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| C > SEC Filings for C > Form 8-K on 19-Mar-2009 | All Recent SEC Filings |
19-Mar-2009
Unregistered Sale of Equity Securities
• The warrants entitle the Private Holders to purchase shares of Citigroup common stock at $0.01 a share if the shareholder authorization is not received within six months after the closing of the Exchange Agreement Transactions. The maximum number of shares of common stock issuable upon exercise of the warrants is 790,000,000 shares. The warrants will be cancelled if shareholder authorization is received.
• The Exchange Agreement Transactions are exempt from registration under Section 3(a)(9) of the Securities Act of 1933, as amended.
Conditions to Closing: The respective obligations of Citigroup and the Private
Holders to consummate the Exchange Agreement Transactions are subject to the
satisfaction or waiver by Citigroup or the Private Holders, as applicable, of
the following conditions at or before closing:
• absence of any law, rule, order, injunction or judgment prohibiting or
preventing the completion of the Exchange Agreement Transactions,
subject, in the case of the Private Investors, to certain materiality
exceptions;
• the closing (or concurrent closing) of the U.S. government exchange for up to $12.5 billion of its preferred stock;
• notice having been provided to Citigroup shareholders that Citigroup will issue the interim securities and warrants, and the shares of common stock issuable upon conversion of the interim securities and exercise of the warrants without obtaining shareholder approval (other than the shareholder authorization of the additional common stock needed for the transactions) as required by, and in compliance with, the NYSE Listed Company Manual and
the ten-day notice period set forth in Section 312.05 having passed after such notice has been provided;
• the accuracy of the representations and warranties made by the respective Private Holder or Citigroup, as the case may be, in the respective Exchange Agreement, subject to certain materiality exceptions;
• the respective Private Holder or Citigroup, as the case may be, having performed the obligations required to be performed by it at or prior to the closing; and
• the closing (or concurrent closing) of Exchange Agreement Transactions with respect to convertible preferred stock having an aggregate liquidation value of at least $11.5 billion.
Representations and Warranties and Covenants: The Exchange Agreements contain
representations and warranties made by Citigroup and the Private Holders, a
number of which are qualified by materiality or the absence of a material
adverse effect. The Exchange Agreements also contain a number of covenants made
by Citigroup and the Private Holders. The covenants include:
• Reasonable Best Efforts. Citigroup and the Private Holders have agreed
to use their reasonable best efforts to consummate the Exchange
Agreement Transactions.
• Exchange Listing. Citigroup has agreed to use its reasonable best efforts to cause the securities issued to each Private Holder to be approved for listing on the NYSE, subject to relevant listing requirements.
• Publicity. Citigroup and the Private Holders have agreed not to make a public announcement concerning the Exchange Agreement Transactions without the prior consent of the other party.
• Depositary Shares. Citigroup has agreed, upon the request of any Private Holder, to enter into customary depositary arrangements to allow for the interim securities to be issued in the form of depositary shares.
• Standstill. Each of the Private Holders has agreed to a customary
standstill provision that limits its ability to (i) directly or
indirectly acquire or attempt to acquire any securities of Citigroup
that would result in such Private Holder controlling a specific
percentage of outstanding shares of voting stock of Citigroup and (ii)
(w) making or in any way participating in any solicitation of proxies
to vote, or seeking to advise or influence any person with respect to
the voting of any voting securities of Citigroup or any of its
subsidiaries, (x) seeking to influence, advise, change or control the
management, board of directors, policies, affairs or strategy of
Citigroup by way of any public communication or other communication to
security holders, (y) making any proposal for any acquisition of, or
similar extraordinary transaction involving, Citigroup or a material
portion of its securities or assets, and (z) entering into any
agreements or understandings with any person (other than Citigroup) for
purposes of any of the actions described in clauses (w) through (z)
above. The Private Holders' obligations under the standstill will
terminate on the later of the (i) the third anniversary of the closing
of the Exchange Agreement Transactions and (ii) the date on which such
Private Holder beneficially owns less than 2% of the outstanding common
stock of Citigroup.
• Equivalent Terms. Citigroup has agreed to provide each of the Private Holders the most favorable price and other material terms offered to any other Private Holder in the Exchange Agreement Transactions and has agreed that the price offered in the Exchange Agreement Transactions will be no less favorable to the Private Holders than the price offered in the public exchange offers. Citigroup has also agreed that the exchanges with the U.S.
government will be consummated on pricing terms no more favorable to the U.S. government than those previously disclosed by Citigroup.
• Preemptive Rights. In the event Citigroup consummates a public or non-public offering of any common stock or securities convertible or exercisable into or exchangeable for common stock at a price less than $3.25 (or if the conversion, exercise or exchange price per share of common stock is less than $3.25) during the one year period commencing with the closing of the Exchange Agreement Transactions, Citigroup has agreed to provide each of the Private Holders the right to purchase, on the same terms as in the offering, an amount of such securities that, in the aggregate, enables it to maintain its percentage ownership interest (assuming the exercise, conversion or exchange of all exercisable, convertible or exchangeable securities it owns) in Citigroup, subject to certain terms and conditions.
• Reorganization Treatment. Citigroup and each of the Private Holders have agreed to treat the Exchange Agreement Transactions and U.S. government exchange as a "reorganization" for U.S. federal income tax purposes.
Termination Events: If the Exchange Agreement Transactions are not consummated
on or prior to September 18, 2009, the Exchange Agreements will automatically
terminate.
Other: One of the Private Holders with whom Citigroup entered into an Exchange
Agreement is the Government of Singapore Investment Corporation Pte Ltd ("GIC").
The GIC Exchange Agreement contains the following additional material
provisions:
• GIC's obligation to consummate the GIC Exchange Agreement is subject to
GIC's having obtained certain required regulatory approvals, consents or
exemptions required in respect to its participation in the GIC Exchange
Agreement Transactions;
• GIC has agreed that, to the extent it or any of its affiliates own securities representing more than 9.9% of the aggregate voting power of Citigroup, it will vote or cause to be voted such excess voting power in the same proportion as all other shares are voted (other than any shares voted by the direction of GIC or any of its affiliates or the U.S. government) and has granted Citigroup irrevocable proxies with respect to this excess voting power;
• If at any time GIC's beneficial ownership of common stock exceeds 19.9% of the total outstanding shares of common stock of Citigroup, GIC is deemed to control Citigroup by any law or governmental authority, or any other applicable laws would result in the imposition of a financial support obligation or materially adverse compliance burden on GIC, then Citigroup has agreed to, at GIC's request, convert a sufficient number of securities held by GIC into non-voting participating preferred stock and take such other steps that would avoid such an imposition on GIC.
A copy of the press release announcing the execution of the Exchange Agreements
described above is being filed as Exhibit 99.1 to this Form 8-K and is
incorporated herein by reference in its entirety.
In connection with the proposed public exchange offer, Citigroup has filed with
the Securities and Exchange Commission (the "SEC") a Registration Statement on
Form S-4, and will file a tender offer statement on Schedule TO, that contains a
prospectus and related exchange offer materials. This registration statement has
not yet become effective. Citigroup will mail the prospectus to the holders of
its series of convertible and non-convertible public preferred stock and TruPs
and ETruPs that may be eligible to participate in the public exchange offers.
Holders of these series of preferred stock, TruPs
and ETruPs are urged to read the prospectus and related exchange offer materials
because they contain important information. You may obtain a free copy of the
prospectus and related exchange offer materials that Citigroup filed with the
SEC at the SEC's website at www.sec.gov. The prospectus and related exchange
offer materials may also be obtained for free by accessing Citigroup's website
at www.citigroup.com and clicking on the link for "Investors" and then clicking
on the link for "All SEC Filings" or by contacting Citigroup at the following
address or telephone number: Citigroup Document Services, 540 Crosspoint
Parkway, Getzville, NY 14068, or within the United States, at +1-877-936-2737 or
outside the United States, at +1-716-730-8055, or by e-mailing a request to
docserve@citigroup.com.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number
99.1 Press Release, dated March 19, 2009, issued by Citigroup Inc.
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