Exhibit 10.4
UNITED RENTALS, INC.
ANNUAL INCENTIVE COMPENSATION PLAN
(as amended and restated, effective December 16,
2008)
ARTICLE I
PURPOSE
The
purpose of the Annual Incentive Compensation Plan (the
“Plan”) is to advance the interests of United Rentals,
Inc. (the “Company”) by rewarding selected senior
executives of the Company for their significant contributions to
the growth, profitability and success of the Company from year to
year.
The
Company intends that compensation payable under the Plan will
constitute “qualified performance-based compensation”
under Section 162(m) of the Internal Revenue Code of 1986, as
amended. The Plan shall be administered and construed in a manner
consistent with such intent.
Subject
to approval by the Company’s stockholders, the Plan shall be
effective as of January 1, 2004.
ARTICLE II
DEFINITIONS
2.1
Award: The amount due a Participant under the Plan for a
Performance Period, as determined by the Committee.
2.2
Board: The Board of Directors of the Company.
2.3
Business Unit: A division or line of business of the
Company.
2.4
Code: The Internal Revenue Code of 1986, as amended;
references to particular provisions of the Code shall include any
amendments thereto or successor provisions and any rules and
regulations promulgated thereunder.
2.5
Committee: The Compensation Committee of the Board (or a
special committee of the Board with responsibilities relating to
executive compensation), which shall be comprised of at least two
or more individuals who qualify as “outside directors”
within the meaning of Section 162(m) of the Code and as
“independent directors” under the Corporate Governance
Rules of the New York Stock Exchange.
2.6
Company: United Rentals, Inc., a Delaware corporation, or
any successor thereto and each Subsidiary.
2.7
Covered Employee: The Chief Executive Officer of the Company
and any other Participant determined by the Committee to be a
“covered employee” within the meaning of Section 162(m)
of the Code whose “applicable employee remuneration”
(within the meaning of Section 162(m) of the Code) for any year is
expected to exceed $1,000,000.
2.8
Disability: Disability, as defined in a Participant’s
employment agreement with the Company, if any, or, absent an
agreement, the Participant’s inability to perform his or her
material duties due to illness, physical or mental disability or
other incapacity, as evidenced by a written statement of a
physician licensed to practice in any state in the United States
mutually agreed upon by the Company and the Participant, which
disability or other incapacity continues for a period in excess of
180 days in any 12-month period.
2.9
Exchange Act: The Securities Exchange Act of 1934, as
amended, and any rules and regulations promulgated
thereunder.
2.10
Participant: For any Performance Period, an executive or
other key employee of the Company designated by the Committee to
participate in the Plan.
2.11
Performance Goal:
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2.11.1
For any Participant who is a Covered Employee, a nondiscretionary
and objective financial or other performance measure established in
writing by the Committee, based solely on one or more of the
following business criteria as established by the Committee: (a)
net income, earnings per share, pre-tax income, operating income,
operating cash flow, return on invested capital, customer
satisfaction, revenue growth, or credit quality (or any of the
foregoing adjusted to exclude or include specified items as the
Committee determines is appropriate to measure performance); and/or
(b) objective individual performance, taking into account
individual goals and objectives. With respect to any such
Participant who is employed in a Business Unit, the criteria
specified in clause (a) above may be based on results of the
Business Unit or on a combination of those results and results for
the Company.
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2.11.2
For any Participant who is not a Covered Employee, (i) any one or a
combination of quantitative criteria (including, without
limitation, the quantitative criteria specified in clause (a) of
subsection 2.11.1), (ii) qualitative criteria measuring individual
performance, taking into account individual goals and objectives or
(iii) a combination of the quantitative and qualitative criteria
referred to in the preceding two clauses. With respect to any such
Participant who is employed in a Business Unit, the quantitative
and qualitative criteria may be based on results for the Business
Unit or on a combination of those results and results for the
Company.
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2.12
Performance Period: The fiscal year of the Company, which is
the calendar year, or any other period designated by the Committee
with respect to which an Award may be made.
2.13
Plan: The United Rentals, Inc. Annual Incentive Compensation
Plan, as herein set forth and as it may be amended from time to
time.
2.14
Subsidiary: Any corporation that is a direct or indirect
subsidiary of the Company, the earnings of which are consolidated
with the earnings of the Company for financial reporting
purposes.
2.15
Target Allocation: A Participant’s target annual bonus
opportunity, which shall be a dollar amount equal to a percentage
of a Participant’s base salary as of the first day of the
Performance Period, as determined by the Committee.
2.16
Termination for Good Reason: Termination of a
Participant’s employment by the Company for “Good
Reason,” as defined in the Participant’s employment
agreement, if any. Except as otherwise provided by the Committee, a
Participant shall not be entitled to payment of an Award under
Section 8.1 pursuant to a Termination for Good Reason unless such
Participant is a party to an employment agreement with the Company
that contains a “Good Reason,” constructive discharge
or similar termination provision, and his or her employment has
terminated as a consequence of any such provision.
2.17
Termination Without Cause: Termination of a
Participant’s employment by the Company without
“Cause,” as defined in the Participant’s
employment agreement with the Company, if any, or, absent an
agreement defining “Cause,” termination of the
Participant’s employment by the Company for any reason other
than (i) failure to perform substantially his or her duties with
the Company (other than such failure resulting from Disability or
retirement), (ii) engagement in conduct materially and demonstrably
injurious to the Company that is not cured within 30 days after
notice, (iii) violation of non-competition or non-solicitation
prohibitions or of confidentiality requirements imposed on the
participant under common law or under the terms of any agreement
with the Company or (iv) fraud, embezzlement or conviction of any
crime, other than a traffic offense not involving a
felony.
ARTICLE III
ADMINISTRATION
3.1
The Plan shall be administered by the Committee. A majority of the
Committee shall constitute a quorum. Committee decisions and
determinations shall be made by a majority of its members present
in person or by telephone at a meeting at which a quorum is
present. To the maximum extent permitted by law, the actions of the
Committee with respect to the Plan shall be final and binding on
all affected Participants. Any decision or determination reduced to
writing and signed by all of the members of the Committee shall be
fully effective as if it had been made by a vote at a meeting duly
called and held. The Committee shall keep minutes of its meetings,
written records of its determination to the extent required by Code
Section 162(m) and shall make such rules and regulations for the
conduct of its business and make such other written determination
as it shall deem advisable.
3.2
The Committee shall have full authority, subject to the provisions
of the Plan (i) to select Participants and determine the extent and
terms of their participation; (ii) to adopt, amend and rescind such
rules and regulations as, in its opinion, may be advisable in the
administration of the Plan; (iii) to construe and interpret the
Plan, the rules and regulations adopted thereunder and any notice
or Award Certificate given to a Participant; and (iv) to make all
other determinations that it deems necessary or advisable in the
administration of the Plan.
3.3
The Committee may employ attorneys, consultants, accountants or
other persons, and the Committee, the Company and its officers and
directors may rely on the advice, opinions or valuations of any
such persons. No
