-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SA4E0328k0z77AGLAKJz6gCD5LPfXiG7EArlq1eHdhcqlapOKF8c53HAZPAFWOK9 hR0+c07DbrJanLPj0q6AVw== 0000950123-04-011887.txt : 20041008 0000950123-04-011887.hdr.sgml : 20041008 20041008082533 ACCESSION NUMBER: 0000950123-04-011887 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 24 REFERENCES 429: 333-106272 FILED AS OF DATE: 20041008 DATE AS OF CHANGE: 20041008 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CITIGROUP GLOBAL MARKETS HOLDINGS INC CENTRAL INDEX KEY: 0000200245 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 112418067 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-119615 FILM NUMBER: 041071180 BUSINESS ADDRESS: STREET 1: 388 GREENWICH ST STREET 2: 38TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10013 BUSINESS PHONE: 2128166000 MAIL ADDRESS: STREET 1: 388 GREENWICH ST STREET 2: 38TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10013 FORMER COMPANY: FORMER CONFORMED NAME: SALOMON SMITH BARNEY HOLDINGS INC DATE OF NAME CHANGE: 19971128 FORMER COMPANY: FORMER CONFORMED NAME: SALOMON INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: PHIBRO CORP DATE OF NAME CHANGE: 19820526 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CGMH CAPITAL II CENTRAL INDEX KEY: 0001048468 IRS NUMBER: 066452994 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-119615-03 FILM NUMBER: 041071183 BUSINESS ADDRESS: STREET 1: 388 GREENWICH STREET CITY: NEW YORK STATE: NY ZIP: 10013 BUSINESS PHONE: 2128168000 MAIL ADDRESS: STREET 1: 388 GREENWICH STREET CITY: NEW YORK STATE: NY ZIP: 10013 FORMER COMPANY: FORMER CONFORMED NAME: CGMHCAPITAL II DATE OF NAME CHANGE: 20030616 FORMER COMPANY: FORMER CONFORMED NAME: SSBH CAPITAL II DATE OF NAME CHANGE: 19971024 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CGMH CAPITAL III CENTRAL INDEX KEY: 0001048469 IRS NUMBER: 066452995 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-119615-02 FILM NUMBER: 041071182 BUSINESS ADDRESS: STREET 1: 388 GREENWICH ST CITY: NEW YORK STATE: NY ZIP: 10013 BUSINESS PHONE: 212-816-6000 MAIL ADDRESS: STREET 1: 388 GREENWICH STREET CITY: NEW YORK STATE: NY ZIP: 10013 FORMER COMPANY: FORMER CONFORMED NAME: SSBH CAPITAL III DATE OF NAME CHANGE: 19971024 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CGMH CAPITAL IV CENTRAL INDEX KEY: 0001048470 IRS NUMBER: 066452996 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-119615-01 FILM NUMBER: 041071181 BUSINESS ADDRESS: STREET 1: 388 GREENWICH ST CITY: NEW YORK STATE: NY ZIP: 10013 BUSINESS PHONE: 212-816-6000 MAIL ADDRESS: STREET 1: 388 GREENWICH ST CITY: NEW YORK STATE: NY ZIP: 10013 FORMER COMPANY: FORMER CONFORMED NAME: SSBH CAPITAL IV DATE OF NAME CHANGE: 19971024 S-3 1 x99885s3sv3.txt FORM S-3 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 8, 2004 REGISTRATION NO. 333- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ CITIGROUP GLOBAL MARKETS HOLDINGS INC. NEW YORK 11-2418067 CGMH CAPITAL II DELAWARE 06-6452994 CGMH CAPITAL III DELAWARE 06-6452995 CGMH CAPITAL IV DELAWARE 06-6452996 (EXACT NAME OF REGISTRANT AS (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER SPECIFIED IN ITS CHARTER) INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBERS)
388 GREENWICH STREET NEW YORK, NY 10013 (212) 816-6000 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) ------------------------ EDWARD F. GREENE, ESQ. GENERAL COUNSEL CITIGROUP GLOBAL MARKETS HOLDINGS INC. 388 GREENWICH STREET NEW YORK, NY 10013 (212) 816-6000 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) ------------------------ COPIES TO: JOHN R. DYE, ESQ. JEFFREY D. KARPF, ESQ. GENERAL COUNSEL-CAPITAL MARKETS CLEARY, GOTTLIEB, STEEN & HAMILTON CITIGROUP INC. ONE LIBERTY PLAZA 399 PARK AVENUE NEW YORK, NEW YORK 10006 NEW YORK, NY 10043 (212) 225-2000 (212) 559-1000
------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE PUBLIC: At such time (from time to time) after the effective date of this Registration Statement as agreed upon by Citigroup Global Markets Holdings Inc. and the Underwriters in light of market conditions. ------------------------ 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, 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. [X] ------------------------ (continued on the following pages) CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- PROPOSED MAXIMUM PROPOSED MAXIMUM TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF TO BE REGISTERED REGISTERED(1) PER UNIT(2) PRICE(3)(4) REGISTRATION FEE - --------------------------------------------------------------------------------------------------------------------------------- Debt Securities of Citigroup Global Markets Holdings Inc.(5)............ - --------------------------------------------------------------------------------------------------------------------------------- Index Warrants of Citigroup Global Markets Holdings Inc.(6)............ - --------------------------------------------------------------------------------------------------------------------------------- Trust Preferred Securities of the Trusts(7)........................... - --------------------------------------------------------------------------------------------------------------------------------- Junior Subordinated Debt Securities of Citigroup Global Markets Holdings Inc.(7)............................. - --------------------------------------------------------------------------------------------------------------------------------- Guarantee of Trust Preferred Securities of the Trusts and certain back-up obligations(8).............. - --------------------------------------------------------------------------------------------------------------------------------- Total(9).............................. $10,000,000,000 $10,000,000,000 $1,267,000(10) - --------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------
(1) Includes an indeterminate number of securities that may be offered or sold by affiliates of the registrants in market making transactions. (2) The proposed maximum offering price per unit will be determined from time to time by the relevant Registrant in connection with the issuance by such Registrant of the securities registered hereunder. (3) The proposed maximum aggregate offering price has been estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended. The aggregate public offering price of the Debt Securities, Index Warrants and Junior Subordinated Debt Securities of Citigroup Global Markets Holdings Inc. and the Trust Preferred Securities of the Trusts registered hereby will not exceed $10,000,000,000 or the equivalent thereof in one or more foreign currencies, foreign currency units or composite currencies. (4) Exclusive of accrued interest, distributions and dividends, if any. (5) There is being registered hereunder an indeterminate principal amount of Debt Securities as may be sold from time to time. Includes Debt Securities which may be purchased by underwriters to cover over-allotments, if any. (6) There is being registered hereunder an indeterminate principal amount of Index Warrants representing rights to receive an amount of cash or number of securities that will be determined by reference to prices, yields, levels or other specified objective measures or changes in an index, indices, intangibles, articles, goods or other measures or instruments or differences between two or more such measures as may be sold from time to time. Includes Index Warrants that may be purchased by underwriters to cover over-allotments, if any. (7) There is being registered hereunder an indeterminate number of Trust Preferred Securities of CGMH Capital II, CGMH Capital III, and CGMH Capital IV (each a "Trust") and such indeterminate principal amount of Junior Subordinated Debt Securities of Citigroup Global Markets Holdings Inc. as may from time to time be issued at indeterminate prices. Includes Trust Preferred Securities which may be purchased by underwriters to cover over-allotments, if any. Junior Subordinated Debt Securities may be issued and sold to any Trust, in which event such Junior Subordinated Debt Securities may later be distributed to the holders of Trust Preferred Securities upon a dissolution of such Trust and the distribution of the assets thereof. (8) Includes the rights of holders of the Trust Preferred Securities under any Guarantees and certain back-up undertakings comprised of the obligations of Citigroup Global Markets Holdings Inc. to provide certain indemnities in respect of, and pay and be responsible for certain costs, expenses, debts and liabilities of, each Trust (other than with respect to the Trust Preferred Securities) and such obligations of Citigroup Global Markets Holdings Inc. as set forth in the Amended and Restated Declaration of Trust of each Trust and the related Indenture, in each case as further described in the Registration Statement. The Guarantees, when taken together with Citigroup Global Markets Holdings Inc.'s obligations under the Junior Subordinated Debt Securities, the related Indenture and the Amended and Restated Declaration of Trust, will provide a full and unconditional guarantee on a subordinated basis by Citigroup Global Markets Holdings Inc. of payments due on the Trust Preferred Securities. No separate consideration will be received for any Guarantees or such back-up obligations. (9) As described in the paragraph below, this Registration Statement relates to the registration of $10,000,000,000 aggregate principal amount of securities being registered hereby and an additional $945,831,296 aggregate principal amount of securities previously registered. In no event will the aggregate offering price of all securities issued from time to time pursuant to this Registration Statement exceed $10,945,831,296 or the equivalent thereof in one or more foreign currencies, foreign currency units or composite currencies. (10) A filing fee of $76,518 was previously paid in connection with a registration statement filed earlier relating to the registration of $945,831,296 aggregate principal amount of securities which are being included in this Registration Statement. The filing fee of $1,267,000 being paid in connection with the filing of this registration statement relates solely to the registration of $10,000,000,000 aggregate principal amount of securities not previously registered. Pursuant to Rule 429 under the Securities Act of 1933, as amended, the Prospectuses and Prospectus Supplements included in this Registration Statement also relate to the Debt Securities of Citigroup Global Markets Holdings Inc. and the Trust Preferred Securities of CGMH Capital II, CGMH Capital III and CGMH Capital IV, the Junior Subordinated Debt Securities of Citigroup Global Markets Holdings Inc., the Guarantees of Trust Preferred Securities of such Trusts and certain back-up obligations and Index Warrants previously registered under the Registration Statement on Form S-3 (No. 333-106272) of Citigroup Global Markets Holdings Inc. and such Trusts, as applicable. A filing fee of $76,518 was paid in connection with $945,831,296 of securities that remain eligible to be sold under the Registration Statement on Form S-3 (No. 333-106272) of Citigroup Global Markets Holdings Inc. as of October 8, 2004. THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933, 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. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- INTRODUCTORY NOTE This Registration Statement contains: - a form of base prospectus relating to debt securities and index warrants of Citigroup Global Markets Holdings Inc.; - a form of prospectus supplement to the base prospectus relating to the offering by Citigroup Global Markets Holdings of its Medium-Term Senior Notes, Series D, and Medium-Term Subordinated Notes, Series E, in registered form; - a form of prospectus supplement to the base prospectus relating to the offering by Citigroup Global Markets Holdings of its Medium-Term Senior Notes, Series D, and Medium-Term Subordinated Notes, Series E, in bearer form; - a form of prospectus supplement to the base prospectus relating to the offering by Citigroup Global Markets Holdings of its Retail Medium-Term Notes, Series F, in registered form; and - a form of trust preferred securities prospectus relating to junior subordinated debt securities of Citigroup Global Markets Holdings and to the trust preferred securities of CGMH Capital II, CGMH Capital III and CGMH Capital IV. The trust preferred securities prospectus may be used for one or more offerings by Citigroup Global Markets Holdings and the respective CGMH Capital trusts. To the extent required, the information in the trust preferred securities prospectus, including financial information, will be updated at the time of each offering. THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. CITIGROUP GLOBAL MARKETS HOLDINGS INC. 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 IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. SUBJECT TO COMPLETION, DATED OCTOBER 8, 2004 PROSPECTUS CITIGROUP GLOBAL MARKETS HOLDINGS INC. May Offer -- $10,945,831,296 DEBT SECURITIES INDEX WARRANTS Citigroup Global Markets Holdings will provide the specific terms of these securities in supplements to this prospectus. You should read this prospectus and the accompanying prospectus supplement carefully before you invest. ------------------------ Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus or any accompanying prospectus supplement is truthful or complete. Any representation to the contrary is a criminal offense. These securities are not deposits or savings accounts but are unsecured obligations of Citigroup Global Markets Holdings Inc. These securities are not insured by the Federal Deposit Insurance Corporation or any other governmental agency or instrumentality. ------------------------ CITIGROUP , 2004 PROSPECTUS SUMMARY This summary provides a brief overview of the key aspects of Citigroup Global Markets Holdings and all material terms of the offered securities that are known as of the date of this prospectus. For a more complete understanding of the terms of the offered securities, before making your investment decision, you should carefully read: - this prospectus, which explains the general terms of the securities that Citigroup Global Markets Holdings may offer; - the accompanying prospectus supplement, which (1) explains the specific terms of the securities being offered and (2) updates and changes information in this prospectus; and - the documents referred to in "Where You Can Find More Information" on page 5 for information on Citigroup Global Markets Holdings, including its financial statements. CITIGROUP GLOBAL MARKETS HOLDINGS INC. Citigroup Global Markets Holdings is a holding company primarily engaged in investment banking, proprietary trading, retail brokerage and asset management activities through its U.S. and foreign broker-dealer subsidiaries. Citigroup Global Markets Holdings is a subsidiary of Citigroup Inc., a diversified financial services holding company. Citigroup Global Markets Holdings' principal executive office is at 388 Greenwich Street, New York, NY 10013, and its telephone number is (212) 816-6000. THE SECURITIES CITIGROUP GLOBAL MARKETS HOLDINGS MAY OFFER Citigroup Global Markets Holdings may use this prospectus to offer up to $10,945,831,296 of: - debt securities; and - index warrants. A prospectus supplement will describe the specific types, amounts, prices and detailed terms of any of these offered securities. DEBT SECURITIES Debt securities are unsecured general obligations of Citigroup Global Markets Holdings in the form of senior or subordinated debt. Senior debt includes Citigroup Global Markets Holdings' notes, debt and guarantees and any other debt for money borrowed that is not subordinated. Subordinated debt, so designated at the time it is issued, would not be entitled to interest and principal payments if interest and principal payments on the senior debt were not made. The senior and subordinated debt will be issued under separate indentures between Citigroup Global Markets Holdings and a trustee. Below are summaries of the general features of the debt securities from these indentures. For a more detailed description of these features, see "Description of Debt Securities" below. You are also encouraged to read the indentures, which are included or incorporated by reference in Citigroup Global Markets Holdings' registration statement No. 333- , Citigroup Global Markets Holdings' most recent annual report on Form 10-K, Citigroup Global Markets Holdings' quarterly reports on Form 10-Q filed after the Form 10-K and Citigroup Global Markets Holdings' current reports on Form 8-K filed after the Form 10-K. You can receive copies of these documents by following the directions on page 5. 1 General Indenture Provisions that Apply to Senior and Subordinated Debt - None of the indentures limits the amount of debt that Citigroup Global Markets Holdings may issue or provides holders any protection should there be a highly leveraged transaction involving Citigroup Global Markets Holdings, although the senior debt indenture does limit Citigroup Global Markets Holdings' ability to pledge the stock of certain important subsidiaries. These thresholds are described below under "Description of Debt Securities." - Each indenture allows for different types of debt securities, including indexed securities, to be issued in series and provides for the issuance of securities in book-entry, certificated and, in limited circumstances, bearer form. - The indentures allow Citigroup Global Markets Holdings to merge or to consolidate with another company, or sell all or substantially all of its assets to another company. If any of these events occur, the other company would be required to assume Citigroup Global Markets Holdings' responsibilities for the debt. Unless the transaction resulted in an event of default, Citigroup Global Markets Holdings would be released from all liabilities and obligations under the debt securities when the other company assumed its responsibilities. - The indentures provide that holders of a majority of the principal amount of the debt securities outstanding in any series may vote to change Citigroup Global Markets Holdings' obligations or your rights concerning those securities. However, changes to the financial terms of that security, including changes in the payment of principal or interest on that security or the currency of payment, cannot be made unless every holder of that security consents to the change. - Citigroup Global Markets Holdings may satisfy its obligations under the debt securities or be released from its obligation to comply with the limitations discussed above at any time by depositing sufficient amounts of cash or U.S. government securities with the trustee to pay Citigroup Global Markets Holdings' obligations under the particular securities when due. - The indentures govern the actions of the trustee with regard to the debt securities, including when the trustee is required to give notices to holders of the securities and when lost or stolen debt securities may be replaced. Events of Default The events of default specified in the senior debt indenture and defaults under the subordinated debt indenture include: - failure to pay principal or premium, if any, when due; - failure to pay required interest for 30 days; - failure to make a sinking fund payment when due; - failure to perform covenants for 60 days after notice; - certain events of insolvency or bankruptcy, whether voluntary or not; and - any additional events as may be set forth in the applicable prospectus supplement. Unless otherwise specified in the prospectus supplement relating to any series of subordinated debt, the only events of default specified in the subordinated debt indenture are certain events of insolvency or bankruptcy, whether voluntary or not. There is no event of default, and accordingly there is no right of acceleration, in the case of a default in the payment of principal of, premium, if any, or interest on, subordinated debt securities, the performance of any other covenant of Citigroup Global Markets Holdings in the subordinated indenture or any other default which is not also an event of default. 2 Remedies Senior Indenture: If there were an event of default, the trustee or holders of 25% of the principal amount of debt securities outstanding in a series could demand that the principal be paid immediately. However, holders of a majority in principal amount of the securities in that series may rescind that acceleration of the debt securities. Subordinated Indenture: If there were an event of default involving certain events of insolvency or bankruptcy, the trustee or holders of 25% of the principal amount of subordinated debt securities outstanding in a series could demand that the principal be paid immediately. However, holders of a majority in principal amount of the securities in that subordinated debt series may rescind that acceleration of the subordinated debt securities. The occurrence of a default for any reason other than these events of insolvency or bankruptcy will not give the trustee or such holders the right to demand that the principal of the subordinated debt securities be paid immediately. INDEX WARRANTS Citigroup Global Markets Holdings may issue index warrants independently or together with debt securities. Citigroup Global Markets Holdings will issue any series of index warrants under a separate index warrant agreement between Citigroup Global Markets Holdings and a bank or trust company. You are encouraged to read the standard form of the index warrant agreement, which will be filed as an exhibit to one of Citigroup Global Markets Holdings' future current reports and incorporated by reference in its registration statement No. 333- . You can receive copies of these documents by following the directions on page 5. Index warrants are securities that, when properly exercised by the purchaser, entitle the purchaser to receive from Citigroup Global Markets Holdings an amount in cash or a number of securities that will be indexed to prices, yields, or other specified measures or changes in an index or differences between two or more indices. The prospectus supplement for a series of index warrants will describe the formula for determining the amount in cash or number of securities, if any, that Citigroup Global Markets Holdings will pay you when you exercise an index warrant and will contain information about the relevant underlying assets and other specific terms of the index warrant. Citigroup Global Markets Holdings will generally issue index warrants in book-entry form, which means that they will not be evidenced by physical certificates. Also, Citigroup Global Markets Holdings will generally list index warrants for trading on a national securities exchange, such as the New York Stock Exchange, the Nasdaq Stock Market's National Market, the American Stock Exchange or the Chicago Board Options Exchange. The index warrant agreement for any series of index warrants will provide that holders of a majority of the total amount of the index warrants outstanding in any series may vote to change their rights concerning those index warrants. However, changes to fundamental terms such as the amount or manner of payment on an index warrant or changes to the exercise times cannot be made unless every holder affected consents to the change. Any prospective purchasers of index warrants should be aware of special United States federal income tax considerations applicable to instruments such as the index warrants. The prospectus supplement relating to each series of index warrants will describe the important tax considerations. USE OF PROCEEDS Citigroup Global Markets Holdings will use the net proceeds it receives from any offering of these securities for general corporate purposes, primarily to fund its operating units and subsidiaries. Citigroup Global Markets Holdings may also use a portion of the proceeds to refinance or extend the maturity of existing debt obligations. Citigroup Global Markets Holdings may use a portion of the proceeds from the 3 sale of index warrants and indexed notes to hedge its exposure to payments that it may have to make on such index warrants and indexed notes as described below under "Use of Proceeds and Hedging." PLAN OF DISTRIBUTION Citigroup Global Markets Holdings may sell the offered securities in any of the following ways: - to or through underwriters or dealers; - by itself directly; - through agents; or - through a combination of any of these methods of sale. The prospectus supplement will explain the ways Citigroup Global Markets Holdings sells specific securities, including the names of any underwriters and details of the pricing of the securities, as well as the commissions, concessions or discounts Citigroup Global Markets Holdings is granting the underwriters, dealers or agents. If Citigroup Global Markets Holdings uses underwriters in any sale, the underwriters will buy the securities for their own account and may resell the securities from time to time in one or more transactions, at a fixed public offering price or at varying prices determined at the time of sale. In connection with an offering, underwriters and selling group members and their affiliates may engage in transactions to stabilize, maintain or otherwise affect the market price of the securities, in accordance with applicable law. Citigroup Global Markets Holdings expects that the underwriters for any offering will include one or more of its broker-dealer subsidiaries or affiliates, including Citigroup Global Markets Inc. These broker-dealer subsidiaries or affiliates also expect to offer and sell previously issued offered securities as part of their business, and may act as a principal or agent in such transactions. Citigroup Global Markets Holdings or any of its subsidiaries or affiliates may use this prospectus and the related prospectus supplements and pricing supplements in connection with these activities. RATIO OF EARNINGS (LOSSES) TO FIXED CHARGES The following table shows the consolidated ratio of earnings (losses) to fixed charges of Citigroup Global Markets Holdings for the six months ended June 30, 2004 and each of the five most recent fiscal years.
SIX MONTHS ENDED YEAR ENDED DECEMBER 31, JUNE 30, ------------------------------------ 2004 2003 2002 2001 2000 1999 ---------- ---- ---- ---- ---- ---- Ratio of earnings (losses) to fixed charges................................. (0.56x) 1.90x 1.44x 1.34x 1.32x 1.46x
4 WHERE YOU CAN FIND MORE INFORMATION As required by the Securities Act of 1933, Citigroup Global Markets Holdings filed a registration statement (No. 333- ) relating to the securities offered by this prospectus with the Securities and Exchange Commission. This prospectus is a part of that registration statement, which includes additional information. Citigroup Global Markets Holdings files annual, quarterly and current reports and other information with the SEC. You may read and copy any document Citigroup Global Markets Holdings files at the SEC's public reference room in Washington, D.C. 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 room. These SEC filings are also available to the public from the SEC's home page on the world wide web on the internet at "http://www.sec.gov". The SEC allows Citigroup Global Markets Holdings 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 Global Markets Holdings files later with the SEC will automatically update information in this prospectus. In all cases, you should rely on the later information over different information included in this prospectus or the prospectus supplement. Citigroup Global Markets Holdings incorporates by reference the documents listed below and any future filings made with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934: (a) Annual Report on Form 10-K for the year ended December 31, 2003; (b) Quarterly Report on Form 10-Q for the quarters ended March 31, 2004 and June 30, 2004; and (c) Current Reports on Form 8-K filed on January 20, 2004, January 29, 2004, January 30, 2004, March 1, 2004, March 29, 2004, April 1, 2004, April 15, 2004, April 30, 2004, June 3, 2004, June 22, 2004, June 29, 2004, June 30, 2004, July 15, 2004, July 21, 2004, July 29, 2004, August 26, 2004, August 27, 2004, August 31, 2004 and October 5, 2004. All documents Citigroup Global Markets Holdings files pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus and before the later of (1) the completion of the offering of the securities described in this prospectus and (2) the date the broker-dealer subsidiaries or affiliates of Citigroup Global Markets Holdings stop offering securities pursuant to 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 Global Markets Holdings at the following address: Treasurer Citigroup Global Markets Holdings Inc. 388 Greenwich Street New York, NY 10013 (212) 816-6000 You should rely only on the information provided in this prospectus and the prospectus supplement, as well as the information incorporated by reference. Citigroup Global Markets Holdings has not authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. Citigroup Global Markets Holdings is not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information in this prospectus, the prospectus supplement or any documents incorporated by reference is accurate as of any date other than the date on the front of the applicable document. Citigroup Global Markets Holdings' business, financial condition, results of operations and prospects may have changed since that date. 5 FORWARD-LOOKING STATEMENTS This prospectus and the information incorporated by reference in this prospectus include forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These forward-looking statements are based on our management's beliefs and assumptions and on information currently available to our management. Forward-looking statements include information concerning our possible or assumed future results of operations and statements preceded by, followed by or that include the words "believe," "expect," "anticipate," "intend," "plan," "estimate," "may increase," "may fluctuate" and similar expressions or future or conditional verbs as "will," "should," "would" and "could." Forward-looking statements involve risks, uncertainties including, but not limited to, the following: global economic conditions, including the performance of global financial markets, and risks associated with fluctuating currency values and interest rates; competitive, regulatory or tax changes that affect the cost of or the demand for Citigroup Global Markets Holdings' products; the impact of the implementation of new accounting rules; the resolution of environmental matters; and the resolution of legal and regulatory proceeding and related matters. Actual results may differ materially from those expressed in these forward-looking statements. Factors that could cause actual results to differ from these forward-looking statements include, but are not limited to, those discussed elsewhere in this prospectus and the documents incorporated by reference in this prospectus. You should not put undue reliance on any forward-looking statements. We do not have any intention or obligation to update forward-looking statements after we distribute this prospectus. 6 CITIGROUP GLOBAL MARKETS HOLDINGS INC. Citigroup Global Markets Holdings, operating through its subsidiaries, engages in full-service investment banking and securities brokerage business. As used in this section, "Citigroup Global Markets Holdings" refers generally to Citigroup Global Markets Holdings Inc. and its consolidated subsidiaries, and where the context requires refers to specific subsidiaries. Citigroup Global Markets Holdings provides a full range of financial advisory, research and capital raising services to corporations, governments and individuals. Citigroup Global Markets Holdings operates in three business segments: (i) Investment Services, (ii) Private Client Services and (iii) Asset Management, and through these business segments, Citigroup Global Markets Holdings provides investment banking, securities and commodities trading, capital raising, asset management, advisory, research, brokerage and other financial services to its customers, and executes proprietary trading strategies on its own behalf. Citigroup Inc., Citigroup Global Markets Holdings' parent, is a diversified holding company whose businesses provide a broad range of financial services to consumer and corporate customers around the world. Citigroup's activities are conducted through the Global Consumer, Global Corporate and Investment Bank, Private Client Services, Global Investment Management, and Proprietary Investment Activities business segments. Citigroup Global Markets Holdings' global investment banking services encompass a full range of capital market activities, including the underwriting and distribution of debt and equity securities for United States and foreign corporations and for state, local and other governmental and government sponsored authorities. Citigroup Global Markets Holdings frequently acts as an underwriter or private placement agent in corporate and public securities offerings and provides alternative financing options. It also provides financial advice to investment banking clients on a wide variety of transactions including mergers and acquisitions, divestitures, leveraged buyouts, financial restructurings and a variety of cross-border transactions. Private Client Services provides investment advice, financial planning and brokerage services to affluent individuals, small and mid-size companies, non-profits and large corporations primarily through a network of more than 12,200 Smith Barney Financial Consultants in more than 500 offices worldwide. In addition, Private Client Services provides independent client-focused research to individuals and institutions around the world. The portion of Citigroup Inc.'s Asset Management segment housed within Citigroup Global Markets Holdings is comprised primarily of two asset management business platforms: Salomon Brothers Asset Management and Smith Barney Asset Management. These platforms offer a broad range of asset management products and services from global investment centers, including mutual funds, closed-end funds and managed accounts. In addition, this Asset Management Group offers a broad range of unit investment trusts. The principal office of Citigroup Global Markets Holdings is located at 388 Greenwich Street, New York, New York 10013, and its telephone number is (212) 816-6000. Citigroup Global Markets Holdings, a New York corporation, was incorporated in 1977 and is the successor to Salomon Smith Barney Holdings Inc., a Delaware corporation, following a statutory merger effective on July 1, 1999, for the purpose of changing its state of incorporation. On April 7, 2003, Citigroup Global Markets Holdings filed a Restated Certificate of Incorporation in the State of New York changing its name from Salomon Smith Barney Holdings Inc. to Citigroup Global Markets Holdings Inc. 7 USE OF PROCEEDS AND HEDGING General. Citigroup Global Markets Holdings will use the proceeds it receives from the sale of the offered securities for general corporate purposes, which may include: - funding the business of its operating units; - funding investments in, or extensions of credit or capital contributions to, its subsidiaries; and - lengthening the average maturity of liabilities, which means that it could reduce its short-term liabilities or refund maturing indebtedness. Citigroup Global Markets Holdings expects to incur additional indebtedness in the future to fund its businesses. Citigroup Global Markets Holdings or an affiliate may enter into a swap agreement in connection with the sale of the offered securities and may earn additional income from that transaction. Use of Proceeds Relating to Index Warrants and Indexed Notes. Citigroup Global Markets Holdings or one or more of its subsidiaries may use all or some of the proceeds received from the sale of index warrants or indexed notes to purchase or maintain positions in the underlying assets. Citigroup Global Markets Holdings or one or more of its subsidiaries may also purchase or maintain positions in options, futures contracts, forward contracts or swaps, or options on the foregoing, or other derivative or similar instruments relating to the relevant index or underlying assets. Citigroup Global Markets Holdings may also use the proceeds to pay the costs and expenses of hedging any currency, interest rate or other index-related risk relating to such index warrants and indexed notes. Citigroup Global Markets Holdings expects that it or one or more of its subsidiaries or affiliates will increase or decrease their initial hedging position over time using techniques which help evaluate the size of any hedge based upon a variety of factors affecting the value of the underlying instrument. These factors may include the history of price changes in that underlying instrument and the time remaining to maturity. Citigroup Global Markets Holdings or one or more of its subsidiaries or affiliates may take long or short positions in the index, the underlying assets, options, futures contracts, forward contracts, swaps, or options on the foregoing, or other derivative or similar instruments related to the index or the underlying assets. These other hedging activities may occur from time to time before the index warrants and indexed notes mature and will depend on market conditions and the value of the index and the underlying assets. In addition, Citigroup Global Markets Holdings or one or more of its subsidiaries or affiliates may purchase or otherwise acquire a long or short position in index warrants and indexed notes from time to time and may, in their sole discretion, hold, resell, exercise, cancel or retire such offered securities. Citigroup Global Markets Holdings or one or more of its subsidiaries or affiliates may also take hedging positions in other types of appropriate financial instruments that may become available in the future. If Citigroup Global Markets Holdings or one or more of its subsidiaries or affiliates has a long hedge position in, or options, futures contracts, forward contracts or swaps, or options on the foregoing, or other derivative or similar instruments related to, the index or the underlying assets, Citigroup Global Markets Holdings or one or more of its subsidiaries or affiliates may liquidate all or a portion of its holdings at or about the time of the maturity or earlier redemption or repurchase of, or the payment of any indexed interest on, the index warrants and indexed notes. The aggregate amount and type of such positions are likely to vary over time depending on future market conditions and other factors. Since the hedging activities described in this section involve risks and may be influenced by a number of factors, it is possible that Citigroup Global Markets Holdings or one or more of its subsidiaries or affiliates may receive a profit from the hedging activities, even if the market value of the index warrants or indexed notes declines. Citigroup Global Markets Holdings is only able to determine profits or losses from any such position when the position is closed out and any offsetting position or positions are taken into account. Citigroup Global Markets Holdings has no reason to believe that its hedging activities, as well as those of its subsidiaries and affiliates, will have a material impact on the price of such options, futures 8 contracts, forward contracts, swaps, options on the foregoing, or other derivative or similar instruments, or on the value of the index or the underlying assets. However, Citigroup Global Markets Holdings cannot guarantee you that its hedging activities, as well as those of its subsidiaries and affiliates, will not affect such prices or value. Citigroup Global Markets Holdings or its subsidiaries will use the remainder of the proceeds from the sale of index warrants and indexed notes for the general corporate purposes described above. 9 DESCRIPTION OF DEBT SECURITIES The debt securities offered by this prospectus will be unsecured obligations of Citigroup Global Markets Holdings and will be either senior or subordinated debt. Senior debt will be issued under a senior debt indenture. Subordinated debt will be issued under a subordinated debt indenture. The senior debt indenture and the subordinated debt indenture are sometimes referred to in this prospectus individually as an "indenture" and collectively as the "indentures." Forms of the indentures have been filed with the SEC and are incorporated by reference in the registration statement on Form S-3 (No. 333- ) under the Securities Act of 1933 of which this prospectus forms a part. The following briefly summarizes the material provisions of the indentures and the debt securities, other than pricing and related terms disclosed in the accompanying prospectus supplement. You should read the more detailed provisions of the applicable indenture, including the defined terms, for provisions that may be important to you. You should also read the particular terms of a series of debt securities, which will be described in more detail in the applicable prospectus supplement. Copies of the indentures may be obtained from Citigroup Global Markets Holdings or the applicable trustee. So that you may easily locate the more detailed provisions, the numbers in parentheses below refer to sections in the applicable indenture or, if no indenture is specified, to sections in each of the indentures. Wherever particular sections or defined terms of the applicable indenture are referred to, such sections or defined terms are incorporated into this prospectus by reference, and the statements in this prospectus are qualified by that reference. Unless otherwise provided in the applicable prospectus supplement, the trustee under the senior debt indenture will be The Bank of New York, and the trustee under the subordinated debt indenture will be Deutsche Bank Trust Company Americas (formerly Bankers Trust Company). Citigroup Global Markets Holdings may, at its option, appoint others, including Citibank, N.A., to act as paying agent, transfer agent and/or registrar. GENERAL Section numbers in The Bank of New York senior debt indenture take the form "1.01", "2.01" and so forth, rather than "101", "201" and so forth. Section references below should be read accordingly. The indentures provide that unsecured senior or subordinated debt securities of Citigroup Global Markets Holdings may be issued in one or more series, with different terms, in each case as authorized from time to time by Citigroup Global Markets Holdings. The indentures do not limit the amount of debt securities that may be issued under them (Section 301). Citigroup Global Markets Holdings also has the right to "reopen" a previous issue of a series of debt securities by issuing additional debt securities of such series. United States federal income tax consequences and other special considerations applicable to any variable rate debt securities exchangeable for fixed rate debt securities or debt securities issued by Citigroup Global Markets Holdings at a discount will be described in the applicable prospectus supplement. Because Citigroup Global Markets Holdings is a holding company, the claims of creditors of Citigroup Global Markets Holdings' subsidiaries will have a priority over Citigroup Global Markets Holdings' equity rights and the rights of Citigroup Global Markets Holdings' creditors, including the holders of debt securities, to participate in the assets of the subsidiary upon the subsidiary's liquidation. The applicable prospectus supplement relating to any series of debt securities will describe the following terms, where applicable: - the title of the debt securities; - whether the debt securities will be senior or subordinated debt; - the indenture under which such debt securities are being issued; - the total principal amount of the debt securities; 10 - the percentage of the principal amount at which the debt securities will be sold and, if applicable, the method of determining the price; - the maturity date or dates; - the interest rate or the method of computing the interest rate; - the date or dates from which any interest will accrue, or how such date or dates will be determined, and the interest payment date or dates and any related record dates; - if other than in United States dollars, the currency or currency unit in which payment will be made; - if the amount of any payment may be determined with reference to an index or formula based on a currency or currency unit other than that in which the debt securities are payable, the manner in which the amount will be determined; - if the amount of any payment may be determined with reference to an index or formula based on securities, commodities, intangibles, articles or goods, or any other financial, economic or other measure or instrument, including the occurrence or non-occurrence of any event or circumstance, the manner in which the amount will be determined; - if any payments may be made at the election of Citigroup Global Markets Holdings or a holder of debt securities in a currency or currency unit other than that in which the debt securities are stated to be payable, the periods within which, and the terms upon which, such election may be made; - the location where payments on the debt securities will be made; - the terms and conditions on which the debt securities may be redeemed at the option of Citigroup Global Markets Holdings; - any obligation of Citigroup Global Markets Holdings to redeem, purchase or repay the debt securities at the option of a holder upon the happening of any event and the terms and conditions of redemption, purchase or repayment; - if other than the principal amount, the portion of the principal amount of the debt securities payable if the maturity is accelerated; - any provisions for the discharge of Citigroup Global Markets Holdings' obligations relating to the debt securities by deposit of funds or United States government securities; - whether the debt securities are to trade in book-entry form and the terms and any conditions for exchanging the global security in whole or in part for paper certificates; - the date of any global security if other than the original issuance of the first debt security to be issued; - any material provisions of the applicable indenture described in this prospectus that do not apply to the debt securities; and - any other specific terms of the debt securities (Section 302). The terms on which a series of debt securities may be convertible into or exchangeable for common stock or other securities of any kind will be set forth in the prospectus supplement relating to such series. Such terms will include provisions as to whether conversion or exchange is mandatory, at the option of the holder or at the option of Citigroup Global Markets Holdings. The terms may include provisions pursuant to which the number of shares of common stock or other securities to be received by the holders of such series of debt securities may be adjusted. The debt securities will be issued in registered form or bearer form or both. If issued in bearer form, the debt securities may be issued with or without coupons attached. As currently anticipated, debt securities of a series will trade in book-entry form, and global notes will be issued in physical (paper) form, as described below under "Book-Entry Procedures and Settlement." Unless otherwise provided in 11 the accompanying prospectus supplement, debt securities denominated in United States dollars will be issued only in denominations of $1,000 and whole multiples of $1,000. (Section 301). The prospectus supplement relating to offered securities denominated in a foreign or composite currency will specify the denomination of the offered securities. Federal income tax consequences and other special considerations applicable to any debt securities issued by Citigroup Global Markets Holdings in bearer form will be described in the applicable prospectus supplement. Unless otherwise provided in the applicable prospectus supplement, the debt securities may be presented for exchange, and debt securities other than a global security may be presented for registration of transfer, at the principal corporate trust office of the relevant trustee in New York City. Holders will not have to pay any service charge for any registration of transfer or exchange of debt securities, but Citigroup Global Markets Holdings may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with such registration of transfer. (Section 305). Debt securities in bearer form will be transferable by delivery. Provisions with respect to the exchange of debt securities in bearer form will be described in the applicable prospectus supplement. PAYMENT AND PAYING AGENTS Payments on the debt securities other than those represented by global notes will be made in the designated currency against surrender of the debt securities, in the case of registered notes, at the principal corporate trust office of the relevant trustee in New York City or, in the case of notes in bearer form, at the office of the relevant trustee in London. In the case of notes in registered form, payment will be made to the registered holder appearing in the register of note holders maintained by the registrar at the close of business on the record date for such payment. In the case of notes in registered form, interest payments may be made at the option of Citigroup Global Markets Holdings, by a check mailed to the holder at his registered address. (Section 307). Payments in any other manner will be specified in the prospectus supplement. SENIOR DEBT The senior debt securities will be issued under the senior debt indenture and will rank on an equal basis with all other unsecured debt of Citigroup Global Markets Holdings except subordinated debt (Subordinated Debt Indenture, Section 1601). SUBORDINATED DEBT The subordinated debt securities will be issued under the subordinated debt indenture and will rank subordinated and junior in right of payment, to the extent set forth in the subordinated debt indenture, to all "Senior Indebtedness" (as defined below) of Citigroup Global Markets Holdings. If Citigroup Global Markets Holdings defaults in the payment of any principal of, or premium, if any, or interest on any Senior Indebtedness when it becomes due and payable after any applicable grace period, then, unless and until the default is cured or waived or ceases to exist, Citigroup Global Markets Holdings cannot make a payment on account of or redeem or otherwise acquire the subordinated debt securities. Nevertheless, holders of subordinated debt securities may still receive and retain: - securities of Citigroup Global Markets Holdings or any other corporation provided for by a plan of reorganization or readjustment that are subordinate, at least to the same extent that the subordinated debt securities are subordinated to Senior Indebtedness; and - payments made from a defeasance trust as described below. If there is any insolvency, bankruptcy, liquidation or other similar proceeding relating to Citigroup Global Markets Holdings, its creditors or its property, then all Senior Indebtedness must be paid in full before any payment may be made to any holders of subordinated debt securities. Holders of subordinated 12 debt securities must return and deliver any payments received by them, other than in a plan of reorganization or through a defeasance trust as described below, directly to the holders of Senior Indebtedness until all Senior Indebtedness is paid in full (Subordinated Debt Indenture, Section 1601). "Senior Indebtedness" means: (1) the principal, premium, if any, and interest in respect of (A) indebtedness for money borrowed and (B) indebtedness evidenced by securities, notes, debentures, bonds or other similar instruments issued by Citigroup Global Markets Holdings, including the senior debt securities; (2) all capital lease obligations of Citigroup Global Markets Holdings; (3) all obligations of Citigroup Global Markets Holdings issued or assumed as the deferred purchase price of property, all conditional sale obligations of Citigroup Global Markets Holdings and all obligations of Citigroup Global Markets Holdings under any conditional sale or title retention agreement, but excluding trade accounts payable in the ordinary course of business; (4) all obligations, contingent or otherwise, of Citigroup Global Markets Holdings in respect of any letters of credit, bankers acceptance, security purchase facilities and similar credit transactions; (5) all obligations of Citigroup Global Markets Holdings in respect of interest rate swap, cap or other agreements, interest rate future or option contracts, currency swap agreements, currency future or option contracts and other similar agreements; (6) all obligations of the type referred to in clauses (1) through (5) above of other persons for the payment of which Citigroup Global Markets Holdings is responsible or liable as obligor, guarantor or otherwise ("guarantees"); and (7) all obligations of the type referred to in clauses (1) through (6) above of other persons secured by any lien on any property or asset of Citigroup Global Markets Holdings whether or not such obligation is assumed by Citigroup Global Markets Holdings; but Senior Indebtedness does not include: (A) any indebtedness issued prior to October , 2004 under the subordinated debt indenture; and (B) any indebtedness or any guarantee that is by its terms subordinated to, or ranks equally with the subordinated debt securities and the issuance of which, in the case of this clause only, (x) has received the concurrence or approval of the staff of the Federal Reserve Bank of New York or the staff of the Board of Governors of the Federal Reserve System or (y) does not at the time of issuance prevent the subordinated debt securities from qualifying for Tier 2 capital treatment (irrespective of any limits on the amount of Citigroup Inc.'s Tier 2 capital) under the applicable capital adequacy guidelines, regulations, policies or published interpretations of the Board of Governors of the Federal Reserve System. COVENANTS Limitations on Liens. The senior debt indenture provides that Citigroup Global Markets Holdings will not, and will not permit any subsidiary to, incur, issue, assume, guarantee, or suffer to exist any indebtedness for borrowed money if such indebtedness is secured by a pledge of, lien on, or security interest in any shares of voting stock of any Restricted Subsidiary, whether such stock is owned or later acquired, without effectively providing that the debt securities shall be secured equally and ratably with such debt (Senior Debt Indenture, Section 12.05). The subordinated debt indenture does not contain a similar provision. "Restricted Subsidiary" means Citigroup Global Markets Inc. and any subsidiary which owns or acquires any of its voting stock or succeeds to a substantial part of its business. "Voting stock" means stock having power for election of directors. (Senior Debt Indenture, Section 1.01). 13 Limitations on Mergers and Sales of Assets. The indentures provide that Citigroup Global Markets Holdings will not merge or consolidate with another corporation or sell other than for cash or lease all or substantially all its assets to another corporation, or purchase all or substantially all the assets of another corporation unless: - the successor corporation waives any right to redeem any debt securities in bearer form; - the successor corporation, if other than Citigroup Global Markets Holdings, expressly assumes by supplemental indenture the obligations evidenced by the securities issued pursuant to the indenture; and - immediately after the transaction, there would not be any default in the performance of any covenant or condition of the indenture (Section 1001). Other than the restrictions described above, the indentures do not contain any covenants or provisions that would protect holders of the debt securities in the event of a highly leveraged transaction. MODIFICATION OF THE INDENTURES Under the indentures, Citigroup Global Markets Holdings and the relevant trustee can enter into supplemental indentures to establish the form and terms of any series of debt securities without obtaining the consent of any holder of debt securities. Citigroup Global Markets Holdings and the trustee may, with the consent of the holders of at least a majority in aggregate principal amount of the senior debt securities of a series or at least a majority in aggregate principal amount of the subordinated debt securities, modify the applicable indenture or the rights of the holders of the securities of such series to be affected. No such modification may, without the consent of the holder of each security so affected: - change the fixed maturity of any such securities; - reduce the rate or extend the time of payment of interest on such securities; - reduce the principal amount of such securities or the premium, if any, on such securities; - reduce the amount of the principal of any securities issued originally at a discount; - change the currency in which any such securities are payable; - impair the right to sue for the enforcement of any such payment on or after the maturity of such securities; - limit Citigroup Global Markets Holdings' responsibility to maintain a paying agent outside the U.S. for debt securities in bearer form; - limit Citigroup Global Markets Holdings' obligations to redeem certain debt securities in bearer form if certain events involving U.S. information reporting requirements occur; - reduce the percentage of securities referred to above whose holders need to consent to the modification without the consent of such holders; or - change, without the written consent of the trustee, the rights, duties or immunities of the trustee (Senior Debt Indenture, Section 11.02). In addition, the subordinated debt indenture may not be amended without the consent of each holder of subordinated debt securities affected thereby to modify the subordination of the subordinated debt securities issued under that indenture in a manner adverse to the holders of the subordinated debt securities (Subordinated Debt Indenture, Section 1102). 14 EVENTS OF DEFAULT AND DEFAULTS Events of default under the senior debt indenture and defaults under the subordinated debt indenture are: - failure to pay required interest on any debt security of such series for 30 days; - failure to pay principal, other than a scheduled installment payment to a sinking fund or premium, if any, on any debt security of such series when due; - failure to make any required scheduled installment payment to a sinking fund for 30 days on debt securities of such series; - failure to perform for 90 days after notice any other covenant in the relevant indenture other than a covenant included in the relevant indenture solely for the benefit of a series of debt securities other than such series; and - certain events of bankruptcy or insolvency, whether voluntary or not (Senior Debt Indenture, Section 5.01; Subordinated Debt Indenture, Section 507). Unless otherwise specified in the prospectus supplement relating to any series of subordinated debt, the only events of default specified in the subordinated debt indenture are events of insolvency or bankruptcy, whether voluntary or not. There is no event of default, and accordingly there is no right of acceleration, in the case of a default in the payment of principal of, premium, if any, or interest on, subordinated debt securities, the performance of any other covenant of Citigroup Global Markets Holdings in the subordinated indenture or any other default which is not also an event of default (Subordinated Debt Indenture, Sections 501 and 502). If an event of default regarding debt securities of any series issued under the indentures should occur and be continuing, either the trustee or the holders of 25% in the principal amount of outstanding debt securities of that series may declare each debt security of that series due and payable (Section 502). Citigroup Global Markets Holdings is required to file annually with the trustee a statement of an officer as to the fulfillment by Citigroup Global Markets Holdings of its obligations under the indenture during the preceding year (Senior Debt Indenture, Section 12.06; Subordinated Debt Indenture, Section 1205). No event of default regarding one series of debt securities issued under an indenture is necessarily an event of default regarding any other series of debt securities (Section 502). Holders of a majority in principal amount of the outstanding debt securities of any series will be entitled to control certain actions of the trustee under the indentures and to waive past events of default regarding that series (Section 502). The trustee generally will not be requested, ordered or directed by any of the holders of debt securities, unless one or more of such holders shall have offered to the trustee reasonable security or indemnity (Section 507). If an event of default occurs and is continuing regarding a series of debt securities, the trustee may use any sums that it holds under the relevant indenture for its own reasonable compensation and expenses incurred prior to paying the holders of debt securities of that series (Section 506). Before any holder of any series of debt securities may institute action for any remedy, except payment on the holder's debt security when due, the holders of not less than 25% in principal amount of the debt securities of that series outstanding must request the trustee to take action. Holders must also offer and give the satisfactory security and indemnity against liabilities incurred by the trustee for taking such action. (Section 507). DEFEASANCE If so specified when the debt securities of a particular series are created, after Citigroup Global Markets Holdings has deposited with the trustee cash or U.S. government securities in trust for the benefit 15 of the holders sufficient to pay the principal of, premium, if any, and interest on the debt securities of that series when due, then Citigroup Global Markets Holdings, at its option: - will be deemed to have paid and satisfied its obligations on all outstanding debt securities of that series on the 91st day after the applicable conditions described below are satisfied, which is known as "defeasance and discharge;" or - will cease to be under any of the obligations described above under "Covenants -- Limitation on Liens" and "Covenants -- Limitations on Mergers and Sales of Assets" relating to the debt securities of the series, other than to pay when due the principal of, premium, if any, and interest on those debt securities, which is known as "covenant defeasance." Citigroup Global Markets Holdings must deliver to the trustee an opinion of counsel accompanied by a ruling received or published by the Internal Revenue Service to the effect that the holders of the debt securities of the series will have no United States federal income tax consequences as a result of Citigroup Global Markets Holdings' exercise of its defeasance option. If the debt securities are listed on the New York Stock Exchange, Citigroup Global Markets Holdings must also deliver the trustee an opinion of counsel stating that defeasance would not cause the debt securities to be delisted. When there is a defeasance and discharge, (1) the indentures will no longer govern the debt securities of that series, (2) Citigroup Global Markets Holdings will no longer be liable for payment and (3) the holders of those debt securities will be entitled only to the deposited funds. When there is a covenant defeasance, however, Citigroup Global Markets Holdings will continue to be obligated to make payments when due if the deposited funds are not sufficient. The obligations and rights under the debt indentures regarding compensation, reimbursement and indemnification of the trustee, optional redemption, mandatory and optional scheduled installment payments, if any, registration of transfer and exchange of the debt securities of such series, replacement of mutilated, destroyed, lost or stolen debt securities and certain other administrative provisions will continue even if Citigroup Global Markets Holdings exercises its defeasance and discharge or covenant defeasance options (Article 15). Under current United States federal income tax law, defeasance and discharge should probably be treated as a taxable exchange of the debt securities for an interest in the trust. As a consequence, each holder of the debt securities would recognize gain or loss equal to the difference between the value of the holder's interest in the trust and holder's tax basis for the debt securities deemed exchanged. Each holder would then be required to include in income its share of any income, gain and loss recognized by the trust. Even though federal income tax on the deemed exchange would be imposed on a holder, the holder would not receive any cash until the maturity or an earlier redemption of the debt securities, except for any current interest payments. Under current United States federal income tax law, a covenant defeasance would not be treated as a taxable exchange of debt securities. Prospective investors are urged to consult their tax advisors as to the specific consequences of a defeasance and discharge, including the applicability and effect of tax laws other than the United States federal income tax law. CONCERNING THE TRUSTEES Citigroup Global Markets Holdings and certain of its subsidiaries or affiliates maintain lines of credit or have other banking relationships with the trustees in the ordinary course of business. 16 DESCRIPTION OF INDEX WARRANTS The following briefly summarizes the material terms and provisions of the index warrants, other than pricing and related terms disclosed in the accompanying prospectus supplement. You should read the particular terms of the index warrants that are offered by Citigroup Global Markets Holdings, which will be described in more detail in a prospectus supplement. The prospectus supplement will also state whether any of the general provisions summarized below do not apply to the index warrants being offered. Index warrants may be issued independently or together with debt securities and may be attached to or separate from any such offered securities. Each series of index warrants will be issued under a separate index warrant agreement to be entered into between Citigroup Global Markets Holdings and a bank or trust company, as index warrant agent. A single bank or trust company may act as index warrant agent for more than one series of index warrants. The index warrant agent will act solely as the agent of Citigroup Global Markets Holdings under the applicable index warrant agreement and will not assume any obligation or relationship of agency or trust for or with any owners of the index warrants. A copy of the form of index warrant agreement, including the form of certificate or global certificate that will represent the index warrant certificate, will be filed as an exhibit to a document incorporated by reference in the registration statement of which this prospectus forms a part. You should read the more detailed provisions of the index warrant agreement and the index warrant certificate or index warrant global certificate for provisions that may be important to you. GENERAL The index warrant agreement does not limit the number of index warrants that may be issued. Citigroup Global Markets Holdings will have the right to "reopen" a previous series of index warrants by issuing additional index warrants of the series. Each index warrant will entitle the warrant holder to receive from Citigroup Global Markets Holdings, upon exercise, cash or securities. The amount in cash or number of securities will be determined by referring to an index or formula calculated on the basis of prices, yields, levels or other specified objective measures in respect of: - specified securities or securities indices; - specified foreign currencies or currency indices; - intangibles; - articles or goods; - any other financial, economic or other measure or instrument, including the occurrence or non-occurrence of any event or circumstance; - a combination thereof; or - changes in such measure or differences between two or more such measures. The prospectus supplement for a series of index warrants will describe the formula or methodology to be applied to the relevant index, indices, intangibles, articles, goods or other measures or instruments to determine the amount payable or distributable on the index warrants. If so specified in the prospectus supplement, the index warrants will entitle the warrant holder to receive from Citigroup Global Markets Holdings a minimum or maximum amount upon automatic exercise at expiration or the happening of any other event described in the prospectus supplement. Unless otherwise specified in the applicable prospectus supplement, the index warrants will be deemed to be automatically exercised upon expiration. Upon an automatic exercise, warrant holders will be entitled to receive the cash amount or number of securities due, if any, on an exercise of the index warrants. You should read the prospectus supplement applicable to any series of index warrants for any circumstances in which the payment or distribution or the determination of the payment or distribution on the index warrants may be postponed or exercised early or cancelled. The amount due after any such delay or postponement, or early exercise or cancellation, will be described in the applicable prospectus supplement. 17 Unless otherwise specified in the applicable prospectus supplement, Citigroup Global Markets Holdings will not purchase or take delivery of or sell or deliver any securities or currencies, including the underlying assets, other than the payment of any cash or distribution of any securities due on the index warrants, from or to warrant holders pursuant to the index warrants. The applicable prospectus supplement relating to any series of index warrants will describe the following: - the aggregate number of index warrants; - the offering price of the index warrants; - the measure or measures by which payment or distribution on the index warrants will be determined; - certain information regarding the underlying securities, foreign currencies, indices, intangibles, articles or goods or other measure or instrument; - the amount of cash or number of securities due, or the means by which the amount of cash or number of securities due may be calculated, on exercise of the index warrants, including automatic exercise, or upon cancellation; - the date on which the index warrants may first be exercised and the date on which they expire; - any minimum number of index warrants exercisable at any one time; - any maximum number of index warrants that may, at Citigroup Global Markets Holdings' election, be exercised by all warrant holders or by any person or entity on any day; - any provisions permitting a warrant holder to condition an exercise of index warrants; - the method by which the index warrants may be exercised; - the currency in which the index warrants will be denominated and in which payments on the index warrants will be made or the securities that may be distributed in respect of the index warrants; - the method of making any foreign currency translation applicable to payments or distributions on the index warrants; - the method of providing for a substitute index or indices or otherwise determining the amount payable in connection with the exercise of index warrants if an index changes or is no longer available; - the time or times at which amounts will be payable or distributable in respect of the index warrants following exercise or automatic exercise; - any national securities exchange on which, or self-regulatory organization with which, the index warrants will be listed; - any provisions for issuing the index warrants in certificated form; - if the index warrants are not issued in book-entry form, the place or places at, and the procedures by which, payments or distributions on the index warrants will be made; and - any other terms of such index warrants. Prospective purchasers of index warrants should be aware of special United States federal income tax considerations applicable to instruments such as the index warrants. The prospectus supplement relating to each series of index warrants will describe these tax considerations. The summary of United States federal income tax considerations contained in the prospectus supplement will be presented for informational purposes only, however, and will not be intended as legal or tax advice to prospective purchasers. You are urged to consult your tax advisors before purchasing any index warrants. LISTING Unless otherwise indicated in the prospectus supplement, the index warrants will be listed on a national securities exchange or with a self-regulatory organization, in each case as specified in the 18 prospectus supplement. It is expected that such organization will stop trading a series of index warrants as of the close of business on the related expiration date of those index warrants. MODIFICATION The index warrant agreement and the terms of the related index warrants may be amended by Citigroup Global Markets Holdings and the index warrant agent, without the consent of the holders of any index warrants, for any of the following purposes: - curing any ambiguity or curing, correcting or supplementing any defective or inconsistent provision; - maintaining the listing of the index warrants on any national securities exchange or with any other self-regulatory organization; - registering the index warrants under the Exchange Act; - permitting the issuance of individual index warrant certificates to warrant holders; - reflecting the issuance by Citigroup Global Markets Holdings of additional index warrants of the same series or reflecting the appointment of a successor depositary; or - for any other purpose which Citigroup Global Markets Holdings may deem necessary or desirable and which will not materially and adversely affect the interests of the warrant holders. Citigroup Global Markets Holdings and the index warrant agent also may modify or amend the index warrant agreement and the terms of the related index warrants, with the consent of the holders of not less than a majority of the then outstanding warrants of each series affected by such modification or amendment, for any purpose. However, no such modification or amendment may be made without the consent of each holder affected thereby if such modification or amendment: - changes the amount to be paid to the warrant holder or the manner in which that amount is to be determined; - shortens the period of time during which the index warrants may be exercised; - otherwise materially and adversely affects the exercise rights of the holders of the index warrants; or - reduces the percentage of the number of outstanding index warrants the consent of whose holders is required for modification or amendment of the index warrant agreement or the terms of the related index warrants. MERGER, CONSOLIDATION, SALE OR OTHER DISPOSITION If at any time there is a merger or consolidation involving Citigroup Global Markets Holdings or a sale, transfer, conveyance, other than lease, or other disposition of all or substantially all of the assets of Citigroup Global Markets Holdings, then the assuming corporation will succeed to the obligations of Citigroup Global Markets Holdings under the index warrant agreement and the related index warrants. Citigroup Global Markets Holdings will then be relieved of any further obligation under the index warrant agreement and index warrants and may then be dissolved, wound up or liquidated. ENFORCEABILITY OF RIGHTS BY WARRANT HOLDERS Any warrant holder may, without the consent of the index warrant agent or any other warrant holder, enforce by appropriate legal action on its own behalf its right to exercise, and to receive payment for, its index warrants. 19 BOOK-ENTRY PROCEDURES AND SETTLEMENT Most series of debt securities and index warrants will be book-entry securities. Upon issuance, all book-entry securities of the same issue will be represented by one or more fully registered global securities, without interest coupons. Each global security will be deposited with, or on behalf of, The Depository Trust Company, as securities depositary, and will be registered in the name of DTC or a nominee of DTC. DTC will thus be the only registered holder of these debt securities or index warrants and will be considered the sole owner of the securities for purposes of the indenture or index warrant agreement. Purchasers may only hold interests in the global notes or index warrants through DTC if they are participants in the DTC system. Purchasers may also hold interests through a securities intermediary -- banks, brokerage houses and other institutions that maintain securities accounts for customers -- that has an account with DTC or its nominee. DTC will maintain accounts showing the securities holdings of its participants, and these participants will in turn maintain accounts showing the securities holdings of their customers. Some of these customers may themselves be securities intermediaries holding debt securities or index warrants for their customers. Thus, each beneficial owner of a book-entry security will hold that security indirectly through a hierarchy of intermediaries, with DTC at the "top" and the beneficial owner's own securities intermediary at the "bottom." The securities of each beneficial owner of a book-entry security will be evidenced solely by entries on the books of the beneficial owner's securities intermediary. The actual purchaser of the securities will generally not be entitled to have the securities represented by the global securities registered in its name and will not be considered the owner under the indenture or index warrant agreement. In most cases, a beneficial owner will also not be able to obtain a paper certificate evidencing the holder's ownership of securities. The book-entry system for holding securities eliminates the need for physical movement of certificates and is the system through which most publicly traded common stock is held in the United States. However, the laws of some jurisdictions require some purchasers of securities to take physical delivery of their securities in definitive form. These laws may impair the ability to transfer or pledge book-entry securities. A beneficial owner of book-entry securities represented by a global security may exchange the securities for definitive (paper) securities only if: - DTC is unwilling or unable to continue as depositary for such global security and Citigroup Global Markets Holdings is unable to find a qualified replacement for DTC within 90 days; - at any time DTC ceases to be a clearing agency registered under the Securities Exchange Act of 1934; or - Citigroup Global Markets Holdings in its sole discretion decides to allow some or all book-entry securities to be exchangeable for definitive securities in registered form. Unless we indicate otherwise in the applicable prospectus supplement, any global security that is exchangeable will be exchangeable in whole for definitive securities in registered form, with the same terms and of an equal aggregate principal amount, in denominations of $1,000 and whole multiples of $1,000. Definitive notes or index warrants will be registered in the name or names of the person or persons specified by DTC in a written instruction to the registrar of the securities. DTC may base its written instruction upon directions it receives from its participants. In this prospectus and the accompanying prospectus supplement, for book-entry securities, references to actions taken by security holders will mean actions taken by DTC upon instructions from its participants, and references to payments and notices of redemption to security holders will mean payments and notices of redemption to DTC as the registered holder of the securities for distribution to participants in accordance with DTC's procedures. DTC is a limited purpose trust company organized under the laws of the State of New York, a "banking organization" within the meaning of the New York banking law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial 20 Code and a "clearing agency" registered under section 17A of the Securities Exchange Act of 1934. The rules applicable to DTC and its participants are on file with the SEC. Citigroup Global Markets Holdings will not have any responsibility or liability for any aspect of the records relating to, or payments made on account of, beneficial ownership interests in the book-entry securities or for maintaining, supervising or reviewing any records relating to the beneficial ownership interests. The information in this section about DTC has been obtained from sources that Citigroup Global Markets Holdings believes to be reliable but Citigroup Global Markets Holdings takes no responsibility for the accuracy thereof. LIMITATIONS ON ISSUANCES IN BEARER FORM In compliance with United States federal income tax laws and regulations, Citigroup Global Markets Holdings and any underwriter, agent or dealer participating in the offering of any debt security or index warrant in bearer form will agree that, in connection with the original issuance of such debt security or index warrant in bearer form and during the period ending 40 days after the issue date of such debt security or index warrant in bearer form, they will not offer, sell or deliver such debt security or index warrant in bearer form, directly or indirectly, to a U.S. person or to any person within the United States, except to the extent permitted under United States Treasury regulations. Debt securities or index warrants in bearer form will bear a legend to the following effect: "Any United States Person who holds this obligation will be subject to limitations under the United States income tax laws, including the limitations provided in Sections 165(j) and 1287(a) of the Internal Revenue Code." The sections referred to in the legend provide that, with certain exceptions, a U.S. person who holds debt securities or index warrants in bearer form will not be allowed to deduct any loss with respect to, and will not be eligible for capital gain treatment with respect to any gain realized on a sale, exchange, redemption or other disposition of, such debt securities or index warrants in bearer form. As used herein, "U.S. person" means a person who is a citizen or resident of the United States, or that is a corporation, partnership or other entity created or organized in or under the laws of the United States or any political subdivision thereof, an estate the income of which is subject to United States federal income taxation regardless of its source or a trust if (1) a United States court is able to exercise primary supervision over the trust's administration and (2) one or more United States persons have the authority to control all of the trust's substantial decisions. Pending the availability of a definitive global security or individual debt securities or index warrants in bearer form, as the case may be, debt securities that are issuable in bearer form may initially be represented by a single temporary global security, without interest coupons, to be deposited with a common depositary in London for Euroclear Bank S.A./N.V., as operator of the Euroclear System, and Clearstream International, for credit to the accounts designated by or on behalf of the purchasers thereof. Following the availability of a definitive global security in bearer form, without coupons attached, or individual debt securities in bearer form and subject to any further limitations described in the applicable prospectus supplement, the temporary global security will be exchangeable for interests in such definitive global security or for such individual debt securities, respectively, only upon receipt of a Certificate of Non-U.S. Beneficial Ownership. A Certificate of Non-U.S. Beneficial Ownership is a certificate to the effect that a beneficial interest in a temporary global security or warrant in bearer form is owned by a person that is not a U.S. Person or is owned by or through a financial institution in compliance with applicable U.S. Treasury regulations. In no event will a definitive debt security or index warrant in bearer form be delivered to a purchaser without the receipt of a Certificate of Non-U.S. Beneficial Ownership. No debt security or index warrant in bearer form will be delivered in or to the United States. If so specified in the applicable prospectus supplement, interest on a temporary global security will be paid to each of Euroclear and Clearstream with respect to that portion of such temporary global security held for its account, but 21 only upon receipt as of the relevant interest payment date of a Certificate of Non-U.S. Beneficial Ownership. Limitations on the offer, sale, delivery and exercise of warrants in bearer form (including a requirement that a Certificate of Non-U.S. Beneficial Ownership be delivered upon exercise of a warrant in bearer form) will be described in the prospectus supplement relating to such warrants in bearer form. 22 PLAN OF DISTRIBUTION Citigroup Global Markets Holdings may offer the offered securities in one or more of the following ways from time to time: - to or through underwriters or dealers; - by itself directly; - through agents; or - through a combination of any of these methods of sale. Any such underwriters, dealers or agents may include any broker-dealer subsidiary or affiliate of Citigroup Global Markets Holdings. The prospectus supplement relating to an offering of offered securities will set forth the terms of the offering, including: - the name or names of any underwriters, dealers or agents; - the purchase price of the offered securities and the proceeds to Citigroup Global Markets Holdings from such sales; - any underwriting discounts and commissions or agency fees and other items constituting underwriters' or agents' compensation; - the initial public offering price; - any discounts or concessions to be allowed or reallowed or paid to dealers; and - any securities exchanges on which the offered securities may be listed. Any initial public offering prices, discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time. In compliance with the guidelines of the National Association of Securities Dealers, Inc., the maximum discount or commission to be received by any NASD member or independent broker-dealer may not exceed 8% of the aggregate amount of the securities offered pursuant to this prospectus and any applicable prospectus supplement; however, it is anticipated that the maximum commission or discount to be received in any particular offering of securities will be significantly less than this amount. If underwriters are used in an offering of offered securities, the offered securities will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. The securities may be offered either to the public through underwriting syndicates represented by one or more managing underwriters or by one or more underwriters without a syndicate. Unless otherwise set forth in the prospectus supplement, the underwriters will not be obligated to purchase offered securities unless specified conditions are satisfied, and if the underwriters do purchase any offered securities, they will purchase all offered securities. In connection with underwritten offerings of the offered securities and in accordance with applicable law and industry practice, underwriters may over-allot or effect transactions that stabilize, maintain or otherwise affect the market price of the offered securities at levels above those that might otherwise prevail in the open market, including by entering stabilizing bids, effecting syndicate covering transactions or imposing penalty bids, each of which is described below. - A stabilizing bid means the placing of any bid, or the effecting of any purchase, for the purpose of pegging, fixing or maintaining the price of a security. 23 - A syndicate covering transaction means the placing of any bid on behalf of the underwriting syndicate or the effecting of any purchase to reduce a short position created in connection with the offering. - A penalty bid means an arrangement that permits the managing underwriter to reclaim a selling concession from a syndicate member in connection with the offering when offered securities originally sold by the syndicate member are purchased in syndicate covering transactions. These transactions may be effected on the New York Stock Exchange or any other securities exchange, in the over-the-counter market, or otherwise. Underwriters are not required to engage in any of these activities, or to continue such activities if commenced. If dealers are utilized in the sale of offered securities, Citigroup Global Markets Holdings will sell the offered securities to the dealers as principals. The dealers may then resell the offered securities to the public at varying prices to be determined by those dealers at the time of resale. The names of the dealers and the terms of the transaction will be set forth in the prospectus supplement relating to that transaction. Offered securities may be sold directly by Citigroup Global Markets Holdings to one or more institutional purchasers, or through agents designated by Citigroup Global Markets Holdings from time to time, at a fixed price or prices, which may be changed, or at varying prices determined at the time of sale. Any agent involved in the offer or sale of the offered securities in respect of which this prospectus is delivered will be named, and any commissions payable by Citigroup Global Markets Holdings to that agent will be set forth, in the prospectus supplement relating to that offering. Unless otherwise indicated in the prospectus supplement, any such agent will be acting on a best efforts basis for the period of its appointment. As one of the means of direct issuance of offered securities, Citigroup Global Markets Holdings may utilize the services of an entity through which it may conduct an electronic "dutch auction" or similar offering of the offered securities among potential purchasers who are eligible to participate in the auction or offering of the offered securities, if so described in the applicable prospectus supplement. If so indicated in the applicable prospectus supplement, Citigroup Global Markets Holdings will authorize agents, underwriters or dealers to solicit offers from certain types of institutions to purchase offered securities from Citigroup Global Markets Holdings at the public offering price set forth in that prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the future. Such contracts will be subject only to those conditions set forth in the prospectus supplement and the prospectus supplement will set forth the commission payable for solicitation of such contracts. The broker-dealer subsidiaries or affiliates of Citigroup Global Markets Holdings are members of the NASD and may participate in distributions of the offered securities. Accordingly, offerings of offered securities in which Citigroup Global Markets Holdings' broker-dealer subsidiaries or affiliates participate will conform with the requirements set forth in Rule 2720 of the Conduct Rules of the NASD. This prospectus, together with any applicable prospectus supplement, may also be used by any broker-dealer subsidiary or affiliate of Citigroup Global Markets Holdings in connection with offers and sales of the offered securities in market-making transactions, including block positioning and block trades, at negotiated prices related to prevailing market prices at the time of sale. Any of Citigroup Global Markets Holdings' broker-dealer subsidiaries or affiliates, including Citigroup Global Markets Inc., may act as principal or agent in such transactions. None of Citigroup Global Markets Holdings' broker-dealer subsidiaries or affiliates have any obligation to make a market in any of the offered securities and may discontinue any market-making activities at any time without notice, at its sole discretion. A prospectus in electronic format may be made available on the websites maintained by one or more of the underwriters, dealers or agents. The underwriters, dealers or agents may agree to allocate a number of notes to underwriters, dealers or agents for sale to their online brokerage account holders. The underwriters, dealers or agents will allocate notes to underwriters, dealers or agents that may make 24 Internet distributions on the same basis as other allocations. In addition, notes may be sold by the underwriters, dealers or agents to securities dealers who resell notes to online brokerage account holders. Underwriters, dealers and agents may be entitled, under agreements with Citigroup Global Markets Holdings, to indemnification by Citigroup Global Markets Holdings relating to material misstatements and omissions. Underwriters, dealers and agents may be customers of, engage in transactions with, or perform services for, Citigroup Global Markets Holdings and affiliates of Citigroup Global Markets Holdings in the ordinary course of business. Except for securities issued upon a reopening of a previous series, each series of offered securities will be a new issue of securities and will have no established trading market. Any underwriters to whom offered securities are sold for public offering and sale may make a market in such offered securities, but those underwriters will not be obligated to do so and may discontinue any market making at any time without notice. The offered securities may or may not be listed on a securities exchange. No assurance can be given that there will be a market for the offered securities. In order to hedge its obligations under the offered securities, Citigroup Global Markets Holdings expects to enter into one or more swaps or other derivatives transactions with one or more of its subsidiaries or affiliates. You should refer to "Use of Proceeds and Hedging" in this prospectus for more information. 25 ERISA MATTERS The Employee Retirement Income Security Act of 1974, as amended ("ERISA"), imposes certain restrictions on employee benefit plans that are subject to ERISA and on persons who are fiduciaries with respect to those plans. In accordance with ERISA's general fiduciary requirements, a fiduciary with respect to any such plan who is considering the purchase of the debt securities or index warrants of Citigroup Global Markets Holdings on behalf of the plan should determine whether the purchase is permitted under the governing plan documents and is prudent and appropriate for the plan in view of its overall investment policy and the composition and diversification of its portfolio. Citigroup Global Markets Holdings has subsidiaries and affiliates, including broker-dealer subsidiaries and affiliates, that provide services to many employee benefit plans. Citigroup Global Markets Holdings and any direct or indirect subsidiary or affiliate of Citigroup Global Markets Holdings may each be considered a "party in interest" within the meaning of ERISA and a "disqualified person" under corresponding provisions of the Internal Revenue Code of 1986, as amended (the "Code"), to many employee benefit plans and retirement accounts. "Prohibited transactions" within the meaning of ERISA and the Code may result if any offered securities are acquired by an employee benefit plan as to which Citigroup Global Markets Holdings or any direct or indirect subsidiary or affiliate of Citigroup Global Markets Holdings is a party in interest, unless the offered securities are acquired pursuant to an applicable statutory or administrative exemption. Any employee benefit plan or other entity to which such provisions of ERISA or the Code apply proposing to acquire the offered securities should consult with its legal counsel. Please consult the applicable prospectus supplement for further information with respect to a particular offering of securities. LEGAL MATTERS Edward F. Greene, General Counsel of Citigroup Global Markets Holdings, 388 Greenwich Street, New York, New York 10013, or counsel to be identified in the applicable prospectus supplement, will act as legal counsel to Citigroup Global Markets Holdings. Mr. Greene beneficially owns, or has rights to acquire under employee benefit plans, an aggregate of less than one percent of the common stock of Citigroup Inc. Cleary, Gottlieb, Steen & Hamilton, New York, New York, or other counsel identified in the applicable prospectus supplement, will act as legal counsel to the underwriters. Cleary, Gottlieb, Steen & Hamilton has from time to time acted as counsel for Citigroup Global Markets Holdings and its subsidiaries and affiliates and may do so in the future. EXPERTS The consolidated financial statements of Citigroup Global Markets Holdings Inc. as of and for the years ended December 31, 2003 and 2002 have been audited by KPMG LLP, Independent Registered Public Accounting Firm, as set forth in their report dated February 26, 2004 on the consolidated financial statements. The consolidated financial statements are included in Citigroup Global Markets Holdings' annual report on Form 10-K for the year ended December 31, 2003, 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 refers to changes, in 2003, in Citigroup Global Markets Holdings' methods of accounting for variable interest entities and stock-based compensation, in 2002, in Citigroup Global Markets Holdings' methods of accounting for goodwill and intangible assets, and, in 2001, in Citigroup Global Markets Holdings' methods of accounting for derivative instruments and hedging activities. The consolidated financial statements of Citigroup Global Markets Holdings 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. To the extent that KPMG LLP audits and reports on consolidated financial statements of Citigroup Global Markets Holdings issued at future dates, and consents to the use of their report thereon such consolidated financial statements also will be incorporated by reference in the registration statement in reliance upon their report and said authority. 26 THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT IS NOT COMPLETE AND MAY BE CHANGED. CITIGROUP GLOBAL MARKETS HOLDINGS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS SUPPLEMENT IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. SUBJECT TO COMPLETION, DATED OCTOBER 8, 2004 PROSPECTUS SUPPLEMENT (To prospectus dated , 2004) $10,945,831,296 CITIGROUP GLOBAL MARKETS HOLDINGS INC. MEDIUM-TERM SENIOR NOTES, SERIES D MEDIUM-TERM SUBORDINATED NOTES, SERIES E DUE NINE MONTHS OR MORE FROM THE DATE OF ISSUE GENERAL TERMS OF SALE The following terms will generally apply to the medium-term senior and subordinated notes that we will sell from time to time using this prospectus supplement and the attached prospectus. Citigroup Global Markets Holdings will include information on the specific terms for each note in a pricing supplement to this prospectus supplement that Citigroup Global Markets Holdings will deliver to prospective buyers of any note. The maximum amount that Citigroup Global Markets Holdings expects to receive from the sale of the notes is between $10,943,642,130 and $10,398,539,731 after paying the agents commissions of between $2,189,166 and $547,291,565. MATURITY: 9 months or more from the date of issue. INDEXED NOTES: Payments of interest or principal may be linked to the price of one or more securities, currencies, commodities, goods, measures or events. REDEMPTION: Terms of specific notes may permit or require redemption at our option or repayment at your option. RISKS: Index and currency risks may exist. CURRENCIES: U.S. dollars and other currencies.
INTEREST RATES: Fixed, floating or zero coupon. RANKING: The Series D notes are senior notes which are part of our senior indebtedness and the Series E notes are subordinated notes which are part of our subordinated indebtedness. OTHER TERMS: You should review "Description of the Notes" and the pricing supplement for features that apply to your notes.
------------------------ CONSIDER CAREFULLY THE INFORMATION UNDER "RISK FACTORS" BEGINNING ON PAGE S-3 OF THIS PROSPECTUS SUPPLEMENT. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement or any accompanying prospectus or pricing supplement is truthful or complete. Any representation to the contrary is a criminal offense. These notes are not deposits or savings accounts but are unsecured debt obligations of Citigroup Global Markets Holdings Inc. The notes are not insured by the Federal Deposit Insurance Corporation or any other governmental agency or instrumentality. CITIGROUP , 2004 TABLE OF CONTENTS PROSPECTUS SUPPLEMENT
PAGE ---- Risk Factors................................................ S-3 Important Currency Information.............................. S-6 Description of the Notes.................................... S-7 Certain United States Federal Income Tax Considerations..... S-33 Plan of Distribution........................................ S-40 ERISA Matters............................................... S-41 Legal Matters............................................... S-42
PROSPECTUS Prospectus Summary.......................................... 1 Forward-Looking Statements.................................. 6 Citigroup Global Markets Holdings Inc. ..................... 7 Use of Proceeds and Hedging................................. 8 Description of Debt Securities.............................. 10 Description of Index Warrants............................... 17 Book-Entry Procedures and Settlement........................ 20 Limitations on Issuances in Bearer Form..................... 21 Plan of Distribution........................................ 23 ERISA Matters............................................... 26 Legal Matters............................................... 26 Experts..................................................... 26
S-2 RISK FACTORS CHANGES IN EXCHANGE RATES AND EXCHANGE CONTROLS COULD RESULT IN A SUBSTANTIAL LOSS TO YOU. An investment in foreign currency notes, which are notes denominated in a specified currency other than U.S. dollars, entails significant risks that are not associated with a similar investment in a security denominated in U.S. dollars. Similarly, an investment in an indexed note, on which all or a part of any payment due is based on a currency other than U.S. dollars, has significant risks that are not associated with a similar investment in non-indexed notes. These risks include, but are not limited to: - the possibility of significant market changes in rates of exchange between U.S. dollars and the specified currency; - the possibility of significant changes in rates of exchange between U.S. dollars and the specified currency resulting from the official redenomination or revaluation of the specified currency; and - the possibility of the imposition or modification of foreign exchange controls by either the United States or foreign governments. These risks generally depend on factors over which Citigroup Global Markets Holdings has no control and which cannot be readily foreseen, such as: - economic events; - political events; and - the supply of, and demand for, the relevant currencies. In recent years, rates of exchange between U.S. dollars and some foreign currencies in which Citigroup Global Markets Holdings' notes may be denominated, and between these foreign currencies and other foreign currencies, have been volatile. This volatility may be expected in the future. Fluctuations that have occurred in any particular exchange rate in the past are not necessarily indicative, however, of fluctuations that may occur in the rate during the term of any foreign currency note. Depreciation of the specified currency of a foreign currency note against U.S. dollars would result in a decrease in the effective yield of such foreign currency note below its coupon rate and could result in a substantial loss to the investor on a U.S. dollar basis. Governments have imposed from time to time, and may in the future impose, exchange controls that could affect exchange rates as well as the availability of a specified currency other than U.S. dollars at the time of payment of principal, any premium, or interest on a foreign currency note. There can be no assurance that exchange controls will not restrict or prohibit payments of principal, any premium, or interest denominated in any such specified currency. Even if there are no actual exchange controls, it is possible that a specified currency would not be available to Citigroup Global Markets Holdings when payments on a note are due because of circumstances beyond the control of Citigroup Global Markets Holdings. In this event, Citigroup Global Markets Holdings will make required payments in U.S. dollars on the basis described in this prospectus supplement. You should consult your own financial and legal advisors as to the risks of an investment in notes denominated in a currency other than U.S. dollars. See "-- The Unavailability of Currencies Could Result in a Substantial Loss to You" and "Description of the Notes -- Payment of Principal and Interest" below. The information set forth in this prospectus supplement is directed to prospective purchasers of notes who are United States residents, except where otherwise expressly noted. Citigroup Global Markets Holdings disclaims any responsibility to advise prospective purchasers who are residents of countries other than the United States regarding any matters that may affect the purchase or holding of, or receipt of payments of principal, premium or interest on, notes. Such persons should consult their advisors with regard to these matters. Any pricing supplement relating to notes having a specified currency other than S-3 U.S. dollars will contain a description of any material exchange controls affecting that currency and any other required information concerning the currency. THE UNAVAILABILITY OF CURRENCIES COULD RESULT IN A SUBSTANTIAL LOSS TO YOU. Except as set forth below, if payment on a note is required to be made in a specified currency other than U.S. dollars and that currency is -- - unavailable due to the imposition of exchange controls or other circumstances beyond Citigroup Global Markets Holdings' control; - no longer used by the government of the country issuing the currency; or - no longer used for the settlement of transactions by public institutions of the international banking community -- then all payments on the note will be made in U.S. dollars until the currency is again available or so used. The amounts so payable on any date in the currency will be converted into U.S. dollars on the basis of the most recently available market exchange rate for the currency or as otherwise indicated in the applicable pricing supplement. Any payment on a note made under these circumstances in U.S. dollars will not constitute a default or an event of default under the indenture under which the note was issued. If the specified currency of a note is officially redenominated, other than as a result of European Monetary Union, such as by an official redenomination of any specified currency that is a composite currency, then the payment obligations of Citigroup Global Markets Holdings on the note will be the amount of redenominated currency that represents the amount of Citigroup Global Markets Holdings' obligations immediately before the redenomination. The notes will not provide for any adjustment to any amount payable as a result of: - any change in the value of the specified currency of those notes relative to any other currency due solely to fluctuations in exchange rates; or - any redenomination of any component currency of any composite currency, unless that composite currency is itself officially redenominated. Currently, there are limited facilities in the United States for conversion of U.S. dollars into foreign currencies, and vice versa. In addition, banks do not generally offer non-U.S. dollar-denominated checking or savings account facilities in the United States. Accordingly, payments on notes made in a currency other than U.S. dollars will be made from an account at a bank located outside the United States, unless otherwise specified in the applicable pricing supplement. JUDGMENTS IN A FOREIGN CURRENCY COULD RESULT IN A SUBSTANTIAL LOSS TO YOU. The notes will be governed by, and construed in accordance with, the laws of New York State. Courts in the United States customarily have not rendered judgments for money damages denominated in any currency other than the U.S. dollar. A 1987 amendment to the Judiciary Law of New York State provides, however, that an action based upon an obligation denominated in a currency other than U.S. dollars will be rendered in the foreign currency of the underlying obligation. Any judgment awarded in such an action will be converted into U.S. dollars at the rate of exchange prevailing on the date of the entry of the judgment or decree. S-4 CHANGES IN THE VALUE OF UNDERLYING ASSETS OF INDEXED NOTES COULD RESULT IN A SUBSTANTIAL LOSS TO YOU. An investment in indexed notes may have significant risks that are not associated with a similar investment in a debt instrument that: - has a fixed principal amount; - is denominated in U.S. dollars; and - bears interest at either a fixed rate or a floating rate based on nationally published interest rate references. The risks of a particular indexed note will depend on the terms of that indexed note. Such risks may include, but are not limited to, the possibility of significant changes in the prices of: - the underlying assets; - another objective price; and - economic or other measures making up the relevant index. Underlying assets could include: - one or more securities or securities indices; - one or more specified foreign currency or currency indices; - a combination thereof; - intangibles; - goods; - articles; - commodities; and - any other financial, economic or other measure or instrument. The risks associated with a particular indexed note generally depend on factors over which Citigroup Global Markets Holdings has no control and which cannot readily be foreseen. These risks include: - economic events; - political events; and - the supply of, and demand for, the underlying assets. In recent years, currency exchange rates and prices for various underlying assets have been highly volatile. Such volatility may be expected in the future. Fluctuations in rates or prices that have occurred in the past are not necessarily indicative, however, of fluctuations that may occur during the term of any indexed note. In considering whether to purchase indexed notes, you should be aware that the calculation of amounts payable on indexed notes may involve reference to: - an index determined by a subsidiary or an affiliate of Citigroup Global Markets Holdings; or - prices that are published solely by third parties or entities which are not regulated by the laws of the United States. The risk of loss as a result of linking principal or interest payments on indexed notes to an index and to the underlying assets can be substantial. You should consult your own financial and legal advisors as to the risks of an investment in indexed notes. S-5 IMPORTANT CURRENCY INFORMATION Purchasers are required to pay for each note in a currency specified by Citigroup Global Markets Holdings for that note. If requested by a prospective purchaser of a note having a specified currency other than U.S. dollars, an agent may at its discretion arrange for the exchange of U.S. dollars into the specified currency to enable the purchaser to pay for the note. Each such exchange will be made by such agent. The terms, conditions, limitations and charges that such agent may from time to time establish in accordance with its regular foreign exchange practice shall control the exchange. The purchaser must pay all costs of exchange. References in this prospectus supplement to "U.S. dollars," "U.S.$," "dollar" or "$" are to the lawful currency of the United States. S-6 DESCRIPTION OF THE NOTES The following description of the particular terms of the Medium-Term Senior Notes, Series D and Medium-Term Subordinated Notes, Series E supplements the description of the general terms and provisions of the debt securities set forth in the prospectus. If any specific information regarding the notes in this prospectus supplement is inconsistent with the more general terms of the debt securities described in the prospectus, you should rely on the information in this prospectus supplement. The pricing supplement for each offering of notes will contain the specific information and terms for that offering. If any information in the pricing supplement, including any changes in the method of calculating interest on any note, is inconsistent with this prospectus supplement, you should rely on the information in the pricing supplement. The pricing supplement may also add, update or change information contained in the prospectus and this prospectus supplement. It is important for you to consider the information contained in the prospectus, this prospectus supplement and the pricing supplement in making your investment decision. GENERAL Introduction. The senior notes are a series of senior debt securities issued under Citigroup Global Markets Holdings' senior debt indenture dated as of December 1, 1988, as amended from time to time, between Citigroup Global Markets Holdings and JPMorgan Chase Bank, as successor trustee. The subordinated notes are a series of subordinated debt securities issued under Citigroup Global Markets Holdings' subordinated debt indenture. At the date of this prospectus supplement, the notes offered pursuant to this prospectus supplement are limited to an aggregate initial public offering price or purchase price of up to $10,945,831,296 or its equivalent in one or more foreign or composite currencies. This amount is subject to reduction as a result of the sale of other securities under the registration statement of which this prospectus supplement and the accompanying prospectus form a part, or under a registration statement to which this prospectus supplement and the accompanying prospectus also relate. The amount of notes sold of either series will reduce the amount of notes of the other series that may be sold. Citigroup Global Markets Holdings reserves the right to withdraw, cancel or modify the offer made by this prospectus supplement without notice. The aggregate amount of notes may be increased from time to time to such larger amount as may be authorized by Citigroup Global Markets Holdings. The U.S. dollar equivalent of the public offering price or purchase price of a note having a specified currency other than U.S. dollars will be determined on the basis of the market exchange rate. Unless otherwise specified in the pricing supplement, this market exchange rate will be the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York for that specified currency on the applicable issue date. Such determination will be made by Citigroup Global Markets Holdings or its agent, as the exchange rate agent for the applicable series of notes. Ranking. The senior notes will constitute part of the senior indebtedness of Citigroup Global Markets Holdings and will rank on an equal basis with all other unsecured debt of Citigroup Global Markets Holdings other than subordinated debt. The subordinated notes will be subordinate and junior in the right of payment, to the extent and in the manner set forth in the subordinated debt indenture, to all senior indebtedness of Citigroup Global Markets Holdings. See "Description of Debt Securities -- Subordinated Debt" in the prospectus. If there were an event of default with respect to any senior indebtedness, the trustee or holders of 25% of the principal amount of senior debt securities outstanding in a series could demand that the principal be repaid immediately. If there were an event of default with respect to any subordinated indebtedness involving certain events of insolvency or bankruptcy, the trustee or holders of 25% of the principal amount of subordinated debt securities outstanding in a series could demand that the principal be paid immediately. In the absence of certain events of insolvency or bankruptcy, failure to pay amounts due with respect to subordinated indebtedness would not permit the trustee or such holders to demand that the S-7 principal of such subordinated debt securities be paid immediately. See "Description of Debt Securities -- Events of Default and Defaults" in the prospectus. On a consolidated basis, the aggregate principal amount of senior indebtedness of Citigroup Global Markets Holdings outstanding as of June 30, 2004 was approximately $76.3 billion. This senior indebtedness consisted of approximately $49.6 billion of term debt, approximately $18.9 billion of commercial paper and approximately $7.8 billion of other short-term borrowings. Forms of Notes. The notes will be issued in fully registered form only, without coupons. In addition, Citigroup Global Markets Holdings may offer notes in bearer form in a concurrent offering outside the United States. The notes in registered form may not be exchanged for notes in bearer form. Each note will be issued initially as a book-entry note, which will be a global security registered in the name of a nominee of DTC, as depositary, or another depositary named in the pricing supplement. Alternatively, if specified in the applicable pricing supplement, each note will be issued initially as a certificated note, which will be a certificate issued in temporary or definitive form. Except as set forth in the accompanying prospectus under "Book-Entry Procedures and Settlement," book-entry notes will not be issuable as certificated notes. See "Book-Entry System" below. Denominations. Unless otherwise specified in the applicable pricing supplement, the authorized denominations of notes denominated in U.S. dollars will be $1,000 and any larger amount that is a whole multiple of $1,000. The authorized denominations of notes that have a specified currency other than U.S. dollars will be the approximate equivalents in the specified currency. Maturity. Unless otherwise specified in the applicable pricing supplement, each note will mature on a stated maturity date. The stated maturity date will be a business day more than nine months from its date of issue, as selected by the purchaser and agreed to by Citigroup Global Markets Holdings. If so specified in the applicable pricing supplement, the stated maturity date may be extended at the option of Citigroup Global Markets Holdings, and each note may also be redeemed at the option of Citigroup Global Markets Holdings, or repaid at the option of the holder, prior to its stated maturity. Each note that has a specified currency of pounds sterling will mature in compliance with the regulations the Bank of England may promulgate from time to time. Additional Information. The pricing supplement relating to a note will describe the following terms: - the specified currency for such note; - whether such note (1) is a fixed rate note; (2) is a floating rate note; (3) is an amortizing note, meaning that a portion or all the principal amount is payable prior to stated maturity in accordance with a schedule, by application of a formula, or based on an index; and/or (4) is an indexed note on which payments of interest or principal, or both, may be linked to the price of one or more securities, currencies, intangibles, articles, commodities or goods or any other financial, economic or other measure or instrument, including the occurrence or non-occurrence of any event or circumstance; - the price at which such note will be issued, which will be expressed as a percentage of the aggregate principal amount or face amount; - the original issue date on which such note will be issued; - the date of the stated maturity; - if the note is a fixed rate note, the rate per annum at which the note will bear any interest, and whether and how that rate may be changed prior to its stated maturity; S-8 - if the note is a floating rate note, relevant terms such as: (1) the base rate; (2) the initial interest rate; (3) the interest reset period or the interest reset dates; (4) the interest payment dates; (5) any index maturity; (6) any maximum interest rate; (7) any minimum interest rate; (8) any spread or spread multiplier; and (9) any other terms relating to the particular method of calculating the interest rate for the note and whether and how the spread or spread multiplier may be changed prior to stated maturity; - whether the note is a note issued originally at a discount; - if the note is an amortizing note, the terms for repayment prior to stated maturity; - if the note is an indexed note, in the case of an indexed rate note, the manner in which the amount of any interest payment will be determined or, in the case of an indexed principal note, its face amount and the manner in which the principal amount payable at stated maturity will be determined; - whether the note may be redeemed at the option of Citigroup Global Markets Holdings, or repaid at the option of the holder, prior to stated maturity as described under "Optional Redemption, Repayment and Repurchase" below and the terms of its redemption or repayment; - whether the note may have an optional extension beyond its stated maturity as described under "Extension of Maturity" below; - whether the note will be represented by a global security or a certificate issued in definitive form; - any special United States federal income tax consequences of the purchase, ownership and disposition of a particular issuance of notes; - whether the note is a renewable note, and, if so, its specific terms; - the use of proceeds, if materially different than that disclosed in the accompanying prospectus; - whether the holder of the note has a survivor's option, as described below under "Repayment Upon Death;" and - any other terms of the note provided in the accompanying prospectus, to be set forth in a pricing supplement, or that are otherwise consistent with the provisions of the indenture under which the note will be issued. As used in this prospectus supplement, business day means: - for any note, any day that is not a Saturday or Sunday and that, in New York City, is not a day on which banking institutions generally are authorized or obligated by law or executive order to close; - for LIBOR notes only, a London business day, which shall be any day on which dealings in deposits in the specified currency are transacted in the London interbank market; - for any determination by the exchange rate agent of an exchange rate pursuant to notes having a specified currency other than U.S. dollars, an exchange rate business day, which shall be any day on which banking institutions and foreign exchange markets settle payments in New York City and London; - for notes having a specified currency other than U.S. dollars only, other than notes denominated in euros, any day that, in the principal financial center (as defined below) of the country of the specified currency, is not a day on which banking institutions generally are authorized or obligated by law to close; and S-9 - for EURIBOR notes and notes denominated in euros, a TARGET business day, which will be any day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer System is open. As used above, a principal financial center means the capital city of the country issuing the specified currency. However, for Australian dollars, Canadian dollars and Swiss francs, the principal financial center will be Sydney, Toronto and Zurich, respectively. PAYMENT OF PRINCIPAL AND INTEREST Citigroup Global Markets Holdings will pay the principal of, and any premium and interest on, each note in the specified currency for the note. If the specified currency for a note is other than U.S. dollars, Citigroup Global Markets Holdings will, unless otherwise specified in the applicable pricing supplement, arrange to convert all payments in respect of the note into U.S. dollars in the manner described in the following paragraph. The holder of a note having a specified currency other than U.S. dollars may, if stated in the applicable pricing supplement and such note, elect to receive all payments on the note in the specified currency by delivering a written notice to the trustee for such note not later than fifteen calendar days prior to the applicable payment date, except under the circumstances described under "Risk Factors -- The Unavailability of Currencies Could Result in a Substantial Loss to You" above. Such election will remain in effect until revoked by a written notice to the trustee that is received not later than fifteen calendar days prior to the applicable payment date. If an event of default has occurred or Citigroup Global Markets Holdings has given notice of redemption of a note, no such change of election may be made. Unless otherwise specified in the pricing supplement, the amount of any U.S. dollar payment on a note having a specified currency other than U.S. dollars will be determined by the exchange rate agent: - based on the specified currency/U.S. dollar exchange rate prevailing at 11:00 a.m., London time, on the second exchange rate business day prior to the applicable payment date, or - if an exchange rate bid quotation is not so available, the exchange rate agent will obtain a bid quotation from a leading foreign exchange bank in London selected by the exchange rate agent after consultation with Citigroup Global Markets Holdings. The exchange rate agent will also determine prior to settlement the aggregate amount of the specified currency payable on a payment date for all notes denominated in the specified currency. All currency exchange costs will be deducted from payments to the holders of the notes. If no such bid quotations are available, the payments will be made in the specified currency, unless the specified currency is unavailable due to the imposition of exchange controls or due to other circumstances beyond Citigroup Global Markets Holdings' control. In that case, payments will be made as described under "Risk Factors -- The Unavailability of Currencies Could Result in a Substantial Loss to You" above. Unless otherwise specified in the applicable pricing supplement, U.S. dollar payments of interest on notes, other than interest payable at stated maturity, will be made, except as provided below, by check mailed to the registered holders of the notes. In the case of global securities representing book-entry notes, payments of interest on notes will be made to a nominee of the depositary. A holder of $10,000,000, or its equivalent in a specified currency other than U.S. dollars, or more in aggregate principal amount of notes of like tenor and term, will be entitled to receive U.S. dollar payments by wire transfer of immediately available funds. However, such a holder is entitled to receive the payments only if the trustee receives written appropriate wire transfer instructions for the notes not later than fifteen calendar days prior to the applicable interest payment date. Unless otherwise specified in the applicable pricing supplement, principal and any premium and interest payable at the stated maturity of a note will be paid in immediately available funds upon surrender of the note at the corporate trust office or agency of the trustee for the note in New York City. S-10 Unless otherwise specified in this prospectus supplement or the applicable pricing supplement, any payment required to be made on a note on a date, including the stated maturity date, that is not a business day for the note need not be made on that date. A payment may be made on the next succeeding business day with the same force and effect as if made on the specified date. No additional interest will accrue as a result of delayed payment. Unless otherwise specified in the applicable pricing supplement, if the principal of any original issue discount note, or OID note, other than an indexed note, is declared to be due and payable immediately as a result of the acceleration of stated maturity, the amount of principal due and payable relating to the note will be limited to the aggregate principal amount of the note multiplied by the sum of (1) its issue price, expressed as a percentage of the aggregate principal amount, plus (2) the original issue discount amortized from the date of issue to the date of declaration. Amortization will be calculated using the interest method, computed in accordance with U.S. generally accepted accounting principles in effect on the date of declaration. Unless otherwise set forth in the applicable pricing supplement, the regular record date for any interest payment date for a floating rate note, fixed rate note or an indexed rate note will be the date, whether or not a business day, fifteen calendar days immediately preceding an interest payment date. REPAYMENT UPON DEATH The pricing supplement relating to any senior note will indicate if the holder of that note will have the survivor's option, which is an option to elect repayment of the note prior to its stated maturity in the event of the death of the beneficial owner of the note. Citigroup Global Markets Holdings will not issue any subordinated notes with a survivor's option. Pursuant to exercise of the survivor's option, Citigroup Global Markets Holdings will repay any note (or applicable portion of any note) properly tendered for repayment by the person, or on behalf of the person by a representative of that person, who has authority to act on behalf of the deceased beneficial owner of the note under the laws of the appropriate jurisdiction (including, without limitation, the personal representative, executor, surviving joint tenant or surviving tenant by the entirety of such deceased beneficial owner) at a price equal to the amortized face amount thereof, subject to the following limitations. Citigroup Global Markets Holdings may, in its sole discretion, limit to $2,500,000 (or the approximate equivalent in other currencies) the aggregate principal amount of all notes for which exercises of the survivor's option will be accepted in any calendar year. In the event that such limitation is applied, Citigroup Global Markets Holdings may limit to $250,000 (or the approximate equivalent in other currencies) the aggregate principal amount of notes (or portions of notes) for which exercise of the survivor's option will be accepted during a calendar year for any individual deceased beneficial owner of notes. Moreover, Citigroup Global Markets Holdings will not make principal repayments due to exercise of the survivor's option in amounts that are less than $5,000 (or the approximate equivalent in other currencies). In the event that the limitations described in the preceding sentences would result in the partial repayment of any note, the principal amount of such note remaining outstanding after repayment must be at least $5,000. Any note tendered due to exercise of the survivor's option may be withdrawn by a written request of its holder received by the paying agent prior to its repayment. The amortized face amount of a note on any date shall be the amount equal to - the issue price set forth on the face of the applicable pricing supplement plus - that portion of the difference between the issue price and the stated principal amount of the note that has accrued by such date at (1) the bond yield to maturity set forth on the face of the applicable pricing supplement or (2) if so specified in the applicable pricing supplement, the bond yield to call printed on its face. Such yield will be computed in each case in accordance with generally accepted United S-11 States bond yield computation principles. However, the amortized face amount of a note shall never exceed its stated principal amount. The bond yield to call listed on the face of a pricing supplement shall be computed on the basis of the first occurring optional redemption date for that note and the amount payable on the optional redemption date. If any note is not redeemed on its first optional redemption date, the bond yield to call for that note will be recomputed on the optional redemption date on the basis of the next occurring optional redemption date and the amount payable on that optional redemption date, and will continue to be so recomputed on each succeeding optional redemption date until the note is redeemed. Each note that is tendered pursuant to valid exercise of the survivor's option will be accepted promptly in the order all such notes are tendered, except for any note (or portion thereof) the acceptance of which, in the event Citigroup Global Markets Holdings imposed either of the limits described in the preceding paragraph, would - contravene the annual limitation or - result in the acceptance during the then current calendar year of an aggregate principal amount of notes (or portions thereof) exceeding $250,000 (or the approximate equivalent in other currencies) for the relevant individual deceased beneficial owner. If at the end of any calendar year Citigroup Global Markets Holdings has not imposed the annual limit, or if the aggregate principal amount of notes that have been accepted during that year due to exercise of the survivor's option has not exceeded the annual limitation, Citigroup Global Markets Holdings may accept notes from individual deceased owners in amounts that exceed the normal $250,000 per-person limit. In this case, Citigroup Global Markets Holdings will accept notes or portions of notes exceeding the $250,000 limit in the order they were received, up to the annual limitation for that calendar year. Any note or portion of a note accepted for repayment due to the exercise of the survivor's option will be repaid on the first interest payment due date that occurs 20 or more calendar days after the date of such acceptance. Each note (or any portion thereof) tendered for repayment that is not accepted in any calendar year due to the application of such annual limitation will be deemed to be tendered in the following calendar year in the order in which all such notes were originally tendered, unless any such note is withdrawn by its holder. If a note (or any portion thereof) that is tendered for repayment due to the valid exercise of the survivor's option is not accepted, the paying agent will deliver to any affected representative a notice that states the reasons the note (or portion thereof) has not been accepted for repayment. The notice will be sent by first-class mail to the broker or other entity that represents the deceased beneficial owner of the note or, in the case of a certificated note, to the registered holder thereof at its last known address as indicated on the records of the security registrar. Subject to the foregoing, in order for a survivor's option to be validly exercised, the paying agent must receive: - a written request for repayment signed by the representative. Such signature must be guaranteed by a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc. or a commercial bank or trust company having an office or correspondent in the United States; - tender of the note to be repaid; - appropriate evidence satisfactory to Citigroup Global Markets Holdings and the paying agent that (1) the representative has authority to act on behalf of the deceased beneficial owner; (2) the death of such beneficial owner has occurred; and (3) the deceased was the beneficial owner of such note at the time of death; - if applicable, a properly executed assignment or endorsement; and - if the note is held by a nominee of the deceased beneficial owner, a certificate satisfactory to the trustee from that nominee attesting to the beneficial ownership of the note. All questions as to the S-12 eligibility or validity of any exercise of the survivor's option will be determined by Citigroup Global Markets Holdings, in its sole discretion, and those determinations will be final and binding on all parties. If a note is represented by a global certificate, the depositary's nominee will be the holder of that note and therefore will be the only entity that can exercise the survivor's option for the note. To obtain repayment upon exercise of the survivor's option for such a note, the representative must provide to the broker or other entity through which the deceased beneficial owner holds an interest in the note: - the documents described in the first and third bullet points of the preceding paragraph; and - instructions to the broker or other entity to notify the depositary of the representative's desire to obtain repayment pursuant to exercise of the survivor's option. The broker or other entity will provide to the paying agent: - the documents received from the representative referred to in the first bullet point of the preceding paragraph; - its tender of such note pursuant to exercise of the survivor's option; and - a certificate satisfactory to the paying agent from the broker or other entity stating that it represents the deceased beneficial owner. The broker or other entity will be responsible for disbursing to the appropriate representative any payments it receives due to exercise of the survivor's option. A representative may obtain more information regarding the survivor's option from Citibank, N.A., the paying agent, at 111 Wall Street, 15th Floor, New York, New York 10005 Attention: Sam Bly (telephone (212) 657-7015), during normal business hours. FIXED RATE NOTES Each fixed rate note will bear interest from its original issue date, or from the last interest payment date to which interest has been paid or duly provided for, at the rate per annum stated in the applicable pricing supplement until its principal amount is paid or made available for payment. However, as described below under "Subsequent Interest Periods" and "Extension of Maturity," or as otherwise may be described in the applicable pricing supplement, the rate of interest payable on fixed rate notes may be adjusted from time to time. Unless otherwise set forth in the applicable pricing supplement, interest on each fixed rate note will be payable semiannually in arrears on the dates set forth in the applicable pricing supplement, with each such day being an interest payment date, and at stated maturity. Unless "accrue to pay" is specified in the applicable pricing supplement or unless otherwise specified in the applicable pricing supplement, if an interest payment date for any fixed rate note would otherwise be a day that is not a business day, any payment required to be made on the note on that date, including the stated maturity date, may be made on the next succeeding business day with the same force and effect as if made on the specified date. No additional interest will accrue as a result of such delayed payment. If in connection with any fixed rate note, "accrue to pay" is specified in the applicable pricing supplement, and any interest payment date for the fixed rate note would otherwise be a day that is not a business day, the interest payment date will be postponed to the next succeeding business day. Any payment of interest on an interest payment date will include interest accrued through the day before the interest payment date. Unless otherwise specified in the applicable pricing supplement, interest on fixed rate notes will be computed on the basis of a 360-day year of twelve 30-day months or, in the case of an incomplete month, the number of days elapsed. S-13 FLOATING RATE NOTES Each floating rate note will bear interest at the initial interest rate set forth, or otherwise described, in the applicable pricing supplement. The initial interest period is the period from the original issue date to, but not including, the first interest reset date. The interest reset period is the period from each interest reset date to, but not including, the following interest reset date. The initial interest period, and any interest reset period, is an interest period. The interest rate for each floating rate note will be determined based on an interest rate basis, the base rate, plus or minus any spread, or multiplied by any spread multiplier. A basis point, or bp, equals one-hundredth of a percentage point. The spread is the number of basis points that may be specified in the applicable pricing supplement as applicable to the note. The spread multiplier is the percentage that may be specified in the applicable pricing supplement as applicable to the note. As described below under "Subsequent Interest Periods" and "Extension of Maturity," or as may otherwise be specified in the applicable pricing supplement, the spread or spread multiplier on floating rate notes may be adjusted from time to time. The applicable pricing supplement will designate one of the following base rates as applicable to a floating rate note: - the CD Rate; - the Commercial Paper Rate; - the Federal Funds Rate; - LIBOR; - the Treasury Rate; - the Prime Rate; - the Eleventh District Cost of Funds Rate; - EURIBOR; or - such other base rate as is set forth in the applicable pricing supplement and in the note. The following terms are used in describing the various base rates. The "index maturity" is the period of maturity of the instrument or obligation from which the base rate is calculated. "H.15(519)" means the publication entitled "Statistical Release H.15(519), Selected Interest Rates," or any successor publication, published by the Board of Governors of the Federal Reserve System. "H.15 Daily Update" means the daily update of the Board of Governors of the Federal Reserve System at http://www.bog.frb.fed.us/releases/H15/update or any successor site or publication. "Calculation date" means the date on which the calculation agent is to calculate the interest rate which will be the earlier of (1) the tenth calendar day after the related rate determination date, or if any such day is not a business day, the next succeeding business day or (2) the business day preceding the applicable interest payment date or the stated maturity. As specified in the applicable pricing supplement, a floating rate note may also have either or both of the following, which will be expressed as a rate per annum on a simple interest basis: - maximum interest rate, which will be a maximum limitation, or ceiling, on the rate at which interest may accrue during any interest period; and/or - minimum interest rate, which will be a minimum limitation, or floor, on the rate at which interest may accrue during any interest period. In addition to any maximum interest rate that may be applicable to any floating rate note, the interest rate on a floating rate note will in no event be higher than the maximum rate permitted by applicable law. The notes will be governed by the law of New York State. As of the date of this prospectus supplement, the maximum rate of interest under provisions of the New York penal law, with a few exceptions, is 25% S-14 per annum on a simple interest basis. Such maximum rate of interest only applies to obligations that are less than $2,500,000. Citigroup Global Markets Holdings will appoint and enter into agreements with calculation agents to calculate interest rates on floating rate notes. Unless otherwise specified in the applicable pricing supplement, JPMorgan Chase Bank will be the calculation agent for each senior note that is a floating rate note and Deutsche Bank Trust Company Americas will be the calculation agent for each subordinated note that is a floating rate note. All determinations of interest by the calculation agents will, in the absence of manifest error, be conclusive for all purposes and binding on the holders of the floating rate notes. The interest rate on each floating rate note will be reset on an interest reset date, which means that the interest rate is reset daily, weekly, monthly, quarterly, semiannually or annually, as specified in the applicable pricing supplement. Unless otherwise specified in the applicable pricing supplement, the interest reset dates will be as follows: - in the case of floating rate notes that reset daily, each business day; - in the case of floating rate notes that reset weekly, other than Treasury Rate notes, the Wednesday of each week; - in the case of Treasury Rate notes that reset weekly and except as provided below under "Treasury Rate Notes," the Tuesday of each week; - in the case of floating rate notes that reset monthly, other than Eleventh District Cost of Funds Rate notes, the third Wednesday of each month; - in the case of floating rate notes that are Eleventh District Cost of Funds Rate notes, the first calendar day of each month; - in the case of floating rate notes that reset quarterly, the third Wednesday of March, June, September and December of each year; - in the case of floating rate notes that reset semiannually, the third Wednesday of each of two months of each year specified in the applicable pricing supplement; and - in the case of floating rate notes that reset annually, the third Wednesday of one month of each year specified in the applicable pricing supplement. If an interest reset date for any floating rate note would fall on a day that is not a business day, that interest reset date will be postponed to the next succeeding business day. In the case of a LIBOR note or a EURIBOR note, if postponement to the next business day would cause the interest reset date to be in the next succeeding calendar month, the interest reset date will instead be the immediately preceding business day. If an auction of direct obligations of United States Treasury bills falls on a day that is an interest reset date for Treasury Rate notes, the interest reset date will be the succeeding business day. Unless otherwise specified in the applicable pricing supplement and except as set forth below, the rate of interest that goes into effect on any interest reset date will be determined on a rate determination date preceding such interest reset date, as further described below. Unless otherwise specified in the applicable pricing supplement, interest payable on floating rate notes will be the interest accrued from and including the original issue date or the last date to which interest has been paid, as the case may be, to but excluding the applicable interest payment date. Accrued interest on a floating rate note with more than one interest reset date will be calculated by multiplying the principal amount of the note by an accrued interest factor. If the floating rate note is an indexed principal note, the face amount of the note will be multiplied by the accrued interest factor. The accrued interest factor will be computed by adding the interest factors calculated for each day in the period for which accrued interest is being calculated. Unless otherwise specified in the applicable pricing S-15 supplement, the interest factor for each such day will be computed by dividing the interest rate in effect on such day by 360, in the case of CD Rate notes, Commercial Paper Rate notes, Federal Funds Rate notes, LIBOR notes, Prime Rate notes, Eleventh District Cost of Funds Rate notes and EURIBOR notes. In the case of Treasury Rate notes, the interest factor for each such day will be computed by dividing the interest rate by the actual number of days in the year. The interest factor will be expressed as a decimal calculated to seven decimal places without rounding. For purposes of making the foregoing calculation, the interest rate in effect on any interest reset date will be the applicable rate as reset on that date. For all other floating rate notes, accrued interest will be calculated by multiplying the principal amount of the note by the interest rate in effect during the period for which accrued interest is being calculated. That product is then multiplied by the quotient obtained by dividing the number of days in the period for which accrued interest is being calculated by 360, in the case of CD Rate notes, Commercial Paper Rate notes, Federal Funds Rate notes, LIBOR notes, Prime Rate notes, Eleventh District Cost of Funds Rate notes and EURIBOR notes. In the case of Treasury Rate notes, the product is multiplied by the quotient obtained by dividing the number of days in the period for which accrued interest is being calculated by the actual number of days in the year. Unless otherwise specified in the applicable pricing supplement, all percentages resulting from any calculation of the rate of interest on a floating rate note will be rounded, if necessary, to the nearest 1/100,000 of 1% (.0000001), with five one-millionths of a percentage point rounded upward. All currency amounts used in, or resulting from, the calculation on floating rate notes will be rounded to the nearest one-hundredth of a unit. For purposes of rounding, .005 of a unit shall be rounded upward. Unless otherwise indicated in the applicable pricing supplement and except as provided below, interest will be payable as follows. - In the case of floating rate notes that reset daily, weekly or monthly, other than Eleventh District Cost of Funds Rate notes, interest will be payable on the third Wednesday of each month or on the third Wednesday of March, June, September and December of each year, as specified in the applicable pricing supplement. - In the case of Eleventh District Cost of Funds Rate notes, interest will be payable on the first calendar day of each March, June, September and December. - In the case of floating rate notes that reset quarterly, interest will be payable on the third Wednesday of March, June, September and December of each year. - In the case of floating rate notes that reset semiannually, interest will be payable on the third Wednesday of each of two months of each year specified in the applicable pricing supplement. - In the case of floating rate notes that reset annually, interest will be payable on the third Wednesday of one month of each year specified in the applicable pricing supplement. In each of these cases, interest will also be payable at maturity. If an interest payment date for any floating rate note would fall on a day that is not a business day, that interest payment date will be postponed to the next succeeding business day, except as described in the next paragraph. In the case of a LIBOR note or a EURIBOR note, if postponement to the next business day would cause the interest payment date to be in the next succeeding calendar month, the interest payment date will instead be the immediately preceding business day. If for any floating rate note, the applicable pricing supplement provides that the note does not accrue to pay, and if an interest payment date for that floating rate note would otherwise be a day that is not a business day, the interest payment date will not be postponed. Any payment required to be made on the floating rate note, however, may be made on the next succeeding business day with the same force and effect as if made on the due date. No additional interest will accrue as a result of such delayed payment. Upon the request of the holder of any floating rate note, the calculation agent for that note will provide the interest rate then in effect and, if determined, the interest rate that will become effective on the next interest reset date for the note. S-16 CD Rate Notes. Each CD Rate note will bear interest for each interest reset period at an interest rate equal to the CD Rate and any spread or spread multiplier specified in the note and in the applicable pricing supplement. The calculation agent will determine the CD Rate on each CD Rate determination date. The CD Rate determination date is the second business day prior to the interest reset date for each interest reset period for negotiable U.S. dollar certificates of deposit having the index maturity designated in the applicable pricing supplement as published in H.15(519) under the heading "CDs (Secondary Market)." The following procedures will be followed if the CD Rate cannot be determined as described above. - If the above rate is not published prior to 3:00 p.m., New York City time, on the calculation date pertaining to the CD Rate determination date, then the CD Rate for the interest reset period will be the rate on that date for negotiable U.S. dollar certificates of deposit of the index maturity designated in the applicable pricing supplement as published in the H.15 Daily Update, or other recognized electronic source used for the purpose of displaying the applicable rate, under the heading "CDs (Secondary Market)." - If by 3:00 p.m., New York City time, on the calculation date, the above rate is not yet published, then the CD Rate will be the arithmetic mean of the secondary market offered rates as of 10:00 a.m., New York City time, on that CD Rate determination date of three leading nonbank dealers in negotiable U.S. dollar certificates of deposit in New York City selected by the calculation agent for negotiable U.S. dollar certificates of deposit of major United States money center banks of the highest credit standing, in the market for negotiable U.S. dollar certificates of deposit, with a remaining maturity closest to the index maturity designated in the pricing supplement in a denomination of $5,000,000. - If the dealers selected by the calculation agent, however, are not quoting offered rates as mentioned in the preceding sentence, the CD Rate for that interest reset period will be the same as the CD Rate for the immediately preceding interest reset period. If there was no such interest reset period, the CD Rate will be the initial interest rate. CD Rate notes, like other notes, are not deposit obligations of a bank and are not insured by the Federal Deposit Insurance Corporation. Commercial Paper Rate Notes. Each Commercial Paper Rate note will bear interest for each interest reset period at an interest rate equal to the Commercial Paper Rate and any spread or spread multiplier, specified in the note and the applicable pricing supplement. The calculation agent will determine the Commercial Paper Rate on each Commercial Paper Rate determination date. The Commercial Paper Rate determination date is the business day immediately preceding the interest reset date for each interest reset period. The Commercial Paper Rate will be the money market yield on that date of the rate for commercial paper having the index maturity specified in the applicable pricing supplement, as published in H.15(519) under the heading "Commercial Paper -- Nonfinancial." The following procedures will be followed if the Commercial Paper Rate cannot be determined as described above. - If the rate is not published prior to 3:00 p.m., New York City time, on the calculation date pertaining to the Commercial Paper Rate determination date, then the Commercial Paper Rate for the interest reset period will be the money market yield on that date of the rate for commercial paper of the specified index maturity as published in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying the applicable rate, under the heading "Commercial Paper -- Nonfinancial." - If by 3:00 p.m., New York City time, on such calculation date, the above rate is not yet published, then the Commercial Paper Rate for the interest reset period will be the money market yield of the arithmetic mean of the offered rates, as of 11:00 a.m., New York City time, on that date, of three leading dealers of U.S. dollar commercial paper in New York City selected by the calculation agent for such Commercial Paper Rate note for commercial paper of the specified index maturity placed S-17 for an industrial issuer whose bonds are rated "AA" or the equivalent by a nationally recognized rating agency. - If the dealers selected by the calculation agent, however, are not quoting offered rates as mentioned in the preceding sentence, the Commercial Paper Rate for the interest reset period will be the same as the Commercial Paper Rate for the immediately preceding interest reset period. If there was no such interest reset period, the Commercial Paper Rate will be the initial interest rate. Money market yield will be calculated as follows: D X 360 money market yield = ------------- X 100 360 - (D X M)
where "D" refers to the applicable per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal, and "M" refers to the actual number of days in the applicable interest reset period. Federal Funds Rate Notes. Each Federal Funds Rate note will bear interest for each interest reset period at an interest rate equal to the Federal Funds Rate and any spread or spread multiplier specified in the note and the applicable pricing supplement. The calculation agent will determine the Federal Funds Rate on each Federal Funds Rate determination date. The Federal Funds Rate determination date is the business day immediately preceding the interest reset date for that interest reset period. The Federal Funds Rate will be the rate for U.S. dollar federal funds as published in H.15(519) under the heading "Federal Funds (Effective)" and displayed on Moneyline Telerate (or any successor service) on Page 120 (or any other page as may replace the specified Page on that service). The following procedures will be followed if the Federal Funds Rate cannot be determined as described above. - If the above rate does not appear on Moneyline Telerate on Page 120 or is not published prior to 3:00 p.m., New York City time, on the calculation date pertaining to the Federal Funds Rate determination date, the Federal Funds Rate for the interest reset period will be the rate on that date as published in the H.15 Daily Update under the heading "Federal Funds/Effective Rate," or other recognized electronic source used for the purpose of displaying the applicable rate. - If by 3:00 p.m., New York City time, on the calculation date the above rate is not yet published, then the Federal Funds Rate for the interest reset period will be the arithmetic mean of the rates for the last transaction in overnight U.S. dollar federal funds arranged by three leading brokers of U.S. dollar federal funds transactions in New York City, selected by the calculation agent prior to 9:00 a.m., New York City time, on that Federal Funds Rate determination date. - If the brokers so selected by the calculation agent are not quoting as mentioned above, the Federal Funds Rate for the interest reset period will be the Federal Funds Rate in effect for the particular Federal Funds Rate determination date. If there was no Federal Funds Rate in effect for the interest reset period, the Federal Funds Rate will be the initial interest rate. LIBOR Notes. Each LIBOR note will bear interest for each interest reset period at an interest rate equal to LIBOR and any spread or spread multiplier specified in the note and the applicable pricing supplement. The calculation agent will determine LIBOR on each LIBOR determination date. The LIBOR determination date is the second London business day prior to the interest reset date for each interest reset period. On a LIBOR determination date, the calculation agent will determine LIBOR for each interest reset period as follows. S-18 The calculation agent will determine the offered rates for deposits in the specified currency for the period of the index maturity specified in the applicable pricing supplement commencing on the interest reset date, which appear on the "designated LIBOR page" at approximately 11:00 a.m., London time, on that date. - If "LIBOR Moneyline Telerate" is designated in the applicable pricing supplement, or if neither "LIBOR Reuters" nor "LIBOR Moneyline Telerate" is specified in the applicable pricing supplement as the method for calculating LIBOR, "designated LIBOR page" means the display designated as page "3750" on the Moneyline Telerate Service, and LIBOR will be the relevant offered rate determined by the calculation agent. If page "3750" on the Moneyline Telerate Service is replaced by another page, or if the Moneyline Telerate Service is replaced by a successor service, then "LIBOR Moneyline Telerate" means the replacement page or service selected to display the London interbank offered rates of major banks. - If "LIBOR Reuters" is designated in the applicable pricing supplement, "designated LIBOR page" means the display designated as page "LIBO" on the Reuters Monitor Money Rates Service and LIBOR will be the arithmetic means of the offered rates, calculated by the calculation agent, or the offered rate, if the designated LIBOR page by its terms provides only for a single rate. If the LIBO page on that service is replaced by another page, or if the Reuters Monitor Money Rates Service is replaced by a successor service, then "LIBOR Reuters" means the replacement page or service selected to display the London interbank offered rates of major banks. If LIBOR cannot be determined on a LIBOR determination date as described above, then the calculation agent will determine LIBOR as follows. - The calculation agent will select four major banks in the London interbank market. - The calculation agent will request that the principal London offices of those four selected banks provide their offered quotations to prime banks in the London interbank market at approximately 11:00 a.m., London time, on the LIBOR determination date. These quotations shall be for deposits in the specified currency for the period of the specified index maturity, commencing on the interest reset date. Offered quotations must be based on a principal amount equal to at least $1,000,000 or the approximate equivalent in the specified currency that is representative of a single transaction in such market at that time. (1) If two or more quotations are provided, LIBOR for the interest reset period will be the arithmetic mean of those quotations. (2) If less than two quotations are provided, the calculation agent will select three major banks in New York City and follow the steps in the two bullet points below. - The calculation agent will then determine LIBOR for the interest reset period as the arithmetic mean of rates quoted by those three major banks in New York City to leading European banks at approximately 11:00 a.m., New York City time, on the LIBOR determination date. The rates quoted will be for loans in the specified currency, for the period of the specified index maturity, commencing on the interest reset date. Rates quoted must be based on a principal amount of at least $1,000,000 or the approximate equivalent in the specified currency that is representative of a single transaction in such market at that time. - If fewer than three New York City banks selected by the calculation agent are quoting rates, LIBOR for the interest reset period will be the same as for the immediately preceding interest reset period. If there was no preceding interest reset period, the LIBOR Rate will be the initial interest rate. Treasury Rate Notes. Each Treasury Rate note will bear interest for each interest reset period at an interest rate equal to the Treasury Rate and any spread or spread multiplier, specified in the note and the applicable pricing supplement. S-19 Treasury Rate Notes other than Constant Maturity Treasury Rate Notes Unless "Constant Maturity" is specified in the applicable pricing supplement, the Treasury Rate for each interest reset period will be the rate for the auction held on the Treasury Rate determination date for the interest reset period of treasury securities as that rate appears on Moneyline Telerate (or any successor service) on page 56 (or any other page as may replace the page on that service) or on page 57 (or any other page as may replace that page on that service) under the heading "INVESTMENT RATE." Treasury securities are direct obligations of the United States that have the index maturity specified in the applicable pricing supplement. If the Treasury Rate cannot be determined as described above, the following procedures will be followed in the order set forth below. (1) If the Treasury rate is not published prior to 3:00 P.M., New York City time on the related calculation date, then the Treasury Rate will be the Bond Equivalent Yield (as defined below) of the rate for the applicable treasury securities as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the heading "U.S. Government Securities/Treasury Bills/Auction High." (2) If the rate referred to in clause (1) is not so published by 3:00 P.M., New York City time, on the related calculation date, the Treasury Rate will be the Bond Equivalent Yield of the auction rate of the applicable treasury securities as announced by the United States Department of the Treasury. (3) If the rate referred to in clause (2) above is not so announced by the United States Department of the Treasury, or if the auction is not held, then the Treasury Rate will be the Bond Equivalent Yield of the rate on the Treasury Rate determination date of the applicable treasury securities published in H.15(519) under the heading "U.S. Government Securities/Treasury Bills/ Secondary Market." (4) If the rate referred to in clause (3) is not so published by 3:00 p.m., New York City time, on the related calculation date, then the Treasury Rate will be the rate on the Treasury Rate determination date of the applicable treasury securities as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the heading "U.S. Government Securities/Treasury Bills/Secondary Market." (5) If the rate referred to in clause (4) is not so published by 3:00 p.m., New York City time, on the related calculation date, then the Treasury Rate will be the rate on the Treasury Rate determination date calculated by the calculation agent as the Bond Equivalent Yield of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 p.m., New York City time, on the Treasury Rate determination date, of three primary United States government securities dealers selected by the calculation agent, for the issue of treasury securities with a remaining maturity closest to the index maturity specified in the applicable pricing supplement. (6) If the dealers selected by the calculation agent are not quoting bid rates as mentioned in (5) above, then the Treasury Rate for such interest reset period will be the same as the Treasury Rate for the immediately preceding interest reset period. If there was no preceding interest reset period, the Treasury Rate will be the initial interest rate. The Treasury Rate determination date for each interest reset period will be the day of the week in which the interest reset date for that interest reset period falls on which treasury securities would normally be auctioned. Treasury securities are normally sold at auction on Monday of each week unless that day is a legal holiday. In that case the auction is normally held on the following Tuesday, except that the auction may be held on the preceding Friday. If, as the result of a legal holiday, an auction is held on the preceding Friday, that Friday will be the Treasury Rate determination date pertaining to the interest reset period commencing in the next succeeding week. If an auction date falls on any day that would otherwise be an S-20 interest reset date for a Treasury Rate note, then that interest reset date will instead be the business day immediately following the auction date. Bond Equivalent: Yield will be calculated as follows: D X N Bond Equivalent Yield = ------------- X 100 360 - (D X M)
where "D" refers to the applicable per annum rate for treasury securities quoted on a bank discount basis and expressed as a decimal, "N" refers to 365 or 366, as the case may be, and "M" refers to the actual number of days in the applicable interest reset period. Constant Maturity Treasury Rate Notes If "Constant Maturity" is specified in the applicable pricing supplement, the Treasury Rate for each interest reset period will be the rate displayed on the designated CMT Telerate page under the caption "Treasury Constant Maturities" under the column for the designated CMT maturity index in the following manner. - If the designated CMT Moneyline Telerate page is 7051, the Treasury Rate will be the rate on the Constant Maturity Treasury Rate determination date. - If the rate referred to above does not appear on Moneyline Telerate Page 7051, then the Treasury Rate will be the treasury constant maturity rate for the designated CMT maturity index as published in the relevant H.15(519) under the caption "Treasury Constant Maturities." - If the rate referred to above does not so appear in H.15(519), then the Treasury Rate will be the constant treasury maturity rate on the Constant Maturity Treasury Rate determination date for the designated CMT maturity index as may then be published by either the Federal Reserve System Board of Governors or the United States Department of the Treasury that the calculation agent determines to be comparable to the rate which would have otherwise been published in H.15(519). - If the designated CMT Moneyline Telerate page is 7052, the Treasury Rate will be the average for the week or for the month, as specified in the applicable pricing supplement, ended immediately preceding the week or month, as applicable, in which the related Constant Maturity Treasury Rate determination date occurs. - If the rate referred to above does not appear on Moneyline Telerate Page 7052, then the Treasury Rate will be the one-week or one-month, as specified in the applicable pricing supplement, average of the treasury constant maturity rate for the designated CMT maturity index for the week or month as applicable, preceding the Constant Maturity Treasury determination date as published in the relevant H.15(519) under the caption "Treasury Constant Maturities." - If the rate referred to above does not so appear in H.15(519), then the Treasury Rate will be the one-week or one-month, as specified in the applicable pricing supplement, average of the constant treasury maturity rate for the designated CMT maturity index as otherwise announced by the Federal Reserve Bank of New York for the week or month, as applicable, ended immediately preceding the week or month, as applicable, in which the Constant Maturity Treasury Rate determination date falls. S-21 If the Treasury Rate cannot be determined as indicated above, the following procedures will be followed in the order set forth below: (1) If the above information, as applicable, is not so published, then the calculation agent will calculate the Treasury Rate on the Constant Maturity Treasury Rate determination date as follows: - The Treasury Rate will be a yield to maturity based on the arithmetic mean of the secondary market bid prices as of approximately 3:30 p.m., New York City time, on the Constant Maturity Treasury Rate determination date of three leading U.S. government securities dealers in New York City, for Treasury notes. The Treasury notes will be United States treasury securities, with an original maturity of approximately the designated CMT maturity index and a remaining term to maturity of not less than such designated CMT maturity index minus one year and in a principal amount that is representative for a single transaction in the securities in that market at that time. - The three government securities dealers referenced above will be identified from five such dealers who are selected by the calculation agent, one of which may be the agent, by eliminating the dealers with the highest and lowest quotations, or in the event of equality, one of the highest and/or lowest quotation, as the case may require. (2) If three or four, but not five, of such dealers provide quotations as described above, then the Treasury Rate will be based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of such quotes will be eliminated. (3) If the calculation agent is unable to obtain three such Treasury note quotations as described in (1) above, the Treasury Rate on such Constant Maturity Treasury Rate determination date will be calculated by the calculation agent as follows. - The rate will be a yield to maturity based on the arithmetic mean of the secondary market bid prices as of approximately 3:30 p.m., New York City time, on the Constant Maturity Treasury Rate determination date reported, according to their written records, by three leading U.S. government securities dealers in New York City, for Treasury notes with an original maturity of the number of years that is the next highest to the designated CMT maturity index and a remaining maturity closest to the index maturity specified in the applicable pricing supplement, and in an amount that is representative for a single transaction in that market at that time. - If two Treasury notes with an original maturity, as described above, have remaining terms to maturity equally close to the designated CMT maturity index, the calculation agent will obtain quotations for the Treasury note with the shorter remaining term to maturity and will use such quotations to calculate the Treasury Rate as set forth above. - The three government securities dealers referenced above will be identified from five such dealers who are selected by the calculation agent, one of which may be the agent, by eliminating the dealers with the highest and lowest quotations, or in the event of equality, one of the highest and/or lowest quotation, as the case may require. (4) If three or four, but not five, of such dealers provide quotations as described above, then the Treasury Rate will be based on the arithmetic mean of the offer prices obtained and neither the highest nor the lowest of such quotes will be eliminated. (5) If fewer than three dealers selected by the calculation agent provide quotations as described in (3) above, the Treasury Rate determined as of the Constant Maturity Treasury Rate determination date will be the Treasury Rate in effect on such Constant Maturity Treasury Rate determination date. "Designated CMT Moneyline Telerate page" means the display on the Telerate Service, or any successor service on the page specified in the applicable pricing supplement, or any other page as may S-22 replace such page on that service, or any successor service, for the purpose of displaying Treasury Constant Maturities as reported in H.15(519). If no such page is specified in the applicable pricing supplement, the designated CMT Telerate page will be 7052 for the most recent week. "Designated CMT maturity index" means the original period to maturity of the U.S. Treasury securities, either one, two, three, five, seven, ten, twenty or thirty years, specified in the applicable pricing supplement for which the Treasury Rate will be calculated. If no such maturity is specified in the applicable pricing supplement, the designated CMT maturity index will be two years. The "Constant Maturity Treasury Rate determination date" will be the second business day prior to the interest reset date for the applicable interest reset period. The CMT Rate for a Treasury security maturity as published as of any business day is intended to be indicative of the yield of a U.S. Treasury security having as of that business day a remaining term to maturity equivalent to its maturity. The CMT Rate as of any business day is based upon an interpolation by the U.S. Treasury of the daily yield curve of outstanding Treasury securities. This yield curve, which relates the yield on a security to its time to maturity, is based on the over-the-counter market bid yields on actively traded Treasury securities. Such yields are calculated from composites of quotations reported by leading U.S. government securities dealers, which may include one or more of the calculation agents or other affiliates of Citigroup Global Markets Holdings. Certain constant maturity yield values are read from the yield curve. Interpolation from the yield curve provides a theoretical yield for a Treasury security having ten years to maturity, for example, even if no outstanding Treasury security has as of that date exactly ten years remaining to maturity. Prime Rate Notes. Prime Rate notes will bear interest at a rate equal to the Prime Rate and any spread or spread multiplier specified in the Prime Rate notes and the applicable pricing supplement. The calculation agent will determine the Prime Rate for each interest reset period on each Prime Rate determination date. The Prime Rate determination date is the second business day prior to the interest reset date for each interest reset period. The Prime Rate will be the rate made available and subsequently published on that date in H.15(519) under the heading "Bank Prime Loan." The following procedures will be followed if the Prime Rate cannot be determined as described above. - If the rate is not published prior to 3:00 P.M., New York City time, on the related calculation date, then the Prime Rate will be the rate on the Prime Rate determination date that is published in the H.15 Daily Update under the heading "Bank Prime Loan." - If the rate referred to above is not published prior to 3:00 P.M., New York City time, on the related calculation date, then the Prime Rate will be the arithmetic mean of the rates of interest that appear on the Reuters Screen USPRIME1 page as such bank's prime rate or base lending rate on the Prime Rate determination date. - If fewer than four such rates appear on the Reuters Screen USPRIME1 page, then the calculation agent will select three major banks in New York City. The Prime Rate will be the arithmetic mean of the prime rates quoted by those three banks on the basis of the actual number of days in the year divided by a 360-day year as of the close of business on the Prime Rate determination date. - If the banks that the calculation agent selects do not provide quotations as described above, then the Prime Rate will remain the same as the Prime Rate in effect on the Prime Rate determination date. "Reuters Screen USPRIME1 page" means the display designated as page "USPRIME1" on the Reuters Monitor Money Rates Service, or any successor service or page, for the purpose of displaying prime rates or base lending rates of major United States banks. Eleventh District Cost of Funds Rate Notes. Eleventh District Cost of Funds Rate notes will bear interest at the interest rates, calculated based on the Eleventh District Cost of Funds Rate and any spread S-23 and/or spread multiplier, specified in the Eleventh District Cost of Funds Rate notes and the applicable pricing supplement. The calculation agent will determine the Eleventh District Cost of Funds Rate on each Eleventh District Cost of Funds Rate determination date. The Eleventh District Cost of Funds Rate determination date is the last working day of the month immediately prior to each interest reset date for each interest reset period on which the Federal Home Loan Bank of San Francisco publishes the Eleventh District Cost of Funds Index. The Eleventh District Cost of Funds Rate will be the rate equal to the monthly weighted average cost of funds for the calendar month preceding such Eleventh District Cost of Funds Rate determination date as set forth under the caption "Eleventh District" on Moneyline Telerate (or any successor service) on page 7058. Such page will be deemed to include any successor page, determined by the calculation agent, as of 11:00 A.M., San Francisco time, on the Eleventh District Cost of Funds Rate determination date. The following procedures will be followed if the Eleventh District Cost of Funds Rate cannot be determined as described above. - If the rate does not appear on Telerate page 7058 on any related Eleventh District Cost of Funds Rate determination date, the Eleventh District Cost of Funds Rate for the Eleventh District Cost of Funds Rate determination date will be the Eleventh District Cost of Funds Rate Index. - If the FHLB of San Francisco fails to announce the Eleventh District Cost of Funds Rate Index on or prior to the Eleventh District Cost of Funds Rate determination date for the calendar month immediately preceding the date, then the Eleventh District Cost of Funds Rate for such date will be the Eleventh District Cost of Funds Rate in effect on the Eleventh District Cost of Funds Rate determination date. The "Eleventh District Cost of Funds Rate Index" will be the monthly weighted average cost of funds paid by member institutions of the Eleventh Federal Home Loan Bank District that the FHLB of San Francisco most recently announced as the cost of funds for the calendar month preceding the date of such announcement. EURIBOR Notes. Each EURIBOR note will bear interest for each interest reset period at an interest rate equal to EURIBOR and any spread or spread multiplier specified in the note and the applicable pricing supplement. The calculation agent will determine EURIBOR on each EURIBOR determination date. The EURIBOR determination date is the second TARGET business day prior to the interest reset date for each interest reset period. On a EURIBOR determination date, the calculation agent will determine EURIBOR for each interest reset period as follows. The calculation agent will determine the offered rates for deposits in euros for the period of the index maturity specified in the applicable pricing supplement, commencing on the interest reset date, which appears on page 248 on the Telerate Service or any successor service or any page that may replace page 248 on that service which is commonly referred to as "Telerate Page 248" as of 11:00 a.m., Brussels time, on that date. If EURIBOR cannot be determined on a EURIBOR determination date as described above, then the calculation agent will determine EURIBOR as follows. - The calculation agent will select four major banks in the Euro-zone interbank market. - The calculation agent will request that the principal Euro-zone offices of those four selected banks provide their offered quotations to prime banks in the Euro-zone interbank market at approximately 11:00 a.m., Brussels time, on the EURIBOR determination date. These quotations shall be for deposits in euros for the period of the specified index maturity, commencing on the interest reset date. Offered quotations must be based on a principal S-24 amount equal to at least $1,000,000 or the approximate equivalent in euros that is representative of a single transaction in such market at that time. (1) If two or more quotations are provided, EURIBOR for the interest reset period will be the arithmetic mean of those quotations. (2) If less than two quotations are provided, the calculation agent will select four major banks in the Euro-zone and follow the steps in the two bullet points below. - The calculation agent will then determine EURIBOR for the interest reset period as the arithmetic mean of rates quoted by those four major banks in the Euro-zone to leading European banks at approximately 11:00 a.m., Brussels time, on the EURIBOR determination date. The rates quoted will be for loans in euros, for the period of the specified index maturity, commencing on the interest reset date. Rates quoted must be based on a principal amount of at least $1,000,000 or the approximate equivalent in euros that is representative of a single transaction in such market at that time. - If the banks so selected by the calculation agent are not quoting rates as described above, EURIBOR for the interest reset period will be the same as for the immediately preceding interest reset period. If there was no preceding interest reset period, EURIBOR will be the initial interest rate. "Euro-zone" means the region comprised of member states of the European Union that adopted the single currency in accordance with the Treaty establishing the European Community, as amended by the Treaty on European Union. Inverse Floating Rate Notes. Any floating rate note may be designated in the applicable pricing supplement as an inverse floating rate note. In such an event, unless otherwise specified in the applicable pricing supplement, the interest rate on the floating rate note will be equal to: - in the case of the period, if any, commencing on the issue date, or the date on which the note otherwise begins to accrue interest if different from the issue date, up to the first interest reset date, a fixed rate of interest established by Citigroup Global Markets Holdings as described in the applicable pricing supplement; and - in the case of each period commencing on an interest reset date, a fixed rate of interest specified in the pricing supplement minus the interest rate determined based on the base rate as adjusted by any spread and/or spread multiplier. However, on any inverse floating rate note, the interest rate will not be less than zero. Floating/Fixed Rate Notes. The applicable pricing supplement may provide that a note will be a floating rate note for a specified portion of its term and a fixed rate note for the remainder of its term. In such an event, the interest rate on the note will be determined as if it were a floating rate note and a fixed rate note for each respective period, all as specified in the applicable pricing supplement. SUBSEQUENT INTEREST PERIODS The pricing supplement relating to each note will indicate whether Citigroup Global Markets Holdings has the option to reset the interest rate, spread, spread multiplier or method of calculation, as the case may be, for the note. If Citigroup Global Markets Holdings has the option to reset, the pricing supplement will also indicate the optional reset date or dates on which the interest rate, spread, spread multiplier or method of calculation, as the case may be, may be reset. Citigroup Global Markets Holdings shall notify the trustee whether or not it intends to exercise this option relating to a note at least 45 but not more than 60 days prior to an optional reset date for the note. Not later than 40 days prior to the optional reset date, the trustee will mail to the holder of the note a reset notice first class, postage prepaid, indicating whether Citigroup Global Markets Holdings has elected to reset the interest rate, spread, spread multiplier or method of calculation, as the case may be. S-25 If Citigroup Global Markets Holdings elects to reset the interest rate, spread, spread multiplier or method of calculation, as the case may be, the trustee will mail to the holder in the manner described above a notice indicating the new interest rate, new spread, spread multiplier or method of calculation, as the case may be. The notice will also indicate any provisions for redemption during the subsequent interest period. The subsequent interest period is the period from the optional reset date to the next optional reset date or, if there is no next optional reset date, to the stated maturity of the note, including the date or dates on which or the period or periods during which, and the price or prices at which, a redemption may occur during a subsequent interest period. Upon the transmittal by the trustee of a reset notice to the holder of a note, the new interest rate or such new spread, spread multiplier and/or method of calculation, as the case may be, will take effect automatically. Except as modified by the reset notice and as described below, the note will have the same terms as prior to the transmittal of the reset notice. Despite the foregoing, not later than 20 days prior to an optional reset date for a note, Citigroup Global Markets Holdings may, at its option, revoke the interest rate, or the spread or spread multiplier, provided for in the reset notice relating to the optional reset date, and establish a higher interest rate, or a higher spread or spread multiplier, as applicable, for the subsequent interest period commencing on the optional reset date. Citigroup Global Markets Holdings can make such revocations by causing the trustee for the note to mail notice of the higher interest rate or higher spread or spread multiplier, as the case may be, first class, postage prepaid, to the holder of the note. The notice shall be irrevocable. All notes for which the interest rate or spread or spread multiplier is reset on an optional reset date will bear such higher interest rate, or higher spread or spread multiplier, as the case may be, whether or not tendered for repayment. The holder of a note will have the option to elect repayment of that note by Citigroup Global Markets Holdings on each optional reset date at a price equal to the principal amount of the note plus interest accrued to the optional reset date. In order for a note to be repaid on an optional reset date, the holder of the note must follow the procedures set forth below under "Optional Redemption, Repayment and Repurchase" for optional repayment. However, the period for delivery of the note or notification to the trustee for the note will be at least 25 but not more than 35 days prior to the optional reset date. Further, a holder who has tendered a note for repayment pursuant to a reset notice may, by written notice to the trustee for the note, revoke any tender for repayment until the close of business on the tenth day prior to the optional reset date. AMORTIZING NOTES Citigroup Global Markets Holdings may from time to time offer amortizing notes on which a portion or all of the principal amount is payable prior to stated maturity: - in accordance with a schedule; - by application of a formula; or - based on an index. Further information concerning additional terms and conditions of any amortizing notes, including terms for repayment of such notes, will be set forth in the applicable pricing supplement. INDEXED NOTES Citigroup Global Markets Holdings may from time to time offer indexed notes on which some or all interest payments, in the case of an indexed rate note, and/or the principal amount payable at stated maturity or earlier redemption or retirement, in the case of an indexed principal note, is determined based on: - the principal amount of the notes or, in the case of an indexed principal note, the amount designated in the applicable pricing supplement as the "face amount" of the indexed note; and S-26 - an index, which may be based on: (1) prices, changes in prices, or differences between prices, of one or more securities, currencies, intangibles, goods, articles or commodities; (2) the application of a formula; or (3) an index which shall be such other objective price, economic or other measures as are described in the applicable pricing supplement. A description of the index used in any determination of an interest or principal payment, and the method or formula by which interest or principal payments will be determined based on such index, will be set forth in the applicable pricing supplement. If a fixed rate note, floating rate note or indexed rate note is also an indexed principal note, the amount of any interest payment will be determined based on the face amount of that indexed note unless specified otherwise in the applicable pricing supplement. If an indexed note is also an indexed principal note, the principal amount payable at stated maturity or any earlier redemption or repayment of the indexed note may be different from the face amount. If a third party is appointed to calculate or announce the index for a particular indexed note, and the third party either (1) suspends the calculation or announcement of that index or (2) changes the basis upon which the index is calculated in a manner that is inconsistent with the applicable pricing supplement, then Citigroup Global Markets Holdings will select another third party to calculate or announce the index. Citigroup Global Markets Inc. or another affiliate of Citigroup Global Markets Holdings may be either the original or successor third party selected by Citigroup Global Markets Holdings. If for any reason the index cannot be calculated on the same basis and subject to the same conditions and controls as applied to the original third party, then any indexed interest payments or any indexed principal amount of the indexed note will be calculated in the manner set forth in the applicable pricing supplement. Any determination by the selected third party will be binding on all parties, except in the case of an obvious error. Unless otherwise specified in the applicable pricing supplement, for the purpose of determining whether holders of the requisite principal amount of notes outstanding under the applicable indenture have made a demand or given a notice or waiver or taken any other action, the outstanding principal amount of indexed notes will be deemed to be the face amount stated on the notes. Unless otherwise specified in the applicable pricing supplement, in the event of an acceleration of the stated maturity of an indexed note, the principal amount payable to the holder of the note upon acceleration will be the principal amount determined based on the formula used to determine the principal amount of the note on the stated maturity of the note, as if the date of acceleration were the stated maturity. An investment in indexed notes has significant risks, including wide fluctuations in market value as well as in the amounts of payments due, that are not associated with a similar investment in a conventional debt security. These risks depend on a number of factors including supply and demand for the particular security, currency, commodity or other good or article to which the note is indexed and economic and political events over which Citigroup Global Markets Holdings has no control. See "Risk Factors -- Changes in the Value of Underlying Assets of Indexed Notes Could Result in a Substantial Loss to You" above for a discussion of these considerations. Fluctuations in the price of any particular security or commodity, in the rates of exchange between particular currencies or in particular indices that have occurred in the past are not necessarily indicative, however, of fluctuations in the price or rates of exchange that may occur during the term of any indexed notes. Accordingly, prospective investors should consult their own financial and legal advisors as to the risks of an investment in indexed notes. S-27 DUAL CURRENCY NOTES Citigroup Global Markets Holdings may from time to time offer dual currency notes on which Citigroup Global Markets Holdings has a one time option of making all payments of principal, any premium and interest on such notes which are issued on the same day and have the same terms, the payments on which would otherwise be made in the specified currency of those notes, in the optional payment currency specified in the applicable pricing supplement. This option will be exercisable in whole but not in part on an option election date, which will be any one of the dates specified in the applicable pricing supplement. Information as to the relative value of the specified currency compared to the optional payment currency will be set forth in the applicable pricing supplement. The pricing supplement for each issuance of dual currency notes will specify, among other things: - the specified currency; - the optional payment currency; and - the designated exchange rate. The designated exchange rate will be a fixed exchange rate used for converting amounts denominated in the specified currency into amounts denominated in the optional payment currency. The pricing supplement will also specify the option election dates and interest payment dates for the related issuance of dual currency notes. Each option election date will be a particular number of days before an interest payment date or stated maturity, as set forth in the applicable pricing supplement. Each option election date will be the date on which Citigroup Global Markets Holdings may select whether to make all scheduled payments due thereafter in the optional payment currency rather than in the specified currency. If Citigroup Global Markets Holdings makes such an election, the amount payable in the optional payment currency will be determined using the designated exchange rate specified in the applicable pricing supplement. If such election is made, notice of the election will be mailed in accordance with the terms of the applicable tranche of dual currency notes within two business days of the option election date. The notice will state (1) the first date, whether an interest payment date and/or stated maturity, on which scheduled payments in the optional payment currency will be made and (2) the designated exchange rate. Any such notice by Citigroup Global Markets Holdings, once given, may not be withdrawn. The equivalent value in the specified currency of payments made after such an election may be less, at the then current exchange rate, than if Citigroup Global Markets Holdings had made the payment in the specified currency. For United States federal income tax purposes, holders of dual currency notes may need to comply with rules which differ from the general rules applicable to holders of other types of notes offered by this prospectus supplement. The United States federal income tax consequences of the purchase, ownership and disposition of dual currency notes will be set forth in the applicable pricing supplement. RENEWABLE NOTES Citigroup Global Markets Holdings may from time to time offer renewable notes, which will mature on an initial maturity date. Such initial maturity date will be an interest payment date specified in the applicable pricing supplement occurring in, or prior to, the twelfth month following the original issue date of the notes, unless the term of all or any portion of any of the notes is renewed in accordance with the procedures described below. The term of a renewable note may be extended to the interest payment date occurring in the twelfth month, or, if a special election interval is specified in the applicable pricing supplement, the last month in a period equal to twice the special election interval elected by the holder after the renewal date. Such an extension may be made on the initial renewal date. That date will be the interest payment date occurring in the sixth month, unless a special election interval is specified in the applicable pricing supplement, prior to the initial maturity date of a renewable note and on the interest payment date occurring in each sixth month, or in the last month of each special election interval, after the initial renewal date which, together with the initial renewal date, constitutes a renewal date. S-28 If a holder does not elect to extend the term of any portion of the principal amount of a renewable note during the specified period prior to any renewal date, that portion will become due and payable on the new maturity date. Such new maturity date will be the interest payment date occurring in the sixth month, or the last month in the special election interval, after the renewal date. A holder of a renewable note may elect to renew the term of such renewable note, or if so specified in the applicable pricing supplement, any portion of the renewable note, by delivering a notice to that effect to the trustee or any duly appointed paying agent at the corporate trust office of the trustee or agency of the trustee in New York City. This notice will be delivered not less than 15 nor more than 30 days prior to the renewal date, unless another period is specified in the applicable pricing supplement as the special election period. This election will be irrevocable and will be binding upon each subsequent holder of the renewable note. An election to renew the term of a renewable note may be exercised for less than the entire principal amount of the renewable note only if so specified in the applicable pricing supplement and only in the principal amount, or any integral multiple in excess of that amount, as is specified in the applicable pricing supplement. Despite the foregoing, the term of the renewable notes may not be extended beyond the stated maturity specified for renewable notes in the applicable pricing supplement. If the holder does not elect to renew the term, a renewable note must be presented to the trustee, or any duly appointed paying agent. If the renewable note is a certificate issued in definitive form, it must be presented to the trustee as soon as practicable following receipt of the renewable note. The trustee, or any duly appointed paying agent, will issue in exchange for the note, in the name of the holder, a note. The note will be in a principal amount equal to the principal amount of the exchanged renewable note for which no election to renew such term was exercised, with terms identical to those specified on the renewable note. However, the note will have a fixed, nonrenewable stated maturity on the new maturity date. If an election to renew is made for less than the full principal amount of a holder's renewable note, the trustee, or any duly appointed paying agent, will issue a replacement renewable note in exchange for the note in the name of the holder. The replacement renewable note will be in a principal amount equal to the principal amount elected to be renewed of the exchanged renewable note, with terms otherwise identical to the exchanged renewable note. EXTENSION OF MATURITY The pricing supplement relating to each note will indicate whether Citigroup Global Markets Holdings has the option to extend the stated maturity of that note for an extension period. Such an extension period is one or more periods of one to five whole years, up to but not beyond the final maturity date set forth in the pricing supplement. Citigroup Global Markets Holdings may exercise such option for a note by notifying the trustee for that note at least 45 but not more than 60 days prior to the original stated maturity of the note. Not later than 40 days prior to the original stated maturity of the note, the trustee for the note will mail to the holder of the note an extension notice, first class, postage prepaid. The extension notice will set forth: - the election of Citigroup Global Markets Holdings to extend the stated maturity of the note; - the new stated maturity; - in the case of a fixed rate note, the interest rate applicable to the extension period; - in the case of a floating rate note, the spread, spread multiplier or method of calculation applicable to the extension period; and - any provisions for redemption during the extension period, including the date or dates on which, or the period or periods during which, and the price or prices at which, a redemption may occur during the extension period. Upon the mailing by such trustee of an extension notice to the holder of a note, the stated maturity of the note will be extended automatically, and, except as modified by the extension notice and as described in the next paragraph, the note will have the same terms as prior to the mailing of the extension notice. Despite S-29 the foregoing, not later than 20 days prior to the original stated maturity of the note, Citigroup Global Markets Holdings may, at its option, revoke the interest rate, or the spread or spread multiplier, as the case may be, provided for in the extension notice for the note and establish for the extension period a higher interest rate, in the case of a fixed rate note, or a higher spread or spread multiplier, in the case of a floating rate note. Citigroup Global Markets Holdings may so act by causing the trustee for the note to mail notice of the higher interest rate or higher spread or spread multiplier, as the case may be, first class, postage prepaid, to the holder of the note. The notice will be irrevocable. All notes for which the stated maturity is extended will bear the higher interest rate, in the case of fixed rate notes, or higher spread or spread multiplier, in the case of floating rate notes, for the extension period, whether or not tendered for repayment. If Citigroup Global Markets Holdings extends the stated maturity of a note, the holder of the note will have the option to elect repayment of the note by Citigroup Global Markets Holdings on the original stated maturity at a price equal to the principal amount of the note, plus interest accrued to that date. In order for a note to be repaid on the old stated maturity once Citigroup Global Markets Holdings has extended its stated maturity, the holder of the note must follow the procedures set forth below under "Optional Redemption, Repayment and Repurchase" for optional repayment. The period for delivery of the note or notification to the trustee for the note will be at least 25 but not more than 35 days prior to the old stated maturity. A holder who has tendered a note for repayment after an extension notice may give written notice to the trustee for the note to revoke any tender for repayment until the close of business on the tenth day before the original stated maturity. COMBINATION OF PROVISIONS If so specified in the applicable pricing supplement, any note may be required to comply with all of the provisions, or any combination of the provisions, described above under "Subsequent Interest Periods," "Extension of Maturity" and "Renewable Notes." BOOK-ENTRY SYSTEM Upon issuance, and unless the rules of DTC state otherwise, all book-entry notes having the same original issue date and otherwise identical terms will be represented by a single global security. Each global security representing book-entry notes will be deposited with, or on behalf of, DTC and registered in the name of a nominee of DTC. Book-entry notes will not be exchangeable for certificated notes and, except under the circumstances described in the prospectus under "Book-Entry Procedures and Settlement," will not otherwise be issuable as certificated notes. If an issue of notes is denominated in a currency other than the U.S. dollar, Citigroup Global Markets Holdings will make payments of principal and any interest in the foreign currency in which the notes are denominated or in U.S. dollars. DTC has elected to have all payments of principal and interest paid in U.S. dollars unless notified by any of its participants through which an interest in the notes is held that it elects, in accordance with, and to the extent permitted by, the applicable pricing supplement and the relevant note, to receive payment of principal or interest in the foreign currency. On or prior to the third business day after the record date for payment of interest and twelve days prior to the date for payment of principal, the participant will notify DTC of (1) its election to receive all, or the specified portion, of payment in the foreign currency and (2) its instructions for wire transfer of payment to a foreign currency account. A further description of DTC's procedures regarding global securities representing book-entry notes is set forth in the prospectus under "Book-Entry Procedures and Settlement." DTC has confirmed to Citigroup Global Markets Holdings, the agents and the trustee that it intends to follow such procedures. OPTIONAL REDEMPTION, REPAYMENT AND REPURCHASE The pricing supplement relating to each note will indicate whether the note can be redeemed at the option of Citigroup Global Markets Holdings, in whole or in part prior to its stated maturity. The S-30 applicable pricing supplement will also indicate (1) the optional redemption date or dates on which the note may be redeemed and (2) the redemption price at which, together with accrued interest to such optional redemption date, the note may be redeemed on each optional redemption date. Unless otherwise specified in the applicable pricing supplement, at least 30 days prior to the date of redemption, the trustee will mail notice of redemption, first class, postage prepaid, to the holder of the note. Unless otherwise specified in the applicable pricing supplement, Citigroup Global Markets Holdings may exercise the option relating to a redemption of a note in part only by notifying the trustee for such note at least 45 days prior to any optional redemption date. In the event of redemption of a note in part only, a new note or notes for the unredeemed portion of the note or notes will be issued to the holder of that note or notes upon the cancellation of the note or notes. The notes, other than amortizing notes, may not be redeemed. The redemption of any subordinated note that is included in Citigroup Inc.'s capital may be subject to consultation with the Federal Reserve, which may not acquiesce in the redemption of such note unless it is satisfied that the capital position of Citigroup Inc. will be adequate after the proposed redemption. The pricing supplement relating to each note will also indicate whether the holder of that note will have the option to elect repayment of the note by Citigroup Global Markets Holdings prior to its stated maturity. If so, the pricing supplement will specify (1) the optional repayment date or dates on which the note may be repaid and (2) the optional repayment price. The optional repayment price is the price at which, together with accrued interest to such optional repayment date, the note may be repaid on each optional repayment date. In order for a note to be repaid, the trustee for the note must receive, at least 30 but not more than 45 days prior to an optional repayment date: (1) the note with the form entitled "Option to Elect Repayment" on the reverse of the note duly completed; or (2) a telegram, telex, facsimile transmission or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc. or a commercial bank or trust company in the United States setting forth: - the name of the holder of the note; - the principal amount of the note to be repaid; - the certificate number or a description of the tenor and terms of the note; - a statement that the option to elect repayment is being exercised; and - a guarantee that the note to be repaid with the form entitled "Option to Elect Repayment" on the reverse of the note duly completed will be received by the trustee not later than five business days after the date of the telegram, telex, facsimile transmission or letter. If the guarantee procedure described in clause (2) above is followed, then the note and form duly completed must be received by the trustee by the fifth business day. Any tender of a note by the holder for repayment, except pursuant to a reset notice or an extension notice, will be irrevocable. The repayment option may be exercised by the holder of a note for less than the entire principal amount of the note, provided, that the principal amount of the note remaining outstanding after repayment is an authorized denomination. Upon partial repayment, the note will be canceled and a new note or notes for the remaining principal amount will be issued in the name of the holder of the repaid note. If a note is represented by a global security, DTC's nominee will be the holder of the note and, therefore, will be the only entity that can exercise a right to repayment. In order to ensure that DTC's nominee will timely exercise a right to repayment relating to a particular note, the beneficial owner of that note must instruct the broker or other direct or indirect participant through which it holds an interest in the note to notify DTC of its desire to exercise a right to repayment. Different firms have different cut-off times for accepting instructions from their customers. Accordingly, each beneficial owner should consult the broker or other direct or indirect participant through which it holds an interest in a note in order to ascertain the cut-off time by which such an instruction must be given in order for timely notice to be delivered to DTC. S-31 Except in the case of an optional redemption by Citigroup Global Markets Holdings at a stated redemption price provided for in the applicable pricing supplement, if Citigroup Global Markets Holdings redeems or repays a note that is an original issue discount note other than an indexed note prior to its stated maturity, then Citigroup Global Markets Holdings will pay the amortized face amount of the note as of the date of redemption or repayment regardless of anything else stated in this prospectus supplement. The amortized face amount of a note on any date means the amount equal to: - the issue price set forth in the applicable pricing supplement plus - that portion of the difference between the issue price and the stated principal amount of the note that has accrued by that date at (1) the bond yield to maturity set forth on the face of the applicable pricing supplement, or (2) if so specified in the applicable pricing supplement, the bond yield to call set forth on the face of the note. These computations will be made in accordance with generally accepted United States bond yield computation principles. However, the amortized face amount of a note will never exceed its stated principal amount. The bond yield to call listed in a pricing supplement will be computed on the basis of: - the first occurring optional redemption date with respect to the note; and - the amount payable on the optional redemption date. In the event that any note is not redeemed on the first occurring optional redemption date, the bond yield to call that applies to the note will be recomputed on the optional redemption date on the basis of (1) the next occurring optional redemption date and (2) the amount payable on the optional redemption date. The bond yield to call will continue to be so recomputed on each succeeding optional redemption date until the note is so redeemed. Citigroup Global Markets Holdings may at any time purchase notes at any price in the open market or otherwise. Notes so purchased by Citigroup Global Markets Holdings may, at the discretion of Citigroup Global Markets Holdings, be held, resold or surrendered to the trustee for those notes for cancellation. OTHER PROVISIONS The terms in the applicable pricing supplement may modify any provisions relating to: - the determination of an interest rate basis; - the specification of an interest rate basis; - calculation of the interest rate applicable to, or the principal payable at maturity on, any note; - interest payment dates; or - any other related matters. DEFEASANCE The defeasance provisions described in the prospectus will not be applicable to the notes except as set forth in the applicable pricing supplement. S-32 CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS INTRODUCTION The following is a summary of the material United States federal income tax considerations that may be relevant to a holder of a note. The summary is based on: - laws; - regulations; - rulings; and - decisions now in effect, all of which may change, possibly with retroactive effect. This summary deals only with holders that will hold notes as capital assets. This summary does not address all of the United States federal income tax considerations that may be relevant to a beneficial owner of notes. For example, this summary does not address tax considerations applicable to investors to whom special tax rules may apply, including, without limitation: - banks or other financial institutions; - tax-exempt entities; - insurance companies; - regulated investment companies; - common trust funds; - entities that are treated for United States federal income tax purposes as partnerships or other pass-through entities; - controlled foreign corporations; - dealers in securities or currencies; - traders in securities that elect mark to market; - persons that will hold notes as a part of an integrated investment, including a straddle, a synthetic security or hedge or a conversion transaction, comprised of a note and one or more other positions; or - United States holders (as defined below) that have a functional currency other than the U.S. dollar. Any special United States federal income tax considerations relevant to a particular issue of notes, including any indexed notes, dual currency notes or notes providing for contingent payments, will be provided in the applicable pricing supplement. Purchasers of such notes should carefully examine the applicable pricing supplement and should consult with their tax advisors with respect to those notes. Prospective investors should consult their tax advisors in determining the tax consequences to them of purchasing, holding and disposing of the notes, including the application to their particular situation of the United States federal income tax considerations discussed below, as well as the application of state, local, foreign or other tax laws. As used in this prospectus supplement, the term United States holder means: - a citizen or resident of the United States; - a corporation or other entity treated as a corporation created or organized in or under the laws of the United States or any political subdivision thereof; S-33 - an estate, if United States federal income taxation is applicable to the income of such estate regardless of its source; or - a trust, if a United States court is able to exercise primary supervision over the trust's administration and one or more United States persons have the authority to control all of the trust's substantial decisions. As used in this summary, the term "non-United States holder" means a holder who is not a United States holder and the term "United States" means the United States of America, including the fifty states and the District of Columbia, but excluding its territories and possessions. UNITED STATES HOLDERS Payments of Interest Payments of qualified stated interest, as defined below under "Original Issue Discount," on a note will be taxable to a United States holder as ordinary interest income at the time that such payments are accrued or are received, in accordance with the United States holder's method of tax accounting. If such payments of interest are made relating to a note that is denominated in a foreign currency, the amount of interest income realized by a United States holder that uses the cash method of tax accounting will be the U.S. dollar value of the specified currency payment based on the spot rate of exchange on the date of receipt regardless of whether the payment in fact is converted into U.S. dollars. No exchange gain or loss will be recognized with respect to the receipt of such payment (other than exchange gain or loss realized on the disposition of the foreign currency so received). A United States holder that uses the accrual method of tax accounting will accrue interest income on the foreign currency note in the relevant foreign currency and translate the amount accrued into U.S. dollars based on: - the average exchange rate in effect during the interest accrual period, or portion thereof within the holder's taxable year; or - at the holder's election, at the spot rate of exchange on (1) the last day of the accrual period, or the last day of the taxable year within the accrual period if the accrual period spans more than one taxable year, or (2) the date of receipt, if that date is within five business days of the last day of the accrual period. Such an election must be applied consistently by the United States holder to all debt instruments from year to year and can be changed only with the consent of the IRS. A United States holder that uses the accrual method of tax accounting will recognize foreign currency gain or loss, which will be treated as ordinary income or loss, on the receipt of an interest payment made relating to a foreign currency note if the spot rate of exchange on the date the payment is received differs from the rate applicable to a previous accrual of that interest income. Such foreign currency gain or loss will be treated as ordinary income or loss, but generally will not be treated as an adjustment to interest income received on the notes. Purchase, Sale and Retirement of Notes A United States holder's tax basis in a note generally will equal the cost of that note to such holder (1) increased by any amounts includible in income by the holder as original issue discount ("OID") and market discount (each as described below) and (2) reduced by any amortized premium and any payments other than payments of qualified stated interest (each as described below) made on the note. In the case of a foreign currency note, the cost of the note to a United States holder will generally be the U.S. dollar value of the foreign currency purchase price on the date of purchase. In the case of a foreign currency note that is traded on an established securities market, a United States holder generally should determine the U.S. dollar value of the cost of the note by translating the amount paid in foreign currency into its U.S. dollar value at the spot rate of exchange (1) on the settlement date of the purchase in the case of a United States holder using the cash method of tax accounting and (2) on the trade date, in the case of a United States holder using the accrual method of tax accounting, unless the holder elects S-34 to use the spot rate applicable to cash method United States holders. The amount of any subsequent adjustments to a United States holder's tax basis in a foreign currency note in respect of OID, market discount and premium will be determined in the manner described under "Original Issue Discount," "Market Discount" and "Notes Purchased at a Premium" below. The conversion of U.S. dollars to another specified currency and the immediate use of the specified currency to purchase a foreign currency note generally will not result in taxable gain or loss for a United States holder. Upon the sale, exchange, retirement or other taxable disposition (collectively, a "disposition") of a note, a United States holder generally will recognize gain or loss equal to the difference between (1) the amount realized on the disposition, less any accrued qualified stated interest, which will be taxable as ordinary income in the manner described above under "Payments of Interest," and (2) the United States holder's adjusted tax basis in the note. If a United States holder receives a specified currency other than the U.S. dollar in respect of the disposition of a note, the amount realized will be the U.S. dollar value of the specified currency received calculated at the spot rate of exchange on the date of disposition of the note. In the case of a foreign currency note that is traded on an established securities market, a United States holder that receives a specified currency other than the U.S. dollar in respect of that disposition generally should determine the amount realized (as determined on the trade date) by translating that specified currency into its U.S. dollar value at the spot rate of exchange (1) on the settlement date of the disposition in the case of a United States holder using the cash method of tax accounting and (2) on the trade date, in the case of a United States holder using the accrual method of tax accounting, unless the holder elects to use the spot rate applicable to cash method United States holders. The election available to accrual basis United States holders in respect of the purchase and sale of foreign currency notes traded on an established securities market, discussed above, must be applied consistently by the United States holder to all debt instruments from year to year and can be changed only with the consent of the IRS. Except as discussed below in connection with foreign currency gain or loss, market discount and short-term notes, gain or loss recognized by a United States holder on the sale, exchange, retirement or other taxable disposition of a note will generally be long term capital gain or loss if the United States holder's holding period for the note exceeded one year at the time of such disposition. Gain or loss recognized by a United States holder on the sale, exchange, retirement or other taxable disposition of a foreign currency note generally will be treated as ordinary income or loss to the extent that the gain or loss is attributable to changes in exchange rates during the period in which the holder held the note. Original Issue Discount In General. Notes with a term greater than one year may be issued with OID for United States federal income tax purposes. Such notes are called OID notes in this prospectus supplement. United States holders generally must accrue OID in gross income over the term of the OID notes on a constant yield basis, regardless of their regular method of tax accounting. As a result, United States holders generally will recognize taxable income in respect of an OID note in advance of the receipt of cash attributable to such income. OID generally will arise if the stated redemption price at maturity of the note exceeds its issue price by more than a de minimis amount equal to 0.25% of the note's stated redemption price at maturity multiplied by the number of complete years to maturity. OID may also arise if a note has particular interest payment characteristics, such as interest holidays, interest payable in additional securities or stepped interest. For this purpose, the issue price of a note is the first price at which a substantial amount of notes is sold for cash, other than to bond houses, brokers or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers. The stated redemption price at maturity of a note is the sum of all payments due under the note, other than payments of qualified stated interest. The term qualified stated interest generally means stated interest that is unconditionally payable in cash or S-35 property, other than debt instruments of the issuer, at least annually during the entire term of the OID note at a single fixed rate of interest or, under particular conditions, based on one or more interest indices. For each taxable year of a United States holder, the amount of OID that must be included in gross income in respect of an OID note will be the sum of the daily portions of OID for each day during that taxable year or any portion of the taxable year in which such a United States holder held the OID note. Such daily portions are determined by allocating to each day in an accrual period a pro rata portion of the OID allocable to that accrual period. Accrual periods may be of any length and may vary in length over the term of an OID note. However, accrual periods may not be longer than one year and each scheduled payment of principal or interest must occur on the first day or the final day of a period. The amount of OID allocable to any accrual period generally will equal (1) the product of the OID note's adjusted issue price at the beginning of the accrual period multiplied by its yield to maturity (as adjusted to take into account the length of the accrual period), less (2) the amount, if any, of qualified stated interest allocable to that accrual period. The adjusted issue price of an OID note at the beginning of any accrual period will equal the issue price of the OID note, as defined above, (1) increased by previously accrued OID from prior accrual periods, and (2) reduced by any payment made on the note, other than payments of qualified stated interest, on or before the first day of the accrual period. Foreign Currency Notes. In the case of an OID note that is also a foreign currency note, a United States holder should determine the U.S. dollar amount includible in income as OID for each accrual period by - calculating the amount of OID allocable to each accrual period in the specified currency using the constant-yield method described above and - translating the amount of the specified currency so derived at the average exchange rate in effect during that accrual period, or portion of the accrual period within a United States holder's taxable year, or, at the United States holder's election (as described above under "Payments of Interest"), at the spot rate of exchange on (1) the last day of the accrual period, or the last day of the taxable year within the accrual period if the accrual period spans more than one taxable year, or (2) on the date of receipt, if that date is within five business days of the last day of the accrual period. All payments on an OID note, other than payments of qualified stated interest, will generally be viewed first as payments of previously accrued OID, to the extent thereof, with payments attributed first to the earliest accrued OID, and then as payments of principal. Upon the receipt of an amount attributable to OID, whether in connection with a payment of an amount that is not qualified stated interest or the disposition of the OID note, a United States holder will recognize ordinary income or loss measured by the difference between (1) the amount received and (2) the amount accrued. The amount received will be translated into U.S. dollars at the spot rate of exchange on the date of receipt or on the date of disposition of the OID note. The amount accrued will be determined by using the rate of exchange applicable to such previous accrual. Acquisition Premium. A United States holder that purchases an OID note for an amount less than or equal to the remaining redemption amount, but in excess of the OID note's adjusted issue price, generally is permitted to reduce the daily portions of OID by a fraction. The numerator of this fraction is the excess of the United States holder's adjusted tax basis in the OID note immediately after its purchase over the OID note's adjusted issue price. The denominator of the fraction is the excess of the remaining redemption amount over the OID note's adjusted issue price. For purposes of this prospectus supplement, - "acquisition premium" means the excess of the purchase price paid by a United States holder for an OID note over the OID note's adjusted issue price; and - "remaining redemption amount" means the sum of all amounts payable on an OID note after the purchase date other than payments of qualified stated interest. The notes may have special redemption, repayment or interest rate reset features, as indicated in the applicable pricing supplement. Notes containing such features, in particular OID notes, may be subject to S-36 special rules that differ from the general rules discussed above. Accordingly, purchasers of notes with such features should carefully examine the applicable pricing supplement and should consult their tax advisors relating to such notes. Market Discount If a United States holder purchases a note, other than a short-term note, for an amount that is less than the note's stated redemption price at maturity or, in the case of an OID note, for an amount that is less than the note's revised issue price, i.e., the note's issue price increased by the amount of accrued OID, the note will be considered to have market discount. The market discount rules are subject to a de minimis rule similar to the rule relating to de minimis OID, described above (in the second paragraph under "Original Issue Discount"). Any gain recognized by the United States holder on the sale, exchange, retirement or other taxable disposition of notes having market discount generally will be treated as ordinary income to the extent of the market discount that accrued on the note while held by such United States holder. Alternatively, the United States holder may elect to include market discount in income currently over the life of the note. Such an election will apply to market discount notes acquired by the United States holder on or after the first day of the first taxable year to which such election applies and may be revoked only with the consent of the IRS. Market discount will accrue on a straight-line basis unless the United States holder elects to accrue the market discount on a constant-yield method. Unless the United States holder elects to include market discount in income on a current basis, as described above, the United States holder could be required to defer the deduction of a portion of the interest paid on any indebtedness incurred or maintained to purchase or carry the note. Market discount on a foreign currency note will be accrued by a United States holder in the foreign currency. The amount includible in income by a United States holder in respect of such accrued market discount will be the U.S. dollar value of the amount accrued. This is generally calculated at the spot rate of exchange on the date that the note is disposed of by the United States holder. Any accrued market discount on a foreign currency note that is currently includible in income will be translated into U.S. dollars at the average exchange rate for the accrual period or portion of such accrual period within the United States holder's taxable year. Short-Term Notes The rules set forth above also will generally apply to notes having maturities of not more than one year from the date of issuance. Those notes are called short-term notes in this prospectus supplement. Certain modifications apply to these general rules. First, none of the interest on a short-term note is treated as qualified stated interest. Instead, interest on a short-term note is treated as part of the short-term note's stated redemption price at maturity, thereby giving rise to OID. Thus, all short-term notes will be OID notes. OID will be treated as accruing on a short-term note ratably, or at the election of a United States holder, under a constant yield method. Second, a United States holder of a short-term note that uses the cash method of tax accounting will generally not be required to include OID in respect of the short-term note in income on a current basis. Such a United States holder may not be allowed to deduct all of the interest paid or accrued on any indebtedness incurred or maintained to purchase or carry such note until the maturity of the note or its earlier disposition in a taxable transaction. In addition, such a United States holder will be required to treat any gain realized on a disposition of the note as ordinary income to the extent of the holder's accrued OID on the note, and as short-term capital gain to the extent the gain exceeds accrued OID. A United States holder of a short-term note using the cash method of tax accounting may, however, elect to accrue OID into income on a current basis. In such case, the limitation on the deductibility of interest described above will not apply. A United States holder using the accrual method of tax accounting generally will be required to include OID on a short-term note in income on a current basis. S-37 Third, any United States holder of a short-term note, whether using the cash or accrual method of tax accounting, can elect to accrue the acquisition discount, if any, on the note on a current basis. If such an election is made, the OID rules will not apply to the note. Acquisition discount is the excess of the note's stated redemption price at maturity over the holder's purchase price for the note. Acquisition discount will be treated as accruing ratably or, at the election of the United States holder, under a constant-yield method based on daily compounding. As described above, the notes may have special redemption features. These features may affect the determination of whether a note has a maturity of not more than one year and thus is a short-term note. Purchasers of notes with such features should carefully examine the applicable pricing supplement and should consult their tax advisors in relation to such features. Notes Purchased at a Premium A United States holder that purchases a note for an amount in excess of the remaining redemption amount will be considered to have purchased the note at a premium and the OID rules will not apply to such holder. Such holder may elect to amortize such premium, as an offset to interest income, using a constant-yield method, over the remaining term of the note. Such election, once made, generally applies to all debt instruments held or subsequently acquired by the United States holder on or after the beginning of the first taxable year to which the election applies. Such election may be revoked only with the consent of the IRS. A United States holder that elects to amortize such premium must reduce its tax basis in a note by the amount of the premium amortized during its holding period. For a United States holder that does not elect to amortize bond premium, the amount of such premium will be included in the United States holder's tax basis when the note matures or is disposed of by the United States holder. Therefore, a United States holder that does not elect to amortize premium and holds the note to maturity will generally be required to treat the premium as capital loss when the note matures. Amortizable bond premium in respect of a foreign currency note will be computed in the specified currency and will reduce interest income in the foreign currency. At the time amortized bond premium offsets interest income, exchange gain or loss, which will be taxable as ordinary income or loss, will be realized on the amortized bond premium on such note based on the difference between (1) the spot rate of exchange on the date or dates such premium is recovered through interest payments on the note and (2) the spot rate of exchange on the date on which the United States holder acquired the note. See "Original Issue Discount -- Acquisition Premium" above for a discussion of the treatment of a note purchased for an amount less than or equal to the remaining redemption amount but in excess of the note's adjusted issue price. Information Reporting and Backup Withholding Information returns may be required to be filed with the IRS relating to payments made to particular United States holders of notes. In addition, United States holders may be subject to a backup withholding tax on such payments if they do not provide their taxpayer identification numbers to the trustee in the manner required, fail to certify that they are not subject to backup withholding tax, or otherwise fail to comply with applicable backup withholding tax rules. United States holders may also be subject to information reporting and backup withholding tax with respect to the proceeds from a sale, exchange, retirement or other taxable disposition of the notes. Any amounts withheld under the backup withholding rules will be allowed as a credit against the United States holder's United States federal income tax liability provided the required information is timely furnished to the IRS. NON-UNITED STATES HOLDERS Under current United States federal income tax law: - withholding of United States federal income tax will not apply to a payment on a note to a non-United States holder, provided that, S-38 (1) the holder does not actually or constructively own 10% or more of the total combined voting power of all classes of stock of Citigroup Global Markets Holdings entitled to vote and is not a controlled foreign corporation related to Citigroup Global Markets Holdings through stock ownership; (2) the beneficial owner provides a statement signed under penalties of perjury that includes its name and address and certifies that it is a non-United States holder in compliance with applicable requirements; and (3) neither Citigroup Global Markets Holdings nor its paying agent has actual knowledge or reason to know that the beneficial owner of the note is a United States holder. - withholding of United States federal income tax will generally not apply to any gain realized on the disposition of a note. Despite the above, if a non-United States holder is engaged in a trade or business in the United States (or, if certain tax treaties apply, if the non-United States holder maintains a permanent establishment within the United States) and the interest on the notes is effectively connected with the conduct of that trade or business (or, if certain tax treaties apply, attributable to that permanent establishment), such non-United States holder will be subject to United States federal income tax on the interest on a net income basis in the same manner as if such non-United States holder were a United States holder. In addition, a non-United States holder that is a foreign corporation engaged in a trade or business in the United States may be subject to a 30% (or, if certain tax treaties apply, such lower rates as provided) branch profits tax. Any gain realized on the disposition of a note generally will not be subject to United States federal income tax unless: - that gain is effectively connected with the non-United States holder's conduct of a trade or business in the United States (or, if certain tax treaties apply, is attributable to a permanent establishment maintained by the non-United States holder within the United States); or - the non-United States holder is an individual who is present in the United States for 183 days or more in the taxable year of the disposition and certain other conditions are met. In general, backup withholding and information reporting will not apply to a payment of interest on a note to a non-United States holder, or to proceeds from the disposition of a note by a non-United States holder, in each case, if the holder certifies under penalties of perjury that it is a non-United States holder and neither Citigroup Global Markets Holdings nor its paying agent has actual knowledge or reason to know to the contrary. Any amounts withheld under the backup withholding rules will be refunded or credited against the non-United States holder's United States federal income tax liability provided the required information is timely furnished to the IRS. In certain circumstances, the amounts of payments made on a note, the name and address of the beneficial owner and the amount, if any, of tax withheld may be reported to the IRS. S-39 PLAN OF DISTRIBUTION The notes are being offered on a continuous basis by Citigroup Global Markets Holdings through Citigroup Global Markets Inc., or other broker-dealer subsidiaries or affiliates of Citigroup Global Markets Holdings, as agents. The agents have agreed to use their reasonable efforts to solicit orders to purchase notes. The agents and Citigroup Global Markets Holdings will sign an agency agreement. A form of agency agreement has been filed as an exhibit to the registration statement of which this prospectus supplement forms a part. Citigroup Global Markets Holdings will have the sole right to accept orders to purchase notes and may reject proposed purchases in whole or in part. An agent will have the right to reject any proposed purchase in whole or in part. Citigroup Global Markets Holdings reserves the right to withdraw, cancel or modify the offer made by this prospectus supplement, the accompanying prospectus or any pricing supplement without notice. The following table summarizes the aggregate commissions or discounts payable in connection with offerings of the notes. Commissions and discounts will vary depending upon the stated maturity of the notes.
PUBLIC AGENTS' PROCEEDS, BEFORE OFFERING DISCOUNTS EXPENSES, TO PRICE AND COMMISSIONS CITIGROUP GLOBAL MARKETS HOLDINGS -------- --------------- --------------------------------- Principal Amount...... $10,945,831,296 $2,189,166-$547,291,565 $10,943,642,130-$10,398,539,731 Total................. 100% 0.02%-5.00% 99.98%-95.00%
Citigroup Global Markets Holdings may also sell notes at a discount to the agents for their own account or for resale to one or more purchasers at varying prices related to prevailing market prices or at a fixed public offering price. After any initial public offering of notes to be resold to purchasers at a fixed public offering price, the public offering price and any concession or discount may be changed. In addition, the agents may offer and sell notes purchased by it as principal to other dealers. These notes may be sold at a discount which, unless otherwise specified in the applicable pricing supplement, will not exceed the discount to be received by the agents from Citigroup Global Markets Holdings. Unless otherwise specified in the applicable pricing supplement, any note purchased by an agent as principal will be purchased at 100% of the principal amount or face amount less a percentage equal to the commission applicable to an agency sale of a note of identical maturity. Citigroup Global Markets Holdings reserves the right to sell notes directly to investors on its own behalf and to enter into agreements similar to the agency agreement with other parties. No commission will be payable nor will a discount be allowed on any sales made directly by Citigroup Global Markets Holdings. Unless notes are issued upon the reopening of a prior series, no note will have an established trading market when issued. Unless otherwise specified in the applicable pricing supplement, the notes will not be listed on any securities exchange. An agent may make a market in the notes, but no agent is obligated to do so. An agent may discontinue any market-making at any time without notice, at its sole discretion. There can be no assurance of the existence or liquidity of a secondary market for any notes, or that the maximum amount of notes will be sold. In addition to the notes being offered through the agents as described herein, securities in bearer form that may have terms identical or similar to the terms of the notes may be concurrently offered by Citigroup Global Markets Holdings on a continuous basis outside the United States by one or more broker-dealer subsidiaries or affiliates of Citigroup Global Markets Holdings. Such subsidiaries or affiliates may also purchase the securities in bearer form as principal for their own account or for resale. Any securities so offered and sold will reduce correspondingly the maximum aggregate principal amount of notes that may be offered by this prospectus supplement and the accompanying prospectus. Citigroup Global Markets Holdings estimates that its total expenses for the offering, excluding underwriting commissions or discounts, will be approximately $5,364,000. An agent, whether acting as agent or principal, may be deemed to be an underwriter within the meaning of the Securities Act of 1933. Citigroup Global Markets Holdings has agreed to indemnify the S-40 agents against liabilities relating to material misstatements and omissions, or to contribute to payments that the agents may be required to make relating to these liabilities. Citigroup Global Markets Holdings will reimburse the agents for customary legal and other expenses incurred by them in connection with the offer and sale of the notes. Unless otherwise specified in the applicable pricing supplement, payment of the purchase price of the notes will be required to be made in immediately available funds in New York City on the date of settlement. Concurrently with the offering of notes through the agent as described in this prospectus supplement, Citigroup Global Markets Holdings may issue other securities under the indentures referred to in the prospectus. The broker-dealer subsidiaries or affiliates of Citigroup Global Markets Holdings, including Citigroup Global Markets Inc., are members of the NASD and may participate in offerings of the notes. Accordingly, offerings of the notes in which Citigroup Global Markets Holdings' broker-dealer subsidiaries or affiliates participate will conform with the requirements set forth in Rule 2720 of the Conduct Rules of the NASD. This prospectus supplement, the accompanying prospectus and the related pricing supplement may be used by an agent or other subsidiaries or affiliates of Citigroup Global Markets Holdings in connection with offers and sales of the notes offered by this prospectus supplement in market-making transactions at negotiated prices related to prevailing market prices at the time of sale. An agent or these other subsidiaries or affiliates may act as principal or agent in such transactions. ERISA MATTERS Certain provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") and the Internal Revenue Code of 1986, as amended (the "Code"), prohibit employee benefit plans (as defined in Section 3(3) of ERISA) that are subject to Title I of ERISA, plans described in Section 4975(e)(1) of the Code (including, without limitation, retirement accounts and Keogh Plans), and entities whose underlying assets include plan assets by reason of a plan's investment in such entities (including, without limitation, as applicable, insurance company general accounts), from engaging in certain transactions involving "plan assets" with parties that are "parties in interest" under ERISA or "disqualified persons" under the Code with respect to the plan or entity. Governmental and other plans that are not subject to ERISA or to the Code may be subject to similar restrictions under state, federal or local law. The notes may not be purchased, held or disposed of by any plan or any other person investing "plan assets" of any plan that is subject to the prohibited transaction rules of ERISA or Section 4975 of the Code or other similar law, unless one of the following Prohibited Transaction Class Exemptions ("PTCE") issued by the Department of Labor or a similar exemption or exception applies to such purchase, holding and disposition: - PTCE 96-23 for transactions determined by in-house asset managers, - PTCE 95-60 for transactions involving insurance company general accounts, - PTCE 91-38 for transactions involving bank collective investment funds, - PTCE 90-1 for transactions involving insurance company separate accounts, or - PTCE 84-14 for transactions determined by independent qualified professional asset managers. Any purchaser of the notes or any interest therein will be deemed to have represented and warranted to Citigroup Global Markets Holdings on each day including the date of its purchase of the notes through and including the date of disposition of such notes that either: S-41 (a) it is not a plan subject to Title I of ERISA or Section 4975 of the Code and is not purchasing such notes or interest therein on behalf of, or with "plan assets" of, any such plan; (b) its purchase, holding and disposition of such notes are not and will not be prohibited because they are exempted by one or more of the following prohibited transaction exemptions: PTCE 96-23, 95-60, 91-38, 90-1 or 84-14; or (c) it is a governmental plan (as defined in section 3 of ERISA) or other plan that is not subject to the provisions of Title I of ERISA or Section 4975 of the Code and its purchase, holding and disposition of such notes are not otherwise prohibited. Due to the complexity of these rules and the penalties imposed upon persons involved in prohibited transactions, it is important that any person considering the purchase of the notes with plan assets consult with its counsel regarding the consequences under ERISA and the Code, or other similar law, of the acquisition and ownership of the notes and the availability of exemptive relief under the class exemptions listed above. LEGAL MATTERS Edward F. Greene, Esq., General Counsel of Citigroup Global Markets Holdings, 388 Greenwich Street, New York, New York 10013, will act as legal counsel to Citigroup Global Markets Holdings. Mr. Greene beneficially owns, or has rights to acquire under employee benefit plans, an aggregate of less than one percent of the common stock of Citigroup Inc. Cleary, Gottlieb, Steen & Hamilton, New York, New York, will act as legal counsel for the agents. Cleary, Gottlieb, Steen & Hamilton has from time to time acted as counsel for Citigroup Global Markets Holdings and its subsidiaries and affiliates and may do so in the future. S-42 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- $10,945,831,296 CITIGROUP GLOBAL MARKETS HOLDINGS INC. MEDIUM-TERM SENIOR NOTES, SERIES D MEDIUM-TERM SUBORDINATED NOTES, SERIES E DUE NINE MONTHS OR MORE FROM THE DATE OF ISSUE ------------------------------ PROSPECTUS SUPPLEMENT , 2004 (INCLUDING PROSPECTUS DATED , 2004) ------------------------------ CITIGROUP - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. CITIGROUP GLOBAL MARKETS HOLDINGS INC. 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 IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. SUBJECT TO COMPLETION, DATED OCTOBER 8, 2004 PROSPECTUS SUPPLEMENT (To prospectus dated , 2004) $10,945,831,296 CITIGROUP GLOBAL MARKETS HOLDINGS INC. MEDIUM-TERM SENIOR NOTES, SERIES D MEDIUM-TERM SUBORDINATED NOTES, SERIES E DUE NINE MONTHS OR MORE FROM THE DATE OF ISSUE GENERAL TERMS OF SALE The following terms will generally apply to the medium-term senior and subordinated notes that we will sell from time to time using this prospectus supplement and the attached prospectus. Citigroup Global Markets Holdings will include information on the specific terms for each note in a pricing supplement to this prospectus supplement that Citigroup Global Markets Holdings will deliver to prospective buyers of any note. The maximum amount that Citigroup Global Markets Holdings expects to receive from the sale of the notes is between $10,943,642,130 and $10,398,539,731 after paying the agents commissions of between $2,189,166 and $547,291,565. MATURITY: 9 months or more from the date of issue. INDEXED NOTES: Payments of interest or principal may be linked to the price of one or more securities, currencies, commodities, goods, measures or events. REDEMPTION: Terms of specific notes may permit or require redemption at our option or repayment at your option. RISKS: Index and currency risks may exist. CURRENCIES: U.S. dollars and other currencies.
INTEREST RATES: Fixed, floating or zero coupon. RANKING: The Series D notes are senior notes which are part of our senior indebtedness and the Series E notes are subordinated notes which are part of our subordinated indebtedness. OTHER TERMS: Notes will be issued in bearer form and will not be offered, sold or delivered to any U.S. person, except as permitted under U.S. Treasury regulations. You should review "Description of the Notes" and the pricing supplement for features that apply to your notes.
------------------------ CONSIDER CAREFULLY THE INFORMATION UNDER "RISK FACTORS" BEGINNING ON PAGE S-3 OF THIS PROSPECTUS SUPPLEMENT. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement or any accompanying prospectus or pricing supplement is truthful or complete. Any representation to the contrary is a criminal offense. These securities are not deposits or savings accounts but are unsecured obligations of Citigroup Global Markets Holdings Inc. These securities are not insured by the Federal Deposit Insurance Corporation or any other governmental agency or instrumentality. CITIGROUP GLOBAL MARKETS LIMITED , 2004 TABLE OF CONTENTS PROSPECTUS SUPPLEMENT
PAGE ---- Risk Factors................................................ S-3 Governing Law............................................... S-5 Important Currency Information.............................. S-5 Description of the Notes.................................... S-6 Certain United States Federal Income Tax Considerations..... S-33 European Union Savings Directive............................ S-34 Plan of Distribution........................................ S-35 ERISA Matters............................................... S-37 Legal Matters............................................... S-38 General Information......................................... S-38
PROSPECTUS Prospectus Summary.......................................... 1 Forward-Looking Statements.................................. 6 Citigroup Global Markets Holdings Inc. ..................... 7 Use of Proceeds and Hedging................................. 8 Description of Debt Securities.............................. 10 Description of Index Warrants............................... 17 Book-Entry Procedures and Settlement........................ 20 Limitations on Issuances in Bearer Form..................... 21 Plan of Distribution........................................ 23 ERISA Matters............................................... 26 Legal Matters............................................... 26 Experts..................................................... 26
S-2 RISK FACTORS CHANGES IN EXCHANGE RATES AND EXCHANGE CONTROLS COULD RESULT IN A SUBSTANTIAL LOSS TO YOU. An investment in foreign currency notes, which are notes denominated in a specified currency other than your home currency, which is the currency of the country in which you are resident or the currency (including any composite currency) in which you conduct your business or activities, entails significant risks that are not associated with a similar investment in a security denominated in your home currency. Similarly, an investment in an indexed note, on which all or a part of any payment due is based on a currency other than your home currency, has significant risks that are not associated with a similar investment in non-indexed notes. These risks include, but are not limited to: - the possibility of significant market changes in rates of exchange between your home currency and the specified currency; - the possibility of significant changes in rates of exchange between your home currency and the specified currency resulting from the official redenomination or revaluation of the specified currency; and - the possibility of the imposition or modification of foreign exchange controls by either your government or foreign governments. These risks generally depend on factors over which Citigroup Global Markets Holdings has no control and which cannot be readily foreseen, such as: - economic events; - political events; and - the supply of, and demand for, the relevant currencies. In recent years, rates of exchange for certain currencies in which Citigroup Global Markets Holdings' notes may be denominated have been highly volatile. This volatility may be expected in the future. Fluctuations that have occurred in any particular exchange rate in the past are not necessarily indicative, however, of fluctuations that may occur in the rate during the term of any foreign currency note. Depreciation of the specified currency of a foreign currency note against your home currency would result in a decrease in the effective yield of such foreign currency note below its coupon rate and could result in a substantial loss to the investor on a home currency basis. Governments have imposed from time to time, and may in the future impose, exchange controls that could affect exchange rates as well as the availability of a specified currency at the time of payment of principal, any premium, or interest on a foreign currency note. There can be no assurance that exchange controls will not restrict or prohibit payments of principal, any premium, or interest denominated in any such specified currency. Even if there are no actual exchange controls, it is possible that such specified currency would not be available to Citigroup Global Markets Holdings when payments on the note are due because of circumstances beyond the control of Citigroup Global Markets Holdings. In this event, Citigroup Global Markets Holdings will make required payments in U.S. dollars on the basis described in this prospectus supplement. You should consult your own financial and legal advisors as to the risks of an investment in notes denominated in a currency other than your home currency. See "-- The Unavailability of Currencies Could Result in a Substantial Loss to You" and "Description of the Notes -- Payment of Principal and Interest" below. Any pricing supplement relating to notes having a specified currency other than U.S. dollars will contain a description of any material exchange controls affecting that currency and any other required information concerning the currency. S-3 THE UNAVAILABILITY OF CURRENCIES COULD RESULT IN A SUBSTANTIAL LOSS TO YOU. Except as set forth below, if payment on a note is required to be made in a specified currency other than U.S. dollars and that currency is -- - unavailable due to the imposition of exchange controls or other circumstances beyond Citigroup Global Markets Holdings' control; - no longer used by the government of the country issuing the currency; or - no longer used for the settlement of transactions by public institutions of the international banking community -- then all payments on the note will be made in U.S. dollars until the currency is again available or so used. The amounts so payable on any date in the currency will be converted into U.S. dollars on the basis of the most recently available market exchange rate for the currency or as otherwise indicated in the applicable pricing supplement. Any payment on a note made under these circumstances in U.S. dollars will not constitute a default or an event of default under the indenture under which the note was issued. If the specified currency of a note is officially redenominated, other than as a result of European Monetary Union, such as by an official redenomination of any specified currency that is a composite currency, then the payment obligations of Citigroup Global Markets Holdings on the note will be the amount of redenominated currency that represents the amount of Citigroup Global Markets Holdings' obligations immediately before the redenomination. The notes will not provide for any adjustment to any amount payable as a result of: - any change in the value of the specified currency of those notes relative to any other currency due solely to fluctuations in exchange rates; or - any redenomination of any component currency of any composite currency, unless that composite currency is itself officially redenominated. JUDGMENTS IN A FOREIGN CURRENCY COULD RESULT IN A SUBSTANTIAL LOSS TO YOU. The notes will be governed by, and construed in accordance with, the laws of New York State. Courts in the United States customarily have not rendered judgments for money damages denominated in any currency other than the U.S. dollar. A 1987 amendment to the Judiciary Law of New York State provides, however, that an action based upon an obligation denominated in a currency other than U.S. dollars will be rendered in the foreign currency of the underlying obligation. Any judgment awarded in such an action will be converted into U.S. dollars at the rate of exchange prevailing on the date of the entry of the judgment or decree. CHANGES IN THE VALUE OF UNDERLYING ASSETS OF INDEXED NOTES COULD RESULT IN A SUBSTANTIAL LOSS TO YOU. An investment in indexed notes may have significant risks that are not associated with a similar investment in a debt instrument that: - has a fixed principal amount; - is denominated in U.S. dollars; and - bears interest at either a fixed rate or a floating rate based on nationally published interest rate references. S-4 The risks of a particular indexed note will depend on the terms of that indexed note. Such risks may include, but are not limited to, the possibility of significant changes in the prices of: - the underlying assets; - another objective price; and - economic or other measures making up the relevant index. Underlying assets could include: - one or more securities or securities indices; - one or more specified foreign currency or currency indices; - a combination thereof; - intangibles; - goods; - articles; - commodities; and - any other financial, economic or other measure or instrument. The risks associated with a particular indexed note generally depend on factors over which Citigroup Global Markets Holdings has no control and which cannot readily be foreseen. These risks include: - economic events; - political events; and - the supply of, and demand for, the underlying assets. In recent years, currency exchange rates and prices for various underlying assets have been highly volatile. Such volatility may be expected in the future. Fluctuations in rates or prices that have occurred in the past are not necessarily indicative, however, of fluctuations that may occur during the term of any indexed note. In considering whether to purchase indexed notes, you should be aware that the calculation of amounts payable on indexed notes may involve reference to: - an index determined by a subsidiary or an affiliate of Citigroup Global Markets Holdings; or - prices that are published solely by third parties or entities which are not regulated by the laws of the United States. The risk of loss as a result of linking principal or interest payments on indexed notes to an index and to the underlying assets can be substantial. You should consult your own financial and legal advisors as to the risks of an investment in indexed notes. GOVERNING LAW The notes and the related indenture will be governed by the laws of New York State. IMPORTANT CURRENCY INFORMATION Purchasers are required to pay for each note in a currency specified by Citigroup Global Markets Holdings for that note. If requested by a prospective purchaser of a note having a specified currency other than U.S. dollars, an agent may at its discretion arrange for the exchange of U.S. dollars into the specified currency to enable the purchaser to pay for the note. Each such exchange will be made by such agent. The terms, conditions, limitations and charges that such agent may from time to time establish in accordance with its regular foreign exchange practice shall control the exchange. The purchaser must pay all costs of exchange. References in this prospectus supplement to "U.S. dollars," "U.S.$," "dollar" or "$" are to the lawful currency of the United States. S-5 DESCRIPTION OF THE NOTES The following description of the particular terms of the Medium-Term Senior Notes, Series D and Medium-Term Subordinated Notes, Series E supplements the description of the general terms and provisions of the debt securities set forth in the prospectus. If any specific information regarding the notes in this prospectus supplement is inconsistent with the more general terms of the debt securities described in the prospectus, you should rely on the information in this prospectus supplement. The pricing supplement for each offering of notes will contain the specific information and terms for that offering. If any information in the pricing supplement, including any changes in the method of calculating interest on any note, is inconsistent with this prospectus supplement, you should rely on the information in the pricing supplement. The pricing supplement may also add, update or change information contained in the prospectus and this prospectus supplement. It is important for you to consider the information contained in the prospectus, this prospectus supplement and the pricing supplement in making your investment decision. GENERAL Introduction. The senior notes are a series of senior debt securities issued under Citigroup Global Markets Holdings' senior debt indenture dated as of December 1, 1988, as amended from time to time, between Citigroup Global Markets Holdings and JPMorgan Chase Bank, as successor trustee. The subordinated notes are a series of subordinated debt securities issued under Citigroup Global Markets Holdings' subordinated debt indenture. At the date of this prospectus supplement, the notes offered pursuant to this prospectus supplement are limited to an aggregate initial public offering price or purchase price of up to U.S.$10,945,831,296 or its equivalent in one or more other currencies. This amount is subject to reduction as a result of the sale of other securities under the registration statement of which this prospectus supplement and the accompanying prospectus form a part, or under a registration statement to which this prospectus supplement and the accompanying prospectus also relate. The amount of notes sold of either series will reduce the amount of notes of the other series that may be sold. Citigroup Global Markets Holdings reserves the right to withdraw, cancel or modify the offer made by this prospectus supplement without notice. The aggregate amount of notes may be increased from time to time to such larger amount as may be authorized by Citigroup Global Markets Holdings. The U.S. dollar equivalent of the public offering price or purchase price of a note having a specified currency other than U.S. dollars will be determined on the basis of the market exchange rate. Unless otherwise specified in the pricing supplement, this market exchange rate will be the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York for that specified currency on the applicable issue date. Such determination will be made by Citigroup Global Markets Holdings or its agent, as the exchange rate agent for the applicable series of notes. Ranking. The senior notes will constitute part of the senior indebtedness of Citigroup Global Markets Holdings and will rank on an equal basis with all other unsecured debt of Citigroup Global Markets Holdings other than subordinated debt. The subordinated notes will be subordinate and junior in the right of payment, to the extent and in the manner set forth in the subordinated debt indenture, to all senior indebtedness of Citigroup Global Markets Holdings. See "Description of Debt Securities -- Subordinated Debt" in the prospectus. If there were an event of default with respect to any senior indebtedness, the trustee or holders of 25% of the principal amount of senior debt securities outstanding in a series could demand that the principal be repaid immediately. If there were an event of default with respect to any subordinated indebtedness involving certain events of insolvency or bankruptcy, the trustee or holders of 25% of the principal amount of subordinated debt securities outstanding in a series could demand that the principal be paid immediately. In the absence of certain events of insolvency or bankruptcy, failure to pay amounts due with respect to subordinated indebtedness would not permit the trustee or such holders to demand that the S-6 principal of such subordinated debt securities be paid immediately. See "Description of Debt Securities -- Events of Default and Defaults" in the prospectus. On a consolidated basis, the aggregate principal amount of senior indebtedness of Citigroup Global Markets Holdings outstanding as of June 30, 2004 was approximately $76.3 billion. This senior indebtedness consisted of approximately $49.6 billion of term debt, approximately $18.9 billion of commercial paper and approximately $7.8 billion of other short-term borrowings. Forms of Notes. The notes will be issued in bearer form only. In addition, Citigroup Global Markets Holdings may offer notes in registered form in a concurrent offering in the United States. The notes in bearer form may not be exchanged for notes in registered form. When originally issued and for the period of 40 days after the original issuance date, the notes will not be offered, sold or delivered, directly or indirectly, to a U.S. person or to any person within the United States, except to the extent permitted under U.S. Treasury regulations, as more fully set forth under "Plan of Distribution." As used in this prospectus supplement, a "U.S. person" means a citizen or resident of the United States, a corporation, partnership or other entity created or organized in or under the laws of the United States, or an estate or trust the income of which is subject to United States federal income taxation regardless of its source. All notes that are originally issued on the same date and that otherwise have identical terms will be represented initially by interests in a single temporary global security in bearer form, without coupons, to be deposited with a common depositary in London, England for Euroclear Bank S.A./N.V., as operator of the Euroclear System, and Clearstream International, for credit to the accounts designated by or on behalf of the purchasers. On or after the fortieth day following the issuance of a temporary global security, and subject to the receipt of a certificate of non-U.S. beneficial ownership, beneficial interests in that temporary global security will be exchangeable for interests in a definitive global security in bearer form, without coupons, in a denomination equal to the aggregate principal amount of all interests in the temporary global security so exchanged. A "certificate of non-U.S. beneficial ownership" is a certificate to the effect that a beneficial interest in a temporary global security is owned by a person that is not a U.S. person or is owned by or through a financial institution in compliance with applicable U.S. Treasury regulations. Each such definitive global security will be deposited with the common depositary for credit to the account or accounts designated by or on behalf of the beneficial owner or owners. Interests in a definitive global security may be exchanged in whole, or if permitted by the procedures of Euroclear or Clearstream may prescribe from time to time, in part, for one or more individual notes, with appropriate coupons attached, in any authorized denomination or denominations. No notes will be delivered in or to the United States and its possessions. References in this prospectus supplement to "notes" shall, except where otherwise indicated, include interests in a temporary or definitive global security as well as individual notes and any appurtenant coupons. Transfers of interests in a temporary or definitive global security will be made by Euroclear or Clearstream in accordance with their customary operating procedures. Title to individual notes and coupons will pass by physical delivery. The bearer of each coupon, whether or not the coupon is attached to an individual note, shall be subject to and bound by all the provisions contained in the individual note to which such coupon relates. The bearer of any individual note and any coupon may, to the fullest extent permitted by applicable law, be treated at all times by all persons and for all purposes as the absolute owner of such note or coupon, regardless of any notice of ownership, theft or loss or of any writing thereon. The following legend will appear on each global security and on all individual notes and any coupons: "Any United States Person who holds this obligation will be subject to limitations under the United States income tax laws, including the limitations provided in Sections 165(j) and 1287(a) of the Internal Revenue Code." The sections referred to in the legend provide that, with certain exceptions, a United States taxpayer who holds an interest in a global security or an individual note or coupon will not be permitted to deduct any loss with respect to, and will not be eligible for capital gain treatment with respect to any gain realized on a sale, exchange, redemption or other disposition of, an interest in such global S-7 security or such individual note or coupon. See "Limitations on Issuances In Bearer Form" in the accompanying prospectus. Denominations. Unless otherwise provided in the applicable pricing supplement, the minimum aggregate principal amount of notes that may be purchased is U.S.$25,000 or the approximate equivalent in other currencies. Unless otherwise specified in the applicable pricing supplement, the authorized denominations of notes denominated in U.S. dollars will be $10,000 and any larger amount that is a whole multiple of $1,000. The authorized denominations of notes that have a specified currency other than U.S. dollars will be the approximate equivalents in the specified currency. Maturity. Unless otherwise specified in the applicable pricing supplement, each note will mature on a stated maturity date. The stated maturity date will be a business day more than nine months from its date of issue, as selected by the purchaser and agreed to by Citigroup Global Markets Holdings. If so specified in the applicable pricing supplement, the stated maturity date may be extended at the option of Citigroup Global Markets Holdings, and each note may also be redeemed at the option of Citigroup Global Markets Holdings, or repaid at the option of the holder, at a price specified in the applicable pricing supplement prior to its stated maturity. Each note that has a specified currency of pounds sterling will mature in compliance with the regulations the Bank of England may promulgate from time to time. Additional Information. The pricing supplement relating to a note will describe the following terms: - the specified currency for the note; - whether the note (1) is a fixed rate note; (2) is a floating rate note; (3) is an amortizing note, meaning that a portion or all the principal amount is payable prior to stated maturity in accordance with a schedule, by application of a formula, or based on an index; and/or (4) is an indexed note on which payments of interest or principal, or both, may be linked to the price of one or more securities, currencies, intangibles, articles, commodities or goods or any other financial, economic or other measure or instrument, including the occurrence or non-occurrence of any event or circumstance; - the price at which the note will be issued, which will be expressed as a percentage of the aggregate principal amount or face amount; - the original issue date on which the note will be issued; - the date of the stated maturity; - if the note is a fixed rate note, the rate per annum at which the note will bear any interest, and whether and how the rate may be changed prior to its stated maturity; - if the note is a floating rate note, relevant terms such as: (1) the base rate; (2) the initial interest rate; (3) the interest reset period or the interest reset dates; (4) the interest payment dates; (5) any index maturity; (6) any maximum interest rate; (7) any minimum interest rate; (8) any spread or spread multiplier; and (9) any other terms relating to the particular method of calculating the interest rate for the note and whether and how the spread or spread multiplier may be changed prior to stated maturity; S-8 - whether the note is a note issued originally at a discount; - if the note is an amortizing note, the terms for repayment prior to stated maturity; - if the note is an indexed note, in the case of an indexed rate note, the manner in which the amount of any interest payment will be determined or, in the case of an indexed principal note, its face amount and the manner in which the principal amount payable at stated maturity will be determined; - whether the note may be redeemed at the option of Citigroup Global Markets Holdings, or repaid at the option of the holder, prior to stated maturity as described under "Optional Redemption, Repayment and Repurchase" below and the terms of its redemption or repayment; - whether the note may have an optional extension beyond its stated maturity as described under "Extension of Maturity" below; - whether the note will be represented by a global security or a certificate issued in definitive form; - any special United States federal income tax consequences of the purchase, ownership and disposition of a particular issuance of notes; - whether the note is a renewable note, and, if so, its specific terms; - the use of proceeds, if materially different than that disclosed in the accompanying prospectus; and - any other terms of the note provided in the accompanying prospectus to be set forth in a pricing supplement or that are otherwise consistent with the provisions of the indenture under which the note will be issued. As used in this prospectus supplement, business day means: - for any note, any day that is not a Saturday or Sunday and that, in New York City, London, England or the place in which the note or its coupon is to be presented for payment, is not a day on which banking institutions generally are authorized or obligated by law or executive order to close; - for LIBOR notes only, a London business day, which shall be any day on which dealings in deposits in the specified currency are transacted in the London interbank market; - for any determination by the exchange rate agent of an exchange rate pursuant to notes having a specified currency other than U.S. dollars, an exchange rate business day, which shall be any day on which banking institutions and foreign exchange markets settle payments in New York City and London; - for notes having a specified currency other than U.S. dollars only, other than notes denominated in euros, any day that, in the principal financial center (as defined below) of the country of the specified currency, is not a day on which banking institutions generally are authorized or obligated by law to close; and - for EURIBOR notes and notes denominated in euros, a TARGET business day, which will be any day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer System is open. As used above, a principal financial center means the capital city of the country issuing the specified currency. However, for Australian dollars, Canadian dollars and Swiss francs, the principal financial center will be Sydney, Toronto and Zurich, respectively. PAYMENT OF PRINCIPAL AND INTEREST Unless otherwise specified in the applicable pricing supplement and except, under certain circumstances, for notes having specified currencies other than U.S. dollars, Citigroup Global Markets Holdings will pay the principal of, and any premium and interest on, each note in the specified currency for such note. S-9 Payments on the notes will be made without deduction for United States withholding taxes to the extent described under "Payment of Additional Interest" below. Each note may be redeemed at the redemption price applicable to it, if certain events occur involving United States withholding taxes or information reporting requirements. See "Tax Redemption" and "Special Tax Redemption" below. Other than in such event, the notes may not be redeemed by Citigroup Global Markets Holdings prior to its stated maturity date unless otherwise specified in the applicable pricing supplement. See "Optional Redemption, Repayment and Repurchase" below. The notes will not be subject to any sinking fund. Interest on each temporary global security will be paid to each of Euroclear and Clearstream with respect to that portion of such temporary global security held for its account, but only upon receipt as of the relevant interest payment date of a certificate of Non-U.S. beneficial ownership and upon notation thereon of such payment. Each of Euroclear and Clearstream will undertake in such circumstances to credit such interest received by it to the respective accounts having an interest in such temporary global security. The principal of, and any premium or interest on, each definitive global security will be paid to each of Euroclear and Clearstream with respect to that portion of such definitive global security held for its account upon notation thereon of such payment. Each of Euroclear and Clearstream will undertake in such circumstances to credit such principal, premium and interest received by it to the respective accounts having an interest in such definitive global security. All such payments will be made to Euroclear and Clearstream in immediately available funds. A payment in respect of an individual note or any coupon will be made only against surrender of such note or coupon at the offices of such paying agents outside the United States and its possessions as Citigroup Global Markets Holdings may from time to time appoint. At the direction of the holder of a note or coupon, and subject to applicable laws and regulations, these payments will be made by check drawn on a bank in the City of New York (in the case of a U.S. dollar payment) or outside the United States (in the case of a payment in a currency other than U.S. dollars) mailed to an address outside the United States and its possessions furnished by such holder or, at his or her option, by wire transfer (pursuant to written instructions supplied by such holder) to an account maintained by the payee with a bank located outside the United States and its possessions. No payment in respect of an individual note or coupon will be made upon presentation of such note or coupon at any office or agency of either trustee or any other paying agent maintained by Citigroup Global Markets Holdings in the United States and its possessions, nor will any such payment be made by transfer to an account, or by mail to an address, in the United States and its possessions. However, if U.S. dollar payments in respect of notes or any coupons at the offices of all paying agents outside the United States and its possessions become illegal or are effectively precluded because of the imposition of exchange controls or similar restrictions on the full payment or receipt of such amounts in U.S. dollars, Citigroup Global Markets Holdings will appoint an office or agency (which may be a trustee) in the United States at which such payments may be made. The specified offices of the trustees and the names and offices of the initial paying agents are set forth at the end of this prospectus supplement. Citigroup Global Markets Holdings reserves the right at any time to vary or terminate the appointment of any paying agent and to appoint additional or other paying agents and to approve any change in the office through which any paying agent acts, provided that there will at all times be a paying agent (which may be a trustee) in at least one city in Europe, which, so long as the notes are listed on the Luxembourg Stock Exchange and the rules of that exchange shall so require, shall include Luxembourg. Notice of any such termination or appointment and of any changes in the specified offices of a trustee or any paying agent will be given to the holders of notes in accordance with "Notices" below. Any payment required to be made in respect of a note on a date (including at maturity) that is not a business day for such note need not be made on such date, but may be made on the next succeeding business day with the same force and effect as if made on such date, and no additional interest will accrue as a result of such delayed payment. S-10 Unless otherwise specified in the applicable pricing supplement, if the principal of any note is declared to be due and payable immediately as described under "Description of Debt Securities -- Defaults" in the accompanying prospectus, the amount of principal due and payable with respect to such note will be limited to the aggregate principal amount (or face amount, in the case of an indexed principal note) of such note multiplied by the sum of its issue price (expressed as a percentage of the aggregate principal amount) plus the original issue discount amortized from the date of issue to the date of declaration, which amortization shall be calculated using the "interest method" (computed in accordance with generally accepted accounting principles in effect on the date of declaration). FIXED RATE NOTES Each fixed rate note will bear interest from its original issue date, or from the last interest payment date to which interest has been paid or duly provided for, at the rate per annum stated in the applicable pricing supplement until its principal amount is paid or made available for payment. However, as described below under "Subsequent Interest Periods" and "Extension of Maturity," or as otherwise may be described in the applicable pricing supplement, the rate of interest payable on fixed rate notes may be adjusted from time to time. Unless otherwise set forth in the applicable pricing supplement, interest on each fixed rate note will be payable annually in arrears on such dates as set forth in the applicable pricing supplement, with each such day being an interest payment date, and at stated maturity. Unless "accrue to pay" is specified in the applicable pricing supplement or unless otherwise specified in the applicable pricing supplement, if an interest payment date for any fixed rate note would otherwise be a day that is not a business day, any payment required to be made on the note on that date, including the stated maturity date, may be made on the next succeeding business day with the same force and effect as if made on the specified date. No additional interest will accrue as a result of such delayed payment. If in connection with any fixed rate note, "accrue to pay" is specified in the applicable pricing supplement, and any interest payment date for the fixed rate note would otherwise be a day that is not a business day, the interest payment date will be postponed to the next succeeding business day. Any payment of interest on an interest payment date will include interest accrued through the day before the interest payment date. Unless otherwise specified in the applicable pricing supplement, interest on fixed rate notes will be computed on the basis of a 360-day year of twelve 30-day months or, in the case of an incomplete month, the number of days elapsed. FLOATING RATE NOTES Each floating rate note will bear interest at the initial interest rate set forth, or otherwise described, in the applicable pricing supplement. The initial interest period is the period from the original issue date to, but not including, the first interest reset date. The interest reset period is the period from each interest reset date to, but not including, the following interest reset date. The initial interest period, and any interest reset period, is an interest period. The interest rate for each floating rate note will be determined based on an interest rate basis, the base rate, plus or minus any spread, or multiplied by any spread multiplier. A basis point, or bp, equals one-hundredth of a percentage point. The spread is the number of basis points that may be specified in the applicable pricing supplement as applicable to the note. The spread multiplier is the percentage that may be specified in the applicable pricing supplement as applicable to the note. As described below under "Subsequent Interest Periods" and "Extension of Maturity," or as may otherwise be specified in the applicable pricing supplement, the spread or spread multiplier on floating rate notes may be adjusted from time to time. The applicable pricing supplement will designate one of the following base rates as applicable to a floating rate note: - the CD Rate; - the Commercial Paper Rate; S-11 - the Federal Funds Rate; - LIBOR; - the Treasury Rate; - the Prime Rate; - the Eleventh District Cost of Funds Rate; - EURIBOR; or - such other base rate as is set forth in the applicable pricing supplement and in the note. The following terms are used in describing the various base rates. The "index maturity" is the period of maturity of the instrument or obligation from which the base rate is calculated. "H.15(519)" means the publication entitled "Statistical Release H.15(519), Selected Interest Rates," or any successor publication, published by the Board of Governors of the Federal Reserve System. "H.15 Daily Update" means the daily update of the Board of Governors of the Federal Reserve System at http://www.bog.frb.fed.us/releases/H15/update or any successor site or publication. "Calculation date" means the date on which the calculation agent is to calculate the interest rate which will be the earlier of (1) the tenth calendar day after the related rate determination date, or if any such day is not a business day, the next succeeding business day or (2) the business day preceding the applicable interest payment date or the stated maturity. As specified in the applicable pricing supplement, a floating rate note may also have either or both of the following, which will be expressed as a rate per annum on a simple interest basis: - maximum interest rate, which will be a maximum limitation, or ceiling, on the rate at which interest may accrue during any interest period; and/or - minimum interest rate, which will be a minimum limitation, or floor, on the rate at which interest may accrue during any interest period. In addition to any maximum interest rate that may be applicable to any floating rate note, the interest rate on a floating rate note will in no event be higher than the maximum rate permitted by applicable law. The notes will be governed by the law of New York State. As of the date of this prospectus supplement, the maximum rate of interest under provisions of the New York penal law, with a few exceptions, is 25% per annum on a simple interest basis. Such maximum rate of interest only applies to obligations that are less than U.S.$2,500,000. Citigroup Global Markets Holdings will appoint and enter into agreements with calculation agents to calculate interest rates on floating rate notes. Unless otherwise specified in the applicable pricing supplement, JPMorgan Chase Bank will be the calculation agent for each senior note that is a floating rate note, and Deutsche Bank Trust Company Americas will be the calculation agent for each subordinated note that is a floating rate note. All determinations of interest by the calculation agents will, in the absence of manifest error, be conclusive for all purposes and binding on the holders of the floating rate notes. The interest rate on each floating rate note will be reset on an interest reset date, which means that the interest rate is reset daily, weekly, monthly, quarterly, semiannually or annually, as specified in the applicable pricing supplement. Unless otherwise specified in the applicable pricing supplement, the interest reset dates will be as follows: - in the case of floating rate notes that reset daily, each business day; - in the case of floating rate notes that reset weekly, other than Treasury Rate notes, the Wednesday of each week; S-12 - in the case of Treasury Rate notes that reset weekly and except as provided below under "Treasury Rate Notes," the Tuesday of each week; - in the case of floating rate notes that reset monthly, other than Eleventh District Cost of Funds Rate notes, the third Wednesday of each month; - in the case of floating rate notes that are Eleventh District Cost of Funds Rate notes, the first calendar day of each month; - in the case of floating rate notes that reset quarterly, the third Wednesday of March, June, September and December of each year; - in the case of floating rate notes that reset semiannually, the third Wednesday of each of two months of each year specified in the applicable pricing supplement; and - in the case of floating rate notes that reset annually, the third Wednesday of one month of each year specified in the applicable pricing supplement. If an interest reset date for any floating rate note would fall on a day that is not a business day, that interest reset date will be postponed to the next succeeding business day. In the case of a LIBOR note or a EURIBOR note, if postponement to the next business day would cause the interest reset date to be in the next succeeding calendar month, the interest reset date will instead be the immediately preceding business day. If an auction of direct obligations of United States Treasury bills falls on a day that is an interest reset date for Treasury Rate notes, the interest reset date will be the succeeding business day. Unless otherwise specified in the applicable pricing supplement and except as set forth below, the rate of interest that goes into effect on any interest reset date will be determined on a rate determination date preceding such interest reset date, as further described below. Unless otherwise specified in the applicable pricing supplement, interest payable on floating rate notes will be the interest accrued from and including the original issue date or the last date to which interest has been paid, as the case may be, to but excluding the applicable interest payment date. Accrued interest on a floating rate note with more than one interest reset date will be calculated by multiplying the principal amount of the note by an accrued interest factor. If the floating rate note is an indexed principal note, the face amount of the note will be multiplied by the accrued interest factor. The accrued interest factor will be computed by adding the interest factors calculated for each day in the period for which accrued interest is being calculated. Unless otherwise specified in the applicable pricing supplement, the interest factor for each such day will be computed by dividing the interest rate in effect on such day by 360, in the case of CD Rate notes, Commercial Paper Rate notes, Federal Funds Rate notes, LIBOR notes, Prime Rate notes, Eleventh District Cost of Funds Rate notes and EURIBOR notes. In the case of Treasury Rate notes, the interest factor for each such day will be computed by dividing the interest rate by the actual number of days in the year. The interest factor will be expressed as a decimal calculated to seven decimal places without rounding. For purposes of making the foregoing calculation, the interest rate in effect on any interest reset date will be the applicable rate as reset on that date. For all other floating rate notes, accrued interest will be calculated by multiplying the principal amount of the note by the interest rate in effect during the period for which accrued interest is being calculated. That product is then multiplied by the quotient obtained by dividing the number of days in the period for which accrued interest is being calculated by 360, in the case of CD Rate notes, Commercial Paper Rate notes, Federal Funds Rate notes, LIBOR notes, Prime Rate notes, Eleventh District Cost of Funds Rate notes and EURIBOR notes. In the case of Treasury Rate notes, the product is multiplied by the quotient obtained by dividing the number of days in the period for which accrued interest is being calculated by the actual number of days in the year. Unless otherwise specified in the applicable pricing supplement, all percentages resulting from any calculation of the rate of interest on a floating rate note will be rounded, if necessary, to the nearest 1/100,000 of 1% (.0000001), with five one-millionths of a percentage point rounded upward. All currency S-13 amounts used in, or resulting from, the calculation on floating rate notes will be rounded to the nearest one-hundredth of a unit. For purposes of rounding, ..005 of a unit shall be rounded upward. Unless otherwise indicated in the applicable pricing supplement and except as provided below, interest will be payable as follows. - In the case of floating rate notes that reset daily, weekly or monthly, other than Eleventh District Cost of Funds Rate notes, interest will be payable on the third Wednesday of each month or on the third Wednesday of March, June, September and December of each year, as specified in the applicable pricing supplement. - In the case of Eleventh District Cost of Funds Rate notes, interest will be payable on the first calendar day of each March, June, September and December. - In the case of floating rate notes that reset quarterly, interest will be payable on the third Wednesday of March, June, September and December of each year. - In the case of floating rate notes that reset semiannually, interest will be payable on the third Wednesday of each of two months of each year specified in the applicable pricing supplement. - In the case of floating rate notes that reset annually, interest will be payable on the third Wednesday of one month of each year specified in the applicable pricing supplement. In each of these cases, interest will also be payable at maturity. If an interest payment date for any floating rate note would fall on a day that is not a business day, that interest payment date will be postponed to the next succeeding business day, except as described in the next paragraph. In the case of a LIBOR note or a EURIBOR note, if postponement to the next business day would cause the interest payment date to be in the next succeeding calendar month, the interest payment date will instead be the immediately preceding business day. If for any floating rate note, the applicable pricing supplement provides that the note does not accrue to pay, and if an interest payment date for that floating rate note would otherwise be a day that is not a business day, the interest payment date will not be postponed. Any payment required to be made on the floating rate note, however, may be made on the next succeeding business day with the same force and effect as if made on the due date. No additional interest will accrue as a result of such delayed payment. Upon the request of the holder of any floating rate note, the calculation agent for the note will provide the interest rate then in effect and, if determined, the interest rate that will become effective on the next interest reset date for the floating rate note. In addition, the calculation agent for any note listed on the Luxembourg Stock Exchange will provide such information to the Luxembourg Stock Exchange and it will be made available at the offices of the paying agents in Luxembourg and at the Luxembourg Stock Exchange as soon as possible after the determination of the interest rate. CD Rate Notes. Each CD Rate note will bear interest for each interest reset period at an interest rate equal to the CD Rate and any spread or spread multiplier specified in the note and in the applicable pricing supplement. The calculation agent will determine the CD Rate on each CD Rate determination date. The CD Rate determination date is the second business day prior to the interest reset date for each interest reset period for negotiable U.S. dollar certificates of deposit having the index maturity designated in the applicable pricing supplement as published in H.15(519) under the heading "CDs (Secondary Market)." The following procedures will be followed if the CD Rate cannot be determined as described above. - If the above rate is not published prior to 3:00 p.m., New York City time, on the calculation date pertaining to the CD Rate determination date, then the CD Rate for the interest reset period will be the rate on that date for negotiable U.S. dollar certificates of deposit of the index maturity designated in the applicable pricing supplement as published in the H.15 Daily Update, or other recognized electronic source used for the purpose of displaying the applicable rate, under the heading "CDs (Secondary Market)." - If by 3:00 p.m., New York City time, on the calculation date, the above rate is not yet published, then the CD Rate will be the arithmetic mean of the secondary market offered rates as of S-14 10:00 a.m., New York City time, on that CD Rate determination date of three leading nonbank dealers in negotiable U.S. dollar certificates of deposit in New York City selected by the calculation agent for negotiable U.S. dollar certificates of deposit of major United States money center banks of the highest credit standing, in the market for negotiable U.S. dollar certificates of deposit, with a remaining maturity closest to the index maturity designated in the pricing supplement in a denomination of U.S.$5,000,000. - If the dealers selected by the calculation agent, however, are not quoting offered rates as mentioned in the preceding sentence, the CD Rate for that interest reset period will be the same as the CD Rate for the immediately preceding interest reset period. If there was no such interest reset period, the CD Rate will be the initial interest rate. CD Rate notes, like other notes, are not deposit obligations of a bank and are not insured by the Federal Deposit Insurance Corporation. Commercial Paper Rate Notes. Each Commercial Paper Rate note will bear interest for each interest reset period at an interest rate equal to the Commercial Paper Rate and any spread or spread multiplier, specified in the note and the applicable pricing supplement. The calculation agent will determine the Commercial Paper Rate on each Commercial Paper Rate determination date. The Commercial Paper Rate determination date is the business day immediately preceding the interest reset date for each interest reset period. The Commercial Paper Rate will be the money market yield on that date of the rate for commercial paper having the index maturity specified in the applicable pricing supplement, as published in H.15(519) under the heading "Commercial Paper -- Nonfinancial." The following procedures will be followed if the Commercial Paper Rate cannot be determined as described above. - If the rate is not published prior to 3:00 p.m., New York City time, on the calculation date pertaining to the Commercial Paper Rate determination date, then the Commercial Paper Rate for the interest reset period will be the money market yield on that date of the rate for commercial paper of the specified index maturity as published in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying the applicable rate, under the heading "Commercial Paper -- Nonfinancial." - If by 3:00 p.m., New York City time, on such calculation date, the above rate is not yet published, then the Commercial Paper Rate for the interest reset period will be the money market yield of the arithmetic mean of the offered rates, as of 11:00 a.m., New York City time, on that date, of three leading dealers of U.S. dollar commercial paper in New York City selected by the calculation agent for such Commercial Paper Rate note for commercial paper of the specified index maturity placed for an industrial issuer whose bonds are rated "AA" or the equivalent by a nationally recognized rating agency. - If the dealers selected by the calculation agent, however, are not quoting offered rates as mentioned in the preceding sentence, the Commercial Paper Rate for the interest reset period will be the same as the Commercial Paper Rate for the immediately preceding interest reset period. If there was no such interest reset period, the Commercial Paper Rate will be the initial interest rate. Money market yield will be calculated as follows: D X 360 money market yield = ------------- X 100 360 - (D X M)
where "D" refers to the applicable per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal, and "M" refers to the actual number of days in the applicable interest reset period. Federal Funds Rate Notes. Each Federal Funds Rate note will bear interest for each interest reset period at an interest rate equal to the Federal Funds Rate and any spread or spread multiplier specified in the note and the applicable pricing supplement. S-15 The calculation agent will determine the Federal Funds Rate on each Federal Funds Rate determination date. The Federal Funds Rate determination date is the business day immediately preceding the interest reset date for the interest reset period. The Federal Funds Rate will be the rate for U.S. dollar federal funds as published in H.15(519) under the heading "Federal Funds (Effective)" and displayed on Moneyline Telerate (or any successor service) on Page 120 (or any other page as may replace the specified Page on that service). The following procedures will be followed if the Federal Funds Rate cannot be determined as described above. - If the above rate does not appear on Moneyline Telerate on Page 120 or is not published prior to 3:00 p.m., New York City time, on the calculation date pertaining to the Federal Funds Rate determination date, the Federal Funds Rate for the interest reset period will be the rate on that date as published in the H.15 Daily Update under the heading "Federal Funds/Effective Rate" and displayed on Moneyline Telerate (or any successor service) on Page 120 (or any other page as may replace the specified Page on that service). - If by 3:00 p.m., New York City time, on the calculation date the above rate is not yet published, then the Federal Funds Rate for the interest reset period will be the arithmetic mean of the rates for the last transaction in overnight U.S. dollar federal funds arranged by three leading brokers of U.S. dollar federal funds transactions in New York City, selected by the calculation agent prior to 9:00 a.m., New York City time, on that Federal Funds Rate determination date. - If the brokers so selected by the calculation agent are not quoting as mentioned above, the Federal Funds Rate for the interest reset period will be the Federal Funds Rate in effect for the particular Federal Funds Rate determination date. If there was no Federal Funds Rate in effect for the interest reset period, the Federal Funds Rate will be the initial interest rate. LIBOR Notes. Each LIBOR note will bear interest for each interest reset period at an interest rate equal to LIBOR and any spread or spread multiplier specified in the note and the applicable pricing supplement. The calculation agent will determine LIBOR on each LIBOR determination date. The LIBOR determination date is the second London business day prior to the interest reset date for each interest reset period. On a LIBOR determination date, the calculation agent will determine LIBOR for each interest reset period as follows. The calculation agent will determine the offered rates for deposits in the specified currency for the period of the index maturity specified in the applicable pricing supplement commencing on the interest reset date, which appear on the "designated LIBOR page" at approximately 11:00 a.m., London time, on that date. - If "LIBOR Moneyline Telerate" is designated in the applicable pricing supplement, or if neither "LIBOR Reuters" nor "LIBOR Moneyline Telerate" is specified in the applicable pricing supplement as the method for calculating LIBOR, "designated LIBOR page" means the display designated as page "3750" on the Moneyline Telerate Service, and LIBOR will be the relevant offered rate determined by the calculation agent. If page "3750" on the Moneyline Telerate Service is replaced by another page, or if the Moneyline Telerate Service is replaced by a successor service, then "LIBOR Moneyline Telerate" means the replacement page or service selected to display the London interbank offered rates of major banks. - If "LIBOR Reuters" is designated in the applicable pricing supplement, "designated LIBOR page" means the display designated as page "LIBO" on the Reuters Monitor Money Rates Service and LIBOR will be the arithmetic means of the offered rates, calculated by the calculation agent, or the offered rate, if the designated LIBOR page by its terms provides only for a single rate. If the LIBO page on that service is replaced by another page, or if the Reuters Monitor Money Rates Service is S-16 replaced by a successor service, then "LIBOR Reuters" means the replacement page or service selected to display the London interbank offered rates of major banks. If LIBOR cannot be determined on a LIBOR determination date as described above, then the calculation agent will determine LIBOR as follows. - The calculation agent will select four major banks in the London interbank market. - The calculation agent will request that the principal London offices of those four selected banks provide their offered quotations to prime banks in the London interbank market at approximately 11:00 a.m., London time, on the LIBOR determination date. These quotations shall be for deposits in the specified currency for the period of the specified index maturity, commencing on the interest reset date. Offered quotations must be based on a principal amount equal to at least U.S.$1,000,000 or the approximate equivalent in the specified currency that is representative of a single transaction in such market at that time. (1) If two or more quotations are provided, LIBOR for such interest reset period will be the arithmetic mean of those quotations. (2) If less than two quotations are provided, the calculation agent will select three major banks in New York City and follow the steps in the two bullet points below. - The calculation agent will then determine LIBOR for the interest reset period as the arithmetic mean of rates quoted by those three major banks in New York City to leading European banks at approximately 11:00 a.m., New York City time, on the LIBOR determination date. The rates quoted will be for loans in the specified currency, for the period of the specified index maturity, commencing on the interest reset date. Rates quoted must be based on a principal amount of at least U.S.$1,000,000 or the approximate equivalent in the specified currency that is representative of a single transaction in such market at that time. - If fewer than three New York City banks selected by the calculation agent are quoting rates, LIBOR for the interest reset period will be the same as for the immediately preceding interest reset period. If there was no preceding interest reset period, the LIBOR Rate will be the initial interest rate. Treasury Rate Notes. Each Treasury Rate note will bear interest for each interest reset period at an interest rate equal to the Treasury Rate and any spread or spread multiplier, specified in the note and the applicable pricing supplement. Treasury Rate Notes other than Constant Maturity Treasury Rate Notes Unless "Constant Maturity" is specified in the applicable pricing supplement, the Treasury Rate for each interest reset period will be the rate for the auction held on the Treasury Rate determination date for the interest reset period of treasury securities as the rate appears on Moneyline Telerate (or any successor service) on page 56 (or any other page as may replace that page on that service) or on page 57 (or any other page as may replace that page on that service) under the heading "INVESTMENT RATE." Treasury securities are direct obligations of the United States that have the index maturity specified in the applicable pricing supplement. If the Treasury Rate cannot be determined as described above, the following procedures will be followed in the order set forth below. (1) If the Treasury rate is not published prior to 3:00 P.M., New York City time on the related calculation date, then the Treasury Rate will be the Bond Equivalent Yield (as defined below) of the rate for the applicable treasury securities as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the heading "U.S. Government Securities/Treasury Bills/Auction High." S-17 (2) If the rate referred to in clause (1) is not so published by 3:00 P.M., New York City time, on the related calculation date, the Treasury Rate will be the Bond Equivalent Yield of the auction rate of the applicable treasury securities as announced by the United States Department of the Treasury. (3) If the rate referred to in clause (2) above is not so announced by the United States Department of the Treasury, or if the auction is not held, then the Treasury Rate will be the Bond Equivalent Yield of the rate on the Treasury Rate determination date of the applicable treasury securities published in H.15(519) under the heading "U.S. Government Securities/Treasury Bills/Secondary Market." (4) If the rate referred to in clause (3) is not so published by 3:00 p.m., New York City time, on the related calculation date, then the Treasury Rate will be the rate on the Treasury Rate determination date of the applicable treasury securities as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the heading "U.S. Government Securities/Treasury Bills/Secondary Market." (5) If the rate referred to in clause (4) is not so published by 3:00 p.m., New York City time, on the related calculation date, then the Treasury Rate will be the rate on the Treasury Rate determination date calculated by the calculation agent as the Bond Equivalent Yield of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 p.m., New York City time, on the Treasury Rate determination date, of three primary United States government securities dealers selected by the calculation agent, for the issue of treasury securities with a remaining maturity closest to the index maturity specified in the applicable pricing supplement. (6) If the dealers selected by the calculation agent are not quoting bid rates as mentioned in (5) above, then the Treasury Rate for such interest reset period will be the same as the Treasury Rate for the immediately preceding interest reset period. If there was no preceding interest reset period, the Treasury Rate will be the initial interest rate. The Treasury Rate determination date for each interest reset period will be the day of the week in which the interest reset date for that interest reset period falls on which treasury securities would normally be auctioned. Treasury securities are normally sold at auction on Monday of each week unless that day is a legal holiday. In that case the auction is normally held on the following Tuesday, except that the auction may be held on the preceding Friday. If, as the result of a legal holiday, an auction is held on the preceding Friday, the Friday will be the Treasury Rate determination date pertaining to the interest reset period commencing in the next succeeding week. If an auction date falls on any day that would otherwise be an interest reset date for a Treasury Rate note, then that interest reset date will instead be the business day immediately following the auction date. Bond Equivalent: Yield will be calculated as follows: D X N Bond Equivalent Yield = ------------- X 100 360 - (D X M)
where "D" refers to the applicable per annum rate for treasury securities quoted on a bank discount basis and expressed as a decimal, "N" refers to 365 or 366, as the case may be, and "M" refers to the actual number of days in the applicable interest reset period. Constant Maturity Treasury Rate Notes If "Constant Maturity" is specified in the applicable pricing supplement, the Treasury Rate for each interest reset period will be the rate displayed on the designated CMT Telerate page under the caption "Treasury Constant Maturities," under the column for the designated CMT maturity index in the following manner. S-18 - If the designated CMT Moneyline Telerate page is 7051, the Treasury Rate will be the rate on the Constant Maturity Treasury Rate determination date. - If the rate referred to above does not appear on Moneyline Telerate Page 7051, then the Treasury Rate will be the treasury constant maturity rate for the designated CMT maturity index as published in the relevant H.15(519) under the caption "Treasury Constant Maturities." - If the rate referred to above does not so appear in H.15(519), then the Treasury Rate will be the constant treasury maturity rate on the Constant Maturity Treasury Rate determination date for the designated CMT maturity index as may then be published by either the Federal Reserve System Board of Governors or the United States Department of the Treasury that the calculation agent determines to be comparable to the rate which would have otherwise been published in H.15(519). - If the designated CMT Moneyline Telerate page is 7052, the Treasury Rate will be the average for the week or for the month, as specified in the applicable pricing supplement, ended immediately preceding the week or month, as applicable, in which the related Constant Maturity Treasury Rate determination date occurs. - If the rate referred to above does not appear on Moneyline Telerate Page 7052, then the Treasury Rate will be the one-week or one-month, as specified in the applicable pricing supplement, average of the treasury constant maturity rate for the designated CMT maturity index for the week or month as applicable, preceding the Constant Maturity Treasury determination date as published in the relevant H.15(519) under the caption "Treasury Constant Maturities." - If the rate referred to above does not so appear in H.15(519), then the Treasury Rate will be the one-week or one-month, as specified in the applicable pricing supplement, average of the constant treasury maturity rate for the designated CMT maturity index as otherwise announced by the Federal Reserve Bank of New York for the week or month, as applicable, ended immediately preceding the week or month, as applicable, in which the Constant Maturity Treasury Rate determination date falls. (5) If fewer than three dealers selected by the calculation agent provide quotations as described in (3) above, the Treasury Rate determined as of the Constant Maturity Treasury Rate determination date will be the Treasury Rate in effect on such Constant Maturity Treasury Rate determination date. "Designated CMT Moneyline Telerate page" means the display on the Telerate Service, or any successor service on the page specified in the applicable pricing supplement, or any other page as may replace such page on that service, or any successor service, for the purpose of displaying Treasury Constant Maturities as reported in H.15(519). If no such page is specified in the applicable pricing supplement, the designated CMT Telerate page will be 7052, for the most recent week. "Designated CMT maturity index" means the original period to maturity of the U.S. Treasury securities, either one, two, three, five, seven, ten, twenty or thirty years, specified in the applicable pricing supplement for which the Treasury Rate will be calculated. If no such maturity is specified in the applicable pricing supplement, the designated CMT maturity index will be two years. The "Constant Maturity Treasury Rate determination date" will be the second business day prior to the interest reset date for the applicable interest reset period. The CMT Rate for a Treasury security maturity as published as of any business day is intended to be indicative of the yield of a U.S. Treasury security having as of that business day a remaining term to maturity equivalent to its maturity. The CMT Rate as of any business day is based upon an interpolation by the U.S. Treasury of the daily yield curve of outstanding Treasury securities. This yield curve, which relates the yield on a security to its time to maturity, is based on the over-the-counter market bid yields on S-19 actively traded Treasury securities. Such yields are calculated from composites of quotations reported by leading U.S. government securities dealers, which may include one or more of the calculation agents or other affiliates of Citigroup Global Markets Holdings. Certain constant maturity yield values are read from the yield curve. Interpolation from the yield curve provides a theoretical yield for a Treasury security having ten years to maturity, for example, even if no outstanding Treasury security has as of that date exactly ten years remaining to maturity. Prime Rate Notes. Prime Rate notes will bear interest at a rate equal to the Prime Rate and any spread or spread multiplier specified in the Prime Rate notes and the applicable pricing supplement. The calculation agent will determine the Prime Rate for each interest reset period on each Prime Rate determination date. The Prime Rate determination date is the second business day prior to the interest reset date for each interest reset period. The Prime Rate will be the rate made available and subsequently published on that date in H.15(519) under the heading "Bank Prime Loan." The following procedures will be followed if the Prime Rate cannot be determined as described above. - If the rate is not published prior to 3:00 P.M., New York City time, on the related calculation date, then the Prime Rate will be the rate on the Prime Rate determination date that is published in the H.15 Daily Update under the heading "Bank Prime Loan." - If the rate referred to above is not published prior to 3:00 P.M., New York City time, on the related calculation date, then the Prime Rate will be the arithmetic mean of the rates of interest that appear on the Reuters Screen USPRIME1 page as such bank's prime rate or base lending rate on the Prime Rate determination date. - If fewer than four such rates appear on the Reuters Screen USPRIME1 page, then the calculation agent will select three major banks in New York City. The Prime Rate will be the arithmetic mean of the prime rates quoted by those three banks on the basis of the actual number of days in the year divided by a 360-day year as of the close of business on the Prime Rate determination date. - If the banks that the calculation agent selects do not provide quotations as described above, then the Prime Rate will remain the same as the Prime Rate in effect on the Prime Rate determination date. "Reuters Screen USPRIME1 page" means the display designated as page "USPRIME1" on the Reuters Monitor Money Rates Service, or any successor service or page, for the purpose of displaying prime rates or base lending rates of major United States banks. Eleventh District Cost of Funds Rate Notes. Eleventh District Cost of Funds Rate notes will bear interest at the interest rates, calculated based on the Eleventh District Cost of Funds Rate and any spread and/or spread multiplier, specified in the Eleventh District Cost of Funds Rate notes and the applicable pricing supplement. The calculation agent will determine the Eleventh District Cost of Funds Rate on each Eleventh District Cost of Funds Rate determination date. The Eleventh District Cost of Funds Rate determination date is the last working day of the month immediately prior to each interest reset date for each interest reset period on which the Federal Home Loan Bank of San Francisco publishes the Eleventh District Cost of Funds Index. The Eleventh District Cost of Funds Rate will be the rate equal to the monthly weighted average cost of funds for the calendar month preceding such Eleventh District Cost of Funds Rate determination date as set forth under the caption "Eleventh District" on Moneyline Telerate (or any successor service) on page 7058. Such page will be deemed to include any successor page, determined by the calculation agent, as of 11:00 A.M., San Francisco time, on the Eleventh District Cost of Funds Rate determination date. S-20 The following procedures will be followed if the Eleventh District Cost of Funds Rate cannot be determined as described above. - If the rate does not appear on Telerate page 7058 on any related Eleventh District Cost of Funds Rate determination date, the Eleventh District Cost of Funds Rate for the Eleventh District Cost of Funds Rate determination date will be the Eleventh District Cost of Funds Rate Index. - If the FHLB of San Francisco fails to announce the Eleventh District Cost of Funds Rule Index on or prior to the Eleventh District Cost of Funds Rate determination date for the calendar month immediately preceding the date, then the Eleventh District Cost of Funds Rate for such date will be the Eleventh District Cost of Funds Rate in effect on the Eleventh District Cost of Funds Rate determination date. The "Eleventh District Cost of Funds Rate Index" will be the monthly weighted average cost of funds paid by member institutions of the Eleventh Federal Home Loan Bank District that the FHLB of San Francisco most recently announced as the cost of funds for the calendar month preceding the date of such announcement. EURIBOR Notes. Each EURIBOR note will bear interest for each interest reset period at an interest rate equal to EURIBOR and any spread or spread multiplier specified in the note and the applicable pricing supplement. The calculation agent will determine EURIBOR on each EURIBOR determination date. The EURIBOR determination date is the second TARGET business day prior to the interest reset date for each interest reset period. On a EURIBOR determination date, the calculation agent will determine EURIBOR for each interest reset period as follows. The calculation agent will determine the offered rates for deposits in euros for the period of the index maturity specified in the applicable pricing supplement, commencing on the interest reset date, which appears on page 248 on the Telerate Service or any successor service or any page that may replace page 248 on that service which is commonly referred to as "Telerate Page 248" as of 11:00 a.m., Brussels time, on that date. If EURIBOR cannot be determined on a EURIBOR determination date as described above, then the calculation agent will determine EURIBOR as follows. - The calculation agent will select four major banks in the Euro-zone interbank market. - The calculation agent will request that the principal Euro-zone offices of those four selected banks provide their offered quotations to prime banks in the Euro-zone interbank market at approximately 11:00 a.m., Brussels time, on the EURIBOR determination date. These quotations shall be for deposits in euros for the period of the specified index maturity, commencing on the interest reset date. Offered quotations must be based on a principal amount equal to at least U.S.$1,000,000 or the approximate equivalent in euros that is representative of a single transaction in such market at that time. (1) If two or more quotations are provided, EURIBOR for the interest reset period will be the arithmetic mean of those quotations. (2) If less than two quotations are provided, the calculation agent will select four major banks in the Euro-zone and follow the steps in the two bullet points below. - The calculation agent will then determine EURIBOR for the interest reset period as the arithmetic mean of rates quoted by those four major banks in the Euro-zone to leading European banks at approximately 11:00 a.m., Brussels time, on the EURIBOR determination date. The rates quoted will be for loans in euros, for the period of the specified index maturity, commencing on the interest reset date. Rates quoted must be based on a principal amount of S-21 at least U.S.$1,000,000 or the approximate equivalent in euros that is representative of a single transaction in the market at that time. - If the banks so selected by the calculation agent are not quoting rates as described above, EURIBOR for the interest reset period will be the same as for the immediately preceding interest reset period. If there was no preceding interest reset period, EURIBOR will be the initial interest rate. "Euro-zone" means the region comprised of member states of the European Union that adopted the single currency in accordance with the Treaty establishing the European Community, as amended by the Treaty on European Union. Inverse Floating Rate Notes. Any floating rate note may be designated in the applicable pricing supplement as an inverse floating rate note. In such an event, unless otherwise specified in the applicable pricing supplement, the interest rate on the floating rate note will be equal to: - in the case of the period, if any, commencing on the issue date, or the date on which the note otherwise begins to accrue interest if different from the issue date, up to the first interest reset date, a fixed rate of interest established by Citigroup Global Markets Holdings as described in the applicable pricing supplement; and - in the case of each period commencing on an interest reset date, a fixed rate of interest specified in the pricing supplement minus the interest rate determined based on the base rate as adjusted by any spread and/or spread multiplier. However, on any inverse floating rate note, the interest rate will not be less than zero. Floating/Fixed Rate Notes. The applicable pricing supplement may provide that a note will be a floating rate note for a specified portion of its term and a fixed rate note for the remainder of its term. In such an event, the interest rate on the note will be determined as if it were a floating rate note and a fixed rate note for each respective period, all as specified in the applicable pricing supplement. SUBSEQUENT INTEREST PERIODS The pricing supplement relating to each note will indicate whether Citigroup Global Markets Holdings has the option to reset the interest rate, spread, spread multiplier or method of calculation, as the case may be, for the note. If Citigroup Global Markets Holdings has the option to reset, the pricing supplement will also indicate the optional reset date or dates on which the interest rate, spread, spread multiplier or method of calculation, as the case may be, may be reset. Citigroup Global Markets Holdings shall notify the trustee whether or not it intends to exercise this option relating to a note at least 45 but not more than 60 days prior to an optional reset date for the note. Not later than 40 days prior to the optional reset date, the trustee will provide notice to the holder of the note, in accordance with "Notices" below, indicating whether Citigroup Global Markets Holdings has elected to reset the interest rate, spread, spread multiplier or method of calculation, as the case may be. If Citigroup Global Markets Holdings elects to reset the interest rate, spread, spread multiplier or method of calculation, as the case may be, the trustee will provide notice to the holder, in accordance with "Notices" below, indicating such new interest rate, spread, spread multiplier or method of calculation, as the case may be. The notice will also indicate any provisions for redemption during the subsequent interest period. The subsequent interest period is the period from the optional reset date to the next optional reset date or, if there is no next optional reset date, to the stated maturity of the note, including the date or dates on which or the period or periods during which, and the price or prices at which, a redemption may occur during a subsequent interest period. Upon the transmittal by the trustee of a reset notice to the holder of a note, the new interest rate or new spread or spread multiplier, and/or method of calculation, as the case may be, will take effect S-22 automatically. Except as modified by the reset notice and as described below, the note will have the same terms as prior to the transmittal of the reset notice. Despite the foregoing, not later than 20 days prior to an optional reset date for a note, Citigroup Global Markets Holdings may, at its option, revoke the interest rate, or the spread or spread multiplier, provided for in the reset notice relating to the optional reset date, and establish a higher interest rate, or a higher spread or spread multiplier, as applicable, for the subsequent interest period commencing on the optional reset date. Citigroup Global Markets Holdings can make such revocations by causing the trustee for such note to provide notice of the higher interest rate or higher spread or spread multiplier, as the case may be, in accordance with "Notices" below, to the holder of the note. The notice shall be irrevocable. All notes for which the interest rate or spread or spread multiplier is reset on an optional reset date will bear such higher interest rate, or higher spread or spread multiplier, as the case may be, whether or not tendered for repayment. The holder of a note will have the option to elect repayment of that note by Citigroup Global Markets Holdings on each optional reset date at a price equal to the principal amount of the note plus interest accrued to the optional reset date. In order for a note to be repaid on an optional reset date, the holder of the note must follow the procedures set forth below under "Optional Redemption, Repayment and Repurchase" for optional repayment. However, the period for delivery of the note or notification to the trustee for the note will be at least 25 but not more than 35 days prior to the optional reset date. Further, a holder who has tendered a note for repayment pursuant to a reset notice may, by written notice to the trustee for the note, revoke any tender for repayment until the close of business on the tenth day prior to the optional reset date. AMORTIZING NOTES Citigroup Global Markets Holdings may from time to time offer amortizing notes on which a portion or all of the principal amount is payable prior to stated maturity: - in accordance with a schedule; - by application of a formula; or - based on an index. Further information concerning additional terms and conditions of any amortizing notes, including terms for repayment of such notes, will be set forth in the applicable pricing supplement. INDEXED NOTES Citigroup Global Markets Holdings may from time to time offer indexed notes on which some or all interest payments, in the case of an indexed rate note, and/or the principal amount payable at stated maturity or earlier redemption or retirement, in the case of an indexed principal note, is determined based on: - the principal amount of the notes or, in the case of an indexed principal note, the amount designated in the applicable pricing supplement as the "face amount" of the indexed note; and - an index, which may be based on: (1) prices, changes in prices, or differences between prices, of one or more securities, currencies, intangibles, goods, articles or commodities; (2) the application of a formula; or (3) an index which shall be such other objective price, economic or other measures as are described in the applicable pricing supplement. S-23 A description of the index used in any determination of an interest or principal payment, and the method or formula by which interest or principal payments will be determined based on such index, will be set forth in the applicable pricing supplement. If a fixed rate note, floating rate note or indexed rate note is also an indexed principal note, the amount of any interest payment will be determined based on the face amount of that indexed note unless specified otherwise in the applicable pricing supplement. If an indexed note is also an indexed principal note, the principal amount payable at stated maturity or any earlier redemption or repayment of the indexed note may be different from the face amount. If a third party is appointed to calculate or announce the index for a particular indexed note, and the third party either (1) suspends the calculation or announcement of that index or (2) changes the basis upon which the index is calculated in a manner that is inconsistent with the applicable pricing supplement, then Citigroup Global Markets Holdings will select another third party to calculate or announce the index. Citigroup Global Markets Limited or another affiliate of Citigroup Global Markets Holdings may be either the original or successor third party selected by Citigroup Global Markets Holdings. If for any reason the index cannot be calculated on the same basis and subject to the same conditions and controls as applied to the original third party, then any indexed interest payments or any indexed principal amount of the indexed note will be calculated in the manner set forth in the applicable pricing supplement. Any determination by the selected third party will be binding on all parties, except in the case of an obvious error. Unless otherwise specified in the applicable pricing supplement, for the purpose of determining whether holders of the requisite principal amount of notes outstanding under the applicable indenture have made a demand or given a notice or waiver or taken any other action, the outstanding principal amount of indexed notes will be deemed to be the face amount stated on the notes. Unless otherwise specified in the applicable pricing supplement, in the event of an acceleration of the stated maturity of an indexed note, the principal amount payable to the holder of the note upon acceleration will be the principal amount determined based on the formula used to determine the principal amount of the note on the stated maturity of the note, as if the date of acceleration were the stated maturity. An investment in indexed notes has significant risks, including wide fluctuations in market value as well as in the amounts of payments due, that are not associated with a similar investment in a conventional debt security. These risks depend on a number of factors including supply and demand for the particular security, currency, commodity or other good or article to which the note is indexed and economic and political events over which Citigroup Global Markets Holdings has no control. See "Risk Factors -- Changes in the Value of Underlying Assets of Indexed Notes Could Result in a Substantial Loss to You" above for a discussion of these considerations. Fluctuations in the price of any particular security or commodity, in the rates of exchange between particular currencies or in particular indices that have occurred in the past are not necessarily indicative, however, of fluctuations in the price or rates of exchange that may occur during the term of any indexed notes. Accordingly, prospective investors should consult their own financial and legal advisors as to the risks of an investment in indexed notes. DUAL CURRENCY NOTES Citigroup Global Markets Holdings may from time to time offer dual currency notes on which Citigroup Global Markets Holdings has a one time option of making all payments of principal, any premium and interest on such notes which are issued on the same day and have the same terms, the payments on which would otherwise be made in the specified currency of those notes, in the optional payment currency specified in the applicable pricing supplement. This option will be exercisable in whole but not in part on an option election date, which will be any one of the dates specified in the applicable pricing supplement. Information as to the relative value of the specified currency compared to the optional payment currency will be set forth in the applicable pricing supplement. S-24 The pricing supplement for each issuance of dual currency notes will specify, among other things: - the specified currency; - the optional payment currency; and - the designated exchange rate. The designated exchange rate will be a fixed exchange rate used for converting amounts denominated in the specified currency into amounts denominated in the optional payment currency. The pricing supplement will also specify the option election dates and interest payment dates for the related issuance of dual currency notes. Each option election date will be a particular number of days before an interest payment date or stated maturity, as set forth in the applicable pricing supplement. Each option election date will be the date on which Citigroup Global Markets Holdings may select whether to make all scheduled payments due thereafter in the optional payment currency rather than in the specified currency. If Citigroup Global Markets Holdings makes such an election, the amount payable in the optional payment currency will be determined using the designated exchange rate specified in the applicable pricing supplement. If such an election is made, notice of the election will be provided in accordance with the terms of the applicable tranche of dual currency notes within two business days of the option election date. The notice will state (1) the first date, whether an interest payment date and/or stated maturity, on which scheduled payments in the optional payment currency will be made and (2) the designated exchange rate. Any such notice by Citigroup Global Markets Holdings, once given, may not be withdrawn. The equivalent value in the specified currency of payments made after such an election may be less, at the then current exchange rate, than if Citigroup Global Markets Holdings had made the payment in the specified currency. For United States federal income tax purposes, holders of dual currency notes may need to comply with rules which differ from the general rules applicable to holders of other types of notes offered by this prospectus supplement. The United States federal income tax consequences of the purchase, ownership and disposition of dual currency notes will be set forth in the applicable pricing supplement. RENEWABLE NOTES Citigroup Global Markets Holdings may from time to time offer renewable notes, which will mature on an initial maturity date. Such initial maturity date will be an interest payment date specified in the applicable pricing supplement occurring in, or prior to, the twelfth month following the original issue date of the notes, unless the term of all or any portion of any of the notes is renewed in accordance with the procedures described below. The term of a renewable note may be extended to the interest payment date occurring in the twelfth month, or, if a special election interval is specified in the applicable pricing supplement, the last month in a period equal to twice the special election interval elected by the holder after the renewal date. Such an extension may be made on the initial renewal date. That date will be the interest payment date occurring in the sixth month, unless a special election interval is specified in the applicable pricing supplement, prior to the initial maturity date of a renewable note and on the interest payment date occurring in each sixth month, or in the last month of each special election interval, after the initial renewal date which, together with the initial renewal date, constitutes a renewal date. If a holder does not elect to extend the term of any portion of the principal amount of a renewable note during the specified period prior to any renewal date, that portion will become due and payable on the new maturity date. Such new maturity date will be the interest payment date occurring in the sixth month, or the last month in the special election interval, after the renewal date. A holder of a renewable note may elect to renew the term of such renewable note, or if so specified in the applicable pricing supplement, any portion of the renewable note, by delivering a notice to that effect to the trustee or any duly appointed paying agent. This notice will be delivered not less than 15 nor more than 30 days prior to the renewal date, unless another period is specified in the applicable pricing S-25 supplement as the special election period. This election will be irrevocable and will be binding upon each subsequent holder of the renewable note. An election to renew the term of a renewable note may be exercised for less than the entire principal amount of the renewable note only if so specified in the applicable pricing supplement and only in such principal amount, or any integral multiple in excess of that amount, as is specified in the applicable pricing supplement. Despite the foregoing, the term of the renewable notes may not be extended beyond the stated maturity specified for the renewable notes in the applicable pricing supplement. If the holder does not elect to renew the term, a renewable note must be presented to any duly appointed paying agent. If the renewable note is a certificate issued in definitive form, it must be presented to the trustee as soon as practicable following receipt of the renewable note. Such duly appointed paying agent will issue in exchange for the note, in the name of the holder, a note. The note will be in a principal amount equal to the principal amount of the exchanged renewable note for which no election to renew such term was exercised, with terms identical to those specified on the renewable note. However, the note will have a fixed, nonrenewable stated maturity on the new maturity date. If an election to renew is made for less than the full principal amount of a holder's renewable note, such duly appointed paying agent will issue a replacement renewable note in exchange for that note in the name of the holder. The replacement renewable note will be in a principal amount equal to the principal amount elected to be renewed of the exchanged renewable note, with terms otherwise identical to the exchanged renewable note. EXTENSION OF MATURITY The pricing supplement relating to each note will indicate whether Citigroup Global Markets Holdings has the option to extend the stated maturity of that note for an extension period. Such an extension period is one or more periods of one to five whole years, up to but not beyond the final maturity date set forth in the pricing supplement. Citigroup Global Markets Holdings may exercise its option for a note by notifying the trustee for that note at least 45 but not more than 60 days prior to the original stated maturity of the note. Not later than 40 days prior to the original stated maturity of the note, the trustee for the note will provide notice of the extension to the holder of the note, in accordance with "Notices" below. The extension notice will set forth: - the election of Citigroup Global Markets Holdings to extend the stated maturity of the note; - the new stated maturity; - in the case of a fixed rate note, the interest rate applicable to the extension period; - in the case of a floating rate note, the spread, spread multiplier or method of calculation applicable to the extension period; and - any provisions for redemption during the extension period, including the date or dates on which, or the period or periods during which, and the price or prices at which, a redemption may occur during the extension period. Upon the provision by such trustee of an extension notice in accordance with "Notices" below, the stated maturity of the note will be extended automatically, and, except as modified by the extension notice and as described in the next paragraph, the note will have the same terms as prior to the extension notice. Despite the foregoing, not later than 20 days prior to the original stated maturity of the note, Citigroup Global Markets Holdings may, at its option, revoke the interest rate, or the spread or spread multiplier, as the case may be, provided for in the extension notice for the note and establish for the extension period a higher interest rate, in the case of a fixed rate note, or a higher spread or spread multiplier, in the case of a floating rate note. S-26 Citigroup Global Markets Holdings may so act by causing the trustee for the note to provide notice of the higher interest rate or higher spread or spread multiplier, as the case may be, in accordance with "Notices" below, to the holder of the note. The notice will be irrevocable. All notes for which the stated maturity is extended will bear the higher interest rate, in the case of fixed rate notes, or higher spread or spread multiplier, in the case of floating rate notes, for the extension period, whether or not tendered for repayment. If Citigroup Global Markets Holdings extends the stated maturity of a note, the holder of the note will have the option to elect repayment of the note by Citigroup Global Markets Holdings on the original stated maturity at a price equal to the principal amount of the note, plus interest accrued to that date. In order for a note to be repaid on the old stated maturity once Citigroup Global Markets Holdings has extended its stated maturity, the holder of such note must follow the procedures set forth below under "Optional Redemption, Repayment and Repurchase" for optional repayment. The period for delivery of such note or notification to the trustee for the note will be at least 25 but not more than 35 days prior to the old stated maturity. A holder who has tendered a note for repayment after an extension notice may give written notice to the trustee for the note to revoke any tender for repayment until the close of business on the tenth day before the original stated maturity. COMBINATION OF PROVISIONS If so specified in the applicable pricing supplement, any note may be required to comply with all of the provisions, or any combination of the provisions, described above under "Subsequent Interest Periods," "Extension of Maturity" and "Renewable Notes." OPTIONAL REDEMPTION, REPAYMENT AND REPURCHASE The pricing supplement relating to each note will indicate whether the note can be redeemed at the option of Citigroup Global Markets Holdings, in whole or in part prior to its stated maturity (other than as provided under "Tax Redemption" and "Special Tax Redemption" below). The applicable pricing supplement will also indicate (1) the optional redemption date or dates on which the note may be redeemed and (2) the redemption price at which, together with accrued interest to such optional redemption date, the note may be redeemed on each optional redemption date. Unless otherwise specified in the applicable pricing supplement, at least 30 days prior to the date of redemption, the trustee will provide notice of redemption to the holder of the note, in accordance with "Notices" below. Unless otherwise specified in the applicable pricing supplement, Citigroup Global Markets Holdings may exercise this option relating to a redemption of a note in part only by notifying the trustee for the note at least 45 days prior to any optional redemption date. In the event of redemption of a note in part only, a new note or notes for the unredeemed portion of the note or notes will be issued to the holder of the note or notes upon the cancellation of such note or notes. The notes, other than amortizing notes, may not be redeemed. The redemption of any subordinated note that is included in Citigroup Inc.'s capital may be subject to consultation with the Federal Reserve, which may not acquiesce in the redemption of such note unless it is satisfied that the capital position of Citigroup Inc. will be adequate after the proposed redemption. The pricing supplement relating to each note will also indicate whether the holder of that note will have the option to elect repayment of the note by Citigroup Global Markets Holdings prior to its stated maturity. If so, the pricing supplement will specify (1) the optional repayment date or dates on which the note may be repaid and (2) the optional repayment price. The optional repayment price is the price at which, together with accrued interest to such optional repayment date, the note may be repaid on each optional repayment date. Notes that are to be repaid prior to the stated maturity date must be presented for payment together with all unmatured coupons, if any, appertaining thereto, failing which the amount of any missing unmatured coupons will be reduced from the sum due for payment. In order for a note to be repaid, the principal paying agent for the note must receive the note at least 30 but not more than 45 days prior to an optional repayment date. Any tender of a note by the holder for repayment will be irrevocable. The repayment option may be exercised by the holder of a note for less S-27 than the entire principal amount of the note, provided, that the principal amount of the note remaining outstanding after repayment is an authorized denomination. Upon such partial repayment, the note will be canceled and a new note or notes for the remaining principal amount will be issued in the name of the holder of the repaid note. If a note is represented by a global security, the applicable depositary will be the holder of the note and, therefore, will be the only entity that can exercise a right to repayment. In order to ensure that the applicable depositary will timely exercise a right to repayment relating to a particular note, the beneficial owner of the note must instruct the broker or other direct or indirect participant through which it holds an interest in the note to notify the applicable depositary of its desire to exercise a right to repayment. Different firms have different cut-off times for accepting instructions from their customers. Accordingly, each beneficial owner should consult the broker or other direct or indirect participant through which it holds an interest in a note in order to ascertain the cut-off time by which such an instruction must be given in order for timely notice to be delivered to the applicable depositary. Except in the case of an optional redemption by Citigroup Global Markets Holdings at a stated redemption price provided for in the applicable pricing supplement, if Citigroup Global Markets Holdings redeems or repays a note that is an original issue discount note other than an indexed note prior to its stated maturity, then Citigroup Global Markets Holdings will pay the amortized face amount of the note as of the date of redemption or repayment regardless of anything else stated in this prospectus supplement. The amortized face amount of a note on any date means the amount equal to: - the issue price set forth in the applicable pricing supplement plus - that portion of the difference between the issue price and the stated principal amount of the note that has accrued by that date at (1) the bond yield to maturity set forth on the face of the applicable pricing supplement, or (2) if so specified in the applicable pricing supplement, the bond yield to call set forth on the face of the note. These computations will be made in accordance with generally accepted United States bond yield computation principles. However, the amortized face amount of a note will never exceed its stated principal amount. The bond yield to call listed in a pricing supplement will be computed on the basis of: - the first occurring optional redemption date with respect to the note; and - the amount payable on the optional redemption date. In the event that any note is not redeemed on the first occurring optional redemption date, the bond yield to call that applies to the note will be recomputed on the optional redemption date on the basis of (1) the next occurring optional redemption date and (2) the amount payable on such optional redemption date. The bond yield to call will continue to be so recomputed on each succeeding optional redemption date until the note is so redeemed. Citigroup Global Markets Holdings may at any time purchase notes at any price in the open market or otherwise. Notes so purchased by Citigroup Global Markets Holdings may, at the discretion of Citigroup Global Markets Holdings, be held, resold (in which case Citigroup Global Markets Holdings will comply with applicable selling restrictions contained in the applicable United States Treasury regulations as described herein) or surrendered to the trustee for those notes for cancellation (together with any unmatured coupons attached or otherwise purchased). S-28 OTHER PROVISIONS The terms in the applicable pricing supplement may modify any provisions relating to: - the determination of an interest rate basis; - the specification of an interest rate basis; - calculation of the interest rate applicable to, or the principal payable at maturity on, any note; - interest payment dates; or - any other related matters. TAX REDEMPTION Citigroup Global Markets Holdings, at its option, may redeem the notes in whole, but not in part, at any time on giving at least 30 but not more than 60 days' notice in accordance with "Notices" below (which notice shall be irrevocable), at the respective redemption prices of the notes, if Citigroup Global Markets Holdings has or will become obligated to pay additional interest on the notes as described under "Payment of Additional Interest" below as a result of any change in, or amendment to, the laws (or any regulations or rulings promulgated thereunder) of the United States or any political subdivision or taxing authority thereof or therein, or any change in the application or official interpretation of such laws, regulations or rulings, which change or amendment becomes effective on or after the respective original issuance dates of the notes, and such obligation cannot be avoided by Citigroup Global Markets Holdings taking reasonable measures available to it; provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which Citigroup Global Markets Holdings would be obligated to pay additional interest were a payment in respect of the notes then due. Prior to the publication of any notice of redemption pursuant to this paragraph, Citigroup Global Markets Holdings shall deliver to the trustee for the notes to be redeemed a certificate stating that Citigroup Global Markets Holdings is entitled to effect redemption and setting forth a statement of facts showing that the conditions precedent to the right of Citigroup Global Markets Holdings so to redeem have occurred, and an opinion of independent counsel to the effect that Citigroup Global Markets Holdings has or will become obligated to pay additional interest as a result of the change or amendment. PAYMENT OF ADDITIONAL INTEREST Citigroup Global Markets Holdings will, subject to the exceptions and limitations set forth below, pay as additional interest to the holder of a note or coupon that is a United States Alien (as defined below) any amounts as may be necessary so that every net payment on such note or coupon, after deduction or withholding for or on account of any present or future tax, assessment or other governmental charge imposed upon or as a result of such payment by the United States (or any political subdivision or taxing authority thereof or therein), will not be less than the amount provided in the note or coupon to be then due and payable. However, Citigroup Global Markets Holdings will not be required to make any payment of additional interest to the holder for or on account of: - any tax, assessment or other governmental charge that would not have been imposed but for (i) the existence of any present or former connection between such holder (or between a fiduciary, settlor or beneficiary of, or a person holding a power over, such holder, if such holder is an estate or a trust, or a member or shareholder of such holder, if such holder is a partnership or a corporation) and the United States, including, without limitation, such holder (or such fiduciary, settlor, beneficiary, person holding a power, member or shareholder) being or having been a citizen or resident thereof or being or having been engaged in trade or business or present therein or having or having had a permanent establishment therein or (ii) such holder's past or present status as a passive foreign investment company, a personal holding company, a foreign personal holding company, a controlled foreign corporation for United States tax purposes or a private foundation or S-29 other tax-exempt organization with respect to the United States or as a corporation that accumulates earnings to avoid United States federal income tax; - any estate, inheritance, gift, sales, transfer or personal property tax or any similar tax, assessment or other governmental charge; - any tax, assessment or other governmental charge that would not have been imposed but for the presentation by the holder of a note or coupon for payment more than 15 days after the date on which such payment became due and payable or on which payment thereof was duly provided for, whichever occurred later; - any tax, assessment or other governmental charge that is payable otherwise than by deduction or withholding from a payment on a note or coupon; - any tax, assessment or other governmental charge required to be deducted or withheld by any paying agent from a payment on a note or coupon, if such payment can be made without such deduction or withholding by any other paying agent; or - any tax, assessment or other governmental charge imposed on a holder that actually constructively owns ten percent or more of the combined voting power of all classes of stock of Citigroup Global Markets Holdings (taking into account applicable attribution of ownership rules under Section 871(h)(3) of the Internal Revenue Code of 1986, as amended, or is a controlled foreign corporation related to Citigroup Global Markets Holdings through stock ownership; nor shall such additional interest be paid with respect to a payment on a note or coupon to a holder that is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner would not have been entitled to the additional interest had such beneficiary, settlor, member or beneficial owner been the holder of such note or coupon. "United States Alien" means any person who, for United States federal income tax purposes, is a foreign corporation, a nonresident alien individual, a nonresident alien fiduciary of a foreign estate or trust, or a foreign partnership one or more of the members of which is, for United States federal income tax purposes, a foreign corporation, a nonresident alien individual or a nonresident alien fiduciary of a foreign estate or trust. SPECIAL TAX REDEMPTION If Citigroup Global Markets Holdings shall determine that any payment made outside the United States by Citigroup Global Markets Holdings or any of its paying agents in respect of any note that is not a floating rate note or coupon appertaining thereto would, under any present or future laws or regulations of the United States, be subject to any certification, documentation, information or other reporting requirement of any kind, the effect of which requirement is the disclosure to Citigroup Global Markets Holdings, any paying agent or any governmental authority of the nationality, residence or identity of a beneficial owner that is a United States Alien (other than such a requirement (a) that would not be applicable to a payment made by Citigroup Global Markets Holdings or any one of its paying agents (i) directly to the beneficial owner or (ii) to a custodian, nominee or other agent of the beneficial owner or (b) that can be satisfied by such custodian, nominee or other agent certifying to the effect that the beneficial owner is a United States Alien; provided that, in any case referred to in clause (a)(ii) or (b), payment by the custodian, nominee, or agent to the beneficial owner is not otherwise subject to any such requirement), then Citigroup Global Markets Holdings shall elect either (x) to redeem such note in whole, but not in part, at its redemption price, or (y) if the conditions described in the next succeeding paragraph are satisfied, to pay the additional interest specified in such paragraph. Citigroup Global Markets Holdings shall make such determination as soon as practicable and publish prompt notice thereof stating the effective date of such certification, documentation, information or other reporting requirement, whether Citigroup Global Markets Holdings elects to redeem the notes or to pay the additional interest S-30 specified in the next succeeding paragraph and (if applicable) the last date by which the redemption of the notes must take place. If the notes are to be redeemed as described in this paragraph, the redemption shall take place on such date, not later than one year after the publication of the determination notice, as Citigroup Global Markets Holdings shall specify by notice given to the trustee for the notes to be redeemed at least 60 days before the redemption date. Notice of such redemption shall be given to the holders of the notes at least 30 but not more than 60 days prior to the redemption date. Notwithstanding the foregoing, Citigroup Global Markets Holdings shall not so redeem the notes if Citigroup Global Markets Holdings shall subsequently determine, at least 30 days prior to the redemption date, that subsequent payments on the notes would not be subject to any such certification, documentation, information or other reporting requirement, in which case Citigroup Global Markets Holdings shall publish prompt notice of such subsequent determination and any earlier redemption notice given shall be revoked and of no further effect. Prior to the publication of any determination notice, Citigroup Global Markets Holdings shall deliver to the trustee for the notes to be redeemed a certificate stating that Citigroup Global Markets Holdings is obligated to make such determination and setting forth a statement of facts showing that the conditions precedent to the obligation of Citigroup Global Markets Holdings to redeem the notes or to pay the additional interest specified in the next succeeding paragraph have occurred, and an opinion of independent counsel to the effect that such conditions have occurred. If and so long as the certification, documentation, information or other reporting requirement referred to in the preceding paragraph would be fully satisfied by payment of a backup withholding tax or similar charge, Citigroup Global Markets Holdings may elect to pay as additional interest such amounts as may be necessary so that every net payment made outside the United States following the effective date of such requirement by Citigroup Global Markets Holdings or any of its paying agents in respect of any such notes of which the beneficial owner is a United States Alien (but without any requirement that the nationality, residence or identity of such beneficial owner be disclosed to Citigroup Global Markets Holdings, any paying agent or any governmental authority), after deduction or withholding for or on account of such backup withholding tax or similar charge (other than a backup withholding tax or similar charge that (i) would not be applicable in the circumstances referred to in the parenthetical clause of the first sentence of the third preceding paragraph or (ii) is imposed as a result of presentation of such notes for payment more than 15 days after the date on which such payment became due and payable or on which payment thereof was duly provided for, whichever occurred later), will not be less than the amount provided in such notes to be then due and payable. If Citigroup Global Markets Holdings elects to pay additional interest, then Citigroup Global Markets Holdings shall have the right thereafter to redeem the notes at any time in whole, but not in part, at the redemption price, subject to the provisions described above. If Citigroup Global Markets Holdings elects to pay additional interest and the condition specified above should no longer be satisfied, then Citigroup Global Markets Holdings shall redeem such notes in whole, but not in part, at the redemption price thereof, subject to the provisions of this section. Any such redemption payments made by Citigroup Global Markets Holdings shall be subject to the continuing obligation of Citigroup Global Markets Holdings to pay additional interest as described above. DEFEASANCE The defeasance provisions described in the prospectus will not be applicable to the notes except as set forth in the applicable pricing supplement. REPLACEMENT OF NOTES AND COUPONS If an individual note or coupon is mutilated, destroyed, stolen or lost it may be replaced at the specified office of the principal paying agent for such note in London or, with respect to any notes listed on the Luxembourg Stock Exchange, at the specified office of the paying agent in Luxembourg, upon S-31 payment by the claimant of such expenses as may be incurred in connection therewith and, in the case of destruction, theft or loss, on such terms as to evidence and indemnity as Citigroup Global Markets Holdings or the trustee for such note may reasonably require. Mutilated or defaced notes or coupons must be surrendered before replacements will be issued. NOTICES All notices to holders of notes will be deemed to have been duly given if published on two separate Business Days in a leading London daily newspaper, which is expected to be the Financial Times, and, with respect to any notes listed on the Luxembourg Stock Exchange, if the rules of such exchange so require, in Luxembourg in an authorized newspaper in Luxembourg, which is expected to be the Luxemburger Wort. Any notice shall be deemed to have been given on the date of first publication. UNCLAIMED MONIES All monies paid by Citigroup Global Markets Holdings to a trustee or a paying agent for the payment of principal of or any premium or interest on any note or for the payment of any coupon which remain unclaimed at the end of two years after such payments shall have become due and payable will be repaid to Citigroup Global Markets Holdings, at its written request, and the holder of such note or coupon will thereafter look only to Citigroup Global Markets Holdings for payment, such payment to be made only outside the United States. S-32 CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS The following is a summary of the material United States federal income tax considerations that may be relevant to a holder of a note. The summary does not address all of the tax consideration which might be relevant to such holders. Therefore, holders should consult their tax advisors in determining the tax consequences to them in holding notes, including the application to their particular situation of the United States federal income tax considerations discussed below, as well as the application of state, local, foreign or other tax law. Under current United States federal income tax law: - payment on a note or coupon by Citigroup Global Markets Holdings or any paying agent to a holder that is a United States Alien will not be subject to withholding of United States federal income tax provided that, with respect to payments of interest, including original issue discount, the holder does not actually or constructively own 10 percent or more of the combined voting power of all classes of stock of Citigroup Global Markets Holdings (taking into account the applicable attribution of ownership rules under Section 871(h)(3) of the Internal Revenue Code) and is not a controlled foreign corporation related to Citigroup Global Markets Holdings through stock ownership; - a holder of a note or coupon that is a United States Alien will not be subject to United States federal income tax on gain realized on the sale, exchange or redemption of such note or coupon, provided that such holder does not have a connection with or status with respect to the United States described under "Payment of Additional Interest"; and - a beneficial owner of a note or coupon that is a United States Alien will not be required to disclose its nationality, residence or identity to Citigroup Global Markets Holdings, a paying agent (acting in its capacity as such) or any United States governmental authority in order to receive payment on such note or coupon from Citigroup Global Markets Holdings or a paying agent outside the United States (although a beneficial owner of an interest in a temporary global security will be required to provide a certificate of non-U.S. beneficial ownership to Euroclear or Clearstream in order to exchange such interest or to receive interest payments with respect thereto, as described in "Description of Notes -- Payment of Principal and Interest" above). Special tax considerations may apply to certain indexed notes. Any such considerations will be described in the applicable pricing supplement. United States information reporting requirements and backup withholding tax will not apply to payments on a note or coupon made outside the United States by Citigroup Global Markets Holdings or any paying agent (acting in its capacity as such) to a holder that is a United States Alien. Information reporting requirements and backup withholding tax also will not apply to any payment on a note or coupon outside the United States by a foreign office of a custodian, nominee or other agent of the beneficial owner of such note or coupon, provided that such custodian, nominee or agent (i) is not a U.S. Person, (ii) derives less than 50% of its gross income for certain periods from the conduct of a trade or business in the United States, (iii) is not a controlled foreign corporation as to the United States and (iv) is not a foreign partnership that at any time during its taxable year is 50% or more (by income or capital interest) owned by U.S. persons or is engaged in the conduct of a U.S. trade or business (a person described in (i), (ii), (iii) and (iv) being hereinafter referred to as a "foreign controlled person"). Payment in respect of a note or coupon outside the United States to the beneficial owner thereof by a foreign office of any custodian, nominee or agent that is not a foreign controlled person will not be subject to backup withholding tax, but will be subject to information reporting requirements unless such custodian, nominee or agent has documentary evidence in its records that the beneficial owner that is a United States Alien or the beneficial owner otherwise establishes an exemption. Information reporting requirements and backup withholding tax will not apply to any payment of the proceeds of the sale of a note or coupon effected outside the United States by a foreign office of a "broker" (as defined in applicable Treasury regulations), provided that such broker is a foreign controlled S-33 person. Payment of the proceeds of the sale of a note or coupon effected outside the United States by a foreign office of any broker that is not a foreign controlled person will not be subject to backup withholding tax, but will be subject to information reporting requirements unless such broker has documentary evidence in its records that the beneficial owner is a United States Alien and certain other conditions are met, or the beneficial owner otherwise establishes an exemption. For purposes of applying the rules set forth under this heading "CERTAIN FEDERAL UNITED STATES INCOME TAX CONSIDERATIONS" to an entity that is treated as fiscally transparent (e.g., a partnership) for U.S. federal income tax purposes, the beneficial owner means each of the ultimate beneficial owners of the entity. EUROPEAN UNION SAVINGS DIRECTIVE The European Union has adopted a directive regarding the taxation of savings income. Subject to a number of important conditions being met, it is proposed that member states will be required from July 1, 2005 to provide to the tax authorities of other member states details of payments of interest and other similar income paid by a person to an individual in another member state, except that Austria, Belgium and Luxembourg will instead impose a withholding system for a transitional period unless during such period they elect otherwise. S-34 PLAN OF DISTRIBUTION The notes are being offered on a continuous basis by Citigroup Global Markets Holdings through Citigroup Global Markets Limited, and/or other broker-dealer subsidiaries or affiliates of Citigroup Global Markets Holdings, as agents. The agents have agreed to use their reasonable efforts to solicit orders to purchase notes. The agents and Citigroup Global Markets Holdings will sign an agency agreement. A form of agency agreement has been filed as an exhibit to the registration statement of which this prospectus supplement forms a part. Citigroup Global Markets Holdings will have the sole right to accept orders to purchase notes and may reject proposed purchases in whole or in part. The agents will have the right to reject any proposed purchase in whole or in part. Citigroup Global Markets Holdings reserves the right to withdraw, cancel or modify the offer made by this prospectus supplement, the accompanying prospectus or any pricing supplement without notice. The following table summarizes the aggregate commissions or discounts payable in connection with offerings of the notes. Commissions and discounts will vary depending upon the stated maturity of the notes.
PUBLIC OFFERING AGENTS' DISCOUNTS PROCEEDS, BEFORE EXPENSES, TO PRICE AND COMMISSIONS CITIGROUP GLOBAL MARKETS HOLDINGS -------- ----------------- --------------------------------- Principal Amount........ $10,945,831,296 $2,189,166-$547,291,565 $10,943,642,130-$10,398,539,731 Total................... 100% 0.02%-5.00% 99.98%-95.00%
Citigroup Global Markets Holdings may also sell notes at a discount to the agents for their own account or for resale to one or more purchasers at varying prices related to prevailing market prices or at a fixed public offering price. After any initial public offering of notes to be resold to purchasers at a fixed public offering price, the public offering price and any concession or discount may be changed. In addition, the agents may offer and sell notes purchased by them as principal to other dealers. These notes may be sold at a discount which, unless otherwise specified in the applicable pricing supplement, will not exceed the discount to be received by the agents from Citigroup Global Markets Holdings. Unless otherwise specified in the applicable pricing supplement, any note purchased by an agent as principal will be purchased at 100% of the principal amount or face amount less a percentage equal to the commission applicable to an agency sale of a note of identical maturity. Citigroup Global Markets Holdings reserves the right to sell notes directly to investors on its own behalf and to enter into agreements similar to the distribution agreement with other parties. No commission will be payable nor will a discount be allowed on any sales made directly by Citigroup Global Markets Holdings. In compliance with United States Federal income tax laws and regulations, Citigroup Global Markets Holdings and the agents have agreed that in connection with the original issuance of any note and during the period ending 40 days after the original issue date of such note they will not offer, sell or deliver such note, directly or indirectly, to a U.S. person or to any person within the United States and its possessions, except to the extent permitted under U.S. Treasury regulations. Under those regulations, notes may be offered and sold during that period to international organizations, to foreign central banks and to foreign branches of U.S. financial institutions that satisfy requirements prescribed by the regulations. Confirmations sent by the agent in connection with sales of notes need not contain certain purchaser representations. Each agent will agree that: - it has not offered or sold and, prior to the expiration of the period of six months from the date of issue of any notes having a maturity of one year or greater, will not offer or sell any notes to persons in the United Kingdom, except to those persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments, as principal or agent, for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom for purposes of the Public Offers of Securities Regulations 1995; S-35 - it has complied and will comply with all applicable provisions of the Financial Services and Markets Act 2000 ("FSMA") with respect to anything done by it in relation to the notes in, from or otherwise involving the United Kingdom; - it has only communicated or caused to be communicated and it will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of FSMA) received by it in connection with the issue or sale of the notes in circumstances in which Section 21(1) of FSMA does not apply to Citigroup Global Markets Holdings; - it will not offer or sell any notes directly or indirectly in Japan or to, or for the benefit of, any Japanese person or to others, for re-offering or re-sale directly or indirectly in Japan or to any Japanese person except under circumstances which will result in compliance with all applicable laws, regulations and guidelines promulgated by the relevant governmental and regulatory authorities in effect at the relevant time. For purposes of this paragraph, "Japanese person" means any person resident in Japan, including any corporation or other entity organized under the laws of Japan. Unless notes are issued upon the reopening of a prior series, no note will have an established trading market when issued. Unless otherwise specified in the applicable pricing supplement, the notes will not be listed on any securities exchange. The agents may make a market in the notes, but the agents are not obligated to do so. The agents may discontinue any market-making at any time without notice, at their sole discretion. There can be no assurance of the existence or liquidity of a secondary market for any notes, or that the maximum amount of notes will be sold. In addition to the notes being offered through the agents as described herein, securities in registered form that may have terms identical or similar to the terms of the notes may be concurrently offered by Citigroup Global Markets Holdings on a continuous basis in the United States by one or more broker-dealer subsidiaries or affiliates of Citigroup Global Markets Holdings. Such subsidiaries or affiliates may also purchase the securities in registered form as principal for their own account or for resale. Any securities so offered and sold will reduce correspondingly the maximum aggregate principal amount of notes that may be offered by this prospectus supplement and the accompanying prospectus. Citigroup Global Markets Holdings estimates that its total expenses for the offering, excluding underwriting commissions or discounts, will be approximately $5,364,000. An agent, whether acting as agent or principal, may be deemed to be an underwriter within the meaning of the U.S. Securities Act of 1933. Citigroup Global Markets Holdings has agreed to indemnify the agents against liabilities relating to material misstatements and omissions, or to contribute to payments that the agents may be required to make relating to these liabilities. Citigroup Global Markets Holdings will reimburse the agents for customary legal and other expenses incurred by them in connection with the offer and sale of the notes. Unless otherwise specified in the applicable pricing supplement, payment of the purchase price of the notes will be required to be made in immediately available funds in New York City on the date of settlement. Concurrently with the offering of notes through the agents as described in this prospectus supplement, Citigroup Global Markets Holdings may issue other securities under the indentures referred to in the prospectus. Each of the agents is a subsidiary or affiliate of Citigroup Global Markets Holdings. The participation of each agent in the offerings of the notes will conform with the requirements set forth in Rule 2720 of the Conduct Rules of the NASD. This prospectus supplement, the accompanying prospectus and the related pricing supplement may be used by the agents or other subsidiaries or affiliates of Citigroup Global Markets Holdings in connection S-36 with offers and sales of the notes offered by this prospectus supplement in market-making transactions at negotiated prices related to prevailing market prices at the time of sale. The agents or these other subsidiaries or affiliates may act as principal or agent in such transactions. ERISA MATTERS Certain provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") and the Internal Revenue Code of 1986, as amended (the "Code"), prohibit employee benefit plans (as defined in Section 3(3) of ERISA) that are subject to Title I of ERISA, plans described in Section 4975(e)(1) of the Code (including, without limitation, retirement accounts and Keogh Plans), and entities whose underlying assets include plan assets by reason of a plan's investment in such entities (including, without limitation, as applicable, insurance company general accounts), from engaging in certain transactions involving "plan assets" with parties that are "parties in interest" under ERISA or "disqualified persons" under the Code with respect to the plan or entity. Governmental and other plans that are not subject to ERISA or to the Code may be subject to similar restrictions under state, federal or local law. The notes may not be purchased, held or disposed of by any plan or any other person investing "plan assets" of any plan that is subject to the prohibited transaction rules of ERISA or Section 4975 of the Code or other similar law, unless one of the following Prohibited Transaction Class Exemptions ("PTCE") issued by the Department of Labor or a similar exemption or exception applies to such purchase, holding and disposition: - PTCE 96-23 for transactions determined by in-house asset managers, - PTCE 95-60 for transactions involving insurance company general accounts, - PTCE 91-38 for transactions involving bank collective investment funds, - PTCE 90-1 for transactions involving insurance company separate accounts, or - PTCE 84-14 for transactions determined by independent qualified professional asset managers. Any purchaser of the notes or any interest therein will be deemed to have represented and warranted to Citigroup Global Markets Holdings on each day including the date of its purchase of the notes through and including the date of disposition of such notes that either: (a) it is not a plan subject to Title I of ERISA or Section 4975 of the Code and is not purchasing such notes or interest therein on behalf of, or with "plan assets" of, any such plan; (b) its purchase, holding and disposition of such notes are not and will not be prohibited because they are exempted by one or more of the following prohibited transaction exemptions: PTCE 96-23, 95-60, 91-38, 90-1 or 84-14; or (c) it is a governmental plan (as defined in section 3 of ERISA) or other plan that is not subject to the provisions of Title I of ERISA or Section 4975 of the Code and its purchase, holding and disposition of such notes are not otherwise prohibited. Due to the complexity of these rules and the penalties imposed upon persons involved in prohibited transactions, it is important that any person considering the purchase of the notes with plan assets consult with its counsel regarding the consequences under ERISA and the Code, or other similar law, of the acquisition and ownership of the notes and the availability of exemptive relief under the class exemptions listed above. S-37 LEGAL MATTERS Edward F. Greene, Esq., General Counsel of Citigroup Global Markets Holdings, 388 Greenwich Street, New York, New York 10013, will act as legal counsel to Citigroup Global Markets Holdings. Mr. Greene beneficially owns, or has rights to acquire under employee benefit plans, an aggregate of less than one percent of the common stock of Citigroup Inc. Cleary, Gottlieb, Steen & Hamilton, New York, New York, will act as legal counsel for the agents. Cleary, Gottlieb, Steen & Hamilton has from time to time acted as counsel for Citigroup Global Markets Holdings and its subsidiaries and affiliates and may do so in the future. GENERAL INFORMATION Application may be made to list certain series of the notes on the Luxembourg Stock Exchange. In connection with such listing, the certificate of incorporation and the by-laws of Citigroup Global Markets Holdings and a legal notice relating to the issuance of the notes will be deposited prior to listing with Registre de Commerce et des Societes a Luxembourg where copies thereof may be obtained. You may request copies of these documents together with the pricing supplements for such series of notes, this prospectus supplement, the accompanying prospectus, the underwriting agreement, the indenture for such series of notes, the selling agency agreement and Citigroup Global Markets Holdings' current annual and quarterly reports, as well as all other documents incorporated by reference in this prospectus supplement, including future annual and quarterly reports, so long as any such series of notes is outstanding. You can also request copies (free of charge) of (1) this prospectus supplement, the accompanying prospectus and the indenture, and (2) Citigroup's annual, quarterly and current reports, as well as other documents incorporated by reference in this prospectus supplement, including future annual, quarterly and current reports, by following the directions under "Where You Can Find More Information" on page 5 of the accompanying prospectus. These documents, including Citigroup's Global Markets Holdings' annual, quarterly and current reports for the most recent two years and the documents mentioned on page 5 of the accompanying prospectus, will also be made available (free of charge) at the main office of Dexia Banque Internationale a Luxembourg in Luxembourg. As of the date of this prospectus supplement, there has been no material adverse change in the financial condition of Citigroup Global Markets Holdings since the date of the latest audited financial statements contained or incorporated by reference in the accompanying prospectus. Except as otherwise disclosed or incorporated by reference herein, neither Citigroup Global Markets Holdings nor any of its subsidiaries is involved in litigation, arbitration or administrative proceedings relating to claims or amounts that are material in the context of the issue of the notes. Citigroup Global Markets Holdings is not aware of any such litigation, arbitration or administrative proceedings pending or threatened. Citigroup Global Markets Holdings accepts responsibility for the information contained in this prospectus supplement and the accompanying pricing supplement and prospectus. Resolutions relating to the issue and sale of the notes were adopted by the board of directors of Citigroup Global Markets Holdings on April 30, 2004. The notes have been accepted for clearance through Euroclear and Clearstream. Each pricing supplement will contain the following information in respect of the issue of the notes to which it relates: (i) Principal Amount or Face Amount (ii) Issue Price (iii) Proceeds to Citigroup Global Markets Holdings on original issuance (iv) Commission or Discount on original issuance S-38 (v) Citigroup Global Markets Limited's capacity on original issuance (vi) Original Issue Date (vii) Stated Maturity (viii) Specified Currency (If other than U.S. Dollars) (ix) Authorized Denominations (If other than as set forth in the Prospectus Supplement) (x) Interest Payment Dates: Accrue to pay: [ ] Yes [ ] No (xi) Indexed Principal Note: [ ] Yes [ ] No (xii) Type of Interest on Note (Fixed Rate, Floating Rate or Indexed Rate) (xiii) Interest Rate (Fixed Rate Notes) (xiv) Initial Interest Rate (Floating Rate Notes) (xv) Base Rate (xvi) Calculation Agent (If other than Citibank) (xvii) Computation of Interest (xviii) Interest Reset Dates (xix) Rate Determination Dates (xx) Index Maturity (xxi) Spread (+/-) (xxii) Spread Multiplier (xxiii) Change in Spread, Spread Multiplier or Fixed Interest Rate prior to Stated Maturity: [ ] Yes [ ] No (xxiv) Maximum Interest Rate (xxv) Minimum Interest Rate (xxvi) Amortizing Note: [ ] Yes [ ] No (xxvii) Optional Redemption: [ ] Yes [ ] No Option Redemption Dates Redemption Prices Redemption: [ ] In whole only and not in part [ ] May be in whole or in part (xxviii) Option Repayment: [ ] Yes [ ] No Optional Repayment Dates Optional Repayment Prices (xxix) Discount Note: [ ] Yes [ ] No Total Amount of OID Yield to Maturity (xxx) Listed on Luxembourg Stock Exchange: [ ] Yes [ ] No S-39 REGISTERED OFFICE OF CITIGROUP GLOBAL MARKETS HOLDINGS INC. 388 Greenwich Street New York, New York 10013 TRUSTEE FOR SERIES D NOTES TRUSTEE FOR SERIES E NOTES JPMorgan Chase Bank Deutsche Bank Trust Company 4 New York Plaza, 6th Floor Americas New York, New York 10004 60 Wall Street New York, New York 10005
PRINCIPAL PAYING AGENT FOR PRINCIPAL PAYING AGENT FOR SERIES D NOTES SERIES E NOTES Citibank, N.A. Deutsche Bank U.K. 5 Carmelite Street Winchester House London, England 1 Great Winchester Street EC4Y OPA London, England EC2 N2DB
PAYING AGENT FOR SERIES D NOTES PAYING AGENT FOR SERIES E NOTES Kredietbank S.A. Deutsche Bank Luxembourg Luxembourgeoise P.O. Box 586 43 Boulevard Royal L-2015 Luxembourg L-2955 Luxembourg
LEGAL ADVISOR TO THE AGENTS Cleary, Gottlieb, Steen & Hamilton One Liberty Plaza New York, NY 10006 AUDITOR TO CITIGROUP GLOBAL MARKETS HOLDINGS INC. KPMG LLP 757 Third Avenue New York, NY 10017 LISTING AGENT Kredietbank S.A. Luxembourgeoise 43 Boulevard Royal L-2955 Luxembourg - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- $10,945,831,296 CITIGROUP GLOBAL MARKETS HOLDINGS INC. MEDIUM-TERM SENIOR NOTES, SERIES D MEDIUM-TERM SUBORDINATED NOTES, SERIES E DUE NINE MONTHS OR MORE FROM THE DATE OF ISSUE ------------------------------ PROSPECTUS SUPPLEMENT , 2004 (INCLUDING PROSPECTUS DATED , 2004) ------------------------------ CITIGROUP GLOBAL MARKETS LIMITED - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT IS NOT COMPLETE AND MAY BE CHANGED. CITIGROUP GLOBAL MARKETS HOLDINGS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS SUPPLEMENT IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. SUBJECT TO COMPLETION, DATED OCTOBER 8, 2004 PROSPECTUS SUPPLEMENT (To prospectus dated , 2004) $5,000,000,000 CITIGROUP GLOBAL MARKETS HOLDINGS INC. RETAIL MEDIUM-TERM NOTES, SERIES F DUE NINE MONTHS OR MORE FROM THE DATE OF ISSUE GENERAL TERMS OF SALE The following terms will generally apply to the Retail Medium-Term Notes, Series F that we will sell from time to time using this prospectus supplement and the attached prospectus. Citigroup Global Markets Holdings will include information on the specific terms for each note in a pricing supplement to this prospectus supplement that Citigroup Global Markets Holdings will deliver to prospective buyers of any note. We may offer the notes to or through agents for resale. The maximum amount that Citigroup Global Markets Holdings expects to receive from the sale of the notes is between $4,999,000,000 and $4,750,000,000 after paying the purchasing agent commissions of between $1,000,000 and $250,000,000. We also may offer the notes directly. We have not set a date for termination of our offering. MATURITY: 9 months or more from the date of issue. INDEXED Payments of interest or principal may NOTES: be linked to the price of one or more securities, currencies, commodities, goods, measures or events. REDEMPTION: Terms of specific notes may permit or require redemption at our option or repayment at your option. SURVIVOR'S Terms of specific notes may require OPTION: us, upon request, to repay those notes prior to stated maturity following the death of the beneficial owner of the notes, subject to certain conditions.
INTEREST RATES: Fixed or floating, payable monthly, quarterly, semiannually or annually. RISKS: Index risks may exist. RANKING: The Retail Medium-Term Notes, Series F are senior notes which are part of our senior indebtedness. OTHER TERMS: You should review "Description of the Notes" and the pricing supplement for features that apply to your notes.
------------------------ CONSIDER CAREFULLY THE INFORMATION UNDER "RISK FACTORS" BEGINNING ON PAGE S-5 OF THIS PROSPECTUS SUPPLEMENT. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement or any accompanying prospectus or pricing supplement is truthful or complete. Any representation to the contrary is a criminal offense. These notes are not deposits or savings accounts but are unsecured debt obligations of Citigroup Global Markets Holdings Inc. The notes are not insured by the Federal Deposit Insurance Corporation or any other governmental agency or instrumentality. CITIGROUP A.G. EDWARDS & SONS, INC. EDWARD D. JONES & CO., L.P. MERRILL LYNCH & CO. MORGAN STANLEY UBS INVESTMENT BANK WACHOVIA SECURITIES
, 2004 TABLE OF CONTENTS PROSPECTUS SUPPLEMENT
PAGE ---- Summary..................................................... S-3 Risk Factors................................................ S-5 Description of the Notes.................................... S-7 Certain United States Federal Income Tax Considerations..... S-27 Plan of Distribution........................................ S-33 ERISA Matters............................................... S-34 Legal Matters............................................... S-34
PROSPECTUS Prospectus Summary.......................................... 1 Forward-Looking Statements.................................. 6 Citigroup Global Markets Holdings Inc. ..................... 7 Use of Proceeds and Hedging................................. 8 Description of Debt Securities.............................. 10 Description of Index Warrants............................... 17 Book-Entry Procedures and Settlement........................ 20 Limitations on Issuances in Bearer Form..................... 21 Plan of Distribution........................................ 23 ERISA Matters............................................... 26 Legal Matters............................................... 26 Experts..................................................... 26
S-2 SUMMARY This section summarizes the legal and financial terms of the notes that are described in more detail in "Description of the Notes" beginning on page S-7. Final terms of any particular notes will be determined at the time of sale and will be contained in the pricing supplement relating to those notes. The terms in that pricing supplement may vary from and supersede the terms contained in this summary and in "Description of the Notes." In addition, you should read the more detailed information appearing elsewhere in this prospectus supplement, the accompanying prospectus and in that pricing supplement. Issuer........................ Citigroup Global Markets Holdings Inc. Purchasing Agent.............. Citigroup Global Markets Inc. Agents........................ A.G. Edwards & Sons, Inc. Edward D. Jones & Co., L.P. Merrill Lynch, Pierce, Fenner & Smith Incorporated Morgan Stanley & Co. Incorporated UBS Securities LLC Wachovia Capital Markets, LLC Title of Notes................ Retail Medium-Term Notes, Series F Amount........................ We may issue up to $ of notes in connection with this series. The notes will not contain any limitations on our ability to issue additional indebtedness with terms similar to the notes or otherwise. Denominations................. Unless otherwise stated in the applicable pricing supplement, the minimum denomination of the notes will be $1,000 and any larger amount that is a whole multiple of $1,000. Ranking....................... The notes will constitute part of our senior indebtedness and will rank on an equal basis with all of our other unsecured debt other than subordinated debt. Maturity...................... Unless otherwise specified in the applicable pricing supplement, each note will mature on a stated maturity date nine months or more from its date of issue. Interest...................... Each note will bear interest from its issue date at a fixed rate per year or at a floating rate, or interest may be linked to the price of one or more securities, currencies, intangibles, articles, commodities or goods or any other financial or economic measure or instrument, including the occurrence or non-occurrence of any event. Interest on each note will be payable either monthly, quarterly, semiannually or annually on each interest payment date and on the stated maturity date. Accrued interest will also be paid on the date of redemption or repayment if a note is redeemed or repurchased prior to its stated maturity in accordance with its terms. Principal..................... The principal amount of each note will be payable on its stated maturity date or upon earlier redemption or repayment at the corporate trust office of the paying agent or at any other place we may designate. S-3 Redemption and Repayment...... Unless otherwise specified in the applicable pricing supplement, a note will not be redeemable at our option or repayable at the option of the holder prior to its stated maturity date. The notes will not be subject to any sinking fund. Survivor's Option............. The pricing supplement relating to any note will indicate if the holder of that note will have the survivor's option, which is an option to elect repayment of the note prior to stated maturity in the event of the death of the beneficial owner of the note. We will repay such note if requested by the authorized representative of the beneficial owner of the note so long as the note was owned by that beneficial owner or the estate of that beneficial owner at least one year prior to the exercise of the survivor's option. The right to exercise the survivor's option is subject to limits set by us on (1) the permitted dollar amount of total exercises by all holders of notes of this series in any calendar year, and (2) the permitted dollar amount of an individual exercise by a holder of a note in any calendar year. Additional details on the survivor's option are described in the section entitled "Description of the Notes -- Repayment Upon Death" on page S-23. Sale and Clearance............ We will sell the notes in the United States only. Notes will be issued in book-entry form only and will clear through The Depository Trust Company. We do not intend to issue notes in certificated form. Paying Agent.................. The paying agent for the notes is Citibank, N.A., 111 Wall Street, New York, New York 10005. Selling Group................. The selling group for the notes is comprised of agents and selected dealers. The agents, including the purchasing agent, have entered into a Global Selling Agency Agreement, dated , 2004. Dealers who are members of the selling group have executed a Master Selected Dealer Agreement. The agents and dealers have agreed to market and sell the notes in accordance with the terms of those respective agreements and all other applicable laws and regulations. Risk Factors.................. For information about risks relating to the notes, see "Risk Factors" beginning on page S-5. S-4 RISK FACTORS Your investment in the notes will involve certain risks. This prospectus supplement and the accompanying prospectus do not describe all of those risks. In addition to the information relating to the business of Citigroup Global Markets Holdings, which is incorporated by reference in the accompanying prospectus, you should, in consultation with your own financial and legal advisors, carefully consider the following discussion of risks before deciding whether an investment in the notes is suitable for you. The notes will not be an appropriate investment for you if you are not knowledgeable about significant features of the notes or financial matters in general. You should not purchase the notes unless you understand, and know that you can bear, these investment risks. WE MAY CHOOSE TO REDEEM THE NOTES WHEN PREVAILING INTEREST RATES ARE RELATIVELY LOW If your notes are redeemable at our option, we may choose to redeem your notes from time to time, especially when prevailing interest rates are lower than the rate borne by the notes. If prevailing rates are lower at the time of redemption, you would not be able to reinvest the redemption proceeds in a comparable security at an effective interest rate as high as the interest rate on the notes being redeemed. Our redemption right also may adversely impact your ability to sell your notes as the optional redemption date or period approaches. THE SURVIVOR'S OPTION MAY BE LIMITED We will have a discretionary right to limit the aggregate principal amount of notes subject to the survivor's option that may be exercised in any calendar year to an amount equal to the greater of $2,500,000 or 1% of the outstanding principal amount of all the notes of this series outstanding as of the end of the most recent calendar year. We also have the discretionary right to limit to $250,000 in any calendar year the aggregate principal amount of notes of this series subject to the survivor's option that may be exercised in such calendar year on behalf of any individual deceased beneficial owner of notes. Accordingly, no assurance can be given that exercise of the survivor's option for the desired amount will be permitted in any single calendar year. YOU MAY NOT BE ABLE TO SELL YOUR NOTES IF AN ACTIVE TRADING MARKET FOR THE NOTES DOES NOT DEVELOP There is currently no secondary market for the notes. The agents currently intend, but are not obligated, to make a market in the notes. Even if a secondary market does develop, it may not be liquid and may not continue for the term of the notes. If the secondary market for the notes is limited, there may be few buyers should you choose to sell your notes prior to maturity and this may reduce the price you receive. THE PRICE AT WHICH YOU WILL BE ABLE TO SELL YOUR NOTES PRIOR TO MATURITY WILL DEPEND ON A NUMBER OF FACTORS AND MAY BE SUBSTANTIALLY LESS THAN THE AMOUNT YOU ORIGINALLY INVEST We believe that the value of the notes in the secondary market will be affected by supply and demand for the notes and a number of other factors. Some of these factors are interrelated in complex ways; as a result, the effect of any one factor may be offset or magnified by the effect of another factor. The following paragraphs describe what we expect to be the impact on the market value of the notes of a change in a specific factor, assuming all other conditions remain constant. INTEREST RATES We expect that the market value of the notes will be affected by changes in U.S. interest rates. In general, if U.S. interest rates increase, the market value of the notes may decrease, and if U.S. interest rates decrease, the market value of the notes may increase. S-5 TIME PREMIUM OR DISCOUNT As a result of a "time premium or discount," the notes may trade at a value above or below that which would be expected based on the level of interest rates the longer the time remaining to maturity. A "time premium or discount" results from expectations concerning interest rates during the period prior to the maturity of the notes. However, as the time remaining to maturity decreases, this time premium or discount may diminish, increasing or decreasing the market value of the notes. CITIGROUP GLOBAL MARKETS HOLDINGS' CREDIT RATINGS, FINANCIAL CONDITION AND RESULTS Actual or anticipated changes in our credit ratings, financial condition or results may affect the market value of the notes. CHANGES IN THE VALUE OF UNDERLYING ASSETS OF INDEXED NOTES COULD RESULT IN A SUBSTANTIAL LOSS TO YOU An investment in indexed notes may have significant risks that are not associated with a similar investment in a debt instrument that: - has a fixed principal amount; and - bears interest at either a fixed rate or a floating rate based on nationally published interest rate references. The risks of a particular indexed note will depend on the terms of that indexed note. Such risks may include, but are not limited to, the possibility of significant changes in the prices of: - the underlying assets; - another objective price; and - economic or other measures making up the relevant index. Underlying assets could include: - one or more securities or securities indices; - one or more specified foreign currency or currency indices; - a combination thereof; - intangibles; - goods; - articles; - commodities; and - any other financial, economic or other measure or instrument. The risks associated with a particular indexed note generally depend on factors over which Citigroup Global Markets Holdings has no control and which cannot readily be foreseen. These risks include: - economic events; - political events; and - the supply of, and demand for, the underlying assets. In recent years, currency exchange rates and prices for various underlying assets have been highly volatile. Such volatility may be expected in the future. Fluctuations in rates or prices that have occurred in the past are not necessarily indicative, however, of fluctuations that may occur during the term of any indexed note. In considering whether to purchase indexed notes, you should be aware that the calculation of amounts payable on indexed notes may involve reference to: - an index determined by a subsidiary or an affiliate of Citigroup Global Markets Holdings; or - prices that are published solely by third parties or entities which are not regulated by the laws of the United States. The risk of loss as a result of linking principal or interest payments on indexed notes to an index and to the underlying assets can be substantial. You should consult your own financial and legal advisors as to the risks of an investment in indexed notes. S-6 DESCRIPTION OF THE NOTES The following description of the particular terms of the notes being offered supplements the description of the general terms and provisions of the debt securities set forth in the prospectus. If any specific information regarding the notes in this prospectus supplement is inconsistent with the more general terms of the debt securities described in the prospectus, you should rely on the information in this prospectus supplement. The pricing supplement for each offering of notes will contain the specific information and terms for that offering. If any information in the pricing supplement is inconsistent with this prospectus supplement, you should rely on the information in the pricing supplement. The pricing supplement may also add, update or change information contained in the prospectus and this prospectus supplement. It is important for you to consider the information contained in the prospectus, this prospectus supplement and the applicable pricing supplement in making your investment decision. GENERAL Introduction. The notes are a single series of senior debt securities issued under Citigroup Global Markets Holdings' senior debt indenture dated as of December 1, 1988, as amended from time to time, between Citigroup Global Markets Holdings and JPMorgan Chase Bank, as successor trustee. At the date of this prospectus supplement, the notes offered pursuant to this prospectus supplement are limited to an aggregate initial public offering price or purchase price of up to $5,000,000,000. This amount is subject to reduction as a result of the sale of other securities under the registration statement of which this prospectus supplement and the accompanying prospectus form a part, or under a registration statement to which this prospectus supplement and the accompanying prospectus also relate. Citigroup Global Markets Holdings reserves the right to withdraw, cancel or modify the offer made by this prospectus supplement without notice. The aggregate amount of notes may be increased from time to time to such larger amount as may be authorized by Citigroup Global Markets Holdings. In addition, Citigroup Global Markets Holdings reserves the right to issue additional series of Retail Medium-Term Notes with terms similar to the notes. Ranking. The notes will constitute part of the senior indebtedness of Citigroup Global Markets Holdings and will rank on an equal basis with all other unsecured debt of Citigroup Global Markets Holdings other than subordinated debt. If there were an event of default with respect to any senior indebtedness, the trustee or holders of 25% of the principal amount of senior debt securities outstanding in a series could demand that the principal be repaid immediately. See "Description of Debt Securities -- Events of Default and Defaults" in the prospectus. On a consolidated basis, the aggregate principal amount of senior indebtedness of Citigroup Global Markets Holdings outstanding as of June 30, 2004 was approximately $76.3 billion. This senior indebtedness consisted of approximately $49.6 billion of term debt, approximately $18.9 billion of commercial paper and approximately $7.8 billion of other short-term borrowings. Form of Notes. The notes will be represented initially by a single master global note in fully registered form, without coupons. The master global note will be registered in the name of a nominee of DTC, as depositary, or another depositary named in the pricing supplement. Except as set forth in the accompanying prospectus under "Book-Entry Procedures and Settlement," the notes will not be issuable as certificated notes. See "Book-Entry System" below. Denominations. Unless otherwise specified in the applicable pricing supplement, the minimum denomination of the notes will be $1,000 and any larger amount that is a whole multiple of $1,000. Maturity. Unless otherwise specified in the applicable pricing supplement, each note will mature on a stated maturity date. The stated maturity date will be a business day nine months or more from its date of issue, as selected by the purchaser and agreed to by Citigroup Global Markets Holdings. S-7 Interest. Each note will bear interest from its issue date at a fixed rate per year or at a floating rate, or interest may be linked to the price of one or more securities, currencies, intangibles, articles, commodities or goods or any other financial or economic measure or instrument, including the occurrence or non-occurrence of any event. Sinking Fund. The notes will not be subject to any sinking fund. Additional Information. The pricing supplement relating to each offering of notes will describe the following terms: - the aggregate principal amount of the relevant notes; - whether such note (1) is a fixed rate note; (2) is a floating rate note; or (3) is an indexed note on which payments of interest or principal, or both, may be linked to the price of one or more securities, currencies, intangibles, articles, commodities or goods or any other financial or economic measure or instrument, including the occurrence or non-occurrence of any event. - the price at which such note will be issued, which will be expressed as a percentage of the aggregate principal amount; - the purchasing agent's discount and net proceeds to us; - the original issue date on which such note will be issued; - the date of the stated maturity; - if the note is a fixed rate note, the rate per annum at which the note will bear interest, and whether and how that rate may be changed prior to its stated maturity; - if the note is a floating rate note, relevant terms such as: (1) the base rate; (2) the initial interest rate; (3) the interest reset period or the interest reset dates; (4) the interest payment dates; (5) the index maturity; (6) any maximum interest rate; (7) any minimum interest rate; (8) any spread or spread multiplier; and (9) any other terms relating to the particular method of calculating the interest rate for the note and whether and how the spread or spread multiplier may be changed prior to stated maturity; - whether the note is a note issued originally at a discount; - if the note is an indexed note, in the case of an indexed rate note, the manner in which the amount of any interest payment will be determined or, in the case of an indexed principal note, its face amount and the manner in which the principal amount payable at stated maturity will be determined; - whether the note may be redeemed at the option of Citigroup Global Markets Holdings, or repaid at the option of the holder, prior to stated maturity as described under "Optional Redemption, Repayment and Repurchase" below and the terms of its redemption or repayment; - the use of proceeds, if materially different than that disclosed in the accompanying prospectus; - any special United States federal income tax consequences of the purchase, ownership and disposition of a particular issuance of notes; S-8 - whether the holder of the note has a survivor's option, as described below under "Repayment Upon Death;" and - any other terms of the note provided in the accompanying prospectus, to be set forth in a pricing supplement, or that are otherwise consistent with the provisions of the indenture under which the note will be issued. As used in this prospectus supplement, business day means: - for any note, any day that is not a Saturday or Sunday and that, in New York City, is not a day on which banking institutions generally are authorized or obligated by law or executive order to close; and - for LIBOR notes only, a London business day, which shall be any day on which dealings in deposits in the specified currency are transacted in the London interbank market. PAYMENT OF PRINCIPAL AND INTEREST Citigroup Global Markets Holdings will pay the principal of, and any premium and interest on, each note in accordance with the procedures of DTC in effect from time to time. Principal, premium, if any, and interest payable at stated maturity or on a date of redemption or repurchase will be paid by wire transfer in immediately available funds to an account specified by DTC or its nominee. Interest payments on a date other than the stated maturity will be made in accordance with existing arrangements between the paying agent and DTC. Citigroup Global Markets Holdings and the paying agent will treat DTC or its nominee as the owner of each book-entry security for all purposes. Accordingly, Citigroup Global Markets Holdings and the paying agent will have no direct responsibility or liability to pay amounts due on the book-entry securities to you or any other beneficial owners in the book-entry securities. For information about DTC procedures, see "Book-Entry System" beginning on page S-24 and "Book-Entry Procedures and Settlement" in the accompanying prospectus. Unless otherwise specified in the applicable pricing supplement, payments of interest on notes in certificated form, other than interest payable at stated maturity or upon redemption or repurchase, will be made by check mailed to the registered holders entitled thereto as described below. Unless otherwise specified in the applicable pricing supplement, principal, premium, if any, and interest payable at the stated maturity or upon redemption or repurchase of a note in certificated form will be paid in immediately available funds upon surrender of the note at the corporate trust office or agency of the paying agent in New York City. Unless otherwise specified in this prospectus supplement or the applicable pricing supplement, any payment required to be made on a note on a date, including the stated maturity date, that is not a business day for the note need not be made on that date. A payment may be made on the next succeeding business day with the same force and effect as if made on the specified date. Unless otherwise specified in the applicable pricing supplement, if the principal of any original issue discount note, or OID note, other than an indexed note, is declared to be due and payable immediately as a result of the acceleration of stated maturity, the amount of principal due and payable relating to the note will be limited to the aggregate principal amount of the note multiplied by the sum of (1) its issue price, expressed as a percentage of the aggregate principal amount, plus (2) the original issue discount amortized from the date of issue to the date of declaration. Amortization will be calculated using the interest method, computed in accordance with U.S. generally accepted accounting principles in effect on the date of declaration. FIXED RATE NOTES Each fixed rate note will bear interest from its original issue date, or from the last interest payment date to which interest has been paid or duly provided for, at the rate per annum stated in the applicable pricing supplement until its principal amount is paid or made available for payment. S-9 Unless otherwise specified in the applicable pricing supplement, the interest payment dates for a fixed rate note that provides for monthly interest payments shall be the fifteenth day of each calendar month, commencing in the calendar month that next succeeds the month in which the note is issued. In the case of a fixed rate note that provides for quarterly interest payments, the interest payment dates shall be the fifteenth day of each third month, commencing in the third succeeding calendar month following the month in which the note is issued. In the case of a fixed rate note that provides for semi-annual interest payments, the interest payment dates shall be the fifteenth day of each sixth month, commencing in the sixth succeeding calendar month following the month in which the note is issued. In the case of a fixed rate note that provides for annual interest payments, the interest payment date shall be the fifteenth day of every twelfth month, commencing in the twelfth succeeding calendar month following the month in which the note is issued. Unless "accrue to pay" is specified in the applicable pricing supplement or unless otherwise specified in the applicable pricing supplement, if an interest payment date for any fixed rate note would otherwise be a day that is not a business day, any payment required to be made on the note on that date, including the stated maturity date, may be made on the next succeeding business day with the same force and effect as if made on the specified date. No additional interest will accrue as a result of such delayed payment. If in connection with any fixed rate note, "accrue to pay" is specified in the applicable pricing supplement, and any interest payment date for the fixed rate note would otherwise be a day that is not a business day, the interest payment date will be postponed to the next succeeding business day. Any payment of interest on an interest payment date will include interest accrued through the day before the interest payment date. Unless otherwise specified in the applicable pricing supplement, interest on fixed rate notes will be computed on the basis of a 360-day year of twelve 30-day months or, in the case of an incomplete month, the number of days elapsed. Unless otherwise set forth in the applicable pricing supplement, the regular record date for any note will be the date, whether or not a business day, fifteen calendar days immediately preceding an interest payment date. Interest on a note will be payable beginning on the first interest payment date after its date of original issuance to holders of record on the corresponding regular record date. However, if the date of original issuance is between a regular record date and the corresponding interest payment date, the first interest payment will be made on the next succeeding interest payment date. FLOATING RATE NOTES Each floating rate note will bear interest at the initial interest rate set forth, or otherwise described, in the applicable pricing supplement. The interest payment dates for each floating rate note will be the dates specified in the applicable pricing supplement. The initial interest period is the period from the original issue date to, but not including, the first interest reset date. The interest reset period is the period from each interest reset date to, but not including, the following interest reset date. The initial interest period, and any interest reset period, is an interest period. The interest rate for each floating rate note will be determined based on an interest rate basis, the base rate, plus or minus any spread, or multiplied by any spread multiplier. A basis point, or bp, equals one-hundredth of a percentage point. The spread is the number of basis points that may be specified in the applicable pricing supplement as applicable to the note. The spread multiplier is the percentage that may be specified in the applicable pricing supplement as applicable to the note. The applicable pricing supplement will designate one of the following base rates as applicable to a floating rate note: - the CD Rate; - the Commercial Paper Rate; - the Federal Funds Rate; S-10 - LIBOR; - the Treasury Rate; - the Prime Rate; or - such other base rate as is set forth in the applicable pricing supplement. The following terms are used in describing the various base rates. The "index maturity" is the period of maturity of the instrument or obligation from which the base rate is calculated. "H.15(519)" means the publication entitled "Statistical Release H.15(519), Selected Interest Rates," or any successor publication, published by the Board of Governors of the Federal Reserve System. "H.15 Daily Update" means the daily update of the Board of Governors of the Federal Reserve System at http://www.federalreserve.gov/releases/h15/update or any successor site or publication. "Calculation date" means the date on which the calculation agent is to calculate the interest rate which will be the earlier of (1) the tenth calendar day after the related rate determination date, or if any such day is not a business day, the next succeeding business day or (2) the business day preceding the applicable interest payment date or the stated maturity. As specified in the applicable pricing supplement, a floating rate note may also have either or both of the following, which will be expressed as a rate per annum on a simple interest basis: - maximum interest rate, which will be a maximum limitation, or ceiling, on the rate at which interest may accrue during any interest period; and/or - minimum interest rate, which will be a minimum limitation, or floor, on the rate at which interest may accrue during any interest period. In addition to any maximum interest rate that may be applicable to any floating rate note, the interest rate on a floating rate note will in no event be higher than the maximum rate permitted by applicable law. The notes will be governed by the law of New York State. As of the date of this prospectus supplement, the maximum rate of interest under provisions of the New York penal law, with a few exceptions, is 25% per annum on a simple interest basis. Such maximum rate of interest only applies to obligations that are less than $2,500,000. Citigroup Global Markets Holdings will appoint and enter into agreements with calculation agents to calculate interest rates on floating rate notes. Unless otherwise specified in the applicable pricing supplement, Citibank, N.A. will be the calculation agent for each floating rate note. All determinations of interest by the calculation agents will, in the absence of manifest error, be conclusive for all purposes and binding on the holders of the floating rate notes. The interest rate on each floating rate note will be reset on an interest reset date, which means that the interest rate is reset daily, weekly, monthly, quarterly, semiannually or annually, as specified in the applicable pricing supplement. Unless otherwise specified in the applicable pricing supplement, the interest reset dates will be as follows: - in the case of floating rate notes that reset daily, each business day; - in the case of floating rate notes that reset weekly, other than Treasury Rate notes, the Wednesday of each week; - in the case of Treasury Rate notes that reset weekly and except as provided below under "Treasury Rate Notes," the Tuesday of each week; - in the case of floating rate notes that reset monthly, the third Wednesday of each month; - in the case of floating rate notes that reset quarterly, the third Wednesday of March, June, September and December of each year; S-11 - in the case of floating rate notes that reset semiannually, the third Wednesday of each of two months of each year specified in the applicable pricing supplement; and - in the case of floating rate notes that reset annually, the third Wednesday of one month of each year specified in the applicable pricing supplement. If an interest reset date for any floating rate note would fall on a day that is not a business day, that interest reset date will be postponed to the next succeeding business day. In the case of a LIBOR note, if postponement to the next business day would cause the interest reset date to be in the next succeeding calendar month, the interest reset date will instead be the immediately preceding business day. Unless otherwise specified in the applicable pricing supplement and except as set forth below, the rate of interest that goes into effect on any interest reset date will be determined on a rate determination date preceding such interest reset date, as further described below. Unless otherwise specified in the applicable pricing supplement, interest payable on floating rate notes will be the interest accrued from and including the original issue date or the last date to which interest has been paid, as the case may be, to but excluding the applicable interest payment date. Accrued interest on a floating rate note with more than one interest reset date will be calculated by multiplying the principal amount of the note by an accrued interest factor. If the floating rate note is an indexed principal note, the face amount of the note will be multiplied by the accrued interest factor. The accrued interest factor will be computed by adding the interest factors calculated for each day in the period for which accrued interest is being calculated. Unless otherwise specified in the applicable pricing supplement, the interest factor for each such day will be computed by dividing the interest rate in effect on such day by 360, in the case of CD Rate notes, Commercial Paper Rate notes, Federal Funds Rate notes, LIBOR notes and Prime Rate notes. In the case of Treasury Rate notes, the interest factor for each such day will be computed by dividing the interest rate by the actual number of days in the year. The interest factor will be expressed as a decimal calculated to seven decimal places without rounding. For purposes of making the foregoing calculation, the interest rate in effect on any interest reset date will be the applicable rate as reset on that date. For all other floating rate notes, accrued interest will be calculated by multiplying the principal amount of the note by the interest rate in effect during the period for which accrued interest is being calculated. That product is then multiplied by the quotient obtained by dividing the number of days in the period for which accrued interest is being calculated by 360, in the case of CD Rate notes, Commercial Paper Rate notes, Federal Funds Rate notes, LIBOR notes and Prime Rate notes. In the case of Treasury Rate notes, the product is multiplied by the quotient obtained by dividing the number of days in the period for which accrued interest is being calculated by the actual number of days in the year. Unless otherwise specified in the applicable pricing supplement, all percentages resulting from any calculation of the rate of interest on a floating rate note will be rounded, if necessary, to the nearest 1/100,000 of 1% (.0000001), with five one-millionths of a percentage point rounded upward. All currency amounts used in, or resulting from, the calculation on floating rate notes will be rounded to the nearest one-hundredth of a unit. For purposes of rounding, .005 of a unit shall be rounded upward. Unless otherwise indicated in the applicable pricing supplement and except as provided below, interest will be payable as follows. - In the case of floating rate notes that reset daily, weekly or monthly, interest will be payable on the third Wednesday of each month or on the third Wednesday of March, June, September and December of each year, as specified in the applicable pricing supplement. - In the case of floating rate notes that reset quarterly, interest will be payable on the third Wednesday of March, June, September and December of each year. S-12 - In the case of floating rate notes that reset semiannually, interest will be payable on the third Wednesday of each of two months of each year specified in the applicable pricing supplement. - In the case of floating rate notes that reset annually, interest will be payable on the third Wednesday of one month of each year specified in the applicable pricing supplement. In each of these cases, interest will also be payable at maturity. If an interest payment date for any floating rate note would fall on a day that is not a business day, that interest payment date will be postponed to the next succeeding business day, except as described in the next paragraph. In the case of a LIBOR note, if postponement to the next business day would cause the interest payment date to be in the next succeeding calendar month, the interest payment date will instead be the immediately preceding business day. If for any floating rate note, the applicable pricing supplement provides that the note does not accrue to pay, and if an interest payment date for that floating rate note would otherwise be a day that is not a business day, the interest payment date will not be postponed. Any payment required to be made on the floating rate note, however, may be made on the next succeeding business day with the same force and effect as if made on the due date. No additional interest will accrue as a result of such delayed payment. Upon the request of the holder of any floating rate note, the calculation agent for that note will provide the interest rate then in effect and, if determined, the interest rate that will become effective on the next interest reset date for the note. CD Rate Notes. Each CD Rate note will bear interest for each interest reset period at an interest rate equal to the CD Rate and any spread or spread multiplier specified in the note and in the applicable pricing supplement. The calculation agent will determine the CD Rate on each CD Rate determination date. The CD Rate determination date is the second business day prior to the interest reset date for each interest reset period for negotiable U.S. dollar certificates of deposit having the index maturity designated in the applicable pricing supplement as published in H.15(519) under the heading "CDs (Secondary Market)." The following procedures will be followed if the CD Rate cannot be determined as described above. - If the above rate is not published prior to 3:00 p.m., New York City time, on the calculation date pertaining to the CD Rate determination date, then the CD Rate for the interest reset period will be the rate on that date for negotiable U.S. dollar certificates of deposit of the index maturity designated in the applicable pricing supplement as published in the H.15 Daily Update, or other recognized electronic source used for the purpose of displaying the applicable rate, under the heading "CDs (Secondary Market)." - If by 3:00 p.m., New York City time, on the calculation date, the above rate is not yet published in either H.15(519) or in the H.15 Daily Update, then the CD Rate will be the arithmetic mean of the secondary market offered rates as of 10:00 a.m., New York City time, on that CD Rate Determination date of three leading nonbank dealers in negotiable U.S. dollar certificates of deposit in New York City selected by the calculation agent for negotiable U.S. dollar certificates of deposit of major United States money center banks of the highest credit standing, in the market for negotiable U.S. dollar certificates of deposit, with a remaining maturity closest to the index maturity designated in the pricing supplement in a denomination of $5,000,000. - If the dealers selected by the calculation agent, however, are not quoting offered rates as mentioned in the preceding sentence, the CD Rate for that interest reset period will be the same as the CD Rate for the immediately preceding interest reset period. If there was no such interest reset period, the CD Rate will be the initial interest rate. CD Rate notes, like other notes, are not deposit obligations of a bank and are not insured by the Federal Deposit Insurance Corporation. S-13 Commercial Paper Rate Notes. Each Commercial Paper Rate note will bear interest for each interest reset period at an interest rate equal to the Commercial Paper Rate and any spread or spread multiplier, specified in the note and the applicable pricing supplement. The calculation agent will determine the Commercial Paper Rate on each Commercial Paper Rate determination date. The Commercial Paper Rate determination date is the business day immediately preceding the interest reset date for each interest reset period. The Commercial Paper Rate will be the money market yield on that date of the rate for commercial paper having the index maturity specified in the applicable pricing supplement, as published in H.15(519) under the heading "Commercial Paper -- Nonfinancial." The following procedures will be followed if the Commercial Paper Rate cannot be determined as described above. - If the rate is not published prior to 3:00 p.m., New York City time, on the calculation date pertaining to the Commercial Paper Rate determination date, then the Commercial Paper Rate for the interest reset period will be the money market yield on that date of the rate for commercial paper of the specified index maturity as published in H.15 Daily Update, or other recognized electronic source used for the purpose of displaying the applicable rate, under the heading "Commercial Paper -- Nonfinancial." - If by 3:00 p.m., New York City time, on such calculation date, the above rate is not yet published, then the Commercial Paper Rate for the interest reset period will be the money market yield of the arithmetic mean of the offered rates, as of 11:00 a.m., New York City time, on that date, of three leading dealers of U.S. dollar commercial paper in New York City selected by the calculation agent for such Commercial Paper Rate note for commercial paper of the specified index maturity placed for an industrial issuer whose bonds are rated "AA" or the equivalent by a nationally recognized rating agency. - If the dealers selected by the calculation agent, however, are not quoting offered rates as mentioned in the preceding sentence, the Commercial Paper Rate for the interest reset period will be the same as the Commercial Paper Rate for the immediately preceding interest reset period. If there was no such interest reset period, the Commercial Paper Rate will be the initial interest rate. Money market yield will be calculated as follows: D X 360 money market yield = ------------- X 100 360 - (D X M)
where "D" refers to the applicable per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal, and "M" refers to the actual number of days in the applicable interest reset period. Federal Funds Rate Notes. Each Federal Funds Rate note will bear interest for each interest reset period at an interest rate equal to the Federal Funds Rate and any spread or spread multiplier specified in the note and the applicable pricing supplement. The calculation agent will determine the Federal Funds Rate on each Federal Funds Rate determination date. The Federal Funds Rate determination date is the business day immediately preceding interest reset date for that interest reset period. The Federal Funds Rate will be the rate for U.S. dollar federal funds as published in H.15(519) under the heading "Federal Funds (Effective)" and displayed on Moneyline Telerate (or any successor service) on Page 120 (or any other page as may replace the specified Page on that service). The following procedures will be followed if the Federal Funds Rate cannot be determined as described above. S-14 - If the above rate does not appear on Moneyline Telerate on Page 120 or is not published prior to 3:00 p.m., New York City time, on the calculation date pertaining to the Federal Funds Rate determination date, the Federal Funds Rate for the interest reset period will be the rate on that date as published in the H.15 Daily Update under the heading "Federal Funds/Effective Rate," or other recognized electronic source used for the purpose of displaying the applicable rate. - If by 3:00 p.m., New York City time, on the calculation date the above rate is not yet published, then the Federal Funds Rate for the interest reset period will be the arithmetic mean of rates for the last transaction in overnight U.S. dollar federal funds arranged by three leading brokers of U.S. dollar federal funds transactions in New York City, selected by the calculation agent prior to 9:00 a.m., New York City time, on that Federal Funds Rate determination date. - If the brokers so selected by the calculation agent are not quoting as mentioned above, the Federal Funds Rate for the interest reset period will be the Federal Funds Rate in effect for the particular Federal Funds Rate determination date. If there was no Federal Funds Rate in effect for the interest reset period, the Federal Funds Rate will be the initial interest rate. In the case of a Federal Funds Rate note that resets daily, the interest rate on the note for the period from and including a Monday to but excluding the succeeding Monday will be reset by the calculation agent for the note on the second Monday, or, if not a business day, on the next succeeding business day, to a rate equal to the average of the Federal Funds Rates in effect for each day in that week. LIBOR Notes. Each LIBOR note will bear interest for each interest reset period at an interest rate equal to LIBOR and any spread or spread multiplier specified in the note and the applicable pricing supplement. The calculation agent will determine LIBOR on each LIBOR determination date. The LIBOR determination date is the second London business day prior to the interest reset date for each interest reset period. On a LIBOR determination date, the calculation agent will determine LIBOR for each interest reset period as follows. The calculation agent will determine the offered rates for deposits in the specified currency for the period of the index maturity specified in the applicable pricing supplement commencing on the interest reset date, which appear on the "designated LIBOR page" at approximately 11:00 a.m., London time, on that date. - If "LIBOR Moneyline Telerate" is designated in the applicable pricing supplement, or if neither "LIBOR Reuters" nor "LIBOR Moneyline Telerate" is specified in the applicable pricing supplement as the method for calculating LIBOR, "designated LIBOR page" means the display designated as page "3750" on the Moneyline Telerate Service, and LIBOR will be the relevant offered rate determined by the calculation agent. If page "3750" on the Moneyline Telerate Service is replaced by another page, or if the Moneyline Telerate Service is replaced by a successor service, then "LIBOR Moneyline Telerate" means the replacement page or service selected to display the London interbank offered rates of major banks. - If "LIBOR Reuters" is designated in the applicable pricing supplement, "designated LIBOR page" means the display designated as page "LIBO" on the Reuters Monitor Money Rates Service and LIBOR will be the arithmetic means of the offered rates, calculated by the calculation agent, or the offered rate, if the designated LIBOR page by its terms provides only for a single rate. If the LIBO page on that service is replaced by another page, or if the Reuters Monitor Money Rates Service is replaced by a successor service, then "LIBOR Reuters" means the replacement page or service selected to display the London interbank offered rates of major banks. S-15 If LIBOR cannot be determined on a LIBOR determination date as described above, then the calculation agent will determine LIBOR as follows. - The calculation agent will select four major banks in the London interbank market. - The calculation agent will request that the principal London offices of those four selected banks provide their offered quotations to prime banks in the London interbank market at approximately 11:00 a.m., London time, on the LIBOR determination date. These quotations shall be for deposits in the specified currency for the period of the specified index maturity, commencing on the interest reset date. Offered quotations must be based on a principal amount equal to at least $1,000,000 or the approximate equivalent in the specified currency that is representative of a single transaction in such market at that time. (1) If two or more quotations are provided, LIBOR for the interest reset period will be the arithmetic mean of those quotations. (2) If less than two quotations are provided, the calculation agent will select three major banks in New York City and follow the steps in the two bullet points below. - The calculation agent will then determine LIBOR for the interest reset period as the arithmetic mean of rates quoted by those three major banks in New York City to leading European banks at approximately 11:00 a.m., New York City time, on the LIBOR determination date. The rates quoted will be for loans in the specified currency, for the period of the specified index maturity, commencing on the interest reset date. Rates quoted must be based on a principal amount of at least $1,000,000 or the approximate equivalent in the specified currency that is representative of a single transaction in such market at that time. - If fewer than three New York City banks selected by the calculation agent are quoting rates, LIBOR for the interest reset period will be the same as for the immediately preceding interest reset period. If there was no preceding interest reset period, the LIBOR Rate will be the initial interest rate. Treasury Rate Notes. Each Treasury Rate note will bear interest for each interest reset period at an interest rate equal to the Treasury Rate and any spread or spread multiplier specified in the note and the applicable pricing supplement. Treasury Rate Notes other than Constant Maturity Treasury Rate Notes Unless "Constant Maturity" is specified in the applicable pricing supplement, the Treasury Rate for each interest reset period will be the rate for the auction held on the Treasury Rate determination date for the interest reset period of treasury securities as that rate appears on Moneyline Telerate (or any successor service) on page 56 (or any other page as may replace the page on that service) or on page 57 (or any other page as may replace that page on that service) under the heading "INVESTMENT RATE." Treasury securities are direct obligations of the United States that have the index maturity specified in the applicable pricing supplement. If the Treasury Rate cannot be determined as described above, the following procedures will be followed in the order set forth below. (1) If the Treasury rate is not published prior to 3:00 P.M., New York City time on the related calculation date, then the Treasury Rate will be the Bond Equivalent Yield (as defined below) of the rate for the applicable treasury securities as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the heading "U.S. Government Securities/Treasury Bills/Auction High." (2) If the rate referred to in clause (1) is not so published by 3:00 P.M., New York City time, on the related calculation date, the Treasury Rate will be the Bond Equivalent Yield of the auction S-16 rate of the applicable treasury securities as announced by the United States Department of the Treasury. (3) If the rate referred to in clause (2) above is not so announced by the United States Department of the Treasury, or if the auction is not held, then the Treasury Rate will be the Bond Equivalent Yield of the rate on the Treasury Rate determination date of the applicable treasury securities published in H.15(519) under the heading "U.S. Government Securities/Treasury Bills/Secondary Market." (4) If the rate referred to in clause (3) is not so published by 3:00 p.m., New York City time, on the related calculation date, then the Treasury Rate will be the rate on the Treasury Rate determination date of the applicable treasury securities as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the heading "U.S. Government Securities/Treasury Bills/Secondary Market." (5) If the rate referred to in clause (4) is not so published by 3:00 p.m., New York City time, on the related calculation date, then the Treasury Rate will be the rate on the Treasury Rate determination date calculated by the calculation agent as the Bond Equivalent Yield of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 p.m., New York City time, on the Treasury Rate determination date, of three primary United States government securities dealers selected by the calculation agent, for the issue of treasury securities with a remaining maturity closest to the index maturity specified in the applicable pricing supplement. (6) If the dealers selected by the calculation agent are not quoting bid rates as mentioned in (5) above, then the Treasury Rate for such interest reset period will be the same as the Treasury Rate for the immediately preceding interest reset period. If there was no preceding interest reset period, the Treasury Rate will be the initial interest rate. The Treasury Rate determination date for each interest reset period will be the day of the week in which the interest reset date for that interest reset period falls on which treasury securities would normally be auctioned. Treasury securities are normally sold at auction on Monday of each week unless that day is a legal holiday. In that case the auction is normally held on the following Tuesday, except that the auction may be held on the preceding Friday. If, as the result of a legal holiday, an auction is held on the preceding Friday, that Friday will be the Treasury Rate determination date pertaining to the interest reset period commencing in the next succeeding week. If an auction date falls on any day that would otherwise be an interest reset date for a Treasury Rate note, then that interest reset date will instead be the business day immediately following the auction date. Bond Equivalent: Yield will be calculated as follows: Bond Equivalent Yield = D X N X 100 ------------- 360 - (D X M)
where "D" refers to the applicable per annum rate for treasury securities quoted on a bank discount basis and expressed as a decimal, "N" refers to 365 or 366, as the case may be, and "M" refers to the actual number of days in the applicable interest reset period. Constant Maturity Treasury Rate Notes If "Constant Maturity" is specified in the applicable pricing supplement, the Treasury Rate for each interest reset period will be the rate displayed on the designated CMT Telerate page under the caption S-17 "Treasury Constant Maturities" under the column for the designated CMT maturity index in the following manner. - If the designated CMT Moneyline Telerate page is 7051, the Treasury Rate will be the rate on the Constant Maturity Treasury Rate determination date. - If the rate referred to above does not appear on Moneyline Telerate Page 7051, then the Treasury Rate will be the treasury constant maturity rate for the designated CMT maturity index as published in the relevant H.15(519) under the caption "Treasury Constant Maturities." - If the rate referred to above does not so appear in H.15(519), then the Treasury Rate will be the constant treasury maturity rate on the Constant Maturity Treasury Rate determination date for the designated CMT maturity index as may then be published by either the Federal Reserve System Board of Governors or the United States Department of the Treasury that the calculation agent determines to be comparable to the rate which would have otherwise been published in H.15(519). - If the designated CMT Moneyline Telerate page is 7052, the Treasury Rate will be the average for the week or for the month, as specified in the applicable pricing supplement, ended immediately preceding the week or month, as applicable, in which the related Constant Maturity Treasury Rate determination date occurs. - If the rate referred to above does not appear on Moneyline Telerate Page 7052, then the Treasury Rate will be the one-week or one-month, as specified in the applicable pricing supplement, average of the treasury constant maturity rate for the designated CMT maturity index for the week or month as applicable, preceding the Constant Maturity Treasury determination date as published in the relevant H.15(519) under the caption "Treasury Constant Maturities." - If the rate referred to above does not so appear in H.15(519), then the Treasury Rate will be the one-week or one-month, as specified in the applicable pricing supplement, average of the constant treasury maturity rate for the designated CMT maturity index as otherwise announced by the Federal Reserve Bank of New York for the week or month, as applicable, ended immediately preceding the week or month, as applicable, in which the Constant Maturity Treasury Rate determination date falls. If the Treasury Rate cannot be determined as indicated above, the following procedures will be followed in the order set forth below: (1) If the above information, as applicable, is not so published, then the calculation agent will calculate the Treasury Rate on the Constant Maturity Treasury Rate determination date as follows: - The Treasury Rate will be a yield to maturity based on the arithmetic mean of the secondary market bid prices as of approximately 3:30 p.m., New York City time, on the Constant Maturity Treasury Rate determination date of three leading U.S. government securities dealers in New York City, for Treasury notes. The Treasury notes will be United States treasury securities, with an original maturity of approximately the designated CMT maturity index and a remaining term to maturity of not less than such designated CMT maturity index minus one year and in a principal amount that is representative for a single transaction in the securities in that market at that time. - The three government securities dealers referenced above will be identified from five such dealers who are selected by the calculation agent, one of which may be the agent, by eliminating the dealers with the highest and lowest quotations, or in the event of equality, one of the highest and/or lowest quotation, as the case may require. S-18 (2) If three or four, but not five, of such dealers provide quotations as described above, then the Treasury Rate will be based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of such quotes will be eliminated. (3) If the calculation agent is unable to obtain three such Treasury note quotations as described in (1) above, the Treasury Rate on such Constant Maturity Treasury Rate determination date will be calculated by the calculation agent as follows. - The rate will be a yield to maturity based on the arithmetic mean of the secondary market bid prices as of approximately 3:30 p.m., New York City time, on the Constant Maturity Treasury Rate determination date reported, according to their written records, by three leading U.S. government securities dealers in New York City, for Treasury notes with an original maturity of the number of years that is the next highest to the designated CMT maturity index and a remaining maturity closest to the index maturity specified in the applicable pricing supplement, and in an amount that is representative for a single transaction in that market at that time. - If two Treasury notes with an original maturity, as described above, have remaining terms to maturity equally close to the designated CMT maturity index, the calculation agent will obtain quotations for the Treasury note with the shorter remaining term to maturity and will use such quotations to calculate the Treasury Rate as set forth above. - The three government securities dealers referenced above will be identified from five such dealers who are selected by the calculation agent, one of which may be the agent, by eliminating the dealers with the highest and lowest quotations, or in the event of equality, one of the highest and/or lowest quotation, as the case may require. (4) If three or four, but not five, of such dealers provide quotations as described above, then the Treasury Rate will be based on the arithmetic mean of the offer prices obtained and neither the highest nor the lowest of such quotes will be eliminated. (5) If fewer than three dealers selected by the calculation agent provide quotations as described in (3) above, the Treasury Rate determined as of the Constant Maturity Treasury Rate determination date will be the Treasury Rate in effect on such Constant Maturity Treasury Rate determination date. "Designated CMT Moneyline Telerate page" means the display on the Telerate Service, or any successor service on the page specified in the applicable pricing supplement, or any other page as may replace such page on that service, or any successor service, for the purpose of displaying Treasury Constant Maturities as reported in H.15(519). If no such page is specified in the applicable pricing supplement, the designated CMT Telerate page will be 7052 for the most recent week. "Designated CMT maturity index" means the original period to maturity of the U.S. Treasury securities, either one, two, three, five, seven, ten, twenty or thirty years, specified in the applicable pricing supplement for which the Treasury Rate will be calculated. If no such maturity is specified in the applicable pricing supplement, the designated CMT maturity index will be two years. The "Constant Maturity Treasury Rate determination date" will be the second business day prior to the interest reset date for the applicable interest reset period. The CMT Rate for a Treasury security maturity as published as of any business day is intended to be indicative of the yield of a U.S. Treasury security having as of that business day a remaining term to maturity equivalent to its maturity. The CMT Rate as of any business day is based upon an interpolation by the U.S. Treasury of the daily yield curve of outstanding Treasury securities. This yield curve, which relates the yield on a security to its time to maturity, is based on the over-the-counter market bid yields on actively traded Treasury securities. Such yields are calculated from composites of quotations reported by leading U.S. government securities dealers, which may include one or more of the calculation agents or other affiliates of Citigroup Global Markets Holdings. Certain constant maturity yield values are read from S-19 the yield curve. Interpolation from the yield curve provides a theoretical yield for a Treasury security having ten years to maturity, for example, even if no outstanding Treasury security has as of that date exactly ten years remaining to maturity. Prime Rate Notes. Prime Rate notes will bear interest at a rate equal to the Prime Rate and any spread or spread multiplier specified in the Prime Rate notes and the applicable pricing supplement. The calculation agent will determine the Prime Rate for each interest reset period on each Prime Rate determination date. The Prime Rate determination date is the second business day prior to the interest reset date for each interest reset period. The Prime Rate will be the rate made available and subsequently published on that date in H.15(519) under the heading "Bank Prime Loan." The following procedures will be followed if the Prime Rate cannot be determined as described above. - If the rate is not published prior to 3:00 P.M., New York City time, on the related calculation date, then the Prime Rate will be the rate on the Prime Rate determination date that is published in the H.15 Daily Update under the heading "Bank Prime Loan." - If the rate referred to above is not published prior to 3:00 P.M., New York City time, on the related calculation date, then the Prime Rate will be the arithmetic mean of the rates of interest that appear on the Reuters Screen USPRIME1 page as such bank's prime rate or base lending rate on the Prime Rate determination date. - If fewer than four such rates appear on the Reuters Screen USPRIME1 page, then the calculation agent will select three major banks in New York City. The Prime Rate will be the arithmetic mean of the prime rates quoted by those three banks on the basis of the actual number of days in the year divided by a 360-day year as of the close of business on the Prime Rate determination date. - If the banks that the calculation agent selects do not provide quotations as described above, then the Prime Rate will remain the same as the Prime Rate in effect on the Prime Rate determination date. "Reuters Screen USPRIME1 page" means the display designated as page "USPRIME1" on the Reuters Monitor Money Rates Service, or any successor service or page, for the purpose of displaying prime rates or base lending rates of major United States banks. Inverse Floating Rate Notes. Any floating rate note may be designated in the applicable pricing supplement as an inverse floating rate note. In such an event, unless otherwise specified in the applicable pricing supplement, the interest rate on the floating rate note will be equal to: - in the case of the period, if any, commencing on the issue date, or the date on which the note otherwise begins to accrue interest if different from the issue date, up to the first interest reset date, a fixed rate of interest established by Citigroup Global Markets Holdings as described in the applicable pricing supplement; and - in the case of each period commencing on an interest reset date, a fixed rate of interest specified in the pricing supplement minus the interest rate determined based on the base rate as adjusted by any spread and/or spread multiplier. However, on any inverse floating rate note, the interest rate will not be less than zero. Floating/Fixed Rate Notes. The applicable pricing supplement may provide that a note will be a floating rate note for a specified portion of its term and a fixed rate note for the remainder of its term. In such an event, the interest rate on the note will be determined as if it were a floating rate note and a fixed rate note for each respective period, all as specified in the applicable pricing supplement. S-20 INDEXED NOTES Citigroup Global Markets Holdings may from time to time offer indexed notes on which some or all interest payments, in the case of an indexed rate note, and/or the principal amount payable at stated maturity or earlier redemption or retirement, in the case of an indexed principal note, is determined based on: - the principal amount of the notes or, in the case of an indexed principal note, the amount designated in the applicable pricing supplement as the "face amount" of the indexed note; and - an index, which may be based on: (1) prices, changes in prices, or differences between prices, of one or more securities, currencies, intangibles, goods, articles or commodities; (2) the application of a formula; or (3) an index which shall be such other objective price, economic or other measures as are described in the applicable pricing supplement. A description of the index used in any determination of an interest or principal payment, and the method or formula by which interest or principal payments will be determined based on such index, will be set forth in the applicable pricing supplement. If a fixed rate note, floating rate note or indexed rate note is also an indexed principal note, the amount of any interest payment will be determined based on the face amount of that indexed note unless specified otherwise in the applicable pricing supplement. If an indexed note is also an indexed principal note, the principal amount payable at stated maturity or any earlier redemption or repayment of the indexed note may be different from the face amount. If a third party is appointed to calculate or announce the index for a particular indexed note, and the third party either (1) suspends the calculation or announcement of that index or (2) changes the basis upon which the index is calculated in a manner that is inconsistent with the applicable pricing supplement, then Citigroup Global Markets Holdings will select another third party to calculate or announce the index. Citigroup Global Markets Inc. or another affiliate of Citigroup Global Markets Holdings may be either the original or successor third party selected by Citigroup Global Markets Holdings. If for any reason the index cannot be calculated on the same basis and subject to the same conditions and controls as applied to the original third party, then any indexed interest payments or any indexed principal amount of the indexed note will be calculated in the manner set forth in the applicable pricing supplement. Any determination by the selected third party will be binding on all parties, except in the case of an obvious error. Unless otherwise specified in the applicable pricing supplement, for the purpose of determining whether holders of the requisite principal amount of notes outstanding under the applicable indenture have made a demand or given a notice or waiver or taken any other action, the outstanding principal amount of indexed notes will be deemed to be the face amount stated on the notes. Unless otherwise specified in the applicable pricing supplement, in the event of an acceleration of the stated maturity of an indexed note, the principal amount payable to the holder of the note upon acceleration will be the principal amount determined based on the formula used to determine the principal amount of the note on the stated maturity of the note, as if the date of acceleration were the stated maturity. An investment in indexed notes has significant risks, including wide fluctuations in market value as well as in the amounts of payments due, that are not associated with a similar investment in a conventional debt security. These risks depend on a number of factors including supply and demand for the particular security, currency, commodity or other good or article to which the note is indexed and economic and political events over which Citigroup Global Markets Holdings has no control. See "Risk Factors -- Changes in the Value of Underlying Assets of Indexed Notes Could Result in a Substantial Loss to You" above for a discussion of these considerations. S-21 Fluctuations in the price of any particular security or commodity, in the rates of exchange between particular currencies or in particular indices that have occurred in the past are not necessarily indicative, however, of fluctuations in the price or rates of exchange that may occur during the term of any indexed notes. Accordingly, prospective investors should consult their own financial and legal advisors as to the risks of an investment in indexed notes. OPTIONAL REDEMPTION, REPAYMENT AND REPURCHASE The pricing supplement relating to each note will indicate whether the note can be redeemed at the option of Citigroup Global Markets Holdings, in whole or in part prior to its stated maturity. The applicable pricing supplement will also indicate (1) the optional redemption date or dates on which the note may be redeemed and (2) the redemption price at which, together with accrued interest to such optional redemption date, the note may be redeemed on each optional redemption date. Unless otherwise specified in the applicable pricing supplement, at least 30 days prior to the date of redemption, the paying agent will mail notice of redemption, first class, postage prepaid, to the holder of the note and to the trustee. Unless otherwise specified in the applicable pricing supplement, Citigroup Global Markets Holdings may exercise the option relating to a redemption of a note in part only by notifying the paying agent and the trustee for such note at least 60 days prior to any optional redemption date. In the event of redemption of a note in part only, a new note or notes for the unredeemed portion of the note or notes will be issued to the holder of that note or notes upon the cancellation of the note or notes. Unless otherwise specified in the applicable pricing supplement, the notes may not be redeemed. The pricing supplement relating to each note will also indicate whether the holder of that note will have the option to elect repayment of the note by Citigroup Global Markets Holdings prior to its stated maturity. If so, the pricing supplement will specify (1) the optional repayment date or dates on which the note may be repaid and (2) the optional repayment price. The optional repayment price is the price at which, together with accrued interest to such optional repayment date, the note may be repaid on each optional repayment date. In order for a note to be repaid, the paying agent and the trustee must receive, at least 30 but not more than 60 days prior to an optional repayment date: (1) the form entitled "Option to Elect Repayment" on the reverse of the note duly completed; or (2) a telex, facsimile transmission or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc. or a commercial bank or trust company in the United States setting forth: - the name of the holder of the note; - the principal amount of the note to be repaid; - the certificate number or a description of the tenor and terms of the note; - a statement that the option to elect repayment is being exercised; and - a guarantee that the form entitled "Option to Elect Repayment" on the reverse of the note duly completed will be received by the trustee not later than five business days after the date of the telex, facsimile transmission or letter. If the guarantee procedure described in clause (2) above is followed, then the repayment form duly completed must be received by the trustee by the fifth business day. Exercise of the repayment option by the holder is irrevocable. The repayment option may be exercised by the holder of a note for less than the entire principal amount of the note, provided, that the principal amount of the note remaining outstanding after repayment is an authorized denomination. Because the notes will be issued in book-entry form (except in very limited circumstances), DTC's nominee will be the holder of the note and, therefore, will be the only entity that can exercise a right to S-22 repayment. In order to ensure that DTC's nominee will timely exercise a right to repayment relating to a particular note, the beneficial owner of that note must instruct the broker or other direct or indirect participant through which it holds an interest in the note to notify DTC of its desire to exercise a right to repayment. Different firms have different cut-off times for accepting instructions from their customers. Accordingly, each beneficial owner should consult the broker or other direct or indirect participant through which it holds an interest in a note in order to ascertain the cut-off time by which such an instruction must be given in order for timely notice to be delivered to DTC. Except in the case of an optional redemption by Citigroup Global Markets Holdings at a stated redemption price provided for in the applicable pricing supplement, if Citigroup Global Markets Holdings redeems or repays a note that is an original issue discount note prior to its stated maturity, then Citigroup Global Markets Holdings will pay the amortized face amount of the note as of the date of redemption or repayment regardless of anything else stated in this prospectus supplement. The amortized face amount of a note on any date means the amount equal to: - the issue price set forth in the applicable pricing supplement plus - that portion of the difference between the issue price and the stated principal amount of the note that has accrued by that date at (1) the bond yield to maturity set forth on the face of the applicable pricing supplement, or (2) if so specified in the applicable pricing supplement, the bond yield to call set forth on the face of the note. These computations will be made in accordance with generally accepted United States bond yield computation principles. However, the amortized face amount of a note will never exceed its stated principal amount. The bond yield to call listed in a pricing supplement will be computed on the basis of: - the first occurring optional redemption date with respect to the note; and - the amount payable on the optional redemption date. In the event that any note is not redeemed on the first occurring optional redemption date, the bond yield to call that applies to the note will be recomputed on the optional redemption date on the basis of (1) the next occurring optional redemption date and (2) the amount payable on the optional redemption date. The bond yield to call will continue to be so recomputed on each succeeding optional redemption date until the note is so redeemed. Citigroup Global Markets Holdings may at any time purchase notes at any price in the open market or otherwise. Notes so purchased by Citigroup Global Markets Holdings may, at the discretion of Citigroup Global Markets Holdings, be held, resold or surrendered to the trustee for cancellation. REPAYMENT UPON DEATH The pricing supplement relating to any note will indicate if the holder of that note will have the survivor's option, which is an option to elect repayment of the note prior to its stated maturity in the event of the death of the beneficial owner of the note. Such note must have been owned by that beneficial owner or the estate of that beneficial owner at least one year prior to the exercise of the survivor's option. Pursuant to exercise of the survivor's option, Citigroup Global Markets Holdings will repay any note (or applicable portion of any note) properly tendered for repayment by a representative of that person who has authority to act on behalf of the deceased beneficial owner of the note under the laws of the appropriate jurisdiction (including, without limitation, the personal representative, executor, surviving joint tenant or surviving tenant by the entirety of such deceased beneficial owner), at a price equal to the amortized face amount thereof plus accrued interest to the date of such repayment, subject to the following limitations. S-23 Citigroup Global Markets Holdings may, in its sole discretion, limit the aggregate principal amount of all notes of this series for which exercises of the survivor's option will be accepted in any calendar year to an amount equal to the greater of $2,500,000 or 1% of the principal amount of all of the notes of this series outstanding as of the end of the most recent calendar year. In the event that such limitation is applied, Citigroup Global Markets Holdings may limit to $250,000 the aggregate principal amount of notes (or portions of notes) of this series for which exercise of the survivor's option will be accepted during a calendar year for any individual deceased beneficial owner of notes. Moreover, Citigroup Global Markets Holdings will not make principal repayments due to exercise of the survivor's option in amounts that are less than $1,000. In the event that the limitations described in the preceding sentences would result in the partial repayment of any note, the principal amount of such note remaining outstanding after repayment must be at least $1,000. A valid exercise of the survivor's option may not be withdrawn. The death of a person holding a beneficial ownership interest in a note as a joint tenant with right of survivorship or tenant by the entirety with another person, or as a tenant in common with the deceased holder's spouse, will be deemed the death of a beneficial owner of that note, and the entire principal amount of the note so held, plus accrued interest to the date of repayment, will be subject to repayment upon exercise of the survivor's option. However, the death of a person holding a beneficial ownership interest in a note as tenant in common with a person other than such deceased holder's spouse will be deemed the death of a beneficial owner only with respect to such deceased person's interest in the note. The death of a person who, during his or her lifetime, was entitled to substantially all of the beneficial ownership interests in a note, will be deemed the death of the beneficial owner of that note for purposes of the survivor's option, regardless of whether that beneficial owner was the registered holder of that note, if entitlement to those interests can be established to the satisfaction of Citigroup Global Markets Holdings and the paying agent. Such beneficial ownership interest will be deemed to exist in typical cases of nominee ownership, ownership under the Uniform Transfers to Minors Act or Uniform Gifts to Minors Act, community property or other joint ownership arrangements between a husband and wife. In addition, a beneficial ownership interest will be deemed to exist in custodial and trust arrangements where one person has all of the beneficial ownership interests in the applicable note during his or her lifetime. The amortized face amount of a note on any date shall be the amount equal to - the issue price set forth on the face of the applicable pricing supplement plus - that portion of the difference between the issue price and the stated principal amount of the note that has accrued by such date at (1) the bond yield to maturity set forth on the face of the applicable pricing supplement or (2) if so specified in the applicable pricing supplement, the bond yield to call printed on its face. Such yield will be computed in each case in accordance with generally accepted United States bond yield computation principles. However, the amortized face amount of a note shall never exceed its stated principal amount. The bond yield to call listed on the face of a pricing supplement shall be computed on the basis of the first occurring optional redemption date for that note and the amount payable on the optional redemption date. If any note is not redeemed on its first optional redemption date, the bond yield to call for that note will be recomputed on the optional redemption date on the basis of the next occurring optional redemption date and the amount payable on that optional redemption date, and will continue to be so recomputed on each succeeding optional redemption date until the note is redeemed. Each note that is tendered pursuant to valid exercise of the survivor's option will be accepted promptly in the order all such notes are tendered, except for any note (or portions thereof) the acceptance S-24 of which, in the event Citigroup Global Markets Holdings imposed either of the limits described in the preceding paragraph, would - contravene the annual limitation for this series or - result in the acceptance during the then current calendar year of an aggregate principal amount of notes (or portions thereof) of this series exceeding $250,000 for the relevant individual deceased beneficial owner. If at the end of the calendar year Citigroup Global Markets Holdings has not imposed the annual limit for this series or if the aggregate principal amount of notes of this series that have been accepted during that year due to exercise of the survivor's option has not exceeded the annual limitation for this series, Citigroup Global Markets Holdings may accept notes from individual deceased owners in amounts that exceed the normal $250,000 per-person limit. In this case, Citigroup Global Markets Holdings will accept notes or portions of notes exceeding the $250,000 limit in the order they were received, up to the annual limitation for that calendar year. Any note or portion of a note accepted for repayment due to the exercise of the survivor's option will be repaid on the first January 15 or July 15 that occurs 20 or more calendar days after the date of such acceptance. If that date is not a business day, payment will be made on the next succeeding business day. Each note (or any portion thereof) tendered for repayment that is not accepted in any calendar year due to the application of such annual limitation will be deemed to be tendered in the following calendar year in the order in which all such notes were originally tendered. If a note (or any portion thereof) that is tendered for repayment due to the valid exercise of the survivor's option is not accepted, the paying agent will deliver to any affected representative a notice that states the reasons the note (or portion thereof) has not been accepted for repayment. The notice will be sent by first-class mail to the broker or other entity that represents the deceased beneficial owner of the note (or, in the case of a certificated note, to the registered holder thereof at its last known address as indicated on the records of the security registrar). Subject to the foregoing, in order for a survivor's option to be validly exercised, the paying agent must receive: - a written request for repayment signed by the representative. Such signature must be guaranteed by a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc. or a commercial bank or trust company having an office or correspondent in the United States; - appropriate evidence satisfactory to Citigroup Global Markets Holdings and the paying agent that (1) the representative has authority to act on behalf of the deceased beneficial owner; (2) the death of such beneficial owner has occurred; and (3) the deceased was the beneficial owner of such note at the time of death; - if applicable, a properly executed assignment or endorsement; and - if the note is held by a nominee of the deceased beneficial owner, a certificate satisfactory to the paying agent from that nominee attesting to the beneficial ownership of the note. All questions as to the eligibility or validity of any exercise of the survivor's option will be determined by Citigroup Global Markets Holdings, in its sole discretion, and those determinations will be final and binding on all parties. Because the notes will be issued in book-entry form (except in very limited circumstances), the depositary's nominee will be the holder of that note and therefore will be the only entity that can exercise the survivor's option for the note. To obtain repayment upon exercise of the survivor's option for a note, S-25 the representative must provide to the broker or other entity through which the deceased beneficial owner holds an interest in the note: - the documents described in the first and second bullet points of the preceding paragraph; and - instructions to the broker or other entity to notify the depositary of the representative's desire to obtain repayment pursuant to exercise of the survivor's option. The broker or other entity will provide to the paying agent: - the documents received from the representative referred to in the first bullet point of the preceding paragraph; and - a certificate satisfactory to the paying agent from the broker or other entity stating that it represents the deceased beneficial owner. The broker or other entity will be responsible for disbursing to the appropriate representative any payments it receives due to exercise of the survivor's option. A representative may obtain more information regarding the survivor's option from Citibank, N.A., the paying agent, at 111 Wall Street, 15th Floor, New York, New York 10005 Attention: Citibank Agency and Trust Customer Service (telephone 1-800-422-2066), during normal business hours. BOOK-ENTRY SYSTEM All of the notes are expected to be issued in book-entry form only. Upon issuance, and unless the rules of DTC state otherwise, all notes issued in book-entry form will be represented by a fully registered master global note certificate. The master global note representing the book-entry notes will be deposited with, or on behalf of, DTC and registered in the name of a nominee of DTC. Book-entry notes will not be exchangeable for certificated notes and, except under the circumstances described in the prospectus under "Book-Entry Procedures and Settlement," will not otherwise be issuable as certificated notes. If the book-entry notes are exchanged for certificated notes, the paying agent will keep the registration books at its corporate office and follow the procedures prescribed in the indenture and other customary practices and procedures. A further description of DTC's procedures regarding book-entry notes is set forth in the prospectus under "Book-Entry Procedures and Settlement." DTC has confirmed to Citigroup Global Markets Holdings, the agents and the trustee that it intends to follow such procedures. OTHER PROVISIONS The terms in the applicable pricing supplement may modify any provisions relating to: - the determination of an interest rate basis; - the specification of an interest rate basis; - calculation of the interest rate applicable to, or the principal payable at maturity on, any note; - interest payment dates; or - any other related matters. DEFEASANCE The defeasance provisions described in the prospectus will not be applicable to the notes except as set forth in the applicable pricing supplement. S-26 CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS INTRODUCTION The following is a summary of the material United States federal income tax considerations that may be relevant to a holder of a note. The summary is based on: - laws; - regulations; - rulings; and - decisions now in effect, all of which may change, possibly with retroactive effect. This summary deals only with holders that will hold notes as capital assets. This summary does not address all of the United States federal income tax considerations that may be relevant to a beneficial owner of notes. For example, this summary does not address tax considerations applicable to investors to whom special tax rules may apply, including, without limitation: - banks or other financial institutions; - tax-exempt entities; - insurance companies; - regulated investment companies; - common trust funds; - entities that are treated for United States federal income tax purposes as partnerships or other pass-through entities; - controlled foreign corporations; - dealers in securities or currencies; - traders in securities that elect mark to market; - persons that will hold notes as a part of an integrated investment, including a straddle, a synthetic security or hedge or a conversion transaction, comprised of a note and one or more other positions; or - United States holders (as defined below) that have a functional currency other than the U.S. dollar. Any special United States federal income tax considerations relevant to a particular issue of notes, including any indexed notes or notes providing for contingent payments, will be provided in the applicable pricing supplement. Purchasers of such notes should carefully examine the applicable pricing supplement and should consult with their tax advisors with respect to those notes. Prospective investors should consult their tax advisors in determining the tax consequences to them of purchasing, holding and disposing of the notes, including the application to their particular situation of the United States federal income tax considerations discussed below, as well as the application of state, local, foreign or other tax laws. S-27 As used in this prospectus supplement, the term United States holder means: - a citizen or resident of the United States; - a corporation or other entity treated as a corporation created or organized in or under the laws of the United States or any political subdivision thereof; - an estate, if United States federal income taxation is applicable to the income of such estate regardless of its source; or - a trust, if a United States court is able to exercise primary supervision over the trust's administration and one or more United States persons have the authority to control all of the trust's substantial decisions. As used in this summary, the term "non-United States holder" means a holder who is not a United States holder and the term "United States" means the United States of America, including the fifty states and the District of Columbia, but excluding its territories and possessions. UNITED STATES HOLDERS Payments of Interest Payments of qualified stated interest, as defined below under "Original Issue Discount," on a note will be taxable to a United States holder as ordinary interest income at the time that such payments are accrued or are received, in accordance with the United States holder's method of tax accounting. Purchase, Sale and Retirement of Notes A United States holder's tax basis in a note generally will equal the cost of that note to such holder (1) increased by any amounts includible in income by the holder as original issue discount ("OID") and market discount (each as described below) and (2) reduced by any amortized premium and any payments other than payments of qualified stated interest (each as described below) made on the note. Upon the sale, exchange, retirement or other taxable disposition (collectively, a "disposition") of a note, a United States holder generally will recognize gain or loss equal to the difference between (1) the amount realized on the disposition, less any accrued qualified stated interest, which will be taxable as ordinary income in the manner described above under "Payments of Interest," and (2) the United States holder's adjusted tax basis in the note. Except as discussed below in connection with market discount and short-term notes, gain or loss recognized by a United States holder on the sale, exchange, retirement or other taxable disposition of a note will generally be long term capital gain or loss if the United States holder's holding period for the note exceeded one year at the time of such disposition. Original Issue Discount In General. Notes with a term greater than one year may be issued with OID for United States federal income tax purposes. Such notes are called OID notes in this prospectus supplement. United States holders generally must accrue OID in gross income over the term of the OID notes on a constant yield basis, regardless of their regular method of tax accounting. As a result, United States holders generally will recognize taxable income in respect of an OID note in advance of the receipt of cash attributable to such income. S-28 OID generally will arise if the stated redemption price at maturity of the note exceeds its issue price by more than a de minimis amount equal to 0.25% of the note's stated redemption price at maturity multiplied by the number of complete years to maturity. OID may also arise if a note has particular interest payment characteristics, such as interest holidays, interest payable in additional securities or stepped interest. For this purpose, the issue price of a note is the first price at which a substantial amount of notes is sold for cash, other than to bond houses, brokers or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers. The stated redemption price at maturity of a note is the sum of all payments due under the note, other than payments of qualified stated interest. The term qualified stated interest generally means stated interest that is unconditionally payable in cash or property, other than debt instruments of the issuer, at least annually during the entire term of the OID note at a single fixed rate of interest or, under particular conditions, based on one or more interest indices. For each taxable year of a United States holder, the amount of OID that must be included in gross income in respect of an OID note will be the sum of the daily portions of OID for each day during that taxable year or any portion of the taxable year in which such a United States holder held the OID note. Such daily portions are determined by allocating to each day in an accrual period a pro rata portion of the OID allocable to that accrual period. Accrual periods may be of any length and may vary in length over the term of an OID note. However, accrual periods may not be longer than one year and each scheduled payment of principal or interest must occur on the first day or the final day of a period. The amount of OID allocable to any accrual period generally will equal (1) the product of the OID note's adjusted issue price at the beginning of the accrual period multiplied by its yield to maturity (as adjusted to take into account the length of the accrual period), less (2) the amount, if any, of qualified stated interest allocable to that accrual period. The adjusted issue price of an OID note at the beginning of any accrual period will equal the issue price of the OID note, as defined above, (1) increased by previously accrued OID from prior accrual periods, and (2) reduced by any payment made on the note, other than payments of qualified stated interest, on or before the first day of the accrual period. Acquisition Premium. A United States holder that purchases an OID note for an amount less than or equal to the remaining redemption amount, but in excess of the OID note's adjusted issue price, generally is permitted to reduce the daily portions of OID by a fraction. The numerator of this fraction is the excess of the United States holder's adjusted tax basis in the OID note immediately after its purchase over the OID note's adjusted issue price. The denominator of the fraction is the excess of the remaining redemption amount over the OID note's adjusted issue price. For purposes of this prospectus supplement, - "acquisition premium" means the excess of the purchase price paid by a United States holder for an OID note over the OID note's adjusted issue price; and - "remaining redemption amount" means the sum of all amounts payable on an OID note after the purchase date other than payments of qualified stated interest. The notes may have special redemption, repayment or interest rate reset features, as indicated in the applicable pricing supplement. Notes containing such features, in particular OID notes, may be subject to special rules that differ from the general rules discussed above. Accordingly, purchasers of notes with such features should carefully examine the applicable pricing supplement and should consult their tax advisors relating to such notes. Market Discount If a United States holder purchases a note, other than a short-term note, for an amount that is less than the note's stated redemption price at maturity or, in the case of an OID note, for an amount that is less than the note's revised issue price, i.e., the note's issue price increased by the amount of accrued OID, the note will be considered to have market discount. The market discount rules are subject to a de minimis rule similar to the rule relating to de minimis OID, described above (in the second paragraph under "Original Issue Discount"). Any gain recognized by the United States holder on the sale, exchange, S-29 retirement or other taxable disposition of notes having market discount generally will be treated as ordinary income to the extent of the market discount that accrued on the note while held by such United States holder. Alternatively, the United States holder may elect to include market discount in income currently over the life of the note. Such an election will apply to market discount notes acquired by the United States holder on or after the first day of the first taxable year to which such election applies and may be revoked only with the consent of the IRS. Market discount will accrue on a straight-line basis unless the United States holder elects to accrue the market discount on a constant-yield method. Unless the United States holder elects to include market discount in income on a current basis, as described above, the United States holder could be required to defer the deduction of a portion of the interest paid on any indebtedness incurred or maintained to purchase or carry the note. Short-Term Notes The rules set forth above also will generally apply to notes having maturities of not more than one year from the date of issuance. Those notes are called short-term notes in this prospectus supplement. Certain modifications apply to these general rules. First, none of the interest on a short-term note is treated as qualified stated interest. Instead, interest on a short-term note is treated as part of the short-term note's stated redemption price at maturity, thereby giving rise to OID. Thus, all short-term notes will be OID notes. OID will be treated as accruing on a short-term note ratably, or at the election of a United States holder, under a constant yield method. Second, a United States holder of a short-term note that uses the cash method of tax accounting will generally not be required to include OID in respect of the short-term note in income on a current basis. Such a United States holder may not be allowed to deduct all of the interest paid or accrued on any indebtedness incurred or maintained to purchase or carry such note until the maturity of the note or its earlier disposition in a taxable transaction. In addition, such a United States holder will be required to treat any gain realized on a disposition of the note as ordinary income to the extent of the holder's accrued OID on the note, and as short-term capital gain to the extent the gain exceeds accrued OID. A United States holder of a short-term note using the cash method of tax accounting may, however, elect to accrue OID into income on a current basis. In such case, the limitation on the deductibility of interest described above will not apply. A United States holder using the accrual method of tax accounting generally will be required to include OID on a short-term note in income on a current basis. Third, any United States holder of a short-term note, whether using the cash or accrual method of tax accounting, can elect to accrue the acquisition discount, if any, on the note on a current basis. If such an election is made, the OID rules will not apply to the note. Acquisition discount is the excess of the note's stated redemption price at maturity over the holder's purchase price for the note. Acquisition discount will be treated as accruing ratably or, at the election of the United States holder, under a constant-yield method based on daily compounding. As described above, the notes may have special redemption features. These features may affect the determination of whether a note has a maturity of not more than one year and thus is a short-term note. Purchasers of notes with such features should carefully examine the applicable pricing supplement and should consult their tax advisors in relation to such features. Notes Purchased at a Premium A United States holder that purchases a note for an amount in excess of the remaining redemption amount will be considered to have purchased the note at a premium and the OID rules will not apply to such holder. Such holder may elect to amortize such premium, as an offset to interest income, using a constant-yield method, over the remaining term of the note. Such election, once made, generally applies to S-30 all debt instruments held or subsequently acquired by the United States holder on or after the beginning of the first taxable year to which the election applies. Such election may be revoked only with the consent of the IRS. A United States holder that elects to amortize such premium must reduce its tax basis in a note by the amount of the premium amortized during its holding period. For a United States holder that does not elect to amortize bond premium, the amount of such premium will be included in the United States holder's tax basis when the note matures or is disposed of by the United States holder. Therefore, a United States holder that does not elect to amortize premium and holds the note to maturity will generally be required to treat the premium as capital loss when the note matures. See "Original Issue Discount -- Acquisition Premium" above for a discussion of the treatment of a note purchased for an amount less than or equal to the remaining redemption amount but in excess of the note's adjusted issue price. Information Reporting and Backup Withholding Information returns may be required to be filed with the IRS relating to payments made to particular United States holders of notes. In addition, United States holders may be subject to a backup withholding tax on such payments if they do not provide their taxpayer identification numbers to the trustee in the manner required, fail to certify that they are not subject to backup withholding tax, or otherwise fail to comply with applicable backup withholding tax rules. United States holders may also be subject to information reporting and backup withholding tax with respect to the proceeds from a sale, exchange, retirement or other taxable disposition of the notes. Any amounts withheld under the backup withholding rules will be allowed as a credit against the United States holder's United States federal income tax liability provided the required information is timely furnished to the IRS. NON-UNITED STATES HOLDERS Under current United States federal income tax law: - withholding of United States federal income tax will not apply to a payment on a note to a non-United States holder, provided that, (1) the holder does not actually or constructively own 10% or more of the total combined voting power of all classes of stock of Citigroup Global Markets Holdings entitled to vote and is not a controlled foreign corporation related to Citigroup Global Markets Holdings through stock ownership; (2) the beneficial owner provides a statement signed under penalties of perjury that includes its name and address and certifies that it is a non-United States holder in compliance with applicable requirements; and (3) neither Citigroup Global Markets Holdings nor its paying agent has actual knowledge or reason to know that the beneficial owner of the note is a United States holder. - withholding of United States federal income tax will generally not apply to any gain realized on the disposition of a note. Despite the above, if a non-United States holder is engaged in a trade or business in the United States (or, if certain tax treaties apply, if the non-United States holder maintains a permanent establishment within the United States) and the interest on the notes is effectively connected with the conduct of that trade or business (or, if certain tax treaties apply, attributable to that permanent establishment), such non-United States holder will be subject to United States federal income tax on the interest on a net income basis in the same manner as if such non-United States holder were a United States holder. In addition, a non-United States holder that is a foreign corporation engaged in a trade or S-31 business in the United States may be subject to a 30% (or, if certain tax treaties apply, such lower rates as provided) branch profits tax. Any gain realized on the disposition of a note generally will not be subject to United States federal income tax unless: - that gain is effectively connected with the non-United States holder's conduct of a trade or business in the United States (or, if certain tax treaties apply, is attributable to a permanent establishment maintained by the non-United States holder within the United States); or - the non-United States holder is an individual who is present in the United States for 183 days or more in the taxable year of the disposition and certain other conditions are met. In general, backup withholding and information reporting will not apply to a payment of interest on a note to a non-United States holder, or to proceeds from the disposition of a note by a non-United States holder, in each case, if the holder certifies under penalties of perjury that it is a non-United States holder and neither Citigroup Global Markets Holdings nor its paying agent has actual knowledge or reason to know to the contrary. Any amounts withheld under the backup withholding rules will be refunded or credited against the non-United States holder's United States federal income tax liability provided the required information is timely furnished to the IRS. In certain circumstances, the amounts of payments made on a note, the name and address of the beneficial owner and the amount, if any, of tax withheld may be reported to the IRS. S-32 PLAN OF DISTRIBUTION Under the terms of a Global Selling Agency Agreement, dated , 2004, the notes will be offered from time to time by Citigroup Global Markets Holdings to Citigroup Global Markets Inc., as purchasing agent, for subsequent resale to the agents and other selected dealers. The agents and Citigroup Global Markets Holdings are parties to the Global Selling Agency Agreement. We may also modify the group of agents appointed to sell the notes. Citigroup Global Markets Holdings will have the sole right to accept orders to purchase notes and may reject proposed purchases in whole or in part. An agent will have the right to reject any proposed purchase in whole or in part. Citigroup Global Markets Holdings reserves the right to withdraw, cancel or modify the offer made by this prospectus supplement, the accompanying prospectus or any pricing supplement without notice. The following table summarizes the aggregate commissions or discounts payable in connection with offerings of the notes. Commissions and discounts will vary depending upon the stated maturity of the notes.
PUBLIC AGENTS' PROCEEDS, BEFORE OFFERING DISCOUNTS EXPENSES, TO PRICE AND COMMISSIONS CITIGROUP GLOBAL MARKETS HOLDINGS -------- --------------- --------------------------------- Principal Amount...... $5,000,000,000 $1,000,000 -- $250,000,000 $4,999,000,000 -- $4,750,000,000 Total................. 100% 0.02%-5.00% 99.98%-95.00%
Citigroup Global Markets Holdings will sell the notes to the purchasing agent at a discount which may be greater or less than the range specified above. The discount at which Citigroup Global Markets Holdings sells the notes to the purchasing agent will be set forth in the applicable pricing supplement. The purchasing agent also may sell notes to the agents at a discount not in excess of the discount it receives from Citigroup Global Markets Holdings. Following the solicitation of orders, each of the agents and the selected dealers, severally and not jointly, may purchase notes as principal for its own account from the purchasing agent. Unless otherwise set forth in the applicable pricing supplement, the notes will be purchased by the agents and the selected dealers for resale by them to one or more investors at a fixed public offering price. After the initial public offering of notes to be resold to investors, the public offering price and any discount or concession may be changed. Citigroup Global Markets Holdings reserves the right to sell notes directly to investors on its own behalf and to enter into agreements similar to the agency agreement with other parties. No commission will be payable nor will a discount be allowed on any sales made directly by Citigroup Global Markets Holdings. Unless notes are issued upon the reopening of a prior series, no note will have an established trading market when issued. Unless otherwise specified in the applicable pricing supplement, the notes will not be listed on any securities exchange. An agent may make a market in the notes, but no agent is obligated to do so. An agent may discontinue any market-making at any time without notice, at its sole discretion. There can be no assurance of the existence or liquidity of a secondary market for any notes, or that the maximum amount of notes will be sold. Citigroup Global Markets Holdings estimates that its total expenses for the offering, excluding underwriting commissions or discounts, will be approximately $2,500,000. Any agent may be deemed to be an underwriter within the meaning of the Securities Act of 1933. Citigroup Global Markets Holdings has agreed to indemnify the agents against liabilities relating to material misstatements and omissions, or to contribute to payments that the agents may be required to make relating to these liabilities. Citigroup Global Markets Holdings will reimburse the agents for customary legal and other expenses incurred by them in connection with the offer and sale of the notes. Unless otherwise specified in the applicable pricing supplement, payment of the purchase price of the notes will be required to be made in immediately available funds in New York City on the date of settlement. S-33 Concurrently with the offering of notes through the agents as described in this prospectus supplement, Citigroup Global Markets Holdings may issue other securities under the indentures referred to in the prospectus. The broker-dealer subsidiaries or affiliates of Citigroup Global Markets Holdings, including Citigroup Global Markets Inc., are members of the NASD and may participate in offerings of the notes. Accordingly, offerings of the notes in which Citigroup Global Markets Holdings' broker-dealer subsidiaries or affiliates participate will conform with the requirements set forth in Rule 2720 of the Conduct Rules of the NASD. This prospectus supplement, the accompanying prospectus and the related pricing supplement may be used by an agent or other subsidiaries or affiliates of Citigroup Global Markets Holdings in connection with offers and sales of the notes offered by this prospectus supplement in market-making transactions at negotiated prices related to prevailing market prices at the time of sale. An agent or these other subsidiaries or affiliates may act as principal or agent in such transactions. ERISA MATTERS Each purchaser and subsequent transferee of the notes or any interest therein will be deemed to have represented and warranted on each day from and including the date of its purchase or other acquisition of the notes through and including the date of disposition of such notes that (a) it is not (i) an employee benefit plan subject to the fiduciary responsibility provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or (ii) any entity with respect to which part or all of its assets constitute assets of any such employee benefit plan by reason of 29 C.F.R. 2510.3-101 or otherwise, or (iii) any government or other plan subject to federal, state or local law substantially similar to the fiduciary responsibility provisions of ERISA ((i), (ii) and (iii) collectively, "ERISA-Type Plans"); and (b) if it is a plan described in Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended, that is not an ERISA-Type Plan (for example, individual retirement accounts, individual retirement annuities or Keogh plans), none of Citigroup Global Markets Inc., its affiliates or any employee thereof manages the plan or provides advice that serves as a primary basis for the plan's decision to purchase, hold or dispose of the notes. LEGAL MATTERS Edward F. Greene, Esq., General Counsel of Citigroup Global Markets Holdings, 388 Greenwich Street, New York, New York 10013, will act as legal counsel to Citigroup Global Markets Holdings. Mr. Greene beneficially owns, or has rights to acquire under employee benefit plans, an aggregate of less than one percent of the common stock of Citigroup Inc. Cleary, Gottlieb, Steen & Hamilton, New York, New York, will act as legal counsel for the agents. Cleary, Gottlieb, Steen & Hamilton has from time to time acted as counsel for Citigroup Global Markets Holdings and its subsidiaries and affiliates and may do so in the future. S-34 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- $5,000,000,000 CITIGROUP GLOBAL MARKETS HOLDINGS INC. RETAIL MEDIUM-TERM NOTES, SERIES F DUE NINE MONTHS OR MORE FROM THE DATE OF ISSUE ------------------------------ PROSPECTUS SUPPLEMENT , 2004 (INCLUDING PROSPECTUS DATED , 2004) ------------------------------ CITIGROUP A.G. Edwards & Sons, Inc. Edward D. Jones & Co., L.P. Merrill Lynch & Co. Morgan Stanley UBS Investment Bank Wachovia Securities
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. CITIGROUP GLOBAL MARKETS HOLDINGS INC. 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 IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. SUBJECT TO COMPLETION, DATED OCTOBER 8, 2004 PROSPECTUS CGMH CAPITAL [II] % TRUST PREFERRED SECURITIES $ LIQUIDATION AMOUNT GUARANTEED TO THE EXTENT SET FORTH HEREIN BY CITIGROUP GLOBAL MARKETS HOLDINGS INC. ------------------------ A brief description of the % trust preferred securities can be found under "Summary Information -- Q&A" in this prospectus. Application will be made to list the % trust preferred securities on the New York Stock Exchange. If approved for listing, Citigroup Global Markets Holdings expects the % trust preferred securities will begin trading on the New York Stock Exchange within 30 days after they are first issued. YOU ARE URGED TO CAREFULLY READ THE "RISK FACTORS" SECTION BEGINNING ON PAGE 6, WHERE SPECIFIC RISKS ASSOCIATED WITH THESE % TRUST PREFERRED SECURITIES ARE DESCRIBED, ALONG WITH THE OTHER INFORMATION IN THIS PROSPECTUS BEFORE YOU MAKE YOUR INVESTMENT DECISION. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. These securities are not deposits or savings accounts but are unsecured obligations of Citigroup Global Markets Holdings Inc. These securities are not insured by the Federal Deposit Insurance Corporation or any other governmental agency or instrumentality. ------------------------
PER TRUST PREFERRED SECURITY TOTAL ------------------- -------- Public offering price $ $ Underwriting commissions to be paid by Citigroup Global Markets Holdings (1) (1) Proceeds to CGMH Capital [II] $ $
- --------------- (1) Underwriting commissions of $ per trust preferred security, or $ for all % trust preferred securities, will be paid by Citigroup Global Markets Holdings, except that for sales of 10,000 or more % trust preferred securities to a single purchaser, the commissions will be $ per trust preferred security. Citigroup Global Markets Holdings expects that the % trust preferred securities will be ready for delivery in book-entry form only through The Depository Trust Company on or about . ------------------------ CITIGROUP , 2004 TABLE OF CONTENTS
PAGE ---- Summary Information -- Q&A.................................. 3 Ratio of Earnings (Losses) to Fixed Charges................. 5 Risk Factors................................................ 6 Where You Can Find More Information......................... 10 Forward-Looking Statements.................................. 11 Citigroup Global Markets Holdings Inc....................... 11 Use of Proceeds............................................. 12 Accounting Treatment; Regulatory Capital.................... 12 Capitalization.............................................. 14 Description of the Trust Preferred Securities............... 15 Description of the Junior Subordinated Debt Securities...... 28 Description of the Guarantee................................ 38 Effect of Obligations Under the Junior Subordinated Debt Securities and the Guarantee.............................. 41 Certain United States Federal Income Tax Considerations..... 43 ERISA Considerations........................................ 48 Underwriting................................................ 50 Legal Matters............................................... 52 Experts..................................................... 52
2 SUMMARY INFORMATION -- Q&A This summary provides a brief overview of the key aspects of Citigroup Global Markets Holdings, CGMH Capital [II] and the % trust preferred securities. You should carefully read this prospectus to understand fully the terms of the trust preferred securities as well as the tax and other considerations that are important to you in making a decision about whether to invest in the trust preferred securities. You should pay special attention to the "Risk Factors" section beginning on page 6 of this prospectus to determine whether an investment in the trust preferred securities is appropriate for you. WHAT ARE THE TRUST PREFERRED SECURITIES? Each trust preferred security represents an undivided beneficial interest in the assets of CGMH Capital [II]. Each trust preferred security will entitle the holder to receive cash distributions as described in this prospectus. CGMH Capital [II] is offering trust preferred securities at a price of $ for each trust preferred security. WHO IS CGMH CAPITAL [II]? CGMH Capital [II] is a Delaware statutory trust. Its principal place of business is c/o Citigroup Global Markets Holdings Inc., 388 Greenwich Street, New York, NY 10013, and its telephone number is (212) 816-6000. All of the common securities of CGMH Capital [II] will be owned by Citigroup Global Markets Holdings Inc. CGMH Capital [II] will use the proceeds from the sale of the trust preferred securities and the common securities to buy a series of % junior subordinated deferrable interest debentures due , 20 from Citigroup Global Markets Holdings with the same financial terms as the trust preferred securities. WHO IS CITIGROUP GLOBAL MARKETS HOLDINGS INC.? Citigroup Global Markets Holdings is a holding company primarily engaged in investment banking, proprietary trading, retail brokerage and asset management activities through its U.S. and foreign broker-dealer subsidiaries. Citigroup Global Markets Holdings is a subsidiary of Citigroup Inc., a diversified financial services holding company. The mailing address of Citigroup Global Markets Holdings' principal executive office is 388 Greenwich Street, New York, NY 10013, and its telephone number is (212) 816-6000. WHEN WILL YOU RECEIVE DISTRIBUTIONS ON THE TRUST PREFERRED SECURITIES? CGMH Capital [II]'s only source of cash to make payments on the trust preferred securities are payments on the junior subordinated debt securities it purchases from Citigroup Global Markets Holdings. If you purchase the trust preferred securities, you are entitled to receive cumulative cash distributions at an annual rate of % of the liquidation amount of $ per trust preferred security. Distributions will accumulate from the date CGMH Capital [II] issues the trust preferred securities and will be paid in arrears on of each year, beginning . WHEN WILL PAYMENT OF YOUR DISTRIBUTIONS BE DEFERRED? If Citigroup Global Markets Holdings defers interest payments on the junior subordinated debt securities, CGMH Capital [II] generally will defer distributions on the trust preferred securities for up to consecutive periods. A deferral of distributions cannot extend, however, beyond , 20 . 3 During any deferral period, except as described on page 31, Citigroup Global Markets Holdings will not be permitted to: - pay a dividend or make any distributions on its capital stock or redeem, purchase, acquire or make a liquidation payment on any of its capital stock, or make any guarantee payments relating to the foregoing; or - make an interest, principal or premium payment on, or repurchase or redeem, any of its debt securities that rank equal with or junior to the junior subordinated debt securities. WHEN CAN CGMH CAPITAL [II] REDEEM THE TRUST PREFERRED SECURITIES? CGMH Capital [II] must redeem all of the outstanding trust preferred securities on , 20 . Some or all of the trust preferred securities may be redeemed before , 20 on one or more occasions any time on or after , 20 . The trust preferred securities may also be redeemed, in whole or in part, at any time if certain changes in tax, investment company or bank regulatory law or interpretations occur and certain other conditions are satisfied. See "Description of the Trust Preferred Securities -- Special Event Redemption" on page 18. WHAT IS CITIGROUP GLOBAL MARKETS HOLDINGS' GUARANTEE OF THE TRUST PREFERRED SECURITIES? Citigroup Global Markets Holdings' guarantee of the trust preferred securities consists of: - its obligations to make payments on the junior subordinated debt securities; - its obligations under the trust preferred securities guarantee; and - its obligations under the amended and restated declaration of trust of CGMH Capital [II], which sets forth the terms of CGMH Capital [II]. Citigroup Global Markets Holdings has irrevocably guaranteed that if a payment on the junior subordinated debt securities is made to CGMH Capital [II] but, for any reason, CGMH Capital [II] does not make the corresponding distribution or redemption payment to the holders of the trust preferred securities, then Citigroup Global Markets Holdings will make the payments directly to the holders of the trust preferred securities. The guarantee does not cover payments when CGMH Capital [II] does not have sufficient funds to make payments on the trust preferred securities. Citigroup Global Markets Holdings' obligations under the guarantee are subordinated as described on page 38. WHEN COULD THE JUNIOR SUBORDINATED DEBT SECURITIES BE DISTRIBUTED TO YOU? Citigroup Global Markets Holdings has the right to dissolve CGMH Capital [II] at any time. If Citigroup Global Markets Holdings terminates CGMH Capital [II], CGMH Capital [II] will redeem the trust preferred securities by distributing the junior subordinated debt securities to holders of the trust preferred securities and the common securities on a ratable basis. If the junior subordinated debt securities are distributed, Citigroup Global Markets Holdings will use it best efforts to list the junior subordinated debt securities on the New York Stock Exchange, or any other exchange on which the trust preferred securities are then listed. WILL THE TRUST PREFERRED SECURITIES BE LISTED ON A STOCK EXCHANGE? Application will be made to list the trust preferred securities on the NYSE. If approved for listing, CGMH Capital [II] expects the trust preferred securities will begin trading on the NYSE within 30 days after they are first issued. 4 WILL HOLDERS OF THE TRUST PREFERRED SECURITIES HAVE ANY VOTING RIGHTS? Generally, the holders of the preferred securities will not have any voting rights. See "Description of the Trust Preferred Securities -- Voting Rights." IN WHAT FORM WILL THE TRUST PREFERRED SECURITIES BE ISSUED? The trust preferred securities will be represented by one or more global securities that will be deposited with and registered in the name of The Depository Trust Company or its nominee. This means that you will not receive a certificate for your trust preferred securities and that your broker will maintain your position in the trust preferred securities. CGMH Capital [II] expects that the trust preferred securities will be ready for delivery through DTC on or about , 20 . RATIO OF EARNINGS (LOSSES) TO FIXED CHARGES The following table shows the consolidated ratio of earnings (losses) to fixed charges of Citigroup Global Markets Holdings for the six months ended June 30, 2004 and each of the five most recent fiscal years.
SIX MONTHS ENDED YEAR ENDED DECEMBER 31, JUNE 30, -------------------------------- 2004 2003 2002 2001 2000 1999 -------- ---- ---- ---- ---- ---- Ratio of earnings (losses) to fixed charges........ (0.56x) 1.90x 1.44x 1.34x 1.32x 1.46x
5 RISK FACTORS Your investment in the trust preferred securities will involve several risks. You should carefully consider the following discussion of risks, and the other information in this prospectus, before deciding whether an investment in the trust preferred securities is suitable for you. CITIGROUP GLOBAL MARKETS HOLDINGS IS NOT REQUIRED TO PAY YOU UNDER THE GUARANTEE AND THE JUNIOR SUBORDINATED DEBT SECURITIES UNLESS IT FIRST MAKES OTHER REQUIRED PAYMENTS. Citigroup Global Markets Holdings' obligations under the junior subordinated debt securities and the guarantee will rank junior to all of Citigroup Global Markets Holdings' senior indebtedness as described on page 29. This means that Citigroup Global Markets Holdings cannot make any payments on the junior subordinated debt securities or the guarantee if it defaults on a payment of senior indebtedness and does not cure the default within the applicable grace period or if the senior indebtedness becomes immediately due because of a default and has not yet been paid in full. In addition, Citigroup Global Markets Holdings' obligations under the junior subordinated debt securities and the guarantee will be structurally subordinated to all existing and future liabilities of Citigroup Global Markets Holdings' subsidiaries. In the event of the bankruptcy, liquidation or dissolution of Citigroup Global Markets Holdings, its assets would be available to pay obligations under the junior subordinated debt securities and the guarantee only after Citigroup Global Markets Holdings made all payments on its senior indebtedness. Neither the trust preferred securities, the junior subordinated debt securities nor the guarantee limit the ability of Citigroup Global Markets Holdings and its subsidiaries to incur additional indebtedness, including indebtedness that ranks senior in priority of payment to the junior subordinated debt securities and the guarantee. See "Description of the Junior Subordinated Debt Securities -- Subordination" and "Description of the Guarantee -- Status of the Guarantee" on pages 29 and 40, respectively. CITIGROUP GLOBAL MARKETS HOLDINGS IS NOT REQUIRED TO PAY YOU UNDER THE GUARANTEE IF CGMH CAPITAL [II] DOES NOT HAVE CASH AVAILABLE. The ability of CGMH Capital [II] to make payments on the trust preferred securities is solely dependent upon Citigroup Global Markets Holdings making the related payments on the junior subordinated debt securities when due. If Citigroup Global Markets Holdings defaults on its obligations to make payments on the junior subordinated debt securities, CGMH Capital [II] will not have sufficient funds to make payments on the preferred securities. In those circumstances, you will not be able to rely upon the guarantee for payment of these amounts. Page 15 discusses your options if this happens. DEFERRAL OF DISTRIBUTIONS WOULD HAVE ADVERSE TAX CONSEQUENCES FOR YOU AND MAY ADVERSELY AFFECT THE TRADING PRICE OF THE TRUST PREFERRED SECURITIES. If distributions on the trust preferred securities are deferred, you will be required to recognize interest income for United States federal income tax purposes in respect of your ratable share of the interest on the junior subordinated debt securities held by CGMH Capital [II] before you receive any cash distributions relating to this interest. In addition, you will not receive this cash if you sold the trust preferred securities before the end of any deferral period or before the record date relating to distributions which are paid. Citigroup Global Markets Holdings has no current intention of deferring interest payments on the junior subordinated debt securities and believes that such deferral is a remote possibility. However, if Citigroup Global Markets Holdings exercises its right in the future, the trust preferred securities may trade at a price that does not fully reflect the value of accrued but unpaid interest on the junior subordinated debt securities. If you sell the trust preferred securities during an interest deferral period, you may not receive the same return on investment as someone else who continues to hold the trust preferred securities. In addition, the existence of Citigroup Global Markets Holdings' right to defer payments of interest on the 6 junior subordinated debt securities may mean that the market price for the trust preferred securities, which represent an undivided beneficial interest in the junior subordinated debt securities, may be more volatile than other securities that do not have these rights. See "Certain United States Federal Income Tax Considerations" on page 43 for more information regarding the tax consequences of purchasing, holding and selling the trust preferred securities. YOU SHOULD NOT RELY ON THE DISTRIBUTIONS FROM THE TRUST PREFERRED SECURITIES THROUGH THEIR MATURITY DATE -- THEY MAY BE REDEEMED AT ANY TIME IF CERTAIN CHANGES IN TAX OR INVESTMENT COMPANY OR BANK REGULATORY LAW OCCUR. If certain changes, which are more fully described below, in tax or investment company or bank regulatory law occur and are continuing, and certain other conditions that are more fully described below are satisfied, the trust preferred securities could be redeemed by CGMH Capital [II] within 90 days of the event at a redemption price equal to $ per security plus any accrued and unpaid distributions. See "Description of the Trust Preferred Securities -- Distribution of the Junior Subordinated Debt Securities" and "-- Special Event Redemption" on pages 19 and 18, respectively. YOU SHOULD NOT RELY ON THE DISTRIBUTIONS FROM THE TRUST PREFERRED SECURITIES THROUGH THEIR MATURITY DATE -- RECENT ACCOUNTING CHANGES MAY GIVE RISE TO A FUTURE REGULATORY CAPITAL EVENT THAT WOULD ENTITLE CITIGROUP GLOBAL MARKETS HOLDINGS TO REDEEM THE TRUST PREFERRED SECURITIES. In January 2003, the Financial Accounting Standards Board (the "FASB") issued interpretation No. 46 ("FIN 46"), Consolidation of Variable Interest Entities and, in December 2003, issued Revised Interpretation No. 46 ("FIN 46R"), Consolidation of Variable Interest Entities, which amended FIN 46. Historically, issuer trusts that issued trust preferred securities have been consolidated by their parent companies. In addition, trust preferred securities have been treated as eligible for Tier 1 capital treatment by bank holding companies, like Citigroup Global Markets Holdings' parent company Citigroup Inc., under rules and regulations of the Board of Governors of the Federal Reserve System (the "Federal Reserve") relating to minority interests in equity accounts of consolidated subsidiaries. Accordingly, Citigroup Inc. has consolidated its existing issuer trusts and the issuer trusts of Citigroup Global Markets Holdings in preparing its consolidated financial statements in the past, and such issuer trusts' outstanding trust preferred securities have been treated as Tier 1 capital by Citigroup Inc. It has been concluded that issuer trusts should no longer be consolidated by their parent companies under FIN 46R. As a result, Citigroup Inc. no longer consolidates its issuer trusts nor the issuer trusts of Citigroup Global Markets Holdings in preparing its financial statements in accordance with generally accepted accounting principles, and has made certain adjustments to its financial statements to reflect the deconsolidation of such issuer trusts. Moreover, such deconsolidation could result in a change to the regulatory capital treatment of trust preferred securities issued by Citigroup Inc. and its subsidiaries and other U.S. bank holding companies. Specifically, it is possible that since its issuer trusts are no longer consolidated by Citigroup Inc., the trust preferred securities issued by such issuer trusts would not be accorded Tier 1 capital treatment by the Federal Reserve. Although the Federal Reserve has indicated in supervisory letter SR 03-13, dated July 2, 2003 (the "supervisory letter"), that trust preferred securities will continue to be treated as Tier 1 capital until notice is given to the contrary, the supervisory letter also indicates that the Federal Reserve will review the regulatory implications of any accounting treatment changes and will provide further guidance if necessary. In May 2004, the Federal Reserve proposed to revise its regulatory capital guidelines to permit bank holding companies to include in Tier 1 capital trust preferred securities that meet certain criteria even if such securities are not treated as a minority interest in a consolidated subsidiary for accounting and regulatory reporting purposes. The trust preferred securities are intended to meet the criteria for Tier 1 capital treatment that are established in the Federal Reserve's proposal. There is no assurance, however, that the proposal will be adopted as proposed. If Tier 1 capital treatment were disallowed, Citigroup Global Markets Holdings would have the right to redeem the junior subordinated debentures, thereby causing a mandatory early redemption of trust preferred securities pursuant to the special "Regulatory Capital Event" redemption provisions described below. See "Description of the Trust Preferred Securities -- Distribution of the Junior Subordinated Debt 7 Securities," "-- Special Event Redemption," and "Accounting Treatment; Regulatory Capital" on pages 19, 18 and 12, respectively. YOU SHOULD NOT RELY ON THE DISTRIBUTIONS FROM THE TRUST PREFERRED SECURITIES THROUGH THEIR MATURITY DATE -- THEY MAY BE REDEEMED AT THE OPTION OF CITIGROUP GLOBAL MARKETS HOLDINGS. The trust preferred securities may be redeemed, in whole, at any time, or in part, from time to time, on or after , at a redemption price equal to $ per trust preferred security plus any accrued and unpaid distributions to the redemption date. You should assume that this redemption option will be exercised if Citigroup Global Markets Holdings is able to refinance at a lower interest rate or it is otherwise in the interest of Citigroup Global Markets Holdings to redeem the junior subordinated debt securities. If the junior subordinated debt securities are redeemed, CGMH Capital [II] must redeem the trust preferred securities and the common securities having an aggregate liquidation amount equal to the aggregate principal amount of junior subordinated debt securities to be redeemed. See "Description of the Trust Preferred Securities -- Redemption of Trust Securities" and "Description of the Junior Subordinated Debt Securities -- Optional Redemption" on pages 17 and 30, respectively. THERE CAN BE NO ASSURANCE AS TO THE MARKET PRICES FOR THE PREFERRED SECURITIES OR THE JUNIOR SUBORDINATED DEBT SECURITIES; THEREFORE, YOU MAY SUFFER A LOSS. CGMH Capital [II] and Citigroup Global Markets Holdings cannot give you any assurance as to the market prices for the trust preferred securities or the junior subordinated debt securities that may be distributed in exchange for trust preferred securities. Accordingly, the trust preferred securities that an investor may purchase, whether pursuant to the offer made by this prospectus or in the secondary market, or the junior subordinated debt securities that a holder of trust preferred securities may receive in exchange for trust preferred securities, may trade at a discount to the price that the investor paid to purchase the trust preferred securities. As a result of the right to defer payments on the trust preferred securities, the market price of the trust preferred securities may be more volatile than the market prices of other securities to which such optional deferrals do not apply. THERE COULD BE AN ADVERSE TAX CONSEQUENCE TO YOU IF CITIGROUP GLOBAL MARKETS HOLDINGS TERMINATES CGMH CAPITAL [II] AND DISTRIBUTES JUNIOR SUBORDINATED DEBT SECURITIES TO HOLDERS. Citigroup Global Markets Holdings has the right to terminate CGMH Capital [II] at any time, so long as it obtains any required regulatory approval. If Citigroup Global Markets Holdings decides to exercise its right to terminate CGMH Capital [II], CGMH Capital [II] will redeem the trust preferred securities and common securities by distributing the junior subordinated debt securities to holders of the trust preferred securities and common securities on a ratable basis. Under current United States federal income tax law, a distribution of junior subordinated debt securities to you on the dissolution of CGMH Capital [II] should not be a taxable event to you. However, if CGMH Capital [II] is characterized for United States federal income tax purposes as an association taxable as a corporation at the time it is dissolved or if there is a change in law, the distribution of junior subordinated debt securities to you may be a taxable event to you. THERE MAY BE NO TRADING MARKET FOR THE JUNIOR SUBORDINATED DEBT SECURITIES IF CGMH CAPITAL [II] DISTRIBUTES THEM TO YOU. Although Citigroup Global Markets Holdings will use its best efforts to list the junior subordinated debt securities on the NYSE, or any other exchange on which the trust preferred securities are then listed, if they are distributed, Citigroup Global Markets Holdings cannot assure you that the junior subordinated debt securities will be approved for listing or that a trading market will exist for those securities. 8 SINCE YOU HAVE LIMITED VOTING RIGHTS, YOU CANNOT PREVENT THE CGMH CAPITAL [II] TRUSTEES FROM TAKING ACTIONS YOU MAY NOT AGREE WITH. You will have limited voting rights. In particular, except for the limited exceptions described below, only Citigroup Global Markets Holdings can elect or remove any of CGMH Capital [II] trustees. See "Description of the Trust Preferred Securities -- Voting Rights" on page 21. 9 WHERE YOU CAN FIND MORE INFORMATION As required by the Securities Act of 1933, Citigroup Global Markets Holdings and the subsidiary trusts filed a registration statement (No. 333- ) relating to the securities offered by this prospectus with the Securities and Exchange Commission. This prospectus is a part of that registration statement, which includes additional information. Citigroup Global Markets Holdings has filed the exhibits discussed in this prospectus with the registration statement, and you should read the exhibits carefully for provisions that may be important to you. Citigroup Global Markets Holdings files annual, quarterly and current reports and other information with the SEC. You may read and copy any document Citigroup Global Markets Holdings files at the SEC's public reference room in Washington, D.C. You can also request copies of these documents, upon payment of a duplicating fee, by writing to the Public Reference Section of the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. These SEC filings are also available to the public from the SEC's home page on the world wide web on the internet at "http://www.sec.gov". The SEC allows Citigroup Global Markets Holdings 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 Global Markets Holdings files with the SEC will automatically update the information in this prospectus. In all cases, you should rely on the later information over different information included in this prospectus. Citigroup Global Markets Holdings incorporates by reference the documents listed below and any future filings made with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934: (a) Annual Report on Form 10-K for the year ended December 31, 2003; (b) Quarterly Reports on Form 10-Q for the quarters ended March 31, 2004 and June 30, 2004; and (c) Current Reports on Form 8-K filed on January 20, 2004, January 29, 2004, January 30, 2004, March 1, 2004, March 29, 2004, April 1, 2004, April 15, 2004, April 30, 2004, June 3, 2004, June 22, 2004, June 29, 2004, June 30, 2004, July 15, 2004, July 21, 2004, July 29, 2004, August 26, 2004, August 27, 2004, August 31, 2004 and October 5, 2004. All documents Citigroup Global Markets Holdings files pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus and before the later of (1) the completion of the offering of the securities described in this prospectus and (2) the date the broker-dealer subsidiaries or affiliates of Citigroup Global Markets Holdings stop offering securities pursuant to 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 Global Markets Holdings at the following address: Treasurer Citigroup Global Markets Holdings Inc. 388 Greenwich Street New York, NY 10013 (212) 816-6000 ------------------------ You should only rely on the information contained or incorporated by reference in this prospectus. Citigroup Global Markets Holdings has not, and the underwriters have not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. Citigroup Global Markets Holdings is not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information in this prospectus or any documents incorporated by reference is accurate as of any date other than the date of the applicable document. Citigroup Global Markets Holdings' business, financial condition, results of operations and prospects may have changed since that date. 10 FORWARD-LOOKING STATEMENTS This prospectus and the information incorporated by reference in this prospectus include forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These forward-looking statements are based on our management's beliefs and assumptions and on information currently available to our management. Forward-looking statements include information concerning our possible or assumed future results of operations and statements preceded by, followed by or that include the words "believe," "expect," "anticipate," "intend," "plan," "estimate" "may increase," "may fluctuate" and similar expressions or future or conditional verbs as "will," "should," "would" and "could." Forward-looking statements involve risks, uncertainties including, but not limited to, the following: global economic conditions, including the performance of global financial markets, and risks associated with fluctuating currency values and interest rates; competitive, regulatory or tax changes that affect the cost of or the demand for Citigroup Global Markets Holdings' products; the impact of the implementation of new accounting rules; the resolution of environmental matters; and the resolution of legal and regulatory proceeding and related matters. Actual results may differ materially from those expressed in these forward-looking statements. Factors that could cause actual results to differ from these forward-looking statements include, but are not limited to, those discussed elsewhere in this prospectus and the documents incorporated by reference in this prospectus. You should not put undue reliance on any forward-looking statements. We do not have any intention or obligation to update forward-looking statements after we distribute this prospectus. CITIGROUP GLOBAL MARKETS HOLDINGS INC. Citigroup Global Markets Holdings, operating through its subsidiaries, engages in full-service investment banking and securities brokerage business. As used in this section, "Citigroup Global Markets Holdings" refers generally to Citigroup Global Markets Holdings Inc. and its consolidated subsidiaries, and where the context requires refers to specific subsidiaries. Citigroup Global Markets Holdings provides a full range of financial advisory, research and capital raising services to corporations, governments and individuals. Citigroup Global Markets Holdings operates in three business segments: (i) Investment Services, (ii) Private Client Services and (iii) Asset Management, and through these business segments, Citigroup Global Markets Holdings provides investment banking, securities and commodities trading, capital raising, asset management, advisory, research, brokerage and other financial services to its customers, and executes proprietary trading strategies on its own behalf. Citigroup Inc., Citigroup Global Markets Holdings' parent, is a diversified holding company whose businesses provide a broad range of financial services to consumer and corporate customers with some 200 million customer accounts in over 100 countries and territories. Citigroup's activities are conducted through the Global Consumer, Global Corporate and Investment Bank, Private Client Services, Global Investment Management, and Proprietary Investment Activities business segments. Citigroup Global Markets Holdings' global investment banking services encompass a full range of capital market activities, including the underwriting and distribution of debt and equity securities for United States and foreign corporations and for state, local and other governmental and government sponsored authorities. Citigroup Global Markets Holdings frequently acts as an underwriter or private placement agent in corporate and public securities offerings and provides alternative financing options. It also provides financial advice to investment banking clients on a wide variety of transactions including mergers and acquisitions, divestitures, leveraged buyouts, financial restructurings and a variety of cross-border transactions. Private Client Services provides investment advice, financial planning and brokerage services to affluent individuals, small and mid-size companies, and non-profits and large corporations primarily through a network of more than 12,200 Smith Barney Financial Consultants in more than 500 offices 11 worldwide. In addition, Private Client Services provides independent client-focused research to individuals and institutions around the world. The portion of Citigroup Inc.'s Asset Management segment housed with Citigroup Global Markets Holdings is comprised primarily of two asset management business platforms: Salomon Brothers Asset Management and Smith Barney Asset Management. These platforms offer a broad range of asset management products and services from global investment centers, including mutual funds, closed-end funds and managed accounts. In addition, this Asset Management Group offers a broad range of unit investment trusts. The principal office of Citigroup Global Markets Holdings is located at 388 Greenwich Street, New York, New York 10013, and its telephone number is (212) 816-6000. Citigroup Global Markets Holdings, a New York corporation, was incorporated in 1977 and is the successor to Salomon Smith Barney Holdings Inc., a Delaware corporation, following a statutory merger effective on July 1, 1999, for the purpose of changing its state of incorporation. On April 7, 2003, Citigroup Global Markets Holdings filed a Restated Certificate of Incorporation in the State of New York changing its name from Salomon Smith Barney Holdings Inc. to Citigroup Global Markets Holdings Inc. USE OF PROCEEDS All of the net proceeds from the sale of the trust preferred securities will be invested by CGMH Capital [II] in junior subordinated debt securities of Citigroup Global Markets Holdings. Citigroup Global Markets Holdings will use the proceeds from the sale of the junior subordinated debt securities to CGMH Capital [II] for general corporate purposes, which may include: - funding the business of its operating units; - funding investments in, or extensions of credit or capital contributions to, its subsidiaries; and - lengthening the average maturity of liabilities, which means that it could reduce its short-term liabilities or refund maturing indebtedness. Citigroup Global Markets Holdings expects to incur additional indebtedness in the future. See "Capitalization." ACCOUNTING TREATMENT; REGULATORY CAPITAL As discussed above under "Risk Factors -- You Should Not Rely on the Distributions From the Trust Preferred Securities Through Their Maturity Date -- Recent Accounting Changes May Give Rise to a Future Regulatory Capital Event That Would Entitle Citigroup Global Markets Holdings to Redeem the Trust Preferred Securities," FIN 46R addresses the consolidation rules to be applied to all variable interest entities as of December 31, 2003. Historically, issuer trusts that issued capital securities have been consolidated by their parent companies and the accounts of such issuer trusts have been included in the consolidated financial statements of such parent companies. Accordingly, both Citigroup Global Markets Holdings and Citigroup Inc. have included capital securities in their respective consolidated balance sheets in the past, and have included appropriate disclosures about such capital securities and the corresponding guarantees and junior subordinated debentures in the notes to their respective consolidated financial statements. For financial reporting purposes, both Citigroup Global Markets Holdings and Citigroup Inc. have recorded distributions on such capital securities in their respective consolidated statements of income. In addition, capital securities have been treated as eligible for Tier 1 capital treatment by bank holding companies, like Citigroup Inc., under Federal Reserve rules and regulations relating to minority interests in equity accounts of consolidated subsidiaries. Accordingly, the outstanding capital securities of Citigroup Global Markets Holdings' issuer trusts have been treated as Tier 1 capital by Citigroup Inc. It has been concluded that issuer trusts should no longer be consolidated by their parent companies under FIN 46. As a result, neither Citigroup Global Markets Holdings nor Citigroup Inc. can consolidate 12 their issuer trusts in preparing their respective financial statements in accordance with generally accepted accounting principles, and, if applicable, will have to make certain adjustments to their respective financial statements to reflect the deconsolidation of such issuer trusts. Specifically, Citigroup Global Markets Holdings and Citigroup, Inc. will have to record junior subordinated debentures issued to the issuer trusts as liabilities, and will record offsetting assets for the cash and common securities received from such issuer trusts in their respective consolidated balance sheet. For financial reporting purposes, Citigroup Global Markets Holdings and Citigroup, Inc. will have to record interest expense on the corresponding junior subordinated debentures in their respective consolidated statements of income. Citigroup Global Markets Holdings does not believe that such adjustments will have a material effect on its financial condition or results of operations as presented in its consolidated financial statements. Moreover, such deconsolidation could result in a change to the regulatory capital treatment of capital securities issued by Citigroup Global Markets Holdings and consolidated on the balance sheet of Citigroup Inc., its parent company and a U.S. bank holding company. Specifically, it is possible that since the issuer trusts are no longer consolidated by Citigroup Global Markets Holdings and therefore no longer consolidated by Citigroup Inc., the trust preferred securities issued by such issuer trusts would not be accorded Tier 1 capital treatment by the Federal Reserve. Although the Federal Reserve has indicated in the Supervisory Letter that capital securities will continue to be treated as Tier 1 capital until notice is given to the contrary, the Supervisory Letter also indicates that the Federal Reserve will review the regulatory implications of any accounting treatment changes and will provide further guidance if necessary or warranted. In May 2004, the Federal Reserve proposed to revise its regulatory capital guidelines to permit bank holding companies like Citigroup Inc. to include Tier 1 capital trust preferred securities that meet certain criteria even if such securities are not treated as a minority interest in a consolidated subsidiary for accounting and regulatory reporting purposes. The trust preferred securities are intended to meet the criteria for Tier 1 capital treatment that are established in the Federal Reserve's proposal. There is no assurance, however, that the proposal will be adopted as proposed. If Tier 1 capital treatment were disallowed, a regulatory capital event that would entitle Citigroup Global Markets Holdings to redeem the trust preferred securities would occur. 13 CAPITALIZATION The following table sets forth the consolidated capitalization of Citigroup Global Markets Holdings at June 30, 2004, and as adjusted to give effect to the issuance and sale of the trust preferred securities, and no other change in the consolidated capitalization of Citigroup Global Markets Holdings since June 30, 2004 is reflected in the table. The information is only a summary and should be read together with the financial information incorporated by reference in this prospectus and which can be obtained free of charge. See "Where You Can Find More Information" on page 10.
AT JUNE 30, 2004 -------------------------- OUTSTANDING AS ADJUSTED ----------- ----------- (DOLLARS IN MILLIONS) Debt: Short-term borrowings..................................... $ 26,675 $ Notes payable............................................. 10 Long-term debt............................................ 49,614 -------- ------- Total debt............................................. 76,299 -------- ------- Stockholders' equity: Common Stock(1) and additional paid-in capital............ 8,404 Retained earnings......................................... 8,130 Cumulative translation adjustment......................... 9 -------- ------- Total stockholders' equity............................. 16,543 -------- ------- Total capitalization........................................ $ 92,842 $ ======== =======
- --------------- (1) Par value $.01 per share: 1,000 shares authorized; 1,000 shares issued and outstanding at June 30, 2004. 14 DESCRIPTION OF THE TRUST PREFERRED SECURITIES The trust preferred securities will be issued pursuant to the terms of the amended and restated declaration of trust of CGMH Capital [II]. The declaration will be qualified as an indenture under the Trust Indenture Act of 1939. The institutional trustee, JPMorgan Chase Bank, will act as indenture trustee under the declaration for purposes of compliance with the provisions of the Trust Indenture Act. The terms of the trust preferred securities will include those stated in the declaration and those made part of the declaration by the Trust Indenture Act. The following summary of the material terms and provisions of the trust preferred securities is not intended to be complete and is qualified by the declaration, the Statutory Trust Act of the State of Delaware and the Trust Indenture Act. A copy of the declaration is filed as an exhibit to the registration statement of which this prospectus is a part. GENERAL The declaration authorizes the regular trustees to issue on behalf of CGMH Capital [II] the common securities and the trust preferred. These securities represent undivided beneficial interests in the assets of CGMH Capital [II]. All of the common securities will be owned, directly or indirectly, by Citigroup Global Markets Holdings. The common securities rank equally, and payments will be made on the common securities on a ratable basis, with the trust preferred securities. If a default under the declaration occurs and continues, however, the rights of the holders of the common securities to receive payment of periodic distributions and payments upon liquidation, redemption and otherwise will be subordinated to the rights of the holders of the trust preferred securities. The declaration does not permit the issuance by CGMH Capital [II] of any securities other than the trust securities or the incurrence of any indebtedness by CGMH Capital [II]. Pursuant to the declaration, the institutional trustee will hold title to the junior subordinated debt securities purchased by CGMH Capital [II] for the benefit of the holders of the trust securities. The payment of distributions out of money held by CGMH Capital [II], and payments upon redemption of the trust preferred securities or liquidation of CGMH Capital [II] out of money held by CGMH Capital [II], are guaranteed by Citigroup Global Markets Holdings to the extent described under "Description of the Guarantee." The guarantee will be held by JPMorgan Chase Bank, the guarantee trustee, for the benefit of the holders of the trust preferred securities. The guarantee does not cover payment of distributions when CGMH Capital [II] does not have sufficient available funds to pay such distributions. In such event, the remedy of a holder of trust preferred securities is to: - vote to direct the institutional trustee to enforce the institutional trustee's rights under the junior subordinated debt securities; or - if the failure of CGMH Capital [II] to pay distributions is attributable to the failure of Citigroup Global Markets Holdings to pay interest or principal on the junior subordinated debt securities, sue Citigroup Global Markets Holdings for enforcement of payment to such holder of the principal or interest on the junior subordinated debt securities having a principal amount equal to the aggregate liquidation amount of the trust preferred securities of such holder on or after the respective due date specified in the junior subordinated debt securities. DISTRIBUTIONS Distributions on the trust preferred securities will be fixed at a rate per annum of % of the stated liquidation amount of $ per trust preferred security. Distributions not paid when due, or when they would be due if not for any extension period or default by Citigroup Global Markets Holdings on the junior subordinated debt securities, will themselves accumulate additional interest at the annual rate of % thereof compounded . When this prospectus refers to any payment of distributions, distributions include any such interest payable unless otherwise stated. The amount of distributions payable for any period will be computed on the basis of a 360-day year of twelve 30-day months. Distributions on the trust preferred securities will be cumulative, will accrue from and including , and will be payable in arrears on of each year, commencing 15 . When, as and if available for payment, distributions will be made by the institutional trustee, except as otherwise described below. The distribution rate and the distribution payment dates and other payment dates for the preferred securities will correspond to the interest rate and interest payment dates and other payment dates on the junior subordinated debt securities. Deferral of Distributions. Citigroup Global Markets Holdings has the right under the indenture to defer interest payments on the junior subordinated debt securities for an extension period not exceeding consecutive interest periods during which no interest shall be due and payable. A deferral of interest payments cannot extend, however, beyond the maturity of the junior subordinated debt securities. As a consequence of Citigroup Global Markets Holdings' extension of the interest payment period, distributions on the trust preferred securities would be deferred during any such extended interest payment period. During an extension period, the amount of distributions due to you would continue to accumulate and such deferred distributions will themselves accrue interest. In the event that Citigroup Global Markets Holdings exercises its right to extend the interest payment period, then: (1) Citigroup Global Markets Holdings shall not declare or pay any dividend on, make any distributions relating to, or redeem, purchase, acquire or make a liquidation payment relating to, any of its capital stock or make any guarantee payment relating thereto other than - repurchases, redemptions or other acquisitions of shares of capital stock of Citigroup Global Markets Holdings in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of employees, officers, directors or consultants; - as a result of an exchange or conversion of any class or series of Citigroup Global Markets Holdings' capital stock for any other class or series of Citigroup Global Markets Holdings' capital stock; or - the purchase of fractional interests in shares of Citigroup Global Markets Holdings' capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged; and (2) Citigroup Global Markets Holdings may not make any payment of interest on or principal of, or premium, if any, on, or repay, repurchase or redeem, any debt securities issued by Citigroup Global Markets Holdings that rank equally with or junior to the junior subordinated debt securities. The foregoing, however, will not apply to any stock dividends paid by Citigroup Global Markets Holdings where the dividend stock is the same stock as that on which the dividend is being paid. Prior to the termination of any extension period, Citigroup Global Markets Holdings may further extend the extension period, so long as that extension period, together with all such previous and further extensions of the period, may not exceed consecutive interest periods. An extension period cannot extend, however, beyond the maturity of the junior subordinated debt securities. Upon the termination of any extension period and the payment of all amounts then due, Citigroup Global Markets Holdings may commence a new extension period, which must comply with the above requirements. Consequently, there could be up to extension periods of varying lengths throughout the term of the junior subordinated debt securities. The regular trustees shall give the holders of the preferred securities notice of any extension period upon their receipt of notice thereof from Citigroup Global Markets Holdings. If distributions are deferred, the deferred distributions and accrued interest on such distributions shall be paid to holders of record of the trust preferred securities as they appear on the books and records of CGMH Capital [II] on the record date next following the termination of such deferral period. See "Description of the Junior Subordinated Debt Securities -- Interest" and "-- Option to Extend Interest Payment Period." Payment of Distributions. Distributions on the trust preferred securities will be payable to the extent that CGMH Capital [II] has funds available for the payment of such distributions in its property account. 16 CGMH Capital [II]'s funds available for distribution to the holders of the trust preferred securities will be limited to payments received from Citigroup Global Markets Holdings on the junior subordinated debt securities. The payment of distributions out of monies held by CGMH Capital [II] is guaranteed by Citigroup Global Markets Holdings to the extent set forth under "Description of the Guarantee." See "Description of the Junior Subordinated Debt Securities." Distributions on the trust preferred securities will be payable to the holders named on the securities register of CGMH Capital [II] at the close of business on the relevant record dates. As long as the trust preferred securities remain in book-entry only form, the record date will be one business day before the distribution dates. Such distributions will be paid through the institutional trustee who will hold amounts received in respect of the junior subordinated debt securities in the property account for the benefit of the holders of the trust preferred securities. Unless any applicable laws and regulations and the provisions of the declaration state otherwise, each such payment will be made as described under "-- Book-Entry Only Issuance." In the event that the trust preferred securities do not continue to remain in book-entry only form, the relevant record dates will conform to the rules of any securities exchange on which the trust preferred securities are listed and, if none, the regular trustees will have the right to select relevant record dates, which will be more than 14 days but less than 60 days prior to the relevant payment dates. In the event that any date on which distributions are to be made on the trust preferred securities is not a business day, then payment of the distributions payable on such date will be made on the next succeeding day that is a business day, and without any interest or other payment in respect of any such delay. However, if such business day is in the next succeeding calendar year, such payment shall be made on the immediately preceding business day, in each case with the same force and effect as if made on such record date. A "business day" means any day other than Saturday, Sunday or any other day on which banking institutions in New York City are permitted or required by any applicable law to close. REDEMPTION OF TRUST SECURITIES The trust preferred securities have no stated maturity date but will be redeemed upon the maturity of the junior subordinated debt securities or to the extent the junior subordinated debt securities are redeemed. The junior subordinated debt securities will mature on , 20 , and may be redeemed, in whole or in part, at any time on or after . The junior subordinated debt securities can also be redeemed at any time, in whole or in part, in certain circumstances upon the occurrence of a Tax Event, Investment Company Event or a Regulatory Capital Event. Notwithstanding anything to the contrary herein, if then required under applicable capital adequacy guidelines, regulations or policies of the Federal Reserve, Citigroup Global Markets Holdings will obtain the prior approval of the Federal Reserve before exercising its redemption rights described in the preceding paragraph. Upon the maturity of the junior subordinated debt securities, the proceeds of their repayment shall simultaneously be applied to redeem all outstanding trust securities at the redemption price. Upon the redemption of the junior subordinated debt securities, whether in whole or in part, either at the option of Citigroup Global Markets Holdings or pursuant to a Tax Event, Investment Company Event or a Regulatory Capital Event, CGMH Capital [II] will use the cash it receives upon the redemption to redeem trust securities having an aggregate liquidation amount equal to the aggregate principal amount of the junior subordinated debt securities so redeemed at the redemption price. Before such redemption, holders of trust securities will be given not less than 30 nor more than 60 days' notice. In the event that fewer than all of the outstanding trust preferred securities are to be redeemed, the trust preferred securities will be redeemed on a ratable basis as described under "-- Book-Entry Only Issuance" below. See "-- Special Event Redemption" and "Description of the Junior Subordinated Debt Securities -- Optional Redemption." If a partial redemption of the trust preferred securities resulting from a partial redemption of the junior subordinated debt securities would result in a delisting of the trust preferred securities, Citigroup Global Markets Holdings may only redeem the junior subordinated debt securities in whole. 17 SPECIAL EVENT REDEMPTION "Tax Event" means that the regular trustees will have received an opinion of a nationally recognized independent tax counsel experienced in such matters which states that, as a result of any: - amendment to, or change in, the laws or associated regulations of the United States or any political subdivision or taxing authority of the United States; or - amendment to, or change in, an interpretation or application of such laws or regulations by any legislative body, court, governmental agency or regulatory authority, including the enactment of any legislation and the publication of any judicial decision or regulatory determination on or after the date of this prospectus, there is more than an insubstantial risk that: - CGMH Capital [II] would be required to pay United States federal income tax relating to income accrued or received on the junior subordinated debt securities; - interest payable to CGMH Capital [II] on the junior subordinated debt securities would not be deductible by Citigroup Global Markets Holdings for United States federal income tax purposes; or - CGMH Capital [II] would be required to pay more than a minimal amount of other taxes, duties or other governmental charges. "Investment Company Event" means that the regular trustees will have received an opinion of a nationally recognized independent counsel experienced in such matters which states that, as a result of the occurrence of a change in law or regulation or a written change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority, there is more than an insubstantial risk that CGMH Capital [II] is or will be considered an "investment company" which is required to be registered under the Investment Company Act of 1940. "Regulatory Capital Event" means that Citigroup Global Markets Holdings determines, based on an opinion of counsel experienced in such matters, who may be an employee of Citigroup Global Markets Holdings or any of its affiliates, that, as a result of - any amendment to, clarification of or change (including any announced prospective change) in applicable laws, regulations, guidelines or official interpretations thereof or policies with respect thereto or - any official administrative pronouncement or judicial decision interpreting or applying such laws, regulations, guidelines or policies which amendment, clarification, change, pronouncement or decision is announced or is effective after the date of this prospectus, there is more than an insubstantial risk that the trust preferred securities will no longer constitute Tier I capital (or its equivalent) of Citigroup Inc. or any other bank holding company of which Citigroup Global Markets Holdings is a subsidiary for purposes of the capital adequacy requirements or policies of the Board of Governors of the Federal Reserve System or its successor as such bank holding company's primary federal banking regulator. A Regulatory Capital Event would include a change in the regulatory capital treatment of the trust preferred securities as a result of recent accounting changes affecting the criteria for consolidation of variable interest entities such as CGMH Capital [II] under FIN 46R. See "Accounting Treatment; Regulatory Capital" on page 12. This prospectus refers to a Tax Event, Investment Company Event or a Regulatory Capital Event as a "Special Event." Provided that Citigroup Global Markets Holdings obtains any required regulatory approval, if a Special Event occurs and continues, Citigroup Global Markets Holdings may, upon not less than 30 nor more than 60 days' notice, redeem the junior subordinated debt securities, in whole or in part, for cash within 90 days following the occurrence of such Special Event. Following such redemption, trust securities with an aggregate liquidation amount equal to the aggregate principal amount of the junior subordinated debt securities so redeemed shall be redeemed by CGMH Capital [II] at the redemption price on a ratable basis. If, however, at the time there is available to Citigroup Global Markets Holdings 18 or CGMH Capital [II] the opportunity to eliminate, within such 90-day period, the Special Event by taking some ministerial action, such as filing a form or making an election or pursuing some other similar reasonable measure that will have no adverse effect on CGMH Capital [II], Citigroup Global Markets Holdings or the holders of the trust securities, then Citigroup Global Markets Holdings or CGMH Capital [II] will pursue such measure instead of redemption. DISTRIBUTION OF THE JUNIOR SUBORDINATED DEBT SECURITIES Citigroup Global Markets Holdings will have the right at any time to dissolve CGMH Capital [II]. After satisfaction of the liabilities of creditors of CGMH Capital [II] as provided by applicable law, CGMH Capital [II] may cause junior subordinated debt securities to be distributed to the holders of the trust preferred securities in an aggregate stated principal amount equal to the aggregate stated liquidation amount of the trust preferred securities then outstanding. Prior to any such dissolution, Citigroup Global Markets Holdings will obtain any required regulatory approvals. If the junior subordinated debt securities are distributed to the holders of the trust preferred securities, Citigroup Global Markets Holdings will use its best efforts to cause the junior subordinated debt securities to be listed on the NYSE or on such other exchange as the trust preferred securities are then listed. After the date for any distribution of junior subordinated debt securities upon dissolution of CGMH Capital [II]: - the trust preferred securities will no longer be deemed to be outstanding; - the securities depositary or its nominee, as the record holder of the trust preferred securities, will receive a registered global certificate or certificates representing the junior subordinated debt securities to be delivered upon such distribution; and - any certificates representing trust preferred securities not held by the depositary or its nominee will be deemed to represent junior subordinated debt securities having an aggregate principal amount equal to the aggregate stated liquidation amount of, with an interest rate identical to the distribution rate of, and with accrued and unpaid interest equal to accrued and unpaid distributions on, such trust preferred securities until such certificates are presented to Citigroup Global Markets Holdings or its agent for transfer or reissuance. There can be no assurance as to the market prices for either the trust preferred securities or the junior subordinated debt securities that may be distributed in exchange for the trust preferred securities if a dissolution and liquidation of CGMH Capital [II] were to occur. This means that the trust preferred securities that an investor may purchase, whether pursuant to the offer made by this prospectus or in the secondary market, or the junior subordinated debt securities that an investor may receive if a dissolution and liquidation of CGMH Capital [II] were to occur, may trade at a discount to the price that the investor paid to purchase the trust preferred securities offered by this prospectus. REDEMPTION PROCEDURES CGMH Capital [II] may not redeem fewer than all of the outstanding trust preferred securities unless all accrued and unpaid distributions have been paid on all trust preferred securities for all distribution periods terminating on or prior to the date of redemption. If (1) CGMH Capital [II] gives an irrevocable notice of redemption of the trust preferred securities, and (2) Citigroup Global Markets Holdings has paid to the institutional trustee a sufficient amount of cash in connection with the related redemption or maturity of the junior subordinated debt securities, then, by 12:00 noon, New York City time, on the redemption date, the institutional trustee will irrevocably deposit with the depositary funds sufficient to pay the applicable redemption price. CGMH Capital [II] will also give the depositary irrevocable instructions and authority to pay the redemption price to the holders of the preferred securities. 19 Once notice of redemption is given and funds are irrevocably deposited, distributions will cease to accrue and all rights of holders of trust preferred securities called for redemption will cease, except the right of the holders to receive the redemption price but without interest on such redemption price. If any redemption date is not a business day, then payment of the redemption price payable on such date will be made on the next succeeding day that is a business day, without any interest or other payment in respect of any such delay. However, if such business day falls in the next calendar year, such payment will be made on the immediately preceding business day. If payment of the redemption price for any trust preferred securities is improperly withheld or refused and not paid either by CGMH Capital [II], or by Citigroup Global Markets Holdings pursuant to the guarantee, distributions on such trust preferred securities will continue to accrue at the then applicable rate from the original redemption date to the date of payment. In this case, the actual payment date will be the redemption date for purposes of calculating the redemption price. See "-- Book-Entry Only Issuance." In the event that fewer than all of the outstanding trust preferred securities are to be redeemed, the trust preferred securities will be redeemed in accordance with the depositary's standard procedures. See "-- Book-Entry Only Issuance." Citigroup Global Markets Holdings or its subsidiaries or affiliates may, at any time, and from time to time, purchase outstanding trust preferred securities by tender, in the open market or by private agreement, provided that such purchase complies with United States federal securities laws and any other applicable laws. LIQUIDATION DISTRIBUTION UPON DISSOLUTION This prospectus refers to any voluntary or involuntary liquidation, dissolution, winding-up or termination of CGMH Capital [II] as a "liquidation." If a liquidation occurs, the holders of the trust preferred securities will be entitled to receive out of the assets of CGMH Capital [II], after satisfaction of liabilities to creditors, distributions in an amount equal to the aggregate of the stated liquidation amount of $ per trust preferred security plus accrued and unpaid distributions thereon to the date of payment. However, such holders will not receive such distribution if Citigroup Global Markets Holdings instead distributes on a ratable basis to the holders of the trust preferred securities junior subordinated debt securities in an aggregate stated principal amount equal to the aggregate stated liquidation amount of, with an interest rate identical to the distribution rate of, and with accrued and unpaid interest equal to accrued and unpaid distributions on, the trust preferred securities outstanding at such time. See "-- Distribution of the Junior Subordinated Debt Securities." If this distribution can be paid only in part because CGMH Capital [II] has insufficient assets available to pay in full the aggregate distribution, then the amounts payable directly by CGMH Capital [II] on the trust preferred securities shall be paid on a ratable basis. The holders of the common securities will be entitled to receive distributions upon any such liquidation on a ratable basis with the holders of the trust preferred securities. However, if a declaration default has occurred and is continuing, the trust preferred securities shall have a preference over the common securities with regard to such distributions. Pursuant to the declaration, CGMH Capital [II] shall terminate: (1) on , 20 , the expiration of the term of CGMH Capital [II]; (2) upon the bankruptcy of Citigroup Global Markets Holdings or the holder of the common securities; (3) upon (a) the filing of a certificate of dissolution or its equivalent regarding the holder of the common securities or Citigroup Global Markets Holdings, the filing of a certificate of cancellation regarding CGMH Capital [II], or the revocation of the charter of the holder of the common securities or Citigroup Global Markets Holdings and (b) the expiration of 90 days after the date of revocation without a reinstatement thereof; (4) upon the distribution of junior subordinated debt securities to holders of trust preferred securities; 20 (5) upon the entry of a decree of a judicial dissolution of the holder of the common securities, Citigroup Global Markets Holdings or CGMH Capital [II]; or (6) upon the redemption of all the trust securities. DECLARATION DEFAULTS An "indenture default" is a default under the indenture and also constitutes a "declaration default," which is an event of default under the declaration relating to the trust securities. Pursuant to the declaration, however, the holder of the common securities will be deemed to have waived any declaration defaults relating to the common securities until all declaration defaults relating to the trust preferred securities have been cured, waived or otherwise eliminated. Until such declaration defaults relating to the trust preferred securities have been so cured, waived, or otherwise eliminated, the institutional trustee will be deemed to be acting solely on behalf of the holders of the trust preferred securities. Only the holders of the trust preferred securities will have the right to direct the institutional trustee as to matters under the declaration, and therefore the indenture. In the event that any declaration default relating to the trust preferred securities is waived by the holders of the trust preferred securities as provided in the declaration, the holders of common securities pursuant to the declaration have agreed that such waiver also constitutes a waiver of such declaration default relating to the common securities for all purposes under the declaration without any further act, vote or consent of the holders of common securities. See "-- Voting Rights." If the institutional trustee fails to enforce its rights under the junior subordinated debt securities, any holder of trust preferred securities may directly institute a legal proceeding against Citigroup Global Markets Holdings to enforce these rights without first suing the institutional trustee or any other person or entity. If a declaration default has occurred and is continuing and such event is attributable to the failure of Citigroup Global Markets Holdings to pay interest or principal on the junior subordinated debt securities on the date such interest or principal is otherwise payable, or in the case of redemption, the redemption date, then a holder of trust preferred securities may also bring a direct action. This means that a holder may directly sue for enforcement of payment to such holder of the principal of or interest on the junior subordinated debt securities having a principal amount equal to the aggregate liquidation amount of the trust preferred securities of such holder on or after the respective due date specified in the junior subordinated debt securities. Such holder need not first (1) direct the institutional trustee to enforce the terms of the junior subordinated debt securities or (2) sue Citigroup Global Markets Holdings to enforce the institutional trustee's rights under the junior subordinated debt securities. In connection with such direct action, Citigroup Global Markets Holdings will be subrogated to the rights of such holder of trust preferred securities under the declaration to the extent of any payment made by Citigroup Global Markets Holdings to such holder of trust preferred securities in such direct action. This means that Citigroup Global Markets Holdings will be entitled to payment of amounts that a holder of trust preferred securities receives in respect of an unpaid distribution that resulted in the bringing of a direct action to the extent that such holder receives or has already received full payment relating to such unpaid distribution from CGMH Capital [II]. The holders of trust preferred securities will not be able to exercise directly any other remedy available to the holders of the junior subordinated debt securities. Upon the occurrence of an indenture event of default, the institutional trustee as the sole holder of the junior subordinated debt securities will have the right under the indenture to declare the principal of and interest on the junior subordinated debt securities to be immediately due and payable. Citigroup Global Markets Holdings and CGMH Capital [II] are each required to file annually with the institutional trustee an officers' certificate as to its compliance with all conditions and covenants under the declaration. VOTING RIGHTS Except as described in this prospectus under "Description of the Guarantee -- Modification of the Guarantee; Assignment," and except as provided under the Statutory Trust Act, the Trust Indenture Act 21 and as otherwise required by law and the declaration, the holders of the trust preferred securities will have no voting rights. The holders of a majority in aggregate liquidation amount of the trust preferred securities have the right to direct any proceeding for any remedy available to the institutional trustee so long as the institutional trustee receives the tax opinion discussed below. The holders also have the right to direct the institutional trustee under the declaration to: (1) direct any proceeding for any remedy available to the indenture trustee, or exercising any trust or power conferred on the indenture trustee; (2) waive any past indenture event of default that is waivable under Section 5.13 of the indenture; (3) exercise any right to rescind or annul an acceleration of the maturity of the junior subordinated debt securities; or (4) consent to any amendment, modification or termination where such consent is required. Where a consent or action under the indenture would require the consent or act of holders of more than a majority in principal amount of the junior subordinated debt securities, or a "super majority," then only a super majority may direct the institutional trustee to give such consent or take such action. If the institutional trustee fails to enforce its rights under the junior subordinated debt securities, any record holder of trust preferred securities may directly sue Citigroup Global Markets Holdings to enforce the institutional trustee's rights under the junior subordinated debt securities. The record holder does not have to sue the institutional trustee or any other person or entity before enforcing his rights. The institutional trustee is required to notify all holders of the trust preferred securities of any notice of default received from the indenture trustee. The notice is required to state that the default also constitutes a declaration default. Except for directing the time, method and place of conducting a proceeding for a remedy available to the institutional trustee, the institutional trustee will not take any of the actions described in clauses (1), (2), (3) or (4) above unless the institutional trustee receives an opinion of a nationally recognized independent tax counsel. The opinion must be to the effect that, as a result of such action, CGMH Capital [II] will not fail to be classified as a grantor trust for United States federal income tax purposes. If the consent of the institutional trustee is required under the indenture for any amendment, modification or termination of the indenture, the institutional trustee is required to request the written direction of the holders of the trust securities. Then, the institutional trustee will vote as directed by a majority in liquidation amount of the trust securities voting together as a single class. Where any amendment, modification or termination under the indenture would require the consent of a super majority, however, the institutional trustee may only give such consent at the direction of the holders of the same super majority of the holders of the trust securities. The institutional trustee is not required to take any such action in accordance with the directions of the holders of the trust securities unless the institutional trustee has obtained a tax opinion to the effect described above. A waiver of an indenture default by the institutional trustee at the direction of the holders of the trust preferred securities will constitute a waiver of the corresponding declaration default. Any required approval or direction of holders of trust preferred securities may be given at a separate meeting of holders of trust preferred securities convened for such purpose, at a meeting of all of the holders of trust securities or by written consent. The regular trustees will mail to each holder of record of trust preferred securities a notice of any meeting at which such holders are entitled to vote, or of any matter upon which action by written consent of such holders is to be taken. Each such notice will include a statement setting forth the following information: - the date of such meeting or the date by which such action is to be taken; 22 - a description of any resolution proposed for adoption at such meeting on which such holders are entitled to vote or of such matter upon which written consent is sought; and - instructions for the delivery of proxies or consents. No vote or consent of the holders of trust preferred securities will be required for CGMH Capital [II] to redeem and cancel trust preferred securities or distribute junior subordinated debt securities in accordance with the declaration. Despite the fact that holders of trust preferred securities are entitled to vote or consent under the circumstances described above, any of the trust preferred securities that are owned at the time by Citigroup Global Markets Holdings or any entity directly or indirectly controlling or controlled by, or under direct or indirect common control with, Citigroup Global Markets Holdings, will not be entitled to vote or consent. Instead, these trust preferred securities will be treated as if they were not outstanding. The procedures by which holders of trust preferred securities may exercise their voting rights are described below. See "-- Book-Entry Only Issuance." Holders of the trust preferred securities generally will have no rights to appoint or remove the Citigroup Global Markets Holdings trustees. Instead, the trustees may be appointed, removed or replaced solely by Citigroup Global Markets Holdings as the indirect or direct holder of all of the common securities. MODIFICATION OF THE DECLARATION The declaration may be modified and amended if approved by the regular trustees, and in certain circumstances, the institutional trustee and the Delaware trustee. If, however, any proposed amendment provides for, or the regular trustees otherwise propose to effect, (1) any action that would adversely affect the powers, preferences or special rights of the trust securities, whether by way of amendment to the declaration or otherwise or (2) the dissolution, winding-up or termination of CGMH Capital [II] other than pursuant to the terms of the declaration, then the holders of the trust securities voting together as a single class will be entitled to vote on such amendment or proposal. Such amendment or proposal shall not be effective except with the approval of holders of at least a majority in liquidation amount of the trust securities affected thereby. If, however, any amendment or proposal referred to in clause (1) above would adversely affect only the trust preferred securities or the common securities, then only holders of the affected class will be entitled to vote on such amendment or proposal. Such amendment or proposal shall not be effective except with the approval of holders of a majority in liquidation amount of such class of trust securities. Despite the foregoing, no amendment or modification may be made to the declaration if such amendment or modification would (1) cause CGMH Capital [II] to be classified for United States federal income tax purposes as other than a grantor trust, (2) reduce or otherwise adversely affect the powers of the institutional trustee or (3) cause CGMH Capital [II] to be deemed an "investment company" which is required to be registered under the 1940 Act. MERGERS, CONSOLIDATIONS OR AMALGAMATIONS CGMH Capital [II] may not consolidate, amalgamate, merge with or into, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety, to any corporation or other body except as described below. CGMH Capital [II] may, with the consent of the regular trustees and 23 without the consent of the holders of the trust securities, consolidate, amalgamate, merge with or into, or be replaced by a trust organized as such under the laws of any State; provided that: (1) such successor entity either (a) expressly assumes all of the obligations of CGMH Capital [II] under the trust securities or (b) substitutes for the trust preferred securities other successor securities having substantially the same terms as the trust securities, so long as the successor securities rank the same as the trust securities rank regarding distributions and payments upon liquidation, redemption and otherwise; (2) Citigroup Global Markets Holdings expressly acknowledges a trustee of such successor entity possessing the same powers and duties as the institutional trustee, in its capacity as the holder of the junior subordinated debt securities; (3) the trust preferred securities or any successor securities are listed, or any successor securities will be listed upon notification of issuance, on any national securities exchange or with another organization on which the trust preferred securities are then listed or quoted; (4) such merger, consolidation, amalgamation or replacement does not cause the trust preferred securities, including any successor securities, to be downgraded by any nationally recognized statistical rating organization; (5) such merger, consolidation, amalgamation or replacement does not adversely affect the rights, preferences and privileges of the holders of the trust securities, including any successor securities, in any material respect, other than in connection with any dilution of the holders' interest in the new entity; (6) such successor entity has a purpose identical to that of CGMH Capital [II]; (7) prior to such merger, consolidation, amalgamation or replacement, CGMH Capital [II] has received an opinion of a nationally recognized independent counsel to CGMH Capital [II] experienced in such matters to the effect that (a) such merger, consolidation, amalgamation or replacement does not adversely affect the rights, preferences and privileges of the holders of the trust securities, including any successor securities, in any material respect, other than in connection with any dilution of the holders' interest in the new entity; and (b) following such merger, consolidation, amalgamation or replacement, neither CGMH Capital [II] nor such successor entity will be required to register as an "investment company" under the 1940 Act; and (8) Citigroup Global Markets Holdings guarantees the obligations of such successor entity under the successor securities at least to the extent provided by the guarantee. Despite the foregoing, CGMH Capital [II] will not, except with the consent of holders of 100% in liquidation amount of the trust securities, consolidate, amalgamate, merge with or into, or be replaced by any other entity or permit any other entity to consolidate, amalgamate, merge with or into, or replace it, if in the opinion of a nationally recognized independent tax counsel experienced in such matters, such consolidation, amalgamation, merger or replacement would cause CGMH Capital [II] or the successor entity to be classified as other than a grantor trust for United States federal income tax purposes. BOOK-ENTRY ONLY ISSUANCE Book-Entry Trust Preferred Securities The trust preferred securities will be book-entry securities. Upon issuance, all book-entry securities will be represented by one or more fully registered global trust preferred securities, without distribution 24 coupons. Each global capital security will be deposited with, or on behalf of, The Depository Trust Company, a securities depositary, and will be registered in the name of DTC or a nominee of DTC. DTC will thus be the only registered holder of these trust preferred securities and will be considered the sole owner of the trust preferred securities for purposes of the declaration. Purchasers of trust preferred securities may only hold interests in the global notes through DTC if they are participants in the DTC system. Purchasers may also hold interests through a securities intermediary -- banks, brokerage houses and other institutions that maintain securities accounts for customers -- that has an account with DTC or its nominee ("Participants"). DTC will maintain accounts showing the trust preferred security holdings of its participants, and these participants will in turn maintain accounts showing the trust preferred security holdings of their customers. Some of these customers may themselves be securities intermediaries holding trust preferred securities for their customers. Thus, each beneficial owner of a book-entry trust preferred security will hold that trust preferred security indirectly through a hierarchy of intermediaries, with DTC at the "top" and the beneficial owner's own securities intermediary at the "bottom." The trust preferred securities of each beneficial owner of a book-entry security will be evidenced solely by entries on the books of the beneficial owner's securities intermediary. The actual purchaser of the trust preferred securities will generally not be entitled to have the trust preferred securities represented by the global securities registered in its name and will not be considered the owner under the declaration. In most cases, a beneficial owner will also not be able to obtain a paper certificate evidencing the holder's ownership of trust preferred securities. The book-entry system for holding trust preferred securities eliminates the need for physical movement of certificates and is the system through which most publicly traded common stock is held in the United States. However, the laws of some jurisdictions require some purchasers of securities to take physical delivery of their securities in definitive form. These laws may impair the ability to transfer book-entry securities. In this prospectus, for book-entry trust preferred securities, references to actions taken by trust preferred security holders will mean actions taken by DTC upon instructions from its participants, and references to payments and notices of redemption to trust preferred security holders will mean payments and notices of redemption to DTC as the registered holder of the trust preferred securities for distribution to participants in accordance with DTC's procedures. A beneficial owner of book-entry securities represented by a global trust preferred security may exchange the securities for definitive (paper) trust preferred securities only if: - DTC is unwilling or unable to continue as depositary for such global trust preferred security and Citigroup Global Markets Holdings is unable to find a qualified replacement for DTC within 90 days; - at any time DTC ceases to be a clearing agency registered under the Securities Exchange Act of 1934; or - Citigroup Global Markets Holdings in its sole discretion decides to allow some or all book-entry securities to be exchangeable for definitive trust preferred securities in registered form. Any global trust preferred security that is exchangeable will be exchangeable in whole for definitive notes in registered form, with the same terms and of an equal aggregate principal amount, in denominations of $ and whole multiples of $ . Definitive trust preferred securities will be registered in the name or names of the person or persons specified by DTC in a written instruction to the registrar of the securities. DTC may base its written instruction upon directions it receives from its participants. The Depository Trust Company DTC is a limited purpose trust company organized under the laws of the State of New York, a "banking organization" within the meaning of the New York banking law, a member of the Federal 25 Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency" registered under section 17A of the Securities Exchange Act of 1934. The rules applicable to DTC and its participants are on file with the SEC. Citigroup Global Markets Holdings and the Trustees will not have any responsibility or liability for any aspect of the records relating to, or payments made on account of, beneficial ownership interest in the book-entry securities or for maintaining, supervising or reviewing any records relating to the beneficial ownership interests. DTC may discontinue providing its services as securities depositary with respect to the trust preferred securities at any time by giving reasonable notice to CGMH Capital [II]. Under such circumstances, in the event that a successor securities depositary is not obtained, trust preferred securities certificates are required to be printed and delivered. Additionally, the regular trustees, with the consent of Citigroup Global Markets Holdings, may decide to discontinue use of the system of book-entry transfers through DTC or any successor depositary with respect to the trust preferred securities. In that event, certificates for the trust preferred securities will be printed and delivered. Distributions on Book-Entry Capital Securities Citigroup Global Markets Holdings will make all distributions on book-entry capital securities to DTC. Upon receipt of any payment, DTC will immediately credit the accounts of its participants on its book-entry registration and transfer system. DTC will credit those accounts in proportion to the participants' respective beneficial interests in the global capital securities as shown on the records of DTC. Payments by participants to beneficial owners of book-entry capital securities will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of those participants. The information in this section about DTC has been obtained from sources that Citigroup Global Markets Holdings and CGMH Capital [II] believe to be reliable, but neither Citigroup Global Markets Holdings nor CGMH Capital [II] takes responsibility for the accuracy thereof. INFORMATION CONCERNING THE INSTITUTIONAL TRUSTEE Prior to the occurrence of a default relating to the trust securities, the institutional trustee undertakes to perform only such duties as are specifically set forth in the declaration. After such a default, the institutional trustee will exercise the same degree of care as a prudent individual would exercise in the conduct of his or her own affairs. The institutional trustee is under no obligation to exercise any of the powers vested in it by the declaration at the request of any holder of trust preferred securities unless offered reasonable indemnity by such holder against the costs, expenses and liabilities which might be incurred thereby. Despite the foregoing, the holders of trust preferred securities will not be required to offer such indemnity in the event such holders, by exercising their voting rights, direct the institutional trustee to take any action following a declaration default. PAYING AGENT In the event that the trust preferred securities do not remain in book-entry only form, the following provisions will apply: - the institutional trustee will act as paying agent and may designate an additional or substitute paying agent at any time; - registration of transfers of trust preferred securities will be effected without charge by or on behalf of CGMH Capital [II], but upon payment, with the giving of such indemnity as CGMH Capital [II] or the Citigroup Global Markets Holdings may require, in respect of any tax or other government charges that may be imposed in relation to it; and - CGMH Capital [II] will not be required to register or cause to be registered the transfer of trust preferred securities after such trust preferred securities have been called for redemption. 26 GOVERNING LAW The declaration and the trust preferred securities will be governed by, and construed in accordance with, the internal laws of the State of Delaware. MISCELLANEOUS The regular trustees are authorized and directed to operate CGMH Capital [II] in such a way so that CGMH Capital [II] will not be required to register as an "investment company" under the Investment Company Act or be characterized as other than a grantor trust for United States federal income tax purposes. Citigroup Global Markets Holdings is authorized and directed to conduct its affairs so that the junior subordinated debt securities will be treated as indebtedness of Citigroup Global Markets Holdings for United States federal income tax purposes. In this connection, Citigroup Global Markets Holdings and the regular trustees are authorized to take any action, not inconsistent with applicable law, the certificate of trust of CGMH Capital [II] or the certificate of incorporation of Citigroup Global Markets Holdings, that each of Citigroup Global Markets Holdings and the regular trustees determine in their discretion to be necessary or desirable to achieve such end, as long as such action does not adversely affect the interests of the holders of the trust preferred securities or vary the terms of the trust preferred securities in any material way. Holders of the trust preferred securities have no preemptive rights. 27 DESCRIPTION OF THE JUNIOR SUBORDINATED DEBT SECURITIES Set forth below is a description of the specific terms of the junior subordinated debt securities in which CGMH Capital [II] will invest the proceeds from the issuance and sale of the trust securities. The following description is not intended to be complete and is qualified by the indenture, dated as of , 2004, as supplemented, between Citigroup Global Markets Holdings and JPMorgan Chase Bank, as the indenture trustee, which is filed as an exhibit to the registration statement of which this prospectus forms a part and pursuant to the Trust Indenture Act. Several capitalized terms used herein are defined in the indenture. So that you may easily locate the more detailed provisions, the numbers in parentheses below refer to sections in the indenture. Wherever particular sections or defined terms of the indenture are referred to, such sections or defined terms are incorporated herein by reference as part of the statement made, and the statement is qualified in its entirety by such reference. Under circumstances discussed more fully below involving the dissolution of CGMH Capital [II], provided that any required regulatory approval is obtained, junior subordinated debt securities will be distributed to the holders of the trust securities in liquidation of CGMH Capital [II]. See "Description of the Trust Preferred Securities -- Special Event Redemption." If the junior subordinated debt securities are distributed to the holders of the trust preferred securities, Citigroup Global Markets Holdings will use its best efforts to have the junior subordinated debt securities listed on the NYSE or on such other national securities exchange or similar organization on which the trust preferred securities are then listed or quoted. GENERAL The junior subordinated debt securities will be issued as unsecured debt under the indenture. The junior subordinated debt securities will be limited in aggregate principal amount to approximately $ . This amount is the sum of the aggregate stated liquidation amount of the trust preferred securities and the capital contributed by Citigroup Global Markets Holdings to CGMH Capital [II] in exchange for the common securities. The entire principal amount of the junior subordinated debt securities will mature and become due and payable, together with any accrued and unpaid interest thereon including compound interest (as defined herein) and additional interest (as defined herein), if any, on , 20 . If junior subordinated debt securities are distributed to holders of trust preferred securities in liquidation of such holders' interests in CGMH Capital [II], such junior subordinated debt securities will initially be issued in the form of one or more global securities (as described below). As described in this prospectus, under limited circumstances, junior subordinated debt securities may be issued in certificated form in exchange for a global security. In the event that junior subordinated debt securities are issued in certificated form, such junior subordinated debt securities will be in denominations of $ and integral multiples thereof and may be transferred or exchanged at the offices described below. Payments on junior subordinated debt securities issued as a global security will be made to DTC, to a successor depositary or, in the event that no depositary is used, to a paying agent for the junior subordinated debt securities. In the event junior subordinated debt securities are issued in certificated form, principal and interest will be payable, the transfer of the junior subordinated debt securities will be registrable and junior subordinated debt securities will be exchangeable for junior subordinated debt securities of other denominations of a like aggregate principal amount at the corporate trust office of the indenture trustee in New York, New York. Payment of interest may be made at the option of Citigroup Global Markets Holdings by check mailed to the address of the persons entitled thereto. See "-- Book-Entry and Settlement." Citigroup Global Markets Holdings does not intend to issue and sell the junior subordinated debt securities to any purchasers other than CGMH Capital [II]. There are no covenants or provisions in the indenture that would afford the holders of the junior subordinated debt securities protection in the event of a highly leveraged transaction, reorganization, 28 restructuring, merger or similar transaction involving Citigroup Global Markets Holdings that may adversely affect such holders. CONSOLIDATION, MERGER AND SALE OF ASSETS The indenture provides that Citigroup Global Markets Holdings will not consolidate with or merge into any other corporation or convey, transfer or lease its assets substantially as an entirety unless: - the successor corporation expressly assumes the due and punctual payment of the principal of, and premium, if any, and interest on all junior subordinated debt securities issued thereunder and the performance of every other covenant of the indenture on the part of Citigroup Global Markets Holdings; and - immediately thereafter no default and no event which, after notice or lapse of time, or both, would become a default, shall have happened and be continuing. Upon any such consolidation, merger, conveyance or transfer, the successor corporation shall succeed to and be substituted for Citigroup Global Markets Holdings under the indenture. Thereafter the predecessor corporation shall be relieved of all obligations and covenants under the indenture and the junior subordinated debt securities. (Article VIII) SUBORDINATION The indenture provides that the junior subordinated debt securities are subordinated and junior in right of payment to all Senior Indebtedness (as defined below) of Citigroup Global Markets Holdings. This means that no payment of principal, including redemption payments, premium, if any, or interest on the junior subordinated debt securities may be made if: - any Senior Indebtedness of Citigroup Global Markets Holdings has not been paid when due and any applicable grace period relating to such default has ended and such default has not been cured or waived or ceased to exist; or - the maturity of any Senior Indebtedness of Citigroup Global Markets Holdings has been accelerated because of a default. Upon any distribution of assets of Citigroup Global Markets Holdings to creditors upon any dissolution, winding-up, liquidation or reorganization, whether voluntary or involuntary, or in bankruptcy, insolvency, receivership or other proceedings, all principal, premium, if any, and interest due or to become due on all Senior Indebtedness of Citigroup Global Markets Holdings must be paid in full before the holders of junior subordinated debt securities are entitled to receive or retain any payment. Upon satisfaction of all claims related to all Senior Indebtedness of Citigroup Global Markets Holdings then outstanding, the rights of the holders of the junior subordinated debt securities will be subrogated to the rights of the holders of Senior Indebtedness of Citigroup Global Markets Holdings to receive payments or distributions applicable to Senior Indebtedness until all amounts owing on the junior subordinated debt securities are paid in full. The term "Senior Indebtedness" means, with respect to Citigroup Global Markets Holdings: (1) the principal, premium, if any, and interest in respect of (a) indebtedness for money borrowed and (b) indebtedness evidenced by securities, notes, debentures, bonds or other similar instruments issued by Citigroup Global Markets Holdings including all indebtedness (whether nor or hereafter outstanding) issued under (i) the senior debt indenture, dated as of December 1, 1988, between Salomon Inc and Citibank, N.A., as trustee, in case as the same may be amended, modified, or supplemented from time to time, (ii) the senior debt indenture, dated as of October 27, 1993, between Salomon Inc and The Bank of New York, as trustee, in case as the same may be amended, modified, or supplemented from time to time, and (iii) the subordinated debt indenture, dated as December 1, 1988, between Salomon Inc and Bankers Trust Company, as trustee, in case as the same may be amended, modified or supplemented from time to time; 29 (2) all capital lease obligations of Citigroup Global Markets Holdings; (3) all obligations of Citigroup Global Markets Holdings issued or assumed as the deferred purchase price of property, all conditional sale obligations of Citigroup Global Markets Holdings and all obligations of Citigroup Global Markets Holdings under any conditional sale or title retention agreement, but excluding trade accounts payable arising in the ordinary course of business; (4) all obligations, contingent or otherwise, of Citigroup Global Markets Holdings in respect of any letters of credit, banker's acceptance, security purchase facilities or similar credit transactions; (5) all obligations in respect of interest rate swap, cap or other agreements, interest rate future or option contracts, currency swap agreements, currency future or option contracts and other similar agreements; (6) all obligations of the type referred to in clauses (1) through (5) above of other persons for the payment of which Citigroup Global Markets Holdings is responsible or liable as obligor, guarantor or otherwise; and (7) all obligations of the type referred to in clauses (1) through (6) above of other persons secured by any lien on any property or asset of Citigroup Global Markets Holdings, whether or not such obligation is assumed by such obligor, except that Senior Indebtedness does not include (A) any indebtedness issued under the indenture, dated as of , 2004, as supplemented, between Citigroup Global Markets Holdings and JPMorgan Chase Bank, as the indenture trustee; and (B) any indebtedness or any guarantee that is by its terms subordinated to, or ranks equally with, the junior subordinated debt securities and the issuance of which (x) has received the concurrence or approval of the staff of the Federal Reserve Bank of New York or the staff of the Board of Governors of the Federal Reserve System or (y) does not at the time of issuance prevent the junior subordinated debt securities from qualifying for Tier 1 capital treatment for Citigroup Inc. (irrespective of any limits on the amount of Citigroup Inc's Tier 1 capital) under the applicable capital adequacy guidelines, regulations, policies or published interpretations of the Board of Governors of the Federal Reserve System. Such Senior Indebtedness shall continue to be Senior Indebtedness and be entitled to the benefits of the subordination provisions irrespective of any amendment, modification or waiver of any term of such Senior Indebtedness. The indenture does not limit the aggregate amount of Senior Indebtedness that may be issued by Citigroup Global Markets Holdings. OPTIONAL REDEMPTION Citigroup Global Markets Holdings shall have the right to redeem the junior subordinated debt securities, in whole or in part, from time to time, on or after , or at any time upon the occurrence of a Tax Event, Investment Company Event or a Regulatory Capital Event, as described above, upon not less than 30 nor more than 60 days' notice. The redemption price will be equal to 100% of the principal amount to be redeemed plus any accrued and unpaid interest, including additional interest (as described below), if any, to the redemption date. If a partial redemption of the trust preferred securities resulting from a partial redemption of the junior subordinated debt securities would result in the delisting of the trust preferred securities, Citigroup Global Markets Holdings may only redeem the junior subordinated debt securities in whole. (Section 11.2) Citigroup Global Markets Holdings may need regulatory approval to redeem the junior subordinated debt securities. See "Description of the Trust Preferred Securities -- Special Event Redemption." 30 INTEREST The junior subordinated debt securities will bear interest at the annual rate of %, from and including the original date of issuance, payable in arrears on of each year, commencing . Each date on which interest is paid is called an "interest payment date." Interest will be paid to the person in whose name such junior subordinated debt security is registered, with limited exceptions, at the close of business on the business day next preceding such interest payment date. In the event the junior subordinated debt securities shall not continue to remain in book-entry only form, Citigroup Global Markets Holdings shall have the right to select record dates, which shall be more than 14 days but less than 60 days prior to the interest payment date. The amount of interest payable for any period will be computed on the basis of a 360-day year of twelve 30-day months. The amount of interest payable for any period shorter than a full period will be computed on the basis of the actual number of days elapsed per 30-day month. In the event that any date on which interest is payable on the junior subordinated debt securities is not a business day, then payment of the interest payable on such date will be made on the next succeeding day that is a business day, and without any interest or other payment in respect of any such delay. However, if such business day is in the next succeeding calendar year, then such payment shall be made on the immediately preceding business day, in each case with the same force and effect as if made on such date. OPTION TO EXTEND INTEREST PAYMENT PERIOD Citigroup Global Markets Holdings can defer interest payments by extending the interest payment period for a period not exceeding consecutive periods. However, no extension period may extend beyond the maturity of the junior subordinated debt securities. At the end of such extension period, Citigroup Global Markets Holdings shall pay all interest then accrued and unpaid, including any additional interest as described under "Additional Interest" below, together with interest thereon compounded at the rate specified for the junior subordinated debt securities to the extent permitted by applicable law. During any such extension period: - Citigroup Global Markets Holdings shall not declare or pay any dividend on, make any distributions relating to, or redeem, purchase, acquire or make a liquidation payment relating to, any of its capital stock or make any guarantee payment with respect thereto other than - repurchases, redemptions or other acquisitions of shares of capital stock of Citigroup Global Markets Holdings in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of employees, officers, directors or consultants; - as a result of an exchange or conversion of any class or series of Citigroup Global Markets Holdings' capital stock for any other class or series of Citigroup Global Markets Holdings' capital stock; or - the purchase of fractional interests in shares of Citigroup Global Markets Holdings' capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged; and - Citigroup Global Markets Holdings shall not make any payment of interest, principal or premium, if any, on, or repay, repurchase or redeem, any debt securities issued by Citigroup Global Markets Holdings which rank equally with or junior to the junior subordinated debt securities. The foregoing, however, will not apply to any stock dividends paid by Citigroup Global Markets Holdings where the dividend stock is the same stock as that on which the dividend is being paid. Prior to the termination of any extension period, Citigroup Global Markets Holdings may further defer payments of interest by extending such extension period. Such extension period, including all such previous and further extensions, however, may not exceed consecutive interest periods, including the interest period in which notice of such extension period is given. No extension period, however, may extend beyond the maturity of the junior subordinated debt securities. Upon the termination of any extension period and the payment of all amounts then due, Citigroup Global Markets Holdings may 31 commence a new extension period, if consistent with the terms set forth in this section. No interest during an extension period, except at the end of such period, shall be due and payable. Citigroup Global Markets Holdings has no present intention of exercising its right to defer payments of interest by extending the interest payment period on the junior subordinated debt securities. If the institutional trustee is the sole holder of the junior subordinated debt securities, Citigroup Global Markets Holdings shall give the regular trustees and the institutional trustee notice of its selection of such extension period one business day prior to the earlier of (1) the date distributions on the trust preferred securities would be payable, if not for such extension period, or (2) the date the regular trustees are required to give notice to the NYSE or other applicable self-regulatory organization or to holders of the trust preferred securities of the record date or the date such distribution would be payable, if not for such extension period, but in any event one business day prior to such record date. The regular trustees shall give notice of Citigroup Global Markets Holdings' selection of such extension period to the holders of the trust preferred securities. If the institutional trustee is not the sole holder of the junior subordinated debt securities, Citigroup Global Markets Holdings shall give the holders of the junior subordinated debt securities notice of its selection of such extension period ten business days prior to the earlier of (1) the next succeeding interest payment date or (2) the date upon which Citigroup Global Markets Holdings is required to give notice to the NYSE or other applicable self-regulatory organization or to holders of the junior subordinated debt securities of the record or payment date of such related interest payment. (Sections 13.1 and 13.2) ADDITIONAL INTEREST If at any time CGMH Capital [II] is required to pay any taxes, duties, assessments or governmental charges of whatever nature, other than withholding taxes, imposed by the United States, or any other taxing authority, then Citigroup Global Markets Holdings will be required to pay additional interest on the junior subordinated debt securities. The amount of any additional interest will be an amount sufficient so that the net amounts received and retained by CGMH Capital [II] after paying any such taxes, duties, assessments or other governmental charges will be not less than the amounts CGMH Capital [II] would have received had no such taxes, duties, assessments or other governmental charges been imposed. This means that CGMH Capital [II] will be in the same position it would have been if it did not have to pay such taxes, duties, assessments or other charges. INDENTURE EVENTS OF DEFAULT The indenture provides that the following are events of default relating to the junior subordinated debt securities: (1) failure to pay in full interest accrued on any junior subordinated debt security upon the conclusion of a period consisting of 20 consecutive quarters commencing with the earliest quarter for which interest (including interest accrued on deferred payments) has not been paid in full and continuance of such failure to pay for a period of 30 days; or (2) specified events of bankruptcy, insolvency or reorganization, or court appointment of a receiver, liquidator or trustee of Citigroup Global Markets Holdings. If any indenture event of default shall occur and be continuing, the institutional trustee, as the holder of the junior subordinated debt securities, will have the right to declare the principal of and the interest on the junior subordinated debt securities, including any compound interest and additional interest, and any 32 other amounts payable under the indenture to be immediately due and payable. (Section 5.2) The institutional trustee may also enforce its other rights as a creditor relating to the junior subordinated debt securities. INDENTURE DEFAULTS The indenture provides that the following are defaults relating to the junior subordinated debt securities: (1) an indenture event of default; (2) a default in the payment of the principal of, or premium, if any, on, any junior subordinated debt security at its maturity; (3) a default for 30 days in the payment of any installment of interest on any junior subordinated debt security; (4) a default for 90 days after written notice in the performance of any other covenant in respect of the junior subordinated debt securities; (5) failure to make any required scheduled installment payment to a sinking fund for 30 days on debt securities of such series; and (6) CGMH Capital shall have voluntarily or involuntarily dissolved, wound-up its business or otherwise terminated its existence, except in connection with (i) the distribution of the junior subordinated debt securities to holders of the capital securities in liquidation or redemption of their interests in CGMH Capital upon a Special Event, (ii) the redemption of all of the outstanding capital securities or (iii) certain mergers, consolidations or amalgamations of CGMH Capital. There is no right of acceleration with respect to indenture defaults, except for indenture defaults that are indenture events of default, as described above. An indenture default also constitutes a declaration default. The holders of capital securities in limited circumstances have the right to direct the institutional trustee to exercise its rights as the holder of the junior subordinated debt securities. See "Description of the Capital Securities -- Declaration Defaults" and -- Voting Rights." Any deferral of interest on the junior subordinated debt securities made in accordance with the provisions described above in "Option to Extend Interest Payment Period" will not constitute a default under the indenture for the junior subordinated debt securities. (Section 5.7) The indenture trustee may withhold notice to the holders of the junior subordinated debt securities of any default with respect thereto, except in the payment of principal, premium or interest, if it considers such withholding to be in the interests of such holders. (Section 6.2) Despite the foregoing, if a declaration default has occurred and is continuing and such event is attributable to the failure of Citigroup Global Markets Holdings to pay interest or principal on the junior subordinated debt securities when such interest or principal is payable, Citigroup Global Markets Holdings acknowledges that, in such event, a holder of trust preferred securities may sue for payment on or after the respective due date specified in the junior subordinated debt securities. Citigroup Global Markets Holdings may not amend the declaration to remove this right to bring a direct action without the prior written consent of all of the holders of trust preferred securities of CGMH Capital [II]. Despite any payment made to such holder of trust preferred securities by Citigroup Global Markets Holdings in connection with a direct action, Citigroup Global Markets Holdings shall remain obligated to pay the principal of or interest on the junior subordinated debt securities held by CGMH Capital [II] or the institutional trustee of CGMH Capital [II]. Citigroup Global Markets Holdings shall be subrogated to the rights of the holder of such trust preferred securities relating to payments on the trust preferred securities to the extent of any payments made by Citigroup Global Markets Holdings to such holder in any direct action. The holders of 33 preferred securities will not be able to exercise directly any other remedy available to the holders of the junior subordinated debt securities. MODIFICATIONS AND AMENDMENTS Modifications and amendments to the indenture may be made by Citigroup Global Markets Holdings and the indenture trustee with the consent of the holders of a majority in principal amount of the junior subordinated debt securities at the time outstanding. However, no such modification or amendment may, without the consent of the holder of each junior subordinated debt security affected thereby: - modify the terms of payment of principal, premium, if any, or interest on such junior subordinated debt security; or - reduce the percentage of holders of junior subordinated debt securities necessary to modify or amend the indenture or waive compliance by Citigroup Global Markets Holdings with any covenant or past default. If the junior subordinated debt securities are held by CGMH Capital [II] or a trustee of CGMH Capital [II], such supplemental indenture shall not be effective until the holders of a majority in liquidation preference of trust securities of CGMH Capital [II] shall have consented to such supplemental indenture. If the consent of the holder of each outstanding junior subordinated debt security is required, such supplemental indenture shall not be effective until each holder of the trust securities of CGMH Capital [II] shall have consented to such supplemental indenture. (Section 9.2) DISCHARGE AND DEFEASANCE Citigroup Global Markets Holdings may discharge most of its obligations to holders of the junior subordinated debt securities issued under the indenture if such junior subordinated debt securities have not already been delivered to the indenture trustee for cancellation and either have become due and payable or are by their terms due and payable within one year, or are to be called for redemption within one year. Citigroup Global Markets Holdings discharges its obligations by depositing with the indenture trustee an amount certified to be sufficient to pay when due the principal of and premium, if any, and interest on all outstanding junior subordinated debt securities and to make any mandatory scheduled installment payments thereon when due. (Section 4.1) Unless otherwise specified in this prospectus relating to the junior subordinated debt securities, Citigroup Global Markets Holdings, at its option: - will be released from any and all obligations in respect of the junior subordinated debt securities, which is known as "defeasance and discharge;" or - need not comply with certain covenants specified herein regarding the junior subordinated debt securities, which is known as "covenant defeasance." If Citigroup Global Markets Holdings exercises its covenant defeasance option, the failure to comply with any defeased covenant and any default in the applicable resolution of the board of directors or supplemental indenture will no longer be a default under the indenture. To exercise either its defeasance and discharge or covenant defeasance options, Citigroup Global Markets Holdings must: - deposit with the indenture trustee, in trust, money or U.S. Government Obligations in an amount sufficient to pay all the principal of and premium, if any, and any interest on the junior subordinated debt securities when such payments are due; and - deliver an opinion of counsel, which, in the case of a defeasance and discharge, must be based upon a ruling or administrative pronouncement of the IRS, to the effect that the holders of the junior subordinated debt securities will not recognize gain or loss for U.S. federal income tax purposes as a result of such deposit or defeasance and will be required to pay U.S. federal income tax in the same manner as if such defeasance had not occurred. (Sections 4.2, 4.3 and 4.4) 34 When there is a defeasance and discharge, the indenture will no longer govern the junior subordinated debt securities, Citigroup Global Markets Holdings will no longer be liable for payment and the holders of such junior subordinated debt securities will be entitled only to the deposited funds. When there is a covenant defeasance, however, Citigroup Global Markets Holdings will continue to be obligated for payments when due if the deposited funds are not sufficient to pay the holders. The obligations under the indenture to pay all expenses of CGMH Capital [II], to register the transfer or exchange of junior subordinated debt securities, to replace mutilated, defaced, destroyed, lost or stolen junior subordinated debt securities, and to maintain paying agents and hold monies for payment in trust will continue even if Citigroup Global Markets Holdings exercises its defeasance and discharge or covenant defeasance options. CONCERNING THE INDENTURE TRUSTEE The indenture trustee has extended substantial credit facilities, the borrowings under which constitute Senior Indebtedness, to Citigroup Global Markets Holdings. Citigroup Global Markets Holdings and certain of its subsidiaries and affiliates also maintain bank accounts, borrow money and have other customary commercial banking or investment banking relationships with the indenture trustee in the ordinary course of business. BOOK-ENTRY AND SETTLEMENT If distributed to holders of trust preferred securities in connection with the involuntary or voluntary dissolution, winding-up or liquidation of CGMH Capital [II] as a result of the occurrence of a Special Event, the junior subordinated debt securities will be issued in the form of one or more global certificates registered in the name of the depositary or its nominee. Each global certificate is referred to as a "global security." Except under the limited circumstances described below, junior subordinated debt securities represented by a global security will not be exchangeable for, and will not otherwise be issuable as, junior subordinated debt securities in definitive form. The global securities described above may not be transferred except by the depositary to a nominee of the depositary or by a nominee of the depositary to the depositary or another nominee of the depositary or to a successor depositary or its nominee. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of such securities in definitive form. These laws may impair the ability to transfer beneficial interests in such a global security. Except as provided below, owners of beneficial interests in such a global security will not be entitled to receive physical delivery of junior subordinated debt securities in definitive form and will not be considered the holders, as defined in the indenture, of such global security for any purpose under the indenture. A global security representing junior subordinated debt securities is only exchangeable for another global security of like denomination and tenor to be registered in the name of the depositary or its nominee or to a successor depositary or its nominee. This means that each beneficial owner must rely on the procedures of the depositary, or if such person is not a participant, on the procedures of the participant through which such person owns its interest, to exercise any rights of a holder under the indenture. THE DEPOSITARY If junior subordinated debt securities are distributed to holders of trust preferred securities in liquidation of such holders' interests in CGMH Capital [II], DTC will act as securities depositary for the junior subordinated debt securities. As of the date of this prospectus, the description in this prospectus of DTC's book-entry system and DTC's practices as they relate to purchases, transfers, notices and payments relating to the trust preferred securities apply in all material respects to any debt obligations represented by one or more global securities held by DTC. Citigroup Global Markets Holdings may appoint a successor to DTC or any successor depositary in the event DTC or such successor depositary is unable or unwilling to continue as a depositary for the global securities. For a description of DTC and the specific terms of the depositary arrangements, see "Description of the Trust Preferred Securities -- Book-Entry Only Issuance." 35 None of Citigroup Global Markets Holdings, CGMH Capital [II], the indenture trustee, any paying agent and any other agent of Citigroup Global Markets Holdings or the indenture trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a global security for such junior subordinated debt securities or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. DISCONTINUANCE OF THE DEPOSITARY'S SERVICES A global security shall be exchangeable for junior subordinated debt securities registered in the names of persons other than DTC or its nominee only if: - DTC is unwilling or unable to continue as depositary for such global security and Citigroup Global Markets Holdings is unable to find a qualified replacement for DTC within 90 days; - at any time, DTC ceases to be a clearing agency registered under the Securities Exchange Act; or - Citigroup Global Markets Holdings, in its sole discretion decides some or all global securities shall be exchangeable for junior subordinated debt securities in registered form. Any global security that is exchangeable pursuant to the preceding sentence shall be exchangeable for junior subordinated debt securities registered in such names as the depositary shall direct. It is expected that such instructions will be based upon directions received by the depositary from its participants relating to ownership of beneficial interests in such global security. CERTAIN COVENANTS If the junior subordinated debt securities are issued to CGMH Capital [II] or a trustee of such trust in connection with the issuance of trust securities by CGMH Capital [II] and (1) there shall have occurred and be continuing a default; (2) Citigroup Global Markets Holdings shall be in default relating to its payment of any obligations under the guarantee; or (3) Citigroup Global Markets Holdings shall have given notice of its election to defer payments of interest on the junior subordinated debt securities by extending the interest payment period and such period, or any extension of such period, shall be continuing; then (a) Citigroup Global Markets Holdings shall not declare or pay any dividend on, make any distributions relating to, or redeem, purchase, acquire or make a liquidation payment relating to, any of its capital stock or make any guarantee payment with respect thereto other than - repurchases, redemptions or other acquisitions of shares of capital stock of Citigroup Global Markets Holdings in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of employees, officers, directors or consultants; - as a result of an exchange or conversion of any class or series of Citigroup Global Markets Holdings' capital stock for any other class or series of Citigroup Global Markets Holdings' capital stock; or - the purchase of fractional interests in shares of Citigroup Global Markets Holdings' capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged; and (b) Citigroup Global Markets Holdings shall not make any payment of interest, principal or premium on, or repay, repurchase or redeem, any debt securities issued by Citigroup Global Markets Holdings that rank equally with or junior to the junior subordinated debt securities. 36 The above restriction, however, will not apply to any stock dividends paid by Citigroup Global Markets Holdings where the dividend stock is the same stock as that on which the dividend is being paid. (Section 13.3) So long as the trust securities remain outstanding, Citigroup Global Markets Holdings will covenant to: - directly or indirectly maintain 100% ownership of the common securities of CGMH Capital [II], unless a permitted successor of Citigroup Global Markets Holdings succeeds to its ownership of the common securities; - not voluntarily dissolve, wind-up or terminate CGMH Capital [II], except in connection with (a) a distribution of junior subordinated debt securities or (b) mergers, consolidations or amalgamations permitted by the declaration; - timely perform its duties as sponsor of CGMH Capital [II]; and - use its reasonable efforts to cause CGMH Capital [II] to (a) remain a statutory trust, except in connection with the distribution of junior subordinated debt securities to the holders of trust securities in liquidation of CGMH Capital [II], the redemption of all of the trust securities of CGMH Capital [II], or mergers, consolidations or amalgamations, each as permitted by the declaration of CGMH Capital [II], and (b) otherwise continue to be classified as a grantor trust for United States federal income tax purposes. (Section 10.5) MISCELLANEOUS The indenture provides that Citigroup Global Markets Holdings will pay all fees and expenses related to: - the offering of the trust securities and the junior subordinated debt securities; - the organization, maintenance and dissolution of CGMH Capital [II]; - the retention of the trustees of CGMH Capital [II]; and - the enforcement by the institutional trustee of the rights of the holders of the trust preferred securities. 37 DESCRIPTION OF THE GUARANTEE Set forth below is a summary of information concerning the guarantee that will be executed and delivered by Citigroup Global Markets Holdings for the benefit of the holders of trust preferred securities. The guarantee will be qualified as an indenture under the Trust Indenture Act. JPMorgan Chase Bank will act as the guarantee trustee. The terms of the guarantee will be those set forth in the guarantee and those made part of the guarantee by the Trust Indenture Act. The summary is not intended to be complete and is qualified in all respects by the provisions of the form of guarantee, which is filed as an exhibit to the registration statement of which this prospectus forms a part, and the Trust Indenture Act. The guarantee will be held by the guarantee trustee for the benefit of the holders of the trust preferred securities. GENERAL Pursuant to and to the extent set forth in the guarantee, Citigroup Global Markets Holdings will irrevocably and unconditionally agree to pay in full to the holders of the trust preferred securities, except to the extent paid by CGMH Capital [II], as and when due, regardless of any defense, right of set-off or counterclaim that CGMH Capital [II] may have or assert, the following payments, which are referred to as "guarantee payments," without duplication: - any accrued and unpaid distributions that are required to be paid on the trust preferred securities, to the extent CGMH Capital [II] has funds available for such distributions; - the redemption price of $ per trust preferred security, plus all accrued and unpaid distributions, to the extent CGMH Capital [II] has funds available for such redemptions, relating to any trust preferred securities called for redemption by CGMH Capital [II]; and - upon a voluntary or involuntary dissolution, winding-up or termination of CGMH Capital [II], other than in connection with the distribution of junior subordinated debt securities to the holders of preferred securities or the redemption of all of the preferred securities, the lesser of (a) the aggregate of the liquidation amount and all accrued and unpaid distributions on the trust preferred securities to the date of payment, and (b) the amount of assets of CGMH Capital [II] remaining for distribution to holders of the trust preferred securities in liquidation of CGMH Capital [II]. Citigroup Global Markets Holdings' obligation to make a guarantee payment may be satisfied by direct payment of the required amounts by Citigroup Global Markets Holdings to the holders of trust preferred securities or by causing CGMH Capital [II] to pay such amounts to such holders. The guarantee will not apply to any payment of distributions or redemption price, or to payments upon the dissolution, winding-up or termination of CGMH Capital [II], except to the extent CGMH Capital [II] has funds available for such payments. If Citigroup Global Markets Holdings does not make interest payments on the junior subordinated debt securities, CGMH Capital [II] will not pay distributions on the trust preferred securities and will not have funds available for such payments. The guarantee, when taken together with Citigroup Global Markets Holdings' obligations under the junior subordinated debt securities, the indenture and the declaration, including its obligations to pay costs, expenses, debts and liabilities of CGMH Capital [II], other than those relating to trust securities, will provide a full and unconditional guarantee on a subordinated basis by Citigroup Global Markets Holdings of payments due on the trust preferred securities. Citigroup Global Markets Holdings' obligations in respect of the guarantee will be subordinated in right of payment to Senior Indebtedness of Citigroup Global Markets Holdings to the same extent that the junior subordinated debt securities are subordinated to Senior Indebtedness of Citigroup Global Markets Holdings. See "Description of the Junior Subordinated Debt Securities." 38 IMPORTANT COVENANTS OF CITIGROUP GLOBAL MARKETS HOLDINGS In the guarantee, Citigroup Global Markets Holdings will covenant that, so long as any trust preferred securities remain outstanding, if there shall have occurred any event that would constitute an event of default under such guarantee or a default under the declaration, then: - Citigroup Global Markets Holdings shall not declare or pay any dividend on, make any distributions relating to, or redeem, purchase, acquire or make a liquidation payment relating to, any of its capital stock or make any guarantee payment with respect thereto other than (a) repurchases, redemptions or other acquisitions of shares of capital stock of Citigroup Global Markets Holdings in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of employees, officers, directors or consultants; (b) as a result of an exchange or conversion of any class or series of Citigroup Global Markets Holdings' capital stock for any other class or series of Citigroup Global Markets Holdings' capital stock; or (c) the purchase of fractional interests in shares of Citigroup Global Markets Holdings' capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged; and - Citigroup Global Markets Holdings shall not make any payment of interest, principal or premium, if any, on, or repay, repurchase or redeem, any debt securities issued by Citigroup Global Markets Holdings which rank equally with or junior to the junior subordinated debt securities. The guarantee, however, will except from the foregoing any stock dividends paid by Citigroup Global Markets Holdings where the dividend stock is the same stock as that on which the dividend is being paid. MODIFICATION OF THE GUARANTEE; ASSIGNMENT The guarantee may be amended only with the prior approval of the holders of not less than a majority in aggregate liquidation amount of the outstanding trust preferred securities. No vote will be required, however, for any changes that do not adversely affect the rights of holders of trust preferred securities. All guarantees and agreements contained in the guarantee shall bind the successors, assignees, receivers, trustees and representatives of Citigroup Global Markets Holdings and shall inure to the benefit of the holders of the trust preferred securities then outstanding. EVENTS OF DEFAULT An event of default under the guarantee will occur upon the failure of Citigroup Global Markets Holdings to perform any of its payment or other obligations required by the guarantee. The holders of a majority in aggregate liquidation amount of the trust preferred securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the guarantee trustee in respect of the guarantee or to direct the exercise of any trust or power conferred upon the guarantee trustee under the guarantee. If the guarantee trustee fails to enforce the guarantee trustee's rights under the guarantee, any holder of related trust preferred securities may directly sue Citigroup Global Markets Holdings to enforce the guarantee trustee's rights under the guarantee without first suing CGMH Capital [II], the guarantee trustee or any other person or entity. A holder of trust preferred securities may also directly sue Citigroup Global Markets Holdings to enforce such holder's right to receive payment under the guarantee without first (1) directing the guarantee trustee to enforce the terms of the guarantee or (2) suing CGMH Capital [II] or any other person or entity. Citigroup Global Markets Holdings will be required to provide to the guarantee trustee such documents, reports and information as required by the Trust Indenture Act. 39 INFORMATION CONCERNING THE GUARANTEE TRUSTEE Prior to the occurrence of a default relating to the guarantee, the guarantee trustee will undertake to perform only such duties as are specifically set forth in the guarantee. After such default, the guarantee trustee will exercise the same degree of care as a prudent individual would exercise in the conduct of his or her own affairs. Provided that the foregoing requirements have been met, the guarantee trustee is under no obligation to exercise any of the powers vested in it by the guarantee at the request of any holder of trust preferred securities unless it is offered reasonable indemnity against the costs, expenses and liabilities that might be incurred thereby. TERMINATION OF THE GUARANTEE The guarantee will terminate as to the trust preferred securities upon full payment of the redemption price of all trust preferred securities, upon distribution of the junior subordinated debt securities to the holders of the trust preferred securities or upon full payment of the amounts payable in accordance with the declaration upon liquidation of CGMH Capital [II]. The guarantee will continue to be effective or will be reinstated, as the case may be, if at any time any holder of trust preferred securities must restore payment of any sums paid under the trust preferred securities or the guarantee. STATUS OF THE GUARANTEE The guarantee will constitute an unsecured obligation of Citigroup Global Markets Holdings and will rank: - junior in right of payment to all Senior Indebtedness of Citigroup Global Markets Holdings to the extent provided in the indenture; and - equally with all other trust preferred security guarantees that Citigroup Global Markets Holdings issues. The terms of the trust preferred securities provide that each holder of trust preferred securities by acceptance of such securities agrees to the subordination provisions and other terms of the guarantee. The guarantee will constitute a guarantee of payment and not of collection. This means that the guaranteed party may directly sue the guarantor to enforce its rights under the guarantee without suing any other person or entity. GOVERNING LAW The guarantee will be governed by, and construed in accordance with, the internal laws of the New York State. 40 EFFECT OF OBLIGATIONS UNDER THE JUNIOR SUBORDINATED DEBT SECURITIES AND THE GUARANTEE As set forth in the declaration, the sole purpose of CGMH Capital [II] is to issue the trust securities and to invest the proceeds from such issuance and sale in the junior subordinated debt securities. As long as payments of interest and other payments are made when due on the junior subordinated debt securities, such payments will be sufficient to cover the distributions and payments due on the trust securities. This is due to the following factors: - the aggregate principal amount of junior subordinated debt securities will be equal to the sum of the aggregate stated liquidation amount of the trust securities; - the interest rate and the interest and other payment dates on the junior subordinated debt securities will match the distribution rate and distribution and other payment dates for the trust preferred securities; - under the indenture, Citigroup Global Markets Holdings will pay, and CGMH Capital [II] will not be obligated to pay, directly or indirectly, all costs, expenses, debts and obligations of CGMH Capital [II] other than those relating to the trust securities; and - the declaration further provides that the Citigroup Global Markets Holdings trustees may not cause or permit CGMH Capital [II] to engage in any activity that is not consistent with the purposes of CGMH Capital [II]. Payments of distributions, to the extent there are available funds, and other payments due on the trust preferred securities, to the extent there are available funds, are guaranteed by Citigroup Global Markets Holdings to the extent described in this prospectus. If Citigroup Global Markets Holdings does not make interest payments on the junior subordinated debt securities, CGMH Capital [II] will not have sufficient funds to pay distributions on the trust preferred securities. The guarantee is a subordinated guarantee in relation to the trust preferred securities. The guarantee does not apply to any payment of distributions unless and until CGMH Capital [II] has sufficient funds for the payment of such distributions. See "Description of the Guarantee." The guarantee covers the payment of distributions and other payments on the trust preferred securities only if and to the extent that Citigroup Global Markets Holdings has made a payment of interest or principal or other payments on the junior subordinated debt securities. The guarantee, when taken together with Citigroup Global Markets Holdings' obligations under the junior subordinated debt securities and the indenture and its obligations under the declaration, will provide a full and unconditional guarantee of distributions, redemption payments and liquidation payments on the trust preferred securities. If Citigroup Global Markets Holdings fails to make interest or other payments on the junior subordinated debt securities when due, taking account of any extension period, the declaration allows the holders of the trust preferred securities to direct the institutional trustee to enforce its rights under the junior subordinated debt securities. If the institutional trustee fails to enforce these rights, any holder of trust preferred securities may directly sue Citigroup Global Markets Holdings to enforce such rights without first suing the institutional trustee or any other person or entity. See "Description of the Trust Preferred Securities" and "-- Voting Rights." A holder of trust preferred securities may institute a direct action if a declaration default has occurred and is continuing and such event is attributable to the failure of Citigroup Global Markets Holdings to pay interest or principal on the junior subordinated debt securities on the date such interest or principal is otherwise payable. A direct action may be brought without first (1) directing the institutional trustee to enforce the terms of the junior subordinated debt securities or (2) suing Citigroup Global Markets Holdings to enforce the institutional trustee's rights under the junior subordinated debt securities. In connection with such direct action, Citigroup Global Markets Holdings will be subrogated to the rights of such holder of trust preferred securities under the declaration to the extent of any payment made by Citigroup Global Markets Holdings to such holder of trust preferred securities. Consequently, Citigroup 41 Global Markets Holdings will be entitled to payment of amounts that a holder of trust preferred securities receives in respect of an unpaid distribution to the extent that such holder receives or has already received full payment relating to such unpaid distribution from CGMH Capital [II]. Citigroup Global Markets Holdings acknowledges that the guarantee trustee will enforce the guarantee on behalf of the holders of the trust preferred securities. If Citigroup Global Markets Holdings fails to make payments under the guarantee, the guarantee allows the holders of the trust preferred securities to direct the guarantee trustee to enforce its rights thereunder. If the guarantee trustee fails to enforce the guarantee, any holder of trust preferred securities may directly sue Citigroup Global Markets Holdings to enforce the guarantee trustee's rights under the guarantee. Such holder need not first sue CGMH Capital [II], the guarantee trustee, or any other person or entity. A holder of trust preferred securities may also directly sue Citigroup Global Markets Holdings to enforce such holder's right to receive payment under the guarantee. Such holder need not first (1) direct the guarantee trustee to enforce the terms of the guarantee or (2) sue CGMH Capital [II] or any other person or entity. Citigroup Global Markets Holdings and CGMH Capital [II] believe that the above mechanisms and obligations, taken together, are equivalent to a full and unconditional guarantee by Citigroup Global Markets Holdings of payments due on the trust preferred securities. See "Description of the Guarantee -- General." 42 CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS GENERAL The following is a general summary of United States federal income tax consequences of the purchase, ownership and disposition of the trust preferred securities. The summary is based on: - laws; - regulations; - rulings; and - decision now in effect, all of which may change, possibly with retroactive effect. This summary deals only with a beneficial owner of the trust preferred securities that purchases the trust preferred securities upon original issuance at the initial issue price and who will hold the trust preferred securities as capital assets. This summary does not address all of the United States federal income tax considerations that may be relevant to a beneficial owner of notes. For example, this summary does not address tax considerations applicable to investors to whom special tax rules may apply, including: - banks or other financial institutions; - tax-exempt entities; - insurance companies; - regulated investment companies; - common trust funds; - entities that are treated for United States federal income tax purposes as partnerships or other pass-through entities; - controlled foreign corporations; - dealers in securities or currencies; - persons that will hold the trust preferred securities as a hedge or in order to hedge against currency risk or as a part of an integrated investment, including a straddle or conversion transaction, comprised of a trust preferred security and one or more other positions; or - United States holders (as defined below) that have a functional currency other than the U.S. dollar. As used in this summary, a "United States holder" is a beneficial owner of the trust preferred securities who is: - a citizen or resident of the United States; - a corporation or other entity treated as a corporation created or organized in or under the laws of the United States or any political subdivision thereof; - an estate, if United States federal income taxation is applicable to the income of such estate regardless of the income's source; or - a trust if a United States court is able to exercise primary supervision over the trust's administration and one or more United States persons have the authority to control all of the trust's substantial decisions. As used in this summary, the term "non-United States holder" means a beneficial owner of the trust preferred securities who is not a United States holder and the term "United States" means the United 43 States of America, including the fifty states and the District of Columbia, but excluding its territories and possessions. Prospective investors should consult their tax advisors in determining the tax consequences to them of purchasing, holding and disposing of the trust preferred securities, including the application to their particular situation of the United States federal income tax considerations discussed below, as well as the application of state, local, foreign or other tax laws. CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBT SECURITIES In connection with the issuance of the junior subordinated debt securities, Cleary, Gottlieb, Steen & Hamilton, tax counsel to Citigroup Global Markets Holdings and CGMH Capital [II], will render its opinion generally to the effect that, under then current law and assuming full compliance with the terms of the indenture and other relevant documents, and based on the facts and assumptions contained in such opinion, the junior subordinated debt securities held by CGMH Capital [II] will be classified for United States federal income tax purposes as indebtedness of Citigroup Global Markets Holdings. CLASSIFICATION OF CGMH CAPITAL [II] In connection with the issuance of the trust preferred securities, Cleary, Gottlieb, Steen & Hamilton will render its opinion generally to the effect that, under then current law and assuming full compliance with the terms of the declaration, the indenture and other relevant documents, and based on the facts and assumptions contained in such opinion, CGMH Capital [II] will be classified for United States federal income tax purposes as a grantor trust and not as an association taxable as a corporation. Accordingly, for United States federal income tax purposes, each holder of trust preferred securities generally will be considered the owner of an undivided interest in the junior subordinated debt securities. Each United States holder will be required to include in its gross income all interest or original issue discount ("OID") and any gain recognized relating to its allocable share of those junior subordinated debt securities. UNITED STATES HOLDERS Interest Income and Original Issue Discount Under applicable Treasury regulations, a "remote" contingency that stated interest will not be timely paid will be ignored in determining whether a debt instrument is issued with OID. Citigroup Global Markets Holdings believes that the likelihood of its exercising its option to defer payments is remote within the meaning of the Treasury regulations. Based on the foregoing, Citigroup Global Markets Holdings believes that, although the matter is not free from doubt, the junior subordinated debt securities will not be considered to be issued with OID at the time of their original issuance. Accordingly, each United States holder of trust preferred securities should include in gross income such United States holder's allocable share of interest on the junior subordinated debt securities in accordance with such United States holder's method of tax accounting. Under the regulations, if the option to defer any payment of interest was determined not to be "remote," or if Citigroup Global Markets Holdings exercised such option, the junior subordinated debt securities would be treated as issued with OID at the time of issuance or at the time of such exercise, as the case may be. Then, all stated interest on the junior subordinated debt securities would thereafter be treated as OID as long as the junior subordinated debt securities remained outstanding. In such event, all of a United States holder's taxable interest income relating to the junior subordinated debt securities would constitute OID that would have to be included in income on an economic accrual basis before the receipt of the cash attributable to the interest, regardless of such United States holder's method of tax accounting, and actual distributions of stated interest would not be reported as taxable income. Consequently, a United States holder of trust preferred securities would be required to include in gross income OID even though Citigroup Global Markets Holdings would not make any actual cash payments during an extension period. No rulings or other interpretations have been issued by the IRS which have addressed the meaning of the term "remote" as used in the applicable Treasury regulations, and it is possible that the IRS could take a position contrary to the interpretation in this prospectus. 44 Because income on the trust preferred securities will constitute interest or OID, corporate holders of trust preferred securities will not be entitled to a dividends-received deduction and individual holders will not be entitled to a lower income tax rate in respect of certain dividends, relating to any income recognized relating to the trust preferred securities. Receipt of Junior Subordinated Debt Securities or Cash Upon Liquidation of CGMH Capital [II] Under the circumstances described in this prospectus, junior subordinated debt securities may be distributed to holders in exchange for trust preferred securities upon the liquidation of CGMH Capital [II]. Under current law, such a distribution, for United States federal income tax purposes, would be treated as a non-taxable event to each United States holder, and each United States holder would receive an aggregate tax basis in the junior subordinated debt securities equal to such holder's aggregate tax basis in its trust preferred securities. A United States holder's holding period in the junior subordinated debt securities received in liquidation of CGMH Capital [II] would include the period during which the trust preferred securities were held by such holder. See "Description of the Trust Preferred Securities -- Special Event Redemption." Under the circumstances described in this prospectus, the junior subordinated debt securities may be redeemed by Citigroup Global Markets Holdings for cash and the proceeds of such redemption distributed by CGMH Capital [II] to holders in redemption of their trust preferred securities. Under current law, such a redemption would, for United States federal income tax purposes, constitute a taxable disposition of the redeemed trust preferred securities. Accordingly, a United States holder could recognize gain or loss as if it had sold such redeemed trust preferred securities for cash. See "Description of the Trust Preferred Securities -- Special Event Redemption" and "-- Sales Exchange, or Other Disposition of Trust Preferred Securities." Sales Exchange, or Other Disposition of Trust Preferred Securities Upon the sale, exchange, retirement or other taxable disposition (collectively, a "disposition") of a trust preferred security, a United States holder will be considered to have disposed of all or part of its ratable share of the junior subordinated debt securities. Such United States holder will recognize gain or loss equal to the difference between its adjusted tax basis in the trust preferred securities and the amount realized on the disposition of such trust preferred securities. Assuming that Citigroup Global Markets Holdings does not exercise its option to defer payment of interest on the junior subordinated debt securities and that the junior subordinated debt securities are not deemed to be issued with OID, a United States holder's adjusted tax basis in the trust preferred securities generally will be its initial purchase price. If the junior subordinated debt securities are deemed to be issued with OID, a United States holder's tax basis in the trust preferred securities generally will be its initial purchase price, increased by OID previously includible in such United States holder's gross income to the date of disposition and decreased by distributions or other payments received on the trust preferred securities since and including the date that the junior subordinated debt securities were deemed to be issued with OID. Such gain or loss generally will be a capital gain or loss, except to the extent of any accrued interest relating to such United States holder's ratable share of the junior subordinated debt securities required to be included in income, and generally will be a long-term capital gain or loss if the trust preferred securities have been held for more than one year. Should Citigroup Global Markets Holdings exercise its option to defer payment of interest on the junior subordinated debt securities, the trust preferred securities may trade at a price that does not accurately reflect the value of accrued but unpaid interest relating to the underlying junior subordinated debt securities. In the event of such a deferral, a United States holder who disposes of its trust preferred securities between record dates for payments of distributions will be required to include in income as ordinary income accrued but unpaid interest on the junior subordinated debt securities to the date of disposition and to add such amount to its adjusted tax basis in its ratable share of the underlying junior subordinated debt securities deemed disposed of. To the extent the selling price is less than the holder's 45 adjusted tax basis, such holder will recognize a capital loss. Capital losses generally cannot be applied to offset ordinary income for United States federal income tax purposes. Information Reporting and Backup Withholding Generally, income on the trust preferred securities will be reported to the IRS and to holders of trust preferred securities following the calendar year of payment. In addition, United States holders may be subject to backup withholding tax on such payments if they do not provide their taxpayer identification numbers to the trustee in the manner required, fail to certify that they are not subject to backup withholding tax, or otherwise fail to comply with applicable backup withholding tax rules. United States holders may also be subject to information reporting and backup withholding tax with respect to the proceeds from a disposition of the trust preferred securities. Any amounts withheld under the backup withholding rules will be allowed as a credit against the United States holder's United States federal income tax liability provided the required information is timely furnished to the IRS. NON-UNITED STATES HOLDERS Under current United States federal income tax law: - withholding of United States federal income tax will not apply to a payment on a trust preferred security to a non-United States holder, provided that, (1) the holder does not actually or constructively own 10 percent or more of the total combined voting power of all classes of stock of Citigroup Global Markets Holdings entitled to vote and is not a controlled foreign corporation related to Citigroup Global Markets Holdings through stock ownership; (2) the beneficial owner provides a statement signed under penalties of perjury that includes its name and address and certifies that it is a non-United States holder in compliance with applicable requirements; and (3) neither Citigroup Global Markets Holdings nor its paying agent has actual knowledge or reason to know that the beneficial owner of the note is a United States holder. - withholding of United States federal income tax will generally not apply to any gain realized on the disposition of a trust preferred security. Despite the above, if a non-United States holder is engaged in a trade or business in the United States (or, if certain tax treaties apply, if the non-United States holder maintains a permanent establishment within the United States) and the interest on the trust preferred securities is effectively connected with the conduct of that trade or business (or, if certain tax treaties apply, attributable to that permanent establishment), such non-United States holder with be subject to United States federal income tax on the interest on a net income basis in the same manner as if such non-United States holder were a United States holder. In addition, a non-United States holder that is a foreign corporation engaged in a trade or business in the United States may be subject to a 30% (or, if certain tax treaties apply, such lower rates as provided) branch profits tax. Any gain realized on the disposition of a trust preferred security generally will not be subject to United States federal income tax unless: - that gain is effectively connected with the non-United States holder's conduct of a trade or business in the United States (or, if certain tax treaties apply, is attributable to a permanent establishment maintained by the non-United States holder within the United States); or - the non-United States holder is an individual who is present in the United States for 183 days or more in the taxable year of the disposition and certain other conditions are met. In general, backup withholding and information reporting will not apply to a payment of interest on a trust preferred security to a non-United States holder, or to proceeds from the disposition of a trust 46 preferred security by a non-United States holder, in each case, if the holder certifies under penalties of perjury that it is a non-United States holder and neither Citigroup Global Markets Holdings nor its paying agent has actual knowledge or reason to know to the contrary. Any amounts withheld under the backup withholding rules will be refunded or credited against the non-United States holder's United States federal income tax liability provided the required information is timely furnished to the IRS. In certain circumstances, the amount of payments made on a trust preferred security, the name and address of the beneficial owner and the amount, if any, of tax withheld may be reported to the IRS. THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS IN DETERMINING THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE TRUST PREFERRED SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL OR OTHER TAX LAWS. 47 ERISA CONSIDERATIONS The following discussion may be relevant to employee benefit plans subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), individual retirement accounts, Keogh plans and other similar plans subject to section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"), entities the assets of which may be deemed "plan assets" under ERISA regulations, and governmental plans subject to any substantially similar federal, state or local laws (collectively, "Pension Type Accounts"). A fiduciary of a Pension Type Account should consider the fiduciary standards of applicable law in the context of the Pension Type Account's particular circumstances before authorizing an investment in the trust preferred securities of CGMH Capital [II]. Among other factors, the fiduciary should consider whether such an investment is in accordance with the documents governing the Pension Type Account and whether the investment is appropriate for such Pension Type Account in view of its overall investment policy and diversification of its portfolio. Certain provisions of applicable law prohibit Pension Type Accounts from engaging in certain transactions involving "plan assets" with parties that are "parties in interest" under ERISA or "disqualified persons" under the Code with respect to such Pension Type Account. The U.S. Department of Labor has issued a regulation, 29 CFR Section 2510.3-101, with regard to whether the underlying assets of an entity in which employee benefit plans acquire equity interests are deemed to be plan assets. Under such regulation, for purposes of ERISA and section 4975 of the Code, the assets of CGMH Capital [II] would be deemed to be "plan assets" of a Pension Type Account whose assets were used to purchase trust preferred securities of CGMH Capital [II] if the trust preferred securities of CGMH Capital [II] were considered to be equity interests in CGMH Capital [II] and no exception to plan asset status were applicable under such regulation. The regulation defines an "equity interest" as any interest in an entity other than an instrument that is treated as indebtedness under applicable local law and which has no substantial equity features. Although it is not free from doubt, trust preferred securities of CGMH Capital [II] should be treated as "equity interests" for purposes of such regulation. One exception to plan asset status under the regulation applies to a class of "equity" interests that are (i) widely held (i.e., held by 100 or more investors who are independent of the issuer and each other), (ii) freely transferable, and (iii) either (a) part of a class of securities registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended, or (b) sold as part of an offering of securities to the public pursuant to an effective registration statement under the Securities Act of 1933 and such class is registered under the Exchange Act within 120 days after the end of the fiscal year of the issuer during which the offering of such securities to the public occurred. Although no assurances can be given, CGMH Capital [II] should qualify for this exception, so that the assets of CGMH Capital [II] should not be "plan assets" of any Pension Type Account investing in such securities, and the underlying assets of CGMH Capital [II] should not be treated as "plan assets" of Pension Type Account investors for purposes of determining whether any prohibited transaction has occurred. If the assets of CGMH Capital [II] were deemed to be plan assets of Pension Type Accounts that are holders of the trust preferred securities of CGMH Capital [II], an investment by a Pension Type Account in the trust preferred securities of CGMH Capital [II] might be deemed to constitute a delegation under applicable law of the duty to manage plan assets by a fiduciary investing in trust preferred securities of CGMH Capital [II]. Also, Citigroup Global Markets Holdings might be considered a "party in interest" or "disqualified person" relating to Pension Type Accounts whose assets were used to purchase trust preferred securities of CGMH Capital [II]. If this were the case, an investment in trust preferred securities of CGMH Capital [II] by a Pension Type Account might constitute, or in the course of the operation of CGMH Capital [II] give rise to, one or more prohibited transactions under ERISA, the Code or applicable law. In particular, it is likely that under such circumstances a prohibited extension of credit to Citigroup Global Markets Holdings would be considered to occur. In addition, Citigroup Global Markets Holdings might be considered a "party in interest" or "disqualified person" for certain Pension Type Accounts for reasons unrelated to the operation of CGMH Capital [II], e.g., because of the provision of services by Citigroup Global Markets Holdings or its 48 affiliates to the Pension Type Account. A purchase of trust preferred securities of CGMH Capital [II] by any such Pension Type Account would be likely to result in a prohibited extension of credit to Citigroup Global Markets Holdings, without regard to whether the assets of CGMH Capital [II] constituted plan assets. Accordingly, the trust preferred securities of CGMH Capital [II] may be not purchased, held or disposed of by any Pension Type Account, unless one of the following categories of exemptive relief is available under: - Prohibited Transaction Class Exemption ("PTCE") 96-23 for transactions determined by in-house asset managers, - PTCE 95-60 for transactions involving insurance company general accounts, - PTCE 91-38 for transactions involving bank collective investment funds, - PTCE 90-1 for transactions involving insurance company separate accounts, or - PTCE 84-14 for transactions determined by independent qualified professional asset managers. Any purchaser of the trust preferred securities of CGMH Capital [II] or any interest therein will be deemed to have represented and warranted to CGMH Capital [II] on each day from and including the date of its purchase of the trust preferred securities through and including the date of disposition of such trust preferred securities that either: - it is not a Pension Type Account and is not purchasing such securities or interest therein on behalf of, or with "plan assets" of, any Pension Type Account; or - its purchase, holding and disposition of the trust preferred securities of CGMH Capital [II] or any interest therein is not and will not be prohibited by reason of the satisfaction of one or more of the following exemptions: PTCE 96-23, 95-60, 91-38, 90-1 or 84-14. Due to the complexity of these rules and the penalties imposed upon persons involved in prohibited transactions, it is important that any person considering the purchase of trust preferred securities of CGMH Capital [II] with plan assets consult with its counsel regarding the consequences under ERISA, the Code or other similar law of the acquisition and ownership of trust preferred securities of CGMH Capital [II] and the availability of exemptive relief under the class exemptions listed above. 49 UNDERWRITING Subject to the terms and conditions stated in the underwriting agreement dated the date of this prospectus, each underwriter named below has agreed to purchase from CGMH Capital [II], and CGMH Capital [II] has agreed to sell to that underwriter, the number of trust preferred securities set forth opposite the underwriter's name.
NUMBER OF TRUST PREFERRED UNDERWRITER SECURITIES - ----------- --------------- Citigroup Global Markets Inc. .............................. $ [Co-manager(s)]............................................. -------- Total..................................................... $ ========
The underwriting agreement provides that the obligations of the underwriters to purchase the trust preferred securities included in this offering are subject to approval of legal matters by counsel and to other conditions. The underwriters are obligated to purchase all the trust preferred securities if they purchase any of the trust preferred securities. CGMH Capital [II] and Citigroup Global Markets Holdings have agreed, during the period beginning on the date of the underwriting agreement and continuing to and including the date that is days after the closing date for the purchase of the trust preferred securities, not to offer, sell, contract to sell or otherwise dispose of any other preferred securities, any preferred stock or any other securities, including any backup undertakings of such preferred stock or other securities, of Citigroup Global Markets Holdings or of CGMH Capital [II], in each case that are substantially similar to the trust preferred securities, or any securities convertible into or exchangeable for the trust preferred securities or such substantially similar securities of either CGMH Capital [II] or Citigroup Global Markets Holdings, except securities in the offering or with the prior written consent of . The following table summarizes the commissions to be paid by Citigroup Global Markets Holdings to the underwriters:
PER TRUST PREFERRED SECURITY TOTAL --------------- ----- Public offering price....................................... $ $ Underwriting commissions to be paid by Citigroup Global Markets Holdings.......................................... (1) (1) Proceeds to CGMH Capital [II]............................... $ $
- --------------- (1) Underwriting commissions of $ per trust preferred security, or $ for all trust preferred securities, will be paid by Citigroup Global Markets Holdings, except that for sales of 10,000 or more trust preferred securities to a single purchaser, the commissions will be $ per trust preferred security. The underwriters propose to offer some of the trust preferred securities directly to the public at this public offering price set forth on the cover page of this prospectus and some of the trust preferred securities to dealers at the public offering price less a concession not to exceed $ per trust preferred security, provided that such concession for sales of 10,000 or more trust preferred securities to a single purchaser will not be in excess of $ per trust preferred security. The underwriters may allow, and dealers may reallow a concession not to exceed $ per trust preferred security on sales to other dealers. After the initial offering of the trust preferred securities to the public, the offering price and other selling terms may from time to time be varied by the representatives of the underwriters. Application will be made to list the trust preferred securities on the NYSE. If approved for listing, Citigroup Global Markets Holdings expects the trust preferred securities will begin trading on the NYSE within 30 days after they are first issued. 50 In connection with this offering, Citigroup Global Markets Inc., on behalf of the underwriters, may purchase and sell trust preferred securities in the open market. These transactions may include over-allotment, syndicate covering transactions and stabilizing transactions. Over-allotment involves syndicate sales of trust preferred securities in excess of the liquidation amount of trust preferred securities to be purchased by the underwriters in the offering, which creates a syndicate short position. Syndicate covering transactions involve purchases of the trust preferred securities in the open market after the distribution has been completed in order to cover syndicate short positions. Stabilizing transactions consist of certain bids or purchases of trust preferred securities made for the purpose of preventing or retarding a decline in the market price of the trust preferred securities while the offering is in progress. The underwriters also may impose a penalty bid. Penalty bids permit the underwriters to reclaim a selling concession from a syndicate member when Citigroup Global Markets Inc., in covering syndicate short positions or making stabilizing purchases, repurchases trust preferred securities originally sold by that syndicate member. Any of these activities may have the effect of preventing or retarding a decline in the market price of the trust preferred securities. They may also cause the price of the trust preferred securities to be higher than the price that otherwise would exist in the open market in the absence of the transactions. The underwriters may conduct these transactions in the over-the-counter market or otherwise. If the underwriters commence any of these transactions, they may discontinue them at any time. Citigroup Global Markets Holdings estimates that its total expenses for this offering, excluding underwriting commissions, will be $ . The underwriters have performed investment banking and advisory services for Citigroup Global Markets Holdings from time to time for which they have received customary fees and expenses. The underwriters may, from time to time, engage in transactions with and perform services for Citigroup Global Markets Holdings in the ordinary course of their business. If any broker-dealer subsidiary or affiliate makes an offering of the trust preferred securities, such offering will be conducted pursuant to the applicable sections of Rule 2810 of the Conduct Rules of the NASD. The underwriters may not confirm sales to any discretionary account without the prior specific written approval of a customer. This prospectus may also be used by any broker-dealer subsidiary or affiliate of Citigroup Global Markets Holdings in connection with offers and sales of the trust preferred securities in market-making transactions at negotiated prices related to prevailing market prices at the time of sale. Any of Citigroup Global Markets Holdings' broker-dealer subsidiaries or affiliates may act as principal or agent in such transactions. None of Citigroup Global Markets Holdings' broker-dealer subsidiaries or affiliates have any obligation to make a market in any of the trust preferred securities and may discontinue any market-making activities at any time without notice, at their sole discretion. A prospectus in electronic format may be made available on the websites maintained by one or more of the underwriters. The underwriters may agree to allocate a number of trust preferred securities to underwriters for sale to their online brokerage account holders. The underwriters will allocate trust preferred securities to underwriters that may make Internet distributions on the same basis as other allocations. In addition, trust preferred securities may be sold by the underwriters to securities dealers who resell trust preferred securities to online brokerage account holders. Citigroup Global Markets Holdings has agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act of 1933, or to contribute to payments the underwriters may be required to make because of any of those liabilities. 51 LEGAL MATTERS Edward F. Greene, Esq., General Counsel of Citigroup Global Markets Holdings, 388 Greenwich Street, New York, New York 10013, will act as legal counsel to Citigroup Global Markets Holdings. Cleary, Gottlieb, Steen & Hamilton, New York, New York, will act as legal counsel to the underwriters. Mr. Greene beneficially owns, or has rights to acquire under employee benefit plans, an aggregate of less than one percent of the common stock of Citigroup Inc. Cleary, Gottlieb, Steen & Hamilton has from time to time acted as counsel for Citigroup Global Markets Holdings and its subsidiaries and affiliates and may do so in the future. EXPERTS The consolidated financial statements of Citigroup Global Markets Holdings Inc. as of and for the years ended December 31, 2003 and 2002 have been audited by KPMG LLP, Independent Registered Public Accounting Firm, as set forth in their report dated February 26, 2004 on the consolidated financial statements. The consolidated financial statements are included in Citigroup Global Markets Holdings' annual report on Form 10-K for the year ended December 31, 2003, 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 refers to changes, in 2003, in Citigroup Global Markets Holdings' methods of accounting for variable interest entities and stock-based compensation, in 2002, in Citigroup Global Markets Holdings' methods of accounting for goodwill and intangible assets, and, in 2001, in Citigroup Global Markets Holdings' methods of accounting for derivative instruments and hedging activities. The consolidated financial statements of Citigroup Global Markets Holdings 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. To the extent that KPMG LLP audits and reports on consolidated financial statements of Citigroup Global Markets Holdings issued at future dates, and consents to the use of their report thereon, such consolidated financial statements also will be incorporated by reference in the registration statement in reliance upon their report and said authority. 52 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- CGMH CAPITAL [II] % TRUST PREFERRED SECURITIES $ LIQUIDATION AMOUNT GUARANTEED TO THE EXTENT SET FORTH HEREIN BY CITIGROUP GLOBAL MARKETS HOLDINGS INC. CITIGROUP ------------------------ PROSPECTUS , 2004 ------------------------ - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 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 the registrants in connection with the Securities being registered hereby. All of the fees set forth below are estimates except for the Commission registration fee and the NASD fee. Commission Registration Fee................................. $1,267,000 Accounting Fees............................................. 250,000 Trustees' Fees and Expenses................................. 315,000 Printing and Engraving Fees................................. 1,000,000 Rating Agency Fees.......................................... 2,000,000 NASD Fee.................................................... 30,500 Legal Fees and Expenses..................................... 500,000 Miscellaneous............................................... 1,500 ---------- Total............................................. $5,364,000 ==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. CITIGROUP GLOBAL MARKETS HOLDINGS Section 721 of the New York Business Corporation Law, or the BCL, provides that, in addition to the indemnification provided in Article 7 of the BCL, a corporation may indemnify a director or officer by a provision contained in its certificate of incorporation or by-laws or by a duly authorized resolution of its shareholders or directors or by agreement provided that no indemnification may be made to or on behalf of any director or officer if a judgment or other final adjudication adverse to the director or officer establishes that his acts were committed in bad faith or were the result of active and deliberate dishonesty and material to the cause of action, or that such director or officer personally gained in fact a financial profit or other advantage to which he was not legally entitled. Section 722(a) of the BCL provides that a corporation may indemnify a director or officer made, or threatened to be made, a party to any action other than a derivative action, whether civil or criminal, against judgments, fines, amounts paid in settlement and reasonable expenses actually and necessarily incurred as a result of such action, if such director or officer acted, in good faith, for a purpose which he reasonably believed to be in, or not opposed to, the best interests of the corporation and, in criminal actions or proceedings, in addition, has no reasonable cause to believe that his conduct was unlawful. Section 722(c) of the BCL provides that a corporation may indemnify a director or officer, made or threatened to be made a party in a derivative action, against amounts paid in settlement and reasonable expenses actually and necessarily incurred by him in connection with the defense or settlement of such action or in connection with an appeal therein if such director or officer acted, in good faith, for a purpose which he reasonably believed to be in, or not opposed to, the best interests of the corporation, except that no indemnification will be available under Section 722(c) of the BCL in respect of a threatened or pending action which is settled or otherwise disposed of or any claims as to which such director or officer shall have been adjudged liable to the corporation, unless and only to the extent that the court in which the action was brought, or, if no action was brought, any court of competent jurisdiction, determines, upon application, that, in view of all the circumstances of the case, the director or officer is fairly and reasonably entitled to indemnity for such portion of the settlement amount and expenses as the court deems proper. Section 723 of the BCL specifies the manner in which payment of indemnification under Section 722 of the BCL or indemnification permitted under Section 721 of the BCL may be authorized by the corporation. It provides that indemnification may be authorized by the corporation. It provides that indemnification by a corporation is mandatory in any case in which the director or officer has been II-1 successful, whether on the merits or otherwise, in defending an action. In the event that the director or officer has not been successful or the action is settled, indemnification must be authorized by the appropriate corporate action as set forth in Section 723. Section 724 of the BCL provides that, upon application by a director or officer, indemnification may be awarded by a court to the extent authorized under Sections 722 and 723. Section 725 of the BCL contains certain other miscellaneous provisions affecting the indemnification of directors and officers. Section 726 of the BCL authorizes the purchase and maintenance of insurance to indemnify (1) a corporation for any obligation which it incurs as a result of the indemnification of directors and officers under the above sections, (2) directors and officers in instances in which they may be indemnified by a corporation under such sections, and (3) directors and officers in instances in which they may not otherwise be indemnified by a corporation under such sections, provided the contract of insurance covering such directors and officers provides, in a manner acceptable to the New York State Superintendent of Insurance, for a retention amount and for co-insurance. Article Seventh(e) of the Restated Certificate of Incorporation of Citigroup Global Markets Holdings provides in part as follows: The Corporation shall indemnify to the full extent authorized by law any person made or threatened to be made a party to an action or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that he, his testator or intestate is or was a director, officer or employee of the Corporation or any predecessor of the Corporation or serves or served any other enterprise as a director, officer or employee at the request of the Corporation or any predecessor of the Corporation, provided that this provision shall not provide for indemnification to be made to or on behalf of any director or officer if a judgment or other final adjudication adverse to the director or officer establishes that his acts were committed in bad faith or were the result of active and deliberate dishonesty and were material to the cause of action so adjudicated, or that he personally gained in fact a financial profit or other advantage to which he was not legally entitled. Article Ninth of the Restated Certificate of Incorporation of Citigroup Global Markets Holdings provides as follows: To the fullest extent permitted under section 402 of the BCL, no director of the corporation shall be personally liable to the corporation or its shareholders for damages for any breach of duty in such capacity, provided that this provision shall not limit (a) the liability of any director if a judgment or other final adjudication adverse to him establishes that his acts or omissions were in bad faith or involved intentional misconduct or a knowing violation of law or that he or she personally gained in fact a financial profit or other advantage to which he or she was not legally entitled or that his acts violated section 719 of the BCL or (b) the liability of any director for any act or omission prior to adoption of a provision authorized by this paragraph. Article Twelve of the By-laws of Citigroup Global Markets Holdings provides as follows: The Corporation shall indemnify to the full extent authorized by law any person made or threatened to be made a party to an action or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that he, his testator or intestate is or was a director, officer or employee of the Corporation or any predecessor of the Corporation or serves or served any other enterprise as a director, officer or employee at the request of the Corporation or any predecessor of the Corporation, provided that this provision shall not provide for indemnification to be made to or on behalf of any director or officer if a judgment or other final adjudication adverse to the director or officer establishes that his acts were committed in bad faith or were the result of active and deliberate dishonesty and were material to the cause of action so II-2 adjudicated, or that he personally gained in fact a financial profit or other advantage to which he was not legally entitled. Citigroup Global Markets Holdings has purchased certain liability insurance for its officers and directors as permitted by Section 726 of the BCL and has entered into indemnity agreements with its directors and certain officers providing indemnification in addition to that provided under the BCL, as permitted by Section 721 of the BCL CGMH CAPITAL TRUSTS The Amended and Restated Declaration of Trust of each of CGMH Capital II, CGMH Capital III and CGMH Capital IV provides that no Institutional Trustee (as defined in each Declaration) or any of its affiliates, Delaware Trustee (as defined in each declaration) or any of its affiliates, or officer, director, shareholder, member, partner, employee, representative, custodian, nominee or agent of the Institutional Trustee or the Delaware Trustee (each a "Fiduciary Indemnified Person"), and no Regular Trustee (as defined in each declaration), affiliate of any Regular Trustee, or any officer, director, shareholder, member, partner, employee, representative or agent of any Regular Trustee, or any employee or agent of such CGMH Capital trust or its affiliates (each a "Company Indemnified Person") shall be liable, responsible or accountable in damages or otherwise to such CGMH Capital trust, any Affiliate (as defined in each Declaration) of such CGMH Capital trust or any holder of securities issued by such CGMH Capital trust, or to any officer, director, shareholder, partner, member, representative, employee or agent of such CGMH Capital trust or its Affiliates for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Fiduciary Indemnified Person or Company Indemnified Person in good faith on behalf of such CGMH Capital trust and in a manner such Fiduciary Indemnified Person or Company Indemnified Person reasonably believed to be within the scope of the authority conferred on such Fiduciary Indemnified Person or Company Indemnified Person by such Declaration or by law, except that a Fiduciary Indemnified Person or Company Indemnified Person shall be liable for any loss, damage, or claim incurred by reason of such Fiduciary Indemnified Person's or Company Indemnified Person's gross negligence (or in the case of a Fiduciary Indemnified Person, negligence) or willful misconduct with respect to such acts or omissions. The Declaration of each CGMH Capital trust also provides that, to the full extent permitted by law, Citigroup Global Markets Holdings shall indemnify any Company Indemnified 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 right of such CGMH Capital trust) by reason of the fact that he or she is or was a Company Indemnified Person 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 or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the CGMH Capital trust, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The Declaration of each CGMH Capital trust also provides that to the full extent permitted by law, Citigroup Global Markets Holdings shall indemnify any Company Indemnified 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 right of such CGMH Capital trust to procure a judgment in its favor by reason of the fact that he or she is or was a Company Indemnified Person 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 or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of such CGMH Capital trust and except that no indemnification shall be made in respect of any claim, issue or matter as to which such Company Indemnified Person shall have been adjudged to be liable to such CGMH Capital trust unless and only to the extent that the Court of Chancery of Delaware 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 II-3 reasonably entitled to indemnity for such expenses which such Court of Chancery or such other court shall deem proper. The Declaration of each CGMH Capital trust further provides that expenses (including attorneys' fees) incurred by a Company Indemnified Person in defending a civil, criminal, administrative or investigative action, suit or proceeding referred to in the immediately preceding two paragraphs shall be paid by Citigroup Global Markets Holdings in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such Company Indemnified Person to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by Citigroup Global Markets Holdings as authorized in the Declaration. The directors and officers of Citigroup Global Markets Holdings and the Regular Trustees are covered by insurance policies indemnifying them against certain liabilities, including certain liabilities arising under the Securities Act of 1933, which might be incurred by them in such capacities and against which they cannot be indemnified by Citigroup Global Markets Holdings or the CGMH Capital trusts. For the undertaking with respect to indemnification, see Item 17 herein. See the forms of Underwriting Agreement, Global Selling Agency Agreement and Continuous Underwriting Agreement filed as Exhibit 1(a), (b), (c), (d) and (e) for certain indemnification provisions. ITEM 16. EXHIBITS.
EXHIBIT NUMBER DESCRIPTION - ------- ----------- 1(a) -- Proposed Form of Underwriting Agreement for Debt Securities to be distributed in the United States (incorporated by reference to Exhibit 1(a) to Registration Statement No. 333-38931). A form of Underwriting Agreement relating to any other offering of Securities (and not filed as an Exhibit hereto) will be filed as an Exhibit to a Current Report on Form 8-K and incorporated herein by reference. 1(b) -- Form of Global Selling Agency Agreement relating to the Medium-Term Notes, Series D and Series E.* 1(c) -- Form of Global Selling Agency Agreement relating to the Retail Medium-Term Notes, Series F.* 1(d) -- Form of Underwriting Agreement for Index Warrants (incorporated by reference to Exhibit 1.01 of Citigroup Global Markets Holdings Inc.'s Current Report on Form 8-K dated October 13, 1999). 1(e) -- Form of Underwriting Agreement for Trust Preferred Securities (incorporated by reference to Exhibit 1.01 of SSBH Capital I's Current Report on Form 8-K dated January 27, 1998). 4(a) -- Restated Certificate of Incorporation of Citigroup Global Markets Holdings Inc., (incorporated by reference to Exhibit 99.1 of Citigroup Global Markets Holdings Inc.'s Current Report on Form 8-K dated April 7, 2003). 4(b) -- By-Laws of Citigroup Global Markets Holdings (incorporated by reference to Exhibit 4(b) to Registration Statement No. 333-106272). 4(c) -- Senior Debt Indenture, dated as of December 1, 1988, between Salomon Inc and Citibank, N.A., as Trustee (incorporated by reference to Exhibit 8 to Citigroup Global Markets Holdings Inc.'s Current Report on Form 8-K dated December 29, 1988). 4(d) -- First Supplemental Indenture, dated as of September 7, 1990, to Senior Debt Indenture dated as of December 1, 1988 between Salomon Inc and Citibank, N.A. (incorporated by reference to Exhibit 4(b) to Registration Statement No. 33-39502).] 4(e) -- Second Supplemental Indenture, dated June 12, 1991 between Salomon Inc and Citibank, N.A. (incorporated by reference to Exhibit 4(c) to Registration Statement No. 33-41209). 4(f) -- Third Supplemental Indenture, dated as of July 1, 1992 between Salomon Inc and Citibank, N.A. (incorporated by reference to Exhibit 4(d) to Registration Statement No. 33-49136).
II-4
EXHIBIT NUMBER DESCRIPTION - ------- ----------- 4(g) -- Fourth Supplemental Indenture, dated as of October 29, 1992, between Salomon Inc and Citibank, N.A. (incorporated by reference to Exhibit 4(e) to Registration Statement No. 33-57922). 4(h) -- Fifth Supplemental Indenture, dated as of December 14, 1993, between Salomon Inc and Citibank, N.A. (incorporated by reference to Exhibit 4(f) to Registration Statement No. 33-51269). 4(i) -- Sixth Supplemental Indenture, dated as of December 29, 1994, between Salomon Inc and Citibank, N.A. (incorporated by reference to Exhibit 4(j) to Registration Statement No. 333-01807). 4(j) -- Seventh Supplemental Indenture, dated as of February 1, 1996, between Salomon Inc and Citibank, N.A. (incorporated by reference to Exhibit 4(k) to Registration Statement No. 333-01807). 4(k) -- Eighth Supplemental Indenture, dated as of May 8, 1996, between Salomon Inc and Citibank, N.A. (incorporated by reference to Exhibit 4 to Citigroup Global Markets Holdings Inc.'s Current Report on Form 8-K dated April 29, 1996). 4(l) -- Ninth Supplemental Indenture, dated as of November 20, 1996, between Salomon Inc and Citibank, N.A. (incorporated by reference to Exhibit 4 to Citigroup Global Markets Holdings Inc.'s Current Report on Form 8-K dated November 20, 1996). 4(m) -- Tenth Supplemental Indenture, dated as of November 28, 1997, between Salomon Smith Barney Holdings Inc. and Citibank, N.A. (incorporated by reference to Exhibit 4(l) to Registration Statement 333-38931). 4(n) -- Eleventh Supplemental Indenture, dated as of July 1, 1999 between Salomon Smith Barney Holdings Inc. and The First National Bank of Chicago, as Successor Trustee (incorporated by reference to Exhibit 4(tt) to Post-Effective Amendment No. 1 to Registration Statement No. 333-38931). 4(o) -- Subordinated Debt Indenture, dated as of December 1, 1988, between Salomon Inc and Bankers Trust Company, as Trustee (incorporated by reference to Exhibit 7 to Citigroup Global Markets Holdings Inc.'s Current Report on Form 8-K dated August 2, 1989). 4(p) -- First Supplemental Indenture, dated as of September 7, 1990, between Salomon Inc and Bankers Trust Company (incorporated by reference to Exhibit 4(b) to Registration Statement No. 33-39502). 4(q) -- Second Supplemental Indenture, dated as of December 14, 1993, between Salomon Inc and Bankers Trust Company (incorporated by reference to Exhibit 4(n) to Registration Statement No. 333-01807). 4(r) -- Third Supplemental Indenture, dated as of July 3, 1996, between Salomon Inc and Bankers Trust Company (incorporated by reference to Exhibit 99.01 to Citigroup Global Markets Holdings Inc.'s Current Report on Form 8-K dated December 9, 1997). 4(s) -- Fourth Supplemental Indenture, dated as of November 28, 1997, between Salomon Smith Barney Holdings Inc. and Bankers Trust Company (incorporated by reference to Exhibit 99.02 to Citigroup Global Markets Holdings Inc.'s Current Report on Form 8-K dated December 9, 1997). 4(t) -- Fifth Supplemental Indenture, dated as of July 1, 1999, between Salomon Smith Barney Holdings Inc. and Bankers Trust Company (incorporated by reference to Exhibit 4(uu) to Post-Effective Amendment No. 1 to Registration Statement No. 333-38931). 4(u) -- Sixth Supplemental Indenture dated as of July 10, 2003 between Citigroup Global Markets Holdings Inc. and Deutsche Bank Trust Company Americas.* 4(v) -- Form of Seventh Supplemental Indenture between Citigroup Global Markets Holdings Inc. and Deutsche Bank Trust Company Americas.* 4(w) -- Senior Debt Indenture, dated as of October 27, 1993, between Salomon Inc and The Bank of New York, as Trustee (incorporated by reference to Exhibit 3 to Citigroup Global Markets Holdings Inc.'s Current Report on Form 8-K dated October 27, 1993).
II-5
EXHIBIT NUMBER DESCRIPTION - ------- ----------- 4(x) -- First Supplemental Indenture, dated as of November 28, 1997, between Salomon Smith Barney Holdings Inc. and The Bank of New York (incorporated by reference to Exhibit 99.04 to Citigroup Global Markets Holdings Inc.'s Current Report on Form 8-K dated December 9, 1997). 4(y) -- Second Supplemental Indenture, dated as of July 1, 1999, between Salomon Smith Barney Holdings Inc. and the Bank of New York (incorporated by reference to Exhibit 4(vv) to Post-Effective Amendment No. 1 to Registration Statement No. 333-38931). 4(z) -- Senior Debt Indenture, dated as of January 18, 1994, between Salomon Inc and The Chase Manhattan Bank, as Trustee (incorporated by reference to Exhibit 4 to Citigroup Global Markets Holdings Inc.'s Current Report on Form 8-K dated January 18, 1994). 4(aa) -- First Supplemental Indenture, dated as of November 28, 1997, between Salomon Smith Barney Holdings Inc. and The Chase Manhattan Bank (incorporated by reference to Exhibit 99.05 to Citigroup Global Markets Holdings Inc.'s Current Report on Form 8-K dated December 9, 1997). 4(bb) -- Second Supplemental Indenture, dated as of July 1, 1999, between Salomon Smith Barney Holdings Inc. and The Chase Manhattan Bank (incorporated by reference to Exhibit 4(ww) to Post-Effective Amendment No. 1 to Registration Statement No. 333-38931). 4(cc) -- Forms of Medium-Term Registered Notes, Series D and Series E.* 4(dd) -- Forms of Medium-Term Bearer Notes, Series D and Series E.* 4(ee) -- Forms of Medium-Term Temporary Global Notes, Series D and Series E.* 4(ff) -- Forms of Medium-Term Permanent Global Notes, Series D and Series E.* 4(gg) -- Form of Retail Medium-Term Global Notes, Series F.* 4(hh) -- Form of Index Warrant Agreement for Index Warrants, with form of Index Warrant Certificate attached as an exhibit thereto, for Index Warrants in registered form (incorporated by reference to Exhibit 4.01 of Citigroup Global Markets Holdings Inc.'s Current Report on Form 8-K dated October 13, 1999). 4(ii) -- Certificate of Trust of CGMH Capital II, as amended (incorporated by reference to Exhibit 4(gg) to Registration Statement No. 333-106272). 4(jj) -- Certificate of Trust of CGMH Capital III, as amended (incorporated by reference to Exhibit 4(hh) to Registration Statement No. 333-106272). 4(kk) -- Certificate of Trust of CGMH Capital IV, as amended (incorporated by reference to Exhibit 4(ii) to Registration Statement No. 333-106272). 4(ll) -- Form of Amended and Restated Declaration of Trust for CGMH Capital II (incorporated by reference to Exhibit 4(jj) to Registration Statement No. 333-106272). 4(mm) -- Form of Amended and Restated Declaration of Trust for CGMH Capital III (incorporated by reference to Exhibit 4(kk) to Registration Statement No. 333-106272). 4(nn) -- Form of Amended and Restated Declaration of Trust for CGMH Capital IV (incorporated by reference to Exhibit 4(ll) to Registration Statement No. 333-106272). 4(oo) -- Form of Junior Subordinated Debt Indenture between Citigroup Global Markets Holdings Inc. and JPMorgan Chase Bank, as Trustee.* 4(pp) -- Form of Trust Preferred Security (included in Exhibit 4(jj)). 4(qq) -- Form of Trust Common Security (included in Exhibit 4(jj)). 4(rr) -- Form of Guarantee with respect to the Trust Preferred Securities of CGMH Capital II (incorporated by reference to Exhibit 4(gg) to Registration Statement 333-38931). 4(ss) -- Form of Guarantee with respect to the Trust Preferred Securities of CGMH Capital III (incorporated by reference to Exhibit 4(hh) to Registration Statement 333-38931). 4(tt) -- Form of Guarantee with respect to the Trust Preferred Securities of CGMH Capital IV (incorporated by reference to Exhibit 4(ii) to Registration Statement 333-38931). 4(uu) -- Form of Junior Subordinated Debt Securities (included in Exhibit 4(oo)).*
II-6
EXHIBIT NUMBER DESCRIPTION - ------- ----------- 5(a) -- Opinion of Edward F. Greene, Esq.* 8(a) -- Tax opinion of Cleary, Gottlieb, Steen & Hamilton with respect to the Trust Preferred Securities.* 12(a) -- Computation of Ratio of Losses to Fixed Charges of Citigroup Global Markets Holdings Inc. (incorporated by reference to Exhibit 12.01 to Citigroup Global Markets Holdings Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 2004). 23(a) -- Consent of KPMG LLP, Independent Registered Accounting Firm.* 23(b) -- Consent of Edward F. Greene, Esq. (included in Exhibit 5(a)).* 23(c) -- Consent of Cleary, Gottlieb, Steen & Hamilton (included in Exhibit 8(a)).* 25(a) -- Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939, as amended, of The Bank of New York under the Senior Debt Indenture.* 25(b) -- Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939, as amended, of JPMorgan Chase Bank under the Senior Debt Indenture.* 25(c) -- Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939, as amended, of Deutsche Bank Trust Company Americas under the Subordinated Debt Indenture.* 25(d) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of JPMorgan Chase Bank, under the Junior Subordinated Debt Indenture.* 25(e) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The JPMorgan Chase Bank, as Trustee under the Declaration of Trust of CGMH Capital II.* 25(f) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The JPMorgan Chase Bank, as Trustee under the Declaration of Trust of CGMH Capital III.* 25(g) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The JPMorgan Chase Bank, as Trustee under the Declaration of Trust of CGMH Capital IV.* 25(h) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The JPMorgan Chase Bank, as Guarantee Trustee under the Trust Preferred Securities Guarantee of Citigroup Global Markets Holdings Inc. for the benefit of holders of Trust Preferred Securities of CGMH Capital II.* 25(i) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The JPMorgan Chase Bank, as Guarantee Trustee under the Trust Preferred Securities Guarantee of Citigroup Global Markets Holdings Inc. for the benefit of holders of Trust Preferred Securities of CGMH Capital III.* 25(j) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The JPMorgan Chase Bank, as Guarantee Trustee under the Trust Preferred Securities Guarantee of Citigroup Global Markets Holdings Inc. for the benefit of holders of Trust Preferred Securities of CGMH Capital IV.*
- --------------- * Filed herewith. ITEM 17. UNDERTAKINGS. The undersigned registrants hereby undertake: (A)(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 of 1933, as amended; (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 II-7 in this 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 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in this registration statement; provided, however, that the undertakings set forth in clauses (i) and (ii) above do not apply if the information required to be included in a post-effective amendment by those clauses is contained in periodic reports filed with or furnished to the Securities and Exchange Commission by Citigroup Global Markets Holdings Inc. pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended, that are incorporated by reference in this registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, as amended, 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. (B) That, for purposes of determining any liability under the Securities Act of 1933, as amended, each filing of Citigroup Global Markets Holdings Inc.'s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended, (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934, as amended) 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. (C) Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers and controlling persons of the registrants pursuant to the provisions described under Item 15 above, or otherwise, the registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrants of expenses incurred or paid by a director, officer or controlling person of the registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrants will, unless in the opinion of their counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. (D)(1) For purposes of determining any liability under the Securities Act of 1933, as amended, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrants pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933, as amended, shall be deemed to be part of this registration statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act of 1933, as amended, each post-effective amendment that contains a form of prospectus 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. II-8 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, Citigroup Global Markets Holdings Inc. certifies that it has reasonable grounds to believe that 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, this 8th day of October, 2004. CITIGROUP GLOBAL MARKETS HOLDINGS INC. By: /s/ JOHN C. MORRIS ------------------------------------ John C. Morris Chief Financial Officer Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement or Amendment thereto has been signed below by the following persons in the capacities indicated this 8th day of October, 2004.
SIGNATURES ---------- /s/ ROBERT DRUSKIN Chairman, President and Chief Executive Officer - --------------------------------------------------- (Principal Executive Officer) Robert Druskin /s/ JOHN C. MORRIS Director and Chief Financial Officer - --------------------------------------------------- (Principal Financial Officer) John C. Morris /s/ WILLIAM T. BOZARTH Principal Accounting Officer - --------------------------------------------------- William T. Bozarth
II-9 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, each of CGMH Capital II, CGMH Capital III and CGMH Capital IV certifies that it has reasonable grounds to believe that 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, this 8th day of October, 2004. CGMH CAPITAL II By: /s/ SCOTT FREIDENRICH ------------------------------------ Scott Freidenrich, as Trustee By: /s/ CLIFF VERRON ------------------------------------ Cliff Verron, as Trustee By: /s/ GEOFFREY S. RICHARDS ------------------------------------ Geoffrey S. Richards, as Trustee CGMH CAPITAL III By: /s/ SCOTT FREIDENRICH ------------------------------------ Scott Freidenrich, as Trustee By: /s/ CLIFF VERRON ------------------------------------ Cliff Verron, as Trustee By: /s/ GEOFFREY S. RICHARDS ------------------------------------ Geoffrey S. Richards, as Trustee CGMH CAPITAL IV By: /s/ SCOTT FREIDENRICH ------------------------------------ Scott Freidenrich, as Trustee By: /s/ CLIFF VERRON ------------------------------------ Cliff Verron, as Trustee By: /s/ GEOFFREY S. RICHARDS ------------------------------------ Geoffrey S. Richards, as Trustee II-10 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION - ------- ----------- 1(a) -- Proposed Form of Underwriting Agreement for Debt Securities to be distributed in the United States (incorporated by reference to Exhibit 1(a) to Registration Statement No. 333-38931). A form of Underwriting Agreement relating to any other offering of Securities (and not filed as an Exhibit hereto) will be filed as an Exhibit to a Current Report on Form 8-K and incorporated herein by reference. 1(b) -- Form of Global Selling Agency Agreement relating to the Medium-Term Notes, Series D and Series E.* 1(c) -- Form of Global Selling Agency Agreement relating to the Retail Medium-Term Notes, Series F.* 1(d) -- Form of Underwriting Agreement for Index Warrants (incorporated by reference to Exhibit 1.01 of Citigroup Global Markets Holdings Inc.'s Current Report on Form 8-K dated October 13, 1999). 1(e) -- Form of Underwriting Agreement for Trust Preferred Securities (incorporated by reference to Exhibit 1.01 of SSBH Capital I's Current Report on Form 8-K dated January 27, 1998). 4(a) -- Restated Certificate of Incorporation of Citigroup Global Markets Holdings Inc., (incorporated by reference to Exhibit 99.1 of Citigroup Global Markets Holdings Inc.'s Current Report on Form 8-K dated April 7, 2003). 4(b) -- By-Laws of Citigroup Global Markets Holdings (incorporated by reference to Exhibit 4(b) to Registration Statement No. 333-106272). 4(c) -- Senior Debt Indenture, dated as of December 1, 1988, between Salomon Inc and Citibank, N.A., as Trustee (incorporated by reference to Exhibit 8 to Citigroup Global Markets Holdings Inc.'s Current Report on Form 8-K dated December 29, 1988). 4(d) -- First Supplemental Indenture, dated as of September 7, 1990, to Senior Debt Indenture dated as of December 1, 1988 between Salomon Inc and Citibank, N.A. (incorporated by reference to Exhibit 4(b) to Registration Statement No. 33-39502).] 4(e) -- Second Supplemental Indenture, dated June 12, 1991 between Salomon Inc and Citibank, N.A. (incorporated by reference to Exhibit 4(c) to Registration Statement No. 33-41209). 4(f) -- Third Supplemental Indenture, dated as of July 1, 1992 between Salomon Inc and Citibank, N.A. (incorporated by reference to Exhibit 4(d) to Registration Statement No. 33-49136). 4(g) -- Fourth Supplemental Indenture, dated as of October 29, 1992, between Salomon Inc and Citibank, N.A. (incorporated by reference to Exhibit 4(e) to Registration Statement No. 33-57922). 4(h) -- Fifth Supplemental Indenture, dated as of December 14, 1993, between Salomon Inc and Citibank, N.A. (incorporated by reference to Exhibit 4(f) to Registration Statement No. 33-51269). 4(i) -- Sixth Supplemental Indenture, dated as of December 29, 1994, between Salomon Inc and Citibank, N.A. (incorporated by reference to Exhibit 4(j) to Registration Statement No. 333-01807). 4(j) -- Seventh Supplemental Indenture, dated as of February 1, 1996, between Salomon Inc and Citibank, N.A. (incorporated by reference to Exhibit 4(k) to Registration Statement No. 333-01807). 4(k) -- Eighth Supplemental Indenture, dated as of May 8, 1996, between Salomon Inc and Citibank, N.A. (incorporated by reference to Exhibit 4 to Citigroup Global Markets Holdings Inc.'s Current Report on Form 8-K dated April 29, 1996). 4(l) -- Ninth Supplemental Indenture, dated as of November 20, 1996, between Salomon Inc and Citibank, N.A. (incorporated by reference to Exhibit 4 to Citigroup Global Markets Holdings Inc.'s Current Report on Form 8-K dated November 20, 1996).
EXHIBIT NUMBER DESCRIPTION - ------- ----------- 4(m) -- Tenth Supplemental Indenture, dated as of November 28, 1997, between Salomon Smith Barney Holdings Inc. and Citibank, N.A. (incorporated by reference to Exhibit 4(l) to Registration Statement 333-38931). 4(n) -- Eleventh Supplemental Indenture, dated as of July 1, 1999 between Salomon Smith Barney Holdings Inc. and The First National Bank of Chicago, as Successor Trustee (incorporated by reference to Exhibit 4(tt) to Post-Effective Amendment No. 1 to Registration Statement No. 333-38931). 4(o) -- Subordinated Debt Indenture, dated as of December 1, 1988, between Salomon Inc and Bankers Trust Company, as Trustee (incorporated by reference to Exhibit 7 to Citigroup Global Markets Holdings Inc.'s Current Report on Form 8-K dated August 2, 1989). 4(p) -- First Supplemental Indenture, dated as of September 7, 1990, between Salomon Inc and Bankers Trust Company (incorporated by reference to Exhibit 4(b) to Registration Statement No. 33-39502). 4(q) -- Second Supplemental Indenture, dated as of December 14, 1993, between Salomon Inc and Bankers Trust Company (incorporated by reference to Exhibit 4(n) to Registration Statement No. 333-01807). 4(r) -- Third Supplemental Indenture, dated as of July 3, 1996, between Salomon Inc and Bankers Trust Company (incorporated by reference to Exhibit 99.01 to Citigroup Global Markets Holdings Inc.'s Current Report on Form 8-K dated December 9, 1997). 4(s) -- Fourth Supplemental Indenture, dated as of November 28, 1997, between Salomon Smith Barney Holdings Inc. and Bankers Trust Company (incorporated by reference to Exhibit 99.02 to Citigroup Global Markets Holdings Inc.'s Current Report on Form 8-K dated December 9, 1997). 4(t) -- Fifth Supplemental Indenture, dated as of July 1, 1999, between Salomon Smith Barney Holdings Inc. and Bankers Trust Company (incorporated by reference to Exhibit 4(uu) to Post-Effective Amendment No. 1 to Registration Statement No. 333-38931). 4(u) -- Sixth Supplemental Indenture dated as of July 10, 2003 between Citigroup Global Markets Holdings Inc. and Deutsche Bank Trust Company Americas.* 4(v) -- Form of Seventh Supplemental Indenture between Citigroup Global Markets Holdings Inc. and Deutsche Bank Trust Company Americas.* 4(w) -- Senior Debt Indenture, dated as of October 27, 1993, between Salomon Inc and The Bank of New York, as Trustee (incorporated by reference to Exhibit 3 to Citigroup Global Markets Holdings Inc.'s Current Report on Form 8-K dated October 27, 1993). 4(x) -- First Supplemental Indenture, dated as of November 28, 1997, between Salomon Smith Barney Holdings Inc. and The Bank of New York (incorporated by reference to Exhibit 99.04 to Citigroup Global Markets Holdings Inc.'s Current Report on Form 8-K dated December 9, 1997). 4(y) -- Second Supplemental Indenture, dated as of July 1, 1999, between Salomon Smith Barney Holdings Inc. and the Bank of New York (incorporated by reference to Exhibit 4(vv) to Post-Effective Amendment No. 1 to Registration Statement No. 333-38931). 4(z) -- Senior Debt Indenture, dated as of January 18, 1994, between Salomon Inc and The Chase Manhattan Bank, as Trustee (incorporated by reference to Exhibit 4 to Citigroup Global Markets Holdings Inc.'s Current Report on Form 8-K dated January 18, 1994). 4(aa) -- First Supplemental Indenture, dated as of November 28, 1997, between Salomon Smith Barney Holdings Inc. and The Chase Manhattan Bank (incorporated by reference to Exhibit 99.05 to Citigroup Global Markets Holdings Inc.'s Current Report on Form 8-K dated December 9, 1997). 4(bb) -- Second Supplemental Indenture, dated as of July 1, 1999, between Salomon Smith Barney Holdings Inc. and The Chase Manhattan Bank (incorporated by reference to Exhibit 4(ww) to Post-Effective Amendment No. 1 to Registration Statement No. 333-38931). 4(cc) -- Forms of Medium-Term Registered Notes, Series D and Series E.*
EXHIBIT NUMBER DESCRIPTION - ------- ----------- 4(dd) -- Forms of Medium-Term Bearer Notes, Series D and Series E.* 4(ee) -- Forms of Medium-Term Temporary Global Notes, Series D and Series E.* 4(ff) -- Forms of Medium-Term Permanent Global Notes, Series D and Series E.* 4(gg) -- Form of Retail Medium-Term Global Notes, Series F.* 4(hh) -- Form of Index Warrant Agreement for Index Warrants, with form of Index Warrant Certificate attached as an exhibit thereto, for Index Warrants in registered form (incorporated by reference to Exhibit 4.01 of Citigroup Global Markets Holdings Inc.'s Current Report on Form 8-K dated October 13, 1999). 4(ii) -- Certificate of Trust of CGMH Capital II, as amended (incorporated by reference to Exhibit 4(gg) to Registration Statement No. 333-106272). 4(jj) -- Certificate of Trust of CGMH Capital III, as amended (incorporated by reference to Exhibit 4(hh) to Registration Statement No. 333-106272). 4(kk) -- Certificate of Trust of CGMH Capital IV, as amended (incorporated by reference to Exhibit 4(ii) to Registration Statement No. 333-106272). 4(ll) -- Form of Amended and Restated Declaration of Trust for CGMH Capital II (incorporated by reference to Exhibit 4(jj) to Registration Statement No. 333-106272). 4(mm) -- Form of Amended and Restated Declaration of Trust for CGMH Capital III (incorporated by reference to Exhibit 4(kk) to Registration Statement No. 333-106272). 4(nn) -- Form of Amended and Restated Declaration of Trust for CGMH Capital IV (incorporated by reference to Exhibit 4(ll) to Registration Statement No. 333-106272). 4(oo) -- Form of Junior Subordinated Debt Indenture between Citigroup Global Markets Holdings Inc. and JPMorgan Chase Bank, as Trustee.* 4(pp) -- Form of Trust Preferred Security (included in Exhibit 4(jj)). 4(qq) -- Form of Trust Common Security (included in Exhibit 4(jj)). 4(rr) -- Form of Guarantee with respect to the Trust Preferred Securities of CGMH Capital II (incorporated by reference to Exhibit 4(gg) to Registration Statement 333-38931). 4(ss) -- Form of Guarantee with respect to the Trust Preferred Securities of CGMH Capital III (incorporated by reference to Exhibit 4(hh) to Registration Statement 333-38931). 4(tt) -- Form of Guarantee with respect to the Trust Preferred Securities of CGMH Capital IV (incorporated by reference to Exhibit 4(ii) to Registration Statement 333-38931). 4(uu) -- Form of Junior Subordinated Debt Securities (included in Exhibit 4(oo)).* 5(a) -- Opinion of Edward F. Greene, Esq.* 8(a) -- Tax opinion of Cleary, Gottlieb, Steen & Hamilton with respect to the Trust Preferred Securities.* 12(a) -- Computation of Ratio of Losses to Fixed Charges of Citigroup Global Markets Holdings Inc. (incorporated by reference to Exhibit 12.01 to Citigroup Global Markets Holdings Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 2004). 23(a) -- Consent of KPMG LLP, Independent Registered Accounting Firm.* 23(b) -- Consent of Edward F. Greene, Esq. (included in Exhibit 5(a)).* 23(c) -- Consent of Cleary, Gottlieb, Steen & Hamilton (included in Exhibit 8(a)).* 25(a) -- Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939, as amended, of The Bank of New York under the Senior Debt Indenture.* 25(b) -- Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939, as amended, of JPMorgan Chase Bank under the Senior Debt Indenture.* 25(c) -- Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939, as amended, of Deutsche Bank Trust Company Americas under the Subordinated Debt Indenture.*
EXHIBIT NUMBER DESCRIPTION - ------- ----------- 25(d) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of JPMorgan Chase Bank, under the Junior Subordinated Debt Indenture.* 25(e) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The JPMorgan Chase Bank, as Trustee under the Declaration of Trust of CGMH Capital II.* 25(f) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The JPMorgan Chase Bank, as Trustee under the Declaration of Trust of CGMH Capital III.* 25(g) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The JPMorgan Chase Bank, as Trustee under the Declaration of Trust of CGMH Capital IV.* 25(h) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The JPMorgan Chase Bank, as Guarantee Trustee under the Trust Preferred Securities Guarantee of Citigroup Global Markets Holdings Inc. for the benefit of holders of Trust Preferred Securities of CGMH Capital II.* 25(i) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The JPMorgan Chase Bank, as Guarantee Trustee under the Trust Preferred Securities Guarantee of Citigroup Global Markets Holdings Inc. for the benefit of holders of Trust Preferred Securities of CGMH Capital III.* 25(j) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The JPMorgan Chase Bank, as Guarantee Trustee under the Trust Preferred Securities Guarantee of Citigroup Global Markets Holdings Inc. for the benefit of holders of Trust Preferred Securities of CGMH Capital IV.*
- --------------- * Filed herewith. EX-1.B 2 x99885s3exv1wb.txt FORM OF GLOBAL SELLING AGENCY AGREEMENT Exhibit 1(b) CITIGROUP GLOBAL MARKETS HOLDINGS INC. Medium-Term Notes, Series D and Series E Euro-Medium-Term Notes, Series D and Series E GLOBAL SELLING AGENCY AGREEMENT _____________, 20__ New York, New York Citigroup Global Markets Inc. 388 Greenwich Street New York, New York 10013 (the "U.S. Agent") Citigroup Global Markets Limited Citigroup Centre Canada Square Canary Wharf London E14 5LB ENGLAND (the "International Agent") Ladies and Gentlemen: Citigroup Global Markets Holdings Inc., a New York corporation (the "Company"), confirms its agreement with each of you with respect to the issue and sale by the Company of up to U.S.$[ ] (or the equivalent thereof in one or more foreign currencies, foreign currency units or composite currencies) aggregate principal amount of its Medium-Term Notes, Series D and Series E, in registered form (the "Medium-Term Notes") and Euro-Medium-Term Notes, Series D and Series E, in bearer form (the "Euro Medium-Term Notes"; and together with the Medium-Term Notes, the "Notes"). It is understood that the Company may from time to time authorize the issuance and sale of additional amounts of the Notes and that such Notes may be issued and sold pursuant to the terms of this Agreement, all as though the issuance and sale of such Notes were authorized by the Company as of the date hereof. The Notes may be denominated in U.S. dollars, foreign currencies or composite currencies (the "Specified Currency") as may be specified in the applicable Pricing Supplement (as defined herein) relating to any particular issue of Notes. The Notes, Series D will be issued under an indenture (the "Senior Debt Indenture") dated as of December 1, 1988, as amended from time to time, between the Company and JPMorgan Chase Bank, as successor trustee. The Notes, Series E will be issued under an indenture (the "Subordinated Debt Indenture"; and together with the Senior Debt Indenture, the "Indentures") dated as of December 1, 1988, as amended from time to time, between the Company and Deutsche Bank Trust Company Americas, as trustee (together with JPMorgan Chase Bank, as successor trustee, the "Trustees"). Unless otherwise specifically provided for and set forth in a supplement to the Prospectus referred to below, the Medium-Term Notes will be issued in minimum denominations of U.S.$1,000 (or the approximate equivalent thereof in the Specified Currency) and in denominations exceeding such amount by integral multiples of U.S.$1,000 (or the approximate equivalent thereof in the Specified Currency) and will be issued only in fully registered form, and the Euro Medium-Term Notes will be issued in minimum denominations of U.S.$10,000 (or the approximate equivalent thereof in the Specified Currency) and in denominations exceeding such amount by integral multiples of U.S.$1,000 (or the approximate equivalent thereof in the Specified Currency) and will be issued only in bearer form, and the Notes will have the interest rates, maturities, redemption provisions and other terms set forth in the applicable Pricing Supplement (as defined herein). The Medium-Term Notes will be issued, and the terms thereof established, in accordance with the Indentures and the Medium-Term Notes Administrative Procedures attached hereto as Exhibit A (the "U.S. Procedures") (unless a Terms Agreement (as defined in Section 2(b)) modifies or otherwise supersedes such U.S. Procedures with respect to the Medium-Term Notes issued pursuant to such Terms Agreement). The U.S. Procedures may only be amended by written agreement of the Company and the U.S. Agent after notice to, and with the approval of, the Trustees. The Euro Medium-Term Notes will be issued, and the terms thereof established, in accordance with the Indentures and the Euro Medium-Term Notes Administrative Procedures attached hereto as Exhibit B (the "Euro Procedures") (unless a Terms Agreement modifies or otherwise supersedes such Euro Procedures with respect to the Euro Medium-Term Notes issued pursuant to such Terms Agreement). The Euro Procedures may only be amended by written agreement of the Company and the International Agent after notice to, and with the approval of, the Trustees. For purposes of this Agreement, the term "Agent" shall refer to either one of you and to any additional agents appointed as a party to this Agreement pursuant to Section 2(b) hereof, and the terms "U.S. Agent" and "International Agent" shall refer to such of you as are indicated on the cover page of this Agreement and any such additional Agents appointed as such pursuant to Section 2(c) hereof, each acting solely in its capacity as agent for the Company pursuant to Section 2(a) and not as principal; the term "Purchaser" shall refer to one of you acting solely as principal pursuant to Section 2(b) and not as agent; and the term "you" shall refer to you and any other Agent collectively, whether at any time any one of you is acting in both such capacities or in either such capacity. In acting under this Agreement, in whatever capacity, each of you is acting individually and not jointly. 1. Representations and Warranties. The Company represents and warrants to, and agrees with, each of you as set forth below in this Section 1. (a) Registration Statements (File Nos. 333-[ ] and 333-106272 in respect of U.S.$[ ] aggregate principal amount of securities of the Company, including the Notes, have been filed with the Securities and Exchange Commission (the "Commission"); such registration statements and any post-effective amendment thereto, each in the forms heretofore delivered or to be delivered to each of you, excluding exhibits to such registration statements but including all documents incorporated by reference therein, have been declared effective by the Commission in such forms; no other document with respect to such registration statements (other than a document incorporated by reference therein) has heretofore been filed or transmitted for filing with the Commission; and no stop order suspending the effectiveness of either registration statement has been issued and no proceeding for that purpose has been instituted or threatened by 2 the Commission (any preliminary prospectus included in the Second Registration Statement (as defined herein) or filed with the Commission pursuant to Rule 424(a) of the rules and regulations of the Commission under the Securities Act of 1933, as amended (the "Act"), being hereinafter called a "Preliminary Prospectus"); the various parts of each registration statement, including all exhibits thereto and the documents incorporated by reference in the prospectus contained in such registration statement at the time such part of such registration statement became effective but excluding the Statements of Eligibility under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), pertaining to the Indenture (the "Forms T-1"), each as amended at the time such part became effective, being hereinafter collectively called (i) in the case of Registration Statement No. 333-106272, the "First Registration Statement" and (ii) in the case of Registration Statement No. 333-[ ], the "Second Registration Statement"; the First Registration Statement and the Second Registration Statement being hereinafter called the "Registration Statements"; the form of basic prospectus relating to the offering and sale of Debt Securities and Index Warrants included in the Second Registration Statement, in the form in which it has most recently been filed, or transmitted for filing, with the Commission on or prior to the date of this Agreement being hereinafter from time to time called the "Basic Prospectus"; the supplement to the Prospectus relating to the Medium-Term Notes and the plan of distribution thereof being hereinafter called the "U.S. Prospectus Supplement"; the supplement to Prospectus relating to the Euro Medium-Term Notes and the plan of distribution thereof being hereinafter called the "Euro Prospectus Supplement" and, together with the U.S. Prospectus Supplement, the "Prospectus Supplements"; and the Basic Prospectus (including the U.S. Prospectus Supplement or the Euro Prospectus Supplement, as the case may be) being hereinafter called the "Prospectus". Any reference herein to the Prospectus, a Preliminary Prospectus or any Prospectus Supplement shall be deemed to refer to and include the documents incorporated by reference therein pursuant to the applicable form under the Act, as of the date of such Prospectus, Preliminary Prospectus or Prospectus Supplement, as the case may be; any reference to any amendment or supplement to any Prospectus, Preliminary Prospectus or Prospectus Supplement, including any supplement to the Prospectus that sets forth only the terms of a particular issue of the Notes (a "Pricing Supplement"), shall be deemed to refer to and include any documents filed after the date of such Prospectus, Preliminary Prospectus or Prospectus Supplement, as the case may be, under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated by reference in such Prospectus or Prospectus Supplement, as the case may be; any reference to any amendment to either Registration Statement shall be deemed to include any report of the Company filed pursuant to the Exchange Act after the effective date of such Registration Statement that is incorporated by reference in such Registration Statement; and any reference to the Prospectus as amended or supplemented shall be deemed to refer to and include the Prospectus as amended or supplemented in relation to the Notes sold pursuant to this Agreement, in the form in which it is filed with the Commission pursuant to Rule 424(b) under the Act, including any documents incorporated by reference therein as of the date of such filing); (b) The documents incorporated by reference in the Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission promulgated thereunder, and any further documents so filed and incorporated by reference in the Prospectus, or any further amendment or supplement thereto, when such documents become effective or are filed with the Commission, as the case 3 may be, will conform in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder; (c) Each Registration Statement and the Prospectus, and any amendment thereof or supplement thereto, and the Indenture, conform or will conform in all material respects with the applicable requirements of the Act and the Trust Indenture Act, and the rules and regulations of the Commission thereunder; (d) The First Registration Statement as of its effective date did not, and the Second Registration Statement, as amended as of any time, did not and will not, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading and the Prospectus, as amended and supplemented as of any such time, did not and will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representations or warranties as to the information contained in or omitted from the Second Registration Statement or the Prospectus or any amendment thereof or supplement thereto in reliance upon, and in conformity with, information furnished in writing to the Company by or on behalf of any Agent specifically for use in the Second Registration Statement and the Prospectus or any amendment thereof or supplement thereto; (e) The Notes have been duly authorized and, when executed and authenticated in accordance with the Indenture and delivered to and duly paid for by the purchasers thereof, will constitute valid and binding obligations of the Company, enforceable in accordance with their respective terms and entitled to the benefits of the Indenture (subject, as to enforcement, to applicable bankruptcy, reorganization, insolvency, moratorium or other similar laws affecting creditors' rights generally and to general principles of equity regardless of whether such enforceability is considered in a proceeding in equity or at law); the Indenture has been duly authorized by the Company and qualified under the Trust Indenture Act; and the Indenture conforms to the descriptions thereof in the Prospectus as amended or supplemented to relate to such issuance of Notes. (f) Since the date of the most recent financial statements included in the Prospectus, as amended or supplemented, there has not been any material adverse change in the consolidated financial condition or results of operations of the Company and its subsidiaries, taken as a whole, which is not disclosed in the Prospectus, as amended or supplemented. 2. Appointment of Agents. (a) Subject to the terms and conditions stated herein and subject to the reservation by the Company of the right to sell Notes to any of you acting as principal at a discount for its own account or for resale to one or more investors or other dealers and the Company's right to sell Notes directly to investors on its own behalf or through other agents, the Company hereby appoints and authorizes the U.S. Agent and the International Agent to act as its agents to solicit offers for the purchase of all or part of the Medium-Term Notes and Euro Medium-Term Notes, respectively, from the Company; provided, however, that only the International Agent may solicit offers for the purchase of Euro Medium-Term Notes. 4 Following the Commencement Date (referred to below), the Company shall notify each Agent from time to time as to the commencement of a period during which the Notes may be offered and sold by the Agents (each period, commencing with such a notification and ending at such time as the authorization for offers and sales through the Agents shall have been suspended by the Company or the Agents as provided hereunder, being herein referred to as an "Offering Period"). The initial Offering Period shall begin on _______, 20___ (the "Commencement Date"). On the basis of the representations and warranties, and subject to the terms and conditions set forth herein, each of the U.S. Agent and the International Agent agrees, as agent of the Company, to use its reasonable best efforts to solicit offers to purchase Medium-Term Notes and Euro Medium-Term Notes, respectively, from the Company upon the terms and conditions set forth in the applicable Prospectus (and any supplement thereto) and in the U.S. or Euro Procedures, as applicable. Each Agent shall communicate to the Company, orally or in writing, each reasonable offer or indication of interest to purchase Notes received by such Agent as Agent. The Company shall have the sole right to accept offers to purchase the Notes and may reject any such offer in whole or in part. Each Agent shall have the right to reject, in its discretion reasonably exercised, any offer received by it to purchase the Notes, in whole or in part, and any such rejection shall not be deemed a breach of its agreements contained herein. In soliciting offers to purchase the Notes in its capacity as agent of the Company, each Agent is acting solely as agent for the Company, and not as principal, and does not assume any obligation toward or relationship of agency or trust with any purchaser of the Notes (other than any such obligation or relationship which the Agent assumes independently of this Agreement). Each Agent shall make reasonable efforts to assist the Company in obtaining performance by each purchaser whose offer to purchase Notes has been solicited by such Agent and accepted by the Company, but such Agent shall not, except as otherwise provided in this Agreement, be obligated to disclose the identity of any purchaser or have any liability to the Company in the event any such purchase is not consummated for any reason. Except as provided in Section 2(b), under no circumstances will any Agent be obligated to purchase any Notes for its own account. It is understood and agreed, however, that any of you may purchase Notes as principal pursuant to Section 2(b). The Company reserves the right, in its sole discretion, to instruct the U.S. Agent and the International Agent to suspend at any time, for any period of time or permanently, the solicitation of offers to purchase Notes. Upon receipt of instructions from the Company, the U.S. Agent and the International Agent (or either or both of them), as the case may be, will forthwith suspend solicitation of offers to purchase Notes from the Company until such time as the Company has advised them that such solicitation may be resumed. The Company agrees to pay each Agent a commission, on the Settlement Date with respect to each sale of Notes by the Company as a result of a solicitation made by such Agent, in an amount equal to that percentage specified in Schedule I hereto of the aggregate principal amount of the Notes sold by the Company. Such commission shall be payable as specified in the U.S. or Euro Procedures, as applicable. Without the prior approval of the Company, no Agent (acting on an agency basis) may reallow any portion of the commission payable pursuant hereto to dealers or purchasers in connection with the offer and sale of any Notes. 5 Subject to the provisions of this Section and to the U.S. or Euro Procedures, as applicable, offers for the purchase of Notes may be solicited by an Agent as agent for the Company at such time and in such amounts as such Agent shall deem advisable. The Company may from time to time offer Notes for sale otherwise than through an Agent; provided, however, that so long as this Agreement is in effect the Company shall not solicit or accept offers to purchase Notes through any agent other than an Agent. If the Company defaults in its obligations to deliver Notes to a purchaser whose offer it has accepted, the Company shall indemnify and hold each of you harmless against any loss, claim or damage arising from or as a result of such default by the Company. (b) Subject to the terms and conditions stated herein, whenever the Company and any of you determine that the Company shall sell Notes directly to any of you as principal, each such sale of Notes shall be made in accordance with the terms of this Agreement and a supplemental agreement relating to such sale. Each such supplemental agreement (which may be either an oral or written agreement) is herein referred to as a "Terms Agreement". Each Terms Agreement shall describe the Notes to be purchased by the Purchaser pursuant thereto and shall specify the aggregate principal amount of such Notes, the price to be paid to the Company for such Notes, the maturity date of such Notes, the rate at which interest will be paid on such Notes, the dates on which interest will be paid on such Notes and the record date with respect to each such payment of interest, such other terms of the Notes as are applicable, the Settlement Date for the purchase of such Notes, the place of delivery of the Notes and payment therefor, the method of payment and any requirements for the delivery of opinions of counsel, certificates from the Company or its officers or a letter from the Company's independent public accountants as described in Section 5(b). A Terms Agreement may also specify certain provisions relating to the reoffering of such Notes by the Agent. Any written Terms Agreement may be in the form attached hereto as Exhibit C. The Purchaser's commitment to purchase Notes shall be deemed to have been made on the basis of the representations and warranties of the Company herein contained and shall be subject to the terms and conditions herein set forth. Each date of delivery of and payment for Notes to be purchased by any of you as principal or as agent or by any other purchaser is referred to herein as a "Settlement Date". Delivery of the certificates for Notes sold to the Purchaser pursuant to a Terms Agreement shall be made not later than the Settlement Date agreed to in such Terms Agreement, against payment of funds to the Company in the net amount due to the Company for such Notes by the method and in the form set forth in the U.S. or Euro Procedures, as applicable, unless otherwise agreed to between the Company and the Purchaser in such Terms Agreement. Unless otherwise agreed to between the Company and the Purchaser in a Terms Agreement, any Note sold to a Purchaser (i) shall be purchased by such Purchaser at a price equal to 100% of the principal amount thereof less a percentage equal to the commission applicable to an agency sale of a Note of identical maturity and (ii) may be resold by such Purchaser at varying prices from time to time or, if set forth in the applicable Terms Agreement and Pricing Supplement, at a fixed public offering price. In connection with any resale of Notes purchased, a Purchaser may use a selling or dealer group and may reallow to any broker or dealer any portion of the discount or commission payable pursuant hereto. 6 (c) Additional Agents. Notwithstanding paragraph 2(a) above, the Company may from time to time appoint one or more additional financial institutions experienced in the distribution of securities as a U.S. Agent or International Agent under this Agreement, for the duration of this Agreement (subject to Section 7 hereof) or on an issue by issue basis, pursuant to a letter (an "Agent Accession Confirmation") substantially in the form of Exhibit D or Exhibit F to this Agreement, as appropriate, provided that any such additional party shall have first requested appointment as such upon the terms and conditions of this Agreement in writing to the Company pursuant to a letter (an "Agent Accession Letter") substantially in the form of Exhibit E or Exhibit G to this Agreement, as appropriate, whereupon it shall, subject to the terms and conditions of this Agreement, the relevant Agent Accession Letter and the relevant Agent Accession Confirmation, become a party to this Agreement as a U.S. Agent, or an International Agent, as specified in the relevant Agent Accession Letter, vested with all the authority, rights and powers and subject to all the duties and obligations of an Agent as if originally named as an Agent hereunder. The Company shall promptly notify the Trustee and the other Agents of any such appointment, but only in the event that any such additional Agent is appointed for the duration of this Agreement. 3. Offering and Sale of Notes. The U.S. Agent, the International Agent and the Company agree to perform the respective duties and obligations specifically provided to be performed by them in the U.S. or Euro Procedures, as the case may be. In connection with any offering of Euro Medium-Term Notes, the International Agent may act as stabilizing agent (the "Stabilizing Agent"), and as Stabilizing Agent may over-allot or effect transactions which stabilize or maintain the market price of the Euro Medium-Term Notes at a level which might not otherwise prevail. Such stabilizing, if commenced, may be discontinued at any time. The Stabilizing Agent, whose identity shall be disclosed in the applicable supplement to the Prospectus relating to such offering of Euro Medium-Term Notes, shall comply with all applicable laws. 4. Agreements. (A) The Company agrees with each of you that: (a) At any time during an Offering Period or during the time a prospectus relating to the Notes is required to be delivered under the Act, prior to amending or supplementing either Registration Statement or the Prospectus, the Company will furnish each Agent and such Agent's counsel with a copy of each proposed amendment or supplement (other than an amendment or supplement to be made pursuant to incorporation by reference of a document filed under the Exchange Act, or a Pricing Supplement or an amendment or supplement relating solely to an offering of securities other than the Notes). The Company will promptly cause the Prospectus together with each amendment thereof or supplement thereto to be mailed or otherwise transmitted to the Commission for filing pursuant to Rule 424(b) by an appropriate method or will promptly cause the Prospectus together with each amendment thereof or supplement thereto to be filed with the Commission pursuant to said Rule. If the Prospectus is amended or supplemented (other than by a Pricing Supplement or an amendment or supplement relating solely to an offering of securities other than the Notes), each Agent shall be furnished with such information relating to such filing as it may reasonably request, and no Agent shall be obligated to solicit offers to purchase Notes so long as it is not reasonably satisfied that such amendment or supplement complies in all material respects with the provisions of the Act and 7 the Exchange Act. At any time during an Offering Period or during the time a prospectus relating to the Notes is required to be delivered under the Act, the Company will promptly advise each Agent of (i) the filing of any amendment or supplement to the Prospectus (other than a Pricing Supplement or an amendment or supplement relating solely to an offering of securities other than the Notes), (ii) the filing or effectiveness of any amendment to either Registration Statement, (iii) the receipt by the Company of comments from the Commission relating to or requests by the Commission for any amendment of either Registration Statement or any amendment of or supplement to the Prospectus or for any additional information, (iv) the issuance by the Commission of any stop order suspending the effectiveness of either Registration Statement or the institution or threatening of any proceeding for that purpose and (v) the receipt by the Company of any notification with respect to the suspension of the qualification of the Notes for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose. The Company will use its reasonable best efforts to prevent the issuance of any such stop order or notice of suspension of qualification and, if issued, to obtain as soon as possible the withdrawal thereof. Upon any Agent's request, the Company will within a reasonable time inform such Agent of the aggregate principal amount of Notes registered under the Registration Statements that remain unissued. (b) Within the time during which a prospectus relating to the Notes is required to be delivered under the Act, the Company will comply with all requirements imposed upon it by the Act, as now and hereafter amended, and by the rules and regulations of the Commission thereunder, as from time to time in force, so far as necessary to permit the continuance of sales of or dealings in the Notes as contemplated by the provisions hereof and the Prospectus. If during such period any event occurs as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances then existing, not misleading, or if, in the opinion of the Company, during such period it is necessary to amend or supplement the Second Registration Statement or the Prospectus to comply with the Act, the Company will promptly notify each Agent to suspend the solicitation of offers to purchase the Notes in its capacity as Agent and to cease sales of any Notes it may then own as principal and, to the extent required under the provision in the last sentence of this subsection (b), the Company will promptly amend or supplement such Registration Statement or the Prospectus (at the expense of the Company) so as to correct such statement or omission or effect such compliance. If such amendment or supplement, and any documents, certificates, opinions and letters furnished to each Agent pursuant to subsections (j), (k) and (1) of this Section 4(A) in connection with the preparation and filing of such amendment or supplement, are reasonably satisfactory in all respects to such Agent, upon the filing of such amendment or supplement with the Commission or effectiveness of an amendment to such Registration Statement, such Agent will resume solicitation of offers to purchase Notes hereunder. Notwithstanding the foregoing, the Company shall not be required to comply with the provisions of subsection (b) of this Section 4(A) during any period from the time any Agent shall have been notified to suspend the solicitation of offers to purchase the Notes in its capacity as Agent (whether under this subparagraph (b) or otherwise under this Agreement) to the time the Company shall determine that solicitation of offers to purchase the Notes should be resumed; provided that if any such Agent holds any Notes as principal purchased pursuant to a Terms Agreement or otherwise pursuant to this Agreement, the Company shall comply with the provisions of subsection (b) of 8 this Section 4(B) during the period when a Prospectus is required to be delivered pursuant to the Act. (c) The Company will comply, in a timely manner, with all applicable requirements under the Exchange Act relating to the filing with the Commission of the Company's reports pursuant to Section 13(a), 13(c) or 15(d) of the Exchange Act and, if then applicable, of the Company's proxy statements pursuant to Section 14 of the Exchange Act. (d) The Company will use its best efforts to qualify the Notes for sale under the securities laws of such jurisdictions as any Agent reasonably designates, to maintain such qualifications in effect so long as required for the distribution of the Notes and, if requested by such Agent, to arrange for the determination of the legality of the Notes for purchase by institutional investors, except that the Company shall not be required in connection therewith to qualify to do business in any jurisdiction where it is not now so qualified or to take any action which would subject it to general or unlimited service of process in any jurisdiction where it is not now so subject. (e) The Company will furnish to each Agent copies of the Registration Statements and the Prospectus (including all documents incorporated by reference therein), and all amendments of and supplements to the Registration Statements or the Prospectus which are filed with the Commission during the period in which a prospectus relating to the Notes is required to be delivered under the Act (including all documents filed by an amendment or supplement with the Commission during such period which are deemed to be incorporated by reference therein), in each case in such quantities as such Agent may from time to time reasonably request. (f) So long as any of the Notes are outstanding, the Company agrees to furnish to each Agent, upon its reasonable request, as soon as available, all reports and financial statements filed by or on behalf of the Company with the Commission or any national securities exchange. (g) The Company will make generally available to its security holders and to each Agent as soon as practicable, but in any event not later than 15 months after the end of the Company's current fiscal quarter, an earnings statement (which need not be audited) covering a 12-month period beginning after the date upon which any amendment of or supplement to the Prospectus (other than a Pricing Supplement or an amendment or supplement relating solely to an offering of debt securities other than the Notes) is filed pursuant to Rule 424 under the Act, which shall satisfy the provisions of Section 11(a) of the Act. (h) The Company shall, whether or not any sale of Notes is consummated or this Agreement is terminated, pay all expenses incident to the performance of its obligations under this Agreement and under any Terms Agreement, including, without limitation, the fees and disbursements of its accountants and counsel, the cost of printing (or other production) and delivery of the Registration Statements and the Prospectus, all amendments thereof and supplements thereto, the Indentures, and all other documents relating to the offering, the cost of preparing, printing, packaging and delivering the Notes, the fees and disbursements (including reasonable fees of counsel) incurred in connection with the qualification of the Notes for sale and 9 determination of eligibility for investment of the Notes under the securities or Blue Sky laws of such jurisdictions as the Agent may designate, the fees and disbursements of the Trustees, the fees of any agency that rates the Notes, the fees and expenses in connection with any listing of the Notes on the Luxembourg Stock Exchange or such other securities exchange agreed to in writing by the Company, the fees and expenses incurred with respect to any filing with the National Association of Securities Dealers, Inc. and the reasonable fees and disbursements of Cleary, Gottlieb, Steen & Hamilton, as counsel for the Agents, or other counsel reasonably satisfactory to each of the Agents and the Company, and such other expenses, including, without limitation, advertising expenses as may be agreed upon by the Agents and the Company; provided, however, that with respect to any purchase of Notes by one of you as principal pursuant to a Terms Agreement, the fees and disbursements of Cleary, Gottlieb, Steen & Hamilton or other counsel to you shall not be paid by the Company. (i) During the term of this Agreement, the Company shall furnish to each Agent such relevant documents and certificates of officers of the Company relating to the business, operations and affairs of the Company, the Registration Statements, the Prospectus, any amendments thereof or supplements thereto, the Indenture, the Notes, this Agreement, the Procedures, any Terms Agreement and the performance by the Company of its obligations hereunder or thereunder as any Agent may from time to time reasonably request and shall promptly notify each Agent orally, followed by written notice of any downgrading, or of its receipt of any notice of any intended downgrading, in the rating accorded any of the Company's securities by Moody's Investors Service, Inc. or Standard & Poor's Ratings Services or, if one of them no longer rates the securities of the Company, another "nationally recognized statistical rating organization", as such term is defined for purposes of Rule 436(g) (2) under the Act. (j) Each time either Registration Statement or the Prospectus is amended or supplemented (other than by a Pricing Supplement, an amendment or supplement relating solely to an offering of securities other than the Notes, or an amendment or supplement made pursuant to the incorporation by reference of a document filed under the Exchange Act), if requested by any Agent, the Company will deliver or cause to be delivered forthwith to such Agent a certificate of the Company signed by the Chairman of the Board, any Vice Chairman, the Treasurer or any Vice President and by the principal financial or accounting officer of the Company (or another officer or officers acceptable to such Agent), dated the date of the effectiveness of such amendment or the date of filing with the Commission of such supplement or document, as the case may be, in form reasonably satisfactory to such Agent, to the effect that the statements contained in the certificate referred to in Section 5(b) (iii) that was last furnished to such Agent (either pursuant to Section 5(b) (iii) or pursuant to this Section 4(A)(j)) are true and correct at the time of the effectiveness of such amendment or the time of filing of such supplement or document, as the case may be, as though made at and as of such time (except that such statements shall be deemed to relate to the Registration Statements, as amended at the time of effectiveness of such amendment, and to the Prospectus, as amended and supplemented at the date of such certificate) or, in lieu of such certificate, a certificate of the same tenor as the certificate referred to in Section 5(b) (iii) but modified, if necessary, to relate to the Registration Statements, as amended at the time of the effectiveness of such amendment, and to the Prospectus, as amended and supplemented at the date of such certificate. 10 (k) Each time either Registration Statement or the Prospectus is amended or supplemented (other than by a Pricing Supplement, an amendment or supplement relating solely to an offering of securities other than the Notes, or an amendment or supplement made pursuant to the incorporation by reference of a document filed under the Exchange Act), if requested by either Agent, the Company shall furnish to or cause to be furnished forthwith to such Agent the written opinion of a Deputy General Counsel of the Company or other counsel reasonably satisfactory to such Agent dated the date of the effectiveness of such amendment or the date of filing with the Commission of such supplement or document, as the case may be, in form reasonably satisfactory to such Agent, to the effect set forth in Exhibit C hereto. In lieu of such opinion, counsel last furnishing such an opinion to such Agent may furnish to such Agent a letter to the effect that such Agent may rely on such last opinion to the same extent as though it were dated the date of such letter and authorizing reliance on such last opinion (except that statements in such last opinion will be deemed to relate to the Registration Statements, as amended at the time of the effectiveness of such amendment, and to the Prospectus, as amended and supplemented at the date of such letter). (l) Each time that either Registration Statement or the Prospectus is amended or supplemented to set forth amended or supplemental financial information (other than by a Pricing Supplement, an amendment or supplement relating solely to an offering of securities other than the Notes, or an amendment or supplement made pursuant to the incorporation by reference of a document filed under the Exchange Act), if requested by either Agent, the Company shall cause KPMG LLP, its Independent Registered Public Accounting Firm, forthwith to furnish such Agent a letter, dated the date of the effectiveness of such amendment or the date of filing of such supplement or document, as the case may be, in form satisfactory to such Agent, of the same tenor as the letter referred to in Section 5(b)(iv) hereof but modified to relate to the Registration Statements and Prospectus, as amended and supplemented to the date of such letter, with such changes as may be necessary to reflect changes in the financial statements and other information derived from the accounting records of the Company; provided, however, that if either Registration Statement or the Prospectus is amended or supplemented solely to include or incorporate by reference financial information with respect to a fiscal quarter, KPMG LLP may limit the scope of such letter to the unaudited financial statements included in such amendment or supplement. (m) Each acceptance by the Company of an offer for the purchase of Notes and each sale of Notes to any of you as principal shall be deemed to be an affirmation that the representations and warranties of the Company contained in or made pursuant to this Agreement are true and correct in all material respects at the time of such acceptance or sale, as the case may be, as though made at and as of such time, and an undertaking that such representations and warranties will be true and correct in all material respects at the time of delivery to the purchaser or his agent, or an Agent, or any of you acting as principal, of the Notes relating to such acceptance, as the case may be, as though made at and as of such time (and it is understood that such representations and warranties shall relate to the Registration Statements and the Prospectus as amended and supplemented to each such time). (n) Anything to the contrary in this Section 4 notwithstanding, if, at the time of any required notice, amendment or supplement to the Registration Statement or the Prospectus, the Company shall have instructed the Agents to suspend solicitation of offers to 11 purchase the Notes in each Agent's capacity as Agent of the Company and any Agent does not then hold any Notes acquired by it as principal pursuant to a Terms Agreement, the Company shall not be obligated to furnish or cause to be furnished any notice, certificate, opinion or letter otherwise required until such time as it shall determine that solicitation of offers to purchase the Notes should be resumed; and provided, further that, prior to resuming such solicitation the Agents shall be entitled to receive any such notices, certificates, opinions or letters not previously furnished, accurate as of the date of such notice, certificate, opinion or letter. (o) The Company and its affiliates will comply with the provisions of U.S. Treasury Regulations 1.163-5(c)(2)(i)(D)(1) and (2). (p) If any issue of Euro Medium-Term Notes is to be listed on the Luxembourg Stock Exchange, as specified in the applicable Pricing Supplement, the Company will use its best efforts to obtain the listing of such issue of Euro Medium-Term Notes on the Luxembourg Stock Exchange, to furnish to such Exchange all documents, information and undertakings that may be reasonably necessary in order to effect such listing, and to cause such listing to be continued so long as any of the Euro Medium-Term Notes of such issue remain outstanding. (q) The Company or its designated agent shall submit such reports or information as may be required from time to time by applicable law, regulations and guidelines promulgated by Japanese governmental and regulatory authorities in respect of the issue and purchase of Notes denominated in Japanese yen. (B) Each Agent represents to and agrees with the Company that: (a) Except to the extent permitted under U.S. Treas. Reg. Section 1.163-5(c)(2)(i)(D) (the "D Rules"), (i) it has not offered or sold, and during the restricted period will not offer or sell, Euro Medium-Term Notes to a person who is within the United States or its possessions or to a United States person, and (ii) it has not delivered and will not deliver within the United States or its possessions definitive Euro Medium-Term Notes that are sold during the restricted period. (b) It has and throughout the restricted period will have in effect procedures reasonably designed to ensure that its employees or agents who are directly engaged in selling Euro Medium-Term Notes are aware that such Euro-Medium-Term Notes may not be offered or sold during the restricted period to a person who is within the United States or its possessions or to a United States person, except as permitted by the D Rules. (c) If it is a United States person, it represents that it is acquiring the Euro Medium-Term Notes for purposes of resale in connection with their original issuance, and if it retains Euro Medium-Term Notes for its own account, it will only do so in accordance with the requirements of U.S. Treas. Reg. Section 1.163-5(c)(2)(i)(D)(6). (d) With respect to each of its affiliates that acquires Euro Medium-Term Notes from it for the purpose of offering or selling such Euro Medium-Term Notes during the restricted period, it repeats and confirms the representations and agreements contained in Sections 4(B)(a), (b) and (c) on such affiliate's behalf. 12 (e) It has not entered and will not enter into any contractual arrangement with respect to the distribution or delivery of Euro Medium-Term Notes, except with their affiliates or with the prior written consent of the Company. Terms used in this Section 4(B) have the meanings given to them by the U.S. Internal Revenue Code and regulations thereunder, including the D Rules. For these purposes, the "restricted period" with respect to a Euro Medium-Term Note generally ends upon the expiration of the 40-day period beginning on the issue date of such Euro Medium-Term Note, unless the International Agent holds such Euro Medium-Term Note as part of an unsold allotment or subscription, in which case the "restricted period" continues for so long as the International Agent holds such Euro Medium-Term Note. (f) It has not offered or sold and, prior to the expiration of the period of six months from the date of issue of any Notes having a maturity of one year or greater, will not offer or sell any Notes to persons in the United Kingdom, except to those persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments, as principal or agent, for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom for purposes of the Public Offers of Securities Regulations 1995. (g) It has complied and will comply with all applicable provisions of the Financial Services and Markets Act 2000 ("FSMA") with respect to anything done by it in relation to the Notes in, from or otherwise involving the United Kingdom. (h) It has only communicated or caused to be communicated and it will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of FSMA) received by it in connection with the issue or sale of the Notes in circumstances in which Section 21(1) of FSMA does not apply to the Company. (i) It will not offer or sell any Notes directly or indirectly in Japan or to, or for the benefit of, any Japanese person or to others, for re-offering or re-sale directly or indirectly in Japan or to any Japanese person except under circumstances which will result in compliance with all applicable laws, regulations and guidelines promulgated by the relevant governmental and regulatory authorities in effect at the relevant time. For purposes of this paragraph, "Japanese person" means any person resident in Japan, including any corporation or other entity organized under the laws of Japan. 5. Conditions to the Obligations of the Agents. Each Agent's obligations to solicit offers to purchase Notes as agent of the Company, any of your obligations to purchase Notes as principal pursuant to any Terms Agreement or otherwise and the obligation of any other Purchaser to purchase Notes from the Company will be subject to the accuracy in all material respects of the representations and warranties on the part of the Company herein contained, to the accuracy of the statements of the Company's officers made in each certificate furnished pursuant to the provisions hereof and to the performance and observance by the Company of all covenants and agreements herein contained on its part to be performed and observed (in the case of any Agent's obligations to solicit offers to purchase Notes, at the time of such solicitation, 13 and, in the case of any Purchaser's obligation to purchase Notes, at the time the Company accepts the offer to purchase such Notes and at the time of purchase) and (in each case) to the following additional conditions precedent when and as specified: (a) On the corresponding Settlement Date: (i) There shall not have occurred any change in or affecting particularly the business or properties of the Company and its subsidiaries from that set forth in the Second Registration Statement, as amended or supplemented, that, in the Agent's judgment, makes it impracticable to market the Notes on the terms and in the manner contemplated in the Prospectus except, in the case of any purchase of Notes by any Agent as principal, as disclosed to such Agent in writing by the Company before it accepted the offer to purchase such Notes. (ii) (A) With respect to the Medium-Term Notes: There shall not have occurred any (x) suspension or material limitation of trading in securities generally on the New York Stock Exchange, or any setting of minimum prices for trading on such exchange, or any suspension of trading of any securities of the Company on any exchange (whether U.S. or foreign) or in the over-the-counter market, (y) declaration of a general moratorium on commercial banking activities in New York by either federal or New York state authorities or exchange controls shall have been imposed by the United States or by any country the currency of which will be used to make any payment in respect of the Notes or (z) any outbreak or escalation of major hostilities in which the United States is involved, any declaration of war by Congress or any other substantial national or international calamity or emergency that, in the Agent's judgment, is material and adverse and, in the case of any of the events described in clauses (ii)(A)(x) through (z), such event makes it, in the Agent's judgment, impracticable to market the Notes on the terms and in the manner contemplated by the Prospectus, as amended or supplemented, except, in the case of any purchase of Notes by any Agent as principal, for any such event occurring before the Company accepted the offer to purchase such Notes. (B) With respect to the Euro Medium-Term Notes: There shall not have occurred any (x) suspension or material limitation of trading in securities generally on the New York Stock Exchange, London Stock Exchange or Luxembourg Stock Exchange, or any setting of minimum prices for trading on such exchange, or any suspension of trading of any securities of the Company on any exchange (whether U.S. or foreign) or in the over-the-counter market, (y) declaration of a general moratorium on commercial banking activities in New York by either federal or New York state authorities or by bank regulatory authorities in London or Luxembourg, or exchange controls shall have been imposed by the United States or by any country the currency of which will be used to make any payment in respect of the Notes or (z) any outbreak or escalation of major hostilities in which the United States or the United Kingdom is involved, any declaration of war by Congress or Parliament or any other substantial national or international calamity or emergency that, in the Agent's judgment, is material and adverse and, in the case of any of the events described in clauses (ii)(B)(x) through (z), such event makes it, in the Agent's judgment, impracticable to market the Notes on the terms and in the manner contemplated by the Prospectus, as amended or 14 supplemented, except, in the case of any purchase of Notes by any Agent as principal, for any such event occurring before the Company accepted the offer to purchase such Notes. (iii) There shall not have been any downgrading, nor any notice given of any intended downgrading, in the rating accorded any of the Company's securities by Moody's Investor Service or Standard & Poor's Ratings Services or, if one of them no longer rates the securities of the Company, another "nationally recognized statistical rating organization", as such term is defined for purposes of Rule 436(g) (2) under the Act, except, in the case of any purchase of Notes by any Agent as principal, as disclosed to the Agent in writing by the Company before it accepted the offer to purchase such Notes. (b) On the Commencement Date and, if called for by any agreement by any Agent to purchase Notes as principal, on the corresponding Settlement Date: (i) The Company shall have furnished to each Agent the opinion of a Deputy General Counsel of the Company (or other counsel for the Company reasonably acceptable to the Agent) on the Commencement Date, and, on the Settlement Date will furnish the opinion of a Deputy General Counsel of the Company (or other counsel for the Company reasonably acceptable to such Agent) and, if called for by a Terms Agreement, the opinion of other counsel, dated the Commencement Date or the Settlement Date, as the case may be, to the effect set forth in Exhibit H hereto. (ii) Each Agent shall have received from Cleary, Gottlieb, Steen & Hamilton, counsel for the Agents (or other counsel reasonably acceptable to such Agent and the Company), an opinion dated the Commencement Date or the Settlement Date, as the case may be, to the effect set forth in Exhibit I hereto. (iii) The Company shall have furnished to the Agent a certificate of the Company, signed by the Chairman of the Board, any Vice Chairman, the Treasurer or any Vice President and by the principal financial officer, the Controller or the principal accounting officer of the Company (or another officer or officers acceptable to such Agent), dated the Commencement Date or the Settlement Date, as the case may be, to the effect that each signatory of such certificate has carefully examined the Registration Statement, as amended as of the date of such certificate, the Prospectus, as amended and supplemented as of the date of such certificate, and this Agreement and that: (A) the representations and warranties of the Company in this Agreement are true and correct in all material respects on and as of the date of such certificate with the same effect as if made on the date of such certificate and the Company has complied in all material respects with all the agreements and satisfied in all material respects all the conditions on its part to be performed or satisfied as a condition to the obligations of such Agent under this Agreement; (B) no stop order suspending the effectiveness of either Registration Statement has been issued and no proceedings for that purpose have been instituted or, to their knowledge, have been threatened; and 15 (C) since the date of the most recent financial statements included in the Prospectus, as amended and supplemented, there has been no material adverse change in the consolidated financial condition or results of operations of the Company and its subsidiaries, taken as a whole, which is not disclosed in the Prospectus, as amended or supplemented. (iv) KPMG LLP, or another independent registered public accounting firm, shall have furnished to each Agent a letter or letters, dated the Commencement Date or the Settlement Date, as the case may be, in form and substance reasonably satisfactory to such Agent, to the effect set forth in Exhibit J and Exhibit K hereto. (v) The Company shall have furnished to each Agent such appropriate further information, certificates and documents as such Agent may reasonably request. 6. Indemnification and Contribution. (a) The Company will indemnify and hold harmless each of you against any losses, claims, damages or liabilities, joint or several, to which each of you may become subject under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in either Registration Statement when it became effective, the Second Registration Statement or the Prospectus, or any amendment or supplement thereto, or any related preliminary Prospectus, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading and will reimburse each of you for any legal or other expenses reasonably incurred by you in connection with investigating or defending against such loss, claim damage, liability or action; provided, however, that (i) the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of any of you specifically for use in the preparation thereof, and (ii) such indemnity with respect to any preliminary Prospectus, the Prospectus or any preliminary supplemental prospectus, shall not inure to the benefit of any of you (or any person controlling you) if the Company shall have delivered sufficient quantities of the Prospectus, as amended and supplemented, to you within a reasonable time prior to the earlier of the delivery of the written confirmation of the sale of such Notes or the delivery of such Notes to the person asserting such loss, claim, damage, liability or action for which indemnification is sought, and the Prospectus as so amended and supplemented (excluding documents incorporated by reference) was not sent or given to such person by you at or prior to the earlier of the delivery of the written confirmation of the sale of such Notes or the delivery of such Notes to such person in any case where such sending or giving of a prospectus is required by the Act, and the untrue statement or omission of a material fact contained in such preliminary prospectus, such Prospectus or such preliminary supplemental prospectus, was corrected in the Prospectus, as so amended and supplemented, provided to you. (b) Each Agent will indemnify and hold harmless the Company against any losses, claims, damages or liabilities to which the Company may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact 16 contained any part of either Registration Statement when it became effective, or the Second Registration Statement or the Prospectus, or any amendment or supplement thereto, or any related Preliminary Prospectus, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of any Agent specifically for use in the preparation thereof, and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending against any such loss, claim, damage, liability or action. (c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve the indemnifying party from any liability which the indemnifying party may have to any indemnified party otherwise than under such subsection. In case any such action shall be brought against any indemnified party, and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in and, to the extent that it shall wish, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnified party), and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. (d) If the indemnification provided for in this Section 6 is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and by each of you on the other from the offering of the Notes from which such losses, claims, damages or liabilities arose, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and by each of you on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the by each of you on the other shall be deemed to be in the same proportion as the total net proceeds from the offering of the Notes from which such losses, claims, damages or liabilities arose (before deducting expenses) received by the Company bear to the total commissions received by each of you in connection with such offering. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by any of you and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue 17 statement or omission. The Company and each of you agree that it would not be just and equitable if contributions pursuant to this subsection (d) were to be determined by pro rata allocation (even if you were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in the first sentence of this subsection (d). The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim (which shall be limited as provided in subsection (c) above if the indemnifying party has assumed the defense of any such action in accordance with the provisions thereof) which is the subject of this subsection (d). Notwithstanding the provisions of this subsection (d), none of you shall be required to contribute any amount in excess of the amount by which the total price at which the Notes sold by the Company from which such losses, claims, damages or liabilities arose pursuant to offers solicited by you were offered to the public exceeds the amount of any damages which you have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Agents' obligations in this subsection (d) to contribute shall be several in proportion to their respective underwriting obligations and not joint. Promptly after receipt by an indemnified party under this subsection (d) of the notice of the commencement of any action against such party in respect of which a claim for contribution may be made against an indemnifying party under this subsection (d), such indemnified party shall notify the indemnifying party in writing of the commencement thereof if the notice specified in subsection (c) above has not been given with respect to such action; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under this subsection (d). (e) The obligations of the Company under this Section 6 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any of you within the meaning of the Act or the Exchange Act; and the obligations of each of you under this Section 6 shall be in addition to any liability which you may otherwise have and shall extend, upon the same terms and conditions, to each director of the Company (including any person who, with his or her consent, is named in a Registration Statement as about to become a director of the Company), to each officer of the Company who has signed a Registration Statement and to each person, if any, who controls the Company within the meaning of the Act or the Exchange Act. 7. Termination. (a) This Agreement will continue in effect until terminated as provided in this Section 7. This Agreement may be terminated by either the Company as to any Agent or by any Agent insofar as this Agreement relates to such Agent giving written notice of such termination to such Agent or the Company, as the case may be. The termination of this Agreement shall not require termination of any agreement by any of you to purchase Notes as principal, and the termination of any such Agreement shall not require termination of this Agreement. If this Agreement is terminated, neither party shall have any liability to the other party hereto, except as provided in the first sentence of the fourth paragraph of Section 2(a), the last proviso of Section 4(A)(b), and Sections 4(A)(g), 4(A)(h), 6, 8 and 11, and except that, if at the time of termination an offer to purchase any of the Notes has been accepted by the Company 18 but the time of delivery to the purchaser or its agent of the Note or Notes relating thereto has not occurred, the Company's representations and warranties stated in Section 2 and its obligations under the U.S. Procedures and the Euro Procedures, and in Sections 2(c), 4(A)(a), 4(A)(b), 4(A)(c), 4(A)(e), 4(A)(i), 4(A)(j), 4(A)(k), 4(A)(1), 4(A)(m), 4(A)(o), 4(A)(q), 4(A)(r) and 5 shall also remain in full force and effect and not be terminated until the delivery of such Notes. 8. Representations and Indemnities to Survive. With respect to any Agent's solicitation of offers to purchase Notes as agent of the Company or any of your obligation to purchase Notes as principal pursuant to any Terms Agreement or otherwise, the respective agreements, representations, warranties, indemnities and other statements of the Company or its officers and of any of you set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of you or the Company or any of the officers, directors or controlling persons referred to in Section 6 hereof, and will survive delivery of and payment for the Notes for a period extending to the earlier of (i) three years from the corresponding Settlement Date for such Notes or (ii) the expiration of any applicable statute of limitations governing such solicitation or purchase of Notes. 9. Notices. All communications hereunder will be in writing and effective only on receipt, and, if sent to an Agent, will be mailed, delivered or telegraphed and confirmed to such Agent, at the address specified in Schedule I hereto; or, if sent to the Company, will be mailed, delivered or telegraphed and confirmed to it at Citigroup Global Markets Holdings Inc., 388 Greenwich Street, New York, New York 10013, Attention: Treasurer. 10. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers and directors and controlling persons referred to in Section 6 hereof. Nothing expressed or implied in this Agreement or any Terms Agreement is intended or shall be construed to give any person, firm or corporation, other than the parties hereto and their respective successors and the controlling persons and officers and directors referred to in Section 6 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any Terms Agreement or any provision herein or therein contained. This Agreement and any Terms Agreement and all conditions and provisions hereof and thereof except to the extent provided for in Section 5 hereof are intended to be for the sole and exclusive benefit of the parties hereto and their respective successors and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No Purchaser of Notes shall be deemed to be a successor by reason merely of such purchase. This Agreement and the rights and obligations of any of you hereunder may not be assigned without the prior written consent of the Company. 11. Waivers, Etc. Neither any failure nor delay on the part of any party to exercise any right, remedy, power or privilege under this Agreement (singly and collectively referred to as a "Right") shall operate as a waiver of such Right, nor shall any single or partial exercise of any Right preclude any other or further exercise of any Right, nor shall any waiver of any Right with respect to any occurrence be construed as a waiver of any Right with respect to any other occurrence. 19 12. Applicable Law. This Agreement will be governed by and construed in accordance with the laws of the State of New York. 20 If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement between the Company and you. Very truly yours, CITIGROUP GLOBAL MARKETS HOLDINGS INC. By: _____________________________________ Name: Title: The foregoing Agreement is hereby confirmed and accepted as of the date hereof: CITIGROUP GLOBAL MARKETS INC. By: ___________________________________ Name: Title: CITIGROUP GLOBAL MARKETS LIMITED By: ___________________________________ Name: Title: 21 EXHIBIT A CITIGROUP GLOBAL MARKETS HOLDINGS INC. Medium-Term Notes, Series D and E Administrative Procedures ___________, 20__ The Medium-Term Notes, Series D (the "Series D Notes") and Medium-Term Notes, Series E (the "Series E Notes"; and together with the Series D Notes, the "Notes") of Citigroup Global Markets Holdings Inc. (the "Company") are to be offered on a continuing basis. Citigroup Global Markets Inc. has agreed, as agent, to solicit purchases of Notes issued in fully registered form. (The term "Agent" when used in these Administrative Procedures, means Citigroup Global Markets Inc.) The Agent will not be obligated to purchase Notes for its own account. The Notes are being sold pursuant to a Global Selling Agency Agreement between the Company and the agents named therein (including the Agent) dated the date hereof (the "Agency Agreement"). The Notes have been registered with the Securities and Exchange Commission (the "Commission"). JPMorgan Chase Bank, as successor trustee, is the trustee under the Indenture, dated as of December 1, 1988, as amended from time to time, under which the Series D Notes will be issued (the "Senior Debt Indenture"). Deutsche Bank Trust Company Americas is the trustee (together with JPMorgan Chase Bank, the "Trustees") under the Indenture, dated as of December 1, 1988, as amended from time to time, under which the Series E Notes will be issued (the "Subordinated Debt Indenture"; and together with the Senior Debt Indenture, the "Indentures"). The Series D Notes will constitute part of the senior debt of the Company and will rank equally with all other unsecured and unsubordinated debt of the Company. The Series E Notes will be subordinate and junior in the right of payment to all Senior Indebtedness of the Company, to the extent and in the manner set forth in the Subordinated Debt Indenture. The Agency Agreement provides that Notes may also be purchased by the Agent acting solely as principal and not as agent. In the event of any such purchase, the functions of both the Agent and the beneficial owner under the administrative procedures set forth below shall be performed by the Agent acting solely as principal, unless otherwise agreed to between the Company and the Agent acting as principal. Each Note will be represented by either a Global Security (as defined hereinafter) or a certificate delivered to the Holder thereof or a Person designated by such Holder (a "Certificated Note"). Each Global Security representing Series D Notes will be delivered to Citibank, N.A., and each Global Security representing Series E Notes will be delivered to Deutsche Bank Trust Company Americas, each acting as agent for The Depository Trust Company or any successor depository selected by the Company ("DTC", which term, as used herein, includes any successor depository selected by the Company), and will be recorded in the book-entry system maintained by DTC (a "Book-Entry Note"). An owner of a Book-Entry Note will not be entitled to receive a certificate representing such Note. A-1 The procedures to be followed during, and the specific terms of, the solicitation of orders by the Agent and the sale as a result thereof by the Company are explained below. Administrative and record-keeping responsibilities will be handled for the Company by its Treasury Department. The Company will advise the Agent and the Trustees in writing of those persons handling administrative responsibilities with whom the Agent and the Trustees are to communicate regarding orders to purchase Notes and the details of their delivery. The term "Trustees" as used in these procedures means the Trustees and any other agents appointed by the Trustees or the Company. Administrative procedures and specific terms of the offering are explained below. Book-Entry Notes will be issued in accordance with the administrative procedures set forth in Part I hereof, as adjusted in accordance with changes in DTC's operating requirements, and Certificated Notes will be issued in accordance with the administrative procedures set forth in Part II hereof. Unless otherwise defined herein, terms defined in the Indentures the Notes or the Prospectus Supplement relating to the Notes shall be used herein as therein defined. Notes for which interest is calculated on the basis of a fixed interest rate, which may be zero, are referred to herein as "Fixed Rate Notes". Notes for which interest is calculated on the basis of a floating interest rate are referred to herein as "Floating Rate Notes". To the extent the procedures set forth below conflict with the provisions of the Notes, the Indentures, DTC's operating requirements or the Agency Agreement, the relevant provisions of the Notes, the Indentures, DTC's operating requirements and the Agency Agreement shall control. PART I Administrative Procedures for Book-Entry Notes In connection with the qualification of the Book-Entry Notes for eligibility in the book-entry system maintained by DTC, Citibank, N.A. and Deutsche Bank Trust Company Americas (together, the "DTC Agents") will perform the custodial, document control and administrative functions described below for the Series D Notes and the Series E Notes, respectively. Citibank, N.A. will perform such functions in accordance with its respective obligations under a Letter of Representations from the Company and Citibank, N.A. to DTC dated as of the date hereof and a Medium-Term Note Certificate Agreement between Citibank, N.A. and DTC, dated as of October 31, 1988 and as amended to date, and its obligations as a participant in DTC, including DTC's Same-Day Funds Settlement system ("SDFS"). Deutsche Bank Trust Company Americas will perform such functions in accordance with its respective obligations under a Letter of Representations from the Company and Deutsche Bank Trust Company Americas to DTC dated as of the date hereof and a Certificate Agreement between DTC and Deutsche Bank Trust Company Americas, dated as of December 5, 1997 and as amended to date, and its obligations as a participant in DTC, including DTC's SDFS. A-2 Issuance: On any date of settlement (as defined under "Settlement" below) for one or more Book-Entry Notes, the Company will issue a single global security in fully registered form without coupons (a "Global Security") representing up to U.S $500,000,000 principal amount of all such Book-Entry Notes of the same Series that have the same Original Issue Date, Original Issue Discount provisions, if any, Interest Payment Dates, Regular Record Dates, Interest Payment Period, redemption repayment and extension provisions, if any, Stated Maturity, and, in the case of Fixed Rate Notes, interest rate, and amortization schedule, if any, or, in the case of Floating Rate Notes, Initial Interest Rate, Base Rate, Index Maturity, Interest Reset Period, Interest Reset Dates, Spread and/or Spread Multiplier, if any, Minimum Interest Rate, if any, and Maximum Interest Rate, if any and, in each case, any other relevant terms (collectively, the "Terms"). Each Global Security will be dated and issued as of the date of its settlement. Each Global Security will bear an Original Issue Date, which will be (i) with respect to an original Global Security (or any portion thereof), the Original Issue Date specified in such Global Security and (ii) following a consolidation of Global Securities, with respect to the Global Security resulting from such consolidation, the most recent Interest Payment Date to which interest has been paid or duly provided for on the predecessor Global Securities, regardless of the date of authentication of such resulting Global Security. No Global Security will represent (i) both Fixed Rate and Floating Rate Book-Entry Notes or (ii) any Certificated Note or (iii) both Series D Notes and Series E Notes. Identification Numbers: The Company has arranged with the CUSIP Service Bureau of Standard & Poor's Ratings Services (the "CUSIP Service Bureau") for the reservation of two Series of CUSIP numbers, one for Series D Notes and one for Series E Notes, each of which series consists of approximately 900 CUSIP numbers and relates to Global Securities representing Book-Entry Notes and book-entry medium-term notes issued by the Company with other Series designations. The DTC Agents, the Company and DTC have obtained from the CUSIP Service Bureau a written list of such reserved CUSIP numbers. The DTC Agents will assign CUSIP numbers to Global Securities as described below under Settlement Procedure "B". DTC will notify the CUSIP Service Bureau periodically of the CUSIP numbers that the DTC Agents has assigned to Global Securities. Each DTC Agent will notify the Company at any time when fewer than 100 of the reserved CUSIP numbers remain unassigned to Global Securities, A-3 and, if it deems necessary, the Company will reserve additional CUSIP numbers for assignment to Global Securities. Upon obtaining such additional CUSIP numbers, the Company shall deliver a list of such additional CUSIP numbers to either or both DTC Agents, as needed, and to DTC. Registration: Global Securities will be issued only in fully registered form without coupons. Each Global Security will be registered in the name of CEDE & CO., as nominee for DTC, on the securities register for the Notes (the "Securities Register") maintained under the Indenture. The beneficial owner of a Book-Entry Note (or one or more indirect participants in DTC designated by such owner) will designate one or more participants in DTC (with respect to such Book-Entry Note, the "Participants") to act as agent or agents for such owner in connection with the book-entry system maintained by DTC, and DTC will record in book-entry form, in accordance with instructions provided by such Participants, a credit balance with respect to such beneficial owner in such Book-Entry Note in the account of such Participants. The ownership interest of such beneficial owner (or such participant) in such Book-Entry Note will be recorded through the records of such Participants or through the separate records of such Participants and one or more indirect participants in DTC. Transfers: Transfers of a Book-Entry Note will be accomplished by book entries made by DTC and, in turn, by Participants (and in certain cases, one or more indirect participants in DTC) acting on behalf of beneficial transferors and transferees of such Note. Exchanges: Each DTC Agent may deliver to DTC and the CUSIP Service Bureau at any time a written notice of consolidation (a copy of which shall be attached to the resulting Global Security described below) specifying (i) the CUSIP numbers of two or more outstanding Global Securities that represent (A) Fixed Rate Book-Entry Notes of the same Series and having the same Terms and for which interest has been paid to the same date or (B) Floating Rate Book-Entry Notes of the same Series and having the same Terms and for which interest has been paid to the same date, (ii) a date, occurring at least thirty days after such written notice is delivered and at least thirty days before the next Interest Payment Date for such Book-Entry Notes, on which such Global Securities shall be exchanged for a single replacement Global Security and (iii) a new CUSIP number to be assigned to such replacement Global Security. Upon receipt of such a notice, DTC will send to its participants (including the DTC Agent for such replacement Global Security) a written reorganization notice to the effect that such exchange will occur on such date. Prior to the specified exchange date, such DTC Agent will deliver to the CUSIP Service Bureau a written notice setting forth such exchange date and A-4 such new CUSIP number and stating that, as of such exchange date, the CUSIP numbers of the Global Securities to be exchanged will no longer be valid. On the specified exchange date, such DTC Agent will exchange such Global Securities for a single Global Security bearing the new CUSIP number and a new Original Issue Date, which shall be the last date to which interest has been paid on the underlying Book-Entry Notes, and the CUSIP numbers of the exchanged Global Securities will, in accordance with CUSIP Service Bureau procedures, be canceled and not immediately reassigned. Upon such exchange, the DTC Agent will mark the predecessor Global Security "canceled", make appropriate entries in the DTC Agent's records and destroy such canceled Global Security in accordance with the terms of the Indenture and deliver a certificate of destruction to the Company. Notwithstanding the foregoing, if the Global Securities to be exchanged exceed U.S $500,000,000 in aggregate principal amount, one Global Security will be authenticated and issued to represent each U.S. $500,000,000 of principal amount of the exchanged Global Securities and an additional Global Security will be authenticated and issued to represent any remaining principal amount of such Global Securities (see "Denominations" below). Maturities: Each Book-Entry Note will mature on a date more than nine months after the issue date for such Note. A Floating Rate Book-Entry Note will mature only on an Interest Payment Date for such Note. Any Note denominated in Japanese yen will mature on a date not less than one year from the Original Issue Date (as defined below) for such Note. Any Note denominated in Pounds Sterling will mature on a date not less than one year, nor more than five years, after its Original Issue Date. Denominations: Book-Entry Notes will be issued in principal amounts of U.S.$1,000 or any amount in excess thereof that is an integral multiple of U.S.$1,000. If Book-Entry Notes are denominated in a Specified Currency other than U.S. dollars, the denominations of such Notes will be determined pursuant to the provisions of the applicable Pricing Supplement. Global Securities will be denominated in principal amounts not in excess of U.S.$500,000,000 (or the equivalent thereof). If one or more Book-Entry Notes having an aggregate principal amount in excess of U.S.$500,000,000 (or the equivalent thereof) would, but for the preceding sentence, be represented by a single Global Security, then one Global Security will be authenticated and issued to represent each U.S.$500,000,000 principal amount (or the equivalent thereof) of such Book-Entry Note or Notes and an additional Global Security will be authenticated and issued to represent any remaining principal amount of such Book-Entry Note or Notes. In such a case, each of the Global Securities representing such Book-Entry Note or Notes shall be assigned the A-5 same CUSIP number. Notice of Redemption Each DTC Agent will with respect to the Notes for Dates: which it is Trustee, give notice to the DTC prior to each Redemption Date (as specified in the Note) if any at the time and in the manner set forth in the Letter. Interest: General. Unless otherwise indicated in the applicable Pricing Supplement, interest, if any, on each Book-Entry Note will accrue from the Original Issue Date (or such other date on which interest otherwise begins to accrue (if different than the Original Issue Date) of the Global Security representing such Book-Entry Note for the first interest period or the last date to which interest has been paid, if any, for each subsequent interest period, on the Global Security representing such Book-Entry Note, and will be calculated and paid in the manner and on the Interest Payment Dates described in such Book-Entry Note and in the Prospectus (as defined in the Agency Agreement), as supplemented by the applicable Pricing Supplement. Each payment of interest on a Book-Entry Note will include interest accrued to but excluding the Interest Payment Date; provided that in the case of Floating Rate Notes that reset daily or weekly, interest payments will include interest accrued to but excluding the next preceding Regular Record Date, except that at stated Maturity, the interest payable will include interest accrued to, but excluding, the Maturity. Interest payable at the Maturity of a Book-Entry Note will be payable to the Person to whom the principal of such Note is payable. Standard & Poor's Ratings Services will use the information received in the pending deposit message described under Settlement Procedure "C" below in order to include the amount of any interest payable and certain other information regarding the related Global Security in the appropriate (daily or weekly) bond report published by Standard & Poor's Ratings Services. Regular Record Dates. The Regular Record Date with respect to any Interest Payment Date for a Floating-Rate Note, Fixed Rate Note or Indexed Rate Note shall be the date (whether or not a Business Day) fifteen calendar days immediately preceding such Interest Payment Date. Payments of Principal Payment of Interest Only. Promptly after each Regular and Interest: Record Date, the DTC Agent for each Global Security will deliver to the Company and DTC a written notice setting forth, by CUSIP number, the amount of interest to be paid on each Global Security on the following Interest Payment Date (other than an Interest Payment Date coinciding with Maturity) and the total of such amounts. DTC will confirm the amount payable on each Global Security on such Interest Payment Date by reference to the appropriate (daily or weekly) bond A-6 reports published by Standard & Poor's Ratings Services. The Company will pay to the Trustee for the Notes represented by such Global Security the total amount of interest due on such Interest Payment Date (other than at Maturity), and such Trustee will pay such amount to DTC, at the times and in the manner set forth below under "Manner of Payment". If any Interest Payment Date for a Book-Entry Note is not a Business Day, the payment due on such day shall be made on the next succeeding Business Day and no interest shall accrue as a result of such delayed payment. Payments at Maturity or Upon Redemption. On or about the first Business Day of each month, each DTC Agent will, with respect to the Global Securities for which it acts as DTC Agent, deliver to the Company, DTC and the applicable Trustee a written list of principal and interest to be paid on each Global Security maturing either at Maturity or an a Redemption Date in the following month. The DTC Agent for each Global Security, the Company and DTC will confirm the amounts of such principal and interest payments with respect to each such Global Security on or about the fifth Business Day preceding the Maturity date or Redemption Date of such Global Security. On or before such Maturity or Redemption, the Company will pay to the Trustee for the Notes represented by such Global Security the principal amount of such Global Security, together with interest due at such Maturity. Such Trustee will pay such amount to DTC at the times and in the manner set forth below under "Manner of Payment". If any Maturity of a Global Security representing Book-Entry Notes is not a Business Day, the payment due on such day shall be made on the next succeeding Business Day and no interest shall accrue on such payment for the period from and after such Maturity Date or Redemption Date. Promptly after payment to DTC of the principal and interest due on the Maturity Date or Redemption Date of such Global Security, the Trustee for such Global Security will cancel and destroy such Global Security in accordance with the applicable Indenture and deliver a certificate of destruction to the Company. Manner of Payment. The total amount of any principal and interest due on Global Securities on any Interest Payment Date or at Maturity or upon redemption shall be paid by the Company to the Trustee for the Notes represented by such Global Security in immediately available funds no later than 9:30 A.M. (New York City time) on such date. The Company will make such payment on such Global Securities by instructing such Trustee to withdraw funds from an account maintained by the Company with the DTC Agent for the Notes represented by such Global Securities. The Company will confirm any such instructions in writing to such Trustee. Prior to 10 A.M. (New York City time) on the date of Maturity or as soon as A-7 possible thereafter, such Trustee will pay by separate wire transfer (using Fedwire message entry instructions in a form previously specified by DTC) to an account at the Federal Reserve Bank of New York previously specified by DTC, in funds available for immediate use by DTC, each payment of principal (together with interest thereon) due on a Global Security on such Maturity Date or Redemption Date. On each Interest Payment Date (other than at Maturity), interest payments shall be made to DTC, in same day funds, in accordance with existing arrangements between the relevant DTC Agent and DTC. On each such date, DTC will pay, in accordance with its SDFS operating procedures then in effect, such amounts in funds available for immediate use to the respective Participants in whose names the Book-Entry Notes represented by such Global Securities are recorded in the book-entry system maintained by DTC. None of the Company (as issuer or as paying agent), the Trustee or such DTC Agent shall have any direct responsibility or liability for the payment by DTC to such Participants of the principal of and interest on the Book-Entry Notes. If an issue of Notes is denominated in a currency other than the U.S. dollar, the Company will make payments of principal and any interest in the currency in which the Notes are denominated (the "foreign currency") or in U.S. dollars. DTC has elected to have all such payments of principal and interest in U.S. dollars unless notified by any of its Participants through which an interest in the Notes is held that it elects, in accordance with and to the extent permitted by the applicable Pricing Supplement and the Note, to receive such payment of principal or interest in the foreign currency. On or prior to the third Business Day after the record date for payment of interest and twelve days prior to the date for payment of principal, such Participant shall notify DTC of (i) its election to receive all, or the specified portion, of such payment in the foreign currency and (ii) its instructions for wire transfer of such payment to a foreign currency account. DTC will notify the applicable Trustee on or prior to the fifth Business Day after the record date for payment of interest and ten days prior to the date for payment of principal of the portion of such payment to be received in the foreign currency and the applicable wire transfer instructions, and the applicable Trustee shall use such instructions to pay the Participants directly. If DTC does not so notify the applicable Trustee, it is understood that only U.S. dollar payments are to be made. The applicable Trustee shall notify DTC on or prior to the second Business Day prior to payment date of the conversion rate to be used and the resulting U.S. dollar amount to be paid per U.S.$1,000 face amount. In the event that the applicable Trustee's quotation to convert the foreign currency into U.S. dollars is not available, the applicable Trustee shall notify DTC's Dividend A-8 Department that the entire payment is to be made in the foreign currency. In such event, DTC will ask its Participants for payment instructions and forward such instructions to the applicable Trustee and the applicable Trustee shall use such instructions to pay the Participants directly. Withholding Taxes. The amount of any taxes required under applicable law to be withheld from any interest payment on a Book-Entry Note will be determined and withheld by the Participant, indirect participant in DTC or other Person responsible for forwarding payments and materials directly to the beneficial owner of such Note. Procedures upon Company Notice to Trustee regarding Exercise of Company's Exercise of Optional Reset. Not less than 45 or more than 60 days Optional Reset or before an Optional Reset Date as set forth in a Optional Extension of Book-Entry Note, the Company will notify the Trustee Maturity: for such Book-Entry Note whether it is exercising its option to reset the interest rate or Spread or Spread Multiplier, as the case may be, for such Book-Entry Note, and if so, (i) the new interest rate or Spread or Spread Multiplier, as the case may be, for such Book-Entry Note during the period from such Optional Reset Date to the next Optional Reset Date as set forth in such Book-Entry Note or, if there is no such next Optional Reset Date, to the Stated Maturity of such Book-Entry Note (the "Subsequent Interest Period"); and (ii) the provisions, if any, for redemption of such Book-Entry Note during such Subsequent Interest Period, including the date or dates on which or the period or periods during which such redemption may occur during such Subsequent Interest Period. Company Notice to Trustee regarding Exercise of Optional Extension of Maturity. If the Company elects to exercise an option, as set forth in a Book-Entry Note, to extend the Stated Maturity of such Note, it will so notify the Trustee for such Book-Entry Note no less than 45 or more than 60 days before the Stated Maturity of such Book-Entry Note, and will further indicate (i) the new Stated Maturity; (ii) the interest rate or Spread or Spread Multiplier, as the case may be, applicable to the extension period; and (iii) the provisions, if any, for redemption of such Book-Entry Note during such extension period, including the date or dates on which or the period or periods during which such redemption may occur during such extension period. Trustee Notice to DTC regarding Company's Exercise of Optional Extension or Reset. Upon receipt of notice from the Company regarding the Company's exercise of either an optional extension of maturity or an optional reset, the Trustee for the Book-Entry Note will hand-deliver a notice to DTC not less than 40 days before the Optional Reset Date (in which case a "Reset Notice") or the Stated A-9 Maturity (in which case an "Extension Notice"), as the case may be, which Reset Notice or Extension Notice shall identify such Book-Entry Note by CUSIP number and shall contain the information required by the terms of the Book-Entry Note. Trustee Notice to Company regarding Option to be Repaid. If, after receipt of either a Reset Notice or an Extension Notice, DTC exercises the option for repayment by tendering the Global Security representing the Book-Entry Note to be repaid as set forth in such Note, the Trustee for such Book-Entry Note shall give notice to the Company not less than 22 days before the Optional Reset Date or the old Stated Maturity, as the case may be, of the principal amount of Book-Entry Notes to be repaid on such Optional Reset Date or old Stated Maturity, as the case may be. Company Notice regarding New Interest Rate or New Spread or Spread Multiplier. If the Company elects to revoke the interest rate or Spread or Spread Multiplier provided for in the Reset Notice and establish a higher interest rate or Spread or Spread Multiplier for an Optional Reset Period or extension period, as the case may be, it shall, not less than 20 days before such Optional Reset Date or old Stated Maturity, so notify the Trustee for the affected Book-Entry Note. The Trustee will immediately thereafter notify DTC of the new interest rate or Spread or Spread Multiplier applicable to such Book-Entry Note. Trustee Notice to Company regarding DTC Revocation of Option to be Repaid. If, after DTC has tendered any Book-Entry Notes for repayment pursuant to an Extension Notice or an Optional Reset Notice, DTC then revokes such tender for repayment, the Trustee for such Book-Entry Notes shall give notice to the Company not less than five days prior to the Stated Maturity or Optional Reset Date, as the case may be, of such revocation and of the principal amount of Book-Entry Notes for which tender for repayment has been revoked. Deposit of Repayment Price. On or before any old Stated Maturity where the Maturity has been extended, and on or before any Optional Reset Date, the Company shall deposit with such Trustee an amount of money sufficient to pay the principal amount, plus interest accrued to such old Stated Maturity or Optional Reset Date, as the case may be, for all the Book-Entry Notes or portions thereof for which such Trustee serves as Trustee and which are to be repaid on such old Stated Maturity or Optional Reset Date, as the case may be. Such Trustee will use such money to repay such Book-Entry Notes pursuant to the terms set forth in such Notes. A-10 Procedures upon Company Company Notice to Trustee regarding Company's Notice to Trustee Exercise of Optional Redemption. At least 45 days regarding Company's prior to the date on which it intends to redeem a Exercise of Optional Book-Entry Note, the Company will notify the Trustee Redemption: for such Book-Entry Note that it is exercising such option with respect to such Book-Entry Note on such date. Trustee Notice to DTC regarding Company's Exercise of Optional Redemption. After receipt of notice that the Company is exercising its option to redeem a Book-Entry Note, the Trustee will, at least 30 days before the redemption date for such Book-Entry Note, hand deliver to DTC a notice identifying such Book-Entry Note by CUSIP number and informing DTC of the Company's exercise of such option with respect to such Book-Entry Note. Deposit of Redemption Price. On or before any redemption date, the Company shall deposit with such Trustee an amount of money sufficient to pay the redemption price, plus interest accrued to such redemption date, for all the Book-Entry Notes or portions thereof for which such Trustee serves as Trustee and which are to be repaid on such redemption date. Such Trustee will use such money to repay such Book-Entry Notes pursuant to the terms set forth in such Notes. Payments of Principal Trustee Notice to Company of Option to be Repaid. and Interest Upon Upon receipt of notice of exercise of the option for Exercise of Optional repayment and the Global Securities representing the Repayment (Except Book-Entry Notes so to be repaid as set forth in such Pursuant to Company's Notes, the Trustee for such Book-Entry Notes shall Exercise of Optional (unless such notice was received pursuant to the Reset or Optional Company's exercise of an optional reset or an Extension): optional extension of maturity, in each of which cases the relevant procedures set forth above are to be followed) give notice to the Company not less than 20 days prior to each Optional Repayment Date of such Optional Repayment Date and of the principal amount of Book-Entry Notes to be repaid on such Optional Repayment Date. Deposit of Repayment Price. On or prior to any Optional Repayment Date, the Company shall deposit with such Trustee an amount of money sufficient to pay the optional repayment price, and accrued interest thereon to such date, of all the Book-Entry Notes or portions thereof which are to be repaid on such date. Such Trustee will use such money to repay such Book-Entry Notes pursuant to the terms set forth in such Notes. A-11 Procedure for Rate The Company and the Agent will discuss from time to Setting and Posting: time the aggregate principal amount of, the issuance price of, and the interest rates to be borne by, Book-Entry Notes that may be sold as a result of the solicitation of orders by the Agent. If the Company decides to set prices of, and rates borne by, any Book-Entry Notes in respect of which the Agent is to solicit orders (the setting of such prices and rates to be referred to herein as "posting") or if the Company decides to change prices or rates previously posted by it, it will promptly advise the Agent of the prices and rates to be posted. Acceptance and Unless otherwise instructed by the Company, the Agent Rejection of Orders: will advise the Company promptly by telephone of all orders to purchase Book-Entry Notes received by the Agent, other than those rejected by it in whole or in part in the reasonable exercise of its discretion. Unless otherwise agreed by the Company and the Agent, the Company has the right to accept orders to purchase Book-Entry Notes and may reject any such orders in whole or in part. Preparation of Pricing If any order to purchase a Book-Entry Note is Supplement: accepted by or on behalf of the Company, the Company will prepare a pricing supplement (a "Pricing Supplement") reflecting the terms of such Book-Entry Note, will file ten copies thereof with the Commission in accordance with the applicable paragraph of Rule 424(b) under the Act, will deliver such number of copies thereof to the Agent as the Agent shall request and will, on the Agent's behalf, file five copies of such Pricing Supplement with the National Association of Securities Dealers, Inc. (the "NASD"). The Agent will cause a Prospectus and such Pricing Supplement to be delivered to the purchaser of such Book-Entry Note. In each instance that a Pricing Supplement is prepared, the Agent will affix the Pricing Supplement to Prospectuses prior to their use. Outdated Pricing Supplements and the Prospectuses to which they are attached (other than those retained for files), will be destroyed. Copies of the appropriate number of Pricing Supplements shall be delivered to the Agent at the following address by 11:00 a.m., New York City time, on the Business Day following the acceptance of an offer by or on behalf of the Company: to Citigroup Global Markets Inc., Prospectus Department, Brooklyn Army Terminal, 140 58th Street, 8th Floor, Brooklyn, N.Y. 11220, with a copy to Citigroup Global Markets Inc., 388 Greenwich Street, New York, New York 10013, Attention: MTN Program Manager. A-12 Suspension of Subject to the Company's representations, warranties Solicitation; Amendment and covenants contained in the Agency Agreement, the or Supplement: Company may instruct the Agent to suspend at any time, for any period of time or permanently, the solicitation of orders to purchase Book-Entry Notes. Upon receipt of such instructions, the Agent will forthwith suspend solicitation until such time as the Company has advised them that such solicitation may be resumed. In the event that at the time the Company suspends solicitation of purchases there shall be any orders outstanding for settlement, the Company will promptly advise the Agent, the Trustees and the DTC Agents whether such orders may be settled and whether copies of the Prospectus as in effect at the time of the suspension, together with the appropriate Pricing Supplement, may be delivered in connection with the settlement of such orders. The Company will have the sole responsibility for such decision and for any arrangements that may be made in the event that the Company determines that such orders may not be settled or that copies of such Prospectus may not be so delivered. Delivery of Prospectus: A copy of the Prospectus and a Pricing Supplement relating to a Book-Entry Note must accompany or precede the earliest of any written offer of such Book-Entry Note, confirmation of the purchase of such Book-Entry Note and payment for such Book-Entry Note by its purchaser. If notice of a change in the terms of the Book-Entry Notes is received by the Agent between the time an order for a Book-Entry Note is placed and the time written confirmation thereof is sent by the Agent to a customer or his agent, such confirmation shall be accompanied by a Prospectus and Pricing Supplement setting forth the terms in effect when the order was placed. The Agent will deliver a Prospectus and Pricing Supplement as herein described with respect to each Book-Entry Note sold by it. The Company will make such delivery if such Book-Entry Note is sold directly by the Company to a purchaser (other than the Agent). Confirmation: For each order to purchase a Book-Entry Note solicited by the Agent and accepted by or on behalf of the Company, the Agent will issue a confirmation to the purchaser, with a copy to the Company, setting forth the details set forth above and delivery and payment instructions. A-13 Settlement: The receipt by the Company of immediately available funds in payment for a Book-Entry Note and the authentication and issuance of the Global Security representing such Book-Entry Note shall constitute "settlement" with respect to such Book-Entry Note, and the date of such settlement, the "Settlement Date". All orders accepted by the Company will be settled on the third Business Day next succeeding the date of acceptance pursuant to the timetable for settlement set forth below unless the Company and the purchaser agree to settlement on another day which shall be no earlier than the Business Day the date of sale. Settlement Procedures: Settlement Procedures with regard to each Book-Entry Note sold by the Company to or through the Agent, except pursuant to a Terms Agreement, shall be as follows: A. The Agent will advise the Company by telephone (or by facsimile or other acceptable written means) that such Note is a Book-Entry Note and of the following settlement information: 1. Principal or face amount. 2. Series. 3. Stated Maturity. 4. In the case of a Fixed Rate Book-Entry Note, the interest rate and reset, redemption, repayment and extension provisions (if any) or, in the case of a Floating Rate Book-Entry Note, the Base Rate, Initial Interest Rate (if known at such time) Interest Reset Period, Interest Reset Dates, Index Maturity, Spread and/or Spread Multiplier (if any), Minimum Interest Rate (if any), Maximum Interest Rate (if any) and reset, redemption, repayment and extension provisions (if any). 5. Interest Payment Dates and the Interest Payment Period. 6. Amortization provisions, if any. 7. Settlement date and Issue Date, if different. 8. Specified currency. A-14 9. Denominated currency, Indexed Currency, Base Exchange Rate, and the Determination Date, if applicable. 10. Price. 11. Agent's commission, determined as provided in the Agency Agreement. 12. Whether, in the case of Series D Notes, the Notes will have a Survivor's Option. 13. Whether such Book-Entry Note is an OID Note and, if so, the total amount of OID, the yield to maturity and the initial accrual period OID. 14. Any other terms necessary to describe the Book-Entry Note. B. The Company will advise the relevant DTC Agent by telephone (confirmed in writing at any time on the same date), written telecommunication or electronic transmission of the information set forth in Settlement Procedure "A" above. Each such communication by the Company shall constitute a representation and warranty by the Company to the DTC Agent for such Note, the Trustee for such Note and the Agent that (i) such Note is then, and at the time of issuance and sale thereof will be, duly authorized for issuance and sale by the Company and (ii) such Note, and the Global Security representing such Note, will conform with the terms of the Indenture for such Note. The DTC Agent will then assign a CUSIP number to the Global Security representing such Book-Entry Note and notify the Agent and the Company by telephone (confirmed in writing at any time on the same date), written telecommunication or electronic transmission of such CUSIP number as soon as practicable. C. Such DTC Agent will enter a pending deposit message through DTC's Participant Terminal System providing the following settlement information to DTC, Standard & Poor's Ratings Services, Interactive Data Corporation, the Agent and, upon request, the Trustee for such Notes: 1. The information set forth in Settlement Procedure "A". 2. Identification as a Fixed Rate Book-Entry Note or a A-15 Floating Rate Book-Entry Note. 3. The Initial Interest Payment Date for such Book-Entry Note, number of days by which such date succeeds the related Regular Record Date and amount of interest payable on such Interest Payment Date. 4. The Interest Payment Period. 5. The CUSIP number of the Global Security representing such Book-Entry Note. 6. The participant account numbers maintained by DTC on behalf of the Trustee and the Agent. 7. Whether such Global Security will represent any other Book-Entry Note (to the extent known at such time). D. To the extent the Company has not already done so, the Company will deliver to the Trustee for such Notes a Global Security in a form that has been approved by the Company, the Agent and the Trustee. E. The Trustee will complete such Book-Entry Note, stamp the appropriate legend, as instructed by DTC, if not already set forth thereon, and authenticate the Global Security representing such Book-Entry Note. F. DTC will credit such Book-Entry Note to such DTC Agent's participant account at DTC. G. Such DTC Agent will enter an SDFS deliver order through DTC's Participant Terminal System instructing DTC to (i) debit such Book-Entry Note to such DTC Agent's participant account and credit such Book-Entry Note to the Agent's participant account and (ii) debit the Agent's settlement account and credit such DTC Agent's settlement account for an amount equal to the price of such Book-Entry Note less the Agent's commission. The entry of such a deliver order shall constitute a representation and warranty by such DTC Agent to DTC that (i) the Global Security representing such Book-Entry Note has been issued and authenticated and (ii) such DTC Agent is holding such Global Security pursuant to the Medium Term Note Certificate Agreement between such DTC Agent and DTC. A-16 H. Unless the Agent is purchasing such Note as principal, the Agent will enter an SDFS deliver order through DTC's Participant Terminal System instructing DTC (i) to debit such Book-Entry Note to the Agent's participant account and credit such Book-Entry Note to the participant accounts of the Participants with respect to such Book-Entry Note and (ii) to debit the settlement accounts of such Participants and credit the settlement account of the Agent for an amount equal to the price of such Book-Entry Note. I. Transfers of funds in accordance with SDFS deliver orders described in Settlement Procedures "G" and "H" will be settled in accordance with SDFS operating procedures in effect on the settlement date. J. Such DTC Agent will, upon receipt of funds from the Agent in accordance with Settlement Procedure "G", credit to an account of the Company maintained at such DTC Agent funds available for immediate use in the amount transferred to such DTC Agent in accordance with Settlement Procedure "G". K. Unless the Agent is purchasing such Book-Entry Note as principal, the Agent will confirm the purchase of such Book-Entry Note to the purchaser either by transmitting to the Participants with respect to such Book-Entry Note a confirmation order or orders through DTC's institutional delivery system or by mailing a written confirmation to such purchaser. L. Monthly, each DTC Agent will send to the Company a statement setting forth the principal amount of Registered Notes Outstanding as of the date of such statement and setting forth a brief description of any sales of which the Company has advised such DTC Agent but which have not yet been settled. A-17 Settlement Procedures For sales by the Company of Book-Entry Notes Timetable: solicited by the Agent and accepted by the Company (except pursuant to a Terms Agreement) for settlement on the first Business Day after the sale date, Settlement Procedures "A" through "K" set forth above shall be completed as soon as possible but not later than the respective times (New York City time) set forth below:
Settlement Procedure Time - ----------- -------------------------------------- A 11:00 A.M. on the sale date B 12:00 Noon on the sale date C 2:00 P.M. on the sale date D 3:00 P.M. on the day before settlement E 9:00 A.M. on settlement date F 10:00 A.M. on settlement date G-H 2:00 P.M. on settlement date I 4:45 P.M. on settlement date J-K 5:00 P.M. on settlement date
If a sale is to be settled more than one Business Day after the sale date, Settlement Procedures "A", "B" and "C" shall be completed as soon as practicable but no later than 11:00 A.M. 12:00 Noon and 2:00 P.M. respectively on the first Business Day after the sale date. If the Initial Interest Rate for a Floating Rate Book-Entry Note has not been determined at the time that Settlement Procedure "A" is completed, Settlement Procedures "B" and "C" shall be completed as soon as such rate has been determined but no later than 12:00 Noon and 2:00 P.M., respectively, on the Business Day before the settlement date. Settlement Procedure "I" is subject to extension in accordance with any extension of Fedwire closing deadlines and in the other events specified in SDFS operating procedures in effect on the settlement date. If settlement of a Book-Entry Note is rescheduled or canceled, the DTC Agent for such Book-Entry Notes after receiving notice from the Company or the Agent, will deliver to DTC, through DTC's Participant Terminal System, a cancellation message to such effect by no later than 2:00 P.M. on the Business Day immediately preceding the scheduled settlement date. Failure to Settle: If settlement of a Book-Entry Note is rescheduled and the DTC Agent for such Note has not entered an SDFS deliver order with respect to a Book-Entry Note pursuant to Settlement Procedure "G", after receiving notice from the Company or the Agent, such DTC Agent shall deliver to DTC, through DTC's Participant Terminal A-18 System, as soon as practicable, a withdrawal message instructing DTC to debit such Book-Entry Note to such DTC Agent's participant account. DTC will process the withdrawal message, provided that such DTC Agent's participant account contains a principal amount of the Global Security representing such Book-Entry Note that is at least equal to the principal amount to be debited. If a withdrawal message is processed with respect to all the Book-Entry Notes represented by a Global Security, the Trustee for the Notes represented by such Global Security will mark such Global Security "canceled", make appropriate entries in such Trustee's records and destroy canceled Global Security in accordance with the applicable Indenture and deliver a certificate of destruction to the Company. The CUSIP number assigned to such Global Security shall, in accordance with CUSIP Service Bureau procedures, be canceled and not immediately reassigned. If a withdrawal message is processed with respect to one or more, but not all, of the Book-Entry Notes represented by a Global Security, the DTC Agent for such Book-Entry Notes will exchange such Global Security for two Global Securities, one of which shall represent such Book-Entry Notes and shall be canceled immediately after issuance and the other of which shall represent the other Book-Entry Notes previously represented by the surrendered Global Security and shall bear the CUSIP number of the surrendered Global Security. If the purchase price for any Book-Entry Note is not timely paid to the Participants with respect to such Note by the beneficial purchaser thereof (or a Person, including an indirect participant in DTC, acting on behalf of such purchaser), such Participants and, in turn, the Presenting Agent may enter SDFS deliver orders through DTC's Participant Terminal System reversing the orders entered pursuant to Settlement Procedures "H" and "G", respectively. Thereafter, the DTC Agent for such Book-Entry Note will deliver the withdrawal message and take the related actions described in the preceding paragraph. If such failure shall have occurred for any reason other than a default by the Agent in the performance of its obligations hereunder and under the Agency Agreement, then the Company will reimburse the Agent for the loss of the use of the funds during the period when they were credited to the account of the Company. Notwithstanding the foregoing, upon any failure to settle with respect to a Book-Entry Note, DTC may take any actions in accordance with its SDFS operating procedures then in effect. In the event of a failure to settle with respect to one or more, but not all, of the Book-Entry Notes to have been represented by a Global Security, the DTC Agent for such Book-Entry Note or Notes will provide, in accordance with Settlement Procedures "E" and "G", for the A-19 authentication and issuance of a Global Security representing the other Book-Entry Notes to have been represented by such Global Security and will make appropriate entries in its records. Trustees Not to Risk Nothing herein shall be deemed to require either Funds: Trustee to risk or expend its own funds in connection with any payment to the Company, DTC, the Agent or the purchaser, it being understood by all parties that payments made by either Trustee to the Company, DTC, the Agent or the purchaser shall be made only to the extent that funds are provided to such Trustee for such purpose. Authenticity of The Company will cause each of the Trustees to Signatures: furnish the Agent from time to time with the specimen signatures of each of such Trustee's officers, employees or agents who has been authorized by such Trustee to authenticate Book-Entry Notes, but the Agent will not have any obligation or liability to the Company or the Trustee in respect of the authenticity of the signature of any officer, employee or agent of the Company or the Trustee on any Book-Entry Note. Payment of Expenses: The Agent shall forward to the Company, on a monthly basis, a statement of the out-of-pocket expenses incurred by such Agent during that month that are reimbursable to it pursuant to the terms of the Agency Agreement. The Company will remit payment to the Agent currently on a monthly basis. Advertising Costs: The Company will determine with the Agents the amount of advertising that may be appropriate in soliciting offers to purchase the Book-Entry Notes. Advertising expenses will be paid by the Company. PART II Administrative Procedures for Certificated Notes Each Trustee will serve as registrar and transfer agent in connection with the Certificated Notes for which it serves as Trustee. Issuance: Each Certificated Note will be dated and issued as of the date of its authentication by the applicable Trustee. Each Certificated Note will bear an Original Issue Date, which will be (i) with respect to an original Certificated Note (or any portion thereof), its original issuance date (which will be the settlement date) and (ii) with respect to any Certificated Note (or portion thereof) issued subsequently upon transfer or exchange of a Certificated Note or in lieu of a destroyed, lost or stolen Certificated Note, the Original Issue Date of the predecessor Certificated Note, regardless of the date of authentication of such subsequently issued Certificated Note. A-20 Registration: Certificated Notes will be issued only in fully registered form without coupons. Maturities: Each Certificated Note will mature on a date not less than nine months after the issue date for such Note. A Floating Rate Certificated Note will mature only on an Interest Payment Date for such Note. Any Note denominated in Japanese yen will mature on a date not less than one year from the Original Issue Date (as defined below) for such Note. Any Note denominated in Pounds Sterling will mature on a date not less than one year, nor more than five years, after its Original Date. Currency: The Specified Currency for a Certificated Note shall be as set forth therein and in the applicable Pricing Supplement. Denominations: The denomination of any Certificated Note denominated in U.S. dollars will be a minimum of $1,000 or any amount in excess thereof that is an integral multiple of $1,000. The authorized denominations of Certificated Notes denominated in a Specified Currency other than U.S. dollars shall be determined as set forth in the applicable Pricing Supplement. Interest: General. Unless otherwise indicated in the applicable Pricing Supplement, interest, if any, on each Certificated Note will accrue from the Original Issue Date (or such other date on which interest otherwise begins to accrue (if different from the Original Issue Date)) of such Note for the first interest period or the last date to which interest has been paid, if any, for each subsequent interest period, on such Note, and will be calculated and paid in the manner and on the dates described in such Note and in the Prospectus, as supplemented by the applicable Pricing Supplement. Unless otherwise specified therein, each payment of interest on a Certificated Note will include interest accrued to but excluding the Interest Payment Date (provided that, in the case of Certificated Notes which reset daily or weekly, interest payments will include accrued interest to and including the next preceding Regular Record Date), except that at stated Maturity, the interest payable will include interest accrued to, but excluding, the stated Maturity (other than a Maturity of a Fixed Rate Certificated Note occurring on the 31st day of a month, in which case such payment of interest will include interest accrued to but excluding the 30th day of such month or the last day of the month in the case of February). Regular Record Dates. The Regular Record Dates with respect to any Interest Payment Date for a Fixed Rate Note, Floating Rate Note or Indexed Rate Note shall be the date (whether or not a Business Day) fifteen calendar days immediately preceding such Interest Payment A-21 Date. Payments of Interest: The applicable Trustee will pay the principal amount of each Certificated Note at Maturity or upon redemption upon presentation and surrender of such Note. Such payment, together with payment of interest due at Maturity or upon redemption of such Note, will be made in funds available for immediate use by the Trustee or paying agent and in turn by the holder of such Note. Certificated Notes presented to the Trustee or paying agent at Maturity or upon redemption for payment will be canceled and destroyed by the Trustee or paying agent, and a certificate of destruction will be delivered to the Company. All interest payments on a Certificated Note (other than interest due at Maturity or upon redemption) will be made by check drawn on the Trustee and mailed by the Trustee to the person entitled thereto as provided in such Note and the Indenture; provided, however, that the holder of U.S.$10,000,000 or more of Notes having the same Interest Payment Dates will, upon written request prior to the Regular Record Date in respect of an Interest Payment Date, be entitled to receive payment by wire transfer of immediately available funds. Following each Regular Record Date, The Trustee or paying agent will furnish the Company with a list of interest payments to be made on the following Interest Payment Date for each Certificated Note and in total for all Certificated Notes. Interest at Maturity or upon redemption will be payable to the person to whom the payment of principal is payable. The Trustee or paying agent will provide monthly to the Company lists of principal and interest, to the extent ascertainable, to be paid on Certificated Notes maturing or to be redeemed in the next month. Withholding Taxes. The amount of any taxes required under applicable law to be withheld from any interest payment on a Certificated Note will be determined and withheld by the Trustee. The Company will be responsible for withholding taxes on interest paid on Certificated Notes as required by applicable law. If any interest Payment Date for or the Maturity of a Certificated Note is not a Business Day, the payment due on such day shall be made on the next succeeding Business Day and no interest shall accrue on account of such delayed payment. Procedure for Rate The Company and the Agent will discuss from time to Setting and Posting: time the aggregate principal amount of, the issuance price of, and the interest rates to be borne by, Notes that may be sold as a result of the solicitation of orders by the Agent. If the Company decides to set prices of, and rates borne by, any Notes in respect of which the Agent is to solicit orders (the setting of such prices and rates to be referred to herein as "posting") or if the Company decides to change prices or rates previously posted by it, it will promptly advise the Agent of the A-22 prices and rates to be posted. Acceptance and Unless otherwise instructed by the Company, the Agent Rejection of Orders: will advise the Company promptly by telephone of all orders to purchase Certificated Notes received by the Agent, other than those rejected by it in whole or in part in the reasonable exercise of its discretion. Unless otherwise agreed by the Company and the Agent, the Company has the sole right to accept orders to purchase Certificated Notes and may reject any such orders in whole or in part. Before accepting any order to purchase a Certificated Note to be settled in less than three Business Days, the Company shall verify that the Trustee for such Certificated Note will have adequate time to prepare and authenticate such Note. Preparation of Pricing If any order to purchase a Certificated Note is Supplement: accepted by or on behalf of the Company, the Company will prepare a Pricing Supplement reflecting the terms of such Certificated Note, will file ten copies thereof with the Commission in accordance with the applicable paragraph of Rule 424(b) under the Act, will deliver such number of copies thereof to the Agent as the Agent shall request and will, on the Agent's behalf, file five copies of the Pricing Supplement with the NASD. The Agent will cause a Prospectus and Pricing Supplement to be delivered to the purchaser of such Certificated Note. Copies of the appropriate number of Pricing Supplements shall be delivered to the Agent at the following addresses by 11:00 a.m., New York City time, on the Business Day following the acceptance of an offer by or on behalf of the Company: to Citigroup Global Markets Inc., Prospectus Department, Brooklyn Army Terminal, 140 58th Street, 8th Floor, Brooklyn, N.Y. 11220, with a copy to Citigroup Global Markets Inc., 388 Greenwich Street, New York, New York 10013, attention: MTN Program Manager. In each instance that a Pricing Supplement is prepared, the Presenting Agent will affix the Pricing Supplement to Prospectuses prior to their use. Outdated Pricing Supplements and the Prospectuses to which they are attached (other than those retained for files), will be destroyed. Suspension of Subject to the Company's representations, warranties Solicitation; Amendment and covenants contained in the Agency Agreement, the or Supplement: Company may instruct the Agent to suspend at any time for any period of time or permanently, the solicitation of orders to purchase Certificated Notes. Upon receipt of such instructions, the Agent will forthwith suspend solicitation until such time as the Company has advised them that such solicitation may be resumed. A-23 In the event that at the time the Company suspends solicitation of purchases there shall be any orders outstanding for settlement, the Company will promptly advise the Agent, the Trustee whether such orders may be settled and whether copies of the Prospectus as in effect at the time of the suspension, together with the appropriate Pricing Supplement, may be delivered in connection with the settlement of such orders. The Company will have the sole responsibility for such decision and for any arrangements that may be made in the event that the Company determines that such orders may not be settled or that copies of such Prospectus may not be so delivered. Delivery of Prospectus: A copy of the Prospectus and a Pricing Supplement relating to a Certificated Note must accompany or precede the earliest of any written offer of such Certificated Note, confirmation of the purchase of such Certificated Note and payment for such Certificated Note by its purchaser. If notice of a change in the terms of the Certificated Notes is received by the Agent between the time an order for a Certificated Note is placed and the time written confirmation thereof is sent by the Agent to a customer or his agent, such confirmation shall be accompanied by a Prospectus and Pricing Supplement setting forth the terms in effect when the order was placed. The Agent will deliver a Prospectus and Pricing Supplement as herein described with respect to each Certificated Note sold by it. The Company will make such delivery if such Certificated Note is sold directly by the Company to a purchaser (other than the Agent). Confirmation: For each order to purchase a Certificated Note solicited by the Agent and accepted by or on behalf of the Company, the Agent will issue a confirmation to the purchaser, with a copy to the Company, setting forth the details set forth above and delivery and payment instructions. Settlement: The receipt by the Company of immediately available funds in exchange for an authenticated Certificated Note delivered to the Agent and the Agent's delivery of such Certificated Note against receipt of immediately available funds shall, with respect to such Certificated Note, constitute "settlement". All orders accepted by the Company will be settled on the fifth Business Day next succeeding the date of acceptance pursuant to the timetable for settlement set forth below, unless the Company and the purchaser agree to settlement on another day which shall be no earlier than the next Business Day following the date of sale. Settlement Procedures: Settlement Procedures with regard to each Certificated Note sold by the Company to or through the Agent, as agent (except pursuant to a A-24 Terms Agreement), shall be as follows: A. The Agent will advise the Company by telephone or by facsimile transmission or other acceptable written means) that such Note is a Certificated Note and of the following settlement information, in time for the Trustee for such Certificated Note to prepare and authenticate the required Note: 1. Name in which such Certificated Note is to be registered ("Registered Owner"). 2. Address of the Registered Owner and address for payment of principal and interest. 3. Taxpayer identification number of the Registered Owner (if available). 4. Principal or face amount. 5. Series. 6. Stated Maturity. 7. In the case of a Fixed Rate Certificated Note, the Interest Rate and reset provisions (if any) or, in the case of a Floating Rate Certificated Note, the Base Rate, Initial Interest Rate (if known at such time), Interest Reset Period, Interest Reset Dates, Index Maturity, Spread and/or Spread Multiplier (if any), Minimum Interest Rate (if any), Maximum Interest Rate (if any) and reset provisions (if any). 8. Interest Payment Dates and the Interest Payment Period. 9. Specified Currency. 10. Denominated Currency, Indexed Currency, Base Exchange Rate and the Determination Date, if applicable. 11. Redemption, repayment, amortization or extension provisions, if any. 12. Settlement date. 13. Price (including currency). A-25 14. Agent's commission, if any, determined as provided in the Agency Agreement. 15. Whether such Certificated Note an OID Note, and, if so, the total amount of OID and the yield to maturity. 16. Any other terms necessary to describe the Certificated Note. B. The Company will advise the relevant Trustee by telephone, (confirmed in writing at any time on the sale date) written telecommunication or electronic transmission of the information set forth in Settlement Procedure "A" above and the name of the Presenting Agent. C. The Company will deliver to the relevant Trustee a pre-printed four-ply packet for such Certificated Note, which packet will contain the following documents in forms that have been approved by Company, the Agents and the Trustee: 1. Certificated Note with customer confirmation. 2. Stub One -- For Trustee. 3. Stub Two -- For Agent. 4. Stub Three -- For the Company. D. The Trustee will complete such Certificated Note and will authenticate such Certificated Note and deliver it (with the confirmation) and Stubs One and Two to the Agent, and the Agent will acknowledge receipt of the Note by stamping or otherwise marking Stub One and returning it to the Trustee. Such delivery will be made only against such acknowledgment of receipt and evidence that instructions have been given by the Agent for payment to such account as the Company shall have specified in funds available for immediate use, of an amount equal to the price of such Certificated Note less the Agent's commission. In the event that the instructions given by the Agent for payment to the account of the Company are revoked, the Company will as promptly as possible wire transfer to the account of the Agent an amount of immediately available funds equal to the amount of such payment made. E. Unless the Agent purchased the Note as Principal, the Agent will deliver such Certificated Note (with the confirmation) to the customer against payment in immediately payable funds. A-26 The Agent will obtain the acknowledgment of receipt of such Certificated Note by retaining Stub Two. F. The Trustee will send Stub Three to the Company by first-class mail. Settlement Procedures For orders of Certificated Notes solicited by the Timetable: Agent, as agent, and accepted by the Company, Settlement Procedures "A" through "F" set forth above shall be completed on or before the respective times (New York City time) set forth below:
Settlement Procedure Time - ---------- ---- A 2:00 P.M. on the day before settlement B On the day two Business Days before settlement date. C 2:15 P.M. two Business Days before settlement D 2:15 P.M. on settlement date E 3:00 P.M. on settlement date F 5:00 P.M. on settlement date
Procedures upon Company Notice to Trustee regarding Exercise of Company's Exercise of Optional Reset. Not less than 45 or more than 60 days Optional Reset or before an Optional Reset Date as set forth in a Optional Extension of Certificated Note, the Company will notify the Maturity: Trustee for such Certificated Note whether it is exercising its option to reset the interest rate or Spread or Spread Multiplier, as the case may be, for such Certificated Note, and if so, (i) the new interest rate or Spread or Spread Multiplier, as the case may be, for such Certificated Note during the period from such Optional Reset Date to the next Optional Reset Date as set forth in such Certificated Note or, if there is no such next Optional Reset Date, to the Stated Maturity of such Certificated Note (the "Subsequent Interest Period"); and (ii) the provisions, if any, for redemption of such Certificated Note during such Subsequent Interest Period, including the date or dates on which or the period or periods during which such redemption may occur during such Subsequent Interest Period. Company Notice to Trustee regarding Exercise of Optional Extension of Maturity. If the Company elects to exercise an option, as set forth in a Certificated Note, to extend the Stated Maturity of such Note, it will so notify the Trustee for such Certificated Note not less than 45 or more than 60 days before the Stated Maturity of such Certificated Note, and will further indicate (i) the new Stated Maturity; (ii) the interest rate or Spread or Spread Multiplier, as the case may be, applicable to the extension period; and (iii) the provisions, if any, for A-27 redemption of such Certificated Note during such extension period, including the date or dates on which or the period or periods during which such redemption may occur during such extension period. Trustee Notice to Holders regarding Company's Exercise of Optional Extension or Reset. Upon receipt of notice from the Company regarding the Company's exercise of either an optional extension of maturity or an optional reset, the Trustee for the Certificated Note will mail a notice, first class, postage prepaid, to the Holder of the Certificated Note not less than 40 days before the Optional Reset Date (in which case a "Reset Notice") or the Stated Maturity (in which case an "Extension Notice"), as the case may be, which Reset Notice or Extension Notice shall contain the information required by the terms of the Certificated Note. Trustee Notice to Company regarding Option to be Repaid. If, after receipt of either a Reset Notice or an Extension Notice, any Holder of a Certificated Note exercises the option for repayment by tendering the Certificated Note to be repaid as set forth in such Note, the Trustee for such Certificated Note shall give notice to the Company not less than 22 days before the Optional Reset Date or the old Stated Maturity, as the case may be, of the principal amount of Certificated Notes to be repaid on such Optional Reset Date or old Stated Maturity, as the case may be. Company Notice regarding New Interest Rate or New Spread or Spread Multiplier. If the Company elects to revoke the interest rate or Spread or Spread Multiplier provided for in the Reset Notice and establish a higher interest rate or Spread or Spread Multiplier for an Optional Reset Period or extension period, as the case may be, it shall, not less than 20 days before such Optional Reset Date or old Stated Maturity, so notify the Trustee for the affected Certificated Note. The Trustee will immediately thereafter notify the Holder of such Certificated Note, by first class mail, postage prepaid, of the new interest rate or Spread or Spread Multiplier applicable to such Certificated Note. Trustee Notice to Company regarding Holder Revocation of Option to be Repaid. If, after the Holder of a Certificated Note has tendered such Note for repayment pursuant to an Extension Notice or an Optional Reset Notice, such Holder then revokes such tender for repayment, the Trustee for such Certificated Note shall give notice to the Company not less than five days prior to the Stated Maturity or Optional Reset Date, as the case may be, of such revocation and of the principal amount of Certificated Notes for which tender for repayment has been revoked. A-28 Deposit of Repayment Price. On or before any old Stated Maturity where the Maturity has been extended, and on or before any Optional Reset Date, the Company shall deposit with such Trustee an amount of money sufficient to pay the principal amount, plus interest accrued to such old Stated Maturity or Optional Reset Date, as the case may be, for all the Certificated Notes or portions thereof for which such Trustee serves as Trustee and which are to be repaid on such old Stated Maturity or Optional Reset Date, as the case may be. Such Trustee will use such money to repay such Certificated Notes pursuant to the terms set forth in such Notes. Procedures upon Company Notice to Trustee regarding Exercise of Company's Exercise of Optional Redemption. At least 45 days prior to the Optional Redemption: date on which it intends to redeem a Certificated Note, the Company will notify the Trustee for such Certificated Note that it is exercising such option with respect to such Note on such date. Trustee Notice to Holders regarding Company's Exercise of Optional Redemption. After receipt of notice that the Company is exercising its option to redeem a Certificated Note, the Trustee for such Certificated Note will, at least 30 days before the redemption date for such Certificated Note, mail a notice, first class, postage prepaid, to the Holder of such Certificated Note, informing such Holder of the Company's exercise of such option with respect to such Certificated Note. Payments of Principal Trustee Notice to Company of Option to be Repaid. and Interest Upon Upon receipt of notice of exercise of the option for Exercise of Optional repayment and the Certificated Notes to be repaid as Repayment (Except set forth in such Notes, the Trustee for such Pursuant to Company's Certificated Notes shall (unless such notice was Exercise of Optional received pursuant to the Company's exercise of an Reset or Optional optional reset or an optional extension of maturity, Extension): in each of which cases the relevant procedures set forth above shall be followed) give notice to the Company not less than 20 days prior to each Optional Repayment Date of such Optional Repayment Date and of the principal amount of Certificated Notes to be repaid on such Optional Repayment Date. Failure to Settle: If a purchaser fails to accept delivery of and make payment for any Certificated Note, the Agent will notify the Company and the applicable Trustee by telephone and return such Note to the applicable Trustee. Upon receipt of such notice, the Company will immediately wire transfer to the account of the Agent an amount equal to the amount previously credited thereto in respect of such Note. Such wire transfer will be made on the settlement date, if possible, and in any event not later than the Business Day following the settlement date. If the failure shall have occurred for any reason other than a default by the Agent in the performance of its obligations A-29 hereunder and under the Agency Agreement with the Company, then the Company will reimburse the Agent or the applicable Trustee, as appropriate, on an equitable basis for its loss of the use of the funds during the period when they were credited to the account of the Company. Immediately upon receipt of the Certificated Note in respect of which such failure occurred, the applicable Trustee will mark such Note "canceled", make appropriate entries in the applicable Trustee's records and send such Note to the Company. Trustees Not to Risk Nothing herein shall be deemed to require either Funds: Trustee to risk or expend its own funds in connection with any payment to the Company, the Agent or the purchaser, it being understood by all parties that payments made by either Trustee to the Company, the Agent or the purchaser shall be made only to the extent that funds are provided to such Trustee for such purpose. Authenticity of The Company will cause each Trustee to furnish the Signatures: Agent from time to time with the specimen signatures of each of such Trustee's officers, employees or agents who has been authorized by such Trustee to authenticate Certificated Notes, but the Agent will not have any obligation or liability to the Company or a Trustee in respect of the authenticity of the signature of any officer, employee or agent of the Company or a Trustee on any Certificated Note. Payment of Expenses: The Agent shall forward to the Company, on a monthly basis, a statement of the out-of-pocket expenses incurred by the Agent during that month that are reimbursable to it pursuant to the terms of the Agency Agreement. The Company will remit payment to the Agent currently on a monthly basis. Advertising Costs: The Company will determine with the Agent the amount of advertising that may be appropriate in soliciting orders to purchase the Certificated Notes. Advertising expenses will be paid by the Company. A-30 EXHIBIT B CITIGROUP GLOBAL MARKETS HOLDINGS INC. Euro Medium-Term Note Administrative Procedures (For Medium Term Notes, Series D and E, in Bearer Form) ________, 20__ The Medium-Term Notes, Series D (the "Series D Notes") and the Medium-Term Notes, Series E (the "Series E Notes" and, together with the Series D Notes, the "Notes") of Citigroup Global Markets Holdings Inc. (the "Company") are to be offered on a continuing basis. Citigroup Global Markets Limited has agreed to act as agent in the solicitation of Notes issuable in bearer form (the "Bearer Notes"), which will be represented by Global Securities that may be exchanged for individual Bearer Notes. (The term "Agent" as used in these Administrative Procedures means Citigroup Global Markets Limited). The Agent will not be obligated to purchase Notes for its own account. The Bearer Notes are being sold pursuant to a Global Selling Agency Agreement between the Company and the agents named therein (including the Agent) dated the date hereof (the "Agency Agreement"). The Notes have been registered with the Securities and Exchange Commission (the "Commission"). JPMorgan Chase Bank, as successor trustee, is the trustee under the Indenture, dated as of December 1, 1988, as amended from time to time, covering the Series D Notes (the "Senior Debt Indenture"). Deutsche Bank Trust Company Americas is the trustee (together with JPMorgan Chase Bank, as successor trustee, the "Trustees") under the Indenture, dated as of December 1, 1988, as amended from time to time, covering the Series E Notes (the "Subordinated Debt Indenture" and together with the Senior Debt Indenture, the "Indentures"). The Series D Notes will constitute part of the senior debt of the Company and will rank equally with all other unsecured and unsubordinated debt of the Company. The Series E Notes will be subordinate and junior in the right of payment to all Senior Indebtedness of the Company, to the extent and in the manner set forth in the Subordinated Debt Indenture. The Agency Agreement provides that Notes may also be purchased by the Agent acting solely as principal and not as agent. In the event of any such purchase, the Agent acting solely as principal shall perform the functions of both the Agent and the beneficial owner under the administrative procedures set forth below, unless otherwise agreed to between the Company and the Agent acting as principal. The Company has appointed the principal office of Citibank, N.A. in London as principal paying agent for the payment of the principal of and interest on the Series D Bearer Notes and has appointed the principal office of Deutsche Bank U.K. in London as principal paying agent (together the "Principal Paying Agents") for the payment of principal of and interest on the Series E Bearer Notes. The Company has appointed Kredietbank S.A. Luxembourgeoise in Luxembourg as an additional paying agent for the Series D Notes and has appointed Deutsche Bank Luxembourg, S.A. as an additional paying agent for the Series E Notes (each a "Paying Agent"). The procedures to be followed during, and the specific terms of, the solicitation of orders by the Agent and the sale as a result thereof by the Company are explained below. Administrative and record-keeping responsibilities will be handled for the Company by its B-1 Treasury Department. The Company will advise the Agent and the Trustees in writing of those persons handling administrative responsibilities with whom the Agent and the Trustees are to communicate regarding orders to purchase Bearer Notes and the details of their delivery. If the Notes are to be listed on the Luxembourg Stock Exchange, the Company will advise the Principal Paying Agents and the Agent as to the entity it has appointed as listing agent (the "Listing Agent"), which will coordinate with the Principal Paying Agents and the Agent on a regular basis for the purpose of providing the Luxembourg Stock Exchange with such information regarding Bearer Notes issued and outstanding as such Exchange may require. Administrative procedures and specific terms of the offering are explained below. Unless otherwise defined herein, terms defined in the Indenture, the Prospectus or the Notes shall be used as therein defined. To the extent the procedures set forth below conflict with the provisions of the Bearer Notes, the Indentures or the Agency Agreement, the relevant provisions of the Bearer Notes, the Indentures and the Agency Agreement shall control. Maturities: Each Bearer Note will mature on a date more than nine months after the settlement date for such Note. A Floating Rate Bearer Note will mature only on an Interest Payment Date for such Bearer Note. Any Note denominated in Japanese yen will mature on a date not less than one year from the Original Issue Date (as defined below) for such Note. Any Note denominated in Pounds Sterling will mature on a date not less than one year, nor more than five years, after its Original Issue Date. Currency: The Specified Currency for a Certificated Note shall be as set forth therein and in the applicable Pricing Supplement. Denominations: The denomination of any Bearer Note denominated in U.S. dollars will be a minimum of U.S.$10,000 or any larger amount that is an integral multiple of U.S.$1,000. The authorized denominations of Bearer Notes denominated in any other currency will be set forth in such Bearer Notes. Bearer Form: Bearer Notes will be issued only in bearer form. Date of Issuance: Each Bearer Note will be dated and issued as of its original issue date by the Principal Paying Agent for such Bearer Note. Each Bearer Note will bear an Original Issue Date, which will be (i) with respect to a temporary Global Security (or any portion thereof), the date of its original issue as specified in such Global Security and (ii) with respect to any Permanent Global Security or individual Bearer Note (or portion thereof) issued subsequently upon transfer or exchange of a Bearer Note or in lieu of a destroyed, lost or stolen Bearer Note, the Original Issue Date of the predecessor Bearer Note, regardless of the date of authentication of such subsequently issued Bearer Note. Temporary Global Until the 40th day following the date of issuance of Securities; Definitive a Bearer Note (the "Exchange Date") and until Final Global Securities; and Certification (as defined below) with respect to such Bearer Note has occurred, such Bearer B-2 Individual Bearer Note, together with all other Bearer Notes that have Notes: the same rank, Original Issue Date, currency of denomination, redemption and repayment provisions, Stated Maturity and either fixed interest rate (in the case of Fixed Rate Notes) or Base Rate, Initial Interest Rate, interest reset period, Interest Payment Dates, Minimum Interest Rate, Maximum Interest Rate, Spread or Spread Multiplier and Index Maturity (in the case of Floating Rate Notes) (all such Bearer Notes herein referred to collectively as a "Tranche"), will be represented by a single temporary Global Security in bearer form without interest coupons. The Company shall execute, and the Principal Paying Agent for the Bearer Notes represented by such temporary Global Security shall authenticate, such temporary Global Security upon the same conditions and in substantially the same manner, and with the same effect, as a Permanent Global Security. On or prior to the Closing Date (which should also be the Original Issue Date), with respect to such Bearer Notes, the Principal Paying Agent for such Bearer Notes shall deposit the temporary Global Security with a common depositary (the "Depositary") for Clearstream International, ("Clearstream") and Euroclear Bank S.A./N.V., as operator of the Euroclear System ("Euroclear"), in the manner specified below under "Details for Settlement". The interest of each beneficial owner of such temporary Global Security will be credited to the appropriate account with Clearstream or Euroclear, as specified below under "Details for Settlement". On or after the Exchange Date and provided that Final Certification (as described below) has occurred, the interest of the beneficial owner of such Bearer Note in the temporary Global Security shall be canceled and such Bearer Note, together with all other Bearer Notes of the Tranche as to which Final Certification has occurred, shall thereafter be represented by a Permanent Global Security in bearer form without interest coupons held in London by the Depositary. The interest of the beneficial owner of such Bearer Note in such Permanent Global Security will be credited to the appropriate account with Clearstream or Euroclear. The beneficial owner of an interest in a Permanent Global Security may, at any time, upon 30 days' notice to the Principal Paying Agent for the Bearer Notes represented by such Permanent Global Security, given by such beneficial owner through either Clearstream or Euroclear, as the case may be, exchange its beneficial interest in such Permanent Global Security for one or more individual Bearer Notes (with coupons attached, if appropriate) equal in aggregate principal amount to such beneficial interest. To effect such exchange, the interest of the beneficial owner of such Bearer Note in such Permanent Global Security shall be canceled and one or more individual Bearer Notes shall be issued to such beneficial owner, B-3 through Euroclear or Clearstream, as the case may be. In all events, Bearer Notes will be delivered by the Principal Paying Agents only outside the United States. Final Certification: Final Certification with respect to a temporary Global Security shall mean the delivery by Euroclear or Clearstream, as the case may be, to the Principal Paying Agent for the Bearer Notes represented by such Permanent Global Security of a signed certificate (a "Clearance System Certificate") in the form set forth in Appendix 1 hereto with respect to the Bearer Notes, dated no earlier than the Exchange Date for such Bearer Notes or, if an interest payment on the Bearer Notes shall be due prior to the Exchange Date, dated no earlier than such Interest Payment Date, to the effect that Euroclear or Clearstream, as the case may be, has received certificates ("Certificates of Non-U.S. Beneficial Ownership") in the form set forth in Appendix 2 hereto with respect to each of such Bearer Notes, dated no earlier than ten days before such Exchange Date or Interest Payment Date, as the case may be, signed by the account holders appearing on its records as entitled to such Bearer Notes, to the effect that such Bearer Notes (i) are not beneficially owned by United States persons and have not been acquired by or on behalf of United States persons, (ii) are owned by United States persons that are (a) foreign branches of United States financial institutions purchasing for their own account or for resale or (b) United States persons who acquired the Bearer Notes through foreign branches of U.S. financial institutions and who hold the Bearer Notes through such U.S. financial institutions (and in either case (a) or (b), each such financial institution has agreed that it will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986 and the regulations thereunder), or (iii) are owned by United States or foreign financial institutions for purposes of resale during the restricted period, in which event such financial institutions (whether or not also described in clause (i) or (ii)) shall have certified that they have not acquired the Bearer Notes for purposes of resale directly or indirectly to a United States person or to a person within the United States or its possessions. Payments of Principal: Upon presentation of a Note, the Principal Paying Agent for such Bearer Note will pay the principal amount of such Note and the final installment of interest at Maturity in immediately available funds. Notes presented to the Principal Paying Agent for such Bearer Notes at Maturity for payment will be canceled in accordance with the Indenture under which such Bearer Notes have been issued. Interest Payments: Interest on each Bearer Note will accrue from the Original Issue Date of such Bearer Note and will be calculated and paid in the manner described in such Bearer Note and the Prospectus, each as defined in B-4 the Agency Agreement, as supplemented by the applicable Pricing Supplement; provided, however, that interest in respect of any portion of a temporary Global Security for which Final Certification has not been made shall not be paid until Final Certification is received in respect of that portion. Payments of Principal Upon receipt of Bearer Notes to be repaid as set and Interest Upon forth in such Notes, the Trustee or Principal Paying Exercise of Optional Agent for such Notes shall give notice to the Company Repayment: not less than 20 calendar days prior to each Optional Repayment Date of such Optional Repayment Date and of the principal amount of Bearer Notes to be repaid on such Optional Repayment Date. On or prior to any Optional Repayment Date, the Company shall deposit with such Trustee or such Principal Paying Agent an amount of money sufficient to pay the Optional Repayment Price, and accrued interest thereon to such date, of all the Notes or portions thereof which are to be repaid on such date. Such Trustee or such Principal Paying Agent will use such money to repay such Notes pursuant to the terms set forth in such Notes. Procedure for Rate The Company and the Agent will discuss from time to Setting and Posting: time the aggregate principal amount of, the issuance price of, and the interest rates to be borne by, Bearer Notes that may be sold as a result of the solicitation of orders by the Agent. If the Company decides to set prices of, and rates borne by, any Bearer Notes in respect of which the Agent is to solicit orders (the setting of such prices and rates to be referred to herein as "posting") or if the Company decides to change prices or rates previously posted by it, it will promptly advise the Agent of the prices and rates to be posted. Acceptance of Orders: If the Company posts prices and rates as provided above, the Agent as agent for and on behalf of the Company shall promptly accept orders received by it to purchase Bearer Notes at the prices and rates so posted, subject to (1) any instructions from the Company received by the Agent concerning the aggregate principal amount of Bearer Notes to be sold at the prices and rates so posted or the period during which such posted prices and rates are to be in effect, (2) any instructions from the Company received by the Agent changing or revoking any posted prices and rates, (3) compliance with the securities laws of the United States and all other jurisdictions and with the selling restrictions contained in the Agency Agreement and (4) the Agent's right to reject any such offer as provided below. If the Company does not post prices and rates and the Agent receives an order to purchase Bearer Notes, or, if while posted prices and rates are in effect, the Agent receives an order to purchase Bearer Notes on terms other than those posted by the Company, the Agent will B-5 promptly advise the Company by telephone of any such order other than orders rejected by the Agent as provided below. The Company will have the sole right to accept any such order to purchase Bearer Notes and may reject any such order in whole or in part. The Agent may, in its discretion reasonably exercised, reject any order to purchase Bearer Notes received by it in whole or in part. Preparation of Pricing If any order to purchase a Bearer Note is accepted by Supplement: or on behalf of the Company, the Company, with the approval of the Agent, will prepare a pricing supplement (a "Pricing Supplement") reflecting the terms of such Bearer Note, will file ten copies thereof with the Commission in accordance with the applicable paragraph of Rule 424(b) under the Act, will supply such copies thereof to the Agent as the Agent may request, will supply one copy to the Principal Paying Agent for such Bearer Note and will, on the Agent's behalf, file five copies of such Pricing Supplement with the National Association of Securities Dealers, Inc. (the "NASD"). The Principal Paying Agent for such Bearer Note will cause such Pricing Supplement to be delivered to the Trustee for such Bearer Note, to each additional Paying Agent for such Bearer Note outside the United States and to the Listing Agent. The Agent will cause a Pricing Supplement to be delivered to the purchaser of the Bearer Note. In each instance that a Pricing Supplement is prepared, the Agent will affix copies of the Pricing Supplement to Prospectuses prior to their use. Outdated Pricing Supplements, and the Prospectuses to which they are attached (other than those retained for files), will be destroyed. Suspension of The Company reserves the right, in its sole Solicitation; Amendment discretion, to instruct the Agent to suspend at any or Supplement: time, for any period of time or permanently, the solicitation of orders to purchase Bearer Notes. Upon receipt of such instructions, the Agent will forthwith suspend solicitation of orders to purchase Bearer Notes from the Company until such time as the Company has advised it that such solicitation may be resumed. In the event that at the time the Company suspends solicitation of purchases there shall be any orders outstanding for settlement, the Company will promptly advise the Agent and each of the Principal Paying Agents whether such orders may be settled and whether copies of the Prospectus as in effect at the time of the suspension, together with the appropriate Pricing Supplement, may be delivered in connection with the settlement of such orders. The Company will have the sole responsibility for such decision and for any arrangements that may be made in the event that the Company determines that such orders may not be settled or that copies of such Prospectus may not be so delivered. If the Company decides to B-6 amend or supplement the Registration Statement (as defined in the Agency Agreement) or the Prospectus (except for an amendment or supplement relating to an offering of Securities other than the Notes or to an offering of Warrants or providing solely for the specification of or a change in the maturity dates, the interest rates, the issuance prices or other terms of any Notes), it will promptly advise the Agent and the Trustees and will furnish the Agent and the Trustees with the proposed amendment or supplement and with such certificates and opinions as are required, all in accordance with the terms of the Agency Agreement. The Company will file with the Commission any supplement to the Prospectus relating to the Bearer Notes, provide the Agent with copies of any such supplement, and confirm to the Agent that such supplement has been filed with the Commission pursuant to the applicable paragraph of Rule 424(b). Delivery of Prospectus: A copy of the Prospectus and a Pricing Supplement relating to a Bearer Note must accompany or precede any written offer of such Note, confirmation of the purchase of such Note and payment for such Note by its purchaser. If notice of a change in the terms of the Bearer Notes is received by the Agent between the time an order for a Bearer Note is placed and the time written confirmation thereof is sent by the Agent to a customer or his agent, such confirmation shall be accompanied by a Prospectus and Pricing Supplement setting forth the terms in effect when the order was placed. Subject to the second preceding paragraph, the Agent will deliver a Prospectus and Pricing Supplement as herein described with respect to each Bearer Note sold by it. The Principal Paying Agent for such Bearer Note will make such delivery if such Note is sold directly by the Company to a purchaser (other than the Agent). Confirmation: For each order to purchase a Bearer Note solicited by the Agent and accepted by or on behalf of the Company, the Agent will issue a confirmation to the purchaser, with a copy to the Company, setting forth the details set forth below, delivery and payment instructions and the language required by the U.S. Treasury Regulations. Settlement: Subject to Section 5 of the Agency Agreement, the Closing Date with respect to any order to purchase Bearer Notes accepted by or on behalf of the Company will be the third day next succeeding the date of acceptance, or if such day is a day on which commercial banks in New York City or London or Clearstream or Euroclear are required or authorized to be closed, the next succeeding day on which commercial banks in New York City and London and Euroclear and Clearstream are not required or authorized to be closed (a "Business Day") unless otherwise agreed by the purchaser and the Company and shall be specified upon acceptance of such offer. Details for Settlement: For each offer to purchase a Bearer Note that is accepted by or on B-7 behalf of the Company, the Agent will provide (unless provided by the purchaser directly to the Company) by telephone the following information to the Company: 1. Principal or face amount. 2. Series. 3. Stated Maturity. 4. In the case of a Fixed Rate Book-Entry Note, the interest rate and reset, redemption, repayment and extension provisions (if any) or, in the case of a Floating Rate Book-Entry Note, the Base Rate, Initial Interest Rate (if known at such time) Interest Reset Period, Interest Reset Dates, Index Maturity, Spread and/or Spread Multiplier (if any), Minimum Interest Rate (if any), Maximum Interest Rate (if any) and reset, redemption, repayment and extension provisions (if any). 5. Interest Payment Dates and the Interest Payment Period. 6. Amortization provisions, if any. 7. Settlement date and Issue Date, if different. 8. Specified currency. 9. Denominated currency, Indexed Currency, Base Exchange Rate, and the Determination Date, if applicable. 10. Price. 11. Agent's commission, determined as provided in the Agency Agreement. 12. Whether such Book-Entry Note is an OID Note and, if so, the total amount of OID, the yield to maturity and the initial accrual period OID. 13. Any other terms necessary to describe the Book-Entry Note. 14. Agent's account number at Clearstream or Euroclear. The Agent will advise the Company and the Principal Paying Agent for such Bearer Note of the foregoing information (unless provided by the purchaser directly to the Company) for each offer to purchase a Bearer Note solicited by the Agent and accepted by the Company in time for the Principal Paying Agent for such Bearer Note to prepare and authenticate the temporary Global Security and deliver it at least B-8 one day prior to settlement to the Depositary in London. The Principal Paying Agent for such Bearer Note will instruct Euroclear or Clearstream, as the case may be, to credit such Bearer Note to the distribution account of such Principal Paying Agent with Euroclear or Clearstream, as the case may be, for onward credit to the account of the Agent against payment. Concurrently therewith and in consideration thereof, the Agent for such Bearer Note will give instructions to Euroclear or Clearstream, as the case may be, to credit the account of the Principal Paying Agent for such Bearer Note against delivery of such Bearer Note with an amount equal to the initial public offering price of such Bearer Note, less the applicable commission determined as provided in Section 2 of the Agency Agreement. The Principal Paying Agent for such Bearer Note will remit all such funds received to the designated account of the Company. The Principal Paying Agent for such Bearer Note will notify the Agent of both the Euroclear and Clearstream Reference Numbers for such Bearer Note and will notify the Listing Agent of the issuance of such Bearer Note. Before accepting any order to purchase a Bearer Note to be settled in less than three Business Days, the Company shall verify that the Principal Paying Agent for such Bearer Note will have adequate time to prepare and authenticate the temporary Global Security that will represent such Bearer Note. The Agent will provide appropriate documentation to the Principal Paying Agent for such Bearer Note, including the information necessary for the preparation and authentication of the temporary Global Security that will represent such Bearer Note. Prior to preparing such temporary Global Security for delivery (but in any case no later than 10:00 AM, London time, on the Business Day next preceding the Closing Date therefor), the Principal Paying Agent for such Bearer Note will confirm receipt of such instruction to the Agent by telephone. Bearer Note Deliveries Upon receipt of appropriate documentation and and Cash Payment: instructions with respect to the Bearer Notes constituting a Tranche, the Company will cause the Principal Paying Agent for such Bearer Notes to prepare and authenticate a temporary Global Security representing such Tranche and to insert thereon (1) the rank, (2) the principal amount of such Tranche, (3) the Original Issue Date, (4) the Stated Maturity, (5) the interest rate (in the case of a Fixed-Rate Note) and redemption and repayment provisions (if any) or the Base Rate, Initial Interest Rate, Index Maturity, Spread or Spread Multiplier, Minimum Interest Rate and Maximum Interest Rate (in the case of a Floating Rate Note) and redemption and repayment provisions (if any) and (6) any other terms required to be inserted thereon. On the Closing Date, the Principal Paying Agent for the Bearer Notes represented by such Tranche will credit such Bearer Note to its B-9 distribution account with Clearstream or Euroclear and the Agent will make payment to such Principal Paying Agent against delivery of such Bearer Note, through Euroclear or Clearstream, as the case may be, in immediately available funds, in an amount equal to the issuance price of such Bearer Note less the Agent's commission. The Principal Paying Agent for such Bearer Note will remit all such funds received to the designated account of the Company. Such payment shall be made by the Agent only upon prior receipt by the Agent of immediately available funds from or on behalf of the purchaser unless the Agent decides, at its option, to advance its own funds for such payment against subsequent receipt of funds from the purchaser. Failure to Settle: If on the relevant Issue Date the Agent does not pay the subscription price due from it in respect of any Note (the "Defaulted Note") and, as a result, the Defaulted Note remains in the distribution account of the Principal Paying Agent for such Note with Euroclear or Clearstream after such Issue Date (rather than being credited to the Agent's account against payment), such Principal Paying Agent will continue to hold the Defaulted Note to the order of the Company. If such Principal Paying Agent pays an amount (the "Advance") to the Company on the basis that a payment (the "Payment") has been, or will be, received from the relevant Agent and if the Payment has not been, or is not, received by such Principal Paying Agent on the date such Principal Paying Agent pays the Company, the Company shall upon being requested to do so repay to such Principal Paying Agent the Advance and shall pay interest (on a 360 days basis) sufficient to cover any overdraft costs incurred by such Principal Paying Agent, as certified by such Principal Paying Agent, until the earlier of repayment in full of the Advance and receipt in full by such Principal Paying Agent of the Payment. If the Agent, at its own option, has advanced its own funds for payment against subsequent receipt of funds from the purchaser, and if the purchaser shall fail to make payment for the Bearer Note on the Closing Date therefor, the Agent will promptly notify the Principal Paying Agent for such Bearer Note, the Depositary and the Company by telephone, promptly confirmed in writing (but no later than the next Business Day). In such event the Agent shall instruct Euroclear or Clearstream, as the case may be, to transfer such Defaulted Note to the distribution account of the Principal Paying Agent for such Bearer Note who will continue to hold the Defaulted Note to the order of the Company. Upon (i) confirmation from such Principal Paying Agent in writing (which may be by telex or telecopy) that such Principal Paying Agent is holding the Defaulted Note for the account of the Company, and (ii) confirmation from the Agent in writing (which may be given by telex or telecopy) that the Agent has not received payment from the purchaser (the matters referred to in clauses (i) and B-10 (ii) are referred to hereinafter as the "Confirmations"), the Company will promptly pay to the Agent an amount in immediately available funds equal to the amount previously paid by the Agent in respect of such Bearer Note. Such payment will be made not later than the Business Day following the date of receipt of the Confirmations. The Principal Paying Agent for such Bearer Note and the Depositary will make such revisions to the temporary Global Security representing such Bearer Note as are necessary to reflect the cancellation of such portion of such Global Security. If a purchaser shall fail to make payment for such Bearer Note for any reason other than the failure of the Agent to provide the necessary information to the Company as described above for settlement or to provide a confirmation to the purchaser within a reasonable period of time as described above or otherwise to satisfy its obligation hereunder or in the Agency Agreement, and if the Agent shall have otherwise complied with its obligations hereunder and in the Agency Agreement, the Company will reimburse the Agent on an equitable basis for its loss of the use of funds during the period when they were credited to the account of the Company. Principal Paying Agents Nothing herein shall be deemed to require Principal Not to Risk Funds: Paying Agent expend its own funds in connection with any payment to the Company, or the Agent or the purchaser, it being understood by all parties that payments made by the Principal Paying Agents to the Company, or the Agent or a purchaser shall be made only to the extent that funds are provided to the Principal Paying Agents for such purpose. Authenticity of The Company will cause each Principal Paying Agent to Signatures: furnish the Agent from time to time with the specimen signatures of each of such Principal Paying Agent's officers, employees or agents who has been authorized by such Principal Paying Agent to authenticate Bearer Notes (including Global Securities representing Bearer Notes), but the Agent will have no obligation or liability to the Company or to either Principal Paying Agent in respect of the authenticity of the signature of any officer, employee or agent of the Company or either Principal Paying Agent on any Bearer Note. B-11 Payment of Expenses: The Agent shall forward to the Company, on a monthly basis, a statement of the out-of-pocket expenses incurred by the Agent during that month that are reimbursable to it pursuant to the terms of the Agency Agreement. The Company will remit payment to the Agent currently on a monthly basis. Advertising Costs: The Company will determine with the Agent the amount of advertising that may be appropriate in soliciting orders to purchase the Bearer Notes. Advertising expenses will be paid by the Company. B-12 APPENDIX 1 [FORM OF CERTIFICATION TO BE GIVEN BY EUROCLEAR OR CLEARSTREAM] CERTIFICATION Citigroup Global Markets Holdings Inc. Medium Term Notes, Series [D][E] (the "Notes") This is to certify that, based solely on certifications we have received in writing, by tested telex or by electronic transmission from member organizations appearing in our records as persons being entitled to a portion of the principal amount set forth below (our "Member Organizations") substantially to the effect set forth in the Medium-Term Note Administrative Procedures attached to the Selling Agency Agreement relating to the Notes, as of the date hereof, principal amount of the above-captioned Notes (i) is owned by persons that are not citizens or residents of the United States, domestic partnerships, domestic corporations or any estate or trust the income of which is subject to United States Federal income taxation regardless of its source ("United States persons"), (ii) is owned by United States persons that are (a) foreign branches of United States financial institutions (as defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(v)) ("financial institutions") purchasing for their own account or for resale, or (b) United States persons who acquired the Notes through foreign branches of United States financial institutions and who hold the Notes through such United States financial institutions on the date hereof (and in either case (a) or (b), each such United States financial institution has agreed, on its own behalf or through its agent, that we may advise the Issuer or the Issuer's agent that it will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder), or (iii) is owned by United States or foreign financial institutions for purposes of resale during the restricted period (as defined in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), which United States or foreign financial institutions described in clause (iii) above (whether or not also described in clause (i) or (ii)) have certified that they have not acquired the Notes for purposes of resale directly or indirectly to a United States person or to a person within the United States or its possessions. We further certify (i) that we are not making available herewith for exchange (or, if relevant, exercise of any rights or collection of any interest) any portion of the temporary global Note excepted in such certifications and (ii) that as of the date hereof we have not received any notification from any of our Member Organizations to the effect that the statements made by such Member Organizations with respect to any portion of the part submitted herewith for exchange (or, if relevant, exercise of any rights or collection of any interest) are no longer true and cannot be relied upon as the date hereof. B-Appendix 1-1 We understand that this certification is required in connection with certain tax laws of the United States. In connection therewith, if administrative or legal proceedings are commenced or threatened in connection with which this certification is or would be relevant, we irrevocably authorize you to produce this certification to any interested party in such proceedings. Dated: ______________, 200_(1) Yours faithfully, [EUROCLEAR BANK, S.A./N.V., as operator of the Euroclear System] or [CLEARSTREAM, S.A.] By - ---------------- (1) [The earlier of the Exchange Date and the first Interest Payment Date on the applicable Notes.] B-Appendix 1-2 APPENDIX 2 [FORM OF CERTIFICATION TO BE GIVEN BY AN ACCOUNT HOLDER OF EUROCLEAR OR CLEARSTREAM] CERTIFICATION Citigroup Global Markets Holdings Inc. Medium Term Notes, Series [D][E] This is to certify that as of the date hereof, and except as set forth below, the above-captioned Notes (the "Notes") held by you for our account (i) are owned by person(s) that are not citizens or residents of the United States, domestic partnerships, domestic corporations or any estate or trust the income of which is subject to United States Federal income taxation regardless of its source ("United States person(s)"), (ii) are owned by United States person(s) that are (a) foreign branches of United States financial institutions (as defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(v)) ("financial institutions") purchasing for their own account or for resale, or (b) United States person(s) who acquired the Notes through foreign branches of United States financial institutions and who hold the Notes through such United States financial institutions on the date hereof (and in either case (a) or (b), each such United States financial institution hereby agrees, on its own behalf or through its agent, that you may advise the Issuer or the Issuer's agent that it will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder), or (iii) are owned by United States or foreign financial institution(s) for purposes of resale during the restricted period (as defined in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and in addition if the owner of the Notes is a United States or foreign financial institution described in clause (iii) above (whether or not also described in clause (i) or (ii)) this is to further certify that such financial institution has not acquired the Notes for purposes of resale directly or indirectly to a United States person or to a person within the United States or its possessions. As used herein, "United States" means the United States of America (including the States and the District of Columbia); and its "possessions" include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands. We undertake to advise you promptly by tested telex on or prior to the date on which you intend to submit your certification relating to the Notes in accordance with your Operating Procedures if any applicable statement herein is not correct on such date, and in the absence of any such notification it may be assumed that this certification applies as of such date. This certification excepts and does not relate to $ of principal amount of the Notes as to which we are not able to certify and as to which we understand exchange and delivery of definitive Notes (or, if relevant, exercise of any rights or collection of any interest) cannot be made until we do so certify. B-Appendix 2-1 We understand that this certification is required in connection with certain tax laws of the United States. In connection therewith, if administrative or legal proceedings are commenced or threatened in connection with which this certification is or would be relevant, we irrevocably authorize you to produce this certification to any interested party in such proceedings. Dated: _________________, 20__ [To be dated no earlier than the 10th day before the earlier of the Exchange Date and the first Interest Payment Date on the Notes] [Name of Account Holder] By: _____________________________ (Authorized Signatory) Name: Title: B-Appendix 2-2 EXHIBIT C FORM OF TERMS AGREEMENT Attention: Subject in all respects to the terms and conditions contained in the Global Selling Agency Agreement dated ____________ , 20__ (the "Global Selling Agency Agreement"), among Citigroup Global Markets Inc., Citigroup Global Markets Limited and Citigroup Global Markets Holdings Inc., the undersigned agrees to purchase the following Notes of Citigroup Global Markets Holdings Inc.: Principal Amount: Issue Price: Purchaser: Original Issue Date: Initial Interest Rate: Stated Maturity: Reoffering Rate: Reoffering Price: [ ] Varying prices from time to time related to prevailing prices at the time of resale [ ] Fixed price of __% of Principal Amount Specified Currency (If other than U.S. dollars): Survivor's Option: Authorized Denominations: (If other than as set forth in the Prospectus Supplement) Dual Currency Note: [ ] Yes (see attached) [ ] No Optional Payment Currency: Designated Exchange Rate: Base Rate: [ ] CD Rate [ ] Commercial Paper Rate [ ] Federal Funds Rate [ ] LIBOR Telerate [ ] LIBOR Reuters [ ] Treasury Rate [ ] Treasury Rate Constant Maturity [ ] Prime Rate [ ] Eleventh District Cost of Funds Rate [ ] Euribor [ ] Other (see attached) Index Maturity: Interest Reset Period or Interest Reset Dates: Interest Payment Dates: Accrue to Pay: [ ] Yes [ ] No Indexed Principal Note: [ ] Yes (see attached) [ ] No Floating Rate: [ ] Indexed Interest Rate: [ ] (see attached) Spread Multiplier: Spread (+/-): Spread Reset [ ] The Spread or Spread Multiplier may not be changed prior to Stated Maturity. [ ] The Spread or Spread Multiplier may be changed prior to Stated Maturity (see attached). C-1 Optional Reset Dates (if applicable): Maximum Interest Rate: Minimum Interest Rate: Inverse Floating Rate Note: [ ] Yes (see attached) [ ] No Initial Fixed Interest Rate: Reset Fixed Reference Rate: Floating Rate / Fixed Rate Note: [ ] Yes (see attached) [ ] No Amortizing Note: [ ] Yes [ ] No Amortization Schedule: Optional Redemption: [ ] Yes [ ] No Optional Redemption Dates: Redemption Prices: Bond Yield to Maturity: Bond Yield to Call: Optional Repayment: [ ] Yes [ ] No Optional Repayment Dates: Optional Repayment Prices: Optional Extension of Stated Maturity: [ ] Yes [ ] No Final Maturity: Discount Note: [ ] Yes [ ] No Total Amount of OID: Yield to Maturity: Renewable Note: [ ] Yes (see attached) [ ] No Special Election Interval (if applicable): Amount (if less than entire principal amount) as to which election may be exercised: Place of Delivery of Notes: Method of Payment for the Notes: Requirements for delivery, if any, of opinions of counsel, certificates from the Company or its officers or a letter from the Company's independent public accountants: Other terms: The provisions of the Global Selling Agency Agreement and the related definitions are incorporated by reference herein and shall be deemed to have the same force and effect as if set forth in full herein. Between the date of this Agreement and the Settlement Date with respect to this Agreement, you will not, without the undersigned's prior consent, offer, sell, contract to sell or C-2 otherwise dispose of any debt securities of the Company substantially similar to the Medium-Term Notes (other than (i) the Medium-Term Notes to be sold pursuant to this Agreement and (ii) commercial paper issued in the ordinary course of business), except as may otherwise be provided herein. Date: [Purchaser] By: __________________________ Accepted: CITIGROUP GLOBAL MARKETS HOLDINGS INC. By: _________________________ C-3 EXHIBIT D FORM OF AGENT ACCESSION CONFIRMATION - PROGRAM To: [Name and address of new Agent] [date] Citigroup Global Markets Holdings Inc. U.S.$[ ] Series D and Series E Medium-Term Note Program Ladies and Gentlemen: We refer to the Global Selling Agency Agreement dated as of _______, 20__ (which agreement, as amended from time to time, is herein referred to as the "Agency Agreement") entered into in respect of the above Medium-Term Note Program and hereby acknowledge receipt of your Agent Accession Letter to us dated [ ]. In accordance with Section 2(c) of the Agency Agreement we hereby confirm that, with effect from the date hereof, you shall become a party to, and a[n] [U.S. Agent] [International Agent] under, the Agency Agreement, vested with all the authority, rights and powers, and subject to all the duties and obligations of a[n] [U.S.] [International] Agent as if originally named as such under the Agency Agreement. Yours faithfully, CITIGROUP GLOBAL MARKETS HOLDINGS INC. By: ___________________________ Name: Title: cc: Principal Paying Agents Trustees Existing Agents D-1 EXHIBIT E FORM OF AGENT ACCESSION LETTER - PROGRAM To: Citigroup Global Markets Holdings Inc. 388 Greenwich Street New York, New York 10013 [date] Citigroup Global Markets Holdings Inc. U.S.$[ ] Series D and Series E Medium-Term Note Program Ladies and Gentlemen: We refer to the Global Selling Agency Agreement dated as of _________, 20__, entered into in respect of the above Medium-Term Note Program and made between Citigroup Global Markets Holdings Inc. (the "Company") and the Agents party thereto (which agreement, as amended from time to time, is herein referred to as the "Agency Agreement"). We confirm that we are in receipt of the documents referenced below (except to the extent we have waived delivery of such documents): - -- a copy of the Agency Agreement; - -- a copy of all documents referred to in Section 5 of the Agency Agreement; and - -- a letter in a form approved by ourselves from each of the legal advisers referred to in Section 5 of the Agency Agreement addressed to ourselves and giving us the full benefit of the existing legal opinions as of the date of such existing legal opinions, and have found them to our satisfaction. For the purposes of Section 9 of the Agency Agreement our notice details are as follows: (insert name, address, telephone, telecopy, telex and attention). In consideration of the Company appointing us as a[n] [U.S.] [International] Agent under the Agency Agreement, we hereby undertake, for the benefit of the Company and each of the other Agents, that we will perform and comply with all the duties and obligations expressed to be assumed by a[n] [U.S.] [International] Agent under or pursuant to the Agency Agreement. We also undertake to deliver to The Depository Trust Company of New York such pricing letters as it may reasonably require from us in connection with the offer and sale of the Notes. E-1 This letter is governed by, and shall be construed in accordance with, the laws of the State of New York. Yours faithfully, [Name of new Agent] By: _____________________________ Name: Title: cc: Principal Paying Agents Trustees Existing Agents E-2 EXHIBIT F FORM OF AGENT ACCESSION CONFIRMATION - NOTE ISSUE To: [Name and address of new Agent] [date] Citigroup Global Markets Holdings Inc. U.S.$[ ] Series D and Series E Medium-Term Note Program Ladies and Gentlemen: We refer to the Global Selling Agency Agreement dated as of _______, 20__ (which agreement, as amended from time to time, is herein referred to as the "Agency Agreement") entered into in respect of the above Medium-Term Note Program and hereby acknowledge receipt of your Agent Accession Letter to us dated [ ]. In accordance with Section 2(c) of the Agency Agreement we hereby confirm that, with effect from the date hereof solely in respect of the issue of [ ] Notes due [ ] (the "Issue"), you shall become a party to, and a[n] [U.S.] [International] Agent under, the Agency Agreement, vested with all the authority, rights and powers, and subject to all duties and obligations of a[n] [U.S.] [International] Agent in relation to the Issue as if originally named as such under the Agency Agreement. Such appointment is limited to the Issue and is not for any other issue of Notes of the Company pursuant to the Agency Agreement and such appointment will terminate upon issue of the Notes comprising the Issue but without prejudice to any rights, duties or obligations which have arisen prior to such termination. Yours faithfully, CITIGROUP GLOBAL MARKETS HOLDINGS INC. By: __________________________________ Name: Title: cc: Principal Paying Agents Trustees F-1 EXHIBIT G FORM OF AGENT ACCESSION LETTER - NOTE ISSUE Citigroup Global Markets Holdings Inc. 388 Greenwich Street New York, New York 10013 U.S.$[ ] Series D and Series E Medium-Term Note Program Ladies and Gentlemen: We refer to the Global Selling Agency Agreement dated as of ______, 20__, entered into in respect of the above Medium-Term Note Program and made between the Company and the Agents party thereto (which agreement, as amended from time to time, is herein referred to as the "Global Selling Agency Agreement"). We confirm that we are in receipt of the documents referenced below (except to the extent that we have waived delivery of such documents): - -- a copy of the Agency Agreement; and - -- a copy of all documents referred to in Section 5 of the Agency Agreement and have found them to our satisfaction. For the purposes of Section 9 of the Agency Agreement our notice details are as follows: (insert name, address, telephone, telecopy, telex and attention). In consideration of the Company appointing us as a[n] [U.S.] [International] Agent solely in respect of the issue of [ ] Notes due [ ] (the "Issue") under the Agency Agreement, we hereby undertake, for the benefit of the Company and each of the other Agents, that in relation to the Issue we will perform and comply with all the duties and obligations expressed to be assumed by a[n] [U.S.] [International] Agent under or pursuant to the Agency Agreement. We acknowledge that such appointment is limited to the Issue and is not for any other issue of Notes of the Company pursuant to the Agency Agreement and that such appointment will terminate upon issue of the Notes comprising the Issue but without prejudice to any rights, duties or obligations which have arisen prior to such termination. G-1 This letter is governed by, and shall be construed in accordance with, the laws of the State of New York. Yours faithfully, [Name of new Agent] By: ___________________________ Title: cc: Principal Paying Agents Trustees G-2 EXHIBITS H-K FORMS OF OPINIONS, CERTIFICATES AND COMFORT LETTERS EX-1.C 3 x99885s3exv1wc.txt FORM OF GLOBAL SELLING AGENCY AGREEMENT Exhibit 1(c) CITIGROUP GLOBAL MARKETS HOLDINGS INC. Retail Medium-Term Notes, Series F GLOBAL SELLING AGENCY AGREEMENT _______, 20__ New York, New York To the Agents listed on Schedule I hereto Ladies and Gentlemen: Citigroup Global Markets Holdings Inc., a New York corporation (the "Company"), confirms its agreement with each of you with respect to the issue and sale by the Company of up to $[ ] aggregate principal amount of its Retail Medium-Term Notes, Series F in registered form (the "Notes"). It is understood that the Company may from time to time authorize the issuance and sale of additional amounts of the Notes and that such Notes may be issued and sold pursuant to the terms of this Agreement, all as though the issuance and sale of such Notes were authorized by the Company as of the date hereof. The Notes will be issued under an indenture (the "Senior Debt Indenture") dated as of December 1, 1988, as amended from time to time, between the Company and JPMorgan Chase Bank, as successor trustee (the "Trustee"). Unless otherwise specifically provided for and set forth in a supplement to the Prospectus referred to below, the Notes will be issued in minimum denominations of $1,000 and in denominations exceeding such amount by integral multiples of $1,000 and will be issued only in fully registered form, and the Notes will have the interest rates, maturities, redemption provisions and other terms set forth in the applicable Pricing Supplement (as defined herein). The Notes will be issued, and the terms thereof established, in accordance with the Senior Debt Indenture and the Retail Medium-Term Notes, Series F Administrative Procedures attached hereto as Exhibit A (the "Administrative Procedures") (unless a Terms Agreement (as defined in Section 2(b)) modifies or otherwise supersedes such Administrative Procedures with respect to the Notes issued pursuant to such Terms Agreement). The Administrative Procedures may only be amended by written agreement of the Company and Citigroup Global Markets Inc., as purchasing agent (the "Purchasing Agent"), on behalf of the Agents, after notice to, and with the approval of, the Trustee. For purposes of this Agreement, the term "Agent" shall refer to any one of you and to any additional agents appointed as a party to this Agreement pursuant to Section 2(d) hereof; and the term "you" shall refer to you and any other Agent collectively. In acting under this Agreement, each of you is acting individually and not jointly. 1. Representations and Warranties. The Company represents and warrants to, and agrees with, each of you as set forth below in this Section 1. (a) Registration Statements (File Nos. 333-[ ] and 333-106272) in respect of $[ ] aggregate principal amount of securities of the Company, including the Notes, have been filed with the Securities and Exchange Commission (the "Commission"); such registration statements and any post-effective amendment thereto, each in the forms heretofore delivered or to be delivered to each of you, excluding exhibits to such registration statements but including all documents incorporated by reference therein, have been declared effective by the Commission in such forms; no other document with respect to such registration statements (other than a document incorporated by reference therein) has heretofore been filed or transmitted for filing with the Commission; and no stop order suspending the effectiveness of either registration statement has been issued and no proceeding for that purpose has been instituted or threatened by the Commission (any preliminary prospectus included in the Second Registration Statement (as defined herein) or filed with the Commission pursuant to Rule 424(a) of the rules and regulations of the Commission under the Securities Act of 1933, as amended (the "Act"), being hereinafter called a "Preliminary Prospectus"); the various parts of each registration statement, including all exhibits thereto and the documents incorporated by reference in the prospectus contained in such registration statement at the time such part of such registration statement became effective but excluding the Statements of Eligibility under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), pertaining to the Indenture (the "Forms T-1"), each as amended at the time such part became effective, being hereinafter collectively called (i) in the case of Registration Statement No. 333-106272, the "First Registration Statement" and (ii) in the case of Registration Statement No. 333-[ ], the "Second Registration Statement"; the First Registration Statement and the Second Registration Statement being hereinafter called the "Registration Statements"; the form of basic prospectus relating to the offering and sale of Debt Securities and Index Warrants included in the Second Registration Statement, in the form in which it has most recently been filed, or transmitted for filing, with the Commission on or prior to the date of this Agreement being hereinafter from time to time called the "Basic Prospectus"; the supplement to the Prospectus relating to the Notes and the plan of distribution thereof being hereinafter called the "Prospectus Supplement"; and the Basic Prospectus (and the Prospectus Supplement) being hereinafter called the "Prospectus". Any reference herein to the Prospectus, a Preliminary Prospectus or any Prospectus Supplement shall be deemed to refer to and include the documents incorporated by reference therein pursuant to the applicable form under the Act, as of the date of such Prospectus, Preliminary Prospectus or Prospectus Supplement, as the case may be; any reference to any amendment or supplement to any Prospectus, Preliminary Prospectus or Prospectus Supplement, including any supplement to the Prospectus that sets forth only the terms of a particular issue of the Notes (a "Pricing Supplement"), shall be deemed to refer to and include any documents filed after the date of such Prospectus, Preliminary Prospectus or Prospectus Supplement, as the case may be, under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated by reference in such Prospectus or Prospectus Supplement, as the case may be; any reference to any amendment to either Registration Statement shall be deemed to include any report of the Company filed pursuant to the Exchange Act after the effective date of such Registration Statement that is incorporated by reference in such Registration Statement; and any reference to the Prospectus as amended or supplemented shall be deemed to refer to and include the Prospectus as amended or supplemented in relation to the Notes sold pursuant to this Agreement, in the form in which it is filed with the Commission 2 pursuant to Rule 424(b) under the Act, including any documents incorporated by reference therein as of the date of such filing); (b) The documents incorporated by reference in the Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission promulgated thereunder, and any further documents so filed and incorporated by reference in the Prospectus, or any further amendment or supplement thereto, when such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder; (c) Each Registration Statement and the Prospectus, and any amendment thereof or supplement thereto, and the Indenture, conform or will conform in all material respects with the applicable requirements of the Act and the Trust Indenture Act, and the rules and regulations of the Commission thereunder; (d) The First Registration Statement as of its effective date did not, and the Second Registration Statement, as amended as of any time, did not and will not, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading and the Prospectus, as amended and supplemented as of any such time, did not and will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representations or warranties as to the information contained in or omitted from the Second Registration Statement or the Prospectus or any amendment thereof or supplement thereto in reliance upon, and in conformity with, information furnished in writing to the Company by or on behalf of any Agent specifically for use in the Second Registration Statement and the Prospectus or any amendment thereof or supplement thereto; (e) The Notes have been duly authorized and, when executed and authenticated in accordance with the Indenture and delivered to and duly paid for by the purchasers thereof, will constitute valid and binding obligations of the Company, enforceable in accordance with their respective terms and entitled to the benefits of the Indenture (subject, as to enforcement, to applicable bankruptcy, reorganization, insolvency, moratorium or other similar laws affecting creditors' rights generally and to general principles of equity regardless of whether such enforceability is considered in a proceeding in equity or at law); the Indenture has been duly authorized by the Company and qualified under the Trust Indenture Act; and the Indenture conforms to the descriptions thereof in the Prospectus as amended or supplemented to relate to such issuance of Notes; (f) Since the date of the most recent financial statements included in the Prospectus, as amended or supplemented, there has not been any material adverse change in the consolidated financial condition or results of operations of the Company and its subsidiaries, taken as a whole, which is not disclosed in the Prospectus, as amended or supplemented. 3 2. Appointment of Agents. Subject to the terms and conditions stated herein, the Company hereby (i) appoints and authorizes the Agents to act as its agents to solicit offers for the purchase of all or part of the Notes from the Company in accordance with the terms hereof and (ii) agrees that whenever the Company determines from time to time to sell Notes pursuant to this Agreement, it will enter into a Terms Agreement (as defined below) relating to such sale in accordance with the provisions of Section 2(b) hereof between the Company and the Purchasing Agent, with the Purchasing Agent purchasing such Notes as principal for resale to other Agents or other dealers (the "Selected Dealers"), each of whom will purchase as principal. (a) Solicitations of Offers to Purchase Notes. Following the Commencement Date (referred to below), the Company shall notify the Purchasing Agent from time to time as to the commencement of a period during which the Notes may be offered and sold by the Agents (each period, commencing with such a notification and ending at such time as the authorization for offers and sales through the Agents shall have been suspended by the Company or the Agents as provided hereunder, being herein referred to as an "Offering Period"). The initial Offering Period shall begin on [ ], 20[ ] (the "Commencement Date"). On the basis of the representations and warranties, and subject to the terms and conditions set forth herein, each of the Agents agrees to use its reasonable best efforts to solicit offers to purchase Notes from the Company upon the terms and conditions set forth in the applicable Prospectus (and any supplement thereto) and in the Administrative Procedures. The Purchasing Agent shall communicate to the Company, orally or in writing, each reasonable offer or indication of interest to purchase Notes received by each Agent. The Company shall have the sole right to accept offers to purchase the Notes and may reject any such offer in whole or in part. Each Agent shall have the right to reject, in its discretion reasonably exercised, any offer received by it to purchase the Notes, in whole or in part, and any such rejection shall not be deemed a breach of its agreements contained herein. In soliciting offers to purchase the Notes, no Agent assumes any obligation toward or relationship of agency or trust with any purchaser of the Notes (other than any such obligation or relationship which the Agent assumes independently of this Agreement). Each Agent shall make reasonable efforts to assist the Company in obtaining performance by each purchaser whose offer to purchase Notes has been solicited by such Agent and accepted by the Company. Except as provided in Section 2(b) and Section 2(c) below, under no circumstances will any Agent be obligated to purchase any Notes for its own account. It is understood and agreed, however, that any of you may purchase Notes as principal pursuant to Section 2(b) and Section 2(c) below, as applicable. The Company reserves the right, in its sole discretion, to instruct the Agents to suspend at any time, for any period of time or permanently, the solicitation of offers to purchase Notes. Upon receipt of instructions from the Company, the Agents will forthwith suspend solicitation of offers to purchase Notes from the Company until such time as the Company has advised them that such solicitation may be resumed. Subject to the provisions of this Section 2 and to the Administrative Procedures, as applicable, offers for the purchase of Notes may be solicited by an Agent at such time and in such amounts as such Agent shall deem advisable. The Company may from time to time offer Notes for sale otherwise than through an Agent; provided, however, that so long as this Agreement is in effect the Company shall not solicit or accept offers to purchase Notes through any agent other than an Agent. 4 If the Company defaults in its obligations to deliver Notes to a purchaser whose offer it has accepted, the Company shall indemnify and hold each of you harmless against any loss, claim or damage arising from or as a result of such default by the Company. (b) Purchases of Notes. Subject to the terms and conditions stated herein, each sale of Notes shall be made in accordance with the terms of this Agreement and a supplemental agreement between the Company and the Purchasing Agent which will provide for the sale of such Notes to, and the purchase of and reoffering thereof by, the Purchasing Agent, as principal. Each such supplemental agreement (which may be either an oral or written agreement) is herein referred to as a "Terms Agreement". Each Terms Agreement shall describe the Notes to be purchased by the Purchasing Agent pursuant thereto and shall specify the aggregate principal amount of such Notes, the price to be paid to the Company for such Notes, the initial public offering price at which the Notes are proposed to be reoffered, the maturity date of such Notes, the rate at which interest will be paid on such Notes, the dates on which interest will be paid on such Notes and the record date with respect to each such payment of interest, whether the Notes provide for a Survivor's Option, such other terms of the Notes as are applicable, the Settlement Date for the purchase of such Notes, the method of payment and any requirements for the delivery of opinions of counsel, certificates from the Company or its officers or a letter from the Company's independent public accountants as described in Section 5(b). A Terms Agreement may also specify certain provisions relating to the reoffering of such Notes by the Purchasing Agent. Any written Terms Agreement may be in the form attached hereto as Exhibit B. The Purchasing Agent's commitment to purchase Notes shall be deemed to have been made on the basis of the representations and warranties of the Company herein contained and shall be subject to the terms and conditions herein set forth. Each date of delivery of and payment for Notes to be purchased by the Purchasing Agent is referred to herein as a "Settlement Date". Delivery of the Notes sold to the Purchasing Agent pursuant to a Terms Agreement shall be made not later than the Settlement Date agreed to in such Terms Agreement, against payment of funds to the Company in the net amount due to the Company for such Notes by the method and in the form set forth in the Administrative Procedures, as applicable, unless otherwise agreed to between the Company and the Purchasing Agent in such Terms Agreement. The Company agrees to pay the Purchasing Agent a commission on the Settlement Date with respect to each sale of Notes by the Company as a result of solicitations made by the Agents, in an amount equal to that percentage specified in Schedule II hereto of the aggregate principal amount of the Notes sold by the Company; provided, however, that the Company and the Purchasing Agent may agree to a commission greater than or less than the percentages specified in Schedule II hereto; and provided further that in no case shall the commission exceed 8% of the initial offering proceeds. Such commission shall be payable as specified in the Administrative Procedures, and the actual aggregate commission with respect to each sale of Notes will be set forth in the relevant Pricing Supplement. The Purchasing Agent and the other Agents or Selected Dealers will share the above-mentioned commission in such proportions as they may agree. Unless otherwise agreed to between the Company and the Purchasing Agent in a Terms Agreement, any Note sold to the Purchasing Agent (i) shall be purchased by the 5 Purchasing Agent at a price equal to 100% of the principal amount thereof less a percentage equal to the applicable commission and (ii) may be resold by the Purchasing Agent to other Agents or Selected Dealers, each of whom will purchase as principal for resale to the public at a fixed public offering price which shall be set forth in the applicable Terms Agreement and Pricing Supplement. In connection with any resale of Notes purchased, without the consent of the Company or unless otherwise set forth in the applicable Terms Agreement, the Agents are not authorized to appoint subagents or to engage the services of any other broker or dealer or to reallow any portion of the commission paid to such Agent. (c) Unless otherwise agreed to by the Purchasing Agent, each Agent shall purchase from the Purchasing Agent as principal for resale to the public such aggregate principal amount of Notes with respect to which it has communicated offers to purchase to the Purchasing Agent (the "Commitment Amount"). The agreement of each Agent to purchase Notes from the Purchasing Agent shall be deemed to be made on the basis of the representations, warranties and agreements of the Company herein contained and shall be subject to the terms and conditions herein set forth. Each Agent agrees to deliver to the Purchasing Agent on the Settlement Date (or on such later date as may be specified by the Purchasing Agent) and at the place specified by the Purchasing Agent immediately available funds, payable to the order of the Purchasing Agent, for (i) an amount equal to the Offering Price, less the applicable commission in respect of such Agent's Commitment Amount or (ii) such other amount as the Purchasing Agent shall advise such Agent. The Purchasing Agent will make payment to the Company against delivery to the Purchasing Agent for each Agent's account of the Notes to be purchased by each Agent, and the Purchasing Agent will deliver to each Agent the Notes paid for by such Agent. If the Purchasing Agent has determined that transactions in the Notes are to be settled through the facilities of DTC or another clearinghouse facility, payment for and delivery of Notes purchased by each Agent shall be made through such facilities, if such Agent is a member, or, if such Agent is not a member, settlement shall be made through such Agent's ordinary correspondent who is a member. (d) Additional Agents. Notwithstanding paragraphs 2(a), 2(b) or 2(c) above, the Company may from time to time appoint one or more additional financial institutions experienced in the distribution of securities as an Agent under this Agreement, for the duration of this Agreement (subject to Section 7 hereof) or on an issue by issue basis, pursuant to a letter (an "Agent Accession Confirmation") substantially in the form of Exhibit C to this Agreement; provided that any such additional party shall have first requested appointment as such upon the terms and conditions of this Agreement in writing to the Company pursuant to a letter (an "Agent Accession Letter") substantially in the form of Exhibit D to this Agreement whereupon it shall, subject to the terms and conditions of this Agreement, the Agent Accession Letter and the Agent Accession Confirmation, become a party to this Agreement as an Agent, vested with all the authority, rights and powers and subject to all the duties and obligations of an Agent as if originally named as an Agent hereunder. The Company shall promptly notify the Trustee and the other Agents of any such appointment, but only in the event that any such additional Agent is appointed for the duration of this Agreement. (e) Each Agent acknowledges and agrees, with respect to communications in accordance with the Administrative Procedures via https://newissue.i-deal.com, or such other website as may be from time to time maintained for use in connection with the Notes (the "Notes 6 Website"), (i) that it is responsible for maintaining the confidentiality of the log-on and password it uses to access the Notes Website, (ii) that it is fully responsible for all activities that occur using its log-on and password, (iii) to notify the Company and the Purchasing Agent immediately of any unauthorized use of its log-on or password or any other breach of security and (iv) that it will not use the log-on or password of any other person at any time. (f) Each Agent represents that it is a broker-dealer registered under the Exchange Act. 3. Offering and Sale of Notes. The Purchasing Agent, the other Agents and the Company agree to perform the respective duties and obligations specifically provided to be performed by them in the Administrative Procedures, as the case may be. 4. Agreements. (A) The Company agrees with each of you that: (a) At any time during an Offering Period or during the time a prospectus relating to the Notes is required to be delivered under the Act, prior to amending or supplementing either Registration Statement or the Prospectus, the Company will furnish the Purchasing Agent and Cleary, Gottlieb, Steen & Hamilton, counsel to the Agents, with a copy of each proposed amendment or supplement (other than an amendment or supplement to be made pursuant to incorporation by reference of a document filed under the Exchange Act, or a Pricing Supplement or an amendment or supplement relating solely to an offering of securities other than the Notes). The Company will promptly cause the Prospectus together with each amendment thereof or supplement thereto to be mailed or otherwise transmitted to the Commission for filing pursuant to Rule 424(b) by an appropriate method or will promptly cause the Prospectus together with each amendment thereof or supplement thereto to be filed with the Commission pursuant to said Rule. If the Prospectus is amended or supplemented (other than by a Pricing Supplement or an amendment or supplement relating solely to an offering of securities other than the Notes), each Agent shall be furnished with such information relating to such filing as it may reasonably request, and no Agent shall be obligated to solicit offers to purchase Notes so long as it is not reasonably satisfied that such amendment or supplement complies in all material respects with the provisions of the Act and the Exchange Act. At any time during an Offering Period or during the time a prospectus relating to the Notes is required to be delivered under the Act, the Company will promptly advise each Agent of (i) the filing of any amendment or supplement to the Prospectus (other than a Pricing Supplement or an amendment or supplement relating solely to an offering of securities other than the Notes), (ii) the filing or effectiveness of any amendment to either Registration Statement, (iii) the receipt by the Company of comments from the Commission relating to or requests by the Commission for any amendment of either Registration Statement or any amendment of or supplement to the Prospectus or for any additional information, (iv) the issuance by the Commission of any stop order suspending the effectiveness of either Registration Statement or the institution or threatening of any proceeding for that purpose, and (v) the receipt by the Company of any notification with respect to the suspension of the qualification of the Notes for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose. The Company will use its reasonable best efforts to prevent the issuance of any such stop order or notice of suspension of qualification and, if issued, to obtain as soon as possible the withdrawal thereof. Upon any Agent's request, the 7 Company will within a reasonable time inform such Agent of the aggregate principal amount of Notes registered under the Registration Statements that remain unissued. (b) Within the time during which a prospectus relating to the Notes is required to be delivered under the Act, the Company will comply with all requirements imposed upon it by the Act, as now and hereafter amended, and by the rules and regulations of the Commission thereunder, as from time to time in force, so far as necessary to permit the continuance of sales of or dealings in the Notes as contemplated by the provisions hereof and the Prospectus. If during such period any event occurs as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances then existing, not misleading, or if, in the opinion of the Company, during such period it is necessary to amend or supplement the Second Registration Statement or the Prospectus to comply with the Act, the Company will promptly notify each Agent to suspend the solicitation of offers to purchase the Notes and to cease sales of any Notes and, to the extent required under the provision in the last sentence of this subsection (b), the Company will promptly amend or supplement such Registration Statement or the Prospectus (at the expense of the Company) so as to correct such statement or omission or effect such compliance. If such amendment or supplement, and any documents, certificates, opinions and letters furnished to the Agents pursuant to subsections (j), (k) and (1) of this Section 4(A) in connection with the preparation and filing of such amendment or supplement, are reasonably satisfactory in all respects to the Purchasing Agent, in its sole discretion, upon the filing of such amendment or supplement with the Commission or effectiveness of an amendment to such Registration Statement, the Agents will resume solicitation of offers to purchase Notes hereunder. Notwithstanding the foregoing, the Company shall not be required to comply with the provisions of subsection (b) of this Section 4(A) during any period from the time any Agent shall have been notified to suspend the solicitation of offers to purchase the Notes in its capacity as Agent (whether under this subparagraph (b) or otherwise under this Agreement) to the time the Company shall determine that solicitation of offers to purchase the Notes should be resumed; provided that if any Agent holds any Notes purchased as principal pursuant to a Terms Agreement or from the Purchasing Agent, the Company shall comply with the provisions of subsection (b) of this Section 4(B) during the period when a Prospectus is required to be delivered pursuant to the Act. (c) The Company will comply, in a timely manner, with all applicable requirements under the Exchange Act relating to the filing with the Commission of the Company's reports pursuant to Section 13(a), 13(c) or 15(d) of the Exchange Act and, if then applicable, of the Company's proxy statements pursuant to Section 14 of the Exchange Act. (d) The Company will use its best efforts to qualify the Notes for sale under the securities laws of such jurisdictions as any Agent reasonably designates, to maintain such qualifications in effect so long as required for the distribution of the Notes, except that the Company shall not be required in connection therewith to qualify to do business in any jurisdiction where it is not now so qualified or to take any action which would subject it to general or unlimited service of process in any jurisdiction where it is not now so subject. (e) The Company will furnish to each Agent copies of the Registration Statements and the Prospectus (including all documents incorporated by reference therein), and 8 all amendments of and supplements to the Registration Statements or the Prospectus which are filed with the Commission during the period in which a prospectus relating to the Notes is required to be delivered under the Act (including all documents filed by an amendment or supplement with the Commission during such period which are deemed to be incorporated by reference therein), in each case in such quantities as such Agent may from time to time reasonably request. (f) So long as any of the Notes are outstanding, the Company agrees to furnish to each Agent, upon its reasonable request, as soon as available, all reports and financial statements filed by or on behalf of the Company with the Commission or any national securities exchange. (g) The Company will make generally available to its security holders and to each Agent as soon as practicable, but in any event not later than 15 months after the end of the Company's current fiscal quarter, an earnings statement (which need not be audited) covering a 12-month period beginning after the date upon which any amendment of or supplement to the Prospectus (other than a Pricing Supplement or an amendment or supplement relating solely to an offering of debt securities other than the Notes) is filed pursuant to Rule 424 under the Act, which shall satisfy the provisions of Section 11(a) of the Act. (h) The Company shall, whether or not any sale of Notes is consummated or this Agreement is terminated, pay all expenses incident to the performance of its obligations under this Agreement and under any Terms Agreement, including, without limitation, the fees and disbursements of its accountants and counsel, the cost of printing (or other production) and delivery of the Registration Statements and the Prospectus, all amendments thereof and supplements thereto, the Indenture, and all other documents relating to the offering, the cost of preparing, printing, packaging and delivering the Notes, the fees and disbursements (including reasonable fees of counsel) incurred in connection with the qualification of the Notes for sale and determination of eligibility for investment of the Notes under the securities or Blue Sky laws of such jurisdictions as any Agent may designate, the fees and disbursements of the Trustee, the fees of any agency that rates the Notes, the fees and expenses incurred with respect to any filing with the National Association of Securities Dealers, Inc. and the reasonable fees and disbursements of Cleary, Gottlieb, Steen & Hamilton, as counsel for the Agents, or other counsel reasonably satisfactory to the Purchasing Agent and the Company, and such other expenses, including, without limitation, advertising expenses as may be agreed upon by the Purchasing Agent and the Company; provided, however, that with respect to any purchase of Notes by the Purchasing Agent pursuant to a Terms Agreement, the fees and disbursements of Cleary, Gottlieb, Steen & Hamilton or other counsel to the Agents shall not be paid by the Company. (i) During the term of this Agreement, the Company shall furnish to each Agent such relevant documents and certificates of officers of the Company relating to the business, operations and affairs of the Company, the Registration Statements, the Prospectus, any amendments thereof or supplements thereto, the Indenture, the Notes, this Agreement, the Administrative Procedures, any Terms Agreement and the performance by the Company of its obligations hereunder or thereunder as any Agent may from time to time reasonably request and shall promptly notify each Agent orally, followed by written notice of any downgrading, or of its receipt of any notice of any intended downgrading, in the rating accorded any of the Company's 9 securities by Moody's Investors Service, Inc. or Standard & Poor's Ratings Services or, if one of them no longer rates the securities of the Company, another "nationally recognized statistical rating organization", as such term is defined for purposes of Rule 436(g) (2) under the Act. (j) Each time either Registration Statement or the Prospectus is amended or supplemented (other than by filing with the Commission: (i) a Pricing Supplement, (ii) an amendment or supplement relating solely to an offering of securities other than the Notes, (iii) a Current Report on Form 8-K (or any successor item thereto), or (iv) any other amendment or supplement that the Purchasing Agent reasonably deems immaterial), the Company will deliver or cause to be delivered forthwith to the Agents a certificate of the Company signed by the Chairman of the Board, any Vice Chairman or any Vice President and by the principal financial officer, the principal accounting officer or the Treasurer of the Company (or another officer or officers acceptable to the Purchasing Agent), dated the date of the effectiveness of such amendment or the date of filing with the Commission of such supplement or document, as the case may be, in form reasonably satisfactory to the Purchasing Agent, to the effect that the statements contained in the certificate referred to in Section 5(b) (iii) that was last furnished to the Agents (either pursuant to Section 5(b) (iii) or pursuant to this Section 4(A)(j)) are true and correct at the time of the effectiveness of such amendment or the time of filing of such supplement or document, as the case may be, as though made at and as of such time (except that such statements shall be deemed to relate to the Registration Statements, as amended at the time of effectiveness of such amendment, and to the Prospectus, as amended and supplemented at the date of such certificate) or, in lieu of such certificate, a certificate of the same tenor as the certificate referred to in Section 5(b) (iii) but modified, if necessary, to relate to the Registration Statements, as amended at the time of the effectiveness of such amendment, and to the Prospectus, as amended and supplemented at the date of such certificate. (k) Each time either Registration Statement or the Prospectus is amended or supplemented (other than by filing with the Commission: (i) a Pricing Supplement, (ii) an amendment or supplement relating solely to an offering of securities other than the Notes, (iii) a Current Report on Form 8-K (or any successor item thereto), or (iv) any other amendment or supplement that the Purchasing Agent reasonably deems immaterial), the Company shall furnish to or cause to be furnished forthwith to the Agents the written opinion of the General Counsel or a Deputy General Counsel of the Company or other counsel reasonably satisfactory to the Purchasing Agent dated the date of the effectiveness of such amendment or the date of filing with the Commission of such supplement or document, as the case may be, in form reasonably satisfactory to the Purchasing Agent, to the effect set forth in Exhibit F hereto. In lieu of such opinion, counsel last furnishing such an opinion to the Agents may furnish to the Agents a letter to the effect that the Agents may rely on such last opinion to the same extent as though it were dated the date of such letter and authorizing reliance on such last opinion (except that statements in such last opinion will be deemed to relate to the Registration Statements, as amended at the time of the effectiveness of such amendment, and to the Prospectus, as amended and supplemented at the date of such letter). (l) Each time either Registration Statement or the Prospectus is amended or supplemented to set forth amended or supplemental financial information supplemented (other than by filing with the Commission: (i) a Pricing Supplement, (ii) an amendment or supplement relating solely to an offering of securities other than the Notes, (iii) a Current Report on Form 8- 10 K (or any successor item thereto), or (iv) any other amendment or supplement that the Purchasing Agent reasonably deems immaterial), the Company shall cause KPMG LLP, its independent registered public accounting firm, forthwith to furnish the Agents a letter, dated the date of the effectiveness of such amendment or the date of filing of such supplement or document, as the case may be, in form satisfactory to the Purchasing Agent, of the same tenor as the letter of such independent public accountants referred to in Section 5(b)(iv) hereof but modified to relate to the Registration Statements and Prospectus, as amended and supplemented to the date of such letter, with such changes as may be necessary to reflect changes in the financial statements and other information derived from the accounting records of the Company; provided, however, that if either Registration Statement or the Prospectus is amended or supplemented solely to include or incorporate by reference financial information with respect to a fiscal quarter, KPMG LLP may limit the scope of such letter to the unaudited financial statements included in such amendment or supplement. (m) Each acceptance by the Company of an offer for the purchase of Notes and each sale of Notes to the Purchasing Agent shall be deemed to be an affirmation that the representations and warranties of the Company contained in or made pursuant to this Agreement are true and correct in all material respects at the time of such acceptance or sale, as the case may be, as though made at and as of such time, and an undertaking that such representations and warranties will be true and correct in all material respects at the time of delivery to the Purchasing Agent of the Notes relating to such acceptance, as the case may be, as though made at and as of such time (and it is understood that such representations and warranties shall relate to the Registration Statements and the Prospectus as amended and supplemented to each such time). (n) Anything to the contrary in this Section 4 notwithstanding, if, at the time of any required notice, amendment or supplement to the Registration Statement or the Prospectus, the Company shall have instructed the Agents to suspend solicitation of offers to purchase the Notes and no Agent then holds any Notes acquired by it as principal pursuant to a Terms Agreement or from the Purchasing Agent, the Company shall not be obligated to furnish or cause to be furnished any notice, certificate, opinion or letter otherwise required until such time as it shall determine that solicitation of offers to purchase the Notes should be resumed; and provided, further that, prior to resuming such solicitation the Agents shall be entitled to receive any such notices, certificates, opinions or letters not previously furnished, accurate as of the date of such notice, certificate, opinion or letter. 5. Conditions to the Obligations of the Agents. The obligations of each Agent under the terms of this Agreement will be subject to the accuracy in all material respects of the representations and warranties on the part of the Company herein contained, to the accuracy of the statements of the Company's officers made in each certificate furnished pursuant to the provisions hereof and to the performance and observance by the Company of all covenants and agreements herein contained on its part to be performed and observed (in the case of any Agent's obligations to solicit offers to purchase Notes, at the time of such solicitation, and, in the case of any Agent's obligation to purchase Notes, at the time the Company accepts the offer from the Purchasing Agent to purchase such Notes and at the time of purchase by the Purchasing Agent) and (in each case) to the following additional conditions precedent when and as specified: 11 (a) On the corresponding Settlement Date: (i) There shall not have occurred any change in or affecting particularly the business or properties of the Company and its affiliates from that set forth in the Second Registration Statement, as amended or supplemented, that, in such Agent's judgment, makes it impracticable to market the Notes on the terms and in the manner contemplated in the Prospectus except as disclosed to the Agents in writing by the Company before the Company accepted the Purchasing Agents' offer to purchase such Notes. (ii) There shall not have occurred any (x) suspension or material limitation of trading in securities generally on the New York Stock Exchange, or any setting of minimum prices for trading on such exchange, or any suspension of trading of any securities of the Company on any exchange (whether U.S. or foreign) or in the over-the-counter market, (y) declaration of a general moratorium on commercial banking activities in New York by either federal or New York state authorities or exchange controls shall have been imposed by the United States or (z) any outbreak or escalation of major hostilities in which the United States is involved, any declaration of war by Congress or any other substantial national or international calamity or emergency that, in the Agent's judgment, is material and adverse and, in the case of any of the events described in clauses (x) through (z) above, such event makes it, in such Agent's judgment, impracticable to market the Notes on the terms and in the manner contemplated by the Prospectus, as amended or supplemented, except for any such event occurring before the Company accepted the offer of the Purchasing Agent to purchase such Notes. (iii) There shall not have been any downgrading, nor any notice given of any intended downgrading, in the rating accorded any of the Company's securities by Moody's Investor Service or Standard & Poor's Ratings Services or, if one of them no longer rates the securities of the Company, another "nationally recognized statistical rating organization", as such term is defined for purposes of Rule 436(g) (2) under the Act, except as disclosed to the Agents in writing by the Company before the Company accepted the Purchasing Agent's offer to purchase such Notes. (b) On the Commencement Date and, if called for by any Terms Agreement, on the corresponding Settlement Date: (i) The Company shall have furnished to the Agents the opinion of the General Counsel or a Deputy General Counsel of the Company (or other counsel for the Company reasonably acceptable to the Agents) on the Commencement Date, and, on the Settlement Date will furnish the opinion of the General Counsel or a Deputy General Counsel of the Company (or other counsel for the Company reasonably acceptable to the Agents) and, if called for by a Terms Agreement, the opinion of other counsel, dated the Commencement Date or the Settlement Date, as the case may be, to the effect set forth in Exhibit F hereto. 12 (ii) The Agents shall have received from Cleary, Gottlieb, Steen & Hamilton, counsel for the Agents (or other counsel reasonably acceptable to the Purchasing Agent and the Company), an opinion dated the Commencement Date or the Settlement Date, as the case may be, to the effect set forth in Exhibit G hereto. (iii) The Company shall have furnished to the Agents a certificate of the Company, signed by the Chairman of the Board, any Vice Chairman, the Treasurer or any Vice President and by the principal financial officer, the Controller or the principal accounting officer of the Company (or another officer or officers acceptable to the Agents), dated the Commencement Date or the Settlement Date, as the case may be, to the effect that each signatory of such certificate has carefully examined the Registration Statement, as amended as of the date of such certificate, the Prospectus, as amended and supplemented as of the date of such certificate, and this Agreement and that: (A) the representations and warranties of the Company in this Agreement are true and correct in all material respects on and as of the date of such certificate with the same effect as if made on the date of such certificate and the Company has complied in all material respects with all the agreements and satisfied in all material respects all the conditions on its part to be performed or satisfied as a condition to the obligations of the Agents under this Agreement; (B) no stop order suspending the effectiveness of either Registration Statement has been issued and no proceedings for that purpose have been instituted or, to their knowledge, have been threatened; and (C) since the date of the most recent financial statements included in the Prospectus, as amended and supplemented, there has been no material adverse change in the consolidated financial condition or results of operations of the Company and its subsidiaries, taken as a whole, which is not disclosed in the Prospectus, as amended or supplemented. (iv) KPMG LLP, Independent Registered Public Accounting Firm or another nationally recognized independent accounting firm shall have furnished to the Agents a letter or letters, dated the Commencement Date or the Settlement Date, as the case may be, in form and substance reasonably satisfactory to the Agents, to the effect set forth in Exhibit H and Exhibit I hereto. (v) The Company shall have furnished to the Agents such appropriate further information, certificates and documents as the Agents may reasonably request. 6. Indemnification and Contribution. (a) The Company will indemnify and hold harmless each of you against any losses, claims, damages or liabilities, joint or several, to which each of you may become subject under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in either Registration Statement when it became effective, the Second Registration Statement or the Prospectus, or any amendment or supplement thereto, or any related preliminary Prospectus, or arise out of or are 13 based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading and will reimburse each of you for any legal or other expenses reasonably incurred by such Agent in connection with investigating or defending against such loss, claim damage, liability or action; provided, however, that (i) the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of any of you specifically for use in the preparation thereof, and (ii) such indemnity with respect to any preliminary Prospectus, the Prospectus or any preliminary supplemental prospectus, shall not inure to the benefit of any of you (or any person controlling you) if the Company shall have delivered sufficient quantities of the Prospectus, as amended and supplemented, to you within a reasonable time prior to the earlier of the delivery of the written confirmation of the sale of such Notes or the delivery of such Notes to the person asserting such loss, claim, damage, liability or action for which indemnification is sought, and the Prospectus as so amended and supplemented (excluding documents incorporated by reference) was not sent or given to such person by you at or prior to the earlier of the delivery of the written confirmation of the sale of such Notes or the delivery of such Notes to such person in any case where such sending or giving of a prospectus is required by the Act, and the untrue statement or omission of a material fact contained in such preliminary prospectus, such Prospectus or such preliminary supplemental prospectus, was corrected in the Prospectus, as so amended and supplemented, provided to you. (b) Each Agent will indemnify and hold harmless the Company against any losses, claims, damages or liabilities to which the Company may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained any part of either Registration Statement when it became effective, or the Second Registration Statement or the Prospectus, or any amendment or supplement thereto, or any related Preliminary Prospectus, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of any Agent specifically for use in the preparation thereof, and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending against any such loss, claim, damage, liability or action. (c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve the indemnifying party from any liability which the indemnifying party may have to any indemnified party otherwise than under such subsection. In case any such action shall be brought against any indemnified party, and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in and, to the extent that it shall wish, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified 14 party, be counsel to the indemnified party), and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. (d) If the indemnification provided for in this Section 6 is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and by each of you on the other from the offering of the Notes from which such losses, claims, damages or liabilities arose, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and by each of you on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and by each of you on the other shall be deemed to be in the same proportion as the total net proceeds from the offering of the Notes from which such losses, claims, damages or liabilities arose (before deducting expenses) received by the Company bear to the total commissions received by each of you in connection with such offering. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by any of you and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The Company and each of you agree that it would not be just and equitable if contributions pursuant to this subsection (d) were to be determined by pro rata allocation (even if you were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in the first sentence of this subsection (d). The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim (which shall be limited as provided in subsection (c) above if the indemnifying party has assumed the defense of any such action in accordance with the provisions thereof) which is the subject of this subsection (d). Notwithstanding the provisions of this subsection (d), none of you shall be required to contribute any amount in excess of the amount by which the total price at which the Notes sold by the Company from which such losses, claims, damages or liabilities arose pursuant to offers solicited by such Agent were offered to the public exceeds the amount of any damages which such Agent has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Agents' obligations in this subsection (d) to contribute shall be several in such proportion so that each Agent is responsible for the portion represented by the percentage that the commission received by such Agent from the offering of the Notes bear to the public offering price of such Notes, and not joint. Promptly after receipt by an indemnified 15 party under this subsection (d) of the notice of the commencement of any action against such party in respect of which a claim for contribution may be made against an indemnifying party under this subsection (d), such indemnified party shall notify the indemnifying party in writing of the commencement thereof if the notice specified in subsection (c) above has not been given with respect to such action; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under this subsection (d). (e) The obligations of the Company under this Section 6 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any of you within the meaning of the Act or the Exchange Act; and the obligations of each of you under this Section 6 shall be in addition to any liability which you may otherwise have and shall extend, upon the same terms and conditions, to each director of the Company (including any person who, with his or her consent, is named in a Registration Statement as about to become a director of the Company), to each officer of the Company who has signed a Registration Statement and to each person, if any, who controls the Company within the meaning of the Act or the Exchange Act. 7. Termination. This Agreement will continue in effect until terminated as provided in this Section 7. This Agreement may be terminated by either the Company as to any Agent or by any Agent insofar as this Agreement relates to such Agent by giving written notice of such termination to such Agent or the Company, as the case may be. The termination of this Agreement shall not require termination of any agreement by the Purchasing Agent to purchase Notes as principal, and the termination of any such Agreement shall not require termination of this Agreement. If this Agreement is terminated, neither party shall have any liability to the other party hereto, except as provided in the first sentence of the fourth paragraph of Section 2(a), the last proviso of Section 4(A)(b), and Sections 4(A)(g), 4(A)(h), 6, 8 and 11, and except that, if at the time of termination an offer to purchase any of the Notes has been accepted by the Company but the time of delivery to the purchaser of the Note or Notes relating thereto has not occurred, the Company's representations and warranties stated in Section 2 and its obligations under the Administrative Procedures, and in Sections 2(c), 4(A)(a), 4(A)(b), 4(A)(c), 4(A)(e), 4(A)(i), 4(A)(j), 4(A)(k), 4(A)(1), 4(A)(m), 4(A)(o), 4(A)(q), 4(A)(r) and 5 shall also remain in full force and effect and not be terminated until the delivery of such Notes. 8. Representations and Indemnities to Survive. With respect to any Agent's solicitation of offers to purchase Notes or the Purchasing Agent's obligation to purchase Notes pursuant to any Terms Agreement or any Agent's commitment to purchase Notes from the Purchasing Agent, the respective agreements, representations, warranties, indemnities and other statements of the Company or its officers and of any of you set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of you or the Company or any of the officers, directors or controlling persons referred to in Section 6 hereof, and will survive delivery of and payment for the Notes for a period extending to the earlier of (i) three years from the corresponding Settlement Date for such Notes or (ii) the expiration of any applicable statute of limitations governing such solicitation or purchase of Notes. 16 9. Notices. All communications hereunder will be in writing and effective only on receipt, and, if sent to an Agent, will be delivered or sent by mail or transmitted by any standard form of telecommunication and confirmed to such Agent, at the address specified in Schedule I hereto; or, if sent to the Company, will be delivered or sent by mail or transmitted by any standard form of telecommunication and confirmed to it at Citigroup Global Markets Holdings Inc., 388 Greenwich Street, New York, New York 10013, Attention: Treasurer. 10. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers and directors and controlling persons referred to in Section 6 hereof. Nothing expressed or implied in this Agreement or any Terms Agreement is intended or shall be construed to give any person, firm or corporation, other than the parties hereto and their respective successors and the controlling persons and officers and directors referred to in Section 6 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any Terms Agreement or any provision herein or therein contained. This Agreement and any Terms Agreement and all conditions and provisions hereof and thereof except to the extent provided for in Section 5 hereof are intended to be for the sole and exclusive benefit of the parties hereto and their respective successors and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Notes shall be deemed to be a successor by reason merely of such purchase. This Agreement and the rights and obligations of any of you hereunder may not be assigned without the prior written consent of the Company. 11. Waivers, Etc. Neither any failure nor delay on the part of any party to exercise any right, remedy, power or privilege under this Agreement (singly and collectively referred to as a "Right") shall operate as a waiver of such Right, nor shall any single or partial exercise of any Right preclude any other or further exercise of any Right, nor shall any waiver of any Right with respect to any occurrence be construed as a waiver of any Right with respect to any other occurrence. 12. Applicable Law. This Agreement will be governed by and construed in accordance with the laws of the State of New York. 17 If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement between the Company and you. Very truly yours, CITIGROUP GLOBAL MARKETS HOLDINGS INC. By: _____________________________________ Name: Title The foregoing Agreement is hereby confirmed and accepted as of the date hereof: CITIGROUP GLOBAL MARKETS INC. By: ______________________________ Name: Title: A.G. EDWARDS & SONS, INC. By: ______________________________ Name: Title: EDWARD D. JONES & CO., L.P. By: ______________________________ Name: Title: 18 MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: ______________________________ Name: Title: MORGAN STANLEY & CO. INCORPORATED By: ______________________________ Name: Title: UBS FINANCIAL SERVICES INC. By: ______________________________ Name: Title: UBS FINANCIAL SERVICES INC. By: ______________________________ Name: Title: WACHOVIA CAPITAL MARKETS, LLC By: ______________________________ Name: Title: 19 SCHEDULE I AGENT CONTACT INFORMATION S-I SCHEDULE II SCHEDULE OF COMMISSIONS The following commissions are payable as a percentage of the non-discounted public offering price of each note sold through the Purchasing Agent.
Term of Note Commission Rate - ------------ ---------------
S-II EXHIBIT A CITIGROUP GLOBAL MARKETS HOLDINGS INC. Retail Medium-Term Notes, Series F Administrative Procedures [ ], 20[ ] The Retail Medium-Term Notes, Series F (the "Notes") of Citigroup Global Markets Holdings Inc. (the "Company") are to be offered on a continuing basis. Citigroup Global Markets Inc. (the "Purchasing Agent"), A.G. Edwards & Sons, Inc., Edward D. Jones & Co., L.P., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated, UBS Financial Services Inc., Wachovia Capital Markets, LLC., each as agents (collectively, the "Agents") have agreed to solicit purchases of Notes issued in fully registered form. No Agent will be obligated to purchase Notes for its own account. The Notes are being sold pursuant to a Global Selling Agency Agreement between the Company and the agents named therein (including the Agents) dated the date hereof (the "Agency Agreement") and one or more terms agreement substantially in the form attached as Exhibit B to the Agency Agreement (each a "Terms Agreement"). The Notes have been registered with the Securities and Exchange Commission (the "Commission"). JPMorgan Chase Bank, as successor trustee (the "Trustee"), is the trustee under the Indenture, dated as of December 1, 1988, as amended from time to time, under which the Notes will be issued (the "Indenture"). The Notes will constitute part of the senior debt of the Company and will rank equally with all other unsecured and unsubordinated debt of the Company. The Agency Agreement provides that whenever the Company determines from time to time to sell Notes pursuant to the Agency Agreement, it will enter into a Terms Agreement relating to such sale between the Company and the Purchasing Agent, with the Purchasing Agent purchasing such Notes as principal for resale to other Agents or dealers (the "Selected Dealers") each of whom will purchase as principal. Each Agent or participating Selected Dealer will then resell the Notes directly to its customers pursuant to a Master Selected Dealer Agreement attached as Exhibit J to the Agency Agreement. Unless otherwise specified in the applicable Pricing Supplement, the Notes will be issued in book-entry form (each, a "Book-Entry Note") and will be represented by a fully registered master global note certificate (the "Master Global Note"). The Master Global Note shall be in a form approved by the Issuer, the Agents, The Depository Trust Company ("DTC") and the Trustee. Prior to the issuance of any Notes, the Trustee shall authenticate the Master Global Note and the DTC Agent (as defined below) will hold it as custodian for DTC. Except under the limited circumstances described in the Indenture, beneficial owners of Book-Entry Notes will not be entitled to receive a certificate representing such Notes. A-1 The procedures to be followed during, and the specific terms of, the solicitation of orders by the Agents and the sale as a result thereof by the Company are explained below. Administrative and record-keeping responsibilities will be handled for the Company by its Treasury Department. The Company will advise the Agents and the Trustee in writing of those persons handling administrative responsibilities with whom the Agent and the Trustee are to communicate regarding orders to purchase Notes and the details of their settlement. The term "Trustee" as used in these procedures means the Trustee and any other agents appointed by the Trustee or the Company. Administrative procedures and specific terms of the offering are explained below. Book-Entry Notes will be issued in accordance with the administrative procedures set forth below, as adjusted in accordance with changes in DTC's operating requirements. Unless otherwise defined herein, terms defined in the Indenture, the Agency Agreement, the Notes or the Prospectus Supplement or the Pricing Supplement relating to the Notes shall be used herein as therein defined. Notes for which interest is calculated on the basis of a fixed interest rate are referred to herein as "Fixed Rate Notes". Notes for which interest is calculated on the basis of a floating interest rate are referred to herein as "Floating Rate Notes". To the extent the procedures set forth below conflict with the provisions of the Notes, the Indenture, DTC's operating requirements or the Agency Agreement, the relevant provisions of the Notes, the Indenture, DTC's operating requirements and the Agency Agreement shall control. Administrative Procedures for Notes In connection with the qualification of the Book-Entry Notes for eligibility in the book-entry system maintained by DTC, Citibank, N.A. (the "DTC Agent") will perform the custodial, document control and administrative functions described below. Citibank, N.A. will perform such functions in accordance with its respective obligations under a Bring-Down Letter of Representations from the Company and Citibank, N.A. to DTC dated as of the date hereof and a Medium-Term Note Certificate Agreement between Citibank, N.A. and DTC, dated as of October 31, 1988 and as amended to date, and its obligations as a participant in DTC, including DTC's Same-Day Funds Settlement system ("SDFS"). Issuance: All Book-Entry Notes will be represented initially by a single Master Global Note in fully registered form without coupons. The Master Global Note will be dated and issued as of the date of its authentication by the DTC Agent. The Master Global Note will not represent any Note in certificated form. Identification Numbers: The Company has arranged with the CUSIP Service Bureau of Standard & Poor's Ratings Services (the "CUSIP Service Bureau") for the reservation of a series of CUSIP numbers which series consists of approximately 900 CUSIP numbers and relates to the Book-Entry Notes. The Company has obtained from the CUSIP Service Bureau a written list of such reserved CUSIP numbers. The DTC Agent will assign CUSIP numbers to Book-Entry Notes as described below under Settlement Procedure "B". DTC will notify the CUSIP Service Bureau periodically of the CUSIP numbers that A-2 the DTC Agent has assigned to Book-Entry Notes. The DTC Agent will notify the Company at any time when fewer than 100 of the reserved CUSIP numbers remain unassigned to Book-Entry Notes, and, if it deems necessary, the Company will reserve additional CUSIP numbers for assignment to Book-Entry Notes. Upon obtaining such additional CUSIP numbers, the Company shall deliver a list of such additional CUSIP numbers to the DTC Agent, as needed, and to DTC. Registration: The Master Global Note will be registered in the name of CEDE & CO., as nominee for DTC, on the securities register for the Notes (the "Securities Register") maintained under the Indenture. The beneficial owner of a Book-Entry Note (or one or more indirect participants in DTC designated by such owner) will designate one or more participants in DTC (with respect to such Book-Entry Note, the "Participants") to act as agent or agents for such owner in connection with the book-entry system maintained by DTC, and DTC will record in book-entry form, in accordance with instructions provided by such Participants, a credit balance with respect to such beneficial owner in such Book-Entry Note in the account of such Participants. The ownership interest of such beneficial owner (or such participant) in such Book-Entry Note will be recorded through the records of such Participants or through the separate records of such Participants and one or more indirect participants in DTC. Transfers: Transfers of interests in a Book-Entry Note will be accomplished by book entries made by DTC and, in turn, by Participants (and in certain cases, one or more indirect participants in DTC) acting on behalf of beneficial transferors and transferees of such Note. Consolidation and The DTC Agent may deliver to DTC and the CUSIP Service Exchanges: Bureau at any time a written notice of consolidation (a copy of which shall be maintained in the records of the DTC Agent described below) specifying (i) the CUSIP numbers of two or more outstanding Book-Entry Notes that have the same Terms and for which interest has been paid to the same date, (ii) a date, occurring at least thirty days after such written notice is delivered and at least thirty days before the next Interest Payment Date for such Book-Entry Notes shall be consolidated, and (iii) a new CUSIP number to be assigned to such consolidated Book-Entry Notes. Upon receipt of such a notice, DTC will send to its Participants (including the DTC Agent) a written reorganization notice to the effect that such consolidation will occur on such date. Prior to the specified consolidation date, the DTC Agent will deliver to the CUSIP Service Bureau a written notice setting forth such consolidation date and such new CUSIP number and stating that, as of such consolidation date, the CUSIP numbers of the Book-Entry Notes to be consolidated will no longer be valid.On A-3 the specified consolidation date, the DTC Agent will consolidate on its records such Book-Entry Notes as a single Book-Entry Note bearing the new CUSIP number and dated the last Interest Payment Date to which interest has been paid on the underlying Book-Entry Notes, and the CUSIP numbers of the consolidated Book-Entry Notes will, in accordance with CUSIP Service Bureau procedures, be canceled and not immediately reassigned. Maturities: Each Note will mature on a date (the "Maturity Date") nine months or more after the issue date for such Note. A Floating Rate Note will mature only on an Interest Payment Date for such Note. Denominations: The Notes will be issued in principal amounts of $1,000 or any amount in excess thereof that is an integral multiple of $1,000. Notice of Redemption The DTC Agent will give notice to DTC prior to each Dates: Redemption Date (as specified in the Note) if any at the time and in the manner set forth in the Letter. Interest: General. Unless otherwise indicated in the applicable Pricing Supplement, interest, if any, on each Note will accrue from the Original Issue Date (or such other date on which interest otherwise begins to accrue if different than the Original Issue Date) of such Note for the first interest period or the last date to which interest has been paid, if any, for each subsequent interest period and will be calculated and paid in the manner and on the Interest Payment Dates described in the Prospectus (as defined in the Agency Agreement), as supplemented by the applicable Pricing Supplement. Each payment of interest on a Note will include interest accrued to but excluding the Interest Payment Date; provided that in the case of Floating Rate Notes that reset daily or weekly, interest payments will include interest accrued to but excluding the next preceding Regular Record Date, except that at stated Maturity, the interest payable will include interest accrued to, but excluding, the Maturity Date. The Regular Record Date with respect to any Interest Payment Date for a Fixed Rate Note or a Floating Rate Note shall be the date (whether or not a Business Day) fifteen calendar days immediately preceding such Interest Payment Date. Standard & Poor's Ratings Services will use the information received in the pending deposit message described under Settlement Procedure "C" below in order to include the amount of any interest payable and certain other information regarding the related Notes in the appropriate daily bond report published by Standard & Poor's Ratings Services. A-4 Unless otherwise specified in the applicable Pricing Supplement, interest on each Note will be payable either monthly, quarterly, semiannually or annually on each Interest Payment Date and at Maturity (or on the date of redemption or repayment if a Note is repurchased by the Company prior to maturity pursuant to mandatory or optional redemption or repayment provisions of the Survivor's Option). Interest will be payable to the person in whose name a Note is registered at the close of business on the Regular Record Date next preceding each Interest Payment Date; provided, however, interest payable at Maturity, on a date of redemption or repayment or in connection with the exercise of the Survivor's Option will be payable to the person to whom principal shall be payable. Unless otherwise specified in the applicable Pricing Supplement, the Interest Payment Dates for a Fixed Rate Note that provides for monthly interest payments shall be the fifteenth day of each calendar month, commencing in the calendar month that next succeeds the month in which the Note is issued. In the case of a Fixed Rate Note that provides for quarterly interest payments, the Interest Payment Dates shall be the fifteenth day of each third month, commencing in the third succeeding calendar month following the month in which the Note is issued. In the case of a Fixed Rate Note that provides for semi-annual interest payments, the Interest Payment dates shall be the fifteenth day of each sixth month, commencing in the sixth succeeding calendar month following the month in which the Note is issued. In the case of a Fixed Rate Note that provides for annual interest payments, the Interest Payment Date shall be the fifteenth day of every twelfth month, commencing in the twelfth succeeding calendar month following the month in which the Note is issued. The Interest Payment Dates for a Floating Rate Note will be the dates specified in the applicable Pricing Supplement. The interest rates the Company will agree to pay on newly-issued Notes are subject to change without notice by the Company from time to time, but no such change will affect any Notes already issued or as to which an offer to purchase has been accepted by the Company. Business Day: "Business Day" means, unless otherwise specified in the applicable Pricing Supplement, any weekday that is (1) not a legal holiday in New York, New York and (2) not a day on which banking institutions in New York, New York are authorized or required by law or regulation to be closed. A-5 Payments of Principal Payment of Interest Only. Promptly after each Regular and Interest: Record Date, the DTC Agent will deliver to the Company and DTC a written notice setting forth, by CUSIP number, the amount of interest to be paid on each Book-Entry Note on the following Interest Payment Date (other than an Interest Payment Date coinciding with Maturity) and the total of such amounts. DTC will confirm the amount payable on each Book-Entry Note on such Interest Payment Date by reference to the appropriate daily bond reports published by Standard & Poor's Ratings Services. The Company will pay to the DTC Agent the total amount of interest due on such Interest Payment Date (other than at Maturity), and the DTC Agent will pay such amount to DTC, at the times and in the manner set forth below under "Manner of Payment". If any Interest Payment Date for a Book-Entry Note is not a Business Day, the payment due on such day shall be made on the next succeeding Business Day and no interest shall accrue as a result of such delayed payment. Payments at Maturity or Upon Redemption. On or about the first Business Day of each month, the DTC Agent will deliver to the Company, DTC and the DTC Agent a written list of principal and interest to be paid on each Book-Entry Note maturing either on a Maturity Date or on a Redemption Date in the following month. The DTC Agent, the Company and DTC will confirm the amounts of such principal and interest payments with respect to each Book-Entry Note on or about the fifth Business Day preceding the Maturity Date or Redemption Date of such Book-Entry Note. On or before such Maturity or Redemption, the Company will pay to the DTC Agent the principal amount of such Book-Entry Note, together with interest due on such Maturity Date. The DTC Agent will pay such amount to DTC at the times and in the manner set forth below under "Manner of Payment". If any Maturity of a Book-Entry Note is not a Business Day, the payment due on such day shall be made on the next succeeding Business Day and no interest shall accrue on such payment for the period from and after such Maturity Date or Redemption Date. Promptly after payment to DTC of the principal and interest due on a Maturity Date or on a Redemption Date of such Book-Entry Note, the DTC Agent will cancel such Book-Entry Note in accordance with the provisions of the Indenture and record an appropriate debit advice on the Master Global Note. Manner of Payment. The total amount of any principal and interest due on Book-Entry Notes on any Interest Payment Date or at Maturity or upon redemption shall be paid by the Company to the DTC Agent in immediately available funds no later than 9:30 A.M. (New York City time) on such date. The Company will make such payment on such Book-Entry Notes by instructing the DTC Agent to withdraw funds from an account maintained by the Company with the A-6 DTC Agent. The Company will confirm any such instructions in writing to such DTC Agent. Prior to 10:00 A.M. (New York City time) on the Maturity Date or as soon as possible thereafter, such DTC Agent will pay by separate wire transfer (using Fedwire message entry instructions in a form previously specified by DTC) to an account at the Federal Reserve Bank of New York previously specified by DTC, in funds available for immediate use by DTC, each payment of principal (together with interest thereon) due on a Book-Entry Note on such Maturity Date or Redemption Date. On each Interest Payment Date (other than at Maturity), interest payments shall be made to DTC, in same day funds, in accordance with existing arrangements between the DTC Agent and DTC. On each such date, DTC will pay, in accordance with its SDFS operating procedures then in effect, such amounts in funds available for immediate use to the respective Participants in whose names the Book-Entry Notes are recorded in the book-entry system maintained by DTC. Neither the Company nor the DTC Agent shall have any direct responsibility or liability for the payment by DTC to such Participants of the principal of and interest on the Book-Entry Notes. Withholding Taxes. The amount of any taxes required under applicable law to be withheld from any interest payment on a Book-Entry Note will be determined and withheld by the Participant, indirect participant in DTC or other Person responsible for forwarding payments and materials directly to the beneficial owner of such Note. Procedures upon Company Notice to DTC Agent regarding Company's Company Notice Exercise of Optional Redemption. At least 60 days regarding Company's prior to the date on which it intends to redeem any Exercise of Optional Book-Entry Note, the Company will notify the DTC Agent Redemption: (with a copy to the Trustee) that it is exercising such option with respect to such Book-Entry Note on such date. DTC Agent Notice to DTC regarding Company's Exercise of Optional Redemption. After receipt of notice that the Company is exercising its option to redeem any Book-Entry Note, the DTC Agent will, at least 30 days before the redemption date for such Book-Entry Note, hand deliver to DTC a notice identifying such Book-Entry Note by CUSIP number and informing DTC of the Company's exercise of such option with respect to such Book-Entry Note. Deposit of Redemption Price. On or before any redemption date, the Company shall deposit with the DTC Agent an amount of money sufficient to pay the redemption price, plus interest accrued to such redemption date, for all the Book-Entry Notes or portions thereof that are to be repaid on such redemption date. The DTC Agent will use such money to repay such Book-Entry Notes pursuant to the A-7 terms set forth in such Notes. Payments of Principal DTC Agent Notice to Company of Option to be Repaid. and Interest Upon Upon receipt of notice of exercise of the option for Exercise of Optional repayment, the DTC Agent shall give notice to the Repayment: Company (with a copy of such notice to the Trustee) not less than 20 days prior to each Optional Repayment Date of such Optional Repayment Date and of the principal amount of Book-Entry Notes to be repaid on such Optional Repayment Date. Deposit of Repayment Price. On or prior to any Optional Repayment Date, the Company shall deposit with the DTC Agent an amount of money sufficient to pay the optional repayment price, and accrued interest thereon to such date, of all the Book-Entry Notes or portions thereof which are to be repaid on such date. The DTC Agent will use such money to repay such Book-Entry Notes pursuant to the terms set forth in such Notes. Procedure for Rate The Company and the Purchasing Agent will discuss from Setting and Posting: time to time the aggregate principal amount of, the issuance price of, and the interest rates to be borne by, Notes that may be sold as a result of the solicitation of orders by the Agents. If the Company decides to set prices of, and rates borne by, any Book-Entry Notes in respect of which the Agents are to solicit orders to purchase (the setting of such prices and rates to be referred to herein as "Posting") or if the Company decides to change prices or rates previously posted by it, it will promptly advise the Agents of the prices and rates to be posted. The DTC Agent will assign a separate CUSIP number for each tranche of Notes to be posted, and will so advise and notify the Company, the Trustee and the Purchasing Agent of said assignment by telephone and/or by telecopier or by other electronic transmission. The Purchasing Agent will include the assigned CUSIP number on all Posting notices communicated to the Agents and Selected Dealers. Offering of Notes: In the event that there is a Posting, the Purchasing Agent will communicate to each of the Agents and Selected Dealers the relevant terms of, including the Maturities of and the interest rates to be borne by, each tranche of Notes that is the subject of the Posting. Thereafter, the Purchasing Agent, along with the other Agents and Selected Dealers, will solicit offers to purchase the Note accordingly. Purchase of Notes by the The Purchasing Agent will no later than 12:00 noon Purchasing Agent: (New York City time) on the seventh day subsequent to the day on which such Posting occurs, or if such seventh day is not a Business Day on the preceding Business Day, or on such other Business Day and time as shall be mutually agreed upon by the Company and the Agents (any such day, a "Trade Day"), (i) complete, execute and deliver to the Company a A-8 Terms Agreement that sets forth, among other things, the amount of each tranche that the Purchasing Agent is offering to purchase or (ii) inform the Company that none of the Notes of a particular tranche will be purchased by the Purchasing Agent. Acceptance and Unless otherwise instructed by the Company, the Rejection of Orders: Purchasing Agent will advise the Company promptly by telephone or by other electronic transmission of all orders to purchase Notes received by each Agent, other than those rejected by it in whole or in part in the reasonable exercise of its discretion. Unless otherwise agreed by the Company and the Agents, the Company has the sole right to accept orders to purchase Notes and may reject any such orders in whole or in part. Upon receipt of a completed and executed Terms Agreement from the Purchasing Agent, the Company will (i) promptly execute and return such Terms Agreement to the Purchasing Agent or (ii) inform the Purchasing Agent that its offer to purchase the Notes of a particular tranche has been rejected, in whole or in part. The Purchasing Agent will thereafter promptly inform the other Agents and participating Selected Dealers of the action taken by the Company. Preparation of Pricing If any order to purchase a Book-Entry Note is accepted Supplement: by or on behalf of the Company, the Company will prepare a pricing supplement (substantially in the form attached to the Agency Agreement as Exhibit E, each a "Pricing Supplement") reflecting the terms of such Book-Entry Note, will file such Pricing Supplement with the Commission in accordance with the applicable paragraph of Rule 424(b) under the Act, will deliver such number of copies thereof to the Agent as the Agent shall request and will, on the Agent's behalf, file such Pricing Supplement with the National Association of Securities Dealers, Inc. (the "NASD"). The Company shall use its reasonable best efforts to send such Pricing Supplement by email or facsimile to the Purchasing Agent and the Trustee by 3:00 P.M. (New York City Time) on the applicable Trade Date. The Purchasing Agent shall use its reasonable best efforts to send such Pricing Supplement and the Prospectus by email or telecopy or overnight express (for delivery by the close of business on the applicable Trade Date) to each Agent (or Selected Dealer) which made or presented the offer to purchase the applicable Note and the Trustee at the following applicable address: If to A.G. Edwards & Sons, Inc., to: 1 North Jefferson Avenue St. Louis, MO 63103 Attention: A-9 Telephone: Facsimile: E-Mail: If to Edward D. Jones & Co., L.P., to: Corporate Board Department 12555 Manchester Road St. Louis, MO 63131 Attention: Telephone: Facsimile: E-Mail: If to Merrill Lynch, Pierce, Fenner & Smith Incorporated, to: Merrill Lynch & Co. Merrill Lynch Production Technologies 4 Corporate Place Piscataway, NJ 08854 Attention: Telephone: Facsimile: E-Mail: If to Morgan Stanley & Co. Incorporated, to: 1585 Broadway, 2nd Floor New York, NY 10036 Attention: Telephone: Facsimile: E-Mail: If to UBS Financial Services Inc., to: 800 Harbor Blvd. Weehawken, NJ 07086-6791 Attention: Telephone: Facsimile: E-Mail: If to Wachovia Capital Markets, LLC, to: One Wachovia Center, DC-08 301 South College Street Charlotte, NC 28288-0602 Attention: A-10 Telephone: Facsimile: E-Mail: If to the Trustee, to: JPMorgan Chase Bank Corporate Trust Services 153 West 51st Street, 5th Floor New York, NY 10019 Attention: Telephone: Facsimile: E-Mail: Each such Agent (or Selected Dealer), in turn, pursuant to the terms of the Agency Agreement and the Master Selected Dealer Agreement will cause to be delivered a copy of the Prospectus and the applicable Pricing Supplement to each purchaser of Notes from such Agent or Selected Dealer. In each instance that a Pricing Supplement is prepared, the Agent will affix the Pricing Supplement to the Prospectuses prior to their use. Outdated Pricing Supplements and the Prospectuses to which they are attached (other than those retained for files) will be destroyed. Suspension of Subject to the Company's representations, warranties Solicitation; and covenants contained in the Agency Agreement, the Amendment or Company may instruct the Agents to suspend at any Supplement: time, for any period of time or permanently, the solicitation of orders to purchase Notes. Upon receipt of such instructions, each Agent will forthwith suspend solicitation until such time as the Company has advised it that such solicitation may be resumed. In the event that at the time the Company suspends solicitation of purchases there shall be any orders outstanding for settlement, the Company will promptly advise the Agents, the Trustee and the DTC Agent whether such orders may be settled and whether copies of the Prospectus as in effect at the time of the suspension, together with the appropriate Pricing Supplement, may be delivered in connection with the settlement of such orders. The Company will have the sole responsibility for such decision and for any arrangements that may be made in the event that the Company determines that such orders may not be settled or that copies of such Prospectus may not be so delivered. A-11 Delivery of Prospectus: A copy of the Prospectus and a Pricing Supplement relating to a Note must accompany or precede the earliest of any written offer of such Note, confirmation of the purchase of such Note and payment for such Note by its purchaser. If notice of a change in the terms of the Notes is received by an Agent or Selected Dealer between the time an order for a Note is placed and the time written confirmation thereof is sent by the Agent or Selected Dealer to a customer or his agent, such confirmation shall be accompanied by a Prospectus and Pricing Supplement setting forth the terms in effect when the order was placed. Each Agent or Selected Dealer will deliver a Prospectus and Pricing Supplement as herein described with respect to each Note sold by it. The Company will make such delivery if such Note is sold directly by the Company to a purchaser (other than an Agent or Selected Dealer). Confirmation: For each order to purchase a Note solicited by an Agent and accepted by or on behalf of the Company, the Purchasing Agent will issue a confirmation, which confirmation may be delivered by facsimile or other electronic transmission, to each Agent or Selected Dealer, with a copy to the Company, setting forth the details set forth above and delivery and payment instructions. In addition, the Purchasing Agent, other Agent or Selected Dealer, as the case may be, will deliver to investors purchasing the Notes the Prospectus (including the Pricing Supplement) in relation to such Notes prior to or simultaneously with delivery of the confirmation of sale or delivery of the Notes. Settlement: The receipt by the Company of immediately available funds in payment for a Note and the entry by the DTC Agent of an SDFS deliver order through DTC's Participant Terminal System to credit such Note to the account of a Participant purchasing, or acting for the purchaser of such Note, shall constitute "settlement" with respect to such Note, and the date of such settlement, the "Settlement Date." All orders accepted by the Company will be settled on the third Business Day next succeeding the date of acceptance pursuant to the timetable for settlement set forth below, unless the Company and the Purchasing Agent agree to settlement on another day which shall be no earlier than the Business Day succeeding the date of sale. In all cases, the Company will notify the Trustee and the DTC Agent on the date issuance instructions are given. Settlement Procedures: Unless otherwise specified in the applicable Terms Agreement, Settlement Procedures with regard to each Book-Entry Note sold by the Company through the Agents shall be as follows: A. After the acceptance of an offer by the Company with respect A-12 to a Note, the Purchasing Agent will communicate the following details of the terms of such offer (the "Note Sale Information") to the Company by telephone (confirmed in writing) or by facsimile transmission or other electronic transmission: 1. Principal amount of the purchase. 2. Stated Maturity. 3. In the case of a Fixed Rate Note, the interest rate and redemption and repayment provisions (if any) or, in the case of a Floating Rate Note, the Base Rate, Initial Interest Rate (if known at such time), Interest Reset Period, Interest Reset Dates, Spread and/or Spread Multiplier (if any), Minimum Interest Rate (if any), Maximum Interest Rate (if any) and redemption and repayment provisions (if any). 4. Interest Payment Dates and the Interest Payment Period. 5. Settlement Date and Issue Date, if different. 6. Trade Date. 7. Purchasing Agent's commission, determined as provided in the Agency Agreement. 8. Net proceeds to the Company. 9. Price to Public. 10. If a Note is redeemable by the Company or repayable by the Noteholder, such of the following as are applicable: (i) The date on and after which such Note may be redeemed/repaid (the "Redemption/ Repayment Commencement Date"), (ii) Initial redemption/repayment price (% of par), and (iii) Amount (% of par) that the initial redemption/repayment price shall decline (but not below par) on each anniversary of the Redemption/Repayment Commencement A-13 Date. 11. Whether the Note has a Survivor's Option. 12. Whether the Note is an OID Note and, if so, the total amount of OID, the yield to maturity and the initial accrual period OID. 13. DTC Participant Number of the institution through which the customer will hold the beneficial interest in the Book-Entry Note. 14. Any other terms necessary to describe the Book-Entry Note. B. The Company will advise the DTC Agent and the Purchasing Agent by telephone (confirmed in writing at any time on the same date), written telecommunication or other electronic transmission of the information set forth in Settlement Procedure "A" above. Each such communication by the Company shall constitute a representation and warranty by the Company to the DTC Agent, the Trustee and the Agents that (i) such Note is then, and at the time of issuance and sale thereof will be, duly authorized for issuance and sale by the Company; (ii) such Note will conform with the terms of the Indenture for such Note; and (iii) upon issuance of such Book-Entry Note, the aggregate principal amount of all Notes issued under the Indenture will not exceed the aggregate principal amount of Notes authorized for issuance at such time by the Company. The DTC Agent will then assign a CUSIP number to the Book-Entry Note and notify the Purchasing Agent and the Company by telephone (confirmed in writing at any time on the same date), written telecommunication or other electronic transmission of such CUSIP number as soon as practicable. C. The DTC Agent will enter a pending deposit message through DTC's Participant Terminal System providing the following settlement information to DTC, Standard & Poor's Ratings Services, Interactive Data Corporation, the Agents and, upon request, the Trustee: 1. The information set forth in Settlement Procedure "A". 2. Identification as a Fixed Rate Note or a Floating Rate Note. A-14 3. The Initial Interest Payment Date for such Note, number of days by which such date succeeds the related Regular Record Date and the amount of interest payable on such Initial Interest Payment Date. 4. The Interest Payment Period. 5. The CUSIP number of the Book-Entry Note representing such Notes. 6. The participant account numbers maintained by DTC on behalf of the Trustee and the Purchasing Agent. 7. Whether such Book-Entry Note will represent any other Notes (to the extent known at such time). D. The DTC Agent will complete the Master Global Note as it relates to such Note by filing the applicable Pricing Supplement relating to such Note in the records maintained by it, which records, taken with the Master Global Note, shall evidence such Note. E. DTC will credit such Note to the DTC Agent's participant account at DTC. F. The DTC Agent will enter an SDFS deliver order through DTC's Participant Terminal System instructing DTC to (i) debit such Note to the DTC Agent's participant account and credit such Note to the Purchasing Agent's participant account and (ii) debit the Purchasing Agent's settlement account and credit the DTC Agent's settlement account for an amount equal to the price of such Note less the Purchasing Agent's commission. The entry of such a deliver order shall constitute a representation and warranty by the DTC Agent to DTC that (i) the Master Global Note representing such Note has been issued and authenticated and (ii) the DTC Agent is holding such Master Global Note pursuant to the Medium Term Note Certificate Agreement between the DTC Agent and DTC. G. The Purchasing Agent will enter an SDFS deliver order through DTC's Participant Terminal System instructing DTC (i) to debit such Note to the Purchasing Agent's participant account and credit such Note to the participant accounts of the Agents with respect to such Note and (ii) to debit the settlement accounts of such Agents and credit the settlement account of the Purchasing Agent for an amount equal to the A-15 price of such Note. H. Transfers of funds in accordance with SDFS deliver orders described in Settlement Procedures "F" and "G" will be settled in accordance with SDFS operating procedures in effect on the Settlement Date. I. The DTC Agent will, upon receipt of funds from the Purchasing Agent in accordance with Settlement Procedure "F", credit to an account of the Company maintained at the DTC Agent funds available for immediate use in the amount transferred to the DTC Agent in accordance with Settlement Procedure "F". J. Each Agent and participating Selected Dealer will confirm the purchase of such Note to the purchaser either by transmitting to the Participants with respect to such Note a confirmation order or orders through DTC's institutional delivery system or by mailing a written confirmation to such purchaser. In all cases, the Prospectus as most recently amended or supplemented must accompany or precede such confirmation. K. Monthly, the DTC Agent will send to the Company a statement setting forth the principal amount of Registered Notes outstanding as of the date of such statement and setting forth a brief description of any sales of which the Company has advised the DTC Agent but which have not yet been settled. Settlement Procedures For sales by the Company of Notes solicited by the Timetable: Agents and accepted by the Company for settlement, Settlement Procedures "A" through "K" set forth above shall be completed as soon as possible but not later than the respective times (New York City time) set forth below: A-16
Settlement Procedure Time - --------- -------------------------------------- A 4:00 P.M. on the trade date B 5:00 P.M. on the trade date C 2:00 P.M. on the day before settlement D 9:00 A.M. on settlement date E 10:00 A.M. on settlement date F-G 2:00 P.M. on settlement date H 4:45 P.M. on settlement date I-J 5:00 P.M. on settlement date K Monthly or at the request of the Company
Settlement Procedure "H" is subject to extension in accordance with any extension of Fedwire closing deadlines and in the other events specified in SDFS operating procedures in effect on the settlement date. If settlement of a Book-Entry Note is rescheduled or canceled, the DTC Agent, after receiving notice from the Company or the Purchasing Agent, will deliver to DTC, through DTC's Participant Terminal System, a cancellation message to such effect by no later than 2:00 P.M. on the Business Day immediately preceding the scheduled settlement date. Failure to Settle: If settlement of a Book-Entry Note is rescheduled and the DTC Agent for such Note has not entered an SDFS deliver order with respect to a Note pursuant to Settlement Procedure "F", after receiving notice from the Company or the Purchasing Agent, the DTC Agent shall deliver to DTC, through DTC's Participant Terminal System, as soon as practicable, a withdrawal message instructing DTC to debit such Book-Entry Note to such DTC Agent's participant account. DTC will process the withdrawal message, provided that the DTC Agent's participant account contains a principal amount of Notes that are at least equal to the principal amount to be debited. If a withdrawal message is processed with respect to the Notes represented by a Book-Entry Note, the DTC Agent will mark the Pricing Supplement in its records relating to such Book-Entry Note "cancelled", make appropriate entries in the DTC Agent's records and record an appropriate debit advice on the Master Global Note. The CUSIP number assigned to such Book-Entry Note shall, in accordance with CUSIP Service Bureau procedures, be canceled and not immediately reassigned. If the purchase price for any Note is not timely paid to any relevant Participant with respect to such Note by the beneficial purchaser A-17 thereof (or a Person, including an indirect participant in DTC, acting on behalf of such purchaser), such Participant and, in turn, the Presenting Agent may enter SDFS deliver orders through DTC's Participant Terminal System reversing the orders entered pursuant to Settlement Procedures "F" and "G", respectively. Thereafter, the DTC Agent will deliver the withdrawal message and take the related actions described in the preceding paragraph. If such failure shall have occurred for any reason other than a default by the relevant Agent in the performance of its obligations hereunder and under the Agency Agreement, then the Company will reimburse such Agent for the loss of the use of the funds during the period when they were credited to the account of the Company. Notwithstanding the foregoing, upon any failure to settle with respect to a Book-Entry Note, DTC may take any actions in accordance with its SDFS operating procedures then in effect. In the event of a failure to settle with respect to one or more, but not all, of the Notes to have been represented by a Book-Entry Note, the DTC Agent will provide, in accordance with Settlement Procedures "D". Procedure for Rate Each time after a Posting, if a decision has been Changes: reached to change the interest rates of the Notes subject to such Posting, the Company will promptly advise the Purchasing Agent, which will in turn promptly advise the other Agents; and the Agents will forthwith suspend solicitation of offers to purchase Notes at the prior rates. The Purchasing Agent may telephone the Company with recommendations as to the changed interest rates. The DTC Agent Not to Nothing herein shall be deemed to require the DTC Risk Funds: Agent to risk or expend its own funds in connection with any payment to the Company, DTC, the Agents or the purchasers, it being understood by all parties that payments made by the DTC Agent to the Company, DTC, the Agents or the purchasers shall be made only to the extent that funds are provided to the DTC Agent for such purpose. Advertising Costs: The Company shall have the sole right to approve the form and substance of any advertising an Agent may initiate in connection with such Agent's solicitation to purchase the Notes. The expense of such advertising will be solely the responsibility of such Agent, unless otherwise agreed to by the Company. A-18 EXHIBIT B FORM OF TERMS AGREEMENT Citigroup Global Markets Holdings Inc. 388 Greenwich Street, 38th Floor New York, NY 10013 Attention: Treasury Capital Markets Subject in all respects to the terms and conditions contained in the Global Selling Agency Agreement dated [ ], 20[ ] (the "Agency Agreement"), among Citigroup Global Markets Holdings Inc. (the "Company"), Citigroup Global Markets Inc. (the "Purchasing Agent") and the additional Agents named therein, the undersigned agrees to purchase the following aggregate principal amount of the Company's Retail Medium-Term Notes, Series F (the "Notes"): Principal Amount: $ CUSIP Number: Purchaser: Citigroup Global Markets Inc. Original Issue Date: Interest Rate: [ ] Fixed % Stated Maturity: [ ] Floating (see below) Reoffering Price: 100% of Principal Amount Interest Payment Dates: Accrue to Pay: [ ] Yes [ ] No Interest Reset Period or Interest Reset Dates: Survivor's Option: [ ] Yes [ ] No Base Rate: [ ] CD Rate [ ] Commercial Paper Rate [ ] Federal Funds Rate [ ] LIBOR Telerate [ ] LIBOR Reuters [ ] Treasury Rate [ ] Treasury Rate Constant Maturity [ ] Prime Rate Spread Multiplier: Spread (+/-): Spread Reset: The Spread or Spread Multiplier may not be changed prior to Stated Maturity. Index Maturity: Maximum Interest Rate: Minimum Interest Rate: Optional Redemption: [ ] Yes [ ] No Optional Redemption Dates: Optional Redemption Prices: Optional Repayment: [ ] Yes [ ] No Optional Repayment Dates: Optional Repayment Prices: B-1 Discount Note: [ ] Yes [ ] No Total Amount of OID: Yield to Maturity: Settlement Date, Time and Place: Requirements for delivery, if any, of opinions of counsel, certificates from the Company or its officers or a letter from the Company's independent public accountants: Other terms: The provisions of the Global Selling Agency Agreement and the related definitions are incorporated by reference herein and shall be deemed to have the same force and effect as if set forth in full herein. Date: CITIGROUP GLOBAL MARKETS INC. By: __________________________ Name: Title: Accepted: CITIGROUP GLOBAL MARKETS HOLDINGS INC. By: _________________________ Name: Title: B-2 EXHIBIT C FORM OF AGENT ACCESSION CONFIRMATION [date] To: [Name and address of new Agent] Re: Citigroup Global Markets Holdings Inc. $[ ] Series F Retail Medium-Term Notes Program Ladies and Gentlemen: We refer to the Global Selling Agency Agreement dated [ ], 20[ ] (which agreement, as amended from time to time, is herein referred to as the "Agency Agreement") entered into in respect of the above Series F Retail Medium-Term Notes Program and hereby acknowledge receipt of your Agent Accession Letter to us dated [date]. In accordance with Section 2(d) of the Agency Agreement we hereby confirm that, with effect from the date hereof, you shall become a party to, and a Agent under, the Agency Agreement, vested with all the authority, rights and powers, and subject to all the duties and obligations of an Agent as if originally named as such under the Agency Agreement. Yours faithfully, CITIGROUP GLOBAL MARKETS HOLDINGS INC. By: ______________________________________ Name: Title: cc: DTC Agent Trustee Existing Agents C-1 EXHIBIT D FORM OF AGENT ACCESSION LETTER [date] To: Citigroup Global Markets Holdings Inc. 388 Greenwich Street New York, New York 10013 Re: Citigroup Global Markets Holdings Inc. $[ ] Series F Retail Medium-Term Notes Program Ladies and Gentlemen: We refer to the Global Selling Agency Agreement dated [ ], 20[ ], entered into in respect of the above Series F Retail Medium-Term Note Program and made between Citigroup Global Markets Holdings Inc. (the "Company"), Citigroup Global Markets Inc. (the "Purchasing Agent") and the other Agents party thereto (which agreement, as amended from time to time, is herein referred to as the "Agency Agreement"). We confirm that we are in receipt of the documents referenced below (except to the extent we have waived delivery of such documents): - -- a copy of the Agency Agreement; - -- a copy of all documents referred to in Section 5 of the Agency Agreement; and - -- a letter in a form approved by ourselves from each of the legal advisers referred to in Section 5 of the Agency Agreement addressed to ourselves and giving us the full benefit of the existing legal opinions as of the date of such existing legal opinions, and have found them to our satisfaction. For the purposes of Section 9 of the Agency Agreement our notice details are as follows: (insert name, address, telephone, telecopy, telex and attention). In consideration of the Company appointing us as an Agent under the Agency Agreement, we hereby undertake, for the benefit of the Company and each of the other Agents, that we will perform and comply with all the duties and obligations expressed to be assumed by an Agent under or pursuant to the Agency Agreement. We also undertake to deliver to The Depository Trust Company of New York such pricing letters as it may reasonably require from us in connection with the offer and sale of the Notes. D-1 This letter is governed by, and shall be construed in accordance with, the laws of the State of New York. Yours faithfully, [Name of new Agent] By: ________________________________________ Name: Title: cc: DTC Agent Trustee Existing Agents D-2 EXHIBIT E FORM OF PRICING SUPPLEMENT (Fixed Rate Note) Pricing Supplement No. Pricing Supplement Dated: Rule 424(b)(3) File No. 333-[ ] (To Prospectus Supplement Dated [ ], 2004 and Prospectus Dated [ ], 2004 $[ ] Citigroup Global Markets Holdings Inc. Retail Medium-Term Notes, Series F Due Nine Months or More From Date of Issue Trade Date: Original Issue Date: Lead Agent: Citigroup Global Markets Inc. Agents: CUSIP: Aggregate Principal Amount: $ Price to Public: % Concession: % Net Proceeds to Issuer: $ Interest Rate: % Interest Payment Frequency: First Interest Payment Date: Stated Maturity: Calculation Agent: Survivor's Option: Yes/No Product Ranking: Form of Note: Global/Book-Entry Only Redemption Information: Other Terms: E-1 FORM OF PRICING SUPPLEMENT (Floating Rate Note) Pricing Supplement No. Pricing Supplement Dated: Rule 424(b)(3) File No. 333-[ ] (To Prospectus Supplement Dated [ ], 2004 and Prospectus Dated [ ], 2004 $[ ] Citigroup Global Markets Holdings Inc. Retail Medium-Term Notes, Series F Due Nine Months or More From Date of Issue Trade Date: Original Issue Date: Lead Agent: Citigroup Global Markets Inc. Agents: CUSIP: Aggregate Principal Amount: % Price to Public: % Concession: $ Net Proceeds to Issuer: $ Stated Maturity: Authorized Denominations (if other than as set forth in the Prospectus Supplement): Form of Note: Global/Book-Entry Only Interest Payment Dates: First Interest Payment Date: Accrue to Pay: Yes/No Initial Interest Rate: Base Rate: Calculation Agent: Computation of Interest (if other than as set forth in the Prospectus Supplement): Interest Rest Dates: Rate Determination Dates (if other than as set forth in the Prospectus Supplement): Index Maturity: Spread: Spread Multiplier: Maximum Interest Rate: Minimum Interest Rate: Survivor's Option: Yes/No E-2 Product Ranking: Optional Redemption: Yes/No Optional Redemption Dates: Redemption Prices: Redemption: Optional Repayment: Yes/No Optional Repayment Dates: Optional Repayment Prices: Discount Note: Yes/No Total Amount of OID: Bond Yield to Call: Bond Yield to Maturity: Yield to Maturity: Other Terms: E-3 EXHIBITS F - I FORMS OF OPINIONS, CERTIFICATES AND COMFORT LETTERS EXHIBIT J MASTER SELECTED DEALER AGREEMENT EX-4.U 4 x99885s3exv4wu.txt SIXTH SUPPLEMENTAL INDENTURE Exhibit 4(u) CITIGROUP GLOBAL MARKETS HOLDINGS INC. and DEUTSCHE BANK TRUST COMPANY AMERICAS, as Trustee SIXTH SUPPLEMENTAL INDENTURE Dated as of July 10, 2003 Supplemental Indenture to the Indenture dated as of December 1, 1988, providing for the issuance of series of subordinated debt securities SIXTH SUPPLEMENTAL INDENTURE, dated as of July 10, 2003 (the "Sixth Supplemental Indenture"), between Citigroup Global Markets Holdings Inc., a corporation duly organized and existing under the laws of the State of New York and formerly known as Salomon Smith Barney Holdings Inc. (the "Company"), and Deutsche Bank Trust Company Americas, a corporation duly organized and existing under the laws of the State of New York and formerly known as Bankers Trust Company, as Trustee (the "Trustee"), under the Indenture dated as of December 1, 1988 (the "Original Indenture") as supplemented by the First Supplemental Indenture, dated September 7, 1990, the Second Supplemental Indenture, dated December 14, 1993, the Third Supplemental Indenture, dated July 3, 1996, the Fourth Supplemental Indenture, dated November 28, 1997, and the Fifth Supplemental Indenture, dated July 1, 1999 (collectively the "Supplemental Indentures"). The Supplemental Indentures together with the Original Indenture are herein referred to as the "Indenture." Capitalized terms used but not defined herein shall have the meanings ascribed thereto under the Indenture. WHEREAS, the parties hereto have previously entered into the Indenture to provide for the issuance of and sale by the Company from time to time of its subordinated debt securities (the "Debt Securities"); and WHEREAS, Section 1101(10) of the Indenture provides that the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into an indenture supplemental to the Indenture, in form satisfactory to the Trustee, without the consent of any holder of Debt Securities, to cure any ambiguity, to correct or supplement any provision therein that may be defective or inconsistent with any other provision therein, or to make any other provisions with respect to matters or questions under the Indenture that shall not be inconsistent with any provision of the Indenture, provided that such other provisions shall not adversely affect the interests of the Holders of Outstanding Debt Securities or Coupons, if any, of any series created prior to the execution of such supplemental indenture in any material respect; and WHEREAS, Section 1101(5) of the Indenture authorizes the Company and the Trustee, without the consent of any holder of Debt Securities, to enter into a supplemental indenture to change or eliminate any of the provisions of this Indenture, provided that any such change or elimination shall become effective only when there is no Outstanding Debt Security or Coupon of any series created prior to the execution of such supplemental indenture that is entitled to the benefit of such provision and as to which such supplemental indenture would apply; and WHEREAS, the Company has changed its name from "Salomon Smith Barney Holdings Inc." to "Citigroup Global Markets Holdings Inc."; and WHEREAS, the Company, pursuant to the foregoing authority, proposes in and by this Sixth Supplemental Indenture to amend the Indenture in certain respects; and WHEREAS, the Company has duly authorized the execution and delivery of this Sixth Supplemental Indenture, and all things necessary have been done to make this Sixth Supplemental Indenture a valid agreement of the Company, in accordance with its terms; 1 NOW, THEREFORE, the Company and the Trustee hereby agree as follows: ARTICLE I In the first paragraph of the Indenture, the words "SALOMON SMITH BARNEY HOLDINGS INC." shall be replaced with "CITIGROUP GLOBAL MARKETS HOLDINGS INC." ARTICLE II Section 2.01. Section 501 of the Indenture shall be amended as to Debt Securities originally issued on or after July 10, 2003 by deleting such section in its entirety and substituting therefor the following: Section 501. Events of Default. "Event of Default" wherever used herein with respect to Debt Securities of any series means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law, pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (1) the entry of a decree or order for relief in respect of the Company by a court having jurisdiction in the premises in an involuntary case under the Federal bankruptcy laws, as now or hereafter constituted, or any other applicable Federal or State bankruptcy, insolvency or other similar law, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or other similar official) of the Company or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 90 consecutive days; or (2) the commencement by the Company of a voluntary case under the Federal bankruptcy laws, as now or hereafter constituted, or any other applicable Federal or State bankruptcy, insolvency or other similar law, or the consent by it to the entry of an order for relief in an involuntary case under any such law or to the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or other similar official) of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of its creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company in furtherance of any such action. Section 2.02. Section 502 of the Indenture shall be amended as to Debt Securities originally issued on or after July 10, 2003 by deleting such section in its entirety and substituting therefor the following: 2 Section 502. Acceleration of Maturity; Rescission and Annulment. If an Event of Default with respect to Debt Securities of any series at the time Outstanding occurs and is continuing, then in every such case the Trustee or the Holders of not less than 25% in principal amount of Outstanding Debt Securities of such series may declare the principal amount (or, if any Debt Securities of such series are Discount Securities, such portion of the principal amount of such Discount Securities as may be specified in the terms of such Discount Securities) of and all accrued but unpaid interest on all the Debt Securities of such series to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), and upon any such declaration such principal amount (or specified amount) and interest shall become immediately due and payable. Upon payment of such amounts in the Currency in which such Debt Securities are denominated (except as otherwise provided pursuant to Section 301), all obligations of the Company in respect of the payment of principal of and interest on the Debt Securities of such series shall terminate. At any time after such a declaration of acceleration with respect to Debt Securities of any series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the Outstanding Debt Securities of such series, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if the Company has paid or deposited with the Trustee a sum in the Currency in which such Debt Securities are denominated (except as otherwise provided pursuant to Section 301) sufficient to pay (A) all overdue installments of interest on all Debt Securities of such series or all overdue payments with respect to any related Coupons, (B) the principal of (and premium, if any, on) any Debt Securities of such series that have become due otherwise than by such declaration of acceleration and interest thereon at the rate or rates prescribed therefor in such Debt Securities, (C) to the extent that payment of such interest is lawful, interest upon overdue installments of interest on each Debt Security or upon overdue payments on any Coupons at the rate or rates prescribed therefor in such Debt Securities or Coupons, and (D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; provided, however, that all sums payable under this clause (D) shall be paid in Dollars. No such rescission and waiver shall affect any subsequent default or impair any right consequent thereon. For all purposes under this Indenture, if a portion of the principal of any Discount Securities shall have been accelerated and declared due and payable pursuant to the provisions hereof, then, from and after such declaration, unless such declaration has been 3 rescinded and annulled, the principal amount of such Discount Securities shall be deemed, for all purposes hereunder, to be such portion of the principal thereof as shall be due and payable as a result of such acceleration, and payment of such portion of the principal thereof as shall be due and payable as a result of such acceleration, together with interest, if any, thereon and all other amounts owing thereunder, shall constitute payment in full of such Discount Securities. ARTICLE III Section 3.01. Section 507 of the Indenture shall be renamed "Limitations on Suits; Default" and amended as to Debt Securities originally issued on or after July 10, 2003 by inserting the following at the end thereof: The following events shall be "Defaults" with respect to any such Debt Securities under this Indenture: (A) an Event of Default with respect to such series specified in Section 501; or (B) default in the payment of any interest upon any Debt Security of such series or any payment with respect to the related Coupons, if any, when it becomes due and payable, and continuance of such default for a period of 30 days, whether or not such payment is prohibited by Article Sixteen hereof; or (C) default in the payment of the principal of (or premium, if any, on) any Debt Security of such series at its Maturity, whether or not such payment is prohibited by Article Sixteen hereof; or (D) default in the deposit of any sinking fund payment, when and as due by the terms of any Debt Security of such series, whether or not such payment is prohibited by Article Sixteen hereof; or (E) default in the performance, or breach, of any covenant or warranty of the Company in this Indenture (other than a covenant or warranty a default in whose performance or whose breach is elsewhere in this Section specifically dealt with or which expressly has been included in this Indenture solely for the benefit of Debt Securities of a series other than such series) or established in or pursuant to the Board Resolution or supplemental indenture, as the case may be, pursuant to which the Debt Securities of such series were issued as contemplated by Section 301, and continuance of such default or breach for a period of 60 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Debt Securities of such series, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or (F) any other Default provided with respect to Debt Securities of that series pursuant to Section 301. 4 Section 3.02. In the Indenture, as amended hereby, excepting Section 101, Section 301(17), Section 501, Section 502 and Section 507(A), the words "Event of Default" and "Events of Default" shall be replaced as to Debt Securities originally issued on or after July 10, 2003 with "Default" and "Defaults," respectively. Section 3.03. Section 513 of the Indenture shall be amended as to Debt Securities originally issued on or after July 10, 2003 by deleting such section in its entirety and substituting therefor the following: Section 513. Waiver of Past Defaults. Prior to any declaration of acceleration with respect to such series under Section 502, the Holders of not less than a majority in principal amount of the Outstanding Debt Securities of any series may on behalf of the Holders of all the Debt Securities of any such series and any related Coupons waive any past default hereunder with respect to such series and its consequences, except a default (1) not theretofore cured in the payment of the principal of (or premium, if any) or interest on any Debt Security of such series or in the payment of any related Coupon; or (2) in respect of a covenant or provision hereof that under Article Eleven cannot be modified or amended without the consent of the Holder of each Outstanding Debt Security of such series affected. Upon any such waiver, such default shall cease to exist, and any Default arising therefrom shall be deemed to have been cured, for every purpose of the Debt Securities of such series under this Indenture, but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. Section 3.04. Section 101 of the Indenture shall be amended as to Debt Securities originally issued on or after July 10, 2003 by inserting the following after the twenty-first paragraph thereof: "Default" has the meaning specified in Section 507. Section 3.05. Section 301(17) of the Indenture shall be amended as to Debt Securities originally issued on or after July 10, 2003 by deleting such section in its entirety and substituting therefor the following: (17) any additional Events of Default or Defaults or restrictive covenants provided for with respect to Debt Securities of the series; and 5 ARTICLE IV Section 1001 of the Indenture shall be amended as to Debt Securities originally issued on or after July 10, 2003 by deleting such section in its entirety and substituting therefor the following: Section 1001. Company May Consolidate, etc. Only on Certain Terms. The Company shall not consolidate with or merge into any other corporation or convey, transfer or lease its properties and assets substantially as an entirety to any Person, unless: (1) the corporation formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Company substantially as an entirety (the "successor corporation") shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of (and premium, if any) and interest (including all additional interest, if any, payable pursuant to Section 1202) on all the Debt Securities and the due and punctual payment of any Coupons and the performance of every covenant of this Indenture on the part of the Company to be performed or observed; (2) immediately after giving effect to such transaction and treating any indebtedness that becomes an obligation of the Company as a result of such transaction as having been incurred by the Company at the time of such transaction, no Default, and no event that, after notice or lapse of time, or both, would become a Default, shall have happened or be continuing; and (3) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel each stating that such consolidation, merger, conveyance, transfer or lease and such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with. ARTICLE V Section 5.01. Section 1303 of the Indenture shall be amended as to Debt Securities originally issued on or after July 10, 2003 by inserting the following after the first sentence thereof: Notwithstanding anything to the contrary herein, if then required under applicable capital adequacy guidelines, regulations or policies of the Federal Reserve, the Company may not redeem, repay or repurchase any Debt Securities prior to maturity without the prior approval of the Federal Reserve. 6 Section 5.02. Section 1502 of the Indenture shall be amended as to Debt Securities originally issued on or after July 10, 2003 by inserting the following after the third paragraph thereof: Notwithstanding anything to the contrary herein, if then required under applicable capital adequacy guidelines, regulations or policies of the Federal Reserve, the Company may not be deemed to have been Discharged in respect of any Debt Securities prior to maturity without the prior approval of the Federal Reserve. Section 5.03. Section 101 of the Indenture, as amended hereby, shall be amended as to Debt Securities originally issued on or after July 10, 2003 by inserting the following after the thirtieth paragraph thereof: "Federal Reserve" means the Board of Governors of the Federal Reserve System. ARTICLE VI Section 101 of the Indenture shall be amended as to Debt Securities originally issued on or after July 10, 2003 by deleting the fifty-third paragraph thereof in its entirety and substituting therefor the following: "Senior Indebtedness" means the following indebtedness or obligations, whether outstanding at the date of execution of this Indenture or thereafter incurred, assumed, guaranteed or otherwise created: (i) the principal, premium, if any, and interest in respect of (A) indebtedness of the Company for money borrowed and (B) indebtedness evidenced by securities, notes, debentures, bonds or other similar instruments issued by the Company; (ii) all capital lease obligations of the Company and any synthetic lease or tax retention operating lease; (iii) all obligations of the Company issued or assumed as the deferred purchase price of property, all conditional sale obligations of the Company and all obligations of the Company under any conditional sale or title retention agreement (but excluding trade accounts payable in the ordinary course of business); (iv) all obligations, contingent or otherwise, of the Company in respect of any letters of credit, banker's acceptance, security purchase facilities and similar credit transactions; (v) all obligations of the Company in respect of interest rate swap, cap or other agreements, interest rate future or options contracts, currency swap agreements, currency future or option contracts and other similar agreements; (vi) all obligations of the type referred to in clauses (i) through (v) of other persons for the payment of which the Company is responsible or liable as obligor, guarantor or otherwise; and (vii) all obligations of the type referred to in clauses (i) through (vi) of other persons secured by any lien on any property or asset of the Company (whether or not such obligation is assumed by the Company), except in each case for (1) the Debt Securities or any appurtenant Coupons, (2) any such indebtedness that is by its terms subordinated to or pari passu with the Debt Securities, (3) any junior subordinated debt of the Company that is by its terms subordinated to the Debt Securities, (4) any guarantee now or hereafter entered into by the Company in respect of any junior subordinated debt, trust preferred securities or preferred or preference stock that is by its terms subordinated to the Debt Securities and 7 (5) all other debt securities and guarantees in respect of junior subordinated debt securities issued to any trust, or a trustee of such trust, partnership or other entity affiliated with the Company which is a financing vehicle of the Company (a "Financing Entity") in connection with the issuance by such Financing Entity of preferred securities or other securities guaranteed by the Company pursuant to an instrument that ranks junior to the Debt Securities. ARTICLE VII Section 7.01. (a) Section 1601 of the Indenture shall be amended as to Debt Securities originally issued on or after July 10, 2003 by deleting the first paragraph of such section in its entirety and substituting therefor the following: The Company covenants and agrees, and each Holder of a Debt Security or Coupon, by his acceptance thereof, likewise covenants and agrees, that the indebtedness represented by the Debt Securities and any Coupons and the payment of the principal of (and premium, if any) and interest on each and all of the Debt Securities and the payment of any Coupons is hereby expressly subordinated, to the extent and in the manner hereinafter set forth, in right of payment to the prior payment in full of Senior Indebtedness. (b) Section 1601(b) of the Indenture shall be amended as to Debt Securities originally issued on or after July 10, 2003 by deleting such clause in its entirety and substituting therefor the following: (b) that (i) a default shall have occurred with respect to the payment of principal of (or premium, if any) or interest on or other monetary amounts due and payable on any Senior Indebtedness, or (ii) there shall have occurred an event of default (other than a default in the payment of principal, premium, if any, or interest, or other monetary amounts due and payable) in respect of any Senior Indebtedness, as defined therein or in the instrument under which the same is outstanding, permitting the holder or holders thereof to accelerate the maturity thereof (with notice or lapse of time, or both), and such event of default shall have continued beyond the period of grace, if any, in respect thereof, and, in the cases of subclauses (i) and (ii) of this clause (b), such default or event of default shall not have been cured or waived or shall not have ceased to exist, or Section 7.02. Section 1602 of the Indenture shall be amended as to Debt Securities originally issued on or after July 10, 2003 by deleting such section in its entirety and substituting therefor the following: Section 1602. [Reserved]. ARTICLE VIII Section 8.01. The Trustee accepts the trusts created by this Sixth Supplemental Indenture upon the terms and conditions set forth in the Indenture. The Trustee shall not be 8 responsible or accountable in any manner whatsoever for or in respect of, and makes no representation with respect to, the validity or sufficiency of this Sixth Supplemental Indenture or the due execution hereof by the Company and shall not be responsible in any manner whatsoever for or in respect of the correctness of the recitals and statements contained herein, all of which recitals and statements are made solely by the Company. Section 8.02. Except as amended as set forth above, the Indenture is in all respects ratified and confirmed and the terms, provisions and conditions thereof shall remain in full force and effect. This Sixth Supplemental Indenture shall take effect on the date hereof. Section 8.03. This Sixth Supplemental Indenture may be executed in any number of counterparts, each of which shall be deemed to be an original for all purposes, but such counterparts shall together be deemed to constitute but one and the same instrument. 9 IN WITNESS WHEREOF, each of Citigroup Global Markets Holdings Inc. and Deutsche Bank Trust Company Americas, as Trustee, has caused this Sixth Supplemental Indenture to be signed and acknowledged by one of its officers thereunto duly organized, and its corporate seal to be affixed hereto, and the same to be attested by the signature of its Secretary or one of its Assistant Secretaries, all as of July 10, 2003. CITIGROUP GLOBAL MARKETS HOLDINGS INC. By: /s/ Mark I. Kleinman ---------------------------------- Name: Mark I. Kleinman Title:Executive Vice President and Treasurer Attest: By: s/ Douglas C. Turnbull ------------------------------- Name: Douglas C. Turnbull Title:Assistant Secretary DEUTSCHE BANK TRUST COMPANY AMERICAS By: /s/ Yana Kalachikova ---------------------------------- Name: Yana Kalachikova Title: Associated Attest: By: /s/ Dorothy Robinson -------------------------------- Name: Dorothy Robinson Title: Vice President 10 EX-4.V 5 x99885s3exv4wv.txt FORM OF SEVENTH SUPPLEMENTAL INDENTURE Exhibit 4(v) CITIGROUP GLOBAL MARKETS HOLDINGS INC. and DEUTSCHE BANK TRUST COMPANY AMERICAS, as Trustee SEVENTH SUPPLEMENTAL INDENTURE Dated as of October ____, 2004 Supplemental Indenture to the Indenture dated as of December 1, 1988, providing for the issuance of series of subordinated debt securities SEVENTH SUPPLEMENTAL INDENTURE, dated as of October ___, 2004 (the "Seventh Supplemental Indenture"), between Citigroup Global Markets Holdings Inc., a corporation duly organized and existing under the laws of the State of New York and formerly known as Salomon Smith Barney Holdings Inc. (the "Company"), and Deutsche Bank Trust Company Americas, a corporation duly organized and existing under the laws of the State of New York and formerly known as Bankers Trust Company, as Trustee (the "Trustee"), under the Indenture dated as of December 1, 1988 (the "Original Indenture") as supplemented by the First Supplemental Indenture, dated September 7, 1990, the Second Supplemental Indenture, dated December 14, 1993, the Third Supplemental Indenture, dated July 3, 1996, the Fourth Supplemental Indenture, dated November 28, 1997, the Fifth Supplemental Indenture, dated July 1, 1999, and the Sixth Supplemental Indenture, dated July 10, 2003 (collectively the "Supplemental Indentures"). The Supplemental Indentures together with the Original Indenture are herein referred to as the "Indenture." Capitalized terms used but not defined herein shall have the meanings ascribed thereto under the Indenture. WHEREAS, the parties hereto have previously entered into the Indenture to provide for the issuance of and sale by the Company from time to time of its subordinated debt securities (the "Debt Securities"); and WHEREAS, Section 1101(5) of the Indenture authorizes the Company and the Trustee, without the consent of any holder of Debt Securities, to enter into a supplemental indenture to change or eliminate any of the provisions of this Indenture, provided that any such change or elimination shall become effective only when there is no Outstanding Debt Security or Coupon of any series created prior to the execution of such supplemental indenture that is entitled to the benefit of such provision and as to which such supplemental indenture would apply; and WHEREAS, the Company, pursuant to the foregoing authority, proposes in and by this Seventh Supplemental Indenture to amend the Indenture in certain respects; and WHEREAS, the Company has duly authorized the execution and delivery of this Seventh Supplemental Indenture, and all things necessary have been done to make this Seventh Supplemental Indenture a valid agreement of the Company, in accordance with its terms; NOW, THEREFORE, the Company and the Trustee hereby agree as follows: ARTICLE I Section 101 of the Indenture shall be amended as to Debt Securities originally issued on or after the date hereof by deleting the fifty-third paragraph thereof in its entirety and substituting therefor the following: "Senior Indebtedness" means the following indebtedness or obligations, whether outstanding at the date of execution of this Indenture or thereafter incurred, assumed, guaranteed or otherwise created: (i) the principal, premium, if any, and interest in respect of (A) indebtedness for money 1 borrowed and (B) indebtedness evidenced by securities, notes, debentures, bonds or other similar instruments issued by Citigroup Global Markets Holdings, including, but not limited to, (1) the senior debt indenture, dated as of December 1, 1988, between Salomon Inc. and Citibank, N.A., as trustee, in case as the same may be amended, modified, or supplemented from time to time; and (2) the senior debt indenture, dated as of October 27, 1993, between Salomon Inc. and The Bank of New York, as trustee, in case as the same may be amended, modified, or supplemented from time to time; (ii) all capital lease obligations of Citigroup Global Markets Holdings; (iii) all obligations of Citigroup Global Markets Holdings issued or assumed as the deferred purchase price of property, all conditional sale obligations of Citigroup Global Markets Holdings and all obligations of Citigroup Global Markets Holdings under any conditional sale or title retention agreement, but excluding trade accounts payable in the ordinary course of business; (iv) all obligations, contingent or otherwise, of Citigroup Global Markets Holdings in respect of any letters of credit, bankers acceptance, security purchase facilities and similar credit transactions; (v) all obligations of Citigroup Global Markets Holdings in respect of interest rate swap, cap or other agreements, interest rate future or option contracts, currency swap agreements, currency future or option contracts and other similar agreements; (vi) all obligations of the type referred to in clauses (i) through (v) above of other persons for the payment of which Citigroup Global Markets Holdings is responsible or liable as obligor, guarantor or otherwise (""guarantees"); and (vii) all obligations of the type referred to in clauses (i) through (vi) above of other persons secured by any lien on any property or asset of Citigroup Global Markets Holdings whether or not such obligation is assumed by Citigroup Global Markets Holdings; but Senior Indebtedness does not include: (1) any indebtedness issued prior to the date hereof under this indenture; and (2) any indebtedness or any guarantee that is by its terms subordinated to, or ranks equally with the subordinated debt securities and the issuance of which, in the case of this clause only, (x) has received the concurrence or approval of the staff of the Federal Reserve Bank of New York or the staff of the Board of Governors of the Federal Reserve System or (y) does not at the time of issuance prevent the subordinated debt securities from qualifying for Tier 2 capital treatment (irrespective of any limits on the amount of Citigroup Inc.'s Tier 2 capital) under the applicable capital adequacy guidelines, regulations, policies or published interpretations of the Board of Governors of the Federal Reserve System. ARTICLE II The following covenant is hereby added as Section 312 to the Indenture: "Section 312. Future Issuance of Debt Securities under this Indenture. Any Debt Securities issued under this Indenture shall either (a) be issued with the concurrence or approval of the staff of the Federal Reserve Bank of New York or the staff of the Federal Reserve or (b) qualify at the time of issuance for tier 2 capital treatment (irrespective of any limits on the amount of Citigroup Inc.'s tier 2 capital) under the applicable capital adequacy guidelines, regulations, policies or published interpretations of the Federal Reserve." 2 ARTICLE III Section 3.01. The Trustee accepts the trusts created by this Seventh Supplemental Indenture upon the terms and conditions set forth in the Indenture. The Trustee shall not be responsible or accountable in any manner whatsoever for or in respect of, and makes no representation with respect to, the validity or sufficiency of this Seventh Supplemental Indenture or the due execution hereof by the Company and shall not be responsible in any manner whatsoever for or in respect of the correctness of the recitals and statements contained herein, all of which recitals and statements are made solely by the Company. Section 3.02. Except as amended as set forth above, the Indenture is in all respects ratified and confirmed and the terms, provisions and conditions thereof shall remain in full force and effect. This Seventh Supplemental Indenture shall take effect on the date hereof. Section 3.03. This Seventh Supplemental Indenture may be executed in any number of counterparts, each of which shall be deemed to be an original for all purposes, but such counterparts shall together be deemed to constitute but one and the same instrument. 3 IN WITNESS WHEREOF, each of Citigroup Global Markets Holdings Inc. and Deutsche Bank Trust Company Americas, as Trustee, has caused this Seventh Supplemental Indenture to be signed and acknowledged by one of its officers thereunto duly organized, and its corporate seal to be affixed hereto, and the same to be attested by the signature of its Secretary or one of its Assistant Secretaries, all as of October ___, 2004. CITIGROUP GLOBAL MARKETS HOLDINGS INC. By: ____________________________________________ Name: Title: Attest: By: ____________________________ Name: Title: DEUTSCHE BANK TRUST COMPANY AMERICAS By: ____________________________________________ Name: Title: Attest: By: ____________________________ Name: Title: 4 EX-4.CC 6 x99885s3exv4wcc.txt FORMS OF MEDIUM -TERM REGISTERED NOTES, SERIES D AND E Exhibit 4(cc) REGISTERED PRINCIPAL AMOUNT No. FX ___ OR FACE AMOUNT $_______________ CUSIP:__________ CITIGROUP GLOBAL MARKETS HOLDINGS INC. MEDIUM-TERM SENIOR NOTE, SERIES D DUE NINE MONTHS OR MORE FROM DATE OF ISSUE (FIXED RATE) IF APPLICABLE, THE "TOTAL AMOUNT OF OID" AND "YIELD TO MATURITY" SET FORTH BELOW WILL BE COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE UNITED STATES FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES Issue Price: Original Issue Date: Interest Rate: Stated Maturity: Specified Currency (If other than U.S. dollars): Authorized Denominations: (If other than as set forth in the Prospectus Supplement) Dual Currency Note: [ ] Yes (see attached) [ ] No Optional Payment Currency: Designated Exchange Rate: Interest Payment Dates: Accrue to Pay: [ ] Yes [ ] No Indexed Principal Note: [ ] Yes (see attached) [ ] No Interest Rate Reset: [ ] The Interest Rate may not be changed prior to Stated Maturity. [ ] The Interest Rate may be changed prior to Stated Maturity (see attached). Optional Reset Dates (if applicable): Amortizing Note: [ ] Yes [ ] No Amortization Schedule: Optional Redemption: [ ] Yes [ ] No Optional Redemption Dates: Redemption Prices: Bond Yield to Maturity: Bond Yield to Call: Optional Repayment: [ ] Yes [ ] No Optional Repayment Dates: Optional Repayment Prices: Optional Extension of Stated Maturity: [ ] Yes [ ] No Final Maturity: Discount Note: [ ] Yes [ ] No Total Amount of OID: Yield to Maturity: Renewable Note: [ ] Yes (see attached) [ ] No Initial Maturity Date: Special Election Interval (if applicable): Amount (if less than entire principal amount) as to which election may be exercised: Survivor's Option: [ ] Yes (see attached) [ ] No 2 CITIGROUP GLOBAL MARKETS HOLDINGS INC., a corporation duly organized and existing under the laws of the State of New York (herein referred to as the "Company"), for value received hereby promises to pay CEDE & Co. or registered assigns (a) the Principal Amount or, in the case of an Indexed Principal Note, the Face Amount adjusted by reference to prices, changes in prices, or differences between prices, of securities, currencies, intangibles, goods, articles or commodities or by such other objective price, economic or other measures (an "Index") as described on the face hereof or in the pricing supplement attached hereto or delivered herewith, in the Specified Currency on the Stated Maturity shown above or earlier if and to the extent so provided herein and (b) accrued interest on the Principal Amount then outstanding (or in the case of an Indexed Principal Note, the Face Amount, then outstanding) at the Interest Rate shown above from the Original Issue Date shown above or from the most recent date to which interest has been paid or duly provided for, semiannually in arrears (unless otherwise set forth herein or in the pricing supplement attached hereto or delivered herewith) on the Interest Payment Dates specified on the face of this Note or in the pricing supplement attached hereto or delivered herewith and at the Stated Maturity, until, in either case, the Principal Amount then outstanding or the Face Amount is paid or duly provided for in accordance with the terms hereof. Unless otherwise specified herein or in the pricing supplement attached hereto or delivered herewith, interest on this Note, if any, will be computed on the basis of a 360-day year of twelve 30-day months or, in the case of an incomplete month, the number of days elapsed. The interest so payable, and punctually paid or duly provided for, on each Interest Payment Date will, as provided in the Indenture referred to on the reverse hereof, be paid to the person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which, unless otherwise specified on the face of this Note or in the pricing supplement attached hereto or delivered herewith (and other than interest payable at Stated Maturity), shall be the date (whether or not a Business Day) fifteen calendar days immediately preceding such Interest Payment Date and, in the case of interest payable at Stated Maturity, shall be the Stated Maturity of this Note. Notwithstanding the foregoing, if this Note is issued between a Regular Record Date and the related Interest Payment Date, the interest so payable for the period from the Original Issue Date to such Interest Payment Date shall be paid on the next succeeding Interest Payment Date to the Registered Holder hereof on the related Regular Record Date. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Registered Holder hereof on such Regular Record Date, and may be paid to the person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Notes not less than ten days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Registered Notes may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. For purposes of this Note, "Business Day" means: (i) with respect to any Registered Note, any day that is not a Saturday or Sunday and that, in The City of New York, is not a day on which banking institutions generally are authorized or obligated by law or executive order to close; (ii) with respect to Registered Notes having a specified currency other than U.S. dollars only, other than Registered Notes denominated in Euros, any day that, in the principal financial center (as defined below) of the country of the Specified Currency, is not a day on which banking institutions generally are authorized or obligated by law to close; (iii) with respect to Notes denominated in Euros, a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer ("TARGET") System is open (a "TARGET Business Day"); and (iv) with respect to any 3 determination by the exchange rate agent (as defined below) of an exchange rate pursuant to notes having a specified currency other than U.S. dollars, any such day on which banking institutions and foreign exchange markets settle payments in New York City and London (an "Exchange Rate Business Day"). As used above, a "principal financial center" means the capital city of the country issuing the Specified Currency. However, with respect to U.S. dollars, Australian dollars, Canadian dollars, and Swiss francs, the principal financial center shall be The City of New York, Sydney, Toronto, and Zurich, respectively. If this Note is an Amortizing Note as shown on the face hereof or in the pricing supplement attached hereto or delivered herewith, a portion or all the principal amount of the Note is payable prior to Stated Maturity in accordance with a schedule, by application of a formula, or by reference to an Index (as described above). If the Holder of this Note has a Survivor's Option, as indicated above, to elect repayment of this Note prior to Stated Maturity in the event of the death of any beneficial owner hereof, then, pursuant to exercise of such Survivor's Option, the Company will repay this Note (or applicable portion hereof) when properly tendered for repayment by or on behalf of the Person (the "Representative") that has authority to act on behalf of the deceased beneficial owner hereof under the laws of the appropriate jurisdiction (including, without limitation, the personal representative, executor, surviving joint tenant or surviving tenant by the entirety of such deceased beneficial owner) at a price equal to the Amortized Face Amount (calculated as set forth below) payable hereunder with respect to such beneficial owner, plus accrued interest thereon to the date of such repayment; provided, however, that the Company may, in its sole discretion, limit to $2,500,000 (or the approximate equivalent thereof in other currencies) the aggregate principal amount of Notes of this series as to which exercises of the Survivor's Option will be accepted in any calendar year (the "Annual Put Limitation") and, in the event that the Annual Put Limitation is applied, limit to $250,000 (or the approximate equivalent thereof in other currencies) the aggregate principal amount of Notes (or portions thereof) as to which exercises of the Survivor's Option will be accepted in such calendar year with respect to any individual deceased beneficial owner of Notes; and provided, further, that the Company will not make any principal payment pursuant to exercise of the Survivor's Option in an amount that is less than $5,000 (or the approximate equivalent thereof in other currencies), and, in the event that the foregoing limitations would result in the partial repayment to any individual deceased beneficial owner of Notes, the principal amount owned by such deceased beneficial owner must not be less than $5,000 (or the approximate equivalent thereof in other currencies) as a result of such repayment, which is the minimum authorized denomination of the Notes. This Note, or any portion hereof, if tendered pursuant to an exercise of the Survivor's Option, may be withdrawn by a written request of the Holder hereof received by the Paying Agent prior to its repayment. The Amortized Face Amount of this Note on any date shall be the amount equal to (i) the Issue Price set forth on the face hereof plus (ii) that portion of the difference between such Issue Price and the stated principal amount of such Note that has accrued by such date at (x) the Bond Yield to Maturity set forth on the face hereof or (y) if so specified, the Bond Yield to Call set forth on the face hereof (computed in each case in accordance with generally accepted United States bond yield computation principles), provided, however, that in no event shall the Amortized Face Amount of a Note exceed its stated principal amount. The Bond Yield to Call listed on the face of this Note shall be computed on the basis of the first occurring Optional Redemption Date with respect to such 4 Note and the amount payable on such Optional Redemption Date. In the event that such Note is not redeemed on such first occurring Optional Redemption Date, the Bond Yield to Call with respect to such Note shall be recomputed on such Optional Redemption Date on the basis of the next occurring Optional Redemption Date and the amount payable on such Optional Redemption Date, and shall continue to be so recomputed on each succeeding Optional Redemption Date until the Note is so redeemed. This Note (or any portion hereof), if tendered pursuant to a valid exercise of the Survivor's Option, will be accepted promptly based on the order in which all such Notes (or any portion thereof) are tendered, unless the acceptance hereof would (i) contravene the Annual Put Limitation or (ii) result in the acceptance during the then current calendar year of an aggregate principal amount of Notes (or portions thereof) exceeding $250,000 (or the approximate equivalent thereof) with respect to any individual deceased beneficial owner. If, as of the end of any calendar year, the Company has not imposed the Annual Put Limitation or the aggregate principal amount of Notes that have been accepted pursuant to exercise of the Survivor's Option during such year has not exceeded the Annual Put Limitation for such year, any exercise of the Survivor's Option with respect to this Note (or any portion hereof) not accepted during such calendar year because more than $250,000 (or the approximate equivalent thereof) aggregate principal amount of Notes (or portions thereof) was tendered with respect to the individual deceased beneficial owner hereof will be accepted in the order all such Notes were tendered, to the extent that any such exercise would not trigger the Annual Put Limitation, if any, for such calendar year. This Note (or portion hereof), if accepted for repayment pursuant to exercise of the Survivor's Option, will be repaid on the first Interest Payment Date that occurs twenty or more calendar days after the date of such acceptance. If this Note (or any portion hereof) is tendered for repayment and is not accepted in any calendar year due to the application of the Annual Put Limitation, then this Note (or any such portion) will be deemed to be tendered in the following calendar year based on the order in which all such Notes (or any portion thereof) were originally tendered, unless this Note (or any such portion hereof) is withdrawn by the Holder. In the event that this Note (or any portion hereof) tendered for repayment pursuant to valid exercise of the Survivor's Option is not accepted, the Paying Agent will deliver a notice to the affected Representative by first-class mail to the broker or other entity that represents the deceased beneficial owner of this Note that states the reasons this Note (or such portion) has not been accepted for repayment. If this Note is an Amortizing Note as shown on the face hereof or in the pricing supplement attached hereto or delivered herewith, a portion or all the principal amount of the Note is payable prior to Stated Maturity in accordance with a schedule, by application of a formula, or by reference to an Index (as described above). Subject to the foregoing, in order for the Survivor's Option to be validly exercised, the Paying Agent must receive (i) a written request for repayment signed by the Representative, and such signature must be guaranteed by a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc. or a commercial bank or trust company having an office or correspondent in the United States, (ii) tender of this Note (or applicable portion hereof), (iii) appropriate evidence satisfactory to the Company and the Paying Agent that (A) the Representative has authority to act on behalf of the applicable deceased beneficial owner hereof, (B) the death of such beneficial owner has occurred and (C) the deceased was a beneficial owner hereof at the time of death, and (iv) if applicable, a properly executed assignment or endorsement, and (v) if the Note is held by a nominee of the deceased beneficial owner, a certificate satisfactory to the Paying Agent from such nominee attesting to the beneficial ownership of such Note. All questions as to the eligibility or validity of any exercise of the Survivor's Option will be determined by the Company, in its sole discretion, which determination will be final and binding. 5 The principal hereof and any premium and interest hereon are payable by the Company in the Specified Currency shown above. If the Specified Currency shown above is other than U.S. dollars, the Company will arrange to convert all payments in respect hereof into U.S. dollars in the manner described on the reverse hereof. The Holder hereof may, if so indicated above, elect to receive all payments in respect hereof in the Specified Currency by delivery of a written notice to the Trustee not later than fifteen calendar days prior to the applicable payment date. Such election will remain in effect until revoked by written notice to the Trustee received not later than fifteen calendar days prior to the applicable payment date. If the Company determines that the Specified Currency is not available for making payments in respect hereof due to the imposition of exchange controls or other circumstances beyond the Company's control or is no longer used by the government of the country issuing such currency or for the settlement of transactions by public institutions or within the international banking community, then the Holder hereof may not so elect to receive payments in the Specified Currency, and any such outstanding election shall be automatically suspended, and payments shall be in U.S. dollars, until the Company determines that the Specified Currency is again available for making such payments. Payments of interest in U.S. dollars (other than interest payable at Stated Maturity) will be made by check mailed to the address of the Person entitled thereto as such address shall appear on the Security Register on the applicable Record Date; provided that, if the Holder hereof is the Holder of U.S. $10,000,000 (or the equivalent thereof in a currency other than U.S. dollars determined as provided on the reverse hereof) or more in aggregate principal amount of Registered Notes of like tenor and term, such U.S. dollar interest payments will be made by wire transfer of immediately available funds, but only if appropriate wire transfer instructions have been received in writing by the Trustee not less than fifteen calendar days prior to the applicable Interest Payment Date. Simultaneously with any election by the Holder hereof to receive payments in respect hereof in the Specified Currency (if other than U.S. dollars), such Holder shall provide appropriate wire transfer instructions to the Trustee and all such payments will be made by wire transfer of immediately available funds to an account maintained by the payee with a bank located outside the United States. The principal hereof and any premium and interest hereon payable at Stated Maturity will be paid in immediately available funds upon surrender of this Note at the corporate trust office or agency of the Trustee located in the City and State of New York. 6 REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF AND IN ANY PRICING SUPPLEMENT ATTACHED HERETO OR DELIVERED HEREWITH, AND SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE. This Note shall not become valid or obligatory for any purpose unless and until this Note has been authenticated by Citibank, N.A., or its successor, as authentication agent. 7 IN WITNESS WHEREOF, the Company has caused this Note to be executed under its corporate seal. Dated: CITIGROUP GLOBAL MARKETS HOLDINGS INC. By___________________________________ Authorized Officer [Seal] Attest_______________________________ Assistant Secretary CERTIFICATE OF AUTHENTICATION This is one of the Notes issued under the within-mentioned Indenture. Dated: CITIBANK, N.A., as authentication agent By___________________________________ Authorized Signatory 8 (REVERSE OF SECURITY) CITIGROUP GLOBAL MARKETS HOLDINGS INC. MEDIUM-TERM SENIOR NOTE, SERIES D DUE NINE MONTHS OR MORE FROM DATE OF ISSUE (FIXED RATE) General This Note is one of a series of duly authorized debt securities of the Company (the "Debt Securities") issued or to be issued in one or more series under an indenture, dated as of December 1, 1988, as amended (the "Indenture"), between the Company and Bank One Trust Company, N.A., as successor trustee (the "Trustee," which term includes any successor Trustee under the Indenture), to which indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Debt Securities and of the terms upon which the Debt Securities are, and are to be, authenticated and delivered. The U.S. dollar equivalent of the public offering price or purchase price of Notes denominated in currencies other than U.S. dollars will be determined by the Company or its agent, as exchange rate agent for the Notes (the "Exchange Rate Agent") on the basis of the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York (the "Market Exchange Rate") for such currencies on the applicable issue dates. The Notes are in registered form without coupons. Unless otherwise specified in the applicable pricing supplement, the authorized denominations of Registered Notes denominated in U.S. dollars will be U.S.$1,000 and any larger amount that is an integral multiple of U.S.$1,000. The authorized denominations of Registered Notes denominated in a currency other than U.S. dollars will be the approximate equivalents thereof in the Specified Currency. Each Registered Note will be issued initially as a Book-Entry Note, and will not be exchangeable for Certificated Notes, except as otherwise provided in the Indenture or specified in the applicable pricing supplement. Fixed Rate Notes This Note will bear interest from its Original Issue Date, or from the last Interest Payment Date to which interest has been paid or duly provided for, at the Interest Rate stated on the face hereof or in the pricing supplement attached hereto or delivered herewith until the principal amount hereof is paid or made available for payment, except as otherwise described below under "Subsequent Interest Periods" and "Extension of Stated Maturity", and except that if so specified in the attached pricing supplement, the rate of interest payable may be subject to adjustment as specified therein. Unless otherwise set forth herein or in the pricing supplement attached hereto or delivered herewith, interest on this Note will be payable semiannually in arrears on the Interest Payment Dates set forth above and at Stated Maturity. If an Interest Payment Date with respect to any Note would otherwise be a day that is not a Business Day, such Interest Payment Date shall not be postponed; provided, however, that any payment required to be made in respect of such Note on a date (including the day of Stated Maturity) that is not a Business Day for such Note need not be made 1 on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on such date, and no additional interest shall accrue as a result of such delayed payment. However, if with respect to any Note for which "Accrue to Pay" is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, any Interest Payment Date with respect to such Fixed Rate Note would otherwise be a day that is not a Business Day, such Interest Payment Date shall be postponed to the next succeeding Business Day. Each payment of interest in respect of an Interest Payment Date shall include interest accrued through the day before such Interest Payment Date. Unless otherwise specified herein, interest on this Note will be computed on the basis of a 360-day year of twelve 30-day months ("30 over 360") or, in the case of an incomplete month, the number of days elapsed. Subsequent Interest Periods If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Interest Rate on this Note may be reset by the Company on the date or dates specified on the face hereof or in the pricing supplement attached hereto or delivered herewith (each an "Optional Reset Date"). The Company may reset the Interest Rate by notifying the Trustee for this Note at least 45 but not more than 60 days prior to each Optional Reset Date. Not later than 40 days prior to each Optional Reset Date, the Trustee will mail to the Holder of this Note a notice (the "Reset Notice"), first class, postage prepaid, indicating whether the Company has elected to reset the Interest Rate, and if so, (i) such new Interest Rate and (ii) the provisions, if any, for redemption during the period from such Optional Reset Date to the next Optional Reset Date, or, if there is no such next Optional Reset Date, to the Stated Maturity of this Note (each such period, a "Subsequent Interest Period"), including the date or dates on which or the period or periods during which and the price or prices at which such redemption may occur during the Subsequent Interest Period. Upon the transmittal by the Trustee of a Reset Notice to the Holder of a Note, such new Interest Rate shall take effect automatically. Except as modified by the Reset Notice and as described below, such Note will have the same terms as prior to the transmittal of such Reset Notice. Notwithstanding the foregoing, not later than 20 days prior to the Optional Reset Date, the Company may, at its option, revoke the Interest Rate provided for in the Reset Notice and establish a higher Interest Rate for the Subsequent Interest Period by causing the Trustee to mail notice of such higher Interest Rate, first class, postage prepaid, to the Holder of this Note. Such notice shall be irrevocable. All Registered Notes with respect to which the Interest Rate is reset on an Optional Reset Date will bear such higher Interest Rate. The Holder of this Note will have the option to elect repayment of the Note by the Company on each Optional Reset Date at a price equal to the principal amount hereof, plus interest accrued to such Optional Reset Date. In order to obtain repayment on an Optional Reset Date, the Holder must follow the procedures set forth below for optional repayment, except that the period for delivery or notification to the Trustee shall be at least 25 but not more than 35 days prior to such Optional Reset Date, and except that if the Holder has tendered this Note for repayment pursuant to a Reset Notice, the Holder may, by written notice to the Trustee, revoke such tender for repayment until the close of business on the tenth day before the Optional Reset Date. Indexed Notes If this Note is an Indexed Principal Note, then the principal amount payable at Stated Maturity or earlier redemption or retirement is determined by reference to the amount designated on 2 the face hereof or in the pricing supplement attached hereto or delivered herewith as the Face Amount of this Note and by reference to the Index as described on the face hereof or in the pricing supplement attached hereto or delivered herewith. If this Note is an Indexed Principal Note, the principal amount payable at Stated Maturity or any earlier redemption or repayment of this Note may be different from the Face Amount. If a third party is appointed to calculate or announce the Index for a particular Indexed Note and the third party either suspends the calculation or announcement of such Index or changes the basis upon which such Index is calculated in a manner that is inconsistent with the applicable pricing supplement, then the Company will select another third party to calculate or announce the Index. The agent or another affiliate of the Company may be either the original or successor third party selected by the Company. If for any reason such Index cannot be calculated on the same basis and subject to the same conditions and controls as applied to the original third party, then the indexed principal amount of this Note shall be calculated in the manner set forth in the applicable pricing supplement. Any determination of such third party shall in the absence of manifest error be binding on all parties. Specified Currency If the Specified Currency is other than U.S. dollars, the amount of any U.S. dollar payment to be made in respect hereof will be determined by the Company or its agent based on the highest firm bid quotation expressed in U.S. dollars received by the Company or its agent at approximately 11:00 a.m., New York City time, on the second Business Day preceding the applicable payment date (or, if no such rate is quoted on such date, the last date on which such rate was quoted) from three (or, if three are not available, then two) recognized foreign exchange dealers in The City of New York selected by the Exchange Rate Agent (one or more of which may be an agent involved in the distribution of the Notes (an "Agent") and another of which may be the Exchange Rate Agent) for the purchase by the quoting dealer, for settlement on such payment date, of the aggregate amount of the Specified Currency payable on such payment date in respect of all Registered Notes denominated in such Specified Currency. All currency exchange costs will be borne by the Holders of such Registered Notes by deductions from such payments. If no such bid quotations are available, then such payments will be made in the Specified Currency, unless the Specified Currency is unavailable due to the imposition of exchange controls or to other circumstances beyond the Company's control, in which case payment will be made as described in the next paragraph. Payments in Currencies other than the Specified Currency Except as set forth below, if any payment in respect hereof is required to be made in a specified currency other than U.S. dollars and such currency is unavailable due to the imposition of exchange controls or other circumstances beyond the Company's control or is no longer used by the government of the country issuing such currency or for the settlement of transactions by public institutions of or within the international banking community, then such payment shall be made in U.S. dollars until such currency is again available or so used. The amount so payable in such foreign currency shall be converted into U.S. dollars on the basis of the most recently available Market Exchange Rate for such currency or as otherwise indicated on the face hereof or in the pricing supplement attached hereto or delivered herewith. Any payment made under such circumstances in U.S. dollars will not constitute an Event of Default under the Indenture. 3 In the event of an official redenomination of the Specified Currency of this Note (other than as a result of European Monetary Union, but including, without limitation, an official redenomination of any such Specified Currency that is a composite currency), the obligations of the Company with respect to payments on this Note shall, in all cases, be deemed immediately following such redenomination to provide for the payment of that amount of redenominated currency representing the amount of such obligations immediately before such redenomination. This Note does not provide for any adjustment to any amount payable under this Note as a result of (i) any change in the value of the Specified Currency hereof relative to any other currency due solely to fluctuations in exchange rates or (ii) any redenomination of any component currency of any composite currency (unless such composite currency is itself officially redenominated). Dual Currency Notes If this Note is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as a Dual Currency Note, the Company may have a one time option of making all payments of principal, premium, if any, and interest on all Dual Currency Notes issued on the same day and having the same terms (a "Tranche"), which payments would otherwise be made in the Specified Currency of such Notes, in an optional currency (the "Optional Payment Currency"). Such option will be exercisable in whole but not in part on an "Option Election Date," which will be any one of the dates specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. If the Company makes such an election, the amount payable in the Optional Payment Currency shall be determined using the Designated Exchange Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. If such election is made, notice of such election shall be mailed in accordance with the terms of the applicable Tranche of Dual Currency Notes within two Business Days of the Option Election Date and shall state (i) the first date, whether an Interest Payment Date and/or Stated Maturity, in which scheduled payments in the Optional Payment Currency will be made and (ii) the Designated Exchange Rate. Any such notice by the Company, once given, may not be withdrawn. The equivalent value in the Specified Currency of payments made after such an election may be less, at the then current exchange rate, than if the Company had made such payment in the Specified Currency. Renewable Notes If this Note is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as a Renewable Note, this Note will mature on an Interest Payment Date occurring in or prior to the twelfth month following the Original Issue Date of this Note (the "Initial Maturity Date") unless the term of all or any portion of this Note is renewed in accordance with the following procedures: On the Interest Payment Date occurring in the sixth month (unless a different interval (the "Special Election Interval") is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith) prior to the Initial Maturity Date of this Note (the "Initial Renewal Date") and on the Interest Payment Date occurring in each sixth month (or in the last month of each Special Election Interval) after such Initial Renewal Date (each, together with the Initial Renewal Date, a "Renewal Date"), the term of this Note may be extended to the Interest Payment Date occurring in the twelfth month (or, if a Special Election Interval is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the last month in a period equal to 4 twice the Special Election Interval) after such Renewal Date, if the Holder of this Note elects to extend the term of this Note or any portion thereof as described below. If the Holder does not elect to extend the term of any portion of the principal amount of this Note during the specified period prior to any Renewal Date, such portion will become due and payable on the Interest Payment Date occurring in the sixth month (or the last month in the Special Election Interval) after such Renewal Date (the "New Maturity Date"). The Holder may elect to renew the term of this Note, or if so specified, any portion thereof, by delivering a notice to such effect to the Trustee (or any duly appointed paying agent) at the corporate trust office of the Trustee or agency of the Trustee in the City of New York not less than 15 nor more than 30 days prior to such Renewal Date, unless another period is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Such election will be irrevocable and will be binding upon each subsequent Holder of this Note. An election to renew the term of this Note may be exercised with respect to less than the entire principal amount of this Note only if so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith and then only in such principal amount, or any integral multiple in excess thereof, as is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Notwithstanding the foregoing, the term of this Note may not be extended beyond the Stated Maturity specified for this Note on the face hereof or in the pricing supplement attached hereto or delivered herewith. If the Holder does not elect to renew the term, this Note must be presented to the Trustee (or any duly appointed paying agent) and, as soon as practicable following receipt of such Note the Trustee (or any duly appointed paying agent) shall issue in exchange therefor in the name of such Holder (i) a Note, in a principal amount equal to the principal amount of such exchanged Note for which no election to renew the term thereof was exercised, with terms identical to those specified on such exchanged Note (except that such Note shall have a fixed, nonrenewable Stated Maturity on the New Maturity Date) and (ii) if an election to renew is made with respect to less than the full principal amount of such Holder's Note, the Trustee, or any duly appointed paying agent, shall issue in exchange for such Note in the name of such Holder a replacement Renewable Note, in a principal amount equal to the principal amount of such exchanged Note for which the election to renew was made, with terms otherwise identical to the exchanged Note. Extension of Stated Maturity If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Stated Maturity of this Note may be extended at the option of the Company for one or more periods of whole years specified on the face hereof or in the pricing supplement attached hereto or delivered herewith (each an "Extension Period") from one to five years up to but not beyond the date (the "Final Maturity") set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith. The Company may exercise such option by notifying the Trustee for this Note at least 45 but not more than 60 days prior to the original Stated Maturity of this Note. If the Company exercises such option, the Trustee will mail to the Holder of this Note not later than 40 days prior to the original Stated Maturity a notice (the "Extension Notice"), first class, postage prepaid, indicating (i) the election of the Company to extend the Stated Maturity, (ii) the new Stated Maturity, (iii) the Interest Rate applicable to the Extension Period, and (iv) the provisions, if any, for redemption during such Extension Period including the date or dates on which, or the period or periods during which, and the price or prices at which, such redemption may occur during the Extension Period. Upon the Trustee's mailing of the Extension Notice, the Stated Maturity of this 5 Note shall be extended automatically and, except as modified by the Extension Notice and as described in the next paragraph, this Note will have the same terms as prior to the mailing of such Notice. Notwithstanding the foregoing, not later than 20 days prior to the original Stated Maturity of this Note, the Company may, at its option, revoke the Interest Rate provided for in the Extension Notice and establish a higher Interest Rate for the Extension Period by causing the Trustee to mail notice of such higher Interest Rate, first class, postage prepaid, to the Holder of this Note. Such notice shall be irrevocable. All Registered Notes with respect to which the Stated Maturity is extended will bear such higher Interest Rate for the Extension Period, whether or not tendered for repayment. If the Company extends the Stated Maturity of this Note, the Holder will have the option to elect repayment of this Note by the Company on the original Stated Maturity at a price equal to the principal amount hereof, plus interest accrued to such date. In order to obtain repayment on such original Stated Maturity once the Company has extended the Stated Maturity hereof, the Holder must follow the procedures set forth below for optional repayment, except that the period for delivery or notification to the Trustee shall be at least 25 but not more than 35 days before the original Stated Maturity, and except that if the Holder has tendered this Note for repayment pursuant to an Extension Notice, the Holder may, by written notice to the Trustee, revoke such tender for repayment until the close of business on the tenth calendar day before the original Stated Maturity. Optional Redemption, Repayment and Repurchase If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Company may, at its option, redeem this Note in whole or in part, on the date or dates (each an "Optional Redemption Date") specified herein, at the price (the "Redemption Price") (together with accrued interest to such Optional Redemption Date) specified herein. Unless otherwise stated on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Trustee shall mail to the Holder a notice of such redemption first class, postage prepaid, at least 30 days prior to the date of redemption. Unless otherwise stated herein, the Company may exercise such option with respect to a redemption of this Note in part only by notifying the Trustee for this Note at least 45 days prior to any Optional Redemption Date. In the event of redemption of this Note in part only, a new Note or Notes for the unredeemed portion hereof will be issued to the Holder hereof upon the cancellation hereof. If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, this Note will be repayable prior to Stated Maturity at the option of the Holder on the Optional Repayment Dates shown on the face hereof or in the pricing supplement attached hereto or delivered herewith at the Optional Repayment Prices shown on the face hereof or in the pricing supplement attached hereto or delivered herewith, together with accrued interest to the date of repayment. In order for this Note to be repaid, the Trustee must receive at least 30 but not more than 45 days prior to an Optional Repayment Date (i) this Note with the form below entitled "Option to Elect Repayment" duly completed; or (ii) a telegram, telex, facsimile transmission or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc. or a commercial bank or trust company in the United States of America setting forth the name of the Holder of this Note, the principal amount of the Note to be repaid, the certificate number or a description of the tenor and terms of this Note, a statement that the option to elect repayment is being exercised thereby and a guarantee that this Note with the form below entitled "Option to Elect 6 Repayment" duly completed will be received by the Trustee not later than five Business Days after the date of such telegram, telex, facsimile transmission or letter. If the procedure described in clause (ii) of the preceding sentence is followed, this Note with form duly completed must be received by the Trustee by such fifth Business Day. Any tender of this Note for repayment (except pursuant to a Reset Notice or an Extension Notice) shall be irrevocable. The repayment option may be exercised by the Holder of this Note for less than the entire principal amount of the Note; provided that the principal amount of this Note remaining outstanding after repayment is an authorized denomination. Upon such partial repayment, this Note shall be canceled and a new Note or Notes for the remaining principal amount hereof shall be issued in the name of the Holder of this Note. Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, this Note will not be subject to any sinking fund. Notwithstanding anything herein to the contrary, if this Note is a Discount Note, the amount payable in the event of redemption or repayment prior to the Stated Maturity hereof (other than pursuant to an optional redemption by the Company at a stated Redemption Price), in lieu of the principal amount due at the Stated Maturity hereof, shall be the Amortized Face Amount of this Note as of the redemption date or the date of repayment, as the case may be. The Amortized Face Amount of this Note on any date shall be the amount equal to (i) the Issue Price set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith plus (ii) that portion of the difference between such Issue Price and the stated principal amount of such Note that has accrued by such date at (x) the Bond Yield to Maturity set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith or (y) if so specified, the Bond Yield to Call set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith (computed in each case in accordance with generally accepted United States bond yield computation principles); provided, however, that in no event shall the Amortized Face Amount of a Note exceed its stated principal amount. The Bond Yield to Call listed on the face of this Note or in the pricing supplement attached hereto or delivered herewith shall be computed on the basis of the first occurring Optional Redemption Date with respect to such Note and the amount payable on such Optional Redemption Date. In the event that such Note is not redeemed on such first occurring Optional Redemption Date, the Bond Yield to Call with respect to such Note shall be recomputed on such Optional Redemption Date on the basis of the next occurring Optional Redemption Date and the amount payable on such Optional Redemption Date, and shall continue to be so recomputed on each succeeding Optional Redemption Date until the Note is so redeemed. The Company may at any time purchase Registered Notes at any price in the open market or otherwise. Registered Notes so purchased by the Company may, at the discretion of the Company, be held or resold or surrendered to the Trustee for such Notes for cancellation. Other Terms As provided in the Indenture and subject to certain limitations therein set forth, this Note is exchangeable for a like aggregate principal amount of Registered Notes of different authorized denominations, as requested by the Person surrendering the same. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable on the Security Register of the Company, upon surrender of this Note for registration of transfer at the office or agency of the Company in the Borough of Manhattan, the City and State of New York, duly endorsed by, or accompanied by a written instrument of 7 transfer in form satisfactory to the Company, the Security Registrar and the Trustee duly executed by the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Registered Notes of this series, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the Holder hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. If an Event of Default with respect to the Debt Securities of this series shall have occurred and be continuing, the principal of all the Debt Securities of this series may be declared due and payable in this manner and with the effect provided in the Indenture. In case this Note shall at any time become mutilated, destroyed, stolen or lost and this Note or evidence of the loss, theft, or destruction hereof (together with such indemnity and such other documents or proof as may be required by the Company or the Trustee) shall be delivered to the principal corporate trust office of the Trustee or the agent of the Company or Trustee, a new Registered Note of like tenor and principal amount will be issued by the Company in exchange for, or in lieu of, this Note. All expenses and reasonable charges associated with procuring such indemnity and with the preparation, authentication and delivery of a new Registered Note shall be borne by the Holder of this Note. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Debt Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of Debt Securities at the time outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Debt Securities of any series at the time outstanding, on behalf of the Holders of all the Debt Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Debt Security shall be conclusive and binding upon such Holder and upon all future Holders of this Debt Security and of any Debt Security issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon the Debt Security. Holders of Debt Securities may not enforce their rights pursuant to the Indenture or the Note except as provided in the Indenture. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed. 8 This Note shall be deemed to be a contract made and to be performed solely in the State of New York and for all purposes be governed by, and construed in accordance with, the laws of said State without regard to the conflicts of law rules of said State. All terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in the Indenture. 9 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM -as tenants in common UNIF GIFT MIN ACT_____Custodian______ TEN ENT -as tenants by the entireties (Cust) (Minor) JT ENT -as joint tenants with Under Uniform Gifts to Minors Act right of survivorship and _________________________________ not as tenants in common (State) Additional abbreviations may also be used though not in the above list ___________________________ OPTION TO ELECT REPAYMENT The undersigned hereby irrevocably requests and instructs the Company to repay $__________ principal amount of the within Note, pursuant to its terms, on the "Optional Repayment Date" first occurring after the date of receipt of the within Note as specified below, together with interest thereon accrued to the date or repayment, to the undersigned at: ________________________________________________________________________________ ________________________________________________________________________________ (Please Print or Type Name and Address of the Undersigned) and to issue to the undersigned, pursuant to the terms of the Indenture, a new Note or Notes representing the remaining principal amount of this Note. For this Option to Elect Repayment to be effective, this Note with the Option to Elect Repayment duly completed must be received by the Company within the relevant time period set forth above at its office or agency in the Borough of Manhattan, the City and State of New York, located initially at the office of the Trustee at 153 W. 51st Street, New York, New York 10019. Dated: _______________________________________ Note: The signature to this Option to Elect Repayment must correspond with the name as written upon the face of the within Note in every particular without alteration or enlargement or any change whatsoever. FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto Please insert Social Security or Other Identifying Number of Assignee ________________________________________________________________________________ ________________________________________________________________________________ Please Print or Type Name and Address Including Zip Code of Assignee ________________________________________________________________________________ the within Note and all rights thereunder, hereby irrevocably constituting and appointing ________________________________________________________________________attorney to transfer such Note on the books of Citigroup Global Markets Holdings Inc. with full power of substitution in the premises. Dated: _________________________ _______________________________________ Signature _______________________________________ NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the Note in every particular, without alteration or enlargement or any change whatsoever. 10 REGISTERED PRINCIPAL AMOUNT NO. FL___ OR FACE AMOUNT $_______________ CUSIP:__________ CITIGROUP GLOBAL MARKETS HOLDINGS INC. DUE NINE MONTHS OR MORE FROM DATE OF ISSUE MEDIUM-TERM SENIOR NOTE, SERIES D (FLOATING OR INDEXED RATE) IF APPLICABLE, THE "TOTAL AMOUNT OF OID" AND "YIELD TO MATURITY" SET FORTH BELOW WILL BE COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE UNITED STATES FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES Issue Price: Original Issue Date: Initial Interest Rate: Stated Maturity: Specified Currency (If other than U.S. dollars): Authorized Denominations: (If other than as set forth in the Prospectus Supplement) Dual Currency Note: [ ] Yes (see attached) [ ] No Optional Payment Currency: Designated Exchange Rate: Base Rate: [ ] CD Rate [ ] Commercial Paper Rate [ ] Federal Funds Rate [ ] LIBOR Telerate [ ] LIBOR Reuters [ ] Treasury Rate [ ] Treasury Rate [ ] Prime Rate Constant Maturity [ ] Eleventh District [ ] EURIBOR Cost of Funds Rate [ ] Other (see attached) 1 Interest Reset Period Index Maturity: or Interest Reset Dates: Interest Payment Dates: Accrue to Pay: [ ] Yes [ ] No Indexed Principal Note: [ ] Yes (see attached) [ ] No Floating Rate: [ ] Indexed Interest [ ] (see Rate: attached) Spread Multiplier: Spread (+/-): Spread Reset: [ ] The Spread or Spread Multiplier ma not be changed prior to Stated Maturity. [ ] The Spread or Spread Multiplier may be changed prior to Stated Maturity (see attached). Optional Reset Dates (if applicable): Maximum Interest Rate: Minimum Interest Rate: Inverse Floating Rate Note: [ ] Yes (see attached) [ ] No Initial Fixed Interest Rate: Reset Fixed Reference Rate Floating Rate / Fixed Rate Note: [ ] Yes (see attached) [ ] No Amortizing Note: [ ] Yes [ ] No Amortization Schedule: Optional Redemption: [ ] Yes [ ] No Optional Redemption Dates: Redemption Prices: Bond Yield to Maturity: Bond Yield to Call: Optional Repayment: [ ] Yes [ ] No Optional Repayment Dates: Optional Repayment Prices: 2 Optional Extension of [ ] Yes [ ] No Stated Maturity: Final Maturity: Discount Note: [ ] Yes [ ] No Total Amount of OID: Yield to Maturity: Renewable Note: [ ] Yes (see attached) [ ] No Initial Maturity Date: Special Election Interval (if applicable): Amount (if less than entire principal amount) as to which election may be exercised: Survivor's Option [ ] Yes (see attached) [ ] No 3 CITIGROUP GLOBAL MARKETS HOLDINGS INC., a corporation duly organized and existing under the laws of the State of New York (herein referred to as the "Company"), for value received hereby promises to pay CEDE & Co. or registered assigns (a) the Principal Amount or, in the case of an Indexed Principal Note, the Face Amount adjusted by reference to prices, changes in prices, or differences between prices, of securities, currencies, intangibles, goods, articles or commodities or by such other objective price, economic or other measures (an "Index") as described on the face hereof or in the pricing supplement attached hereto or delivered herewith, in the Specified Currency on the Stated Maturity shown above or earlier if and to the extent so provided herein, and (b) accrued interest on the Principal Amount then outstanding (or, in the case of an Indexed Principal Note, the Face Amount then outstanding): (i) if this is a Floating Rate Note, at the Initial Interest Rate shown above from the Original Issue Date shown above until the first Interest Reset Date shown above following the Original Issue Date and thereafter at the Base Rate shown above, adjusted by the Spread or Spread Multiplier, if any, shown above, determined in accordance with the provisions hereof, (ii) if this is an Indexed Rate Note, at a rate determined by reference to an Index as described herein, (iii) if this is an Inverse Floating Rate Note, at the Initial Interest Rate shown above from the Original Issue Date shown above until the first Interest Reset Date shown above following the Original Issue Date and thereafter at the Inverse Floating Rate, as determined in accordance with the provisions hereof, or (iv) if this is a Floating Rate / Fixed Rate Note, at a rate determined as described herein, until, in each case, the Principal Amount or the Face Amount then outstanding is paid or duly provided for in accordance with the terms hereof. The interest so payable, and punctually paid or duly provided for, on each Interest Payment Date will, as provided in the Indenture referred to on the reverse hereof, be paid to the person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which, unless otherwise specified on the face of this Note or in the pricing supplement attached hereto or delivered herewith (and other than interest payable at Stated Maturity), shall be the date (whether or not a Business Day) fifteen calendar days immediately preceding such Interest Payment Date and, in the case of interest payable at Stated Maturity, shall be the Stated Maturity of this Note. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Registered Holder hereof on such Regular Record Date, and may be paid to the person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Notes not less than ten days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Registered Notes may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. For purposes of this Note, "Business Day" means: (i) with respect to any Registered Note, any day that is not a Saturday or Sunday and that, in The City of New York, is not a day on which banking institutions generally are authorized or obligated by law or executive order to close; (ii) if the Base Rate specified above is LIBOR, any such day on which dealings in deposits in the Specified Currency are transacted in the London interbank market (a "London Business Day"); (iii) with respect to any determination by the exchange rate agent (as defined below) of an exchange rate pursuant to notes having a specified currency other than U.S. dollars, any such day on which banking institutions and foreign exchange markets settle payments in 4 New York City and London (an "Exchange Rate Business Day"); (iv) with respect to Registered Notes having a specified currency other than U.S. dollars only, other than Registered Notes denominated in Euros, any day that, in the principal financial center (as defined below) of the country of the Specified Currency, is not a day on which banking institutions generally are authorized or obligated by law to close; and (v) with respect to EURIBOR Notes and Notes denominated in Euros, a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer ("TARGET") System is open (a "Target Business Day"). As used above, a "principal financial center" means the capital city of the country issuing the specified currency. However, with respect to U.S. dollars, Australian dollars, Canadian dollars, and Swiss francs, the principal financial center shall be The City of New York, Sydney, Toronto, and Zurich, respectively. If this Note is an Amortizing Note as shown on the face hereof or in the pricing supplement attached hereto or delivered herewith, a portion or all the principal amount of the Note is payable prior to Stated Maturity in accordance with a schedule, by application of a formula, or by reference to an Index (as described above). If the Holder of this Note has a Survivor's Option, as indicated above, to elect repayment of this Note prior to Stated Maturity in the event of the death of any beneficial owner hereof, then, pursuant to exercise of such Survivor's Option, the Company will repay this Note (or applicable portion hereof) when properly tendered for repayment by or on behalf of the Person (the "Representative") that has authority to act on behalf of the deceased beneficial owner hereof under the laws of the appropriate jurisdiction (including, without limitation, the personal representative, executor, surviving joint tenant or surviving tenant by the entirety of such deceased beneficial owner) at a price equal to the Amortized Face Amount (calculated as set forth below) payable hereunder with respect to such beneficial owner, plus accrued interest thereon to the date of such repayment; provided, however, that the Company may, in its sole discretion, limit to $2,500,000 (or the approximate equivalent thereof in other currencies) the aggregate principal amount of Notes of this series as to which exercises of the Survivor's Option will be accepted in any calendar year (the "Annual Put Limitation") and, in the event that the Annual Put Limitation is applied, limit to $250,000 (or the approximate equivalent thereof in other currencies) the aggregate principal amount of Notes (or portions thereof) as to which exercises of the Survivor's Option will be accepted in such calendar year with respect to any individual deceased beneficial owner of Notes; and provided, further, that the Company will not make any principal payment pursuant to exercise of the Survivor's Option in an amount that is less than $5,000 (or the approximate equivalent thereof in other currencies), and, in the event that the foregoing limitations would result in the partial repayment to any individual deceased beneficial owner of Notes, the principal amount owned by such deceased beneficial owner must not be less than $5,000 (or the approximate equivalent thereof in other currencies) as a result of such repayment, which is the minimum authorized denomination of the Notes. This Note, or any portion hereof, if tendered pursuant to an exercise of the Survivor's Option, may be withdrawn by a written request of the Holder hereof received by the Paying Agent prior to its repayment. The Amortized Face Amount of this Note on any date shall be the amount equal to (i) the Issue Price set forth on the face hereof plus (ii) that portion of the difference between such Issue Price and the stated principal amount of such Note that has accrued by such date at (x) 5 the Bond Yield to Maturity set forth on the face hereof or (y) if so specified, the Bond Yield to Call set forth on the face hereof (computed in each case in accordance with generally accepted United States bond yield computation principles), provided, however, that in no event shall the Amortized Face Amount of a Note exceed its stated principal amount. The Bond Yield to Call listed on the face of this Note shall be computed on the basis of the first occurring Optional Redemption Date with respect to such Note and the amount payable on such Optional Redemption Date. In the event that such Note is not redeemed on such first occurring Optional Redemption Date, the Bond Yield to Call with respect to such Note shall be recomputed on such Optional Redemption Date on the basis of the next occurring Optional Redemption Date and the amount payable on such Optional Redemption Date, and shall continue to be so recomputed on each succeeding Optional Redemption Date until the Note is so redeemed. This Note (or any portion hereof), if tendered pursuant to a valid exercise of the Survivor's Option, will be accepted promptly based on the order in which all such Notes (or any portion thereof) are tendered, unless the acceptance hereof would (i) contravene the Annual Put Limitation or (ii) result in the acceptance during the then current calendar year of an aggregate principal amount of Notes (or portions thereof) exceeding $250,000 (or the approximate equivalent thereof) with respect to any individual deceased beneficial owner. If, as of the end of any calendar year, the Company has not imposed the Annual Put Limitation or the aggregate principal amount of Notes that have been accepted pursuant to exercise of the Survivor's Option during such year has not exceeded the Annual Put Limitation for such year, any exercise of the Survivor's Option with respect to this Note (or any portion hereof) not accepted during such calendar year because more than $250,000 (or the approximate equivalent thereof) aggregate principal amount of Notes (or portions thereof) was tendered with respect to the individual deceased beneficial owner hereof will be accepted in the order all such Notes were tendered, to the extent that any such exercise would not trigger the Annual Put Limitation, if any, for such calendar year. This Note (or portion hereof), if accepted for repayment pursuant to exercise of the Survivor's Option, will be repaid on the first Interest Payment Date that occurs twenty or more calendar days after the date of such acceptance. If this Note (or any portion hereof) is tendered for repayment and is not accepted in any calendar year due to the application of the Annual Put Limitation, then this Note (or any such portion) will be deemed to be tendered in the following calendar year based on the order in which all such Notes (or any portion thereof) were originally tendered, unless this Note (or any such portion hereof) is withdrawn by the Holder. In the event that this Note (or any portion hereof) tendered for repayment pursuant to valid exercise of the Survivor's Option is not accepted, the Paying Agent will deliver a notice to the affected Representative by first-class mail to the broker or other entity that represents the deceased beneficial owner of this Note that states the reasons this Note (or such portion) has not been accepted for repayment. Subject to the foregoing, in order for the Survivor's Option to be validly exercised, the Paying Agent must receive (i) a written request for repayment signed by the Representative, and such signature must be guaranteed by a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc. or a commercial bank or trust company having an office or correspondent in the United States, (ii) tender of this Note (or applicable portion hereof), (iii) appropriate evidence satisfactory to the Company and the Paying Agent that (A) the Representative has authority to act on behalf of the applicable deceased beneficial owner hereof, (B) the death of such beneficial owner has occurred and (C) 6 the deceased was a beneficial owner hereof at the time of death, and (iv) if applicable, a properly executed assignment or endorsement, and (v) if the Note is held by a nominee of the deceased beneficial owner, a certificate satisfactory to the Paying Agent from such nominee attesting to the beneficial ownership of such Note. All questions as to the eligibility or validity of any exercise of the Survivor's Option will be determined by the Company, in its sole discretion, which determination will be final and binding. The principal hereof and any premium and interest hereon are payable by the Company in the Specified Currency shown above. If the Specified Currency shown above is other than U.S. dollars, the Company will arrange to convert all payments in respect hereof into U.S. dollars in the manner described on the reverse hereof. The Holder hereof may, if so indicated above, elect to receive all payments in respect hereof in the Specified Currency by delivery of a written notice to the Trustee not later than fifteen calendar days prior to the applicable payment date. Such election will remain in effect until revoked by written notice to the Trustee received not later than fifteen calendar days prior to the applicable payment date. If the Company determines that the Specified Currency is not available for making payments in respect hereof due to the imposition of exchange controls or other circumstances beyond the Company's control or is no longer used by the government of the country issuing such currency or for the settlement of transactions by public institutions or within the international banking community, then the Holder hereof may not so elect to receive payments in the Specified Currency, and any such outstanding election shall be automatically suspended, and payments shall be in U.S. dollars, until the Company determines that the Specified Currency is again available for making such payments. Payments of interest in U.S. dollars (other than interest payable at Stated Maturity) will be made by check mailed to the address of the Person entitled thereto as such address shall appear on the Security Register on the applicable Record Date; provided that, if the Holder hereof is the Holder of U.S. $10,000,000 (or the equivalent thereof in a currency other than U.S. dollars determined as provided on the reverse hereof) or more in aggregate principal amount of Registered Notes of like tenor and term, such U.S. dollar interest payments will be made by wire transfer of immediately available funds, but only if appropriate wire transfer instructions have been received in writing by the Trustee not less than fifteen calendar days prior to the applicable Interest Payment Date. Simultaneously with any election by the Holder hereof to receive payments in respect hereof in the Specified Currency (if other than U.S. dollars), such Holder shall provide appropriate wire transfer instructions to the Trustee and all such payments will be made by wire transfer of immediately available funds to an account maintained by the payee with a bank located outside the United States. The principal hereof and any premium and interest hereon payable at Stated Maturity will be paid in immediately available funds upon surrender of this Note at the corporate trust office or agency of the Trustee located in the City and State of New York. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF AND IN ANY PRICING SUPPLEMENT ATTACHED HERETO OR DELIVERED HEREWITH, AND SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE. 7 This Note shall not become valid or obligatory for any purpose unless and until this Note has been authenticated by Citibank, N.A., or its successor, as authentication agent. 8 IN WITNESS WHEREOF, the Company has caused this Note to be executed under its corporate seal. Dated: CITIGROUP GLOBAL MARKETS HOLDINGS INC. By____________________________________ Authorized Officer [Seal] Attest________________________________ Assistant Secretary CERTIFICATE OF AUTHENTICATION This is one of the Notes issued under the within-mentioned Indenture. Dated: CITIBANK, N.A., as authentication agent By____________________________________ Authorized Signatory 9 (REVERSE OF SECURITY) CITIGROUP GLOBAL MARKETS HOLDINGS INC. DUE NINE MONTHS OR MORE FROM DATE OF ISSUE MEDIUM-TERM SENIOR NOTE, SERIES D (FLOATING OR INDEXED RATE) General This Note is one of a series of duly authorized debt securities of the Company (the "Debt Securities") issued or to be issued in one or more series under an indenture, dated as of December 1, 1988, as amended (the "Indenture"), between the Company and Bank One Trust Company, N.A., as successor trustee (the "Trustee," which term includes any successor Trustee under the Indenture), to which indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Debt Securities and of the terms upon which the Debt Securities are, and are to be, authenticated and delivered. The U.S. dollar equivalent of the public offering price or purchase price of Notes denominated in currencies other than U.S. dollars will be determined by the Company or its agent, as exchange rate agent for the Notes (the "Exchange Rate Agent") on the basis of the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York (the "Market Exchange Rate") for such currencies on the applicable issue dates. The Notes are in registered form without coupons. Unless otherwise specified in the applicable pricing supplement, the authorized denominations of Registered Notes denominated in U.S. dollars will be U.S.$1,000 and any larger amount that is an integral multiple of U.S.$1,000. The authorized denominations of Registered Notes denominated in a currency other than U.S. dollars will be the approximate equivalents thereof in the Specified Currency. Each Registered Note will be issued initially as a Book-Entry Note, and will not be exchangeable for Certificated Notes, except as otherwise provided in the Indenture or specified in the applicable pricing supplement. Floating Rate Notes Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, if this Note is a Floating Rate Note, this Note will bear interest from its Original Issue Date to, but not including, the first Interest Reset Date (as defined below) at the Initial Interest Rate set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith. Thereafter, the interest rate hereon for each Interest Reset Period will be determined by reference to the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, plus or minus the Spread, if any, or multiplied by the Spread Multiplier, if any, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. The Base Rates that may be specified on the face hereof or in the pricing supplement attached hereto or delivered herewith are LIBOR, the Commercial Paper Rate, the Treasury Rate, the Federal Funds Rate, the CD Rate, the Prime 1 Rate, the Eleventh District Cost of Funds Rate, EURIBOR or any other Base Rate specified on the face hereof. "H.15(519)" means the publication entitled "Statistical Release H.15(519), Selected Interest Rates" or any successor publication, published by the Board of Governors of the Federal Reserve System. "H.15 Daily Update" means the daily update of the Board of Governors of the Federal Reserve System at http://www.bog.frb.fed.us/releases/H15/update or any successor site or publication. "Calculation Date," where applicable, means the date on which the Calculation Agent is to calculate the interest rate for the Notes which shall be the earlier of (1) the tenth calendar day after the related Rate Determination Date, or if any such day is not a Business Day, the next succeeding business day or (2) the Business Day preceding the applicable Interest Payment Date or the Stated Maturity, as the case may be. As specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, this Note may also have either or both of the following (in each case expressed as a rate per annum on a simple interest basis): (i) a maximum limitation, or ceiling, on the rate at which interest may accrue during any interest period ("Maximum Interest Rate") and/or (ii) a minimum limitation, or floor, on the rate at which interest may accrue during any interest period ("Minimum Interest Rate"). In addition to any Maximum Interest Rate that may be specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the interest rate will in no event be higher than the maximum rate permitted by applicable law, as the same may be modified by United States law of general application. The Company will appoint, and enter into an agreement with, agents (each, a "Calculation Agent") to calculate interest rates on this Note. All determinations of interest rates by the Calculation Agent shall, in the absence of manifest error, be conclusive for all purposes and binding on the Holder hereof. Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, Citibank, N.A. shall be the Calculation Agent for this Note. At the request of the Holder hereof, the Calculation Agent will provide the interest rate then in effect and, if determined, the interest rate that will become effective on the next Interest Reset Date. The interest rate hereon will be reset daily, weekly, monthly, quarterly, semiannually or annually (such period being the "Interest Reset Period" specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, and the first day of each Interest Reset Period being an "Interest Reset Date"). Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Interest Reset Dates will be as follows: (i) if this Note resets daily, each Business Day; (ii) if this Note (unless this Note is a Treasury Rate Note) resets weekly, Wednesday of each week; (iii) if this Note is a Treasury Rate Note that resets weekly, Tuesday of each week (except as provided below under "Determination of Treasury Rate"); (iv) if this Note resets monthly, the third Wednesday of each month (with the exception of monthly reset Eleventh District Cost of Funds Rate Notes, which reset on the first calendar day of each month); (v) if this Note is an Eleventh District Cost of 2 Funds Rate Note that resets monthly, the first calendar day of each month; (vi) if this Note resets quarterly, the third Wednesday of March, June, September and December of each year; (vii) if this Note resets semiannually, the third Wednesday of the two months of each year specified on the face hereof or in the pricing supplement attached hereto or delivered herewith; and (viii) if this Note resets annually, the third Wednesday of the month of each year specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. If an Interest Reset Date would otherwise be a day that is not a Business Day, such Interest Reset Date shall be postponed to the next succeeding Business Day, except that, if the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is LIBOR or EURIBOR and such Business Day is in the next succeeding calendar month, such Interest Reset Date shall instead be the immediately preceding Business Day. If an auction of direct obligations of United States Treasury Bills falls on a day that is an Interest Reset Date for Treasury Rate Notes, the Interest Reset Date shall be the succeeding Business Day. Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the interest payable hereon on each Interest Payment Date shall be the accrued interest from and including the Original Issue Date or the last date to which interest has been paid, as the case may be, to but excluding such Interest Payment Date. If more than one Interest Reset Date occurs during any period for which accrued interest is being calculated, accrued interest shall be calculated by multiplying the principal amount hereof (or if this Note is an Indexed Principal Note, the Face Amount specified on the face hereof or in the pricing supplement attached hereto or delivered herewith) by an accrued interest factor. Such accrued interest factor will be computed by adding the interest factors calculated for each day in the period for which accrued interest is being calculated. The interest factor (expressed as a decimal calculated to seven decimal places without rounding) for each such day will be computed, unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, by dividing the interest rate in effect on such day by 360, if the Base Rate specified on the face hereof is the Commercial Paper Rate, the Federal Funds Rate, the CD Rate, the Prime Rate, the Eleventh District Cost of Funds Rate, LIBOR, or EURIBOR, or by the actual number of days in the year, if the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is the Treasury Rate. In all other cases, accrued interest shall be calculated by multiplying the principal amount hereof (or if this Note is an Indexed Principal Note, the Face Amount specified on the face hereof) by the interest rate in effect during the period for which accrued interest is being calculated, and multiplying that product by the quotient obtained by dividing the number of days in the period for which accrued interest is being calculated by 360, if the Base Rate specified on the face hereof is the Commercial Paper Rate, the Federal Funds Rate, the CD Rate, the Prime Rate, the Eleventh District Cost of Funds Rate, LIBOR, or EURIBOR, or by the actual number of days in the year, if the Base Rate specified on the face hereof is the Treasury Rate. For purposes of making the foregoing calculations, the interest rate in effect on any Interest Reset Date will be the applicable rate as reset on such date. Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, all percentages resulting from any calculation of the rate of interest hereof will be rounded, if necessary, to the nearest 1/100,000 of 1% (.0000001), with five one-millionths of a percentage point rounded upward, and all currency amounts used in or 3 resulting from such calculation will be rounded to the nearest one-hundredth of a unit (with .005 of a unit being rounded upward). Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, interest will be payable as follows: (i) if this Note resets daily, weekly or monthly (other than Eleventh District Cost of Funds Rate Notes), interest will be payable on the third Wednesday of each month or on the third Wednesday of March, June, September and December of each year, as specified on the face hereof or in the pricing supplement attached hereto or delivered herewith or; (ii) in the case of Eleventh District Cost of Funds Rate Notes, interest will be payable on the first calendar day of each March, June, September and December; (iii) if this Note resets quarterly, interest will be payable on the third Wednesday of March, June, September, and December of each year; (iv) if this Note resets semiannually, interest will be payable on the third Wednesday of each of two months of each year specified on the face hereof or in the pricing supplement attached hereto or delivered herewith; and (v) if this Note resets annually, interest will be payable on the third Wednesday of the month of each year specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, and in each case at Stated Maturity (each such day being an "Interest Payment Date"). If an Interest Payment Date would otherwise fall on a day that is not a Business Day, such Interest Payment Date shall be postponed to the next succeeding Business Day, except that, if the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is LIBOR or EURIBOR and such Business Day is in the next succeeding calendar month, such Interest Payment Date shall instead be the immediately preceding Business Day; provided, however, if with respect to any Note for which "Accrue to Pay" is not specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, if an Interest Payment Date with respect to such Note would otherwise be a day that is not a Business Day, such Interest Payment Date shall not be postponed; provided, further, that any payment required to be made in respect of a Note that does not Accrue to Pay on a date (including the day of Stated Maturity) that is not a Business Day for such Note need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on such date, and no additional interest shall accrue as a result of such delayed payment. Subject to applicable provisions of law and except as specified herein, on each Interest Reset Date the rate of interest shall be the rate determined in accordance with the provisions of the applicable heading below. Determination of CD Rate If the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is the CD Rate, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to the CD Rate and the Spread or Spread Multiplier, if any, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. The "CD Rate" for each Interest Reset Period shall be the rate as of the second Business Day prior to the Interest Reset Date for such Interest Reset Period (a "CD Rate Determination Date") for negotiable U.S. dollar certificates of deposit having the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as published in H.15(519) under the heading "CDs (Secondary Market)". In the event that such rate is not published prior to 3:00 p.m., New York City time, on the Calculation Date (as defined 4 above) pertaining to such CD Rate Determination Date, then the "CD Rate" for such Interest Reset Period will be the rate on such CD Rate Determination Date for negotiable U.S. dollar certificates of deposit of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as published in the H.15 Daily Update, or other recognized electronic source used for the purpose of displaying the applicable rate, under the heading "CDs (Secondary Market)." If by 3:00 p.m., New York City time, on such Calculation Date such rate is not yet published in either H.15(519) or H.15 Daily Update, then the "CD Rate" for such Interest Reset Period will be calculated by the Calculation Agent and will be the arithmetic mean of the secondary market offered rates as of 10:00 a.m., New York City time, on such CD Rate Determination Date of three leading nonbank dealers in negotiable U.S. dollar certificates of deposit in The City of New York selected by the Calculation Agent for negotiable U.S. dollar certificates of deposit of major United States money center banks of the highest credit standing (in the market for negotiable U.S. dollar certificates of deposit) with a remaining maturity closest to the Index Maturity on the face hereof or in the pricing supplement attached hereto or delivered herewith in a denomination of $5,000,000; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting offered rates as mentioned in this sentence, the CD Rate for such Interest Reset Period will be the same as the CD Rate for the immediately preceding Interest Reset Period (or, if there was no such Interest Reset Period, the Initial Interest Rate). Determination of Commercial Paper Rate If the Base Rate shown on the face hereof or in the pricing supplement attached hereto or delivered herewith is the Commercial Paper Rate, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to the Commercial Paper Rate and the Spread or Spread Multiplier, if any, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. The "Commercial Paper Rate" for each Interest Reset Period will be determined by the Calculation Agent as of the second Business Day prior to the Interest Reset Date for such Interest Reset Period (a "Commercial Paper Rate Determination Date") and shall be the Money Market Yield (as defined below) on such Commercial Paper Rate Determination Date of the rate for commercial paper having the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, as such rate shall be published in H.15(519) under the heading "Commercial Paper-Nonfinancial." In the event that such rate is not published prior to 3:00 p.m., New York City time, on the Calculation Date (as defined above) pertaining to such Commercial Paper Rate Determination Date, then the Commercial Paper Rate for such Interest Reset Period shall be the Money Market Yield on such Commercial Paper Rate Determination Date of the rate for commercial paper of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as published in the H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying the applicable rate, under the heading "Commercial Paper-Nonfinancial." If by 3:00 p.m., New York City time, on such Calculation Date such rate is not yet published in either H.15(519) or the H.15 Daily Update, then the "Commercial Paper Rate" for such Interest Reset Period shall be the Money Market Yield of the arithmetic mean of the offered rates as of 11:00 a.m., New York City time, on such Commercial Paper Rate Determination Date of three leading dealers of U.S. dollar commercial paper in The City of New York selected by the Calculation Agent for commercial paper of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or 5 delivered herewith placed for an industrial issuer whose bonds are rated "AA" or the equivalent by a nationally recognized rating agency; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting offered rates as mentioned in this sentence, the "Commercial Paper Rate" for such Interest Reset Period will be the same as the Commercial Paper Rate for the immediately preceding Interest Reset Period (or, if there was no such Interest Reset Period, the Initial Interest Rate). "Money Market Yield" shall be the yield calculated in accordance with the following formula: D x 360 Money Market Yield = ------------------ X 100 360 - (D x M) where "D" refers to the applicable per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal and "M" refers to the actual number of days in the applicable Interest Reset Period specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Determination of Federal Funds Rate If the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is the Federal Funds Rate, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to the Federal Funds Rate and Spread or Spread Multiplier, if any, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. The "Federal Funds Rate" for each Interest Reset Period shall be the effective rate on the second Business Day prior to the Interest Reset Date for such Interest Reset Period (a "Federal Funds Rate Determination Date") for Federal Funds as published in H.15(519) under the heading "Federal Funds (Effective)" and displayed on Moneyline Telerate (or any successor service) on Page 120 (or any other page as may replace the specified Page on that service). In the event that such rate does not appear on Moneyline Telerate on Page 120 or is not published prior to 3:00 p.m., New York City time, on the Calculation Date (as defined above) pertaining to such Federal Funds Rate Determination Date, the "Federal Funds Rate" for such Interest Reset Period shall be the rate on such Federal Funds Rate Determination Date as published in the H.15 Daily Update under the heading "Federal Funds/Effective Rate," or other recognized electronic source used for the purpose of displaying the applicable rate. If by 3:00 p.m., New York City time, on such Calculation Date, such rate is not yet published, then the "Federal Funds Rate" for such Interest Reset Period shall be the arithmetic mean of the rates for the last transaction in overnight U.S. dollar federal funds arranged by three leading brokers of U.S. dollar Federal Funds transactions in New York City, selected by the Calculation Agent prior to 9:00 a.m., New York City time, on that Federal Funds Rate Determination Date; provided, however, that if the brokers so selected by the Calculation Agent are not quoting as mentioned above, the "Federal Funds Rate" for the Interest Reset Period will be the "Federal Funds Rate" in effect for the particular Federal Funds Rate Determination Date. If there was no Federal Funds Rate in effect for the Interest Reset Period, the "Federal Funds Rate" will be the initial interest rate. 6 Determination of LIBOR If the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is LIBOR, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to LIBOR and the Spread or Spread Multiplier, if any, specified on the face hereof. "LIBOR" for each Interest Reset Period will be determined by the Calculation Agent as follows. On the second London Business Day prior to the Interest Reset Date for such Interest Reset Period (a "LIBOR Determination Date"), the Calculation Agent for such LIBOR Note will determine the offered rates for deposits in the Specified Currency for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, which appear on the Designated LIBOR Page at approximately 11:00 a.m., London time, on such LIBOR Determination Date. "Designated LIBOR Page" means either (a) if "LIBOR Moneyline Telerate" is designated on the face hereof or in the pricing supplement attached hereto or delivered herewith, or if neither "LIBOR Reuters" nor "LIBOR Moneyline Telerate" is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as the method for calculating LIBOR, the display designated as page "3750" on the Telerate Service ("Telerate") (or such other page as may replace page "3750" on such service or such other service as may be replaced by a successor service for the purpose of displaying the London interbank offered rates of major banks), and LIBOR for such Interest Reset Period will be the relevant offered rate as determined by the Calculation Agent or (b) if "LIBOR Reuters" is designated on the face hereof or in the pricing supplement attached hereto or delivered herewith, "Designated LIBOR Page" means the display designated as page "LIBO" on the Reuters Monitor Money Rates Service and LIBOR will be the arithmetic means of the offered rates, calculated by the Calculation Agent, or the offered rate, if the designated LIBOR page by its terms provides only for a single rate (or such other page as may replace the LIBO page on such service or such other service as may be replaced by a successor service for the purpose of displaying London interbank offered rates of major banks). If neither LIBOR Reuters nor LIBOR Telerate is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, LIBOR will be determined as if LIBOR Moneyline Telerate had been specified. If LIBOR cannot be determined as described above (either because the Designated LIBOR Page is no longer available or because fewer than two offered rates appear on the Designated LIBOR Page on the LIBOR Determination Date), the Calculation Agent will determine "LIBOR" as follows. The Calculation Agent will request the principal London offices of each of the four major banks in the London interbank market selected by the Calculation Agent to provide the Calculation Agent with its offered quotations for deposits in the Specified Currency for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, to prime banks in the London interbank market at approximately 11:00 a.m., London time, on the LIBOR Determination Date, in a principal amount equal to an amount of at least $1,000,000 or its approximate equivalent thereof in the Specified Currency, that is representative of a single transaction in such market at such time. If two or more such quotations are provided, "LIBOR" for such Interest Reset Period will be the arithmetic mean of such quotations. If fewer than two such quotations are provided, "LIBOR" for such Interest Reset Period will be the arithmetic 7 mean of rates quoted by three major banks in The City of New York selected by the Calculation Agent at approximately 11:00 a.m., New York city time, on the LIBOR Determination Date for loans in the Specified Currency to leading European banks for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, in a principal amount equal to an amount of at least $1,000,000 or the approximate equivalent thereof in the Specified Currency that is representative of a single transaction in such market at such time; provided, however, that if fewer than three banks selected as aforesaid by the Calculation Agent are quoting rates as mentioned in this sentence. "LIBOR" for such Interest Reset Period will be the same as LIBOR for the immediately preceding Interest Reset Period (or, if there was no such Interest Reset Period, the LIBOR Rate will be the Initial Interest Rate). Determination of Treasury Rate If the Base Rate specified in the face hereof or in the pricing supplement attached hereto or delivered herewith is the Treasury Rate or Treasury Rate Constant Maturity, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to the Treasury Rate and the Spread or Spread Multiplier, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Unless "Treasury Rate Constant Maturity" is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the "Treasury Rate" for each Interest Reset Period will be the rate for the auction held on the Treasury Rate Determination Date (as defined below) for such Interest Reset Period of direct obligations of the United States ("Treasury Securities") that have the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, as such rate appears on either Moneyline Telerate (or any successor service) on page 56 (or any other page as may replace the page on that service) or on page 57 (or any other page as may replace that page on that service) under the heading "Investment Rate." The following procedures will be followed if the Treasury Rate cannot be determined as described above. If not so published by 3:00 p.m., New York City time, on the Calculation Date, the Treasury Rate will be the Bond Equivalent Yield (defined below) of the rate for the applicable treasury securities as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the heading "U.S. Government Securities/Treasury Bills/Auction High." In the event that such rate is not so published by 3:00 p.m., New York City time, on the related Calculation Date, the Treasury Rate will be the Bond Equivalent Yield of the auction rate of the applicable Treasury Securities as announced by the United States Department of the Treasury. In the event that the results of the auction of Treasury Securities is not so announced by the United States Department of the Treasury, or if the auction is not held, then the Treasury Rate will be the Bond Equivalent Yield of the rate on the Treasury Rate Determination Date of the applicable Treasury Securities published in H.15(519) under the heading of "U.S. Government Securities/Treasury Bills/Secondary Market." If such rate is not so published by 3:00 p.m., New York City time, on the related Calculated Date, then the Treasury Rate will be the rate on the Treasury Rate Determination Date of the applicable Treasury Securities as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the heading "U.S. Government Securities/Treasury Bills/Secondary Market." In the event that such rate is not so published by 3:00 p.m., New York City time, on the related Calculation Date, then the Treasury Rate will be the rate on the Treasury Rate Determination Date calculated by the Calculation Agent as the Bond Equivalent 8 Yield of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 p.m., New York City time, on the Treasury Rate Determination Date, of three primary United States government securities dealers selected by the Calculation Agent for the issue of Treasury Securities with a remaining maturity closest to the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting bid rates as mentioned in this sentence, then the "Treasury Rate" for such Interest Reset Period will be the same as the Treasury Rate for the immediately preceding Interest Reset Period (or, if there was no Interest Reset Period, the Initial Interest Rate). The "Treasury Rate Determination Date" for each Interest Reset Period will be the day of the week in which the Interest Reset Date for such Interest Reset Period falls on which Treasury Securities would normally be auctioned. Treasury Securities are normally sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is normally held on the following Tuesday, except that such auction may be held on the preceding Friday. If, as the result of a legal holiday, an auction is so held on the preceding Friday, such Friday will be the Treasury Rate Determination Date pertaining to the Interest Reset Period commencing in the next succeeding week. If an auction date shall fall on any day that would otherwise be an Interest Reset Date for a Note whose Base Rate is the Treasury Rate, then such Interest Reset Date shall instead be the Business Day immediately following such auction date. Bond Equivalent: Yield will be calculated as follows: D x N Bond Equivalent Yield = ------------------ X 100 360 - (D x M) where "D" refers to the applicable per annum rate for treasury securities quoted on a bank discount basis and expressed as a decimal, "N" refers to 365 or 366, as the case may be, and "M" refers to the actual number of days in the applicable interest reset period. If "Treasury Rate Constant Maturity" is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the "Treasury Rate" for each Interest Reset Period will be the rate displayed on the Designated CMT Telerate Rate Page under the caption "Treasury Constant Maturities" under the column for the Designated CMT Maturity Index in the following manner. If the Designated CMT Moneyline Telerate Page is 7051, the Treasury Rate will be the rate on the Constant Maturity Treasury Rate Determination Date. In the event that such rate does not appear on Moneyline Telerate Page 7051, then the Treasury Rate will be the treasury constant maturity rate for the designated CMT maturity index as published in the relevant H.15(519) under the caption "Treasury Constant Maturities." In the event that such rate does not so appear in H.15(519), then the Treasury Rate will be the constant treasury maturity rate on the Constant maturity Treasury Rate Determination Date for the designated CMT maturity index as may then be published by either the Federal Reserve System Board of Governors or the United States Department of the Treasury that the calculation agent determines to be comparable to the rate which would have otherwise been published in H.15(519). If the Designated CMT Moneyline Telerate Page is 7052, the "Treasury Rate" will be the weekly or monthly average, as specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, for the week or the month, as applicable, ended 9 immediately preceding the week or month, as applicable, in which the related Constant Maturity Treasury Rate Determination Date occurs. In the event that such rate does not appear on Moneyline Telerate Page 7052, then the Treasury Rate will be the one-week or one-month, as specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, average of the treasury constant maturity rate for the designated CMT maturity index for the week or month as applicable, preceding the Constant Maturity Treasury Determination Date as published in the relevant H.15(519) under the caption "Treasury Constant Maturities." In the event that such rate does not so appear in H.15(519), then the Treasury Rate will be the one-week or one-month, as specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, average of the constant treasury maturity rate for the designated CMT maturity index as otherwise announced by the Federal Reserve Bank of New York for the week or month, as applicable, ended immediately preceding the week or month, as applicable, in which the Constant Maturity Treasury Rate Determination Date falls. The following procedures will be followed if the Treasury Rate cannot be determined as indicated above. If such information, as applicable, is not so published, then the Calculation Agent will calculate the Treasury Rate on the Constant Maturity Treasury Rate Determination Date as follows which shall be a yield to maturity, based on the arithmetic mean of the secondary market bid prices as of approximately 3:30 p.m., New York City time, on the Constant Maturity Treasury Rate Determination Date of three leading U.S. government securities dealers in The City of New York selected by the Calculation Agent, one of which may be the Agent, from five such dealers selected by the Calculation Agent and eliminating the highest quotation, or in the event of equality, one of the highest, and the lowest quotation, or, in the event of equality, one of the lowest, for United States Treasury Securities ("Treasury Notes"), with an original maturity of approximately the Designated CMT Maturity Index and a remaining term to maturity of not less than such Designated CMT Maturity Index minus one year and in a principal amount that is representative for a single transaction in the securities in that market at that time. If the Calculation Agent is unable to obtain three such Treasury Note quotations, the Treasury Rate on the Constant Maturity Treasury Rate Determination Date will be calculated by the Calculation Agent, and shall be a yield to maturity based on the arithmetic mean of the secondary market offer side prices as of approximately 3:30 p.m., New York City time, on the Constant Maturity Treasury Rate Determination Date of three leading U.S. government securities dealers in the City of New York, one of which may be the Agent, from five such dealers selected by the Calculation Agent and eliminating the highest quotation, or, in the event of equality, one of the highest, and the lowest quotation, or, in the event of equality, one of the lowest, for Treasury Notes with an original maturity of the number of years that is the next highest to the Designated CMT Maturity Index and a remaining maturity closest to the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, and in an amount that is representative for a single transaction in that market at that time. If three or four, and not five, of such dealers are quoting as described above, then the Treasury Rate will be based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of such quotes will be eliminated. However, if fewer than three dealers so selected by the Calculation Agent are quoting as mentioned above, the Treasury Rate determined as of the Constant Maturity Treasury Rate Determination Date will be the Treasury Rate in 10 effect on the Constant Maturity Treasury Rate Determination Date. If two Treasury Notes with an original maturity as described in the third preceding sentence have remaining terms to maturity equally close to the Designated CMT Maturity Index, the Calculation Agent will obtain quotations for the Treasury Note with the shorter remaining term to maturity and will use such quotations to calculate the Treasury Rate as set forth above. "Designated CMT Moneyline Telerate Page" means the display on the Telerate Service, or any successor service on the page specified in the applicable pricing supplement, or any other page as may replace such page on that service, or any successor service, for the purpose of displaying Treasury Constant Maturities as reported in H.15(519). If no such page is specified in the applicable pricing supplement, the Designated CMT Telerate Page shall be 7052, for the most recent week. "Designated CMT Maturity Index" means the original period to maturity of the U.S. Treasury securities, either one, two, three, five, seven, ten, twenty or thirty years, specified in the applicable pricing supplement with respect to which the Treasury Rate will be calculated. If no such maturity is specified in the applicable pricing supplement, the Designated CMT Maturity Index shall be two years. "The Constant Maturity Treasury Rate Determination Date" shall be the second Business Day prior to the Interest Reset Date for the applicable Interest Reset Period. Determination of Prime Rate Prime Rate Notes will bear interest at the interest rates (calculated with reference to the Prime Rate and the Spread and/or Spread Multiplier, if any) specified in the Prime Rate Notes and in the applicable pricing supplement. The "Prime Rate" for each Interest Reset Period will be determined by the Calculation Agent for such Prime Rate Note as of the second Business Day prior to the Interest Reset Date for such Interest Reset Period (a "Prime Rate Determination Date") and shall be the rate made available and subsequently published on such date in H.15(519) under the heading "Bank Prime Loan." In the event that such rate is not published prior to 3:00 p.m., New York City time, on the Calculation Date (as defined above) pertaining to such Prime Rate Determination Date, then the Prime Rate for such Interest Reset Period shall be the rate published in the H.15 Daily Update under the heading "Bank Prime Loan." In the event that such rate has not been published prior to 3:00 p.m., New York City time, on the Calculation Date, then the Prime Rate will be calculated by the Calculation Agent and will be the arithmetic mean of the rates of interest publicly announced by each bank that appears on the Reuters Screen USPRIME1 Page (as defined below) as such bank's prime rate or base lending rate on the Prime Rate Determination Date. If fewer than four such rates appear on the Reuters Screen USPRIME1 Page for the Prime Rate Determination Date, the rate shall be the arithmetic mean of the prime rates quoted on the basis of the actual number of days in the year divided by 360 as of the close of business on the Prime Rate Determination Date by three major banks in The City of New York selected by the Calculation Agent. However, if the banks so selected by the Calculation Agent are not quoting as mentioned in the previous sentence, the Prime Rate will be the Prime Rate in effect on the Prime Rate Determination Date. 11 "Reuters Screen USPRIME1 Page" means the display designated as page "USPRIME1" on the Reuters Monitor Money Rates Service, (or such other page as may replace the USPRIME1 page on that service for the purpose of displaying prime rates or base lending rates of major United States banks). Determination of Eleventh District Cost of Funds Rate Eleventh District Cost of Funds Rate Notes will bear interest at the interest rates (calculated by reference to the Eleventh District Cost of Funds Rate and the Spread and/or Spread Multiplier, if any) specified in the Eleventh District Cost of Funds Rate Notes and in the applicable pricing supplement. The "Eleventh District Cost of Funds Rate," for each Interest Reset Period will be determined by the Calculation Agent for such Eleventh District Cost of Funds Rate Note as of the last working day of the month immediately prior to such Interest Reset Date for such Interest Reset Period on which the Federal Home Loan Bank of San Francisco (the "FHLB of San Francisco") publishes the Eleventh District Cost of Funds Index (as defined below) (the "Eleventh District Cost of Funds Rate Determination Date"), and shall be the rate equal to the monthly weighted average cost of funds for the calendar month preceding such Eleventh District Cost of Funds Rate Determination Date as set forth under the caption "Eleventh District" on Moneyline Telerate (or any successor service) on page 7058 (which page shall include any successor page (as determined by the Calculation Agent)) as of 11:00 a.m., San Francisco time, on such Eleventh District Cost of Funds Rate Determination Date. If such rate does not appear on Telerate page 7058 on any related Eleventh District Cost of Funds Rate Determination Date, the Eleventh District Cost of Funds Rate for such Eleventh District Cost of Funds Rate Determination Date shall be the monthly weighted average cost of funds paid by member institutions of the Eleventh Federal Home Loan Bank District that was most recently announced (the "Eleventh District Cost of Funds Rate Index") by the FHLB of San Francisco as such cost of funds for the calendar month preceding the date of such announcement. If the FHLB of San Francisco fails to announce such rate on or prior to the Eleventh District Cost of Funds Rate Determination Date for the calendar month immediately preceding such date, then the Eleventh District Cost of Funds Rate for such date will be the Eleventh District Cost of Funds Rate in effect on the Eleventh District Cost of Funds Rate Determination Date. Determination of EURIBOR If the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is EURIBOR, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to EURIBOR and the Spread or Spread Multiplier, if any, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. "EURIBOR" for each Interest Reset Period will be determined by the Calculation Agent as follows. On the second TARGET Business Day prior to the Interest Reset Date for such Interest Reset Period (a "EURIBOR Determination Date"), the Calculation Agent for such EURIBOR Note will determine the offered rates for deposits in Euros as sponsored, calculated and published jointly by the European Banking Federation and ACI--The Financial Market 12 Association, or any company established by the joint sponsors for purposes of compiling and publishing those rates, for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, which appears on the Designated EURIBOR Page as of 11:00 a.m., Brussels time, on such EURIBOR Determination Date. "Designated EURIBOR Page" means the display designated as page "248" on Telerate (or any successor service or such other page as may replace page "248" on such service), and EURIBOR for such Interest Reset Period will be the relevant offered rates as determined by the Calculation Agent. If EURIBOR cannot be determined as described above the Calculation Agent will determine "EURIBOR" as follows. The Calculation Agent will request the principal Euro-zone (as defined below) office of each of four major banks in the Euro-zone interbank market selected by the Calculation Agent to provide the Calculation Agent with their respective offered quotations for deposits in Euros for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, to prime banks in the Euro-zone interbank market at approximately 11:00 a.m., Brussels time, on the EURIBOR Determination Date, in a principal amount equal to an amount of at least $1,000,000 or its approximate equivalent thereof in Euros that is representative of a single transaction in such market at such time. If two or more such quotations are provided, "EURIBOR" for such Interest Reset Period will be the arithmetic mean of such quotations. If less than two such quotations are provided, "EURIBOR" for such Interest Reset Period will be the arithmetic mean of rates quoted by four major banks in the Euro-zone selected by the Calculation Agent for such EURIBOR Note at approximately 11:00 a.m., Brussels time, on the EURIBOR Determination Date for loans in Euros to leading European banks for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, in a principal amount equal to an amount of at least $1,000,000 or the approximate equivalent thereof in Euros that is representative of a single transaction in such market at such time; provided, however, that if the banks so selected a aforesaid by the Calculation Agent are not quoting rates as mentioned in this sentence, "EURIBOR" for such Interest Reset Period will be same as EURIBOR for the immediately preceding Interest Reset Period (or, if there was no such Interest Reset Period, the EURIBOR Rate will be the Initial Interest Rate). "Euro-zone" means the region comprised of member states of the European Union that adopt the single currency in accordance with the Treaty establishing the European Community, as amended by the Treaty on European Union. Inverse Floating Rate Notes If this Note is designated as an Inverse Floating Rate Note on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Inverse Floating Rate shall be equal to (i) in the case of the period, if any, commencing on the Original Issue Date (or such other date which may be specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as the date on which this Note shall begin to accrue interest), up to the first Interest Reset Date, the Initial Fixed Interest Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, and (ii) in the case of each period commencing on an Interest Reset Date, the Reset Fixed Reference Rate specified on the face 13 hereof or in the pricing supplement attached hereto or delivered herewith minus the interest rate determined by reference to the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, as adjusted by the Spread and/or Spread Multiplier, if any, as determined in accordance with the provisions hereof; provided, however, that (x) the interest rate thereon will not be less than zero and (y) the interest rate in effect for the ten days immediately prior to the date of Stated Maturity will be the rate in effect on the tenth day preceding such date. Floating Rate / Fixed Rate Notes If this Note is designated as a Floating Rate / Fixed Rate Note, this Note will be a Floating Rate note for a specified portion of its term and a Fixed Rate Note for the remainder of its term, in which event the interest rate on this Note will be determined as provided herein as if it were a Floating Rate Note and a Fixed Rate Note hereunder for each such respective period, all as described herein and in the applicable pricing supplement. Subsequent Interest Periods If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Spread, Spread Multiplier or method of calculation of the Interest Rate on this Note may be reset by the Company on the date or dates specified on the face hereof or in the pricing supplement attached hereto or delivered herewith (each an "Optional Reset Date"). The Company may reset the Spread, Spread Multiplier or method of calculation of the Interest Rate Interest Rate by notifying the Trustee for this Note at least 45 but not more than 60 days prior to each Optional Reset Date. Not later than 40 days prior to each Optional Reset Date, the Trustee will mail to the Holder of this Note a notice (the "Reset Notice"), first class, postage prepaid, indicating whether the Company has elected to reset the Spread, Spread Multiplier or method of calculation of the Interest Rate, and if so, (i) such new Spread, Spread Multiplier or method of calculation of the Interest Rate and (ii) the provisions, if any, for redemption during the period from such Optional Reset Date to the next Optional Reset Date, or, if there is no such next Optional Reset Date, to the Stated Maturity of this Note (each such period, a "Subsequent Interest Period"), including the date or dates on which or the period or periods during which and the price or prices at which such redemption may occur during the Subsequent Interest Period. Upon the transmittal by the Trustee of a Reset Notice to the Holder of a Note, such new Spread, Spread Multiplier or method of calculation of the Interest Rate shall take effect automatically. Except as modified by the Reset Notice and as described below, such Note will have the same terms as prior to the transmittal of such Reset Notice. Notwithstanding the foregoing, not later than 20 days prior to the Optional Reset Date, the Company may, at its option, revoke the Spread or Spread Multiplier provided for in the Reset Notice and establish a higher Spread or Spread Multiplier for the Subsequent Interest Period by causing the Trustee to mail notice of such higher Spread or Spread Multiplier, first class, postage prepaid, to the Holder of this Note. Such notice shall be irrevocable. All Registered Notes with respect to which the Spread or Spread Multiplier is reset on an Optional Reset Date will bear such higher Spread or Spread Multiplier. The Holder of this Note will have the option to elect repayment of the Note by the Company on each Optional Reset Date at a price equal to the principal amount hereof, plus interest accrued to such Optional Reset Date. In order to obtain repayment on an Optional Reset 14 Date, the Holder must follow the procedures set forth below for optional repayment, except that the period for delivery or notification to the Trustee shall be at least 25 but not more than 35 days prior to such Optional Reset Date, and except that if the Holder has tendered this Note for repayment pursuant to a Reset Notice, the Holder may, by written notice to the Trustee, revoke such tender for repayment until the close of business on the tenth day before the Optional Reset Date. Indexed Notes If this Note is an Indexed Principal Note, then certain or all interest payments, in the case of an Indexed Rate Note, and/or the principal amount payable at Stated Maturity or earlier redemption or retirement, in the case of an Indexed Principal Note, is determined by reference to the amount designated on the face hereof or in the pricing supplement attached hereto or delivered herewith as the Face Amount of this Note and by reference to the Index as described on the face hereof or in the pricing supplement attached hereto or delivered herewith. If this Note is an Indexed Principal Note, the amount of any interest payment will be determined by reference to the Face Amount described on the face hereof or in the pricing supplement attached hereto or delivered herewith. If this Note is an Indexed Principal Note, the principal amount payable at Stated Maturity or any earlier redemption or repayment of this Note may be different from the Face Amount. If a third party is appointed to calculate or announce the Index for a particular Indexed Note and the third party either suspends the calculation or announcement of such Index or changes the basis upon which such Index is calculated in a manner that is inconsistent with the applicable pricing supplement, then the Company will select another third party to calculate or announce the Index. The agent or another affiliate of the Company may be either the original or successor third party selected by the Company. If for any reason such Index cannot be calculated on the same basis and subject to the same conditions and controls as applied to the original third party, then the indexed interest payments, if any, or any indexed principal amount of this Note shall be calculated in the manner set forth in the applicable pricing supplement. Any determination of such third party shall in the absence of manifest error be binding on all parties. Specified Currency If the Specified Currency is other than U.S. dollars, the amount of any U.S. dollar payment to be made in respect hereof will be determined by the Company or its agent based on the specified currency/U.S. dollar exchange rate prevailing at 11:00 a.m., London time, on the second Exchange Rate Business Day prior to the applicable payment date. In the event that such exchange rate bid quotation is not so available, the Exchange Rate Agent after consultation with the Company's control. All currency exchange costs will be borne by the Holders of such Registered Notes by deductions from such payments. If no such bid quotations are available, then such payments will be made in the Specified Currency, unless the Specified Currency is unavailable due to the imposition of exchange controls or to other circumstances beyond the Company's control, in which case payment will be made as described in the next paragraph. 15 Payments in Currencies other than the Specified Currency Except as set forth below, if any payment in respect hereof is required to be made in a Specified Currency other than U.S. dollars and such currency is unavailable due to the imposition of exchange controls or other circumstances beyond the Company's control or is no longer used by the government of the country issuing such currency or for the settlement of transactions by public institutions of or within the international banking community, then such payment shall be made in U.S. dollars until such currency is again available or so used. The amount so payable in such foreign currency shall be converted into U.S. dollars on the basis of the most recently available Market Exchange Rate for such currency or as otherwise indicated on the face hereof or in the pricing supplement attached hereto or delivered herewith. Any payment made under such circumstances in U.S. dollars will not constitute an Event of Default under the Indenture. In the event of an official redenomination of the Specified Currency of this Note (other than as a result of European Monetary Union, but including, without limitation, an official redenomination of any such Specified Currency that is a composite currency), the obligations of the Company with respect to payments on this Note shall, in all cases, be deemed immediately following such redenomination to provide for the payment of that amount of redenominated currency representing the amount of such obligations immediately before such redenomination. This Note does not provide for any adjustment to any amount payable under this Note as a result of (i) any change in the value of the Specified Currency hereof relative to any other currency due solely to fluctuations in exchange rates or (ii) any redenomination of any component currency of any composite currency (unless such composite currency is itself officially redenominated). Dual Currency Notes If this Note is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as a Dual Currency Note, the Company may have a one time option of making all payments of principal, premium, if any, and interest on all Dual Currency Notes issued on the same day and having the same terms (a "Tranche"), which payments would otherwise be made in the Specified Currency of such Notes, in an optional currency (the "Optional Payment Currency"). Such option will be exercisable in whole but not in part on an "Option Election Date," which will be any one of the dates specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. If the Company makes such an election, the amount payable in the Optional Payment Currency shall be determined using the Designated Exchange Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. If such election is made, notice of such election shall be mailed in accordance with the terms of the applicable Tranche of Dual Currency Notes within two Business Days of the Option Election Date and shall state (i) the first date, whether an Interest Payment Date and/or Stated Maturity, in which scheduled payments in the Optional Payment Currency will be made and (ii) the Designated Exchange Rate. Any such notice by the Company, once given, may not be withdrawn. The equivalent value in the Specified Currency of payments made after such an election may be less, at the then current exchange rate, than if the Company had made such payment in the Specified Currency. 16 Renewable Notes If this Note is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as a Renewable Note, this Note will mature on an Interest Payment Date occurring in or prior to the twelfth month following the Original Issue Date of this Note (the "Initial Maturity Date") unless the term of all or any portion of this Note is renewed in accordance with the following procedures: On the Interest Payment Date occurring in the sixth month (unless a different interval (the "Special Election Interval") is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith) prior to the Initial Maturity Date of this Note (the "Initial Renewal Date") and on the Interest Payment Date occurring in each sixth month (or in the last month of each Special Election Interval) after such Initial Renewal Date (each, together with the Initial Renewal Date, a "Renewal Date"), the term of this Note may be extended to the Interest Payment Date occurring in the twelfth month (or, if a Special Election Interval is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the last month in a period equal to twice the Special Election Interval) after such Renewal Date, if the Holder of this Note elects to extend the term of this Note or any portion thereof as described below. If the Holder does not elect to extend the term of any portion of the principal amount of this Note during the specified period prior to any Renewal Date, such portion will become due and payable on the Interest Payment Date occurring in the sixth month (or the last month in the Special Election Interval) after such Renewal Date (the "New Maturity Date"). The Holder may elect to renew the term of this Note, or if so specified, any portion thereof, by delivering a notice to such effect to the Trustee (or any duly appointed paying agent) at the corporate trust office of the Trustee or agency of the Trustee in the City of New York not less than 15 nor more than 30 days prior to such Renewal Date, unless another period is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Such election will be irrevocable and will be binding upon each subsequent Holder of this Note. An election to renew the term of this Note may be exercised with respect to less than the entire principal amount of this Note only if so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith and then only in such principal amount, or any integral multiple in excess thereof, as is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Notwithstanding the foregoing, the term of this Note may not be extended beyond the Stated Maturity specified for this Note on the face hereof or in the pricing supplement attached hereto or delivered herewith. If the Holder does not elect to renew the term, this Note must be presented to the Trustee (or any duly appointed paying agent) and, as soon as practicable following receipt of such Note the Trustee (or any duly appointed paying agent) shall issue in exchange therefor in the name of such Holder (i) a Note, in a principal amount equal to the principal amount of such exchanged Note for which no election to renew the term thereof was exercised, with terms identical to those specified on such exchanged Note (except that such Note shall have a fixed, nonrenewable Stated Maturity on the New Maturity Date) and (ii) if an election to renew is made with respect to less than the full principal amount of such Holder's Note, the Trustee or any duly appointed paying agent shall issue in exchange for such Note in the name of such Holder a 17 replacement Renewable Note, in a principal amount equal to the principal amount of such exchanged Note for which the election to renew was made, with terms otherwise identical to the exchanged Note. Extension of Stated Maturity If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Stated Maturity of this Note may be extended at the option of the Company for one or more periods of whole years specified on the face hereof or in the pricing supplement attached hereto or delivered herewith (each an "Extension Period") from one to five years up to but not beyond the date (the "Final Maturity") set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith. The Company may exercise such option by notifying the Trustee for this Note at least 45 but not more than 60 days prior to the original Stated Maturity of this Note. If the Company exercises such option, the Trustee will mail to the Holder of this Note not later than 40 days prior to the original Stated Maturity a notice (the "Extension Notice"), first class, postage prepaid, indicating (i) the election of the Company to extend the Stated Maturity, (ii) the new Stated Maturity, (iii) the Spread or Spread Multiplier applicable to the Extension Period, and (iv) the provisions, if any, for redemption during such Extension Period including the date or dates on which, or the period or periods during which, and the price or prices at which, such redemption may occur during the Extension Period. Upon the Trustee's mailing of the Extension Notice, the Stated Maturity of this Note shall be extended automatically and, except as modified by the Extension Notice and as described in the next paragraph, this Note will have the same terms as prior to the mailing of such Notice. Notwithstanding the foregoing, not later than 20 days prior to the original Stated Maturity of this Note, the Company may, at its option, revoke the Spread or Spread Multiplier provided for in the Extension Notice and establish a higher Spread or Spread Multiplier for the Extension Period by causing the Trustee to mail notice of such higher Spread or Spread Multiplier, first class, postage prepaid, to the Holder of this Note. Such notice shall be irrevocable. All Registered Notes with respect to which the Stated Maturity is extended will bear such higher Spread or Spread Multiplier for the Extension Period, whether or not tendered for repayment. If the Company extends the Stated Maturity of this Note, the Holder will have the option to elect repayment of this Note by the Company on the original Stated Maturity at a price equal to the principal amount hereof, plus interest accrued to such date. In order to obtain repayment on such original Stated Maturity once the Company has extended the Stated Maturity hereof, the Holder must follow the procedures set forth below for optional repayment, except that the period for delivery or notification to the Trustee shall be at least 25 but not more than 35 days before the original Stated Maturity, and except that if the Holder has tendered this Note for repayment pursuant to an Extension Notice, the Holder may, by written notice to the Trustee, revoke such tender for repayment until the close of business on the tenth calendar day before the original Stated Maturity. 18 Optional Redemption, Repayment and Repurchase If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Company may, at its option, redeem this Note in whole or in part, on the date or dates (each an "Optional Redemption Date") specified herein, at the price (the "Redemption Price") (together with accrued interest to such Optional Redemption Date) specified herein. Unless otherwise stated on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Trustee shall mail to the Holder a notice of such redemption first class, postage prepaid, at least 30 days prior to the date of redemption. Unless otherwise stated herein, the Company may exercise such option with respect to a redemption of this Note in part only by notifying the Trustee for this Note at least 45 days prior to any Optional Redemption Date. In the event of redemption of this Note in part only, a new Note or Notes for the unredeemed portion hereof will be issued to the Holder hereof upon the cancellation hereof. If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, this Note will be repayable prior to Stated Maturity at the option of the Holder on the Optional Repayment Dates shown on the face hereof or in the pricing supplement attached hereto or delivered herewith at the Optional Repayment Prices shown on the face hereof or in the pricing supplement attached hereto or delivered herewith, together with accrued interest to the date of repayment. In order for this Note to be repaid, the Trustee must receive at least 30 but not more than 45 days prior to an Optional Repayment Date (i) this Note with the form below entitled "Option to Elect Repayment" duly completed; or (ii) a telegram, telex, facsimile transmission or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc. or a commercial bank or trust company in the United States of America setting forth the name of the Holder of this Note, the principal amount of the Note to be repaid, the certificate number or a description of the tenor and terms of this Note, a statement that the option to elect repayment is being exercised thereby and a guarantee that this Note with the form below entitled "Option to Elect Repayment" duly completed will be received by the Trustee not later than five Business Days after the date of such telegram, telex, facsimile transmission or letter. If the procedure described in clause (ii) of the preceding sentence is followed, this Note with form duly completed must be received by the Trustee by such fifth Business Day. Any tender of this Note for repayment (except pursuant to a Reset Notice or an Extension Notice) shall be irrevocable. The repayment option may be exercised by the Holder of this Note for less than the entire principal amount of the Note; provided that the principal amount of this Note remaining outstanding after repayment is an authorized denomination. Upon such partial repayment, this Note shall be canceled and a new Note or Notes for the remaining principal amount hereof shall be issued in the name of the Holder of this Note. Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, this Note will not be subject to any sinking fund. Notwithstanding anything herein to the contrary, if this Note is a Discount Note, the amount payable in the event of redemption or repayment prior to the Stated Maturity hereof (other than pursuant to an optional redemption by the Company at a stated Redemption Price), in lieu of the principal amount due at the Stated Maturity hereof, shall be the Amortized Face Amount of this Note as of the redemption date or the date of repayment, as the case may be. The Amortized Face Amount of this Note on any date shall be the amount equal to (i) the Issue Price 19 set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith plus (ii) that portion of the difference between such Issue Price and the stated principal amount of such Note that has accrued by such date at (x) the Bond Yield to Maturity set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith or (y) if so specified, the Bond Yield to Call set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith (computed in each case in accordance with generally accepted United States bond yield computation principles); provided, however, that in no event shall the Amortized Face Amount of a Note exceed its stated principal amount. The Bond Yield to Call listed on the face of this Note or in the pricing supplement attached hereto or delivered herewith shall be computed on the basis of the first occurring Optional Redemption Date with respect to such Note and the amount payable on such Optional Redemption Date. In the event that such Note is not redeemed on such first occurring Optional Redemption Date, the Bond Yield to Call with respect to such Note shall be recomputed on such Optional Redemption Date on the basis of the next occurring Optional Redemption Date and the amount payable on such Optional Redemption Date, and shall continue to be so recomputed on each succeeding Optional Redemption Date until the Note is so redeemed. The Company may at any time purchase Registered Notes at any price in the open market or otherwise. Registered Notes so purchased by the Company may, at the discretion of the Company, be held or resold or surrendered to the Trustee for such Notes for cancellation. Other Terms As provided in the Indenture and subject to certain limitations therein set forth, this Note is exchangeable for a like aggregate principal amount of Registered Notes of different authorized denominations, as requested by the Person surrendering the same. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable on the Security Register of the Company, upon surrender of this Note for registration of transfer at the office or agency of the Company in the Borough of Manhattan, the City and State of New York, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company, the Security Registrar and the Trustee duly executed by the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Registered Notes of this series, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the Holder hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. 20 If an Event of Default with respect to the Debt Securities of this series shall have occurred and be continuing, the principal of all the Debt Securities of this series may be declared due and payable in this manner and with the effect provided in the Indenture. In case this Note shall at any time become mutilated, destroyed, stolen or lost and this Note or evidence of the loss, theft, or destruction hereof (together with such indemnity and such other documents or proof as may be required by the Company or the Trustee) shall be delivered to the principal corporate trust office of the Trustee or the agent of the Company or Trustee a new Registered Note of like tenor and principal amount will be issued by the Company in exchange for, or in lieu of, this Note. All expenses and reasonable charges associated with procuring such indemnity and with the preparation, authentication and delivery of a new Registered Note shall be borne by the Holder of this Note. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Debt Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of Debt Securities at the time outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Debt Securities of any series at the time outstanding, on behalf of the Holders of all the Debt Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Debt Security shall be conclusive and binding upon such Holder and upon all future Holders of this Debt Security and of any Debt Security issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon the Debt Security. Holders of Debt Securities may not enforce their rights pursuant to the Indenture or the Note except as provided in the Indenture. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed. This Note shall be deemed to be a contract made and to be performed solely in the State of New York and for all purposes be governed by, and construed in accordance with, the laws of said State without regard to the conflicts of law rules of said State. All terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in the Indenture. 21 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM -as tenants in common UNIF GIFT MIN ACT_____Custodian______ TEN ENT -as tenants by the entireties (Cust) (Minor) JT ENT -as joint tenants with Under Uniform Gifts to Minors Act right of survivorship and _________________________________ not as tenants in common (State) Additional abbreviations may also be used though not in the above list OPTION TO ELECT REPAYMENT The undersigned hereby irrevocably requests and instructs the Company to repay $__________ principal amount of the within Note, pursuant to its terms, on the "Optional Repayment Date" first occurring after the date of receipt of the within Note as specified below, together with interest thereon accrued to the date or repayment, to the undersigned at: ________________________________________________________________________________ ________________________________________________________________________________ (Please Print or Type Name and Address of the Undersigned) and to issue to the undersigned, pursuant to the terms of the Indenture, a new Note or Notes representing the remaining principal amount of this Note. For this Option to Elect Repayment to be effective, this Note with the Option to Elect Repayment duly completed must be received by the Company within the relevant time period set forth above at its office or agency in the Borough of Manhattan, the City and State of New York, located initially at the office of the Trustee at 153 W. 51st Street, New York, New York 10019. Dated: _______________________________________ Note: The signature to this Option to Elect Repayment must correspond with the name as written upon the face of the within Note in every particular without alteration or enlargement or any change whatsoever. FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto Please insert Social Security or Other Identifying Number of Assignee ________________________________________________________________________________ ________________________________________________________________________________ Please Print or Type Name and Address Including Zip Code of Assignee ________________________________________________________________________________ the within Note and all rights thereunder, hereby irrevocably constituting and appointing ________________________________________________________________________attorney to transfer such Note on the books of Citigroup Global Markets Holdings Inc. with full power of substitution in the premises. Dated: _________________________ _______________________________________ Signature _______________________________________ NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the Note in every particular, without alteration or enlargement or any change whatsoever. REGISTERED PRINCIPAL AMOUNT No. FX ___ OR FACE AMOUNT $_______________ CUSIP: _________ CITIGROUP GLOBAL MARKETS HOLDINGS INC. MEDIUM-TERM SUBORDINATED NOTE, SERIES E DUE NINE MONTHS OR MORE FROM DATE OF ISSUE (FIXED RATE) IF APPLICABLE, THE "TOTAL AMOUNT OF OID" AND "YIELD TO MATURITY" SET FORTH BELOW WILL BE COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE UNITED STATES FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES. Issue Price: Original Issue Date: Interest Rate: Stated Maturity: Specified Currency (If other than U.S. dollars): Authorized Denominations: (If other than as set forth in the Prospectus Supplement) Dual Currency Note: [ ] Yes (see attached) [ ] No Optional Payment Currency: Designated Exchange Rate: Interest Payment Dates: Accrue to Pay: [ ] Yes [ ] No Indexed Principal Note: [ ] Yes (see attached) [ ] No Interest Rate Reset: [ ] The Interest Rate may not be changed prior to Stated Maturity. [ ] The Interest Rate may be changed prior to Stated Maturity (see attached). Optional Reset Dates (if applicable): Amortizing Note: [ ] Yes [ ] No Amortization Schedule: Optional Redemption: [ ] Yes [ ] No Optional Redemption Dates: Redemption Prices: Bond Yield to Maturity: Bond Yield to Call: Optional Repayment: [ ] Yes [ ] No Optional Repayment Dates: Optional Repayment Prices: Optional Extension of Stated Maturity: [ ] Yes [ ] No Final Maturity: Discount Note: [ ] Yes [ ] No Total Amount of OID: Yield to Maturity: Renewable Note: [ ] Yes (see attached) [ ] No Initial Maturity Date: Special Election Interval (if applicable): Amount (if less than entire principal amount) as to which election may be exercised: 2 CITIGROUP GLOBAL MARKETS HOLDINGS INC., a corporation duly organized and existing under the laws of the State of New York (herein referred to as the "Company"), for value received hereby promises to pay CEDE & Co. or registered assigns (a) the Principal Amount or, in the case of an Indexed Principal Note, the Face Amount adjusted by reference to prices, changes in prices, or differences between prices, of securities, currencies, intangibles, goods, articles or commodities or by such other objective price, economic or other measures (an "Index") as described on the face hereof or in the pricing supplement attached hereto or delivered herewith, in the Specified Currency on the Stated Maturity shown above or earlier if and to the extent so provided herein and (b) accrued interest on the Principal Amount then outstanding (or in the case of an Indexed Principal Note, the Face Amount, then outstanding) at the Interest Rate shown above from the Original Issue Date shown above or from the most recent date to which interest has been paid or duly provided for, semiannually in arrears (unless otherwise set forth herein or in the pricing supplement attached hereto or delivered herewith) on the Interest Payment Dates specified on the face of this Note or in the pricing supplement attached hereto or delivered herewith and at Stated Maturity, until, in either case, the Principal Amount then outstanding or the Face Amount is paid or duly provided for in accordance with the terms hereof. Unless otherwise specified herein or in the pricing supplement attached hereto or delivered herewith, interest on this Note, if any, will be computed on the basis of a 360-day year of twelve 30-day months or, in the case of an incomplete month, the number of days elapsed. The interest so payable, and punctually paid or duly provided for, on each Interest Payment Date will, as provided in the Indenture referred to on the reverse hereof, be paid to the person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which, unless otherwise specified on the face of this Note or in the pricing supplement attached hereto or delivered herewith (and other than interest payable at Stated Maturity), shall be the date (whether or not a Business Day) fifteen calendar days immediately preceding such Interest Payment Date and, in the case of interest payable at Stated Maturity, shall be the Stated Maturity of this Note. Notwithstanding the foregoing, if this Note is issued between a Regular Record Date and the related Interest Payment Date, the interest so payable for the period from the Original Issue Date to such Interest Payment Date shall be paid on the next succeeding Interest Payment Date to the Registered Holder hereof on the related Regular Record Date. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Registered Holder hereof on such Regular Record Date, and may be paid to the person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Notes not less than ten days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Registered Notes may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. For purposes of this Note, "Business Day" means: (i) with respect to any Registered Note, any day that is not a Saturday or Sunday and that, in The City of New York, is not a day on which banking institutions generally are authorized or obligated by law or executive order to close; (ii) with respect to Registered Notes having a specified currency other than U.S. dollars only, other than Registered Notes denominated in Euros, any day that, in the principal 3 financial center (as defined below) of the country of the Specified Currency, is not a day on which banking institutions generally are authorized or obligated by law to close; (iii) with respect to Notes denominated in Euros, a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer ("TARGET") System is open (a "TARGET Business Day"); and (iv) with respect to any determination by the exchange rate agent (as defined below) of an exchange rate pursuant to notes having a specified currency other than U.S. dollars, any such day on which banking institutions and foreign exchange markets settle payments in New York City and London (an "Exchange Rate Business Day"). As used above, a "principal financial center" means the capital city of the country issuing the Specified Currency. However, with respect to U.S. dollars, Australian dollars, Canadian dollars, and Swiss francs, the principal financial center shall be The City of New York, Sydney, Toronto, and Zurich, respectively. The indebtedness evidenced by this Note is, to the extent set forth in the Indenture, expressly subordinated and subject in right of payment to the prior payment in full of Senior Indebtedness as defined in the Indenture, and this Note is issued subject to such provisions, and each Holder of this Note, by accepting the same, agrees to and shall be bound by such provisions and authorizes and directs the Trustee in his behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination as provided in the Indenture and appoints the Trustee as his attorney-in-fact for any and all such purposes. If this Note is an Amortizing Note as shown on the face hereof or in the pricing supplement attached hereto or delivered herewith, a portion or all the principal amount of the Note is payable prior to Stated Maturity in accordance with a schedule, by application of a formula, or by reference to an Index (as described above). The principal hereof and any premium and interest hereon are payable by the Company in the Specified Currency shown above. If the Specified Currency shown above is other than U.S. dollars, the Company will arrange to convert all payments in respect hereof into U.S. dollars in the manner described on the reverse hereof. The Holder hereof may, if so indicated above, elect to receive all payments in respect hereof in the Specified Currency by delivery of a written notice to the Trustee not later than fifteen calendar days prior to the applicable payment date. Such election will remain in effect until revoked by written notice to the Trustee received not later than fifteen calendar days prior to the applicable payment date. If the Company determines that the Specified Currency is not available for making payments in respect hereof due to the imposition of exchange controls or other circumstances beyond the Company's control or is no longer used by the government of the country issuing such currency or for the settlement of transactions by public institutions or within the international banking community, then the Holder hereof may not so elect to receive payments in the Specified Currency, and any such outstanding election shall be automatically suspended, and payments shall be in U.S. dollars, until the Company determines that the Specified Currency is again available for making such payments. Payments of interest in U.S. dollars (other than interest payable at Stated Maturity) will be made by check mailed to the address of the Person entitled thereto as such address shall appear on the Security Register on the applicable Record Date; provided that, if the 4 Holder hereof is the Holder of U.S. $10,000,000 (or the equivalent thereof in a currency other than U.S. dollars determined as provided on the reverse hereof) or more in aggregate principal amount of Registered Notes of like tenor and term, such U.S. dollar interest payments will be made by wire transfer of immediately available funds, but only if appropriate wire transfer instructions have been received in writing by the Trustee not less than fifteen calendar days prior to the applicable Interest Payment Date. Simultaneously with any election by the Holder hereof to receive payments in respect hereof in the Specified Currency (if other than U.S. dollars), such Holder shall provide appropriate wire transfer instructions to the Trustee and all such payments will be made by wire transfer of immediately available funds to an account maintained by the payee with a bank located outside the United States. The principal hereof and any premium and interest hereon payable at Stated Maturity will be paid in immediately available funds upon surrender of this Note at the corporate trust office or agency of the Trustee located in the City and State of New York. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF AND IN ANY PRICING SUPPLEMENT ATTACHED HERETO OR DELIVERED HEREWITH, AND SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE. This Note shall not become valid or obligatory for any purpose unless and until this Note has been authenticated by Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), or its successor, as Trustee. 5 IN WITNESS WHEREOF, the Company has caused this Note to be executed under its corporate seal. Dated: CITIGROUP GLOBAL MARKETS HOLDINGS INC. By _______________________________ Authorized Officer [Seal] Attest ___________________________ Assistant Secretary CERTIFICATE OF AUTHENTICATION This is one of the Notes issued under the within-mentioned Indenture. Dated: DEUTSCHE BANK TRUST COMPANY AMERICAS (formerly BANKERS TRUST COMPANY), as Trustee By _______________________________ Authorized Signatory 6 (REVERSE OF SECURITY) CITIGROUP GLOBAL MARKETS HOLDINGS INC. MEDIUM-TERM SUBORDINATED NOTE, SERIES E DUE NINE MONTHS OR MORE FROM DATE OF ISSUE (FIXED RATE) General This Note is one of a series of duly authorized debt securities of the Company (the "Debt Securities") issued or to be issued in one or more series under an indenture, dated as of December 1, 1988, as amended (the "Indenture"), between the Company and Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), as successor trustee (the "Trustee," which term includes any successor Trustee under the Indenture), to which indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Debt Securities and of the terms upon which the Debt Securities are, and are to be, authenticated and delivered. The U.S. dollar equivalent of the public offering price or purchase price of Notes denominated in currencies other than U.S. dollars will be determined by the Company or its agent, as exchange rate agent for the Notes (the "Exchange Rate Agent") on the basis of the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York (the "Market Exchange Rate") for such currencies on the applicable issue dates. The Notes are in registered form without coupons. Unless otherwise specified in the applicable pricing supplement, the authorized denominations of Registered Notes denominated in U.S. dollars will be U.S.$1,000 and any larger amount that is an integral multiple of U.S.$1,000. The authorized denominations of Registered Notes denominated in a currency other than U.S. dollars will be the approximate equivalents thereof in the Specified Currency. Each Registered Note will be issued initially as a Book-Entry Note, and will not be exchangeable for Certificated Notes, except as otherwise provided in the Indenture or specified in the applicable pricing supplement. Fixed Rate Notes This Note will bear interest from its Original Issue Date, or from the last Interest Payment Date to which interest has been paid or duly provided for, at the Interest Rate stated on the face hereof or in the pricing supplement attached hereto or delivered herewith until the principal amount hereof is paid or made available for payment, except as otherwise described below under "Subsequent Interest Periods" and "Extension of Stated Maturity", and except that if so specified in the attached pricing supplement, the rate of interest payable may be subject to adjustment as specified therein. Unless otherwise set forth herein or in the pricing supplement attached hereto or delivered herewith, interest on this Note will be payable semiannually in arrears on the Interest Payment Dates set forth above and at Stated Maturity. If an Interest Payment Date with respect to any Note would otherwise be a day that is not a Business Day, such Interest Payment Date 1 shall not be postponed; provided, however, that any payment required to be made in respect of such Note on a date (including the day of Stated Maturity) that is not a Business Day for such Note need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on such date, and no additional interest shall accrue as a result of such delayed payment. However, if with respect to any Note for which "Accrue to Pay" is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, any Interest Payment Date with respect to such Fixed Rate Note would otherwise be a day that is not a Business Day, such Interest Payment Date shall be postponed to the next succeeding Business Day. Each payment of interest in respect of an Interest Payment Date shall include interest accrued through the day before such Interest Payment Date. Unless otherwise specified herein, interest on this Note will be computed on the basis of a 360-day year of twelve 30-day months ("30 over 360") or, in the case of an incomplete month, the number of days elapsed. Subsequent Interest Periods If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Interest Rate on this Note may be reset by the Company on the date or dates specified on the face hereof or in the pricing supplement attached hereto or delivered herewith (each an "Optional Reset Date"). The Company may reset the Interest Rate by notifying the Trustee for this Note at least 45 but not more than 60 days prior to each Optional Reset Date. Not later than 40 days prior to each Optional Reset Date, the Trustee will mail to the Holder of this Note a notice (the "Reset Notice"), first class, postage prepaid, indicating whether the Company has elected to reset the Interest Rate, and if so, (i) such new Interest Rate and (ii) the provisions, if any, for redemption during the period from such Optional Reset Date to the next Optional Reset Date, or, if there is no such next Optional Reset Date, to the Stated Maturity of this Note (each such period, a "Subsequent Interest Period"), including the date or dates on which or the period or periods during which and the price or prices at which such redemption may occur during the Subsequent Interest Period. Upon the transmittal by the Trustee of a Reset Notice to the Holder of a Note, such new Interest Rate shall take effect automatically. Except as modified by the Reset Notice and as described below, such Note will have the same terms as prior to the transmittal of such Reset Notice. Notwithstanding the foregoing, not later than 20 days prior to the Optional Reset Date, the Company may, at its option, revoke the Interest Rate provided for in the Reset Notice and establish a higher Interest Rate for the Subsequent Interest Period by causing the Trustee to mail notice of such higher Interest Rate, first class, postage prepaid, to the Holder of this Note. Such notice shall be irrevocable. All Registered Notes with respect to which the Interest Rate is reset on an Optional Reset Date will bear such higher Interest Rate. The Holder of this Note will have the option to elect repayment of the Note by the Company on each Optional Reset Date at a price equal to the principal amount hereof, plus interest accrued to such Optional Reset Date. In order to obtain repayment on an Optional Reset Date, the Holder must follow the procedures set forth below for optional repayment, except that the period for delivery or notification to the Trustee shall be at least 25 but not more than 35 days prior to such Optional Reset Date, and except that if the Holder has tendered this Note for repayment pursuant to a Reset Notice, the Holder may, by written notice to the Trustee, revoke 2 such tender for repayment until the close of business on the tenth day before the Optional Reset Date. Indexed Notes If this Note is an Indexed Principal Note, then the principal amount payable at Stated Maturity or earlier redemption or retirement is determined by reference to the amount designated on the face hereof or in the pricing supplement attached hereto or delivered herewith as the Face Amount of this Note and by reference to the Index as described on the face hereof or in the pricing supplement attached hereto or delivered herewith. If this Note is an Indexed Principal Note, the principal amount payable at Stated Maturity or any earlier redemption or repayment of this Note may be different from the Face Amount. If a third party is appointed to calculate or announce the Index for a particular Indexed Note and the third party either suspends the calculation or announcement of such Index or changes the basis upon which such Index is calculated in a manner that is inconsistent with the applicable pricing supplement, then the Company will select another third party to calculate or announce the Index. The agent or another affiliate of the Company may be either the original or successor third party selected by the Company. If for any reason such Index cannot be calculated on the same basis and subject to the same conditions and controls as applied to the original third party, then the indexed principal amount of this Note shall be calculated in the manner set forth in the applicable pricing supplement. Any determination of such third party shall in the absence of manifest error be binding on all parties. Specified Currency If the Specified Currency is other than U.S. dollars, the amount of any U.S. dollar payment to be made in respect hereof will be determined by the Company or its agent based on the highest firm bid quotation expressed in U.S. dollars received by the Company or its agent at approximately 11:00 a.m., New York City time, on the second Business Day preceding the applicable payment date (or, if no such rate is quoted on such date, the last date on which such rate was quoted) from three (or, if three are not available, then two) recognized foreign exchange dealers in The City of New York selected by the Exchange Rate Agent (one or more of which may be an agent involved in the distribution of the Notes (an "Agent") and another of which may be the Exchange Rate Agent) for the purchase by the quoting dealer, for settlement on such payment date, of the aggregate amount of the Specified Currency payable on such payment date in respect of all Registered Notes denominated in such Specified Currency. All currency exchange costs will be borne by the Holders of such Registered Notes by deductions from such payments. If no such bid quotations are available, then such payments will be made in the Specified Currency, unless the Specified Currency is unavailable due to the imposition of exchange controls or to other circumstances beyond the Company's control, in which case payment will be made as described in the next paragraph. 3 Payments in Currencies other than the Specified Currency Except as set forth below, if any payment in respect hereof is required to be made in a specified currency other than U.S. dollars and such currency is unavailable due to the imposition of exchange controls or other circumstances beyond the Company's control or is no longer used by the government of the country issuing such currency or for the settlement of transactions by public institutions of or within the international banking community, then such payment shall be made in U.S. dollars until such currency is again available or so used. The amount so payable in such foreign currency shall be converted into U.S. dollars on the basis of the most recently available Market Exchange Rate for such currency or as otherwise indicated on the face hereof or in the pricing supplement attached hereto or delivered herewith. Any payment made under such circumstances in U.S. dollars will not constitute a Default under the Indenture. In the event of an official redenomination of the Specified Currency of this Note (other than as a result of European Monetary Union, but including, without limitation, an official redenomination of any such Specified Currency that is a composite currency), the obligations of the Company with respect to payments on this Note shall, in all cases, be deemed immediately following such redenomination to provide for the payment of that amount of redenominated currency representing the amount of such obligations immediately before such redenomination. This Note does not provide for any adjustment to any amount payable under this Note as a result of (i) any change in the value of the Specified Currency hereof relative to any other currency due solely to fluctuations in exchange rates or (ii) any redenomination of any component currency of any composite currency (unless such composite currency is itself officially redenominated). Dual Currency Notes If this Note is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as a Dual Currency Note, the Company may have a one time option of making all payments of principal, premium, if any, and interest on all Dual Currency Notes issued on the same day and having the same terms (a "Tranche"), which payments would otherwise be made in the Specified Currency of such Notes, in an optional currency (the "Optional Payment Currency"). Such option will be exercisable in whole but not in part on an "Option Election Date," which will be any one of the dates specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. If the Company makes such an election, the amount payable in the Optional Payment Currency shall be determined using the Designated Exchange Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. If such election is made, notice of such election shall be mailed in accordance with the terms of the applicable Tranche of Dual Currency Notes within two Business Days of the Option Election Date and shall state (i) the first date, whether an Interest Payment Date and/or Stated Maturity, in which scheduled payments in the Optional Payment Currency will be made and (ii) the Designated Exchange Rate. Any such notice by the Company, once given, may not be withdrawn. The equivalent value in the Specified Currency of payments made after such an election may be less, at the then current exchange rate, than if the Company had made such payment in the Specified Currency. 4 Renewable Notes If this Note is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as a Renewable Note, this Note will mature on an Interest Payment Date occurring in or prior to the twelfth month following the Original Issue Date of this Note (the "Initial Maturity Date") unless the term of all or any portion of this Note is renewed in accordance with the following procedures: On the Interest Payment Date occurring in the sixth month (unless a different interval (the "Special Election Interval") is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith) prior to the Initial Maturity Date of this Note (the "Initial Renewal Date") and on the Interest Payment Date occurring in each sixth month (or in the last month of each Special Election Interval) after such Initial Renewal Date (each, together with the Initial Renewal Date, a "Renewal Date"), the term of this Note may be extended to the Interest Payment Date occurring in the twelfth month (or, if a Special Election Interval is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the last month in a period equal to twice the Special Election Interval) after such Renewal Date, if the Holder of this Note elects to extend the term of this Note or any portion thereof as described below. If the Holder does not elect to extend the term of any portion of the principal amount of this Note during the specified period prior to any Renewal Date, such portion will become due and payable on the Interest Payment Date occurring in the sixth month (or the last month in the Special Election Interval) after such Renewal Date (the "New Maturity Date"). The Holder may elect to renew the term of this Note, or if so specified, any portion thereof, by delivering a notice to such effect to the Trustee (or any duly appointed paying agent) at the corporate trust office of the Trustee or agency of the Trustee in the City of New York not less than 15 nor more than 30 days prior to such Renewal Date, unless another period is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Such election will be irrevocable and will be binding upon each subsequent Holder of this Note. An election to renew the term of this Note may be exercised with respect to less than the entire principal amount of this Note only if so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith and then only in such principal amount, or any integral multiple in excess thereof, as is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Notwithstanding the foregoing, the term of this Note may not be extended beyond the Stated Maturity specified for this Note on the face hereof or in the pricing supplement attached hereto or delivered herewith. If the Holder does not elect to renew the term, this Note must be presented to the Trustee (or any duly appointed paying agent) and, as soon as practicable following receipt of such Note the Trustee (or any duly appointed paying agent) shall issue in exchange therefor in the name of such Holder (i) a Note, in a principal amount equal to the principal amount of such exchanged Note for which no election to renew the term thereof was exercised, with terms identical to those specified on such exchanged Note (except that such Note shall have a fixed, nonrenewable Stated Maturity on the New Maturity Date) and (ii) if an election to renew is made with respect to less than the full principal amount of such Holder's Note, the Trustee, or any duly appointed paying agent, shall issue in exchange for such Note in the name of such Holder a 5 replacement Renewable Note, in a principal amount equal to the principal amount of such exchanged Note for which the election to renew was made, with terms otherwise identical to the exchanged Note. Extension of Stated Maturity If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Stated Maturity of this Note may be extended at the option of the Company for one or more periods of whole years specified on the face hereof or in the pricing supplement attached hereto or delivered herewith (each an "Extension Period") from one to five years up to but not beyond the date (the "Final Maturity") set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith. The Company may exercise such option by notifying the Trustee for this Note at least 45 but not more than 60 days prior to the original Stated Maturity of this Note. If the Company exercises such option, the Trustee will mail to the Holder of this Note not later than 40 days prior to the original Stated Maturity a notice (the "Extension Notice"), first class, postage prepaid, indicating (i) the election of the Company to extend the Stated Maturity, (ii) the new Stated Maturity, (iii) the Interest Rate applicable to the Extension Period, and (iv) the provisions, if any, for redemption during such Extension Period including the date or dates on which, or the period or periods during which, and the price or prices at which, such redemption may occur during the Extension Period. Upon the Trustee's mailing of the Extension Notice, the Stated Maturity of this Note shall be extended automatically and, except as modified by the Extension Notice and as described in the next paragraph, this Note will have the same terms as prior to the mailing of such Notice. Notwithstanding the foregoing, not later than 20 days prior to the original Stated Maturity of this Note, the Company may, at its option, revoke the Interest Rate provided for in the Extension Notice and establish a higher Interest Rate for the Extension Period by causing the Trustee to mail notice of such higher Interest Rate, first class, postage prepaid, to the Holder of this Note. Such notice shall be irrevocable. All Registered Notes with respect to which the Stated Maturity is extended will bear such higher Interest Rate for the Extension Period, whether or not tendered for repayment. If the Company extends the Stated Maturity of this Note, the Holder will have the option to elect repayment of this Note by the Company on the original Stated Maturity at a price equal to the principal amount hereof, plus interest accrued to such date. In order to obtain repayment on such original Stated Maturity once the Company has extended the Stated Maturity hereof, the Holder must follow the procedures set forth below for optional repayment, except that the period for delivery or notification to the Trustee shall be at least 25 but not more than 35 days before the original Stated Maturity, and except that if the Holder has tendered this Note for repayment pursuant to an Extension Notice, the Holder may, by written notice to the Trustee, revoke such tender for repayment until the close of business on the tenth calendar day before the original Stated Maturity. Optional Redemption, Repayment and Repurchase If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Company may, at its option, redeem this Note in whole or in part, on the 6 date or dates (each an "Optional Redemption Date") specified herein, at the price (the "Redemption Price") (together with accrued interest to such Optional Redemption Date) specified herein. If required under the Federal Reserve Capital Adequacy Rules, the Company will obtain the prior approval of the Federal Reserve before exercising its redemption rights. Unless otherwise stated on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Trustee shall mail to the Holder a notice of such redemption first class, postage prepaid, at least 30 days prior to the date of redemption. Unless otherwise stated herein, the Company may exercise such option with respect to a redemption of this Note in part only by notifying the Trustee for this Note at least 45 days prior to any Optional Redemption Date. In the event of redemption of this Note in part only, a new Note or Notes for the unredeemed portion hereof will be issued to the Holder hereof upon the cancellation hereof. If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, this Note will be repayable prior to Stated Maturity at the option of the Holder on the Optional Repayment Dates shown on the face hereof or in the pricing supplement attached hereto or delivered herewith at the Optional Repayment Prices shown on the face hereof or in the pricing supplement attached hereto or delivered herewith, together with accrued interest to the date of repayment. In order for this Note to be repaid, the Trustee must receive at least 30 but not more than 45 days prior to an Optional Repayment Date (i) this Note with the form below entitled "Option to Elect Repayment" duly completed; or (ii) a telegram, telex, facsimile transmission or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc. or a commercial bank or trust company in the United States of America setting forth the name of the Holder of this Note, the principal amount of the Note to be repaid, the certificate number or a description of the tenor and terms of this Note, a statement that the option to elect repayment is being exercised thereby and a guarantee that this Note with the form below entitled "Option to Elect Repayment" duly completed will be received by the Trustee not later than five Business Days after the date of such telegram, telex, facsimile transmission or letter. If the procedure described in clause (ii) of the preceding sentence is followed, this Note with form duly completed must be received by the Trustee by such fifth Business Day. Any tender of this Note for repayment (except pursuant to a Reset Notice or an Extension Notice) shall be irrevocable. The repayment option may be exercised by the Holder of this Note for less than the entire principal amount of the Note; provided that the principal amount of this Note remaining outstanding after repayment is an authorized denomination. Upon such partial repayment, this Note shall be canceled and a new Note or Notes for the remaining principal amount hereof shall be issued in the name of the Holder of this Note. Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, this Note will not be subject to any sinking fund. Notwithstanding anything herein to the contrary, if this Note is a Discount Note, the amount payable in the event of redemption or repayment prior to the Stated Maturity hereof (other than pursuant to an optional redemption by the Company at a stated Redemption Price), in lieu of the principal amount due at the Stated Maturity hereof, shall be the Amortized Face Amount of this Note as of the redemption date or the date of repayment, as the case may be. The Amortized Face Amount of this Note on any date shall be the amount equal to (i) the Issue Price set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith plus (ii) that portion of the difference between such Issue Price and the stated principal amount 7 of such Note that has accrued by such date at (x) the Bond Yield to Maturity set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith or (y) if so specified, the Bond Yield to Call set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith (computed in each case in accordance with generally accepted United States bond yield computation principles); provided, however, that in no event shall the Amortized Face Amount of a Note exceed its stated principal amount. The Bond Yield to Call listed on the face of this Note or in the pricing supplement attached hereto or delivered herewith shall be computed on the basis of the first occurring Optional Redemption Date with respect to such Note and the amount payable on such Optional Redemption Date. In the event that such Note is not redeemed on such first occurring Optional Redemption Date, the Bond Yield to Call with respect to such Note shall be recomputed on such Optional Redemption Date on the basis of the next occurring Optional Redemption Date and the amount payable on such Optional Redemption Date, and shall continue to be so recomputed on each succeeding Optional Redemption Date until the Note is so redeemed. The Company may at any time purchase Registered Notes at any price in the open market or otherwise. Registered Notes so purchased by the Company may, at the discretion of the Company, be held or resold or surrendered to the Trustee for such Notes for cancellation. Other Terms As provided in the Indenture and subject to certain limitations therein set forth, this Note is exchangeable for a like aggregate principal amount of Registered Notes of different authorized denominations, as requested by the Person surrendering the same. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable on the Security Register of the Company, upon surrender of this Note for registration of transfer at the office or agency of the Company in the Borough of Manhattan, the City and State of New York, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company, the Security Registrar and the Trustee duly executed by the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Registered Notes of this series, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the Holder hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. If an Event of Default with respect to the Debt Securities of this series shall have occurred and be continuing, the principal of all the Debt Securities of this series may be declared due and payable in this manner and with the effect provided in the Indenture. 8 In case this Note shall at any time become mutilated, destroyed, stolen or lost and this Note or evidence of the loss, theft, or destruction hereof (together with such indemnity and such other documents or proof as may be required by the Company or the Trustee) shall be delivered to the principal corporate trust office of the Trustee or the agent of the Company or Trustee, a new Registered Note of like tenor and principal amount will be issued by the Company in exchange for, or in lieu of, this Note. All expenses and reasonable charges associated with procuring such indemnity and with the preparation, authentication and delivery of a new Registered Note shall be borne by the Holder of this Note. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Debt Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of Debt Securities at the time outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Debt Securities of any series at the time outstanding, on behalf of the Holders of all the Debt Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Debt Security shall be conclusive and binding upon such Holder and upon all future Holders of this Debt Security and of any Debt Security issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon the Debt Security. Holders of Debt Securities may not enforce their rights pursuant to the Indenture or the Note except as provided in the Indenture. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed. This Note shall be deemed to be a contract made and to be performed solely in the State of New York and for all purposes be governed by, and construed in accordance with, the laws of said State without regard to the conflicts of law rules of said State. All terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in the Indenture. 9 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM -as tenants in common UNIF GIFT MIN ACT _____Custodian______ TEN ENT -as tenants by the entireties (Cust) (Minor) JT ENT -as joint tenants with right of Under Uniform Gifts survivorship and not as tenants in to Minors Act common ____________________ (State) Additional abbreviations may also be used though not in the above list _________________________________ OPTION TO ELECT REPAYMENT The undersigned hereby irrevocably requests and instructs the Company to repay $__________ principal amount of the within Note, pursuant to its terms, on the "Optional Repayment Date" first occurring after the date of receipt of the within Note as specified below, together with interest thereon accrued to the date or repayment, to the undersigned at: ________________________________________________________________________________ ________________________________________________________________________________ (Please Print or Type Name and Address of the Undersigned) and to issue to the undersigned, pursuant to the terms of the Indenture, a new Note or Notes representing the remaining principal amount of this Note. For this Option to Elect Repayment to be effective, this Note with the Option to Elect Repayment duly completed must be received by the Company within the relevant time period set forth above at its office or agency in the Borough of Manhattan, the City and State of New York, located initially at the office of the Trustee, 4 Albany Street, Attention: Corporate Trust Department, New York, New York 10015. Dated: __________________________________________________________ Note: The signature to this Option to Elect Repayment must correspond with the name as written upon the face of the within Note in every particular without alteration or enlargement or any change whatsoever. FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto Please insert Social Security or Other Identifying Number of Assignee ________________________________________________________________________________ ________________________________________________________________________________ Please Print or Type Name and Address Including Zip Code of Assignee ________________________________________________________________________________ the within Note and all rights thereunder, hereby irrevocably constituting and appointing ________________________________________________________________________attorney to transfer such Note on the books of Citigroup Global Markets Holdings Inc. with full power of substitution in the premises. Dated: ____________________________ __________________________________ Signature __________________________________ face of the Note in every particular, without alteration or enlargement or any change whatsoever. REGISTERED PRINCIPAL AMOUNT NO. FL___ OR FACE AMOUNT $_________________ CUSIP: ____________ CITIGROUP GLOBAL MARKETS HOLDINGS INC. MEDIUM-TERM SUBORDINATED NOTE, SERIES E DUE NINE MONTHS OR MORE FROM DATE OF ISSUE (FLOATING OR INDEXED RATE) IF APPLICABLE, THE "TOTAL AMOUNT OF OID" AND "YIELD TO MATURITY" SET FORTH BELOW WILL BE COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE UNITED STATES FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES. Issue Price: Original Issue Date: Initial Interest Rate: Stated Maturity: Specified Currency (If other than U.S. dollars): Authorized Denominations: (If other than as set forth in the Prospectus Supplement) Dual Currency Note: [ ] Yes (see attached) [ ] No Optional Payment Currency: Designated Exchange Rate: Base Rate: [ ] CD Rate [ ] Commercial Paper Rate [ ] Federal Funds Rate [ ] LIBOR Telerate [ ] LIBOR Reuters [ ] Treasury Rate [ ] Treasury Rate [ ] Prime Rate Constant Maturity [ ] Eleventh District [ ] EURIBOR Cost of Funds Rate [ ] Other (see attached) Interest Reset Period Index Maturity: or Interest Reset Dates: Interest Payment Dates: Accrue to Pay: [ ] Yes [ ] No Indexed Principal Note: [ ] Yes (see attached) [ ] No Floating Rate: [ ] Indexed Interest [ ] (see Rate: attached) Spread Multiplier: Spread (+/-): Spread Reset: [ ] The Spread or Spread Multiplier may not be changed prior to Stated Maturity. [ ] The Spread or Spread Multiplier may be changed prior to Stated Maturity (see attached). Optional Reset Dates (if applicable): Maximum Interest Rate: Minimum Interest Rate: Inverse Floating Rate Note: [ ] Yes (see attached) [ ] No Initial Fixed Interest Rate: Reset Fixed Reference Rate Floating Rate / Fixed Rate Note: [ ] Yes (see attached) [ ] No Amortizing Note: [ ] Yes [ ] No Amortization Schedule: Optional Redemption: [ ] Yes [ ] No Optional Redemption Dates: Redemption Prices: Bond Yield to Maturity: Bond Yield to Call: Optional Repayment: [ ] Yes [ ] No Optional Repayment Dates: Optional Repayment Prices: 2 Optional Extension of [ ] Yes [ ] No Stated Maturity: Final Maturity: Discount Note: [ ] Yes [ ] No Total Amount of OID: Yield to Maturity: Renewable Note: [ ] Yes (see attached) [ ] No Initial Maturity Date: Special Election Interval (if applicable): Amount (if less than entire principal amount) as to which election may be exercised: 3 CITIGROUP GLOBAL MARKETS HOLDINGS INC., a corporation duly organized and existing under the laws of the State of New York (herein referred to as the "Company"), for value received hereby promises to pay CEDE & Co. or registered assigns (a) the Principal Amount or, in the case of an Indexed Principal Note, the Face Amount adjusted by reference to prices, changes in prices, or differences between prices, of securities, currencies, intangibles, goods, articles or commodities or by such other objective price, economic or other measures (an "Index") as described on the face hereof or in the pricing supplement attached hereto or delivered herewith, in the Specified Currency on the Stated Maturity shown above or earlier if and to the extent so provided herein, and (b) accrued interest on the Principal Amount then outstanding (or, in the case of an Indexed Principal Note, the Face Amount then outstanding): (i) if this is a Floating Rate Note, at the Initial Interest Rate shown above from the Original Issue Date shown above until the first Interest Reset Date shown above following the Original Issue Date and thereafter at the Base Rate shown above, adjusted by the Spread or Spread Multiplier, if any, shown above, determined in accordance with the provisions hereof, (ii) if this is an Indexed Rate Note, at a rate determined by reference to an Index as described herein, (iii) if this is an Inverse Floating Rate Note, at the Initial Interest Rate shown above from the Original Issue Date shown above until the first Interest Reset Date shown above following the Original Issue Date and thereafter at the Inverse Floating Rate, as determined in accordance with the provisions hereof, or (iv) if this is a Floating Rate / Fixed Rate Note, at a rate determined as described herein, until, in each case, the Principal Amount or the Face Amount then outstanding is paid or duly provided for in accordance with the terms hereof. The interest so payable, and punctually paid or duly provided for, on each Interest Payment Date will, as provided in the Indenture referred to on the reverse hereof, be paid to the person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which, unless otherwise specified on the face of this Note or in the pricing supplement attached hereto or delivered herewith (and other than interest payable at Stated Maturity), shall be the date (whether or not a Business Day) fifteen calendar days immediately preceding such Interest Payment Date and, in the case of interest payable at Stated Maturity, shall be the Stated Maturity of this Note. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Registered Holder hereof on such Regular Record Date, and may be paid to the person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Notes not less than ten days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Registered Notes may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. For purposes of this Note, "Business Day" means: (i) with respect to any Registered Note, any day that is not a Saturday or Sunday and that, in The City of New York, is not a day on which banking institutions generally are authorized or obligated by law or executive order to close; (ii) if the Base Rate specified above is LIBOR, any such day on which dealings in deposits in the Specified Currency are transacted in the London interbank market (a "London Business Day"); (iii) with respect to any determination by the exchange rate agent (as defined below) of an exchange rate pursuant to notes having a specified currency other than U.S. dollars, a day on which banking institutions and foreign exchange market settle payments in New York 4 City and London (an "Exchange Rate Business Day"); (iv) with respect to Registered Notes having a specified currency other than U.S. dollars only, other than Registered Notes denominated in Euros, any day that, in the principal financial center (as defined below) of the country of the Specified Currency, is not a day on which banking institutions generally are authorized or obligated by law to close; and (v) with respect to EURIBOR Notes and Notes denominated in Euros, a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer ("TARGET") System is open (a "Target Business Day"). The indebtedness evidenced by this Note is, to the extent set forth in the Indenture, expressly subordinated and subject in right of payment to the prior payment in full of Senior Indebtedness as defined in the Indenture, and this Note is issued subject to such provisions, and each Holder of this Note, by accepting the same, agrees to and shall be bound by such provisions and authorizes and directs the Trustee in his behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination as provided in the Indenture and appoints the Trustee as his attorney-in-fact for any and all such purposes. As used above, a "principal financial center" means the capital city of the country issuing the Specified Currency. However, with respect to U.S. dollars, Australian dollars, Canadian dollars, and Swiss francs, the principal financial center shall be The City of New York, Sydney, Toronto, and Zurich, respectively. If this Note is an Amortizing Note as shown on the face hereof or in the pricing supplement attached hereto or delivered herewith, a portion or all the principal amount of the Note is payable prior to Stated Maturity in accordance with a schedule, by application of a formula, or by reference to an Index (as described above). The principal hereof and any premium and interest hereon are payable by the Company in the Specified Currency shown above. If the Specified Currency shown above is other than U.S. dollars, the Company will arrange to convert all payments in respect hereof into U.S. dollars in the manner described on the reverse hereof. The Holder hereof may, if so indicated above, elect to receive all payments in respect hereof in the Specified Currency by delivery of a written notice to the Trustee not later than fifteen calendar days prior to the applicable payment date. Such election will remain in effect until revoked by written notice to the Trustee received not later than fifteen calendar days prior to the applicable payment date. If the Company determines that the Specified Currency is not available for making payments in respect hereof due to the imposition of exchange controls or other circumstances beyond the Company's control or is no longer used by the government of the country issuing such currency or for the settlement of transactions by public institutions or within the international banking community, then the Holder hereof may not so elect to receive payments in the Specified Currency, and any such outstanding election shall be automatically suspended, and payments shall be in U.S. dollars, until the Company determines that the Specified Currency is again available for making such payments. Payments of interest in U.S. dollars (other than interest payable at Stated Maturity) will be made by check mailed to the address of the Person entitled thereto as such address shall appear on the Security Register on the applicable Record Date; provided that, if the Holder hereof is the Holder of U.S. $10,000,000 (or the equivalent thereof in a currency other 5 than U.S. dollars determined as provided on the reverse hereof) or more in aggregate principal amount of Registered Notes of like tenor and term, such U.S. dollar interest payments will be made by wire transfer of immediately available funds, but only if appropriate wire transfer instructions have been received in writing by the Trustee not less than fifteen calendar days prior to the applicable Interest Payment Date. Simultaneously with any election by the Holder hereof to receive payments in respect hereof in the Specified Currency (if other than U.S. dollars), such Holder shall provide appropriate wire transfer instructions to the Trustee and all such payments will be made by wire transfer of immediately available funds to an account maintained by the payee with a bank located outside the United States. The principal hereof and any premium and interest hereon payable at Stated Maturity will be paid in immediately available funds upon surrender of this Note at the corporate trust office or agency of the Trustee located in the City and State of New York. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF AND IN ANY PRICING SUPPLEMENT ATTACHED HERETO OR DELIVERED HEREWITH, AND SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE. This Note shall not become valid or obligatory for any purpose unless and until this Note has been authenticated by Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), or its successor, as Trustee. 6 IN WITNESS WHEREOF, the Company has caused this Note to be executed under its corporate seal. Dated: CITIGROUP GLOBAL MARKETS HOLDINGS INC. By _______________________________ Authorized Officer [Seal] Attest ___________________________ Assistant Secretary CERTIFICATE OF AUTHENTICATION This is one of the Notes issued under the within-mentioned Indenture. Dated: DEUTSCHE BANK TRUST COMPANY AMERICAS (formerly BANKERS TRUST COMPANY), as Trustee By _______________________________ Authorized Signatory 7 (REVERSE OF SECURITY) CITIGROUP GLOBAL MARKETS HOLDINGS INC. MEDIUM-TERM SUBORDINATED NOTE, SERIES E DUE NINE MONTHS OR MORE FROM DATE OF ISSUE (FLOATING OR INDEXED RATE) General This Note is one of a series of duly authorized debt securities of the Company (the "Debt Securities") issued or to be issued in one or more series under an indenture, dated as of December 1, 1988, as amended (the "Indenture"), between the Company and Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), as trustee (the "Trustee," which term includes any successor Trustee under the Indenture), to which indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Debt Securities and of the terms upon which the Debt Securities are, and are to be, authenticated and delivered. The U.S. dollar equivalent of the public offering price or purchase price of Notes denominated in currencies other than U.S. dollars will be determined by the Company or its agent, as exchange rate agent for the Notes (the "Exchange Rate Agent") on the basis of the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York (the "Market Exchange Rate") for such currencies on the applicable issue dates. The Notes are in registered form without coupons. Unless otherwise specified in the applicable pricing supplement, the authorized denominations of Registered Notes denominated in U.S. dollars will be U.S.$1,000 and any larger amount that is an integral multiple of U.S.$1,000. The authorized denominations of Registered Notes denominated in a currency other than U.S. dollars will be the approximate equivalents thereof in the Specified Currency. Each Registered Note will be issued initially as a Book-Entry Note, and will not be exchangeable for Certificated Notes, except as otherwise provided in the Indenture or specified in the applicable pricing supplement. Floating Rate Notes Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, if this Note is a Floating Rate Note, this Note will bear interest from its Original Issue Date to, but not including, the first Interest Reset Date (as defined below) at the Initial Interest Rate set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith. Thereafter, the interest rate hereon for each Interest Reset Period will be determined by reference to the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, plus or minus the Spread, if any, or multiplied by the Spread Multiplier, if any, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. The Base Rates that may be specified on the face hereof or in the pricing supplement attached hereto or delivered herewith are LIBOR, the Commercial Paper Rate, the Treasury Rate, the Federal Funds Rate, the CD Rate, the Prime Rate, the Eleventh District Cost of Funds Rate, EURIBOR or any other Base Rate specified on the face hereof. "H.15(519)" means the publication entitled "Statistical Release H.15(519), Selected Interest Rates" or any successor publication, published by the Board of Governors of the Federal Reserve System. "H.15 Daily Update" means the daily update of the Board of Governors of the Federal Reserve System at http://www.bog.frb.fed.us/releases/H15/update or any successor site or publication. "Calculation Date," where applicable, means the date on which the Calculation Agent is to calculate the interest rate for the Notes which shall be the earlier of (1) the tenth calendar day after the related Rate Determination Date, or if any such day is not a Business Day, the next succeeding business day or (2) the Business Day preceding the applicable Interest Payment Date or the Stated Maturity, as the case may be. As specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, this Note may also have either or both of the following (in each case expressed as a rate per annum on a simple interest basis): (i) a maximum limitation, or ceiling, on the rate at which interest may accrue during any interest period ("Maximum Interest Rate") and/or (ii) a minimum limitation, or floor, on the rate at which interest may accrue during any interest period ("Minimum Interest Rate"). In addition to any Maximum Interest Rate that may be specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the interest rate will in no event be higher than the maximum rate permitted by applicable law, as the same may be modified by United States law of general application. The Company will appoint, and enter into an agreement with, agents (each, a "Calculation Agent") to calculate interest rates on this Note. All determinations of interest rates by the Calculation Agent shall, in the absence of manifest error, be conclusive for all purposes and binding on the Holder hereof. Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), shall be the Calculation Agent for this Note. At the request of the Holder hereof, the Calculation Agent will provide the interest rate then in effect and, if determined, the interest rate that will become effective on the next Interest Reset Date. The interest rate hereon will be reset daily, weekly, monthly, quarterly, semiannually or annually (such period being the "Interest Reset Period" specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, and the first day of each Interest Reset Period being an "Interest Reset Date"). Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Interest Reset Dates will be as follows: (i) if this Note resets daily, each Business Day; (ii) if this Note (unless this Note is a Treasury Rate Note) resets weekly, Wednesday of each week; (iii) if this Note is a Treasury Rate Note that resets weekly, Tuesday of each week (except as provided below under "Determination of Treasury Rate"); (iv) if this Note resets monthly, the third Wednesday of each month (with the exception of monthly reset Eleventh District Cost of Funds Rate Notes, which reset on the first calendar day of each month); (v) if this Note is an Eleventh District Cost of 2 Funds Rate Note that resets monthly, the first calendar day of each month; (vi) if this Note resets quarterly, the third Wednesday of March, June, September and December of each year; (vii) if this Note resets semiannually, the third Wednesday of the two months of each year specified on the face hereof or in the pricing supplement attached hereto or delivered herewith; and (viii) if this Note resets annually, the third Wednesday of the month of each year specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. If an Interest Reset Date would otherwise be a day that is not a Business Day, such Interest Reset Date shall be postponed to the next succeeding Business Day, except that, if the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is LIBOR or EURIBOR and such Business Day is in the next succeeding calendar month, such Interest Reset Date shall instead be the immediately preceding Business Day. If an auction of direct obligations of United States Treasury Bills falls on a day that is an Interest Reset Date for Treasury Rate Notes, the Interest Reset Date shall be the succeeding Business Day. Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the interest payable hereon on each Interest Payment Date shall be the accrued interest from and including the Original Issue Date or the last date to which interest has been paid, as the case may be, to but excluding such Interest Payment Date. If more than one Interest Reset Date occurs during any period for which accrued interest is being calculated, accrued interest shall be calculated by multiplying the principal amount hereof (or if this Note is an Indexed Principal Note, the Face Amount specified on the face hereof or in the pricing supplement attached hereto or delivered herewith) by an accrued interest factor. Such accrued interest factor will be computed by adding the interest factors calculated for each day in the period for which accrued interest is being calculated. The interest factor (expressed as a decimal calculated to seven decimal places without rounding) for each such day will be computed, unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, by dividing the interest rate in effect on such day by 360, if the Base Rate specified on the face hereof is the Commercial Paper Rate, the Federal Funds Rate, the CD Rate, the Prime Rate, the Eleventh District Cost of Funds Rate, LIBOR, or EURIBOR, or by the actual number of days in the year, if the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is the Treasury Rate. In all other cases, accrued interest shall be calculated by multiplying the principal amount hereof (or if this Note is an Indexed Principal Note, the Face Amount specified on the face hereof) by the interest rate in effect during the period for which accrued interest is being calculated, and multiplying that product by the quotient obtained by dividing the number of days in the period for which accrued interest is being calculated by 360, if the Base Rate specified on the face hereof is the Commercial Paper Rate, the Federal Funds Rate, the CD Rate, the Prime Rate, the Eleventh District Cost of Funds Rate, LIBOR, or EURIBOR, or by the actual number of days in the year, if the Base Rate specified on the face hereof is the Treasury Rate. For purposes of making the foregoing calculations, the interest rate in effect on any Interest Reset Date will be the applicable rate as reset on such date. Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, all percentages resulting from any calculation of the rate of interest hereof will be rounded, if necessary, to the nearest 1/100,000 of 1% (.0000001), with five one-millionths of a percentage point rounded upward, and all currency amounts used in or 3 resulting from such calculation will be rounded to the nearest one-hundredth of a unit (with .005 of a unit being rounded upward). Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, interest will be payable as follows: (i) if this Note resets daily, weekly or monthly (other than Eleventh District Cost of Funds Rate Notes), interest will be payable on the third Wednesday of each month or on the third Wednesday of March, June, September and December of each year, as specified on the face hereof or in the pricing supplement attached hereto or delivered herewith or; (ii) in the case of Eleventh District Cost of Funds Rate Notes, interest will be payable on the first calendar day of each March, June, September and December; (iii) if this Note resets quarterly, interest will be payable on the third Wednesday of March, June, September, and December of each year; (iv) if this Note resets semiannually, interest will be payable on the third Wednesday of each of two months of each year specified on the face hereof or in the pricing supplement attached hereto or delivered herewith; and (v) if this Note resets annually, interest will be payable on the third Wednesday of the month of each year specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, and in each case at Stated Maturity (each such day being an "Interest Payment Date"). If an Interest Payment Date would otherwise fall on a day that is not a Business Day, such Interest Payment Date shall be postponed to the next succeeding Business Day, except that, if the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is LIBOR or EURIBOR and such Business Day is in the next succeeding calendar month, such Interest Payment Date shall instead be the immediately preceding Business Day; provided, however, if with respect to any Note for which "Accrue to Pay" is not specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, if an Interest Payment Date with respect to such Note would otherwise be a day that is not a Business Day, such Interest Payment Date shall not be postponed; provided, further, that any payment required to be made in respect of a Note that does not Accrue to Pay on a date (including the day of Stated Maturity) that is not a Business Day for such Note need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on such date, and no additional interest shall accrue as a result of such delayed payment. Subject to applicable provisions of law and except as specified herein, on each Interest Reset Date the rate of interest shall be the rate determined in accordance with the provisions of the applicable heading below. Determination of CD Rate If the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is the CD Rate, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to the CD Rate and the Spread or Spread Multiplier, if any, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. The "CD Rate" for each Interest Reset Period shall be the rate as of the second Business Day prior to the Interest Reset Date for such Interest Reset Period (a "CD Rate Determination Date") for negotiable U.S. dollar certificates of deposit having the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as published in H.15(519) under the heading "CDs (Secondary Market)". In the event that such rate is not published prior to 3:00 p.m., New York City time, on the Calculation Date (as defined 4 above) pertaining to such CD Rate Determination Date, then the "CD Rate" for such Interest Reset Period will be the rate on such CD Rate Determination Date for negotiable U.S. dollar certificates of deposit of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as published in the H.15 Daily Update, or other recognized electronic source used for the purpose of displaying the applicable rate, under the heading "CDs (Secondary Market)." If by 3:00 p.m., New York City time, on such Calculation Date such rate is not yet published in either H.15(519) or H.15 Daily Update, then the "CD Rate" for such Interest Reset Period will be calculated by the Calculation Agent and will be the arithmetic mean of the secondary market offered rates as of 10:00 a.m., New York City time, on such CD Rate Determination Date of three leading nonbank dealers in negotiable U.S. dollar certificates of deposit in The City of New York selected by the Calculation Agent for negotiable U.S. dollar certificates of deposit of major United States money center banks of the highest credit standing (in the market for negotiable U.S. dollar certificates of deposit) with a remaining maturity closest to the Index Maturity on the face hereof or in the pricing supplement attached hereto or delivered herewith in a denomination of $5,000,000; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting offered rates as mentioned in this sentence, the CD Rate for such Interest Reset Period will be the same as the CD Rate for the immediately preceding Interest Reset Period (or, if there was no such Interest Reset Period, the Initial Interest Rate). Determination of Commercial Paper Rate If the Base Rate shown on the face hereof or in the pricing supplement attached hereto or delivered herewith is the Commercial Paper Rate, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to the Commercial Paper Rate and the Spread or Spread Multiplier, if any, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. The "Commercial Paper Rate" for each Interest Reset Period will be determined by the Calculation Agent as of the second Business Day prior to the Interest Reset Date for such Interest Reset Period (a "Commercial Paper Rate Determination Date") and shall be the Money Market Yield (as defined below) on such Commercial Paper Rate Determination Date of the rate for commercial paper having the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, as such rate shall be published in H.15(519) under the heading "Commercial Paper-Nonfinancial". In the event that such rate is not published prior to 3:00 p.m., New York City time, on the Calculation Date (as defined above) pertaining to such Commercial Paper Rate Determination Date, then the Commercial Paper Rate for such Interest Reset Period shall be the Money Market Yield on such Commercial Paper Rate Determination Date of the rate for commercial paper of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as published in the H.15 Daily, or such other recognized electronic source used for the purpose of displaying the applicable rate, under the heading "Commercial Paper-Nonfinancial." If by 3:00 p.m., New York City time, on such Calculation Date such rate is not yet published in either H.15(519) or the H.15 Daily Update, then the "Commercial Paper Rate" for such Interest Reset Period shall be the Money Market Yield of the arithmetic mean of the offered rates as of 11:00 a.m., New York City time, on such Commercial Paper Rate Determination Date of three leading dealers of U.S. dollar commercial paper in The City of New York selected by the Calculation Agent for commercial paper of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith 5 placed for an industrial issuer whose bonds are rated "AA" or the equivalent by a nationally recognized rating agency; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting offered rates as mentioned in this sentence, the "Commercial Paper Rate" for such Interest Reset Period will be the same as the Commercial Paper Rate for the immediately preceding Interest Reset Period (or, if there was no such Interest Reset Period, the Initial Interest Rate). "Money Market Yield" shall be the yield calculated in accordance with the following formula: D x 360 Money Market Yield = ---------------- x 100 360 - (D x M) where "D" refers to the applicable per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal and "M" refers to the actual number of days in the applicable Interest Reset Period specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Determination of Federal Funds Rate If the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is the Federal Funds Rate, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to the Federal Funds Rate and Spread or Spread Multiplier, if any, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. The "Federal Funds Rate" for each Interest Reset Period shall be the effective rate on the second Business Day prior to the Interest Reset Date for such Interest Reset Period (a "Federal Funds Rate Determination Date") for Federal Funds as published in H.15(519) under the heading "Federal Funds (Effective)" and displayed on Moneyline Telerate (or any successor service) on Page 120 (or any other page as may replace the specified Page on that service). In the event that such rate does not appear on Moneyline Telerate on Page 120 or is not published prior to 3:00 p.m., New York City time, on the Calculation Date (as defined above) pertaining to such Federal Funds Rate Determination Date, the "Federal Funds Rate" for such Interest Reset Period shall be the rate on such Federal Funds Rate Determination Date as published in the H.15 Daily Update under the heading "Federal Funds/Effective Rate," or other recognized electronic source used for the purpose of displaying the applicable rate. If by 3:00 p.m., New York City time, on such Calculation Date, such rate is not yet published, then the "Federal Funds Rate" for such Interest Reset Period shall be arithmetic mean of the rates for the last transaction in overnight U.S. dollar federal funds arranged by three leading brokers of U.S. dollar Federal Funds transactions in New York City, selected by the Calculation Agent prior to 9:00 a.m., New York City time, on that Federal Funds Rate Determination Date; provided, however, that if the brokers so selected by the Calculation Agent are not quoting as mentioned above, the "Federal Funds Rate" for the Interest Reset Period will be the "Federal Funds Rate" in effect for the particular Federal Funds Rate Determination Date. If there was no Federal Funds Rate in effect for the Interest Reset Period, the "Federal Funds Rate" will be the initial interest rate. 6 Determination of LIBOR If the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is LIBOR, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to LIBOR and the Spread or Spread Multiplier, if any, specified on the face hereof. "LIBOR" for each Interest Reset Period will be determined by the Calculation Agent as follows On the second London Business Day prior to the Interest Reset Date for such Interest Reset Period (a "LIBOR Determination Date"), the Calculation Agent for such LIBOR Note will determine the offered rates for deposits in the Specified Currency for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, which appear on the Designated LIBOR Page at approximately 11:00 a.m., London time, on such LIBOR Determination Date. "Designated LIBOR Page" means either (a) if "LIBOR Moneyline Telerate" is designated on the face hereof or in the pricing supplement attached hereto or delivered herewith, or if neither "LIBOR Reuters" nor "LIBOR Moneyline Telerate" is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as the method for calculating LIBOR, the display designated as page "3750" on the Telerate Service ("Telerate") (or such other page as may replace page "3750" on such service or such other service as may be replaced by a successor service for the purpose of displaying the London interbank offered rates of major banks), and LIBOR for such Interest Reset Period will be the relevant offered rate as determined by the Calculation Agent or (b) if "LIBOR Reuters" is designated on the face hereof or in the pricing supplement attached hereto or delivered herewith, "Designated LIBOR Page" means the display designated as page "LIBO" on the Reuters Monitor Money Rates Service and LIBOR will be the arithmetic means of the offered rates, calculated by the Calculation Agent, or the offered rates, if the designated LIBOR page by its terms provides only for a single rate (or such other page as may replace the LIBO page on such service or such other service as may be replaced by a successor service for purpose of displaying London interbank offered rates of major banks). If neither LIBOR Reuters nor LIBOR Telerate is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, LIBOR will be determined as if LIBOR Moneyline Telerate had been specified. If LIBOR cannot be determined as described above (either because the Designated LIBOR Page is no longer available or because fewer than two offered rates appear on the Designated LIBOR Page on the LIBOR Determination Date), the Calculation Agent will determine "LIBOR" as follows. The Calculation Agent will request the principal London offices of each of the four major banks in the London interbank market selected by the Calculation Agent to provide the Calculation Agent with its offered quotations for deposits in the Specified Currency for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, to prime banks in the London interbank market at approximately 11:00 a.m., London time, on the LIBOR Determination Date, in a principal amount equal to an amount of at least $1,000,000 or its approximate equivalent thereof in the Specified Currency, that is representative of a single transaction in such market at such time. If two or more such quotations are provided, "LIBOR" for such Interest Reset Period will be the arithmetic mean of such quotations. If fewer than two such quotations are provided, "LIBOR" for such Interest Reset Period will be the arithmetic 7 mean of rates quoted by three major banks in The City of New York selected by the Calculation Agent at approximately 11:00 a.m., New York city time, on the LIBOR Determination Date for loans in the Specified Currency to leading European banks for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, in a principal amount equal to an amount of at least $1,000,000 or the approximate equivalent thereof in the Specified Currency that is representative of a single transaction in such market at such time; provided, however, that if fewer than three banks selected as aforesaid by the Calculation Agent are quoting rates as mentioned in this sentence. "LIBOR" for such Interest Reset Period will be the same as LIBOR for the immediately preceding Interest Reset Period (or, if there was no such Interest Reset Period, the LIBOR Rate will be the Initial Interest Rate). Determination of Treasury Rate If the Base Rate specified in the face hereof or in the pricing supplement attached hereto or delivered herewith is the Treasury Rate or Treasury Rate Constant Maturity, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to the Treasury Rate and the Spread or Spread Multiplier, if an, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Unless "Treasury Rate Constant Maturity" is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the "Treasury Rate" for each Interest Reset Period will be the rate for the auction held on the Treasury Rate Determination Date (as defined below) for such Interest Reset Period of direct obligations of the United States ("Treasury Securities") that have the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, as such rate appears on either Moneyline Telerate (or any successor service) on page 56 (or any other page as may replace the page on that service) or on page 57 (or any other page as may replace that page on that service) under the heading "Investment Rate." The following procedures will be followed if the Treasury Rate cannot be determined as described above. If not so published by 3:00 p.m., New York City time, on the Calculation Date, the "Treasury Rate" will be the Bond Equivalent Yield (defined below) of the rate for the applicable Treasury Securities as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the heading "U.S. Government Securities/Treasury Bills/Auction High." In the event that such rate is not so published by 3:00 p.m., New York City time, on the related Calculation Date, the Treasury Rate will be the Bond Equivalent Yield of the auction rate of the applicable Treasury Securities as announced by the United States Department of the Treasury. In the event that the results of the auction of Treasury Securities is not so announced by the United States Department of the Treasury, or if the auction is not held, then the Treasury Rate will be the Bond Equivalent Yield of the rate on the Treasury Rate Determination Date of the applicable Treasury Securities published in H.15(519) under the heading of "U.S. Government Securities/Treasury Bills/Secondary Market." If such rate is not so published by 3:00 p.m., New York City time, on the related Calculated Date, then the Treasury Rate will be the rate on the Treasury Rate Determination Date of the applicable Treasury Securities as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the heading "U.S. Government Securities/Treasury Bills/Secondary Market." In the event that such rate is not so published by 3:00 p.m., New York City time, on the related Calculation Date, then the Treasury Rate will be the rate on the Treasury Rate Determination Date calculated by the Calculation Agent as the 8 Bond Equivalent Yield of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 p.m., New York City time, on the Treasury Rate Determination Date, of three primary United States government securities dealers selected by the Calculation Agent for the issue of Treasury Securities with a remaining maturity closest to the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting bid rates as mentioned in this sentence, then the "Treasury Rate" for such Interest Reset Period will be the same as the Treasury Rate for the immediately preceding Interest Reset Period (or, if there was no Interest Reset Period, the Initial Interest Rate). The "Treasury Rate Determination Date" for each Interest Reset Period will be the day of the week in which the Interest Reset Date for such Interest Reset Period falls on which Treasury Securities would normally be auctioned. Treasury Securities are normally sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is normally held on the following Tuesday, except that such auction may be held on the preceding Friday. If, as the result of a legal holiday, an auction is so held on the preceding Friday, such Friday will be the Treasury Rate Determination Date pertaining to the Interest Reset Period commencing in the next succeeding week. If an auction date shall fall on any day that would otherwise be an Interest Reset Date for a Note whose Base Rate is the Treasury Rate, then such Interest Reset Date shall instead be the Business Day immediately following such auction date. Bond Equivalent: Yield will be calculated as follows: D x N Bond Equivalent Yield = ------------- X 100 360 - (D x M) where "D" refers to the applicable per annum rate for Treasury Securities quoted on a bank discount basis and expressed as a decimal, "N" refers to 365 or 366, as the case may be, and "M" refers to the actual number of days in the applicable interest reset period. If "Treasury Rate Constant Maturity" is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the "Treasury Rate" for each Interest Reset Period will be the rate displayed on the Designated CMT Telerate Rate Page under the caption "Treasury Constant Maturities" under the column for the Designated CMT Maturity Index in the following manner. If the Designated CMT Moneyline Telerate Page is 7051, the Treasury Rate will be the rate on the Constant Maturity Treasury Rate Determination Date. In the event that such rate does not appear on Moneyline Telerate Page 7051, then the Treasury Rate will be the treasury constant maturity rate for the designated CMT maturity index as published in the relevant H.15(519) under the caption "Treasury Constant Maturities." In the event that such rate does not so appear in H.15(519), then the Treasury Rate will be the constant treasury maturity rate on the Constant maturity Treasury Rate Determination Date for the designated CMT maturity index as may then be published by either the Federal Reserve System Board of Governors or the United States Department of the Treasury that the calculation agent determines to be comparable to the rate which would have otherwise been published in H.15(519). If the Designated CMT Moneyline Telerate Page is 7052, the "Treasury Rate" will be the weekly or monthly average, as specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, for the week or the month, as applicable, ended 9 immediately preceding the week or month, as applicable, in which the related Constant Maturity Treasury Rate Determination Date occurs. In the event that such rate does not appear on Moneyline Telerate Page 7052, then the Treasury Rate will be the one-week or one-month, as specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, average of the treasury constant maturity rate for the designated CMT maturity index for the week or month as applicable, preceding the Constant Maturity Treasury Determination Date as published in the relevant H.15(519) under the caption "Treasury Constant Maturities." In the event that such rate does not so appear in H.15(519), then the Treasury Rate will be the one-week or one-month, as specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, average of the constant treasury maturity rate for the designated CMT maturity index as otherwise announced by the Federal Reserve Bank of New York for the week or month, as applicable, ended immediately preceding the week or month, as applicable, in which the Constant Maturity Treasury Rate Determination Date falls. The following procedures will be followed if the Treasury Rate cannot be determined as indicated above. If such information, as applicable, is not so published, then the Calculation Agent will calculate the Treasury Rate on the Constant Maturity Treasury Rate Determination Date as follows which shall be a yield to maturity, based on the arithmetic mean of the secondary market bid prices as of approximately 3:30 p.m., New York City time, on the Constant Maturity Treasury Rate Determination Date of three leading U.S. government securities dealers in The City of New York selected by the Calculation Agent, one of which may be the Agent, from five such dealers selected by the Calculation Agent and eliminating the highest quotation, or in the event of equality, one of the highest, and the lowest quotation, or, in the event of equality, one of the lowest, for United States Treasury Securities ("Treasury Notes"), with an original maturity of approximately the Designated CMT Maturity Index and a remaining term to maturity of not less than such Designated CMT Maturity Index minus one year and in a principal amount that is representative for a single transaction in the securities in that market at that time. If the Calculation Agent is unable to obtain three such Treasury Note quotations, the Treasury Rate on the Constant Maturity Treasury Rate Determination Date will be calculated by the Calculation Agent, and shall be a yield to maturity based on the arithmetic mean of the secondary market offer side prices as of approximately 3:30 p.m., New York City time, on the Constant Maturity Treasury Rate Determination Date of three leading U.S. government securities dealers in the City of New York, one of which may be the Agent, from five such dealers selected by the Calculation Agent and eliminating the highest quotation, or, in the event of equality, one of the highest, and the lowest quotation, or, in the event of equality, one of the lowest, for Treasury Notes with an original maturity of the number of years that is the next highest to the Designated CMT Maturity Index and a remaining maturity closest to the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, and in an amount that is representative for a single transaction in that market at that time. If three or four, and not five, of such dealers are quoting as described above, then the Treasury Rate will be based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of such quotes will be eliminated. However, if fewer than three dealers so selected by the Calculation Agent are quoting as mentioned above, the Treasury Rate determined as of the Constant Maturity Treasury Rate Determination Date will be the Treasury Rate in effect 10 on the Constant Maturity Treasury Rate Determination Date. If two Treasury Notes with an original maturity as described in the third preceding sentence have remaining terms to maturity equally close to the Designated CMT Maturity Index, the Calculation Agent will obtain quotations for the Treasury Note with the shorter remaining term to maturity and will use such quotations to calculate the Treasury Rate as set forth above. "Designated CMT Moneyline Telerate Page" means the display on the Telerate Service, or any successor service on the page specified in the applicable pricing supplement, or any other page as may replace such page on that service, or any successor service, for the purpose of displaying Treasury Constant Maturities as reported in H.15(519). If no such page is specified in the applicable pricing supplement, the Designated CMT Telerate Page shall be 7052, for the most recent week. "Designated CMT Maturity Index" means the original period to maturity of the U.S. Treasury Securities, either one, two, three, five, seven, ten, twenty or thirty years, specified in the applicable pricing supplement with respect to which the Treasury Rate will be calculated. If no such maturity is specified in the applicable pricing supplement, the Designated CMT Maturity Index shall be two years. "The Constant Maturity Treasury Rate Determination Date" shall be the second Business Day prior to the Interest Reset Date for the applicable Interest Reset Period. Determination of Prime Rate Prime Rate Notes will bear interest at the interest rates (calculated with reference to the Prime Rate and the Spread and/or Spread Multiplier, if any) specified in the Prime Rate Notes and in the applicable pricing supplement. The "Prime Rate" for each Interest Reset Period will be determined by the Calculation Agent for such Prime Rate Note as of the second Business Day prior to the Interest Reset Date for such Interest Reset Period (a "Prime Rate Determination Date") and shall be the rate made available and subsequently published on such date in H.15(519) under the heading "Bank Prime Loan." In the event that such rate is not published prior to 3:00 p.m., New York City time, on the Calculation Date (as defined above) pertaining to such Prime Rate Determination Date, then the Prime Rate for such Interest Reset Period shall be the rate published in the H.15 Daily Update under the heading "Bank Prime Loan." In the event that such rate has not been published prior to 3:00 p.m., New York City time, on the Calculation Date, then the Prime Rate will be calculated by the Calculation Agent and will be the arithmetic mean of the rates of interest publicly announced by each bank that appears on the Reuters Screen USPRIME1 Page (as defined below) as such bank's prime rate or base lending rate on the Prime Rate Determination Date. If fewer than four such rates appear on the Reuters Screen USPRIME1 Page for the Prime Rate Determination Date, the rate shall be the arithmetic mean of the prime rates quoted on the basis of the actual number of days in the year divided by 360 as of the close of business on the Prime Rate Determination Date by three major banks in The City of New York selected by the Calculation Agent. However, if the banks so selected by the Calculation Agent are not quoting as mentioned in the previous sentence, the Prime Rate will be the Prime Rate in effect on the Prime Rate Determination Date. 11 "Reuters Screen USPRIME1 Page" means the display designated as page "USPRIME1" on the Reuters Monitor Money Rates Service, (or such other page as may replace the USPRIME1 page on that service for the purpose of displaying prime rates or base lending rates of major United States banks). Determination of Eleventh District Cost of Funds Rate Eleventh District Cost of Funds Rate Notes will bear interest at the interest rates (calculated by reference to the Eleventh District Cost of Funds Rate and the Spread and/or Spread Multiplier, if any) specified in the Eleventh District Cost of Funds Rate Notes and in the applicable pricing supplement. The "Eleventh District Cost of Funds Rate," for each Interest Reset Period will be determined by the Calculation Agent for such Eleventh District Cost of Funds Rate Note as of the last working day of the month immediately prior to such Interest Reset Date for such Interest Reset Period on which the Federal Home Loan Bank of San Francisco (the "FHLB of San Francisco") publishes the Eleventh District Cost of Funds Index (as defined below) (the "Eleventh District Cost of Funds Rate Determination Date"), and shall be the rate equal to the monthly weighted average cost of funds for the calendar month preceding such Eleventh District Cost of Funds Rate Determination Date as set forth under the caption "Eleventh District" on Moneyline Telerate (or any successor service) on page 7058 (which page shall include any successor page (as determined by the Calculation Agent)) as of 11:00 a.m., San Francisco time, on such Eleventh District Cost of Funds Rate Determination Date. If such rate does not appear on Telerate page 7058 on any related Eleventh District Cost of Funds Rate Determination Date, the Eleventh District Cost of Funds Rate for such Eleventh District Cost of Funds Rate Determination Date shall be the monthly weighted average cost of funds paid by member institutions of the Eleventh Federal Home Loan Bank District that was most recently announced (the "Eleventh District Cost of Funds Rate Index") by the FHLB of San Francisco as such cost of funds for the calendar month preceding the date of such announcement. If the FHLB of San Francisco fails to announce such rate on or prior to the Eleventh District Cost of Funds Rate Determination Date for the calendar month immediately preceding such date, then the Eleventh District Cost of Funds Rate for such date will be the Eleventh District Cost of Funds Rate in effect on the Eleventh District Cost of Funds Rate Determination Date. Determination of EURIBOR If the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is EURIBOR, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to EURIBOR and the Spread or Spread Multiplier, if any, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. "EURIBOR" for each Interest Reset Period will be determined by the Calculation Agent as follows. On the second TARGET Business Day prior to the Interest Reset Date for such Interest Reset Period (a "EURIBOR Determination Date"), the Calculation Agent for such EURIBOR Note will determine the offered rates for deposits in Euros as sponsored, calculated and published jointly by the European Banking Federation and ACI -- The Financial Market 12 Association, or any company established by the joint sponsors for purposes of compiling and publishing those rates, for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, which appears on the Designated EURIBOR Page as of 11:00 a.m., Brussels time, on such EURIBOR Determination Date. "Designated EURIBOR Page" means the display designated as page "248" on Telerate (or any successor service or such other page as may replace page "248" on such service), and EURIBOR for such Interest Reset Period will be the relevant offered rates as determined by the Calculation Agent. If EURIBOR cannot be determined as described above the Calculation Agent will determine "EURIBOR" as follows. The Calculation Agent will request the principal Euro-zone (as defined below) office of each of four major banks in the Euro-zone interbank market selected by the Calculation Agent to provide the Calculation Agent with their respective offered quotations for deposits in Euros for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, to prime banks in the Euro-zone interbank market at approximately 11:00 a.m., Brussels time, on the EURIBOR Determination Date, in a principal amount equal to an amount of at least $1,000,000 or its approximate equivalent thereof in Euros that is representative of a single transaction in such market at such time. If two or more such quotations are provided, "EURIBOR" for such Interest Reset Period will be the arithmetic mean of such quotations. If less than two such quotations are provided, "EURIBOR" for such Interest Reset Period will be the arithmetic mean of rates quoted by four major banks in the Euro-zone selected by the Calculation Agent for such EURIBOR Note at approximately 11:00 a.m., Brussels time, on the EURIBOR Determination Date for loans in Euros to leading European banks for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, in a principal amount equal to an amount of at least $1,000,000 or the approximate equivalent thereof in Euros that is representative of a single transaction in such market at such time; provided, however, that if the banks so selected a aforesaid by the Calculation Agent are not quoting rates as mentioned in this sentence, "EURIBOR" for such Interest Reset Period will be same as EURIBOR for the immediately preceding Interest Reset Period (or, if there was no such Interest Reset Period, the EURIBOR Rate will be the Initial Interest Rate). "Euro-zone" means the region comprised of member states of the European Union that adopt the single currency in accordance with the Treaty establishing the European Community, as amended by the Treaty on European Union. Inverse Floating Rate Notes If this Note is designated as an Inverse Floating Rate Note on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Inverse Floating Rate shall be equal to (i) in the case of the period, if any, commencing on the Original Issue Date (or such other date which may be specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as the date on which this Note shall begin to accrue interest), up to the first Interest Reset Date, the Initial Fixed Interest Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, and (ii) in the case of each period commencing on an Interest Reset Date, the Reset Fixed Reference Rate specified on the face 13 hereof or in the pricing supplement attached hereto or delivered herewith minus the interest rate determined by reference to the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, as adjusted by the Spread and/or Spread Multiplier, if any, as determined in accordance with the provisions hereof; provided, however, that (x) the interest rate thereon will not be less than zero and (y) the interest rate in effect for the ten days immediately prior to the date of Stated Maturity will be the rate in effect on the tenth day preceding such date. Floating Rate / Fixed Rate Notes If this Note is designated as a Floating Rate / Fixed Rate Note, this Note will be a Floating Rate note for a specified portion of its term and a Fixed Rate Note for the remainder of its term, in which event the interest rate on this Note will be determined as provided herein as if it were a Floating Rate Note and a Fixed Rate Note hereunder for each such respective period, all as described herein and in the applicable pricing supplement. Subsequent Interest Periods If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Spread, Spread Multiplier or method of calculation of the Interest Rate on this Note may be reset by the Company on the date or dates specified on the face hereof or in the pricing supplement attached hereto or delivered herewith (each an "Optional Reset Date"). The Company may reset the Spread, Spread Multiplier or method of calculation of the Interest Rate Interest Rate by notifying the Trustee for this Note at least 45 but not more than 60 days prior to each Optional Reset Date. Not later than 40 days prior to each Optional Reset Date, the Trustee will mail to the Holder of this Note a notice (the "Reset Notice"), first class, postage prepaid, indicating whether the Company has elected to reset the Spread, Spread Multiplier or method of calculation of the Interest Rate, and if so, (i) such new Spread, Spread Multiplier or method of calculation of the Interest Rate and (ii) the provisions, if any, for redemption during the period from such Optional Reset Date to the next Optional Reset Date, or, if there is no such next Optional Reset Date, to the Stated Maturity of this Note (each such period, a "Subsequent Interest Period"), including the date or dates on which or the period or periods during which and the price or prices at which such redemption may occur during the Subsequent Interest Period. Upon the transmittal by the Trustee of a Reset Notice to the Holder of a Note, such new Spread, Spread Multiplier or method of calculation of the Interest Rate shall take effect automatically. Except as modified by the Reset Notice and as described below, such Note will have the same terms as prior to the transmittal of such Reset Notice. Notwithstanding the foregoing, not later than 20 days prior to the Optional Reset Date, the Company may, at its option, revoke the Spread or Spread Multiplier provided for in the Reset Notice and establish a higher Spread or Spread Multiplier for the Subsequent Interest Period by causing the Trustee to mail notice of such higher Spread or Spread Multiplier, first class, postage prepaid, to the Holder of this Note. Such notice shall be irrevocable. All Registered Notes with respect to which the Spread or Spread Multiplier is reset on an Optional Reset Date will bear such higher Spread or Spread Multiplier. The Holder of this Note will have the option to elect repayment of the Note by the Company on each Optional Reset Date at a price equal to the principal amount hereof, plus interest accrued to such Optional Reset Date. In order to obtain repayment on an Optional Reset 14 Date, the Holder must follow the procedures set forth below for optional repayment, except that the period for delivery or notification to the Trustee shall be at least 25 but not more than 35 days prior to such Optional Reset Date, and except that if the Holder has tendered this Note for repayment pursuant to a Reset Notice, the Holder may, by written notice to the Trustee, revoke such tender for repayment until the close of business on the tenth day before the Optional Reset Date. Indexed Notes If this Note is an Indexed Principal Note, then certain or all interest payments, in the case of an Indexed Rate Note, and/or the principal amount payable at Stated Maturity or earlier redemption or retirement, in the case of an Indexed Principal Note, is determined by reference to the amount designated on the face hereof or in the pricing supplement attached hereto or delivered herewith as the Face Amount of this Note and by reference to the Index as described on the face hereof or in the pricing supplement attached hereto or delivered herewith. If this Note is an Indexed Principal Note, the amount of any interest payment will be determined by reference to the Face Amount described on the face hereof or in the pricing supplement attached hereto or delivered herewith. If this Note is an Indexed Principal Note, the principal amount payable at Stated Maturity or any earlier redemption or repayment of this Note may be different from the Face Amount. If a third party is appointed to calculate or announce the Index for a particular Indexed Note and the third party either suspends the calculation or announcement of such Index or changes the basis upon which such Index is calculated in a manner that is inconsistent with the applicable pricing supplement, then the Company will select another third party to calculate or announce the Index. The agent or another affiliate of the Company may be either the original or successor third party selected by the Company. If for any reason such Index cannot be calculated on the same basis and subject to the same conditions and controls as applied to the original third party, then the indexed interest payments, if any, or any indexed principal amount of this Note shall be calculated in the manner set forth in the applicable pricing supplement. Any determination of such third party shall in the absence of manifest error be binding on all parties. Specified Currency If the Specified Currency is other than U.S. dollars, the amount of any U.S. dollar payment to be made in respect hereof will be determined by the Company or its agent based on the specified currency/U.S. dollar exchange rate prevailing at 11:00 a.m., London time, on the second Exchange Rate Business Day prior to the applicable payment date. In the event that such exchange rate bid quotation is not so available, the Exchange Rate Agent after consultation with the Company's control. All currency exchange costs will be borne by the Holders of such Registered Notes by deductions from such payments. If no such bid quotations are available, then such payments will be made in the Specified Currency, unless the Specified Currency is unavailable due to the imposition of exchange controls or to other circumstances beyond the Company's control, in which case payment will be made as described in the next paragraph. 15 Payments in Currencies other than the Specified Currency Except as set forth below, if any payment in respect hereof is required to be made in a specified currency other than U.S. dollars and such currency is unavailable due to the imposition of exchange controls or other circumstances beyond the Company's control or is no longer used by the government of the country issuing such currency or for the settlement of transactions by public institutions of or within the international banking community, then such payment shall be made in U.S. dollars until such currency is again available or so used. The amount so payable in such foreign currency shall be converted into U.S. dollars on the basis of the most recently available Market Exchange Rate for such currency or as otherwise indicated on the face hereof or in the pricing supplement attached hereto or delivered herewith. Any payment made under such circumstances in U.S. dollars will not constitute an Event of Default under the Indenture. In the event of an official redenomination of the Specified Currency of this Note (other than as a result of European Monetary Union, but including, without limitation, an official redenomination of any such Specified Currency that is a composite currency), the obligations of the Company with respect to payments on this Note shall, in all cases, be deemed immediately following such redenomination to provide for the payment of that amount of redenominated currency representing the amount of such obligations immediately before such redenomination. This Note does not provide for any adjustment to any amount payable under this Note as a result of (i) any change in the value of the Specified Currency hereof relative to any other currency due solely to fluctuations in exchange rates or (ii) any redenomination of any component currency of any composite currency (unless such composite currency is itself officially redenominated). Dual Currency Notes If this Note is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as a Dual Currency Note, the Company may have a one time option of making all payments of principal, premium, if any, and interest on all Dual Currency Notes issued on the same day and having the same terms (a "Tranche"), which payments would otherwise be made in the Specified Currency of such Notes, in an optional currency (the "Optional Payment Currency"). Such option will be exercisable in whole but not in part on an "Option Election Date," which will be any one of the dates specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. If the Company makes such an election, the amount payable in the Optional Payment Currency shall be determined using the Designated Exchange Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. If such election is made, notice of such election shall be mailed in accordance with the terms of the applicable Tranche of Dual Currency Notes within two Business Days of the Option Election Date and shall state (i) the first date, whether an Interest Payment Date and/or Stated Maturity, in which scheduled payments in the Optional Payment Currency will be made and (ii) the Designated Exchange Rate. Any such notice by the Company, once given, may not be withdrawn. The equivalent value in the Specified Currency of payments made after such an election may be less, at the then current exchange rate, than if the Company had made such payment in the Specified Currency. 16 Renewable Notes If this Note is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as a Renewable Note, this Note will mature on an Interest Payment Date occurring in or prior to the twelfth month following the Original Issue Date of this Note (the "Initial Maturity Date") unless the term of all or any portion of this Note is renewed in accordance with the following procedures: On the Interest Payment Date occurring in the sixth month (unless a different interval (the "Special Election Interval") is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith) prior to the Initial Maturity Date of this Note (the "Initial Renewal Date") and on the Interest Payment Date occurring in each sixth month (or in the last month of each Special Election Interval) after such Initial Renewal Date (each, together with the Initial Renewal Date, a "Renewal Date"), the term of this Note may be extended to the Interest Payment Date occurring in the twelfth month (or, if a Special Election Interval is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the last month in a period equal to twice the Special Election Interval) after such Renewal Date, if the Holder of this Note elects to extend the term of this Note or any portion thereof as described below. If the Holder does not elect to extend the term of any portion of the principal amount of this Note during the specified period prior to any Renewal Date, such portion will become due and payable on the Interest Payment Date occurring in the sixth month (or the last month in the Special Election Interval) after such Renewal Date (the "New Maturity Date"). The Holder may elect to renew the term of this Note, or if so specified, any portion thereof, by delivering a notice to such effect to the Trustee (or any duly appointed paying agent) at the corporate trust office of the Trustee or agency of the Trustee in the City of New York not less than 15 nor more than 30 days prior to such Renewal Date, unless another period is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Such election will be irrevocable and will be binding upon each subsequent Holder of this Note. An election to renew the term of this Note may be exercised with respect to less than the entire principal amount of this Note only if so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith and then only in such principal amount, or any integral multiple in excess thereof, as is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Notwithstanding the foregoing, the term of this Note may not be extended beyond the Stated Maturity specified for this Note on the face hereof or in the pricing supplement attached hereto or delivered herewith. If the Holder does not elect to renew the term, this Note must be presented to the Trustee (or any duly appointed paying agent) and, as soon as practicable following receipt of such Note the Trustee (or any duly appointed paying agent) shall issue in exchange therefor in the name of such Holder (i) a Note, in a principal amount equal to the principal amount of such exchanged Note for which no election to renew the term thereof was exercised, with terms identical to those specified on such exchanged Note (except that such Note shall have a fixed, nonrenewable Stated Maturity on the New Maturity Date) and (ii) if an election to renew is made with respect to less than the full principal amount of such Holder's Note, the Trustee or any duly appointed paying agent, shall issue in exchange for such Note in the name of such Holder a 17 replacement Renewable Note, in a principal amount equal to the principal amount of such exchanged Note for which the election to renew was made, with terms otherwise identical to the exchanged Note. Extension of Stated Maturity If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Stated Maturity of this Note may be extended at the option of the Company for one or more periods of whole years specified on the face hereof or in the pricing supplement attached hereto or delivered herewith (each an "Extension Period") from one to five years up to but not beyond the date (the "Final Maturity") set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith. The Company may exercise such option by notifying the Trustee for this Note at least 45 but not more than 60 days prior to the original Stated Maturity of this Note. If the Company exercises such option, the Trustee will mail to the Holder of this Note not later than 40 days prior to the original Stated Maturity a notice (the "Extension Notice"), first class, postage prepaid, indicating (i) the election of the Company to extend the Stated Maturity, (ii) the new Stated Maturity, (iii) the Spread or Spread Multiplier applicable to the Extension Period, and (iv) the provisions, if any, for redemption during such Extension Period including the date or dates on which, or the period or periods during which, and the price or prices at which, such redemption may occur during the Extension Period. Upon the Trustee's mailing of the Extension Notice, the Stated Maturity of this Note shall be extended automatically and, except as modified by the Extension Notice and as described in the next paragraph, this Note will have the same terms as prior to the mailing of such Notice. Notwithstanding the foregoing, not later than 20 days prior to the original Stated Maturity of this Note, the Company may, at its option, revoke the Spread or Spread Multiplier provided for in the Extension Notice and establish a higher Spread or Spread Multiplier for the Extension Period by causing the Trustee to mail notice of such higher Spread or Spread Multiplier, first class, postage prepaid, to the Holder of this Note. Such notice shall be irrevocable. All Registered Notes with respect to which the Stated Maturity is extended will bear such higher Spread or Spread Multiplier for the Extension Period, whether or not tendered for repayment. If the Company extends the Stated Maturity of this Note, the Holder will have the option to elect repayment of this Note by the Company on the original Stated Maturity at a price equal to the principal amount hereof, plus interest accrued to such date. In order to obtain repayment on such original Stated Maturity once the Company has extended the Stated Maturity hereof, the Holder must follow the procedures set forth below for optional repayment, except that the period for delivery or notification to the Trustee shall be at least 25 but not more than 35 days before the original Stated Maturity, and except that if the Holder has tendered this Note for repayment pursuant to an Extension Notice, the Holder may, by written notice to the Trustee, revoke such tender for repayment until the close of business on the tenth calendar day before the original Stated Maturity. 18 Optional Redemption, Repayment and Repurchase If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Company may, at its option, redeem this Note in whole or in part, on the date or dates (each an "Optional Redemption Date") specified herein, at the price (the "Redemption Price") (together with accrued interest to such Optional Redemption Date) specified herein. If required under the Federal Reserve Capital Adequacy Rules, the Company will obtain the prior approval of the Federal Reserve before exercising its redemption rights. Unless otherwise stated on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Trustee shall mail to the Holder a notice of such redemption first class, postage prepaid, at least 30 days prior to the date of redemption. Unless otherwise stated herein, the Company may exercise such option with respect to a redemption of this Note in part only by notifying the Trustee for this Note at least 45 days prior to any Optional Redemption Date. In the event of redemption of this Note in part only, a new Note or Notes for the unredeemed portion hereof will be issued to the Holder hereof upon the cancellation hereof. If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, this Note will be repayable prior to Stated Maturity at the option of the Holder on the Optional Repayment Dates shown on the face hereof or in the pricing supplement attached hereto or delivered herewith at the Optional Repayment Prices shown on the face hereof or in the pricing supplement attached hereto or delivered herewith, together with accrued interest to the date of repayment. In order for this Note to be repaid, the Trustee must receive at least 30 but not more than 45 days prior to an Optional Repayment Date (i) this Note with the form below entitled "Option to Elect Repayment" duly completed; or (ii) a telegram, telex, facsimile transmission or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc. or a commercial bank or trust company in the United States of America setting forth the name of the Holder of this Note, the principal amount of the Note to be repaid, the certificate number or a description of the tenor and terms of this Note, a statement that the option to elect repayment is being exercised thereby and a guarantee that this Note with the form below entitled "Option to Elect Repayment" duly completed will be received by the Trustee not later than five Business Days after the date of such telegram, telex, facsimile transmission or letter. If the procedure described in clause (ii) of the preceding sentence is followed, this Note with form duly completed must be received by the Trustee by such fifth Business Day. Any tender of this Note for repayment (except pursuant to a Reset Notice or an Extension Notice) shall be irrevocable. The repayment option may be exercised by the Holder of this Note for less than the entire principal amount of the Note; provided that the principal amount of this Note remaining outstanding after repayment is an authorized denomination. Upon such partial repayment, this Note shall be canceled and a new Note or Notes for the remaining principal amount hereof shall be issued in the name of the Holder of this Note. Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, this Note will not be subject to any sinking fund. Notwithstanding anything herein to the contrary, if this Note is a Discount Note, the amount payable in the event of redemption or repayment prior to the Stated Maturity hereof (other than pursuant to an optional redemption by the Company at a stated Redemption Price), in lieu of the principal amount due at the Stated Maturity hereof, shall be the Amortized Face 19 Amount of this Note as of the redemption date or the date of repayment, as the case may be. The Amortized Face Amount of this Note on any date shall be the amount equal to (i) the Issue Price set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith plus (ii) that portion of the difference between such Issue Price and the stated principal amount of such Note that has accrued by such date at (x) the Bond Yield to Maturity set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith or (y) if so specified, the Bond Yield to Call set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith (computed in each case in accordance with generally accepted United States bond yield computation principles); provided, however, that in no event shall the Amortized Face Amount of a Note exceed its stated principal amount. The Bond Yield to Call listed on the face of this Note or in the pricing supplement attached hereto or delivered herewith shall be computed on the basis of the first occurring Optional Redemption Date with respect to such Note and the amount payable on such Optional Redemption Date. In the event that such Note is not redeemed on such first occurring Optional Redemption Date, the Bond Yield to Call with respect to such Note shall be recomputed on such Optional Redemption Date on the basis of the next occurring Optional Redemption Date and the amount payable on such Optional Redemption Date, and shall continue to be so recomputed on each succeeding Optional Redemption Date until the Note is so redeemed. The Company may at any time purchase Registered Notes at any price in the open market or otherwise. Registered Notes so purchased by the Company may, at the discretion of the Company, be held or resold or surrendered to the Trustee for such Notes for cancellation. Other Terms As provided in the Indenture and subject to certain limitations therein set forth, this Note is exchangeable for a like aggregate principal amount of Registered Notes of different authorized denominations, as requested by the Person surrendering the same. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable on the Security Register of the Company, upon surrender of this Note for registration of transfer at the office or agency of the Company in the Borough of Manhattan, the City and State of New York, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company, the Security Registrar and the Trustee duly executed by the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Registered Notes of this series, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the Holder hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. 20 If an Event of Default with respect to the Debt Securities of this series shall have occurred and be continuing, the principal of all the Debt Securities of this series may be declared due and payable in this manner and with the effect provided in the Indenture. In case this Note shall at any time become mutilated, destroyed, stolen or lost and this Note or evidence of the loss, theft, or destruction hereof (together with such indemnity and such other documents or proof as may be required by the Company or the Trustee) shall be delivered to the principal corporate trust office of the Trustee or the agent of the Company or Trustee a new Registered Note of like tenor and principal amount will be issued by the Company in exchange for, or in lieu of, this Note. All expenses and reasonable charges associated with procuring such indemnity and with the preparation, authentication and delivery of a new Registered Note shall be borne by the Holder of this Note. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Debt Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of Debt Securities at the time outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Debt Securities of any series at the time outstanding, on behalf of the Holders of all the Debt Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Debt Security shall be conclusive and binding upon such Holder and upon all future Holders of this Debt Security and of any Debt Security issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon the Debt Security. Holders of Debt Securities may not enforce their rights pursuant to the Indenture or the Note except as provided in the Indenture. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed. This Note shall be deemed to be a contract made and to be performed solely in the State of New York and for all purposes be governed by, and construed in accordance with, the laws of said State without regard to the conflicts of law rules of said State. All terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in the Indenture. 21 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM -as tenants in common UNIF GIFT MIN ACT ______Custodian______ TEN ENT -as tenants by the entireties (Cust) (Minor) JT ENT -as joint tenants with right of Under Uniform Gifts survivorship and not as tenants in to Minors Act common _____________________ (State) Additional abbreviations may also be used though not in the above list _______________________________________ OPTION TO ELECT REPAYMENT The undersigned hereby irrevocably requests and instructs the Company to repay $__________ principal amount of the within Note, pursuant to its terms, on the "Optional Repayment Date" first occurring after the date of receipt of the within Note as specified below, together with interest thereon accrued to the date or repayment, to the undersigned at: ________________________________________________________________________________ ________________________________________________________________________________ (Please Print or Type Name and Address of the Undersigned) and to issue to the undersigned, pursuant to the terms of the Indenture, a new Note or Notes representing the remaining principal amount of this Note. For this Option to Elect Repayment to be effective, this Note with the Option to Elect Repayment duly completed must be received by the Company within the relevant time period set forth above at its office or agency in the Borough of Manhattan, the City and State of New York, located initially at the office of the Trustee at, if delivery is by hand, 4 Albany Street, Attention: Corporate Trust Department, New York, New York 10015. Dated: ______________________________________ Note: The signature to this Option to Elect Repayment must correspond with the name as written upon the face of the within Note in every particular without alteration or enlargement or any change whatsoever. FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto Please insert Social Security or Other Identifying Number of Assignee ________________________________________________________________________________ ________________________________________________________________________________ Please Print or Type Name and Address Including Zip Code of Assignee ________________________________________________________________________________ the within Note and all rights thereunder, hereby irrevocably constituting and appointing ________________________________________________________________________attorney to transfer such Note on the books of Citigroup Global Markets Holdings Inc. with full power of substitution in the premises. Dated: ________________________ ____________________________________________ Signature ____________________________________________ NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the Note in every particular, without alteration or enlargement or any change whatsoever. EX-4.DD 7 x99885s3exv4wdd.txt FORM OF MEDIUM-TERM BEARER NOTES, SERIES D AND E Exhibit 4(dd) BEARER PRINCIPAL AMOUNT No. FX ___ OR FACE AMOUNT $____________ CUSIP:_______ CITIGROUP GLOBAL MARKETS HOLDINGS INC. COMMON CODE MEDIUM-TERM SENIOR NOTE, SERIES D DUE NINE MONTHS OR MORE FROM DATE OF ISSUE (FIXED RATE) ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTION 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE. IF APPLICABLE, THE "TOTAL AMOUNT OF OID" AND "YIELD TO MATURITY" SET FORTH BELOW WILL BE COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE UNITED STATES FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES Issue Price: Original Issue Date: Interest Rate: Stated Maturity: Specified Currency (If other than U.S. dollars): Authorized Denominations: (If other than as set forth in the Prospectus Supplement) Dual Currency Note: [ ] Yes (see attached) [ ] No Optional Payment Currency: Designated Exchange Rate: Interest Payment Dates: Accrue to Pay: [ ] Yes [ ] No Indexed Principal Note: [ ] Yes (see attached) [ ] No Interest Rate Reset: [ ] The Interest Rate may not be changed prior to Stated Maturity. [ ] The Interest Rate may be changed prior to Stated Maturity (see attached). Optional Reset Dates (if applicable): Amortizing Note: [ ] Yes [ ] No Amortization Schedule: Optional Redemption: [ ] Yes [ ] No Optional Redemption Dates: Redemption Prices: Bond Yield to Maturity: Bond Yield to Call: Optional Repayment: [ ] Yes [ ] No Optional Repayment Dates: Optional Repayment Prices: Optional Extension of Stated Maturity: [ ] Yes [ ] No Final Maturity: Discount Note: [ ] Yes [ ] No Total Amount of OID: Yield to Maturity: Renewable Note: [ ] Yes (see attached) [ ] No Initial Maturity Date: Special Election Interval (if applicable): Amount (if less than entire principal amount) as to which election may be exercised: If the Specified Currency of this Note is Pounds sterling, the following applies: This instrument constitutes [ ] commercial paper [ ] a shorter term debt security [ ] a longer term debt security issued in accordance with regulations made under section 4 of the Banking Act 1987. The issuer of this Note is Citigroup Global Markets Holdings Inc., which is not an authorized institution or a European authorized institution (as such terms are defined in the Banking Act 1987 (Exempt Transactions) Regulation 1997). Repayment of the principal and payment of any interest or premium in connection with this Note has not been guaranteed. IF THE SPECIFIED CURRENCY OF THIS NOTE IS POUNDS STERLING, THE FOLLOWING APPLIES: THIS NOTE IS ISSUED IN ACCORDANCE WITH THE REGULATIONS MADE UNDER SECTION 4 OF THE BANKING ACT 1987. 2 CITIGROUP GLOBAL MARKETS HOLDINGS INC., a corporation duly organized and existing under the laws of the State of New York (herein referred to as the "Company"), for value received hereby promises to pay to bearer, upon presentation and surrender hereof (a) the Principal Amount or, in the case of an Indexed Principal Note, the Face Amount adjusted by reference to prices, changes in prices, or differences between prices, of securities, currencies, intangibles, goods, articles or commodities or by such other objective price, economic or other measures (an "Index") as described on the face hereof or in the pricing supplement attached hereto or delivered herewith, in the Specified Currency on the Stated Maturity shown above or earlier if and to the extent so provided herein and (b) accrued interest on the Principal Amount then outstanding (or in the case of an Indexed Principal Note, the Face Amount, then outstanding) to the bearer of the interest coupons attached hereto (the "Coupons") at the Interest Rate shown above from the Original Issue Date shown above or from the most recent date to which interest has been paid or duly provided for, annually in arrears (unless otherwise set forth herein or in the pricing supplement attached hereto or delivered herewith) on the Interest Payment Dates specified on the face of this Note or in the pricing supplement attached hereto or delivered herewith commencing on the first Interest Payment Date following the Original Issue Date shown above upon presentation and surrender of the Coupons as they shall severally mature, and on the Stated Maturity shown above, or upon earlier redemption or repayment, until, in either case, the Principal Amount then outstanding or the Face Amount is paid or duly provided for in accordance with the terms hereof. Unless otherwise specified herein or in the pricing supplement attached hereto or delivered herewith, interest on this Note, if any, will be computed on the basis of a 360-day year of twelve 30-day months or, in the case of an incomplete month, the number of days elapsed. For purposes of this Note, "Business Day" means: (i) with respect to any Bearer Note, any day that is not a Saturday or Sunday and that, in The City of New York, is not a day on which banking institutions generally are authorized or obligated by law or executive order to close; (ii) with respect to Bearer Notes having a Specified Currency other than U.S. dollars only, other than Bearer Notes denominated in Euros, any day that, in the principal financial center (as defined below) of the country of the Specified Currency, is not a day on which banking institutions generally are authorized or obligated by law to close; (iii) with respect to Notes denominated in Euros, a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer ("TARGET") System is open (a "TARGET Business Day"); and (iv) with respect to any determination by the exchange rate agent (as defined below) of an exchange rate pursuant to notes having a Specified Currency other than U.S. dollars, any such day on which banking institutions and foreign exchange markets settle payments in New York City and London (an "Exchange Rate Business Day"). As used above, a "principal financial center" means the capital city of the country issuing the Specified Currency. However, with respect to U.S. dollars, Australian dollars, Canadian dollars, and Swiss francs, the principal financial center shall be The City of New York, Sydney, Toronto, and Zurich, respectively. If this Note is an Amortizing Note as shown on the face hereof or in the pricing supplement attached hereto or delivered herewith, a portion or all the principal amount of the Note is payable prior to Stated Maturity in accordance with a schedule, by application of a formula, or by reference to an Index (as described above). Except under certain circumstances for Notes having Specified Currencies other than U.S. dollars, payments of the principal hereof and any premium and interest hereon will be made only in the Specified Currency. Payments in respect of this Note and any Coupon will be made only 3 against surrender of this Note or such Coupon, at the offices of the Paying Agents outside the United States listed on the reverse hereof. At the direction of the Holder of this Note or any Coupon, and subject to applicable laws and regulations, such payments will be made by check drawn on a bank in The City of New York (in the case of U.S. dollar payments) or outside the United States (in the case of payments in a currency other than U.S. dollars) mailed to an address outside the United States furnished by the Holder hereof or, at the option of the Holder hereof, by wire transfer (pursuant to written instructions supplied by the Holder hereof) to an account maintained by the payee with a bank located outside the United States. No payment in respect of this Note or any Coupon will be made upon presentation of this Note or such Coupon at any office or agency of the Trustee or any other paying agency maintained by the Company in the United States, nor will any such payment be made by transfer to an account, or by mail to an address, in the United States. Notwithstanding the foregoing, if U.S. dollar payments in respect of this Note or any Coupons at the offices of all Paying Agents outside the United States become illegal or are effectively precluded because of the imposition of exchange controls or similar restrictions on the full payment or receipt of such amounts in U.S. dollars, the Company will appoint an office or agency (which may be the Trustee) in the United States at which such payments may be made. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF AND IN ANY PRICING SUPPLEMENT ATTACHED HERETO OR DELIVERED HEREWITH, AND SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE. This Note shall not become valid or obligatory for any purpose unless and until this Note has been authenticated by Citibank, N.A., or its successor, as authentication agent. 4 IN WITNESS WHEREOF, the Company has caused this Note to be executed under its corporate seal. Dated: CITIGROUP GLOBAL MARKETS HOLDINGS INC. By ______________________________ Authorized Officer [Seal] Attest __________________________ Assistant Secretary CERTIFICATE OF AUTHENTICATION This is one of the Bearer Notes issued under the within-mentioned Indenture. Dated: CITIBANK, N.A., as authentication agent By ______________________________ Authorized Signatory 5 (REVERSE OF SECURITY) CITIGROUP GLOBAL MARKETS HOLDINGS INC. MEDIUM-TERM SENIOR NOTE, SERIES D DUE NINE MONTHS OR MORE FROM DATE OF ISSUE (FIXED RATE) General This Note is one of a series of duly authorized debt securities of the Company (the "Debt Securities") issued or to be issued in one or more series under an indenture, dated as of December 1, 1988, as amended (the "Indenture"), between the Company and Bank One Trust Company, N.A., as successor trustee (the "Trustee," which term includes any successor Trustee under the Indenture), to which indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Debt Securities and of the terms upon which the Debt Securities are, and are to be, authenticated and delivered. The U.S. dollar equivalent of the public offering price or purchase price of Notes denominated in currencies other than U.S. dollars will be determined by the Company or its agent, as exchange rate agent for the Notes (the "Exchange Rate Agent") on the basis of the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York (the "Market Exchange Rate") for such currencies on the applicable issue dates. The Notes are in bearer form. Unless otherwise specified in the applicable pricing supplement, the authorized denominations of Bearer Notes denominated in U.S. dollars will be U.S.$1,000 and any larger amount that is an integral multiple of U.S.$1,000. The authorized denominations of Bearer Notes denominated in a currency other than U.S. dollars will be the approximate equivalents thereof in the Specified Currency. Fixed Rate Notes This Note will bear interest from its Original Issue Date, or from the last Interest Payment Date to which interest has been paid or duly provided for, at the Interest Rate stated on the face hereof or in the pricing supplement attached hereto or delivered herewith until the principal amount hereof is paid or made available for payment, except as otherwise described below under "Subsequent Interest Periods" and "Extension of Stated Maturity", and except that if so specified in the attached pricing supplement, the rate of interest payable may be subject to adjustment as specified therein. Unless otherwise set forth herein or in the pricing supplement attached hereto or delivered herewith, interest on this Note will be payable semiannually in arrears on the Interest Payment Dates set forth above and at Stated Maturity. If an Interest Payment Date with respect to any Note would otherwise be a day that is not a Business Day, such Interest Payment Date shall not be postponed; provided, however, that any payment required to be made in respect of such Note on a date (including the day of Stated Maturity) that is not a Business Day for such Note need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on such date, and no additional interest shall accrue as a result of such delayed payment. However, if with respect to any Note for which "Accrue to Pay" is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, any Interest Payment Date with respect to such Fixed Rate Note would otherwise be a day that is not a Business Day, such Interest Payment Date shall be postponed to the next succeeding Business Day. Each payment of interest in respect of an Interest Payment Date shall include interest accrued through the day before such Interest Payment Date. Unless otherwise specified herein, interest on this Note will be computed on the basis of a 360-day year of twelve 30-day months ("30 over 360") or, in the case of an incomplete month, the number of days elapsed. Subsequent Interest Periods If so specified on the face hereof, the Interest Rate on this Note may be reset by the Company on the date or dates specified on the face hereof (each an "Optional Reset Date"). The Company may reset the Interest Rate by notifying the Trustee for this Note at east 45 but not more than 60 days prior to each Optional Reset Date. Not later than 40 days prior to each Optional Reset Date, the Trustee shall provide notice (the "Reset Notice"), in accordance with "Notices" below, indicating whether the Company has elected to reset the Interest Rate, and if so, (i) such new Interest Rate and (ii) the provisions, if any, for redemption during the period from such Optional Reset Date to the next Optional Reset Date, or, if there is no such next Optional Reset Date, to the Stated Maturity of this Note (each such period, a "Subsequent Interest Period"), including the date or dates on which or the period or periods during which and the price or prices at which such redemption may occur during the Subsequent Interest Period. Upon the transmittal by the Trustee of a Reset Notice to the Holder of a Note, such new Interest Rate shall take effect automatically. Except as modified by the Reset Notice and as described below, such Note will have the same terms as prior to the transmittal of such Reset Notice. Notwithstanding the foregoing, not later than 20 days prior to the Optional Reset Date, the Company may, at its option, revoke the Interest Rate provided for in the Reset Notice and establish a higher Interest Rate for the Subsequent Interest Period by causing the Trustee to provide notice of such higher Interest Rate to the Holder of this Note. Such notice shall be irrevocable. All Bearer Notes with respect to which the Interest Rate is reset on an Optional Reset Date will bear such higher Interest Rate. The Holder of this Note will have the option to elect repayment of the Note by the Company on each Optional Reset Date at a price equal to the principal amount hereof, plus interest accrued to such Optional Reset Date. In order to obtain repayment on an Optional Reset Date, the Holder must follow the procedures set forth below for optional repayment, except that the period for delivery or notification to the Paying Agent shall be at least 25 but not more than 35 days prior to such Optional Reset Date, and except that if the Holder has tendered this Note for repayment pursuant to a Reset Notice, the Holder may, by written notice to the Paying Agent, revoke such tender for repayment until the close of business on the tenth day before the Optional Reset Date. Indexed Notes If this Note is an Indexed Principal Note, then the principal amount payable at Stated Maturity or earlier redemption or retirement is determined by reference to the amount designated on the face hereof or in the pricing supplement attached hereto or delivered herewith as the Face Amount of this Note and by reference to the Index as described on the face hereof or in the pricing supplement attached hereto or delivered herewith. If this Note is an Indexed Principal Note, the principal amount payable at Stated Maturity or any earlier redemption or repayment of this Note may be different from the Face Amount. If a third party is appointed to calculate or announce the Index for a particular Indexed Note and the third party either suspends the calculation or announcement of 2 such Index or changes the basis upon which such Index is calculated in a manner that is inconsistent with the applicable pricing supplement, then the Company will select another third party to calculate or announce the Index. The agent or another affiliate of the Company may be either the original or successor third party selected by the Company. If for any reason such Index cannot be calculated on the same basis and subject to the same conditions and controls as applied to the original third party, then the indexed principal amount of this Note shall be calculated in the manner set forth in the applicable pricing supplement. Any determination of such third party shall in the absence of manifest error be binding on all parties. Payments in Currencies other than the Specified Currency Except as set forth below, if any payment in respect hereof is required to be made in a Specified Currency other than U.S. dollars and such currency is unavailable due to the imposition of exchange controls or other circumstances beyond the Company's control or is no longer used by the government of the country issuing such currency or for the settlement of transactions by public institutions of or within the international banking community, then such payment shall be made in U.S. dollars until such currency is again available or so used. The amount so payable in such foreign currency shall be converted into U.S. dollars on the basis of the most recently available Market Exchange Rate for such currency or as otherwise indicated on the face hereof or in the pricing supplement attached hereto or delivered herewith. Any payment made under such circumstances in U.S. dollars will not constitute an Event of Default under the Indenture. In the event of an official redenomination of the Specified Currency of this Note (other than as a result of European Monetary Union, but including, without limitation, an official redenomination of any such Specified Currency that is a composite currency), the obligations of the Company with respect to payments on this Note shall, in all cases, be deemed immediately following such redenomination to provide for the payment of that amount of redenominated currency representing the amount of such obligations immediately before such redenomination. This Note does not provide for any adjustment to any amount payable under this Note as a result of (i) any change in the value of the Specified Currency hereof relative to any other currency due solely to fluctuations in exchange rates or (ii) any redenomination of any component currency of any composite currency (unless such composite currency is itself officially redenominated). Dual Currency Notes If this Note is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as a Dual Currency Note, the Company may have a one time option of making all payments of principal, premium, if any, and interest on all Dual Currency Notes issued on the same day and having the same terms (a "Tranche"), which payments would otherwise be made in the Specified Currency of such Notes, in an optional currency (the "Optional Payment Currency"). Such option will be exercisable in whole but not in part on an "Option Election Date," which will be any one of the dates specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. If the Company makes such an election, the amount payable in the Optional Payment Currency shall be determined using the Designated Exchange Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. If such election is made, notice of such election shall be provided in accordance with "Notices", below, within two Business Days of the 3 Option Election Date and shall state (i) the first date, whether an Interest Payment Date and/or Stated Maturity, in which scheduled payments in the Optional Payment Currency will be made and (ii) the Designated Exchange Rate. Any such notice by the Company, once given, may not be withdrawn. The equivalent value in the Specified Currency of payments made after such an election may be less, at the then current exchange rate, than if the Company had made such payment in the Specified Currency. Renewable Notes If this Note is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as a Renewable Note, this Note will mature on an Interest Payment Date occurring in or prior to the twelfth month following the Original Issue Date of this Note (the "Initial Maturity Date") unless the term of all or any portion of this Note is renewed in accordance with the following procedures: On the Interest Payment Date occurring in the sixth month (unless a different interval (the "Special Election Interval") is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith) prior to the Initial Maturity Date of this Note (the "Initial Renewal Date") and on the Interest Payment Date occurring in each sixth month (or in the last month of each Special Election Interval) after such Initial Renewal Date (each, together with the Initial Renewal Date, a "Renewal Date"), the term of this Note may be extended to the Interest Payment Date occurring in the twelfth month (or, if a Special Election Interval is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the last month in a period equal to twice the Special Election Interval) after such Renewal Date, if the Holder of this Note elects to extend the term of this Note or any portion thereof as described below. If the Holder does not elect to extend the term of any portion of the principal amount of this Note during the specified period prior to any Renewal Date, such portion will become due and payable on the Interest Payment Date occurring in the sixth month (or the last month in the Special Election Interval) after such Renewal Date (the "New Maturity Date"). The Holder may elect to renew the term of this Note, or if so specified, any portion thereof, by delivering a notice to such effect to any duly appointed paying agent not less than 15 nor more than 30 days prior to such Renewal Date, unless another period is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Such election will be irrevocable and will be binding upon each subsequent Holder of this Note. An election to renew the term of this Note may be exercised with respect to less than the entire principal amount of this Note only if so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith and then only in such principal amount, or any integral multiple in excess thereof, as is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Notwithstanding the foregoing, the term of this Note may not be extended beyond the Stated Maturity specified for this Note on the face hereof or in the pricing supplement attached hereto or delivered herewith. If the Holder does not elect to renew the term, this Note must be presented to any duly appointed paying agent and, as soon as practicable following receipt of such Note such paying agent shall issue in exchange therefor in the name of such Holder (i) a Note, in a principal amount equal to the principal amount of such exchanged Note for which no election to renew the term thereof was exercised, with terms identical to those specified on such exchanged Note (except that such Note shall have a fixed, nonrenewable Stated Maturity on the New Maturity Date) and (ii) if an election to renew is made with respect to less than the full principal amount of such Holder's Note, 4 such paying agent shall issue in exchange for such Note in the name of such Holder a replacement Renewable Note, in a principal amount equal to the principal amount of such exchanged Note for which the election to renew was made, with terms otherwise identical to the exchanged Note. Extension of Stated Maturity If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Stated Maturity of this Note may be extended at the option of the Company for one or more periods of whole years specified on the face hereof or in the pricing supplement attached hereto or delivered herewith (each an "Extension Period") from one to five years up to but not beyond the date (the "Final Maturity") set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith. The Company may exercise such option by notifying the Trustee for this Note at least 45 but not more than 60 days prior to the original Stated Maturity of this Note. If the Company exercises such option, the Trustee will mail to the Holder of this Note not later than 40 days prior to the original Stated Maturity notice (the "Extension Notice") in accordance with "Notices" below. The Extension Notice will set forth (i) the election of the Company to extend the Stated Maturity, (ii) the new Stated Maturity, (iii) the Interest Rate applicable to the Extension Period, and (iv) the provisions, if any, for redemption during such Extension Period, including the date or dates on which or the period or periods during which and the price or prices at which such redemption may occur during the Extension Period. Upon the provision by the Trustee of an Extension Notice to the Holder hereof, the Stated Maturity of this Note shall be extended automatically, and, except as modified by the Extension Notice and as described in the next paragraph, this Note will have the same terms as prior to the provision of such Notice. Notwithstanding the foregoing, not later than 20 days prior to the original Stated Maturity of this Note, the Company may, at its option, revoke the Interest Rate provided for in the Extension Notice and establish a higher Interest Rate for the Extension Period by causing the Trustee to provide notice of such higher Interest Rate, as the case may be, in accordance with "Notices" below. Such notice shall be irrevocable. All Notes with respect to which the Stated Maturity is extended will bear such higher Interest Rate for the Extension Period, whether or not tendered for repayment. If the Company extends the Stated Maturity of this Note, the Holder will have the option to elect repayment of this Note by the Company on the original Stated Maturity at a price equal to the principal amount hereof, plus interest accrued to such date. In order to obtain repayment on such original Stated Maturity once the Company has extended the Stated Maturity hereof, the Holder must follow the procedures set forth below for optional repayment, except that the period for delivery or notification to the Paying Agent shall be at least 25 but not more than 35 days before the original Stated Maturity, and except that if the Holder has tendered this Note for repayment pursuant to an Extension Notice, the Holder may, by written notice to the Trustee, revoke such tender for repayment until the close of business on the tenth calendar day before the original Stated Maturity. Optional Redemption, Repayment and Repurchase If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Company may, at its option, redeem this Note in whole or in part, on the date or dates (each an "Optional Redemption Date") specified herein, at the price (the "Redemption Price") (together with accrued interest to such Optional Redemption Date) specified herein. If the Company elects to exercise such option with respect to this Note, at least 30 days prior to the date of 5 redemption, such Trustee shall provide notice of such redemption to the Holder hereof in accordance with "Notices" below. In the event of redemption of this Note in part only, a new Note or Notes for the unredeemed portion hereof shall be issued to the Holder hereof upon the cancellation hereof. Notes redeemed prior to Stated Maturity must be presented for payment together with all unmatured Coupons, if any, appertaining thereto, failing which the amount of any missing unmatured Coupon will be deducted from the sum due for payment. If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, this Note will be repayable prior to Stated Maturity at the option of the Holder on the Optional Repayment Dates shown on the face hereof or in the pricing supplement attached hereto or delivered herewith at the Optional Repayment Prices shown on the face hereof or in the pricing supplement attached hereto or delivered herewith, together with accrued interest to the date of repayment. Notes that are to be repaid prior to Stated Maturity must be presented for payment together with all unmatured Coupons, if any, appertaining thereto, failing which the amount of any missing unmatured Coupon will be deducted from the sum due for payment. In order for this Note to be repaid, the Principal Paying Agent must receive this Note at least 30 but not more than 45 days prior to an Optional Repayment Date. Any tender of this Note for repayment (except pursuant to a Reset Notice or an Extension Notice) shall be irrevocable. The repayment option may be exercised by the Holder of this Note for less than the entire principal amount of this Note; provided that the principal amount of this Note remaining outstanding after repayment is an authorized denomination. Upon such partial repayment, this Note shall be canceled and a new Note or Notes for the remaining principal amount hereof shall be issued to the Holder of this Note. Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, this Note will not be subject to any sinking fund. Notwithstanding anything herein to the contrary, if this Note is a Discount Note, the amount payable in the event of redemption or repayment prior to the Stated Maturity hereof (other than pursuant to an optional redemption by the Company at a stated Redemption Price), in lieu of the principal amount due at the Stated Maturity hereof, shall be the Amortized Face Amount of this Note as of the redemption date or the date of repayment, as the case may be. The Amortized Face Amount of this Note on any date shall be the amount equal to (i) the Issue Price set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith plus (ii) that portion of the difference between such Issue Price and the stated principal amount of such Note that has accrued by such date at (x) the Bond Yield to Maturity set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith or (y) if so specified, the Bond Yield to Call set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith (computed in each case in accordance with generally accepted United States bond yield computation principles); provided, however, that in no event shall the Amortized Face Amount of a Note exceed its stated principal amount. The Bond Yield to Call listed on the face of this Note or in the pricing supplement attached hereto or delivered herewith shall be computed on the basis of the first occurring Optional Redemption Date with respect to such Note and the amount payable on such Optional Redemption Date. In the event that such Note is not redeemed on such first occurring Optional Redemption Date, the Bond Yield to Call with respect to such Note shall be recomputed on such Optional Redemption Date on the basis of the next occurring Optional Redemption Date and the amount payable on such Optional Redemption Date, and shall continue to be so recomputed on each succeeding Optional Redemption Date until the Note is so redeemed. 6 Tax Redemption The Bearer Notes of a series may be redeemed at the option of the Company in whole, but not in part, at any time on giving at least 30 but not more than 60 days' notice in accordance with "Notices" below (which notice shall be irrevocable), at the respective Redemption Prices thereof, if the Company has or will become obligated to pay additional interest on such Notes as described in the following paragraph as a result of any change in, or amendment to, the laws (or any regulations or rulings promulgated thereunder) of the United States or any political subdivision or taxing authority thereof or therein, or any change in the application or official interpretation of such laws, regulations or rulings, which change or amendment becomes effective on or after their respective Original Issue Dates, and such obligation cannot be avoided by the Company taking reasonable measures available to it; provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Company would be obligated to pay such additional interest were a payment in respect of such Notes then due. Prior to the publication of any notice of redemption pursuant to this paragraph, the Company shall deliver to the Trustee for the Notes to be redeemed a certificate stating that the Company is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Company so to redeem have occurred, and an opinion of independent counsel to the effect that the Company has or will become obligated to pay such additional interest as a result of such change or amendment. Payment of Additional Interest The Company will, subject to the exceptions and limitations set forth below, pay as additional interest to the Holder of this Note or any Coupon that is a United States Alien (as defined below) such amounts as may be necessary so that every net payment on this Note or such Coupon, after deduction or withholding for or on account of any present or future tax, assessment or other governmental charge imposed upon or as a result of such payment by the United States (or any political subdivision or taxing authority thereof or therein), will not be less than the amount provided in this Note or such Coupon to be then due and payable. However, the Company will not be required to make any such payment of additional interest to such Holder for or an account of: (a) any tax, assessment or other governmental charge that would not have been imposed but for (i) the existence of any present or former connection between such Holder (or between a fiduciary, settlor or beneficiary of, or a Person holding a power over, such Holder, if such Holder is an estate or a trust, or a member or shareholder of such Holder, if such Holder is a partnership or a corporation) and the United States, including, without limitation, such Holder (or such fiduciary, settlor, beneficiary, Person holding a power, member or shareholder) being or having been a citizen or resident thereof or being or having been engaged in trade or business or present therein or having or having had a permanent establishment therein or (ii) such Holder's past or present status as a passive foreign investment company, a personal holding company, foreign personal holding company, a controlled foreign corporation for United States tax purposes or private foundation or other tax-exempt organization with respect to the United States or as a corporation that accumulates earnings to avoid United States federal income tax; (b) any estate, inheritance, gift, sales, transfer or personal property tax or any similar tax, assessment or other governmental charge; 7 (c) any tax, assessment or other governmental charge that would not have been imposed but for the presentation by the Holder of this Note or such Coupon for payment more than 15 days after the date on which such payment became due and payable or on which payment thereof was duly provided for, whichever occurred later; (d) any tax, assessment or other governmental charge that is payable otherwise than by deduction or withholding from a payment on this Note or such Coupon; (e) any tax, assessment or other governmental charge required to be deducted or withheld by any Paying Agent from a payment on this Note or such Coupon, if such payment can be made without such deduction or withholding by any other Paying Agent; (f) any tax, assessment or other governmental charge imposed on a Holder that actually or constructively owns ten percent or more of the combined voting power of all classes of stock of the Company or is a controlled foreign corporation related to the Company through stock ownership; nor shall such additional interest be paid with respect to a payment on this Note or such Coupon to a Holder that is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner would not have been entitled to the additional interest had such beneficiary, settlor, member or beneficial owner been the Holder of this Note or such Coupon. The term "United States Alien" means any person who, for United States federal income tax purposes, is a foreign corporation, a nonresident alien individual, a nonresident alien fiduciary of a foreign estate or trust, or a foreign partnership one or more of the members of which is, for United States federal income tax purposes, a foreign corporation, a nonresident alien individual or a nonresident alien fiduciary of a foreign estate or trust. Special Tax Redemption If the Company shall determine that any payment made outside the United States by the Company or any of its Paying Agents in respect of this Note or any Coupon appertaining thereto would, under any present or future laws or regulations of the United States, be subject to any certification, documentation, information or other reporting requirement of any kind, the effect of which requirement is the disclosure to the Company, any Paying Agent or any governmental authority of the nationality, residence or identity of a beneficial owner that is a United States Alien (other than such a requirement (a) that would not be applicable to a payment made by the Company or any one of its Paying Agents (i) directly to the beneficial owner or (ii) to a custodian, nominee or other agent of the beneficial owner or (b) that can be satisfied by such custodian, nominee or other agent certifying to the effect that the beneficial owner is a United States Alien; provided that, in any case referred to in clause (a) (ii) or (b), payment by the custodian, nominee, or agent to the beneficial owner is not otherwise subject to any such requirement), then the Company shall elect either (x) to redeem such Note in whole, but not in part, at its Redemption Price, or (y) if the conditions described in the next succeeding paragraph are satisfied, to pay the additional interest specified in such paragraph. The Company shall make such determination as soon as practicable and publish prompt notice thereof stating the effective date of such certification, documentation, information or other reporting requirement, whether the Company elects to redeem the Note or to pay the additional interest specified in the next succeeding paragraph and (if applicable) the last date by which the redemption of the Note must take place. 8 If this Note is to be redeemed as described in this paragraph, the redemption shall take place on such date, not later than one year after the publication of the determination notice, as the Company shall specify by notice given to the Trustee at least 60 days before the redemption date. Notice of such redemption shall be given to the Holder of this Note at least 30 but not more than 60 days prior to the redemption date. Notwithstanding the foregoing, the Company shall not so redeem the Note if the Company shall subsequently determine, at least 30 days prior to the redemption date, that subsequent payments on the Note would not be subject to any such certification, documentation, information or other reporting requirement, in which case the Company shall publish prompt notice of such subsequent determination and any earlier redemption notice given shall be revoked and of no further effect. Prior to the publication of any determination notice, the Company shall deliver to the Trustee for the Note to be redeemed a certificate stating that the Company is obligated to make such determination and setting forth a statement of facts showing that the conditions precedent to the obligation of the Company to redeem the Note or to pay the additional interest specified in the next succeeding paragraph have occurred, and an opinion of independent counsel to the effect that such conditions have occurred. If and so long as the certification, documentation, information or other reporting requirement referred to in the preceding paragraph would be fully satisfied by payment of a backup withholding tax or similar charge, the Company may elect to pay as additional interest such amounts as may be necessary so that every net payment made outside the United States following the effective date of such requirement by the Company or any of its Paying Agents of which the beneficial owner is a United States Alien (but without any requirement that the nationality, residence or identity of such beneficial owner be disclosed to the Company, any paying agent or any governmental authority), after deduction or withholding for or on account of such backup withholding tax or similar charge (other than a backup withholding tax or similar charge that (i) would not be applicable in the circumstances referred to in the parenthetical clause of the first sentence of the first paragraph of this section or (ii) is imposed as a result of presentation of this Note for payment more than 15 days after the date on which such payment became due and payable or on which payment thereof was duly provided for, whichever occurred later), will not be less than the amount then due and payable. If the Company elects to pay additional interest, then the Company shall have the right thereafter to redeem this Note at any time in whole, but not in part, at the Redemption Price, subject to the provisions described above. If the Company elects to pay additional interest and the condition specified above should no longer be satisfied, then the Company shall redeem this Note in whole, but not in part, at the Redemption Price, subject to the provisions of this section. Any such redemption payments made by the Company shall be subject to the continuing obligation of the Company to pay additional interest as described above. 9 Paying Agents The Company has initially appointed as its Paying Agents for Bearer Notes of this Series the offices listed below: Principal Paying Agent: Citibank, N.A. 5 Carmelite Street London, England EC4Y OPA Paying Agent: Kredietbank S.A. Luxembourgeoise 43 Boulevard Royal Luxembourg Luxembourg City 2955 The Company reserves the right at any time to vary or terminate the appointment of any Paying Agent and to appoint additional or other Paying Agents and to approve any change in the office through which any Paying Agent acts, provided that there will at all times be a Paying Agent (which may be the Trustee) in at least one city in Europe, which, so long as Bearer Notes are listed on the Luxembourg Stock Exchange and the rules of that exchange shall so require, shall include Luxembourg. Notice of any such termination or appointment and of any changes in the specified offices of the Trustee or any Paying Agent will be given to the Holder hereof as described below. Notices All notices to Holders of this Note will be deemed to have been duly given if published on two separate Business Days in a leading London daily newspaper (which is expected to be the Financial Times) and, with respect to any series of Bearer Notes that may be listed on the Luxembourg Stock Exchange, if such exchange so requires, in Luxembourg in a newspaper of general circulation in Luxembourg (which is expected to be the Luxemburger Wort). Such notices shall be deemed to have been given on the date of the first such publication. Other Terms If an Event of Default with respect to the Notes shall have occurred and be continuing, the principal of all Notes may be declared due and payable in the manner and with the effect provided in the Indenture. As provided in the Indenture and subject to certain limitations therein set forth, this Note is exchangeable for a like aggregate principal amount of Bearer Notes of different authorized denominations, as requested by the Person surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note 10 is registered as the Holder hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. If an Event of Default with respect to the Debt Securities of this series shall have occurred and be continuing, the principal of all the Debt Securities of this series may be declared due and payable in this manner and with the effect provided in the Indenture. In case this Note or any Coupon shall at any time become mutilated, destroyed, stolen or lost, it may be replaced at the specified office of the Principal Paying Agent in London; or, with respect to any series of Bearer Notes that are listed on the Luxembourg Stock Exchange, at the specified office of the Paying Agent in Luxembourg, upon payment by the claimant of such expenses as may be incurred in connection therewith and, in the case of destruction, theft or loss, on such terms as to evidence and indemnity as the Company or the Trustee may reasonably require. Mutilated or defaced Bearer Notes or Coupons must be surrendered before replacements will be issued. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Debt Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of Debt Securities at the time outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Debt Securities of any series at the time outstanding, on behalf of the Holders of all the Debt Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Debt Security shall be conclusive and binding upon such Holder and upon all future Holders of this Debt Security and of any Debt Security issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon the Debt Security. Holders of Debt Securities may not enforce their rights pursuant to the Indenture or the Note except as provided in the Indenture. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed. The Company may, without the consent of the Holders of the Notes, consolidate with, merge into, or transfer substantially all of its assets to, a corporation that is a U.S. Person, provided that the successor corporation assumes all obligations of the Company under the Notes and certain other conditions are met, including a waiver by the successor corporation of any right to redeem the Notes under circumstances in which the successor corporation would be entitled to redeem the Notes but the Company would not have been entitled to do so. Except as provided above, the obligation to pay the principal hereof (and premium, if any) and interest hereon in the designated currency of payment is of the essence. To the fullest extent possible under applicable law, judgments in respect of this Note shall be given in such currency. The obligation of the Company to make such payments in the designated currency of payment shall, notwithstanding any payment in any other currency (whether pursuant to a judgment or otherwise), be discharged only to the extent of the amount in the designated currency of payment 11 that the Holder of this Note may, in accordance with normal banking procedures, purchase with the sum paid in such other currency (after any premium and cost of exchange) on the business day in the country of issue of the designated currency of payment or in the international banking community (in the case of a composite currency) immediately following the day on which such Holder receives such payment. If the amount in the designated currency of payment that may be so purchased is for any reason less than the amount originally due, the Company shall, as a separate and independent obligation, pay such additional amounts in the designated currency of payment as may be necessary to compensate for any such shortfall. This Note shall be deemed to be a contract made and to be performed solely in the State of New York and for all purposes be governed by, and construed in accordance with, the laws of said State without regard to the conflicts of law rules of said State. All terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in the Indenture. 12 PRINCIPAL AMOUNT OR FACE AMOUNT BEARER $_______________ NO. FL___ CUSIP:__________ CITIGROUP GLOBAL MARKETS HOLDINGS INC. COMMON CODE MEDIUM-TERM SENIOR NOTE, SERIES D DUE NINE MONTHS OR MORE FROM DATE OF ISSUE (FLOATING OR INDEXED RATE) ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTION 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE. IF APPLICABLE, THE "TOTAL AMOUNT OF OID" AND "YIELD TO MATURITY" SET FORTH BELOW WILL BE COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE UNITED STATES FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES Issue Price: Original Issue Date: Initial Interest Rate: Stated Maturity: Specified Currency (If other than U.S. dollars): Authorized Denominations: (If other than as set forth in the Prospectus Supplement) Dual Currency Note: [ ] Yes (see attached) [ ] No Optional Payment Currency: Designated Exchange Rate: Base Rate: [ ] CD Rate [ ] CommercialPaper Rate [ ] Federal Funds Rate [ ] LIBOR Telerate [ ] LIBOR Reuters [ ] Treasury Rate [ ] Treasury Rate [ ] Prime Rate Constant Maturity [ ] Eleventh District [ ] EURIBOR Cost of Funds Rate [ ] Other (see attached) Interest Reset Period Index Maturity: or Interest Reset Dates: Interest Payment Dates: Accrue to Pay: [ ] Yes [ ] No Indexed Principal Note: [ ] Yes (see attached) [ ] No Floating Rate: [ ] Indexed Interest [ ] (see Rate: attached) Spread Multiplier: Spread (+/-): Spread Reset: [ ] The Spread or Spread Multiplier may not be changed prior to Stated Maturity. [ ] The Spread or Spread Multiplier may be changed prior to Stated Maturity (see attached). Optional Reset Dates (if applicable): Maximum Interest Rate: Minimum Interest Rate: Inverse Floating Rate Note: [ ] Yes (see attached) [ ] No Initial Fixed Interest Rate: Reset Fixed Reference Rate Floating Rate / Fixed Rate Note: [ ] Yes (see attached) [ ] No Amortizing Note: [ ] Yes [ ] No Amortization Schedule: Optional Redemption: [ ] Yes [ ] No Optional Redemption Dates: Redemption Prices: Bond Yield to Maturity: Bond Yield to Call: Optional Repayment: [ ] Yes [ ] No Optional Repayment Dates: Optional Repayment Prices: 2 Optional Extension of [ ] Yes [ ] No Stated Maturity: Final Maturity: Discount Note: [ ] Yes [ ] No Total Amount of OID: Yield to Maturity: Renewable Note: [ ] Yes (see attached) [ ] No Initial Maturity Date: Special Election Interval (if applicable): Amount (if less than entire principal amount) as to which election may be exercised: If the Specified Currency of this Note is Pounds sterling, the following applies: This instrument constitutes [ ] commercial paper [ ] a shorter term debt security [ ] a longer term debt security issued in accordance with regulations made under section 4 of the Banking Act 1987. The issuer of this Note is Citigroup Global Markets Holdings Inc., which is not an authorized institution or a European authorized institution (as such terms are defined in the Banking Act 1987 (Exempt Transactions) Regulation 1997). Repayment of the principal and payment of any interest or premium in connection with this Note has not been guaranteed. IF THE SPECIFIED CURRENCY OF THIS NOTE IS POUNDS STERLING, THE FOLLOWING APPLIES: THIS NOTE IS ISSUED IN ACCORDANCE WITH THE REGULATIONS MADE UNDER SECTION 4 OF THE BANKING ACT 1987. 3 CITIGROUP GLOBAL MARKETS HOLDINGS INC., a corporation duly organized and existing under the laws of the State of New York (herein referred to as the "Company"), for value received hereby promises to pay to bearer, upon presentation and surrender hereof, (a) the Principal Amount or, in the case of an Indexed Principal Note, the Face Amount adjusted by reference to prices, changes in prices, or differences between prices, of securities, currencies, intangibles, goods, articles or commodities or by such other objective price, economic or other measures (an "Index") as described on the face hereof or in the pricing supplement attached hereto or delivered herewith, in the Specified Currency on the Stated Maturity shown above or earlier if and to the extent so provided herein, and (b) accrued interest on the Principal Amount then outstanding (or, in the case of an Indexed Principal Note, the Face Amount then outstanding): (i) if this is a Floating Rate Note, at the Initial Interest Rate shown above from the Original Issue Date shown above until the first Interest Reset Date shown above following the Original Issue Date and thereafter at the Base Rate shown above, adjusted by the Spread or Spread Multiplier, if any, shown above, determined in accordance with the provisions hereof, (ii) if this is an Indexed Rate Note, at a rate determined by reference to an index as described herein, (iii) if this is an Inverse Floating Rate Note, at the Initial Interest Rate shown above from the Original Issue Date shown above until the first Interest Reset Date shown above following the Original Issue Date and thereafter at the Inverse Floating Rate, as determined in accordance with the provisions hereof, or (iv) if this is a Floating Rate / Fixed Rate Note, at a rate determined as described herein, to the bearer of the interest coupons attached hereto (the "Coupons") upon surrender thereof as they shall severally mature at the rates per annum and on the dates, determined as described on the reverse hereof, until, in each case, the Principal Amount or the Face Amount is paid or duly provided for in accordance with the terms hereof. For purposes of this Note, "Business Day" means: (i) with respect to any Bearer Note, any day that is not a Saturday or Sunday and that is (i) not a day on which banking institutions are authorized or required by law or regulation to be closed in (a) The City of New York, (b) London, England, (c) the place in which this Note or any Coupon is presented for payment or (d) if the Specified Currency (as defined below) is other than U.S. dollars, the financial center of the country issuing the Specified Currency (which in the case of the Euro shall be Brussels, Belgium); (ii) if the Base Rate specified above is LIBOR, any such day on which dealings in deposits in the Specified Currency are transacted in the London interbank market (a "London Business Day"); (iii) with respect to any determination by the exchange rate agent (as defined below) of an exchange rate pursuant to notes having a specified currency other than U.S. dollars, any such day on which banking institutions and foreign exchange markets settle payments in New York City and London (an "Exchange Rate Business Day"); (iv) with respect to Bearer Notes having a specified currency other than U.S. Dollars only, other than Bearer Notes denominated in Euros, any day that, in the principal financial center (as defined below) of the country of the Specified Currency, is not a day on which banking institutions generally are authorized or obligated by law to close; and (v) with respect to EURIBOR Notes and Notes denominated in Euros, a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer ("TARGET") System is open (a "Target Business Day"). As used above, a "principal financial center" means the capital city of the country issuing the specified currency. However, with respect to U.S. dollars, Australian dollars, Canadian dollars, and Swiss francs, the principal financial center shall be The City of New York, Sydney, Toronto, and Zurich, respectively. If this Note is an Amortizing Note as shown on the face hereof or in the pricing supplement attached hereto or delivered herewith, a portion or all the principal amount of the Note is 4 payable prior to Stated Maturity in accordance with a schedule, by application of a formula, or by reference to an index (as described above). Except under certain circumstances that may apply if this Note has a specified currency other than U.S. dollars, payments of the principal hereof and any premium and interest hereon will be made only in the Specified Currency. Payments in respect of this Note and any Coupon will be made only against surrender of this Note or such Coupon, at the offices of the Paying Agents outside the United States listed on the reverse hereof. At the direction of the Holder of this Note or any Coupon, and subject to applicable laws and regulations, such payments will be made by check drawn on a bank in The City of New York (in the case of U.S. dollar payments) or outside the United States (in the case of payments in a currency other than U.S. dollars) mailed to an address outside the United States furnished by the Holder hereof or, at the option of the Holder hereof, by wire transfer (pursuant to written instructions supplied by the Holder hereof) to an account maintained by the payee with a bank located outside the United States. No payment in respect of this Note or any Coupon will be made upon presentation of this Note or such Coupon at any office or agency of the Trustee or any other paying agency maintained by the Company in the United States, nor will any such payment be made by transfer to an account, or by mail to an address, in the United States. Notwithstanding the foregoing, if U.S. dollar payments in respect of this Note or any Coupons at the offices of all Paying Agents outside the United States become illegal or are effectively precluded because of the imposition of exchange controls or similar restrictions on the full payment or receipt of such amounts in U.S. dollars, the Company will appoint an office or agency (which may be the Trustee) in the United States at which such payments may be made. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF AND IN ANY PRICING SUPPLEMENT ATTACHED HERETO OR DELIVERED HEREWITH, AND SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE. This Note shall not become valid or obligatory for any purpose unless and until this Note has been authenticated by Citibank, N.A., or its successor, as authentication agent. 5 IN WITNESS WHEREOF, the Company has caused this Note to be executed under its corporate seal. Dated: CITIGROUP GLOBAL MARKETS HOLDINGS INC. By ____________________________________ Authorized Officer [Seal] Attest ________________________________ Assistant Secretary CERTIFICATE OF AUTHENTICATION This is one of the Notes issued under the within-mentioned Indenture. Dated: CITIBANK, N.A., as authentication agent By ___________________________________ Authorized Signatory 6 (REVERSE OF SECURITY) CITIGROUP GLOBAL MARKETS HOLDINGS INC. MEDIUM-TERM SENIOR NOTE, SERIES D DUE NINE MONTHS OR MORE FROM DATE OF ISSUE (FLOATING OR INDEXED RATE) General This Note is one of a series of duly authorized debt securities of the Company (the "Debt Securities") issued or to be issued in one or more series under an indenture, dated as of December 1, 1988, as amended (the "Indenture"), between the Company and Bank One Trust Company, N.A., as successor trustee (the "Trustee," which term includes any successor Trustee under the Indenture) to which indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Debt Securities and of the terms upon which the Debt Securities are, and are to be, authenticated and delivered. The U.S. dollar equivalent of the public offering price or purchase price of Notes denominated in currencies other than U.S. dollars will be determined by the Company or its agent, as exchange rate agent for the Notes (the "Exchange Rate Agent") on the basis of the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York (the "Market Exchange Rate") for such currencies on the applicable issue dates. The Notes are in bearer form with coupons. Unless otherwise specified in the applicable pricing supplement, the authorized denominations of Bearer Notes denominated in U.S. dollars will be U.S.$10,000 and any larger amount that is an integral multiple of U.S.$1,000. The authorized denominations of Bearer Notes denominated in a currency other than U.S. dollars will be unless otherwise specified herein the approximate equivalents thereof in the Specified Currency. Floating Rate Notes Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, if this Note is a Floating Rate Note, this Note will bear interest from its Original Issue Date to, but not including, the first Interest Reset Date (as defined below) at the Initial Interest Rate set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith. Thereafter, the interest rate hereon for each Interest Reset Period will be determined by reference to the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, plus or minus the Spread, if any, or multiplied by the Spread Multiplier, if any, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. The Base Rates that may be specified on the face hereof or in the pricing supplement attached hereto or delivered herewith are LIBOR, the Commercial Paper Rate, the Treasury Rate, the Federal Funds Rate, the CD Rate, the Prime Rate, the Eleventh District Cost of Funds Rate, EURIBOR or any other Base Rate specified on the face hereof. "H.15(519)" means the publication entitled "Statistical Release H.15(519), Selected Interest Rates" or any successor publication, published by the Board of Governors of the Federal Reserve System. 1 "H.15 Daily Update" means the daily update of the Board of Governors of the Federal Reserve System at http://www.bog.frb.fed.us/releases/H15/update or any successor site or publication. "Calculation Date," where applicable, means the date on which the Calculation Agent is to calculate the interest rate for the Notes which shall be the earlier of (1) the tenth calendar day after the related Rate Determination Date, or if any such day is not a Business Day, the next succeeding business day or (2) the Business Day preceding the applicable Interest Payment Date or the Stated Maturity, as the case may be. As specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, this Note may also have either or both of the following (in each case expressed as a rate per annum on a simple interest basis): (i) a maximum limitation, or ceiling, on the rate at which interest may accrue during any interest period ("Maximum Interest Rate") and/or (ii) a minimum limitation, or floor, on the rate at which interest may accrue during any interest period ("Minimum Interest Rate"). In addition to any Maximum Interest Rate that may be specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the interest rate will in no event be higher than the maximum rate permitted by applicable law, as the same may be modified by United States law of general application. The Company will appoint, and enter into an agreement with, agents (each, a "Calculation Agent") to calculate interest rates on this Note. All determinations of interest rates by the Calculation Agent shall, in the absence of manifest error, be conclusive for all purposes and binding on the Holder hereof. Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, Citibank, N.A. shall be the Calculation Agent for this Note. At the request of the Holder hereof, the Calculation Agent will provide the interest rate then in effect and, if determined, the interest rate that will become effective on the next Interest Reset Date. The interest rate hereon will be reset daily, weekly, monthly, quarterly, semiannually or annually (such period being the "Interest Reset Period" specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, and the first day of each Interest Reset Period being an "Interest Reset Date"). Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Interest Reset Dates will be as follows: (i) if this Note resets daily, each Business Day; (ii) if this Note (unless this Note is a Treasury Rate Note) resets weekly, Wednesday of each week; (iii) if this Note is a Treasury Rate Note that resets weekly, Tuesday of each week (except as provided below under "Determination of Treasury Rate"); (iv) if this Note resets monthly, the third Wednesday of each month (with the exception of monthly reset Eleventh District Cost of Funds Rate Notes, which reset on the first calendar day of each month); (v) if this Note is an Eleventh District Cost of Funds Rate Note that resets monthly, the first calendar day of each month; (vi) if this Note resets quarterly, the third Wednesday of March, June, September and December of each year; (vii) if this Note resets semiannually, the third Wednesday of the two months of each year specified on the face hereof or in the pricing supplement attached hereto or delivered herewith; and (viii) if this Note resets annually, the third Wednesday of the month of each year specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. If an Interest Reset Date would otherwise be a day that is not a Business Day, such Interest Reset Date shall be postponed to the next succeeding Business Day, except that, if the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is LIBOR or EURIBOR and such Business Day is in the next succeeding calendar month, such Interest 2 Reset Date shall instead be the immediately preceding Business Day. If an auction of direct obligations of United States Treasury Bills falls on a day that is an Interest Reset Date for Treasury Rate Notes, the Interest Reset Date shall be the succeeding Business Day. Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the interest payable hereon on each Interest Payment Date shall be the accrued interest from and including the Original Issue Date or the last date to which interest has been paid, as the case may be, to but excluding such Interest Payment Date. If more than one Interest Reset Date occurs during any period for which accrued interest is being calculated, accrued interest shall be calculated by multiplying the principal amount hereof (or if this Note is an Indexed Principal Note, the Face Amount specified on the face hereof or in the pricing supplement attached hereto or delivered herewith) by an accrued interest factor. Such accrued interest factor will be computed by adding the interest factors calculated for each day in the period for which accrued interest is being calculated. The interest factor (expressed as a decimal calculated to seven decimal places without rounding) for each such day will be computed, unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, by dividing the interest rate in effect on such day by 360, if the Base Rate specified on the face hereof is the Commercial Paper Rate, the Federal Funds Rate, the CD Rate, the Prime Rate, the Eleventh District Cost of Funds Rate, LIBOR, or EURIBOR, or by the actual number of days in the year, if the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is the Treasury Rate. In all other cases, accrued interest shall be calculated by multiplying the principal amount hereof (or if this Note is an Indexed Principal Note, the Face Amount specified on the face hereof) by the interest rate in effect during the period for which accrued interest is being calculated, and multiplying that product by the quotient obtained by dividing the number of days in the period for which accrued interest is being calculated by 360, if the Base Rate specified on the face hereof is the Commercial Paper Rate, the Federal Funds Rate, the CD Rate, the Prime Rate, the Eleventh District Cost of Funds Rate, LIBOR, or EURIBOR, or by the actual number of days in the year, if the Base Rate specified on the face hereof is the Treasury Rate. For purposes of making the foregoing calculations, the interest rate in effect on any Interest Reset Date will be the applicable rate as reset on such date. Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, all percentages resulting from any calculation of the rate of interest hereof will be rounded, if necessary, to the nearest 1/100,000 of 1% (.0000001), with five one-millionths of a percentage point rounded upward, and all currency amounts used in or resulting from such calculation will be rounded to the nearest one-hundredth of a unit (with .005 of a unit being rounded upward). Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, interest will be payable as follows: (i) if this Note resets daily, weekly or monthly (other than Eleventh District Cost of Funds Rate Notes), interest will be payable on the third Wednesday of each month or on the third Wednesday of March, June, September and December of each year, as specified on the face hereof or in the pricing supplement attached hereto or delivered herewith or; (ii) in the case of Eleventh District Cost of Funds Rate Notes, interest will be payable on the first calendar day of each March, June, September and December; (iii) if this Note resets quarterly, interest will be payable on the third Wednesday of March, June, September, and December of each year; (iv) if this Note resets semiannually, interest will be payable on the third Wednesday of each of two months of each year specified on the face hereof or in the pricing 3 supplement attached hereto or delivered herewith; and (v) if this Note resets annually, interest will be payable on the third Wednesday of the month of each year specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, and in each case at Maturity (each such day being an "Interest Payment Date"). If an Interest Payment Date would otherwise fall on a day that is not a Business Day, such Interest Payment Date shall be postponed to the next succeeding Business Day, except that, if the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is LIBOR or EURIBOR and such Business Day is in the next succeeding calendar month, such Interest Payment Date shall instead be the immediately preceding Business Day; provided, however, if with respect to any Note for which "Accrue to Pay" is not specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, if an Interest Payment Date with respect to such Note would otherwise be a day that is not a Business Day, such Interest Payment Date shall not be postponed; provided, further, that any payment required to be made in respect of a Note that does not Accrue to Pay on a date (including the day of Stated Maturity) that is not a Business Day for such Note need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on such date, and no additional interest shall accrue as a result of such delayed payment. Subject to applicable provisions of law and except as specified herein, on each Interest Reset Date the rate of interest shall be the rate determined in accordance with the provisions of the applicable heading below. Determination of CD Rate If the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is the CD Rate, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to the CD Rate and the Spread or Spread Multiplier, if any, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. The "CD Rate" for each Interest Reset Period shall be the rate as of the second Business Day prior to the Interest Reset Date for such Interest Reset Period (a "CD Rate Determination Date") for negotiable U.S. dollar certificates of deposit having the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as published in H.15(519) under the heading "CDs (Secondary Market)". In the event that such rate is not published prior to 3:00 p.m., New York City time, on the Calculation Date (as defined above) pertaining to such CD Rate Determination Date, then the "CD Rate" for such Interest Reset Period will be the rate on such CD Rate Determination Date for negotiable U.S. dollar certificates of deposit of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as published in the H.15 Daily Update, or other recognized electronic source used for the purpose of displaying the applicable rate, under the heading "CDs (Secondary Market)." If by 3:00 p.m., New York City time, on such Calculation Date such rate is not yet published in either H.15(519) or H.15 Daily Update, then the "CD Rate" for such Interest Reset Period will be calculated by the Calculation Agent and will be the arithmetic mean of the secondary market offered rates as of 10:00 a.m., New York City time, on such CD Rate Determination Date of three leading nonbank dealers in negotiable U.S. dollar certificates of deposit in The City of New York selected by the Calculation Agent for negotiable U.S. dollar certificates of deposit of major United States money center banks of the highest credit standing (in the market for negotiable U.S. dollar certificates of deposit) with a remaining maturity closest to the Index Maturity on the face hereof or in the pricing supplement attached hereto or delivered herewith in a denomination of $5,000,000; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting offered rates as mentioned in this sentence, the CD Rate for such Interest Reset Period will be the same as the CD Rate for the 4 immediately preceding Interest Reset Period (or, if there was no such Interest Reset Period, the Initial Interest Rate). Determination of Commercial Paper Rate If the Base Rate shown on the face hereof or in the pricing supplement attached hereto or delivered herewith is the Commercial Paper Rate, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to the Commercial Paper Rate and the Spread or Spread Multiplier, if any, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. The "Commercial Paper Rate" for each Interest Reset Period will be determined by the Calculation Agent as of the second Business Day prior to the Interest Reset Date for such Interest Reset Period (a "Commercial Paper Rate Determination Date") and shall be the Money Market Yield (as defined below) on such Commercial Paper Rate Determination Date of the rate for commercial paper having the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, as such rate shall be published in H.15(519) under the heading "Commercial Paper-Nonfinancial". In the event that such rate is not published prior to 3:00 p.m., New York City time, on the Calculation Date (as defined above) pertaining to such Commercial Paper Rate Determination Date, then the Commercial Paper Rate for such Interest Reset Period shall be the Money Market Yield on such Commercial Paper Rate Determination Date of the rate for commercial paper of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as published in the H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying the applicable rate, under the heading "Commercial Paper-Nonfinancial". If by 3:00 p.m., New York City time, on such Calculation Date such rate is not yet published in either H.15(519) or the H.15 Daily Update, then the "Commercial Paper Rate" for such Interest Reset Period shall be the Money Market Yield of the arithmetic mean of the offered rates as of 11:00 a.m., New York City time, on such Commercial Paper Rate Determination Date of three leading dealers of U.S. dollar commercial paper in The City of New York selected by the Calculation Agent for commercial paper of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith placed for an industrial issuer whose bonds are rated "AA" or the equivalent by a nationally recognized rating agency; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting offered rates as mentioned in this sentence, the "Commercial Paper Rate" for such Interest Reset Period will be the same as the Commercial Paper Rate for the immediately preceding Interest Reset Period (or, if there was no such Interest Reset Period, the Initial Interest Rate). "Money Market Yield" shall be the yield calculated in accordance with the following formula: D X 360 Money Market Yeild = ------------- X 100 360 - (D X M) where "D" refers to the applicable per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal and "M" refers to the actual number of days in the applicable Interest Rest Period specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. 5 Determination of Federal Funds Rate If the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is the Federal Funds Rate, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to the Federal Funds Rate and Spread or Spread Multiplier, if any, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. The "Federal Funds Rate" for each Interest Reset Period shall be the effective rate on the second Business Day prior to the Interest Reset Date for such Interest Reset Period (a "Federal Funds Rate Determination Date") for Federal Funds as published in H.15(519) under the heading "Federal Funds (Effective)" and displayed on Moneyline Telerate (or any successor service) on Page 120 (or any other page as may replace the specified Page on that service). In the event that such rate does not appear on Moneyline Telerate on Page 120 or is not published prior to 3:00 p.m., New York City time, on the Calculation Date (as defined above) pertaining to such Federal Funds Rate Determination Date, the "Federal Funds Rate" for such Interest Reset Period shall be the rate on such Federal Funds Rate Determination Date as published in the H.15 Daily Update under the heading "Federal Funds/Effective Rate," or other recognized electronic source used for the purpose of displaying the applicable rate. If by 3:00 p.m., New York City time, on such Calculation Date, such rate is not yet published, then the "Federal Funds Rate" for such Interest Reset Period shall be the arithmetic mean of the rates for the last transaction in overnight U.S. dollar federal funds arranged by three leading brokers of U.S. dollar Federal Funds transactions in New York City, selected by the Calculation Agent prior to 9:00 a.m., New York City time, on that Federal Funds Rate Determination Date; provided, however, that if the brokers so selected by the Calculation Agent are not quoting as mentioned above, the "Federal Funds Rate" for the Interest Reset Period will be the "Federal Funds Rate" in effect for the particular Federal Funds Rate Determination Date. If there was no Federal Funds Rate in effect for the Interest Reset Period, the "Federal Funds Rate" will be the initial interest rate. Determination of LIBOR If the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is LIBOR, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to LIBOR and the Spread or Spread Multiplier, if any, specified on the face hereof. "LIBOR" for each Interest Reset Period will be determined by the Calculation Agent as follows On the second London Business Day prior to the Interest Reset Date for such Interest Reset Period (a "LIBOR Determination Date"), the Calculation Agent for such LIBOR Note will determine the offered rates for deposits in the Specified Currency for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, which appear on the Designated LIBOR Page at approximately 11:00 a.m., London time, on such LIBOR Determination Date. "Designated LIBOR Page" means either (a) if "LIBOR Moneyline Telerate" is designated on the face hereof or in the pricing supplement attached hereto or delivered herewith, or if neither "LIBOR Reuters" nor "LIBOR Moneyline Telerate" is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as the method for calculating LIBOR, the display designated as page "3750" on the Telerate Service ("Telerate") (or such other page as may replace page "3750" on such service or such other service as may be replaced by a successor service for the purpose of displaying the London interbank offered rates of major banks), and LIBOR for such Interest Reset Period will be the relevant offered rate as determined by the Calculation Agent or (b) if "LIBOR Reuters" is 6 designated on the face hereof or in the pricing supplement attached hereto or delivered herewith, "Designated LIBOR Page" means the display designated as page "LIBO" on the Reuters Monitor Money Rates Service and LIBOR will be the arithmetic means of the offered rates, calculated by the Calculation Agent, or the offered rate, if the designated LIBOR page by its terms provides only for a single rate (or such other page as may replace the LIBO page on such service or such other service as may be replaced by a successor service for the purpose of displaying London interbank offered rates of major banks). If neither LIBOR Reuters nor LIBOR Telerate is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, LIBOR will be determined as if LIBOR Moneyline Telerate had been specified. If LIBOR cannot be determined as described above (either because the Designated LIBOR Page is no longer available or because fewer than two offered rates appear on the Designated LIBOR Page on the LIBOR Determination Date), the Calculation Agent will determine "LIBOR" as follows. The Calculation Agent will request the principal London offices of each of the four major banks in the London interbank market selected by the Calculation Agent to provide the Calculation Agent with its offered quotations for deposits in the Specified Currency for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, to prime banks in the London interbank market at approximately 11:00 a.m., London time, on the LIBOR Determination Date, in a principal amount equal to an amount of at least $1,000,000 or its approximate equivalent thereof in the Specified Currency, that is representative of a single transaction in such market at such time. If two or more such quotations are provided, "LIBOR" for such Interest Reset Period will be the arithmetic mean of such quotations. If fewer than two such quotations are provided, "LIBOR" for such Interest Reset Period will be the arithmetic mean of rates quoted by three major banks in The City of New York selected by the Calculation Agent at approximately 11:00 a.m., New York City time, on the LIBOR Determination Date for loans in the Specified Currency to leading European banks for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, in a principal amount equal to an amount of at least $1,000,000 or the approximate equivalent thereof in the Specified Currency that is representative of a single transaction in such market at such time; provided, however, that if fewer than three banks selected as aforesaid by the Calculation Agent are quoting rates as mentioned in this sentence. "LIBOR" for such Interest Reset Period will be the same as LIBOR for the immediately preceding Interest Reset Period (or, if there was no such Interest Reset Period, the LIBOR Rate will be the Initial Interest Rate). Determination of Treasury Rate If the Base Rate specified in the face hereof or in the pricing supplement attached hereto or delivered herewith is the Treasury Rate or Treasury Rate Constant Maturity, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to the Treasury Rate and the Spread or Spread Multiplier, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Unless "Treasury Rate Constant Maturity" is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the "Treasury Rate" for each Interest Reset Period will be the rate for the auction held on the Treasury Rate Determination Date (as defined below) for such Interest Reset Period of direct obligations of the United States ("Treasury Securities") that have the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, as such rate appears on either Moneyline Telerate (or any successor service) on page 56 (or any other page as may replace the page on that service) or on page 57 (or any other page as may replace that page on that service) under the 7 heading "Investment Rate." The following procedures will be followed if the Treasury Rate cannot be determined as described above. If not so published by 3:00 p.m., New York City time, on the Calculation Date, the Treasury Rate will be the Bond Equivalent Yield (defined below) of the rate for the applicable Treasury Securities as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the heading "U.S. Government Securities/Treasury Bills/Auction High." In the event that such rate is not so published by 3:00 p.m., New York City time, on the related Calculation Date, the Treasury Rate will be the Bond Equivalent Yield of the auction rate of the applicable Treasury Securities as announced by the United States Department of the Treasury. In the event that the results of the auction of Treasury Securities is not so announced by the United States Department of the Treasury, or if the auction is not held, then the Treasury Rate will be the Bond Equivalent Yield of the rate on the Treasury Rate Determination Date of the applicable Treasury Securities published in H.15(519) under the heading of "U.S. Government Securities/Treasury Bills/Secondary Market." If such rate is not so published by 3:00 p.m., New York City time, on the related Calculated Date, then the Treasury Rate will be the rate on the Treasury Rate Determination Date of the applicable Treasury Securities as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the heading "U.S. Government Securities/Treasury Bills/Secondary Market." In the event that such rate is not so published by 3:00 p.m., New York City time, on the related Calculation Date, then the Treasury Rate will be the rate on the Treasury Rate Determination Date calculated by the Calculation Agent as the Bond Equivalent Yield of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 p.m., New York City time, on the Treasury Rate Determination Date, of three primary United States government securities dealers selected by the Calculation Agent for the issue of Treasury Securities with a remaining maturity closest to the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting bid rates as mentioned in this sentence, then the "Treasury Rate" for such Interest Reset Period will be the same as the Treasury Rate for the immediately preceding Interest Reset Period (or, if there was no Interest Reset Period, the Initial Interest Rate). The "Treasury Rate Determination Date" for each Interest Reset Period will be the day of the week in which the Interest Reset Date for such Interest Reset Period falls on which Treasury Securities would normally be auctioned. Treasury Securities are normally sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is normally held on the following Tuesday, except that such auction may be held on the preceding Friday. If, as the result of a legal holiday, an auction is so held on the preceding Friday, such Friday will be the Treasury Rate Determination Date pertaining to the Interest Reset Period commencing in the next succeeding week. If an auction date shall fall on any day that would otherwise be an Interest Reset Date for a Note whose Base Rate is the Treasury Rate, then such Interest Reset Date shall instead be the Business Day immediately following such auction date. Bond Equivalent: Yield will be calculated as follows: D X N Bond Equivelent Yield = ------------- X 100 360 - (D X N) where "D" refers to the applicable per annum rate for Treasury Securities quoted on a bank discount basis and expressed as a decimal, "N" refers to 365 or 366, as the case may be, and "M" refers to the actual number of days in the applicable interest reset period. 8 If "Treasury Rate Constant Maturity" is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the "Treasury Rate" for each Interest Reset Period will be the rate displayed on the Designated CMT Telerate Rate Page under the caption "Treasury Constant Maturities" under the column for the Designated CMT Maturity Index in the following manner. If the Designated CMT Moneyline Telerate Page is 7051, the Treasury Rate will be the rate on the Constant Maturity Treasury Rate Determination Date. In the event that such rate does not appear on Moneyline Telerate Page 7051, then the Treasury Rate will be the treasury constant maturity rate for the designated CMT maturity index as published in the relevant H.15(519) under the caption "Treasury Constant Maturities." In the event that such rate does not so appear in H.15(519), then the Treasury Rate will be the constant treasury maturity rate on the Constant maturity Treasury Rate Determination Date for the designated CMT maturity index as may then be published by either the Federal Reserve System Board of Governors or the United States Department of the Treasury that the calculation agent determines to be comparable to the rate which would have otherwise been published in H.15(519). If the Designated CMT Moneyline Telerate Page is 7052, the "Treasury Rate" will be the weekly or monthly average, as specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, for the week or the month, as applicable, ended immediately preceding the week or month, as applicable, in which the related Constant Maturity Treasury Rate Determination Date occurs. In the event that such rate does not appear on Moneyline Telerate Page 7052, then the Treasury Rate will be the one-week or one-month, as specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, average of the treasury constant maturity rate for the designated CMT maturity index for the week or month as applicable, preceding the Constant Maturity Treasury Determination Date as published in the relevant H.15(519) under the caption "Treasury Constant Maturities." In the event that such rate does not so appear in H.15(519), then the Treasury Rate will be the one-week or one-month, as specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, average of the constant treasury maturity rate for the designated CMT maturity index as otherwise announced by the Federal Reserve Bank of New York for the week or month, as applicable, ended immediately preceding the week or month, as applicable, in which the Constant Maturity Treasury Rate Determination Date falls. The following procedures will be followed if the Treasury Rate cannot be determined as indicated above. If such information, as applicable, is not so published, then the Calculation Agent will calculate the Treasury Rate on the Constant Maturity Treasury Rate Determination Date as follows which shall be a yield to maturity, based on the arithmetic mean of the secondary market bid prices as of approximately 3:30 p.m., New York City time, on the Constant Maturity Treasury Rate Determination Date of three leading U.S. government securities dealers in The City of New York selected by the Calculation Agent, one of which may be the Agent, from five such dealers selected by the Calculation Agent and eliminating the highest quotation, or in the event of equality, one of the highest, and the lowest quotation, or, in the event of equality, one of the lowest, for United States Treasury Securities ("Treasury Notes"), with an original maturity of approximately the Designated CMT Maturity Index and a remaining term to maturity of not less than such Designated CMT Maturity Index minus one year and in a principal amount that is representative for a single transaction in the securities in that market at that time. If the Calculation Agent is unable to obtain three such Treasury Note quotations, the Treasury Rate on the Constant Maturity Treasury Rate Determination Date will be calculated by the Calculation Agent, and shall be a yield to maturity based on the arithmetic mean of the secondary market offer side prices as of approximately 3:30 p.m., New York City time, on the Constant Maturity Treasury Rate Determination Date of three leading U.S. government securities dealers in 9 the City of New York, one of which may be the Agent, from five such dealers selected by the Calculation Agent and eliminating the highest quotation, or, in the event of equality, one of the highest, and the lowest quotation, or, in the event of equality, one of the lowest, for Treasury Notes with an original maturity of the number of years that is the next highest to the Designated CMT Maturity Index and a remaining maturity closest to the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, and in an amount that is representative for a single transaction in that market at that time. If three or four, and not five, of such dealers are quoting as described above, then the Treasury Rate will be based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of such quotes will be eliminated. However, if fewer than three dealers so selected by the Calculation Agent are quoting as mentioned above, the Treasury Rate determined as of the Constant Maturity Treasury Rate Determination Date will be the Treasury Rate in effect on the Constant Maturity Treasury Rate Determination Date. If two Treasury Notes with an original maturity as described in the third preceding sentence have remaining terms to maturity equally close to the Designated CMT Maturity Index, the Calculation Agent will obtain quotations for the Treasury Note with the shorter remaining term to maturity and will use such quotations to calculate the Treasury Rate as set forth above. "Designated CMT Moneyline Telerate Page" means the display on the Telerate Service, or any successor service on the page specified in the applicable pricing supplement, or any other page as may replace such page on that service, or any successor service, for the purpose of displaying Treasury Constant Maturities as reported in H.15(519). If no such page is specified in the applicable pricing supplement, the Designated CMT Telerate Page shall be 7052, for the most recent week. "Designated CMT Maturity Index" means the original period to maturity of the U.S. Treasury Securities, either one, two, three, five, seven, ten, twenty or thirty years, specified in the applicable pricing supplement with respect to which the Treasury Rate will be calculated. If no such maturity is specified in the applicable pricing supplement, the Designated CMT Maturity Index shall be two years. "The Constant Maturity Treasury Rate Determination Date" shall be the second Business Day prior to the Interest Reset Date for the applicable Interest Reset Period. Determination of Prime Rate Prime Rate Notes will bear interest at the interest rates (calculated with reference to the Prime Rate and the Spread and/or Spread Multiplier, if any) specified in the Prime Rate Notes and in the applicable pricing supplement. The "Prime Rate" for each Interest Reset Period will be determined by the Calculation Agent for such Prime Rate Note as of the second Business Day prior to the Interest Reset Date for such Interest Reset Period (a "Prime Rate Determination Date") and shall be the rate made available and subsequently published on such date in H.15(519) under the heading "Bank Prime Loan." In the event that such rate is not published prior to 3:00 p.m., New York City time, on the Calculation Date (as defined above) pertaining to such Prime Rate Determination Date, then the Prime Rate for such Interest Reset Period shall be the rate published in the H.15 Daily Update under the heading "Bank Prime Loan." In the event that such rate has not been published prior to 3:00 10 p.m., New York City time, on the Calculation Date, then the Prime Rate will be calculated by the Calculation Agent and will be the arithmetic mean of the rates of interest publicly announced by each bank that appears on the Reuters Screen USPRIME1 Page (as defined below) as such bank's prime rate or base lending rate on the Prime Rate Determination Date. If fewer than four such rates appear on the Reuters Screen USPRIME1 Page for the Prime Rate Determination Date, the rate shall be the arithmetic mean of the prime rates quoted on the basis of the actual number of days in the year divided by 360 as of the close of business on the Prime Rate Determination Date by three major banks in The City of New York selected by the Calculation Agent. However, if the banks so selected by the Calculation Agent are not quoting as mentioned in the previous sentence, the Prime Rate will be the Prime Rate in effect on the Prime Rate Determination Date. "Reuters Screen USPRIME1 Page" means the display designated as page "USPRIME1" on the Reuters Monitor Money Rates Service (or such other page as may replace the USPRIME1 page on that service for the purpose of displaying prime rates or base lending rates of major United States banks). Determination of Eleventh District Cost of Funds Rate Eleventh District Cost of Funds Rate Notes will bear interest at the interest rates (calculated by reference to the Eleventh District Cost of Funds Rate and the Spread and/or Spread Multiplier, if any) specified in the Eleventh District Cost of Funds Rate Notes and in the applicable pricing supplement. The "Eleventh District Cost of Funds Rate," for each Interest Reset Period will be determined by the Calculation Agent for such Eleventh District Cost of Funds Rate Note as of the last working day of the month immediately prior to such Interest Reset Date for such Interest Reset Period on which the Federal Home Loan Bank of San Francisco (the "FHLB of San Francisco") publishes the Eleventh District Cost of Funds Index (as defined below) (the "Eleventh District Cost of Funds Rate Determination Date"), and shall be the rate equal to the monthly weighted average cost of funds for the calendar month preceding such Eleventh District Cost of Funds Rate Determination Date as set forth under the caption "Eleventh District" on Moneyline Telerate (or any successor service) on page 7058 (which page shall include any successor page (as determined by the Calculation Agent)) as of 11:00 a.m., San Francisco time, on such Eleventh District Cost of Funds Rate Determination Date. If such rate does not appear on Telerate page 7058 on any related Eleventh District Cost of Funds Rate Determination Date, the Eleventh District Cost of Funds Rate for such Eleventh District Cost of Funds Rate Determination Date shall be the monthly weighted average cost of funds paid by member institutions of the Eleventh Federal Home Loan Bank District that was most recently announced (the "Eleventh District Cost of Funds Rate Index") by the FHLB of San Francisco as such cost of funds for the calendar month preceding the date of such announcement. If the FHLB of San Francisco fails to announce such rate on or prior to the Eleventh District Cost of Funds Rate Determination Date for the calendar month immediately preceding such date, then the Eleventh District Cost of Funds Rate for such date will be the Eleventh District Cost of Funds Rate in effect on the Eleventh District Cost of Funds Rate Determination Date. Determination of EURIBOR If the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is EURIBOR, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to EURIBOR and the Spread or Spread Multiplier, if 11 any, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. "EURIBOR" for each Interest Reset Period will be determined by the Calculation Agent as follows. On the second TARGET Business Day prior to the Interest Reset Date for such Interest Reset Period (a "EURIBOR Determination Date"), the Calculation Agent for such EURIBOR Note will determine the offered rates for deposits in Euros for the period of the index maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, which appears on the Designated EURIBOR Page as of 11:00 a.m., Brussels time, on such EURIBOR Determination Date. "Designated EURIBOR Page" means the display designated as page "248" on Telerate (or any successor service or such other page as may replace page "248" on such service), and EURIBOR for such Interest Reset Period will be the relevant offered rates as determined by the Calculation Agent. If EURIBOR cannot be determined as described above, the Calculation Agent will determine "EURIBOR" as follows. The Calculation Agent will request the principal Euro-zone (as defined below) office of each of four major banks in the Euro-zone interbank market selected by the Calculation Agent to provide the Calculation Agent with their respective offered quotations for deposits in Euros for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, to prime banks in the Euro-zone interbank market at approximately 11:00 a.m., Brussels time, on the EURIBOR Determination Date, in a principal amount equal to an amount of at least $1,000,000 or its approximate equivalent thereof in Euros that is representative of a single transaction in such market at such time. If two or more such quotations are provided, "EURIBOR" for such Interest Reset Period will be the arithmetic mean of such quotations. If less than two such quotations are provided, "EURIBOR" for such Interest Reset Period will be the arithmetic mean of rates quoted by four major banks in the Euro-zone selected by the Calculation Agent for such EURIBOR Note at approximately 11:00 a.m., Brussels time, on the EURIBOR Determination Date for loans in Euros to leading European banks for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, in a principal amount equal to an amount of at least $1,000,000 or the approximate equivalent thereof in Euros that is representative of a single transaction in such market at such time; provided, however, that if the banks so selected as aforesaid by the Calculation Agent are not quoting rates as mentioned in this sentence, "EURIBOR" for such Interest Reset Period will be the same as EURIBOR for the immediately preceding Interest Reset Period (or, if there was no such Interest Reset Period, the EURIBOR Rate will be the Initial Interest Rate). "Euro-zone" means the region comprised of member states of the European Union that adopt the single currency in accordance with the Treaty establishing the European Community, as amended by the Treaty on European Union. Inverse Floating Rate Notes If this Note is designated as an Inverse Floating Rate Note on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Inverse Floating Rate shall be equal to (i) in the case of the period, if any, commencing on the Original Issue Date (or such other date which may be specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as the date on which this Note shall begin to accrue interest), up to the first Interest Reset Date, the Initial Fixed Interest Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, and (ii) in the case of each period commencing on an Interest Reset 12 Date, the Reset Fixed Reference Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith minus the interest rate determined by reference to the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, as adjusted by the Spread and/or Spread Multiplier, if any, as determined in accordance with the provisions hereof; provided, however, that (x) the interest rate thereon will not be less than zero and (y) the interest rate in effect for the ten days immediately prior to the date of Maturity will be the rate in effect on the tenth day preceding such date. Floating Rate / Fixed Rate Notes If this Note is designated as a Floating Rate / Fixed Rate Note, this Note will be a Floating Rate note for a specified portion of its term and a Fixed Rate Note for the remainder of its term, in which event the interest rate on this Note will be determined as provided herein as if it were a Floating Rate Note and a Fixed Rate Note hereunder for each such respective period, all as described herein and in the applicable pricing supplement. Subsequent Interest Periods If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Spread, Spread Multiplier or method of calculation of the Interest Rate on this Note may be reset by the Company on the date or dates specified on the face hereof or in the pricing supplement attached hereto or delivered herewith (each an "Optional Reset Date"). The Company may reset the Spread, Spread Multiplier or method of calculation of the Interest Rate Interest Rate by notifying the Trustee for this Note at least 45 but not more than 60 days prior to each Optional Reset Date. Not later than 40 days prior to each Optional Reset Date, the Trustee shall provide notice (the "Reset Notice"), in accordance with "Notices" below, indicating whether the Company has elected to reset the Spread, Spread Multiplier or method of calculation of the Interest Rate, and if so, (i) such new Spread, Spread Multiplier or method of calculation of the Interest Rate and (ii) the provisions, if any, for redemption during the period from such Optional Reset Date to the next Optional Reset Date, or, if there is no such next Optional Reset Date, to the Stated Maturity of this Note (each such period, a "Subsequent Interest Period"), including the date or dates on which or the period or periods during which and the price or prices at which such redemption may occur during the Subsequent Interest Period. Upon the transmittal by the Trustee of a Reset Notice to the Holder of a Note, such new Spread, Spread Multiplier or method of calculation of the Interest Rate shall take effect automatically. Except as modified by the Reset Notice and as described below, such Note will have the same terms as prior to the transmittal of such Reset Notice. Notwithstanding the foregoing, not later than 20 days prior to the Optional Reset Date, the Company may, at its option, revoke the Spread or Spread Multiplier provided for in the Reset Notice and establish a higher Spread or Spread Multiplier for the Subsequent Interest Period by causing the Trustee to provide notice of such higher Spread or Spread Multiplier to the Holder of this Note. Such notice shall be irrevocable. All Bearer Notes with respect to which the Spread or Spread Multiplier is reset on an Optional Reset Date will bear such higher Spread or Spread Multiplier. The Holder of this Note will have the option to elect repayment of the Note by the Company on each Optional Reset Date at a price equal to the principal amount hereof, plus interest accrued to such Optional Reset Date. In order to obtain repayment on an Optional Reset Date, the Holder must follow the procedures set forth below for optional repayment, except that the period for delivery or notification to the Paying Agent shall be at least 25 but not more than 35 days prior to such Optional Reset Date, and except that if the Holder has tendered this Note for repayment 13 pursuant to a Reset Notice, the Holder may, by written notice to the Paying Agent, revoke such tender for repayment until the close of business on the tenth day before the Optional Reset Date. Indexed Notes If this Note is an Indexed Principal Note, then certain or all interest payments, in the case of an Indexed Rate Note, and/or the principal amount payable at Stated Maturity or earlier redemption or retirement, in the case of an Indexed Principal Note, is determined by reference to the amount designated on the face hereof or in the pricing supplement attached hereto or delivered herewith as the Face Amount of this Note and by reference to the Index as described on the face hereof or in the pricing supplement attached hereto or delivered herewith. If this Note is an Indexed Principal Note, the amount of any interest payment will be determined by reference to the Face Amount described on the face hereof or in the pricing supplement attached hereto or delivered herewith. If this Note is an Indexed Principal Note, the principal amount payable at Stated Maturity or any earlier redemption or repayment of this Note may be different from the Face Amount. If a third party is appointed to calculate or announce the Index for a particular Indexed Note and the third party either suspends the calculation or announcement of such Index or changes the basis upon which such Index is calculated in a manner that is inconsistent with the applicable pricing supplement, then the Company will select another third party to calculate or announce the Index. The agent or another affiliate of the Company may be either the original or successor third party selected by the Company. If for any reason such Index cannot be calculated on the same basis and subject to the same conditions and controls as applied to the original third party, then the indexed interest payments, if any, or any indexed principal amount of this Note shall be calculated in the manner set forth in the applicable pricing supplement. Any determination of such third party shall in the absence of manifest error be binding on all parties. Payments in Currencies other than the Specified Currency Except as set forth below, if any payment in respect hereof is required to be made in a specified currency other than U.S. dollars and such currency is unavailable due to the imposition of exchange controls or other circumstances beyond the Company's control or is no longer used by the government of the country issuing such currency or for the settlement of transactions by public institutions of or within the international banking community, then such payment shall be made in U.S. dollars until such currency is again available or so used. The amount so payable in such foreign currency shall be converted into U.S. dollars on the basis of the most recently available Market Exchange Rate for such currency or as otherwise indicated on the face hereof or in the pricing supplement attached hereto or delivered herewith. Any payment made under such circumstances in U.S. dollars will not constitute an Event of Default under the Indenture. In the event of an official redenomination of the Specified Currency of this Note (other than as a result of European Monetary Union, but including, without limitation, an official redenomination of any such Specified Currency that is a composite currency), the obligations of the Company with respect to payments on this Note shall, in all cases, be deemed immediately following such redenomination to provide for the payment of that amount of redenominated currency representing the amount of such obligations immediately before such redenomination. This Note does not provide for any adjustment to any amount payable under this Note as a result of (i) any change in the value of the Specified Currency hereof relative to any other currency due solely to 14 fluctuations in exchange rates or (ii) any redenomination of any component currency of any composite currency (unless such composite currency is itself officially redenominated). Dual Currency Notes If this Note is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as a Dual Currency Note, the Company may have a one time option of making all payments of principal, premium, if any, and interest on all Dual Currency Notes issued on the same day and having the same terms (a "Tranche"), which payments would otherwise be made in the Specified Currency of such Notes, in an optional currency (the "Optional Payment Currency"). Such option will be exercisable in whole but not in part on an "Option Election Date," which will be any one of the dates specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. If the Company makes such an election, the amount payable in the Optional Payment Currency shall be determined using the Designated Exchange Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. If such election is made, notice of such election shall be provided in accordance with "Notices" below within two Business Days of the Option Election Date and shall state (i) the first date, whether an Interest Payment Date and/or Stated Maturity, in which scheduled payments in the Optional Payment Currency will be made and (ii) the Designated Exchange Rate. Any such notice by the Company, once given, may not be withdrawn. The equivalent value in the Specified Currency of payments made after such an election may be less, at the then current exchange rate, than if the Company had made such payment in the Specified Currency. Renewable Notes If this Note is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as a Renewable Note, this Note will mature on an Interest Payment Date occurring in or prior to the twelfth month following the Original Issue Date of this Note (the "Initial Maturity Date") unless the term of all or any portion of this Note is renewed in accordance with the following procedures: On the Interest Payment Date occurring in the sixth month (unless a different interval (the "Special Election Interval") is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith) prior to the Initial Maturity Date of this Note (the "Initial Renewal Date") and on the Interest Payment Date occurring in each sixth month (or in the last month of each Special Election Interval) after such Initial Renewal Date (each, together with the Initial Renewal Date, a "Renewal Date"), the term of this Note may be extended to the Interest Payment Date occurring in the twelfth month (or, if a Special Election Interval is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the last month in a period equal to twice the Special Election Interval) after such Renewal Date, if the Holder of this Note elects to extend the term of this Note or any portion thereof as described below. If the Holder does not elect to extend the term of any portion of the principal amount of this Note during the specified period prior to any Renewal Date, such portion will become due and payable on the Interest Payment Date occurring in the sixth month (or the last month in the Special Election Interval) after such Renewal Date (the "New Maturity Date"). 15 The Holder may elect to renew the term of this Note, or if so specified, any portion thereof, by delivering a notice to such effect to any duly appointed paying agent not less than 15 nor more than 30 days prior to such Renewal Date, unless another period is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Such election will be irrevocable and will be binding upon each subsequent Holder of this Note. An election to renew the term of this Note may be exercised with respect to less than the entire principal amount of this Note only if so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith and then only in such principal amount, or any integral multiple in excess thereof, as is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Notwithstanding the foregoing, the term of this Note may not be extended beyond the Stated Maturity specified for this Note on the face hereof or in the pricing supplement attached hereto or delivered herewith. If the Holder does not elect to renew the term, this Note must be presented to any duly appointed paying agent and, as soon as practicable following receipt of such Note, such paying agent shall issue in exchange therefor in the name of such Holder (i) a Note, in a principal amount equal to the principal amount of such exchanged Note for which no election to renew the term thereof was exercised, with terms identical to those specified on such exchanged Note (except that such Note shall have a fixed, nonrenewable Stated Maturity on the New Maturity Date) and (ii) if an election to renew is made with respect to less than the full principal amount of such Holder's Note, such paying agent shall issue in exchange for such Note in the name of such Holder a replacement Renewable Note, in a principal amount equal to the principal amount of such exchanged Note for which the election to renew was made, with terms otherwise identical to the exchanged Note. Extension of Stated Maturity If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Stated Maturity of this Note may be extended at the option of the Company for one or more periods of whole years specified on the face hereof or in the pricing supplement attached hereto or delivered herewith (each an "Extension Period") from one to five years up to but not beyond the date (the "Final Maturity") set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith. The Company may exercise such option by notifying the Trustee for this Note at least 45 but not more than 60 days prior to the original Stated Maturity of this Note. If the Company exercises such option, the Trustees will mail to the Holder of this Note not later than 40 days prior to the original Stated Maturity notice (the "Extension Notice") in accordance with "Notices" below. The Extension Notice will set forth (i) the election of the Company to extend the Stated Maturity, (ii) the new Stated Maturity, (iii) in the case of a Floating Rate Note, the Spread, Spread Multiplier or method of calculation applicable to the Extension Period, and (iv) the provisions, if any, for redemption during the Extension Period, including the date or dates on which or the period or periods during which and the price or prices at which such redemption may occur during the Extension Period. Upon the provision by the Trustee of an Extension Notice to the Holder hereof, the Stated Maturity of this Note shall be extended automatically, and, except as modified by the Extension Notice and as described in the next paragraph, this Note will have the same terms as prior to the provision of such Notice. Notwithstanding the foregoing, not later than 20 days prior to the original Stated Maturity of this Note, the Company may, at its option, revoke the Spread or Spread Multiplier provided for in the Extension Notice and establish a higher Spread or Spread Multiplier for the Extension Period by causing the Trustee to provide notice of such higher Spread or Spread Multiplier, as the case may be, to the Holder hereof in accordance with "Notices" below. Such 16 notice shall be irrevocable. All Notes with respect to which the Stated Maturity is extended will bear such higher Spread or Spread Multiplier for the Extension Period, whether or not tendered for repayment. If the Company extends the Stated Maturity of this Note, the Holder will have the option to elect repayment of this Note by the Company on the original Stated Maturity at a price equal to the principal amount hereof, plus interest accrued to such date. In order to obtain repayment on such original Stated Maturity once the Company has extended the Stated Maturity hereof, the Holder must follow the procedures set forth below for optional repayment, except that the period for delivery or notification to the Paying Agent shall be at least 25 but not more than 35 days before the original Stated Maturity, and except that if the Holder has tendered this Note for repayment pursuant to an Extension Notice, the Holder may, by written notice to the Paying Agent, revoke such tender for repayment until the close of business on the tenth calendar day before the original Stated Maturity. Optional Redemption, Repayment and Repurchase If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Company may, at its option, redeem this Note in whole or in part, on the date or dates (each an "Optional Redemption Date") specified herein, at the price (the "Redemption Price") (together with accrued interest to such Optional Redemption Date) specified herein. If the Company elects to exercise such option with respect to this Note, at least 30 days prior to the date of redemption, such Trustee shall provide notice of such redemption to the Holder hereof in accordance with "Notices" below. In the event of redemption of this Note in part only, a new Note or Notes for the unredeemed portion hereof shall be issued to the Holder hereof upon the cancellation hereof. Notes redeemed prior to the Stated Maturity must be presented for payment together with all unmatured Coupons, if any, appertaining thereto, failing which the amount of any missing unmatured Coupon will be deducted from the sum due for payment. If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, this Note will be repayable prior to Stated Maturity at the option of the Holder on the Optional Repayment Dates shown on the face hereof or in the pricing supplement attached hereto or delivered herewith at the Optional Repayment Prices shown on the face hereof or in the pricing supplement attached hereto or delivered herewith, together with accrued interest to the date of repayment. Notes that are to be repaid prior to Stated Maturity must be presented for payment together with all unmatured Coupons, if any, appertaining thereto, failing which the amount of any missing unmatured Coupon will be deducted from the sum due for payment. In order for this Note to be repaid, the Principal Paying Agent must receive this Note at least 30 but not more than 45 days prior to an Optional Repayment Date. Any tender of this Note for repayment (except pursuant to a Reset Notice or an Extension Notice) shall be irrevocable. The repayment option may be exercised by the Holder of this Note for less than the entire principal amount of the Note; provided that the principal amount of this Note remaining outstanding after repayment is an authorized denomination. Upon such partial repayment, this Note shall be canceled and a new Note or Notes for the remaining principal amount hereof shall be issued in the name of the Holder of this Note. Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, this Note will not be subject to any sinking fund. 17 Notwithstanding anything herein to the contrary, if this Note is a Discount Note, the amount payable in the event of redemption or repayment prior to the Stated Maturity hereof (other than pursuant to an optional redemption by the Company at a stated Redemption Price), in lieu of the principal amount due at the Stated Maturity hereof, shall be the Amortized Face Amount of this Note as of the redemption date or the date of repayment, as the case may be. The Amortized Face Amount of this Note on any date shall be the amount equal to (i) the Issue Price set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith plus (ii) that portion of the difference between such Issue Price and the stated principal amount of such Note that has accrued by such date at (x) the Bond Yield to Maturity set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith or (y) if so specified, the Bond Yield to Call set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith (computed in each case in accordance with generally accepted United States bond yield computation principles); provided, however, that in no event shall the Amortized Face Amount of a Note exceed its stated principal amount. The Bond Yield to Call listed on the face of this Note or in the pricing supplement attached hereto or delivered herewith shall be computed on the basis of the first occurring Optional Redemption Date with respect to such Note and the amount payable on such Optional Redemption Date. In the event that such Note is not redeemed on such first occurring Optional Redemption Date, the Bond Yield to Call with respect to such Note shall be recomputed on such Optional Redemption Date on the basis of the next occurring Optional Redemption Date and the amount payable on such Optional Redemption Date, and shall continue to be so recomputed on each succeeding Optional Redemption Date until the Note is so redeemed. Tax Redemption The Bearer Notes of a series may be redeemed at the option of the Company in whole, but not in part, at any time on giving at least 30 but not more than 60 days' notice in accordance with "Notices" below (which notice shall be irrevocable), at the respective Redemption Prices thereof, if the Company has or will become obligated to pay additional interest on such Notes as described in the following paragraph as a result of any change in, or amendment to, the laws (or any regulations or rulings promulgated thereunder) of the United States or any political subdivision or taxing authority thereof or therein, or any change in the application or official interpretation of such laws, regulations or rulings, which change or amendment becomes effective on or after their respective Original Issue Dates, and such obligation cannot be avoided by the Company taking reasonable measures available to it; provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Company would be obligated to pay such additional interest were a payment in respect of such Notes then due. Prior to the publication of any notice of redemption pursuant to this paragraph, the Company shall deliver to the Trustee for the Notes to be redeemed a certificate stating that the Company is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Company so to redeem have occurred, and an opinion of independent counsel to the effect that the Company has or will become obligated to pay such additional interest as a result of such change or amendment. Payment of Additional Interest The Company will, subject to the exceptions and limitations set forth below, pay as additional interest to the Holder of this Note or any Coupon that is a United States Alien (as defined below) such amounts as may be necessary so that every net payment on this Note or such Coupon, after deduction or withholding for or on account of any present or future tax, assessment or other governmental charge imposed upon or as a result of such payment by the United States (or any 18 political subdivision or taxing authority thereof or therein), will not be less than the amount provided in this Note or such Coupon to be then due and payable. However, the Company will not be required to make any such payment of additional interest to such Holder for or an account of: (a) any tax, assessment or other governmental charge that would not have been imposed but for (i) the existence of any present or former connection between such Holder (or between a fiduciary, settlor or beneficiary of, or a Person holding a power over, such Holder, if such Holder is an estate or a trust, or a member or shareholder of such Holder, if such Holder is a partnership or a corporation) and the United States, including, without limitation, such Holder (or such fiduciary, settlor, beneficiary, Person holding a power, member or shareholder) being or having been a citizen or resident thereof or being or having been engaged in trade or business or present therein or having or having had a permanent establishment therein or (ii) such Holder's past or present status as a passive foreign investment company, a personal holding company, foreign personal holding company, a controlled foreign corporation for United States tax purposes or private foundation or other tax-exempt organization with respect to the United States or as a corporation that accumulates earnings to avoid United States federal income tax; (b) any estate, inheritance, gift, sales, transfer or personal property tax or any similar tax, assessment or other governmental charge; (c) any tax, assessment or other governmental charge that would not have been imposed but for the presentation by the Holder of this Note or such Coupon for payment more than 15 days after the date on which such payment became due and payable or on which payment thereof was duly provided for, whichever occurred later; (d) any tax, assessment or other governmental charge that is payable otherwise than by deduction or withholding from a payment on this Note or such Coupon; (e) any tax, assessment or other governmental charge required to be deducted or withheld by any Paying Agent from a payment on this Note or such Coupon, if such payment can be made without such deduction or withholding by any other Paying Agent; (f) any tax, assessment or other governmental charge imposed on a Holder that actually or constructively owns ten percent or more of the combined voting power of all classes of stock of the Company or is a controlled foreign corporation related to the Company through stock ownership; nor shall such additional interest be paid with respect to a payment on this Note or such Coupon to a Holder that is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner would not have been entitled to the additional interest had such beneficiary, settlor, member or beneficial owner been the Holder of this Note or such Coupon. The term "United States Alien" means any person who, for United States federal income tax purposes, is a foreign corporation, a nonresident alien individual, a nonresident alien fiduciary of a foreign estate or trust, or a foreign partnership one or more of the members of which is, for United States federal income tax purposes, a foreign corporation, a nonresident alien individual or a nonresident alien fiduciary of a foreign estate or trust. 19 Paying Agents The Company has initially appointed as its Paying Agents for Bearer Notes of this Series the offices listed below: Principal Paying Agent: Citibank, N.A. 5 Carmelite Street London, England EC4Y OPA Paying Agent: Kredietbank S.A. Luxembourgeoise 43 Boulevard Royal Luxembourg Luxembourg City 2955 The Company reserves the right at any time to vary or terminate the appointment of any Paying Agent and to appoint additional or other Paying Agents and to approve any change in the office through which any Paying Agent acts, provided that there will at all times be a Paying Agent (which may be the Trustee) in at least one city in Europe, which, so long as Bearer Notes are listed on the Luxembourg Stock Exchange and the rules of that exchange shall so require, shall include Luxembourg. Notice of any such termination or appointment and of any changes in the specified offices of the Trustee or any Paying Agent will be given to the Holder hereof as described below. Notices All notices to Holders of this Note will be deemed to have been duly given if published on two separate Business Days in a leading London daily newspaper (which is expected to be the Financial Times) and, with respect to any series of Bearer Notes that may be listed on the Luxembourg Stock Exchange, if such exchange so requires, in Luxembourg in a newspaper of general circulation in Luxembourg (which is expected to be the Luxemburger Wort). Such notices shall be deemed to have been given on the date of the first such publication. Other Terms As provided in the Indenture and subject to certain limitations therein set forth, this Note is exchangeable for a like aggregate principal amount of Registered Notes of different authorized denominations, as requested by the Person surrendering the same. No service charge shall be made for any such exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. If an Event of Default with respect to the Debt Securities of this series shall have occurred and be continuing, the principal of all the Debt Securities of this series may be declared due and payable in this manner and with the effect provided in the Indenture. In case this Note or any Coupon shall at any time become mutilated, destroyed, stolen or lost, it may be replaced at the specified office of the Principal Paying Agent in London; or, with 20 respect to any series of Bearer Notes that are listed on the Luxembourg Stock Exchange, at the specified office of the Paying Agent in Luxembourg, upon payment by the claimant of such expenses as may be incurred in connection therewith and, in the case of destruction, theft or loss, on such terms as to evidence and indemnity as the Company or the Trustee may reasonably require. Mutilated or defaced Bearer Notes or Coupons must be surrendered before replacements will be issued. All monies paid by the Company to a Trustee or Paying Agent for the payment of principal of or any premium or interest on any Bearer Note or for the payment of any Coupon which remain unclaimed at the end of two years after such payments shall have become due and payable will be repaid to the Company, at its written request, and the Holder of such Note or Coupon will thereafter look only to the Company for payment, such payment to be made only outside the United States. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Debt Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of Debt Securities at the time outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Debt Securities of any series at the time outstanding, on behalf of the Holders of all the Debt Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Debt Security shall be conclusive and binding upon such Holder and upon all future Holders of this Debt Security and of any Debt Security issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon the Debt Security. Holders of Debt Securities may not enforce their rights pursuant to the Indenture or the Note except as provided in the Indenture. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed. The Company may, without the consent of the Holders of the Notes, consolidate with, merge into, or transfer substantially all of its assets to, a corporation that is a U.S. Person, provided that the successor corporation assumes all obligations of the Company under the Notes and certain other conditions are met, including a waiver by the successor corporation of any right to redeem the Notes under circumstances in which the successor corporation would be entitled to redeem the Notes but the Company would not have been entitled to do so. Except as provided above, the obligation to pay the principal hereof (and premium, if any) and interest hereon in the designated currency of payment is of the essence. To the fullest extent possible under applicable law, judgments in respect of this Note shall be given in such currency. The obligation of the Company to make such payments in the designated currency of payment shall, notwithstanding any payment in any other currency (whether pursuant to a judgment or otherwise), be discharged only to the extent of the amount in the designated currency of payment that the Holder of this Note may, in accordance with normal banking procedures, purchase with the sum paid in such other currency (after any premium and cost of exchange) on the business day in the 21 country of issue of the designated currency of payment or in the international banking community (in the case of a composite currency) immediately following the day on which such Holder receives such payment. If the amount in the designated currency of payment that may be so purchased is for any reason less than the amount originally due, the Company shall, as a separate and independent obligation, pay such additional amounts in the designated currency of payment as may be necessary to compensate for any such shortfall. This Note shall be deemed to be a contract made and to be performed solely in the State of New York and for all purposes be governed by, and construed in accordance with, the laws of said State without regard to the conflicts of law rules of said State. All terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in the Indenture. 22 BEARER PRINCIPAL AMOUNT No. FX ___ OR FACE AMOUNT $_______________ CUSIP:__________ CITIGROUP GLOBAL MARKETS HOLDINGS INC. COMMON CODE MEDIUM-TERM SUBORDINATED NOTE, SERIES E DUE NINE MONTHS OR MORE FROM DATE OF ISSUE (FIXED RATE) ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTION 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE. IF APPLICABLE, THE "TOTAL AMOUNT OF OID" AND "YIELD TO MATURITY" SET FORTH BELOW WILL BE COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE UNITED STATES FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES. Issue Price: Original Issue Date: Interest Rate: Stated Maturity: Specified Currency (If other than U.S. dollars): Authorized Denominations: (If other than as set forth in the Prospectus Supplement) Dual Currency Note: [ ] Yes (see attached) [ ] No Optional Payment Currency: Designated Exchange Rate: Interest Payment Dates: Accrue to Pay: [ ] Yes [ ] No Indexed Principal Note: [ ] Yes (see attached) [ ] No Interest Rate Reset: [ ] The Interest Rate may not be changed prior to Stated Maturity. [ ] The Interest Rate may be changed prior to Stated Maturity (see attached). Optional Reset Dates (if applicable): Amortizing Note: [ ] Yes [ ] No Amortization Schedule: Optional Redemption: [ ] Yes [ ] No Optional Redemption Dates: Redemption Prices: Bond Yield to Maturity: Bond Yield to Call: Optional Repayment: [ ] Yes [ ] No Optional Repayment Dates: Optional Repayment Prices: Optional Extension of Stated Maturity: [ ] Yes [ ] No Final Maturity: Discount Note: [ ] Yes [ ] No Total Amount of OID: Yield to Maturity: Renewable Note: [ ] Yes (see attached) [ ] No Initial Maturity Date: Special Election Interval (if applicable): Amount (if less than entire principal amount) as to which election may be exercised: If the Specified Currency of this Note is Pounds sterling, the following applies: This instrument constitutes [ ] commercial paper [ ] a shorter term debt security [ ] a longer term debt security issued in accordance with regulations made under section 4 of the Banking Act 1987. The issuer of this Note is Citigroup Global Markets Holdings Inc., which is not an authorized institution or a European authorized institution (as such terms are defined in the Banking Act 1987 (Exempt Transactions) Regulation 1997). Repayment of the principal and payment of any interest or premium in connection with this Note has not been guaranteed. IF THE SPECIFIED CURRENCY OF THIS NOTE IS POUNDS STERLING, THE FOLLOWING APPLIES: THIS NOTE IS ISSUED IN ACCORDANCE WITH THE REGULATIONS MADE UNDER SECTION 4 OF THE BANKING ACT 1987. 2 CITIGROUP GLOBAL MARKETS HOLDINGS INC., a corporation duly organized and existing under the laws of the State of New York (herein referred to as the "Company"), for value received hereby promises to pay to bearer, upon presentation and surrender hereof (a) the Principal Amount or, in the case of an Indexed Principal Note, the Face Amount adjusted by reference to prices, changes in prices, or differences between prices, of securities, currencies, intangibles, goods, articles or commodities or by such other objective price, economic or other measures (an "Index") as described on the face hereof or in the pricing supplement attached hereto or delivered herewith, in the Specified Currency on the Stated Maturity shown above or earlier if and to the extent so provided herein and (b) accrued interest on the Principal Amount then outstanding (or in the case of an Indexed Principal Note, the Face Amount, then outstanding) to the bearer of the interest coupons attached hereto (the "Coupons") at the Interest Rate shown above from the Original Issue Date shown above or from the most recent date to which interest has been paid or duly provided for, annually in arrears (unless otherwise set forth herein or in the pricing supplement attached hereto or delivered herewith) on the Interest Payment Dates specified on the face of this Note or in the pricing supplement attached hereto or delivered herewith commencing on the first Interest Payment Date following the Original Issue Date shown above upon presentation and surrender of the Coupons as they shall severally mature, and on the Stated Maturity shown above, or upon earlier redemption or repayment, until, in either case, the Principal Amount then outstanding or the Face Amount is paid or duly provided for in accordance with the terms hereof. Unless otherwise specified herein or in the pricing supplement attached hereto or delivered herewith, interest on this Note, if any, will be computed on the basis of a 360-day year of twelve 30-day months or, in the case of an incomplete month, the number of days elapsed. For purposes of this Note, "Business Day" means: (i) with respect to any Bearer Note, any day that is not a Saturday or Sunday and that, in The City of New York, is not a day on which banking institutions generally are authorized or obligated by law or executive order to close; (ii) with respect to Bearer Notes having a specified currency other than U.S. dollars only, other than Bearer Notes denominated in Euros, any day that, in the principal financial center (a specified currency below) of the country of the Specified Currency, is not a day on which banking institutions generally are authorized or obligated by law to close; (iii) with respect to Notes denominated in Euros, a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer ("TARGET") System is open (a "TARGET Business Day"); and (iv) with respect to any determination by the exchange rate agent (as defined below) of an exchange rate pursuant to notes having a specified currency other than U.S. dollars, any such day on which banking institutions and foreign exchange markets settle payments in New York City and London (an "Exchange Rate Business Day"). As used above, a "principal financial center" means the capital city of the country issuing the Specified Currency. However, with respect to U.S. dollars, Australian dollars, Canadian dollars, and Swiss francs, the principal financial center shall be The City of New York, Sydney, Toronto, and Zurich, respectively. The indebtedness evidenced by this Note is, to the extent set forth in the Indenture, expressly subordinated and subject in right of payment to the prior payment in full of Senior Indebtedness as defined in the Indenture, and this Note is issued subject to such provisions, and each Holder of this Note, by accepting the same, agrees to and shall be bound by such provisions and authorizes and directs the Trustee in his behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination as provided in the Indenture and appoints the Trustee as his attorney-in-fact for any and all such purposes. 3 If this Note is an Amortizing Note as shown on the face hereof or in the pricing supplement attached hereto or delivered herewith, a portion or all the principal amount of the Note is payable prior to Stated Maturity in accordance with a schedule, by application of a formula, or by reference to an Index (as described above). Except under certain circumstances for Notes having Specified Currencies other than U.S. dollars, payments of the principal hereof and any premium and interest hereon will be made only in the Specified Currency. Payments in respect of this Note and any Coupon will be made only against surrender of this Note or such Coupon, at the offices of the Paying Agents outside the United States listed on the reverse hereof. At the direction of the Holder of this Note or any Coupon, and subject to applicable laws and regulations, such payments will be made by check drawn on a bank in The City of New York (in the case of U.S. dollar payments) or outside the United States (in the case of payments in a currency other than U.S. dollars) mailed to an address outside the United States furnished by the Holder hereof or, at the option of the Holder hereof, by wire transfer (pursuant to written instructions supplied by the Holder hereof) to an account maintained by the payee with a bank located outside the United States. No payment in respect of this Note or any Coupon will be made upon presentation of this Note or such Coupon at any office or agency of the Trustee or any other paying agency maintained by the Company in the United States, nor will any such payment be made by transfer to an account, or by mail to an address, in the United States. Notwithstanding the foregoing, if U.S. dollar payments in respect of this Note or any Coupons at the offices of all Paying Agents outside the United States become illegal or are effectively precluded because of the imposition of exchange controls or similar restrictions on the full payment or receipt of such amounts in U.S. dollars, the Company will appoint an office or agency (which may be the Trustee) in the United States at which such payments may be made. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF AND IN ANY PRICING SUPPLEMENT ATTACHED HERETO OR DELIVERED HEREWITH, AND SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE. This Note shall not become valid or obligatory for any purpose unless and until this Note has been authenticated by Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), or its successor, as Trustee. 4 IN WITNESS WHEREOF, the Company has caused this Note to be executed under its corporate seal. Dated: CITIGROUP GLOBAL MARKETS HOLDINGS INC. By __________________________________ Authorized Officer [Seal] Attest ______________________________ Assistant Secretary CERTIFICATE OF AUTHENTICATION This is one of the Bearer Notes issued under the within-mentioned Indenture. Dated: DEUTSCHE BANK TRUST COMPANY AMERICAS (formerly BANKERS TRUST COMPANY), as Trustee By __________________________________ Authorized Signatory 5 (REVERSE OF SECURITY) CITIGROUP GLOBAL MARKETS HOLDINGS INC. MEDIUM-TERM SUBORDINATED NOTE, SERIES E DUE NINE MONTHS OR MORE FROM DATE OF ISSUE (FIXED RATE) General This Note is one of a series of duly authorized debt securities of the Company (the "Debt Securities") issued or to be issued in one or more series under an indenture, dated as of December 1, 1988, as amended (the "Indenture"), between the Company and Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), as trustee (the "Trustee," which term includes any successor Trustee under the Indenture), to which indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Debt Securities and of the terms upon which the Debt Securities are, and are to be, authenticated and delivered. The U.S. dollar equivalent of the public offering price or purchase price of Notes denominated in currencies other than U.S. dollars will be determined by the Company or its agent, as exchange rate agent for the Notes (the "Exchange Rate Agent") on the basis of the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York (the "Market Exchange Rate") for such currencies on the applicable issue dates. The Notes are in bearer form. Unless otherwise specified in the applicable pricing supplement, the authorized denominations of Bearer Notes denominated in U.S. dollars will be U.S.$1,000 and any larger amount that is an integral multiple of U.S.$1,000. The authorized denominations of Bearer Notes denominated in a currency other than U.S. dollars will be the approximate equivalents thereof in the Specified Currency. Fixed Rate Notes This Note will bear interest from its Original Issue Date, or from the last Interest Payment Date to which interest has been paid or duly provided for, at the Interest Rate stated on the face hereof or in the pricing supplement attached hereto or delivered herewith until the principal amount hereof is paid or made available for payment, except as otherwise described below under "Subsequent Interest Periods" and "Extension of Stated Maturity", and except that if so specified in the attached pricing supplement, the rate of interest payable may be subject to adjustment as specified therein. Unless otherwise set forth herein or in the pricing supplement attached hereto or delivered herewith, interest on this Note will be payable semiannually in arrears on the Interest Payment Dates set forth above and at Stated Maturity. If an Interest Payment Date with respect to any Note would otherwise be a day that is not a Business Day, such Interest Payment Date shall not be postponed; provided, however, that any payment required to be made in respect of such Note on a date (including the day of Stated Maturity) that is not a Business Day for such Note need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on such date, and no additional interest shall accrue as a result of such delayed payment. However, if with respect to any Note for which "Accrue to Pay" is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, any Interest Payment Date with respect to such Fixed Rate Note would otherwise be a day that is not a Business Day, such Interest Payment Date shall be postponed to the next succeeding Business Day. Each payment of interest in respect of an Interest Payment Date shall include interest accrued through the day before such Interest Payment Date. Unless otherwise specified herein, interest on this Note will be computed on the basis of a 360-day year of twelve 30-day months ("30 over 360") or, in the case of an incomplete month, the number of days elapsed. Subsequent Interest Periods If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Interest Rate on this Note may be reset by the Company on the date or dates specified on the face hereof or in the pricing supplement attached hereto or delivered herewith (each an "Optional Reset Date"). The Company may reset the Interest Rate by notifying the Trustee for this Note at least 45 but no more than 60 days prior to each Optional Reset Date. Not later than 40 days prior to each Optional Reset Date, the Trustee shall provide notice (the "Reset Notice"), in accordance with "Notices" below, indicating whether the Company has elected to reset the Interest Rate, and if so, (i) such new Interest Rate and (ii) the provisions, if any, for redemption during the period from such Optional Reset Date to the next Optional Reset Date, or, if there is no such next Optional Reset Date, to the Stated Maturity of this Note (each such period, a "Subsequent Interest Period"), including the date or dates on which or the period or periods during which and the price or prices at which such redemption may occur during the Subsequent Interest Period. Upon the transmittal by the Trustee of a Reset Notice to the Holder of a Note, such new Interest Rate shall take effect automatically. Except as modified by the Reset Notice and as described below, such Note will have the same terms as prior to the transmittal of such Reset Notice. Notwithstanding the foregoing, not later than 20 days prior to the Optional Reset Date, the Company may, at its option, revoke the Interest Rate provided for in the Reset Notice and establish a higher Interest Rate for the Subsequent Interest Period by causing the Trustee to provide notice of such higher Interest Rate to the Holder of this Note. Such notice shall be irrevocable. All Bearer Notes with respect to which the Interest Rate is reset on an Optional Reset Date will bear such higher Interest Rate. The Holder of this Note will have the option to elect repayment of the Note by the Company on each Optional Reset Date at a price equal to the principal amount hereof, plus interest accrued to such Optional Reset Date. In order to obtain repayment on an Optional Reset Date, the Holder must follow the procedures set forth below for optional repayment, except that the period for delivery or notification to the Paying Agent shall be at least 25 but not more than 35 days prior to such Optional Reset Date, and except that if the Holder has tendered this Note for repayment pursuant to a Reset Notice, the Holder may, by written notice to the Paying Agent, revoke such tender for repayment until the close of business on the tenth day before the Optional Reset Date. Indexed Notes If this Note is an Indexed Principal Note, then the principal amount payable at Stated Maturity or earlier redemption or retirement is determined by reference to the amount designated on the face hereof or in the pricing supplement attached hereto or delivered herewith as the Face Amount of this Note and by reference to the Index as described on the face hereof or in the pricing supplement attached hereto or delivered herewith. If this Note is an Indexed Principal Note, the principal amount payable at Stated Maturity or any earlier redemption or repayment of this Note may 2 be different from the Face Amount. If a third party is appointed to calculate or announce the Index for a particular Indexed Note and the third party either suspends the calculation or announcement of such Index or changes the basis upon which such Index is calculated in a manner that is inconsistent with the applicable pricing supplement, then the Company will select another third party to calculate or announce the Index. The agent or another affiliate of the Company may be either the original or successor third party selected by the Company. If for any reason such Index cannot be calculated on the same basis and subject to the same conditions and controls as applied to the original third party, then the indexed principal amount of this Note shall be calculated in the manner set forth in the applicable pricing supplement. Any determination of such third party shall in the absence of manifest error be binding on all parties. Payments in Currencies other than the Specified Currency Except as set forth below, if any payment in respect hereof is required to be made in a specified currency other than U.S. dollars and such currency is unavailable due to the imposition of exchange controls or other circumstances beyond the Company's control or is no longer used by the government of the country issuing such currency or for the settlement of transactions by public institutions of or within the international banking community, then such payment shall be made in U.S. dollars until such currency is again available or so used. The amount so payable in such foreign currency shall be converted into U.S. dollars on the basis of the most recently available Market Exchange Rate for such currency or as otherwise indicated on the face hereof or in the pricing supplement attached hereto or delivered herewith. Any payment made under such circumstances in U.S. dollars will not constitute a Default under the Indenture. In the event of an official redenomination of the Specified Currency of this Note (other than as a result of European Monetary Union, but including, without limitation, an official redenomination of any such Specified Currency that is a composite currency), the obligations of the Company with respect to payments on this Note shall, in all cases, be deemed immediately following such redenomination to provide for the payment of that amount of redenominated currency representing the amount of such obligations immediately before such redenomination. This Note does not provide for any adjustment to any amount payable under this Note as a result of (i) any change in the value of the Specified Currency hereof relative to any other currency due solely to fluctuations in exchange rates or (ii) any redenomination of any component currency of any composite currency (unless such composite currency is itself officially redenominated). Dual Currency Notes If this Note is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as a Dual Currency Note, the Company may have a one time option of making all payments of principal, premium, if any, and interest on all Dual Currency Notes issued on the same day and having the same terms (a "Tranche"), which payments would otherwise be made in the Specified Currency of such Notes, in an optional currency (the "Optional Payment Currency"). Such option will be exercisable in whole but not in part on an "Option Election Date," which will be any one of the dates specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. If the Company makes such an election, the amount payable in the Optional Payment Currency shall be determined using the Designated Exchange Rate specified on the face hereof or in 3 the pricing supplement attached hereto or delivered herewith. If such election is made, notice of such election shall be provided in accordance with "Notices" below, within two Business Days of the Option Election Date and shall state (i) the first date, whether an Interest Payment Date and/or Stated Maturity, in which scheduled payments in the Optional Payment Currency will be made and (ii) the Designated Exchange Rate. Any such notice by the Company, once given, may not be withdrawn. The equivalent value in the Specified Currency of payments made after such an election may be less, at the then current exchange rate, than if the Company had made such payment in the Specified Currency. Renewable Notes If this Note is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as a Renewable Note, this Note will mature on an Interest Payment Date occurring in or prior to the twelfth month following the Original Issue Date of this Note (the "Initial Maturity Date") unless the term of all or any portion of this Note is renewed in accordance with the following procedures: On the Interest Payment Date occurring in the sixth month (unless a different interval (the "Special Election Interval") is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith) prior to the Initial Maturity Date of this Note (the "Initial Renewal Date") and on the Interest Payment Date occurring in each sixth month (or in the last month of each Special Election Interval) after such Initial Renewal Date (each, together with the Initial Renewal Date, a "Renewal Date"), the term of this Note may be extended to the Interest Payment Date occurring in the twelfth month (or, if a Special Election Interval is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the last month in a period equal to twice the Special Election Interval) after such Renewal Date, if the Holder of this Note elects to extend the term of this Note or any portion thereof as described below. If the Holder does not elect to extend the term of any portion of the principal amount of this Note during the specified period prior to any Renewal Date, such portion will become due and payable on the Interest Payment Date occurring in the sixth month (or the last month in the Special Election Interval) after such Renewal Date (the "New Maturity Date"). The Holder may elect to renew the term of this Note, or if so specified, any portion thereof, by delivering a notice to such effect to any duly appointed paying agent not less than 15 nor more than 30 days prior to such Renewal Date, unless another period is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Such election will be irrevocable and will be binding upon each subsequent Holder of this Note. An election to renew the term of this Note may be exercised with respect to less than the entire principal amount of this Note only if so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith and then only in such principal amount, or any integral multiple in excess thereof, as is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Notwithstanding the foregoing, the term of this Note may not be extended beyond the Stated Maturity specified for this Note on the face hereof or in the pricing supplement attached hereto or delivered herewith. If the Holder does not elect to renew the term, this Note must be presented to such paying agent and, as soon as practicable following receipt of such Note such paying agent shall issue in exchange therefor in the name of such Holder (i) a Note, in a principal amount equal to the principal amount of such exchanged Note for which no election to renew the term thereof was exercised, with terms identical to those specified on such exchanged Note (except that such Note 4 shall have a fixed, nonrenewable Stated Maturity on the New Maturity Date) and (ii) if an election to renew is made with respect to less than the full principal amount of such Holder's Note, such paying agent shall issue in exchange for such Note in the name of such Holder a replacement Renewable Note, in a principal amount equal to the principal amount of such exchanged Note for which the election to renew was made, with terms otherwise identical to the exchanged Note. Extension of Stated Maturity If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Stated Maturity of this Note may be extended at the option of the Company for one or more periods of whole years specified on the face hereof or in the pricing supplement attached hereto or delivered herewith (each an "Extension Period") from one to five years up to but not beyond the date (the "Final Maturity") set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith. The Company may exercise such option by notifying the Trustee for this Note at least 45 days but not more than 60 days prior to the original Stated Maturity of this Note. If the Company exercises such option, the Trustee shall provide to the Holder of this Note not later than 40 days prior to the original Stated Maturity notice (the "Extension Notice") in accordance with "Notices" below. The Extension Notice will set forth (i) the election of the Company to extend the Stated Maturity, (ii) the new Stated Maturity, (iii) the interest rate applicable to the Extension Period, and (iv) the provisions, if any, for redemption during the Extension Period, including the date or dates on which or the period or periods during which and the price or prices at which such redemption may occur during the Extension Period. Upon the provision by such Trustee of an Extension Notice to the Holder hereof, the Stated Maturity of this Note shall be extended automatically, and, except as modified by the Extension Notice and as described in the next paragraph, this Note will have the same terms as prior to the provision of such Notice. Notwithstanding the foregoing, not later than 20 days prior to the original Stated Maturity of this Note, the Company may, at its option, revoke the interest rate provided for in the Extension Notice for this Note and establish a higher Spread or Spread Multiplier (in the case of a Floating Rate Note) for the Extension Period, by causing the Trustee to provide notice of such higher interest rate, as the case may be, to the Holder hereof in accordance with "Notices" below. Such notice shall be irrevocable. All Notes with respect to which the Stated Maturity is extended will bear such higher interest rate for the Extension Period, whether or not tendered for repayment. If the Company extends the Stated Maturity of this Note, the Holder will have the option to elect repayment of this Note by the Company on the original Stated Maturity at a price equal to the principal amount hereof, plus interest accrued to such date. In order to obtain repayment on such original Stated Maturity once the Company has extended the Stated Maturity hereof, the Holder must follow the procedures set forth below for optional repayment, except that the period for delivery of this Note or notification to the Paying Agent shall be at least 25 but not more than 35 days before the original Stated Maturity, and except that if the Holder has tendered this Note for repayment pursuant to an Extension Notice, the Holder may, by written notice to the Trustee, revoke such tender for repayment until the close of business on the tenth calendar day before the original Stated Maturity. Optional Redemption, Repayment and Repurchase If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Company may, at its option, redeem this Note in whole or in part, on the date 5 or dates (each an "Optional Redemption Date") specified herein, at the price (the "Redemption Price") (together with accrued interest to such Optional Redemption Date) specified herein. If required under the Federal Reserve Capital Adequacy Rules, the Company will obtain the prior approval of the Federal Reserve before exercising its redemption rights. If the Company elects to exercise such option with respect to this Note, at least 30 days prior to the date of redemption, such Trustee shall provide notice of such redemption to the Holder hereof in accordance with "Notices" below. In the event of redemption of this Note in part only, a new Note or Notes for the unredeemed portion hereof shall be issued to the Holder hereof upon the cancellation hereof. Notes redeemed prior to Stated Maturity must be presented for payment together with all unmatured Coupons, if any, appertaining thereto, failing which the amount of any missing unmatured Coupon will be deducted from the sum due for payment. If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, this Note will be repayable prior to Stated Maturity at the option of the Holder on the Optional Repayment Dates shown on the face hereof or in the pricing supplement attached hereto or delivered herewith at the Optional Repayment Prices shown on the face hereof or in the pricing supplement attached hereto or delivered herewith, together with accrued interest to the date of repayment. Notes that are to be repaid prior to Stated Maturity must be presented for payment together with all unmatured Coupons, if any, appertaining thereto, failing which the amount of any missing unmatured Coupon will be deducted from the sum due for payment. In order for this Note to be repaid, the Principal Paying Agent must receive this Note at least 30 but not more than 45 days prior to an Optional Repayment Date. Any tender of this Note for repayment (except pursuant to a Reset Notice or an Extension Notice) shall be irrevocable. The repayment option may be exercised by the Holder of this Note for less than the entire principal amount of this Note; provided that the principal amount of this Note remaining outstanding after repayment is an authorized denomination. Upon such partial repayment, this Note shall be canceled and a new Note or Notes for the remaining principal amount hereof shall be issued to the Holder of this Note. Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, this Note will not be subject to any sinking fund. Notwithstanding anything herein to the contrary, if this Note is a Discount Note, the amount payable in the event of redemption or repayment prior to the Stated Maturity hereof (other than pursuant to an optional redemption by the Company at a stated Redemption Price), in lieu of the principal amount due at the Stated Maturity hereof, shall be the Amortized Face Amount of this Note as of the redemption date or the date of repayment, as the case may be. The Amortized Face Amount of this Note on any date shall be the amount equal to (i) the Issue Price set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith plus (ii) that portion of the difference between such Issue Price and the stated principal amount of such Note that has accrued by such date at (x) the Bond Yield to Maturity set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith or (y) if so specified, the Bond Yield to Call set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith (computed in each case in accordance with generally accepted United States bond yield computation principles); provided, however, that in no event shall the Amortized Face Amount of a Note exceed its stated principal amount. The Bond Yield to Call listed on the face of this Note or in the pricing supplement attached hereto or delivered herewith shall be computed on the basis of the first occurring Optional Redemption Date with respect to such Note and the amount payable on such Optional Redemption 6 Date. In the event that such Note is not redeemed on such first occurring Optional Redemption Date, the Bond Yield to Call with respect to such Note shall be recomputed on such Optional Redemption Date on the basis of the next occurring Optional Redemption Date and the amount payable on such Optional Redemption Date, and shall continue to be so recomputed on each succeeding Optional Redemption Date until the Note is so redeemed. Tax Redemption The Bearer Notes of a series may be redeemed at the option of the Company in whole, but not in part, at any time on giving at least 30 but not more than 60 days' notice in accordance with "Notices" below (which notice shall be irrevocable), at the respective Redemption Prices thereof, if the Company has or will become obligated to pay additional interest on such Notes as described in the following paragraph as a result of any change in, or amendment to, the laws (or any regulations or rulings promulgated thereunder) of the United States or any political subdivision or taxing authority thereof or therein, or any change in the application or official interpretation of such laws, regulations or rulings, which change or amendment becomes effective on or after their respective Original Issue Dates, and such obligation cannot be avoided by the Company taking reasonable measures available to it; provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Company would be obligated to pay such additional interest were a payment in respect of such Notes then due. Prior to the publication of any notice of redemption pursuant to this paragraph, the Company shall deliver to the Trustee for the Notes to be redeemed a certificate stating that the Company is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Company so to redeem have occurred, and an opinion of independent counsel to the effect that the Company has or will become obligated to pay such additional interest as a result of such change or amendment. Payment of Additional Interest The Company will, subject to the exceptions and limitations set forth below, pay as additional interest to the Holder of this Note or any Coupon that is a United States Alien (as defined below) such amounts as may be necessary so that every net payment on this Note or such Coupon, after deduction or withholding for or on account of any present or future tax, assessment or other governmental charge imposed upon or as a result of such payment by the United States (or any political subdivision or taxing authority thereof or therein), will not be less than the amount provided in this Note or such Coupon to be then due and payable. However, the Company will not be required to make any such payment of additional interest to such Holder for or an account of: (a) any tax, assessment or other governmental charge that would not have been imposed but for (i) the existence of any present or former connection between such Holder (or between a fiduciary, settlor or beneficiary of, or a Person holding a power over, such Holder, if such Holder is an estate or a trust, or a member or shareholder of such Holder, if such Holder is a partnership or a corporation) and the United States, including, without limitation, such Holder (or such fiduciary, settlor, beneficiary, Person holding a power, member or shareholder) being or having been a citizen or resident thereof or being or having been engaged in trade or business or present therein or having or having had a permanent establishment therein or (ii) such Holder's past or present status as a passive foreign investment company, a personal holding company, foreign personal holding company, a controlled foreign corporation for United States tax purposes or private foundation or other 7 tax-exempt organization with respect to the United States or as a corporation that accumulates earnings to avoid United States federal income tax; (b) any estate, inheritance, gift, sales, transfer or personal property tax or any similar tax, assessment or other governmental charge; (c) any tax, assessment or other governmental charge that would not have been imposed but for the presentation by the Holder of this Note or such Coupon for payment more than 15 days after the date on which such payment became due and payable or on which payment thereof was duly provided for, whichever occurred later; (d) any tax, assessment or other governmental charge that is payable otherwise than by deduction or withholding from a payment on this Note or such Coupon; (e) any tax, assessment or other governmental charge required to be deducted or withheld by any Paying Agent from a payment on this Note or such Coupon, if such payment can be made without such deduction or withholding by any other Paying Agent; (f) any tax, assessment or other governmental charge imposed on a Holder that actually or constructively owns ten percent or more of the combined voting power of all classes of stock of the Company or is a controlled foreign corporation related to the Company through stock ownership; nor shall such additional interest be paid with respect to a payment on this Note or such Coupon to a Holder that is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner would not have been entitled to the additional interest had such beneficiary, settlor, member or beneficial owner been the Holder of this Note or such Coupon. The term "United States Alien" means any person who, for United States federal income tax purposes, is a foreign corporation, a nonresident alien individual, a nonresident alien fiduciary of a foreign estate or trust, or a foreign partnership one or more of the members of which is, for United States federal income tax purposes, a foreign corporation, a nonresident alien individual or a nonresident alien fiduciary of a foreign estate or trust. Special Tax Redemption If the Company shall determine that any payment made outside the United States by the Company or any of its Paying Agents in respect of this Note or any Coupon appertaining thereto would, under any present or future laws or regulations of the United States, be subject to any certification, documentation, information or other reporting requirement of any kind, the effect of which requirement is the disclosure to the Company, any Paying Agent or any governmental authority of the nationality, residence or identity of a beneficial owner that is a United States Alien (other than such a requirement (a) that would not be applicable to a payment made by the Company or any one of its Paying Agents (i) directly to the beneficial owner or (ii) to a custodian, nominee or other agent of the beneficial owner or (b) that can be satisfied by such custodian, nominee or other agent certifying to the effect that the beneficial owner is a United States Alien; provided that, in any case referred to in clause (a) (ii) or (b), payment by the custodian, nominee, or agent to the beneficial owner is not otherwise subject to any such requirement), then the Company shall elect either (x) to redeem such Note in whole, but not in part, at its Redemption Price, or (y) if the conditions described 8 in the next succeeding paragraph are satisfied, to pay the additional interest specified in such paragraph. The Company shall make such determination as soon as practicable and publish prompt notice thereof stating the effective date of such certification, documentation, information or other reporting requirement, whether the Company elects to redeem the Note or to pay the additional interest specified in the next succeeding paragraph and (if applicable) the last date by which the redemption of the Note must take place. If this Note is to be redeemed as described in this paragraph, the redemption shall take place on such date, not later than one year after the publication of the determination notice, as the Company shall specify by notice given to the Trustee at least 60 days before the redemption date. Notice of such redemption shall be given to the Holder of this Note at least 30 but not more than 60 days prior to the redemption date. Notwithstanding the foregoing, the Company shall not so redeem the Note if the Company shall subsequently determine, at least 30 days prior to the redemption date, that subsequent payments on the Note would not be subject to any such certification, documentation, information or other reporting requirement, in which case the Company shall publish prompt notice of such subsequent determination and any earlier redemption notice given shall be revoked and of no further effect. Prior to the publication of any determination notice, the Company shall deliver to the Trustee for the Note to be redeemed a certificate stating that the Company is obligated to make such determination and setting forth a statement of facts showing that the conditions precedent to the obligation of the Company to redeem the Note or to pay the additional interest specified in the next succeeding paragraph have occurred, and an opinion of independent counsel to the effect that such conditions have occurred. If and so long as the certification, documentation, information or other reporting requirement referred to in the preceding paragraph would be fully satisfied by payment of a backup withholding tax or similar charge, the Company may elect to pay as additional interest such amounts as may be necessary so that every net payment made outside the United States following the effective date of such requirement by the Company or any of its Paying Agents of which the beneficial owner is a United States Alien (but without any requirement that the nationality, residence or identity of such beneficial owner be disclosed to the Company, any paying agent or any governmental authority), after deduction or withholding for or on account of such backup withholding tax or similar charge (other than a backup withholding tax or similar charge that (i) would not be applicable in the circumstances referred to in the parenthetical clause of the first sentence of the first paragraph of this section or (ii) is imposed as a result of presentation of this Note for payment more than 15 days after the date on which such payment became due and payable or on which payment thereof was duly provided for, whichever occurred later), will not be less than the amount then due and payable. If the Company elects to pay additional interest, then the Company shall have the right thereafter to redeem this Note at any time in whole, but not in part, at the Redemption Price, subject to the provisions described above. If the Company elects to pay additional interest and the condition specified above should no longer be satisfied, then the Company shall redeem this Note in whole, but not in part, at the Redemption Price, subject to the provisions of this section. Any such redemption payments made by the Company shall be subject to the continuing obligation of the Company to pay additional interest as described above. 9 Paying Agents The Company has initially appointed as its Paying Agents for Bearer Notes of this Series the offices listed below: Principal Paying Agent: Deutsche Bank U.K. Winchester House 1 Great Winchester Street London, England EC2 N2DB Paying Agent: Deutsche Bank Luxembourg P.O. Box 586 L-2015 Luxembourg The Company reserves the right at any time to vary or terminate the appointment of any Paying Agent and to appoint additional or other Paying Agents and to approve any change in the office through which any Paying Agent acts, provided that there will at all times be a Paying Agent (which may be the Trustee) in at least one city in Europe, which, so long as Bearer Notes are listed on the Luxembourg Stock Exchange and the rules of that exchange shall so require, shall include Luxembourg. Notice of any such termination or appointment and of any changes in the specified offices of the Trustee or any Paying Agent will be given to the Holder hereof as described below. Notices All notices to Holders of this Note will be deemed to have been duly given if published on two separate Business Days in a leading London daily newspaper (which is expected to be the Financial Times) and, with respect to any series of Bearer Notes that may be listed on the Luxembourg Stock Exchange, if such exchange so requires, in Luxembourg in a newspaper of general circulation in Luxembourg (which is expected to be the Luxemburger Wort). Such notices shall be deemed to have been given on the date of the first such publication. Other Terms As provided in the Indenture and subject to certain limitations therein set forth, this Note is exchangeable for a like aggregate principal amount of Bearer Notes of different authorized denominations, as requested by the Person surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the Holder hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. 10 If an Event of Default with respect to the Debt Securities of this series shall have occurred and be continuing, the principal of all the Debt Securities of this series may be declared due and payable in this manner and with the effect provided in the Indenture. In case this Note or any Coupon shall at any time become mutilated, destroyed, stolen or lost, it may be replaced at the specified office of the Principal Paying Agent in London; or, with respect to any series of Bearer Notes that are listed on the Luxembourg Stock Exchange, at the specified office of the Paying Agent in Luxembourg, upon payment by the claimant of such expenses as may be incurred in connection therewith and, in the case of destruction, theft or loss, on such terms as to evidence and indemnity as the Company or the Trustee may reasonably require. Mutilated or defaced Bearer Notes or Coupons must be surrendered before replacements will be issued. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Debt Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of Debt Securities at the time outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Debt Securities of any series at the time outstanding, on behalf of the Holders of all the Debt Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Debt Security shall be conclusive and binding upon such Holder and upon all future Holders of this Debt Security and of any Debt Security issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon the Debt Security. Holders of Debt Securities may not enforce their rights pursuant to the Indenture or the Note except as provided in the Indenture. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed. The Company may, without the consent of the Holders of the Notes, consolidate with, merge into, or transfer substantially all of its assets to, a corporation, provided that the successor corporation assumes all obligations of the Company under the Notes and certain other conditions are met. Except as provided above, the obligation to pay the principal hereof (and premium, if any) and interest hereon in the designated currency of payment is of the essence. To the fullest extent possible under applicable law, judgments in respect of this Note shall be given in such currency. The obligation of the Company to make such payments in the designated currency of payment shall, notwithstanding any payment in any other currency (whether pursuant to a judgment or otherwise), be discharged only to the extent of the amount in the designated currency of payment that the Holder of this Note may, in accordance with normal banking procedures, purchase with the sum paid in such other currency (after any premium and cost of exchange) on the business day in the country of issue of the designated currency of payment or in the international banking community (in the case of a composite currency) immediately following the day on which such Holder receives such payment. If the amount in the designated currency of payment that may be so purchased is for any 11 reason less than the amount originally due, the Company shall, as a separate and independent obligation, pay such additional amounts in the designated currency of payment as may be necessary to compensate for any such shortfall. This Note shall be deemed to be a contract made and to be performed solely in the State of New York and for all purposes be governed by, and construed in accordance with, the laws of said State without regard to the conflicts of law rules of said State. All terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in the Indenture. 12 BEARER PRINCIPAL AMOUNT NO. FL___ OR FACE AMOUNT $_________________ CUSIP: ___________ CITIGROUP GLOBAL MARKETS HOLDINGS INC. COMMON CODE MEDIUM-TERM SUBORDINATED NOTE, SERIES E DUE NINE MONTHS OR MORE FROM DATE OF ISSUE (FLOATING OR INDEXED RATE) ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTION 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE. IF APPLICABLE, THE "TOTAL AMOUNT OF OID" AND "YIELD TO MATURITY" SET FORTH BELOW WILL BE COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE UNITED STATES FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES. Issue Price: Original Issue Date: Initial Interest Rate: Stated Maturity: Specified Currency (If other than U.S. dollars): Authorized Denominations: (If other than as set forth in the Prospectus Supplement) Dual Currency Note: [ ] Yes (see attached) [ ] No Optional Payment Currency: Designated Exchange Rate: Base Rate: [ ] CD Rate [ ] Commercial Paper Rate [ ] Federal Funds Rate [ ] LIBOR Telerate [ ] LIBOR Reuters [ ] Treasury Rate [ ] Treasury Rate Constant Maturity [ ] Prime Rate [ ] Eleventh District [ ] EURIBOR Cost of Funds Rate [ ] Other (see attached) Interest Reset Period Index Maturity: or Interest Reset Dates: Interest Payment Dates: Accrue to Pay: [ ] Yes [ ] No Indexed Principal Note: [ ] Yes see attached) [ ] No Floating Rate: [ ] Indexed Interest Rate: [ ](see attached) Spread Multiplier: Spread (+/-): Spread Reset: [ ] The Spread or Spread Multiplier may not be changed prior to Stated Maturity. [ ] The Spread or Spread Multiplier may be changed prior to Stated Maturity (see attached). Optional Reset Dates (if applicable): Maximum Interest Rate: Minimum Interest Rate: Inverse Floating Rate Note: [ ] Yes (see attached) [ ] No Initial Fixed Interest Rate: Reset Fixed Reference Rate Floating Rate / Fixed Rate Note: [ ] Yes (see attached) [ ] No Amortizing Note: [ ] Yes [ ] No Amortization Schedule: Optional Redemption: [ ] Yes [ ] No Optional Redemption Dates: Redemption Prices: Bond Yield to Maturity: Bond Yield to Call: Optional Repayment: [ ] Yes [ ] No Optional Repayment Dates: Optional Repayment Prices: 2 Optional Extension of [ ] Yes [ ] No Stated Maturity: Final Maturity: Discount Note: [ ] Yes [ ] No Total Amount of OID: Yield to Maturity: Renewable Note: [ ] Yes (see attached) [ ] No Initial Maturity Date: Special Election Interval (if applicable): Amount (if less than entire principal amount) as to which election may be exercised: If the Specified Currency of this Note is Pounds sterling, the following applies: This instrument constitutes [ ] commercial paper [ ] a shorter term debt security [ ] a longer term debt security issued in accordance with regulations made under section 4 of the Banking Act 1987. The issuer of this Note is Citigroup Global Markets Holdings Inc., which is not an authorized institution or a European authorized institution (as such terms are defined in the Banking Act 1987 (Exempt Transactions) Regulation 1997). Repayment of the principal and payment of any interest or premium in connection with this Note has not been guaranteed. IF THE SPECIFIED CURRENCY OF THIS NOTE IS POUNDS STERLING, THE FOLLOWING APPLIES: THIS NOTE IS ISSUED IN ACCORDANCE WITH THE REGULATIONS MADE UNDER SECTION 4 OF THE BANKING ACT 1987. 3 CITIGROUP GLOBAL MARKETS HOLDINGS INC., a corporation duly organized and existing under the laws of the State of New York (herein referred to as the "Company"), for value received hereby promises to pay to bearer, upon presentation and surrender hereof, (a) the Principal Amount or, in the case of an Indexed Principal Note, the Face Amount adjusted by reference to prices, changes in prices, or differences between prices, of securities, currencies, intangibles, goods, articles or commodities or by such other objective price, economic or other measures (an "Index") as described on the face hereof or in the pricing supplement attached hereto or delivered herewith, in the Specified Currency on the Stated Maturity shown above or earlier if and to the extent so provided herein, and (b) accrued interest on the Principal Amount then outstanding (or, in the case of an Indexed Principal Note, the Face Amount then outstanding): (i) if this is a Floating Rate Note, at the Initial Interest Rate shown above from the Original Issue Date shown above until the first Interest Reset Date shown above following the Original Issue Date and thereafter at the Base Rate shown above, adjusted by the Spread or Spread Multiplier, if any, shown above, determined in accordance with the provisions hereof, (ii) if this is an Indexed Rate Note, at a rate determined by reference to an Index as described herein, (iii) if this is an Inverse Floating Rate Note, at the Initial Interest Rate shown above from the Original Issue Date shown above until the first Interest Reset Date shown above following the Original Issue Date and thereafter at the Inverse Floating Rate, as determined in accordance with the provisions hereof, or (iv) if this is a Floating Rate / Fixed Rate Note, at a rate determined as described herein, to the bearer of the interest coupons attached hereto (the "Coupons") upon surrender thereof as they shall severally mature at the rates per annum and on the dates, determined as described on the reverse hereof, until, in each case, the Principal Amount or the Face Amount then outstanding is paid or duly provided for in accordance with the terms hereof. For purposes of this Note, "Business Day" means: (i) with respect to any Bearer Note, any day that is not a Saturday or Sunday and that is (i) not a day on which banking institutions are authorized or required by law or regulation to be closed in (a) The City of New York, (b) London, England, (c) the place in which this Note or any Coupon is presented for payment or (d) if the Specified Currency (as defined below) is other than U.S. dollars, the financial center of the country issuing the Specified Currency (which in the case of the Euro shall be Brussels, Belgium) and (ii) if the Base Rate specified above is LIBOR, a London Banking Day. "London Banking Day" means any day on which dealings in deposits in the Specified Currency are transacted in the London interbank market (a "London Business Day"); (iii) with respect to Bearer Notes having any determination by the exchange rate agent (as defined below) of an exchange rate pursuant to notes having a Specified Currency other than U.S. dollars, a day on which banking institutions and foreign exchange markets settle payments in the City of New York and London (an "Exchange Rate Business Day"); (iv) with respect to Bearer Notes having a Specified Currency other than US. Dollars only, other than bearer notes denominated in Euros, any day that, in the principal financial center (as defined below) of the country of the Specified Currency, is not a day on which banking institutions generally are authorized or obligated by law to close; and (V) with respect to EURIBOR Notes and Notes denominated in Euros, a day on which the Trans European Automated Real Time Gross Settlement Express Transfer ("TARGET") System is open (a "Target Business Day"). As used above, a "principal financial center" means the capital city of the country issuing the Specified Currency. However, with respect to U.S. dollars, Australian dollars, Canadian dollars, and Swiss francs, the principal financial center shall be The City of New York, Sydney, Toronto, and Zurich, respectively. 4 The indebtedness evidenced by this Note is, to the extent set forth in the Indenture, expressly subordinated and subject in right of payment to the prior payment in full of Senior Indebtedness as defined in the Indenture, and this Note is issued subject to such provisions, and each Holder of this Note, by accepting the same, agrees to and shall be bound by such provisions and authorizes and directs the Trustee in his behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination as provided in the Indenture and appoints the Trustee as his attorney-in-fact for any and all such purposes. If this Note is an Amortizing Note as shown on the face hereof or in the pricing supplement attached hereto or delivered herewith, a portion or all the principal amount of the Note is payable prior to Stated Maturity in accordance with a schedule, by application of a formula, or by reference to an Index (as described above). Except under certain circumstances that may apply if this Note has a Specified Currency other than U.S. dollars, payments of the principal hereof and any premium and interest hereon will be made only in the Specified Currency. Payments in respect of this Note and any Coupon will be made only against surrender of this Note or such Coupon, at the offices of the Paying Agents outside the United States listed on the reverse hereof. At the direction of the Holder of this Note or any Coupon, and subject to applicable laws and regulations, such payments will be made by check drawn on a bank in The City of New York (in the case of U.S. dollar payments) or outside the United States (in the case of payments in a currency other than U.S. dollars) mailed to an address outside the United States furnished by the Holder hereof or, at the option of the Holder hereof, by wire transfer (pursuant to written instructions supplied by the Holder hereof) to an account maintained by the payee with a bank located outside the United States. No payment in respect of this Note or any Coupon will be made upon presentation of this Note or such Coupon at any office or agency of the Trustee or any other paying agency maintained by the Company in the United States, nor will any such payment be made by transfer to an account, or by mail to an address, in the United States. Notwithstanding the foregoing, if U.S. dollar payments in respect of this Note or any Coupons at the offices of all Paying Agents outside the United States become illegal or are effectively precluded because of the imposition of exchange controls or similar restrictions on the full payment or receipt of such amounts in U.S. dollars, the Company will appoint an office or agency (which may be the Trustee) in the United States at which such payments may be made. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF AND IN ANY PRICING SUPPLEMENT ATTACHED HERETO OR DELIVERED HEREWITH, AND SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE. This Note shall not become valid or obligatory for any purpose unless and until this Note has been authenticated by Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), or its successor, as Trustee. 5 IN WITNESS WHEREOF, the Company has caused this Note to be executed under its corporate seal. Dated: CITIGROUP GLOBAL MARKETS HOLDINGS INC. By____________________________________ Authorized Officer [Seal] Attest________________________________ Assistant Secretary CERTIFICATE OF AUTHENTICATION This is one of the Notes issued under the within-mentioned Indenture. Dated: DEUTSCHE BANK TRUST COMPANY AMERICAS (formerly BANKERS TRUST COMPANY), as Trustee By____________________________________ Authorized Signatory 6 (REVERSE OF SECURITY) CITIGROUP GLOBAL MARKETS HOLDINGS INC. MEDIUM-TERM SUBORDINATED NOTE, SERIES E DUE NINE MONTHS OR MORE FROM DATE OF ISSUE (FLOATING OR INDEXED RATE) General This Note is one of a series of duly authorized debt securities of the Company (the "Debt Securities") issued or to be issued in one or more series under an indenture, dated as of December 1, 1988, as amended (the "Indenture"), between the Company and Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), as trustee (the "Trustee," which term includes any successor Trustee under the Indenture) to which indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Debt Securities and of the terms upon which the Debt Securities are, and are to be, authenticated and delivered. The U.S. dollar equivalent of the public offering price or purchase price of Notes denominated in currencies other than U.S. dollars will be determined by the Company or its agent, as exchange rate agent for the Notes (the "Exchange Rate Agent") on the basis of the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York (the "Market Exchange Rate") for such currencies on the applicable issue dates. The Notes are in bearer form with coupons. Unless otherwise specified in the applicable pricing supplement, the authorized denominations of Bearer Notes denominated in U.S. dollars will be U.S.$10,000 and any larger amount that is an integral multiple of U.S.$1,000. The authorized denominations of Bearer Notes denominated in a currency other than U.S. dollars will be the approximate equivalents thereof in the Specified Currency. Floating Rate Notes Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, if this Note is a Floating Rate Note, this Note will bear interest from its Original Issue Date to, but not including, the first Interest Reset Date (as defined below) at the Initial Interest Rate set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith. Thereafter, the interest rate hereon for each Interest Reset Period will be determined by reference to the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, plus or minus the Spread, if any, or multiplied by the Spread Multiplier, if any, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. The Base Rates that may be specified on the face hereof or in the pricing supplement attached hereto or delivered herewith are LIBOR, the Commercial Paper Rate, the Treasury Rate, the Federal Funds Rate, the CD Rate, the Prime Rate, the Eleventh District Cost of Funds Rate, EURIBOR or any other Base Rate specified on the face hereof. 1 "H.15(519)" means the publication entitled "Statistical Release H.15(519), Selected Interest Rates" or any successor publication, published by the Board of Governors of the Federal Reserve System. "H.15 Daily Update" means the daily update of the Board of Governors of the Federal Reserve System at http://www.bog.frb.fed.us/releases/H15/update or any successor site or publication. "Calculation Date," where applicable, means the date on which the Calculation Agent is to calculate the interest rate for the Notes which shall be the earlier of (1) the tenth calendar day after the related Rate Determination Date, or if any such day is not a Business Day, the next succeeding business day or (2) the Business Day preceding the applicable Interest Payment Date or the Stated Maturity, as the case may be. As specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, this Note may also have either or both of the following (in each case expressed as a rate per annum on a simple interest basis): (i) a maximum limitation, or ceiling, on the rate at which interest may accrue during any interest period ("Maximum Interest Rate") and/or (ii) a minimum limitation, or floor, on the rate at which interest may accrue during any interest period ("Minimum Interest Rate"). In addition to any Maximum Interest Rate that may be specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the interest rate will in no event be higher than the maximum rate permitted by applicable law, as the same may be modified by United States law of general application. The Company will appoint, and enter into an agreement with, agents (each, a "Calculation Agent") to calculate interest rates on this Note. All determinations of interest rates by the Calculation Agent shall, in the absence of manifest error, be conclusive for all purposes and binding on the Holder hereof. Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), shall be the Calculation Agent for this Note. At the request of the Holder hereof, the Calculation Agent will provide the interest rate then in effect and, if determined, the interest rate that will become effective on the next Interest Reset Date. The interest rate hereon will be reset daily, weekly, monthly, quarterly, semiannually or annually (such period being the "Interest Reset Period" specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, and the first day of each Interest Reset Period being an "Interest Reset Date"). Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Interest Reset Dates will be as follows: (i) if this Note resets daily, each Business Day; (ii) if this Note (unless this Note is a Treasury Rate Note) resets weekly, Wednesday of each week; (iii) if this Note is a Treasury Rate Note that resets weekly, Tuesday of each week (except as provided below under "Determination of Treasury Rate"); (iv) if this Note resets monthly, the third Wednesday of each month (with the exception of monthly reset Eleventh District Cost of Funds Rate Notes, which reset on the first calendar day of each month); (v) if this Note is an Eleventh District Cost of Funds Rate Note that resets monthly, the first calendar day of each month; (vi) if this Note resets quarterly, the third Wednesday of March, June, September and December of each year; (vii) if this Note resets semiannually, the third Wednesday of the two months of each year specified on the face hereof or in the pricing supplement attached hereto or delivered herewith; and (viii) if this Note resets annually, the third Wednesday of the month of 2 each year specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. If an Interest Reset Date would otherwise be a day that is not a Business Day, such Interest Reset Date shall be postponed to the next succeeding Business Day, except that, if the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is LIBOR or EURIBOR and such Business Day is in the next succeeding calendar month, such Interest Reset Date shall instead be the immediately preceding Business Day. If an auction of direct obligations of United States Treasury Bills falls on a day that is an Interest Reset Date for Treasury Rate Notes, the Interest Reset Date shall be the succeeding Business Day. Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the interest payable hereon on each Interest Payment Date shall be the accrued interest from and including the Original Issue Date or the last date to which interest has been paid, as the case may be, to but excluding such Interest Payment Date. If more than one Interest Reset Date occurs during any period for which accrued interest is being calculated, accrued interest shall be calculated by multiplying the principal amount hereof (or if this Note is an Indexed Principal Note, the Face Amount specified on the face hereof or in the pricing supplement attached hereto or delivered herewith) by an accrued interest factor. Such accrued interest factor will be computed by adding the interest factors calculated for each day in the period for which accrued interest is being calculated. The interest factor (expressed as a decimal calculated to seven decimal places without rounding) for each such day will be computed, unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, by dividing the interest rate in effect on such day by 360, if the Base Rate specified on the face hereof is the Commercial Paper Rate, the Federal Funds Rate, the CD Rate, the Prime Rate, the Eleventh District Cost of Funds Rate, LIBOR, or EURIBOR, or by the actual number of days in the year, if the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is the Treasury Rate. In all other cases, accrued interest shall be calculated by multiplying the principal amount hereof (or if this Note is an Indexed Principal Note, the Face Amount specified on the face hereof) by the interest rate in effect during the period for which accrued interest is being calculated, and multiplying that product by the quotient obtained by dividing the number of days in the period for which accrued interest is being calculated by 360, if the Base Rate specified on the face hereof is the Commercial Paper Rate, the Federal Funds Rate, the CD Rate, the Prime Rate, the Eleventh District Cost of Funds Rate, LIBOR, or EURIBOR, or by the actual number of days in the year, if the Base Rate specified on the face hereof is the Treasury Rate. For purposes of making the foregoing calculations, the interest rate in effect on any Interest Reset Date will be the applicable rate as reset on such date. Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, all percentages resulting from any calculation of the rate of interest hereof will be rounded, if necessary, to the nearest 1/100,000 of 1% (.0000001), with five one-millionths of a percentage point rounded upward, and all currency amounts used in or resulting from such calculation will be rounded to the nearest one-hundredth of a unit (with .005 of a unit being rounded upward). Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, interest will be payable as follows: (i) if this Note resets daily, weekly or monthly (other than Eleventh District Cost of Funds Rate Notes), interest will be payable on the third Wednesday of each month or on the third Wednesday of March, June, September and 3 December of each year, as specified on the face hereof or in the pricing supplement attached hereto or delivered herewith or; (ii) in the case of Eleventh District Cost of Funds Rate Notes, interest will be payable on the first calendar day of each March, June, September and December; (iii) if this Note resets quarterly, interest will be payable on the third Wednesday of March, June, September, and December of each year; (iv) if this Note resets semiannually, interest will be payable on the third Wednesday of each of two months of each year specified on the face hereof or in the pricing supplement attached hereto or delivered herewith; and (v) if this Note resets annually, interest will be payable on the third Wednesday of the month of each year specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, and in each case at Stated Maturity (each such day being an "Interest Payment Date"). If an Interest Payment Date would otherwise fall on a day that is not a Business Day, such Interest Payment Date shall be postponed to the next succeeding Business Day, except that, if the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is LIBOR or EURIBOR and such Business Day is in the next succeeding calendar month, such Interest Payment Date shall instead be the immediately preceding Business Day; provided, however, if with respect to any Note for which "Accrue to Pay" is not specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, if an Interest Payment Date with respect to such Note would otherwise be a day that is not a Business Day, such Interest Payment Date shall not be postponed; provided, further, that any payment required to be made in respect of a Note that does not Accrue to Pay on a date (including the day of Stated Maturity) that is not a Business Day for such Note need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on such date, and no additional interest shall accrue as a result of such delayed payment. Subject to applicable provisions of law and except as specified herein, on each Interest Reset Date the rate of interest shall be the rate determined in accordance with the provisions of the applicable heading below. Determination of CD Rate If the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is the CD Rate, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to the CD Rate and the Spread or Spread Multiplier, if any, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. The "CD Rate" for each Interest Reset Period shall be the rate as of the second Business Day prior to the Interest Reset Date for such Interest Reset Period (a "CD Rate Determination Date") for negotiable U.S. dollar certificates of deposit having the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as published in H.15(519) under the heading "CDs (Secondary Market)". In the event that such rate is not published prior to 3:00 p.m., New York City time, on the Calculation Date (as defined above) pertaining to such CD Rate Determination Date, then the "CD Rate" for such Interest Reset Period will be the rate on such CD Rate Determination Date for negotiable U.S. dollar certificates of deposit of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as published in the H.15 Daily Update, or other recognized electronic source used for the purpose of displaying the applicable rate, under the heading "CDs (Secondary Market)." If by 3:00 p.m., New York City time, on such Calculation Date such rate is not yet published in either H.15(519) or H.15 Daily Update, then the "CD Rate" for such Interest Reset Period will be calculated by the Calculation Agent and will be the arithmetic mean of the secondary market offered rates as of 10:00 a.m., New York City time, on such CD Rate Determination Date of three leading nonbank dealers in negotiable 4 U.S. dollar certificates of deposit in The City of New York selected by the Calculation Agent for negotiable U.S. dollar certificates of deposit of major United States money center banks of the highest credit standing (in the market for negotiable U.S. dollar certificates of deposit) with a remaining maturity closest to the Index Maturity on the face hereof or in the pricing supplement attached hereto or delivered herewith in a denomination of $5,000,000; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting offered rates as mentioned in this sentence, the CD Rate for such Interest Reset Period will be the same as the CD Rate for the immediately preceding Interest Reset Period (or, if there was no such Interest Reset Period, the Initial Interest Rate). Determination of Commercial Paper Rate If the Base Rate shown on the face hereof or in the pricing supplement attached hereto or delivered herewith is the Commercial Paper Rate, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to the Commercial Paper Rate and the Spread or Spread Multiplier, if any, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. The "Commercial Paper Rate" for each Interest Reset Period will be determined by the Calculation Agent as of the second Business Day prior to the Interest Reset Date for such Interest Reset Period (a "Commercial Paper Rate Determination Date") and shall be the Money Market Yield (as defined below) on such Commercial Paper Rate Determination Date of the rate for commercial paper having the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, as such rate shall be published in H.15(519) under the heading "Commercial Paper-Nonfinancial". In the event that such rate is not published prior to 3:00 p.m., New York City time, on the Calculation Date (as defined above) pertaining to such Commercial Paper Rate Determination Date, then the Commercial Paper Rate for such Interest Reset Period shall be the Money Market Yield on such Commercial Paper Rate Determination Date of the rate for commercial paper of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as published in the H.15 Daily, or such other recognized electronic source used for the purpose of displaying the applicable rate, under the heading "Commercial Paper-Nonfinancial." If by 3:00 p.m., New York City time, on such Calculation Date such rate is not yet published in either H.15(519) or the H.15 Daily Update, then the "Commercial Paper Rate" for such Interest Reset Period shall be the Money Market Yield of the arithmetic mean of the offered rates as of 11:00 a.m., New York City time, on such Commercial Paper Rate Determination Date of three leading dealers of U.S. dollar commercial paper in The City of New York selected by the Calculation Agent for commercial paper of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith placed for an industrial issuer whose bonds are rated "AA" or the equivalent by a nationally recognized rating agency; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting offered rates as mentioned in this sentence, the "Commercial Paper Rate" for such Interest Reset Period will be the same as the Commercial Paper Rate for the immediately preceding Interest Reset Period (or, if there was no such Interest Reset Period, the Initial Interest Rate). "Money Market Yield" shall be the yield calculated in accordance with the following formula: D X 360 Money Market Yield = -------------- X 100 360 - (D X M) 5 where "D" refers to the applicable per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal and "M" refers to the actual number of days in the applicable Interest Reset Period specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Determination of Federal Funds Rate If the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is the Federal Funds Rate, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to the Federal Funds Rate and Spread or Spread Multiplier, if any, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. The "Federal Funds Rate" for each Interest Reset Period shall be the effective rate on the second Business Day prior to the Interest Reset Date for such Interest Reset Period (a "Federal Funds Rate Determination Date") for Federal Funds as published in H.15(519) under the heading "Federal Funds (Effective)" and displayed on Moneyline Telerate (or any successor service) on Page 120 (or any other page as may replace the specified Page on that service). In the event that such rate does not appear on Moneyline Telerate on Page 120 or is not published prior to 3:00 p.m., New York City time, on the Calculation Date (as defined above) pertaining to such Federal Funds Rate Determination Date, the "Federal Funds Rate" for such Interest Reset Period shall be the rate on such Federal Funds Rate Determination Date as published in the H.15 Daily Update under the heading "Federal Funds/Effective Rate," or other recognized electronic source used for the purpose of displaying the applicable rate. If by 3:00 p.m., New York City time, on such Calculation Date, such rate is not yet published, then the "Federal Funds Rate" for such Interest Reset Period shall be arithmetic mean of the rates for the last transaction in overnight U.S. dollar federal funds arranged by three leading brokers of U.S. dollar Federal Funds transactions in New York City, selected by the Calculation Agent prior to 9:00 a.m., New York City time, on that Federal Funds Rate Determination Date; provided, however, that if the brokers so selected by the Calculation Agent are not quoting as mentioned above, the "Federal Funds Rate" for the Interest Reset Period will be the "Federal Funds Rate" in effect for the particular Federal Funds Rate Determination Date. If there was no Federal Funds Rate in effect for the Interest Reset Period, the "Federal Funds Rate" will be the initial interest rate. Determination of LIBOR If the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is LIBOR, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to LIBOR and the Spread or Spread Multiplier, if any, specified on the face hereof. "LIBOR" for each Interest Reset Period will be determined by the Calculation Agent as follows On the second London Business Day prior to the Interest Reset Date for such Interest Reset Period (a "LIBOR Determination Date"), the Calculation Agent for such LIBOR Note will determine the offered rates for deposits in the Specified Currency for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, which appear on the Designated LIBOR Page at approximately 11:00 a.m., London time, on such LIBOR Determination Date. "Designated LIBOR Page" means either (a) if "LIBOR Moneyline Telerate" is designated on the face hereof or in the pricing supplement attached hereto or delivered herewith, or if neither "LIBOR Reuters" nor 6 "LIBOR Moneyline Telerate" is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as the method for calculating LIBOR, the display designated as page "3750" on the Telerate Service ("Telerate") (or such other page as may replace page "3750" on such service or such other service as may be replaced by a successor service for the purpose of displaying the London interbank offered rates of major banks), and LIBOR for such Interest Reset Period will be the relevant offered rate as determined by the Calculation Agent or (b) if "LIBOR Reuters" is designated on the face hereof or in the pricing supplement attached hereto or delivered herewith, "Designated LIBOR Page" means the display designated as page "LIBO" on the Reuters Monitor Money Rates Service and LIBOR will be the arithmetic means of the offered rates, calculated by the Calculation Agent, or the offered rates, if the designated LIBOR page by its terms provides only for a single rate (or such other page as may replace the LIBO page on such service or such other service as may be replaced by a successor service for purpose of displaying London interbank offered rates of major banks). If neither LIBOR Reuters nor LIBOR Telerate is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, LIBOR will be determined as if LIBOR Moneyline Telerate had been specified. If LIBOR cannot be determined as described above (either because the Designated LIBOR Page is no longer available or because fewer than two offered rates appear on the Designated LIBOR Page on the LIBOR Determination Date), the Calculation Agent will determine "LIBOR" as follows. The Calculation Agent will request the principal London offices of each of the four major banks in the London interbank market selected by the Calculation Agent to provide the Calculation Agent with its offered quotations for deposits in the Specified Currency for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, to prime banks in the London interbank market at approximately 11:00 a.m., London time, on the LIBOR Determination Date, in a principal amount equal to an amount of at least $1,000,000 or its approximate equivalent thereof in the Specified Currency, that is representative of a single transaction in such market at such time. If two or more such quotations are provided, "LIBOR" for such Interest Reset Period will be the arithmetic mean of such quotations. If fewer than two such quotations are provided, "LIBOR" for such Interest Reset Period will be the arithmetic mean of rates quoted by three major banks in The City of New York selected by the Calculation Agent at approximately 11:00 a.m., New York city time, on the LIBOR Determination Date for loans in the Specified Currency to leading European banks for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, in a principal amount equal to an amount of at least $1,000,000 or the approximate equivalent thereof in the Specified Currency that is representative of a single transaction in such market at such time; provided, however, that if fewer than three banks selected as aforesaid by the Calculation Agent are quoting rates as mentioned in this sentence. "LIBOR" for such Interest Reset Period will be the same as LIBOR for the immediately preceding Interest Reset Period (or, if there was no such Interest Reset Period, the LIBOR Rate will be the Initial Interest Rate). Determination of Treasury Rate If the Base Rate specified in the face hereof or in the pricing supplement attached hereto or delivered herewith is the Treasury Rate or Treasury Rate Constant Maturity, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to the Treasury Rate and the Spread or Spread Multiplier, if an, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Unless "Treasury Rate Constant Maturity" 7 is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the "Treasury Rate" for each Interest Reset Period will be the rate for the auction held on the Treasury Rate Determination Date (as defined below) for such Interest Reset Period of direct obligations of the United States ("Treasury Securities") that have the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, as such rate appears on either Moneyline Telerate (or any successor service) on page 56 (or any other page as may replace the page on that service) or on page 57 (or any other page as may replace that page on that service) under the heading "Investment Rate." The following procedures will be followed if the Treasury Rate cannot be determined as described above. If not so published by 3:00 p.m., New York City time, on the Calculation Date, the "Treasury Rate" will be the Bond Equivalent Yield (defined below) of the rate for the applicable Treasury Securities as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the heading "U.S. Government Securities/Treasury Bills/Auction High." In the event that such rate is not so published by 3:00 p.m., New York City time, on the related Calculation Date, the Treasury Rate will be the Bond Equivalent Yield of the auction rate of the applicable Treasury Securities as announced by the United States Department of the Treasury. In the event that the results of the auction of Treasury Securities is not so announced by the United States Department of the Treasury, or if the auction is not held, then the Treasury Rate will be the Bond Equivalent Yield of the rate on the Treasury Rate Determination Date of the applicable Treasury Securities published in H.15(519) under the heading of "U.S. Government Securities/Treasury Bills/Secondary Market." If such rate is not so published by 3:00 p.m., New York City time, on the related Calculated Date, then the Treasury Rate will be the rate on the Treasury Rate Determination Date of the applicable Treasury Securities as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the heading "U.S. Government Securities/Treasury Bills/Secondary Market." In the event that such rate is not so published by 3:00 p.m., New York City time, on the related Calculation Date, then the Treasury Rate will be the rate on the Treasury Rate Determination Date calculated by the Calculation Agent as the Bond Equivalent Yield of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 p.m., New York City time, on the Treasury Rate Determination Date, of three primary United States government securities dealers selected by the Calculation Agent for the issue of Treasury Securities with a remaining maturity closest to the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting bid rates as mentioned in this sentence, then the "Treasury Rate" for such Interest Reset Period will be the same as the Treasury Rate for the immediately preceding Interest Reset Period (or, if there was no Interest Reset Period, the Initial Interest Rate). The "Treasury Rate Determination Date" for each Interest Reset Period will be the day of the week in which the Interest Reset Date for such Interest Reset Period falls on which Treasury Securities would normally be auctioned. Treasury Securities are normally sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is normally held on the following Tuesday, except that such auction may be held on the preceding Friday. If, as the result of a legal holiday, an auction is so held on the preceding Friday, such Friday will be the Treasury Rate Determination Date pertaining to the Interest Reset Period commencing in the next succeeding week. If an auction date shall fall on any day that would otherwise be an Interest Reset Date for a Note whose Base Rate is the Treasury Rate, then such Interest Reset Date shall instead be the Business Day immediately following such auction date. Bond Equivalent: Yield will be calculated as follows: 8 D X N Bond Equivalent Yield = -------------- X 100 360 - (D X M) where "D" refers to the applicable per annum rate for Treasury Securities quoted on a bank discount basis and expressed as a decimal, "N" refers to 365 or 366, as the case may be, and "M" refers to the actual number of days in the applicable interest reset period. If "Treasury Rate Constant Maturity" is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the "Treasury Rate" for each Interest Reset Period will be the rate displayed on the Designated CMT Telerate Rate Page under the caption "Treasury Constant Maturities" under the column for the Designated CMT Maturity Index in the following manner. If the Designated CMT Moneyline Telerate Page is 7051, the Treasury Rate will be the rate on the Constant Maturity Treasury Rate Determination Date. In the event that such rate does not appear on Moneyline Telerate Page 7051, then the Treasury Rate will be the treasury constant maturity rate for the designated CMT maturity index as published in the relevant H.15(519) under the caption "Treasury Constant Maturities." In the event that such rate does not so appear in H.15(519), then the Treasury Rate will be the constant treasury maturity rate on the Constant maturity Treasury Rate Determination Date for the designated CMT maturity index as may then be published by either the Federal Reserve System Board of Governors or the United States Department of the Treasury that the calculation agent determines to be comparable to the rate which would have otherwise been published in H.15(519). If the Designated CMT Moneyline Telerate Page is 7052, the "Treasury Rate" will be the weekly or monthly average, as specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, for the week or the month, as applicable, ended immediately preceding the week or month, as applicable, in which the related Constant Maturity Treasury Rate Determination Date occurs. In the event that such rate does not appear on Moneyline Telerate Page 7052, then the Treasury Rate will be the one-week or one-month, as specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, average of the treasury constant maturity rate for the designated CMT maturity index for the week or month as applicable, preceding the Constant Maturity Treasury Determination Date as published in the relevant H.15(519) under the caption "Treasury Constant Maturities." In the event that such rate does not so appear in H.15(519), then the Treasury Rate will be the one-week or one-month, as specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, average of the constant treasury maturity rate for the designated CMT maturity index as otherwise announced by the Federal Reserve Bank of New York for the week or month, as applicable, ended immediately preceding the week or month, as applicable, in which the Constant Maturity Treasury Rate Determination Date falls. The following procedures will be followed if the Treasury Rate cannot be determined as indicated above. If such information, as applicable, is not so published, then the Calculation Agent will calculate the Treasury Rate on the Constant Maturity Treasury Rate Determination Date as follows which shall be a yield to maturity, based on the arithmetic mean of the secondary market bid prices as of approximately 3:30 p.m., New York City time, on the Constant Maturity Treasury Rate Determination Date of three leading U.S. government securities dealers in The City of New York selected by the Calculation Agent, one of which may be the Agent, from five such dealers selected by the Calculation Agent and eliminating the highest quotation, or in the event of equality, one of the highest, and the lowest quotation, or, in the event of equality, one of the lowest, for United States Treasury Securities ("Treasury Notes"), with an original maturity of approximately the 9 Designated CMT Maturity Index and a remaining term to maturity of not less than such Designated CMT Maturity Index minus one year and in a principal amount that is representative for a single transaction in the securities in that market at that time. If the Calculation Agent is unable to obtain three such Treasury Note quotations, the Treasury Rate on the Constant Maturity Treasury Rate Determination Date will be calculated by the Calculation Agent, and shall be a yield to maturity based on the arithmetic mean of the secondary market offer side prices as of approximately 3:30 p.m., New York City time, on the Constant Maturity Treasury Rate Determination Date of three leading U.S. government securities dealers in the City of New York, one of which may be the Agent, from five such dealers selected by the Calculation Agent and eliminating the highest quotation, or, in the event of equality, one of the highest, and the lowest quotation, or, in the event of equality, one of the lowest, for Treasury Notes with an original maturity of the number of years that is the next highest to the Designated CMT Maturity Index and a remaining maturity closest to the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, and in an amount that is representative for a single transaction in that market at that time. If three or four, and not five, of such dealers are quoting as described above, then the Treasury Rate will be based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of such quotes will be eliminated. However, if fewer than three dealers so selected by the Calculation Agent are quoting as mentioned above, the Treasury Rate determined as of the Constant Maturity Treasury Rate Determination Date will be the Treasury Rate in effect on the Constant Maturity Treasury Rate Determination Date. If two Treasury Notes with an original maturity as described in the third preceding sentence have remaining terms to maturity equally close to the Designated CMT Maturity Index, the Calculation Agent will obtain quotations for the Treasury Note with the shorter remaining term to maturity and will use such quotations to calculate the Treasury Rate as set forth above. "Designated CMT Moneyline Telerate Page" means the display on the Telerate Service, or any successor service on the page specified in the applicable pricing supplement, or any other page as may replace such page on that service, or any successor service, for the purpose of displaying Treasury Constant Maturities as reported in H.15(519). If no such page is specified in the applicable pricing supplement, the Designated CMT Telerate Page shall be 7052, for the most recent week. "Designated CMT Maturity Index" means the original period to maturity of the U.S. Treasury Securities, either one, two, three, five, seven, ten, twenty or thirty years, specified in the applicable pricing supplement with respect to which the Treasury Rate will be calculated. If no such maturity is specified in the applicable pricing supplement, the Designated CMT Maturity Index shall be two years. "The Constant Maturity Treasury Rate Determination Date" shall be the second Business Day prior to the Interest Reset Date for the applicable Interest Reset Period. 10 Determination of Prime Rate Prime Rate Notes will bear interest at the interest rates (calculated with reference to the Prime Rate and the Spread and/or Spread Multiplier, if any) specified in the Prime Rate Notes and in the applicable pricing supplement. The "Prime Rate" for each Interest Reset Period will be determined by the Calculation Agent for such Prime Rate Note as of the second Business Day prior to the Interest Reset Date for such Interest Reset Period (a "Prime Rate Determination Date") and shall be the rate made available and subsequently published on such date in H.15(519) under the heading "Bank Prime Loan." In the event that such rate is not published prior to 3:00 p.m., New York City time, on the Calculation Date (as defined above) pertaining to such Prime Rate Determination Date, then the Prime Rate for such Interest Reset Period shall be the rate published in the H.15 Daily Update under the heading "Bank Prime Loan." In the event that such rate has not been published prior to 3:00 p.m., New York City time, on the Calculation Date, then the Prime Rate will be calculated by the Calculation Agent and will be the arithmetic mean of the rates of interest publicly announced by each bank that appears on the Reuters Screen USPRIME1 Page (as defined below) as such bank's prime rate or base lending rate on the Prime Rate Determination Date. If fewer than four such rates appear on the Reuters Screen USPRIME1 Page for the Prime Rate Determination Date, the rate shall be the arithmetic mean of the prime rates quoted on the basis of the actual number of days in the year divided by 360 as of the close of business on the Prime Rate Determination Date by three major banks in The City of New York selected by the Calculation Agent. However, if the banks so selected by the Calculation Agent are not quoting as mentioned in the previous sentence, the Prime Rate will be the Prime Rate in effect on the Prime Rate Determination Date. "Reuters Screen USPRIME1 Page" means the display designated as page "USPRIME1" on the Reuters Monitor Money Rates Service, (or such other page as may replace the USPRIME1 page on that service for the purpose of displaying prime rates or base lending rates of major United States banks). Determination of Eleventh District Cost of Funds Rate Eleventh District Cost of Funds Rate Notes will bear interest at the interest rates (calculated by reference to the Eleventh District Cost of Funds Rate and the Spread and/or Spread Multiplier, if any) specified in the Eleventh District Cost of Funds Rate Notes and in the applicable pricing supplement. The "Eleventh District Cost of Funds Rate," for each Interest Reset Period will be determined by the Calculation Agent for such Eleventh District Cost of Funds Rate Note as of the last working day of the month immediately prior to such Interest Reset Date for such Interest Reset Period on which the Federal Home Loan Bank of San Francisco (the "FHLB of San Francisco") publishes the Eleventh District Cost of Funds Index (as defined below) (the "Eleventh District Cost of Funds Rate Determination Date"), and shall be the rate equal to the monthly weighted average cost of funds for the calendar month preceding such Eleventh District Cost of Funds Rate Determination Date as set forth under the caption "Eleventh District" on Moneyline Telerate (or any successor service) on page 7058 (which page shall include any successor page (as determined by the Calculation Agent)) as of 11:00 a.m., San Francisco time, on such Eleventh District Cost of Funds Rate Determination Date. If such rate does not appear on Telerate page 7058 on any related Eleventh 11 District Cost of Funds Rate Determination Date, the Eleventh District Cost of Funds Rate for such Eleventh District Cost of Funds Rate Determination Date shall be the monthly weighted average cost of funds paid by member institutions of the Eleventh Federal Home Loan Bank District that was most recently announced (the "Eleventh District Cost of Funds Rate Index") by the FHLB of San Francisco as such cost of funds for the calendar month preceding the date of such announcement. If the FHLB of San Francisco fails to announce such rate on or prior to the Eleventh District Cost of Funds Rate Determination Date for the calendar month immediately preceding such date, then the Eleventh District Cost of Funds Rate for such date will be the Eleventh District Cost of Funds Rate in effect on the Eleventh District Cost of Funds Rate Determination Date. Determination of EURIBOR If the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is EURIBOR, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to EURIBOR and the Spread or Spread Multiplier, if any, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. "EURIBOR" for each Interest Reset Period will be determined by the Calculation Agent as follows. On the second TARGET Business Day prior to the Interest Reset Date for such Interest Reset Period (a "EURIBOR Determination Date"), the Calculation Agent for such EURIBOR Note will determine the offered rates for deposits in Euros as sponsored, calculated and published jointly by the European Banking Federation and ACI -- The Financial Market Association, or any company established by the joint sponsors for purposes of compiling and publishing those rates, for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, which appears on the Designated EURIBOR Page as of 11:00 a.m., Brussels time, on such EURIBOR Determination Date. "Designated EURIBOR Page" means the display designated as page "248" on Telerate (or any successor service or such other page as may replace page "248" on such service), and EURIBOR for such Interest Reset Period will be the relevant offered rates as determined by the Calculation Agent. If EURIBOR cannot be determined as described above the Calculation Agent will determine "EURIBOR" as follows. The Calculation Agent will request the principal Euro-zone (as defined below) office of each of four major banks in the Euro-zone interbank market selected by the Calculation Agent to provide the Calculation Agent with their respective offered quotations for deposits in Euros for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, to prime banks in the Euro-zone interbank market at approximately 11:00 a.m., Brussels time, on the EURIBOR Determination Date, in a principal amount equal to an amount of at least $1,000,000 or its approximate equivalent thereof in Euros that is representative of a single transaction in such market at such time. If two or more such quotations are provided, "EURIBOR" for such Interest Reset Period will be the arithmetic mean of such quotations. If less than two such quotations are provided, "EURIBOR" for such Interest Reset Period will be the arithmetic mean of rates quoted by four major banks in the Euro-zone selected by the Calculation Agent for such EURIBOR Note at approximately 11:00 a.m., Brussels time, on the EURIBOR Determination Date for loans in Euros to leading European banks for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, in a principal amount equal to an amount of at least $1,000,000 or the approximate equivalent thereof in Euros that is representative of a single transaction in such market at such time; provided, however, 12 that if the banks so selected a aforesaid by the Calculation Agent are not quoting rates as mentioned in this sentence, "EURIBOR" for such Interest Reset Period will be same as EURIBOR for the immediately preceding Interest Reset Period (or, if there was no such Interest Reset Period, the EURIBOR Rate will be the Initial Interest Rate). "Euro-zone" means the region comprised of member states of the European Union that adopt the single currency in accordance with the Treaty establishing the European Community, as amended by the Treaty on European Union. Inverse Floating Rate Notes If this Note is designated as an Inverse Floating Rate Note on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Inverse Floating Rate shall be equal to (i) in the case of the period, if any, commencing on the Original Issue Date (or such other date which may be specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as the date on which this Note shall begin to accrue interest), up to the first Interest Reset Date, the Initial Fixed Interest Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, and (ii) in the case of each period commencing on an Interest Reset Date, the Reset Fixed Reference Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith minus the interest rate determined by reference to the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, as adjusted by the Spread and/or Spread Multiplier, if any, as determined in accordance with the provisions hereof; provided, however, that (x) the interest rate thereon will not be less than zero and (y) the interest rate in effect for the ten days immediately prior to the date of Stated Maturity will be the rate in effect on the tenth day preceding such date. Floating Rate / Fixed Rate Notes If this Note is designated as a Floating Rate / Fixed Rate Note, this Note will be a Floating Rate note for a specified portion of its term and a Fixed Rate Note for the remainder of its term, in which event the interest rate on this Note will be determined as provided herein as if it were a Floating Rate Note and a Fixed Rate Note hereunder for each such respective period, all as described herein and in the applicable pricing supplement. Subsequent Interest Periods If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Spread, Spread Multiplier or method of calculation of the Interest Rate on this Note may be reset by the Company on the date or dates specified on the face hereof or in the pricing supplement attached hereto or delivered herewith (each an "Optional Reset Date"). The Company may reset the Spread, Spread Multiplier or method of calculation of the Interest Rate Interest Rate by notifying the Trustee for this Note at least 45 but not more than 60 days prior to each Optional Reset Date. Not later than 40 days prior to each Optional Reset Date, the Trustee shall provide notice of such election (the "Reset Notice"), in accordance with "Notices" below, indicating whether the Company has elected to reset the Spread, Spread Multiplier or method of calculation of the Interest Rate, and if so, (i) such new Spread, Spread Multiplier or method of calculation of the Interest Rate and (ii) the provisions, if any, for redemption during the period from such Optional Reset Date to the next Optional Reset Date, or, if there is no such next Optional Reset Date, to the Stated Maturity of 13 this Note (each such period, a "Subsequent Interest Period"), including the date or dates on which or the period or periods during which and the price or prices at which such redemption may occur during the Subsequent Interest Period. Upon the transmittal by the Trustee of a Reset Notice to the Holder of a Note, such new Spread, Spread Multiplier or method of calculation of the Interest Rate shall take effect automatically. Except as modified by the Reset Notice and as described below, such Note will have the same terms as prior to the transmittal of such Reset Notice. Notwithstanding the foregoing, not later than 20 days prior to the Optional Reset Date, the Company may, at its option, revoke the Spread or Spread Multiplier provided for in the Reset Notice and establish a higher Spread or Spread Multiplier for the Subsequent Interest Period by causing the Trustee to provide notice of such higher Spread or Spread Multiplier to the Holder of this Note. Such notice shall be irrevocable. All Bearer Notes with respect to which the Spread or Spread Multiplier is reset on an Optional Reset Date will bear such higher Spread or Spread Multiplier. The Holder of this Note will have the option to elect repayment of the Note by the Company on each Optional Reset Date at a price equal to the principal amount hereof, plus interest accrued to such Optional Reset Date. In order to obtain repayment on an Optional Reset Date, the Holder must follow the procedures set forth below for optional repayment, except that the period for delivery or notification to the Paying Agent shall be at least 25 but not more than 35 days prior to such Optional Reset Date, and except that if the Holder has tendered this Note for repayment pursuant to a Reset Notice, the Holder may, by written notice to the Paying Agent, revoke such tender for repayment until the close of business on the tenth day before the Optional Reset Date. Indexed Notes If this Note is an Indexed Principal Note, then certain or all interest payments, in the case of an Indexed Rate Note, and/or the principal amount payable at Stated Maturity or earlier redemption or retirement, in the case of an Indexed Principal Note, is determined by reference to the amount designated on the face hereof or in the pricing supplement attached hereto or delivered herewith as the Face Amount of this Note and by reference to the Index as described on the face hereof or in the pricing supplement attached hereto or delivered herewith. If this Note is an Indexed Principal Note, the amount of any interest payment will be determined by reference to the Face Amount described on the face hereof or in the pricing supplement attached hereto or delivered herewith. If this Note is an Indexed Principal Note, the principal amount payable at Stated Maturity or any earlier redemption or repayment of this Note may be different from the Face Amount. If a third party is appointed to calculate or announce the Index for a particular Indexed Note and the third party either suspends the calculation or announcement of such Index or changes the basis upon which such Index is calculated in a manner that is inconsistent with the applicable pricing supplement, then the Company will select another third party to calculate or announce the Index. The agent or another affiliate of the Company may be either the original or successor third party selected by the Company. If for any reason such Index cannot be calculated on the same basis and subject to the same conditions and controls as applied to the original third party, then the indexed interest payments, if any, or any indexed principal amount of this Note shall be calculated in the manner set forth in the applicable pricing supplement. Any determination of such third party shall in the absence of manifest error be binding on all parties. 14 Payments in Currencies other than the Specified Currency Except as set forth below, if any payment in respect hereof is required to be made in a Specified Currency other than U.S. dollars and such currency is unavailable due to the imposition of exchange controls or other circumstances beyond the Company's control or is no longer used by the government of the country issuing such currency or for the settlement of transactions by public institutions of or within the international banking community, then such payment shall be made in U.S. dollars until such currency is again available or so used. The amount so payable in such foreign currency shall be converted into U.S. dollars on the basis of the most recently available Market Exchange Rate for such currency or as otherwise indicated on the face hereof or in the pricing supplement attached hereto or delivered herewith. Any payment made under such circumstances in U.S. dollars will not constitute an Event of Default under the Indenture. In the event of an official redenomination of the Specified Currency of this Note (other than as a result of European Monetary Union, but including, without limitation, an official redenomination of any such Specified Currency that is a composite currency), the obligations of the Company with respect to payments on this Note shall, in all cases, be deemed immediately following such redenomination to provide for the payment of that amount of redenominated currency representing the amount of such obligations immediately before such redenomination. This Note does not provide for any adjustment to any amount payable under this Note as a result of (i) any change in the value of the Specified Currency hereof relative to any other currency due solely to fluctuations in exchange rates or (ii) any redenomination of any component currency of any composite currency (unless such composite currency is itself officially redenominated). Dual Currency Notes If this Note is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as a Dual Currency Note, the Company may have a one time option of making all payments of principal, premium, if any, and interest on all Dual Currency Notes issued on the same day and having the same terms (a "Tranche"), which payments would otherwise be made in the Specified Currency of such Notes, in an optional currency (the "Optional Payment Currency"). Such option will be exercisable in whole but not in part on an "Option Election Date," which will be any one of the dates specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. If the Company makes such an election, the amount payable in the Optional Payment Currency shall be determined using the Designated Exchange Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. If such election is made, notice of such election shall be provided in accordance with "Notices" below within two Business Days of the Option Election Date and shall state (i) the first date, whether an Interest Payment Date and/or Stated Maturity, in which scheduled payments in the Optional Payment Currency will be made and (ii) the Designated Exchange Rate. Any such notice by the Company, once given, may not be withdrawn. The equivalent value in the Specified Currency of payments made after such an election may be less, at the then current exchange rate, than if the Company had made such payment in the Specified Currency. 15 Renewable Notes If this Note is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as a Renewable Note, this Note will mature on an Interest Payment Date occurring in or prior to the twelfth month following the Original Issue Date of this Note (the "Initial Maturity Date") unless the term of all or any portion of this Note is renewed in accordance with the following procedures: On the Interest Payment Date occurring in the sixth month (unless a different interval (the "Special Election Interval") is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith) prior to the Initial Maturity Date of this Note (the "Initial Renewal Date") and on the Interest Payment Date occurring in each sixth month (or in the last month of each Special Election Interval) after such Initial Renewal Date (each, together with the Initial Renewal Date, a "Renewal Date"), the term of this Note may be extended to the Interest Payment Date occurring in the twelfth month (or, if a Special Election Interval is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the last month in a period equal to twice the Special Election Interval) after such Renewal Date, if the Holder of this Note elects to extend the term of this Note or any portion thereof as described below. If the Holder does not elect to extend the term of any portion of the principal amount of this Note during the specified period prior to any Renewal Date, such portion will become due and payable on the Interest Payment Date occurring in the sixth month (or the last month in the Special Election Interval) after such Renewal Date (the "New Maturity Date"). The Holder may elect to renew the term of this Note, or if so specified, any portion thereof, by delivering a notice to such effect to any duly appointed paying agent not less than 15 nor more than 30 days prior to such Renewal Date, unless another period is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Such election will be irrevocable and will be binding upon each subsequent Holder of this Note. An election to renew the term of this Note may be exercised with respect to less than the entire principal amount of this Note only if so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith and then only in such principal amount, or any integral multiple in excess thereof, as is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Notwithstanding the foregoing, the term of this Note may not be extended beyond the Stated Maturity specified for this Note on the face hereof or in the pricing supplement attached hereto or delivered herewith. If the Holder does not elect to renew the term, this Note must be presented to any duly appointed paying agent and, as soon as practicable following receipt of such Note such paying agent shall issue in exchange therefor in the name of such Holder (i) a Note, in a principal amount equal to the principal amount of such exchanged Note for which no election to renew the term thereof was exercised, with terms identical to those specified on such exchanged Note (except that such Note shall have a fixed, nonrenewable Stated Maturity on the New Maturity Date) and (ii) if an election to renew is made with respect to less than the full principal amount of such Holder's Note, such paying agent shall issue in exchange for such Note in the name of such Holder a replacement Renewable Note, in a principal amount equal to the principal amount of such exchanged Note for which the election to renew was made, with terms otherwise identical to the exchanged Note. 16 Extension of Stated Maturity If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Stated Maturity of this Note may be extended at the option of the Company for one or more periods of whole years specified on the face hereof or in the pricing supplement attached hereto or delivered herewith (each an "Extension Period") from one to five years up to but not beyond the date (the "Final Maturity") set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith. The Company may exercise such option by notifying the Trustee for this Note at least 45 but not more than 60 days prior to the original Stated Maturity of this Note. If the Company exercises such option, the Trustee shall provide to the Holder of this Note not later than 40 days prior to the original Stated Maturity notice (the "Extension Notice") in accordance with "Notices" below. The Extension Notice will set forth (i) the election of the Company to extend the Stated Maturity, (ii) the new Stated Maturity, (iii) in the case of a Floating Rate Note, the Spread, Spread Multiplier or method of calculation applicable to the Extension Period, and (iv) the provisions, if any, for redemption during the Extension Period, including the date or dates on which or the period or periods during which and the price or prices at which such redemption may occur during the Extension Period. Upon the provision by such Trustee of an Extension Notice to the Holder hereof, the Stated Maturity of this Note shall be extended automatically, and, except as modified by the Extension Notice and as described in the next paragraph, this Note will have the same terms as prior to the provision of such Notice. Notwithstanding the foregoing, not later than 20 days prior to the original Stated Maturity of this Note, the Company may, at its option, revoke the Spread or Spread Multiplier provided for in the Extension Notice and establish a higher Spread or Spread Multiplier for the Extension Period by causing the Trustee to provide notice of such higher Spread or Spread Multiplier, as the case may be, to the Holder hereof in accordance with "Notices" below. Such notice shall be irrevocable. All Notes with respect to which the Stated Maturity is extended will bear such higher Spread or Spread Multiplier for the Extension Period, whether or not tendered for repayment. If the Company extends the Stated Maturity of this Note, the Holder will have the option to elect repayment of this Note by the Company on the original Stated Maturity at a price equal to the principal amount hereof, plus interest accrued to such date. In order to obtain repayment on such original Stated Maturity once the Company has extended the Stated Maturity hereof, the Holder must follow the procedures set forth below for optional repayment, except that the period for delivery or notification to the Paying Agent shall be at least 25 but not more than 35 days before the original Stated Maturity, and except that if the Holder has tendered this Note for repayment pursuant to an Extension Notice, the Holder may, by written notice to the Paying Agent, revoke such tender for repayment until the close of business on the tenth calendar day before the original Stated Maturity. Optional Redemption, Repayment and Repurchase If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Company may, at its option, redeem this Note in whole or in part, on the date or dates (each an "Optional Redemption Date") specified herein, at the price (the "Redemption Price") (together with accrued interest to such Optional Redemption Date) specified herein. If required under the Federal Reserve Capital Adequacy Rules, the Company will obtain the prior 17 approval of the Federal Reserve before exercising its redemption rights. If the Company elects to exercise such option with respect to this Note, at least 30 days prior to the date of redemption, such Trustee shall provide notice of such redemption to the Holder hereof in accordance with "Notices" below. In the event of redemption of this Note in part only, a new Note or Notes for the unredeemed portion hereof shall be issued to the Holder hereof upon the cancellation hereof. Notes redeemed prior to Stated Maturity must be presented for payment together with all unmatured Coupons, if any, appertaining thereto, failing which the amount of any missing unmatured Coupon will be deducted from the sum due for payment. Unless this is an Amortizing Note, this Note will not be subject to any sinking fund. If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, this Note will be repayable to Stated Maturity at the option of the Holder on the Optional Repayment Dates shown on the face hereof or in the pricing supplement attached hereto or delivered herewith at the Optional Repayment Prices shown on the face hereof or in the pricing supplement attached hereto or delivered herewith, together with accrued interest to the date of repayment. Notes that are to be repaid prior to Stated Maturity must be presented for payment together with all unmatured Coupons, if any, appertaining thereto, failing which the amount of any missing unmatured Coupon will be deducted from the sum due for payment. In order for this Note to be repaid, the Principal Paying Agent must receive this Note at least 30 but not more than 45 days prior to an Optional Repayment Date. Any tender of this Note for repayment (except pursuant to a Reset Notice or an Extension Notice) shall be irrevocable. The repayment option may be exercised by the Holder of this Note for less than the entire principal amount of this Note; provided that the principal amount of this Note remaining outstanding after repayment is an authorized denomination. Upon such partial repayment, this Note shall be canceled and a new Note or Notes for the remaining principal amount hereof shall be issued in the name of the Holder of this Note. Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, this Note will not be subject to any sinking fund. Notwithstanding anything herein to the contrary, if this Note is a Discount Note, the amount payable in the event of redemption or repayment prior to the Stated Maturity hereof (other than pursuant to an optional redemption by the Company at a stated Redemption Price), in lieu of the principal amount due at the Stated Maturity hereof, shall be the Amortized Face Amount of this Note as of the redemption date or the date of repayment, as the case may be. The Amortized Face Amount of this Note on any date shall be the amount equal to (i) the Issue Price set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith plus (ii) that portion of the difference between such Issue Price and the stated principal amount of such Note that has accrued by such date at (x) the Bond Yield to Maturity set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith or (y) if so specified, the Bond Yield to Call set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith (computed in each case in accordance with generally accepted United States bond yield computation principles); provided, however, that in no event shall the Amortized Face Amount of a Note exceed its stated principal amount. The Bond Yield to Call listed on the face of this Note or in the pricing supplement attached hereto or delivered herewith shall be computed on the basis of the first occurring Optional Redemption Date with respect to such Note and the amount payable on such Optional Redemption Date. In the event that such Note is not redeemed on such first occurring Optional Redemption Date, 18 the Bond Yield to Call with respect to such Note shall be recomputed on such Optional Redemption Date on the basis of the next occurring Optional Redemption Date and the amount payable on such Optional Redemption Date, and shall continue to be so recomputed on each succeeding Optional Redemption Date until the Note is so redeemed. Tax Redemption The Bearer Notes of a series may be redeemed at the option of the Company in whole, but not in part, at any time on giving at least 30 but not more than 60 days' notice in accordance with "Notices" below (which notice shall be irrevocable), at the respective Redemption Prices thereof, if the Company has or will become obligated to pay additional interest on such Notes as described in the following paragraph as a result of any change in, or amendment to, the laws (or any regulations or rulings promulgated thereunder) of the United States or any political subdivision or taxing authority thereof or therein, or any change in the application or official interpretation of such laws, regulations or rulings, which change or amendment becomes effective on or after their respective Original Issue Dates, and such obligation cannot be avoided by the Company taking reasonable measures available to it; provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Company would be obligated to pay such additional interest were a payment in respect of such Notes then due. Prior to the publication of any notice of redemption pursuant to this paragraph, the Company shall deliver to the Trustee for the Notes to be redeemed a certificate stating that the Company is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Company so to redeem have occurred, and an opinion of independent counsel to the effect that the Company has or will become obligated to pay such additional interest as a result of such change or amendment. Payment of Additional Interest The Company will, subject to the exceptions and limitations set forth below, pay as additional interest to the Holder of this Note or any Coupon that is a United States Alien (as defined below) such amounts as may be necessary so that every net payment on this Note or such Coupon, after deduction or withholding for or on account of any present or future tax, assessment or other governmental charge imposed upon or as a result of such payment by the United States (or any political subdivision or taxing authority thereof or therein), will not be less than the amount provided in this Note or such Coupon to be then due and payable. However, the Company will not be required to make any such payment of additional interest to such Holder for or an account of: (a) any tax, assessment or other governmental charge that would not have been imposed but for (i) the existence of any present or former connection between such Holder (or between a fiduciary, settlor or beneficiary of, or a Person holding a power over, such Holder, if such Holder is an estate or a trust, or a member or shareholder of such Holder, if such Holder is a partnership or a corporation) and the United States, including, without limitation, such Holder (or such fiduciary, settlor, beneficiary, Person holding a power, member or shareholder) being or having been a citizen or resident thereof or being or having been engaged in trade or business or present therein or having or having had a permanent establishment therein or (ii) such Holder's past or present status as a passive foreign investment company, a personal holding company, foreign personal holding company, a controlled foreign corporation for United States tax purposes or private foundation or other 19 tax-exempt organization with respect to the United States or as a corporation that accumulates earnings to avoid United States federal income tax; (b) any estate, inheritance, gift, sales, transfer or personal property tax or any similar tax, assessment or other governmental charge; (c) any tax, assessment or other governmental charge that would not have been imposed but for the presentation by the Holder of this Note or such Coupon for payment more than 15 days after the date on which such payment became due and payable or on which payment thereof was duly provided for, whichever occurred later; (d) any tax, assessment or other governmental charge that is payable otherwise than by deduction or withholding from a payment on this Note or such Coupon; (e) any tax, assessment or other governmental charge required to be deducted or withheld by any Paying Agent from a payment on this Note or such Coupon, if such payment can be made without such deduction or withholding by any other Paying Agent; (f) any tax, assessment or other governmental charge imposed on a Holder that actually or constructively owns ten percent or more of the combined voting power of all classes of stock of the Company or is a controlled foreign corporation related to the Company through stock ownership; nor shall such additional interest be paid with respect to a payment on this Note or such Coupon to a Holder that is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner would not have been entitled to the additional interest had such beneficiary, settlor, member or beneficial owner been the Holder of this Note or such Coupon. The term "United States Alien" means any person who, for United States federal income tax purposes, is a foreign corporation, a nonresident alien individual, a nonresident alien fiduciary of a foreign estate or trust, or a foreign partnership one or more of the members of which is, for United States federal income tax purposes, a foreign corporation, a nonresident alien individual or a nonresident alien fiduciary of a foreign estate or trust. Paying Agents The Company has initially appointed as its Paying Agents for Bearer Notes of this Series the offices listed below: Principal Paying Agent: Deutsche Bank U.K. Winchester House 1 Great Winchester Street London, England EC2 N2DB 20 Paying Agent: Deutsche Bank Luxembourg P.O. Box 586 L-2015 Luxembourg The Company reserves the right at any time to vary or terminate the appointment of any Paying Agent and to appoint additional or other Paying Agents and to approve any change in the office through which any Paying Agent acts, provided that there will at all times be a Paying Agent (which may be the Trustee) in at least one city in Europe, which, so long as Bearer Notes are listed on the Luxembourg Stock Exchange and the rules of that exchange shall so require, shall include Luxembourg. Notice of any such termination or appointment and of any changes in the specified offices of the Trustee or any Paying Agent will be given to the Holder hereof as described below. Notices All notices to Holders of this Note will be deemed to have been duly given if published on two separate Business Days in a leading London daily newspaper (which is expected to be the Financial Times) and, with respect to any series of Bearer Notes that may be listed on the Luxembourg Stock Exchange, if such exchange so requires, in Luxembourg in a newspaper of general circulation in Luxembourg (which is expected to be the Luxemburger Wort). Such notices shall be deemed to have been given on the date of the first such publication. Other Terms As provided in the Indenture and subject to certain limitations therein set forth, this Note is exchangeable for a like aggregate principal amount of Registered Notes of different authorized denominations, as requested by the Person surrendering the same. No service charge shall be made for any such exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. If an Event of Default with respect to the Debt Securities of this series shall have occurred and be continuing, the principal of all the Debt Securities of this series may be declared due and payable in this manner and with the effect provided in the Indenture. In case this Note or any Coupon shall at any time become mutilated, destroyed, stolen or lost, it may be replaced at the specified office of the Principal Paying Agent in London; or, with respect to any series of Bearer Notes that are listed on the Luxembourg Stock Exchange, at the specified office of the Paying Agent in Luxembourg, upon payment by the claimant of such expenses as may be incurred in connection therewith and, in the case of destruction, theft or loss, on such terms as to evidence and indemnity as the Company or the Trustee may reasonably require. Mutilated or defaced Bearer Notes or Coupons must be surrendered before replacements will be issued. All monies paid by the Company to a Trustee or Paying Agent for the payment of principal of or any premium or interest on any Bearer Note or for the payment of any Coupon which 21 remain unclaimed at the end of two years after such payments shall have become due and payable will be repaid to the Company, at its written request, and the Holder of such Note or Coupon will thereafter look only to the Company for payment, such payment to be made only outside the United States. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Debt Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of Debt Securities at the time outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Debt Securities of any series at the time outstanding, on behalf of the Holders of all the Debt Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Debt Security shall be conclusive and binding upon such Holder and upon all future Holders of this Debt Security and of any Debt Security issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon the Debt Security. Holders of Debt Securities may not enforce their rights pursuant to the Indenture or the Note except as provided in the Indenture. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed. The Company may, without the consent of the Holders of the Notes, consolidate with, merge into, or transfer substantially all of its assets to, a corporation, provided that the successor corporation assumes all obligations of the Company under the Notes and certain other conditions are met. Except as provided above, the obligation to pay the principal hereof (and premium, if any) and interest hereon in the designated currency of payment is of the essence. To the fullest extent possible under applicable law, judgments in respect of this Note shall be given in such currency. The obligation of the Company to make such payments in the designated currency of payment shall, notwithstanding any payment in any other currency (whether pursuant to a judgment or otherwise), be discharged only to the extent of the amount in the designated currency of payment that the Holder of this Note may, in accordance with normal banking procedures, purchase with the sum paid in such other currency (after any premium and cost of exchange) on the business day in the country of issue of the designated currency of payment or in the international banking community (in the case of a composite currency) immediately following the day on which such Holder receives such payment. If the amount in the designated currency of payment that may be so purchased is for any reason less than the amount originally due, the Company shall, as a separate and independent obligation, pay such additional amounts in the designated currency of payment as may be necessary to compensate for any such shortfall. This Note shall be deemed to be a contract made and to be performed solely in the State of New York and for all purposes be governed by, and construed in accordance with, the laws of said State without regard to the conflicts of law rules of said State. 22 All terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in the Indenture. 23 EX-4.EE 8 x99885s3exv4wee.txt FORMS OF MEDIUM-TERM TEMPORARY GLOBAL NOTES, SERIES D & E Exhibit 4(ee) BEARER PRINCIPAL AMOUNT No. FX ___ OR FACE AMOUNT $________________________ CUSIP:___________________ CITIGROUP GLOBAL MARKETS HOLDINGS INC. COMMON CODE TEMPORARY GLOBAL NOTE REPRESENTING MEDIUM-TERM SENIOR NOTE, SERIES D DUE NINE MONTHS OR MORE FROM DATE OF ISSUE (FIXED RATE) THIS SECURITY IS A TEMPORARY GLOBAL NOTE, WITHOUT COUPONS, EXCHANGEABLE FOR AN INTEREST IN A PERMANENT GLOBAL NOTE, WITHOUT COUPONS, REPRESENTING (AND EXCHANGEABLE FOR) INDIVIDUAL BEARER NOTES. THE RIGHTS ATTACHING TO THIS NOTE AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR A PERMANENT GLOBAL NOTE ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL BEARER NOTES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165 (j) AND 1287 (a) OF THE INTERNAL REVENUE CODE. IF APPLICABLE, THE "TOTAL AMOUNT OF OID" AND "YIELD TO MATURITY" SET FORTH BELOW WILL BE COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE UNITED STATES FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES Issue Price: Original Issue Date: Interest Rate: Stated Maturity: Specified Currency (If other than U.S. dollars): Authorized Denominations: (If other than as set forth in the Prospectus Supplement) Dual Currency Note: [ ] Yes (see attached) [ ] No Optional Payment Currency: Designated Exchange Rate: Interest Payment Dates: Accrue to Pay: [ ] Yes [ ] No Indexed Principal Note: [ ] Yes (see attached) [ ] No Interest Rate Reset: [ ] The Interest Rate may not be changed prior to Stated Maturity. [ ] The Interest Rate may be changed prior to Stated Maturity (see attached). Optional Reset Dates (if applicable): Amortizing Note: [ ] Yes [ ] No Amortization Schedule: Optional Redemption: [ ] Yes [ ] No Optional Redemption Dates: Redemption Prices: Bond Yield to Maturity: Bond Yield to Call: Optional Repayment: [ ] Yes [ ] No Optional Repayment Dates: Optional Repayment Prices: Optional Extension of Stated Maturity: [ ] Yes [ ] No Final Maturity: Discount Note: [ ] Yes [ ] No Total Amount of OID: Yield to Maturity: Renewable Note: [ ] Yes (see attached) [ ] No Initial Maturity Date: Special Election Interval (if applicable): Amount (if less than entire principal amount) as to which election may be exercised: If the Specified Currency of this Note is Pounds sterling, the following applies: This instrument constitutes 2 [ ] commercial paper [ ] a shorter term debt security [ ] a longer term debt security issued in accordance with regulations made under section 4 of the Banking Act 1987. The issuer of this Note is Citigroup Global Markets Holdings Inc., which is not an authorized institution or a European authorized institution (as such terms are defined in the Banking Act 1987 (Exempt Transactions) Regulation 1997). Repayment of the principal and payment of any interest or premium in connection with this Note has not been guaranteed. IF THE SPECIFIED CURRENCY OF THIS NOTE IS POUNDS STERLING, THE FOLLOWING APPLIES: THIS NOTE IS ISSUED IN ACCORDANCE WITH THE REGULATIONS MADE UNDER SECTION 4 OF THE BANKING ACT 1987. 3 CITIGROUP GLOBAL MARKETS HOLDINGS INC., a corporation duly organized and existing under the laws of the State of New York (herein referred to as the "Company"), for value received hereby promises to pay to bearer, upon presentation and surrender hereof, (a) the Principal Amount or, in the case of an Indexed Principal Note, the Face Amount adjusted by reference to prices, changes in prices, or differences between prices, of securities, currencies, intangibles, goods, articles or commodities or by such other objective price, economic or other measures (an "Index") as described on the face hereof or in the pricing supplement attached hereto or delivered herewith, in the Specified Currency on the Stated Maturity shown above or earlier if and to the extent so provided herein and (b) accrued interest on the Principal Amount then outstanding (or in the case of an Indexed Principal Note, the Face Amount, then outstanding) at the Interest Rate shown above from the Original Issue Date shown above or from the most recent date to which interest has been paid or duly provided for, annually in arrears (unless otherwise set forth herein or in the pricing supplement attached hereto or delivered herewith) on the Interest Payment Dates specified on the face of this Note or in the pricing supplement attached hereto or delivered herewith and at Stated Maturity, until, in either case, the Principal Amount then outstanding or the Face Amount is paid or duly provided for in accordance with the terms hereof; but, in the case of principal, only after exchange of this Note for interests in a Permanent Global Note, as provided herein and in the Indenture (as defined on the reverse hereof) and, in the case of interest due on or before the exchange of this Note for interests in a Permanent Global Note, any interest payable will be paid to each of Euroclear and Clearstream (as defined below) with respect to that portion of this Note held for its account, but only upon receipt in each case, as of the relevant Interest Payment Date, of a Certificate of Non-U.S. Beneficial Ownership (as defined on the reverse hereof). Each of Euroclear and Clearstream will undertake in such circumstances to credit such interest received by it in respect of this Note to the respective accounts having an interest therein. Unless otherwise specified herein or in the pricing supplement attached hereto or delivered herewith, interest on this Note, if any, will be computed on the basis of a 360-day year of twelve 30-day months or, in the case of an incomplete month, the number of days elapsed. For purposes of this Note, "Business Day" means: (i) with respect to any Registered Note, any day that is not a Saturday or Sunday and that, in The City of New York, is not a day on which banking institutions generally are authorized or obligated by law or executive order to close; (ii) with respect to Registered Notes having a specified currency other than U.S. dollars only, other than Registered Notes denominated in Euros, any day that, in the principal financial center (as defined below) of the country of the specified currency, is not a day on which banking institutions generally are authorized or obligated by law to close; (iii) with respect to Notes denominated in Euros, a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer ("TARGET") System is open (a "TARGET Business Day"); and (iv) with respect to any determination by the exchange rate agent (as defined below) of an exchange rate pursuant to notes having a specified currency other than U.S. dollars, any such day on which banking institutions and foreign exchange markets settle payments in New York City and London (an "Exchange Rate Business Day"). As used above, a "principal financial center" means the capital city of the country issuing the specified currency. However, with respect to U.S. dollars, Australian dollars, Canadian dollars, and Swiss francs, the principal financial center shall be The City of New York, Sydney, Toronto, and Zurich, respectively. If this Note is an Amortizing Note as shown on the face hereof or in the pricing supplement attached hereto or delivered herewith, a portion or all the principal amount of the Note is 4 payable prior to Stated Maturity in accordance with a schedule, by application of a formula, or by reference to an Index (as described above). The principal hereof and any premium and interest hereon are payable by the Company in the Specified Currency shown above. If the Specified Currency shown above is other than U.S. dollars, the Company will arrange to convert all payments in respect hereof into U.S. dollars in the manner described on the reverse hereof. The Holder hereof may, if so indicated above, elect to receive all payments in respect hereof in the Specified Currency by delivery of a written notice to the Trustee not later than fifteen calendar days prior to the applicable payment date. Such election will remain in effect until revoked by written notice to the Trustee received not later than fifteen calendar days prior to the applicable payment date. If the Company determines that the Specified Currency is not available for making payments in respect hereof due to the imposition of exchange controls or other circumstances beyond the Company's control or is no longer used by the government of the country issuing such currency or for the settlement of transactions by public institutions or within the international banking community, then the Holder hereof may not so elect to receive payments in the Specified Currency, and any such outstanding election shall be automatically suspended, and payments shall be in U.S. dollars, until the Company determines that the Specified Currency is again available for making such payments. This Note will be deposited with a common depositary in London (the "Depositary") for Euroclear Bank S.A./N.V., as operator of the Euroclear System ("Euroclear"), and Clearstream International ("Clearstream"), for credit to the accounts designated by or on behalf of the purchasers hereof. On or after the 40th day following the issuance of this Note, beneficial interests in this Note will be exchangeable for interests in a definitive Global Security in bearer form, without Coupons attached (a "Permanent Global Note"), in a denomination equal to the aggregate principal amount of all interests in this Note so exchanged, only upon receipt (at such time or in connection with an Interest Payment Date prior to such day) of a Certificate of Non-U.S. Beneficial Ownership. Each Permanent Global Note will be deposited with the Depositary for credit to the account or accounts designated by or on behalf of the beneficial owner or owners thereof. The beneficial owner of a Bearer Note represented by an interest in a Permanent Global Note may, upon 30 days' notice to the Trustee given through either Euroclear or Clearstream, exchange such interest for one or more individual Bearer Notes, with appropriate Coupons attached, in any authorized denomination or denominations. References herein to "Bearer Notes" shall, except where otherwise indicated, include interests in a Permanent Global Note as well as individual Bearer Notes and any appurtenant Coupons. Upon any exchange of any portion of this Note for an interest in a Permanent Global Note, the portion of the principal amount hereof so exchanged shall be endorsed by the Trustee on the Schedule of Exchanges hereto, and the principal amount hereof shall be reduced for all purposes by the amount so exchanged. Except as otherwise provided herein or in the Indenture, until exchanged in whole for an interest in a Permanent Global Note, this Note shall in all respects be entitled to the same benefits and be subject to the same terms and conditions of and the Company shall be subject to the same restrictions as those contained on the Permanent Global Note and in the Indenture. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF AND IN ANY PRICING SUPPLEMENT ATTACHED HERETO OR DELIVERED HEREWITH, AND SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE. 5 This Note shall not become valid or obligatory for any purpose unless and until this Note has been authenticated by Citibank, N.A., or its successor, as authentication agent. IN WITNESS WHEREOF, the Company has caused this Note to be executed under its corporate seal. Dated: CITIGROUP GLOBAL MARKETS HOLDINGS INC. By__________________________________ Authorized Officer [Seal] Attest_______________________________ Assistant Secretary CERTIFICATE OF AUTHENTICATION This is one of the Notes issued under the within-mentioned Indenture. Dated: CITIBANK, N.A., as authentication agent By______________________________ Authorized Signatory 6 Exhibit 4(ee) (REVERSE OF SECURITY) CITIGROUP GLOBAL MARKETS HOLDINGS INC TEMPORARY GLOBAL NOTE REPRESENTING MEDIUM-TERM SENIOR NOTE, SERIES D OF ISSUE DUE NINE MONTHS OR MORE FROM DATE OF ISSUE (FIXED RATE) General This Note represents one or more Bearer Notes having the same Original Issue Date and otherwise identical in terms of a series of a duly authorized issue of securities of the Company designated as specified in the title hereof, and issued and to be issued in either registered or bearer form under an indenture dated as of December 1, 1988 (the "Indenture"), between the Company and Bank One Trust Company, N.A., as successor trustee (the "Trustee"). This Note is governed by the terms and conditions of the Permanent Global Note to be issued in exchange for this Note, which terms and conditions are incorporated herein by reference mutatis mutandis and, except as otherwise provided herein, shall be binding on the Company, the Holder hereof and the Holders of the Bearer Notes represented hereby as if fully set forth herein. Capitalized terms used in this Note that are defined in the Indenture or the Permanent Global Note and are not otherwise defined herein shall have the meanings assigned to them therein. Except as set forth on the Permanent Global Note, the principal hereof and any premium and interest hereon will be paid by the Company in such coin or currency as specified above as at the time of payment shall be legal tender for the payment of public and private debts (the "Specified Currency"), at the office of any paying agent located outside the United States as the Company may appoint from time to time (the "Paying Agents"). As used herein, a "Certificate of Non-U.S. Beneficial Ownership" is a certificate, in the form adopted by the Company, as to beneficial ownership by persons other than United States persons or as to other qualifying ownership by or through financial institutions in compliance with applicable U.S. Treasury regulations. This Note shall be deemed to be a contract made and to be performed solely in the State of New York, and for all purposes shall be governed by, and construed in accordance with, the laws of said State without regard to the conflicts of law rules of said State. All terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in the Indenture. 1 Exhibit 4(ee) SCHEDULE OF EXCHANGES The following exchanges of a portion of this Note for interests in a Permanent Global Note and the following payments of interest in respect of this Note have been made.
Principal Amount Date of Exchanged for Remaining Exchange or an Interest in Principal Notation made Interest Interest a Permanent Amount of on behalf of Payment Paid Global Note this Note the Trustee ----------- -------- -------------- --------- ------------- _____________ ___________ _________________ _____________ ____________ _____________ ___________ _________________ _____________ ____________ _____________ ___________ _________________ _____________ ____________ _____________ ___________ _________________ _____________ ____________ _____________ ___________ _________________ _____________ ____________ _____________ ___________ _________________ _____________ ____________ _____________ ___________ _________________ _____________ ____________ _____________ ___________ _________________ _____________ ____________ _____________ ___________ _________________ _____________ ____________ _____________ ___________ _________________ _____________ ____________ _____________ ___________ _________________ _____________ ____________ _____________ ___________ _________________ _____________ ____________ _____________ ___________ _________________ _____________ ____________ _____________ ___________ _________________ _____________ ____________ _____________ ___________ _________________ _____________ ____________ _____________ ___________ _________________ _____________ ____________ _____________ ___________ _________________ _____________ ____________ _____________ ___________ _________________ _____________ ____________ _____________ ___________ _________________ _____________ ____________ _____________ ___________ _________________ _____________ ____________
2 BEARER PRINCIPAL AMOUNT NO. FL___ OR FACE AMOUNT $_______________________ CUSIP: _________________ CITIGROUP GLOBAL MARKETS HOLDINGS INC. COMMON CODE TEMPORARY GLOBAL NOTE REPRESENTING MEDIUM-TERM SENIOR NOTE, SERIES D DUE NINE MONTHS OR MORE FROM DATE OF ISSUE (FLOATING OR INDEXED RATE) THIS SECURITY IS A TEMPORARY GLOBAL NOTE, WITHOUT COUPONS, EXCHANGEABLE FOR AN INTEREST IN A PERMANENT GLOBAL NOTE, WITHOUT COUPONS, REPRESENTING (AND EXCHANGEABLE FOR) INDIVIDUAL BEARER NOTES. THE RIGHTS ATTACHING TO THIS NOTE AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR A PERMANENT GLOBAL NOTE ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL BEARER NOTES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165 (j) AND 1287 (a) OF THE INTERNAL REVENUE CODE. IF APPLICABLE, THE "TOTAL AMOUNT OF OID" AND "YIELD TO MATURITY" SET FORTH BELOW WILL BE COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE UNITED STATES FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES. Issue Price: Original Issue Date: Initial Interest Rate: Stated Maturity: Specified Currency (If other than U.S. dollars): Authorized Denominations: (If other than as set forth in the Prospectus Supplement) Dual Currency Note: [ ] Yes (see attached) [ ] No Optional Payment Currency: Designated Exchange Rate: Base Rate: [ ] CD Rate [ ] Commercial Paper Rate [ ] Federal Funds Rate [ ] LIBOR Telerate [ ] LIBOR Reuters [ ] Treasury Rate [ ] Treasury Rate [ ] Prime Rate Constant Maturity [ ] Eleventh District [ ] EURIBOR Cost of Funds Rate [ ] Other (see attached) Interest Reset Period Index Maturity: or Interest Reset Dates: Interest Payment Dates: Accrue to Pay: [ ] Yes [ ] No Indexed Principal Note: [ ] Yes (see attached) [ ] No Floating Rate: [ ] Indexed Interest Rate: [ ] (see attached) Spread Multiplier: Spread (+/-): Spread Reset: [ ] The Spread or Spread Multiplier may not be changed prior to Stated Maturity. [ ] The Spread or Spread Multiplier may be changed prior to Stated Maturity (see attached). Optional Reset Dates (if applicable): Maximum Interest Rate: Minimum Interest Rate: Inverse Floating Rate Note: [ ] Yes (see attached) [ ] No 2 Initial Fixed Interest Rate: Reset Fixed Reference Rate Floating Rate / Fixed Rate Note: [ ] Yes (see attached) [ ] No Amortizing Note: [ ] Yes [ ] No Amortization Schedule: Optional Redemption: [ ] Yes [ ] No Optional Redemption Dates: Redemption Prices: Bond Yield to Maturity: Bond Yield to Call: Optional Repayment: [ ] Yes [ ] No Optional Repayment Dates: Optional Repayment Prices: Optional Extension of [ ] Yes [ ] No Stated Maturity: Final Maturity: Discount Note: [ ] Yes [ ] No Total Amount of OID: Yield to Maturity: Renewable Note: [ ] Yes (see attached) [ ] No Initial Maturity Date: Special Election Interval (if applicable): Amount (if less than entire principal amount) as to which election may be exercised: If the Specified Currency of this Note is Pounds sterling, the following applies: This instrument constitutes [ ] commercial paper [ ] a shorter term debt security [ ] a longer term debt security issued in accordance with regulations made under section 4 of the Banking Act 1987. The issuer of this Note is Citigroup Global Markets Holdings Inc., which is not an authorized institution or a 3 European authorized institution (as such terms are defined in the Banking Act 1987 (Exempt Transactions) Regulation 1997). Repayment of the principal and payment of any interest or premium in connection with this Note has not been guaranteed. IF THE SPECIFIED CURRENCY OF THIS NOTE IS POUNDS STERLING, THE FOLLOWING APPLIES: THIS NOTE IS ISSUED IN ACCORDANCE WITH THE REGULATIONS MADE UNDER SECTION 4 OF THE BANKING ACT 1987. 4 CITIGROUP GLOBAL MARKETS HOLDINGS INC., a corporation duly organized and existing under the laws of the State of New York (herein referred to as the "Company"), for value received hereby promises to pay to bearer, upon presentation and surrender hereof, (a) the Principal Amount or, in the case of an Indexed Principal Note, the Face Amount adjusted by reference to prices, changes in prices, or differences between prices, of securities, currencies, intangibles, goods, articles or commodities or by such other objective price, economic or other measures (an "Index") as described on the face hereof or in the pricing supplement attached hereto or delivered herewith, in the Specified Currency on the Stated Maturity shown above or earlier if and to the extent so provided herein, and (b) accrued interest on the Principal Amount then outstanding (or, in the case of an Indexed Principal Note, the Face Amount then outstanding): (i) if this is a Floating Rate Note, at the Initial Interest Rate shown above from the Original Issue Date shown above until the first Interest Reset Date shown above following the Original Issue Date and thereafter at the Base Rate shown above, adjusted by the Spread or Spread Multiplier, if any, shown above, determined in accordance with the provisions hereof, (ii) if this is an Indexed Rate Note, at a rate determined by reference to an Index as described herein, (iii) if this is an Inverse Floating Rate Note, at the Initial Interest Rate shown above from the Original Issue Date shown above until the first Interest Reset Date shown above following the Original Issue Date and thereafter at the Inverse Floating Rate, as determined in accordance with the provisions hereof, or (iv) if this is a Floating Rate / Fixed Rate Note, at a rate determined as described herein, until, in each case, the Principal Amount or the Face Amount then outstanding is paid or duly provided for in accordance with the terms hereof; but, in the case of principal, only after exchange of this Note for interests in a Permanent Global Note, as provided herein and in the Indenture (as defined on the reverse hereof) and, in the case of interest due on or before the exchange of this Note for interests in a Permanent Global Note, any interest payable will be paid to each of Euroclear and Clearstream (as defined below) with respect to that portion of this Note held for its account, but only upon receipt in each case, as of the relevant Interest Payment Date, of a Certificate of Non-U.S. Beneficial Ownership (as defined on the reverse hereof). Each of Euroclear and Clearstream will undertake in such circumstances to credit such interest received by it in respect of this Note to the respective accounts having an interest therein. For purposes of this Note, "Business Day" means: (i) with respect to any Bearer Note, any day that is not a Saturday or Sunday and that is (i) not a day on which banking institutions are authorized or required by law or regulation to be closed in (a) The City of New York, (b) London, England, (c) the place in which this Note is presented for payment or (d) if the Specified Currency (as defined below) is other than U.S. dollars, the financial center of the country issuing the Specified Currency (which in the case of the Euro shall be Brussels, Belgium) and (ii) if the Base Rate specified above is LIBOR, a London Banking Day. "London Banking Day means any day on which dealings in deposits in the Specified Currency are transacted in the London interbank market; (iii) with respect to Bearer Notes having any determination by the exchange rate agent (as defined below) of an exchange rate pursuant to notes having a specified currency other than U.S. dollars, a day on which banking institutions and foreign exchange markets settle payments in the City of New York and London (an "Exchange Rate Business Day"); (iv) with respect to Bearer Notes having a specified currency other than U.S. dollars only, other than Bearer Notes denominated in Euros, any day that, in the principal financial center (as defined below) of the country of the specified currency, is not a day on which banking institutions generally are authorized or obligated by law to close; and (v) with respect to EURIBOR Notes and Notes denominated in Euros, a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer ("TARGET") System is open (a "Target Business Day"). 5 As used above, a "principal financial center" means the capital city of the country issuing the specified currency. However, with respect to U.S. dollars, Australian dollars, Canadian dollars, and Swiss francs, the principal financial center shall be The City of New York, Sydney, Toronto, and Zurich, respectively. If this Note is an Amortizing Note as shown on the face hereof or in the pricing supplement attached hereto or delivered herewith, a portion or all the principal amount of the Note is payable prior to Stated Maturity in accordance with a schedule, by application of a formula, or by reference to an Index (as described above). This Note will be deposited with a common depositary in London (the "Depositary") for Euroclear Bank S.A./N.V., as operator of the Euroclear System ("Euroclear"), and Clearstream International ("Clearstream"), for credit to the accounts designated by or on behalf of the purchasers hereof. On or after the 40th day following the issuance of this Note, beneficial interests in this Note will be exchangeable for interests in a definitive Global Security in bearer form, without Coupons attached (a "Permanent Global Note"), in a denomination equal to the aggregate principal amount of all interests in this Note so exchanged, only upon receipt (at such time or in connection with an Interest Payment Date prior to such day) of a Certificate of Non-U.S. Beneficial Ownership. Each Permanent Global Note will be deposited with the Depositary for credit to the account or accounts designated by or on behalf of the beneficial owner or owners thereof. The beneficial owner of a Bearer Note represented by an interest in a Permanent Global Note may, upon 30 days' notice to the Trustee given through either Euroclear or Clearstream, exchange such interest for one or more individual Bearer Notes, with appropriate Coupons attached, in any authorized denomination or denominations. References herein to "Bearer Notes" shall, except where otherwise indicated, include interests in a Permanent Global Note as well as individual Bearer Notes and any appurtenant Coupons. Upon any exchange of any portion of this Note for an interest in a Permanent Global Note, the portion of the principal amount hereof so exchanged shall be endorsed by the Trustee on the Schedule of Exchanges hereto, and the principal amount hereof shall be reduced for all purposes by the amount so exchanged. Except as otherwise provided herein or in the Indenture, until exchanged in whole for an interest in a Permanent Global Note, this Note shall in all respects be entitled to the same benefits and be subject to the same terms and conditions of and the Company shall be subject to the same restrictions as those contained on the Permanent Global Note and in the Indenture. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF AND IN ANY PRICING SUPPLEMENT ATTACHED HERETO OR DELIVERED HEREWITH, AND SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE. This Note shall not become valid or obligatory for any purpose unless and until this Note has been authenticated by Citibank, N.A., or its successor, as authentication agent. 6 IN WITNESS WHEREOF, the Company has caused this Note to be executed under its corporate seal. Dated: CITIGROUP GLOBAL MARKETS HOLDINGS INC. By _______________________________________ Authorized Officer [Seal] Attest____________________________________ Assistant Secretary CERTIFICATE OF AUTHENTICATION This is one of the Notes issued under the within-mentioned Indenture. Dated: CITIBANK, N.A., as authentication agent By________________________________________ Authorized Signatory 7 (REVERSE OF SECURITY) CITIGROUP GLOBAL MARKETS HOLDINGS INC. TEMPORARY GLOBAL NOTE REPRESENTING MEDIUM-TERM SENIOR NOTE, SERIES D DUE NINE MONTHS OR MORE FROM DATE OF ISSUE (FLOATING OR INDEXED RATE) This Note represents one or more Bearer Notes having the same Original Issue Date and otherwise identical in terms of a series of a duly authorized issue of securities of the Company designated as specified in the title hereof, and issued and to be issued in either registered or bearer form under the Senior Debt Indenture dated as of December 1, 1988 (the "Indenture"), between the Company and Bank One Trust Company, N.A., as successor trustee (the "Trustee"). This Note is governed by the terms and conditions of the Permanent Global Note to be issued in exchange for this Note, which terms and conditions are incorporated herein by reference mutatis mutandis and, except as otherwise provided herein, shall be binding on the Company, the Holder hereof and the Holders of the Bearer Notes represented hereby as if fully set forth herein. Capitalized terms used in this Note that are defined in the Indenture or the Permanent Global Note and are not otherwise defined herein shall have the meanings assigned to them therein. Except as set forth on the Permanent Global Note, the principal hereof and any premium and interest hereon will be paid by the Company in such coin or currency as specified above as at the time of payment shall be legal tender for the payment of public and private debts (the "Specified Currency"), at the office of any paying agent located outside the United States as the Company may appoint from time to time (the "Paying Agents"). As used herein, a "Certificate of Non-U.S. Beneficial Ownership" is a certificate, in the form adopted by the Company, as to beneficial ownership by persons other than United States persons or as to other qualifying ownership by or through financial institutions in compliance with applicable U.S. Treasury regulations. This Note shall be deemed to be a contract made and to be performed solely in the State of New York, and for all purposes shall be governed by, and construed in accordance with, the laws of said State without regard to the conflicts of law rules of said State. SCHEDULE OF EXCHANGES The following exchanges of a portion of this Note for interests in a Permanent Global Note and the following payments of interest in respect of this Note have been made.
Principal Amount Date of Exchanged for Remaining Exchange or an Interest in Principal Notation made Interest Interest a Permanent Amount of on behalf of Payment Paid Global Note this Note the Trustee - ----------- -------- -------------- --------- ------------- _____________ __________ _________________ _______________ _____________ _____________ __________ _________________ _______________ _____________ _____________ __________ _________________ _______________ _____________ _____________ __________ _________________ _______________ _____________ _____________ __________ _________________ _______________ _____________ _____________ __________ _________________ _______________ _____________ _____________ __________ _________________ _______________ _____________ _____________ __________ _________________ _______________ _____________ _____________ __________ _________________ _______________ _____________ _____________ __________ _________________ _______________ _____________ _____________ __________ _________________ _______________ _____________ _____________ __________ _________________ _______________ _____________ _____________ __________ _________________ _______________ _____________ _____________ __________ _________________ _______________ _____________ _____________ __________ _________________ _______________ _____________ _____________ __________ _________________ _______________ _____________ _____________ __________ _________________ _______________ _____________ _____________ __________ _________________ _______________ _____________ _____________ __________ _________________ _______________ _____________ _____________ __________ _________________ _______________ _____________
BEARER PRINCIPAL AMOUNT No. FX ___ OR FACE AMOUNT $______________________ CUSIP:_________________ CITIGROUP GLOBAL MARKETS HOLDINGS INC. COMMON CODE TEMPORARY GLOBAL NOTE REPRESENTING MEDIUM-TERM SUBORDINATED NOTE, SERIES E DUE NINE MONTHS OR MORE FROM DATE OF ISSUE (FIXED RATE) THIS SECURITY IS A TEMPORARY GLOBAL NOTE, WITHOUT COUPONS, EXCHANGEABLE FOR AN INTEREST IN A PERMANENT GLOBAL NOTE, WITHOUT COUPONS, REPRESENTING (AND EXCHANGEABLE FOR) INDIVIDUAL BEARER NOTES. THE RIGHTS ATTACHING TO THIS NOTE AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR A PERMANENT GLOBAL NOTE ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL BEARER NOTES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165 (j) AND 1287 (a) OF THE INTERNAL REVENUE CODE. IF APPLICABLE, THE "TOTAL AMOUNT OF OID" AND "YIELD TO MATURITY" SET FORTH BELOW WILL BE COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE UNITED STATES FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES. Issue Price: Original Issue Date: Interest Rate: Stated Maturity: Specified Currency (If other than U.S. dollars): Authorized Denominations: (If other than as set forth in the Prospectus Supplement) Dual Currency Note: [ ] Yes (see attached) [ ] No Optional Payment Currency: Designated Exchange Rate: Interest Payment Dates: Accrue to Pay: [ ] Yes [ ] No Indexed Principal Note: [ ] Yes (see attached) [ ] No Interest Rate Reset: [ ] The Interest Rate may not be changed prior to Stated Maturity. [ ] The Interest Rate may be changed prior to Stated Maturity (see attached). Optional Reset Dates (if applicable): Amortizing Note: [ ] Yes [ ] No Amortization Schedule: Optional Redemption: [ ] Yes [ ] No Optional Redemption Dates: Redemption Prices: Bond Yield to Maturity: Bond Yield to Call: Optional Repayment: [ ] Yes [ ] No Optional Repayment Dates: Optional Repayment Prices: Optional Extension of Stated Maturity: [ ] Yes [ ] No Final Maturity: Discount Note: [ ] Yes [ ] No Total Amount of OID: Yield to Maturity: Renewable Note: [ ] Yes (see attached) [ ] No Initial Maturity Date: Special Election Interval (if applicable): Amount (if less than entire principal amount) as to which election may be exercised: If the Specified Currency of this Note is Pounds sterling, the following applies: This instrument constitutes 2 [ ] commercial paper [ ] a shorter term debt security [ ] a longer term debt security issued in accordance with regulations made under section 4 of the Banking Act 1987. The issuer of this Note is Citigroup Global Markets Holdings Inc., which is not an authorized institution or a European authorized institution (as such terms are defined in the Banking Act 1987 (Exempt Transactions) Regulation 1997). Repayment of the principal and payment of any interest or premium in connection with this Note has not been guaranteed. IF THE SPECIFIED CURRENCY OF THIS NOTE IS POUNDS STERLING, THE FOLLOWING APPLIES: THIS NOTE IS ISSUED IN ACCORDANCE WITH THE REGULATIONS MADE UNDER SECTION 4 OF THE BANKING ACT 1987. 3 CITIGROUP GLOBAL MARKETS HOLDINGS INC., a corporation duly organized and existing under the laws of the State of New York (herein referred to as the "Company"), for value received hereby promises to pay to bearer, upon presentation and surrender hereof, (a) the Principal Amount or, in the case of an Indexed Principal Note, the Face Amount adjusted by reference to prices, changes in prices, or differences between prices, of securities, currencies, intangibles, goods, articles or commodities or by such other objective price, economic or other measures (an "Index") as described on the face hereof or in the pricing supplement attached hereto or delivered herewith, in the Specified Currency on the Stated Maturity shown above or earlier if and to the extent so provided herein and (b) accrued interest on the Principal Amount then outstanding (or in the case of an Indexed Principal Note, the Face Amount, then outstanding) at the Interest Rate shown above from the Original Issue Date shown above or from the most recent date to which interest has been paid or duly provided for, annually in arrears (unless otherwise set forth herein or in the pricing supplement attached hereto or delivered herewith) on the Interest Payment Dates specified on the face of this Note or in the pricing supplement attached hereto or delivered herewith and at Stated Maturity, until, in either case, the Principal Amount then outstanding or the Face Amount is paid or duly provided for in accordance with the terms hereof; but, in the case of principal, only after exchange of this Note for interests in a Permanent Global Note, as provided herein and in the Indenture (as defined on the reverse hereof) and, in the case of interest due on or before the exchange of this Note for interests in a Permanent Global Note, any interest payable will be paid to each of Euroclear and Clearstream (as defined below) with respect to that portion of this Note held for its account, but only upon receipt in each case, as of the relevant Interest Payment Date, of a Certificate of Non-U.S. Beneficial Ownership (as defined on the reverse hereof). Each of Euroclear and Clearstream will undertake in such circumstances to credit such interest received by it in respect of this Note to the respective accounts having an interest therein. Unless otherwise specified herein or in the pricing supplement attached hereto or delivered herewith, interest on this Note, if any, will be computed on the basis of a 360-day year of twelve 30-day months or, in the case of an incomplete month, the number of days elapsed. For purposes of this Note, "Business Day" means: (i) with respect to any Registered Note, any day that is not a Saturday or Sunday and that, in The City of New York, is not a day on which banking institutions generally are authorized or obligated by law or executive order to close; (ii) with respect to Registered Notes having a specified currency other than U.S. dollars only, other than Registered Notes denominated in Euros, any day that, in the principal financial center (as defined below) of the country of the specified currency, is not a day on which banking institutions generally are authorized or obligated by law to close; (iii) with respect to Notes denominated in Euros, a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer ("TARGET") System is open (a "TARGET Business Day"); and (iv) with respect to any determination by the exchange rate agent (as defined below) of an exchange rate pursuant to notes having a specified currency other than U.S. dollars, any such day on which banking institutions and foreign exchange markets settle payments in New York City and London (an "Exchange Rate Business Day"). As used above, a "principal financial center" means the capital city of the country issuing the specified currency. However, with respect to U.S. dollars, Australian dollars, Canadian dollars, and Swiss francs, the principal financial center shall be The City of New York, Sydney, Toronto, and Zurich, respectively. The indebtedness evidenced by this Note is, to the extent set forth in the Indenture, expressly subordinated and subject in right of payment to the prior payment in full of Senior 4 Indebtedness as defined in the Indenture, and this Note is issued subject to such provisions, and each Holder of this Note, by accepting the same, agrees to and shall be bound by such provisions and authorizes and directs the Trustee in his behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination as provided in the Indenture and appoints the Trustee as his attorney-in-fact for any and all such purposes. If this Note is an Amortizing Note as shown on the face hereof or in the pricing supplement attached hereto or delivered herewith, a portion or all the principal amount of the Note is payable prior to Stated Maturity in accordance with a schedule, by application of a formula, or by reference to an Index (as described above). The principal hereof and any premium and interest hereon are payable by the Company in the Specified Currency shown above. If the Specified Currency shown above is other than U.S. dollars, the Company will arrange to convert all payments in respect hereof into U.S. dollars in the manner described on the reverse hereof. The Holder hereof may, if so indicated above, elect to receive all payments in respect hereof in the Specified Currency by delivery of a written notice to the Trustee not later than fifteen calendar days prior to the applicable payment date. Such election will remain in effect until revoked by written notice to the Trustee received not later than fifteen calendar days prior to the applicable payment date. If the Company determines that the Specified Currency is not available for making payments in respect hereof due to the imposition of exchange controls or other circumstances beyond the Company's control or is no longer used by the government of the country issuing such currency or for the settlement of transactions by public institutions or within the international banking community, then the Holder hereof may not so elect to receive payments in the Specified Currency, and any such outstanding election shall be automatically suspended, and payments shall be in U.S. dollars, until the Company determines that the Specified Currency is again available for making such payments. This Note will be deposited with a common depositary in London (the "Depositary") for Euroclear Bank S.A./N.V., as operator of the Euroclear System ("Euroclear"), and Clearstream International ("Clearstream"), for credit to the accounts designated by or on behalf of the purchasers hereof. On or after the 40th day following the issuance of this Note, beneficial interests in this Note will be exchangeable for interests in a definitive Global Security in bearer form, without Coupons attached (a "Permanent Global Note"), in a denomination equal to the aggregate principal amount of all interests in this Note so exchanged, only upon receipt (at such time or in connection with an Interest Payment Date prior to such day) of a Certificate of Non-U.S. Beneficial Ownership. Each Permanent Global Note will be deposited with the Depositary for credit to the account or accounts designated by or on behalf of the beneficial owner or owners thereof. The beneficial owner of a Bearer Note represented by an interest in a Permanent Global Note may, upon 30 days' notice to the Trustee given through either Euroclear or Clearstream, exchange such interest for one or more individual Bearer Notes, with appropriate Coupons attached, in any authorized denomination or denominations. References herein to "Bearer Notes" shall, except where otherwise indicated, include interests in a Permanent Global Note as well as individual Bearer Notes and any appurtenant Coupons. Upon any exchange of any portion of this Note for an interest in a Permanent Global Note, the portion of the principal amount hereof so exchanged shall be endorsed by the Trustee on the Schedule of Exchanges hereto, and the principal amount hereof shall be reduced for all purposes by the amount so exchanged. Except as otherwise provided herein or in the Indenture, until exchanged in whole for an interest in a Permanent Global Note, this Note shall in all respects be entitled to the same benefits 5 and be subject to the same terms and conditions of and the Company shall be subject to the same restrictions as those contained on the Permanent Global Note and in the Indenture. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF AND IN ANY PRICING SUPPLEMENT ATTACHED HERETO OR DELIVERED HEREWITH, AND SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE. This Note shall not become valid or obligatory for any purpose unless and until this Note has been authenticated by Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), or its successor, as Trustee. 6 IN WITNESS WHEREOF, the Company has caused this Note to be executed under its corporate seal. Dated: CITIGROUP GLOBAL MARKETS HOLDINGS INC. By_________________________________ Authorized Officer [Seal] Attest_______________________________ Assistant Secretary CERTIFICATE OF AUTHENTICATION This is one of the Notes issued under the within-mentioned Indenture. Dated: DEUTSCHE BANK TRUST COMPANY AMERICAS (formerly BANKERS TRUST COMPANY), as Trustee By______________________________ Authorized Signatory 7 (REVERSE OF SECURITY) CITIGROUP GLOBAL MARKETS HOLDINGS INC. TEMPORARY GLOBAL NOTE REPRESENTING MEDIUM-TERM SUBORDINATED NOTE, SERIES E DUE NINE MONTHS OR MORE FROM DATE OF ISSUE (FIXED RATE) General This Note represents one or more Bearer Notes having the same Original Issue Date and otherwise identical in terms of a series of a duly authorized issue of securities of the Company designated as specified in the title hereof, and issued and to be issued in either registered or bearer form under an indenture dated as of December 1, 1988 (the "Indenture"), between the Company and Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), as trustee (the "Trustee"). This Note is governed by the terms and conditions of the Permanent Global Note to be issued in exchange for this Note, which terms and conditions are incorporated herein by reference mutatis mutandis and, except as otherwise provided herein, shall be binding on the Company, the Holder hereof and the Holders of the Bearer Notes represented hereby as if fully set forth herein. Capitalized terms used in this Note that are defined in the Indenture or the Permanent Global Note and are not otherwise defined herein shall have the meanings assigned to them therein. Except as set forth on the Permanent Global Note, the principal hereof and any premium and interest hereon will be paid by the Company in such coin or currency as specified above as at the time of payment shall be legal tender for the payment of public and private debts (the "Specified Currency"), at the office of any paying agent located outside the United States as the Company may appoint from time to time (the "Paying Agents"). As used herein, a "Certificate of Non-U.S. Beneficial Ownership" is a certificate, in the form adopted by the Company, as to beneficial ownership by persons other than United States persons or as to other qualifying ownership by or through financial institutions in compliance with applicable U.S. Treasury regulations. This Note shall be deemed to be a contract made and to be performed solely in the State of New York, and for all purposes shall be governed by, and construed in accordance with, the laws of said State without regard to the conflicts of law rules of said State. All terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in the Indenture. 1 SCHEDULE OF EXCHANGES The following exchanges of a portion of this Note for interests in a Permanent Global Note and the following payments of interest in respect of this Note have been made.
Principal Amount Date of Exchanged for Remaining Exchange or an Interest in Principal Notation made Interest Interest a Permanent Amount of on behalf of Payment Paid Global Note this Note the Trustee - ----------- -------- -------------- --------- ------------- _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________
2 BEARER PRINCIPAL AMOUNT NO. FL___ OR FACE AMOUNT $_______________ CUSIP:__________ CITIGROUP GLOBAL MARKETS HOLDINGS INC. COMMON CODE TEMPORARY GLOBAL NOTE REPRESENTING MEDIUM-TERM SUBORDINATED NOTE, SERIES E DUE NINE MONTHS OR MORE FROM DATE OF ISSUE (FLOATING OR INDEXED RATE) THIS SECURITY IS A TEMPORARY GLOBAL NOTE, WITHOUT COUPONS, EXCHANGEABLE FOR AN INTEREST IN A PERMANENT GLOBAL NOTE, WITHOUT COUPONS, REPRESENTING (AND EXCHANGEABLE FOR) INDIVIDUAL BEARER NOTES. THE RIGHTS ATTACHING TO THIS NOTE AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR A PERMANENT GLOBAL NOTE ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL BEARER NOTES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165 (j) AND 1287 (a) OF THE INTERNAL REVENUE CODE. IF APPLICABLE, THE "TOTAL AMOUNT OF OID" AND "YIELD TO MATURITY" SET FORTH BELOW WILL BE COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE UNITED STATES FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES. Issue Price: Original Issue Date: Initial Interest Rate: Stated Maturity: Specified Currency (If other than U.S. dollars): Authorized Denominations: (If other than as set forth in the Prospectus Supplement) Dual Currency Note: [ ] Yes (see attached) [ ] No Optional Payment Currency: Designated Exchange Rate: Base Rate: [ ] CD Rate [ ] Commercial Paper Rate [ ] Federal Funds Rate [ ] LIBOR Telerate [ ] LIBOR Reuters [ ] Treasury Rate [ ] Treasury Rate [ ] Prime Rate Constant Maturity [ ] Eleventh District [ ] EURIBOR Cost of Funds Rate [ ] Other (see attached) Interest Reset Period Index Maturity: or Interest Reset Dates: Interest Payment Dates: Accrue to Pay: [ ] Yes [ ] No Indexed Principal Note: [ ] Yes (see attached) [ ] No Floating Rate: [ ] Indexed [ ](see attached) Interest Rate: Spread Multiplier: Spread (+/-): Spread Reset: [ ] The Spread or Spread Multiplier may not be changed prior to Stated Maturity. [ ] The Spread or Spread Multiplier may be changed prior to Stated Maturity (see attached). Optional Reset Dates (if applicable): Maximum Interest Rate: Minimum Interest Rate: Inverse Floating Rate Note: [ ] Yes (see attached) [ ] No 2 Initial Fixed Interest Rate: Reset Fixed Reference Rate Floating Rate / Fixed Rate Note: [ ] Yes (see attached) [ ] No Amortizing Note: [ ] Yes [ ] No Amortization Schedule: Optional Redemption: [ ] Yes [ ] No Optional Redemption Dates: Redemption Prices: Bond Yield to Maturity: Bond Yield to Call: Optional Repayment: [ ] Yes [ ] No Optional Repayment Dates: Optional Repayment Prices: Optional Extension of [ ] Yes [ ] No Stated Maturity: Final Maturity: Discount Note: [ ] Yes [ ] No Total Amount of OID: Yield to Maturity: Renewable Note: [ ] Yes (see attached) [ ] No Initial Maturity Date: Special Election Interval (if applicable): Amount (if less than entire principal amount) as to which election may be exercised: If the Specified Currency of this Note is Pounds sterling, the following applies: This instrument constitutes [ ] commercial paper [ ] a shorter term debt security [ ] a longer term debt security issued in accordance with regulations made under section 4 of the Banking Act 1987. The issuer of this Note is Citigroup Global Markets Holdings Inc., which is not an authorized institution or a 3 European authorized institution (as such terms are defined in the Banking Act 1987 (Exempt Transactions) Regulation 1997). Repayment of the principal and payment of any interest or premium in connection with this Note has not been guaranteed. IF THE SPECIFIED CURRENCY OF THIS NOTE IS POUNDS STERLING, THE FOLLOWING APPLIES: THIS NOTE IS ISSUED IN ACCORDANCE WITH THE REGULATIONS MADE UNDER SECTION 4 OF THE BANKING ACT 1987. 4 CITIGROUP GLOBAL MARKETS HOLDINGS INC., a corporation duly organized and existing under the laws of the State of New York (herein referred to as the "Company"), for value received hereby promises to pay to bearer, upon presentation and surrender hereof (a) the Principal Amount or, in the case of an Indexed Principal Note, the Face Amount adjusted by reference to prices, changes in prices, or differences between prices, of securities, currencies, intangibles, goods, articles or commodities or by such other objective price, economic or other measures (an "Index") as described on the face hereof or in the pricing supplement attached hereto or delivered herewith, in the Specified Currency on the Stated Maturity shown above or earlier if and to the extent so provided herein, and (b) accrued interest on the Principal Amount then outstanding (or, in the case of an Indexed Principal Note, the Face Amount then outstanding): (i) if this is a Floating Rate Note, at the Initial Interest Rate shown above from the Original Issue Date shown above until the first Interest Reset Date shown above following the Original Issue Date and thereafter at the Base Rate shown above, adjusted by the Spread or Spread Multiplier, if any, shown above, determined in accordance with the provisions hereof, (ii) if this is an Indexed Rate Note, at a rate determined by reference to an Index as described herein, (iii) if this is an Inverse Floating Rate Note, at the Initial Interest Rate shown above from the Original Issue Date shown above until the first Interest Reset Date shown above following the Original Issue Date and thereafter at the Inverse Floating Rate, as determined in accordance with the provisions hereof, or (iv) if this is a Floating Rate / Fixed Rate Note, at a rate determined as described herein, until, in each case, the Principal Amount or the Face Amount then outstanding is paid or duly provided for in accordance with the terms hereof; but, in the case of principal, only after exchange of this Note for interests in a Permanent Global Note, as provided herein and in the Indenture (as defined on the reverse hereof) and, in the case of interest due on or before the exchange of this Note for interests in a Permanent Global Note, any interest payable will be paid to each of Euroclear and Clearstream (as defined below) with respect to that portion of this Note held for its account, but only upon receipt in each case, as of the relevant Interest Payment Date, of a Certificate of Non-U.S. Beneficial Ownership (as defined on the reverse hereof). Each of Euroclear and Clearstream will undertake in such circumstances to credit such interest received by it in respect of this Note to the respective accounts having an interest therein. For purposes of this Note, "Business Day" means: (i) with respect to any Bearer Note, any day that is not a Saturday or Sunday and that is (i) not a day on which banking institutions are authorized or required by law or regulation to be closed in (a) The City of New York, (b) London, England, (c) the place in which this Note is presented for payment or (d) if the Specified Currency (as defined below) is other than U.S. dollars, the financial center of the country issuing the Specified Currency (which in the case of the Euro shall be Brussels, Belgium) and (ii) if the Base Rate specified above is LIBOR, a London Banking Day. "London Banking Day means any day on which dealings in deposits in the Specified Currency are transacted in the London interbank market; (iii) with respect to Bearer Notes having any determination by the exchange rate agent (as defined below) of an exchange rate pursuant to notes having a specified currency other than U.S. dollars, a day on which banking institutions and foreign exchange markets settle payments in the City of New York and London (an "Exchange Rate Business Day"); (iv) with respect to Bearer Notes having a specified currency other than U.S. dollars only, other than Bearer Notes denominated in Euros, any day that, in the principal financial center (as defined below) of the country of the specified currency, is not a day on which banking institutions generally are authorized or obligated by law to close; and (v) with respect to EURIBOR Notes and Notes denominated in Euros, a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer ("TARGET") System is open (a "Target Business Day"). 5 The indebtedness evidenced by this Note is, to the extent set forth in the Indenture, expressly subordinated and subject in right of payment to the prior payment in full of Senior Indebtedness as defined in the Indenture, and this Note is issued subject to such provisions, and each Holder of this Note, by accepting the same, agrees to and shall be bound by such provisions and authorizes and directs the Trustee in his behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination as provided in the Indenture and appoints the Trustee as his attorney-in-fact for any and all such purposes. As used above, a "principal financial center" means the capital city of the country issuing the specified currency. However, with respect to U.S. dollars, Australian dollars, Canadian dollars, and Swiss francs, the principal financial center shall be The City of New York, Sydney, Toronto, and Zurich, respectively. If this Note is an Amortizing Note as shown on the face hereof or in the pricing supplement attached hereto or delivered herewith, a portion or all the principal amount of the Note is payable prior to Stated Maturity in accordance with a schedule, by application of a formula, or by reference to an Index (as described above). This Note will be deposited with a common depositary in London (the "Depositary") for Euroclear Bank S.A./N.V., as operator of the Euroclear System ("Euroclear"), and Clearstream International ("Clearstream"), for credit to the accounts designated by or on behalf of the purchasers hereof. On or after the 40th day following the issuance of this Note, beneficial interests in this Note will be exchangeable for interests in a definitive Global Security in bearer form, without Coupons attached (a "Permanent Global Note"), in a denomination equal to the aggregate principal amount of all interests in this Note so exchanged, only upon receipt (at such time or in connection with an Interest Payment Date prior to such day) of a Certificate of Non-U.S. Beneficial Ownership. Each Permanent Global Note will be deposited with the Depositary for credit to the account or accounts designated by or on behalf of the beneficial owner or owners thereof. The beneficial owner of a Bearer Note represented by an interest in a Permanent Global Note may, upon 30 days' notice to the Trustee given through either Euroclear or Clearstream, exchange such interest for one or more individual Bearer Notes, with appropriate Coupons attached, in any authorized denomination or denominations. References herein to "Bearer Notes" shall, except where otherwise indicated, include interests in a Permanent Global Note as well as individual Bearer Notes and any appurtenant Coupons. Upon any exchange of any portion of this Note for an interest in a Permanent Global Note, the portion of the principal amount hereof so exchanged shall be endorsed by the Trustee on the Schedule of Exchanges hereto, and the principal amount hereof shall be reduced for all purposes by the amount so exchanged. Except as otherwise provided herein or in the Indenture, until exchanged in whole for an interest in a Permanent Global Note, this Note shall in all respects be entitled to the same benefits and be subject to the same terms and conditions of and the Company shall be subject to the same restrictions as those contained on the Permanent Global Note and in the Indenture. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF AND IN ANY PRICING SUPPLEMENT ATTACHED HERETO OR DELIVERED HEREWITH, AND SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE. 6 This Note shall not become valid or obligatory for any purpose unless and until this Note has been authenticated by Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), or its successor, as Trustee. 7 IN WITNESS WHEREOF, the Company has caused this Note to be executed under its corporate seal. Dated: CITIGROUP GLOBAL MARKETS HOLDINGS INC. By_____________________________________ Authorized Officer [Seal] Attest_________________________________ Assistant Secretary CERTIFICATE OF AUTHENTICATION This is one of the Notes issued under the within-mentioned Indenture. Dated: DEUTSCHE BANK TRUST COMPANY AMERICAS (formerly BANKERS TRUST COMPANY), as Trustee By_____________________________________ Authorized Signatory 8 (REVERSE OF SECURITY) CITIGROUP GLOBAL MARKETS HOLDINGS INC. TEMPORARY GLOBAL NOTE REPRESENTING MEDIUM-TERM SUBORDINATED NOTE, SERIES E DUE NINE MONTHS OR MORE FROM DATE OF ISSUE (FLOATING OR INDEXED RATE) This Note represents one or more Bearer Notes having the same Original Issue Date and otherwise identical in terms of a series of a duly authorized issue of securities of the Company designated as specified in the title hereof, and issued and to be issued in either registered or bearer form under the Senior Debt Indenture dated as of December 1, 1988 (the "Indenture"), between the Company and Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), as trustee (the "Trustee"). This Note is governed by the terms and conditions of the Permanent Global Note to be issued in exchange for this Note, which terms and conditions are incorporated herein by reference mutatis mutandis and, except as otherwise provided herein, shall be binding on the Company, the Holder hereof and the Holders of the Bearer Notes represented hereby as if fully set forth herein. Capitalized terms used in this Note that are defined in the Indenture or the Permanent Global Note and are not otherwise defined herein shall have the meanings assigned to them therein. Except as set forth on the Permanent Global Note, the principal hereof and any premium and interest hereon will be paid by the Company in such coin or currency as specified above as at the time of payment shall be legal tender for the payment of public and private debts (the "Specified Currency"), at the office of any paying agent located outside the United States as the Company may appoint from time to time (the "Paying Agents"). As used herein, a "Certificate of Non-U.S. Beneficial Ownership" is a certificate, in the form adopted by the Company, as to beneficial ownership by persons other than United States persons or as to other qualifying ownership by or through financial institutions in compliance with applicable U.S. Treasury regulations. This Note shall be deemed to be a contract made and to be performed solely in the State of New York, and for all purposes shall be governed by, and construed in accordance with, the laws of said State without regard to the conflicts of law rules of said State. SCHEDULE OF EXCHANGES The following exchanges of a portion of this Note for interests in a Permanent Global Note and the following payments of interest in respect of this Note have been made.
Principal Amount Date of Exchanged for Remaining Exchange or an Interest in Principal Notation made Interest Interest a Permanent Amount of on behalf of Payment Paid Global Note this Note the Trustee ---------- -------- -------------- ---------- ------------- _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________ _____________ __________ _________________ ______________ _____________
EX-4.FF 9 x99885s3exv4wff.txt FORMS OF MEDIUM-TERM PERMANENT GLOBAL NOTES, SERIES D & E Exhibit 4(ff) BEARER PRINCIPAL AMOUNT No. FX ___ OR FACE AMOUNT $_______________ CUSIP:__________ CITIGROUP GLOBAL MARKETS HOLDINGS INC. COMMON CODE PERMANENT GLOBAL NOTE REPRESENTING MEDIUM-TERM SENIOR NOTE, SERIES D DUE NINE MONTHS OR MORE FROM DATE OF ISSUE (FIXED RATE) THIS SECURITY IS A PERMANENT GLOBAL NOTE, WITHOUT COUPONS, EXCHANGEABLE FOR INDIVIDUAL BEARER NOTES, WITH COUPONS, IF ANY, IN THE DENOMINATION OF U.S. $10,000 OR ANY LARGER AMOUNT THAT IS AN INTEGRAL MULTIPLE OF U.S. $1,000 (OR SUCH OTHER DENOMINATIONS AS ARE SPECIFIED BELOW FOR ANOTHER CURRENCY). THE RIGHTS ATTACHING TO THIS NOTE AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR INDIVIDUAL BEARER NOTES ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL BEARER NOTES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTION 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE. IF APPLICABLE, THE "TOTAL AMOUNT OF OID" AND "YIELD TO MATURITY" SET FORTH BELOW WILL BE COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE UNITED STATES FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES. Issue Price: Original Issue Date: Interest Rate: Stated Maturity: Specified Currency (If other than U.S. dollars): Authorized Denominations: (If other than as set forth in the Prospectus Supplement) Dual Currency Note: [ ] Yes (see attached) [ ] No Optional Payment Currency: Designated Exchange Rate: Interest Payment Dates: Accrue to Pay: [ ] Yes [ ] No Indexed Principal Note: [ ] Yes (see attached) [ ] No Interest Rate Reset: [ ] The Interest Rate may not be changed prior to Stated Maturity. [ ] The Interest Rate may be changed prior to Stated Maturity (see attached). Optional Reset Dates (if applicable): Amortizing Note: [ ] Yes [ ] No Amortization Schedule: Optional Redemption: [ ] Yes [ ] No Optional Redemption Dates: Redemption Prices: Bond Yield to Maturity: Bond Yield to Call: Optional Repayment: [ ] Yes [ ] No Optional Repayment Dates: Optional Repayment Prices: Optional Extension of Stated Maturity: [ ] Yes [ ] No Final Maturity: Discount Note: [ ] Yes [ ] No Total Amount of OID: Yield to Maturity: Renewable Note: [ ] Yes (see attached) [ ] No Initial Maturity Date: 2 Special Election Interval (if applicable): Amount (if less than entire principal amount) as to which election may be exercised: If the Specified Currency of this Note is Pounds sterling, the following applies: This instrument constitutes [ ] commercial paper [ ] a shorter term debt security [ ] a longer term debt security issued in accordance with regulations made under section 4 of the Banking Act 1987. The issuer of this Note is Citigroup Global Markets Holdings Inc., which is not an authorized institution or a European authorized institution (as such terms are defined in the Banking Act 1987 (Exempt Transactions) Regulation 1997). Repayment of the principal and payment of any interest or premium in connection with this Note has not been guaranteed. IF THE SPECIFIED CURRENCY OF THIS NOTE IS POUNDS STERLING, THE FOLLOWING APPLIES: THIS NOTE IS ISSUED IN ACCORDANCE WITH THE REGULATIONS MADE UNDER SECTION 4 OF THE BANKING ACT 1987. 3 CITIGROUP GLOBAL MARKETS HOLDINGS INC., a corporation duly organized and existing under the laws of the State of New York (herein referred to as the "Company"), for value received hereby promises to pay to bearer, upon presentation and surrender hereof (a) the Principal Amount or, in the case of an Indexed Principal Note, the Face Amount adjusted by reference to prices, changes in prices, or differences between prices, of securities, currencies, intangibles, goods, articles or commodities or by such other objective price, economic or other measures (an "Index") as described on the face hereof or in the pricing supplement attached hereto or delivered herewith, in the Specified Currency on the Stated Maturity shown above or earlier if and to the extent so provided herein and (b) accrued interest on the Principal Amount then outstanding (or in the case of an Indexed Principal Note, the Face Amount, then outstanding) at the Interest Rate shown above from the Original Issue Date shown above or from the most recent date to which interest has been paid or duly provided for, annually in arrears (unless otherwise set forth herein or in the pricing supplement attached hereto or delivered herewith) on the Interest Payment Dates specified on the face of this Note or in the pricing supplement attached hereto or delivered herewith and at Maturity, until, in either case, the Principal Amount then outstanding or the Face Amount is paid or duly provided for in accordance with the terms hereof. Unless otherwise specified herein or in the pricing supplement attached hereto or delivered herewith, interest on this Note, if any, will be computed on the basis of a 360-day year of twelve 30-day months or, in the case of an incomplete month, the number of days elapsed. For purposes of this Note, "Business Day" means: (i) with respect to any Bearer Note, any day that is not a Saturday or Sunday and that, in The City of New York, is not a day on which banking institutions generally are authorized or obligated by law or executive order to close; (ii) with respect to Bearer Notes having a specified currency other than U.S. dollars only, other than Bearer Notes denominated in Euros, any day that, in the principal financial center (as defined below) of the country of the specified currency, is not a day on which banking institutions generally are authorized or obligated by law to close; (iii) with respect to Notes denominated in Euros, a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer ("TARGET") System is open (a "TARGET Business Day"); and (iv) with respect to any determination by the exchange rate agent (as defined below) of an exchange rate pursuant to notes having a specified currency other than U.S. dollars, any such day on which banking institutions and foreign exchange markets settle payments in New York City and London (an "Exchange Rate Business Day"). As used above, a "principal financial center" means the capital city of the country issuing the specified currency. However, with respect to U.S. dollars, Australian dollars, Canadian dollars, and Swiss francs, the principal financial center shall be The City of New York, Sydney, Toronto, and Zurich, respectively. If this Note is an Amortizing Note as shown on the face hereof or in the pricing supplement attached hereto or delivered herewith, a portion or all the principal amount of the Note is payable prior to Stated Maturity in accordance with a schedule, by application of a formula, or by reference to an Index (as described above). This Note is exchangeable in whole or from time to time in part without charge for individual Bearer Notes, with appropriate Coupons attached, if any, in the denomination of U.S.$10,000 or any larger amount that is an integral multiple of U.S.$1,000 (or such other denominations as are specified above for another currency), upon 30 days' notice to the Trustee given through either Euroclear Bank S.A./N.V. or Clearstream International. Upon any exchange of any portion of this Note for individual Bearer Notes, the portion of the principal amount hereof so 4 exchanged shall be endorsed by the Trustee in the Schedule of Issuances, Exchanges and Aggregate principal amount hereto, and the principal amount hereof shall be reduced for all purposes by the amount so exchanged. Except as otherwise provided herein or in the Indenture, until exchanged in full for individual Bearer Notes, this Note shall in all respects be entitled to the same benefits and subject to the same terms and conditions of, and the Company shall be subject to the same restrictions as those contained on the individual Bearer Notes and in the Indenture. Except under certain circumstances for Notes having Specified Currencies other than U.S. dollars, payments of the principal hereof and any premium and interest hereon will be made only in the Specified Currency. Payments in respect of this Note and any Coupon will be made only against surrender of this Note or such Coupon, at the offices of the Paying Agents outside the United States listed on the reverse hereof. At the direction of the Holder of this Note or any Coupon, and subject to applicable laws and regulations, such payments will be made by check drawn on a bank in The City of New York (in the case of U.S. dollar payments) or outside the United States (in the case of payments in a currency other than U.S. dollars) mailed to an address outside the United States furnished by the Holder hereof or, at the option of the Holder hereof, by wire transfer (pursuant to written instructions supplied by the Holder hereof) to an account maintained by the payee with a bank located outside the United States. No payment in respect of this Note or any Coupon will be made upon presentation of this Note or such Coupon at any office or agency of the Trustee or any other paying agency maintained by the Company in the United States, nor will any such payment be made by transfer to an account, or by mail to an address, in the United States. Notwithstanding the foregoing, if U.S. dollar payments in respect of this Note or any Coupons at the offices of all Paying Agents outside the United States become illegal or are effectively precluded because of the imposition of exchange controls or similar restrictions on the full payment or receipt of such amounts in U.S. dollars, the Company will appoint an office or agency (which may be the Trustee) in the United States at which such payments may be made. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF AND IN ANY PRICING SUPPLEMENT ATTACHED HERETO OR DELIVERED HEREWITH, AND SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE. This Note shall not become valid or obligatory for any purpose unless and until this Note has been authenticated by Citibank, N.A., or its successor, as authentication agent. 5 IN WITNESS WHEREOF, the Company has caused this Note to be executed under its corporate seal. Dated: CITIGROUP GLOBAL MARKETS HOLDINGS INC. By_____________________________________ Authorized Officer [Seal] Attest_________________________________ Assistant Secretary CERTIFICATE OF AUTHENTICATION This is one of the Bearer Notes issued under the within-mentioned Indenture. Dated: CITIBANK, N.A., as authentication agent By_____________________________________ Authorized Signatory 6 (REVERSE OF SECURITY) CITIGROUP GLOBAL MARKETS HOLDINGS INC. PERMANENT GLOBAL NOTE REPRESENTING MEDIUM-TERM SENIOR NOTE, SERIES D DUE NINE MONTHS OR MORE FROM DATE OF ISSUE (FIXED RATE) General This Note is one of a series of duly authorized debt securities of the Company (the "Debt Securities") issued or to be issued in one or more series under an indenture, dated as of December 1, 1988, as amended (the "Indenture"), between the Company and Bank One Trust Company, N.A., as successor trustee (the "Trustee," which term includes any successor Trustee under the Indenture) to which indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Debt Securities and of the terms upon which the Debt Securities are, and are to be, authenticated and delivered. The U.S. dollar equivalent of the public offering price or purchase price of Notes denominated in currencies other than U.S. dollars will be determined by the Company or its agent, as exchange rate agent for the Notes (the "Exchange Rate Agent") on the basis of the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York (the "Market Exchange Rate") for such currencies on the applicable issue dates. The Notes are in bearer form with coupons. Unless otherwise specified in the applicable pricing supplement attached hereto or delivered herewith, the authorized denominations of Bearer Notes denominated in U.S. dollars will be U.S.$10,000 and any larger amount that is an integral multiple of U.S.$1,000. The authorized denominations of Bearer Notes denominated in a currency other than U.S. dollars will be the approximate equivalents thereof in the Specified Currency. Fixed Rate Notes This Note will bear interest from its Original Issue Date, or from the last Interest Payment Date to which interest has been paid or duly provided for, at the Interest Rate stated on the face hereof or in the pricing supplement attached hereto or delivered herewith until the principal amount hereof is paid or made available for payment, except as otherwise described below under "Subsequent Interest Periods" and "Extension of Stated Maturity", and except that if so specified in the attached pricing supplement, the rate of interest payable may be subject to adjustment as specified therein. Unless otherwise set forth herein or in the pricing supplement attached hereto or delivered herewith, interest on this Note will be payable semiannually in arrears on the Interest Payment Dates set forth above and at Stated Maturity. If an Interest Payment Date with respect to any Note would otherwise be a day that is not a Business Day, such Interest Payment Date shall not be postponed; provided, however, that any payment required to be made in respect of such Note on a date (including the day of Stated Maturity) that is not a Business Day for such Note need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on such date, and no additional interest shall accrue as a result of such delayed payment. However, if with respect to any Note for which "Accrue to Pay" is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, any Interest Payment Date with respect to such Fixed Rate Note would otherwise be a day that is not a Business Day, such Interest Payment Date shall be postponed to the next succeeding Business Day. Each payment of interest in respect of an Interest Payment Date shall include interest accrued through the day before such Interest Payment Date. Unless otherwise specified herein, interest on this Note will be computed on the basis of a 360-day year of twelve 30-day months ("30 over 360") or, in the case of an incomplete month, the number of days elapsed. Subsequent Interest Periods If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Interest Rate on this Note may be reset by the Company on the date or dates specified on the face hereof or in the pricing supplement attached hereto or delivered herewith (each an "Optional Reset Date"). The Company may reset the Interest Rate by notifying the Trustee for this Note at least 45 but not more than 60 days prior to each Optional Reset Date. Not later than 40 days prior to each Optional Reset Date, the Trustee shall provide notice (the "Reset Notice"), in accordance with "Notices" below, indicating whether the Company has elected to reset the Interest Rate, and if so, (i) such new Interest Rate and (ii) the provisions, if any, for redemption during the period from such Optional Reset Date to the next Optional Reset Date, or, if there is no such next Optional Reset Date, to the Stated Maturity of this Note (each such period, a "Subsequent Interest Period"), including the date or dates on which or the period or periods during which and the price or prices at which such redemption may occur during the Subsequent Interest Period. Upon the transmittal by the Trustee of a Reset Notice to the Holder of a Note, such new Interest Rate shall take effect automatically as prior to the transmittal of such Reset Notice. Notwithstanding the foregoing, not later than 20 days prior to the Optional Reset Date, the Company may, at its option, revoke the Interest Rate provided for in the Reset Notice and establish a higher Interest Rate for the Subsequent Interest Period by causing the Trustee to provide notice of such higher Interest Rate to the Holder of this Note. Such notice shall be irrevocable. All Bearer Notes with respect to which the Interest Rate is reset on an Optional Reset Date will bear such higher Interest Rate. The Holder of this Note will have the option to elect repayment of the Note by the Company on each Optional Reset Date at a price equal to the principal amount hereof, plus interest accrued to such Optional Reset Date. In order to obtain repayment on an Optional Reset Date, the Holder must follow the procedures set forth below for optional repayment, except that the period for delivery or notification to the Paying Agent shall be at least 25 but not more than 35 days prior to such Optional Reset Date, and except that if the Holder has tendered this Note for repayment pursuant to a Reset Notice, the Holder may, by written notice to the Paying Agent, revoke such tender for repayment until the close of business on the tenth day before the Optional Reset Date. Indexed Notes If this Note is an Indexed Principal Note, then the principal amount payable at Stated Maturity or earlier redemption or retirement is determined by reference to the amount designated on the face hereof or in the pricing supplement attached hereto or delivered herewith as the Face Amount of this Note and by reference to the Index as described on the face hereof or in the pricing supplement attached hereto or delivered herewith. If this Note is an Indexed Principal Note, the 2 principal amount payable at Stated Maturity or any earlier redemption or repayment of this Note may be different from the Face Amount. If a third party is appointed to calculate or announce the Index for a particular Indexed Note and the third party either suspends the calculation or announcement of such Index or changes the basis upon which such Index is calculated in a manner that is inconsistent with the applicable pricing supplement, then the Company will select another third party to calculate or announce the Index. The agent or another affiliate of the Company may be either the original or successor third party selected by the Company. If for any reason such Index cannot be calculated on the same basis and subject to the same conditions and controls as applied to the original third party, then the indexed principal amount of this Note shall be calculated in the manner set forth in the applicable pricing supplement. Any determination of such third party shall in the absence of manifest error be binding on all parties. Payments in Currencies other than the Specified Currency Except as set forth below, if any payment in respect hereof is required to be made in a Specified Currency other than U.S. dollars and such currency is unavailable due to the imposition of exchange controls or other circumstances beyond the Company's control or is no longer used by the government of the country issuing such currency or for the settlement of transactions by public institutions of or within the international banking community, then such payment shall be made in U.S. dollars until such currency is again available or so used. The amount so payable in such foreign currency shall be converted into U.S. dollars on the basis of the most recently available Market Exchange Rate for such currency or as otherwise indicated on the face hereof or in the pricing supplement attached hereto or delivered herewith. Any payment made under such circumstances in U.S. dollars will not constitute an Event of Default under the Indenture. In the event of an official redenomination of the Specified Currency of this Note (other than as a result of European Monetary Union, but including, without limitation, an official redenomination of any such Specified Currency that is a composite currency), the obligations of the Company with respect to payments on this Note shall, in all cases, be deemed immediately following such redenomination to provide for the payment of that amount of redenominated currency representing the amount of such obligations immediately before such redenomination. This Note does not provide for any adjustment to any amount payable under this Note as a result of (i) any change in the value of the Specified Currency hereof relative to any other currency due solely to fluctuations in exchange rates or (ii) any redenomination of any component currency of any composite currency (unless such composite currency is itself officially redenominated). If this Note is denominated in a currency of a country participating in the European Monetary Union, the procedures described in this paragraph shall not apply, and the obligations of the Company with respect to payments on this Note shall instead be determined as set forth in the following paragraph. Certain of the foreign currencies in which debt securities may be denominated or payments in respect of index warrants may be due or by which amounts due on the offered securities may be calculated could be issued by countries participating in Stage III of the European Economic and Monetary Union. Stage III began on January 1, 1999 for the eleven participating member states of the European Union that satisfied the economic convergence criteria in the Treaty on European Union: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. Greece became a participating member state on January 1, 2001. 3 Stage III includes the introduction of the "Euro," which, along with the present national currency of each participating member state, is legal tender in the participating member states. Dual Currency Notes If this Note is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as a Dual Currency Note, the Company may have a one time option of making all payments of principal, premium, if any, and interest on all Dual Currency Notes issued on the same day and having the same terms (a "Tranche"), which payments would otherwise be made in the Specified Currency of such Notes, in an optional currency (the "Optional Payment Currency"). Such option will be exercisable in whole but not in part on an "Option Election Date," which will be any one of the dates specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. If the Company makes such an election, the amount payable in the Optional Payment Currency shall be determined using the Designated Exchange Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. If such election is made, notice of such election shall be provided, in accordance with "Notices" below, within two Business Days of the Option Election Date and shall state (i) the first date, whether an Interest Payment Date and/or Stated Maturity, in which scheduled payments in the Optional Payment Currency will be made and (ii) the Designated Exchange Rate. Any such notice by the Company, once given, may not be withdrawn. The equivalent value in the Specified Currency of payments made after such an election may be less, at the then current exchange rate, than if the Company had made such payment in the Specified Currency. Renewable Notes If this Note is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as a Renewable Note, this Note will mature on an Interest Payment Date occurring in or prior to the twelfth month following the Original Issue Date of this Note (the "Initial Maturity Date") unless the term of all or any portion of this Note is renewed in accordance with the following procedures: On the Interest Payment Date occurring in the sixth month (unless a different interval (the "Special Election Interval") is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith) prior to the Initial Maturity Date of this Note (the "Initial Renewal Date") and on the Interest Payment Date occurring in each sixth month (or in the last month of each Special Election Interval) after such Initial Renewal Date (each, together with the Initial Renewal Date, a "Renewal Date"), the term of this Note may be extended to the Interest Payment Date occurring in the twelfth month (or, if a Special Election Interval is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the last month in a period equal to twice the Special Election Interval) after such Renewal Date, if the Holder of this Note elects to extend the term of this Note or any portion thereof as described below. If the Holder does not elect to extend the term of any portion of the principal amount of this Note during the specified period prior to any Renewal Date, such portion will become due and payable on the Interest Payment Date occurring in the sixth month (or the last month in the Special Election Interval) after such Renewal Date (the "New Maturity Date"). 4 The Holder may elect to renew the term of this Note, or if so specified, any portion thereof, by delivering a notice to such effect to any duly appointed paying agent not less than 15 nor more than 30 days prior to such Renewal Date, unless another period is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Such election will be irrevocable and will be binding upon each subsequent Holder of this Note. An election to renew the term of this Note may be exercised with respect to less than the entire principal amount of this Note only if so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith and then only in such principal amount, or any integral multiple in excess thereof, as is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Notwithstanding the foregoing, the term of this Note may not be extended beyond the Stated Maturity specified for this Note on the face hereof or in the pricing supplement attached hereto or delivered herewith. If the Holder does not elect to renew the term, this Note must be presented to any duly appointed paying agent and, as soon as practicable following receipt of such Note such paying agent shall issue in exchange therefor in the name of such Holder (i) a Note, in a principal amount equal to the principal amount of such exchanged Note for which no election to renew the term thereof was exercised, with terms identical to those specified on such exchanged Note (except that such Note shall have a fixed, nonrenewable Stated Maturity on the New Maturity Date) and (ii) if an election to renew is made with respect to less than the full principal amount of such Holder's Note, such paying agent shall issue in exchange for such Note in the name of such Holder a replacement Renewable Note, in a principal amount equal to the principal amount of such exchanged Note for which the election to renew was made, with terms otherwise identical to the exchanged Note. Extension of Stated Maturity If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Stated Maturity of this Note may be extended at the option of the Company for one or more periods of whole years specified on the face hereof or in the pricing supplement attached hereto or delivered herewith (each an "Extension Period") from one to five years up to but not beyond the date (the "Final Maturity") set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith. The Company may exercise such option by notifying the Trustee for this Note at least 45 but not more than 60 days prior to the original Stated Maturity of this Note. If the Company exercises such option, the Trustee shall provide to the Holder of this Note not later than 40 days prior to the original Stated Maturity notice (the "Extension Notice"), in accordance with "Notices" below. The Extension Notice will set forth (i) the election of the Company to extend the Stated Maturity, (ii) the new Stated Maturity, (iii) the Interest Rate applicable to the Extension Period, and (iv) the provisions, if any, for redemption during such Extension Period including the date or dates on which, or the period or periods during which, and the price or prices at which, such redemption may occur during the Extension Period. Upon the provision by such Trustee of an Extension Notice to the Holder hereof, the Stated Maturity of this Note shall be extended automatically and, except as modified by the Extension Notice and as described in the next paragraph, this Note will have the same terms as prior to the provision of such Notice. Notwithstanding the foregoing, not later than 20 days prior to the original Stated Maturity of this Note, the Company may, at its option, revoke the Interest Rate provided for in the Extension Notice and establish a higher Interest Rate for the Extension Period by causing the Trustee to provide notice of such higher Interest Rate, as the case may be, hereof in accordance with "Notices" below. Such notice shall be irrevocable. All Notes with respect to which the Stated 5 Maturity is extended will bear such higher Interest Rate for the Extension Period, whether or not tendered for repayment. If the Company extends the Stated Maturity of this Note, the Holder will have the option to elect repayment of this Note by the Company on the original Stated Maturity at a price equal to the principal amount hereof, plus interest accrued to such date. In order to obtain repayment on such original Stated Maturity once the Company has extended the Stated Maturity hereof, the Holder must follow the procedures set forth below for optional repayment, except that the period for delivery or notification to the Paying Agent shall be at least 25 but not more than 35 days before the original Stated Maturity, and except that if the Holder has tendered this Note for repayment pursuant to an Extension Notice, the Holder may, by written notice to the Trustee or Paying Agent, revoke such tender for repayment until the close of business on the tenth calendar day before the original Stated Maturity. Optional Redemption, Repayment and Repurchase If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Company may, at its option, redeem this Note in whole or in part, on the date or dates (each an "Optional Redemption Date") specified herein, at the price (the "Redemption Price") (together with accrued interest to such Optional Redemption Date) specified herein. If the Company elects to exercise such option with respect to this Note, at least 30 days prior to the date of redemption, the Trustee shall provide notice of such redemption to the Holder hereof in accordance with "Notices" below. In the event of redemption of this Note in part only, a new Note or Notes for the unredeemed portion hereof shall be issued to the Holder hereof upon the cancellation hereof. Notes redeemed prior to Stated Maturity must be presented for payment together with all unmatured Coupons, if any, appertaining thereto, failing which the amount of any missing unmatured Coupon will be deducted from the sum due for payment. If so specified on the face hereof or in the pricing supplement attached hereto to delivered herewith, this Note will be repayable prior to Stated Maturity at the option of the Holder, on the Optional Repayment Dates shown on the face hereof or in the pricing supplement attached hereto or delivered herewith at the Optional Repayment Prices shown on the face hereof or in the pricing supplement attached herein or delivered herewith, together with accrued interest to the date of repayment. Notes that are to be repaid prior to Stated Maturity must be presented for payment together with all unmatured Coupons, if any, appertaining thereto, failing which the amount of any missing unmatured Coupon will be deducted from the sum due for payment. In order for this Note to be repaid, the Principal Paying Agent must receive this Note at least 30 but not more than 45 days prior to an Optional Repayment Date. Any tender of this Note for repayment (except pursuant to a Reset Notice or an Extension Notice) shall be irrevocable. The repayment option may be exercised by the Holder of this Note for less than the entire principal amount of this Note; provided that the principal amount of this Note remaining outstanding after repayment is an authorized denomination. Upon such partial repayment, this Note shall be canceled and a new Note or Notes for the remaining principal amount hereof shall be issued to the Holder of this Note. Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, this Note will not be subject to any sinking fund. 6 Notwithstanding anything herein to the contrary, if this Note is a Discount Note, the amount payable in the event of redemption or repayment prior to the Stated Maturity hereof (other than pursuant to an optional redemption by the Company at a stated Redemption Price), in lieu of the principal amount due at the Stated Maturity hereof, shall be the Amortized Face Amount of this Note as of the redemption date or the date of repayment, as the case may be. The Amortized Face Amount of this Note on any date shall be the amount equal to (i) the Issue Price set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith plus (ii) that portion of the difference between such Issue Price and the stated principal amount of such Note that has accrued by such date at (x) the Bond Yield to Stated Maturity set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith or (y) if so specified, the Bond Yield to Call set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith (computed in each case in accordance with generally accepted United States bond yield computation principles); provided, however, that in no event shall the Amortized Face Amount of a Note exceed its stated principal amount. The Bond Yield to Call listed on the face of this Note or in the pricing supplement attached hereto or delivered herewith shall be computed on the basis of the first occurring Optional Redemption Date with respect to such Note and the amount payable on such Optional Redemption Date. In the event that such Note is not redeemed on such first occurring Optional Redemption Date, the Bond Yield to Call with respect to such Note shall be recomputed on such Optional Redemption Date on the basis of the next occurring Optional Redemption Date and the amount payable on such Optional Redemption Date, and shall continue to be so recomputed on each succeeding Optional Redemption Date until the Note is so redeemed. Tax Redemption The Bearer Notes of a series may be redeemed at the option of the Company in whole, but not in part, at any time on giving at least 30 but not more than 60 days' notice in accordance with "Notices" below (which notice shall be irrevocable), at the respective Redemption Prices thereof, if the Company has or will become obligated to pay additional interest on such Notes as described in the following paragraph as a result of any change in, or amendment to, the laws (or any regulations or rulings promulgated thereunder) of the United States or any political subdivision or taxing authority thereof or therein, or any change in the application or official interpretation of such laws, regulations or rulings, which change or amendment becomes effective on or after their respective Original Issue Dates, and such obligation cannot be avoided by the Company taking reasonable measures available to it; provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Company would be obligated to pay such additional interest were a payment in respect of such Notes then due. Prior to the publication of any notice of redemption pursuant to this paragraph, the Company shall deliver to the Trustee for the Notes to be redeemed a certificate stating that the Company is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Company so to redeem have occurred, and an opinion of independent counsel to the effect that the Company has or will become obligated to pay such additional interest as a result of such change or amendment. Payment of Additional Interest The Company will, subject to the exceptions and limitations set forth below, pay as additional interest to the Holder of this Note or any Coupon that is a United States Alien (as defined below) such amounts as may be necessary so that every net payment on this Note or such Coupon, after deduction or withholding for or on account of any present or future tax, assessment or other governmental charge imposed upon or as a result of such payment by the United States (or any 7 political subdivision or taxing authority thereof or therein), will not be less than the amount provided in this Note or such Coupon to be then due and payable. However, the Company will not be required to make any such payment of additional interest to such Holder for or an account of: (a) any tax, assessment or other governmental charge that would not have been imposed but for (i) the existence of any present or former connection between such Holder (or between a fiduciary, settlor or beneficiary of, or a Person holding a power over, such Holder, if such Holder is an estate or a trust, or a member or shareholder of such Holder, if such Holder is a partnership or a corporation) and the United States, including, without limitation, such Holder (or such fiduciary, settlor, beneficiary, Person holding a power, member or shareholder) being or having been a citizen or resident thereof or being or having been engaged in trade or business or present therein or having or having had a permanent establishment therein or (ii) such Holder's past or present status as a passive foreign investment company, a personal holding company, foreign personal holding company, a controlled foreign corporation for United States tax purposes or private foundation or other tax-exempt organization with respect to the United States or as a corporation that accumulates earnings to avoid United States federal income tax; (b) any estate, inheritance, gift, sales, transfer or personal property tax or any similar tax, assessment or other governmental charge; (c) any tax, assessment or other governmental charge that would not have been imposed but for the presentation by the Holder of this Note or such Coupon for payment more than 15 days after the date on which such payment became due and payable or on which payment thereof was duly provided for, whichever occurred later; (d) any tax, assessment or other governmental charge that is payable otherwise than by deduction or withholding from a payment on this Note or such Coupon; (e) any tax, assessment or other governmental charge required to be deducted or withheld by any Paying Agent from a payment on this Note or such Coupon, if such payment can be made without such deduction or withholding by any other Paying Agent; or (f) any tax, assessment or other governmental charge imposed on a Holder that actually or constructively owns ten percent or more of the combined voting power of all classes of stock of the Company or is a controlled foreign corporation related to the Company through stock ownership; nor shall such additional interest be paid with respect to a payment on this Note or such Coupon to a Holder that is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner would not have been entitled to the additional interest had such beneficiary, settlor, member or beneficial owner been the Holder of this Note or such Coupon. The term "United States Alien" means any person who, for United States federal income tax purposes, is a foreign corporation, a nonresident alien individual, a nonresident alien fiduciary of a foreign estate or trust, or a foreign partnership one or more of the members of which is, for United States federal income tax purposes, a foreign corporation, a nonresident alien individual or a nonresident alien fiduciary of a foreign estate or trust. 8 Special Tax Redemption If the Company shall determine that any payment made outside the United States by the Company or any of its Paying Agents in respect of this Note or any Coupon appertaining thereto would, under any present or future laws or regulations of the United States, be subject to any certification, documentation, information or other reporting requirement of any kind, the effect of which requirement is the disclosure to the Company, any Paying Agent or any governmental authority of the nationality, residence or identity of a beneficial owner that is a United States Alien (other than such a requirement (a) that would not be applicable to a payment made by the Company or any one of its Paying Agents (i) directly to the beneficial owner or (ii) to a custodian, nominee or other agent of the beneficial owner or (b) that can be satisfied by such custodian, nominee or other agent certifying to the effect that the beneficial owner is a United States Alien; provided that, in any case referred to in clause (a) (ii) or (b), payment by the custodian, nominee, or agent to the beneficial owner is not otherwise subject to any such requirement), then the Company shall elect either (x) to redeem such Note in whole, but not in part, at its Redemption Price, or (y) if the conditions described in the next succeeding paragraph are satisfied, to pay the additional interest specified in such paragraph. The Company shall make such determination as soon as practicable and publish prompt notice thereof stating the effective date of such certification, documentation, information or other reporting requirement, whether the Company elects to redeem the Note or to pay the additional interest specified in the next succeeding paragraph and (if applicable) the last date by which the redemption of the Note must take place. If this Note is to be redeemed as described in this paragraph, the redemption shall take place on such date, not later than one year after the publication of the determination notice, as the Company shall specify by notice given to the Trustee at least 60 days before the redemption date. Notice of such redemption shall be given to the Holder of this Note at least 30 but not more than 60 days prior to the redemption date. Notwithstanding the foregoing, the Company shall not so redeem the Note if the Company shall subsequently determine, at least 30 days prior to the redemption date, that subsequent payments on the Note would not be subject to any such certification, documentation, information or other reporting requirement, in which case the Company shall publish prompt notice of such subsequent determination and any earlier redemption notice given shall be revoked and of no further effect. Prior to the publication of any determination notice, the Company shall deliver to the Trustee for the Note to be redeemed a certificate stating that the Company is obligated to make such determination and setting forth a statement of facts showing that the conditions precedent to the obligation of the Company to redeem the Note or to pay the additional interest specified in the next succeeding paragraph have occurred, and an opinion of independent counsel to the effect that such conditions have occurred. If and so long as the certification, documentation, information or other reporting requirement referred to in the preceding paragraph would be fully satisfied by payment of a backup withholding tax or similar charge, the Company may elect to pay as additional interest such amounts as may be necessary so that every net payment made outside the United States following the effective date of such requirement by the Company or any of its Paying Agents of which the beneficial owner is a United States Alien (but without any requirement that the nationality, residence or identity of such beneficial owner be disclosed to the Company, any paying agent or any governmental authority), after deduction or withholding for or on account of such backup withholding tax or similar charge (other than a backup withholding tax or similar charge that (i) would not be applicable 9 in the circumstances referred to in the parenthetical clause of the first sentence of the first paragraph of this section or (ii) is imposed as a result of presentation of this Note for payment more than 15 days after the date on which such payment became due and payable or on which payment thereof was duly provided for, whichever occurred later), will not be less than the amount then due and payable. If the Company elects to pay additional interest, then the Company shall have the right thereafter to redeem this Note at any time in whole, but not in part, at the Redemption Price, subject to the provisions described above. If the Company elects to pay additional interest and the condition specified above should no longer be satisfied, then the Company shall redeem this Note in whole, but not in part, at the Redemption Price, subject to the provisions of this section. Any such redemption payments made by the Company shall be subject to the continuing obligation of the Company to pay additional interest as described above. Paying Agents The Company has initially appointed as its Paying Agents for Bearer Notes of this Series the offices listed below: Principal Paying Agent: Citibank, N.A. 5 Carmelite Street London, England EC4Y OPA Paying Agent: Kredietbank S.A. Luxembourgeoise 43 Boulevard Royal Luxembourg Luxembourg City 2955 The Company reserves the right at any time to vary or terminate the appointment of any Paying Agent and to appoint additional or other Paying Agents and to approve any change in the office through which any Paying Agent acts, provided that there will at all times be a Paying Agent (which may be the Trustee) in at least one city in Europe, which, so long as Bearer Notes are listed on the Luxembourg Stock Exchange and the rules of that exchange shall so require, shall include Luxembourg. Notice of any such termination or appointment and of any changes in the specified offices of the Trustee or any Paying Agent will be given to the Holder hereof as described below. Notices All notices to Holders of this Note will be deemed to have been duly given if published on two separate Business Days in a leading London daily newspaper (which is expected to be the Financial Times) and, with respect to any series of Bearer Notes that may be listed on the Luxembourg Stock Exchange, if such exchange so requires, in Luxembourg in a newspaper of general circulation in Luxembourg (which is expected to be the Luxemburger Wort). Such notices shall be deemed to have been given on the date of the first such publication. 10 Other Terms As provided in the Indenture and subject to certain limitations therein set forth, this Note is exchangeable for a like aggregate principal amount of Bearer Notes of different authorized denominations, as requested by the Person surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. If an Event of Default with respect to the Debt Securities of this series shall have occurred and be continuing, the principal of all the Debt Securities of this series may be declared due and payable in this manner and with the effect provided in the Indenture. In case this Note or any Coupon shall at any time become mutilated, destroyed, stolen or lost, it may be replaced at the specified office of the Principal Paying Agent in London; or, with respect to any series of Bearer Notes that are listed on the Luxembourg Stock Exchange, at the specified office of the Paying Agent in Luxembourg, upon payment by the claimant of such expenses as may be incurred in connection therewith and, in the case of destruction, theft or loss, on such terms as to evidence and indemnity as the Company or the Trustee may reasonably require. Mutilated or defaced Bearer Notes or Coupons must be surrendered before replacements will be issued. All monies paid by the Company to a Trustee or Paying Agent for the payment of principal of or any premium or interest on any Bearer Note or for the payment of any Coupon which remain unclaimed at the end of two years after such payments shall have become due and payable will be repaid to the Company, at its written request, and the Holder of such Note or Coupon will thereafter look only to the Company for payment, such payment to be made only outside the United States. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Debt Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of Debt Securities at the time outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Debt Securities of any series at the time outstanding, on behalf of the Holders of all the Debt Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Debt Security shall be conclusive and binding upon such Holder and upon all future Holders of this Debt Security and of any Debt Security issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon the Debt Security. Holders of Debt Securities may not enforce their rights pursuant to the Indenture or the Note except as provided in the Indenture. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed. 11 The Company may, without the consent of the Holders of the Notes, consolidate with, merge into, or transfer substantially all of its assets to, a corporation that is a U.S. Person, provided that the successor corporation assumes all obligations of the Company under the Notes and certain other conditions are met, including a waiver by the successor corporation of any right to redeem the Notes under circumstances in which the successor corporation would be entitled to redeem the Notes but the Company would not have been entitled to do so. Except as provided above, the obligation to pay the principal hereof (and premium, if any) and interest hereon in the designated currency of payment is of the essence. To the fullest extent possible under applicable law, judgments in respect of this Note shall be given in such currency. The obligation of the Company to make such payments in the designated currency of payment shall, notwithstanding any payment in any other currency (whether pursuant to a judgment or otherwise), be discharged only to the extent of the amount in the designated currency of payment that the Holder of this Note may, in accordance with normal banking procedures, purchase with the sum paid in such other currency (after any premium and cost of exchange) on the business day in the country of issue of the designated currency of payment or in the international banking community (in the case of a composite currency) immediately following the day on which such Holder receives such payment. If the amount in the designated currency of payment that may be so purchased is for any reason less than the amount originally due, the Company shall, as a separate and independent obligation, pay such additional amounts in the designated currency of payment as may be necessary to compensate for any such shortfall. This Note shall be deemed to be a contract made and to be performed solely in the State of New York and for all purposes be governed by, and construed in accordance with, the laws of said State without regard to the conflicts of law rules of said State. All terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in the Indenture. 12 SCHEDULE OF ISSUANCES, EXCHANGES AND AGGREGATE PRINCIPAL AMOUNT The following issuances and exchanges of a part of this Note have been made, and the aggregate principal amount of Bearer Notes represented by this Note at any time is as shown in the last entry of Column III hereof unless one or more entries have been made in Column IV hereof reflecting exchanges for individual Bearer Notes, in which event such aggregate principal amount is as shown in the last entry of Column V hereof.
I. II. III. IV. V. VI. Aggregate Principal Principal Aggregate Amount Amount Notation Settlement Principal Principal Exchange for Remaining Made on Date or Amount Amount Individual After behalf of the Exchanged Issued Issued Bearer Notes Exchange Trustee - ---------- --------- --------- ------------ --------- ------------- - ---------- --------- --------- ------------ --------- ------------- - ---------- --------- --------- ------------ --------- ------------- - ---------- --------- --------- ------------ --------- ------------- - ---------- --------- --------- ------------ --------- ------------- - ---------- --------- --------- ------------ --------- ------------- - ---------- --------- --------- ------------ --------- ------------- - ---------- --------- --------- ------------ --------- ------------- - ---------- --------- --------- ------------ --------- ------------- - ---------- --------- --------- ------------ --------- ------------- - ---------- --------- --------- ------------ --------- ------------- - ---------- --------- --------- ------------ --------- -------------
13 SCHEDULE OF INTEREST PAYMENTS The following payments of interest in respect of this Note have been made.
Notation Made Date of Interest on behalf of the Payment Interest Paid Trustee - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ----------------
14 BEARER PRINCIPAL AMOUNT NO. FL___ OR FACE AMOUNT $_______________ CUSIP:__________ CITIGROUP GLOBAL MARKETS HOLDINGS COMMON CODE INC. PERMANENT GLOBAL NOTE REPRESENTING MEDIUM-TERM SENIOR NOTE, SERIES D DUE NINE MONTHS OR MORE FROM DATE OF ISSUE (FLOATING OR INDEXED RATE) THIS SECURITY IS A PERMANENT GLOBAL NOTE, WITHOUT COUPONS, EXCHANGEABLE FOR INDIVIDUAL BEARER NOTES, WITH COUPONS, IF ANY, IN THE DENOMINATION OF U.S. $10,000 OR ANY LARGER AMOUNT THAT IS AN INTEGRAL MULTIPLE OF U.S. $1,000 (OR SUCH OTHER DENOMINATIONS AS ARE SPECIFIED BELOW FOR ANOTHER CURRENCY). THE RIGHTS ATTACHING TO THIS NOTE AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR INDIVIDUAL BEARER NOTES ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL BEARER NOTES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTION 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE. IF APPLICABLE, THE "TOTAL AMOUNT OF OID" AND "YIELD TO MATURITY" SET FORTH BELOW WILL BE COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE UNITED STATES FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES Issue Price: Original Issue Date: Initial Interest Rate: Stated Maturity: Specified Currency (If other than U.S. dollars): Authorized Denominations: (If other than as set forth in the Prospectus Supplement) Dual Currency Note: [ ] Yes (see attached) [ ] No Optional Payment Currency: Designated Exchange Rate: Base Rate: [ ] CD Rate [ ] Commercial Paper Rate [ ] Federal Funds Rate [ ] LIBOR Telerate [ ] LIBOR Reuters [ ] Treasury Rate [ ] Treasury Rate [ ] Prime Rate Constant Maturity [ ] Eleventh District [ ] EURIBOR Cost of Funds Rate [ ] Other (see attached) 2 Interest Reset Period Index Maturity: or Interest Reset Dates: Interest Payment Dates: Accrue to Pay: [ ] Yes [ ] No Indexed Principal Note: [ ] Yes (see attached) [ ] No Floating Rate: [ ] Indexed Interest Rate: [ ] (see attached) Spread Multiplier: Spread (+/-): Spread Reset: [ ] The Spread or Spread Multiplier may not be changed prior to Stated Maturity. [ ] The Spread or Spread Multiplier may be changed prior to Stated Maturity (see attached). Optional Reset Dates (if applicable): Maximum Interest Rate: Minimum Interest Rate: Inverse Floating Rate Note: [ ] Yes (see attached) [ ] No Initial Fixed Interest Rate: Reset Fixed Reference Rate Floating Rate / Fixed Rate Note: [ ] Yes (see attached) [ ] No Amortizing Note: [ ] Yes [ ] No Amortization Schedule: Optional Redemption: [ ] Yes [ ] No Optional Redemption Dates: Redemption Prices: Bond Yield to Maturity: Bond Yield to Call: Optional Repayment: [ ] Yes [ ] No Optional Repayment Dates: Optional Repayment Prices: Optional Extension of [ ] Yes [ ] No Stated Maturity: 3 Final Maturity: Discount Note: [ ] Yes [ ] No Total Amount of OID: Yield to Maturity: Renewable Note: [ ] Yes (see attached) [ ] No Initial Maturity Date: Special Election Interval (if applicable): Amount (if less than entire principal amount) as to which election may be exercised: If the Specified Currency of this Note is Pounds sterling, the following applies: This instrument constitutes [ ] commercial paper [ ] a shorter term debt security [ ] a longer term debt security issued in accordance with regulations made under section 4 of the Banking Act 1987. The issuer of this Note is Citigroup Global Markets Holdings Inc., which is not an authorized institution or a European authorized institution (as such terms are defined in the Banking Act 1987 (Exempt Transactions) Regulation 1997). Repayment of the principal and payment of any interest or premium in connection with this Note has not been guaranteed IF THE SPECIFIED CURRENCY OF THIS NOTE IS POUNDS STERLING, THE FOLLOWING APPLIES: THIS NOTE IS ISSUED IN ACCORDANCE WITH THE REGULATIONS MADE UNDER SECTION 4 OF THE BANKING ACT 1987. 4 CITIGROUP GLOBAL MARKETS HOLDINGS INC., a corporation duly organized and existing under the laws of the State of New York (herein referred to as the "Company"), for value received hereby promises to pay to bearer, upon presentation and surrender hereof, (a) the Principal Amount or, in the case of an Indexed Principal Note, the Face Amount adjusted by reference to prices, changes in prices, or differences between prices, of securities, currencies, intangibles, goods, articles or commodities or by such other objective price, economic or other measures (an "Index") as described on the face hereof or in the pricing supplement attached hereto or delivered herewith, in the Specified Currency on the Stated Maturity shown above or earlier if and to the extent so provided herein, and (b) accrued interest on the Principal Amount then outstanding (or, in the case of an Indexed Principal Note, the Face Amount then outstanding): (i) if this is a Floating Rate Note, at the Initial Interest Rate shown above from the Original Issue Date shown above until the first Interest Reset Date shown above following the Original Issue Date and thereafter at the Base Rate shown above, adjusted by the Spread or Spread Multiplier, if any, shown above, determined in accordance with the provisions hereof, (ii) if this is an Indexed Rate Note, at a rate determined by reference to an Index as described herein, (iii) if this is an Inverse Floating Rate Note, at the Initial Interest Rate shown above from the Original Issue Date shown above until the first Interest Reset Date shown above following the Original Issue Date and thereafter at the Inverse Floating Rate, as determined in accordance with the provisions hereof, or (iv) if this is a Floating Rate / Fixed Rate Note, at a rate determined as described herein, until, in each case, the Principal Amount or the Face Amount then outstanding is paid or duly provided for in accordance with the terms hereof. For purposes of this Note, "Business Day" means: (i) with respect to any Bearer Note, any day that is not a Saturday or Sunday and that is not a day on which banking institutions are authorized or required by law or regulation to be closed in (a) The City of New York, (b) London, England, (c) the place in which this Note or any Coupon is presented for payment or (d) if the Specified Currency (as defined below) is other than U.S. dollars, the financial center of the country issuing the Specified Currency (which in the case of the Euro shall be Brussels, Belgium); (ii) if the Base Rate specified above is LIBOR, any day on which dealings in deposits in the Specified Currency are transacted in the London interbank market (a "London Business Day"); (iii) with respect to any determination by the exchange rate agent (as defined below) of an exchange rate pursuant to notes having a specified currency other than U.S. dollars, any such day on which banking institutions and foreign exchange markets settle payments in New York City and London (an "Exchange Rate Business Day"); (iv) with respect to Bearer Notes having a specified currency other than U.S. dollars only, other than Bearer Notes denominated in Euros, any day that, in the principal financial center (as defined below) of the country of the Specified Currency, is not a day on which banking institutions generally are authorized or obligated by law to close; and (v) with respect to EURIBOR Notes and Notes denominated in Euros, a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer ("TARGET") System is open (a "Target Business Day"). As used above, a "principal financial center" means the capital city of the country issuing the specified currency. However, with respect to U.S. dollars, Australian dollars, Canadian dollars, and Swiss francs, the principal financial center shall be The City of New York, Sydney, Toronto, and Zurich, respectively. If this Note is an Amortizing Note as shown on the face hereof or in the pricing supplement attached hereto or delivered herewith, a portion or all the principal amount of the Note is payable prior to Stated Maturity in accordance with a schedule, by application of a formula, or by reference to an Index (as described above). 5 This Note is exchangeable in whole or from time to time in part without charge for individual Bearer Notes, with appropriate Coupons attached, if any, in the denomination of U.S.$10,000 or any larger amount that is an integral multiple of U.S.$1,000 (or such other denominations as are specified above for another currency), upon 30 days' notice to the Trustee given through either Euroclear Bank S.A./N.V. or Clearstream International. Upon any exchange of any portion of this Note for individual Bearer Notes, the portion of the principal amount hereof so exchanged shall be endorsed by the Trustee in the Schedule of Issuances, Exchanges and Aggregate principal amount hereto, and the principal amount hereof shall be reduced for all purposes by the amount so exchanged. Except as otherwise provided herein or in the Indenture, until exchanged in full for individual Bearer Notes, this Note shall in all respects be entitled to the same benefits and subject to the same terms and conditions of, and the Company shall be subject to the same restrictions as those contained on the individual Bearer Notes and in the Indenture. Except under certain circumstances that may apply if this Note has a specified currency other than U.S. dollars, payments of the principal hereof and any premium and interest hereon will be made only in the Specified Currency. Payments in respect of this Note and any Coupon will be made only against surrender of this Note or such Coupon, at the offices of the Paying Agents outside the United States listed on the reverse hereof. At the direction of the Holder of this Note or any Coupon, and subject to applicable laws and regulations, such payments will be made by check drawn on a bank in The City of New York (in the case of U.S. dollar payments) or outside the United States (in the case of payments in a currency other than U.S. dollars) mailed to an address outside the United States furnished by the Holder hereof or, at the option of the Holder hereof, by wire transfer (pursuant to written instructions supplied by the Holder hereof) to an account maintained by the payee with a bank located outside the United States. No payment in respect of this Note or any Coupon will be made upon presentation of this Note or such Coupon at any office or agency of the Trustee or any other paying agency maintained by the Company in the United States, nor will any such payment be made by transfer to an account, or by mail to an address, in the United States. Notwithstanding the foregoing, if U.S. dollar payments in respect of this Note or any Coupons at the offices of all Paying Agents outside the United States become illegal or are effectively precluded because of the imposition of exchange controls or similar restrictions on the full payment or receipt of such amounts in U.S. dollars, the Company will appoint an office or agency (which may be the Trustee) in the United States at which such payments may be made. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF AND IN ANY PRICING SUPPLEMENT ATTACHED HERETO OR DELIVERED HEREWITH, AND SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE. This Note shall not become valid or obligatory for any purpose unless and until this Note has been authenticated by Citibank, N.A., or its successor, as authentication agent. 6 IN WITNESS WHEREOF, the Company has caused this Note to be executed under its corporate seal. Dated: CITIGROUP GLOBAL MARKETS HOLDINGS INC. By__________________________________________ Authorized Officer [Seal] Attest______________________________________ Assistant Secretary CERTIFICATE OF AUTHENTICATION This is one of the Notes issued under the within-mentioned Indenture. Dated: CITIBANK, N.A., as authentication agent By__________________________________________ Authorized Signatory 7 (REVERSE OF SECURITY) CITIGROUP GLOBAL MARKETS HOLDINGS INC. PERMANENT GLOBAL NOTE REPRESENTING MEDIUM-TERM SENIOR NOTE, SERIES D DUE NINE MONTHS OR MORE FROM DATE OF ISSUE (FLOATING OR INDEXED RATE) General This Note is one of a series of duly authorized debt securities of the Company (the "Debt Securities") issued or to be issued in one or more series under an indenture, dated as of December 1, 1988, as amended (the "Indenture"), between the Company and Bank One Trust Company, N.A., as successor trustee (the "Trustee," which term includes any successor Trustee under the Indenture) to which indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Debt Securities and of the terms upon which the Debt Securities are, and are to be, authenticated and delivered. The U.S. dollar equivalent of the public offering price or purchase price of Notes denominated in currencies other than U.S. dollars will be determined by the Company or its agent, as exchange rate agent for the Notes (the "Exchange Rate Agent") on the basis of the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York (the "Market Exchange Rate") for such currencies on the applicable issue dates. The Notes are in bearer form with coupons. Unless otherwise specified in the applicable pricing supplement attached hereto or delivered herewith, the authorized denominations of Bearer Notes denominated in U.S. dollars will be U.S.$10,000 and any larger amount that is an integral multiple of U.S.$1,000. The authorized denominations of Bearer Notes denominated in a currency other than U.S. dollars will be the approximate equivalents thereof in the Specified Currency. Floating Rate Notes Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, if this Note is a Floating Rate Note, this Note will bear interest from its Original Issue Date to, but not including, the first Interest Reset Date (as defined below) at the Initial Interest Rate set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith. Thereafter, the interest rate hereon for each Interest Reset Period will be determined by reference to the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, plus or minus the Spread, if any, or multiplied by the Spread Multiplier, if any, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. The Base Rates that may be specified on the face hereof or in the pricing supplement attached hereto or delivered herewith are LIBOR, the Commercial Paper Rate, the Treasury Rate, the Federal Funds Rate, the CD Rate, the Prime Rate, the Eleventh District Cost of Funds Rate, EURIBOR or any other Base Rate specified on the face hereof. "H.15(519)" means the publication entitled "Statistical Release H.15(519), Selected Interest Rates" or any successor publication, published by the Board of Governors of the Federal Reserve System. "H.15 Daily Update" means the daily update of the Board of Governors of the Federal Reserve System at http://www.bog.frb.fed.us/releases/H15/update or any successor site or publication. "Calculation Date," where applicable, means the date on which the Calculation Agent is to calculate the interest rate for the Notes which shall be the earlier of (1) the tenth calendar day after the related Rate Determination Date, or if any such day is not a Business Day, the next succeeding business day or (2) the Business Day preceding the applicable Interest Payment Date or the Stated Maturity, as the case may be. As specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, this Note may also have either or both of the following (in each case expressed as a rate per annum on a simple interest basis): (i) a maximum limitation, or ceiling, on the rate at which interest may accrue during any interest period ("Maximum Interest Rate") and/or (ii) a minimum limitation, or floor, on the rate at which interest may accrue during any interest period ("Minimum Interest Rate"). In addition to any Maximum Interest Rate that may be specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the interest rate will in no event be higher than the maximum rate permitted by applicable law, as the same may be modified by United States law of general application. The Company will appoint, and enter into an agreement with, agents (each, a "Calculation Agent") to calculate interest rates on this Note. All determinations of interest rates by the Calculation Agent shall, in the absence of manifest error, be conclusive for all purposes and binding on the Holder hereof. Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, Citibank, N.A. shall be the Calculation Agent for this Note. At the request of the Holder hereof, the Calculation Agent will provide the interest rate then in effect and, if determined, the interest rate that will become effective on the next Interest Reset Date. The interest rate hereon will be reset daily, weekly, monthly, quarterly, semiannually or annually (such period being the "Interest Reset Period" specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, and the first day of each Interest Reset Period being an "Interest Reset Date"). Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Interest Reset Dates will be as follows: (i) if this Note resets daily, each Business Day; (ii) if this Note (unless this Note is a Treasury Rate Note) resets weekly, Wednesday of each week; (iii) if this Note is a Treasury Rate Note that resets weekly, Tuesday of each week (except as provided below under "Determination of Treasury Rate"); (iv) if this Note resets monthly, the third Wednesday of each month (with the exception of monthly reset Eleventh District Cost of Funds Rate Notes, which reset on the first calendar day of each month); (v) if this Note is an Eleventh District Cost of Funds Rate Note that resets monthly, the first calendar day of each month; (vi) if this Note resets quarterly, the third Wednesday of March, June, September and December of each year; (vii) if this Note resets semiannually, the third Wednesday of the two months of each year specified on the face hereof or in the pricing supplement attached hereto or delivered herewith; and (viii) if this Note resets annually, the third Wednesday of the month of each year specified on the face hereof or in the pricing supplement attached hereto or delivered 2 herewith. If an Interest Reset Date would otherwise be a day that is not a Business Day, such Interest Reset Date shall be postponed to the next succeeding Business Day, except that, if the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is LIBOR or EURIBOR and such Business Day is in the next succeeding calendar month, such Interest Reset Date shall instead be the immediately preceding Business Day. If an auction of direct obligations of United States Treasury Bills falls on a day that is an Interest Reset Date for Treasury Rate Notes, the Interest Reset Date shall be the succeeding Business Day. Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the interest payable hereon on each Interest Payment Date shall be the accrued interest from and including the Original Issue Date or the last date to which interest has been paid, as the case may be, to but excluding such Interest Payment Date. If more than one Interest Reset Date occurs during any period for which accrued interest is being calculated, accrued interest shall be calculated by multiplying the principal amount hereof (or if this Note is an Indexed Principal Note, the Face Amount specified on the face hereof or in the pricing supplement attached hereto or delivered herewith) by an accrued interest factor. Such accrued interest factor will be computed by adding the interest factors calculated for each day in the period for which accrued interest is being calculated. The interest factor (expressed as a decimal calculated to seven decimal places without rounding) for each such day will be computed, unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, by dividing the interest rate in effect on such day by 360, if the Base Rate specified on the face hereof is the Commercial Paper Rate, the Federal Funds Rate, the CD Rate, the Prime Rate, the Eleventh District Cost of Funds Rate, LIBOR, or EURIBOR, or by the actual number of days in the year, if the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is the Treasury Rate. In all other cases, accrued interest shall be calculated by multiplying the principal amount hereof (or if this Note is an Indexed Principal Note, the Face Amount specified on the face hereof) by the interest rate in effect during the period for which accrued interest is being calculated, and multiplying that product by the quotient obtained by dividing the number of days in the period for which accrued interest is being calculated by 360, if the Base Rate specified on the face hereof is the Commercial Paper Rate, the Federal Funds Rate, the CD Rate, the Prime Rate, the Eleventh District Cost of Funds Rate, LIBOR, or EURIBOR, or by the actual number of days in the year, if the Base Rate specified on the face hereof is the Treasury Rate. For purposes of making the foregoing calculations, the interest rate in effect on any Interest Reset Date will be the applicable rate as reset on such date. Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, all percentages resulting from any calculation of the rate of interest hereof will be rounded, if necessary, to the nearest 1/100,000 of 1% (.0000001), with five one-millionths of a percentage point rounded upward, and all currency amounts used in or resulting from such calculation will be rounded to the nearest one-hundredth of a unit (with .005 of a unit being rounded upward). Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, interest will be payable as follows: (i) if this Note resets daily, weekly or monthly (other than Eleventh District Cost of Funds Rate Notes), interest will be payable on the third Wednesday of each month or on the third Wednesday of March, June, September and December of each year, as specified on the face hereof or in the pricing supplement attached hereto or delivered herewith or; (ii) in the case of Eleventh District Cost of Funds Rate Notes, interest will 3 be payable on the first calendar day of each March, June, September and December; (iii) if this Note resets quarterly, interest will be payable on the third Wednesday of March, June, September, and December of each year; (iv) if this Note resets semiannually, interest will be payable on the third Wednesday of each of two months of each year specified on the face hereof or in the pricing supplement attached hereto or delivered herewith; and (v) if this Note resets annually, interest will be payable on the third Wednesday of the month of each year specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, and in each case at Maturity (each such day being an "Interest Payment Date"). If an Interest Payment Date would otherwise fall on a day that is not a Business Day, such Interest Payment Date shall be postponed to the next succeeding Business Day, except that, if the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is LIBOR or EURIBOR and such Business Day is in the next succeeding calendar month, such Interest Payment Date shall instead be the immediately preceding Business Day; provided, however, if with respect to any Note for which "Accrue to Pay" is not specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, if an Interest Payment Date with respect to such Note would otherwise be a day that is not a Business Day, such Interest Payment Date shall not be postponed; provided, further, that any payment required to be made in respect of a Note that does not Accrue to Pay on a date (including the day of Stated Maturity) that is not a Business Day for such Note need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on such date, and no additional interest shall accrue as a result of such delayed payment. Subject to applicable provisions of law and except as specified herein, on each Interest Reset Date the rate of interest shall be the rate determined in accordance with the provisions of the applicable heading below. Determination of CD Rate If the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is the CD Rate, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to the CD Rate and the Spread or Spread Multiplier, if any, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. The "CD Rate" for each Interest Reset Period shall be the rate as of the second Business Day prior to the Interest Reset Date for such Interest Reset Period (a "CD Rate Determination Date") for negotiable U.S. dollar certificates of deposit having the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as published in H.15(519) under the heading "CDs (Secondary Market)". In the event that such rate is not published prior to 3:00 p.m., New York City time, on the Calculation Date (as defined above) pertaining to such CD Rate Determination Date, then the "CD Rate" for such Interest Reset Period will be the rate on such CD Rate Determination Date for negotiable U.S. dollar certificates of deposit of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as published in the H.15 Daily Update, or other recognized electronic source used for the purpose of displaying the applicable rate, under the heading "CDs (Secondary Market)." If by 3:00 p.m., New York City time, on such Calculation Date such rate is not yet published in either H.15(519) or H.15 Daily Update, then the "CD Rate" for such Interest Reset Period will be calculated by the Calculation Agent and will be the arithmetic mean of the secondary market offered rates as of 10:00 a.m., New York City time, on such CD Rate Determination Date of three leading nonbank dealers in negotiable U.S. dollar certificates of deposit in The City of New York selected by the Calculation Agent for negotiable U.S. dollar certificates of deposit of major United States money center banks of the highest credit standing (in the market for negotiable U.S. dollar certificates of deposit) with a 4 remaining maturity closest to the Index Maturity on the face hereof or in the pricing supplement attached hereto or delivered herewith in a denomination of $5,000,000; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting offered rates as mentioned in this sentence, the CD Rate for such Interest Reset Period will be the same as the CD Rate for the immediately preceding Interest Reset Period (or, if there was no such Interest Reset Period, the Initial Interest Rate). Determination of Commercial Paper Rate If the Base Rate shown on the face hereof or in the pricing supplement attached hereto or delivered herewith is the Commercial Paper Rate, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to the Commercial Paper Rate and the Spread or Spread Multiplier, if any, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. The "Commercial Paper Rate" for each Interest Reset Period will be determined by the Calculation Agent as of the second Business Day prior to the Interest Reset Date for such Interest Reset Period (a "Commercial Paper Rate Determination Date") and shall be the Money Market Yield (as defined below) on such Commercial Paper Rate Determination Date of the rate for commercial paper having the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, as such rate shall be published in H.15(519) under the heading "Commercial Paper-Nonfinancial." In the event that such rate is not published prior to 3:00 p.m., New York City time, on the Calculation Date (as defined above) pertaining to such Commercial Paper Rate Determination Date, then the Commercial Paper Rate for such Interest Reset Period shall be the Money Market Yield on such Commercial Paper Rate Determination Date of the rate for commercial paper of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as published in the H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying the applicable rate, under the heading "Commercial Paper-Nonfinancial." If by 3:00 p.m., New York City time, on such Calculation Date such rate is not yet published in either H.15(519) or the H.15 Daily Update, then the "Commercial Paper Rate" for such Interest Reset Period shall be the Money Market Yield of the arithmetic mean of the offered rates as of 11:00 a.m., New York City time, on such Commercial Paper Rate Determination Date of three leading dealers of U.S. dollar commercial paper in The City of New York selected by the Calculation Agent for commercial paper of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith placed for an industrial issuer whose bonds are rated "AA" or the equivalent by a nationally recognized rating agency; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting offered rates as mentioned in this sentence, the "Commercial Paper Rate" for such Interest Reset Period will be the same as the Commercial Paper Rate for the immediately preceding Interest Reset Period (or, if there was no such Interest Reset Period, the Initial Interest Rate). "Money Market Yield" shall be the yield calculated in accordance with the following formula: D X 360 Money Marker Yield = --------------- X 100 360 - (D X M) where "D" refers to the applicable per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal and "M" refers to the actual number of days in the applicable Interest Reset Period specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. 5 Determination of Federal Funds Rate If the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is the Federal Funds Rate, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to the Federal Funds Rate and Spread or Spread Multiplier, if any, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. The "Federal Funds Rate" for each Interest Reset Period shall be the effective rate on the second Business Day prior to the Interest Reset Date for such Interest Reset Period (a "Federal Funds Rate Determination Date") for Federal Funds as published in H.15(519) under the heading "Federal Funds (Effective)" and displayed on Moneyline Telerate (or any successor service) on Page 120 (or any other page as may replace the specified Page on that service). In the event that such rate does not appear on Moneyline Telerate on Page 120 or is not published prior to 3:00 p.m., New York City time, on the Calculation Date (as defined above) pertaining to such Federal Funds Rate Determination Date, the "Federal Funds Rate" for such Interest Reset Period shall be the rate on such Federal Funds Rate Determination Date as published in the H.15 Daily Update under the heading "Federal Funds/Effective Rate," or other recognized electronic source used for the purpose of displaying the applicable rate. If by 3:00 p.m., New York City time, on such Calculation Date, such rate is not yet published, then the "Federal Funds Rate" for such Interest Reset Period shall be the arithmetic mean of the rates for the last transaction in overnight U.S. dollar federal funds arranged by three leading brokers of U.S. dollar Federal Funds transactions in New York City, selected by the Calculation Agent prior to 9:00 a.m., New York City time, on that Federal Funds Rate Determination Date; provided, however, that if brokers so selected by the Calculation Agent are not quoting as mentioned above, the "Federal Funds Rate" for the Interest Reset Period will be the "Federal Funds Rate" in effect for the particular Federal Funds Rate Determination Date. If there was no Federal Funds Rate in effect for the Interest Reset Period, the "Federal Funds Rate" will be the initial interest rate. Determination of LIBOR If the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is LIBOR, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to LIBOR and the Spread or Spread Multiplier, if any, specified on the face hereof. "LIBOR" for each Interest Reset Period will be determined by the Calculation Agent as follows. On the second London Business Day prior to the Interest Reset Date for such Interest Reset Period (a "LIBOR Determination Date"), the Calculation Agent for such LIBOR Note will determine the offered rates for deposits in the Specified Currency for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, which appear on the Designated LIBOR Page at approximately 11:00 a.m., London time, on such LIBOR Determination Date. "Designated LIBOR Page" means either (a) if "LIBOR Moneyline Telerate" is designated on the face hereof or in the pricing supplement attached hereto or delivered herewith, or if neither "LIBOR Reuters" nor "LIBOR Moneyline Telerate" is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as the method for calculating LIBOR, the display designated as page "3750" on the Telerate Service ("Telerate") (or such other page as may replace page "3750" on such service or such other service as may be replaced by a successor service for the purpose of displaying the London interbank offered rates of major banks), and LIBOR for such Interest Reset Period will be the relevant offered rate as determined by the Calculation Agent or (b) if "LIBOR Reuters" is 6 designated on the face hereof or in the pricing supplement attached hereto or delivered herewith, "Designated LIBOR Page" means the display designated as page "LIBO" on the Reuters Monitor Money Rates Service and LIBOR will be the arithmetic means of the offered rates, calculated by the Calculation Agent, or the offered rate, if the designated LIBOR page by its terms provides only for a single rate (or such other page as may replace the LIBO page on such service or such other service as may be replaced by a successor service for the purpose of displaying London interbank offered rates of major banks). If neither LIBOR Reuters nor LIBOR Telerate is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, LIBOR will be determined as if LIBOR Moneyline Telerate had been specified. If LIBOR cannot be determined as described above (either because the Designated LIBOR Page is no longer available or because fewer than two offered rates appear on the Designated LIBOR Page on the LIBOR Determination Date), the Calculation Agent will determine "LIBOR" as follows. The Calculation Agent will request the principal London offices of each of the four major banks in the London interbank market selected by the Calculation Agent to provide the Calculation Agent with its offered quotations for deposits in the Specified Currency for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, to prime banks in the London interbank market at approximately 11:00 a.m., London time, on the LIBOR Determination Date, in a principal amount equal to an amount of at least $1,000,000 or its approximate equivalent thereof in the Specified Currency, that is representative of a single transaction in such market at such time. If two or more such quotations are provided, "LIBOR" for such Interest Reset Period will be the arithmetic mean of such quotations. If fewer than two such quotations are provided, "LIBOR" for such Interest Reset Period will be the arithmetic mean of rates quoted by three major banks in The City of New York selected by the Calculation Agent at approximately 11:00 a.m., New York city time, on the LIBOR Determination Date for loans in the Specified Currency to leading European banks for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, in a principal amount equal to an amount of at least $1,000,000 or the approximate equivalent thereof in the Specified Currency that is representative of a single transaction in such market at such time; provided, however, that if fewer than three banks selected as aforesaid by the Calculation Agent are quoting rates as mentioned in this sentence. "LIBOR" for such Interest Reset Period will be the same as LIBOR for the immediately preceding Interest Reset Period (or, if there was no such Interest Reset Period, the LIBOR Rate will be the Initial Interest Rate). Determination of Treasury Rate If the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is the Treasury Rate or Treasury Rate Constant Maturity, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to the Treasury Rate and the Spread or Spread Multiplier, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Unless "Treasury Rate Constant Maturity" is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the "Treasury Rate" for each Interest Reset Period will be the rate for the auction held on the Treasury Rate Determination Date (as defined below) for such Interest Reset Period of direct obligations of the United States ("Treasury Securities") that have the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, as such rate appears on either Moneyline Telerate (or any successor service) on page 56 (or any other page as may replace that page on that service) or on page 57 (or any other page as may replace that page on that service) under 7 the heading "INVESTMENT RATE." The following procedures will be followed if the Treasury Rate cannot be determined as described above. If not so published by 3:00 p.m., New York City time, on the Calculation Date, the Treasury Rate will be the Bond Equivalent Yield (defined below) of the rate for the applicable Treasury Securities as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the heading "U.S. Government Securities/Treasury Bills/Auction High." In the event that such rate is not so published by 3:00 p.m., New York City time, on the related Calculation Date, the Treasury Rate will be the Bond Equivalent Yield of the auction rate of the applicable Treasury Securities as announced by the United States Department of the Treasury. In the event that the results of the auction of Treasury Securities is not so announced by the United States Department of the Treasury, or if the auction is not held, then the Treasury Rate will be the Bond Equivalent Yield of the rate on the Treasury Rate Determination Date of the applicable Treasury Securities published in H.15(519) under the heading of "U.S. Government Securities/Treasury Bills/Secondary Market." If such rate is not so published by 3:00 p.m., New York City time, on the related Calculated Date, then the Treasury Rate will be the rate on the Treasury Rate Determination Date of the applicable Treasury Securities as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the heading "U.S. Government Securities/Treasury Bills/Secondary Market." In the event that such rate is not so published by 3:00 p.m., New York City time, on the related Calculation Date, then the Treasury Rate will be the rate on the Treasury Rate Determination Date calculated by the Calculation Agent as the Bond Equivalent Yield of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 p.m., New York City time, on the Treasury Rate Determination Date, of three primary United States government securities dealers selected by the Calculation Agent for the issue of Treasury Securities with a remaining maturity closest to the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting bid rates as mentioned in this sentence, then the "Treasury Rate" for such Interest Reset Period will be the same as the Treasury Rate for the immediately preceding Interest Reset Period (or, if there was no Interest Reset Period, the Initial Interest Rate). The "Treasury Rate Determination Date" for each Interest Reset Period will be the day of the week in which the Interest Reset Date for such Interest Reset Period falls on which Treasury Securities would normally be auctioned. Treasury Securities are normally sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is normally held on the following Tuesday, except that such auction may be held on the preceding Friday. If, as the result of a legal holiday, an auction is so held on the preceding Friday, such Friday will be the Treasury Rate Determination Date pertaining to the Interest Reset Period commencing in the next succeeding week. If an auction date shall fall on any day that would otherwise be an Interest Reset Date for a Note whose Base Rate is the Treasury Rate, then such Interest Reset Date shall instead be the Business Day immediately following such auction date. Bond Equivalent: Yield will be calculated as follows: D X N Money Marker Yield = ---------------- X 100 360 - (D X M) where "D" refers to the applicable per annum rate for Treasury Securities quoted on a bank discount basis and expressed as a decimal, "N" refers to 365 or 366, as the case may be, and "M" refers to the actual number of days in the applicable interest reset period. 8 If "Treasury Rate Constant Maturity" is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the "Treasury Rate" for each Interest Reset Period will be the rate displayed on the Designated CMT Telerate Rate Page under the caption "Treasury Constant Maturities" under the column for the Designated CMT Maturity Index in the following manner. If the Designated CMT Moneyline Telerate Page is 7051, the Treasury Rate will be the rate on the Constant Maturity Treasury Rate Determination Date. In the event that such rate does not appear on Moneyline Telerate Page 7051, then the Treasury Rate will be the treasury constant maturity rate for the designated CMT maturity index as published in the relevant H.15(519) under the caption "Treasury Constant Maturities." In the event that such rate does not so appear in H.15(519), then the Treasury Rate will be the constant treasury maturity rate on the Constant maturity Treasury Rate Determination Date for the designated CMT maturity index as may then be published by either the Federal Reserve System Board of Governors or the United States Department of the Treasury that the calculation agent determines to be comparable to the rate which would have otherwise been published in H.15(519). If the Designated CMT Moneyline Telerate Page is 7052, the "Treasury Rate" will be the weekly or monthly average, as specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, for the week or the month, as applicable, ended immediately preceding the week or month, as applicable, in which the related Constant Maturity Treasury Rate Determination Date occurs. In the event that such rate does not appear on Moneyline Telerate Page 7052, then the Treasury Rate will be the one-week or one-month, as specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, average of the treasury constant maturity rate for the designated CMT maturity index for the week or month as applicable, preceding the Constant Maturity Treasury Determination Date as published in the relevant H.15(519) under the caption "Treasury Constant Maturities." In the event that such rate does not so appear in H.15(519), then the Treasury Rate will be the one-week or one-month, as specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, average of the constant treasury maturity rate for the designated CMT maturity index as otherwise announced by the Federal Reserve Bank of New York for the week or month, as applicable, ended immediately preceding the week or month, as applicable, in which the Constant Maturity Treasury Rate Determination Date falls. The following procedures will be followed if the Treasury Rate cannot be determined as indicated above. If such information, as applicable, is not so published, then the Calculation Agent will calculate the Treasury Rate on the Constant Maturity Treasury Rate Determination Date as follows which shall be a yield to maturity, based on the arithmetic mean of the secondary market bid prices as of approximately 3:30 p.m., New York City time, on the Constant Maturity Treasury Rate Determination Date of three leading U.S. government securities dealers in The City of New York selected by the Calculation Agent, one of which may be the Agent, from five such dealers selected by the Calculation Agent and eliminating the highest quotation, or in the event of equality, one of the highest, and the lowest quotation, or, in the event of equality, one of the lowest, for United States Treasury Securities ("Treasury Notes"), with an original maturity of approximately the Designated CMT Maturity Index and a remaining term to maturity of not less than such Designated CMT Maturity Index minus one year and in a principal amount that is representative for a single transaction in the securities in that market at that time. If the Calculation Agent is unable to obtain three such Treasury Note quotations, the Treasury Rate on the Constant Maturity Treasury Rate Determination Date will be calculated by the Calculation Agent, and shall be a yield to maturity based on the arithmetic mean of the secondary market offer side prices as of approximately 3:30 p.m., New York City time, on the Constant Maturity Treasury Rate Determination Date of three leading U.S. government securities dealers in 9 the City of New York, one of which may be the Agent, from five such dealers selected by the Calculation Agent and eliminating the highest quotation, or, in the event of equality, one of the highest, and the lowest quotation, or, in the event of equality, one of the lowest, for Treasury Notes with an original maturity of the number of years that is the next highest to the Designated CMT Maturity Index and a remaining maturity closest to the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, and in an amount that is representative for a single transaction in that market at that time. If three or four, and not five, of such dealers are quoting as described above, then the Treasury Rate will be based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of such quotes will be eliminated. However, if fewer than three dealers so selected by the Calculation Agent are quoting as mentioned above, the Treasury Rate determined as of the Constant Maturity Treasury Rate Determination Date will be the Treasury Rate in effect on the Constant Maturity Treasury Rate Determination Date. If two Treasury Notes with an original maturity as described in the third preceding sentence have remaining terms to maturity equally close to the Designated CMT Maturity Index, the Calculation Agent will obtain quotations for the Treasury Note with the shorter remaining term to maturity and will use such quotations to calculate the Treasury Rate as set forth above. "Designated CMT Moneyline Telerate Page" means the display on the Telerate, or any successor service on the page specified in the applicable pricing supplement, or any other page as may replace such page on that service, or any successor service, for the purpose of displaying Treasury Constant Maturities as reported in H.15(519). If no such page is specified in the applicable pricing supplement, the Designated CMT Telerate Page shall be 7052, for the most recent week. "Designated CMT Maturity Index" means the original period to maturity of the U.S. Treasury Securities, either one, two, three, five, seven, ten, twenty or thirty years, specified in the applicable pricing supplement with respect to which the Treasury Rate will be calculated. If no such maturity is specified in the applicable pricing supplement, the Designated CMT Maturity Index shall be two years. "The Constant Maturity Treasury Rate Determination Date" shall be the second Business Day prior to the Interest Reset Date for the applicable Interest Reset Period. Determination of Prime Rate Prime Rate Notes will bear interest at the interest rates (calculated with reference to the Prime Rate and the Spread and/or Spread Multiplier, if any) specified in the Prime Rate Notes and in the applicable pricing supplement. The "Prime Rate" for each Interest Reset Period will be determined by the Calculation Agent for such Prime Rate Note as of the second Business Day prior to the Interest Reset Date for such Interest Reset Period (a "Prime Rate Determination Date") and shall be the rate made available and subsequently published on such date in H.15(519) under the heading "Bank Prime Loan." In the event that such rate is not published prior to 3:00 p.m., New York City time, on the Calculation Date (as defined above) pertaining to such Prime Rate Determination Date, then the Prime Rate for such Interest Reset Period shall be the rate published in the H.15 Daily Update under the heading "Bank Prime Loan." In the event that such rate has not been published prior to 3:00 p.m., New York City time, on the Calculation Date, then the Prime Rate will be calculated by the 10 Calculation Agent and will be the arithmetic mean of the rates of interest publicly announced by each bank that appears on the Reuters Screen USPRIME1 Page (as defined below) as such bank's prime rate or base lending rate on the Prime Rate Determination Date. If fewer than four such rates appear on the Reuters Screen USPRIME1 Page for the Prime Rate Determination Date, the rate shall be the arithmetic mean of the prime rates quoted on the basis of the actual number of days in the year divided by 360 as of the close of business on the Prime Rate Determination Date by three major banks in The City of New York selected by the Calculation Agent. However, if the banks so selected by the Calculation Agent are not quoting as mentioned in the previous sentence, the Prime Rate will be the Prime Rate in effect on the Prime Rate Determination Date. "Reuters Screen USPRIME1 Page" means the display designated as page "USPRIME1" on the Reuters Monitor Money Rates Service, (or such other page as may replace the USPRIME1 page on that service for the purpose of displaying prime rates or base lending rates of major United States banks). Determination of Eleventh District Cost of Funds Rate Eleventh District Cost of Funds Rate Notes will bear interest at the interest rates (calculated by reference to the Eleventh District Cost of Funds Rate and the Spread and/or Spread Multiplier, if any) specified in the Eleventh District Cost of Funds Rate Notes and in the applicable pricing supplement. The "Eleventh District Cost of Funds Rate," for each Interest Reset Period will be determined by the Calculation Agent for such Eleventh District Cost of Funds Rate Note as of the last working day of the month immediately prior to such Interest Reset Date for such Interest Reset Period on which the Federal Home Loan Bank of San Francisco (the "FHLB of San Francisco") publishes the Eleventh District Cost of Funds Index (as defined below) (the "Eleventh District Cost of Funds Rate Determination Date"), and shall be the rate equal to the monthly weighted average cost of funds for the calendar month preceding such Eleventh District Cost of Funds Rate Determination Date as set forth under the caption "Eleventh District" on Moneyline Telerate (or any successor service) on page 7058 (which page shall include any successor page (as determined by the Calculation Agent)) as of 11:00 a.m., San Francisco time, on such Eleventh District Cost of Funds Rate Determination Date. If such rate does not appear on Telerate page 7058 on any related Eleventh District Cost of Funds Rate Determination Date, the Eleventh District Cost of Funds Rate for such Eleventh District Cost of Funds Rate Determination Date shall be the monthly weighted average cost of funds paid by member institutions of the Eleventh Federal Home Loan Bank District that was most recently announced (the "Eleventh District Cost of Funds Rate Index") by the FHLB of San Francisco as such cost of funds for the calendar month preceding the date of such announcement. If the FHLB of San Francisco fails to announce such rate on or prior to the Eleventh District Cost of Funds Rate Determination Date for the calendar month immediately preceding such date, then the Eleventh District Cost of Funds Rate for such date will be the Eleventh District Cost of Funds Rate in effect on the Eleventh District Cost of Funds Rate Determination Date. Determination of EURIBOR If the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is EURIBOR, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to EURIBOR and the Spread or Spread Multiplier, if 11 any, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. "EURIBOR" for each Interest Reset Period will be determined by the Calculation Agent as follows. On the second TARGET Business Day prior to the Interest Reset Date for such Interest Reset Period (a "EURIBOR Determination Date"), the Calculation Agent for such EURIBOR Note will determine the offered rates for deposits in Euros for the period of the index maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, which appears on the Designated EURIBOR Page as of 11:00 a.m., Brussels time, on such EURIBOR Determination Date. "Designated EURIBOR Page" means the display designated as page "248" on Telerate (or any successor service or such other page as may replace page "248" on such service), and EURIBOR for such Interest Reset Period will be the relevant offered rates as determined by the Calculation Agent. If EURIBOR cannot be determined as described above the Calculation Agent will determine "EURIBOR" as follows. The Calculation Agent will request the principal Euro-zone (as defined below) office of each of four major banks in the Euro-zone interbank market selected by the Calculation Agent to provide the Calculation Agent with their respective offered quotations for deposits in Euros for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, to prime banks in the Euro-zone interbank market at approximately 11:00 a.m., Brussels time, on the EURIBOR Determination Date, in a principal amount equal to an amount of at least $1,000,000 or its approximate equivalent thereof in Euros that is representative of a single transaction in such market at such time. If two or more such quotations are provided, "EURIBOR" for such Interest Reset Period will be the arithmetic mean of such quotations. If less than two such quotations are provided, "EURIBOR" for such Interest Reset Period will be the arithmetic mean of rates quoted by four major banks in the Euro-zone selected by the Calculation Agent for such EURIBOR Note at approximately 11:00 a.m., Brussels time, on the EURIBOR Determination Date for loans in Euros to leading European banks for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, in a principal amount equal to an amount of at least $1,000,000 or the approximate equivalent thereof in Euros that is representative of a single transaction in such market at such time; provided, however, that if the banks so selected a aforesaid by the Calculation Agent are not quoting rates as mentioned in this sentence, "EURIBOR" for such Interest Reset Period will be same as EURIBOR for the immediately preceding Interest Reset Period (or, if there was no such Interest Reset Period, the EURIBOR Rate will be the Initial Interest Rate). "Euro-zone" means the region comprised of member states of the European Union that adopt the single currency in accordance with the Treaty establishing the European Community, as amended by the Treaty on European Union. Inverse Floating Rate Notes If this Note is designated as an Inverse Floating Rate Note on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Inverse Floating Rate shall be equal to (i) in the case of the period, if any, commencing on the Original Issue Date (or such other date which may be specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as the date on which this Note shall begin to accrue interest), up to the first Interest Reset Date, the Initial Fixed Interest Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, and (ii) in the case of each period commencing on an Interest Reset 12 Date, the Reset Fixed Reference Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith minus the interest rate determined by reference to the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, as adjusted by the Spread and/or Spread Multiplier, if any, as determined in accordance with the provisions hereof; provided, however, that (x) the interest rate thereon will not be less than zero and (y) the interest rate in effect for the ten days immediately prior to the date of Stated Maturity will be the rate in effect on the tenth day preceding such date. Floating Rate / Fixed Rate Notes If this Note is designated as a Floating Rate / Fixed Rate Note, this Note will be a Floating Rate note for a specified portion of its term and a Fixed Rate Note for the remainder of its term, in which event the interest rate on this Note will be determined as provided herein as if it were a Floating Rate Note and a Fixed Rate Note hereunder for each such respective period, all as described herein and in the applicable pricing supplement. Subsequent Interest Periods If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Spread, Spread Multiplier or method of calculation of the Interest Rate on this Note may be reset by the Company on the date or dates specified on the face hereof or in the pricing supplement attached hereto or delivered herewith (each an "Optional Reset Date"). The Company may reset the Spread, Spread Multiplier or method of calculation of the Interest Rate Interest Rate by notifying the Trustee for this Note at least 45 but not more than 60 days prior to each Optional Reset Date. Not later than 40 days prior to each Optional Reset Date, the Trustee shall provide a notice of such election (the "Reset Notice"), in accordance with "Notices" below, indicating whether the Company has elected to reset the Spread, Spread Multiplier or method of calculation of the Interest Rate, and if so, (i) such new Spread, Spread Multiplier or method of calculation of the Interest Rate and (ii) the provisions, if any, for redemption during the period from such Optional Reset Date to the next Optional Reset Date, or, if there is no such next Optional Reset Date, to the Stated Maturity of this Note (each such period, a "Subsequent Interest Period"), including the date or dates on which or the period or periods during which and the price or prices at which such redemption may occur during the Subsequent Interest Period. Upon the transmittal by the Trustee of a Reset Notice to the Holder of a Note, such new Spread, Spread Multiplier or method of calculation of the Interest Rate shall take effect automatically. Except as modified by the Reset Notice and as described below, such Note will have the same terms as prior to the transmittal of such Reset Notice. Notwithstanding the foregoing, not later than 20 days prior to the Optional Reset Date, the Company may, at its option, revoke the Spread or Spread Multiplier provided for in the Reset Notice and establish a higher Spread or Spread Multiplier for the Subsequent Interest Period by causing the Trustee to provide notice of such higher Spread or Spread Multiplier, to the Holder of this Note. Such notice shall be irrevocable. All Bearer Notes with respect to which the Spread or Spread Multiplier is reset on an Optional Reset Date will bear such higher Spread or Spread Multiplier, whether or not tendered for repayment. The Holder of this Note will have the option to elect repayment of the Note by the Company on each Optional Reset Date at a price equal to the principal amount hereof, plus interest accrued to such Optional Reset Date. In order to obtain repayment on an Optional Reset Date, the Holder must follow the procedures set forth below for optional repayment, except that the period for delivery or notification to the Paying Agent shall be at least 25 but not more than 35 days prior to 13 such Optional Reset Date, and except that if the Holder has tendered this Note for repayment pursuant to a Reset Notice, the Holder may, by written notice to the Paying Agent, revoke such tender for repayment until the close of business on the tenth day before the Optional Reset Date. Indexed Notes If this Note is an Indexed Principal Note, then certain or all interest payments, in the case of an Indexed Rate Note, and/or the principal amount payable at Stated Maturity or earlier redemption or retirement, in the case of an Indexed Principal Note, is determined by reference to the amount designated on the face hereof or in the pricing supplement attached hereto or delivered herewith as the Face Amount of this Note and by reference to the Index as described on the face hereof or in the pricing supplement attached hereto or delivered herewith. If this Note is an Indexed Principal Note, the amount of any interest payment will be determined by reference to the Face Amount described on the face hereof or in the pricing supplement attached hereto or delivered herewith. If this Note is an Indexed Principal Note, the principal amount payable at Stated Maturity or any earlier redemption or repayment of this Note may be different from the Face Amount. If a third party is appointed to calculate or announce the Index for a particular Indexed Note and the third party either suspends the calculation or announcement of such Index or changes the basis upon which such Index is calculated in a manner that is inconsistent with the applicable pricing supplement, then the Company will select another third party to calculate or announce the Index. The agent or another affiliate of the Company may be either the original or successor third party selected by the Company. If for any reason such Index cannot be calculated on the same basis and subject to the same conditions and controls as applied to the original third party, then the indexed interest payments, if any, or any indexed principal amount of this Note shall be calculated in the manner set forth in the applicable pricing supplement. Any determination of such third party shall in the absence of manifest error be binding on all parties. Payments in Currencies other than the Specified Currency Except as set forth below, if any payment in respect hereof is required to be made in a specified currency other than U.S. dollars and such currency is unavailable due to the imposition of exchange controls or other circumstances beyond the Company's control or is no longer used by the government of the country issuing such currency or for the settlement of transactions by public institutions of or within the international banking community, then such payment shall be made in U.S. dollars until such currency is again available or so used. The amount so payable in such foreign currency shall be converted into U.S. dollars on the basis of the most recently available Market Exchange Rate for such currency or as otherwise indicated on the face hereof or in the pricing supplement attached hereto or delivered herewith. Any payment made under such circumstances in U.S. dollars will not constitute an Event of Default under the Indenture. In the event of an official redenomination of the Specified Currency of this Note (other than as a result of European Monetary Union, but including, without limitation, an official redenomination of any such Specified Currency that is a composite currency), the obligations of the Company with respect to payments on this Note shall, in all cases, be deemed immediately following such redenomination to provide for the payment of that amount of redenominated currency representing the amount of such obligations immediately before such redenomination. This Note does not provide for any adjustment to any amount payable under this Note as a result of (i) any change in the value of the Specified Currency hereof relative to any other currency due solely to 14 fluctuations in exchange rates or (ii) any redenomination of any component currency of any composite currency (unless such composite currency is itself officially redenominated). Dual Currency Notes If this Note is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as a Dual Currency Note, the Company may have a one time option of making all payments of principal, premium, if any, and interest on all Dual Currency Notes issued on the same day and having the same terms (a "Tranche"), which payments would otherwise be made in the Specified Currency of such Notes, in an optional currency (the "Optional Payment Currency"). Such option will be exercisable in whole but not in part on an "Option Election Date," which will be any one of the dates specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. If the Company makes such an election, the amount payable in the Optional Payment Currency shall be determined using the Designated Exchange Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. If such election is made, notice of such election shall be provided in accordance with "Notices" below within two Business Days of the Option Election Date and shall state (i) the first date, whether an Interest Payment Date and/or Stated Maturity, in which scheduled payments in the Optional Payment Currency will be made and (ii) the Designated Exchange Rate. Any such notice by the Company, once given, may not be withdrawn. The equivalent value in the Specified Currency of payments made after such an election may be less, at the then current exchange rate, than if the Company had made such payment in the Specified Currency. Renewable Notes If this Note is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as a Renewable Note, this Note will mature on an Interest Payment Date occurring in or prior to the twelfth month following the Original Issue Date of this Note (the "Initial Maturity Date") unless the term of all or any portion of this Note is renewed in accordance with the following procedures: On the Interest Payment Date occurring in the sixth month (unless a different interval (the "Special Election Interval") is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith) prior to the Initial Maturity Date of this Note (the "Initial Renewal Date") and on the Interest Payment Date occurring in each sixth month (or in the last month of each Special Election Interval) after such Initial Renewal Date (each, together with the Initial Renewal Date, a "Renewal Date"), the term of this Note may be extended to the Interest Payment Date occurring in the twelfth month (or, if a Special Election Interval is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the last month in a period equal to twice the Special Election Interval) after such Renewal Date, if the Holder of this Note elects to extend the term of this Note or any portion thereof as described below. If the Holder does not elect to extend the term of any portion of the principal amount of this Note during the specified period prior to any Renewal Date, such portion will become due and payable on the Interest Payment Date occurring in the sixth month (or the last month in the Special Election Interval) after such Renewal Date (the "New Maturity Date"). 15 The Holder may elect to renew the term of this Note, or if so specified, any portion thereof, by delivering a notice to such effect to any duly appointed paying agent not less than 15 nor more than 30 days prior to such Renewal Date, unless another period is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Such election will be irrevocable and will be binding upon each subsequent Holder of this Note. An election to renew the term of this Note may be exercised with respect to less than the entire principal amount of this Note only if so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith and then only in such principal amount, or any integral multiple in excess thereof, as is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Notwithstanding the foregoing, the term of this Note may not be extended beyond the Stated Maturity specified for this Note on the face hereof or in the pricing supplement attached hereto or delivered herewith. If the Holder does not elect to renew the term, this Note must be presented to any duly appointed paying agent and, as soon as practicable following receipt of such Note such paying agent shall issue in exchange therefor in the name of such Holder (i) a Note, in a principal amount equal to the principal amount of such exchanged Note for which no election to renew the term thereof was exercised, with terms identical to those specified on such exchanged Note (except that such Note shall have a fixed, nonrenewable Stated Maturity on the New Maturity Date) and (ii) if an election to renew is made with respect to less than the full principal amount of such Holder's Note, such paying agent shall issue in exchange for such Note in the name of such Holder a replacement Renewable Note, in a principal amount equal to the principal amount of such exchanged Note for which the election to renew was made, with terms otherwise identical to the exchanged Note. Extension of Stated Maturity If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Stated Maturity of this Note may be extended at the option of the Company for one or more periods of whole years specified on the face hereof or in the pricing supplement attached hereto or delivered herewith (each an "Extension Period") from one to five years up to but not beyond the date (the "Final Maturity") set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith. The Company may exercise such option by notifying the Trustee for this Note at least 45 days but not more than 60 days prior to the original Stated Maturity of this Note. If the Company exercises such option, the Trustee will provide to the Holder of this Note not later than 40 days prior to the original Stated Maturity notice (the "Extension Notice") in accordance with "Notices" below. The Extension Notice will set forth (i) the election of the Company to extend the Stated Maturity of this Note, (ii) the new Stated Maturity, (iii) the Spread, Spread Multiplier or method of calculation applicable to the Extension Period, and (iv) the provisions, if any, for redemption during the Extension Period, including the date or dates on which or the period or periods during which and the price or prices at which such redemption may occur during the Extension Period. Upon the provision by such Trustee of an Extension Notice to the Holder hereof, the Stated Maturity of this Note shall be extended automatically, and, except as modified by the Extension Notice and as described in the next paragraph, this Note will have the same terms as prior to the provision of such Notice. Notwithstanding the foregoing, not later than 20 days prior to the original Stated Maturity of this Note, the Company may, at its option, revoke the Spread or Spread Multiplier provided for in the Extension Notice and establish a higher Spread or Spread Multiplier for the Extension Period by causing the Trustee to provide notice of such higher interest rate or higher Spread or Spread Multiplier, as the case may be, to the Holder hereof in accordance with "Notices" below. Such notice shall be irrevocable. All Notes with respect to which 16 the Stated Maturity is extended will bear such higher Spread or Spread Multiplier for the Extension Period, whether or not tendered for repayment. If the Company extends the Stated Maturity of this Note, the Holder will have the option to elect repayment of this Note by the Company on the original Stated Maturity at a price equal to the principal amount hereof, plus interest accrued to such date. In order to obtain repayment on such original Stated Maturity once the Company has extended the Stated Maturity hereof, the Holder must follow the procedures set forth below for optional repayment, except that the period for delivery or notification to the Paying Agent shall be at least 25 but not more than 35 days before the original Stated Maturity, and except that if the Holder has tendered this Note for repayment pursuant to an Extension Notice, the Holder may, by written notice to the Paying Agent, revoke such tender for repayment until the close of business on the tenth calendar day before the original Stated Maturity. Optional Redemption, Repayment and Repurchase If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Company may, at its option, redeem this Note in whole or in part, on the date or dates (each an "Optional Redemption Date") specified herein, at the price (the "Redemption Price") (together with accrued interest to such Optional Redemption Date) specified herein. If the Company elects to exercise such option with respect to this Note, at least 30 days prior to the date of redemption, the Trustee shall provide notice of such redemption to the Holder hereof in accordance with "Notices" below. In the event of redemption of this Note in part only, a new Note or Notes for the unredeemed portion hereof shall be issued to the Holder hereof upon the cancellation hereof. Notes redeemed prior to Stated Maturity must be presented for payment together with all unmatured Coupons, if any, appertaining thereto, failing which the amount of any missing unmatured Coupon will be deducted from the sum due for payment. If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, this Note will be repayable prior to Stated Maturity at the option of the Holder on the Optional Repayment Dates shown on the face hereof or in the pricing supplement attached hereto or delivered herewith, at the Optional Repayment Prices shown on the face hereof or in the pricing supplement attached hereto or delivered herewith Price specified herein at which, together with accrued interest to the date of repayment. Notes that are to be repaid prior to Stated Maturity must be presented for payment together with all unmatured Coupons, if any, appertaining thereto, failing which the amount of any missing unmatured Coupon will be deducted from the sum due for payment. In order for this Note to be repaid, the Principal Paying Agent not more than 45 days prior to an Optional Repayment Date Any tender of this Note for repayment (except pursuant to a Reset Notice or an Extension Notice) shall be irrevocable. The repayment option may be exercised by the Holder of this Note for less than the entire principal amount of the Note; provided that the principal amount of this Note remaining outstanding after repayment is an authorized denomination. Upon such partial repayment, this Note shall be canceled and a new Note or Notes for the remaining principal amount hereof shall be issued in the name of the Holder of this Note. Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, this Note will not be subject to any sinking fund. 17 Notwithstanding anything herein to the contrary, if this Note is a Discount Note, the amount payable in the event of redemption or repayment prior to the Stated Maturity hereof (other than pursuant to an optional redemption by the Company at a stated Redemption Price), in lieu of the principal amount due at the Stated Maturity hereof, shall be the Amortized Face Amount of this Note as of the redemption date or the date of repayment, as the case may be. The Amortized Face Amount of this Note on any date shall be the amount equal to (i) the Issue Price set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith plus (ii) that portion of the difference between such Issue Price and the stated principal amount of such Note that has accrued by such date at (x) the Bond Yield to Maturity set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith or (y) if so specified, the Bond Yield to Call set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith (computed in each case in accordance with generally accepted United States bond yield computation principles); provided, however, that in no event shall the Amortized Face Amount of a Note exceed its stated principal amount. The Bond Yield to Call listed on the face of this Note or in the pricing supplement attached hereto or delivered herewith shall be computed on the basis of the first occurring Optional Redemption Date with respect to such Note and the amount payable on such Optional Redemption Date. In the event that such Note is not redeemed on such first occurring Optional Redemption Date, the Bond Yield to Call with respect to such Note shall be recomputed on such Optional Redemption Date on the basis of the next occurring Optional Redemption Date and the amount payable on such Optional Redemption Date, and shall continue to be so recomputed on each succeeding Optional Redemption Date until the Note is so redeemed. Tax Redemption The Bearer Notes of a series may be redeemed at the option of the Company in whole, but not in part, at any time on giving at least 30 but not more than 60 days' notice in accordance with "Notices" below (which notice shall be irrevocable), at the respective Redemption Prices thereof, if the Company has or will become obligated to pay additional interest on such Notes as described in the following paragraph as a result of any change in, or amendment to, the laws (or any regulations or rulings promulgated thereunder) of the United States or any political subdivision or taxing authority thereof or therein, or any change in the application or official interpretation of such laws, regulations or rulings, which change or amendment becomes effective on or after their respective Original Issue Dates, and such obligation cannot be avoided by the Company taking reasonable measures available to it; provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Company would be obligated to pay such additional interest were a payment in respect of such Notes then due. Prior to the publication of any notice of redemption pursuant to this paragraph, the Company shall deliver to the Trustee for the Notes to be redeemed a certificate stating that the Company is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Company so to redeem have occurred, and an opinion of independent counsel to the effect that the Company has or will become obligated to pay such additional interest as a result of such change or amendment. Payment of Additional Interest The Company will, subject to the exceptions and limitations set forth below, pay as additional interest to the Holder of this Note or any Coupon that is a United States Alien (as defined below) such amounts as may be necessary so that every net payment on this Note or such Coupon, after deduction or withholding for or on account of any present or future tax, assessment or other governmental charge imposed upon or as a result of such payment by the United States (or any 18 political subdivision or taxing authority thereof or therein), will not be less than the amount provided in this Note or such Coupon to be then due and payable. However, the Company will not be required to make any such payment of additional interest to such Holder for or an account of: (a) any tax, assessment or other governmental charge that would not have been imposed but for (i) the existence of any present or former connection between such Holder (or between a fiduciary, settlor or beneficiary of, or a Person holding a power over, such Holder, if such Holder is an estate or a trust, or a member or shareholder of such Holder, if such Holder is a partnership or a corporation) and the United States, including, without limitation, such Holder (or such fiduciary, settlor, beneficiary, Person holding a power, member or shareholder) being or having been a citizen or resident thereof or being or having been engaged in trade or business or present therein or having or having had a permanent establishment therein or (ii) such Holder's past or present status as a passive foreign investment company, a personal holding company, foreign personal holding company, a controlled foreign corporation for United States tax purposes or private foundation or other tax-exempt organization with respect to the United States or as a corporation that accumulates earnings to avoid United States federal income tax; (b) any estate, inheritance, gift, sales, transfer or personal property tax or any similar tax, assessment or other governmental charge; (c) any tax, assessment or other governmental charge that would not have been imposed but for the presentation by the Holder of this Note or such Coupon for payment more than 15 days after the date on which such payment became due and payable or on which payment thereof was duly provided for, whichever occurred later; (d) any tax, assessment or other governmental charge that is payable otherwise than by deduction or withholding from a payment on this Note or such Coupon; (e) any tax, assessment or other governmental charge required to be deducted or withheld by any Paying Agent from a payment on this Note or such Coupon, if such payment can be made without such deduction or withholding by any other Paying Agent; (f) any tax, assessment or other governmental charge imposed on a Holder that actually or constructively owns ten percent or more of the combined voting power of all classes of stock of the Company or is a controlled foreign corporation related to the Company through stock ownership; nor shall such additional interest be paid with respect to a payment on this Note or such Coupon to a Holder that is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner would not have been entitled to the additional interest had such beneficiary, settlor, member or beneficial owner been the Holder of this Note or such Coupon. The term "United States Alien" means any person who, for United States federal income tax purposes, is a foreign corporation, a nonresident alien individual, a nonresident alien fiduciary of a foreign estate or trust, or a foreign partnership one or more of the members of which is, for United States federal income tax purposes, a foreign corporation, a nonresident alien individual or a nonresident alien fiduciary of a foreign estate or trust. 19 Paying Agents The Company has initially appointed as its Paying Agents for Bearer Notes of this Series the offices listed below: Principal Paying Agent: Citibank, N.A. 5 Carmelite Street London, England EC4Y OPA Paying Agent: Kredietbank S.A. Luxembourgeoise 43 Boulevard Royal Luxembourg Luxembourg City 2955 The Company reserves the right at any time to vary or terminate the appointment of any Paying Agent and to appoint additional or other Paying Agents and to approve any change in the office through which any Paying Agent acts, provided that there will at all times be a Paying Agent (which may be the Trustee) in at least one city in Europe, which, so long as Bearer Notes are listed on the Luxembourg Stock Exchange and the rules of that exchange shall so require, shall include Luxembourg. Notice of any such termination or appointment and of any changes in the specified offices of the Trustee or any Paying Agent will be given to the Holder hereof as described below. Notices All notices to Holders of this Note will be deemed to have been duly given if published on two separate Business Days in a leading London daily newspaper (which is expected to be the Financial Times) and, with respect to any series of Bearer Notes that may be listed on the Luxembourg Stock Exchange, if such exchange so requires, in Luxembourg in a newspaper of general circulation in Luxembourg (which is expected to be the Luxemburger Wort). Such notices shall be deemed to have been given on the date of the first such publication. The Company may at any time purchase Registered Notes at any price in the open market or otherwise. Registered Notes so purchased by the Company may, at the discretion of the Company, be held or resold or surrendered to the Trustee for such Notes for cancellation. Other Terms As provided in the Indenture and subject to certain limitations therein set forth, this Note is exchangeable for a like aggregate principal amount of Registered Notes of different authorized denominations, as requested by the Person surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. 20 If an Event of Default with respect to the Debt Securities of this series shall have occurred and be continuing, the principal of all the Debt Securities of this series may be declared due and payable in this manner and with the effect provided in the Indenture. In case this Note or any Coupon shall at any time become mutilated, destroyed, stolen or lost, it may be replaced at the specified office of the Principal Paying Agent in London; or, with respect to any series of Bearer Notes that are listed on the Luxembourg Stock Exchange, at the specified office of the Paying Agent in Luxembourg, upon payment by the claimant of such expenses as may be incurred in connection therewith and, in the case of destruction, theft or loss, on such terms as to evidence and indemnity as the Company or the Trustee may reasonably require. Mutilated or defaced Bearer Notes or Coupons must be surrendered before replacements will be issued. All monies paid by the Company to a Trustee or Paying Agent for the payment of principal of or any premium or interest on any Bearer Note or for the payment of any Coupon which remain unclaimed at the end of two years after such payments shall have become due and payable will be repaid to the Company, at its written request, and the Holder of such Note or Coupon will thereafter look only to the Company for payment, such payment to be made only outside the United States. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Debt Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of Debt Securities at the time outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Debt Securities of any series at the time outstanding, on behalf of the Holders of all the Debt Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Debt Security shall be conclusive and binding upon such Holder and upon all future Holders of this Debt Security and of any Debt Security issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon the Debt Security. Holders of Debt Securities may not enforce their rights pursuant to the Indenture or the Note except as provided in the Indenture. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest on this Note at the times, place and rate, and the coin or currency, herein prescribed. The Company may, without the consent of the Holders of the Notes, consolidate with, merge into, or transfer substantially all of its assets to, a corporation that is a U.S. Person, provided that the successor corporation assumes all obligations of the Company under the Notes and certain other conditions are met, including a waiver by the successor corporation of any right to redeem the Notes under circumstances in which the successor corporation would be entitled to redeem the Notes but the Company would not have been entitled to do so. Except as provided above, the obligation to pay the principal hereof (and premium, if any) and interest hereon in the designated currency of payment is of the essence. To the fullest 21 extent possible under applicable law, judgments in respect of this Note shall be given in such currency. The obligation of the Company to make such payments in the designated currency of payment shall, notwithstanding any payment in any other currency (whether pursuant to a judgment or otherwise), be discharged only to the extent of the amount in the designated currency of payment that the Holder of this Note may, in accordance with normal banking procedures, purchase with the sum paid in such other currency (after any premium and cost of exchange) on the business day in the country of issue of the designated currency of payment or in the international banking community (in the case of a composite currency) immediately following the day on which such Holder receives such payment. If the amount in the designated currency of payment that may be so purchased is for any reason less than the amount originally due, the Company shall, as a separate and independent obligation, pay such additional amounts in the designated currency of payment as may be necessary to compensate for any such shortfall. This Note shall be deemed to be a contract made and to be performed solely in the State of New York and for all purposes be governed by, and construed in accordance with, the laws of said State without regard to the conflicts of law rules of said State. All terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in the Indenture. 22 SCHEDULE OF ISSUANCES, EXCHANGES AND AGGREGATE PRINCIPAL AMOUNT The following issuances and exchanges of a part of this Note have been made, and the aggregate principal amount of Bearer Notes represented by this Note at any time is as shown in the last entry of Column III hereof unless one or more entries have been made in Column IV hereof reflecting exchanges for individual Bearer Notes, in which event such aggregate principal amount is as shown in the last entry of Column V hereof.
I. II. III. IV. V. VI. Aggregate Principal Principal Aggregate Amount Amount Notation Settlement Principal Principal Exchanged Remaining Made on Date or Amount Amount for Individual After behalf of the Exchanged Issued Issued Bearer Notes Exchange Trustee - ---------- --------- --------- -------------- --------- ------------- - ---------- --------- --------- -------------- --------- ------------- - ---------- --------- --------- -------------- --------- ------------- - ---------- --------- --------- -------------- --------- ------------- - ---------- --------- --------- -------------- --------- ------------- - ---------- --------- --------- -------------- --------- ------------- - ---------- --------- --------- -------------- --------- ------------- - ---------- --------- --------- -------------- --------- ------------- - ---------- --------- --------- -------------- --------- ------------- - ---------- --------- --------- -------------- --------- ------------- - ---------- --------- --------- -------------- --------- ------------- - ---------- --------- --------- -------------- --------- -------------
23 SCHEDULE OF INTEREST PAYMENTS The following payments of interest in respect of this Note have been made.
Notation Made Date of Interest on behalf of the Payment Interest Paid Trustee - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ----------------
24 BEARER PRINCIPAL AMOUNT No. FX ___ OR FACE AMOUNT $________________ CUSIP:___________ CITIGROUP GLOBAL MARKETS HOLDINGS INC. COMMON CODE PERMANENT GLOBAL NOTE REPRESENTING MEDIUM-TERM SUBORDINATED NOTE, SERIES E DUE NINE MONTHS OR MORE FROM DATE OF ISSUE (FIXED RATE) THIS SECURITY IS A PERMANENT GLOBAL NOTE, WITHOUT COUPONS, EXCHANGEABLE FOR INDIVIDUAL BEARER NOTES, WITH COUPONS, IF ANY, IN THE DENOMINATION OF U.S. $10,000 OR ANY LARGER AMOUNT THAT IS AN INTEGRAL MULTIPLE OF U.S. $1,000 (OR SUCH OTHER DENOMINATIONS AS ARE SPECIFIED BELOW FOR ANOTHER CURRENCY). THE RIGHTS ATTACHING TO THIS NOTE AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR INDIVIDUAL BEARER NOTES ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL BEARER NOTES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTION 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE. IF APPLICABLE, THE "TOTAL AMOUNT OF OID" AND "YIELD TO MATURITY" SET FORTH BELOW WILL BE COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE UNITED STATES FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES. Issue Price: Original Issue Date: Interest Rate: Stated Maturity: Specified Currency (If other than U.S. dollars): Authorized Denominations: (If other than as set forth in the Prospectus Supplement) Dual Currency Note: [ ] Yes (see attached) [ ] No Optional Payment Currency: Designated Exchange Rate: Interest Payment Dates: Accrue to Pay: [ ] Yes [ ] No Indexed Principal Note: [ ] Yes (see attached) [ ] No Interest Rate Reset: [ ] The Interest Rate may not be changed prior to Stated Maturity. [ ] The Interest Rate may be changed prior to Stated Maturity (see attached). Optional Reset Dates (if applicable): Amortizing Note: [ ] Yes [ ] No Amortization Schedule: Optional Redemption: [ ] Yes [ ] No Optional Redemption Dates: Redemption Prices: Bond Yield to Maturity: Bond Yield to Call: Optional Repayment: [ ] Yes [ ] No Optional Repayment Dates: Optional Repayment Prices: Optional Extension of Stated Maturity: [ ] Yes [ ] No Final Maturity: Discount Note: [ ] Yes [ ] No Total Amount of OID: Yield to Maturity: Renewable Note: [ ] Yes (see attached) [ ] No Initial Maturity Date: 2 Special Election Interval (if applicable): Amount (if less than entire principal amount) as to which election may be exercised: If the Specified Currency of this Note is Pounds sterling, the following applies: This instrument constitutes [ ] commercial paper [ ] a shorter term debt security [ ] a longer term debt security issued in accordance with regulations made under section 4 of the Banking Act 1987. The issuer of this Note is Citigroup Global Markets Holdings Inc., which is not an authorized institution or a European authorized institution (as such terms are defined in the Banking Act 1987 (Exempt Transactions) Regulation 1997). Repayment of the principal and payment of any interest or premium in connection with this Note has not been guaranteed. IF THE SPECIFIED CURRENCY OF THIS NOTE IS POUNDS STERLING, THE FOLLOWING APPLIES: THIS NOTE IS ISSUED IN ACCORDANCE WITH THE REGULATIONS MADE UNDER SECTION 4 OF THE BANKING ACT 1987. 3 CITIGROUP GLOBAL MARKETS HOLDINGS INC., a corporation duly organized and existing under the laws of the State of New York (herein referred to as the "Company"), for value received hereby promises to pay to bearer, upon presentation and surrender hereof (a) the Principal Amount or, in the case of an Indexed Principal Note, the Face Amount adjusted by reference to prices, changes in prices, or differences between prices, of securities, currencies, intangibles, goods, articles or commodities or by such other objective price, economic or other measures (an "Index") as described on the face hereof or in the pricing supplement attached hereto or delivered herewith, in the Specified Currency on the Stated Maturity shown above or earlier if and to the extent so provided herein and (b) accrued interest on the Principal Amount then outstanding (or in the case of an Indexed Principal Note, the Face Amount, then outstanding) at the Interest Rate shown above from the Original Issue Date shown above or from the most recent date to which interest has been paid or duly provided for, annually in arrears (unless otherwise set forth herein or in the pricing supplement attached hereto or delivered herewith) on the Interest Payment Dates specified on the face of this Note or in the pricing supplement attached hereto or delivered herewith and at Stated Maturity, until, in either case, the Principal Amount then outstanding or the Face Amount is paid or duly provided for in accordance with the terms hereof. Unless otherwise specified herein or in the pricing supplement attached hereto or delivered herewith, interest on this Note, if any, will be computed on the basis of a 360-day year of twelve 30-day months or, in the case of an incomplete month, the number of days elapsed. For purposes of this Note, "Business Day" means: (i) with respect to any Bearer Note, any day that is not a Saturday or Sunday and that, in The City of New York, is not a day on which banking institutions generally are authorized or obligated by law or executive order to close; (ii) with respect to Bearer Notes having a specified currency other than U.S. dollars only, other than Bearer Notes denominated in Euros, any day that, in the principal financial center (as defined below) of the country of the specified currency, is not a day on which banking institutions generally are authorized or obligated by law to close; (iii) with respect to Notes denominated in Euros, a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer ("TARGET") System is open (a "TARGET Business Day"); and (iv) with respect to any determination by the exchange rate agent (as defined below) of an exchange rate pursuant to notes having a specified currency other than U.S. dollars, any such day on which banking institutions and foreign exchange markets settle payments in New York City and London (an "Exchange Rate Business Day"). As used above, a "principal financial center" means the capital city of the country issuing the specified currency. However, with respect to U.S. dollars, Australian dollars, Canadian dollars, and Swiss francs, the principal financial center shall be The City of New York, Sydney, Toronto, and Zurich, respectively. The indebtedness evidenced by this Note is, to the extent set forth in the Indenture, expressly subordinated and subject in right of payment to the prior payment in full of Senior Indebtedness as defined in the Indenture, and this Note is issued subject to such provisions, and each Holder of this Note, by accepting the same, agrees to and shall be bound by such provisions and authorizes and directs the Trustee in his behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination as provided in the Indenture and appoints the Trustee as his attorney-in-fact for any and all such purposes. If this Note is an Amortizing Note as shown on the face hereof or in the pricing supplement attached hereto or delivered herewith, a portion or all the principal amount of the Note is 4 payable prior to Stated Maturity in accordance with a schedule, by application of a formula, or by reference to an Index (as described above). This Note is exchangeable in whole or from time to time in part without charge for individual Bearer Notes, with appropriate Coupons attached, if any, in the denomination of U.S.$10,000 or any larger amount that is an integral multiple of U.S.$1,000 (or such other denominations as are specified above for another currency), upon 30 days' notice to the Trustee given through either Euroclear Bank S.A./N.V. or Clearstream International. Upon any exchange of any portion of this Note for individual Bearer Notes, the portion of the principal amount hereof so exchanged shall be endorsed by the Trustee in the Schedule of Issuances, Exchanges and Aggregate principal amount hereto, and the principal amount hereof shall be reduced for all purposes by the amount so exchanged. Except as otherwise provided herein or in the Indenture, until exchanged in full for individual Bearer Notes, this Note shall in all respects be entitled to the same benefits and subject to the same terms and conditions of, and the Company shall be subject to the same restrictions as those contained on the individual Bearer Notes and in the Indenture. Except under certain circumstances for Notes having Specified Currencies other than U.S. dollars, payments of the principal hereof and any premium and interest hereon will be made only in the Specified Currency. Payments in respect of this Note and any Coupon will be made only against surrender of this Note or such Coupon, at the offices of the Paying Agents outside the United States listed on the reverse hereof. At the direction of the Holder of this Note or any Coupon, and subject to applicable laws and regulations, such payments will be made by check drawn on a bank in The City of New York (in the case of U.S. dollar payments) or outside the United States (in the case of payments in a currency other than U.S. dollars) mailed to an address outside the United States furnished by the Holder hereof or, at the option of the Holder hereof, by wire transfer (pursuant to written instructions supplied by the Holder hereof) to an account maintained by the payee with a bank located outside the United States. No payment in respect of this Note or any Coupon will be made upon presentation of this Note or such Coupon at any office or agency of the Trustee or any other paying agency maintained by the Company in the United States, nor will any such payment be made by transfer to an account, or by mail to an address, in the United States. Notwithstanding the foregoing, if U.S. dollar payments in respect of this Note or any Coupons at the offices of all Paying Agents outside the United States become illegal or are effectively precluded because of the imposition of exchange controls or similar restrictions on the full payment or receipt of such amounts in U.S. dollars, the Company will appoint an office or agency (which may be the Trustee) in the United States at which such payments may be made. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF AND IN ANY PRICING SUPPLEMENT ATTACHED HERETO OR DELIVERED HEREWITH, AND SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE. This Note shall not become valid or obligatory for any purpose unless and until this Note has been authenticated by Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), or its successor, as Trustee. 5 IN WITNESS WHEREOF, the Company has caused this Note to be executed under its corporate seal. Dated: CITIGROUP GLOBAL MARKETS HOLDINGS INC. By_________________________________ Authorized Officer [Seal] Attest_______________________________ Assistant Secretary CERTIFICATE OF AUTHENTICATION This is one of the Bearer Notes issued under the within-mentioned Indenture. Dated: DEUTSCHE BANK TRUST COMPANY AMERICAS (formerly BANKERS TRUST COMPANY), as Trustee By______________________________ Authorized Signatory 6 (REVERSE OF SECURITY) CITIGROUP GLOBAL MARKETS HOLDINGS INC. PERMANENT GLOBAL NOTE REPRESENTING MEDIUM-TERM SUBORDINATED NOTE, SERIES E DUE NINE MONTHS OR MORE FROM DATE OF ISSUE (FIXED RATE) General This Note is one of a series of duly authorized debt securities of the Company (the "Debt Securities") issued or to be issued in one or more series under an indenture, dated as of December 1, 1988, as amended (the "Indenture"), between the Company and Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), as successor trustee (the "Trustee," which term includes any successor Trustee under the Indenture), to which indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Debt Securities and of the terms upon which the Debt Securities are, and are to be, authenticated and delivered. The U.S. dollar equivalent of the public offering price or purchase price of Notes denominated in currencies other than U.S. dollars will be determined by the Company or its agent, as exchange rate agent for the Notes (the "Exchange Rate Agent") on the basis of the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York (the "Market Exchange Rate") for such currencies on the applicable issue dates. The Notes are in bearer form with coupons. Unless otherwise specified on the face hereof or in the in the applicable pricing supplement attached hereto or delivered herewith, the authorized denominations of Bearer Notes denominated in U.S. dollars will be U.S.$10,000 and any larger amount that is an integral multiple of U.S.$1,000. The authorized denominations of Bearer Notes denominated in a currency other than U.S. dollars will be the approximate equivalents thereof in the Specified Currency. Fixed Rate Notes This Note will bear interest from its Original Issue Date, or from the last Interest Payment Date to which interest has been paid or duly provided for, at the Interest Rate stated on the face hereof or in the pricing supplement attached hereto or delivered herewith until the principal amount hereof is paid or made available for payment, except as otherwise described below under "Subsequent Interest Periods" and "Extension of Stated Maturity", and except that if so specified in the attached pricing supplement, the rate of interest payable may be subject to adjustment as specified therein. Unless otherwise set forth herein or in the pricing supplement attached hereto or delivered herewith, interest on this Note will be payable semiannually in arrears on the Interest Payment Dates set forth above and at Stated Maturity. If an Interest Payment Date with respect to any Note would otherwise be a day that is not a Business Day, such Interest Payment Date shall not be postponed; provided, however, that any payment required to be made in respect of such Note on a date (including the day of Stated Maturity) that is not a Business Day for such Note need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on such date, and no additional interest shall accrue as a result of such delayed payment. However, if with respect to any Note for which "Accrue to Pay" is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, any Interest Payment Date with respect to such Fixed Rate Note would otherwise be a day that is not a Business Day, such Interest Payment Date shall be postponed to the next succeeding Business Day. Each payment of interest in respect of an Interest Payment Date shall include interest accrued through the day before such Interest Payment Date. Unless otherwise specified herein, interest on this Note will be computed on the basis of a 360-day year of twelve 30-day months ("30 over 360") or, in the case of an incomplete month, the number of days elapsed. Subsequent Interest Periods If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Interest Rate on this Note may be reset by the Company on the date or dates specified on the face hereof or in the pricing supplement attached hereto or delivered herewith (each an "Optional Reset Date"). The Company may reset the Interest Rate by notifying the Trustee for this Note at least 45 but not more than 60 days prior to each Optional Reset Date. Not later than 40 days prior to each Optional Reset Date, the Trustee shall provide notice (the "Reset Notice"), in accordance with "Notices" below, indicating whether the Company has elected to reset the Interest Rate, and if so, (i) such new Interest Rate and (ii) the provisions, if any, for redemption during the period from such Optional Reset Date to the next Optional Reset Date, or, if there is no such next Optional Reset Date, to the Stated Maturity of this Note (each such period, a "Subsequent Interest Period"), including the date or dates on which or the period or periods during which and the price or prices at which such redemption may occur during the Subsequent Interest Period. Upon the transmittal by the Trustee of a Reset Notice to the Holder of a Note, such new Interest Rate shall take effect automatically. Except as modified by the Reset Notice and as described below, such Note will have the same terms as prior to the transmittal of such Reset Notice. Notwithstanding the foregoing, not later than 20 days prior to the Optional Reset Date, the Company may, at its option, revoke the Interest Rate provided for in the Reset Notice and establish a higher Interest Rate for the Subsequent Interest Period by causing the Trustee to provide notice of such higher Interest Rate to the Holder of this Note. Such notice shall be irrevocable. All Bearer Notes with respect to which the Interest Rate is reset on an Optional Reset Date will bear such higher Interest Rate. The Holder of this Note will have the option to elect repayment of the Note by the Company on each Optional Reset Date at a price equal to the principal amount hereof, plus interest accrued to such Optional Reset Date. In order to obtain repayment on an Optional Reset Date, the Holder must follow the procedures set forth below for optional repayment, except that the period for delivery or notification to the Paying Agent shall be at least 25 but not more than 35 days prior to such Optional Reset Date, and except that if the Holder has tendered this Note for repayment pursuant to a Reset Notice, the Holder may, by written notice to the Paying Agent, revoke such tender for repayment until the close of business on the tenth day before the Optional Reset Date. Indexed Notes If this Note is an Indexed Principal Note, then the principal amount payable at Stated Maturity or earlier redemption or retirement is determined by reference to the amount designated on the face hereof or in the pricing supplement attached hereto or delivered herewith as the Face Amount of this Note and by reference to the Index as described on the face hereof or in the pricing 2 supplement attached hereto or delivered herewith. If this Note is an Indexed Principal Note, the principal amount payable at Stated Maturity or any earlier redemption or repayment of this Note may be different from the Face Amount. If a third party is appointed to calculate or announce the Index for a particular Indexed Note and the third party either suspends the calculation or announcement of such Index or changes the basis upon which such Index is calculated in a manner that is inconsistent with the applicable pricing supplement, then the Company will select another third party to calculate or announce the Index. The agent or another affiliate of the Company may be either the original or successor third party selected by the Company. If for any reason such Index cannot be calculated on the same basis and subject to the same conditions and controls as applied to the original third party, then the indexed principal amount of this Note shall be calculated in the manner set forth in the applicable pricing supplement. Any determination of such third party shall in the absence of manifest error be binding on all parties. Payments in Currencies other than the Specified Currency Except as set forth below, if any payment in respect hereof is required to be made in a Specified Currency other than U.S. dollars and such currency is unavailable due to the imposition of exchange controls or other circumstances beyond the Company's control or is no longer used by the government of the country issuing such currency or for the settlement of transactions by public institutions of or within the international banking community, then such payment shall be made in U.S. dollars until such currency is again available or so used. The amount so payable in such foreign currency shall be converted into U.S. dollars on the basis of the most recently available Market Exchange Rate for such currency or as otherwise indicated on the face hereof or in the pricing supplement attached hereto or delivered herewith. Any payment made under such circumstances in U.S. dollars will not constitute a Default under the Indenture. In the event of an official redenomination of the Specified Currency of this Note (other than as a result of European Monetary Union, but including, without limitation, an official redenomination of any such Specified Currency that is a composite currency), the obligations of the Company with respect to payments on this Note shall, in all cases, be deemed immediately following such redenomination to provide for the payment of that amount of redenominated currency representing the amount of such obligations immediately before such redenomination. This Note does not provide for any adjustment to any amount payable under this Note as a result of (i) any change in the value of the Specified Currency hereof relative to any other currency due solely to fluctuations in exchange rates or (ii) any redenomination of any component currency of any composite currency (unless such composite currency is itself officially redenominated). Dual Currency Notes If this Note is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as a Dual Currency Note, the Company may have a one time option of making all payments of principal, premium, if any, and interest on all Dual Currency Notes issued on the same day and having the same terms (a "Tranche"), which payments would otherwise be made in the Specified Currency of such Notes, in an optional currency (the "Optional Payment Currency"). Such option will be exercisable in whole but not in part on an "Option Election Date," which will be any one of the dates specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. 3 If the Company makes such an election, the amount payable in the Optional Payment Currency shall be determined using the Designated Exchange Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. If such election is made, notice of such election shall be provided, in accordance with "Notices" below, within two Business Days of the Option Election Date and shall state (i) the first date, whether an Interest Payment Date and/or Stated Maturity, in which scheduled payments in the Optional Payment Currency will be made and (ii) the Designated Exchange Rate. Any such notice by the Company, once given, may not be withdrawn. The equivalent value in the Specified Currency of payments made after such an election may be less, at the then current exchange rate, than if the Company had made such payment in the Specified Currency. Renewable Notes If this Note is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as a Renewable Note, this Note will mature on an Interest Payment Date occurring in or prior to the twelfth month following the Original Issue Date of this Note (the "Initial Maturity Date") unless the term of all or any portion of this Note is renewed in accordance with the following procedures: On the Interest Payment Date occurring in the sixth month (unless a different interval (the "Special Election Interval") is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith) prior to the Initial Maturity Date of this Note (the "Initial Renewal Date") and on the Interest Payment Date occurring in each sixth month (or in the last month of each Special Election Interval) after such Initial Renewal Date (each, together with the Initial Renewal Date, a "Renewal Date"), the term of this Note may be extended to the Interest Payment Date occurring in the twelfth month (or, if a Special Election Interval is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the last month in a period equal to twice the Special Election Interval) after such Renewal Date, if the Holder of this Note elects to extend the term of this Note or any portion thereof as described below. If the Holder does not elect to extend the term of any portion of the principal amount of this Note during the specified period prior to any Renewal Date, such portion will become due and payable on the Interest Payment Date occurring in the sixth month (or the last month in the Special Election Interval) after such Renewal Date (the "New Maturity Date"). The Holder may elect to renew the term of this Note, or if so specified, any portion thereof, by delivering a notice to such effect to any duly appointed paying agent not less than 15 nor more than 30 days prior to such Renewal Date, unless another period is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Such election will be irrevocable and will be binding upon each subsequent Holder of this Note. An election to renew the term of this Note may be exercised with respect to less than the entire principal amount of this Note only if so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith and then only in such principal amount, or any integral multiple in excess thereof, as is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Notwithstanding the foregoing, the term of this Note may not be extended beyond the Stated Maturity specified for this Note on the face hereof or in the pricing supplement attached hereto or delivered herewith. If the Holder does not elect to renew the term, this Note must be presented to any duly appointed paying agent and, as soon as practicable following receipt of such Note such paying agent shall issue in exchange therefor in the name of such Holder (i) a Note, in a principal amount 4 equal to the principal amount of such exchanged Note for which no election to renew the term thereof was exercised, with terms identical to those specified on such exchanged Note (except that such Note shall have a fixed, nonrenewable Stated Maturity on the New Maturity Date) and (ii) if an election to renew is made with respect to less than the full principal amount of such Holder's Note, such paying agent shall issue in exchange for such Note in the name of such Holder a replacement Renewable Note, in a principal amount equal to the principal amount of such exchanged Note for which the election to renew was made, with terms otherwise identical to the exchanged Note. Extension of Stated Maturity If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Stated Maturity of this Note may be extended at the option of the Company for one or more periods of whole years specified on the face hereof or in the pricing supplement attached hereto or delivered herewith (each an "Extension Period") from one to five years up to but not beyond the date (the "Final Maturity") set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith. The Company may exercise such option by notifying the Trustee for this Note at least 45 but not more than 60 days prior to the original Stated Maturity of this Note. If the Company exercises such option, the Trustee shall provide to the Holder of this Note not later than 40 days prior to the original Stated Maturity notice (the "Extension Notice"), in accordance with "Notices" below. The Extension Notice will set forth (i) the election of the Company to extend the Stated Maturity, (ii) the new Stated Maturity, (iii) the Interest Rate applicable to the Extension Period, and (iv) the provisions, if any, for redemption during such Extension Period including the date or dates on which, or the period or periods during which, and the price or prices at which, such redemption may occur during the Extension Period. Upon the provision by the Trustee of an Extension Notice to the Holder hereof, the Stated Maturity of this Note shall be extended automatically and, except as modified by the Extension Notice and as described in the next paragraph, this Note will have the same terms as prior to the provision of such Notice. Notwithstanding the foregoing, not later than 20 days prior to the original Stated Maturity of this Note, the Company may, at its option, revoke the Interest Rate provided for in the Extension Notice and establish a higher Interest Rate for the Extension Period by causing the Trustee to provide notice of such higher Interest Rate, as the case may be, hereof in accordance with "Notices" below. Such notice shall be irrevocable. All Notes with respect to which the Stated Maturity is extended will bear such higher Interest Rate for the Extension Period, whether or not tendered for repayment. If the Company extends the Stated Maturity of this Note, the Holder will have the option to elect repayment of this Note by the Company on the original Stated Maturity at a price equal to the principal amount hereof, plus interest accrued to such date. In order to obtain repayment on such original Stated Maturity once the Company has extended the Stated Maturity hereof, the Holder must follow the procedures set forth below for optional repayment, except that the period for delivery or notification to the Paying Agent shall be at least 25 but not more than 35 days before the original Stated Maturity, and except that if the Holder has tendered this Note for repayment pursuant to an Extension Notice, the Holder may, by written notice to the Trustee or Paying Agent, revoke such tender for repayment until the close of business on the tenth calendar day before the original Stated Maturity. 5 Optional Redemption, Repayment and Repurchase If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Company may, at its option, redeem this Note in whole or in part, on the date or dates (each an "Optional Redemption Date") specified herein, at the price (the "Redemption Price") (together with accrued interest to such Optional Redemption Date) specified herein. If required under the Federal Reserve Capital Adequacy Rules, the Company will obtain the prior approval of the Federal Reserve before exercising its redemption rights. If the Company elects to exercise such option with respect to this Note, at least 30 days prior to the date of redemption, such Trustee shall provide notice of such redemption to the Holder hereof in accordance with "Notices" below. In the event of redemption of this Note in part only, a new Note or Notes for the unredeemed portion hereof shall be issued to the Holder hereof upon the cancellation hereof. Notes redeemed prior to Stated Maturity must be presented for payment together with all unmatured Coupons, if any, appertaining thereto, failing which the amount of any missing unmatured Coupon will be deducted from the sum due for payment. If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, this Note will be repayable prior to its Stated Maturity at the option of the Holder on the Optional Repayment Dates shown on the face hereof or in the pricing supplement attached hereto or delivered herewith at the Optional Repayment Prices shown on the face hereof or in the pricing supplement attached hereto or delivered herewith, together with accrued interest to the date of repayment. Notes that are to be repaid prior to Stated Maturity must be presented for payment together with all unmatured Coupons, if any, appertaining thereto, failing which the amount of any missing unmatured Coupon will be deducted from the sum due for payment. In order for this Note to be repaid, the Principal Paying Agent must receive this Note at least 30 but not more than 45 days prior to an Optional Repayment Date. Any tender of this Note for repayment (except pursuant to a Reset Notice or an Extension Notice) shall be irrevocable. The repayment option may be exercised by the Holder of this Note for less than the entire principal amount of this Note; provided that the principal amount of this Note remaining outstanding after repayment is an authorized denomination. Upon such partial repayment, this Note shall be canceled and a new Note or Notes for the remaining principal amount hereof shall be issued to the Holder of this Note. Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, this Note will not be subject to any sinking fund. Notwithstanding anything herein to the contrary, if this Note is a Discount Note, the amount payable in the event of redemption or repayment prior to the Stated Maturity hereof (other than pursuant to an optional redemption by the Company at a stated Redemption Price), in lieu of the principal amount due at the Stated Maturity hereof, shall be the Amortized Face Amount of this Note as of the redemption date or the date of repayment, as the case may be. The Amortized Face Amount of this Note on any date shall be the amount equal to (i) the Issue Price set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith plus (ii) that portion of the difference between such Issue Price and the stated principal amount of such Note that has accrued by such date at (x) the Bond Yield to Maturity set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith or (y) if so specified, the Bond Yield to Call set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith (computed in each case in accordance with generally accepted United States bond yield computation principles); provided, 6 however, that in no event shall the Amortized Face Amount of a Note exceed its stated principal amount. The Bond Yield to Call listed on the face of this Note or in the pricing supplement attached hereto or delivered herewith shall be computed on the basis of the first occurring Optional Redemption Date with respect to such Note and the amount payable on such Optional Redemption Date. In the event that such Note is not redeemed on such first occurring Optional Redemption Date, the Bond Yield to Call with respect to such Note shall be recomputed on such Optional Redemption Date on the basis of the next occurring Optional Redemption Date and the amount payable on such Optional Redemption Date, and shall continue to be so recomputed on each succeeding Optional Redemption Date until the Note is so redeemed. Tax Redemption The Bearer Notes of a series may be redeemed at the option of the Company in whole, but not in part, at any time on giving at least 30 but not more than 60 days' notice in accordance with "Notices" below (which notice shall be irrevocable), at the respective Redemption Prices thereof, if the Company has or will become obligated to pay additional interest on such Notes as described in the following paragraph as a result of any change in, or amendment to, the laws (or any regulations or rulings promulgated thereunder) of the United States or any political subdivision or taxing authority thereof or therein, or any change in the application or official interpretation of such laws, regulations or rulings, which change or amendment becomes effective on or after their respective Original Issue Dates, and such obligation cannot be avoided by the Company taking reasonable measures available to it; provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Company would be obligated to pay such additional interest were a payment in respect of such Notes then due. Prior to the publication of any notice of redemption pursuant to this paragraph, the Company shall deliver to the Trustee for the Notes to be redeemed a certificate stating that the Company is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Company so to redeem have occurred, and an opinion of independent counsel to the effect that the Company has or will become obligated to pay such additional interest as a result of such change or amendment. Payment of Additional Interest The Company will, subject to the exceptions and limitations set forth below, pay as additional interest to the Holder of this Note or any Coupon that is a United States Alien (as defined below) such amounts as may be necessary so that every net payment on this Note or such Coupon, after deduction or withholding for or on account of any present or future tax, assessment or other governmental charge imposed upon or as a result of such payment by the United States (or any political subdivision or taxing authority thereof or therein), will not be less than the amount provided in this Note or such Coupon to be then due and payable. However, the Company will not be required to make any such payment of additional interest to such Holder for or an account of: (a) any tax, assessment or other governmental charge that would not have been imposed but for (i) the existence of any present or former connection between such Holder (or between a fiduciary, settlor or beneficiary of, or a Person holding a power over, such Holder, if such Holder is an estate or a trust, or a member or shareholder of such Holder, if such Holder is a partnership or a corporation) and the United States, including, without limitation, such Holder (or such fiduciary, settlor, beneficiary, Person holding a power, member or shareholder) being or having been a citizen or resident thereof or being or having been engaged in trade or business or present therein or having or having had a permanent 7 establishment therein or (ii) such Holder's past or present status as a passive foreign investment company, a personal holding company, foreign personal holding company, a controlled foreign corporation for United States tax purposes or private foundation or other tax-exempt organization with respect to the United States or as a corporation that accumulates earnings to avoid United States federal income tax; (b) any estate, inheritance, gift, sales, transfer or personal property tax or any similar tax, assessment or other governmental charge; (c) any tax, assessment or other governmental charge that would not have been imposed but for the presentation by the Holder of this Note or such Coupon for payment more than 15 days after the date on which such payment became due and payable or on which payment thereof was duly provided for, whichever occurred later; (d) any tax, assessment or other governmental charge that is payable otherwise than by deduction or withholding from a payment on this Note or such Coupon; (e) any tax, assessment or other governmental charge required to be deducted or withheld by any Paying Agent from a payment on this Note or such Coupon, if such payment can be made without such deduction or withholding by any other Paying Agent; or (f) any tax, assessment or other governmental charge imposed on a Holder that actually or constructively owns ten percent or more of the combined voting power of all classes of stock of the Company or is a controlled foreign corporation related to the Company through stock ownership; nor shall such additional interest be paid with respect to a payment on this Note or such Coupon to a Holder that is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner would not have been entitled to the additional interest had such beneficiary, settlor, member or beneficial owner been the Holder of this Note or such Coupon. The term "United States Alien" means any person who, for United States federal income tax purposes, is a foreign corporation, a nonresident alien individual, a nonresident alien fiduciary of a foreign estate or trust, or a foreign partnership one or more of the members of which is, for United States federal income tax purposes, a foreign corporation, a nonresident alien individual or a nonresident alien fiduciary of a foreign estate or trust. Special Tax Redemption If the Company shall determine that any payment made outside the United States by the Company or any of its Paying Agents in respect of this Note or any Coupon appertaining thereto would, under any present or future laws or regulations of the United States, be subject to any certification, documentation, information or other reporting requirement of any kind, the effect of which requirement is the disclosure to the Company, any Paying Agent or any governmental authority of the nationality, residence or identity of a beneficial owner that is a United States Alien (other than such a requirement (a) that would not be applicable to a payment made by the Company or any one of its Paying Agents (i) directly to the beneficial owner or (ii) to a custodian, nominee or other agent of the beneficial owner or (b) that can be satisfied by such custodian, nominee or other agent certifying to the effect that the beneficial owner is a United States Alien; provided that, in any 8 case referred to in clause (a) (ii) or (b), payment by the custodian, nominee, or agent to the beneficial owner is not otherwise subject to any such requirement), then the Company shall elect either (x) to redeem such Note in whole, but not in part, at its Redemption Price, or (y) if the conditions described in the next succeeding paragraph are satisfied, to pay the additional interest specified in such paragraph. The Company shall make such determination as soon as practicable and publish prompt notice thereof stating the effective date of such certification, documentation, information or other reporting requirement, whether the Company elects to redeem the Note or to pay the additional interest specified in the next succeeding paragraph and (if applicable) the last date by which the redemption of the Note must take place. If this Note is to be redeemed as described in this paragraph, the redemption shall take place on such date, not later than one year after the publication of the determination notice, as the Company shall specify by notice given to the Trustee at least 60 days before the redemption date. Notice of such redemption shall be given to the Holder of this Note at least 30 but not more than 60 days prior to the redemption date. Notwithstanding the foregoing, the Company shall not so redeem the Note if the Company shall subsequently determine, at least 30 days prior to the redemption date, that subsequent payments on the Note would not be subject to any such certification, documentation, information or other reporting requirement, in which case the Company shall publish prompt notice of such subsequent determination and any earlier redemption notice given shall be revoked and of no further effect. Prior to the publication of any determination notice, the Company shall deliver to the Trustee for the Note to be redeemed a certificate stating that the Company is obligated to make such determination and setting forth a statement of facts showing that the conditions precedent to the obligation of the Company to redeem the Note or to pay the additional interest specified in the next succeeding paragraph have occurred, and an opinion of independent counsel to the effect that such conditions have occurred. If and so long as the certification, documentation, information or other reporting requirement referred to in the preceding paragraph would be fully satisfied by payment of a backup withholding tax or similar charge, the Company may elect to pay as additional interest such amounts as may be necessary so that every net payment made outside the United States following the effective date of such requirement by the Company or any of its Paying Agents of which the beneficial owner is a United States Alien (but without any requirement that the nationality, residence or identity of such beneficial owner be disclosed to the Company, any paying agent or any governmental authority), after deduction or withholding for or on account of such backup withholding tax or similar charge (other than a backup withholding tax or similar charge that (i) would not be applicable in the circumstances referred to in the parenthetical clause of the first sentence of the first paragraph of this section or (ii) is imposed as a result of presentation of this Note for payment more than 15 days after the date on which such payment became due and payable or on which payment thereof was duly provided for, whichever occurred later), will not be less than the amount then due and payable. If the Company elects to pay additional interest, then the Company shall have the right thereafter to redeem this Note at any time in whole, but not in part, at the Redemption Price, subject to the provisions described above. If the Company elects to pay additional interest and the condition specified above should no longer be satisfied, then the Company shall redeem this Note in whole, but not in part, at the Redemption Price, subject to the provisions of this section. Any such redemption payments made by the Company shall be subject to the continuing obligation of the Company to pay additional interest as described above. 9 Paying Agents The Company has initially appointed as its Paying Agents for Bearer Notes of this Series the offices listed below: Principal Paying Agent: Citibank, N.A. 5 Carmelite Street London, England EC4Y OPA Paying Agent: Kredietbank S.A. Luxembourgeoise 43 Boulevard Royal Luxembourg Luxembourg City 2955 The Company reserves the right at any time to vary or terminate the appointment of any Paying Agent and to appoint additional or other Paying Agents and to approve any change in the office through which any Paying Agent acts, provided that there will at all times be a Paying Agent (which may be the Trustee) in at least one city in Europe, which, so long as Bearer Notes are listed on the Luxembourg Stock Exchange and the rules of that exchange shall so require, shall include Luxembourg. Notice of any such termination or appointment and of any changes in the specified offices of the Trustee or any Paying Agent will be given to the Holder hereof as described below. Notices All notices to Holders of this Note will be deemed to have been duly given if published on two separate Business Days in a leading London daily newspaper (which is expected to be the Financial Times) and, with respect to any series of Bearer Notes that may be listed on the Luxembourg Stock Exchange, if such exchange so requires, in Luxembourg in a newspaper of general circulation in Luxembourg (which is expected to be the Luxemburger Wort). Such notices shall be deemed to have been given on the date of the first such publication. Other Terms As provided in the Indenture and subject to certain limitations therein set forth, this Note is exchangeable for a like aggregate principal amount of Bearer Notes of different authorized denominations, as requested by the Person surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. If an Event of Default with respect to the Debt Securities of this series shall have occurred and be continuing, the principal of all the Debt Securities of this series may be declared due and payable in this manner and with the effect provided in the Indenture. 10 In case this Note or any Coupon shall at any time become mutilated, destroyed, stolen or lost, it may be replaced at the specified office of the Principal Paying Agent in London; or, with respect to any series of Bearer Notes that are listed on the Luxembourg Stock Exchange, at the specified office of the Paying Agent in Luxembourg, upon payment by the claimant of such expenses as may be incurred in connection therewith and, in the case of destruction, theft or loss, on such terms as to evidence and indemnity as the Company or the Trustee may reasonably require. Mutilated or defaced Bearer Notes or Coupons must be surrendered before replacements will be issued. All monies paid by the Company to a Trustee or Paying Agent for the payment of principal of or any premium or interest on any Bearer Note or for the payment of any Coupon which remain unclaimed at the end of two years after such payments shall have become due and payable will be repaid to the Company, at its written request, and the Holder of such Note or Coupon will thereafter look only to the Company for payment, such payment to be made only outside the United States. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Debt Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of Debt Securities at the time outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Debt Securities of any series at the time outstanding, on behalf of the Holders of all the Debt Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Debt Security shall be conclusive and binding upon such Holder and upon all future Holders of this Debt Security and of any Debt Security issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon the Debt Security. Holders of Debt Securities may not enforce their rights pursuant to the Indenture or the Note except as provided in the Indenture. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed. The Company may, without the consent of the Holders of the Notes, consolidate with, merge into, or transfer substantially all of its assets to, a corporation, provided that the successor corporation assumes all obligations of the Company under the Notes and certain other conditions are met. Except as provided above, the obligation to pay the principal hereof (and premium, if any) and interest hereon in the designated currency of payment is of the essence. To the fullest extent possible under applicable law, judgments in respect of this Note shall be given in such currency. The obligation of the Company to make such payments in the designated currency of payment shall, notwithstanding any payment in any other currency (whether pursuant to a judgment or otherwise), be discharged only to the extent of the amount in the designated currency of payment that the Holder of this Note may, in accordance with normal banking procedures, purchase with the sum paid in such other currency (after any premium and cost of exchange) on the business day in the 11 country of issue of the designated currency of payment or in the international banking community (in the case of a composite currency) immediately following the day on which such Holder receives such payment. If the amount in the designated currency of payment that may be so purchased is for any reason less than the amount originally due, the Company shall, as a separate and independent obligation, pay such additional amounts in the designated currency of payment as may be necessary to compensate for any such shortfall. This Note shall be deemed to be a contract made and to be performed solely in the State of New York and for all purposes be governed by, and construed in accordance with, the laws of said State without regard to the conflicts of law rules of said State. All terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in the Indenture. 12 SCHEDULE OF ISSUANCES, EXCHANGES AND AGGREGATE PRINCIPAL AMOUNT The following issuances and exchanges of a part of this Note have been made, and the aggregate principal amount of Bearer Notes represented by this Note at any time is as shown in the last entry of Column III hereof unless one or more entries have been made in Column IV hereof reflecting exchanges for individual Bearer Notes, in which event such aggregate principal amount is as shown in the last entry of Column V hereof.
I. II. III. IV. V. VI. Aggregate Principal Principal Aggregate Amount Amount Notation Settlement Principal Principal Exchanged for Remaining Made on Date or Amount Amount Individual After behalf of the Exchanged Issued Issued Bearer Notes Exchange Trustee - ---------- --------- --------- ------------- --------- ------------- - ---------- --------- --------- ------------- --------- ------------- - ---------- --------- --------- ------------- --------- ------------- - ---------- --------- --------- ------------- --------- ------------- - ---------- --------- --------- ------------- --------- ------------- - ---------- --------- --------- ------------- --------- ------------- - ---------- --------- --------- ------------- --------- ------------- - ---------- --------- --------- ------------- --------- ------------- - ---------- --------- --------- ------------- --------- ------------- - ---------- --------- --------- ------------- --------- ------------- - ---------- --------- --------- ------------- --------- ------------- - ---------- --------- --------- ------------- --------- -------------
13 SCHEDULE OF INTEREST PAYMENTS The following payments of interest in respect of this Note have been made.
Notation Made Date of Interest on behalf of the Payment Interest Paid Trustee - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ----------------
14 BEARER PRINCIPAL AMOUNT NO. FL___ OR FACE AMOUNT $_______________ CUSIP:__________ CITIGROUP GLOBAL MARKETS HOLDINGS COMMON CODE INC. PERMANENT GLOBAL NOTE REPRESENTING DUE NINE MONTHS OR MORE FROM DATE OF ISSUE MEDIUM-TERM SUBORDINATED NOTE, SERIES E (FLOATING OR INDEXED RATE) THIS SECURITY IS A PERMANENT GLOBAL NOTE, WITHOUT COUPONS, EXCHANGEABLE FOR INDIVIDUAL BEARER NOTES, WITH COUPONS, IF ANY, IN THE DENOMINATION OF U.S. $10,000 OR ANY LARGER AMOUNT THAT IS AN INTEGRAL MULTIPLE OF U.S. $1,000 (OR SUCH OTHER DENOMINATIONS AS ARE SPECIFIED BELOW FOR ANOTHER CURRENCY). THE RIGHTS ATTACHING TO THIS NOTE AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR INDIVIDUAL BEARER NOTES ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL BEARER NOTES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTION 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE. IF APPLICABLE, THE "TOTAL AMOUNT OF OID" AND "YIELD TO MATURITY" SET FORTH BELOW WILL BE COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE UNITED STATES FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES. Issue Price: Original Issue Date: Initial Interest Rate: Stated Maturity: Specified Currency (If other than U.S. dollars): Authorized Denominations: (If other than as set forth in the Prospectus Supplement) Dual Currency Note: [ ] Yes (see attached) [ ] No Optional Payment Currency: Designated Exchange Rate: Base Rate: [ ] CD Rate [ ] Commercial Paper Rate [ ] Federal Funds Rate [ ] LIBOR Telerate [ ] LIBOR Reuters [ ] Treasury Rate [ ] Treasury Rate [ ] Prime Rate Constant Maturity [ ] Eleventh District [ ] EURIBOR Cost of Funds Rate [ ] Other (see attached) 2 Interest Reset Period Index Maturity: or Interest Reset Dates: Interest Payment Dates: Accrue to Pay: [ ] Yes [ ] No Indexed Principal Note: [ ] Yes (see attached) [ ] No Floating Rate: [ ] Indexed Interest Rate: [ ] (see attached) Spread Multiplier: Spread (+/-): Spread Reset: [ ] The Spread or Spread Multiplier may not be changed prior to Stated Maturity. [ ] The Spread or Spread Multiplier may be changed prior to Stated Maturity (see attached). Optional Reset Dates (if applicable): Maximum Interest Rate: Minimum Interest Rate: Inverse Floating Rate Note: [ ] Yes (see attached) [ ] No Initial Fixed Interest Rate: Reset Fixed Reference Rate Floating Rate / Fixed Rate Note: [ ] Yes (see attached) [ ] No Amortizing Note: [ ] Yes [ ] No Amortization Schedule: Optional Redemption: [ ] Yes [ ] No Optional Redemption Dates: Redemption Prices: Bond Yield to Maturity: Bond Yield to Call: Optional Repayment: [ ] Yes [ ] No Optional Repayment Dates: Optional Repayment Prices: Optional Extension of [ ] Yes [ ] No Stated Maturity: 3 Final Maturity: Discount Note: [ ] Yes [ ] No Total Amount of OID: Yield to Maturity: Renewable Note: [ ] Yes (see attached) [ ] No Initial Maturity Date: Special Election Interval (if applicable): Amount (if less than entire principal amount) as to which election may be exercised: If the Specified Currency of this Note is Pounds sterling, the following applies: This instrument constitutes [ ] commercial paper [ ] a shorter term debt security [ ] a longer term debt security issued in accordance with regulations made under section 4 of the Banking Act 1987. The issuer of this Note is Citigroup Global Markets Holdings Inc., which is not an authorized institution or a European authorized institution (as such terms are defined in the Banking Act 1987 (Exempt Transactions) Regulation 1997). Repayment of the principal and payment of any interest or premium in connection with this Note has not been guaranteed IF THE SPECIFIED CURRENCY OF THIS NOTE IS POUNDS STERLING, THE FOLLOWING APPLIES: THIS NOTE IS ISSUED IN ACCORDANCE WITH THE REGULATIONS MADE UNDER SECTION 4 OF THE BANKING ACT 1987. 4 CITIGROUP GLOBAL MARKETS HOLDINGS INC., a corporation duly organized and existing under the laws of the State of New York (herein referred to as the "Company"), for value received hereby promises to pay to bearer, upon presentation and surrender hereof, (a) the Principal Amount or, in the case of an Indexed Principal Note, the Face Amount adjusted by reference to prices, changes in prices, or differences between prices, of securities, currencies, intangibles, goods, articles or commodities or by such other objective price, economic or other measures (an "Index") as described on the face hereof or in the pricing supplement attached hereto or delivered herewith, in the Specified Currency on the Stated Maturity shown above or earlier if and to the extent so provided herein, and (b) accrued interest on the Principal Amount then outstanding (or, in the case of an Indexed Principal Note, the Face Amount then outstanding): (i) if this is a Floating Rate Note, at the Initial Interest Rate shown above from the Original Issue Date shown above until the first Interest Reset Date shown above following the Original Issue Date and thereafter at the Base Rate shown above, adjusted by the Spread or Spread Multiplier, if any, shown above, determined in accordance with the provisions hereof, (ii) if this is an Indexed Rate Note, at a rate determined by reference to an Index as described herein, (iii) if this is an Inverse Floating Rate Note, at the Initial Interest Rate shown above from the Original Issue Date shown above until the first Interest Reset Date shown above following the Original Issue Date and thereafter at the Inverse Floating Rate, as determined in accordance with the provisions hereof, or (iv) if this is a Floating Rate / Fixed Rate Note, at a rate determined as described herein, until, in each case, the Principal Amount or the Face Amount then outstanding is paid or duly provided for in accordance with the terms hereof. For purposes of this Note, "Business Day" means: (i) with respect to any Bearer Note, any day that is not a Saturday or Sunday and that is (i) not a day on which banking institutions are authorized or required by law or regulation to be closed in (a) The City of New York, (b) London, England, (c) the place in which this Note or any Coupon is presented for payment or (d) if the Specified Currency (as defined below) is other than U.S. dollars, the financial center of the country issuing the Specified Currency (which in the case of the Euro shall be Brussels, Belgium) and (ii) if the Base Rate specified above is LIBOR, any day on which dealings in deposits in the Specified Currency are transacted in the London interbank market (a "London Business Day"); (iii) with respect to Bearer Notes having any determination by the exchange rate agent (as defined below) of an exchange rate pursuant to notes having a specified currency other than U.S. dollars, a day on which banking institutions and foreign exchange markets settle payments in the City of New York and London (an "Exchange Rate Business Day); (iv) with respect to Bearer Notes having a specified currency other than U.S. dollars only, other than Bearer Notes denominated in Euros, any day that, in the principal financial center (as defined below) of the country of the Specified Currency, is not a day on which banking institutions generally are authorized or obligated by law to close; and (v) with respect to EURIBOR Notes and Notes denominated in Euros, a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer ("TARGET") System is open (a "Target Business Day"). As used above, a "principal financial center" means the capital city of the country issuing the Specified Currency. However, with respect to U.S. dollars, Australian dollars, Canadian dollars, and Swiss francs, the principal financial center shall be The City of New York, Sydney, Toronto, and Zurich, respectively. The indebtedness evidenced by this Note is, to the extent set forth in the Indenture, expressly subordinated and subject in right of payment to the prior payment in full of Senior Indebtedness as defined in the Indenture, and this Note is issued subject to such provisions, and each Holder of this Note, by accepting the same, agrees to and shall be bound by such provisions and 5 authorizes and directs the Trustee in his behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination as provided in the Indenture and appoints the Trustee as his attorney-in-fact for any and all such purposes. If this Note is an Amortizing Note as shown on the face hereof or in the pricing supplement attached hereto or delivered herewith, a portion or all the principal amount of the Note is payable prior to Stated Maturity in accordance with a schedule, by application of a formula, or by reference to an Index (as described above). This Note is exchangeable in whole or from time to time in part without charge for individual Bearer Notes, with appropriate Coupons attached, if any, in the denomination of U.S.$10,000 or any larger amount that is an integral multiple of U.S.$1,000 (or such other denominations as are specified above for another currency), upon 30 days' notice to the Trustee given through either Euroclear Bank S.A./N.V. or Clearstream International. Upon any exchange of any portion of this Note for individual Bearer Notes, the portion of the principal amount hereof so exchanged shall be endorsed by the Trustee in the Schedule of Issuances, Exchanges and Aggregate principal amount hereto, and the principal amount hereof shall be reduced for all purposes by the amount so exchanged. Except as otherwise provided herein or in the Indenture, until exchanged in full for individual Bearer Notes, this Note shall in all respects be entitled to the same benefits and subject to the same terms and conditions of, and the Company shall be subject to the same restrictions as those contained on the individual Bearer Notes and in the Indenture. Except under certain circumstances that may apply if this Note has a specified currency other than U.S. dollars, payments of the principal hereof and any premium and interest hereon will be made only in the Specified Currency. Payments in respect of this Note and any Coupon will be made only against surrender of this Note or such Coupon, at the offices of the Paying Agents outside the United States listed on the reverse hereof. At the direction of the Holder of this Note or any Coupon, and subject to applicable laws and regulations, such payments will be made by check drawn on a bank in The City of New York (in the case of U.S. dollar payments) or outside the United States (in the case of payments in a currency other than U.S. dollars) mailed to an address outside the United States furnished by the Holder hereof or, at the option of the Holder hereof, by wire transfer (pursuant to written instructions supplied by the Holder hereof) to an account maintained by the payee with a bank located outside the United States. No payment in respect of this Note or any Coupon will be made upon presentation of this Note or such Coupon at any office or agency of the Trustee or any other paying agency maintained by the Company in the United States, nor will any such payment be made by transfer to an account, or by mail to an address, in the United States. Notwithstanding the foregoing, if U.S. dollar payments in respect of this Note or any Coupons at the offices of all Paying Agents outside the United States become illegal or are effectively precluded because of the imposition of exchange controls or similar restrictions on the full payment or receipt of such amounts in U.S. dollars, the Company will appoint an office or agency (which may be the Trustee) in the United States at which such payments may be made. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF AND IN ANY PRICING SUPPLEMENT ATTACHED HERETO OR DELIVERED HEREWITH, AND SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE. 6 This Note shall not become valid or obligatory for any purpose unless and until this Note has been authenticated by Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), or its successor, as Trustee. IN WITNESS WHEREOF, the Company has caused this Note to be executed under its corporate seal. Dated: CITIGROUP GLOBAL MARKETS HOLDINGS INC. By______________________________________ Authorized Officer [Seal] Attest__________________________________ Assistant Secretary CERTIFICATE OF AUTHENTICATION This is one of the Notes issued under the within-mentioned Indenture. Dated: DEUTSCHE BANK TRUST COMPANY AMERICAS (formerly BANKERS TRUST COMPANY), as Trustee By______________________________________ Authorized Signatory 7 (REVERSE OF SECURITY) CITIGROUP GLOBAL MARKETS HOLDINGS INC. PERMANENT GLOBAL NOTE REPRESENTING DUE NINE MONTHS OR MORE FROM DATE OF ISSUE MEDIUM-TERM SUBORDINATE NOTE, SERIES E (FLOATING OR INDEXED RATE) General This Note is one of a series of duly authorized debt securities of the Company (the "Debt Securities") issued or to be issued in one or more series under an indenture, dated as of December 1, 1988, as amended (the "Indenture"), between the Company and Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), as successor trustee (the "Trustee," which term includes any successor Trustee under the Indenture), to which indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Debt Securities and of the terms upon which the Debt Securities are, and are to be, authenticated and delivered. The U.S. dollar equivalent of the public offering price or purchase price of Notes denominated in currencies other than U.S. dollars will be determined by the Company or its agent, as exchange rate agent for the Notes (the "Exchange Rate Agent"), on the basis of the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York (the "Market Exchange Rate") for such currencies on the applicable issue dates. The Notes are in bearer form with coupons. Unless otherwise specified in the applicable pricing supplement, the authorized denominations of Bearer Notes denominated in U.S. dollars will be U.S.$10,000 and any larger amount that is an integral multiple of U.S.$1,000. The authorized denominations of Bearer Notes denominated in a currency other than U.S. dollars will be the approximate equivalents thereof in the Specified Currency. Floating Rate Notes Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, if this Note is a Floating Rate Note, this Note will bear interest from its Original Issue Date to, but not including, the first Interest Reset Date (as defined below) at the Initial Interest Rate set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith. Thereafter, the interest rate hereon for each Interest Reset Period will be determined by reference to the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, plus or minus the Spread, if any, or multiplied by the Spread Multiplier, if any, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. The Base Rates that may be specified on the face hereof or in the pricing supplement attached hereto or delivered herewith are LIBOR, the Commercial Paper Rate, the Treasury Rate, the Federal Funds Rate, the CD Rate, the Prime Rate, the Eleventh District Cost of Funds Rate, EURIBOR or any other Base Rate specified on the face hereof. "H.15(519)" means the publication entitled "Statistical Release H.15(519), Selected Interest Rates" or any successor publication, published by the Board of Governors of the Federal Reserve System. "H.15 Daily Update" means the daily update of the Board of Governors of the Federal Reserve System at http://www.bog.frb.fed.us/releases/H15/update or any successor site or publication. "Calculation Date," where applicable, means the date on which the Calculation Agent is to calculate the interest rate for the Notes which shall be the earlier of (1) the tenth calendar day after the related Rate Determination Date, or if any such day is not a Business Day, the next succeeding business day or (2) the Business Day preceding the applicable Interest Payment Date or the Stated Maturity, as the case may be. As specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, this Note may also have either or both of the following (in each case expressed as a rate per annum on a simple interest basis): (i) a maximum limitation, or ceiling, on the rate at which interest may accrue during any interest period ("Maximum Interest Rate") and/or (ii) a minimum limitation, or floor, on the rate at which interest may accrue during any interest period ("Minimum Interest Rate"). In addition to any Maximum Interest Rate that may be specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the interest rate will in no event be higher than the maximum rate permitted by applicable law, as the same may be modified by United States law of general application. The Company will appoint, and enter into an agreement with, agents (each, a "Calculation Agent") to calculate interest rates on this Note. All determinations of interest rates by the Calculation Agent shall, in the absence of manifest error, be conclusive for all purposes and binding on the Holder hereof. Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), shall be the Calculation Agent for this Note. At the request of the Holder hereof, the Calculation Agent will provide the interest rate then in effect and, if determined, the interest rate that will become effective on the next Interest Reset Date. The interest rate hereon will be reset daily, weekly, monthly, quarterly, semiannually or annually (such period being the "Interest Reset Period" specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, and the first day of each Interest Reset Period being an "Interest Reset Date"). Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Interest Reset Dates will be as follows: (i) if this Note resets daily, each Business Day; (ii) if this Note (unless this Note is a Treasury Rate Note) resets weekly, Wednesday of each week; (iii) if this Note is a Treasury Rate Note that resets weekly, Tuesday of each week (except as provided below under "Determination of Treasury Rate"); (iv) if this Note resets monthly, the third Wednesday of each month (with the exception of monthly reset Eleventh District Cost of Funds Rate Notes, which reset on the first calendar day of each month); (v) if this Note is an Eleventh District Cost of Funds Rate Note that resets monthly, the first calendar day of each month; (vi) if this Note resets quarterly, the third Wednesday of March, June, September and December of each year; (vii) if this Note resets semiannually, the third Wednesday of the two months of each year specified on the face hereof or in the pricing supplement attached hereto or delivered herewith; and (viii) if this Note resets annually, the third Wednesday of the month of each year specified on the face hereof or in the pricing supplement attached hereto or delivered 2 herewith. If an Interest Reset Date would otherwise be a day that is not a Business Day, such Interest Reset Date shall be postponed to the next succeeding Business Day, except that, if the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is LIBOR or EURIBOR and such Business Day is in the next succeeding calendar month, such Interest Reset Date shall instead be the immediately preceding Business Day. If an auction of direct obligations of United States Treasury Bills falls on a day that is an Interest Reset Date for Treasury Rate Notes, the Interest Reset Date shall be the succeeding Business Day. Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the interest payable hereon on each Interest Payment Date shall be the accrued interest from and including the Original Issue Date or the last date to which interest has been paid, as the case may be, to but excluding such Interest Payment Date. If more than one Interest Reset Date occurs during any period for which accrued interest is being calculated, accrued interest shall be calculated by multiplying the principal amount hereof (or if this Note is an Indexed Principal Note, the Face Amount specified on the face hereof or in the pricing supplement attached hereto or delivered herewith) by an accrued interest factor. Such accrued interest factor will be computed by adding the interest factors calculated for each day in the period for which accrued interest is being calculated. The interest factor (expressed as a decimal calculated to seven decimal places without rounding) for each such day will be computed, unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, by dividing the interest rate in effect on such day by 360, if the Base Rate specified on the face hereof is the Commercial Paper Rate, the Federal Funds Rate, the CD Rate, the Prime Rate, the Eleventh District Cost of Funds Rate, LIBOR, or EURIBOR, or by the actual number of days in the year, if the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is the Treasury Rate. In all other cases, accrued interest shall be calculated by multiplying the principal amount hereof (or if this Note is an Indexed Principal Note, the Face Amount specified on the face hereof) by the interest rate in effect during the period for which accrued interest is being calculated, and multiplying that product by the quotient obtained by dividing the number of days in the period for which accrued interest is being calculated by 360, if the Base Rate specified on the face hereof is the Commercial Paper Rate, the Federal Funds Rate, the CD Rate, the Prime Rate, the Eleventh District Cost of Funds Rate, LIBOR, or EURIBOR, or by the actual number of days in the year, if the Base Rate specified on the face hereof is the Treasury Rate. For purposes of making the foregoing calculations, the interest rate in effect on any Interest Reset Date will be the applicable rate as reset on such date. Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, all percentages resulting from any calculation of the rate of interest hereof will be rounded, if necessary, to the nearest 1/100,000 of 1% (.0000001), with five one-millionths of a percentage point rounded upward, and all currency amounts used in or resulting from such calculation will be rounded to the nearest one-hundredth of a unit (with .005 of a unit being rounded upward). Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, interest will be payable as follows: (i) if this Note resets daily, weekly or monthly (other than Eleventh District Cost of Funds Rate Notes), interest will be payable on the third Wednesday of each month or on the third Wednesday of March, June, September and December of each year, as specified on the face hereof or in the pricing supplement attached hereto or delivered herewith or; (ii) in the case of Eleventh District Cost of Funds Rate Notes, interest will 3 be payable on the first calendar day of each March, June, September and December; (iii) if this Note resets quarterly, interest will be payable on the third Wednesday of March, June, September, and December of each year; (iv) if this Note resets semiannually, interest will be payable on the third Wednesday of each of two months of each year specified on the face hereof or in the pricing supplement attached hereto or delivered herewith; and (v) if this Note resets annually, interest will be payable on the third Wednesday of the month of each year specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, and in each case at Stated Maturity (each such day being an "Interest Payment Date"). If an Interest Payment Date would otherwise fall on a day that is not a Business Day, such Interest Payment Date shall be postponed to the next succeeding Business Day, except that, if the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is LIBOR or EURIBOR and such Business Day is in the next succeeding calendar month, such Interest Payment Date shall instead be the immediately preceding Business Day; provided, however, if with respect to any Note for which "Accrue to Pay" is not specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, if an Interest Payment Date with respect to such Note would otherwise be a day that is not a Business Day, such Interest Payment Date shall not be postponed; provided, further, that any payment required to be made in respect of a Note that does not Accrue to Pay on a date (including the day of Stated Maturity) that is not a Business Day for such Note need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on such date, and no additional interest shall accrue as a result of such delayed payment. Subject to applicable provisions of law and except as specified herein, on each Interest Reset Date the rate of interest shall be the rate determined in accordance with the provisions of the applicable heading below. Determination of CD Rate If the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is the CD Rate, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to the CD Rate and the Spread or Spread Multiplier, if any, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. The "CD Rate" for each Interest Reset Period shall be the rate as of the second Business Day prior to the Interest Reset Date for such Interest Reset Period (a "CD Rate Determination Date") for negotiable U.S. dollar certificates of deposit having the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as published in H.15(519) under the heading "CDs (Secondary Market)". In the event that such rate is not published prior to 3:00 p.m., New York City time, on the Calculation Date (as defined above) pertaining to such CD Rate Determination Date, then the "CD Rate" for such Interest Reset Period will be the rate on such CD Rate Determination Date for negotiable U.S. dollar certificates of deposit of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as published in the H.15 Daily Update, or other recognized electronic source used for the purpose of displaying the applicable rate, under the heading "CDs (Secondary Market)." If by 3:00 p.m., New York City time, on such Calculation Date such rate is not yet published in either H.15(519) or H.15 Daily Update, then the "CD Rate" for such Interest Reset Period will be calculated by the Calculation Agent and will be the arithmetic mean of the secondary market offered rates as of 10:00 a.m., New York City time, on such CD Rate Determination Date of three leading nonbank dealers in negotiable U.S. dollar certificates of deposit in The City of New York selected by the Calculation Agent for negotiable U.S. dollar certificates of deposit of major United States money center banks of the highest credit standing (in the market for negotiable U.S. dollar certificates of deposit) with a 4 remaining maturity closest to the Index Maturity on the face hereof or in the pricing supplement attached hereto or delivered herewith in a denomination of $5,000,000; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting offered rates as mentioned in this sentence, the CD Rate for such Interest Reset Period will be the same as the CD Rate for the immediately preceding Interest Reset Period (or, if there was no such Interest Reset Period, the Initial Interest Rate). Determination of Commercial Paper Rate If the Base Rate shown on the face hereof or in the pricing supplement attached hereto or delivered herewith is the Commercial Paper Rate, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to the Commercial Paper Rate and the Spread or Spread Multiplier, if any, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. The "Commercial Paper Rate" for each Interest Reset Period will be determined by the Calculation Agent as of the second Business Day prior to the Interest Reset Date for such Interest Reset Period (a "Commercial Paper Rate Determination Date") and shall be the Money Market Yield (as defined below) on such Commercial Paper Rate Determination Date of the rate for commercial paper having the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, as such rate shall be published in H.15(519) under the heading "Commercial Paper-Nonfinancial". In the event that such rate is not published prior to 3:00 p.m., New York City time, on the Calculation Date (as defined above) pertaining to such Commercial Paper Rate Determination Date, then the Commercial Paper Rate for such Interest Reset Period shall be the Money Market Yield on such Commercial Paper Rate Determination Date of the rate for commercial paper of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as published in the H.15 Daily, or such other recognized electronic source used for the purpose of displaying the applicable rate, under the heading "Commercial Paper-Nonfinancial." If by 3:00 p.m., New York City time, on such Calculation Date such rate is not yet published in either H.15(519) or the H.15 Daily Update, then the "Commercial Paper Rate" for such Interest Reset Period shall be the Money Market Yield of the arithmetic mean of the offered rates as of 11:00 a.m., New York City time, on such Commercial Paper Rate Determination Date of three leading dealers of U.S. dollar commercial paper in The City of New York selected by the Calculation Agent for commercial paper of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith placed for an industrial issuer whose bonds are rated "AA" or the equivalent by a nationally recognized rating agency; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting offered rates as mentioned in this sentence, the "Commercial Paper Rate" for such Interest Reset Period will be the same as the Commercial Paper Rate for the immediately preceding Interest Reset Period (or, if there was no such Interest Reset Period, the Initial Interest Rate). "Money Market Yield" shall be the yield calculated in accordance with the following formula: D X 360 Money Market Yield = ------------- X 100 360 - (D X M) where "D" refers to the applicable per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal and "M" refers to the actual number of days in the applicable Interest Reset Period specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. 5 Determination of Federal Funds Rate If the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is the Federal Funds Rate, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to the Federal Funds Rate and Spread or Spread Multiplier, if any, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. The "Federal Funds Rate" for each Interest Reset Period shall be the effective rate on the second Business Day prior to the Interest Reset Date for such Interest Reset Period (a "Federal Funds Rate Determination Date") for Federal Funds as published in H.15(519) under the heading "Federal Funds (Effective)" and displayed on Moneyline Telerate (or any successor service) on Page 120 (or any other page as may replace the specified Page on that service). In the event that such rate does not appear on Moneyline Telerate on Page 120 or is not published prior to 3:00 p.m., New York City time, on the Calculation Date (as defined above) pertaining to such Federal Funds Rate Determination Date, the "Federal Funds Rate" for such Interest Reset Period shall be the rate on such Federal Funds Rate Determination Date as published in the H.15 Daily Update under the heading "Federal Funds/Effective Rate," or other recognized electronic source used for the purpose of displaying the applicable rate. If by 3:00 p.m., New York City time, on such Calculation Date, such rate is not yet published, then the "Federal Funds Rate" for such Interest Reset Period shall be arithmetic mean of the rates for the last transaction in overnight U.S. dollar federal funds arranged by three leading brokers of U.S. dollar Federal Funds transactions in New York City, selected by the Calculation Agent prior to 9:00 a.m., New York City time, on that Federal Funds Rate Determination Date; provided, however, that if the brokers so selected by the Calculation Agent are not quoting as mentioned above, the "Federal Funds Rate" for the Interest Reset Period will be the "Federal Funds Rate" in effect for the particular Federal Funds Rate Determination Date. If there was no Federal Funds Rate in effect for the Interest Reset Period, the "Federal Funds Rate" will be the initial interest rate. Determination of LIBOR If the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is LIBOR, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to LIBOR and the Spread or Spread Multiplier, if any, specified on the face hereof. "LIBOR" for each Interest Reset Period will be determined by the Calculation Agent as follows On the second London Business Day prior to the Interest Reset Date for such Interest Reset Period (a "LIBOR Determination Date"), the Calculation Agent for such LIBOR Note will determine the offered rates for deposits in the Specified Currency for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, which appear on the Designated LIBOR Page at approximately 11:00 a.m., London time, on such LIBOR Determination Date. "Designated LIBOR Page" means either (a) if "LIBOR Moneyline Telerate" is designated on the face hereof or in the pricing supplement attached hereto or delivered herewith, or if neither "LIBOR Reuters" nor "LIBOR Moneyline Telerate" is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as the method for calculating LIBOR, the display designated as page "3750" on the Telerate Service ("Telerate") (or such other page as may replace page "3750" on such service or such other service as may be replaced by a successor service for the purpose of displaying the London interbank offered rates of major banks), and LIBOR for such Interest Reset Period will be the relevant offered rate as determined by the Calculation Agent or (b) if "LIBOR Reuters" is 6 designated on the face hereof or in the pricing supplement attached hereto or delivered herewith, "Designated LIBOR Page" means the display designated as page "LIBO" on the Reuters Monitor Money Rates Service and LIBOR will be the arithmetic means of the offered rates, calculated by the Calculation Agent, or the offered rates, if the designated LIBOR page by its terms provides only for a single rate (or such other page as may replace the LIBO page on such service or such other service as may be replaced by a successor service for purpose of displaying London interbank offered rates of major banks). If neither LIBOR Reuters nor LIBOR Telerate is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, LIBOR will be determined as if LIBOR Moneyline Telerate had been specified. If LIBOR cannot be determined as described above (either because the Designated LIBOR Page is no longer available or because fewer than two offered rates appear on the Designated LIBOR Page on the LIBOR Determination Date), the Calculation Agent will determine "LIBOR" as follows. The Calculation Agent will request the principal London offices of each of the four major banks in the London interbank market selected by the Calculation Agent to provide the Calculation Agent with its offered quotations for deposits in the Specified Currency for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, to prime banks in the London interbank market at approximately 11:00 a.m., London time, on the LIBOR Determination Date, in a principal amount equal to an amount of at least $1,000,000 or its approximate equivalent thereof in the Specified Currency, that is representative of a single transaction in such market at such time. If two or more such quotations are provided, "LIBOR" for such Interest Reset Period will be the arithmetic mean of such quotations. If fewer than two such quotations are provided, "LIBOR" for such Interest Reset Period will be the arithmetic mean of rates quoted by three major banks in The City of New York selected by the Calculation Agent at approximately 11:00 a.m., New York City time, on the LIBOR Determination Date for loans in the Specified Currency to leading European banks for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, in a principal amount equal to an amount of at least $1,000,000 or the approximate equivalent thereof in the Specified Currency that is representative of a single transaction in such market at such time; provided, however, that if fewer than three banks selected as aforesaid by the Calculation Agent are quoting rates as mentioned in this sentence. "LIBOR" for such Interest Reset Period will be the same as LIBOR for the immediately preceding Interest Reset Period (or, if there was no such Interest Reset Period, the LIBOR Rate will be the Initial Interest Rate). Determination of Treasury Rate If the Base Rate specified in the face hereof or in the pricing supplement attached hereto or delivered herewith is the Treasury Rate or Treasury Rate Constant Maturity, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to the Treasury Rate and the Spread or Spread Multiplier, if an, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Unless "Treasury Rate Constant Maturity" is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the "Treasury Rate" for each Interest Reset Period will be the rate for the auction held on the Treasury Rate Determination Date (as defined below) for such Interest Reset Period of direct obligations of the United States ("Treasury Securities") that have the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, as such rate appears on either Moneyline Telerate (or any successor service) on page 56 (or any other page as may replace the page on that service) or on page 57 (or any other page as may replace that page on that service) under the 7 heading "INVESTMENT RATE." The following procedures will be followed if the Treasury Rate cannot be determined as described above. If not so published by 3:00 p.m., New York City time, on the Calculation Date, the "Treasury Rate" will be the Bond Equivalent Yield (defined below) of the rate for the applicable Treasury Securities as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the heading "U.S. Government Securities/Treasury Bills/Auction High." In the event that such rate is not so published by 3:00 p.m., New York City time, on the related Calculation Date, the Treasury Rate will be the Bond Equivalent Yield of the auction rate of the applicable Treasury Securities as announced by the United States Department of the Treasury. In the event that the results of the auction of Treasury Securities is not so announced by the United States Department of the Treasury, or if the auction is not held, then the Treasury Rate will be the Bond Equivalent Yield of the rate on the Treasury Rate Determination Date of the applicable Treasury Securities published in H.15(519) under the heading of "U.S. Government Securities/Treasury Bills/Secondary Market." If such rate is not so published by 3:00 p.m., New York City time, on the related Calculated Date, then the Treasury Rate will be the rate on the Treasury Rate Determination Date of the applicable Treasury Securities as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the heading "U.S. Government Securities/Treasury Bills/Secondary Market." In the event that such rate is not so published by 3:00 p.m., New York City time, on the related Calculation Date, then the Treasury Rate will be the rate on the Treasury Rate Determination Date calculated by the Calculation Agent as the Bond Equivalent Yield of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 p.m., New York City time, on the Treasury Rate Determination Date, of three primary United States government securities dealers selected by the Calculation Agent for the issue of Treasury Securities with a remaining maturity closest to the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting bid rates as mentioned in this sentence, then the "Treasury Rate" for such Interest Reset Period will be the same as the Treasury Rate for the immediately preceding Interest Reset Period (or, if there was no Interest Reset Period, the Initial Interest Rate). The "Treasury Rate Determination Date" for each Interest Reset Period will be the day of the week in which the Interest Reset Date for such Interest Reset Period falls on which Treasury Securities would normally be auctioned. Treasury Securities are normally sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is normally held on the following Tuesday, except that such auction may be held on the preceding Friday. If, as the result of a legal holiday, an auction is so held on the preceding Friday, such Friday will be the Treasury Rate Determination Date pertaining to the Interest Reset Period commencing in the next succeeding week. If an auction date shall fall on any day that would otherwise be an Interest Reset Date for a Note whose Base Rate is the Treasury Rate, then such Interest Reset Date shall instead be the Business Day immediately following such auction date. Bond Equivalent: Yield will be calculated as follows: D X N Money Market Yield = ------------- X 100 360 - (D X M) where "D" refers to the applicable per annum rate for Treasury Securities quoted on a bank discount basis and expressed as a decimal, "N" refers to 365 or 366, as the case may be, and "M" refers to the actual number of days in the applicable interest reset period. 8 If "Treasury Rate Constant Maturity" is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the "Treasury Rate" for each Interest Reset Period will be the rate displayed on the Designated CMT Telerate Rate Page under the caption "Treasury Constant Maturities" under the column for the Designated CMT Maturity Index in the following manner. If the Designated CMT Moneyline Telerate Page is 7051, the Treasury Rate will be the rate on the Constant Maturity Treasury Rate Determination Date. In the event that such rate does not appear on Moneyline Telerate Page 7051, then the Treasury Rate will be the treasury constant maturity rate for the designated CMT maturity index as published in the relevant H.15(519) under the caption "Treasury Constant Maturities." In the event that such rate does not so appear in H.15(519), then the Treasury Rate will be the constant treasury maturity rate on the Constant maturity Treasury Rate Determination Date for the designated CMT maturity index as may then be published by either the Federal Reserve System Board of Governors or the United States Department of the Treasury that the calculation agent determines to be comparable to the rate which would have otherwise been published in H.15(519). If the Designated CMT Moneyline Telerate Page is 7052, the "Treasury Rate" will be the weekly or monthly average, as specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, for the week or the month, as applicable, ended immediately preceding the week or month, as applicable, in which the related Constant Maturity Treasury Rate Determination Date occurs. In the event that such rate does not appear on Moneyline Telerate Page 7052, then the Treasury Rate will be the one-week or one-month, as specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, average of the treasury constant maturity rate for the designated CMT maturity index for the week or month as applicable, preceding the Constant Maturity Treasury Determination Date as published in the relevant H.15(519) under the caption "Treasury Constant Maturities." In the event that such rate does not so appear in H.15(519), then the Treasury Rate will be the one-week or one-month, as specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, average of the constant treasury maturity rate for the designated CMT maturity index as otherwise announced by the Federal Reserve Bank of New York for the week or month, as applicable, ended immediately preceding the week or month, as applicable, in which the Constant Maturity Treasury Rate Determination Date falls. The following procedures will be followed if the Treasury Rate cannot be determined as indicated above. If such information, as applicable, is not so published, then the Calculation Agent will calculate the Treasury Rate on the Constant Maturity Treasury Rate Determination Date as follows which shall be a yield to maturity, based on the arithmetic mean of the secondary market bid prices as of approximately 3:30 p.m., New York City time, on the Constant Maturity Treasury Rate Determination Date of three leading U.S. government securities dealers in The City of New York selected by the Calculation Agent, one of which may be the Agent, from five such dealers selected by the Calculation Agent and eliminating the highest quotation, or in the event of equality, one of the highest, and the lowest quotation, or, in the event of equality, one of the lowest, for United States Treasury Securities ("Treasury Notes"), with an original maturity of approximately the Designated CMT Maturity Index and a remaining term to maturity of not less than such Designated CMT Maturity Index minus one year and in a principal amount that is representative for a single transaction in the securities in that market at that time. If the Calculation Agent is unable to obtain three such Treasury Note quotations, the Treasury Rate on the Constant Maturity Treasury Rate Determination Date will be calculated by the Calculation Agent, and shall be a yield to maturity based on the arithmetic mean of the secondary market offer side prices as of approximately 3:30 p.m., New York City time, on the Constant Maturity Treasury Rate Determination Date of three leading U.S. government securities dealers in 9 the City of New York, one of which may be the Agent, from five such dealers selected by the Calculation Agent and eliminating the highest quotation, or, in the event of equality, one of the highest, and the lowest quotation, or, in the event of equality, one of the lowest, for Treasury Notes with an original maturity of the number of years that is the next highest to the Designated CMT Maturity Index and a remaining maturity closest to the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, and in an amount that is representative for a single transaction in that market at that time. If three or four, and not five, of such dealers are quoting as described above, then the Treasury Rate will be based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of such quotes will be eliminated. However, if fewer than three dealers so selected by the Calculation Agent are quoting as mentioned above, the Treasury Rate determined as of the Constant Maturity Treasury Rate Determination Date will be the Treasury Rate in effect on the Constant Maturity Treasury Rate Determination Date. If two Treasury Notes with an original maturity as described in the third preceding sentence have remaining terms to maturity equally close to the Designated CMT Maturity Index, the Calculation Agent will obtain quotations for the Treasury Note with the shorter remaining term to maturity and will use such quotations to calculate the Treasury Rate as set forth above. "Designated CMT Moneyline Telerate Page" means the display on the Telerate Service, or any successor service on the page specified in the applicable pricing supplement, or any other page as may replace such page on that service, or any successor service, for the purpose of displaying Treasury Constant Maturities as reported in H.15(519). If no such page is specified in the applicable pricing supplement, the Designated CMT Telerate Page shall be 7052, for the most recent week. "Designated CMT Maturity Index" means the original period to maturity of the U.S. Treasury Securities, either one, two, three, five, seven, ten, twenty or thirty years, specified in the applicable pricing supplement with respect to which the Treasury Rate will be calculated. If no such maturity is specified in the applicable pricing supplement, the Designated CMT Maturity Index shall be two years. "The Constant Maturity Treasury Rate Determination Date" shall be the second Business Day prior to the Interest Reset Date for the applicable Interest Reset Period. Determination of Prime Rate Prime Rate Notes will bear interest at the interest rates (calculated with reference to the Prime Rate and the Spread and/or Spread Multiplier, if any) specified in the Prime Rate Notes and in the applicable pricing supplement. The "Prime Rate" for each Interest Reset Period will be determined by the Calculation Agent for such Prime Rate Note as of the second Business Day prior to the Interest Reset Date for such Interest Reset Period (a "Prime Rate Determination Date") and shall be the rate made available and subsequently published on such date in H.15(519) under the heading "Bank Prime Loan." In the event that such rate is not published prior to 3:00 p.m., New York City time, on the Calculation Date (as defined above) pertaining to such Prime Rate Determination Date, then the Prime Rate for such Interest Reset Period shall be the rate published in the H.15 Daily Update under the heading "Bank Prime Loan." In the event that such rate has not been published prior to 3:00 10 p.m., New York City time, on the Calculation Date, then the Prime Rate will be calculated by the Calculation Agent and will be the arithmetic mean of the rates of interest publicly announced by each bank that appears on the Reuters Screen USPRIME1 Page (as defined below) as such bank's prime rate or base lending rate on the Prime Rate Determination Date. If fewer than four such rates appear on the Reuters Screen USPRIME1 Page for the Prime Rate Determination Date, the rate shall be the arithmetic mean of the prime rates quoted on the basis of the actual number of days in the year divided by 360 as of the close of business on the Prime Rate Determination Date by three major banks in The City of New York selected by the Calculation Agent. However, if the banks so selected by the Calculation Agent are not quoting as mentioned in the previous sentence, the Prime Rate will be the Prime Rate in effect on the Prime Rate Determination Date. "Reuters Screen USPRIME1 Page" means the display designated as page "USPRIME1" on the Reuters Monitor Money Rates Service, (or such other page as may replace the USPRIME1 page on that service for the purpose of displaying prime rates or base lending rates of major United States banks). Determination of Eleventh District Cost of Funds Rate Eleventh District Cost of Funds Rate Notes will bear interest at the interest rates (calculated by reference to the Eleventh District Cost of Funds Rate and the Spread and/or Spread Multiplier, if any) specified in the Eleventh District Cost of Funds Rate Notes and in the applicable pricing supplement. The "Eleventh District Cost of Funds Rate," for each Interest Reset Period will be determined by the Calculation Agent for such Eleventh District Cost of Funds Rate Note as of the last working day of the month immediately prior to such Interest Reset Date for such Interest Reset Period on which the Federal Home Loan Bank of San Francisco (the "FHLB of San Francisco") publishes the Eleventh District Cost of Funds Index (as defined below) (the "Eleventh District Cost of Funds Rate Determination Date"), and shall be the rate equal to the monthly weighted average cost of funds for the calendar month preceding such Eleventh District Cost of Funds Rate Determination Date as set forth under the caption "Eleventh District" on Moneyline Telerate (or any successor service) on page 7058 (which page shall include any successor page (as determined by the Calculation Agent)) as of 11:00 a.m., San Francisco time, on such Eleventh District Cost of Funds Rate Determination Date. If such rate does not appear on Telerate page 7058 on any related Eleventh District Cost of Funds Rate Determination Date, the Eleventh District Cost of Funds Rate for such Eleventh District Cost of Funds Rate Determination Date shall be the monthly weighted average cost of funds paid by member institutions of the Eleventh Federal Home Loan Bank District that was most recently announced (the "Eleventh District Cost of Funds Rate Index") by the FHLB of San Francisco as such cost of funds for the calendar month preceding the date of such announcement. If the FHLB of San Francisco fails to announce such rate on or prior to the Eleventh District Cost of Funds Rate Determination Date for the calendar month immediately preceding such date, then the Eleventh District Cost of Funds Rate for such date will be the Eleventh District Cost of Funds Rate in effect on the Eleventh District Cost of Funds Rate Determination Date. Determination of EURIBOR If the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith is EURIBOR, this Note will bear interest for each Interest Reset Period at the interest rate calculated with reference to EURIBOR and the Spread or Spread Multiplier, if 11 any, specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. "EURIBOR" for each Interest Reset Period will be determined by the Calculation Agent as follows. On the second TARGET Business Day prior to the Interest Reset Date for such Interest Reset Period (a "EURIBOR Determination Date"), the Calculation Agent for such EURIBOR Note will determine the offered rates for deposits in Euros as sponsored, calculated and published jointly by the European Banking Federation and ACI -- The Financial Market Association, or any company established by the joint sponsors for purposes of compiling and publishing those rates, for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, which appears on the Designated EURIBOR Page as of 11:00 a.m., Brussels time, on such EURIBOR Determination Date. "Designated EURIBOR Page" means the display designated as page "248" on Telerate (or any successor service or such other page as may replace page "248" on such service), and EURIBOR for such Interest Reset Period will be the relevant offered rates as determined by the Calculation Agent. If EURIBOR cannot be determined as described above the Calculation Agent will determine "EURIBOR" as follows. The Calculation Agent will request the principal Euro-zone (as defined below) office of each of four major banks in the Euro-zone interbank market selected by the Calculation Agent to provide the Calculation Agent with their respective offered quotations for deposits in Euros for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, to prime banks in the Euro-zone interbank market at approximately 11:00 a.m., Brussels time, on the EURIBOR Determination Date, in a principal amount equal to an amount of at least $1,000,000 or its approximate equivalent thereof in Euros that is representative of a single transaction in such market at such time. If two or more such quotations are provided, "EURIBOR" for such Interest Reset Period will be the arithmetic mean of such quotations. If less than two such quotations are provided, "EURIBOR" for such Interest Reset Period will be the arithmetic mean of rates quoted by four major banks in the Euro-zone selected by the Calculation Agent for such EURIBOR Note at approximately 11:00 a.m., Brussels time, on the EURIBOR Determination Date for loans in Euros to leading European banks for the period of the Index Maturity specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, commencing on such Interest Reset Date, in a principal amount equal to an amount of at least $1,000,000 or the approximate equivalent thereof in Euros that is representative of a single transaction in such market at such time; provided, however, that if the banks so selected a aforesaid by the Calculation Agent are not quoting rates as mentioned in this sentence, "EURIBOR" for such Interest Reset Period will be same as EURIBOR for the immediately preceding Interest Reset Period (or, if there was no such Interest Reset Period, the EURIBOR Rate will be the Initial Interest Rate). "Euro-zone" means the region comprised of member states of the European Union that adopt the single currency in accordance with the Treaty establishing the European Community, as amended by the Treaty on European Union. Inverse Floating Rate Notes If this Note is designated as an Inverse Floating Rate Note on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Inverse Floating Rate shall be equal to (i) in the case of the period, if any, commencing on the Original Issue Date (or such other date which may be specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as the date on which this Note shall begin to accrue interest), up to the first Interest Reset 12 Date, the Initial Fixed Interest Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, and (ii) in the case of each period commencing on an Interest Reset Date, the Reset Fixed Reference Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith minus the interest rate determined by reference to the Base Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, as adjusted by the Spread and/or Spread Multiplier, if any, as determined in accordance with the provisions hereof; provided, however, that (x) the interest rate thereon will not be less than zero and (y) the interest rate in effect for the ten days immediately prior to the date of Stated Maturity will be the rate in effect on the tenth day preceding such date. Floating Rate / Fixed Rate Notes If this Note is designated as a Floating Rate / Fixed Rate Note, this Note will be a Floating Rate note for a specified portion of its term and a Fixed Rate Note for the remainder of its term, in which event the interest rate on this Note will be determined as provided herein as if it were a Floating Rate Note and a Fixed Rate Note hereunder for each such respective period, all as described herein and in the applicable pricing supplement. Subsequent Interest Periods If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Spread, Spread Multiplier or method of calculation of the Interest Rate on this Note may be reset by the Company on the date or dates specified on the face hereof or in the pricing supplement attached hereto or delivered herewith (each an "Optional Reset Date"). The Company may reset the Spread, Spread Multiplier or method of calculation of the Interest Rate Interest Rate by notifying the Trustee for this Note at least 45 but not more than 60 days prior to each Optional Reset Date. Not later than 40 days prior to each Optional Reset Date, the Trustee shall provide notice (the "Reset Notice"), in accordance with "Notices" below, indicating whether the Company has elected to reset the Spread, Spread Multiplier or method of calculation of the Interest Rate, and if so, (i) such new Spread, Spread Multiplier or method of calculation of the Interest Rate and (ii) the provisions, if any, for redemption during the period from such Optional Reset Date to the next Optional Reset Date, or, if there is no such next Optional Reset Date, to the Stated Maturity of this Note (each such period, a "Subsequent Interest Period"), including the date or dates on which or the period or periods during which and the price or prices at which such redemption may occur during the Subsequent Interest Period. Upon the transmittal by the Trustee of a Reset Notice to the Holder of a Note, such new Spread, Spread Multiplier or method of calculation of the Interest Rate shall take effect automatically. Except as modified by the Reset Notice and as described below, such Note will have the same terms as prior to the transmittal of such Reset Notice. Notwithstanding the foregoing, not later than 20 days prior to the Optional Reset Date, the Company may, at its option, revoke the Spread or Spread Multiplier provided for in the Reset Notice and establish a higher Spread or Spread Multiplier for the Subsequent Interest Period by causing the Trustee to provide notice of such higher Spread or Spread Multiplier, to the Holder of this Note. Such notice shall be irrevocable. All Bearer Notes with respect to which the Spread or Spread Multiplier is reset on an Optional Reset Date will bear such higher Spread or Spread Multiplier. The Holder of this Note will have the option to elect repayment of the Note by the Company on each Optional Reset Date at a price equal to the principal amount hereof, plus interest accrued to such Optional Reset Date. In order to obtain repayment on an Optional Reset Date, the Holder must follow the procedures set forth below for optional repayment, except that the period for 13 delivery or notification to the Paying Agent shall be at least 25 but not more than 35 days prior to such Optional Reset Date, and except that if the Holder has tendered this Note for repayment pursuant to a Reset Notice, the Holder may, by written notice to the Paying Agent, revoke such tender for repayment until the close of business on the tenth day before the Optional Reset Date. Indexed Notes If this Note is an Indexed Principal Note, then certain or all interest payments, in the case of an Indexed Rate Note, and/or the principal amount payable at Stated Maturity or earlier redemption or retirement, in the case of an Indexed Principal Note, is determined by reference to the amount designated on the face hereof or in the pricing supplement attached hereto or delivered herewith as the Face Amount of this Note and by reference to the Index as described on the face hereof or in the pricing supplement attached hereto or delivered herewith. If this Note is an Indexed Principal Note, the amount of any interest payment will be determined by reference to the Face Amount described on the face hereof or in the pricing supplement attached hereto or delivered herewith. If this Note is an Indexed Principal Note, the principal amount payable at Stated Maturity or any earlier redemption or repayment of this Note may be different from the Face Amount. If a third party is appointed to calculate or announce the Index for a particular Indexed Note and the third party either suspends the calculation or announcement of such Index or changes the basis upon which such Index is calculated in a manner that is inconsistent with the applicable pricing supplement, then the Company will select another third party to calculate or announce the Index. The agent or another affiliate of the Company may be either the original or successor third party selected by the Company. If for any reason such Index cannot be calculated on the same basis and subject to the same conditions and controls as applied to the original third party, then the indexed interest payments, if any, or any indexed principal amount of this Note shall be calculated in the manner set forth in the applicable pricing supplement. Any determination of such third party shall in the absence of manifest error be binding on all parties. Payments in Currencies other than the Specified Currency Except as set forth below, if any payment in respect hereof is required to be made in a specified currency other than U.S. dollars and such currency is unavailable due to the imposition of exchange controls or other circumstances beyond the Company's control or is no longer used by the government of the country issuing such currency or for the settlement of transactions by public institutions of or within the international banking community, then such payment shall be made in U.S. dollars until such currency is again available or so used. The amount so payable in such foreign currency shall be converted into U.S. dollars on the basis of the most recently available Market Exchange Rate for such currency or as otherwise indicated on the face hereof or in the pricing supplement attached hereto or delivered herewith. Any payment made under such circumstances in U.S. dollars will not constitute an Event of Default under the Indenture. In the event of an official redenomination of the Specified Currency of this Note (other than as a result of European Monetary Union, but including, without limitation, an official redenomination of any such Specified Currency that is a composite currency), the obligations of the Company with respect to payments on this Note shall, in all cases, be deemed immediately following such redenomination to provide for the payment of that amount of redenominated currency representing the amount of such obligations immediately before such redenomination. This Note does not provide for any adjustment to any amount payable under this Note as a result of (i) any 14 change in the value of the Specified Currency hereof relative to any other currency due solely to fluctuations in exchange rates or (ii) any redenomination of any component currency of any composite currency (unless such composite currency is itself officially redenominated). Dual Currency Notes If this Note is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as a Dual Currency Note, the Company may have a one time option of making all payments of principal, premium, if any, and interest on all Dual Currency Notes issued on the same day and having the same terms (a "Tranche"), which payments would otherwise be made in the Specified Currency of such Notes, in an optional currency (the "Optional Payment Currency"). Such option will be exercisable in whole but not in part on an "Option Election Date," which will be any one of the dates specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. If the Company makes such an election, the amount payable in the Optional Payment Currency shall be determined using the Designated Exchange Rate specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. If such election is made, notice of such election shall be provided in accordance with "Notices" below within two Business Days of the Option Election Date and shall state (i) the first date, whether an Interest Payment Date and/or Stated Maturity, in which scheduled payments in the Optional Payment Currency will be made and (ii) the Designated Exchange Rate. Any such notice by the Company, once given, may not be withdrawn. The equivalent value in the Specified Currency of payments made after such an election may be less, at the then current exchange rate, than if the Company had made such payment in the Specified Currency. Renewable Notes If this Note is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith as a Renewable Note, this Note will mature on an Interest Payment Date occurring in or prior to the twelfth month following the Original Issue Date of this Note (the "Initial Maturity Date") unless the term of all or any portion of this Note is renewed in accordance with the following procedures: On the Interest Payment Date occurring in the sixth month (unless a different interval (the "Special Election Interval") is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith) prior to the Initial Maturity Date of this Note (the "Initial Renewal Date") and on the Interest Payment Date occurring in each sixth month (or in the last month of each Special Election Interval) after such Initial Renewal Date (each, together with the Initial Renewal Date, a "Renewal Date"), the term of this Note may be extended to the Interest Payment Date occurring in the twelfth month (or, if a Special Election Interval is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the last month in a period equal to twice the Special Election Interval) after such Renewal Date, if the Holder of this Note elects to extend the term of this Note or any portion thereof as described below. If the Holder does not elect to extend the term of any portion of the principal amount of this Note during the specified period prior to any Renewal Date, such portion will become due and payable on the Interest Payment Date occurring in the sixth month (or the last month in the Special Election Interval) after such Renewal Date (the "New Maturity Date"). 15 The Holder may elect to renew the term of this Note, or if so specified, any portion thereof, by delivering a notice to such effect to any duly appointed paying agent not less than 15 nor more than 30 days prior to such Renewal Date, unless another period is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Such election will be irrevocable and will be binding upon each subsequent Holder of this Note. An election to renew the term of this Note may be exercised with respect to less than the entire principal amount of this Note only if so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith and then only in such principal amount, or any integral multiple in excess thereof, as is specified on the face hereof or in the pricing supplement attached hereto or delivered herewith. Notwithstanding the foregoing, the term of this Note may not be extended beyond the Stated Maturity specified for this Note on the face hereof or in the pricing supplement attached hereto or delivered herewith. If the Holder does not elect to renew the term, this Note must be presented to any duly appointed paying agent and, as soon as practicable following receipt of such Note such paying agent shall issue in exchange therefor in the name of such Holder (i) a Note, in a principal amount equal to the principal amount of such exchanged Note for which no election to renew the term thereof was exercised, with terms identical to those specified on such exchanged Note (except that such Note shall have a fixed, nonrenewable Stated Maturity on the New Maturity Date) and (ii) if an election to renew is made with respect to less than the full principal amount of such Holder's Note, such paying agent shall issue in exchange for such Note in the name of such Holder a replacement Renewable Note, in a principal amount equal to the principal amount of such exchanged Note for which the election to renew was made, with terms otherwise identical to the exchanged Note. Extension of Stated Maturity If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Stated Maturity of this Note may be extended at the option of the Company for one or more periods of whole years specified on the face hereof or in the pricing supplement attached hereto or delivered herewith (each an "Extension Period") from one to five years up to but not beyond the date (the "Final Maturity") set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith. The Company may exercise such option by notifying the Trustee for this Note at least 45 but not more than 60 days prior to the original Stated Maturity of this Note. If the Company exercises such option, the Trustee will provide to the Holder of this Note not later than 40 days prior to the original Stated Maturity notice (the "Extension Notice") in accordance with "Notices" below. The Extension Notice will set forth (i) the election of the Company to extend the Stated Maturity, (ii) the new Stated Maturity, (iii) in the case of a Floating Rate Note, the Spread, Spread Multiplier or method of calculation applicable to such Extension Period, and (iv) the provisions, if any, for redemption during such Extension Period including the date or dates on which or the period or periods during which and the price or prices at which such redemption may occur during the Extension Period. Upon the provision by the Trustee of an Extension Notice to the Holder hereof, the Stated Maturity of this Note shall be extended automatically, and, except as modified by the Extension Notice and as described in the next paragraph, this Note will have the same terms as prior to the provision of such Notice. Notwithstanding the foregoing, not later than 20 days prior to the original Stated Maturity of this Note, the Company may, at its option, revoke the Spread or Spread Multiplier provided for in the Extension Notice and establish a higher Spread or Spread Multiplier for the Extension Period by causing the Trustee to provide notice of such higher interest rate or higher Spread or Spread Multiplier, as the case may be, to the Holder hereof in accordance with "Notices" 16 below. Such notice shall be irrevocable. All Notes with respect to which the Stated Maturity is extended will bear such higher Spread or Spread Multiplier for the Extension Period, whether or not tendered for repayment. If the Company extends the Stated Maturity of this Note, the Holder will have the option to elect repayment of this Note by the Company on the original Stated Maturity at a price equal to the principal amount hereof, plus interest accrued to such date. In order to obtain repayment on such original Stated Maturity once the Company has extended the Stated Maturity hereof, the Holder must follow the procedures set forth below for optional repayment, except that the period for delivery or notification to the Paying Agent shall be at least 25 but not more than 35 days before the original Stated Maturity, and except that if the Holder has tendered this Note for repayment pursuant to an Extension Notice, the Holder may, by written notice to the Paying Agent, revoke such tender for repayment until the close of business on the tenth calendar day before the original Stated Maturity. Optional Redemption, Repayment and Repurchase If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, the Company may, at its option, redeem this Note in whole or in part, on the date or dates (each an "Optional Redemption Date") specified herein, at the price (the "Redemption Price") (together with accrued interest to such Optional Redemption Date) specified herein. If required under the Federal Reserve Capital Adequacy Rules, the Company will obtain the prior approval of the Federal Reserve before exercising its redemption rights. If the Company elects to exercise such option with respect to this Note, at least 30 days prior to the date of redemption, such Trustee shall provide notice of such redemption to the Holder hereof in accordance with "Notices" below. In the event of redemption of this Note in part only, a new Note or Notes for the unredeemed portion hereof shall be issued to the Holder hereof upon the cancellation hereof. Notes redeemed prior to Stated Maturity must be presented for payment together with all unmatured Coupons, if any, appertaining thereto, failing which the amount of any missing unmatured Coupon will be deducted from the sum due for payment. If so specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, this Note will be repayable prior to Stated Maturity at the option of the Holder on the Optional Repayment Dates shown on the face hereof or in the pricing supplement attached hereto or delivered herewith at the Optional Repayment Prices shown on the face hereof or in the pricing supplement attached hereto or delivered herewith, together with accrued interest to the date of repayment. Notes that are to be repaid prior to Stated Maturity must be presented for payment together with all unmatured Coupons, if any, appertaining thereto, failing which the amount of any missing unmatured Coupon will be deducted from the sum due for payment. In order for this Note to be repaid, the Principal Paying Agent must receive this Note at least 30 but not more than 45 days prior to an Optional Repayment Date. Any tender of this Note for repayment (except pursuant to a Reset Notice or an Extension Notice) shall be irrevocable. The repayment option may be exercised by the Holder of this Note for less than the entire principal amount of the Note; provided that the principal amount of this Note remaining outstanding after repayment is an authorized denomination. Upon such partial repayment, this Note shall be canceled and a new Note or Notes for the remaining principal amount hereof shall be issued in the name of the Holder of this Note. 17 Unless otherwise specified on the face hereof or in the pricing supplement attached hereto or delivered herewith, this Note will not be subject to any sinking fund. Notwithstanding anything herein to the contrary, if this Note is a Discount Note, the amount payable in the event of redemption or repayment prior to the Stated Maturity hereof (other than pursuant to an optional redemption by the Company at a stated Redemption Price), in lieu of the principal amount due at the Stated Maturity hereof, shall be the Amortized Face Amount of this Note as of the redemption date or the date of repayment, as the case may be. The Amortized Face Amount of this Note on any date shall be the amount equal to (i) the Issue Price set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith plus (ii) that portion of the difference between such Issue Price and the stated principal amount of such Note that has accrued by such date at (x) the Bond Yield to Maturity set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith or (y) if so specified, the Bond Yield to Call set forth on the face hereof or in the pricing supplement attached hereto or delivered herewith (computed in each case in accordance with generally accepted United States bond yield computation principles); provided, however, that in no event shall the Amortized Face Amount of a Note exceed its stated principal amount. The Bond Yield to Call listed on the face of this Note or in the pricing supplement attached hereto or delivered herewith shall be computed on the basis of the first occurring Optional Redemption Date with respect to such Note and the amount payable on such Optional Redemption Date. In the event that such Note is not redeemed on such first occurring Optional Redemption Date, the Bond Yield to Call with respect to such Note shall be recomputed on such Optional Redemption Date on the basis of the next occurring Optional Redemption Date and the amount payable on such Optional Redemption Date, and shall continue to be so recomputed on each succeeding Optional Redemption Date until the Note is so redeemed. Tax Redemption The Bearer Notes of a series may be redeemed at the option of the Company in whole, but not in part, at any time on giving at least 30 but not more than 60 days' notice in accordance with "Notices" below (which notice shall be irrevocable), at the respective Redemption Prices thereof, if the Company has or will become obligated to pay additional interest on such Notes as described in the following paragraph as a result of any change in, or amendment to, the laws (or any regulations or rulings promulgated thereunder) of the United States or any political subdivision or taxing authority thereof or therein, or any change in the application or official interpretation of such laws, regulations or rulings, which change or amendment becomes effective on or after their respective Original Issue Dates, and such obligation cannot be avoided by the Company taking reasonable measures available to it; provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Company would be obligated to pay such additional interest were a payment in respect of such Notes then due. Prior to the publication of any notice of redemption pursuant to this paragraph, the Company shall deliver to the Trustee for the Notes to be redeemed a certificate stating that the Company is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Company so to redeem have occurred, and an opinion of independent counsel to the effect that the Company has or will become obligated to pay such additional interest as a result of such change or amendment. Payment of Additional Interest The Company will, subject to the exceptions and limitations set forth below, pay as additional interest to the Holder of this Note or any Coupon that is a United States Alien (as defined 18 below) such amounts as may be necessary so that every net payment on this Note or such Coupon, after deduction or withholding for or on account of any present or future tax, assessment or other governmental charge imposed upon or as a result of such payment by the United States (or any political subdivision or taxing authority thereof or therein), will not be less than the amount provided in this Note or such Coupon to be then due and payable. However, the Company will not be required to make any such payment of additional interest to such Holder for or an account of: (a) any tax, assessment or other governmental charge that would not have been imposed but for (i) the existence of any present or former connection between such Holder (or between a fiduciary, settlor or beneficiary of, or a Person holding a power over, such Holder, if such Holder is an estate or a trust, or a member or shareholder of such Holder, if such Holder is a partnership or a corporation) and the United States, including, without limitation, such Holder (or such fiduciary, settlor, beneficiary, Person holding a power, member or shareholder) being or having been a citizen or resident thereof or being or having been engaged in trade or business or present therein or having or having had a permanent establishment therein or (ii) such Holder's past or present status as a passive foreign investment company, a personal holding company, foreign personal holding company, a controlled foreign corporation for United States tax purposes or private foundation or other tax-exempt organization with respect to the United States or as a corporation that accumulates earnings to avoid United States federal income tax; (b) any estate, inheritance, gift, sales, transfer or personal property tax or any similar tax, assessment or other governmental charge; (c) any tax, assessment or other governmental charge that would not have been imposed but for the presentation by the Holder of this Note or such Coupon for payment more than 15 days after the date on which such payment became due and payable or on which payment thereof was duly provided for, whichever occurred later; (d) any tax, assessment or other governmental charge that is payable otherwise than by deduction or withholding from a payment on this Note or such Coupon; (e) any tax, assessment or other governmental charge required to be deducted or withheld by any Paying Agent from a payment on this Note or such Coupon, if such payment can be made without such deduction or withholding by any other Paying Agent; (f) any tax, assessment or other governmental charge imposed on a Holder that actually or constructively owns ten percent or more of the combined voting power of all classes of stock of the Company or is a controlled foreign corporation related to the Company through stock ownership; nor shall such additional interest be paid with respect to a payment on this Note or such Coupon to a Holder that is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner would not have been entitled to the additional interest had such beneficiary, settlor, member or beneficial owner been the Holder of this Note or such Coupon. The term "United States Alien" means any person who, for United States federal income tax purposes, is a foreign corporation, a nonresident alien individual, a nonresident alien fiduciary of a foreign estate or trust, or a foreign partnership one or more of the members of which is, 19 for United States federal income tax purposes, a foreign corporation, a nonresident alien individual or a nonresident alien fiduciary of a foreign estate or trust. Paying Agents The Company has initially appointed as its Paying Agents for Bearer Notes of this Series the offices listed below: Principal Paying Agent: Citibank, N.A. 5 Carmelite Street London, England EC4Y OPA Paying Agent: Kredietbank S.A. Luxembourgeoise 43 Boulevard Royal Luxembourg Luxembourg City 2955 The Company reserves the right at any time to vary or terminate the appointment of any Paying Agent and to appoint additional or other Paying Agents and to approve any change in the office through which any Paying Agent acts, provided that there will at all times be a Paying Agent (which may be the Trustee) in at least one city in Europe, which, so long as Bearer Notes are listed on the Luxembourg Stock Exchange and the rules of that exchange shall so require, shall include Luxembourg. Notice of any such termination or appointment and of any changes in the specified offices of the Trustee or any Paying Agent will be given to the Holder hereof as described below. Notices All notices to Holders of this Note will be deemed to have been duly given if published on two separate Business Days in a leading London daily newspaper (which is expected to be the Financial Times) and, with respect to any series of Bearer Notes that may be listed on the Luxembourg Stock Exchange, if such exchange so requires, in Luxembourg in a newspaper of general circulation in Luxembourg (which is expected to be the Luxemburger Wort). Such notices shall be deemed to have been given on the date of the first such publication. The Company may at any time purchase Registered Notes at any price in the open market or otherwise. Registered Notes so purchased by the Company may, at the discretion of the Company, be held or resold or surrendered to the Trustee for such Notes for cancellation. Other Terms As provided in the Indenture and subject to certain limitations therein set forth, this Note is exchangeable for a like aggregate principal amount of Registered Notes of different authorized denominations, as requested by the Person surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. 20 If an Event of Default with respect to the Debt Securities of this series shall have occurred and be continuing, the principal of all the Debt Securities of this series may be declared due and payable in this manner and with the effect provided in the Indenture. In case this Note or any Coupon shall at any time become mutilated, destroyed, stolen or lost, it may be replaced at the specified office of the Principal Paying Agent in London; or, with respect to any series of Bearer Notes that are listed on the Luxembourg Stock Exchange, at the specified office of the Paying Agent in Luxembourg, upon payment by the claimant of such expenses as may be incurred in connection therewith and, in the case of destruction, theft or loss, on such terms as to evidence and indemnity as the Company or the Trustee may reasonably require. Mutilated or defaced Bearer Notes or Coupons must be surrendered before replacements will be issued. All monies paid by the Company to a Trustee or Paying Agent for the payment of principal of or any premium or interest on any Bearer Note or for the payment of any Coupon which remain unclaimed at the end of two years after such payments shall have become due and payable will be repaid to the Company, at its written request, and the Holder of such Note or Coupon will thereafter look only to the Company for payment, such payment to be made only outside the United States. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Debt Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of Debt Securities at the time outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Debt Securities of any series at the time outstanding, on behalf of the Holders of all the Debt Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Debt Security shall be conclusive and binding upon such Holder and upon all future Holders of this Debt Security and of any Debt Security issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon the Debt Security. Holders of Debt Securities may not enforce their rights pursuant to the Indenture or the Note except as provided in the Indenture. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed. The Company may, without the consent of the Holders of the Notes, consolidate with, merge into, or transfer substantially all of its assets to, a corporation, provided that the successor corporation assumes all obligations of the Company under the Notes and certain other conditions are met. Except as provided above, the obligation to pay the principal hereof (and premium, if any) and interest hereon in the designated currency of payment is of the essence. To the fullest extent possible under applicable law, judgments in respect of this Note shall be given in such currency. The obligation of the Company to make such payments in the designated currency of payment shall, notwithstanding any payment in any other currency (whether pursuant to a judgment 21 or otherwise), be discharged only to the extent of the amount in the designated currency of payment that the Holder of this Note may, in accordance with normal banking procedures, purchase with the sum paid in such other currency (after any premium and cost of exchange) on the business day in the country of issue of the designated currency of payment or in the international banking community (in the case of a composite currency) immediately following the day on which such Holder receives such payment. If the amount in the designated currency of payment that may be so purchased is for any reason less than the amount originally due, the Company shall, as a separate and independent obligation, pay such additional amounts in the designated currency of payment as may be necessary to compensate for any such shortfall. This Note shall be deemed to be a contract made and to be performed solely in the State of New York and for all purposes be governed by, and construed in accordance with, the laws of said State without regard to the conflicts of law rules of said State. All terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in the Indenture. 22 SCHEDULE OF ISSUANCES, EXCHANGES AND AGGREGATE PRINCIPAL AMOUNT The following issuances and exchanges of a part of this Note have been made, and the aggregate principal amount of Bearer Notes represented by this Note at any time is as shown in the last entry of Column III hereof unless one or more entries have been made in Column IV hereof reflecting exchanges for individual Bearer Notes, in which event such aggregate principal amount is as shown in the last entry of Column V hereof.
I. II. III. IV. V. VI. Aggregate Principal Principal Aggregate Amount Amount Notation Settlement Principal Principal Exchange Remaining Made on Date or Amount Amount for Individual After behalf of the Exchanged Issued Issued Bearer Notes Exchange Trustee - ---------- --------- --------- -------------- --------- ------------- - ---------- --------- --------- -------------- --------- ------------- - ---------- --------- --------- -------------- --------- ------------- - ---------- --------- --------- -------------- --------- ------------- - ---------- --------- --------- -------------- --------- ------------- - ---------- --------- --------- -------------- --------- ------------- - ---------- --------- --------- -------------- --------- ------------- - ---------- --------- --------- -------------- --------- ------------- - ---------- --------- --------- -------------- --------- ------------- - ---------- --------- --------- -------------- --------- ------------- - ---------- --------- --------- -------------- --------- ------------- - ---------- --------- --------- -------------- --------- -------------
23 SCHEDULE OF INTEREST PAYMENTS The following payments of interest in respect of this Note have been made.
Notation Made Date of Interest on behalf of the Payment Interest Paid Trustee - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ---------------- - ---------------- ------------- ----------------
24 EX-4.GG 10 x99885s3exv4wgg.txt FORM OF RETAIL MEDIUM-TERM GLOBAL NOTES, SERIES F EXHIBIT 4(gg) [DTC LOGO] MEDIUM TERM NOTE - MASTER NOTE _____________________, 2004 (Date of Issuance) CITIGROUP GLOBAL MARKETS HOLDINGS INC. ("Issuer"), a corporation organized and existing under the laws of the State of NEW YORK, for value received, hereby promises to pay to Cede & Co. or its registered assigns: (i) on each principal payment date, including each amortization date, redemption date, repayment date, maturity date, and extended maturity date, as applicable, of each obligation identified on the records of Issuer (which records are maintained by CITIBANK, N. A. ("Paying Agent")) as being evidenced by this Master Note, the principal amount then due and payable for each such obligation, and (ii) on each interest payment date, if any, the interest then due and payable on the principal amount for each such obligation. Payment shall be made by wire transfer of United States dollars to the registered owner, or in immediately available funds or the equivalent to a party as authorized by the registered owner and in the currency other than United States dollars as provided for in each such obligation, by Paying Agent without the necessity of presentation and surrender of this Master Note. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS MASTER NOTE SET FORTH ON THE REVERSE HEREOF AND TO THE TERMS OF THE PROSPECTUS, PROSPECTUS SUPPLEMENT AND PRICING SUPPLEMENT(S), WHICH ARE INCORPORATED HEREIN BY REFERENCE. This Master Note is a valid and binding obligation of Issuer. IN WITNESS WHEREOF, Issuer has caused this instrument to be duly executed under its corporate seal. ATTEST: CITIGROUP GLOBAL MARKETS HOLDINGS INC. (Issuer) _____________________________________ By: ______________________________________ (Signature) (Authorized Signature) [Seal] JPMORGAN CHASE BANK (Trustee) By: ______________________________________ (Authorized Signature) This Master Note evidences indebtedness of Issuer of a single Series F (Series Designator) and Rank senior and are designated RETAIL, MEDIUM-TERM NOTES, SERIES F, DUE NINE (Secured/Unsecured/Senior/Junior/Subordinated/Unsubordinated) OR MORE FROM THE DATE OF ISSUE (the "Debt Obligations"), all issued or to be issued under and pursuant to an Indenture dated as of December 1, 1988, as amended (the "Indenture"), duly executed and delivered by Issuer to JPMORGAN CHASE BANK, as SUCCESSOR trustee ("Trustee"), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, duties, and immunities thereunder of Trustee and the rights thereunder of the holders of the Debt Obligations. As provided in the Indenture, the Debt Obligations may mature at different times, may bear interest, if any, at different rates, may be subject to different redemption and repayment provisions, if any, may be subject to different sinking, purchase, or analogous funds, if any, may be subject to different covenants and events of default, and may otherwise vary as in the Indenture provided or permitted. The Debt Obligations aggregated with any other indebtedness of Issuer of this Series are limited (except as provided in the Indenture) to the principal amount of $5,000,000,000 designated as the Medium-Term Notes of Issuer Due 9 Months OR MORE From Date of Issue. No reference herein to the Indenture and no provision of this Master Note or of the Indenture shall alter or impair the obligation of Issuer, which is absolute and unconditional, to pay the principal of, premium, if any, and interest, if any, on each Debt Obligation at the times, places, and rates, and in the coin or currency, identified on the records of Issuer. At the request of the registered owner, Issuer shall promptly issue and deliver one or more separate note certificates evidencing each Debt Obligation evidenced by this Master Note. As of the date any such note certificate or certificates are issued, the Debt Obligations which are evidenced thereby shall no longer be evidenced by this Master Note. FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto ___________________________________________________________________________ (Name, Address, and Taxpayer Identification Number of Assignee) the Master Note and all rights thereunder, hereby irrevocably constituting and appointing ______________________ attorney to transfer said Master Note on the books of Issuer with full power of substitution in the premises. ____________________________________ Dated: (Signature) Signature(s) Guaranteed: NOTICE: The signature on this assignment must correspond with the name as written upon the face of this Master Note, in every particular, without alteration or enlargement or any change whatsoever. ================================================================================ Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. CITIGROUP GLOBAL MARKETS HOLDINGS INC. RIDER TO MASTER NOTE DATED___________, 2004 RETAIL MEDIUM-TERM NOTE, SERIES F This rider forms a part of and is incorporated into the Master Note dated___________, 2004 of Citigroup Global Markets Holdings Inc. (the "Company") registered in the name of Cede & Co., or its registered assigns, evidencing the Company's Retail Medium-Term Notes, Series F (the "Notes"). REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF SUCH MASTER NOTE (TOGETHER WITH THIS RIDER, HEREIN REFERRED TO AS THIS "MASTER NOTE") SET FORTH IN THE RECORDS OF THE COMPANY MAINTAINED BY THE TRUSTEE, WHICH RECORDS CONSIST OF THE PRICING SUPPLEMENT(S) TO THE PROSPECTUS SUPPLEMENT DATED __________, 2004 AND PROSPECTUS DATED________, 2004 RELATING TO EACH ISSUANCE OF NOTES, AS FILED BY THE COMPANY WITH THE SECURITIES AND EXCHANGE COMMISSION. SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH HEREIN. THIS MASTER NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (THE "DEPOSITORY") OR A NOMINEE THEREOF. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO SUCH DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. OPTION TO ELECT REPAYMENT The undersigned hereby irrevocably requests and instructs the Company to repay $__________ principal amount of the Notes, pursuant to their terms, on the "Optional Repayment Date" first occurring after the date of receipt of this Option to Elect Repayment as specified below, together with interest thereon accrued to the date or repayment, to the undersigned at: ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ (Please Print or Type Name and Address of the Undersigned) and to issue to the undersigned, pursuant to the terms of the Indenture, new Notes representing the remaining principal amount of Notes not repaid. For this Option to Elect Repayment to be effective, the Option to Elect Repayment duly completed must be received by the Paying Agent and the Trustee in the Borough of Manhattan, the City and State of New York, located initially at 111 Wall Street, 15th Floor, New York, New York 10005 and at 153 W. 51st Street, New York, New York 10019, respectively, at least 30 days but not more than 60 days prior to an "Optional Repayment Date." Dated: Signature: _____________________________________________________ Note: The signature to this Option to Elect Repayment must correspond with the name as written upon the face of the within Note in every particular without alteration or enlargement or any change whatsoever. EX-4.OO 11 x99885s3exv4woo.txt FORM OF INDENTURE Exhibit 4(oo) ================================================================================ CITIGROUP GLOBAL MARKETS HOLDINGS INC. TO JPMORGAN CHASE BANK Trustee -------------- INDENTURE Dated as of _____________, 2004 -------------- Providing for the issuance of Junior Subordinated Debt Securities ================================================================================ TABLE OF CONTENTS
PAGE RECITALS OF THE COMPANY..................................................................... 1 ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.................. 1 Section 1.1 Definitions............................................................. 1 Section 1.2 Compliance Certificates and Opinions.................................... 9 Section 1.3 Form of Documents Delivered to Trustee.................................. 9 Section 1.4 Acts of Holders; Record Date............................................10 Section 1.5 Notices, Etc., to Trustee and Company...................................11 Section 1.6 Notice to Holders; Waiver...............................................11 Section 1.7 Conflict with Trust Indenture Act.......................................11 Section 1.8 Effect of Headings and Table of Contents................................12 Section 1.9 Successors and Assigns..................................................12 Section 1.10 Separability Clause.....................................................12 Section 1.11 Benefits of Indenture...................................................12 Section 1.12 Governing Law...........................................................12 Section 1.13 Legal Holidays..........................................................12 Section 1.14 Tax Characterization....................................................12 ARTICLE II SECURITY FORMS...........................................................13 Section 2.1 Forms Generally.........................................................13 Section 2.2 Form of Face of Security................................................13 Section 2.3 Form of Reverse of Security.............................................16 Section 2.4 Form of Trustee's Certificate of Authentication.........................20 ARTICLE III THE SECURITIES...........................................................20 Section 3.1 Amount Unlimited; Issuable in Series....................................20 Section 3.2 Denominations...........................................................22 Section 3.3 Execution, Authentication, Delivery and Dating..........................22 Section 3.4 Temporary Securities....................................................23 Section 3.5 Registration, Registration of Transfer and Exchange.....................23 Section 3.6 Mutilated, Destroyed, Lost and Stolen Securities........................24 Section 3.7 Payment of Interest; Interest Rights Preserved..........................25 Section 3.8 Persons Deemed Owners...................................................27 Section 3.9 Cancellation............................................................27 Section 3.10 Interest................................................................27 Section 3.11 Form and Payment........................................................28 Section 3.12 Global Securities.......................................................28 ARTICLE IV SATISFACTION AND DISCHARGE; DEFEASANCE...................................30 Section 4.1 Satisfaction and Discharge of Indenture.................................30 Section 4.2 Defeasance and Discharge................................................31 Section 4.3 Covenant Defeasance.....................................................32 Section 4.4 Conditions to Defeasance or Covenant Defeasance.........................32
i TABLE OF CONTENTS (continued)
PAGE Section 4.5 Application of Trust Money..............................................33 Section 4.6 Indemnity for U.S. Government Obligations...............................34 Section 4.7 Reinstatement...........................................................34 ARTICLE V REMEDIES.................................................................34 Section 5.1 Events of Default.......................................................34 Section 5.2 Acceleration of Maturity................................................35 Section 5.3 Collection of Indebtedness and Suits for Enforcement by Trustee.........36 Section 5.4 Trustee to File Claims As Attorney-In-Fact..............................36 Section 5.5 Application of Money Collected..........................................37 Section 5.6 Control by Holders; Waiver of Past Default..............................38 Section 5.7 Limitation on Suits; Default............................................38 Section 5.8 Costs and Attorneys' Fees in Legal Proceedings..........................40 Section 5.9 Remedies Cumulative.....................................................40 Section 5.10 Waiver of Stay or Extension Laws........................................41 ARTICLE VI THE TRUSTEE..............................................................41 Section 6.1 Certain Duties and Responsibilities.....................................41 Section 6.2 Notice of Defaults......................................................42 Section 6.3 Certain Rights of Trustee...............................................43 Section 6.4 Not Responsible for Recitals or Issuance of Securities..................44 Section 6.5 May Hold Securities.....................................................44 Section 6.6 Money Held in Trust.....................................................44 Section 6.7 Compensation and Reimbursement..........................................44 Section 6.8 Disqualification; Conflicting Interests.................................45 Section 6.9 Corporate Trustee Required; Eligibility.................................45 Section 6.10 Resignation and Removal; Appointment of Successor.......................46 Section 6.11 Acceptance of Appointment by Successor..................................47 Section 6.12 Merger, Conversion, Consolidation or Succession to Business.............48 Section 6.13 Preferential Collection of Claims Against Company.......................48 Section 6.14 Appointment of Authenticating Agent.....................................49 ARTICLE VII HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY.........................51 Section 7.1 Company to Furnish Trustee Names and Addresses of Holders...............51 Section 7.2 Preservation of Information; Communications to Holders..................51 Section 7.3 Reports by Trustee......................................................51 Section 7.4 Reports by Company......................................................52
ii TABLE OF CONTENTS (continued)
PAGE ARTICLE VIII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE.....................53 Section 8.1 Company May Consolidate, Etc., Only on Certain Terms....................53 Section 8.2 Successor Corporation Substituted.......................................54 ARTICLE IX SUPPLEMENTAL INDENTURES..................................................54 Section 9.1 Supplemental Indentures Without Consent of Holders......................54 Section 9.2 Supplemental Indentures with Consent of Holders.........................55 Section 9.3 Execution of Supplemental Indentures....................................56 Section 9.4 Effect of Supplemental Indentures.......................................57 Section 9.5 Conformity with Trust Indenture Act.....................................57 Section 9.6 Reference in Securities to Supplemental Indentures......................57 ARTICLE X COVENANTS................................................................57 Section 10.1 Payment of Principal, Premium and Interest..............................57 Section 10.2 Maintenance of Office or Agency.........................................57 Section 10.3 Money for Securities Payments to Be Held in Trust.......................58 Section 10.4 Statement by Officers as to Default.....................................59 Section 10.5 Covenants as to CGMH Trusts.............................................59 Section 10.6 Payment of Expenses.....................................................60 Section 10.7 Listing on an Exchange..................................................61 Section 10.8 Future Issuance of Securities under this Indenture......................61 ARTICLE XI REDEMPTION OF SECURITIES.................................................61 Section 11.1 Applicability of Article; Federal Reserve Approval......................61 Section 11.2 Election to Redeem; Notice to Trustee...................................61 Section 11.3 Selection by Trustee of Securities to Be Redeemed.......................62 Section 11.4 Notice of Redemption....................................................62 Section 11.5 Deposit of Redemption Price.............................................63 Section 11.6 Securities Payable on Redemption Date...................................63 Section 11.7 Securities Redeemed in Part.............................................64 Section 11.8 Tax Event Redemption....................................................64 ARTICLE XII SINKING FUNDS............................................................65 Section 12.1 Applicability of Article................................................65 Section 12.2 Satisfaction of Sinking Fund Payments with Securities...................65 Section 12.3 Redemption of Securities for Sinking Fund...............................65 ARTICLE XIII EXTENSION OF INTEREST PAYMENT PERIOD.....................................66 Section 13.1 Notice of Extension.....................................................66 Section 13.2 Limitation of Transactions..............................................67
iii TABLE OF CONTENTS (continued)
PAGE ARTICLE XIV SUBORDINATION OF SECURITIES..............................................67 Section 14.1 Agreement to Subordinate................................................67 Section 14.2 Default on Senior Indebtedness..........................................68 Section 14.3 Liquidation; Dissolution; Bankruptcy....................................69 Section 14.4 Subrogation.............................................................70 Section 14.5 Trustee to Effectuate Subordination.....................................71 Section 14.6 Notice by the Company...................................................71 Section 14.7 Rights of the Trustee; Holders of Senior Indebtedness...................72 Section 14.8 Subordination May Not Be Impaired.......................................72 Section 14.9 Trustee's Compensation Not Prejudiced...................................73 ARTICLE XV MISCELLANEOUS............................................................73 Section 15.1 Acknowledgement of Rights...............................................73
iv INDEX OF TERMS
Page ---- Act........................................................................2, 10 Additional Interest........................................................2, 28 Affiliate......................................................................2 Authenticating Agent...........................................................2 Board of Directors.............................................................2 Board Resolution...............................................................2 Book Entry Interest............................................................2 Business Day...................................................................2 CGMH Trust.....................................................................2 Commission.....................................................................2 Common Securities..............................................................3 Company.....................................................................1, 3 Company Order..................................................................3 Company Request................................................................3 Compounded Interest........................................................3, 66 Corporate Trust Office.........................................................3 Coupon Rate................................................................3, 27 Covenant Defeasance........................................................3, 32 Declaration....................................................................3 Default........................................................................3 Defaulted Interest.........................................................3, 25 Defeasance.................................................................3, 32 Deferred Interest..........................................................3, 66 Delaware Trustee...............................................................3 Depositary.....................................................................3 Direct Action..............................................................3, 73 Dissolution Event..............................................................4 Distributions..................................................................4 Event of Default...............................................................4 Exchange Act...................................................................4 Extended Interest Payment Period.......................................4, 18, 66 Floating or Adjustable Rate Provision..........................................4 Floating or Adjustable Rate Security...........................................4 Global Security................................................................4 Holder.........................................................................4 Indenture..................................................................4, 16 Institutional Trustee..........................................................4 Interest Payment Date..................................................4, 14, 27 Maturity.......................................................................4 No Recognition Opinion.........................................................5 Non Book-Entry Preferred Securities........................................5, 29 Officers' Certificate..........................................................5
v Opinion of Counsel.............................................................5 Outstanding....................................................................5 Paying Agent...................................................................6 Person.........................................................................6 Place of Payment...............................................................6 Predecessor Security...........................................................6 Preferred Securities...........................................................6 Preferred Security Certificate.................................................6 Redemption Date................................................................6 Redemption Option Date.........................................................6 Redemption Price...........................................................6, 16 Redemption Tax Opinion.........................................................6 Regular Record Date............................................................6 Regular Trustees...............................................................7 Responsible Officer............................................................7 Securities..............................................................1, 7, 16 Security Beneficial Owner......................................................7 Security Register..........................................................7, 23 Security Registrar.........................................................7, 24 Senior Indebtedness............................................................7 Special Event..................................................................8 Special Record Date............................................................8 Stated Maturity................................................................8 Tax Event......................................................................8 Tax Event Opinion..............................................................8 Trust Indenture Act............................................................8 Trust Securities...............................................................8 Trustee.................................................................1, 8, 16 U.S. Government Obligations................................................9, 32 Underwriting Agreement.........................................................9 Vice President.................................................................9
vi Citigroup Global Markets Holdings Inc. Reconciliation and tie between Trust Indenture Act of 1939 and Indenture, dated as of _________, 2004
Trust Indenture Act Section Indenture Section Section 310 (a)(1).................................... 6.9 (a)(2).................................... 6.9 (a)(3).................................... Not Applicable (a)(4).................................... Not Applicable (b)....................................... 6.8 6.10 Section 311 (a)....................................... 6.13(a) (b)....................................... 6.13(b) (b)(2).................................... 7.3(a)(2) 7.3(b) Section 312 (a)....................................... 7.1 7.2(a) (b)....................................... 7.2(b) (c)....................................... 7.2(c) Section 313 (a)....................................... 7.3(a) (b)....................................... 7.3(b) (c)....................................... 7.3(a). 7.3(b) (d)....................................... 7.3(c) Section 314 (a)....................................... 7.4 (b)....................................... Not Applicable (c)(1).................................... 1.2 (c)(2).................................... 1.2 (c)(3).................................... Not Applicable (d)....................................... Not Applicable (e)....................................... 1.2 Section 315 (a)....................................... 6.1(a) (b)....................................... 6.2 7.3(a)(6) (c)....................................... 6.1(b) (d)....................................... 6.1(c) (d)(1).................................... 6.1(a)(1) (d)(2).................................... 6.1(c)(2) (d)(3).................................... 6.1(c)(3) (e)....................................... 5.14 Section 316 (a)....................................... 1.1 (a)(1)(A)................................. 5.2 5.12 (a)(1)(B)................................. 5.13 (a)(2).................................... Not Applicable (b)....................................... 5.8
vii Section 317 (a)(1).................................... 5.3 (a)(2).................................... 5.4 (b)....................................... 10.3 Section 318 (a)....................................... 1.7
- -------------------- NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture. viii INDENTURE, dated as of ___________, 2004, between CITIGROUP GLOBAL MARKETS HOLDINGS INC., a corporation duly organized and existing under the laws of the State of New York (herein called the "Company"), having its principal office at 388 Greenwich Street, New York, New York 10013, and JPMORGAN CHASE BANK, a New York banking association duly organized and existing under the laws of the State of New York, as Trustee (herein called the "Trustee"). RECITALS OF THE COMPANY The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured junior subordinated debentures, notes or other evidences of indebtedness (herein called the "Securities"), to be issued in one or more series as in this Indenture provided. All things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done. NOW, THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities or of series thereof, as follows: ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION Section 1.1 Definitions. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires: (1) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; (2) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; (3) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles, and, except as otherwise herein expressly provided, the term "generally accepted accounting principles" with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted at the date of such computation; and (4) the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. Certain terms, used principally in Article Six, are defined in that Article. "Act" when used with respect to any Holder, has the meaning specified in Section 1.4. "Additional Interest" has the meaning specified in Section 3.10(c). "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Authenticating Agent" means any Person authorized by the Trustee to act on behalf of the Trustee to authenticate Securities. "Board of Directors" means either the board of directors of the Company or any duly authorized committee of that board. "Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee. "Book Entry Interest" means a beneficial interest in a Global Security, ownership of which shall be maintained and transfers of which shall be made through book entries by the Depositary. "Business Day" means any day other than a Saturday, Sunday or any other day on which banking institutions in New York, New York are authorized or obligated by any applicable law to close. "CGMH Trust" means each of CGMH Capital II, CGMH Capital III and CGMH Capital IV, each a Delaware statutory trust, or any other similar trust created for the purpose of issuing preferred securities in connection with the issuances of Securities under this Indenture. "Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time. 2 "Common Securities" means undivided beneficial interests in the assets of a CGMH Trust which rank, except upon the occurrence and continuation of an Event of Default, pari passu with Preferred Securities issued by such CGMH Trust. "Company" means the Person named as the "Company" in the first paragraph of this instrument until a successor corporation shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor corporation. "Company Request" or "Company Order" means a written request or order signed in the name of the Company by its Chairman, Vice Chairman, President, Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer or a Vice President, and by its Treasurer, Secretary or an Assistant Secretary, and delivered to the Trustee. "Compounded Interest" has the meaning specified in Section 13.1. "Corporate Trust Office" means the principal office of the Trustee in the City of New York, New York at which at any particular time its corporate trust business shall be principally administered, which at the date hereof is located at 4 New York Plaza - 15th Floor, New York, New York 10004. "Coupon Rate" has the meaning specified in Section 3.10(a). "Covenant Defeasance" has the meaning specified in Section 4.3. "Declaration" means, with respect to a CGMH Trust, the amended and restated declaration of trust or any other governing instrument of such CGMH Trust. "Default" has the meaning specified in Section 5.7. "Defaulted Interest" has the meaning specified in Section 3.7. "Defeasance" has the meaning specified in Section 4.2. "Deferred Interest" has the meaning specified in Section 13.1. "Delaware Trustee" has the meaning specified in the Declaration of the applicable CGMH Trust. "Depositary" means, with respect to Securities of any series issuable in whole or in part in the form of one or more Global Securities, a clearing agency registered under the Exchange Act that is designated to act as Depositary for such Securities as contemplated by Section 3.1. "Direct Action" has the meaning specified in Section 15.1. 3 "Dissolution Event" means, with respect to a CGMH Trust, that as a result of the occurrence and continuation of a Special Event with respect to such CGMH Trust, such CGMH Trust is to be dissolved in accordance with its Declaration. "Distributions" on Trust Securities of a CGMH Trust has the meaning set forth in the Declaration of such CGMH Trust. "Event of Default" has the meaning specified in Section 5.1. "Exchange Act" means the Securities Exchange Act of 1934 as amended from time to time, and any successor legislation. "Extended Interest Payment Period" has the meaning specified in Section 13.1. "Floating or Adjustable Rate Provision" means a formula or provision, specified in a Board Resolution or an indenture supplemental hereto, providing for the determination, whether pursuant to objective factors or pursuant to the sole discretion of any Person (including the Company), and periodic adjustment of the interest rate per annum borne by a Floating or Adjustable Rate Security. "Floating or Adjustable Rate Security" means any Security which provides for interest to be payable thereon at a rate per annum that may vary from time to time over the term thereof in accordance with a Floating or Adjustable Rate Provision. "Global Security" means a Security that evidences all or part of the Securities of any series and is authenticated and delivered to, and registered in the name of, the Depositary for such Securities or a nominee thereof. "Holder" means a Person in whose name a Security is registered in the Security Register. "Indenture" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms of particular series of Securities established as contemplated by Section 3.1. "Institutional Trustee" has the meaning set forth in the Declaration of the applicable CGMH Trust. "Interest Payment Date," when used with respect to any Security, means the Stated Maturity of an installment of interest on such Security. "Maturity," when used with respect to any Security, means the date on which the principal of such Security or an installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise. 4 "No Recognition Opinion," with respect to a CGMH Trust, has the meaning specified in the Declaration of such CGMH Trust. "Non Book-Entry Preferred Securities" has the meaning specified in Section 3.12(a)(ii). "Officers' Certificate" means a certificate signed by the Chairman, Vice Chairman, President, Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer or a Vice President, and by its Treasurer, Secretary or an Assistant Secretary of the Company, and delivered to the Trustee. The officer signing an Officer's Certificate pursuant to Section 10.4 shall be the principal executive, financial or accounting officer of the Issuer or the Company, as the case may be. "Opinion of Counsel" means a written opinion of counsel, who may be counsel for the Company. "Outstanding," when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except: (i) Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation; (ii) Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; and (iii) Securities which have been paid pursuant to Section 3.6 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a protected purchaser in whose hands such Securities are valid obligations of the Company; provided that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding; provided, however, that, in determining whether the Trustee shall be protected in relying, upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which a Responsible Officer of the Trustee actually knows to be so owned shall be so disregarded and provided, further, that Securities held by the Institutional Trustee for the benefit of the holders of the Trust Securities shall not be so disregarded. Securities so owned which 5 have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor. "Paying Agent" means any Person authorized by the Company to pay the principal of (or premium, if any) or interest on any Securities on behalf of the Company. "Person" means any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "Place of Payment," when used with respect to the Securities of any series, means the place or places where the principal of (and premium, if any) and interest on the Securities of that series are payable as specified as contemplated by Section 3.1. "Predecessor Security" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 3.6 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security. "Preferred Securities" means undivided beneficial interests in the assets of a CGMH Trust which rank, except upon the occurrence and continuation of an Event of Default, pari passu with Common Securities issued by such CGMH Trust. "Preferred Security Certificate" has the meaning specified in the Declaration of the applicable CGMH Trust. "Redemption Date," when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture. "Redemption Option Date" means, with respect to a series of Securities, the date specified as contemplated by Section 3.1 on or after which, from time to time, the Company, at its option, may redeem such series of Securities in whole or in part. "Redemption Price," when used with respect to any Security to be redeemed, means such percentage of the principal amount of such Security that is specified pursuant to Section 3.1 plus any accrued and unpaid interest thereon to the date of redemption. "Redemption Tax Opinion," with respect to a CGMH Trust, has the meaning set forth in the Declaration of the applicable CGMH Trust. "Regular Record Date" for the interest payable on any Interest Payment Date on the Securities of any series means the date specified as such pursuant to Section 3.1. 6 "Regular Trustees" has the meaning set forth in the Declaration of the applicable CGMH Trust. "Responsible Officer" means, with respect to the Trustee, any officer within the Corporate Trust Office of the Trustee having direct responsibility for the administration of this Indenture and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of that officer's knowledge of and familiarity with the particular subject. "Securities" has the meaning stated in the first recital of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture. "Security Beneficial Owner" means, with respect to a Book Entry Interest, a person who is the beneficial owner of such Book Entry Interest, as reflected on the books of the Depositary, or on the books of a Person maintaining an account with such Depositary (directly as a Depositary participant or as an indirect participant, in each case in accordance with the rules of the Depositary). "Security Register" and "Security Registrar" have the respective meanings specified in Section 3.5. "Senior Indebtedness" means with respect to the Company, (i) the principal, premium, if any, and interest in respect of (A) indebtedness of the Company for money borrowed and (B) indebtedness evidenced by securities, notes, debentures, bonds or other similar instruments issued by the Company including all indebtedness (whether now or hereafter outstanding) issued under (1) the senior debt indenture, dated as of December 1, 1988, between Salomon Inc and Citibank, N.A., as trustee, in case as the same may be amended, modified, or supplemented from time to time, (2) the senior debt indenture, dated as of October 27, 1993, between Salomon Inc and The Bank of New York, as trustee, in case as the same may be amended, modified, or supplemented from time to time, and (3) the subordinated debt indenture, dated as of December 1, 1988, between Salomon Inc and Bankers Trust Company, as trustee, in case as the same may be amended, modified or supplemented from time to time; (ii) all capital lease obligations of the Company; (iii) all obligations of the Company issued or assumed as the deferred purchase price of property, all conditional sale obligations of the Company and all obligations of the Company under any conditional sale or title retention agreement (but excluding trade accounts payable in the ordinary course of business); (iv) all obligations, contingent or otherwise, of the Company in respect of any letters of credit, banker's acceptance, security purchase facilities and similar credit transactions; (v) all obligations of the Company in respect of interest rate swap, cap or other agreements, interest rate future or options contracts, currency swap agreements, currency future or option contracts and other similar agreements; (vi) all obligations of the type referred to in clauses (i) through (v) of other Persons for the payment of which the Company is responsible or liable as obligor, guarantor or otherwise ("guarantees"); and (vii) all obligations of the type referred to in clauses (i) through (vi) of other Persons secured by any lien on any property or asset of the Company (whether or not such obligation is assumed by the Company), except that Senior Indebtedness does not include obligations 7 in respect of (1) any indebtedness issued under this Indenture, and (2) any indebtedness or any guarantee that is by its terms subordinated to or pari passu with the Securities and the issuance of which, in the case of this clause (2) only, (x) has received the concurrence or approval of the staff of the Federal Reserve Bank of New York or the staff of the Board of Governors of the Federal Reserve System or (y) does not at the time of issuance prevent the Securities from qualifying for tier 1 capital treatment (irrespective of any limits on the amount of the Citigroup Inc.'s tier 1 capital) under the applicable capital adequacy guidelines, regulations, policies or published interpretations of the Board of Governors of the Federal Reserve System. "Special Event," with respect to a CGMH Trust, has the meaning specified in the Declaration of such CGMH Trust. "Special Record Date" for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 3.7. "Stated Maturity," when used with respect to any Security or any installment of principal thereof or interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable. "Tax Event," with respect to a CGMH Trust, has the meaning set forth in the Declaration of the applicable CGMH Trust. "Tax Event Opinion," with respect to a CGMH Trust, has the meaning set forth in the Declaration of the applicable CGMH Trust. "Trust Indenture Act" means the Trust Indenture Act of 1939, as in force at the date as of which this instrument was executed, except as provided in Section 9.5. "Trust Securities" means Common Securities and Preferred Securities of any CGMH Trust. "Trustee" means the Person named as the "Trustee" in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean or include each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, "Trustee" as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series. "Underwriting Agreement" has the meaning set forth in the Declaration of the applicable CGMH Trust. "U.S. Government Obligations" has the meaning specified in Section 4.4. "Vice President," when used with respect to the Company or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title "vice president." 8 Section 1.2 Compliance Certificates and Opinions. Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee an Officer's Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel sating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished. Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include, (1) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. Section 1.3 Form of Documents Delivered to Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel 9 knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument. Section 1.4 Acts of Holders; Record Date. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given or taken by Holders shall be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.1) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section. (b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient. (c) The ownership of Securities shall be proved by the Security Register. (d) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security. Section 1.5 Notices, Etc., to Trustee and Company. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with, 10 (1) the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust Office, Attention: Institutional Trust Group; provided, however, that such instrument will be considered properly given if submitted in an electronic format, i.e., by facsimile, E-Mail or otherwise, or (2) the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Company addressed to it at the address of its principal office specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee by the Company; provided, however, that such instrument will be considered properly given if submitted in an electronic format, i.e., by facsimile, E-Mail or otherwise. Section 1.6 Notice to Holders; Waiver. Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at his address as it appears in the Security Register, not later than the latest date and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken-in reliance upon such waiver. In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder. Section 1.7 Conflict with Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in this Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control. Section 1.8 Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. 11 Section 1.9 Successors and Assigns. All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not. Section 1.10 Separability Clause. In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 1.11 Benefits of Indenture. Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, the holders of Senior Indebtedness and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture. Section 1.12 Governing Law. This Indenture and the Securities shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York, and all rights and remedies shall be governed by such laws without regard for the principles of its conflicts of laws. Section 1.13 Legal Holidays. In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture or of the Securities) payment of interest or principal (and premium, if any) need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity, provided that no interest shall accrue for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be, except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. Section 1.14 Tax Characterization. The Company, the Trustee and each Holder of a Security (by acceptance thereof) agrees to treat the Securities as debt instruments for United States federal, state and local income and franchise tax purposes and agrees not to take any contrary position before any taxing authority or on any tax return unless otherwise required by law. 12 ARTICLE II SECURITY FORMS Section 2.1 Forms Generally. The Securities of each series shall be in substantially the form set forth in this Article, or in such other form as shall be established by or pursuant to a Board Resolution or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or Depositary therefor or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution of such Securities. If the form of Securities of any series is established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 3.3 for the authentication and delivery of such Securities. The Trustee's certificates of authentication shall be in substantially the form set forth in this Article. The definitive Securities may be produced in any manner as determined by the officers executing such Securities, as evidenced by their execution of such Securities. Section 2.2 Form of Face of Security. [IF THE SECURITY IS TO BE A GLOBAL SECURITY, INSERT - This Security is a Global Security within the meaning of the Indenture hereinafter referred to and is registered in the name of a Depositary or a nominee of a Depositary. This Security is exchangeable for Securities registered in the name of a person other than the Depositary or its nominee only in the limited circumstances described in the Indenture, and no transfer of this Security (other than a transfer of this Security as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary) may be registered except in limited circumstances. Unless this Security is presented by an authorized representative of The Depository Trust Company (55 Water Street, New York, New York) to the issuer or its agent for registration of transfer, exchange or payment, and any Security issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.] No. ________________ 13 CITIGROUP GLOBAL MARKETS HOLDINGS INC. [INSERT TITLE OF SERIES OF SECURITY] CITIGROUP GLOBAL MARKETS HOLDINGS INC., a New York corporation (the "Company," which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to ___________or registered assigns, the principal sum of _________Dollars ($__________) on ________________, ______, and to pay interest on said principal sum from ______________, _____, or from the most recent interest payment date (each such date, an "Interest Payment Date") to which interest has been paid or duly provided for, [quarterly] [(subject to deferral as set forth herein)] in arrears on [___________, ___________, ____________ and ___________] of each year commencing ______________, _____, at [If the Security is to bear interest at a fixed rate, insert -a rate of ___% per annum,] [If the Security is a Floating or Adjustable Rate Security, insert a rate of ___% per annum [computed-determined] in accordance with the [insert defined name of Floating or Adjustable Rate Provision] set forth below] until the principal hereof shall have become due and payable, and on any overdue principal and premium, if any, and (without duplication and to the extent that payment of such interest is enforceable under applicable law) on any overdue installment of interest at the same rate per annum compounded [quarterly]. The amount of interest payable on any Interest Payment Date shall be computed on the basis of a 360-day year of twelve 30-day months. In the event that any date on which interest is payable on this Security is not a Business Day, then payment of interest payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. The interest installment so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities, as defined in said Indenture) is registered at the close of business on the regular record date for such interest installment, which shall be the close of business on the Business Day next preceding such Interest Payment Date, [IF PURSUANT TO THE PROVISIONS OF THE INDENTURE THE SECURITIES ARE NO LONGER REPRESENTED BY A GLOBAL SECURITY -- which shall be the close of business on the ___ Business Day next preceding such Interest Payment Date.] Any such interest installment not punctually paid or duly provided for shall forthwith cease to be payable to the registered Holders on such regular record date and may be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a special record date to be fixed by the Trustee for the payment of such defaulted interest, notice whereof shall be given to the registered Holders of this series of Securities not less than 10 days prior to such special record date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture. Payments on 14 this Global Security will be made to the Depository Trust Company, or to a successor Depositary. [IF PURSUANT TO THE PROVISIONS OF THE INDENTURE THE SECURITIES ARE NO LONGER REPRESENTED BY A GLOBAL SECURITY --The principal of (and premium, if any) and the interest on this Security shall be payable at the office or agency of the Trustee maintained for that purpose in any coin or currency of the United States of America that at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of interest may be made at the option of the Company by check mailed to the registered Holder at such address as shall appear in the Security Register. Notwithstanding the foregoing, so long as the Holder of this Security is the Institutional Trustee of a CGMH Trust, the payment of the principal of (and premium, if any) and interest on this Security will be made at such place and to such account as may be designated by such Institutional Trustee.] The Securities are not deposits or savings accounts. The Securities are not insured by the Federal Deposit Insurance Corporation or any other governmental agency or instrumentality. [At this point in the Security Form of any series of Floating or Adjustable Rate Securities, the text of the Floating or Adjustable Rate Provision relating thereto should be inserted.] The indebtedness evidenced by this Security is, to the extent provided in the Indenture, subordinate and junior in right of payment to the prior payment in full of all Senior Indebtedness of the Company, and this Security is issued subject to the provisions of the Indenture with respect thereto. Each Holder of this Security, by accepting the same, (a) agrees to and shall be bound by, such provisions, (b) authorizes and directs the Trustee on his or her behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination so provided and (c) appoints the Trustee his or her attorney-in-fact for any and all such purposes. Each Holder hereof, by his or her acceptance hereof, hereby waives all notice of the acceptance of the subordination provisions contained herein and in the Indenture by each holder of Senior Indebtedness of the Company, whether now outstanding or hereafter incurred, and waives reliance by each such holder upon said provisions. This Security shall not be entitled to any benefit under the Indenture hereinafter referred to, be valid or become obligatory for any purpose until the Certificate of Authentication hereon shall have been signed by or on behalf of the Trustee. The provisions of this Security are continued on the reverse side hereof and such continued provisions shall for all purposes have the same effect as though fully set forth at this place. IN WITNESS WHEREOF, the Company has caused this instrument to be executed. Dated: ____________ 15 CITIGROUP GLOBAL MARKETS HOLDINGS INC. By: ------------------------------------- Name: Title: By: ------------------------------------- Name: Title: Section 2.3 Form of Reverse of Security. This Security is one of a duly authorized series of securities of the Company (herein sometimes referred to as the "Securities"), specified in the Indenture, all issued or to be issued in one or more series under and pursuant to an Indenture dated as of _______, 2004 (the "Indenture"), duly executed and delivered between the Company and JPMorgan Chase Bank, as Trustee (the "Trustee"), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders of the Securities. By the terms of the Indenture, the Securities are issuable in series that may vary as to amount, date of maturity, rate of interest and in other respects as provided in the Indenture. This series of Securities is limited in aggregate principal amount to $ _________(, plus up to an additional $ __________ aggregate principal amount which may be issued upon exercise of the over-allotment option contemplated by the Underwriting Agreement). Because of the occurrence and continuation of a Tax Event, in certain circumstances, this Security may become due and payable at [specify redemption prices] % of the principal amount thereof, together with any interest accrued thereon (the "Redemption Price"). The Redemption Price shall be paid prior to 12:00 noon, New York City time, on the date of such redemption or at such earlier time as the Company determines. The Company shall have the right to redeem this Security at the option of the Company, without premium or penalty, in whole or in part at any time on or after ___, ____ (an "Optional Redemption"), or at any time in certain circumstances upon the occurrence of a Tax Event, at a redemption price equal to (specify redemption prices) % of the principal amount thereof, plus any accrued but unpaid interest to the date of such redemption (the "Optional Redemption Price"). Any redemption pursuant to this paragraph will be made upon not less than 30 days nor more than 60 days notice, at the Optional Redemption Price. If the Securities are only partially redeemed by the Company pursuant to an Optional Redemption, the Securities will be redeemed pro rata or by lot or by any other method utilized by the Trustee; provided that if, at the time of redemption, the Securities are registered as a Global Security, the Depositary shall determine the principal amount of such Securities held by each Security Beneficial Owner to be redeemed in accordance with its procedures. 16 Any redemption of the Securities of this series, in whole or in part, prior to the stated maturity date is subject to receipt by the Company of prior written approval from the Federal Reserve Bank of New York, if then required under applicable capital adequacy guidelines, regulations or policies of the Board of Governors of the Federal Reserve System. [The Securities of this series are subject to redemption upon not less than 30 days' nor, more than 60 days' notice by mail, (1) on ________ in any year commencing with the year ____ and ending with the year ____ through operation of the sinking fund for this series at a Redemption Price of ___, (2) at any time [on or after ________, 199__, as a whole or in part, at the election of the Company, at the following Redemption Prices (expressed as percentages of the principal amount): If redeemed [on or before ____, ___, and if redeemed during the 12-month period beginning ___________ of the years indicated, and thereafter at a Redemption Price equal to ___% of the principal amount, together in the case of any such redemption (whether through operation of the sinking fund or otherwise) with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.] [Notwithstanding the foregoing, the Company may not, prior to ______, redeem any Securities of this series as contemplated by Clause (2) of the preceding paragraph as a part of, or in anticipation of, any refunding operation by the application, directly or indirectly, of monies borrowed having an interest cost to the Company (calculated in accordance with generally accepted financial practice) of less than ___% per annum.] [The sinking fund for this series provides for the redemption on ________ in each year beginning with the year _______ and ending with the year _________ of [not less than] $___________ ("mandatory sinking fund") and not more than $_______ aggregate principal amount of Securities of this series. Securities of this series acquired or redeemed by the Company otherwise than through [mandatory] sinking fund payments may be credited against subsequent [mandatory] sinking fund payments otherwise required to be made in the [inverse] order in which they become due.] In the event of redemption of this Security in part only, a new Security or Securities of this series for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof. In case an Event of Default, as defined in the Indenture, shall have occurred and be continuing, the principal of all of the Securities may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture. The Indenture contains provisions permitting the Company and the Trustee, with the consent of the Holders of not less than a majority in aggregate principal amount of the Securities of each series affected at the time outstanding, as defined in the Indenture, to 17 execute supplemental indentures for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or of modifying in any manner the rights of the Holders of the Securities; provided, however, that no such supplemental indenture shall (i) extend the fixed maturity of any Securities of any series, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable upon the redemption thereof, without the consent of the Holder of each Security so affected, or (ii) reduce the aforesaid percentage of Securities, the Holders of which are required to consent to any such supplemental indenture, without the consent of the Holders of each Security then outstanding and affected thereby. The Indenture also contains provisions permitting the Holders of a majority in aggregate principal amount of the Securities of any series at the time outstanding affected thereby, on behalf of all of the Holders of the Securities of such series, to waive any past default in the performance of any of the covenants contained in the Indenture, or established pursuant to the Indenture with respect to such series, and its consequences, except a default in the payment of the principal of or premium, if any, or interest on any of the Securities of such series. Any such consent or waiver by the registered Holder of this Security (unless revoked as provided in the Indenture) shall be conclusive and binding upon such Holder and upon all future Holders and owners of this Security and of any Security issued in exchange herefor or in place hereof (whether by registration of transfer or otherwise), irrespective of whether or not any notation of such consent or waiver is made upon this Security. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and premium, if any, and interest on this Security at the time and place and at the rate and in the money herein prescribed. The Company shall have the right at any time during the term of the Securities and from time to time to extend the interest payment period of such Securities for up to 20 consecutive quarters (an "Extended Interest Payment Period"), at the end of which period the Company shall pay all interest then accrued and unpaid (together with interest thereon at the rate specified for the Securities to the extent that payment of such interest is enforceable under applicable law); provided, that no such Extended Interest Payment Period shall extend beyond the maturity of the Securities; and provided further that during any such Extended Interest Payment Period (a) the Company shall not declare or pay any dividend on, make any distributions with respect to, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock or make any guarantee payment with respect thereto (other than (i) repurchases, redemptions or other acquisitions of shares of capital stock of the Company in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of employees, officers, directors or consultants, (ii) as a result of an exchange or conversion of any class or series of the Company's capital stock for any other class or series of the Company's capital stock, or (iii) the purchase of fractional interests in shares of the Company's capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being convened or exchanged), and (b) the Company shall not make any payment of interest on or principal of (or premium, if any, on), or repay, repurchase or redeem, any debt securities issued by the Company which rank pari passu 18 with or junior to the Securities. The foregoing, however, will not apply to any stock "dividends" paid by the Company where the dividend stock is the same stock as that on which the dividend is being paid. Before the termination of any such Extended Interest Payment Period, the Company may further extend such Extended Interest Payment Period, provided that such Extended Interest Payment Period together with all such further extensions thereof shall not exceed 20 consecutive quarters. At the termination of any such Extended Interest Payment Period and upon the payment of all accrued and unpaid interest and any additional amounts then due, the Company may commence a new Extended Interest Payment Period. As provided in the Indenture and subject to certain limitations therein set forth, this Security is transferable by the registered Holder hereof on the Security Register of the Company, upon surrender of this Security for registration of transfer at the office or agency of the Trustee in the City and State of New York accompanied by a written instrument or instruments of transfer in form satisfactory to the Company or the Trustee duly executed by the registered Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of authorized denominations and for the same aggregate principal amount and series will be issued to the designated transferee or transferees. No service charge will be made for any such transfer, but the Company or the Trustee may require payment of a sum sufficient to cover any tax or other governmental charge payable in relation thereto. Prior to due presentment for registration of transfer of this Security, the Company, the Trustee, any paying agent and the Security Registrar may deem and treat the registered holder hereof as the absolute owner hereof (whether or not this Security shall be overdue and notwithstanding any notice of ownership or writing hereon made by anyone other than the Security Registrar) for the purpose of receiving payment of or on account of the principal hereof and premium, if any, and interest due hereon and for all other purposes, and neither the Company nor the Trustee nor any paying agent nor any Security Registrar shall be affected by any notice to the contrary. No recourse shall be had for the payment of the principal of or the interest on this Security, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture, against any incorporator, stockholder, officer or director, past, present or future, as such, of the Company or of any predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issuance hereof, expressly waived and released. [The Securities of this series are issuable only in registered form without coupons in denominations of $25 and any integral multiple thereof.] [This Global Security is exchangeable for Securities in definitive form only under certain limited circumstances set forth in the Indenture. Securities of this series so issued are issuable only in registered form without coupons in denominations of $25 and any integral multiple thereof.] As provided in the Indenture and subject to certain limitations [herein and] therein set forth. Securities of this series [so issued] are exchangeable for a like aggregate principal 19 amount of Securities of this series of a different authorized denomination, as requested by the Holder surrendering the same. All terms used in this Security that are defined in the Indenture shall have the meanings assigned to them in the Indenture. Section 2.4 Form of Trustee's Certificate of Authentication. CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series of Securities described in the within-mentioned Indenture. JPMORGAN CHASE BANK, as Trustee By: --------------------------------------------- Authorized Officer ARTICLE III THE SECURITIES Section 3.1 Amount Unlimited; Issuable in Series. The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series. There shall be established in or pursuant to a Board Resolution, and set forth in an Officers' Certificate, or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series: (1) the title of the Securities of the series (which shall distinguish the Securities of the series from all Securities of any other series); (2) the date or dates on which the principal of the Securities of the series is payable, and, if applicable to the series, the terms of any sinking fund obligations with respect to such series; (3) the rate or rates at which the Securities of the series shall bear interest or the Floating or Adjustable Rate Provision pursuant to which such rates shall be determined, the date or dates from which any such interest shall accrue, the Interest Payment Dates on which any such interest shall be payable and the Regular Record Date for the interest payable on any Interest Payment Date (if 20 such Interest Payment Dates or Regular Record Dates differ from those provided herein); (4) the place or places where the principal of (and any premium, if any) and interest on Securities of the series shall be payable; (5) in addition to the redemption rights provided herein, the period or periods within which (including the Redemption Option Date for the series) and the price or prices at which any Securities of the series may be redeemed, in whole or in part, at the option of the Company; (6) if other than denominations of $25 and any integral multiple thereof, the denominations in which Securities of the series shall be issuable; (7) any other defaults applicable with respect to the Securities of the series in addition to those provided in Section 5.7(a) through (f); (8) any other covenant or warranty included for the benefit of Securities of the series in addition to (and not inconsistent with) those included in this Indenture for the benefit of Securities of all series, or any other covenant or warranty included for the benefit of Securities of the series in lieu of any covenant or warranty included in this Indenture for the benefit of Securities of all series, or any provision that any covenant or warranty included in this Indenture for the benefit of Securities of all series shall not be for the benefit of Securities of the series, or any combination of such covenants, warranties or provisions; (9) the subordination terms of the Securities of the series; (10) the provisions of this Indenture, if any, that shall not apply to the series; and (11) any other terms of the series (which additional terms shall not be inconsistent with the provisions of this Indenture). All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to such Board Resolution and set forth, or determined in the manner provided, in the Officers' Certificate referred to above or in any such indenture supplemental hereto. If any of the terms of the Securities of a series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers' Certificate setting forth the terms of the Securities of such series. 21 Section 3.2 Denominations. The Securities of each series shall be issuable in registered form without coupons and in such denominations as shall be specified as contemplated by Section 3.1. In the absence of any such provisions with respect to the Securities of any series, the Securities of such series shall be issuable in denominations of $25 and any integral multiple thereof. Section 3.3 Execution, Authentication, Delivery and Dating. The Securities shall be executed on behalf of the Company by its Chairman, Vice Chairman, President, Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, Treasurer or a Vice President, under its corporate seal reproduced thereon attested by its Secretary or one of its Assistant Secretaries. The signature of any of these officers on the Securities may be manual or facsimile. Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities. At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver such Securities. If the form or terms of the Securities of the series have been established in or pursuant to one or more Board Resolutions as permitted by Sections 2.1 and 3.1, in authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive at the time of the initial delivery by the Company of Securities of such series to the Trustee for authentication, and (subject to Section 6.1) shall be fully protected in relying upon, an Opinion of Counsel stating, (1) if the form of such Securities has been established by or pursuant to Board Resolution as permitted by Section 2.1, that such form has been established in conformity with the provisions of this Indenture; (2) if the terms of such Securities have been established by or pursuant to Board Resolution as permitted by Section 3.1, that such terms have been established in conformity with the provisions of this Indenture; and (3) that such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Company enforceable in accordance with their terms, subject to bankruptcy, insolvency, reorganization, and other laws of general applicability relating to or affecting the enforcement or creditors' rights and to general equity principles. 22 If such form or terms have been so established, the Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee's own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee. Each Security shall be dated the date of its authentication. No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder and is entitled to the benefits of this Indenture. Section 3.4 Temporary Securities. Pending the preparation of definitive Securities of any series, the Company may execute, and upon receipt of a Company Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the directors or officers executing such Securities may determine, as evidenced by their execution of such Securities. If temporary Securities of any series are issued, the Company will cause definitive Securities of that series to be prepared without unreasonable delay. After the preparation of definitive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of such series at the office or agency of the Company in a Place of Payment for Securities of that series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities of any series the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like aggregate principal amount of definitive Securities of the same series and of like tenor of authorized denominations. Until so exchanged, the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such series. Section 3.5 Registration, Registration of Transfer and Exchange. The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency of the Company in a Place of Payment being herein sometimes collectively referred to as the "Security Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities, or of Securities of a particular series, and of transfers of Securities or of Securities of such series. The Trustee is hereby appointed "Security Registrar" for the purpose of registering Securities and transfers of Securities as herein provided. 23 Subject to Section 3.11, upon surrender for registration of transfer of any Security of any series at the office or agency of the Company in a Place of Payment for Securities of that series, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of like tenor of the same series, of any authorized denominations and of a like aggregate principal amount. Subject to Section 3.11, at the option of the Holder, Securities of any series may be exchanged for other Securities of like tenor of the same series, of any authorized denominations and of a like aggregate principal amount, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive. All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange. Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing. No service charge shall be made for any registration of transfer or exchange of Securities, but the Company or the Trustee may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 3.4, 9.6 or 11.7 not involving any transfer. The Company shall not be required (i) to issue, register the transfer of or exchange any Security of any series during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of Securities of such series selected for redemption under Section 11.3 and ending at the close of business on the day of such mailing, or (ii) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part. Section 3.6 Mutilated, Destroyed, Lost and Stolen Securities. If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding. If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or 24 indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a protected purchaser, the Company shall execute and upon its written request the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding. In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security. Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. Every new Security of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of that series duly issued hereunder. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities. Section 3.7 Payment of Interest; Interest Rights Preserved. Interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest. Interest on any Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in clause (1) or (2) below: (1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security of such series and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount 25 proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this Clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder of Securities of such series at his address as it appears in the Security Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (2). (2) The Company may make payment of any Defaulted Interest on the Securities of any series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after written notice given by the Company to the Trustee of the proposed payment pursuant to this Clause, such manner of payment shall be deemed practicable by the Trustee in its sole discretion. Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security. For the purposes of determining the Holders who are entitled to participate in any distribution on the Securities in respect of which a Regular Record Date or a Special Record Date is not otherwise provided for in this Indenture, or for the purpose of any other action (unless provided for pursuant to Section 3.1), the Company may from time to time fix a date, not more than 90 days prior to the date of the payment of distribution or other action, as the case may be, as a record date for the determination of the identity of the Holders of record for such purposes. Section 3.8 Persons Deemed Owners. The Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name any Security is registered as the owner of such Security for the purpose of receiving payment of principal of (and premium, if any) and (subject to Section 3.7) interest on such Security and for all other purposes whatsoever, whether or 26 not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary. Section 3.9 Cancellation. All Securities surrendered for payment, redemption, registration of transfer or exchange or for credit against any sinking fund payment shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and all Securities so delivered shall be promptly cancelled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section, except as expressly permitted by this Indenture. Unless otherwise directed by a Company Order, delivery of which must be delivered in a timely manner to prevent such destruction, all cancelled Securities held by the Trustee shall be destroyed by it, and the Trustee, upon receipt of a written request of the Company, shall deliver a certificate of such destruction to the Company. Section 3.10 Interest. (a) Each Security will bear interest at the rate established for the series of Securities of which such Security is a part pursuant to Section 3.1 (the "Coupon Rate") from and including the original date of issuance of such Security until the principal thereof becomes due and payable, and on any overdue principal and (to the extent that payment of such interest is enforceable under applicable law) on any overdue installment of interest at the Coupon Rate, compounded quarterly, payable (subject to the provisions of Article Four) quarterly in arrears on March 31, June 30, September 30 and December 31 of each year (or in such other periodic installments on such other dates established as payment dates for the series of Securities of which such Security is a part pursuant to Section 3.1) (each, an "Interest Payment Date") commencing on the date established for the series of Securities of which such Security is a part pursuant to Section 3.1, to the Person in whose name such Security or any Predecessor Security is registered, at the close of business on the Regular Record Date for such interest installment, which, in respect of any Securities of which the Institutional Trustee of any CGMH Trust is the Holder or a Global Security, shall be the close of business on the Business Day next preceding that Interest Payment Date. Notwithstanding the foregoing sentence, if the Preferred Securities of a CGMH Trust are no longer in book-entry only form or, except if the Securities originally issued to such CGMH Trust are held by the Institutional Trustee of such CGMH Trust, the Securities of any series are not represented by a Global Security, the Company may select a Regular Record Date for such interest installment on such series of Securities which shall be any date more than 14 days but less than 60 days before an Interest Payment Date. (b) The amount of interest payable for any period will be computed on the basis of a 360-day year of twelve 30-day months and will include the first day but exclude the last day of such period. Except as provided in the following sentence, the 27 amount of interest payable for any period shorter than a full quarterly period for which interest is computed, will be computed on the basis of the actual number of days elapsed in each 30-day month. In the event that any date on which interest is payable on the Securities of any series is not a Business Day, then payment of interest payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. (c) If, at any time while the Institutional Trustee of a CGMH Trust is the Holder of Securities of any series, such CGMH Trust or such Institutional Trustee is required to pay any taxes, duties, assessments or governmental charges of whatever nature (other than withholding taxes) imposed by the United States, or any other taxing authority, then, in any case, the Company will pay as additional interest ("Additional Interest") on the Securities of such series, such additional amounts as shall be required so that the net amounts received and retained by such CGMH Trust and/or such Institutional Trustee, as the case may be, after paying such taxes, duties, assessments or other governmental charges will be equal to the amounts CGMH Trust and/or such Institutional Trustee, as the case may be, would have received had no such taxes, duties, assessments or other government charges been imposed. Section 3.11 Form and Payment. Except as provided in Section 3.12, the Securities of each series shall be issued in fully registered certificated form without interest coupons. Principal and interest on the Securities issued in certificated form will be payable, the transfer of such Securities will be registrable, and such Securities will be exchangeable, for Securities of the same series bearing identical terms and provisions at the office or agency of the Trustee; provided, however, that payment of interest may be made at the option of the Company by check mailed to the Holders of such Securities at such address as shall appear in the Security Register. Notwithstanding the foregoing, so long as the Holder of all Securities of any series is the Institutional Trustee of any CGMH Trust, the payment of the principal of and interest (including Compounded Interest and Additional Interest, if any) on Securities of such series will be made at such place and to such account as may be designated by the Institutional Trustee. Section 3.12 Global Securities. (a) In connection with Dissolution Event with respect to any CGMH Trust, (i) the Securities in non book-entry certificated form held by such CGMH Trust, or its Institutional Trustee, will be presented to the Trustee by the Institutional Trustee of such CGMH Trust in exchange for a Global Security in an aggregate principal amount equal to the aggregate principal amount of all outstanding Securities of the series issued to such CGMH Trust, to be registered in the name of the Depositary, or its nominee, and delivered by the Trustee to the Depositary for crediting to 28 the accounts of its participants pursuant to the instructions of the Regular Trustees of the relevant CGMH Trust. The Company upon any such presentation shall execute a Global Security in such aggregate principal amount and deliver the same to the Trustee for authentication and delivery in accordance with this Indenture. Payments on any Securities issued as a Global Security will be made to the Depositary; and (ii) if any Preferred Securities of a CGMH Trust are held in non book-entry certificated form, the Securities in non book-entry certificated form held by such CGMH Trust, or its Institutional Trustee, may be presented to the Trustee by the Institutional Trustee of such CGMH Trust and any Preferred Security Certificate which represents Preferred Securities of such CGMH Trust other than Preferred Securities held by the Depositary or its nominee ("Non Book-Entry Preferred Securities") will be deemed to represent Securities presented to the Trustee by such Institutional Trustee having an aggregate principal amount equal to the aggregate liquidation amount of the Non Book-Entry Preferred Securities until such Preferred Security Certificates are presented to the Security Registrar for transfer or reissuance at which time such Preferred Security Certificates will be cancelled and a Security, registered in the name of the holder of the Preferred Security Certificate or the transferee of the holder of such Preferred Security Certificate, as the case may be, with an aggregate principal amount equal to the aggregate liquidation amount of the Preferred Security Certificate cancelled, will be executed by the Company and delivered to the Trustee for authentication and delivery in accordance with this Indenture. On issue of such Securities, Securities with an equivalent aggregate principal amount that were presented by the Institutional Trustee to the Trustee will be deemed to have been cancelled. (b) A Global Security may be transferred, in whole but not in part, only to another nominee of the Depositary, or to a successor Depositary selected or approved by the Company or to a nominee of such successor Depositary. (c) If at any time the Depositary notifies the Company that it is unwilling or unable to continue as Depositary for any series of Securities or if at any time the Depositary for such series shall no longer be registered or in good standing under the Exchange Act, or other applicable statute or regulation, and a successor Depositary for such series is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such condition, as the case may be, the Company will execute, and, subject to this ArticleIII, the Trustee, upon written notice from the Company, will authenticate and deliver the Securities of such series in definitive registered form without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Security in exchange for such Global Security. In addition, the Company may at any time determine that the Securities of any series shall no longer be represented by a Global Security. In such event, the Company will execute, and subject to Section 3.5, the Trustee, upon receipt of an Officers Certificate evidencing such determination by the Company, will authenticate and deliver the Securities of such series in definitive registered form without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Security for such series in exchange for such Global Security. Upon the exchange of the Global Security for such Securities in definitive registered 29 form without coupons, in authorized denominations, the Global Security shall be cancelled by the Trustee. Such Securities in definitive registered form issued in exchange for the Global Security shall be registered in such names and in such authorized denominations as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Securities to the Depositary, for delivery to the Persons in whose names such Securities are so registered. ARTICLE IV SATISFACTION AND DISCHARGE; DEFEASANCE Section 4.1 Satisfaction and Discharge of Indenture. This Indenture shall upon Company Request cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities herein expressly provided for), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when (1) either (A) all Securities theretofore authenticated and delivered (other than (i) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 3.6 and (ii) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 10.3) have been delivered to the Trustee for cancellation; or (B) all such Securities not theretofore delivered to the Trustee for cancellation (i) have become due and payable, or (ii) will become due and payable at their Stated Maturity within one year, or (iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, and the Company, in the case of (i), (ii) or (iii) above, has deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal (and premium, if any) and interest to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be; 30 (2) the Company has paid or caused to be paid all other sums payable hereunder by the Company; and (3) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with. Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 6.7, the Company's obligation to pay the expenses of any CGMH Trust under Section 10.6 (except upon the application of subclauses 1(A) or 1(B)(i) above), the obligations of the Trustee to any Authenticating Agent under Section 6.14, and, if money shall have been deposited with the Trustee pursuant to subclause (B) of clause (1) of this Section, the obligations of the Trustee under Section 4.2 and the last paragraph of Section 10.3 shall survive. Section 4.2 Defeasance and Discharge. The following provisions shall apply to the Securities of each series unless specifically otherwise provided in a Board Resolution, Officers' Certificate or indenture supplemental hereto provided pursuant to Section 3.1. In addition to discharge of this Indenture pursuant to Sections 4.1 and 4.3, in the case of any series of Securities with respect to which an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal (and premium, if any) and interest, as certified pursuant to subparagraph (a) of Section 4.4 can be determined at the time of making the deposit referred to in such subparagraph (a), the Company shall be deemed to have paid and discharged the entire indebtedness on all the Securities of such a series as provided in this Section on and after the date the conditions set forth in Section 4.4 are satisfied, and the provisions of this Indenture with respect to the Securities of such series shall no longer be in effect (except as to (i) rights of registration of transfer and exchange of Securities of such series, (ii) substitution of mutilated, defaced, destroyed, lost or stolen Securities of such series, (iii) rights of Holders of Securities of such series to receive, solely from the trust fund described in subparagraph (a) of Section 4.4, payments of principal thereof and interest, if any, thereon upon the original stated due dates therefor (but not upon acceleration), and remaining rights of the Holders of Securities of such series to receive mandatory sinking fund payments, if any, (iv) the rights, obligations, duties and immunities of the Trustee hereunder, (v) this Section 4.2, (vi) the rights of the Holders of Securities of such series as beneficiaries hereof with respect to the property so deposited with the Trustee payable to all or any of them and (vii) the Company's obligation to pay the expenses of any CGMH Trust under Section 10.6) (hereinafter called "Defeasance"), and the Trustee at the cost and expense of the Company, shall execute proper instruments acknowledging the same. 31 Section 4.3 Covenant Defeasance. In the case of any series of Securities with respect to which an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal (and premium, if any) and interest, as certified pursuant to subparagraph (a) of Section 4.4 can be determined at the time of making the deposit referred to in such subparagraph (a), (i) the Company shall be released from its obligations under any covenants specified in or pursuant to this Indenture (except as to (A) rights of registration of transfer and exchange of Securities of such series, (B) substitution of mutilated, defaced, destroyed, lost or stolen Securities of such series, (C) rights of Holders of Securities of such series to receive, from the Company pursuant to Section 10.1, payments of principal thereof and interest, if any, thereon upon the original stated due dates therefor (but not upon acceleration), the Holders of Securities of such series to receive mandatory sinking fund payments, if any, (D) the rights, obligations, duties and immunities of the Trustee hereunder, (E) the rights of the Holders of Securities of such series as beneficiaries hereof with respect to the property so deposited with the Trustee payable to all or any of them and (F) the Company's obligation to pay the expenses of any CGMH Trust under Section 10.6), and (ii) the occurrence of any event specified in Sections 5.7(e) (with respect to any of the covenants specified in or pursuant to this Indenture) and 5.7(f) shall be deemed not to be or result in a Default, in each case with respect to the Outstanding Securities of such series as provided in this Section on and after the date the conditions set forth in Section 4.4 are satisfied (hereinafter called "Covenant Defeasance"), and the Trustee, at the cost and expense of the Company, shall execute proper instruments acknowledging the same. For this purpose, such Covenant Defeasance means that the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant (to the extent so specified in the case of Section 5.7(e)), whether directly or indirectly by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document, but the remainder of this Indenture and the Securities of such series shall be unaffected thereby. Section 4.4 Conditions to Defeasance or Covenant Defeasance. The following shall be the conditions to application of either Section 4.2 or 4.3 to the Outstanding Securities: (a) with reference to Section 4.2 or 4.3, the Company has irrevocably deposited or caused to be irrevocably deposited with the Trustee as funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of Securities of such series (i) cash in an amount, or (ii) direct obligations of the United States of America, backed by its full faith and credit ("U.S. Government Obligations"), maturing as to principal and interest, if any, at such times and in such amounts as will insure the availability of cash, or (iii) a combination thereof, in each case sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, (A) the principal of and interest, if any, on all Securities of such series on each date that such 32 principal or interest, if any, is due and payable, and (B) any mandatory sinking fund payments on the dates on which such payments are due and payable in accordance with the terms of this Indenture and the Securities of such series; (b) in the case of Defeasance under Section 4.2, the Company has delivered to the Trustee an Opinion of Counsel based on the fact that (x) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (y), since the date hereof, there has been a change in the applicable United States federal income tax law, in either case to the effect that, and such opinion shall confirm that, the Holders of the Securities of such series will not recognize income, gain or loss for United States federal income tax purposes as a result of such deposit, Defeasance and discharge and will be subject to United States federal income tax on the same amount and in the same manner and at the same times, as would have been the case if such deposit, Defeasance and discharge had not occurred; (c) in the case of Covenant Defeasance under Section 4.3, the Company has delivered to the Trustee an Opinion of Counsel to the effect that, and such opinion shall confirm that, the Holders of the Securities of such series will not recognize income, gain or loss for United States federal income tax purposes as a result of such deposit and Covenant Defeasance and will be subject to United States federal income tax on the same amount and in the same manner and at the same times, as would have been the case if such deposit and Covenant Defeasance had not occurred; (d) such Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any agreement or instrument to which the Company is a party or by which it is bound; and (e) the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent contemplated by this provision have been complied with. Section 4.5 Application of Trust Money. Subject to the provisions of the last paragraph of Section 10.3, all money and U.S. Government Obligations deposited with the Trustee pursuant to Section 4.4 shall be held in trust, and such money and all money from such U.S. Government Obligations shall be applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such money and U.S. Government Obligations has been deposited with the Trustee. Section 4.6 Indemnity for U.S. Government Obligations. The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations deposited pursuant to Section 4.4 or the principal or interest received in respect of such obligations 33 other than any such tax, fee or other charge that by law is for the account of the Holders of Outstanding Securities. Section 4.7 Reinstatement. If the Trustee is unable to apply any money or Government Obligations in accordance with Section 4.4 by reason of any legal preceding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company's obligations under this Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to Section 4.4, until such time as the Trustee or Paying Agent is permitted to apply all such money or Government Obligations in accordance with Section 4.4; provided that, if the Company has made any payment of principal or interest on the Securities of any series because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money or Government Obligations held by the Trustee or Paying Agent. ARTICLE V REMEDIES Section 5.1 Events of Default. The term "Event of Default" as used in this Indenture with respect to Securities of any series shall mean one of the following described events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (a) failure to pay in full interest accrued upon any Security of that series upon the conclusion of a period consisting of 20 consecutive quarters, commencing with the earliest quarter for which interest (including Deferred Interest) has not been paid in full, and continuance of such failure to pay for a period of 30 days; (b) the entry by a court having jurisdiction in the premises of a decree or order for relief in respect of the Company in an involuntary case under the Federal bankruptcy code, as now or hereafter constituted, or any other applicable Federal or State bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of the Company or for substantially all of its property, or ordering the winding-up or liquidation of its affairs and such decree or order shall remain unstayed and in effect for a period of 90 consecutive days; or (c) the commencement by the Company of a voluntary case under the Federal bankruptcy code, as now or hereafter constituted, or any other applicable Federal or State bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by the Company to the entry of an order for relief in an involuntary case under any such law, or the consent by the Company to the appointment of or taking possession by a receiver, 34 liquidator, assignee, trustee, custodian or sequestrator (or similar official) of the Company or for substantially all of its property, or the making by it of an assignment for the benefit of creditors. Section 5.2 Acceleration of Maturity. If any one or more of the above-described Events of Default shall happen with respect to Securities of any series at the time Outstanding, then, and in each and every such case, during the continuance of any such Event of Default, the Trustee or the Holders of 25% or more in principal amount of the Securities of such series then Outstanding may declare the principal amount of all the Securities of such series then Outstanding, if not then due and payable, to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by such Holders), and upon any such declaration the same shall become and be immediately due and payable, anything in this Indenture or in the Securities of such series contained to the contrary notwithstanding. This provision, however, is subject to the condition that, if at any time after the principal of all the Securities of such series shall have been so declared to be due and payable, all arrears of interest, if any, upon all the Securities of such series (with interest, to the extent that interest thereon shall be legally enforceable, on any overdue installment of interest at the rate borne by the Securities of such series) and all amounts owing the Trustee and any predecessor trustee hereunder under Section 6.7 and all other sums payable under this Indenture (except the principal of the Securities of such series which would not be due and payable were it not for such declaration) shall be paid by the Company, and every other Default under this Indenture, other than the non-payment of the principal of Securities of that series which have become due solely by such declaration of acceleration, shall have been made good to the reasonable satisfaction of the Trustee or of the Holders of a majority in principal amount of the Securities of such series then Outstanding, or provision deemed by the Trustee or by such Holders to be adequate therefor shall have been made, then and in every such case the Holders of a majority in principal amount of the Securities of such series then Outstanding may, on behalf of the Holders of all the Securities of such series, waive the Event of Default by reason of which the principal of the Securities of such series shall have been so declared to be due and payable and may rescind and annul such declaration and its consequences; but no such waiver, rescission or annulment shall extend to or affect any subsequent Default or impair any right consequent thereon. Any declaration by the Trustee pursuant to this Section 5.2 shall be by written notice to the Company, and any declaration or waiver by the Holders of Securities of any series pursuant to this Section 5.2 shall be by written notice to the Company and the Trustee. Section 5.3 Collection of Indebtedness and Suits for Enforcement by Trustee. If the Company shall fail for a period of 30 days to pay any installment of interest on the Securities of any series or shall fail to pay the principal of and premium, if any, on any of the Securities of such series when and as the same shall become due and payable, whether at maturity, or by call for redemption (otherwise than pursuant to a sinking fund) by declaration as authorized by this Indenture, or otherwise, or shall fail for a period of 30 days to make any sinking fund payment as to a series of Securities, then, upon demand 35 of the Trustee, the Company will pay to the Trustee for the benefit of the Holders of Securities of such series then Outstanding the whole amount which then shall have become due and payable on any such Security, with interest on the overdue principal and premium, if any, and (so far as the same may be legally enforceable) on the overdue installments of interest at the rate borne by the Securities of such series, and all amounts owing the Trustee and any predecessor trustee hereunder under Section 6.7. In case the Company shall fail forthwith to pay such amounts upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered to institute any action or proceeding at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action or proceeding to judgment or final decree, and may enforce any such judgment or final decree against the Company or any other obligor upon the Securities of such series, and collect the moneys adjudged or decreed to be payable out of the property of the Company or any other obligor upon the Securities of such series, wherever situated, in the manner provided by law. Every recovery of judgment in any such action or other proceeding, subject to the payment to the Trustee of all amounts owing the Trustee and any predecessor trustee hereunder under Section 6.7, shall be for the ratable benefit of the Holders of such series of Securities which shall be the subject of such action or proceeding. All rights of action upon or under any of the Securities or this Indenture may be enforced by the Trustee without the possession of any of the Securities and without the production of any thereof at any trial or any proceeding relative thereto. If a Default, of which a Responsible Officer of the Trustee has actual knowledge, with respect to any series of Securities occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities of such series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture, or in aid of the exercise of any power granted herein, or to enforce any other proper remedy. Section 5.4 Trustee to File Claims As Attorney-In-Fact. The Trustee is hereby appointed, and each and every Holder of the Securities, by receiving and holding the same, shall be conclusively deemed to have appointed the Trustee, the true and lawful attorney-in-fact of such Holder, with authority to make or file (whether or not the Company shall be in default in respect of the payment of the principal of, or interest on, any of the Securities), in its own name and as trustee of an express trust or otherwise as it shall deem advisable, in any receivership, insolvency, liquidation, bankruptcy, reorganization or other judicial proceeding relative to the Company or any other obligor upon the Securities or to their respective creditors or property, any and all claims, proofs of claim, proofs of debt, petitions, consents, other papers and documents and amendments of any thereof, as may be necessary or advisable in order to have the claims of the Trustee and any predecessor trustee hereunder and of the Holders of the Securities allowed in any such proceeding and to collect and receive any moneys or other property payable or deliverable on any such claim, and to execute and deliver any and all other papers and documents and to do and perform any and all other acts and things, as it 36 may deem necessary or advisable in order to enforce in any such proceeding any of the claims of the Trustee and any predecessor trustee hereunder and of any of such Holders in respect of any of the Securities; and any receiver, assignee, trustee, custodian or debtor in any such proceeding is hereby authorized, and each and every taker or Holder of the Securities, by receiving and holding the same, shall be conclusively deemed to have authorized any such receiver, assignee, trustee, custodian or debtor, to make any such payment or delivery only to or on the order of the Trustee, and to pay to the Trustee any amount due it and any predecessor trustee hereunder under Section 6.7; provided, however, that nothing herein contained shall be deemed to authorize or empower the Trustee to consent to or accept or adopt, on behalf of any Holder of Securities, any plan of reorganization or readjustment of the Company affecting the Securities or the rights of any Holder thereof, or to authorize or empower the Trustee to vote in respect of the claim of any Holder of any Securities in any such proceeding. Section 5.5 Application of Money Collected. Any moneys collected by the Trustee with respect to a series of Securities under this Article V shall be applied in the order following, at the date or dates fixed by the Trustee for the distribution of such moneys, upon presentation of the several Securities, and stamping thereon the payment, if only partially paid, and upon surrender thereof, if fully paid: First: To the payment of all amounts due to the Trustee and any predecessor trustee hereunder under Section 6.7. Second: Subject to Article XIV, in case the principal of the Outstanding Securities of such series shall not have become due and be unpaid, to the payment of interest on the Securities of such series, in the order of the maturity of the installments of such interest, with interest (to the extent that such interest has been collected by the Trustee) upon the overdue installments of interest at the rate borne by such Securities, such payments to be made ratably to the Persons entitled thereto. Third: Subject to Article XIV, in case the principal of the Outstanding Securities of such series shall have become due, by declaration or otherwise, to the payment of the whole amount then owing and unpaid upon the Securities of such series for principal and premium, if any, and interest, with interest on the overdue principal and premium, if any, and (to the extent that such interest has been collected by the Trustee) upon overdue installments of interest at the rate borne by the Securities of such series, and in case such moneys shall be insufficient to pay in full the whole amounts so due and unpaid upon the Securities of such series, then to the payment of such principal and premium, if any, and interest without preference or priority of principal and premium, if any, over interest, or of interest over principal and premium, if any, or of any installment of interest over any other installment of interest, or of any Security of such series over any other Security of such series, ratably to the aggregate of such principal and premium, if any, and accrued and unpaid interest. 37 Section 5.6 Control by Holders; Waiver of Past Default. The Holders of a majority in principal amount of the Outstanding Securities of any series may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee hereunder, or of exercising any trust or power hereby conferred upon the Trustee with respect to the Securities of such series; provided, however, that the Trustee shall have the right to decline to follow any such direction if the Trustee being advised by counsel determines that the action so directed may not lawfully be taken or would be unduly prejudicial to Holders not joining in such direction or would involve the Trustee in personal liability. Prior to any declaration accelerating the maturity of the Securities of any series, the Holders of a majority in aggregate principal amount of such series of Outstanding Securities may on behalf of the Holders of all of the Securities of such series waive any past default hereunder and its consequences except a default not theretofore cured in the payment of interest or any premium on or the principal of the Securities of such series or in respect of any covenant or provision hereof which under Article IX cannot be modified or waived without the consent of the Holder of each Outstanding Security of each series affected thereby; provided, however, that if the Securities of such series are held by a CGMH Trust or a trustee of such trust, such waiver or modification to such waiver shall not be effective until the holders of Trust Securities representing a majority in liquidation preference of Trust Securities of the applicable CGMH Trust shall have consented to such waiver or modification to such waiver; provided further, that if the consent of the Holder of each Outstanding Securities is required, such waiver shall not be effective until each holder of the Trust Securities of the applicable CGMH Trust shall have consented to such waiver. Upon any such waiver the Company, the Trustee and the Holders of the Securities of such series shall be restored to their former positions and rights hereunder, respectively, but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. Whenever any default hereunder shall have been waived as permitted by this Section 5.6, said default shall for all purposes of the Securities of such series and this Indenture cease to exist, and any Default or Event of Default arising therefrom shall be deemed to have been cured and to be not continuing. Section 5.7 Limitation on Suits; Default. No Holder of any Security of any series shall have any right to institute any action, suit or proceeding at law or in equity for the execution of any trust hereunder or for the appointment of a receiver or for any other remedy hereunder, in each case with respect to a Default with respect to such series of Securities, unless such Holder previously shall have given to the Trustee written notice of the happening of one or more of the Defaults herein specified with respect to such series of Securities, and unless also the Holders of 25% or more in principal amount of the Securities of such series then Outstanding shall have requested the Trustee in writing to take action in respect of the matter complained of, and unless also there shall have been offered to the Trustee security and indemnity satisfactory to it against the costs, expenses and liabilities to be incurred therein or thereby, and the Trustee, for 60 days after receipt of such notification, request and offer of indemnity, shall have neglected or refused to institute any such action, suit or proceeding; and such notification, request and offer of indemnity are 38 hereby declared in every such case to be conditions precedent to any such action, suit or proceeding by any Holder of any Security of such series; it being understood and intended that no one or more of the Holders of Securities of such series shall have any right in any manner whatsoever by his or their action to enforce any right hereunder, except in the manner herein provided, and that every action, suit or proceeding at law or in equity shall be instituted, had and maintained in the manner herein provided and for the equal and ratable benefit of all Holders of the Outstanding Securities of such series; provided, however, that nothing contained in this Indenture or in the Securities of such series shall affect or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, and premium, if any, and interest on the Securities of such series to the respective Holders of such Securities at the respective due dates in such Securities stated, or affect or impair the right, which is also absolute and unconditional, of such Holders to institute suit to enforce the payment thereof. The following events shall be "Defaults" with respect to any series of Securities under this Indenture: (a) an Event of Default with respect to such series specified in Section 5.1; or (b) the failure of the Company to pay any installment of interest on any Security of such series, when and as the same shall become payable, which failure shall have continued unremedied for a period of 30 days, it being understood that the occurrence of an Extended Interest Payment Period in accordance with the terms of such Security will not constitute such a default; or (c) the failure of the Company to pay the principal of (and premium, if any, on) any Security of such series, when and as the same shall become payable, whether at maturity as therein expressed, by call for redemption (otherwise than pursuant to a sinking fund), by declaration as authorized by this Indenture or otherwise, whether or not permitted by Article XIV; or (d) the failure of the Company to pay a sinking fund installment, if any, when and as the same shall become payable by the terms of a Security of such series, which failure shall have continued unremedied for a period of 30 days, whether or not permitted by Article XIV; or (e) the failure of the Company, subject to the provisions of Section 8.1, to observe and perform any other of the covenants or agreements on the part of the Company contained in this Indenture (including any indenture supplemental hereto) (other than a covenant or agreement which has been expressly included in this Indenture solely for the benefit of a series of Securities other than that series), which failure shall not have been remedied for a period of 90 days after written notice shall have been given to the Company by the Trustee or shall have been given to the Company and the Trustee by Holders of 25% or more in aggregate principal amount of the Securities of such series then Outstanding, specifying such failure and requiring the Company to remedy the same; or 39 (f) in the event Securities of a series are issued and sold to a CGMH Trust or a trustee of such trust in connection with the issuance of Trust Securities by such CGMH Trust, such CGMH Trust shall have voluntarily or involuntarily dissolved, wound-up its business or otherwise terminated its existence except in connection with (i) the distribution of Securities to holders of Trust Securities in liquidation or redemption of their interests in such CGMH Trust upon a Special Event with respect to such CGMH Trust, (ii) the redemption of all of the outstanding Trust Securities of such CGMH Trust or (iii) certain mergers, consolidations or amalgamations, each as permitted by the Declaration of such CGMH Trust; or (g) any other Default provided with respect to Securities of that series. Section 5.8 Costs and Attorneys' Fees in Legal Proceedings. All parties to this Indenture and the Holders of the Securities agree that the court may in its discretion require, in any action, suit or proceeding for the enforcement of any right or remedy under this Indenture, or in any action, suit or proceeding against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such action, suit or proceeding of an undertaking to pay the costs of such action, suit or proceeding, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such action, suit or proceeding, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided, however, that the provisions of this Section 5.8 shall not apply to any action, suit or proceeding instituted by the Trustee, to any action, suit or proceeding instituted by any one or more Holders of Securities holding in the aggregate more than 10% in principal amount of the Outstanding Securities, or to any action, suit or proceeding instituted by any Holder of Securities for the enforcement of the payment of the principal of or premium, if any, or the interest on, any of the Securities, on or after the respective due dates expressed in such Securities. Section 5.9 Remedies Cumulative. Except as provided in the last sentence of Section 3.6, no remedy herein conferred upon or reserved to the Trustee or to the Holders of Securities of any series is intended to be exclusive of any other remedy or remedies, and each and every remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. No delay or omission of the Trustee or of any Holder of the Securities of any series to exercise any right or power accruing upon any Default shall impair any such right or power or shall be construed to be a waiver of any such Default or an acquiescence therein; and every power and remedy given by this Article V to the Trustee and to the Holders, respectively, may be exercised from time to time and as often as may be deemed expedient by the Trustee or by the Holders, as the case may be. In case the Trustee or any Holder of Securities shall have proceeded to enforce any right under this Indenture and the proceedings for the enforcement thereof shall have been discontinued or abandoned because of waiver or for any other reason or shall have been adjudicated adversely to the Trustee or to such Holder, then and in every such case the Company, the Trustee and the Holders shall severally and respectively be 40 restored to their former positions and rights hereunder and thereafter all rights, remedies and powers of the Trustee and the Holders shall continue as though no such proceedings had been instituted, except as to any matters so waived or adjudicated. Section 5.10 Waiver of Stay or Extension Laws. The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no law had been enacted. ARTICLE VI THE TRUSTEE Section 6.1 Certain Duties and Responsibilities. (a) Except during the continuance of a Default; (1) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture. (b) In case a Default with respect to any series of Securities, of which a Responsible Officer of the Trustee has actual knowledge, has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (c) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that (1) this subsection shall not be construed to limit the effect of subsection (a) of this Section; 41 (2) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; (3) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a majority in principal amount of the Outstanding Securities of any series determined as provided in Section 5.6, relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture with respect to the Securities of such series; and (4) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or indemnity, reasonably satisfactory to it, against such risk or liability is not reasonably assured to it. (d) Whether or not therein expressly so provided, every provision of this Indenture relating to the conductor affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section. Section 6.2 Notice of Defaults. Within 90 days after the occurrence of any Default hereunder with respect to Securities of any series, the Trustee shall transmit by mail to all Holders of Securities of such series, as their names and addresses appear in the Security Register, notice of such Default hereunder actually known to a Responsible Officer of the Trustee, unless such Default shall have been cured or waived; provided that, except in the case of a Default in the payment of the principal of (or premium, if any) or interest on any Security of such series or in the payment of any sinking fund installment with respect to Securities of such series, the Trustee shall be protected in withholding such notice if and so long as a Responsible Officer of the Trustee in good faith determines that the withholding of such notice is in the interest of the Holders of Securities of such series; and provided, further, that in the case of any Default of the character specified in Section 5.7(e) with respect to Securities of such series, no such notice to Holders shall be given until at least 30 days after the occurrence thereof. Section 6.3 Certain Rights of Trustee. Subject to the provisions of Section 6.1 (a) the Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; 42 (b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order, and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution; (c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, conclusively rely upon an Officers' Certificate; (d) the Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity, reasonably satisfactory to it, against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; (f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney; and (g) the Trustee may execute any of the trust or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder. (h) the Trustee shall not be charged with knowledge of any Default or Event of Default with respect to the Securities, unless either (1) a Responsible Officer shall have actual knowledge of such Default or Event of Default or (2) written notice of such Default or Event of Default shall have been given to the Trustee by the Company or by any Holder of the Securities; and (i) the permissive rights of the Trustee enumerated herein shall not be construed as duties. Section 6.4 Not Responsible for Recitals or Issuance of Securities. The recitals contained herein and in the Securities, except the Trustee's certificates of authentication, shall be taken as the statements of the Company, and the 43 Trustee or any Authenticating Agent assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities. The Trustee or any Authenticating Agent shall not be accountable for the use or application by the Company of Securities or the proceeds thereof. Section 6.5 May Hold Securities. The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 6.8 and 6.13, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent. Section 6.6 Money Held in Trust. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Company. Section 6.7 Compensation and Reimbursement. The Company agrees (1) to pay to the Trustee from time to time such reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents, nominees, custodians and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and (3) to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trust hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. As security for the performance of the obligations of the Company under this Section, the Trustee shall have a lien prior to the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of Holders of particular Securities. The obligations of the Company under this Section shall 44 survive the removal or resignation of the Trustee and the satisfaction and discharge of this Indenture. When the Trustee incurs any expenses or renders any services after the occurrence of an Event of Default specified in Section 5.1(b) or Section 5.1(c), such expenses and the compensation for such services are intended to constitute expenses of administration under the United States Bankruptcy Code (Title 11 of the United States Code) or any similar federal or state law for the relief of debtors. Section 6.8 Disqualification; Conflicting Interests. The Trustee shall be subject to the provisions of Section 310(b) of the Trust Indenture Act of 1939 during the period of time provided for therein. In determining whether the Trustee has a conflicting interest as defined in Section 310(b) of the Trust Indenture Act of 1939 with respect to the Securities of any series, there shall be excluded for purposes of the conflicting interest provisions of such Section 310(b) the Securities of every other series issued under this Indenture. Nothing herein shall prevent the Trustee from filing with the Commission the application referred to in the second to last paragraph of Section 310(b) of the Trust Indenture Act of 1939. Section 6.9 Corporate Trustee Required; Eligibility. There shall at all times be a Trustee hereunder which shall be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by Federal or State authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of said supervision or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. Section 6.10 Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 6.11. (b) The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by Section 6.11 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series. 45 (c) The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series, delivered to the Trustee and to the Company. (d) If at any time: (1) the Trustee shall fail to comply with Section 6.8(a) after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or (2) the Trustee shall cease to be eligible under Section 6.9 and shall fail to resign after written request therefor by the Company or by any such Holder, or (3) the Trustee shall become incapable of acting or shall be adjudged bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (i) the Company, by a Board Resolution, may remove the Trustee with respect to all Securities, or (ii) subject to Section 5.8, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor Trustee or Trustees. (e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series) and shall comply with the applicable requirements of Section 6.11. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 6.11, become the successor Trustee with respect to the Securities of such series and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Company or the Holders and accepted appointment in the manner required by Section 6.11, any Holder who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series. 46 (f) The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series by mailing written notice of such event by first-class mail, postage prepaid, to all Holders of Securities of such series as their names and addresses appear in the Security Register. Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office. Section 6.11 Acceptance of Appointment by Successor. (a) In case of the appointment hereunder of a successor Trustee with respect to all Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. (b) In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to the Securities of all series for which it is the Trustee hereunder, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any mist or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such 47 successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates. (c) Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in paragraph (a) or (b) of this Section, as the case may be. (d) No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article. (e) The Trustee shall not be liable for the acts or omissions to act of any successor Trustee. Section 6.12 Merger, Conversion, Consolidation or Succession to Business. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities. Section 6.13 Preferential Collection of Claims Against Company. The Trustee shall comply with the Trust Indenture Act Section 311(a), excluding any creditor relationship listed in the Trust Indenture Act Section 311(b). A Trustee who has resigned or been removed shall be subject to the Trust Indenture Act Section 311(a) to the extent indicated therein. Section 6.14 Appointment of Authenticating Agent. At any time when any of the Securities remain Outstanding the Trustee may appoint an Authenticating Agent or Agents with respect to one or more series of Securities which shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon exchange, registration of transfer or partial redemption thereof or pursuant to Section 3.6, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee's certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of 48 authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section. Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent. An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall give notice of such appointment by first-class mail, postage prepaid, to all Holders of Securities of the series with respect to which such Authenticating Agent will serve, as their names and addresses appear in the Security Register. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section. The Company agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section. If an appointment with respect to one or more series is made pursuant to this Section, the Securities of such series may have endorsed thereon an alternative certificate of authentication in the following form: "This is one of the Securities of the series designated herein referred to in the within-mentioned Indenture. 49 JPMORGAN CHASE BANK, As Trustee By: ______________________________ As Authenticating Agent By: ______________________________ Authorized Officer 50 ARTICLE VII HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY Section 7.1 Company to Furnish Trustee Names and Addresses of Holders. The Company will furnish or cause to be furnished to the Trustee (a) semi-annually not more than 15 days after each Regular Record Date a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of Securities of such series as of the preceding March 1 or September 1, or as of such Regular Record Date, as the case may be, and (b) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished; provided that if and so long as the Trustee shall be the Security Registrar for such series, such list shall not be required to be furnished. Section 7.2 Preservation of Information; Communications to Holders. Holders may communicate pursuant to the Trust Indenture Act Section 312(b) with other Holders with respect to their rights under this Indenture and the Securities. The Company, the Trustee, the Registrar and any other person shall have the protection of the Trust Indenture Act Section 312(c). Section 7.3 Reports by Trustee. (a) Within 60 days after May 15 of each year commencing with the year 2005, the Trustee shall transmit by mail to all Holders of Securities for which it is Trustee hereunder, as their names and addresses appear in the Security Register, a brief report dated as of such May 15 with respect to: (1) its eligibility under Section 6.9 and its qualifications under Section 6.8, or in lieu thereof, if to the best of its knowledge it has continued to be eligible and qualified under said Sections, a written statement to such effect; (2) the character and amount of any advances (and if the Trustee elects so to state, the circumstances surrounding the making thereof) made by the Trustee (as such) which remain unpaid on the date of such report, and for the reimbursement of which it claims or may claim a lien or charge, prior to that of such Securities, on any property or funds held or collected by it as Trustee, except that the Trustee shall not be required (but may elect) to report such advances if such advances so remaining unpaid aggregate not more than -1/2 of 1% of the principal amount of such Securities Outstanding on the date of such report; 51 (3) the amount, interest rate and maturity date of all other indebtedness owing by the Company (or by any other obligor on the Securities) to the Trustee in its individual capacity, on the date of such report, with a brief description of any property held as collateral security therefor, except an indebtedness based upon a creditor relationship arising in any manner described in Section 6.13(b)(2), (3), (4) or (6); (4) the property and funds, if any, physically in the possession of the Trustee as such on the date of such report; (5) any additional issue of Securities for which it is Trustee hereunder which the Trustee has not previously reported; and (6) any action taken by the Trustee in the performance of its duties hereunder which it has not previously reported and which in its opinion materially affects such Securities, except action in respect of a default, notice of which has been or is to be withheld by the Trustee in accordance with Section 6.2. (b) The Trustee shall transmit by mail to all Holders of Securities for which it is Trustee hereunder, as their names and addresses appear in the Security Register, a brief report with respect to the character and amount of any advances (and if the Trustee elects so to state, the circumstances surrounding the making thereof) made by the Trustee (as such) since the date of the last report transmitted pursuant to subsection (a) of this Section (or if no such report has yet been so transmitted, since the date of execution of this instrument) for the reimbursement of which it claims or may claim a lien or charge, prior to that of such Securities, on property or funds held or collected by it as Trustee and which it has not previously reported pursuant to this subsection, except that the Trustee shall not be required (but may elect) to report such advances if such advances remaining unpaid at any time aggregate 10% or less of the principal amount of such Securities Outstanding at such time, such report to be transmitted within 90 days after such time. (c) A copy of each such report shall, at the time of such transmission to such Holders, be filed by the Trustee with each securities exchange upon which any such Securities are listed, with the Commission and with the Company. The Company will notify the Trustee when any such Securities are listed on any securities exchange. Section 7.4 Reports by Company. The Company shall: (1) file with the Trustee, within 15 days after the Company is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) which the Company may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934; or, if the Company is not required to file information, documents or reports pursuant to either of said Sections, then it shall file with the Trustee and the 52 Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Securities Exchange Act of 1934 in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations; (2) file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations; and (3) transmit by mail to all Holders, as their names and addresses appear in the Security Register, within 30 days after the filing thereof with the Trustee, such summaries of any information, documents and reports required to be filed by the Company pursuant to paragraphs (1) and (2) of this Section as may be required by rules and regulations prescribed from time to time by the Commission. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee's receipt of such reports shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates). ARTICLE VIII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE Section 8.1 Company May Consolidate, Etc., Only on Certain Terms. The Company shall not consolidate with or merge into any other corporation or convey, transfer or lease its properties and assets substantially as an entirety to any Person, unless: (1) the Person formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Company substantially as an entirety shall be a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of (and premium, if any) and interest on all the Securities and the performance of every covenant of this Indenture on the part of the Company to be performed or observed; 53 (2) immediately after giving effect to such transaction, no Default, and no event which, after notice or lapse of time or both, would become a Default, shall have happened and be continuing; and (3) the Company has delivered to the Trustee an Officer's Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with. Section 8.2 Successor Corporation Substituted. Upon any consolidation of the Company with, or merger of the Company into, any other corporation or any conveyance, transfer or lease of the properties and assets of the Company substantially as an entirety in accordance with Section 8.1, the successor corporation formed by such consolidation or into with the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor corporation had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor corporation shall be relieved of all obligations and covenants under this Indenture and the Securities. ARTICLE IX SUPPLEMENTAL INDENTURES Section 9.1 Supplemental Indentures Without Consent of Holders. Without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes: (1) to evidence the succession of another corporation to the Company and the assumption by any such successor of the covenants of the Company contained herein and in the Securities, pursuant to Article VIII; or (2) to add to the covenants of the Company for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of one or more specified series) or to surrender any right or power herein conferred upon the Company; or (3) to add any additional Defaults; or (4) to change or eliminate any of the provisions of this Indenture, provided that any such change or elimination shall become effective only when 54 there is no Security Outstanding of any series created prior to the execution of such supplemental indenture which is entitled to the benefit of such provision; or (5) to secure the Securities; or (6) to establish the form or terms of Securities of any series as permitted by Sections 2.1 and 3.1; or (7) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 6.11(b); or (8) to cure any ambiguity, to correct or supplement any provision herein which may be inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture, provided such action shall not adversely affect the interests of the Holders of Securities of any series in any material respect. Section 9.2 Supplemental Indentures with Consent of Holders. With the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities of each series affected by such supplemental indenture, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities of such series under this Indenture; provided that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby, (1) change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon (including any change in the Floating or Adjustable Rate Provision pursuant to which such rate is determined that would reduce that rate for any period) or any premium payable upon the redemption thereof, or change any Place of Payment where, or the coin or currency in which, any Security or any premium or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or modify the provisions of this Indenture with respect to the subordination of the Securities in a manner adverse to the Holders, or (2) reduce the percentage in principal amount of the Outstanding Securities of any series, the consent of whose Holders is required for any 55 such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture, or (3) modify any of the provisions of this Section or Section 5.6, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby; provided that this clause shall not be deemed to require the consent of any Holder with respect to changes in the references to "the Trustee" and concomitant changes in this Section or the deletion of this proviso, in accordance with the requirements of Sections 6.11(b) and 9.1(8), or (4) remove or impair the rights of any Holder of Securities to bring a Direct Action in certain circumstances, as provided in Section 15.1; provided, further, that if the Securities of such series are held by a CGMH Trust or a trustee of such trust, such supplemental indenture shall not be effective until the holders of a majority in liquidation preference of Trust Securities of the applicable CGMH Trust shall have consented to such supplemental indenture; provided, further, that if the consent of the Holder of each Outstanding Securities is required, such supplemental indenture shall not be effective until each holder of the Trust Securities of the applicable CGMH Trust shall have consented to such supplemental indenture. A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series. It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. Section 9.3 Execution of Supplemental Indentures. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, in addition to the documents required by Section 1.2, and (subject to Section 6.1) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. 56 Section 9.4 Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article, this Indenture shall he modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby to the extent provided therein. Section 9.5 Conformity with Trust Indenture Act. Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as then in effect. Section 9.6 Reference in Securities to Supplemental Indentures. Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series. ARTICLE X COVENANTS Section 10.1 Payment of Principal, Premium and Interest. The Company covenants and agrees for the benefit of each series of Securities that it will duly and punctually pay the principal of (and premium, if any) and interest on the Securities of that series in accordance with the terms of the Securities of such series and this Indenture, and will duly comply with all other terms, agreements and conditions contained in, or made in the Indenture for the benefit of, the Securities of such series. Section 10.2 Maintenance of Office or Agency. The Company will maintain in each Place of Payment for any series of Securities an office or agency where Securities of that series may be presented or surrendered for payment, where Securities of that series may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands. 57 The Company may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in each Place of Payment for Securities of any series for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. Section 10.3 Money for Securities Payments to Be Held in Trust. If the Company shall at any time act as its own Paying Agent with respect to any series of Securities, it will, on or before each due date of the principal of (and premium, if any) or interest on any of the Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal (and premium, if any) or interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act. Whenever the Company shall have one or more Paying Agents for any series of Securities, it will, prior to each due date of the principal of (and premium, if any) or interest on any Securities of that series, deposit with a Paying Agent a sum sufficient to pay the principal (and premium, if any) or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act. The Company will cause each Paying Agent for any series of Securities other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will: (1) hold all sums held by it for the payment of the principal of (and premium, if any) or interest on Securities of that series in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided; (2) give the Trustee notice of any default by the Company (or any other obligor upon the Securities of that series) in the making of any payment of principal (and premium, if any) or interest on the Securities of that series; and (3) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent. The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such 58 Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of (and premium, if any) or interest on any Security of any series and remaining unclaimed for three years after such principal (and premium, if any) or interest has become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in the Borough of Manhattan, The City of New York, New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company. Section 10.4 Statement by Officers as to Default. The Company will deliver to the Trustee, within 120 days after the end of each fiscal year of the Company ending after the date hereof, an Officers' Certificate stating whether or not to the best knowledge of the signers thereof the Company is in default in the performance and observance of any of the terms, provisions and conditions of Sections 10.1 to 10.3, inclusive, and if the Company shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge. Section 10.5 Covenants as to CGMH Trusts. For so long as any Trust Securities of a CGMH Trust remain outstanding, the Company will (i) maintain 100% direct or indirect ownership of the Common Securities of such CGMH Trust; provided, however, that any permitted successor of the Company hereunder may succeed to the Company's ownership of such Common Securities, (ii) not voluntarily dissolve, wind up or terminate such CGMH Trust, except in connection with a distribution of Securities upon a Special Event, and in connection with certain mergers, consolidations or amalgamations permitted by the Declaration of the applicable CGMH Trust, (iii) timely perform its duties as Sponsor of the applicable CGMH Trust, (iv) use its reasonable efforts to cause such CGMH Trust to (a) remain a business trust, except in connection with a distribution of Securities to the holders of Trust Securities as provided in the Declaration of such CGMH Trust, the redemption of all of the Trust Securities and in connection with certain mergers, consolidations or amalgamations permitted by the Declaration of such CGMH Trust, and (b) otherwise continue to be classified as a grantor trust for United States federal income tax purposes and (v) not knowingly take any action 59 that would cause such CGMH Trust to not be classified as a grantor trust for United States federal income tax purposes. Section 10.6 Payment of Expenses. (a) In connection with the offering, sale and issuance of each series of Securities to the Institutional Trustee of a CGMH Trust and in connection with the sale of Trust Securities by such CGMH Trust, the Company, in its capacity as borrower with respect to such Securities, shall: (i) pay all costs and expenses relating to the offering, sale and issuance of such Securities, including commissions to the underwriters payable pursuant to the applicable Underwriting Agreement and compensation of the Trustee under this Indenture in accordance with the provisions of Section 6.7; (ii) pay all costs and expenses of such CGMH Trust (including, but not limited to, costs and expenses relating to the organization of the trust, the offering, sale and issuance of the Trust Securities of such CGMH Trust (including commissions to the underwriters in connection therewith), the fees and expenses of the Institutional Trustee, the Regular Trustees and the Delaware Trustee of such CGMH Trust, the costs and expenses relating to the operation, maintenance and dissolution of such CGMH Trust and the enforcement by such Institutional Trustee of the rights of the holders of the Preferred Securities of such CGMH Trust, including without limitation, costs and expenses of accountants, attorneys, statistical or bookkeeping services, expenses for printing and engraving and computing or accounting equipment, paying agent(s), registrar(s), transfer agent(s), duplicating, travel and telephone and other telecommunications expenses and costs and expenses incurred in connection with the acquisition, financing, and disposition of assets of such CGMH Trust); (iii) be primarily liable for any indemnification obligations arising with respect to the Declaration of such CGMH Trust; (iv) pay any and all taxes (other than United States withholding taxes in respect of amounts paid on the Securities held by such CGMH Trust) and all liabilities, costs and expenses with respect to such taxes of such CGMH Trust. (b) Upon termination of this Indenture or any series of Securities or the removal or resignation of the Trustee pursuant to Section 6.10, the Company shall pay to the Trustee all amounts accrued and owing to the Trustee to the date of such termination, removal or resignation. Upon termination of the Declaration of any CGMH Trust or the removal or resignation of the Delaware Trustee or the Institutional Trustee, as the case may be, pursuant to Section 5.6 of the Declaration of such CGMH Trust, the Company shall pay to such Delaware Trustee or such Institutional Trustee, as the case may be, all amounts accrued and owing to such Delaware Trustee or such Institutional Trustee, as the case may be, to the date of such termination, removal or resignation. 60 Section 10.7 Listing on an Exchange. If Securities of any series are to be issued as a Global Security in connection with the distribution of such Securities to the holders of the Preferred Securities of a CGMH Trust upon a Dissolution Event with respect to such CGMH Trust, the Company will use its best efforts to list such series of Securities on the New York Stock Exchange, Inc. or on such other securities exchange as the Preferred Securities of such CGMH Trust are then listed. The Company will promptly notify the Trustee in writing of any Securities that will be listed on any securities exchange. Section 10.8 Future Issuance of Securities under this Indenture. Any Securities issued under this Indenture shall either (x) be issued with the concurrence or approval of the staff of the Federal Reserve Bank of New York or the staff of the Board of Governors of the Federal Reserve System or (y) qualify at the time of issuance for tier 1 capital treatment (irrespective of any limits on the amount of Citigroup Inc.'s tier 1 capital) under the applicable capital adequacy guidelines, regulations, policies or published interpretations of the Board of Governors of the Federal Reserve System. ARTICLE XI REDEMPTION OF SECURITIES Section 11.1 Applicability of Article; Federal Reserve Approval. Securities of each series are redeemable before their respective Stated Maturities in accordance with their respective terms and (except as otherwise specified as contemplated by Section 3.1 for Securities of any series) in accordance with this Article. Any redemption of any series of Securities, in whole or in part, prior to their respective Stated Maturities shall be subject to receipt by the Company of prior written approval from the Federal Reserve Bank of New York, if then required under applicable capital adequacy guidelines, regulations or policies of the Board of Governors of the Federal Reserve System. Section 11.2 Election to Redeem; Notice to Trustee. (a) Subject to the provisions of Section 11.2(b) and to the other provisions of this Article XI , except as otherwise may be specified in this Indenture or, with respect to any series of Securities, as otherwise specified as contemplated by Section 3.1 for the Securities of such series, the Company shall have the right to redeem any series of Securities, in whole or in part, from time to time, on or after the Redemption Option Date for such series at the Redemption Price. The election of the Company to redeem any Securities redeemable at the election of the Company shall be evidenced by a Board Resolution. In case of any redemption at the election of the Company of less than all the Securities of any series, the Company shall, at least 40 days (unless a shorter period is acceptable to the Trustee), but not more than 60 days, prior to the Redemption Date fixed by the Company, notify the Trustee of such Redemption Date and of the principal amount 61 of Securities of such series to be redeemed. In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officers' Certificate evidencing compliance with such restriction. (b) If a partial redemption of any series of Securities would result in the delisting of the Preferred Securities of the CGMH Trust that purchased such Securities from any national securities exchange or other organization on which the Preferred Securities of such CGMH Trust are then listed, the Company shall not be permitted to effect such partial redemption and may only redeem such series of Securities in whole. Section 11.3 Selection by Trustee of Securities to Be Redeemed. If less than all the Securities of any series are to be redeemed, the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series not previously called for redemption, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions (equal to the minimum authorized denomination for Securities of that series or any integral multiple thereof) of the principal amount of Securities of such series of a denomination larger than the minimum authorized denomination for Securities of that series; provided, that, if at the time of redemption such Securities are registered as a Global Security, the Depositary shall determine, in accordance with its procedures, the principal amount of such Securities held by each Security Beneficial Owner to be redeemed. The Trustee shall promptly notify the Company in writing of the Securities selected for redemption and, in case of any Securities selected for partial redemption, the principal amount thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed. Section 11.4 Notice of Redemption. Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed, at his address appearing in the Security Register. All notices of redemption shall state: (1) the Redemption Date, (2) the Redemption Price, 62 (3) if less than all the Outstanding Securities of any series are to be redeemed, the identification (and, in the case of partial redemption, the principal amounts) of the particular Securities of such series to be redeemed, (4) that on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and that interest thereon will cease to accrue on and after said date, (5) the place or places where such Securities are to be surrendered for payment of the Redemption Price, and (6) that the redemption is for a sinking fund, if such is the case. Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company's request, by the Trustee in the name and at the expense of the Company. Section 11.5 Deposit of Redemption Price. Prior to 10:00 a.m., New York City time, on any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 10.3) an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the Securities which are to be redeemed on that date. Section 11.6 Securities Payable on Redemption Date. Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest) such Securities shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, together with accrued interest to the Redemption Date; provided that installments of interest whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 3.7. If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal (and premium, if any) shall, until paid, bear interest from the Redemption Date at the rate prescribed therefor in the Security. The Redemption Price shall be paid prior to 12:00 noon, New York City time, on the date of such redemption or such earlier time as the Company determines, provided that the Company shall deposit with the Trustee an amount sufficient to pay the 63 Redemption Price by 10:00 a.m., New York City time, on the date such Redemption Price is to be paid. Section 11.7 Securities Redeemed in Part. Any Security which is to be redeemed only in part shall be surrendered at a Place of Payment for Securities of that series (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities of the same series, of like tenor and of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered. Section 11.8 Tax Event Redemption. If a Tax Event with respect to any CGMH Trust has occurred and is continuing and: (a) the Company has received a Redemption Tax Opinion with respect to such CGMH Trust; or (b) after receiving a Tax Event Opinion, the Regular Trustees of such CGMH Trust shall have been informed by tax counsel rendering the Tax Event Opinion that a No Recognition Opinion cannot be delivered to such CGMH Trust, then, notwithstanding Section 11.2(a) but subject to Section 11.2(b) and Section 11.1, the Company shall have the right upon not less than 30 days nor more than 60 days notice to the Holders of Securities of the series issued to such CGMH Trust, or to its Institutional Trustee, to redeem such Securities, in whole or in part, for cash within 90 days following the occurrence of such Tax Event at the Redemption Price, provided that if at the time there is available to the Company or such CGMH Trust the opportunity to eliminate, within such 90-day period, the Tax Event by taking some ministerial action ("Ministerial Action"), such as filing a form or making an election, or pursuing some other similar reasonable measure which has no adverse effect on the Company, the Trust or the holders of the Trust Securities of such CGMH Trust, the Company or such CGMH Trust shall pursue such Ministerial Action in lieu of redemption, and, provided further that the Company shall have no right to redeem such Securities while the Company or such CGMH Trust is pursuing any Ministerial Action pursuant to its obligations under the Declaration of such CGMH Trust. 64 ARTICLE XII SINKING FUNDS Section 12.1 Applicability of Article. The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities of a series except as otherwise specified as contemplated by Section 3.1 for the Securities of such series. The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a "mandatory sinking fund payment," and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an "optional sinking fund payment." If provided for by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 12.2. Each sinking fund payment shall be applied to the redemption of Securities as provided for by the terms of Securities of such series. Section 12.2 Satisfaction of Sinking Fund Payments with Securities. Unless the form or terms of any series of Securities shall provide otherwise, the Company (1) may deliver to the Trustee Outstanding Securities of a series (other than any previously called for redemption) and (2) may apply as a credit Securities of a series which have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to any Securities of such series required to be made pursuant to the terms of such Securities as provided for by the terms of such Securities; provided that such Securities have not been previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the Redemption Price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly. Section 12.3 Redemption of Securities for Sinking Fund. Not less than 60 days prior to each sinking fund payment date for any series of Securities the Company will deliver to the Trustee an Officer Certificate specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of that series, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting Securities of that series pursuant to Section 12.2 and will also deliver to the Trustee any Securities to be so delivered. Not less than 45 days before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 11.3 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 11.4. The Company shall deposit the amount of cash, if any, required for such 65 sinking fund payment with the Trustee in the manner provided in Section 11.5. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 11.6 and 11.7. ARTICLE XIII EXTENSION OF INTEREST PAYMENT PERIOD. The Company shall have the right, at any time and from time to time during the term of the Securities of any series, to defer payments of interest by extending the interest payment period of all Securities of such series for a period not exceeding 20 consecutive quarters (the "Extended Interest Payment Period"), during which Extended Interest Payment Period no interest shall be due and payable on Securities of such series; provided that no Extended Interest Payment Period may extend beyond the Maturity of such Securities. To the extent permitted by applicable law, interest, the payment of which has been deferred because of the extension of the interest payment period pursuant to this Section 13.1, will bear interest thereon at the Coupon Rate compounded quarterly for each quarter of the Extended Interest Payment Period ("Compounded Interest"). At the end of any Extended Interest Payment Period with respect to any series of Securities, the Company shall pay all interest accrued and unpaid on such Securities, including any Additional Interest and Compounded Interest (together, "Deferred Interest") that shall be payable to the Holders of Securities of such Series in whose names such Securities are registered in the Security Register on the first record date after the end of such Extended Interest Payment Period. Before the termination of any Extended Interest Payment Period, the Company may further extend such period; provided that such period, together with all such further extensions thereof, shall not exceed 20 consecutive quarters; and provided further that no prepayment of interest during an Extended Interest Payment Period shall allow the Company to extend such Extended Interest Payment Period beyond 20 consecutive quarters. Upon the termination of any Extended Interest Payment Period with respect to any series of Securities and upon the payment of all Deferred Interest then due, the Company may commence a new Extended Interest Payment Period with respect to such series of Securities, subject to the foregoing requirements. No interest on a series of Securities shall be due and payable during an Extended Interest Payment Period with respect thereto, except at the end thereof, provided the Company may prepay at any time all or any portion of the interest accrued during any Extended Interest Payment Period. Section 13.1 Notice of Extension. (a) If the Institutional Trustee of a CGMH Trust is the only Holder of Securities of a series at the time the Company selects an Extended Interest Payment Period with respect thereto, the Company shall give written notice to the Regular Trustees and the Institutional Trustee of such CGMH Trust and to the Trustee of its selection of such Extended Interest Payment Period one Business Day before the earlier of (i) the next succeeding date on which Distributions on the Trust Securities issued by such CGMH Trust would be payable, if not for such Extended Interest Payment Period, or (ii) the date such CGMH Trust is required to give notice of the record date, or the date such Distributions are payable, to the New York Stock 66 Exchange or other applicable self-regulatory organization or to holders of the Preferred Securities issued by such CGMH Trust, but in any event at least one Business Day before such record date. (b) If the Institutional Trustee of a CGMH Trust is not the only Holder of Securities of a series at the time the Company selects an Extended Interest Payment Period with respect thereto, the Company shall give written notice to the Holders of Securities of such series and the Trustee of its selection of such Extended Interest Payment Period 10 Business Days before the earlier of (i) the next succeeding Interest Payment Date, or (ii) the date the Company is required to give notice of the record or payment date of such interest payment to the New York Stock Exchange or other applicable self-regulatory organization or to Holders of Securities of such series. (c) The quarter in which any notice is given pursuant to paragraphs (a) or (b) of this Section 13.2 shall be counted as one of the 20 quarters permitted in the maximum Extended Interest Payment Period with respect to any series of Securities permitted under Section 1.3. Section 13.2 Limitation of Transactions. If with respect to any series of Securities (i) the Company shall exercise its right to defer payments of interest thereon as provided in Section 13.1 or (ii) there shall have occurred any Default, then (a) the Company shall not declare or pay any dividend on, make any distributions with respect to, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock or make any guarantee payment with respect thereto (other than (i) repurchases, redemptions or other acquisitions of shares of capital stock of the Company in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of employees, officers, directors or consultants, (ii) as a result of an exchange or conversion of any class or series of the Company's capital stock for any other class or series of the Company's capital stock, or (iii) the purchase of fractional interests in shares of the Company's capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged), and (b) the Company shall not make any payment of interest on, principal of or premium, if any, on, or repay, repurchase or redeem, any debt securities issued by the Company which rank pari passu with or junior to the Securities of such series (including the Securities of any other series), provided, however, the Company may declare and pay a stock dividend where the dividend stock is the same stock as that on which the dividend is being paid. ARTICLE XIV SUBORDINATION OF SECURITIES Section 14.1 Agreement to Subordinate. The Company covenants and agrees, and each Holder of Securities issued hereunder by such Holder's acceptance thereof likewise covenants and agrees, that all 67 Securities shall be issued subject to the provisions of this Article XIV; and each Holder of a Security, whether upon original issue or upon transfer or assignment thereof, accepts and agrees to be bound by such provisions. The payment by the Company of the principal of, premium, if any, and interest on all Securities issued hereunder shall, to the extent and in the manner hereinafter set forth, be subordinated and junior in right of payment to the prior payment in full of all Senior Indebtedness of the Company, whether outstanding at the date of this Indenture or thereafter incurred. No provision of this Article XIV shall prevent the occurrence of any Default hereunder. Section 14.2 Default on Senior Indebtedness. In the event and during the continuation of any default by the Company in the payment of principal, premium, interest or any other payment due on any Senior Indebtedness of the Company, as the case may be, or in the event that the maturity of any Senior Indebtedness of the Company, as the case may be, has been accelerated because of a default, then, in either case, no payment shall be made by the Company with respect to the principal (including redemption payments) of, or premium, if any, or interest on, the Securities or to acquire any of the Securities (except sinking fund payments made in Securities acquired by the Company prior to such default): In the event that, notwithstanding the foregoing, any payment shall be received by the Trustee, by any Holder or by any Paying Agent (or, if the Company is acting as its own Paying Agent, money for any such payment is segregated and held in trust) when such payment is prohibited by the preceding paragraph of this Section 14.2, before all Senior Indebtedness of the Company is paid in full, or provision is made for such payment in money in accordance with its terms, such payment shall be held in trust for the benefit of, and shall be paid over or delivered to, the holders of Senior Indebtedness of the Company or their respective representatives, or to the trustee or trustees under any indenture pursuant to which any of such Senior Indebtedness may have been issued, as their respective interests may appear, ratably according to the aggregate amount remaining unpaid on account of the principal, premium, interest or any other payment due on the Senior Indebtedness held or represented by each, for application to the payment of all Senior Indebtedness of the Company, as the case may be, remaining unpaid to the extent necessary to pay such Senior Indebtedness in full in money in accordance with its terms, after giving effect to any concurrent payment or distribution to or for the benefit of the holders of such Senior Indebtedness, but only to the extent that the holders of the Senior Indebtedness (or their representative or representatives or a trustee) notify the Trustee in writing within 90 days of such payment of the amounts then due and owing on the Senior Indebtedness and only the amounts specified in such notice to the Trustee shall be paid to the holders of Senior Indebtedness. 68 Section 14.3 Liquidation; Dissolution; Bankruptcy. Upon any payment by the Company or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to creditors upon any dissolution or winding-up or liquidation or reorganization of the Company, whether voluntary or involuntary or in bankruptcy, insolvency, receivership or other proceedings, all amounts due upon all Senior Indebtedness of the Company shall first be paid in full, or payment thereof provided for in money in accordance with its terms, before any payment is made by the Company on account of the principal (and premium, if any) or interest on the Securities; and upon any such dissolution or winding-up or liquidation or reorganization, any payment by the Company, or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to which the Holders of the Securities or the Trustee would be entitled to receive, except for the provisions of this Article XIV, shall be paid by the Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other Person making such payment or distribution, or by the Holders of the Securities or by the Trustee under this Indenture if received by them or it, directly to the holders of Senior Indebtedness of the Company (pro rata to such holders on the basis of the respective amounts of Senior Indebtedness held by such holders, as calculated by the Company) or their representative or representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing such Senior Indebtedness may have been issued, as their respective interests may appear, to the extent necessary to pay such Senior Indebtedness in full, in money or money's worth, after giving effect to any concurrent payment or distribution to or for the holders of such Senior Indebtedness, before any payment or distribution is made to the Holders of Securities or to the Trustee. In the event that, notwithstanding the foregoing, any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, prohibited by the foregoing, shall be received by the Trustee, by any Holder or by any Paying Agent (or, if the Company is acting as its own Paying Agent, money for any such payment is segregated and held in trust) before all Senior Indebtedness of the Company is paid in full, or provision is made for such payment in money in accordance with its terms, such payment or distribution shall be held in trust for the benefit of and shall be paid over or delivered to the holders of such Senior Indebtedness or their representative or representatives, or to the trustee or trustees under any indenture pursuant to which any of such Senior Indebtedness may have been issued, as their respective interests may appear, ratably according to the aggregate amount remaining unpaid on account of the principal, premium, interest or any other payment due on the Senior Indebtedness held or represented by each, as calculated by the Company, for application to the payment of all Senior Indebtedness of the Company, as the case may be, remaining unpaid to the extent necessary to pay such Senior Indebtedness in full in money in accordance with its terms, after giving effect to any concurrent payment or distribution to or for the benefit of the holders of such Senior Indebtedness. For purposes of this Article XIV, the words "cash, property or securities" shall not be deemed to include shares of stock of the Company as reorganized or readjusted, or securities of the Company or any other corporation provided for by a plan of 69 reorganization or readjustment, the payment of which is subordinated at least to the extent provided in this Article XIV with respect to the Securities to the payment of all Senior Indebtedness of the Company, as the case may be, that may at the time be outstanding, provided that (i) such Senior Indebtedness is assumed by the new corporation, if any, resulting from any such reorganization or readjustment, and (ii) the rights of the holders of such Senior Indebtedness are not, without the consent of such holders, altered by such reorganization or readjustment. The consolidation of the Company with, or the merger of the Company into, another corporation or the liquidation or dissolution of the Company following the conveyance or transfer of its property as an entirety, or substantially as an entirety, to another corporation upon the terms and conditions provided for in Article VIII shall not be deemed a dissolution, winding-up, liquidation or reorganization for the purposes of this Section 14.3 if such other corporation shall, as a part of such consolidation, merger, conveyance or transfer, comply with the conditions stated in Article VIII. Nothing in Section 14.2 or in this Section 14.3 shall apply to-claims of, or payments to the Trustee under or pursuant to Section 6.7. Section 14.4 Subrogation. Subject to the payment in full of all Senior Indebtedness of the Company, the rights of the Holders of the Securities shall be subrogated to the rights of the holders of such indebtedness to receive payments or distributions of cash, property or securities of the Company, as the case may be, applicable to such Senior Indebtedness until the principal of (and premium, if any) and interest on the Securities shall be paid in full; and, for the purposes of such subrogation, no payments or distributions to the holders of such Senior Indebtedness of any cash, property or securities to which the Holders of the Securities or the Trustee would be entitled except for the provisions of this Article XIV, and no payment over pursuant to the provisions of this Article XIV to or for the benefit of the holders of such Senior Indebtedness by Holders of the Securities or the Trustee, shall, as between the Company, its creditors other than Holders of Senior Indebtedness of the Company, and the holders of the Securities, be deemed to be a payment by the Company to or on account of such Senior Indebtedness. It is understood that the provisions of this Article XIV are and are intended solely for the purposes of defining the relative rights of the Holders of the Securities, on the one hand, and the holders of such Senior Indebtedness on the other hand. Nothing contained in this Article XIV or elsewhere in this Indenture or in the Securities is intended to or shall impair, as between the Company, its creditors other than the holders of Senior Indebtedness of the Company, and the Holders of the Securities, the obligation of the Company, which is absolute and unconditional, to pay to the Holders of the Securities the principal of (and premium, if any) and interest on the Securities as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the relative rights of the Holders of the Securities and creditors of the Company, as the case may be, other than the holders of Senior Indebtedness of the Company, as the case may be, nor shall anything herein or therein prevent the Trustee or the Holder of any Security from exercising all remedies otherwise permitted by applicable law upon default under the Indenture, subject to the rights, if any, under this Article XIV of the holders of such Senior Indebtedness in respect of cash, property or 70 securities of the Company, as the case may be, received upon the exercise of any such remedy. Upon any payment or distribution of assets of the Company referred to in this Article XIV, the Trustee, subject to the provisions of Section 6.1, and the Holders of the Securities shall be entitled to conclusively rely upon any order or decree made by any court of competent jurisdiction in which such dissolution, winding-up, liquidation or reorganization proceedings are pending, or a certificate of the receiver, trustee in bankruptcy, liquidation trustee, agent or other Person making such payment or distribution, delivered to the Trustee or to the Holders of the Securities, for the purposes of ascertaining the Persons entitled to participate in such distribution, the holders of Senior Indebtedness and other indebtedness of the Company, as the case may be, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article XIV. Section 14.5 Trustee to Effectuate Subordination. Each Holder of Securities by such Holder's acceptance thereof authorizes and directs the Trustee on such Holder's behalf to take such action as may be necessary or appropriate to effectuate the subordination provided in this Article XIV and appoints the Trustee such Holder's attorney-in-fact for any and all such purposes. Section 14.6 Notice by the Company. The Company shall give prompt written notice to a Responsible Officer of the Trustee of any fact known to the Company that would prohibit the making of any payment of monies to or by the Trustee in respect of the Securities pursuant to the provisions of this Article XIV. Notwithstanding the provisions of this Article XIV or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts that would prohibit the making of any payment of monies to or by the Trustee in respect of the Securities pursuant to the provisions of this Article XIV, unless and until a Responsible Officer of the Trustee shall have received written notice thereof from the Company or a holder or holders of Senior Indebtedness or their representative or representatives or from any trustee therefor; and before the receipt of any such written notice, the Trustee, subject to the provisions of Section 6.1 shall be entitled in all respects to assume that no such facts exist; provided, however, that if the Trustee shall not have received the notice provided for in this Section 14.6 at least three Business Days prior to the date upon which by the terms hereof any money may become payable for any purpose (including, without limitation, the payment of the principal of (or premium, if any) or interest on any Security), then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such money and to apply the same to the purposes for which they were received, and shall not be affected by any notice to the contrary that may be received by it within three Business Days prior to such date. The Trustee, subject to the provisions of Section 6.1, shall be entitled to conclusively rely on the delivery to it of a written notice by a Person representing himself 71 to be a holder of Senior Indebtedness of the Company, as the case may be (or a trustee on behalf of such holder), to establish that such notice has been given by a holder of such Senior Indebtedness or a trustee on behalf of any such holder or holders. In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any Person as a holder of such Senior Indebtedness to participate in any payment or distribution pursuant to this Article XIV, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of such Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this Article XIV, and, if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. Section 14.7 Rights of the Trustee; Holders of Senior Indebtedness. The Trustee in its individual capacity shall be entitled to all the rights set forth in this Article XIV in respect of any Senior Indebtedness at any time held by it, to the same extent as any other holder of Senior Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of its rights as such holder. With respect to the holders of Senior Indebtedness of the Company, the Trustee undertakes to perform or to observe only such of its covenants and obligations as are specifically set forth in this Article XIV, and no implied covenants or obligations with respect to the holders of such Senior Indebtedness shall be read into this Indenture against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the holders of such Senior Indebtedness and, subject to the provisions of Section 6.1, the Trustee shall not be liable to any holder of such Senior Indebtedness if it shall pay over or deliver to Holders of Securities, the Company or any other Person money or assets to which any holder of such Senior Indebtedness shall be entitled by virtue of this Article XIV or otherwise. Section 14.8 Subordination May Not Be Impaired. No right of any present or future holder of any Senior Indebtedness of the Company to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company, as the case may be, or by any act or failure to act, in good faith, by any such holder, or by any noncompliance by the Company, as the case may be, with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof that any such holder may have or otherwise be charged with. Without in any way limiting the generality of the foregoing paragraph, the holders of Senior Indebtedness of the Company may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders of the Securities, without incurring responsibility to the Holders of the Securities and without impairing or releasing the subordination provided in this Article XIV or the obligations hereunder of the Holders of the Securities to the holders of such Senior Indebtedness, do any one or more of the 72 following: (i) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, such Senior Indebtedness, or otherwise amend or supplement in any manner such Senior Indebtedness or any instrument evidencing the same or any agreement under which such Senior Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing such Senior Indebtedness; (iii) release any Person liable in any manner for the collection of such Senior Indebtedness; and (iv) exercise or refrain from exercising any rights against the Company, as the case may be, and any other Person. Section 14.9 Trustee's Compensation Not Prejudiced. Nothing in this Article XIV shall apply to amounts due to the Trustee pursuant to Section 6.7 of this Indenture. ARTICLE XV MISCELLANEOUS Section 15.1 Acknowledgement of Rights. The Company acknowledges that, with respect to any Securities held by a CGMH Trust or a trustee of such Trust, if the Institutional Trustee of such CGMH Trust fails to enforce its rights under this Indenture as the Holder of the series of Securities held as the assets of such CGMH Trust, any holder of Preferred Securities of such CGMH Trust may institute legal proceedings directly against the Company to enforce such Institutional Trustee's rights under this Indenture without first instituting any legal proceedings against such Institutional Trustee or any other person or entity. Notwithstanding the foregoing, if a Default has occurred and is continuing and such event is attributable to the failure of the Company to pay interest or principal on the applicable series of Securities on the date such interest or principal is otherwise payable (or in the case of redemption, on the redemption date), the Company acknowledges that a holder of Trust Securities issued by the CGMH Trust which is, or the Institutional Trustee of which is, the Holder of such Securities may directly institute a proceeding for enforcement of payment to such holder of the principal of or interest on the applicable series of Securities having a principal amount equal to the aggregate liquidation amount of the Trust Securities of such holder (a "Direct Action") on or after the respective due date specified of such holder on or after the respective due date specified in the applicable series of Securities. Notwithstanding any payments made to such holder of Trust Securities by the Company in connection with a Direct Action, the Company shall remain obligated to pay the principal of or interest on the series of Securities held by a CGMH Trust or the Institutional Trustee of a CGMH Trust, and the Company shall be subrogated to the rights of the holder of such Trust Securities to the extent of any payments made by the Company to such holder in any Direct Action. 73 * * * * This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. 74 IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written. CITIGROUP GLOBAL MARKETS HOLDINGS INC. By: _____________________________________ Name: Title: JPMORGAN CHASE BANK, As Trustee By: _____________________________________ Name: Title: 75 EX-5.A 12 x99885s3exv5wa.txt OPINION OF EDWARD F. GREENE, ESQ. Exhibit 5(a) [Letterhead of Citigroup Global Markets Holdings Inc.] October 7, 2004 Citigroup Global Markets Holdings Inc. CGMH Capital II CGMH Capital III CGMH Capital IV c/o Citigroup Global Markets Holdings Inc. 388 Greenwich Street New York, New York 10013 Ladies and Gentlemen: I am General Counsel of Citigroup Global Markets Holdings Inc., a New York corporation (the "Company"), and have acted as counsel to CGMH Capital II, CGMH Capital III and CGMH Capital IV (each, a "CGMH Trust" and, together, the "CGMH Trusts"), each a statutory trust formed under the laws of the State of Delaware. I refer to the filing by the Company and the CGMH Trusts with the Securities and Exchange Commission (the "Commission") of a Registration Statement on Form S-3 (the "Registration Statement") relating to (i) debt securities of the Company, which may be senior debt securities (the "Senior Securities") or subordinated debt securities (the "Subordinated Securities"), (ii) warrants ("Index Warrants") representing the right to receive, upon exercise, an amount in cash that will be determined by reference to prices, yields, levels or other specified objective measures, (iii) preferred securities (the "Trust Preferred Securities") of each of the CGMH Trusts, (iv) junior subordinated debt securities (the "Junior Subordinated Debt Securities" and collectively with the Subordinated Securities and the Senior Securities, the "Debt Securities") issued in connection with the offering of the Trust Preferred Securities of each of the CGMH Trusts and (v) guarantees by the Company of certain payments on the Trust Preferred Securities of each of the CGMH Trusts (the "Guarantees"). The Debt Securities, Index Warrants, Trust Preferred Securities and Guarantees are referred to herein collectively as the "Offered Securities". The Offered Securities being registered under the Registration Statement, together with securities registered under a previously filed registration statement, will have an aggregate initial offering price of up to $10,945,831,296 or the equivalent thereof in foreign currencies or composite currencies and will be offered on a continued or delayed basis pursuant to the provisions of Rule 415 under the Securities Act of 1933, as amended (the "Act"). Unless otherwise provided in any prospectus supplement forming a part of the Registration Statement relating to a particular series of Debt Securities, the Senior Securities will be issued under an Indenture dated as of October 27, 1993, as amended (the "Senior Indenture"), between the Company and The Bank of New York (the "Senior Trustee"), as Senior Trustee, the Subordinated Securities will be issued under an Indenture dated as of December 1, 1988, as amended (the "Subordinated Indenture"), between the Company and Deutsche Bank Trust Company Americas (the "Subordinated Trustee"), as Subordinated Trustee and the Junior Subordinated Debt Securities will be issued under an indenture (the "Junior Subordinated Indenture"), between the Company and JPMorgan Chase Bank (the "Junior Subordinated Trustee" and each of the Junior Subordinated Trustee, the Senior Trustee and the Subordinated Trustee, a "Trustee"). The Index Warrants will be issued under one or more warrant agreements (each, a "Warrant Agreement"), each to be entered into between the Company and one or more institutions as identified in the applicable Warrant Agreement. The Trust Preferred Securities will be issued under an Amended and Restated Declaration of Trust of each CGMH Trust (each, a "Declaration" and, together, the "Declarations"), each such Declaration being among the Company, as sponsor and as the issuer of the Junior Subordinated Debt Securities to be held by the property trustee described below, JPMorgan Chase Bank, as indenture trustee (the "Trust Preferred Trustee"), Chase Manhattan Bank USA, National Association, as property trustee (the "Property Trustee"), and Scott Freidenrich, Cliff Verron and Geoffrey S. Richards, as regular trustees. The Guarantees will be issued by the Company pursuant to one or more guarantee agreements (each, a "Guarantee Agreement") between the Company and the Junior Subordinated Trustee, for the benefit of the holders of the Trust Preferred Securities. I, or attorneys under my supervision, have examined and am familiar with originals, or copies certified or otherwise identified to my satisfaction, of such corporate records of the Company, certificates or documents as I have deemed appropriate as a basis for the opinions expressed below. In such examination, I (or such persons) have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to me (or such persons) as originals, the conformity to original documents of all documents submitted to me (or such persons) as certified or photostatic copies and the authenticity of the originals of such copies. Based upon and subject to the foregoing and assuming that (i) the Registration Statement and any amendments thereto (including post-effective amendments) will have become effective and comply with all applicable laws at the time the Offered Securities are offered or issued as contemplated by the Registration Statement; (ii) a Prospectus, Prospectus Supplement, Pricing Supplement and/or term sheet will have been prepared and filed with the Commission describing the Offered Securities offered thereby and will comply with all applicable laws; (iii) all Offered Securities will be issued and sold in compliance with applicable federal and state laws and in the manner stated in the Registration Statement and the appropriate Prospectus, Prospectus Supplement, Pricing Supplement and/or term sheet; (iv) a definitive purchase, underwriting or similar agreement and any other necessary agreement with respect to any Offered Securities offered or issued will have been duly authorized and validly executed and delivered by the parties thereto; (v) the Offered Securities will be sold and delivered at the price and in accordance with the terms of such agreement and as set forth in the Registration Statement and the Prospectus(es), Prospectus Supplement(s), Pricing Supplement(s) or term sheet(s) referred to therein; and (vi) the Company and/or the CGMH Trust(s) will authorize the offering 2 and issuance of the Offered Securities and the terms and conditions thereof and will take any other appropriate additional corporate action, I am of the opinion that: 1. With respect to Debt Securities to be issued under the Senior Indenture, the Subordinated Indenture or the Junior Subordinated Indenture, assuming the (i) due qualification of the Trustee and the applicable Indenture under the Trust Indenture Act of 1939, (ii) due authorization, execution, and delivery of the Senior Indenture or the Subordinated Indenture by the applicable Trustee or the Junior Subordinated Indenture by the parties thereto, as applicable and (iii) due execution, authentication and delivery of the Debt Securities in accordance with the terms of the applicable Indenture, such Debt Securities will be legal, valid and binding obligations of the Company and will be entitled to the benefits of the applicable Indenture. 2. With respect to the Index Warrants, assuming the (i) due authorization, execution and delivery of the applicable Warrant Agreement by the parties thereto, and (ii) due execution, countersignature and delivery of the Index Warrants, such Index Warrants will be legal, valid and binding obligations of the Company. 3. With respect to the Trust Preferred Securities of each CGMH Trust, assuming the (i) due qualification of the Trust Preferred Trustee and the Declaration of such CGMH Trust under the Trust Indenture Act of 1939, (ii) due authorization, execution and delivery of the Declaration of such CGMH Trust by the parties thereto, and (iii) due execution and delivery of the Trust Preferred Securities of such CGMH Trust in accordance with the Declaration of such Trust, (a) such Trust Preferred Securities will be duly authorized, validly issued and fully paid and nonassessable, representing undivided beneficial interests in the assets of such CGMH Trust and (b) the holders of such Trust Preferred Securities will be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware. I bring to your attention, however, that the holders of Trust Preferred Securities may be obligated, pursuant to the Declaration of such CGMH Trust, to (i) provide indemnity and/or security in connection with, and pay taxes or governmental charges arising from, transfers of Trust Preferred Securities of such CGMH Trust and (ii) provide indemnity and security in connection with the requests of or directions to the Property Trustee of such CGMH Trust to exercise its rights and powers under the Declaration of such CGMH Trust. 4. With respect to the Guarantee of the Trust Preferred Securities of each CGMH Trust, assuming the due authorization, execution and delivery of the applicable Guarantee Agreement by the parties thereto, such Guarantee will be a legal, valid and binding obligation of the Company. Insofar as my opinion relates to the validity, binding effect or enforceability of any agreement or obligation of the Company, it is subject to applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar laws affecting creditors' rights generally from time to time in effect and subject to general principles of equity, regardless of whether such is considered in a proceeding in equity or at law. My opinion is limited to matters governed by the federal laws of the United States of America, the laws of the State of New York, the General Corporation Law of the State of 3 Delaware and the Delaware Statutory Trust Act (including the applicable provisions of the Delaware Constitution and the reported judicial decisions interpreting the General Corporation Law of the State of Delaware, the Delaware Statutory Trust Act and such applicable provisions of the Delaware Constitution). I am not admitted to the practice of law in the State of Delaware. I consent to the filing of this opinion in the Registration Statement and to the reference to my name in the Prospectuses and Prospectus Supplements constituting a part of such Registration Statement under the heading "Legal Matters". In giving such consent, I do not thereby admit that I come within the category of persons whose consent is required under Section 7 of the Act, or the rules and regulations of the Commission thereunder. Very truly yours, /s/ Edward F. Greene ---------------------------------- Edward F. Greene 4 EX-8.A 13 x99885s3exv8wa.txt TAX OPINION OF CLEARY, GOTTLIEB, STEEN & HAMILTON Exhibit 8(a) October 7, 2004 Citigroup Global Markets Holdings Inc. CGMH Capital II CGMH Capital III CGMH Capital IV c/o Citigroup Global Markets Holdings Inc. 388 Greenwich Street New York, New York 10013 Ladies and Gentlemen: We have acted as special tax counsel to Citigroup Global Markets Holdings Inc., a New York corporation (the "Company"), and CGMH Capital II, CGMH Capital III and CGMH Capital IV (each, an "CGMH Trust" and together, the "CGMH Trusts"), each a statutory trust formed 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 with the Securities and Exchange Commission (the "Commission"), for the purpose of registering, among other things, (i) preferred securities (the "Trust Preferred Securities") of each of the CGMH Trusts, (ii) junior subordinated debt securities (the "Junior Subordinated Debt Securities") issued in connection with the offering of the Trust Preferred Securities of each of the CGMH Trusts and (iii) guarantees by the Company of certain payments on the Trust Preferred Securities of each of the CGMH Trusts (the "Guarantees"). The Trust Preferred Securities will be issued under an Amended and Restated Declaration of Trust of each CGMH Trust (each, a "Declaration" and together, the "Declarations"), each such Declaration being among the Company, as sponsor and as the issuer of the Junior Subordinated Debt Securities to be held by the property trustee described below, JPMorgan Chase Bank, as indenture trustee (the "Trust Preferred Trustee"), Chase Manhattan Bank USA, National Association, as property trustee (the "Property Trustee"), and Scott Freidenrich, Cliff Verron and Geoffrey S. Richards, as regular trustees (together, the "Regular Trustees"). The Junior Subordinated Debt Securities of the Company will be issued pursuant to an indenture between the Company and the Trust Preferred Trustee. The Guarantees will be issued by the Company under one or more guarantee agreements (each, a "Guarantee Agreement") between the Company and the Trust Preferred Trustee, for the benefit of the holders of the Trust Preferred Securities. In rendering the opinion expressed below, we have, without independent investigation, assumed that: (i) the Indenture will be duly executed and delivered by the parties thereto substantially in the form of Exhibit 4(oo) to the Registration Statement, (ii) a resolution of the Board of Directors of the Company, including any authorized committee thereof, or a supplemental indenture, in either case relating to the Junior Subordinated Debt Securities with respect to each CGMH Trust and supplementing the Indenture, will be duly executed and delivered by the parties thereto, (iii) the Junior Subordinated Debt Securities with respect to each CGMH Trust to be issued by the Company under the Indenture as so modified will be duly executed and delivered by the parties thereto substantially in the form of Exhibit 4(uu) to the Registration Statement, (iv) the Declaration of each CGMH Trust will be duly executed and delivered by the parties thereto substantially in the form of Exhibits 4(ll), 4(mm) and 4(nn), respectively, of the Registration Statement, (v) the Trust Preferred Securities of each CGMH Trust will be executed and issued in accordance with the Declaration of such CGMH Trust and substantially in the form of Exhibit 4(pp) to the Registration Statement, (vi) the Guarantee with respect to the Trust Preferred Securities of each CGMH Trust will be duly executed and delivered substantively in the form of Exhibits 4(rr), 4(ss) and 4(tt), respectively, to the Registration Statement, (vii) the transactions relating to the issuance of the Trust Preferred Securities of each CGMH Trust have taken place as described in the Registration Statement and (viii) each CGMH Trust is a United States person as that term is defined by Section 7701(a)(30)(E) of the Internal Revenue Code of 1986, as amended (the "Code"). In addition, we have assumed that the respective parties to such documents and all persons having obligations thereunder will act in all respects at all relevant times in conformity with the requirements and provisions of such documents. We have also made such investigations of law as we have deemed appropriate as a basis for the opinion expressed below. We hereby confirm that we are of the opinion that the statements set forth under the heading "Certain United States Federal Income Tax Considerations" in the prospectus for the Trust Preferred Securities contained in the Registration Statement (the "Prospectus"), insofar as such statements purport to summarize certain federal income tax laws of the United States, constitute a fair summary of the principal U.S. federal income tax consequences of an investment in the Trust Preferred Securities. We hereby consent to the use of our name under the heading "Legal Matters" in the Prospectus and the filing of this opinion with the Commission as Exhibit 8(a) to 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 Securities Act of 1933, as amended, or the rules and regulations of the Commission promulgated thereunder. 2 The foregoing opinion is based on the Code and applicable regulations, rulings and judicial decisions, in each case as in effect on the date hereof, and this opinion may be affected by amendments to the Code or to the regulations thereunder or by subsequent judicial or administrative interpretations thereof. We express no opinion other than as to the federal income tax laws of the United States of America, and we undertake no responsibility to update or supplement our opinion. Very truly yours, CLEARY, GOTTLIEB, STEEN & HAMILTON By /s/Erika W. Nijenhuis ------------------------------- Erika W. Nijenhuis, a Partner 3 EX-23.A 14 x99885s3exv23wa.txt CONSENT OF KPMG LLP Exhibit 23(a) CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors Citigroup Global Markets Holdings Inc. We consent to the incorporation by reference in the Registration Statement on Form S-3 (the "Registration Statement") of Citigroup Global Markets Holdings Inc. (the "Company") of our report dated February 26, 2004, with respect to the consolidated statements of financial condition of Citigroup Global Markets Holdings Inc. and Subsidiaries (formerly Salomon Smith Barney Holdings Inc.) as of December 31, 2003 and 2002, and the related consolidated statements of income, changes in stockholder's equity and cash flows for each of the years in the three-year period ended December 31, 2003, which report is included in the annual report on Form 10-K of Citigroup Global Markets Holdings Inc. for the year ended December 31, 2003 and to the reference to our firm under the heading "Experts" in the Registration Statement. Our report refers to changes in 2003, in the Company's method of accounting for variable interest entities and stock-based compensation as well as a change in 2002, in the Company's methods of accounting for goodwill and intangible assets, and a change in 2001, in the Company's method of accounting for derivative instruments and hedging activities. /s/KPMG LLP New York, New York October 7, 2004 EX-25.A 15 x99885s3exv25wa.txt FORM T-1 STATEMENT OF ELIGIBLILTY AND QUALIFICATION Exhibit 25(a) ================================================================================ FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) [ ] --------------------------- THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) One Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) --------------------------- Citigroup Global Markets Holdings Inc. (Exact name of obligor as specified in its charter) New York 11-2418067 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 388 Greenwich Street New York, New York 10013 (Address of principal executive offices) (Zip code) --------------------------- Debt Securities (Title of the indenture securities) ================================================================================ 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE: (a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT.
Name Address - --------------------------------------- -------------------------------- Superintendent of Banks of the State of 2 Rector Street, New York, N.Y. New York 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York 10005
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. Yes. 2. AFFILIATIONS WITH OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION. None. 16. LIST OF EXHIBITS. EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R. 229.10(d). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. - 2 - SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 6th day of October, 2004. THE BANK OF NEW YORK By: /S/ VAN K. BROWN ----------------------------------- Name: VAN K. BROWN Title: VICE PRESIDENT - 3 - EXHIBIT 7 Consolidated Report of Condition of THE BANK OF NEW YORK of One Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business June 30, 2004, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts In Thousands ASSETS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin................................................ $ 2,954,963 Interest-bearing balances................................. 10,036,895 Securities: Held-to-maturity securities............................... 1,437,899 Available-for-sale securities............................. 20,505,806 Federal funds sold and securities purchased under agreements to resell................................ Federal funds sold in domestic offices.................... 5,482,900 Securities purchased under agreements to resell.................................................... 838,105 Loans and lease financing receivables: Loans and leases held for sale............................ 48,034 Loans and leases, net of unearned income.................................................. 38,299,913 LESS: Allowance for loan and lease losses............................................ 594,926 Loans and leases, net of unearned income and allowance.................................... 37,704,987 Trading Assets............................................... 2,986,727 Premises and fixed assets (including capitalized leases)................................................... 957,249 Other real estate owned...................................... 374 Investments in unconsolidated subsidiaries and associated companies...................................... 246,280 Customers' liability to this bank on acceptances outstanding............................................... 251,948 Intangible assets............................................ Goodwill.................................................. 2,699,812 Other intangible assets................................... 755,311 Other assets................................................. 7,629,093 --------------
- 4 - Total assets........................................... $ 94,536,383 ============== LIABILITIES Deposits: In domestic offices................................. $ 36,481,716 Noninterest-bearing................................. 15,636,690 Interest-bearing.................................... 20,845,026 In foreign offices, Edge and Agreement subsidiaries, and IBFs............................ 25,163,274 Noninterest-bearing................................. 413,981 Interest-bearing.................................... 24,749,293 Federal funds purchased and securities sold under agreements to repurchase.......................... Federal funds purchased in domestic offices........................................... 898,340 Securities sold under agreements to repurchase........................................ 721,016 Trading liabilities.................................... 2,377,862 Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases)........................... 10,475,320 Not applicable Bank's liability on acceptances executed and outstanding......................................... 254,569 Subordinated notes and debentures...................... 2,422,807 Other liabilities...................................... 7,321,226 -------------- Total liabilities...................................... $ 86,116,130 ============== Minority interest in consolidated subsidiaries........................................ 139,967 EQUITY CAPITAL Perpetual preferred stock and related surplus............................................. 0 Common stock........................................... 1,135,284 Surplus................................................ 2,082,308 Retained earnings...................................... 5,118,989 Accumulated other comprehensive income................. (56,295) Other equity capital components........................ 0 -------------- Total equity capital................................... 8,280,286 --------------- Total liabilities, minority interest, and equity capital............................................. $ 94,536,383 ==============
- 5 - I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief. Thomas J. Mastro, Senior Vice President and Comptroller We, the undersigned directors, attest to the correctness of this statement of resources and liabilities. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct. Thomas A. Renyi Gerald L. Hassell Directors Alan R. Griffith - 6 - EX-25.B 16 x99885s3exv25wb.txt FORM T-1 STATEMENT OF ELIGIBLILTY AND QUALIFICATION Exhibit 25(b) - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ------------------------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________ ---------------------------------------- JPMORGAN CHASE BANK (Exact name of trustee as specified in its charter) NEW YORK 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification No.) 270 PARK AVENUE NEW YORK, NEW YORK 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) --------------------------------------------- CITIGROUP GLOBAL MARKETS HOLDINGS INC. (Exact name of obligor as specified in its charter) NEW YORK 11-2418067 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) 388 GREENWICH STREET NEW YORK, NEW YORK 10013 (Address of principal executive offices) (Zip Code) -------------------------------------------------- SENIOR DEBT INDENTURE (Title of the indenture securities) - -------------------------------------------------------------------------------- GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a)Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, State House, Albany, New York 12110. Board of Governors of the Federal Reserve System, Washington, D.C., 20551 Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. Federal Deposit Insurance Corporation, Washington, D.C., 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. -2- Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Restated Organization Certificate of the Trustee dated March 25, 1997 and the Certificate of Amendment dated October 22, 2001 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference.) 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank. 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference.) 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank. 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, JPMorgan Chase Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 7th day of October, 2004. JPMORGAN CHASE BANK By /s/ Natalie B. Pesce -------------------------------------- Natalie B. Pesce, Assistant Vice President -3- Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF JPMorgan Chase Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business March 31, 2004, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS ASSETS IN MILLIONS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin .......................................... $ 19,589 Interest-bearing balances .................................. 35,104 Securities: Held to maturity securities ..................................... 156 Available for sale securities ................................... 64,028 Federal funds sold and securities purchased under agreements to resell Federal funds sold in domestic offices ..................... 30,180 Securities purchased under agreements to resell ............ 74,963 Loans and lease financing receivables: Loans and leases held for sale ............................. 19,061 Loans and leases, net of unearned income $163,825 Less: Allowance for loan and lease losses 2,771 Loans and leases, net of unearned income and allowance .................................................. 161,054 Trading Assets .................................................. 191,989 Premises and fixed assets (including capitalized leases) ........ 5,959 Other real estate owned ......................................... 118 Investments in unconsolidated subsidiaries and associated companies ....................................... 837 Customers' liability to this bank on acceptances outstanding ................................................ 203 Intangible assets Goodwill ................................................ 2,539 Other Intangible assets ................................. 4,521 Other assets .................................................... 38,391 TOTAL ASSETS .................................................... $648,692 ========
LIABILITIES Deposits In domestic offices ........................................ $210,211 Noninterest-bearing ................ $ 80,262 Interest-bearing ................... 129,949 In foreign offices, Edge and Agreement subsidiaries and IBF's ..................................... 120,623 Noninterest-bearing ................ $ 7,920 Interest-bearing ................... 112,703 Federal funds purchased and securities sold under agree- ments to repurchase: Federal funds purchased in domestic offices ................ 6,480 Securities sold under agreements to repurchase ............. 102,641 Trading liabilities ............................................. 114,412 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases) .................. 20,692 Bank's liability on acceptances executed and outstanding ........ 203 Subordinated notes and debentures ............................... 8,039 Other liabilities ............................................... 26,877 TOTAL LIABILITIES ............................................... 610,178 Minority Interest in consolidated subsidiaries .................. 346 EQUITY CAPITAL Perpetual preferred stock and related surplus ................... 0 Common stock .................................................... 1,785 Surplus (exclude all surplus related to preferred stock) ....... 16,318 Retained earnings ............................................... 20,049 Accumulated other comprehensive income .......................... 16 Other equity capital components ................................. 0 TOTAL EQUITY CAPITAL ............................................ 38,168 -------- TOTAL LIABILITIES, MINORITY INTEREST, AND EQUITY CAPITAL ........ $648,692 ========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct. WILLIAM B. HARRISON, JR. ) ELLEN V. FUTTER ) DIRECTORS FRANK A. BENNACK, JR. ) EX-25.C 17 x99885s3exv25wc.txt FORM T-1 STATEMENT OF ELIGIBLILTY AND QUALIFICATION Exhibit 25(c) ----------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ------------------------------ DEUTSCHE BANK TRUST COMPANY AMERICAS (FORMERLY BANKERS TRUST COMPANY) (Exact name of trustee as specified in its charter) NEW YORK 13-4941247 (Jurisdiction of Incorporation or (I.R.S. Employer organization if not a U.S. national bank) Identification no.) 60 WALL STREET NEW YORK, NEW YORK 10005 (Address of principal (Zip Code) executive offices) DEUTSCHE BANK TRUST COMPANY AMERICAS ATTENTION: WILL CHRISTOPH LEGAL DEPARTMENT 1301 6TH AVENUE, 8TH FLOOR NEW YORK, NEW YORK 10019 (212) 469-0378 (Name, address and telephone number of agent for service) ------------------------------------------------------ CITIGROUP GLOBAL MARKETS HOLDINGS INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) NEW YORK 11-2418067 (State or Other Jurisdiction of (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 388 GREENWICH STREET NEW YORK, NY 10013 (212) 816-6000 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) DEBT SECURITIES ITEM 1. GENERAL INFORMATION. Furnish the following information as to the trustee. (a) Name and address of each examining or supervising authority to which it is subject. NAME ADDRESS Federal Reserve Bank (2nd District) New York, NY Federal Deposit Insurance Corporation Washington, D.C. New York State Banking Department Albany, NY (b) Whether it is authorized to exercise corporate trust powers. Yes. ITEM 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the Trustee, describe each such affiliation. None. ITEM 3. -15. NOT APPLICABLE ITEM 16. LIST OF EXHIBITS. EXHIBIT 1 - Restated Organization Certificate of Bankers Trust Company dated August 6, 1998, Certificate of Amendment of the Organization Certificate of Bankers Trust Company dated September 25, 1998, Certificate of Amendment of the Organization Certificate of Bankers Trust Company dated December 16, 1998, and Certificate of Amendment of the Organization Certificate of Bankers Trust Company dated February 27, 2002, copies attached. EXHIBIT 2 - Certificate of Authority to commence business - Incorporated herein by reference to Exhibit 2 filed with Form T-1 Statement, Registration No. 33-21047. EXHIBIT 3 - Authorization of the Trustee to exercise corporate trust powers - Incorporated herein by reference to Exhibit 2 filed with Form T-1 Statement, Registration No. 33-21047. EXHIBIT 4 - Existing By-Laws of Bankers Trust Company, as amended on April 15, 2002. Copy attached. -2- EXHIBIT 5 - Not applicable. EXHIBIT 6 - Consent of Bankers Trust Company required by Section 321(b) of the Act. - Incorporated herein by reference to Exhibit 4 filed with Form T-1 Statement, Registration No. 22-18864. EXHIBIT 7 - The latest report of condition of Deutsche Bank Trust Company Americas dated as of June 30,2004. Copy attached. EXHIBIT 8 - Not Applicable. EXHIBIT 9 - Not Applicable. -3- SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, Deutsche Bank Trust Company Americas, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on this 6th day of October, 2004. DEUTSCHE BANK TRUST COMPANY AMERICAS By: /s/ Yana Kalachikova -------------------- Yana Kalachikova Associate -4- SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, Deutsche Bank Trust Company Americas, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on this 6th day of October 2004. DEUTSCHE BANK TRUST COMPANY AMERICAS /s/ Yana Kalachikova -------------------- By: Yana Kalachikova Associate -5- State of New York, Banking Department I, MANUEL KURSKY, Deputy Superintendent of Banks of the State of New York, DO HEREBY APPROVE the annexed Certificate entitled "CERTIFICATE OF AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST COMPANY UNDER SECTION 8005 OF THE BANKING LAW," dated September 16, 1998, providing for an increase in authorized capital stock from $3,001,666,670 consisting of 200,166,667 shares with a par value of $10 each designated as Common Stock and 1,000 shares with a par value of $1,000,000 each designated as Series Preferred Stock to $3,501,666,670 consisting of 200,166,667 shares with a par value of $10 each designated as Common Stock and 1,500 shares with a par value of $1,000,000 each designated as Series Preferred Stock. WITNESS, my hand and official seal of the Banking Department at the City of New York, this 25TH day of SEPTEMBER in the Year of our Lord one thousand nine hundred and NINETY-EIGHT. Manuel Kursky ----------------------------------- Deputy Superintendent of Banks RESTATED ORGANIZATION CERTIFICATE OF BANKERS TRUST COMPANY ---------------------------- Under Section 8007 Of the Banking Law ---------------------------- Bankers Trust Company 1301 6th Avenue, 8th Floor New York, N.Y. 10019 Counterpart Filed in the Office of the Superintendent of Banks, State of New York, August 31, 1998 RESTATED ORGANIZATION CERTIFICATE OF BANKERS TRUST Under Section 8007 of the Banking Law ----------------------------- We, James T. Byrne, Jr. and Lea Lahtinen, being respectively a Managing Director and an Assistant Secretary and a Vice President and an Assistant Secretary of BANKERS TRUST COMPANY, do hereby certify: 1. The name of the corporation is Bankers Trust Company. 2. The organization certificate of the corporation was filed by the Superintendent of Banks of the State of New York on March 5, 1903. 3. The text of the organization certificate, as amended heretofore, is hereby restated without further amendment or change to read as herein-set forth in full, to wit: "Certificate of Organization of Bankers Trust Company Know All Men By These Presents That we, the undersigned, James A. Blair, James G. Cannon, E. C. Converse, Henry P. Davison, Granville W. Garth, A. Barton Hepburn, Will Logan, Gates W. McGarrah, George W. Perkins, William H. Porter, John F. Thompson, Albert H. Wiggin, Samuel Woolverton and Edward F. C. Young, all being persons of full age and citizens of the United States, and a majority of us being residents of the State of New York, desiring to form a corporation to be known as a Trust Company, do hereby associate ourselves together for that purpose under and pursuant to the laws of the State of New York, and for such purpose we do hereby, under our respective hands and seals, execute and duly acknowledge this Organization Certificate in duplicate, and hereby specifically state as follows, to wit: I. The name by which the said corporation shall be known is Bankers Trust Company. II. The place where its business is to be transacted is the City of New York, in the State of New York. III. Capital Stock: The amount of capital stock which the corporation is hereafter to have is Three Billion One Million, Six Hundred Sixty-Six Thousand, Six Hundred Seventy Dollars ($3,001,666,670), divided into Two Hundred Million, One Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven (200,166,667) shares with a par value of $10 each designated as Common Stock and 1,000 shares with a par value of One Million Dollars ($1,000,000) each designated as Series Preferred Stock. (a) Common Stock 1. Dividends: Subject to all of the rights of the Series Preferred Stock, dividends may be declared and paid or set apart for payment upon the Common Stock out of any assets or funds of the corporation legally available for the payment of dividends. 2. Voting Rights: Except as otherwise expressly provided with respect to the Series Preferred Stock or with respect to any series of the Series Preferred Stock, the Common Stock shall have the exclusive right to vote for the election of directors and for all other purposes, each holder of the Common Stock being entitled to one vote for each share thereof held. 3. Liquidation: Upon any liquidation, dissolution or winding up of the corporation, whether voluntary or involuntary, and after the holders of the Series Preferred Stock of each series shall have been paid in full the amounts to which they respectively shall be entitled, or a sum sufficient for the payment in full set aside, the remaining net assets of the corporation shall be distributed pro rata to the holders of the Common Stock in accordance with their respective rights and interests, to the exclusion of the holders of the Series Preferred Stock. 4. Preemptive Rights: No holder of Common Stock of the corporation shall be entitled, as such, as a matter of right, to subscribe for or purchase any part of any new or additional issue of stock of any class or series whatsoever, any rights or options to purchase stock of any class or series whatsoever, or any securities convertible into, exchangeable for or carrying rights or options to purchase stock of any class or series whatsoever, whether now or hereafter authorized, and whether issued for cash or other consideration, or by way of dividend or other distribution. (b) Series Preferred Stock 1. Board Authority: The Series Preferred Stock may be issued from time to time by the Board of Directors as herein provided in one or more series. The designations, relative rights, preferences and limitations of the Series Preferred Stock, and particularly of the shares of each series thereof, may, to the extent permitted by law, be similar to or may differ from those of any other series. The Board of Directors of the corporation is hereby expressly granted authority, subject to the provisions of this Article III, to issue from time to time Series Preferred Stock in one or more series and to fix from time to time before issuance thereof, by filing a certificate pursuant to the Banking Law, the number of shares in each such series of such class and all designations, relative rights (including the right, to the extent permitted by law, to convert into shares of any class or into shares of any series of any class), preferences and limitations of the shares in each such series, including, buy without limiting the generality of the foregoing, the following: (i) The number of shares to constitute such series (which number may at any time, or from time to time, be increased or decreased by the Board of Directors, notwithstanding that shares of the series may be outstanding at the time of such increase or decrease, unless the Board of Directors shall have otherwise provided in creating such series) and the distinctive designation thereof; (ii) The dividend rate on the shares of such series, whether or not dividends on the shares of such series shall be cumulative, and the date or dates, if any, from which dividends thereon shall be cumulative; (iii) Whether or not the share of such series shall be redeemable, and, if redeemable, the date or dates upon or after which they shall be redeemable, the amount or amounts per share (which shall be, in the case of each share, not less than its preference upon involuntary liquidation, plus an amount equal to all dividends thereon accrued and unpaid, whether or not earned or declared) payable thereon in the case of the redemption thereof, which amount may vary at different redemption dates or otherwise as permitted by law; (iv) The right, if any, of holders of shares of such series to convert the same into, or exchange the same for, Common Stock or other stock as permitted by law, and the terms and conditions of such conversion or exchange, as well as provisions for adjustment of the conversion rate in such events as the Board of Directors shall determine; (v) The amount per share payable on the shares of such series upon the voluntary and involuntary liquidation, dissolution or winding up of the corporation; (vi) Whether the holders of shares of such series shall have voting power, full or limited, in addition to the voting powers provided by law and, in case additional voting powers are accorded, to fix the extent thereof; and (vii) Generally to fix the other rights and privileges and any qualifications, limitations or restrictions of such rights and privileges of such series, provided, however, that no such rights, privileges, qualifications, limitations or restrictions shall be in conflict with the organization certificate of the corporation or with the resolution or resolutions adopted by the Board of Directors providing for the issue of any series of which there are shares outstanding. All shares of Series Preferred Stock of the same series shall be identical in all respects, except that shares of any one series issued at different times may differ as to dates, if any, from which dividends thereon may accumulate. All shares of Series Preferred Stock of all series shall be of equal rank and shall be identical in all respects except that to the extent not otherwise limited in this Article III any series may differ from any other series with respect to any one or more of the designations, relative rights, preferences and limitations described or referred to in subparagraphs (I) to (vii) inclusive above. 2. Dividends: Dividends on the outstanding Series Preferred Stock of each series shall be declared and paid or set apart for payment before any dividends shall be declared and paid or set apart for payment on the Common Stock with respect to the same quarterly dividend period. Dividends on any shares of Series Preferred Stock shall be cumulative only if and to the extent set forth in a certificate filed pursuant to law. After dividends on all shares of Series Preferred Stock (including cumulative dividends if and to the extent any such shares shall be entitled thereto) shall have been declared and paid or set apart for payment with respect to any quarterly dividend period, then and not otherwise so long as any shares of Series Preferred Stock shall remain outstanding, dividends may be declared and paid or set apart for payment with respect to the same quarterly dividend period on the Common Stock out the assets or funds of the corporation legally available therefor. All Shares of Series Preferred Stock of all series shall be of equal rank, preference and priority as to dividends irrespective of whether or not the rates of dividends to which the same shall be entitled shall be the same and when the stated dividends are not paid in full, the shares of all series of the Series Preferred Stock shall share ratably in the payment thereof in accordance with the sums which would be payable on such shares if all dividends were paid in full, provided, however, that any two or more series of the Series Preferred Stock may differ from each other as to the existence and extent of the right to cumulative dividends, as aforesaid. 3. Voting Rights: Except as otherwise specifically provided in the certificate filed pursuant to law with respect to any series of the Series Preferred Stock, or as otherwise provided by law, the Series Preferred Stock shall not have any right to vote for the election of directors or for any other purpose and the Common Stock shall have the exclusive right to vote for the election of directors and for all other purposes. 4. Liquidation: In the event of any liquidation, dissolution or winding up of the corporation, whether voluntary or involuntary, each series of Series Preferred Stock shall have preference and priority over the Common Stock for payment of the amount to which each outstanding series of Series Preferred Stock shall be entitled in accordance with the provisions thereof and each holder of Series Preferred Stock shall be entitled to be paid in full such amount, or have a sum sufficient for the payment in full set aside, before any payments shall be made to the holders of the Common Stock. If, upon liquidation, dissolution or winding up of the corporation, the assets of the corporation or proceeds thereof, distributable among the holders of the shares of all series of the Series Preferred Stock shall be insufficient to pay in full the preferential amount aforesaid, then such assets, or the proceeds thereof, shall be distributed among such holders ratably in accordance with the respective amounts which would be payable if all amounts payable thereon were paid in full. After the payment to the holders of Series Preferred Stock of all such amounts to which they are entitled, as above provided, the remaining assets and funds of the corporation shall be divided and paid to the holders of the Common Stock. 5. Redemption: In the event that the Series Preferred Stock of any series shall be made redeemable as provided in clause (iii) of paragraph 1 of section (b) of this Article III, the corporation, at the option of the Board of Directors, may redeem at any time or times, and from time to time, all or any part of any one or more series of Series Preferred Stock outstanding by paying for each share the then applicable redemption price fixed by the Board of Directors as provided herein, plus an amount equal to accrued and unpaid dividends to the date fixed for redemption, upon such notice and terms as may be specifically provided in the certificate filed pursuant to law with respect to the series. 6. Preemptive Rights: No holder of Series Preferred Stock of the corporation shall be entitled, as such, as a matter or right, to subscribe for or purchase any part of any new or additional issue of stock of any class or series whatsoever, any rights or options to purchase stock of any class or series whatsoever, or any securities convertible into, exchangeable for or carrying rights or options to purchase stock of any class or series whatsoever, whether now or hereafter authorized, and whether issued for cash or other consideration, or by way of dividend. (c) Provisions relating to Floating Rate Non-Cumulative Preferred Stock, Series A. (Liquidation value $1,000,000 per share.) 1. Designation: The distinctive designation of the series established hereby shall be "Floating Rate Non-Cumulative Preferred Stock, Series A" (hereinafter called "Series A Preferred Stock"). 2. Number: The number of shares of Series A Preferred Stock shall initially be 250 shares. Shares of Series A Preferred Stock redeemed, purchased or otherwise acquired by the corporation shall be cancelled and shall revert to authorized but unissued Series Preferred Stock undesignated as to series. 3. Dividends: (a) Dividend Payments Dates. Holders of the Series A Preferred Stock shall be entitled to receive non-cumulative cash dividends when, as and if declared by the Board of Directors of the corporation, out of funds legally available therefor, from the date of original issuance of such shares (the "Issue Date") and such dividends will be payable on March 28, June 28, September 28 and December 28 of each year ("Dividend Payment Date") commencing September 28, 1990, at a rate per annum as determined in paragraph 3(b) below. The period beginning on the Issue Date and ending on the day preceding the first Dividend Payment Date and each successive period beginning on a Dividend Payment Date and ending on the date preceding the next succeeding Dividend Payment Date is herein called a "Dividend Period". If any Dividend Payment Date shall be, in The City of New York, a Sunday or a legal holiday or a day on which banking institutions are authorized by law to close, then payment will be postponed to the next succeeding business day with the same force and effect as if made on the Dividend Payment Date, and no interest shall accrue for such Dividend Period after such Dividend Payment Date. (b) Dividend Rate. The dividend rate from time to time payable in respect of Series A Preferred Stock (the "Dividend Rate") shall be determined on the basis of the following provisions: (i) On the Dividend Determination Date, LIBOR will be determined on the basis of the offered rates for deposits in U.S. dollars having a maturity of three months commencing on the second London Business Day immediately following such Dividend Determination Date, as such rates appear on the Reuters Screen LIBO Page as of 11:00 A.M. London time, on such Dividend Determination Date. If at least two such offered rates appear on the Reuters Screen LIBO Page, LIBOR in respect of such Dividend Determination Dates will be the arithmetic mean (rounded to the nearest one-hundredth of a percent, with five one-thousandths of a percent rounded upwards) of such offered rates. If fewer than those offered rates appear, LIBOR in respect of such Dividend Determination Date will be determined as described in paragraph (ii) below. (ii) On any Dividend Determination Date on which fewer than those offered rates for the applicable maturity appear on the Reuters Screen LIBO Page as specified in paragraph (I) above, LIBOR will be determined on the basis of the rates at which deposits in U.S. dollars having a maturity of three months commencing on the second London Business Day immediately following such Dividend Determination Date and in a principal amount of not less than $1,000,000 that is representative of a single transaction in such market at such time are offered by three major banks in the London interbank market selected by the corporation at approximately 11:00 A.M., London time, on such Dividend Determination Date to prime banks in the London market. The corporation will request the principal London office of each of such banks to provide a quotation of its rate. If at least two such quotations are provided, LIBOR in respect of such Dividend Determination Date will be the arithmetic mean (rounded to the nearest one-hundredth of a percent, with five one-thousandths of a percent rounded upwards) of such quotations. If fewer than two quotations are provided, LIBOR in respect of such Dividend Determination Date will be the arithmetic mean (rounded to the nearest one-hundredth of a percent, with five one-thousandths of a percent rounded upwards) of the rates quoted by three major banks in New York City selected by the corporation at approximately 11:00 A.M., New York City time, on such Dividend Determination Date for loans in U.S. dollars to leading European banks having a maturity of three months commencing on the second London Business Day immediately following such Dividend Determination Date and in a principal amount of not less than $1,000,000 that is representative of a single transaction in such market at such time; provided, however, that if the banks selected as aforesaid by the corporation are not quoting as aforementioned in this sentence, then, with respect to such Dividend Period, LIBOR for the preceding Dividend Period will be continued as LIBOR for such Dividend Period. (ii) The Dividend Rate for any Dividend Period shall be equal to the lower of 18% or 50 basis points above LIBOR for such Dividend Period as LIBOR is determined by sections (I) or (ii) above. As used above, the term "Dividend Determination Date" shall mean, with respect to any Dividend Period, the second London Business Day prior to the commencement of such Dividend Period; and the term "London Business Day" shall mean any day that is not a Saturday or Sunday and that, in New York City, is not a day on which banking institutions generally are authorized or required by law or executive order to close and that is a day on which dealings in deposits in U.S. dollars are transacted in the London interbank market. 4. Voting Rights: The holders of the Series A Preferred Stock shall have the voting power and rights set forth in this paragraph 4 and shall have no other voting power or rights except as otherwise may from time to time be required by law. So long as any shares of Series A Preferred Stock remain outstanding, the corporation shall not, without the affirmative vote or consent of the holders of at least a majority of the votes of the Series Preferred Stock entitled to vote outstanding at the time, given in person or by proxy, either in writing or by resolution adopted at a meeting at which the holders of Series A Preferred Stock (alone or together with the holders of one or more other series of Series Preferred Stock at the time outstanding and entitled to vote) vote separately as a class, alter the provisions of the Series Preferred Stock so as to materially adversely affect its rights; provided, however, that in the event any such materially adverse alteration affects the rights of only the Series A Preferred Stock, then the alteration may be effected with the vote or consent of at least a majority of the votes of the Series A Preferred Stock; provided, further, that an increase in the amount of the authorized Series Preferred Stock and/or the creation and/or issuance of other series of Series Preferred Stock in accordance with the organization certificate shall not be, nor be deemed to be, materially adverse alterations. In connection with the exercise of the voting rights contained in the preceding sentence, holders of all series of Series Preferred Stock which are granted such voting rights (of which the Series A Preferred Stock is the initial series) shall vote as a class (except as specifically provided otherwise) and each holder of Series A Preferred Stock shall have one vote for each share of stock held and each other series shall have such number of votes, if any, for each share of stock held as may be granted to them. The foregoing voting provisions will not apply if, in connection with the matters specified, provision is made for the redemption or retirement of all outstanding Series A Preferred Stock. 5. Liquidation: Subject to the provisions of section (b) of this Article III, upon any liquidation, dissolution or winding up of the corporation, whether voluntary or involuntary, the holders of the Series A Preferred Stock shall have preference and priority over the Common Stock for payment out of the assets of the corporation or proceeds thereof, whether from capital or surplus, of $1,000,000 per share (the "liquidation value") together with the amount of all dividends accrued and unpaid thereon, and after such payment the holders of Series A Preferred Stock shall be entitled to no other payments. 6. Redemption: Subject to the provisions of section (b) of this Article III, Series A Preferred Stock may be redeemed, at the option of the corporation in whole or part, at any time or from time to time at a redemption price of $1,000,000 per share, in each case plus accrued and unpaid dividends to the date of redemption. At the option of the corporation, shares of Series A Preferred Stock redeemed or otherwise acquired may be restored to the status of authorized but unissued shares of Series Preferred Stock. In the case of any redemption, the corporation shall give notice of such redemption to the holders of the Series A Preferred Stock to be redeemed in the following manner: a notice specifying the shares to be redeemed and the time and place of redemption (and, if less than the total outstanding shares are to be redeemed, specifying the certificate numbers and number of shares to be redeemed) shall be mailed by first class mail, addressed to the holders of record of the Series A Preferred Stock to be redeemed at their respective addresses as the same shall appear upon the books of the corporation, not more than sixty (60) days and not less than thirty (30) days previous to the date fixed for redemption. In the event such notice is not given to any shareholder such failure to give notice shall not affect the notice given to other shareholders. If less than the whole amount of outstanding Series A Preferred Stock is to be redeemed, the shares to be redeemed shall be selected by lot or pro rata in any manner determined by resolution of the Board of Directors to be fair and proper. From and after the date fixed in any such notice as the date of redemption (unless default shall be made by the corporation in providing moneys at the time and place of redemption for the payment of the redemption price) all dividends upon the Series A Preferred Stock so called for redemption shall cease to accrue, and all rights of the holders of said Series A Preferred Stock as stockholders in the corporation, except the right to receive the redemption price (without interest) upon surrender of the certificate representing the Series A Preferred Stock so called for redemption, duly endorsed for transfer, if required, shall cease and terminate. The corporation's obligation to provide moneys in accordance with the preceding sentence shall be deemed fulfilled if, on or before the redemption date, the corporation shall deposit with a bank or trust company (which may be an affiliate of the corporation) having an office in the Borough of Manhattan, City of New York, having a capital and surplus of at least $5,000,000 funds necessary for such redemption, in trust with irrevocable instructions that such funds be applied to the redemption of the shares of Series A Preferred Stock so called for redemption. Any interest accrued on such funds shall be paid to the corporation from time to time. Any funds so deposited and unclaimed at the end of two (2) years from such redemption date shall be released or repaid to the corporation, after which the holders of such shares of Series A Preferred Stock so called for redemption shall look only to the corporation for payment of the redemption price. IV. The name, residence and post office address of each member of the corporation are as follows:
Name RESIDENCE POST OFFICE ADDRESS ---- --------- ------------------- James A. Blair 9 West 50th Street, 33 Wall Street, Manhattan, New York City Manhattan, New York City James G. Cannon 72 East 54th Street, 14 Nassau Street, Manhattan New York City Manhattan, New York City E. C. Converse 3 East 78th Street, 139 Broadway, Manhattan, New York City Manhattan, New York City Henry P. Davison Englewood, 2 Wall Street,
New Jersey Manhattan, New York City Granville W. Garth 160 West 57th Street, 33 Wall Street Manhattan, New York City Manhattan, New York City A. Barton Hepburn 205 West 57th Street 83 Cedar Street Manhattan, New York City Manhattan, New York City William Logan Montclair, 13 Nassau Street New Jersey Manhattan, New York City George W. Perkins Riverdale, 23 Wall Street, New York Manhattan, New York City William H. Porter 56 East 67th Street 270 Broadway, Manhattan, New York City Manhattan, New York City John F. Thompson Newark, 143 Liberty Street, New Jersey Manhattan, New York City Albert H. Wiggin 42 West 49th Street, 214 Broadway, Manhattan, New York City Manhattan, New York City Samuel Woolverton Mount Vernon, 34 Wall Street, New York Manhattan, New York City Edward F.C. Young 85 Glenwood Avenue, 1 Exchange Place, Jersey City, New Jersey Jersey City, New Jersey
V. The existence of the corporation shall be perpetual. VI. The subscribers, the members of the said corporation, do, and each for himself does, hereby declare that he will accept the responsibilities and faithfully discharge the duties of a director therein, if elected to act as such, when authorized accordance with the provisions of the Banking Law of the State of New York. VII. The number of directors of the corporation shall not be less than 10 nor more than 25." 4. The foregoing restatement of the organization certificate was authorized by the Board of Directors of the corporation at a meeting held on July 21, 1998. IN WITNESS WHEREOF, we have made and subscribed this certificate this 6th day of August, 1998. IN WITNESS WHEREOF, we have made and subscribed this certificate this 6th day of August, 1998. James T. Byrne, Jr. ------------------------------------------- James T. Byrne, Jr. Managing Director and Secretary Lea Lahtinen ------------------------------------------- Lea Lahtinen Vice President and Assistant Secretary Lea Lahtinen ----------------------------------- Lea Lahtinen State of New York ) ) ss: County of New York ) Lea Lahtinen, being duly sworn, deposes and says that she is a Vice President and an Assistant Secretary of Bankers Trust Company, the corporation described in the foregoing certificate; that she has read the foregoing certificate and knows the contents thereof, and that the statements herein contained are true. Lea Lahtinen ----------------------------------- Lea Lahtinen Sworn to before me this 6th day of August, 1998. Sandra L. West - --------------------------- Notary Public SANDRA L. WEST Notary Public State of New York No. 31-4942101 Qualified in New York County Commission Expires September 19, 1998 State of New York, Banking Department I, MANUEL KURSKY, Deputy Superintendent of Banks of the State of New York, DO HEREBY APPROVE the annexed Certificate entitled "RESTATED ORGANIZATION CERTIFICATE OF BANKERS TRUST COMPANY UNDER SECTION 8007 OF THE BANKING LAW," dated August 6, 1998, providing for the restatement of the Organization Certificate and all amendments into a single certificate. WITNESS, my hand and official seal of the Banking Department at the City of New York, this 31ST day of AUGUST in the Year of our Lord one thousand nine hundred and NINETY-EIGHT. Manuel Kursky ----------------------------- DEPUTY Superintendent of Banks CERTIFICATE OF AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST Under Section 8005 of the Banking Law ----------------------------- We, James T. Byrne, Jr. and Lea Lahtinen, being respectively a Managing Director and Secretary and a Vice President and an Assistant Secretary of Bankers Trust Company, do hereby certify: 1. The name of the corporation is Bankers Trust Company. 2. The organization certificate of said corporation was filed by the Superintendent of Banks on the 5th of March, 1903. 3. The organization certificate as heretofore amended is hereby amended to increase the aggregate number of shares which the corporation shall have authority to issue and to increase the amount of its authorized capital stock in conformity therewith. 4. Article III of the organization certificate with reference to the authorized capital stock, the number of shares into which the capital stock shall be divided, the par value of the shares and the capital stock outstanding, which reads as follows: "III. The amount of capital stock which the corporation is hereafter to have is Three Billion, One Million, Six Hundred Sixty-Six Thousand, Six Hundred Seventy Dollars ($3,001,666,670), divided into Two Hundred Million, One Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven (200,166,667) shares with a par value of $10 each designated as Common Stock and 1000 shares with a par value of One Million Dollars ($1,000,000) each designated as Series Preferred Stock." is hereby amended to read as follows: "III. The amount of capital stock which the corporation is hereafter to have is Three Billion, Five Hundred One Million, Six Hundred Sixty-Six Thousand, Six Hundred Seventy Dollars ($3,501,666,670), divided into Two Hundred Million, One Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven (200,166,667) shares with a par value of $10 each designated as Common Stock and 1500 shares with a par value of One Million Dollars ($1,000,000) each designated as Series Preferred Stock." 5. The foregoing amendment of the organization certificate was authorized by unanimous written consent signed by the holder of all outstanding shares entitled to vote thereon. IN WITNESS WHEREOF, we have made and subscribed this certificate this 25th day of September, 1998 James T. Byrne, Jr. ------------------------------------ James T. Byrne, Jr. Managing Director and Secretary Lea Lahtinen ------------------------------------ Lea Lahtinen Vice President and Assistant Secretary State of New York ) ) ss: County of New York ) Lea Lahtinen, being fully sworn, deposes and says that she is a Vice President and an Assistant Secretary of Bankers Trust Company, the corporation described in the foregoing certificate; that she has read the foregoing certificate and knows the contents thereof, and that the statements herein contained are true. Lea Lahtinen ----------------------------- Lea Lahtinen Sworn to before me this 25th day of September, 1998 Sandra L. West - --------------------------------- Notary Public SANDRA L. WEST Notary Public State of New York No. 31-4942101 Qualified in New York County Commission Expires September 19, 2000 State of New York, Banking Department I, P. VINCENT CONLON, Deputy Superintendent of Banks of the State of New York, DO HEREBY APPROVE the annexed Certificate entitled "CERTIFICATE OF AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST COMPANY UNDER SECTION 8005 OF THE BANKING LAW," dated December 16, 1998, providing for an increase in authorized capital stock from $3,501,666,670 consisting of 200,166,667 shares with a par value of $10 each designated as Common Stock and 1,500 shares with a par value of $1,000,000 each designated as Series Preferred Stock to $3,627,308,670 consisting of 212,730,867 shares with a par value of $10 each designated as Common Stock and 1,500 shares with a par value of $1,000,000 each designated as Series Preferred Stock. WITNESS, my hand and official seal of the Banking Department at the City of New York, this 18TH day of DECEMBER in the Year of our Lord one thousand nine hundred and NINETY-EIGHT. P. Vincent Conlon ---------------------------- Deputy Superintendent of Banks CERTIFICATE OF AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST Under Section 8005 of the Banking Law ----------------------------- We, James T. Byrne, Jr. and Lea Lahtinen, being respectively a Managing Director and Secretary and a Vice President and an Assistant Secretary of Bankers Trust Company, do hereby certify: 1. The name of the corporation is Bankers Trust Company. 2. The organization certificate of said corporation was filed by the Superintendent of Banks on the 5th of March, 1903. 3. The organization certificate as heretofore amended is hereby amended to increase the aggregate number of shares which the corporation shall have authority to issue and to increase the amount of its authorized capital stock in conformity therewith. 4. Article III of the organization certificate with reference to the authorized capital stock, the number of shares into which the capital stock shall be divided, the par value of the shares and the capital stock outstanding, which reads as follows: "III. The amount of capital stock which the corporation is hereafter to have is Three Billion, Five Hundred One Million, Six Hundred Sixty-Six Thousand, Six Hundred Seventy Dollars ($3,501,666,670), divided into Two Hundred Million, One Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven (200,166,667) shares with a par value of $10 each designated as Common Stock and 1500 shares with a par value of One Million Dollars ($1,000,000) each designated as Series Preferred Stock." is hereby amended to read as follows: "III. The amount of capital stock which the corporation is hereafter to have is Three Billion, Six Hundred Twenty-Seven Million, Three Hundred Eight Thousand, Six Hundred Seventy Dollars ($3,627,308,670), divided into Two Hundred Twelve Million, Seven Hundred Thirty Thousand, Eight Hundred Sixty- Seven (212,730,867) shares with a par value of $10 each designated as Common Stock and 1500 shares with a par value of One Million Dollars ($1,000,000) each designated as Series Preferred Stock." 5. The foregoing amendment of the organization certificate was authorized by unanimous written consent signed by the holder of all outstanding shares entitled to vote thereon. IN WITNESS WHEREOF, we have made and subscribed this certificate this 16th day of December, 1998 James T. Byrne, Jr. ------------------------------------ James T. Byrne, Jr. Managing Director and Secretary Lea Lahtinen ------------------------------------ Lea Lahtinen Vice President and Assistant Secretary State of New York ) ) ss: County of New York ) Lea Lahtinen, being fully sworn, deposes and says that she is a Vice President and an Assistant Secretary of Bankers Trust Company, the corporation described in the foregoing certificate; that she has read the foregoing certificate and knows the contents thereof, and that the statements herein contained are true. Lea Lahtinen ----------------------------- Lea Lahtinen Sworn to before me this 16th day of December, 1998 Sandra L. West - -------------------------------- Notary Public SANDRA L. WEST Notary Public State of New York No. 31-4942101 Qualified in New York County Commission Expires September 19, 2000 BANKERS TRUST COMPANY ASSISTANT SECRETARY'S CERTIFICATE I, Lea Lahtinen, Vice President and Assistant Secretary of Bankers Trust Company, a corporation duly organized and existing under the laws of the State of New York, the United States of America, do hereby certify that attached copy of the Certificate of Amendment of the Organization Certificate of Bankers Trust Company, dated February 27, 2002, providing for a change of name of Bankers Trust Company to Deutsche Bank Trust Company Americas and approved by the New York State Banking Department on March 14, 2002 to effective on April 15, 2002, is a true and correct copy of the original Certificate of Amendment of the Organization Certificate of Bankers Trust Company on file in the Banking Department, State of New York. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of Bankers Trust Company this 4th day of April, 2002. [SEAL] /s/ Lea Lahtinen --------------------------------------------------- Lea Lahtinen, Vice President and Assistant Secretary Bankers Trust Company State of New York ) ) ss.: County of New York ) On the 4th day of April in the year 2002 before me, the undersigned, a Notary Public in and for said state, personally appeared Lea Lahtinen, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that she executed the same in her capacity, and that by her signature on the instrument, the individual, or the person on behalf of which the individual acted, executed the instrument. /s/ Sonja K. Olsen - ------------------------------------ Notary Public SONJA K. OLSEN Notary Public, State of New York No. 01OL4974457 Qualified in New York County Commission Expires November 13, 2002 State of New York, Banking Department I, P. VINCENT CONLON, Deputy Superintendent of Banks of the State of New York, DO HEREBY APPROVE the annexed Certificate entitled "CERTIFICATE OF AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST COMPANY under Section 8005 of the Banking Law" dated February 27, 2002, providing for a change of name of BANKERS TRUST COMPANY to DEUTSCHE BANK TRUST COMPANY AMERICAS. Witness, my hand and official seal of the Banking Department at the City of New York, this 14th day of March two thousand and two. /s/ P. Vincent Conlon ------------------------------------ Deputy Superintendent of Banks CERTIFICATE OF AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST COMPANY Under Section 8005 of the Banking Law ----------------- We, James T. Byrne Jr., and Lea Lahtinen, being respectively the Secretary, and Vice President and an Assistant Secretary of Bankers Trust Company, do hereby certify: 1. The name of corporation is Bankers Trust Company. 2. The organization certificate of said corporation was filed by the Superintendent of Banks on the 5th day of March, 1903. 3. Pursuant to Section 8005 of the Banking Law, attached hereto as Exhibit A is a certificate issued by the State of New York, Banking Department listing all of the amendments to the Organization Certificate of Bankers Trust Company since its organization that have been filed in the Office of the Superintendent of Banks. 4. The organization certificate as heretofore amended is hereby amended to change the name of Bankers Trust Company to Deutsche Bank Trust Company Americas to be effective on April 15, 2002. 5. The first paragraph number 1 of the organization of Bankers Trust Company with the reference to the name of the Bankers Trust Company, which reads as follows: "1. The name of the corporation is Bankers Trust Company." is hereby amended to read as follows effective on April 15, 2002: "1. The name of the corporation is Deutsche Bank Trust Company Americas." 6. The foregoing amendment of the organization certificate was authorized by unanimous written consent signed by the holder of all outstanding shares entitled to vote thereon. IN WITNESS WHEREOF, we have made and subscribed this certificate this 27th day of February, 2002. /s/ James T. Byrne Jr. --------------------------------------------------- James T. Byrne Jr. Secretary /s/ Lea Lahtinen --------------------------------------------------- Lea Lahtinen Vice President and Assistant Secretary State of New York ) ) ss.: County of New York ) Lea Lahtinen, being duly sworn, deposes and says that she is a Vice President and an Assistant Secretary of Bankers Trust Company, the corporation described in the foregoing certificate; that she has read the foregoing certificate and knows the contents thereof, and that the statements therein contained are true. /s/ Lea Lahtinen ----------------------------- Lea Lahtinen Sworn to before me this 27th day of February, 2002 /s/ Sandra L. West - ------------------------------------ Notary Public SANDRA L. WEST Notary Public, State of New York No. 01WE4942401 Qualified in New York County Commission Expires September 19, 2002 EXHIBIT A State of New York Banking Department I, P. VINCENT CONLON, Deputy Superintendent of Banks of the State of New York, DO HEREBY CERTIFY: THAT, the records in the Office of the Superintendent of Banks indicate that BANKERS TRUST COMPANY is a corporation duly organized and existing under the laws of the State of New York as a trust company, pursuant to Article III of the Banking Law; and THAT, the Organization Certificate of BANKERS TRUST COMPANY was filed in the Office of the Superintendent of Banks on March 5, 1903, and such corporation was authorized to commence business on March 24, 1903; and THAT, the following amendments to its Organization Certificate have been filed in the Office of the Superintendent of Banks as of the dates specified: Certificate of Amendment of Certificate of Incorporation providing for an increase in number of directors - filed on January 14, 1905 Certificate of Amendment of Certificate of Incorporation providing for an increase in capital stock - filed on August 4, 1909 Certificate of Amendment of Certificate of Incorporation providing for an increase in number of directors - filed on February 1, 1911 Certificate of Amendment of Certificate of Incorporation providing for an increase in number of directors - filed on June 17, 1911 Certificate of Amendment of Certificate of Incorporation providing for an increase in capital stock - filed on August 8, 1911 Certificate of Amendment of Certificate of Incorporation providing for an increase in number of directors - filed on August 8, 1911 Certificate of Amendment of Certificate of Incorporation providing for an increase in capital stock - filed on March 21, 1912 Certificate of Amendment of Certificate of Incorporation providing for a decrease in number of directors - filed on January 15, 1915 Certificate of Amendment of Certificate of Incorporation providing for a decrease in number of directors - filed on December 18, 1916 Certificate of Amendment of Certificate of Incorporation providing for an increase in capital stock - filed on April 20, 1917 Certificate of Amendment of Certificate of Incorporation providing for an increase in number of directors - filed on April 20, 1917 Certificate of Amendment of Certificate of Incorporation providing for an increase in capital stock - filed on December 28, 1918 Certificate of Amendment of Certificate of Incorporation providing for an increase in capital stock - filed on December 4, 1919 Certificate of Amendment of Certificate of Incorporation providing for an increase in number of directors - filed on January 15, 1926 Certificate of Amendment of Certificate of Incorporation providing for an increase in capital stock - filed on June 12, 1928 Certificate of Amendment of Certificate of Incorporation providing for a change in shares - filed on April 4, 1929 Certificate of Amendment of Certificate of Incorporation providing for a minimum and maximum number of directors - filed on January 11, 1934 Certificate of Extension to perpetual - filed on January 13, 1941 Certificate of Amendment of Certificate of Incorporation providing for a minimum and maximum number of directors - filed on January 13, 1941 Certificate of Amendment of Certificate of Incorporation providing for an increase in capital stock - filed on December 11, 1944 Certificate of Amendment of Certificate of Incorporation providing for an increase in capital stock - filed January 30, 1953 Restated Certificate of Incorporation - filed November 6, 1953 Certificate of Amendment of Certificate of Incorporation providing for an increase in capital stock - filed on April 8, 1955 Certificate of Amendment of Certificate of Incorporation providing for an increase in capital stock - filed on February 1, 1960 Certificate of Amendment of Certificate of Incorporation providing for an increase in capital stock - filed on July 14, 1960 Certificate of Amendment of Certificate of Incorporation providing for a change in shares - filed on September 30, 1960 Certificate of Amendment of Certificate of Incorporation providing for an increase in capital stock - filed on January 26, 1962 Certificate of Amendment of Certificate of Incorporation providing for a change in shares - filed on September 9, 1963 Certificate of Amendment of Certificate of Incorporation providing for an increase in capital stock - filed on February 7, 1964 Certificate of Amendment of Certificate of Incorporation providing for an increase in capital stock - filed on February 24, 1965 Certificate of Amendment of the Organization Certificate providing for a decrease in capital stock - filed January 24, 1967 Restated Organization Certificate - filed June 1, 1971 Certificate of Amendment of the Organization Certificate providing for an increase in capital stock - filed October 29, 1976 Certificate of Amendment of the Organization Certificate providing for an increase in capital stock - filed December 22, 1977 Certificate of Amendment of the Organization Certificate providing for an increase in capital stock - filed August 5, 1980 Restated Organization Certificate - filed July 1, 1982 Certificate of Amendment of the Organization Certificate providing for an increase in capital stock - filed December 27, 1984 Certificate of Amendment of the Organization Certificate providing for an increase in capital stock - filed September 18, 1986 Certificate of Amendment of the Organization Certificate providing for a minimum and maximum number of directors - filed January 22, 1990 Certificate of Amendment of the Organization Certificate providing for an increase in capital stock - filed June 28, 1990 Restated Organization Certificate - filed August 20, 1990 Certificate of Amendment of the Organization Certificate providing for an increase in capital stock - filed June 26, 1992 Certificate of Amendment of the Organization Certificate providing for an increase in capital stock - filed March 28, 1994 Certificate of Amendment of the Organization Certificate providing for an increase in capital stock - filed June 23, 1995 Certificate of Amendment of the Organization Certificate providing for an increase in capital stock - filed December 27, 1995 Certificate of Amendment of the Organization Certificate providing for an increase in capital stock - filed March 21, 1996 Certificate of Amendment of the Organization Certificate providing for an increase in capital stock - filed December 27, 1996 Certificate of Amendment to the Organization Certificate providing for an increase in capital stock - filed June 27, 1997 Certificate of Amendment of the Organization Certificate providing for an increase in capital stock - filed September 26, 1997 Certificate of Amendment of the Organization Certificate providing for an increase in capital stock - filed December 29, 1997 Certificate of Amendment of the Organization Certificate providing for an increase in capital stock - filed March 26, 1998 Certificate of Amendment of the Organization Certificate providing for an increase in capital stock - filed June 23, 1998 Restated Organization Certificate - filed August 31, 1998 Certificate of Amendment of the Organization Certificate providing for an increase in capital stock - filed September 25, 1998 Certificate of Amendment of the Organization Certificate providing for an increase in capital stock - filed December 18, 1998; and Certificate of Amendment of the Organization Certificate providing for a change in the number of directors - filed September 3, 1999; and THAT, no amendments to its Restated Organization Certificate have been filed in the Office of the Superintendent of Banks except those set forth above; and attached hereto; and I DO FURTHER CERTIFY THAT, BANKERS TRUST COMPANY is validly existing as a banking organization with its principal office and place of business located at 130 Liberty Street, New York, New York. WITNESS, my hand and official seal of the Banking Department at the City of New York this 16th day of October in the Year Two Thousand and One. /s/ P. Vincent Conlon ------------------------------------ Deputy Superintendent of Banks DEUTSCHE BANK TRUST COMPANY AMERICAS BY-LAWS APRIL 15, 2002 DEUTSCHE BANK TRUST COMPANY AMERICAS NEW YORK BY-LAWS OF DEUTSCHE BANK TRUST COMPANY AMERICAS ARTICLE I MEETINGS OF STOCKHOLDERS SECTION 1. The annual meeting of the stockholders of this Company shall be held at the office of the Company in the Borough of Manhattan, City of New York, in January of each year, for the election of directors and such other business as may properly come before said meeting. SECTION 2. Special meetings of stockholders other than those regulated by statute may be called at any time by a majority of the directors. It shall be the duty of the Chairman of the Board, the Chief Executive Officer, the President or any Co-President to call such meetings whenever requested in writing to do so by stockholders owning a majority of the capital stock. SECTION 3. At all meetings of stockholders, there shall be present, either in person or by proxy, stockholders owning a majority of the capital stock of the Company, in order to constitute a quorum, except at special elections of directors, as provided by law, but less than a quorum shall have power to adjourn any meeting. SECTION 4. The Chairman of the Board or, in his absence, the Chief Executive Officer or, in his absence, the President or any Co-President or, in their absence, the senior officer present, shall preside at meetings of the stockholders and shall direct the proceedings and the order of business. The Secretary shall act as secretary of such meetings and record the proceedings. ARTICLE II DIRECTORS SECTION 1. The affairs of the Company shall be managed and its corporate powers exercised by a Board of Directors consisting of such number of directors, but not less than seven nor more than fifteen, as may from time to time be fixed by resolution adopted by a majority of the directors then in office, or by the stockholders. In the event of any increase in the number of directors, additional directors may be elected within the limitations so fixed, either by the stockholders or within the limitations imposed by law, by a majority of directors then in office. One-third of the number of directors, as fixed from time to time, shall constitute a quorum. Any one or more members of the Board of Directors or any Committee thereof may participate in a meeting of the Board of Directors or Committee thereof by means of a conference telephone, video conference or similar communications equipment which allows all persons participating in the meeting to hear each other at the same time. Participation by such means shall constitute presence in person at such a meeting. All directors hereafter elected shall hold office until the next annual meeting of the stockholders and until their successors are elected and have qualified. No Officer-Director who shall have attained age 65, or earlier relinquishes his responsibilities and title, shall be eligible to serve as a director. SECTION 2. Vacancies not exceeding one-third of the whole number of the Board of Directors may be filled by the affirmative vote of a majority of the directors then in office, and the directors so elected shall hold office for the balance of the unexpired term. SECTION 3. The Chairman of the Board shall preside at meetings of the Board of Directors. In his absence, the Chief Executive Officer or, in his absence the President or any Co-President or, in their absence such other director as the Board of Directors from time to time may designate shall preside at such meetings. SECTION 4. The Board of Directors may adopt such Rules and Regulations for the conduct of its meetings and the management of the affairs of the Company as it may deem proper, not inconsistent with the laws of the State of New York, or these By-Laws, and all officers and employees shall strictly adhere to, and be bound by, such Rules and Regulations. SECTION 5. Regular meetings of the Board of Directors shall be held from time to time provided, however, that the Board of Directors shall hold a regular meeting not less than six times a year, provided that during any three consecutive calendar months the Board of Directors shall meet at least once, and its Executive Committee shall not be required to meet at least once in each thirty day period during which the Board of Directors does not meet. Special meetings of the Board of Directors may be called upon at least two day's notice whenever it may be deemed proper by the Chairman of the Board or, the Chief Executive Officer or, the President or any Co-President or, in their absence, by such other director as the Board of Directors may have designated pursuant to Section 3 of this Article, and shall be called upon like notice whenever any three of the directors so request in writing. SECTION 6. The compensation of directors as such or as members of committees shall be fixed from time to time by resolution of the Board of Directors. ARTICLE III COMMITTEES SECTION 1. There shall be an Executive Committee of the Board consisting of not less than five directors who shall be appointed annually by the Board of Directors. The Chairman of the Board shall preside at meetings of the Executive Committee. In his absence, the Chief Executive Officer or, in his absence, the President or any Co-President or, in their absence, such other member of the Committee as the Committee from time to time may designate shall preside at such meetings. The Executive Committee shall possess and exercise to the extent permitted by law all of the powers of the Board of Directors, except when the latter is in session, and shall keep minutes of its proceedings, which shall be presented to the Board of Directors at its next subsequent meeting. All acts done and powers and authority conferred by the Executive Committee from time to time shall be and be deemed to be, and may be certified as being, the act and under the authority of the Board of Directors. A majority of the Committee shall constitute a quorum, but the Committee may act only by the concurrent vote of not less than one-third of its members, at least one of who must be a director other than an officer. Any one or more directors, even though not members of the Executive Committee, may attend any meeting of the Committee, and the member or members of the Committee present, even though less than a quorum, may designate any one or more of such directors as a substitute or substitutes for any absent member or members of the Committee, and each such substitute or substitutes shall be counted for quorum, voting, and all other purposes as a member or members of the Committee. SECTION 2. There shall be an Audit Committee appointed annually by resolution adopted by a majority of the entire Board of Directors which shall consist of such number of directors, who are not also officers of the Company, as may from time to time be fixed by resolution adopted by the Board of Directors. The Chairman shall be designated by the Board of Directors, who shall also from time to time fix a quorum for meetings of the Committee. Such Committee shall conduct the annual directors' examinations of the Company as required by the New York State Banking Law; shall review the reports of all examinations made of the Company by public authorities and report thereon to the Board of Directors; and shall report to the Board of Directors such other matters as it deems advisable with respect to the Company, its various departments and the conduct of its operations. In the performance of its duties, the Audit Committee may employ or retain, from time to time, expert assistants, independent of the officers or personnel of the Company, to make studies of the Company's assets and liabilities as the Committee may request and to make an examination of the accounting and auditing methods of the Company and its system of internal protective controls to the extent considered necessary or advisable in order to determine that the operations of the Company, including its fiduciary departments, are being audited by the General Auditor in such a manner as to provide prudent and adequate protection. The Committee also may direct the General Auditor to make such investigation as it deems necessary or advisable with respect to the Company, its various departments and the conduct of its operations. The Committee shall hold regular quarterly meetings and during the intervals thereof shall meet at other times on call of the Chairman. SECTION 3. The Board of Directors shall have the power to appoint any other Committees as may seem necessary, and from time to time to suspend or continue the powers and duties of such Committees. Each Committee appointed pursuant to this Article shall serve at the pleasure of the Board of Directors. ARTICLE IV OFFICERS SECTION 1. The Board of Directors shall elect from among their number a Chairman of the Board and a Chief Executive Officer; and shall also elect a President, or two or more Co-Presidents, and may also elect, one or more Vice Chairmen, one or more Executive Vice Presidents, one or more Managing Directors, one or more Senior Vice Presidents, one or more Directors, one or more Vice Presidents, one or more General Managers, a Secretary, a Controller, a Treasurer, a General Counsel, a General Auditor, a General Credit Auditor, who need not be directors. The officers of the corporation may also include such other officers or assistant officers as shall from time to time be elected or appointed by the Board. The Chairman of the Board or the Chief Executive Officer or, in their absence, the President or any Co-President, or any Vice Chairman, may from time to time appoint assistant officers. All officers elected or appointed by the Board of Directors shall hold their respective offices during the pleasure of the Board of Directors, and all assistant officers shall hold office at the pleasure of the Board or the Chairman of the Board or the Chief Executive Officer or, in their absence, the President, or any Co-President or any Vice Chairman. The Board of Directors may require any and all officers and employees to give security for the faithful performance of their duties. SECTION 2. The Board of Directors shall designate the Chief Executive Officer of the Company who may also hold the additional title of Chairman of the Board, or President, or any Co-President, and such person shall have, subject to the supervision and direction of the Board of Directors or the Executive Committee, all of the powers vested in such Chief Executive Officer by law or by these By-Laws, or which usually attach or pertain to such office. The other officers shall have, subject to the supervision and direction of the Board of Directors or the Executive Committee or the Chairman of the Board or, the Chief Executive Officer, the powers vested by law or by these By-Laws in them as holders of their respective offices and, in addition, shall perform such other duties as shall be assigned to them by the Board of Directors or the Executive Committee or the Chairman of the Board or the Chief Executive Officer. The General Auditor shall be responsible, through the Audit Committee, to the Board of Directors for the determination of the program of the internal audit function and the evaluation of the adequacy of the system of internal controls. Subject to the Board of Directors, the General Auditor shall have and may exercise all the powers and shall perform all the duties usual to such office and shall have such other powers as may be prescribed or assigned to him from time to time by the Board of Directors or vested in him by law or by these By-Laws. He shall perform such other duties and shall make such investigations, examinations and reports as may be prescribed or required by the Audit Committee. The General Auditor shall have unrestricted access to all records and premises of the Company and shall delegate such authority to his subordinates. He shall have the duty to report to the Audit Committee on all matters concerning the internal audit program and the adequacy of the system of internal controls of the Company which he deems advisable or which the Audit Committee may request. Additionally, the General Auditor shall have the duty of reporting independently of all officers of the Company to the Audit Committee at least quarterly on any matters concerning the internal audit program and the adequacy of the system of internal controls of the Company that should be brought to the attention of the directors except those matters responsibility for which has been vested in the General Credit Auditor. Should the General Auditor deem any matter to be of special immediate importance, he shall report thereon forthwith to the Audit Committee. The General Auditor shall report to the Chief Financial Officer only for administrative purposes. The General Credit Auditor shall be responsible to the Chief Executive Officer and, through the Audit Committee, to the Board of Directors for the systems of internal credit audit, shall perform such other duties as the Chief Executive Officer may prescribe, and shall make such examinations and reports as may be required by the Audit Committee. The General Credit Auditor shall have unrestricted access to all records and may delegate such authority to subordinates. SECTION 3. The compensation of all officers shall be fixed under such plan or plans of position evaluation and salary administration as shall be approved from time to time by resolution of the Board of Directors. SECTION 4. The Board of Directors, the Executive Committee, the Chairman of the Board, the Chief Executive Officer or any person authorized for this purpose by the Chief Executive Officer, shall appoint or engage all other employees and agents and fix their compensation. The employment of all such employees and agents shall continue during the pleasure of the Board of Directors or the Executive Committee or the Chairman of the Board or the Chief Executive Officer or any such authorized person; and the Board of Directors, the Executive Committee, the Chairman of the Board, the Chief Executive Officer or any such authorized person may discharge any such employees and agents at will. ARTICLE V INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHERS SECTION 1. The Company shall, to the fullest extent permitted by Section 7018 of the New York Banking Law, indemnify any person who is or was made, or threatened to be made, a party to an action or proceeding, whether civil or criminal, whether involving any actual or alleged breach of duty, neglect or error, any accountability, or any actual or alleged misstatement, misleading statement or other act or omission and whether brought or threatened in any court or administrative or legislative body or agency, including an action by or in the right of the Company to procure a judgment in its favor and an action by or in the right of any other corporation of any type or kind, domestic or foreign, or any partnership, joint venture, trust, employee benefit plan or other enterprise, which any director or officer of the Company is servicing or served in any capacity at the request of the Company by reason of the fact that he, his testator or intestate, is or was a director or officer of the Company, or is serving or served such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise in any capacity, against judgments, fines, amounts paid in settlement, and costs, charges and expenses, including attorneys' fees, or any appeal therein; provided, however, that no indemnification shall be provided to any such person if a judgment or other final adjudication adverse to the director or officer establishes that (i) his acts were committed in bad faith or were the result of active and deliberate dishonesty and, in either case, were material to the cause of action so adjudicated, or (ii) he personally gained in fact a financial profit or other advantage to which he was not legally entitled. SECTION 2. The Company may indemnify any other person to whom the Company is permitted to provide indemnification or the advancement of expenses by applicable law, whether pursuant to rights granted pursuant to, or provided by, the New York Banking Law or other rights created by (i) a resolution of stockholders, (ii) a resolution of directors, or (iii) an agreement providing for such indemnification, it being expressly intended that these By-Laws authorize the creation of other rights in any such manner. SECTION 3. The Company shall, from time to time, reimburse or advance to any person referred to in Section 1 the funds necessary for payment of expenses, including attorneys' fees, incurred in connection with any action or proceeding referred to in Section 1, upon receipt of a written undertaking by or on behalf of such person to repay such amount(s) if a judgment or other final adjudication adverse to the director or officer establishes that (i) his acts were committed in bad faith or were the result of active and deliberate dishonesty and, in either case, were material to the cause of action so adjudicated, or (ii) he personally gained in fact a financial profit or other advantage to which he was not legally entitled. SECTION 4. Any director or officer of the Company serving (i) another corporation, of which a majority of the shares entitled to vote in the election of its directors is held by the Company, or (ii) any employee benefit plan of the Company or any corporation referred to in clause (i) in any capacity shall be deemed to be doing so at the request of the Company. In all other cases, the provisions of this Article V will apply (i) only if the person serving another corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise so served at the specific request of the Company, evidenced by a written communication signed by the Chairman of the Board, the Chief Executive Officer, the President or any Co-President, and (ii) only if and to the extent that, after making such efforts as the Chairman of the Board, the Chief Executive Officer, the President or any Co-President shall deem adequate in the circumstances, such person shall be unable to obtain indemnification from such other enterprise or its insurer. SECTION 5. Any person entitled to be indemnified or to the reimbursement or advancement of expenses as a matter of right pursuant to this Article V may elect to have the right to indemnification (or advancement of expenses) interpreted on the basis of the applicable law in effect at the time of occurrence of the event or events giving rise to the action or proceeding, to the extent permitted by law, or on the basis of the applicable law in effect at the time indemnification is sought. SECTION 6. The right to be indemnified or to the reimbursement or advancement of expense pursuant to this Article V (i) is a contract right pursuant to which the person entitled thereto may bring suit as if the provisions hereof were set forth in a separate written contract between the Company and the director or officer, (ii) is intended to be retroactive and shall be available with respect to events occurring prior to the adoption hereof, and (iii) shall continue to exist after the rescission or restrictive modification hereof with respect to events occurring prior thereto. SECTION 7. If a request to be indemnified or for the reimbursement or advancement of expenses pursuant hereto is not paid in full by the Company within thirty days after a written claim has been received by the Company, the claimant may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled also to be paid the expenses of prosecuting such claim. Neither the failure of the Company (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of or reimbursement or advancement of expenses to the claimant is proper in the circumstance, nor an actual determination by the Company (including its Board of Directors, independent legal counsel, or its stockholders) that the claimant is not entitled to indemnification or to the reimbursement or advancement of expenses, shall be a defense to the action or create a presumption that the claimant is not so entitled. SECTION 8. A person who has been successful, on the merits or otherwise, in the defense of a civil or criminal action or proceeding of the character described in Section 1 shall be entitled to indemnification only as provided in Sections 1 and 3, notwithstanding any provision of the New York Banking Law to the contrary. ARTICLE VI SEAL SECTION 1. The Board of Directors shall provide a seal for the Company, the counterpart dies of which shall be in the charge of the Secretary of the Company and such officers as the Chairman of the Board, the Chief Executive Officer or the Secretary may from time to time direct in writing, to be affixed to certificates of stock and other documents in accordance with the directions of the Board of Directors or the Executive Committee. SECTION 2. The Board of Directors may provide, in proper cases on a specified occasion and for a specified transaction or transactions, for the use of a printed or engraved facsimile seal of the Company. ARTICLE VII CAPITAL STOCK SECTION 1. Registration of transfer of shares shall only be made upon the books of the Company by the registered holder in person, or by power of attorney, duly executed, witnessed and filed with the Secretary or other proper officer of the Company, on the surrender of the certificate or certificates of such shares properly assigned for transfer. ARTICLE VIII CONSTRUCTION SECTION 1. The masculine gender, when appearing in these By-Laws, shall be deemed to include the feminine gender. ARTICLE IX AMENDMENTS SECTION 1. These By-Laws may be altered, amended or added to by the Board of Directors at any meeting, or by the stockholders at any annual or special meeting, provided notice thereof has been given. I, Yana Kalachikova, Associate, of Deutsche Bank Trust Company Americas, New York, New York, hereby certify that the foregoing is a complete, true and correct copy of the By-Laws of Deutsche Bank Trust Company Americas, and that the same are in full force and effect at this date. /s/ Yana Kalachikova -------------------- Associate DATED AS OF: October 6, 2004 DEUTSCHE BANK TRUST COMPANY AMERICAS FFIEC 031 - ------------------------------------ Legal Title of Bank RC-1 NEW YORK - ------------------------------------ City 12 NY 10019 - ------------------------------------ State Zip Code FDIC Certificate Number - 00623 CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL AND STATE-CHARTERED SAVINGS BANKS FOR JUNE 30, 2004 All schedules are to be reported in thousands of dollars. Unless otherwise indicated, reported the amount outstanding as of the last business day of the quarter. SCHEDULE RC--BALANCE SHEET
Dollar Amounts in Thousands | RCFD | - ------------------------------------------------------------------------------------------------------------------------------ ASSETS | / / / / / / / / / / / / / / / / / | 1. Cash and balances due from depository institutions (from Schedule RC-A):................................................................ | / / / / / / / / / / / / / / / / / | a. Noninterest-bearing balances and currency and coin (1) ..................... | 0081 2,546,000 | 1.a. b. Interest-bearing balances (2) .............................................. | 0071 240,000 | 1.b. 2. Securities: .................................................................... | / / / / / / / / / / / / / / / / / | a. Held-to-maturity securities (from Schedule RC-B, column A) ................. | 1754 0 | 2.a. b. Available-for-sale securities (from Schedule RC-B, column D)................ | 1773 50,000 | 2.b. 3. Federal funds sold and securities purchased under agreements to resell...................................................................... | RCON | 3. a. Federal funds sold in domestic offices...................................... | B987 443,000 | 3.a | RCFD | b. Securities purchased under agreements to resell (3)......................... | B989 6,442,000 | 3.b 4. Loans and lease financing receivables (from Schedule RC-C):..................... | / / / / / / / / / / / / / / / / / | a. Loans and leases held for sale.............................................. | 5369 0 | 4.a. b. Loans and leases, net unearned income.......................B528 7,338,000 | / / / / / / / / / / / / / / / / / | 4.b. c. LESS: Allowance for loan and lease losses ..................3123 331,000 | / / / / / / / / / / / / / / / / / | 4.c. d. Loans and leases, net of unearned income and | / / / / / / / / / / / / / / / / / | allowance (item 4.b minus 4.c) ............................................ | B529 7,007,000 | 4.d. 5. Trading Assets (from schedule RC-D) ........................................... | 3545 8,557,000 | 5. 6. Premises and fixed assets (including capitalized leases) ....................... | 2145 298,000 | 6. 7. Other real estate owned (from Schedule RC-M) ................................... | 2150 6,000 | 7. 8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M)................................................ | 2130 8,000 | 8. 9. Customers' liability to this bank on acceptances outstanding ................... | 2155 0 | 9. 10. Intangible assets .............................................................. | / / / / / / / / / / / / / / / / / | a. Goodwill.................. ........................................... | 3163 0 | 10.a b. Other intangible assets (from Schedule RC-M) ............................ | 0426 30,000 | 10.b 11. Other assets (from Schedule RC-F) .............................................. | 2160 5,342,000 | 11. 12. Total assets (sum of items 1 through 11) ....................................... | 2170 30,969,000 | 12. ----------------------------------------
- -------------------------- (1) Includes cash items in process of collection and unposted debits. (2) Includes time certificates of deposit not held for trading. (3) Includes all securities resale agreements in domestic and foreign offices, regardless of maturity. DEUTSCHE BANK TRUST COMPANY AMERICAS FFIEC 031 - ------------------------------------ Legal Title of Bank RC-2 FDIC Certificate Number - 00623 13 SCHEDULE RC--CONTINUED
DOLLAR AMOUNTS IN THOUSANDS - ----------------------------------------------------------------------------------------------- LIABILITIES 13. Deposits: | / / / / / / / / / / / | a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, part I) ................................................................ | RCON 2200 7,525,000 | 13.a. (1) Noninterest-bearing(1) .....................................RCON 6631 2,777,000 | / / / / / / / / / / / | 13.a.(1) (2) Interest-bearing ...........................................RCON 6636 4,748,000 | / / / / / / / / / / / | 13.a.(2) b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E part II).......................................................... | / / / / / / / / / / / | | RCFN 2200 7,110,000 | 13.b. (1) Noninterest-bearing ........................................RCFN 6631 2,112,000 | / / / / / / / / / / / | 13.b.(1) (2) Interest-bearing ...........................................RCFN 6636 4,998,000 | / / / / / / / / / / / | 13.b.(2) 14. Federal funds purchased and securities sold under agreements to repurchase: ........................................................................... | RCON | a. Federal Funds purchased in domestic offices (2)......................................... | B993 5,381,000 | 14.a | RCFD | b. Securities sold under agreements to repurchase (3)...................................... | 8995 0 | 14.b 15. Trading liabilities (from Schedule RC-D)................................................... | RCFD 3548 1,079,000 | 15. 16. Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases): ................................................... | / / / / / / / / / / / | (from Schedule RC-M):...................................................................... | RCFD 3190 158,000 | 16. 17. Not Applicable............................................................................. | / / / / / / / / / / / | 17. 18. Bank's liability on acceptances executed and outstanding .................................. | RCFD 2920 0 | 18. 19. Subordinated notes and debentures (2)...................................................... | RCFD 3200 9,000 | 19. 20. Other liabilities (from Schedule RC-G) .................................................... | RCFD 2930 2,031,000 | 20. 21. Total liabilities (sum of items 13 through 20) ............................................ | RCFD 2948 23,293,000 | 21. 22. Minority interest in consolidated subsidiaries | RCFD 3000 413,000 | 22. | / / / / / / / / / / / | EQUITY CAPITAL | / / / / / / / / / / / | 23. Perpetual preferred stock and related surplus ............................................. | RCFD 3838 1,500,000 | 23. 24. Common stock .............................................................................. | RCFD 3230 2,127,000 | 24. 25. Surplus (exclude all surplus related to preferred stock) .................................. | RCFD 3839 584,000 | 25. 26. a. Retained earnings ...................................................................... | RCFD 3632 2,986,000 | 26.a. b. Accumulated other comprehensive Income (3) ............................................. | RCFD B530 66,000 | 26.b. 27. Other equity capital components (4) ....................................................... | RCFD A130 0 | 27. 28. Total equity capital (sum of items 23 through 27) ......................................... | RCFD 3210 7,263,000 | 28. 29. Total liabilities, minority interest, and equity capital (sum of items 21, 22, and 28)............................................................. | RCFD 3300 30,969,000 | 29. | ____________|
Memorandum To be reported only with the March Report of Condition. 1. Indicate in the box at the right the number of the statement below that Number best describes the most comprehensive level of auditing work performed for -------------------------------------------- the bank by independent external auditors as of any date during 2002...... | RCFD 6724 1 | M.1 --------------------------------------------
1 = Independent audit of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the bank 2 = Independent audit of the bank's parent holding company conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the consolidated holding company (but not on the bank separately) 3 = Attestation on bank management's assertion on the effectiveness of the bank's internal control over financial reporting by a certified public accounting firm 4 = Directors' examination of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm (may be required by state chartering authority) 5 = Directors' examination of the bank performed by other external auditors (may be required by state chartering authority) 6 = Review of the bank's financial statements by external auditors 7 = Compilation of the bank's financial statements by external auditors 8 = Other audit procedures (excluding tax preparation work) 9 = No external audit work - ---------- (1) Includes total demand deposits and noninterest-bearing time and savings deposits. (2) Report overnight Federal Home Loan Bank advances in Schedule RC, Item 16, "other borrowed money." (3) Includes all securities repurchase agreements in domestic and foreign offices, regardless of maturity. (4) Includes limited-life preferred stock and related surplus. (5) Includes net unrealized holding gains (losses) on available-for-sale securities, accumulated net gains (losses) on cash flow hedges, cumulative foreign currency translation adjustments, and minimum pension liability adjustments. (6) Includes treasury stock and unearned Employee Stock Plan shares. EX-25.D 18 x99885s3exv25wd.txt FORM T-1 STATEMENT OF ELIGIBLILTY AND QUALIFICATION Exhibit 25(d) - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ------------------------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________ ---------------------------------------- JPMORGAN CHASE BANK (Exact name of trustee as specified in its charter) NEW YORK 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification No.) 270 PARK AVENUE NEW YORK, NEW YORK 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) --------------------------------------------- CITIGROUP GLOBAL MARKETS HOLDINGS INC. (Exact name of obligor as specified in its charter) NEW YORK 11-2418067 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) 388 GREENWICH STREET NEW YORK, NEW YORK 10013 (Address of principal executive offices) (Zip Code) -------------------------------------------------- JUNIOR SUBORDINATED DEBT INDENTURE (Title of the indenture securities) - -------------------------------------------------------------------------------- GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a)Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, State House, Albany, New York 12110. Board of Governors of the Federal Reserve System, Washington, D.C., 20551 Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. Federal Deposit Insurance Corporation, Washington, D.C., 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. -2- 1 Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Restated Organization Certificate of the Trustee dated March 25, 1997 and the Certificate of Amendment dated October 22, 2001 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference.) 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank. 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference.) 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank. 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, JPMorgan Chase Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 7th day of October, 2004. JPMORGAN CHASE BANK By /s/ Natalie B. Pesce -------------------------------------- Natalie B. Pesce, Assistant Vice President -3- Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF JPMorgan Chase Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business March 31, 2004, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS ASSETS IN MILLIONS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin .......................................... $ 19,589 Interest-bearing balances .................................. 35,104 Securities: Held to maturity securities ..................................... 156 Available for sale securities ................................... 64,028 Federal funds sold and securities purchased under agreements to resell Federal funds sold in domestic offices ..................... 30,180 Securities purchased under agreements to resell ............ 74,963 Loans and lease financing receivables: Loans and leases held for sale ............................. 19,061 Loans and leases, net of unearned income $163,825 Less: Allowance for loan and lease losses 2,771 Loans and leases, net of unearned income and allowance .................................................. 161,054 Trading Assets .................................................. 191,989 Premises and fixed assets (including capitalized leases) ........ 5,959 Other real estate owned ......................................... 118 Investments in unconsolidated subsidiaries and associated companies ....................................... 837 Customers' liability to this bank on acceptances outstanding ................................................ 203 Intangible assets Goodwill ................................................ 2,539 Other Intangible assets ................................. 4,521 Other assets .................................................... 38,391 TOTAL ASSETS .................................................... $648,692 ========
LIABILITIES Deposits In domestic offices ........................................ $210,211 Noninterest-bearing ................ $ 80,262 Interest-bearing ................... 129,949 In foreign offices, Edge and Agreement subsidiaries and IBF's ..................................... 120,623 Noninterest-bearing ................ $ 7,920 Interest-bearing ................... 112,703 Federal funds purchased and securities sold under agree- ments to repurchase: Federal funds purchased in domestic offices ................ 6,480 Securities sold under agreements to repurchase ............. 102,641 Trading liabilities ............................................. 114,412 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases) .................. 20,692 Bank's liability on acceptances executed and outstanding ........ 203 Subordinated notes and debentures ............................... 8,039 Other liabilities ............................................... 26,877 TOTAL LIABILITIES ............................................... 610,178 Minority Interest in consolidated subsidiaries .................. 346 EQUITY CAPITAL Perpetual preferred stock and related surplus ................... 0 Common stock .................................................... 1,785 Surplus (exclude all surplus related to preferred stock) ....... 16,318 Retained earnings ............................................... 20,049 Accumulated other comprehensive income .......................... 16 Other equity capital components ................................. 0 TOTAL EQUITY CAPITAL ............................................ 38,168 -------- TOTAL LIABILITIES, MINORITY INTEREST, AND EQUITY CAPITAL ........ $648,692 ========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct. WILLIAM B. HARRISON, JR. ) ELLEN V. FUTTER ) DIRECTORS FRANK A. BENNACK, JR. ) EX-25.E 19 x99885s3exv25we.txt FORM T-1 STATEMENT OF ELIGIBLILTY AND QUALIFICATION Exhibit 25(e) - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ------------------------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________ ---------------------------------------- JPMORGAN CHASE BANK (Exact name of trustee as specified in its charter) NEW YORK 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification No.) 270 PARK AVENUE NEW YORK, NEW YORK 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) --------------------------------------------- CGMH CAPITAL II (Exact name of obligor as specified in its charter) DELAWARE 06-6452994 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) 388 GREENWICH STREET NEW YORK, NEW YORK 10013 (Address of principal executive offices) (Zip Code) -------------------------------------------------- CAPITAL SECURITIES (Title of the indenture securities) - -------------------------------------------------------------------------------- GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a)Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, State House, Albany, New York 12110. Board of Governors of the Federal Reserve System, Washington, D.C., 20551 Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. Federal Deposit Insurance Corporation, Washington, D.C., 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. -2- Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Restated Organization Certificate of the Trustee dated March 25, 1997 and the Certificate of Amendment dated October 22, 2001 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference.) 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank. 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference.) 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank. 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, JPMorgan Chase Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 7th day of October, 2004. JPMORGAN CHASE BANK By /s/ Natalie B. Pesce -------------------------------------- Natalie B. Pesce, Assistant Vice President -3- Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF JPMorgan Chase Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business March 31, 2004, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS ASSETS IN MILLIONS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin .......................................... $ 19,589 Interest-bearing balances .................................. 35,104 Securities: Held to maturity securities ..................................... 156 Available for sale securities ................................... 64,028 Federal funds sold and securities purchased under agreements to resell Federal funds sold in domestic offices ..................... 30,180 Securities purchased under agreements to resell ............ 74,963 Loans and lease financing receivables: Loans and leases held for sale ............................. 19,061 Loans and leases, net of unearned income $163,825 Less: Allowance for loan and lease losses 2,771 Loans and leases, net of unearned income and allowance .................................................. 161,054 Trading Assets .................................................. 191,989 Premises and fixed assets (including capitalized leases) ........ 5,959 Other real estate owned ......................................... 118 Investments in unconsolidated subsidiaries and associated companies ....................................... 837 Customers' liability to this bank on acceptances outstanding ................................................ 203 Intangible assets Goodwill ................................................ 2,539 Other Intangible assets ................................. 4,521 Other assets .................................................... 38,391 TOTAL ASSETS .................................................... $648,692 ========
LIABILITIES Deposits In domestic offices ........................................ $210,211 Noninterest-bearing ................ $ 80,262 Interest-bearing ................... 129,949 In foreign offices, Edge and Agreement subsidiaries and IBF's ..................................... 120,623 Noninterest-bearing ................ $ 7,920 Interest-bearing ................... 112,703 Federal funds purchased and securities sold under agree- ments to repurchase: Federal funds purchased in domestic offices ................ 6,480 Securities sold under agreements to repurchase ............. 102,641 Trading liabilities ............................................. 114,412 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases) .................. 20,692 Bank's liability on acceptances executed and outstanding ........ 203 Subordinated notes and debentures ............................... 8,039 Other liabilities ............................................... 26,877 TOTAL LIABILITIES ............................................... 610,178 Minority Interest in consolidated subsidiaries .................. 346 EQUITY CAPITAL Perpetual preferred stock and related surplus ................... 0 Common stock .................................................... 1,785 Surplus (exclude all surplus related to preferred stock) ....... 16,318 Retained earnings ............................................... 20,049 Accumulated other comprehensive income .......................... 16 Other equity capital components ................................. 0 TOTAL EQUITY CAPITAL ............................................ 38,168 -------- TOTAL LIABILITIES, MINORITY INTEREST, AND EQUITY CAPITAL ........ $648,692 ========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct. WILLIAM B. HARRISON, JR. ) ELLEN V. FUTTER ) DIRECTORS FRANK A. BENNACK, JR. ) EX-25.F 20 x99885s3exv25wf.txt FORM T-1 STATEMENT OF ELIGIBLILTY AND QUALIFICATION Exhibit 25(f) - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 ------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ------------------------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________ ---------------------------------------- JPMORGAN CHASE BANK (Exact name of trustee as specified in its charter) NEW YORK 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification No.) 270 PARK AVENUE NEW YORK, NEW YORK 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) --------------------------------------------- CGMH CAPITAL III (Exact name of obligor as specified in its charter) DELAWARE 06-6452995 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) 388 GREENWICH STREET NEW YORK, NEW YORK 10013 (Address of principal executive offices) (Zip Code) - -------------------------------------------------------------------------------- CAPITAL SECURITIES (Title of the indenture securities) - -------------------------------------------------------------------------------- GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, State House, Albany, New York 12110. Board of Governors of the Federal Reserve System, Washington, D.C., 20551 Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. Federal Deposit Insurance Corporation, Washington, D.C., 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. -2- Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Restated Organization Certificate of the Trustee dated March 25, 1997 and the Certificate of Amendment dated October 22, 2001 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference.) 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank. 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference.) 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank. 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, JPMorgan Chase Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 7th day of October, 2004. JPMORGAN CHASE BANK By /s/ Natalie B. Pesce ------------------------------- Natalie B. Pesce, Assistant Vice President -3- Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF JPMorgan Chase Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business March 31, 2004, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS ASSETS IN MILLIONS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin .......................................... $ 19,589 Interest-bearing balances .................................. 35,104 Securities: Held to maturity securities ..................................... 156 Available for sale securities ................................... 64,028 Federal funds sold and securities purchased under agreements to resell Federal funds sold in domestic offices ..................... 30,180 Securities purchased under agreements to resell ............ 74,963 Loans and lease financing receivables: Loans and leases held for sale ............................. 19,061 Loans and leases, net of unearned income $163,825 Less: Allowance for loan and lease losses 2,771 Loans and leases, net of unearned income and allowance .................................................. 161,054 Trading Assets .................................................. 191,989 Premises and fixed assets (including capitalized leases) ........ 5,959 Other real estate owned ......................................... 118 Investments in unconsolidated subsidiaries and associated companies ....................................... 837 Customers' liability to this bank on acceptances outstanding ................................................ 203 Intangible assets Goodwill ................................................ 2,539 Other Intangible assets ................................. 4,521 Other assets .................................................... 38,391 TOTAL ASSETS .................................................... $648,692 ========
LIABILITIES Deposits In domestic offices ........................................ $210,211 Noninterest-bearing ................ $ 80,262 Interest-bearing ................... 129,949 In foreign offices, Edge and Agreement subsidiaries and IBF's ..................................... 120,623 Noninterest-bearing ................ $ 7,920 Interest-bearing ................... 112,703 Federal funds purchased and securities sold under agree- ments to repurchase: Federal funds purchased in domestic offices ................ 6,480 Securities sold under agreements to repurchase ............. 102,641 Trading liabilities ............................................. 114,412 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases) .................. 20,692 Bank's liability on acceptances executed and outstanding ........ 203 Subordinated notes and debentures ............................... 8,039 Other liabilities ............................................... 26,877 TOTAL LIABILITIES ............................................... 610,178 Minority Interest in consolidated subsidiaries .................. 346 EQUITY CAPITAL Perpetual preferred stock and related surplus ................... 0 Common stock .................................................... 1,785 Surplus (exclude all surplus related to preferred stock) ....... 16,318 Retained earnings ............................................... 20,049 Accumulated other comprehensive income .......................... 16 Other equity capital components ................................. 0 TOTAL EQUITY CAPITAL ............................................ 38,168 -------- TOTAL LIABILITIES, MINORITY INTEREST, AND EQUITY CAPITAL ........ $648,692 ========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct. WILLIAM B. HARRISON, JR. ) ELLEN V. FUTTER ) DIRECTORS FRANK A. BENNACK, JR. ) EX-25.G 21 x99885s3exv25wg.txt FORM T-1 STATEMENT OF ELIGIBLILTY AND QUALIFICATION Exhibit 25(g) - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 ------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ------------------------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________ ---------------------------------------- JPMORGAN CHASE BANK (Exact name of trustee as specified in its charter) NEW YORK 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification No.) 270 PARK AVENUE NEW YORK, NEW YORK 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) --------------------------------------------- CMGH CAPITAL IV (Exact name of obligor as specified in its charter) DELAWARE 06-6452996 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) 388 GREENWICH STREET NEW YORK, NEW YORK 10013 (Address of principal executive offices) (Zip Code) - -------------------------------------------------------------------------------- CAPITAL SECURITIES (Title of the indenture securities) - -------------------------------------------------------------------------------- GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, State House, Albany, New York 12110. Board of Governors of the Federal Reserve System, Washington, D.C., 20551 Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. Federal Deposit Insurance Corporation, Washington, D.C., 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. -2- Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Restated Organization Certificate of the Trustee dated March 25, 1997 and the Certificate of Amendment dated October 22, 2001 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference.) 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank. 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference.) 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank. 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, JPMorgan Chase Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 7th day of October, 2004. JPMORGAN CHASE BANK By /s/ Natalie B. Pesce ----------------------------------- Natalie B. Pesce, Assistant Vice President -3- Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF JPMorgan Chase Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business March 31, 2004, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS ASSETS IN MILLIONS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin .......................................... $ 19,589 Interest-bearing balances .................................. 35,104 Securities: Held to maturity securities ..................................... 156 Available for sale securities ................................... 64,028 Federal funds sold and securities purchased under agreements to resell Federal funds sold in domestic offices ..................... 30,180 Securities purchased under agreements to resell ............ 74,963 Loans and lease financing receivables: Loans and leases held for sale ............................. 19,061 Loans and leases, net of unearned income $163,825 Less: Allowance for loan and lease losses 2,771 Loans and leases, net of unearned income and allowance .................................................. 161,054 Trading Assets .................................................. 191,989 Premises and fixed assets (including capitalized leases) ........ 5,959 Other real estate owned ......................................... 118 Investments in unconsolidated subsidiaries and associated companies ....................................... 837 Customers' liability to this bank on acceptances outstanding ................................................ 203 Intangible assets Goodwill ................................................ 2,539 Other Intangible assets ................................. 4,521 Other assets .................................................... 38,391 TOTAL ASSETS .................................................... $648,692 ========
LIABILITIES Deposits In domestic offices ........................................ $210,211 Noninterest-bearing ................ $ 80,262 Interest-bearing ................... 129,949 In foreign offices, Edge and Agreement subsidiaries and IBF's ..................................... 120,623 Noninterest-bearing ................ $ 7,920 Interest-bearing ................... 112,703 Federal funds purchased and securities sold under agree- ments to repurchase: Federal funds purchased in domestic offices ................ 6,480 Securities sold under agreements to repurchase ............. 102,641 Trading liabilities ............................................. 114,412 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases) .................. 20,692 Bank's liability on acceptances executed and outstanding ........ 203 Subordinated notes and debentures ............................... 8,039 Other liabilities ............................................... 26,877 TOTAL LIABILITIES ............................................... 610,178 Minority Interest in consolidated subsidiaries .................. 346 EQUITY CAPITAL Perpetual preferred stock and related surplus ................... 0 Common stock .................................................... 1,785 Surplus (exclude all surplus related to preferred stock) ....... 16,318 Retained earnings ............................................... 20,049 Accumulated other comprehensive income .......................... 16 Other equity capital components ................................. 0 TOTAL EQUITY CAPITAL ............................................ 38,168 -------- TOTAL LIABILITIES, MINORITY INTEREST, AND EQUITY CAPITAL ........ $648,692 ========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct. WILLIAM B. HARRISON, JR. ) ELLEN V. FUTTER ) DIRECTORS FRANK A. BENNACK, JR. ) EX-25.H 22 x99885s3exv25wh.txt FORM T-1 STATEMENT OF ELIGIBLILTY AND QUALIFICATION Exhibit 25(h) - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 ------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ------------------------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ---------- ---------------------------------------- JPMORGAN CHASE BANK (Exact name of trustee as specified in its charter) NEW YORK 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification No.) 270 PARK AVENUE NEW YORK, NEW YORK 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) --------------------------------------------- CGMH CAPITAL II (Exact name of obligor as specified in its charter) DELAWARE 06-6452994 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) 388 GREENWICH STREET NEW YORK, NEW YORK 10013 (Address of principal executive offices) (Zip Code) -------------------------------------------------- GUARANTEE OF CAPITAL SECURITIES (Title of the indenture securities) - -------------------------------------------------------------------------------- GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a)Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, State House, Albany, New York 12110. Board of Governors of the Federal Reserve System, Washington, D.C., 20551 Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. Federal Deposit Insurance Corporation, Washington, D.C., 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. -2- Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Restated Organization Certificate of the Trustee dated March 25, 1997 and the Certificate of Amendment dated October 22, 2001 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference.) 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank. 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference.) 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank. 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, JPMorgan Chase Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 7th day of October, 2004. JPMORGAN CHASE BANK By /s/ Natalie B. Pesce ------------------------------------- Natalie B. Pesce, Assistant Vice President -3- Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF JPMorgan Chase Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business March 31, 2004, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS ASSETS IN MILLIONS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin .......................................... $ 19,589 Interest-bearing balances .................................. 35,104 Securities: Held to maturity securities ..................................... 156 Available for sale securities ................................... 64,028 Federal funds sold and securities purchased under agreements to resell Federal funds sold in domestic offices ..................... 30,180 Securities purchased under agreements to resell ............ 74,963 Loans and lease financing receivables: Loans and leases held for sale ............................. 19,061 Loans and leases, net of unearned income $163,825 Less: Allowance for loan and lease losses 2,771 Loans and leases, net of unearned income and allowance .................................................. 161,054 Trading Assets .................................................. 191,989 Premises and fixed assets (including capitalized leases) ........ 5,959 Other real estate owned ......................................... 118 Investments in unconsolidated subsidiaries and associated companies ....................................... 837 Customers' liability to this bank on acceptances outstanding ................................................ 203 Intangible assets Goodwill ................................................ 2,539 Other Intangible assets ................................. 4,521 Other assets .................................................... 38,391 TOTAL ASSETS .................................................... $648,692 ========
LIABILITIES Deposits In domestic offices ........................................ $210,211 Noninterest-bearing ................ $ 80,262 Interest-bearing ................... 129,949 In foreign offices, Edge and Agreement subsidiaries and IBF's ..................................... 120,623 Noninterest-bearing ................ $ 7,920 Interest-bearing ................... 112,703 Federal funds purchased and securities sold under agree- ments to repurchase: Federal funds purchased in domestic offices ................ 6,480 Securities sold under agreements to repurchase ............. 102,641 Trading liabilities ............................................. 114,412 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases) .................. 20,692 Bank's liability on acceptances executed and outstanding ........ 203 Subordinated notes and debentures ............................... 8,039 Other liabilities ............................................... 26,877 TOTAL LIABILITIES ............................................... 610,178 Minority Interest in consolidated subsidiaries .................. 346 EQUITY CAPITAL Perpetual preferred stock and related surplus ................... 0 Common stock .................................................... 1,785 Surplus (exclude all surplus related to preferred stock) ....... 16,318 Retained earnings ............................................... 20,049 Accumulated other comprehensive income .......................... 16 Other equity capital components ................................. 0 TOTAL EQUITY CAPITAL ............................................ 38,168 -------- TOTAL LIABILITIES, MINORITY INTEREST, AND EQUITY CAPITAL ........ $648,692 ========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct. WILLIAM B. HARRISON, JR. ) ELLEN V. FUTTER ) DIRECTORS FRANK A. BENNACK, JR. ) EX-25.I 23 x99885s3exv25wi.txt FORM T-1 STATEMENT OF ELIGIBLILTY AND QUALIFICATION Exhibit 25(i) - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 ------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ------------------------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ---------- ---------------------------------------- JPMORGAN CHASE BANK (Exact name of trustee as specified in its charter) NEW YORK 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification No.) 270 PARK AVENUE NEW YORK, NEW YORK 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) --------------------------------------------- CGMH CAPITAL III (Exact name of obligor as specified in its charter) DELAWARE 06-6452995 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) 388 GREENWICH STREET NEW YORK, NEW YORK 10013 (Address of principal executive offices) (Zip Code) -------------------------------------------------- GUARANTEE OF CAPITAL SECURITIES (Title of the indenture securities) - -------------------------------------------------------------------------------- GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a)Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, State House, Albany, New York 12110. Board of Governors of the Federal Reserve System, Washington, D.C., 20551 Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. Federal Deposit Insurance Corporation, Washington, D.C., 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. -2- Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Restated Organization Certificate of the Trustee dated March 25, 1997 and the Certificate of Amendment dated October 22, 2001 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference.) 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank. 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference.) 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank. 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, JPMorgan Chase Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 7th day of October, 2004. JPMORGAN CHASE BANK By /s/ Natalie B. Pesce ------------------------------------------ Natalie B. Pesce, Assistant Vice President -3- Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF JPMorgan Chase Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business March 31, 2004, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS ASSETS IN MILLIONS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin .......................................... $ 19,589 Interest-bearing balances .................................. 35,104 Securities: Held to maturity securities ..................................... 156 Available for sale securities ................................... 64,028 Federal funds sold and securities purchased under agreements to resell Federal funds sold in domestic offices ..................... 30,180 Securities purchased under agreements to resell ............ 74,963 Loans and lease financing receivables: Loans and leases held for sale ............................. 19,061 Loans and leases, net of unearned income $163,825 Less: Allowance for loan and lease losses 2,771 Loans and leases, net of unearned income and allowance .................................................. 161,054 Trading Assets .................................................. 191,989 Premises and fixed assets (including capitalized leases) ........ 5,959 Other real estate owned ......................................... 118 Investments in unconsolidated subsidiaries and associated companies ....................................... 837 Customers' liability to this bank on acceptances outstanding ................................................ 203 Intangible assets Goodwill ................................................ 2,539 Other Intangible assets ................................. 4,521 Other assets .................................................... 38,391 TOTAL ASSETS .................................................... $648,692 ========
LIABILITIES Deposits In domestic offices ........................................ $210,211 Noninterest-bearing ................ $ 80,262 Interest-bearing ................... 129,949 In foreign offices, Edge and Agreement subsidiaries and IBF's ..................................... 120,623 Noninterest-bearing ................ $ 7,920 Interest-bearing ................... 112,703 Federal funds purchased and securities sold under agree- ments to repurchase: Federal funds purchased in domestic offices ................ 6,480 Securities sold under agreements to repurchase ............. 102,641 Trading liabilities ............................................. 114,412 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases) .................. 20,692 Bank's liability on acceptances executed and outstanding ........ 203 Subordinated notes and debentures ............................... 8,039 Other liabilities ............................................... 26,877 TOTAL LIABILITIES ............................................... 610,178 Minority Interest in consolidated subsidiaries .................. 346 EQUITY CAPITAL Perpetual preferred stock and related surplus ................... 0 Common stock .................................................... 1,785 Surplus (exclude all surplus related to preferred stock) ....... 16,318 Retained earnings ............................................... 20,049 Accumulated other comprehensive income .......................... 16 Other equity capital components ................................. 0 TOTAL EQUITY CAPITAL ............................................ 38,168 -------- TOTAL LIABILITIES, MINORITY INTEREST, AND EQUITY CAPITAL ........ $648,692 ========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct. WILLIAM B. HARRISON, JR. ) ELLEN V. FUTTER ) DIRECTORS FRANK A. BENNACK, JR. ) EX-25.J 24 x99885s3exv25wj.txt FORM T-1 STATEMENT OF ELIGIBLILTY AND QUALIFICATION Exhibit 25(j) - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 ------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ------------------------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ---------- ---------------------------------------- JPMORGAN CHASE BANK (Exact name of trustee as specified in its charter) NEW YORK 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification No.) 270 PARK AVENUE NEW YORK, NEW YORK 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) --------------------------------------------- CMGH CAPITAL IV (Exact name of obligor as specified in its charter) DELAWARE 06-6452996 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) 388 GREENWICH STREET NEW YORK, NEW YORK 10013 (Address of principal executive offices) (Zip Code) -------------------------------------------------- GUARANTEE OF CAPITAL SECURITIES (Title of the indenture securities) - -------------------------------------------------------------------------------- GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a)Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, State House, Albany, New York 12110. Board of Governors of the Federal Reserve System, Washington, D.C., 20551 Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. Federal Deposit Insurance Corporation, Washington, D.C., 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. -2- Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Restated Organization Certificate of the Trustee dated March 25, 1997 and the Certificate of Amendment dated October 22, 2001 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference.) 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank. 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference.) 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank. 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, JPMorgan Chase Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 7th day of October, 2004. JPMORGAN CHASE BANK By /s/ Natalie B. Pesce ------------------------------------------ Natalie B. Pesce, Assistant Vice President -3- Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF JPMorgan Chase Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business March 31, 2004, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS ASSETS IN MILLIONS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin .......................................... $ 19,589 Interest-bearing balances .................................. 35,104 Securities: Held to maturity securities ..................................... 156 Available for sale securities ................................... 64,028 Federal funds sold and securities purchased under agreements to resell Federal funds sold in domestic offices ..................... 30,180 Securities purchased under agreements to resell ............ 74,963 Loans and lease financing receivables: Loans and leases held for sale ............................. 19,061 Loans and leases, net of unearned income $163,825 Less: Allowance for loan and lease losses 2,771 Loans and leases, net of unearned income and allowance .................................................. 161,054 Trading Assets .................................................. 191,989 Premises and fixed assets (including capitalized leases) ........ 5,959 Other real estate owned ......................................... 118 Investments in unconsolidated subsidiaries and associated companies ....................................... 837 Customers' liability to this bank on acceptances outstanding ................................................ 203 Intangible assets Goodwill ................................................ 2,539 Other Intangible assets ................................. 4,521 Other assets .................................................... 38,391 TOTAL ASSETS .................................................... $648,692 ========
LIABILITIES Deposits In domestic offices ........................................ $210,211 Noninterest-bearing ................ $ 80,262 Interest-bearing ................... 129,949 In foreign offices, Edge and Agreement subsidiaries and IBF's ..................................... 120,623 Noninterest-bearing ................ $ 7,920 Interest-bearing ................... 112,703 Federal funds purchased and securities sold under agree- ments to repurchase: Federal funds purchased in domestic offices ................ 6,480 Securities sold under agreements to repurchase ............. 102,641 Trading liabilities ............................................. 114,412 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases) .................. 20,692 Bank's liability on acceptances executed and outstanding ........ 203 Subordinated notes and debentures ............................... 8,039 Other liabilities ............................................... 26,877 TOTAL LIABILITIES ............................................... 610,178 Minority Interest in consolidated subsidiaries .................. 346 EQUITY CAPITAL Perpetual preferred stock and related surplus ................... 0 Common stock .................................................... 1,785 Surplus (exclude all surplus related to preferred stock) ....... 16,318 Retained earnings ............................................... 20,049 Accumulated other comprehensive income .......................... 16 Other equity capital components ................................. 0 TOTAL EQUITY CAPITAL ............................................ 38,168 -------- TOTAL LIABILITIES, MINORITY INTEREST, AND EQUITY CAPITAL ........ $648,692 ========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct. WILLIAM B. HARRISON, JR. ) ELLEN V. FUTTER ) DIRECTORS FRANK A. BENNACK, JR. ) -----END PRIVACY-ENHANCED MESSAGE-----