Examples of rule of 60 clauses in contracts| Afterpattern (2024)

104 PROPOSAL 3: ADVISORY VOTE TO APPROVE CITI’S 2016 EXECUTIVE COMPENSATION Capital Accumulation Program; Rule of 60. Deferred stock awarded to the named executive officers under the Capital Accumulation Program vests over a period of four years subject to performance conditions. Capital Accumulation Program awards provide for accelerated vesting if a participant dies but provide for vesting on schedule in all other circ*mstances in which vesting occurs after termination of employment. If a participant’s combined years of age and service meet the Rule of 60 at the time he or she voluntarily resigns, the participant’s Capital Accumulation Program shares will continue to vest on schedule over the four-year period, provided he or she does not work for a “significant competitor” during the vesting period. A participant meets the Rule of 60 if his or her age plus full years of service equal at least 60 and he or she either: (i) is at least age 50 with at least five full years of service; or (ii) is under age 50 with at least 20 full years of service. Partial years of age and service are each rounded down to the nearest whole number. In contrast, if a participant does not meet the Rule of 60 and voluntarily resigns, any unvested Capital Accumulation Program shares are forfeited, unless the participant becomes employed in an “alternative career.” Under the “alternative career” provisions of Citi’s Capital Accumulation Program, employees may continue to vest in their deferred awards if they resign from Citi to work full-time in government or at a charitable organization or to teach full-time at an educational institution. As of December 31, 2016, all of the named executive officers except Mr. Bird and Ms. Fraser had attained the Rule of 60.

Performance Share Units. Performance Share Units have the same vesting provisions covering termination of employment as those applicable to Citi’s Capital Accumulation Program, including the Rule of 60. Any named executive officer who meets the Rule of 60 will receive his earned Performance Share Units unless: (i) he or she voluntarily resigns during the performance period and performs services for a competitor, or (ii) he or she is terminated for gross misconduct (in which case the undelivered award is cancelled). If a named executive officer who meets the Rule of 60 resigns and competes, at the end of the performance period, he or she will forfeit a prorated Performance Share Unit award, based on his or her service during the performance period. For example, if such a named executive officer resigns after the first year of the performance period to work for a competitor, he or she will receive one-third of the earned Performance Share Units after the end of the three-year performance period and the other two-thirds will be forfeited. A named executive officer who does not meet the Rule of 60 will also receive this pro rata vesting if he or she resigns.

Performance Share Units. Performance Share Units have the same vesting provisions covering termination of employment as those applicable to Citi’s Deferred Stock Awards, including the Rule of 60. Any named executive officer who meets the Rule of 60 will receive his or her earned Performance Share Units unless: (i) he or she voluntarily resigns during the performance period and performs services for a competitor, or (ii) he or she is terminated for gross misconduct (in which case the undelivered award is cancelled). If a named executive officer who meets the Rule of 60 resigns and competes, at the end of the performance period, he or she will forfeit a prorated Performance Share Unit award, based on his or her service during the performance period. For example, if such a named executive officer resigns after the first year of the performance period to work for a competitor, he or she will receive one-third of the earned Performance Share Units after the end of the three-year performance period and the other two-thirds will be forfeited.

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