Exhibit 10.32
June 4, 2002
Xxxx X. Xxxxxxxxxx
President and Chief Executive Officer
Financial Federal Corporation
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
RE: Supplemental Retirement Benefits
Dear Xxxx:
Financial Federal Corporation (the "Company") desires to provide you with a
competitive benefit upon your Retirement from serving as the Company's Chief
Executive Officer ("CEO"). The Company therefore has approved a supplemental
retirement benefit ("SERP") for you as described in this letter agreement.
In connection with the adoption of this SERP, the Company hereby grants you
100,000 "stock units" subject to the vesting requirements of this letter
agreement. One stock unit represents a hypothetical share of the Company's
common stock ("Stock Unit"). For purposes of this agreement, "Retirement"
shall mean that you cease serving as the CEO due to your employment with the
Company or a Company subsidiary having terminated for any reason (other than
due to death, Disability or by the Company or a Company subsidiary for Cause)
on or after the attainment of the age of sixty-two).
For purposes of this SERP, your Stock Units will vest at a rate of 12.5% per
year for each full year of your service as the Company's CEO starting January
1, 2002 (with vesting occurring incrementally on January 1st of each year
starting in 2003; provided, however, you are still CEO of the Company at that
time), up to a maximum of 100,000 Stock Units as shown in the following
vesting schedule:
Stock Units Total Vested
Vesting Date Vesting Stock Units
------------------------------------------
January 1, 2003 12,500 12,500
January 1, 2004 12,500 25,000
January 1, 2005 12,500 37,500
January 1, 2006 12,500 50,000
January 1, 2007 12,500 62,500
January 1, 2008 12,500 75,000
January 1, 2009 12,500 87,500
January 1, 2010 12,500 100,000
If you voluntarily resign as CEO or your service as CEO is terminated for
"Cause" (as defined below), your unvested Stock Units at the time of your
termination of service will be forfeited to the Company; provided, further,
that your vested Stock Units shall also be forfeited to the Company if any of
the reasons for the termination for Cause was pursuant to either subsection
(c) and/or (d) below in the definition of Cause (and where for (d) the felony
related to the business of the Company).
Your unvested Stock Units will fully vest earlier upon the occurrence of any
of the following provided you are still serving as CEO by the Company on the
date of such accelerating event:
(i) a Sale of Company (which means there is a sale of all
or substantially all of the assets (exclusive of
securitized assets) or stock of the Company);
(ii) your death;
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(iii) termination of your service as CEO due to
Disability (which means a permanent and total disability
within the meaning of Section 22(e)(3) of the Code);
(iv) if your service as CEO is terminated without "Cause"
by the Company (as defined below); or
(v) if you terminate your service as CEO for "Good
Reason" (as defined below).
For purposes of this Agreement, Cause shall mean the good faith determination
by the Company in its sole discretion that your continuous service as CEO
should be terminated due to one or more of the following:
(a) You have engaged in an act or acts of gross misconduct or
negligence that have materially harmed or materially damaged the
Company. You will be notified in writing of such misconduct or
negligence and such notice will specifically reference potential
termination of service as CEO;
(b) Your repeated failure to follow the lawful instructions of the
Company following written notice. Such written notice will specifically
reference potential termination of service as CEO;
(c) You have misappropriated Company property;
(d) You have been convicted of, or plead "no contest" to, a felony; or
(e) You have exhibited a repeated inability to competently perform the
essential functions of your job which has been memorialized in the
Company's records and has resulted in material harm or material damage
to the Company.
For purposes of this Agreement, termination of your continuous service as CEO
by you for "Good Reason" shall mean your resignation of service as CEO with
the Company within thirty (30) days after the occurrence (without your
written consent) of any of the following:
(a) Any reduction (in the aggregate) in your base salary by more than
25%, unless all similarly situated executives incur the same
proportionate reduction in base salary; or
(b) A material diminishment in your position, job duties and/or
responsibilities (this shall include, but not be limited to, you no
longer serving as the CEO).
Your vested Stock Units, if any, will be paid to you in the form of the
Company's common shares. Such benefits, if any, shall be paid upon:
(i) age 62 if your service as CEO has previously
terminated as a result of a voluntary resignation or by
the Company for Cause (except if any of the reasons for
the termination for Cause was pursuant to either
subsection (c) and/or (d) in the definition of Cause
(and where for (d) the felony related to the business of
the Company).
(ii) the date your service as CEO terminates due to your
Retirement after reaching age 62;
(iii) your death;
(iv) a Sale of Company;
(v) the date your service as CEO is terminated without
Cause by the Company or due to your resignation with
Good Reason; or
(vi) your Disability.
If you die prior to commencement of benefits and you were still CEO at the
time of your death, then the person who is your spouse on the date of this
letter ("Spouse") (or your Beneficiary if your Spouse has predeceased you or
is not married to you at the time of your death) shall receive the benefit
you would have received had there been a Sale of Company on the day before
death. "Beneficiary" shall be the individual(s) designated by you on a form
accepted by the Compensation Committee, or if none, your estate.
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Stock Units are not shares of the Company. You are not entitled to any
stockholder rights (including but not limited to any rights to receive
dividends or vote shares) with respect to your Stock Units prior to
settlement of shares of Company common stock. If after the date of the
SERP's adoption, the outstanding shares of the Company's common stock are
increased or decreased or changed into or exchanged for a different number or
kind of shares of stock or other securities of the Company or of another
corporation through reorganization, merger, consolidation, recapitalization,
reclassification, stock split, split-up, combination or exchange of shares or
declaration of any dividends payable in Common Stock, the Company shall
appropriately adjust the number of Stock Units (to the nearest whole number)
and such adjustments shall be effective and binding for all purposes of this
SERP.
You are a general unsecured creditor with respect to the payment of any
benefit hereunder and any such benefit is subject to the claims of the
Company's creditors. You may not assign this benefit.
The delivery of any benefits to you or your Beneficiary under this SERP shall
be subject to your (or your Beneficiary's) timely satisfaction of any
required tax withholding obligations as required by the applicable laws then
in effect.
This letter agreement may only be amended by written agreement between you
and the Company.
We are pleased to provide you with his valuable benefit in recognition of
your exceptional services to the Company.
Sincerely,
Xxxx X. Xxxxxxx
Senior Vice President and Secretary
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