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As filed with the Securities and Exchange Commission on November 13, 2000
Registration No. 333-90079
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Amendment No.1
to
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CITIGROUP INC.
(Exact name of registrant as specified in its charter)
DELAWARE 52-1568099
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification 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)
STEPHANIE B. MUDICK, ESQ.
DEPUTY GENERAL COUNSEL
CITIGROUP INC.
399 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 for registrant)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to time
after the effective date of the registration statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [_]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED NOVEMBER __, 2000
PROSPECTUS
CITIGROUP INC.
TRAVELERS PROPERTY CASUALTY CORP.
AGENCY CAPITAL ACCUMULATION PLAN FOR CITIGROUP STOCK
400,000 shares of Common Stock
The shares are traded on the New York Stock Exchange and Pacific Exchange,
Symbol: C
Under the Travelers Property Casualty Corp. Agency Capital Accumulation
Plan for Citigroup Stock, restricted shares and agency shares of common stock of
Citigroup Inc. will be used to attract and retain key insurance agencies of
Travelers Property Casualty Corp. and its subsidiaries. The agencies receiving
restricted shares must meet eligibility conditions and agree to receive the
shares in place of a portion of cash compensation. The price of the restricted
shares is based on Citigroup's stock price discounted by 25%. The restricted
shares have restrictions imposed on them and may be forfeited in certain
circumstances. The agencies receiving agency shares will be selected by the
committee administering the Plan, which will also determine the restrictions and
conditions placed on agency shares.
This prospectus explains:
- how the agencies can participate
- the requirements for receiving the shares
- how the share price is calculated
- restrictions on the shares
- the forfeiture policy if certain requirements are not met
- other aspects of the Plan
Travelers Property Casualty Corp., a wholly owned subsidiary of Citigroup
Inc., sponsors the Agency Capital Accumulation Plan for Citigroup Stock. Where
required, Salomon Smith Barney Inc., a registered broker-dealer, will act as the
agent on Citigroup's behalf. Citigroup does not pay any underwriting discount or
commission in connection with these shares.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES, OR DETERMINED IF
THIS PROSPECTUS IS COMPLETE OR TRUTHFUL. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
PROSPECTUS DATED NOVEMBER 15, 2000
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TABLE OF CONTENTS
<TABLE>
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<S> <C>
CITIGROUP INC. 3
TRAVELERS 3
TRAVELERS PROPERTY CASUALTY CORP. AGENCY CAPITAL
ACCUMULATION PLAN FOR CITIGROUP STOCK 4
General Information 4
Description of the Plan 4
Restricted Stock 6
Agency Stock 7
Administration of the Plan 7
Relationship Among Citigroup, Travelers and the Agency 8
Certain Federal Income Tax Consequences 9
Change of Control 10
Amendments to or Discontinuance of the Plan 10
USE OF PROCEEDS 10
WHERE YOU CAN FIND MORE INFORMATION 10
EXPERTS 11
LEGAL MATTERS 12
ANNEX A: THE PLAN A-1
</TABLE>
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CITIGROUP INC.
Citigroup is a diversified holding company whose businesses provide a
broad range of financial services to consumer and corporate customers in 103
countries and territories. Citigroup's activities are conducted through Global
Consumer, Global Corporate and Investment Bank, Global Investment Management and
Private Banking, and Investment Activities.
On October 8, 1998, Citigroup changed its name from Travelers Group Inc.
to Citigroup Inc. in connection with the merger of Citicorp into a subsidiary of
Citigroup.
On September 6, 2000, Citigroup Inc. and Associates First Capital
Corporation ("Associates") announced that they had entered into an agreement
pursuant to which Associates will merge with a subsidiary of Citigroup. Pursuant
to the agreement, Associates common stockholders will receive .7334 of a share
of Citigroup's common stock for each share of Associates common stock that they
own. The transaction is expected to be completed prior to the end of 2000. The
merger is expected to be a tax-free exchange and accounted for on a "pooling of
interests" basis.
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, Citigroup may be required to commit
resources to its subsidiary banks.
The principal office of Citigroup is located at 399 Park Avenue, New
York, NY 10043, and its telephone number is (212) 559-1000.
TRAVELERS
Travelers Property Casualty Corp. is an insurance holding company
chartered in 1996 in Delaware. Through its subsidiaries it is engaged in the
property and casualty insurance business in all states of the United States, the
District of Columbia, Puerto Rico and Guam. The term "Travelers" in this
prospectus refers to Travelers Property Casualty Corp. and its consolidated
subsidiaries.
Travelers' home office is located at One Tower Square, Hartford,
Connecticut 06183, and its telephone number is (860) 277-0111.
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TRAVELERS PROPERTY CASUALTY CORP.
AGENCY CAPITAL ACCUMULATION PLAN FOR CITIGROUP STOCK
GENERAL INFORMATION
Under the Plan, Citigroup issues restricted stock to eligible agencies
that elect to participate. By participating in the Plan, the agencies will
receive awards of restricted stock instead of cash for a portion of their
eligible incentive payments. Under the Plan, Citigroup may also issue agency
stock to eligible agencies selected by Citigroup's Personnel, Compensation and
Directors Committee or its designee, which is called the "Committee" in this
prospectus.
The Board of Directors of Travelers authorized the Plan on October 19,
1999; it became effective on November 1, 1999. The Plan enables Travelers to
attract, retain and motivate independent property-casualty insurance agencies.
The Plan allows Travelers to compensate the agencies for their contributions to
the growth and profits of Travelers and its parent, Citigroup. It also
encourages the agencies to own Citigroup common stock.
Below is a summary of the Plan. If there are any discrepancies between
this summary and the full text of the Plan, attached as Annex A, the text of the
Plan takes precedence.
DESCRIPTION OF THE PLAN
Eligibility. The Plan allows for awards of restricted stock or agency
stock to eligible agencies selected by the Committee. Restricted stock has
forfeiture provisions and time restrictions on the holders' ability to transfer
the stock. Agency stock has fewer or different restrictions on the holders'
ability to transfer the stock. To be eligible for restricted stock awards,
agencies must earn a minimum eligible incentive payment in the calendar year for
which an election of restricted stock award is made. The current minimum
incentive payment is $5,000 but this amount may be changed at any time by the
Committee. The minimum incentive payment must be earned in either the Commercial
Lines, Personal Lines or Bond Business Division and the minimum must be earned
separately for each eligible incentive program. Incentive payments cannot be
combined by eligible incentive program or from Commercial Lines, Personal Lines
or Bond to obtain the minimum eligible incentive payment.
Eligible incentive programs include the Performance Plus Payment described in
the Bond and Commercial Lines Performance Plus Agreements and/or the
Participation Payment described in the Personal Lines Performance Plus Agreement
or any similar or successor agreement for each Business Division as well as the
Preferred Incentive Programs (Elite, Star, Conerstone or similar or successor
programs).
Awards of Restricted Stock. Eligible agencies that choose to participate
in the Plan will receive a percentage of the participant's eligible incentive
award in restricted stock instead of cash payment. The Committee will determine
the awards based on Travelers's recommendations and each eligible agency's
election to participate. For each eligible agency or group of agencies, the
Committee will determine:
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- the number of shares to be awarded,
- the minimum eligible incentive payment that must be earned to be eligible
for an award,
- the minimum and maximum level of stock -- based on a percentage of the
incentive available to agencies that qualify for awards,
- the frequency of awards, and
- all other terms and conditions that apply to Plan participation and the
awards.
Percentage Participation. Agencies that are eligible to receive
restricted stock under the Plan will be asked to elect to participate during
each annual enrollment period for the Plan. Participants will specify the
percentage of their incentive award to be allocated to the Plan. An agency may
be asked to elect to participate in the Plan before knowing if it is eligible to
participate in the Plan. The current guidelines for the Plan allow participants
to elect restricted stock awards that in total will be at least 10% but not more
than 50% of incentive awards. For purposes of these calculations, incentive
awards will include the discounted value of any award of restricted stock.
Fractional shares of restricted stock will be paid in cash. If there is an
adjustment to the incentive award after a grant of restricted stock under the
Plan, Travelers may pay the adjustment amount entirely in cash.
Agencies making elections under the Plan must meet all administrative
guidelines adopted by the Committee from time to time, including ensuring that
elections are received on time. Once a percentage election to receive the
restricted stock is made, it cannot be revoked or changed, and participation
must continue throughout the calendar year. An agency can only discontinue
participation or modify its percentage elections during the enrollment period
for the next calendar year.
Discounted Price of Restricted Stock. The price of the restricted stock
will be based on the fair market value of Citigroup stock and then discounted.
The Citigroup stock price used will be an average of the closing prices for
Citigroup on the New York Stock Exchange for the five trading days before the
award date. That average price will be discounted by 25%.
The Committee may determine that another discount rate should be used to
reflect the impact of the stock's restrictions and its potential for forfeiture.
The Committee may also choose an alternate way to determine the Citigroup stock
price to be discounted.
Awards of Agency Stock. Eligibility for agency stock awards is determined
by the Committee. Agencies chosen by the Committee need not be participants
under the restricted stock portion of the Plan. The agency stock will be issued
by Citigroup under the terms of the Plan to agencies selected by the Committee.
Awards of agency stock will be in addition to any cash or other compensation,
including restricted stock awards, paid to an agency. Eligibility and the number
of shares of agency stock awarded under the Plan may be determined by a formula
or
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formulas approved by the Committee or may be determined by the Committee
individually on a case by case basis. For any award of agency stock, the
Committee will determine:
- the number of shares of agency stock to be awarded,
- the frequency of awards, and
- any other terms and conditions of the awards.
RESTRICTED STOCK
Transfer Restrictions. Agencies that receive an award of restricted stock
may not transfer or pledge the restricted stock for three years after the award
date. This restriction does not prohibit the agency from entering into
agreements with its producers with respect to rights and limitations associated
with the stock. However, these producers will have no rights under the Plan, and
neither Travelers, Citigroup nor their affiliates will have any liability under
such agreements. The Plan does not allow funds or securities held under the Plan
to have any liens attached.
The Committee reserves the right to:
- change or extend the restricted period, (provided that the period will not
be extended without the Participant's consent.)
- provide for alternative restrictions during an extension,
- provide for the lapse of restrictions in installments, and
- accelerate or waive any restrictions in whole or in part.
Dividends and Voting Rights. Holders of restricted stock may receive
regular dividends or dividend equivalents during the restricted period.
Generally, during the restricted period, a holder may direct the vote of his or
her shares. The Plan Administrator will vote the shares according to the
instructions it receives from the restricted stock holders. The Plan
Administrator will vote restricted stock for which no instructions are received
in proportion to the votes that were received.
Vesting and Forfeiture. When the restricted period ends (or if the
restrictions are waived), the agency, as shareholder, will have full power over
the shares. Shareholders may be allowed to sell these shares to Citigroup or to
an affiliate. If repurchased by Citigroup, the shares may be used for future
awards under the Plan. Citigroup has no commitment to purchase any shares.
In order to keep the shares it has been awarded, each agency must
continue to maintain certain levels of performance throughout the restricted
period. Forfeiture will be based on a
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separate determination of performance in each eligible incentive program by line
of business in which the award was granted. The determination of performance for
each award will be made in each calendar year that transfer restrictions apply
to the award. If a participant's written premiums in a line of business are
reduced by 25% or more from the premiums written in the year on which the award
was based, the participant will forfeit all restricted stock awarded in that
line for the year on which the award was based and 50% of the amount of the
incentive award allocated to CAP for that forfeited award will be paid to the
agency, without interest. Forfeiture determinations will be made separately for
each award in each line of business.
An agency will also forfeit all restricted stock awards outstanding if
its general agency agreement with Travelers is terminated for any reason during
the restricted period except for termination by Travelers without cause.
If the participant has to forfeit restricted stock, the participant will
have no further rights in the restricted stock. In such event the only rights of
the Agency with respect to the award will be to receive the 50% payment
described above. Payments made in cash will not be forfeited. If you are in
default on any financial obligation due us or any of our insurance affiliates,
we may offset any funds you owe us against any commission, profit sharing, or
other payment, we owe you.
AGENCY STOCK
Shares of agency stock under the Plan will not be subject to the
limitations imposed on the restricted stock unless the Committee determines to
impose those or other restrictions.
ADMINISTRATION OF THE PLAN
The Committee. The Committee is made up of individuals, none of whom are
employees of Citigroup. The Committee may delegate some or all of its authority.
Powers of the Committee. The Committee has the exclusive right to:
- designate eligible agencies,
- determine eligibility requirements,
- determine minimum and maximum compensation payable in restricted stock and
all other terms of participation,
- designate agencies that can receive agency stock,
- determine and/or modify the conditions of vesting and forfeiture and other
terms and conditions of the awards under the Plan, and
- make all other determinations in the interpretation and administration of
the Plan.
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The Committee has the authority to administer and interpret the Plan, and
its decisions are final, binding and conclusive. Any claims or disputes relating
to the awards granted under the Plan will be resolved by arbitration, according
to the rules and procedures of the American Arbitration Association.
Reports. Citigroup will send each participating agency a report on the
amount and status of its award(s). Participating agencies may request additional
information about the Plan and its administrators by contacting Travelers
Property Casualty Corp., Attention: Agency Compensation Department, One Tower
Square, Hartford, CT 06183; telephone number (860) 277-7673.
Authorized Shares. Four hundred thousand (400,000) shares of common stock
may be issued under the Plan. These shares may be a new issuance of shares or
may be purchased from the open market and reissued as awards. The total number
of shares may be increased or decreased, as determined by the Committee, due to
a stock dividend, recapitalization, stock split or other transaction that
materially affects the common stock.
Award Agreements and Stock Certificates. Generally, an agency has no
rights to a restricted stock award or an agency stock award that contains
restrictions until it signs and returns a restricted stock award agreement. Any
stock certificate registered in the agency's name will contain a legend
describing the terms and restrictions that apply to the stock awarded. At its
option, Citigroup may make a book entry -- i.e., a computerized or manual entry
-- in its records to evidence an award.
Citigroup's book entry system consists of a computerized tracking system
which records items such as awards, transactions, elections and proxy mailings.
Citigroup's records are binding on the agencies.
Once the restricted period is over, agencies may direct Citigroup to
issue a certificate to the agency or to credit a designated Salomon Smith Barney
brokerage account with all of the common stock. This must be done in writing,
and neither Citigroup, Travelers nor their affiliates will have any liability in
connection with these transactions.
The Committee may require Citigroup to hold any stock certificate issued
in connection with the restricted stock or the agency stock until the restricted
period is over.
RELATIONSHIP AMONG CITIGROUP, TRAVELERS AND THE AGENCY
The Plan described in this prospectus is for the benefit of eligible
agencies only. Travelers and the agency enter into the agreement for the
restricted stock award or for an agency stock award with restrictions.
Agreements between an agency and its producers do not create any legal
obligations on the part of Citigroup, Travelers or any of their affiliates.
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES
THE DESCRIPTIONS OF THE TAX TREATMENT IN THIS PROSPECTUS ARE BASED ON THE U.S.
FEDERAL INCOME TAX LAWS AND THE INTERPRETATION AND APPLICATION OF THOSE LAWS AS
OF THE DATE OF THIS PROSPECTUS. REGARDLESS OF THE AGENCY'S TAXPAYING STATUS, THE
AGENCY SHOULD CONSULT ITS TAX ADVISOR TO DETERMINE THE APPLICABILITY OR
INTERPRETATION OF ANY STATE, LOCAL AND FOREIGN TAX LAWS THAT MAY BE RELEVANT TO
ITS PARTICULAR TAX SITUATION. FUTURE LEGISLATION MAY CHANGE THE CURRENT TAX
LAWS; THESE CHANGES WOULD TAKE PRECEDENCE OVER THE INTERPRETATION IN THIS
PROSPECTUS AND OTHER AWARD-RELATED COMMUNICATIONS.
Restricted Stock. Generally, an agency must include in ordinary income an
amount equal to the fair market value of the restricted stock at the time the
restricted stock is no longer subject to a substantial risk of forfeiture within
the meaning of Section 83 of the Internal Revenue Code. Restricted stock is no
longer subject to a substantial risk of forfeiture upon the expiration of the
restricted period. If the agency forfeits the award of restricted stock and
receives a cash payment as a result of such forfeiture, the agency will be taxed
on the payment received, unless an 83(b) election was made with respect to the
forfeited stock. Any tax or other amount will be withheld as required on the
amount of ordinary income attributable to the restricted stock, based on the
fair market value of the award at that time.
83(b) election. An agency may elect pursuant to Section 83(b) of the
Internal Revenue Code -- which is commonly referred to as an "83(b) election" --
to include as income in the year the restricted stock is transferred to the
agency by the company -- i.e., the taxable year in which the award is granted --
an amount equal to the fair market value of the restricted stock on the date of
the award, as if the restricted stock were unrestricted and could be sold or
transferred immediately. If the agency makes an 83(b) election, the agency will
not be subject to taxation at the time the restricted stock is no longer subject
to a substantial risk of forfeiture. If the agency subsequently forfeits stock
subject to the 83(b) election, no deduction or tax refund will be allowed for
the amount included as income as a result of the 83(b) election. The agency is
responsible for making the 83(b) election and timely filing it with the Internal
Revenue Service within thirty days of the award date.
An agency's tax basis for the restricted stock equals the amount of
ordinary income recognized by the agency with respect to the restricted stock.
Once the restricted period expires, if shares are sold, an agency will generally
recognize capital gain or loss if the restricted stock has been held as a
capital asset. The capital gain or loss will be treated as long-term if the
stock sold was held for more than one year. The holding period for capital gains
treatment begins when the restricted period expires, unless the agency has made
an 83(b) election, in which event the holding period begins on the award date.
Dividends. Dividends distributed on shares of restricted stock during the
restricted period are taxable to the agency as compensation -- assuming that the
agency has not made an 83(b)
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election -- and taxes or other amounts will be withheld as required on those
dividend payments. Citigroup will generally be entitled to a deduction, for
federal income tax purposes, with respect to those dividends. If the agency has
made an 83(b) election, then dividends will be taxable to the agency as dividend
income, and Citigroup generally will not be entitled to a deduction for these
amounts.
CHANGE OF CONTROL
If there is a change of control, as defined in the Plan, all restrictions
on the restricted stock awards will immediately lapse. A change of control may
consist of one or more events.
AMENDMENTS TO OR DISCONTINUANCE OF THE PLAN
The Board of Directors of Citigroup may terminate, amend or modify the
Plan at any time. However, the Board cannot make any change that would adversely
affect an agency's existing award without that agency's consent.
USE OF PROCEEDS
Citigroup will not receive cash proceeds from agencies in connection with
issuing stock.
WHERE YOU CAN FIND MORE INFORMATION
As required by the Securities Act of 1933, as amended, Citigroup filed a
registration statement (No. 333-90079) relating to the securities offered by
this prospectus with the Securities and Exchange Commission. This prospectus is
included as a part of that registration statement, which also includes
additional information.
Citigroup files annual, quarterly and current reports, proxy statements
and other information with the SEC. You may read and copy any document Citigroup
files at the SEC's public reference rooms in Washington, D.C., New York, New
York and Chicago, Illinois. You can also request copies of the documents, upon
payment of a duplicating fee, by writing the Public Reference Section of the
SEC. Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. These SEC filings are also available to the public from the
SEC's web site at http://www.sec.gov.
The SEC allows Citigroup to "incorporate by reference" the information it
files with the SEC, which means that it can disclose important information to
you by referring you to those documents. The information incorporated by
reference is considered to be part of this prospectus. Information that
Citigroup files later with the SEC will automatically update information in this
prospectus. In all cases, you should rely on the later information over the
comparable but earlier dated information included in this prospectus or the
prospectus supplement. Citigroup incorporates by reference the documents listed
below and any future public filings made with the SEC under Section 13(a),
13(c), 14, or 15(d) of the Securities Exchange Act of 1934, as amended:
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(a) Annual Report on Form 10-K, as amended, for the year ended December
31, 1999;
(b) Quarterly Reports on Form 10-Q for the quarters ended March 31, 2000 and
June 30, 2000;
(c) Current Reports on Form 8-K dated January 18, 2000, February 16, 2000,
February 28, 2000, April 17, 2000, June 19, 2000, July 11, 2000, July 19, 2000,
July 21, 2000, September 5, 2000, October 3, 2000 and October 17, 2000; and
(d) Registration Statement on Form 8-B, dated May 10, 1988, describing our
common stock, including any amendments or reports filed for the purpose of
updating such description.
All documents Citigroup files publicly pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this prospectus and before the
completion of the offering of the securities described in this prospectus shall
be incorporated by reference in this prospectus from the date of filing of such
documents.
You may request a copy of these filings, at no cost, by writing or
telephoning Citigroup at the following address:
Citigroup Document Services
140 58th Street, Suite 5I
Brooklyn, NY 11220
(877) 936-2737 (toll free)
(718) 765-6460 (outside the U.S.)
You should rely only on the information provided in this prospectus, as
well as the information incorporated by reference. We have not authorized anyone
to provide you with different information. You should not assume that the
information in this prospectus or any document incorporated by reference is
accurate as of any date other than the date on the front of the applicable
document. No offer of these securities is being made in any state where the
offer is not permitted.
EXPERTS
The consolidated financial statements of Citigroup Inc. as of December
31, 1999 and 1998, and for each of the years in the three-year period ended
December 31, 1999, have been audited by KPMG LLP, independent certified public
accountants, as set forth in their report on the consolidated financial
statements. The consolidated financial statements are included in Citigroup's
annual report on Form 10-K, as amended, for the year ended December 31, 1999,
and incorporated by reference in this prospectus. The report of KPMG LLP also is
incorporated by reference in this prospectus. The report of KPMG LLP covering
the December 31, 1999 consolidated financial statements refers to changes, in
1999, in Citigroup's methods of accounting for insurance-related assessments,
accounting for insurance and reinsurance contracts
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that do not transfer insurance risk, and accounting for the costs of start-up
activities. The consolidated financial statements of Citigroup referred to above
are incorporated by reference in this prospectus in reliance upon such report
and upon the authority of said firm as experts in accounting and auditing.
LEGAL MATTERS
Citigroup's Deputy General Counsel, Stephanie Mudick, has passed upon
the validity of the shares issued under the Plan. Ms. Mudick beneficially owns
or has rights to acquire an aggregate of less than 1% of Citigroup's common
stock.
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ANNEX A
TRAVELERS PROPERTY CASUALTY CORP.
AGENCY CAPITAL ACCUMULATION PLAN FOR CITIGROUP STOCK
AS OF NOVEMBER 15, 2000
SECTION 1. PURPOSE OF THE PLAN.
The name of this plan is TRAVELERS PROPERTY CASUALTY CORP. AGENCY CAPITAL
ACCUMULATION PLAN FOR CITIGROUP STOCK (the "Plan"). The purpose of the Plan is
to enable Travelers Property Casualty Corp., a Delaware corporation
("Travelers"), an indirect wholly-owned subsidiary of CITIGROUP INC., a
Delaware corporation ("Citigroup"), and its Subsidiaries to attract, retain and
motivate Agencies (as hereinafter defined), to compensate them for their
contributions to the growth and profits of Citigroup and to encourage ownership
of common stock, par value $.01 per share (the "Common Stock"), of Citigroup on
the part of such Agencies. The Plan provides incentives to participating
Agencies which are linked directly to increases in stockholder value and will
therefore inure to the benefit of all stockholders of Citigroup.
SECTION 2. DEFINITIONS.
For purposes of the Plan, the following terms shall be defined as set
forth below:
(a) "AGENCIES" means independent property-casualty insurance agencies
appointed by the Insurance Companies to represent the Insurance Companies
in the sale of insurance or otherwise.
(b) "AGENCY STOCK" means shares of Common Stock awarded pursuant to
Section 6.
(c) "AGENCY STOCK AWARD AGREEMENT" shall have the meaning ascribed to
such term in Section 6(c).
(d) "ANNUAL PREMIUM" with respect to any given year means the annual
written property-casualty premium (Eligible Premium or Eligible Net
Written Premium) (as defined in the Agency eligible incentive Agreements)
between a Participant and any of the Insurance Companies.
(e) "BASE YEAR" shall have the meaning ascribed to such term in
Section 3(a).
(f) "BUSINESS DIVISION" means a line of business such as Commercial
Lines, Personal Lines or Bond.
(g) "CAUSE" means conduct by a Participant that materially breaches
such Participant's agreement with the Insurance Companies or that is
demonstrably injurious
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to Travelers, Citigroup or a Subsidiary, monetarily or otherwise, which
conduct shall include, but not be limited to (i) disclosing or misusing
any confidential information pertaining to Travelers, Citigroup or a
Subsidiary or (ii) disparaging Travelers, Citigroup, any Subsidiary or
any of their respective officers or directors. The determination of
whether any conduct, action or failure to act constitutes "Cause" shall
be made by the Travelers Committee in its discretion.
(h) "CITIGROUP" shall have the meaning ascribed to such term in
Section 1.
(i) "CITIGROUP BOARD" means the Board of Directors of Citigroup.
(j) "COMMITTEE" means the Personnel, Compensation and Directors
Committee of the Citigroup Board or any subcommittee or designee thereof.
(k) "COMMON STOCK" shall have the meaning ascribed to such term in
Section 1.
(l) "ELIGIBLE AGENCIES" shall have the meaning ascribed to such term
in Section 3(a).
(m) "ELIGIBLE INCENTIVE PROGRAMS" include the Performance Plus Payment
described in the Bond and Commercial Lines Performance Plus Agreements
and/or the Participation Payment described in the Personal Lines
Performance Plus Agreement or any similar or successor agreement for each
Business Division as well as the Preferred Incentive Programs (Elite,
Star, Cornerstone or similar or successor programs).
(n) "INSURANCE COMPANIES" means The Travelers Indemnity Company,
Travelers Casualty and Surety Company and the Standard Fire Insurance
Company and their respective property-casualty subsidiaries and
affiliates.
(o) "PARTICIPANT" means an Eligible Agency that elects to participate
in the Plan.
(p) "PLAN" shall have the meaning ascribed to such term in Section 1.
(q) "PRODUCER" means, with respect to any Agency, a property-casualty
insurance sales agent who is a principal or employee of such Agency.
(r) "RESTRICTED AGENCY STOCK AWARD AGREEMENT" shall have the meaning
ascribed to such term in Section 5(b).
(s) "RESTRICTED PERIOD" means the three-year period (or such other
period determined by the Committee) together with any extension thereof
approved pursuant to the Plan, commencing on the date of an award of
Restricted Agency Stock;
(t) "RESTRICTED AGENCY STOCK" means shares of Common Stock that are
subject to the restrictions and potential forfeiture set forth in Section
5.
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(u) "SUBSIDIARY" means any entity at least one-half of whose
outstanding voting stock, or beneficial ownership for entities
other than corporations, is owned, directly or indirectly, by
Travelers, or which is otherwise controlled directly or indirectly
by Travelers.
(v) "TRAVELERS" shall have the meaning ascribed to such term in
Section 1.
(w) "TRAVELERS BOARD" means the Board of Directors of Travelers.
SECTION 3. ELIGIBILITY AND PARTICIPATION.
(a) RESTRICTED AGENCY STOCK. Agencies that earn the minimum eligible
incentive and are selected from time to time by the Committee, in its discretion
("Eligible Agencies"), shall be eligible to participate in the Plan and receive
one or more awards of Restricted Agency Stock. The minimum eligible incentive
that must be earned for the calendar year for which such eligible incentive is
earned (the "Base Year") before a Restricted Agency Stock award can be elected
is currently $5,000. This minimum applies in respect of each eligible incentive
program and for each Business Division to which such incentive relates. The
Committee may, in its discretion, provide for alternative minimum incentives
that must be earned. Commercial Lines, Personal Lines and Bond are not
aggregated for this purpose.
(b) AGENCY STOCK. Eligible Agencies that are selected from time to
time by the Committee or pursuant to criteria establish by the Committee, in its
discretion, shall be eligible to receive one or more awards of Agency Stock
under the Plan.
SECTION 4. AMOUNT AND FORM OF AWARDS.
(a) RESTRICTED AGENCY STOCK. Eligible Agencies that make a timely
election may be awarded Restricted Agency Stock in such amounts as are described
below. For Eligible Agencies electing to participate, unless otherwise
determined by the Committee, the amount of any award of Restricted Agency Stock
that may be elected shall not be less than an amount equal to 10% of the
eligible incentive and not more than an amount equal to 50% of eligible
incentive; provided, that any such election and award shall be separately
determined with respect to each eligible incentive program for each of
Commercial Lines, Personal Lines and Bond. An election to receive Restricted
Agency Stock shall be of no force and effect unless made in accordance with the
administrative procedures established by the Committee from time to time,
including, without limitation, timely receipt by Travelers of an annual election
form from the Eligible Agency. Awards of Restricted Agency Stock shall be
granted at such time as the Committee may in its discretion determine, and the
Committee may also in its discretion provide for alternative methods for grants
of awards including but not limited to alternative minimum and maximum awards
and other terms and conditions of awards. Awards of Restricted Agency Stock will
be made in lieu of cash payment of a percentage of the Participant's eligible
incentive.
(b) AGENCY STOCK. Eligible Agencies that are selected by the Committee
pursuant to Section 3(b) may be awarded Agency Stock in such amounts as are
determined by the Committee
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in its discretion. Awards of Agency Stock shall be granted to those Eligible
Agencies (which need not be Participants under the Plan) at such time as the
Committee may in its discretion determine, without the making of any election on
the part of the recipient. Awards of Agency Stock will be in addition to any
cash or other compensation, including awards of Restricted Agency Stock, if any,
otherwise payable to the Eligible Agency selected to receive such award.
(c) The number of shares of Common Stock which may be issued under the
Plan, either as Restricted Agency Stock or Agency Stock, shall be equal to Four
Hundred Thousand (400,000) shares of Common Stock, subject to adjustment as
provided in Section 8. Common Stock issued pursuant to Awards granted under the
Plan may be either authorized but unissued shares or previously issued shares
reacquired by Citigroup, or both. In the event Restricted Agency Stock is
forfeited prior to the end of the Restricted Period, the shares of Common Stock
called for by such award of Restricted Agency Stock will become available for
future awards.
SECTION 5. RESTRICTED AGENCY STOCK.
(a) The number of shares of Restricted Agency Stock awarded to a
Participant under the Plan shall be determined by a formula or formulas approved
by the Committee, which will take into account elections made under the Plan. In
order to reflect the impact of the restrictions on the value of the Restricted
Agency Stock, as well as the possibility of forfeiture of the Restricted Agency
Stock, the fair market value of Common Stock shall be discounted at 25% in
determining the number of shares of Restricted Agency Stock to be awarded. The
Committee may, where it deems appropriate, and in its discretion, provide for an
alternative discount rate. For purposes of this Plan, the fair market value of
Common Stock for an award will be the average of the Common Stock's closing
prices on the Composite Tape of the New York Stock Exchange, Inc. for the five
(5) trading days prior to the date of the award. The dollar value of an award
will be divided by the discounted market value to determine the number of shares
of Restricted Agency Stock in an award. The value of fractional shares will be
paid currently in cash. In the event the Committee provides for alternative
methods for grants of awards, the Committee may, in its discretion, provide for
alternative methods of determining the fair market value of the Common Stock for
such awards, and may also provide for alternative forfeiture provisions. In the
event there is an adjustment to the incentive award after the date of an award
of Restricted Agency Stock under the Plan, Travelers may pay the adjustment
amount entirely in cash.
(b) Unless the Committee determines otherwise, a Participant will not
have any rights with respect to an award of Restricted Agency Stock unless or
until such Participant has executed an agreement evidencing the award in form
and substance satisfactory to the Committee (a "Restricted Agency Stock Award
Agreement") and has delivered a fully executed copy thereof to Travelers. Each
Participant that is awarded Restricted Agency Stock may, but need not, be issued
a stock certificate in respect of such shares of Restricted Agency Stock. In the
event a certificate is not issued in the name of a Participant, a "book entry"
(i.e., a computerized or manual entry) will be made in the records of Citigroup
to evidence the award of shares of Restricted Agency Stock to such Participant.
Such Citigroup records shall, absent manifest error, be binding on the
Participants. Each certificate, if any, registered in the name of a Participant
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shall bear an appropriate legend referring to the terms, conditions and
restrictions applicable to such award, substantially in the following form:
"The transferability of the certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) of the Travelers Property Casualty Corp. Agency Capital
Accumulation Plan for Citigroup Stock and a Restricted Agency Stock Award
Agreement entered into between the registered owner and Travelers
Property Casualty Corp. Copies of such Plan and Agreement are on file in
the offices of Travelers Property Casualty Corp."
Any stock certificate issued in the name of a Participant evidencing
shares of Restricted Agency Stock will be held in the custody of Citigroup until
the restrictions thereon shall have lapsed, and, as a condition of such issuance
of a certificate for Restricted Agency Stock, the Participant shall have
delivered a stock power, endorsed in blank, relating to the shares covered by
such certificate.
(c) The shares of Restricted Agency Stock awarded pursuant to this
Section 5 shall be subject to the following restrictions and conditions:
(i) Subject to the provisions of the Plan and the Restricted
Agency Stock Award Agreements, during the Restricted Period the
Participant shall not be permitted to sell, transfer, pledge or assign
shares of Restricted Agency Stock awarded under the Plan. The foregoing
shall not prohibit a Participant from entering into agreements with its
Producers with respect to rights and obligations associated with the
Restricted Agency Stock; provided, however, that Producers shall have no
rights hereunder and neither the Committee, Travelers, Citigroup nor any
of their Subsidiaries or affiliates nor any of their respective
directors, officers or employees shall have any liability thereunder or
with respect thereto. The Committee may, in its discretion, (x) initially
provide for an alternative Restricted Period or alter the Restricted
Period for a previously granted award (provided that the Committee may
not extend the Restricted Period for a previously granted award without
the Participant's written consent), (y) during any extension of such
Restricted Period, provide for alternative restrictions and (z) provide
for the lapse of any such restrictions in installments and accelerate or
waive any such restrictions in whole or in part based on such factors and
such circumstances as the Committee may determine, in its discretion.
(ii) Unless the Committee in its discretion shall determine
otherwise at or prior to the time of the grant of any award, the
Participant shall have the right to direct the vote of its shares of
Restricted Agency Stock during the Restricted Period, in accordance with
paragraph (e) of this Section 5. The Participant shall have the right
during the Restricted Period to receive any regular dividends or dividend
equivalents on such shares of Restricted Agency Stock. The Committee
shall in its discretion determine the Participant's rights with respect
to extraordinary dividends or distributions on the shares of Restricted
Agency Stock.
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(iii) Shares of Common Stock shall be delivered to the Participant
either in certificate form or by crediting a designated brokerage account
at Salomon Smith Barney Inc. after, and only after, the Restricted Period
has expired (or such earlier time as the restrictions may lapse in
accordance with paragraph (c)(i) of this Section 5) so long as there has
been no event resulting in forfeiture of such award of Restricted Agency
Stock.
(d) Subject to the provisions of paragraph (c)(i) of this Section 5,
the following provisions shall apply to a Participant's shares of Restricted
Agency Stock prior to the end of the Restricted Period (including extensions):
Each award of Restricted Agency Stock shall be subject to
forfeiture based upon a separate determination of performance in respect
of each eligible incentive program for the Business Division which the
award was originally granted. In the event that in any of the calendar
years during the Restricted Period immediately following the Base Year
such Participant's Annual Premium with Travelers and the Insurance
Companies is reduced by 25% or more for each award granted in Commercial
Lines, Personal Lines or Bond compared to such Participant's Annual
Premium (in the applicable Business Division) with Travelers and such
Insurance Companies in the Base Year (as adjusted, if applicable, as
provided below), such Participant will forfeit all Restricted Agency
Stock awarded with respect to such Base Year related to the Business
Division in which the Annual Premium was reduced. Forfeiture
determinations will be made separately for each award with reference to
the applicable Base Year and Business Division for that award. In
addition, unless the Committee in its discretion shall determine
otherwise, termination of a participant's agency agreement with the
Insurance Companies during the Restricted Period will result in
forfeiture of all Restricted Agency Stock previously awarded to such
Participant. Upon forfeiture, the Participant will have no further rights
in the Restricted Agency Stock or the Eligible Incentive award in respect
of which the Restricted Agency Stock was awarded. Upon forfeiture, an
amount determined by the Committee (currently 50%) of the amount of the
incentive award allocated to CAP with respect to the forfeited shares
will be paid to the Agency. The determination of whether there is a
reduction in Annual Premiums in any given year compared to the applicable
Base Year resulting in forfeiture will be based on Annual Premiums in the
Business Division in which the Restricted Agency Stock was awarded, and
will be made by the Committee, in its discretion. In the event any
reduction in Annual Premiums resulting in forfeiture is the result of the
Insurance Companies terminating the Participant's appointment other than
for Cause, the restrictions on all Restricted Agency Stock previously
awarded to such Participant in respect of the Business Division for which
the appointment was terminated will immediately lapse. In the event any
reduction in Annual Premiums resulting in forfeiture is the result of the
Insurance Companies withdrawing from a Commercial Lines, Personal Lines
or Bond market or product that is material to a Participant, all
determinations of forfeiture with respect to such Participant under this
Section 5 shall be recalculated and the Participant's Base Year Annual
Premium in the applicable Business Division shall be reduced by the
percentage of the prior calendar year Annual Premium that was
attributable to the market or product withdrawn; provided, however, that
if the reduction is 90% or more, the restrictions on all Restricted
Agency Stock previously
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awarded to such Participant in respect of the Business Division in which
the Annual Premium was so reduced will immediately lapse. For these
purposes, (i) whether a "withdrawal" has occurred will be a determination
made by the Committee in its discretion and (ii) "material" shall be
deemed to be 10% of that Participant's Annual Premium writings with the
Insurance Companies with respect to the Business Division in which the
Annual Premium was reduced; provided, however, that the Committee shall
have discretion to deem any other circumstances or event to be a material
withdrawal.
(e) Unless the Committee in its discretion shall determine otherwise
at or prior to the time of the grant of any award of Restricted Agency Stock,
during the Restricted Period the shares of Restricted Agency Stock shall be
voted by Travelers senior administrative officer in charge of administering the
Plan, or such other person as the Committee may designate (the "Plan
Administrator"), and the Plan Administrator shall vote such shares in accordance
with instructions received from Participants. Shares as to which no instructions
are received shall be voted by the Plan Administrator proportionately in
accordance with instructions received from the Participants in the Plan.
SECTION 6. AGENCY STOCK.
(a) The number of shares of Agency Stock awarded to an Eligible Agency
under the Plan may be determined by a formula or formulas approved by the
Committee or may be determined by the Committee individually on a case by case
basis. Shares of Agency Stock awarded to Eligible Agencies pursuant to the Plan
will generally not be subject to the restrictions or conditions set forth in
Section 5; provided, however, that if the Committee so determines, such shares
may be subject to sale or other restrictions.
(b) Each Eligible Agency that is awarded Agency Stock shall be issued
a stock certificate in respect of such shares of Agency Stock or may have the
shares credited to the Eligible Agency's account at Salomon Smith Barney Inc.
(c) If the Committee determines to subject any shares of Agency Stock
to sale or other restrictions, unless the Committee determines otherwise, the
Eligible Agency that is granted the award that is so subject shall not have any
rights with respect to such award of Agency Stock unless or until such Agency
has executed an agreement evidencing the award in form and substance
satisfactory to the Committee (an "Agency Stock Award Agreement") and has
delivered a fully executed copy thereof to Travelers. In the event an Eligible
Agency is awarded Agency Stock that is subject to sale or other restrictions,
the certificate registered in the name of the Eligible Agency shall bear an
appropriate legend referring to the terms, conditions and restrictions
applicable to such award. The Committee shall require that any stock certificate
issued in the name of an Eligible Agency evidencing shares of Agency Stock that
are subject to sale or other restrictions be held in the custody of Citigroup
until the restrictions thereon shall have lapsed, and that, as a condition of
such issuance of a certificate for Agency Stock, the Eligible Agency shall have
delivered a stock power, endorsed in blank, relating to the shares covered by
such certificate.
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SECTION 7. ADMINISTRATION.
The Plan shall be administered by the Committee.
The Committee shall have the power and authority to make awards of
Restricted Agency Stock and Agency Stock pursuant to the terms of the Plan.
In particular, the Committee shall have the authority:
(a) to select those Agencies that are Eligible Agencies;
(b) to determine the minimum eligible incentive that must be earned
before a Restricted Agency Stock award can be elected hereunder;
(c) to determine whether and to what extent Restricted Agency Stock is
to be granted to Eligible Agencies hereunder;
(d) to determine the minimum and maximum percentage of eligible
incentive payable in Restricted Agency Stock that can be elected
hereunder;
(e) to select those Eligible Agencies that are to receive Agency Stock
hereunder;
(f) to determine whether and to what extent Agency Stock is to be
granted to Eligible Agencies hereunder;
(g) to determine the number of shares of Common Stock to be covered by
each award granted hereunder;
(h) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any award granted hereunder; and
(i) to determine the terms and conditions, not inconsistent with the
terms of the Plan, which shall govern all written instructions and forms
of agreements evidencing the Restricted Agency Stock and Agency Stock.
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable; to interpret the terms and provisions of the
Plan and any award issued under the Plan; and to otherwise supervise the
administration of the Plan. All decisions made by the Committee pursuant to the
provisions of the Plan shall be final and binding on all persons, including
Travelers, Eligible Agencies and the Participants. The Committee may delegate
some or all of its authority over the administration of the Plan to any other
persons or a committee. Unless the Committee determines otherwise, authority
over the administration of the Plan is hereby delegated to the Nominations,
Compensation and Corporate Governance Committee (or any successor committee or
body) of the Board of Directors of Travelers Property Casualty Corp.
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which may delegate some or all of its authority over the administration of the
Plan to any other persons or a Committee.
SECTION 8. ADJUSTMENTS UPON A CHANGE IN COMMON STOCK.
In the event of any change in the outstanding Common Stock of Citigroup
by reason of any stock split, stock dividend, distribution, recapitalization,
merger, consolidation, reorganization, combination or exchange of shares or
other similar event if in the determination of the Committee such change
equitably requires an adjustment in the number or kind of shares that may be
issued under the Plan pursuant to Section 4(c), such adjustment shall be made by
the Committee and shall be conclusive and binding for all purposes of the Plan.
SECTION 9. AMENDMENT AND TERMINATION.
The Plan may be amended or terminated at any time and from time to time
by the Travelers Board. Neither an amendment to the Plan nor the termination of
the Plan shall adversely affect any right of any Eligible Agency with respect to
any Restricted Agency Stock or Agency Stock theretofore granted without such
Eligible Agency's written consent. Subject to the foregoing limitations, the
Committee shall have the authority to amend certain Plan provisions to the
extent necessary to permit participation in the Plan by Agencies that are
located outside of the United States on terms and conditions which are
comparable to those afforded to Agencies located within the United States.
SECTION 10. GENERAL PROVISIONS.
(a) All certificates for shares of Common Stock delivered under the
Plan shall be subject to such stop transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange upon
which the Common Stock is then listed, and any applicable federal or state
securities law.
(b) Nothing contained in the Plan shall prevent the Board from
adopting other or additional compensation arrangements, subject to stockholder
approval if such approval is required; and such arrangements may be either
generally applicable or applicable only in specific cases. The adoption of the
Plan shall not confer upon any Agency any right to continue to represent the
Insurance Companies in the sale of insurance or otherwise, as the case may be,
nor shall it interfere in any way with the right of Travelers or any of the
Insurance Companies to terminate the agency relationship with any of its
Agencies at any time. Nothing contained herein is intended or shall be construed
to modify or supersede the terms of any existing contracts between an Agency and
the Insurance Companies, including but not limited to any agency agreement, any
profit sharing or performance plus agreement or any agency benefits agreement.
(c) No member of the Citigroup Board, the Travelers Board or the
Committee, nor any officer, director or employee of Citigroup or Travelers
acting on behalf of Citigroup Board or the Travelers Board or the Committee,
shall be personally liable for any action, determination, or
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interpretation taken or made in good faith with respect to the Plan and all
members of the Travelers Board and the Citigroup Board and the Committee and
each and any officer or employee of Travelers or Citigroup acting on their
behalf shall, to the extent permitted by law, be fully indemnified and protected
by Travelers or Citigroup or the Insurance Companies, as the case may be, in
respect of any such action, determination or interpretation.
(d) An Eligible Agency's rights and interest under the Plan may not be
assigned or transferred in whole or in part either directly or by operation of
law or otherwise including, but not by way of limitation, execution, levy,
garnishment, attachment, pledge, bankruptcy or in any other manner and no such
right or interest of any Eligible Agency in the Plan shall be subject to any
obligation or liability of such Eligible Agency. Notwithstanding the foregoing,
a Participant may designate a successor in interest to its rights and interest
under the Plan if such successor is an Eligible Agency or is designated by the
Committee as an Eligible Agency and agrees to all of the terms hereof and under
the applicable Restricted Agency Stock Award Agreement and Agency Stock Award
Agreement, subject to the Committee's consent.
(e) Travelers and its Subsidiaries shall have the right to deduct from
any payment made under the Plan any federal, state or local income taxes or
other amounts required by law to be withheld with respect to such payment. It
shall be a condition to the obligation of Travelers to cause Citigroup to issue
Common Stock upon the lapse of restrictions on Restricted Agency Stock or upon
the grant of an award of Agency Stock that the Eligible Agency pay to Travelers,
upon its demand, such amount as may be requested by Travelers for the purpose of
satisfying any liability to withhold federal, state or local income taxes or
other amounts. If the amount requested is not paid, Travelers may refuse to
cause Citigroup to issue shares.
(f) Notwithstanding anything to the contrary contained herein, upon a
"Change of Control" (defined below), the restrictions on each award of
Restricted Agency Stock and Agency Stock (if any) shall immediately lapse.
"Change of Control" shall mean the occurrence of any of the following, unless
such occurrence shall have been approved or ratified by at least a two-thirds
(2/3) vote of the Continuing Directors (defined below): (A) any person within
the meaning of Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), other than Citigroup or any affiliates thereof,
shall have become the beneficial owner, within the meaning of Rule 13d-3 under
the Exchange Act, of shares of stock of Citigroup having twenty five percent
(25%) or more of the total number of votes that may be cast for election of the
directors of Citigroup, or (B) there shall have been a change in the composition
of the Board such that at any time a majority of the Board shall have been
members of the Board for less than twenty-four (24) months, unless the election
of each new director who was not a director at the beginning of the period was
approved by a vote of at least two-thirds (2/3) of the directors then still in
office who were directors at the beginning of such period, or who were approved
as directors pursuant to the provisions of this paragraph (the "Continuing
Directors").
(g) All claims and disputes between an Agency and Travelers or
Citigroup or any of the Insurance Companies arising out of the Plan or any award
granted hereunder shall be submitted to arbitration in accordance with the rules
and procedures of the American Arbitration Association. Notice of demand for
arbitration shall be given in writing to the other party and
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shall be made within a reasonable time after the claim or dispute has arisen.
The award rendered by the arbitrator shall be made in accordance with the Plan,
shall be final, and judgment may be entered upon it in accordance with
applicable law in any court having jurisdiction thereof. The provisions of this
Section 10(g) shall be specifically enforceable under applicable law in any
court having jurisdiction thereof.
(h) The validity, construction, interpretation, administration and
effect of the Plan and of its rules and regulations, and rights relating to the
Plan, shall be determined solely in accordance with the laws of the State of
Delaware.
(i) No Common Stock or other securities shall be issued hereunder
unless counsel for Citigroup shall be satisfied that such issuance will be in
compliance with all applicable federal, state and international securities
statutes, rules and regulations.
(j) If any term or provision of this Plan or the application thereof
to any person or circumstances shall, to any extent, be invalid or
unenforceable, then the remainder of the Plan, or the application of such term
or provision to persons or circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby, and each term and
provision hereof shall be valid and be enforced to the fullest extent permitted
by applicable law.
(k) Each Restricted Agency Stock Award Agreement and Agency Stock
Award Agreement, if any (together, the "Award Agreements"), is entered into by
the Agency and Travelers and the Agency's Producers are not a party to it and
have no rights thereunder or hereunder. Any arrangements or undertakings entered
into between an Agency and such Agency's Producers establish rights and
obligations solely between and among such parties and do not create any
obligations on the part of or bind Citigroup, Travelers or any of their
subsidiaries or affiliates, which shall have no liability thereunder. The
Producers must look to the Agencies, and not to Travelers, Citigroup or any of
their subsidiaries or affiliates, for the benefit of any obligations the
Agencies may have undertaken pursuant to any arrangement and the Producers bear
all risk with respect to the fulfillment by the Agencies of such obligations.
This Plan and the Award Agreements are for the protection and benefit of
Travelers, Citigroup and the Eligible Agencies and no other person shall be a
direct or indirect beneficiary of or have any direct or indirect cause of action
or claim in connection therewith.
If you are in default on any financial obligation due us or any of our
insurance affiliates, we may offset any funds you owe us against any commission,
profit sharing, or other payment, we owe you.
SECTION 11. EFFECTIVE DATE OF PLAN.
The Plan shall be effective on November 1, 1999. The Plan shall remain
effective until terminated by the Board in accordance with Section 9.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses payable by Citigroup
in connection with the Securities being registered hereby. All of the fees set
forth below are estimates except for the Commission registration fee.
<TABLE>
<S> <C>
Registration Fee.................................... $ 4,084
Printing Fees....................................... 5,000
Accountants' Fees and Expenses...................... 15,000
Miscellaneous....................................... 416
--------
Total.......................................... $ 24,500
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subsection (a) of Section 145 of the Delaware General Corporation Law
("DGCL") 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,
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 in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, 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 of Chancery or such
other court shall deem proper.
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Section 145 further provides that to the extent a director or officer of
a corporation has been successful on the merits or otherwise in the defense of
any action, suit or proceeding referred to in subsections (a) and (b) of Section
145, or in 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 indemnification provided for by
Section 145 shall not be deemed exclusive of any other rights to which the
indemnified party may be entitled; that indemnification provided for by Section
145 shall, unless otherwise provided when authorized or ratified, continue as to
a person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of such person's heirs, executors and administrators; and
empowers the corporation to purchase and maintain insurance on behalf of a
director or officer of the corporation against any liability asserted against
him and 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. Section 4 of Article IV of
Citigroup's By-Laws provides that Citigroup shall indemnify its directors and
officers to the fullest extent permitted by the DGCL.
Citigroup also provides liability insurance for its directors and
officers which provides for coverage against loss from claims made against
directors and officers in their capacity as such, including, subject to certain
exceptions, liabilities under the federal securities laws.
Section 102(b)(7) of the DGCL provides that a certificate of
incorporation may contain a provision eliminating or limiting the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director provided that such provision
shall not eliminate or limit the liability of a director (i) for any breach of
the director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any
transaction from which the director derived an improper personal benefit.
Article TENTH of Citigroup's Restated Certificate of Incorporation limits the
liability of directors to the fullest extent permitted by Section 102(b)(7).
ITEM 16. EXHIBITS.
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
5.1 Opinion of Stephanie B. Mudick, Esq., General Counsel -- Corporate Law,
with respect to the legality of securities being registered.
23.1 Consent of Stephanie B. Mudick, Esq. (included in her opinion filed as
Exhibit 5.1).
23.2 Consent of KPMG LLP.*
23.3 Consent of Arthur Andersen LLP.
24.1 Powers of Attorney of certain directors of Citigroup.
99.1 The Travelers Property Casualty Corp. Agency Capital Accumulation Plan
for Citigroup Stock, included as Annex A to the Prospectus
</TABLE>
II-2
<PAGE> 27
included as part of this Registration Statement.*
*Filed herewith.
ITEM 17. UNDERTAKING.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement;
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii) to include any material information with respect to the Plan of
Distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement; provided,
however, that the undertakings set forth in paragraphs (i) and (ii) above do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or furnished to
the Commission by Citigroup Inc. pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post- effective amendment 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.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of Citigroup
Inc.'s Annual Report pursuant to Section 13(a) or Section 15(d) of the Exchange
Act 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.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions referred to in Item 15 (other than the
insurance policies referred to therein), or otherwise, the Registrants have been
advised that, in the opinion of the Securities and Exchange Commission, such
II-3
<PAGE> 28
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
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 its 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 Securities Act and will be governed by
the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Citigroup Inc. certifies that it has reasonable grounds to believe it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement or amendment thereto to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on November 13, 2000.
CITIGROUP INC.
By: /s/ Todd S. Thomson
------------------------------
Name: Todd S. Thomson
Title: Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement or amendment thereto has been signed by the
following persons in the capacities indicated on November 13, 2000.
<TABLE>
<CAPTION>
Signatures Title
---------- -----
<S> <C>
/s/ Sanford I. Weill Chairman, Chief Executive Officer (Principal
------------------------------- Executive Officer) and Director
Sanford I. Weill
/s/ Todd S. Thomson
------------------------------- Chief Financial Officer
Todd S. Thomson (Principal Financial Officer)
/s/ Irwin Ettinger
------------------------------- Chief Accounting Officer
Irwin Ettinger (Principal Accounting Officer)
</TABLE>
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<PAGE> 29
/s/ Roger W. Trupin Controller
------------------------------- (Principal Accounting Officer)
Roger W. Trupin
*
------------------------------ Director
C. Michael Armstrong
*
------------------------------- Director
Alain J.P. Belda
*
------------------------------- Director
Kenneth J. Bialkin
------------------------------- Director
Kenneth T. Derr
------------------------------- Director
John M. Deutch
*
------------------------------- Director
Ann Dibble Jordan
------------------------------- Director
Robert I. Lipp
*
------------------------------- Director
Reuben Mark
*
------------------------------- Director
Michael T. Masin
*
------------------------------- Director
Dudley C. Mecum
*
------------------------------- Director
Richard D. Parsons
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<PAGE> 30
*
------------------------------- Director
Andrall E. Pearson
------------------------------- Director
Robert E. Rubin
*
------------------------------- Director
Franklin A. Thomas
*
------------------------------- Director
Arthur Zankel
*By: /s/ Stephanie B. Mudick
-------------------------------
Stephanie B. Mudick
Attorney in-fact under the
Powers of Attorney filed
As Exhibit 24 hereto
II-6
<PAGE> 31
EXHIBITS
5.1 Opinion of Stephanie B. Mudick, Esq., General Counsel -- Corporate Law,
with respect to the legality of the securities being registered.
23.1 Consent of Stephanie B. Mudick, Esq. (included in her opinion filed as
Exhibit 5.1).
23.2 Consent of KPMG LLP.*
23.3 Consent of Arthur Andersen LLP.
24.1 Powers of Attorney of certain directors of Citigroup.
99.1 The Travelers Property Casualty Corp. Agency Capital Accumulation Plan for
Citigroup Stock, included as Annex A to the Prospectus included as part of
this Registration Statement.*
* Filed herewith
II-7
