Exhibit 10.2

 

EXECUTION COPY  

 

 

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July 21, 2014

Steven Mnuchin
c/o CIT Group Inc.
One CIT Drive
Livingston, NJ 07039

Dear Steven,

This offer letter (this “Offer Letter”) memorializes our discussions concerning
your role at CIT Group Inc. (“CIT”) following the consummation of the merger
(the “Merger”) contemplated by the Agreement and Plan of Merger among CIT, IMB
Holdco LLC (“OneWest”), Carbon Merger Sub LLC and JCF III HoldCo I L.P., dated
as of the date hereof (the “Merger Agreement”). We believe that your continued
service through and following the consummation of the Merger will greatly
contribute to the successful integration of CIT and OneWest and the future
success of the combined enterprise.

Positions and Reporting. Following the Effective Time (as defined in the Merger
Agreement), you will be appointed as the Vice Chairman of CIT and Chairman of
the Surviving Bank (as defined in the Merger Agreement), a subsidiary of CIT
(which position, for the avoidance of doubt, is not Chairman of the Board of
Directors of the Surviving Bank), and a member of the Board of Directors of CIT
(the “Board”), reporting directly to the Chief Executive Officer of CIT. In such
positions, you will have such duties and responsibilities as are assigned to you
by the Chief Executive Officer of CIT from time to time, provided such duties
and responsibilities will not be inconsistent with such positions. While
employed, you will dedicate substantially all of your business time and
attention to your duties and responsibilities with CIT and its affiliates.
Without limiting the generality of the foregoing, you will be permitted to
continue in your role as Chairman and Chief Executive Officer of Dune Capital
Management (and its controlled affiliates) and will be permitted to continue to
manage outside investments, in each case, so long as such outside activities do
not, in the reasonable determination of the General Counsel of CIT, (i) give
rise to a conflict of interest with CIT or its affiliates, (ii) result in a
breach of your fiduciary duties, including those related to corporate
opportunity, to CIT and its affiliates or a breach of any restrictive covenant
agreement between you and CIT or its affiliates or (iii) otherwise interfere
with the performance of your duties to CIT and its affiliates. If you disagree
with such determination, you may appeal to the Nominating and Governance
Committee of the Board.

Total Target Opportunity. In respect of performance during each of the 2015,
2016 and 2017 fiscal years of CIT, you will have a total target annual
compensation opportunity, currently consisting of annual base salary, target
annual incentive opportunity and target long-term incentive opportunity, equal
to $4,500,000 (the “Total Target Opportunity”). The actual payout of the
incentive components of the Total Target Opportunity will be based on, among
other things, your performance and CIT’s results. The Total Target Opportunity
will be allocated in the manner determined by the Compensation Committee of the
Board (the “Committee”) consistent with the allocations applicable to similarly
situated executives of CIT and its affiliates (other than the Chief Executive
Officer of CIT) (the “Peer Executives”), provided that in no event will your
annual base salary (payable bi-weekly) be less than $750,000. Except as
expressly provided herein, eligibility to receive incentive awards in respect of
the Total Target Opportunity, as well as the terms and conditions under which
they may be granted, may change from time to time at the

 

CIT Group Inc.

1 CIT Drive

Livingston, NJ 07039

 

 

 

Steven Mnuchin
Page 2

 

sole discretion of the Committee. Except for the compensation described herein,
you will not be entitled to any compensation for your services as a member of
the Board or the board of directors of any of CIT’s affiliates, including
retainer fees and other amounts that might be paid to other members of any such
boards and the committees thereof.

Severance Upon Certain Terminations of Employment. If during the three (3)-year
period following the Effective Time (the “Term”), your employment is terminated
without Cause (as defined below) or you resign for Good Reason (as defined
below), you will be paid a lump sum amount (as soon as reasonably practicable
after the date on which the Release (as defined below) becomes effective in
accordance with its terms)) equal to (i)(A) the product of $375,000, multiplied
by the number of full and partial months remaining in the Term, minus (B) the
grant date fair value of any long-term incentive awards granted in respect of
the Total Target Opportunity in the year of termination (not to exceed the
amount equal to the portion of the Total Target Opportunity attributable to
long-term incentive awards for such year), plus (ii) 102% of the medical
premiums for the remainder of the Term; provided, however, if the cash severance
amount that would be payable to you under the CIT Employee Severance Plan as in
effect from time to time (the “Severance Plan”), based on participation at the
Executive Management Committee level, is greater than the amount contemplated by
the foregoing clause, you will instead be paid the amount payable under the
Severance Plan but in accordance with the terms and conditions of this Offer
Letter. Any severance payments will be contingent upon your execution and
non-revocation of a release of claims in favor of CIT and its affiliates in the
form customarily used by CIT under the Severance Plan (the “Release”), which
Release must be signed by you and returned to CIT within thirty (30) days of
your date of termination and become effective in accordance with its terms. The
payments and benefits specified herein on a termination of employment without
Cause or for Good Reason are the only benefits to which you are entitled upon a
termination of employment without Cause or for Good Reason, except for any
rights expressly set forth in any equity award agreements in respect of CIT
common stock to which you are a party or any rights to vested benefits as of
your date of termination pursuant to the terms of the CIT employee benefit plans
in which you participate. Upon your termination of employment for any reason,
you will promptly resign from all positions, including, any director positions,
with CIT and its affiliates.

For purposes of this Offer Letter, “Cause” means: (i) the commission of a
misdemeanor involving moral turpitude or a felony; (ii) your acts or omissions
that cause or may reasonably be expected to cause material injury to CIT and its
Affiliates (as defined in the CIT Amended and Restated Long-Term Incentive Plan)
( the “CIT Group”), its vendors, customers, business partners or affiliates or
that results or is intended to result in personal gain at the expense of the CIT
Group, its vendors, customers, business partners or affiliates; (iii) your
substantial and continuing neglect of your job responsibilities for the CIT
Group (including excessive unauthorized absenteeism); (iv) your failure to
comply with, or violation of, the CIT Group’s Code of Business Conduct; (v) your
acts or omissions, whether or not performed in the workplace, that preclude your
employment with any member of the CIT Group by virtue of Section 19 of the
Federal Deposit Insurance Act; or (vi) your violation of any federal or state
securities or banking laws, any rules or regulations issued pursuant to such
laws, or the rules and regulations of any securities or exchange or association
of which you or a member of the CIT Group is a member.

For purposes of this Offer Letter, “Good Reason” means, without your consent:
(i) a material diminution of your annual base salary as set forth in this Offer
Letter (except in the event of a compensation reduction applicable to you and
other employees of comparable rank and/or status); (ii) a material diminution of
your duties and responsibilities from those in effect as of immediately
following the Effective Time; (iii) your reassignment to a work location that is
more than

 

 

Steven Mnuchin
Page 3

 

fifty (50) miles from your immediately preceding work location and which
increases the distance you have to commute to work by more than fifty (50)
miles; or (iv) a material breach by CIT of this Offer Letter; provided that, a
termination for Good Reason will not occur unless (A) you have provided CIT
written notice specifying in detail the alleged condition of Good Reason within
thirty (30) days of the occurrence of such condition; (B) CIT has failed to cure
such alleged condition within ninety (90) days following CIT’s receipt of such
written notice; and (C) if the Committee (or its designee) has determined that
CIT has failed to cure such alleged condition, your termination of employment
occurs within five (5) days following the end of such 90-day cure period.

Employee Benefits. While employed during the Term, you will be eligible to
participate in the employee benefit plans and perquisites provided to Peer
Executives, other than participation in the Severance Plan; provided that,
following the Term, you will be eligible to participate in the Severance Plan at
the Executive Management Committee level. You will be eligible for twenty (20)
vacation days per full calendar year. Based on your position, you may be
required to comply with banking regulations regarding mandatory time away which,
if applicable, must be taken as part of your eligible vacation time. In
addition, you will be eligible for company paid holidays and personal days in
accordance with CIT’s time off policy. While employed during the Term, you will
be entitled to be provided with security services similar to those provided by
OneWest prior to the Effective Time.

Employment Policies. As part of your employment with CIT and its affiliates, you
agree to abide by all of CIT’s policies and procedures as they presently exist,
and as they are amended from time to time, including, without limitation, any
claw back or recoupment policies. Without limiting the generality of the
foregoing, in your role, you will be subject to CIT’s Executive Equity Ownership
and Retention Policy as in effect from time to time (the “Retention Policy”) and
generally will be required to own the greater of (i) a minimum amount of “Stock”
(as defined in the Retention Policy) based on a multiple of your base salary or
(ii) a number of “Covered Shares” (as defined in the Retention Policy) currently
equal to at least 50% of the vested, after-tax compensation-related equity
awards granted to you by CIT. For the avoidance of doubt, shares of CIT common
stock received by you after the Effective Time will be treated as “Covered
Shares”, but shares received in consideration for OneWest equity in connection
with the Merger will not. To the extent there is any inconsistency between the
description of the Retention Policy requirements herein and the actual terms of
the policy, the language of the Retention Policy will govern.

Miscellaneous.

CIT’s obligations under this Offer Letter will become effective upon the
occurrence of the Effective Time subject to your continued employment with
OneWest as of the Effective Time. CIT’s obligations under this Offer Letter are
contingent upon (i) you subjecting to a vote, in accordance with Q&A/ 6 and 7 of
the regulations under Section 280G of the Internal Revenue Code of 1986, as
amended (the “Code”) and the regulations thereunder, all payments and benefits
that could reasonably be viewed as “parachute payments” (within the meaning of
Section 280G of the Code and the regulations thereunder), including the payments
and RSU awards contemplated by this Offer Letter, and using reasonable best
efforts to cause OneWest to seek approval of such payments and awards in
accordance with Q&A/6 and 7 of the regulations under Section 280G of the Code
from the interest holders of OneWest or any applicable affiliate (the form of
which vote and any required waiver will be reasonably satisfactory to CIT),
prior to the Effective Time, and (ii) your execution of CIT’s Non Competition,
Non-Solicitation and Confidentiality

 

 

Steven Mnuchin
Page 4

 

Agreement (the “Confidentiality Agreement”), a copy of which Confidentiality
Agreement is enclosed for your signature simultaneous with your signing of this
Offer Letter.

CIT and you intend that the benefits and payments described in this Offer Letter
will comply with the requirements of Section 409A of the Code, and the
regulations, guidance and other interpretative authority issued thereunder to
the extent subject thereto, or an exemption to Section 409A of the Code, and
that this Offer Letter will be interpreted and construed consistent with that
intent. Any benefits or payments that qualify for the “short-term deferral”
exception, the “separation pay” exception or another exception under Section
409A of the Code will be paid under the applicable exception. For purposes of
the limitations on nonqualified deferred compensation under Section 409A of the
Code, each payment of compensation under this Offer Letter will be treated as a
separate payment of compensation for purposes of applying the Section 409A of
the Code deferral election rules and the exclusion under Section 409A of the
Code for certain short-term deferral amounts. In no event may you, directly or
indirectly, designate the calendar year of any payment under this Offer Letter.

This Offer Letter is governed by the law of the State of New York, without
giving effect to any conflicts of laws provisions.

This Offer Letter and the Confidentiality Agreement set forth the terms of your
employment with CIT and supersede any and all prior oral or written agreements,
term sheets or communications made in connection with the negotiation of this
Offer Letter. This Offer Letter and the Confidentiality Agreement do not
supersede or amend in any way the Selling Interestholder Restrictive Covenant
Agreement, dated as of the date hereof, and entered into by you in connection
with the Merger Agreement in your capacity as a selling interestholder in the
Merger, which covenants will be in addition to the covenants under the
Confidentiality Agreement. Except for the Selling Interestholder Restrictive
Covenant Agreement, the covenants contained in the Confidentiality Agreement
will be the sole covenants to which you will be bound or be required to be party
to (including with respect to compensation payable in satisfaction of the Total
Target Opportunity during the Term) in connection with your employment during
the Term. Notwithstanding the terms of the non-competition restriction in the
Selling Interestholder Restrictive Covenant Agreement or the Confidentiality
Agreement, following your termination of employment with CIT and its affiliates,
it shall not be a violation of the non-competition restrictions set forth
therein for you to provide services to a private equity firm, hedge fund or
investment manager (or the controlled affiliates of any such entity) that has
five (5)% or less of its assets (determined on an aggregate basis) invested in
businesses that compete with those of CIT and its affiliates, provided that you
do not advise any such entities with respect to CIT and its affiliates.

Notwithstanding anything contained in this Offer Letter, the nature of your
employment remains “at-will”. As a result, either you or CIT may terminate your
employment relationship at any time for any reason, with or without cause and
with or without notice. If your employment with CIT terminates at any time for
any reason, the compensation outlined in this Offer Letter will cease to be in
effect as of your last day of employment, except as expressly provided above in
this Offer Letter with respect to certain terminations of employment during the
Term or as expressly provided under any other equity award agreements or any
rights to vested benefits as of your date of termination pursuant to the terms
of the CIT employee benefit plans in which you participate.

 

 

Steven Mnuchin
Page 5

 

Your signature below and on the Confidentiality Agreement indicate that you
understand and agree to the terms set forth in this Offer Letter and the
Confidentiality Agreement. No changes to the foregoing are valid unless
authorized and signed by you and the Chief Executive Officer, the General
Counsel and/or either of their designees. In addition, no one at CIT is
authorized to vary the terms of this Offer Letter and the Confidentiality
Agreement except the Chief Executive Officer, the General Counsel and/or either
of their designees. An additional copy of this Offer Letter and the
Confidentiality Agreement are enclosed for your records.

 

[Signature Pages Follow]

 

 

Steven Mnuchin
Page 6

 

We are looking forward to your joining CIT during this period of growth and
transformation.

 

Sincerely,

/s/ Robert J. Ingato______________________

Name:Robert J. Ingato

Title:Executive Vice President,
General Counsel and Secretary

 

 

Steven Mnuchin
Page 7

 

Agreed and accepted:

 

 

/s/ Steven Mnuchin

7/21/14

Steven Mnuchin Date

 

 

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