EXHIBIT 4.2
EMPLOYEE STOCK OPTION AGREEMENT
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Exercise Price Per Share: $______ Vesting Schedule:
Number of Shares ("Shares"): ______ Shares on ________, ____
______ Shares on ________, ____
_________________________________ ______ Shares on ________, ____
Award Date: ____________ ______ Shares on ________, ____
______ Shares on ________, ____
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U.S. Rentals, Inc., a Delaware corporation (the "CORPORATION") and
__________________________________________, an individual (the "PARTICIPANT"),
enter into this [ ] NONQUALIFIED STOCK OPTION AGREEMENT / [ ] INCENTIVE
STOCK OPTION AGREEMENT (consisting of the attached ____ pages and ____ Exhibits,
this "AGREEMENT") as of _______________, ____. Participant acknowledges receipt
of the 1997 Performance Award Plan (the "PLAN") pursuant to which this Agreement
has been executed.
U.S. RENTALS, INC. PARTICIPANT
By:______________________________ By:_______________________________
Name:________________________ Name:___________________________
(printed) (printed)
Title:_______________________ Title:__________________________
Social Security Number:_________
CONSENT OF SPOUSE
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In consideration of the execution of the foregoing Nonstatutory Stock
Option Agreement by U.S. Rentals, Inc., I, _________________ the spouse of the
Participant, join with my spouse in executing this Agreement and agree to be
bound by all of the terms and provisions of this Agreement and of the Plan.
Date: _________________ __________________________________
Signature of Spouse
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1 -- DEFINED TERMS
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Capitalized terms have the meanings set forth in the Plan.
2 -- GRANT OF OPTION
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This Agreement evidences the Corporation's grant to the Participant of the
right and option to purchase, on the terms and conditions set forth in this
Agreement and in the Plan, all or any part of the Shares listed on page one at
the price per share set forth on page one (the "OPTION"), exercisable from time
to time, prior to the close of business on the day before the tenth anniversary
of the Award Date (the "EXPIRATION DATE"). Such price equals the Fair Market
Value of the Corporation's Common Stock as of the Award Date. If the Incentive
Stock Option box is checked on page one, it is the intent of the Corporation
that this Option constitute an incentive stock option within the meaning of
Section 422 of the Code.
3 -- CONSIDERATION TO CORPORATION
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In consideration of the granting of this Option by the Corporation, the
Participant agrees to render faithful and efficient services to the Corporation,
with such duties and responsibilities as the Corporation shall from time to time
prescribe. Nothing contained in this Agreement or in any other documents
related to the Plan shall confer upon the Participant any right to continue
performing services for the Corporation or constitute any contract of
employment, or interfere in any way with the right of the Corporation to reduce
such person's compensation or other benefits or to terminate the services of the
Participant, with or without Cause.
4 -- EXERCISABILITY OF OPTION
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Subject to the Plan, this Option will become exercisable in cumulative
installments at the times set forth on page one.
5 -- CONTINUING RIGHT TO PURCHASE CUMULATIVELY
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If the Participant does not in any year purchase all or any part of the
Shares to which the Participant is entitled, then the Participant has the right
cumulatively thereafter to purchase any Shares not so purchased and such right
will continue until this Option terminates or expires. This Option will only be
exercisable in respect of whole Shares, and fractional Share interests shall be
disregarded. At least 100 Shares must be purchased at one time unless the
number purchased is the total number at the time available for purchase under
this Option.
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6 -- CHANGE IN CONTROL EVENT
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Notwithstanding any provisions in this Agreement to the contrary, unless
prior to a Change in Control Event the Committee determines that, upon its
occurrence, no benefits will accelerate or determines that only certain or
limited benefits will accelerate and the extent to which they will accelerate,
and/or establishes a different time for such acceleration, then upon the
occurrence of a Change in Control Event each outstanding Option granted to the
Participant will become exercisable, and the total number of shares subject to
the Option will be purchasable immediately.
7 -- METHOD OF EXERCISE OF OPTION
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Employee will exercise Option by delivering to the Assistant Secretary of
Corporation a written notice stating the number of Shares to be purchased
pursuant to this Option and accompanied by payment made in accordance with and
in a form permitted by the Plan for the full purchase price of the Shares to be
purchased, subject to such further limitations and rules or procedures as the
Board may from time to time establish as to any non-cash payment and as to the
tax withholding requirements of the Plan. In addition, the Participant (or the
Participant's Beneficiary or Personal Representative) must furnish any written
statements required by this Agreement or the Plan.
8 -- TERMINATION OF SERVICES
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This Option and all other rights hereunder, to the extent not exercised,
will terminate and become null and void upon the termination of Participant's
services for the Corporation, except that:
8.1 REASON OTHER THAN DEATH, TOTAL DISABILITY OR FOR CAUSE. If the Participant
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terminates for any reason other than death, Total Disability or "FOR CAUSE"
(as defined by the Committee), the Participant has 90 days after the date of
termination to exercise this Option to the extent this Option was
exercisable on the date of termination;
8.2 FOR CAUSE. If the Participant is terminated for Cause, this Option will
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lapse immediately upon the Participant's termination of services for the
Corporation;
8.3 TOTAL DISABILITY. If the Participant terminates as a result of a Total
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Disability, or if the Participant suffers a Total Disability within 90 days
of a termination of services under subsection 8.1 above, the Participant or
the Participant's Personal Representative, as the case may be, will have 12
months from the date of Total Disability (or, if earlier, termination of
services) to exercise this Option to the extent this Option was exercisable
on such date; or
8.4 DEATH. If the Participant dies while in the service of the Corporation, or
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within 90 days after a termination described in subsections 8.1 or 8.3, then
this Option maybe
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exercised within a period of 12 months after the Participant's date of death
(or, if earlier, the Participant's termination of services), by the
Participant's Beneficiary to the extent this Option was exercisable on the
date of the Participant's termination of services;
8.5 RETIREMENT. If the Participant terminates as a result of Retirement, the
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Participant, will have 12 months from the date of Retirement to exercise
this Option to the extent this Option was exercisable on such date; or
8.6 NO EXERCISE AFTER EXPIRATION DATE. Notwithstanding the foregoing, in no
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event may this Option be exercised by anyone under this Section or otherwise
after the Expiration Date.
8.7 TERMINATION FROM SUBSIDIARY; MILITARY SERVICE; SICK LEAVE. If the
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Participant is employed by an entity which ceases to be a Subsidiary, such
event shall be deemed for purposes of this Section 8 to be a termination of
employment described in subsection 8.5. Absence from work caused by
military service or authorized sick leave will not be considered as a
termination of employment for purposes of this Section.
9 -- TRANSFERABILITY OF OPTION
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Subject to the provisions of Section 8 above and of the Plan, the Option and
the rights and privileges conferred hereby are not transferable or assignable
and may not be offered, sold, pledged, hypothecated or otherwise disposed of in
any way (whether by operation of law or otherwise) and shall not be subject to
execution, attachment, garnishment, levy or similar process. Except as provided
by the Plan, the Option may be exercised only by (a) the Participant, (b) the
Participant's Personal Representative, if any, if the Participant has suffered a
Disability, (c) to the extent provided by Section 8, by the Participant's
transferees by will or under the laws of descent and distribution, or (d)
subject to Committee approval and any requirements imposed by the Committee,
persons related to the Participant. If the spouse of the Participant has
acquired a community property interest in the Option, the Participant or such
transferees may exercise it on behalf of the spouse of the Participant or such
spouse's successor in interest.
10 -- TERMINATION UNDER CERTAIN CIRCUMSTANCES
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Subject to Section 6.2.3 of the Plan, the Option will terminate to the
extent not previously exercised upon an event or transaction which the
Corporation does not survive.
11 -- ASSIGNMENTS
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This Agreement and all of the provisions hereof shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assignees. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned or transferred by either party without
the prior written consent of the other.
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12 -- NOTICES
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Any notice to be given under the terms of this Agreement must be in writing
and addressed to the Corporation at its principal office to the attention of the
Assistant Secretary, and to the Participant at the address given to the
Corporation for payroll purposes, or at such other address as either party may
hereafter designate in writing (which may be a facsimile). Notice will be
deemed to have been given and received when delivered to the address specified
by the party to receive the notice. Either party may, at any time by giving
five (5) days' prior written notice to the other, designate any other address in
substitution of the foregoing address.
13 -- PLAN
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This Option and all rights of the Participant under this Agreement are
subject to, and the Participant agrees to be bound by, all of the terms and
conditions of the provisions of the Plan, all of which are incorporated herein
by this reference. In the event of a conflict or inconsistency between the
terms and conditions of this Agreement and of the Plan, the terms and conditions
of the Plan will govern. Unless otherwise expressly provided in other sections
of this Agreement, provisions of the Plan that confer discretionary authority on
the Board do not (and must not be deemed to) create any rights in the
Participant unless such rights are expressly set forth herein or are otherwise
in the sole discretion of the Board so conferred by appropriate action of the
Board under the Plan after the date hereof.
14 -- INTERPRETATION
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If any claim is made by the Participant relating to any conflict, omission
or ambiguity in this Agreement, no presumption or burden of proof or persuasion
will be implied because this Agreement was prepared by or at the request of the
Corporation or its counsel. The Participant acknowledges that the Participant
has had the opportunity to consult with the Participant's own counsel prior to
the execution hereof.
15 -- AMENDMENTS
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Any amendments to this Agreement must be in writing and designated as an
amendment, and signed by both parties hereto.
16 -- COMPLIANCE WITH LAW
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No shares may be purchased by exercise of the Option and no shares shall be
issued and delivered to Participant pursuant to this Agreement unless and until
(a) a registration statement under the Securities Act of 1933 with respect to
the Common Stock issuable under the Plan has become effective with the
Securities and Exchange Commission, and (ii) any applicable requirements under
the securities laws of any state of the United States have been satisfied.
[END]
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