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Exhibit 10.23
AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
AMENDED AND
RESTATED EMPLOYMENT AGREEMENT (“Agreement”) by and
among CIT Group Inc. a Delaware corporation (the
“Company”) and Jeffrey M. Peek (the
“Executive”) dated as of the 10th day of December,
2007.
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.
WHEREAS, the
Company and the Executive desire to comply with Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”),
and the rules and regulations promulgated thereunder, and have
amended this Agreement to comply with Section 409A of the
Code.
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. Annual Base Salary shall be payable as earned during the
Term at such time and in such manner consistent with the
Company’s payroll practices for other senior executives,
unless otherwise deferred in accordance with the terms of the CIT
Group Inc. Deferred Compensation Plan, as amended (the
“DCP”).
(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, ROE, 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. Annual Bonuses shall be paid not later than March 15 of the
calendar year following the calendar year to which they relate,
unless otherwise deferred in accordance with the terms of the
DCP.
(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. Reimbursement shall be made as soon
as practicable after a request for reimbursement is received by the
Company, but in no event later than the last day of the calendar
year next following the calendar year in which such expense was
incurred.
(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:
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(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. |
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(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. |
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(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. |
Reimbursement
of financial planning expenses shall be made as soon as practicable
after the request for reimbursement is submitted, but in no event
later than the last day of the calendar year next following the
calendar year in which such expense was incurred. Additionally,
neither the provision of in-kind benefits nor the reimbursement of
expenses in any one calendar year shall affect the level or amount
of in-kind benefits to be provided, or the expenses eligible for
reimbursement, in any other calendar year. The Executive’s
right to reimbursement or in-kind benefits under this Section
3(b)(vii) is not subject to liquidation or exchange for another
benefit.
4.
Termination of Employment . For purposes of this Agreement,
the terms “terminate,” “terminated” and
“termination” mean a termination of the
Executive’s employment that constitutes a “separation
from service” within the meaning of the default rules of
Section 409A of the Code.
(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 of the post-termination
exercise period shall not extend the maximum term during which any
such option may be exercised beyond the earlier of its original
expiration date or 10 years from the original date of grant);
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 ob
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