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C » Topics » Change in Control

This excerpt taken from the C DEF 14A filed Mar 20, 2009.
Change in Control
Equity awards are made in accordance with the terms of Citi’s equity plans. Citi’s equity plans provide that in the event of a change in control of Citigroup Inc., as defined in the equity plans, the committee may, in its discretion, accelerate, purchase, adjust, modify or terminate all awards made under the equity plans, including cap and ltip awards. Accordingly, the chart above shows the maximum value an executive may receive in the event of a change in control; it is possible that an executive could receive a lesser amount. Under Citi’s equity plans, a change in control is generally defined to mean the following events:
 
•  any person (as defined under applicable securities laws) or persons acting together becomes a beneficial owner of securities of Citi representing 25 percent or more of the combined voting power of Citi’s then outstanding securities;
 
•  any transaction that occurs with respect to Citi that is subject to the prior notice requirements of the Change in Bank Control Act of 1978;
 
•  any transaction that occurs with respect to Citi that will require a party to the transaction to obtain prior approval of the Federal Reserve Board under Regulation Y;
 
•  the adoption by Citi stockholders of a plan or proposal for the dissolution or liquidation of Citi;
 
•  the incumbent members of Citi’s board of directors ceasing to constitute a majority of the board of directors as a result of either an actual or threatened election contest or other actual or threatened solicitation of proxies or consents by or on behalf of any person other than the board;
 
•  all or substantially all of the assets of Citi are sold, transferred or distributed; or
 
•  there occurs a transaction, such as reorganization, merger, consolidation or other corporate transaction involving Citi, in which the stockholders of Citi immediately prior to such transaction do not own more than 50 percent of the combined voting power of Citi or other corporation resulting from such transaction in substantially the same proportions as they held immediately prior to such transaction.
 
The committee may also, in its discretion, cause awards made under the equity plans to be assumed by the surviving corporation in a corporate transaction.


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With respect to equity awards subject to Section 409A of the irc, Citi’s equity plans provide that the effect of a change in control and what constitutes a change in control will be specified in an executive’s award agreement. The award agreements generally define a change in control as the acquisition of an executive’s employer by another entity in a transaction that constitutes a change in control under Section 409A of the irc and provide that, in the event of a change in control, the executive’s award will either be 100 percent vested or that the executive will receive the same treatment as an executive whose employment is involuntarily terminated other than for gross misconduct. The change in control provision in the award agreements also applies to awards that are not subject to Section 409A of the irc.
 
The committee has determined that the consummation of the proposed issuance of Citi’s common stock in exchange for existing preferred securities will not result in a “change in control” under outstanding equity incentive and deferred compensation awards, in accordance with the terms of those awards.
 
These excerpts taken from the C 10-K filed Feb 27, 2009.

13. Change of Control

 

(a) Notwithstanding any provisions of this Plan to the contrary, the Committee may, in its sole discretion, at the time an Award is made hereunder or at any time prior to, coincident with or after the time of a Change of Control:

 

  (i) provide for the acceleration of any time periods relating to the vesting, exercise, payment or distribution of such Awards so that such Awards may be vested, exercised, paid or distributed in full on or before a date fixed by the Committee;

 

  (ii) provide for the purchase of such Awards, upon the Participant’s request, for an amount of cash equal to the amount that could have been obtained upon the exercise, payment or distribution of such rights had such Awards been currently exercisable or payable;

 

  (iii) provide for the termination of any then outstanding Awards or make any other adjustment to the Awards then outstanding as the Committee deems necessary or appropriate to reflect such transaction or change; or

 

  (iv) cause the Awards then outstanding to be assumed, or new rights substituted therefore, by the surviving corporation in such change.

 

15

(b) A “Change of Control” shall be deemed to occur if and when:

 

  (i) any person, including a “person” as such term is used in Section 14(d)(2) of the 1934 Act (a “Person”), is or becomes a beneficial owner (as such term is defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of securities of the Company representing 25 percent (25%) or more of the combined voting power of the Company’s then outstanding securities;

 

  (ii) any transaction occurs with respect to the Company that is subject to the prior notice requirements of the Change in Bank Control Act of 1978;

 

  (iii) any transaction occurs with respect to the Company that will require a “company” as defined in the Bank Holding Company Act of 1956, as amended, to obtain prior approval of the Federal Reserve Board under Regulation Y;

 

  (iv) any plan or proposal for the dissolution or liquidation of the Company is adopted by the stockholders of the Company;

 

  (v) individuals who, as of April 30, 1999, constituted the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to April 30, 1999 whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding for this purpose any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the 1934 Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;

 

  (vi) all or substantially all of the assets of the Company are sold, transferred or distributed; or

 

  (vii) there occurs a reorganization, merger, consolidation or other corporate transaction involving the Company (a “Transaction”), in each case, with respect to which the stockholders of the Company immediately prior to such Transaction do not, immediately after the Transaction, own more than 50 percent (50%) of the combined voting power of the Company or other corporation resulting from such Transaction in substantially the same respective proportions as such stockholders’ ownership of the voting power of the Company immediately before such Transaction.

 

16

Notwithstanding the foregoing, with respect to Awards subject to Section 409A of the Code, the effect of a Change in Control and what constitutes a Change in Control shall be set forth in the underlying Award programs and/or Award Agreements.

13. Change of Control

 

(a) Notwithstanding any provisions of this Plan to the contrary, the Committee may, in its sole discretion, at the time an Award is made hereunder or at any time prior to, coincident with or after the time of a Change of Control:

 

  (i) provide for the acceleration of any time periods relating to the vesting, exercise, payment or distribution of such Awards so that such Awards may be vested, exercised, paid or distributed in full on or before a date fixed by the Committee;

 

  (ii) provide for the purchase of such Awards, upon the Participant’s request, for an amount of cash equal to the amount that could have been obtained upon the exercise, payment or distribution of such rights had such Awards been currently exercisable or payable;

 

  (iii) provide for the termination of any then outstanding Awards or make any other adjustment to the Awards then outstanding as the Committee deems necessary or appropriate to reflect such transaction or change; or

 

  (iv) cause the Awards then outstanding to be assumed, or new rights substituted therefore, by the surviving corporation in such change.

 

15

(b) A “Change of Control” shall be deemed to occur if and when:

 

  (i) any person, including a “person” as such term is used in Section 14(d)(2) of the 1934 Act (a “Person”), is or becomes a beneficial owner (as such term is defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of securities of the Company representing 25 percent (25%) or more of the combined voting power of the Company’s then outstanding securities;

 

  (ii) any transaction occurs with respect to the Company that is subject to the prior notice requirements of the Change in Bank Control Act of 1978;

 

  (iii) any transaction occurs with respect to the Company that will require a “company” as defined in the Bank Holding Company Act of 1956, as amended, to obtain prior approval of the Federal Reserve Board under Regulation Y;

 

  (iv) any plan or proposal for the dissolution or liquidation of the Company is adopted by the stockholders of the Company;

 

  (v) individuals who, as of April 30, 1999, constituted the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to April 30, 1999 whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding for this purpose any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the 1934 Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;

 

  (vi) all or substantially all of the assets of the Company are sold, transferred or distributed; or

 

  (vii) there occurs a reorganization, merger, consolidation or other corporate transaction involving the Company (a “Transaction”), in each case, with respect to which the stockholders of the Company immediately prior to such Transaction do not, immediately after the Transaction, own more than 50 percent (50%) of the combined voting power of the Company or other corporation resulting from such Transaction in substantially the same respective proportions as such stockholders’ ownership of the voting power of the Company immediately before such Transaction.

 

16

Notwithstanding the foregoing, with respect to Awards subject to Section 409A of the Code, the effect of a Change in Control and what constitutes a Change in Control shall be set forth in the underlying Award programs and/or Award Agreements.

This excerpt taken from the C DEF 14A filed Mar 13, 2008.

Change in Control

Equity awards are made in accordance with the terms of Citi’s equity plans. Citi’s equity plans provide that in the event of a change in control of Citigroup Inc., as defined in the equity plans, the committee may, in its discretion, accelerate, purchase, adjust, modify or terminate all awards made under the equity plans, including, but not limited to, CAP and LTIP awards. Under Citi’s equity plans, a change in control is generally defined to mean the following events:

 

•  

any person (as defined under applicable securities laws) or persons acting together becomes a beneficial owner of securities of Citi representing 25 percent or more of the combined voting power of Citi’s then outstanding securities;

 

•  

any transaction that occurs with respect to Citi that is subject to the prior notice requirements of the Change in Bank Control Act of 1978;

 

•  

any transaction that occurs with respect to Citi that will require a party to the transaction to obtain prior approval of the Federal Reserve Board under Regulation Y;

 

•  

the adoption by Citi stockholders of a plan or proposal for the dissolution or liquidation of Citi;

 

•  

the incumbent members of Citi’s board of directors ceasing to constitute a majority of the board of directors as a result of either an actual or threatened election contest or other actual or threatened solicitation of proxies or consents by or on behalf of any person other than the board;

 

•  

all or substantially all of the assets of Citi are sold, transferred or distributed; or

 

•  

there occurs a transaction, such as reorganization, merger, consolidation or other corporate transaction involving Citi, in which the stockholders of Citi immediately prior to such transaction do not own more than 50 percent of the combined voting power of Citi or other corporation resulting from such transaction in substantially the same proportions as they held immediately prior to such transaction.

 

The committee may also, in its discretion, cause awards made under the equity plans to be assumed by the surviving corporation in a corporate transaction. Accordingly, it is possible that all of the nonvested stock options and stock awards shown in the Outstanding Equity Awards at Fiscal Year-End Table could vest in connection with a change in control of Citi.

 

Deferred Cash Retention Awards.    As described in the Compensation Discussion and Analysis, an executive holding a deferred cash retention award will receive such award if his or her employment is terminated due to death or disability, there is an involuntary termination other than for gross misconduct, or if there is a change in control of Citi. In all other circumstances, such as voluntary resignation, retirement, or termination for gross misconduct, the award is forfeited. As the awards were not outstanding as of December 31, 2007, they cannot be valued as of that date.

 

This excerpt taken from the C DEF 14A filed Mar 13, 2007.

Change in Control

Equity awards are made in accordance with the terms of Citigroup’s stockholder-approved equity plans. Citigroup’s equity plans provide that in the event of a change in control of Citigroup, as defined in the equity plans, the committee, may, in its discretion, accelerate, purchase, adjust, modify or terminate all awards made under the equity plans, including, but not limited to, CAP awards.

The committee may also, in its discretion, cause awards made under the equity plans to be assumed by the surviving corporation in a corporate transaction. Accordingly, it is possible that all of the nonvested stock options and stock awards shown in the Outstanding Equity Awards at Fiscal Year-End Table could vest in connection with a change in control of Citigroup.

 

This excerpt taken from the C DEF 14A filed Mar 15, 2005.

13.  Change of Control

 

  (a)   Notwithstanding any provision of this Plan to the contrary, the Committee may, in its sole discretion, at the time an Award is made hereunder or at any time prior to, coincident with or after the time of a Change of Control:

 

  (i)   provide for the acceleration of any time periods relating to the vesting, exercise, payment or distribution of such Awards so that such Awards may be vested, exercised, paid or distributed in full on or before a date fixed by the Committee;

 

  (ii)   provide for the purchase of such Awards, upon the Participant’s request, for an amount of cash equal to the amount that could have been obtained upon the exercise, payment or distribution of such rights had such Awards been currently exercisable or payable;

 

  (iii)   provide for the termination of any then outstanding Awards or make any other adjustment to the Awards then outstanding as the Committee deems necessary or appropriate to reflect such transaction or change; or

 

  (iv)   cause the Awards then outstanding to be assumed, or new rights substituted therefore, by the surviving corporation in such change.

 

  (b)   A “Change of Control” shall be deemed to occur if and when:

 

  (i)   any person, including a “person” as such term is used in Section 14(d)(2) of the 1934 Act (a “Person”), is or becomes a beneficial owner (as such term is defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing 25 percent (25%) or more of the combined voting power of the Company’s then outstanding securities;

 

  (ii)   any transaction occurs with respect to the Company that is subject to the prior notice requirements of the Change in Bank Control Act of 1978;

 

  (iii)   any transaction occurs with respect to the Company that will require a “company” as defined in the Bank Holding Company Act of 1956, as amended, to obtain prior approval of the Federal Reserve Board under Regulation Y;

 

  (iv)   any plan or proposal for the dissolution or liquidation of the Company is adopted by the stockholders of the Company;

 

  (v)   individuals who, as of April 30, 1999, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to April 30, 1999 whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;

 

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Table of Contents
  (vi)   all or substantially all of the assets of the Company are sold, transferred or distributed; or

 

  (vii)   there occurs a reorganization, merger, consolidation or other corporate transaction involving the Company (a “Transaction”), in each case, with respect to which the stockholders of the Company immediately prior to such Transaction do not, immediately after the Transaction, own more than 50 percent (50%) of the combined voting power of the Company or other corporation resulting from such Transaction in substantially the same respective proportions as such stockholders’ ownership of the voting power of the Company immediately before such Transaction.

 

Should any event constitute a Change of Control for purposes of the Plan, but not constitute a change of control within the meaning of Section 409A of the Code, if necessary to avoid adverse tax consequences to any Participant, no payment or distribution shall be made to any affected Participant by reason of such Change of Control without the express written consent of the affected Participant.

 

EXCERPTS ON THIS PAGE:

DEF 14A
Mar 20, 2009
10-K (2 sections)
Feb 27, 2009
DEF 14A
Mar 13, 2008
DEF 14A
Mar 13, 2007
DEF 14A
Mar 15, 2005

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