CIT Group (CIT) Sees $60M Charge on Management Reorganization

On December 8, 2015, CIT Group (NYSE: CIT) announced that, in connection with a reorganization of management, Joseph Otting, Co-President of CIT and President and Chief Executive Officer of CIT Bank, N.A., (“CIT Bank”), Nelson Chai, Co-President of CIT and Vice Chairman of CIT Bank, and Lisa Polsky, Executive Vice President and Chief Risk Officer of CIT, will cease to be officers of the Company, effective immediately. Pursuant to the terms of Mr. Otting’s Retention Letter Agreement with the Company, dated July 21, 2014, which was attached as Exhibit 10.3 to Form 8-K filed July 25, 2014, Mr. Otting will be entitled to certain compensation and vesting of equity grants in connection with the termination of his services. Pursuant to the terms of Mr. Chai’s Retention Letter Agreement with the Company, dated July 21, 2014, which was attached as Exhibit 10.4 to Form 8-K filed July 25, 2014, and the attached form of equity award, Mr. Chai will be entitled to vesting of equity grants in connection with the termination of his services. Mr. Chai and Ms. Polsky will be entitled to benefits under the CIT Employee Severance Plan.

The Company estimates that it will take a restructuring charge of approximately $60 million, most of which will be recorded during the fourth quarter of 2015, for the above actions and certain other organizational changes.

On December 8, 2015, CIT announced that the Board of Directors (the “Board”) appointed Ellen R. Alemany as Chief Executive Officer and President of CIT Bank, effective immediately. Previously, Ms. Alemany was appointed as Vice Chairman of CIT on October 19, 2015 and was designated by the Board to succeed John A. Thain as Chief Executive Officer of the Company and Chairman of the Board of Directors of CIT Bank, N.A., effective April 1, 2016.

The Board also appointed Robert C. Rowe (54) as Chief Risk Officer of CIT and CIT Bank. Mr. Rowe has served as Executive Vice President and Chief Credit Officer of CIT since June 2, 2010. Prior to CIT, Mr. Rowe served as Senior Credit Officer – Commercial Banking of FirstMerit Bank from September 2009 to May 2010. He previously served as Chief Credit Officer of National City Bank, after serving in various roles of increasing responsibility in their Corporate Banking and Credit departments from 1990 to September 2009. Before National City, he served as Account Officer and Assistant Treasurer at Irving Trust (now Bank of New York Mellon). He received his Bachelor of Arts in Economics from Boston College and Masters in Business Administration from Indiana University.

The Board approved an amendment to existing, unvested equity award agreements under the Company’s Long-Term Incentive Plan to change the definition of retirement. Under the existing definition, “retirement” is defined as an employee electing to retire upon attaining age 55 with at least 11 years of service to the Company or age 65 with at least 5 years of service to the Company. The existing, unvested award agreements will be amended to expand the definition of retirement eligibility to include employees attaining age 60 with at least 6 years of service to the Company.

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