Exhibit 10.1
AMENDED AND RESTATED EXECUTIVE EMPLOYMENT
AND NONCOMPETITION AGREEMENT
This Amended and Restated Employment and Noncompetition Agreement (“Agreement”)
is entered into between Rental Service Corporation, (the “Company” or “Rental
Service Corporation”) and Patricia D. Chiodo (“Executive”), effective as of
November 28th, 2006.
RECITALS
     WHEREAS, the Company operates its equipment rental business which has store
locations throughout North America (such business as operated by the Company is
referred to herein as the “Business”).
     WHEREAS, the Company’s life-blood is its Confidential Information,
including but not limited to customer databases, marketing and sales objectives
and strategies, customer lists, information regarding existing customer
preferences, habits, and needs, information regarding prospective customers,
details of past, pending and contemplated transactions, price lists, pricing
policies, sales data, training materials, and customer proposals, information
developed about the Company’s competitors, systems, strategies, designs,
processes, procedures, market data, know-how, compilations of technical and
non-technical data, advertising and promotional plans, and financial and other
projections, which information has been collected over a significant amount of
time and at great effort and expense.
     WHEREAS, the Company would be placed at an unfair competitive disadvantage
if Employee were able to use the Company’s Confidential Information and goodwill
for her or her own benefit, or for the benefit of anyone other than the Company.
     WHEREAS, with the assurances contained in the agreement, the Company
desires to employ Executive as Vice President, Controller, in which position she
will not only have access to the Company’s Confidential Information but also
will have the duty to expand and improve such information.
     WHEREAS, Executive desires to be employed by the Company in this position
and is willing to do so upon the terms contained herein.
     WHEREAS, the Company and Executive are currently parties to the Executive
Employment and Noncompetition Agreement, dated as of February 21st, 2005 which
the parties desire to amend and restate effective as of the date hereof.

 

--------------------------------------------------------------------------------

 

AGREEMENT
     NOW, THEREFORE, as a condition of employment, and for other good and
valuable consideration, including without limitation continued employment and/or
promotion or advancement, which Executive agrees is sufficient consideration for
this Agreement, and in consideration of the mutual promises and covenants set
forth below, the Company and Executive agree as follows:
ARTICLE I
EMPLOYMENT
     Section 1.1. Employment & Position. The Company shall employ Executive as
Vice President, Controller at the RSC Headquarters location in Scottsdale, AZ.
Executive shall report to the Chief Financial Officer, or another Senior
Executive as deemed appropriate by the Company. During Executive’s employment
hereunder, Executive shall devote all necessary energies, experience, skills,
abilities, knowledge and productive time to the performance of duties under this
Agreement and shall not render to others services that interfere with the
performance of her duties with the Company under this Agreement. The rendering
of services to others shall be subject to the approval of the Board.
     Section 1.2. Duties. Executive’s primary responsibilities shall be those
customarily performed by an Executive in the position of Vice President,
Controller.
     Section 1.3. Term of Employment. Executive shall be employed as herein set
forth, commencing on the date set forth above and continuing until terminated by
either party in accordance with section 2.5 below (the “Employment Term”).
ARTICLE II
COMPENSATION
     Section 2.1. Base Salary. Executive’s salary (the “Base Salary”) shall be
$160,000 per annum for the term of this Agreement and/or as increased in
accordance with Company policies as in effect from time to time. Base Salary
shall be payable in accordance with the standard payroll practices of the
Company.
     Section 2.2. Variable Compensation. In addition to her Base Salary,
Executive will be eligible to receive Variable Compensation, in accordance with
the Company’s Variable Compensation Plan as in effect from time to time, and
which will provide her with additional incentive opportunity with a target of
50% of her Base Salary and a maximum of 100% of her Base Salary.

2

--------------------------------------------------------------------------------

 

          Section 2.3. Equity incentive. Executive will be offered the
opportunity to participate in the Company’s Stock Incentive Plan at such level
and on such terms as the Board determines appropriate.
          Section 2.4. Other Benefits. During the Employment Term, Executive
shall be entitled to all benefits and conditions of employment generally
provided to other RSC Company executives, subject to the same eligibility and
other reasonable conditions of Company benefit programs and to country related
differences, including, but not limited to, medical, dental, life insurance,
non-qualified deferred compensation programs, sick leave, disability, automobile
allowance ($900 per month) and participation in any retirement plan. In
addition, benefits shall include, but not be limited to not less than four weeks
vacation per year.
          Section 2.5. Employment Separation.
          (a) Severance Benefits: The Company may, at its sole discretion,
terminate Executive’s employment at any time, provided however, that if the
Company severs Executive’s employment for any reason other than For Cause, the
Company shall provide the following severance payments and benefits
(collectively “Severance Benefits”), less all applicable federal and state
income and withholding taxes, in exchange for a full and complete release of all
claims against the Company, in the form customarily used by the Company,
executed by Executive:

  1.   Eighteen (18) months of Base Salary (the “Severance Period”), plus a
pro-rata portion of variable compensation for the calendar year, or if variable
compensation is to be paid quarterly then for the calendar quarter, in which the
severance occurs up to the separation date, such pro rata bonus to be equal to
the variable compensation Executive would have earned had Executive remained
employed through the end of the applicable period (pro rated based on the number
of days employed in such period). Executive’s entitlement to and the amount of
any variable compensation under this Section 2.5(a) (1) shall be determined at
the sole discretion of the Company. The Base Salary shall be payable in
accordance with the Company’s regular payroll practices, and the pro rata
variable compensation payments shall be payable at the time that other variable
compensation payments are made under the applicable Variable Compensation Plan.
Notwithstanding anything to the contrary, prior to the expiration of the first
anniversary of this Agreement, the Severance Period shall be thirty (30) months.
Further, notwithstanding the payment schedule described in this paragraph, if
Executive is a Specified Employee (as defined in Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”)) and becomes entitled to

3

--------------------------------------------------------------------------------

 

      the payment described in this Section 2.5 as a result of a separation of
service as defined by Section 409A(a)(2)(i) of the Code, then the portion of
such payment treated as “separation pay” for purposes of Section 409A shall not
be paid prior to the date which is six (6) months after the date of the
Executive’s separation of service with the Company if such payment would result
in the imposition of an excise tax under Section 409A of the Code. Any amount
described in the preceding sentence otherwise payable during the first six
months following Executive’s separation from service shall be accumulated and
paid to Executive in a lump sum amount on the first date of the seventh month
following the date of separation from service.         Executive’s entitlement
to the foregoing severance payments is contingent on her continued compliance
with the confidentiality, non-competition and non-solicitation provisions
outlined in Sections 3.1, 3.2, 4.2 and 4.3 herein. Executive understands that if
the Company determines that she has violated the confidentiality provisions,
covenant not to compete or non-solicitation provisions, the Company will not
make any further severance payments, and will be entitled to reimbursement from
Executive of any severance amounts already paid to her, all in addition to any
other remedy to which the Company may.     2.   Upon her separation from
service, if Executive is eligible and enrolled in the Company’s medical and
dental benefit programs, the Company will provide the necessary forms, including
COBRA notifications, to transfer the responsibility and right to continue those
benefits to Executive, which under COBRA are typically at her expense, for the
time period allowed by law or under the applicable programs. However, assuming
Executive is eligible and elects to continue those benefits, the Company will
continue to pay the same proportion of Executive’s medical and dental insurance
premiums under COBRA as during active employment (for Executive and eligible
dependents) until the earlier of: (1) the expiration of the Severance Period; or
(2) the date Executive is eligible for medical and dental insurance benefits by
another employer.     3.   Upon termination of employment, Executive is not
eligible to continue participation in the Company group life insurance program.
The Company will therefore pay, at the Company’s option, the premiums during the
Severance Period that are either

4

--------------------------------------------------------------------------------

 

  (i)   applicable to a conversion of the coverage (equal to the amount normally
provided to an employee without payment by the employee) from group to
individual coverage; or (ii) that will support the same level of coverage in a
term life policy. The company’s obligation under this sub-section is to provide
the required insurance and Executive is not entitled to a cash payment in
substitution thereof

    4.   If Executive is not fully vested in the Company’s 401(k) and/or other
retirement/pension plan on the date of separation, the Company shall pay
Executive an amount equal to the unvested portion of such account(s).     5.  
The Company on the date of separation will provide professional outplacement
counseling and services consistent with other Executives at similar compensation
levels. No cash lump sum payment in lieu of outplacement services will be
provided to Executive.     6.   During the Severance Period the Company will
continue to pay for Executive’s reasonable association fees related to
Executive’s former duties and responsibilities if and to the extent previously
paid by the Company.     7.   The Company shall, except in the case of any
termination of Executive’s employment for Cause, give the Executive no less than
30 days’ prior written notice of termination of employment. In the event the
Company gives such notice, the Executive shall be under no obligation to render
additional services and shall be allowed to seek other employment, provided that
the Severance Period shall be reduced accordingly if Executive so ceases to
provide services to the Company.

     (b) For Cause. The Company may, at its sole discretion, terminate
Executive’s employment at any time during the Employment Term “For Cause”. The
term “For Cause” means: (1) the failure of Executive to implement or adhere to
material policies, practices, or directives of the Company, including of the
Board; (2) conduct of a fraudulent and/or criminal nature; (3) any action of
Executive outside the scope of her employment duties that results in material
financial harm to the Company, (4) conduct that is in violation of any provision
of this Agreement or any other agreement between the Company or any of its
affiliates and Executive (including any non-competition, noninterference,
nonsolicitation or confidentiality agreement); or (5) solely for purposes of
this Section 2.5 , death or disability as defined hereinafter.

5

--------------------------------------------------------------------------------

 

     (c) Disability. Within the parameters allowed by federal and state law, the
Company reserves the right to terminate Executive’s employment or place her on
unpaid leave if Executive is incapacitated due to physical or mental illness and
cannot perform the essential functions of her job with or without a reasonable
accommodation.
     (d) Voluntary Resignation by Executive. Executive shall have the right to
terminate this Agreement at any time. Executive agrees to provide the Company
with thirty (30) days prior written notice of any such intended resignation. The
Company’s obligation to pay Executive’s Base Salary, variable compensation and
other benefits shall cease as of Executive’s date of separation. Executive shall
not be entitled to any Severance Benefits if she resigns.
ARTICLE III
CONFIDENTIAL INFORMATION
     Section 3.1. Confidential Information. Executive’s position with the
Company will, and have, necessarily give her access to, contact with and
knowledge of certain trade secrets, and confidential and proprietary business
information of the Company. This information includes but is not limited to
employee information, union information, employment and union litigation and
claim information, marketing and sales objectives and strategies, customer
lists, information regarding existing customer preferences, habits and needs,
information regarding prospective customers, details of past, pending and
contemplated transactions, price lists, pricing policies, sales data, training
materials, customer proposals, information developed about Company’s
competitors, systems, strategies, designs, processes, procedures, growth plans,
market data, know-how, compilations of technical and non-technical data,
advertising and promotional plans and strategies, and financial and other
projections relating to the Business, which are not generally known to or
readily ascertainable through legitimate means by the public or by competitors
of the Company (hereinafter collectively referred to as “Confidential
Information”). Executive shall not at any time disclose the Confidential
Information to anyone, except on a need-to-know basis in connection with
Executive’s duties in carrying out the business of the Company. Executive shall
not use any Confidential Information for her own benefit, or for the benefit of
anyone other than the Company or its affiliates.
     Section 3.2. Ownership of Records, Etc. All records, reports, notes,
compilations or other recorded matter, and copies or reproductions thereof, in
whatever media form, relating to the Confidential Information of the Company,
operations, activities or business, made or received by Executive during any
past employment or future period of employment with the Company are and shall be
the exclusive property of the Company. Executive shall keep the same at all
times in her custody, subject to control by the Company and Executive shall
surrender the same at the end of her employment, if not before. Failure to
return such property upon the request of the

6

--------------------------------------------------------------------------------

 

Company during Executive’s Employment Term or thereafter shall be a material
breach of this Agreement.
     Section 3.3. Injunctive Relief. Executive acknowledges that (a) the
provisions of Section 3.1 and Section 3.2 are reasonable and necessary to
protect the legitimate interests of the Company, and (b) any violation of
Section 3.1 or Section 3.2 will result in irreparable injury to the Company, the
exact amount of which will be difficult to ascertain, and that the remedies at
law for any such violation would not be reasonable or adequate compensation to
the Company for such a violation. Accordingly Executive agrees that if she
violates, or under the then existing circumstances it seems reasonable likely
that there may occur a violation of, the provisions of Section 3.1 or
Section 3.2, in addition to any other remedy which may be available at law or in
equity, the Company shall be entitled to specific performance and injunctive
relief, without posting bond or other security, and without the necessity of
proving actual damages.
ARTICLE IV
COVENANT NOT TO COMPETE
     Section 4.1. Recitals. Executive acknowledges and agrees that she has
technical and other extensive expertise associated with the Business and is well
known in the equipment rental industry. In addition, Executive has valuable
business contacts with employees, potential employees, clients, and potential
clients of the Business and with professionals in the equipment rental industry.
Furthermore, Executive’s reputation and goodwill are an integral part of the
Company’s success throughout the areas where the Business is and will be
conducted. If Executive deprives the Company of any of her goodwill or in any
manner uses her reputation and goodwill in competition with the Company, the
Company will be deprived of the benefits it has bargained for pursuant to this
Agreement. Since Executive has the ability to compete with the Company in the
operation of the Business, the Company therefore desires that Executive enter
into this Covenant Not To Compete.
     Section 4.2. Covenant Not to Compete. Executive agrees that during her
employment with Rental Service Corporation and for a period of twelve
(12) months commencing immediately after the end of her employment (the “Time
Period”), she shall not, unless acting with the Company’s prior written consent
(which may be withheld at the Company’s sole discretion), directly or indirectly
own, manage, join, operate or control, participate in the ownership, operation
or control of, or be connected as a director, officer, partner, or consultant,
or permit her name to be used in connection with the following businesses or
organizations that rent or lease construction or construction-related equipment
within the United States, Canada and Mexico (collectively “the Territory”):
Caterpillar, United Rentals, Sunbelt Rentals and its parent Ashtead Group plc,
Neff Rental, Hertz, Volvo, National Equipment Services and Maxim Crane Works or,
in the alternative, any business or organization not listed above that rents or
leases

7

--------------------------------------------------------------------------------

 

construction or construction-related equipment that has gross revenues of
$100 million or more, or has a total employee base of 500 employees or more or
that has plans to enter into the construction-related equipment rental or
leasing business in the Territory.
The parties agree that if a court of competent jurisdiction determines that the
Time Period for purposes of this Section 4.2 is unreasonably long and found to
be an unenforceable term, the Time Period for purposes of this Section 4.2 shall
be shortened to the maximum duration enforceable under applicable law.
If a court of competent jurisdiction determines that the Territory is an
unreasonable geographic scope for this provision, the Territory shall be deemed
reformed to include the United States and Canada, excluding Mexico. If a court
of competent jurisdiction determines that the Territory of the United States and
Canada is an unreasonable geographic scope for this provision, the Territory
shall be deemed reformed to include the United States.
     Section 4.3. No Solicitation of Customers or Employees. Executive agrees
that:
     (a) During her employment with Rental Service Corporation and for the Time
Period, she shall not, directly or indirectly, call on or solicit or divert or
take away from Rental Service Corporation or any of its affiliates (including by
divulging to any competitor or potential competitor of Rental Service
Corporation) any person, firm, corporation, or other entity who is a customer of
Rental Service Corporation or its affiliates and whom Executive had contact with
through any of her employment with Rental Service Corporation.
     (b) During her employment with Rental Service Corporation and for the Time
Period, she shall not, directly or indirectly, solicit employment of any
employee of Rental Service Corporation or any employee of any affiliate of
Rental Service Corporation for employment with any entity that rents or leases
construction or construction-related equipment in the Territory as defined in
Section 4.2.
     (c) The parties agree that if a court of competent jurisdiction determines
that the Time Period is unreasonably long and deemed unenforceable as defined
herein in Sections 4.3(a) or (b), the Time Period for purposes of
Sections 4.3(a) or (b), as applicable, shall be shortened to the maximum
duration enforceable under applicable law.
     Section 4.4. Severability of Provisions. In the event that the provisions
of this Section should ever be adjudicated by a court of competent jurisdiction
to exceed the time or geographic or other limitations permitted by applicable
law, then such provisions shall be deemed reformed to the maximum time or
geographic or other limitations permitted by applicable law, as determined by
such court in such action. Each breach of

8

--------------------------------------------------------------------------------

 

the covenants set forth herein shall give rise to a separate and independent
cause of action.
     Section 4.5. Injunctive Relief. Executive acknowledges that (a) the
provisions of Section 4.2 and Section 4.3 are reasonable and necessary to
protect the legitimate interests of the Company, and (b) any violation of
Section 4.2 or Section 4.3 will result in irreparable injury to the Company, the
exact amount of which will be difficult to ascertain, and that the remedies at
law for any such violation would not be reasonable or adequate compensation to
the Company for such a violation. Accordingly, Executive agrees that if she
violates, or under the then existing circumstances it seems reasonable likely
that there may occur a violation of, the provisions of Section 4.2 or
Section 4.3, in addition to any other remedy which may be available at law or in
equity, the Company shall be entitled to specific performance and injunctive
relief, without posting bond or other security, and without the necessity of
proving actual damages.
     Section 4.6. Equitable Tolling. The restrictive time periods referred to in
Sections 4.2 and 4.3 shall be tolled and extended by one month for each month or
portion of each month during which Employee is in violation of the restrictions.
If Company initiates legal action to enforce the restrictions and obtains an
injunction against Employee; then the appropriate restrictive time period(s)
will begin to run on the date that the injunction is entered.
ARTICLE V
GENERAL PROVISIONS
     Section 5.1. Assignment. Neither this Agreement nor any of the rights or
obligations hereunder may be assigned by any party without the prior written
consent of the other parties except that the Company may, without such consent,
assign all such rights and obligations to a wholly-owned subsidiary or newly
created legal entity (or a partnership controlled by the Company) or
subsidiaries of the Company or to a successor in interest to the Company which
shall assume all obligations and liabilities hereunder.
     Section 5.2. Sole and Entire Agreement. This Agreement constitutes the
entire existing agreement between the parties with respect to the subject matter
hereof, and completely and correctly expresses all of the rights and obligations
of the parties, except that the parties acknowledge that a special severance
benefit and a special retention benefit have been offered and accepted by
Executive contemporaneously with the Prior Agreement. It is the intent of the
parties that if the conditions set forth in the General Terms applicable to the
special severance benefit and the special retention benefit have been fulfilled,
Executive shall become entitled to the benefits set forth in the letters
offering the same to her, and such letters, together with the said General Terms
shall supersede this Agreement, but only to the extent that the same are
inconsistent herewith. All prior agreements including but not limited to prior
employment

9

--------------------------------------------------------------------------------

 

agreements, severance agreements and/or change in control agreements, arc
completely superseded and revoked. Executive expressly agrees that reliance on
any oral representation(s) is unreasonable.
     Section 5.3. Waivers. The waiver in any particular instance or series of
instances of any term or condition of this Agreement or any breach hereof by any
party shall not constitute a waiver of such term or condition or of any breach
thereof in any other instance.
     Section 5.4. Amendment. This Agreement is subject to amendment only by
subsequent written agreement between, and executed by, the parties hereto.
     Section 5.5. Separability. If any one or more provisions, clauses,
paragraphs, subclause or subparagraphs contained in this Agreement shall for any
reason be held to be invalid, illegal, void or unenforceable, the same shall not
affect any other provision, clause, paragraph, subclause or subparagraph of this
Agreement, but this Agreement shall be construed as if such invalid, illegal,
void or unenforceable provision, clause, paragraph, subclause or subparagraph
had never been contained herein.
     Section 5.6. Time Is of the Essence. Time is of the essence in this
Agreement. Any time limit mentioned herein has been carefully considered and
represents the agreed absolute outside limit of time within which the applicable
right must be exercised. The parties may extend such time limit only by mutual
agreement in writing.
     Section 5.7. Duration of Obligations. Executive’s obligations under
Article III and Article IV of this Agreement (especially those relating to
confidentiality, non- competition and non-solicitation) shall continue after her
employment with the Company is ended, regardless of the nature or reason for
such termination.
     Section 5.8. Attorneys’ Fees. In the event of a dispute, a court or an
arbitrator may award attorneys’ fees to the prevailing party.
     Section 5.9. Captions Definitions. Any captions; of articles, sections,
subsections or paragraphs of this Agreement are solely for the convenience of
the parties and are not a part of this Agreement or to be used for the
interpretation of this Agreement or any provision hereof.
     Section 5.10. Applicable Law. This Agreement shall be construed and
interpreted in accordance with the internal substantive laws, and not the choice
of law rules of the State of Arizona. Except where this Agreement provides for
injunctive relief, all disputes arising out of or in connection with this
Agreement shall be finally settled under the Rules of Arbitration of the
American Arbitration Association by a single arbitrator appointed in accordance
with the said Rules.

10

--------------------------------------------------------------------------------

 

     Section 5.11. Confidentiality. The parties agree that the terms of this
Agreement are to be held confidential and shall not be disclosed to any other
person or entity, except as required by law or legal process, and except that
either party may disclose the terms thereof to its or her legal counsel or tax
advisors.
     Section 5.12. Voluntary Agreement and Legal Counsel. Executive has been
encouraged to review this Agreement with her legal and other expert counsel and
has freely entered into this Agreement.
     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement or
caused this Agreement to be duly executed on their respective behalf, by their
respective officers thereunto duly authorized, all effective as of the day and
year first above written.

                  RENTAL SERVICE CORPORATION   EXECUTIVE    
 
               
By:
  /s/ Joseph A. Turturica
 
Joseph A. Turturica   By:   /s/ Patricia D. Chiodo
 
Patricia D. Chiodo    
 
  SVP & Chief People Officer       Vice President, Controller    

11