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Delaware
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001-31369
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65-1051192
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(State or other jurisdiction
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(Commission File Number)
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(IRS Employer
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of incorporation)
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Identification No.)
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4I under the Exchange Act (17 CFR 240.13e-4I)
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| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
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Term
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From the date of execution, July 5, 2016, until December 31, 2017.
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Position
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Mr. Knittel will serve as President – Transportation Finance of CIT Aerospace LLC/CIT. If CIT completes a spin-off or sale of its commercial air leasing business, Mr. Knittel will become chief executive officer of either the spun-off entity or the division within the acquirer that runs the business, as applicable.
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Total Target Annual Compensation
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Mr. Knittel will have a target total annual compensation opportunity for the 2016 and 2017 fiscal years of not less than $4,000,000, which will be comprised of the following:
·Base Salary. Not less than $600,000 per year, which amount would increase to $750,000 per year if CIT completes a spin-off of its commercial air leasing business;
·Short-Term Incentive. With respect to each performance year during the Term, Mr. Knittel will have a target opportunity of 100% of his annual base salary (although for the 2016 performance year, the short-term incentive will be no less than $1,090,000); and
·Long-Term Incentive. Mr. Knittel will be eligible to participate in long-term incentive plans on the same basis as similarly situated executives.
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Transaction Success Award
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In connection with the possible spin-off or sale of CIT's commercial air leasing business, Mr. Knittel would be eligible for a transaction success award with a grant date fair value of $8 million on the following terms:
·Sale. If the transaction were structured as a sale, the transaction success award would be payable in the form of cash and would vest (a) 25% on the closing of the sale and (b) 75% on the first anniversary thereafter, subject to Mr. Knittel's continued employment or an earlier termination of employment without cause or for good reason.
·Spin-off. If the transaction were structured as a spin-off, the transaction success award would be provided (a) 50% in the form of time-based restricted stock units in respect of the common stock of the spun-off entity, which would vest in equal installments on the first three anniversaries of the spin-off, subject to Mr. Knittel's continued employment, and (b) 50% in the form of performance-based restricted stock units in respect of the common stock of the spun-off entity, which would vest on the third anniversary of the spinoff, subject to Mr. Knittel's continued employment and the satisfaction of performance goals determined by the board of directors (or a committee thereof) of the spun-off entity. Upon a termination of employment without cause or for good reason prior to the applicable vesting dates, the time-based restricted stock units would vest in full, while the performance-based restricted stock units would be eligible for prorated vesting, subject to satisfaction of the applicable performance goals.
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Employee Benefits
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Mr. Knittel will be eligible for employee benefits on the same basis as similarly situated executives and will be reimbursed for legal fees incurred in connection with the negotiation of the Employment Agreement.
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New Executive Retirement Plan
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Mr. Knittel will continue to be eligible to participate in CIT's New Executive Retirement Plan until a spin-off or sale of the commercial air leasing business. He will receive two years of additional age and service credit (subject to any maximums in the plan) upon a sale or spin-off or an earlier termination of employment without cause or for good reason.
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Severance Benefits
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Upon a termination of employment without cause or for good reason not in connection with a change in control of CIT, Mr. Knittel would be eligible for a cash severance payment equal to the sum of his base salary and target short-term incentive opportunity and certain other severance benefits payable under the terms of the CIT Employee Severance Plan. If the termination of employment occurred prior to the completion of a sale or spin-off, Mr. Knittel would also be entitled to a cash payment of $8 million in lieu of the transaction success award, subject to the completion of a sale or spin-off.
Upon a termination of employment without cause or for good reason following a change in control of CIT but prior to a sale or spin-off, Mr. Knittel would also be entitled to the change-in-control severance payments and benefits payable under the terms of the CIT Employee Severance Plan. He would not be entitled to any payment in respect of the transaction success award.
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Restrictive Covenants
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Mr. Knittel is subject to restrictions on competition with CIT and its affiliates, hiring employees of CIT and its affiliates and disparaging CIT and its affiliates through the end of the Term. He is also subject to a perpetual confidentiality covenant.
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| Item 9.01. | Exhibits |
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10.1
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Employment Agreement, dated as of July 5, 2016, between CIT Aerospace LLC and C. Jeffrey Knittel.
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| CIT GROUP INC. | ||
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By:
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/s/ E. Carol Hayles
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E. Carol Hayles
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Executive Vice President & |
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Chief Financial Officer
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