Exhibit 10.1
Employment Contracts-
Performance Share Award Agreement
CIT Group Inc.
Long-Term Equity Compensation Plan
Award Agreement
"Participant":
"Date of Award": February 21, 2006
This Award Agreement, effective as of the Date of Award set forth above,
sets forth the grant of Performance Shares by CIT Group Inc., a Delaware
corporation (the "Company"), to the Participant named above, pursuant to the
provisions of the CIT Group Inc. Long-Term Equity Compensation Plan, as amended
from time to time (the "Plan"). All capitalized terms shall have the meanings
ascribed to them in the Plan, unless specifically set forth otherwise herein.
The parties hereto agree as follows:
(A) Grant of Performance Shares. The Company hereby grants to the
Participant Performance Shares in the manner and subject to the
terms and conditions of the Plan and this Award Agreement as
follows:
(1) "Target Performance Share Grant": _____________ Shares.
(2) "Performance Leverage Factor Grid" as set forth in Exhibit A.
(3) "Performance Period": January 1, 2006 - December 31, 2008.
(4) The final number of Performance Shares actually awarded at the
end of the Performance Period, if any, shall be based on the
attainment of specified levels of the Performance Measures set
forth on the Performance Leverage Factor Grid and shall equal
the sum of:
(i) The Target Performance Share Grant multiplied by the
applicable ROCE Performance Leverage Factor set forth on
Exhibit A; and
(ii) The Target Performance Share Grant multiplied by the
applicable EPS Performance Leverage Factor set forth on
Exhibit A.
(B) Payment for Performance Shares.
(1) As soon as administratively practicable after the end of the
Performance Period, the Committee shall determine the level
attained for each Performance Measure. At such time, the
Participant shall be awarded the final number of Performance
Shares as determined under Section A(4). Each final
Performance Share represents one Share. Each Performance Share
shall be paid as soon as administratively practicable
following the end of the Performance Period, but in any event
not later than March 15, 2009 (the "Payment Date").
(2) The final Performance Shares may be paid in Shares, in cash in
an amount equal to the number of final Performance Shares
multiplied by the Fair Market Value of a Share as of the last
day of the Performance Period, or in a combination of cash and
Shares, as determined by the Committee.
(3) If during the Performance Period dividends with respect to
Shares are declared or paid by the Company, the Participant
shall be entitled to receive dividend equivalents in an amount
equal to the cumulative dividends declared or paid on a Share
during the Performance Period multiplied by the number of
final Performance Shares awarded to the Participant. Subject
to Section F, the dividend equivalents shall be paid in cash
on the Payment Date. If the Participant's employment
terminates during the Performance Period for any reason set
forth in Sections C(1) or C(2) of this Award Agreement or if a
Change of Control occurs, the Participant shall be entitled to
receive dividend equivalents in an amount equal to (i) the
cumulative dividends declared or paid on a Share during the
period beginning on the first day of the Performance Period
and ending on the last day of the month during which the
termination of employment or Change of Control, as applicable,
occurs multiplied by (ii) the number of final Performance
Shares.
(4) A Participant may elect to defer the payment of Shares or cash
pursuant to Sections B(1), B(2) and B(3) above as provided in
Section F of this Award Agreement.
(C) Termination of Employment.
(1) If the Participant's employment with the Company and its
Affiliates (the "Company Group") terminates during the
Performance Period due to the Participant's death or
Disability, the Performance Shares shall vest and the final
number of Performance Shares awarded to the Participant shall
be equal to the number of Target Performance Shares as set
forth under Section
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A(1). The final Performance Shares shall be paid to the
Participant as soon as administratively practicable following
the date of the Participant's termination of employment (and
in any event no later than March 15th of the year following
the year in which the Participant's employment terminates in
Shares or in cash, as determined in accordance with Section
B(2).
(2) If the Participant's employment with the Company Group
terminates during the Performance Period by the Participant
for "Good Reason" or by the Company Group without "Cause"
(each as defined in the Employment Agreement between the
Company and the Participant in effect on the Date of Award
(the "Employment Agreement"), the Performance Shares shall
vest and the final number of Performance Shares awarded to the
Participant shall be equal to the number of Target Performance
Shares as set forth under Section A(1). The Performance Shares
shall be paid to the Participant as soon as administratively
practicable following the date of the Participant's
termination of employment (and in any event no later than
March 15th of the year following the year in which the
Participant's employment terminates) in Shares or in cash, as
determined in accordance with Section B(2).
(3) In the event the Participant's employment with the Company
Group is terminated by reason of the Participant's Retirement
on or prior to the last day of the Performance Period, the
Participant shall be deemed to remain employed by the Company
Group through the last day of the Performance Period, for the
purposes of this Award Agreement, and the final number of
Performance Shares actually awarded at the end of the
Performance Period, if any, shall be determined based on both
the number of months during the Performance Period in which
the Participant is employed and the level of the Performance
Measure attained and shall equal the sum of:
(A) (i)(x) the Target Performance Share Grant, divided by
(y) the number of months in the Performance Period,
multiplied by (ii) the number of months transpired
between the first day of the Performance Period and the
last day of the month in which the termination occurred,
multiplied by (iii) the applicable ROCE Performance
Leverage Factor set forth on Exhibit A; and
(B) (i)(x) the Target Performance Share Grant divided by (y)
the number of months in the Performance Period,
multiplied by (ii) the number of months transpired
between the first day of the Performance Period and the
last day of the month in which the termination occurred,
multiplied by
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(iii) applicable EPS Performance Leverage Factor set
forth on Exhibit A.
Payment of the final Performance Shares shall be made in
accordance with Sections B(1) and (2) of this Award Agreement.
(4) If the Participant's employment with the Company Group
terminates during the Performance Period for any reason other
than as set forth in Sections C(1), C(2) or C(3), the
Performance Shares shall be cancelled and the Participant
shall not be entitled to receive any payments with respect to
the Performance Shares.
(D) Change of Control. Notwithstanding any provision contained in the
Plan or this Award Agreement to the contrary, upon a Change of
Control prior to the Participant's termination of employment, the
Performance Shares shall vest and the Participant shall be awarded a
number of Performance Shares equal to the Target Performance Share
Grant. The Performance Shares shall be paid in accordance with
Section B(2) on (or as soon as administratively practicable
following) the effective date of the Change of Control.
(E) Transferability. Performance Shares may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other
than by will, the laws of descent and distribution or as otherwise
permitted under Section 9.6 of the Plan. Further, a Participant's
rights under the Plan shall be exercisable during the Participant's
lifetime only by the Participant or in the event of the
Participant's legal incapacity, the Participant's legal guardian or
representative.
(F) Deferral Election.
(1) Deferral Elections. The following rules shall apply to any
deferral elections made by the Participant:
a. The Participant may elect to defer all or any portion of
the Shares or cash he would otherwise receive pursuant
to Sections B(1), B(2) and B(3) of this Award Agreement
by completing and submitting a deferral election form
(in a form provided by the Company) no later than June
30, 2007 or such other time determined by the Company.
b. Deferral elections shall continue in effect until a
written election to revoke or change such deferral
election is received by the Company, except that a
written election to revoke or change such deferral
election must be made no later than June 30, 2007 or
such other time determined by the Company.
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(2) Distributions Pursuant to Deferral Elections. Any Shares or
cash (including any gains or losses resulting from the
investment of cash during the deferral period and any credits
corresponding to dividends pursuant to Section (F)(6))
deferred under this Award Agreement shall be distributed in a
single lump-sum distribution on the last business day of the
month following the month in which the earliest of the
following events occurs (or as soon as administratively
practicable thereafter):
(i) the Participant's "Separation from Service" (as
defined under Section 409A of the Code and the
regulations and guidance promulgated thereunder
("Section 409A");
(ii) a fixed dated specified by the Participant at the
time the Participant makes a deferral election,
which date may not be prior to the fifth (5th)
anniversary of the Payment Date;
(iii) the Participant's Disability (as provided in
Section F(3) below); or
(iv) the Participant's death.
Share deferrals shall be paid in Shares and cash deferrals
shall be paid in cash.
(3) Disability. At the time that a Participant elects to defer the
receipt of Shares or cash pursuant to Section F(1) above, the
Participant shall make an election with respect to the
treatment of the deferred Shares or cash in the event of his
or her Disability. The Participant may elect (x) to receive
distribution of the deferred Shares or cash in the event of
his Disability, or (y) notwithstanding his or her Disability,
to receive distribution of the deferred Shares or cash upon
the occurrence of an event set forth in Subsections
F(2)(a)(i), (ii) or (iv) above.
(4) Notwithstanding anything to the contrary in this Award
Agreement or the Plan, to the extent that the Participant is a
"Specified Employee" (as defined under Section 409A) as
determined by the Committee in accordance with the procedures
it adopts from time to time, no payment or distribution of any
amounts under this Section F may be made before the first
business day following the six (6) month anniversary from the
Participant's Separation from Service or, if earlier, the date
of the Participant's death.
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(5) Unforeseeable Emergency. The Committee may, in its sole and
absolute discretion and subject to the requirements and
restrictions under Section 409A, make a partial or total
distribution of the Shares or cash deferred by a Participant
upon the Participant's request and a demonstration by the
Participant of an "Unforeseeable Emergency" (as defined in
Section 409A).
(6) Investments; Dividends. All cash deferrals shall be deemed
invested in Shares based on the Fair Market Value of the
Shares on the Payment Date. During the period of deferral, the
Participant's deferral account shall be credited with regular
dividends paid with respect to the deferred Shares. All cash
dividends shall be deemed reinvested in Shares based on the
Fair Market Value of the Shares on the date the dividend is
paid.
(7) Change of Control. Notwithstanding anything to the contrary in
the Plan or Award Agreement, no provision of this Section F
may be amended or modified during the two (2) year period
following a Change of Control.
(8) Terms and Conditions of Deferrals. The deferrals made pursuant
to this Section F shall be subject to such other terms and
conditions determined by the Committee and set forth in a
deferral election form and related documents.
(G) Miscellaneous.
(1) The Plan provides a complete description of the terms and
conditions governing Awards. This Award Agreement and the
rights of the Participant hereunder are subject to the terms
and conditions of the Plan, as amended from time to time, and
to such rules and regulations as the Committee may adopt under
Plan. If there is any inconsistency between the terms of this
Award Agreement and the terms of the Plan, the Plan's terms
shall completely supersede and replace the conflicting terms
of this Award Agreement.
(2) The Committee shall have the right to impose restrictions on
any Shares acquired pursuant to Performance Shares as it deems
necessary or advisable under applicable securities laws,
and/or the rules and regulations of any stock exchange or
market upon which such Shares are then listed and/or traded.
It is expressly understood that the Committee is authorized to
administer, construe, and make all determinations necessary or
appropriate to the administration of the Plan and this Award
Agreement, all of which shall be binding upon the Participant.
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(3) The Committee may terminate, amend, or modify the Plan and/or
this Award Agreement at any time; provided, however, that no
such termination, amendment, or modification may adversely
affect, in any material respect, the Participant's rights
under this Award Agreement, without the written consent of the
Participant.
(4) Payments contemplated with respect to the Performance Shares
(other than pursuant to Section F) are intended to comply with
the short-term deferral exemption under Section 409A.
Notwithstanding the forgoing, or any provision of the Plan or
this Award Agreement, if the Company determines that such
exemption is not applicable to the Performance Shares, or any
provision of this Award Agreement or the Plan contravenes
Section 409A or could cause the Participant to incur any tax,
interest or penalties under Section 409A, the Committee may,
in its sole discretion and without the Participant's consent,
modify such provision to (i) comply with, or avoid being
subject to, Section 409A, or to avoid the incurrence of
additional taxes, interest and penalties under Section 409A,
and (ii) to maintain, to the maximum extent practicable, the
original intent and economic benefit to the Participant of the
applicable provision without materially increasing the cost to
the Company or contravening the provisions of Section 409A.
This Section G(4) does not create an obligation on the part of
the Company to modify the Plan or this Award Agreement and
does not guarantee that the Performance Shares will not be
subject to interest and penalties under Section 409A.
(5) Delivery of the Shares underlying the Performance Shares upon
settlement is subject to the Participant satisfying all
applicable federal, state, local and foreign taxes (including
the Participant's FICA obligation). The Company shall have the
power and the right to deduct or withhold from all amounts
payable to the Participant pursuant to the Performance Shares,
or require the Participant to remit to the Company, an amount
sufficient to satisfy any applicable taxes required by law.
(6) This Award Agreement shall be subject to all applicable laws,
rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may
be required or the Committee determines are advisable. The
Participant agrees to take all steps the Company determines
are necessary to comply with all applicable provisions of
federal and state securities law in exercising his or her
rights under this Award Agreement.
(7) All obligations of the Company under the Plan and this Award
Agreement, with respect to the Awards, shall be binding on any
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successor to the Company, whether the existence of such
successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially
all of the business and/or assets of the Company.
(8) To the extent not preempted by federal law, this Award
Agreement shall be governed by, and construed in accordance
with, the laws of the State of New Jersey.
(H) Acceptance and Acknowledgement of Award. The financial targets set
forth on Exhibit A and as outlined in the Performance Share Guide
must remain confidential. The information in both documents should
not be discussed with, shared with, photocopied or distributed to
others. Participation in the Plan and the details of the Award are
highly confidential and may not be discussed by a Participant with
anyone other than the Participant's spouse or immediate family or
financial or legal advisors. Breach of this confidentiality
condition could affect the amount of a Participant's actual award.
By signing and returning this Award Agreement, the Participant is
agreeing to all of the terms contained in this Award Agreement,
including, but not limited to, the terms related to confidentiality.
If the Participant desires to refuse the Award, the Participant must
notify the Company in writing. Such notification should be sent to
CIT Group Inc., Human Resources thirty (30) days after receipt of
this Award Agreement.
IN WITNESS WHEREOF, this Award Agreement has been executed by the Company
by one of its duly authorized officers as of the Date of Award.
CIT Group Inc.
By:
--------------------------------
Name:
Title:
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Participant's Signature
Date (month/day/year)
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Exhibit A
Performance Leverage Factor Grids
PERFORMANCE LEVERAGE FACTOR GRID
Return on Corporate Equity (ROCE) (3-Year Average)
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ROCE ROCE
Performance Performance
Measure* Leverage Factor
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Minimum 35%
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50%
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60%
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Maximum 75%
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Diluted Earnings Per Share (EPS) (Compounded Annual Growth)
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EPS EPS
Performance Performance
Measure* Leverage Factor
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Minimum 25%
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37%
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50%
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63%
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Maximum 75%
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* For the purpose of this Award Agreement the term "Performance Measure" shall
have the same meaning as "Performance Target" in the Plan.
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