Exhibit 10.3


 


Employee Stock Option Agreement


 


This Employee Stock Option Agreement, dated as of                ,
2006, between Hertz Global Holdings, Inc., a Delaware corporation, and the
Employee whose name appears on the signature page hereof, is being entered into
pursuant to the Hertz Global Holdings, Inc. Stock Incentive Plan. The meaning
of capitalized terms may be found in Section 7.


 


The Company and the Employee hereby agree as follows:


 


Section 1.              Grant of Options


 


(a)                 Confirmation
of Grant. The Company hereby evidences and confirms, effective as of the
date hereof, its grant to the Employee of Options to purchase the number of
Common Shares specified on the signature page hereof. The Options are not
intended to be incentive stock options under the Code. This Agreement is
entered into pursuant to, and the terms of the Options are subject to, the
terms of the Plan. If there is any inconsistency between this Agreement and the
terms of the Plan, the terms of the Plan shall govern.


 


(b)                Option Price.
Each share covered by an Option shall have the Option Price specified on the
signature page hereof.


 


Section 2.              Vesting and Exercisability


 


(a)                 Except as
otherwise provided in Section 6(a) or Section 2(b) of this Agreement, the
Options shall become vested in five equal annual installments on each of the
first through fifth anniversaries of the Grant Date, subject to the continuous
employment of the Employee with the Company until the applicable vesting date; provided
that if the Employee’s employment with the Company is terminated in a Special
Termination (i.e., by reason of the Employee’s death or Disability), any
Options held by the Employee shall immediately vest as of the effective date of
such Special Termination.


 


(b)                Discretionary
Acceleration. The Board, in its sole discretion, may accelerate the vesting
or exercisability of all or a portion of the Options, at any time and from time
to time.


 


(c)                 Exercise. Once
vested in accordance with the provisions of this Agreement, the Options may be
exercised at any


 

















 


time
and from time to time prior to the date such Options terminate pursuant to
Section 3. Options may only be exercised with respect to whole Common Shares
and must be exercised in accordance with Section 4.


 


Section 3.              Termination of Options


 


(a)                 Normal
Termination Date. Unless earlier terminated pursuant to Section 3(b) or
Section 6, the Options shall terminate on the tenth anniversary of the Grant
Date (the “Normal Termination Date”), if not exercised prior to such
date.


 


(b)                Early Termination.
If the Employee’s employment with the Company terminates for any reason, any
Options held by the Employee that have not vested before the effective date of
such termination of employment or that do not become vested on such date in
accordance with Section 2 shall terminate immediately upon such termination of
employment and, if the Employee’s employment is terminated for Cause, all
Options (whether or not then vested or exercisable) shall automatically
terminate immediately upon such termination. All vested Options held by the
Employee following the effective date of a termination of employment (the “Covered
Options”) shall remain exercisable until the first to occur of (i)
the 60th day following the effective date of the Employee’s
termination of employment (the 180th day in the case of a Special Termination
or a retirement from active service on or after the Employee reaches normal
retirement age), (ii) the Normal Termination Date or (iii) the
cancellation of the Options pursuant to Section 6(a), and if not exercised
within such period the Options shall automatically terminate upon the
expiration of such period.


 


Section 4.              Manner of Exercise


 


(a)                 General. Subject
to such reasonable administrative regulations as the Board may adopt from time
to time, the Employee may exercise vested Options by giving at least 15
business days prior written notice to the Secretary of the Company specifying
the proposed date on which the Employee desires to exercise a vested Option
(the “Exercise Date”), the number of whole shares with respect to which
the Options are being exercised (the “Exercise Shares”) and the
aggregate Option Price for such Exercise Shares (the “Exercise Price”); provided
that following a Public Offering notice may be given within such lesser period
as the Board may


 


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permit.
On or before any Exercise Date that occurs prior to a Public Offering, the
Company and the Employee shall enter into an Employee Stock Subscription
Agreement that contains transfer and other restrictions on the Exercise Shares,
a form of which has been provided to the Employee. Unless otherwise determined
by the Board, and subject to such other terms, representations and warranties
as may be provided for in the Employee Stock Subscription Agreement, (i)
on or before the Exercise Date the Employee shall deliver to the Company full
payment for the Exercise Shares in United States dollars in cash, or cash
equivalents satisfactory to the Company, in an amount equal to the Exercise Price
plus any required withholding taxes or other similar taxes, charges or
fees and (ii) the Company shall register the issuance of the Exercise Shares on
its records (or direct such issuance to be registered by the Company’s transfer
agent). The Company may require the Employee to furnish or execute such other
documents as the Company shall reasonably deem necessary (i) to
evidence such exercise, (ii) to determine whether registration is
then required under the Securities Act or other applicable law or (iii) to
comply with or satisfy the requirements of the Securities Act, applicable state
or non-U.S. securities laws or any other law.


 


(b)                Restrictions on
Exercise. Notwithstanding any other provision of this Agreement, the
Options may not be exercised in whole or in part, and no certificates
representing Exercise Shares shall be delivered, (i) (A)
unless all requisite approvals and consents of any governmental authority of
any kind shall have been secured, (B) unless the purchase of the
Exercise Shares shall be exempt from registration under applicable U.S. federal
and state securities laws, and applicable non-U.S. securities laws, or the
Exercise Shares shall have been registered under such laws, and (C) unless
all applicable U.S. federal, state and local and non-U.S. tax withholding
requirements shall have been satisfied or (ii) if such exercise
would result in a violation of the terms or provisions of or a default or an
event of default under, any of the Financing Agreements. The Company shall use
its commercially reasonable efforts to obtain any consents or approvals
referred to in clause (i) (A) of the preceding sentence, but shall otherwise
have no obligations to take any steps to prevent or remove any impediment to
exercise described in such sentence.


 


Section 5.              Employee’s Representations; Investment Intention.
The Employee represents and warrants that the Options have been, and any
Exercise


 


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Shares will be, acquired by the
Employee solely for the Employee’s own account for investment and not with a
view to or for sale in connection with any distribution thereof. The Employee
represents and warrants that the Employee understands that none of the Exercise
Shares may be transferred, sold, pledged, hypothecated or otherwise disposed of
unless the provisions of the related Employee Stock
Subscription Agreement shall have been complied with or have expired.


 


Section 6.              Change in Control


 


(a)                 Vesting and
Cancellation. Except as otherwise provided in this Section 6(a), in the
event of a Change in Control, all then-outstanding Options (whether vested or
unvested) shall be canceled in exchange for a payment having a value equal to
the excess, if any, of (i) the product of the Change in Control Price
multiplied by the aggregate number of shares covered by all such Options
immediately prior to the Change in Control over (ii) the aggregate
Option Price for all such shares, to be paid as soon as reasonably practicable,
but in no event later than 30 days following the Change in Control.


 


(b)                Alternative
Award. Notwithstanding Section 6(a), no cancellation, termination, or
settlement or other payment shall occur with respect to any Option if the Board
reasonably determines prior to the Change in Control that the Employee shall
receive an Alternative Award meeting the requirements of the Plan.


 


(c)                 Limitation of
Benefits. If, whether as a result of accelerated vesting, the grant of an
Alternative Award or otherwise, the Employee would receive any payment, deemed
payment or other benefit as a result of the operation of Section 6(a) or
Section 6(b) that, together with any other payment, deemed payment or other
benefit the Employee may receive under any other plan, program, policy or
arrangement, would constitute an “excess parachute payment” under section 280G
of the Code, then, notwithstanding anything in this Section 6 to the contrary,
the payments, deemed payments or other benefits such Employee would otherwise
receive under Section 6(a) or Section 6(b) shall be reduced to the extent
necessary to eliminate any such excess parachute payment and such Employee
shall have no further rights or claims with respect thereto. If the preceding
sentence would result in a reduction of the payments, deemed payments or other
benefits the Employee would otherwise receive on an after-tax basis by more
than 5%, the Company will use


 


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its
commercially reasonable best efforts to seek the approval of the Company’s
shareholders in the manner provided for in section 280G(b)(5) of the Code and
the regulations thereunder with respect to such reduced payments or other
benefits (if the Company is eligible to do so), so that such payments would not
be treated as “parachute payments” for these purposes (and therefore would
cease to be subject to reduction pursuant to this Section 6(c)).


 


Section 7.              Certain Definitions. As used in this Agreement,
capitalized terms that are not defined herein have the respective meaning given
in the Plan, and the following additional terms shall have the following
meanings:


 


“Agreement” means this Employee Stock Option Agreement, as amended
from time to time in accordance with the terms hereof.


 


“Code” means the United States Internal Revenue Code of 1986, as
amended, and any successor thereto.


 


“Company” means Hertz Global Holdings, Inc., provided that
for purposes of determining the status of Employee’s employment with the “Company,”
such term shall include the Company and its Subsidiaries.


 


“Covered Options” has the meaning given in Section 3(b).


 


“Determination Date” means the effective date of the Employee’s
termination of employment.


 


“Employee” means the grantee of the Options, whose name is set
forth on the signature page of this Agreement; provided that for
purposes of Section 4 and Section 8, following such person’s death “Employee”
shall be deemed to include such person’s beneficiary or estate and following
such Person’s Disability, “Employee” shall be deemed to include such person’s
legal representative.


 


“Employee Stock Subscription Agreement” means a “Stock Subscription
Agreement” as defined in the Plan.


 


“Exercise Date” has the meaning given in Section 4(a).


 


“Exercise Price” has the meaning given in Section 4(a).


 


“Exercise Shares” has the meaning given in Section 4(a).


 


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“Grant Date” means the date hereof, which is the date on which the
Options are granted to the Employee.


 


“Normal Termination Date” has the meaning given in Section 3(a).


 


“Option” means the right granted to the Employee hereunder to
purchase one Common Share for a purchase price equal to the Option Price
subject to the terms of this Agreement and the Plan.


 


“Option Price” means, with respect to each Common Share covered by
an Option, the purchase price specified in Section 1(b) for which the Employee
may purchase such Common Share upon exercise of an Option.


 


“Plan” means the Hertz Global Holdings, Inc. Stock Incentive Plan.


 


“Securities Act” means the United States Securities Act of 1933, as
amended, or any successor statute, and the rules and regulations thereunder
that are in effect at the time, and any reference to a particular section
thereof shall include a reference to the corresponding section, if any, of such
successor statute, and the rules and regulations.


 


“Special Termination” means a termination of the Employee’s
employment as a result of his or her death or Disability.


 


Section 8.              Miscellaneous.


 


(a)                 Withholding.
The Company or one of its Subsidiaries may require the Employee to remit to the
Company an amount in cash sufficient to satisfy any applicable U.S. federal,
state and local and non-U.S. tax withholding or other similar charges or fees
that may arise in connection with the grant, vesting, exercise or purchase of
the Options.


 


(b)                Authorization
to Share Personal Data. The Employee authorizes any Affiliate of the
Company that employs the Employee or that otherwise has or lawfully obtains
personal data relating to the Employee to divulge or transfer such personal
data to the Company or to a third party, in each case in any jurisdiction, if
and to the extent appropriate in connection with this Agreement or the
administration of the Plan.


 


(c)                 No Rights as
Stockholder; No Voting Rights. The Employee shall have no rights as a
stockholder of the Company with respect to any Shares covered by the Options
until the exercise of the


 


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Options
and delivery of the Shares. No adjustment shall be made for dividends or other
rights for which the record date is prior to the delivery of the Shares. Any
Shares delivered in respect of the Options shall be subject to the Employee
Stock Subscription Agreement and the Employee shall have no voting rights with
respect to such Shares until such time as specified in the Employee Stock
Subscription Agreement.


 


(d)                No Right to
Continued Employment. Nothing in this Agreement shall be deemed to confer
on the Employee any right to continue in the employ of the Company or any
Subsidiary, or to interfere with or limit in any way the right of the Company
or any Subsidiary to terminate such employment at any time.


 


(e)                 Non-Transferability
of Options. The Options may be exercised only by the Employee. The Options
are not assignable or transferable, in whole or in part, and they may not,
directly or indirectly, be offered, transferred, sold, pledged, assigned,
alienated, hypothecated or otherwise disposed of or encumbered (including, but
not limited to, by gift, operation of law or otherwise) other than by will or
by the laws of descent and distribution to the estate of the Employee upon the
Employee’s death or with the Company’s consent.


 


(f)                 Notices. All
notices and other communications required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been given if
delivered personally or sent by certified or express mail, return receipt
requested, postage prepaid, or by any recognized international equivalent of
such delivery, to the Company or the Employee, as the case may be, at the
following addresses or to such other address as the Company or the Employee, as
the case may be, shall specify by notice to the other:


 


(i)                 if to the
Company, to it at:


 


Hertz Global Holdings, Inc.

c/o The Hertz Corporation

225 Brae Boulevard

Park Ridge, New Jersey  07656

Attention: General Counsel


 


Fax: (201) 594-3122


 


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(ii)                if to the
Employee, to the Employee at his or her most recent address as shown on the
books and records of the Company or Subsidiary employing the Employee; and


 


copies
of any notice or other communication given under this Agreement shall also be
given to:


 


The Carlyle Group

1001 Pennsylvania Avenue, NW

Suite 220 South

Washington DC 20004-2505

Attention:  Mr. Gregory S. Ledford

Fax:  (202) 347-1818


 


and


 


Clayton, Dubilier & Rice, Inc. 

375 Park Avenue, 18th Floor

New York, New York

Attention: David Wasserman 

Fax: (212) 407-5252


 


and


 


Merrill Lynch Global Private Equity

4 World Financial Center, 23rd Floor

New York, NY 10080

Attention:  Mr. George A. Bitar &
                    Mr. Robert F. End

Fax:  (212) 449-1119


 


and


 


Debevoise & Plimpton LLP

919 Third Avenue 

New York, New York 10022

Attention:  John M. Allen

Fax:  (212) 909-6836


 


All
such notices and communications shall be deemed to have been received on the
date of delivery if delivered personally or on the third business day after the
mailing thereof.


 


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(g)                Binding Effect;
Benefits. This Agreement shall be binding upon and inure to the benefit of
the parties to this Agreement and their respective successors and assigns. Nothing
in this Agreement, express or implied, is intended or shall be construed to
give any person other than the parties to this Agreement or their respective
successors or assigns any legal or equitable right, remedy or claim under or in
respect of any agreement or any provision contained herein.


 


(h)                Waiver;
Amendment.


 


(i)                 Waiver. Any
party hereto or beneficiary hereof may by written notice to the other parties (A) extend
the time for the performance of any of the obligations or other actions of the
other parties under this Agreement, (B) waive compliance with any
of the conditions or covenants of the other parties contained in this Agreement
and (C) waive or modify performance of any of the obligations of
the other parties under this Agreement. Except as provided in the preceding
sentence, no action taken pursuant to this Agreement, including, without
limitation, any investigation by or on behalf of any party or beneficiary,
shall be deemed to constitute a waiver by the party or beneficiary taking such
action of compliance with any representations, warranties, covenants or
agreements contained herein. The waiver by any party hereto or beneficiary
hereof of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any preceding or succeeding breach and no failure by a
party or beneficiary to exercise any right or privilege hereunder shall be
deemed a waiver of such party’s or beneficiary’s rights or privileges hereunder
or shall be deemed a waiver of such party’s or beneficiary’s rights to exercise
the same at any subsequent time or times hereunder.


 


(ii)                Amendment.
This Agreement may not be amended, modified or supplemented orally, but only by
a written instrument executed by the Employee and the Company.


 


(i)                  Assignability. Neither this Agreement nor any
right, remedy, obligation or liability arising hereunder or by reason hereof
shall be assignable by the Company or the Employee without the prior written
consent of the other party.


 


(j)                  Applicable Law. This Agreement shall be
governed by and construed in accordance with the law of the State of Delaware


 


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regardless
of the application of rules of conflict of law that would apply the laws of any
other jurisdiction.


 


(k)                 Section and
Other Headings, etc. The section and other headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.


 


(l)                  Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be deemed to be an original
and all of which together shall constitute one and the same instrument.


 


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IN WITNESS WHEREOF, the Company and the Employee have
executed this Agreement as of the date first above written.


 


	
   

  	
  HERTZ GLOBAL HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE
  EMPLOYEE:

  
	
   

  	
   

  
	
   

  	
  «Name»

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  as Attorney-in-Fact

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address
  of the Employee:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  «Address»

  
	
   

  	
   

  
	
   

  	
   

  
	
  Total Number of Shares

  for the Purchase of

  Which

  Options have been

  Granted

  	
  Option
  Price

  
	
  «Options» Shares

  	
  $«Option
  Price»

  



 


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