EXHIBIT 10.42
EXECUTIVE TRANSITION AGREEMENT
This EXECUTIVE TRANSITION AGREEMENT (this "Agreement"), dated as of
December 14, 2001 (the "Effective Date"), is by and between NationsRent, Inc., a
Delaware corporation ("Parent"), and Xxxxx X. Xxxx (the "Executive").
BACKGROUND
A. The Executive is: (i) a Director, the Chairman of the Board, and Chief
Executive Officer of Parent; and (ii) the President of Parent's direct
and indirect corporate subsidiaries.
B. Parent and each of its direct and indirect subsidiaries (the
"Subsidiaries" and, collectively with Parent, "Nations") intend to file
a voluntary petition initiating cases under chapter 11 of the
Bankruptcy Code, 11 U.S.C. xx.xx. 101-1330, on or about December 17,
2001 (with the actual date of such filing being referred to as the
"Filing Date").
C. Subject to the terms and conditions of this Agreement, Nations and the
Executive have determined that it is in the best interests of Nations
and its stakeholders that the Executive resign all of his director and
officer positions with Nations.
AGREEMENT
In consideration of the mutual covenants contained in this Agreement,
and for other good and valuable consideration, the receipt and sufficiency of
which are acknowledged, the Executive and Nations agree as follows:
1. RESIGNATION. The Executive will unconditionally and irrevocably resign
all of his director and officer positions with Nations on the earlier
to occur of the following dates (with the earlier to occur of such
dates being referred to as the "Resignation Date"): (i) the sixtieth
(60th) day after the Effective Date; or (ii) the date that Parent
appoints an interim or new President and Chief Restructuring Officer or
President and Chief Operating Officer. On the Effective Date, the
Executive will execute and deliver to Parent an irrevocable letter of
resignation (in substantially the form set forth as EXHIBIT C hereto),
which will be effective upon the Resignation Date.
2. SEVERANCE PAYMENT. The Executive will receive a severance payment from
Parent in the amount of Two Million Dollars ($2,000,000) (the
"Severance Payment") in the manner set forth in this Section 2.
Specifically, prior to the Filing Date, the Parent will pay the
Severance Payment to the Executive in the following manner:
(a) Parent will pay the Executive One Million Dollars ($1,000,000)
(less applicable taxes and other amounts required by law to be
withheld) in cash; and
(b) Parent will issue a promissory note (the "Note"), in the
aggregate principal amount of One Million Dollars ($1,000,000)
to the Executive, which Note will become due and payable on
the Resignation Date, and will be in substantially the form
attached as EXHIBIT A hereto.
3. SECURITY FOR THE NOTE. Prior to the Filing Date, as security for the
Note, Parent will cause an irrevocable letter of credit in the amount
of One Million Dollars ($1,000,000) (the "L/C") to be issued to the
Executive by Fleet National Bank. The L/C will: (i) be in form and
substance reasonably satisfactory to Parent and the Executive; (ii)
expire no sooner than twenty (20) days after the Resignation Date; and
(iii) provide that the Executive will be entitled to draw on the L/C if
he certifies that: (A) Parent has not paid the outstanding principal on
the Note on or before the seventh day after the Resignation Date; (B)
the Executive has fully and completely performed all of his obligations
arising under Sections 1 and 6 of this Agreement; and (C) the Release
(as defined below) has not been revoked by Executive (and the 7 day
rescission period applicable thereto has lapsed), has not been
modified, and it constitutes a legal, valid, and binding obligation of
Executive, enforceable in accordance with its terms.
4. BENEFITS. During the period commencing on the Resignation Date and
ending on the first anniversary of the Resignation Date, the Executive
will be entitled to health and medical benefits substantially similar
to those offered by Parent to other executive officers of Parent.
During the period between the Effective Date and the Resignation Date,
the Executive will be entitled to an office (located at 000 X. Xxx Xxxx
Xxxx., Xxxxx 0000, Xx. Xxxxxxxxxx, Xxxxxxx) and secretarial services.
5. D&O INSURANCE. For a period of three years following the Resignation
Date, Parent will name the Executive as an insured under policies
maintained by Parent for tail D&O insurance covering the Executive for
liability resulting from acts and omissions of the Executive while he
served as a director or officer of Nations.
6. RELEASES. On the Resignation Date, the Executive will execute and
deliver to Nations a release in substantially the form set forth in
EXHIBIT B hereto (the "Release"); PROVIDED, HOWEVER, that, if the
Executive refuses to execute, revokes, or challenges the Release or any
provision thereof, the Executive will forfeit any and all rights to the
Severance Payment and will immediately return all or any portion of the
Severance Payment received by the Executive. In addition, pursuant to a
confirmed plan of reorganization of Parent, the Executive will receive
customary releases and indemnification for liability resulting from
acts and omissions of the Executive while he served as a director or
officer of Nations.
7. EXPENSES. Parent will pay the reasonable out-of-pocket costs and
expenses actually incurred by the Executive in connection with the
negotiation, documentation, and defense of this Agreement, which costs
will be prefunded by Parent by the deposit of a retainer with the
Executive's counsel; PROVIDED, however, that the Executive will cause
any unused portion of such retainer to be returned to the Parent on
later of: (i) the third anniversary of the Filing Date, or (ii) the
date on which any action challenging this Agreement is resolved (but
only if such action is brought prior to the applicable statute of
limitations).
8. WAIVER. No failure or delay by any party in exercising any right,
power, or privilege under or with respect to this Agreement will
operate as a waiver thereof, nor will any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise
of any other right, power, or privilege.
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9. FURTHER ASSURANCES. Each party hereto agrees to take such further
actions, and to execute and deliver such further documents and
instruments, as the other party may reasonably request to consummate
and evidence the transactions and agreements contemplated by this
Agreement.
10. GOVERNING LAW. The validity, construction, and enforcement of this
Agreement are governed by the internal laws of Florida.
11. INTERPRETATION; MISCELLANEOUS. This Agreement may be executed by the
parties hereto in one or more counterparts, each of which will be
deemed to be an original, but all of which together will constitute one
and the same agreement. Invalidity of any provision of this Agreement
will not affect the validity of any other provision. The headings in
this Agreement are solely for convenience of reference and are not to
be given any effect in the construction or interpretation of this
Agreement.
12. NOTICES. Any notice required by this Agreement or the Note will be in
writing and will deemed to have been duly given when delivered in
person or two business days after having been dispatched by an
internationally recognized overnight courier service, and also as of
the date the notice is transmitted by telecopier if the sender obtains
and retains an electronic confirmation of receipt printed by the
sender's telecopier. Any notice deposited in the United States mail
will be deemed to have been delivered only if: (a) it is actually
received by the party to which it is addressed in the ordinary course
of delivery, or (b) it is sent by registered or certified mail, return
receipt requested, postage prepaid, and addressed as follows:
If to the Executive: Xxxxx X. Xxxx
000 Xxx Xxxxx Xxxxx
Xx. Xxxxxxxxxx, XX 00000
with a copy to: Kluger, Peretz, Kaplan & Berlin, PA
000 X. Xxxxxxxx Xxxx., 00xx Xxxxx
Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telecopier: 000-000-0000
If to Parent: NationsRent, Inc.
000 Xxxx Xxx Xxxx, Xxxxx 0000
Xx. Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Telecopier: 000-000-0000
with a copy to: Xxxxx, Day, Xxxxxx, & Xxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx, Esq.
Telecopier: 312-782-8585
However, notice may be delivered to such other address or addresses as
either party may from time to time designate as to itself by like
notice.
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IN WITNESS WHEREOF, Parent and the Executive have duly executed and
delivered this Agreement as of the Effective Date.
NATIONSRENT, INC.
By:
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Name:
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Xxxxx X. Xxxx, in his individual capacity Title:
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EXHIBIT A
FORM OF NOTE
FOR VALUE RECEIVED, NationsRent, Inc., a Delaware corporation
("Maker"), promises to pay to Xxxxx X. Xxxx ("Payee"), in lawful money of the
United States of America, the principal sum of One Million Dollars ($1,000,000)
(the "Principal Amount").
1. AGREEMENT. This promissory note ("Note") is: (i) issued pursuant to
Section 2(b) of that certain Executive Transition Agreement, dated as
of December 14, 2001 (the "Agreement"), by and between Maker and Payee;
and (ii) subject to the terms and conditions of the Agreement.
2. PAYMENT. Subject to Section 3, Maker will pay Payee the entire
Principal Amount on the Resignation Date (as defined in the Agreement).
This Note will not bear any interest.
3. PREPAYMENT. Maker may repay this Note, in whole or in part, at any time
without any prepayment penalty and other charges or fees.
4. NOTICES. All notices or other communications required or permitted
under this Note to Payee or Maker will be sent in accordance with
Section 12 of the Agreement.
5. ASSIGNMENT. This Note, or any interest in this Note, may not be
assigned by either party without the prior written consent of the other
party to this Note.
6. GOVERNING LAW; INTERPRETATION. This Note will be governed and
controlled as to interpretation, enforcement, validity, construction,
and in all other respects by the laws, statutes and decisions of the
State of Florida.
7. INVALIDITY. If any one or more of the provisions contained in this Note
is determined to be invalid, illegal, or unenforceable in any respect,
the validity, legality, or enforceability of all the remaining
provisions will not be in any way be affected or impaired.
8. MISCELLANEOUS. To the extent Maker pays Payee the Principal Amount due
and owing on this Note and is required by applicable law to withhold
taxes and other applicable withholdings therefrom, Maker will be
entitled to hold such amounts from such payment.
IN WITNESS WHEREOF, the Maker has caused this Note to be duly executed
and delivered as of December 14, 2001.
NATIONSRENT, INC.
By:
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Name:
--------------------------
Title:
-------------------------
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EXHIBIT B
FORM OF RELEASE
I, Xxxxx X. Xxxx, in consideration of the obligations of NationsRent,
Inc., a Delaware corporation ("Parent" and, together with each of its
affiliates, the "Company"), under that certain Executive Transition Agreement,
dated as of December 14, 2001 (the "Agreement"), by and between Parent and me,
do hereby release and forever discharge as of the date hereof the Company and
all present and former directors, officers, creditors, representatives,
employees, successors and assigns of the Company, its direct or indirect owners,
and any of their agents or advisors (collectively, the "Released Parties") to
the extent provided below.
1. I understand that any payments or benefits paid or granted to me under
the Agreement represent, in part, consideration for signing this
General Release and are not salary, wages, or benefits to which I was
already entitled. I understand and agree that I would not have
otherwise received the payments and benefits specified in the Agreement
unless I agreed to execute this General Release and to refrain from
revoking this General Release.
2. Except for obligations of Parent arising under the Agreement and the
Note, and except as provided in Section 4 of this General Release, I
knowingly and voluntarily release and forever discharge the Company and
the other Released Parties from any and all agreements, instruments,
arrangements, claims, controversies, actions, causes of action,
cross-claims, counter-claims, demands, debts, compensatory damages,
liquidated damages, punitive or exemplary damages, other damages,
claims for costs and attorneys' fees, or liabilities of any nature
whatsoever in law and in equity, both past and present (through the
date of this General Release) and whether known or unknown, suspected,
or claimed against the Company or any of the Released Parties that I,
my spouse, or any of my heirs, executors, administrators or assigns,
may have, which arise out of or are connected with my employment with,
or my separation from, the Company (including, but not limited to, any
allegation, claim or violation, arising under: Title VII of the Civil
Rights Act of 1964, as amended; the Civil Rights Act of 1991; the Age
Discrimination in Employment Act of 1967, as amended (including the
Older Workers Benefit Protection Act); the Equal Pay Act of 1963, as
amended; the Americans with Disabilities Act of 1990; the Family and
Medical Leave Act of 1993; the Civil Rights Act of 1866, as amended;
the Worker Adjustment Retraining and Notification Act; the Employee
Retirement Income Security Act of 1974; any applicable Executive Order
Programs; the Fair Labor Standards Act; or their state or local
counterparts; or under any other federal, state or local civil or human
rights law, or under any other local, state, or federal law, regulation
or ordinance; or under any public policy, contract or tort, or under
common law; or arising under any policies, practices or procedures of
the Company; or any claim for wrongful discharge, breach of contract,
infliction of emotional distress, defamation; or any claim for costs,
fees, or other expenses, including attorneys' fees incurred in these
matters) (all of the foregoing collectively referred to herein as the
"Claims").
3. I represent that I have made no assignment or transfer of any right,
claim, demand, cause of action, or other matter covered by Section 2 of
this General Release.
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4. I agree that this General Release does not waive or release any rights
or claims that I may have under the Age Discrimination in Employment
Act of 1967, as amended, that arise after the date I execute this
General Release. I acknowledge and agree that my separation from
employment with the Company in compliance with the terms of the
Agreement shall not serve as the basis for any claim or action
(including, without limitation, any claim under the Age Discrimination
in Employment Act of 1967, as amended).
5. In signing this General Release, I acknowledge and intend that it shall
be effective as a bar to each and every one of the Claims hereinabove
mentioned or implied. I expressly consent that this General Release
shall be given full force and effect according to each and all of its
express terms and provisions, including those relating to unknown and
unsuspected Claims (notwithstanding any state statute that expressly
limits the effectiveness of a general release of unknown, unsuspected
and unanticipated Claims), if any, as well as those relating to any
other Claims hereinabove mentioned or implied. I acknowledge and agree
that this waiver is an essential and material term of this General
Release and that without such waiver the Company would not have agreed
to the terms of the Agreement. I further agree that in the event I
should bring a Claim seeking damages against the Company, or in the
event I should seek to recover against the Company in any Claim brought
by a governmental agency on my behalf, this General Release shall serve
as a complete defense to such Claims. I further agree that I am not
aware of any pending charge or complaint of the type described in
Section 2 of this General Release as of the execution of this General
Release.
6. I agree that neither this General Release, nor the furnishing of the
consideration for this General Release, shall be deemed or construed at
any time to be an admission by the Company, any Released Party or
myself of any improper or unlawful conduct.
7. I agree that I will forfeit all amounts payable by the Company pursuant
to the Agreement if I challenge the validity of this General Release. I
also agree that if I violate this General Release by suing the Company
or the other Released Parties, I will pay all costs and expenses of
defending against the suit incurred by the Released Parties, including
reasonable attorneys' fees, and return all payments received by me
pursuant to the Agreement.
8. I agree that this General Release is confidential and agree not to
disclose any information regarding the terms of this General Release,
except to my immediate family and any tax, legal or other counsel I
have consulted regarding the meaning or effect hereof or as required by
law, and I will instruct each of the foregoing not to disclose the same
to anyone.
9. Any non-disclosure provision in this General Release does not prohibit
or restrict me (or my attorney) from responding to any inquiry about
this General Release or its underlying facts and circumstances by the
Securities and Exchange Commission (SEC), the National Association of
Securities Dealers, Inc. (NASD), any other self-regulatory organization
or governmental entity.
10. I agree to reasonably cooperate with the Company in any internal
investigation or administrative, regulatory, or judicial proceeding. I
understand and agree that my cooperation may include, but not be
limited to, making myself available to the Company upon reasonable
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notice for interviews and factual investigations; appearing at the
Company's request to give testimony without requiring service of a
subpoena or other legal process; volunteering to the Company pertinent
information; and turning over to the Company all relevant documents
that are or may come into my possession all at times and on schedules
that are reasonably consistent with my other permitted activities and
commitments. I understand that in the event the Company asks for my
cooperation in accordance with this provision, the Company will
reimburse me solely for reasonable travel expenses, including lodging
and meals, upon my submission of receipts.
11. Whenever possible, each provision of this General Release shall be
interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this General Release is held to
be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality
or unenforceability shall not affect any other provision or any other
jurisdiction, but this General Release shall be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision had never been contained herein.
12. BY SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT:
(A) I HAVE READ IT CAREFULLY.
(B) I UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP
IMPORTANT RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER
THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED;
TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE
EQUAL PAY ACT OF 1963; THE AMERICANS WITH DISABILITIES ACT OF
1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
AS AMENDED.
(C) I VOLUNTARILY CONSENT TO EVERYTHING IN IT.
(D) I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE
EXECUTING IT AND I HAVE DONE SO OR, AFTER CAREFUL READING AND
CONSIDERATION, I HAVE CHOSEN NOT TO DO SO OF MY OWN VOLITION.
(E) I HAVE HAD AT LEAST 21 DAYS FROM THE DATE OF MY RECEIPT OF
THIS RELEASE SUBSTANTIALLY IN ITS FINAL FORM TO CONSIDER IT
AND ANY CHANGES MADE SINCE THE EFFECTIVE DATE (AS DEFINED IN
THE AGREEMENT) VERSION OF THIS RELEASE ARE NOT MATERIAL (OR
WERE MADE AT MY REQUEST) AND WILL NOT RESTART THE REQUIRED
21-DAY PERIOD.
(F) I UNDERSTAND THAT I HAVE SEVEN (7) DAYS AFTER THE EXECUTION OF
THIS RELEASE TO REVOKE IT AND THAT THIS RELEASE SHALL NOT
BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD
HAS EXPIRED.
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(G) I HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY
AND WITH THE ADVICE OF ANY COUNSEL RETAINED TO ADVISE ME WITH
RESPECT TO IT.
(H) I AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE
AMENDED, WAIVED, CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT
IN WRITING SIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE
COMPANY AND BY ME.
DATE: __________ ___, 200__ BY:
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Xxxxx X. Xxxx
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EXHIBIT C
LETTER OF RESIGNATION
I, Xxxxx X. Xxxx, hereby irrevocably resign all of my director and
officer positions with NationsRent, Inc. ("Parent") and any and all of its
direct and indirect subsidiaries effective as of the Resignation Date (as
defined in that certain Executive Transition Agreement, dated as of December 14,
2001 (the "Agreement"), by and between Parent and me).
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Xxxxx X. Xxxx
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