Citrix Systems (CTXS)

Restricted Stock Unit Awards

Pursuant to the 2005 Plan, we may grant executive officers both performance-based restricted stock units and service-based restricted stock units. Once vested, each restricted stock unit represents the right to receive one share of our Common Stock. The grants of restricted stock unit awards are based upon the same factors used to evaluate stock option grants.

In 2008, the performance criteria and attainment levels for grants of performance-based restricted stock units were based upon successful achievement of a non-GAAP corporate operating income target of $376 million. The number of restricted stock units underlying a performance-based award is generally determined one year after the date of the award based on the achievement of the specific performance objectives. If the performance goal is less than 90% attained, then no performance-based restricted stock units will be issued pursuant to the authorized award. For performance at and above 90% attainment, the number of performance-based restricted stock units issued is based on a graduated slope, with the maximum number of performance-based restricted stock units issuable pursuant to the award capped at 125% of the target number of restricted stock units set forth in the award agreement. Once the number of restricted stock units is determined, the units are subject to service-based vesting as described below.

In February 2009, our Compensation Committee determined that the non-GAAP corporate operating income target of $376 million under our 2008 performance-based restricted stock unit awards to our executive officers was 95.8% attained. Based on the graduated payout slope, this attainment translated to a payout of 75% of the 2008 target award for performance-based restricted stock units, which restricted stock units were subject to vesting and other requirements of the restricted stock unit agreements.

The size of the restricted stock unit award granted to our Senior Vice President, Sales and Services, is low compared to the awards granted to our other executives because this award was made prior to his promotion in July 2008 and reflected the level of responsibilities associated with his prior position. Additionally, in 2008, we did not grant any restricted stock unit awards to our Senior Vice President, Virtualization and Management Division, because of the number of stock options we assumed when he joined our company in conjunction with our acquisition of XenSource in October 2007. The XenSource stock options we assumed on behalf of our Senior Vice President, Virtualization and Management Division, represent the right to purchase up to 1,185,527 shares of our Common Stock at a weighted average exercise price of $2.83 per share.

The performance-based restricted stock units vest over three years, with one-third of the units vesting on the first, second and third anniversaries of the date of the award agreement. Under the terms of the restricted stock

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unit agreements, no shares of stock may be issued to settle restricted stock units until the performance criteria has been met and the number of restricted stock units underlying the award is determined.

In addition to the performance-based restricted stock units described above, in 2007 we began granting service-based restricted stock units to our executive officers in order to further reduce our stock option burn rate and overhang, while at the same time maintaining important retention incentives. Consistent with this practice, in the second quarter of 2008, we entered into restricted stock unit agreements with our executive officers for service-based restricted stock unit awards that were not subject to performance criteria and that vest over three years, with one-third of the units vesting on the first, second and third anniversaries of the date of the award agreement.

Except for special option grants made to certain executive officers as described below, the following table summarizes our 2008 equity-based awards to our executive officers:

The Compensation Committee awarded our Senior Vice President, Sales and Services, service-based restricted stock units in April 2008 in connection with his prior position, and also granted him additional service-based restricted units in September 2008 in recognition of his promotion. In 2008, we did not grant any service-based restricted units to our Senior Vice President, Virtualization and Management Division because of the number of stock options we assumed when he joined our company upon the closing of the XenSource acquisition.