Citigroup (C)

Optional Conversion Right

Each share of the Convertible Preferred Stock may be converted at any time, at the option of the holder, into            shares of Citigroup common stock plus cash in lieu of fractional shares, subject to anti-dilution adjustments (such rate or adjusted rate, the “conversion rate”).  The initial conversion rate reflects an approximate initial conversion price of $                     per share of Citigroup common stock for each share of Convertible Preferred Stock (or each 1,000 depositary shares).  Depositary shares may be converted at the option of the holders thereof only in lots of 1,000 depositary shares or integral multiples thereof.  If the Convertible Preferred Stock has been called for redemption, the holder will be entitled to convert the Convertible Preferred Stock from the date of notice of the redemption until the close of business on the second Business Day immediately preceding the date of redemption.

The conversion rate and the corresponding conversion price in effect at any given time are referred to as the “applicable conversion rate” and the “applicable conversion price,” respectively, and will be subject to adjustment as described below.  The applicable conversion price at any given time will be computed by dividing $50,000 by the applicable conversion rate at such time.

If the conversion date (as defined below under “— Conversion Procedures”) is prior to the record date for any declared dividend for the dividend period in which you elect to convert, you will not receive any declared dividends for that dividend period.  If the conversion date is after the record date for any declared dividend and prior to the dividend payment date, you will receive that dividend on the relevant dividend payment date if you were the holder of record on the record date for that dividend; however, whether or not you were the holder of record on the record date, you must pay to the conversion agent when you convert your shares of Convertible Preferred Stock an amount in cash equal to the full dividend actually paid on the dividend payment date for the then-current dividend period on the shares being converted, unless your shares of Convertible Preferred Stock are being converted following receipt of a notice of redemption at Citigroup’s option as described below under “— Optional Redemption,” a notice of conversion at Citigroup’s option as described below under “— Conversion at the Option of Citigroup,” or a notice of a make-whole acquisition as described below under “— Conversion Upon Certain Acquisitions.”

Citigroup will pay any and all stock transfer, documentary, stamp and similar taxes that may be payable in respect of any issuance or delivery of shares of Convertible Preferred Stock or shares of Citigroup common stock or other securities issued on account of Convertible Preferred Stock or certificates representing such shares or securities, or depositary shares representing an interest therein.  Citigroup will not, however, be required to pay any such tax that may be payable in respect of any transfer involved in the issuance or delivery of shares of Convertible Preferred Stock, depositary shares, shares of Citigroup common stock or other securities in a

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