<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:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
McGrath RentCorp
- - - - - - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - - - - - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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:
[ ] Fee paid previously with preliminary materials:
[ ] 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
MCGRATH RENTCORP
- - - - - - --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
- - - - - - --------------------------------------------------------------------------------
May 31, 2000
Notice is hereby given that the 2000 Annual Meeting of Shareholders of
McGrath RentCorp, a California corporation, will be held at McGrath RentCorp's
Corporate Headquarters located at 5700 Las Positas Road, Livermore, California
94550, on Wednesday, May 31, 2000, at 2:00 p.m., local time, for the following
purposes:
1. To elect six directors to serve until the next annual meeting of
shareholders and until their respective successors are duly
elected;
2. To approve the adoption of the McGrath RentCorp 2000 Long-Term
Stock Bonus Plan;
3. To approve the appointment of Arthur Andersen LLP as McGrath
RentCorp's independent public accountants for the year ending
December 31, 2000; and
4. To transact such other business as may properly come before the
Meeting or any adjournment thereof.
Shareholders of record at the close of business on April 14, 2000 are
entitled to notice of, and to vote at, the Meeting or any adjournment thereof.
All shareholders are cordially invited to attend the Meeting in person. However,
to insure your representation at the Meeting, you are urged to mark, sign and
return the enclosed Proxy as promptly as possible in the accompanying
postage-prepaid envelope. Any shareholder attending the Meeting may vote in
person even if he or she has returned the Proxy.
BY ORDER OF THE BOARD OF DIRECTORS
April 25, 2000 RANDLE F. ROSE, SECRETARY
[mcgrath logo]
<PAGE> 3
MCGRATH RENTCORP
------------------------------------------------------
PROXY STATEMENT
------------------------------------------------------
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed Proxy is solicited on behalf of the Board of Directors of
McGrath RentCorp (the "Company") to be voted at the 2000 Annual Meeting of
Shareholders to be held on Wednesday, May 31, 2000, at 2:00 p.m., local time,
and at any adjournment thereof, for the purposes set forth in the accompanying
Notice of Annual Meeting of Shareholders. The Annual Meeting will be held at the
Company's Corporate Headquarters located at 5700 Las Positas Road, Livermore,
California 94550.
These proxy materials were mailed on or about April 26, 2000, to all
shareholders entitled to vote at the Meeting.
RECORD DATE AND OUTSTANDING SHARES
Shareholders of record at the close of business on April 14, 2000, are
entitled to notice of, and to vote at, the Meeting. At the record date,
12,303,882 shares of the Company's Common Stock were issued and outstanding. The
Company has no other class of voting securities issued or outstanding.
VOTING
In order to conduct business at the Meeting, a quorum must be established.
The presence in person or by proxy of shareholders entitled to vote a majority
of the Company's outstanding Common Stock will constitute a quorum for the
transaction of business at the Meeting.
Every shareholder voting for the election of directors may cumulate such
shareholder's votes and give one candidate a number of votes equal to the number
of directors to be elected (six) multiplied by the number of shares held, or may
distribute such shareholder's votes on the same principle among as many
candidates as the shareholder may select. However, no shareholder shall be
entitled to cumulate votes for any candidate unless the candidate's name has
been placed in nomination prior to the voting and the shareholder, or any other
shareholder, has given notice at the Meeting prior to the voting of the
intention to cumulate the shareholder's votes. The proxy holders are given
discretionary authority, under the terms of the Proxy, to cumulate votes
represented by shares for which they are named in the Proxy. In electing
directors, the
<PAGE> 4
candidates receiving the highest number of affirmative votes, up to the number
of directors to be elected (six), shall be elected.
Unless otherwise noted herein, each of the Company's proposals (other than
the election of directors) described in this Proxy Statement requires the
affirmative vote of the holders of a majority of the shares of the Company's
Common Stock represented and voting at the Meeting if a quorum is present.
Unless otherwise instructed, each valid returned Proxy not revoked will be voted
in the election of directors "FOR" the nominees of the Board of Directors and
"FOR" Proposals No. 2 and No. 3 described in this Proxy Statement. If any other
matters come before the Meeting of which the Company was not aware by March 15,
2000, the proxy holders will vote on such matters in their discretion. The
Company does not anticipate, as of this date, that any matters other than as set
forth in this Proxy Statement will come before the Meeting.
SOLICITATION; REVOCABILITY OF PROXIES
The cost of this solicitation will be borne by the Company. In addition,
the Company may reimburse brokerage firms and other persons representing
beneficial owners of shares for their expenses in forwarding solicitation
material to such beneficial owners. Certain of the Company's directors, officers
and regular employees, without additional compensation, may also solicit proxies
personally or by telephone or telegram. Any proxy given pursuant to this
solicitation may be revoked by the person giving it at any time before its use
by delivering to the Company a written notice of revocation or a duly executed
proxy bearing a later date or by attending the Meeting and voting in person.
PROPOSAL NO. 1: ELECTION OF DIRECTORS
NOMINEES
The shareholders elect directors of the Company annually. The Board has
nominated the six persons named in the table below for election as directors to
serve until the next annual meeting of shareholders and until their respective
successors are duly elected. The remaining directors may fill vacancies that may
occur on the Board of Directors prior to an annual meeting of shareholders.
Unless otherwise instructed, the proxy holders will vote the Proxies received by
them for the Company's nominees named below, all of whom are presently directors
of the Company. In the event any nominee is unable or declines to serve as a
director at the time of the Meeting, the Proxies will be voted for any nominee
who shall be designated by the present Board of Directors to fill the vacancy.
It is not expected any nominee will be unable, or will decline, to serve as a
director. In the event additional persons are nominated for election as
directors, the proxy holders intend to vote all Proxies received by them in such
a manner in accordance with cumulative voting as will assure the election of as
many of the nominees listed below as possible, and in such event, the specific
nominees to be voted for under the Proxies will be determined by the proxy
holders.
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<PAGE> 5
The names of the nominees and certain information about them are set forth
below.
<TABLE>
<CAPTION>
Name of Nominee Age Principal Occupation Director Since
--------------- --- -------------------- --------------
<S> <C> <C> <C>
William J. Dawson 45 Corporate Senior Vice President, 1998
Business Development of McKesson
HBOC, Inc.
Robert C. Hood 59 Investor, retired executive 1999
Joan M. McGrath 63 Businesswoman 1982
Robert P. McGrath 66 Chairman of the Board and Chief 1979
Executive Officer of the Company
Delight Saxton 54 Senior Vice President of the 1982
Company
Ronald H. Zech 56 Chairman of the Board, President 1989
and Chief Executive Officer of GATX
Corporation
</TABLE>
DESCRIPTION OF NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
WILLIAM J. DAWSON was elected a director of the Company in 1998, and he
serves on its Audit and Executive Compensation Committees. From 1993 through
1998, Mr. Dawson was a Managing Director of Volpe Brown Whelan, LLC, an
investment banking firm, where he was responsible for corporate finance
activities in the healthcare industry. In August 1998, Mr. Dawson joined
McKesson HBOC, Inc., a large healthcare services company, as Corporate Senior
Vice President, Business Development, with responsibility for mergers &
acquisitions and venture capital investments.
ROBERT C. HOOD was elected by the Board of Directors to fill a vacancy on
the Board in December 1999. Mr. Hood serves on the Board's Audit and Executive
Compensation Committees. From 1992 to 1995, Mr. Hood was Senior Vice President
and Chief Financial Officer of Crowley Maritime Corporation, a shipping and
transportation services company. From 1995 to 1996, Mr. Hood was Chief Operating
Officer of RockShox, a manufacturer of suspension equipment for mountain bikes.
From 1996 until September 1999, Mr. Hood was Executive Vice President and Chief
Financial and Administrative Officer of Excite, Inc., an Internet portal
company. Mr. Hood's principal occupation now is investing in new, start-up
companies.
JOAN M. MCGRATH joined the Company in 1980 and has been a director since
1982. Ms. McGrath served as a Vice President of the Company from 1982 through
1994, at which time she resigned that position. She continues to be an employee
of the Company with responsibilities in training sales, supervisory and
management personnel and general management.
ROBERT P. MCGRATH is the founder of the Company. He has been a director and
its Chief Executive Officer since the Company's formation in 1979, and its
Chairman of the Board since 1988. He also served as the Company's President
through 1994 and as its Chief Financial Officer through 1993. He is a member of
the Executive Compensation Committee of the Company's Board of Directors.
DELIGHT SAXTON has been with the Company since its inception in 1979, and a
director since 1982. She served as Secretary of the Company from 1982 to 1999,
its Treasurer from 1982 to 1989, its Vice President of Administration from 1989
to 1997, and its Chief Financial Officer from 1993 to 1999. She has been a
-3-
<PAGE> 6
Senior Vice President of the Company since 1997. She is responsible for facility
development and general management.
RONALD H. ZECH was elected a director of the Company in 1989, and he serves
on its Audit and Executive Compensation Committees. In 1994, Mr. Zech was
elected President and Chief Operating Officer of GATX Corporation, a New York
Stock Exchange listed company. In 1995, he was elected Chief Executive Officer
of that corporation, and in 1996 was elected its Chairman of the Board. GATX is
engaged in the business of providing transportation and distribution equipment
and related services. Mr. Zech also serves on the Board of Directors of The PMI
Group, Inc., a New York Stock Exchange listed company engaged in the business of
providing private mortgage insurance.
BOARD MEETINGS
The Board of Directors of the Company held four meetings and took corporate
action by unanimous written consent another six times during the year ended
December 31, 1999.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has an Audit Committee consisting of Directors
William J. Dawson, Robert C. Hood and Ronald H. Zech. The Audit Committee
exercises the following powers: (1) nominates the independent auditors of the
Company to be approved by the Board of Directors; (2) meets with the independent
auditors to review the annual audit; (3) assists the full Board in evaluating
the auditors' performance; and (4) reviews internal control procedures, related
party transactions and, where appropriate, potential conflict of interest
situations. The Audit Committee met twice during 1999.
The Board of Directors also has a four-member Executive Compensation
Committee consisting of Directors William J. Dawson, Robert C. Hood, Robert P.
McGrath and Ronald H. Zech. The Executive Compensation Committee establishes the
general compensation policies of the Company for its executive officers and sets
the actual compensation plans and specific compensation levels for the
individual officers. The Executive Compensation Committee held one meeting
during 1999.
COMPENSATION OF DIRECTORS
Each director who is not also an officer or employee of the Company was
compensated for his services as a director at the rate of $11,000 per annum plus
an additional fee of $600 per meeting for attendance at the meetings of the
Board of Directors or one of its Committees (in the event a Committee meeting is
held in conjunction with a Board meeting, only one $600 fee is paid to the
director). Mr. Zech and Mr. Dawson each received $13,400 for their services as
directors of the Company during 1999. Mr. Hood, who became a director of the
Company during 1999, received $1,333 for his services as a director of the
Company during 1999. Effective January 1, 2000, directors who are not also
officers or employees of the Company will be compensated for his or her services
as a director at the rate of $16,000 per annum plus an additional fee of $750
per meeting for attendance at the meetings of the Board of Directors or one of
the committees (in the event a Committee meeting is held in conjunction with a
Board meeting, only one $750 fee is paid to the director). All directors,
including those who are officers or employees of the Company, are reimbursed for
expenses incurred in connection with attending Board or Committee meetings.
In addition to cash compensation, the three outside directors of the
Company during 1999 (Messrs. Dawson, Hood and Zech) each received a
non-qualified stock option under the Company's 1998 Stock
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<PAGE> 7
Option Plan for the purchase of 4,000 shares of the Company's common stock at an
exercise price of $18.25 per share. In addition to his 4,000 share stock option,
Mr. Hood received another 6,000 share option, also at an exercise price of
$18.25 per share. See "Executive Officers of the Company -- 1998 Stock Option
Plan" below.
PROPOSAL NO. 2: APPROVAL OF THE MCGRATH
RENTCORP 2000 LONG-TERM STOCK BONUS PLAN
In 1991, the Board of Directors and the shareholders of the Company adopted
a Long-Term Stock Bonus Plan (the "First Plan") under which 400,000 shares of
the Company's Common Stock were reserved for bonuses to be granted to officers
and other key employees of the Company. Under the First Plan, a total of 198,559
shares of the Company's Common Stock have been earned, and there are Stock Bonus
Agreements still outstanding under which an additional 35,838 shares of the
Company's Common Stock could be awarded if the Company meets established
performance goals over three-year periods ending December 31, 2000 and 2001. By
its terms, the First Plan has terminated, and the Company may not enter into any
further Stock Bonus Agreements under the First Plan.
The Board of Directors of the Company has now adopted the McGrath RentCorp
2000 Long-Term Stock Bonus Plan (the "New Plan") to replace the First Plan,
under which another 400,000 shares of the Company's Common Stock are to be
reserved for bonuses to be granted to officers and other key employees to
provide incentives for high levels of performance and unusual efforts to improve
the financial performance of the Company.
The Board of Directors of the Company will administer the New Plan. The
stock bonuses to be granted under the New Plan will be evinced by written Stock
Bonus Agreements that will provide the right to receive the bonus shares based
upon achieving specified goals over a set performance period. The number of
shares to be granted to a particular participant will be a function of various
factors such as the participant's salary, the market value of the Company's
Common Stock, the performance realized by the Company over a period of time,
and/or such other criteria as may be determined by the Board of Directors for
any particular stock bonus grant. Once a participant has earned bonus shares at
the end of the performance period under his or her Stock Bonus Agreement, some
portion of those shares will remain subject to forfeiture and return to the
Company in the event of termination of the participant's employment with the
Company, with the participant's rights to the shares vesting periodically as he
or she continues to be employed with the Company.
The New Plan is effective retroactive as of January 1, 2000, but is subject
to approval by the Company's shareholders on or before December 31, 2000. No
stock bonuses have been granted yet under the New Plan. The Board of Directors
may suspend, amend or terminate the New Plan at any time. By its terms, the New
Plan will terminate on December 31, 2009, and no Stock Bonus Agreements may be
granted under it thereafter; but such termination will not affect any Stock
Bonus Agreements theretofore entered into under the New Plan.
A copy of the McGrath RentCorp 2000 Long-Term Stock Bonus Plan is attached
hereto as Appendix A.
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<PAGE> 8
Please see "Compensation of Officers and Directors -- Long-Term Stock Bonus
Plan" below for information concerning the First Plan and Stock Bonus Agreements
that have already been granted under the First Plan.
The Board of Directors believes that this New Plan is in the best interests
of the shareholders of the Company and recommends a vote "FOR" approval of the
McGrath RentCorp 2000 Long-Term Stock Bonus Plan.
PROPOSAL NO. 3: RATIFICATION OF APPOINTMENT
OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Company, with the approval of its Audit
Committee, has appointed Arthur Andersen LLP to audit the books and records of
the Company for the year ending December 31, 2000. A resolution will be offered
at the Meeting to approve the appointment of Arthur Andersen LLP as the
Company's independent public accountants.
Representatives of the accounting firm are expected to be present at the
Meeting with the opportunity to make a statement if they desire to do so and are
expected to be available to respond to appropriate questions.
The Board of Directors recommends a vote "FOR" such proposal. In the event
of a negative vote on such ratification, the Board of Directors will reconsider
its selection.
OTHER MATTERS
The Company knows of no other matters to be submitted to the Meeting. If
any other matters properly come before the Meeting, it is the intention of the
persons named in the enclosed form of Proxy to vote the shares they represent as
the Board of Directors may recommend.
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<PAGE> 9
EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth certain information regarding the executive
officers of the Company.
<TABLE>
<CAPTION>
Name Age Position Held with the Company
---- --- ------------------------------
<S> <C> <C>
Robert P. McGrath 66 Chairman of the Board and Chief Executive Officer
Dennis C. Kakures 43 President and Chief Operating Officer
Delight Saxton 54 Senior Vice President
Thomas J. Sauer 43 Vice President and Chief Financial Officer
Scott A. Alexander 39 Vice President
Thomas L. Sanders 56 Vice President
Randle F. Rose 42 Vice President of Administration and Secretary
</TABLE>
Robert P. McGrath and Delight Saxton are also directors of the Company and
descriptions of them appear under "Proposal No. 1: Election of
Directors -- Description of Nominees for Election to the Board of Directors"
above.
DENNIS C. KAKURES joined the Company in 1982 as Sales and Operations
Manager of the Company's Northern California office. He became a Vice President
of the Company in 1987, Chief Operating Officer in 1989, Executive Vice
President in 1993, and President in 1995.
THOMAS J. SAUER joined the Company in 1983 as its Accounting Manager,
served as its Controller from 1987 to March 1999, became Treasurer in 1989, a
Vice President in 1995, and Chief Financial Officer in 1999. Mr. Sauer is
responsible for accounting, financial reporting, corporate taxes, and the
Company's relationships with its bankers and auditors.
SCOTT A. ALEXANDER joined the Company in 1982 as a sales representative,
became a Branch Manager in 1990, and a Vice President in 1997. Mr. Alexander is
responsible for the Northern California branch facility and for sales and
marketing of the Mobile Modular Division.
THOMAS L. SANDERS joined the Company in 1990 as a Branch Manager, and
became a Vice President in 1997. Mr. Sanders is responsible for the Southern
California branch facility and for the inventory center operations of the Mobile
Modular Division.
RANDLE F. ROSE joined the Company in 1997 as its Vice President of
Administration, and was elected Secretary of the Company in 1999. Mr. Rose is
responsible for administration of human resources, risk management, MIS, real
estate and facilities. For the three years prior to joining the Company, Mr.
Rose was Vice President, Finance of Ardenbrook, Inc., a real estate company.
Each executive officer of the Company serves at the pleasure of the Board
of Directors.
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<PAGE> 10
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation earned by the Company's
Chief Executive Officer and the Company's other four most highly compensated
executive officers for services rendered in all capacities to the Company for
each of the last three years.
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
Name and ------------------- ---------------------- All Other
Principal Position Year Salary Bonus Awards(1) Payout(2) Compensation(3)
------------------ ---- ------ ----- --------- --------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Robert P. McGrath 1999 $385,000 $111,024 -- -- $12,579
Chairman and Chief 1998 370,440 130,225 -- -- 13,274
Executive Officer 1997 352,800 246,960 -- -- 14,063
Dennis C. Kakures 1999 250,000 70,481 $ 55,388 $268,864 12,579
President and Chief 1998 221,760 72,598 89,166 193,111 13,274
Operating Officer 1997 201,600 141,120 112,137 80,974 14,063
Thomas J. Sauer 1999 165,000 35,560 36,155 172,547 12,579
Vice President and 1998 144,718 38,130 58,190 124,013 13,274
Chief Financial Officer 1997 131,565 73,676 68,404 55,653 14,063
Scott A. Alexander 1999 133,000 22,085 -- -- 12,579
Vice President 1998 125,000 48,061 -- -- 13,274
1997 120,625 57,266 -- -- 14,063
Thomas L. Sanders 1999 133,000 21,973 -- -- 12,579
Vice President 1998 125,000 46,659 -- -- 13,274
1997 113,333 53,946 -- -- 11,866
</TABLE>
- - - - - - ------------
(1) Upon an award of stock bonus shares under the Company's Long Term
Stock Bonus Plan, 20% of such shares are vested in the participant
and the remaining 80% vest over the next four years contingent upon
the participant remaining in the employ of the Company. See "Long
Term Stock Bonus Plan" below. The figures shown in the column
designated "Awards" are the values of the vested 20% shares of the
Company's Common Stock earned by the executive officers under the
Plan, calculated based on the market value of the Common Stock as of
the end of the respective years. Dividends are paid to the officer
with respect to shares earned by him, whether or not vested. As the
unvested shares subsequently vest, their values are shown in the
column designated "Payout."
(2) The figures shown in the column designated "Payout" are the values of
the shares of the Company's Common Stock previously earned by the
executive officers under the Company's Long-Term Stock Bonus Plan in
a prior year which vested during the year shown. The values are
calculated based on the market value of the Common Stock as of the
end of the year in which it was originally earned.
(3) The figures shown in the column designated "All Other Compensation"
represent the executive officer's share of the allocation of the
Company's contribution to the Company's Employee Stock Ownership Plan
for 1999, and his share of any re-allocations of forfeited benefits
in 1999 (see "Employee Stock Ownership Plan" below).
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<PAGE> 11
EMPLOYEE STOCK OWNERSHIP PLAN
The Company's Employee Stock Ownership Plan ("ESOP") is intended to qualify
as an employee stock ownership plan as defined in Section 4975(e)(7) of the
Internal Revenue Code, and as a stock bonus plan under Section 401(a) of the
Internal Revenue Code. The Company created a trust under the ESOP to hold plan
assets, with Union Bank of California, N.A. acting as trustee. The Company may
amend or terminate the ESOP at any time. All assets acquired by the trust are
administered by a Plan Committee composed of Nanci Clifton, Edward Diaz, Brian
Jensen, Thomas J. Sauer, Delight Saxton and Sandy Waggoner (all Company
employees) for the exclusive benefit of employees who are participants in the
ESOP and their designated beneficiaries.
Employees, who are 21 years or older, are entitled to participate in the
ESOP when they have completed one year of service to the Company by June 30 of
any year. As of December 31, 1999, 184 employees of the Company were
participants in the ESOP. Allocations to each eligible participant's trust
account are made each year from Company contributions, trust income or loss and
re-allocations of forfeited ESOP benefits if the participant remains employed
throughout the year and has worked a minimum number of hours or his employment
has terminated due to death or retirement (as that term is defined in the ESOP)
during that year. Allocations are made based upon each participant's
compensation from the Company and time employed by the Company. As provided by
law, a participant's interest in the ESOP becomes 20% vested after three years
of service and will continue to vest at 20% per year thereafter until it is
fully vested after the seventh year or upon death or total disability. The
vesting schedule will be accelerated and the Company's contributions and ESOP
allocations will be modified if the ESOP becomes a "top heavy plan" under
federal tax laws.
In general, Company contributions are immediately tax deductible by the
Company, but participants do not recognize income for tax purposes until
distributions are made to them. The Company's Board of Directors determines the
amount of Company contributions to the ESOP in cash, Company stock or other
property each year with consideration for federal tax laws. The Company's Board
of Directors has authorized a $750,000 cash contribution to the ESOP for the
1999 plan year, and the Company had made an aggregate of $3,450,000 cash
contributions for the five prior years. Employees may not make contributions to
the ESOP. Contributions in cash are used to purchase Company stock; however,
other investments may be made and loans may be incurred by the ESOP for the
purchase of Company stock.
The Plan Committee has determined that cash dividends paid by the Company
on shares of the Company's Common Stock held by the ESOP shall be paid out to
the participants. The Plan Committee has the right to revoke this decision at
any time.
1987 INCENTIVE STOCK OPTION PLAN
The Company has a 1987 Incentive Stock Option Plan (the "1987 Plan") under
which options have been granted to key employees of the Company for the purchase
of its Common Stock. Options granted under the 1987 Plan are intended to qualify
as incentive stock options as that term is defined in Section 422 of the
Internal Revenue Code of 1986, as amended. The 1987 Plan authorized the issuance
of an aggregate of 2,000,000 shares of the Company's Common Stock under options.
As of April 14, 2000, options for an aggregate of 852,000 shares had been
granted to 28 key employees at exercise prices ranging between $3.06 and $10.75
per share; and of such options granted, options have been exercised for the
purchase of 587,030 shares, options for 54,198 shares have been terminated, and
options for 210,772 shares remain outstanding. No options were granted under the
1987 Plan during 1999 to any of the Company's executive officers listed in the
"Summary Compensation Table" above. The 1987 Plan is now terminated by its
terms, and no further
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<PAGE> 12
options will be granted under it; however, the options held by key employees for
210,772 shares still outstanding remain exercisable in accordance with the terms
of those options. The following table sets forth certain information with
respect to options held by one of the Company's officers during 1999. With the
exception of the information set forth below, none of the Company's executive
officers listed in the "Summary Compensation Table" above exercised or held an
option during 1999 under the 1987 Plan.
<TABLE>
<CAPTION>
Number of Shares Value of Unexercised
Underlying Unexercised In-the-Money Options
Shares Acquired Value Options at Year End at Year End
Name on Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable
---- --------------- ------------ ------------------------- -------------------------
<S> <C> <C> <C> <C>
Thomas L. Sanders 85,500 $946,759 2,750/10,250 $29,047/$108,266
</TABLE>
1998 STOCK OPTION PLAN
The Company has a 1998 Stock Option Plan (the "1998 Plan") that authorizes
the issuance of an aggregate of 2,000,000 shares of the Company's Common Stock
under options to officers, key employees, directors and other persons who
provide valuable services to the Company or its subsidiaries. Options granted
under the 1998 Plan may be either incentive stock options as defined in Section
422 of the Internal Revenue Code of 1986, as amended, or options which are not
incentive stock options ("non-qualified options"). As of April 14, 2000, options
for an aggregate of 297,500 shares have been granted to 46 key employees at
exercise prices ranging between $18.25 and $20.81 per share; and of such options
granted, no options have been exercised, options for 51,550 have been
terminated, and options for 245,950 shares remain outstanding. In addition to
these options to key employees, options for an aggregate 48,000 shares have been
granted to outside directors of the Company at exercise prices ranging between
$18.25 and $21.69 per share; and of such options granted, no options have been
exercised, options for 10,000 shares have been terminated, and options for
38,000 remain outstanding. No options have been granted under the 1998 Plan to
any of the Company's executive officers listed in the "Summary Compensation
Table" above.
LONG-TERM STOCK BONUS PLAN
The Company's Long-Term Stock Bonus Plan (the "First Plan") reserved
400,000 shares of the Company's Common Stock for bonuses to be granted to
officers and other key employees to provide incentives for high levels of
performance and unusual efforts to improve the financial performance of the
Company. Stock Bonus Agreements have been entered into with Dennis C. Kakures,
the Company's President and Chief Operating Officer, and Thomas J. Sauer, the
Company's Vice President and Chief Financial Officer. To date, Messrs. Kakures
and Sauer are the only persons who have received Stock Bonus Agreements. Each
Agreement provided for a stock bonus to the officer dependent upon the return on
equity realized for the Company's shareholders over a three-year period, with
the right to receive any stock bonus earned being subject to vesting over a
four-year period contingent upon the officer remaining in the employ of the
Company. Messrs. Kakures and Sauer were awarded stock bonuses based upon the
Company's performance over the three-year period ended December 31, 1999. The
following table sets forth certain information with respect to the stock bonuses
awarded. The "Values" in the table are calculated based on the market value of
the shares of Common Stock as of December 31, 1999.
-10-
<PAGE> 13
<TABLE>
<CAPTION>
As of 12/31/99 Will Vest at December 31,
------------------- ----------------------------------------
Name Earned Vested 1999 2000 2001 2002
---- -------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Dennis C. Kakures Shares 15,825 3,165 3,165 3,165 3,165 3,165
Value $276,938 $55,388 $55,388 $55,388 $55,388 $55,388
Thomas J. Sauer Shares 10,326 2,066 2,065 2,065 2,065 2,065
Value $180,705 $36,155 $36,138 $36,138 $36,138 $36,138
</TABLE>
The Company has entered into further Stock Bonus Agreements with both Mr.
Kakures and Mr. Sauer, under which a maximum aggregate of 35,838 shares in
additional stock bonuses could be awarded if the Company's performance goals
over the successive three-year periods ending December 31, 2000 and 2001 are
met.
The First Plan terminated on December 31, 1999, and the Company may enter
into no further Stock Bonus Agreements under the First Plan. For this reason,
the Board of Directors has adopted the McGrath RentCorp 2000 Long-Term Stock
Bonus Plan (the "New Plan"), and it is submitting it to the shareholders for
their approval. See "Proposal No. 2" above.
REPORT BY THE EXECUTIVE COMPENSATION COMMITTEE
The Company has a four-member Executive Compensation Committee, consisting
of its three outside directors, William J. Dawson, Robert C. Hood and Ronald H.
Zech, as well as its Chairman of the Board and Chief Executive Officer, Robert
P. McGrath. The Committee establishes the general compensation policies of the
Company for its executive officers and sets the actual compensation plans and
specific compensation levels for the individual officers.
COMPENSATION PHILOSOPHY - The Company's executive compensation philosophy
is to pay for performance. The Executive Compensation Committee believes
executive compensation should reflect the executive's, as well as the Company's,
current and long-term performance, and any management compensation program
should be structured to attract, motivate and retain qualified personnel by
providing attractive compensation incentives consistent with Company
performance. The executive compensation program is intended to provide an
overall level of compensation opportunity that the Committee believes, based
upon its own judgment and experience and upon periodic studies by independent
executive compensation consultants, is competitive with other, comparable
companies. The Committee also believes management should have significant equity
participation through the ownership of Common Stock of the Company so as to
align the interests of executives with those of the Company's other shareholders
in an effort to achieve long-term shareholder returns.
COMPONENTS OF EXECUTIVE COMPENSATION - In addition to the return executives
receive along with other shareholders through their individual ownership of
shares of the Company's Common Stock, there are currently three components of
executive compensation: base salary, annual cash incentive bonus, and long-term
stock ownership incentives.
Base Salaries - The Executive Compensation Committee establishes the
base salaries of each of the Company's executive officers after considering a
variety of factors including the executive's level of responsibility and
individual performance, the executive's contributions to the success of the
Company,
-11-
<PAGE> 14
internal equities among the salaries of other officers and key personnel of the
Company, the salaries of executive officers in similar positions in comparable
companies, and the Company's financial performance.
Annual Cash Incentive Bonuses - The Executive Compensation Committee has
divided the executive officers into four groups for purposes of providing cash
incentive bonuses: the Chief Executive Officer, the next two highest compensated
officers, the next two highest compensated officers thereafter, and the
remainder of the Company's executive officers.
The Executive Compensation Committee adopted a formula in early 1999
for calculating a cash incentive bonus for the Company's Chief Executive Officer
for 1999 based solely upon the Company achieving certain levels of pre-tax
profit for the year, with him being eligible to receive a bonus ranging from
zero up to a maximum of 70% of his base salary. See "Chief Executive Officer's
Compensation" below.
At the same time, the Executive Compensation Committee adopted a
formula for calculating cash incentive bonuses for the next two highest
compensated executive officers of the Company (Mr. Kakures and Mr. Sauer) based
upon a combination of the level of the Company's pre-tax profit for the year
(75%) and the extent to which each executive officer achieves his or her own
individual performance goals as determined by the Chief Executive Officer (25%).
Mr. Kakures was eligible to receive a bonus ranging from zero up to a maximum of
70% of his base salary, while Mr. Sauer was eligible to receive a bonus ranging
from zero up to a maximum of 56% of his base salary. The aggregate cash
incentive bonuses earned by these two executive officers under this program for
1999 was 25.6% of their aggregate base salaries.
The Executive Compensation Committee had also directed the Chief
Executive Officer and the President and Chief Operating Officer of the Company
to determine jointly at the end of 1999 the amount of incentive bonuses which
should be paid for that year to the next two highest compensated executive
officers of the Company (Mr. Alexander and Mr. Sanders) based upon the extent to
which each achieved his own individual performance goals. These two officers
were eligible to receive bonuses ranging from zero to a maximum of 36% of their
base salaries. The aggregate cash incentive bonuses awarded to these two
executive officers for 1999 was 16.6% of their aggregate base salaries.
Long-Term Stock Ownership Incentives - The Company has two long-term
stock ownership incentive programs for its executives and other key personnel:
the Long-Term Stock Bonus Plan and the 1998 Stock Option Plan.
Through 1998, the Company's Long-Term Stock Bonus Plan Committee had
determined the grant of stock bonuses under the Company's Long-Term Stock Bonus
Plan. In 1999, the Long-Term Stock Bonus Plan Committee was abolished and its
functions were taken over by the Board of Directors itself. The Executive
Compensation Committee may make recommendations with respect to the granting of
stock bonuses under the Plan to executive officers. The Long-Term Stock Bonus
Plan has been used to reward the achievement of pre-set, long-term financial
goals; and the bonuses of stock have been awarded for achieving pre-set goals
with respect to the return on equity realized by the Company over successive
three-year periods. See "Long-Term Stock Bonus Plan" above.
By the terms of the Company's 1998 Stock Option Plan, the Company's
Board of Directors determines the grant of stock options. The Executive
Compensation Committee may make recommendations to the Board of Directors with
respect to the granting of stock options under the 1998 Plan to executive
officers. The Board has granted stock options from time to time to executive
officers and other key
-12-
<PAGE> 15
personnel of the Company under the 1998 Plan and earlier option plans because
the Board believed such grants would be an effective part of the particular
executive officer's overall compensation package and that an increase in his or
her equity participation in the Company would be appropriate.
CHIEF EXECUTIVE OFFICER'S COMPENSATION - Throughout 1999, Robert P. McGrath
was the Chief Executive Officer of the Company, as well as the Chairman of its
Board of Directors. Mr. McGrath was the founder of the Company, and he still
owns a significant percentage of its Common Stock (see "Security Ownership of
Management and Principal Shareholders" below).
Base Salary - After a review in early 1999 of Mr. McGrath's level of
responsibility, performance and contributions to the Company's success, the
Executive Compensation Committee raised Mr. McGrath's base salary to $385,000.
Annual Cash Incentive Bonus - Mr. McGrath earned a cash incentive bonus
of $111,024 for 1999 (28.8% of his base salary). This bonus was calculated as a
function of the extent to which the Company achieved its goal for pre-tax
profits in 1999 in accordance with the formula, which had been established by
the Executive Compensation Committee early in that year.
Long-Term Stock Ownership Incentives - Mr. McGrath did not participate
in any of the various long-term stock ownership incentive plans offered by the
Company to its officers and employees (except that, as an employee, he has
participated in the Company's Employee Stock Ownership Plan ("ESOP") on the same
basis as other employees).
Executive Compensation Committee:
William J. Dawson Robert C. Hood
Robert P. McGrath Ronald H. Zech
COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION IN COMPENSATION DECISIONS
No member of the Company's Executive Compensation Committee has a
compensation committee interlocking relationship (as defined by the Securities
and Exchange Commission). One member of the Committee, Robert P. McGrath, is an
employee and officer of the Company, and he has participated in deliberations of
the Committee concerning executive officer compensation.
-13-
<PAGE> 16
STOCK PRICE PERFORMANCE GRAPH
The following graph compares the Company's stock price since December 31,
1994 against (1) the S&P 500 Index and (2) the composite prices of the companies
listed by Value Line, Inc. in its Industrial/Business Services Industries Group
("Peer Group"), and (3) the Russell 2000 Index.
<TABLE>
<CAPTION>
MCGRATH RENTCORP S & P 500 RUSSELL 2000 INDUSTRIAL SERVICES
---------------- --------- ------------ -------------------
<S> <C> <C> <C> <C>
1994 100.00 100.00 100.00 100.00
1995 114.94 137.50 128.44 152.00
1996 159.74 169.47 149.55 225.45
1997 308.81 226.03 182.75 324.41
1998 282.66 290.22 177.76 254.51
1999 230.15 349.08 209.46 373.82
</TABLE>
The graph assumes an investment of $100 on December 31, 1994 and monthly
reinvestment of dividends thereafter, and is based upon information provided to
the Company by Value Line, Inc.
-14-
<PAGE> 17
SECURITY OWNERSHIP OF MANAGEMENT
AND PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding each person
who is known by the Company to be the beneficial owner of more than 5% of the
outstanding Common Stock of the Company, each of the directors, the chief
executive officer and the other four most highly compensated officers of the
Company, and all officers and directors as a group as of April 14, 2000. The
table is presented in accordance with the rules of the Securities and Exchange
Commission and, accordingly, in several instances beneficial ownership of the
same shares is attributed to more than one person.
<TABLE>
<CAPTION>
Beneficial Ownership
-------------------------
Number of Percentage of
Name Shares Outstanding
---- --------- -------------
<S> <C> <C>
Robert P. and Joan M. McGrath(1, 2)............... 2,292,140 18.6%
McGrath RentCorp
5700 Las Positas Road
Livermore, CA 94550
T. Rowe Price Associates, Inc.(3)................. 2,041,000 16.6%
100 E. Pratt Street
Baltimore, MD 21202
Lord, Abbett & Co................................. 751,535 6.1%
90 Hudson Street
Jersey City, NJ 07372
Dimensional Fund Advisors, Inc.................... 641,000 5.2%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Dennis C. Kakures(2, 4)........................... 360,000 2.9%
Delight Saxton(2)................................. 339,832 2.8%
Thomas J. Sauer(2, 4)............................. 283,471 2.3%
Scott A. Alexander(2)............................. 204,872 1.7%
Thomas L. Sanders(2, 5)........................... 20,963 0.2%
Ronald H. Zech(5)................................. 14,000 0.1%
William J. Dawson(5).............................. 5,500 0.0%
Robert C. Hood.................................... 0 0.0%
All Executive Officers and Directors as a group
(11 persons)(1, 2, 4, 5)........................ 3,529,919 28.6%
</TABLE>
- - - - - - ------------
(1) Includes 399,006 shares held by two organizations controlled by Mr.
and Mrs. McGrath; however, they disclaim any beneficial interest in
such shares.
(2) Includes the shares held by the McGrath RentCorp Employee Stock
Ownership Plan for benefit of the named individual. The number of
shares included is 53,748 shares for Mr. McGrath, 30,636 shares for
Ms. McGrath, 46,552 shares for Mr. Kakures, 40,832 shares for Ms.
Saxton, 34,611 shares for Mr. Sauer, 38,870 shares for Mr. Alexander,
8,463 shares for Mr. Sanders, and 253,853 shares for all executive
officers and directors as a group. These shares are included because
beneficiaries under the Plan hold sole voting power over the shares
(whether or not rights to the shares have vested).
-15-
<PAGE> 18
(3) These securities are owned by various individual and institutional
investors, including T. Rowe Price Small Cap Value Fund, Inc. that
owns 1,298,000 shares, for which T. Rowe Price Associates, Inc.
("Price Associates") serves as investment adviser with power to
direct investments and/or sole power to vote the securities. For
purposes of the reporting requirements of the Securities Exchange Act
of 1934, Price Associates is deemed to be a beneficial owner of such
securities; however, Price Associates expressly disclaims that it is,
in fact, the beneficial owner of such securities.
(4) Includes unvested shares issued to the named individual under the
McGrath RentCorp Long-Term Stock Bonus Plan, which shares are subject
to return to the Company under certain circumstances. The number of
shares included is 37,301 shares for Mr. Kakures, 24,044 shares for
Mr. Sauer, and 61,345 shares for all executive officers as a group.
(5) Includes 22,250 shares, which are the portions of outstanding stock
options held by two officers and two directors that will be
exercisable over the next 60 days.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
COMPLIANCE WITH SEC. 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
The members of the Board of Directors, the executive officers of the
Company, and persons who hold more than 10% of the Company's outstanding Common
Stock are subject to the reporting requirements of sec. 16(a) of the Securities
Exchange Act of 1934 which require them to file reports with respect to their
ownership of the Company's Common Stock and their transactions in such Common
Stock. Based upon (i) the copies of the sec. 16(a) reports the Company received
from such persons during or with respect to 1999, and (ii) written
representations received from all such persons that no annual Form 5 reports
were required to be filed by them with respect to 1999, the Company believes
that all reporting requirements under sec. 16(a) for 1999 and prior years were
met in a timely manner by its directors, executive officers and greater than 10%
shareholders.
INDEMNIFICATION AGREEMENTS
The Company has entered into Indemnification Agreements with each of its
directors and executive officers. These Agreements require the Company to
indemnify its officers or directors against expenses and, in certain cases,
judgment, settlement or other payments incurred by the officer or director in
suits brought by the Company, derivative actions brought by shareholders and
suits brought by other third parties. Indemnification has been granted under
these Agreements to the fullest extent permitted under California law in
situations where the officer or director is made, or threatened to be made, a
party to the legal proceeding because of his or her service to the Company.
CONTROL
By virtue of their positions in the Company and ownership of the Company's
Common Stock, Robert P. McGrath and Joan M. McGrath may be deemed "control
persons" of the Company as that term is defined under the Securities Act of
1933, as amended.
FAMILY RELATIONSHIPS
There are no family relationships between any director or executive officer
of the Company except that Robert P. McGrath and Joan M. McGrath are husband and
wife.
-16-
<PAGE> 19
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Proposals of shareholders of the Company that are intended to be presented
at the Company's 2001 Annual Meeting must be received by the Company no later
than January 2, 2001, in order that they may be included in the proxy statement
and form of proxy relating to that meeting.
Dated: April 25, 2000 THE BOARD OF DIRECTORS
-17-
<PAGE> 20
APPENDIX
MCGRATH RENTCORP
2000 Long-Term Stock Bonus Plan
1. PURPOSE OF PLAN; ADMINISTRATION
1.1 PURPOSE. The intent and purpose of this 2000 Long-Term Stock Bonus
Plan (the "Plan") is to strengthen McGrath RentCorp, a California corporation,
by providing a means to attract and retain competent personnel and to provide to
participating officers and other key employees added incentive for high levels
of performance and for unusual efforts to improve the financial performance of
McGrath RentCorp. These purposes may be achieved through the grant of bonuses
consisting of shares of Common Stock of McGrath RentCorp to participating
officers and key employees.
1.2 ADMINISTRATION. This Plan shall be administered by the Board of
Directors of McGrath RentCorp (the "Board"). Any action of the Board with
respect to the administration of the Plan shall be taken pursuant to majority
vote, or by the written consent of all of its members. Subject to the express
provisions of the Plan, the Board shall have authority to construe and interpret
the Plan, to define the terms used herein, and to prescribe, amend and rescind
rules and regulations relating to the administration of the Plan, and to make
all other determinations necessary or advisable for the administration of the
Plan. The determinations of the Board on the foregoing matters shall be
conclusive. Subject to the express provisions of the Plan, the Board shall
determine from the eligible class the individuals who shall receive stock bonus
grants, and the terms and provisions of such stock bonus grants (which need not
be identical). No member of the Board shall be liable for any action, failure to
act, determination or interpretation made in good faith with respect to the Plan
or any transaction thereunder.
1.3 PARTICIPATION. Only officers and other key employees of McGrath
RentCorp, or of any subsidiary of McGrath RentCorp, shall be eligible for
selection to participate in the Plan upon approval by the Board. No member of
the Board shall be eligible to participate in the Plan as long as he or she is a
Director. An individual who has been granted a stock bonus (a "Participant")
may, if otherwise eligible, be granted additional stock bonuses if the Board
shall so determine.
1.4 STOCK SUBJECT TO THE PLAN. Subject to the adjustments provided in
Section 2.1 below, the stock to be offered under the Plan shall be shares of
authorized but unissued Common Stock of McGrath RentCorp. The aggregate amount
of Common Stock to be issued under this Plan shall not exceed four hundred
thousand (400,000) shares, subject to adjustment as set forth in Section 2.1.1
below. If any shares which are the subject of a stock bonus grant shall be
unearned, or shall be forfeited and returned to McGrath RentCorp pursuant to the
terms of the applicable Stock Bonus Agreement, such shares shall again be
available for future grants under this Plan.
1.5 STOCK BONUS AGREEMENT. All stock bonuses granted hereunder shall
be evidenced by a written Stock Bonus Agreement, which Agreement shall
incorporate the following terms:
1.5.1 Term of Stock Bonus Agreement. Each stock bonus granted under
this Plan shall be based upon a performance period to be determined by the
Board.
- Appendix 1-
<PAGE> 21
1.5.2 Number of Shares Granted. The number of shares granted to a
Participant shall be a function of the Participant's salary at the
beginning of the performance period, the market value of McGrath
RentCorp's Common Stock at the beginning of the performance period, and
the return on equity realized by McGrath RentCorp for its shareholders
over the performance period, and/or such other criteria as may be
determined by the Board for any particular stock bonus grants (which need
not be identical).
1.5.3 Vesting of Bonus Shares; Forfeiture on Termination of
Employment. Once a Participant has earned bonus shares at the end of the
performance period, those shares shall be subject to forfeiture and return
to McGrath RentCorp upon termination of the Participant's employment with
McGrath RentCorp for any reason whatsoever, with the risk of forfeiture
lapsing over a period of continued employment.
1.5.4 Other Terms and Provisions of Stock Bonus Agreement. The
Stock Bonus Agreements under the Plan may contain such other terms and
conditions as the Board may direct, and such other terms and conditions as
the officers of McGrath RentCorp shall deem to be in the best interests of
McGrath RentCorp which are not inconsistent with the terms of this Plan or
those approved by the Board of Directors.
2. OTHER PROVISIONS
2.1 ADJUSTMENTS.
2.1.1 Changes in Capitalization. Subject to any action by the
shareholders required by law, the number of shares of Common Stock covered
by this Plan and any outstanding Stock Bonus Agreement shall be
proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock of McGrath RentCorp resulting from a
subdivision or consolidation of shares or the payment of a stock dividend
(but only on the Common Stock) or any other increase or decrease in the
number of shares effected without receipt of consideration by McGrath
RentCorp (for this purpose, issuance of shares upon conversion of
convertible securities shall be deemed to be an issuance for which McGrath
RentCorp receives consideration).
2.1.2 Successor Corporations. The successor corporation in any
merger or consolidation of McGrath RentCorp shall be required to assume
the obligations under then outstanding Stock Bonus Agreements under this
Plan. Should McGrath RentCorp sell all or substantially all of its assets
in a transaction wherein the employees of McGrath RentCorp continue to be
employed by the purchasing corporation, such purchasing corporation shall
likewise be required to assume the obligations then outstanding under
Stock Bonus Agreements under this Plan.
2.1.3 Adjustments by Board. Adjustments shall be made by the Board,
whose determination as to what adjustment shall be made, and the extent
thereof, shall be final, binding and conclusive. No fractional shares of
Common Stock shall be issued under the Plan on account of any such
adjustment.
2.2 NO RIGHT OF EMPLOYMENT. Nothing contained in this Plan (or any
Stock Bonus Agreement pursuant to this Plan) shall confer upon any employee any
right to continue in the employ of McGrath RentCorp (or its subsidiaries) or
interfere in any way with the right of McGrath RentCorp (or its subsidiaries) to
reduce such Participant's compensation or to terminate such Participant's
employment with McGrath RentCorp or its subsidiaries.
2.3 NON-TRANSFERABILITY. The rights granted to a Participant to
receive shares of McGrath RentCorp Common Stock under certain circumstances
shall be non-transferable by the Participant other than by will or the laws of
descent and distribution. McGrath RentCorp shall not be liable for the debts,
contracts
- Appendix 2-
<PAGE> 22
or engagements of any Participant or his or her beneficiaries, and rights under
any Stock Bonus Agreement may not be taken in execution or by attachment or
garnishment, or by any other legal or equitable proceeding; nor shall the
Participant or his or her beneficiaries have any right to assign, pledge or
hypothecate any rights or benefits under such Agreements.
2.4 AMENDMENT, EFFECTIVE DATE, TERMINATION.
2.4.1 Amendment. The Board may at any time suspend, amend or
terminate this Plan.
2.4.2 Effective Date of the Plan. This Plan shall be effective,
retroactive as of January 1, 2000, and shall be submitted to the
shareholders of McGrath RentCorp for approval by a vote of a majority of
McGrath RentCorp's outstanding capital stock entitled to vote thereon on
or before December 31, 2000, and before any shares of McGrath RentCorp
Common Stock shall be issued under this Plan.
2.4.3 Termination of the Plan. Unless previously terminated by the
Board, this Plan shall terminate at the close of business on December 31,
2009, and no Stock Bonus Agreements shall be granted under it thereafter;
but such termination shall not affect any Stock Bonus Agreements
theretofore entered into under the provisions of this Plan.
March 23, 2000
- Appendix 3-
<PAGE> 23
MCGRATH RENTCORP
PROXY
THE BOARD OF DIRECTORS SOLICITS THIS PROXY FOR THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON WEDNESDAY, MAY 31, 2000 AT 2:00 P.M., LOCAL TIME, AT
THE MCGRATH RENTCORP CORPORATE HEADQUARTERS LOCATED AT 5700 LAS POSITAS ROAD,
LIVERMORE, CALIFORNIA 94550.
The undersigned hereby constitutes and appoints Robert P. McGrath and Randle F.
Rose, or each of them, with full power of substitution and revocation, attorneys
and proxies of the undersigned at the Annual Meeting of Shareholders of McGrath
RentCorp or any adjournments thereof, and to vote, including the right to
cumulate votes (if cumulative voting is required), the shares of Common Stock of
McGrath RentCorp registered in the name of the undersigned on the record date
for the Meeting.
PROPOSAL NO. 1: Election of Directors:
FOR the election of William J. Dawson, Robert C. Hood, Joan M. McGrath, Robert
P. McGrath, Delight Saxton and Ronald H. Zech as directors (TO WITHHOLD
AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE
NOMINEE'S NAME);
or
TO WITHHOLD AUTHORITY to vote for any of the nominees for director listed above.
PROPOSAL NO. 2: Approval of the adoption of the McGrath RentCorp 2000 Long-Term
Stock Bonus Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL NO. 3: Approval of the appointment of Arthur Andersen LLP as McGrath
RentCorp's independent public accountants for the year ending December 31, 2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE> 24
The Board of Directors recommends a vote FOR the nominees named above and FOR
Proposals No. 2 and No. 3. The shares represented by this Proxy will be voted as
directed above; IF NO SPECIFICATION IS MADE, THE SHARES WILL BE VOTED FOR SAID
NOMINEES AND PROPOSALS. The proxies are authorized to vote in their discretion
upon such other business as may properly come before the Meeting to the extent
authorized by Rule 14a-4(c) promulgated by the Securities and Exchange
Commission.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders, the Proxy Statement and the 1999 Annual Report to Shareholders
furnished with this Proxy.
Dated: , 2000
--------------------------------
Signature
--------------------------------
Signature
Signature should agree with name
printed hereon. If stock is held
in the name of more than one
person, EACH joint owner should
sign. Executors, administrators,
trustees, guardians, and
attorneys should indicate the
capacity in which they sign.
Attorneys should submit powers
of attorney.
PLEASE RETURN THIS SIGNED AND DATED PROXY IN THE ACCOMPANYING ADDRESSED ENVELOPE
