10.B Executive Retention Plan - Resolution adopted by the Human Resources
Committee on May 26, 2000
RESOLVED, that an executive cash retention plan for the benefit of the
senior executives of this Corporation and its subsidiaries, substantially
in the form attached hereto (the "Retention Plan") is hereby approved;
FURTHER RESOLVED, that each of the President and Chief Executive
Officer, the Senior Vice President-Human Resources and the Secretary or any
Assistant Secretary are individually authorized to cause this Corporation
and its subsidiaries to implement the Retention Plan and to execute,
deliver and enter into any other necessary agreements, undertakings,
documents or other instruments necessary or desirable in connection with
the implementation of the Retention Plan, (together with such changes, if
any, as are approved in writing by the Chair of this Committee) and to
perform or to cause this Corporation and its subsidiaries to perform any
act or thing in connection with the Retention Plan; and
FURTHER RESOLVED, that such officers are individually authorized to
effect further changes, additions or deletions to the terms of the
Retention Plan as such officers, or any one or more of them, deem necessary
or appropriate for the full implementation of the Retention Plan as
approved.
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DESIGN
Cash payable upon the earlier of (i) involuntary termination or six months
following a Change of Control (as defined in the summary attached hereto) or
(ii) 24 months from the time of grant:
- Provides six-month period of stability following the Change of
Control.
- Provides 24-month retention of team in the event that no Change of
Control occurs.
- Award payable upon an involuntary termination not for "cause" (as
defined in the summary attached hereto) or for "good reason".
- Awards paid pro-rata on death or long-term disability.
- Good reason termination limited to:
- Reduction in base pay; or
- Being required to move more than 30 miles.
AWARDS AND DISTRIBUTION
The Company shall fund a cash pool to pay the Awards as follows:
EXECUTIVE AWARD
--------- -----
Breyne $3,000,000
Bonano $2,000,000
Fields $2,000,000
Korte $2,000,000
Smalis $2,000,000
Hallinan $2,000,000
Marszowski $2,000,000
Bruns $1,000,000
Roche $1,000,000
Smythe $1,000,000
Tashlik $1,000,000
Webster $1,000,000
TOTAL $20,000,000
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This summary is intended to explain the attached definitions in plain English.
The terms of the plan will control in case of any conflicts with this summary.
A CHANGE OF CONTROL occurs if any of the following events occurs:
1. If a person or group of persons acting together acquire more than 20% of
FINOVA's common stock or total voting interest, unless (1) those shares were
bought or sold by FINOVA itself or one of its benefit plans, or (2) the purchase
is made by a corporation that satisfies the exception noted after item 3.
2. A majority of the members of our Board of Directors cease to remain as
directors, although replacement members approved by the current Board members
will not trigger this provision.
3. If our shareowners approve a merger, reorganization, sale of all or most
of our assets, unless the following exception is satisfied.
EXCEPTION TO ITEMS 1 AND 3:
A Change of Control will not have occurred in items 1 or 3 if all
of the following conditions are satisfied:
a. Our shareowners just before the Change of Control continue
to own at least 60% of our stock or voting interests in
approximately the same proportion as before.
b. No person or group of related persons own 20% or more of our
shares or voting interests.
c. Our Board members (including approved replacement members as
noted above) continue to represent a majority of the
resulting Board.
4. If our shareowners approve a complete liquidation or dissolution of
FINOVA.
CAUSE exists if any of the following events occur:
1. You fail to perform your duties after a written demand to perform is
delivered to you that identifies the performance issues.
2. You willfully engage in illegal conduct or gross misconduct that could
injure FINOVA. Willful conduct requires that you have acted in bad faith or
without reasonable belief that the conduct is in FINOVA's best interests.
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DEFINITION OF CHANGE OF CONTROL: For purposes of this Plan, a "Change
of Control" shall mean any of the following events:
(a) The acquisition by an individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) (a "Person") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of either (i) the then outstanding shares
of common stock of the Corporation (the "Outstanding Corporation
Common Stock") or (ii) the combined voting power of the then
outstanding voting securities of the Corporation entitled to vote
generally in the election of directors (the "Outstanding Corporation
Voting Securities"); provided, however, that for purposes of this
subsection (a), the following acquisition shall not constitute a
Change of Control: (i) any acquisition directly from the Corporation,
(ii) any acquisition by the Corporation other than an acquisition by
virtue of the exercise of a conversion privilege unless the security
being so converted was itself acquired directly from the Corporation,
(iii) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Corporation or any corporation
controlled by the Corporation or (iv) any acquisition by any
corporation pursuant to a transaction which complies with clauses (i),
(ii) and (iii) of subsection (c) of this Section 4; or
(b) individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming
a director subsequent to the date hereof whose election, or nomination
for election by the Corporation's shareholders, was approved by a vote
of at least a majority of the directors then comprising the Incumbent
Board shall be considered as through such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board;
or
(c) approval by the shareholders of the Corporation of a reorganization,
merger or consolidation or sale or other disposition of all or
substantially all of the assets of the Corporation (a "Business
Combination"), in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Corporation Common Stock and Outstanding Corporation
Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 60% of,
respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result of
such transaction owns the Corporation or all or substantially all of
the Corporation's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the
Outstanding Corporation Common Stock and Outstanding Corporation
Voting Securities, as the case may be, (ii) no Person (excluding any
employee benefit plan (or related trust) of the Corporation or such
corporation resulting from such Business Combination) beneficially
owns, directly or indirectly, 20% or more of, respectively, the then
outstanding shares of common stock of the corporation resulting from
such Business Combination or the combined voting power of the then
outstanding voting securities of such corporation except to the extent
that such ownership existed prior to the Business Combination and
(iii) at least a majority of the members of the Board of Directors of
the corporation resulting from such Business Combination were members
of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or
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(d) approval by the shareholders of the Corporation of a complete
liquidation or dissolution of the Corporation.
DEFINITION OF CAUSE:
(a) For purposes of this Plan, "cause" shall mean:
(i) the willful and continued failure of the Executive to perform
substantially the Executive's duties with the Corporation 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 or the Chief Executive Officer of the Corporation
which specifically identifies the manner in which the Board or
Chief Executive Officer 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
Corporation. 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 Corporation. Any act,
or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board or upon the instructions of
the Chief Executive Officer or a senior officer of the
Corporation or based upon the advise of counsel for the
Corporation 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 Corporation. The cessation of employment of the
Executive shall not be deemed to be for Cause unless and until
there shall have been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than
three-quarters of the entire membership of the Board at a meeting
of the Board called and held for such purpose (after reasonable
notice is provided to the Executive and the Executive is given an
opportunity, together with counsel, to be heard before the
Board), finding that, in the good faith opinion of the Board, the
Executive is guilty of the conduct described in subparagraph (i)
or (ii) above, and specifying the particulars thereof in detail.
