Exhibit 10.7


 


CHANGE IN CONTROL SEVERANCE AGREEMENT


 


FOR EXECUTIVE OFFICERS AND CERTAIN NEW KEY EMPLOYEES


 


This
Severance Agreement (this “Agreement”) is made as of
                    
    , 20     by and between Hertz
Global Holdings, Inc., a Delaware corporation, and any successor to the
business and/or assets of the Company that assumes this Agreement (the “Company”),
and
                                (“Executive”).


 


RECITALS


 


WHEREAS
the Compensation Committee of the Board of Directors of the Company (the “Board”)
has approved this severance agreement to provide Executive with certain
benefits upon certain terminations of employment;


 


NOW THEREFORE, the parties hereto agree as follows:


 


1.             Term of Agreement.  This
Agreement shall commence on the date hereof and shall continue in effect
through December 31, 20    ; provided, that the
term of this Agreement shall automatically be extended for one additional year
beyond 20     (and successive one year periods thereafter),
unless, not later than September 30, 20     (for the
additional year ending on December 31, 20    ) or September 30
of each year thereafter (for each subsequent extension), the Company shall have
given notice that it does not wish to extend this Agreement for an additional
year, in which event this Agreement shall continue to be effective until the
end of its then remaining term; provided, however, that,
notwithstanding any such notice by the Company not to extend, if a Change in
Control (as defined in Section 2 below) shall have occurred during the
original or any extended term of this Agreement, this Agreement shall continue
in effect for a period of twenty-four months beyond such Change in
Control.  Notwithstanding the foregoing,
this Agreement shall terminate if Executive ceases to be an employee of the
Company and its subsidiaries for any reason prior to a Change in Control which,
for these purposes, shall include cessation of such employment as a result of
the sale or other disposition of the division, subsidiary or other business unit
by which Executive is employed.


 


2.             Change in Control.  No benefits
shall be payable hereunder unless there shall have been a Change in Control of
the Company.  For purposes of this
Agreement, a “Change in Control” shall mean the first to occur of any of the
following after the date of this Agreement:


 


(A)          the acquisition by any person, entity or “group” (as
defined in Section 13(d) of the Securities Exchange Act of 1934, as
amended), other than 


 

















 


any such acquisition by the Company, any of its
subsidiaries, any employee benefit plan of the Company or any of its
subsidiaries, or any of the Investors (as defined below), of 50% or more of the
combined voting power of the Company’s then outstanding voting securities;


 


(B)                                within any 24-month period, the Incumbent
Directors (as defined below) shall cease to constitute at least a majority of
the Board or the board of directors of any successor to the Company, provided
that any director elected to the Board, or nominated for election, by a
majority of the Incumbent Directors then still in office shall be deemed to be
an Incumbent Director for purposes of this clause (B); or


 


(C)                                the merger or consolidation of the
Company as a result of which persons who were owners of the voting securities
of the Company immediately prior to such merger or consolidation, or any of the
Investors, do not, immediately thereafter, own, directly or indirectly, more
than 50% of the combined voting power entitled to vote generally in the
election of directors of the merged or consolidated company;


 


(D)                               the approval by the Company’s
shareholders of the liquidation or dissolution of the Company other than a
liquidation of the Company into any subsidiary of the Company or a liquidation
a result of which persons who were stockholders of the Company immediately
prior to such liquidation, or any or all of the Investors, own, directly or
indirectly, more than 50% of the combined voting power entitled to vote
generally in the election of directors of the entity that holds substantially
all of the assets of the Company following such event; and


 


(E)                                 the sale, transfer or other disposition
of all or substantially all of the assets of the Company to one or more persons
or entities that are not, immediately prior to such sale, transfer or other
disposition, affiliates of the Company.


 


Notwithstanding
the foregoing, a Change in Control shall not be deemed to occur if the Company
files for bankruptcy, liquidation or reorganization under the United States
Bankruptcy Code.


 


For
purposes of the foregoing definition, the following terms shall have the
following meanings:


 


“Incumbent Director”
means the persons who were members of the Board as of the date of this
Agreement; provided, that a director elected, or nominated for election,
to the Board in connection with a proxy contest after the date of this
Agreement shall not be considered an Incumbent Director.


 


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“Investors” means
collectively (i) the Initial Investors, (ii) TC Group
L.L.C. (which operates under the trade name The Carlyle Group), (iii) Clayton,
Dubilier & Rice, Inc., (iv) Merrill Lynch Global
Partners, Inc., (v) any affiliate of any of the foregoing,
including any investment fund or vehicle managed, sponsored or advised by any
of the foregoing, (vi) any successor in interest to any of the
foregoing.


 


“Initial Investors”
means, collectively, the Carlyle Investors, the CDR Investors and the Merrill
Lynch Investors.


 


“Carlyle Investors”
means, collectively, (i) Carlyle Partners IV, L.P., (ii) CEP
II Participations S.àr.l., (iii) CP IV Co-investment, L.P., and (iv) CEP
II U.S. Investments, L.P.


 


“CDR Investors” means,
collectively, (i) Clayton, Dubilier & Rice Fund VII, L.P.,
(ii) CDR CCMG Co-Investor L.P., and (iii) CD&R
Parallel Fund VII, L.P.


 


“Merrill Lynch Investors”
means, collectively, (i) ML Global Private Equity Fund, L.P., (ii) Merrill
Lynch Ventures L.P. 2001, (iii) CMC-Hertz Partners, L.P., and (iv) ML
Hertz Co-Investor, L.P.


 


3.             Termination Following Change In Control. 
If a Change in Control shall have occurred, Executive shall be entitled
to the benefits provided in Section 4(iv) upon the subsequent
termination of Executive’s employment with the Company and its subsidiaries
during the two year period following such Change in Control (the “Protected
Period”) unless such termination is (A) a result of Executive’s
death, Retirement or Disability (except as provided in Section 3(i) below),
(B) by Executive without Good Reason (as defined in Section 3(iii) below),
or (C) by the Company or any of its subsidiaries for Cause (as
defined in Section 3(ii) below). 
In addition, Executive shall be entitled to the compensation provided
for in Section 4(iv) hereof (and without regard to Section 4(vii) hereof)
payable only upon the occurrence of an event constituting a Section 409A
Change in Control (as if his termination had occurred after the Section 409A
Change in Control) if, after an agreement has been signed which, if
consummated, would result in a Section 409A Change in Control, (x) Executive
is terminated without Cause by the Company and its subsidiaries prior to the Section 409A
Change in Control, and (y) such termination was at the instigation
or request of the party to the agreement evidencing the transaction that will
result in the Section 409A Change in Control or otherwise occurs in
connection with the anticipated Section 409A Change in Control.  “Section 409A Change in Control”
means any event described in Section 2 of this Agreement if such event
also is a “change in control event” within the meaning of the regulations under
Section 409A(a)(2)(A)(v) of the Code determined in accordance with the
uniform methodology and procedures adopted by the Company.


 


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(i)            Disability; Retirement.  For purposes
of this Agreement, “Disability” shall mean permanent and total
disability as such term is defined under Section 22(e)(3) of the
Internal Revenue Code of 1986, as amended (the “Code”), without regard
to whether Executive is subject to the Code. 
Any question as to the existence of Executive’s Disability upon which
Executive and the Company cannot agree shall be determined by a qualified
independent physician selected by Executive (or, if Executive is unable to make
such selection, such selection shall be made by any adult member of Executive’s
immediate family or Executive’s legal representative), and approved by the
Company, said approval not to be unreasonably withheld.  The determination of such physician made in
writing to the Company and to Executive shall be final and conclusive for all
purposes of this Agreement.  For purposes
of this Agreement, “Retirement” and corollary terms shall mean Executive’s
voluntary termination of employment with the Company under any of the Company’s
retirement plans that occurs prior to delivery of a Notice of Termination
pursuant to Section 3(iv) below; provided, that
notwithstanding the foregoing, no Retirement that occurs after any other
termination of employment shall adversely affect, interfere with or otherwise
impair in any way Executive’s right to receive the payments and benefits to
which he is entitled on account of a termination without Cause or with Good
Reason.  Accordingly, and for the
avoidance of doubt, if Executive provides a Notice of Termination for Good
Reason, and otherwise satisfies the conditions for Good Reason pursuant to this
Agreement, and also Retires, such Retirement shall not adversely affect,
interfere with or otherwise impair in any way his right to receive payments and
benefits hereunder.  Conversely, if
Executive terminates his employment on account of Retirement and at such time
is not (x) terminating his employment for Good Reason pursuant to
this Agreement or (y) being terminated by the Company without Cause
pursuant to this Agreement, he shall not be entitled to the payments and
benefits provided in this Agreement.


 


(ii)           Cause.  For purposes
of this Agreement, “Cause” shall mean (i) willful and
continued failure to perform substantially the Executive’s material duties with
the Company (other than any such failure resulting from the Executive’s
incapacity due to physical or mental illness) after a written demand for
substantial performance specifying the manner in which the Executive has not
performed such duties is delivered by the Chief Executive Officer of the
Company to the Executive, (ii) engaging in willful and serious
misconduct that is injurious to the Company or any of its subsidiaries, (iii) one
or more acts of fraud or personal dishonesty resulting in or intended to result
in personal enrichment at the expense of the Company or any of its
subsidiaries, (iv) substantial abusive use of alcohol, drugs or
similar substances that, in the sole judgment of the Company, impairs the
Executive’s job performance, (v) material violation of any material
Company policy that results in material harm to the Company or any of its
subsidiaries or (vi) indictment for or conviction of a felony or of
any crime 


 


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(whether or not a felony) involving moral
turpitude.  Notwithstanding the
foregoing, Executive shall not be deemed to have been terminated for Cause
unless and until there shall have been delivered to Executive a copy of a
resolution duly adopted by the affirmative vote of not less than three-quarters
(3/4) of the Incumbent Directors of the Board at a meeting of the Board called
and held for such purpose (after reasonable notice to Executive and an
opportunity for Executive, together with Executive’s counsel, to be heard
before the Board), finding that, in the good faith opinion of the Board,
Executive was guilty of conduct set forth above in this Section 3(ii) and
specifying the particulars thereof in detail.


 


(iii)          Good Reason.  Executive
shall be entitled to terminate employment with Good Reason.  For the purpose of this Agreement, “Good
Reason” shall mean the occurrence, without Executive’s express written
consent, of any of the following circumstances during the Protected Period
unless, in the case of Sections 3(iii)(A), (E), or (F), such circumstances
are fully corrected prior to the date specified as the Date of Termination (as
defined in Section 3(v)) in the Notice of Termination (as defined in Section 3(iv))
given in respect thereof:


 


(A)                              the assignment to Executive of any duties
or responsibilities not comparable to Executive’s position (as it existed
immediately prior to the Change in Control) and that results in a substantial
diminution or material adverse change in such duties or responsibilities from
those in effect immediately prior to the Change in Control other than a change
in title or reporting relationships;


 


(B)                                a reduction by the Company or any of its
subsidiaries in Executive’s annual base salary as in effect on the date hereof
or as the same may be increased from time to time;


 


(C)                                the relocation of Executive’s place of
business to a location more than fifty miles from Executive’s principal place
of employment immediately preceding the Change in Control that materially
increases Executive’s commute compared to Executive’s commute as in effect
immediately prior to the Change in Control;


 


(D)                               a reduction by the Company or any of its
subsidiaries in Executive’s annual bonus opportunity as in effect on the date
hereof or as the same may be increased from time to time;


 


(E)                                 the failure by the Company or any of its
subsidiaries to continue Executive’s participation in any long-term incentive
compensation plan on a level comparable to other senior executives;


 


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(F)                                 except as required by law, a reduction by
the Company or any of its subsidiaries of 5% or more in the aggregate benefits
provided by Executive (excluding changes to such benefits that occur in the
ordinary course, are of general application, and increase co-payments,
deductibles or premiums which must be paid by Executive) as those enjoyed by
Executive under the employee benefit and welfare plans of the Company and its
subsidiaries, including, without limitation, the pension, life insurance,
medical, dental, health and accident, retiree medical, disability, deferred
compensation and savings plans, in which Executive was participating at the
time of the Change in Control;


 


(G)                                the failure of the Company to obtain an
agreement from any successor to assume and agree to perform this Agreement, as
contemplated in Section 6 hereof; or


 


(H)                               any purported termination of Executive’s
employment by the Company or its subsidiaries which is not effected pursuant to
a Notice of Termination satisfying the requirements of Section 3(iv) below
(and, if applicable, the requirements of Section 3(ii) above); for
purposes of this Agreement, no such purported termination shall be effective.


 


Executive’s continued employment shall not constitute consent to, or a
waiver of rights with respect to, any circumstances constituting Good Reason
hereunder.  Executive must provide the
Notice of Termination not later than 180 days following the date he or she had
actual knowledge of the event constituting Good Reason.


 


(iv)          Notice of Termination.  Any purported
termination of Executive’s employment by the Company and its subsidiaries or by
Executive shall be communicated by written Notice of Termination to the other
party hereto in accordance with Section 7 hereof.  For purposes of this Agreement, a “Notice
of Termination” shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail (other than with respect to a Good Reason termination
pursuant to Section 3(iii)(H)) the facts and circumstances claimed to
provide a basis for termination of Executive’s employment under the provision
so indicated.


 


(v)           Date of Termination.  “Date of
Termination” shall mean (A) if Executive’s employment is
terminated for Disability, 30 days after Notice of Termination is given
(provided that Executive shall not have returned to the full-time performance
of Executive’s duties during such 30 day period), and (B) if
Executive’s employment is terminated pursuant to Section 3(ii) or (iii) above
or for any reason (other than Disability), the date specified in the Notice of
Termination (which, in the case of a termination pursuant to Section 3(ii) above



 


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shall not be less than 30 days, and in the case of a
termination pursuant to Section 3(iii) above shall not be less than
30 nor more than 60 days, respectively, from the date such Notice of
Termination is given); provided, that, if within 30 days after
any Notice of Termination is given the party receiving such Notice of
Termination notifies the other party that a dispute exists concerning the
grounds for termination, the Date of Termination shall be the date on which the
dispute is finally determined, either by mutual written agreement of the
parties, by a binding arbitration award or by a final judgment, order or decree
of a court of competent jurisdiction (which is not appealable or the time for
appeal therefrom having expired and no appeal having been perfected); provided,
further, that the Date of Termination shall be extended by a notice of
dispute only if such notice is given in good faith and the party giving such
notice pursues the resolution of such dispute with reasonable diligence.  Notwithstanding the pendency of any such
dispute, the Company and its subsidiaries will continue to pay Executive’s full
compensation in effect when the notice giving rise to the dispute was given
(including, but not limited to, base salary and bonus) and continue Executive
as a participant in all incentive compensation, benefit and insurance plans in
which Executive was participating when the notice giving rise to the dispute
was given, until the dispute is finally resolved in accordance with this Section 3(v).  Amounts paid under this Section 3(v) are
in addition to all other amounts due under this Agreement and shall not be
offset against or reduce any other amounts due under this Agreement.  In the event that the Company is terminating
Executive the Company may, if it so chooses, pay Executive the base salary
which he would have received in lieu of waiting for the expiration of any
notice period otherwise required hereby and bar Executive from any of the
Company’s premises, offices or properties, subject to any rights set forth
herein for Executive to contest such termination.


 


4.             Compensation upon Termination or During Disability. 
Upon termination of Executive’s employment or during a period of
Disability, in either case, during the Protected Period, Executive shall be
entitled to the following benefits:


 


(i)            During any period that Executive fails to perform
Executive’s full-time duties with the Company and its subsidiaries as a result
of the Disability, Executive shall continue to receive an amount equal to
Executive’s base salary at the rate in effect at the commencement of any such
period, and Bonus (as defined in Section 4(iv)(B)), through the Date of
Termination for Disability; provided, that if any such period of
Disability ends during the Protected Period, Executive shall have the right to
resume active employment with the Company immediately following the end of such
period of Disability, unless, prior to the end of such period of Disability,
the Company has terminated Executive’s employment.  Thereafter, Executive’s benefits shall be
determined in accordance with the employee benefit programs of the Company and
its subsidiaries then in effect.


 


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(ii)           If Executive’s employment is terminated by the Company
or any of its subsidiaries for Cause or by Executive without Good Reason
(excluding death, Disability or Retirement) the Company (or one of its
subsidiaries, if applicable) shall pay through the Date of Termination
Executive’s full base salary at the rate in effect at the time Notice of
Termination is given and shall pay any amounts otherwise payable to Executive
on or immediately prior to the Date of Termination pursuant to any other
compensation plans, programs or employment agreements then in effect, and the
Company shall have no further obligations to Executive under this Agreement.


 


(iii)          If Executive’s employment is terminated by reason of
Executive’s death or Retirement, Executive’s benefits shall be determined in
accordance with the retirement and other benefit programs of the Company and
its subsidiaries then in effect, except as otherwise provided in Section 3(i).


 


(iv)          If Executive’s employment by the Company and its
subsidiaries is terminated (other than for death or Disability) by (a) the
Company and its subsidiaries other than for Cause or (b) Executive
with Good Reason, then, subject to Executive executing, delivering and not
revoking the Release of Claims attached to this Agreement as Exhibit A
(the “Release”) within 30 days following the Separation from Service
Date (as defined in Section 4(vii)), Executive shall be entitled to the
benefits provided below:


 


(A)                              The Company (or one of its subsidiaries,
if applicable) shall pay any unpaid portion of Executive’s full base salary, at
the rate in effect at the time of the Change in Control (the “Base Salary”),
and a pro-rated annual bonus at target level, in each case, calculated through
the Date of Termination, no later than the thirtieth day following the Date of
Termination, plus all other amounts to which Executive is entitled under any
compensation plan of the Company applicable to Executive, at the time such
payments are due.


 


(B)                                The Company shall pay Executive, not
later than 10 days following the date on which the Release has become effective
and irrevocable, as severance pay to Executive, a severance payment equal to
       times the sum of (i) Executive’s
Base Salary, and (ii) Bonus. 
For purposes of this Agreement, the “Bonus” shall mean the
average annual cash bonus paid (or awarded, if different) in respect of each of
the three prior bonus years (exclusive of any special or prorated
bonuses).  If Executive has less than
three years of bonus history, “Bonus” shall mean the target bonus of the
year of termination.


 


(C)                                The Company shall credit the Executive
with an additional      years of age and an additional
     “Years of Service” for all purposes 


 


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under The Hertz Corporation Supplemental Executive
Retirement Plan (“SERP II”) (the length of such additional years of
service, the “Severance Period”) with the benefit under the SERP II to
be provided at the time or times set forth under the terms of SERP II without
regard to Section 4(vii), and the averaging period over which “Final
Average Earnings” (as defined in SERP II) is determined shall include the Severance
Period (and, for this purpose, the payment made pursuant to Section 4(iv)(B) shall
be deemed to be compensation earned ratably over the Severance Period); provided
that, if Executive does not at the Date of Termination have at least five “Vesting
Years of Service” under the “Retirement Plan” (as these terms are used or
defined in SERP II), the following additional provisions shall apply to
Executive: (1) Executive shall, notwithstanding the second
paragraph of Section 3.2 of SERP II, be fully vested in his benefit under
SERP II (as increased pursuant to this Section 4(ii)); (2) if
Executive’s actual years of service plus the years of service credited pursuant
to this Section 4(iv)(C) equal less than five, then, notwithstanding Section 1.10
of SERP II, the averaging period over which Final Average Earnings shall be
determined shall be the period of such actual and credited service; (3) Executive’s
benefit under SERP II and this Agreement shall be reduced applying the
reduction factors set forth in the SERP II to reflect the timing of payment of
such benefit; and (4) such benefit shall be paid at the same time
as the payment set forth in Section 4(iv)(B) is paid.


 


(D)                               From the Date of Termination, until the
earlier of (i) the last day of the Severance Period or (ii) the
date upon which Executive becomes eligible to participate in plans of another
employer (such period, the “Benefit Continuation Period”), the Company
will continue Executive’s participation and coverage in all the Company’s life,
medical, dental plans and other welfare benefit plans (but excluding the
Company’s disability plans) (“Insurance Benefits”); provided that
if any other Company plan, arrangement or agreement provides for continuation
of Insurance Benefits, then Executive shall receive such coverage under such
other plan, arrangement or agreement, and if the period of such coverage is
shorter than the Benefit Continuation Period, then Executive shall receive
pursuant to this Section 4(iv)(D), such coverage for the remainder of the
Benefit Continuation Period.


 


(E)                                 The Company shall provide to Executive
outplacement services or executive recruiting services provided by a
professional outplacement provider or executive recruiter at a cost to the
Company of not more than 10% of Executive’s Base Salary (not to exceed $25,000)
to be provided within the period ending no later than the end of the year
following the year in which the Date of Termination occurs.


 


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(v)           To the extent outstanding following a Change in
Control, Executive’s stock options and other equity awards shall be governed by
the terms of the equity incentive plans and award agreements under which such
stock options and other equity awards were awarded.


 


(vi)          The Company shall also pay to Executive, no less
frequently than monthly, all legal fees and expenses reasonably incurred by
Executive in connection with this Agreement (including all such fees and
expenses, if any, incurred in contesting or disputing the nature of any such termination
for purposes of this Agreement or in seeking to obtain or enforce any right or
benefit provided by this Agreement); provided, that if a determination
is made by the arbitrator selected under Section 12 hereof that Executive
has failed to prevail on at least one material claim, the Company shall not be
liable to pay such legal fees or expenses otherwise provided for thereunder and
the Company shall be entitled to recover from Executive any such amounts so
paid (either directly or, except as would violate the requirements of Section 409A
of the Code, by setoff against any amounts then owed Executive by the
Company).  Notwithstanding the
penultimate sentence of Section 8, no reimbursement pursuant to this Section 4(vi) shall
be paid later than the last day of the 10th calendar year following the
calendar year in which the applicable statute of limitations for breach of
contract claims expires or, if later, the last day of the calendar year
following the calendar year in which there is a settlement or other final and
nonappealable resolution of the related contest or dispute.


 


(vii)         Notwithstanding the foregoing provisions of this Section 4,
if, as of the Separation from Service Date, Executive is a Specified Employee,
then, except to the extent that this Agreement does not provide for a “deferral
of compensation” within the meaning of Section 409A of the Code, the
following shall apply:


 


1)                                      No payments shall be made and no benefits
shall be provided to Executive, in each case, during the period beginning on
the Separation from Service Date and ending on the six-month anniversary of
such date or, if earlier, the date of Executive’s death.


 


2)                                      On the first business day of the first
month following the month in which occurs the six-month anniversary of the Separation
from Service Date or, if earlier, Executive’s death, the Company shall make a
one-time, lump-sum cash payment to the Executive in an amount equal to the sum
of (x) the amounts otherwise payable to the Executive under this
Agreement during the period described in Section 4(vii)1) above and (y) the
amount of interest on the foregoing at the applicable federal rate for
instruments of less than one year.


 


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For
purposes of this Agreement, “Separation from Service Date” shall mean
the date of the Executive’s “separation from service” within the meaning of Section 409A(a)(2)(i)(A) of
the Code and determined in accordance with the default rules under
regulations promulgated under Section 409A of the Code.  “Specified Employee” shall mean a “specified
employee” within the meaning of Section 409A(a)(2)(B)(1) of the Code,
as determined in accordance with the uniform methodology and procedures adopted
by the Company and then in effect.


 


5.             Adjustment in Payments


 


(i)            In the event that any payment or benefit received or
to be received by Executive pursuant to the terms of this Agreement (the “Contract
Payments”) or in connection with Executive’s termination of employment or
contingent upon a Change in Control of the Company pursuant to any plan or
arrangement or other agreement with the Company (or any affiliate) (“Other
Payments” and, together with the Contract Payments, the “Payments”)
would be subject to the excise tax (the “Excise Tax”) imposed by Section 4999
of the Code, as determined as provided below, and provided, that if
Executive’s Payment is, when calculated on a net-after-tax basis (taking into
account the Excise Tax as well as other applicable federal, state and local
income taxes), less than 100% of the net-after tax amount (taking into account
applicable federal, state and local income taxes) of the Payment which could be
paid to Executive under Section 280G of the Code without causing the
imposition of the Excise Tax, then the Payment shall be limited to the largest
amount payable without resulting in the imposition of any Excise Tax (such
amount, the “Capped Amount”).


 


(ii)           For purposes of determining the Capped Amount, whether
any of the Payments will be subject to the Excise Tax and the amounts of such
Excise Tax, (1) the total amount of the Payments shall be treated
as “parachute payments” within the meaning of Section 280G(b)(2) of
the Code, and all “excess parachute payments” within the meaning of Section 280G(b)(1) of
the Code shall be treated as subject to the Excise Tax, except to the extent
that, in the opinion of independent tax counsel selected by the Company’s
independent auditors and reasonably acceptable to Executive (“Tax Counsel”),
a Payment (in whole or in part) does not constitute a “parachute payment”
within the meaning of Section 280G(b)(2) of the Code, or such “excess
parachute payments” (in whole or in part) are not subject to the Excise Tax, (2) the
amount of the Payments that shall be treated as subject to the Excise Tax shall
be equal to the lesser of (A) the total amount of the Payments or (B) the
amount of “excess parachute payments” within the meaning of Section 280G(b)(1) of
the Code (after applying clause (1) hereof), and (3) the value
of any noncash benefits or any deferred payment or benefit shall be determined
by Tax Counsel in accordance with the principles of Sections 280G(d)(3) and
(4) of the Code.  For purposes of
determining the amounts compared in the proviso of Section 5(i) above,
Executive shall be deemed to pay federal income tax at the highest marginal
rates of federal income taxation applicable to individuals in the calendar year
in 


 


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which the Payment is to be made and state and local income taxes at the
highest effective rates of taxation applicable to individuals as are in effect
in the state and locality of Executive’s residence in the calendar year in
which the Payment is to be made, net of the maximum reduction in federal income
taxes that can be obtained from deduction of such state and local taxes, taking
into account any limitations applicable to individuals subject to federal
income tax at the highest marginal rates.


 


(iii)          If the Tax Counsel determines that any Excise Tax is
payable by Executive and that the criteria for reducing the Payments to the
Capped Amount (as described in Section 5(i) above) is met, then the
Company shall reduce the Payments by the amount which, based on the Tax Counsel’s
determination and calculations, would provide Executive with the Capped Amount,
and pay to Executive such reduced Payments; provided that the Company
shall first reduce the severance payment under Section 4(iv)(B) and
shall next reduce the benefits described in Section 4(iv)(C).  If the Tax Counsel determines that no Excise
Tax is payable by Executive, it shall, at the same time as it makes such
determination, furnish Executive with an opinion that he has substantial
authority not to report any Excise Tax on his/her federal, state, local income
or other tax return.


 


6.             Successors; Binding Agreement.


 


(i)    The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all of the business and/or assets of the Company to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company is required to perform it.  Failure of the Company to obtain such
assumption and agreement prior to the effectiveness of any such succession
shall be a breach of this Agreement and shall entitle Executive to compensation
from the Company in the same amount and on the same terms as Executive would be
entitled hereunder if Executive had terminated Executive’s employment with Good
Reason following a Change in Control, except that for purposes of implementing
the foregoing, the date on which any such succession becomes effective shall be
deemed the Date of Termination.


 


(ii)   This Agreement shall inure to the benefit
of and be enforceable by Executive’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees.  If Executive should die while
any amount would still be payable to Executive hereunder if Executive had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to Executive’s devisee,
legatee or other designee or, if there is no such designee, to Executive’s
estate.


 


7.             Notice.  For the
purpose of this Agreement, notices and all other communications provided for in
this Agreement shall be in writing and shall be deemed to have been duly given
when delivered or mailed by United States registered mail, return


 


12
















 


receipt requested,
postage prepaid (or its international equivalent)


 


if to the Company to:


 


Hertz
Global Holdings, Inc.


225
Brae Boulevard


Park
Ridge, New Jersey 07656


Attention:
Senior Vice President, Chief Human Resource Officer


With a separate duplicate copy of such notice to be
provided to the General Counsel of the Company


 


if to the Executive, to
the to the Executive at his or her most recent address as shown on the books
and records of the Company or any subsidiary of the Company employing the Executive.


 


8.             Miscellaneous.  No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by Executive and such officer as may be
specifically designated by the Board.  No
waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any conditions or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time.  The validity, interpretation,
construction and performance of this Agreement shall be governed by the
internal laws of the State of New Jersey, without regard to its conflict of law
provisions.  This Agreement is intended
to satisfy the requirements of Section 409A of the Code with respect to
amounts subject thereto and shall be interpreted and construed and shall be
performed by the parties consistent with such intent, and the Company shall
have no right to accelerate any payment or the provision of any benefits under
this Agreement or to make or provide any such payment or benefits if such
payment or provision of such benefits would, as a result, be subject to tax
under Section 409A of the Code.  All
references to sections of the Code shall be deemed also to refer to any
successor provisions to such sections and the applicable regulations and
guidance thereunder.  Any payments
provided for hereunder shall be paid net of any applicable withholding required
under federal, state, local or other applicable law.  Anything in this Agreement to the contrary
notwithstanding, no reimbursement payable to Executive pursuant to any
provisions of this Agreement or pursuant to any plan or arrangement of the
Company covered by this Agreement shall be paid later than the last day of the
calendar year following the calendar year in which the related expense was
incurred, and no such reimbursement during any calendar year shall affect the
amounts eligible for reimbursement in any other calendar year, except, in each
case, to the extent that the right to reimbursement does not provide for a “deferral
of compensation” within the meaning of Section 409A of the Code.  The obligations of the Company under
Sections 4 and 5 shall survive the expiration of the term of this
Agreement.


 


13

















 


9.             Other Arrangements.  The severance benefits under this Agreement
are not additive or cumulative to severance or termination benefits that Executive
might also be entitled to receive under the terms of a written employment
agreement, a severance agreement or any other arrangement with the
Company.  As a condition of the Company
entering into this Agreement, Executive expressly agrees that this Agreement
supersedes all prior agreements, and sets forth the entire severance benefit to
which he or she is entitled while this Agreement remains in effect.  The provisions of this Agreement may provide
for payments to Executive under certain compensation or bonus plans under
circumstances where such plans would not provide for payment thereof.  It is the specific intention of the Company
that the provisions of this Agreement shall supersede any provisions to the contrary
in such plans, to the extent permitted by applicable law, and such plans shall
be deemed to have been amended to correspond with this Agreement without
further action by the Company or the Board.


 


10.           Validity.  The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.


 


11.           Counterparts.  This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.


 


12.           Arbitration;
Indemnification.


 


(i)    In the
event of any dispute under the provisions of this Agreement, other than a
dispute in which the primary relief sought is an equitable remedy such as an
injunction, the parties shall have the dispute, controversy or claim settled by
arbitration in Park Ridge, New Jersey (or such other location as may be
mutually agreed upon by the Company and the Executive) in accordance with the
National Rules for the Resolution of Employment Disputes then in effect of
the American Arbitration Association, before a single arbitrator selected by
agreement of the parties (or, in the absence of such agreement, appointed by
the American Arbitration Association). 
Any award entered by the arbitrator shall be final, binding and
nonappealable and judgment may be entered thereon by either party in accordance
with applicable law in any court of competent jurisdiction.  This arbitration provision shall be
specifically enforceable.  The arbitrator
shall have no authority to modify any provision of this Agreement or to award a
remedy for a dispute involving this Agreement other than a benefit specifically
provided under or by virtue of this Agreement. 
Fees of the American Arbitration Association and the arbitrator and any
expenses relating to the conduct of the arbitration (including the Company’s
and Executive’s reasonable attorneys’ fees and expenses) shall be paid in
accordance with Section 4(vi).


 


(ii)   Following
any termination of employment of Executive (other than a termination by the
Company for Cause), the Company shall indemnify and hold harmless


 


14

















 


Executive to the
fullest extent permitted under the Company’s by-laws (as in effect prior to the
Change in Control) and applicable law for any claims, costs and expenses
arising out of or in connection with Executive’s employment with the Company
(without regard to when such claim is asserted or issue is raised, so long as
it relates to conduct or events that occurred while Executive was employed with
the Company) and shall, for a period of not less than six years following a
Change in Control, maintain directors’ and officers’ liability insurance
coverage for the benefit of Executive which provides him with coverage, if any,
no less favorable than that in effect prior to the Change in Control; provided,
that if the Company maintains directors’ and officers’ liability insurance
coverage for other current or former officers or directors of the Company
following such six-year period, Executive shall also be provided with such
insurance coverage.


 


13.           Confidentiality, Covenant Not to
Compete and Not to Solicit.


 


(i)    Nondisclosure
of Confidential Information.  At no
time during the term of Executive’s employment or the 24 month period following
the Executive’s Date of Termination, shall Executive, without the prior written
consent of the Company, use, divulge, disclose or make accessible to any other
person, firm, partnership, corporation or other entity any Confidential
Information pertaining to the business of the Company or any of its affiliates,
except (i) while employed by the Company, in the business of and
for the benefit of the Company, or (ii) when required to do so by a
court of competent jurisdiction, by any governmental agency having supervisory
authority over the business of the Company, or by any administrative body or
legislative body (including a committee thereof) with jurisdiction to order
Executive to divulge, disclose or make accessible such information.  For purposes of this Section 13, “Confidential
Information” shall mean any trade secret or other non-public information
concerning the financial data, strategic business plans, product development
(or other proprietary product data), customer lists, marketing plans and other
non-public, proprietary and confidential information of the Company or its
affiliates, that, in any case, is not otherwise available to the public (other
than by Executive’s breach of the terms hereof) or known to persons in the
industry generally.


 


(ii)   Non
Competition.  During the term of
Executive’s employment and during the 12 month period immediately following the
date of any termination of Executive’s employment with the Company, Executive shall
not directly or indirectly become associated, as an owner, partner, shareholder
(other than as a holder of not in excess of 5% of the outstanding voting shares
of any publicly traded company), director, officer, manager, employee, agent,
consultant or otherwise, with any partnership, corporation or other entity that
competes with the car or equipment rental business, and for the customer base,
of the Company or any of its subsidiaries. 
This Section 13(ii) shall not be deemed to restrict Executive’s
association with any enterprise that conducts unrelated business or that has
material operations outside of the geographic area that encompasses the Company’s
customer base (or where the Company had plans at the Date of Termination


 


15

















 


to enter) for so
long as the Executive’s role whether direct or indirect (e.g., supervisory), is
solely with respect to such unrelated business or other geographic area (as the
case may be).


 


(iii)  Non
Solicitation.  During the term of
Executive’s employment and during the 12 month period immediately following the
date of any termination of Executive’s employment with the Company, Executive
shall not directly or indirectly employ or seek to employ, or solicit or
contact or cause others to solicit or contact with a view to engage or employ,
any person who is or was a managerial level employee of the Company at the time
of the Executive’s Date of Termination or at any time during the twelve-month
period preceding such date.  This Section 13(iii) shall
not be deemed to be violated solely by (a) placing an advertisement
or other general solicitation or (b) serving as a reference.


 


(iv)  Reasonableness.  If any provision of this Section 13
shall ever be deemed to exceed the time, scope or geographic limitations
permitted by applicable laws, then such provisions shall be reformed to the
maximum time, scope or geographic limitations, as the case may be, permitted by
applicable laws.  Because Executive’s
services are unique and because Executive has had access to Confidential
Information, the parties hereto agree that money damages will be an inadequate
remedy for any breach of this Agreement. 
In the event of a breach or threatened breach of this Agreement, the
Company or its successors or assigns may, in addition to other rights and
remedies existing in their favor, stop making any additional payments hereunder
to Executive and apply to any court of competent jurisdiction for specific
performance and/or injunctive relief in order to enforce, or prevent any
violations of, the provisions hereof (without the posting of a bond or other
security).


 


14.           Amendment and Waiver.  The Company may amend this Agreement at any
time and from time to time; provided that any amendment that is adverse
to the Executive shall be effective only with respect to a Change in Control
that occurs one year or more following the date of such amendment.  The provisions of this Agreement may be
waived only with the prior written consent of the Company and the Executive,
and no course of conduct or failure or delay in enforcing the provisions of
this Agreement shall affect the validity, binding effect or enforceability of
this Agreement or any provision hereof.


 


15.           Entire Agreement.  No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not expressly set forth in this
Agreement.  This Agreement constitutes
the entire understanding between the parties with respect to Executive’s
severance pay in the event of a termination of Executive’s employment with the
Company, superseding all negotiations, prior discussions and preliminary
agreements, written or oral, concerning said severance pay; provided,
that any payments or benefits provided in respect of severance, or
indemnification for loss of employment, pursuant to any severance, employment
or similar agreement between the Company or any of its subsidiaries and


 


16

















 


Executive, or as required
by applicable law outside the United States, shall reduce any payments or
benefits provided pursuant to this Agreement, except that the payments or
benefits provided pursuant to this Agreement shall not be reduced below zero.  Notwithstanding any provision of this
Agreement:  (i) Executive
shall not be required to mitigate the amount of any payment provided by this
Agreement by seeking other employment or otherwise, nor (except as provided for
in Section 4(iv)(D) above) shall the amount of any payment or benefit
provided by this Agreement be reduced by any compensation earned by Executive
as the result of employment by another employer or by retirement benefits
received after the Date of Termination or otherwise, and (ii) except
as otherwise provided in this Agreement, the obligations of the Company to make
payments to Executive and to make the arrangements provided for herein are
absolute and unconditional and may not be reduced by any circumstances,
including without limitation any set-off, counterclaim, recoupment, defense or
other right which the Company may have against Executive or any third party at
any time.


 


16.           Further
Action.  The Company shall take any
further action necessary or desirable to implement the provisions of this
Agreement or perform its obligations hereunder.


 


 


	
   

  	
  HERTZ GLOBAL HOLDINGS,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Executive

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  



 


17

















 


Exhibit A


 


SEPARATION AGREEMENT 


 


and 


 


GENERAL RELEASE OF ALL CLAIMS(1)


 


This Separation
Agreement and General Release of All Claims (the “Agreement”) is entered
into as of [·] by and among [·] (the “Executive”), Hertz Global
Holdings, Inc. and The Hertz Corporation (hereinafter “Hertz” or
the “Companies”), duly acting under authority of their officers and
directors.


 


WHEREAS, Hertz Global Holdings, Inc. and
the Executive have entered into a Change in Control Severance Agreement, dated
as of [·] (the “Severance Agreement”);


 


WHEREAS, Executive’s employment with Hertz will
end effective as of [·];


 


WHEREAS, in connection with Executive’s
separation from employment, Executive is entitled to certain payments and other
benefits under the Severance Agreement, so long as Executive executes and does
not revoke this Agreement; and


 


WHEREAS, the parties desire to fully and finally
resolve any disputes, claims or controversies that have arisen or may arise
with respect to Executive’s employment with and subsequent separation from the
Companies.


 


NOW,
THEREFORE, in
consideration of the mutual promises, covenants and agreements stated herein
and in the Severance Agreement, which Executive and the 


 






(1) To be revised if necessary or appropriate
under any applicable law to effect a complete and total release of claims by
the Executive as of the effective date of the Agreement.


 

















 


Companies
agree constitute good and valuable consideration, receipt of which is
acknowledged, the parties stipulate and do mutually agree as follows:


 


1.             In
exchange for receiving the payments and benefits described in Sections 4 and 5
of the Severance Agreement, Executive does for himself and his heirs,
executors, administrators, successors, and assigns, hereby release, acquit, and
forever discharge and hold harmless the Companies and the divisions, subsidiaries
and affiliated companies of each of the Companies, the officers, directors,
shareholders, employees, benefit and retirement plans (as well as trustees and
administrators thereof), agents and heirs of each of the foregoing, and the
predecessors, assigns and successors, past and present of each of the
foregoing, and any persons, firms or corporations in privity with any of them
(collectively, the “Company Released Parties”), of and from any and all
actions, causes of action, claims, demands, attorneys’ fees, compensation,
expenses, promises, covenants, and damages of whatever kind or nature, in law
or in equity, which Executive has, had or could have asserted, known or
unknown, at common law or under any statute, rule, regulation, order or law,
whether federal, state or local, or on any grounds whatsoever from the
beginning of the world to the date of Executive’s execution of this Agreement,
including, without limitation, (1) any and all claims for any
additional severance pay, vacation pay, bonus or other compensation; (2) any
and all claims of discrimination or harassment based on race, color, national
origin, ancestry, religion, marital status, sex, sexual orientation,
disability, handicap, age or other unlawful discrimination; any claims arising
under Title VII of the Federal Civil Rights Act; the 


 


19

















 


Federal Civil Rights Act of 1991; the Americans with
Disabilities Act; the Age Discrimination in Employment Act; the New Jersey Law
Against Discrimination; or under any other state, federal, local law or
regulation or under the common law; and (3) any and all claims with
respect to any event, matter, damage or injury arising out of his employment
relationship with any Company Released Party, and/or the separation of such
employment relationship, and/or with respect to any other event or matter.


 


The only
exceptions to this Separation Agreement and General Release of All Claims are
with respect to retirement benefits which may have accrued and vested as of the
date of Executive’s employment termination, COBRA rights, enforcement of
Executive’s rights under this Agreement and the Severance Agreement, and any
claims under applicable workers’ compensation laws.


 


Nothing in this
Agreement shall be construed to prohibit Executive from filing any future
charge or complaint with the U.S. Equal Employment Opportunity Commission (the “EEOC”)
or participating in any investigation or proceeding conducted by the EEOC, nor
shall any provision of this Agreement adversely affect Executive’s right to
engage in such conduct. Notwithstanding the foregoing, Executive waives the
right to obtain any relief from the EEOC or recover any monies or compensation
as a result of filing a charge or complaint. In addition to agreeing herein not
to bring suit against any Company Released Party, Executive agrees not to seek
damages from any Company Released Party by filing a claim or charge with any
state or governmental agency.


 


20

















 


2.             Executive
shall return to the Companies all Company property and Confidential Information
(as defined in the Severance Agreement) of any Company Released Party in
Executive’s possession or control, including without limitation, business
reports and records, client reports and records, customer information,
personally identifiable information relating to others, business strategies,
contracts and proposals, files, a listing of customers or clients, lists of
potential customers or clients, technical data, testing or research data,
research and development projects, business plans, financial plans, internal
memoranda concerning any of the above, and all credit cards, cardkey passes,
door and file keys, computer access codes, software, and other physical or
personal property which Executive received, had access to or had in his
possession, prepared or helped prepare in connection with Executive’s
employment with any Company Released Party, and Executive shall not make or
retain any copies, duplicates, reproductions, or excerpts thereof.  Executive acknowledges that in the course of
employment with any one or more Company Released Party, Executive has acquired
Confidential Information and that such Confidential Information has been disclosed
to Executive in confidence and for his use only during and with respect to his
employment with one or more of the Company Released Parties.


 


3.             Executive
acknowledges and agrees that he has agreed to be bound by the confidentiality
provision in the Severance Agreement for 24 months following Executive’s
separation of employment and the non-competition and non-solicitation 


 


21

















 


covenants in the Severance Agreement for 12 months
following Executive’s separation of employment.


 


4.             Executive
declares and represents that he has not filed or otherwise pursued any charges,
complaints, lawsuits or claims of any nature against any Company Released Party
arising out of or relating to events occurring prior to the date of this
Agreement, with any federal, state or local governmental agency or court with
respect to any matter covered by this Agreement. In addition to agreeing herein
not to bring suit against any Company Released Party, Executive agrees not to
seek damages from any Company Released Party by filing a claim or charge with
any state or governmental agency.


 


5.             Executive
further declares and represents that no promise, inducement, or agreement not
herein expressed has been made to him, that this Agreement contains the entire
agreement between the parties hereto, and that the terms of this Agreement are
contractual and not a mere recital.


 


6.             Executive
understands and agrees that this Agreement shall not be considered an admission
of liability or wrongdoing by any party hereto, and each of the parties denies
any liability and agrees that nothing in this Agreement can or shall be used by
or against either party with respect to claims, defenses or issues in any
litigation or proceeding except to enforce rights under the Agreement itself or
under the Severance Agreement.


 


22

















 


7.             Executive
understands and agrees that should any provision of this Agreement be declared
or be determined by any court to be illegal or invalid, the validity of the
remaining parts, terms or provisions shall not be affected thereby, and said
invalid part, term, or provision shall be deemed not a part of this Agreement.


 


8.             Executive
acknowledges that he understands that he has the right to consult with an
attorney of his choice at his expense to review this Agreement and has been
encouraged by the Companies to do so.


 


9.             Executive
further acknowledges that he has been provided twenty-one days to consider and
accept this Agreement from the date it was first given to him, although Executive
may accept it at any time within those twenty-one days.


 


10.           Executive
further understands that he has seven days after signing the Agreement to
revoke it by delivering to the Senior Vice President, Chief Human Resource
Officer, The Hertz Corporation, 225 Brae Boulevard, Park Ridge, New Jersey
07656, written notification of such revocation within the seven day period. If
Executive does not revoke the Agreement, the Agreement will become effective
and irrevocable by him on the eighth day after he signs it.


 


11.           Executive
acknowledges that this Agreement sets forth the entire agreement between the
parties with respect to the subject matters hereof and supersedes any and all
prior agreements between the parties as to such matters, be they oral or in writing,
and may not be changed, modified, or rescinded except in writing signed by all 


 


23

















 


parties hereto, and any attempt at oral modification
of this Agreement shall be void and of no force or effect.


 


12.           Executive
acknowledges that he has carefully read this Agreement and understands all of
its terms, including the full and final release of claims set forth above and
enters into it voluntarily.


 


WITH EXECUTIVE’S
SIGNATURE HEREUNDER, EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE HAS CAREFULLY READ
THIS AGREEMENT AND UNDERSTANDS ALL OF ITS TERMS INCLUDING THE FULL AND FINAL
RELEASE OF CLAIMS SET FORTH ABOVE. 
EXECUTIVE FURTHER ACKNOWLEDGES THAT EXECUTIVE HAS VOLUNTARILY ENTERED
INTO THIS AGREEMENT; THAT EXECUTIVE HAS NOT RELIED UPON ANY REPRESENTATION OR
STATEMENT, WRITTEN OR UNWRITTEN, NOT SET FORTH IN THIS AGREEMENT; THAT
EXECUTIVE HAS BEEN GIVEN THE OPPORTUNITY TO HAVE THIS AGREEMENT REVIEWED BY HIS
ATTORNEY; AND THAT EXECUTIVE HAS BEEN ENCOURAGED BY THE COMPANIES TO DO SO.


 


EXECUTIVE ALSO
ACKNOWLEDGES THAT EXECUTIVE HAS BEEN AFFORDED 21 DAYS TO CONSIDER THIS
AGREEMENT AND THAT EXECUTIVE HAS 7 DAYS AFTER SIGNING THIS AGREEMENT TO REVOKE
IT BY DELIVERING TO THE SENIOR VICE PRESIDENT, CHIEF HUMAN RESOURCES OFFICER,
AS SET FORTH ABOVE, WRITTEN NOTIFICATION OF EXECUTIVE’S REVOCATION.


 


IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as
of the date set forth above.


 


24

















 




	
   

  	
   

  	
  Date:

  
	
  EXECUTIVE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  THE HERTZ CORPORATION

  	
   

  	
  HERTZ GLOBAL HOLDINGS,
  INC.

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Date:

  	
   

  	
  Date:

  
					






 


25