Exhibit 99.1
EMPLOYMENT AGREEMENT
AGREEMENT by and among CIT Group Inc. a Delaware corporation (the
"Company") and Xxxxxxx X. Xxxx (the "Executive") dated as of the 29th day of
August, 2006.
WHEREAS, the Company desires to continue to employ the Executive in
accordance with the following terms and conditions, and the Executive desires to
be so employed.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Effective Date. The "Effective Date" shall mean September 3 2006.
2. Term. The Company hereby agrees to employ the Executive, and the
Executive hereby agrees to be employed by the Company subject to the terms and
conditions of this Agreement, for the period of thirty-six (36) months
commencing on the Effective Date (the "Term"). This Employment Agreement and the
Term may be extended for one (1) or more additional periods by written agreement
signed by the parties hereto at any time prior to the end of the term in effect.
The Company or the Executive, as applicable, shall give notice no later than
thirty (30) days before the end of the Term (or extended term) of its or his
intent not to extend the Agreement.
3. Terms of Employment.
(a) Position and Duties.
(i) During the Term the Executive shall serve as Chairman and Chief
Executive Officer with such authority, duties and responsibilities as are
commensurate with such positions and as may be consistent with such positions,
reporting directly to the Board of Directors of the Company (the "Board").
Executive's services shall be performed in Livingston, New Jersey and/or New
York, New York.
(ii) During the Term, and excluding any periods of vacation and sick
leave to which the Executive is entitled, the Executive agrees to devote
substantially all of his attention and time during normal business hours to the
business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Executive hereunder, to use the Executive's
reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Term, it shall not be a violation of this Agreement
for the Executive to serve on civic or charitable boards or committees, or
manage personal investments, or, with the prior permission of the Board, serve
on corporate boards, so long as such activities do not significantly interfere
with the performance of the Executive's responsibilities as an employee of the
Company in accordance with this Agreement.
(b) Compensation.
(i) Base Salary. During the Term, the Executive shall receive an
annual base salary ("Annual Base Salary"). Initially, the Annual Base Salary
shall be $800,000.00. Thereafter, the Annual Base Salary shall be reviewed at
the time that the salaries
of all of the executive officers of the Company are reviewed. Any increase in
Annual Base Salary shall not serve to limit or reduce any other obligation to
the Executive under this Agreement. Annual Base Salary shall not be reduced
after any such increase or otherwise and the term Annual Base Salary as utilized
in this Agreement shall refer to Annual Base Salary as so increased.
(ii) Annual Bonus. For each calendar year ending during the Term,
the Executive shall be entitled to an annual cash bonus pursuant to the
Company's incentive plans and programs ("Annual Bonus"). Performance targets and
criteria for payment of the Annual Bonus shall be established by the
Compensation Committee of the Board pursuant to EPS, XXX, Net Income and other
guidelines promulgated in good faith after consulting with the Executive. The
Target Bonus, as used herein, shall be not less than 200 percent of the
Executive's Base Salary.
(iii) Incentive Awards. During the Term, the Executive shall be
eligible to participate in annual and long-term incentive plans applicable to
the senior-most executives of the Company. Performance targets and criteria for
any awards shall be determined in good faith by the Compensation Committee of
the Board after consulting with the Executive.
(iv) Other Benefits. During the Term, the Executive shall be
entitled to participate in all employee pension, welfare, perquisites, fringe
benefit, and other benefit plans, practices, policies and programs generally
applicable to the senior most executives of the Company in substantially
comparable positions as the Executive at a level appropriate to his position. In
addition, the Executive shall be entitled to participate in any supplemental
and/or excess retirement plans available to similarly situated executives of the
Company, and in the Company's Executive Retirement Plan, and retiree medical and
life insurance plans existing on the Effective Date, at economic levels at least
equal to the levels of the senior-most executives of the Company.
(v) Expense Reimbursement. During the Term, the Executive shall be
entitled to receive prompt reimbursement for all expenses incurred by the
Executive in accordance with the Company's expense reimbursement policies.
(vi) Vacation. During the Term, the Executive shall be entitled to
paid vacation in accordance with the plans, policies, programs and practices of
the Company as in effect with respect to the senior executives of the Company.
(vii) Additional Benefits. In addition to the benefits described
above, the Company shall provide the following additional benefits to the
Executive during the Term:
(A) Financial Planning. The Company shall reimburse the
Executive for up to $25,000 annually for tax advice, financial counseling and
for accounting fees incurred by the Executive.
(B) Car and Driver. The Executive shall be entitled to the use
of a car owned by the Company and the services of a driver employed by the
Company.
(C) Air Travel. When traveling on Company business, the
Executive shall be authorized for security reasons to travel on the Company's
corporate aircraft. When traveling for personal reasons, the Executive shall be
authorized to travel on the Company's corporate aircraft if the Company's
security provider determines the Executive's use of the Company's corporate
aircraft is necessary for security reasons. The cost of the Executive's personal
travel on the Company's corporate aircraft shall be imputed to the Executive as
income.
4. Termination of Employment.
(a) Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death during the Term. If the Company
determines in good faith that the Disability of the Executive has occurred
during the Term (pursuant to the definition of Disability set forth below), it
may give to the Executive written notice in accordance with Section 12(a) of
this Agreement of its intention to terminate the Executive's employment. In such
event, the Executive's employment with the Company shall terminate effective on
the 30th day after receipt of such notice by the Executive (the "Disability
Effective Date"), provided that, within the 30 days after such receipt, the
Executive shall not have returned to full-time performance of the Executive's
duties. For purposes of this Agreement, "Disability" shall mean the absence of
the Executive from the Executive's duties with the Company on a full-time basis
for 180 consecutive business days as a result of incapacity due to mental or
physical illness which is determined to be total and permanent by a physician
selected by the Company or its insurers and acceptable to the Executive or the
Executive's legal representative.
(b) Cause. The Company may terminate the Executive's employment during the
Term for Cause. For purposes of this Agreement, "Cause" shall mean:
(i) the willful and continued failure of the Executive to perform
substantially the Executive's duties with the Company or one of its affiliates
(other than any such failure resulting from incapacity due to physical or mental
illness), after a written demand for substantial performance is delivered to the
Executive by the Board, which specifically identifies the manner in which the
Board believes that the Executive has not substantially performed the
Executive's duties, or
(ii) the willful engaging by the Executive in illegal conduct or
gross misconduct which is materially and demonstrably injurious to the Company
or its affiliates, or
(iii) conviction of a felony or guilty or nolo contendere plea by
the Executive with respect thereto; or
(iv) a material breach of Section 8 of this Agreement.
For purposes of this provision, no act or failure to act on the part of the
Executive shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon express authority given pursuant to a
resolution duly adopted by the Board with respect to such act or omission or
upon the instructions of the Board or based upon the advice of counsel for the
Company shall be conclusively presumed to
be done, or omitted to be done, by the Executive in good faith and in the best
interests of the Company.
(c) Good Reason. The Executive's employment may be terminated by the
Executive for Good Reason. For purposes of this Agreement, "Good Reason" shall
mean in the absence of a written consent of the Executive:
(i) the assignment to the Executive of any duties materially
inconsistent with the Executive's position (including status, offices, titles
and reporting requirements), authority, duties or responsibilities as
contemplated by Section 3(a) of this Agreement (provided that a promotion shall
not be Good Reason), or any other action by the Company which results in a
material diminution in such position, authority, duties or responsibilities,
excluding for this purpose an action not taken in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by the
Executive; or
(ii) any material failure by the Company to comply with any of the
provisions of Section 3(b) of this Agreement, other than failure not occurring
in bad faith and which is remedied by the Company promptly after receipt of
notice thereof given by the Executive; or
(iii) the Company's requiring the Executive to be based at any
office or location more than 50 miles from that provided in Section 3(a)(i)
hereof; or
(iv) any purported termination by the Company of the Executive's
employment otherwise than as expressly permitted by this Agreement; or
(v) the failure of the Company to offer to renew this Agreement on
the terms and conditions (including payment of Annual Base Salary and
participation in incentive plan and benefit programs) at least as favorable as
in the final full calendar year of this Agreement, unless, at the time of a
failure to renew this Employment Agreement, the Executive has reached the age of
65 and can be lawfully required to retire; or
(vi) any failure by the Company to comply with and satisfy Section
10(b) of this Agreement.
(d) Notice of Termination. Any termination by the Company for Cause, or by
the Executive for Good Reason, shall be communicated by Notice of Termination to
the other party hereto given in accordance with Section 12(a) of this Agreement.
For purposes of this Agreement, a "Notice of Termination" means a written notice
which (i) indicates the specific termination provision in this Agreement relied
upon; (ii) to the extent applicable, sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated; and (iii) if the Date of
Termination (as defined below) is other than the date of receipt of such notice,
specifies the termination date (which date shall be not more than thirty days
after the giving of such notice). The failure by the Executive or the Company to
set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company, respectively, hereunder or preclude the Executive
or the Company,
respectively, from asserting such fact or circumstance in enforcing the
Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein within 30 days of such notice, as the case may
be; (ii) if the Executive's employment is terminated by the Company other than
for Cause or Disability, the Date of Termination shall be the date on which the
Company notifies the Executive of such termination; and (iii) if the Executive's
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or the Disability
Effective Date, as the case may be.
5. Obligations of the Company upon Termination.
(a) Good Reason or Without Cause. If, during the Term, the Company shall
terminate the Executive's employment other than for Cause or the Executive shall
terminate employment for Good Reason:
(i) the Company shall pay to the Executive in cash the aggregate of
the following amounts:
(A) in a lump sum within 10 days after the Date of
Termination, the sum of (1) the Executive's Annual Base Salary through the Date
of Termination to the extent not theretofore paid, and (2) the product of (x)
the Severance Bonus defined below and (y) a fraction, the numerator of which is
the number of days in the calendar year in which the Date of Termination occurs
through the Date of Termination, and the denominator of which is 365, in each
case to the extent not theretofore paid. For purposes of this Agreement, the
term "Severance Bonus" means the greater of (I) the Executive's average Annual
Bonus over the two calendar years preceding the Date of Termination and (II) the
Executive's Target Bonus; and
(B) the amount equal to the product of (x) 3 and (y) the sum
of (I) the Executive's Annual Base Salary and (II) the Severance Bonus, which
shall be paid in accordance with Executive's normal payroll periods immediately
prior to the Date of Termination in equal installments for a period of 3 years,
subject to compliance with Section 8 of this Agreement.
(ii) all restrictions on restricted stock held by the Executive
shall lapse and all outstanding unvested stock options, stock appreciation
rights, tandem options, tandem stock appreciation rights, performance shares,
performance units, or any similar equity share or unit held by the Executive
shall vest immediately, and the Executive shall have a period of two (2) years
from the Date of Termination to exercise any outstanding stock options, except
that with respect to outstanding options granted to the Executive during 2003
and 2004 and any stock options granted to the Executive after the Effective
Date, the Executive shall have a period of five (5) years from the Date of
Termination to exercise them (provided that any such extension shall not extend
the maximum term during which any such option may be exercised beyond its
original expiration date; and
(iii) subject to compliance with Section 8, continued benefit
coverage which permits the Executive to continue to receive, for three (3) years
from the Date of Termination, at the Company's expense, life insurance and
medical, dental and disability benefits at least comparable to those provided by
the Company on the Date of Termination, provided that the Executive shall not
receive such life insurance, medical, dental or disability benefits,
respectively, if the Executive obtains other employment that provides for such
benefit(s); and
(iv) to the extent not theretofore paid or provided, the Company
shall timely pay or provide to the Executive any other amounts or benefits
required to be paid or provided or which the Executive is eligible to receive
under any plan, program, policy or practice or contract or agreement of the
Company and its affiliates (other than any severance plan, program, policy or
practice) in accordance with the terms and normal procedures of each such plan,
program, policy or practice; and
(v) to the extent permitted by applicable law, the Executive shall
be credited with two additional years of age and service credit under all
relevant Company retirement plans (including qualified, supplemental and excess
plans, including without limitation the Company's Executive Retirement Plan,
and, for the purpose of clarity, to the extent the Executive is a participant in
the cash balance arrangement under the Company's Retirement Plan, the cash
balance account will be increased as if the Executive had received two
additional years of contributions based upon the Executive's compensation as of
the Date of Termination); and
(vi) the Company shall provide the Executive with outplacement
services, not to exceed a reasonable cost, until the Executive accepts new
employment.
(b) Cause and Without Good Reason. If the Executive's employment shall be
terminated for Cause or the Executive terminates his employment without Good
Reason during the Term, this Agreement shall terminate without further
obligations to the Executive other than the obligation to pay or provide to the
Executive an amount equal to the amount described in clause (1) of Section
5(a)(i)(A) above and timely payment or provision of the benefits set forth in
Section 5(a)(iv) above, in each case to the extent theretofore unpaid.
(c) Death. If the Executive's employment is terminated by reason of the
Executive's death during the Term, this Agreement shall terminate without
further obligations to the Executive's legal representatives under this
Agreement, other than for (i) payment of a lump sum cash amount equal to the
Executive's Annual Base Salary as in effect at the time of the Executive's
death, (ii) payment of the amount set forth in Section 5(a)(i)(A) above; and
(iii) timely payment or provision of the benefits set forth in Section 5(a)(iv)
above. In addition, all restrictions on restricted stock held by the Executive
shall lapse and all outstanding unvested stock options, stock appreciation
rights, tandem options, tandem stock appreciation rights, performance shares,
performance units, or any similar equity share or unit held by the Executive
shall vest immediately. The payments provided for in subsections (i) and (ii) of
this Section 5(c) shall be paid to the Executive's estate or beneficiary, as
applicable, in a lump sum in cash within 30 days of the Date of Termination.
(d) Disability. If the Executive's employment is terminated by reason of
the Executive's Disability, this Agreement shall terminate without further
obligations to the Executive, other than for (i) payment of a lump sum cash
amount equal to the Executive's Annual Base Salary as in effect at the time of
the Executive's disability, (ii) payment of the amount set forth in Section
5(a)(i)(A) above (payable to the Executive in a lump sum in cash within 30 days
of the Date of Termination); and (iii) timely payment or provision of the
benefits set forth in Section 5(a)(iv) above. In addition, all restrictions on
restricted stock held by the Executive shall lapse and all outstanding unvested
stock options, stock appreciation rights, tandem options, tandem stock
appreciation rights, performance shares, performance units, or any similar
equity share or unit held by the Executive shall vest immediately. To the extent
permitted by applicable law and in accordance with the Company's Long-Term
Disability plan, the Executive shall continue to accrue age and service credit
through retirement for purposes of the Company's qualified and nonqualified
retirement plans.
(e) Retirement. If the Executive's employment is terminated by reason of
his retirement under the terms of the applicable Company retirement plan during
the Term, this Agreement shall terminate without further obligations to the
Executive other than for (i) payment of the amount set forth in Section
5(a)(i)(A) above (payable to the Executive in a lump sum in cash within 30 days
of the Date of Termination) and (ii) timely payment or provision of the benefits
set forth in Section 5(a)(iv) above.
(f) Non-exclusivity of Rights. Except as specifically provided, nothing in
this Agreement shall prevent or limit the Executive's continuing or future
participation in any plan, program, policy or practice provided by the Company
or any of its affiliates and for which the Executive may qualify, nor, subject
to Section 12(e), shall anything herein limit or otherwise affect such rights as
the Executive may have under any contract or agreement with the Company or its
affiliates. Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan, policy, practice or program of, or
any contract or agreement with, the Company or its affiliates at or subsequent
to the Date of Termination shall be payable in accordance with such plan,
policy, practice or program or contract or agreement except as explicitly
modified by this Agreement. As used in this Agreement, the terms "affiliated
companies" and "affiliates" shall include any company controlled by, controlling
or under common control with the Company.
6. Full Settlement. The Company's obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations hereunder shall
not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action which the Company may have against the Executive or
others. In no event shall the Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement and, such amounts shall
not be reduced whether or not the Executive obtains other employment. The
Company agrees to pay, to the full extent permitted by law, all legal fees and
expenses which the Executive may reasonably incur as a result of any contest
(regardless of the outcome thereof) by the Company, the Executive or others of
the validity or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including as a result of any
contest by the Executive about the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment at the applicable
Federal rate provided for in Section
7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended (the "Code"), if
the Executive prevails on any material claim made by the Executive and disputed
by the Company under this Agreement.
7. Certain Additional Payments by the Company. If at any time for any
reason any payment or distribution (a "Payment") by the Company or any other
person or entity to or for the benefit of the Executive is determined to be a
"parachute payment" (within the meaning of Section 280G(b)(2) of the Code),
whether paid or copayable or distributed or distributable pursuant to the terms
of this Agreement or otherwise in connection with or arising out of his
employment with the Company or a change in ownership or excise tax imposed by
Section 4999 of the Code (the "Excise Tax"), within a reasonable period of time
after such determination is reached the Company shall pay to the Executive an
additional payment (the Gross-Up Payment") in an amount such that the net amount
retained by the Executive, after deduction of any Excise Tax on such Payment and
any federal, state or local income or employment tax or other taxes and Excise
Tax on the Gross-Up Payment, shall equal the amount of such Payment (including
any interest or penalties with respect to any of the foregoing). All
determinations concerning the application of the foregoing shall be made by a
nationally recognized firm of independent accountants (together with legal
counsel of its choosing), selected by the Company after consultation with the
Executive (which may be the Company's independent auditors), whose determination
shall be conclusive and binding on all parties. The fees and expenses of such
accountants and counsel shall be borne by the Company. If the accounting firm
determines that no Excise Tax is payable by the Executive, it shall furnish the
Executive with an opinion that the Executive has substantial authority not to
report any Excise Tax on his Federal income tax return. In the event the
Internal Revenue Service assesses the Executive an amount of Excise Tax in
excess of that determined in accordance with the foregoing, the Company shall
pay to the Executive an additional Gross-Up Payment, calculated as described
above in respect of such excess Excise Tax, including a Gross-Up Payment in
respect of any interest or penalties imposed by the Internal Revenue Service
with respect to such excess Excise Tax.
8. Confidentiality and Competitive Activity.
(a) The Executive acknowledges that he has acquired and will continue to
acquire during the Term confidential information regarding the business of the
Company and its respective affiliates. Accordingly, the Executive agrees that,
without the written consent of the Board, he will not, at any time, disclose to
any unauthorized person or otherwise use any such confidential information. For
this purpose, confidential information means nonpublic information concerning
the financial data, business strategies, product development (and proprietary
product data), customer lists, marketing plans, and other proprietary
information concerning the Company and its respective affiliates, except for
specific items which have become publicly available other than as a result of
the Executive's breach of this agreement. Notwithstanding the foregoing, nothing
herein shall prevent Executive from responding to lawful subpoenas or court
orders without the Company's prior written consent; provided, that the Executive
shall have given the Company prior written notice of any such subpoena or court
order promptly following receipt thereof.
(b) During the time that the Executive is employed by the Company under
this Agreement and for one year after the Date of Termination (two years in the
case of a termination by the Executive without Good Reason or by the Company for
Cause), the Executive will not, without the written consent of the Board,
directly or indirectly (A) knowingly engage or be interested in (as owner,
partner, stockholder, employee, director, officer, agent, consultant or
otherwise), with or without compensation, any business in the United States
which is in competition with any line of business actively being conducted on
the Date of Termination by the Company, unless such line of business accounts
for less than ten percent (10%) of the gross revenues of the Company as of the
Date of Termination, and (B) disparage or publicly criticize the Company or any
of its affiliates. Nothing herein, however, will prohibit the Executive from
acquiring or holding not more than one percent of any class of publicly traded
securities of any such business; provided that such securities entitle the
Executive to not more than one percent of the total outstanding votes entitled
to be cast by securityholders of such business in matters on which such
securityholders are entitled to vote.
(c) During the time that the Executive is employed by the Company under
this Agreement and then for two years after the Date of Termination of the
employment of the Executive for any reason, the Executive will not, without the
written consent of the Board, directly or indirectly, hire any person who was
employed by the Company or any of its subsidiaries or affiliates (other than
persons employed in a clerical or other non-professional position) within the
six-month period preceding the date of such hiring, or solicit, entice, persuade
or induce any person or entity doing business with the Company and its
respective affiliates, to terminate such relationship or to refrain from
extending or renewing the same.
(d) The Executive hereby acknowledges that the provisions of this Section
8 are reasonable and necessary for the protection of the Company and its
respective affiliates. In addition, he further acknowledges that the Company and
its respective affiliates will be irrevocably damaged if such covenants are not
specifically enforced. Accordingly, the Executive agrees that, in addition to
any other relief to which the Company may be entitled, the Company will be
entitled to seek and obtain injunctive relief (without the requirement of any
bond) from a court of competent jurisdiction for the purposes of restraining him
from an actual or threatened breach of such covenants. In addition, and without
limiting the Company's other remedies, in the event of any breach by the
Executive of such covenants, the Company will have no obligation to pay any of
the amounts that continue to remain payable to the Executive after the date of
such breach under Section 5 hereof.
9. Change of Control.
(a) Contract Extension. In the event of a Change of Control during the
Term, the Term shall be extended to the second anniversary of the Change of
Control (such two year period, the "Change of Control Extension Period").
(b) Payment of Severance. If the Executive's employment is terminated
without Cause or by the Executive for Good Reason during the Change of Control
Extension Period, the Executive will receive the compensation and benefits
already required under the provisions of this Agreement; provided that the
payments set forth in Section 5(a)(i)(B) shall be payable in a lump sum within
30 days after the Date of Termination.
(c) Change of Control Defined. For purposes of this Agreement, a ""Change
of Control" shall be deemed to have occurred if:
(i) any "Person" (as defined below) becomes the "Beneficial Owner"
(as defined below), directly or indirectly, of securities of the Company
representing thirty-five percent (35%) or more of the combined voting power of
the Company's then outstanding securities; or
(ii) the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals who, on the
Effective Date, constitute the Board and any new director (other than a director
whose initial assumption of office is in connection with an actual or threatened
election contest, including, but not limited to, a consent solicitation,
relating to the election of directors of the Company) whose appointment or
election by the Board or nomination for election by the Company's stockholders
was approved or recommended by a vote of at least a majority of the directors
then still in office who either were directors on the Effective Date or whose
appointment, election or nomination for election was previously so approved or
recommend; or
(iii) there is consummated a merger or consolidation of the Company
or any subsidiary with any other corporation, other than (A) a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior to such merger or consolidation continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity or any parent thereof), in combination with
the ownership of any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any Subsidiary of the Company, more than
fifty percent (50%) of the combined voting power of the securities of the
Company or such surviving entity or any parent thereof outstanding immediately
after such merger or consolidation, or (B) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which no
Person is or becomes the Beneficial Owner, directly or indirectly, of securities
of the Company representing thirty-five percent (35%) or more of the combined
voting power of the Company's then outstanding securities; or
(iv) the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is consummated an agreement
for the sale or disposition by the Company of all or substantially all of the
Company's assets, other than a sale or disposition by the Company of all or
substantially all of the Company's assets to an entity, more than fifty percent
(50%) of the combined voting power of the voting securities of which are owned
by stockholders of the Company in substantially the same proportions as their
ownership of the Company immediately prior to such sale
For this purpose, (A) "Person" shall mean any person, entity or "group"
within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder (the "Exchange Act") except that such term shall not include (i) the
Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any of its
affiliates, (iii) an underwriter temporarily holding securities pursuant to an
offering of such securities, (iv) a corporation owned, directly or indirectly,
by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company,
or (v) a person or group as used in Rule 13d-1(b) under the Exchange Act; and
(B) "Beneficial Owner" shall have the meaning set forth in Rule 13d-3 under the
Exchange Act.
10. Successors.
(a) This Agreement is personal to the Executive and without the prior
written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's legal
representatives. This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.
(b) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. As used in this
Agreement, "Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
11. Representations. Executive expressly represents and warrants to the
Company that as of the date of his signing this Agreement that he is not a party
to any contract or agreement which will or may restrict in any way his ability
to perform his duties and responsibilities under this Agreement, and that he
will not after the date of signing this Agreement become a party to any contract
or agreement which will or may restrict in any way his ability to perform this
duties under this Agreement, and that the performance of his duties for the
Company will not breach any agreements with former employers.
12. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without reference to principles of conflict of
laws. The parties hereto irrevocably agree to submit to the jurisdiction and
venue of the courts of the States of New York or New Jersey, in any action or
proceeding brought with respect to or in connection with this Agreement. The
captions of this Agreement are not part of the provisions hereof and shall have
no force or effect. This Agreement may not be amended or modified otherwise than
by a written agreement executed by the parties hereto or their respective
successors and legal representatives. All notices and other communications
hereunder shall be in writing and shall be given by hand delivery to the other
party or by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Executive:
At the most recent home address on file for the Executive at the Company;
If to the Company:
0 XXX Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: General Counsel
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(b) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.
(c) The Company may withhold from any amounts payable under this Agreement
such Federal, state, or local taxes as shall be required to be withheld pursuant
to any applicable law or regulation.
(d) The Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Section 4 of this Agreement, shall not be deemed to be a waiver of
such provision or right or any other provision or right of this Agreement.
(e) From and after the Effective Date, this Agreement shall supersede any
term sheet, employment, severance or change of control agreement between the
parties or severance or change of control plan, program or policy of the Company
covering the Executive with respect to the subject matter except as expressly
provided herein.
(f) Compliance with IRC Section 409A. Notwithstanding anything herein to
the contrary, (i) if at the time of the Executive's termination of employment
with the Company the Executive is a "specified employee" as defined in Section
409A of the Code and the deferral of the commencement of any payments or
benefits otherwise payable hereunder as a result of such termination of
employment is necessary in order to prevent any accelerated or additional tax
under Section 409A of the Code, then the Company will defer the commencement of
the payment of any such payments or benefits hereunder (without any reduction in
such payments or benefits ultimately paid or provided to the Executive) until
the date that is six months following the Executive's termination of employment
with the Company (or the earliest date as is permitted under Section 409A of the
Code) and (ii) if any other payments of money or other benefits due to the
Executive hereunder could cause the application of an accelerated or additional
tax under Section 409A of the Code, such payments or other benefits shall be
deferred if deferral will make such payment or other benefits compliant under
Section 409A of the Code, or otherwise such payment or other benefits shall be
restructured, to the extent possible, in a manner, determined by the Board, that
does not cause such an accelerated or additional tax
while, to the extent possible, preserving the overall economic benefit to the
Executive of such payments or benefits. The Company shall consult with the
Executive in good faith regarding the implementation of the provisions of this
Section 12(f); provided that neither the Company nor any of its employees or
representatives shall have any liability to the Executive with respect to
thereto.
(g) Attorneys Fees. The Company shall reimburse the Executive's reasonable
attorneys fees incurred in connection with the negotiation of this Agreement in
an amount not to exceed $10,000.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors and the Company
have caused these presents to be executed in its name on its behalf, all as of
the day and year first above written.
-----------------------------------
Xxxxxxx X. Xxxx
CIT GROUP INC.
By:
-------------------------------
Xxxxxx X. Xxxxxx
Executive Vice President, General
Counsel & Secretary
