EXHIBIT 10.29
INCENTIVE STOCK OPTION AGREEMENT
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THIS AGREEMENT, dated February 26, 1997 is made by and between Rental
Service Corporation, a Delaware corporation hereinafter referred to as
"Company," and the employee of the Company or a Subsidiary of the Company who is
named on the signature page hereto, hereinafter referred to as "Employee":
WHEREAS, the Company wishes to afford the Employee the opportunity to
purchase shares of its $.01 par value Common Stock ("Common Stock"); and
WHEREAS, the Company wishes to carry out the Plan (the terms of which
are hereby incorporated by reference and made a part of this Agreement); and
WHEREAS, the Committee, appointed to administer the Plan, has
determined that it would be to the advantage and best interest of the Company
and its shareholders to grant the Incentive Stock Option provided for herein to
the Employee as an inducement to enter into or remain in the service of the
Company or its Subsidiaries and as an incentive for increased efforts during
such service, and has advised the Company thereof and instructed the undersigned
officers to issue said Option;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
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Whenever the following terms are used in this Agreement, they shall
have the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates. All capitalized terms used
herein without definition shall have the meanings ascribed to such terms in the
Plan.
Section 1.1 - Board
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"Board" shall mean the Board of Directors of the Company.
Section 1.2 - Code
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"Code" shall mean the Internal Revenue Code of 1986, as amended.
Section 1.3 - Committee
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"Committee" shall mean the Compensation Committee of the Board, or
another committee of the Board, appointed as provided in Section 9.1 of the
Plan.
Section 1.4 - Company
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"Company" shall mean Rental Service Corporation, a Delaware
corporation.
Section 1.5 - Director
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"Director" shall mean a member of the Board.
Section 1.6 - Exchange Act
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"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
Section 1.7 - Officer
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"Officer" shall mean an officer of the Company, as defined in Rule
16a-1(f) under the Exchange Act, as such Rule may be amended in the future.
Section 1.8 - Option
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"Option" shall mean the incentive stock option to purchase Common
Stock of the Company granted under this Agreement.
Section 1.9 - Optionee
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"Optionee" shall mean the Employee under this Agreement.
Section 1.10 - Plan
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"Plan" shall mean The 1996 Equity Participation Plan of Rental Service
Corporation.
Section 1.11 - Rule 16b-3
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"Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange
Act, as such Rule may be amended from time to time.
Section 1.12 - Secretary
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"Secretary" shall mean the Secretary of the Company.
Section 1.13 - Securities Act
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"Securities Act" shall mean the Securities Act of 1933, as amended.
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Section 1.14 - Subsidiary
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"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one (1) of the other corporations in such chain.
Section 1.15 - Termination of Employment
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"Termination of Employment" shall mean the time when the employee-
employer relationship between the Employee and the Company or any Subsidiary is
terminated for any reason, with or without cause, including, but not by way of
limitation, a termination by resignation, discharge, death, disability or
retirement; but excluding (i) terminations where there is a simultaneous
reemployment or continuing employment of the Employee by the Company or any
Subsidiary, (ii) at the discretion of the Committee, terminations which result
in a temporary severance of the employee-employer relationship, and (iii) at the
discretion of the Committee, terminations which are followed by the simultaneous
establishment of a consulting relationship by the Company or a Subsidiary with
the former employee. The Committee, in its absolute discretion, shall determine
the effect of all matters and questions relating to Termination of Employment,
including, but not by way of limitation, the question of whether a Termination
of Employment resulted from a discharge for good cause, and all questions of
whether particular leaves of absence constitute Terminations of Employment;
provided, however, that, unless otherwise determined by the Committee in its
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discretion, a leave of absence, change in status from an employee to an
independent contractor or other change in the employee-employer relationship
shall constitute a Termination of Employment if, and to the extent that, such
leave of absence, change in status or other change interrupts employment for the
purposes of Section 422(a)(2) of the Code and the then applicable regulations
and revenue rulings under said Section. Notwithstanding any other provision of
this Agreement or of the Plan, the Company or any Subsidiary has an absolute and
unrestricted right to terminate the Employee's employment at any time for any
reason whatsoever, with or without cause, except to the extent expressly
provided otherwise in writing.
ARTICLE II
GRANT OF OPTION
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Section 2.1 - Grant of Option
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In consideration of the Employee's agreement to remain in the employ
of the Company or its Subsidiaries and for other good and valuable
consideration, on the date hereof the Company irrevocably grants to the Employee
the option to purchase any part or all of the aggregate of (ShareNumber) shares
of its $.01 par value Common Stock set forth on the signature page hereto upon
the terms and conditions set forth in this Agreement.
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Section 2.2 - Purchase Price
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The purchase price of the shares of stock covered by the Option shall
be the dollar amount per share, without commission or other charge, set forth on
the signature page hereto.
Section 2.3 - Consideration to Company
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In consideration of the granting of this Option by the Company, the
Employee agrees to render faithful and efficient services to the Company or a
Subsidiary, with such duties and responsibilities as the Company shall from time
to time prescribe, for a period of at least one (1) year from the date this
Option is granted. Nothing in this Agreement or in the Plan shall confer upon
the Employee any right to continue in the employ of the Company or any
Subsidiary, or as a director of the Company, or shall interfere with or restrict
in any way the rights of the Company and its Subsidiaries, which are hereby
expressly reserved, to discharge the Employee at any time for any reason
whatsoever, with or without cause.
Section 2.4 - Adjustments in Option
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The Committee may make adjustments with respect to the Option in
accordance with the provisions of Section 10.3 of the Plan; provided, however,
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that each such adjustment shall be made in such manner as not to constitute a
"modification" within the meaning of Section 424(h)(3) of the Code, unless the
Optionee consents to an adjustment which would constitute such a "modification".
ARTICLE III
PERIOD OF EXERCISABILITY
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Section 3.1 - Commencement of Exercisability
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(a) Subject to Section 5.6, the Option shall become exercisable in
four (4) cumulative installments as follows:
(i) An installment covering 1/4 of the shares shall become
exercisable on February 26, 1998;
(ii) An installment covering 1/4 of the shares shall become
exercisable on February 26, 1999;
(iii) An installment covering 1/4 of the shares shall become
exercisable on February 26, 2000;
(iv) An installment covering 1/4 of the shares shall become
exercisable on February 26, 2001.
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(b) No portion of the Option which is unexercisable at Termination of
Employment shall thereafter become exercisable.
Section 3.2 - Duration of Exercisability
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The installments provided for in Section 3.1 are cumulative. Each
such installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 3.3.
Section 3.3 - Expiration of Option
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The Option may not be exercised to any extent by anyone after the
first to occur of the following events:
(a) The expiration of ten (10) years from the date the Option was
granted; or
(b) If the Employee owned (within the meaning of Section 424(d) of the
Code), at the time the Option was granted, more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company or any
Subsidiary or parent corporation thereof (within the meaning of Section 422 of
the Code), the expiration of five (5) years from the date the Option was
granted; or
(c) The time of the Employee's Termination of Employment unless such
Termination of Employment results from his death, his retirement, his disability
(within the meaning of Section 22(e)(3) of the Code) or his being discharged not
for good cause; or
(d) the expiration of three (3) months from the date of the Employee's
Termination of Employment by reason of his retirement or his being discharged
not for good cause, unless the Employee dies within said three-month period; or
(e) the expiration of one (1) year from the date of the Employee's
Termination of Employment by reason of his disability (within the meaning of
Section 22(e)(3) of the Code); or
(f) the expiration of one (1) year from the date of the Employee's
death; or
(g) the effective date of either the merger or consolidation of the
Company with or into another corporation, or the acquisition by another
corporation or person of all or substantially all of the Company's assets or
eighty percent (80%) or more of the Company's then outstanding voting stock, or
the liquidation or dissolution of the Company, unless the Committee waives this
provision in connection with such transaction. At least ten (10) days prior to
the effective date of such merger, consolidation, acquisition, liquidation or
dissolution, the Committee shall give the Employee notice of such event if the
Option has then neither been fully exercised nor become unexercisable under this
Section 3.3.
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Section 3.4 - Acceleration of Exercisability
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In the event of the merger or consolidation of the Company with or
into another corporation, or the acquisition by another corporation or person of
all or substantially all of the Company's assets or eighty percent (80%) or more
of the Company's then outstanding voting stock, or the liquidation or
dissolution of the Company, the Board may, in its absolute discretion and upon
such terms and conditions as it deems appropriate, provide by resolution adopted
prior to such event and incorporated in the notice referred to in Section
3.3(d), that at some time prior to the effective date of such event this Option
shall be exercisable as to all the shares covered hereby, notwithstanding that
this Option may not yet have become fully exercisable under Section 3.1(a);
provided, however, that this acceleration of exercisability shall not take place
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if this Option becomes unexercisable under Section 3.3 prior to said effective
date; provided, further, that nothing in this Section 3.4 shall make this Option
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exercisable if it is otherwise unexercisable.
The Board may make such determinations and adopt such rules and
conditions as it, in its absolute discretion, deems appropriate in connection
with such assumption, substitution or acceleration of exercisability, including,
but not by way of limitation, provisions to ensure that any such acceleration
and resulting exercise shall be conditioned upon the consummation of the
contemplated corporate transaction, and determinations regarding whether
reasonable and adequate provisions for assumption or substitution have been made
as defined in subsection (a) above.
Section 3.5 - Special Tax Consequences
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The Employee acknowledges that, to the extent that the aggregate Fair
Market Value of stock with respect to which "incentive stock options" (within
the meaning of Section 422 of the Code, but without regard to Section 422(d) of
the Code), including the Option, are exercisable for the first time by the
Employee during any calendar year (under the Plan and all other incentive stock
option plans of the Company, any Subsidiary and any parent corporation thereof
(within the meaning of Section 422 of the Code)) exceeds $100,000, such options
shall be treated as Non-Qualified Options to the extent required by Section 422
of the Code. The Employee further acknowledges that the rule set forth in the
preceding sentence shall be applied by taking options into account in the order
in which they were granted. For purposes of these rules, the Fair Market Value
of stock shall be determined as of the time the option with respect to such
stock is granted.
ARTICLE IV
EXERCISE OF OPTION
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Section 4.1 - Person Eligible to Exercise
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During the lifetime of the Employee, only he may exercise the Option
or any portion thereof. After the death of the Employee, any exercisable
portion of the Option may, prior to the time when the Option becomes
unexercisable under Section 3.3, be exercised by his
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personal representative or by any person empowered to do so under the deceased
Employee's will or under the then applicable laws of descent and distribution.
Section 4.2 - Partial Exercise
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Any exercisable portion of the Option or the entire Option, if then
wholly exercisable, may be exercised in whole or in part at any time prior to
the time when the Option or portion thereof becomes unexercisable under Section
3.3; provided, however, that each partial exercise shall be for not less than
one hundred (100) shares (or the minimum installment set forth in Section 3.1,
if a smaller number of shares) and shall be for whole shares only.
Section 4.3 - Manner of Exercise
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The Option, or any exercisable portion thereof, may be exercised
solely by delivery to the Secretary or his office of all of the following prior
to the time when the Option or such portion becomes unexercisable under Section
3.3:
(a) written notice complying with the applicable rules established by
the Committee stating that the Option, or a portion thereof, is exercised. The
notice shall be signed by the Employee or other person then entitled to exercise
the Option or such portion; and
(b) (i) Full cash payment to the Secretary of the Company for the
shares with respect to which such Option or portion is exercised; or
(ii) With the consent of the Committee, (A) shares of the
Company's Common Stock owned by the Employee, duly endorsed for transfer to
the Company, with a Fair Market Value on the date of delivery equal to the
aggregate exercise price of the Option or exercised portion thereof, or (B)
shares of the Company's Common Stock issuable to the Employee upon exercise
of the Option, with a Fair Market Value on the date of delivery equal to
the aggregate exercise price of the Option or exercised portion thereof; or
(iii) With the consent of the Committee, a full recourse
promissory note bearing interest (at no less than such rate as shall then
preclude the imputation of interest under the Code or successor provision)
and payable upon such terms as may be prescribed by the Committee. The
Committee may also prescribe the form of such note and the security to be
given for such note. The Option may not be exercised, however, by delivery
of a promissory note or by a loan from the Company when or where such loan
or other extension of credit is prohibited by law; or
(iv) With the consent of the Committee, any combination of the
consideration provided in the foregoing subparagraphs (i), (ii) and (iii);
and
(c) A bona fide written representation and agreement, in a form
satisfactory to the Committee, signed by the Employee or other person then
entitled to exercise such Option or portion, stating that the shares of stock
are being acquired for his own account, for investment
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and without any present intention of distributing or reselling said shares or
any of them except as may be permitted under the Securities Act and then
applicable rules and regulations thereunder, and that the Employee or other
person then entitled to exercise such Option or portion will indemnify the
Company against and hold it free and harmless from any loss, damage, expense or
liability resulting to the Company if any sale or distribution of the shares by
such person is contrary to the representation and agreement referred to above.
The Committee may, in its absolute discretion, take whatever additional actions
it deems appropriate to insure the observance and performance of such
representation and agreement and to effect compliance with the Securities Act
and any other federal or state securities laws or regulations. Without limiting
the generality of the foregoing, the Committee may require an opinion of counsel
acceptable to it to the effect that any subsequent transfer of shares acquired
on an Option exercise does not violate the Securities Act, and may issue stop-
transfer orders covering such shares. Share certificates evidencing stock issued
on exercise of this Option shall bear an appropriate legend referring to the
provisions of this subsection (c) and the agreements herein. The written
representation and agreement referred to in the first sentence of this
subsection (c) shall, however, not be required if the shares to be issued
pursuant to such exercise have been registered under the Securities Act, and
such registration is then effective in respect of such shares;
(d) Full payment to the Company (or other employer corporation) of all
amounts which, under federal, state or local tax law, it is required to withhold
upon exercise of the Option; with the consent of the Committee, (i) shares of
the Company's Common Stock owned by the Employee, duly endorsed for transfer,
with a Fair Market Value equal to the sums required to be withheld, or (ii)
shares of the Company's Common Stock issuable to the Employee upon exercise of
the Option with a Fair Market Value equal to the sums required to be withheld,
may be used to make all or part of such payment; and
(e) In the event the Option or portion shall be exercised pursuant to
Section 4.1 by any person or persons other than the Employee, appropriate proof
of the right of such person or persons to exercise the Option.
Section 4.4 - Conditions to Issuance of Stock Certificates
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The shares of stock deliverable upon the exercise of the Option, or
any portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon the
exercise of the Option or portion thereof prior to fulfillment of all of the
following conditions:
(a) The admission of such shares to listing on all stock exchanges on
which such class of stock is then listed; and
(b) The completion of any registration or other qualification of such
shares under any state or federal law or under rulings or regulations of the
Securities and Exchange Commission or of any other governmental regulatory body,
which the Committee shall, in its absolute discretion, deem necessary or
advisable; and
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(c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable; and
(d) The receipt by the Company of full payment for such shares,
including payment of all amounts which, under federal, state or local tax law,
the Company (or other employer corporation) is required to withhold upon
exercise of the Option; and
(e) The lapse of such reasonable period of time following the exercise
of the Option as the Committee may from time to time establish for reasons of
administrative convenience.
Section 4.5 - Rights as Shareholder
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The holder of the Option shall not be, nor have any of the rights or
privileges of, a shareholder of the Company in respect of any shares purchasable
upon the exercise of any part of the Option unless and until certificates
representing such shares shall have been issued by the Company to such holder.
ARTICLE V
OTHER PROVISIONS
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Section 5.1 - Administration
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The Committee shall have the power to interpret the Plan and this
Agreement and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret, amend or
revoke any such rules. All actions taken and all interpretations and
determinations made by the Committee in good faith shall be final and binding
upon the Employee, the Company and all other interested persons. No member of
the Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or the Option. Any
such interpretations and rules with respect to incentive stock options shall be
consistent with the provisions of Section 422 of the Code. In its absolute
discretion, the Board may at any time and from time to time exercise any and all
rights and duties of the Committee under the Plan and this Agreement except with
respect to matters which under Rule 16b-3 or Section 162(m) of the Code, or any
regulations or rules issued thereunder, or other applicable law, are required to
be determined in the sole discretion of the Committee.
Section 5.2 - Option Not Transferable
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Neither the Option nor any interest or right therein or part thereof
shall be sold, pledged, assigned, or transferred in any manner other than by
will or the laws of descent and distribution, unless and until such Option has
been exercised, or the shares underlying such Option have been issued, and all
restrictions applicable to such shares have lapsed. Neither the Option nor any
interest or right therein or part thereof shall be liable for the debts,
contracts or
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engagements of the Employee or his successors in interest or shall be subject to
disposition by transfer, alienation, anticipation, pledge, encumbrance,
assignment or any other means whether such disposition be voluntary or
involuntary or by operation of law by judgment, levy, attachment, garnishment or
any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect, except to
the extent that such disposition is permitted by the preceding sentence.
Section 5.3 - Shares to Be Reserved
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The Company shall at all times during the term of the Option reserve
and keep available such number of shares of stock as will be sufficient to
satisfy the requirements of this Agreement.
Section 5.4 - Notices
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Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of its Secretary, and any
notice to be given to the Employee shall be addressed to him at the address
given beneath his signature hereto. By a notice given pursuant to this Section
5.4, either party may hereafter designate a different address for notices to be
given to him. Any notice which is required to be given to the Employee shall,
if the Employee is then deceased, be given to the Employee's personal
representative if such representative has previously informed the Company of his
status and address by written notice under this Section 5.4. Any notice shall
be deemed duly given when enclosed in a properly sealed envelope or wrapper
addressed as aforesaid, deposited (with postage prepaid) in a post office or
branch post office regularly maintained by the United States Postal Service.
Section 5.5 - Titles
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Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.
Section 5.6 - Notification of Disposition
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The Employee shall give prompt notice to the Company of any
disposition or other transfer of any shares of stock acquired under this
Agreement if such disposition or transfer is made (a) within two (2) years from
the date of granting the Option with respect to such shares or (b) within one
(1) year after the transfer of such shares to him. Such notice shall specify
the date of such disposition or other transfer and the amount realized, in cash,
other property, assumption of indebtedness or other consideration, by the
Employee in such disposition or other transfer.
Section 5.7 - Construction
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This Agreement shall be administered, interpreted and enforced under
the internal laws of the State of Delaware without regard to conflicts of laws
thereof..
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Section 5.8 - Conformity to Securities Laws
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The Employee acknowledges that the Plan is intended to conform to the
extent necessary with all provisions of the Securities Act and the Exchange Act
and any and all regulations and rules promulgated by the Securities and Exchange
Commission thereunder, including without limitation Rule 16b-3. Notwithstanding
anything herein to the contrary, the Plan shall be administered, and the Option
is granted and may be exercised, only in such a manner as to conform to such
laws, rules and regulations. To the extent permitted by applicable law, the
Plan and this Agreement shall be deemed amended to the extent necessary to
conform to such laws, rules and regulations.
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IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto.
RENTAL SERVICE CORPORATION
By:____________________________________
Xxxxxx X. Xxxx, Chairman & CEO
By:____________________________________
Xxxxxxx X. Xxxxxxxx, Secretary
______________________________________
(Employee), Employee
_______________________________________
_______________________________________
Address
Employee's Taxpayer
Identification Number:
_______________________________________
DATED: February 26, 1997
Number of shares covered by Option: (ShareNumber)
Initial Exercise Price per share: $20.25
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SECTION 5.6 NOTICE OF DISPOSITION OF SHARES
OF RENTAL SERVICE CORPORATION
This will serve to notify Rental Service Corporation (the "Company")
pursuant to Section 5.6 of my Incentive Stock Option Agreement dated
______________, 1997, that I have sold or otherwise disposed of _______shares
of the Company's common stock which I acquired on exercise of all or a part of
such incentive stock option. The date of the disposition was _____________.
The amount realized by me in cash, property or other consideration was
$_______________.
I understand that I must give this notice is such a disposition or transfer
is made (x) within 2 years from the date the option was granted or (y) within 1
year after the exercise of the option.
__________________________________
Name of employee
Date:__________________
Please return the completed form to: Xxxx Xxxxxxxx, Rental Service Corporation,
00000 X. Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, XX 00000
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