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                                                              Exhibit 10.37

                  [Letterhead of Rental Service Corporation]
                                        



[Name & Address of Employee]



Dear _______________:

          Rental Service Corporation (the "Corporation") considers it in the
best interests of its stockholders to foster the continuous employment of key
management personnel.  In order to induce you to remain in its employ, the
Corporation agrees that after this letter agreement (this "Agreement") has been
fully executed, you shall be entitled to receive the severance and other
benefits subject to the terms and conditions of this Agreement.

          1.   Term of Agreement.  This Agreement shall continue in effect
               -----------------                                          
through ______________.

          2.   Right to Severance and Other Benefits Upon Termination.
               ------------------------------------------------------ 

          (a) General.  So long as you comply with the Corporation's standard
              -------                                                        
termination procedures and execute a release in the form of Appendix A hereto,
you will be entitled to the benefits provided in Section 3(a) upon the
termination of your employment during the term of this Agreement, if such
termination is by the Corporation without Cause or by you due to a reduction in
your base salary and benefits (other than across the board salary cuts for
employees at your level or changes in benefits). For purposes of this agreement,
"cause" shall mean (i) gross negligence or malfeasance by Executive in the
performance of his employment-related duties, (ii) conviction of a felony or
other crime related to the performance of Executive's employment related duties.
Whether "cause" for termination exists shall, in any instance , be determined in
the good faith judgment of the Board of Directors of RSC, and shall not require
any judicial finding (except as set forth herein) as a condition precedent to
termination.

          Except in the event of acts involving fraud, dishonesty or bad faith
by Executive, or conviction for a crime as described herein, RSC shall give
Executive 30 days prior notice of any intention to terminate Executive for
cause, and the reasons therefore, and Executive shall have an opportunity to
cure the deficiencies cited. Executive's failure to cure such deficiencies
within such 30 day period shall be sufficient grounds for the Board to determine
that cause exists.
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          3.   Compensation Upon Termination.  The benefits referred to in
               -----------------------------                              
Section 2 are:

               (i)    your full base salary, when due, through your date of
     termination, plus all other amounts to which you are entitled under any
     compensation plan of the Corporation at the time such payments are due;

               (ii)   in lieu of any further salary payments, a lump sum
     severance payment equal to 100% of your base salary plus a pro rata payment
     of your target bonus for the current year.

               (iii)  for a twelve (12) month period after your date of
     termination, the Corporation shall arrange to provide you with life,
     disability, accident and group health insurance benefits substantially
     similar to those that you were receiving immediately prior to the
     termination.  Benefits otherwise receivable by you pursuant to this Section
     3(a)(iii) shall be reduced to the extent comparable benefits are actually
     received by you during such twelve-month period, and any such benefits
     actually received by you shall be reported to the Corporation; and;

               (iv) notwithstanding any other provision of this Agreement or of
     any stock option plan or agreement, all of your stock options granted prior
     to 1996 and all other stock options scheduled to vest in the year of your
     termination, and one-third of all other stock options held by you, if any,
     granted under any of the Corporation's stock option plans or agreements
     shall become vested and exercisable effective as of the day immediately
     prior to your date of termination, and remain exercisable for a period of
     180 days following your termination.

          (b) You shall bear all expense of, and be solely responsible for, all
federal, state, local or foreign taxes due with respect to any payment received
hereunder, including, without limitation, any excise tax imposed by Section 4999
of the Internal Revenue Code of 1986, as amended ("Code").


          4.   No Solicitation of Customers or Employees.  You agree that during
               -----------------------------------------                        
the term of this Agreement and for twelve (12) months after your termination of
employment for any reason, whether voluntary or involuntary:

          (a) you will not, directly or indirectly, call on or solicit or divert
or take away from the Corporation or any affiliate (including without limitation
by divulging to any competitor or potential competitor of the Corporation) any
person, firm, corporation or other entity who is a customer of the Corporation
or whose identity is known to you as one whom the Corporation or any affiliate
intends to solicit; and
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          (b)  you will not, directly or indirectly, hire or offer employment to
or seek to hire or offer employment to any employee of the Corporation or any
employee of any successor or affiliate of the Corporation, unless the
Corporation first terminates the employment of such employee or the Corporation
gives its written consent to such employment or offer of employment.

          5.   Miscellaneous.  No provision of this Agreement maybe modified,
               -------------                                                 
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by you and such officer as may be specifically designated
by the Board.  No waiver by either party hereto at any time of any breach by the
other party hereto of or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.  No agreements or representations, oral or otherwise, express
or implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement.  The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Delaware without regard to its conflicts of law
principles.  All references to sections of the Code shall be deemed also to
refer to any successor provisions to such sections.  You may not assign this
Agreement or your rights hereunder without the Corporation's prior written
consent.  Any payments provided for hereunder shall be paid net of any
applicable withholding required under federal, state or local law.  The
obligations of the Corporation under Section 3 shall survive the expiration of
the term of this Agreement.  The section headings contained in this Agreement
are for convenience only, and shall not affect the interpretation of this
Agreement.

          6.   Severability.  The invalidity or unenforceability of any
               ------------                                            
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.

          7.   Counterparts.  This Agreement may be executed in several
               ------------                                            
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.

          8.   Entire Agreement.  This Agreement sets forth the entire agreement
               ----------------                                                 
of the parties hereto in respect of your benefits upon termination and
supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto related to the subject
of your benefits upon termination; and any prior agreement of the parties hereto
in respect of your benefits upon termination, is hereby terminated and canceled.
Notwithstanding the foregoing, this Agreement shall not supersede any employment
agreement between you and the Corporation, except that if the provisions and
definitions of such an employment agreement in respect of your benefits upon
termination, if any, differ from the provisions and definitions of this
Agreement in respect of your benefits upon termination, you, in your sole and
absolute discretion, may choose whether the provisions and definitions of such
employment agreement or this Agreement shall govern all matters relating to your
benefits upon termination.
<PAGE>
 
          9.   No Employment Right Created.  Nothing in this Agreement shall
               ---------------------------                                  
confer on you any right to continue in the employ of the Corporation or shall
interfere with or restrict in any way the rights of the Corporation, which are
hereby expressly reserved, to discharge you at any time for any reason
whatsoever, with or without good cause, except as may be otherwise provided in
any written employment agreement between you and the Corporation.  This
Agreement shall not constitute an agreement for employment.


          Please sign and return to the Corporation this letter to evidence our
agreement on this subject.

                              RENTAL SERVICE CORPORATION


                              By______________________________
                                 Martin R. Reid
                                 Chief Executive Officer

Agreed to this ____ day of __________, ____.


___________________________________
Name:
<PAGE>
 
                                   APPENDIX A
                                   ----------
                                        
RELEASE
-------

          For valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the undersigned ("Employee"), on behalf of himself and his
spouse, dependents, predecessors, successors, heirs, assigns, representatives,
and agents, and each of them, does hereby release and forever discharge Rental
Service Corporation ("Employer") and its parents, subsidiaries, and affiliates,
past and present, and each of them, as well as its and their directors,
officers, associates, employees, servants, owners, stockholders, partners,
trustees, predecessors, successors, heirs, assigns, representatives, agents,
attorneys, and all persons acting by, through, under, or in concert with them,
past or present, and each of them, of and from any and all manner of action or
actions, cause or causes of action, in law or in equity, suits, debts, liens,
contracts, agreements, promises, liabilities, claims, demands, damages, losses,
costs, or expenses, of any nature whatsoever, known or unknown, fixed or
contingent (hereinafter called "Claims"), which Employee now has or may
hereafter have against them, or any of them, by reason of any and all acts,
omissions, events or facts occurring or existing prior to the date hereof.  The
Claims released thereunder include, without limitation, any Claims arising out
of, based upon, or relating to the hire, employment, or remuneration of Employee
by Employer or arising out of, based upon, or relating to Employee's termination
of employment with Employer; any Claims arising out of, based upon, or relating
to any alleged breach of any employment agreement between Employee and Employer;
any Claims arising out of, based upon, or relating to any alleged breach of any
covenant of good faith and fair dealing, express or implied; any Claims arising
out of, based upon, or relating to any alleged torts or other alleged legal
restrictions on Employer's right to terminate Employee's employment; and any
Claims arising out of, based upon, or relating to any alleged violation of any
federal, state, or local statute or ordinance pertaining to or governing
Employee's employment with Employer or the payment of wages, including, without
limitation, Title VII of the Civil Rights Act of 1964, as amended, the Age
Discrimination in Employment Act of 1967, as amended, the Americans with
Disabilities Act, as amended, the Equal Pay Act, as amended, the Fair Labor
Standards Act, as amended, and the Employee Retirement income and Security Act
of 1974, as amended.

          IN ACCORDANCE WITH THE OLDER WORKERS BENEFIT PROTECTION ACT OF 1990,
EMPLOYEE IS HEREBY ADVISED AS FOLLOWS:

               (A)  EMPLOYEE HAS THE RIGHT TO CONSULT WITH AN ATTORNEY BEFORE
     SIGNING THIS RELEASE;

               (B)  EMPLOYEE HAS TWENTY-ONE (21) DAYS FROM THE EXECUTION OF THIS
     RELEASE TO CONSIDER THIS RELEASE BEFORE THIS RELEASE BECOMES EFFECTIVE; AND
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               (C) EMPLOYEE HAS SEVEN (7) DAYS AFTER SIGNING THIS RELEASE TO
     REVOKE IT; OTHERWISE, THIS RELEASE WILL BECOME EFFECTIVE UPON THE
     EXPIRATION OF THAT REVOCATION PERIOD.

          EMPLOYEE ACKNOWLEDGES THAT HE HAS BEEN ADVISED OF AND IS FAMILIAR WITH
THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:

          "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
          NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
          RELEASE, WHICH, IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
          SETTLEMENT WITH THE DEBTOR."

EMPLOYEE, BEING AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVES ANY RIGHTS
HE MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW
PRINCIPLES OF SIMILAR EFFECT.

          Employee represents and warrants that there has been no assignment or
other transfer of any interest in any Claim which Employee may have against
Employer.  Employee agrees to indemnify and hold Employer harmless from any
liability, claims, demands, damages, costs, expenses, and attorneys' fees
incurred as a result of any person asserting any such assignment or transfer of
any rights or Claims under any such assignment or transfer.  It is the intention
of the Employee and Employer that this indemnity does not require payment as a
condition precedent to recovery by Employer from the Employee under this
indemnity.

          Employee agrees that if he hereafter commences, joins in, or in any
manner seeks relief through any suit arising out of, based upon, or relating to
any of the Claims released thereunder or in any manner asserts against Employer
any of the Claims released hereunder, then Employee will pay to Employer, in
addition to any other damages caused thereby, all attorneys' fees incurred by
Employer in defending or otherwise responding to said suit or Claim.

          Employee and Employer further understand and agree that neither the
payment of money nor execution of this Release shall constitute or be construed
as an admission of any liability whatsoever by either Employer or Employee.

Date: ________ ___, _____



                              ________________________________
                              Name: