Document:

ex10-2.htm

Exhibit 10.2

 

ANNEX B

LITHIA MOTORS, INC.

2013 DISCRETIONARY SUPPORT SERVICES VARIABLE

PERFORMANCE COMPENSATION PLAN

1.             Purpose.  Lithia Motors, Inc. (the “Company”) establishes the Lithia Motors, Inc. 2013 Discretionary Support Services Variable Performance Compensation (the “Plan”) with the intent of qualifying compensation paid under the Plan as “performance-based compensation” within the meaning of Section 162(m) of the Internal Revenue Code of 1986 (“Section 162(m)”) and the regulations promulgated thereunder.  The Plan shall be interpreted in a manner consistent with the foregoing intent.

2.             Administration.  The Plan shall be administered by the Compensation Committee (the “Committee”) of the Board of Directors of the Company, which shall be comprised solely of two or more “outside directors” as defined in regulations promulgated under Section 162(m).  The Committee may adopt guidelines to implement and administer the Plan.

3.             Plan Participants.  The participants in the Plan (the “Participants”) shall be the Chief Executive Officer (the “CEO”) of the Company and such other employees of the Company as may be designated in writing by the Committee at the time of the establishment of Performance Goals for any period.  Other employees of the Company may receive bonuses on terms similar to the terms of bonuses paid to Participants under the Plan, but those bonuses shall not be covered by the Plan and, therefore, shall not qualify as performance-based compensation under Section 162(m).

4.             Performance Goals.

(a)           To make an award under the Plan, the Committee shall, no later than the earlier of (i) 90 days after the beginning of a performance period or (ii) the date on which 25% of the period of service (as scheduled in good faith at the time the goals are established) has elapsed, establish in writing the objectives (“Performance Goals”) that must be satisfied by the Company or any subsidiary, division or other unit of the Company (“Business Unit”) during that performance period as a condition to the payment or accrual of a cash bonus for each Participant based on performance in that period.  The Committee shall also establish (i) the amounts, or the formula for determining the amounts, of cash bonuses to be paid or accrued based on achievement of the Performance Goals, and (ii) the timing of payment and any other conditions to payment of such amounts.  In establishing any Performance Goals, the Committee may, in its sole discretion, reserve the right to reduce the resulting cash bonuses prior to payment on such terms as determined by the Committee.

 

  

 

  

(b)           The Performance Goals for each performance period shall be one or more targeted levels of performance with respect to one or more of the following objective measures with respect to the Company or any Business Unit, and may be relative to any designated comparison group of companies: (i)  revenue, (ii) net margin, (iii) operating income, (iv) operating cash flow, (v) net income before interest, taxes, depreciation and amortization, (vi) net income before interest and taxes, (vii) net income before income taxes, (viii) net income, (ix) new or used vehicle unit or revenue growth rate (based on same-store growth rate), (x) fixed department revenue growth rate (based on same-store revenue growth rate), (xi) sales or service satisfaction scores (percent of same stores equaling or exceeding specified manufacturers’ criteria), (xii) sales responsibility performance (percent of same stores at or above market sales rate thresholds set by specified manufacturers), (xiii) financing and insurance revenue or revenue per vehicle, (xiv) service, body and parts revenue or revenue per vehicle, (xv) basic or diluted net income per share, (xvi) basic or diluted net income per share from continuing operations, (xvii) basic or diluted net income per share minus per share dividends and other shareholder distributions, (xviii) basic or diluted net income per share from continuing operations minus per share dividends and other shareholder distributions, (xix) basic or diluted net income per share from continuing operations as adjusted to eliminate the effects of asset impairment, gains and losses on the sale of real estate or stores, equity investments and related taxes or (xx) any of the foregoing before the effect of acquisitions, divestitures, accounting or tax changes, and restructuring and special charges (determined according to criteria established by the Committee).

5.             Computation of Bonus.  Following the conclusion of any performance year, prior to the payment of any cash bonuses under the Plan with respect to that performance period, the Committee shall certify in writing the attainment of the Performance Goals for the performance period and the calculation of the bonus amounts.  No bonus shall be paid or accrued if the related Performance Goal is not met.

6.             Maximum Bonus.  The cash bonus that may be paid or accrued for any Participant under the Plan in any calendar year with respect to performance of the Company in any fiscal year shall not exceed 150% of the Participant’s annual salary (based on salary up to $1,000,000).  The Committee and the Board of Directors of the Company retain discretion to reduce the amount of the attained variable compensation amounts for any reason.

7.             Clawback.  The Company requires reimbursement of any performance-based compensation awarded or paid to a Participant where: (a) the payment was predicated upon achieving financial results that were later the subject of a restatement of the Company’s financial statements and (b) a lower payment would have been made to the Participant based upon the restated financial results. In each case, the Company will, to the extent practicable, seek to recover from the Participant the amount by which the Participant’s award or payment for the relevant period exceeded the lower payment that would have been made based on the restated financial results.

8.             Amendment and Termination of Plan.  The Board may at any time amend or terminate the Plan, except that no amendment will be effective without approval by the Company’s shareholders if such approval is necessary to qualify amounts payable hereunder as performance-based compensation under Section 162(m).  Unless it is re-approved by the shareholders, the Plan shall terminate on the date of the first shareholder meeting that occurs in the fifth year after the year of the last re-approval by the shareholders.  No termination of the Plan shall affect Performance Goals and related awards established by the Committee prior to such termination.

 

  

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9.             No Right of Continued Employment.  Nothing in the Plan or any award pursuant to the Plan shall confer upon any person any right to be continued in the employment of the Company or any subsidiary.

10.           Governing Law.  The Plan shall be construed in accordance with and governed by the laws of the State of Oregon.

11.           Effective Date.  The Plan shall be effective upon approval by the shareholders of the Company.

 

 

3Exhibit 4.1.7

Exhibit 4.1.7

Sixth Supplemental Indenture
SIXTH SUPPLEMENTAL INDENTURE, dated as of March 8, 2013 (this “Supplemental Indenture”), among Dollar Thrifty Automotive Group, Inc., DTG Operations, Inc., Dollar Rent A Car, Inc., Thrifty, Inc., DTG Supply, Inc., Thrifty Car Sales, Inc., Thrifty Rent-A-Car System, Inc., TRAC Asia Pacific, Inc. and Thrifty Insurance Agency, Inc. (the “Subsidiary Guarantors”), The Hertz Corporation, a corporation duly organized and existing under the laws of the State of Delaware (together with its respective successors and assigns, the “Company”), Hertz Car Sales LLC, Hertz Claim Management Corporation, HCM Marketing Corporation, Hertz Entertainment Services Corporation, Hertz Equipment Rental Corporation, Hertz Local Edition Corp., Hertz Local Edition Transporting, Inc., Hertz Global Services Corporation, Hertz System, Inc., Hertz Technologies, Inc., Hertz Transporting, Inc., Smartz Vehicle Rental Corporation, Donlen Corporation, Cinelease Holdings, Inc., Cinelease, Inc. and Cinelease, LLC (collectively, the “Existing Guarantors”), and Wells Fargo Bank, National Association, as Trustee under the Indenture referred to below.
W I T N E S S E T H:
WHEREAS, the Company, the Existing Guarantors and the Trustee have heretofore become parties to an Indenture, dated as of September 30, 2010 (as amended, supplemented, waived or otherwise modified, the “Indenture”), providing for the issuance of the 7.50% Senior Notes due 2018 of the Company (the “Notes”);
WHEREAS, Section 1308 of the Indenture provides that the Company is required to cause the Subsidiary Guarantors to execute and deliver to the Trustee a supplemental indenture pursuant to which the Subsidiary Guarantors shall Guarantee the Company’s Subsidiary Guaranteed Obligations under the Notes pursuant to a Subsidiary Guarantee on the terms and conditions set forth herein and in Article XIII of the Indenture;
WHEREAS, each Subsidiary Guarantor desires to enter into this Supplemental Indenture for good and valuable consideration, including substantial economic benefit in that the financial performance and condition of such Subsidiary Guarantor is dependent on the financial performance and condition of the Company, the obligations hereunder of which such Subsidiary Guarantor has guaranteed, and on such Subsidiary Guarantor’s access to working capital through the Company’s access to revolving credit borrowings under the Senior Credit Agreements; and
WHEREAS, pursuant to Section 901 of the Indenture, the parties hereto are authorized to execute and deliver this Supplemental Indenture to amend the Indenture, without the consent of any Holder;
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Subsidiary Guarantors, the Company, the Existing Guarantors and the Trustee mutually covenant and agree for the benefit of the Holders of the Notes as follows:
1.  Defined Terms.  As used in this Supplemental Indenture, terms defined in the Indenture or in the preamble or recital hereto are used herein as therein defined.  The words “herein,” “hereof” and “hereby” and other words of similar import used in this Supplemental Indenture refer to this Supplemental Indenture as a whole and not to any particular Section hereof.
2.  Agreement to Guarantee.  Each Subsidiary Guarantor hereby agrees, jointly and severally with all other Subsidiary Guarantors and the Existing Guarantors and fully and unconditionally, to guarantee the Subsidiary Guaranteed Obligations under the Indenture and the Notes on the terms and subject to the conditions set forth in Article XIII of the Indenture and to be bound by (and shall be entitled to the benefits of) all other applicable provisions of the Indenture as a Subsidiary Guarantor.  
3.  Termination, Release and Discharge.  Each Subsidiary Guarantor’s Subsidiary Guarantee shall terminate and be of no further force or effect, and each Subsidiary Guarantor shall be released and discharged from all obligations in respect of such Subsidiary Guarantee, as and when provided in Section 1303 of the Indenture.
4.  Parties.  Nothing in this Supplemental Indenture is intended or shall be construed to give any Person, other than the Holders and the Trustee, any legal or equitable right, remedy or claim under or in respect of each Subsidiary Guarantor’s Subsidiary Guarantee or any provision contained herein or in Article XIII of the Indenture.
5.  Governing Law.  THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.  THE TRUSTEE, THE COMPANY, ANY OTHER OBLIGOR IN RESPECT OF THE NOTES AND (BY THEIR ACCEPTANCE OF THE NOTES) THE HOLDERS AGREE TO SUBMIT TO THE JURISDICTION OF ANY UNITED STATES FEDERAL OR STATE COURT LOCATED IN THE BOROUGH OF MANHATTAN, IN THE CITY OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SUPPLEMENTAL INDENTURE.
6.  Ratification of Indenture; Supplemental Indentures Part of Indenture.  Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect.  This Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of Notes heretofore or hereafter authenticated and delivered shall be bound hereby.  The Trustee makes no representation or warranty as to the validity or sufficiency of this Supplemental Indenture or as to the accuracy of the recitals to this Supplemental Indenture.
7.  Counterparts.  The parties hereto may sign one or more copies of this Supplemental Indenture in counterparts, all of which together shall constitute one and the same agreement.  The exchange of copies of this Supplemental Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Supplemental Indenture as to the parties hereto and may be used in lieu of the original Supplemental Indenture for all purposes.  Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.
8.  Headings.  The Section headings herein are for convenience of reference only and shall not be deemed to alter or affect the meaning or interpretation of any provisions hereof.

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first above written.

	
		
	DOLLAR THRIFTY AUTOMOTIVE GROUP, INC., as a Subsidiary Guarantor

	 

	

By:                 /s/ R. Scott Massengill

	 
	Name:   R. Scott Massengill

	 
	Title:     Assistant Treasurer

	
		
	DTG OPERATIONS, INC., as a Subsidiary Guarantor

	 

	

By:                 /s/ R. Scott Massengill

	 
	Name:   R. Scott Massengill

	 
	Title:     Assistant Treasurer

	
		
	DOLLAR RENT A CAR, INC., as a Subsidiary Guarantor

	 

	

By:                 /s/ R. Scott Massengill

	 
	Name:   R. Scott Massengill

	 
	Title:     Assistant Treasurer

	
		
	DTG SUPPLY, INC., as a Subsidiary Guarantor

	 

	

By:                 /s/ R. Scott Massengill

	 
	Name:   R. Scott Massengill

	 
	Title:     Assistant Treasurer

	
		
	THRIFTY CAR SALES, INC., as a Subsidiary Guarantor

	 

	

By:                 /s/ R. Scott Massengill

	 
	Name:   R. Scott Massengill

	 
	Title:     Assistant Treasurer

	
		
	TRAC ASIA PACIFIC, INC., as a Subsidiary Guarantor

	 

	

By:                 /s/ R. Scott Massengill

	 
	Name:   R. Scott Massengill

	 
	Title:     Assistant Treasurer

	
		
	THRIFTY INSURANCE AGENCY, INC., as a Subsidiary Guarantor

	 

	

By:                 /s/ R. Scott Massengill

	 
	Name:   R. Scott Massengill

	 
	Title:     Assistant Treasurer

	
		
	THRIFTY, INC., as a Subsidiary Guarantor

	 

	

By:                 /s/ R. Scott Massengill

	 
	Name:   R. Scott Massengill

	 
	Title:     Assistant Treasurer

	
		
	THRIFTY RENT-A-CAR SYSTEM, INC., as a Subsidiary Guarantor

	 

	

By:                 /s/ R. Scott Massengill

	 
	Name:   R. Scott Massengill

	 
	Title:     Assistant Treasurer

	
		
	THE HERTZ CORPORATION, as Issuer
DONLEN CORPORATION, as an Existing Guarantor

	 

	

By:                 /s/ R. Scott Massengill

	 
	Name:   R. Scott Massengill

	 
	Title:     Vice President and Treasurer

	 
	 

	HCM MARKETING CORPORATION, as an Existing Guarantor
   

	

By:                 /s/ R. Scott Massengill

	 
	Name:    R. Scott Massengill
Title:      President and Treasurer   

	 

	HERTZ CAR SALES LLC
CINELEASE, LLC
CINELEASE HOLDINGS, INC.
CINELEASE, INC.

	HERTZ ENTERTAINMENT SERVICES CORPORATION

	HERTZ CLAIM MANAGEMENT CORPORATION

	HERTZ EQUIPMENT RENTAL CORPORATION

	HERTZ LOCAL EDITION CORP.

	HERTZ LOCAL EDITION TRANSPORTING, INC.

	HERTZ GLOBAL SERVICES CORPORATION

	HERTZ SYSTEM, INC.

	HERTZ TECHNOLOGIES, INC.

	HERTZ TRANSPORTING, INC.

	SMARTZ VEHICLE RENTAL CORPORATION, each as an Existing Guarantor

	 

	

By:
	

/s/ R. Scott Massengill

	 
	Name:   R. Scott Massengill

	 
	Title:     Treasurer

	
		
	WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee

	 

	

By:                 /s/ Martin Reed   

	 
	Name:   Martin Reed

	 
	Title:     Vice President

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