Exhibit 10.4
FORM OF
STOCK OPTION
AGREEMENT
Optionee:
Option Shares:
of the common stock, $.01 par value, of United Rentals, Inc.
(“Shares”)
Per Share Option Price: $
Date of Grant:
Expiration Date:
This STOCK OPTION AGREEMENT
(this “ Agreement ”) is made as of the Date of
Grant set forth above by and between UNITED RENTALS, INC .,
a Delaware corporation, having an office at Five Greenwich Office
Park, Greenwich, CT 06831 (the “ Company ”), and
Optionee, currently an executive of the Company or an affiliate of
the Company.
In consideration of the mutual
promises and covenants contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as
follows:
1. Stock Option . The
Company, pursuant to its 2001 Comprehensive Stock Plan, as amended
(the “ Plan ”), which is incorporated herein by
reference, and subject to the terms and conditions thereof, hereby
grants to Optionee (also referred to as “ you ”)
an option to purchase the Option Shares (the “ Option
”) at the Per Share Option Price. Your failure to sign and
return a copy of this Agreement within 30 days of receipt shall
automatically effect a cancellation and forfeiture of the Option,
except as determined by the Company in its sole
discretion.
2. Nature of Option .
The Option granted hereby is a nonqualified stock option (also
referred to as an NSO in the Plan).
3. Vesting . Provided
you have remained continuously employed by the Company through the
relevant date of vesting (each, a “ Vesting Date
”), the Option Shares shall vest, and become exercisable, on
the following schedule:
One-third of the Option Shares on
each of the first, second and third anniversaries of the Date of
Grant.
The Option will expire at 5:00 p.m.
(Eastern Time) on the Expiration Date set forth above, subject to
earlier termination as set forth in the Plan or in this Agreement.
In no event may you at any time exercise any unvested portion of
the Option.
4. Transfer . The
Option is not transferable except (i) by will or the laws of
descent and distribution, or (ii) as specifically provided in
this Section 4. Optionee may transfer the Option to members of
his or her Immediate Family (as defined below) if Optionee does not
receive any consideration for the transfer and the transferee
agrees to be bound by this Agreement. “ Immediate
Family ” means children, grandchildren and spouse of
Optionee or one or more trusts solely for the benefit of such
family members or partnerships in which such family members are the
only partners. During the lifetime of Optionee, the Option may be
exercised only by Optionee, the guardian or legal representative of
Optionee, or a permitted transferee under this Section 4 (such
persons, together with any beneficiaries and the estate of
Optionee, the “ Permitted Transferees
”).
5. Exercise . Subject
to the provisions of the Plan and the other provisions of this
Agreement, you (and/or a Permitted Transferee, if applicable) may
exercise all or any portion of the Option, to the extent it is
vested and outstanding, at any time and from time to time prior to
the Expiration Date or its earlier termination as set forth in the
Plan or in this Agreement, by following the procedures established
by the Company for such exercise, or by delivering written notice
of exercise to the Company, in form and substance satisfactory to
counsel for the Company, specifying the number of Option Shares
being exercised and accompanied by payment of the aggregate Per
Share Option Price for the Option Shares being exercised.
Notwithstanding the foregoing, a partial exercise of the vested and
outstanding portion of the Option shall be permitted only if the
exercise is for at least the greater of (x) 25% of such
portion or (y) 500 Shares. Payment shall be made (i) in
cash or (ii) if in existence and maintained at the time of
exercise, through a cashless exercise procedure established by the
Company with a broker-dealer. In addition, with the consent of an
Authorized Officer (as defined below) of the Company, payment may
be made through the surrender of Shares (to be valued at Fair
Market Value, as defined in the Plan) previously acquired by
Optionee and owned by Optionee for at least six months. Exercises
in cash shall be made by wire transfer or certified or official
bank check or, with the consent of an Authorized Officer, by
personal check. The Company, acting through an Authorized Officer,
may prescribe such other procedures for exercise, including using
the services of a specified broker-dealer, as it, in its sole
discretion, may determine. For purposes of this Agreement, an
“ Authorized Officer ” is any of the Chief
Executive Officer, President, Chief Financial Officer or Treasurer
of the Company.
6. Termination of
Employment . Except as set forth in Section 9, if your
employment with the Company terminates for any reason, the Option
shall thereafter be exercisable only to the extent, if any, that
the Option was vested and exercisable as of such termination
(including as a result thereof). Such exercise must occur within
thirty (30) days after termination of employment, unless
termination is on account of permanent disability or your death, in
which event such exercise must occur within one year after such
termination; provided, however, that in no event may any exercise
be made after the Expiration Date.
7. Forfeiture . You
acknowledge that an essential purpose of the grant of the Option is
to ensure the utmost fidelity by yourself to the Company’s
interests and to your diligent performance of all of your
understandings and commitments to the Company. Accordingly,
NEITHER YOU NOR ANY PERMITTED TRANSFEREE MAY EXERCISE THE OPTION
EITHER DURING OR AFTER TERMINATION OF YOUR EMPLOYMENT WITH THE
COMPANY IF THE COMPANY, IN ITS SOLE DISCRETION,
BELIEVES
2
THAT YOU HAVE AT ANY TIME ENGAGED IN
“INJURIOUS CONDUCT” (AS HEREINAFTER
DEFINED). If your
employment with the Company terminates with “Cause” (as
hereinafter defined), due to a resignation by you without
“Good Reason” (as hereinafter defined), or due to your
retirement (which is considered resignation by you without Good
Reason), all unvested Option Shares shall be canceled and forfeited
as of the date of such termination.
In the event of any such
determination:
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(i)
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the Option
shall terminate and be forfeited as of the date of such
determination; and
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(ii)
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Optionee
(and/or, if applicable, any Permitted Transferee) shall
(a) sell back to the Company all Shares that are held, as of
the date of such determination, by Optionee (and/or, if applicable,
any Permitted Transferee) and that were acquired upon exercise of
the Option on or after the date which is 180 days prior to the date
of such conduct (Shares so acquired, the “ Acquired
Shares ”), for a per share price equal to the Per Share
Option Price of the Option, and (b) to the extent such
Acquired Shares have previously been sold or otherwise disposed of
by Optionee (and/or, if applicable, by any Permitted Transferee),
repay to the Company the excess of the aggregate Fair Market Value
(as defined in the Plan) of such Acquired Shares on the date of
such sale or disposition over the aggregate Per Share Option Price
with respect to the Acquired Shares.
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For purposes of the preceding clause
(ii)(b) of this Section 7, the amount of the repayment
described therein shall not be affected by whether Optionee
(and/or, if applicable, any Permitted Transferee) received such
Fair Market Value with respect to such sale or other disposition,
and repayment may, without limitation, be effected, at the
discretion of the Company, by means of offset against any amount
owed by the Company to Optionee (or, if applicable, any Permitted
Transferee).
“ Injurious Conduct
” for purposes of this Agreement shall mean
(i) Optionee’s fraud, misappropriation, misconduct or
dishonesty in connection with his or her duties (ii) any act
or omission which is, or is reasonably likely to be, materially
adverse or injurious
