<PAGE> 1
Pursuant to Rule 424(b)(5)
Registration No. 33-62902
PROSPECTUS SUPPLEMENT
(To Prospectus dated June 9, 1994)
(HERTZ LOGO)
$100,000,000
THE HERTZ CORPORATION
7 3/8% SENIOR NOTES DUE JUNE 15, 2001
---------------------------
Interest on the 7 3/8% Senior Notes due June 15, 2001 (the "Notes") is
payable semiannually on June 15 and December 15 of each year, beginning December
15, 1994. The Notes will not be redeemable prior to maturity and will not be
subject to any sinking fund. The Notes will be represented by a Global Note (as
defined herein) registered in the name of The Depository Trust Company (the
"Depository") or its nominee. Interests in the Global Note will be shown on, and
transfers thereof will be effected only through, records maintained by the
Depository and its participants. Except as described herein, Notes in definitive
form will not be issued. See "Description of Notes."
Settlement for the Notes will be made in immediately available funds. So
long as the Notes are represented by the Global Note registered in the name of
the Depository or its nominee, the Notes will trade in the Depository's Same-Day
Funds Settlement System, and secondary market trading activity in the Notes will
therefore settle in immediately available funds. So long as the Notes are
represented by the Global Note, all payments of principal and interest will be
made by The Hertz Corporation (the "Corporation") in immediately available
funds. See "Description of Notes -- Same-Day Settlement and Payment" in this
Prospectus Supplement.
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) CORPORATION(1)(3)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note................................ 99.757% .375% 99.382%
- -------------------------------------------------------------------------------------------------
Total................................... $99,757,000 $375,000 $99,382,000
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from June 16, 1994 to date of delivery.
(2) The Corporation has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(3) Before deducting expenses payable by the Corporation.
---------------------------
The Notes offered by this Prospectus Supplement are offered by the
Underwriters subject to prior sale, withdrawal, cancellation or modification of
the offer without notice, to delivery to and acceptance by the Underwriters and
to certain further conditions. It is expected that delivery of the Global Note
will be made in book-entry form only through the facilities of the Depository on
or about June 16, 1994.
---------------------------
LEHMAN BROTHERS
BEAR, STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
June 9, 1994
<PAGE> 2
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
RECENT DEVELOPMENTS
In March 1994, Ford Motor Company ("Ford") acquired the Corporation's
common stock owned by Commerzbank Aktiengesellschaft. On April 29, 1994, the
Corporation redeemed the preferred and common stock of the Corporation owned by
AB Volvo, borrowing the funds to pay for the redemption, and Ford purchased all
of the common stock of the Corporation owned by Park Ridge Limited Partnership.
In addition, on such date, a subordinated promissory note of the Corporation
held by Ford Motor Credit Company ("FMCC") was exchanged for an equivalent
amount of preferred stock of the Corporation.
On June 8, 1994, the Corporation and Ford entered into a revolving loan
agreement under which Hertz may borrow from Ford from time to time in amounts of
up to $250 million outstanding at any one time. Obligations of the Corporation
under the agreement would rank pari passu with the Corporation's Senior Debt
Securities. This agreement by its terms expires on June 30, 1999, on which date
any amounts then outstanding thereunder are required to be repaid.
Currently, 100% of the outstanding common stock of the Corporation is owned
by Ford and 100% of the outstanding preferred stock of the Corporation is owned
by FMCC. The Notes will not be obligations of, or guaranteed by, either
stockholder of the Corporation. The terms of the Corporation's debt agreements
limit the payment of cash dividends. At March 31, 1994, $50 million of
consolidated shareholders' equity was free of such limitations.
DESCRIPTION OF NOTES
GENERAL
The Notes are to be issued as a series of Senior Debt Securities under the
Indenture, dated as of April 1, 1986, as amended by a Supplemental Indenture
dated as of April 2, 1990 (the "Indenture") between the Corporation and Chemical
Bank, successor by merger to Manufacturers Hanover Trust Company (the
"Trustee"), which is more fully described in the accompanying Prospectus.
The Notes will bear interest at an annual rate of 7 3/8%. Interest on the
Notes will accrue from June 16, 1994 and will be payable semiannually on each
June 15 and December 15 commencing December 15, 1994, to the persons in whose
names the Notes are registered on the June 1 and December 1 next preceding such
June 15 and December 15, respectively. Principal and interest payable with
respect to certificated Notes, if any, will be payable at an office to be
maintained by the Corporation in The City of New York, except that, at the
option of the Corporation, interest payable with respect to such certificated
Notes may be paid by check mailed to the person entitled thereto.
For purposes of the Notes, it shall be an additional Event of Default, as
defined in the Indenture, if Ford fails to own, directly or indirectly, 100% of
the outstanding voting stock of the Corporation.
The Notes will not be subject to redemption prior to maturity and are not
entitled to any sinking fund. Beneficial interests in the Notes may be acquired,
or subseqently transferred, only in denominations of $1,000 and integral
multiples thereof.
The Notes are a new issue of securities with no established trading market
and will not be listed on any securities exchange. No assurance can be given as
to the existence or liquidity of a secondary market for the Notes.
S-2
<PAGE> 3
BOOK-ENTRY
Upon issuance, all Notes will be represented by one or more fully
registered global securities.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Global Notes will be made by the Underwriters in
immediately available funds. All payments of principal and interest on the Notes
will be made by the Corporation in immediately available funds so long as the
Notes are maintained in book-entry form.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearing house or next-day funds. In contrast, the Notes
will trade in the Depository's Same-Day Funds Settlement System and secondary
trading activity in the Notes will therefore be required by the Depository to
settle in immediately available funds. No assurance can be given as to the
effect, if any, of settlement in immediately available funds on trading activity
in the Notes.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement, dated as of June 9, 1994 (the "Underwriting Agreement"), the
Corporation has agreed to sell to each of the underwriters named below (the
"Underwriters"), and each of the Underwriters has severally agreed to purchase,
the principal amount of the Notes set forth opposite its name below.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
NAME OF UNDERWRITER OF NOTES
- --------------------------------------------------------------------------- ----------------
<S> <C>
Lehman Brothers Inc........................................................ $ 50,000,000
Bear, Stearns & Co. Inc.................................................... 25,000,000
Donaldson, Lufkin & Jenrette Securities Corporation........................ 25,000,000
--------------
Total................................................................. $100,000,000
=============
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are obligated to take and pay for all of the Notes if any are
taken.
The Underwriters initially propose to offer the Notes directly to the
public at the public offering price set forth on the cover page of this
Prospectus Supplement and to certain dealers at such price less a concession not
in excess of .350% of the principal amount of the Notes. The Underwriters may
allow, and such dealers may reallow, a discount not in excess of .250% of the
principal amount of the Notes to certain other dealers. After the initial public
offering, the public offering price and such concessions may be changed.
The Corporation does not intend to apply for listing of the Notes on a
national securities exchange, but has been advised by the Underwriters that they
intend to make a market in the Notes. The Underwriters are not obligated,
however, to make a market in the Notes and may discontinue market making at any
time without notice. No assurance can be given as to the liquidity of the
trading market for the Notes.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
In the ordinary course of their respective businesses, the Underwriters and
their respective affiliates have engaged and may in the future engage in
investment banking and/or commercial banking transactions with the Corporation
and its affiliates.
S-3
<PAGE> 4
PROSPECTUS [LOGO]
THE HERTZ CORPORATION
DEBT SECURITIES
------------------------
The Hertz Corporation (the "Corporation") may offer from time to time in
one or more series its unsecured debt securities (the "Debt Securities"), which
may be senior (the "Senior Debt Securities"), senior subordinated (the "Senior
Subordinated Debt Securities") or junior subordinated (the "Junior Subordinated
Debt Securities") in priority of payment. The aggregate offering price of Debt
Securities offered hereby will not exceed $100,000,000. The Debt Securities may
be offered as separate series in amounts, at prices and on terms to be
determined at the time of sale and to be set forth in supplements to this
Prospectus.
The Debt Securities may be denominated in and sold for U.S. dollars,
foreign currency or ECU, and principal of and any interest on the Debt
Securities may likewise be payable in U.S. dollars, foreign currency or ECU. The
currency for which the Debt Securities may be purchased and the currency in
which principal of and any interest on the Debt Securities may be payable will
be specifically designated by the Corporation. The specific designation,
priority of payment, aggregate principal amount, authorized denominations,
maturity, rate or method of calculation and time of payment of any interest,
purchase price, any redemption terms, other special terms, and any listing on a
securities exchange of the Debt Securities in respect of which this Prospectus
is being delivered, and the net proceeds to the Corporation from the sale
thereof, will be set forth in an accompanying Prospectus Supplement (the
"Prospectus Supplement").
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
------------------------
The Debt Securities will be sold directly or through agents designated from
time to time or through underwriters or dealers or a group of underwriters. If
agents of the Corporation or underwriters are involved in the sale of the Debt
Securities in respect of which this Prospectus is being delivered, the names of
such agents or underwriters and any applicable commissions or discounts shall be
set forth in the Prospectus Supplement with respect to such Debt Securities.
June 9, 1994
<PAGE> 5
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and in accordance therewith
files reports and other information with the Securities and Exchange Commission
(the "Commission"). Reports and other information filed by the Corporation can
be inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 5th Street, N.W., Washington, D.C. 20549, and
at the following Regional Offices of the Commission: Chicago Regional Office,
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60621; and New York Regional Office, Seven World Trade Center, New
York, New York 10048. Copies of such materials can be obtained from the Public
Reference Section of the Commission at Judiciary Plaza, 450 5th Street, N.W.,
Washington, D.C. 20549 at prescribed rates. Copies of such materials may also be
inspected and copied at the offices of the New York Stock Exchange, Inc., 20
Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Corporation's Annual Report on Form 10-K for the year ended December
31, 1993, its Quarterly Report on Form 10-Q for the quarter ended March 31, 1994
and the Current Reports on Form 8-K dated February 3, 1994, February 9, 1994 and
April 5, 1994 are hereby incorporated by reference into this Prospectus.
All documents subsequently filed by the Corporation pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of the
offering of the Debt Securities shall be deemed to be incorporated by reference
in this Prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus and the Prospectus Supplement to the extent that
a statement contained herein, therein or in any other subsequently filed
document which also is incorporated or deemed to be incorporated by reference
herein modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus or the Prospectus Supplement.
The Corporation will provide without charge to each person to whom this
Prospectus is delivered, on written or oral request of such person, a copy
(without exhibits) of any or all documents incorporated by reference into this
Prospectus. Requests for such copies should be directed to The Hertz
Corporation, Attention: Investor Relations, at its mailing address or its
telephone number.
The mailing address of the Corporation's principal executive office is 225
Brae Boulevard, Park Ridge, New Jersey 07656-0713 and its telephone number is
(201) 307-2000.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENT
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED. THE DELIVERY OF THIS PROSPECTUS AND ANY
PROSPECTUS SUPPLEMENT AT ANY TIME DOES NOT IMPLY THAT INFORMATION HEREIN OR
THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF ANY PROSPECTUS
SUPPLEMENT.
2
<PAGE> 6
THE CORPORATION
The Corporation and its subsidiaries ("Hertz"), affiliates, independent
licensees and associates are engaged principally in the business of renting
automobiles and renting and leasing trucks, without drivers, to customers in the
United States and in over 140 foreign countries. Collectively, they operate what
the Corporation believes is the largest rent a car business in the world and one
of the largest one-way truck rental businesses in the United States. In
addition, through its wholly-owned subsidiary, Hertz Equipment Rental
Corporation ("HERC"), the Corporation operates what it believes to be the
largest rental, lease and sale of construction and materials handling equipment
business in the United States. Other activities of Hertz include the sale of its
used vehicles; the leasing of automobiles, primarily in Europe, Australia and
New Zealand; operating car dealerships in Belgium; and providing claim
management and telecommunication services in the United States.
The Corporation, which was incorporated in Delaware in 1967, is a successor
to corporations which were engaged in the automobile and truck leasing and
rental business since 1924. UAL Corporation ("UAL") (formerly Allegis
Corporation) purchased all of the Corporation's outstanding capital stock from
RCA Corporation ("RCA") on August 30, 1985. Park Ridge Corporation ("Park
Ridge") purchased all of the Corporation's outstanding capital stock from UAL on
December 30, 1987. On July 19, 1993, Park Ridge (which had no material assets
other than the Corporation) was merged with and into the Corporation, with the
prior stockholders of Park Ridge becoming the stockholders of the Corporation.
USE OF PROCEEDS
The net proceeds from the sale of the Debt Securities will be added to the
general funds of the Corporation. It is anticipated that the proceeds will be
used for general corporate purposes and to reduce short-term borrowings. The
Corporation expects to issue additional long-term and short-term debt, subject
to the covenants contained in its debt agreements, and the proportionate amounts
of each can be expected to vary from time to time as a result of business
requirements, market conditions and other factors. At March 31, 1994, the
Corporation was permitted to issue up to an additional $1,401 million of senior
debt and an additional $238 million of senior subordinated debt under the most
restrictive covenants contained in its existing financing agreements.
3
<PAGE> 7
SELECTED FINANCIAL DATA OF THE CORPORATION
(IN MILLIONS OF DOLLARS)
The following table presents selected consolidated financial information of
the Corporation, which is unaudited for the three months ended March 31, 1994
and 1993, and which is extracted from the audited financial statements for the
years ended December 31, 1993, 1992, 1991, 1990 and 1989. The operating results
for the three months ended March 31, 1994 and 1993 include all adjustments
(consisting only of normal recurring adjustments) that the Corporation considers
necessary for a fair presentation of the results for such interim periods. The
interim results are not necessarily an indication of the results for the full
year. The information in the table and the notes thereto should be read in
conjunction with the financial statements and the related notes thereto
contained in the Corporation's Annual Report on Form 10-K for the year ended
December 31, 1993, and its Quarterly Report on Form 10-Q for the quarter ended
March 31, 1994.
<TABLE>
<CAPTION>
Three Months
Ended
March 31, Years Ended December 31,
--------------- --------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
(Unaudited)
REVENUES.................................... $ 695 $ 636 $2,855 $2,816 $2,626 $2,667 $2,253
------ ------ ------ ------ ------ ------ ------
EXPENSES:
Direct operating.......................... 407 396 1,647 1,627 1,486 1,470 1,239
Depreciation of revenue earning
equipment............................... 149 124 524(a) 497(b) 493 526 463
Selling, general and administrative....... 85 79 336 353 339 348 290
Interest, net of interest income of $1,
$9, $11, $4, $10, $25 and $20........... 56 51 246 307 304 300 253
------ ------ ------ ------ ------ ------ ------
697 650 2,753 2,784 2,622 2,644 2,245
------ ------ ------ ------ ------ ------ ------
INCOME (LOSS) BEFORE INCOME TAXES........... (2) (14) 102 32 4(b) 23 8
PROVISION (BENEFIT) FOR TAXES ON INCOME..... (1) (7) 49(a) 22(b) (1)(b) (11)(c) (1)
------ ------ ------ ------ ------ ------ ------
INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF
CHANGES IN ACCOUNTING PRINCIPLES.......... (1) (7) 53 10 5 34 9
CUMULATIVE EFFECT ON PRIOR YEARS OF CHANGES
IN METHOD OF ACCOUNTING FOR --
Postretirement Benefits (d)............... -- -- -- (4) -- -- --
Vehicle Warranties (e).................... -- -- -- -- (4) -- --
Income Taxes (f).......................... -- -- -- -- -- -- (2)
------ ------ ------ ------ ------ ------ ------
NET INCOME (LOSS)........................... $ (1) $ (7) $ 53 $ 6 $ 1 $ 34 $ 7
====== ====== ====== ====== ====== ====== ======
Ratio of Earnings to Fixed Charges (g)...... .98 .83 1.3 1.1 1.0 1.1 1.0
Balance Sheet Data at End of Period:
Total Assets.............................. $5,541 $4,695 $4,688 $4,222 $4,294 $4,334 $4,152
Total Debt................................ 3,713 3,075 2,940 2,550 2,702 2,798 2,716
Shareholders' Equity...................... 622 572 617 580 599 600 542
Ratio of Total Debt to Shareholders'
Equity.................................. 6.0 5.4 4.8 4.4 4.5 4.7 5.0
</TABLE>
- ---------------
(a) Depreciation of revenue earning equipment for the year 1993 includes net
credits of $28.1 million as compared to net credits of $16.9 million in
1992, primarily attributable to higher proceeds received in 1993 on disposal
of the equipment. The tax provision for the year 1993 includes a $1.1
million charge relating to the increase in net deferred tax liabilities as
of January 1, 1993 due to changes in the tax laws enacted in August 1993,
and a $2.0 million credit resulting from adjustments made to tax accruals in
connection with tax audit evaluations and the effects of prior years' tax
sharing arrangements between the Corporation and its former parent
companies, UAL and RCA.
Effective January 1, 1993, the Corporation adopted the provisions of
Statement of Financial Accounting Standards No. 109, Accounting for Income
Taxes, which did not have a material effect on the Corporation's
consolidated financial position, results of operations or cash flows.
(b) Depreciation of revenue earning equipment for the year 1992 includes net
credits of $16.9 million as compared to net charges of $5.4 million in
1991, primarily attributable to higher proceeds received in 1992 on
disposal of the equipment and the elimination of losses incurred in 1991
due to the increase in
4
<PAGE> 8
1992 of "non-risk" vehicles acquired which are returned to the vehicle
manufacturers at pre-established prices.
The tax provision includes credits of $9.8 million, $16.7 million, and
$38.8 million for the years 1992, 1991 and 1990, respectively, resulting
from adjustments made to tax accruals in connection with tax audit
evaluations and the effects of prior years' tax sharing arrangements
between the Corporation and its former parent companies, UAL and RCA, and
the reversal of tax accruals no longer required and benefits realized
relating to certain foreign operations. The tax provision for the year 1991
also includes benefits of $5.5 million related to the close down and sale
of certain unprofitable foreign operations.
The decrease in income before income taxes for the year ended December 31,
1991, as compared to the prior year, was due to provisions made in 1991 of
approximately $20 million primarily incurred to close down certain
unprofitable foreign operations and depreciation adjustments made to
residual values of certain vehicles, $15 million of lower interest income
in 1991 primarily relating to refunds of prior years' income taxes, and the
adverse effects of the decrease in travel due to the war in the Persian
Gulf and a slowdown in the economy. The decrease was partly offset by net
credits of $8.9 million relating to the sale and disposition of certain
properties.
(c) The tax provision for the year 1990 includes credit adjustments of $38.8
million, resulting from adjustments made to tax accruals in connection with
tax audit evaluations and the effects of prior years' tax sharing
arrangements between the Corporation and its former parent companies, UAL
and RCA.
(d) Effective January 1, 1992, the Corporation adopted the provisions of
Statement of Financial Accounting Standards No. 106, Employers' Accounting
for Postretirement Benefits Other than Pensions ("FAS No. 106"), which
requires that postretirement health care and other non-pension benefits be
accrued during the years the employee renders the necessary service. Prior
to 1992, the Corporation accrued for such benefits on a pay-as-you-go
basis. As of January 1, 1992, the Corporation recorded a cumulative
decrease in net income of $4.3 million (net of $2.7 million tax benefit) as
a result of implementing FAS No. 106.
(e) Effective January 1, 1991, the Corporation adopted the provisions of FASB
Technical Bulletin No. 90-1, Accounting for Separately Priced Extended
Warranty and Product Maintenance Contracts ("FAS No. 90-1"), which requires
that proceeds received from warranty contracts should be deferred and
recognized in income on a straight line basis over the contract period, and
costs of services performed under the contract should be charged to expense
as incurred. Prior to 1991, when vehicles were sold under an extended
warranty contract, the proceeds received by the Corporation under such
contract, net of estimated costs to be incurred in fulfilling obligations
under those contracts, were recorded in income when the sale occurred. As
of January 1, 1991, the Corporation recorded a cumulative decrease in net
income of $3.5 million (net of $2.2 million tax benefit) as a result of
implementing FAS No. 90-1.
(f) Effective January 1, 1989, the Corporation adopted the provisions of
Statement of Financial Accounting Standards No. 96, Accounting for Income
Taxes ("FAS No. 96"), which requires the use of the liability method in
accounting for income taxes. Deferred tax assets and liabilities are
recorded based on the differences between the financial statement and tax
bases of assets and liabilities and the tax rates in effect when these
differences are expected to reverse. In addition, deferred tax amounts are
recorded with respect to assets and liabilities acquired in business
combinations prior to adoption, when prior years' financial statements are
not restated to reflect adoption of FAS No. 96. The cumulative decrease in
net income as a result of implementing FAS No. 96 was $2 million.
(g) Earnings have been calculated by adding interest expense and the portion of
rentals estimated to represent the interest factor to income before income
taxes. Fixed charges include interest charges (including capitalized
interest) and the portion of rentals estimated to represent the interest
factor. For the three months ended March 31, 1994 and 1993, an additional
$2.0 million and $14.3 million of income before income taxes, respectively,
would have been required to reflect a ratio of 1.0x.
CERTAIN RELATIONSHIPS
Hertz is a party to a cooperative advertising agreement with Ford (see
"Item 1 -- Business -- Advertising" in the Corporation's Annual Report on Form
10-K for the year ended December 31, 1993). In addition, for each of the five
years ended December 31, 1993, Hertz' domestic revenue earning vehicles
consisted of approximately 70% Ford products and 2% Volvo products. In its
foreign operations, Hertz utilizes vehicles manufactured abroad by subsidiaries
of Ford (which for the five years ended December 31, 1993 represented in the
aggregate approximately 40% of Hertz' fleet) and by other manufacturers. Ford
products are acquired from dealers who are independent from Ford. The
percentages of Ford and Volvo products
5
<PAGE> 9
acquired by Hertz are expected to continue at approximately this level in the
future, pursuant to long-term supply contracts between the Corporation and Ford
and the Corporation and Volvo. Hertz will purchase or lease the vehicles from
Ford dealers and Volvo.
In 1992, the Corporation entered into a lease agreement with a third party
lessor providing for the lease of vehicles purchased by the third party lessor
under a repurchase program offered by Ford. Under the lease, which is accounted
for as an operating lease, the Corporation makes payments equal to the monthly
depreciation and all expenses (including interest) of the third party lessor and
is responsible for the remaining net cost on any vehicles that become ineligible
under the repurchase program. At March 31, 1994, the net cost of the vehicles
leased under this agreement was approximately $389 million.
On June 8, 1994, the Corporation and Ford entered into a revolving loan
agreement under which Hertz may borrow from Ford from time to time in amounts of
up to $250 million outstanding at any one time. Obligations of the Corporation
under the agreement would rank pari passu with the Corporation's Senior Debt
Securities. This agreement by its terms expires on June 30, 1999, on which date
any amounts then outstanding thereunder are required to be repaid.
DESCRIPTION OF DEBT SECURITIES
The Senior Debt Securities are to be issued under an indenture, dated as of
April 1, 1986, between the Corporation and Chemical Bank (successor by merger to
Manufacturers Hanover Trust Company), as Trustee (the "Senior Trustee"), as
amended by the First Supplemental Indenture, dated as of April 2, 1990, between
the Corporation and the Senior Trustee (such indenture, as amended, the "Senior
Indenture"). The Senior Subordinated Debt Securities are to be issued under an
indenture, dated as of June 1, 1989 (the "Senior Subordinated Indenture"),
between the Corporation and The Bank of New York, as Trustee (the "Senior
Subordinated Trustee"). The Junior Subordinated Debt Securities are to be issued
under an indenture, dated as of July 1, 1993 (the "Junior Subordinated
Indenture"), between the Corporation and Citibank, N.A., as trustee (the "Junior
Subordinated Trustee").
A copy of the Senior Indenture, the Senior Subordinated Indenture and the
Junior Subordinated Indenture are exhibits to the Registration Statement of
which this Prospectus forms a part. The Senior Indenture, the Senior
Subordinated Indenture and the Junior Subordinated Indenture are sometimes
referred to collectively as the "Indentures" and the Senior Trustee, the Senior
Subordinated Trustee and the Junior Subordinated Trustee are sometimes referred
to collectively as the "Trustees."
The following summaries of certain provisions of the Indentures do not
purport to be complete and are subject to and are qualified in their entirety by
reference to all the provisions of the Indentures, including the definitions
therein of certain terms. References to Sections are applicable to each
Indenture, except (i) references to sections included under the caption
"Subordination of Senior Subordinated Debt Securities" are applicable to the
Senior Subordinated Indenture only, (ii) references to sections included under
the caption "Subordination of Junior Subordinated Debt Securities" are
applicable to the Junior Subordinated Indenture only and (iii) as otherwise
expressly provided. The following sets forth certain general terms and
provisions of the Senior Debt Securities, the Senior Subordinated Debt
Securities and the Junior Subordinated Debt Securities (together the "Debt
Securities") offered hereby. Further terms of the Debt Securities shall be set
forth in applicable Prospectus Supplements.
GENERAL
The Debt Securities to be offered by this Prospectus are limited to
$100,000,000 in aggregate principal amount. However, the Indentures do not limit
the amount of Debt Securities which can be issued thereunder and provide that
additional securities may be issued thereunder up to the aggregate principal
amount which may be authorized from time to time by the Corporation. (Section
301)
While the covenants contained in each Indenture may provide limited
protection to debt holders in the event of a highly leveraged transaction
involving the Corporation, the Indentures do not prohibit the incurrence of
additional Senior, Senior Subordinated or Junior Subordinated Debt. Subject to
certain exceptions described below under "Limitations on Secured Debt,"
outstanding Debt Securities and other
6
<PAGE> 10
qualified indebtedness shall be secured equally and ratably (subject, however,
to applicable priorities of payment) with any additional Secured Debt incurred
by the Corporation. (Section 1004) Unless otherwise indicated in the applicable
Prospectus Supplement, the Debt Securities will not have the benefit of any
covenant requiring redemption or repurchase of the Debt Securities by the
Corporation, or adjustment to any terms of the Debt Securities, upon any change
in control or recapitalization of the Corporation.
Reference is made to the applicable Prospectus Supplement for the following
terms of the particular series of Debt Securities being offered thereby: (i) the
designation and any limitation on the aggregate principal amount of the series;
(ii) whether the securities are Senior Debt Securities, Senior Subordinated Debt
Securities, or Junior Subordinated Debt Securities; (iii) the currency or
currencies for which Debt Securities may be purchased and currency or currencies
in which principal and any interest may be payable; (iv) if the currency for
which Debt Securities may be purchased or in which principal and any interest
may be payable is at the purchaser's election, the manner in which such an
election may be made; (v) the percentage of principal amount at which the series
will be issued; (vi) the date or dates on which the principal of the series will
be payable; (vii) the rate or rates per annum, if any, at which the series will
bear interest or the method of calculation thereof; (viii) the date or dates
from which any interest will accrue and the times at which any interest will be
payable; (ix) the place or places where the principal and interest, if any, on
Debt Securities of the series shall be payable; (x) the terms, if any, on which
Debt Securities of the series may be redeemed at the option of the Corporation;
(xi) the obligation, if any, of the Corporation to redeem, purchase or repay
Debt Securities of the series; (xii) the minimum denomination in which Debt
Securities of the series will be issued; (xiii) if other than the principal
amount, the portion of the principal amount of the Debt Securities of the series
that will be payable upon a declaration of acceleration of the maturity thereof;
and (xiv) any other special terms.
Debt Securities may be issued as discounted Debt Securities (bearing no
interest or interest at a rate which at the time of issuance is below market
rates) to be sold at a substantial discount below their stated principal amount.
Federal income tax consequences and other special considerations applicable to
any such discounted Debt Securities will be described in the applicable
Prospectus Supplement relating thereto.
The Debt Securities will be issued only in registered form without coupons
and will be unsecured obligations of the Corporation. The Senior Debt Securities
will rank on a parity with other senior debt securities of the Corporation. The
Senior Subordinated Debt Securities will rank on a parity with other senior
subordinated debt securities and be subordinated in right of payment to the
prior payment in full of Senior Indebtedness (as defined in the Senior
Subordinated Indenture) of the Corporation, as described below under
"Subordination of Senior Subordinated Debt Securities." The Junior Subordinated
Debt Securities will rank on a parity with other junior subordinated debt
securities and be subordinated in right of payment to the prior payment in full
of Senior Indebtedness (as defined in the Junior Subordinated Indenture) of the
Corporation (which term, when used in connection with Junior Subordinated Debt
Securities, includes Senior Debt Securities and Senior Subordinated Debt
Securities), as described under "Subordination of Junior Subordinated Debt
Securities."
Unless otherwise provided in the applicable Prospectus Supplement relating
to a particular series of Debt Securities being offered thereby, principal,
premium, if any, and interest, if any, will be payable at an office or agency to
be maintained by the Corporation in such place or places described in the
applicable Prospectus Supplement, which place is currently contemplated to be in
The City of New York, except that, at the option of the Corporation, interest
may be paid by check mailed to the person entitled thereto. The Debt Securities
may be presented to the corporate trust office of the applicable Trustee for
registration of transfer or exchange. Debt Securities of a particular series may
be exchanged for a like aggregate amount of Debt Securities of such series of
other authorized denominations without service charge, except for any tax or
other governmental charge that may be imposed. (Sections 301, 302, 305 and 1002)
BOOK-ENTRY
If so indicated in the applicable Prospectus Supplement, upon issuance, all
Debt Securities will be represented by one or more fully registered global
securities (the "Global Notes"). In any such case, the
7
<PAGE> 11
Depository Trust Company (the "Depository"), New York, New York, will act as
securities depository for such issue of Debt Securities. Any such Debt
Securities will be issued as fully-registered Global Notes registered in the
name of Cede & Co. (the Depository's partnership nominee). One fully-registered
Global Note will be issued for each such issue of Debt Securities, in the
aggregate principal amount of such issue, and will be deposited with the
Depository; provided, however, that if the aggregate principal amount of any
such issue exceeds $150 million, one Global Note will be issued with respect to
each $150 million of principal amount and an additional Global Note will be
issued with respect to any remaining principal amount of such issue.
The Depository has advised the Company as follows: The Depository is a
limited-purpose trust company organized under the New York Banking Law, a
"banking organization" within the meaning of the New York Banking Law, a member
of the Federal Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code, and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Securities Exchange Act of
1934. The Depository holds securities that its participants ("Participants")
deposit with the Depository. The Depository also facilitates the settlement
among Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Participants include securities brokers and dealers,
banks trust companies, clearing corporations, and certain other organizations.
The Depository is owned by a number of its Participants and by the New York
Stock Exchange, Inc., the American Stock Exchange, Inc. and the National
Association of Securities Dealers, Inc. Access to the Depository's book-entry
system is also available to others such as securities brokers and dealers,
banks, and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly ("Indirect
Participants"). The Rules applicable to the Depository and its Participants are
on file with the Securities and Exchange Commission.
Purchases of Debt Securities represented by one or more Global Notes under
the Depository's book-entry system must be made by or through Participants,
which will receive a credit for such Debt Securities on the Depository's
records. The ownership interest of each actual purchaser of each Debt Security
(a "Beneficial Owner") is in turn to be recorded on the Participants' and
Indirect Participants' records. Beneficial Owners will not receive written
confirmation from the Depository of their purchases, but each Beneficial Owner
is expected to receive written confirmation providing details of the
transaction, as well as periodic statements of its holdings, from the
Participant or Indirect Participant through which such Beneficial Owner entered
into the transaction. Transfers of ownership interests in such Debt Securities
will be accomplished by entries made on the books of Participants acting on
behalf of Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in any Debt Securities, except in the
event that use of the book-entry system for the Debt Securities is discontinued.
To facilitate subsequent transfers, all Debt Securities represented by one
or more Global Notes deposited by Participants with the Depository will be
registered in the name of the Depository partnership nominee, Cede & Co. The
deposit of one or more Global Notes with the Depository and their registration
in the name of Cede & Co. effect no change in beneficial ownership. The
Depository will have no knowledge of the actual Beneficial Owners of any Debt
Securities represented by Global Notes; the Depository records will reflect only
the identity of the Participants to whose accounts the Debt Securities
represented by such Global Notes are credited, which may or may not be the
Beneficial Owners. The Participants will remain responsible for keeping account
of their holdings on behalf of their customers.
Conveyance of notices and other communications by the Depository to
Participants, by Participants to Indirect Participants, and by Participants and
Indirect Participants to Beneficial Owners will be governed by arrangements
among them, subject to any statutory or regulatory requirements as may be in
effect from time to time. Neither the Depository nor Cede & Co. will consent or
vote with respect to any Debt Securities represented by one more more Global
Notes.
Principal and interest payments on the Debt Securities represented by one
or more Global Notes will be made to the Depository. The Depository's practice
is to credit Participants' accounts on payable date in accordance with their
respective holdings shown on the Depository's records unless the Depository has
reason
8
<PAGE> 12
to believe that it will not receive payment on payable date. Payments by
Participants to Beneficial Owners will be governed by standing instructions and
customary practices, as is the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such Participant and not of the Depository, or the Company,
subject to any statutory or regulatory requirements as may be in effect from
time to time. Payment of principal and interest to the Depository will be the
responsibility of the Company, disbursement of such payments to Participants
shall be the responsibility of the Depository, and disbursement of such payments
to the Beneficial Owners shall be the responsibility of Participants and
Indirect Participants.
The Depository may discontinue providing its services as securities
depository with respect to any issue of Debt Securities represented by one or
more Global Notes at any time by giving reasonable notice to the Company. Under
such circumstances, in the event that a successor securities depository is not
obtained, definitive certificates representing Debt Securities will be required
to be printed and delivered. The Company may decide to discontinue use of the
system of book-entry transfers through the Depository (or a successor securities
depository). In such event definitive certificates representing Debt Securities
will be printed and delivered.
The information in this section concerning the Depository's book-entry
system has been obtained from sources that the Company believes to be reliable,
but the Company takes no responsibility for the accuracy thereof.
SUBORDINATION OF SENIOR SUBORDINATED DEBT SECURITIES
Payment of the principal of, premium, if any, and interest on the Senior
Subordinated Debt Securities is expressly subordinated in right of payment, as
set forth in the Senior Subordinated Indenture, to payment when due of all
Senior Indebtedness of the Corporation, as such term is defined with respect to
the Senior Subordinated Debt Securities. (Section 1401) "Senior Indebtedness" is
used under this caption "Subordination of Senior Subordinated Debt Securities"
as defined in the Senior Subordinated Indenture. "Senior Indebtedness" is
defined in the Senior Subordinated Indenture as (a) outstanding indebtedness of
the Corporation listed on Schedule A to the Senior Subordinated Indenture, (b)
any promissory notes (other than any referred to in the foregoing clause (a))
issued by the Corporation pursuant to any agreement between the Corporation and
any bank or banks and any commercial paper issued by the Corporation, (c) all
indebtedness incurred by the Corporation after the date of the Senior
Subordinated Indenture for money borrowed which is, in the discretion of the
Corporation, specifically designated by the Corporation as superior to
subordinated debt (senior debt) of the Corporation in the instruments evidencing
said indebtedness at the time of the issuance thereof, (d) all indebtedness
previously incurred by the Corporation outstanding at the date of the Senior
Subordinated Indenture for money borrowed which is, in the discretion of the
Corporation, specifically designated by the Corporation as Senior Indebtedness
for the purposes of the Senior Subordinated Indenture at the date of the Senior
Subordinated Indenture (all of such indebtedness is set forth on Schedule B
attached to the Senior Subordinated Indenture), (e) indebtedness of the
Corporation for money borrowed from or guaranteed to persons, firms or
corporations which engage in lending money, including, without limitation,
banks, trust companies, insurance companies and other financing institutions and
charitable trusts, pension trusts and other investing organizations, evidenced
by notes or similar obligations, unless such indebtedness shall, in the
instrument evidencing the same, be specifically designated as not being superior
to the Senior Subordinated Debt Securities and (f) any amendments,
modifications, supplements, deferrals, renewals or extensions of any such Senior
Indebtedness. Senior Indebtedness will not include, and the Senior Subordinated
Debt Securities will rank pari passu in right of payment to, the Corporation's
8 3/4% Senior Subordinated Promissory Notes due October 1, 1997, 9 1/8% Senior
Subordinated Notes due August 1, 1996, 10 1/8% Senior Subordinated Notes due
March 1, 1997 and 9 1/2% Senior Subordinated Notes due May 15, 1998. (Section
101)
No payment on account of principal, premium, if any, sinking fund, or
interest on the Senior Subordinated Debt Securities may be made, nor may any
property or assets of the Corporation be applied to the purchase or other
acquisition or retirement of the Senior Subordinated Debt Securities, unless
full payment of amounts then due for principal, premium, if any, sinking fund,
and interest on Senior Indebtedness
9
<PAGE> 13
has been made or duly provided for in money or money's worth. No payment by the
Corporation on account of principal, premium, if any, sinking fund, or interest
on the Senior Subordinated Debt Securities may be made, nor may any property or
assets of the Corporation be applied to the purchase or other acquisition or
retirement of the Senior Subordinated Debt Securities, if, at the time of such
payment or application or immediately after giving effect thereto, (i) there
exists under the Senior Indebtedness referred to in clause (a) of the
immediately preceding paragraph or any agreement pursuant to which any such
Senior Indebtedness is issued any default or any condition, event or act, which
with notice or lapse of time, or both, would constitute a default or (ii) there
exists under any other Senior Indebtedness or any agreement pursuant to which
such other Senior Indebtedness is issued any event of default permitting the
holders of such other Senior Indebtedness (or a trustee on behalf of such
holders) to accelerate the maturity thereof; provided, however, that in the case
of such an event of default (other than in payment of such other Senior
Indebtedness when due) the foregoing provisions of this clause (ii) will not
prevent any such payment or application for a period longer than 90 days after
the date on which the holders of such Senior Indebtedness (or such trustee)
shall have first obtained written notice of such event of default from the
Corporation or the holder of any Senior Subordinated Debt Securities, if the
maturity of such other Senior Indebtedness is not so accelerated within such 90
day period. (Section 1402)
Subject to the foregoing, if there shall have occurred any Event of Default
on the Senior Subordinated Debt Securities as described below under "Events of
Default and Notice Thereof", other than with respect to certain events of
bankruptcy, insolvency or reorganization, then unless and until either such
Event of Default shall have been cured or waived or shall have ceased to exist
or the principal of, premium, if any, and interest on all Senior Indebtedness
shall have been paid in full in money or money's worth, no payment shall be made
by the Corporation on account of the principal of, premium, if any, or interest
on the Senior Subordinated Debt Securities or on account of the purchase or
other acquisition of Senior Subordinated Debt Securities, except (a) payments at
the expressed maturity of the Senior Subordinated Debt Securities (subject to
the next paragraph), (b) current interest payments as provided in the Senior
Subordinated Debt Securities, (c) payments for the purpose of curing any such
Event of Default, and (d) payments pursuant to the required sinking fund for the
Senior Subordinated Debt Securities. (Section 1402)
Upon any payment or distribution of assets of the Corporation to creditors
upon any dissolution or winding-up or total or partial liquidation or
reorganization of the Corporation or similar proceeding relating to the
Corporation or its property, whether voluntary or involuntary and whether or not
the Corporation is a party thereto, or in bankruptcy, insolvency, receivership
or other proceedings, all principal, premium, if any, and interest due upon all
Senior Indebtedness must be paid in full before the holders of the Senior
Subordinated Debt Securities are entitled to receive or retain any assets so
paid or distributed. Subject to the payment in full of all Senior Indebtedness,
the holders of the Senior Subordinated Debt Securities are to be subrogated to
the rights of holders of Senior Indebtedness to receive payments or
distributions of assets of the Corporation or other payments applicable to
Senior Indebtedness to the extent of the application to Senior Indebtedness of
moneys or other assets which would have been received by the holders of the
Senior Subordinated Debt Securities but for the subordination provisions
contained in the Senior Subordinated Indenture until the Senior Subordinated
Debt Securities are paid in full. (Sections 1403 and 1405)
At March 31, 1994, the outstanding principal amount of Senior Indebtedness
aggregated approximately $2,228 million and senior subordinated debt aggregated
approximately $250.8 million. The Corporation expects to issue from time to time
additional indebtedness constituting Senior Indebtedness and senior subordinated
debt (see "Use of Proceeds"). None of the Indentures prohibits or limits the
incurrence of additional Senior Indebtedness.
By reason of the subordination provisions contained in the Senior
Subordinated Indenture, in the event of insolvency, creditors of the Corporation
who are holders of Senior Indebtedness, as well as certain general creditors of
the Corporation, may recover more, ratably, than the holders of the Senior
Subordinated Debt Securities.
10
<PAGE> 14
SUBORDINATION OF JUNIOR SUBORDINATED DEBT SECURITIES
Payment of the principal of, premium, if any, and interest on the Junior
Subordinated Debt Securities is expressly subordinated in right of payment, as
set forth in the Junior Subordinated Indenture, to payment when due of all
Senior Indebtedness of the Corporation, as such term is defined with respect to
the Junior Subordinated Debt Securities. (Section 1401) "Senior Indebtedness" is
defined in the Junior Subordinated Indenture as (a) any promissory notes issued
by the Corporation pursuant to any agreement between the Corporation and any
bank or banks and any commercial paper issued by the Corporation, (b) all
existing and future indebtedness for borrowed money of the Corporation
(including guarantees by the Corporation of indebtedness for borrowed money of
others), (c) all obligations of the Corporation specified on Schedule A to the
Junior Subordinated Indenture, (d) indebtedness of the Corporation for money
borrowed from or guaranteed to persons, firms or corporations which engage in
lending money, including, without limitation, banks, trust companies, insurance
companies and other financing institutions and charitable trusts, pension trusts
and other investing organizations, evidenced by notes or similar obligations,
unless such indebtedness shall, in the instrument evidencing the same, be
specifically designated as not being superior to the Junior Subordinated Debt
Securities of any series, (e) all other existing and future obligations of the
Corporation (including but not limited to (x) obligations under interest rate
and currency swaps, caps, collars, options and similar arrangements and (y)
guarantees by the Corporation of obligations of others) that are designated in
the instruments evidencing said obligations as being superior in right of
payment to the Junior Subordinated Debt Securities, and (f) any amendments,
modifications, supplements, deferrals, renewals or extensions of any such Senior
Indebtedness; provided, that Senior Indebtedness shall not include (x) the
Junior Subordinated Debt Securities of any series and (y) any other indebtedness
for borrowed money or other obligation of the Corporation (including guarantees
by the Corporation of such indebtedness of others) which is expressly
subordinated in right of payment to all senior subordinated debt securities that
are or may be outstanding under the Senior Subordinated Indenture. (Section 101)
No payment on account of principal, premium, if any, sinking fund, or
interest on the Junior Subordinated Debt Securities may be made, nor may any
property or assets of the Corporation be applied to the purchase or other
acquisition or retirement of the Junior Subordinated Debt Securities, unless
full payment of amounts then due for principal, premium, if any, sinking fund,
and interest on Senior Indebtedness has been made or duly provided for in money
or money's worth. No payment by the Corporation on account of principal,
premium, if any, sinking fund, or interest on the Junior Subordinated Debt
Securities may be made, nor may any property or assets of the Corporation be
applied to the purchase or other acquisition or retirement of the Junior
Subordinated Debt Securities, if, at the time of such payment or application or
immediately after giving effect thereto, there exists under any Senior
Indebtedness or any agreement pursuant to which such Senior Indebtedness is
issued any event of default permitting the holders of such Senior Indebtedness
(or a trustee on behalf of such holders) to accelerate the maturity thereof;
provided, however, that in the case of such an event of default (other than in
payment of such Senior Indebtedness when due) the foregoing provisions of this
sentence will not prevent any such payment or application for a period longer
than 90 days after the date on which the holders of such Senior Indebtedness (or
such trustee) shall have first obtained written notice of such event of default
from the Corporation or the holder of any Junior Subordinated Debt Securities,
if the maturity of such Senior Indebtedness is not so accelerated within such 90
day period. (Section 1402)
Subject to the foregoing, if there shall have occurred any Event of Default
on the Junior Subordinated Debt Securities as described below under "Events of
Default and Notice Thereof", other than with respect to certain events of
bankruptcy, insolvency or reorganization, then unless and until either such
Event of Default shall have been cured or waived or shall have ceased to exist
or the principal of, premium, if any, and interest on all Senior Indebtedness
shall have been paid in full in money or money's worth, no payment shall be made
by the Corporation on account of the principal of, premium, if any, or interest
on the Junior Subordinated Debt Securities or on account of the purchase or
other acquisition of Junior Subordinated Debt Securities, except (a) payments at
the expressed maturity of the Junior Subordinated Debt Securities (subject to
the next paragraph), (b) current interest payments as provided in the Junior
Subordinated Debt Securities,
11
<PAGE> 15
(c) payments for the purpose of curing any such Event of Default, and (d)
payments pursuant to the required sinking fund for the Junior Subordinated Debt
Securities. (Section 1402)
Upon any payment or distribution of assets of the Corporation to creditors
upon any dissolution or winding-up or total or partial liquidation or
reorganization of the Corporation or similar proceeding relating to the
Corporation or its property, whether voluntary or involuntary and whether or not
the Corporation is a party thereto, or in bankruptcy, insolvency, receivership
or other proceedings, all principal, premium, if any, and interest due upon all
Senior Indebtedness must be paid in full before the holders of the Junior
Subordinated Debt Securities are entitled to receive or retain any assets so
paid or distributed. Subject to the payment in full of all Senior Indebtedness,
the holders of the Junior Subordinated Debt Securities are to be subrogated to
the rights of holders of Senior Indebtedness to receive payments or
distributions of assets of the Corporation or other payments applicable to
Senior Indebtedness to the extent of the application to Senior Indebtedness of
moneys or other assets which would have been received by the holders of the
Junior Subordinated Debt Securities but for the subordination provisions
contained in the Junior Subordinated Indenture until the Junior Subordinated
Debt Securities are paid in full. (Sections 1403 and 1405)
At March 31, 1994, Junior Subordinated Debt (as defined in the Junior
Subordinated Indenture) aggregated approximately $550 million and Senior
Indebtedness (as defined in the Junior Subordinated Indenture) aggregated
approximately $2,479 million. The Corporation expects to issue from time to time
additional indebtedness constituting Senior Indebtedness (see "Use of
Proceeds"). None of the Indentures prohibits or limits the incurrence of
additional Senior Indebtedness.
By reason of the subordination provisions contained in the Junior
Subordinated Indenture, in the event of insolvency, creditors of the Corporation
who are holders of Senior Indebtedness, as well as certain general creditors of
the Corporation, may recover more, ratably, than the holders of the Junior
Subordinated Debt Securities.
CERTAIN COVENANTS
Dividend Restrictions. Each Indenture provides that the Corporation may
not (a) declare or pay any dividend or make any other distribution (other than
dividends or distributions made in capital stock of the Corporation) on or in
respect of any capital stock of the Corporation, (b) purchase, redeem or
otherwise acquire for value any shares of the capital stock of the Corporation,
except shares acquired upon the conversion thereof into other shares of capital
stock of the Corporation, or (c) permit any Restricted Subsidiary to purchase,
redeem or otherwise acquire for value any shares of capital stock of the
Corporation; if immediately thereafter the aggregate amount of all such
dividends, distributions, purchases, redemptions, acquisitions or payments
(other than dividends or distributions payable in shares of capital stock of the
Corporation) during the period from and after December 31, 1985, plus the amount
of total investments in Unrestricted Subsidiaries made during such period, would
exceed the sum of (1) $185,000,000 plus (or minus in the case of a deficit), (2)
the consolidated net income (or net loss) of the Corporation and its Restricted
Subsidiaries earned subsequent to December 31, 1985, plus (3) the aggregate net
proceeds received by the Corporation in respect of the issue, sale or exchange
after December 31, 1985, of (i) any shares of capital stock of the Corporation
and any rights or warrants entitling the holders to purchase or subscribe for
shares of such capital stock, or (ii) any indebtedness of the Corporation which
is converted into shares of its capital stock after December 31, 1985. (Section
1007)
The foregoing will not prohibit the Corporation from paying any management,
administrative, general overhead or similar charge to any controlling
stockholder or other Affiliate of the Corporation, or paying to any member of
the same consolidated group for tax purposes any amounts in lieu of taxes.
(Section 1007)
Merger or Sale of Assets. The Indentures provide that the Corporation may
not consolidate with, merge into, or sell, convey or transfer its properties and
assets substantially as an entirety to, another Person, if, as a result thereof,
any property owned by the Corporation or a Restricted Subsidiary immediately
prior thereto would become subject to any Security Interest, unless (i)(x) in
the case of the Senior Indenture, the Senior Debt Securities (equally and
ratably with any other indebtedness of the Corporation then entitled thereto)
shall be secured by a prior lien on such property, (y) in the case of the Senior
Subordinated Indenture, the
12
<PAGE> 16
Senior Subordinated Debt Securities (equally and ratably with any other
indebtedness of the Corporation then entitled thereto) shall be secured equally
and ratably with (or prior to) the debt secured by such Security Interest or (z)
in the case of the Junior Subordinated Indenture, the Junior Subordinated Debt
Securities (equally and ratably with any other indebtedness of the Corporation
entitled thereto) shall be secured equally and ratably with (or prior to) the
debt secured by such Security Interest or (ii) such Security Interest would
otherwise be permitted under the Indentures. (Section 803) (See "Limitations on
Secured Debt")
Limitations on Certain Loans and Advances. Each Indenture provides that
the Corporation may not, and may not permit any Restricted Subsidiary to, make
any loan or advance to any Person owning more than 50% of the outstanding voting
stock of the Corporation or to any Affiliate of such Person (other than the
Corporation or a Restricted Subsidiary) if the aggregate outstanding amount of
Senior Debt of the Corporation and its Restricted Subsidiaries exceeds 400% of
Consolidated Net Worth and Subordinated Debt, as defined in the applicable
Indenture. (Section 1005) The term Senior Debt for purposes of this limitation
shall mean Senior Indebtedness when referring to the Senior Subordinated
Indenture or the Junior Subordinated Indenture as such term is used in each such
Indenture.
Limitations on Secured Debt. Each Indenture provides that the Corporation
will not at any time create, incur, assume or guarantee, and will not cause,
suffer or permit a Restricted Subsidiary to create, incur, assume or guarantee,
any Secured Debt without making effective provisions whereby the Debt Securities
then outstanding under such Indenture and any other indebtedness of or
guaranteed by the Corporation or such Restricted Subsidiary then entitled
thereto, subject to applicable priorities of payment, shall be secured by the
Security Interest securing such Secured Debt equally and ratably with any and
all other obligations and indebtedness thereby secured (subject, however, to
applicable priorities of payment) so long as such Secured Debt remains
outstanding; provided, however, that the foregoing prohibition shall not be
applicable to (a) any Security Interest in favor of the Corporation or a
Restricted Subsidiary; (b) Security Interests existing on April 1, 1986 in the
case of Senior Debt Securities, Security Interests existing on June 1, 1989 in
the case of Senior Subordinated Debt Securities and Security Interests existing
on July 1, 1993 in the case of Junior Subordinated Debt Securities; (c) Security
Interests existing on property at the time it is acquired by the Corporation or
a Restricted Subsidiary, provided such Security Interest is limited to all or
part of the property so acquired; (d)(i) any Security Interest existing on the
property of or on the outstanding shares or indebtedness of a corporation at the
time such corporation shall become a Restricted Subsidiary, or (ii) subject to
the provisions referred to above under "Merger or Sale of Assets," any Security
Interest on property of a corporation existing at the time such corporation is
merged into or consolidated with the Corporation or a Restricted Subsidiary or
at the time of a sale, lease or other disposition of the properties of a
corporation as an entirety or substantially as an entirety to the Corporation or
a Restricted Subsidiary, provided, in each such case, that such Security
Interest does not extend to any property owned prior to such transaction by the
Corporation or any Restricted Subsidiary which was a Restricted Subsidiary prior
to such transaction; (e) mechanics', materialmen's, carriers' or other like
liens, arising in the ordinary course of business; (f) certain tax liens or
assessments, and certain judgment liens; (g) certain Security Interests in favor
of the United States of America or any state or any agency thereof; (h) Security
Interests on Business Equipment; (i) in the case of property (other than Rental
Equipment) acquired after April 1, 1986, as it pertains to Senior Debt
Securities, after June 1, 1989, as it pertains to Senior Subordinated Debt
Securities and after July 1, 1993, as it pertains to Junior Subordinated Debt
Securities, by the Corporation or any Restricted Subsidiary, any Security
Interest which secures an amount not in excess of the purchase price or fair
value of such property at the time of acquisition, whichever, in the opinion of
the Corporation, shall be less, provided that such Security Interest is limited
to the property so acquired; (j) Security Interests on properties financed
through tax-exempt municipal obligations, provided that such Security Interest
is limited to the property so financed; or (k) any refunding, renewal, extension
or replacement (or successive refunding, renewals, extensions, or replacements),
in whole or in part, of any Security Interest referred to in the foregoing
clauses (a) through (j), provided that the principal amount of indebtedness
secured in such refunding, renewal, extension or replacement does not exceed
that secured at the time by such Security Interest and that such renewal,
refunding, extension or replacement of such Security Interest is limited to all
or part of the same property subject to the Security Interest being refunded,
renewed, extended or replaced.
13
<PAGE> 17
Notwithstanding the foregoing provisions, the Corporation and any one or
more Restricted Subsidiaries may issue, assume, or guarantee Secured Debt which
would otherwise be subject to the foregoing restrictions in an aggregate amount
which, together with all other Secured Debt of the Corporation and its
Restricted Subsidiaries which would otherwise be subject to the foregoing
restrictions (not including Secured Debt permitted to be secured under
subparagraphs (a) through (k) above), and the aggregate value of the Sale and
Leaseback Transactions in existence at such time (not including Sale and
Leaseback Transactions the proceeds of which have been or will be applied in
accordance with subsection (b) under "Limitations on Sales and Leasebacks"
below), do not at the time of incurrence exceed 10% of Consolidated Net Worth
and Subordinated Debt (as defined in the applicable Indenture). (Section 1004)
Limitations on Sales and Leasebacks. Each Indenture provides that the
Corporation may not, and may not permit any Restricted Subsidiary to, engage in
any Sale and Leaseback Transaction unless (a) the Corporation or such Restricted
Subsidiary would be entitled, without reference to the provisions of Section
1004 described in subparagraphs (a) through (k) above, to incur Secured Debt in
an amount equal to the amount realized or to be realized upon the sale or
transfer involved in such Sale and Leaseback Transaction, secured by a Security
Interest on the property to be leased without equally and ratably securing the
Debt Securities outstanding under such Indenture as provided under "Limitations
on Secured Debt," or (b) the Corporation or a Restricted Subsidiary shall apply,
within 120 days after such sale or transfer, an amount equal to the fair value
of the property so leased (as determined by the Board of Directors of the
Corporation) to the repayment of Senior Debt of the Corporation or of any
Restricted Subsidiary (other than Senior Debt owed to the Corporation or any
Restricted Subsidiary) then prepayable, on a pro rata basis, according to the
respective principal amounts of Senior Debt then held by the various holders
thereof. (Section 1006) The term Senior Debt for purposes of this limitation
shall mean Senior Indebtedness when referring to the Senior Subordinated
Indenture or the Junior Subordinated Indenture as such term is used in each such
Indenture.
CERTAIN DEFINITIONS
"Business Equipment" shall mean all motor vehicles, tractors and trailers,
construction equipment, factory, commercial and office equipment and other
revenue-earning personalty owned, financed or otherwise held by or for the
Corporation or any of its Restricted Subsidiaries for rental, lease, sale or
disposition in the ordinary course of the business of the Corporation and its
Restricted Subsidiaries, other than Rental Equipment. "Consolidated Net Worth
and Subordinated Debt" shall mean the aggregate of (i) the capital and surplus
accounts of the Corporation and its Restricted Subsidiaries, as shown in the
most recent consolidated balance sheet of the Corporation and its Restricted
Subsidiaries, prepared in accordance with generally accepted accounting
principles, plus (ii) the aggregate outstanding principal amount of Subordinated
Debt (as defined in the Indentures) of the Corporation and its Restricted
Subsidiaries, as reflected on the same consolidated balance sheet. "Principal
Property" shall mean any building, structure or other facility (including land
or fixtures) owned by the Corporation or any Restricted Subsidiary having a
gross book value in excess of 2% of Consolidated Net Worth and Subordinated
Debt, other than any such building, structure or other facility which, in the
opinion of the Board of Directors of the Corporation, is not of material
importance to the total business conducted by the Corporation and its
subsidiaries as an entirety. "Rental Equipment" shall mean all automobiles
owned, financed or otherwise held by the Corporation or any of its Restricted
Subsidiaries which, in the ordinary course of business, are offered for rental
within the United States of America for periods of less than 30 days.
"Restricted Subsidiary" shall mean certain identified Subsidiaries of the
Corporation, and any other Subsidiaries designated after the date of the
Indentures as a Restricted Subsidiary by the Board of Directors of the
Corporation, subject to redesignation by the Board of Directors and to certain
other restrictions. "Sale and Leaseback Transaction" shall mean any sale or
transfer by the Corporation or one or more Restricted Subsidiaries (except a
sale or transfer to the Corporation or one or more Restricted Subsidiaries) of
any Principal Property, made more than 180 days after the later of the
acquisition of such Principal Property or the completion of construction or full
commencement of operations thereof, if such sale or transfer is made with the
intention of, or as part of an arrangement involving, the lease of such
Principal Property to the Corporation or a Restricted Subsidiary (with certain
exceptions). "Secured Debt" shall mean all indebtedness for borrowed money of
the Corporation or a Restricted Subsidiary which is
14
<PAGE> 18
secured by a Security Interest upon any assets of the Corporation or any
Restricted Subsidiary, including any capital stock or indebtedness of any
Restricted Subsidiary. "Security Interest" shall mean any mortgage, pledge,
lien, encumbrance, conditional sales contract, title retention agreement or
other similar arrangement which secures payment or performance of an obligation.
(Section 101)
MODIFICATION OF THE INDENTURES
Subject to certain exceptions, each Indenture contains provisions
permitting the Corporation and the Trustee, with the consent of the Holders of
not less than a majority in principal amount of all securities at the time
outstanding, or of the Holders of the then outstanding Debt Securities of each
series to be affected thereby, to modify the Indentures or any supplemental
Indentures or the rights of the Holders of all Debt Securities, or of the Debt
Securities of a particular series, as the case may be; provided that no such
modification shall (i) change the fixed maturity of the principal of, or any
installment of principal or interest on, any Debt Security, or reduce the
principal amount thereof or the rate of interest, if any, thereon, or change the
place of payment or the currency in which any Debt Security or the interest, if
any, thereon is payable, without the consent of the Holder of each Debt Security
affected, or (ii) reduce the aforesaid percentage of Debt Securities the consent
of the holders of which is required for any such modification, without the
consent of the Holder of each Debt Security affected. (Section 902)
EVENTS OF DEFAULT AND NOTICE THEREOF
The following events are defined in each Indenture as Events of Default
with respect to the Debt Securities of a particular series: failure for 30 days
to pay interest on any Debt Securities of such series when due; failure to pay
principal of any Debt Securities of such series when due at maturity, upon
redemption or by declaration; the acceleration of any other indebtedness in
excess of $10 million of the Corporation, including another series of Debt
Securities, under its terms, if such acceleration is not rescinded or annulled
with 10 days after written notice thereof to the Corporation; failure to perform
any other covenant in the Debt Securities of such series or in the applicable
Indenture within 60 days after written notice thereof to the Corporation
specifying the failure and requiring its remedy; certain events of bankruptcy,
insolvency or reorganization and any other Event of Default provided with
respect to the Debt Securities of such series (Section 501). The Corporation is
required to file with each Trustee annually an officer's certificate as to the
absence of certain defaults under the terms of the applicable Indenture.
(Section 1008)
Upon any Event of Default with respect to Debt Securities of a particular
series, the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Debt Securities of such series then outstanding may declare the
principal of all the Debt Securities of such series (or, in the case of any
series of discounted Debt Securities, such lesser principal amount as may be
provided for in such series of discounted Debt Securities) to be due and
payable. (Section 502)
Each Indenture provides that the Holders of not less than a majority in
principal amount of the Debt Securities of any series may on behalf of the
Holders of all of the Debt Securities of such series waive any past default
under such Indenture with respect to such series and its consequences, except a
default (i) in the payment of the principal of or interest, if any, on any of
the Debt Securities of such series or (ii) in respect of a covenant or provision
of such Indenture which, under the terms of such Indenture, cannot be modified
or amended without the consent of the Holders of all of the Debt Securities of
such series affected thereby. The terms of the Senior Indenture do not permit
any such waiver with respect to Debt Securities of any such series subsequent to
the acceleration of principal thereof. (Section 513)
Each Indenture provides that the Trustee may withhold notice to the Holders
of the Debt Securities of any default (except a default in the payment of
principal or interest) if it determines that the withholding of such notice is
in the interest of the Holders of the Debt Securities. (Section 602)
Subject to provisions of each Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the Trustee
will be under no obligation to exercise any of its rights or powers under such
Indenture at the request of any of the Holders of the Debt Securities issued
thereunder, unless they shall have offered to the Trustee reasonable indemnity.
(Sections 601(a) and 603(e)) Subject to such
15
<PAGE> 19
provisions for the indemnification of the Trustee and to certain other
limitations, the Holders of a majority in principal amount of the Debt
Securities of a particular series at the time outstanding shall have the right
to direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee, with respect to the Debt Securities of such series. (Section 512)
DEFEASANCE OF DEBT SECURITIES
If the Corporation, at its option, deposits or causes to be deposited with
the Trustee as trust funds, for the purpose hereinafter stated, an amount, in
money or the equivalent in securities of the government which issued the
currency in which the Debt Securities of any then outstanding series are
denominated or securities issued by government agencies backed by the full faith
and credit of such government, sufficient to pay and discharge the entire
indebtedness on the Debt Securities of such series for principal and interest,
if any, to the date or dates of maturity of the Debt Securities of such series,
and if the Corporation has paid or caused to be paid all other sums payable by
it under the Indenture with respect to such series, then the Indenture will
cease to be of further effect with respect to such series (except as to the
Corporation's obligations to compensate, reimburse and indemnify the Trustee
pursuant to the Indenture with respect to such series), and the Corporation will
be deemed to have satisfied and discharged the Indenture with respect to such
series; provided, however, that no series of Senior Subordinated Debt Securities
or Junior Subordinated Debt Securities may be so defeased unless all of the
securities of such series will become due and payable at their Stated Maturity
within one year of such defeasance. (Section 401) In the event of any such
defeasance, holders of such Debt Securities would be able to look only to such
trust funds for payment of principal and premium, if any, and interest, if any
on their Debt Securities.
If securities have been deposited with the Trustee as trust funds, the
Corporation, in order to exercise its option, is required to deliver to the
Trustee an opinion of counsel to the effect that the deposit and related
defeasance (a) will not cause the holders of the Debt Securities of such series
to recognize income, gain or loss for Federal income tax purposes and (b) will
not result in the delisting of the Debt Securities of such series from any
nationally-recognized exchange on which they are listed, if any.
Unless the Prospectus Supplement relating to the applicable Senior
Subordinated Debt Securities or Junior Subordinated Debt Securities (referred to
collectively in this paragraph as "Subordinated Debt Securities") provides
otherwise, the Corporation at its option (a) will be discharged from any and all
obligations in respect of such Subordinated Debt Securities (except for certain
obligations to register the transfer or exchange of Subordinated Debt
Securities, replace stolen, lost or mutilated Subordinated Debt Securities,
maintain paying agencies and hold moneys for payment in trust) or (b) need not
comply with certain restrictive covenants of the applicable Indenture (including
those described above under "Certain Covenants"), if there is deposited with the
applicable Trustee money or, in the case of Subordinated Debt Securities
denominated in U.S. dollars, U.S. Government Obligations or, in the case of
Subordinated Debt Securities denominated in a foreign currency, Foreign
Government Securities, which through the payment of interest thereon and
principal thereof in accordance with their terms will provide money (or a
combination of money and U.S. Government Obligations or Foreign Government
Securities, as the case may be) in an amount sufficient to pay in the currency,
currencies or currency unit or units in which such Subordinated Debt Securities
are payable all the principal of, and interest on, such Subordinated Debt
Securities on the dates such payments are due in accordance with the terms of
such Subordinated Debt Securities. Among the conditions to the Corporation
exercising any such option, the Corporation is required to deliver to the
applicable Trustee an opinion of counsel to the effect that the deposit and
related defeasance would not cause the holders of such Subordinated Debt
Securities to recognize income, gain or loss for United States Federal income
tax purposes, and that the holders will be subject to United States Federal
income tax in the same amounts, in the same manner and at the same times as
would have been the case if such deposit and related defeasance had not
occurred. (Section 403)
16
<PAGE> 20
THE TRUSTEES
Chemical Bank (successor by merger to Manufacturers Hanover Trust Company),
in addition to acting as Senior Trustee under the Senior Indenture, is trustee
under an Indenture dated as of May 1, 1983 pursuant to which approximately $2.7
million aggregate principal amount of the Corporation's senior debt securities
remained outstanding at March 31, 1994. The Bank of New York is the Senior
Subordinated Trustee under the Senior Subordinated Indenture. Citibank, N.A. is
the Junior Subordinated Trustee under the Junior Subordinated Indenture. Each
Trustee may act as depository for funds of, provide lines of credit to and
perform other services for, the Corporation and its subsidiaries in the normal
course of business.
PLAN OF DISTRIBUTION
The Corporation may sell the Debt Securities in any of four ways: (i)
through underwriters or dealers, (ii) directly to a limited number of
institutional purchasers or to a single institutional purchaser, (iii) through
agents or (iv) through a combination of any such methods of sale. The Prospectus
Supplement with respect to the Debt Securities of a particular series sets forth
the terms of the offering of such Debt Securities, including the name or names
of any underwriters or agents, the purchase price of such Debt Securities and
the proceeds to the Corporation from such sale, any underwriting discounts and
other items constituting underwriters' compensation, any initial public offering
price, any discounts or concessions allowed or reallowed or paid to dealers and
any securities exchanges on which such Debt Securities may be listed.
If underwriters are used in the sale of Debt Securities of a particular
series, such Debt Securities will be acquired by the underwriters for their own
account and may be resold from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of sale. The Debt Securities of a
particular series may be offered to the public through underwriting syndicates
represented by managing underwriters.
If so indicated in any Prospectus Supplement, the Corporation will
authorize the underwriters and agents to solicit offers by certain institutions
to purchase the Debt Securities described in such Prospectus Supplement from the
Corporation at the public offering price set forth therein pursuant to Delayed
Delivery Contracts ("Contracts"), which will provide for payment and delivery on
the date stated in such Prospectus Supplement. Each of the Contracts will be for
an amount not less than, and unless the Corporation otherwise agrees the
aggregate principal amount of Debt Securities sold pursuant to Contracts shall
be not more than, the respective amounts stated in such Prospectus Supplement.
The underwriters, dealers and agents may be entitled, under agreements
which may be entered into with the Corporation, to indemnification by the
Corporation against certain civil liabilities, including liabilities under the
Securities Act of 1933, or to contribution to payments that the underwriters,
dealers and agents may be required to make in respect thereof.
LEGAL OPINIONS
Certain legal matters in connection with the Securities will be passed upon
for the Corporation by Paul M. Tschirhart, Esq., 225 Brae Boulevard, Park Ridge,
New Jersey, Senior Vice President and General Counsel of the Corporation, and
for any underwriters or agents by Brown & Wood, One World Trade Center, New
York, New York.
EXPERTS
The consolidated financial statements and supporting schedules of the
Corporation included in the Corporation's Annual Report on Form 10-K for the
year ended December 31, 1993, incorporated by reference in this Prospectus and
the Registration Statement of which this Prospectus forms a part, have been
audited by Arthur Andersen & Co., independent public accountants, at December
31, 1993 and 1992 and for each of the three years in the period ended December
31, 1993, as indicated in their reports incorporated by reference herein.
Reference is made to said reports, which include explanatory paragraphs with
respect to the changes in
17
<PAGE> 21
the methods of accounting for postretirement benefits other than pensions in
1992 and warranty contracts in 1991, as discussed in Note 1 to each of such
consolidated financial statements. The consolidated financial statements and
supporting schedules referred to above have been incorporated by reference
herein in reliance upon the authority of said firm as experts in giving said
reports.
18
<PAGE> 22
- ------------------------------------------------------
- ------------------------------------------------------
No dealer, salesman or other person has been authorized to give any
information or to make any representation not contained in this Prospectus or
the accompanying Prospectus Supplement and, if given or made, such information
or representations must not be relied upon as having been authorized by the
Corporation or any of the Underwriters. This Prospectus and the accompanying
Prospectus Supplement do not constitute an offer to sell or a solicitation of an
offer to buy any of the securities offered hereby in any jurisdiction to any
person to whom it is unlawful to make such offer in such jurisdiction. Neither
the delivery of this Prospectus or any Prospectus Supplement nor any sale made
hereunder or thereunder shall, under any circumstances, create any implication
that there has been no change in the affairs of the Corporation since the date
hereof.
---------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Supplement
Recent Developments.................... S-2
Description of Notes................... S-2
Underwriting........................... S-3
Prospectus
Available Information.................. 2
Incorporation of Certain Documents by
Reference............................ 2
The Corporation........................ 3
Use of Proceeds........................ 3
Selected Financial Data of the
Corporation.......................... 4
Certain Relationships.................. 5
Description of Debt Securities......... 6
Plan of Distribution................... 17
Legal Opinions......................... 17
Experts................................ 17
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
[LOGO]
$100,000,000
THE HERTZ
CORPORATION
7 3/8% Senior Notes
due June 15, 2001
---------------------------
PROSPECTUS SUPPLEMENT
June 9, 1994
---------------------------
LEHMAN BROTHERS
BEAR, STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
- ------------------------------------------------------
- ------------------------------------------------------
