Exhibit 10.6


 


HERTZ GLOBAL HOLDINGS, INC.


 


SENIOR EXECUTIVE BONUS PLAN


 


(Effective
as of January 1, 2010)


 


Section 1.               Purpose.
 The purposes of the Hertz Global
Holdings, Inc. Senior Executive Bonus Plan (the “Plan”) are (i) to
compensate certain members of senior management of the Company on an individual
basis for significant contributions to the Company and its subsidiaries and (ii) to
stimulate the efforts of such members by giving them a direct financial
interest in the performance of the Company.


 


Section 2.               Definitions.
 The following terms utilized in this
Plan shall have the following meanings:


 


“Board” shall mean the board of directors of the
Company.


 


“Cause” shall mean with respect to any Participant (as
determined by the Committee): (i) willful
and continued failure to perform substantially the Participant’s material
duties with the Company (other than any such failure resulting from the
Participant’s incapacity as a result of physical or mental illness) after a
written demand for substantial performance specifying the manner in which the
Participant has not performed such duties is delivered to the Participant by
the person or entity that supervises or manages the Participant, (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 Participant’s job performance, (v) material
violation of any Company policy that results in harm to the Company or any of
its subsidiaries or (vi) indictment
for or conviction of (or plea of guilty or nolo contendere)
to a felony or of any crime (whether or not a felony) involving moral
turpitude.  A “termination for Cause”
shall include a determination by the Committee following a Participant’s
termination of employment for any other reason that, prior to such termination
of employment, circumstances constituting Cause existed with respect to such
Participant.


 


“Code” shall mean the Internal Revenue Code of 1986
and the regulations and guidance promulgated thereunder, all as amended from
time to time.


 


“Committee” shall mean the committee of the Board designed
by the Board to administer the Plan, provided that such committee shall consist
solely of two or more “outside directors” within the meaning of Code Section 162(m).


 


“Company” shall mean Hertz Global Holdings, Inc.,
a Delaware corporation, and any successor thereto.


 


“EBITDA” shall mean, for
a Performance Period, consolidated net income before net interest expense,
consolidated income taxes and consolidated depreciation and amortization;
provided, however, that EBITDA shall exclude any or all “extraordinary items”
as determined


 

















 


under U.S. generally acceptable accounting principles including,
without limitation, the charges or costs associated with restructurings of the
Company, discontinued operations, other unusual or non-recurring items, and the
cumulative effects of accounting changes, and as identified in the Company’s
financial statements, notes to the Company’s financial statements or management’s
discussion and analysis of financial condition and results of operations
contained in the Company’s most recent report filed with the U.S. Securities
and Exchange Commission pursuant to the Exchange Act.


 


“Exchange Act” means the
Securities Exchange Act of 1934, as amended, and the rules promulgated
thereunder.


 


“Executive Officer” means
each person who is an officer of the Company or any subsidiary and who is
subject to the reporting requirements under Section 16(a) of the
Exchange Act.


 


“Participant” shall mean, for a Performance Period, (i) all
Executive Officers, and (ii) officers of the Company or its subsidiaries who
are (or who, in the determination of the Committee, may reasonably be expected
to be) “covered employees” within the meaning of Code Section 162(m) for
such Performance Period and who are designated to participate in the Plan by
the Committee on or before the first March 30 of such Performance Period
(or such later date, if any, as permitted under Code Section 162(m)).


 


“Performance Period” shall mean the fiscal year of the
Company; provided, however, that the Committee may designate that the
Performance Period for an Incentive Award be more than one fiscal year (with
any such designation by the Committee to be made within the time period
permitted under Code Section 162(m)).


 


“Wrongful Conduct” shall mean any action whereby a
Participant:


 


(a) directly or indirectly, owns any interest in,
operates, joins, controls or participates as a partner, director, principal,
officer, or agent of, enters into the employment of, acts as a consultant to,
or performs any services for any entity which has operations that compete with
any business of the Company and its subsidiaries in which the Participant was
employed (in any capacity) in any jurisdiction in which such business is
engaged, or in which any of the Company and its subsidiaries have documented
plans to become engaged of which the Participant has knowledge at the time of
the Participant’s termination of employment (the “Business”), except where (x) the Participant’s interest or association with such
entity is unrelated to the Business, (y) such
entity’s gross revenue from the Business is less than 10% of such entity’s
total gross revenue, and ( z ) the
Participant’s interest is directly or indirectly less than two percent (2%) of
the Business;


 


(b) directly or indirectly, solicits for
employment, employs or otherwise interferes with the relationship of the
Company or any of its affiliates with any natural person throughout the world
who is or was employed by or otherwise engaged to perform services for the
Company or any of its affiliates at any


 


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time during the Participant’s employment with the
Company or any subsidiary (in the case of any such activity during such time)
or during the twelve-month period preceding such solicitation, employment or
interference (in the case of any such activity after the termination of the
Participant’s employment); or


 


(c) directly or indirectly, discloses or misuses
any confidential information of the Company or any of its affiliates.


 


Section 3.               Term.  Subject to Section 10, the Plan shall be
applicable for the 2010 fiscal year and all future fiscal years of the Company
unless amended or terminated by the Company pursuant to Section 7.


 


Section 4.               Incentive Award.


 


4.1           For
each Performance Period of the Company, each Participant may be entitled to
receive an award payable in cash (“Incentive Award”) in an amount determined by
the Committee as provided in this Plan.  With
respect to each Performance Period, the Chief Executive Officer of the Company
shall be entitled to be paid an Incentive Award equal to 1% of the Company’s EBITDA
for such Performance Period of the Company. 
With respect to each Performance Period of the Company, each other
Participant shall be entitled to be paid an Incentive Award equal to 0.5% of EBITDA
for such Performance Period.  Except as
otherwise provided in the Plan, a Participant must be employed with the Company
on the last day of the Performance Period in order to receive an Incentive
Award with respect to such Performance Period.


 


Notwithstanding anything contained in this Plan to the
contrary, the Committee in its sole discretion may reduce any Incentive Award
to any Participant to any amount, including zero, prior to the written certification
of the Committee of the amount of such Incentive Award.


 


As a condition to the right of a Participant to
receive an Incentive Award, the Committee shall first certify in writing the
Company’s EBITDA and that the Incentive Award has been determined in accordance
with the provisions of this Plan.


 


Incentive Awards for any Performance Period shall be
determined as soon as practicable after such Performance Period and shall be
paid no later than the 15th day of the third month following such Performance
Period.


 


4.2           Unless
otherwise determined by the Committee (whether before or after the commencement
of an applicable Performance Period), if a Participant’s employment is
terminated for any reason prior to the end of a Performance Period, the
Participant shall cease being eligible for an Incentive Award in respect to
such Performance Period; provided, further, that the Committee shall have no
discretion to take such preceding action if the exercise of such action or the
ability to exercise such action would cause such Award to fail to qualify as “performance-based”
compensation under Code Section 162(m).


 


4.3           Incentive
Awards shall be payable in cash.


 


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4.4           The
Company shall have the right and power to deduct from all amounts paid to a
Participant (whether under this Plan or otherwise) or to require a Participant
to remit to the Company promptly upon notification of the amount due, an amount
to satisfy the minimum federal, state or local or foreign taxes or other
obligations required by law to be withheld with respect thereto with respect to
any Incentive Award under this Plan.


 


4.5           Participation
in this Plan does not exclude Participants from participation in any other
benefit or compensation plans or arrangements of the Company, including other
bonus or incentive plans.  Nothing in the
Plan shall be construed to limit the right of the Company to establish other
plans or to pay compensation to its employees, in cash or property, in a manner
which is not expressly authorized under the Plan.


 


4.6           Unless
otherwise determined by the Committee, notwithstanding anything contained in
this Plan to the contrary, if, during the period commencing with a Participant’s
employment with the Company or any subsidiary, and continuing until the first
anniversary of the Participant’s employment termination, the Participant,
except with the prior written consent of the Committee, engages in Wrongful
Conduct, then any Incentive Award granted to the Participant hereunder, to the
extent they remain unpaid, shall automatically terminate and be canceled upon
the date on which the Participant first engaged in such Wrongful Conduct and,
in such case or in the case of the Participant’s termination for Cause, the
Participant shall pay to the Company in cash the amounts paid under any
Incentive Award hereunder within the twelve-month period ending on the date of
the Participant’s violation (or such other period as determined by the
Committee).


 


4.7           In
the event that a Participant commits misconduct, fraud or gross negligence
(whether or not such misconduct, fraud or gross negligence is deemed or could
be deemed to be an event constituting Cause) and as a result of, or in
connection with, such misconduct, fraud or gross negligence the Company
restates any of its financial statements, the Committee may require any or all
of the following: (i) any Incentive Award granted to the Participant
hereunder, to the extent they remain unpaid at the time of the restatement, be terminated
and be canceled, and (ii) the Participant pay to the Company in cash all
or a portion of the amounts paid under any Incentive Award hereunder during the
twelve-month period prior to the financial restatement (or such other period as
determined by the Committee).


 


4.8           Without
limiting the preceding, any Incentive Award hereunder shall be subject to the
Compensation Recovery Policy under the Company’s Standards of Business Conduct
(as amended from time to time, and including any successor or replacement
policy or standard).  The Participant’s
obligations under Sections 4.6 and 4.7 shall be cumulative (but not
duplicative) of any similar obligations the Participant has under this Plan,
any Company policy, standard or code (including, without limitation, the
Company’s Standards of Business Conduct), or any other agreement with the
Company or any subsidiary.


 


Section 5.               Administration and Interpretation.  The Committee shall
have authority to prescribe, amend and rescind rules and regulations
relating to the Plan, to provide for conditions deemed necessary or advisable
to protect the interests of the Company, to interpret the Plan and to make all
other determinations necessary or advisable for the administration and
interpretation of the Plan and to carry out its provisions and purposes.  Any determination, interpretation or 


 


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other
action made or taken (including any failure to make any determination or
interpretation, or take any other action) by the Committee pursuant to the
provisions of the Plan, shall, to the greatest extent permitted by law, be
within its sole and absolute discretion and shall be final, binding and
conclusive for all purposes and upon all persons and shall be given deference
in any proceeding with respect thereto. 
The Committee may appoint accountants, actuaries, counsel, advisors and
other persons that it deems necessary or desirable in connection with the
administration of the Plan.  The
Committee’s determinations under the Plan need not be uniform and may be made
by the Committee selectively among persons who receive, or are eligible to
receive, Incentive Awards under the Plan, whether or not such persons are
similarly situated.  To the maximum
extent permitted by law, no member of the Committee shall be liable for any
action taken or decision made in good faith relating to the Plan or any
Incentive Award hereunder.


 


To the maximum extent provided by law and by the
Company’s Certificate of Incorporation and/or By-Laws, each person who is or
shall have been a member of the Committee or of the Board shall be indemnified
and held harmless by the Company against and from any loss, cost, liability or
expense that may be imposed upon or reasonably incurred by him or her in
connection with or resulting from any claim, action, suit or proceeding to
which he or she may be made a party or in which he or she may be involved by
reason of any action taken or failure to act under the Plan and against and
from any and all amounts paid by him or her in settlement thereof, with the
Company’s approval, or paid by him or her in satisfaction of any judgment in
any such action, suit or proceeding against him or her, provided he or she
shall give the Company an opportunity, at its own expense, to handle and defend
the same before he or she undertakes to handle and defend it on his or her own
behalf.  The foregoing right of
indemnification shall not be exclusive and shall be independent of any other
rights of indemnification to which such persons may be entitled under the
Company’s Certificate of Incorporation or By-laws, by contract, as a matter of
law, or otherwise.


 


Section 6.               Administrative Expenses.  Any expense incurred in the administration of
the Plan shall be borne by the Company out of its general funds.


 


Section 7.               Amendment or Termination.  The Committee of the Company may from time to
time amend the Plan in any respect or terminate the Plan in whole or in part,
provided that such action will not cause an Incentive Award to become subject
to the deduction limitations contained in Code Section 162(m).


 


Section 8.               No Assignment.  The rights hereunder, including without
limitation rights to receive an Incentive Award, shall not be pledged, assigned,
transferred, encumbered or hypothecated by an employee of the Company, and
during the lifetime of any Participant any payment of an Incentive Award shall
be payable only to such Participant.


 


Section 9.               The Company.  For purposes of this Plan, the “Company”
shall include the successors and assigns of the Company, and this Plan shall be
binding on any corporation or other person with which the Company is merged or
consolidated.


 


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Section 10.             Stockholder Approval.  The effective date of the Plan is January 1,
2010.  The Plan shall be submitted to the
stockholders of the Company for approval at the 2010 stockholder meeting and
the effectiveness of the Plan is subject to stockholder approval.


 


Section 11.             No Right to Employment.  The designation of an officer as a Participant
or grant of an Incentive Award shall not be construed as giving a Participant
the right to be retained in the employ of the Company or any affiliate or
subsidiary.  Nothing in the Plan or any
Incentive Award Agreement shall interfere with or limit in any way the right of
the Company or any affiliate or subsidiary to terminate any Participant’s
employment at any time (regardless of whether such termination results in (1) the
failure of any Incentive Award to vest; (2) the forfeiture of any Incentive
Award; and/or (3) any other adverse effect on the individual’s interests
under the Plan).


 


Section 12.             No Impact on Benefits.  Except as may otherwise be specifically
stated under any employee benefit plan, policy or program, no amount payable in
respect of any Incentive Award shall be treated as compensation for purposes of
calculating a Participant’s right under any such plan, policy or program.  No amount payable in respect of any Incentive
Award shall be deemed part of a Participant’s regular, recurring compensation
for purposes of any termination, indemnity or severance pay laws.


 


Section 13.             Right to Offset.  Notwithstanding any provisions of the Plan to
the contrary, and to the extent permitted by applicable law (including Code Section 409A),
the Company may offset any amounts to be paid to a Participant (or, in the
event of the Participant’s death, to his beneficiary or estate) under the Plan
against any amounts that such Participant may owe to the Company or any
affiliate or subsidiary (including, without limitation, amounts owed pursuant
to Sections 4.6 and 4.7).


 


Section 14.             Furnishing Information.  A Participant will cooperate with the
Committee by furnishing any and all information requested by the Committee and
take such other actions as may be requested in order to facilitate the
administration of the Plan and the payments of benefits hereunder, including
but not limited to taking such physical examinations as the Committee may deem
necessary.


 


Section 15.             Governing Law.  The validity, construction and effect of the
Plan and any rules and regulations relating to the Plan shall be
determined in accordance with the laws of the State of Delaware and applicable
federal law, without reference to principles of conflict of laws which would
require application of the law of another jurisdiction.


 


Section 16.             Severability.  In the event that any one or more of the
provisions of this Plan shall be or become invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not be affected thereby.


 


Section 17.             Headings; Gender; Number.  The headings and captions herein are provided
for reference and convenience only, shall not be considered part of this Plan,
and shall not be employed in the construction of this Plan.  Except when otherwise indicated by the
context, words in the masculine gender used in the Plan shall include the
feminine gender, the singular shall include the plural, and the plural shall
include the singular.


 


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Section 18.             No Trust.  Neither the Plan nor any Incentive Award
shall create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Participant.  To the extent any Participant acquires a right
to receive payments from the Company in respect to any Incentive Award, such
right shall be no greater than the right of any unsecured general creditor of
the Company.


 


Section 19.             Code Section 162(m) and Code Section 409A.  It is the intention
that Incentive Awards qualify as “performance-based” compensation under Code Section 162(m),
and all payments made under the Plan be excluded from the deduction limitations
contained in Code Section 162(m). 
The Plan shall be construed at all times in favor of its meeting the “performance-based”
compensation exception contained in Code Section 162(m).  Accordingly, the Committee shall have no
discretion under this Plan (including, without limitation, with respect to adjustments
to EBITDA) if the exercise of such discretion or the ability to exercise such
discretion would cause such Incentive Award to fail to qualify as “performance-based”
compensation under Code Section 162(m). 
Therefore, if any Plan provision is found not to be in compliance with
the “performance-based” compensation exception contained in Code Section 162(m),
that provision shall be deemed amended so that the Plan does so comply to the
extent permitted by law and deemed advisable by the Committee.


 


To the extent any provision of the Plan or action by
the Committee would subject any Participant to liability for interest or
additional taxes under Code Section 409A, it will be deemed null and void,
to the extent permitted by law and deemed advisable by the Committee.  It is intended that the Plan will be exempt
from Code Section 409A, and the Plan shall be interpreted and construed on
a basis consistent with such intent.  The
Plan may be amended in any respect deemed necessary (including retroactively)
by the Committee in order to preserve exemption from Code Section 409A.  The preceding shall not be construed as a
guarantee of any particular tax effect for Plan payments.  A Participant is solely responsible and
liable for the satisfaction of all taxes and penalties that may be imposed on
such person in connection with any distributions to such person under the Plan
(including any taxes and penalties under Code Section 409A), and the
Company (or any affiliate or subsidiary) shall have no obligation to indemnify
or otherwise hold a Participant harmless from any or all of such taxes or
penalties.


 


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