trust, each of which has been qualified as an
indenture under the Trust Indenture Act. The Institutional Trustee will act as
indenture trustee for the Capital Securities under the Declarations for purposes
of compliance with the provisions of the Trust Indenture Act. The terms of the
Capital Securities will include those stated in the Declarations and those made
part of the Declarations by the Trust Indenture Act. The following summary of
the material terms and provisions of the Capital Securities applies equally to
the Capital Securities issued by each Trust and does not purport to be complete
and is subject to, and qualified in its entirety by reference to, the
Declarations, the Trust Act and the Trust Indenture Act.
General
The Declaration of each Trust authorizes the Regular Trustees of each
Trust to issue on behalf of such Trust one, and only one, series of Capital
Securities. The Declaration will be qualified as an indenture under the Trust
Indenture Act. The Capital Securities will have such terms, including
distributions, redemption, voting, liquidation rights and such other preferred,
deferred or other special rights or such restrictions as shall be set forth in
the Declaration of the Trust issuing such Capital Securities or made part of
such Declaration by the Trust Indenture Act and which will substantially mirror
the terms of the Subordinated Debt Securities held by such Trust .
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In connection with its issuance of Capital Securities, each Trust will
issue one series of Common Securities. The Declaration of each Trust authorizes
the Regular Trustees of such trust to issue on behalf of such Trust one series
of Common Securities having such terms including distribu tions, redemption,
voting, liquidation rights or such restrictions as shall be set forth therein.
Except for voting rights, the terms of the Common Securities issued by a Trust
will be substantially identical to the terms of the Capital Securities issued by
such trust and the Common Securities will rank pari passu, and payments will be
made thereon pro rata, with the Capital Securities except that, upon an event of
default under the Declaration, the rights of the holders of the Common
Securities to payment in respect of distributions and payments upon liquidation,
redemption and otherwise will be subordinated to the rights of the holders of
the Capital Securities. Except in certain limited cir cumstances, the Common
Securities will also carry the right to vote to appoint, remove or replace any
of the Trustees of a Trust. All of the Common Securities of each Trust will be
directly or indirectly owned by Citicorp.
The Declarations do not permit the issuance by the Trusts of any
securities other than their respective Trust Securities or the incurrence of any
indebtedness by a Trust. Pursuant to the Declarations, the Institutional
Trustees will own the Subordinated Debt Securities purchased by each Trust for
the benefit of the holders of the Trust Securities. The payment of distributions
out of money held by a Trust, and payments upon redemption of the Capital
Securities or liquidation of a Trust, are guaranteed by Citicorp to the extent
described under "Description of the Guarantees." Each Guarantee will be held by
the Guarantee Trustee for the benefit of the holders of the related Capital
Securities. The Guarantees do not cover payment of distributions when a Trust
does not have sufficient available funds to pay such distributions. In such
event, the remedy of a holder of Capital Securities is to vote to direct the
Institutional Trustee of such Trust to enforce the Institutional Trustee's
rights under the Subordinated Debt Securities, except in the limited
circumstances in which the holder may take Direct Action. See "-- Voting Rights"
and "-- Declaration Events of Default." Citicorp's obligations under the
Guarantees, taken together with its obligations under the Subordinated Debt
Securities, the Indenture and the Declarations, will provide a full and
unconditional guarantee on a subordinated basis by Citicorp of payments due on
the Capital Securities.
Distributions
Distributions on the Capital Securities of a Trust will be fixed at the
respective rate per annum set forth on the cover page hereof of the stated
liquidation amount of $25 per Capital Security. Distributions in arrears for
more than one quarterly period will bear interest thereon at such rate per
annum, compounded quarterly. The term "distribution" as used herein includes any
such interest payable unless otherwise stated. The amount of distributions
payable for any period shorter than a full quarterly period will be computed on
the basis of a 360-day year of twelve 30-day months.
Distributions on the Capital Securities will be cumulative, will accrue
from the applicable Expiration Date and will be payable quarterly in arrears on
February 15, May 15, August 15 and November 15 of each year, commencing May 15,
1997, when, as and if available for payment. Distributions will be made by the
Institutional Trustee or its paying agent, except as otherwise described below.
In addition, holders of the Capital Securities will be entitled to an
additional cash distribution at the rates specified below from February 15, 1997
through the applicable Expiration Date in lieu of dividends accumulating from
February 15, 1997 on the Series of Preferred Stock underlying their Related
Depositary Shares accepted for exchange, but only if and to the extent that
corresponding
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interest payments are made on the Subordinated Debt Securities held by the
Trusts. Such additional distribution will be made on May 15, 1997 to the holders
of Capital Securities on the record date for such distribution.
Citicorp Capital X: 8.00%
Citicorp Capital XI: 7.50%
Citicorp Capital XII: 8.30%
Citicorp Capital XIII: 8.50%
Citicorp Capital XIV: 7.75%
Citicorp has the right under the Indenture to defer payments of interest
on any series of Subordinated Debt Securities by extending the interest payment
period from time to time on such Subordinated Debt Securities. If Citicorp were
to exercise such right, quarterly distributions on the Capital Securities of the
Trust holding such series of Subordinated Debt Securities during any such
extended interest payment period would be deferred (though such distributions
would continue to accrue with interest, compounded quarterly, because compound
interest would continue to accrue on their Subordinated Debt Securities). See
"Description of the Subordinated Debt Securities -- Interest" and "-- Option to
Extend Interest Payment Period." If distributions are deferred, the deferred
distributions and accrued interest thereon shall be paid to holders of record of
the Capital Securities as they appear on the books and records of the Trust on
the record date next following the termination of such deferral period.
Distributions on the Capital Securities of a Trust must be paid on the
dates payable to the extent that the Trust has funds available for the payment
of such distributions in its Property Account. The Trusts' funds available for
distribution to the holders of their Capital Securities will be limited to
payments received from Citicorp on their Subordinated Debt Securities. See
"Description of the Subordinated Debt Securities." The payment of distributions
out of moneys held by the Trust is guaranteed by Citicorp to the extent set
forth under "Description of the Guarantees."
Distributions on the Capital Securities of a Trust will be payable to the
holders thereof as they appear on the books and records of the Trust on the
relevant record dates, which, as long as the Capital Securities remain in
book-entry only form, will be one Business Day (as defined herein) prior to the
relevant payment dates. Such distributions will be paid by or on behalf of the
Institutional Trustee, which will hold amounts received in respect of the
Subordinated Debt Securities in the Trust's Property Account for the benefit of
the holders of the Trust Securities. Subject to any applicable laws and
regulations and the provisions of the Declaration, each such payment will be
made as described under "-- Book-Entry Only Issuance -- The Depository Trust
Company" below. In the event that the Capital Securities do not continue to
remain in book-entry only form, the Regular Trustees will have the right to
select relevant record dates, which may be more than one Business Day but not
more than ten Business Days prior to the relevant payment dates. In the event
that any date on which distributions are to be made on the Capital Securities is
not a Business Day, then payment of the distributions payable on such date will
be made on the next succeeding day which is a Business Day (but without any
interest or other payment in respect of any such delay).
Redemption
Upon the repayment of the Subordinated Debt Securities, whether at
maturity or upon redemption, the proceeds from such repayment or redemption will
simultaneously be applied to redeem, at the Redemption Price, Trust Securities
having an aggregate liquidation amount equal to the aggregate principal amount
of the Subordinated Debt Securities so repaid or redeemed; provided
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that holders of Trust Securities shall be given not less than 30 nor more than
60 days' notice of any redemption.
The Company has the right to redeem the Subordinated Debt Securities, in
whole or in part, at any time on or after May 15, 2002, and earlier, in certain
circumstances, if a Tax Event or a Regulatory Capital Event shall have occurred
and be continuing. The "Redemption Price" for the Capital Securities, in the
case of any such redemption, will equal the applicable Redemption Percentage
(determined as described below) of the stated liquidation amount of $25 per
Capital Security, plus accrued distributions to but excluding the date fixed for
redemption.
The Redemption Percentage will be 100% for any redemption on or after May
15, 2002.
In the case of a redemption following a Tax Event or Regulatory Capital
Event prior to May 15, 2002, the respective Redemption Percentages for the
Capital Securities of the Trusts will equal the applicable percentage set out in
the following table if the redemption date occurs in the 12-month period
beginning May 15 in the year indicated.
Redemption Percentages
Citicorp Citicorp Citicorp Citicorp Citicorp
Year Capital X Capital XI Capital XII Capital XIII Capital XIV
- ---- --------- ---------- ----------- ------------ -----------
1997
1998
1999
2000
2001
Tax Event Redemption or Distribution
"Tax Event" means that the Regular Trustees shall have received an opinion
(a "Dissolution Tax Opinion") of a nationally recognized independent tax counsel
experienced in such matters ("Tax Counsel") to the effect that, as a result of
(a) any amendment to, clarification of or change (including any announced
prospective change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein or
(b) any amendment to, clarification of or change in an interpretation or
application of such laws or regulations by any legislative body, court,
governmental agency or regulatory authority (including the enactment of any
legislation and the publication of any judicial decision or regulatory
determination on or after such date), there is more than an insubstantial risk
that (i) a Trust would be subject to United States federal income tax with
respect to income accrued or received on the Subordinated Debt Securities, (ii)
interest payable to a Trust on any Subordinated Debt Securities would not be
deductible by Citicorp for United States federal income tax purposes or (iii) a
Trust would be subject to more than a de minimis amount of other taxes, duties
or other governmental charges, provided that any such change, clarification or
amendment becomes effective on or after the date of this Prospectus.
If, at any time prior to May 15, 2002, a Tax Event shall occur and be
continuing, Citicorp may cause any Trust to be dissolved, with the result that
after satisfaction of liabilities to creditors, if any, Subordinated Debt
Securities held by such Trust with an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate identical to the
distribution rate of, and accrued and unpaid interest equal to accrued and
unpaid distributions on, the Trust Securities of such
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Trust, would be distributed to the holders of such Trust Securities in
liquidation of such holders' interests in the Trust on a pro rata basis within
90 days following the occurrence of such Tax Event; provided that such
dissolution and distribution shall be conditioned on (i) the Regular Trustees'
receipt of an opinion of Tax Counsel (a "No Recognition Opinion"), which opinion
may rely on published revenue rulings of the Internal Revenue Service, to the
effect that the holders of the Trust Securities will not recognize any gain or
loss for United States federal income tax purposes as a result of such
dissolution and distribution of Subordinated Debt Securities and (ii) Citicorp
being unable to avoid such Tax Event within such 90-day period by taking some
ministerial action or pursuing some other reasonable measure that will have no
adverse effect on the Trust, Citicorp or the holders of the Trust Securities.
Furthermore, if after receipt of a Dissolution Tax Opinion by the Regular
Trustees, (i) Citicorp has received an opinion (a "Redemption Tax Opinion") of
Tax Counsel that, as a result of a Tax Event, there is more than an
insubstantial risk that Citicorp would be precluded from deducting the interest
on any series of Subordinated Debt Securities for United States federal income
tax purposes, even after the Subordinated Debt Securities were distributed to
the holders of the related Trust Securities in liquidation of such holders'
interests in the Trust as described above, or (ii) the Regular Trustees shall
have been informed by such Tax Counsel that it cannot deliver a No Recognition
Opinion to the Trust, Citicorp shall have the right, within 90 days following
the occurrence of such Tax Event, to redeem any series of Subordinated Debt
Securities, in whole or in part, upon not less than 30 nor more than 60 days'
notice, for cash, with the result that, following such redemption, the Trust
Securities of the affected Trust having an aggregate liquidation amount equal to
the principal amount of the Subordinated Debt Securities so redeemed will be
redeemed by such Trust at the Redemption Price; provided, however, that if at
the time there is available to Citicorp or such Trust the opportunity to
eliminate, within such 90-day period, the Tax Event by taking some ministerial
action, such as filing a form or making an election or pursuing some other
similar reasonable measure that has no adverse effect on such Trust, Citicorp or
the holders of the related Trust Securities, then Citicorp or such Trust will
pursue such measure in lieu of redemption of the Subordinated Debt Securities.
In the event a Tax Event in respect of the Capital Securities has occurred
and is continuing and Citicorp does not (i) redeem all of the related
Subordinated Debt Securities and thereby cause a mandatory redemption of such
Capital Securities as described above or (ii) cause the Trust to be dissolved
and cause such Subordinated Debt Securities to be distributed in liquidation
thereof as described above, some or all of the Capital Securities of such Trust
will remain outstanding and Additional Interest (as defined herein) may be
payable on the Subordinated Debt Securities.
Regulatory Capital Event Redemption or Distribution
"Regulatory Capital Event" means a determination by Citicorp, based on an
opinion of counsel experienced in such matters (who may be an employee of
Citicorp or any of its affiliates), that, as a result of (a) any amendment to,
clarification of or change (including any announced prospective change) in
applicable laws or regulations or official interpretations thereof or policies
with respect thereto or (b) any official administrative pronouncement or
judicial decision interpreting or applying such laws or regulations, which
amendment, clarification, change, pronouncement or decision is announced or is
effective after the date of this Prospectus, there is more than an insubstantial
risk that any of the Capital Securities will no longer constitute Tier 1 capital
of Citicorp (or its equivalent) for purposes of the capital adequacy guidelines
or policies of the Board of Governors of the Federal Reserve System or its
successor as Citicorp's primary federal banking regulator.
If, at any time prior to May 15, 2002, a Regulatory Capital Event shall
occur and be continuing, Citicorp may (i) cause any Trust to be dissolved, with
the result that after satisfaction of liabilities to creditors, if any,
Subordinated Debt Securities held by such Trust with an aggregate principal
amount equal to the aggregate stated liquidation amount of, with an interest
rate identical
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to the distribution rate of, and accrued and unpaid interest equal to accrued
and unpaid distributions on, the Trust Securities of such Trust, would be
distributed to the holders of such Trust Securities in liquidation of such
holders' interests in the Trust on a pro rata basis within 90 days following the
occurrence of such Regulatory Capital Event or (ii) within 90 days following the
occurrence of such Regulatory Capital Event, redeem the Subordinated Debt
Securities, in whole or in part, upon not less than 30 nor more than 60 days'
notice, for cash, with the result that, following such redemption, the Capital
Securities of the Trust holding the redeemed Subordinated Debt Securities will
be redeemed by such Trust at the applicable Redemption Price; provided, however,
that if at the time there is available to Citicorp or the Trust the opportunity
to eliminate, within such 90-day period, the Regulatory Capital Event by taking
some ministerial action, such as filing a form or making an election or pursuing
some other similar reasonable measure that has no adverse effect on the Trust,
Citicorp or the holders of the Trust Securities of such Trust, then Citicorp or
the Trust will pursue such measure in lieu of distribution or redemption of the
related Subordinated Debt Securities.
Distribution of Subordinated Debt Securities
After the date for any distribution of Subordinated Debt Securities upon
dissolution of a Trust, (i) the Capital Securities of such Trust will no longer
be deemed to be outstanding, (ii) the Depositary or its nominee, as the record
holder of such Capital Securities, will receive a registered global certificate
or certificates representing the Subordinated Debt Securities to be delivered
upon such distribution and (iii) any certificates representing Capital
Securities of such Trust not held by the Depositary or its nominee will be
deemed to represent Subordinated Debt Securities having an aggregate principal
amount equal to the aggregate stated liquidation amount of, with an interest
rate identical to the distribution rate of, and accrued and unpaid interest
equal to accrued and unpaid distributions on such Capital Securities until such
certificates are presented to Citicorp or its agent for transfer or reissuance.
Redemption Procedures
A Trust may not redeem fewer than all of its outstanding Capital
Securities unless all accrued and unpaid distributions have been paid on all
such Capital Securities for all quarterly distribution periods terminating on or
prior to the date of redemption.
If a Trust gives a notice of redemption in respect of its Capital
Securities (which notice will be irrevocable), then, by noon, New York City
time, on the redemption date, provided that Citicorp has paid to the
Institutional Trustee a sufficient amount of cash in connection with the related
redemption or maturity of the Subordinated Debt Securities held by such Trust,
the Trust will irrevocably deposit with the Depositary funds sufficient to pay
the applicable Redemption Price and will give the Depositary irrevocable
instructions and authority to pay the Redemption Price to the holders of the
Capital Securities to be redeemed. See "-- Book-Entry Only Issuance -- The
Depository Trust Company." If notice of redemption shall have been given and
funds deposited as required, then, immediately prior to the close of business on
the date of such deposit, distributions will cease to accrue and all rights of
holders of such Capital Securities so called for redemption will cease, except
the right of the holders of such Capital Securities to receive the Redemption
Price (but without interest) on or after such redemption date, except as
described below. In the event that any date fixed for redemption of Capital
Securities is not a Business Day, then payment of the Redemption Price payable
on such date will be made on the next succeeding day that is a Business Day
(without any interest or other payment in respect of any such delay), except
that, if such Business Day falls in the next calendar year, such payment will be
made on the immediately preceding Business Day. In the event that payment of the
Redemption Price in respect of Capital Securities is improperly withheld or
refused and not paid, either by the Trust or by Citicorp pursuant to the
Guarantee, distributions on such Capital Securities will continue to accrue at
the then applicable rate from the
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original redemption date to the date of payment, in which case the actual
payment date will be considered the date fixed for redemption for purposes of
calculating the Redemption Price.
In the event that fewer than all of the outstanding Capital Securities of
a Trust are to be redeemed, the Capital Securities will be redeemed as described
below under "-- Book-Entry Only Issuance -- The Depository Trust Company."
Subject to the foregoing, applicable law (including, without limitation,
United States federal securities laws), and any other applicable restrictions,
Citicorp or its subsidiaries may at any time, and from time to time, purchase
outstanding Capital Securities by tender, in the open market or by private
agreement.
Liquidation Distribution Upon Dissolution
In the event of any voluntary or involuntary liquidation, dissolution,
winding-up of such Trust or termination of a Trust (each a "Liquidation"), the
then holders of the Trust Securities of such Trust will be entitled to receive
out of the assets of the Trust, after satisfaction of liabilities to creditors,
distributions in an amount equal to the aggregate of the stated liquidation
amount of $25 per Trust Security plus accrued and unpaid distributions thereon
to the date of payment (the "Liquidation Distribution"), unless, in connection
with such Liquidation, Subordinated Debt Securities in an aggregate stated
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the distribution rate of, and accrued and unpaid
interest equal to accrued and unpaid distributions on, such Trust Securities
have been distributed on a pro rata basis to the holders of such Trust
Securities.
If, upon any such Liquidation, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Trust Securities shall be paid on a pro rata basis. The holders of
the Common Securities of the Trust will be entitled to receive distributions
upon any such dissolution pro rata with the holders of the Capital Securities,
except that if a Declaration Event of Default has occurred and is continuing
under the Declaration for such Trust, the Capital Securities shall have a
preference over the Common Securities with regard to such distributions.
Pursuant to the Declarations, each Trust shall dissolve (i) on
___________, 2052, the expiration of the term of the Trust, (ii) upon the
bankruptcy of Citicorp, (iii) upon the filing of a certificate of dissolution or
its equivalent with respect to Citicorp, the consent of the holders of at least
a majority in liquidation amount of the Trust Securities affected thereby voting
together as a single class to file a certificate of cancellation with respect to
the Trust or the revocation of the charter of Citicorp and the expiration of 90
days after the date of revocation without a reinstatement thereof, (iv) upon the
occurrence of a Tax Event or a Regulatory Capital Event and the distribution of
the Subordinated Debt Securities to the holders of Trust Securities in exchange
for all Trust Securities of the Trust, (v) upon the entry of a decree of a
judicial dissolution of Citicorp (or an affiliate that is a subsequent holder of
the Common Securities) or the Trust or (vi) upon the redemption of all the Trust
Securities of such Trust. Pursuant to the Declarations, as soon as practicable
after the dissolution of a Trust and upon completion of the winding up of such
Trust, the Trust shall terminate upon the filing of a certificate of
cancellation.
Declaration Events of Default
An Indenture Event of Default constitutes an event of default under the
Declaration of the Trust holding Subordinated Debt Securities of the series to
which the Indenture Event of Default relates (a "Declaration Event of Default");
provided that pursuant to each Declaration, the holder of the Common Securities
will be deemed to have waived any Declaration Event of Default with respect
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to the Common Securities until all Declaration Events of Default with respect to
the Capital Securities of the Trust have been cured, waived or otherwise
eliminated. Until such Declaration Events of Default with respect to the Capital
Securities of a Trust have been so cured, waived, or otherwise eliminated, the
Institutional Trustee of the Trust will be deemed to be acting solely on behalf
of the holders of the Capital Securities and only the holders of the Capital
Securities will have the right to direct the Institutional Trustee with respect
to certain matters under the Declaration, and therefore the Indenture. If the
Institutional Trustee fails to enforce its rights under the Subordinated Debt
Securities after a holder of Capital Securities of the Trust has made a written
request, such holder of record of Capital Securities may institute a legal
proceeding against Citicorp to enforce the Institutional Trustee's rights under
the Subordinated Debt Securities held by such Trust without first instituting
any legal proceeding against the Institutional Trustee or any other person or
entity. Notwithstanding the foregoing, if a Declaration Event of Default has
occurred and is continuing with respect to a Trust and such event is
attributable to the failure of Citicorp to pay interest or principal on the
Subordinated Debt Securities held by the Trust on the date such interest or
principal is otherwise payable (or in the case of redemption, the redemption
date), then a holder of Capital Securities of such Trust may directly institute
a proceeding for enforcement of payment to such holder directly of the principal
of or interest on the related Subordinated Debt Securities having a principal
amount equal to the aggregate liquidation amount of the Capital Securities of
such holder on or after the respective due date specified in the Subordinated
Debt Securities. In connection with such Direct Action, Citicorp will be
subrogated to the rights of such holder of Capital Securities under the
Declaration to the extent of any payment made by Citicorp to such holder of
Capital Securities in such Direct Action. The holders of Capital Securities will
not be able to exercise directly any other remedy available to the holders of
the Subordinated Debt Securities.
Citicorp and the Trusts are each required to file annually with the
Institutional Trustee an officer's certificate as to its compliance with all
conditions and covenants under the Declarations.
Voting Rights
Except as described herein, under the Trust Act, the Trust Indenture Act
and under "Description of the Guarantees -- Modification of the Guarantees;
Assignment", and as otherwise required by law and the Declarations, the holders
of the Capital Securities will have no voting rights.
Subject to the requirement of the Institutional Trustee obtaining a tax
opinion in certain circumstances set forth in the last sentence of this
paragraph, the holders of a majority in aggregate liquidation amount of the
Capital Securities of a Trust have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Institutional
Trustee of such Trust, or direct the exercise of any trust or power conferred
upon the Institutional Trustee under the Declaration of such Trust including the
right to direct the Institutional Trustee, as holder of the Subordinated Debt
Securities issued to the Trust, to (i) exercise the remedies available to it
under the Indenture as a holder of the Subordinated Debt Securities, (ii) waive
any past default that is waivable under the Indenture, (iii) exercise any right
to rescind or annul a declaration that the principal of all the Subordinated
Debt Securities shall be due and payable or (iv) consent to any amendment,
modification or termination of the Indenture or the Subordinated Debt Securities
where such consent shall be required; provided, however, that, where a consent
or action under the Indenture would require the consent or act of holders of
more than a majority in principal amount of the Subordinated Debt Securities (a
"Super-Majority") affected thereby, only the holders of at least a percentage
equivalent to such Super-Majority in aggregate liquidation amount of the Capital
Securities of such Trust may direct the Institutional Trustee to give such
consent or take such action. The Institutional Trustee shall notify all holders
of the Trust's Capital Securities of any notice of default received from the
Debt Trustee with respect to the Subordinated Debt Securities held by the Trust.
Such notice shall state that such Indenture Event of Default also constitutes a
Declaration Event of Default. Except
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with respect to directing the time, method and place of conducting a proceeding
for a remedy, the Institutional Trustee shall not take any of the actions
described in clauses (i), (ii), (iii) or (iv) above unless the Institutional
Trustee has obtained an opinion of tax counsel to the effect that, as a result
of such action, the Trust will not fail to be classified as a grantor trust for
United States federal income tax purposes.
In the event the consent of the Institutional Trustee of a Trust, as the
holder of Subordinated Debt Securities, is required under the Indenture with
respect to any amendment, modification or termination of the Indenture, the
Institutional Trustee shall request the direction of the holders of the Trust
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a majority in liquidation amount of the Trust Securities of such Trust voting
together as a single class; provided, however, that (i) where the taking of any
such action under the Indenture would require the consent of a Super- Majority,
the Institutional Trustee may only give such consent at the direction of the
holders of at least the proportion in liquidation amount of the Trust Securities
of such Trust which the relevant Super-Majority represents of the aggregate
principal amount of the Subordinated Debt Securities outstanding and (ii) where
the taking of such action would require the consent of every holder of
Subordinated Debt Securities, the consent of all holders of Trust Securities of
such Trust shall be required. The Institutional Trustee shall not take any such
action in accordance with the directions of the holders of the Trust Securities
unless the Institutional Trustee has obtained an opinion of tax counsel to the
effect that the Trust will not be classified as other than a grantor trust for
United States federal income tax purposes.
A waiver of an Indenture Event of Default will constitute a waiver of the
corresponding Declaration Event of Default.
Any required approval or direction of holders of Capital Securities of a
Trust may be given at a separate meeting of holders of such Capital Securities
convened for such purpose, at a meeting of all of the holders of Trust
Securities of the Trust or pursuant to written consent. The Regular Trustees of
a Trust will cause a notice of any meeting at which holders of Capital
Securities are entitled to vote, or of any matter upon which action by written
consent of such holders is to be taken, to be mailed to each holder of record of
Capital Securities. Each such notice will include a statement setting forth the
following information: (i) the date of such meeting or the date by which such
action is to be taken; (ii) a description of any resolution proposed for
adoption at such meeting on which such holders are entitled to vote or of such
matter upon which written consent is sought; and (iii) instructions for the
delivery of proxies or consents. No vote or consent of the holders of Capital
Securities will be required for a Trust to redeem and cancel Capital Securities
or distribute Subordinated Debt Securities in accordance with its Declaration.
Notwithstanding that holders of Capital Securities are entitled to vote or
consent under any of the circumstances described above, any of the Capital
Securities that are owned at such time by Citicorp or any entity directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, Citicorp, shall not be entitled to vote or consent and shall, for
purposes of such vote or consent, be treated as if such Capital Securities were
not outstanding, unless all of the Capital Securities of the Trust are owned by
Citicorp or any such entity.
The procedures by which holders of Capital Securities may exercise their
voting rights are described below. See "-- Book-Entry Only Issuance -- The
Depository Trust Company" below.
Holders of the Capital Securities will have no rights to appoint or remove
the Trustees, who may be appointed, removed or replaced solely by Citicorp as
the indirect or direct holder of all of the Common Securities.
Modification of the Declarations
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Each Declaration may be modified and amended if approved by the Regular
Trustees (and in certain circumstances the Institutional Trustee) of the
applicable Trust, subject to certain conditions, provided that, if any proposed
amendment provides for, or the Regular Trustees otherwise propose to effect, (i)
any action that would adversely affect the powers, preferences or special rights
of the Trust Securities of the Trust, whether by way of amendment to the
Declaration or otherwise or (ii) the dissolution, winding-up or termination of
the Trust other than pursuant to the terms of the Declaration, then the holders
of the outstanding Trust Securities of the Trust voting together as a single
class will be entitled to vote on such amendment or proposal and such amendment
or proposal shall not be effective except with the approval of at least a
majority in liquidation amount of the Trust Securities of the Trust affected
thereby; provided that, if any amendment or proposal referred to in clause (i)
above would adversely affect only the Capital Securities or the Common
Securities of the Trust, then only the affected class will be entitled to vote
on such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of a majority in liquidation amount of such
class.
Notwithstanding the foregoing, no amendment or modification may be made to
a Declaration of a Trust if such amendment or modification would (i) cause the
Trust to be classified for purposes of United States federal income taxation as
other than a grantor trust, (ii) reduce or otherwise adversely affect the powers
of the Institutional Trustee in contravention of the Trust Indenture Act or
(iii) cause the Trust to be deemed an "investment company" which is required to
be registered under the Investment Company Act of 1940, as amended (the "1940
Act").
Mergers, Consolidations or Amalgamations
A Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety, to any corporation or other body, except as
described below. A Trust may, with the consent of its Regular Trustees and
without the consent of the holders of its Trust Securities or its Institutional
Trustee, consolidate, amalgamate, merge with or into, or be replaced by a trust
organized as such under the laws of any State of the United States; provided,
that (i) if the Trust is not the survivor such successor entity either (x)
expressly assumes all of the obligations of the Trust under the Trust Securities
or (y) substitutes for the Trust Securities other securities having
substantially the same terms as the Trust Securities (the "Successor
Securities"), so long as the Successor Securities rank the same as the Common
Securities and Capital Securities, respectively, rank with respect to
distributions and payments upon liquidation, redemption and otherwise, (ii)
Citicorp expressly acknowledges a trustee of such successor entity possessing
the same powers and duties as the Institutional Trustee as the holder of the
Subordinated Debt Securities, (iii) the Capital Securities or any Successor
Securities are listed quoted, or any Successor Securities will be so upon
notification of issuance, on any national securities exchange or other
organization on which the Capital Securities are then listed or quoted, (iv)
such merger, consolidation, amalgamation or replacement does not cause the
Capital Securities of the Trust (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization, (v)
such merger, consolidation, amalgamation or replacement does not adversely
affect the rights, preferences and privileges of the holders of the Trust
Securities of the Trust (including any Successor Securities) in any material
respect (other than with respect to any dilution of the holders' interest in the
new entity), (vi) such successor entity has a purpose identical to that of the
Trust, (vii) prior to such merger, consolidation, amalgamation or replacement,
Citicorp has received an opinion of counsel to the Trust to the effect that (A)
such merger, consolidation, amalgamation or replacement does not adversely
affect the rights, preferences and privileges of the holders of the Trust
Securities of the Trust (including any Successor Securities) in any material
respect (other than with respect to any dilution of the holders' interest in the
new entity), and (B) following such merger,
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consolidation, amalgamation or replacement, neither the Trust nor such successor
entity will be required to register as an investment company under the 1940 Act
and (C) the Trust or successor entity will continue to be classified as a
grantor trust for United States federal income tax purposes and (viii) Citicorp
guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantees and the Common
Securities Guarantees (as defined herein). Notwithstanding the foregoing, a
Trust shall not, except with the consent of holders of 100 percent in
liquidation amount of its Trust Securities, consolidate, amalgamate, merge with
or into, or be replaced by any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it, if such
consolidation, amalgamation, merger or replacement would cause the Trust or the
successor entity to be classified as other than a grantor trust for United
States federal income tax purposes.
Book-Entry Only Issuance -- The Depository Trust Company
DTC will act as Depositary for the Capital Securities. The Capital
Securities will be issued only as fully-registered securities registered in the
name of Cede & Co. (DTC's nominee). One or more fully-registered global Capital
Securities certificates ("Global Certificates"), representing the total
aggregate number of Capital Securities of each Trust, will be issued and will be
deposited with DTC.
The laws of some jurisdictions may require that certain purchasers of
securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in securities
represented by a global certificate deposited with DTC.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Participants in DTC
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. DTC is owned by a number of its
Participants and by the New York Stock Exchange, the American Stock Exchange and
the National Association of Securities Dealers. Access to the DTC system is also
available to others, such as securities brokers and dealers, banks and trust
companies that clear transactions through or maintain a custodial relationship
with a Direct Participant either directly or indirectly ("Indirect
Participants"). The rules applicable to DTC and its Participants are on file
with the Securities and Exchange Commission.
Purchases of Capital Securities within the DTC system must be made by or
through Participants, which will receive a credit for the Capital Securities on
DTC's records. The ownership interest of each actual beneficial owner of each
Capital Security ("Beneficial Owner") is in turn to be recorded on the
Participants' and Indirect Participants' records. Beneficial Owners will not
receive written confirmation from DTC of their purchases, but Beneficial Owners
are expected to receive written confirmations providing details of the
transactions, as well as periodic statements of their holdings, from the Direct
or Indirect Participants through which the Beneficial Owners purchased Capital
Securities. Transfers of ownership interests in the Capital Securities are to be
accomplished by entries made on the books of Participants acting on behalf of
Beneficial Owners. Beneficial Owners will not receive certificates representing
their ownership interests in the Capital Securities, except in the event that
use of the book-entry system for the Capital Securities is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Capital
Securities. DTC's records reflect only the identity of the Direct Participants
to whose accounts such Capital Securities
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are credited, which may or may not be the Beneficial Owners. The Participants
and Indirect Participants will remain responsible for keeping account of their
holdings on behalf of their customers.
So long as DTC, or its nominee, is the registered owner or holder of a
Global Certificate, DTC or such nominee, as the case may be, will be considered
the sole owner or holder of the Capital Securities represented thereby for all
purposes under the Declarations and the Capital Securities. No beneficial owner
of an interest in a Global Certificate will be able to transfer that interest
except in accordance with DTC's applicable procedures, in addition to those
provided for under the Declarations.
DTC has advised Citicorp that it will take any action permitted to be
taken by a holder of Capital Securities (including the presentation of Capital
Securities for exchange as described below) only at the direction of one or more
Participants to whose account the DTC interests in the Global Certificates are
credited and only in respect of such portion of the aggregate liquidation amount
of Capital Securities as to which such Participant or Participants has or have
given such direction.
Conveyance of notices and other communications by DTC to Participants, by
Participants to Indirect Participants, and by Participants and Indirect
Participants to Beneficial Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in effect from
time to time.
Redemption notices in respect of the Capital Securities held in book-entry
form will be sent to Cede & Co. If less than all of the Capital Securities of a
Trust are being redeemed, DTC will determine the amount of the interest of each
Participant to be redeemed in accordance with its procedures.
Although voting with respect to the Capital Securities is limited, in
those cases where a vote is required, neither DTC nor Cede & Co. will itself
consent or vote with respect to Capital Securities. Under its usual procedures,
DTC would mail an Omnibus Proxy to the relevant Trust as soon as possible after
the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting
rights to those Participants to whose accounts the Capital Securities of such
Trust are credited on the record date (identified in a listing attached to the
Omnibus Proxy).
Distributions on the Capital Securities held in book-entry form will be
made to DTC in immediately available funds. DTC's practice is to credit
Participants' accounts on the relevant payment date in accordance with their
respective holdings shown on DTC's records unless DTC has reason to believe that
it will not receive payments on such payment date. Payments by Participants and
Indirect Participants to Beneficial Owners will be governed by standing
instructions and customary practices and will be the responsibility of such
Participants and Indirect Participants and not of DTC, the Trusts or Citicorp,
subject to any statutory or regulatory requirements as may be in effect from
time to time. Payment of distributions to DTC is the responsibility of the
Trust, disbursement of such payments to Participants is the responsibility of
DTC, and disbursement of such payments to the Beneficial Owners is the
responsibility of Participants and Indirect Participants.
Except as provided herein, a Beneficial Owner of an interest in a Global
Certificate will not be entitled to receive physical delivery of Capital
Securities. Accordingly, each Beneficial Owner must rely on the procedures of
DTC to exercise any rights under the Capital Securities.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Certificates among Participants of DTC, DTC
is under no obligation to perform or continue to perform such procedures, and
such procedures may be discontinued at any time. Neither Citicorp, the Trusts
nor the Trustees will have any responsibility for the performance by DTC or its
Participants or Indirect Participants under the rules and procedures governing
DTC. DTC may discontinue providing its services as securities depositary with
respect to the Capital Securities of any Trust at any time by giving notice to
such Trust. Under such circumstances, in the event that a successor securities
depositary is not obtained, Capital Security certificates are required
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to be printed and delivered. Additionally, any Trust (with the consent of
Citicorp) may decide to discontinue use of the system of book-entry transfers
through DTC (or a successor depositary). In that event, certificates for the
Capital Securities of such Trust will be printed and delivered.
Payment and Paying Agency
Payments in respect of the Capital Securities represented by the Global
Certificates will be made to DTC, which will credit the relevant accounts at DTC
on the applicable distribution dates, provided that, in the case of Certificated
Securities, such payments will be made by check mailed to the address of the
holder entitled thereto at its registered address. The paying agent will
initially be Citibank, N.A. The paying agent will be permitted to resign upon 30
days' written notice to the Institutional Trustee. In the event that Citibank,
N.A. shall no longer be the paying agent, the Institutional Trustee will appoint
a successor to act as paying agent (which shall be a bank or trust company).
Registrar and Transfer Agent
Citibank, N.A. will act as registrar and transfer agent for the Capital
Securities. Registration of transfers of Capital Securities will be effected
without charge by or on behalf of the Trust issuing such Capital Securities, but
upon payment (with the giving of such indemnity as the Trust or the Company may
reasonably require) in respect of any tax or other government charges which may
be imposed in relation to it. A Trust will not be required to register or cause
to be registered the transfer of Capital Securities after such Capital
Securities have been called for redemption.
Information Concerning the Institutional Trustee
The Institutional Trustee of each Trust, prior to the occurrence of a
default with respect to such Trust and after the curing of any defaults that may
have occurred, undertakes to perform only such duties as are specifically set
forth in the applicable Declaration and, after a default of which it has
knowledge, shall exercise the same degree of care as a prudent individual would
exercise in the conduct of his or her own affairs. Subject to such provisions,
the Institutional Trustee is under no obligation to exercise any of the powers
vested in it by the applicable Declaration at the request of any holder of
Capital Securities, unless offered reasonable indemnity by such holder against
the costs, expenses and liabilities which might be incurred thereby. The holders
of Capital Securities will not be required to offer such indemnity in the event
such holders, by exercising their voting rights, direct the Institutional
Trustee to take any action it is empowered to take under the applicable
Declaration following a Declaration Event of Default. The Institutional Trustee
also serves as trustee under the Guarantees and the Indentures.
Governing Law
The Declarations and the Capital Securities will be governed by, and
construed in accordance with, the laws of the State of Delaware.
Miscellaneous
The Regular Trustees are authorized and directed to operate each Trust in
such a way so that the Trust will not be required to register as an "investment
company" under the 1940 Act or characterized as other than a grantor trust for
United States federal income tax purposes. Citicorp intends to conduct its
affairs so that the Subordinated Debt Securities will be treated as indebtedness
of Citicorp for United States federal income tax purposes. In this connection,
Citicorp and the Regular Trustees may take any action, not inconsistent with
applicable law, the certificate of trust of each Trust, the Declarations or the
certificate of incorporation of Citicorp, that each of Citicorp and the Regular
Trustees determine in their discretion to be necessary or desirable to achieve
such end,
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as long as such action does not adversely affect the interests of the holders of
the Capital Securities or vary the terms thereof.
Holders of the Capital Securities have no preemptive rights.
Enforcement of Certain Rights by Holders of Trust Capital Securities
If an Event of Default under the Declaration of a Trust occurs and is
continuing, then the holders of Capital Securities of such Trust would rely on
the enforcement by the Institutional Trustee of its rights as a holder of the
applicable series of Subordinated Debt Securities against Citicorp. In addition,
the holders of a majority in liquidation amount of the Capital Securities of
such Trust will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Institutional Trustee
or to direct the exercise of any trust or power conferred upon the Institutional
Trustee under the applicable Declaration, including the right to direct the
Institutional Trustee to exercise the remedies available to it as a holder of
the Subordinated Debt Securities. If the Institutional Trustee fails to enforce
its rights under the applicable series of Subordinated Debt Securities, a holder
of Capital Securities of such Trust may institute a legal proceeding directly
against Citicorp to enforce the Institutional Trustee's rights under the
applicable series of Subordinated Debt Securities without first instituting any
legal proceeding against the Institutional Trustee or any other person or
entity. Notwithstanding the foregoing, if a Declaration Event of Default has
occurred and is continuing and such event is attributable to the failure of
Citicorp to pay interest or principal on the series of Subordinated Debt
Securities held by the relevant Trust on the date such interest or principal is
otherwise payable (or in the case of redemption, on the redemption date), then a
holder of Capital Securities of such Trust may institute a Direct Action for
enforcement of payment to such holder of the principal of or interest on the
applicable series of Subordinated Debt Securities having a principal amount
equal to the aggregate liquidation amount of the Capital Securities of such
holder on or after the respective due date specified in the applicable series of
Subordinated Debt Securities. In connection with such Direct Action, Citicorp
will be subrogated to the rights of such holder of Capital Securities under the
applicable Declaration to the extent of any payment made by Citicorp to such
holder of Capital Securities in such Direct Action.
DESCRIPTION OF THE GUARANTEES
Set forth below is a summary of information concerning the Guarantees
which will be executed and delivered by Citicorp for the benefit of the holders
from time to time of Capital Securities. One Guarantee will be executed for the
benefit of the holders of Capital Securities of each Trust. Each Guarantee will
be qualified as an indenture under the Trust Indenture Act. Wilmington Trust
Company will act as indenture trustee under each Guarantee for purposes of the
Trust Indenture Act (the "Guarantee Trustee"). The terms of each Guarantee will
be those set forth in such Guarantee and those made part of such Guarantee by
the Trust Indenture Act. The summary of the material terms of the Guarantees
applies equally to the Guarantee for each Trust, does not purport to be complete
and is subject in all respects to the provisions of, and is qualified in its
entirety by reference to, the form of Guarantee, which is filed as an exhibit to
the Registration Statement of which this Prospectus forms a part, and the Trust
Indenture Act. Each Guarantee will be held by the Guarantee Trustee for the
benefit of the holders of the Capital Securities of the applicable Trust.
General
Pursuant to each Guarantee, Citicorp will irrevocably and unconditionally
agree, to the extent set forth therein, to pay in full, to the holders of the
Capital Securities issued by a Trust, the
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Guarantee Payments (as defined below) (except to the extent paid by such Trust),
as and when due, regardless of any defense, right of set-off or counterclaim
which such Trust may have or assert. The following payments with respect to
Capital Securities issued by a Trust to the extent not paid by such Trust (the
"Guarantee Payments"), will be subject to the Guarantee thereon (without
duplication): (i) any accrued and unpaid distributions which are required to be
paid on such Capital Securities, to the extent such Trust shall have funds
available therefor; (ii) the Redemption Price, including all accrued and unpaid
distributions to the date of payment, to the extent such Trust has funds
available therefor with respect to any Capital Securities called for redemption
by such Trust and (iii) upon a voluntary or involuntary dissolution, winding-up
or termination of such Trust (other than in con nection with the distribution of
Subordinated Debt Securities to the holders of Capital Securities or the
redemption of all of the Capital Securities), the lesser of (a) the aggregate of
the liquidation amount and all accrued and unpaid distributions on such Capital
Securities to the date of payment, to the extent such Trust has funds available
therefor and (b) the amount of assets of such Trust remaining available for
distribution to holders of such Capital Securities in liquidation of such Trust.
The redemption price and liquidation amount will be fixed at the time the
Capital Securities are issued. Citicorp's obligation to make a Guarantee Payment
may be satisfied by direct payment of the required amounts by Citicorp to the
holders of Capital Securities or by causing the applicable Trust to pay such
amounts to such holders.
Each Guarantee will not apply to any payment of distributions except to
the extent the applicable Trust shall have funds available therefor. If Citicorp
does not make interest payments on the Subordinated Debt Securities purchased by
a Trust, such Trust will not pay distributions on the Capital Securities issued
by such Trust and will not have funds available therefor. See "Description of
the Subordinated Debt Securities -- Certain Covenants of Citicorp." The
Guarantees, when taken together with Citicorp's obligations under the
Subordinated Debt Securities, the Indentures and the Declarations, including its
obligations to pay costs, expenses, debts and liabilities of such Trust (other
than with respect to the Trust Securities), will provide a full and
unconditional guarantee on a subordinated basis by Citicorp of payments due on
the Capital Securities.
Citicorp has also agreed separately to irrevocably and unconditionally
guarantee the obligations of the Trusts with respect to the Common Securities
(the "Common Securities Guaran tees") to the same extent as the Guarantees,
except that upon an Event of Default under the Indenture, holders of Capital
Securities shall have priority over holders of Common Securities with respect to
distributions and payments on liquidation, redemption or otherwise.
Certain Covenants of Citicorp
In each Guarantee, Citicorp will covenant that, so long as any Capital
Securities issued by the applicable Trust remain outstanding, if there shall
have occurred any event that would constitute an event of default under such
Guarantee or the Declaration of such Trust, then (a) Citicorp shall not declare
or pay any dividend on, make any distributions with respect to, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of its
capital stock (other than (i) purchases or acquisitions of shares of Citicorp
Common Stock in connection with the satisfaction by Citicorp of its obligations
under any employee benefit plans or any other contractual obligations of
Citicorp (other than a contractual obligation ranking pari passu with or junior
in right of payment to the Subordinated Debt Securities issued to the related
Trust) entered into prior to the date of issuance of the Subordinated Debt
Securities, (ii) as a result of a reclassification of Citicorp capital stock or
the exchange or conversion of one class or series of Citicorp capital stock for
another class or series of Citicorp capital stock or (iii) the purchase of
fractional interests in shares of Citicorp capital stock
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pursuant to the conversion or exchange provisions of such Citicorp capital stock
or the security being converted or exchanged) and (b) Citicorp shall not make
any payment of interest, principal or premium, if any, on or repay, repurchase
or redeem any debt securities issued by Citicorp which rank pari passu with or
junior in right of payment to such Subordinated Debt Securities.
Modification of the Guarantees; Assignment
Except with respect to any changes which do not adversely affect the
rights of holders of Capital Securities (in which case no vote will be
required), each Guarantee may be amended only with the prior approval of the
holders of not less than a majority in liquidation amount of the outstanding
Capital Securities issued by the applicable Trust. All guarantees and agreements
contained in a Guarantee shall bind the successors, assigns, receivers, trustees
and representatives of the Company and shall inure to the benefit of the holders
of the Capital Securities of the applicable Trust then outstanding.
Termination
Each Guarantee will terminate as to the Capital Securities issued by the
applicable Trust (a) upon full payment of the Redemption Price of all Capital
Securities of such Trust, (b) upon distribu tion of the Subordinated Debt
Securities held by such Trust to the holders of the Capital Securities of such
Trust or (c) upon full payment of the amounts payable in accordance with the
Declaration of such Trust upon liquidation of such Trust. Each Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any holder of Capital Securities issued by the applicable Trust must
restore payment of any sums paid under such Capital Securities or such
Guarantee.
Events of Default
An event of default under a Guarantee will occur upon the failure of
Citicorp to perform any of its payment or other obligations thereunder.
The holders of a majority in liquidation amount of the Capital Securities
relating to such Guarantee have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Guarantee Trustee
in respect of the Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under such Guarantee. If the Guarantee
Trustee fails to enforce such Guarantee, any holder of Capital Securities
relating to such Guarantee may insti tute a legal proceeding directly against
Citicorp to enforce the Guarantee Trustee's rights under such Guarantee, without
first instituting a legal proceeding against the relevant Trust, the Guarantee
Trustee or any other person or entity. Notwithstanding the foregoing, if
Citicorp has failed to make a guarantee payment, a holder of Capital Securities
may directly institute a proceeding against Citicorp for enforcement of the
Guarantee for such payment. Citicorp waives any right or remedy to require that
any action be brought first against a Trust or any other person or entity before
proceeding directly against Citicorp.
Status of the Guarantees
The Guarantees will constitute unsecured obligations of Citicorp and will
rank (i) subordinate and junior in right of payment to all other liabilities of
Citicorp, (ii) pari passu with the most senior preferred or preference stock now
or hereafter issued by Citicorp and with any guarantee now or hereafter entered
into by Citicorp in respect of any preferred or preference stock of any
affiliate of
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Citicorp, and (iii) senior to Citicorp's common stock. The terms of the Capital
Securities provide that each holder of Capital Securities issued by the
applicable Trust by acceptance thereof agrees to the subordination provisions
and other terms of the Guarantee relating thereto.
The Guarantees will constitute a guarantee of payment and not of
collection (that is, the guaranteed party may institute a legal proceeding
directly against the guarantor to enforce its rights under the Guarantee without
instituting a legal proceeding against any other person or entity).
Information Concerning the Guarantee Trustee
The Guarantee Trustee, prior to the occurrence of a default with respect
to a Guarantee, un dertakes to perform only such duties as are specifically set
forth in such Guarantee and, after default, shall exercise the same degree of
care as a prudent individual would exercise in the conduct of his or her own
affairs. Subject to such provisions, the Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by a Guarantee at the
request of any holder of Capital Securities, unless offered reasonable indemnity
against the costs, expenses and liabilities which might be incurred there by.
Citicorp or its affiliates maintain certain accounts and other banking
relationships with the Guarantee Trustee and its affiliates.
Governing Law
The Guarantees will be governed by, and construed in accordance with, the
laws of the State of New York.
EFFECT OF OBLIGATIONS UNDER THE
SUBORDINATED DEBT SECURITIES AND THE GUARANTEES
As set forth in the Declaration, the sole purpose of each of the Trusts is
to issue the Trust Securities evidencing undivided beneficial interests in the
assets of each of the Trusts, and to hold one series of the Subordinated Debt
Securities.
As long as payments of interest and other payments are made when due on
the Subordinated Debt Securities issued to a Trust, such payments will be
sufficient to cover distributions and payments due on the Trust Securities of
such Trust because of the following factors: (i) the aggregate principal amount
of such Subordinated Debt Securities will be equal to the sum of the aggregate
stated liquida tion amount of such Trust Securities; (ii) the interest rate and
the interest and other payment dates on such Subordinated Debt Securities will
match the distribution rate and distribution and other payment dates for the
Trust Securities; (iii) Citicorp shall pay all, and the applicable Trust shall
not be obligated to pay, directly or indirectly, all costs, expenses, debt, and
obligations of the applicable Trust (other than with respect to the Trust
Securities); and (iv) the Declaration further provides that the Regular Trustees
shall, and shall not cause or permit the applicable Trust to, among other
things, engage in any activity that is not consistent with the purposes of the
applicable Trust.
Payments of distributions (to the extent funds therefor are available) and
other payments due on the Capital Securities (to the extent funds therefor are
available) are guaranteed by Citicorp as and
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to the extent set forth under "Description of the Guarantees." If Citicorp does
not make interest pay ments on the Subordinated Debt Securities held by the
applicable Trust, it is expected that the applicable Trust will not have
sufficient funds to pay distributions on its Capital Securities. The Guarantees
do not apply to any payment of distributions unless and until the applicable
Trust has sufficient funds for the payment of such distributions. The Guarantees
cover the payment of distributions and other payments on the Capital Securities
only if and to the extent that Citicorp has made a payment of interest or
principal on the Subordinated Debt Securities held by the applicable Trust as
its sole asset. The Guarantees, when taken together with Citicorp's obligations
under the Subordinated Debt Securities and the Indentures and its obligations
under the Declarations, including its obligations to pay costs, expenses, debts
and liabilities of the Trusts (other than with respect to the Trust Securities),
provide a full and unconditional guarantee on a subordinated basis by Citicorp
of amounts payable on the Capital Securities.
If Citicorp fails to make interest or other payments on any series of
Subordinated Debt Secu rities when due (taking account of any Extension Period),
or if any other Indenture Event of Default occurs, the Declarations provide a
mechanism whereby the holders of the Capital Securities of a Trust, using the
procedures described in "Description of the Capital Securities -- Book-Entry
Only Issuance -- The Depository Trust Company" and "-- Voting Rights", may
direct the Institutional Trustee to enforce its rights under the Subordinated
Debt Securities held by such Trust. If the Institutional Trustee fails to
enforce its rights under the Subordinated Debt Securities, a holder of Capital
Securities of such Trust may institute a legal proceeding against Citicorp to
enforce the Institutional Trustee's rights under the Subordinated Debt
Securities without first instituting any legal proceeding against the
Institutional Trustee or any other person or entity. Notwithstanding the
foregoing, if a Declaration Event of Default has occurred and is continuing and
such event is attrib utable to the failure of Citicorp to pay interest or
principal on Subordinated Debt Securities on the date such interest or principal
is otherwise payable (or in the case of redemption on the redemption date), then
a holder of Capital Securities of a Trust holding such Subordinated Debt
Securities may institute a Direct Action for payment on or after the respective
due date specified in such Subordinat ed Debt Securities. In connection with
such Direct Action, Citicorp will be subrogated to the rights of such holder of
Capital Securities under the Declaration to the extent of any payment made by
Citicorp to such holder of Capital Securities in such Direct Action. Citicorp,
under each Guarantee, acknowledges that the Guarantee Trustee shall enforce each
Guarantee on behalf of the holders of the Capital Securities. If Citicorp fails
to make payments under a Guarantee, the Guarantee provides a mechanism whereby
the holders of the related Capital Securities may direct the Guarantee Trustee
to enforce its rights thereunder. Any holder of Capital Securities may institute
a legal proceeding directly against Citicorp to enforce the Guarantee Trustee's
rights under the applicable Guarantee without first instituting a legal
proceeding against the applicable Trust, the Guarantee Trustee, or any other
person or entity.
DESCRIPTION OF THE PREFERRED STOCK AND DEPOSITARY SHARES
PREFERRED STOCK
The following description of the particular terms of the shares of each
Series of Preferred Stock subject to the Offers supplements the description of
the general terms and provisions of such Preferred Stock set forth below under
"--General Terms and Provisions," to which description reference is hereby made.
Series 16 Preferred Stock
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The Series 16 Preferred Stock is a single series consisting of 1,300,000
shares. The holders of Series 16 Preferred Stock have no preemptive rights.
The Series 16 Preferred Stock ranks on a parity as to payment of dividends
(except with respect to the cumulation thereof) and distribution of assets upon
dissolution, liquidation or winding up of Citicorp with each other outstanding
series of preferred stock issued by Citicorp. The Series 16 Preferred Stock,
together with each other series of preferred stock, ranks prior to the Common
Stock of Citicorp as to the payment of dividends and distribution of assets upon
dissolution, liquidation or winding up of Citicorp.
The Series 16 Preferred Stock is not convertible into shares of Common
Stock of Citicorp and is not subject to any sinking fund or other obligation of
Citicorp to repurchase the Series 16 Preferred Stock.
Dividends
Holders of shares of Series 16 Preferred Stock are entitled to receive,
as, if and when declared by the Board of Directors of Citicorp out of assets of
Citicorp legally available for payment, noncumulative cash dividends at the
annual rate of $20.00 per share (equivalent to $2.00 per Depositary Share).
Dividends on the Series 16 Preferred Stock are payable quarterly, as, if and
when declared by the Board of Directors of Citicorp, on February 15, May 15,
August 15, and November 15 of each year at such annual rate.
The right of the holders of the Series 16 Preferred Stock to receive
dividends is noncumulative. Accordingly, if the Board of Directors of Citicorp
fails to declare a dividend on the Series 16 Preferred Stock for any dividend
period, Citicorp will have no obligation to pay a dividend for such period,
whether or not dividends on the Series 16 Preferred Stock are declared for any
future dividend period.
Redemption
The Series 16 Preferred Stock is not subject to any mandatory redemption,
sinking fund or other similar provisions. Prior to June 1, 1998, the Series 16
Preferred Stock is not redeemable, except under certain limited circumstances as
described below under "--- General Terms and Provisions -- Redemption." On or
after such date, shares of Series 16 Preferred Stock will be redeemable, in
whole or in part, at the option of Citicorp, at any time and from time to time,
upon not less than thirty nor more than sixty days' notice, at $250 per share of
Series 16 Preferred Stock (equivalent to $25 per Depositary Share), plus accrued
and unpaid dividends (whether or not declared) from the immediately preceding
dividend payment date to the date fixed for redemption.
Holders of Series 16 Preferred Stock will have no right to require
redemption of the Series 16 Preferred Stock.
Series 17 Preferred Stock
The Series 17 Preferred Stock is a single series consisting of 1,400,000
shares. The holders of Series 17 Preferred Stock have no preemptive rights.
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The Series 17 Preferred Stock ranks on a parity as to payment of dividends
(except with respect to the cumulation thereof) and distribution of assets upon
dissolution, liquidation or winding up of Citicorp with each other outstanding
series of preferred stock issued by Citicorp. The Series 17 Preferred Stock,
together with each other series of preferred stock, ranks prior to the Common
Stock of Citicorp as to the payment of dividends and distribution of assets upon
dissolution, liquidation or winding up of Citicorp.
The Series 17 Preferred Stock is not convertible into shares of Common
Stock of Citicorp and is not subject to any sinking fund or other obligation of
Citicorp to repurchase the Series 17 Preferred Stock.
Dividends
Holders of shares of Series 17 Preferred Stock are entitled to receive,
as, if and when declared by the Board of Directors of Citicorp or the Stock
Committee thereof out of assets of Citicorp legally available for payment,
noncumulative cash dividends at the annual rate of $18.75 per share (equivalent
to $1.875 per Depositary Share). Dividends on the Series 17 Preferred Stock are
payable quarterly, as, if and when declared by the Board of Directors of
Citicorp, on February 15, May 15, August 15, and November 15 of each year at
such annual rate.
The right of the holders of the Series 17 Preferred Stock to receive
dividends is noncumulative. Accordingly, if the Board of Directors of Citicorp
fails to declare a dividend on the Series 17 Preferred Stock for any dividend
period, Citicorp will have no obligation to pay a dividend for such period,
whether or not dividends on the Series 17 Preferred Stock are declared for any
future dividend period.
Redemption
The Series 17 Preferred Stock is not subject to any mandatory redemption,
sinking fund or other similar provisions. Prior to September 1, 1998, the Series
17 Preferred Stock is not redeemable, except under certain limited circumstances
as described below under "--- General Terms and Provisions ---Redemption". On or
after such date, shares of Series 17 Preferred Stock will be redeemable, in
whole or in part, at the option of Citicorp, at any time and from time to time,
upon not less than thirty nor more than sixty days' notice, at $250 per share of
Series 17 Preferred Stock (equivalent to $25 per Depositary Share), plus accrued
and unpaid dividends (whether or not declared) from the immediately preceding
dividend payment date to the date fixed for redemption.
Holders of Series 17 Preferred Stock will have no right to require
redemption of the Series 17 Preferred Stock.
Series 20 Preferred Stock
The Series 20 Preferred Stock is a single series consisting of 500,000
shares. The holders of Series 20 Preferred Stock have no preemptive rights.
The Series 20 Preferred Stock ranks on a parity as to payment of dividends
(except with respect to the cumulation thereof) and distribution of assets upon
dissolution, liquidation or winding up of Citicorp with each other outstanding
series of preferred stock issued by Citicorp. The Series
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20 Preferred Stock, together with each other series of preferred stock, ranks
prior to the Common Stock of Citicorp as to the payment of dividends and
distribution of assets upon dissolution, liquidation or winding up of Citicorp.
The Series 20 Preferred Stock is not convertible into shares of Common
Stock of Citicorp and is not subject to any sinking fund or other obligation of
Citicorp to repurchase the Series 20 Preferred Stock.
Dividends
Holders of shares of Series 20 Preferred Stock are entitled to receive as,
if and when declared by the Board of Directors of Citicorp or the Stock
Committee thereof out of assets of Citicorp legally available for payment,
noncumulative cash dividends at the annual rate of $20.75 per share (equivalent
to $2.075 per Depositary Share). Dividends on the Series 20 Preferred Stock are
payable quarterly, as, if and when declared by the Board of Directors of
Citicorp or the Stock Committee thereof on February 15, May 15, August 15 and
November 15 of each year at such annual rate.
The right of the holders of the Series 20 Preferred Stock to receive
dividends is noncumulative. Accordingly, if the Board of Directors or Stock
Committee of Citicorp fails to declare a dividend on the Series 20 Preferred
Stock for any dividend period, Citicorp will have no obligation to pay a
dividend for such period, whether or not dividends on the Series 20 Preferred
Stock are declared for any future dividend period.
Redemption
The Series 20 Preferred Stock is not subject to any mandatory redemption,
sinking fund or other similar provisions. Prior to November 15, 1999, the Series
20 Preferred Stock is not redeemable, except under certain limited circumstances
as described below under "-- General Terms and Provisions -- Redemption". On or
after such date, shares of Series 20 Preferred Stock will be redeemable, in
whole or in part, at the option of Citicorp, at any time and from time to time,
upon not less than thirty nor more than sixty days' notice, at $250 per share of
Series 20 Preferred Stock (equivalent to $25 per Depositary Share), plus accrued
and unpaid dividends (whether or not declared) from the immediately preceding
dividend payment date to the date fixed for redemption.
Holders of Series 20 Preferred Stock will have no right to require
redemption of the Series 20 Preferred Stock.
Series 21 Preferred Stock
The Series 21 Preferred Stock is a single series consisting of 600,000
shares. The holders of Series 21 Preferred Stock have no preemptive rights.
The Series 21 Preferred Stock ranks on a parity as to payment of dividends
(except with respect to the cumulation thereof) and distribution of assets upon
dissolution, liquidation or winding up of Citicorp with each other outstanding
series of preferred stock issued by Citicorp. The Series 21 Preferred Stock,
together with each other series of preferred stock, ranks prior to the Common
Stock of Citicorp as the payment of dividends and distribution of assets upon
dissolution, liquidation or winding up of Citicorp.
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The Series 21 Preferred Stock is not convertible into shares of Common
Stock of Citicorp and is not subject to any sinking fund or other obligation of
Citicorp to repurchase the Series 21 Preferred Stock.
Dividends
Holders of shares of Series 21 Preferred Stock are entitled to receive,
as, if and when declared by the Board of Directors of Citicorp or the Stock
Committee thereof out of assets of Citicorp legally available for payment,
noncumulative cash dividends at the annual rate of $21.25 per share (equivalent
to $2.125 per Depositary Share). Dividends on the Series 21 Preferred Stock are
payable quarterly, as, if and when declared by the Board of Directors of
Citicorp, on February 15, May 15, August 15, and November 15 of each year at
such annual rate.
The right of the holders of the Series 21 Preferred Stock to receive
dividends is noncumulative. Accordingly, if the Board of Directors or the Stock
Committee of Citicorp fails to declare a dividend on the Series 21 Preferred
Stock for any dividend period, Citicorp will have no obligation to pay a
dividend for such period, whether or not dividends on the Series 21 Preferred
Stock are declared for any future dividend period.
Redemption
The Series 21 Preferred Stock is not subject to any mandatory redemption,
sinking fund or other similar provisions. Prior to February 15, 2000, the Series
21 Preferred Stock is not redeemable, except under certain limited circumstances
as described below under "--- General Terms and Provisions -- Redemption." On or
after such date, shares of Series 21 Preferred Stock will be redeemable, in
whole or in part, at the option of Citicorp, at any time and from time to time,
upon not less than thirty nor more than sixty days' notice, at $250 per share of
Series 21 Preferred Stock (equivalent to $25 per Depositary Share), plus accrued
and unpaid dividends (whether or not declared) from the immediately preceding
dividend payment date to the date fixed for redemption.
Holders of Series 21 Preferred Stock will have no right to require
redemption of the Series 21 Preferred Stock.
Series 22 Preferred Stock
The Series 22 Preferred Stock is a single series consisting of 500,000
shares. The holders of Series 22 Preferred Stock have no preemptive rights.
The Series 22 Preferred Stock ranks on a parity as to payment of dividends
and distribution of assets upon dissolution, liquidation or winding up of
Citicorp with each other outstanding series of preferred stock issued by
Citicorp. The Series 22 Preferred Stock, together with each other series of
preferred stock, ranks prior to the Common Stock of Citicorp as the payment of
dividends and distribution of assets upon dissolution, liquidation or winding up
of Citicorp.
The Series 22 Preferred Stock is not convertible into shares of Common
Stock of Citicorp and is not subject to any sinking fund or other obligation of
Citicorp to repurchase the Series 22 Preferred Stock.
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Dividends
Holders of shares of Series 22 Preferred Stock are entitled to receive,
as, if and when declared by the Board of Directors of Citicorp or the Stock
Committee out of assets of Citicorp legally available for payment, cumulative
cash dividends at the annual rate of $19.375 per share (equivalent to $1.9375
per Depositary Share). Dividends on the Series 22 Preferred Stock are payable
quarterly, as, if and when declared by the Board of Directors of Citicorp or the
Stock Committee thereof on February 15, May 15, August 15, and November 15 of
each year at such annual rate. The right of the holders of the Series 22
Preferred Stock to receive dividends is cumulative.
Redemption
The Series 22 Preferred Stock is not subject to any mandatory redemption,
sinking fund or other similar provisions. Prior to May 15, 2000 the Series 22
Preferred Stock is not redeemable, except under certain limited circumstances as
described below under "--- General Terms and Provisions -- Redemption". On or
after such date, shares of Series 22 Preferred Stock will be redeemable, in
whole or in part, at the option of Citicorp, at any time and from time to time,
upon not less than thirty nor more than sixty days' notice, at $250 per share of
Series 22 Preferred Stock (equivalent to $25 per Depositary Share), plus accrued
and unpaid dividends (whether or not declared) to the date fixed for redemption.
Holders of Series 22 Preferred Stock will have no right to require
redemption of the Series 22 Preferred Stock.
General Terms and Provisions
The following description of the terms of the Preferred Stock sets forth
certain general terms and provisions of the Preferred Stock of the Series
described above.
Under existing interpretations of the Federal Reserve Board and the Office
of Thrift Supervision, if the holders of the Preferred Stock become entitled to
vote for the election of directors because dividends on the Preferred Stock are
in arrears as described under "Voting Rights" below, the preferred stock of
Citicorp entitled to vote as a class for the election of directors (the "Voting
Preferred Stock") may then be deemed a "class of voting securities" and a holder
of 25% or more of the Voting Preferred Stock (or a holder of 5% or more of the
Voting Preferred Stock that otherwise exercises a "controlling influence" over
Citicorp) may then be subject to regulation as a "bank holding company" in
accordance with the Bank Holding Company Act of 1956, as amended, and a holder
of 25% or more of the Voting Preferred Stock (or a holder of 10% or more of the
Voting Preferred Stock that otherwise possesses certain "control factors" with
respect to Citicorp) may then be subject to regulation as a "savings and loan
holding company" in accordance with the Home Owners' Loan Act of 1933, as
amended. In addition, at such time, (i) any bank holding company or foreign bank
which is treated as a bank holding company would be required to obtain the
approval of the Federal Reserve Board under the Bank Holding Company Act of
1956, as amended, to acquire or retain 5% or more of the Voting Preferred Stock;
(ii) any person other than a bank holding company may be required to obtain the
approval of the Federal Reserve Board and the Office of Thrift Supervision under
the Change in Bank Control Act to acquire or retain 10% or more of the Voting
Preferred Stock; and (iii) any savings and loan holding company generally could
not retain in excess of 5% of the Voting Preferred Stock.
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Dividends
Holders of a Series of shares of the Preferred Stock are entitled to
receive, as, if and when declared by the Board of Directors or the Stock
Committee out of assets of Citicorp legally available for payment, cash
dividends at the applicable rate for such Series. Dividends on the Preferred
Stock may be cumulative ("Cumulative Preferred Stock") or noncumulative
("Noncumulative Preferred Stock"). Dividends on the Cumulative Preferred Stock
will be cumulative from the date of original issue of such series and will be
payable quarterly in arrears on the dates specified for such Series. If any date
so specified as a dividend payment date is not a business day, dividends (if
declared) on the Preferred Stock (unless otherwise provided in the Prospectus
Supplement) will be paid on the immediately succeeding business day, without
interest. A dividend period with respect to a dividend payment date is the
period commencing on the immediately preceding dividend payment date and ending
on the day immediately prior to the next succeeding dividend payment date. If
the Board of Directors or the Stock Committee fails to declare or pay a dividend
on any series of Noncumulative Preferred Stock for any dividend period, Citicorp
shall have no obligation to pay a dividend for such period, whether or not
dividends on such series of Noncumulative Preferred Stock are declared for any
future dividend period. Dividends on the Preferred Stock will be payable in
arrears to holders of record as they appear on the stock register of Citicorp on
such record dates, not more than thirty nor less than fifteen days preceding the
payment dates thereof, as shall be fixed by the Board of Directors or the Stock
Committee. No full dividends will be declared or paid or set apart for payment
on the preferred stock of any series ranking, as to dividends, on a parity with
or junior to any other series of Preferred Stock for any period unless full
dividends have been or are contemporaneously declared and paid or declared and a
sum sufficient for the payment thereof set apart for such payment on such series
of Preferred Stock for (i) all dividend periods terminating on or prior to the
date of payment of such full cumulative dividends (in the case of a series of
Cumulative Preferred Stock) or (ii) the immediately preceding dividend period
(in the case of a series of Noncumulative Preferred Stock). When dividends are
not paid in full upon such series of Preferred Stock (whether Cumulative
Preferred Stock or Noncumulative Preferred Stock), and any other preferred stock
ranking on a parity as to dividends with such series of Preferred Stock, all
dividends declared upon shares of such series of Preferred Stock and any other
preferred stock ranking on a parity as to dividends will be declared pro rata so
that the amount of dividends declared per share on such series of Preferred
Stock and such other preferred stock will in all cases bear to each other the
same ratio that accrued dividends per share (which, in the case of Noncumulative
Preferred Stock, shall not include any cumulation in respect of unpaid dividends
for prior dividend periods) on the shares of such series of Preferred Stock and
such other preferred stock bear to each other. Except as provided in the
preceding sentence, unless full dividends on all outstanding shares of any such
series of Preferred Stock have been declared and paid or set apart for payment
for all past dividend periods, in the case of a series of Cumulative Preferred
Stock, or for the immediately preceding dividend period, in the case of a series
of Noncumulative Preferred Stock, and Citicorp is not in default with respect to
any redemption of shares of Preferred Stock announced by Citicorp as described
under "--Redemption" below, no dividends (other than dividends or distributions
paid in shares of, or options, warrants or rights to subscribe for or purchase
shares of, the Common Stock of Citicorp or another stock of Citicorp ranking
junior to the Preferred Stock as to dividends and upon liquidation) will be
declared or paid or set aside for payment or other distribution declared or made
upon the Common Stock of Citicorp or upon any other stock of Citicorp ranking
junior to or on parity with the Preferred Stock as to dividends or upon
liquidation, nor will any Common Stock of Citicorp nor any other stock of
Citicorp ranking junior to or on parity with such Preferred Stock as to
dividends or upon liquidation be redeemed, purchased or otherwise acquired for
any consideration (or any moneys be paid to or
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made available for a sinking fund for the redemption of any shares of any such
stock) by Citicorp (except by conversion into or exchange for stock of Citicorp
ranking junior to the Preferred Stock as to dividends and upon liquidation). The
amount of dividends payable for any period shorter than a full dividend period
shall be computed on the basis of twelve 30-day months, a 360-day year and, for
any period of less than one month (other than the initial period), the actual
number of days elapsed in such period.
Liquidation Preference
Upon any liquidation, dissolution or winding up of Citicorp, whether
voluntary or involuntary, the holders of the Preferred Stock will have
preference and priority over the Common Stock of Citicorp, or any other class of
stock of Citicorp ranking on liquidation, dissolution or winding up junior to
the Preferred Stock, for payments out of or distribution of the assets of
Citicorp or proceeds thereof, whether from capital or surplus, of the amount per
share equal to $250 plus all dividends (whether or not earned or declared),
accrued and unpaid thereon to the date of final distribution to such holders
(but in the case of Noncumulative Preferred Stock, without cumulation of unpaid
dividends for prior dividend periods), and after such payment the holders of
Preferred Stock will be entitled to no other payments. If, in the case of any
such liquidation, dissolution or winding up of Citicorp, the assets of Citicorp
or proceeds thereof should be insufficient to make the full liquidation payment
in the amount per share set forth above, plus all accrued and unpaid dividends
on the Preferred Stock (but in the case of Noncumulative Preferred Stock without
cumulation of unpaid dividends for prior dividend periods) and liquidating
payments on any other preferred stock ranking as to liquidation, dissolution or
winding up on a parity with the Preferred Stock, then such assets or proceeds
thereof will be distributed among the holders of the Preferred Stock and any
such other preferred stock ratably in accordance with the respective amounts
which would be payable on such shares of Preferred Stock and any such other
preferred stock if all amounts thereon were paid in full. A consolidation or
merger of Citicorp with one or more corporations will not be deemed to be a
liquidation, dissolution or winding up, voluntary or involuntary, of Citicorp.
Redemption
Citicorp may, at its option, at any time or from time to time on not less
than 30 and not more than 60 days' notice, redeem one or more Series of
Preferred Stock in whole or part at the redemption prices and on the dates set
forth above for the related Series of Preferred Stock.
If less than all outstanding shares of a Series of Preferred Stock are to
be redeemed, the selection of the shares to be redeemed shall be determined by
lot or pro rata as may be determined by the Board of Directors or the Stock
Committee or by any other method which may be determined by the Board of
Directors or the Stock Committee to be equitable. From and after the redemption
date (unless default shall be made by Citicorp in providing money for the
payment of the redemption price, together with accrued and unpaid dividends
thereon (but in the case of Noncumulative Preferred Stock without cumulation of
unpaid dividends for prior dividend periods) to the date fixed for redemption),
dividends shall cease to accrue on the shares of such series of Preferred Stock
called for redemption, such shares shall no longer be deemed to be outstanding
and all rights of the holders thereof (except the right to receive the
redemption price) shall cease.
In addition, Citicorp, at its option, may, with prior Federal Reserve
Board approval to the extent then required by applicable law, redeem all, but
not less than all, of the outstanding shares of the Preferred Stock, out of
funds legally available therefor, if the holders of such shares would be
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entitled to vote upon or consent to a merger or consolidation of Citicorp under
the circumstances described under "--Voting Rights" below and all of the
following conditions have been satisfied: (i) Citicorp shall have requested the
vote or consent of the holders of such shares to the consummation of such merger
or consolidation, stating in such request that failing the requisite favorable
vote or consent Citicorp will have the option to redeem such shares, (ii)
Citicorp shall have not received the favorable vote or consent requisite to the
consummation of the transaction within 60 days after making such request and
(iii) such transaction shall be consummated on the date fixed for such
redemption, which date shall be no more than one year after such request is
made. Any such redemption shall be on notice as aforesaid at a redemption price
per share of the Preferred Stock set forth above, plus accrued and unpaid
dividends thereon (but in the case of Noncumulative Preferred Stock without
cumulation of unpaid dividends for prior dividend periods) to the date fixed for
redemption.
Voting Rights
Holders of the Preferred Stock will have no voting rights except as set
forth below or as otherwise from time to time required by law.
Whenever dividends on the Preferred Stock shall be in arrears for such
number of dividend periods, whether or not consecutive, which shall in the
aggregate contain not less than 540 days, the holders of outstanding shares of
the Preferred Stock (voting separately as a class with holders of shares of any
one or more other series of preferred stock ranking on a parity with the
Preferred Stock either as to dividends or the distribution of assets upon
liquidation, dissolution or winding up and upon which like voting rights have
been conferred and are exercisable) will be entitled to vote for the election of
two additional directors on the terms set forth below. Such voting rights will
continue, in the case of any series of Cumulative Preferred Stock, until all
past dividends accumulated on shares of Cumulative Preferred Stock shall have
been paid in full and, in the case of any series of Noncumulative Preferred
Stock, until all dividends on shares of Noncumulative Preferred Stock shall have
been paid in full for at least one year. Upon payment in full of such dividends
such voting rights shall terminate except as expressly provided by law, subject
to re-vesting in the event of each and every subsequent default in the payment
of dividends as aforesaid. Holders of all series of preferred stock which are
granted such voting rights (which rank on a parity with the Preferred Stock)
will vote as a class, and each holder of shares of the Preferred Stock will have
one vote for each share of stock held and each other series will have such
number of votes, if any, for each share of stock held as may be granted to them.
In the event the holders of shares of the Preferred Stock are entitled to vote
as described in this paragraph, the Board of Directors will automatically be
increased by two directors, and the holders of such preferred stock will have
the exclusive right as members of such class, as outlined above, to elect two
directors at the next annual meeting of stockholders.
Upon termination of the right of the holders of the Preferred Stock to
vote for directors as discussed in the prior paragraph, the term of office of
all directors then in office elected by such holders will terminate immediately.
Whenever the term of office of the directors elected by such holders ends and
the related special voting rights expire, the number of directors will
automatically be decreased to such number as would otherwise prevail.
So long as any shares of Preferred Stock remain outstanding, Citicorp will
not, without the affirmative vote or consent of the holders of at least
two-thirds of the shares of the Preferred Stock outstanding at the time (voting
as a class with all other series of preferred stock ranking on a parity with the
Preferred Stock either as to dividends or the distribution of assets upon
liquidation,
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dissolution or winding up and upon which like voting rights have been conferred
and are then exercisable), given in person or by proxy, either in writing or at
a meeting, (i) authorize, create or issue, or increase the authorized or issued
amount, of any class or series of stock ranking prior to the Preferred Stock
with respect to payment of dividends or the distribution of assets upon
liquidation, dissolution or winding up; or (ii) amend, alter or repeal, whether
by merger, consolidation or otherwise, the provisions of Citicorp's Restated
Certificate of Incorporation, as amended, or of the resolutions contained in the
Certificates of Designations of the Preferred Stock designating such Preferred
Stock and the powers, preferences and privileges, relative, participating,
optional or other special rights and qualifications, limitations and
restrictions thereof, so as to materially and adversely affect any right,
preference, privilege or voting power of the Preferred Stock or the holders
thereof; provided, however, that any increase in the amount of the authorized
preferred stock or the creation and issuance of other series of preferred stock,
or any increase in the amount of authorized shares of preferred stock, in each
case ranking on a parity with or junior to the Preferred Stock with respect to
the payment of dividends and the distribution of assets upon liquidation,
dissolution or winding up will not be deemed to materially and adversely affect
such rights, preferences, privileges or voting powers.
The foregoing voting provisions will not apply if all outstanding shares
of Preferred Stock have been redeemed or sufficient funds have been deposited in
trust to effect such a redemption which is scheduled to be consummated within
three months after the time that such rights would otherwise be exercisable.
DEPOSITARY SHARES
General
Depositary Shares represent fractional shares of Preferred Stock, rather
than full shares of Preferred Stock. Citicorp has issued receipts ("Depositary
Receipts") for Depositary Shares, each of which represent a fraction (i.e.,
one-tenth) of a share of a particular series of Preferred Stock as described
below.
The shares of each Series of Preferred Stock represented by Depositary
Shares were deposited under a Deposit Agreement (the "Deposit Agreement") among
Citicorp, Citibank, as depositary (the "Preferred Depositary") and the holders
from time to time of the Depositary Receipts. Subject to the terms of the
Deposit Agreement, each owner of a Depositary Share is entitled, in proportion
to the applicable fraction of a share of Preferred Stock represented by such
Depositary Share, to all the rights and preferences of the Preferred Stock
represented thereby (including dividend, voting, redemption and liquidation
rights).
The Depositary Shares are listed on the NYSE.
Dividends and Other Distributions
The Preferred Depositary distributes all cash dividends or other cash
distributions received in respect of the related Series of Preferred Stock to
the record holders of Depositary Shares relating to such Series of Preferred
Stock in proportion to the number of such Depositary Shares owned by such
holders.
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In the event of a distribution other than in cash, the Preferred
Depositary will distribute property received by it to the record holders of
Depositary Shares entitled thereto, unless the Preferred Depositary determines
that it is not feasible to make such distribution, in which case the Preferred
Depositary may, with the approval of Citicorp, sell such property and distribute
the net proceeds from such sale to such holders.
Redemption of Depositary Shares
If Citicorp redeems a Series of Preferred Stock represented by Depositary
Shares, the Depositary Shares will be redeemed from the proceeds received by the
Preferred Depositary resulting from the redemption, in whole or in part, of such
Series of Preferred Stock held by the Preferred Depositary. The redemption price
per Depositary Share will be equal to one-tenth of the redemption price per
share payable with respect to such Series of the Preferred Stock. Whenever
Citicorp redeems shares of Preferred Stock held by the Preferred Depositary, the
Preferred Depositary will redeem as of the same redemption date the number of
Depositary Shares representing shares of the related Series of Preferred Stock
so redeemed. If less than all the Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed will be selected by lot or pro rata as may be
determined by the Preferred Depositary.
Voting the Preferred Stock
Upon receipt of notice of any meeting at which the holders of the
Preferred Stock are entitled to vote, the Preferred Depositary will mail the
information contained in such notice of meeting to the record holders of the
Depositary Shares relating to such Preferred Stock. Each record holder of such
Depositary Shares on the record date (which will be the same date as the record
date for the Preferred Stock) will be entitled to instruct the Preferred
Depositary as to the exercise of the voting rights pertaining to the amount of
the series of Preferred Stock represented by such holder's Depositary Shares.
The Preferred Depositary will endeavor, insofar as practicable, to vote the
amount of the Preferred Stock represented by such Depositary Shares in
accordance with such instructions, and Citicorp will agree to take all action
which may be deemed necessary by the Preferred Depositary in order to enable the
Preferred Depositary to do so. The Preferred Depositary will abstain from voting
shares of the Preferred Stock to the extent it does not receive specific
instructions from the holders of Depositary Shares representing such Preferred
Stock.
Amendment and Termination of the Deposit Agreement
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the related Deposit Agreement may at any time be amended by
agreement between Citicorp and the Preferred Depositary. However, any amendment
which materially and adversely alters the rights of the holders of Depositary
Receipts for a related Series of Preferred Stock will not be effective unless
such amendment has been approved by the holders of Depositary Receipts
representing at least a majority (or, in the case of amendments relating to or
affecting rights to receive dividends or distributions or voting or redemption
rights, two-thirds) of such Depositary Shares then outstanding. Each Deposit
Agreement may be terminated by Citicorp or the Preferred Depositary only if (i)
all Depositary Shares outstanding thereunder have been redeemed, (ii) there has
been a final distribution in respect of the related Series of Preferred Stock in
connection with any liquidation, dissolution or winding up of Citicorp and such
distribution has been distributed to the holders of the related Depositary
Receipts or (iii) upon the consent of holders of Depositary Receipts
representing not less than two-thirds of the related Depositary Shares
outstanding.
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Charges of Depositary
Citicorp is required to pay all transfer and other taxes and governmental
charges arising solely from the existence of the depositary arrangements.
Citicorp has paid the charges of the Preferred Depositary in connection with the
initial deposit of each related Series of Preferred Stock and will pay such
charges in the event of any redemption of such Preferred Stock. Holders of
Depositary Receipts will pay transfer and other taxes and governmental charges
and such other charges as are expressly provided in the applicable Deposit
Agreement to be for their accounts.
The Preferred Depositary may refuse to effect any transfer of a Depositary
Receipt or any withdrawal of shares of a Series of Preferred Stock evidenced
thereby until all such taxes and charges with respect to such Depositary Receipt
or such Shares of Preferred Stock are paid by the holder thereof.
Communications
The Preferred Depositary will forward all reports and communications from
Citicorp which are delivered to the Preferred Depositary and which Citicorp is
required to furnish to the holders of the Preferred Stock.
UNITED STATES FEDERAL INCOME TAXATION
General
In the opinion of E. Noel Harwerth, Esq., Chief Tax Officer of Citibank,
N.A., the following discussion describes the material United States federal
income tax consequences applicable to holders of the Capital Securities. This
discussion deals only with Capital Securities held as capital assets by initial
holders and does not deal with special classes of holders, such as dealers in
securities or currencies, life insurance companies, tax-exempt organizations,
persons holding the Capital Securities as a hedge or hedged against currency
risks or as part of a straddle or conversion transaction or persons whose
functional currency is not the U.S. dollar. This discussion is based on the
Internal Revenue Code of 1986, as amended (the "Code"), Treasury regulations
thereunder, published rulings and court decisions, as currently in effect, all
of which are subject to change, possibly with retroactive effect.
Persons considering the purchase of Capital Securities should consult
their own tax advisors concerning the application of the United States federal
income tax laws to their particular situations, as well as the application of
state or local laws or the laws of any other taxing jurisdiction.
United States Holders
As used herein, "United States Holder" means a beneficial holder of
Capital Securities who or which is (i) a citizen or resident of the United
States, (ii) a corporation created or organized under the laws of the United
States or any political subdivision thereof (including the District of
Columbia), or (iii) a person otherwise subject to United States federal income
taxation on a net income basis in respect of Capital Securities.
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Exchange of Depositary Shares for Capital Securities
The exchange of Depositary Shares for Capital Securities pursuant to an
Offer (the "Exchange") will be a taxable transaction. In the case of a United
States Holder who does not own shares of any class of Citicorp stock following
the Exchange, either directly or by attribution, gain or loss will be recognized
in an amount equal to the difference between the issue price (as defined below)
of the Capital Securities (representing an undivided interest in the
Subordinated Debt Securities) received in the Exchange and the exchanging
holder's tax basis in the Depositary Shares exchanged therefor. Generally, such
gain or loss will be long-term capital gain or loss if the United States
Holder's holding period for the Depositary Shares is more than one year as of
the date of the Exchange. A United States Holder's aggregate tax basis in his or
her pro rata share of the underlying Subordinated Debt Securities will be equal
to the issue price of the Capital Securities received on the Expiration Date.
The issue price of the Capital Securities will generally be equal to their
fair market value, determined as of the Expiration Date. It is possible that, in
certain circumstances, the issue price of the Capital Securities may exceed
their principal amount, in which case a United States Holder generally may elect
to amortize such premium over the term of the Capital Securities. Because the
fair market value of the Capital Securities will not be known until the
Expiration Date, it is not possible, as of the date of this Prospectus, to
determine whether any such premium will exist as of the Expiration Date.
United States Holders of Depositary Shares who will actually or
constructively own shares of any class of Citicorp stock following the exchange
are advised to consult their tax advisors concerning the possibility that
receipt of the Capital Securities will be treated as a dividend, which will be
taxable as ordinary income to the United States Holder in an amount equal to the
value of the Capital Securities received (rather than capital gain or loss in an
amount equal to the difference between the issue price of the Capital Securities
and the United States Holder's basis in his or her Depositary Shares). In
addition, United States Holders of Depositary Shares who are not initial Holders
are urged to consult their tax advisors as to the income tax consequences, in
their particular situation, of exchanging Depositary Shares.
Classification of the Subordinated Debt Securities
Assuming full compliance with the terms of the Indenture and the
Declaration, the Subordinated Debt Securities will be classified for United
States federal income tax purposes as indebtedness of Citicorp.
Classification of the Trust
Assuming full compliance with the terms of the Indenture and the
Declaration, the Trust will be classified for United States federal income tax
purposes as a grantor trust and not as an association taxable as a corporation.
Accordingly, for United States federal income tax purposes, each holder of
Capital Securities generally will be considered the owner of an undivided
interest in the Subordinated Debt Securities, and each holder will be required
to include in its gross income interest and original issue discount ("OID"), if
any, accrued with respect to its allocable share of the Subordinated Debt
Securities.
Interest and Original Issue Discount
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United States Holders (including cash basis United States Holders) of debt
instruments issued with OID must generally include such OID in income as it
accrues on a constant yield basis, generally before the receipt of cash
attributable to such income. A debt instrument will generally be treated as
issued with OID if the excess of the instrument's "stated redemption price at
maturity" over its issue price is more than a specified de minimis amount. The
stated redemption price at maturity of an instrument is the total of all
payments provided by the instrument that are not payments of "qualified stated
interest." A qualified stated interest payment is generally any one of a series
of stated interest payments on an instrument that are unconditionally payable at
least annually at a single fixed rate. In determining whether a debt instrument
has been issued with OID, remote contingencies as to the timely payment of
stated interest are ignored. In the case of the Subordinated Debt Securities,
Citicorp has concluded that the likelihood of its exercising its option to defer
payment of interest is remote because the exercise of such option would prevent
Citicorp from declaring dividends on any class of its stock. Accordingly,
Citicorp intends to treat the Subordinated Debt Securities as having been issued
without OID and, therefore, United States Holders of the Capital Securities will
accrue interest income under their particular methods of accounting (e.g., cash
or accrual) rather than accruing OID on a constant yield basis.
If, however, Citicorp were to exercise its right to defer payments of
interest, under existing Treasury regulations, the Subordinated Debt Securities
will become OID instruments, and all United States Holders of the Capital
Securities will thereafter be required to accrue interest on a constant yield
basis during any Extension Period even though Citicorp will not pay the interest
in cash until the end of the Extension Period, and even though a United States
Holder may be on the cash method of accounting. Furthermore, if the Subordinated
Debt Securities become OID instruments because Citicorp has exercised its right
to defer payment of interest, they will be taxed as OID instruments for as long
as they remain outstanding, even after the expiration of the Extension Period
and the payment of all accrued and compounded interest.
The above conclusions are based on recently-promulgated Treasury
regulations, which have not been interpreted by any court decisions or addressed
in any rulings or other pronouncements of the Internal Revenue Service ("IRS"),
and its is possible that the IRS could take a position contrary to the
conclusions herein.
Corporate holders of the Capital Securities will not be entitled to a
dividends-received deduction with respect to any income recognized with respect
to the Capital Securities.
Market Discount and Bond Premium
Under certain circumstances, United States Holders of Capital Securities
other than initial holders may be considered to have acquired their undivided
interests in the Subordinated Debt Securities with market discount or
acquisition premium as such phrases are defined for United States federal income
tax purposes. Such holders are advised to consult their tax advisors as to the
income tax consequences of the acquisition, ownership and disposition of the
Capital Securities.
Receipt of Subordinated Debt Securities or Cash Upon Liquidation of the Trust
As described under "Description of the Capital Securities --Tax Event
Redemption or Distribution" and "--Regulatory Capital Event Redemption or
Distribution," Citicorp has the right to distribute Subordinated Debt Securities
to holders in exchange for the Capital Securities and in liquidation of the
Trust. Under current law, such a distribution, for United States federal income
tax purposes, would be treated as a non-taxable event to each holder, and each
holder would receive an aggregate tax basis in the Subordinated Debt Securities
equal to such holder's aggregate tax basis in its Capital Securities. A holder's
holding period in the Subordinated Debt Securities so received in liquidation of
the Trust would include the period during which the Capital Securities were held
by
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such holder. If, however, the Trust is treated as an association taxable as a
corporation at the time of its liquidation, the distribution of Subordinated
Debt Securities in liquidation of the Trust would likely constitute a taxable
event to the holders of the Capital Securities.
Upon the occurrence of a Tax Event or a Regulatory Capital Event, the
Subordinated Debt Securities may in certain circumstances be redeemed for cash
and the proceeds of such redemption distributed to holders in redemption of
their Capital Securities. Under current law, such a redemption would, for United
States federal income tax purposes, constitute a taxable disposition of the
redeemed Capital Securities, and a United States Holder would recognize gain or
loss as if it sold such redeemed Capital Securities for cash. See "-- Sales of
Capital Securities" below.
Sales of Capital Securities
A United States Holder that sells Capital Securities will recognize gain
or loss equal to the difference between its adjusted tax basis in the Capital
Securities and the amount realized on the sale of such Capital Securities.
Assuming Citicorp does not defer interest on the Subordinated Debt Securities by
extending the interest payment period, a holder's adjusted tax basis in the
Capital Securities generally will be its initial purchase price. Except to the
extent attributable to accrued but unpaid interest (which is taxable as ordinary
income ) and subject to the market discount rules described above, such gain or
loss generally will be capital gain or loss and generally will be long-term
capital gain or loss if the Capital Securities have been held for more than one
year.
The Capital Securities may trade at a price that does not accurately
reflect the value of accrued but unpaid interest with respect to the underlying
Subordinated Debt Securities. If Citicorp exercises its right to defer payments
of interest, a United States Holder who disposes of his Capital Securities
between record dates for payments of distributions thereon will be required to
include accrued but unpaid interest on the Subordinated Debt Securities through
the date of disposition in income as ordinary income, and to add such amount to
his adjusted tax basis in his pro rata share of the underlying Subordinated Debt
Securities deemed disposed of. To the extent the selling price is less than the
United States Holder's adjusted tax basis (which will include, in the form of
OID, all accrued but unpaid interest) such holder will recognize a capital loss.
Subject to certain limited exceptions, capital losses cannot be applied to
offset ordinary income for United States federal income tax purposes. Accrual
basis United States Holders will be subject to similar treatment without regard
to Citicorp's election to defer.
United States Alien Holders
Under present United States federal income tax law and subject to the
discussion of backup withholding below:
(a) a United States Alien Holder who does not actually or constructively
own shares of any class of Citicorp stock following the Exchange will not
be subject to United States federal withholding tax on gain realized as a
result of the exchange of Depositary Shares for Capital Securities;
(b) payment of principal and interest (including any OID) by the Trust or
any of its paying agents to any United States Alien Holder (as defined
below) will not be subject to United States federal withholding tax,
provided that in the case of interest or OID, (1) the beneficial owner of
the Capital Securities does not actually or constructively own 10% or more
of the total combined voting power of all classes of stock of Citicorp
entitled to vote, (2) the beneficial owner of the Capital Securities is
not a controlled
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foreign corporation that is related to Citicorp through stock ownership,
and (3) either (i) the beneficial owner of the Capital Securities
certifies to Citicorp or its agent, under penalties of perjury, that he is
not a United States person (as defined below) and provides his name and
address, or (ii) a securities clearing organization, bank or other
financial institution that holds customers' securities in the ordinary
course of its trade or business (a "financial institution") and holds the
Capital Securities on behalf of the beneficial owner certifies to Citicorp
or its paying agent under penalties of perjury that such statement has
been received from the beneficial owner by it or by a financial
institution between it and the beneficial owner and furnishes the payor a
copy thereof and
(c) a United States Alien Holder will not be subject to United States
federal withholding tax on gain realized on the sale or other disposition
of Capital Securities.
United States Alien Holders who will actually or constructively own shares
of any class of Citicorp stock following the Exchange should consult their tax
advisors concerning the possibility that receipt of the Capital Securities in
exchange for Depositary Shares may be treated as a dividend, which would
generally be subject to U.S. withholding tax at a 30% rate or such lower rate as
may be specified in an applicable income tax treaty.
As used herein, a "United States Alien Holder" is any holder of Capital
Securities who is a United States Alien (as defined below). As used herein, a
"United States Alien" means any person who, for United States federal income tax
purposes, is a foreign corporation, a non-resident alien individual, a
non-resident alien fiduciary of a foreign estate or trust, or a foreign
partnership to the extent that one or more of the members is, for United States
federal income tax purposes, a foreign corporation, a non-resident alien
individual or a non-resident alien fiduciary of a foreign estate or trust, in
each case not subject to United States federal income tax on a net income basis
in respect of Capital Securities. "United States person" means a citizen or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source.
Backup Withholding and Information Reporting
Payments of principal (including OID, if any) and any premium and interest
made within the United States by the Trust or any of its paying agents are
generally subject to information reporting and possibly to "backup withholding"
at a rate of 31%. Information reporting and backup withholding do not apply to
payments made on Capital Securities if the certification described in clause
(a)(3) under "United States Alien Holders" is received, provided, in each case,
that the payor does not have actual knowledge that the holder is a United States
person.
Payment of the proceeds from the sale of Capital Securities to or through
a foreign office of a broker will not be subject to information reporting or
backup withholding, except that if the broker is a United States person, a
controlled foreign corporation for United States tax purposes or a foreign
person 50% or more of whose gross income is effectively connected with the
conduct of a trade or business within the United States for a specified
three-year period, information reporting will apply to such payments unless such
broker has documentary evidence in its files of the owner's foreign status and
has no actual knowledge to the contrary, or the owner otherwise establishes an
exemption. Payment of the proceeds from a sale of Capital Securities to or
through the United States office of a broker is subject to information reporting
and backup withholding unless the holder or beneficial owner certifies as to its
non-United States status or otherwise establishes an exemption from information
reporting and backup withholding.
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Backup withholding will generally not apply to United States Holders other
than certain noncorporate Holders who fail to supply an accurate taxpayer
identification number or who fail to report all interest and dividend income
required to be shown on their federal income tax returns.
Proposed Tax Legislation
On March 19, 1996, President Clinton proposed legislation (the "Proposed
Legislation") which, among other things, would generally deny corporate issuers
a deduction for interest in respect of certain debt obligations issued on or
after December 7, 1995, if such debt obligations have a maximum term in excess
of 20 years and are not shown as indebtedness on the issuer's applicable
consolidated balance sheet. On March 29, 1996, Senate Finance Committee Chairman
William V. Roth, Jr. and House Ways and Means Committee Chairman Bill Archer
issued a joint statement (the "Joint Statement") indicating their intent that
certain legislative proposals initiated by the Clinton administration, including
the Proposed Legislation, that may be adopted by either of the tax-writing
committees of Congress would have an effective date that is no earlier than the
date of "appropriate Congressional action." In addition, subsequent to the
publication of the Joint Statement, Senator Daniel Patrick Moynihan and
Representatives Sam M. Gibbons and Charles B. Rangel wrote letters to Treasury
Department officials concurring with the views expressed in the Joint Statement
(the "Democrat Letters"). Based upon the Joint Statement and the Democrat
Letters, it is expected that if the Proposed Legislation were to be enacted,
such legislation would not apply to the Subordinated Debt Securities. There can
be no assurances, however, that the effective date guidance contained in the
Joint Statement and Democrat Letters will be incorporated into the Proposed
Legislation, if enacted, or that other legislation enacted after the date hereof
will not otherwise adversely affect the ability of the Company to deduct the
interest payable on the Subordinated Debt Securities. Accordingly, there can be
no assurance that a Tax Event will not occur. See "Description of the Capital
Securities -- Tax Event Redemption or Distribution."
VALIDITY OF SECURITIES
Certain matters of Delaware law relating to the validity of the Preferred
Securities will be passed upon on behalf of the Trusts by Morris, Nichols, Arsht
& Tunnell, Wilmington, Delaware, special Delaware counsel to the Trusts. The
validity of the Subordinated Debt Securities and the Guarantees and certain
matters relating thereto will be passed upon for Citicorp by Stephen E. Dietz,
an Associate General Counsel of Citibank, N.A. Mr. Dietz owns or has the right
to acquire a number of shares of Common Stock of Citicorp equal to less than
0.01% of the outstanding Common Stock of Citicorp. The validity of the Capital
Securities, the Guarantees and the Subordinated Debt Securities will be passed
upon for the Dealer Manager by Sullivan & Cromwell, New York, New York. In
rendering their opinion, Sullivan & Cromwell will rely upon the opinion of
Morris, Nichols, Arsht & Tunnell as to matters of Delaware law.
EXPERTS
The consolidated financial statements of Citicorp and subsidiaries
included in Citicorp's Annual Report and Form 10-K for 1995 have been
incorporated herein by reference in reliance upon the report set forth therein
of KPMG Peat Marwick LLP, independent certified public accountants, and upon the
authority of said firm as experts in accounting and auditing. The report of KPMG
Peat Marwick LLP, covering the December 31, 1995 financial statements refers to
the fact that in 1994 Citicorp adopted Statement of Financial Accounting
Standards ("SFAS") No. 112, "Employers' Accounting for Postemployment Benefits"
and SFAS No. 115, "Accounting for Certain Investments in Debt and Equity
Securities," and in 1993 Citicorp adopted SFAS No. 106, "Employers' Accounting
99
<PAGE>
for Postretirement Benefits Other Than Pensions" and SFAS No. 109, "Accounting
for Income Taxes."
ERISA CONSIDERATIONS
Generally, employee benefit plans that are subject to the Employee
Retirement Income Security Act of 1974 ("ERISA"), or Section 4975 of the Code
("Plans"), may acquire Capital Securities, subject to the investing fiduciary's
determination that the investment in Capital Securities satisfies ERISA's
fiduciary standards and other requirements applicable to investments by the
Plan.
In any case, Citicorp (the obligor on the Subordinated Debt Securities)
and its affiliates may be considered a "party in interest" (within the meaning
of ERISA) or a "disqualified person" (within the meaning of Section 4975 of the
Code) with respect to certain plans. The acquisition and ownership of Capital
Securities by a Plan (or by an individual retirement arrangement or other Plans
described in Section 4975(e)(1) of the Code) with respect to which Citicorp or
any of its affiliates is considered a party in interest or a disqualified
person, may constitute or result in a prohibited transaction under ERISA or
Section 4975 of the Code, unless such Capital Securities are acquired pursuant
to and in accordance with an applicable exemption.
As a result, Plans with respect to which Citicorp or any of its affiliates
is a party in interest or a disqualified person should not acquire Capital
Securities. Any other Plans or other entities the assets of which include Plan
assets subject to ERISA proposing to acquire Capital Securities should consult
with their own ERISA counsel.
100
<PAGE>
Facsimile copies of Letters of Transmittal will be accepted. Letters of
Transmittal, certificates representing Depositary Receipts and any other
required documents should be sent by each Holder of Depositary Receipts or his
broker, dealer, commercial bank, trust company or other nominee to the Exchange
Agent at one of the addresses as set forth below:
The Exchange Agent is:
Citibank, N.A.
By Hand: By Mail (registered or certified
Citibank, N.A. mail recommended):
Corporate Agency & Trust Services Citibank, N.A.
111 Wall Street, 5th Floor c/o Citicorp Data Distribution, Inc.
New York, New York P.O. Box 7069
Paramus, New Jersey 07653
By Overnight Courier:
Citibank, N.A.
c/o Citicorp Data Distribution, Inc.
404 Sette Drive
Paramus, New Jersey 07652
By Facsimile:
(For Eligible Institutions Only)
(201) 262-3240
Confirm Receipt of Notice of Guaranteed Delivery by Telephone:
(800) 422-2066
The Information Agent is:
Banks and Brokers Call Collect
(212)
Any questions or requests for assistance or additional copies of this
Prospectus, the Letter of Transmittal or the Notice of Guaranteed Delivery may
be directed to the Information Agent at its telephone number and location set
forth above. You may also contact your broker, dealer, commercial bank or trust
company or other nominee for assistance concerning the Offers.
The Dealer Manager for the Offers is:
Merrill Lynch & Co.
World Financial Center
North Tower - Seventh Floor
New York, New York 10281
(888) ML4-TNDR (Toll Free)
(888) 654-8637 (Toll-Free)
Attn:
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
Subsection (a) of Section 145 of the General Corporation Law of the State
of Delaware empowers a corporation to indemnify any person who was or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the corporation
or is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted
under similar standards, except that no indemnification may be made in respect
of any claim, issue or matter as to which such person shall have been adjudged
to be liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the court shall deem proper.
Section 145 further provides that to the extent a director or officer of a
corporation, among others, has been successful on the merits or otherwise in the
defense of any action, suit or proceeding referred to in subsections (a) and (b)
or in the defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith; that expenses incurred by a director or officer in
defending any action, suit or proceeding may be paid by the corporation in
advance of the final disposition thereof upon receipt of an undertaking by or on
behalf of such director or officer to repay such amount if it is ultimately
determined that such director or officer is not entitled to indemnification
under Section 145; and that indemnification and advancement of expenses provided
for by Section 145 shall not be deemed exclusive of any other rights to which
the person seeking indemnification or advancement of expenses may be entitled;
and empowers the corporation to purchase and maintain insurance on behalf of a
director or officer of the corporation, among others, against any liability
asserted against him or incurred by him in any such capacity or arising out of
his status as such, whether or not the corporation would have the power to
indemnify him against such liabilities under Section 145.
The Restated Certificate of Incorporation, as amended, of Citicorp
provides, in effect, that, to the extent and under the circumstances permitted
by subsections (a) and (b) of Section
II-1
<PAGE>
145, Citicorp (i) shall indemnify any person who was or is a party or is
threatened to be made a party to any action, suit or proceeding described in
subsections (a) and (b) by reason of the fact that he is or was a director or
officer of Citicorp against expenses, judgments, fines and amounts paid in
settlement, and (ii) may indemnify any person who was or is a party or is
threatened to be made a party to any such action, suit or proceeding if such
person was an employee or agent of Citicorp and is or was serving at the request
of Citicorp as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise. Such Restated Certificate
of Incorporation also provides, in effect, that expenses incurred by a director
or officer in defending a civil or criminal action, suit or proceeding shall be
paid by Citicorp in advance of the final disposition thereof upon receipt of an
undertaking by or on behalf of the director or officer to repay such amount if
it shall ultimately be determined that such director or officer is not entitled
to be indemnified by Citicorp. In addition, as permitted by Section 145 of the
General Corporation Law of the State of Delaware, Citicorp maintains liability
insurance covering directors and principal officers, including the Regular
Trustees of the Trusts.
Article IV of the Declaration of Trust of each Trust limits the liability
to the Trust and certain other persons, and provides for the indemnification by
the Trust or Citicorp, of Trustees, their officers, directors and employees and
certain other persons.
Item 21. Exhibits and Financial Statement Schedules.
1(a) -- Form of Dealer Manager Agreement (1)
3(i) -- Restated Certificate of Incorporation, as amended through June
16, 1993, of Citicorp. (2)
(a) Certificate of Designations, Series 18 Preferred Stock. (3)
(b) Certificate of Designations, Series 19 Preferred Stock. (3)
(c) Certificate of Designations, Series 20 Preferred Stock. (3)
(d) Certificate of Designations, Series 21 Preferred Stock. (3)
(e) Certificate of Designations, Series 22 Preferred Stock. (3)
(f) Certificate of Designations, Series 23 Preferred Stock. (3)
3(ii) -- Bylaws of Citicorp. (4)
4(a) -- Certificate of Trust of Citicorp Capital X. (Certificates of
Trust for each other Trust, identical except for the name, will
be filed upon request.) (1)
4(b) -- Declaration of Trust of Citicorp Capital X. (Declarations of
Trust for each other Trust, identical except for the name, will
be filed upon request.) (1)
4(c) -- Form of Amended and Restated Declaration of Trust to be used in
connection with the issuance of Capital Securities. (1)
4(d) -- Indenture, dated as of December 17, 1996, between Citicorp and
Wilmington Trust Company, as Trustee. (5)
4(e) -- Form of Supplemental Indenture to be used in connection with the
issuance of the Subordinated Debt Securities. (7)
4(f) -- Form of Capital Security (included in 4(c) above).
4(g) -- Form of Subordinated Debt Security (included in 4(e) above).
4(h) -- Form of Guarantee with respect to Capital Securities. (7)
5(a) -- Opinion and consent of Stephen E. Dietz, Associate General
Counsel of Citibank, N.A. (1)
5(b) -- Opinion and consent of Morris, Nichols, Arsht & Tunnell.(1)
8(a) -- Opinion and consent of E. Noel Harwerth, Esq., Chief Tax Officer
of Citibank, N.A.(1)
II-2
<PAGE>
12(a) -- Citicorp and Subsidiaries--Calculation of Ratio of Income to
Fixed Charges. (6)
23(a) -- Consent of KPMG Peat Marwick LLP. (7)
23(b) -- Consent of Stephen E. Dietz, Associate General Counsel of
Citibank, N.A. (included as part of Exhibit 5(a)).
23(c) -- Consent of Morris, Nichols, Arsht & Tunnell (included as part of
Exhibit 5(b)).
23(d) -- Consent of E. Noel Harwerth, Esq. (included as part of
Exhibit 8).
24 -- Powers of Attorney. (7)
25(a) -- Statement of Eligibility of Wilmington Trust Company, as Debt
Trustee under the Indenture. (1)
25(b) -- Statement of Eligibility of Wilmington Trust Company, as
Institutional Trustee under the Amended and Restated Declaration
of Trust of Citicorp Capital X. (1)
25(c) -- Statement of Eligibility of Wilmington Trust Company, as
Institutional Trustee under the Amended and Restated Declaration
of Trust of Citicorp Capital XI. (1)
25(d) -- Statement of Eligibility of Wilmington Trust Company, as
Institutional Trustee under the Amended and Restated Declaration
of Trust of Citicorp Capital XII. (1)
25(e) -- Statement of Eligibility of Wilmington Trust Company, as
Institutional Trustee under the Amended and Restated Declaration
of Trust of Citicorp Capital XIII. (1)
25(f) -- Statement of Eligibility of Wilmington Trust Company, as
Institutional Trustee under the Amended and Restated Declaration
of Trust of Citicorp Capital XIV. (1)
25(g) -- Statement of Eligibility of Wilmington Trust Company, as
Guarantee Trustee under the Guarantee of Citicorp for the benefit
of the holders of Capital Securities of Citicorp Capital X. (1)
25(h) -- Statement of Eligibility of Wilmington Trust Company, as
Guarantee Trustee under the Guarantee of Citicorp for the benefit
of the holders of Capital Securities of Citicorp Capital XI. (1)
25(i) -- Statement of Eligibility of Wilmington Trust Company, as
Guarantee Trustee under the Guarantee of Citicorp for the benefit
of the holders of Capital Securities of Citicorp Capital XII. (1)
25(j) -- Statement of Eligibility of Wilmington Trust Company, as
Guarantee Trustee under the Guarantee of Citicorp for the benefit
of the holders of Capital Securities of Citicorp Capital XIII.(1)
25(k) -- Statement of Eligibility of Wilmington Trust Company, as
Guarantee Trustee under the Guarantee of Citicorp for the benefit
of the holders of Capital Securities of Citicorp Capital XIV. (1)
99(a) -- Form of Letter of Transmittal. (1)
99(b) -- Form of Notice of Guaranteed Delivery. (1)
99(c) -- Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees. (1)
99(d) -- Form of Letter to Clients. (1)
99(e) -- Form of Exchange Agent Agreement. (1)
99(f) -- Form of Information Agent Agreement. (1)
99(g) -- Form of Notice of Offer to Exchange. (1)
99(h) -- Form of Citicorp Letter to Holders of Depositary Shares. (1)
- --------
(1) To be filed by amendment.
(2) Incorporated herein by reference to Citicorp's Registration
Statement on Form S-3, File No. 33-64574.
II-3
<PAGE>
(3) Incorporated herein by reference to Citicorp's Registration
Statement on Form 8-A, filed with respect to the corresponding
series of preferred stock.
(4) Incorporated herein by reference to Citicorp's Registration
Statement on Form S-8, File No. 33-53261.
(5) Incorporated herein by reference to Citicorp's Registration
Statement on Form S-3, File No. 333-14917
(6) Incorporated herein by reference to Citicorp's Current Report on
Form 8-K, dated January 21, 1997.
(7) Filed herewith.
Item 22. Undertakings.
The undersigned registrants hereby undertake:
(1) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(2) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this form,
within one business day of receipt of such request, and to send the incorporated
documents, by first class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective date of the
registration statement through the date of responding to the request.
(3) To supply by means of post-effective amendment all information
concerning a transaction, and the company being acquired involved therein, that
was not the subject of and included in the registration statement when it became
effective.
(4) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrants pursuant to the foregoing provisions, or otherwise,
the registrants have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrants in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the registrants will, unless in the opinion of
their counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-4 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in The City of New York, State of New York, on February 5, 1997.
CITICORP
By /s/ Peter Gallant
--------------------
Peter Gallant
Vice President
CITICORP CAPITAL X
CITICORP CAPITAL XI
CITICORP CAPITAL XII
CITICORP CAPITAL XIII
CITICORP CAPITAL XIV
By /s/ Peter Gallant
---------------------
Peter Gallant
Trustee
By /s/ Ann Goodbody
--------------------
Ann Goodbody
Trustee
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on February 5, 1997 by the
following persons in the capacities with Citicorp indicated below.
Signature Capacity
--------- --------
* Chairman and Director
______________________ (Principal Executive Officer)
John S. Reed
/s/ Victor J. Menezes
---------------------- Executive Vice President
Victor J. Menezes Chief Financial Officer
/s/ Thomas E. Jones
--------------------- Executive Vice President
Thomas E. Jones (Principal Financial Officer) (a)
(a) Responsible for financial control, tax, accounting and reporting.
II-5
<PAGE>
Signature Capacity
--------- --------
*
______________________ Director
D. Wayne Calloway
______________________ Director
Paul J. Collins
*
______________________ Director
Kenneth T. Derr
*
______________________ Director
John M. Deutsch
______________________ Director
Reuben Mark
______________________ Director
Richard D. Parsons
______________________ Director
William R. Rhodes
*
______________________ Director
Rozanne L. Ridgway
*
______________________ Director
H. Onno Ruding
*
______________________ Director
Robert B. Shapiro
*
______________________ Director
Frank A. Shrontz
II-6
<PAGE>
Signature Capacity
--------- --------
*
______________________ Director
Franklin A. Thomas
*
______________________ Director
Edgar S. Woolard, Jr.
* By /s/ Peter Gallant
----------------------
Peter Gallant
Attorney-in-Fact
II-7
====================================
[ ] SUPPLEMENTAL INDENTURE
between
CITICORP
and
WILMINGTON TRUST COMPANY, as Trustee
Dated as of [ ], 1997
=====================================
1
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
SECTION 1.1. Definition of Terms............................................ 2
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
SECTION 2.1. Designation and Principal Amount............................... 3
SECTION 2.2. Maturity....................................................... 3
SECTION 2.3. Form and Payment............................................... 3
SECTION 2.4. Global Debenture............................................... 4
SECTION 2.5. Interest....................................................... 6
ARTICLE III
REDEMPTION OF THE DEBENTURES
SECTION 3.1. Tax Event and Regulatory Capital Event
Redemption..................................................... 7
SECTION 3.2. Optional Redemption by Company................................. 8
SECTION 3.3. No Sinking Fund................................................ 10
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. Extension of Interest Payment Period........................... 10
SECTION 4.2. Notice of Extension............................................ 11
SECTION 4.3. Limitation of Transactions..................................... 12
ARTICLE V
EXPENSES
SECTION 5.1. Payment of Expenses............................................ 12
Section 5.2. Payment Upon Resignation or Removal............................ 13
ARTICLE VI
FORM OF DEBENTURE
i
<PAGE>
Page
----
SECTION 6.1. Form of Debenture.............................................. 14
ARTICLE VII
ORIGINAL ISSUE OF DEBENTURES
SECTION 7.1. Original Issue of Debentures................................... 23
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Ratification of Indenture...................................... 24
SECTION 8.2. Trustee Not Responsible for Recitals........................... 24
SECTION 8.3. Governing Law.................................................. 24
SECTION 8.4. Separability................................................... 24
SECTION 8.5. Counterparts................................................... 24
ii
<PAGE>
[ ] SUPPLEMENTAL INDENTURE, dated as of [ ], 1997 (the "[ ]Supplemental
Indenture"), between Citicorp, a Delaware corporation (the "Company"), and
Wilmington Trust Company, as trustee (the "Trustee") under the Indenture dated
as of December 17, 1996 between the Company and the Trustee (the "Indenture").
WHEREAS, the Company executed and delivered the Indenture to the Trustee
to provide for the future issuance of the Company's unsecured junior
subordinated debt securities to be issued from time to time in one or more
series as might be determined by the Company under the Indenture, in an
unlimited aggregate principal amount which may be authenticated and delivered as
provided in the Indenture;
WHEREAS, pursuant to the terms of the Indenture, the Company desires to
provide for the establishment of a new series of its Securities to be known as
its [ ]% Junior Subordinated Deferrable Interest Debentures due __________ 15,
2027 (the "Debentures"), the form and substance of such Debentures and the
terms, provisions and conditions thereof to be set forth as provided in the
Indenture and this [ ]Supplemental Indenture;
WHEREAS, Citicorp Capital [X] [XI] [XII] [XIII] [XIV], a Delaware
statutory business trust (the "Trust"), has issued to the public, in exchange
for certain Depositary Shares, $__________ aggregate liquidation amount of its
[___%] Capital Securities (the "Preferred Securities"), representing undivided
beneficial interests in the assets of the Trust and proposes to invest the
Depositary Shares tendered and accepted in such exchange, together with the
proceeds of the issuance and sale by the Trust to the Company of $_________
aggregate liquidation amount of its [ %] Common Securities (the "Common
Securities"), in $_____________ aggregate principal amount of the Debentures;
and
WHEREAS, the Company has requested that the Trustee execute and deliver
this [ ] Supplemental Indenture and all requirements necessary to make this [ ]
Supplemental Indenture a valid instrument in accordance with its terms, and to
make the Debentures, when executed by the Company and authenticated and
delivered by the Trustee, the valid obligations of the Company, have been
performed, and the execution and delivery of this [ ] Supplemental Indenture has
been duly authorized in all respects:
<PAGE>
NOW THEREFORE, in consideration of the purchase and acceptance of the
Debentures by the Holders thereof, and for the purpose of setting forth, as
provided in the Indenture, the form and substance of the Debentures and the
terms, provisions and conditions thereof, the Company covenants and agrees with
the Trustee as follows:
ARTICLE I
DEFINITIONS
SECTION 1 Definition of Terms.
Unless the context otherwise requires:
(a) a term defined in the Indenture has the same meaning when used in
this [ ] Supplemental Indenture;
(b) a term defined anywhere in this [ ] Supplemental Indenture has
the same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) a reference to a Section or Article is to a Section or Article of
this [ ] Supplemental Indenture;
(e) headings are for convenience of reference only and do not affect
interpretation;
(f) the following terms have the meanings given to them in the
Declaration: (i) Clearing Agency; (ii) Delaware Trustee; (iii) Dissolution Tax
Opinion; (iv) Institutional Trustee; (v) No Recognition Opinion; (vi) Preferred
Security Certificate; (vii) Pricing Agreement; (viii) Redemption Tax Opinion;
(ix) Regular Trustees; (x) Regulatory Capital Event; (xi) Tax Event; (xii) Tax
Counsel; and (xiii) Underwriting Agreement; and
(g) the following terms have the meanings given to them in this
Section 1.1(g):
"Additional Interest" shall have the meaning set forth in Section
2.5.
2
<PAGE>
"Compounded Interest" shall have the meaning set forth in Section
4.1.
"Declaration" means the Amended and Restated Declaration of Trust of
Citicorp Capital [X] [XI] [XII] [XIII] [XIV], a Delaware statutory business
trust, dated as of _________________ 1997.
"Deferred Interest" shall have the meaning set forth in Section 4.1.
"Dissolution Event" means the liquidation of the Trust by the Regular
Trustees pursuant to the Declaration as a result of the occurrence and
continuation of a Tax Event or a Regulatory Capital Event, and the distribution
of the Debentures held by the Institutional Trustee to the Holders of the Trust
Securities issued by the Trust pro rata in accordance with the Declaration.
"Extended Interest Payment Period" shall have the meaning set forth
in Section 4.1.
"Federal Reserve" shall mean the Board of Governors of the Federal
Reserve System.
"Global Debenture" shall have the meaning set forth in Section 2.4.
"Interest Payment Date" shall have the meaning set forth in Section
2.5(a).
"Non Book-Entry Preferred Securities" shall have the meaning set
forth in Section 2.4.
"Redemption Percentage" shall have the meaning set forth in Section
3.2.
"Redemption Price" shall have the meaning set forth in Section 3.2.
"Scheduled Maturity Date" shall mean _________15, 2027.
"Trust Securities" shall mean the Preferred Securities and the Common
Securities, collectively.
3
<PAGE>
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
SECTION 1 Designation and Principal Amount.
There is hereby authorized a series of Securities designated the "[
%] Junior Subordinated Deferrable Interest Debentures due __________ 15, 2027",
limited in aggregate principal amount to $___________, which amount shall be as
set forth in any written order of the Company for the authentication and
delivery of Debentures pursuant to Section 2.04 of the Indenture.
SECTION 2 Maturity.
The Scheduled Maturity Date shall be the date specified in the
Debentures on which the Debentures mature and on which the principal thereof
shall be due and payable together with all accrued and unpaid interest thereon
(including Compounded Interest and Additional Interest, if any).
SECTION 3 Form and Payment.
Except as provided in Section 2.4, the Debentures shall be issued in
fully registered, certificated form without interest coupons. Principal and
interest on the Debentures issued in certificated form will be payable, the
transfer of such Debentures will be registrable and such Debentures will be
exchangeable for Debentures bearing identical terms and provisions at the office
or agency of the Trustee; provided, however, that payment of interest may be
made at the option of the Company by check mailed to the holder at such address
as shall appear in the security register. Notwithstanding the foregoing, so long
as the holder of any Debentures is the Institutional Trustee, the payment of the
principal of and interest (including Compounded Interest and Additional
Interest, if any) on such Debentures held by the Institutional Trustee will be
made at such place and to such account as may be designated by the Institutional
Trustee.
SECTION 4 Global Debenture.
4
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(a) In connection with a Dissolution Event,
(i) the Debentures in certificated form may be presented to the
Trustee by the Institutional Trustee in exchange for a global Debenture in an
aggregate principal amount equal to the aggregate principal amount of all
outstanding Debentures (a "Global Debenture"), to be registered in the name of
the Depositary, or its nominee, and delivered by the Trustee to the Depositary
for crediting to the accounts of its participants pursuant to the instructions
of the Regular Trustees. The Company upon any such presentation shall execute a
Global Debenture in such aggregate principal amount and deliver the same to the
Trustee for authentication and delivery in accordance with the Indenture and
this [ ] Supplemental Indenture. Payments on the Debentures issued as a Global
Debenture will be made to the Depositary; and
(ii) if any Preferred Securities are held in non- book-entry
certificated form, the Debentures in certificated form may be presented to the
Trustee by the Institutional Trustee and any Preferred Security Certificate
which represents Preferred Securities other than Preferred Securities held by
the Clearing Agency or its nominee ("Non Book-Entry Preferred Securities") will
be deemed to represent beneficial interests in Debentures presented to the
Trustee by the Institutional Trustee having an aggregate principal amount equal
to the aggregate liquidation amount of the Non Book-Entry Preferred Securities
until such Preferred Security Certificates are presented to the Security
Registrar for transfer or reissuance at which time such Preferred Security
Certificates will be cancelled and a Debenture, registered in the name of the
holder of the Preferred Security Certificate or the transferee of the holder of
such Preferred Security Certificate, as the case may be, with an aggregate
principal amount equal to the aggregate liquidation amount of the Preferred
Security Certificate cancelled, will be executed by the Company and delivered to
the Trustee for authentication and delivery in accordance with the Indenture and
this [ ] Supplemental Indenture. Upon the issuance of such Debentures,
Debentures with an equivalent aggregate principal amount that were
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presented by the Institutional Trustee to the Trustee will be deemed to have
been cancelled.
(b) A Global Debenture may be transferred, in whole but not in part,
only to another nominee of the Depositary, or to a successor Depositary selected
or approved by the Company or to a nominee of such successor Depositary.
(c) If at any time the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary or if at any time the Depositary
for such series shall no longer be registered or in good standing under the
Securities Exchange Act of 1934, as amended, or other applicable statute or
regulation, and a successor Depositary for such series is not appointed by the
Company within 90 days after the Company receives such notice or becomes aware
of such condition, as the case may be, the Company will execute, and, subject to
Article II of the Indenture, the Trustee, upon written notice from the Company,
will authenticate and make available for delivery the Debentures in definitive
registered form without coupons, in authorized denominations, and in an
aggregate principal amount equal to the principal amount of the Global Debenture
in exchange for such Global Debenture. In addition, the Company may at any time
determine that the Debentures shall no longer be represented by a Global
Debenture. In such event the Company will execute, and subject to Section 2.07
of the Indenture, the Trustee, upon receipt of an Officers' Certificate
evidencing such determination by the Company, will authenticate and deliver the
Debentures in definitive registered form without coupons, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Debenture in exchange for such Global Debenture. Upon the
exchange of the Global Debenture for such Debentures in definitive registered
form without coupons, in authorized denominations, the Global Debenture shall be
cancelled by the Trustee. Such Debentures in definitive registered form issued
in exchange for the Global Debenture shall be registered in such names and in
such authorized denominations as the Depositary, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the Trustee.
The Trustee shall deliver such Securities to the Depositary for delivery to the
Persons in whose names such Securities are so registered.
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SECTION 5 Interest.
(a) Each Debenture will bear interest at the rate of [ %] per annum
(the "Coupon Rate") from the original date of issuance until the principal
thereof becomes due and payable, and on any overdue principal and (to the extent
that payment of such interest is enforceable under applicable law) on any
overdue installment of interest at the Coupon Rate, compounded semiannually,
payable (subject to the provisions of Article Four) semiannually in arrears on
February 15, May 15, August 15 and November 15, of each year (each, an "Interest
Payment Date") commencing on _________ 15, 1997, to the Person in whose name
such Debenture or any predecessor Debenture is registered, at the close of
business on the regular record date for such interest installment, which, in
respect of any Debentures of which the Institutional Trustee is the holder of a
Global Debenture, shall be the close of business on the Business Day next
preceding that Interest Payment Date. Notwithstanding the foregoing sentence, if
the Debentures are no longer in book-entry only form and not represented by a
Global Debenture, except if the Debentures are held by the Institutional
Trustee, the Company may select a regular record date for such interest
installment which shall be any date not less than one nor more than fifteen
Business Days before an Interest Payment Date.
(b) The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months. Except as provided in the
following sentence, the amount of interest payable for any period shorter than a
full semiannual period for which interest is computed, will be computed on the
basis of the actual number of days elapsed. In the event that any date on which
interest is payable on the Debentures is not a Business Day, then payment of
interest payable on such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date.
(c) If, at any time while the Institutional Trustee is the holder of
any Debentures, the Trust or the Institutional
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Trustee is required to pay any taxes, duties, assessments or governmental
charges of whatever nature (other than withholding taxes) imposed by the United
States, or any other taxing authority, then, in any case, the Company will pay
as additional interest ("Additional Interest") on the Debentures held by the
Institutional Trustee, such additional amounts as shall be required so that the
net amounts received and retained by the Trust and the Institutional Trustee
after paying such taxes, duties, assessments or other governmental charges will
be equal to the amounts the Trust or the Institutional Trustee would have
received had no such taxes, duties, assessments or other government charges been
imposed. Whenever in this Indenture there is mentioned, in any context, the
payment of the principal of or interest on, or in respect of, any Debenture,
such mention shall be deemed to include mention of the payment of Additional
Interest, if any, provided for in this Section 2.5 to the extent that, in such
context, Additional Interest is, was or would be payable in respect thereof
pursuant to the provisions hereof and express mention of the payment of
Additional Interest (if applicable) in any provisions hereof shall not be
construed as excluding Additional Interest in those provisions hereof where such
express mention is not made.
ARTICLE III
REDEMPTION OF THE DEBENTURES
SECTION 1 Tax Event and Regulatory Capital Event Redemption.
(a) If at any time prior to __________15, 2002, a Tax Event has
occurred and is continuing and
(i) the Company has received a Redemption Tax Opinion; or
(ii) after receiving a Dissolution Tax Opinion, the Regular
Trustees shall have been informed by Tax Counsel that a No Recognition Opinion
cannot be delivered to the Trust,
then, in each case, notwithstanding anything to the contrary in Section 3.2(a)
but subject to Section 3.2(c), the Company shall have the right, upon not less
than 30 nor more than 60 days'
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notice to the Holders of the Debentures, to redeem the Debentures, in whole or
in part, within 90 days following the occurrence of such Tax Event at the
Redemption Price, provided that (i) if at the time there is available to the
Company the opportunity to eliminate, within the 90 days following the
occurrence of such Tax Event, the Tax Event by taking some ministerial action,
such as filing a form or making an election, or pursuing some other similar
reasonable measure which has no adverse effect on the Company, the Trust or the
Holders of the Trust Securities issued by the Trust, the Company shall pursue
such ministerial action or measure in lieu of redemption, and (ii) the Company
shall have no right to redeem the Debentures while the Trust is pursuing any
such ministerial action pursuant to its obligations under the Declaration.
(b) If at any time prior to ___________15, 2002, a Regulatory Capital
Event has occurred and is continuing then, subject to Sections 3.2(b), (c) and
(d), the Company shall have the right, upon not less than 30 nor more than 60
days' notice to the Holders of the Debentures, to redeem the Debentures, in
whole or in part, within 90 days following the occurrence of such Regulatory
Capital Event, at the Redemption Price set forth in Section 2.2(b), provided
that (i) if at the time there is available to the Company the opportunity to
eliminate, within such 90-day period, the Regulatory Capital Event by taking
some ministerial action, such as filing a form or making an election, or
pursuing some other similar reasonable measure which has no adverse effect on
the Company, the Trust or the Holders of the Trust Securities issued by the
Trust, the Company shall pursue such ministerial action or measure in lieu of
redemption, and (ii) the Company shall have no right to redeem the Debentures
while the Trust is pursuing any such ministerial action or measure pursuant to
its obligations under the Declaration.
(c) The Redemption Price shall be paid prior to 12:00 noon, New York
time, on the date of such redemption or such earlier time as the Company
determines, provided that the Company shall deposit with the Trustee an amount
sufficient to pay the Redemption Price by 10:00 a.m., New York time, on the date
such Redemption Price is to be paid.
SECTION 2 Optional Redemption by Company.
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(a) Subject to the provisions of Sections 3.1, 3.2(b), 3.2(c) and to
the provisions of Article Fourteen of the Indenture, except as otherwise may be
specified in this [ ] Supplemental Indenture, the Company shall have the right
to redeem the Debentures, in whole or in part, from time to time, on or after
____________15, 2002, at the Redemption Price.
(b) The Redemption Price in the case of any redemption pursuant to
Section 3.1(a), 3.1(b) or 3.2(a) will equal the applicable Redemption Percentage
(determined as described below) times the principal amount of the Debentures,
plus accrued interest thereon (including any Compounded Interest and Additional
Interest) to but excluding the date fixed for redemption (the "Redemption
Price").
The Redemption Percentage, in the case of any redemption occurring
prior to ____________15, 2002 pursuant to Section 3.2(a), will equal the
applicable percentage set out in the following table if the redemption date
occurs during the 12-month period beginning ________ 15 in the year indicated:
Year Redemption Percentage
- ---- ---------------------
1997.......................................... %
1998..........................................
1999..........................................
2001..........................................
2002..........................................
The Redemption Percentage will be 100% for any redemption on or after
___________15, 2002.
(c) If a partial redemption of the Debentures pursuant to Section 3.1
or this Section 3.2 would result in the delisting of the Preferred Securities
issued by the Trust from any national securities exchange or other organization
on which the Preferred Securities are then listed, the Company shall not be
permitted to effect such partial redemption and may only redeem the Debentures
in whole.
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(d) Any redemption of Debentures pursuant to Section 3.1 or Section
3.2 shall be subject to the Company obtaining the prior approval of the Federal
Reserve, if such approval is then required under applicable law or capital
guidelines of the Federal Reserve.
SECTION 3 No Sinking Fund.
The Debentures are not entitled to the benefit of any sinking fund.
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 1 Extension of Interest Payment Period.
The Company shall have the right, at any time and from time to time
during the term of the Debentures, to defer payments of interest by extending
the interest payment period of such Debentures for a period not exceeding 20
consecutive quarterly interest periods, including the first such quarterly
interest period during such extension period (the "Extended Interest Payment
Period"), during which Extended Interest Payment Period no interest shall be due
and payable; provided that no Extended Interest Payment Period may extend beyond
the Scheduled Maturity Date. To the extent permitted by applicable law,
interest, the payment of which has been deferred because of the extension of the
interest payment period pursuant to this Section 4.1, will bear interest thereon
at the Coupon Rate compounded quarterly for each quarterly interest period
within the Extended Interest Payment Period ("Compounded Interest"). At the end
of the Extended Interest Payment Period, the Company shall pay all interest
accrued and unpaid on the Debentures, including any Additional Interest and
Compounded Interest (together, "Deferred Interest") that shall be payable to the
Holders of the Debentures in whose names the Debentures are registered in the
security register on the first record date after the end of the Extended
Interest Payment Period. Before the termination of any Extended Interest Payment
Period, the Company may further defer payments of interest by further extending
such period, provided that such period, together with all such previous and
further extensions within such Extended Interest Payment Period, shall not
exceed 20
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consecutive quarterly interest periods, including the first such quarterly
interest period during such Extended Interest Payment Period, or extend beyond
the Scheduled Maturity Date of the Debentures. Upon the termination of any
Extended Interest Payment Period and the payment of all Deferred Interest then
due, the Company may commence a new Extended Interest Payment Period, subject to
the foregoing requirements. No interest shall be due and payable during an
Extended Interest Payment Period except at the end thereof, but the Company may
prepay at any time all or any portion of the interest accrued during an Extended
Interest Payment Period.
SECTION 2 Notice of Extension.
(a) If the Institutional Trustee is the only registered holder of the
Debentures at the time the Company selects or extends an Extended Interest
Payment Period, the Company shall give written notice to the Regular Trustees
and the Institutional Trustee of its selection of such Extended Interest Payment
Period one Business Day before the earlier of (i) the date on which
Distributions on the Preferred Securities issued by the Trust are payable, or
(ii) the date the Regular Trustees are required to give notice of the record
date, or the date such Distributions are payable, to any applicable
self-regulatory organization or to Holders of the Preferred Securities issued by
the Trust.
(b) If the Institutional Trustee is not the only holder of the
Debentures at the time the Company selects an Extended Interest Payment Period,
the Company shall give the Holders of the Debentures and the Trustee written
notice of its selection of such Extended Interest Payment Period at least 10
Business Days before the earlier of (i) the next succeeding Interest Payment
Date, or (ii) the date the Company is required to give notice of the record or
payment date of such interest payment to any applicable self-regulatory
organization or to Holders of the Debentures.
(c) The quarterly interest period in which any notice is given
pursuant to paragraphs (a) or (b) of this Section 4.2 shall be counted as one of
the 20 quarterly interest periods permitted in the maximum Extended Interest
Payment Period permitted under Section 4.1.
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Section 3 Limitation of Transactions.
If (i) the Company shall exercise its right to defer payment of
interest as provided in Section 4.1 or (ii) there shall have occurred any Event
of Default, as defined in the Indenture, then (a) the Company shall not declare
or pay any dividends on, make any distributions with respect to, or redeem,
purchase, acquire for value or make a liquidation payment with respect to, any
of its capital stock (other than (x) purchases or acquisitions of shares of its
common stock in connection with the satisfaction by the Company of its
obligations under any employee benefit plans or other contractual obligations of
the Company (other than a contractual obligation ranking pari passu with or
junior in right of payment to the Debentures) entered into prior to the date of
issuance of the Debentures, (y) as a result of a reclassification of its capital
stock or the exchange or conversion of one class or series of the Company's
capital stock for another class or series of its capital stock or (z) the
purchase of fractional interests in shares of its capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged) and (b) the Company shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by the Company which rank pari passu with or junior in
right of payment to the Debentures.
ARTICLE V
EXPENSES
SECTION 1 Payment of Expenses.
In connection with the offering, sale and issuance of the Debentures
to the Institutional Trustee and in connection with the sale of the Trust
Securities by the Trust, the Company, in its capacity as borrower with respect
to the Debentures, shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Debentures, including commissions or other compensation to the
underwriters payable pursuant to the Underwriting Agreement and the Pricing
Agreement,
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and compensation of the Trustee under the Indenture in accordance with the
provisions of Section 6.06 of the Indenture;
(b) pay all costs and expenses of the Trust (including, but not
limited to, costs and expenses relating to the organization of the Trust, the
offering, sale and issuance of the Trust Securities (including commissions or
other compensation payable to the underwriters in connection therewith), the
fees and expenses of the Institutional Trustee and the Delaware Trustee, the
costs and expenses relating to the operation of the Trust, including without
limitation, costs and expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and engraving and computing or
accounting equipment, paying agent(s), registrar(s), transfer agent(s),
duplicating, travel and telephone and other telecommunications expenses, costs
and expenses incurred in connection with the acquisition, financing, and
disposition of Trust assets, costs and expenses related to the dissolution of
the Trust and all fees and expenses related to the enforcement by the
Institutional Trustee of the rights of the Holders of the Preferred Securities);
(c) be primarily and fully liable for any indemnification obligations
arising with respect to the Declaration; and
(d) pay any and all taxes (other than United States withholding taxes
attributable to the Trust or its assets) and all liabilities, costs and expenses
with respect to such taxes of the Trust.
Section 2 Payment Upon Resignation or Removal.
Upon termination of this [ ] Supplemental Indenture or the Indenture
or the removal or resignation of the Trustee, unless otherwise stated, the
Company shall pay to the Trustee all amounts accrued to the date of such
termination, removal or resignation. Upon termination of the Declaration or the
removal or resignation of the Delaware Trustee or the Institutional Trustee, as
the case may be, pursuant to Section 5.6 of the Declaration, the Company shall
pay to the Delaware Trustee or the Institutional Trustee, as the case may be,
all amounts accrued to the date of such termination, removal or resignation.
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ARTICLE VI
FORM OF DEBENTURE
SECTION 1 Form of Debenture.
The Debentures and the Trustee's Certificate of Authentication to be
endorsed thereon are to be substantially in the following forms:
(FORM OF FACE OF DEBENTURE)
[IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT This Debenture
is a Global Debenture within the meaning of the Indenture hereinafter referred
to and is registered in the name of a Depositary or a nominee of a Depositary.
This Debenture is exchangeable for Debentures registered in the name of a person
other than the Depositary or its nominee only in the limited circumstances
described in the Indenture, and no transfer of this Debenture (other than a
transfer of this Debenture as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary) may be registered except in limited circumstances.
Unless this Debenture is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the issuer
or its agent for registration of transfer, exchange or payment, and any
Debenture issued is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of The Depository Trust Company and
any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.]
No. CUSIP No. ______________
CITICORP
[ %] JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE ______________15, 2027
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Citicorp, a Delaware corporation (the "Company", which term includes
any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to ______________ or registered assigns,
the principal sum of _____________ Dollars on _____________15, 2027 (the
"Scheduled Maturity Date") (or upon the earlier redemption hereof as further
described herein), and premium, if any, and to pay interest on said principal
sum from __________20, 1997, or from the most recent interest payment date (each
such date, an "Interest Payment Date") to which interest has been paid or duly
provided for, semiannually (subject to deferral as set forth herein) in arrears
on February 15,May 15, August 15 and November 15 of each year commencing
__________15, 1997, at the rate of [ %] per annum until the principal hereof
shall have become due and payable, and on any overdue principal and premium, if
any, and (without duplication and to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at the
same rate per annum compounded quarterly. The amount of interest payable on any
Interest Payment Date shall be computed on the basis of a 360-day year of twelve
30-day months. In the event that any date on which interest is payable on this
Debenture is not a Business Day, then payment of interest payable on such date
will be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date. The interest installment so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the person in whose name this Debenture
(or one or more Predecessor Securities, as defined in said Indenture) is
registered at the close of business on the regular record date for such interest
installment, which shall be the close of business on the business day next
preceding such Interest Payment Date. [IF PURSUANT TO THE PROVISIONS OF THE
INDENTURE THE DEBENTURES ARE NO LONGER REPRESENTED BY A GLOBAL DEBENTURE --
which shall be the close of business on the ____ business day next preceding
such Interest Payment Date.] Any such interest installment not punctually paid
or duly provided for shall forthwith cease to be payable to the registered
Holders on such regular record date and may be paid to the Person in whose name
this Debenture (or one or more Predecessor Securities)
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is registered at the close of business on a special record date to be fixed by
the Trustee for the payment of such defaulted interest, notice whereof shall be
given to the registered Holders of this series of Debentures not less than 10
days prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Debentures may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in the Indenture. The principal of
(and premium, if any) and the interest on this Debenture shall be payable at the
office or agency of the Trustee maintained for that purpose in any coin or
currency of the United States of America that at the time of payment is legal
tender for payment of public and private debts; provided, however, that payment
of interest may be made at the option of the Company by check mailed to the
registered holder at such address as shall appear in the security register.
Notwithstanding the foregoing, so long as the holder of this Debenture is the
Institutional Trustee, the payment of the principal of (and premium, if any) and
interest on this Debenture will be made at such place and to such account as may
be designated by the Institutional Trustee.
Whenever in this Debenture there is mentioned, in any context, the
payment of the principal of or interest on, or in respect of, any Debenture,
such mention shall be deemed to include mention of the payment of Additional
Interest, if any, provided for in Section 2.5 of the Indenture to the extent
that, in such context, Additional Interest is, was or would be payable in
respect thereof pursuant to the provisions herein and therein and express
mention of the payment of Additional Interest (if applicable) in any provisions
hereof shall not be construed as excluding Additional Interest in those
provisions hereof where such express mention is not made.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Indebtedness, and this Debenture is issued
subject to the provisions of the Indenture with respect thereto. Each holder of
this Debenture, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination so
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provided and (c) appoints the Trustee his or her attorney-in-fact for any and
all such purposes. Each holder hereof, by his or her acceptance hereof, hereby
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such holder upon
said provisions.
This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been signed by or on
behalf of the Trustee.
The provisions of this Debenture are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
Dated: ____________, 1997
CITICORP
By:_______________________________
Name:
Title:
Attest:
By:___________________________________
Name:
Title:
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(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein
referred to in the within-mentioned Indenture.
Dated ___________________
Wilmington Trust Company, or Citibank, N.A.,
as Trustee as Authenticating
Agent
By__________________________ By____________________________
Authorized Signatory Authorized Signatory
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Debentures of
the Company (herein sometimes referred to as the "Debentures"), specified in the
Indenture, all issued or to be issued in one or more series under and pursuant
to an Indenture dated as of December 17, 1996, duly executed and delivered
between the Company and Wilmington Trust Company, as Trustee (the "Trustee"), as
supplemented by the [ ]Supplemental Indenture dated as of___________, 1997,
between the Company and the Trustee (the Indenture as so supplemented, the
"Indenture"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the Holders of the Debentures. By the terms of the Indenture, the Debentures are
issuable in series that may vary as to amount, date of maturity, rate of
interest and in other respects as provided in the Indenture. This series of
Debentures is limited in aggregate principal amount as specified in said [____]
Supplemental Indenture.
Upon the occurrence and continuation of a Tax Event the Company shall
have the right, subject to certain conditions set forth in Section 3.1 of the
Indenture, to redeem this Debenture
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prior to ______________ 15, 2002, in whole or in part, at the Redemption Price
within 90 days following the occurrence of such Tax Event. Upon the occurrence
of a Regulatory Capital Event, the Company shall have the right to redeem this
Debenture prior to ____________15, 2002, in whole or in part, at the Redemption
Price within 90 days following the occurrence of such Regulatory Capital Event.
In addition, the Company shall have the right to redeem this Debenture, in whole
or in part, at any time on or after _____________15, 2002, at the Redemption
Price. The "Redemption Price", in the case of any such redemption, will equal
the applicable Redemption Percentage (determined as described below) of the
principal amount of the Debentures, plus accrued interest thereon (including any
Compounded Interest and Additional Interest) to but excluding the date fixed for
redemption.
The Redemption Percentage, in the case of any redemption occurring
prior to ____________ 15, 2002 pursuant to Section 3.2(a), will equal the
applicable percentage set out in the following table if the redemption date
occurs during the 12- month period beginning ___________15 in the year
indicated:
Year Redemption Percentage
- ---- ---------------------
1997.......................................... %
1998..........................................
1999..........................................
2000..........................................
2001..........................................
The Redemption Percentage will be 100% for any redemption on or after
____________ 15, 2002.
The Redemption Price shall be paid prior to 12:00 noon, New York
time, on the date of such redemption or at such earlier time as the Company
determines. Any redemption pursuant to this paragraph will be made upon not less
than 30 days nor more than 60 days notice. If the Debentures are only partially
redeemed by the Company, the Debentures will be redeemed pro rata or by lot or
by any other method utilized by the Trustee; provided that if,
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at the time of redemption, the Debentures are registered as a Global Debenture,
the Depositary shall determine the principal amount of such Debentures held by
each Debentureholder to be redeemed in accordance with its procedures.
In the event of redemption of this Debenture in part only, a new
Debenture or Debentures of this series for the unredeemed portion hereof will be
issued in the name of the holder hereof upon the cancellation hereof.
Notwithstanding the foregoing, any redemption of Debentures by the
Company shall be subject to the prior approval of the Board of Governors of the
Federal Reserve System (the "Federal Reserve"), if such approval is then
required under applicable law or capital guidelines of the Federal Reserve.
In case an Event of Default (as defined in the Indenture) shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Debentures of each series affected at the time
outstanding, as defined in the Indenture, to execute supplemental indentures for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Debentures; provided,
however, that no such supplemental indenture shall (i) extend the fixed maturity
of any Debentures of any series, or reduce the principal amount thereof
(including in the case of a discounted Security the amount payable thereon in
the event of acceleration or the amount provable in bankruptcy) or any
redemption premium thereon, or reduce the rate or extend the time of payment of
interest thereon, or make the principal of, or interest or premiums, if any, on
the Debentures payable in any coin or currency other than that provided in the
Debentures, or impair or affect the right of any holder of Debentures to
institute suit for the payment thereof or the right of prepayment, if any, at
the option of the
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holder, without the consent of the holder of each Debenture so affected, or (ii)
reduce the aforesaid percentage of Debentures, the Holders of which are required
to consent to any such supplemental indenture, without the consent of the
Holders of each Debenture then outstanding and affected thereby. The Indenture
also contains provisions permitting the Holders of a majority in aggregate
principal amount of the Debentures of any series at the time outstanding
affected thereby, on behalf of all of the Holders of the Debentures of such
series, to waive any past default in the performance of any of the covenants
contained in the Indenture, or established pursuant to the Indenture with
respect to such series, and its consequences, except a default in the payment of
the principal of or premium, if any, or interest on any of the Debentures of
such series. Any such consent or waiver by the registered holder of this
Debenture (unless revoked as provided in the Indenture) shall be conclusive and
binding upon such holder and upon all future Holders and owners of this
Debenture and of any Debenture issued in exchange heretofore or in place hereof
(whether by registration of transfer or otherwise), irrespective of whether or
not any notation of such consent or waiver is made upon this Debenture.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Debenture at the time and place and at the
rate and in the money herein prescribed.
The Company shall have the right, at any time and from time to time
during the term of the Debentures, to defer payments of interest by extending
the interest payment period of such Debentures for a period not exceeding 20
consecutive quarterly interest periods, including the first such quarterly
period during such extension period, and not to extend beyond the Scheduled
Maturity Date of the Debentures (an "Extended Interest Payment Period"), at the
end of which period the Company shall pay all interest then accrued and unpaid
(together with interest thereon at the rate specified for the Debentures to the
extent that payment of such interest is enforceable under applicable law). In
the event that the Company exercises its right to defer interest payments, then,
prior to the payment of all accrued interest on outstanding Debentures, (a) the
Company shall not
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declare or pay any dividends on, make any distributions with respect to, or
redeem, purchase, acquire for value or make a liquidation payment with respect
to, any of its capital stock (other than (i) purchases or acquisitions of shares
of the Company's Common Stock in connection with the satisfaction by the Company
of its obligations under any employee benefit plans or other contractual
obligations of the Company (other than a contractual obligation ranking pari
passu with or junior in right of payment to the Debentures) entered into prior
to the date of issuance of the Debentures, (ii) as a result of a
reclassification of the Company's capital stock or the exchange or conversion of
one class or series of the Company's capital stock for another class or series
of the Company's capital stock or (iii) the purchase of fractional interests in
shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock of the Company or the security being converted
or exchanged) and (b) the Company shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities issued by the Company that rank pari passu with or junior in right of
payment to the Debentures. Before the termination of any such Extended Interest
Payment Period, the Company may further defer payments of interest by further
extending such Extended Interest Payment Period, provided that such Extended
Interest Payment Period, together with all such previous and further extensions
within such Extended Interest Payment Period, shall not exceed 20 consecutive
quarterly interest periods, including the first quarterly period during such
Extended Interest Payment Period, or extend beyond the Scheduled Maturity Date
of the Debentures. Upon the termination of any such Extended Interest Payment
Period and the payment of all accrued and unpaid interest and any additional
amounts then due, the Company may commence a new Extended Interest Payment
Period, subject to the foregoing requirements.
As provided in the Indenture and subject to certain limitations
therein set forth, this Debenture is transferable by the registered holder
hereof on the security register of the Company, upon surrender of this Debenture
for registration of transfer at the office or agency of the Trustee in the City
and State of New York accompanied by a written instrument or instruments of
transfer in form satisfactory to the Company or the Trustee duly executed by the
registered holder hereof or his
23
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attorney duly authorized in writing, and thereupon one or more new Debentures of
authorized denominations and for the same aggregate principal amount and series
will be issued to the designated transferee or transferees. No service charge
will be made for any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and the Security Registrar
may deem and treat the registered holder hereof as the absolute owner hereof
(whether or not this Debenture shall be overdue and notwithstanding any notice
of ownership or writing hereon made by anyone other than the Security Registrar)
for the purpose of receiving payment of or on account of the principal hereof
and premium, if any, and interest due hereon and for all other purposes, and
neither the Company nor the Trustee nor any paying agent nor any Security
Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
The Debentures of this series are issuable only in registered form
without coupons in denominations of $25 and any integral multiple thereof. This
Global Debenture is exchangeable for Debentures in definitive form only under
certain limited circumstances set forth in the Indenture. Debentures of this
series so issued are issuable only in registered form without coupons in
denominations of $25 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations herein and therein set forth,
Debentures of this series so issued are exchangeable for a like aggregate
principal
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amount of Debentures of this series of a different authorized denomination, as
requested by the holder surrendering the same.
All terms used in this Debenture that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE
AND THE DEBENTURES WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF.
ARTICLE VII
ORIGINAL ISSUE OF DEBENTURES
SECTION 1 Original Issue of Debentures.
Debentures in the aggregate principal amount of $_____________ may,
upon execution of this [ ] Supplemental Indenture, be executed by the Company
and delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Debentures to or upon the written order of the
Company, signed by its Chairman, its Vice Chairman, its President, or any Vice
President and its Treasurer or an Assistant Treasurer, without any further
action by the Company.
ARTICLE VIII
MISCELLANEOUS
SECTION 1 Ratification of Indenture.
The Indenture, as supplemented by this [ ] Supplemental Indenture, is
in all respects ratified and confirmed, and this [ ] Supplemental Indenture
shall be deemed part of the Indenture in the manner and to the extent herein and
therein provided.
SECTION 2 Trustee Not Responsible for Recitals.
The recitals herein contained are made by the Company and not by the
Trustee, and the Trustee assumes no responsibility for the correctness thereof.
The Trustee makes no representation
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as to the validity or sufficiency of this First Supplemental Indenture.
SECTION 3 Governing Law.
This [ ]Supplemental Indenture and each Debenture shall be deemed to
be a contract made under the internal laws of the State of New York, and for all
purposes shall be construed in accordance with the laws of said State.
SECTION 4 Separability.
In case any one or more of the provisions contained in this [ ]
Supplemental Indenture or in the Debentures shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this [ ] Supplemental
Indenture or of the Debentures, but this [ ] Supplemental Indenture and the
Debentures shall be construed as if such invalid or illegal or unenforceable
provision had never been contained herein or therein.
SECTION 5 Counterparts.
This [ ]Supplemental Indenture may be executed in any number of
counterparts each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this [ ]
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, on the date or dates indicated in the
acknowledgements and as of the day and year first above written.
CITICORP
By:________________________________
Name:
Title:
Attest:
By:__________________________
WILMINGTON TRUST COMPANY,
as Trustee
By:_______________________________
Name:
Title:
Attest:
By:_________________________
27
============================================
PREFERRED SECURITIES GUARANTEE AGREEMENT
Citicorp Capital [X] [XI] [XII] [XIII] [XIV]
Dated as of ___________________, 1997
============================================
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation............................... 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application............................. 5
SECTION 2.2 Lists of Holders of Securities............................... 6
SECTION 2.3 Reports by the Preferred Guarantee
Trustee...................................................... 6
SECTION 2.4 Periodic Reports to Preferred Guarantee
Trustee...................................................... 6
SECTION 2.5 Evidence of Compliance with Conditions
Precedent.................................................... 6
SECTION 2.6 Events of Default; Waiver.................................... 7
SECTION 2.7 Event of Default; Notice..................................... 7
SECTION 2.8 Conflicting Interests........................................ 7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred
Guarantee Trustee............................................ 8
SECTION 3.2 Certain Rights of Preferred Guarantee
Trustee...................................................... 10
SECTION 3.3 Not Responsible for Recitals or Issuance
of Preferred Securities Guarantee............................ 12
SECTION 3.4 Compensation and Reimbursement............................... 12
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility..................... 13
SECTION 4.2 Appointment, Removal and Resignation of
Preferred Guarantee Trustee.................................. 14
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee.................................................... 15
SECTION 5.2 Waiver of Notice and Demand.................................. 15
SECTION 5.3 Obligations Not Affected..................................... 15
SECTION 5.4 Rights of Holders............................................ 16
SECTION 5.5 Guarantee of Payment......................................... 17
SECTION 5.6 Subrogation.................................................. 17
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Page
----
SECTION 5.7 Independent Obligations...................................... 17
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions................................... 17
SECTION 6.2 Ranking...................................................... 18
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.................................................. 18
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation.................................................. 19
SECTION 8.2 Indemnification.............................................. 19
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns....................................... 20
SECTION 9.2 Amendments................................................... 20
SECTION 9.3 Notices...................................................... 20
SECTION 9.4 Benefit...................................................... 21
SECTION 9.5 Governing Law................................................ 21
ii
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PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"),
dated as of ___________________1997, is executed and delivered by Citicorp, a
Delaware corporation (the "Guarantor"), and Wilmington Trust Company, a national
banking association duly organized and existing under the laws of the United
States, as trustee (the "Preferred Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Preferred Securities (as
defined herein) of Citicorp Capital [X] [XI] [XII] [XIII] [XIV] , a Delaware
statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust
(the "Declaration"), dated as of_________________1997, among the trustees of the
Issuer named therein, the Guarantor, as sponsor, and the holders from time to
time of undivided beneficial interests in the assets of the Issuer, the Issuer
is issuing on the date hereof _____________ preferred securities, having an
aggregate liquidation amount of $______________, designated the ______%
Preferred Securities (the "Preferred Securities");
WHEREAS, as incentive for the Holders to acquire the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders of the Preferred Securities the Guarantee Payments (as defined herein)
and to make certain other payments on the terms and conditions set forth herein.
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee") in substantially identical terms
to this Preferred Securities Guarantee for the benefit of the holders of the
Common Securities (as defined herein), except that if an Event of Default (as
defined in the Indenture), has occurred and is continuing, the rights of holders
of the Common Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated to the rights of Holders of Preferred
Securities to receive Guarantee Payments under this Preferred Securities
Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
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ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1 Definitions and Interpretation
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) Capitalized terms used in this Preferred Securities Guarantee but
not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) a term defined anywhere in this Preferred Securities Guarantee has
the same meaning throughout;
(c) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities
Guarantee as modified, supplemented or amended from time to time;
(d) all references in this Preferred Securities Guarantee to Articles
and Sections are to Articles and Sections of this Preferred
Securities Guarantee, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Preferred Securities Guarantee, unless otherwise
defined in this Preferred Securities Guarantee or unless the context
otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a day on which federal or
state banking institutions in the Borough of Manhattan, The City of New York,
are authorized or obligated by law, executive order or regulation to close.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
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"Corporate Trust Office" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at 101 Barclay Street, 21 West,
New York, New York 10286.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Debentures" means the series of junior subordinated debt securities
of the Guarantor designated the_______% Junior Subordinated Deferrable Interest
Debentures due ________15, 2027 held by the Institutional Trustee (as defined in
the Declaration) of the Issuer.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions (as defined
in the Declaration) that are required to be paid on such Preferred Securities to
the extent the Issuer shall have funds available therefor, (ii) the redemption
price, including all accrued and unpaid Distributions to the date of redemption
(the "Redemption Price") to the extent the Issuer has funds available therefor,
with respect to any Preferred Securities called for redemption by the Issuer,
and (iii) upon a voluntary or involuntary dissolution, winding-up or termination
of the Issuer (other than in connection with the distribution of Debentures to
the Holders in exchange for Preferred Securities as provided in the
Declaration), the lesser of (a) the aggregate of the liquidation amount and all
accrued and unpaid Distributions on the Preferred Securities to the date of
payment, to the extent the Issuer shall have funds available therefor, and (b)
the amount of assets of the Issuer remaining available for distribution to
Holders in liquidation of the Issuer (in either case, the "Liquidation
Distribution"). If an Event of Default (as defined in the Indenture) has
occurred and is continuing, no Guarantee Payments under the Common Securities
Guarantee with respect to the Common Securities shall be made until the Holders
of Preferred Securities shall be paid in full the Guarantee Payments to which
they are entitled under this Preferred Securities Guarantee.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Preferred
Securities have given any
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request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any
Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee or of any Affiliate of
the Preferred Guarantee Trustee.
"Indenture" means the Indenture dated as of December 17, 1996, among
the Guarantor (the "Debenture Issuer") and Wilmington Trust Company, as trustee,
and any indenture supplemental thereto pursuant to which certain subordinated
debt securities of the Debenture Issuer are to be issued to the Property Trustee
of the Issuer.
"Majority in liquidation amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than 50% of the liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date upon
which the voting percentages are determined) of all Preferred Securities.
"Officers' Certificate" means a certificate signed by the Chairman,
a Vice Chairman, a Vice President, the Chief Auditor, the Secretary or an
Assistant Secretary of the Guarantor. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Preferred Securities Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
4
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"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Guarantee Trustee" means Wilmington Trust Company, a
national banking association duly organized and existing under the laws of the
United States, until a Successor Preferred Guarantee Trustee has been appointed
and has accepted such appointment pursuant to the terms of this Preferred
Securities Guarantee and thereafter means each such Successor Preferred
Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee Trustee, including any vice president, any assistant vice president,
any assistant secretary, the treasurer, any assistant treasurer or other officer
of the Corporate Trust Office of the Preferred Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
"Trust Securities" means the Common Securities and the Preferred
Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 1 Trust Indenture Act; Application
(a) This Preferred Securities Guarantee is subject to the provisions
of the Trust Indenture Act that are required to be part of this Preferred
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions; and
(b) if and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts
5
<PAGE>
with the duties imposed by Section 310 to 317, inclusive, of the Trust Indenture
Act, such imposed duties shall control.
SECTION 2 Lists of Holders of Securities
(a) The Guarantor shall provide the Preferred Guarantee Trustee with
a list, in such form as the Preferred Guarantee Trustee may reasonably require,
of the names and addresses of the Holders of the Preferred Securities ("List of
Holders") as of such date, (i) within one Business Day after January 1 and June
30 of each year, and (ii) at any other time within 30 days of receipt by the
Guarantor of a written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Preferred Guarantee Trustee
provided, that the Guarantor shall not be obligated to provide such List of
Holders at any time the List of Holders does not differ from the most recent
List of Holders given to the Preferred Guarantee Trustee by the Guarantor. The
Preferred Guarantee Trustee may destroy any List of Holders previously given to
it on receipt of a new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
SECTION 3 Reports by the Preferred Guarantee Trustee
Within 60 days after May 15 of each year, the Preferred Guarantee
Trustee shall provide to the Holders of the Preferred Securities such reports as
are required by Section 313 of the Trust Indenture Act, if any, in the form and
in the manner provided by Section 313 of the Trust Indenture Act. The Preferred
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
SECTION 4 Periodic Reports to Preferred Guarantee Trustee
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
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<PAGE>
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers' Certificate.
SECTION 6 Events of Default; Waiver
The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 7 Event of Default; Notice
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Preferred Securities, notices of all Events of
Default actually known to a Responsible Officer of the Preferred Guarantee
Trustee, unless such defaults have been cured before the giving of such notice,
provided, that, the Preferred Guarantee Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the Preferred
Guarantee Trustee in good faith determines that the withholding of such notice
is in the interests of the Holders of the Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Preferred Guarantee Trustee shall
have received written notice, or of which a Responsible Officer of the Preferred
Guarantee Trustee charged with the administration of the Declaration shall have
obtained actual knowledge.
SECTION 8 Conflicting Interests
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 1 Powers and Duties of the Preferred Guarantee Trustee
(a) This Preferred Securities Guarantee shall be held by the
Preferred Guarantee Trustee for the benefit of the Holders
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of the Preferred Securities, and the Preferred Guarantee Trustee shall not
transfer this Preferred Securities Guarantee to any Person except a Holder of
Preferred Securities exercising his or her rights pursuant to Section 5.4(b) or
to a Successor Preferred Guarantee Trustee on acceptance by such Successor
Preferred Guarantee Trustee of its appointment to act as Successor Preferred
Guarantee Trustee. The right, title and interest of the Preferred Guarantee
Trustee shall automatically vest in any Successor Preferred Guarantee Trustee,
and such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Preferred Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer
of the Preferred Guarantee Trustee has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders of the Preferred Securities.
(c) The Preferred Guarantee Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Preferred Securities Guarantee, and no implied covenants shall be
read into this Preferred Securities Guarantee against the Preferred Guarantee
Trustee. In case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6) and is actually known to a Responsible Officer
of the Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall
exercise such of the rights and powers vested in it by this Preferred Securities
Guarantee, and use the same degree of care and skill in its exercise thereof, as
a prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Preferred Guarantee
Trustee shall be determined solely by the express provisions of this
Preferred Securities Guarantee, and the Preferred Guarantee Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Preferred
Securities Guarantee, and no implied
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covenants or obligations shall be read into this Preferred
Securities Guarantee against the Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Preferred Guarantee Trustee and conforming to the
requirements of this Preferred Securities Guarantee; but in the case
of any such certificates or opinions that by any provision hereof
are specifically required to be furnished to the Preferred Guarantee
Trustee, the Preferred Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Preferred Guarantee Trustee, unless it shall be proved that the Preferred
Guarantee Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the Preferred Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority
in liquidation amount of the Preferred Securities relating to the time,
method and place of conducting any proceeding for any remedy available to
the Preferred Guarantee Trustee, or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred
Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall
require the Preferred Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if the
Preferred Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably assured to
it under the terms of this Preferred Securities Guarantee or indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee, against such
risk or liability is not reasonably assured to it.
SECTION 2 Certain Rights of Preferred Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
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(i) The Preferred Guarantee Trustee may conclusively rely, and shall
be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be genuine
and to have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the Preferred Guarantee Trustee (unless other evidence
is herein specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the
Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to see to
any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The Preferred Guarantee Trustee may consult with counsel of its
selection, and the advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and
in accordance with such advice or opinion. Such counsel may be counsel to
the Guarantor or any of its Affiliates and may include any of its
employees. The Preferred Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of this Preferred
Securities Guarantee from any court of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Preferred
Securities Guarantee at the request or direction of any Holder, unless
such Holder shall have provided to the Preferred Guarantee Trustee such
security and indemnity, reasonably satisfactory to the Preferred Guarantee
Trustee, against the costs, expenses (including attorneys' fees and
expenses and the expenses of the Preferred Guarantee Trustee's agents,
nominees or custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such
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reasonable advances as may be requested by the Preferred Guarantee
Trustee; provided that, nothing contained in this Section 3.2(a)(vi) shall
be taken to relieve the Preferred Guarantee Trustee, upon the occurrence
of an Event of Default, of its obligation to exercise the rights and
powers vested in it by this Preferred Securities Guarantee.
(vii) The Preferred Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Preferred Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by
or through agents, nominees, custodians or attorneys, and the Preferred
Guarantee Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
(ix) Any action taken by the Preferred Guarantee Trustee or its
agents hereunder shall bind the Holders of the Preferred Securities, and
the signature of the Preferred Guarantee Trustee or its agents alone shall
be sufficient and effective to perform any such action. No third party
shall be required to inquire as to the authority of the Preferred
Guarantee Trustee to so act or as to its compliance with any of the terms
and provisions of this Preferred Securities Guarantee, both of which shall
be conclusively evidenced by the Preferred Guarantee Trustee's or its
agent's taking such action.
(x) Whenever in the administration of this Preferred Securities
Guarantee the Preferred Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Preferred Guarantee Trustee (i) may
request instructions from the Holders of a Majority in liquidation amount
of the Preferred Securities, (ii) may refrain from enforcing such remedy
or right or taking such other action until such instructions are received,
and (iii) shall be fully and conclusively protected in relying on or
acting in accordance with such instructions.
(xi) The Preferred Guarantee Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to
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be authorized or within the discretion or rights or powers conferred upon
it by this Preferred Securities Guarantee.
(b) No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred Guarantee Trustee to
perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall be illegal, or
in which the Preferred Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to exercise
any such right, power, duty or obligation. No permissive power or authority
available to the Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3 Not Responsible for Recitals or Issuance of Preferred Securities
Guarantee
The recitals contained in this Preferred Securities Guarantee shall
be taken as the statements of the Guarantor, and the Preferred Guarantee Trustee
does not assume any responsibility for their correctness. The Preferred
Guarantee Trustee makes no representation as to the validity or sufficiency of
this Preferred Securities Guarantee.
SECTION 4 Compensation and Reimbursement
The Guarantor agrees:
(a) To pay the Preferred Guarantee Trustee from time to time such
reasonable compensation as the Guarantor and the Preferred Guarantee Trustee
shall from time to time agree in writing for all services rendered by it
hereunder (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust); and
(b) Except as otherwise expressly provided herein, to reimburse the
Preferred Guarantee Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Preferred Guarantee Trustee
in accordance with the provisions of this Preferred Securities Guarantee
(including the reasonable compensation and expenses of its agents and counsel),
except any such expense, disbursement or advance that may be attributable to its
negligence or bad faith.
The provisions of this Section shall survive the termination of this
Preferred Securities Guarantee.
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ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 1 Preferred Guarantee Trustee; Eligibility
(a) There shall at all times be a Preferred Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
50 million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 4.1(a)(ii), the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
(b) If at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 2 Appointment, Removal and Resignation of Preferred Guarantee Trustee
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may
be appointed or removed without cause at any time by the Guarantor except during
an event of default.
(b) The Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
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(c) The Preferred Guarantee Trustee appointed to office shall hold
office until a Successor Preferred Guarantee Trustee shall have been appointed
or until its removal or resignation. The Preferred Guarantee Trustee may resign
from office (without need for prior or subsequent accounting) by an instrument
in writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Preferred Guarantee Trustee and
delivered to the Guarantor and the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery of an instrument of removal or resignation, the Preferred
Guarantee Trustee resigning or being removed may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or
removal or resignation of the Preferred Guarantee Trustee pursuant to this
Section 4.2, the Guarantor shall pay to the Preferred Guarantee Trustee all
amounts accrued to the date of such termination, removal or resignation.
(g) The Guarantor shall give notice of each resignation and each
removal of the Preferred Guarantee Trustee and each appointment of a Successor
Preferred Guarantee Trustee to all Holders in the manner provided in Section 9.3
hereof. Each notice shall include the name of the Successor Preferred Guarantee
Trustee and the address of its corporate trust office.
ARTICLE V
GUARANTEE
SECTION 1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full
to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
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payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
SECTION 2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or
any portion of the Distributions, Redemption Price, Liquidation Distribution or
any other sums payable under the terms of the Preferred Securities or the
extension of time for the performance of any other obligation under, arising out
of, or in connection with, the Preferred Securities (other than an extension of
time for payment of Distributions, Redemption Price, Liquidation Distribution or
other sum payable that results from the extension of any interest payment period
on the Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Issuer or any of the assets of
the Issuer;
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(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.3 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting of
any proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of this Preferred Securities Guarantee or to direct the exercise of any
trust or power conferred upon the Preferred Guarantee Trustee under this
Preferred Securities Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce such
Preferred Securities Guarantee, any Holder of Preferred Securities may institute
a legal proceeding directly against the Guarantor to enforce the Preferred
Guarantee Trustee's rights under this Preferred Securities Guarantee, without
first instituting a legal proceeding against the Issuer, the Preferred Guarantee
Trustee or any other person or entity. Notwithstanding the foregoing, if the
Company has failed to make a guarantee payment, a holder of Preferred Securities
may directly institute a proceeding against the Company for enforcement of the
Preferred Securities Guarantee for such payment. The Guarantor waives any right
or remedy to require that any action be brought first against the Issuer or any
other person or entity before proceeding directly against the Guarantor.
SECTION 5 Guarantee of Payment
This Preferred Securities Guarantee creates a guarantee of payment
and not of collection.
SECTION 6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the
Holders against the Issuer in respect of any amounts paid to such Holders by the
Guarantor under this
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Preferred Securities Guarantee; provided, however, that the Guarantor shall not
(except to the extent required by mandatory provisions of law) be entitled to
enforce or exercise any right that it may acquire by way of subrogation or any
indemnity, reimbursement or other agreement, in all cases as a result of payment
under this Preferred Securities Guarantee, if, at the time of any such payment,
any amounts are due and unpaid under this Preferred Securities Guarantee. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 1 Limitation of Transactions
So long as any Preferred Securities remain outstanding, if there
shall have occurred an Event of Default or an event of default under the
Declaration or the Guarantor has exercised its option to defer interest payments
on the Debentures, then (a) the Guarantor shall not declare or pay any dividends
on, make any distribution with respect to, or redeem, purchase, acquire for
value or make a liquidation payment with respect to any of its capital stock
(other than (i) purchases or acquisitions of shares of Common Stock in
connection with the satisfaction by the Guarantor of its obligations under any
employee benefit plans or other contractual obligations (other than a
contractual obligation ranking pari passu with or junior in right of payment to
the Debentures) entered into prior to the date of issuance of the Debentures,
(ii) as a result of a reclassification of the Guarantor's capital stock or the
exchange or conversion of one class or series of the Guarantor's capital stock
for another class or series of the Guarantor's capital stock or (iii) the
purchase of fractional interests in shares of the Guarantor's capital stock
pursuant to the conversion or exchange provisions of such capital stock of the
Guarantor or the security being converted or exchanged) and (b) the Guarantor
shall not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities issued by the Guarantor
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that rank pari passu with or junior in right of payment to the Debentures.
SECTION 2 Ranking
This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor, (ii) pari passu with the most
senior preferred or preference stock now or hereafter issued by the Guarantor
and with any guarantee now or hereafter entered into by the Guarantor in respect
of any preferred or preference stock of any Affiliate of the Guarantor, and
(iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 1 Termination
This Preferred Securities Guarantee shall terminate (i) upon full
payment of the Redemption Price of all Preferred Securities, (ii) upon the
distribution of the Debentures to the Holders of all of the Preferred Securities
or (iii) upon full payment of the amounts payable in accordance with the
Declaration upon liquidation of the Issuer. Notwithstanding the foregoing, this
Preferred Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder of Preferred
Securities must restore payment of any sums paid under the Preferred Securities
or under this Preferred Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 1 Exculpation
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith in accordance with this
Preferred Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Preferred Securities Guarantee or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful misconduct
with respect to such acts or omissions.
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(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders of Preferred Securities
might properly be paid.
SECTION 2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for, and
to hold each Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 8.2 shall survive the termination of this
Preferred Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 1 Successors and Assigns
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding.
SECTION 2 Amendments
This Preferred Securities Guarantee may be amended only by an
instrument in writing signed by the Guarantor, provided that, except with
respect to any changes that do not adversely affect the rights of Holders (in
which case no consent of Holders will be required), this Preferred Securities
Guarantee may only be amended with the prior approval of the Holders of at least
a Majority in liquidation amount (including the stated amount that would be paid
on redemption, liquidation or otherwise, plus accrued and unpaid Distributions
to the date upon which the voting percentages are determined) of all the
outstanding
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Preferred Securities; and provided, further, that no amendment that affects the
rights, powers, duties, obligations or immunities of the Preferred Guarantee
Trustee shall be effective unless approved in writing by the Preferred Guarantee
Trustee. The provisions of Section 12.2 of the Declaration with respect to
meetings of Holders of the Securities apply to the giving of such approval.
SECTION 3 Notices
All notices provided for in this Preferred Securities Guarantee
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the
Preferred Securities):
Wilmington Trust Company
Rodney Square North
9th Floor
1100 North Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Trustee
Administration
Telecopy: (302) 651-8882
(b) If given to the Guarantor, at the Guarantor's mailing address
set forth below (or such other address as the Guarantor may give notice of to
the Holders of the Preferred Securities):
Citibank, N.A.
Office of Corporate Finance
153 East 53rd Street, 6th floor
New York, New York 10043
Attention: Gregory C. Ehlke, Vice President
Telecopy: (212) 527-2765
(c) If given to any Holder of Preferred Securities, at the address
set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
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SECTION 4 Benefit
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
SECTION 5 Governing Law
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
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THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and
year first above written.
CITICORP, as Guarantor
By:_________________________
Name:
Title:
WILMINGTON TRUST COMPANY, as
Preferred Guarantee Trustee
By:_________________________
Name:
Title:
22
The Board of Directors
Citicorp:
We consent to the incoporation by reference of our report dated January 16, 1996
relating to the consolidated balance sheets of Citicorp and subsidiaries as of
December 31, 1995 and 1994, the related consolidated statements of income,
changes in stockholders' equity, and cash flows for each of the years in the
three-year period ended December 31, 1995, and 1994, in the Registration
Statement on Form S-4, and to the reference to our firm under the heading
"Experts" in the Registration Statement. Our report with respect to these
consolidated financial statements, which contains an added explanatory
paragraph, is included in the 1995 Citicorp Annual Report and Form 10-K.
February 5, 1997
Exhibit 24
A power of attorney in the following form has been executed by each director of
Citicorp.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned Director and/or
Officer of CITICORP, a Delaware corporation, and/or CITIBANK, N.A., a national
association hereby constitutes and appoints each of GREGORY C. EHLKE, PETER M.
GALLANT, ANN M. GOODBODY, JOHN F. RICE and MARTIN A. WATERS his true and lawful
attorney and agent, in the name and on behalf of the undersigned, to do any and
all acts and things in connection with the registration statement dated the date
hereof (the "Registration Statement") to be filed with the United States
Securities and Exchange Commission or the Office of the Comptroller of the
Currency, including specifically, but without limiting the generality of the
foregoing, the power and authority to execute the Registration Statement in the
name of the undersigned in his capacity as Director and/or Officer of Citicorp
and/or Citibank, N.A., any and all amendments, including post-effective
amendments, to the Registration Statement, any and all documents and instruments
filed as part of or in connection with the Registration Statement or amendments
thereto, any and all documents and instruments which the said attorney and agent
may deem necessary or advisable to enable Citicorp and/or Citibank, N.A. to
comply with the Securities Act of 1933, as amended, the Securities Exchange Act
of 1934, as amended, and any rules and regulations and requirements of the
United States Securities and Exchange Commission in respect thereof, or with any
rules and regulations of the Office of the Comptroller of the Currency, and any
and all documents and instruments which the said attorney and agent may deem
necessary or advisable to enable Citicorp and/or Citibank, N.A. to comply with
the securities or other similar laws of jurisdictions outside of the United
States of America in respect thereof; and
HEREBY RATIFIES AND CONFIRMS all that the said attorneys and agents, or
any of them, has done, shall do or cause to be done by virtue hereof; and
HEREBY REVOKES all prior powers of attorney relating to the foregoing
acts.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand.
Dated: February 5, 1997
_________________________
Name:
Title: Director
