Exhibit 10(gg)
EXECUTION COPY
EMPLOYMENT
AGREEMENT
THIS AGREEMENT (this
“Agreement”), made and entered into in Greenwich,
Connecticut on February 2, 2009, between United Rentals, Inc.,
a Delaware corporation (the “Company”), and Jonathan M.
Gottsegen (“Executive”).
WHEREAS, the Company desires to
employ Executive as its Senior Vice President; General Counsel and
Corporate Secretary, 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’s employment with
the Company shall commence on or about February 17, 2009.
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 Senior Vice President; General Counsel and Corporate
Secretary of the Company and shall report directly 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 Senior
Vice President; General Counsel and Corporate Secretary, 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 consistent with Executive’s
position and title.
(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, reasonable 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 $350,000. 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) Signing Bonus . The
Company shall pay a signing bonus to Executive of $50,000 (the
“Signing Bonus”). The Signing Bonus shall be paid as
soon as practicable after the commencement of his employment with
the Company but in all events within 30 days of such commencement.
Notwithstanding the foregoing, Executive agrees to repay 100% of
the Signing Bonus to the Company in the event the Company
terminates his employment for Cause (as defined in
Section 4(e)(i) hereof) or Executive terminates his employment
without Good Reason (as defined in Section 4(e)(ii) hereof)
within the first 12 months of his employment. Any repayment of the
Signing Bonus shall be made within 90 days following the date of
termination of Executive’s employment.
(c) Annual Incentive Bonus
Plan . With respect to each year 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 Annual Bonus for calendar year 2009 shall be pro
rated to reflect the number of days during 2009 he is employed by
the Company. Executive’s target incentive opportunity under
the Annual Incentive Plan shall be 60% of Base Salary (as at the
beginning of the applicable performance period) and
Executive’s maximum incentive opportunity shall be 100% 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.
(d) 2009 Performance-Based
Long-Term Award Grant . The Company shall grant Executive
during 2009 a performance-based long-term incentive award pursuant
to the terms of the applicable plan under which the award is
granted and of the award, with an anticipated target value of
$315,000 (based on the valuation method used by the Company with
respect to awards for its senior executives). The award is
anticipated to be granted in February 2009. 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 15 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) Relocation . The Company
shall pay directly, or reimburse Executive, for the cost of
relocating to the Greenwich, Connecticut area in accordance with
and subject to the terms of the Company’s Executive Homeowner
Relocation Policy (a copy of which is attached hereto as Exhibit A)
as modified to accommodate your relocation.
(h) 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.
(i) 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
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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.
(j) 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.
(k) 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 Sections 3(e) and (g) 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(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).
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(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);
(ii) the Signing Bonus referred to
in Section 3(b) if not previously paid; and
(iii) if Executive (or, following
his death, his spouse or legal guardian of his children) 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.
(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) the Signing Bonus referred to
in Section 3(b) if not previously paid;
(iii) 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
(iv) an amount equal
to 160% 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 the first
payment shall be on the pay day coinciding with or next following
the eighth (8 th ) day after
Executive’s delivery (without revoking) of the release
provided for in Section 4(h) hereof and such payment shall be
equal to the amounts that would have been paid had payments begun
immediately after the date of termination. Notwithstanding the
foregoing, 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
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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 .
(i) 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; (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 Senior
Vice President or General Counsel or Corporate Secretary other than
due to his resignation;
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(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.
(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 positi
