Exhibit 5.02
[LETTERHEAD OF SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP]
December 15, 1998
Citigroup Inc.
153 East 53rd Street
New York, NY 10043
Citigroup Capital VI
Citigroup Capital VII
Citigroup Capital VIII
Citigroup Capital IX
Citigroup Capital X
Citigroup Capital XI
Citigroup Capital XII
Citigroup Capital XIII
c/o Citigroup Inc.
153 East 53rd Street
New York, NY 10043
Re: Citigroup Inc.
Citigroup Capital VI
Citigroup Capital VII
Citigroup Capital VIII
Citigroup Capital IX
Citigroup Capital X
Citigroup Capital XI
Citigroup Capital XII
Citigroup Capital XIII
Registration Statement on Form S-3
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Ladies and Gentlemen:
We have acted as special counsel to (1) Citigroup Capital VI (formerly
Travelers Capital VI), Citigroup Capital VII (formerly Travelers Capital VII),
Citigroup Capital VIII (formerly Travelers Capital VIII), Citigroup Capital IX,
Citigroup Capital X, Citigroup Capital XI, Citigroup Capital XII and Citigroup
Capital XIII (each, a "Citigroup Trust" and, together, the "Citigroup Trusts"),
each a statutory business trust created under the laws of the State of Delaware,
and (2)
Citigroup Capital VI
Citigroup Capital VII
Citigroup Capital VIII
Citigroup Capital IX
Citigroup Capital X
Citigroup Capital XI
Citigroup Capital XII
Citigroup Capital XIII
December 15, 1998
Page 2
Citigroup Inc. (formerly Travelers Group Inc.)(the "Company"), a corporation
organized under the laws of the State of Delaware, in connection with the
preparation of a Registration Statement on Form S-3 (the "Registration
Statement"), to be filed by the Company and the Citigroup Trusts with the
Securities and Exchange Commission (the "Commission") on December 15, 1998 under
the Securities Act of 1933, as amended (the "Act"). The Registration Statement
relates to, among other things, the issuance and sale from time to time pursuant
to Rule 415 of the General Rules and Regulations promulgated under the Act, of
the following securities with an aggregate public offering price of up to
$6,000,000,000: (i) capital securities (the "Capital Securities") of each of
the Citigroup Trusts, (ii) unsecured junior subordinated debt securities (the
"Junior Subordinated Debt Securities") of the Company which are to be issued
pursuant to an Indenture, dated as of October 7, 1996, as supplemented by the
First Supplemental Indenture thereto dated as of December 15, 1998 (as so
supplemented, the "Indenture"), between the Company and The Chase Manhattan
Bank, as debt trustee (the "Debt Trustee"), (iii) shares of preferred stock, par
value $1.00 per share (the "Preferred Stock") of the Company to be issued in one
or more series, which may also be issued in the form of depositary shares (the
"Depositary Shares") evidenced by depositary receipts (the "Receipts") pursuant
to one or more deposit agreements (each, a "Deposit Agreement") to be entered
into between the Company and a depositary to be named (the "Depositary") and
(iv) shares of common stock, par value $.01 per share (the "Common Stock"), of
the Company as may be issuable upon conversion of some or all of the Preferred
Stock (the "Offered Common Stock").
The Capital Securities of each Citigroup Trust are to be issued pursuant to
the Amended and Restated Declaration of Trust of such Citigroup Trust (each, a
Citigroup Capital VI
Citigroup Capital VII
Citigroup Capital VIII
Citigroup Capital IX
Citigroup Capital X
Citigroup Capital XI
Citigroup Capital XII
Citigroup Capital XIII
December 15, 1998
Page 3
"Declaration" and, collectively, the "Declarations"), each such Declaration
being among the Company, as sponsor and as the issuer of the Junior Subordinated
Debentures to be held by the Property Trustee (as defined below) of such
Citigroup Trust, Chase Manhattan Bank Delaware, as Delaware trustee (the
"Delaware Trustee"), The Chase Manhattan Bank, as property trustee (the
"Property Trustee"), and Irwin Ettinger and Robert Matza, as regular trustees
(together, the "Regular Trustees").
This opinion is being delivered in accordance with the requirements of Item
601(b)(5) of Regulation S-K under the Act. Capitalized terms used but not
otherwise defined herein have the meanings ascribed to them in the Registration
Statement.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the Registration
Statement, (ii) the certificates of trust of each of (A) Citigroup Capital VI,
as filed with the Secretary of State of the State of Delaware on May 14, 1997
and the amendment thereto filed with the Secretary of State of the State of
Delaware on October 8, 1998, (B) Citigroup Capital VII, as filed with the
Secretary of State of the State of Delaware on May 14, 1997 and the amendment
thereto as filed with the Secretary of State of the State of Delaware on October
8, 1998, (C) Citigroup Capital VIII, as filed with the Secretary of State of the
State of Delaware on May 16, 1997 and the amendment thereto as filed with the
Secretary of State of the State of Delaware on December 7, 1998, (D) Citigroup
Capital IX, as filed with the Secretary of State of the State of Delaware on
December 7, 1998, (E) Citigroup Capital X, as filed with the Secretary of State
of the State of Delaware on December 7, 1998, (F) Citigroup Capital XI, as filed
with the Secretary of State of the State of Dela-
Citigroup Capital VI
Citigroup Capital VII
Citigroup Capital VIII
Citigroup Capital IX
Citigroup Capital X
Citigroup Capital XI
Citigroup Capital XII
Citigroup Capital XIII
December 15, 1998
Page 4
ware on December 7, 1998, (G) Citigroup Capital XII, as filed with the Secretary
of State of the State of Delaware on December 7, 1998 and (H) Citigroup Capital
XIII, as filed with the Secretary of State of the State of Delaware on December
7, 1998 (collectively, the "Certificates of Trust"); (iii) the form of the
Declaration of each of the Citigroup Trusts (including the form of the
designations of the terms of the Capital Securities of such Citigroup Trust
annexed thereto)(collectively, the "Declarations"); (iv) the form of the Capital
Securities of each of the Citigroup Trusts; (v) the form of the capital
securities guarantee agreement (the "Capital Securities Guarantee"), to be
entered into by the Company and The Chase Manhattan Bank, as guarantee trustee
(the "Capital Securities Guarantee Trustee"); (vi) the form of the Junior
Subordinated Debt Securities; (vii) the form of the Deposit Agreement; (viii) an
executed copy of the Indenture; (ix) the Restated Certificate of Incorporation
of the Company, as amended to date (the "Certificate of Incorporation"); (x) the
By-Laws of the Company, as currently in effect (the "By-Laws"); (xi) drafts of
certain resolutions of the Board of Directors of the Company (the "Draft
Resolutions")relating to the issuance and sale of the Offered Debt Securities
(as defined below), the Capital Securities Guarantee, the Preferred Stock, the
Depositary Shares and the Offered Common Stock and related matters and (xii) a
specimen certificate evidencing the Common Stock. We have also examined
originals or copies, certified or otherwise identified to our satisfaction, of
such other documents, certificates and records as we have deemed necessary or
appropriate as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted
Citigroup Capital VI
Citigroup Capital VII
Citigroup Capital VIII
Citigroup Capital IX
Citigroup Capital X
Citigroup Capital XI
Citigroup Capital XII
Citigroup Capital XIII
December 15, 1998
Page 5
to us as originals, the conformity to original documents of all documents
submitted to us as certified or photostatic copies and the authenticity of the
originals of such copies. In making our examination of executed documents or
documents to be executed, we have assumed that the parties thereto, other then
the Company and the Citigroup Trusts, had or will have the power, corporate,
trust or other, to enter into and perform all obligations thereunder and have
also assumed the due authorization by all requisite action, corporate or other,
and execution and delivery by such parties of such documents and that such
documents constitute valid and binding obligations of such parties. In
addition, we have assumed that the Declaration of each Citigroup Trust, the
Capital Securities of each Citigroup Trust, the Capital Securities Guarantee and
the Junior Subordinated Debt Securities will be executed in substantially the
form reviewed by us and that the terms of the Offered Capital Securities
(defined below), the Offered Debt Securities (defined below), the Offered
Preferred Stock (defined below) and the Depositary Shares will have been
established so as not to violate, conflict with or constitute a default under
(i) any agreement or instrument to which the Company or any of the Citigroup
Trusts or their respective property is subject, (ii) any law, rule, or
regulation to which the Company or any of the Citigroup Trusts is subject, (iii)
any judicial or administrative order or decree of any governmental authority or
(iv) any consent, approval, license, authorization or validation of, or filing,
recording or registration with any governmental authority. We have also assumed
that (i) the stock certificates evidencing the Preferred Stock to be issued will
be in a form that complies with, and the terms of such Preferred Stock will be
duly established in accordance with, the Delaware General Corporation Law (the
"DGCL"), and (ii) the stock certificate evidencing any Offered Common Stock
issued will conform to the specimen
Citigroup Capital VI
Citigroup Capital VII
Citigroup Capital VIII
Citigroup Capital IX
Citigroup Capital X
Citigroup Capital XI
Citigroup Capital XII
Citigroup Capital XIII
December 15, 1998
Page 6
certificate examined by us and will be duly executed and delivered. As to any
facts material to the opinions expressed herein which were not independently
established or verified, we have relied upon oral or written statements and
representations of officers, trustees and other representatives of the Company,
the Citigroup Trusts and others.
Members of our firm are admitted to the bar in the States of Delaware and
New York, and we do not express any opinion as to the laws of any other
jurisdiction other than the laws of the United States of America to the extent
specifically referred to herein.
Based on and subject to the foregoing and to the other qualifications and
limitations set forth herein, we are of the opinion that:
1. With respect to the Capital Securities of each Citigroup Trust to be
offered pursuant to the Registration Statement (the "Offered Capital
Securities"), when (i) the Registration Statement, as finally amended (including
all necessary post-effective amendments), has become effective under the Act;
(ii) an appropriate prospectus with respect to the Offered Capital Securities
has been prepared, delivered and filed in compliance with the Act and the
applicable rules and regulations thereunder; (iii) the Declaration of such
Citigroup Trust has been duly executed and delivered by the parties thereto;
(iv) the terms of the Offered Capital Securities have been established in
accordance with the Declaration; (v) the Offered Capital Securities have been
issued, executed and authenticated in accordance with the Declaration and
delivered and paid for in the manner contemplated in the Registration Statement
or any prospectus relating thereto; and (vi) if the Offered Capital Securities
are to be sold pursuant to a firm commitment underwritten
Citigroup Capital VI
Citigroup Capital VII
Citigroup Capital VIII
Citigroup Capital IX
Citigroup Capital X
Citigroup Capital XI
Citigroup Capital XII
Citigroup Capital XIII
December 15, 1998
Page 7
offering, the underwriting agreement with respect to the Offered Capital
Securities has been duly authorized, executed and delivered by the applicable
Citigroup Trust and the other parties thereto, (1) the Offered Capital
Securities will be duly authorized for issuance and will be validly issued,
fully paid and nonassessable, representing undivided beneficial interests in the
assets of such Citigroup Trust and (2) the holders of the Offered Capital
Securities will be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under the
DGCL. We bring to your attention, however, that the holders of the Offered
Capital Securities may be obligated, pursuant to the Declaration of such
Citigroup Trust, to (i) provide indemnity and/or security in connection with,
and pay taxes or governmental charges arising from, transfers of Offered Capital
Securities and (ii) provide security and indemnity in connection with the
requests of or directions to the Property Trustee of such Citigroup Trust to
exercise its rights and powers under the Declaration of such Citigroup Trust.
2. With respect to the Capital Securities Guarantee, when (i) the
Registration Statement, as finally amended (including all necessary
post-effective amendments), has become effective under the Act; (ii) the Draft
Resolutions have been adopted by the Board of Directors of the Company; (iii) an
appropriate prospectus with respect to the Capital Securities Guarantee has been
prepared, delivered and filed in compliance with the Act and the applicable
rules and regulations thereunder; (iv) the Declaration of such Citigroup Trust
is duly executed and delivered by the parties thereto; (v) the terms of the
Offered Capital Securities have been established in accordance with the
Declaration; (vi) the Offered Capital Securities have been issued and executed
in accordance with the
Citigroup Capital VI
Citigroup Capital VII
Citigroup Capital VIII
Citigroup Capital IX
Citigroup Capital X
Citigroup Capital XI
Citigroup Capital XII
Citigroup Capital XIII
December 15, 1998
Page 8
Declaration and paid for in the manner contemplated in the Registration
Statement or any prospectus relating thereto; and (vii) if the Offered Capital
Securities are to be sold pursuant to a firm commitment underwritten offering,
the underwriting agreement with respect to the Capital Securities Guarantee has
been duly authorized, executed and delivered by the applicable Citigroup Trust
and the other parties thereto, the Capital Securities Guarantee, when duly
executed and delivered by the parties thereto, will be a valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms, except to the extent that (a) enforcement thereof may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium, or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii) general
principles of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity) and (b) rights to indemnity and contribution
thereunder may be limited by applicable law or the public policy underlying such
law.
3. With respect to any series of Junior Subordinated Debt Securities (the
"Offered Debt Securities"), when (i) the Registration Statement, as finally
amended (including all necessary post-effective amendments), has become
effective under the Act; (ii) the Draft Resolutions have been adopted by the
Board of Directors of the Company; (iii) an appropriate prospectus with respect
to the Offered Debt Securities has been prepared, delivered and filed in
compliance with the Act and the applicable rules and regulations thereunder;
(iv) the Board of Directors, including any appropriate committee appointed
thereby, and appropriate officers of the Company have taken all necessary
corporate action to approve the issuance and terms of the Offered Debt
Securities and related matters; (v) the terms of the Offered Debt Securities
have been established in conformity with
Citigroup Capital VI
Citigroup Capital VII
Citigroup Capital VIII
Citigroup Capital IX
Citigroup Capital X
Citigroup Capital XI
Citigroup Capital XII
Citigroup Capital XIII
December 15, 1998
Page 9
the Indenture; (vi) the Offered Debt Securities are duly executed, delivered,
authenticated and issued in accordance with the Indenture and delivered and paid
for in the manner contemplated in the Registration Statement or any prospectus
relating thereto; and (vii) if the Offered Debt Securities are to be sold
pursuant to a firm commitment underwritten offering, the underwriting agreement
with respect to the Offered Debt Securities has been duly authorized, executed
and delivered by the parties thereto, the Offered Debt Securities will be valid
and binding obligations of the Company, entitled to the benefits of the
Indenture and enforceable against the Company in accordance with their terms,
except to the extent that enforcement thereof may be limited by (i) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium, or other similar
laws now or hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity (regardless of whether enforceability is considered
in a proceeding at law or in equity).
4. With respect to the shares of any series of Preferred Stock (the
"Offered Preferred Stock"), when (i) the Registration Statement, as finally
amended (including all necessary post-effective amendments), has become
effective under the Act; (ii) the Draft Resolutions have been adopted by the
Board of Directors of the Company; (iii) an appropriate prospectus supplement
with respect to the shares of the Offered Preferred Stock has been prepared,
delivered and filed in compliance with the Act and the applicable rules and
regulations thereunder; (iv) the terms of the Offered Preferred Stock and of
their issuance and sale have been duly established by all necessary corporate
action in conformity with the Company's Certificate of Incorporation, including
the Certificate of Designation relating to the Offered Preferred Stock, and the
By-Laws of the Company; (v) the filing of
Citigroup Capital VI
Citigroup Capital VII
Citigroup Capital VIII
Citigroup Capital IX
Citigroup Capital X
Citigroup Capital XI
Citigroup Capital XII
Citigroup Capital XIII
December 15, 1998
Page 10
the Certificate of Designation with the Secretary of State of the State of
Delaware has duly occurred; (vi) if the Offered Preferred Stock is to be sold
pursuant to a firm commitment underwritten offering, the underwriting agreement
with respect to the shares of the Offered Preferred Stock has been duly
authorized, executed and delivered by the Company and the other parties thereto;
and (vii) certificates representing the shares of the Offered Preferred Stock
have been duly executed and delivered by the proper officers of the Company to
the purchasers thereof against payment of the agreed-upon consideration therefor
in the manner contemplated in the Registration Statement or any prospectus
supplement or term sheet relating thereto, (1) the shares of the Offered
Preferred Stock, when issued and sold in accordance with the applicable
underwriting agreement or any other duly authorized, executed and delivered
applicable purchase agreement, will be duly authorized, validly issued, fully
paid and nonassessable, provided that the consideration therefor is not less
than the par value thereof; and (2) if the Offered Preferred Stock is
convertible into Offered Common Stock, the Offered Common Stock issuable upon
conversion of the Offered Preferred Stock will be duly authorized, validly
issued, fully paid and nonassessable, assuming the issuance of the Offered
Common Stock upon conversion of the Offered Preferred Stock has been authorized
by all necessary corporate action, that the Offered Preferred Stock has been
converted in accordance with the terms of the Certificate of Designation and
that the certificates evidencing such shares of Offered Common Stock are duly
executed and delivered. In rendering the opinion set forth in clause (2) of
this paragraph 4, we have assumed that, at the time of issuance of any Offered
Common Stock upon conversion of the Offered Preferred Stock, the Certificate of
Incorporation, the By-Laws and the DGCL shall not have
Citigroup Capital VI
Citigroup Capital VII
Citigroup Capital VIII
Citigroup Capital IX
Citigroup Capital X
Citigroup Capital XI
Citigroup Capital XII
Citigroup Capital XIII
December 15, 1998
Page 11
been amended so as to affect the validity of such issuance.
5. With respect to any Depositary Shares representing fractional interests in
any Offered Preferred Stock, when (i) the Registration Statement, as finally
amended (including all necessary post-effective amendments), has become
effective under the Act; (ii) the Draft Resolutions have been adopted by the
Board of Directors of the Company; (iii) an appropriate prospectus supplement
with respect to the Depositary Shares has been prepared, delivered and filed in
compliance with the Act and the applicable rules and regulations thereunder;
(iv) the Board of Directors, including any appropriate committee appointed
thereby, and appropriate officers of the Company have taken all necessary
corporate action to approve the issuance and terms of the Depositary Shares and
related matters, including the adoption of the Certificate of Designation for
the related Offered Preferred Stock; (v) the filing of the Certificate of
Designation with the Secretary of State of the State of Delaware has duly
occurred; (vi) the Deposit Agreement has been duly executed and delivered; (vii)
the terms of the Depositary Shares and of their issuance and sale have been duly
established by all necessary corporate action in conformity with the Deposit
Agreement; (viii) the related Offered Preferred Stock that is represented by
Depositary Shares has been duly authorized, validly issued and delivered to the
Depositary for deposit in accordance with the laws of the States of Delaware and
New York; (ix) if the Depositary Shares are to be sold pursuant to a firm
commitment underwritten offering, the underwriting agreement with respect to the
Depositary Shares has been duly authorized, executed and delivered by the
Company and the other parties thereto; and (x) the Receipts evidencing the
Depositary Shares are duly issued against the deposit of the Offered Preferred
Stock in accordance
Citigroup Capital VI
Citigroup Capital VII
Citigroup Capital VIII
Citigroup Capital IX
Citigroup Capital X
Citigroup Capital XI
Citigroup Capital XII
Citigroup Capital XIII
December 15, 1998
Page 12
with the Deposit Agreement, such Receipts will be validly issued and will
entitle the holders thereof to the rights specified therein and in the Deposit
Agreement, subject to (i) the effects of bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereinafter in effect relating to
creditors' rights generally and (ii) general principles of equity (regardless of
whether enforcement is considered in a proceeding at law or in equity).
There is no provision in the Certificate of Incorporation which purports to
restrict the surplus of the Company by reason of the excess, if any, of the
liquidation preference of the shares of Preferred Stock over their par value.
The applicable provisions of the DGCL, 8 Del. C. Sections 154 and 170(a), which
define capital and surplus of a Delaware corporation available for the payment
of dividends, do not purport to restrict such surplus by reason of any such
excess. Moreover, we are not aware of any applicable provisions of the
Constitution of the State of Delaware nor any controlling Delaware case law
which would suggest that surplus would be restricted by the excess of the
liquidation preference over the par value of the shares of Preferred Stock.
Accordingly, while there are no authorities specifically addressing this issue,
it is our opinion that (i) there should be no restriction upon the surplus of
the Company available for the payment of dividends on any outstanding capital
stock of the Company solely by reason of the fact that the liquidation
preference of any shares of any series of Preferred Stock exceeds the par value
of such shares and (ii) no remedy should be available to the holders of any
shares of any series of Preferred Stock before or after payment of any dividend
solely because such dividend would reduce the surplus of the Company to an
amount less than the amount of such excess, assuming that the payment of such
dividend is in accordance with
Citigroup Capital VI
Citigroup Capital VII
Citigroup Capital VIII
Citigroup Capital IX
Citigroup Capital X
Citigroup Capital XI
Citigroup Capital XII
Citigroup Capital XIII
December 15, 1998
Page 13
the provisions of the DGCL, and of the Certificate of Incorporation including
the applicable Certificate of Designation.
Citigroup Capital VI
Citigroup Capital VII
Citigroup Capital VIII
Citigroup Capital IX
Citigroup Capital X
Citigroup Capital XI
Citigroup Capital XII
Citigroup Capital XIII
December 15, 1998
Page 14
We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement. We also hereby consent to the use of our
name under the heading "Legal Matters" in each of the two prospectuses which
forms a part of the Registration Statement. In giving this consent, we do not
thereby admit that we are within the category of persons whose consent is
required under Section 7 of the Act or the rules and regulations of the
Commission promulgated thereunder. This opinion is expressed as of the date
hereof unless otherwise expressly stated, and we disclaim any undertaking to
advise you of any subsequent changes in the facts stated or assumed herein or of
any subsequent changes in applicable law.
Very truly yours,
/s/ SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP