Citibank 2010 Annual Report Download - page 192

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Profit Sharing Plan
In October 2010, the Committee approved awards under the 2010 Key
Employee Profit Sharing Plan (KEPSP) which may entitle participants to
profit-sharing payments based on an initial performance measurement
period of January 1, 2010 through December 31, 2012. Generally, if a
participant remains employed and all other conditions to vesting and
payment are satisfied, the participant will be entitled to an initial payment in
2013, as well as a holdback payment in 2014 that may be reduced based on
performance during the subsequent holdback period (generally, January 1,
2013 through December 31, 2013). If the vesting and performance conditions
are satisfied, a participant’s initial payment will equal two-thirds of the
product of the cumulative pretax income for the initial performance period
and the participant’s applicable percentage. The initial payment will be paid
after January 20, 2013, but no later than March 15, 2013.
The participant’s holdback payment, if any, will equal the product of
(a) the lesser of cumulative pretax income of Citicorp (Citigroup less Citi
Holdings) for the initial performance period and cumulative pretax income
of Citicorp for the initial performance period and the holdback period
combined (generally, January 1, 2010 through December 31, 2013), and
(b) the participant’s applicable percentage, less the initial payment; provided
that the holdback payment may not be less than zero. The holdback
payment, if any, will be paid after January 20, 2014, but no later than
March 15, 2014. The holdback payment, if any, will be credited with notional
interest during the holdback period. It is intended that the initial payment
and holdback payment will be paid in cash; however, awards may be paid
in Citi common stock if required by regulatory authority. Regulators have
required that U.K. participants receive 50% of their initial payment and 50%
of their holdback payment, if any, in shares of Citi common stock that will be
subject to a six-month sales restriction.
In addition to the vesting and performance conditions described above,
nonvested or undelivered KEPSP payments are subject to forfeiture or
reduction if a participant (a) received a payment based on materially
inaccurate financial statements (including, but not limited to, statements of
earnings, revenues or gains) or any other materially inaccurate performance
metric criteria, (b) knowingly engaged in providing inaccurate information
(including such participant’s knowingly failing to timely correct inaccurate
information) relating to financial statements or performance metrics,
(c) materially violated any risk limits established by senior management
and/or risk management, or any balance sheet or working capital guidance
provided by a business head, or (d) is terminated on account of gross
misconduct.
Independent risk function employees were not eligible to participate in
the KEPSP as the independent risk function participates in the determination
of whether payouts will be made under the KEPSP. Expense taken in 2010 in
respect of the KEPSP was $48 million.
On February 14, 2011, the Committee approved grants of awards
under the 2011 KEPSP to certain executive officers. These awards have a
performance period of January 1, 2011 to December 31, 2012 and other terms
of the awards are similar to the 2010 KEPSP.
Additionally, Citigroup may from time to time introduce incentive plans
for certain employees that have an incentive-based award component. These
awards are not material to Citigroup’s operations.