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                                                                    EXHIBIT 10.3

                                  May 14, 1998



Mr. Gregory R. Ciccolini
6249 East Gelding Drive
Scottsdale, Arizona  85254

         Re:      Terms of Employment

Dear Greg:

         I am pleased that you have accepted the offer of employment made by
Cygnet Financial Corporation ("Cygnet"). The purpose of this letter is to
confirm the terms and conditions under which you will be employed.

POSITION:      You will serve as Chief Information Officer of Cygnet. As Chief
               Information Officer you will be responsible for the operation and
               use of all technology and information systems employed by Cygnet.
               You will also manage all personnel involved in these systems. You
               will report to the Chief Executive Officer of Cygnet. You will be
               employed on a full-time basis and will devote all of your working
               time and efforts exclusively to Cygnet. Your position is an
               executive position and, therefore, you are exempt from the
               minimum wage and overtime provisions of the Fair Labor Standards
               Act.

LOCATION:      Your office will be located at 2525 East Camelback Road, Phoenix,
               Arizona 85016. The location of your office may be changed from
               time to time. Also, you may be required to provide services from
               time to time at other Cygnet locations. You may also be required
               to travel in the performance of services.

SALARY:        You will receive a salary at the rate of $120,000.00 per year.
               Your salary will be reviewed annually in December and may be
               adjusted at the discretion of the Board of Directors of Cygnet.

BENEFITS:      Enclosed is a summary of the employee benefits of Ugly Duckling
               Corporation. Cygnet is expected to have similar benefits. You
               will be entitled to the current benefits of Ugly Duckling
               Corporation as an employee of Cygnet.
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Mr. Gregory R. Ciccolini
May 12, 1998
Page 2

STOCK OPTIONS: You will receive a nonqualified option to purchase 20,000 shares
               of common stock of Cygnet (the "Stock Options") upon completion
               of the "spin-off" of Cygnet from Ugly Duckling Corporation (the
               "Spin-Off"). The exercise price of the Stock Options will be the
               price that Ugly Duckling Corporation shareholders must pay to
               acquire common stock of Cygnet in the Spin-Off (the "Spin-Off
               Price"). The Stock Options will vest over five years from the
               date of grant and be subject to other usual and customary terms
               and conditions. The Stock Options are granted to provide you an
               incentive to work in a manner that adds as much value as possible
               to Cygnet. However, Cygnet makes no representations or warranties
               as to, and, shall have no liability for, the value of the Stock
               Options or the price of common stock of Cygnet at any time. You
               acknowledge that the issuance and/or exercise of the Stock
               Options may constitute compensation to you and you shall be
               responsible for paying all income taxes assessed on said
               compensation.

STOCK GRANT:   As a signing bonus, you will receive the right to be issued that
               number of shares of common stock of Cygnet at the Spin-Off Price
               equal to $50,000 (the "Restricted Stock"). The Restricted Stock
               will vest and be issued to you on June 1, 2002, provided you are
               then employed by Cygnet. The Restricted Stock is granted to
               induce you to bear all risk of terminating your current
               employment and accepting employment with Cygnet under the terms
               of this letter. However, Cygnet makes no representations or
               warranties as to, and, shall have no liability for, the value or
               price of the Restricted Stock at any time. You acknowledge that
               the issuance of the Restricted Stock will constitute compensation
               to you and you shall be responsible for paying all income taxes
               assessed on said compensation. You authorize Cygnet to withhold
               from the Restricted Stock at the time of issuance that number of
               shares with a value equal to the withholdings required by
               applicable law. If any withholdings are required prior to the
               issuance of the Restricted Stock you authorize Cygnet to make the
               withholdings from your Salary. The Restricted Stock will not be
               registered under the Securities Act of 1933 and will be subject
               to transfer restrictions under Rule 144 of the Securities Act of
               1933.

TERM:          Your employment will commence on June 1, 1998. There is no
               minimum term for your employment. You are employed at will and
               your employment may be terminated at any time for any lawful
               reason, all at the discretion and will of Cygnet. However, if
               your employment is terminated by Cygnet without cause prior to
               June 1, 1999, then your Salary, but not any other benefits, will
               be continued for six months. If your employment is terminated (a)
               by Cygnet without cause after June 1, 1999; (b) by Cygnet at any
               time for cause; or (c) by you at any time, then your Salary will
               not be continued after the termination. The continuation of your
               Salary, if required, will be a severance benefit (the "Severance
               Benefit") and the Severance Benefit will be your exclusive
               benefit and remedy for the termination of your employment by
               Cygnet.

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Mr. Gregory R. Ciccolini
May 12, 1998
Page 3

                              without cause. For purposes of this letter and the
                              termination of your employment by Cygnet without
                              cause, "without cause" shall mean termination for
                              any reason other than your (a) illegal conduct;
                              (b) gross negligence or intentional misconduct;
                              (c) willful failure to perform your duties after
                              receipt of written demand for performance of your
                              duties; or (d) conduct that harms or threatens to
                              harm any employee of Cygnet or any employee of any
                              organization that does business with Cygnet.

CHANGE OF CONTROL:            If a change in control of Cygnet occurs during the
                              term of your employment and your employment by
                              Cygnet is either (a) terminated by you within 12
                              months after the change of control; (b) terminated
                              by Cygnet without cause within 90 days prior to
                              the change of control; or (c) terminated by Cygnet
                              without cause within 12 months after the change of
                              control, then in any such event all Stock Options
                              and Restricted Stock granted to you pursuant to
                              this letter that are not yet vested at the time of
                              the change of control shall automatically be fully
                              vested, subject to approval of the Board of
                              Directors of Cygnet. If the vesting of your Stock
                              Options and Restricted Stock is accelerated due to
                              the termination of your employment in connection
                              with a change of control then no Severance Benefit
                              shall be payable to you. For purposes of this
                              letter, change of control shall be defined by the
                              Long Term Incentive Stock Option Plan of Ugly
                              Duckling Corporation but shall include the removal
                              and/or resignation of Ernest C. Garcia II as the
                              Chairman of the Board of Directors of Cygnet.

OTHER TERMS:                  There are no material terms and conditions of your
                              employment other than as stated in this letter.
                              This letter constitutes a legally binding and
                              enforceable contract under Arizona law. You
                              acknowledge that you have received the advice of
                              independent legal counsel prior to signing this
                              letter.
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Mr. Gregory R. Ciccolini
May 12, 1998
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         If these terms and conditions of employment are acceptable to you, then
please acknowledge your acceptance by signing this letter and returning it to
me. If you have any questions or comments regarding these terms and conditions
of your employment, please contact me or Ernie Garcia.

         I look forward to working with you.

                                   Cordially,

                                    /s/ STEVEN P. JOHNSON

                                   Steven P. Johnson
                                   General Counsel
SPJ:ag

Accepted this 18 day of May, 1998.

/s/ GREGORY R. CICCOLINI
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Gregory R. Ciccolini

Social Security No. ________________