Item 9A. Controls and Procedures
ITEM 9A. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures. The Company’s management under the supervision and with the participation of the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) is responsible for establishing and maintaining “disclosure controls and procedures” (as defined in rules promulgated under the Securities Exchange Act of 1934, as amended) for the Company. Based on their evaluation the CEO and CFO have concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2024.
Changes in Internal Control over Financial Reporting. During the last quarter of the Company’s fiscal year ended December 31, 2024, there were no changes in the Company’s internal control that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Limitations on the Effectiveness of Controls. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected. The Company’s disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives, and the CEO and CFO have concluded that these controls and procedures are effective at the “reasonable assurance” level.
Management’s Assessment of Internal Control. Management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024, is discussed in the Management’s Report on Internal Control Over Financial Reporting included on page 55.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2024 has been audited by Grant Thornton LLP, the Company’s independent registered public accounting firm, and its report is included in this Annual Report on Form 10-K.
ITEM 9B. OTHER INFORMATION.
(a) Amended and Restated Bylaw s. On February 14, 2025, the Company’s Board of Directors approved the Company’s Amended and Restated Bylaws to clarify (i) the procedure for the right of shareholders to call special meetings, (ii) information to be provided by shareholders who submit proposals at the Company’s annual or special meetings, and (iii) streamlined various records and information available to shareholders and directors. The above description of the changes to the Company’s Amended and Restated Bylaws is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to such bylaws filed herewith as an exhibit to this annual report.
McGrath RentCorp Involuntary Termination Severance Plan for Officers. On February 14, 2025, the Company’s Board of Directors approved the Company’s McGrath RentCorp Involuntary Termination Severance Plan for Officers which sets forth the benefits and obligations of the participants to the plan upon a change in control of the Company or involuntary termination of employment of such participants. This plan also superseded the Company’s McGrath RentCorp Change in Control Severance Plan applicable to the Chief Executive Officer and Chief Financial Officer of the Company. The description of the changes to the Company’s McGrath RentCorp Involuntary Termination Severance Plan for Officers is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to such plan filed herewith as an exhibit to this annual report.
(b) During the three months ended December 31, 2024, none of our directors or officers adopted , modified or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” as such terms are defined under Item 408 of Regulation S-K.
During the three months ended December 31, 2024, the Company did not adopt , modify or terminate a “Rule 10b5-1 trading arrangement” as such term is defined under Item 408 of Regulation S-K.
McGrath RentCorp 2025 Officer Cash Bonus Plan. On February 14, 2025, the Company’s Board of Directors approved the McGrath RentCorp Involuntary Termination Severance Plan for Officers which sets forth the benefits and obligations of the participants to the plan upon a change in control of the Company, involuntary termination of employment of such participants, or upon retirement, death or disability. The description of the changes to the Company’s McGrath RentCorp 2025 Officer Cash Bonus Plan is a summary
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and does not purport to be complete. It is subject to and qualified in its entirety by reference to such plan filed herewith as an exhibit to this annual report.
McGrath RentCorp 2016 Stock Incentive Plan, Notice of Restricted Stock Unit Award. On February 14, 2025, the Company’s Board of Directors approved amendments to the McGrath RentCorp 2016 Stock Incentive Plan, Notice of Restricted Stock Unit Award for non-employee directors which sets forth the benefits and obligations of the participants to the plan in the event of the participant’s death or disability. The description of the changes to the McGrath RentCorp 2016 Stock Incentive Plan, Notice of Restricted Stock Unit Award for Officers is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to such plan filed herewith as an exhibit to this annual report.
McGrath RentCorp 2016 Stock Incentive Plan Notice of Restricted Stock Unit Award. On February 14, 2025, the Company’s Board of Directors approved the amendments to the McGrath RentCorp 2016 Stock Incentive Plan, Notice of Restricted Stock Unit Award, for employees which sets forth the benefits and obligations of the participants to the plan upon a change in control of the Company, involuntary termination of employment of such participants, or upon retirement, death or disability. The description of the changes to the McGrath RentCorp 2016 Stock Incentive Plan, Notice of Restricted Stock Unit Award for Officers is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to such plan filed herewith as an exhibit to this annual report.. In the event of retirement, starting with the 2025 awards, directors will receive accelerated full vesting of RSUs rather than pro rata vesting.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
The information required by this Item will either be incorporated herein by reference to the Company’s Definitive Proxy Statement to be filed pursuant to Regulation 14A of the Exchange Act for its 2024 Annual or Special Meeting of Shareholders or included in an amendment to this Report, which, in either case, will be filed no later than 120 days after December 31, 2024.
ITEM 11. EXECUTIVE COMPENSATION.
The information required by this Item will either be incorporated herein by reference to the Company’s Definitive Proxy Statement to be filed pursuant to Regulation 14A of the Exchange Act for its 2024 Annual or Special Meeting of Shareholders or included in an amendment to this Report, which, in either case, will be filed no later than 120 days after December 31, 2024.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The information required by this Item will either be incorporated herein by reference to the Company’s Definitive Proxy Statement to be filed pursuant to Regulation 14A of the Exchange Act for its 2024 Annual or Special Meeting of Shareholders or included in an amendment to this Report, which, in either case, will be filed no later than 120 days after December 31, 2024.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.
The information required by this Item will either be incorporated herein by reference to the Company’s Definitive Proxy Statement to be filed pursuant to Regulation 14A of the Exchange Act for its 2024 Annual or Special Meeting of Shareholders or included in an amendment to this Report, which, in either case, will be filed no later than 120 days after December 31, 2024.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
The information required by this Item will either be incorporated herein by reference to the Company’s Definitive Proxy Statement to be filed pursuant to Regulation 14A of the Exchange Act for its 2024 Annual or Special Meeting of Shareholders or included in an amendment to this Report, which, in either case, will be filed no later than 120 days after December 31, 2024.
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PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
Index of documents filed as part of this report:
1. The following Consolidated Financial Statements of McGrath RentCorp are included in Item 8.
Page of this report
Management’s Report on Internal Control over Financial Reporting
57
Reports of Independent Registered Public Accounting Firm (PCAOB ID: 248)
56
Consolidated Financial Statements
Consolidated Balance Sheets as of December 31, 2024 and 2023
58
Consolidated Statements of Income for the Years Ended December 31, 2024, 2023 and 2022
59
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2024, 2023 and 2022
60
Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2024, 2023 and 2022
61
Consolidated Statements of Cash Flows for the Years Ended December 31, 2024, 2023 and 2022
62
Notes to Consolidated Financial Statements
63
2. Financial Statement Schedules. None
3. Exhibits. See Index of Exhibits on page 95 of this report.
Schedules and exhibits required by Article 5 of Regulation S-X other than those listed are omitted because they are not required, are not applicable, or equivalent information has been included in the consolidated financial statements, and notes thereto, or elsewhere herein.
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Number
Description
Method of Filing
2.1
Equity Purchase Agreement, dated as of February 1, 2023, made by and among McGrath RentCorp, a California corporation, Adler Tank Rentals, LLC, a Delaware limited liability company, and Ironclad Environmental Solutions, Inc., a Delaware corporation.
Filed as exhibit 1.01 to the Company’s Current Report on Form 8-K (filed February 1, 2023), and incorporated herein by reference.
2.2
Stock Purchase Agreement, dated as of February 1, 2023, made by and among Vesta Housing Solutions Investor, LLC, a Delaware limited liability company, Vesta Housing Solutions Holdings, Inc., a Delaware corporation, and McGrath RentCorp, a California corporation.
Filed as exhibit 1.02 to the Company’s Current Report on Form 8-K (filed February 1, 2023), and incorporated herein by reference.
2.3
Agreement and Plan of Merger, dated as of January 28, 2024, by and among WillScot Mobile Mini Holdings Corp., Brunello Merger Sub I, Inc., Brunello Merger Sub II, LLC, and McGrath RentCorp.
Filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K/A (filed January 29, 2024), and incorporated herein by reference.
2.4
Termination Agreement, dated as of September 17, 2024, by and among WillScot Holdings Corporation, Brunello Merger Sub I, Inc., Brunello Merger Sub II, LLC, and McGrath RentCorp.
Filed as exhibit 10.1 to the Company’s Current Report on Form 8-K (filed September 18, 2024), and incorporated herein by reference.
3.1
Articles of Incorporation of McGrath RentCorp. ‘p’
Filed as exhibit 19.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1988 (filed August 14, 1988), and incorporated herein by reference.
3.1.1
Amendment to Articles of Incorporation of McGrath RentCorp. ‘p’
Filed as exhibit 3.1 to the Company’s Registration Statement on Form S-1 (filed March 28, 1991 Registration No. 33-39633), and incorporated herein by reference.
3.1.2
Amendment to Articles of Incorporation of McGrath RentCorp.
Filed as exhibit 3.1.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1997 (filed March 31, 1998), and incorporated herein by reference.
3.2
Amended and Restated Bylaws
Filed herewith.
4.1
Second Amended and Restated Note Purchase and Private Shelf Agreement, dated as of June 8, 2023 (filed as Exhibit 10.1 to Registrant's Current Report on 8-K filed on June 13, 2023, and incorporated herein by reference).
Filed as exhibit 10.1 to the Company’s Current Report on Form 8-K (filed June 13, 2023), and incorporated herein by reference.
4.1.1
Amendment, dated as of March 17, 2014, to the Note Purchase and Private Shelf Agreement dated as of April 21, 2011 among the Company, Prudential Investment Management, Inc., The Prudential Insurance Company of America and Prudential Retirement Insurance and Annuity Company.
Filed as exhibit 10.1 to the Company’s Current Report on Form 8-K (filed March 20, 2014) and incorporated herein by reference.
4.1.2
Amendment, dated as of February 9, 2016, to the Note Purchase and Private Shelf Agreement dated as of April 21, 2011 among the Company, Prudential Investment Management, Inc., The Prudential Insurance Company of America and Prudential Retirement Insurance and Annuity Company, as amended on March 17, 2014.
Filed as exhibit 10.1 to the Company’s Current Report on Form 8-K (filed February 11, 2016) and incorporated herein by reference.
4.2
Second Amended and Restated Credit Agreement, dated as of July 15, 2022, among the Company, Bank of America, N.A. as Administrative Agent, Swing Line Lender and L/C Issuer, and the other lenders party thereto.
Filed as exhibit 10.1 to the Company’s Current Report on Form 8-K (filed July 19, 2022) and incorporated herein by reference.
4.2.1
First Incremental Facility Amendment, dated as of April 23, 2024, to Second Amended and Restated Credit Agreement, dated as of July 15,2022, among the Company, Bank of America, N.A. as Administrative Agent and first incremental lender, and the guarantors named therein.
Filed as exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (filed April 25, 2024) and incorporated herein by reference.
4.2.2
Amended and Restated Guaranty, dated as of July 15, 2022, among certain domestic subsidiaries of the Company in favor of Bank of America, N.A., in its capacity as the Administrative Agent.
Filed as exhibit 10.2 to the Company’s Current Report on Form 8-K (filed July 19, 2022) and incorporated herein by reference.
4.2.3
Amended and Restated Credit Facility Letter Agreement, dated as of August 19, 2022, between the Company and MUFG Union Bank, N.A.
Filed as exhibit 4.3 to the Company’s Quarterly Report on Form 10-Q (filed October 27, 2022) and incorporated herein by reference.
4.2.4
Amended and Restated Credit Line Note, dated as of August 19, 2022, in favor of MUFG Union Bank, N.A.
Filed as exhibit 4.4 to the Company’s Quarterly Report on Form 10-Q (filed October 27, 2022) and incorporated herein by reference.
4.3
Description of Registrant’s Securities.
Filed as exhibit 4.2.4 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (filed February 25, 2020), and incorporated herein by reference.
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Number
Description
Method of Filing
10.1
McGrath RentCorp Employee Stock Ownership Plan, as amended and restated on December 31, 2008.
Filed as exhibit 10.3 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008 (filed February 26, 2009), and incorporated herein by reference.
10.1.1
McGrath RentCorp Employee Stock Ownership Trust Agreement, as amended and restated on December 31, 2008.
Filed as exhibit 10.3.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008 (filed February 26, 2009), and incorporated herein by reference.
10.2
McGrath RentCorp 2007 Stock Incentive Plan.
Filed as exhibit 10.12 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2007 (filed August 2, 2007), and incorporated herein by reference.
10.2.1
Form of 2007 Stock Incentive Plan Stock Option Award and Agreement.
Filed as exhibit 10.12.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2007 (filed August 2, 2007), and incorporated herein by reference.
10.2.2
Form of 2007 Stock Incentive Plan Non-Qualified Stock Option Award and Agreement.
Filed as exhibit 10.12.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2007 (filed August 2, 2007), and incorporated herein by reference.
10.2.3
Form of 2007 Stock Incentive Plan Stock Appreciation Right Award and Agreement.
Filed as exhibit 10.4.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 (filed May 6, 2010), and incorporated herein by reference.
10.2.4
Form of 2007 Stock Incentive Plan Restricted Stock Unit Award and Agreement.
Filed as exhibit 10.4.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 (filed May 6, 2010), and incorporated herein by reference.
10.3
McGrath RentCorp Employee Stock Ownership and 401(k) Plan
Filed as exhibit 4.5 to the Company’s Registration Statement on Form S-8 (filed August 10, 2012) and incorporated herein by reference.
10.4
McGraw RentCorp Involuntary Termination Severance Plan for Office rs
Filed herewith.
10.5
McGrath RentCorp 2016 Stock Incentive Plan
Filed as Appendix A to the Company's Proxy Statement for the 2016 Annual Meeting (filed April 29, 2016), and incorporated herein by reference.
10.5.1
McGrath RentCorp 2024 Officer Cash Bonus Plan (certain portions of this exhibit have been omitted)
Filed herewith.
10.5.2
McGrath RentCorp 2025 Officer Cash Bonus Plan (certain portions of this exhibit have been omitted)
Filed herewith.
10.6
Form of Indemnification Agreement with Directors and Officers
Filed as exhibit 10.6 to the Company's Annual Report on Form 10-K for the year ended December 31, 2024 (filed February 21, 2024), and incorporated herein by reference.
10.6.1
Form of 2016 Stock Incentive Plan Restricted Stock Unit Award and Agreement - Corporate
Filed herewith.
10.6.2
Form of 2016 Stock Incentive Plan Performance-Based Restricted Stock Unit Award and Agreement - Division Management
Filed herewith.
10.6.3
Form of 2016 Stock Incentive Plan Stock Appreciation Right Award and Agreement - Enviroplex
Filed herewith.
10.6.4
Form of 2016 Stock Incentive Plan Notice of Restricted Stock Unit Award
Filed herewith.
19.1
Amended and Restated McGrath RentCorp Insider Trading and Blackout Policy
Filed herewith.
21.1
List of Subsidiaries.
Filed herewith.
23.1
Written Consent of Grant Thornton LLP.
Filed herewith.
31.1
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Filed herewith.
31.2
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Filed herewith.
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Number
Description
Method of Filing
32.1
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Furnished herewith.
32.2
Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Furnished herewith.
97
McGrath RentCorp Compensation Recoupment Policy
Filed as exhibit 97 to the Company's Annual Report on Form 10-K for the year ended December 31, 2023 (filed February 21, 2024), and incorporated herein by reference.
101
The following materials from McGrath RentCorp’s annual Report on Form 10-K for the year ended December 31, 2024, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Consolidated Statement of Income, (ii) the Consolidated Balance Sheet, (iii) the Consolidated Statement of Cash Flows, and (iv) Notes to Consolidated Financial Statements.
104 Cover Page Interactive Data File (embedded within the inline XBRL
document).
= Indicates a management contract or compensatory plan
‘P’ = exhibit was filed in paper form
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: February 19, 2025
M c G rath R ent C orp
by:
/s/ Joseph F. Hanna
JOSEPH F. HANNA
Chief Executive Officer and President
(Principal Executive Officer)
by:
/s/ Keith E. Pratt
KEITH E. PRATT
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
by:
/s/ David M. Whitney
DAVID M. WHITNEY
Senior Vice President and Chief Accounting Officer
(Principal Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons in the capacities and on the dates indicated.
Name
Title
Date
/s/ Nicolas Anderson
Director
February 19, 2025
NICOLAS ANDERSON
/s/ Kimberly A. Box
Director
February 19, 2025
KIMBERLY A. BOX
/s/ Smita Conjeevaram
Director
February 19, 2025
Smita Conjeevaram
/s/ William J. Dawson
Director
February 19, 2025
WILLIAM J. DAWSON
/s/ Joseph F. Hanna
Chief Executive Officer, President and Director
February 19, 2025
JOSEPH F. HANNA
/s/ Bradley M. Shuster
Chairman of the Board
February 19, 2025
BRADLEY M. SHUSTER
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