Exhibit 10.16


 


 


 


EXECUTIVE INCENTIVE




COMPENSATION
PLAN


 


 


 


THE
HERTZ CORPORATION


JANUARY
2005


 

















 


2005


THE
HERTZ CORPORATION


EXECUTIVE
INCENTIVE COMPENSATION PROGRAM


EFFECTIVE
JANUARY 1, 2005


 


I, the undersigned,
acknowledge the following terms associated with my participation in the 2005 Executive
Incentive Compensation Program:


 


	
  TARGET AWARD: (Performance
  Units)

  	
   

  	
           %
  of my base salary as of December 31 of the Plan year

  
	
   

  	
   

  	
   

  
	
  OBJECTIVES/WEIGHTING:

  	
   

  	
  Pre-Tax Income                     70%

  
	
   

  	
   

  	
  Return on Equity                  30%

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BUSINESS UNIT/WEIGHTING:

  	
   

  	
  The Hertz Corporation
  Results     100%

  



 


 


I further understand that
no other requests or recommendations for payments, written or oral, except
those in strict compliance with the Program, will be considered without
approval, in advance, in writing by the Committee.


 


 


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
  SSN

  	
   

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Print Name

  	
   

  	
  Area No.

  	
   

  	
  Location

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PLEASE RETURN BY:

  	
   

  	
  January 31, 2005

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PLEASE RETURN TO:

  	
   

  	
  E. A. Corcoran

  	
   

  
	
   

  	
   

  	
  SVP, Compensation &
  ER Programs

  	
   

  
	
   

  	
   

  	
  Park Ridge

  	
   

  



 

















 


APPENDIX I


 


2005


AWARD SCALE


THE HERTZ CORPORATION


 


 


	
   

  	
  Total

  Award

  Points

  	
   

  	
  % of

  Target

  Award

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Below
  80

  	
   

  	
   

  	
  0

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  80

  	
   

  	
   

  	
  60

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  85

  	
   

  	
   

  	
  70

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  90

  	
   

  	
   

  	
  80

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  95

  	
   

  	
   

  	
  90

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  100

  	
   

  	
   

  	
  100

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  105

  	
   

  	
   

  	
  115

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  110

  	
   

  	
   

  	
  130

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  115

  	
   

  	
   

  	
  145

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  120

  	
   

  	
   

  	
  160

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  125

  	
   

  	
   

  	
  170

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  130

  	
   

  	
   

  	
  180

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  135

  	
   

  	
   

  	
  190

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  140

  	
   

  	
   

  	
  200

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  145

  	
   

  	
   

  	
  210

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  150

  	
   

  	
   

  	
  220

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  155

  	
   

  	
   

  	
  230

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  160

  	
   

  	
   

  	
  235

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  165

  	
   

  	
   

  	
      242.5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  170

  	
   

  	
   

  	
  250

  	
   

  	
   

  



 


 Award points will be rounded to the nearest
whole number.


 

















 


THE HERTZ CORPORATION


2005
EXECUTIVE INCENTIVE COMPENSATION PROGRAM


 


Purpose


 


The Hertz Corporation’s
Executive Incentive Compensation Program (hereinafter referred to as the EICP)
is intended to reward executives and key managers whose performance can
materially influence the annual growth and profitability of the corporation.


 


Administration


 


The Compensation
Committee of the Board of Directors annually approves the performance
measurement criteria and weighting as appropriate, the Award Payment Scale and
specific target awards for Senior Officers (elected corporate Vice Presidents
& above).


 


The Chief Executive
Officer of The Hertz Corporation (“Hertz”) has been delegated the authority by
the Compensation Committee to establish a management committee to administer
this Program for all participants other than the Senior Officer group as
defined above.


 


As used herein, the term “Committee”
shall mean the Compensation Committee of the Board of Directors or the
management committee described above, as applicable.


 


Participation


 


Participation, which will
be designated by Hertz, is restricted to two employee groups of Hertz and its
operating units:  Executive and Key
Management.


 


Designation as a
participant in the EICP for any year shall not be construed as conferring any
right to continued employment with Hertz or to continued participation in EICP
in any subsequent year.


 


Award Opportunities


 


The Committee will
approve a target incentive award (Performance Unit) opportunity for each
participant, which shall be expressed as a percentage of the participant’s
annual salary at the end of the EICP year (except in the case of pro-rated
awards.)  No participant may receive an
award payment in any year, which exceeds 2.5 times his/her target award
opportunity.


 

















 


Program Provisions


 


Participants will be
measured on either Hertz’ performance results or a combination of Business Unit
and Hertz’ performance results, depending on their area of responsibility.


 


The Business Units will
be established as follows:


 


A.            Domestic Rent A Car Division


B.            Worldwide Rent A Car


C.            Hertz Equipment Rental Corporation


D.            Hertz Claim Management Corporation


E.             Hertz Europe, Ltd.


F.             Americas/Pacific


 


Award Determinations


 


Each year the Senior
Officers of Hertz, subject to the approval of the Compensation Committee of the
Board of Directors, will establish bonus objectives for Hertz and each Business
Unit.


 


At year-end, the Committee will determine the award payments
based on actual operating results versus the established bonus objectives, in
accordance with the Program terms.  The
results and award entitlement for Hertz’ performance and each Business Unit’s
performance stand alone, and the sum of awards generated for each will
determine the final award paid to each participant.


 


When a task amount has been approved as part of the bonus
objective, the bonus objective without the task will be used to determine
awards up to 100% of Target amounts. 
Awards cannot exceed 100% of Target, unless this is accomplished using
the bonus objective including the task amount.


 


General Fund


 


EICP participants may be
eligible for an award from the General Fund. 
The General Fund shall be made up of an amount up to .25% of the actual
pre tax income of The Hertz Corporation.


 


Eligibility for a General
Fund Award is limited to EICP participants who have achieved outstanding
accomplishments under difficult or unusual conditions.


 


Executives who are named
in the proxy statement shall not be eligible in that year for a General Fund
award.


 


Distribution of all, any
or none of the General Fund shall be at the discretion of the Hertz Chief
Executive Officer, subject to the review and approval of the Committee.


 


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Rights to Award Payments


 


To be entitled to EICP
award payments with respect to any year, a participant must have been a full
time employee of Hertz, or any of its operating units, for the entire EICP year,
or for such portion of the year which shall remain following Hertz’s
notification of participation in the EICP with respect for such year.


 


To be eligible for an
award a new participant must have at least 3 months active service in the EICP
during the EICP year.  An exception may
be made for employees who transfer into an eligible EICP position from a
position for which compensation under a different compensation program was
provided.


 


A participant who
retires, dies or becomes disabled during the EICP year or if a participant’s
employment is terminated due to a layoff resulting from a permanent reduction
in force, organization realignment, discontinuance of an operation, sale of an
operation to another company, lack of work or a location closing, prior to the
end of the EICP year, the participant, or his beneficiary or estate, shall
receive a prorated EICP payment at the time of regular award distribution.


 


Participants who resign,
or who are terminated for cause will not be eligible for an award.  As used herein, the term “Cause” shall mean
(a) action by the participant involving willful malfeasance, (b) the
participant’s unreasonable neglect or refusal to perform the duties assigned to
the Participant, (c) the participant being convicted of a felony, (d) the
participant engaging in any activity that is directly or indirectly in
competition with the Hertz or any affiliate or in any activity that is inimical
to the best interests of the Hertz or any affiliate, or (e) the participant’s
violation of Hertz policy covering standards of corporate conduct, provided
that the determination of Cause shall be made by the Committee prior to the
distribution of award payments.


 


Time out on a leave of
absence will not affect the bonus payment unless it is in excess of sixty
days.  The first sixty days of a leave of
absence will be a grace period; time out in excess of sixty days will be
prorated in accordance with EICP provisions.


 


Award Payments


 


All approved EICP Awards
will be paid in full, in cash, after applicable tax withholding, no later than
March 31st of the following year.


 


Deferral of Award Payments


 


With Hertz’ approval,
participants will be offered the opportunity of irrevocably deferring the
receipt of award payments they may earn with respect to any year during which
they are an EICP participant.  Such
elections to defer receipt of award payments, for a particular EICP year, must
be made prior to the commencement of service for that EICP year.  All deferred awards will be reflected on
Hertz’s books as general and unsecured obligations of Hertz, and no trust in
favor of any participant shall be implied. 
Hertz shall determine the terms of the deferral program, including the
appropriate rate of interest, which shall be credited annually to book entry
deferral accounts.


 

















 


Award Limitation


 


A)               The maximum amount
that may be awarded to all participants assigned to a particular business unit,
based upon that business unit’s performance, may not exceed 3% of the pre-tax
income of the business unit.


 


B)                 The maximum amount
that may be awarded to all participants of the Corporation may not exceed the
greater of:


 


 1)   6%
of the pre-tax income of the Corporation or


 


 2)   the
aggregate amount of the business unit awards (subject to the limitation set forth
in Paragraph A above).


 


Amendment, Suspension or
Termination


 


The EICP shall continue
until such time as it shall be amended, suspended or terminated at any time by
the Compensation Committee.


 


 


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