exhibit10-36.htm


    Exhibit 10.36 

     

    December 29, 2008


     

    Edward J.
Kelly
Citigroup Inc.
399 Park Avenue
New York, NY 10043 

     

    Dear Ned:


     

    Reference is made to
our letter agreement dated February 4, 2008 (the “Letter Agreement”). In light
of the need to modify the Letter Agreement to reflect your changed position
within Citigroup Alternative Investments (“CAI”) since the execution of the
Letter Agreement, you and we hereby agree to amend the Letter Agreement as
follows: 

     

    The third sentence of
the second paragraph of paragraph 1 shall be amended and restated as follows:


     

    “Good Reason shall mean (i) a material reduction in your title,
responsibilities, duties, authority or positions, all as in effect on the date
hereof or as altered with your written consent; (ii) a decrease in your
guaranteed incentive compensation or annual salary or a failure by the Company
to pay compensation due and payable to you in connection with this offer; (iii)
(A) you are no longer Head of Global Banking and President and CEO of CAI or (B)
a change in your reporting relationship as in effect on the date hereof unless
after such change you report solely to the Chief Executive Officer of Citigroup
Inc. or as altered with your written consent or (iv) a transfer of your primary
workplace outside of Manhattan unless the Company’s or CAI’s principal corporate
office is moved outside Manhattan and you are asked to transfer to such
principal corporate office, in which case Good Reason shall mean moving the
Company’s or CAI’s principal corporate office more than 30 miles outside
Manhattan; provided, however, that no event or condition specified in
subparagraphs (i) - (iv) above shall constitute Good Reason unless (x) you give
the Company written notice of your intention to terminate your employment for
Good Reason and the grounds for such termination within 30 days of your
discovery of such grounds, and (y) such grounds for termination (if susceptible
to correction) are not corrected by the Company within 30 days of its receipt of
such notice (or, in the event that such grounds are susceptible to correction
but cannot be corrected within such 30-day period, the Company has taken all
reasonable steps within such 30-day period to correct such grounds, and such
grounds are not corrected within the next 30-day period thereafter);
provided, further, that no change in title or reporting
relationship shall constitute Good Reason if (aa) such change arises in
connection with a reorganization of the Company’s 

     

    

    
    


    management or organizational structure so that such title no longer
exists and (bb) you are provided a title with substantially similar authority
and/or equivalent reporting relationship.” 

     

    Very truly yours,


     

    CITIGROUP
INC. 
 

     

    
      	/s/ Paul D.
      McKinnon
	Name: Paul D. McKinnon
	Title: Head of Human
Resources


    



    Agreed and
acknowledged: 

     

    
      	/s/ Edward J.
      Kelly
	Edward J. Kelly


    


    

    
    


    February 4, 2008


     

    BY HAND DELIVERY 
Mr. Edward J. Kelly 
 

     

    We are delighted to
extend to you an offer to join Citibank, N.A. (the “Company” and, together with
its parent, and its and their subsidiaries, “Citi”), as President of Citi
Alternative Investments. Upon joining the Company, you will report to the CEO of
CAI. Your expected start date will be Monday, February 4, 2008. 

     

    If you accept, you
will be joining a family of companies that serves 200 million customer accounts
in nearly 100 countries and is bound together by a steady focus on
growth, a workforce committed to excellence, and a workplace based on mutual
respect, where every employee can make a difference. 

     

    Base Salary. Your base salary will be paid semi-monthly at
an annual rate of $225,000.00 (less applicable withholdings and deductions).


     

    Incentive and Retention Awards.


     

    1. 2008 Guaranteed Incentive and Retention
Award. In addition to your
base salary, for fiscal year 2008, your total incentive and retention award is
guaranteed, subject to the provisions below, to be not less than $9,775,000.00,
which will be paid and granted, respectively, no later than March 15, 2009. The
2008 guaranteed incentive and retention award is payable in a combination of
cash and a restricted or deferred stock award pursuant to the Capital
Accumulation Program(s) (“CAP”) in effect at the time of the award. CAP is
composed of two programs, the Core Capital Accumulation Program (“Core CAP”) and
the Supplemental Capital Accumulation Program (“Supplemental CAP”). A copy of
the current CAP Prospectus is enclosed. 

     

         Your 2008 guaranteed incentive and retention
award will not be paid and granted if, before the date of the scheduled payment
and grant you have voluntarily terminated your employment without “Good Reason”
or you have been terminated by the Company for “Cause.” Cause shall mean an
action taken by any governmental or non-governmental regulatory body or self
regulatory organization (“SRO”) which substantially impairs you from performing
your duties; your material misconduct in connection with your employment; your
material breach of any material CAI policy or rule; your dishonesty in
connection with your employment; your breach of your fiduciary duty of loyalty
to CAI; your violation of any securities or banking law, rule or regulation or
of an SRO’s constitution, by-laws, rules or regulation; your failure to obtain
the 

     

    

    
    


    Edward J.
Kelly
February 4, 2008
Page 2 of 9 
 

     

    required licenses
within a reasonable period of time after your start date or to remain licensed
to perform your functions; your failure to devote all of your professional time
to your assigned duties and to the business of CAI; your conviction of a felony;
your conviction for a crime of breach of trust, dishonesty, money laundering or
participation in a pre-trial diversion program for such a crime; your continued,
material failure to perform after written notice or your serious negligence in
the performance of your duties; or, a factual representation made by you in the
furtherance of your hiring which shall prove to have been incorrect in any
material respect when made. Good Reason shall mean (i) a material reduction in
your title, responsibilities, duties, authority or positions; (ii) a decrease in
your guaranteed incentive compensation or annual salary or a failure by the
Company to pay
compensation due and payable to you in connection with this offer; (iii) (A)
someone other than you replaces the current CEO of CAI in that role or (B) a
change in your reporting relationship that results in your reporting to someone
other than the CEO of CAI, unless you become the CEO of CAI or (iv) a transfer
of your primary workplace outside of Manhattan unless the Company’s or CAI’s
principal corporate office is moved outside Manhattan and you are asked to
transfer to such principal corporate office, in which case Good Reason shall
mean moving the Company’s or CAI’s principal corporate office more than 30 miles
outside Manhattan; provided, however, that no event or condition specified in
subparagraphs (i) – (iv) above shall constitute Good Reason unless (x) you give
the Company written notice of your intention to terminate your employment for
Good Reason and the grounds for such termination within 30 days of your
discovery of such grounds, and (y) such grounds for termination (if susceptible
to correction) are not corrected by the Company with 20 days of its receipt of
such notice (or, in the event that such grounds are susceptible to correction
but cannot be corrected within such 20-day period, the Company has taken all
reasonable steps within such 20-day period to correct such grounds, and such
grounds are not corrected within the next 20-day period thereafter); provided,
further, that no change in title or reporting relationship shall constitute Good
Reason if (aa) such change arises in connection with a reorganization of the
Company’s management or organizational structure so that such title no longer
exists and (bb) you are provided a title with substantially similar authority
and/or equivalent reporting relationship. 

     

         Notwithstanding anything to the contrary, if
the Company terminates your employment without Cause, you terminate your
employment with Good Reason, or your employment with the Company is terminated
by reason of your death or total disability (as determined by the Social
Security Administration) (“Disability”), (i) if such termination is prior to the
payment or grant date for the 2008 guaranteed incentive and retention award,
your 2008 guaranteed incentive and retention award will be paid to you or your
estate in all cash on the date other similar 2008 incentive and retention awards
are paid and granted, no later than March 15, 2009 or (ii) to the extent the CAP
portion of this award (not including any premium shares), if any, is not vested
and delivered as a result of such termination, the Company will cancel such
unvested and unpaid portion of this award and will make a cash payment to you
equal to the value of such canceled shares (not including premium shares) as of
the termination date. However, if it is discovered prior to the date of payment
of the award that your employment could have been terminated for Cause,


     

    

    
    


    Edward J.
Kelly
February 4, 2008
Page 3 of 9 
 

     

    your employment
shall, at the election of the Company in its sole discretion, be deemed to have
been terminated for Cause, as of the date the event or events giving rise to the
termination for Cause, and the Company shall have no further obligation to pay
to you any outstanding guaranteed incentive and retention award. 

     

         Upon termination of your employment, all
employee perquisites, entitlements and benefits will immediately cease, except
as otherwise provided for in this agreement, or as otherwise provided under the
relevant benefit plans. In addition, you agree to accept such payments,
perquisites, entitlements and benefits in full satisfaction of any and all
claims arising out of this offer. 

     

    2. Discretionary Incentive and Retention
Award. For fiscal year
2009 and thereafter, you will be eligible to be considered for a discretionary
award package, generally made on an annual basis. Discretionary award packages
will be made at the discretion of management based on a variety of factors,
including Citi’s performance, your business unit’s performance, and your
individual contribution, and are subject to the terms below. 

     

         Award packages are made as a cash bonus or,
for award packages that exceed a certain threshold (as determined by the
Company), as a combination of an incentive award in the form of a cash bonus and
a retention award of restricted or deferred stock in accordance with CAP.


     

         Under current program guidelines, your 2008
guaranteed and any future discretionary award packages will be composed of a
cash bonus, Core CAP and Supplemental CAP award. The Core CAP award will
represent 25% of the pre-tax value of the award package, and the Supplemental
CAP award will represent from 5-15% of the award package. The remainder of the
award package after Core CAP and Supplemental CAP will be in the form of a cash
bonus (less applicable withholdings and deductions). 

     

         CAP awards are governed by the terms of the
prospectus in effect at the time of the award (as may be amended from time to
time) and CAP guidelines that may be modified at management’s discretion. CAP
awards are subject to vesting conditions, including but not limited to continued
employment, and will be cancelled if the conditions of vesting are not met.
Absent a written agreement to the contrary, and except for your 2008 guaranteed
award, all award packages are discretionary and you do not have a right to
receive such an award. In order to be eligible to receive any discretionary
award package, you must be actively employed by Citi on the date the award is
made. 

     

    Sign-On Award. You will receive a sign-on award on your start
date of 36,166 restricted or deferred shares of Citigroup Inc. common stock
pursuant to the Citigroup Stock Award Program (“CSAP”). The shares of restricted
or deferred stock will vest and be distributed to you at a rate of 25% per year
over four years beginning on the first anniversary of the grant date, provided
that you remain continuously employed by Citi 

     

    

    
    


    Edward J.
Kelly
February 4, 2008
Page 4 of 9  
 

     

    through each vesting
date and meet all other vesting conditions. More detailed information on the
terms and conditions of this grant will be outlined in the prospectus and
notification materials, which will be forwarded to you following the award date.
In the event that your employment with the Company is terminated at any time by
you with Good Reason, by involuntary termination not for Cause, or due to your
death or Disability, then the sign-on award shall fully vest and become
non-forfeitable as of the date of termination and shall be delivered to you in
freely tradeable form, or, at the Company’s discretion, the Company shall pay
you the cash equivalent of any forfeited shares measured as of the date of
termination. 

     

    Stock Ownership Commitment. Citi is a leader among companies that
maintain a stock ownership commitment. In 2005, Citi introduced an expanded
version of the stock ownership commitment, with a 25% holding requirement that
applies prospectively. After the expansion of the stock ownership commitment
became effective in 2006, approximately 3,000 employees around the world are
subject to Citi’s stock ownership commitment. We expect that this
stock ownership commitment will apply to you. 

     

    Compensation and Benefits. You will be eligible to participate in the
Company’s comprehensive benefit programs. All compensation and benefits are
deliverable in accordance with the Company’s policies, plans and programs in
effect at the time of delivery. Further details regarding these policies,
benefit plans and programs will be provided when you begin your employment.
Please note that all the Company’s compensation, benefits and other policies,
plans and programs are subject to change at management’s discretion.
Notwithstanding the foregoing, in addition to the Company’s moving the contents
of your current office to your office with the Company in Manhattan, in the
event that during your employment you relocate your primary residence to the New
York City area, you will be eligible for relocation benefits under the Company’s
relocation policy then in effect without regard to any time restrictions that
would otherwise apply. 

     

    Indemnification. You shall be indemnified to the maximum
extent provided by the corporate documents of the Company then in effect or
pursuant to applicable law and subject to your execution of applicable
undertakings, as provided by such corporate documents or applicable law,
including but not limited to recoupment if you do not meet the relevant standard
of conduct. You agree that should you request indemnification and/or the
advancement of expenses, you will repay all of such expenses if the Board of
Directors of the Company that advanced the expenses determines that the actions
for which such indemnification and/or advancement was sought did not meet the
relevant standard of conduct. 

     

    Taxes. All compensation, payments, incentive and
retention awards, perquisites, and benefits set forth in this letter are subject
to applicable federal, state and local taxes, and the Company will withhold such
taxes as it determines are required by applicable law or regulation. You will
remain obligated to pay all required taxes on all compensation, payments,
incentive and retention awards, perquisites, and benefits 

     

    

    
    


    Edward J.
Kelly
February 4, 2008
Page 5 of 9 
 

     

    regardless of whether
these amounts have been withheld or are required to be withheld by the Company.


     

    IRC Section 409A. This letter will be administered in accordance
with section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), and the Treasury pronouncements relating thereto. You
further agree that this Agreement may be amended by the Company to the extent
necessary to comply with section 409A of the Internal Revenue Code of 1986, as
amended, and any rules, regulations and any Treasury pronouncements relating
thereto in order to preserve the payments and benefits provided herein to the
extent possible without additional monetary costs to the Company. 

     

    Prior Restrictive
Covenants. You will abide
by any pre-existing terms and conditions that are contained in any contractual
restrictive covenants you may have entered into with any prior employer, client
or other person or entity, including (without limitation) any covenants relating
to the hiring or solicitation of employees, solicitation of customers, your
employment by a competitor, or maintaining the confidentiality of proprietary
information. You represent that your employment with the Company will not be in
violation of any pre-existing restrictive covenant, and you understand that your
employment with the Company is contingent upon same. If you are subject to any
such restrictive covenants, you have already disclosed them to me and you have
provided copies of them to me. 

     

    Non-Solicitation. In consideration of your employment, you
agree that while you are employed, and for one year following the termination of
your employment, you will not directly or indirectly solicit, induce, or
otherwise encourage any person to leave the employment of or terminate any
customer relationship with Citi. 

     

    Confidentiality. You also agree that during your employment,
you may have access to or acquire confidential, client, employee, competitive
and/or other business information that is unique and cannot be lawfully
duplicated or easily acquired. You understand and agree that you will have a
continuing obligation to protect the confidentiality of such information and not
to use, publish or otherwise disclose such information either during or after
your employment with the Company. 

     

    Pre-Employment Screening. Your employment is contingent upon successful
completion of any and all procedures and verifications to meet employment
eligibility, including completion of a drug screening; completion of reference
checks and a background criminal report; and your providing appropriate work
authorization and completing an “I-9” form. 

     

    Employment at Will. This letter should not be construed as a
promise or guarantee of employment for any defined period of time. Your
employment relationship with the Company is “at will,” which affords either
party the right to terminate the relationship at any time for any reason or for
no reason at all not otherwise prohibited by law. 

     

    

    
    


    Edward J.
Kelly
February 4, 2008
Page 6 of 9
 

     

    Severability. In the event that any provision of this
letter shall be determined to be invalid or unenforceable, in whole or in part
and other than any requirements for a separation agreement and/or general
release, the remaining provisions of this letter shall be unaffected thereby and
shall remain in full force and effect to the fullest extent permitted by law.


     

    This letter and the
enclosed Principles of Employment describe the Company’s offer of employment.
Any discussions that you may have had with us are not part of this offer unless
they are described in this letter, the applicable Employee Handbook, the Citi
Code of Conduct, or the Principles of Employment. 

     

    We are confident that
Citi can offer you a rewarding and challenging career opportunity. Please
confirm that you have accepted the terms of this offer by signing this letter
and the enclosed Principles of Employment. Please return a signed copy of this
letter and the Principles of Employment to me as soon as possible. I look
forward to working with you. 

     

    Sincerely,


     

    /s/ John Havens


     

    John Havens

Chief Executive
Officer
Citi’s Alternative Investments 

     

    
      	ACCEPTED AND AGREED:	 	  
	  
	/s/ Edward J.
      Kelly	 	
            	February 4,
    2008	 
	Edward J. Kelly	 	
            	Date 	 


    


    Enclosure: Principles
of Employment 

     

    

    
    


    Edward J.
Kelly
February 4, 2008
Page 7 of 9 
 

     

    Office Memo


     

    
      	TO:	              
      	All New Hires and Transfers
	 
	FROM:	
            	Human Resources
	 
	SUBJECT:	
            	PRINCIPLES OF
  EMPLOYMENT


    


    As you consider our
offer of employment or continued employment with Citigroup Inc., its
subsidiaries, and its and their affiliates (collectively “Citi”), there are
certain matters that we want to clarify. First, you must observe the policies
that we publish from time to time for employees. These include a requirement
that you maintain the highest standards of conduct and act within the highest
ethical principles. You must not do anything that may be a conflict of interest
with your responsibilities as an employee. These expectations are included in
your business sector’s Employee Handbook, the Citi Code of Conduct, and any
other policies that apply to your business sector or to Citi employees
generally. These documents are available for your review prior to your
acceptance or transfer of employment if you choose to review them. You will be
asked to acknowledge receiving a copy of the Citi Code of Conduct (if you are a
new hire) and the Employee Handbook for your business sector on or before your
start date or transfer date. Remember–it is your responsibility to read and
understand these policies and expectations. If you have any questions, now or in
the future, please ask your Human Resources Generalist.

     

    Second, you must
never use (except when necessary in your employment with us), nor disclose to
any unauthorized person within Citi or anyone not affiliated with Citi, any
confidential or unpublished information you obtain as a result of your
employment with us. This applies both while you are employed with us and after
that employment ends. If you leave our employ, you may not retain or take with
you any writing or other record that relates to the above. 

     

    Third, your
employment with us requires your full attention. You waive any rights to and
further agree to assign, and hereby do assign, any work of authorship,
invention, discovery, development or improvement made or conceived by you,
either alone or jointly with others, during the time you are employed by us
which pertains to our business; arises out of your employment; is aided by the
use of time, materials, property or facilities of Citi; or is at Citi’s request
and expense. In addition, in the event that you currently own rights in any
inventions or technologies (such as financial models, trading strategies or
software programs), you are required to notify your manager of the existence and
nature of such things prior to your employment with us. Unless you obtain a
signed written agreement from an authorized representative of Citi providing
otherwise prior to your employment with us, you agree to assign, and hereby do
assign, to us any interest that you have in such inventions or technologies.


     

    

    
    


    Edward
J. Kelly
February 4, 2008
Page 8 of
9 
 

     

    Additionally you
agree to assist Citi in connection with any effort to perfect such assignment;
any controversy or legal proceeding relating to such invention, improvement,
discovery or work of authorship; and in obtaining domestic and foreign
patient(s), copyright or other protection covering the same.

     

    Fourth, you agree to
follow our dispute resolution/arbitration procedure for resolving all disputes*
arising out of or relating to your employment with and separation from Citi.
This applies while you are employed by us as well as after your employment ends.
While we hope that disputes with our employees will never arise, we want them
resolved promptly if they do arise. These procedures do not preclude us from
taking disciplinary actions (including terminations) at any time, but if you
dispute those actions, we both agree that the disagreement will be resolved
through these procedures. Our procedures are divided into two parts. First, an
internal dispute resolution procedure which allows you to seek review of any
action taken regarding your employment or termination of your employment which
you think is unfair. Second, in the unusual situation when this procedure does
not fully resolve a dispute, and such dispute is based upon a legally protected
right (i.e., statutory, contractual, or common law), we both agree to submit the
dispute, within the time provided by applicable statute(s) of limitations, to
binding arbitration as follows: 

    	Before the arbitration facilities of the
  Financial Industry Regulatory Authority, Inc. (“FINRA”) if: (1) you are an
  employee of the Global Wealth Management or Markets & Banking sectors of
  Citi; or, (2) you are an employee of both Smith Barney, a division of
  Citigroup Global Markets Inc. (“Smith Barney”) (the “Secondary Employer”) and
  another Citi affiliate (the “Primary Employer”) (which together make you a
  “Dual Employee”) and your dispute involves Smith Barney or activities related
  to your securities license(s). In such Dual Employee instances, any other
  related disputes you may have against your Primary Employer must be heard
  before the FINRA as well. 
 
        
	Before the American Arbitration
  Association (“AAA”) where you do not meet the criteria above for FINRA
  arbitration, where the FINRA declines the use of its facilities, or where you
  are a Dual Employee and your dispute does not involve Smith Barney or
  activities related to your securities license(s). 


    Arbitrations shall be
conducted in accordance with the respective arbitration rules of the FINRA or
AAA, as applicable, then in effect and as supplemented by the applicable
Arbitration Policy then in effect for your business sector (“Arbitration
Policy”). Dual Employee disputes shall be governed by the Arbitration Policy of
the Primary Employer, except that notwithstanding the forum designated in such
Arbitration Policy, any disputes with Smith Barney or that relate to your
securities license(s) must be heard before the FINRA. A detailed description of
the applicable Arbitration Policy is available for review prior to your
acceptance or transfer of employment if you choose to review it, and is included
in the Employee Handbook for your business sector. Again, it is your
responsibility to read and understand the dispute resolution/arbitration
procedure. If you have any questions, now or in the future, please ask your
Human Resources Generalist.

     

    Fifth, nothing herein
constitutes a contract of employment for a definite period of time. The
employment relationship is “at-will” which affords either party the right to
terminate the 

     

    

    
    


    Edward
J. Kelly
February 4, 2008
Page 9 of
9 
 

     

    relationship at any
time for no reason or any reason not otherwise prohibited by applicable law.
Citi retains the right to decrease an employee’s compensation and/or benefits,
transfer or demote an employee, or otherwise change the terms and conditions of
any employee’s employment with Citi at any time with or without notice at its
sole discretion. 

     

    We believe these
matters are important to you as an employee and to us as an employer. Your
acceptance of our offer of employment with Citi or to transfer within Citi
constitutes your acceptance of the aforementioned provisions.

     

    Understood and
agreed.  

     

    
    

     

    
      	/s/ Edward J.
      Kelly	 	
            	February 4,
    2008	 
	Signature	 	
            	Date


    

     

    * These include, but
are not limited to, all claims, demands or actions alleging unlawful employment
discrimination or other conduct under Title VII of the Civil Rights Act of 1964,
the Civil Rights Act of 1866, the Civil Rights Act of 1991, the Age
Discrimination in Employment Act of 1967, the Rehabilitation Act of 1973, the
Americans with Disabilities Act of 1990, the Family and Medical Leave Act of
1993, the Fair Labor Standards Act of 1938, the Equal Pay Act of 1963, the
Employee Retirement Income Security Act of 1974, the Worker Adjustment And
Retraining Notification Act of 1989, the Sarbanes-Oxley Act of 2002, and all
amendments to the aforementioned, and any other federal, state or local statute
or regulation or common law regarding employment, discrimination in employment,
the terms and conditions of employment, employment compensation, breach of
contract, defamation, the termination of employment, retaliation or
whistleblower claims, or any claims arising under any Citigroup Inc. Separation
Pay Plan.