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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO
SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 10)
RENTAL SERVICE CORPORATION
(Name of Subject Company)
RENTAL SERVICE CORPORATION
(Name of Person(s) Filing Statement)
Common Stock, Par Value $.01 Per Share
(Title of Class of Securities)
76009V102
(CUSIP Number of Class of Securities)
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Robert M. Wilson
Executive Vice President, Chief Financial Officer, Secretary and Treasurer
Rental Service Corporation
6929 East Greenway Parkway, Suite 200
Scottsdale, Arizona 85254
(480) 905-3300
(Name, Address and Telephone Number of Person Authorized to Receive
Notice and Communications on Behalf of the Person(s) Filing Statement)
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Copies to:
Elizabeth A. Blendell, Esq. Mark D. Gerstein, Esq.
Latham & Watkins Latham & Watkins
633 West Fifth Street, Suite 4000 233 South Wacker Drive
Los Angeles, California 90071-2007 Sears Tower, Suite 5800
(213) 485-1234 Chicago, Illinois 60606-6401
(312) 876-7700
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Item 3. Identity and Background.
(b) The Termination and Release Agreement
On May 20, 1999, Rental Service Corporation ("RSC") and NationsRent, Inc.
("NationsRent") entered into a Termination and Release Agreement (the
"Termination and Release Agreement") pursuant to which, among other things, RSC
and NationsRent mutually terminated the Agreement and Plan of Merger, dated as
of January 20, 1999, between RSC and NationsRent (the "NationsRent Merger
Agreement") and abandoned the stock-for-stock merger of RSC and NationsRent
contemplated thereby (the "NationsRent Merger").
In connection with the termination of the NationsRent Merger Agreement, RSC
also agreed to pay in escrow for the benefit of NationsRent an amount equal to
$6 million in cash solely as reimbursement for certain out-of-pocket costs and
expenses incurred by NationsRent in connection with or relating to the
NationsRent Merger Agreement and the Termination and Release Agreement and the
performance of NationsRent's obligations thereunder through the date of the
Termination and Release Agreement, including, without limitation, fees and
expenses of financial, legal and accounting advisors. On May 20, 1999, RSC
deposited $6 million in escrow for such purposes in accordance with the
Termination and Release Agreement.
In addition, pursuant to the Termination and Release Agreement, RSC and
NationsRent agreed to mutually release and discharge each other (and their
respective directors, officers, advisors, employees, agents and certain other
representatives or affiliates thereof) from all claims, suits or actions
relating to or arising out of the NationsRent Merger Agreement or the agreements
ancillary thereto or the transactions contemplated thereby. The mutual release
and discharge does not apply to claims, suits or actions arising out of (1) an
undertaking or promise set forth in the Termination and Release Agreement or (2)
a breach of the obligations of RSC and NationsRent set forth in the
confidentiality agreement between RSC and NationsRent dated January 12, 1999
(the "Confidentiality Agreement") pursuant to which RSC and NationsRent agreed
to treat as confidential certain business, financial and other information
exchanged by the parties. Moreover, NationsRent agreed, promptly after receipt
of the $6 million amount, to dismiss with prejudice its complaint filed on April
30, 1999 in the Circuit Court of the 17th Judicial Circuit in and for Broward
County, Florida and captioned NationsRent, Inc. v. United Rentals, Inc., UR
Acquisition Corporation, Bradley S. Jacobs, John N. Milne and Goldman Sachs &
Co., Case No. 99-07422.
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The foregoing description of the Termination and Release Agreement is
qualified in its entirety by reference to the text of the Termination and
Release Agreement, a copy of which is filed as Exhibit 48 hereto and is
incorporated by reference herein.
The Stock Option Termination Agreement
On May 20, 1999, RSC and NationsRent separately entered into a Stock Option
Termination Agreement (the "Stock Option Termination Agreement") pursuant to
which, RSC and NationsRent mutually terminated and canceled, solely in
consideration of their mutual covenants to so terminate and cancel, (1) the
Stock Option Agreement, dated as of January 20, 1999, executed by RSC in favor
of NationsRent and the option on RSC common stock granted to NationsRent
thereby, and (2) the Stock Option Agreement, dated as of January 20, 1999,
executed by NationsRent in favor of RSC, and the option on NationsRent common
stock granted to RSC thereby (together, the "Stock Option Agreements"). In
connection with the execution of the Stock Option Termination Agreement, each of
RSC and NationsRent acknowledged that the options granted pursuant to the Stock
Option Agreements had not become exercisable prior to the termination of the
Stock Option Agreements.
The foregoing description of the Stock Option Termination Agreement is
qualified in its entirety by reference to the text of the Stock Option
Termination Agreement, a copy of which is filed as Exhibit 49 hereto and is
incorporated by reference herein.
Amendment to Confidentiality Agreement
On May 20, 1999, RSC and NationsRent also executed an amendment to the
Confidentiality Agreement (the "Confidentiality Agreement Amendment"). Pursuant
to the Confidentiality Agreement Amendment, NationsRent agreed that for a period
of nine months NationsRent will not participate in any sale, merger, acquisition
or reorganization involving RSC, except that such limitation will not have an
effect on actions taken from and after such time as RSC (1) provides material
non-public information regarding RSC to any person for the purpose of evaluating
or making an acquisition proposal concerning RSC, or (2) enters into a
definitive agreement giving effect to an acquisition proposal. In addition,
among other things, the Confidentiality Agreement Amendment provides for the
return and/or destruction of certain confidential information furnished by RSC
and NationsRent to each other pursuant to the Confidentiality Agreement and
includes restrictions on RSC and NationsRent, respectively, publishing injurious
statements about the other party.
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The foregoing description of the Confidentiality Agreement Amendment is
qualified in its entirety by reference to the text of the Confidentiality
Agreement Amendment, a copy of which is filed as Exhibit 50 hereto and is
incorporated by reference herein.
The 1999 Severance Plans
The Board of Directors of RSC (the "RSC Board") believes that one of RSC's
most important resources is its employees and considers it essential to the best
interests of RSC's stockholders to foster the continuous employment of its
employees and those of its subsidiaries. In addition, the RSC Board recognizes
that, as is the case with many publicly-held corporations, the possibility of
the consummation of a transaction effecting a change in control of RSC,
including the Tender Offer, may exist and that such possibility, and the
uncertainty and questions that it causes, could result in the departure or
distraction of personnel to the detriment of RSC and its stockholders. The RSC
Board recently has been informed by RSC's senior management that certain of
RSC's employees have resigned from RSC since the commencement of the Tender
Offer.
As a result of RSC's concern about the potentially disruptive effects of
the Tender Offer on its employees, RSC retained the independent consulting firms
Towers Perrin and Watson Wyatt & Company to advise the RSC Board and to evaluate
the possibility of implementing certain supplemental severance pay plans to
provide certain severance benefits to employees eligible under such plans.
Based on the foregoing, at a meeting of the RSC Board on May 20, 1999, the
RSC Board approved and adopted, and authorized RSC to implement and establish,
(1) a Supplemental Severance Pay Plan (the "Supplemental Severance Plan") for
certain employees of RSC and its subsidiaries, (2) a Supplemental Severance Pay
Plan for Key Corporate Employees (the "Corporate Employee Severance Plan") for
certain key employees who are employed at RSC's corporate office, and (3) a
Supplemental Severance Pay Plan for Key Field Employees (the "Field Employee
Severance Plan") for certain key employees who are not employed at RSC's
corporate office. The purpose of the Supplemental Severance Plan, the Corporate
Employee Severance Plan and the Field Employee Severance Plan (collectively, the
"1999 Severance Plans") is to reinforce and encourage the continued attention
and dedication of RSC's employees to their duties and to
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foster their continued employment with RSC without distraction arising from the
possibility of a change in control of RSC.
The 1999 Severance Plans generally provide for certain severance benefits
to eligible employees if, within twelve months following a "Change in Control,"
the employment of an employee eligible for benefits under the 1999 Severance
Plans (1) is involuntarily terminated other than by reason of the employee's
death or disability or for "Cause" (as defined in the 1999 Severance Plans), or
(2) is voluntarily terminated for "Good Reason" (as defined in the 1999
Severance Plans). Employees eligible for benefits under one of the 1999
Severance Plans will not be eligible under any of the other 1999 Severance
Plans.
The specific benefits and eligibility requirements under each of the 1999
Severance Plans are as follows:
. Supplemental Severance Plan. The benefits under the Supplemental
Severance Plan include a lump sum cash payment in an amount equal to six
weeks pay based on the base compensation of the employee as of the date
of termination (or, if greater, as in effect immediately prior to the
Change in Control) and the continuation of medical and dental insurance
for a period of six weeks following the calendar month in which the
employee is terminated. An employee of RSC or any of its subsidiaries
who is not an eligible employee under either the Corporate Employee
Severance Plan or the Field Employee Severance Plan is eligible for
severance benefits under the Supplemental Severance Plan if such
employee (1) is a regular, full-time employee of RSC or its subsidiaries
who is not covered by a collective bargaining agreement providing for
similar benefits, and (2) is not a party to a written employment
agreement or severance agreement with RSC (other than RSC's standard
employment offer letter). In addition, an employee eligible under the
Supplemental Severance Plan immediately prior to a Change in Control
whose scheduled work hours are unilaterally reduced thereafter will
continue to be eligible under the Supplemental Severance Plan.
. Corporate Employee Severance Plan. The benefits under the Corporate
Employee Severance Plan include a lump sum cash payment in an amount
equal to twelve weeks pay based on the base compensation of
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the employee as of the date of termination (or, if greater, as in effect
immediately prior to the Change in Control) and the continuation of
medical and dental insurance for a period of twelve weeks following the
calendar month in which the employee is terminated. An employee of RSC
or any of its subsidiaries who is employed in RSC's corporate office
and who is not covered by a collective bargaining agreement providing
for similar benefits is eligible for severance benefits under the
Corporate Employee Severance Plan if such employee (1) is not a party to
a written employment agreement or severance agreement with RSC (other
than RSC's standard employment offer letter), and (2) is designated by
the RSC Board or the Compensation Committee thereof as eligible to
receive severance benefits under the Corporate Employee Severance Plan.
In addition, an employee eligible under the Corporate Employee Severance
Plan immediately prior to a Change in Control remains eligible under the
Corporate Employee Severance Plan following the Change in Control.
. Field Employee Severance Plan. The benefits under the Field Employee
Severance Plan include a lump sum cash payment in an amount equal to
eight weeks pay based on the base compensation rate of the employee as
of the date of termination (or, if greater, as in effect immediately
prior to the Change in Control) and the continuation of medical and
dental insurance for a period of eight weeks following the calendar
month in which the employee is terminated. An employee of RSC or any of
its subsidiaries who is not employed in RSC's corporate office or
covered by a collective bargaining agreement providing for similar
benefits is eligible for severance benefits under the Field Employee
Severance Plan if such employee (1) is not a party to a written
employment agreement or severance agreement with RSC (other than RSC's
standard employment offer letter), and (2) is designated by the RSC
Board or the Compensation Committee thereof as eligible to receive
severance benefits under the Field Employee Severance Plan. In addition,
an employee eligible under the Field Employee Severance Plan immediately
prior to a Change in Control remains eligible under the Field Employee
Severance Plan following the Change in Control.
As defined in each of the 1999 Severance Plans, a "Change in Control" is
deemed to have occurred for purposes of the 1999 Severance Plans if: (1) any
person (other than any employee benefit plan maintained by RSC) acquires
beneficial ownership of 50% or more of the common stock of RSC; (2) RSC is a
party to a merger, consolidation or other transaction in which RSC is not the
surviving company or the stockholders of RSC immediately prior to the
transaction do not continue to own at least 60% of the surviving corporation
immediately after the transaction; (3) RSC is materially or completely
liquidated;
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or (4) individuals who constituted the RSC Board as of the effective date of the
1999 Severance Plans cease for any reason to constitute at least a majority of
the RSC Board (provided that any individual whose election or nomination to the
RSC Board was approved by at least two-thirds of the directors comprising the
RSC Board as of the effective date of the 1999 Severance Plans shall be
considered as though such individual were a member of the RSC Board as of such
date, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an election contest with respect to
the election or removal of directors or other actual or overtly or publicly
threatened solicitation of proxies or consents by or on behalf of a person or
entity other than the RSC Board).
The 1999 Severance Plans may be terminated by the RSC Board at any time and
the RSC Board may from time to time amend any of the 1999 Severance Plans as the
RSC Board may deem advisable. Notwithstanding the preceding sentence, no
termination of, or amendment to, any of the 1999 Severance Plans on or after a
Change in Control shall adversely affect the rights of any employee eligible
immediately prior to such Change in Control for benefits under the 1999
Severance Plans.
The foregoing description of the 1999 Severance Plans is qualified in its
entirety by reference to the texts of the Supplemental Severance Plan, the
Corporate Employee Severance Plan and the Field Employee Severance Plan, copies
of which are filed as Exhibits 51, 52 and 53, respectively, hereto and are
incorporated by reference herein.
Item 4. The Solicitation or Recommendation.
(a) As described in the response to Item 7(a) below, in light of the
termination of the NationsRent Merger Agreement and related documents, including
the Stock Option Agreements, the RSC Board has requested that its financial
advisors, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley
& Co. Incorporated, commence and conduct a review and evaluation of RSC's
strategic alternatives, and promptly report the results of their review and
evaluation to the RSC Board for its consideration. UNTIL THE COMPLETION OF THE
REVIEW AND EVALUATION PROCESS, THE RSC BOARD IS MAINTAINING ITS RECOMMENDATION
THAT RSC'S
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STOCKHOLDERS REJECT THE TENDER OFFER AND NOT TENDER THEIR SHARES PURSUANT TO THE
TENDER OFFER.
(b) The first paragraph following the table under the heading "Five-Year
Business Forecast" in the response to Item 4(b) of the Schedule 14D-9 is hereby
amended and supplemented in its entirety to read as follows:
The five-year business forecast set forth above was not prepared with
a view to public disclosure or compliance with published guidelines of the
SEC or the guidelines established by the American Institute of Certified
Public Accountants regarding prospective financial information nor was the
information prepared with the assistance of, or reviewed, compiled or
examined by, independent accountants. The inclusion of the five-year
business forecast in this Schedule 14D-9 should not be regarded as an
indication that RSC or any of its representatives considers forecasted
financial results to be achievable.
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Item 7. Certain Negotiations and Transactions by the Subject Company.
(a) As previously disclosed, on May 7, 1999, RSC and NationsRent commenced
negotiations with respect to an amendment to the NationsRent Merger Agreement.
RSC and NationsRent were unable to reach an agreement with respect to any such
amendment. As described in the response to Item 3(b) above, on May 20, 1999, RSC
and NationsRent entered into the Termination and Release Agreement, the Stock
Option Termination Agreement and the Confidentiality Agreement Amendment.
By virtue of the execution of the Termination and Release Agreement, RSC is
no longer subject to the terms of the NationsRent Merger Agreement.
Notwithstanding the foregoing, RSC has not engaged in any discussions or
negotiations with the Bidder with respect to the Tender Offer at this time. In
light of the termination of the NationsRent Merger Agreement and related
documents, including the Stock Option Agreements, the RSC Board requested that
its financial advisors conduct a review and evaluation of RSC's strategic
alternatives, and promptly report the results of their review and evaluation to
the RSC Board for its consideration. During the course of this review and
evaluation of RSC's strategic alternatives, including remaining an independent
company, RSC and its financial advisors may contact and engage in discussions
with one or more third parties. Such discussions may lead to negotiations with
any of such parties with respect to a potential strategic transaction with RSC.
Any potential strategic transaction involving RSC could relate to or result in
(1) an extraordinary transaction such as a merger or reorganization, involving
RSC or any subsidiary of RSC; (2) a purchase, sale or transfer of a material
amount of assets by RSC or any subsidiary of RSC; (3) a tender offer for or
other acquisition of securities by or of RSC; or (4) a material change in the
present capitalization or dividend policy of RSC. No assurance can be given that
any such discussion will result in a strategic transaction involving RSC.
Item 8. Additional Information to be Furnished.
A copy of the press release related to the execution of the Termination and
Release Agreement issued by RSC is filed as Exhibit 54 hereto and is
incorporated by reference herein.
As previously disclosed in the Schedule 14D-9, Martin R. Reid, RSC's
Chairman of the Board and Chief Executive Officer, upon the advice of his
physicians, has requested and been granted a medical leave of absence. Mr. Reid
is currently undergoing treatment consistent with his doctor's recommendations
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and, until that process is concluded, RSC cannot be certain as to the likelihood
or timing of his return to his duties as Chairman of the Board and Chief
Executive Officer of RSC.
Item 9. Material to be Filed as Exhibits.
48 Termination and Release Agreement dated May 20, 1999 between
Rental Service Corporation and NationsRent, Inc.
49 Stock Option Termination Agreement dated May 20, 1999 between
Rental Service Corporation and NationsRent, Inc.
50 Letter from NationsRent, Inc. to Rental Service Corporation dated May
20, 1999.
51 Rental Service Corporation Supplemental Severance Pay Plan.
52 Rental Service Corporation Supplemental Severance Pay Plan for Key
Corporate Employees.
53 Rental Service Corporation Supplemental Severance Pay Plan for Key
Field Employees.
54 Press Release issued by Rental Service Corporation dated May 20, 1999.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: May 21, 1999 Rental Service Corporation
By: /s/ Robert M. Wilson
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Name: Robert M. Wilson
Title: Executive Vice President, Chief
Financial Officer, Secretary
and Treasurer
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Exhibit 48
TERMINATION AND RELEASE AGREEMENT
THIS TERMINATION AND RELEASE AGREEMENT (the "Agreement") is made and
entered into this 20th day of May, 1999, by and between Rental Service
Corporation, a Delaware corporation ("RSC"), and NationsRent, Inc., a Delaware
corporation ("NRI").
WITNESSETH:
WHEREAS, RSC and NRI (each, a "Party") entered into that certain Agreement
and Plan of Merger, dated as of January 20, 1999 (the "Merger Agreement", and
capitalized terms not otherwise defined herein shall have the meaning ascribed
to them in the Merger Agreement);
WHEREAS, in connection with the negotiations surrounding the Merger
Agreement, RSC and NRI each entered into a confidentiality agreement dated
January 12, 1999 (as amended through the date hereof, the "Confidentiality
Agreement"); and
WHEREAS, the parties hereto wish to terminate the Merger Agreement and
release their respective rights, claims, obligations, and liabilities in
connection therewith, and the board of directors of each Party has approved such
termination and authorized such Party to enter into this Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements herein set
forth, the Parties agree as follows:
1. TERMINATION OF MERGER AGREEMENT. Effective immediately upon the
Effective Time, RSC and NRI abandon the Merger and mutually terminate the Merger
Agreement pursuant to Section 8.1 thereof. Notwithstanding anything to the
contrary contained in the Merger Agreement, from and after the Effective Time no
Released Party (as defined herein) shall have any liability or obligation under
the Merger Agreement.
2. EXPENSES. RSC agrees to pay NRI the amount of $6,000,000 (the "Expense
Reimbursement Amount"), intended solely to defray NRI's out-of-pocket costs and
expenses incurred in connection with or relating to the Merger Agreement and
this Agreement and the performance of NRI's obligations thereunder through the
date hereof, including, without limitation, fees and expenses of financial,
legal and accounting advisors. RSC and NRI agree that all other such costs and
expenses heretofore or hereafter incurred by each Party shall be borne by the
Party incurring such cost or expense. Simultaneous with its execution of this
Agreement, RSC shall pay the Expense Reimbursement Amount by wire transfer of
same day funds to the attorney's escrow account of Richards, Layton & Finger
designated on Exhibit A attached hereto. The time of receipt of such funds in
such account shall be deemed the "Effective Time" hereunder. The Expense
Reimbursement Amount shall be released to NRI from such attorney's escrow
account, by wire transfer of same day funds to NRI's account designated in
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writing by NRI, promptly after the expiration of 72 hours after notice of such
deposit to the Court of Chancery of the State of Delaware and United Rentals,
Inc. (in compliance with any of such court's orders concerning any such payment)
unless, prior to the expiration of such 72 hour period, the Court of Chancery of
the State of Delaware shall have entered an order prohibiting or delaying such
release (a "Prohibitive Order"). Any such order shall not affect the right of
NationsRent, as between NationsRent and RSC, to receive the Expense
Reimbursement Amount from the escrow account, except as expressly provided in
such order. In the event a Prohibitive Order becomes final and non-appealable,
the Expense Reimbursement Amount shall be returned to RSC absent an order of a
court of proper jurisdiction to the contrary.
3. RELEASE AND WAIVER. Effective immediately upon the Effective Time, each
of RSC and NRI, and each of their respective predecessors, successors,
subsidiaries and assigns and any of the present and former officers, directors
and employees of the foregoing, in their capacity as such, hereby covenants not
to sue and forever releases and discharges NRI and RSC, respectively (and each
of their respective directors, officers, representatives, advisors (including
but not limited to financial advisors), attorneys, employees, agents, parents,
subsidiaries, affiliated persons and entities, predecessors, successors and
assigns and heirs, executors and administrators and all persons acting in
concert with any such party) (each, a "Released Party") from all manner of
claims, actions, causes of action or suits, at law or in equity, known or
unknown, which each now has or hereafter can, shall or may have by reason of any
matter, cause or thing whatsoever relating to or arising out of the Merger
Agreement or the agreements or instruments ancillary thereto or the transactions
contemplated thereby, excepting only any claim, action, cause of action or suit
arising out of (a) an undertaking or promise contained in this Agreement, or (b)
by virtue of obligations under the Confidentiality Agreement. Nothing in this
Section 3 shall in any way constitute an agreement by any party hereto to
indemnify any other party hereto against any third party claim.
4. PENDING LITIGATION. NRI agrees, promptly after the receipt of the
Expense Reimbursement Amount, to dismiss with prejudice its complaint in the
matter captioned NationsRent, Inc. v. United Rentals, Inc., et al., Case No. 99-
07422 (filed April 30, 1999 in Florida Circuit Court for the 17th Judicial
Circuit in and for Broward County, Florida). NRI further agrees not to re-file
said suit or to file another suit against the captioned defendants or their
affiliates based on the same or similar claims set forth in the aforementioned
suit. The Parties agree there shall be no third party beneficiaries with respect
to this Section 4.
5. GOVERNING LAW. This Agreement, and all matters relating hereto, shall be
governed by, and construed in accordance with the laws of the State of Delaware
applicable to contracts to be made and performed wholly within such state
without reference to the conflict of laws principles thereof. The parties hereby
(a) irrevocably submit to the exclusive jurisdiction of the Chancery Court of
the State of Delaware and the federal courts of the United States of America
located in the State of Delaware solely
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in respect of the interpretation or enforcement of this Agreement and (b) waive,
and agree not to assert, as a defense in any action, suit or proceeding for the
interpretation or enforcement of this Agreement, that it is not subject to such
jurisdiction or that such action, suit or proceeding may not be brought or is
not maintainable in said courts or that the venue thereof may not be appropriate
or that this Agreement may not be enforced in or by such courts, and the parties
irrevocably agree that all claims with respect to such action or proceeding
shall be heard and determined exclusively in such courts. The parties hereby
consent to and grant any such courts jurisdiction over the person of such
parties and over the subject matter of such dispute and agree that mailing of
process or other papers in connection with any such action or proceeding in the
manner provided in Section 11 below, or in such other manner as may be permitted
by law, shall be valid and sufficient service thereof.
6. ENTIRE AGREEMENT. This Agreement and the Confidentiality Agreement
constitutes the entire agreement between the parties and supersede all prior
agreements and understandings, both written and oral, between the parties, or
any of them, with respect to the subject matter hereof.
7. COOPERATION. Each Party agrees to cooperate with the other and to take
all action reasonably necessary to give full effect to the provisions and intent
of this Agreement, including, without limitation, any action necessary to defend
the validity and enforceability of Section 2 hereof and, if necessary, to seek
the withdrawal or rescission of a Prohibitive Order. For such purpose, each
Party will bear its own costs and expenses incurred to take such action.
8. AMENDMENT AND MODIFICATION. This Agreement may be amended, modified,
and supplemented only by a written document executed by RSC and NRI which
specifically states that it is an amendment, modification or supplement to this
Agreement.
9. AUTHORIZATION. Each Party represents and warrants (i) this Agreement
has been duly and validly authorized, executed and delivered, subject to the
application of equitable remedies, and (ii) the person executing this Agreement
on its behalf is duly authorized and fully competent to execute this Agreement
on its behalf. In entering into this Agreement, the undersigned represent that
they have read all the terms hereof, have discussed the terms with counsel and
that such terms are fully understood and voluntarily accepted.
10. CONSTRUCTION. This Agreement shall be construed without regard to the
party or parties responsible for its preparation, and it shall be deemed to have
been prepared jointly by both parties. Any ambiguity or uncertainty arising
herein shall not be interpreted or construed against any party hereto.
11. NOTICES. Notices, requests instructions or other documents to be given
under this Agreement shall be in writing and shall be deemed given, (a) when
sent if sent
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by facsimile, provided that the facsimile is promptly confirmed by telephone
confirmation thereof to the intended recipient, (b) when delivered, if delivered
personally to the intended recipient, and (c) one business day later, if sent by
overnight delivery via a national courier service, and in each case, addressed
to a party at the following address for such party:
if to NRI:
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NationsRent, Inc.
450 East Las Olas Blvd.
14th Floor
Ft. Lauderdale, FL 33301
Attention: Joseph H. Izhakoff, Esq.
Telecopier: (954) 760-6585
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: Joseph B. Frumkin, Esq.
Telecopier: (212) 558-3588
if to RSC:
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Rental Service Corporation
6929 East Greenway Parkway
Suite 200
Scottsdale, Arizona 85254
Attention: Rosemary Strunk, Esq.
Telecopier: (480) 483-4024
with a copy to:
Latham & Watkins
633 West Fifth Street
Suite 4000
Los Angeles, California 90071
Attention: Elizabeth A. Blendell, Esq.
Telecopier: (213) 891-8763
or to such other persons or addresses as may be designated in writing by the
party to receive such notice as provided above.
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12. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same document.
13. SEVERABILITY.
(a) In the event that a Prohibitive Order is entered, or the
provisions of Section 2 hereof are otherwise found invalid or unenforceable in
any jurisdiction, and such event does not result from the breach of this
Agreement on the part of RSC or its directors, officers, employees, agents or
representatives, any such order or finding of invalidity or unenforceability
shall not render invalid or unenforceable in any jurisdiction the remaining
terms and provisions of this Agreement or affect the validity or enforceability
of any of the remaining terms or provisions of this Agreement.
(b) Any other term or provision of this Agreement that is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or affect
the validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction, and if any provision of this Agreement is
so broad as to be unenforceable, such provision shall be interpreted to be only
so broad as is enforceable; provided that, notwithstanding the foregoing
provisions of this Section 13(b), if any reformation of this Agreement to cure
any failure of validity or enforceability in accordance with such provisions
would so frustrate the intent and purposes of the Parties such that a Party
would not have entered into this Agreement as so reformed, the severability
provisions of this Section 13(b) shall not be applied to cure any such failure.
14. ENFORCEMENT. The parties agree that in the event of a breach of any
provision of this Agreement irreparable damage would occur, the aggrieved party
would be without an adequate remedy at law, and damages would be difficult to
determine. The parties therefore agree that in the event of a breach of any
provision of this Agreement, subject to Section 3 above, the aggrieved party may
elect to institute and prosecute proceedings to enforce specific performance or
to enjoin the continuing breach of such provision. By seeking or obtaining such
relief, the aggrieved party will not be precluded from seeking or obtaining any
other relief to which it may be entitled at law or in equity.
15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon, inure to
the benefit of and be enforceable by the parties and their respective successors
and assigns.
5
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officers of the parties hereto as of the date first written
above.
RENTAL SERVICE CORPORATION
By: /s/ Robert M. Wilson
----------------------------
a duly authorized signatory
NATIONSRENT, INC.
By: /s/ James L. Kirk
----------------------------
Name: James L. Kirk
Title: Chief Executive Officer
<PAGE>
Exhibit 49
STOCK OPTION TERMINATION AGREEMENT
THIS STOCK OPTION TERMINATION AGREEMENT (the "Agreement") is made and
entered into this 20th day of May, 1999, by and between Rental Service
Corporation, a Delaware corporation ("RSC"), and NationsRent, Inc., a Delaware
corporation ("NationsRent"). In consideration of the covenants and agreements
herein set forth, the parties agree as follows:
1. TERMINATION OF STOCK OPTION AGREEMENTS. Effective at 12:00 p.m. New York
City time on May 20, 1999 (the "Effective Time"), RSC and NationsRent hereby
mutually cancel and terminate for no consideration other than their mutual
covenants to so cancel and terminate (i) the Stock Option Agreement, dated as of
January 20, 1999, executed by RSC in favor of NationsRent and the associated
option on the common stock of RSC (the "NationsRent Stock Option"), and (ii) the
Stock Option Agreement, dated as of January 20, 1999, executed by NationsRent in
favor of RSC and the associated option on the common stock of NationsRent (the
"RSC Stock Option" and together with the NationsRent Stock Option, the "Stock
Options"). The parties acknowledge that neither of the Stock Options has become
exercisable prior to the Effective Time. Notwithstanding anything to the
contrary contained in the Stock Options, neither party hereto (nor any of their
respective directors, officers, representatives, advisors (including but not
limited to financial advisors), attorneys, employees, agents, parents,
subsidiaries, affiliated persons and entities, predecessors, successors and
assigns and heirs, executors and administrators and all persons acting in
concert with any such party) shall have any liability or obligation under the
Stock Options from and after the Effective Time.
2. GOVERNING LAW. This Agreement, and all matters relating hereto, shall be
governed by, and construed in accordance with the laws of the State of Delaware
applicable to contracts to be made and performed wholly within such state
without reference to the conflict of laws principles thereof. The parties hereby
(i) irrevocably submit to the exclusive jurisdiction of the Chancery Court of
the State of Delaware and the federal courts of the United States of America
located in the State of Delaware solely in respect of the interpretation or
enforcement of this Agreement and (ii) waive, and agree not to assert, as a
defense in any action, suit or proceeding for the interpretation or enforcement
of this Agreement, that it is not subject to such jurisdiction or that such
action, suit or proceeding may not be brought or is not maintainable in said
courts or that the venue thereof may not be appropriate or that this Agreement
may not be enforced in or by such courts, and the parties irrevocably agree that
all claims with respect to such action or proceeding shall be heard and
determined exclusively in such courts. The parties hereby consent to and grant
any such courts jurisdiction over the person of such parties and over the
subject matter of such dispute and agree that mailing of process or other papers
in connection with any such action or proceeding in the manner provided in
Section 7 below, or in such other manner as may be permitted by law, shall be
valid and sufficient service thereof.
<PAGE>
3. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes all prior agreements and understandings, both
written and oral, between the parties, or any of them, with respect to the Stock
Options and the termination and cancellation thereof.
4. AMENDMENT AND MODIFICATION. This Agreement may be amended, modified, and
supplemented only by a written document executed by RSC and NationsRent which
specifically states that it is an amendment, modification or supplement to this
Agreement.
5. AUTHORIZATION. Each party represents and warrants that (i) this
Agreement has been duly and validly authorized, executed and delivered, subject
to the application of equitable remedies, and (ii) the person executing this
Agreement on its behalf is duly authorized and fully competent to execute this
Agreement on its behalf and that its execution of this Agreement and its
performance hereunder has been approved by its Board of Directors. In entering
into this Agreement, the undersigned represent that they have read all the terms
hereof, have discussed the terms with counsel and that such terms are fully
understood and voluntarily accepted.
6. CONSTRUCTION. This Agreement shall be construed without regard to the
party or parties responsible for its preparation, and it shall be deemed to have
been prepared jointly by both parties. Any ambiguity or uncertainty arising
herein shall not be interpreted or construed against any party hereto.
7. NOTICES. Notices, requests instructions or other documents to be given
under this shall be in writing and shall be deemed given, (i) when sent if sent
by facsimile, provided that the facsimile is promptly confirmed by telephone
confirmation thereof to the intended recipient, (ii) when delivered, if
delivered personally to the intended recipient, and (iii) one business day
later, if sent by overnight delivery via a national courier service, and in each
case, addressed to a party at the following address for such party:
if to NationsRent:
-----------------
NationsRent, Inc.
450 East Las Olas Blvd.
14th Floor
Ft. Lauderdale, FL 33301
Attention: Joseph H. Izhakoff, Esq.
Telecopier: (954) 760-6585
2
<PAGE>
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: Joseph B. Frumkin, Esq.
Telecopier: (212) 558-3588
if to RSC:
---------
Rental Service Corporation
6929 East Greenway Parkway
Suite 200
Scottsdale, Arizona 85254
Attention: Rosemary Strunk, Esq.
Telecopier: (480) 483-4024
with a copy to:
Latham & Watkins
633 West Fifth Street
Suite 4000
Los Angeles, California 90071
Attention: Elizabeth A. Blendell, Esq.
Telecopier: (213) 891-8763
or to such other persons or addresses as may be designated in writing by the
party to receive such notice as provided above.
8. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same document.
9. SEVERABILITY. Any term or provision of this Agreement that is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or affect
the validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction, and if any provision of this Agreement is
so broad as to be unenforceable, such provision shall be interpreted to be only
so broad as is enforceable; provided that, notwithstanding the foregoing
provisions of this Section 9, if any reformation of this Agreement to cure any
failure of validity or enforceability in accordance with such provisions would
so frustrate the intent and purposes of the Parties such that a Party would not
have entered into this Agreement as so reformed, the severability provisions of
this Section 9 shall not be applied to cure any such failure.
3
<PAGE>
10. ENFORCEMENT. The parties agree that in the event of a breach of any
provision of this Agreement irreparable damage would occur, the aggrieved party
would be without an adequate remedy at law, and damages would be difficult to
determine. The parties therefore agree that in the event of a breach of any
provision of this Agreement, the aggrieved party may elect to institute and
prosecute proceedings to enforce specific performance or to enjoin the
continuing breach of such provision. By seeking or obtaining such relief, the
aggrieved party will not be precluded from seeking or obtaining any other relief
to which it may be entitled at law or in equity.
11. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon, inure to
the benefit of and be enforceable by the parties and their respective successors
and assigns.
4
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officers of the parties hereto as of the date first written
above.
RENTAL SERVICE CORPORATION
By: /s/ Robert M. Wilson
---------------------------
a duly authorized signatory
NATIONSRENT, INC.
By: /s/ James L. Kirk
---------------------------
Name: James L. Kirk
Title: Chief Executive Officer
<PAGE>
Exhibit 50
May 20, 1999
Rental Service Corporation
6929 East Greenway Parkway, Suite 200
Scottsdale, Arizona 85254
Gentlemen:
Reference is made herein to that certain letter agreement dated January 12,
1999 between NationsRent, Inc. ("NationsRent") and Rental Service Corporation
("RSC" and, together with NationsRent, the "Parties" and each a "Party"). This
letter amendment (this "Amendment") serves to amend and supplement the terms of
the above-referenced letter agreement (as so amended, the "Confidentiality
Agreement") as set forth herein. Capitalized terms used but not defined herein
shall have the meaning ascribed to such terms in the Confidentiality Agreement.
In consideration of the covenants and agreements herein set forth and for other
good and valuable consideration, the Parties hereby agree as follows:
1. As of the close of business on May 20, 1999 (the "Effective Time"),
each of the Parties shall be deemed to provide a demand to the other, pursuant
to the Confidentiality Agreement, for return of Evaluation Material (as defined
in the Confidentiality Agreement), which term is acknowledged by the Parties to
include all of the information described in the first paragraph of the
Confidentiality Agreement which is or has been exchanged for any purpose, not
solely with respect to the consideration of a possible transaction, it has
provided and the other Party agrees, within ten (10) business days, to fully
comply with such request, provided, however, that (i) notwithstanding the terms
of the Confidentiality Agreement, extracts and compilations may be destroyed
rather than returned, provided a written certification of the chief financial
officer of the recipient Party shall be provided as to such destruction to the
providing Party, (ii) the chief financial officer of the Party which received
the Evaluation Material shall on or before such tenth business day certify, in
writing, compliance in full with the demand under the Confidentiality Agreement
effected hereby, to the Party which provided the Evaluation Material, and (iii)
compliance with the demand under the Confidentiality Agreement effected hereby
may be suspended for any materials which, in the opinion of the receiving
party's outside counsel, may not be returned or destroyed due to pending
litigation, but in such circumstances such material shall be removed from the
receiving party's premises and escrowed solely in the office of such counsel
during such suspended period of compliance hereunder.
2. Subject to its obligations under applicable law, including under the
federal securities laws, each Party agrees that it will not, and will use its
best efforts to cause its respective directors, officers, representatives,
advisors (including but not limited to financial
<PAGE>
advisors), attorneys, employees, agents, parents, subsidiaries, affiliated
persons and entities, predecessors, successors and assigns and heirs, executors
and administrators and all persons acting in concert with any such party (the
"Related Parties") not to, make or publish any statement (orally or in writing),
or instigate, assist or participate in the publication of any statement, which
would or could libel, slander or disparage (whether or not such disparagement
legally constitutes libel or slander) the other Party or its business or
operations, any of the other Party's corporate predecessors, subsidiaries or
affiliates or their respective businesses or operations, or any other Related
Party of such Party, in their capacity as such. In the event that either Party
or its respective Related Parties is compelled by its obligations under
applicable law to make a statement or take an action that is or may be deemed to
be otherwise prohibited by the preceding sentence, the Party so compelled shall,
to the extent legally permissible, provide the other Party, in advance of such
action or statement, with notice of the intended action or statement and consult
with the other Party in good faith. Notwithstanding the foregoing, any statement
made or action taken in reliance on the exception for obligations under
applicable law in this paragraph 2, which statement is or subsequently becomes
public, shall excuse the other party from future performance of the covenant
under this paragraph 2 after such publication.
3. In light of its receipt of material non-public information concerning
RSC prior to the Effective Time, NationsRent agrees that, for a period of nine
(9) months from the date of this Amendment (notwithstanding any earlier
termination of the Confidentiality Agreement and for such purposes, this
paragraph 3 shall be deemed to survive any such termination), unless
specifically invited in writing by RSC, neither NationsRent nor any of its
affiliates (as such term is defined under the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) or representatives will in any manner, directly
or indirectly, (1) effect or seek, offer or propose (whether publicly or
otherwise) to effect, or cause or participate in or in any way assist any other
person (including, without limitation, any holder of securities or other
interests in RSC to effect or seek, offer or propose (whether publicly or
otherwise) to effect or participate in, (i) any acquisition of any interest
(including, without limitation, any beneficial interest) in any securities,
indebtedness, businesses or assets of RSC, (ii) any tender or exchange offer,
merger or other business combination involving RSC, (iii) any recapitalization,
restructuring, reorganization, liquidation, dissolution or other extraordinary
transaction with respect to RSC, or (iv) any "solicitation" of "proxies" (as
such terms are used in the proxy rules of the Securities and Exchange
Commission) or consents to vote any voting securities of RSC, (2) form, join or
in any way participate in a "group" (as defined under the Exchange Act) in
connection with any of the actions set forth in clause (1) above, (3) otherwise
act, alone or in concert with others (including, without limitation, any holder
of securities or other interests in RSC), to seek representation on or to
control or influence the management, board of directors or policies of RSC or to
take any of the actions described in clause (1) above, (4) take any action which
might force RSC to make a public announcement regarding any of the types of
matters set forth in (1) above, or (5) enter into any discussions or
arrangements with any third party (including, without limitation, any holder of
securities or other interests in RSC) with respect to any of the foregoing.
NationsRent also agrees during such period not to request RSC (or its directors,
officers, employees or agents), directly or indirectly, to amend or waive any
provision of this paragraph (including this sentence). The limitations,
restrictions and covenants of this paragraph 3 shall not have an effect on
actions taken from and after such time (but after the date of this Amendment)
<PAGE>
as RSC (a) provides material non-public information regarding RSC to any person
for the purpose of evaluating or making an Acquisition Proposal (as defined in
the Agreement and Plan of Merger, dated as of January 20, 1999, between RSC and
NationsRent) concerning RSC or (b) enters into a definitive agreement giving
effect to an Acquisition Proposal, notice of which agreement or disclosure shall
be provided to NationsRent promptly by RSC.
4. Any other term or provision of this Confidentiality Agreement that is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions thereof or
affect the validity or enforceability of any of the terms or provisions thereof
in any other jurisdiction, and if any provision of the Confidentiality Agreement
is so broad as to be unenforceable, such provision shall be interpreted to be
only so broad as is enforceable; provided that, notwithstanding the foregoing
provisions of this paragraph 4, if any reformation of the Confidentiality
Agreement to cure any failure of validity or enforceability in accordance with
such provisions would so frustrate the intent and purposes of the Parties such
that a Party would not have entered into the Confidentiality Agreement as so
reformed, the severability provisions of this paragraph 4 shall not be applied
to cure any such failure.
[Signature page follows]
<PAGE>
If the foregoing correctly sets forth the understanding between the
Parties, please acknowledge receipt of this Amendment and confirm your
acceptance of and agreement to the terms set forth herein by executing where
provided below and returning a copy of this Amendment. Your acceptance of the
terms and conditions of this Amendment shall constitute a binding agreement
between the Parties. Notwithstanding anything herein to the contrary, no
provision of the Confidentiality Agreement shall be amended, modified or
supplemented except as expressly set forth herein. This Amendment may be
executed in any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
Very truly yours,
NATIONSRENT, INC.
By: /s/ James L. Kirk
------------------
Name: James L. Kirk
Title: Chief Executive Officer
AGREED TO AND ACCEPTED this
20th day of May, 1999:
RENTAL SERVICE CORPORATION
By: /s/ Robert M. Wilson
-----------------------
Name: Robert M. Wilson
Title: Executive Vice President, Chief Financial
Officer, Secretary and Treasurer
<PAGE>
EXHIBIT 51
RENTAL SERVICE CORPORATION
SUPPLEMENTAL SEVERANCE PAY PLAN
Effective as of May 20, 1999
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
1. Establishment of the Plan.............................................. 1
2. Purpose of the Plan.................................................... 1
3. Eligible Employees..................................................... 1
4. Change in Control...................................................... 2
5. Termination Following Change in Control................................ 2
6. Severance Pay Benefits................................................. 3
7. Medical and Dental Insurance Benefits.................................. 3
8. Plan Administration.................................................... 3
9. Amendment or Termination............................................... 3
10. No Assignment.......................................................... 4
11. No Employment Rights................................................... 4
12. Plan Funding........................................................... 4
13. Applicable Law......................................................... 4
14. Plan Year.............................................................. 4
15. Withholding............................................................ 4
16. Claims Procedure....................................................... 4
17. Validity............................................................... 5
18. Headings............................................................... 5
</TABLE>
<PAGE>
RENTAL SERVICE CORPORATION
SUPPLEMENTAL SEVERANCE PAY PLAN
1. Establishment of the Plan. Rental Service Corporation, a Delaware
corporation (the "Company"), hereby establishes the Rental Service Corporation
Supplemental Severance Pay Plan (the "Plan"), effective as of May 20, 1999, for
the benefit of eligible employees of the Employer (as defined herein). The Plan
is an unfunded severance benefits plan, which is an employee welfare benefit
plan for purposes of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA").
2. Purpose of the Plan. The Company and its Board of Directors (the
"Board") consider it essential to the best interests of its shareholders to
foster the continuous employment of the regular, full-time employees of the
Company and its majority-owned subsidiaries. In connection with this, the Board
recognizes that, as is the case with many publicly held corporations, the
possibility of a change in control of the Company may exist and that such
possibility, and the uncertainty and questions that it causes, could result in
the departure or distraction of personnel to the detriment of the Company and
its shareholders. The Board has decided to reinforce and encourage the continued
attention and dedication of the Company's employees to their assigned duties
without distraction arising from the possibility of a change in control of the
Company. Accordingly, the purpose of the Plan is to provide an eligible employee
of the Employer with severance benefits in the event that, within twelve (12)
months following a Change in Control (as defined herein), such eligible
employee's employment with the Employer is involuntarily terminated other than
for Cause (as defined herein) or voluntarily terminated for Good Reason (as
defined herein).
3. Eligible Employees.
(a) An employee of the Employer shall be eligible for severance
benefits under the Plan if such employee: (i) is a regular, full-time employee
of the Employer, (ii) is not a party to a written employment agreement or
severance agreement (other than the Employer's standard employment offer letter)
with the Employer and (iii) is not an eligible employee under the Rental Service
Corporation Supplemental Severance Pay Plan for Key Corporate Employees or the
Rental Service Corporation Supplemental Severance Pay Plan for Key Field
Employees. For purposes of this Plan, "Employer" means the Company and its
majority-owned subsidiaries, as determined from time to time, and a regular,
full-time employee of the Employer is an employee who is regularly scheduled to
work at least thirty-two (32) hours per week for the Employer; provided,
however, that, in the case of an employee who is a regular, full-time employee
of the Employer immediately prior to a Change in Control and whose scheduled
work hours are subsequently unilaterally reduced by the Employer, such employee
shall continue to be a regular, full-time employee of the Employer for purposes
of the Plan.
(b) Notwithstanding the foregoing, (i) any employee of the Employer
who is a member of a collective bargaining unit whose bargaining representative
has bargained in good faith with the Employer (or its bargaining representative)
with respect to the types of benefits
<PAGE>
offered under this Plan shall not be an eligible employee for purposes of the
Plan, except to the extent that the applicable collective bargaining agreement
provides for participation under the Plan by such employee, and (ii) any part-
time, seasonal or temporary employee shall not be an eligible employee for
purposes of the Plan.
4. Change in Control. An eligible employee of the Employer shall only be
entitled to severance benefits under Sections 6 and 7 if there has been a Change
in Control. A "Change in Control" shall be deemed to have occurred if:
(a) any "person," as such term is used in Sections 13(d) and 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the "1934 Act") (other than
any employee benefit plan maintained by the Company), is or becomes the
"beneficial owner", as such term is used in Rule 13d-3 promulgated under the
1934 Act, directly or indirectly, of securities representing fifty percent (50%)
or more of the common stock of the Company; or
(b) the Company is a party to a merger, consolidation or other
transaction in which (i) the Company is not the surviving company, or (ii) the
stockholders of the Company immediately prior to the transaction do not continue
to own at least sixty percent (60%) of the surviving corporation immediately
after the transaction; or
(c) the Company is materially or completely liquidated; or
(d) individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the date hereof whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least two-thirds of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an election contest with respect to the election or removal of
directors or other actual or overtly and publicly threatened solicitation of
proxies or consents by or on behalf of a person or entity other than the Board.
5. Termination Following Change in Control.
(a) General. If any of the events described in Section 4 constituting
a Change in Control shall have occurred, an eligible employee of the Employer
shall be entitled to the severance benefits provided in Sections 6 and 7 upon
the subsequent involuntary termination of such employee's employment with the
Employer without Cause, or the subsequent voluntary termination of such
employee's employment with the Employer for Good Reason, if such termination of
employment occurs within twelve (12) months following the occurrence of such
Change in Control. Notwithstanding the foregoing, an eligible employee of the
Employer shall not receive the severance benefits provided in Sections 6 and 7
if such employee's termination of employment is: (i) because of such employee's
death or Disability (as defined in Section 5(b)), (ii) for Cause (as defined in
Section 5(c)), or (iii) voluntary without Good Reason (as defined in Section
5(d)).
2
<PAGE>
(b) Disability. For purposes of the Plan, "Disability" shall mean an
employee's termination of employment with the Employer, as a result of
incapacity due to physical or mental illness, if the employee shall have been
absent from the full-time performance of such employee's duties with the
Employer for six (6) consecutive months, and within thirty (30) days after
written notice of termination is given, such employee shall not have returned to
the full-time performance of such employee's duties.
(c) Cause. For purposes of the Plan, "Cause" shall mean: (i) the
employee's conviction of a crime substantially detrimental to the Employer's
business or relating to moral turpitude; or (ii) the employee's intentional or
willful material damage of the Employer's business or properties.
(d) Good Reason. For purposes of the Plan, "Good Reason" shall mean:
(i) a reduction in such employee's aggregate annual base salary and annual
incentive compensation opportunities (as in effect immediately prior to a Change
in Control) by an amount of more than 10%; or (ii) any change by the Employer in
the employee's principal work location to a location more than thirty (30) miles
from the employee's principal work location immediately prior to the Change in
Control.
6. Severance Pay Benefits. An eligible employee who is entitled to
severance benefits under the Plan shall receive severance pay benefits in an
amount equal to six (6) weeks of Base Pay. "Base Pay" for purposes of the Plan
shall be the regular base salary or straight time hourly compensation rate of
the eligible employee, determined on such employee's date of termination of
employment with the Employer (or, if greater, determined immediately prior to
the Change in Control). An eligible employee's severance pay benefits shall be
payable in lump sum payment in cash not more than thirty (30) days following the
termination of the employee's employment with the Employer.
7. Medical and Dental Insurance Benefits. An eligible employee who is
entitled to severance benefits under the Plan and is covered by the Employer's
medical and dental insurance benefit plans immediately prior to the date of
termination of employment shall receive such medical and dental insurance
benefits coverage for the employee and the employee's eligible family members
for the period beginning on such termination of employment and ending six (6)
weeks following the calendar month in which such termination of employment
occurs. Such benefits coverage shall be under such terms and conditions
(including benefits, premiums, deductibles and copayments) as are at least equal
to those in effect immediately prior to the date of termination of employment
(or, if more favorable to such employee, on the date immediately prior to the
Change in Control).
8. Plan Administration. The "Administrator" means the Company or such
individual or individuals or committee appointed by the Board (or the
Compensation Committee thereof) to perform certain duties under the Plan. The
Administrator shall serve as the "named fiduciary" within the meaning of such
term as defined in ERISA, and shall be responsible for administering the Plan.
The Administrator may delegate to other persons responsibilities for performing
certain of the duties of the Administrator under the terms of this Plan and may
seek such expert advice as the Administrator deems reasonably necessary with
respect to the Plan. The Administrator shall be entitled to rely upon the
information and advice furnished by such
3
<PAGE>
delegates and experts, unless actually knowing such information and advice to be
inaccurate or unlawful. The Administrator shall establish and maintain a
reasonable claims procedure, including a procedure for appeal of denied claims.
9. Amendment or Termination. The Board may at any time terminate the Plan
or any part thereof, and may from time to time amend the Plan as it may deem
advisable; provided, however, that, on or after a Change in Control, in the case
of any employee of the Employer who is an eligible employee immediately prior to
the Change in Control, neither the termination of the Plan nor any part thereof
nor any amendment of the Plan shall in any respect adversely affect the rights
of such employee under the terms of the Plan as in effect immediately prior to
such Change in Control.
10. No Assignment. No severance benefits under the Plan shall be subject
to sale, transfer, alienation, assignment or garnishment, and any attempt to
cause such severance benefits to be so subjected shall not be recognized, except
to the extent required by law.
11. No Employment Rights. The Plan shall not confer employment rights upon
any person. No person shall be entitled, by virtue of the Plan, to remain in the
employ of the Employer.
12. Plan Funding. No eligible employee shall acquire by reason of this
Plan any right in or title to any assets, funds, or property of the Employer.
Any severance pay benefits which become payable under this Plan are unfunded
obligations of the Employer and shall be paid solely from the general assets of
the Employer and, furthermore, no shareholder, director, officer, or employee of
the Employer shall be individually or personally liable for any severance pay
benefits which become payable under the Plan.
13. Applicable Law. The Plan shall be governed and construed in accordance
with ERISA and in the event that any reference shall be made to State law, the
laws of the State of Arizona (without reference to the choice of law provisions
of Arizona law) shall apply.
14. Plan Year. The plan year of the Plan shall be the calendar year.
15. Withholding. The Employer may cause such amounts to be withheld from
payment under the Plan as are necessary to satisfy any federal, state or local
law.
16. Claims Procedure. Any person claiming a benefit, requesting an
interpretation or ruling under the Plan, or requesting information under the
Plan shall present such a claim or request in writing to the Administrator. The
Administrator shall respond to the claim within 90 days unless special
circumstances require an extension of time of up to an additional 90 days. The
Administrator shall notify the claimant of the special circumstances and the
date by which a decision is expected. If no response to a claim is received
within the prescribed time, it shall be deemed denied. If the claim is denied,
the Administrator shall give the claimant a written notice, including the
specific reason for denial, with reference to pertinent Plan provisions. The
denial shall include a description of any additional information necessary for
the claimant to perfect a claim, an explanation of why such information is
necessary and a description of the procedure for having the denied claim
reviewed. The claimant may request review of a denied claim by written
4
<PAGE>
notice to the Administrator given within 90 days of the date of denial. The
claimant or authorized representative may submit a written application for
review, may review pertinent documents and may submit issues and comments in
writing. The Administrator shall decide whether to affirm or reverse the earlier
denial and give notice to the claimant. The decision on review shall be made
within 60 days, unless special circumstances require an extension of time for up
to an additional 60 days. The Administrator shall give the claimant notice of
such an extension. The Administrator shall give the claimant written notice of
the decision on review, including specific references to Plan provisions on
which the decision is based. All decisions on review shall be final and bind all
parties concerned.
17. Validity. The validity or enforceability of any provision or
provisions of the Plan shall not affect the validity or enforceability of any
other provision of the Plan, which other provisions shall remain in full force
and effect, nor shall the invalidity or unenforceability of a portion of any
provision of the Plan affect the validity or enforceability of the balance of
such provision.
18. Headings. The headings of the paragraphs contained in the Plan are for
reference purposes only and shall not, in any way, affect the meaning or
interpretation of any provision of the Plan.
IN WITNESS WHEREOF, Rental Service Corporation has caused this Plan to
be executed below by its duly authorized officer or representative effective as
of May 20, 1999.
RENTAL SERVICE CORPORATION
By: /s/ Robert M. Wilson
--------------------------------------
Name: Robert M. Wilson
Title: Executive Vice President,
Chief Financial Officer, Secretary
and Treasurer
5
<PAGE>
EXHIBIT 52
RENTAL SERVICE CORPORATION
SUPPLEMENTAL SEVERANCE PAY PLAN
FOR KEY CORPORATE EMPLOYEES
Effective as of May 20, 1999
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
1. Establishment of the Plan............................................. 1
2. Purpose of the Plan................................................... 1
3. Eligible Employees.................................................... 1
4. Change in Control..................................................... 2
5. Termination Following Change in Control............................... 2
6. Severance Pay Benefits................................................ 3
7. Medical and Dental Insurance Benefits................................. 3
8. Plan Administration................................................... 3
9. Amendment or Termination.............................................. 3
10. No Assignment......................................................... 4
11. No Employment Rights.................................................. 4
12. Plan Funding.......................................................... 4
13. Applicable Law........................................................ 4
14. Plan Year............................................................. 4
15. Withholding........................................................... 4
16. Claims Procedure...................................................... 4
17. Validity.............................................................. 5
18. Headings.............................................................. 5
</TABLE>
<PAGE>
RENTAL SERVICE CORPORATION
SUPPLEMENTAL SEVERANCE PAY PLAN
FOR KEY CORPORATE EMPLOYEES
1. Establishment of the Plan. Rental Service Corporation, a Delaware
corporation (the "Company"), hereby establishes the Rental Service Corporation
Supplemental Severance Pay Plan for Key Corporate Employees (the "Plan"),
effective as of May 20, 1999, for the benefit of eligible employees of the
Employer (as defined herein). The Plan is an unfunded severance benefits plan,
which is an employee welfare benefit plan for purposes of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
2. Purpose of the Plan. The Company and its Board of Directors (the
"Board") consider it essential to the best interests of its shareholders to
foster the continuous employment of its key corporate employees. In connection
with this, the Board recognizes that, as is the case with many publicly held
corporations, the possibility of a change in control of the Company may exist
and that such possibility, and the uncertainty and questions that it causes,
could result in the departure or distraction of personnel to the detriment of
the Company and its shareholders. The Board has decided to reinforce and
encourage the continued attention and dedication of certain key employees of the
Company to their assigned duties without distraction arising from the
possibility of a change in control of the Company. Accordingly, the purpose of
the Plan is to provide an eligible employee of the Employer with severance
benefits in the event that, within twelve (12) months following a Change in
Control (as defined herein), such eligible employee's employment with the
Employer is involuntarily terminated other than for Cause (as defined herein) or
voluntarily terminated for Good Reason (as defined herein).
3. Eligible Employees.
(a) An employee of the Employer shall be eligible for severance
benefits under the Plan if such employee: (i) is employed in the Company's
corporate office, (ii) is not a party to a written employment agreement or
severance agreement (other than the Employer's standard employment offer letter)
and (iii) is designated by the Board (or the Compensation Committee thereof) as
a key corporate employee eligible for severance benefits hereunder. For purposes
of this Plan, "Employer" means the Company and its majority-owned subsidiaries,
as determined from time to time. Notwithstanding any provision herein to the
contrary, an employee of the Employer who is an eligible employee under the Plan
immediately prior to a Change in Control (as defined herein) shall remain an
eligible employee for the purposes of the Plan.
(b) Notwithstanding the foregoing, any employee of the Employer who is
a member of a collective bargaining unit whose bargaining representative has
bargained in good faith with the Employer (or its bargaining representative)
with respect to the types of benefits offered under this Plan shall not be an
eligible employee for purposes of the Plan, except to the extent that the
applicable collective bargaining agreement provides for participation under the
<PAGE>
Plan by such employee.
4. Change in Control. An eligible employee of the Employer shall only be
entitled to severance benefits under Sections 6 and 7 if there has been a Change
in Control. A "Change in Control" shall be deemed to have occurred if:
(a) any "person," as such term is used in Sections 13(d) and 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the "1934 Act") (other than
any employee benefit plan maintained by the Company), is or becomes the
"beneficial owner", as such term is used in Rule 13d-3 promulgated under the
1934 Act, directly or indirectly, of securities representing fifty percent (50%)
or more of the common stock of the Company; or
(b) the Company is a party to a merger, consolidation or other
transaction in which (i) the Company is not the surviving company, or (ii) the
stockholders of the Company immediately prior to the transaction do not continue
to own at least sixty percent (60%) of the surviving corporation immediately
after the transaction; or
(c) the Company is materially or completely liquidated; or
(d) individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the date hereof whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least two-thirds of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an election contest with respect to the election or removal of
directors or other actual or overtly and publicly threatened solicitation of
proxies or consents by or on behalf of a person or entity other than the Board.
5. Termination Following Change in Control.
(a) General. If any of the events described in Section 4 constituting
a Change in Control shall have occurred, an eligible employee of the Employer
shall be entitled to the severance benefits provided in Sections 6 and 7 upon
the subsequent involuntary termination of such employee's employment with the
Employer without Cause, or the subsequent voluntary termination of such
employee's employment with the Employer for Good Reason, if such termination of
employment occurs within twelve (12) months following the occurrence of such
Change in Control. Notwithstanding the foregoing, an eligible employee of the
Employer shall not receive the severance benefits provided in Sections 6 and 7
if such employee's termination of employment is: (i) because of such employee's
death or Disability (as defined in Section 5(b)), (ii) for Cause (as defined in
Section 5(c)), or (iii) voluntary without Good Reason (as defined in Section
5(d)).
(b) Disability. For purposes of the Plan, "Disability" shall mean an
employee's termination of employment with the Employer, as a result of
incapacity due to physical or mental illness, if the employee shall have been
absent from the full-time performance of such employee's duties with the
Employer for six (6) consecutive months, and within thirty
2
<PAGE>
(30) days after written notice of termination is given, such employee shall not
have returned to the full-time performance of such employee's duties.
(c) Cause. For purposes of the Plan, "Cause" shall mean: (i) the
employee's conviction of a crime substantially detrimental to the Employer's
business or relating to moral turpitude; or (ii) the employee's intentional or
willful material damage of the Employer's business or properties.
(d) Good Reason. For purposes of the Plan, "Good Reason" shall mean:
(i) a reduction in such employee's aggregate annual base salary and annual
incentive compensation opportunities (as in effect immediately prior to the
Change in Control) by an amount of more than 10%; or (ii) any change by the
Employer in the employee's principal work location to a location more than
thirty (30) miles from the employee's principal work location immediately prior
to the Change in Control.
6. Severance Pay Benefits. An eligible employee who is entitled to
severance benefits under the Plan shall receive severance pay benefits in an
amount equal to twelve (12) weeks of Base Pay. "Base Pay" for purposes of the
Plan shall be the regular base salary or straight time hourly compensation rate
of the eligible employee, determined on such employee's date of termination of
employment with the Employer (or, if greater, determined immediately prior to
the Change in Control). An eligible employee's severance pay benefits shall be
payable in lump sum payment in cash not more than thirty (30) days following the
termination of the employee's employment with the Employer.
7. Medical and Dental Insurance Benefits. An eligible employee who is
entitled to severance benefits under the Plan and is covered by the Employer's
medical and dental insurance benefit plans immediately prior to the date of
termination of employment shall receive such medical and dental insurance
benefits coverage for the employee and the employee's eligible family members
for the period beginning on such termination of employment and ending twelve
(12) weeks following the calendar month in which such termination of employment
occurs. Such benefits coverage shall be under such terms and conditions
(including benefits, premiums, deductibles and copayments) as are at least equal
to those in effect immediately prior to the date of termination of employment
(or, if more favorable to such employee, on the date immediately prior to the
Change in Control).
8. Plan Administration. The "Administrator" means the Company or such
individual or individuals or committee appointed by the Board (or the
Compensation Committee thereof) to perform certain duties under the Plan. The
Administrator shall serve as the "named fiduciary" within the meaning of such
term as defined in ERISA, and shall be responsible for administering the Plan.
The Administrator may delegate to other persons responsibilities for performing
certain of the duties of the Administrator under the terms of this Plan and may
seek such expert advice as the Administrator deems reasonably necessary with
respect to the Plan. The Administrator shall be entitled to rely upon the
information and advice furnished by such delegates and experts, unless actually
knowing such information and advice to be inaccurate or unlawful. The
Administrator shall establish and maintain a reasonable claims procedure,
including a procedure for appeal of denied claims.
3
<PAGE>
9. Amendment or Termination. The Board may at any time terminate the Plan
or any part thereof, and may from time to time amend the Plan as it may deem
advisable; provided, however, that, on or after a Change in Control, in the case
of any employee of the Employer who is an eligible employee immediately prior to
the Change in Control, neither the termination of the Plan nor any part thereof
nor any amendment of the Plan shall in any respect adversely affect the rights
of such employee under the terms of the Plan as in effect immediately prior to
such Change in Control.
10. No Assignment. No severance benefits under the Plan shall be subject
to sale, transfer, alienation, assignment or garnishment, and any attempt to
cause such severance benefits to be so subjected shall not be recognized, except
to the extent required by law.
11. No Employment Rights. The Plan shall not confer employment rights upon
any person. No person shall be entitled, by virtue of the Plan, to remain in the
employ of the Employer.
12. Plan Funding. No eligible employee shall acquire by reason of this
Plan any right in or title to any assets, funds, or property of the Employer.
Any severance pay benefits which become payable under this Plan are unfunded
obligations of the Employer and shall be paid solely from the general assets of
the Employer and, furthermore, no shareholder, director, officer, or employee of
the Employer shall be individually or personally liable for any severance pay
benefits which become payable under the Plan.
13. Applicable Law. The Plan shall be governed and construed in accordance
with ERISA and in the event that any reference shall be made to State law, the
laws of the State of Arizona (without reference to the choice of law provisions
of Arizona law) shall apply.
14. Plan Year. The plan year of the Plan shall be the calendar year.
15. Withholding. The Employer may cause such amounts to be withheld from
payment under the Plan as are necessary to satisfy any federal, state or local
law.
16. Claims Procedure. Any person claiming a benefit, requesting an
interpretation or ruling under the Plan, or requesting information under the
Plan shall present such a claim or request in writing to the Administrator. The
Administrator shall respond to the claim within 90 days unless special
circumstances require an extension of time of up to an additional 90 days. The
Administrator shall notify the claimant of the special circumstances and the
date by which a decision is expected. If no response to a claim is received
within the prescribed time, it shall be deemed denied. If the claim is denied,
the Administrator shall give the claimant a written notice, including the
specific reason for denial, with reference to pertinent Plan provisions. The
denial shall include a description of any additional information necessary for
the claimant to perfect a claim, an explanation of why such information is
necessary and a description of the procedure for having the denied claim
reviewed. The claimant may request review of a denied claim by written
notice to the Administrator given within 90 days of the date of denial. The
claimant or authorized representative may submit a written application for
review, may review pertinent documents and may submit issues and comments in
writing. The Administrator shall decide whether to affirm or reverse the earlier
denial and give notice to the claimant. The decision on
4
<PAGE>
review shall be made within 60 days, unless special circumstances require an
extension of time for up to an additional 60 days. The Administrator shall give
the claimant notice of such an extension. The Administrator shall give the
claimant written notice of the decision on review, including specific references
to Plan provisions on which the decision is based. All decisions on review shall
be final and bind all parties concerned.
17. Validity. The validity or enforceability of any provision or
provisions of the Plan shall not affect the validity or enforceability of any
other provision of the Plan, which other provisions shall remain in full force
and effect, nor shall the invalidity or unenforceability of a portion of any
provision of the Plan affect the validity or enforceability of the balance of
such provision.
18. Headings. The headings of the paragraphs contained in the Plan are for
reference purposes only and shall not, in any way, affect the meaning or
interpretation of any provision of the Plan.
IN WITNESS WHEREOF, Rental Service Corporation has caused this Plan to
be executed below by its duly authorized officer or representative effective as
of May 20, 1999.
RENTAL SERVICE CORPORATION
By: /s/ Robert M. Wilson
--------------------------------
Name: Robert M. Wilson
Title: Executive Vice President,
Chief Financial Officer,
Secretary and Treasurer
5
<PAGE>
EXHIBIT 53
RENTAL SERVICE CORPORATION
SUPPLEMENTAL SEVERANCE PAY PLAN
FOR KEY FIELD EMPLOYEES
Effective as of May 20, 1999
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
1. Establishment of the Plan................................................ 1
2. Purpose of the Plan...................................................... 1
3. Eligible Employees....................................................... 1
4. Change in Control........................................................ 2
5. Termination Following Change in Control.................................. 2
6. Severance Pay Benefits................................................... 3
7. Medical and Dental Insurance Benefits.................................... 3
8. Plan Administration...................................................... 3
9. Amendment or Termination................................................. 3
10. No Assignment............................................................ 4
11. No Employment Rights..................................................... 4
12. Plan Funding............................................................. 4
13. Applicable Law........................................................... 4
14. Plan Year................................................................ 4
15. Withholding.............................................................. 4
16. Claims Procedure......................................................... 4
17. Validity................................................................. 5
18. Headings................................................................. 5
</TABLE>
<PAGE>
EXHIBIT 53
RENTAL SERVICE CORPORATION
SUPPLEMENTAL SEVERANCE PAY PLAN
FOR KEY FIELD EMPLOYEES
1. Establishment of the Plan. Rental Service Corporation, a Delaware
corporation (the "Company"), hereby establishes the Rental Service Corporation
Supplemental Severance Pay Plan for Key Field Employees (the "Plan"), effective
as of May 20, 1999, for the benefit of eligible employees of the Employer (as
defined herein). The Plan is an unfunded severance benefits plan, which is an
employee welfare benefit plan for purposes of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA").
2. Purpose of the Plan. The Company and its Board of Directors (the
"Board") consider it essential to the best interests of its shareholders to
foster the continuous employment of its key field employees. In connection with
this, the Board recognizes that, as is the case with many publicly held
corporations, the possibility of a change in control of the Company may exist
and that such possibility, and the uncertainty and questions that it causes,
could result in the departure or distraction of personnel to the detriment of
the Company and its shareholders. The Board has decided to reinforce and
encourage the continued attention and dedication of certain key employees of the
Company to their assigned duties without distraction arising from the
possibility of a change in control of the Company. Accordingly, the purpose of
the Plan is to provide an eligible employee of the Employer with severance
benefits in the event that, within twelve (12) months following a Change in
Control (as defined herein), such eligible employee's employment with the
Employer is involuntarily terminated other than for Cause (as defined herein) or
voluntarily terminated for Good Reason (as defined herein).
3. Eligible Employees.
------------------
(a) An employee of the Employer shall be eligible for severance
benefits under the Plan if such employee: (i) is not employed in the Company's
corporate office, (ii) is not a party to a written employment agreement or
severance agreement (other than the Employer's standard employment offer letter)
with the Employer and (iii) is designated by the Board (or the Compensation
Committee thereof) as a key field employee eligible for severance benefits
hereunder. For purposes of this Plan, "Employer" means the Company and its
majority-owned subsidiaries, as determined from time to time. Notwithstanding
any provision herein to the contrary, an employee of the Employer who is an
eligible employee under the Plan immediately prior to a Change in Control (as
defined herein) shall remain an eligible employee for the purposes of the Plan.
(b) Notwithstanding the foregoing, any employee of the Employer who is
a member of a collective bargaining unit whose bargaining representative has
bargained in good faith with the Employer (or its bargaining representative)
with respect to the types of benefits offered under this Plan shall not be an
eligible employee for purposes of the Plan, except to the
<PAGE>
extent that the applicable collective bargaining agreement provides for
participation under the Plan by such employee.
4. Change in Control. An eligible employee of the Employer shall only be
entitled to severance benefits under Sections 6 and 7 if there has been a Change
in Control. A "Change in Control" shall be deemed to have occurred if:
(a) any "person," as such term is used in Sections 13(d) and 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the "1934 Act") (other than
any employee benefit plan maintained by the Company), is or becomes the
"beneficial owner", as such term is used in Rule 13d-3 promulgated under the
1934 Act, directly or indirectly, of securities representing fifty percent (50%)
or more of the common stock of the Company; or
(b) the Company is a party to a merger, consolidation or other
transaction in which (i) the Company is not the surviving company, or (ii) the
stockholders of the Company immediately prior to the transaction do not continue
to own at least sixty percent (60%) of the surviving corporation immediately
after the transaction; or
(c) the Company is materially or completely liquidated; or
(d) individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the date hereof whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least two-thirds of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an election contest with respect to the election or removal of
directors or other actual or overtly and publicly threatened solicitation of
proxies or consents by or on behalf of a person or entity other than the Board.
5. Termination Following Change in Control.
---------------------------------------
(a) General. If any of the events described in Section 4 constituting
a Change in Control shall have occurred, an eligible employee of the Employer
shall be entitled to the severance benefits provided in Sections 6 and 7 upon
the subsequent involuntary termination of such employee's employment with the
Employer without Cause, or the subsequent voluntary termination of such
employee's employment with the Employer for Good Reason, if such termination of
employment occurs within twelve (12) months following the occurrence of such
Change in Control. Notwithstanding the foregoing, an eligible employee of the
Employer shall not receive the severance benefits provided in Sections 6 and 7
if such employee's termination of employment is: (i) because of such employee's
death or Disability (as defined in Section 5(b)), (ii) for Cause (as defined in
Section 5(c)), or (iii) voluntary without Good Reason (as defined in Section
5(d)).
(b) Disability. For purposes of the Plan, "Disability" shall mean an
employee's termination of employment with the Employer, as a result of
incapacity due to physical or mental illness, if the employee shall have been
absent from the full-time performance
2
<PAGE>
of such employee's duties with the Employer for six (6) consecutive months, and
within thirty (30) days after written notice of termination is given, such
employee shall not have returned to the full-time performance of such employee's
duties.
(c) Cause. For purposes of the Plan, "Cause" shall mean: (i) the
employee's conviction of a crime substantially detrimental to the Employer's
business or relating to moral turpitude; or (ii) the employee's intentional or
willful material damage of the Employer's business or properties.
(d) Good Reason. For purposes of the Plan, "Good Reason" shall mean:
(i) a reduction in such employee's aggregate annual base salary and annual
incentive compensation opportunities (as in effect immediately prior to the
Change in Control) by an amount of more than 10%; or (ii) any change by the
Employer in the employee's principal work location to a location more than
thirty (30) miles from the employee's principal work location immediately prior
to the Change in Control.
6. Severance Pay Benefits. An eligible employee who is entitled to
severance benefits under the Plan shall receive severance pay benefits in an
amount equal to eight (8) weeks of Base Pay. "Base Pay" for purposes of the Plan
shall be the regular base salary or straight time hourly compensation rate of
the eligible employee, determined on such employee's date of termination of
employment with the Employer (or, if greater, determined immediately prior to
the Change in Control). An eligible employee's severance pay benefits shall be
payable in lump sum payment in cash not more than thirty (30) days following the
termination of the employee's employment with the Employer.
7. Medical and Dental Insurance Benefits. An eligible employee who is
entitled to severance benefits under the Plan and is covered by the Employer's
medical and dental insurance benefit plans immediately prior to the date of
termination of employment shall receive such medical and dental insurance
benefits coverage for the employee and the employee's eligible family members
for the period beginning on such termination of employment and ending eight (8)
weeks following the calendar month in which such termination of employment
occurs. Such benefits coverage shall be under such terms and conditions
(including benefits, premiums, deductibles and copayments) as are at least equal
to those in effect immediately prior to the date of termination of employment
(or, if more favorable to such employee, on the date immediately prior to the
Change in Control).
8. Plan Administration. The "Administrator" means the Company or such
individual or individuals or committee appointed by the Board (or the
Compensation Committee thereof) to perform certain duties under the Plan. The
Administrator shall serve as the "named fiduciary" within the meaning of such
term as defined in ERISA, and shall be responsible for administering the Plan.
The Administrator may delegate to other persons responsibilities for performing
certain of the duties of the Administrator under the terms of this Plan and may
seek such expert advice as the Administrator deems reasonably necessary with
respect to the Plan. The Administrator shall be entitled to rely upon the
information and advice furnished by such delegates and experts, unless actually
knowing such information and advice to be inaccurate or unlawful. The
Administrator shall establish and maintain a reasonable claims procedure,
including a procedure for appeal of denied claims.
3
<PAGE>
9. Amendment or Termination. The Board may at any time terminate the Plan
or any part thereof, and may from time to time amend the Plan as it may deem
advisable; provided, however, that, on or after a Change in Control, in the case
of any employee of the Employer who is an eligible employee immediately prior to
the Change in Control, neither the termination of the Plan nor any part thereof
nor any amendment of the Plan shall in any respect adversely affect the rights
of such employee under the terms of the Plan as in effect immediately prior to
such Change in Control.
10. No Assignment. No severance benefits under the Plan shall be subject
to sale, transfer, alienation, assignment or garnishment, and any attempt to
cause such severance benefits to be so subjected shall not be recognized, except
to the extent required by law.
11. No Employment Rights. The Plan shall not confer employment rights upon
any person. No person shall be entitled, by virtue of the Plan, to remain in the
employ of the Employer.
12. Plan Funding. No eligible employee shall acquire by reason of this
Plan any right in or title to any assets, funds, or property of the Employer.
Any severance pay benefits which become payable under this Plan are unfunded
obligations of the Employer and shall be paid solely from the general assets of
the Employer and, furthermore, no shareholder, director, officer, or employee of
the Employer shall be individually or personally liable for any severance pay
benefits which become payable under the Plan.
13. Applicable Law. The Plan shall be governed and construed in accordance
with ERISA and in the event that any reference shall be made to State law, the
laws of the State of Arizona (without reference to the choice of law provisions
of Arizona law) shall apply.
14. Plan Year. The plan year of the Plan shall be the calendar year.
15. Withholding. The Employer may cause such amounts to be withheld from
payment under the Plan as are necessary to satisfy any federal, state or local
law.
16. Claims Procedure. Any person claiming a benefit, requesting an
interpretation or ruling under the Plan, or requesting information under the
Plan shall present such a claim or request in writing to the Administrator. The
Administrator shall respond to the claim within 90 days unless special
circumstances require an extension of time of up to an additional 90 days. The
Administrator shall notify the claimant of the special circumstances and the
date by which a decision is expected. If no response to a claim is received
within the prescribed time, it shall be deemed denied. If the claim is denied,
the Administrator shall give the claimant a written notice, including the
specific reason for denial, with reference to pertinent Plan provisions. The
denial shall include a description of any additional information necessary for
the claimant to perfect a claim, an explanation of why such information is
necessary and a description of the procedure for having the denied claim
reviewed. The claimant may request review of a denied claim by written notice to
the Administrator given within 90 days of the date of denial. The claimant or
authorized representative may submit a written application for review, may
review pertinent documents and may submit issues and comments in writing. The
Administrator shall decide whether to affirm or reverse the earlier denial and
give notice to the claimant. The decision on
4
<PAGE>
review shall be made within 60 days, unless special circumstances require an
extension of time for up to an additional 60 days. The Administrator shall give
the claimant notice of such an extension. The Administrator shall give the
claimant written notice of the decision on review, including specific references
to Plan provisions on which the decision is based. All decisions on review shall
be final and bind all parties concerned.
17. Validity. The validity or enforceability of any provision or
provisions of the Plan shall not affect the validity or enforceability of any
other provision of the Plan, which other provisions shall remain in full force
and effect, nor shall the invalidity or unenforceability of a portion of any
provision of the Plan affect the validity or enforceability of the balance of
such provision.
18. Headings. The headings of the paragraphs contained in the Plan are for
reference purposes only and shall not, in any way, affect the meaning or
interpretation of any provision of the Plan.
IN WITNESS WHEREOF, Rental Service Corporation has caused this Plan to
be executed below by its duly authorized officer or representative effective as
of May 20, 1999.
RENTAL SERVICE CORPORATION
By: /s/ Robert M. Wilson
------------------------------
Name: Robert M. Wilson
Title: Executive Vice President, Chief Financial
Officer, Secretary and Treasurer
5
<PAGE>
Exhibit 54
FOR IMMEDIATE RELEASE
- ---------------------
RENTAL SERVICE CORPORATION AND NATIONSRENT, INC.
TERMINATE MERGER AGREEMENT
--RSC Board to Explore Strategic Alternatives--
SCOTTSDALE, AZ, May 20, 1999--Rental Service Corporation (NYSE: RSV) ("RSC")
today announced that RSC and NationsRent, Inc. (NYSE: NRI) have mutually agreed
to terminate their January 20, 1999 merger agreement. In connection with the
termination of the merger agreement, RSC has agreed to reimburse NationsRent in
the amount of $6 million for certain out-of-pocket expenses incurred by
NationsRent in connection with the merger agreement. RSC also announced that RSC
and NationsRent separately agreed to terminate and cancel the stock option
agreements and the associated stock options granted by each of RSC and
NationsRent to the other on January 20, 1999.
The board of directors of RSC also announced that, in light of the termination
of the NationsRent merger, it has requested that its financial advisors, Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co.
Incorporated, conduct a review and evaluation of RSC's strategic alternatives
and that the results of their review and evaluation be promptly reported to the
RSC board for its consideration.
Until such time as this review and evaluation process is completed, the RSC
board continues to recommend that RSC's stockholders reject the pending tender
offer of United Rentals, Inc. (NYSE: URI) which the RSC board previously
determined to be inadequate and not in the best interests of RSC or its
stockholders. The RSC board also urges RSC's stockholders not to deliver
consents to United Rentals with respect to United Rentals' solicitation of
consents to remove and replace the directors on the RSC board.
Rental Service Corporation is a leader in the rapidly growing equipment rental
industry, serving the needs of a wide variety of industrial, manufacturing and
construction markets. Headquartered in Scottsdale, Arizona, RSC operates 253
locations throughout the United States and Canada.
<PAGE>
Contact Information
Rental Service Corporation Kekst and Company
Robert M. Wilson, 480/905-3300 Thomas Davies or David Kronfeld, 212/521-4800
Certain Information Concerning Participants
Rental Service Corporation ("RSC") and certain other persons named below
may be deemed to be "participants" in the solicitation of revocations of
consents in response to the consent solicitation by United Rentals, Inc.
("United Rentals"). The participants in this solicitation may include the
directors of RSC (Martin R. Reid (Chairman of the Board and Chief Executive
Officer), William M. Barnum, Jr., James R. Buch, David P. Lanoha, Christopher A.
Laurence, Eric L. Mattson, Britton H. Murdoch and John M. Sullivan); and the
following executive officer: Robert M. Wilson (Executive Vice President, Chief
Financial Officer, Secretary and Treasurer). As of April 30, 1999, Martin R.
Reid beneficially owned 538,545 shares, or 2.2%, of RSC's common stock, and
William M. Barnum, Jr. beneficially owned 455,317 shares, or 1.8%, of RSC's
common stock. None of the other foregoing participants individually or in the
aggregate beneficially owns in excess of 1% of RSC's common stock.
Pursuant to the terms of separate engagement letters, each effective as of
April 5, 1999, RSC retained Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch") and Morgan Stanley & Co. Incorporated ("Morgan Stanley") as
its financial advisors with respect to United Rentals' offer to purchase RSC's
common stock, for which Merrill Lynch and Morgan Stanley may receive substantial
fees. Pursuant to the engagements of Merrill Lynch and Morgan Stanley, RSC has
also agreed to reimburse each of Merrill Lynch and Morgan Stanley, respectively,
for certain reasonable out-of-pocket expenses (including the reasonable fees and
disbursements of legal counsel) and to indemnify each of Merrill Lynch and
Morgan Stanley and certain respective related parties from and against certain
liabilities, including liabilities under the federal securities laws, arising
out of their respective engagements. In addition, Merrill Lynch Capital
Corporation ("MLCC"), along with three other lending institutions, has entered
into a commitment letter with RSC and NationsRent, Inc. ("NationsRent") relating
to financing activity in connection with the previously proposed merger of RSC
and NationsRent (which has been terminated by the parties thereto) pursuant to
which MLCC may receive customary fees as well as reimbursement of reasonable
out-of-pocket expenses.
Merrill Lynch and Morgan Stanley are investment banking firms that provide
a full range of financial services for institutional and individual clients.
Although neither Merrill Lynch nor Morgan Stanley admit that they or any of
their respective directors, officers, employees or affiliates are a
"participant," as defined in Schedule 14A promulgated under the Securities
Exchange Act of 1934, as amended, or that such Schedule 14A requires the
disclosure of certain information concerning Merrill Lynch and Morgan Stanley,
each of Merrill Lynch and Morgan Stanley may assist RSC in such a solicitation.
In the normal course of business, each of Merrill Lynch and Morgan Stanley may
trade securities of RSC for its own account and the account of its customers
and, accordingly, may at any time hold a long or short position in such
securities. As of May 10, 1999, Merrill Lynch held a net long position of 436
shares of RSC's common stock. As of May 10, 1999, Morgan Stanley held a net
short position of 17,100 shares of RSC's common stock. In connection with its
role as financial advisors to RSC, Merrill Lynch and the following investment
banking employees of Merrill Lynch may communicate in person, by telephone or
otherwise with a limited number of institutions, brokers or other persons who
are stockholders of RSC: Paul A. Stefanick, James H. Caldwell and Jack C.
MacDonald. In connection with its role as financial advisors to RSC, Morgan
Stanley and the following investment banking employees of Morgan Stanley may
communicate in person, by telephone or otherwise with a limited number of
institutions, brokers and other persons who are stockholders of RSC: R. Bradford
Evans, Paul J. Taubman, Glenn R. Robson, Neil B. Morganbesser and Pietro
Cinquegrana.
