Document:

Exhibit 10.35

 

H&E EQUIPMENT SERVICES, INC.

 

2006 STOCK-BASED INCENTIVE COMPENSATION PLAN

 

ADOPTED JANUARY         ,
2006

 

 

H&E EQUIPMENT SERVICES, INC.

 

2006 STOCK-BASED INCENTIVE COMPENSATION PLAN

 

I.              Purpose
of the Plan

 

The
purpose of the Plan is to assist the Company, its Subsidiaries and Affiliates
in attracting and retaining valued employees by offering them a greater stake
in the Company’s success and a closer identity with it, and to encourage
ownership of the Company’s Stock by such employees.

 

II.            Definitions

 

A.            “Affiliate” means any
entity other than the Subsidiaries in which the Company has a substantial
direct or indirect equity interest, as determined by the Board.

 

B.            “Award” means an award of
Deferred Stock, Restricted Stock, or Options under the Plan.

 

C.            “Board” means the Board
of Directors of the Company.

 

D.            “Cause” means: (i) the
Participant’s willful misconduct or gross negligence in connection with the
performance of the Participant’s duties for the Company, its Subsidiaries or
Affiliates; (ii) the Participant’s conviction of, or a plea of nolo
contendre to, a felony or a crime involving fraud or moral turpitude; (iii) the
Participant’s engaging in any business that directly or indirectly competes
with the Company, its Subsidiaries or Affiliates; or (iv) disclosure of
trade secrets, customer lists or confidential information of the Company, its
Subsidiaries or Affiliates to a competitor or unauthorized person.

 

E.             “Change in Control”
means:

 

1.             the
acquisition in one or more transactions by any “Person” (as such term is used
for purposes of section 13(d) or section 14(d) of the 1934
Act) but excluding, for this purpose, the Company or its Subsidiaries, any Stockholder
of the Company immediately prior to the consummation of the Company’s Initial
Public Offering or any employee benefit plan of the Company or its
Subsidiaries, of “Beneficial Ownership” (within the meaning of Rule 13d-3
under the 1934 Act) of thirty-five percent (35%) or more of the combined voting
power of the Company’s then outstanding voting securities (the “Voting
Securities”);

 

 

2.             the
individuals who, as of the effective date of the Plan, constitute the Board
(the “Incumbent Board”) cease for any reason to constitute at least a majority
of the Board; provided, however, that if the election, or nomination for
election by the Company’s Stockholders, of any new director was approved by a
vote of at least a majority of the Incumbent Board, such new director shall be
considered as a member of the Incumbent Board, and provided further that any
reductions in the size of the Board that are instituted voluntarily by the
Incumbent Board shall not constitute a Change in Control, and after any such
reduction the “Incumbent Board” shall mean the Board as so reduced;

 

3.             a merger
or consolidation involving the Company if the Stockholders of the Company,
immediately before such merger or consolidation, do not own, directly or
indirectly, immediately following such merger or consolidation, more than
seventy percent (70%) of the combined
voting power of the outstanding Voting Securities of the corporation resulting
from such merger or consolidation;

 

4.             a
complete liquidation or dissolution of the Company or a sale or other
disposition of all or substantially all of the assets of the Company; or

 

5.             acceptance
by Stockholders of the Company of shares in a share exchange if the Stockholders
of the Company immediately before such share exchange, do not own, directly or
indirectly, immediately following such share exchange, more than seventy
percent (70%) of the combined voting power of the outstanding Voting Securities
of the corporation resulting from such share exchange.

 

F.             “Code” means the Internal
Revenue Code of 1986, as amended.

 

G.            “Committee” means the
Board or such committee designated by the Board to administer the Plan under Section IV.

 

H.            “Common Stock” means the
common stock of the Company, par value $0.01 per share, or such other class or
kind of shares or other securities resulting from the application of Section IX.

 

I.              “Company” means H&E
Equipment Services, Inc., a Delaware Corporation, or any successor company
or corporation.

 

J.             “Company Stock” means the
Common Stock or Preferred Stock of the Company.

 

K.            “Deferred Stock” means an
Award made under Section VI of the Plan to receive Company Stock at the
end of a specified Deferral Period.

 

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L.             “Deferral Period” means
the period during which the receipt of a Deferred Stock Award under Section VI
of the Plan will be deferred.

 

M.           “Disability” means, as determined by the Committee in
its sole discretion, that an Employee:

 

1.             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 can be expected to last for a continuous period of not less than 12
months, or

 

2.             is, by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, receiving income replacement benefits for a period
of not less than 3 months under an accident and health plan covering employees
of the Company.

 

N.            “EBITDA” means for any
given year, the Company’s earnings before interest, income taxes, depreciation,
amortization and any accounting charges incurred with respect to this Plan or
any Awards granted under this Plan as determined after payment of bonuses, if
any, but adjusted for purchase accounting or any other items that are
considered unique, or likely to affect only one accounting period (unique or “one
time” charges are charges for which, under generally accepted accounting
principles consistently applied, an adjustment to EBITDA would be considered
proper), as determined by the Board, in its sole discretion, based on the
audited financial statements for such year.

 

O.            “Employee” means an
officer or other key employee of the Company, a Subsidiary or an Affiliate
including a director who is such an employee.

 

P.             “Fair Market Value”
means, on any given date, the value of one share of Common Stock of the Company’s
stock as determined by the Board in its sole discretion.

 

Q.            “Incentive Stock Option”
means an Option intended to meet the requirements of an incentive stock option
as defined in section 422 of the Code and designated as an Incentive Stock
Option.

 

R.            “Initial Public Offering”
means the first underwritten public offering of the Company’s stock pursuant to
a Registration Statement filed with the United States Securities and Exchange
Commission on Form S-1, or its then equivalent.

 

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S.             “1934 Act” means the
Securities Exchange Act of 1934, as amended.

 

T.            “Non-Qualified Option”
means an Option not intended to be an Incentive Stock Option, and designated as
a Non-Qualified Option.

 

U.            “Option” means any option
to acquire Stock of the Company granted from time to time under Section VIII
of the Plan.

 

V.            “Participant” means an
Employee to whom an Award is made.

 

W.           “Plan” means the H&E Equipment Services, Inc.
2006 Stock-Based Incentive Compensation Plan herein set forth, as amended from
time to time.

 

X.            “Preferred Stock” means
the preferred stock of the Company, or such other class or kind of shares or
other securities resulting from the application of Section IX

 

Y.            “Restricted Stock” means
Company Stock awarded by the Committee under Section VII of the Plan.

 

Z.            “Restriction Period”
means the period during which Restricted Stock awarded under Section VII of
the Plan is subject to forfeiture.

 

AA.        “Retirement” means retirement from the active
employment of the Company, a Subsidiary or an Affiliate pursuant to the
relevant provisions of the applicable pension plan of such entity or as
otherwise determined by the Board.

 

BB.          “Securities Act” means the Securities Act of 1933, as
amended.

 

CC.          “Subsidiary” means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company (or
any subsequent parent of the Company) if each of the corporations other than
the last corporation in the unbroken chain owns stock possession 50% or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain.

 

DD.         “Ten Percent Stockholder” means a person who on any
given date owns, either directly or indirectly (taking into account the
attribution rules contained in section 424(d) of the Code), stock
possessing more than 10% of the total combined voting power of all classes of stock
of the Company or a Subsidiary.

 

III.           Eligibility

 

Any Employee is eligible to receive an Award.

 

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IV.           Administration
and Implementation of Plan

 

A.            The Plan shall be administered
by the Committee, which shall have full power to interpret and administer the
Plan and full authority to act in selecting the Employees to whom Awards will
be granted, in determining the type and amount of Awards to be granted to each
such Employee, the terms and conditions of Awards granted under the Plan and the
terms of agreements which will be entered into with Participants.

 

B.            The Committee’s powers shall
include, but not be limited to, the power to determine whether, to what extent
and under what circumstances an Option may be exchanged for cash, Company Stock
or some combination thereof; to determine whether, to what extent and under
what circumstances an Award is made hereunder; to determine whether, to what
extent and under what circumstances Company Stock or cash payable with respect
to an Award shall be deferred, either automatically or at the election of the Participant
(including the power to add deemed earnings to any such deferral); to grant
Awards (other than Incentive Stock Options) that are transferable by the Participant;
and to determine the effect, if any, of a Change in Control of the Company upon
outstanding Awards.  Upon a Change in
Control, the Committee may, at its discretion, (i) fully vest all Awards
made under the Plan, (ii) cancel any outstanding Awards in exchange for a
cash payment of an amount equal to the difference between the then Fair Market
Value of the stock underlying the Award and the option or base price of the
Award, (iii) after having given the Award Participant a chance to exercise
any outstanding Options, terminate any or all of the Award Participant’s
unexercised Options, or (iv) if the Company is not the surviving
corporation, cause the surviving corporation to assume or replace all
outstanding Awards with comparable awards.

 

C.            The Committee shall have the
power to adopt regulations for carrying out the Plan and to make changes in
such regulations as it shall, from time to time, deem advisable.  The Committee shall endeavor, in good faith,
to avoid the application of section 409A of the Code to any Award by
taking such action, including suspending the operation of any provision of this
Plan or any Award, as it reasonably determines to be necessary or appropriate
to that result.  No such action shall be
deemed to be an amendment adverse to the Participant within the meaning of Section XII.F.  Any interpretation by the Committee of the
terms and provisions of the Plan and the administration thereof, and all action
taken by the Committee, shall be final and binding on Participants.

 

D.            The Committee may condition the
grant of any Award or the lapse of any Deferral or Restriction Period (or any
combination thereof) upon the

 

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Participant’s achievement of a Performance Goal that is established by
the Committee before the grant of the Award. 
For this purpose, a “Performance Goal” shall mean a goal that must be
met by the end of a period specified by the Committee (but that is
substantially uncertain to be met before the grant of the Award) based upon: (i) the
price of Common Stock, (ii) the market share of the Company, its
Subsidiaries or Affiliates (or any business unit thereof), (iii) sales by
the Company, its Subsidiaries or Affiliates (or any business unit thereof), (iv) earnings
per share of Common Stock, (v) return on shareholder equity of the
Company, (vi) costs of the Company, its Subsidiaries or Affiliates (or any
business unit thereof), (vii) cash flow of the Company, its Subsidiaries
or Affiliates (or any business unit thereof), (viii) return on total
assets of the Company, its Subsidiaries or Affiliates (or any business unit
thereof), (ix) return on invested capital of the Company, its Subsidiaries
or Affiliates (or any business unit thereof), (x) return on net assets of the
Company, its Subsidiaries or Affiliates (or any business unit thereof), (xi)
operating income of the Company, its Subsidiaries or Affiliates (or any
business unit thereof) including, without limitation, EBITDA, or (xii) net
income of the Company, its Subsidiaries or Affiliates (or any business unit thereof).  The Committee shall have discretion to
determine the specific targets with respect to each of these categories of
Performance Goals.  Before granting an
Award or permitting the lapse of any Deferral or Restriction Period subject to
this Section, the Committee shall certify that an individual has satisfied the
applicable Performance Goal.

 

V.            Shares
of Stock Subject to the Plan

 

A.            Subject to adjustment as
provided in Section IX, the total number of shares of Common Stock
available for Awards under the Plan shall be the number of shares equal to
twelve percent (12%) of the total number of shares of the Company’s Common
Stock outstanding after the consummation of the Company’s Initial Public
Offering, including after the exercise, if any, of the underwriters’ option to
cover over-allotments.  The final number
of shares of Common Stock available for Awards under the Plan shall be
determined by resolution of the Committee or the Board subsequent to the
consummation of the Company’s Initial Public Offering.

 

B.            The maximum number of shares of
Company Stock subject to Awards that may be granted to any Employee during any
calendar year (the “Individual Limit”) shall not exceed 20% of the number of
shares initially available for Awards under Section V.A.  Subject to Section V.C, Section IX and
Section XII.F, any Award that is canceled or amended by the Committee
shall count against the Individual

 

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Limit.  Notwithstanding the
foregoing, the Individual Limit may be adjusted to reflect the effect on Awards
of any transaction or event described in Section IX.

 

C.            Any shares issued by the Company
through the assumption or substitution of outstanding grants from an acquired
company shall not (i) reduce the shares available for Awards under the
Plan, or (ii) be counted against the Individual Limit.  Any shares issued hereunder may consist, in
whole or in part, of authorized and unissued shares or treasury shares.  If any shares subject to any Award granted
hereunder are forfeited or such Award otherwise terminates without the issuance
of such shares or the payment of other consideration in lieu of such shares,
the shares subject to such Award, to the extent of any such forfeiture or
termination, shall again be available for Awards under the Plan.

 

VI.           Deferred Stock

 

An
Award of Deferred Stock is an agreement by the Company to deliver to the
recipient a specified number of shares of Company Stock at the end of a
specified deferral period or periods. 
Such an Award shall be subject to the following terms and conditions:

 

A.            Deferred Stock Awards shall be
evidenced by Deferred Stock agreements. 
Such agreements shall conform to the requirements of the Plan and may
contain such other provisions as the Committee shall deem advisable.

 

B.            Upon determination of the number
of shares of Deferred Stock to be awarded to a Participant, the Committee shall
direct that the same be credited to the Participant’s account on the books of
the Company but that issuance and delivery of the same shall be deferred until
the date or dates provided in Section VI.E hereof.  Prior to issuance and delivery hereunder the Participant
shall have no rights as an stockholder with respect to any shares of Deferred Stock
credited to the Participant’s account.

 

C.            No dividends shall be paid with
respect to Deferred Stock.  In lieu
thereof, at the end of the Deferral Period the Participant will be credited
with that number of additional whole shares of Company Stock that can be
purchased (based on their Fair Market Value at the end of the Deferral Period)
with the sum of the dividends that would have been paid with respect to an
equal number of shares of Company Stock between the grant date of such Deferred
Stock and the end of the Deferral Period.

 

D.            The Committee may condition the
grant of an Award of Deferred Stock or the expiration of the Deferral Period
upon the Employee’s achievement of one or

 

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more Performance Goals specified in the Deferred Stock agreement.  If the Employee fails to achieve the
specified Performance Goals, the Committee shall not grant the Deferred Stock
Award to the Employee, or the Participant shall forfeit the Award and no
Company Stock shall be transferred to him pursuant to the Deferred Stock Award.

 

E.             The Deferred Stock agreement
shall specify the duration of the Deferral Period taking into account
termination of employment on account of death, Disability, Retirement or other
cause.  The Deferral Period may consist
of one or more installments.  At the end
of the Deferral Period or any installment thereof the shares of Deferred Stock
applicable to such installment credited to the account of a Participant shall
be issued and delivered to the Participant (or, where appropriate, the Participant’s
legal representative) in accordance with the terms of the Deferred Stock
agreement.  The Committee may, in its
sole discretion, amend a Deferred Stock Award pursuant to Section IV.C
hereof.

 

VII.         Restricted Stock

 

An
Award of Restricted Stock is a grant by the Company of a specified number of
shares of Company Stock to the Employee, which shares are subject to forfeiture
upon the happening of specified events. 
Such an Award shall be subject to the following terms and conditions:

 

A.            Restricted Stock shall be
evidenced by Restricted Stock agreements. 
Such agreements shall conform to the requirements of the Plan and may
contain such other provisions as the Committee shall deem advisable.

 

B.            Upon determination of the number
of shares of Restricted Stock to be granted to the Participant, the Committee
shall direct that a certificate or certificates representing the number of
shares of Company Stock be issued to the Participant with the Participant
designated as the registered owner.  The
certificates representing such shares shall be legended as to sale, transfer,
assignment, pledge or other encumbrances during the Restriction Period and
deposited by the Participant, together with a stock power endorsed in blank,
with the Company, to be held in escrow during the Restriction Period.

 

C.            During the Restriction Period
the Participant shall have the right to receive dividends from and to vote the
shares of Restricted Stock.

 

D.            The Committee may condition the
grant of an Award of Restricted Stock or the expiration of the Restriction
Period upon the Employee’s achievement of one or more Performance Goals
specified in the Restricted Stock Agreement. 
If

 

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the Employee fails to achieve the specified Performance Goals, the
Committee shall not grant the Restricted Stock to the Employee, or the Participant
shall forfeit the Award of Restricted Stock and the underlying Company Stock
shall be forfeited to the Company.

 

E.             The Restricted Stock agreement
shall specify the duration of the Restriction Period and the performance,
employment or other conditions (including termination of employment on account
of death, Disability, Retirement or other cause) under which the Restricted Stock
may be forfeited to the Company.  At the
end of the Restriction Period the restrictions imposed hereunder shall lapse
with respect to the number of shares of Restricted Stock as determined by the
Committee, and the legend shall be removed and such number of shares delivered
to the Participant (or, where appropriate, the Participant’s legal
representative).  The Committee may, in
its sole discretion, amend a Restricted Stock Award pursuant to Section IV.C
hereof.

 

VIII.        Options

 

Options
give an Employee the right to purchase a specified number of shares of Company Stock
from the Company for a specified time period at a fixed price. Options may be
either Incentive Stock Options or Non-Qualified Stock Options.  The grant of Options shall be subject to the
following terms and conditions:

 

A.            Option Grants:  Options shall be evidenced by Option
agreements.  Such agreements shall
conform to the requirements of the Plan, and may contain such other provisions
as the Committee shall deem advisable.

 

B.            Option Price:  The price per share at which Company Stock
may be purchased upon exercise of an Option shall be determined by the
Committee, but shall be not less than the Fair Market Value of a share of
Company Stock on the date of grant.  In
the case of any Incentive Stock Option granted to a Ten Percent Stockholder,
the option price per share shall not be less than 110% of the Fair Market Value
of a share of Company Stock on the date of grant.

 

C.            Term of Options:  The Option agreements shall specify when an
Option may be exercisable and the terms and conditions applicable thereto.  The term of an Option shall in no event be
greater than ten years (five years in the case of an Incentive Stock Option
granted to a Ten Percent Stockholder and ten years in the case of all other
Incentive Stock Options).

 

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D.            Incentive Stock Options:  Each provision of the Plan and each Option
agreement relating to an Incentive Stock Option shall be construed so that each
Incentive Stock Option shall be an incentive stock option as defined in section 422
of the Code, and any provisions of the Option agreement thereof that cannot be
so construed shall be disregarded.  In no
event may a Participant be granted an Incentive Stock Option which does not
comply with such grant and vesting limitations as may be prescribed by section 422(b) of
the Code.  Incentive Stock Options may
not be granted to employees of Affiliates.

 

E.             Restrictions on
Transferability:  No Incentive Stock
Option shall be transferable otherwise than by will or the laws of descent and
distribution and, during the lifetime of the Participant, shall be exercisable
only by the Participant.  Upon the death
of a Participant, the person to whom the rights have passed by will or by the
laws of descent and distribution may exercise an Incentive Stock Option only in
accordance with this Section VIII.

 

F.             Payment of Option Price:  The option price of the shares of Company Stock
upon the exercise of an Option shall be paid: (i) in full in cash at the
time of the exercise or, (ii) with the consent of the Committee, in whole
or in part in Company Stock held by the Participant for at least six months
valued at Fair Market Value on the date of exercise.  With the consent of the Committee, payment
upon the exercise of a Non-Qualified Option may be made in whole or in part by
Restricted Stock which has been held by the Participant for at least six months
(based on the fair market value of the Restricted Stock on the date the Option
is exercised, as determined by the Committee). 
In such case the Company Stock to which the Option relates shall be
subject to the same forfeiture restrictions originally imposed on the
Restricted Stock exchanged therefor.

 

G.            Termination by Death:  If a Participant’s employment by the Company,
a Subsidiary or Affiliate terminates by reason of death, any Option granted to
such Participant may thereafter be exercised (to the extent such Option was
exercisable at the time of death or on such accelerated basis as the Committee
may determine at or after grant) by, where appropriate, the Participant’s
transferee or by the Participant’s legal representative, for a period of 12
months from the date of death or until the expiration of the stated term of the
Option, whichever period is shorter.

 

H.            Termination by Reason of
Disability:  If a Participant’s
employment by the Company, a Subsidiary or Affiliate terminates by reason of
Disability, any unexercised Option granted to the Participant may thereafter be
exercised by the Participant (or, where appropriate, the Participant’s
transferee or legal representative), to the extent it was exercisable at the
time of termination, for a

 

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period of 24 months or such shorter term as determined by the Committee
(12 months in the case of an Incentive Stock Option) from the date of such
termination of employment or until the expiration of the stated term of the
Option, whichever period is shorter.

 

I.              Termination by Reason of Retirement:  If a Participant’s employment by the Company,
a Subsidiary or Affiliate terminates by reason of Retirement, any unexercised
Option granted to the Participant may thereafter be exercised by the Participant
(or, where appropriate, the Participant’s transferee or legal representative),
to the extent it was exercisable at the time of termination, for a period of 5
years or such shorter term as determined by the Committee (12 months in the
case of an Incentive Stock Option) from the date of such termination of
employment or until the expiration of the stated term of the Option, whichever
period is shorter.  Notwithstanding the
foregoing, if, and to the extent, required by section 409A of the Code in
the case of a Specified Employee, as defined in section 409A(a)(2)(B) of
the Code, any unexercised Option shall not be exercised earlier than six months
after the date of retirement.

 

J.             Termination Not for Cause:  If a Participant’s employment by the Company,
a Subsidiary or Affiliate is terminated by the Company, the Subsidiary or
Affiliate not for Cause, any unexercised Option granted to the Participant may
thereafter be exercised by the Participant (or, where appropriate, the Participant’s
transferee or legal representative), to the extent it was exercisable at the
time of termination, for a period of 60 days or such shorter term as determined
by the Committee from the date of such termination of employment or until the
expiration of the stated term of the Option, whichever period is shorter.  Notwithstanding the foregoing, and to the
extent required by section 409A of the Code in the case of a Specified
Employee, as defined in section 409A(a)(2)(B) of the Code, any
unexercised Option shall not be exercised earlier than six months after the
date of termination not for cause.

 

K.            Termination for Cause or Other
Reason:  If a Participant’s employment
with the Company, a Subsidiary or Affiliate is terminated by the Company, the
Subsidiary or Affiliate for Cause, or otherwise terminates for any reason not
specified in this Section VIII (including a voluntary termination), all
unexercised Options awarded to the Participant shall terminate on the date of
such termination.

 

IX.           Adjustments
upon Changes in Capitalization

 

 In the event of a reorganization,
recapitalization, stock split, spin-off, split-off, split-up, stock dividend,
issuance of stock rights, combination of shares,

 

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merger,
consolidation or any other change in the corporate structure of the Company
affecting Company Stock, or any distribution to stockholders other than a cash
dividend, the Board shall make appropriate adjustment in the number and kind of
shares authorized by the Plan and any other adjustments to outstanding Awards
as it determines appropriate.  No fractional
shares of Company Stock shall be issued pursuant to such an adjustment. The
Fair Market Value of any fractional shares resulting from adjustments pursuant
to this Section shall, where appropriate, be paid in cash to the Participant.

 

X.            Effective
Date, Termination and Amendment

 

Subject
to stockholder approval, the Plan shall become effective on the date the
Company’s common stock is first listed on a national securities exchange or the
Nasdaq Stock Market.  Options granted
under the Plan prior to such stockholder approval shall expressly not be
exercisable prior to such approval.  The
Plan shall remain in full force and effect until the earlier of ten years from
the effective date, or the date it is terminated by the Board.  The Board shall have the power to amend,
suspend or terminate the Plan at any time, provided that no such amendment
shall be made without stockholder approval which shall (i) increase
(except as provided in Section IX) the total number of shares available
for issuance pursuant to the Plan; (ii) change the class of employees
eligible to be Participants; (iii) modify the Individual Limit (except as
provided Section IX) or the categories of Performance Goals set forth in Section IV.D;
or (iv) change the provisions of this Section X.  Termination of the Plan pursuant to this Section X
shall not affect Awards outstanding under the Plan at the time of termination.

 

XI.           Transferability

 

Except
as provided below, Awards may not be pledged, assigned or transferred for any
reason during the Participant’s lifetime, and any attempt to do so shall be
void and the relevant Award shall be forfeited. 
The Committee may grant Awards (except Incentive Stock Options) that are
transferable by the Participant during his lifetime, but such Awards shall be
transferable only to the extent specifically provided in the agreement entered
into with the Participant.  The
transferee of the Participant shall, in all cases, be subject to the provisions
of the agreement between the Company and the Participant.

 

XII.         General
Provisions

 

A.            Nothing contained in the Plan,
or any Award granted pursuant to the Plan, shall confer upon any Employee any
right to continued employment by the

 

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Company, a Subsidiary or Affiliate, nor interfere in any way with the
right of the Company, a Subsidiary or Affiliate to terminate the employment of
any Employee at any time.

 

B.            For purposes of this Plan,
transfer of employment between the company and its Subsidiaries and Affiliates
shall not be deemed termination of employment.

 

C.            Participants shall be
responsible to make appropriate provision for all taxes required to be withheld
in connection with any Award, the exercise thereof and the transfer of shares
of Company Stock pursuant to this Plan. 
Such responsibility shall extend to all applicable Federal, state, local
or foreign withholding taxes.  In the
case of the payment of Awards in the form of Company Stock, or the exercise of
Options, the Company shall, at the election of the Participant, have the right
to retain the number of shares of Company Stock whose Fair Market Value equals
the amount legally required to be withheld in satisfaction of the applicable
withholding taxes.  Agreements evidencing
such Awards shall contain appropriate provisions to effect withholding in this
manner.

 

D.            Without amending the Plan,
Awards may be granted to Employees who are foreign nationals or employed
outside the United States or both, on such terms and conditions different from
those specified in the Plan as may, in the judgment of the committee, be
necessary or desirable to further the purpose of the Plan.

 

E.             To the extent that Federal laws
(such as the 1934 Act, the Code or the Employee Retirement Income Security Act
of 1974) do not otherwise control, the Plan and all determinations made and
actions taken pursuant hereto shall be governed by the law of Delaware and
construed accordingly.

 

F.             The Committee may amend any
outstanding Awards to the extent it deems appropriate; provided, however,
except as provided in Section IX, no Award may be repriced, replaced,
regranted through cancellation, or modified without stockholder approval.  The Committee may amend Awards without the
consent of the Participant, except in the case of amendments adverse to the Participant,
in which case the Participant’s consent is required to any such amendment.

 

13Exhibit 10.36

[H&E EQUIPMENT SERVICES, INC. LETTERHEAD]

[Date]

[Optionee Name]

[Optionee
Address]

Dear
[Optionee Name]:

Pursuant
to the H&E Equipment Services, Inc. 2006 Stock-Based Incentive Compensation
Plan (the “Plan”), H&E Equipment Services, Inc. (the “Company”) hereby
grants to you non-qualified stock options (hereinafter either the “Award” or
the “Option”) to purchase [______] shares of the Company’s common stock, par
value $0.01, (the “Option Shares”) at a price of $[_______] per share.

This
Award is subject to the applicable terms and conditions of the Plan, which are
incorporated herein by reference, and in the event of any contradiction,
distinction or difference between this letter and the terms of the Plan, the
terms of the Plan will control.  Unless
otherwise stated, all capitalized terms used herein have the meanings set forth
in the Plan.  By accepting this Award you
(i) acknowledge that you have received and read a copy of the Plan and
understand its terms and (ii) acknowledge that with respect to this Award and
the Option Shares, you are bound by the terms of the Plan.

This
Award shall be exercisable in accordance with the following schedule:

[____________________]

[____________________]

[____________________]

Subject
to your continued service as an employee through such date, the Award, to the
extent not previously exercised, will remain exercisable until the expiration
date of [____________, ________] (i.e., the 10th Anniversary of the date of the
Award), at which time it will expire.

If
you cease to be employed by the Company before [________] (10th
Anniversary of the date of the Award):

1.             If your termination of employment
is by reason of your death, your personal representative may exercise the
unexercised portion of this Award for a period of 12 months following your date
of death, or until the Award otherwise expires, whichever period is shorter.

2.             If your termination of employment
is by reason of your disability, you or your legal  representative may exercise the unexercised
portion of this Award for a period of 24 months following the date of your
disability, or until the Award otherwise expires, whichever period is shorter.

3.             If your termination of employment
is by reason of your retirement, you or your legal representative (for example
in the event that you retire and then die while the Award 

 

 

remains
exercisable) may exercise the unexercised portion of this Award for a period of
5 years following your retirement, or until the Award otherwise expires,
whichever period is shorter.

4.             If your employment is terminated by
the Company without Cause, you may exercise the unexercised portion of this
Award for 60 days following your termination date, or until the Award otherwise
expires, whichever period is shorter.

5.             If your employment is terminated by
the Company for Cause, this Award shall be immediately forfeited and no portion
of the Award shall be exercisable.

You
must give written notice of any exercise of this Award to the Company’s Chief
Financial Officer accompanied by payment of the exercise price thereof as
provided in the Plan (plus any required payment in respect of taxes legally
required to be withheld).  The date of
exercise will be the date the Company receives payment for the shares and
appropriate arrangements have been made concerning withholding of any taxes
that may be due with respect to such shares. 
As promptly thereafter as possible, the Company will issue a certificate
for the shares purchased.

The
construction and interpretation of any provision of this Award or the Plan
shall be final and conclusive when made by the Committee.

Nothing
in this letter shall confer on you the right to continue in the service of the
Company or interfere in any way with the right of the Company to terminate your
service at any time.

You
should sign and return a copy of this agreement to the Chief Financial Officer
indicating your agreement to the terms of this letter and the Award granted
hereby.  This acknowledgement must be
returned within fifteen (15) days; otherwise, the Award will lapse and become
null and void.  Your signature will also
acknowledge that you have received and reviewed the Plan and that you agree to
abide by the applicable terms of these documents as provided herein.

Very truly yours,

	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Enclosures

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The
  undersigned hereby agrees to the foregoing:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [Optionee
  Name]

  	
   

  	
  Date

  
						

 

 

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