EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of October 24, 1996 between Trans Leasing
International, Inc., a Delaware corporation (the "Company"), and Michael J.
Heyman ("Executive").
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. Employment. The Company shall employ Executive, and Executive hereby
accepts employment with the Company, upon the terms and conditions set forth in
this Agreement for the period beginning on the date hereof (the "Employment
Date") and ending as provided in paragraph 4 hereof (the "Employment Period").
2. Position And Duties.
(a) During the Employment Period, Executive shall serve as President and
Chief Operating Officer of the Company and shall render such administrative and
other executive and managerial services to the Company and its Subsidiaries as
the Company's board of directors (the "Board"), its Chairman of the Board or its
Chief Executive Officer may from time to time direct.
(b) Executive shall report to the Board and the Chief Executive Officer of
the Company, and Executive shall devote his best efforts and his full business
time and attention (except for permitted personal days and reasonable periods of
illness or other incapacity) to the business and affairs of the Company and its
Subsidiaries. Executive shall perform his duties and responsibilities to the
best of his abilities in a diligent, trustworthy, businesslike and efficient
manner. Notwithstanding the foregoing, it is mutually acknowledged that
Executive owns a substantial interest in Moksha Worldwide, Inc. and Heyman
Corporation and mutually agreed that Executive may spend minimal amounts of time
consulting with those companies.
(c) For purposes of this Agreement, "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.
3. Base Salary and Benefits.
(a) During the Employment Period, Executive's base salary shall be $225,000
per annum or such higher rate as the Board may designate from time to time (the
"Base Salary"), which salary shall be payable in regular installments in
accordance with the Company's general payroll practices and shall be subject to
customary withholding.
(b) In addition to the Base Salary payable to Executive pursuant to
paragraph 3(a), Executive shall be entitled to the following benefits during the
Employment Period:
(i) participation in all of theCompany's employee benefit programs for
which senior executive employees of the Company and its Subsidiaries are
generally eligible, including without limitation, participation in the
Company's bonus plan, stock option plans and fully paid group medical
benefits program;
(ii) twenty (20) personal days (which shall include all vacation days
and sick days) each year with salary; and
(iii) use of an automobile, a 1997 BMW 540i or comparable as approved
by the Chief Executive Officer of the Company, owned or leased by the
Company or a Subsidiary together with reimbursement of reasonable expenses
incurred in its operation, including insurance, maintenance and gas, and
Executive shall be entitled to a new vehicle every three years.
(c) The Company shall reimburse Executive for all reasonable expenses
incurred by him in the course of performing his duties under this Agreement
which are consistent with the Company's policies in effect from time to time
with respect to travel, entertainment and other business expenses, subject to
the Company's requirements with respect to reporting and documentation of such
expenses.
4. Termination.
(a) The initial term of the Employment Period (the "Initial Period") shall
commence on the Employment Date and shall end on third anniversary of the
Employment Date; provided, however, that the Employment Period shall extend
automatically for one-year periods (each a "Renewal Period") following the
Initial Period and any Renewal Period then in effect (the Initial Period
together with any Renewal Periods is herein referred to as the "Employment
Period") unless either party shall give the other party, prior to 90 days before
the end of the Initial Period or the Renewal Period then in effect, written
notice of its intention to terminate the Employment Period at the end of such
period; and provided further that (i) the Employment Period shall terminate upon
Executive's resignation, death or permanent disability or incapacity (permanent
disability and incapacity to be determined by the Board in its good faith
judgment) and (ii) the Employment Period may be terminated by the Company at any
time prior to such date for Cause (as defined below) or without Cause.
(b) If the Employment Period is terminated by the Company without Cause,
Executive shall be entitled to receive severance payments in an aggregate amount
equal to: (i) his Base Salary as of the date of termination, payable over a one
year period, if the Employment Period is terminated on or prior to the first
anniversary of the Employment Date, (ii) two times his Base Salary as of the
date of termination, payable over a two year period, if the Employment Period is
terminated following the first but on or prior to the second anniversary of the
Employment Date, and (iii) three times his Base Salary, payable over a three
year period (such one-year, two-year or three-year period, as applicable, is
herein referred to as the "Post Employment Period"), if the Employment Period is
terminated at any time following the second anniversary of the Employment Date,
in each case (i), (ii) and (iii), in regular installments in accordance with the
Company's general payroll practices and subject to customary withholding;
provided, however, that in no event shall the amount of such severance payments
when aggregated with Executive's other "parachute payments" (as such term is
used in Section 280G of the Internal Revenue Code) exceed 299% 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 payments if he has not breached and does not breach the provisions of
paragraphs 5, 6 and 7 hereof.
(c) If the Employment Period is terminated by the Company for Cause or is
terminated pursuant to clause (a)(i) above, Executive shall be entitled to
receive his Base Salary through the date of termination.
(d) All of Executive's rights to fringe benefits and bonuses hereunder (if
any) which accrue or become payable after the termination of the Employment
Period shall cease upon such termination. The Company may offset any amounts
Executive owes it or its Subsidiaries against any amounts it owes Executive
hereunder.
(e) For purposes of this Agreement, "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, the Chairman of the Board or the
Chief Executive Officer, (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, in each case (ii) through (v), which is not cured
within 15 days after written notice thereof to Executive.
5. 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 under this
Agreement (including, but not limited to, in connection with treasury and
investor relations functions). Executive shall deliver to the Company at the
termination of the Employment Period, 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.
6. 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 during or after
the Employment Period) to establish and confirm such ownership (including,
without limitation, assignments, consents, powers of attorney and other
instruments).
7. 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 (i) the Employment Period and (ii) the longer of (A) one year thereafter
and (B) the Post Employment Period, if any, (together, 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
the equipment leasing business within any geographical area in which the Company
or its Subsidiaries engage in such business as of the date of this Agreement.
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 Employment
Period 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 Subsidiaries).
8. Enforcement. If, at the time of enforcement of paragraph 5, 6 or 7 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 7, the Noncompete Period shall be tolled until such
breach or violation has been duly cured. Executive agrees that the restrictions
contained in paragraph 7 are reasonable.
9. Executive's Representations. Executive hereby represents and warrants to
the Company that (i) the execution, delivery and performance of this Agreement
by Executive do not and shall not conflict with, breach, violate or cause a
default under any contract, agreement, instrument, order, judgment or decree to
which Executive is a party or by which he is bound, (ii) Executive is not a
party to or bound by any employment agreement, noncompete agreement or
confidentiality agreement with any other person or entity and (iii) upon the
execution and delivery of this Agreement by the Company, this Agreement shall be
the valid and binding obligation of Executive, enforceable in accordance with
its terms. Executive hereby acknowledges and represents that he has consulted
with independent legal counsel regarding his rights and obligations under this
Agreement and that he fully understands the terms and conditions contained
herein.
10. Survival. Paragraphs 5 through 8 and paragraphs 10 through 18 shall
survive and continue in full force in accordance with their terms
notwithstanding any termination of the Employment Period.
11. 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:
Michael J. Heyman
361 Park Avenue
Glencoe, IL 60022
Notices to the Company:
Trans Leasing International, Inc.
3000 Dundee Road
Northbrook, IL 60062
Attention: Chief Executive Officer
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.
12. 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.
13. 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.
14. 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.
15. 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.
16. 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.
17. 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.
18. 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 __________________________
Its _________________________
_____________________________
MICHAEL J. HEYMAN