Exhibit 10.38
FINANCIAL FEDERAL CORPORATION
2001 MANAGEMENT INCENTIVE PLAN
RESTRICTED STOCK AGREEMENT
Financial Federal Corporation, a Nevada corporation
(the "Company"), hereby awards shares of Restricted Stock
("Shares") to the Participant named below. The terms and
conditions of the Award are set forth in this cover sheet and the
attached Restricted Stock Agreement and in the 2001 Management
Incentive Plan (the "Plan").
Date of Award: September 28, 2005
Name of Participant: Xxxx X. Xxxxxxxxxx
Number of Shares of Restricted Stock Awarded: 17,790
Amount Paid by Participant for the Shares of Restricted Stock
Awarded: $ 0.00
Aggregate Fair Market Value of Restricted Stock on Date of Award:
$708,042
Vesting Start Date: September 28, 2005
By signing this cover sheet, you agree to all
of the terms and conditions described in the
attached Restricted Stock Agreement and in the
Plan. You are also acknowledging receipt of
this Agreement and a copy of the Plan.
Dated: September 28, 2005
Company: Participant:
By: /s/ Xxxxxx X. Xxxxx /s/ Xxxx X.Xxxxxxxxxx
------------------------- ---------------------
Xxxxxx X. Xxxxx Xxxx X. Xxxxxxxxxx
Senior Vice President and
Chief Financial Officer
By: /s/ Xxxx X. Xxxxxxx
-----------------------------------
Xxxx X. Xxxxxxx
Senior Vice President and Secretary
FINANCIAL FEDERAL CORPORATION
2001 MANAGEMENT INCENTIVE PLAN
RESTRICTED STOCK AGREEMENT
The Plan and The text of the Plan is incorporated in this
Other Agreement by this reference. You and the Company
Agreements agree to execute such further instruments and to
take such further action as may reasonably be
necessary to carry out the intent of this
Agreement. Unless otherwise defined in this
Agreement, certain capitalized terms used in this
Agreement are defined in the Plan.
This Agreement, the attached Exhibits and the Plan
constitute the entire understanding between you and
the Company regarding this Award of Restricted
Stock. Any prior agreements, commitments or
negotiations are superseded.
Award of The Company awards you the number of shares of
Restricted Restricted Stock shown on the cover sheet of this
Stock Agreement. The Award is subject to the terms and
conditions of this Agreement and the Plan.
Vesting Except as otherwise provided in this Agreement and
subject to satisfaction of the performance
conditions established for this Award by the
Company's Compensation Committee ("Performance
Conditions"), so long as you continuously serve as
the Company's Chief Executive Officer ("CEO") you
will become incrementally vested as to the number
of shares of Restricted Stock per the following.
Vesting Dates Shares Vesting
September 28, 2006 4,448
September 28, 2007 4,447
September 28, 2008 4,448
September 28, 2009 4,447
Total 17,790
However, if your continuous service as CEO is
terminated either by (i) the Company (or Parent or
Subsidiary) without Cause, (ii) death, (iii)
Disability, (iv) Retirement (where, for purposes of
this Agreement, "Retirement" shall mean your
termination of employment with the Company or a
subsidiary for any reason (other than due to death,
Disability or by the Company or a subsidiary for
Cause) on or after attainment of the age of sixty-
two), or (v) you for Good Reason, or if there is a
Sale of Company, then any unvested Restricted Stock
shall be vested in full upon such event (provided
that this Award of Restricted Stock has not been
previously forfeited due to non-satisfaction of the
Performance Conditions).
Except as otherwise provided in this Agreement, in
the event that your continuous service as CEO
ceases prior to the fourth anniversary of the
Vesting Start Date, you will forfeit to the Company
all of the shares of Restricted Stock subject to
this Award that have not yet vested as of the date
your continuous service terminates as CEO.
Notwithstanding anything to the contrary in this
Agreement, the Board of Directors, in its sole
discretion, may at any time accelerate the date
upon which any or all of this Restricted Stock
grant is vested.
Escrow The certificates for the Restricted Stock shall be
deposited in escrow with the Secretary of the
Company (or his designee) to be held in accordance
with the provisions of this paragraph. Each
deposited certificate shall be accompanied by a
duly executed Assignment Separate from Certificate
in the form attached hereto as Exhibit A. The
deposited certificates, shall remain in escrow
until such time as the certificates are to be
released or otherwise surrendered for cancellation
as discussed below. Upon delivery of the
certificates to the Company, you shall be issued an
instrument of deposit acknowledging the number of
shares of Restricted Stock delivered in escrow to
the Secretary of the Company.
All regular cash dividends, if any, on the
Restricted Stock shall be paid directly to you and
shall not be held in escrow.
The Restricted Stock held in escrow hereunder shall
be subject to the following terms and conditions
relating to their release from escrow or their
surrender to the Company, provided, however, that
the minimum number of shares released to you in any
individual release of share certificates must be at
least twenty-five (25) shares (unless the release
represents your final release of share certificates
from escrow):
* When your interest in the Restricted Stock
vests, the certificates for such vested Restricted
Stock shall be released from escrow and delivered
to you, at your request, in accordance with the
following schedule.
* The release of any vested Restricted Stock
from escrow shall be effected within thirty (30)
days following the applicable date(s) of vesting of
shares pursuant to this Agreement.
* Upon termination of your continuous service as
CEO by you for Good Reason or by the Company (or
Parent or Subsidiary) without Cause, or by death,
Disability or Retirement, or if there is a Sale of
Company, any unvested Restricted Stock shall become
vested and released from escrow within thirty (30)
days of the applicable event. Upon termination of
your continuous service as CEO for any other
reason, any unvested Restricted Stock shall be
surrendered to the Company.
Definition For purposes of this Agreement, Sale of Company
of Sale of shall mean there is a sale of all or substantially
Company all of the assets (exclusive of securitized assets)
or stock of the Company.
Definitions For purposes of this Agreement, Parent shall have
of "Parent" the meaning set forth in Section 424(e) of the
and Internal Revenue Code of 1986, as amended (the
"Subsidiary" "Code"). For purposes of this Agreement,
Subsidiary shall have the meaning set forth in
Section 424(f) of the Code.
Definition For purposes of this Agreement, Disability means a
of permanent and total disability within the meaning
"Disability" of Section 22(e)(3) of the Code.
Definition For purposes of this Agreement, Cause shall mean
of "Cause" the good faith determination by the Company (or its
Subsidiary) 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 employment;
(b) Your repeated failure to follow the
lawful instructions of the Company following
written notice. Such written notice will
specifically reference potential termination
of employment;
(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.
Definition For purposes of this Agreement, termination of your
of "Good continuous service as CEO by you for "Good Reason"
Reason" shall mean your resignation of employment with the
Company or its Subsidiary 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).
Code Section You represent and warrant that you understand the
83(b) Federal, state and local income tax consequences of
Election the granting of this Restricted Stock. Under
Section 83 of the Code, the Fair Market Value of
the Restricted Stock on the date any forfeiture
restrictions applicable to such Restricted Stock
lapse will be reportable as ordinary income at that
time. For this purpose, "forfeiture restrictions"
include surrender to the Company of unvested
Restricted Stock as described above. You may elect
to be taxed at the time the Restricted Stock is
acquired to the extent that the Fair Market Value
of the Restricted Stock exceeds the amount of
consideration paid by you (if any) for such
Restricted Stock at that time rather than when such
Restricted Stock ceases to be subject to such
forfeiture restrictions, by filing an election
under Section 83(b) of the Code with the Internal
Revenue Service within thirty (30) days after the
Date of Award. The form for making this election
is attached as Exhibit B hereto. Failure to make
this filing within the thirty (30) day period will
result in the recognition of ordinary income by you
(in the event the Fair Market Value of the
Restricted Stock increases after the date of
purchase) as the forfeiture restrictions lapse
unless you make a valid deferral as described
below. YOU ACKNOWLEDGE THAT IT IS YOUR SOLE
RESPONSIBILITY, AND NOT THE COMPANY'S, TO FILE A
TIMELY ELECTION UNDER CODE SECTION 83(b), EVEN IF
YOU REQUEST THE COMPANY OR ITS REPRESENTATIVES TO
MAKE THIS FILING ON YOUR BEHALF. YOU ARE RELYING
SOLELY ON YOUR OWN ADVISORS WITH RESPECT TO THE
DECISION AS TO WHETHER OR NOT TO FILE A CODE
SECTION 83(b) ELECTION.
Leaves of For purposes of this Agreement, while you are a
Absence common-law employee, your continuous service as CEO
does not terminate when you go on a bona fide leave
of absence that was approved by the Company (or its
Parent or Subsidiary) in writing, if the terms of
the leave provide for continued service crediting,
or when continued service crediting is required by
applicable law. Your continuous service as CEO
terminates in any event when the approved leave
ends, unless you immediately return to active work.
The Company determines which leaves count for this
purpose, and when your continuous service as CEO
terminates for all purposes under this Agreement.
Voting and Subject to the terms of this Agreement, you shall
Other Rights have all the rights and privileges of a stockholder
of the Company while the Restricted Stock is held
in escrow, including the right to vote and to
receive dividends (if any).
Adjustments In the event that after the date of this Award, 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 Board of Directors shall
appropriately adjust the number of shares of
Common Stock subject to this Award of Restricted
Stock (to the nearest whole number) and such
adjustments shall be effective and binding for all
purposes of this Award.
Restrictions The Company will not issue any Restricted Stock or
on Shares if the issuance of such Restricted Stock or
Issuance Shares at that time would violate any law or
regulation.
Withholding The release of the Restricted Stock from escrow
Taxes will not be allowed unless you make acceptable
arrangements to pay any withholding or other taxes
that may be due and such arrangements may include,
subject to such rules that may be established by
the Company, (i) delivery of previously owned
shares, (ii) withholding of shares by the Company
from the shares that would otherwise be delivered
from escrow, or (iii) cash or check.
Restrictions By signing this Agreement, you agree not to sell
on Resale (or transfer or assign) any Restricted Stock prior
to its vesting or sell (or transfer or assign) any
Shares acquired under this Award at a time when
applicable laws, regulations or Company or
underwriter trading policies prohibit sale.
If the sale of Shares acquired under this Award is
not registered under the Securities Act of 1933,
but an exemption is available which requires an
investment representation or other representation
and warranty, you shall represent and agree that
the Shares being acquired are being acquired for
investment, and not with a view to the sale or
distribution thereof, and shall make such other
representations and warranties as are deemed
necessary or appropriate by the Company and its
counsel.
No Retention This Agreement is not an employment agreement and
Rights does not give you the right to be retained by the
Company (or its Parents, Subsidiaries or
affiliates) and you agree that you are an employee-
at-will. The Company (or its Parents, Subsidiaries
or affiliates) reserves the right to terminate your
employment as CEO and your employment as a Company
employee at any time and for any reason.
Representati You acknowledge that, while employed by the Company
ons or any Parent or any Subsidiary or affiliate
thereof, you will have access to confidential and
proprietary information regarding the internal
affairs, operations and customers (customer is
defined herein as including, but not limited to,
borrowers, makers, lessees, guarantors, vendors and
manufacturers of the following: equipment,
construction equipment, transportation equipment,
buses, trailers, trucks, tractors, vehicles,
manufacturing equipment, machine tools, waste
equipment, recycling equipment and production
equipment) of the Company or any Parent or any
Subsidiary or affiliate thereof, including but not
limited to, information contained in any internal
memorandum, standard operating procedure manual,
employee manual, customer or vendor lists,
accounting records, computer-generated information,
computer lists, computer reports, computer records,
computer printouts or any software data or other
information in any computer system of the Company
or any Parent or any Subsidiary or affiliate
thereof and other information which pertains to the
business of the Company or any Parent or any
Subsidiary or affiliate thereof, which is not
disclosed by the Company or any Parent or any
Subsidiary or affiliate thereof to the general
public. By acceptance of this Agreement, you agree
to keep secret and retain in strictest confidence
and not to disclose, at any time, all confidential
matters, proprietary information which relate to
the Company or any Parent or any Subsidiary or
affiliate thereof including, without limitation,
customer lists, trade secrets, internal memoranda,
policies of the Company and other confidential
business affairs of the Company and its Parents and
its Subsidiaries or affiliates thereof and agrees
not to disclose any of the foregoing information,
at any time, without the prior written consent of a
duly authorized officer of the Company.
You further agree that, for 120 days from the date
that your employment as an employee of the Company
or any Parent or any Subsidiary or affiliate
thereof ends; (1) You shall not, either directly or
indirectly, solicit business from any existing or
prospective customer(s) of the Company or any
Parent or any Subsidiary or affiliate thereof and
(2) You shall not, either directly or indirectly,
agree to hire, solicit or recruit on behalf of your
new employer, or through your new employer, any
employee of the Company or any Parent or any
Subsidiary or affiliate thereof for any job,
employment or consulting, in the Company's or any
Parent's or any Subsidiary's or affiliate's
industry or with any company which competes with
the Company or any Parent or any Subsidiary or
affiliate thereof. For purposes of this paragraph,
a "prospective customer" includes but is not
limited to, a person, corporation, partnership or
other business entity with whom one or more
financing and/or leasing transactions has been
discussed within the twelve months prior to
termination of your employment with the Company, or
any Parent or any Subsidiary or affiliate thereof.
The provisions of this representations section
shall survive any expiration or termination of this
Agreement.
The Company may enforce any violation of these
provisions to the fullest extent permitted under
law or equity. You acknowledge that upon a
material breach of any of these provisions, the
Company would sustain irreparable harm from such
breach, and, therefore, you agree that in addition
to any other remedies which the Company may have
for any material breach of this Agreement or
otherwise, the Company shall be entitled to obtain
equitable relief including specific performance,
injunctions and restraining you from committing or
continuing any such violation of this Agreement.
The Company may apply to any court of competent
jurisdiction for a temporary restraining order,
preliminary injunction, or other interim or
conservatory relief as necessary.
Applicable This Agreement will be interpreted and enforced
Law under the laws of the State of New York and
construed accordingly, including any conflicts or
choice of law rule or principle that might
otherwise refer construction or interpretation of
this Agreement to the substantive law of another
jurisdiction. This Agreement may not be amended,
altered, waived or modified unless it is in writing
and signed by you and a member of the Board of
Directors. This Agreement represents the final
agreement between the parties and may not be
contradicted by evidence of prior, contemporaneous
or subsequent oral agreements between the parties.
The rights and remedies of the Company, its
Parents, its Subsidiaries and affiliates hereunder
shall be cumulative and not alternative. No delay
or failure on the part of the Company, its Parents
or its Subsidiaries or its affiliates in exercising
any rights hereunder shall operate as a waiver of
such or of any other rights. If any term,
provision, covenant or restriction of this
Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or
unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth
herein shall remain in full force and effect and
shall in no way be affected, impaired or
invalidated, and the parties hereto shall use their
best efforts to find and employ an alternative
means to achieve the same or substantially the same
result as that contemplated by such term,
provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the
parties that they would have executed the remaining
terms, provisions, covenants and restrictions
without including any of such that may be hereafter
declared invalid, illegal, void or unenforceable.
YOU HEREBY WAIVE THE RIGHT TO HAVE A TRIAL BY JURY
IN ANY LITIGATION, ACTION, CAUSE OF ACTION,
COUNTERCLAIM, CASE, ARBITRATION OR PROCEEDING
BETWEEN YOU AND THE COMPANY, ITS PARENTS OR ITS
SUBSIDIARIES OR AFFILIATES.
__________________
In consideration of the Company granting you this Restricted
Stock, please acknowledge your agreement to fully comply with all
of the terms and provisions contained herein by signing this
Agreement in the space provided above and returning it promptly
to:
Financial Federal Corporation
Attention: Xxxx X. Xxxxxxx, Secretary
