EXECUTIVE EMPLOYMENT
AND NONCOMPETITION AGREEMENT
This Executive Employment and Noncompetition
Agreement (“Agreement”) is entered into between RSC
Holdings Inc. and RSC Equipment Rental, Inc. (the
“Company” or “RSC”) and Patricia D. Chiodo
(“Executive”), effective as of October 1, 2010
(the “Effective Date”).
WHEREAS, the Company operates its equipment rental
business which has store locations throughout North America (such
business as operated by the Company is referred to herein as the
“Business”).
WHEREAS, the Company’s life-blood is its
Confidential Information, including but not limited to customer
databases, marketing and sales objectives and strategies, customer
lists, information regarding existing customer preferences, habits,
and needs, information regarding prospective customers, details of
past, pending and contemplated transactions, price lists, pricing
policies, sales data, training materials, and customer proposals,
information developed about the Company’s competitors,
systems, strategies, designs, processes, procedures, market data,
know-how, compilations of technical and non-technical data,
advertising and promotional plans, and financial and other
projections, which information has been collected over a
significant amount of time and at great effort and
expense.
WHEREAS, the Company would be placed at an unfair
competitive disadvantage if Executive were able to use the
Company’s Confidential Information and goodwill for her own
benefit, or for the benefit of anyone other than the
Company.
WHEREAS, with the assurances contained in the agreement,
the Company desires to employ Executive as a Senior Vice President,
Chief Financial Officer, in which position she will not only have
access to the Company’s Confidential Information but also
will have the duty to expand and improve such
information.
WHEREAS, Executive desires to be employed by the Company
in this position and is willing to do so upon the terms contained
herein.
NOW, THEREFORE, as a condition of employment, and for other good
and valuable consideration, including without limitation continued
employment and/or promotion or advancement, which Executive agrees
is sufficient consideration for this Agreement, and in
consideration of the mutual promises and covenants set forth below,
the Company and Executive agree as follows:
Section 1.1 . Employment & Position . The
Company shall employ Executive as Senior Vice President, Chief
Financial Officer at the Company’s location in Scottsdale,
AZ. Executive shall report to the President and Chief Executive
Officer, and the Board of Directors of the Company. During
Executive’s employment hereunder, Executive shall devote all
necessary energies, experience, skills, abilities, knowledge and
productive time to the performance of duties under this Agreement
and shall not render to others services that interfere with the
performance of her duties with the Company under this Agreement.
The rendering of services to others shall be subject to the
approval of the Board.
Section 1.2 . Duties . Executive will be responsible for the full range
of responsibility customarily performed by an Executive in the
position of Senior Vice President, Chief Financial Officer of the
Company and render such services as are from time to time necessary
or requested in connection with the affairs of the Company.
Executive’s duties also includes the obligation to maintain
the highest level of integrity and report and (when appropriate)
address violations of the Company’s policies and procedures,
and hereby acknowledges, represents and warrants that there are no
such violations as of the date hereof.
Section 1.3 . Term of Employment .
Executive shall be employed as
herein set forth, commencing on the date set forth above and
continuing until terminated by either party in accordance with
section 2.5 below (the “Employment Term”).
Section 2.1 . Base Salary . Executive’s salary (the “Base
Salary”) shall be three hundred sixty five thousand dollars
($365,000) per annum for the term of this Agreement and/or as
increased, after review by the Board at the time and in accordance
with Company policies as in effect from time to time. Base Salary
shall be payable in accordance with the standard payroll practices
of the Company.
Section 2.2 . Variable Compensation .
In addition to her Base Salary,
Executive will be eligible to receive Variable Compensation, in
accordance with the Company’s Variable Compensation Plan as
in effect from time to time, and which will provide her with
additional incentive opportunity with a target of seventy-five
percent (75%) of her Base Salary and a maximum of one-hundred fifty
percent (150%) of her Base Salary.
Section 2.3 . Equity Incentive
. Executive will be eligible to
participate in the Company’s discretionary long term
incentive plan during the course of employment with the Company,
subject to the discretion of the Compensation Committee and/or the
Board of Directors and the terms and conditions of the applicable
plan. Awards will be determined utilizing the valuation methodology
used for other similarly situated executive officers of the
Company.
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Section 2.4 . Other Benefits .
During the Employment Term,
Executive shall be entitled to all benefits and conditions of
employment generally provided to other RSC Company executives,
subject to the same eligibility and other reasonable conditions of
Company benefit programs and to country related differences,
including, but not limited to, medical, dental, life insurance,
non-qualified deferred compensation programs, sick leave,
disability, automobile allowance ($1,200 per month) and
participation in any retirement plan. In addition, benefits shall
include, but not be limited to five (5) weeks vacation per
year and an annual tax and financial planning services allowance of
up to two thousand five hundred dollars ($2,500).
Section 2.5 . Employment Separation .
(a) Severance Benefits : The
Company may, at its sole discretion, terminate Executive’s
employment at any time, provided however, that if the Company
severs Executive’s employment for any reason other than For
Cause or if Executive terminates her employment for Good Reason the
Company shall provide the following severance payments and benefits
(collectively “Severance Benefits”), less all
applicable federal and state income and withholding taxes, in
exchange for a full and complete release of all claims against the
Company, in the form customarily used by the Company, executed by
Executive, and Executive allows such release to become
effective:
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1.
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Eighteen (18) months of Base
Salary (the “Severance Period”), plus a pro-rata
portion of variable compensation for the calendar year, or if
variable compensation is to be paid quarterly then for the calendar
quarter, in which the severance occurs up to the separation date,
such pro rata bonus to be equal to the variable compensation
Executive would have earned had Executive remained employed through
the end of the applicable period (pro rated based on the number of
days employed in such period). Executive’s entitlement to and
the amount of any variable compensation under this
Section 2.5(a) (1) shall be determined at the sole
discretion of the Company. The Base Salary shall be payable in
accordance with the Company’s regular payroll practices, and
the pro rata variable compensation payments shall be payable at the
time that other variable compensation payments are made under the
applicable Variable Compensation Plan. Notwithstanding the payment
schedule described in this paragraph, if Executive is a Specified
Employee (as defined in Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”)) and becomes
entitled to the payment described in this Section 2.5 as a
result of a separation of service as defined by
Section 409A(a)(2)(i) of the Code, then the portion of such
payment treated as “separation pay” for purposes of
Section 409A shall not be paid prior to the date which is six
(6) months after the date of the Executive’s separation
of service with the Company if such payment would result in the
imposition of an excise tax under Section 409A of the Code.
Any amount described in the preceding sentence over the applicable
threshold, that is otherwise payable during the first six months
following Executive’s separation from service shall be
accumulated and paid to Executive in a lump sum amount on the first
date of the seventh month following the date of separation from
service.
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Executive’s entitlement to the foregoing
severance payments is contingent on her continued compliance with
the confidentiality, non-competition and non-solicitation
provisions outlined in Sections 3.1, 3.2, 4.2 and 4.3 herein.
Executive understands that if the Company determines that she has
violated the confidentiality provisions, covenant not to compete or
non-solicitation provisions, the Company will not make any further
severance payments, and will be entitled to reimbursement from
Executive of any severance amounts already paid to her, all in
addition to any other remedy to which the Company may
have.
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2.
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Upon her separation from service,
if Executive is eligible and enrolled in the Company’s
medical and dental benefit programs, the Company will provide the
necessary forms, including COBRA notifications, to transfer the
responsibility and right to continue those benefits to Executive,
which under COBRA are typically at her expense, for the time period
allowed by law or under the applicable programs. However, assuming
Executive is eligible and elects to continue those benefits, the
Company will continue to pay the same proportion of
Executive’s medical and dental insurance premiums under COBRA
as during active employment (for Executive and eligible dependents)
until the earlier of: (1) the expiration of the Severance
Period; or (2) the date Executive is eligible for medical and
dental insurance benefits by another employer.
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3.
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Upon termination of employment,
Executive is not eligible to continue participation in the Company
group life insurance program. The Company will therefore pay, at
the Company’s option, the premiums during the Severance
Period that are either (i) applicable to a conversion of the
coverage (equal to the amount normally provided to an employee
without payment by the employee) from group to individual coverage;
or (ii) that will support the same level of coverage in a term
life policy. The company’s obligation under this sub-section
is to provide the required insurance and Executive is not entitled
to a cash payment in substitution thereof.
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4.
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The Company on the date of
separation will provide professional outplacement counseling and
services consistent with other Executives at similar compensation
levels. No cash lump sum payment in lieu of outplacement services
will be provided to Executive.
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5.
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During the eighteen (18) month
period during which Severance Benefits under this Section 2.5
are paid, the Company will continue to pay for Executive’s
reasonable and necessary association fees related to
Executive’s duties and responsibilities as contemplated in
Section 1.2, and only to the extent previously paid by the
Company. However, the payment of the fees within this paragraph
shall cease upon the earlier of: (1) the expiration of the
Severance Period; or (2) the date Executive is employed
whether consulting, self employed or employed by another
employer.
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6.
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The Company may give the Executive
30 days’ prior written notice of termination of
employment for the purposes of providing transition services. In
the event the Company gives such notice, the Executive shall be
under no obligation to render additional services and shall be
allowed to seek other employment, provided that the
Severance Period shall be reduced accordingly if Executive so
ceases, for any re
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