This excerpt taken from the C 10-Q filed Nov 5, 2007.
15. Section 409A Compliance.
(a) Participant understands that as a result of Section 409A to the Code, if Participant is a U.S. taxpayer he or she could be subject to adverse tax consequences if the Award, the Program and/or the Plan are not administered in accordance with the requirements of Section 409A. Citigroup may modify the provisions of the Award, the Program and/or the Plan, as necessary, to conform them to the requirements of Section 409A or other changes in applicable law. To the extent Citigroup amends the Award, the Program or the Plan, Participant will receive a supplement to the Prospectus describing any such changes.
(b) Notwithstanding any provision of this Agreement to the contrary, (i) Citigroup may modify the provisions of the Award, the Program and/or the Plan, as necessary, to conform them to the requirements of Section 409A or other changes in applicable law and (ii) any distribution of shares subject to a deferred stock award otherwise provided by the terms of this Agreement to occur upon any event that would constitute a "separation from service" (within the meaning of Section 409A of the Code) to a Participant who is a "specified employee" (within the meaning of Treas. Reg. § 1.409A-1(i)(1)) at the time of such Participant's "separation from service,"
shall not be made until the date which is six months from such "separation from service," or, if earlier, the date of Participant's death and during such six-month deferral period, Participant shall not be entitled to interest, dividends, dividend equivalents, or any compensation for any loss in market value or otherwise which occurs with respect to the Award during such deferral period.
(c) BY ACCEPTING THIS AWARD, PARTICIPANT HEREBY CONSENTS TO THE AMENDMENT OR MODIFICATION OF ANY OUTSTANDING EQUITY AWARD(S) HERETOFORE GRANTED TO OR ENTERED INTO WITH PARTICIPANT, IN LIKE MANNER AND PURPOSE AS PROVIDED BY SECTION 15(b) OF THIS AGREEMENT, TO THE EXTENT ANY SUCH AWARDS MAY VIOLATE SECTION 409A OF THE CODE; PROVIDED, HOWEVER, THAT (i) NO SUCH AMENDMENT OR MODIFICATION SHALL BE MADE IF IT WOULD VIOLATE THE TERMS AND CONDITIONS OF PARTICIPANT'S OFFER LETTER OR EMPLOYMENT AGREEMENT, AND (ii) UNLESS THE COMMITTEE DETERMINES OTHERWISE, ANY AMENDMENT OR MODIFICATION TO OUTSTANDING AWARD(S) PURSUANT TO THIS SECTION 15(c) SHALL MAINTAIN, TO THE MAXIMUM EXTENT PRACTICABLE, THE ORIGINAL INTENT OF THE APPLICABLE PROVISION WITHOUT CONTRAVENING THE PROVISIONS OF SECTION 409A OF THE CODE. THE AMENDMENT OR MODIFICATION OF ANY AWARD(S) PURSUANT TO THIS PROVISION SHALL BE AT THE COMPANY'S SOLE DISCRETION AND THE COMPANY SHALL NOT BE OBLIGATED TO AMEND OR MODIFY ANY SUCH AWARD(S) OR THIS AWARD, THE PROGRAM OR THE PLAN, NOR SHALL THE COMPANY BE LIABLE FOR ANY ADVERSE TAX OR OTHER CONSEQUENCES TO PARTICIPANT RESULTING FROM SUCH AMENDMENTS OR MODIFICATIONS OR THE COMPANY'S FAILURE TO MAKE ANY SUCH AMENDMENTS OR MODIFICATIONS FOR PURPOSES OF COMPLYING WITH SECTION 409A OF THE CODE OR FOR ANY OTHER PURPOSE. TO THE EXTENT CITIGROUP AMENDS OR MODIFIES ANY OUTSTANDING AWARD(S) OR THIS AWARD PURSUANT TO SECTION 15 OF THIS AGREEMENT, PARTICIPANT SHALL RECEIVE A SUPPLEMENT TO THE PROSPECTUS DESCRIBING ANY SUCH CHANGES AND, UNLESS THE COMMITTEE DETERMINES OTHERWISE, THE CHANGES DESCRIBED IN THE SUPPLEMENT SHALL BE DEEMED TO AMEND THE TERMS AND CONDITIONS OF THE APPLICABLE AWARD AGREEMENTS.
16. Arbitration; Conflict; Governing Law. Any disputes related to the Award shall be resolved by arbitration in accordance with the Company's arbitration policies. In the absence of an effective arbitration policy, Participant understands and agrees that any dispute related to an Award shall be submitted to arbitration in accordance with the rules of the American Arbitration Association, if so elected by the Company in its sole discretion. In the event of a conflict between the Prospectus and this Agreement [IF APPLICABLE: the Letter Agreement and this Agreement], this Agreement [IF APPLICABLE: the Letter Agreement] shall control. In the event of a conflict between this Agreement and the Plan, the Plan shall control. This Agreement shall be governed by the laws of the State of New York (regardless of conflict of laws principles) as to all matters, including, but not limited to, the construction, application, validity and administration of the Program.
This excerpt taken from the C 10-Q filed Aug 3, 2007.
12. Section 162(m) Compliance. (Under current law, this Section 12 would affect only proxy officers for the Companys fiscal year 2010 (the Companys named executive officers for purposes of the Companys annual proxy statement filed in early 2011), other than the CFO.)
(a) The Award is intended to comply with section 409A of the Code and shall be interpreted accordingly. If, prior to payment, the Company anticipates that the payment of the Award would be non-deductible, in whole or in part, by reason of section 162(m) of the Code, the payment of the Award, and all other payments scheduled to be made to Participant that could be delayed by reason of Treas. Reg. 1.409A-2(b)(7)(i) (e.g., any 2010 vesting of CAP deferred shares), shall be deferred until the Companys first taxable year in which the Company reasonably anticipates, or should reasonably anticipate, that if the payment is made during such year, the deduction of such payment will not be barred, in whole or in part, by application of section 162(m) of the Code. During such deferral period and any additional deferral period pursuant to Section 12(b):
(i) Participant will not be entitled to interest or any compensation for any loss in market value or otherwise which occurs during such period; and
(ii) Participant shall be entitled to a dollar amount equal to the dollar amount of any cash dividends that would have been paid to Participant on his or her vested Award shares but for such deferral period. Any dividend equivalents that accrue during such deferral period shall be invested in a notional investment option to be determined by the Committee (or its delegates) in its sole discretion. An account shall be maintained on the books and records of the Company (an Account) to record the dividend equivalents earned by Participant during such deferral period, and the subsequent notional investment performance thereof. Participants Account shall be periodically adjusted to reflect the equivalent of the earnings, gains and losses that the Account would have experienced had the Account actually been invested in the investment option designated by the Committee (or its delegates). Participant shall be entitled to a cash payment equal to the balance of his or her Account upon the expiration of the deferral period.
(b) If payments cease to be non-deductible as described in Section 12(a) on Participants Termination Date and Participant is a specified employee (within the meaning of Treas. Reg. 1.409A-1(i)(1)) as of such Termination Date, any payment to Participant of all or any portion of his or her Award (including any amount owed to Participant pursuant to Section 12(a)(ii)) will not be made until the date which is six months from Participants Termination Date or, if earlier, the date of Participants death.