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EXHIBIT 10.M
AMENDMENT TO EMPLOYMENT AGREEMENT
THIS AMENDMENT TO EMPLOYMENT AGREEMENT ("Amendment") is entered into
as of August 10, 1995, between The FINOVA Group Inc. (formerly GFC Financial
Corporation), a Delaware corporation ("Company") and Xxxxxx X. Xxxxxxxxxxx
("Executive").
WHEREAS, the Company and Executive entered into an Employment
Agreement as of the 16th day of March, 1992 ("Employment Agreement"), and
WHEREAS, the Employment Agreement was allowed to continue for a period
of one year beyond its Term (as defined in the Employment Agreement) with an
Extended Term (as defined in the Employment Agreement) expiring March 15, 1996;
and
WHEREAS, Executive acknowledges that on August 10, 1995 he has
received notice of termination of the Employment Agreement effective upon the
close of business on March 15, 1996, with the understanding that a new
employment agreement will be entered between the Company and Executive
substantially on the terms and conditions authorized by the Company's Executive
Compensation Committee (the "Committee"), with the final agreement to be
approved by the Committee; and
WHEREAS, on August 10, 1995 the Committee and the Company's Board of
Directors authorized this Amendment to adopt and implement as a part of the
Employment Agreement a Chief Executive Officer Value Sharing Plan on the terms
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants contained in
the Employment Agreement and this Amendment, the Company and Executive hereby
agree to amend the Employment Agreement by adding a new paragraph 19 as
follows:
19. CEO Value Sharing Plan.
Executive shall, as of the date hereof, participate in a CEO
Value Sharing Plan as follows:
(a) PURPOSE. The purpose of the CEO Value Sharing Plan
is to act as a retention device by providing significant rewards for equally
significant shareholder value creation. This is accomplished by sharing a
portion of created value in the form of cash payments to Executive.
(b) PERFORMANCE OBJECTIVES. Stock price hurdles have
been established at $55, $70 and $85 per share or their equivalent. The first
hurdle ($55) is $15 per share greater than the current market price of $40 per
share or its equivalent. These translate into cumulative percentage increases
in the stock price of 37.5%, 75.0% and 112.5% respectively.
(c) MEASURING ACHIEVEMENT. A hurdle is considered
achieved when the average closing price of Company common stock is equal to, or
greater than, the hurdle price during any 20 consecutive trading days.
(d) PAYMENT AMOUNTS. When a hurdle is achieved,
Executive will receive a cash payment according to the attached schedule (CEO
Value Sharing Plan: Stock Price Hurdles and Payments). As appropriate,
calculations of amounts due or available for distribution under this plan shall
be adjusted for all recapitalizations of the Company's common stock.
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(e) EXCISE TAXES. Company shall gross-up any applicable
excise taxes resulting from payments under this plan.
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed as of the day and year set forth above.
ATTEST: The FINOVA Group Inc.
By /s/ Xxxxxxxx X. Xxxxxxxx By /s/ X.X. Xxxxxxxx
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Assistant Secretary Senior Vice President
/s/ X. Xxxxxxxxxxx
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Xxxxxx X. Xxxxxxxxxxx
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CEO VALUE SHARING PLAN: STOCK PRICE HURDLES AND PAYMENTS
AUGUST 1995
MARGINAL CUM. MARGINAL CUMULATIVE % OF % OF
STOCK % INC % INC SHAREHOLDER SHAREHOLDER PAYMENT MARGINAL CUMULATIVE
PRICE HURDLE TO $40 TO VALUE VALUE AT EACH CUMULATIVE VALUE VALUE
HURDLE HURDLE (A) HURDLE CREATED (B) CREATED HURDLE PAYMENTS SHARED SHARED
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$55 37.5% 37.5% 420,000,000 420,000,000 3,150,000 3,150,000 0.75% 0.75%
$70 27.3% 75.0% 420,000,000 840,000,000 6,300,000 9,450,000 1.50% 1.13%
$85 21.4% 112.5% 420,000,000 1,260,000,000 9,450,000 18,900,000 2.25% 1.50%
NOTES:
(a) The Marginal % Increase of 37.5% for the $55 hurdle is based on a base price
of $40 per share.
(b) The estimated shareholder value created is calculated by multiplying the
increase in the price per share by the estimated number of shares outstanding.
As a beginning point, the approximate value of the company is established at $40
x 28 million shares or $1,120,000,000. Each $15 per share increase results in
additional shareholder value of $420,000,000.
