Document:

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                                                              EXHIBIT 10(iii)(A)

                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT ("AGREEMENT"), by and between GATX Corporation, a New
York corporation (the "COMPANY"), and Ronald H. Zech (the "EXECUTIVE") is
effective as of October 11, 2002 (the "EFFECTIVE DATE"). In consideration of the
mutual covenants set forth herein, the Company and the Executive hereby agree as
follows:

         1. PERIOD OF EMPLOYMENT. In accordance with the terms and conditions of
this Agreement, the Company hereby agrees to employ the Executive, and the
Executive agrees to serve the Company, in the capacities described herein during
the Period of Employment. The term "PERIOD OF EMPLOYMENT" shall mean the period
which commences on the Effective Date and, unless earlier terminated pursuant to
Section 4, ends on the third anniversary of the Effective Date.

         2. DUTIES.

                  2.1 DUTIES. During the Period of Employment, the Executive
shall be employed as the President and Chief Executive Officer of the Company
with overall charge and responsibility for the business and affairs of the
Company. The Executive shall report directly to the Company's Board of Directors
(the "BOARD") and shall perform such duties as the Executive shall reasonably be
directed to perform by the Board. During the Period of Employment, the Company
shall cause the Executive to be elected as a member of the Board and as Chairman
of the Board; provided, however, the Executive shall not be the Chairman of the
Board if his holding such position is contrary to then-applicable law or, in the
reasonable judgment of the Board, is contrary to the interests of the Company
given the then-current business and/or investor relations environment.

                  2.2 SCOPE. During the Period of Employment, and excluding any
periods of vacation and sick leave to which the Executive is entitled, the
Executive shall devote substantially all of his business time and attention to
the business and affairs of the Company. It shall not be a violation of this
Agreement for the Executive to (i) serve on corporate, civic or charitable
boards or committees, (ii) deliver lectures, fulfill speaking engagements or
teach occasional courses or seminars at educational institutions, or (iii)
manage personal investments, so long as such activities under clauses (i), (ii)
and (iii) do not interfere, in any substantial respect, with the Executive's
responsibilities hereunder.

         3. COMPENSATION AND OTHER PAYMENTS.

                  3.1 SALARY. During the Period of Employment, the Company shall
pay the Executive a base salary of not less than seven hundred, seventy-five
thousand dollars ($775,000) per year (the "BASE SALARY"). The Base Salary shall
be reviewed by the Compensation Committee of the Board (the "COMMITTEE") no less
frequently than the Company's normal salary review schedule as it exists from
time to time. Based upon such reviews, the Committee may increase the Base
Salary. The Base Salary, as it exists from time to time, may not be decreased,
unless such decrease is consistent with a decrease to the base salaries of
senior management generally.

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                  3.2 ANNUAL BONUS. For calendar years 2002 and 2003, the
Executive shall participate in the Executive Incentive Plan of the Company (the
"EIP") and have the opportunity to earn an annual cash incentive award
thereunder. For calendar years thereafter through the end of the Period of
Employment, the Executive shall participate in the Management Incentive Plan of
the Company (the "MIP") or the successor to such plan, with annual cash
incentive awards as determined by the Board.

                  3.3 ANNUAL STOCK OPTION GRANTS. For calendar years 2002 and
2003, the Executive shall participate in the EIP and shall have the opportunity
for stock option grants as provided thereunder. For calendar years thereafter
through the end of the Period of Employment, the Executive shall receive stock
option grants as determined by the Board in accordance with the Company's
then-applicable stock plan. Such grants shall be made at the same time during
the calendar year as grants are generally made to senior executives of the
Company, and shall be consistent with competitive pay practices generally and
appropriate relative to awards made to other senior executives of the Company.

                  3.4 LONG-TERM INCENTIVE. For calendar years 2002 and 2003, the
Executive shall participate in the EIP and shall have the opportunity for
long-term incentive awards thereunder. For calendar years thereafter through the
end of the Period of Employment, the Executive shall receive awards as
determined by the Board in accordance with the Company's then-applicable
long-term incentive plan. Such awards shall be made at the same time during the
calendar year as awards are generally made to senior executives of the Company,
and shall be consistent with competitive pay practices generally and appropriate
relative to awards made to other senior executives of the Company.

                  3.5 NON-QUALIFIED PENSION PLAN. During the Period of
Employment, the Executive shall continue to participate in the Company's
non-qualified pension plan as it may exist from time to time. Benefits paid to
the Executive under the Company's non-qualified pension plan may be subject to
reduction pursuant to subsection 3.6.2 below. Upon either (A) termination of the
Executive's employment during the Period of Employment due to: (i) termination
by the Company without Cause (as defined below), (ii) the Executive's
resignation for Good Reason (as defined below), (iii) death, or (iv) Disability
(as defined below); or (B) the end of the Period of Employment, and continuing
thereafter, upon eligibility to receive a benefit under any non-qualified plan
of the Company, the Executive may elect to receive his benefit in the form of a
single lump-sum to be actuarially equivalent to his benefit under such plan. The
actuarial factors shall be the same as in subsection 6(a)(i)(D) of the March 15,
2002 Amended Agreement for Employment following a Change of Control between the
Executive and the Company ("COC AGREEMENT") or, if more favorable to Executive,
the actuarial factors used in any successor agreement to the COC Agreement.

                  3.6 CONTRACT BONUS.

                         3.6.1 As of the Effective Date, the Company shall pay
         to the Executive seven hundred fifty thousand dollars ($750,000).

                         3.6.2 If Executive's employment with the Company is
         terminated during the Period of Employment either (i) by the Company
         for Cause, or (ii) by Executive's

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         resignation without Good Reason or without Board approval, then the
         Executive will forfeit payment of his non-qualified pension benefits
         until such forfeited amounts equal a portion of the Contract Bonus,
         with such portion equal to five hundred thousand dollars ($500,000)
         multiplied by a fraction with a numerator equal to thirty-six (36) less
         the number of full months from the Effective Date to the date of
         termination and a denominator equal to thirty-six (36).

                  3.7 PAYMENT OF PROFESSIONAL FEES. The Company shall pay on the
Executive's behalf all statements rendered to the Executive by the Executive's
attorneys, accountants and other advisors for reasonable fees and expenses in
connection with the negotiation and preparation of this Agreement.

                  3.8 REGULAR REIMBURSED BUSINESS EXPENSES. The Company shall
promptly reimburse the Executive for all expenses and disbursements reasonably
incurred by the Executive in the performance of his duties hereunder during the
Period of Employment.

                  3.9 BENEFIT PLANS. During the Period of Employment, the
Executive and his eligible family members shall be entitled to participate, on
terms no less favorable to the Executive than the terms offered to other senior
executives of the Company, in any group and/or executive welfare and retirement
benefit plans (qualified, non-qualified and supplemental) or other fringe
benefits (it being understood that items such as stock options are not fringe
benefits) of the Company (collectively referred to as the "BENEFITS"); provided,
however, that such Benefits shall be on terms no less favorable than the
benefits provided to the Executive as of the Effective Date; and further
provided, however, that any part of the Benefits may be subject to decrease if
such decrease is consistent with a decrease in such Benefit for senior
management of the Company generally.

                  3.10 PERQUISITES. The Company shall provide the Executive such
perquisites of employment as are provided to any other senior executive of the
Company, but at a level no less than that provided to the Executive as of the
Effective Date; provided, however, that the provision of any perquisite may be
decreased if such decrease is consistent with a decrease to senior management of
the Company generally.

         4. TERMINATION.

                  4.1 BY THE COMPANY FOR CAUSE. During the Period of Employment,
the Company may terminate the Executive's employment immediately for Cause. For
purposes of this Agreement, "CAUSE" shall have the same meaning as it does in
Section 5(b) of the COC Agreement. A termination by the Company may be a
termination for Cause only if the termination is effective within the six
(6)-month period immediately following the event constituting Cause.

                  4.2 BY EXECUTIVE FOR GOOD REASON. During the Period of
Employment, the Executive's employment hereunder may be terminated by the
Executive for Good Reason upon fifteen (15) days written notice. For purposes of
this Agreement, "GOOD REASON" shall have the same meaning as it does in Section
5(c) of the COC Agreement; provided, however, that subsection 5(c)(iii) of the
COC Agreement shall be amended to read "the Company requiring the

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Executive to be based at an office or location outside of the Chicago, Illinois
or San Francisco, California metropolitan areas." A resignation by the Executive
may be a resignation for Good Reason only if the resignation is effective within
the six (6)-month period following the event constituting Good Reason.

                  4.3 OTHER THAN FOR CAUSE OR GOOD REASON. The Executive or the
Company may terminate this Agreement for any reason other than for Good Reason
or Cause, respectively, upon thirty (30) days written notice to the Company or
Executive, as the case may be.

                  4.4 DEATH. The Period of Employment shall terminate
automatically upon the Executive's death.

                  4.5 DISABILITY. If Disability of the Executive occurs during
the Period of Employment (pursuant to the definition of Disability set forth
below), the Company may give to the Executive written notice in accordance with
Section 17.2 of this Agreement of its intention to terminate the Executive's
employment no sooner than thirty (30) days following such notice. In such event,
the Executive's employment with the Company shall terminate effective on the
date specified in such notice (the "DISABILITY EFFECTIVE DATE"), provided that
the Executive shall not have returned to full-time performance of the
Executive's duties prior thereto. For purposes of this Agreement, "DISABILITY"
shall mean any disability that (a) entitles the Executive to disability income
benefits under the Company's Long-Term Disability Income Plan as in effect on
the Disability Effective Date, and (b) prevents the Executive, for the duration
of the Period of Employment, from engaging in the same or comparable type of
employment as provided for herein. Until the Disability Effective Date, the
Executive shall be entitled to all compensation provided for under Section 3
hereof. It is understood that nothing in this Section 4.5 shall serve to limit
the Company's obligations under Section 5 hereof.

                  4.6 NOTICE OF TERMINATION. Any termination by the Company or
by the Executive shall be communicated by a Notice of Termination to the other
party hereto given in accordance with Section 17.2 of this Agreement. For
purposes of this Agreement, a "NOTICE OF TERMINATION" means a written notice
which (i) indicates the specific termination provision in this Agreement relied
upon, (ii) sets forth in reasonable detail, if necessary, the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated, and (iii) if the Date of
Termination (as defined below) is other than the date of receipt of such notice,
specifies the termination date. The failure by the Executive or the Company to
set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of the basis for termination shall not waive any right
of such party hereunder or preclude such party from asserting such fact or
circumstance in enforcing his or its rights hereunder. "DATE OF TERMINATION"
means a date not later than ninety (90) days after the date of the Notice of
Termination, subject to the minimum notice periods, as applicable, stated in
Sections 4.2, 4.3 and 4.5 above; provided, however, that in the event of the
death, the Date of Termination shall be the date of death, and, in the event of
Disability, the Date of Termination shall be the Disability Effective Date.

         5. OBLIGATIONS OF THE COMPANY UPON TERMINATION. The following
provisions describe the obligations of the Company to the Executive under this
Agreement upon termination of the Period of Employment. However, except as
explicitly provided in this Agreement,

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nothing in this Agreement shall limit or otherwise adversely affect any rights
which the Executive may have under applicable law, under any other agreement
with the Company, or under any compensation or benefit plan, program, policy or
practice of the Company.

                  5.1 RESIGNATION WITHOUT GOOD REASON; TERMINATION BY THE
COMPANY FOR CAUSE. If the Company shall terminate the Executive's employment for
Cause or if the Executive shall resign without Good Reason, the Company shall
pay to the Executive (x) his Base Salary through the Date of Termination, (y)
the amount of any compensation previously deferred by the Executive, and (z) to
the extent not theretofore paid or provided, the Company shall timely pay or
provide to the Executive any other amounts or benefits required to be paid or
provided or which the Executive is eligible to receive under any plan, program,
policy, practice, contract or agreement of the Company (such other amounts and
benefits shall be hereinafter referred to as the "ACCRUED OBLIGATIONS") in each
case to the extent theretofore unpaid.

                  5.2 RESIGNATION WITH GOOD REASON; TERMINATION OTHER THAN FOR
CAUSE, DEATH OR DISABILITY. If (i) the Company shall terminate the Executive's
employment other than for Cause, death or Disability, or (ii) the Executive
shall terminate his employment for Good Reason, the Executive shall receive, in
addition to the Accrued Obligations, the following:

                         5.2.1 In a lump sum in cash within thirty (30) days
         after the Date of Termination,

                                  (a) the amount equal to the product of (A) two
                         (2) and (B) the sum of (x) the Executive's then-current
                         Base Salary and (y) the Executive's then-current target
                         bonus under the Company's Management Incentive Plan, or
                         any comparable bonus plan in which the Executive
                         participates and which has a target bonus generally
                         similar to that in the Company's Management Incentive
                         Plan (the "TARGET BONUS"), less amounts, if any, paid
                         to the Executive in accordance with the Company's
                         severance pay policies; and

                                  (b) a Prorated Bonus, where "PRORATED BONUS"
                         shall mean, as of the Date of Termination, the product
                         of (x) the Executive's then-current target annual bonus
                         as described in Section 3.2 of this Agreement
                         (annualized for any fiscal year consisting of less than
                         twelve (12) full months or during which the Executive
                         was employed for less than twelve (12) full months) and
                         (y) a fraction, the numerator of which is the number of
                         days in the current fiscal year through the Date of
                         Termination, and the denominator of which is three
                         hundred sixty-five (365);

                         5.2.2 For two (2) years after the Executive's Date of
         Termination, or such longer period as may be provided by the terms of
         the appropriate plan, program, practice or policy, the Company shall
         continue welfare benefits to the Executive and/or the Executive's
         eligible family members at least equal to those which would have been
         provided to them in accordance with the plans, programs, practices and
         policies described in Section 3.9 of this Agreement if the Executive's
         employment had not been terminated or, if more favorable to the
         Executive, as in effect generally at any time thereafter with

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         respect to other peer executives of the Company and its affiliated
         companies and their families (collectively, "WELFARE BENEFITS"),
         provided, however, that if the Executive becomes reemployed with
         another employer and is eligible to receive medical or other welfare
         benefits under another employer-provided plan, the medical and other
         welfare benefits described herein shall be secondary to those provided
         under such other plan during such applicable period of eligibility. For
         purposes of determining eligibility (but not the time of commencement
         of benefits) of the Executive for retiree benefits pursuant to such
         plans, practices, programs and policies, the Executive shall be
         considered to have remained employed until two (2) years after the Date
         of Termination and to have retired on the last day of such period. The
         Company shall continue to provide the Executive with Welfare Benefits
         at the Executive's own cost until the Executive is eligible for
         coverage under Medicare;

                         5.2.3 Continued vesting, through the five (5)-year
         anniversary of the Date of Termination, of all option awards granted to
         the Executive on or after the Effective Date;

                         5.2.4 Continued exercisability, through the first to
         occur of the five (5)-year anniversary of the Date of Termination or
         the end of the respective full original term, of all vested options,
         whether vested as of the Date of Termination or vested pursuant to
         subsection 5.2.3; and

                         5.2.5 At a maximum cost to the Company of ten percent
         (10%) of the Executive's then-current Base Salary, outplacement
         services the scope and provider of which shall be selected by the
         Executive in his sole discretion.

                         5.2.6 Provision of the payments and benefits described
         in Sections 5.2.1 through 5.2.5 is contingent upon Executive delivering
         to the Company an executed release of claims in such customary form as
         supplied to the Executive by the Company, and Executive not revoking
         such release during any revocation period.

                  5.3 DEATH. If the Executive's employment is terminated by
reason of the Executive's death during the Period of Employment, this Agreement
shall terminate without further obligations to the Executive's legal
representatives under this Agreement, other than for payment of the Prorated
Bonus and the timely payment or provision of the Accrued Obligations.

                  5.4 DISABILITY. If the Executive's employment is terminated by
reason of the Executive's Disability during the Period of Employment, this
Agreement shall terminate without further obligations to the Executive, other
than for payment of the Prorated Bonus and the timely payment or provision of
the Accrued Obligations.

                  5.5 COBRA RIGHTS. It is understood that the Executive's rights
under this Section 5 are in lieu of all other rights which the Executive may
otherwise have had upon termination of employment during the Period of
Employment; provided, however, that no provision of this Agreement is intended
to adversely affect the Executive's rights under the Consolidated Omnibus Budget
Reconciliation Act of 1985.

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         6. CHANGE OF CONTROL; CERTAIN PAYMENTS. Upon a Change of Control of the
Company (as defined in the COC Agreement), this Agreement shall automatically
expire and the Executive shall be treated under the terms of the COC Agreement.
In the event that the aggregate of all payments or benefits made or provided to,
or that may be made or provided to, the Executive under this Agreement and under
all other plans, programs and arrangements of the Company (the "AGGREGATE
PAYMENT") is determined to constitute a "parachute payment," as such term is
defined in Section 280G(b)(2) of the Internal Revenue Code, the terms of Section
9 of the COC Agreement shall apply.

         7. MITIGATION. In no event shall the Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to the Executive under any of the provisions of this Agreement. Any
severance benefits payable to the Executive shall not be subject to reduction
for any compensation received from other employment except as provided for
welfare benefits in subsection 5.2.2.

         8. INDEMNIFICATION. The Executive shall be indemnified by the Company
against liability as an officer and director of the Company and any subsidiary
or affiliate of the Company to the maximum extent permitted by the Company's
articles and by-laws and applicable law. The Company shall maintain, for the
benefit of the Executive, director and officer liability insurance in an amount
required to satisfy such indemnification; provided such coverage shall be in a
form at least as comprehensive as, and in an amount that is at least equal to,
the coverage for members of the Board or other officers of the Company. The
Executive's rights under this Section 8 shall continue so long as he may be
subject to such liability, whether or not this Agreement may have terminated
prior thereto.

         9. CONFIDENTIAL INFORMATION. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all information, knowledge or data
relating to the Company, or any of its affiliates, companies, and their
respective businesses, which shall have been obtained by the Executive during
the Executive's employment by the Company or any of its affiliate companies and
which shall have been identified and held by the Company as proprietary and
confidential and which is not public knowledge (other than due to acts by the
Executive or representatives of the Executive in violation of this Agreement).
After termination of the Executive's employment with the Company, the Executive
shall not, without the prior written consent of the Company or as may otherwise
be required by law or legal process, communicate or divulge any such
information, knowledge or data to anyone other than the Company and those
designated by it. In no event shall an asserted violation of the provisions of
this Section 9 constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement.

         10. NONCOMPETITION.

                  10.1 The Executive acknowledges that he performs services of a
unique nature for the Company that are irreplaceable, and that his performance
of such services to a competing business will result in irreparable harm to the
Company. Accordingly, during the Executive's employment hereunder and for the
"Restricted Period" (as defined hereafter), the Executive agrees that he will
not, directly or indirectly, own, manage, operate, control, be employed by
(whether as an employee, consultant, independent contractor or otherwise, and
whether or not for

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compensation) or render services to any person, firm, corporation or other
entity, in whatever form, engaged in any business of the same type as any
business in which the Company or any of its subsidiaries or affiliates is
engaged on the Date of Termination or in which they have proposed, on or prior
to such date, to be engaged in on or after such date and in which the Executive
has been involved to any extent (other than de minimis) at any time during the
twelve (12)-month period ending with the Date of Termination, in any locale of
any country in which the Company conducts business. This Section 10 shall not
prevent the Executive from owning not more than one percent of the total shares
of all classes of stock outstanding of any publicly held entity engaged in such
business, nor will it restrict the Executive from rendering services to
charitable organizations, as such term is defined in Section 501(c) of the
Internal Revenue Code.

                  10.2 "RESTRICTED PERIOD" shall mean a period ending on the
earlier of (i) the date two (2) years after the Date of Termination or (ii)
April 11, 2006.

         11. NONSOLICITATION. During the Executive's employment with the Company
and for the Restricted Period, the Executive agrees that he will not, directly
or indirectly, individually or on behalf of any other person, firm, corporation
or other entity, (i) knowingly solicit, aid or induce any managerial level
employee of the Company or any of its subsidiaries or affiliates to leave such
employment in order to accept employment with or render services to or with any
other person, firm, corporation or other entity unaffiliated with the Company,
(ii) knowingly take any action to materially assist or aid any other person,
firm, corporation or other entity in identifying or hiring any such employee or
(iii) knowingly solicit, aid or induce any customer of the Company or any of its
subsidiaries or affiliates to purchase goods or services then sold by the
Company or any of its subsidiaries or affiliates from another person, firm,
corporation or other entity or knowingly assist or aid any other persons or
entity in identifying or soliciting any such customer.

         12. REMEDY FOR VIOLATION OF SECTION 9, 10 OR 11. The Executive
acknowledges that the Company has no adequate remedy at law and will be
irreparably harmed if the Executive breaches or threatens to breach any
provision of Section 9, 10 or 11 of this Agreement, and, therefore, agrees that
the Company shall be entitled to injunctive relief to prevent any breach or
threatened breach of any such Section and that the Company shall be entitled to
specific performance of the terms of such Sections in addition to any other
legal or equitable remedy it may have. Nothing in this Agreement shall be
construed as prohibiting the Company from pursuing any other remedies at law or
in equity that it may have or any other rights that it may have under any other
agreement.

         13. ARBITRATION. Any dispute or controversy between the Company and the
Executive, whether arising out of or relating to this Agreement, the breach of
this Agreement, or otherwise, shall be settled by arbitration administered by
the American Arbitration Association ("AAA") in accordance with its Commercial
Arbitration Rules then in effect, and judgment on the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. Any
arbitration shall be held before a single arbitrator who shall be selected by
the mutual agreement of the Company and the Executive, unless the parties are
unable to agree to an arbitrator, in which case, the arbitrator will be selected
under the procedures of the AAA. The arbitrator shall have the authority to
award any remedy or relief that a court of competent jurisdiction could order or
grant, including, without limitation, the issuance of an injunction.

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However, either party may, without inconsistency with this arbitration
provision, apply to any court having jurisdiction over such dispute or
controversy and seek interim provisional, injunctive or other equitable relief
until the arbitration award is rendered or the controversy is otherwise
resolved. Except as necessary in court proceedings to enforce this arbitration
provision or an award rendered hereunder, or to obtain interim relief, neither a
party nor an arbitrator may disclose the existence, content or results of any
arbitration hereunder without the prior written consent of the Company and the
Executive. The Company and the Executive acknowledge that this Agreement
evidences a transaction involving interstate commerce. Notwithstanding any
choice of law provision included in this Agreement, the United States Federal
Arbitration Act shall govern the interpretation and enforcement of this
arbitration provision. The arbitration proceeding shall be conducted in Chicago,
Illinois or such other location to which the parties may agree. The Company
shall pay the costs of any arbitrator appointed hereunder.

         14. REIMBURSEMENT OF LEGAL EXPENSES. In the event that the Executive is
successful, whether in mediation, arbitration or litigation, in pursuing any
claim or dispute involving the Executive's employment with the Company,
including any claim or dispute relating to (a) this Agreement, (b) termination
of the Executive's employment with the Company or (c) the failure or refusal of
the Company to perform fully in accordance with the terms hereof, the Company
shall promptly reimburse the Executive for all costs and expenses (including,
without limitation, attorneys' fees) relating solely, or allocable, to such
successful claim. In any other case, the Executive and the Company shall each
bear all their own respective costs and attorneys' fees.

         15. WITHHOLDING. Anything in this Agreement to the contrary
notwithstanding, all payments required to be made by the Company hereunder to
the Executive shall be subject to withholding, at the time payments are actually
made to the Executive and received by him, of such amounts relating to taxes as
the Company may reasonably determine it should withhold pursuant to any
applicable law or regulation. In lieu of withholding such amounts, in whole or
in part, the Company may, in its sole discretion, accept other provision for
payment of taxes as required by law, provided that it is satisfied that all
requirements of law as to its responsibilities to withhold such taxes have been
satisfied.

         16. SUCCESSORS.

                  16.1 This Agreement is personal to the Executive and without
the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
heirs and legal representatives.

                  16.2 This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.

                  16.3 The Company shall require any successor (whether direct
or indirect, by purchase, merger, reorganization, consolidation, acquisition of
property or stock, liquidation, or otherwise) to all or a substantial portion of
its assets, by agreement in form and substance reasonably satisfactory to the
Executive, expressly to assume and agree to perform this

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Agreement in the same manner and to the same extent that the Company would be
required to perform this Agreement if no such succession had taken place.
Regardless of whether such an agreement is executed, this Agreement shall be
binding upon any successor of the Company in accordance with the operation of
law, and such successor shall be deemed the "Company" for purposes of this
Agreement. As used in this Agreement, the term "Company" shall include any
successor to the Company's business and/or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law, or otherwise.

         17. MISCELLANEOUS.

                  17.1 This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois, without reference to
principles of conflicts of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.

                  17.2 All notices and other communications hereunder shall be
in writing and shall be given by hand delivery to the other party, by overnight
courier, or by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:

                  If to the Executive:

                           Mr. Ronald H. Zech
                           770 Heather Lane
                           Winnetka, IL  60093

                  If to the Company:

                           GATX Corporation
                           500 W. Monroe Street
                           Chicago, IL 60661
                           Attn:  General Counsel

or to such other address as either of the parties shall have furnished to the
other in writing in accordance herewith. Notice and communications shall be
effective when actually received by the addressee.

                  17.3 The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.

                  17.4 Any party's failure to insist upon strict compliance with
any provision hereof shall not be deemed to be a waiver of such provision or any
other provision hereof.

                  17.5 This Agreement supersedes any prior employment agreement
or understandings, written or oral between the Company and the Executive and
contains the entire understanding of the Company and the Executive with respect
to the subject matter hereof.

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                  17.6 This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
dates written below.

                                 GATX CORPORATION

                                 By:
                                    -------------------------------------------
                                          James M. Denny

                                 Its:     Chairman of the Compensation
                                          Committee of the Board of Directors

                                 Date:
                                      -----------------------------------------

                                 By:
                                    -------------------------------------------
                                          Ronald J. Ciancio

                                 Its:     Vice President, General Counsel and
                                          Secretary

                                 Date:
                                      -----------------------------------------

                                 RONALD H. ZECH

                                 ----------------------------------------------

                                 Date:
                                      -----------------------------------------

                                       11<PAGE>
                                                                   EXHIBIT 10.12
INTER
OFFICE
MEMO

                                             DATE: November 27, 2001

TO:               Mr. G. Stephen Felker

FROM:             Sharon L. Rodgers

         I am pleased to inform you that you have been approved to participate
in the management incentive plan for fiscal 2002. You will participate in the
plan based on an individual percentage award of 125%.

         For fiscal 2002, 100% of your actual incentive award will be based on
achievement of Financial Goals, as set forth below:

                                 Financial Goals

         The Financial Goals for your fiscal 2002 award are as follows:

<TABLE>
<CAPTION>
                                             Corporate
                                             Operating Earnings
                  Performance                (Thousands of Dollars)
                     Level                          (EBITDAL)
                  -----------                ----------------------
                  <S>                        <C>
                       50%                           80,000
                       75%                           90,000
                      100%                          100,000
</TABLE>

         100% of your actual incentive award will be based on achievement of
Financial Goals. Your actual incentive award will be determined by multiplying
your total base salary paid in fiscal 2002 times your individual percentage
award times the Performance Level achieved as set forth above and will be
calculated by the Company. Any such award will be prorated when the Performance
Level achieved falls between the 50% and 100% levels. No incentive award will be
paid if the Performance Level is below 50%, and no additional incentive award
will be paid for any financial results which exceed the 100% Performance Level.

<PAGE>

         The general guidelines of the plan for fiscal 2002 are as follows:

         1.       Operating earnings (EBITDAL) will be defined as reported in
                  the Company's financial statements (Red Stripe).

         2.       Your actual incentive award will be paid on an annual basis,
                  with payment to be made as soon as practical after the fiscal
                  year audit is completed.

         3.       No incentive award will be paid if you are not in the employ
                  of the Company on the last day of the fiscal year (effective
                  date of severance must be after fiscal year end).

         4.       In the event you are reassigned or given a new position and
                  responsibilities during the fiscal year (promotion or
                  demotion), payment of the incentive award will be determined
                  on a case-by-case basis. The Company reserves the right to
                  deny payment or to reduce the incentive award in the case of
                  demotions.

         Please indicate your understanding of the plan, the performance goals
and your potential incentive award by signing and returning this letter to me. A
copy is provided for your personal files.

                                            ------------------------------

SLR/kjw

Acknowledged:
              -----------------------------------

Date:
              -----------------------------------

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