01—Abstract
Summary
Summary of the 8-K filed June 16, 2006. Cited figures are marked; the original filing is the authoritative source.
This 8-K filing from United Rentals, Inc. announces the entry into a definitive material agreement, specifically an employment agreement with Roger E.
Schwed, who has been appointed Executive Vice President and General Counsel. This appointment is significant as it brings experienced legal counsel to the company, with Mr. Schwed having over 20 years of legal expertise, including extensive experience in mergers and acquisitions from prominent law firms and his most recent role as General Counsel for Maxcor Financial Group Inc. The employment agreement outlines a compensation package that includes a base salary of $400,000,a a signing bonus of $35,000, and eligibility for annual cash incentive bonuses starting in 2007.
A notable component of his compensation is the grant of 45,000 Restricted Stock Units (RSUs), with a portion vesting based on time and the remainder contingent on performance metrics like return on invested capital and diluted earnings per share. The filing also details termination, severance, and change-in-control provisions, which are crucial for understanding potential executive compensation scenarios.
02—Key points
Key Highlights
- United Rentals, Inc. appointed Roger E. Schwed as Executive Vice President and General Counsel.
- Mr. Schwed brings over 20 years of legal experience, including significant M&A expertise from top law firms and his prior role as General Counsel at Maxcor Financial Group Inc.
- The employment agreement includes an annual base salary of $400,000.
- Mr. Schwed is eligible for a signing bonus of $35,000.
- A grant of 45,000 Restricted Stock Units (RSUs) was awarded, with a portion subject to time-based vesting and another portion performance-based.
- The agreement specifies severance packages for termination without Cause or resignation for Good Reason, including a significant payout (190% of base salary plus target bonus) and continued COBRA premium payments.
- Vesting acceleration for RSUs is provided in cases of termination without Cause, death, disability, or a Change in Control.
03—Questions
Frequently Asked Questions
Who is Roger E. Schwed and what is his new role at United Rentals?
Roger E. Schwed has been appointed as the new Executive Vice President and General Counsel of United Rentals, Inc. He is a seasoned legal professional with over 20 years of experience, including a background in corporate law, mergers and acquisitions, and most recently served as General Counsel for Maxcor Financial Group Inc.
What is the compensation structure for Mr. Schwed?
Mr. Schwed will receive an annual base salary of $400,000. He is also entitled to a $35,000 signing bonus. For 2006, he is guaranteed a minimum bonus of $200,000, and starting in 2007, he will be eligible for annual cash incentive bonuses under the company's plan, with a target of 90% and a maximum of 125% of his base salary.
What are the details regarding the Restricted Stock Units (RSUs) granted to Mr. Schwed?
Mr. Schwed was granted 45,000 RSUs. A portion of these (35,000) will vest ratably over three years on specific dates. The remaining 10,000 RSUs are performance-based and will vest upon achievement of specified increases in return on invested capital and diluted earnings per share.
What are the severance provisions if Mr. Schwed's employment is terminated by the company without cause?
If United Rentals terminates Mr. Schwed's employment without Cause or if he resigns for Good Reason, the company is obligated to pay him his signing bonus (if not already paid), COBRA premiums for up to 12 months, and severance equal to 190% of his base salary (which includes his base salary plus the target bonus amount). A pro-rated portion of his minimum bonus for 2006 may also be paid if applicable.
04—Continue