<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
------
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, For Use of the Commission Only
(as permitted by Rule 14a-6(e) (2))
NATIONSRENT, INC.
-----------------
(Name of Registrant as Specified in Its Charter)
N/A
---
(Name of Persons(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on the table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
(NATIONSRENT, INC. LOGO)
450 EAST LAS OLAS BOULEVARD
FORT LAUDERDALE, FLORIDA 33301
March 30, 2000
Dear Stockholder:
You are cordially invited to attend the 2000 Annual Meeting of Stockholders
of NationsRent, Inc. to be held on Friday, May 12, 2000 at 10:30 a.m. Eastern
Standard Time, at The Broward Center for the Performing Arts, The Amaturo
Theatre, 201 S.W. 5th Avenue, Fort Lauderdale, Florida 33312.
The accompanying Notice of Annual Meeting and Proxy Statement describe
specific matters to be acted upon. In addition to the specific matters to be
acted upon, there will be a report on our progress and an opportunity to ask
questions of general interest to stockholders.
Whether or not you plan to attend in person, it is important that your
shares be represented at the Annual Meeting. Please sign, date and return your
proxy card in the enclosed envelope as soon as possible. THE BOARD OF DIRECTORS
RECOMMENDS THAT STOCKHOLDERS VOTE FOR EACH OF THE MATTERS DESCRIBED IN THE PROXY
STATEMENT TO BE PRESENTED AT THE ANNUAL MEETING. Thank you.
Sincerely,
/s/ James L. Kirk
James L. Kirk
Chairman of the Board and
Chief Executive Officer
<PAGE> 3
(NATIONSRENT, INC. LOGO)
450 EAST LAS OLAS BOULEVARD
FORT LAUDERDALE, FLORIDA 33301
NOTICE OF THE 2000 ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of NationsRent, Inc.:
The 2000 Annual Meeting of Stockholders or any adjournment or postponement
thereof (the "Annual Meeting") of NationsRent, Inc., a Delaware corporation (the
"Company"), will be held on Friday, May 12, 2000 at 10:30 a.m., Eastern Standard
Time, at The Broward Center for the Performing Arts, The Amaturo Theatre, 201
S.W. 5th Avenue, Fort Lauderdale, Florida 33312, to consider and act on the
following matters, all of which are set forth more completely in the
accompanying proxy statement:
1. For the holders of Common Stock to elect six persons to the Board of
Directors to serve until the Company's 2001 Annual Meeting of
Stockholders or until a successor of each is duly elected and qualified;
2. For the holders of the Series A Convertible Preferred Stock to elect two
persons to the Board of Directors to serve until the Company's 2001
Annual Meeting of Stockholders or until a successor of each is duly
elected and qualified;
3. To approve the amendment to the Company's Amended and Restated 1998
Stock Option Plan (the "1998 Stock Option Plan") to increase from
7,000,000 to 10,000,000 the maximum number of shares of the Company's
common stock, par value $.01 per share, subject to awards under the 1998
Stock Option Plan; and
4. To transact such other business as may properly come before the Annual
Meeting.
The Board of Directors has fixed the close of business on March 22, 2000 as
the record date for determining those stockholders entitled to notice of, and to
vote at, the Annual Meeting.
A FORM OF PROXY AND THE PROXY STATEMENT OF THE COMPANY RELATING TO THE 2000
ANNUAL MEETING OF STOCKHOLDERS ARE ENCLOSED. IT IS IMPORTANT THAT PROXIES BE
RETURNED PROMPTLY. THEREFORE, WHETHER OR NOT YOU PLAN TO BE PRESENT IN PERSON AT
THE ANNUAL MEETING, PLEASE SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE
ENCLOSED ENVELOPE WHICH DOES NOT REQUIRE POSTAGE IF MAILED IN THE UNITED STATES.
By Order of the Board of Directors,
/s/ Joseph H. Izhakoff
Joseph H. Izhakoff
Vice President, Secretary and General
Counsel
Fort Lauderdale, Florida
March 30, 2000
<PAGE> 4
(NATIONSRENT, INC. LOGO)
450 EAST LAS OLAS BOULEVARD
FORT LAUDERDALE, FLORIDA 33301
---------------------
PROXY STATEMENT
---------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of NationsRent, Inc. (the "Company"), for use
at the 2000 Annual Meeting of Stockholders of the Company or any adjournment or
postponement thereof (the "Annual Meeting"). The Annual Meeting will be held on
Friday, May 12, 2000 at 10:30 a.m., Eastern Standard Time, at The Broward Center
for the Performing Arts, The Amaturo Theatre, 201 S.W. 5th Avenue, Fort
Lauderdale, Florida 33312.
It is anticipated that the Notice of Annual Meeting, this Proxy Statement
and the proxy card will be mailed to stockholders of the Company on or about
March 31, 2000.
RECORD DATE
Only stockholders of record at the close of business on March 22, 2000 (the
"Record Date") are entitled to vote at the Annual Meeting.
SHARES OUTSTANDING AND VOTING RIGHTS
As of the Record Date, there were 58,566,079 shares of the Company's common
stock, par value $.01 per share (the "Common Stock"), and 100,000 shares of the
Company's Series A Convertible Preferred Stock, par value $.01 per share (the
"Preferred Stock"), issued and outstanding, all of which are entitled to be
voted at the Annual Meeting. As of the Record Date, the 100,000 shares of issued
and outstanding Preferred Stock were convertible into 14,285,714 shares of
Common Stock.
Election of Directors by Holders of Common Stock. One of the matters to be
considered at the Annual Meeting is the election of six persons to the Board of
Directors by the holders of Common Stock to serve until the Company's 2001
Annual Meeting of Stockholders or until a successor of each is duly elected and
qualified. Only holders of Common Stock (and not holders of Preferred Stock)
will have the right to vote on this matter. With respect to this matter, each
holder of Common Stock as of the Record Date will be entitled to one vote for
each share held.
Election of Directors by Holders of Preferred Stock. One of the matters to
be considered at the Annual Meeting is the election of two persons to the Board
of Directors by the holders of Preferred Stock to serve until the Company's 2001
Annual Meeting of Stockholders or until a successor of each is duly elected and
qualified. Only holders of Preferred Stock (and not holders of Common Stock)
will have the right to vote on this matter. The holders of Preferred Stock, NR
Holdings Limited and NR Investments Limited, affiliates of Investcorp., S.A., an
international corporate investment company, have nominated two directors who are
executive officers of a subsidiary of Investcorp, S.A. With respect to this
matter, each holder of Preferred Stock as of the Record Date will be entitled to
one vote per share of the Preferred Stock.
Other Matters. The holders of the Common Stock and the holders of the
Preferred Stock will have the right to vote together, as a single class, on the
approval of the amendment to the Company's Amended and Restated 1998 Stock
Option Plan (the "1998 Stock Option Plan") and other matters properly brought
before the Annual Meeting, other than the election of the directors. With
respect to these matters, each holder of Common Stock as of the Record Date will
be entitled to one vote for each share held, and each holder of
<PAGE> 5
Preferred Stock as of the Record Date will be entitled to one vote per share of
Common Stock issuable upon conversion of the Preferred Stock as of the Record
Date.
PROXY PROCEDURE
Proxies properly executed and returned in a timely manner will be voted at
the Annual Meeting in accordance with the directions noted thereon. If no
direction is indicated, proxies will be voted for the election of the nominees
named herein as directors, for the approval of the amendment to our 1998 Stock
Option Plan, and in accordance with the judgment of the persons acting under the
proxies on other matters presented for a vote. Any stockholder giving a proxy
has the power to revoke it at any time before it is voted, either in person at
the Annual Meeting, by written notice to the Secretary of the Company or by
delivery of a later-dated proxy.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the inspectors of elections appointed for the Annual Meeting and will be counted
in determining whether or not a quorum is present. A proxy submitted by a
stockholder may indicate that all or a portion of the shares represented by such
proxy are not being voted by such stockholder with respect to a particular
matter ("non-voted shares"). This could occur, for example, when a broker is not
permitted to vote shares held in "street name" on certain matters in the absence
of instructions from the beneficial owner of the shares. Non-voted shares with
respect to a particular matter will not be considered shares present and
entitled to vote on such matter, although such shares will be counted for
purposes of determining the presence of a quorum. Shares voting to abstain as to
a particular matter, and directions to "withhold authority" to vote for
directors, will not be considered non-voted shares and will be considered
present and entitled to vote with respect to such matter.
VOTING REQUIREMENTS
The presence, in person or by proxy, of the holders of a majority of the
voting power of the outstanding shares of Common Stock and a majority of the
outstanding shares of Preferred Stock entitled to vote on every matter that is
to be voted on, without regard to class or series, shall constitute a quorum at
the Annual Meeting. Provided that a quorum is present, the affirmative vote of
the holders of a majority of the voting power of the shares of Common Stock
present in person or by proxy and entitled to vote at the Annual Meeting is
required for the approval of the election of the six directors for which only
holders of Common Stock are entitled to vote. Provided a quorum is present at
the Annual Meeting, the affirmative vote of the holders of a majority of the
voting power of the shares of Preferred Stock present in person or by proxy and
entitled to vote at the Annual Meeting is required to elect the two directors
for which only holders of Preferred Stock are entitled to vote. Provided that a
quorum is present, the affirmative vote of the holders of a majority of the
voting power of the shares of Common Stock and Preferred Stock, voting together
as a single class, present in person or by proxy and entitled to vote at the
Annual Meeting is required for the approval of the amendment to the 1998 Stock
Option Plan. Non-voted shares will have no effect on the matters brought to vote
at the Annual Meeting. Abstentions from voting on any of the matters brought to
a vote at the Annual Meeting will have the effect of votes against that
particular matter.
COSTS OF SOLICITATION
All costs of solicitation will be borne by the Company. The solicitation is
to be principally conducted by mail and may be supplemented by telephone and
personal contacts by directors, executive officers and employees of the Company,
without additional remuneration. Arrangements will be made with brokerage
houses, banks and custodians, nominees and other fiduciaries to forward
solicitation materials to the beneficial owners of stock held of record. The
Company will reimburse such persons for their reasonable out-of-pocket expenses
incurred in connection with the distribution of proxy materials.
2
<PAGE> 6
BIOGRAPHICAL INFORMATION REGARDING DIRECTORS/NOMINEES
AND EXECUTIVE OFFICERS
DIRECTOR NOMINEES FOR HOLDERS OF COMMON STOCK
Set forth below is biographical information for each nominee for election
as a director at the Annual Meeting by holders of shares of Common Stock. Each
such nominee is currently a member of the Company's Board of Directors.
JAMES L. KIRK, age 50, is a co-founder of the Company and has served as the
Chairman of the Board of the Company since August 1997 and as Chief Executive
Officer of the Company since April 1998. Mr. Kirk also served as President of
the Company from April 1998 until October 1998. From 1985 to February 1998, Mr.
Kirk was Chairman of the Board, President and Chief Executive Officer of OHM
Corporation ("OHM"), a leading environmental construction company.
THOMAS H. BRUINOOGE, age 56, joined the Company as a director in June 1998.
Mr. Bruinooge is an attorney who has been in private practice since 1968 and has
practiced with the firm of Bruinooge & Associates since 1987.
GARY L. GABRIEL, age 57, joined the Company as a director in June 1998.
Since September 1997, Mr. Gabriel has provided consulting services to the
Company on operational and business development matters. From January 1978 to
September 1997, Mr. Gabriel served as President of Sam's Equipment Rental, Inc.
and Gabriel Trailer Manufacturing Company, Inc. ("Sam's") which was acquired by
the Company in September 1997. In 1961, Mr. Gabriel co-founded a predecessor
company of Sam's.
IVAN W. GORR, age 70, joined the Company as a director in June 1999. Mr.
Gorr served as Chairman of the Board of Directors and Chief Executive Officer of
Cooper Tire & Rubber Company, a manufacturer of tires and other rubber products,
from 1989 until he retired in October 1994. Mr. Gorr also serves as a director
of Amcast Industrial Corporation, Arvin Industries, Inc. and Borg-Warner
Automotive, Inc.
HARRIS W. HUDSON, age 57, joined the Company as a director in June 1998.
Since May 1998, Mr. Hudson has served as Vice Chairman and a director of
Republic Services, Inc. ("Republic Services"), a solid waste collection and
disposal company. Mr. Hudson has served as a director of AutoNation, Inc.
("AutoNation"), the largest automotive retailer in the United States, since
August 1995 and as Vice Chairman of AutoNation since October 1996. Mr. Hudson
served as Chairman of AutoNation's Solid Waste Group from October 1996 until
July 1998. From 1983 until August 1995, Mr. Hudson served as Chairman of the
Board, Chief Executive Officer and President of Hudson Management Corporation, a
solid waste collection company, which was acquired by AutoNation in August 1995.
Mr. Hudson also serves as a director of Boca Resorts, Inc. ("Boca Resorts"), a
leisure, recreation and entertainment company which owns and operates luxury
resort hotels and a professional sports franchise. Mr. Hudson is the
brother-in-law of Mr. Huizenga.
H. WAYNE HUIZENGA, age 62, joined the Company as a director in June 1998.
Since August 1995, Mr. Huizenga has served as Chairman of the Board and, until
October 1999, as Co-Chief Executive Officer of AutoNation. Since May 1998, Mr.
Huizenga has served as Chairman of the Board of Republic Services. From May 1998
to December 1998, Mr. Huizenga also served as the Chief Executive Officer of
Republic Services. Since September 1996, Mr. Huizenga has served as the Chairman
of the Board of Boca Resorts. Since January 1995, Mr. Huizenga also has served
as the Chairman of the Board of Extended Stay America, Inc., an operator of
extended stay lodging facilities. From April 1987 through September 1994, Mr.
Huizenga served as the Chairman of the Board and Chief Executive Officer of
Blockbuster Entertainment Corporation ("Blockbuster"). In September 1994,
Blockbuster merged into Viacom, Inc. ("Viacom"), a diversified entertainment and
communications company. From September 1994 until October 1995, Mr. Huizenga
served as the Vice Chairman of Viacom and as the Chairman of the Board of
Blockbuster Entertainment Group, a division of Viacom. In 1971, Mr. Huizenga
co-founded Waste Management, Inc., and he served in various capacities,
including President, Chief Operating Officer and a director from its inception
until 1984. Mr. Huizenga owns the Miami Dolphins professional sports franchise,
as well as Pro Player Stadium in South Florida. He is a director of
theglobe.com, an internet company.
3
<PAGE> 7
DIRECTOR NOMINEES FOR HOLDERS OF PREFERRED STOCK
Set forth below is biographical information for each nominee for election
as a director at the Annual Meeting by holders of shares of Preferred Stock.
Each such nominee is a member of the Company's Board of Directors.
CHRISTOPHER J. O'BRIEN, age 41, joined the Company as a director in July
1999. Since 1993, Mr. O'Brien has been a member of the Management Committee of
Investcorp International, Inc. ("Investcorp"), a global investment group with
offices in New York, London and Bahrain. Prior to joining Investcorp, Mr.
O'Brien was a managing director of Mancuso & Company, a private New York-based
merchant bank that invests equity capital in the acquisition of middle-market
companies. Previously, he was a founding member of the Acquisition Finance Group
of Manufacturers Hanover Trust Co. and specialized in providing financing for
various Fortune 500 companies. Mr. O'Brien also serves on the board of directors
of The William Carter Company, CSK Auto Corporation, Independent Wireless One,
Synthetic Industries and Harborside Healthcare Corporation.
CHARLES J. PHILIPPIN, age 49, joined the Company as director in July 1999.
In 1994, Mr. Philippin joined Investcorp as a member of the Management
Committee. From 1982 to 1994, Mr. Philippin was a partner in the firm of Coopers
& Lybrand, and was the national director of mergers and acquisitions. Currently,
he is also a director of CSK Auto Corporation, Harborside Healthcare
Corporation, Saks Incorporated, Stratus Computer, Werner Holding Co., and The
William Carter Company.
EXECUTIVE OFFICERS
Set forth below is biographical information for each of the Company's
executive officers, none of whom is a nominee for director.
DON R. O'NEAL, age 53, joined the Company as President and Chief Operating
Officer in October 1998. From 1985 to October 1998, Mr. O'Neal served as
President of Ray L. O'Neal, Inc., a Texas corporation and Arenco, L.L.C., a
Texas limited liability company (collectively operating as "A-1 Rental"), which
was acquired by the Company in October 1998. Mr. O'Neal has served on the Board
of Directors of the American Rental Association and has served as President of
the Texas Rental Association. Mr. O'Neal has been in the equipment rental
business for over 30 years.
GENE J. OSTROW, age 45, is a co-founder of the Company and has served as
its Executive Vice President and Chief Financial Officer since August 1997. From
August 1997 to April 1998, Mr. Ostrow served as Secretary and Treasurer of the
Company. From March 1997 to October 1997, Mr. Ostrow was Vice President of
Corporate Development of OHM. From November 1994 to March 1997, Mr. Ostrow was a
Senior Vice President, Corporate Finance with Raymond James and Associates and
from July 1996 to March 1997, Mr. Ostrow was co-head of that firm's mergers and
acquisitions practice. From October 1993 to November 1994, Mr. Ostrow was Vice
President and Chief Financial Officer of Ecoscience Corporation. Mr. Ostrow was
employed by OHM and its affiliates from February 1986 to October 1993 in various
positions, including Vice President and Chief Financial Officer of OHM from
February 1986 through September 1991, and as Executive Vice President and Chief
Financial Officer of NSC Corporation (an affiliate of OHM) from July 1988
through October 1993. Mr. Ostrow is also a Certified Public Accountant.
PHILIP V. PETROCELLI, age 41, joined the Company as Executive Vice
President in February 1998. From August 1993 to February 1998, Mr. Petrocelli
was Vice President -- Western Region of OHM. Before joining OHM, Mr. Petrocelli
was a Regional Director and acting Vice President-Analytical Labs with IT
Corporation, a provider of engineering services, since September 1988.
PAMELA K.M. BEALL, age 43, joined the Company as Vice President and
Treasurer in April 1998. Ms. Beall also served as Secretary from April to
October 1998 and currently serves as Assistant Secretary.
4
<PAGE> 8
From June 1985 to April 1998, Ms. Beall served as Treasurer of OHM and in
various positions of increasing responsibility at OHM, most recently as Vice
President and Assistant Secretary. Before joining OHM, Ms. Beall was General
Manager, Treasury Services for USX Corporation, and previous to that she was
with Marathon Oil Company. From November 1996 to February 1998, Ms. Beall served
as a director of NSC Corporation, an affiliate of OHM. Since May 1996, Ms. Beall
has served as a director of System One Services, Inc.
KRIS E. HANSEL, age 42, joined the Company as Vice President and Controller
in March 1998. Prior to joining the Company, Mr. Hansel served in various
positions of increasing responsibility at OHM since 1988, most recently as Vice
President and Controller. Prior to joining OHM, Mr. Hansel was General
Accounting Manager of WearEver-Proctor Silex, Inc.
JOSEPH H. IZHAKOFF, age 34, joined the Company as Vice President and
General Counsel in September 1998. Commencing October 1998, Mr. Izhakoff also
began serving as Secretary. Prior to joining the Company, Mr. Izhakoff was an
attorney at Akerman, Senterfitt & Eidson, P.A. since August 1995, most recently
as a shareholder of the firm, where his practice focused on corporate and
securities matters and mergers and acquisitions.
THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors has the responsibility for establishing broad
corporate policies and for the overall performance of the Company. Messrs. Kirk,
Bruinooge, Gabriel, Gorr, Hudson, Huizenga, O'Brien and Philippin are the
members of the Board. The Board held a total of five meetings and acted on seven
occasions by unanimous written consent during the fiscal year ended December 31,
1999. The Board has established an Executive Committee, an Audit Committee and a
Compensation Committee to assist it in carrying out its duties.
The Executive Committee has the same powers and authority as the Board of
Directors, subject to the limitations of the Delaware General Corporation Law,
the Certificate of Incorporation, as amended (the "Certificate") and the Amended
and Restated Bylaws (the "Bylaws") and further subject to limitations with
respect to certain mergers, acquisitions, incurrence or refinancing of
indebtedness, purchase or sale of securities, strategic business plans,
composition of the Board of Directors and certain committees and transactions
with affiliates. Messrs. Kirk and Huizenga are the members of the Executive
Committee. The Executive Committee acted on 20 occasions by unanimous written
consent during fiscal year ended December 31, 1999.
The Audit Committee recommends the annual appointment of the Company's
auditors, with whom the Audit Committee reviews the scope of audit and non-audit
assignments and related fees, accounting principles used by the Company in
financial reporting, internal auditing procedures and the adequacy of the
Company's internal control procedures. Messrs. Bruinooge and Gorr, who are
independent directors, serve as the members of the Audit Committee. The Audit
Committee held four meetings during the fiscal year ended December 31, 1999.
The Compensation Committee administers and establishes the Company's stock
option, bonus and other compensation plans, including the Company's 1998 Stock
Option Plan and the 401(k) Plan, and determines compensation for the Company's
executive officers. Messrs. Bruinooge and Hudson, who are non-employee
directors, are the members of the Compensation Committee. The Compensation
Committee held two meetings and acted on one occasion by unanimous written
consent during fiscal year ended December 31, 1999.
COMPENSATION OF DIRECTORS
The 1998 Stock Option Plan provides for an automatic grant of options to
purchase 50,000 shares of Common Stock to each member of the Board of Directors
who joins the Board as a non-employee director. In addition, the 1998 Stock
Option Plan provides for an additional automatic grant of options to purchase
10,000 shares of Common Stock at the beginning of each fiscal year to each
non-employee director continuing to
5
<PAGE> 9
serve on the Board at such time. The 1998 Stock Option Plan also provided for
the automatic grant of options to purchase 50,000 shares of Common Stock to each
member of the Board who was a non-employee director at the time of the Company's
initial public offering. All automatic option grants to non-employee directors
are fully vested and immediately exercisable. In addition, all automatic option
grants to non-employee directors remain exercisable for a term of ten years from
the date of grant so long as such person remains a member of the Board. Each
automatic grant is exercisable at a price per share equal to the closing price
of a share of Common Stock on the New York Stock Exchange on the date
immediately prior to the automatic grant date. In addition to automatic option
grants, directors are reimbursed for their reasonable expenses incurred in
connection with their attendance at Board and Committee meetings.
In September 1997, in connection with the acquisition of Sam's, the Company
entered into an agreement with Gary L. Gabriel pursuant to which Mr. Gabriel
provides certain consulting services to the Company. See "Certain Relationships
and Related Transactions."
6
<PAGE> 10
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The following statements made by the Compensation Committee shall not be
deemed incorporated by reference into any filing under the Securities Act of
1933, as amended (the "Securities Act"), or the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and shall not otherwise be deemed filed under
either of such acts.
The Compensation Committee administers and establishes the Company's stock
option, bonus and other compensation plans, including the Company's 1998 Stock
Option Plan and the 401(k) Plan, and determines the compensation of the
Company's executive officers. Through competitive compensation, primarily
composed of base compensation, cash bonuses and stock options, the Company
endeavors to attract and maintain high caliber executives, whose interests are
aligned with those of the Company's stockholders. The Compensation Committee
takes into account a variety of factors in determining executive compensation
including business conditions in general and in our business during the year,
our performance during the year in light of these conditions, the market
compensation for executives of similar background and experience, and the
performance of the business for which the executive officer is responsible. The
Company prefers to emphasize incentive forms of compensation, including stock
options, so that an executive's interests are aligned with the interests of our
stockholders. By providing incentive-based compensation such as stock options,
the Compensation Committee believes that this provides the executive with a
vested interest in the long-term success of the Company and encourages the
executive to work towards the long-term interests of the Company and its
stockholders.
In determining executive compensation, the Compensation Committee considers
the anticipated tax treatment of payments and benefits to the Company and to the
recipient executive officers. It is the Company's intention that the
compensation paid to its executive officers be tax deductible under Section
162(m) of the Internal Revenue Code, as amended (the "Code"), when appropriate
and applicable. Further interpretation of, or change in, the tax laws beyond the
Compensation Committee's control could affect the deductibility of executive
compensation.
Mr. Kirk, our Chief Executive Officer, was paid an annual salary of
$250,000 for the fiscal year ended December 31, 1999. In June 1999, the
Compensation Committee approved a grant of options to Mr. Kirk under the 1998
Stock Option Plan to purchase 300,000 shares of Common Stock exercisable at a
price of $5.5625 per share. These options have a 10-year term and vest in four
equal annual installments beginning on June 6, 2000. The Compensation Committee
believes that tying the remuneration of Mr. Kirk to the performance of the
Common Stock will enhance the long-term performance and stability of the
Company.
Thomas H. Bruinooge
Harris W. Hudson
As Members of the Compensation
Committee
7
<PAGE> 11
COMPENSATION TABLES
The Company was formed in August 1997 and did not pay any compensation to
its Chief Executive Officer and did not pay salary and bonus in excess of
$100,000 to any of its executive officers for the period from August 14, 1997
(inception) to December 31, 1997. The following table sets forth the annual base
salaries and other compensation that the Company paid for the years ended
December 31, 1998 and 1999 to the named executive officers below (the "Named
Executive Officers") and certain options to purchase Common Stock which the
Company has granted to the Named Executive Officers:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL SECURITIES
COMPENSATION UNDERLYING OPTIONS
FISCAL ----------------- OTHER ANNUAL TO PURCHASE SHARES
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OF COMMON STOCK
- --------------------------- ------ -------- ------ ------------ ------------------
<S> <C> <C> <C> <C> <C>
James L. Kirk(1)................................ 1999 $250,000 -- $112,269(2) 300,000(3)
Chairman of the Board 1998 109,616 -- 188,510(4) 250,000(5)
and Chief Executive Officer
Don R. O'Neal(1)................................ 1999 259,615 -- -- 175,000(3)
President and 1998 54,654 -- -- 100,000(6)
Chief Operating Officer
Gene J. Ostrow.................................. 1999 257,693 60,000 19,499(2) 175,000(3)
Executive Vice President 1998 196,154 -- -- 100,000(5)
and Chief Financial Officer
Philip V. Petrocelli(1)......................... 1999 257,693 60,000 28,236 175,000(3)
Executive Vice President 1998 166,923 -- 62,199(4) 346,472(7)
Joseph H. Izhakoff(1)........................... 1999 190,859 50,000 -- 65,000(3)
Vice President, Secretary and General Counsel 1998 61,193 -- -- 150,000(8)
</TABLE>
- ---------------
(1) Although Mr. Kirk joined the Company as an officer in April 1998, the
Company did not begin paying salary to Mr. Kirk until August 1998 following
the Company's initial public offering. Mr. O'Neal joined the Company in
October 1998, Mr. Petrocelli joined the Company in February 1998 and Mr.
Izhakoff joined the Company in September 1998.
(2) Consists of relocation expenses of $71,774 for Mr. Kirk and $12,541 for Mr.
Ostrow. Also, Board policy expressly directs that certain executive officers
use the Company's corporate aircraft to the fullest extent for business and
personal travel and that personal aircraft use be reported as compensation.
Under the IRS formula, the personal use of Company aircraft was calculated
to be $40,495 for Mr. Kirk and $6,958 for Mr. Ostrow.
(3) These options have an exercise price of $5.5625 per share and vest over a
four-year period at the rate of 25% per year commencing June 29, 2000. These
options become immediately exercisable upon a change of control of the
Company (as defined in the 1998 Stock Option Plan).
(4) Consists of relocation expenses.
(5) These options have an exercise price of $8.00 per share and vest over a
four-year period at the rate of 25% per year commencing August 6, 1999.
These options become immediately exercisable upon a change of control of the
Company (as defined in the 1998 Stock Option Plan).
(6) These options have an exercise price of $5.50 per share and vest over a
four-year period at the rate of 25% per year commencing on October 23, 1999.
These options become immediately exercisable upon a change of control of the
Company (as defined in the 1998 Stock Option Plan).
(7) These options have an exercise price of $5.77 per share and vest over a
four-year period at the rate of 25% per year commencing on February 24,
1999. These options become immediately exercisable upon a change of control
of the Company (as defined in the option agreement related to such options).
(8) These options have an exercise price of $7.00 per share and vest over a
four-year period at the rate of 25% per year commencing on September 1,
1999. These options become immediately exercisable upon a change of control
of the Company (as defined in the 1998 Stock Option Plan).
8
<PAGE> 12
OPTION GRANT TABLE
The following table sets forth certain information concerning grants of
stock options made to the Named Executive Officers during the fiscal year ended
December 31, 1999.
<TABLE>
<CAPTION>
NUMBER OF % OF TOTAL POTENTIAL REALIZABLE VALUE
SECURITIES OPTIONS AT ASSUMED ANNUAL RATES
UNDERLYING GRANTED TO OF STOCK PRICE APPRECIATION
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION ----------------------------
NAME GRANTED FISCAL YEAR PRICE DATE 5% 10%
- ---- -------------- ------------- -------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
James L. Kirk............................. 300,000 shares 11.08% $5.5625 06/29/09 $1,049,468 $2,659,557
Chairman of the Board and Chief
Executive Officer
Don R. O'Neal............................. 175,000 shares 6.47% $5.5625 06/29/09 $ 612,190 $1,551,409
President and Chief Operating Officer
Gene J. Ostrow............................ 175,000 shares 6.47% $5.5625 06/29/09 $ 612,190 $1,551,409
Executive Vice President and Chief
Financial Officer
Philip V. Petrocelli...................... 175,000 shares 6.47% $5.5625 06/29/09 $ 612,190 $1,551,409
Executive Vice President
Joseph H. Izhakoff........................ 65,000 shares 2.40% $5.5625 06/29/09 $ 227,385 $ 576,238
Vice President, Secretary and General
Counsel
</TABLE>
Certain of the Company's executive officers and other employees have been
granted stock options to purchase shares of the Company's Common Stock prior to
the adoption of the 1998 Stock Option Plan. As of December 31, 1999, there were
outstanding options, granted prior to the adoption of the plan, to purchase
992,569 shares at exercise prices ranging from $2.96 per share to $6.67 per
share of which 329,325 were immediately exercisable at that time. These options
vest over a four-year period at the rate of 25% per year commencing on the first
anniversary of the date of grant. Also, these options become immediately
exercisable upon a change in control of the Company. A "change in control" of
the Company is deemed to occur when any person becomes the beneficial owner of
or acquires voting control with respect to more than 50% of the Common Stock or
any person has the ability to elect or to cause the election of directors
consisting at the time of such election of a majority of the Board.
The Company's executive officers receive health benefits which do not
exceed 10% of their respective salaries. These benefits are also provided to
other employees of the Company. See "--1998 Stock Option Plan." In October 1998,
in connection with the acquisition of A-1 Rental, the Company entered into an
employment agreement with Don R. O'Neal to serve as the Company's President and
Chief Operating Officer. See "Certain Relationships and Related Transactions."
9
<PAGE> 13
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
The following table sets forth certain information regarding the options
exercised by the Named Executive Officers during the fiscal year ended 1999 and
the value of options outstanding for such individuals at December 31, 1999.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-THE-
OPTIONS/SARS AT MONEY OPTIONS/SARS AT
SHARES DECEMBER 31, 1999 DECEMBER 31, 1999
ACQUIRED VALUE ---------------------------- ----------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James L. Kirk.......................... -- -- 62,500 487,500 -- $18,750
Chairman of the Board and Chief
Executive Officer
Don R. O'Neal.......................... -- -- 25,000 250,000 $3,125 $20,313
President and Chief Operating Officer
Gene J. Ostrow......................... -- -- 25,000 250,000 -- $10,938
Executive Vice President and Chief
Financial Officer
Philip V. Petrocelli................... -- -- 86,618 434,854 -- $10,938
Executive Vice President
Joseph H. Izhakoff..................... -- -- 37,500 177,500 -- $10,938
Vice President, Secretary and General
Counsel
</TABLE>
1998 STOCK OPTION PLAN
The Board of Directors and stockholders adopted the 1998 Stock Option Plan,
effective August 6, 1998. Pursuant to the 1998 Stock Option Plan, as amended,
options to acquire a maximum of 7,000,000 shares of Common Stock may be granted
to employees, directors (including employee and non-employee directors) and
certain independent contractors and consultants of the Company or any Subsidiary
(as defined in the therein). As of December 31, 1999, there were outstanding
options to purchase 4,697,427 shares at exercise prices ranging from $5.50 per
share to $8.00 per share granted under the 1998 Stock Option Plan, 872,326 of
which were immediately exercisable at that time.
The Compensation Committee administers the 1998 Stock Option Plan. The
Compensation Committee determines which persons will receive options and the
number of options to be granted to such persons. The 1998 Stock Option Plan also
provides for annual mandatory grants of options to non-employee directors. See
"Biographical Information Regarding Directors/Nominees and Executive
Officers -- Compensation of Directors." The Board of Directors or the
Compensation Committee, as the case may be, will make all determinations that it
may deem necessary or advisable for the administration of the 1998 Stock Option
Plan.
Pursuant to the 1998 Stock Option Plan, the Company may grant Incentive
Stock Options ("ISOs") as defined in Section 422 of the Code, and Non-Qualified
Stock Options ("NQSOs"), not intended to qualify under Section 422 of the Code.
The price at which the Common Stock may be purchased upon the exercise of
options granted under the 1998 Stock Option Plan will be required to be not less
than the per share fair market value of the Common Stock on the date the
particular options are granted. Options granted under the 1998 Stock Option Plan
may have maximum terms of not more than ten years and are not transferable,
except by will or the laws of descent and distribution. None of the ISOs under
the 1998 Stock Option Plan may be granted to an individual owning more than 10%
of the total combined voting power of all classes of stock the Company issued
unless the purchase price of the Common Stock under such option is at least 110%
of the fair market value of the shares issuable on exercise of the option
determined as of the date the option is granted, and such option is not
exercisable more than five years after the grant date.
Generally, options granted under the 1998 Stock Option Plan terminate upon
the date the person to whom such options were granted is no longer employed or
retained by the Company or serving on our Board of
10
<PAGE> 14
Directors other than by reason of permanent and total disability as that term is
defined therein. However, if any of the options granted under the Plan had
vested by such date, then the person to whom such options were granted has five
business days during which he or she may exercise any vested options, provided
such person was not terminated by the Company for cause.
Options granted pursuant to the 1998 Stock Option Plan, unless otherwise
determined by the Board of Directors, vest over a four-year period at the rate
of 25% per year commencing on the first anniversary of the date of grant. These
options become immediately exercisable upon a change in control of the Company.
A "change in control" of the Company is deemed to occur when any person becomes
the beneficial owner of or acquires more than 50% of the total combined voting
power with respect to the election of directors of the Company's issued and
outstanding capital stock.
The 1998 Stock Option Plan also provides that, upon the death or permanent
and total disability of an optionee, the optionee's estate or the optionee has
three years, from the date of such death or disability and prior to the
termination of the option period, to exercise the number of vested options held
by the optionee on the date of death or disability.
ISOs granted under the 1998 Stock Option Plan are subject to the
restriction that the aggregate fair market value (determined as of the date of
grant) of options which first become exercisable in any calendar year cannot
exceed $100,000.
The 1998 Stock Option Plan provides for appropriate adjustments in the
number and type of shares covered by it and options granted thereunder in the
event of any reorganization, dissolution, liquidation, recapitalization or
certain other transactions involving the Company.
401(k) PLAN
The Company's 401(k) Retirement Savings Plan (the "401(k) Plan") provides
retirement and other benefits to its employees and permits employees a means to
save for their retirement. The 401(k) Plan is intended to be a tax-qualified
plan under Section 401(a) of the Code.
11
<PAGE> 15
PERFORMANCE GRAPH
The following graph compares the Company's cumulative total stockholder
return on the Common Stock with that of (1) Standard & Poor's 500 Stock Index
and (2) a peer group of selected companies that the Company believes are the
most comparable to the Company. The peer group consists of United Rentals, Inc.,
Neff Corp., National Equipment Services, Inc. and RDO Equipment Co. The chart
assumes that $100 was invested on August 7, 1998, the date that the Common Stock
began trading on the New York Stock Exchange, at the initial offering price of
$8.00 per share.
CUMULATIVE TOTAL RETURN
(graphic omitted)
<TABLE>
<CAPTION>
NATIONSRENT S&P 500 INDEX PEER GROUP
----------- ------------- ----------
<S> <C> <C> <C>
August 7, 1998 100.00 100.00 100.00
December 1998 71.88 113.41 85.50
December 1999 70.31 137.27 47.29
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee was an officer or employee of the
Company or of any of its subsidiaries during the prior year or was formerly an
officer of the Company or of any of its subsidiaries. During the last fiscal
year, none of the executive officers of the Company have served on the board of
directors or compensation committee of any other entity, any of whose officers
served either on the Board of the Company or on the Compensation Committee of
the Company.
12
<PAGE> 16
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 20, 2000, information with
respect to the beneficial ownership of the Common Stock by (1) each person or
entity known to the Company to beneficially own more than 5% of the outstanding
shares of Common Stock, (2) each of the Company's directors and each Named
Executive Officer, and (3) all of the Company's directors and executive officers
as a group. Unless otherwise indicated, each such stockholder has sole voting
and investment power with respect to the shares beneficially owned by such
stockholder. Percentages of shares beneficially owned are based upon 58,566,079
shares of Common Stock outstanding as of March 20, 2000, plus for each person
named below any shares of Common Stock that may be acquired by such person
within 60 days of such date upon exercise of outstanding options or other
rights.
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY PERCENT OF
NAME OWNED COMMON STOCK
- ---- ---------------- ------------
<S> <C> <C>
Investcorp S.A.............................................. 14,997,214(1) 20.6%
37 rue Notre-Dame
Luxembourg
Sipco Limited............................................... 14,997,214(2) 20.6%
West Wind Building
P.O. Box 1111
Harbour Drive
Grand Cayman, Cayman Islands, B.W.I
NR Holdings Limited......................................... 11,285,714(3) 16.2%
West Wind Building
P.O. Box 1111
Harbour Drive
Grand Cayman, Cayman Islands, B.W.I
H. Family Investments, Inc.(4).............................. 12,000,000 20.5%
450 East Las Olas Blvd
Ft. Lauderdale, Florida 33301
James L. Kirk............................................... 12,061,765(5) 20.6%
Don R. O'Neal............................................... 5,069,531(6) 8.7%
Gene J. Ostrow.............................................. 1,004,500(7) 1.7%
Philip V. Petrocelli........................................ 297,012(8) *
Joseph H. Izhakoff.......................................... 37,500(9) *
H. Wayne Huizenga........................................... 1,702,047(10) 2.9%
Harris W. Hudson............................................ 1,033,650(11) 1.8%
Gary L. Gabriel............................................. 481,250(12) *
Thomas H. Bruinooge......................................... 107,092(13) *
Ivan W. Gorr................................................ 65,700(14) *
Christopher J. O'Brien...................................... 85,000(14) *
Charles J. Philippin........................................ 135,000(14) *
All executive officers and directors as a group
(14 persons).............................................. 22,324,907(15) 37%
</TABLE>
- ---------------
* Less than 1%
(1) Investcorp S.A. does not directly own any shares of Common Stock or
Preferred Stock. Includes 14,285,714 shares of Common Stock issuable upon
conversion of 100,000 shares of Preferred Stock that Investcorp S.A. may be
deemed to beneficially own, which shares of Preferred Stock are directly
owned by NR Holdings Limited ("NR Holdings") and NR Investments Limited
("NR Investments"). The voting securities of NR Holdings and NR Investments
are owned by certain persons and/or entities which
13
<PAGE> 17
indirectly are managed by affiliates of Investcorp (the "Managed Entities")
through revocable management services or similar agreements between such
persons and/or entities or their shareholders or principals and an
affiliate of Investcorp S.A. pursuant to which each such person or entity
indirectly has granted such affiliate of Investcorp the authority to direct
the voting of the voting securities of NR Holdings and/or NR Investments
for so long as such agreement is in effect. Also includes 711,500 shares of
Common Stock which Investcorp S.A. may be deemed to beneficially own, which
are directly held by Ref Equity Limited ("REF") on behalf of certain
entities (the "REF Managed Entities"), which indirectly are managed by
affiliates of Investcorp S.A. through revocable management services or
similar agreements between such entities or their shareholders or
principals and an affiliate of Investcorp pursuant to which each such
entity indirectly has granted such affiliate the authority to direct the
voting and disposition of its equity interests in REF for so long as such
agreement is in effect.
(2) Constitute the same shares as those disclosed in the table as beneficially
owned by Investcorp S.A. Sipco Limited ("Sipco") does not directly own any
shares of Common Stock or Preferred Stock. Sipco, which is a passive
holding company entity without operations or employees, may be deemed to
control Investcorp S.A. through its ownership of a majority of the stock of
a company which indirectly owns a majority of the outstanding stock of
Investcorp S.A.
(3) Represent shares of Common Stock issuable upon conversion of shares of
Preferred Stock held by NR Holdings. NR Holdings shares voting and
dispositive power with respect to these shares with Investcorp S.A., Sipco
and the Managed Entities. See footnotes (1) and (2) above.
(4) H. Family Investments, Inc. ("HFI") is a Florida corporation controlled by
H. Wayne Huizenga, Jr., the son of Mr. Huizenga.
(5) 11,999,265 of these shares are held by Kirk Holdings Limited Partnership, a
Nevada limited partnership controlled by Mr. Kirk. Includes 62,500 shares
of Common Stock issuable upon exercise of options, which are exercisable
within 60 days.
(6) Includes 775,180 shares of Common Stock owned by Mr. O'Neal's spouse, as to
which Mr. O'Neal disclaims beneficial ownership. Also includes 2,452,564
shares of Common Stock in the name of the 1997 Ray L. O'Neal and Ellen M.
O'Neal irrevocable trust for Don R. O'Neal of which Mr. O'Neal is a
trustee. Also includes 25,000 shares of Common Stock issuable upon exercise
of options, which are immediately exercisable.
(7) Includes 25,000 shares of Common Stock issuable upon exercise of options,
which are immediately exercisable.
(8) Includes 173,236 shares of Common Stock issuable upon exercise of options,
which are immediately exercisable.
(9) Includes 37,500 shares of Common Stock issuable upon exercise of options,
which are immediately exercisable.
(10) 1,632,047 of these shares are held by Huizenga Investments Limited
Partnership ("HILP"), a Nevada limited partnership controlled by Mr.
Huizenga. Also includes 70,000 shares of Common Stock issuable upon
exercise of options, which are immediately exercisable. The number of
shares of Common Stock beneficially owned by Mr. Huizenga does not include
the 12,000,000 shares of Common Stock held by H. Family Investments, Inc.
because Mr. Huizenga does not share voting or dispositive control of such
shares and disclaims beneficial ownership of such shares.
(11) Includes 250,000 shares of Common Stock owned by Mr. Hudson's spouse, as to
which Mr. Hudson disclaims beneficial ownership. Also includes 70,000
shares of Common Stock issuable upon exercise of options, which are
immediately exercisable.
(12) Includes 411,250 shares of Common Stock issuable upon conversion of
convertible promissory notes in an aggregate principal amount of $3.29
million, which are convertible at a price of $8.00 per share of Common
Stock. Also includes 70,000 shares of Common Stock issuable upon exercise
of options, which are immediately exercisable.
(13) Includes 70,000 shares of Common Stock issuable upon exercise of options,
which are immediately exercisable.
(14) Includes 60,000 shares of Common Stock issuable upon exercise of options,
which are immediately exercisable.
(15) Includes (a) an aggregate of 1,334,524 shares of Common Stock issuable upon
exercise of options held by certain executive officers and directors, which
are immediately exercisable or exercisable within 60 days and (b) 411,250
shares of Common Stock issuable upon conversion of convertible promissory
notes beneficially owned by Mr. Gabriel.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires officers and directors, and
persons who own more than ten percent of a registered class of the Company's
equity securities, to file reports of ownership and changes in ownership with
the Securities and Exchange Commission (the "SEC"). Officers, directors and
greater than ten-percent stockholders are required by the SEC regulations to
furnish the Company with copies of all Section 16(a) reports they file.
Based solely upon review of the copies of such reports furnished to the
Company and written representations from certain executive officers and
directors that no other such reports were required, the Company believes that
during fiscal year ended December 31, 1999, all Section 16(a) filing
requirements applicable to its officers, directors and greater than ten-percent
beneficial owners were complied with on a timely basis.
14
<PAGE> 18
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In August 1997, H. Family Investments, Inc. and Messrs. Kirk and Ostrow
founded the Company (collectively, the "Founders"). The Founders committed an
aggregate of $48.4 million in equity capital to the Company which was funded at
various times from September 1997 through June 2, 1998 as required to complete
acquisitions. The Founders entered into lock-up agreements with the underwriters
of the Company's initial public offering (the "Founders' Lock-up Agreements")
pursuant to which they agreed not to offer, sell or otherwise dispose of any
shares of Common Stock or any security, convertible into, exercisable for or
exchangeable for shares of Common Stock until February 1999. In August 1998, the
Company registered with the SEC for resale, subject to the Founders' Lock-up
Agreements, under the Securities Act and applicable state securities laws the
shares of Common Stock held by the Founders. The Company paid registration
expenses incidental to such registration, excluding underwriters' commissions
and deductions.
In September 1997, the Company acquired Sam's for $23.4 million from Gary
L. Gabriel, Troy L. Gabriel and certain trusts controlled by them. The Company
paid a portion of the purchase price to Gary L. Gabriel and certain trusts
controlled by him in the form of (1) unsecured promissory notes in the aggregate
original principal amount of approximately $2.6 million which bear interest at
the rate of 8.5% per annum, (2) an unsecured convertible promissory note, as
amended, in the original principal amount of approximately $0.7 million which
bears interest at the rate of 8.0% per annum, and (3) unsecured contingent
convertible promissory notes, as amended, in the aggregate original principal
amount of $3.0 million which bear interest at the rate of 8.0% per annum. As of
December 31, 1999, the aggregate principal amount remaining outstanding under
such notes was $3.3 million. As part of the Sam's acquisition, the Company
entered into certain leases, as amended, on four properties used in its
operations from TTG Properties, an Ohio general partnership ("TTG"), of which
Gary L. Gabriel and Troy L. Gabriel are general partners. Each of the four
leases to which the Company and TTG are a party commenced on October 1, 1997,
provides for an initial term of 10 years, with three automatic five-year
extensions. Under the leases, the Company has the option to purchase the leased
premises at any time within the last five years of the initial lease term at a
fixed price. The aggregate monthly rental payment to TTG under the leases on the
four properties is $51,000. In addition, the Company has entered into leases for
two facilities in Ohio, from TTG, each with a ten-year term and two automatic
five-year extensions. The aggregate monthly rental payment to TTG under these
leases is $27,000. Also, in connection with the Sam's acquisition, Sam's entered
into an agreement with Gary L. Gabriel pursuant to which Mr. Gabriel provides
certain consulting services to the Company. This agreement has a three year term
which automatically renews for an additional one year term. This agreement
provides for annual compensation of $100,000, and use of a leased vehicle and up
to $30,000 of rental equipment per year. The agreement provides that if Mr.
Gabriel's services are terminated at any time without cause, he will be entitled
to receive one year's annual compensation as severance.
On June 2, 1998, the Company sold an aggregate of 5,118,694 shares of
Common Stock in a private placement for aggregate proceeds of $27.6 million
which represented approximately 17.0% of the Company's Common Stock outstanding
following the transaction. The table below sets forth the Company's officers and
directors who participated in such private placement and the number of shares of
Common Stock acquired in such transaction:
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME OF COMMON STOCK
---- ----------------
<S> <C>
H. Wayne Huizenga 1,632,047(1)
Harris W. Hudson 463,650
Philip V. Petrocelli 111,276
Pamela K.M. Beall 92,730
Kris E. Hansel 37,092
Thomas H. Bruinooge 37,092
</TABLE>
- ---------------
(1) These shares held by HILP.
15
<PAGE> 19
The holders of the shares of Common Stock issued in the June 1998 private
placement entered into lock-up agreements, which expired in February 1999, with
the underwriters of the Company's initial public offering similar to its
Founders' Lock-up Agreements described above. The Company registered with the
SEC for resale, subject to the lock-up agreements, under the Securities Act of
1933, as amended, and applicable state securities laws the shares of Common
Stock issued in the June 1998 private placement. The Company paid the
registration expenses incidental to such registration, excluding underwriters'
commissions and discounts.
In February 2000, in connection with the satisfaction of certain earnings
targets, the Company paid as additional consideration $10.0 million in cash and
issued 1,721,664 shares of Common Stock (representing $10.0 million) to A-1
Rental, which was acquired by the Company in October 1998 and is controlled by
Mr. O'Neal and members of his family. Also, in connection with the acquisition
of A-1 Rental, Mr. O'Neal entered into a two-year employment agreement to serve
as the Company's President and Chief Operating Officer for a minimum annual
salary of $250,000. Contemporaneously with the acquisition of A-1 Rental, the
Company also entered into leases with entities affiliated with Mr. O'Neal for 15
properties used in connection with the business of A-1 Rental. The lease
agreements, which have initial terms ranging from one to five years, require
aggregate monthly rental payments of approximately $127,000.
The Company has entered into certain contracts for building construction
with Alvada Construction, Inc., an entity controlled by Mr. Kirk's brother. As
of December 31, 1999, the aggregate amount paid under these contracts was
approximately $1.6 million.
The Company leases the office space and parking for our corporate
headquarters from Boca Resorts. As of December 31, 1999, the monthly lease
amount payable by the Company is approximately $44,000, which amount includes a
share of the operating expenses for this location based upon estimated usage. In
addition, the Company licenses from Boca Resorts the use of an executive suite
at the National Car Rental Center, which is operated by Boca Resorts, for a fee
of $95,000 per annum for a term of seven years, subject to a maximum increase
per year of five percent. The Company may also enter into a sponsorship
agreement with Boca Resorts for certain sponsorship, marketing and advertising
services. Mr. Huizenga is Chairman of the Board of Boca Resorts and controls a
majority of the voting interests of Boca Resorts. Mr. Hudson is also a director
of Boca Resorts.
In addition, the Company has entered into a license agreement with South
Florida Stadium Corporation at Pro Player Stadium, a professional sports stadium
in South Florida which is owned by Mr. Huizenga, for the use of an executive
suite at Pro Player Stadium for a fee of approximately $166,000 per year for a
term of seven years, subject to yearly increases related to increases in ticket
prices and an additional increase of a maximum of five percent.
Messrs. Philippin and O'Brien are executive officers of Investcorp, a
subsidiary of Investcorp S.A. An affiliate of Investcorp received a placement
fee of $4.0 million in connection with the purchase of the Preferred Stock by NR
Holdings and NR Investments, which are also affiliates of Investcorp. The
private placement of the Preferred Stock to these entities took place in two
steps. In July 1999, we sold $78.0 million of the Preferred Stock, and in August
1999, following stockholder approval at a special meeting of stockholders, we
sold the remaining $22.0 million. NR Holdings and NR Investments are entitled to
certain demand and piggyback registration rights and tag-along rights with
respect to the shares of Common Stock issuable upon conversion of the Preferred
Stock.
With respect to transactions discussed in this section, no independent
determination has been made as to the fairness or reasonableness of the terms
thereof. The Company believes, however, based on its prior experience, that the
terms of each transaction were as favorable to the Company as it could have
obtained from an unaffiliated party.
16
<PAGE> 20
PROPOSAL 1. ELECTION OF DIRECTORS
The Company's Bylaws provide that the number of directors shall be fixed
from time to time by resolution of the stockholders or the Board of Directors
and shall consist of no more than 12 members. The Board of Directors currently
consists of eight members. The holders of shares of Common Stock are entitled to
elect six directors and holders of shares of Preferred Stock are entitled to
elect two additional directors.
ELECTION OF DIRECTORS BY HOLDERS OF COMMON STOCK
The holders of shares of Common Stock are entitled to elect all of the
members to the Company's Board of Directors other than persons nominated and to
be elected by the holders of shares of the Preferred Stock. In February 2000,
the Board of Directors nominated six of its then present members for re-election
as directors for a term expiring at the Company's 2001 Annual Meeting of
Stockholders or until a successor of each has been elected and qualified. All
the nominees have indicated their willingness to serve, and unless otherwise
specified in the proxy, it is the intention of the proxy holders to vote for the
nominees listed below.
With respect to holders of shares of Common Stock, the confirmed nominees
for the Board of Directors for a term expiring at the Company's 2001 Annual
Meeting of Stockholders or until a successor of each is duly elected and
qualified are as follows:
<TABLE>
<S> <C>
Thomas H. Bruinooge Harris W. Hudson
Gary L. Gabriel H. Wayne Huizenga
Ivan W. Gorr James L. Kirk
</TABLE>
ELECTION OF DIRECTORS BY HOLDERS OF PREFERRED STOCK
The holders of shares of Preferred Stock are entitled to elect two members
to the Company's Board of Directors. In February 2000, at the direction of the
holders of shares of the Preferred Stock, NR Holdings Limited and NR Investments
Limited, affiliates of Investcorp, S.A., the Board of Directors nominated two of
its then present members for re-election as directors for a term expiring at the
Company's 2001 Annual Meeting of Stockholders or until a successor of each has
been elected and qualified. All the nominees have indicated their willingness to
serve, and unless otherwise specified in the proxy, it is the intention of the
proxy holders to vote for the nominees listed below.
With respect to holders of shares of Preferred Stock, the confirmed
nominees for the Board of Directors for a term expiring at the Company's 2001
Annual Meeting of Stockholders or until a successor of each is duly elected and
qualified are as follows:
Christopher J. O'Brien
Charles J. Philippin
The holders of the Preferred Stock have indicated their intention to vote
for the election of their director nominees listed above. Biographical
information relating to each of these nominees for directors appears under the
heading "Biographical Information Regarding Directors/Nominees and Executive
Officers."
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
PROXY CARDS EXECUTED AND RETURNED WILL BE VOTED FOR THIS PROPOSAL UNLESS
CONTRARY INSTRUCTIONS ARE INDICATED THEREON.
17
<PAGE> 21
PROPOSAL 2. APPROVAL OF THE AMENDMENT TO THE 1998 STOCK OPTION PLAN
In March 2000, the Board of Directors adopted, subject to stockholder
approval, an amendment to the 1998 Stock Option Plan (the "Amendment"). At the
Annual Meeting, the stockholders are being asked to approve the Amendment. The
Amendment amends Section 5 of the 1998 Stock Option Plan to increase from
7,000,000 to 10,000,000 the maximum number of shares of Common Stock subject to
awards under the 1998 Stock Option Plan. If the Amendment does not become
effective, the maximum number of shares of Common Stock subject to awards under
the 1998 Stock Option Plan would remain at 7,000,000.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
PROXY CARDS EXECUTED AND RETURNED WILL BE VOTED FOR THIS PROPOSAL UNLESS
CONTRARY INSTRUCTIONS ARE INDICATED THEREON.
OTHER MATTERS
Arthur Andersen LLP served as the Company's independent auditors for the
fiscal year ending December 31, 1999. Representatives of Arthur Andersen LLP are
expected to appear at the Annual Meeting to make a statement, if they wish to do
so, and to be available to answer appropriate questions from stockholders at
that time. The Board of Directors is in the process of selecting its independent
auditors for the fiscal year ending December 31, 2000.
The Board of Directors is not aware of any other business that may come
before the meeting. However, if additional matters properly come before the
meeting, proxies will be voted at the discretion of the proxy-holders.
STOCKHOLDER PROPOSALS
In accordance with the rules promulgated by the SEC, any stockholder who
wishes to submit a proposal for inclusion in the proxy material to be
distributed by the Company in connection with 2000 Annual Meeting of
Stockholders must do so no later than December 31, 2000. Any such proposal
should be submitted in writing to the Secretary of the Company at its principal
executive offices, 450 East Las Olas Boulevard, Suite 1400, Fort Lauderdale,
Florida 33301, Attention: Joseph H. Izhakoff, Vice President, Secretary and
General Counsel.
ANNUAL REPORT
The Company's Annual Report, which incorporates the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1999, accompanies this Proxy
Statement.
18
<PAGE> 22
1797-PS-00
<PAGE> 23
[LOGO]
NATIONSRENT, INC.
450 EAST LAS OLAS BOULEVARD
FORT LAUDERDALE, FLORIDA 33301
Common Stock Proxy
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of NATIONSRENT, INC., a Delaware
corporation (the "Company"), hereby appoints James L. Kirk and Gene J. Ostrow,
or either of them, the proxy or proxies of the undersigned, each with full power
of substitution, to vote all shares of Common Stock of the Company which the
undersigned would be entitled to vote at the Annual Meeting of Stockholders to
be held on Friday, May 12, 2000 at 10:30 a.m., Eastern Standard Time at The
Broward Center for the Performing Arts, The Amaturo Theatre 201 S.W. 5th Avenue,
Fort Lauderdale, Florida 33312, or any adjournment thereof, according to the
number of votes that the undersigned would be entitled to if personally present
upon the matters referred to in this proxy.
(CONTINUED AND TO BE SIGNED ON OTHER SIDE)
<PAGE> 24
(CONTINUED FROM OTHER SIDE)
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy will
be voted FOR the proposals as set forth herein.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE PROPOSALS.
1. ELECTION OF DIRECTORS.
Nominees:
Thomas H. Bruinooge
Gary L. Gabriel
Ivan W. Gorr
Harris W. Hudson
H. Wayne Huizenga
James L. Kirk
[ ] FOR ALL NOMINEES [ ] WITHHOLD
FROM ALL NOMINEES
[ ] __________________________________________
For all nominees except as as noted above
2. Approval of Amendment to the Amended and Restated 1998 Stock Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To transact such other business as may properly come before the Annual
Meeting.
MARK HERE IF YOU PLAN TO ATTEND THE MEETING. [ ]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT. [ ]
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
The undersigned acknowledges receipt of the Notice of Annual Meeting of
Stockholders dated March 30, 2000, and the accompanying Proxy Statement.
Please sign exactly as your name appears on this proxy. When shares are held
by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. if a
corporation, please sign in full corporate name by the president or other
authorized officer. if a partnership, please sign in the partnership name by
the authorized person.
Signature: ________________Date:________Signature: ________________Date:________
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
<PAGE> 25
[LOGO]
NATIONSRENT, INC.
450 EAST LAS OLAS BOULEVARD
FORT LAUDERDALE, FLORIDA 33301
PREFERRED STOCK PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of NATIONSRENT, INC., a Delaware
corporation (the "Company"), hereby appoints James L. Kirk and Gene J. Ostrow,
or either of them, the proxy or proxies of the undersigned, each with full power
of substitution, to vote all shares of Series A Convertible Preferred Stock of
the Company which the undersigned would be entitled to vote at the Annual
Meeting of Stockholders to be held on Friday, May 12, 2000 at 10:30 a.m.,
Eastern Standard Time at The Broward Center for the Performing Arts, The Amaturo
Theatre 201 S.W. 5th Avenue, Fort Lauderdale, Florida 33312, or any adjournment
thereof, according to the number of votes that the undersigned would be entitled
to if personally present upon the matters referred to in this proxy.
(CONTINUED AND TO BE SIGNED ON OTHER SIDE)
<PAGE> 26
(CONTINUED FROM OTHER SIDE)
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy will
be voted FOR the proposals as set forth herein.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE PROPOSALS.
1. Election of Directors.
Nominees:
Christopher J. O'Brien
Charles J. Philippin
[ ] FOR ALL NOMINEES [ ] WITHHOLD
[ ] _______________________________________________
For all nominees except as noted above
2. Approval of Amendment to the Amended and Restated 1998 Stock Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To transact such other business as may properly come before the Annual
Meeting.
MARK HERE IF YOU PLAN TO ATTEND THE MEETING. [ ]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT. [ ]
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
The undersigned acknowledges receipt of the Notice of Annual Meeting of
Stockholders dated March 30, 2000, and the accompanying Proxy Statement.
Please sign exactly as your name appears on this proxy. When shares are held
by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by the President or other
authorized officer. If a partnership, please sign in the partnership name by
the authorized person.
Signature: ________________Date:________Signature: ________________Date:________
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
