1992 STOCK INCENTIVE PLAN
PERFORMANCE-BASED RESTRICTED STOCK AGREEMENT
PBRS/RESTRICTED STOCK RETENTION AWARD
Shares of Restricted Stock are hereby awarded by The FINOVA Group Inc.
(Company), a Delaware corporation, to {1} (Employee) pursuant to the Company's
PBRS/Restricted Stock Retention Incentive Program, in accordance with the
following terms and conditions:
1. Share Award. The Company hereby awards the Employee _____ shares
(Shares) (subject to adjustment of between 0 and _____ shares, as provided
below) of Common Stock, par value $.01 per share (Common Stock) of the Company
pursuant to The FINOVA Group Inc. 1992 Stock Incentive Plan (Plan), and upon the
terms and conditions, and subject to the restrictions therein and hereinafter
set forth.
2. Restrictions on Transfer and Restriction Period. During the period
(Restriction Period) commencing on the date hereof (Commencement Date) and
terminating _______________, the Shares may not be sold, assigned, transferred,
pledged, or otherwise encumbered by the Employee, except as hereinafter
provided. The Restriction Period shall lapse as to successive installments as
follows:
On January 1 of each of the five years beginning January 1, ____, 0 to
34% of the Shares awarded in this Agreement will vest and be issued based upon
the annual performance of the Common Stock relative to the lesser of the annual
performance of the Standard & Poor's 500 Index (S&P 500), or annual performance
of the Standard & Poor's Financial Index (S&P FI), calculated as follows:
1) The Share Price is the average of the daily averages of the high and
low trading price on the New York Stock Exchange for each trading day in the
month of December of that year. The Total Annual Return (TAR) is the Share Price
percentage change for the calendar year plus the dividend yield. The TAR is
calculated each year for the Company, the S&P 500 and the S&P FI.
2) The lesser of the TAR for the S&P 500 or the S&P FI is subtracted
from the TAR for the Company (Relative Performance).
3) Shares will vest on each vesting date in accordance with the table
below:
Relative
--------
Performance (RP) No. of Shares to Vest
---------------- ---------------------
Less than 0 0
0 20% of the Shares
.0001 - .0150 20% of the Shares + [RP/.015 x (14% of the
Shares)]
Greater than .0150 34% of the Shares
If no shares vest on a vesting date, 20% of the Shares shall be forfeited and
returned to the Company.
The Executive Compensation Committee of the Board of Directors (Committee) shall
have the
authority, in its discretion, to accelerate the time at which any or all of the
restrictions shall lapse with respect to any Shares, prior to the expiration of
the Restriction Period with respect thereto, or to remove any or all of such
restrictions, whenever the Committee may determine that such action is
appropriate by reason of change in applicable tax or other law, or other change
in circumstances.
3. Termination of Employment. (a) Except as provided in subparagraph
3(b) and paragraph 8 below, if the Employee ceases to be an employee of the
Company or any subsidiary or affiliate of the Company for any reason (including,
but not limited to, death, disability, or retirement), all Shares which at the
time of such termination of employment are subject to the restrictions imposed
by paragraph 2 above shall upon such termination of employment be forfeited and
returned to the Company.
(b) Notwithstanding subparagraph 3(a) above, if the Employee ceases to
be an employee of the Company or any subsidiary or affiliate of the Company due
to retirement on or after age 65, then the Restriction Period shall lapse on
that portion of the Shares still subject to such restrictions equal to two
years' installments of such Shares at the target level (as if the RP = 0) or
such lesser amount of Shares remaining under the Award if less than two years
remain on the Restriction Period. Shares subject to the Restriction Period
scheduled to vest beyond the two year period referenced above shall not vest and
shall be forfeited to the Company, except as otherwise provided in the Plan.
4. Certificates for the Shares. The Company shall issue one or more
certificates in respect of the Shares in the name of the Employee which shall
equal the amount of the award specified herein, and shall hold each such
certificate on deposit for the account of the Employee until the expiration of
the restrictions set forth in paragraph 2 above with respect to the Shares
represented thereby. Each such certificate shall bear the following legend:
The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) contained in The FINOVA Group Inc. 1992 Stock Incentive Plan and a
Restricted Stock Agreement dated ________________. Copies of such Plan and
Agreement are on file at the offices of The FINOVA Group Inc., 0000 X. Xxxxxxx,
X.X. Box 2209, Phoenix, Arizona 85002-2209.
The Employee further agrees that simultaneously with his/her acceptance
of this Agreement, he/she shall execute one stock power covering such award
endorsed in blank for each such certificate and that he/she shall promptly
deliver such stock power to the Company.
5. Employee's Rights. Except as otherwise provided herein, the
Employee, as owner of the Shares, shall have all rights of a stockholder,
including, but not limited to, the right to vote the Shares and receive any cash
or other dividends.
6. Expiration of Restriction Period. Upon the lapse or expiration of
the Restriction Period with respect to any Shares, the Company shall remove the
restrictions provided for herein and shall issue and deliver a certificate to
the Employee in the amount of the vested Shares. The Shares as to which the
Restriction Period shall have lapsed or expired and which are represented by
such certificate shall be free of the restrictions referred to in paragraph 2
above and such certificate shall not bear thereafter the legend provided for in
paragraph 4 above. The remaining certificates shall be held on deposit by the
Company for the account of the Employee pursuant to paragraph 4 above, provided
however, that sale of vested Shares prior to cessation of employment may result
in ineligibility to receive any further awards.
To the extent permissible under applicable tax, securities, and other
laws, the Company shall gross up and satisfy Employee's income tax liability
imposed by applicable federal, state and local authorities at the highest
marginal tax rate applicable to the Employee's anticipated compensation from the
Company for the year in which such Shares become taxable.
7. Adjustments for Changes in Capitalization of Company. In the event
of any merger, reorganization, consolidation, recapitalization, stock dividend,
stock split, extraordinary distribution with respect to Common Stock or other
change in corporate structure affecting the Common Stock, during the Restriction
Period, the number of shares of Common Stock subject to restrictions as set
forth herein shall be appropriately adjusted and the determination of the Board
of Directors of the Company, or the Committee, as the case may be, as to any
such adjustments shall be final, conclusive and binding upon the Employee. Any
shares of Common Stock or other securities received, as a result of the
foregoing, by the Employee with respect to Shares subject to the restrictions
contained in paragraph 2 above also shall be subject to such restrictions and
the certificate(s) or other instruments representing or evidencing such shares
or securities shall be legended and deposited with the Company, along with an
executed stock power, in the manner provided in paragraph 4 above.
8. Effect of Change in Control. In the event of a Change in Control (as
defined in the Plan), the restrictions applicable to any Shares awarded hereby
shall lapse, and such Shares shall be free of all restrictions and become fully
vested and transferable to the full extent of the original grant, including
without limitation immediate vesting and transferability (subject to applicable
securities laws) of the maximum amount of Shares permitted hereunder, as if
maximum performance conditions or payouts were achieved.
9. Plan and Plan Interpretations as Controlling. The Shares hereby
awarded and the terms and conditions herein set forth are subject in all
respects to the terms and conditions of the Plan, which are controlling. The
Plan provides that the Committee may from time to time make changes therein,
interpret it and establish regulations for the administration thereof; provided
that no such amendment shall impair the rights of any Employee under this award
without the Employee's consent, except an amendment for purposes of compliance
with the federal securities laws. The Employee, by acceptance of this Agreement,
agrees to be bound by said Plan and such Board actions.
Shares may not be issued hereunder, delivered or redelivered, whenever
such issuance, delivery or redelivery would be contrary to law or the
regulations of any governmental authority having jurisdiction.
IN WITNESS WHEREOF, the parties have caused this Restricted Stock
Agreement to be duly executed.
Dated: ______________ THE FINOVA GROUP INC.
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ACCEPTED: By: XXXXXX X. XXXXXXXXXXX, Chairman
ATTEST:
-----------------
Employee ------------------------------
Secretary or Assistant Secretary
