Exhibit 10.39
HERTZ
GLOBAL HOLDINGS, INC.
SEVERANCE
PLAN FOR SENIOR EXECUTIVES
ARTICLE
I
BACKGROUND, PURPOSE AND TERM OF PLAN
Section 1.01 Purpose
of the Plan. The purpose of the Plan
is to provide Participants with certain compensation and benefits as set forth
in the Plan in the event the Participant’s employment with the Company or a
Subsidiary is terminated in a Qualifying Termination. The Plan is not intended to be an “employee
pension benefit plan” or “pension plan” within the meaning of Section 3(2) of
ERISA. Rather, this Plan is intended to
be a “welfare benefit plan” within the meaning of Section 3(1) of
ERISA and to meet the descriptive requirements of a plan constituting a
“severance pay plan” within the meaning of regulations published by the
Secretary of Labor at Title 29, Code of Federal Regulations, Section 2510.3-2(b).
Section 1.02 Term
of the Plan. The Plan shall
generally be effective as of the Effective Date and shall supersede any prior
plan, program or policy under which the Company or any Subsidiary provided
severance benefits to any Participant prior to the Effective Date of the
Plan. The Plan shall continue until
terminated pursuant to Article VII of the Plan.
ARTICLE
II
DEFINITIONS
Section 2.01 “Base
Salary” shall mean, in the case of a Participant, such Participant’s
highest annual base salary in effect at any time within the twelve month period
preceding the Participant’s Termination Date.
Section 2.02 “Board”
shall mean the Board of Directors of the Company, or any successor thereto.
Section 2.03 “Bonus”
shall mean, in the case of a Participant, the average annual bonus paid (or
awarded, if different) in respect of each of the three prior bonus years
(exclusive of any special or prorated bonuses).
If a Participant has less than three years of bonus history, “Bonus”
shall mean the average annual bonus of the actual years, provided that
if a Participant has not had an opportunity to earn or be awarded one full
year’s bonus as of his Termination Date, “Bonus” shall mean 100% of the
participant’s target bonus for the year in which the Termination Date occurs.
Section 2.04 “Cause”
shall mean a Participant’s (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 due to
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 by the Chief Executive Officer of the Company (the “CEO”) to
the Participant, (ii) engaging in willful and serious misconduct
that is injurious to the Company or any of its Subsidiaries, (iii) act
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 a felony
or a crime involving moral turpitude. A
termination for “Cause,” shall include a determination by the Plan
Administrator 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.
Section 2.05 “COBRA”
shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended, and the regulations thereunder.
Section 2.06 “Code”
shall mean the Internal Revenue Code of 1986, as amended, and the regulations
thereunder.
Section 2.07 “Committee”
shall mean the Compensation Committee of the Board or such other committee
appointed by the Board to assist the Company in making determinations required
under the Plan in accordance with its terms.
The Committee may delegate its authority under the Plan to an individual
or another committee.
Section 2.08 “Company”
shall mean Hertz Global Holdings, Inc. and any successor to its business
and/or assets as set forth in Section 10.05 that assumes and agrees to
perform this Plan by operation of law, or otherwise. Unless it is otherwise clear from the context,
Company shall generally include participating Subsidiaries.
Section 2.09 “Effective
Date” shall mean
, 2008.
Section 2.10 “ERISA” shall
mean the Employee Retirement Income Security Act of 1974, as amended, and
regulations thereunder.
Section 2.11 “Participant”
shall mean any senior executive of the Company designated by the Committee as
eligible to participate in the Plan.
Section 2.12 “Performance
Bonus” shall mean such performance bonuses, as applicable, under and in
accordance with the Company’s Annual Incentive Plan, as the
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same may be amended from
time to time, and any other performance bonus plan(s) that the Company may
adopt.
Section 2.13 “Permanent
Disability” shall mean a termination of employment by the Company or the
Participant based on medical opinion of a physician selected by the Participant
(and provided to the Plan Administrator) that the Participant has been unable
to discharge effectively his material duties with the Company for a period of
180 consecutive calendar days or longer; provided that with respect to
any payments that constitute deferred compensation subject to Section 409A
of the Code, “Disability” shall have the meaning set forth in Section 409A(a)(2)(c) of
the Code.
Section 2.14 “Plan”
shall mean this Hertz Global Holdings, Inc. Severance Plan for Senior
Executives as set forth herein, and as the same may from time to time be
amended.
Section 2.15 “Plan
Administrator” shall mean the individual(s) appointed by the Committee
to administer the terms of the Plan as set forth herein and if no individual is
appointed by the Committee to serve as the Plan Administrator for the Plan, the
Plan Administrator shall be the Senior Vice President of Human Resources (or
the equivalent). Notwithstanding the
preceding sentence, in the event the Plan Administrator is entitled to
Severance Benefits under the Plan, the Committee or its delegate shall act as
the Plan Administrator for purposes of administering the terms of the Plan with
respect to the Plan Administrator. The
Plan Administrator may delegate all or any portion of its authority under the
Plan to any other person(s).
Section 2.16 “Qualifying
Termination” shall mean a termination of the Participant’s employment
initiated by the Company or a Subsidiary for any reason other than Cause,
Permanent Disability or death. For the
avoidance of doubt, a Retirement shall not constitute a Qualifying Termination.
Section 2.17 “Release”
shall mean the Separation of Employment and General Release Agreement, which
shall include a written agreement to abide by the agreement to the
confidentiality, non-solicitation, and non-competition provisions in Article V
for the periods provided for herein, in the form attached hereto as Exhibit A;
provided that the Plan Administrator shall have the discretion to modify
the Release if necessary or appropriate under any applicable law to effect a
complete and total release of claims by the Participant as of the Termination
Date.
Section 2.18 “Restriction
Period” shall mean the greater of 12 months or the Severance Period, if
applicable.
Section 2.19 “Retirement”
shall mean a Participant’s voluntary termination of employment with the Company
under any of the Company’s retirement plans.
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Section 2.20 “Separation from
Service Date” shall mean, in the case of a Participant, the date of the
Participant’s “separation from service” within the meaning of Section 409A(a)(2)(i)(A) of
the Code and determined in accordance with the regulations promulgated under Section 409A
of the Code.
Section 2.21 “Severance Benefit”
shall mean the benefits that a Participant is eligible to receive pursuant to Article IV
of the Plan, except for those benefits described in Section 4.01 of the
Plan.
Section 2.22 “Severance Factor”
and “Severance Period” shall mean, in the case of a Participant, the
amount or period, as the case may be, set forth on Annex A opposite such
Participant’s position.
Section 2.23 “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.
Section 2.24 “Subsidiary” shall
mean any corporation in which the Company owns, directly or indirectly, stock
representing 50% or more of the combined voting power of all classes of stock
entitled to vote, and any other business organization, regardless of form, in
which the Company possesses, directly or indirectly, 50% or more of the total
combined equity interests in such organization.
Section 2.25 “Termination Date”
shall mean the date as of which the active employment of the Participant by the
Company and its Subsidiaries is severed.
ARTICLE
III
ELIGIBILITY FOR BENEFITS
Section 3.01 Eligibility. Each Participant in the Plan who incurs a
Qualifying Termination and who satisfies the conditions of Section 3.02
shall be eligible to receive the Severance Benefits described in the Plan,
except that any such Participant who is a party to an employment agreement or
Change in Control Severance Agreement (or similar agreement) with the Company
pursuant to which such Participant is entitled to severance benefits shall not
be eligible to receive the Severance Benefits described in the Plan.
Section 3.02 Conditions.
(a) Eligibility for any
Severance Benefits is expressly conditioned on (i) execution by the
Participant of the Release within 30 days after the Participant’s Termination
Date and (ii) compliance by the Participant with all the material
terms and conditions of such Release. If
the Participant has not fully
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complied with any of the applicable terms of Article V
and/or the Release, the Plan Administrator may deny unpaid Severance Benefits
or discontinue the payment of the Participant’s Severance Benefit and may
require the Participant, by providing at least 10 days’ prior written notice of
such repayment obligation to the Participant during which period the
Participant may cure such failure to comply (if capable of being cured), and if
not so cured the Participant shall be obligated to repay any portion of the
Severance Benefit already received under the Plan. If the Plan Administrator notifies a
Participant that repayment of all or any portion of the Severance Benefit
received under the Plan is required, such amounts shall be repaid within thirty
(30) calendar days of the date the written notice is sent. Any remedy under this subsection (a) shall
be in addition to, and not in place of, any other remedy, including injunctive
relief, that the Company may have.
(b) The
Plan Administrator shall determine a Participant’s eligibility to receive
Severance Benefits.
ARTICLE
IV
DETERMINATION OF BENEFITS
Section 4.01 Benefits
Upon Any Termination of Employment. In the event of any termination of
employment, regardless of whether the Participant is eligible for benefits
under this Plan, the Company shall pay or provide to the Participant the
following benefits, in each case to the
extent vested and payable as provided in each applicable plan: (a) all earned but unpaid
compensation through the Termination Date and (b) any other
payments or benefits pursuant to any other compensation plans, programs or
employment agreements then in effect.
Section 4.02 Severance
Benefits. The Severance Benefits to
be provided to each Participant who meets the requirements of the Plan (each an
“Eligible Participant”) shall be the following:
(a) a pro rata portion of
the Performance Bonus that would have been payable to the Eligible Participant,
pro rated based on the portion of the year ending on the Termination Date, such
pro rata amount to be paid at the same time as such bonuses are otherwise generally
paid to the Company’s executives and in any event, no later than March 15
of the year following the end of the performance period;
(b) an amount equal to (x) the
sum of the Eligible Participant’s Base Salary plus such Eligible Participant’s
Bonus, multiplied by (y) such Eligible Participant’s Severance
Factor, payable in equal installments over the Eligible Participant’s Severance
Period on the Company’s regular payroll cycles,
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commencing with the first payroll cycle ending after
the Release becomes effective;
(c) 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 such Eligible Participant’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 Termination Date occurs; and
(d) all medical, health and
accident insurance or other similar health care arrangements for the benefit of
such Eligible Participant and his dependants, at the same level and same cost
as in effect immediately prior to the Termination Date, through such Eligible
Participant’s Severance Period (or, if earlier, the date such Eligible
Participant becomes eligible for comparable benefits provided by a subsequent
employer).
Notwithstanding
the foregoing provisions of this Section 4.02, if, as of the Separation
from Service Date, the Eligible Participant 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
the Eligible Participant’s death, and (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,
the Eligible Participant’s death, the Company shall make a one-time, lump-sum
cash payment to the Eligible Participant in an amount equal to the sum of (x) the
amounts otherwise payable to the Eligible Participant under this Plan during
the period described in clause (1) above and (y) the amount of
interest on the foregoing at the applicable federal rate for instruments of
less than one year.
Section 4.03 Termination for
Cause. If any Participant’s
employment terminates on account of termination by the Company for Cause, the
Participant shall not be entitled to receive Severance Benefits under this Plan
except as provided under Section 4.01 and shall be entitled only to those
benefits that are legally required to be provided to the Participant. Notwithstanding any other provision of the
Plan to the contrary, if a Participant has engaged in conduct that constitutes
Cause at any time prior to the Participant’s Termination Date, the Plan
Administrator may by written notice to the Participant determine that any
Severance Benefit payable to the Participant under Section 4.02 of the
Plan shall immediately cease, and that the Participant shall be required to
return any Severance Benefits paid to the Participant prior to such
determination. The Company may withhold
paying Severance Benefits under the Plan pending resolution of a good faith
inquiry that could lead to a finding resulting in Cause. If the Company has offset other payments owed
to the Participant under any other plan or
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program, it may, in its
sole discretion, waive its repayment right solely with respect to the amount of
the offset so credited.
Section 4.04 Reduction of
Severance Benefits. The Plan
Administrator reserves the right to make deductions in accordance with
applicable law for the stated amount of monies owed to the Company by the
Participant or the value of Company property that the Participant has retained
in his/her possession. Any payment made
pursuant to the Plan shall be subject to applicable withholding obligations in
an amount sufficient to satisfy U.S. or foreign federal, provincial, state and
local or other applicable withholding tax requirements.
Section 4.05 Other Arrangements. The Severance Benefits under this Plan are
not additive or cumulative to severance or termination benefits that a
Participant 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 participating
in the Plan, each individual must expressly agree that this Plan supersedes all
prior agreements, and sets forth the entire Severance Benefit to which he or
she is entitled to while a Participant in the Plan. The provisions of this Plan may provide for
payments to the Participant 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 Plan 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 Plan without further
action by the Company or the Board.
However, if the Participant is a party to a Change in Control Agreement
(or similar agreement), such agreement, and not this Plan, shall apply under
the circumstances described therein.
Section 4.06 Termination
of Eligibility for Benefits. All
Participants shall cease to be eligible to participate in the Plan, and all
Severance Benefit payments shall cease upon the occurrence of the earlier of:
(a) Subject to Article VII,
termination or modification of the Plan; or
(b) Completion of payment
to the Participant of the Severance Benefit for which the Participant is
eligible under Article IV.
ARTICLE
V
CONFIDENTIALITY, COVENANT NOT TO COMPETE AND NOT TO SOLICIT
Section 5.01 Confidential
Information. At no time during the
term of Participant’s Employment or during the 24 month period following
Participant’s Termination Date, shall the Participant, without the prior
written consent of the Company, use, divulge, disclose or make accessible to
any other person, firm,
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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 the Participant to divulge, disclose or make accessible
such information. For purposes of this Section 5.01,
“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 Participant’s breach of the terms hereof) or known
to persons in the industry generally.
Section 5.02 Non-Competition. The Participant agrees that, during the term
of his or her employment with the Company, and thereafter during the
Restriction Period, he or she 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
car or equipment rental or comparable company, which competes with the
business, and for the customer base, of the Company (a “Competitive Business”). This Section 5.02 shall not be deemed to
restrict (a) a Participant who is a lawyer from working for or
being associated with a law firm as long as the Participant does not provide
legal services to a Competitive Business or (b) 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 Termination Date to enter) for so long as
the Participant’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).
Section 5.03 Non-Solicitation. The Participant agrees that, during the term
of his or her employment with the Company, and thereafter during the
Restriction Period, he or she 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 Participant’s Termination Date or at any time
during the twelve-month period preceding such date. This Section 5.03 shall not be deemed to
be violated solely by (a) placing an advertisement or other general
solicitation or (b) serving as a reference.
Section 5.04 Non-Disparagement. The Participant agrees that he or she shall
not at any time disparage the Company or any officer or employee of the
Company, and shall not, without the prior written consent of the Company, make
any written or oral statement concerning the termination of his or her
employment or any circumstances,
8
terms or conditions
relating thereto, which statement is reasonably likely to become generally
known to the public. Nothing in this Section 5.04
shall prevent the lawful filing or prosecution of any claim against the Company
in any judicial, arbitration, governmental, or other appropriate forum for
adjudication of disputes, any response or disclosure by the Participant
compelled by legal process or required by applicable law or any bona-fide
exercise by the Participant of any shareholder rights he or she may otherwise
have.
Section 5.05 Reasonableness. In the event the provisions of this Article V
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.
Section 5.06 Acknowledgment. The Plan Administrator shall require, as a
condition to a Participant’s participation in the Plan, that such Participant
enter into a written acknowledgment of the terms of this Article V (and
such other provisions hereof as the Plan Administrator determines appropriate),
in such form as the Plan Administrator shall determine appropriate from time to
time.
Section 5.07 Equitable
Relief.
(a) By participating in the
Plan, the Participant acknowledges that the restrictions contained in this Article V
are reasonable and necessary to protect the legitimate interests of the
Company, its Subsidiaries and its affiliates, that the Company would not have
established this Plan in the absence of such restrictions, and that any
violation of any provision of this Article V will result in irreparable
injury to the Company. By agreeing to
participate in the Plan, the Participant represents that his or her experience
and capabilities are such that the restrictions contained in this Article V
will not prevent the Participant from obtaining employment or otherwise earning
a living at the same general level of economic benefit as is currently the
case. The Participant further represents
and acknowledges that (i) he or she has been advised by the Company
to consult his or her own legal counsel in respect of this Plan, and (ii) that
he or she has had full opportunity, prior to agreeing to participate in this
Plan, to review thoroughly this Plan with his or her counsel.
(b) The Participant agrees
that the Company shall be entitled to preliminary and permanent injunctive
relief, without the necessity of proving actual damages or posting any bond,
and a court or arbitration may also order an equitable accounting of all
earnings, profits and other benefits arising from any violation of this Article V,
which rights shall be cumulative and in addition to any other rights or
remedies to which the Company may be entitled.
9
(c) The Participant and the
Company irrevocably and unconditionally (i) agree that any suit,
action or other legal proceeding arising out of this Article V, including
without limitation, any action commenced by the Company for preliminary and
permanent injunctive relief or other equitable relief, may be brought in the
United States District Court for the District of New Jersey, or if such court
does not have jurisdiction or will not accept jurisdiction, in any court of
general jurisdiction in New Jersey, (ii) consent to the
non-exclusive jurisdiction of any such court in any such suit, action or
proceeding, and (iii) waive any objection which Participant may
have to the laying of venue of any such suit, action or proceeding in any such
court.
Section 5.08 Survival of
Provisions. The obligations contained
in this Article V shall survive the termination of Participant’s
employment with the Company or a Subsidiary and shall be fully enforceable
thereafter.
ARTICLE
VI
THE PLAN ADMINISTRATOR
Section 6.01 Authority and Duties. It shall be the duty of the Plan
Administrator, on the basis of information supplied to it by the Company and
the Committee, to properly administer the Plan.
The Plan Administrator shall have the full power, authority and
discretion to construe, interpret and administer the Plan, to make factual
determinations, to correct deficiencies therein, and to supply omissions. All decisions, actions and interpretations of
the Plan Administrator shall be subject only to determinations by the Named
Appeals Fiduciary (as defined in Section 9.04), with respect to denied
claims for Severance Benefits, and in the event of any judicial or arbitral
proceeding shall be subject to de novo review.
The Plan Administrator may adopt such rules and regulations and may
make such decisions as it deems necessary or desirable for the proper
administration of the Plan.
Notwithstanding anything else herein to the contrary, all decisions,
actions and interpretations of the Named Appeals Fiduciary shall be subject to
de novo review by the arbitrator pursuant to Section 9.05 hereof.
Section 6.02 Compensation of the
Plan Administrator. The Plan
Administrator shall receive no compensation for services as such. However, all reasonable expenses of the Plan
Administrator shall be paid or reimbursed by the Company upon proper
documentation. The Plan Administrator
shall be indemnified by the Company against personal liability for actions
taken in good faith in the discharge of the Plan Administrator’s duties.
Section 6.03 Records, Reporting
and Disclosure. The Plan Administrator
shall keep a copy of all records relating to the payment of Severance Benefits
to Participants and former Participants and all other records necessary for the
proper operation of the Plan. All Plan
records shall be made available to the Committee, the Company and to
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each Participant for
examination during business hours except that a Participant shall examine only
such records as pertain exclusively to the examining Participant and to the Plan. The Plan Administrator shall prepare and
shall file as required by law or regulation all reports, forms, documents and
other items required by ERISA, the Code, and every other relevant statute, each
as amended, and all regulations thereunder (except that the Company, as payor
of the Severance Benefits, shall prepare and distribute to the proper
recipients all forms relating to withholding of income or wage taxes, Social
Security taxes, and other amounts that may be similarly reportable).
ARTICLE
VII
AMENDMENT, TERMINATION AND DURATION
Section 7.01 Amendment,
Suspension and Termination. Except
as otherwise provided in this Section 7.01, the Board or the Committee or
the delegee of the Board or the Committee shall have the right, at any time and
from time to time, to amend, suspend or terminate the Plan in whole or in part,
for any reason or without reason, and without either the consent of or the
prior notification to any Participant, by a formal written action. No such amendment shall give the Company the
right to recover any amount paid to a Participant prior to the date of such
amendment or to cause the cessation of Severance Benefits already approved for
a Participant who has executed a Release as required under Section 3.02.
Section 7.02 Duration. Unless terminated sooner by the Board or the
Committee or the delegee of the Board or the Committee in accordance with Section 7.01,
the Plan shall continue in full force and effect until termination of the Plan
pursuant to Section 7.01.
ARTICLE
VIII
DUTIES
OF THE COMPANY, THE COMMITTEE AND THE PLAN ADMINISTRATOR
Section 8.01 Records. The Company or a Subsidiary thereof shall
supply to the Committee and the Plan Administrator, as the case may be, all
records and information necessary to the performance of the Committee’s and the
Plan Administrator’s duties.
Section 8.02 Payment. Payments of Severance Benefits to
Participants shall be made in such amount as determined by the Committee under Article IV,
from the Company’s general assets or from a supplemental unemployment benefits
trust, in accordance with the terms of the Plan, as directed by the Committee.
Section 8.03 Discretion. Any decisions, actions or interpretations to
be made under the Plan by the Board, the Committee and the Plan Administrator,
acting on behalf
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of either, (i) shall
be made in each of their respective sole discretion, not in any fiduciary
capacity, and (ii) need not be uniformly applied to similarly
situated individuals. Notwithstanding
anything else herein to the contrary, all decisions, actions and
interpretations of the Plan Administrator and the Named Appeals Fiduciary shall
be accorded deference by the arbitrator pursuant to Section 9.05 hereof
and by a court of competent jurisdiction entering the award of such arbitrator,
in each case to the maximum extent permitted by applicable law.
ARTICLE
IX
CLAIMS PROCEDURES
Section 9.01 Claim. Each Participant under this Plan may contest
the administration of the Severance Benefits awarded by completing and filing
with the Plan Administrator a written request for review in the manner
specified by the Plan Administrator. No
person may bring an action for any alleged wrongful denial of Plan benefits in
a court of law unless the claims procedures described in this Article IX
are exhausted and a final determination is made by the Plan Administrator
and/or the Named Appeals Fiduciary.
Section 9.02 Initial
Claim. Before the date on which
payment of a Severance Benefit occurs, any claim relating to the administration
of such Severance Benefit must be supported by such information as the Plan
Administrator deems relevant and appropriate.
In the event that any such claim is denied in whole or in part, the
terminated Participant or his or her beneficiary (“Claimant”) whose
claim has been so denied shall be notified of such denial in writing by the
Plan Administrator within ninety (90) days after the receipt of the claim for
benefits. This period may be extended an
additional ninety (90) days if the Plan Administrator determines such extension
is necessary and the Plan Administrator provides notice of extension to the
Claimant prior to the end of the initial ninety (90) day period. The notice advising of the denial shall (i) specify
the reason or reasons for denial, (ii) make specific reference to
the Plan provisions on which the determination was based, (iii) describe
any additional material or information necessary for the Claimant to perfect
the claim (explaining why such material or information is needed), and (iv) describe
the Plan’s review procedures and the time limits applicable to such procedures,
including a statement of the Claimant’s right to bring a civil action under Section 502(a) of
ERISA following an adverse benefit determination on review.
Section 9.03 Appeals
of Denied Administrative Claims. All
appeals shall be made by the following procedure:
(a) A Claimant whose claim
has been denied shall file with the Plan Administrator a notice of appeal of
the denial. Such notice shall be filed
within sixty (60) calendar days of notification by the Plan Administrator of
the denial of
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a claim, shall be made in writing, and shall set forth
all of the facts upon which the appeal is based. Appeals not timely filed shall be barred.
(b) The
Named Appeals Fiduciary shall consider the merits of the Claimant’s written
presentations, the merits of any facts or evidence in support of the denial of
benefits, and such other facts and circumstances as the Named Appeals Fiduciary
shall deem relevant.
(c) The
Named Appeals Fiduciary shall render a determination upon the appealed claim
which determination shall be accompanied by a written statement as to the
reasons therefor. The determination
shall be made to the Claimant within sixty (60) days of the Claimant’s request
for review, unless the Named Appeals Fiduciary determines that special
circumstances require an extension of time for processing the claim. In such case, the Named Appeals Fiduciary
shall notify the Claimant of the need for an extension of time to render its
decision prior to the end of the initial sixty (60) day period, and the Named
Appeals Fiduciary shall have an additional sixty (60) day period to make its
determination. If the determination is
adverse to the Claimant, the notice shall (i) provide the reason or
reasons for denial, (ii) make specific reference to the Plan
provisions on which the determination was based, (iii) include a
statement that the Claimant is entitled to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, records and other
information relevant to the Claimant’s claim for benefits, and (iv) state
that the Claimant has the right to bring an action under Section 502(a) of
ERISA, and such determination shall be subject to de novo review by the
arbitrator as provided in Section 9.05 hereof.
Section 9.04 Appointment
of the Named Appeals Fiduciary. The
“Named Appeals Fiduciary” shall be the person or persons named as such by the
Board or Committee, or, if no such person or persons be named, then the person
or persons named by the Plan Administrator as the Named Appeals Fiduciary. Named Appeals Fiduciaries may at any time be
removed by the Board or Committee, and any Named Appeals Fiduciary named by the
Plan Administrator may be removed by the Plan Administrator. All such removals may be with or without
cause and shall be effective on the date stated in the notice of removal. The Named Appeals Fiduciary shall be a “Named
Fiduciary” within the meaning of ERISA, and, unless appointed to other
fiduciary responsibilities, shall have no authority, responsibility, or
liability with respect to any matter other than the proper discharge of the
functions of the Named Appeals Fiduciary as set forth herein.
Section 9.05 Arbitration;
Expenses. In the event of any
dispute under the provisions of this Plan, 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
Employer and the Participant) in accordance with the
13
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 Plan or to award a remedy for a dispute involving
this Plan other than a benefit specifically provided under or by virtue of the
Plan. If the Participant substantially
prevails on any material issue that is the subject of such arbitration or
lawsuit, the Company shall be responsible for all of the fees of the American
Arbitration Association and the arbitrator and any expenses relating to the
conduct of the arbitration (including the Company’s and Participant’s
reasonable attorneys’ fees and expenses).
Otherwise, each party shall be responsible for its own expenses relating
to the conduct of the arbitration (including reasonable attorneys’ fees and
expenses) and shall share the fees of the American Arbitration Association.
ARTICLE
X
MISCELLANEOUS
Section 10.01 Nonalienation of
Benefits. None of the payments,
benefits or rights of any Participant shall be subject to any claim of any
creditor of any Participant, and, in particular, to the fullest extent
permitted by law, all such payments, benefits and rights shall be free from
attachment, garnishment (if permitted under applicable law), trustee’s process,
or any other legal or equitable process available to any creditor of such
Participant. No Participant shall have
the right to alienate, anticipate, commute, plead, encumber or assign any of
the benefits or payments that he may expect to receive, contingently or
otherwise, under this Plan, except for the designation of a beneficiary as
contemplated in Section 10.02.
Section 10.02 Beneficiary
Designation. Each Participant under
the Plan may from time to time name any beneficiary or beneficiaries (who may
be named contingently or successively) to whom any benefit under the Plan is to
be paid or by whom any right under the Plan is to be exercised in case of his
or her death. Each designation will
revoke all prior designations by the same Participant, shall be in a form prescribed
by the Plan Administrator, and will be effective only when filed by the
Participant in writing with the Plan Administrator during his lifetime. In the absence of any such designation,
benefits remaining unpaid at the Participant’s death shall be paid to or
exercised by the Participant’s surviving spouse, if any, or otherwise to or by
his or her estate.
Section 10.03 Notices. All notices and other communications required
hereunder shall be in writing and shall be delivered personally or mailed by
registered or certified mail, return receipt requested, or by overnight express
courier service. In the case of the
14
Participant, mailed
notices shall be addressed to him or her at the home address that he or she
most recently communicated to the Company in writing. In the case of the Company, mailed notices
shall be addressed to the Plan Administrator, with copies to the Senior Vice
President, Human Resources and the General Counsel of the Company.
Section 10.04 409A Compliance. The Plan is intended to be administered in a
manner consistent with the requirements, where applicable, of Section 409A
of the Code. Where reasonably possible
and practicable, the Plan shall be administered in a manner to avoid the
imposition on Participants of immediate tax recognition and additional taxes
pursuant to such Section 409A.
Notwithstanding the foregoing, neither the Company nor the Plan
Administrator shall have any liability to any person in the event such Section 409A
applies to any such Award in a manner that results in adverse tax consequences
for the Participant or any of his beneficiaries or transferees.
Section 10.05 Successors and Assigns. The rights under this Plan are personal to
the Participant and without the prior written consent of the Company shall not
be assignable by the Participant otherwise than by will or the laws of descent
and distribution. This Plan shall inure
to the benefit of and be enforceable by the Participant’s legal representatives. This Plan shall inure to the benefit of and
be binding upon the Company and its successors and assigns. 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
assume expressly and agree to perform this Plan in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place (with a copy of such assumption provided to the
Participant).
Section 10.06 No Impact On Benefits. Except as may otherwise be specifically
stated under any employee benefit plan, policy or program, no amount payable
under the Plan shall be treated as compensation for purposes of calculating a
Participant’s right under any such plan, policy or program.
Section 10.07 Timing of
Reimbursements; Effect on Other Payments.
Except as otherwise provided in this Plan, no Participant shall be
entitled to any cash payments or other severance benefits under any of the
Company’s then current severance pay policies for a termination that is covered
by this Plan for the Participant.
Anything in this Plan to the contrary notwithstanding, no reimbursement
payable to Participant pursuant to any provisions of this Plan or pursuant to
any plan or arrangement of the Company covered by this Plan 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.
15
Section 10.08 No
Mitigation. A Participant shall not
be required to mitigate the amount of any Severance Benefit provided for in
this Plan by seeking other employment or otherwise, nor shall the amount of any
Severance Benefit provided for herein be reduced by any compensation earned by
other employment or otherwise or subject to offset except as otherwise
expressly provided for herein.
Section 10.09 No
Contract of Employment. Neither the
establishment of the Plan, nor any modification thereof, nor the creation of
any fund, trust or account, nor the payment of any benefits shall be construed
as giving any Participant or any person whosoever, the right to be retained in
the service of the Company.
Section 10.10 Severability
of Provisions. If any provision of
this Plan shall be held invalid or unenforceable by a court of competent
jurisdiction, such invalidity or unenforceability shall not affect any other
provisions hereof, and this Plan shall be construed and enforced as if such
provisions had not been included.
Section 10.11 Heirs,
Assigns, and Personal Representatives.
This Plan shall be binding upon the heirs, executors, administrators,
successors and assigns of the parties, including each Participant, present and
future.
Section 10.12 Headings
and Captions. The headings and
captions herein are provided for reference and convenience only, shall not be
considered part of the Plan, and shall not be employed in the construction of
the Plan.
Section 10.13 Gender
and Number. Where the context
admits, words in any gender shall include any other gender, and, except where
otherwise clearly indicated by context, the singular shall include the plural,
and vice versa.
Section 10.14 Unfunded
Plan. The Plan shall not be
funded. No Participant shall have any
right to, or interest in, any assets of the Company that may be applied by the
Company to the payment of Severance Benefits.
Section 10.15 Payments
to Incompetent Persons. Any benefit
payable to or for the benefit of a minor, an incompetent person or other person
incapable of receipting therefor shall be deemed paid when paid to such person’s
guardian or to the party providing or reasonably appearing to provide for the
care of such person, and such payment shall fully discharge the Company, the
Committee and all other parties with respect thereto.
Section 10.16 Lost
Payees. A benefit shall be deemed
forfeited if the Plan Administrator is unable to locate a Participant to whom a
Severance Benefit is due. Such Severance
Benefit shall be reinstated if application is made by the Participant for the
forfeited Severance Benefit while this Plan is in operation.
16
Section 10.17 Controlling
Law. This Plan shall be construed
and enforced according to the laws of the State of New Jersey to the extent not
superseded by Federal law.
17
Annex A
Position
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Severance Factor
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Severance Period
|
|
|
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Business Leads
|
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2.0
|
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24 months
|
|
|
|
|
|
Chief Financial Officer
|
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1.5
|
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18 months
|
|
|
|
|
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Senior Vice
Presidents and Executive Vice President, Global Supply Chain
|
|
1.5
|
|
18 months
|
Exhibit A
SEPARATION AGREEMENT
and
GENERAL RELEASE OF ALL CLAIMS
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,
Executive is a participant in the Hertz Global Holdings, Inc. Severance
Plan for Senior Executives (the “Plan”);
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 Plan, 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 Plan, which Executive and the 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 Section 4 of
the Plan, 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 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 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,
2
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 Plan, 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.
2. Executive
shall return to the Companies all Company property and Confidential Information
(as defined in the Plan) 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
3
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 Plan for 24 months following Executive’s separation of
employment, the non-competition and non-solicitation covenants in the Plan for
the greater of 12 months or the Severance Period (as defined in the Plan) and
the non-disparagement covenant in the Plan at all times.
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
4
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 Plan.
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.
5
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 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
6
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.
|
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Date:
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EXECUTIVE
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THE HERTZ CORPORATION
|
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HERTZ GLOBAL HOLDINGS,
INC.
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By:
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By:
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Date:
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Date:
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7