EMPLOYEE STOCK OPTION AGREEMENT
Exhibit 10.3
This Employee Stock Option Agreement, dated as of December 19, 2006, between Atlas Copco North
America Inc. (to be renamed RSC Holdings Inc.), a Delaware corporation, and the Employee whose name
appears on the signature page hereof, is being entered into pursuant to the Atlas Copco North
America Inc. (to be renamed RSC Holdings Inc.) Stock Incentive Plan. The meaning of capitalized
terms may be found in Section 7.
The Company and the Employee hereby agree as follows:
held by the Employee shall immediately vest as of the effective date of such Special
Termination.
(A) none of the Performance Options eligible to vest with
respect to such Fiscal Year will vest if the Company has achieved
less than 80% the applicable Annual Performance Target; and
(B) between 50% and 100% of the Performance Options eligible
to vest with respect to such Fiscal Year (i.e., 10-20%) will vest
if the Company achieves at least 80% of the applicable Annual
Performance Target, with 50% vesting at 80% achievement, 100%
vesting at 100% (or higher) achievement and ratable vesting of
between 50 and 100% for achievement between 80 and 100%.
(ii) Catch-Up Vesting Opportunity. If the Annual Performance
Target is not achieved for a particular Fiscal Year (a “Missed Year”),
the amount by which the achievement fell short of such Annual
Performance Target for such Fiscal Year (the “Shortfall”) shall be
carried forward and the Performance Options that do not vest pursuant
to Section 2(b)(i) with respect to such Missed Year (the “Carryforward
Options”) shall, subject to the continuous employment of the Employee
with the Company until the applicable vesting date, be eligible for
vesting based on the achievement of the combined Annual Performance
Targets for the two Fiscal Years ending immediately after the Missed
Year (the “Cumulative Target”), as follows:
(A) none of the Carryforward Options eligible to vest with
respect to the two Fiscal Years
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ending immediately after a Missed Year will vest if the Company
has achieved 100% or less of the applicable Cumulative Target;
and
(B) between 0% and 100% of the Carryforward Options eligible
to vest with respect to such two Fiscal Years ending immediately
after a Missed Year will vest if the Company achieves more than
100% of the applicable Cumulative Targets, with 100% vesting if
the Company achieves an amount equal to or greater than the
Shortfall and ratable vesting of between 0% and 100% for
achievement between 0% and 100% of the Shortfall.
YEAR | MINIMUM ROI | TARGET ROI | ||||||
2007 |
1.75x | 2x | ||||||
2008 |
2.25x | 2.5x |
0
XXXX | XXXXXXX XXX | XXXXXX XXX | ||||||
0000 |
2.75x | 3x | ||||||
2010 |
3.25x | 3.5x | ||||||
2011 |
3.75x | 4x |
(c) Vesting Date. The applicable vesting date for a Fiscal Year’s
Performance Options or, if applicable, Carryforward Options, shall be the
date the Audit Committee of the Company’s Board of Directors approves the
Company’s annual audited financial statements for the applicable Fiscal
Year(s).
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terminated for Cause, all Options (whether or not then vested or
exercisable) shall automatically terminate immediately upon such
termination. All vested Options held by the Employee following the
effective date of a termination of employment shall remain exercisable
until the first to occur of (i) the 90th day following the effective date
of the Employee’s termination of employment (determined without regard to
any deemed or express statutory or contractual notice period), (ii) the
180th day in the case of a Special Termination or a retirement from active
service on or after the Employee reaches normal retirement age, (iii) the
Normal Termination Date or (iv) the cancellation of the Options pursuant to
Section 6(a), and if not exercised within such period the Options shall
automatically terminate upon the expiration of such period.
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satisfy the requirements of the Securities Act, applicable state or
non-U.S. securities laws or any other law.
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“Agreement” means this Employee Stock Option Agreement, as amended
from time to time in accordance with the terms hereof.
“Annual Performance Target” means, with respect to each Fiscal Year,
the EBITDA and total debt-to-EBITDA targets for such Fiscal Year as set by
the Compensation Committee; provided, that if the Company consummates a
significant acquisition, disposition or other corporate transaction that,
in the judgment of the Compensation Committee, would
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reasonably be expected to impact the consolidated earnings of the Company,
the Annual Performance Target for the relevant Fiscal Years may be
appropriately adjusted by the Compensation Committee to reflect such
transaction or series of transactions. The Compensation Committee shall
establish the Annual Performance Target for each Fiscal Year within 30 days
after the beginning of each such Fiscal Year.
“Carryforward Options” has the meaning given in Section 2(b)(ii).
“Code” means the United States Internal Revenue Code of 1986, as
amended, and any successor thereto.
“Company” means Atlas Copco North America Inc. (to be renamed RSC
Holdings Inc.), provided that for purposes of determining the status of
Employee’s employment with the “Company,” such term shall include the
Company and its Subsidiaries.
“Cumulative Target” has the meaning given in Section 2(b)(ii).
“Employee” means the grantee of the Options, whose name is set forth
on the signature page of this Agreement; provided that for purposes of
Section 4 and Section 8, following such person’s death “Employee” shall be
deemed to include such person’s beneficiary or estate and following such
Person’s Disability, “Employee” shall be deemed to include such person’s
legal representative.
“Employee Stock Subscription Agreement” means a “Stock Subscription
Agreement” as defined in the Plan.
“Exercise Date” has the meaning given in Section 4(a).
“Exercise Price” has the meaning given in Section 4(a).
“Exercise Shares” has the meaning given in Section 4(a).
“Fiscal Year” means a fiscal year of the Company.
“Grant Date” means the date hereof, which is the date on which the
Options are granted to the Employee.
“Missed Year” has the meaning given in Section 2(b)(ii).
“Normal Termination Date” has the meaning given in Section 3(a).
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“Option” means the right granted to the Employee hereunder to purchase
one Common Share for a purchase price equal to the Option Price subject to
the terms of this Agreement and the Plan.
“Option Price” means, with respect to each Common Share covered by an
Option, the purchase price specified in Section 1(b) for which the Employee
may purchase such Common Share upon exercise of an Option.
“Performance Options” means those Options that are subject to the
provisions of Section 2(b) hereof providing for the vesting of such Options
on the basis of the financial performance of the Company and the continued
employment of the Employee. The number of Performance Options granted to
the Employee pursuant to this Agreement is specified on the signature page
hereof under the heading “Performance Options.”
“Plan” means the Atlas Copco North America Inc. (to be renamed RSC
Holdings Inc.) Stock Incentive Plan.
“ROI” has the meaning given in Section 2(b)(iii).
“Securities Act” means the United States Securities Act of 1933, as
amended, or any successor statute, and the rules and regulations thereunder
that are in effect at the time, and any reference to a particular section
thereof shall include a reference to the corresponding section, if any, of
such successor statute, and the rules and regulations.
“Service Options” means those Options that are subject to the
provisions of Section 2(a) hereof providing for the vesting of such Options
on the basis of the Employee’s completion of service. The number of Service
Options granted to the Employee pursuant to this Agreement is specified on
the signature page hereof under the heading “Service Options.”
“Shortfall” has the meaning given in Section 2(b)(ii).
“Special Termination” means a termination of the Employee’s employment
as a result of his or her death or Disability.
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may arise in connection with the grant, vesting, exercise or purchase of
the Options.
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writing and shall be deemed to have been given if delivered personally or
sent by certified or express mail, return receipt requested, postage
prepaid, or by any recognized international equivalent of such delivery, to
the Company or the Employee, as the case may be, at the following addresses
or to such other address as the Company or the Employee, as the case may
be, shall specify by notice to the other:
(i) if to the Company, to it at:
Atlas Copco North America Inc. (to be renamed RSC Holdings Inc.)
c/o Ripplewood Holdings, L.L.C.
Xxx Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxxxxx X. Xxxxxxxxx, Esq.
(000) 000-0000 (telecopier)
(000) 000-0000 (telephone)
xxxxxxxxxx@xxxxxxxxxx.xxx (email)
c/o Ripplewood Holdings, L.L.C.
Xxx Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxxxxx X. Xxxxxxxxx, Esq.
(000) 000-0000 (telecopier)
(000) 000-0000 (telephone)
xxxxxxxxxx@xxxxxxxxxx.xxx (email)
Atlas Copco North America Inc. (to be renamed RSC Holdings Inc.)
c/o Oak Hill Capital Management, L.L.C.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxx, Esq.
(000) 000-0000 (telecopier)
(000) 000-0000 (telephone)
xxxxxxx@xxxxxxxxxxxxxx.xxx
c/o Oak Hill Capital Management, L.L.C.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxx, Esq.
(000) 000-0000 (telecopier)
(000) 000-0000 (telephone)
xxxxxxx@xxxxxxxxxxxxxx.xxx
(ii) if to the Employee, to the Employee at his or her most
recent address as shown on the books and records of the Company or
Subsidiary employing the Employee; and
copies of any notice or other communication given under this Agreement
shall also be given to:
Debevoise & Xxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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Attn: Xxxxxxx X. Xxxxx, Esq.
(000) 000-0000 (telecopier)
(000) 000-0000 (telephone)
xxxxxx@xxxxxxxxx.xxx (email)
(000) 000-0000 (telecopier)
(000) 000-0000 (telephone)
xxxxxx@xxxxxxxxx.xxx (email)
All such notices and communications shall be deemed to have been received on the
date of delivery if delivered personally or on the third business day after the
mailing thereof.
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(i) Assignability. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable by the Company or the Employee without the prior written consent
of the other party.
(j) Applicable Law. This Agreement shall be governed by and construed
in accordance with the law of the State of Delaware regardless of the
application of rules of conflict of law that would apply the laws of any
other jurisdiction.
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ATLAS COPCO NORTH AMERICA INC. (to be renamed RSC Holdings Inc.) |
||||||
By: | ||||||
Name: Xxxxxx Xxxxxxxxx Title: Senior Vice President |
||||||
THE EMPLOYEE: | ||||||
(Name) | ||||||
By: | ||||||
Name: | Xxxxxx Xxxxxxxxx | |||||
Address of the Employee: | ||||||
(Address) |
SERVICE OPTIONS | PERFORMANCE OPTIONS | |||||
Total Number of Shares
|
Total Number of Shares | Option Price: | ||||
for the Purchase of Which
Service Options have been Granted:
|
for the Purchase of Which Performance Options have been Granted: | |||||
(Service_Options)
|
(Performance_Options) | $ | 244.25 |
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