SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
CITICORP
.................................................................
(Name of Registrant as Specified In Its Charter)
.................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
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2) Aggregate number of securities to which transaction
applies:
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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it was
determined):
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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3) Filing Party:
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4) Date Filed:
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CITIBANK [Logo]
[Graphic Omitted]
CITICORP PROXY STATEMENT
NOTICE OF 1998
ANNUAL MEETING OF STOCKHOLDERS
& PROXY STATEMENT
Registered stockholders may be asked for identification. If you are a beneficial
owner of Citicorp stock held by a bank, broker or investment plan (in "street
name"), you will need proof of ownership to be admitted to the meeting. A recent
brokerage statement or letter from the broker or bank are examples of proof of
ownership.
<PAGE>
CITICORP [Logo]
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Citicorp John S. Reed
399 Park Avenue Chairman
New York, New York 10043
March 9, 1998
Dear Stockholder:
You are cordially invited to the Annual Meeting of Stockholders of Citicorp.
It will be held on Tuesday, April 21, 1998, at 9:00 A.M. (New York City time) in
the auditorium at Citicorp headquarters at 399 Park Avenue in New York City.
We urge you to attend, if at all possible. We in Citicorp's management consider
the Annual Meeting an excellent opportunity for us to discuss your corporation's
progress with you in person. If you cannot attend, please be sure to vote your
preferences on the enclosed proxy card promptly.
Whether in person or by proxy, it is important that your shares be voted. The
participation of the owners of the business in its affairs is an essential
ingredient of Citicorp's vitality. This year, record holders of Citicorp shares
can vote their shares more conveniently on the Internet or by using a toll-free
telephone number. Instructions for using these new services are set forth on the
enclosed proxy card. Of course, you may continue to vote your shares by sending
in your marked proxy card by mail.
Sincerely,
/s/ John S. Reed
<PAGE>
CITICORP [Logo]
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Date: Tuesday, April 21, 1998
Time: 9:00 A.M. (New York City time)
Place: 399 Park Avenue
New York, New York 10043
(53rd Street and Park Avenue)
At the Annual Meeting, the following proposals are on the agenda for action by
the stockholders:
o To elect fifteen directors to hold office until the 1999 Annual Meeting and
until the election and qualification of their successors;
o To ratify the selection of KPMG Peat Marwick LLP as independent auditors;
o To act upon certain stockholder proposals; and
o To transact such other business as may properly come before the meeting.
It is important that your shares be voted. Please vote as soon as possible by
telephone, on the Internet or by completing the proxy card and returning it in
the enclosed envelope. If you decide to attend the meeting in person, you can
withdraw your proxy and vote at that time. Voting is by secret ballot.
Stockholders of record at the close of business (5:00 P.M., New York City time)
on February 20, 1998 are entitled to one vote for each share held. A list of
these stockholders will be available for inspection for ten days preceding the
meeting at the office of the Assistant Secretary of Citicorp at 399 Park Avenue,
New York, New York 10043, and will also be available for inspection at the
meeting itself.
By order of the Board of Directors,
/s/ Charles E. Long
Charles E. Long
Vice Chairman and Secretary
<PAGE>
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Citicorp (the 'Board'). These proxies will
be voted at the Annual Meeting of Stockholders of Citicorp on Tuesday, April 21,
1998. Holders of common stock of record at the close of business (5:00 P.M., New
York City time) on February 20, 1998 are entitled to one vote for each share
held. On that date there were 451,800,715 shares of Citicorp common stock
outstanding and eligible to vote. This Proxy Statement and Form of Proxy are
first being sent to stockholders on March 9, 1998.
I. ELECTION OF DIRECTORS
Fifteen nominees have been proposed by the Committee on Directors and
approved by the Board for election as directors of Citicorp. The affirmative
vote of a plurality of the votes cast at the Annual Meeting by holders of common
stock entitled to vote thereon is required for the election of each nominee as a
director of Citicorp.
The following information with respect to each nominee is set forth below:
name, age, the number of shares of Citicorp common stock beneficially owned by
the nominee as of January 31, 1998, the year in which the nominee became a
director of Citicorp, principal occupation, business experience, the standing
committees of the Board of which the nominee is a member, the names of other
companies of which the nominee is a director and certain other activities of the
nominee.
[Photo]
Alain J.P. Belda
54
1,328 shares
1997
President and Chief Operating Officer
Aluminum Company of America (Alcoa)
o Joined Alcoa -- 1969
o President, Alcoa Aluminio SA (Brazil) -- 1979 to
1994
o Vice President -- 1982 to 1994
o President, Alcoa (Latin America) -- 1991 to 1994
o Executive Vice President -- 1994 to 1995
o Vice Chairman -- 1995 to 1997
o President and Chief Operating Officer -- 1997
o Committees: Citibank Consulting
o Other Directorships: Cooper Industries, Inc.
1
<PAGE>
[Photo]
D. Wayne Calloway
62
3,987 shares
1988
Former Chairman and Chief Executive Officer
PepsiCo, Inc.
o Joined PepsiCo, Inc. -- 1967
o President and Chief Operating Officer, Frito-Lay,
Inc. -- 1976
o Chairman of the Board and Chief Executive
Officer, Frito-Lay, Inc. -- 1978
o Director of PepsiCo, Inc. -- 1983
o Executive Vice President and Chief Financial
Officer, PepsiCo, Inc. -- 1983
o President and Chief Operating Officer -- 1985
o Chairman and Chief Executive Officer -- 1986 to
1996
o Chairman -- 1996 to 1997
o Committees: Directors, Personnel and Subsidiaries
and Capital
o Other Directorships: Citibank, N.A., Exxon
Corporation and General Electric Company
o Other Activities: The Business Council and Wake
Forest University (Trustee)
[Photo]
Paul J. Collins
61
809,293 shares(1)
1985
Vice Chairman
Citicorp and Citibank, N.A.
o Joined Citibank, N.A. -- 1961
o Head, Investment Bank -- 1982
o Senior Corporate Officer for North America/Chief
Planning Officer -- 1985
o Vice Chairman -- 1988
o Committees: Executive (ex-officio) and
Subsidiaries and Capital (Chairman)
o Other Directorships: Citibank, N.A. and
Kimberly-Clark Corporation
(1) Includes 613,097 shares which Mr. Collins has
the right to acquire within 60 days pursuant to
employee benefit plans.
2
<PAGE>
[Photo]
Kenneth T. Derr
61
8,257 shares
1987
Chairman and Chief Executive Officer
Chevron Corporation
o Joined Chevron Corporation -- 1960
o Assistant to the President -- 1969
o Vice President -- 1972
o President and Chief Executive Officer, Chevron,
USA Inc. -- 1979 to 1984
o Director, Chevron Corporation -- 1981
o Vice Chairman -- 1985 to 1988
o Chairman and Chief Executive Officer -- 1989
o Committees: Executive, Personnel, Subsidiaries
and Capital and Citibank Consulting
o Other Directorships: AT&T Corp. and Potlatch
Corporation
o Other Activities: American Petroleum Institute
(Director), The Business Council, The Business
Roundtable and The California Business Roundtable
[Photo]
John M. Deutch
59
9,977 shares
1987(2)
Institute Professor
Massachusetts Institute of Technology
o Director, Energy Research of the U.S. Department
of Energy -- 1978
o Under Secretary, U.S. Department of Energy --
1979 to 1980
o Dean of Science, M.I.T. -- 1982 to 1985
o Provost and Karl T. Compton Professor of
Chemistry, M.I.T. -- 1985 to 1990
o Institute Professor, M.I.T. -- 1990 to 1993
o Under Secretary, Department of Defense -- 1993
o Deputy Secretary, Department of Defense -- 1994
o Director of Central Intelligence Agency -- 1995
to 1996
o Institute Professor, M.I.T. -- 1996
o Committees: Audit and Public Issues
o Other Directorships: Ariad Pharmaceuticals, Inc.,
Citibank, N.A., CMS Energy, Cummins Engine
Company, Inc. and Schlumberger, Ltd.
(2) Mr. Deutch served as a director from 1987 until
1993 and was reelected in 1996.
3
<PAGE>
[Photo]
Reuben Mark
59
6,659 shares
1996
Chairman and Chief Executive Officer
Colgate-Palmolive Company
o Joined Colgate-Palmolive Company -- 1963
o President and General Manager (Venezuela and
Canada) -- 1970 to 1974
o Vice President and General Manager -- 1974 to
1979
o Group Vice President -- 1979 to 1981
o Executive Vice President -- 1981 to 1983
o Director, Colgate-Palmolive Company -- 1983
o President (Chief Operating Officer) -- 1983 to
1984
o Chief Executive Officer -- 1984 to 1986
o Chairman of the Board and Chief Executive Officer
-- 1986
o Committees: Audit, Directors and Subsidiaries and
Capital
o Other Directorships: Citibank, N.A., New York
Stock Exchange, Inc., Pearson plc and Time Warner
Inc.
[Photo]
Richard D. Parsons
49
2,442 shares
1996
President
Time Warner, Inc.
o Assistant and First Assistant Counsel to the
Governor, State of New York -- 1971 to 1974
o Deputy Counsel to the Vice President, Office of
the Vice President of the United States -- 1975
o General Counsel and Associate Director, Domestic
Council, White House -- 1975 to 1977
o Managing Partner, Patterson, Belknap, Webb &
Tyler -- 1977 to 1988
o President and Chief Operating Officer, Dime
Savings Bank of New York -- 1988 to 1990
o Chairman and Chief Executive Officer, Dime
Savings Bank of New York -- 1991 to 1995
o Director, Time Warner, Inc. -- 1991
o President, Time Warner, Inc. -- 1995
o Committees: Audit and Subsidiaries and Capital
o Other Directorships: Citibank, N.A., Federal
National Mortgage Association and Philip Morris
Companies, Inc.
4
<PAGE>
[Photo]
John S. Reed
59
1,776,744 shares(3)
1982
Chairman
Citicorp and Citibank, N.A.
o Joined Citibank, N.A. -- 1965
o Head, Individual Bank -- 1975
o Vice Chairman -- 1982
o Chairman and Chief Executive Officer -- 1984
o Committees: Executive (ex-officio)
o Other Directorships: Citibank, N.A., Monsanto
Company and Philip Morris Companies, Inc.
o Other Activities: The Business Council and The
Bankers Roundtable
(3) Includes 775,000 shares which Mr. Reed has the
right to acquire within 60 days pursuant to
employee benefit plans.
[Photo]
William R. Rhodes
62
317,564 shares(4)
1991
Vice Chairman
Citicorp and Citibank, N.A.
o Joined Citibank, N.A. -- 1957
o Senior Corporate Officer responsible for the
Caribbean, Central and South America and
Sub-Sahara Africa -- 1969
o Chairman, Citicorp and Citibank, N.A.
Restructuring Committee -- 1984
o Group Executive -- 1986
o Senior Executive, International -- 1990
o Vice Chairman -- 1991
o Committees: Executive (ex-officio)
o Other Directorships: Citibank, N.A. and Private
Export Funding Corporation (PEFCO)
o Other Activities: Brown University, Council of
the Americas, Council on Foreign Relations, The
Institute for International Finance, New York
City Partnership, New York City Chamber of
Commerce, New York Hospital and The Metropolitan
Museum of Art
(4) Includes 220,662 shares which Mr. Rhodes has
the right to acquire within 60 days pursuant to
employee benefit plans.
5
<PAGE>
[Photo]
Rozanne L. Ridgway
62
2,157 shares
1990
Former Assistant Secretary of State
for Europe and Canada
o U.S. Department of State: Ambassador to Finland
-- 1977 to 1980; Counselor -- 1980 to 1981;
Ambassador to German Democratic Republic -- 1982
to 1985; Assistant Secretary of State -- 1985 to
1989
o President, The Atlantic Council of the United
States -- 1989 to 1992
o Co-Chair -- 1993 to 1996
o Committees: Audit and Public Issues
o Other Directorships: Citibank, N.A., Bell
Atlantic Corporation, The Boeing Company, Emerson
Electric Co., Minnesota Mining and Manufacturing
Company, RJR Nabisco, Inc., Sara Lee Corporation
and Union Carbide Corporation
o Other Activities: Center for Naval Analyses
(Trustee), National Geographic Society (Trustee)
and Baltic-American Enterprise Fund (Chair)
[Photo]
H. Onno Ruding
58
302,645 shares(5)
1990
Vice Chairman
Citicorp and Citibank, N.A.
o Executive Director of the International Monetary
Fund -- 1977 to 1981
o Member of the Board of Managing Directors of
Amsterdam-Rotterdam Bank -- 1981 to 1982
o Minister of Finance of the Kingdom of the
Netherlands -- 1982 to 1989
o Chairman of the Netherlands Christian Federation
of Employers -- 1990 to 1992
o Joined Citibank, N.A. management -- 1992
o Vice Chairman -- 1992
o Committees: Executive (ex-officio) and Citibank
Consulting
o Other Directorships: Amsterdamsch Trustees
Kantoor B.V.(Supervisory Director), Pechiney S.A.
(Director), Unilever N.V. and Unilever PLC
(Advisory Director) and Corning Incorporated
(Director)
(5) Includes 255,025 shares which Mr. Ruding has the
right to acquire within 60 days pursuant to
employee benefit plans.
6
<PAGE>
[Photo]
Robert B. Shapiro
59
2,323 shares
1994
Chairman and Chief Executive Officer
Monsanto Company
o Joined G.D. Searle & Co. (subsequently acquired
by Monsanto Company) -- 1979
o President, The NutraSweet Group (a division of
G.D. Searle & Co.) -- 1982 to 1985
o Chairman and Chief Executive Officer, The
NutraSweet Company (a subsidiary of Monsanto
Company) -- 1985 to 1990
o President, The Agricultural Group (a division of
Monsanto Company) -- 1990 to 1993
o President and Chief Operating Officer, Monsanto
Company -- 1993 to 1995
o Director, Monsanto Company -- 1993
o Chairman and Chief Executive Officer, Monsanto
Company -- 1995
o Committees: Audit (Chairman)
o Other Directorships: Citibank, N.A. and Silicon
Graphics, Inc.
[Photo]
Frank A. Shrontz
66
9,903 shares
1986
Chairman Emeritus
The Boeing Company
o Joined The Boeing Company -- 1958
o Assistant Secretary of the U.S. Air Force -- 1973
to 1976
o Assistant Secretary of Defense -- 1976 to 1977
o Rejoined The Boeing Company -- 1977
o President and Director -- 1985
o Chief Executive Officer -- 1986
o Chairman and Chief Executive Officer -- 1988 to
1996
o Chairman -- 1996 to 1997
o Committees: Directors, Executive, Personnel
(Chairman) and Public Issues
o Other Directorships: Citibank, N.A., Boise
Cascade Corporation, Chevron Corporation and
Minnesota Mining and Manufacturing Company
o Other Activities: The Business Council
7
<PAGE>
[Photo]
Franklin A. Thomas
63
15,640 shares
1970
Former President
The Ford Foundation
o President, Bedford-Stuyvesant Restoration
Corporation -- 1967 to 1977
o Private practice of law -- 1978 to 1979
o President, The Ford Foundation -- 1979 to 1996
o Committees: Directors (Chairman), Executive,
Personnel and Public Issues (Chairman)
o Other Directorships: Citibank, N.A., ALCOA,
Cummins Engine Company, Inc., Lucent Technologies
and PepsiCo, Inc.
[Photo]
Edgar S. Woolard, Jr.
63
28,536 shares
1987
Former Chairman and Chief Executive Officer
E.I. du Pont de Nemours & Company
o Joined E.I. du Pont de Nemours & Company -- 1957
o Executive Vice President and Director -- 1983
o Vice Chairman -- 1985
o President and Chief Operating Officer -- 1987
o Chairman and Chief Executive Officer -- 1989
o Chairman -- 1995 to 1997
o Committees: Executive, Personnel, Citibank
Consulting and
o Subsidiaries and Capital
o Other Directorships: Apple Computer, Inc.
o Other Activities: The Business Council
Share Ownership of Management
Shares owned by Mr. Reed, Mr. Collins, Mr. Rhodes, Mr. Ruding, Mr.
Campbell, Mr. Horowitz and Mrs. Taylor, including those acquired through the
staff compensation plans of Citicorp and Citibank, N.A., are described
separately in this Proxy Statement.
As of January 31, 1998, the current directors and executive officers of
Citicorp as a group beneficially owned 4,956,021 shares of Citicorp common stock
(including 2,905,347 shares which the directors and executive officers have the
right to acquire within 60 days pursuant to employee benefit plans),
representing approximately 1.10% of Citicorp's outstanding shares. No single
executive officer or director beneficially owned at that date more than 0.39% of
Citicorp's outstanding stock, and all directors as a group beneficially owned at
that date less than 0.73% of Citicorp's outstanding stock.
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Section 16(a) Beneficial Ownership Reporting Compliance
Based on its review of the reports furnished to Citicorp for 1997 pursuant
to Section 16 of the Securities Exchange Act of 1934 (the 'Exchange Act'),
Citicorp believes all of the reports required to be filed under Section 16 were
filed on a timely basis except that a Form 4 Statement of Change in Beneficial
Ownership for Alain J.P. Belda showing an acquisition of 900 shares was filed 10
days late.
8
<PAGE>
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Certain Other Share Owners
His Royal Highness Prince Alwaleed Bin Talal Bin Abdulaziz Al Saud, P.O. Box
8653, Riyadh, 11492, Saudi Arabia, and FMR Corp. and Affiliates ("FMR"), 82
Devonshire Street, Boston, Massachuesetts 02109, are the only persons known by
Citicorp to own beneficially more than 5% of any class of Citicorp's voting
securities. Prince Alwaleed's Schedule 13D under the Exchange Act as filed with
the Securities and Exchange Commission (the 'SEC'), as amended through February
5, 1996, indicates that, as of January 26, 1996, Prince Alwaleed beneficially
owned 41,114,149 shares of Citicorp common stock, which shares represent
approximately 9.1% of Citicorp's outstanding common stock as of January 31,
1998. Prince Alwaleed has sole voting and dispositive power with respect to all
of such shares.
FMR's Schedule 13G under the Exchange Act as filed with the SEC, dated February
14, 1998, indicates that, as of December 31, 1997, FMR beneficially owned
33,191,014 shares of Citicorp common stock, which shares represent approximately
7.3% of Citicorp's outstanding common stock as of December 31, 1997. FMR has
sole dispositive power with respect to all of such shares, sole voting power
with respect to 1,800,609 of such shares, and no voting power with respect to
the balance of such shares. Such voting power resides with the Board of Trustees
of the investment companies for which a subsidiary of FMR Corp. acts as
investment advisor.
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Board Meetings
There were 10 meetings of the Board during 1997. All directors attended 75%
or more of the total Board meetings and meetings of the committees on which they
served.
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Size of the Board
In July 1997, the Board fixed the number of directors at fifteen. Directors
standing for election will hold office until the next annual meeting and until
the election and qualification of their successors. If any nominee is unable to
serve out his or her term, the Committee on Directors may recommend a successor
to fill the unexpired portion, subject to subsequent appointment by the Board.
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Board Committees
Audit Committee. The Audit Committee supervises independent audits of
Citicorp and oversees the establishment of appropriate accounting policies for
Citicorp. Current members are Mr. Shapiro (Chairman), Mr. Deutch, Mr. Mark, Mr.
Parsons and Ambassador Ridgway. The Audit Committee met four times during 1997.
The Audit Committee's principal functions include reviews of: the audit
plans, scope of audit and audit findings of both the independent auditors and
the corporation's internal corporate audit group; significant tax and legal
matters; reports on credit portfolios and processes; and internal controls.
Further, it is the responsibility of the Committee to recommend to the Board the
annual appointment of the independent auditors, to review the findings of
internal and independent auditors, financial controllers and external regulatory
9
<PAGE>
agencies and to review the accounting policies used in preparing the financial
statements of Citicorp.
Committee on Directors. The Committee on Directors recommends qualified
candidates for membership on the Boards of Directors of Citicorp and Citibank,
N.A. Current members are Mr. Thomas (Chairman), Mr. Calloway, Mr. Mark and Mr.
Shrontz. The Committee on Directors met once during 1997.
The Committee on Directors solicits recommendations for prospective
directors and recommends the approval of a candidate. The nominees are then
presented to the Board, which proposes the slate of directors to be submitted to
the stockholders at the Annual Meeting. In addition, the Committee is charged
with keeping current with and recommending changes in directors' compensation.
Personnel Committee. The Personnel Committee oversees employee policies and
programs of Citicorp and Citibank, N.A. Current members are Mr. Shrontz
(Chairman), Mr. Calloway, Mr. Derr, Mr. Thomas and Mr. Woolard. The Personnel
Committee met six times during 1997.
The Personnel Committee reviews and approves compensation policy and other
personnel-related programs to maintain an environment at Citicorp and Citibank,
N.A. that attracts and retains people of high capability, commitment and
integrity. In addition, the Committee oversees succession planning.
Other Committees. In addition to the committees described above, the Board
has a Committee on Subsidiaries and Capital, an Executive Committee and a Public
Issues Committee. Their functions and members are described in Citicorp's 1997
Annual Report.
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Board Compensation
Directors of Citicorp who are not officers of Citicorp or Citibank, N.A.
received an annual retainer of $40,000 for their services in 1997, of which
$10,000 was deferred under Citicorp's Directors' Deferred Compensation Plan
described below and is payable in Citicorp common stock upon a director's
retirement. In addition, outside directors received a fee of $950 for each
Board, committee or other meeting attended. In lieu of committee meeting fees,
the Chairmen of the Audit Committee and the Personnel Committee each received a
stipend of $20,000 and the Chairman of the Public Issues Committee and the
Committee on Directors received a stipend of $10,000 for each of those committee
memberships.
Outside directors of Citicorp who served on the Citibank, N.A. Board of
Directors received an annual retainer of $10,000 for those services in 1997.
Citicorp directors who did not serve on the Citibank, N.A. Board of Directors
served on the Consulting Committee to the Citibank, N.A. Board of Directors; and
of these, the outside directors on the Consulting Committee received an annual
retainer of $10,000 for those services in 1997. In addition, each outside
director and each outside member of the Consulting Committee received a fee of
$950 for each meeting of the Citibank, N.A. Board of Directors attended. Outside
members of the Audit Committee of the Citibank, N.A. Board of Directors received
a fee of $950 for each meeting of that committee attended. In lieu of committee
meeting fees, the Chairman of the Audit Committee of the Citibank, N.A. Board of
Directors received a stipend of $10,000. Those directors who are officers of
Citicorp or Citibank, N.A. received no additional compensation for their
services on the Board or the Citibank, N.A. Board of Directors or any committee
thereof.
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Under Citicorp's Directors' Deferred Compensation Plan, outside directors
may elect to defer all or part of their retainers and/or fees. Amounts deferred
are credited to investment accounts whose returns correspond to the funds
established under the Citibank, N.A. Savings Incentive Plan (the 'Savings
Incentive Plan'), a plan available to all regular United States employees of
Citibank, N.A. and certain affiliates (including directors who are also
employees). The amounts credited are expressed in units in those investment
accounts, which have the same value as the corresponding units in a fund under
the Savings Incentive Plan on the date of such crediting and thereafter will
have the value set on the immediately preceding valuation date for the
corresponding fund. Payments of deferred compensation credited to the investment
account mirroring Fund B established under the Savings Incentive Plan will be in
shares of Citicorp common stock. Payments of deferred compensation credited to
investment accounts which mirror funds other than Fund B will be in cash.
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Executive Officers
The following information with respect to each executive officer of
Citicorp who is not a nominee for election as a director is set forth below as
of March 9, 1998: name, age and the position held with Citicorp and the date
from which such position has been continuously held.
<TABLE>
<CAPTION>
Name Age Position and Office Held and Date from Which Held
- ---------------------------- ----------- ----------------------------------------------------------
<S> <C> <C>
William I. Campbell......... 53 Corporate Executive Vice President, Citibanking Worldwide
Consumer Bank -- 1996
Edward D. Horowitz.......... 50 Corporate Executive Vice President, Advanced Development:
New Products and Services -- 1997
Thomas E. Jones............. 59 Executive Vice President and a Principal Financial
Officer -- 1990
Charles E. Long............. 58 Vice Chairman and Secretary -- 1987
Dionisio R. Martin.......... 54 Corporate Executive Vice President, Emerging Markets --
1996
Robert A. McCormack......... 54 Corporate Executive Vice President, Global Relationship
Banking -- 1996
Victor J. Menezes........... 48 Corporate Executive Vice President, Chief Financial
Officer -- 1995
Lawrence R. Phillips........ 58 Corporate Executive Vice President, Human Resources --
1993
John J. Roche............... 62 Executive Vice President, Legal Affairs -- 1989
Mary Alice W. Taylor........ 48 Corporate Executive Vice President, Worldwide Operations
and Technology -- 1997
</TABLE>
The group of all executive officers consists of 14 individuals, including
Messrs. Reed, Collins, Rhodes and Ruding (who are all directors of Citicorp) and
the 10 officers named above. Officers serve at the pleasure of the Board.
11
<PAGE>
Each executive officer who is not a director of Citicorp has been employed
in such position or in other executive or management positions with Citicorp and
Citibank, N.A. for more than the last five years, except for Messrs. Campbell,
Horowitz and Phillips and Mrs. Taylor. Mr. Campbell joined Citicorp in 1996 and
from July 1995 to December 1995 was a consultant to Citicorp. Prior to that
time, Mr. Campbell served in a number of executive positions with Philip Morris
Companies, Inc., most recently as Chairman of U.S. Operations. Mr. Horowitz
joined Citibank in January 1997 and, prior to that time, from 1989 was Senior
Vice President-Technology at Viacom, Inc. and Chairman and Chief Executive
Officer of Viacom Interactive Media. Mr. Phillips joined Citicorp in 1993 and,
prior to that time, had been Vice President of Human Resources for the GE
Aerospace division of General Electric Company. Mrs. Taylor joined Citibank in
January 1997 and, prior to that time, was a Senior Vice President at Federal
Express Corporation. Before that, Mrs. Taylor held management positions with
Shell Oil Corporation, Cook Industries and Northern Telecom, Inc.
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Director and Officer Transactions
Certain transactions involving loans, deposits and sales of commercial paper,
certificates of deposit and other money market instruments and certain other
banking transactions occurred during 1997 between Citicorp and Citibank, N.A. on
the one hand and certain directors or executive officers of Citicorp and
Citibank, N.A., members of their immediate families or associates of the
directors, the executive officers or their family members on the other. All such
transactions were made in the ordinary course of business on substantially the
same terms, including interest rates and collateral, that prevailed at the time
for comparable transactions with other persons and did not involve more than the
normal risk of collectibility or present other unfavorable features.
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Compensation
The tables on pages 13 through 16 set forth a profile of Citicorp's
executive compensation and show, among other things, salaries and bonuses paid
during the last three years, options granted with respect to 1997 and aggregate
option exercises in 1997 for the Chairman and each of the six other most highly
compensated executive officers (the 'Named Executives'). These tables are
specified by current SEC requirements. There is also included a table,
Management Compensation Profile for 1997, set forth below, which is consistent
with the other tables. It has been previously used by Citicorp and is provided
to insure continuity.
12
<PAGE>
<TABLE>
<CAPTION>
MANAGEMENT COMPENSATION PROFILE FOR 1997
Restricted Stock Granted Since
Citicorp Stock Salary and Program Inception (1986)
Beneficially Savings Restricted ------------------------------
Owned as of Incentive Annual Stock Stock
January 31, Plan Incentive Shares Options 1997
1998(1) Name and Position Benefits(2) Awards(3) Granted(4) Granted(5) Shares Value(6) Dividends
- ---------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C> <C> <C> <C>
1,001,744 J.S. Reed, $1,590,000 $2,500,000 - 0 - 300,000 235,000 $27,965,000 $ 189,000
Chairman
196,196 P.J. Collins, 848,000 500,000 - 0 - 46,000 107,700 12,816,300 70,000
Vice Chairman
96,902 W.R. Rhodes, Vice 848,000 500,000 - 0 - 46,000 55,700 6,628,300 49,000
Chairman
47,620 H.O. Ruding, Vice 848,000 500,000 - 0 - 46,000 - 0 - - 0 - - 0 -
Chairman
53,000 W.I. Campbell, 738,500 650,000 50,000 110,000 50,000 5,950,000 - 0 -
Corporate
Executive
Vice President
30,000 E.D. Horowitz, 775,757 600,000 30,000 92,000 30,000 3,570,000 63,000
Corporate
Executive
Vice President
47,947 M.A.W. Taylor, 692,043 750,000 50,000 138,000 50,000 5,950,000 105,000
Corporate
Executive
Vice President
<CAPTION>
Stock Options Granted
Since 1988
Citicorp Stock Citicorp Stock ----------------------
Beneficially Beneficially
Owned as of Owned as of Avg. Grant
January 31, January 31, Options Price Per
1998(1) Name and Position 1998(1) Granted(7) Share
- ------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
1,001,739 J.S. Reed, 1,001,739 1,997,000 $52.49
Chairman
196,196 P.J. Collins, 196,196 1,006,000 41.49
Vice Chairman
96,902 W.R. Rhodes, Vice 96,902 841,000 41.86
Chairman
47,620 H.O. Ruding, Vice 47,620 716,000 45.96
Chairman
53,000 W.I. Campbell, 53,000 415,000 91.86
Corporate
Executive
Vice President
30,000 E.D. Horowitz, 30,000 242,000 114.35
Corporate
Executive
Vice President
47,947 M.A.W. Taylor, 47,947 320,000 114.87
Corporate
Executive
Vice President
</TABLE>
(1) Does not include shares which individuals have the right to acquire
pursuant to stock option awards.
(2) Total salary and Savings Incentive Plan benefits shown reflect amounts
earned in 1997 constituting salary and compensation earned in accordance
with the Savings Incentive Plan, a portion of which has been deferred and
the balance of which is paid in cash. Amounts constituting salary reflect
any increase in salary granted in March 1997 based on corporate and
individual performance in 1996. Amounts shown do not include amounts
expended by Citicorp pursuant to plans (including group life, health and
international service) that do not discriminate in scope, terms or
operation in favor of executive officers or directors of Citicorp and that
are generally available to all salaried employees. Amounts shown also do
not include amounts expended by Citicorp which may have a value as a
personal benefit to the named individual. The value of such benefits,
however, did not exceed the lesser of either $50,000 or 10% of the total
annual salary and bonus reported for any individual named.
(3) Incentive awards were made in January 1998 based on 1997 performance.
Seventy-five percent of each award was paid in cash (a portion of which may
be deferred) and, as described in the Personnel Committee Report on
Executive Compensation below, 25% of each award was deferred into share
units whose return is equivalent to the return on shares of Citicorp common
stock for a period of five years from the date the award was granted, at
which time the deferred award is payable in cash unless further deferred.
To the extent dividends are declared on Citicorp's common stock, dividend
equivalents will be credited on the share units in the form of additional
units, which will automatically be reinvested.
(4) Grants of restricted stock are for Citicorp common stock and are restricted
as to transfer and/or vesting. As to Mr. Campbell, all 50,000 shares vest
approximately seven years from the grant date. As to Mr. Horowitz, 7,000
shares vest in 1999, 10,000 shares vest in 2000, and 13,000 shares vest in
2001. As to Mrs. Taylor, 5,000 shares vest on each of the first through
tenth anniversaries of the grant date.
(5) Numbers of stock options shown reflect stock options granted in January
1998 to each of the Named Executives based on corporate and individual
performance in 1997. Options granted in January 1998 under the 1997 Stock
Incentive Plan to each of the Named Executives are performance-based
options and have an exercise price of $120.625 per share, a term of five
years and vest when the market price of Citicorp common stock reaches $200
per share and remains at or above this level for 10 trading days in a
consecutive 30-trading-day period.
(6) Total shares of restricted stock granted multiplied by the closing price on
the New York Stock Exchange composite tape on January 30, 1998 ($119.00).
(7) Numbers of options shown include stock options granted in January 1998
based on corporate and individual performance in 1997.
13
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
---------------------------------------- Awards
Other -----------------------
Annual Restricted Shares All Other
Name and Compensa- Stock Underlying Compensa-
Principal Position Year Salary Bonus(1) tion(2) Awards(3) Options(4) tion(5)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
J.S. Reed, 1997 $1,500,000 $2,500,000 $ - 0 - $ - 0 - 300,000 $ 90,000
Chairman (Chief 1996 1,466,667 2,000,000 - 0 - - 0 - 182,000 88,000
Executive Officer) 1995 1,300,000 3,000,000 - 0 - - 0 - 100,000 78,000
P.J. Collins, 1997 800,000 500,000 - 0 - - 0 - 46,000 48,000
Vice Chairman 1996 800,000 500,000 - 0 - - 0 - 75,000 48,000
1995 791,667 750,000 - 0 - - 0 - 75,000 47,500
W.R. Rhodes, 1997 800,000 500,000 - 0 - - 0 - 46,000 48,000
Vice Chairman 1996 800,000 500,000 - 0 - - 0 - 50,000 48,000
1995 783,333 750,000 - 0 - - 0 - 75,000 47,000
H.O. Ruding, 1997 800,000 500,000 - 0 - - 0 - 46,000 48,000
Vice Chairman 1996 800,000 500,000 - 0 - - 0 - 50,000 48,000
1995 791,667 750,000 - 0 - - 0 - 75,000 47,500
W.I. Campbell, 1997 700,000 650,000 - 0 - 6,321,875 110,000 38,500
Corporate Executive 1996 686,741 650,000 - 0 - - 0 - 105,000 - 0 -
Vice President(4) 1995 - 0 - - 0 - - 0 - - 0 - 200,000 - 0 -
E.D. Horowitz, 1997 775,757 600,000 - 0 - 3,793,125 92,000 - 0 -
Corporate Executive 1996 - 0 - - 0 - - 0 - - 0 - 150,000 - 0 -
Vice President(4) 1995 - 0 - - 0 - - 0 - - 0 - - 0 - - 0 -
M.A.W. Taylor, 1997 692,043 750,000 - 0 - 6,321,875 138,000 - 0 -
Corporate Executive 1996 - 0 - - 0 - - 0 - - 0 - 182,000 - 0 -
Vice President(4) 1995 - 0 - - 0 - - 0 - - 0 - - 0 - - 0 -
</TABLE>
(1) Since 1995, 75% of the annual incentive award to each Named Executive has
been paid in cash (a portion of which may be deferred) and, as described in
the Personnel Committee Report on Executive Compensation below, 25% of such
award has been deferred into share units whose return is equivalent to the
return on shares of Citicorp common stock for a period of five years from
the date the award was granted, at which time the deferred award is payable
in cash unless further deferred. To the extent dividends are declared on
Citicorp's common stock, dividend equivalents will be credited on the share
units in the form of additional units, which will automatically be
reinvested.
(2) Amounts shown do not include amounts expended by Citicorp pursuant to plans
(including group life, health and international service) that do not
discriminate in scope, terms or operation in favor of executive officers or
directors of Citicorp and that are generally available to all salaried
employees. Amounts shown also do not include amounts expended by Citicorp
which may have a value as a personal benefit to the named individual. The
value of such benefits, however, did not exceed the lesser of either
$50,000 or 10% of the total annual salary and bonus reported for any
individual named.
(3) The number of shares and value of aggregate restricted stock holdings of
each of the Named Executives on December 31, 1997 were 90,000 and
$11,379,375 (Mr. Reed), 33,334 and $4,214,668 (Mr. Collins), 23,334 and
$2,950,293 (Mr. Rhodes), 50,000 and $6,321,875 (Mr. Campbell), 50,000 and
$6,321,875 (Mrs. Taylor), and 30,000 and $3,793,125 (Mr. Horowitz). For
purposes of the year-end calculation, the value of the restricted stock is
determined by multiplying the total shares held by the closing price on the
New York Stock Exchange composite tape on December 31, 1997 ($126.4375).
Mr. Campbell received an award of 50,000 shares of restricted stock in
December 1997, all of which vest approximately seven years from the date of
grant. Mr. Horowitz received an award of 30,000 shares of restricted stock
in January 1997, of which 7,000 shares vest in 1999, 10,000 shares vest in
2000, and 13,000 shares vest in 2001. Mrs. Taylor received an award of
50,000 shares of restricted stock in January 1997, of which 5,000 shares
vest on each of the first through tenth anniversaries of the grant date. To
the extent dividends are declared on Citicorp's common stock, dividends
will be paid on the restricted stock holdings.
(4) All options for 1997 were granted in January 1998 and are performance-based
options. Options for 1996 were granted in January 1997. Mrs. Taylor
received a grant of options for 182,000 shares and Mr. Horowitz received a
grant of options for 150,000 shares in connection with employment by
Citicorp in January 1997; in each case those shares are listed as 1996
options, consistent with all January grants of options. For 1995, Messrs.
Collins, Rhodes and Ruding each received grants of options covering 75,000
shares in August 1995. Mr. Reed received a grant of options covering
100,000 shares in September 1995. Mr Campbell received grants of options
covering a total of 200,000 shares in January 1996 in connection with
employment by Citicorp in January 1996; those shares are listed as 1995
options, consistent with all January grants of options.
(5) Cash compensation earned in accordance with the Savings Incentive Plan.
Amounts in excess of contribution limits established by the Internal
Revenue Code are paid in cash to the Named Executive.
14
<PAGE>
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Potential Realizable Value
at
Assumed Annual Rates of
Individual Appreciation for Option
Grants Term(3)
- ----------------------------------------------------------------------------------------------------------------
Number of Percent
Shares of Total
Underlying Options
Options Granted to Exercise Expiration
Name Granted(1) Employees(2) Price Date 5% 10%
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
J.S. Reed 300,000 3.85% $ 120.625 January 20, 2003 $ - 0 - $ - 0 -
P.J. Collins 46,000 0.59 120.625 January 20, 2003 - 0 - - 0 -
W.R. Rhodes 46,000 0.59 120.625 January 20, 2003 - 0 - - 0 -
H.O. Ruding 46,000 0.59 120.625 January 20, 2003 - 0 - - 0 -
W.I. Campbell 110,000 1.41 120.625 January 20, 2003 - 0 - - 0 -
E.D. Horowitz 92,000 1.18 120.625 January 20, 2003 - 0 - - 0 -
M.A.W. Taylor 138,000 1.77 120.625 January 20, 2003 - 0 - - 0 -
All Stockholders(4) N/A N/A N/A N/A 15,857,270,911 35,040,421,721
</TABLE>
(1) Numbers of shares underlying options shown reflect stock options granted in
January 1998 to each of the Named Executives based on corporate and
individual performance in 1997. Options granted in January 1998 to each of
the Named Executives are performance-based options, have a term of five
years and vest when the market price of Citicorp common stock reaches $200
per share and remains at or above this level for 10 trading days in a
consecutive 30-trading-day period.
(2) Total options granted to employees are options granted to employees in
January 1998 based on corporate and individual performance in 1997.
(3) Amounts for the Named Executives shown in these columns have been derived
by multiplying the exercise price by the annual appreciation rate shown
(compounded for the term of the options), multiplying the result by the
number of shares covered by the options, and subtracting the aggregate
exercise price of the options. The terms of such options are described
above. At the assumed 5% and 10% annual rates of stock appreciation, the
options granted in 1997 to the Named Executives will not vest.
(4) The potential realizable gain to all stockholders (based on 453,942,288
shares outstanding as of December 31, 1997, with a market price per share
of $126.4375) at 5% and 10% assumed annual rates over a term of five years,
commencing on January 1, 1998, is provided as a comparison to the potential
gain realizable by the Named Executives at the same assumed annual rates of
stock appreciation.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUE
Number of Shares Value of Unexercised
Underlying Unexercised In-the-Money Options
Shares Options at
Acquired at Fiscal Year-End(3) Fiscal Year-End(3)
on Value ------------------------- --------------------------
Name Exercise(1) Realized(2) Exercisable Unexercisable Exercisable Unexercisable
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
J.S. Reed -0- $ -0- 650,000 432,000 $56,946,875 $24,197,500
P.J. Collins 69,772 6,507,632 563,097 175,000 53,534,651 9,714,063
W.R. Rhodes 95,834 9,156,074 170,000 150,000 12,757,500 9,315,625
H.O. Ruding 75,000 4,263,695 206,787 150,000 19,673,072 9,315,625
W.I. Campbell -0- -0- 100,000 205,000 6,018,750 7,692,188
E.D. Horowitz -0- -0- -0- 150,000 -0- 2,390,625
M.A.W. Taylor -0- -0- -0- 182,000 -0- 2,900,625
</TABLE>
(1) Includes all exercises during calendar year 1997.
(2) The value realized equals the market value of the common stock acquired on
the date of exercise minus the exercise price.
(3) Included in fiscal year-end figures are shares underlying options granted
in January 1998 based on corporate and individual performance in 1997. The
value of those options reflected in the table is the market value of common
stock on December 31, 1997 minus the exercise price. The market value of
common stock on the New York Stock Exchange composite tape as of December
31, 1997, was $126.4375 per share.
15
<PAGE>
Citicorp also provides compensation in the form of a benefit under the
Retirement Plan. The following table sets forth the estimated annual retirement
benefits as of December 31, 1997, as provided by the Retirement Plan and
supplemental non-qualified pension plans, payable upon retirement to employees
in specified remuneration and years-of-service classifications. Amounts include
estimated Social Security benefits which would be deducted in calculating
benefits payable under the Retirement Plan. The estimated amounts are based on
the assumption that payments under the Retirement Plan will commence upon
retirement at age 65.
PENSION PLAN TABLE(1)
Years of Service
----------------
Remuneration 15 20 25 30 35
- --------------------------------------------------------------------------------
$ 200,000.... $ 60,000 $ 80,000 $ 100,000 $ 120,000 $ 127,500
500,000.... 150,000 200,000 250,000 300,000 318,750
1,000,000.... 300,000 400,000 500,000 600,000 637,500
2,000,000.... 600,000 800,000 1,000,000 1,200,000 1,275,000
3,000,000.... 900,000 1,200,000 1,500,000 1,800,000 1,912,500
6,000,000.... 1,800,000 2,400,000 3,000,000 3,600,000 3,825,000
(1) This table reflects a straight-life annuity benefit.
The years of credited service under the Retirement Plan as of December 31,
1997 for Mr. Reed, Mr. Collins, Mr. Rhodes, Mr. Ruding, Mr. Campbell, Mr.
Horowitz and Mrs. Taylor were approximately 32, 35, 35, 16, 12, 11 and 11,
respectively. Covered compensation under the Retirement Plan and supplemental
non-qualified pension plans is the participant's base salary plus awards granted
under the Executive Incentive Compensation Plan, and, for years beginning with
1991, any bonus paid under any annual performance program. With respect to the
individuals named in the Summary Compensation Table, covered compensation does
not differ substantially (by more than 10%) from the compensation set forth
under the headings 'Salary' and 'Bonus' therein. The benefit payable at
retirement is based on a specified percentage of the average of covered
compensation for the five highest-paid years of the last ten years of
employment. Mr. Reed, Mr. Collins, Mr. Rhodes, Mr. Ruding, Mr. Campbell, Mr.
Horowitz and Mrs. Taylor will be credited with approximately 35, 35, 35, 22, 23,
26 and 28 years of service, respectively, upon normal retirement at age 65.
Messrs. Ruding, Campbell and Horowitz and Mrs. Taylor were each credited with 10
years of service at the beginning of their employment.
16
<PAGE>
- --------------------------------------------------------------------------------
PERSONNEL COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Personnel Committee of the Board of Directors reviews and approves
compensation levels for Citicorp's executive officers and oversees and
administers the corporation's executive compensation programs. The Personnel
Committee recommends, and the Board of Directors determines based on such
recommendations, compensation for the Chairman. Compensation levels for the
other executive officers of Citicorp are determined by the Personnel Committee
based on the recommendations of the Chairman. All members of the Personnel
Committee are outside directors who are not eligible to participate in any of
the compensation programs that the Committee oversees.
Citicorp's executive compensation plans are designed to attract, retain,
motivate and appropriately reward individuals who are responsible for Citicorp's
short- and long-term profitability, growth and return to shareholders.
Compensation for Citicorp executive officers consists of:
o salary;
o an annual incentive award; and
o long-term incentive awards, typically in the form of stock options.
Executive officers also participate in a retirement plan, a savings incentive
plan, a stock purchase plan, a medical plan and other benefit plans available
to employees generally.
Target pay levels for each executive are set and reviewed annually. These
targets are based on the level of responsibility, scope and complexity of the
executive's position relative to other senior management positions internally
and at competitive frame companies. With respect to certain of the named
executive officers, target pay levels are established in accordance with the
plan described in the next paragraph. The external comparison is based on the
results of an annual report prepared by an independent compensation consulting
firm. This report (which gathered information on 1996 compensation) surveys the
compensation levels of executive officers at a group of nineteen companies
comprising a set of competing banks and financial service companies and, in
order to provide broader perspective, a number of market-dominant global
enterprises. The nineteen companies, all of which were included in last year's
Board of Directors' Index (which is described in the next section of this Proxy
Statement), are considered by the Personnel Committee to be similar to Citicorp
in complexity and, therefore, constitute a relevant competitive frame for
purposes of compensation decisions. Total compensation (including salary, annual
incentive awards and long-term incentive awards) is targeted at the 75th
percentile of this competitive frame when Citicorp has strong performance, as
measured against its plan, historical results and the performance of peer
companies. However, in line with the corporation's pay for performance
orientation, total compensation levels may exceed the 75th percentile when
results are exceptionally strong or fall below the targeted level if performance
is below plan or peer companies.
Annual incentive awards to the Chairman and the other most highly paid
executives referred to as 'covered employees' under Section 162(m) of the
Internal Revenue Code (the 'Code') were granted under the Citicorp 1994 Annual
Incentive Plan ('AIP') which was approved by stockholders at the 1994 Annual
Meeting and became effective January 1, 1994. Consistent with Code requirements,
to preserve Citicorp's deductibility of these awards, the AIP specifies that the
maximum amount payable for any year to the top five named executive officers
will be limited to 0.5% of Citicorp's annual net income (before
17
<PAGE>
extraordinary items and the cumulative effect of accounting changes), plus the
amount (not to exceed $3,000,000) that was available to pay awards under the AIP
for prior years, but was not so paid. Further, under the AIP the Personnel
Committee is required to set annually the maximum awards payable to each named
executive. The maximums are expressed as a percentage of the total amount
available in a given year, with the AIP specifying that the maximum any
participating executive may receive is 35% of the fund. For 1997, maximum awards
were set at 35% and 16% of the fund for the Chairman and the next four covered
executives, respectively. As the Code only allows the Personnel Committee the
discretion to reduce the awards granted under this plan from these maximum
targets, the targets are set well above the 75th percentile to ensure that,
consistent with the corporation's compensation philosophy, when performance
warrants, the Personnel Committee has the ability to appropriately reward
participating executives.
Salary and annual incentive awards reward executives for their current
performance and contributions. Stock options and restricted stock grants are
provided to reward senior management for taking actions which will contribute to
the corporation's long-term growth and success, and to link their interests to
those of Citicorp's stockholders. Restricted stock grants are provided on a
selective basis to recruit or retain executives in connection with the
corporation's attainment of its long-term goals. To further focus senior
executives on the importance of balancing short- and long-term performance, 25%
of each senior executive's annual incentive award is deferred into share units
whose return is equivalent to the return on shares of Citicorp common stock for
a period of five years from the date the award is granted, at which time the
deferred award is payable in cash unless further deferred. Dividend equivalents
are credited on these units during the deferral period in the form of additional
units, which are automatically reinvested.
The determination of salary increases, annual incentive awards and
long-term incentive awards is reviewed annually based on the performance of
Citicorp (and, in the case of an executive responsible for a particular
business, that business' results). Also factored into these decisions is each
executive's individual performance and contribution to Citicorp's future
positioning. Although the components of compensation (salary, annual incentive
awards and long-term incentive awards) are reviewed separately, compensation
decisions are made based on a review of the total compensation level awarded
relative to the targeted compensation structure established by the Personnel
Committee. For purposes of evaluating total compensation and establishing
targeted and actual long-term incentive grant levels, the value of option grants
is set annually based on one-third of the fair market value of the stock (based
on the average trading price of Citicorp common stock in the third quarter of
the year), although the Personnel Committee believes that there is no truly
satisfactory method for determining the value of option grants. Previous grants
of stock options and restricted stock are reviewed but are not considered the
most important factor in determining the size of any executive's stock option or
restricted stock award in a particular year.
For each year since 1973, the Chairman and senior management have provided
to the Personnel Committee and the Board of Directors a written Corporate
Performance Review detailing in a textured and comprehensive way the annual
results of Citicorp and each of its principal businesses. The report starts with
an overview from the Chairman, and outlines the corporation's performance
against the following dimensions of its Balanced Scorecard: people management,
customer/franchise performance, strategic cost management, risk and control, the
community and financial performance. Financial results for 1997 (revenue,
18
<PAGE>
expense, margin, credit, taxes) versus plan and previous years are reviewed;
Citicorp's results (from the perspectives of shareholder return, market value to
book value and return on equity) are compared with peer financial and select
global enterprises on a one-year and five-year basis. The companies against
which results are compared are the same as the competitive frame companies used
by the Personnel Committee to determine market compensation levels.
In determining the level of annual incentive awards to be paid to senior
executives for 1997 results, the Personnel Committee reviewed the Corporate
Performance Review and evaluated 1997 performance versus plan and the previous
year. The Committee also reviewed 1997 results in the context of the Business
Directions strategy which calls for the strategic repositioning of the
corporation to a global growth and performance company.
Based on an evaluation of the above, it was the Personnel Committee's view
that Citicorp's 1997 results, as reflected in the Corporate Performance Review,
represented another year of good performance. The Committee noted the following
factors in support of its conclusion:
o Overall financial performance that is on trend with plan, as
illustrated by:
-- income of $4.1 billion ($3.6 billion after the $556 million
after-tax restructuring charge), up $359 million, or 9%, from
1996;
-- continued generation of free capital ($2.2 billion), while
repurchasing $2.3 billion of Citicorp common stock;
-- maintenance of Tier I capital within the targeted range of
8.0%-8.3% ($21.1 billion); and
-- return on common equity of 20.9%, above the long-term goal of 18%
per year.
o Progress in creating a singular franchise position.
o Initiation of the quality program.
o Progress in managing the human dimension of the business by getting
the right people in the right positions, particularly in the areas of
marketing, operations and technology.
Based on overall 1997 corporate performance, the Committee determined that
annual incentive awards should be at a level which, when combined with salary,
would position executive officers' direct compensation (base salary and annual
incentive award) at or near the 75th percentile of the competitive frame.
Awards to the top five named executives were below the maximum awards
available to each under the AIP.
In January 1998, the Personnel Committee granted performance-based stock
options to the senior leadership group to leverage their full engagement and
commitment to the achievement of the Business Directions strategy. The level of
the grants awarded was based on both Citicorp's and their individual performance
in 1997. The performance-based option grants were in lieu of regular option
grants to these officers. Options granted under this special program will expire
five years from the date of grant, which was January 20, 1998, and will vest
depending on the corporation's stock price performance. One hundred percent of
the options will vest when the stock price reaches $200 per share and remains at
or above this level for 10 trading days in a consecutive 30-trading-day period.
In determining the size of each participating executive's grant, the Committee
assessed corporate and individual performance according to the same standards
used to determine their
19
<PAGE>
annual incentive awards, with grant levels varying accordingly.
The exercise price for each option granted was equal to the average of the high
and low trading price of Citicorp common stock on the New York Stock Exchange
for the date of grant ($120.625 per share). In addition to these option grants,
certain select executive officers, and three Named Executive Officers, received
special restricted stock grants in 1997 in recognition of their individual
contributions and to retain them in connection with their potential future
impact on the corporation's attainment of its long-term goals.
Based on its assessment of the Chairman's performance, his leadership in
producing sustained levels of strong performance and a review of the competitive
frame market data, the Personnel Committee awarded Mr. Reed a 1997 annual
incentive award of $2,500,000. Seventy-five percent of this award was paid in
cash and 25% was paid in share units, as discussed above. As reviewed earlier in
this report, under the AIP, the maximum annual incentive award payable to the
Chairman for 1997 was set at 35% of the fund generated by the plan's formula.
Based on Citicorp's 1997 results, this equated to a maximum award of $6.28
million. In January 1998, Mr. Reed was awarded performance-based options
covering 300,000 shares; the terms and conditions of this grant being consistent
with the grants to all other senior leaders discussed above.
In accordance with changes made in 1993 to the Code relating to the
disallowance of a deduction for remuneration in excess of $1,000,000 to certain
executive officers, through adoption of the AIP (discussed earlier in this
report) the corporation has secured the continued deductibility of annual
incentive awards paid to these named executive officers, which includes Mr.
Reed. Any compensation expense relating to options granted under the
corporation's stock option plans is also deductible. The deductibility of the
cost of restricted stock grants to officers to which Section 162(m) of the Code
is applicable depends on the circumstances at the time the stock becomes vested.
Amounts paid as salary to Mr. Reed in excess of the $1,000,000 cap will not be
deductible.
By the Personnel Committee
Frank A. Shrontz, Chairman Franklin A. Thomas
D. Wayne Calloway Edgar S. Woolard, Jr.
Kenneth T. Derr
20
<PAGE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG CITICORP,
THE S&P 500, THE BOARD OF DIRECTORS' INDEX
AND THE KEEFE, BRUYETTE & WOODS 50 BANK INDEX
[GRAPHIC OMITTED: INFORMATION REFLECTED IN TABLE BELOW]
1992 1993 1994 1995 1996 1997
- ------------ ---- ---- ---- ---- ---- ----
Citicorp $100 $166 $188 $313 $490 $612
S&P 500 100 107 105 141 170 223
BoD Index(1) 100 109 110 162 217 298
KBW 50(2) 100 106 100 160 227 332
(1) The Board of Directors' Index consists of the following 19 market-dominant
global enterprises and financial services companies similar to Citicorp in
complexity: General Motors Corporation, Exxon Corporation, International
Business Machines Corporation, General Electric Company, Philip Morris
Companies, Inc., Procter & Gamble Company, Eastman Kodak Company, PepsiCo,
Inc., Johnson & Johnson, The Chase Manhattan Corporation, BankAmerica
Corporation, J. P. Morgan & Co. Incorporated, Bankers Trust New York
Corporation, Banc One Corp., Morgan Stanley Dean Witter Discover & Co.,
NationsBank Corp., Travelers Inc., American Express Company and Merrill
Lynch & Co. Inc.
(2) The Keefe, Bruyette & Woods 50 Bank Index is designed to measure the stock
price performance of the nation's largest banks.
21
<PAGE>
- --------------------------------------------------------------------------------
II. STOCKHOLDER APPROVAL OF SELECTION OF INDEPENDENT AUDITORS
The Board believes it appropriate to submit for action by the stockholders
its selection of KPMG Peat Marwick LLP ('KPMG'), certified public accountants,
as auditors of Citicorp for the year 1998. The appointment of this firm was
recommended to the Board by its Audit Committee, composed of directors who are
not officers or employees of Citicorp or Citibank, N.A., who reviewed the
professional competence of the firm and its audit program. As independent
auditors of Citicorp in 1998, KPMG would also audit Citibank, N.A. KPMG has
served as the independent auditor for Citibank, N.A. since 1964 and for Citicorp
since it commenced operations in 1968. For reasons of effectiveness and economy,
it has been Citicorp's practice to require the KPMG partner in charge of
Citicorp's assignment to be rotated from time to time, rather than changing
accounting firms at intervals.
The firm provides various audit services to Citicorp and its subsidiaries
on a worldwide basis. Fees for such audit services during 1997 amounted to
approximately $21,000,000.
Representatives of KPMG are expected to be present at the Annual Meeting
with the opportunity to make a statement and to be available to respond to
questions regarding these or any other appropriate matters.
Adoption of this proposal requires the affirmative vote of a majority of
the votes cast at the meeting by the stockholders entitled to vote thereon.
The Board of Directors recommends a vote FOR this proposal.
- --------------------------------------------------------------------------------
STOCKHOLDER PROPOSALS
Management has determined that each of the following stockholder proposals
should be opposed. Adoption of each stockholder proposal requires the
affirmative vote of a majority of the votes cast at the meeting by the
stockholders entitled to vote thereon.
- ------------------------------------------------------------------------------
III. STOCKHOLDER PROPOSAL
John J. Gilbert, 29 East 64th Street, New York, NY 10021, who holds 200
shares of common stock, and Margaret R. and/or John J. Gilbert, executors of the
Estate of Lewis D. Gilbert for 200 shares, and both representing an additional
family interest of 400 shares, have advised Citicorp that it is their intention
to present the following resolution for consideration and action by stockholders
at the 1998 Annual Meeting:
RESOLVED, that the stockholders of Citicorp, assembled in annual meeting in
person and by proxy, hereby request the Board of Directors to take steps
necessary to provide for cumulative voting in the election of directors, which
means each stockholder shall be entitled to as many votes as shall equal the
number of shares he or she owns multiplied by the number of directors to be
elected, and he or she may cast all of such votes for a single candidate, or any
two or more of them as he or she may see fit.
REASONS: Continued very strong support along the lines we suggest were
shown at the last annual meeting when 32%, an increase over the previous year,
7,430 owners of 108,612,826 shares, were cast in favor of this proposal. The
vote against included 2,681 unmarked proxies.
California law still requires that unless stockholders have voted not to
have cumulative voting, they will have it. Ohio also has the same position.
22
<PAGE>
The National Bank Act provides for cumulative voting. In many cases
companies get around it by forming holding companies without cumulative voting.
Banking authorities have the right to question the capability of directors to be
on banking boards. In many cases authorities come in after and say the director
or directors were not qualified. We were delighted to see that the SEC has
finally taken action to prevent bad directors from being on the boards of public
companies. The SEC should have hearings to prevent such persons becoming
directors before they harm investors.
Many successful corporations have cumulative voting. Example, Pennzoil
defeated Texaco in that famous case. Texaco's recent problems might have also
been prevented with cumulative voting getting directors on the board to prevent
such things. Ingersoll-Rand, also having cumulative voting, won two awards.
FORTUNE magazine ranked it second in its industry as "America's Most Admired
Corporations" and the WALL STREET TRANSCRIPT noted "on almost any criteria used
to evaluate management, Ingersoll-Rand excels." In 1994 and 1995 they raised
their dividend.
Lockheed-Martin, as well as VWR Corporation, now have a provision that if
anyone has 40% or more of the shares cumulative voting applies; it does not
apply at the latter company.
In 1995 American Premier adopted cumulative voting. Allegheny Power System
tried to take away cumulative voting, as well as put in a stagger system, and
stockholders defeated it, showing stockholders are interested in their rights.
Also, Hewlett-Packard, a very successful company, has cumulative voting.
If you agree, please mark your proxy for this resolution; otherwise, it is
automatically cast against it, unless you have marked to abstain.
Management's Comment
Under Citicorp's present method of democratic elections, our directors
exercise free judgment and their loyalty to all stockholders is clear.
Cumulative voting, however, would enable a small faction of stockholders to band
together and pool their voting power in order to elect one or more candidates
who will advocate the faction's special viewpoints, even if those viewpoints
diverge from the interests of all other stockholders. Consequently, directors
elected as a result of cumulative voting, beholden to those who elected them,
could inject an adversarial element to the Board's deliberative process. Indeed,
partisan advocacy, rather than constructive, objective analysis, could prevail
in our boardroom, hampering the Board's ability to make sound and timely
decisions beneficial to all stockholders.
Citicorp firmly believes that the selection of directors should be
predicated on their ability and willingness to serve all the stockholders of
Citicorp. In our opinion, therefore, a vote against cumulative voting is in the
best interests of Citicorp and its stockholders.
The Board of Directors recommends a vote AGAINST this proposal.
- --------------------------------------------------------------------------------
IV. STOCKHOLDER PROPOSAL
Evelyn Y. Davis, Watergate Office Building, 2600 Virginia Ave. N.W., Suite
215, Washington, DC 20037, who is the owner of 200 shares of Citicorp common
stock, has advised Citicorp that it is her intention to present the following
resolution for consideration and action by stockholders at the 1998 Annual
Meeting:
RESOLVED: "That the shareholders recommend that the Board direct management
that within five days after approval by the shareholders of this proposal, the
management shall publish in newspapers of general circulation in the cities of
New York, Washington, D.C.,
23
<PAGE>
Detroit, Chicago, San Francisco, Los Angeles, Dallas, Houston and Miami, and
in The Wall Street Journal and U.S.A. Today, a detailed statement of each
contribution made by the Company, either directly or indirectly, within the
immediately preceding fiscal year, in respect of a political campaign,
political party, referendum or citizens' initiative, or attempts to influence
legislation, specifying the date and amount of each such contribution, and the
person or organization to whom the contribution was made. Subsequent to this
initial disclosure, the management shall cause like data to be included in
each succeeding report to shareholders." "And if no such disbursements were
made, to have that fact publicized in the same manner."
REASONS: "This proposal, if adopted, would require the management to advise
the shareholders how many corporate dollars are being spent for political
purposes and to specify what political causes the management seeks to promote
with those funds. It is therefore no more than a requirement that the
shareholders be given a more detailed accounting of these special purpose
expenditures that they now receive. These political contributions are made with
dollars that belong to the shareholders as a group and they are entitled to know
how they are being spent."
If you AGREE, please mark your proxy FOR this proposal.
Management's Comment
Citicorp makes extensive public disclosure of its political contributions
in accordance with federal and state law. All political contributions made by
Citicorp and its Political Action Committee ("PAC") are publicly disclosed to
the appropriate federal and state agencies. Such reports are available to the
public. Citicorp also publishes an annual Citicorp Voluntary Political Funds
Report, which is available to all stockholders and the media, that lists all
state and federal PAC and direct contributions. The media is free to print the
information if they see fit.
The Board of Directors recommends a vote AGAINST this proposal.
OTHER MATTERS
The cost of solicitation of proxies will be borne by Citicorp. Proxies may
be solicited by mail, personal interview, telephone, telegraph or the Internet.
Directors, officers and regular employees of Citicorp may solicit proxies by
such methods without additional compensation. Banks, brokerage houses and other
institutions, nominees and fiduciaries will be requested to forward the
soliciting material to their principals and to obtain authorizations for the
execution of proxy cards and will, upon request, be reimbursed for reasonable
expenses incurred. Employees of Georgeson & Co. Inc. will also solicit proxies
at a fee of approximately $17,000 plus out-of-pocket expenses.
As of the date of this Proxy Statement, Citicorp does not intend to present
and has not been informed that any other person intends to present any business
not specified in this Proxy Statement for action at the meeting. If any other
matters come before the meeting, proxies will be voted on such matters in
accordance with the judgment of the person or persons authorized to vote the
proxies.
Only holders of common stock of record at the close of business (5:00 P.M.,
New York City time) on February 20, 1998, will be entitled to notice of and to
vote at the meeting. Stockholders are urged to sign the enclosed proxy card,
solicited on behalf of Citicorp's Board of Directors, and to return it promptly
in the enclosed envelope or, if you wish, to give your proxy by using the
Internet or by calling the toll-free telephone number printed on the
24
<PAGE>
proxy card. Proxies given pursuant to Internet and telephone voting procedures
are permitted under Delaware law. Proxies will be voted in accordance with
stockholders' directions. Signing the proxy card or giving your proxy on the
Internet or by telephone does not affect a stockholder's right to vote in person
at the meeting. The proxy may be revoked prior to its exercise by submitting a
later-dated proxy (including a proxy given on the Internet or by telephone) or
by giving appropriate notice of such revocation to the undersigned. If no
directions are given, proxies will be voted (i) for the election of directors,
(ii) for the approval of the selection of independent auditors and (iii) against
the stockholders' proposals. On any of these matters, abstentions and broker
non-votes are not considered votes cast.
Copies of Citicorp's Annual Report and Form 10-K for the year ended
December 31, 1997 may be obtained without charge by writing to Corporate Affairs
Distribution, Citicorp, 850 Third Avenue, 13th Floor, New York, NY 10043,
Attention: Jeffrey Barnard, or by telephone request to (212) 559-0233.
Stockholders may receive a report on all proposals at the 1998 Annual
Meeting without charge by writing to the Office of the Assistant Secretary,
Citicorp, 399 Park Avenue, New York, NY 10043.
- --------------------------------------------------------------------------------
SUBMISSION OF STOCKHOLDER PROPOSALS FOR INCLUSION IN CITICORP'S 1999 PROXY
STATEMENT
In accordance with Rule 14a-8 of the SEC under the Exchange Act, Citicorp
will accept proposals of stockholders for possible inclusion in Citicorp's 1999
Proxy Statement through the close of business on November 10, 1998.
By order of the Board of Directors,
/S/ Charles E. Long
CHARLES E. LONG
Vice Chairman and Secretary
25
<PAGE>
[Logo]
Printed on recycled paper.
<PAGE>
Appendix
- ---------------------------------------------
IF YOU WISH TO VOTE BY TELEPHONE OR INTERNET,
PLEASE READ THE INSTRUCTIONS BELOW
- ---------------------------------------------
Citicorp encourages you to take advantage of new and convenient ways to vote
your shares for matters to be covered at the 1998 Annual Meeting of
Stockholders. Please take the opportunity to use one of the three voting methods
outlined below to cast your ballot. We've made it easier than ever.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to
vote your proxy. Have your
proxy card in hand when you
call. You will be prompted to
enter your 12-digit Control
Number which is located below
and then follow the simple
instructions the Vote Voice
provides you.
VOTE BY INTERNET -
www.proxyvote.com
Use the internet to vote your
proxy. Have your proxy card in
hand when you access the web
site. You will be prompted to
enter your 12-digit Control
Number which is located below
to obtain your records and
create an electronic ballot.
VOTE BY MAIL -
Mark, sign and date your proxy
card and return it in the
postage-paid envelope we've
provided or return to Citicorp,
c/o ADP, 51 Mercedes Way,
Edgewood, NY 11717.
- ---------------------------------------------
CONTROL NUMBER: ________________________
- ---------------------------------------------
If you vote by phone or vote using the Internet,
please do not mail your proxy.
THANK YOU FOR VOTING
1998 Proxy
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSALS REGARDING:
- -------------------------------------------------------------------------------------------------------------------------------
(1) ELECTION OF DIRECTORS:
FOR WITHHOLD FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
ALL NOMINEES LISTED ON THE [_] AUTHORITY TO VOTE FOR ALL [_]
REVERSE SIDE (EXCEPT AS NOMINEES ON THE REVERSE SIDE
MARKED TO THE CONTRARY (2) Independent Auditors [_] [_] [_]
BELOW)
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
- -------------------------------------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE STOCKHOLDER PROPOSALS REGARDING:
FOR AGAINST ABSTAIN
--- ------- -------
(3) Cumulative Voting [_] [_] [_]
(4) Political Contributions [_] [_] [_]
- -------------------------------------------------------------------------------------------------------------------------------
PLEASE CHECK THIS BOX IF YOU HAVE
INDICATED A CHANGE OF ADDRESS [_] To eliminate duplicate mailings, please check this box.
Securities and Exchange Commission rules require that [_]
at least one account continue to receive an annual report.
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Signature ___________________________________ Date ________________________
Signature ___________________________________ Date ________________________
Please sign here exactly as your name(s) appear(s) to the right. Executors,
trustees, and others signing in a representative capacity should include their
names and the capacity in which they sign.
<PAGE>
Registered stockholders who plan to attend the meeting may be asked for
identification. If you are a beneficial owner of Citicorp stock held by a bank,
broker, or investment plan (in "street name"), you will need proof of ownership
to be admitted. A recent brokerage statement or a letter from the broker or bank
are examples of proof of ownership.
[reverse side of proxy card]
1998 PROXY
- --------------------------------------------------------------------------------
Director Nominees:
Annual Meeting of Stockholders
- April 21, 1998, 9:00 A.M.,
(New York City time), 399 Park
Avenue, New York, NY.
A.J.P. Belda R. Mark H.O. Ruding The undersigned appoints P.J.
D.W. Calloway R.D. Parsons R.B. Shapiro Collins, J.S. Reed, and W.R.
P.J. Collins J.S. Reed F.A. Shrontz Rhodes, or any of them,
K.T. Derr W.R. Rhodes F.A. Thomas proxies, each having power to
J.M. Deutch R.L. Ridgway E.S. Woolard, Jr. substitute another person, to
vote all the stock of Citicorp
held of record by the
undersigned on February 20,
1998 at the Annual Meeting of
Stockholders of Citicorp, to be
held on April 21, 1998 and at
any adjournment thereof. The
proxies have authority to vote
such stock, as indicated on the
reverse side hereof, (1) to
elect directors and (2) on the
other matters set forth in the
Proxy Statement. The proxies
are further authorized to vote
such stock upon any other
business that may properly come
before the meeting or any
adjournment thereof.
-------------------------------
Please indicate on the reverse
side of this card how your
stock is to be voted. UNLESS
YOU OTHERWISE INDICATE, THIS
PROXY WILL BE VOTED "FOR" THE
ELECTION OF DIRECTORS, "FOR"
THE PROPOSAL ON THE INDEPENDENT
AUDITORS, AND "AGAINST" THE
STOCKHOLDER PROPOSALS.
-------------------------------
Please date and sign this proxy
on the reverse side and return
it promptly whether or not you
expect to attend the meeting.
You may, nevertheless, vote in
person if you attend. We thank
you for your interest.
THIS PROXY IS SOLICITED ON
BEHALF OF THE BOARD OF
DIRECTORS.
