Exhibit 10.1

                              EMPLOYMENT AGREEMENT

      AGREEMENT  by and  among  CIT  Group  Inc.  a  Delaware  corporation  (the
"Company")  and  Jeffrey M. Peek (the  "Executive")  dated as of the 22nd day of
July, 2003.

      WHEREAS,  the Company  desires to employ the Executive in accordance  with
the following terms and conditions, and the Executive desires to be so employed.

      NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

      1. Effective Date. The "Effective Date" shall mean September 3, 2003.

      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 initially serve as President
and Chief Operating Officer with such authority,  duties and responsibilities as
are commensurate with such position and as may be consistent with such position,
reporting to the Chief Executive  Officer of the Company and the Chairman of the
Board of Directors  (the "Board").  The Executive  will be  responsible  for all
business  units and credit risk at the Company.  The Executive  shall serve as a
member of the  Board.  During the Term,  the  Company  expects  to  promote  the
Executive to the position of Chief Executive  Officer of the Company,  with such
authority,  duties and  responsibilities  as are commensurate with such position
and as may be  consistent  with  such  position.  At such time as  Executive  is
promoted to the position of Chief  Executive  Officer of the  Company,  he shall
report  directly  to the  Board.  Executive's  services  shall be  performed  in
Livingston, New Jersey.

            (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,  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.


<PAGE>

            (i) Base Salary.  During the Term,  the  Executive  shall receive an
annual base salary  ("Annual Base  Salary").  For calendar year 2003, the Annual
Base Salary shall be $750,000.00.  After the first  anniversary of the Effective
Date, 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 and
the term Annual Base Salary as utilized in this Agreement  shall refer to Annual
Base Salary as so increased. For calendar year 2005, the Executive's Base Salary
shall be set in accordance with the charter of the  Compensation  and Governance
Committee, as then in existence.

            (ii) Annual Bonus.  For each complete  calendar year during the Term
(except for 2003),  the Executive  shall be entitled to a bonus  pursuant to the
Company's  incentive plans and programs ("Annual  Bonus").  For partial calendar
year 2003, Executive shall receive a guaranteed cash bonus of $1,300,000.00 paid
to the  Executive  in  February  2004,  if  the  Executive's  employment  is not
terminated  for "Cause" as defined in Section 4(b) or by the  Executive  without
Good Reason as defined in Section 4(c) prior to January 1, 2004. The Executive's
Annual Bonus for 2004 shall be $2,200,000.00 if the Company achieves its pre-tax
income goal for 2004.  Notwithstanding Section 3(b)(v) hereof, the Target Bonus,
as used herein,  shall be not less than the greater of $1,600,000 or 200 percent
of the Executive's Base Salary.

            (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.  During the 2003 calendar  year, the
Company shall grant stock options and restricted  stock under the CIT Group Inc.
Long-Term  Equity  Compensation  Plan  (the  "Plan")  as set  forth in the Award
Agreement  annexed  hereto as Exhibit A. During the 2004 calendar year and prior
to September  2004,  provided  that  Executive is employed by the Company on the
date of grant,  the Company  shall grant,  pursuant to the terms of the Plan, to
the Executive options to purchase Company common stock having the aggregate fair
market value of $2,500,000.00 on the date of grant determined in accordance with
the terms of and standard  practice under the Plan (the "Option").  One-third of
the Option will vest, on a cumulative  basis,  on each of the first,  second and
third  anniversaries  of the date of grant.  During the 2004  calendar  year and
prior to September  2004,  provided that Executive is employed by the Company on
the date of grant,  the Company shall grant,  pursuant to the terms of the Plan,
to the  Executive  restricted  shares of the  Company's  common stock having the
aggregate fair market value of  $2,500,000.00 on the date of grant determined in
accordance  with  the  terms  of and  standard  practice  under  the  Plan  (the
"Restricted  Stock").  The  restrictions on the shares of Restricted Stock shall
lapse based on attainment of performance  targets set by the Company in its sole
discretion.  Grants of options or restricted  stock for calendar year 2005 shall
be determined  in accordance  with charter of the  Compensation  and  Governance
Committee, as then in existence.

            (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.  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,


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<PAGE>

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) Modifications.  The Company may at any time or from time to time
amend,  modify,  suspend or  terminate  any bonus or incentive  compensation  or
employee benefit plans or programs provided hereunder for any reason and without
the Executive's  consent;  provided that, without the Executive's  consent,  the
Company may not reduce the  aggregate  value of the  employee  benefit  plans or
programs provided to the Executive hereunder unless such reduction is consistent
with reductions affecting similarly situated employees of comparable rank of the
Company.

            (vi) 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.

            (vii) 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.

            (viii) Additional  Benefits.  In addition to the benefits  described
above,  the Company  shall  provide  the  following  additional  benefits to the
Executive:

                  A.  Financial  Planning.   The  Company  shall  reimburse  the
Executive for up to $20,000  annually for tax advice,  financial  counseling and
for accounting fees incurred by the Executive.

                  B. Car and Driver.  During the Term,  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.

                  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 the Chief Executive  Officer of the Company is not then
using the Company's corporate aircraft. When traveling for personal reasons, the
Executive shall be authorized to travel on the Company's  corporate  aircraft if
(i) the Chief  Executive  Officer of the Company is not then using the Company's
corporate  aircraft,  and (ii) 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.

      4. Termination of Employment.

      (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


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<PAGE>

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  Chief  Executive  Officer  of the  Company  or the  Board (if
Executive is then the Chief Executive  Officer),  which specifically  identifies
the manner in which the Chief Executive  Officer or if the Executive is then the
Chief  Executive  Officer,  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 Chief Executive Officer of the Company (or the
Board, if Executive is then the Chief Executive Officer of the Company) 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


                                      -4-
<PAGE>


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) the failure of the Board to elect or appoint  Executive  to the
position of Chief  Executive  Officer of the Company  within  twelve (12) months
after  the  Effective  Date,  provided  that the  Executive  provides  Notice of
Termination  within  thirty  (30) days of the date he  receives  notice from the
Company  that he shall not be  appointed  or  elected to the  position  of Chief
Executive Officer within the time period set forth herein; or

            (iii) 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

            (iv) 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

            (v) any  purported  termination  by the  Company of the  Executive's
employment otherwise than as expressly permitted by this Agreement; or

            (vi) 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, but excluding the value of
the guaranteed  bonuses and option and restricted stock grants,  as set forth in
Sections  3(b)(ii) and 3(b)(iii),  respectively) at least as favorable as in the
final year of the Executive's last Employment 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

            (vii) 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


                                      -5-
<PAGE>

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, unless the Executive terminates his employment for the
reason set forth in Section 4(c)(ii), in which case the Severance Bonus shall be
$2,200,000.  For the purpose of calculating the Executive's average Annual Bonus
hereunder, $1,300,000 shall be the Executive's Bonus for calendar year 2003; and

                  B. the amount  equal to the product of (x) 2.5 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 2.5
years, subject to compliance with Section 8 of this Agreement; and

                  C. if  Executive's  employment is terminated  pursuant to this
Section 5(a) after calendar year 2004 and during the Term, a lump sum payment in
the  amount of the  difference,  if any,  between  $2,200,000.00  and the actual
Annual  Bonus  paid  to him  for  2004  if  such  Annual  Bonus  was  less  than
$2,200,000.00.

            (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 and  restricted  stock granted to the
Executive  during 2003 and 2004,  the Executive  shall have a period of five (5)
years from the Date of  Termination  to


                                      -6-
<PAGE>

exercise them  (provided  that any such  extension  shall not extend the maximum
term during which any such option may be exercised beyond ten (10) years); and

            (iii)  subject  to  compliance  with  Section 8,  continued  benefit
coverage which permits the Executive to continue to receive,  for two and a half
(2.5)  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 obtains other employment that provides
for such benefit(s); and

            (iv) to the extent not  theretofore  paid or  provided,  the Company
shall  timely pay or  provide to the  Executive  any other  amounts or  benefits
required to be paid or provided  or which the  Executive  is eligible to receive
under any plan,  program,  policy or practice or  contract or  agreement  of the
Company and its affiliates in accordance with the terms and normal procedures of
each such plan, program, policy or practice; and

            (v) to the extent  permitted by applicable  law, the Executive shall
be  credited  with two  additional  years of age and  service  credit  under all
relevant Company retirement plans (including qualified,  supplemental and excess
plans,  including without  limitation the Company's  Executive  Retirement Plan,
and, for the purpose of clarity, to the extent the Executive is a participant in
the cash balance  arrangement  under the  Company's  Retirement  Plan,  the cash
balance  account  will  be  increased  as if  the  Executive  had  received  two
additional years of contributions based upon the Executive's  compensation as of
the Date of Termination); and

            (vi) the Company  shall  provide  the  Executive  with  outplacement
services,  not to exceed a  reasonable  cost,  until the  Executive  accepts new
employment.

      (b) Cause and Without Good Reason. If the Executive's  employment shall be
terminated for Cause or the Executive  terminates  his  employment  without Good
Reason  during  the  Term,  this  Agreement  shall  terminate   without  further
obligations to the Executive  other than the obligation to pay or provide to the
Executive  an amount  equal to the  amount  described  in clause  (1) of Section
5(a)(i)(A)  above and timely  payment or  provision of the benefits set forth in
Section 5(a)(iv) above, in each case to the extent theretofore unpaid.

      (c) Death.  If the  Executive's  employment is terminated by reason of the
Executive's  death  during the Term,  this  Agreement  shall  terminate  without
further  obligations  to  the  Executive's  legal   representatives  under  this
Agreement,  other than for (i)  payment of a lump sum cash  amount  equal to the
Executive's  Annual  Base  Salary as in  effect  at the time of the  Executive's
death,  (ii) payment of the amount set forth in Section  5(a)(i)(A)  above;  and
(iii) timely payment or provision of the benefits set forth in Section  5(a)(iv)
above. In addition,  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. The payments provided for in subsections (i) and (ii) of
this Section 5(c)


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<PAGE>

shall be paid to the Executive's estate or beneficiary, as applicable, in a lump
sum in cash within 30 days of the Date of Termination.

      (d) Disability.  If the Executive's  employment is terminated by reason of
the  Executive's  Disability,  this Agreement  shall  terminate  without further
obligations  to the  Executive,  other  than for (i)  payment of a lump sum cash
amount equal to the  Executive's  Annual Base Salary as in effect at the time of
the  Executive's  disability,  (ii)  payment  of the amount set forth in Section
5(a)(i)(A)  above (payable to the Executive in a lump sum in cash within 30 days
of the Date of  Termination);  and (iii)  timely  payment  or  provision  of the
benefits set forth in Section  5(a)(iv) above. In addition,  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. To the extent
permitted by  applicable  law and in  accordance  with the  Company's  Long-Term
Disability  plan, the Executive  shall continue to accrue age and service credit
through  retirement  for purposes of the Company's  qualified  and  nonqualified
retirement plans.

      (e) Retirement.  If the Executive's  employment is terminated by reason of
his retirement under the terms of the applicable  Company retirement plan during
the Term,  this Agreement shall  terminate  without  further  obligations to the
Executive  other  than for (i)  payment  of the  amount  set  forth  in  Section
5(a)(i)(A)  above (payable to the Executive in a lump sum in cash within 30 days
of the Date of Termination) and (ii) timely payment or provision of the benefits
set forth in Section 5(a)(iv) above.

      (f) Non-exclusivity of Rights. Except as specifically provided, nothing in
this  Agreement  shall  prevent or limit the  Executive's  continuing  or future
participation in any plan,  program,  policy or practice provided by the Company
or any of its affiliates and for which the Executive may qualify,  nor,  subject
to Section 12(e), shall anything herein limit or otherwise affect such rights as
the Executive  may have under any contract or agreement  with the Company or its
affiliates.  Amounts  which  are  vested  benefits  or which  the  Executive  is
otherwise entitled to receive under any plan, policy, practice or program of, or
any contract or agreement  with,  the Company or its affiliates at or subsequent
to the Date of  Termination  shall be  payable  in  accordance  with such  plan,
policy,  practice  or program or  contract  or  agreement  except as  explicitly
modified by this  Agreement.  As used in this Agreement,  the terms  "affiliated
companies" and "affiliates" shall include any company controlled by, controlling
or under common control with the Company.

      6. Full Settlement. The Company's obligation to make the payments provided
for in this Agreement and otherwise to perform its  obligations  hereunder shall
not be  affected  by any  set-off,  counterclaim,  recoupment,  defense or other
claim,  right or action  which the Company may have  against  the  Executive  or
others. In no event shall the Executive be obligated to seek other employment or
take any  other  action  by way of  mitigation  of the  amounts  payable  to the
Executive  under any of the provisions of this Agreement and, such amounts shall
not be reduced  whether  or not the  Executive  obtains  other  employment.  The
Company  agrees to pay, to the full extent  permitted by law, all legal fees and
expenses  which the  Executive may  reasonably  incur as a result of any contest
(regardless of the outcome  thereof) by the Company,  the Executive or others of
the validity or  enforceability  of, or liability  under,  any provision of


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<PAGE>

this Agreement or any guarantee of performance thereof (including as a result of
any contest by the  Executive  about the amount of any payment  pursuant to this
Agreement),  plus in each case interest on any delayed payment at the applicable
Federal rate provided for in Section  7872(f)(2)(A) of the Internal Revenue Code
of 1986,  as amended (the  "Code"),  if the  Executive  prevails on any material
claim made by the Executive and disputed by the Company under this Agreement.

      7.  Certain  Additional  Payments by the  Company.  If at any time for any
reason any payment or  distribution  (a  "Payment")  by the Company or any other
person or entity to or for the benefit of the  Executive is  determined  to be a
"parachute  payment"  (within  the meaning of Section  280G(b)(2)  of the Code),
whether paid or copayable or distributed or distributable  pursuant to the terms
of  this  Agreement  or  otherwise  in  connection  with or  arising  out of his
employment  with the Company or a change in  ownership  or excise tax imposed by
Section 4999 of the Code (the "Excise Tax"),  within a reasonable period of time
after such  determination  is reached the Company  shall pay to the Executive an
additional payment (the Gross-Up Payment") in an amount such that the net amount
retained by the Executive, after deduction of any Excise Tax on such Payment and
any federal,  state or local income or employment  tax or other taxes and Excise
Tax on the Gross-Up Payment,  shall equal the amount of such Payment  (including
any  interest  or  penalties  with  respect  to  any  of  the  foregoing).   All
determinations  concerning the  application of the foregoing  shall be made by a
nationally  recognized  firm of  independent  accountants  (together  with legal
counsel of its choosing),  selected by the Company after  consultation  with the
Executive (which may be the Company's independent auditors), whose determination
shall be  conclusive  and binding on all parties.  The fees and expenses of such
accountants  and counsel shall be borne by the Company.  If the accounting  firm
determines that no Excise Tax is payable by the Executive,  it shall furnish the
Executive  with an opinion that the Executive has  substantial  authority not to
report  any  Excise  Tax on his  Federal  income  tax  return.  In the event the
Internal  Revenue  Service  assesses  the  Executive  an amount of Excise Tax in
excess of that  determined in accordance  with the foregoing,  the Company shall
pay to the Executive an  additional  Gross-Up  Payment,  calculated as described
above in respect of such  excess  Excise Tax,  including  a Gross-Up  Payment in
respect of any interest or penalties  imposed by the  Internal  Revenue  Service
with respect to such excess Excise Tax.

      8. Confidentiality and Competitive Activity.

      (a) The Executive  acknowledges  that he has acquired and will continue to
acquire during the Term confidential  information  regarding the business of the
Company and its respective affiliates.  Accordingly,  the Executive agrees that,
without the written consent of the Board, he will not, at any time,  disclose to
any unauthorized person or otherwise use any such confidential information.  For
this purpose,  confidential  information means nonpublic information  concerning
the financial data,  business  strategies,  product development (and proprietary
product  data),   customer  lists,   marketing  plans,  and  other   proprietary
information  concerning  the Company and its respective  affiliates,  except for
specific items which have become  publicly  available  other than as a result of
the Executive's breach of this agreement. Notwithstanding the foregoing, nothing
herein shall prevent  Executive  from  responding  to lawful  subpoenas or court
orders without the Company's prior written consent; provided, that the


                                      -9-
<PAGE>

Executive shall have given the Company prior written notice of any such subpoena
or court order promptly following receipt thereof.

      (b) During the time that the  Executive  is employed by the Company  under
this Agreement and for one year after the Date of Termination  (two years in the
case of a termination by the Executive without Good Reason or by the Company for
Cause),  the  Executive  will not,  without  the  written  consent of the Board,
directly or  indirectly  (A)  knowingly  engage or be  interested  in (as owner,
partner,   stockholder,   employee,  director,  officer,  agent,  consultant  or
otherwise),  with or without  compensation,  any  business in the United  States
which is in competition  with any line of business  actively being  conducted on
the Date of  Termination by the Company,  unless such line of business  accounts
for less than ten percent  (10%) of the gross  revenues of the Company as of the
Date of Termination,  and (B) disparage or publicly criticize the Company or any
of its  affiliates.  Nothing herein,  however,  will prohibit the Executive from
acquiring  or holding not more than one percent of any class of publicly  traded
securities  of any such  business;  provided  that such  securities  entitle the
Executive to not more than one percent of the total  outstanding  votes entitled
to be  cast by  securityholders  of such  business  in  matters  on  which  such
securityholders are entitled to vote.

      (c) During the time that the  Executive  is employed by the Company  under
this  Agreement  and then for two  years  after the Date of  Termination  of the
employment of the Executive for any reason,  the Executive will not, without the
written  consent of the Board,  directly or indirectly,  hire any person who was
employed by the Company or any of its  subsidiaries  or  affiliates  (other than
persons  employed in a clerical or other  non-professional  position) within the
six-month period preceding the date of such hiring, or solicit, entice, persuade
or  induce  any  person  or  entity  doing  business  with the  Company  and its
respective  affiliates,  to  terminate  such  relationship  or to  refrain  from
extending or renewing the same.

      (d) The Executive hereby  acknowledges that the provisions of this Section
8 are  reasonable  and  necessary  for the  protection  of the  Company  and its
respective affiliates. In addition, he further acknowledges that the Company and
its respective  affiliates will be irrevocably damaged if such covenants are not
specifically  enforced.  Accordingly,  the Executive agrees that, in addition to
any other  relief to which the Company  may be  entitled,  the  Company  will be
entitled to seek and obtain  injunctive  relief  (without the requirement of any
bond) from a court of competent jurisdiction for the purposes of restraining him
from an actual or threatened breach of such covenants.  In addition, and without
limiting  the  Company's  other  remedies,  in the  event of any  breach  by the
Executive of such  covenants,  the Company will have no obligation to pay any of
the amounts that continue to remain  payable to the Executive  after the date of
such breach under Section 5 hereof.

      9. Change of Control.

            (a) Contract  Extension.  In the event of a Change of Control during
the Term, the Term shall be extended to the second  anniversary of the Change of
Control (such two year period, the "Change of Control Extension Period").

            (b)  Payment  of  Severance.   If  the  Executive's   employment  is
terminated  without  Cause or by the Executive for Good Reason during the Change
of Control


                                      -10-
<PAGE>

Extension  Period,  the  Executive  will receive the  compensation  and benefits
already  required  under the  provisions  of this  Agreement;  provided that the
payments set forth in Section  5(a)(i)(B)  shall be payable in a lump sum within
30 days after the Date of Termination.

            (c) No Plan Modification. In the event of a Change of Control during
the Term, Section 3(b)(v) shall not be effective.

            (d) Change of Control  Defined.  For purposes of this  Agreement,  a
"Change of Control" shall be deemed to have occurred if:

                  (i) any  Person or Group,  as a result  of a  Transaction  (as
defined  below)  or  otherwise,   becomes  the  Beneficial  Owner,  directly  or
indirectly,  of securities  representing a majority of the combined voting power
of the Company's then outstanding  securities generally entitled to vote for the
election of directors  (capitalized  terms not otherwise defined herein are used
as defined under the Securities Exchange Act of 1934, as amended,  and the rules
and regulations promulgated thereunder); or

                  (ii) as a direct or indirect  result of any cash tender offer,
acquisition of securities, merger or other business combination,  acquisition or
sale of assets,  actual or threatened election contest (including any settlement
thereof  or any  agreement  intended  to  avoid or  settle  such a  contest)  or
contractual arrangement,  or any combination of the foregoing (a "Transaction"),
the persons who were directors of the Company immediately before the Transaction
(the  "Incumbent  Board")  shall cease to  constitute at least a majority of the
Board of the  Company or any  successor  to the  Company  (including  any entity
resulting  from  such  Transaction  or which,  as a result of such  Transaction,
directly or indirectly  owns or controls the Company or such successor or all or
substantially  all of its assets);  provided that any person becoming a director
thereafter  whose  election as a director  was  approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be deemed to
be a member of the Incumbent Board.

      10. Successors.

      (a) This  Agreement  is  personal to the  Executive  and without the prior
written  consent  of the  Company  shall  not  be  assignable  by the  Executive
otherwise than by will or the laws of descent and  distribution.  This Agreement
shall  inure to the  benefit  of and be  enforceable  by the  Executive's  legal
representatives.  This  Agreement  shall  inure to the benefit of and be binding
upon the Company and its successors and assigns.

      (b) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business  and/or assets of the Company to assume  expressly and agree to perform
this  Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. As used in this
Agreement,  "Company"  shall mean the  Company as  hereinbefore  defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.

      11.  Representations.  Executive expressly  represents and warrants to the
Company that as of the date of his signing this Agreement that he is not a party
to any contract or


                                      -11-
<PAGE>

agreement  which will or may  restrict  in any way his  ability  to perform  his
duties and responsibilities under this Agreement, and that he will not after the
date of signing this Agreement become a party to any contract or agreement which
will or may  restrict in any way his ability to perform  this duties  under this
Agreement,  and that the  performance  of his  duties for the  Company  will not
breach any agreements with former employers.

      12. Miscellaneous.

      (a) This Agreement  shall be governed by and construed in accordance  with
the laws of the State of New York without reference to principles of conflict of
laws. The parties hereto  irrevocably  agree to submit to the  jurisdiction  and
venue of the  courts of the States of New York or New  Jersey,  in any action or
proceeding  brought with respect to or in connection  with this  Agreement.  The
captions of this Agreement are not part of the provisions  hereof and shall have
no force or effect. This Agreement may not be amended or modified otherwise than
by a written  agreement  executed  by the  parties  hereto  or their  respective
successors  and legal  representatives.  All  notices  and other  communications
hereunder  shall be in writing and shall be given by hand  delivery to the other
party or by registered or certified  mail,  return  receipt  requested,  postage
prepaid, addressed as follows:

      If to the Executive:

      At the most recent home address on file for the Executive at the Company;


      If to the Company:
      1 CIT Drive
      Livingston, New Jersey 07039
      Attention:  General Counsel

or to such other  address as either  party shall have  furnished to the other in
writing in accordance  herewith.  Notice and  communications  shall be effective
when actually received by the addressee.

            (b) The  invalidity  or  unenforceability  of any  provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.

            (c) The Company may  withhold  from any amounts  payable  under this
Agreement  such  Federal,  state,  or local  taxes as  shall be  required  to be
withheld pursuant to any applicable law or regulation.

            (d) The  Executive's or the Company's  failure to insist upon strict
compliance  with any  provision  of this  Agreement or the failure to assert any
right the  Executive  or the  Company  may have  hereunder,  including,  without
limitation,  the right of the Executive to terminate  employment for Good Reason
pursuant to Section 4 of this  Agreement,  shall not be deemed to be a waiver of
such provision or right or any other provision or right of this Agreement.


                                      -12-
<PAGE>

            (e)  From  and  after  the  Effective  Date,  this  Agreement  shall
supersede any term sheet,  employment,  severance or change of control agreement
between the parties or severance or change of control plan, program or policy of
the Company  covering the Executive with respect to the subject matter except as
expressly provided herein.


                                      -13-
<PAGE>

      IN WITNESS  WHEREOF,  the Executive has hereunto set the Executive's  hand
and, pursuant to the  authorization  from its Board of Directors and the Company
have caused these  presents to be executed in its name on its behalf,  all as of
the day and year first above written.

                                                --------------------------------
                                                        Jeffrey M. Peek
                                                CIT GROUP INC.

                                                By
                                                  ------------------------------