Exhibit 10(mmm)
UNITED RENTALS,
INC.
SEPARATION AGREEMENT AND GENERAL
RELEASE
SEPARATION AGREEMENT and GENERAL
RELEASE (“Agreement”) made on the date
indicated below between United Rentals, Inc. (“United
Rentals”) (United Rentals, together with all of its
subsidiaries, parents, and any other affiliates shall herein be
referred to as the “Company”), and Joseph
Ehrenreich (“Employee”) (the Company and Employee
shall collectively be referred to as the “Parties”).
The Parties hereby agree as follows:
1. Termination of Employment
. Except as otherwise provided in this Section 1,
Employee’s employment with the Company shall terminate on
September 1, 2006. The last day of Employee’s employment
as provided in this Section 1 shall be deemed the
“Termination Date.”
(a) Notwithstanding the foregoing,
the Company may terminate Employee’s employment at any time
for Cause (as such term is defined in Paragraph 5(d) of the
Employment Agreement entered into between the Company and Employee
on July 20, 2004, as amended by the Parties as of
August 22, 2005 (the “Employment Agreement”)),
provided that the Company may not terminate Employee for Cause
based upon any act or omission by Employee prior to the execution
of this Agreement unless such act or omission constitutes
fraudulent, criminal or other willful misconduct of Employee of
which the Company is not aware on the date the Parties execute this
Agreement (the “Execution Date”) and which has an
adverse effect on the Company (the Cause definition as modified,
“Modified Cause”).
(b) Notwithstanding the foregoing,
if on or before September 1, 2006, the Company shall have
entered into an agreement that, upon consummation of the
transactions contemplated therein, would trigger a Change of
Control as defined in the Employment Agreement, then
Employee’s term of employment hereunder shall continue from
September 1 through the earlier of (i) the closing of the
transactions contemplated by such agreement and (ii) the
Company’s announcement that such transactions have been
abandoned. During such period, Employee shall continue to have and
exercise the duties provided for herein, including without
limitation those duties prescribed under Section 2(a)
below.
2. Duties Through Termination
Date; Base Salary and Benefits Through Termination Date; Other
Business Activities .
(a) Duties Through Termination
Date . As of the Execution Date, Employee shall cease to be
Vice President and General Counsel of the Company. Beginning on the
Execution Date and continuing through the Termination Date, as and
to the extent requested by the Company from time to time, Employee
shall perform the following duties: (a) act as a historical
and knowledge resource to Company employees in connection with
matters related to the Company, including legal matters, as
requested by the Company, (b) train and transition his
responsibilities to other Company employees, (c) cooperate
with the Company in connection with ongoing investigations and
litigations, including appearing (if requested) before the Special
Committee and/or the SEC and consulting with counsel and/or
management, and (d) other duties related to the duties set
forth in (a), (b) an (c) above. The work to be performed
by Employee pursuant to the foregoing sentence shall generally be
limited to not more than one day per week. Employee shall vacate
the Company’s Greenwich, Connecticut office as of the
Effective Date (as defined in Section 11 below) and perform
the duties described herein generally from an office he shall
establish. In connection with such duties, the Company will provide
a non-accountable expense allowance of $4,000 per month through the
Termination Date, but shall otherwise have no obligation or
liability in respect of such office.
(b) Base Salary and Benefits
Through Termination Date . Between the Effective Date and the
Termination Date, Employee shall continue to be paid a base salary
at the annual rate of $435,000. Notwithstanding the foregoing, if
Employee’s employment hereunder shall be extended beyond
September 1, 2006 pursuant to Section 1(b) above, the
compensation provided for in the first sentence of this
Section 2(b) shall cease and Employee shall be compensated at
the rate of $1,673 per week, payable in accordance with the
Company’s
standard payroll practices. As of the Effective
Date, Employee shall cease to be eligible for benefits under any
Company benefits plan or program or otherwise, except (i) as
expressly provided in this Agreement, or (ii) as otherwise
required under (A) the terms of a Company benefits plan or
program or (B) applicable law.
(c) Other Business Activities
. Employee shall be permitted to engage in other business
activities (including employment) during his remaining period of
employment with the Company, provided that such activities do not
otherwise violate the terms of this Agreement or the Employment
Agreement or impair his ability to perform his duties hereunder or
comply with other obligations Employee may have to the
Company.
3. Consideration . Although,
in the absence of this Agreement, the Company is not required to
provide any of the following consideration to Employee, the
Company, in exchange for promises made herein by Employee, shall
provide Employee with the following benefits:
(a) Severance Payment . The
Company agrees to pay Employee a lump sum of $968,450. Such payment
shall be made on or before the fifth business day following the
Effective Date. Such payment date shall be deemed the
“Initial Payment Date.”
(b) LTIP . During his
employment with the Company, Employee was awarded 25,000 units
under the United Rentals, Inc. Long-Term Incentive Plan (such
units, the “LTIP Units,” and such plan, the
“LTIP”). In lieu of any payment of the LTIP Units or
under the LTIP, the Company agrees to pay Employee a lump sum of
$1,212,500, which represents the Maximum Cumulative Unit Value (as
defined in the LTIP) for such Units. Such payment shall be made on
the Initial Payment Date.
(c) Restricted Stock .
Employee was granted 60,000 shares of restricted stock (the
“Shares”) on September 1, 2004 pursuant to a 2001
Senior Stock Plan (the “Plan”) and a Restricted Stock
Agreement entered into by and between the Company and Employee as
of September 1, 2004, as amended by the Parties as of
August 22, 2005 (the “Restricted Stock
Agreement”). Such Shares shall continued to be governed by
the Plan and the Restricted Stock Agreement, such that (without
limiting any of the other vesting events provided for in the
Restricted Stock Agreement except as expressly provided herein):
(i) 15,000 Shares shall vest on April 1, 2006, provided
that Employee remains employed through such date (the “First
Tranche”), and (ii) 15,000 Shares shall vest on
September 1, 2006, provided that Employee remains employed
through such date (the “Second Tranche”). Unless they
shall have vested by reason of a Change of Control (as defined in
the Employment Agreement), the Parties hereby agree that the
remaining 30,000 Shares shall be forfeited as of the Termination
Date (such shares, the “Forfeited Shares”).
Employee shall have the following
put rights (the “Put Rights”) to sell and require the
Company to purchase Shares: (i) following vesting of the First
Tranche, Employee shall have a put right to sell all but not less
than all such Shares to the Company on one occasion during the
thirty day period beginning on the earlier of the date the Company
is no longer subject to a blackout period as defined in Regulation
BTR and May 1, 2006 (the “First Put Period”) and
(ii) during the thirty day period beginning on date of vesting
of the Second Tranche (the “Second Put Period” and with
the First Put Period, the “Put Periods”), Employee
shall have a put right to sell all but not less than all of the
Second Tranche to the Company on one occasion. The terms and
conditions of any such sale are set forth in Annex A.
(d) Lump Sum Payments in Lieu of
Bonus Payments . In lieu of any bonuses for 2005 (the
“2005 Bonus”) or 2006 (the “2006 Bonus”)
under the United Rentals, Inc. Annual Incentive Compensation Plan
(the “Annual Incentive Plan”) or otherwise, Employee
shall receive two lump sum payments as follows. In lieu of the 2005
Bonus, the Company shall make a lump sum payment to Employee of
$327,800. Such payment shall be made on the earlier of
April 15, 2006 and the time the 2005 Bonus, if any, would have
been paid to Employee under the Annual Incentive Plan, provided
that in no event shall such payment be due to be paid prior to the
Initial Payment Date. In lieu of the 2006 Bonus, the Company shall
make a lump sum payment to Employee of $200,000. Such payment shall
be made on the Initial Payment Date.
(e) Lump Sum Payment in Lieu of
Benefits . In lieu of benefits subsequent to the Effective Date
(as described in Section 2(b) of this Agreement), the Company
agrees to pay Employee a lump sum of $13,000. Such payment shall be
made on the Initial Payment Date.
2
(f) COBRA . The Company
agrees that it will instruct its applicable employees and/or agents
not to challenge Employee’s right to continue welfare
benefits coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”) based
upon the circumstances that led to the modification of
Employee’s duties as provided herein. The Company reserves
the right to challenge or deny continuing coverage for other
reasons, as appropriate. Provided that Employee timely elects COBRA
continuation coverage (and the Company has no such grounds to
challenge or deny such coverage), the Company will pay through the
COBRA Payment End Date (as defined below) for the monthly premiums
for the level of coverage Employee maintained on the Effective
Date. The “COBRA Payment End Date” shall be the earlier
of (i) 18 months following the Effective Date of this
Agreement and (ii) the date Employee becomes employed by a
third party and is eligible for coverage under the group benefits
plan of the new employer. If during the period Employee is
receiving this benefit, Employee obtains new employment and becomes
eligible for coverage under the group benefits plan of the new
employer, Employee must notify the Company in writing
of such new employment so that the Company receives such
notification prior to the commencement of this
employment.
(g) Accrued, Unused Vacation
. The Company shall also make a lump sum payment to Employee equal
to 130.156 hours of base salary pay. Such pay represents the number
of accrued, but unused, vacation hours as of the Effective Date,
such number determined in accordance with Company policy. Such
payment shall be made by the Company following the Termination Date
in accordance with its standard payroll practices. The Parties
expressly agree that Employee shall not be entitled to the accrual
of any vacation days subsequent to the Effective Date.
(h) Taxes and Withholdings .
The payments and benefits to be made pursuant to this
Section 3 and in Section 2 shall be subject to all
applicable withholdings for federal, state and local income taxes,
Social Security, and all other customary withholdings. The Company
makes no representations regarding the tax implications of the
compensation, payments and benefits to be paid to Employee under
this Agreement.
(i) Effect of Modified Cause or
Material Breach on Section 3 Payments and Benefits . In
the event the Company terminates Employee’s employment for
Modified Cause, Employee shall forfeit (i) any amounts or
benefits provided for under Section 3 of this Agreement and
not yet paid (excluding any payments due under this Agreement, but
not yet paid, as of the Termination Date), (ii) any unvested
Shares, and (iii) any rights he otherwise would have had in
connection with a Change of Control.
4. Non-Admission of Liability
. The Company is providing Employee with the consideration
described in this Agreement in exchange for Employee’s
agreement to undertake certain obligations, as described herein.
The fact that the Company is offering this consideration to
Employee should not be understood as an admission that the Company
has violated Employee’s rights (or the rights of anyone
else), any statute or law, or breached any duty or obligation in
any manner whatsoever.
5. Release and other Promises
. The intent of this section is to secure Employee’s release
of claims against the Company or anyone connected with it for any
harm Employee may claim to have suffered for any period prior to
his execution of this Agreement in connection with Employee’s
employment or the termination of Employee’s employment, in
return for the benefits described in this Agreement. Accordingly,
in exchange for the consideration described above, Employee hereby
agrees as follows:
(a) Release . In
consideration of the foregoing, Employee hereby releases and
forever discharges the Company and all of its present, former
and/or future officers, employees, directors, stockholders, agents,
representatives, partners, administrators, attorneys, insurers,
fiduciaries, subsidiaries, divisions, affiliates, predecessors,
successors and assigns, in their individual and/or representative
capacities (hereinafter collectively referred to as the
“Released Parties”), from any and all liabilities,
causes of action, suits, agreements, promises, damages, disputes,
controversies, contentions, grievances, differences, judgments,
debts, claims and demands of any kind whatsoever, both in law and
in equity, known or unknown, fixed or contingent, and whether
asserted or unasserted (“Claims”), (i) which
Employee may have or claim to have based upon or in any way related
to Employee’s employment or termination of employment with
the Company, for any period prior to his execution
3
of this Agreement, (ii) which otherwise
involve facts that occurred during any period prior to
Employee’s signing of this Agreement, or (iii) with
respect to any claimed rights to the LTIP Units or under the LTIP,
the Forfeited Shares, or the 2005 Bonus or 2006 Bonus, or otherwise
arising under the Employment Agreement.
Such released Claims include,
without limitation, any and all Claims under the Age Discrimination
in Employment Act of 1967, Title VII of the Civil Rights Act of
1964, the Civil Rights Act of 1871, the Civil Rights Act of 1991,
the Fair Labor Standards Act, the Family and Medical Leave Act of
1993, the Americans with Disabilities Act, the Employee Retirement
Income Security Act of 1974 (including, without limitation, any
claim for severance pay), the Connecticut Human Rights Act, Conn.
Gen. Stat. §46a-51, et. seq., and any and all other federal,
state or local laws, statutes, rules and regulations pertaining to
employment, each as amended. This includes but is not limited to
any and all Claims growing out of any legal restrictions on the
Company’s right to terminate its employees, including
specifically the Worker Adjustment and Retraining Notification Act
of 1988 (“WARN�
