EXHIBIT 10.12
CANCELLATION OF DEFERRED COMPENSATION AGREEMENT
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This Cancellation of Deferred Compensation Agreement (this "AGREEMENT") is
entered into as of January 27, 1997 by and between U.S. Rentals, Inc., a
California corporation (the "COMPANY"), and Xxxx X. XxXxxxxx ("EMPLOYEE"). The
parties agree as follows.
1. CONDITIONAL TERMINATION OF OLD PLAN. Employee agrees to the cancellation of
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the Old Plan effective as of the close of business on December 31, 1996,
subject to the following conditions:
1.1 VESTED AMOUNT. Employee is entitled to the portion of the Deferred
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Compensation earned as of December 31, 1996 in accordance with the Old
Plan. The payment of such earned amount will be in accordance with the
Employment Agreement.
1.2 CONTRIBUTION OF ASSETS. If the transactions contemplated by the Asset
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Contribution Agreement are not consummated by June 30, 1997, this
Agreement will terminate and the Old Plan will be reinstated effective
as of January 1, 1997.
1.3 GRANT OF STOCK OPTIONS. The Board of Directors of the Delaware Company
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will grant to Employee ,under the Delaware Company's 1997 Performance
Award Plan, options to purchase 3.667% of the shares of Common Stock
outstanding immediately after the IPO (excluding the shares subject the
underwriters' over-allotment option), presently estimated to be
1,127,462 shares. Employee will be granted such options as of the
closing date of the IPO, at the IPO price. Such options will vest
annually in 10 equal installments over a 9.5 year period commencing on
the first anniversary of the IPO.
1.4 NEW PAYMENT. The Company will pay Employee $6,666,667 (subject to
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withholding required by law) immediately prior to the transfer of
assets and liabilities to the Delaware Company contemplated by the
Asset Contribution Agreement.
2. DISPUTE RESOLUTION. Any dispute will be settled by mediation and binding
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arbitration using the procedures set forth in the Employment Agreement.
3. AMENDMENTS; WAIVERS. Amendments, waivers, demands, consents and approvals
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under this Agreement must be in writing and designated as such. No failure
or delay in exercising any right will be deemed a waiver of such right.
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4. SUCCESSORS AND ASSIGNS. This Agreement is binding upon and inures to the
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benefit of each party and such party's respective heirs, personal
representatives, successors and assigns. Nothing in this Agreement, express
or implied, is intended to confer any rights or remedies upon any other
person.
5. DEFINED TERMS.
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"ASSET CONTRIBUTION AGREEMENT" means the January 23, 1997 draft of the
proposed Asset Contribution Agreement to be entered into between the Company
and the Delaware Company immediately prior to the IPO, as modified at the
time it is signed.
"COMMON STOCK" means the Delaware Company's common stock, $0.01 par value.
"EMPLOYMENT AGREEMENT" means the January 23, 1997 draft of the proposed
Employment Agreement between the Delaware Company and Employee to be entered
into in connection with the IPO, as modified at the time it is signed.
"DEFERRED COMPENSATION" has the meaning set forth in the Old Plan.
"DELAWARE COMPANY" means U.S. Rentals, Inc., a Delaware corporation.
"IPO" means the initial public offering of the Common Stock.
"OLD PLAN" means the Deferred Incentive Compensation Plan entered into as of
January 1, 1995 by and between Employee and the Company and the Guaranty by
Xxxxxxx X. Xxxxxxx attached thereto.
The parties have signed this Agreement as of the date on page one, effective
as set forth in Section 1.
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Xxxx X. XxXxxxxx
U.S. RENTALS, INC., a
California corporation
By: ____________________
Xxxxxxx X. Xxxxxxx
Chairman of the Board
of Directors
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