EXHIBIT 10.11

RETENTION AGREEMENT
This RETENTION AGREEMENT (this “Agreement”) is entered into as of February 1,
2015, between Electro Rent Corporation, a California corporation (“Electro
Rent”), and Allen Sciarillo (“Executive”) with reference to the following facts:
WHEREAS, Executive is, as of the date of this Agreement, Electro Rent’s VP
Finance;
WHEREAS, Executive and Electro Rent wish to enter into a contract providing for
severance pay in the event of termination of Executive’s employment on the terms
and conditions set forth herein; and
WHEREAS, capitalized terms not otherwise defined are defined in Schedule 1
hereto.
NOW THEREFORE, based on the mutual covenants contained herein, the parties agree
as follows:
1.Payment upon Termination. Upon any termination of Executive’s employment,
except as set forth in Section 2, Electro Rent’s sole obligation shall be to pay
to Executive (or, if applicable, to Executive’s estate) all amounts accrued and
unpaid as of the Date of Termination in respect of (i) Executive’s salary for
periods through such date, (ii) vacation pay to the extent consistent with
Electro Rent’s policies in effect from time to time regarding entitlement to
payment in respect of accrued but unused vacation time, and (iii) any
reimbursement for expenses owing to Executive consistent with Electro Rent’s
policies in effect from time to time.
2.Termination Without Cause or for Good Reason.
2.1    Following Material Change. If at any time during the 18 months following
a Material Change, Electro Rent terminates Executive’s employment other than for
Cause, or if Executive terminates his employment for Good Reason, then in
addition to amounts that Executive is entitled to receive under Section 1, (1)
Executive shall be entitled to receive as a severance payment two times
Executive’s Base Salary in effect at that time, payable as one lump sum on the
60th day after Executive’s termination of employment and (2) the vesting of all
of Executive’s then-outstanding unvested equity compensation awards granted by
Electro Rent (including without limitation any stock options or restricted stock
units) shall be immediately accelerated as of Executive’s Date of Termination.
2.2    At Other Times. If at any other time Electro Rent terminates Executive
other than for Cause, or if Executive terminates for Good Reason, then in
addition to amounts that Executive is entitled to receive under Section 1,
Executive shall be entitled to receive as a severance payment one times
Executive’s Base Salary in effect at that time, payable as one lump sum on the
60th day after Executive’s termination of employment.
In addition, in both cases 2.1 and 2.2, (1) upon payment of Electro Rent’s bonus
pool (if any) for its employees (including Executive) for the year in which the
termination occurs (the “Final Bonus Pool”), Executive will be paid (at the same
time as other bonuses from the Final Bonus Pool

 
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EXHIBIT 10.11

are paid) a share of any Final Bonus Pool equal to Executive’s share of the
comparable bonus pool for the immediately prior year times the percentage of the
year which passed prior to the Date of Termination and (2) Electro Rent will
reimburse Executive in arrears each month for any COBRA payments for the 12
months following the Date of Termination.
Further, for the avoidance of doubt, (i) the termination of Executive’s
employment due to his death or Disability shall not entitle Executive to any of
the payments or benefits set forth in this Section 2 and (ii) Executive shall
not in any case be entitled to the payments and benefits set forth in both
Section 2.1 and 2.2.
2.3    Tax Effect of Payments. In the event that it is determined that any
payment or distribution of any type to or for the benefit of Executive made by
Electro Rent, any of its affiliates, any person who acquires ownership or
effective control of Electro Rent or ownership of a substantial portion of
Electro Rent’s assets (within the meaning of section 280G of the Internal
Revenue Code of 1986, as amended, and the regulations thereunder (the “Code”))
or any affiliate of such person, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise (the “Total
Payments”), would be subject to the excise tax imposed by section 4999 of the
Code or any interest or penalties with respect to such excise tax (such excise
tax, together with any such interest or penalties, are collectively referred to
as the “Excise Tax”), then such payments or distributions shall be limited to
such amount which would result in no portion of the payments or distributions
being subject to the Excise Tax. To the extent it would not violate Internal
Revenue Code Section 409A (“Section 409A”) or cause Executive to be in
constructive receipt of payments or benefits that will not be provided to
Executive, the benefits to be limited may be selected by Executive as long as he
provides a prioritized list within ten (10) days of being notified by Electro
Rent of the need for a limitation on Total Payments. Otherwise, the order of
reduction and items which are being reduced will be as follows: (i) cash
payments; (ii) equity-based payments and acceleration of vesting; and (iii)
other non-cash forms of benefits. Within any such category of payments and
benefits (that is, within clause (i), (ii) or (iii)), a reduction shall occur
first with respect to amounts that do not constitute “deferred compensation”
within the meaning of Section 409A and then with respect to amounts that
constitute deferred compensation for such purposes. To the extent any such
payment is to be made over time (e.g., cash severance benefits payable in
installments), then the payments shall be waived in reverse chronological order.
2.4    Exclusivity of Remedies. Executive agrees that the rights and
entitlements set forth in this Agreement are his exclusive contractual and
severance rights and entitlements from Electro Rent and any affiliated entity
upon and as a result of the termination of Executive’s employment with Electro
Rent, and upon termination Electro Rent shall be released from all other
obligations under this Agreement, and Electro Rent shall require as a condition
of any Section 2 payments or benefits that (a) the Executive deliver to Electro
Rent (on or within 45 days after his termination of employment) a signed and
dated reasonable release of all claims against Electro Rent and its affiliates,
in a form prescribed by Electro Rent (“Release”) and (b) Executive not revoke
such Release and (c) Executive remain in full compliance with the terms of the
Release.
3.    At-Will Employment. Executive acknowledges and agrees that (i) Executive
is, as of the date of this Agreement, an at-will employee of Electro Rent, (ii)
Executive’s employment

 
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EXHIBIT 10.11

has no fixed term, and (ii) Executive’s employment may be terminated by Electro
Rent or Executive at any time, with or without notice, for any reason or no
reason (and no reason need be given). Executive’s employment shall terminate
automatically on Executive’s death. Executive’s status as an at-will employee of
Electro Rent can be changed only by a written agreement signed by Electro Rent’s
Chief Executive Officer and Executive.
4.    Covenants.
4.1    Employment Exclusive. During the Employment Period, Executive (i) shall
devote all his working time, attention, skill and efforts to the business and
affairs of Electro Rent, (ii) shall use his best efforts to promote the success
of Electro Rent’s business; (iii) shall observe and comply with all reasonable
rules, regulations, policies and practices promulgated to its employees
(including Executive) by Electro Rent, (iv) shall not enter the employ of or
serve as a consultant to, or in any way perform any services with or without
compensation for, any other person, enterprise, business, company, corporation,
partnership, firm, association without the prior written consent of Electro
Rent, and (v) except as permitted under Electro Rent’s policies for senior
officers as in force from time to time, shall not own any interest in any entity
or individual that (a) competes with Electro Rent in Electro Rent’s business as
it is then conducted or (b) is a material supplier or vendor to Electro Rent.
4.2    Confidential Information. Executive previously signed a copy of
Employers’ confidentiality policy and agrees to abide by it (as amended from
time to time) in accordance with its terms.
5.    Miscellaneous.
5.1    Agreement Authorized. Executive hereby represents and warrants that he is
free to enter into this Agreement and to render his services as an employee of
Electro Rent without breach of any contract or law, that he is not employed by,
or hold any offices with any other entities, and that he is not subject to any
obligation or restriction that would prevent him from discharging his duties
under this Agreement, and agrees to indemnify and hold harmless Electro Rent
from and with respect to any liability, damages or costs, including attorneys’
fees, arising out of any breach by Executive of this representation and
warranty. Electro Rent hereby represents and warrants that any required
authorization of this Agreement by its Board has been obtained.
5.2    Notices. Any notice required or desired to be given to Electro Rent or to
Executive shall be given in writing, and shall be addressed (i) to Electro Rent
at its principal place of business, and (ii) to Executive at his most recent
home address in the records of Electro Rent, or to such other address as that
party may hereafter designate in writing, and shall be sufficiently given by
actual delivery thereof to Electro Rent or Executive, as the case may be, or by
telegraph or registered mail, postage prepaid, return receipt requested,
addressed to the other party as aforesaid, and the date of delivery, mailing or
telegraphing shall be the date of the giving of such notice.
5.3    Payment of Taxes. To the extent that any taxes become payable by
Executive by virtue of any payments made or benefits conferred by Electro Rent,
Electro Rent shall not be liable to pay or obligated to reimburse Executive for
any such taxes or to make any adjustment

 
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EXHIBIT 10.11

under this Agreement. Any payments otherwise due under this Agreement to
Executive may be reduced by any required withholding for Federal, State and/or
local taxes and other appropriate payroll deductions.
5.4    Section 409A. To the maximum extent permitted, the Agreement is intended
to not constitute a “nonqualified deferred compensation plan” within the meaning
of Section 409A but in any event will be interpreted to comply with Section
409A. Notwithstanding the foregoing, in the event this Agreement or any benefit
paid under this Agreement to Executive is deemed to be subject to Section 409A,
Executive consents to Electro Rent’s adoption of such conforming amendments as
Electro Rent deems advisable or necessary, in its sole discretion (but without
an obligation to do so), to comply with Section 409A and avoid the imposition of
taxes under Section 409A. This Agreement will be interpreted and construed to
not violate Section 409A, although nothing herein will be construed as an
entitlement to or guarantee of any particular tax treatment to Executive. For
purposes of this Agreement, a termination of employment means a “separation from
service” as defined in Section 409A. Each payment made pursuant to any provision
of this Agreement shall be considered a separate payment and not one of a series
of payments for purposes of Section 409A. While it is intended that all payments
and benefits provided under this Agreement to Executive will be exempt from or
comply with Section 409A, Electro Rent makes no representation or covenant to
ensure that the payments under this Agreement are exempt from or compliant with
Section 409A. Electro Rent will have no liability to Executive or any other
person or entity if a payment or benefit under this Agreement is challenged by
any taxing authority or is ultimately determined not to be exempt or compliant.
Executive further understands and agrees that he will be entirely responsible
for any and all taxes on any benefits payable to him as a result of this
Agreement. If upon Executive’s “separation from service” within the meaning of
Section 409A, Executive is then a “specified employee” (as defined in Section
409A), then solely to the extent necessary to comply with Section 409A and avoid
the imposition of taxes under Section 409A, Electro Rent shall defer payment of
“nonqualified deferred compensation” subject to Section 409A payable as a result
of and within six (6) months following such “separation from service” under this
Agreement until the earlier of (i) the first business day of the seventh month
following Executive’s “separation from service,” or (ii) ten (10) days after
Electro Rent receives written confirmation of Executive’s death. Any such
delayed payments shall be made without interest.
5.5    Insurance. Electro Rent may, from time to time, apply for and take out,
in its own name and at its own expense, life, health, accident, disability or
other insurance on Executive in any sum or sums that it may deem necessary to
protect its interests, and Executive shall aid and cooperate in all reasonable
respects with Electro Rent in procuring any and all such insurance, including,
without limitation, submitting to the usual and customary medical examinations,
and by filling out, executing and delivering such applications and other
instruments in writing as may be reasonably required by an insurance company or
companies to which an application or applications for such insurance may be made
by or for Electro Rent.
5.6    Assignment. This Agreement is a personal contract, and the rights,
interests and obligations of Executive under this Agreement may not be sold,
transferred, assigned, pledged or hypothecated, except that this Agreement may
be assigned by Electro Rent to any corporation or other business entity which
succeeds to all or substantially all of the business of Electro Rent

 
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EXHIBIT 10.11

through merger, consolidation, corporate reorganization or by acquisition of all
or substantially all of the assets of Electro Rent and which assumes Electro
Rent’s obligations under this Agreement. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon any such successor
to the business of Electro Rent.
5.7    Entire Agreement. This Agreement sets forth the entire understanding of
the parties with respect to the matters contemplated herein and supersedes any
and all prior agreements or understandings between the parties relating to such
subject matter. No person has any authority to make any representation or
promise on behalf of any of the parties which is inconsistent with the
representations set forth in the Agreement and the Agreement has not been
executed in reliance on any promise or representation not set forth in the
Agreement.
5.8    Modification, Waiver and Amendment. None of the terms or provisions of
this Agreement shall be modified or waived, and this Agreement may not be
amended or terminated, except by a written instrument signed by the party
against which any modification, waiver, amendment or termination is to be
enforced. No waiver of any one provision shall be considered a waiver of any
other provision, and the fact that an obligation is waived for a period of time
or in one instance shall not be considered to be a continuing waiver.
5.9    Cooperation. Each party hereto agrees to execute any and all further
documents and writings and perform such other reasonable actions which may be or
become necessary or expedient to effectuate and carry out the provisions hereof.
5.10    Governing Law. This Agreement concerns a California resident, and all
questions with respect to this Agreement and the rights and liabilities of the
parties shall be governed by the laws of that state, regardless of the choice of
law provisions of California or any other jurisdiction.
5.11    Litigation. Executive agrees to render assistance, advice and counsel to
Electro Rent at its request regarding any matter, dispute or controversy with
which Electro Rent may become involved and of which Executive has or may have
reason to have knowledge, information or expertise. Such services will be
without additional compensation if Executive is then employed by Electro Rent
and for reasonable compensation and subjected to his reasonable availability if
he is not.
5.12    Rules of Construction.
5.12.1    Headings. The Section headings in this Agreement are inserted only as
a matter of convenience, and in no way define, limit, or extend or interpret the
scope of this Agreement or of any particular Section.
5.12.2    Tense and Case. Throughout this Agreement, as the context may require,
references to any word used in one tense or case shall include all other
appropriate tenses or cases. The term “including” means “including but not
limited to” unless the context otherwise requires.

 
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EXHIBIT 10.11

5.12.3    Severability. Nothing contained in this Agreement shall be construed
so as to require the commission of any act contrary to law and whenever there is
any conflict between any provision of this Agreement and any statute, law,
ordinance, order or regulation, contrary to which the parties have no right to
contract, the latter shall prevail, but in such event any provision of this
Agreement so affected shall be curtailed and limited only to the extent
necessary to bring it within legal requirements.
5.12.4    Counterparts. This Agreement may be executed in two counterparts, each
of which will be deemed an original, but all of which together will constitute
one and the same instrument.
EXECUTIVE ACKNOWLEDGES HAVING CAREFULLY READ ALL OF THE PROVISIONS IN THIS
AGREEMENT AND HAVING UNDERSTOOD AND NEGOTIATED SUCH PROVISIONS. EXECUTIVE
ACKNOWLEDGES THAT HE HAS AN OPPORTUNITY TO CONSULT WITH COUNSEL OF HIS CHOICE.
EXECUTIVE KNOWS THAT HE CANNOT RELY ON ANY STATEMENT OUTSIDE OF (i) THIS
AGREEMENT OR (ii) A FORMAL WRITTEN AMENDMENT OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first written above.
 
“Executive”
 
 
 
/s/ Allen Sciarillo
 
Allen Sciarillo
 
 
 
“Electro Rent”
Electro Rent Corporation
 
 
 
By: /s/ Daniel Greenberg
 
Daniel Greenberg, Its CEO

 
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EXHIBIT 10.11

Schedule 1
Definitions
“Base Salary” means Executive’s annual base salary rate exclusive of bonuses or
other compensation.
“Cause” shall exist if any one or more of the following should occur:
Executive’s (a) material breach of this Agreement or failure to comply with a
reasonable direction of Electro Rent, which remains in any such case uncured for
more than ten (10) days after a written warning (except in the case of a willful
failure to perform his duties or a willful breach, which shall require no
warning), (b) breach of his fiduciary duty to Electro Rent, (c) indictment (or
equivalent) for a felony or other serious crime, (d) inability for any reason to
render full services for a period of twenty-six (26) consecutive weeks, or eight
(8) months in any twelve month period, or (e) commission of a wrongful act that
would make the continuance of his employment by Electro Rent materially
detrimental to Electro Rent. No act, or failure to act, on Executive’s part
shall be considered “willful” if it was done, or omitted to be done, by him in
good faith with a reasonable belief that it was not contrary to the best
interest of Electro Rent.
“Date of Termination” means Executive’s last day of employment with Electro
Rent.
“Disability” means that the Executive is classified as disabled under a
long-term disability policy of Electro Rent or, if no such policy applies, the
Executive is unable to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment which can be expected
to result in death or which has lasted or can be expected to last for a
continuous period of not less than 12 months. The Disability of Executive shall
be determined solely by Electro Rent on the basis of such medical evidence as
Electro Rent deems warranted under the circumstances.
“Employment Period” means the period from the date hereof through the Date of
Termination.
“Good Reason” shall exist if Electro Rent (i) materially breaches this
Agreement; (ii) requires Executive to relocate the principal place of his
services more than twenty (20) miles from the location at which Executive
performed Executive’s duties prior to such relocation; (iii) fails to provide
Executive with compensation and benefits in the aggregate on terms not
materially less favorable in the aggregate than those enjoyed by Executive
immediately prior to the Material Change, or the subsequent taking of any action
that would materially reduce any of Executive’s compensation and benefits in
effect at the time of the Material Change unless such compensation and benefits
are substantially equally reduced for executive officers of Electro Rent as a
group (as measured by a percentage) and there is less than a ten percent (10%)
reduction in compensation or benefits; or (iv) assigns to Executive duties
materially and adversely inconsistent with Executive’s positions prior to the
Material Change (this includes a change in reporting responsibilities, authority
including title, or responsibilities; provided, however, a lateral transfer
within Electro Rent or to an affiliate shall not be provide ground for Good
Reason), and in each case Executive must provide Electro Rent with written
notice within ninety (90) days of the initial existence of the purported

 
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EXHIBIT 10.11

Good Reason event and such notice must describe in detail the basis and
underlying facts supporting Executive’s belief that a Good Reason event has
occurred (the “Good Reason Notice”). After its receipt of the Good Reason
Notice, Electro Rent shall then have thirty (30) days to cure or remedy the
alleged Good Reason event. Executive’s resignation for Good Reason can only be
effective if Electro Rent has not cured or remedied the Good Reason event within
thirty (30) days after Electro Rent’s receipt of the Good Reason Notice and if
Executive actually resigns his employment for Good Reason within sixty (60) days
after the expiration of the foregoing thirty (30) day cure/remedy period.
A “Material Change” shall be deemed to have occurred if (i) there shall be
consummated any consolidation or merger of Electro Rent, or any sale, lease,
exchange or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of Electro Rent other
than a transaction or series of related transactions in which the holders of
Electro Rent’s common stock immediately prior to the merger or consolidation
have at least seventy five percent (75%) ownership of the voting capital stock
of the surviving corporation immediately after the transaction or series of
related transactions, or (ii) any person (as such term is used in
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) shall become the beneficial owner (within the meaning of
Rule 13d-3 under the Exchange Act) of twenty five percent (25%) or more of
Electro Rent’s outstanding Common Stock, excluding persons and affiliates of
persons who have been 5% stock holders of Electro Rent for at least one year, or
(iii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the entire Board shall cease for any reason
(except death) to constitute a majority thereof unless the election, or the
nomination for election by Electro Rent’s shareholders, of each new director was
approved by a vote of the directors then still in office who were directors at
the beginning of the period. For purposes of Section 2, the occurrence of two or
more of the events constituting a Material Change which are the result of the
same or related transaction(s) shall be deemed a single Material Change and its
date shall be the date the first such event occurred. For example, a merger in
which former shareholders of Electro Rent received less than 75% of the voting
capital stock of the surviving corporation followed by a change in Electro
Rent’s Board falling within clause (iii) above and contemplated by said merger
shall be deemed a single Material Change as of the date of said merger.

 
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