Citigroup (C)

“Please vote FOR this proposal.”

“Please vote FOR this proposal.”

“Please vote FOR this proposal.”

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MANAGEMENT COMMENT

Citigroup believes it is important to ensure a proper balance between the responsibilities and authority of management and the board. The decision whether to separate the roles of Chairman and CEO or to have an independent or executive Chairman should be based on what is in the best interests of Citigroup at a given point in time, taking into account, among other things, the composition of the board, the effectiveness of the lead director, the existence of good governance practices, and the CEO’s working relationship with the board, and the issues facing the Company. The proposal would deny the board the flexibility to consider these and other relevant factors and determine what structure is in the best interests of Citigroup.

A critical point in this connection was the appointment of a lead director by Citigroup’s board in April 2004. Our lead director has the following formalized duties and powers which are set out in our by-laws: (1) presides at all meetings of the board at which the Chairman is not present, including executive sessions; (2) serves as liaison between the Chairman and independent directors; (3) approves information sent to the board; (4) approves meeting agendas for the board; (5) approves meeting schedules to assure that there is sufficient time for discussion of all agenda items; (6) has the authority to call meetings of the full board and executive sessions; and (7) if requested by major shareholders, ensures that he or she is available for consultation and direct communication.

In addition, Citigroup has adopted a series of corporate governance initiatives relevant to the points made in support of this proposal. Citigroup’s non-management directors meet in executive session at every board meeting. Only outside members of the board participate in these executive sessions. More than seventy-six percent of Citigroup’s board members are “independent” under NYSE guidelines, and, following Mr. Weill’s scheduled retirement at the 2006 annual meeting, eighty-one percent of Citigroup’s board members will be independent. The audit and risk management committee, the personnel and compensation committee, the nomination and governance committee, and the public affairs committee are each comprised solely of independent directors and generally meet in executive session at each committee meeting. Citigroup has also eliminated interlocking directorships between Citigroup executive officers and companies affiliated with Citigroup directors. The board conducts annual self-evaluations of its effectiveness and that of each of its committees. In response to ideas presented by shareholders, Citigroup has recently adopted a policy to permit confidential voting by shareholders, has proposed amendments to its charter in response to a shareholder proposal that received greater than a majority vote at the 2005 annual meeting, has adopted a policy providing for majority voting in director elections and has posted its political giving policy on its website.

“Please vote FOR this proposal.”

MANAGEMENT COMMENT

Citigroup separated the roles of Chairman and Chief Executive Officer on October 1, 2003. On that date Charles Prince became Chief Executive Officer. Sanford Weill gave up his responsibilities as CEO and retained the role of Chairman of the Board. In April of 2004, Citigroup appointed the Chair of the nomination and governance committee as lead director with formalized duties and powers specified in the by-laws.

In his role as CEO for the past 17 months, Mr. Prince has been and continues to be responsible for the overall supervision, management and direction of the business and policies of Citigroup. Mr. Weill, as Chairman of the Board, focuses on board policies, broad strategic issues for Citigroup, and senior client relations. Mr. Weill presides at meetings of the full board of directors. Our lead director has the following formalized duties and

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powers: (1) presides at all meetings of the board at which the Chairman is not present, including executive sessions; (2) serves as liaison between the Chairman and independent directors; (3) approves information sent to the board; (4) approves meeting agendas for the board; (5) approves meeting schedules to assure that there is sufficient time for discussion of all agenda items; (6) has the authority to call meetings of the full board and executive sessions; and (7) if requested by major shareholders, ensures that he or she is available for consultation and direct communication. We believe having a Chairman who is fully familiar with the businesses and operations of Citigroup is a strength in our management structure. At the same time, the delineation of responsibilities of Citigroup’s CEO from those of our Chairman as well as the balance provided by the role of our lead director and our independent board means that the major objective of this proposal has been met.

In addition, it is important to note that Citigroup has adopted a series of corporate governance initiatives relevant to the points made in support of this proposal. Citigroup’s non-management directors meet in executive session at every board meeting. Only outside members of the board participate in these executive sessions. More than two-thirds of Citigroup’s board members are “independent” under NYSE guidelines. The audit and risk management committee, the personnel and compensation committee, the nomination and governance committee, and the public affairs committee are each comprised solely of independent directors. Citigroup has also eliminated interlocking directorships between Citigroup executive officers and companies affiliated with Citigroup directors. The board conducts annual self-evaluations of its effectiveness and that of each of its committees.

Our independent board, combined with a Chairman who is familiar with Citigroup’s businesses and operations, a separate CEO, and a lead director with formalized duties and responsibilities, is in our view an extremely strong structure. The proposal would disrupt this balance and eliminate many of the benefits afforded by the existing structure.