6
Exhibit 10
AT&T Capital Corporation
Form 8-K January 5, 1998
December 29, 1997
Xxxxxx X. Xxxxxxx
0000 Xxxxxxxxx Xxxxx, #000
Xxxxxx, XX 00000
Dear Xxx:
This letter is to memorialize AT&T Capital Corporation's (the "Company")
and your mutual agreement that your employment by the Company will terminate on
December 30, 1997, in accordance with Section 6.1(a) of your Employment
Agreement dated September 30, 1996 with the Company (the "Original Employment
Agreement"), as amended by that certain letter agreement dated May 30, 1997 (the
"Amendment," and the Original Employment Agreement as so amended, the
"Employment Agreement"). As set forth in paragraph 2(d) of the Amendment, your
termination benefits will be determined as if your employment had been
terminated without Cause (as defined in the Employment Agreement) on May 28,
1997, without regard to any requirement for notice and without interest, and
shall be paid or provided as provided in Exhibit A. A summary of your pay and
benefit entitlements upon termination is attached hereto as Exhibit A.
Although the term of your employment is being terminated, the remaining
provisions of the Employment Agreement, including, without limitation, Sections
7, 8, 10, 12, 13, 16, 17 and 18 and the first sentence of Section 9 thereof,
shall remain in full force and effect.
Except as expressly modified by the Amendment, the provisions of your
Subscription Agreement with the Company (as successor by merger to Antiqua
Acquisition Corporation ("Antiqua")) dated as of September 30, 1996; your Stock
Purchase Agreement with Nomura International plc ("Nomura") and the Company (as
successor by merger to Antiqua) dated as of September 30, 1996; your Sale
Participation Agreement with Nomura dated as of September 30, 1996; and your
Stock Option Agreement with the Company dated as of October 1, 1996 shall remain
in full force and effect with your termination deemed to be without cause, and
as of the December 30, 1997.
Exhibit B summarizes the payments that you will receive, subject in
certain cases to the satisfaction of specified conditions, in connection with
your AT&T Capital common stock and stock options, subject to, and as soon as
practicable following, the consummation of Newcourt Credit Group's acquisition
of the common stock of the Company.
The Company will issue a press release substantially in the form
attached here to as Exhibit C announcing the cessation of your employment with
AT&T Capital.
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Exhibit 10
AT&T Capital Corporation
Form 8-K January 5, 1998
Please acknowledge your agreement with the terms and conditions of the
termination of your employment (as specified herein and the attachments hereto)
by executing this letter below and returning it to me. Also, by executing this
letter you are hereby resigning, as of December 30, 1997, as Chairman of the
Board of Directors of the Company and as a member of the Board of Directors (and
all committees thereof) of the Company and each of its applicable affiliates.
The undersigned represents that he is authorized to execute this letter
agreement on behalf of AT&T Capital Corporation and that the necessary consent
hereto has been obtained by Newcourt Credit Group Inc.
Very truly yours,
By: /s/ XXXXXX X. XXXXXX
---------------------------
Xxxxxx X. Xxxxxx
Senior Vice President
General Council and
Secretary
Accepted and Agreed:
/s/ XXXXXX X. XXXXXXX
--------------------------------
Xxxxxx X. Xxxxxxx
Attachments (3)
8
Exhibit 10
AT&T Capital Corporation
Form 8-K January 5, 1998
Exhibit A
SUMMARY OF TERMINATION RELATED
COMPENSATION AND BENEFITS
1. Termination Amount. On or about January 15, 1998, you shall receive the
Termination Amount (as defined in the Employment Agreement), after
deducting the Resignation Amount (as defined in the Amendment) already paid
to you, which, after such deduction is $2,287,468.50. As a condition to
your receipt of $325,000 of this net amount, within ten days of the date of
the letter to which this Exhibit is attached, you must sign a separation
agreement and general release in the form annexed as an exhibit to the
Original Employment Agreement. On or about January 15, 1998, you shall also
receive an amount equal to 135% of the premiums necessary to obtain COBRA
continued health and dental coverage for 24 months.
2. Executive Benefit Plan. You shall be entitled to a lump sum pension benefit
in accordance with the Company's Executive Benefit Plan in effect as of
October 1, 1996; provided that, for purposes of determining the pension
benefit to which you are entitled in accordance with such Executive Benefit
Plan, you shall be deemed (i) to be a "Vested Participant"; (ii) to
continue to be a "Tier I Participant"; to have a "Final Average Pay" equal
to $1,101,971; and (iv) to continue to accrue additional "Credited Service"
(without regard to the 10 year limit in Section 4.2(a) of the Executive
Benefit Plan). Such benefit shall be paid on or about January 15, 1998. The
estimated amount of such benefit is $5.8 million.
3. Life Insurance. Upon termination of your employment with the Company, you
shall receive continued basic life insurance coverage (in an amount equal
to $1,214,000) for 24 months. Upon termination of your employment with the
Company, if you then have supplemental life insurance coverage through the
Company, you may continue that coverage, at your cost, for up to 24 months.
4. Compensation Payment. On or about January 15, 1998, you shall be paid the
Compensation Payment (as defined in the Employment Agreement); provided,
however, that notwithstanding anything to the contrary in the Employment
Agreement, (1) your right to receive payments in respect of base salary
shall terminate on December 30, 1997, (2) your 1997 bonus (which shall be
paid as part of the Compensation Payment) shall equal $375,000, and (3) you
shall not be entitled to any annual incentive awards for any period after
1997.
5. Outplacement Benefits. You shall continue to receive outplacement benefits
to the extent that you would have been entitled to such
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Exhibit 10
AT&T Capital Corporation
Form 8-K January 5, 1998
benefits had you been terminated without Cause (pursuant to Section 6 of the
Employment Agreement) on May 28, 1997.
6. Other Benefits. Upon termination of your employment with the Company, you
shall receive all other benefits, under Company plans or program generally
applicable to senior executives, to which an otherwise similarly situated
senior executive being terminated by the Company without cause would then
be entitled.
7. Senior Advisor to the Company. Commencing on December 31, 1997, you shall
provide services to the Company and its affiliates as an independent
contractor (but not in any other capacity). Such services shall consist of
providing advice regarding the equipment leasing and finance industry, the
Company and its affiliates' strategy and tactics, and related counsel as
may reasonably be requested from time to time by the Chairman or Chief
Executive Officer of the Company or its parent corporation. As sole
compensation for performing such services, you shall receive the following
payments on or about the dates specified below, conditioned on your
compliance with Section 12 of the Original Employment Agreement:
Commencing on January 30, 1998, twenty-four (24) equal monthly payments
aggregating a total of $3,049,959; and
January 2, 1999 $1,478,570; and
January 2, 2000 $1,478,570.
All reasonable out-of-pocket expenses that have been approved in advance by
the Company shall be reimbursed by the Company.
8. Title, Office, Secretarial Assistance. You shall be entitled to use the
title "Senior Advisor" to the Company through December 31, 1999, provided
that you continue to comply with the provisions of Section 12 of the
Original Employment Agreement; however, you shall not be authorized to take
any action or transact any business on behalf of the Company. The Company
will also (a) permit you to continue to use, through May 30, 1998, the
headquarters office you currently use (except to the extent that the
Company has other needs for that office); (b) make Email/computer services
and secretarial assistance (to the extent currently provided) available to
you through May 30, 1998 consistent with prior practices; and (c) provide
reasonable transition assistance to you (including forwarding mail, Email
and phone messages) for a reasonable period of time after May 30, 1998.
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Exhibit 10
AT&T Capital Corporation
Form 8-K January 5, 1998
Exhibit B
SUMMARY OF STOCK AND STOCK OPTION PAYMENTS
1. Stock. Your 560,511 shares of the Company's common stock will be cashed out
at the closing of Newcourt Credit Group Inc.'s acquisition of the Company
(the "Acquisition") at an amount equal to $17.43 per share net of the
outstanding balance on your Company loan. The net payment will be
approximately $6.66 million.
2. Vested Options. You currently hold 200,000 vested options with an exercise
price of $10.00 per share. Those vested options will be cashed out as soon
as practicable after the closing of the Acquisition for an amount equal to
$1,486,000.
3. Unvested Options. You currently hold 398,000 unvested options with an
exercise price of $10 per share. In accordance with the terms of your stock
option agreement, your unvested options will be canceled on the effective
date of your termination.
Exhibit C
(Intentionally omitted)
