Citigroup Inc.

Stock Award ProgramsCitigroup issues (and has issued) shares of its common stock in the form ofrestricted stock awards, deferred stock awards, and stock payments pursuantto the 2009 Stock Incentive Plan (and predecessor plans) to its officers,employees and non-employee directors.Citigroup’s primary stock award program is the Capital AccumulationProgram (CAP). Generally, CAP awards of restricted or deferred stockconstitute a percentage of annual incentive compensation and vest ratablyover four-year periods, beginning on the first anniversary of the award date.Continuous employment within Citigroup is generally required tovest in CAP and other stock award programs. Typically, exceptions allowvesting for participants whose employment is terminated involuntarilyduring the vesting period for a reason other than “gross misconduct,” whomeet specified age and service requirements before leaving employment(retirement-eligible participants), or who die or become disabled during thevesting period. Post-employment vesting by retirement-eligible participants isgenerally conditioned upon their refraining from competing with Citigroupduring the remaining vesting period.From 2003 to 2007, Citigroup granted annual stock awards under itsCitigroup Ownership Program (COP) to a broad base of employees who werenot eligible for CAP. The COP awards of restricted or deferred stock vest afterthree years, but otherwise have terms similar to CAP.Non-employee directors receive part of their compensation in the form ofdeferred stock awards that vest in two years, and may elect to receive part oftheir retainer in the form of a stock payment, which they may elect to defer.From time to time, restricted or deferred stock awards and/or stock optiongrants are made to induce talented employees to join Citigroup or as specialretention awards to key employees. Vesting periods vary, but are generally twoto four years. Generally, recipients must remain employed through the vestingdates to vest in the awards, except in cases of death, disability, or involuntarytermination other than for “gross misconduct.” Unlike CAP, these awards do notusually provide for post-employment vesting by retirement-eligible participants.For all stock awards, during the applicable vesting period, the sharesawarded are not issued to participants (in the case of a deferred stock award)or cannot be sold or transferred by the participants (in the case of a restrictedstock award), until after the vesting conditions have been satisfied. Recipientsof deferred stock awards do not have any stockholder rights until sharesare delivered to them, but they generally are entitled to receive dividendequivalentpayments during the vesting period. Recipients of restrictedstock awards are entitled to a limited voting right and to receive dividendor dividend-equivalent payments during the vesting period. Once a stockaward vests, the shares become freely transferable (but certain executives arerequired to hold the shares subject to a stock ownership commitment).CAP awards made in January 2011 to “identified staff” in the EuropeanUnion have several features that differ from the generally applicable CAPprovisions described above. “Identified staff” are those Citigroup employeeswhose compensation is subject to various banking regulations on soundincentive compensation policies in the European Union. These CAPawards vest in full after three years of service, are subject to a six-monthsale restriction after vesting, and are subject to cancellation if there is amaterial downturn in Citigroup’s or the employee’s business unit’s financialperformance or a material failure of risk management (the EU clawback).A portion of the immediately vested cash incentive compensation awardedin January 2011 to selected highly compensated employees was delivered inimmediately-vested stock payments. In the European Union, this stock wassubject to a six-month sale restriction.Annual incentive awards made in January 2011, January 2010, andDecember 2009 to certain executive officers and highly compensatedemployees were made in the form of long-term restricted stock (LTRS), withterms prescribed by the Emergency Economic Stabilization Act of 2008, asamended (EESA). The senior executive officers and next 20 most highlycompensated employees for 2010 (the 2010 Top 25), and the senior executiveofficers and the next 95 most highly compensated employees for 2009 (the2009 Top 100), were eligible for LTRS awards. LTRS awards vest in full afterthree years of service and there are no provisions for early vesting of LTRS inthe event of retirement, involuntary termination of employment or change incontrol, but early vesting will occur upon death or disability.Annual incentive awards made in January 2011 to executive officershave a performance-based vesting condition. If Citigroup has pretax netlosses during any of the years of the deferral period, the Personnel andCompensation Committee of Citigroup’s Board of Directors may exercise itsdiscretion to eliminate or reduce the number of shares that vest for that year.This performance-based vesting condition applies to CAP and LTRS awardsmade in January 2011 to executive officers.All CAP and LTRS awards made in January 2011 provide for a clawbackthat applies in the case of employee misconduct or where the awardswere based on earnings that were misstated or on materially inaccurateperformance metric criteria. For EU participants who are “identified staff,”this clawback is in addition to the EU clawback described above.185