2003 Committee Charter : CITCIT Group Inc.
Charter of the Compensation and Governance Committee
of the Board of Directors
A. "CIT" means CIT Group Inc., a Delaware corporation.
B. "Board" means the Board of Directors of CIT.
C. "Committee" means the Compensation and Governance Committee of the Board
D. "Chairman" means the Chairman of the Committee.
E. "Equity Awards" means grants of equity securities, stock options, restricted stock, stock appreciation rights, stock units or any other award consisting of or relating to the stock or any security (or phantom stock or any other derivative security) of CIT under or pursuant to any present or future stock option, incentive compensation, employee benefit or other plan of CIT.
F. "Executive Officers" means the officers of CIT designated as "executive officers" by the Board from time to time for purposes of Section 16 of the Securities Act of 1934, as amended, and regulations adopted pursuant thereto.
G. "CEO" means the Chief Executive Officer of CIT.
H. "Employment Agreements" means all employment, retention, and similar agreements.
II. Compensation and Governance Committee Purpose
The Committee is appointed by the Board to assist the Board in fulfilling its oversight and decision-making functions with respect to matters pertaining to corporate governance and director and executive officer compensation and benefits. More specifically, the Board has assigned and delegated authority to the Committee, as set forth in detail below, to maintain corporate governance and compensation practices that are consistent with the highest standards and in full compliance with applicable regulatory requirements.
The purposes and provisions specified in this Charter are meant to serve as guidelines, and the Committee is delegated the authority to adopt such additional procedures and standards as it deems necessary from time to time to fulfill its responsibilities. Nothing herein is intended to expand applicable standards of liability under state or federal law for directors of a corporation.
III. Committee Composition and Meetings
A. The Board will appoint the Committee's members and the Chairman annually at the first meeting of the Board following CIT's annual stockholders' meeting. The Board may, at any time, remove any member of the Committee and fill the vacancy created by such removal in accordance with the terms of this Charter.
B. The Committee will have a minimum membership of two directors. Each director on the Committee shall be an outside director, as such term is defined in Exhibit A.
C. The Chairman will report from time to time, no less than annually, to the Board on the Committee's activities.
D. CIT's Secretary or an Assistant secretary (or the designee of the Secretary) will keep minutes of all of the Committee's meetings, and shall maintain such minutes with CIT's corporate records.
E. The Committee shall meet as determined in the discretion of the Chairman or a majority of its members, as circumstances dictate or as may be required by applicable legal requirements.
F. The Committee may, at its sole discretion, engage from time to time, outside advisors (at CIT's expense) who are independent from CIT, including, without limitation, director search firms and compensation consultants. The Committee is entitled to have direct access to such consultants, specialists and legal counsel without the presence of any officer of CIT.
IV. Committee Responsibilities
A. Compensation of CEO. The Committee shall review and approve corporate goals and objectives relevant to CEO compensation, evaluate the CEO's performance in light of such goals and objectives, and recommend to the Board for its approval the CEO's compensation, including annual salary and bonuses, based on this evaluation;
B. Long Term Incentives Awarded to CEO. The Committee shall recommend to the Board for its approval the long-term incentive component of the CEO's compensation and, in doing so, shall consider (at a minimum) CIT's performance and relative shareholder return, the value of similar incentive awards granted to CEOs at comparable companies, and long-term incentive awards granted to the CEO in past years.
C. Compensation of Executive Officers and Directors. The Committee shall review the CEO's recommendations, and approve, the annual salary, bonus, and Equity Awards for all Executive Officers other than the CEO;
D. Director Compensation. The Committee shall approve compensation payments and programs (including, without limitation, retainer fees, meeting fees, chairperson fees, long term compensation, benefits and perquisites) for directors (other than directors who are also employees of CIT);
E. Approve Compensation and Benefit Plans. The Committee shall review and approve any plan or program, or any amendment thereto or termination thereof, providing for long or short term incentives, Equity Awards, executive retirement plans, executive severance plans, the deferral of compensation, or any similar form of compensation or executive benefits in which the directors, Executive Officers, or any of them, are participants.
F. Succession Plans. The Committee shall review with the CEO, at least on an annual basis, the CEO's succession plan. The CEO shall also review with the Committee any proposal to hire a new employee, or promote an existing employee, to an Executive Officer position.
G. Administration of Plans. The Committee shall perform the duties assigned to the Committee in any present or future compensation, retirement or employee benefit plan of CIT.
H. Approval of Aggregate Equity Awards. The Committee shall authorize the CEO (and his designees), to issue, in the aggregate, Equity Awards to employees of CIT and its subsidiaries, other than Executive Officers.
I. Grant of Equity Awards to New Hires and Promoted Employees. The Committee authorizes the CEO to make Equity Awards to newly hired employees and employees who have been promoted; provided, that (1) such employees are neither Executive Officers nor directors, (2) such Equity Awards are effective as of the date of the first board meeting following the hire or promotion date, as applicable, and (3) the amount and terms of such Equity Awards are consistent with Equity Awards made to employees in similar positions.
J. Compensation Policies and Structure. The Committee shall review, at least annually, CIT's executive compensation policies with CIT's Executive Vice President – Human Resources. In addition, the Committee shall participate in the preparation and approval of the Report of the Compensation Committee contained in CIT's annual meeting proxy statement, which report describes the performance factors the Committee relied on in determining the compensation of the CEO, as well as a discussion of the Committee's general policies with respect to executive compensation. The Committee shall review and approve any significant modifications to CIT's salary range structure, bonus and long-term incentive targets, and salary increase guidelines for Executive Officers.
K. Perquisites. The Committee shall review and approve any plan or program which provides for the grant or payment of fringe benefits to or for the benefit of Executive Officers, except for plans or programs that are similarly offered to all or a large group of CIT's employees and are not expected to result in an annual cost to CIT in excess of $1 million.
L. Employment Agreements. The Committee shall review and approve all Employment Agreements to which an Executive Officer, other than the CEO, is a party. Any Employment Agreement to which the CEO is a party shall be reviewed by the Committee so that a recommendation may be made to the Board regarding the approval of such agreement.
M. Board Structure and Functions. The Committee shall periodically review the structure, duties, size, membership and functions of the Board and its committees and recommend appropriate changes to the Board.
N. Board Meetings. The Committee shall review the format and frequency of Board and committee meetings and propose appropriate changes to the Board.
O. Evaluation of Board Members. Upon request or as required, the Committee shall review performance, qualification or other related issues concerning Board members.
P. Governance Policies. The Committee shall review, at least bi-annually, the Committee's governance policies with CIT's general counsel, and review with CIT's general counsel any litigation or governmental proceedings, legal compliance matters, including corporate securities trading policies, and any proposed stockholder resolutions or other actions, in each case relating to CIT's governance policies, that would have a significant impact on CIT.
Q. Conflicts of Interest. The Committee shall advise the Board as to whether a director has a conflict of interest with respect to any issues and determine whether such director should vote on any such issue. In furtherance thereof, the Committee shall take appropriate steps to identify such potential conflicts of interests and to ensure that a majority of the directors voting on an issue are informed, disinterested and independent with respect to such issue.
R. Nomination of Board Members. The Committee shall identify and recommend to the Board qualified candidates (1) to fill vacancies on the Board and any committee of the Board and (2) to serve as director nominees for the next annual meeting of shareholders.
S. Corporate Governance Principles. The Committee shall develop and recommend to the Board corporate governance principles applicable to CIT.
T. General. The Committee shall counsel the Board on other Board governance matters and undertake such other related responsibilities as the Board or its Chairman may request. In addition the Committee shall conduct an annual performance evaluation of the Committee.
DEFINITION OF OUTSIDE DIRECTOR
A director shall be an "outside director" if such director:
1. is determined by the Board as having no material relationship with CIT (either directly or as a partner, shareholder or officer of an organization that has a relationship with CIT);
2. is not currently an employee of CIT or any of its affiliates and neither was an employee during the preceding five years nor was ever an officer of CIT or any of its affiliates;
3. is not a former employee of CIT or any of its affiliates who receives compensation for prior services during the taxable year (except for benefits under a qualified retirement plan);
4. has no business or professional relationship with CIT either personally or through a company of which the director is an employee or officer or has an ownership interest of at least 5% (1) that is material to CIT or to the director or (2) to which CIT is indebted in an aggregate amount in excess of 5% of CIT's total consolidated assets at the end of the last fiscal year;
5. is not an immediate family member of an individual who is, or during the past five years was, either (i) an executive officer of CIT or (ii) an affiliate or employee of CIT's current or former auditor; and
6. has no close family relationship (by blood or marriage) with a member of senior management of CIT or one of its affiliates;
7. is not, and during the past five years was not, an employee of another business entity, if any executive officer of CIT serves is, or at such time was, a member of such business entity's board of directors or compensation committee;
8. does not receive any compensation (other than in such director's capacity as a board member) either directly from CIT or indirectly through a payment to an entity in which the director has a beneficial ownership interest of 10% of more and no person with a close family relationship has received any such compensation, either directly or indirectly; and
9. does not personally receive from and is not an employee of a foundation, university, or other institution that receives grants or endowments from CIT or any foundation controlled by CIT that are material either to CIT, the director, or the institution, unless the Committee, on an annual basis, makes a determination that the grant or endowment does not interfere with that director's exercise of independent judgment and CIT disclosed the grant or endowment in its proxy materials;
For the purposes of this definition, an "affiliate" of CIT shall have the same meaning as that set forth in NYSE Rule 303.02(B).