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EXHIBIT 10.5
EMPLOYEE STOCK SUBSCRIPTION AGREEMENT
This Employee Stock Subscription Agreement, dated as of December
19, 2006
between Atlas Copco North America Inc. (to be renamed RSC
Holdings Inc.), a
Delaware corporation, and the employee whose name appears on the
signature page
hereof, is being entered into pursuant to the Atlas Copco North
America Inc. (to
be renamed RSC Holdings Inc.) Stock Incentive Plan. The meaning
of each
capitalized term may be found in Section 12.
The Company and the Employee hereby agree as follows:
Section 1. Purchase and Sale of Common Shares
(a) In General. Subject to all of the terms of this Agreement,
at the
Closing the Employee shall purchase, and the Company shall sell,
the
aggregate number of Common Shares set forth on the signature
page hereof
(the "Shares"), at the purchase price set forth on the signature
page
hereof.
(b) Condition to Sale. Notwithstanding anything in this
Agreement to
the contrary, the Company shall have no obligation to sell any
Common
Shares to any person who is not an employee of the Company or
any of its
Subsidiaries at the time that such Common Shares are to be sold
or who is a
resident of a jurisdiction in which the sale of Common Shares to
him would
constitute a violation of the securities, "blue sky" or other
laws of such
jurisdiction, or if the Employee's proposed investment in the
Shares is
less than the minimum established for the Employee by the
Company.
Section 2. The Closing
(a) Time and Place. The Company shall determine the time and
place of
the closing of the purchase and sale of the Shares (the
"Closing").
(b) Delivery by the Employee. At the Closing, the Employee
shall
deliver to the Company the aggregate purchase price for the
Shares.
(c) Delivery by the Company. At the Closing, the Company
shall
register the Shares in the name of the Employee. Certificates
relating to
the Shares shall be held by the Secretary of the Company or his
designee on
behalf of the Employee.
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Section 3. Employee's Representations and Warranties
(a) Access to Information, Etc. The Employee represents,
warrants and
covenants as follows:
(i) the Employee has carefully reviewed the Offering
Memorandum,
dated as of November 17, 2006, each of its exhibits, annexes and
other
attachments, each document incorporated by reference into the
Offering
Memorandum, and the other materials furnished to the Employee
in
connection with the offer and sale of the Shares pursuant to
this
Agreement;
(ii) the Employee has had an adequate opportunity to
consider
whether or not to purchase any of the Common Shares offered to
the
Employee, and to discuss such purchase with the Employee's
legal, tax
and financial advisors;
(iii) the Employee understands the terms and conditions that
apply to the Shares and the risks associated with an investment
in the
Shares;
(iv) the Employee has a good understanding of the English
language;
(v) the Employee is, and will be at the Closing, an officer
or
employee of the Company or one of its Subsidiaries; and
(vi) the Employee is, and will be at the Closing, a resident
of
the jurisdiction indicated as his or her address set forth on
the
signature page of this Agreement.
(b) Ability to Bear Risk. The Employee represents and warrants
as
follows:
(i) the Employee understands that the rights of first refusal
and
other transfer restrictions that apply to the Shares may
effectively
preclude the transfer of any of the Shares prior to a Public
Offering;
(ii) the financial situation of the Employee is such that he
or
she can afford to bear the economic risk of holding the Shares
for an
indefinite period;
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(iii) the Employee can afford to suffer the complete loss of
his
or her investment in the Shares;
(iv) the Employee understands that the Company's Financing
Agreements may restrict the ability of the Company to repurchase
the
Shares pursuant to Section 6 and that the Company and its
Subsidiaries
may enter into or amend, refinance or enter into new
Financing
Agreements without regard to the impact on the Company's ability
to
repurchase the Shares; and
(v) the Employee understands the special obligations and
provisions that are found in Section 7.
(c) Voluntary Purchase. The Employee represents and warrants
that the
Employee is purchasing the Shares voluntarily.
(d) No Right to Awards. The Employee acknowledges and agrees
that the
sale of the Shares and the grant of any options that are awarded
to the
Employee in connection with the purchase of the Shares (i) are
being made
on an exceptional basis and are not intended to be renewed or
repeated,
(ii) are entirely voluntary on the part of the Company and its
Subsidiaries
and (iii) should not be construed as creating any obligation on
the part of
the Company or any of its Subsidiaries to offer any securities
in the
future.
(e) Investment Intention. The Employee represents and warrants
that
the Employee is acquiring the Shares solely for his or her own
account for
investment and not on behalf of any other person or with a view
to, or for
sale in connection with, any distribution of the Shares.
(f) Securities Law Matters. The Employee acknowledges and
represents
and warrants that the Employee understands that:
(i) the Shares have not been registered under the Securities
Act
or any state or non-United States securities or "blue sky"
laws;
(ii) it is not anticipated that there will be any public
market
for the Shares;
(iii) the Shares must be held indefinitely and the Employee
must
continue to bear the economic risk of the investment in the
Shares
unless the Shares are subsequently registered under
applicable
securities and other laws or an exemption from registration
is
available;
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(iv) the Company is under no obligation to register the Shares
or
to make an exemption from registration available; and
(v) a restrictive legend shall be placed on any certificates
representing the Shares that makes clear that the Shares are
subject
to the restrictions on transferability set forth in this
Agreement and
a notation shall be made in the appropriate records of the
Company or
any transfer agent indicating that the Shares are subject to
such
restrictions.
(g) Voting Proxy. By entering into this Agreement and purchasing
the
Shares, the Employee hereby irrevocably grants to and appoints
the
Investors collectively (to act by unanimous consent) as such
Employee's
proxy and attorney-in-fact (with full power of substitution),
for and in
the name, place and stead of such Employee, to vote or act by
unanimous
written consent with respect to such Employee's Shares. The
Employee hereby
affirms that the irrevocable proxy set forth in this Section
3(g) will be
valid until the consummation of a Public Offering. The Employee
hereby
further affirms that the proxy hereby granted shall be
irrevocable and
shall be deemed coupled with an interest and shall extend until
the
consummation of a Public Offering or, if earlier, until the last
date
permitted by law. For the avoidance of doubt, except as
expressly
contemplated by this Section 3(g), the Employee has not granted
a proxy to
any Person to exercise the rights of such Employee under this
Agreement or
any other agreement relating to the Shares to which such
Employee is a
party.
Section 4. Restriction on Transfer of Shares
(a) In General. The Employee shall not Transfer any of the
Shares
other than (i) upon the Employee's death by will or by the laws
of descent
and distribution, (ii) repurchases by the Company or the
Investors pursuant
to Section 6 hereof or (iii) after a Public Offering, if and to
the extent
such Transfer would not result in the Employee having
Transferred a greater
percentage of Common Shares held by the Employee or acquired
within the
first 12 months after the Closing Date than the percentage of
the
Investors' Initial Holdings Transferred to Third Party Buyers as
of such
date. Shares may only be Transferred in a manner that complies
with all
applicable securities laws and, if the Company so requests,
prior to any
attempted Transfer the Employee shall provide to the Company at
the
Employee's expense such information relating to the compliance
of such
proposed Transfer with the terms of this Agreement and
applicable
securities laws as the Company shall reasonably request, which
may include
an opinion in
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form and substance reasonably satisfactory to the Company of
counsel
regarding such securities law or other matters as the Company
shall request
(such counsel to be reasonably satisfactory to the Company).
(b) No Transfer That Would Result In Registration Requirements.
Prior
to a Public Offering, the Shares may not be Transferred if such
Transfer
would result in the Company becoming subject to the reporting
requirements
of Section 13 or 15(d) of the Exchange Act (or other similar
provision of
non-U.S. law) or would increase the risk that the Company would
be subject
to such reporting requirements as determined by the Company in
its sole and
absolute discretion. Any purported Transfer in violation of this
Section
4(b) shall be void ab initio.
Section 5. Reinvestment of Certain Proceeds. In the event of
a
recapitalization, dividend or other similar adjustment to the
Company's
capitalization in the first two years following the Closing
Date, the Employee
shall purchase additional Common Shares with the proceeds of,
or, if available,
refrain from participating in, such recapitalization, dividend
or other similar
adjustment to the Company's capitalization, if and to the extent
it would result
in payments to the Employee having been received with respect to
the Shares in
excess of 50% of the aggregate purchase price for the Shares.
Any additional
shares acquired pursuant to this Section 5 shall be subject to
terms and
conditions substantially similar to the terms and conditions of
the Shares.
Section 6. Options Effective on Termination of Employment Prior
to a Public
Offering
(a) Rights of the Company. If the Employee's employment with
the
Company terminates for any reason prior to a Public Offering,
the Company
may elect to purchase all or a portion of the Shares by written
notice to
the Employee delivered on or before the 90th day after the
Determination
Date (the "Option Period").
(b) Limited Right of the Employee to Require the Company to
Repurchase
Shares. If the Employee's employment with the Company is
terminated by the
Employee upon Retirement or by reason of the Disability or death
of the
Employee or is terminated by the Company without Cause
(including in
connection with a sale by the Company of the division or
Subsidiary
directly employing the employee), the Employee may require the
Company to
purchase all (but not less than all) of an Employee's Shares
(excluding any
Shares acquired on exercise of an Option) by written notice
delivered to
the Company within 60 days following the expiration of the
Option Period.
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(c) Purchase Price. The purchase price per Share pursuant to
this
Section 6 shall equal the Fair Market Value as of the later of
(i) the
effective date of the Employee's termination of employment
(determined
without regard to any statutory or deemed or express contractual
notice
period) and (ii) six months and one day from the date of the
Employee's
acquisition of the Shares pursuant to this Agreement (such date,
the
"Determination Date"), provided that if the Employee's
employment is
terminated by the Company for Cause or the Employee has violated
any of the
material terms of this Agreement, including but not limited to
Section 7,
the purchase price per Share shall equal the lesser of (A) the
Fair Market
Value of such Share as of the Determination Date, (B) the price
at which
the Employee purchased such Share from the Company pursuant to
this
Agreement or (C) $0.10 per Share if such termination was based
on actions
by the Employee that had or are reasonably likely to have a
significant
financial impact on the Company, as determined by an affirmative
vote of
not less than two-thirds of the membership of the Board, or
involved theft
from the Company or the Employee has violated any of the
material terms of
this Agreement, including but not limited to Section 7.
(d) Closing of Purchase; Payment of Purchase Price. Subject to
Section
6(f), the closing of a purchase pursuant to this Section 6 shall
take place
at the principal office of the Company no later than the 100th
day
following the Determination Date (or, in the case of a purchase
pursuant to
Section 6(b), no later than 10 business days following the
Company's
receipt of written notice from the Employee pursuant to Section
6(b)). At
the closing, (i) the Company shall, subject to Section 6(e), pay
the
Purchase Price to the Employee and (ii) if the Employee actually
holds any
certificates or other instruments representing the Shares so
purchased, the
Employee shall deliver to the Company such certificates or
other
instruments, appropriately endorsed by the Employee or directing
that the
shares be so transferred to the purchaser thereof, as the
Company may
reasonably require.
(e) Application of the Purchase Price to Certain Loans or
Other
Obligations. The Company shall be entitled to apply any amounts
otherwise
payable pursuant to this Section 6 to discharge any indebtedness
of the
Employee to the Company or any of its Subsidiaries or
indebtedness that is
guaranteed by the Company or any of its Subsidiaries or to
offset any such
amounts against any other obligations of the Employee to the
Company or any
of its Subsidiaries.
(f) Certain Restrictions on Repurchases; Delay of
Repurchase.
Notwithstanding any other provision of this Agreement, the
Company shall
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not be permitted or obligated to make any payment with respect
to a
repurchase of any Shares from the Employee if (i) such
repurchase (or the
payment of a dividend by a Subsidiary to the Company to fund
such
repurchase) would result in a violation of the terms or
provisions of, or
result in a default or an event of default under any guaranty,
financing or
security agreement or document entered into by the Company or
any
Subsidiary from time to time (the "Financing Agreements"), (ii)
such
repurchase would violate any of the terms or provisions of the
Certificate
of Incorporation and By-laws of the Company or (iii) the Company
has no
funds legally available to make such payment under the General
Corporation
Law of the State of Delaware. If payment with respect to a
repurchase by
the Company otherwise permitted or required under this Section 6
is
prevented by the terms of the preceding sentence the Company
shall have the
option to either (x) make such payment at the earliest
practicable date
permitted under this Section 6 and any such payment shall accrue
simple
interest at a rate per annum of 6% from the date such payment is
due and
owing to the date such payment is made or (y) pay the purchase
price for
such Shares with a subordinated note that is fully subordinated
in right of
payment and exercise of remedies to the lenders' rights under
the Financing
Agreements and payable in full at the earliest practicable date
permitted
under this Section 6.
(g) Right to Retain Shares. If the option of the Company to
purchase
the Shares pursuant to this Section 6 is not exercised with
respect to all
of the Shares, the Employee shall be entitled to retain the
remaining
Shares, although those Shares shall remain subject to all of the
other
provisions of this Agreement.
(h) Notice of Termination; Etc. Prior to a Public Offering,
the
Company shall give prompt written notice to the Investors of
any
termination of the Employee's employment with the Company and of
the
Company decision whether or not to purchase Shares pursuant to
Section
6(a).
(i) Public Offering. The provisions of this Section 6 shall
terminate
upon a Public Offering, provided that such termination shall not
affect the
Company's repurchase right following a termination for Cause
that was
effective (or deemed to be effective) prior to such Public
Offering or any
payment obligation postponed pursuant to Section 6(f).
(j) Assignment and Allocation of Purchase Rights. The
Employee
acknowledges and agrees that the Company may assign its
repurchase and
other rights under this Section 6 to the Investors and that the
Investors
may
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allocate such rights among themselves in such manner as they, in
their sole
discretion, may agree from time to time.
Section 7. Noncompetition, Noninterference and
Confidentiality.
(a) Special Acknowledgements of the Employee. The Employee
acknowledges that: (i) the services previously rendered and
expected to be
render by the Employee to the Company are of an important
character that
have and have had a unique value to the Company; (ii) the
Employee
possesses relations, contacts, information and other know-how
that would
permit the Employee to compete with the Company or any of its
affiliates
and reduce the value of the Business and of the Company; (iii)
the
restrictive covenants in this Section 7 and other terms of this
Agreement
are reasonable in order to preserve the goodwill and other value
of the
Business; (iv) the opportunity to purchase the Shares and
receive any
options to purchase Common Shares is a special and unique
opportunity; (v)
the Company has bargained for the benefit of such covenants and
other terms
of this Agreement in connection with the offering of the Shares
to the
Employee; (vi) the restrictive covenants contained in this
Section 7 and
the other terms of this Agreement constitutes a material
inducement to the
Company to sell the Shares to the Employee; (vii) the Employee
had the
opportunity to be represented by and consult with legal counsel
in this
matter; (viii) the restrictive covenants in this Section 7 are
meant to be
in addition to, and not limited by or limiting of, any other
restrictive
covenants by which the Employee is or many be bound; and (ix)
the Employee
understands the terms of this Agreement, including (but not
limited to) the
terms of the restrictive covenants in the Section 7, and the
legal effects
thereof.
(b) Noncompetition and Noninterference. While employed with
the
Company or any of its affiliates and for a period of one year
thereafter,
the Employee, individually or collectively with any other person
or entity,
shall not:
(i) without the prior written consent of the Company (which
may
be withheld at the Company's sole discretion), directly or
indirectly
own an interest in, manage, operate, join, control, or
participate in
the ownership, operation or control of, or be connected as a
director,
officer, employee, partner, consultant or permit his name to be
used
in connection with the following businesses or organizations
that rent
or lease construction or construction-related equipment within
the
United States, Canada and Mexico (collectively "the
Territory"):
Caterpillar, United Rental, Sunbelt
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Rentals and its parent Ashtead Group plc, NEFF Rental, Hertz,
Volvo,
National Equipment Services and Maxim Crane Works or, in the
alternative, any business or organization not listed above that
rents
or leases construction or construction-related equipment that
has
gross revenues of $100 million or more, or has a total employee
base
of 500 employees or more or that has plans to enter into the
construction-related equipment rental or leasing business in
the
Territory;
(ii) directly or indirectly call upon or solicit or divert
or
take away from the Company or any of its affiliates (including
by
divulging to any competitor or potential competitor of the
Company)
any person, firm, corporation, or other entity who is a customer
of
the Company or its affiliates and whom Executive had contact
with
through any of his employment with the Company; or
(iii) directly or indirectly solicit employment of any
employee
of the Company or any employee of any affiliate of the Company
for
employment with any entity that rents or leases construction
or
construction-related equipment in the Territory.
(c) Confidential Information. While employed with the Company
and its
affiliates and for ten years thereafter, the Employee shall not
at any time
use or disclose to any person, corporation, firm, partnership or
other
entity whatsoever, or to any officer, director, stockholder,
partner,
associate, employee, agent or representative of any thereof,
any
confidential information or trade secrets of or relating to the
Business or
the Company or any of its affiliates ("Confidential
Information").
Information relating to the Business, the Company or any of its
affiliates
that becomes generally known to the public by reason other than
disclosure
by the Employee or any other employee subject to a similar
confidentiality
obligation shall not be considered confidential information
under this
Section 7(c). If disclosure of any Confi
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