Form 8K Current Report
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): May 30, 2006
UNITED
RENTALS, INC.
UNITED
RENTALS (NORTH AMERICA), INC.
(Exact
name of Registrants as Specified in their Charters)
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Delaware
Delaware
(States
or Other Jurisdiction
of
Incorporation)
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001-14387
001-13663
(Commission
file Numbers)
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06-1522496
06-1493538
(IRS
Employer
Identification
Nos.)
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Five
Greenwich Office Park, Greenwich, CT
(Address
of Principal Executive Offices)
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06831
(Zip
Code)
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Registrants’
telephone number, including area code: (203) 622-3131
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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Soliciting
material pursuant to Rule 14a-2 under the Exchange Act (17 CFR
240.14a-2)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange
Act
(17
CFR 240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange
Act
(17
CFR 240.13e-4(c))
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Item
1.01. Entry into a Definitive Material Agreement
1.
Employment
Agreement with Michael J. Kneeland
We
entered into an employment agreement, including a grant of Restricted Stock
Units (“RSUs”), with Michael J. Kneeland, our Executive Vice President,
Operations, on June 5, 2006. Certain summary information concerning this
agreement (and the RSU grant) is set forth below:
Base
Salary.
As has
previously been disclosed, Mr. Kneeland will be paid a base salary at the annual
rate of $400,000.
Bonus.
Mr.
Kneeland will be eligible to receive an annual cash incentive bonus pursuant
to
the terms of the company’s Annual Incentive Compensation Plan, with a target
amount of 100% of his base salary and a maximum bonus of 125% of his base
salary.
Restricted
Stock Units.
Mr.
Kneeland was granted 100,000 RSUs under the United Rentals, Inc. 2001
Comprehensive Stock Plan. 50,000 of the RSUs will vest ratably in three
substantially equal installments on each of May 15, 2007, 2008 and 2009 and
the
other 50,000 RSUs will vest based upon the achievement of four performance
goals: (i) specified increases in return on invested capital; (ii) specified
reductions of selling, general and administrative expenses (“SGA”) as a
percentage of annual revenue; (iii) specified contractor supply sales gross
margin; and (iv) specified diluted earnings per share (“EPS”). Upon vesting of
RSUs, the company will withhold from the number of shares to be delivered to
Mr.
Kneeland a number of shares equal to the minimum of the company’s tax
withholding requirements.
2.
Award
Agreements for Grant of Restricted Stock Units
Grants
of Restricted Stock Units.
On May
30, 2006, the Compensation Committee of the Board of Directors approved grants
of RSUs to Martin E. Welch, our Executive Vice President and Chief Financial
Officer, and Wayland R. Hicks, our Vice Chairman and Chief Executive Officer,
under the United Rentals, Inc. 2001 Comprehensive Stock Plan.
Mr.
Welch
was granted 190,000 RSUs. 100,000 RSUs will vest ratably in three substantially
equal installments on each of March 31, 2007, 2008 and 2009. The remaining
90,000 RSUs will vest based upon the achievement of the following performance
goals: (i) specified changes to the financial consolidation and reporting,
planning and budgeting application, and accounting services; (ii) specified
reductions of SGA as a percentage of annual revenue; (iii) specified increases
in return on invested capital; and (iv) specified diluted EPS. Upon vesting
of
RSUs, the company will withhold from the number of shares to be delivered to
Mr.
Welch a number of shares equal to the minimum of the company’s tax withholding
requirements. In addition, the grant agreement provides that upon a termination
without Cause or a resignation for Good Reason (as such terms are defined in
his
employment agreement), a pro-rata number of the time-vested RSUs scheduled
to
vest on the following March 31 will become vested. Also, upon a Change in
Control (as defined in the applicable plan) all of the time-vested RSUs that
have not yet vested will become vested, and in the event of a termination
without Cause or resignation for Good Reason within 12 months following a Change
in Control, all of the RSUs that vest on a performance basis will
become
vested (unless such Change in Control is a going-private transaction, in which
case all of the RSUs that vest on a performance basis will become immediately
vested).
Mr.
Hicks
was granted 150,000 RSUs. 50,000 RSUs will vest in three substantially equal
installments on each of May 15, 2007, 2008 and 2009. The remaining 100,000
RSUs
will vest based upon the achievement of the following performance goals: (i)
specified increases in return on invested capital; and (ii) specified diluted
EPS. Mr. Hicks’ RSUs will generally be paid three years after they vest, subject
to earlier payment upon (i) termination of employment for any reason; or (ii)
certain specified types of change of control. In addition, the grant agreement
provides that upon a termination without Cause or upon death or disability,
or a
resignation for Good Reason (as such terms are defined in his employment
agreement), a pro-rata number of the time-vested RSUs scheduled to vest on
the
following May 15 will become vested (and upon death or disability, any
performance-vested units that otherwise would have vested with respect to the
year in which such death or disability occurred will become vested on the
applicable vesting date). Also, upon a Change in Control (as defined in the
applicable plan) all of the time-vested RSUs that have not yet vested will
become vested, and in the event of a termination without Cause or resignation
for Good Reason within 12 months following a Change in Control, all of the
RSUs
that vest on a performance basis will become vested (unless such Change in
Control is a going-private transaction, in which case all of the RSUs that
vest
on a performance basis will become immediately vested).
3.
Revision
to Compensation Plan for Non-Employee Directors
On
May
31, 2006, upon the recommendation of the Compensation Committee of the Board
of
Directors, the Board approved changes to the compensation program for
non-employee directors. Certain summary information concerning changes to the
key terms of the compensation program for non-employee directors is set forth
below:
Annual
Board Retainer.
The
annual cash retainer will be increased from $45,000 to $55,000.
Annual
Equity Grant.
Deferred restricted stock units will replace the annual grant of 3,000 stock
options. Directors will receive $45,000 in fully vested RSUs, to generally
be
paid after three years.
Board
Meeting Fee.
The
Board meeting fee will be increased from $1,500 to $2,000.
Annual
Retainers.
The
Lead Director will receive an annual retainer of $7,500. The chairpersons of
the
Audit Committee and the Special Committee will receive increased annual
retainers of $12,500 (instead of the current $10,000), and the chairpersons
of
the Compensation Committee and the Nominating and Governance Committee will
receive increased annual retainers of $7,500 (instead of the current
$5,000).
Stock
Ownership.
A stock
ownership program providing for three times the annual cash retainer to be
achieved within four years will be implemented.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, each Registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized on this 5th day of June, 2006.
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UNITED
RENTALS, INC.
By: /s/
Martin E.
Welch
Name:
Martin E. Welch
Title:
Chief Financial Officer
UNITED
RENTALS (NORTH AMERICA), INC.
By:
/s/ Martin E.
Welch
Name:
Martin E. Welch
Title: Chief
Financial Officer
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