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XXXXXXX RENTCORP
Registration Statement on Form S-8
EXHIBIT 4.3
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XXXXXXX RENTCORP
1998 STOCK OPTION PLAN
DIRECTOR'S NON-QUALIFIED STOCK OPTION AGREEMENT
This Option Agreement is being entered into as of ___________, 1998, by
and between XxXxxxx RentCorp, a California corporation (hereinafter "XXXXXXX")
and XXXX XXX (hereinafter "DOE"). In accordance with that certain XxXxxxx
RentCorp 1998 Stock Option Plan (the "PLAN"), the Board of Directors of XXXXXXX
granted an option on __________, 1998 to DOE to purchase shares of its Common
Stock, as evidenced by this Agreement, subject to the following terms:
1. NUMBER OF SHARES AND PRICE. XXXXXXX hereby evidences its grant to
DOE of the right and option (hereinafter the "OPTION"), on the terms and
conditions set forth herein, to purchase all or any part of an aggregate of ____
Thousand (________) shares of XXXXXXX'x Common Stock (hereinafter the "OPTION
SHARES"), at a purchase price of _______ Dollars and ______ Cents ($_____) per
share.
2. OPTION SUBJECT TO PLAN. This OPTION is subject to, and XXXXXXX and
XXX agree to be bound by, all of the terms and conditions of the PLAN, which is
made a part hereof and incorporated herein by this reference. DOE acknowledges
receipt of the copy of the PLAN. The rights of DOE under this OPTION are subject
to modification and termination in certain events as provided in the PLAN,
including, without limitation, Section 3 thereof.
3. NATURE OF OPTION; TAX CONSEQUENCES. This OPTION is not intended to
be an "incentive stock option" as that term is defined under Section 422 of the
Internal Revenue Code. XXX should consult with his own tax advisor with regard
to the income tax consequences to him of exercising this OPTION.
4. TERMS OF EXERCISE.
4.1 Option Period. Notwithstanding anything to the contrary
in this Agreement, unless this OPTION shall have expired earlier in accordance
with Section 5 below, this OPTION shall expire ten (10) years after the date of
grant specified above at 5:00 p.m. Livermore, California local time on ________,
2008 (hereinafter the "OPTION PERIOD").
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4.2 Installments. This OPTION shall be exercisable in
installments as to___________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
OPTION SHARES entitled to be purchased, but not purchased in any period, may be
purchased at any subsequent time within the OPTION PERIOD. The vesting of this
OPTION (i.e., the rate at which the installments become exercisable) may be
accelerated under certain circumstances as described in Section 6.2 below.
4.3 How to Exercise. The exercise of this OPTION shall be
effective only upon the delivery to XXXXXXX of a written notice of intention to
exercise the OPTION in substantially the form attached hereto as Exhibit A
specifying the number of shares then to be purchased under the OPTION and the
date of such purchase (which, unless XXXXXXX otherwise consents, shall be at not
more than thirty (30) days after the delivery of such notice). Delivery of a
certificate, or certificates, representing said shares shall be made only upon
the tender of payment of the purchase price of the number of shares specified in
such notice on said date.
4.4 Payment of Exercise Price. Payment of the purchase price
for the shares purchased upon exercise of the OPTION shall be made in cash or by
check; provided that, subject to the discretion of the Board of Directors of
XXXXXXX, and upon receipt of all regulatory approvals, all or part of the
payment may be made by the delivery of certificates evidencing Common Stock of
XXXXXXX already owned by DOE with an aggregate "fair market value" (determined
as specified in the PLAN) equal to the portion of the purchase price being paid
thereby.
5. EARLY TERMINATION OF THE OPTION PERIOD.
5.1 Termination of Directorship. Subject to Sections 5.2 and
5.3 below, if DOE ceases to be a director of XXXXXXX for any reason, DOE may
exercise this OPTION only to the extent DOE was entitled to exercise it on the
date he ceased to be a director (subject to Section 6.2 below). If XXX wants to
exercise this OPTION, then he must do so before the earlier of (i) three (3)
months after the date he ceases to be a director of XXXXXXX or (ii) the normal
expiration of the OPTION PERIOD (as specified in Section 4.1 above); and upon
the expiration of the earlier of such two periods, this OPTION shall terminate.
5.2 Disability. Subject to Section 5.3 below, if DOE ceases to
be a director of XXXXXXX as a result of DOE's disability, DOE may exercise this
OPTION if and only to the extent
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DOE was entitled to exercise it at the date he ceased to be a director, but only
during the OPTION PERIOD and within twelve (12) months after the date DOE ceases
to be a director of XXXXXXX. Upon the expiration of the earlier of such twelve
(12) month period or the normal OPTION PERIOD, this OPTION shall terminate. For
purposes of this OPTION, an individual is disabled if he or she is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than twelve (12) months.
5.3 Death. In the event of DOE's death while a director of
XXXXXXX and during the OPTION PERIOD, the unexercised portion of this OPTION may
be exercised at any time during the OPTION PERIOD but not more than twelve (12)
months after the date of DOE's death, by the person or persons to whom the
rights to exercise this OPTION shall pass by will or by the applicable laws of
descent and distribution, but only to the extent that the right to exercise had
accrued and was still exercisable as of the date of DOE's death. Upon the
expiration of the earlier of such twelve (12) month period or the normal OPTION
PERIOD, this OPTION shall terminate.
5.4 Corporate Dissolution. A dissolution or liquidation of
XXXXXXX shall cause this OPTION to terminate; provided that DOE shall, in such
event, be given at least thirty (30) days prior written notice of such event
(which notice, if mailed, shall be deemed given at the time of mailing) and
shall have the right until such event to exercise this OPTION to the extent then
exercisable; provided further that the Board of Directors may, in its
discretion, in the event of any such dissolution or liquidation, accelerate the
accrual of exercise rights in such manner as the Board of Directors shall deem
appropriate.
6. RECAPITALIZATION; CHANGE IN CONTROL.
6.1 Recapitalization. Subject to any action by the
stockholders required by law, the number of shares of Common Stock covered by
this OPTION and the price per share thereof shall be proportionately adjusted
for any increase or decrease in the number of issued shares of Common Stock of
XXXXXXX resulting from a subdivision or consolidation of shares or the payment
of a stock dividend (but only on the Common Stock) or any other increase in the
number of such shares effected without receipt of consideration by XXXXXXX. (For
this purpose, issuances of shares upon conversion of convertible securities
shall be deemed an issuance for which XXXXXXX receives consideration.)
6.2 Change in Control. In the event of a "Change in Control,"
the accrual of exercise rights hereunder shall accelerate upon such "Change in
Control" such that this OPTION shall
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be fully vested and all OPTION SHARES shall be exercisable. For purposes of this
section, a "Change in Control" shall be deemed to have occurred hereafter if:
6.2.1 Any person (or entity, or group or persons or
entities), other than (i) a trustee or other fiduciary holding
securities under an employee benefit plan of XXXXXXX or (ii) a
corporation owned directly or indirectly by the stockholders of XXXXXXX
in substantially the same proportions as their ownership of stock of
XXXXXXX or (iii) a group which includes Xxxxxx X. XxXxxxx or his heirs,
becomes the beneficial owner, directly or indirectly, of securities of
XXXXXXX representing 30% or more of the total voting power represented
by XXXXXXX'x then outstanding voting securities; or
6.2.2 During any period of two consecutive years
after the date of this OPTION (or if two years have not elapsed since
the date of this OPTION, such shorter period), (i) individuals who at
the beginning of such period constitute the Board, plus (ii) any new
director whose election by the Board or nomination for election by
XXXXXXX'x stockholders was approved by a vote of at least two-thirds
(2/3) of the directors then still in office who either were directors
at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute
a majority thereof; or
6.2.3 XXXXXXX is a party to a merger or consolidation
with another corporation, other than a merger or consolidation which
results in the voting securities of XXXXXXX outstanding immediately
prior thereto continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity) a
majority of the total voting power of the surviving entity outstanding
immediately after such merger or consolidation; or
6.2.4 XxXxxxx sells or otherwise disposes (in one
transaction or a series of transactions) of all or substantially all of
its assets, other than to a corporation owned directly or indirectly by
the stockholders of XXXXXXX in substantially the same proportions as
their ownership of stock of XXXXXXX.
7. INVESTMENT INTENT.
7.1 Doe's Representations. As a condition to accepting this
OPTION, and as a condition to its exercise, DOE makes the following
representations and agreements, and represents,
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warrants and agrees that he will reaffirm such representations and agreements to
be true and in full force and effect at and as of the time of any exercise of
this OPTION:
7.1.1 DOE has, by reason of DOE's business or
financial experience, the capacity to evaluate the merits and risks of
an investment in XXXXXXX and to protect his interest in connection with
the issuance of this OPTION and the purchase of any OPTION SHARES.
7.1.2 DOE is aware of XXXXXXX'x business affairs and
financial condition and has had access to such information about
XXXXXXX as XXX has deemed necessary or desirable to reach an informed
and knowledgeable decision to acquire this OPTION and the OPTION
SHARES. DOE will purchase the OPTION SHARES for investment for his own
account only and not with a view to, or for resale in connection with,
any "distribution" thereof within the meaning of the Securities Act of
1933 ("SECURITIES ACT").
7.1.3 DOE understands that this OPTION and the OPTION
SHARES have not been registered under the SECURITIES ACT by reason of a
specific exemption therefrom, which exemption depends upon, among other
things, the bona fide nature of his investment intent as expressed
herein. In this connection, DOE understands that, in the view of the
Securities and Exchange Commission ("COMMISSION"), the statutory basis
for such exemption may not be present if DOE's representation meant
that his present intention was to hold the OPTION SHARES for a minimum
capital gains period under the tax statutes, for a deferred sale, for a
market rise, for a sale if the market does not rise, or for a year or
any other fixed period in the future.
7.1.4 DOE further acknowledges and agrees that the
OPTION SHARES must be held indefinitely unless they are subsequently
registered under the SECURITIES ACT or an exemption from such
registration is available. DOE further acknowledges and understands
that XXXXXXX is under no obligation to register the OPTION SHARES.
7.1.5 DOE is aware of the adoption of Rule 144 by the
COMMISSION, promulgated under the SECURITIES ACT, which (1) after one
year from the date the securities have been purchased and fully paid
for, permits limited public resale of securities acquired in a
non-public offering subject to the satisfaction of certain conditions,
and (ii) after two years from the date the securities have been
purchased and fully paid for, permits persons who are not affiliates of
the issuer to sell an unlimited number of securities without
satisfaction of such conditions.
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7.1.6 DOE further acknowledges and understands that
XXXXXXX may not be satisfying the current public information
requirement of Rule 144 at the time he wishes to sell the OPTION
SHARES, and, if so, DOE would be precluded from selling the OPTION
SHARES under Rule 144 even if the one or two-year minimum holding
periods had been satisfied.
7.1.7 DOE further acknowledges that in the event all
of the requirements of Rule 144 are not met, compliance with Regulation
A or some other exemption from registration will be required, and that
although Rule 144 is not exclusive, the Staff of the COMMISSION has
expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and other than pursuant
to Rule 144 will have a substantial burden of proof in establishing
that an exemption from registration is available for such offers or
sales and that such persons and the brokers who participate in the
transactions do so at their own risk.
7.2 Legends. XXXXXXX may place on the certificates evincing
the OPTION SHARES appropriate legends referring to the restrictions on transfer
set forth in Section 7.1 above and as may be required by the California
Commissioner of Corporations. XXX understands that all certificates for OPTION
SHARES may bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR THE
PURCHASER'S OWN ACCOUNT ONLY AND NOT WITH A VIEW TO, OR FOR RESALE IN
CONNECTION WITH, ANY DISTRIBUTION THEREOF. NO SALE OR DISPOSITION OF
THESE SHARES MAY BE EFFECTED WITHOUT (1) REGISTRATION OF SUCH SALE OR
DISPOSITION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND (2)
QUALIFICATION OF SUCH SALE OR DISPOSITION UNDER THE CALIFORNIA
CORPORATE SECURITIES LAW OF 1968, AS AMENDED, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION AND QUALIFICATION
ARE NOT REQUIRED UNDER THOSE ACTS.
8. RIGHTS NOT CONFERRED. This OPTION shall not confer upon DOE any
right with respect to continuation of his position as a director of XXXXXXX.
9. NON-TRANSFERABLE. The OPTION evinced by this Agreement is not
transferable otherwise than by will or by the laws of descent and distribution
and shall be exercisable during DOE's lifetime only by DOE or DOE's duly
appointed guardian or personal representative. Subject to the foregoing,
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this Agreement shall be binding upon and shall inure to the benefit of any
successors or assigns of XXXXXXX and, to the extent herein provided, shall be
binding upon and inure to the benefit of DOE's successors.
XXXXXXX RENTCORP
By
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Xxxxxx X. XxXxxxx, Chief Executive Officer
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XXXX XXX
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EXHIBIT A
To: McGRATH RENTCORP
0000 Xxx Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Chief Financial Officer
Subject: Notice of Intention to Exercise Stock Option
With respect to the stock option granted to Xxxx Xxx on ____________,
1998 to purchase an aggregate of ___________Thousand (_______) shares of
XXXXXXX'x Common Stock as evinced by the Director's Non-Qualified Incentive
Stock Option Agreement dated ____________, 1998, this is official notice that
the undersigned intends to exercise such option to purchase shares as follows:
Number of Shares: _______________________
Date of Purchase: _______________________
Mode of Payment: _______________________
In connection with such exercise, the undersigned hereby reaffirms that
the representations and agreements set forth in Section 7.1 of the Agreement
evincing such option are now and will be at and as of the time of such exercise
true and in full force and effect with respect to the shares purchased.
The shares should be issued as follows:
Name: _______________________________________
Address: _______________________________________
_______________________________________
_______________________________________
Social Security Number:_____________________
Signed:_______________________________
Date: _______________________
