EXHIBIT 10.V
SEVERANCE AGREEMENT AND RELEASE
This Severance Agreement and Release (this "Agreement") is made this
second day of January, 2002, between FINOVA Capital Corporation (the "Company")
and Xxxx Xxxxxx, III ("Employee").
In consideration of the sums to be paid and the other promises of the
parties provided below, the parties agree as follows:
I. GENERAL
-------
I.1. Severance Date. Employee's Severance Date is January 2, 2002.
--------------
I.2. Time for Acceptance. Employee may accept this Agreement within
-------------------
forty-five (45) days from the date of this Agreement. If it is not accepted
within this time period, the Company's offer of these terms shall be
automatically revoked.
I.3. Revocation of Acceptance. Employee may revoke acceptance of this
------------------------
Agreement provided Employee does so in writing, addressed to Xxxxxxx X. Xxxxx,
Xx. Vice President-Chief Administrative Officer, FINOVA Capital Corporation,
0000 X. Xxxxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxx 00000-0000, (telecopier
480/636-6757), which revocation must be delivered by hand or telecopier within
seven (7) days of the date Employee signs a counterpart of this Agreement.
I.4. Effective Date of Agreement. The effective date of this Agreement
---------------------------
will be at 8:00 a.m. on the eighth (8th) day after the Company receives
Employee's signed Agreement, provided Employee has not previously revoked
acceptance on or before that date.
II. BASIC TERMINATION BENEFITS
--------------------------
The Basic Termination Benefits contained in this Part II will be provided
to Employee regardless of whether Employee enters into this Agreement, subject
to customary payroll deduction in accordance with Company policy.
II.1. Salary. On or about January 15, 2002, the Company will direct
------
deposit, mail or deliver to Employee any salary, wages or other compensation
due Employee through the Severance Date. This payment will also include the
January 2, 2002 bonus payment due employee of $125,000.
II.2. Vacation. The check noted in Section II.1 above will include
--------
payment for any unused current and carry-over year vacation days earned through
the Severance Date, according to Company policy.
II.3. Insurance and Consolidated Omnibus Budget Reconciliation Act
------------------------------------------------------------
(COBRA) Benefits. Employee's medical (including Executive Medical), vision,
-------
dental and life insurance coverages in effect on the Severance Date will remain
intact through the end of the month in which Severance occurs. Employee may make
any changes to Employee's coverages under the
Company's various insurance plans only as permitted by such plans or as
otherwise required by law. Employee shall continue to be responsible for
Employee's share of the premiums, co-payments, deductibles and other Employee
charges attributable to such coverage as if Employee had remained in active
service. Following the end of the month in which Severance occurs, Employee,
Employee's spouse and dependents have rights to continue health care coverage
at their expense but at the Company's group rates, pursuant to the federal law
commonly known as COBRA, for the period permitted by that law. Employee will
receive a separate letter more fully describing COBRA benefits within fourteen
(14) days of the Severance Date. Employee may continue other insurance benefits
(such as life insurance) or convert them to a personal policy, in either case
only to the extent permitted in such plans, if at all.
II.4. Vested Benefits. Nothing in this Agreement shall limit Employee's
---------------
rights, if any, to vested and accrued benefits under the following plans, as
such plans may be amended or terminated by the Company from time to time:
a. The FINOVA Capital Corporation Pension Plan, the Supplemental
Executive Retirement Plan or any other supplemental or other
retirement plan.
b. The FINOVA Capital Corporation Savings Plan (401(k) plan),
including the former Employee Stock Ownership Plan (ESOP).
c. Claims Employee may have with respect to awards or amounts under
The FINOVA Group Inc. 1992 Stock Incentive Plan.
Employee may exercise rights and obtain payments and benefits pursuant to those
plans, as they may be amended from time to time. Nothing in this Agreement,
however, shall modify or amend any provisions of those plans or create rights
of Employee to participate in those plans or to receive any benefits
thereunder, other than those to which Employee is otherwise entitled to receive.
III. SEVERANCE BENEFITS
------------------
The following Severance benefits shall be provided to Employee in exchange
for acceptance and honor of this Agreement, subject to customary payroll
deduction in accordance with Company policy.
III.1. Severance Pay. Employee shall be paid a lump-sum cash payment
-------------
equal to Seven Hundred Thousand and no/100ths dollars ($700,000.00), less any
applicable taxes.
III.2. Insurance Benefits. Upon completion and return of the applicable
------------------
COBRA or similar enrollment paperwork, the Company will pay any applicable
premiums for medical, dental and vision insurance COBRA continuation coverage
for the Employee (and the Employee's covered spouse and eligible dependents)
through the 12th month anniversary of the end of the calendar month in which
the Severance Date occurs, for the coverage in effect as of the Severance Date
(and for any additional children born or adopted between then and the Severance
Date). The period during which the Company pays the Employee's medical
insurance COBRA premiums will not extend the period that such coverage is
available. The Employee must contact the Company Benefits Assistant within ten
(10) days after the Employee or spouse or dependents
-2-
become enrolled in another group health plan. The Company will also continue to
provide executive medical coverage substantially similar to that provided by
the Company immediately preceding the Severance Date.
III.3. Outplacement Services. The Company will provide Executive Level
---------------------
outplacement services with a provider selected by the Company, to be used
within 12 months of the Severance Date.
III.4. Financial Counseling. The Company shall pay for financial
---------------------
counseling services similar to those available to the Employee for twelve
months following the Severance Date.
III.5. Life Insurance. The Company shall pay twelve months of premiums
--------------
for life insurance benefits at the Employee's elections for 2001.
III.6. PBRS. Employee shall continue to be eligible to participate in the
-----
settlement of Employee's PBRS claims to the same extent previously offered to
Employee.
III.7. Laptop computer. Employee shall be entitlted to retain the laptop
----------------
computer issued to Employee, subject to the provisions of Section IV.4,
relating to confidential information.
III.8. Executive Physical. Employee shall continue to be eligible to
-------------------
participate in the Executive Physical program for twelve months from the
Severance Date.
IV. COVENANTS AND ADDITIONAL TERMS
------------------------------
IV.1. Timing of Severance Benefits. The Company will deliver or mail a
----------------------------
check to Employee for the amounts to be paid under Sections III.1 on or about
the next payroll that occurs after the effective date of this agreement,
subject to normal payroll cutoff dates. If this Agreement is received no later
than January 4, 2002, payment will be made on January 15, 2002, assuming the
Agreement is not revoked.
IV.2. Form W-2 or 1099. FINOVA will issue to the Internal Revenue
----------------
Service ("IRS") and the Employee's state appropriate Forms W-2 or 1099 for all
monies or other benefits paid to Employee under this Agreement.
IV.3. Expense Reimbursement/Offset Rights. If Employee has incurred
-----------------------------------
expenses prior to the Severance Date in accordance with Company policies and
with proper approvals, and provided Employee documents such expenses on a
properly completed expense reimbursement in a form approved by the Company, the
Company shall reimburse Employee for such authorized expenses. Notwithstanding
anything in this Agreement to the contrary, to the extent permitted by law, the
Company may direct any expense reimbursements, Severance pay or other amounts
due Employee to any person or entity (including the Company) to which any
expenses or other amounts are owed by the Employee, including without
limitation any credit card companies or other vendors which have extended
credit to the Employee through Company-
-3-
sponsored programs. The ability of the Company to do so shall not
relieve the Employee of Employee's obligation to pay any such vendor, except to
the extent actually applied to the account balance.
IV.4. Confidentiality of FINOVA Information. Employee agrees not to
-------------------------------------
disclose, duplicate, use or otherwise appropriate any information that is
confidential or proprietary to the Company, except as otherwise required by
law. Confidential or proprietary information includes but is not limited to
computer programs, applications, systems, techniques, policies, strategies,
financial information, customer information or lists, methods of doing business
or any other information Employee has learned or obtained during the course of
employment with the Company or any of its predecessors. Upon Severance,
Employee shall immediately turn over to the Company all Company property and
other materials generated by Employee during employment or used by Employee in
connection with employment at the Company or any of its predecessors, including
copies thereof, in Employee's possession or control except as noted in Section
III.7 above. Employee represents and understands that Employee is not entitled
to receive any amounts under this Agreement until all confidential and
proprietary information within Employee's possession or control is returned to
the Company. Employee agrees not to discuss FINOVA business or the terms of
this Agreement with the media.
IV.5. Confidentiality of This Agreement. Employee agrees not to disclose
---------------------------------
the terms of this Agreement to anyone other than Employee's attorney,
accountant or other professional advisors, or Employee's family members,
requiring any of them to also keep these terms confidential, except as required
by law.
IV.6. Entire Agreement. Employee agrees that Employee is not relying on
----------------
any representations, promises, statements or agreements not contained in or
incorporated by reference into this Agreement or in the other written materials
furnished in connection with this Agreement or Employee's Severance. Employee
agrees that this Agreement, including the escrow agreement, and any documents
incorporated by reference are all-inclusive and that no additional oral or
written representations, promises or agreements exist with the Company, the
persons or entities referenced in the release paragraphs below or any one else
concerning the subject matter hereof. This Agreement can not be modified,
amended, terminated or otherwise changed unless it is done pursuant to a
written document or documents signed by both the Employee and the Company's Sr.
Vice President-Chief Administrative Officer (currently Xxxxxxx X. Xxxxx) or
other person authorized by the Company's Chief Executive Officer.
IV.7. Advice of Counsel. Employee acknowledges that Employee has been
-----------------
advised to consult with an attorney to review the terms and legal effect of
this Agreement, including the release, at Employee's expense, and that Employee
has been given a sufficient opportunity to do so to the extent Employee
believes it appropriate.
IV.8. No Other Amounts or Benefits Due Employee. Employee acknowledges
-----------------------------------------
that there are no other sums due Employee for salary, overtime, vacation, sick
pay, severance pay, change-in-control pay, bonuses or other compensation or
benefits by the Company or any of its predecessors or their affiliates except
for: (a) the Basic Termination Benefits set forth in Part II, (b) the Severance
Benefits, (c) any compensation to be paid prior to the Severance Date, (d)
Employee's vested and accrued benefits (if any), as discussed more fully in
Section II.4 above, and
-4-
(e) rights to indemnification and directors' and officers' liability
insurance pursuant to the Company's organizational documents, written agreement
or otherwise. Without limitation, Employee acknowledges that there are no other
amounts due Employee pursuant to Employee's Compensation Agreement and Release
dated March 17, 2001.
IV.9. Resignation from All Positions. Employee hereby resigns as of the
------------------------------
Severance Date from all positions Employee holds with the Company and all of
its affiliates, plans and programs, including without limitation any positions
as a director, officer and committee member. Employee agrees to execute the
resignation in the form attached hereto to more fully acknowledge this
resignation.
IV.10. No Solicitation. Employee agrees not to directly or indirectly
---------------
solicit for employment any FINOVA employees for one year from the Severance
Date. This prohibition includes directing others to solicit FINOVA employees,
either for the benefit of Employee, Employee's subsequent employer, or
otherwise.
V. RELEASE FROM LIABILITY
----------------------
V.1. Release :
-------
a. Subject to the terms of this Agreement and in consideration of the
Severance Benefits set forth above, Employee voluntarily and irrevocably
(except for the seven (7) day revocation period noted above) releases and
discharges the Company, its predecessors, their respective affiliates, and
their respective stockholders, directors, officers, employees, plan
fiduciaries, agents, successors and assigns (collectively, "Released Parties")
from and against any and all claims, obligations, debts, demands, judgments, or
causes of action of any kind whatsoever, known or unknown, actual or
contingent, whether brought at law, in equity or otherwise, based on tort,
contract, statute, or on any other basis, which Employee has or may have
against any of them or liabilities they may have to Employee (collectively,
"Claims"), which arise from or are related to Employee's employment or
relationship with the Company or any other Released Party, Employee's
separation from employment from any of them, or any other matter, cause or
thing whatsoever which may have occurred involving Employee and any Released
Party prior to the date of Employee's acceptance of this Agreement. This
release includes all Claims for equitable relief, actual, compensatory,
consequential, punitive, special, multiple or other damages, expenses
(including without limitation attorney's fees and court costs), and all other
reimbursements or charges of any kind. Employee hereby waives any remedy or
recovery that may be sought on Employee's behalf by any government agency or
other person, to the fullest extent permitted by law.
b. This release includes without limitation any and all Claims Employee
has or may have against the Company or any other Released Party arising under
any federal, state, local or foreign statute, common or other law, including
without limitation those relating to discrimination of any type, unfair
employment practices, sexual or other harassment, the Age Discrimination in
Employment Act of 1967, the Americans With Disabilities Act, the Civil Rights
Acts of 1866, 1871, 1964 and 1991, the Equal Pay Act of 1963, the Employee
Retirement Income Security Act of 1974, the Internal Revenue Code of 1986, the
Fair Labor Standards Act of 1938, the Family and Medical Leave Act of 1993, the
Labor Management Relations Act of 1947, the National
-5-
Labor Relations Act, the Rehabilitation Act of 1973, and any other
employment-related laws and regulations, as they may be amended from time to
time, as well as all other Claims Employee has or may have, including without
limitation misrepresentation, fraud, duress, unfair dealing, wrongful
termination, infliction of emotional distress, breach of fiduciary or other
duty, invasion of privacy, failure to supervise or train, defamation, breach of
contract, interference with contract, and all other causes of action of any
kind, by whatever name known.
c. Employee agrees to release all such Claims, whether they are known to
Employee or unknown at this time. Employee therefore waives and releases
Employee's rights under any provision of law which states that a general
release does not extend to Claims which the person does not know or suspect to
exist in his or her favor at the time of executing the release, which if known
to him or her must have materially affected the settlement.
V.2. Continuing Rights to Enforce this Agreement. The above release
-------------------------------------------
does not limit Employee's rights to enforce the terms of this Agreement to its
fullest extent. Employee agrees, however, not to initiate or include as a Claim
in any lawsuit, arbitration or other proceeding against the Company or any
other Released Party in any court, before any governmental body, arbitration
forum or otherwise, any Claim which Employee has released above, except for an
action alleging a breach of this, but only this Agreement. In the event that
Employee or the escrow agent is required to return all or a portion of the
funds due under this agreement to or for the benefit of the Company or its
creditors, Employee shall be permitted to assert a claim against the Company
for amounts Employee can establish to be due to Employee pursuant to those
items noted in Recital A and Section II above, but no others. Employee intends
to release all other claims Employee may have against the Company at this time.
V.3. Prohibition on Other Suits/Attorney's and Expert's Fees. If
-------------------------------------------------------
Employee brings any such Claim (except one to enforce this Agreement), Employee
agrees to repay the Company an amount equal to the Severance Benefits and to pay
all of the Company's and other Released Parties' costs expenses and charges
(including without limitation their in-house and outside attorneys' and
experts' fees and expenses) incurred in defending such Claim or enforcing this
Agreement.
VI. MISCELLANEOUS
-------------
VI.1. No Admission of Liability. Employee agrees that nothing contained
-------------------------
in this Agreement or otherwise shall constitute or be construed as an admission
of any alleged liability or wrongdoing by the Company. The Company denies that
it has ever engaged in any wrongdoing of any kind with respect to Employee.
VI.2. Severability. Should any part or interpretation of this Agreement
------------
be declared by any court or arbitrator of competent jurisdiction to be illegal
or invalid, the remainder of this Agreement shall remain valid and in effect,
the invalid provision shall be deemed to conform to a valid provision most
closely approximating the intent of the invalid provision, and the invalid
provision shall not be deemed to be a part of this Agreement.
-6-
VI.3. Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of Arizona, without regard to its
choice of law principles; provided, however, to the extent that Federal laws of
the United States control interpretation or enforcement of this Agreement, such
Federal law shall control.
VI.4. Severance Pay Plan. This Agreement contains provisions greater
------------------
than those offered by The FINOVA Capital Corporation Severance Pay Plan for
Senior Executives (the "Plan"), in which the Company participates. To the extent
the provisions of this Agreement differ from the Plan, the terms of this
Agreement shall control. The remaining terms of the Plan are hereby incorporated
by reference. A copy of the Plan as currently in effect has been furnished to
Employee.
VI.5. Successors and Assigns. This Agreement is binding on and shall
----------------------
inure to benefit of the parties hereto and their respective successors, heirs,
personal representatives and assigns.
VI.6. Arbitration. The parties irrevocably agree that any disputes,
-----------
controversies or claims they may have arising out of this agreement shall be
settled by binding arbitration pursuant to the rules of the American
Arbitration Association for employment disputes. The matter shall be heard by a
single arbitrator in Maricopa County, Arizona. The arbitrator shall award the
prevailing party its costs, attorney's fees and disbursements (including those
of in-house counsel) and other damages. The decision of the arbitrator shall be
final, except as otherwise required by law.
-7-
VI.7. WAIVER OF JURY TRIAL. EMPLOYEE AND COMPANY HEREBY WAIVE THEIR
--------------------
RESPECTIVE RIGHTS TO A JURY TRIAL IN ANY PROCEEDINGS ARISING OUT OF OR RELATED
TO THIS AGREEMENT OR THE SUBJECT MATTER HEREOF.
DATED: As of the date and year first noted above.
FINOVA CAPITAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------------------
Xxxxxxx X. Xxxxx
Xx. Vice President-Chief Administrative Officer
-8-
ACCEPTANCE OF SEVERANCE AGREEMENT AND RELEASE
Between FINOVA Capital Corporation and Xxxx Xxxxxx, III, dated January 2, 2002.
I AGREE TO BE BOUND BY THE TERMS AND CONDITIONS OF THE ABOVE SEVERANCE
AGREEMENT AND RELEASE, INCLUDING THE RELEASE FROM LIABILITY INCLUDED IN THE
AGREEMENT. I HAVE CAREFULLY READ AND UNDERSTAND THE PROVISIONS OF THIS
AGREEMENT. I HAVE HAD AN OPPORTUNITY TO REVIEW THIS AGREEMENT WITH AN ATTORNEY
AND OTHER ADVISORS OF MY CHOICE, AND I HAVE BEEN ADVISED TO DO SO. I ENTER INTO
THIS AGREEMENT FREELY AND VOLUNTARILY. I INTEND TO BE LEGALLY BOUND BY THESE
TERMS. I FOREVER WAIVE MY RIGHTS TO A JURY TRIAL AND CONSENT TO BINDING
ARBITRATION. I UNDERSTAND THAT I MAY REVOKE THIS AGREEMENT AT ANY TIME WITHIN 7
DAYS OF THE DATE OF MY ACCEPTANCE OF THESE TERMS, provided I deliver by hand or
facsimile a written signed statement to Xxxxxxx X. Xxxxx, Xx. Vice
President-Chief Administrative Officer, FINOVA Capital Corporation, 0000 X.
Xxxxxxxxxx Xxxx, Xxxxxxxxxx, XX 00000-0000, (000) 000-0000, within that time
period. I have signed this release before a witness who is at least 21 years of
age.
Date: 1-2-01
Signature: /s/ Xxxx Xxxxxx
---------------
Witness Signature: /s/ Xxx Xxxx
------------
Witness Name: Xxx Xxxx
Witness Address: 0000 X. Xxxxxxxxxx Xx.
Xxxxxxxxxx, XX
THIS IS A RELEASE AND LEGAL AGREEMENT
READ CAREFULLY BEFORE SIGNING
-9-
January 2, 2002
RESIGNATION
Board of Directors
FINOVA Capital Corporation
Ladies and Gentlemen:
I hereby resign as a director, officer and/or committee member of FINOVA
Capital Corporation and all its subsidiaries or other affiliates and their
respective plans, to be effective as of the date hereof.
Signature: /s/ Xxxx Xxxxxx
---------------------------------------
Xxxx Xxxxxx, III
-10-
