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EXHIBIT 10.29
RESTATED NONQUALIFIED STOCK OPTION AGREEMENT [MANAGEMENT-VESTED]
This RESTATED NONQUALIFIED STOCK OPTION AGREEMENT (the "Agreement") is made
effective as of the 1st day of April, 1996, between RENTX INDUSTRIES, INC., a
Delaware corporation (the "Company"), and Xxxx X. Xxxxxxx (the "Optionee"). In
consideration of the mutual promises set forth in this Agreement, we agree as
follows:
1. OPTION GRANT. Pursuant to the letter agreement dated April 1, 1996 between
the Company and the Optionee (the "Letter Agreement") and subject to the terms
and conditions of this Agreement (including, without limitation those relating
to "community property" and related matters set forth in Section 17), the
Company grants to the Optionee the right and option (the "Option") to purchase
an aggregate of 19,231 shares (the "Optioned Shares") of its nonvoting Class B
Common Stock (the "Stock") pursuant to the terms set forth below; provided,
however, that if, pursuant to the Company's certificate of incorporation, as
amended, each share of the Company's issued and outstanding Class B Common
Stock is reclassified and changed into one share of Class A Common Stock and
the outstanding rights to receive Class B Common Stock from the Company become
outstanding rights to acquire Class A Common Stock on a share-for share-basis,
then the term "Stock" shall also refer to such shares of Class A Common Stock).
This Option grant is made as a matter of separate agreement and not in lieu of
regular salary. The date on which this Option was granted was April 1, 1996
(the "Grant Date"). On January 30, 1997, the Company's Certificate of
Incorporation was amended to increase the authorized number of shares of
nonvoting Class B Common Stock from 12,350 shares to 192,308 shares. The
Option and the number of Optioned Shares set forth in this Agreement have been
restated to reflect such amendment to the Company's Certificate of
Incorporation. As a result, the Optioned Shares represent shares of the
authorized nonvoting Class B Common Stock of the Company as it exists following
such amendment.
2. STOCK OPTION PRICE. The purchase price of the Optioned Shares is $0.10
per share (the "Stock Option Price").
3. VESTING; TIME OF EXERCISE. The OPTIONEE'S right to exercise the Option
and acquire 100% of the Optioned Shares IS FULLY VESTED AS OF THE GRANT DATE.
SUBJECT to the provisions of Sections 13, 14 and 16, the Option may be
exercised at any time or times prior to 5:00 p.m., Colorado time, on April 1,
2006.
4. MANNER OF EXERCISE. The Option is exercisable by written notice to the
Company, signed by the Optionee. Such notice must set forth: [a] the election
to exercise the Option and accept the Company's offer, [b] the number of
Optioned Shares to which such exercise relates, and [c] a date at least three,
but no more than five, days after the giving of such notice on which payment of
the Stock Option Price will be made. Such notice must either be actually
delivered to the Company or sent by certified mail to the Company at 0000 Xxxxx
Xxxxxx, Xxxxxx, Xxxxxxxx, 00000, Attn: Xxxxx X. Xxxxxxxx, Vice President (or at
such other address as the Company may direct). Upon exercise of the Option by
giving written notice to the Company, the Optionee will be personally liable to
acquire the Optioned Shares as stated in such notice.
5. CLOSING ON SHARE ISSUANCE. On the date specified in the written notice of
exercise (the "Closing Date"), the Optionee will deliver to the Company [a] the
Stock Option Price for all Optioned Shares being acquired pursuant to the
Option, [b] the Optionee's signed investment letter in the form of the attached
Exhibit A (or in such form as the Board of Directors of the Company (the
"Board") may from time to time subsequently determine), [c] the Optionee's
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signed Class B Common Stock Voting Trust Agreement in the form of the attached
Exhibit B (or in such form as the Board may from time to time subsequently
determine) and [d], upon issuance by the Company, the stock certificate
representing the Optioned Shares, duly endorsed for transfer to the trustee
under the Class B Common Stock Voting Trust Agreement (in return for which the
Optionee shall receive a Voting Trust Certificate representing the Optioned
Shares). All of the provisions of this Agreement, including, without
limitation, Sections 7 through 18, will apply to each Voting Trust Certificate
issued under the Class B Common Stock Voting Trust Agreement in respect of any
Shares (as defined below). Payment will be made in cash, either by personal
check which clears in the ordinary course, by bank cashier's check or by
certified check (in all cases, in immediately available funds). Any other
method of payment may be made only if acceptable to the Board, in its
discretion. Notwithstanding the above, the Company shall not be obligated to
deliver any Optioned Shares unless and until, in the opinion of the Company's
counsel, there has been compliance with all applicable federal and state laws
and regulations and only when all other legal matters in connection with the
issuance and delivery of such Optioned Shares have been approved by the
Company's counsel. The Company shall use its best efforts to effect any such
compliance, and the Optionee shall take any such action reasonably requested by
the Company; provided, however, that in no event shall the Company be required
to file a registration statement under the Securities Act of 1933 or any state
securities law to satisfy its obligation to use its best efforts to effect such
compliance. The Optionee shall have the rights of a shareholder of the Company
only as to shares actually acquired by and issued to the Optionee under this
Agreement.
6. NONASSIGNABLE OPTION. Neither the Option nor any other rights acquired by
the Optionee under this Agreement are assignable or transferable by the
Optionee. Any sale, assignment, transfer, pledge or other disposition of any
Option contrary to the provisions of this Agreement, and any levy of any
attachment or similar process upon any Option, will be null and void. Upon the
occurrence of such an event, the Board may, in its discretion, terminate the
Option. The Option may be exercised only during the Employee's lifetime,
except as otherwise specifically provided in Section 13.
7. SHARE TRANSFER RESTRICTION. Except for Permitted Transfers (as defined in
Section 8) and unless a Release Event (as defined below) has occurred, none of
the Optioned Shares, any shares of capital stock of the Company issued in
respect of the Optioned Shares upon any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares, change in
corporate structure or otherwise, nor any right, title or interest therein,
whether represented by the Voting Trust Certificate or otherwise (the Optioned
Shares, all such other shares, and all right, title and interest therein being
referred to collectively as the "Shares"), may be sold, assigned, transferred,
pledged, or otherwise disposed of or encumbered, voluntarily or involuntarily,
by act of the Optionee or the Optionee's Permitted Transferee or by operation
of law, including, without limitation, by bequest or the laws of descent and
distribution (any of such events being referred to as a "Transfer"), without
the Company's prior written consent and upon such terms and conditions as the
Company may determine. Any attempted transfer of any Shares contrary to the
preceding sentence will be null and void. Nevertheless, the restriction on
transfer of the Shares set forth in this Section 7 will terminate and be of no
further force and effect upon the occurrence of any of the following events
(each of which is referred to as a "Release Event"): [a] the closing of any
Qualified Public Offering (as defined below), [b] the closing of the sale by
the Company of all or substantially all or its assets
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(other than to any entity of which the majority of the voting power of the
ownership interests therein is held, immediately prior to or immediately after
such sale, by the persons who immediately prior to such transaction hold a
majority of the voting power of the ownership interests in the company) (a
"non-affiliate asset sale"), or [c] the closing of the sale of the company
substantially in its entirety by [i] merger or consolidation (other than with
an entity of which the majority of the voting power of the ownership interests
therein is held, immediately prior to or immediately after such transaction, by
the persons who immediately prior to such transaction hold a majority of the
voting power of the ownership interests in the company) (a "non-affiliate
merger") or [ii] the sale by the stockholders of the company of all of the
outstanding capital stock (other than to any entity of which the majority of
the voting power of the ownership interests therein is held, immediately prior
to or immediately after such sale, by the persons who immediately prior to such
transaction hold a majority of the voting power of the ownership interests in
the company) (a "non-affiliate stock sale") (or by any combination of the
foregoing).
For purposes of this Agreement: [a] "Qualified Public Offering" means
the sale in an underwritten public offering or a series of public offerings,
registered under the Securities Act of 1933, as amended (the "Securities Act"),
of Common Stock, which results in public ownership of not less than 25% of the
Fully Diluted Common Stock of the Company, which shares of Common Stock are
listed upon the New York Stock Exchange, the American Stock Exchange or are
approved for quotation on the NASDAQ National Market and which offerings shall
have resulted in the receipt by the Company of aggregate cash proceeds (after
deduction of underwriting discounts and the costs associated with the
offerings) of at least $8 million and with the average price in such offering
or offerings reflecting a valuation of the Fully Diluted Common Stock
(excluding shares being issued in the offering or offerings) aggregating at
least $30 million; [b] "Common Stock" means the Class A Common Stock and the
Class B Common Stock of the Company; [c] "Common Stock Equivalents" means
(without duplication with any other Common Stock or Common Stock Equivalents)
rights, warrants, options (including, without limitation, employee stock
options), convertible securities or indebtedness, exchangeable securities or
indebtedness, or other rights, exercisable for or convertible or exchangeable
into, directly or indirectly, Common Stock and securities convertible or
exchangeable into Common Stock, whether at the time of issuance or upon the
passage of time or the occurrence of some future event, including (without
limitation) the Series A Preferred Stock and the Series B Preferred Stock of
the Company; and [d] "Fully Diluted Common Stock" means, at any time, the then
outstanding Common Stock of the Company plus (without duplication) all shares
of Common Stock issuable, whether at such time or upon the passage of time or
the occurrence of future events, upon the exercise, conversion or exchange of
all then outstanding Common Stock Equivalents.
8. PERMITTED TRANSFEREES. Any Optionee may transfer the Shares held by the
Optionee to the Optionee's spouse or children, to any other shareholder of the
Company, or to any employee of the Company or a Subsidiary of the Company, by
gift, by bequest, by the laws of descent and distribution, or by operation of
law in the case where the Optionee and the Optionee's Permitted Transferee (as
defined below) hold Shares as joint tenants with right of survivorship;
provided, however, that in all of the foregoing cases (each of which is
referred
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to as a "Permitted Transfer") the Optionee must first give notice to the
Company of such Transfer and the transferee (the "Permitted Transferee") first
must agree in writing to be a party to and bound by the terms and conditions of
this Agreement (including by execution of the signature page to this Agreement)
and an original of such writing must be delivered to the Company. Each
Permitted Transferee acknowledges and agrees that, upon acceptance of Shares
from the Optionee, the following provisions will apply: [a] the transfer
restrictions and other obligations applicable to the Optionee under this
Agreement, as well as the agreements and obligations of the Optionee under the
Class B Common Stock Voting Trust Agreement referred to in Section 5[c] will
apply to and be assumed by such Permitted Transferee with respect to the Shares
owned by the Permitted Transferee, and [b] if, as a result of the operation of
Section 9, the Optionee is (or would be) required by this Agreement to sell any
Shares held by such Optionee the Permitted Transferee agrees to sell the Shares
in the same manner and under the same terms as are applicable to the Optionee.
9. REPURCHASE RIGHT. If the Optionee's employment with the Company or any
Subsidiary is terminated for any or no reason (whether by voluntary or
involuntary act of the Optionee, the Company or any Subsidiary, including
retirement, firing, death or disability) before or after a Release Event, the
Company will have the right, but not the obligation, to purchase from the
Optionee and each Permitted Transferee all or any part of the Shares and all or
any part of the Optionee's right to acquire Optioned Shares (the Optionee's
right to acquire Optioned Shares, which IS FULLY vested AS OF THE DATE HEREOF,
IS ALSO referred to as the "Vested Options"), and the Optionee and each
Permitted Transferee must sell to the Company, if the Company exercises such
option, all of the Shares the Company desires to purchase and all of the Vested
Options the Company desires to purchase. The purchase price will be determined
under Section 10, and the closing will occur as provided in Section 11.
10. PURCHASE PRICE. [a] The purchase price per share payable by the
Company for the Shares will be fixed as of the effective date of termination of
the Optionee's employment with the Company or any Subsidiary (the "Termination
Date") at an amount equal to the fair market value thereof (the "Per Share
Purchase Price") determined as set forth in Section 11[b]. The purchase price
per Vested Option payable by the Company for the Vested Options will be the Per
Share Purchase Price minus the Stock Option Price for the Optioned Share
underlying such Vested Option.
[b] If, at the time the Company's repurchase
right under Section 10 becomes operative, the Shares are registered under the
Securities Act of 1934, as amended (meaning the Shares are "publicly traded"),
then the Per Share Purchase Price payable by the Company for the Shares will be
fixed as of the Termination Date at a per Share price equal to the arithmetic
mean of the market prices of the class of stock of which the Shares are a part
(the "Stock") for the 20 trading days preceding the Termination Date. For this
purpose, the market price of the Stock on each such day shall be [i] the
closing price of the Stock on the principal national securities exchange on
which it is then traded, or [ii] if the Stock is not then traded on a national
securities exchange, the closing price of the Stock reported by the National
Association of Securities Dealers, Inc. National Market System or Automated
Quotation System or its successors ("NASDAQ"), or [iii] if the closing price of
the Stock is not then reported by NASDAQ, the mean of the bid and asked prices
of the Stock reported by NASDAQ, or [iv],
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if bid and asked prices for the Stock are not then reported by NASDAQ, the mean
of the bid and asked prices of the Stock reported by the National Quotation
Bureau, Inc. or its successor. If, at the time the Company's repurchase right
under Section 10 becomes operative, the Shares are not registered under the
Securities Exchange Act of 1934, as amended, then the Per Share Purchase Price
payable by the Company for the Shares will be fixed as of the Termination Date
and determined in good faith by the Board of Directors using any reasonable
valuation method, with the Board's objective being to set the price at the
price at which a Share would change hands between a willing buyer and a willing
seller, neither being under any compulsion to buy or to sell and both having
reasonable knowledge of relevant facts including rights and restrictions on the
Shares or the class of stock of which they are a part.
11. CLOSING OF REPURCHASE. The closing of any purchase of Shares and/or
Vested Options by the Company under this Agreement will occur at a meeting of
the Company and the Optionee and/or the Permitted Assigns, as appropriate, on a
date selected by the Company and noticed to the Optionee and/or the Permitted
Assigns, as appropriate, which will be not later than the 120th day following
the Termination Date at 10:00 a.m. Colorado time at the Company's office in
Denver, Colorado (unless otherwise agreed by the Company and the Optionee
and/or the Permitted Transferees, as appropriate). At the meeting, the Company
will make payment for the Shares and/or Vested Options and the Optionee and/or
the Permitted Transferees, as appropriate, will deliver certificates
representing the Shares, duly endorsed for transfer. If the Shares so
purchased by the Company are then subject to the Class B Common Stock Voting
Trust Agreement, the Trustee thereunder is authorized and directed to deliver
to the Company stock certificates representing such Shares, against receipt of
payment therefor, and to deliver such payment to the Optionee upon delivery by
the Optionee to the Company of the Voting Trust Certificate representing such
Shares. Payment for the Shares and/or Vested Options will be made in cash or
by the Company's check or checks which clear in the ordinary course. All
notices under this Section to the Optionee or the Permitted Transferees, as
appropriate, will be in writing and will be deemed to have been duly given when
delivered in person (by express courier or otherwise), by telecopier or three
days after being deposited in the United States mail, certified mail, return
receipt requested, first class postage prepaid, to the Optionee or the
Permitted Transferees, as appropriate, at 0 Xxxxxx Xxxxxx Xxxx, Xxxxxxxxx, XX
00000, or to such other address as the Optionee or the Permitted Transferees, as
appropriate, will have specified by notice in writing to the Company.
12. STOCK LEGEND. Except to the extent that the Board determines to add or
revise the restrictive legend, all stock and voting trust certificates
evidencing Shares will be legended as follows by the Company:
The shares represented by this certificate are subject to, and are
transferrable only on compliance with, a Nonqualified Stock Option
Agreement dated as of April 1, 1996 between RentX Industries, Inc.
and the shareholder named on the face of this certificate, a copy of
which is on file with, and may be obtained from, RentX Industries,
Inc.
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13. EMPLOYMENT TERMINATION. If the Optionee's employment with the Company or
any Subsidiary is terminated for any or no reason (whether by voluntary or
involuntary act of the Optionee, the Company or any Subsidiary, including
retirement, firing, death or disability), the Option will terminate and be of
no further force or effect; provided, however, that the Option shall remain
exercisable for 60 days from such termination of employment; and, provided,
further, that in the event the Option is exercised within such 60-day period,
the Optionee and the Optionee's heirs, legal representatives and any other
person entitled to exercise the Option in the Optionee's stead shall, if and
to the extent the Company exercises its rights under Section 9, immediately
sell Shares and Vested Options to the Company in accordance with Section 9.
14. ACCELERATION OF EXPIRATION OF OPTION PERIOD. Notwithstanding anything to
the contrary contained in this Agreement, in the event [a] that the Company
proposes to engage in a Non-Affiliate Asset Sale, [b] that it is proposed that
the Company be sold substantially in its entirety by a Non-Affiliate Merger or
by a Non-Affiliate Stock Sale (or any combination of the events described in
this [b]), or [c] that any transaction is proposed that would result in a
change in the majority ownership of the Company (whether as a result of the
sale of outstanding stock or the issuance of new stock, other than in a public
offering registered under the Securities Act) (each of [a], [b] and [c] being
referred to herein as an "Acceleration Event"), the Company may, at its option,
notify the Optionee of such proposed Acceleration Event and require the
Optionee to elect, within 5 days after such notice, to either exercise the
Option or allow it to expire upon the closing of the Acceleration Event. If
the Optionee does not elect to exercise any portion of the Option within that
5-day period, the unexercised portion of the Option shall automatically expire
upon such closing. If the Optionee elects to exercise the Option within that
5-day period, in whole or in part, the Optionee shall deliver to the Company
all funds and documents required by such notice or this Agreement to exercise
such Option and the Company shall hold such funds and documents and the
certificate representing the shares issuable upon such exercise until such
closing and shall then deposit and collect the payment and forward the
certificate (or such other securities or property as the Optionee may have
become entitled to as a result of owning such shares on the closing) to the
Optionee (or, in the case of an Acceleration Event which involves the
acquisition or conversion of the outstanding capital stock of the Company, to
the acquiror of such stock). If the Acceleration Event is not consummated for
any reason, then [a] such exercise shall be of no force or effect, [b] the
unexercised portion of the Option shall not expire and [C] the Company shall
return to the Optionee such funds and documents delivered to it by the Optionee
in connection with such exercise and shall cancel the related certificate. The
notice originally given to the Optionee of a proposed Acceleration Event shall
describe the proposal generally. No subsequent change in the proposal shall
require a new notice or extend or revive the 5-day exercise period.
15. SHAREHOLDER/EMPLOYEE RIGHTS. The Optionee will have the rights of a
shareholder with respect to any Shares subject to the Option only after such
Shares are issued to such person following exercise of the Option. Nothing in
this Agreement confers on the Optionee any right to continue in the employ of
the Company or any Subsidiary or interferes in any way with the right of the
Company or any Subsidiary at any time to terminate or modify the terms or
conditions of the Optionee's employment.
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16. COMMUNITY PROPERTY MATTERS. If the Optionee, on or after the Grant Date,
resides in a state or other jurisdiction the laws of which determine the
interests of spouses in property on a "community property" or similar basis,
the grant of the Option and the Optionee's rights hereunder shall not be
effective unless and until the Optionee's spouse executes and delivers a
counterpart to the signature page hereto to the Company. The Optionee's spouse
shall be bound by the terms and conditions of this Agreement, including,
without limitation, those set forth in Sections 5 through 17.
17. TAX MATTERS.
[a] Tax Status. The Option granted under this Agreement is for
nonqualified stock options (that is, options that do not qualify as
incentive stock options under the Internal Revenue Code of 1986, as
amended (the "Code"). The Optionee is urged to consult with his or
her own tax advisors with respect to the federal and state income
taxation of the grant, exercise and disposition of stock pursuant to
the Option.
[b] Section 83(b) Election. Whenever property is transferred to a
taxpayer in connection with performance of services, and such property
is subject to a substantial risk of forfeiture (as that term is
defined under Section 83 of the Code and applicable Treasury
Regulations), the taxpayer may elect under Section 83(b) of the Code
to include in gross income (as compensation) the excess, if any, of
the fair market value of such property over the purchase price. If
this Section 83(b) election is made, no compensation income is
subsequently recognized when the risk of forfeiture lapses. If the
Optionee makes a Section 83(b) election he or she shall give timely
notice to the Company of the statement required by the Treasury
Regulations under Section 83 of the Code.
[c] Withholding. Whenever compensation income is recognized by the
Optionee with respect to the Option, the Company may require (as a
condition of Option exercise) the Optionee to make a withholding tax
payment to the Company. The amount of such payment shall equal the
amount of federal and state income tax that the Company or any
Subsidiary is required to withhold with respect to the issuance of
such stock. To the extent the required withholding tax payment is not
timely made by the Optionee, the Company or any Subsidiary may either
withhold such payment from the Optionee's cash compensation or make
such other arrangements as the Board determines.
[d] Interpretation. This Agreement, as well as all questions arising
thereunder, shall be interpreted and answered in the manner consistent
with the Code and applicable Treasury Regulations relating to
nonqualified stock options.
18. GENERAL PROVISIONS.
[a] Capital Changes. The number of shares and purchase price of the
Optioned Shares subject to the Option shall not change in the event of
any change to the shares of Stock or to any other class or series of
capital stock of the Company or any rights related thereto, whether by
reason of recapitalization, change in conversion rates, stock
dividend, stock split, combination of shares, exchange of shares,
change in corporate
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structure or otherwise, except that appropriate adjustments shall be
made by the Board in the number of shares and purchase price of the
Optioned Shares subject to the Option [i] prior to the first Qualified
Public Offering for any stock dividend, stock split or similar
transaction, as determined by the Board, declared or made with respect
to all shares of capital stock of the Company prior to, but in
connection with, such Qualified Public Offering, as determined by the
Board, and [ii] after the first Qualified Public Offering for any
stock dividend, stock split or similar transaction, as determined by
the Board. If any of the foregoing adjustments shall result in a
fractional share, the fraction shall be disregarded, and the Company
shall have no obligation to make any cash or other payment with
respect to such a fractional share.
[b] Leave of Absence. For purposes of this Agreement, employment of the
Optionee shall be treated as continuing intact while such person is on
sick leave, military leave or other bona fide leave of absence if the
period of such leave does not exceed ninety days. If such person's
leave exceeds ninety days, employment shall be treated as terminated
for purposes of this Agreement on the ninety-first day of such leave
unless such person's right of continued employment is guaranteed
either by statute or contract.
[c] Delivery. Delivery of any notice or document shall occur upon actual
delivery to the recipient (including receipt of telecopy or facsimile
transmission), and shall be deemed delivered the third day following
mailing by U.S. certified mail, postage prepaid, return receipt
requested, addressed to the recipient's then current mailing address.
Any corporate officer or other authorized agent may receipt for any
notice or document on behalf of the Company.
[d] Remedies. Each of the parties to this Agreement will be entitled to
enforce its rights under this Agreement specifically, to recover
damages by reason of any breach of the provisions of this Agreement
and to exercise all other rights existing in its favor. The parties
hereto agree and acknowledge that money damages would not be an
adequate remedy for any breach of the provisions of this Agreement by
the Optionee or any Permitted Transferee, and the Company may in its
sole discretion apply to any court of law or equity of competent
jurisdiction for specific performance and/or injunctive relief in
order to enforce or prevent any such breach of this Agreement,
including, without limitation, a breach of any provisions of the
transfer restriction contained in Section 7.
[e] Actions of Board. Any determination by the Board as to any question
with respect to this Agreement will be final and binding on the
Optionee. All actions taken and all interpretations and
determinations made by the Board in good faith shall be final and
binding upon the Optionee, the Company and all other interested
persons. In addition to any other rights of indemnification, each
Board member shall be indemnified by the Company against reasonable
expenses (including attorneys' fees) actually and necessarily incurred
in connection with the defense of any action, suit or proceeding (or
in connection with any appeal) to which such person may be a party by
reason of an action taken, or any failure to act, in connection with
this Agreement and the Stock Option granted under it. This
indemnification shall further extend to all amounts paid
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by any Board member either in a settlement approved by independent
legal counsel selected by the Board or pursuant to a judgment in any
such action, suit or proceeding, provided that the Board member acted
in good faith and in a manner he or she reasonably believed to be in
the best interests of the Company. Any action taken by the Board
under this Agreement may be made without notice or meeting of the
Board in a writing signed by all members of the Board.
.
[f] Subsidiary. Any reference to a Subsidiary means any corporation in
which the Company owns at least 80% of the total voting power and
value of its stock.
[g] Amendment. This Agreement may be amended only by a written instrument
signed by both parties.
[h] Binding Effect. This Agreement is binding upon, and inures to the
benefit of, the parties and their respective heirs, legal
representatives and permitted successors and assigns.
[i] Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to its subject matter, and it
supersedes all prior written and oral agreements, including, without
limitation, the Letter Agreement.
[j] No Waiver. No waiver of any default under this Agreement will be
considered valid unless in writing, and no such waiver will be deemed
a waiver of any subsequent default of the same or similar nature.
[k] Indemnification. Each party hereby indemnifies and agrees to hold
harmless the other from any liability, cost or expense arising from or
related to any act or failure to act of such party which is in
violation of this Agreement.
[l] Counsel. Each party has had the opportunity to obtain separate
counsel of choice. The Company expressly disclaims that it is giving
any tax advice to the Optionee with respect to the grant or exercise
of the Option or to any disposition of the Optioned Shares or any
Shares. The Optionee acknowledges and accepts this disclaimer.
[m] Originals. This Agreement is signed in two original documents, one to
be delivered to each party.
[n] Governing Law. This Agreement will be construed and enforced in
accordance with the laws of the State of Colorado.
[o] 30-Day Requirement. This Agreement will automatically terminate if
the Optionee fails to deliver an original of this Agreement to the
Company within thirty days after it has been delivered to the Optionee
(unless the Board otherwise determines).
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The Company and the Optionee have signed this Agreement effective as of the
date first above written, notwithstanding the actual date of signing.
RENTX INDUSTRIES, INC.
By: /s/ XXXXXX X. XXXXXXXXX
3/12/97 -----------------------------------
--------------------------
Date
Title: President - CEO
--------------------------------
OPTIONEE:
3/12/97 /s/ XXXX X. XXXXXXX
-------------------------- --------------------------------------
Date
-------------------------- --------------------------------------
Date Signature of Optionee's spouse (if
Section 17 is applicable)
-------------------------- --------------------------------------
Date Signature of Permitted Transferee
(pursuant to Section 8)
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EXHIBIT A
INVESTMENT LETTER
[MANAGEMENT]
[See Exhibit 27]
12
EXHIBIT B
CLASS B COMMON STOCK
VOTING TRUST AGREEMENT
[MANAGEMENT]
[See Exhibit 27]
13
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT (this "Agreement") is entered into
effective as of April 1, 1996 between RentX Industries, Inc., a Delaware
corporation (the "Employer"), and Xxxx X. Xxxxxxx (the "Employee").
Recitals
The Employee is the Executive Vice President of the Employer. The
execution and delivery of this Agreement is a condition precedent to the
Company executing and delivering two Restated Stock Option Agreements dated of
approximately even date herewith (the "Option Agreements") and granting the
Employee stock options thereunder.
Agreement
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, and other good and valuable consideration, the
receipt and sufficiency of which hereby are acknowledged, the parties agree as
follows:
I. DEFINITIONS
In addition to the terms defined elsewhere in this Agreement, the
following terms will have the meanings set forth below:
1.1. "Affiliate" means, with respect to any Person, (i) any Person in
which such Person directly or indirectly holds an equity or profits interest,
(ii) any Person controlling, controlled by or under common control with such
Person, (iii) any director, executive officer, partner or trustee of such
Person, (iv) any member of the immediate family of such Person, (v) any trust
in which a substantial portion of the beneficial interest is held by one or a
combination of the foregoing Persons or (vi) any Person to whom such Person
provides or has provided financial assistance. As used in this definition,
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities or voting interests, by contract or
otherwise.
1.2. "Business" means (i) the businesses conducted or planned to be
conducted by the Employer at any time during the Employee's employment by the
Employer and (ii) any business reasonably related or incident to, or
constituting a reasonable extension of, such businesses, whether or not the
Employer has been engaged therein prior to, or is engaged therein as of, the
date on which the Employee's employment by the Employer terminates so long as
on such date the Employer has plans to thereafter conduct such business.
1.3. "Person" means any natural person, corporation, trust,
partnership, limited liability company, joint venture, unincorporated
organization, government or governmental agency, or other entity.
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II. NONCOMPETITION; CONFIDENTIALITY
2.1. Noncompetition.
(i) The Employee acknowledges that the Employer's business is
intended to be nationwide, and agrees that any activity by the Employee
anywhere in the United States within the scope of the Business would unfairly
damage the Employer and the Business. Therefore, the Employee covenants and
agrees that during the term of the Employee's employment hereunder and for a
period ending two years after the Employee's employment with the Employer
terminates, neither the Employee nor any of the Employee's Affiliates will
engage, anywhere in the United States, directly or indirectly, as an owner of a
voting, equity or profits interest (or any option or right to acquire a voting,
equity or profits interest), director, officer, employee, consultant,
principal, agent, lender or guarantor of indebtedness or otherwise, in any
activity relating to any business that is competitive with the Business or that
is similar in any material respect to the Business.
(ii) (A) Notwithstanding the provisions of Section 2.1(i), this
Agreement will not be deemed to prohibit the Employee or the Employee's
Affiliates from "beneficially owning" (within the meaning of Rule 13d-3 under
the Securities Exchange Act of 1934, as amended) equity securities of another
Person engaged in an activity that, if engaged in by the Employee or the
Employee's Affiliates, would be prohibited by Section 2.1(i), so long as the
equity securities so owned by the Employee and the Employee's Affiliates
(including any such equity securities owned by any "associate" of the Employee
and the Employee's Affiliates within the meaning of Rule 12b-2 under the
Securities Exchange Act of 1934, as amended) are of a class of equity security
registered under the Securities Exchange Act of 1934, as amended, and do not
represent, in the aggregate, more than 2% of the voting power of all
outstanding equity securities of, or more than 2% of the profits interest in,
the issuer thereof so long as neither the Employee nor the Employee's
Affiliates has any other involvement with such other Person.
(B) Notwithstanding the provisions of Section 2.1(i), this
Agreement will not be deemed to prohibit any child of the Employee from being
employed by any business that is competitive with the Business or that is
similar in any material respect to the Business. Any child so employed shall
not be subject to Section 2.3.
(iii) The Employee and the Employer intend that the covenant
contained in Section 3.1(i) be deemed to be a series of separate covenants made
by the Employee, one for each state of the United States and each identical to
the terms of the covenant contained in Section 2.1(i).
2.2. No Competitive Hiring. The Employee covenants and agrees that
during the term of the Employee's employment hereunder and for a period of two
years after the date the Employee's employment with the Employer terminates,
the Employee will not, and will cause each of the Employee's Affiliates not to,
directly or indirectly solicit for employment any employee, officer or agent of
the Employer (except any employee whose employment by the Employer has
terminated) without the Employer's prior written consent.
2.3. Corporate Opportunities. The Employee covenants and agrees that
during the term of the Employee's employment by the Employer and for a period
of one year after the date the
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Employee's employment with the Employer terminates, the Employee will, and will
cause the Employee's Affiliates to, promptly refer to the Employer any
information or inquiry received by the Employee or any of the Employee's
Affiliates concerning any potential business opportunity involving the
Business.
2.4. Confidential Information. The Employee acknowledges that
information, observations and data obtained by the Employee and the Employee's
Affiliates concerning the Business or the business or affairs of the Employer
constitute confidential information, are trade secrets, are the property of the
Employer and are essential and confidential components of the Employer's
business. The Employee will not, and will cause the Employee's Affiliates not
to, directly or indirectly disclose to any Person or use any of such
information, observations or data, except to the extent that (i) any such
information, observations or data becomes generally known to and available for
use by the public other than as a result of disclosure by any Person owing a
duty of confidentiality to the Employer or (ii) the Employee or the Employee's
Affiliates are required to do so by applicable law, regulation or order of a
governmental agency or court of competent jurisdiction. Immediately upon
termination of the Employee's employment with the Employer, the Employee will
deliver to the Employer all memoranda, notes, plans, records, reports, and
other documents and information and all copies thereof in any tangible form
relating to the Business or the business and affairs of the Employer which the
Employee may then possess or have under the Employee's control and will destroy
all of such information in intangible form which is in the Employee's
possession or under the Employee's control.
2.5. Inventions. For purposes of this Section 2.5, "Invention" means
any invention, improvement, discovery or idea (whether patentable or not, and
including those which may be subject to copyright protection) relating to the
Business which are generated, conceived or reduced to practice by the Employee
alone or in conjunction with others, during or after normal business hours,
whether before or during the term of this Agreement, and all associated rights
to patents, copyrights and applications therefor. The Employee agrees promptly
to disclose to the Employer in writing all Inventions. All Inventions will be
the exclusive property of the Employer and hereby are assigned to the Employer.
The Employee will, at the Employer's reasonable expense, provide the Employer
with all assistance it requires to protect, perfect and use its rights to and
its interest in Inventions anywhere in the world and to vest in the Employer
such rights and interest.
2.6. Return of Documents, Etc. All documents and tangible items
provided to the Employee by the Employer or created by the Employee in
connection with the Employee's employment, together with all copies,
recordings, abstracts, notes or reproductions of any kind made from or about
such documents and tangible items or the information they contain, are the
property of the Employer and promptly will be returned to the Employer
immediately upon termination of the Employee's employment.
III. MISCELLANEOUS
3.1. Specific Performance. The Employer and the Employee acknowledge
and agree that any breach of the Employee's covenants set forth in Section II
hereof will result in irreparable damage to the Employer for which there will
be no adequate remedy at law. Therefore, the Employer and the Employee agree
that the Employer may in its sole discretion seek temporary
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and permanent court orders enjoining any breach of such covenants, without
prejudice to any other right or remedy to which the Employer may be entitled at
law, in equity or under this Agreement.
3.2. Arbitration. Except as set forth in Section 3.1, any disputes
arising under or in connection with this Agreement, including, without
limitation, those involving claims for specific performance or other equitable
relief, will be submitted to binding arbitration under the Commercial
Arbitration Rules of the American Arbitration Association (the "AAA Rules")
under the authority of federal and state arbitration statutes, and shall not be
the subject of litigation in any forum. EXCEPT AS SET FORTH IN SECTION 3.1,
EACH PARTY, BY SIGNING THIS AGREEMENT, VOLUNTARILY, KNOWINGLY AND INTELLIGENTLY
WAIVES ANY RIGHTS SUCH PARTY MAY OTHERWISE HAVE TO SEEK REMEDIES IN COURT OR
OTHER FORUMS, INCLUDING THE RIGHT TO JURY TRIAL. The arbitration will be
conducted only in Denver, Colorado, before a single arbitrator from the staff
of the Judicial Arbiter Group, Inc. ("JAG") selected by the parties to such
arbitration (or, if JAG is no longer in existence, before a single arbitrator
selected by the parties in accordance with the AAA Rules) or, if they are
unable to agree on an arbitrator, before a panel of three arbitrators selected
from the staff of JAG (or, if JAG is no longer in existence, before a panel of
three arbitrators selected in accordance with the AAA Rules), one selected by
the Employee, one selected by the Employer and the third selected by the other
two arbitrators. The arbitrators shall have full authority to order specific
performance and award damages and other relief available under this Agreement
or applicable law, but shall have no authority to add to, detract from, change
or amend the terms of this Agreement (except as otherwise contemplated by
Section 3.5) or existing law. All arbitration proceedings, including
settlements and awards, shall be confidential. The decision of the arbitrators
will be final and binding, and judgment on the award by the arbitrators may be
entered in any court of competent jurisdiction. THIS SUBMISSION AND AGREEMENT
TO ARBITRATE WILL BE SPECIFICALLY ENFORCEABLE.
3.3. Attorneys' Fees and Costs. The prevailing party or parties in
any arbitration or in any other action to enforce this Agreement will be
entitled to all reasonable costs and expenses, including attorneys' fees and
fees and expenses of the arbitrators, incurred in connection therewith.
3.4. Binding Contract. The mutual reliance by the Employer and the
Employee upon the existence of this Agreement as a condition precedent to their
obligations to consummate the transaction contemplated by the Option Agreements
will constitute sufficient consideration for the validity and enforceability of
each of its provisions.
3.5. Severability. The Employer and the Employee agree that the terms
of this Agreement, and in particular the restrictions on the Employee set forth
in Section II, are reasonable and fair in light of the transactions
contemplated hereby and by the Option Agreements. Whenever possible each
provision of this Agreement will be interpreted so as to be fully effective and
valid under applicable law. If any provision of this Agreement is determined to
be invalid, illegal or unenforceable in any respect as written, such provision
will be automatically modified only to the minimum extent necessary to make it
enforceable and the provision as so modified will be enforced, without
invalidating any other provision of this Agreement (it being the intent of the
parties that, if Section 2.1(i) is not enforceable as written, Section 2.1(i)
shall be enforceable with respect to each state of the United States in which
the Employer owns rental equipment stores as of the date on which the
Employee's employment by the Employer terminates). If any provision contained
in this
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Agreement is determined to be void or unenforceable against the Employee in
whole or in part, it will not be deemed to affect or impair the validity of any
other provision of this Agreement or the validity thereof with respect to any
other party. This Agreement constitutes a fully negotiated agreement between
the parties, each with the aid and assistance of legal counsel. The language
used in this Agreement will be deemed to be the language chosen by the parties
to express their mutual intent and will be construed and interpreted as though
drafted by all the parties to this Agreement.
3.6. Extension of Periods. The periods of time set forth in Section
II of this Agreement will be extended by any period of time during which the
Employee or any of the Employee's Affiliates is in breach of any term of this
Agreement.
3.7. Waiver. Any failure by the Employer to insist upon strict
compliance with any term, covenant or condition hereof will not be deemed to be
a waiver of such term, covenant or condition, nor will the relinquishment of
any right or power hereunder by the Employer at any one or more times be deemed
a waiver or relinquishment of such right or power by the Employer at any other
time or times.
3.8. Assignment. This Agreement will inure to the benefit of and be
enforceable by the parties and their successors and assigns, but will not be
assignable or delegable in whole or in part by the Employee.
3.9. Headings. The headings contained in this Agreement are inserted
for convenience only and do not constitute a part of this Agreement.
3.10. Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed to be an original but all of which
together shall constitute but one agreement.
3.11. Complete Agreement. This Agreement embodies the complete
agreement and understanding between the parties and supersedes and preempts any
prior understandings, agreements or representations by the parties, written or
oral, which may relate to the subject matter hereof.
3.12. CHOICE OF LAW. THE CONSTRUCTION, VALIDITY AND INTERPRETATION OF
THIS AGREEMENT WILL BE GOVERNED BY THE INTERNAL LAW OF THE STATE OF COLORADO
WITHOUT REFERENCE TO ANY CONFLICT OF LAW PRINCIPLES.
3.13. Notices. All notices hereunder shall be in writing. Any notice
hereunder shall be deemed duly given if it is sent by registered or certified
mail, return receipt requested, postage prepaid, or by courier, telecopy or
facsimile, and addressed to the intended recipient as follows: (i) if to the
Employee: 0 Xxxxxx Xxxxxx Xxxx, Xxxxxxxxx, XX 00000, Telecopy (000) 000-0000;
or (ii) if to the Employer: RentX Industries, Inc., 0000 Xxxxx Xxxxxx, Xxxxxx,
Xxxxxxxx 00000, Attn: Xxxxx X. Xxxxxxxx, Telecopy: (000) 000-0000. Notices will
be deemed given three days after mailing if sent by certified mail, when
delivered if sent by courier, and upon receipt of confirmation by person or
machine if sent by telecopy or facsimile transmission. Either party may change
the address to
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which notices hereunder are to be delivered by giving the other party notice in
the manner herein set forth.
IN WITNESS WHEREOF, the parties have hereunto set their hands
effective as of the date first above written, notwithstanding the actual date
of signing.
RENTX INDUSTRIES, INC.
Dated: February 21, 1997 By: /s/ Xxxxxx Xxxxxxxxx
----------------------------------
Name: Xxxxxx Xxxxxxxxx
--------------------------------
Title: President-CEO
-------------------------------
Dated: February 28, 1997 /s/ Xxxx X. Xxxxxxx
-------------------------------------
Xxxx X. Xxxxxxx
6
