EXHIBIT 10.46
RESTRICTED STOCK AGREEMENT
THIS RESTRICTED STOCK AGREEMENT (the "Agreement") made effective as of
the 14th day of January, 1998, between Rental Service Corporation, a Delaware
corporation (the "Company" or the "Employer") and Martin R. Reid, an employee of
the Company (the "Employee").
WHEREAS, the Company has established the 1996 Equity Participation
Plan (the "Plan"); 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 Plan provides for the issuance of shares of Common Stock,
$.01 par value, subject to certain restrictions thereon (hereinafter referred to
as "Restricted Stock"); and
WHEREAS, the Compensation Committee of the Company's Board of
Directors (the "Committee"), appointed to administer the Plan, has determined
that it would be to the advantage and best interest of the Company and its
stockholders to issue the Restricted Stock provided for herein to Employee in
consideration of past and future services to the Employer and other good and
valuable consideration provided for herein;
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
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 meaning ascribed to such terms in the
Plan.
Section 1.1 - Board
"Board" shall mean the Board of Directors of the Company.
Section 1.2 - Code
"Code" shall mean the Internal Revenue Code of 1986, as amended.
Section 1.3 - Committee
"Committee" shall mean the Compensation Committee of the Board,
appointed as provided in the Plan.
Section 1.4 - Company Subsidiary
"Company 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 50
percent or more of the total combined voting power of all classes of stock in
one of the other corporations in such chain. "Company Subsidiary" shall also
mean any partnership in which the Company and/or any Company Subsidiary owns
more than 50 percent of the capital or profits interests.
Section 1.5 - Employment Agreement
"Employment Agreement" shall mean the employment agreement between
Company and Employee dated the same date as this Agreement.
Section 1.6 - Exchange Act
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
Section 1.7 - Restricted Stock
"Restricted Stock" shall mean Common Stock of the Company issued under
this Agreement and subject to the Restrictions imposed hereunder.
Section 1.8 - Restrictions
"Restrictions" shall mean the restrictions on sale or other transfer
set forth in Section 4.2 and 4.3(a) and the exposure to forfeiture or repurchase
set forth in Section 3.1.
Section 1.9 - Rule 16b-3
"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 1.10 - Secretary
"Secretary" shall mean the Secretary of the Company.
Section 1.11 - Securities Act
"Securities Act" shall mean the Securities Act of 1933, as amended.
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ARTICLE II
ISSUANCE OF RESTRICTED STOCK
Section 2.1 - Issuance of Restricted Stock
In consideration of Employee's past services to the Company and for
his agreement to remain in the employ of at least one of such entities and for
other good and valuable consideration, on the date hereof the Company
irrevocably issues to Employee 10,000 shares of its $.01 par value Common Stock
upon the terms and conditions set forth in this Agreement.
Section 2.2 - Purchase Price
The purchase price of the Restricted Stock shall be $.01 per share
without commission or other charge, payable in cash or by check.
Section 2.3 - Consideration to Company
As partial consideration for the issuance of Restricted Stock by the
Company, Employee agrees to render faithful and efficient services to the
Company pursuant to his Employment Agreement for a period of at least one (1)
year from the date this Restricted Stock is issued. Nothing in this Agreement
or in the Plan shall confer upon Employee any right to continue in the employ of
the Company.
Section 2.4 - Adjustments in Restricted Stock
In the event that the outstanding shares of the Company's Common Stock
are changed into or exchanged for a different number or kind of shares of the
Company or other securities of the Company by reason of merger, consolidation,
recapitalization, reclassification, stock split-up, stock dividend or
combination of shares, the Committee, subject to the provisions of the Plan and
this Agreement, shall make an appropriate and equitable adjustment in the number
and kind of shares of Restricted Stock, to the end that after such event
Employee's proportionate interest shall be maintained as before the occurrence
of such event. Any such adjustment made by the Committee shall be final and
binding upon Emloyee, the Company and all other interested persons.
ARTICLE III
RESTRICTIONS
Section 3.1 - Repurchase of Restricted Stock
Immediately upon a termination of Employee's employment, the Company
shall have the right to repurchase from the Employee all shares of Restricted
Stock then subject to Restrictions at a cash price of $.01 per share; provided
that no such right of repurchase shall exist
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if the Restrictions lapse upon any such termination pursuant to the Employment
Agreement, this Agreement or any other agreement.
Section 3.2 - Legend
Certificates representing shares of Restricted Stock issued pursuant
to this Agreement shall, until all Restrictions lapse and new certificates are
issued pursuant to Section 3.3, bear the following legend:
"The shares represented by this certificate are subject to
reacquisition by Rental Service Corporation and such shares may not be sold or
otherwise transferred except pursuant to the provisions of the Restricted Stock
Agreement by and between Rental Service Corporaton and the registered owner of
such shares."
Section 3.3 - Lapse of Restrictions
(a) Subject to Sections 3.4 and 4.5, the Restrictions shall lapse as
to one-fourth of the Restricted Stock on each of the first, second, third and
fourth anniversaries of the grant of the Restricted Stock.
(b)Upon the lapse of the Restrictions, the Company shall cause new
certificates to be issued with respect to such shares and delivered to Employee
or his legal representative, free from the legend provided for in Section 3.2
and any of the other Restrictions. Notwithstanding the foregoing, no such new
certificate shall be delivered to Employee or his legal representative unless
and until Employee or his legal representative shall have paid to the Company in
cash the full amount of all federal and state withholding or other employment
taxes applicable to the taxable income of Employee resulting from the grant of
Restricted Stock or the lapse of the Restrictions.
Section 3.4 - Merger, Consolidation, Exchange, Acquisition,Liquidation
or Dissolution
In the event of the merger or consolidation of the Company into
another corporation, or the exchange of all or substantially all of the assets
of the Company for the securities of another corporation, or the acquisition by
another corporation or person of all or substantially all of the Company's
assets or 80% or more of the Company's then outstanding voting stock, or the
liquidation or dissolution of the Company (any such event being an
"Acquisition"), the Committee may, in its absolute discretion and on such terms
and conditions as it deems appropriate, provide by resolution adopted prior to
such event that at some time prior to the effective date of such event, the
Restrictions upon some or all shares of Restricted Stock shall immediately lapse
and/or that some or all of such shares shall cease to be subject to repurchase
or forfeiture under Section 3.1 after such event.
The Committee may make such determinations and adopt such rules and
conditions as it, in its absolute discretion, deems appropriate in connection
with such acceleration of the lapse of the Restrictions, including, but not by
way of limitation, provisions to ensure that
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any such acceleration shall be conditioned upon the consummation of the
contemplated corporate transaction.
Notwithstanding the foregoing, the provisions of the Employment
Agreement dealing with lapse of Restrictions on a Change of Control (as defined
therein) shall govern with respect to an Acquisition that is also a Change of
Control.
Section 3.5 - Restrictions On New Shares
In the event that the outstanding shares of the Company's Common Stock
are changed into or exchanged for a different number or kind of shares or other
securities of the Company or of another corporation pursuant to a merger of the
Company into another corporation, or the exchange of all or substantially all of
the assets of the Company for the securities of another corporation, or the
acquisition by another corporation of 80% or more of the Company's then
outstanding voting stock, or the liquidation or dissolution of the Company, or a
stock split-up or stock dividend, such new or additional or different shares or
securities which are attributable to Employee in his capacity as the owner of
the Restricted Stock then subject to Restrictions, shall be considered to be
Restricted Stock and shall be subject to all of the Restrictions, unless the
Committee provides, pursuant to Section 3.4, for the expiration of the
Restrictions on the shares of Restricted Stock underlying the distribution of
the new or additional shares or securities.
ARTICLE IV
MISCELLANEOUS
Section 4.1 - Administration
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 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 Restricted
Stock. 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, if any, which under Rule 16b-3
are required to be determined in the sole discretion of the Committee.
Section 4.2 - Restricted Stock Not Transferable
Restricted Stock (including any shares received by holders thereof
with respect to shares of Restricted Stock as a result of stock dividends, stock
splits or any other form of recapitalization) shall be subject to the following
Restrictions until such Restrictions lapse or expire pursuant to this Agreement:
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Neither the Restricted Stock nor any interest or right therein or part
thereof shall be liable for the debts, contracts, or engagements of 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; provided, however, that this Section 4.2
shall not prevent transfers by will or by the applicable laws of descent and
distribution.
Section 4.3 - Conditions to Issuance of Stock Certificates
Shares of Restricted Stock 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
pursuant to this Agreement 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
(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 lapse of such reasonable period of time as the Committee may
from time to time establish for reasons of administrative convenience; and
(e) The receipt by the Company of full payment for such shares,
including payment of any applicable withholding tax.
Section 4.4 - Escrow
The Secretary or such other escrow holder as the Committee may appoint
shall retain physical custody of the certificates representing the Restricted
Stock, including shares of Restricted Stock issued pursuant to Section 3.5,
until all of the Restrictions expire or shall have been removed; provided,
however, that in no event shall Employee retain physical custody of any
certificates representing Restricted Stock issued to him.
Section 4.5 - Notices
Any notice to be given by the Employee under the terms of this
Agreement shall be addressed to the Secretary of the Company or his office. Any
notice to be given to the
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Employee shall be addressed to him at the address given beneath his signature
hereto. By a notice given pursuant to this Section, either party may hereafter
designate a different address for notices to be given to him. Any notice which
is required to be given to Employee shall, if Employee is then deceased, be
given to Employee's personal representative if such representative has
previously informed the Company of his status and address by written notice
under this Section. Any notice be deemed duly given when deposited (with postage
prepaid) in a post office or branch post office regularly maintained by the
United States Postal Service.
Section 4.6 - Rights as Stockholder
Except as otherwise provided herein, upon the delivery of Restricted
Stock to the escrow holder pursuant to Section 4.4, the holder of the Restricted
Stock shall have all the rights of a stockholder with respect to the Restricted
Stock, including the right to vote the Restricted Stock and the right to receive
all dividends or other distributions paid or made with respect to the Restricted
Stock; provided, however, that in the discretion of the Committee, any
extraordinary distributions with respect to the Common Stock that is subject to
the Restrictions may also be subject to the Restrictions.
Section 4.7 - Titles
Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.
Section 4.8 - Construction
This Agreement shall be administered, interpreted and enforced under
the internal laws of the State of Delaware.
Section 4.9 - Conformity to Securities Laws
The Employee acknowledges that the Plan and this Agreement are
intended to conform to the extent necessary with all provisions of all
applicable federal and state laws, rules and regulations (including, but not
limited to 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 the applicable exemptive conditions of Rule 16b-3)
and to such approvals by any listing, regulatory or other governmental authority
as may, in the opinion of counsel for the Company, be necessary or advisable in
connection therewith. Notwithstanding anything herein to the contrary, the Plan
shall be administered, and the Restricted Stock is granted, only in such a
manner as to conform to such laws, rules and regulations. To the extent
permitted by applicable law, the Plan, this Agreement and the Restricted Stock
shall be deemed amended to the extent necessary to conform to such laws, rules
and regulations.
Section 4.10 - Amendments
This Agreement and the Plan may be amended without the consent of the
Employee provided that such amendment would not impair any rights of the
Employee under
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this Agreement. No amendment of this Agreement shall, without the consent of the
Employee, impair any rights of the Employee under this Agreement.
IN WITNESS WHEREOF, this Employment Agreement has been executed and
delivered by the parties hereto.
RENTAL SERVICE CORPORATION
By: /s/ Robert M. Wilson
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Robert M. Wilson
Senior Vice President, Chief Financial Officer,
Secretary and Treasurer
/s/ Martin R. Reid
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Martin R. Reid
10801 E. Happy Valley Road, #44
Scottsdale, AZ 85255
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