23
SEVERANCE AGREEMENT
THIS AGREEMENT is made as of October 31, 1996 between
Trans Leasing International, Inc., a Delaware corporation (the
"Company"), and Larry S. Grossman ("Executive").
The Company considers the establishment and maintenance
of a sound and vital management to be essential to protecting and
enhancing the best interests of the Company and its stockholders.
Accordingly, the Board of Directors of the Company (the "Board")
has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of
members of the Company's management, including Executive, to
their assigned duties without distraction. In order to induce
Executive to remain in the employ of the Company, this Agreement
sets forth the severance benefits Executive shall receive in the
event Executive's employment with the Company is terminated under
the circumstances described herein.
In consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Definitions. For purposes of this Agreement, the
following words and phrases shall have the following meanings:
"Cause" shall mean (i) the commission of a felony or a
crime involving moral turpitude or the commission of any other
act or omission involving dishonesty, disloyalty or fraud with
respect to the Company or any of its Subsidiaries or any of their
customers or suppliers, (ii) conduct tending to bring the Company
or any of its Subsidiaries into substantial public disgrace or
disrepute, (iii) substantial and repeated failure to perform
duties as reasonably directed by the Board (other than the
failure to take any action that would constitute Good Reason),
(iv) gross negligence or willful misconduct with respect to the
Company or any of its Subsidiaries or (v) any other material
breach of this Agreement which is not cured within 15 days after
written notice thereof to Executive.
"Good Reason" shall mean, without the approval of
Executive, (a) the assignment to Executive of duties inconsistent
with Executive's positions, duties, responsibilities and status
with the Company, a change in Executive's titles or offices, or
any removal of Executive from or any failure to re-appoint
Executive to any of such positions, except in connection with the
termination of Executive's employment for Cause or as a result of
Executive's resignation, death or permanent disability or
incapacity (permanent disability or incapacity to be determined
by the Board in its good faith judgment) or by Executive other
than for Good Reason; (b) a reduction in Executive's base salary;
or (c) the Company's requiring Executive to be based anywhere
other than within 50 miles of Executive's present office
location, except for required travel on the Company's business to
an extent substantially consistent with Executive's present
business travel obligations.
"Subsidiaries" shall mean any corporation of which the
securities having a majority of the voting power in electing
directors are, at the time of determination, owned by the
Company, directly or through one of more Subsidiaries.
2. Term of Agreement. This Agreement shall commence
on the date hereof and shall continue in effect through the third
anniversary of the date hereof; provided that commencing on the
third anniversary of the date hereof and on each subsequent
anniversary during the term of this Agreement, the term of this
Agreement shall automatically be extended for one additional year
unless not later than three months prior to the next scheduled
termination date, the Company shall have notified Executive in
writing that it does not intend to extend this Agreement (the
"Agreement Period").
3. Termination. If during the Agreement Period, the
Company shall terminate Executive's employment with the Company
without Cause, other than as a result of Executive's resignation,
death or permanent disability or incapacity (permanent disability
or incapacity to be determined by the Board in its good faith
judgment), or Executive shall terminate his employment with the
Company for Good Reason, Executive shall be entitled to receive
(a) a severance payment, payable in cash in one lump sum within
30 days after the date of such termination, subject to customary
withholding, in an amount equal to three times his annual base
salary in effect prior to such termination and (b) outplacement
services provided by an outplacement firm of Executive's choice
(the cost of such services to be paid by the Company not to
exceed 20% of Executive's base salary); provided, however, that
if Section 280G of the Internal Revenue Code is applicable, in no
event shall the amount of such severance benefits when taken
together with all other amounts included in the calculation of
"parachute payment" (as such term is used in Section 280G of the
Internal Revenue Code) exceed 299.9% of Executive's "base amount"
(as such term is used in Section 280G of the Internal Revenue
Code); and provided further that Executive will only be entitled
to such severance benefits if he has not breached and does not
breach the provisions of paragraphs 4, 5 and 6 hereof. The
Company may offset any amounts Executive owes it or its
Subsidiaries against any amounts it owes Executive hereunder.
Notwithstanding anything in this Agreement to the contrary, the
Company may terminate Executive's employment at any time, subject
to providing the benefits specified herein.
4. Confidential Information. Executive acknowledges
that the information, observations and data obtained by him while
employed by the Company and its Subsidiaries concerning the
business or affairs of the Company or any Subsidiary
("Confidential Information") are the property of the Company or
such Subsidiary. Therefore, Executive agrees that he shall not
disclose to any unauthorized person or use for his own purposes
any Confidential Information without the prior written consent of
the Board, unless and to the extent that the aforementioned
matters become generally known to and available for use by the
public other than as a result of Executive's acts or omissions.
Nothing herein shall prevent Executive from making (i) any
disclosure that is required by applicable law or the order of a
court of competent jurisdiction, or (ii) any disclosure, in good
faith, to properly fulfill Executive's duties. Executive shall
deliver to the Company at the termination of his employment with
the Company, or at any other time the Company may request, all
memoranda, notes, plans, records, reports, computer tapes,
printouts and software and other documents and data (and copies
thereof) relating to the Confidential Information, Work Product
(as defined below) or the business of the Company or any
Subsidiary which he may then possess or have under his control.
5. Work Product. Executive acknowledges that all
innovations, improvements, developments, methods, analyses,
reports and all similar or related information which relate to
the Company's or any of its Subsidiaries' actual or anticipated
business, research and development or existing or future products
or services and which are conceived, developed or made by
Executive while employed by the Company and its Subsidiaries
("Work Product") belong to the Company or such Subsidiary.
Executive shall promptly disclose such Work Product to the Board
and perform all actions reasonably requested by the Board
(whether before or after the termination of Executive's
employment with the Company) to establish and confirm such
ownership (including, without limitation, assignments, consents,
powers of attorney and other instruments).
6. Non-Compete, Non-Solicitation.
(a) In further consideration of the compensation to be
paid to Executive hereunder, Executive acknowledges that in the
course of his employment with the Company he shall become
familiar with the Company's and its Subsidiaries' trade secrets
and with other Confidential Information concerning the Company
and its Subsidiaries and that his services shall be of special,
unique and extraordinary value to the Company and its
Subsidiaries. Therefore, Executive agrees that, during the
period of Executive's employment with the Company and for three
years thereafter (the "Noncompete Period"), he shall not directly
or indirectly own any interest in, manage, control, participate
in, consult with, render services for, or in any manner engage in
any business competing with the businesses of the Company or its
Subsidiaries, as such businesses exist or are in process on the
date of the termination of Executive's employment, within any
geographical area in which the Company or its Subsidiaries engage
or plan to engage in such businesses. Nothing herein shall
prohibit Executive from being a passive owner of not more than 2%
of the outstanding stock of any class of a corporation which is
publicly traded, so long as Executive has no active participation
in the business of such corporation.
(b) During the Noncompete Period, Executive shall not
directly or indirectly through another entity (i) induce or
attempt to induce any employee of the Company or any Subsidiary
to leave the employ of the Company or such Subsidiary, or in any
way interfere with the relationship between the Company or any
Subsidiary and any employee thereof, (ii) hire any person who was
an employee of the Company or any Subsidiary at any time during
the period Executive was employed with the Company except for a
noncompetitive situation or (iii) induce or attempt to induce any
customer, supplier, licensee, licensor, franchisee or other
business relation of the Company or any Subsidiary to cease doing
business with the Company or such Subsidiary, or in any way
interfere with the relationship between any such customer,
supplier, licensee or business relation and the Company or any
Subsidiary (including, without limitation, making any negative
statements or communications about the Company or its Subsidiar
ies).
7. Enforcement. If, at the time of enforcement of
paragraphs 4, 5 or 6 of this Agreement, a court holds that the
restrictions stated herein are unreasonable under circumstances
then existing, the parties hereto agree that the maximum period,
scope or geographical area reasonable under such circumstances
shall be substituted for the stated period, scope or area.
Because Executive's services are unique and because Executive has
access to Confidential Information and Work Product, the parties
hereto agree that money damages would not be an adequate remedy
for any breach of this Agreement. Therefore, in the event a
breach or threatened breach of this Agreement, the Company or its
successors or assigns may, in addition to other rights and
remedies existing in their favor, apply to any court of competent
jurisdiction for specific performance and/or injunctive or other
relief in order to enforce, or prevent any violations of, the
provisions hereof (without posting a bond or other security). In
addition, in the event of an alleged breach or violation by
Executive of paragraph 6, the Noncompete Period shall be tolled
until such breach or violation has been duly cured. Executive
agrees that the restrictions contained in paragraph 6 are reason
able.
8. Survival. Paragraphs 4 through 16 shall survive
and continue in full force in accordance with their terms
notwithstanding any termination of the Agreement Period.
9. Notices. Any notice provided for in this
Agreement shall be in writing and shall be either personally
delivered, or mailed by first class mail, return receipt
requested, to the recipient at the address below indicated:
Notices to Executive:
Larry S. Grossman
1625 Tall Tree Lane
Deerfield, IL 60015
Notices to the Company:
Trans Leasing International, Inc.
3000 Dundee Road
Northbrook, IL 60062
Attention: President
or such other address or to the attention of such other person as
the recipient party shall have specified by prior written notice
to the sending party. Any notice under this Agreement shall be
deemed to have been given when so delivered or mailed.
10. Severability. Whenever possible, each provision
of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of
this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction,
such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as
if such invalid, illegal or unenforceable provision had never
been contained herein.
11. Entire Agreement. This Agreement (including the
documents referred to herein) constitutes the entire agreement
between the parties and supersedes any prior understandings,
agreements or representations by or between the parties, written
or oral, that may have related in any way to the subject matter
hereof.
12. No Strict Construction. The language used in this
Agreement shall be deemed to be the language chosen by the
parties hereto to express their mutual intent, and no rule of
strict construction shall be applied against any party.
13. Counterparts. This Agreement may be executed in
separate counterparts, each of which is deemed to be an original
and all of which taken together constitute one and the same
agreement.
14. Successors and Assigns. This Agreement is
intended to bind and inure to the benefit of and be enforceable
by Executive, the Company and their respective heirs, successors
and assigns, except that Executive may not assign his rights or
delegate his obligations hereunder without the prior written
consent of the Company.
15. Choice of Law. All issues and questions
concerning the construction, validity, enforcement and
interpretation of this Agreement and the exhibits and schedules
hereto shall be governed by, and construed in accordance with,
the laws of the State of Illinois, without giving effect to any
choice of law or conflict of law rules or provisions (whether of
the State of Illinois or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the
State of Illinois.
16. Amendment and Waiver. The provisions of this
Agreement may be amended or waived only with the prior written
consent of the Company and Executive, and no course of conduct or
failure or delay in enforcing the provisions of this Agreement
shall affect the validity, binding effect or enforceability of
this Agreement.
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the date first written above.
TRANS LEASING INTERNATIONAL, INC.
By /s/ Michael J. Heyman
Its President
/s/ Larry S. Grossman
LARRY S. GROSSMAN