Exhibit 10.38


 


Employee Stock Option Agreement


 


This
Employee Stock Option Agreement, dated as of [•], 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. 2008 Omnibus Incentive Plan. The meaning
of capitalized terms used in this Agreement may be found in Section 7.


 


NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants contained
herein, the receipt and sufficiency of which are hereby acknowledged, the
parties 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 shares of Common Stock 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 Sections 2(b), 3, or 6(a)of this
Agreement, the Options shall become vested in four equal annual installments on
each of the first through fourth anniversaries of the Grant Date, subject to
the continuous employment of the Employee with the Company until the applicable
vesting date.


 


(b)         Discretionary Acceleration. The Committee, 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 the Options terminate
pursuant to Section 3. The Options may only be exercised with respect to
whole shares of Common Stock 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)               Termination of Employment.


 


(i)            Special Termination. If the Employee’s employment with the Company
terminates due to Special Termination, all unvested Options held by the Employee shall vest and
all the Employee’s Options shall remain
outstanding until the first to occur of: 
(a) the first anniversary of
the Employee’s  termination of
employment, (b) the Normal
Termination Date or (c) the
cancellation or termination of the Options pursuant to Section 6(a), after which any unexercised Options shall
immediately terminate.


 


(ii)           Retirement.


 


(A)      If the Employee’s employment with the Company terminates due to the Employee’s
Retirement and if the Committee in its discretion requests and the Employee
agrees to a release of claims and to be bound by restrictive covenants in such
form and having such terms as the Committee shall determine, then the unvested
Options held by the Employee on the date of his or her Retirement shall remain
outstanding and continue to vest in accordance with all of their respective
terms as if such Employee’s employment had not terminated until the first to
occur of: (a) the third anniversary of
the Employee’s Retirement or, if
the Employee dies prior to the third anniversary of the Employee’s Retirement,
the twelve-month anniversary of the date of the Employee’s death, if earlier, (b) the Normal Termination Date
or (c) the cancellation or
termination of the Options pursuant to Section 6(a), after which any unexercised Options shall
immediately terminate.


 


(B)       If the Employee’s employment with the Company terminates due to the
Employee’s Retirement other than in accordance with Section 3(b)(ii)(A),
the Employee’s Options shall be treated as set forth in Section 3(b)(iv).


 


(iii)          Termination for Cause. If an Employee’s employment terminates for Cause,
all Options, whether vested or unvested, shall be immediately forfeited and
canceled, effective as of the date of the Employee’s termination.


 

















 


(iv)          Termination for Any Other Reason. If the Employee’s employment with the Company
terminates for any reason other than Special Termination, Cause or Retirement
in accordance with Section 3(b)(ii)(A), any unvested Options held by the
Employee shall immediately be forfeited and canceled as of the date of
termination. All vested Options shall remain exercisable until the first to
occur of (a) the 30th day
following the effective date of the Employee’s termination of employment, or,
if later, the 30th day following expiration of any blackout period in effect
with respect to such Options, (b) the
Normal Termination Date or (c) the
cancellation or termination of the Options pursuant to Section 6(a), after
which any unexercised Options shall immediately be forfeited and canceled.


 


Section 4.              Manner of Exercise


 


(a)               General.
Subject to such reasonable administrative regulations as the Committee may
adopt from time to time, the exercise of vested Options by the Employee shall
be pursuant to procedures established by the Company from time to time and
shall include the Employee 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”), or such other or different requirements as may be specified by the
Company. Unless otherwise determined by the Committee, (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
(if applicable) any required withholding taxes or other similar taxes, charges
or fees, or, pursuant to a broker-assisted exercise program established by the
Company, the Employee may exercise vested Options by an exercise and sell
procedure (cashless exercise) in which the 
Exercise Price (together with any required withholding taxes or other
similar taxes, charges or fees) is deducted from the proceeds of the exercise
of an Option 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 or (ii) 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, (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.              Adjustment Event. In the event of any Adjustment Event affecting the Common Stock, the
Committee shall make an equitable and proportionate anti-dilution adjustment to
offset any resultant change in the pre-share price of the Common Stock and
preserve the intrinsic value of Options and any other Awards granted under the
Plan. Such mandatory adjustment may include a change in any or all of (a) the
number and kind of shares of Common Stock which thereafter may be awarded or
optioned and sold under the Plan (including, but not limited to, adjusting any
limits on the number and types of Awards that may be made under the Plan), (b) the
number and kind of shares of Common Stock subject to outstanding Awards, and (c) the
grant, exercise or conversion price with respect to any Award. In addition, the
Committee may make provisions for a cash payment to a Participant or a person
who has an outstanding Award. The number of shares of Common Stock subject to
any Award shall be rounded to the nearest whole number. Any such adjustment
shall be consistent with sections 424, 409A and 162(m) of the Code to the
extent the Awards subject to adjustment are subject to such sections of the
Code.


 


Section 6.              Change in Control


 


(a)               In General. In the event of a Change in Control, any unvested
Options shall vest and become exercisable, provided that the Committee (as
constituted immediately prior to the Change in Control) may determine that 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)               Termination. Notwithstanding Section 6(a), in the event of a Change in Control, the
Committee may, in its discretion, terminate any outstanding Options if either (i) the
Company provides holders of such Options with reasonable advance notice to
exercise their outstanding and unexercised Options, or (ii) the
Committee reasonably determines that the 


 

















 


Change
in Control Price is equal to or less than the exercise price for such Options.


 


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.


 


 “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).


 


“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.


 


“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).


 


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


 


“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 of Common Stock covered by the
Options until the exercise of the Options and delivery of the Common Stock. No
adjustment shall be made for dividends or other rights for which the record
date is prior to the delivery of the Common Stock.


 


(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:


 


(C)   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


 


(D)          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.


 


(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 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.


 

















 


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:

  	
   

  



 


 


	
  Total Number of shares

  of Common Stock

  for the Purchase of

  Which Options have

  been Granted

  	
   

  	
  Option Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  «Options» Shares

  	
   

  	
  $