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EXHIBIT 10.2
EMPLOYMENT AGREEMENT
BETWEEN
THE REGISTRANT AND XXXXX X. XXXXX
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HEARTLAND WISCONSIN CORP.
EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into as of the 1st day of
July, 1998, by and between Heartland Wisconsin Corp, a Wisconsin corporation
("Company"), and Xxxxx X. Xxxxx, an individual ("Xxxxx"). W I T N E S S E T H:
WHEREAS, the Company desires to be assured of the association and services of
Xxxxx for and on behalf of the Company; and
WHEREAS, Xxxxx is willing and desires to be employed by the Company, and
the Company is willing to employ Xxxxx, upon the terms, covenants and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual terms, covenants and
conditions hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto do
hereby agree as follows:
1. Employment. The Company hereby employs Xxxxx as Chief Executive Officer
and President, subject to the supervision and direction of the Company's Board
of Directors.
2. Term. The term of this Agreement shall be for a period of five years
commencing on the date hereof, unless earlier terminated pursuant to Section 11
hereof; provided, however, that Xxxxx'x obligations described in Sections 8 and
9 hereof shall continue in effect after such termination.
3. Compensation; Reimbursement.
(a) Percentage of Net Income. The Company shall pay to Xxxxx, in cash,
an amount equal to 20% of the net income of the Company (based financial
statements of the Company audited by independent certified public
accountants selected by the Company), determined without deduction of any
amounts paid or given as compensation to the other officers and directors
of the Company, for each fiscal year of the Company, beginning with the
fiscal year ending February 28, 1999; such amount shall be (i) due and
payable within 30 days following the last day of each fiscal quarter
(subject to adjustment for any subsequent fiscal quarter as necessary to
reflect the net income reported on the Company's audited financial
statements for such fiscal year) and (ii) prorated for each fiscal year
during which this Agreement is in effect for less than the full fiscal
year, including the year ending February 28, 1999.
(b) Incentive Options. The Company shall grant to Xxxxx options,
exercisable for a period of five years, to purchase common stock of the
Company in an amount equal to 10,000 shares for each full $500,000 of
Leases which are originated or acquired by the Company at any time,
commencing as of March 1, 1998, determined as the aggregate present value
of Leases as of the date of inception or acquisition by the Company
("Initial Present Value"), at a prices ranging from $1.00 per share to
$5.00 per share, in accordance with the following schedule:
Options covering 10,000 shares, exercisable at $1.00 per
share, upon the Company's achieving the first full $500,000 of
Initial Present Value, and
Options covering 10,000 shares, exercisable at $4.00 per
share, upon the Company's achieving the second full $500,000
of Initial Present Value, and
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Options covering 10,000 shares, exercisable at $5.00 per
share, upon the Company's achieving the third full $500,000 of
Initial Present Value, and
Options covering 10,000 shares, exercisable at $5.00 per
share, upon the Company's achieving the fourth full $500,000
of Initial Present Value.
It is further understood and agreed that additional options, covering
such number of shares, if any, as may from time to time be determined in
its sole discretion by the Board of Directors of the Company and
exercisable at a price per share also determined by the Board in its sole
discretion, may be granted to Xxxxx upon the Company's achieving any amount
of Initial Present Value in excess of $2,000,000.
(c) Additional Benefits. For the term of this Agreement (or as
otherwise required by applicable laws and regulations), in addition to any
compensation paid or payable pursuant to subsections 3(a) and/or (b), Xxxxx
shall be entitled to all other benefits of employment provided to the other
officers of the Company or its affiliate, Xxxxxxx Bros. Cranes, Inc., a
Delaware corporation ("Xxxxxxx Cranes"), including without limitation
participation in all group insurance plans, pension or profit-sharing plans
(including 401(k) plans) and incentive compensation plans (including option
plans). If such benefits are provided otherwise than under plans sponsored
by Xxxxxxx Cranes, the benefits provided to Xxxxx by the Company pursuant
to this subsection 3(c) shall be substantially equivalent in all respects
to benefits provided to the officers and/or directors of Xxxxxxx Cranes;
such benefits will be provided at no cost to Xxxxx.
(d) Reimbursement. Xxxxx shall be reimbursed by the Company for all
reasonable "out-of-pocket" business expenses (including without limitation
expenses for business travel and business entertainment) incurred in
connection with the performance of his duties under this Agreement (i) so
long as such expenses constitute business deductions from taxable income
for the Company and are excludable from taxable income to the Xxxxx under
the governing laws and regulations of the Internal Revenue Code (provided,
however, that Xxxxx shall be entitled to full reimbursement in any case
where the Internal Revenue Service may, under Section 274(n) of the
Internal Revenue Code, disallow to the Company 20% of meals and
entertainment expenses); and (ii) to the extent such expenses do not exceed
the amounts allocable for such expenses in budgets that are approved from
time to time by the Company. The reimbursement of Xxxxx'x business expenses
pursuant to this Agreement shall be upon monthly presentation to and
approval by the Company of valid receipts and other appropriate
documentation for such expenses.
4. Scope of Duties.
(a) Assignment of Duties. Xxxxx shall have such duties as may be
assigned to him from time to time by the Company's Board of Directors
commensurate with his experience and responsibilities in the position for
which he is employed pursuant to Section 1 hereof; such duties shall be
exercised subject to the control and supervision of the Board.
(b) General Specification of Duties. Xxxxx'x duties shall include, but
not be limited to, the following duties and performance goals:
(1) Xxxxx will act as the chief executive of the Company and
perform all duties, functions and responsibilities generally associated
with the Chief Executive Officer and President of an organization such
as the Company.
(2) Xxxxx will cause the Company to be operated in compliance with
all legal requirements.
(3) Xxxxx will establish procedures for implementing the policies
established by the Board of Directors of the Company.
(4) Xxxxx will have primary responsibility for the negotiation and
structuring of financing transactions (lease and other) entered into by
the Company and will execute on behalf of the Company, in his capacity
as Chief Executive Officer and/or President, all documents requested by
the Board.
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(5) Xxxxx will employ, pay, supervise and discharge all employees
of the Company, and determine all matters with regard to such
personnel, including without limitation, compensation, bonuses and
fringe benefits, all in accordance with the Annual Plan (as defined in
Section 5 of this Agreement.
(6) Xxxxx will seek to insure cooperation by the Company with
Xxxxxxx Cranes and the other affiliates of the Company.
(7) Xxxxx will operate the Company in conformance with the Annual
Plan approved by the Board of Directors of the Company, as such may be
amended from time to time with the concurrence of the Board.
(8) Xxxxx will cause to be prepared, as directed by the Board of
Directors of the Company, financial statements, tax returns and other
similar items with respect to the operation of the Company.
The foregoing are not intended as a complete itemization of the duties
which Xxxxx will perform and undertake on behalf of the Company in
satisfaction of his employment obligations under this Agreement.
5. Annual Plan.
(a) Delivery and Content of Annual Plan. Xxxxx shall submit to the
Board of Directors of the Company for its approval, not later than sixty
(60) days before the beginning of each fiscal year of the Company, an
annual business plan for the Company ("Annual Plan"). The Annual Plan shall
be revised by Xxxxx and submitted to the Board for its review (and approval
in the case of material changes from the approved Annual Plan) from time to
time during each year to reflect changes in the Annual Plan due to
operations or otherwise. Each Annual Plan shall include the following
information:
(1) an annual forecast of income and expenses for the Company;
(2) a cash flow budget, estimate of profit, and source and use of
cash statements for the operation of the Company; and
(3) a payroll and staffing plan and budget for the operation of
the Company; and
(b) Compliance with Annual Plan. During each fiscal year of the
Company, Xxxxx, in the performance of his obligations under this Agreement,
shall comply or cause compliance with the applicable Annual Plan and shall
not (except for emergency expenditures or special circumstances requiring
an unanticipated expenditure) deviate materially from any budget category
set forth in the Annual Plan, incur any material additional expense or
change materially the manner of operation of the Company, without the
approval of the Board of Directors of the Company.
6. Xxxxx'x Devotion of Time. Xxxxx hereby agrees to devote sufficient time,
abilities and energy to the faithful performance of the duties assigned to him
and to the promotion and forwarding of the business affairs of the Company, and
not to divert any business opportunities from the Company to himself or to any
other person or business entity.
7. Conflicting Activities.
(a) Xxxxx shall not, during the term of this Agreement, be engaged in
any other business activity without the prior consent of the Board of
Directors of the Company; provided, however, that this restriction shall
not be construed as preventing Xxxxx from investing his personal assets in
passive investments in business entities which are not in competition with
the Company or its affiliates, or from pursuing business opportunities as
permitted by subsection 7(b) hereof.
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(b) Xxxxx hereby agrees to promote and develop all business
opportunities that come to his attention relating to current or anticipated
future business of the Company, in a manner consistent with the best
interests of the Company and with his duties under this Agreement. Should
Xxxxx discover a business opportunity that does not relate to the current
or anticipated future business of the Company, he shall first offer such
opportunity to the Company. Should the Board of Directors of the Company
not exercise its right to pursue this business opportunity within a
reasonable period of time, not to exceed 60 days, then Xxxxx may develop
the business opportunity for himself; provided, however, that such
development may in no way conflict or interfere with the duties owed by
Xxxxx to the Company under this Agreement. Further, Xxxxx may develop such
business opportunities only on his own time, and may not use any service,
personnel, equipment, supplies, facility, or trade secrets of the Company
in their development.
(c) As used herein, the term "business opportunity" shall not include
business opportunities involving investment in publicly traded stocks,
bonds or other securities, or other investments of a personal nature.
8. Covenant Not to Compete. In consideration for his employment hereunder,
during the term of this Agreement, and for one (1) year after the termination of
this Agreement, Xxxxx shall not, within the contiguous United States, either
directly or indirectly, own, have a proprietary interest of any kind in, be
employed by, or serve as a consultant to or in any other capacity for any firm
which is in the primary business of providing financing (lease or other) to
individuals, groups or businesses, in connection with equipment of the types
generally financed/leased by the Company and/or its affiliates, including
without limitation truck-mounted cranes, truck-mounted concrete mixers and
transportable storage containers. Notwithstanding the foregoing, Xxxxx may
invest in the securities of any corporation whose shares are listed on a
national securities exchange or quoted on the National Association of Securities
Dealers Automated Quotation (NASDAQ) system.
9. Confidentiality of Trade Secrets and Other Materials.
(a) Trade Secrets. Other than in the performance of his duties
hereunder, Xxxxx agrees not to disclose, either during the term of his
employment by the Company or at any time thereafter, to any person, firm or
corporation, any information concerning the business affairs, the trade
secrets or the customer lists or similar information of the Company. Any
technique, method, process or technology used by the Company shall be
considered a "trade secret" for the purposes of this Agreement.
(b) Ownership of Trade Secrets; Assignment of Rights. Xxxxx hereby
agrees that all know-how, documents, reports, plans, proposals, marketing
and sales plans, client lists, client files and materials made by him or by
the Company are the property of the Company and shall not be used by him in
any way adverse to the Company's interests. Xxxxx shall not deliver,
reproduce or in any way allow such documents or things to be delivered or
used by any third party without specific direction or consent of the Board
of Directors of the Company. Xxxxx hereby assigns to the Company any rights
which he may have in any such trade secret or proprietary information,
which assignment shall be effective without further action by any party
unless otherwise agreed in writing by the Board of Directors of the
Company.
10. Injunctive Relief. The Company and Xxxxx hereby acknowledge and agree
that any default under Sections 8 or Section 9 of this Agreement will cause
damage to the Company in an amount difficult to ascertain. Accordingly, in
addition to any other relief to which the Company may be entitled, the Company
shall be entitled to such injunctive relief as may be ordered by any court of
competent jurisdiction including, but not limited to, an injunction restraining
any violation of Section 8 or Section 9 hereof and without the proof of actual
damages.
11. Termination.
(a) Bases for Termination.
(1) Xxxxx'x employment hereunder may be terminated at any time by
mutual agreement of the parties.
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(2) This Agreement shall automatically terminate on the last day
of the month in which Xxxxx dies or becomes permanently incapacitated.
"Permanent incapacity" as used herein shall mean mental or physical
incapacity, or both, reasonably determined by the Company's Board of
Directors, based upon a certification of such incapacity by, in the
discretion of the Company's Board of Directors, either Xxxxx'x
regularly attending physician or a duly licensed physician selected by
the Company's Board of Directors, rendering Xxxxx unable to perform
substantially all of his duties hereunder and which appears reasonably
certain to continue for at least six consecutive months without
substantial improvement. For purposes of this Agreement, Xxxxx shall be
deemed to have "become permanently incapacitated" on and as of the date
that the Company's Board of Directors has determined that Xxxxx is
permanently incapacitated and so notifies Xxxxx in writing of such
determination.
(3) Xxxxx'x employment by the Company may be terminated by either
party hereto, with or without "cause" (for any reason or no reason at
all), at any time, by giving 60 days' prior written notice of
termination to the other; such termination shall be effective on the
60th day following delivery of such notice. If Xxxxx'x employment under
this Agreement is so terminated, the Company shall make one or more
cash payments to Xxxxx in an aggregate amount equal to (i) a pro rata
portion of the percentage of net income and other compensation
(including without limitation any options issuable to Xxxxx pursuant to
subsection 3(b) hereof), if any, earned for the fiscal year in which
termination occurs prorated to the date of termination, plus (ii) any
unreimbursed expenses accruing to the date of termination.
(4) Amounts described in clause (i) of subsection 11(a)(3) hereof
shall be determined quarterly and shall be due and payable within
thirty 30 days following the end of each fiscal quarter of the Company
until fully paid. Following any termination pursuant to and in
accordace with Section 11(a)(1) or Section 11(a)(3) of this Agreement,
the Company shall not be obligated to compensate Xxxxx, or his estate
or representatives, except as provided herein, nor shall it be required
to provide the benefits to Xxxxx which are provided for and described
in Section 3(c) of this Agreement (except as and to the extent provided
by applicable laws and regulations).
(b) Dismissal from Premises. At the Company's option, Xxxxx shall
immediately leave the Company's premises on the date that termination
hereunder is effective.
12. Miscellaneous.
(a) Waiver. The waiver by either of the parties, express or implied, of
any right under this Agreement or any failure to perform under this
Agreement by the other party, shall not constitute or be deemed as a waiver
of any other right under this Agreement or of any other failure to perform
under this Agreement by the other party, whether of a similar or dissimilar
nature.
(b) Transfer and Assignment. This Agreement is personal as to Xxxxx and
shall not be assigned or transferred by Xxxxx without the prior written
consent of the Company. This Agreement shall be binding upon and inure to
the benefit of all of the parties hereto and their respective permitted
heirs, personal representatives, successors and assigns.
(c) Severability; Governing Law. Nothing contained herein shall be
construed to require the commission of any act contrary to law. Should
there be any conflict between any provisions hereof and any present or
future statute, law, ordinance, regulation, or other pronouncement having
the force of law, the latter shall prevail, but the provision of this
Agreement affected thereby shall be curtailed and limited only to the
extent necessary to bring it within the requirements of the law, and the
remaining provisions of this Agreement shall remain in full force and
effect. This Agreement is made under and shall be construed pursuant to the
internal laws of the State of Wisconsin.
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(d) Counterparts. This Agreement may be executed in several
counterparts and all documents so executed shall constitute one agreement,
binding on all of the parties hereto, notwithstanding that all of the
parties did not sign the original or the same counterparts.
(e) Entire Agreement. This Agreement constitutes the entire agreement
and understanding of the parties with respect to the subject matter hereof
and supersedes all prior oral or written agreements, arrangements, and
understandings with respect thereto. No representation, promise,
inducement, statement or intention has been made by any party hereto that
is not embodied herein, and no party shall be bound by or liable for any
alleged representation, promise, inducement, or statement not so set forth
herein.
(f) Modification. This Agreement may be modified, amended, superseded,
or cancelled, and any of the terms, covenants, representations, warranties
or conditions hereof may be waived, only by a written instrument executed
by the party or parties to be bound by any such modification, amendment,
supersession, cancellation, or waiver.
(g) Attorneys' Fees and Costs. In the event of any dispute arising out
of the subject matter of this Agreement, the prevailing party shall
recover, in addition to any other damages assessed, its attorneys' fees and
court costs incurred in litigating or otherwise settling or resolving such
dispute whether or not an action is brought or prosecuted to judgment. In
construing this Agreement, none of the parties hereto shall have any term
or provision construed against such party solely by reason of such party
having drafted the same.
(h) Headings. The section and other headings contained herein are for
reference purposes only and shall not in any way affect the meaning and
interpretation of this Agreement.
(i) Cumulative Remedies. Each and all of the several rights and
remedies provided for in this Agreement, or by law or in equity, shall be
cumulative, and no one of such rights and/or remedies shall be exclusive of
any other right or remedy, and the exercise of any one of such rights or
remedies shall not be deemed a waiver of, or an election to exercise, any
other such right or remedy.
(j) Survival. Any provision of this Agreement which imposes an
obligation after termination or expiration of this Agreement shall survive
the termination or expiration of this Agreement and be binding on Xxxxx and
the Company.
(k) Notices. Any notice under this Agreement must be in writing, may be
telecopied, sent by express courier, or hand-delivered, or may be served by
depositing the same in the United States mail, addressed to the party to be
notified, postage-prepaid and registered or certified with a return receipt
requested. The addresses of the parties for the receipt of notice shall be
as follows:
If to the Company: Heartland Wisconsin Corp.
0000 Xxxxx 00xx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
If to Xxxxx: Xxxxx X. Xxxxx
0000 Xxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxx 00000
Each notice given by registered or certified mail shall be deemed
delivered and effective on the date of delivery as shown on the return
receipt, and each notice delivered in any other manner shall be deemed to
be effective as of the time of actual delivery thereof. Each party may
change its address for notice by giving notice thereof in the manner
provided above.
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(l) Right of Set-Off. Upon termination or expiration of this Agreement,
the Company shall have the right to set-off against the amounts due Xxxxx
hereunder the amount of any outstanding loan or advance from the Company to
Xxxxx.
(m) Effective Date. This Agreement shall become effective, when signed
by the Company and Xxxxx, as of the date first above written.
IN WITNESS WHEREOF, the parties hereto have caused this Employment
Agreement to be executed as of the day and year first above written.
HEARTLAND WISCONSIN CORP.
By:_______________________________________________
Xxxxx X. Xxxxxxx, Chairman of the Board
and Vice President
_______________________________________________
Xxxxx X. Xxxxx
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