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EXHIBIT 10.28
RESTATED NONQUALIFIED STOCK OPTION AGREEMENT [MANAGEMENT]
This RESTATED NONQUALIFIED STOCK OPTION AGREEMENT (the "Agreement") is made
effective as of the 1st day of April, 1996, between RENTX INDUSTRIES, INC., a
Delaware corporation (the "Company"), and Xxxx X. Xxxxxxx (the "Optionee"). In
consideration of the mutual promises set forth in this Agreement, we agree as
follows:
1. OPTION GRANT. Pursuant to the letter agreement dated April 1, 1996 between
the Company and the Optionee (the "Letter Agreement") and subject to the terms
and conditions of this Agreement (including, without limitation, those relating
to vesting set forth in Section 3 and those relating to "community property"
and related matters set forth in Section 17), the Company grants to the
Optionee the right and option (the "Option") to purchase an aggregate of 32,532
shares (the "Optioned Shares") of its nonvoting Class B Common Stock (the
"Stock") pursuant to the terms set forth below; provided, however, that if,
pursuant to the Company's certificate of incorporation, as amended, each share
of the Company's issued and outstanding Class B Common Stock is reclassified
and changed into one share of Class A Common Stock and the outstanding rights
to receive Class B Common Stock from the Company become outstanding rights to
acquire Class A Common Stock on a share-for share-basis, then the term "Stock"
shall also refer to such shares of Class A Common Stock). This Option grant is
made as a matter of separate agreement and not in lieu of regular salary. The
date on which this Option was granted was April 1, 1996 (the "Grant Date"). On
January 30, 1997, the Company's Certificate of Incorporation was amended to
increase the authorized number of shares of nonvoting Class B Common Stock from
12,350 shares to 192,308 shares. The Option and the number of Optioned Shares
set forth in this Agreement have been restated to reflect such amendment to the
Company's Certificate of Incorporation. As a result, the Optioned Shares
represent shares of the authorized nonvoting Class B Common Stock of the
Company as it exists following such amendment.
2. STOCK OPTION PRICE. The purchase price of the Optioned Shares is $8.00 per
share (the "Stock Option Price").
3. VESTING; TIME OF EXERCISE. The Optionee shall not have any right to
exercise the Option and acquire any of the Optioned Shares until January 31,
1999, at which time the Optionee's right to acquire 50% of the Optioned Shares
shall vest. Thereafter, on January 31 of each of 2000 and 2001, the Optionee's
right to acquire an additional 25% of the Optioned Shares shall vest.
Notwithstanding anything to the contrary contained in this Section 3, but
subject to Section 14, the Optionee's right to acquire 100% of the Optioned
Shares shall vest upon the earliest to occur of [a] immediately prior to the
closing of the sale by the Company of all or substantially all of its assets
(other than to any entity of which the majority of the voting power of the
ownership interests therein is held, immediately prior to or immediately after
such sale, by the persons who immediately prior to such transaction hold a
majority of the voting power of the ownership interests in the Company) (a
"Non-Affiliate Asset Sale"), [b] immediately prior to the closing of the sale
of the Company substantially in its entirety by merger or consolidation (other
than with an entity of which the majority of the voting power of the ownership
interests therein is held, immediately prior to or immediately after such
transaction, by the persons who immediately prior to such transaction hold a
majority of the voting power
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of the ownership interests in the Company) (a "Non-Affiliate Merger"), or [c]
immediately prior to the closing of the sale by the stockholders of the Company
of all of the outstanding capital stock (other than to any entity of which the
majority of the voting power of the ownership interests therein is held,
immediately prior to or immediately after such sale, by the persons who
immediately prior to such transaction hold a majority of the voting power of
the ownership interests in the Company) (a "Non-Affiliate Stock Sale") (each of
[a], [b] and [c] being referred to herein as a "Vesting Event"), but only if
the Optionee is an employee of the Company or any Subsidiary at the moment
prior to the occurrence of the Vesting Event. Subject to the vesting
requirements set forth above and to the provisions of Sections 13, 14 and 16,
the Option may be exercised at any time or times prior to 5:00 p.m., Colorado
time, on April 1, 2006.
4. MANNER OF EXERCISE. The Option is exercisable by written notice to the
Company, signed by the Optionee. Such notice must set forth: [a] the election
to exercise the Option and accept the Company's offer, [b] the number of
Optioned Shares to which such exercise relates, and [c] a date at least three,
but no more than five, days after the giving of such notice on which payment of
the Stock Option Price will be made. Such notice must either be actually
delivered to the Company or sent by certified mail to the Company at 0000 Xxxxx
Xxxxxx, Xxxxxx, Xxxxxxxx, 00000, Attn: Xxxxx X. Xxxxxxxx, Vice President (or at
such other address as the Company may direct). Upon exercise of the Option by
giving written notice to the Company, the Optionee will be personally liable to
acquire the Optioned Shares as stated in such notice.
5. CLOSING ON SHARE ISSUANCE. On the date specified in the written notice of
exercise (the "Closing Date"), the Optionee will deliver to the Company [a] the
Stock Option Price for all Optioned Shares being acquired pursuant to the
Option, [b] the Optionee's signed investment letter in the form of the attached
Exhibit A (or in such form as the Board of Directors of the Company (the
"Board") may from time to time subsequently determine), [c] the Optionee's
signed Class B Common Stock Voting Trust Agreement in the form of the attached
Exhibit B (or in such form as the Board may from time to time subsequently
determine) and [d], upon issuance by the Company, the stock certificate
representing the Optioned Shares, duly endorsed for transfer to the trustee
under the Class B Common Stock Voting Trust Agreement (in return for which the
Optionee shall receive a Voting Trust Certificate representing the Optioned
Shares). All of the provisions of this Agreement, including, without
limitation, Sections 7 through 18, will apply to each Voting Trust Certificate
issued under the Class B Common Stock Voting Trust Agreement in respect of any
Shares (as defined below). Payment will be made in cash, either by personal
check which clears in the ordinary course, by bank cashier's check or by
certified check (in all cases, in immediately available funds). Any other
method of payment may be made only if acceptable to the Board, in its
discretion. Notwithstanding the above, the Company shall not be obligated to
deliver any Optioned Shares unless and until, in the opinion of the Company's
counsel, there has been compliance with all applicable federal and state laws
and regulations and only when all other legal matters in connection with the
issuance and delivery of such Optioned Shares have been approved by the
Company's counsel. The Company shall use its best efforts to effect any such
compliance, and the Optionee shall take any such action reasonably requested by
the Company; provided, however, that in no event shall the Company be required
to file a registration statement under the Securities Act
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of 1933 or any state securities law to satisfy its obligation to use its best
efforts to effect such compliance. The Optionee shall have the rights of a
shareholder of the Company only as to shares actually acquired by and issued to
the Optionee under this Agreement.
6. NONASSIGNABLE OPTION. Neither the Option nor any other rights acquired by
the Optionee under this Agreement are assignable or transferable by the
Optionee. Any sale, assignment, transfer, pledge or other disposition of any
Option contrary to the provisions of this Agreement, and any levy of any
attachment or similar process upon any Option, will be null and void. Upon the
occurrence of such an event, the Board may, in its discretion, terminate the
Option. The Option may be exercised only during the Employee's lifetime,
except as otherwise specifically provided in Section 13.
7. SHARE TRANSFER RESTRICTION. Except for Permitted Transfers (as defined in
Section 8) and unless a Release Event (as defined below) has occurred, none of
the Optioned Shares, any shares of capital stock of the Company issued in
respect of the Optioned Shares upon any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares, change in
corporate structure or otherwise, nor any right, title or interest therein,
whether represented by the Voting Trust Certificate or otherwise (the Optioned
Shares, all such other shares, and all right, title and interest therein being
referred to collectively as the "Shares"), may be sold, assigned, transferred,
pledged, or otherwise disposed of or encumbered, voluntarily or involuntarily,
by act of the Optionee or the Optionee's Permitted Transferee or by operation
of law, including, without limitation, by bequest or the laws of descent and
distribution (any of such events being referred to as a "Transfer"), without
the Company's prior written consent and upon such terms and conditions as the
Company may determine. Any attempted transfer of any Shares contrary to the
preceding sentence will be null and void. Nevertheless, the restriction on
transfer of the Shares set forth in this Section 7 will terminate and be of no
further force and effect upon the occurrence of any of the following events
(each of which is referred to as a "Release Event"): [a] the closing of any
Qualified Public Offering (as defined below), [b] the closing of a Non-
Affiliate Asset Sale, or [c] the closing of the sale of the Company
substantially in its entirety by a Non-Affiliate Merger or by a Non-Affiliate
Stock Sale (or by any combination of the foregoing).
For purposes of this Agreement: [a] "Qualified Public Offering" means
the sale in an underwritten public offering or a series of public offerings,
registered under the Securities Act of 1933, as amended (the "Securities Act"),
of Common Stock, which results in public ownership of not less than 25% of the
Fully Diluted Common Stock of the Company, which shares of Common Stock are
listed upon the New York Stock Exchange, the American Stock Exchange or are
approved for quotation on the NASDAQ National Market and which offerings shall
have resulted in the receipt by the Company of aggregate cash proceeds (after
deduction of underwriting discounts and the costs associated with the
offerings) of at least $8 million and with the average price in such offering
or offerings reflecting a valuation of the Fully Diluted Common Stock
(excluding shares being issued in the offering or offerings) aggregating at
least $30 million; [b] "Common Stock" means the Class A Common Stock and the
Class B Common Stock of the Company; [c] "Common Stock Equivalents" means
(without duplication with any other Common Stock or Common Stock Equivalents)
rights, warrants, options
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(including, without limitation, employee stock options), convertible securities
or indebtedness, exchangeable securities or indebtedness, or other rights,
exercisable for or convertible or exchangeable into, directly or indirectly,
Common Stock and securities convertible or exchangeable into Common Stock,
whether at the time of issuance or upon the passage of time or the occurrence
of some future event, including (without limitation) the Series A Preferred
Stock and the Series B Preferred Stock of the Company; and [d] "Fully Diluted
Common Stock" means, at any time, the then outstanding Common Stock of the
Company plus (without duplication) all shares of Common Stock issuable, whether
at such time or upon the passage of time or the occurrence of future events,
upon the exercise, conversion or exchange of all then outstanding Common Stock
Equivalents.
8. PERMITTED TRANSFEREES. Any Optionee may transfer the Shares held by the
Optionee to the Optionee's spouse or children, to any other shareholder of the
Company, or to any employee of the Company or a Subsidiary of the Company, by
gift, by bequest, by the laws of descent and distribution, or by operation of
law in the case where the Optionee and the Optionee's Permitted Transferee (as
defined below) hold Shares as joint tenants with right of survivorship;
provided, however, that in all of the foregoing cases (each of which is
referred to as a "Permitted Transfer") the Optionee must first give notice to
the Company of such Transfer and the transferee (the "Permitted Transferee")
first must agree in writing to be a party to and bound by the terms and
conditions of this Agreement (including by execution of the signature page to
this Agreement) and an original of such writing must be delivered to the
Company. Each Permitted Transferee acknowledges and agrees that, upon
acceptance of Shares from the Optionee, the following provisions will apply:
[a] the transfer restrictions and other obligations applicable to the Optionee
under this Agreement, as well as the agreements and obligations of the Optionee
under the Class B Common Stock Voting Trust Agreement referred to in Section
5[c] will apply to and be assumed by such Permitted Transferee with respect to
the Shares owned by the Permitted Transferee, and [b] if, as a result of the
operation of Section 9, the Optionee is (or would be) required by this
Agreement to sell any Shares held by such Optionee the Permitted Transferee
agrees to sell the Shares in the same manner and under the same terms as are
applicable to the Optionee.
9. REPURCHASE RIGHT. If the Optionee's employment with the Company or any
Subsidiary is terminated for any or no reason (whether by voluntary or
involuntary act of the Optionee, the Company or any Subsidiary, including
retirement, firing, death or disability) before or after a Release Event, the
Company will have the right, but not the obligation, to purchase from the
Optionee and each Permitted Transferee all or any part of the Shares and all or
any part of the Optionee's right to acquire Optioned Shares, which immediately
prior to such termination, are vested (the Optionee's right to acquire Optioned
Shares which has so vested is referred to as the "Vested Options"), and the
Optionee and each Permitted Transferee must sell to the Company, if the Company
exercises such option, all of the Shares the Company desires to purchase and
all of the Vested Options the Company desires to purchase. The purchase price
will be determined under Section 10, and the closing will occur as provided in
Section 11.
10. PURCHASE PRICE. [a] The purchase price per share payable by the Company
for the Shares will be fixed as of the effective date of termination of the
Optionee's employment with the Company or any Subsidiary (the "Termination
Date") at an amount equal to the fair market
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value thereof (the "Per Share Purchase Price") determined as set forth in
Section 11[b]. The purchase price per Vested Option payable by the Company for
the Vested Options will be the Per Share Purchase Price minus the Stock Option
Price for the Optioned Share underlying such Vested Option.
[b] If, at the time the Company's repurchase right
under Section 10 becomes operative, the Shares are registered under the
Securities Act of 1934, as amended (meaning the Shares are "publicly traded"),
then the Per Share Purchase Price payable by the Company for the Shares will be
fixed as of the Termination Date at a per Share price equal to the arithmetic
mean of the market prices of the class of stock of which the Shares are a part
(the "Stock") for the 20 trading days preceding the Termination Date. For this
purpose, the market price of the Stock on each such day shall be [i] the
closing price of the Stock on the principal national securities exchange on
which it is then traded, or [ii] if the Stock is not then traded on a national
securities exchange, the closing price of the Stock reported by the National
Association of Securities Dealers, Inc. National Market System or Automated
Quotation System or its successors ("NASDAQ"), or [iii] if the closing price of
the Stock is not then reported by NASDAQ, the mean of the bid and asked prices
of the Stock reported by NASDAQ, or [iv], if bid and asked prices for the Stock
are not then reported by NASDAQ, the mean of the bid and asked prices of the
Stock reported by the National Quotation Bureau, Inc. or its successor. If, at
the time the Company's repurchase right under Section 10 becomes operative, the
Shares are not registered under the Securities Exchange Act of 1934, as
amended, then the Per Share Purchase Price payable by the Company for the
Shares will be fixed as of the Termination Date and determined in good faith by
the Board of Directors using any reasonable valuation method, with the Board's
objective being to set the price at the price at which a Share would change
hands between a willing buyer and a willing seller, neither being under any
compulsion to buy or to sell and both having reasonable knowledge of relevant
facts including rights and restrictions on the Shares or the class of stock of
which they are a part.
11. CLOSING OF REPURCHASE. The closing of any purchase of Shares and/or
Vested Options by the Company under this Agreement will occur at a meeting of
the Company and the Optionee and/or the Permitted Assigns, as appropriate, on a
date selected by the Company and noticed to the Optionee and/or the Permitted
Assigns, as appropriate, which will be not later than the 120th day following
the Termination Date at 10:00 a.m. Colorado time at the Company's office in
Denver, Colorado (unless otherwise agreed by the Company and the Optionee
and/or the Permitted Transferees, as appropriate). At the meeting, the Company
will make payment for the Shares and/or Vested Options and the Optionee and/or
the Permitted Transferees, as appropriate, will deliver certificates
representing the Shares, duly endorsed for transfer. If the Shares so
purchased by the Company are then subject to the Class B Common Stock Voting
Trust Agreement, the Trustee thereunder is authorized and directed to deliver
to the Company stock certificates representing such Shares, against receipt of
payment therefor, and to deliver such payment to the Optionee upon delivery by
the Optionee to the Company of the Voting Trust Certificate representing such
Shares. Payment for the Shares and/or Vested Options will be made in cash or
by the Company's check or checks which clear in the ordinary course. All
notices under this Section to the Optionee or the Permitted Transferees, as
appropriate, will be in writing and will be deemed to have been duly given when
delivered in person (by express courier or otherwise), by telecopier or three
days after being deposited in
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the United States mail, certified mail, return receipt requested, first class
postage prepaid, to the Optionee or the Permitted Transferees, as appropriate,
at 0 Xxxxxx Xxxxxx Xxxx, Xxxxxxxxx, XX 00000, or to such other address as the
Optionee or the Permitted Transferees, as appropriate, will have specified by
notice in writing to the Company.
12. STOCK LEGEND. Except to the extent that the Board determines to add or
revise the restrictive legend, all stock and voting trust certificates
evidencing Shares will be legended as follows by the Company:
The shares represented by this certificate are subject to, and are
transferrable only on compliance with, a Nonqualified Stock Option
Agreement dated as of April 1, 1996 between RentX Industries, Inc.
and the shareholder named on the face of this certificate, a copy of
which is on file with, and may be obtained from, RentX Industries, Inc.
13. EMPLOYMENT TERMINATION. If the Optionee's employment with the Company or
any Subsidiary is terminated for any or no reason (whether by voluntary or
involuntary act of the Optionee, the Company or any Subsidiary, including
retirement, firing, death or disability), the Option (including, without
limitation, any Vested Options) will terminate and be of no further force or
effect; provided, however, that any Vested Options shall remain exercisable for
60 days from such termination of employment; and, provided, further, that in
the event any Vested Options are exercised within such 60-day period, the
Optionee and the Optionee's heirs, legal representatives and any other person
entitled to exercise the Vested Options in the Optionee's stead shall, if and
to the extent the Company exercises its rights under Section 9, immediately
sell Shares and Vested Options to the Company in accordance with Section 9.
14. ACCELERATION OF EXPIRATION OF OPTION PERIOD. Notwithstanding anything to
the contrary contained in this Agreement, in the event [a] that the Company
proposes to engage in a Non-Affiliate Asset Sale, [b] that it is proposed that
the Company be sold substantially in its entirety by a Non-Affiliate Merger or
by a Non-Affiliate Stock Sale (or any combination of the events described in
this [b]), or [c] that any transaction is proposed that would result in a
change in the majority ownership of the Company (whether as a result of the
sale of outstanding stock or the issuance of new stock, other than in a public
offering registered under the Securities Act) (each of [a], [b] and [c] being
referred to herein as an "Acceleration Event"), the Company may, at its option,
notify the Optionee of such proposed Acceleration Event and require the
Optionee to elect, within 5 days after such notice, to either exercise the
Option (which exercise, if such Option is not then vested pursuant to Section
3, shall be made contingent upon the occurrence of a Vesting Event which is
also an Acceleration Event) or allow it to expire upon the closing of the
Acceleration Event. If the Optionee does not elect to exercise any portion of
the Option within that 5-day period, the unexercised portion of the Option
shall automatically expire upon such closing. If the Optionee elects to
exercise the Option within that 5-day period, in whole or in part, the Optionee
shall deliver to the Company all funds and documents required by such notice or
this Agreement to exercise such Option and the Company shall hold such funds
and documents and the certificate representing the shares issuable upon such
exercise until such closing and shall then deposit and collect the payment
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and forward the certificate (or such other securities or property as the
Optionee may have become entitled to as a result of owning such shares on the
closing) to the Optionee (or, in the case of an Acceleration Event which
involves the acquisition or conversion of the outstanding capital stock of the
Company, to the acquiror of such stock). If the Acceleration Event is not
consummated for any reason, then [a] such exercise shall be of no force or
effect, [b] no acceleration of the vesting of the Optionee's right to acquire
the Option Shares shall be deemed to have occurred, [c] the unexercised portion
of the Option shall not expire and [d] the Company shall return to the Optionee
such funds and documents delivered to it by the Optionee in connection with
such exercise and shall cancel the related certificate. The notice originally
given to the Optionee of a proposed Acceleration Event shall describe the
proposal generally. No subsequent change in the proposal shall require a new
notice or extend or revive the 5-day exercise period.
15. SHAREHOLDER/EMPLOYEE RIGHTS. The Optionee will have the rights of a
shareholder with respect to any Shares subject to the Option only after such
Shares are issued to such person following exercise of the Option. Nothing in
this Agreement confers on the Optionee any right to continue in the employ of
the Company or any Subsidiary or interferes in any way with the right of the
Company or any Subsidiary at any time to terminate or modify the terms or
conditions of the Optionee's employment.
16. COMMUNITY PROPERTY MATTERS. If the Optionee, on or after the Grant Date,
resides in a state or other jurisdiction the laws of which determine the
interests of spouses in property on a "community property" or similar basis,
the grant of the Option and the Optionee's rights hereunder shall not be
effective unless and until the Optionee's spouse executes and delivers a
counterpart to the signature page hereto to the Company. The Optionee's spouse
shall be bound by the terms and conditions of this Agreement, including,
without limitation, those set forth in Sections 5 through 17.
17. TAX MATTERS.
[a] Tax Status. The Option granted under this Agreement is for nonqualified
stock options (that is, options that do not qualify as incentive stock
options under the Internal Revenue Code of 1986, as amended (the
"Code"). The Optionee is urged to consult with his or her own tax
advisors with respect to the federal and state income taxation of the
grant, exercise and disposition of stock pursuant to the Option.
[b] Section 83(b) Election. Whenever property is transferred to a taxpayer
in connection with performance of services, and such property is subject
to a substantial risk of forfeiture (as that term is defined under
Section 83 of the Code and applicable Treasury Regulations), the
taxpayer may elect under Section 83(b) of the Code to include in gross
income (as compensation) the excess, if any, of the fair market value of
such property over the purchase price. If this Section 83(b) election
is made, no compensation income is subsequently recognized when the risk
of forfeiture lapses. If the Optionee makes a Section 83(b) election
he or she shall give timely notice to the Company of the statement
required by the Treasury Regulations under Section 83 of the Code.
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[c] Withholding. Whenever compensation income is recognized by the Optionee
with respect to the Option, the Company may require (as a condition of
Option exercise) the Optionee to make a withholding tax payment to the
Company. The amount of such payment shall equal the amount of federal
and state income tax that the Company or any Subsidiary is required to
withhold with respect to the issuance of such stock. To the extent the
required withholding tax payment is not timely made by the Optionee, the
Company or any Subsidiary may either withhold such payment from the
Optionee's cash compensation or make such other arrangements as the
Board determines.
[d] Interpretation. This Agreement, as well as all questions arising
thereunder, shall be interpreted and answered in the manner consistent
with the Code and applicable Treasury Regulations relating to
nonqualified stock options.
18. GENERAL PROVISIONS.
[a] Capital Changes. The number of shares and purchase price of the
Optioned Shares subject to the Option shall not change in the event of
any change to the shares of Stock or to any other class or series of
capital stock of the Company or any rights related thereto, whether by
reason of recapitalization, change in conversion rates, stock dividend,
stock split, combination of shares, exchange of shares, change in
corporate structure or otherwise, except that appropriate adjustments
shall be made by the Board in the number of shares and purchase price of
the Optioned Shares subject to the Option [i] prior to the first
Qualified Public Offering for any stock dividend, stock split or similar
transaction, as determined by the Board, declared or made with respect
to all shares of capital stock of the Company prior to, but in
connection with, such Qualified Public Offering, as determined by the
Board, and [ii] after the first Qualified Public Offering for any stock
dividend, stock split or similar transaction, as determined by the
Board. If any of the foregoing adjustments shall result in a fractional
share, the fraction shall be disregarded, and the Company shall have no
obligation to make any cash or other payment with respect to such a
fractional share.
[b] Leave of Absence. For purposes of this Agreement, employment of the
Optionee shall be treated as continuing intact while such person is on
sick leave, military leave or other bona fide leave of absence if the
period of such leave does not exceed ninety days. If such person's
leave exceeds ninety days, employment shall be treated as terminated for
purposes of this Agreement on the ninety-first day of such leave unless
such person's right of continued employment is guaranteed either by
statute or contract.
[c] Delivery. Delivery of any notice or document shall occur upon actual
delivery to the recipient (including receipt of telecopy or facsimile
transmission), and shall be deemed delivered the third day following
mailing by U.S. certified mail, postage prepaid, return receipt
requested, addressed to the recipient's then current mailing address.
Any corporate officer or other authorized agent may receipt for any
notice or document on behalf of the Company.
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[d] Remedies. Each of the parties to this Agreement will be entitled to
enforce its rights under this Agreement specifically, to recover damages
by reason of any breach of the provisions of this Agreement and to
exercise all other rights existing in its favor. The parties hereto
agree and acknowledge that money damages would not be an adequate remedy
for any breach of the provisions of this Agreement by the Optionee or
any Permitted Transferee, and the Company may in its sole discretion
apply to any court of law or equity of competent jurisdiction for
specific performance and/or injunctive relief in order to enforce or
prevent any such breach of this Agreement, including, without
limitation, a breach of any provisions of the transfer restriction
contained in Section 7
[e] Actions of Board. Any determination by the Board as to any question
with respect to this Agreement will be final and binding on the
Optionee. All actions taken and all interpretations and determinations
made by the Board in good faith shall be final and binding upon the
Optionee, the Company and all other interested persons. In addition to
any other rights of indemnification, each Board member shall be
indemnified by the Company against reasonable expenses (including
attorneys' fees) actually and necessarily incurred in connection with
the defense of any action, suit or proceeding (or in connection with any
appeal) to which such person may be a party by reason of an action
taken, or any failure to act, in connection with this Agreement and the
Stock Option granted under it. This indemnification shall further
extend to all amounts paid by any Board member either in a settlement
approved by independent legal counsel selected by the Board or pursuant
to a judgment in any such action, suit or proceeding, provided that the
Board member acted in good faith and in a manner he or she reasonably
believed to be in the best interests of the Company. Any action taken
by the Board under this Agreement may be made without notice or meeting
of the Board in a writing signed by all members of the Board.
[f] Subsidiary. Any reference to a Subsidiary means any corporation in
which the Company owns at least 80% of the total voting power and value
of its stock.
[g] Amendment. This Agreement may be amended only by a written instrument
signed by both parties.
[h] Binding Effect. This Agreement is binding upon, and inures to the
benefit of, the parties and their respective heirs, legal
representatives and permitted successors and assigns.
[i] Entire Agreement. This Agreement contains the entire agreement between
the parties with respect to its subject matter, and it supersedes all
prior written and oral agreements, including, without limitation, the
Letter Agreement.
[j] No Waiver. No waiver of any default under this Agreement will be
considered valid unless in writing, and no such waiver will be deemed a
waiver of any subsequent default of the same or similar nature.
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[k] Indemnification. Each party hereby indemnifies and agrees to hold
harmless the other from any liability, cost or expense arising from or
related to any act or failure to act of such party which is in violation
of this Agreement.
[l] Counsel. Each party has had the opportunity to obtain separate counsel
of choice. The Company expressly disclaims that it is giving any tax
advice to the Optionee with respect to the grant or exercise of the
Option or to any disposition of the Optioned Shares or any Shares. The
Optionee acknowledges and accepts this disclaimer.
[m] Originals. This Agreement is signed in two original documents, one to
be delivered to each party.
[n] Governing Law. This Agreement will be construed and enforced in
accordance with the laws of the State of Colorado.
[o] 30-Day Requirement. This Agreement will automatically terminate if the
Optionee fails to deliver an original of this Agreement to the Company
within thirty days after it has been delivered to the Optionee (unless
the Board otherwise determines).
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The Company and the Optionee have signed this Agreement effective as of the
date first above written, notwithstanding the actual date of signing.
RENTX INDUSTRIES, INC.
3/12/97 By: /s/ [ILLEGIBLE]
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Date
Title: President & CEO
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OPTIONEE:
3/12/97 /s/ [ILLEGIBLE]
---------------------------- -------------------------------------
Date
---------------------------- -------------------------------------
Date Signature of Optionee's spouse (if
Section 17 is applicable)
---------------------------- -------------------------------------
Date Signature of Permitted Transferee
(pursuant to Section 8)
-11-
