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Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS
AGREEMENT (the “Agreement”), made in Greenwich,
Connecticut as of December 1, 2008, between United Rentals, Inc., a
Delaware corporation (the “Company”), and
William B. Plummer (“Executive”).
WHEREAS,
the Company desires to employ Executive as its Executive Vice
President and Chief Financial Officer, and Executive desires to
accept such employment on the terms and conditions hereinafter set
forth;
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants and agreements
hereinafter set forth, the Company and Executive agree as
follows:
1.
At Will Employment .
Executive
will be employed by the Company at will, which means that either
Executive or the Company may terminate the employment relationship
at any time and for any reason or no reason. Notwithstanding the
foregoing, following the termination of Executive’s
employment, Executive shall be entitled to the compensation and
benefits provided for in Section 4 of this Agreement, as applicable
depending on the circumstances of such termination, in accordance
with such provisions.
2.
Employment .
(a)
Employment by the Company . Executive agrees to be employed
by the Company upon the terms and subject to the conditions set
forth in this Agreement. Executive shall serve as Executive Vice
President and Chief Financial Officer of the Company and shall
report to the President and Chief Executive Officer of the
Company.
(b)
Performance of Duties . During his employment, Executive
shall faithfully and diligently perform Executive’s
duties in conformity with the directions of the President and Chief
Executive Officer of the Company and serve the Company to the best
of Executive’s ability. Executive shall devote his full
business time and best efforts to the business and affairs of the
Company. In his capacity as Executive Vice President and Chief
Financial Officer, he shall have such duties and responsibilities
as are customary for Executive’s position and any other
duties and responsibilities he may be assigned by the President and
Chief Executive Officer of the Company.
(c)
Place of Performance . Executive shall be based at the
Company’s offices in Greenwich, Connecticut. Executive
recognizes that his duties will require, at the Company’s
expense, travel to domestic and international locations.
3.
Compensation and Benefits .
(a)
Base Salary . The Company agrees to pay to Executive a base
salary (“Base Salary”) at the annual rate of
$475,000. The Compensation Committee of the Board of Directors of
the Company may determine in its sole discretion to increase, but
not decrease, the Base Salary. Payments of the Base Salary shall be
payable in equal installments in accordance with the
Company’s standard payroll practices.
(b)
Annual Incentive Bonus Plan . With respect to each year
after 2008 during Executive’s employment hereunder,
Executive shall be eligible to receive an annual cash incentive
bonus (the “Annual Bonus”) pursuant to the
terms of the United Rentals, Inc. Annual Incentive Compensation
Plan or any successor thereto, as it may be amended from time to
time (the “Annual Incentive Plan”).
Executive’s target incentive opportunity under such plan
shall be 80% of Base Salary (as at the beginning of the applicable
performance period) and Executive’s maximum incentive
opportunity shall be 125% of Base Salary (as at the beginning of
the applicable performance period). Executive has been determined
by the Committee (as defined in the Annual Incentive Plan) to be a
Covered Employee (as defined in the Annual Incentive Plan) under
the Annual Incentive Plan, and Executive’s Performance
Goals (as defined in the Annual Incentive Plan) shall be determined
by the Committee (as defined in the Annual Incentive Plan) in
accordance with Section 2.11.1 and Article V of the Annual
Incentive Plan. The Annual Bonus for a year shall be paid to
Executive in the year following such year at such times and in such
amounts as provided in the Annual Incentive Plan, provided that in
no event shall such payment be paid later than December 31 of the
following year.
(c)
Restricted Stock Unit Grant . The Company shall award to
Executive, as of the commencement of his employment with the
Company, a grant of 40,000 restricted stock units (13,333 of which
shall vest on December 1, 2009 and the remaining 26,667 of which
shall vest on December 1, 2011) in accordance with and subject to
the provisions of the United Rentals, Inc. 2001 Comprehensive Stock
Plan, as it may be amended from time to time, and a 2001
Comprehensive Stock Plan Restricted Stock Unit Agreement in
substantially the form attached hereto as Exhibit A (the
“RSU Agreement”).
(d)
2009 Performance-Based Long-Term Award Grant . The Company
shall grant Executive during 2009 a performance-based long-term
incentive award with an anticipated target value of $450,000 (based
on the valuation method used by the Company with respect to awards
for its senior executives). The award may consist of option grants,
restricted stock units, or other equity-based awards as may be
determined by the Compensation Committee of the Board of Directors
of the Company.
(e)
Benefits and Perquisites . Executive shall be entitled to
participate in, to the extent Executive is otherwise eligible under
the terms thereof, the benefit plans and programs, and receive the
benefits and perquisites, generally provided by the Company to
executives of the Company, including without limitation family
medical insurance (subject to applicable employee contributions).
Executive shall be entitled to not less than 20 vacation days per
year, such days to be accrued in accordance with Company
policy.
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(f)
Business Expenses . The Company agrees to reimburse
Executive for all reasonable and necessary travel, business
entertainment and other business expenses incurred by Executive in
connection with the performance of his duties under this Agreement
in accordance with, and subject to, the Company’s
standard policies. Such reimbursements shall be made by the Company
on a timely basis upon submission by Executive of vouchers in
accordance with the Company’s standard
procedures.
(g)
Indemnification . The Company shall indemnify Executive in
accordance with, and subject to, the terms of the indemnification
agreement in the form attached hereto as Exhibit B (the
“Indemnification Agreement”). Notwithstanding
anything in this Agreement to the contrary, the rights and
obligations of the parties with respect to indemnification
(including dispute resolution, governing law and notice) shall be
governed by the Indemnification Agreement.
(h)
Reimbursement of Compensation . In the event that payment of
any compensation to Executive is predicated upon the achievement of
certain financial results that subsequently are the subject of a
Mandatory Restatement (as defined below) and a lower payment (or no
payment) would have been made to Executive based upon the restated
financial results, Executive shall reimburse the Company the
difference between the amount actually paid and the amount that
would have been payable to Executive reduced by the Net Tax Costs
(as defined below), based upon the restated financial results.
Executive’s reimbursement to the Company shall be made
within 30 business days after receiving written notice of the
amount owed and the calculations thereof. A “Mandatory
Restatement” shall mean a restatement of the
Company’s financial statement which, in the good faith
opinion of the Company’s public accounting firm, is
required to be implemented pursuant to generally accepted
accounting principles, but excluding (i) any restatement which is
required with respect to a particular year as a consequence of a
change in generally accepted accounting rules effective after the
publication of the financial statements for such year, or (ii) any
restatement that (A) in the good faith judgment of the Audit
Committee of the Board of Directors of the Company
(“Audit Committee”), is required due to a
change in the manner in which the Company’s auditors
interpret the application of generally accepted accounting
principles (as opposed to a change in a prior accounting conclusion
due to a change in the facts upon which such conclusion was based),
or (B) is otherwise required due to events, facts or changes in law
or practice that the Board of Directors of the Company concludes
were beyond the control and responsibilities of Executive and that
occurred regardless of Executive’s diligent and thorough
performance of his duties and responsibilities. “Net Tax
Costs” shall mean the net amount of any federal, foreign,
state or local income and employment taxes paid by Executive in
respect of the portion of the compensation subject to
reimbursement, after taking into account any and all available
deductions, credits or other offsets allowable to Executive
(including without limit, any deductions permitted under the claim
of right doctrine), and regardless of whether Executive would be
required to amend any prior income or other tax returns.
(i)
No Other Compensation or Benefits; Payment; Withholdings .
The compensation and benefits specified in this Section 3 and in
Section 4 of this Agreement shall be in lieu of any and all other
compensation and benefits. Payment of all compensation and benefits
to Executive specified in this Section 3 and in Section 4 of this
Agreement (i) shall be made in accordance with the relevant Company
policies in effect from time to time to the extent the same are
consistently applied, including normal payroll practices, and (ii)
shall be subject to all legally required and customary
withholdings.
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(j)
Cessation of Employment . In the event Executive shall cease
to be employed by the Company for any reason, then
Executive’s compensation and benefits shall cease on the
date of such event, except as otherwise specifically provided
herein or in any applicable employee benefit plan or program or as
required by law.
4.
Compensation Following Termination . Executive shall be
entitled only to the following compensation and benefits upon
termination of employment:
(a)
General . On any termination of Executive’s
employment, he shall be entitled to:
(i) any
accrued but unpaid Base Salary for services rendered through the
date of termination;
(ii) any
vacation accrued but unused as of the date of termination;
(iii) any
accrued but unpaid expenses required to be reimbursed in accordance
with Section 3(f) of this Agreement;
(iv) receive
any benefits to which he may be entitled upon termination pursuant
to the plans and programs referred to in Section 3(e) hereof or as
may be required by applicable law;
(v) receive
any amounts or benefits to which he may be entitled upon
termination pursuant to the plans and agreement referred to in
Sections 3(b), 3(c) and 3(d) hereof in accordance with the terms of
such plans and agreements; and
(vi) such
rights as he has under the terms of the Indemnification
Agreement.
(b)
Termination by the Company for Cause; Termination by Executive
Without Good Reason . In the event that Executive’s
employment is terminated (i) by the Company for Cause (as defined
below) or (ii) by Executive without Good Reason (as defined below),
Executive shall be entitled only to those items identified in
Section 4(a).
(c)
Termination by Reason of Death or Disability . In the event
that Executive’s employment is terminated by reason of
Executive’s death or Disability (as defined below),
Executive (or his estate, as the case may be) shall be entitled
only to the following:
(i) those
items identified in Section 4(a); and
(ii) if
Executive (or, following his death, his spouse) timely elects COBRA
continuation coverage, the Company will pay through the COBRA
Payment End Date (as defined below) the monthly premiums for the
level of coverage Executive maintained on the date of termination.
The “COBRA Payment End Date” shall be the
earlier of (A) 12 months following the date of termination and (B)
the date Executive becomes employed by a third party and is
eligible for coverage under the group health plan of the new
employer. If during the period Executive is receiving this benefit,
Executive obtains new employment and becomes eligible for coverage
under the group benefits plan of the new employer, Executive shall
promptly notify the Company in writing of such eligibility.
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(d)
Termination by the Company Without Cause or by Executive for
Good Reason . In the event that Executive’s
employment is terminated (i) by the Company without Cause or (ii)
by Executive for Good Reason, Executive shall be entitled only to
the following:
(i) those
items identified in Section 4(a);
(ii) if
Executive timely elects COBRA continuation coverage, the Company
will pay through the COBRA Payment End Date the monthly premiums
for the level of coverage Executive maintained on the date of
termination, provided that if during the period Executive is
receiving this benefit, Executive obtains new employment and
becomes eligible for coverage under the group benefits plan of the
new employer, Executive must promptly notify the Company in writing
of such eligibility; and
(iii) an
amount equal to 180% of Executive’s Base Salary as of the
date of termination, payable in substantially equal installments
during the 12-month period following the date of termination in
accordance with the Company’s normal payroll practices
(the “Severance Pay”); provided, however, that
if necessary to comply with Section 409A(a)(2)(B)(i) of the
Internal Revenue Code of 1986, as amended (the
“Code”), and applicable administrative guidance
and regulations, the payment of the Severance Pay such sums shall
be made as follows: (A) no payments shall be made for a six-month
period following the date of termination, (B) an amount equal to
six months of Severance Pay shall be paid in a lump sum six months
and one day following the date of termination with interest at the
applicable federal rate pursuant to Section 1274 of the Code, and
(C) during the period beginning six months and one day
following the date of termination through the remainder of the
12-month period, payment of the Severance Pay shall be made in
accordance with the Company’s normal payroll
practices.
(e)
Definitions of Cause, Good Reason and Disability .
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(i) Executive
shall not be deemed to have been terminated for Cause unless and
until there shall have been delivered to Executive a copy of a
resolution duly adopted by the affirmative vote of not less than a
majority of the Nominating and Corporate Governance Committee of
the Board of Directors of the Company finding that in the good
faith opinion of such committee, Executive, after giving effect to
any applicable cure period described below, was guilty of conduct
set forth in this Section 4(e)(i) and that reasonably identifies
the reason(s) for such opinion. For purposes of this Agreement, the
term “Cause” shall mean any of the following:
(A) Executive has willfully misappropriated any funds or property
of the Company or its affiliates, or has willfully destroyed
property of the Company or its affiliates; (B) Executive has
committed (1) a felony or (2) any crime (x) involving fraud,
dishonesty or moral turpitude or (y) that materially impairs
Executive’s ability to perform his duties and
responsibilities with the Company or that causes material damage to
the Company or its affiliates or their operations or reputation;
(C) Executive has (1) obtained personal profit from any transaction
of or involving the Company or an affiliate of the Company (or
engaged in any activity with the intent of obtaining such a
personal profit) without the prior approval of the Company or (2)
engaged in any other willful misconduct which constitutes a breach
of fiduciary duty or the duty of loyalty to the Company or its
affiliates and which has resulted or is reasonably likely to result
in material damage to the Company or its affiliates; (D)
Executive’s material failure to perform his duties with
the Company (other than as a result of total or partial incapacity
due to physical or mental illness), provided, however, that, if
susceptible of cure, a termination by the Company for Cause under
this Section 4(e)(i)(D) shall be effective only if, within 20 days
following delivery of a written notice by the Company to Executive
that Executive has materially failed to perform his duties and that
reasonably identifies the reason(s) for such determination,
Executive has failed to cure such failure to perform (nothing
herein being intended to eliminate the requirement included in the
first sentence of this Section 4(e)(i));
(E) Executive’s use of alcohol or drugs has
materially interfered with his ability to perform his duties and
responsibilities with the Company; (F) Executive has knowingly made
any untrue statement or omission of a material nature to the
Company or an affiliate of the Company; (G) Executive has
knowingly falsified Company records (or those of one of its
affiliates); (H) Executive has willfully committed any act (1)
which is intended to materially damage the reputation of the
Company or an affiliate of the Company or (2) which in fact
materially damages the reputation of the Company or an affiliate;
(I) Executive (1) has willfully violated the Company’s
material policies or rules (including, but not limited to, the
Company’s equal employment opportunity policies), which
violation has resulted or is reasonably likely to result in damage
to the Company or its affiliates, or (2) is guilty of gross
negligence or willful misconduct in the performance of his duties
with the Company, which has resulted or is reasonably likely to
result in material damage to the Company or its affiliates;
(J) Executive has materially breached a covenant set forth in
Section 5 or otherwise materially violated any confidentiality,
non-competition or non-solicitation prohibitions imposed on
Executive under common law or under the terms of any agreement with
the Company; or (K) Executive has willfully obstructed or attempted
to obstruct, or has willfully failed to cooperate with, any
investigation authorized by the Board of Directors of the Company
or any governmental or self-regulatory authority regarding a
Company matter.
(ii) For
purposes of this Agreement, the term “Good
Reason” shall mean any of the following: (A) the Company
removes Executive from the position of Executive Vice President or
Chief Financial Officer other than due to his resignation; (B) the
Company decreases or fails to pay the compensation described in
Section 3 of this Agreement (in accordance with, and subject to,
such provisions); (C) a material breach of this Agreement by the
Company; (D) Executive’s job site is relocated to a
location which is more than fifty (50) miles from Greenwich,
Connecticut, unless the parties mutually agree in writing to such
relocation; (E) material diminution of Executive’s duties
or responsibilities (it being understood by the parties that a
simultaneous increase and decrease of Executive’s duties
and responsibilities consented to by the parties, such consent not
to be unreasonably withheld, shall not constitute Good Reason) or
(f) the failure by the Company to obtain the express written
assumption of this Agreement by any successor to all or
substantially all of the Company’s business or
operations; provided, however, that a termination by Executive for
Good Reason under this Section 4(e)(ii) shall be effective only if,
within 20 days following delivery of a written notice by Executive
to the Company that Executive is terminating his employment for
Good Reason and that reasonably identified the reason(s) for such
determination, such notice to be given not later than 90 days after
the occurrence (or, if later, the date that Executive becomes aware
or reasonably should have become aware of such occurrence) of the
event(s) claimed to constitute Good Reason, the Company has failed
to cure the circumstances giving rise to Good Reason.
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(iii) For
purposes of this Agreement, a “Disability”
shall occur in the event Executive is unable to perform the duties
and responsibilities contemplated under this Agreement for a period
of either (A) 90 consecutive days or (B) six months in any 12-month
period due to physical or mental incapacity or impairment. During
any period that Executive fails to perform Executive’s
duties hereunder as a result of incapacity or impairment due to
physical or mental illness (the “Disability
Period”), Executive shall continue to receive the
compensation and benefits provided by Section 3 of this Agreement
until Executive’s employment hereunder is terminated;
provided, however, that the amount of base compensation and
benefits received by Executive during the Disability Period shall
be reduced by the aggregate amounts, if any, payable to Executive
under any disability benefit plan or program provided to Executive
by the Company in respect of such period.
(f)
Effect of Material Breach of Section 5 on Compensation Following
Termination of Employment . If, at the time of termination of
Executive’s employment or any time thereafter, Executive
is in material breach of any covenant contained in Section 5
hereof, except as otherwise required by law, Executive shall not be
entitled to any payments (or if payments have commenced, any
continued payment) under this Section 4.
(g)
Resignation of Offices Upon Termination . Upon termination
of Executive’s employment for any reason, Executive
agrees that he shall resign from all offices and positions he holds
with the Company or any of its affiliates; and further agrees that
he shall execute such documents as shall be reasonably necessary to
give effect to such resignations.
(h)
No Further Liability; Release . Other than providing the
compensation and benefits provided for in accordance with this
Section 4, the Company and its directors, officers, employees,
subsidiaries, affiliates, stockholders, successors, assigns, agents
and representatives shall have no further obligation or liability
to Executive or any other person under this Agreement. The payment
of any amounts pursuant to this Section 4 (other than payments
required by law) is expressly conditioned upon (i) the delivery by
Executive to the Company of a release in form and substance
reasonably satisfactory to the Company of any and all claims
Executive may have against the Company and its directors, officers,
employees, subsidiaries, affiliates, stockholders, successors,
assigns, agents and representatives arising out of or related to
Executive’s employment by the Company and the termination
of such employment and (ii) Executive not revoking such release
within seven days of his delivery of the release.
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5.
Exclusive Employment; Noncompetition; Nonsolicitation;
Nondisclosure of Proprietary Information; Surrender of Records;
Inventions and Patents .
5.1
No Conflict; No Other Employment . During the period of
Executive’s employment with the Company, Executive shall
not: (i) engage in any activity which conflicts or interferes
with or derogates from the performance of Executive’s
duties hereunder nor shall Executive engage in any other business
activity, whether or not such business activity is pursued for gain
or profit, except as approved in advance in writing by the Company;
provided, however, that Executive shall be entitled to manage his
personal investments and otherwise attend to personal affairs,
including charitable, social and political activities, and continue
to serve as a member of the Board of Directors of John Wiley and
Sons, Inc., in a manner that does not unreasonably interfere with
his responsibilities hereunder, or (ii) accept or engage in any
other employment, whether as an employee or consultant or in any
other capacity, and whether or not compensated therefor.
5.2
Noncompetition; Nonsolicitation .
(a) Executive
acknowledges and recognizes the highly competitive nature of the
Company’s business and that access to the
Company’s confidential records and proprietary
information and exposure to customers of the Company renders him
special and unique within the Company’s industry. In
consideration of the payment by the Company to Executive of amounts
that may hereafter be paid to Executive pursuant to this Agreement
(including, without limitation, pursuant to Sections 3 and 4
hereof) and other obligations undertaken by the Company hereunder,
Executive agrees that during (i) his employment with the Company,
and (ii) the period beginning on the date of termination of
employment and ending one year after the date of termination of
employment (the “Covered Time”), Executive
shall not, directly or indirectly, engage (as owner, investor,
partner, stockholder, employer, employee, consultant, advisor,
director or otherwise) in any Competing Business in any Restricted
Area (each as defined below), provided that the provisions of this
Section 5.2(a) will not be deemed breached merely because Executive
owns less than 5% of the outstanding common stock of a
publicly-traded company. For purposes of this Agreement,
“Competing Business” shall mean (i) any
business in which the Company is currently engaged, including, but
not limited to, renting and selling equipment and merchandise to
the commercial and general public, including construction
equipment, earthmoving equipment, aerial equipment, aeri
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