<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 28, 1997
REGISTRATION NO. 333-32543
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
AMENDMENT NO. 1
TO
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
THE HERTZ CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 13-1938568
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
225 BRAE BOULEVARD
PARK RIDGE, NEW JERSEY 07656-0713
(Address and zip code of principal executive offices)
THE HERTZ CORPORATION
LONG-TERM EQUITY COMPENSATION PLAN
(Full Title of the Plan)
PAUL M. TSCHIRHART, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
225 BRAE BOULEVARD
PARK RIDGE, NEW JERSEY 07656-0713
(Name and Address of Agent For Service)
201-307-2000
(Telephone Number, Including Area Code, of Agent For Service)
<PAGE> 2
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed or to be filed with the Securities and
Exchange Commission are incorporated by reference in this Registration
Statement:
(a) The registrant's latest annual report on Form 10-K filed pursuant
to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the "Exchange
Act") which contains, either directly or indirectly by incorporation by
reference, audited financial statements for the registrant's latest fiscal year
for which such statements have been filed.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the registrant's annual
report on Form 10-K referred to in (a) above.
(c) The description of the registrant's Class A Common Stock contained
in Registration Statement No. 333-22517, as amended, filed by the registrant
under the Securities Act of 1933 (the "Securities Act").
All documents subsequently filed by the registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing 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deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any other subsequently
filed document which also is or is 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 Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
The registrant's Class A Common Stock is registered under Section 12(b)
of the Exchange Act and thus, this item is not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
(the "Delaware Law") empowers a Delaware corporation to indemnify any person who
was or is a party, or is threatened to be made a party to any threatened,
pending or completed legal action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of such
corporation) by reason of the fact that such person is or was an officer or
director of such corporation, or is or was serving at the request of such
corporation as a director, officer, employee or agent of another corporation
<PAGE> 3
or enterprise against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, provided that such officer or
director acted in good faith and in a manner such person reasonably believed to
be in or not opposed to the corporation's best interests, and, for criminal
proceedings, had no reasonable cause to believe such person's conduct was
unlawful. A Delaware corporation may indemnify officers and directors against
expenses (including attorney's fees) in connection with the defense or
settlement of an action by or in the right of the corporation under the same
conditions, except that no indemnification is permitted without judicial
approval if the officer or director is adjudged to be liable to the corporation.
Where an officer or director is successful on the merits or otherwise in the
defense of any action referred to above, the corporation must indemnify him or
her against the expenses which such officer or director actually and reasonably
incurred.
In accordance with Delaware Law, the Restated Certificate of
Incorporation of the registrant provides that no director shall be personally
liable to the registrant or its stockholders for monetary damages for breach of
fiduciary duty except for liability (i) for any breach of the director's duty of
loyalty to the registrant or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) in respect of certain unlawful dividend payments or stock purchases
or redemptions, or (iv) for any transaction from which a director derived an
improper personal benefit. The effect of this provision is to eliminate the
rights of the registrant and its stockholders to recover monetary damages
against a director for breach of fiduciary duty as a director including any such
breaches resulting from gross negligence.
Pursuant to underwriting agreements filed as exhibits to registration
statements relating to underwritten offerings of securities, the underwriters
parties thereto have agreed to indemnify each officer and director of the
registrant and each person, if any, who controls the registrant within the
meaning of the Securities Act, against certain liabilities, including
liabilities under the Securities Act.
The directors and officers of the Company are covered by directors' and
officers' insurance policies relating to Ford Motor Company and its
subsidiaries.
The Restated Certificate of Incorporation of the registrant provides
for indemnification of the officers and directors of the registrant to the full
extent permitted by applicable law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
<PAGE> 4
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C>
*4(a) Form of The Hertz Corporation Long-Term Equity Compensation Plan, Amended and
Restated as of August 25, 1997.
*5 Opinion of Paul M. Tschirhart, Senior Vice President and
General Counsel of the registrant, regarding the legality of
original issuance securities registered hereunder.
*23 Consent of Coopers & Lybrand L.L.P.
</TABLE>
- -----------------------------------------------
*Filed with this Registration Statement
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement;
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is
<PAGE> 5
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Amendment
No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the Borough of Park Ridge, State of
New Jersey, on this 28th day of August, 1997.
THE HERTZ CORPORATION
By: /s/ PAUL J. SIRACUSA
---------------------------------
Paul J. Siracusa
Title: Executive Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE(S) DATE
- --------- -------- ----
<S> <C> <C>
* Chairman of the Board, Chief Executive August 28, 1997
- ------------------------------------ Officer and Director
(Frank A. Olson) (Principal Executive Officer)
* President, Chief Operating Officer and August 28, 1997
- ------------------------------------ Director
(Craig R. Koch)
/s/ PAUL J. SIRACUSA Executive Vice President and Chief August 28, 1997
- ------------------------------------ Financial Officer
(Paul J. Siracusa) (Principal Financial Officer)
/s/ RICHARD J. FOTI Controller August 28, 1997
- ------------------------------------ (Principal Accounting Officer)
(Richard J. Foti)
* Director August 28, 1997
- ------------------------------------
(John M. Devine)
* Director August 28, 1997
- ------------------------------------
(Peter J. Pestillo)
* Director August 28, 1997
- ------------------------------------
(Louis C. Burnett)
* Director August 28, 1997
- ------------------------------------
(Joseph A. Walker)
</TABLE>
*By signing his name hereto, William Sider signs this document on behalf of each
of the persons indicated above pursuant to powers of attorney duly executed by
such persons.
By: /s/ WILLIAM SIDER
- ------------------------------------
(Attorney-in-Fact)
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C>
*4(a) Form of The Hertz Corporation Long-Term Equity Compensation Plan,
Amended and Restated as of August 25, 1997.
*5 Opinion of Paul M. Tschirhart, Senior Vice President and
General Counsel of the registrant, regarding the legality
of original issuance securities registered hereunder.
*23 Consent of Coopers & Lybrand L.L.P.
</TABLE>
*Filed herewith.
<PAGE> 1
EXHIBIT 4(a)
THE HERTZ CORPORATION
LONG-TERM EQUITY COMPENSATION PLAN
(AMENDED AND RESTATED AS OF AUGUST 25, 1997)
<PAGE> 2
CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Article 1. Establishment, Objectives, and Duration............................................................. 1
Article 2. Definitions......................................................................................... 1
Article 3. Administration...................................................................................... 4
Article 4. Shares Subject to the Plan and Maximum Awards....................................................... 4
Article 5. Eligibility and Participation....................................................................... 5
Article 6. Stock Options....................................................................................... 5
Article 7. Stock Appreciation Rights........................................................................... 7
Article 8. Restricted Stock.................................................................................... 8
Article 9. Performance Units and Performance Shares............................................................ 9
Article 10. Performance Measures...............................................................................11
Article 11. Beneficiary Designation............................................................................11
Article 12. Deferrals..........................................................................................11
Article 13. Rights of Employees................................................................................12
Article 14. Amendment, Modification, Termination,
and Adjustments..........................................................................12
Article 15. Payment of Plan Awards and Conditions Thereon......................................................12
Article 16. Withholding........................................................................................13
Article 17. Indemnification....................................................................................13
Article 18. Successors.........................................................................................14
Article 19. Legal Construction.................................................................................14
</TABLE>
<PAGE> 3
THE HERTZ CORPORATION
LONG-TERM EQUITY COMPENSATION PLAN
(AMENDED AND RESTATED AS OF AUGUST 25, 1997)
ARTICLE 1. ESTABLISHMENT, OBJECTIVES, AND DURATION
1.1. ESTABLISHMENT OF THE PLAN. The Hertz Corporation, a Delaware
corporation (hereinafter referred to as the "Company"), hereby establishes an
incentive compensation plan to be known as the "The Hertz Corporation Long-Term
Equity Compensation Plan" (hereinafter referred to as the "Plan"), as set forth
in this document. The Plan permits the grant of Nonqualified Stock Options,
Incentive Stock Options, Stock Appreciation Rights, Restricted Stock,
Performance Shares, and Performance Units.
Subject to approval by the Company's stockholders, the Plan shall become
effective as of April 25, 1997 (the "Effective Date") and shall remain in effect
as provided in Section 1.3 hereof.
1.2. OBJECTIVES OF THE PLAN. The objectives of the Plan are to optimize the
profitability and growth of the Company through incentives which are consistent
with the Company's goals and which link the personal interests of Participants
to those of the Company's stockholders; to provide Participants with an
incentive for excellence in individual performance; and to promote teamwork
among Participants.
The Plan is further intended to provide flexibility to the Company in its
ability to motivate, attract, and retain the services of Participants who make
significant contributions to the Company's success and to allow Participants to
share in the success of the Company.
1.3. DURATION OF THE PLAN. The Plan shall commence on the Effective Date,
as described in Section 1.1 hereof, and shall remain in effect, subject to the
right of the Board of Directors to amend or terminate the Plan at any time
pursuant to Article 14 hereof, until all Shares subject to it shall have been
purchased or acquired according to the Plan's provisions. However, in no event
may an Award be granted under the Plan on or after April 25, 2007.
ARTICLE 2. DEFINITIONS
Whenever used in the Plan, the following terms shall have the meanings set
forth below, and when the meaning is intended, the initial letter of the word
shall be capitalized:
2.1. "AFFILIATE" shall have the meaning ascribed to such term in Rule 12b-2
of the General Rules and Regulations of the Exchange Act.
2.2. "AWARD" means, individually or collectively, a grant under this Plan
of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation
Rights, Restricted Stock, Performance Shares, or Performance Units.
2.3. "AWARD AGREEMENT" means an agreement entered into by the Company and
each Participant setting forth the terms and provisions applicable to Awards
granted under this Plan.
2.4. "BENEFICIAL OWNER" OR "BENEFICIAL OWNERSHIP" shall have the meaning
ascribed to such term in Rule 13d-3 of the General Rules and Regulations under
the Exchange Act.
1
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2.5. "BOARD" OR "BOARD OF DIRECTORS" means the Board of Directors of the
Company.
2.6. "CODE" means the Internal Revenue Code of 1986, as amended from time
to time.
2.7. "COMMITTEE" means any committee appointed by the Board to administer
the Plan, as specified in Article 3 herein.
2.8. "COMPANY" means The Hertz Corporation, a Delaware corporation,
including any and all Subsidiaries and Affiliates, and any successor thereto as
provided in Article 18 herein.
2.9. "COVERED EMPLOYEE" means a Participant who, as of the date of vesting
and/or payout of an Award, as applicable, is one of the group of "covered
employees," as defined in the regulations promulgated under Code Section 162(m),
or any successor statute.
2.10. "DIRECTOR" means any individual who is a member of the Board of
Directors of the Company or any Subsidiary or Affiliates.
2.11. "DISABILITY" shall have the meaning ascribed to such term in the
Participant's governing long-term disability plan, or if no such plan exists, at
the discretion of the Committee.
2.12. "EFFECTIVE DATE" shall have the meaning ascribed to such term in
Section 1.1 hereof.
2.13. "EMPLOYEE" means any full-time, active employee of the Company or its
Subsidiaries or Affiliates. Directors who are not employed by the Company shall
not be considered Employees under this Plan.
2.14. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor act thereto.
2.15. "FAIR MARKET VALUE" shall be determined on the basis of the closing
sale price at which Shares have been sold regular way on the principal
securities exchange on which the Shares are traded or, if there is no such sale
on the relevant date, then on the last previous day on which there was such a
sale, provided that Fair Market Value for any initial grants made under the Plan
concurrent with or contingent upon the consummation of the initial public
offering of Shares in 1997 will be at a price equal to the initial public
offering price of Shares covered by such initial public offering.
2.16. "FREESTANDING SAR" means an SAR that is granted independently of any
Options, as described in Article 7 herein.
2.17. "INCENTIVE STOCK OPTION" OR "ISO" means an option to purchase Shares
granted under Article 6 herein and which is designated as an Incentive Stock
Option and which is intended to meet the requirements of Code Section 422.
2.18 "INSIDER" shall mean an individual who is, on the relevant date, an
officer, director, or ten percent (10%) beneficial owner of any class of the
Company's equity securities that is registered pursuant to Section 12 of the
Exchange Act, all as defined under Section 16 of the Exchange Act.
2
<PAGE> 5
2.19. "NONEMPLOYEE DIRECTOR" shall mean a Director who is not also an
Employee.
2.20. "NONQUALIFIED STOCK OPTION" OR "NQSO" means an option to purchase
Shares granted under Article 6 herein and which is not intended to meet the
requirements of Code Section 422.
2.21. "OPTION" means an Incentive Stock Option or a Nonqualified Stock
Option, as described in Article 6 herein.
2.22. "OPTION PRICE" means the price at which a Share may be purchased by a
Participant pursuant to an Option.
2.23. "PARTICIPANT" means an Employee who has been selected to receive an
Award or who has outstanding an Award granted under the Plan.
2.24. "PERFORMANCE-BASED EXCEPTION" means the performance-based exception
from the tax deductibility limitations of Code Section 162(m).
2.25. "PERFORMANCE SHARE" means an Award granted to a Participant, as
described in Article 9 herein.
2.26. "PERFORMANCE UNIT" means an Award granted to a Participant, as
described in Article 9 herein.
2.27. "PERIOD OF RESTRICTION" means the period during which the transfer of
Shares of Restricted Stock is limited in some way (based on the passage of time,
the achievement of performance goals, or upon the occurrence of other events as
determined by the Committee, at its discretion), and the Shares are subject to a
substantial risk of forfeiture, as provided in Article 8 herein.
2.28. "PERSON" shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a "group" as defined in Section 13(d) thereof.
2.29. "RESTRICTED STOCK" means an Award granted to a Participant pursuant
to Article 8 herein.
2.30. "RETIREMENT" shall have the meaning ascribed to such term in the
Company's tax-qualified retirement plan.
2.31. "SHARES" means the shares of Class A common stock of the Company.
2.32. "STOCK APPRECIATION RIGHT" OR "SAR" means an Award, granted alone or
in connection with a related Option, designated as an SAR, pursuant to the terms
of Article 7 herein.
2.33. "SUBSIDIARY" means any corporation, partnership, joint venture, or
other entity in which the Company has a majority voting interest (including all
divisions, affiliates, and related entities).
2.34. "TANDEM SAR" means an SAR that is granted in connection with a
related Option pursuant to Article 7 herein, the exercise of which shall require
forfeiture of the right to purchase
3
<PAGE> 6
a Share under the related Option (and when a Share is purchased under the
Option, the Tandem SAR shall similarly be canceled).
ARTICLE 3. ADMINISTRATION
3.1. THE COMMITTEE. The Plan shall be administered by a committee appointed
by the Board. After the initial public offering of Shares in 1997, the Plan
shall be administered by the Compensation Committee of the Board consisting of
not less than two (2) Directors who meet the "outside director" requirements of
Code Section 162(m), or by any other committee appointed by the Board, provided
the members of such committee meet such requirements.
3.2. AUTHORITY OF THE COMMITTEE. Except as limited by law or by the
Certificate of Incorporation or Bylaws of the Company, and subject to the
provisions herein, the Committee shall have full power to select Employees who
shall participate in the Plan; determine the sizes and types of Awards;
determine the terms and conditions of Awards in a manner consistent with the
Plan; construe and interpret the Plan and any agreement or instrument entered
into under the Plan; establish, amend, or waive rules and regulations for the
Plan's administration; and (subject to the provisions of Article 15 herein)
amend the terms and conditions of any outstanding Award to the extent such terms
and conditions are within the discretion of the Committee as provided in the
Plan. Further, the Committee shall make all other determinations which may be
necessary or advisable for the administration of the Plan. As permitted by law,
the Committee may delegate its authority as identified herein.
3.3. DECISIONS BINDING. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders and
resolutions of the Board shall be final, conclusive, and binding on all persons,
including the Company, its stockholders, Employees, Participants, and their
estates and beneficiaries.
ARTICLE 4. SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS
4.1. NUMBER OF SHARES AVAILABLE FOR GRANTS. Subject to Sections 4.2 and 4.3
herein, the maximum number of Shares with respect to which Awards may be granted
to Participants under the Plan shall be seven and one-half percent (7.5%) of the
Company's total outstanding shares of all classes of common stock of the Company
as of the tenth (10th) day following the first day that the Company issues
Shares pursuant to its initial public offering. Shares issued under the Plan may
be either authorized but unissued Shares (subject to a maximum of 1,000,000
Shares), treasury Shares, or any combination thereof.
Unless and until the Committee determines that an Award to a Covered
Employee shall not be designed to comply with the Performance-Based Exception,
the following rules shall apply to grants of such Awards under the Plan, subject
to Sections 4.2 and 4.3.
(a) STOCK OPTIONS AND SARS: The maximum aggregate number of Shares
that may be subject to Stock Options, with or without Tandem SARs,
or Freestanding SARs, granted in any one fiscal year to any one
Participant shall be five hundred thousand (500,000).
(b) RESTRICTED STOCK: The maximum aggregate grant with respect to
Awards of Restricted Stock which are intended to qualify for
the Performance-Based Exception, and which
4
<PAGE> 7
are granted in any one fiscal year to any one Participant shall be
three hundred thousand (300,000) Shares.
(c) PERFORMANCE SHARES/PERFORMANCE UNITS: The maximum aggregate payout
(determined as of the end of the applicable performance period)
with respect to Awards of Performance Shares or Performance Units
which are intended to comply with the Performance-Based Exception,
and which are granted in any one fiscal year to any one
Participant shall be equal to the Fair Market Value of three
hundred thousand (300,000) Shares.
4.2. LAPSED AWARDS. If any Award granted under this Plan is canceled,
terminates, expires, or lapses for any reason (with the exception of the
termination of a Tandem SAR upon exercise of the related Option, or the
termination of a related Option upon exercise of the corresponding Tandem SAR),
any Shares subject to such Award again shall be available for the grant of an
Award under the Plan.
4.3. ADJUSTMENTS. In the event of any change in corporate capitalization
such as a stock split, or a corporate transaction such as any merger,
consolidation, separation, including a spin-off, or other distribution of stock
or property of the Company, any reorganization (whether or not such
reorganization comes within the definition of such term in Code Section 368) or
any partial or complete liquidation of the Company, such adjustment shall be
made in the number and class of Shares which may be delivered under Section 4.1,
in the number and class of and/or price of Shares subject to outstanding Awards
granted under the Plan, and in the Award limits set forth in subsections 4.1(a),
4. l(b), and 4. l(c), as may be determined to be appropriate and equitable by
the Committee, in its sole discretion, to prevent dilution or enlargement of
rights; provided, however, that the number of Shares subject to any Award shall
always be a whole number.
ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1. ELIGIBILITY. Persons eligible to participate in this Plan include
officers and certain key salaried Employees of the Company with potential to
contribute to the success of the Company or its Subsidiaries, including
Employees who are members of the Board.
5.2. ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all eligible Employees those to
whom Awards shall be granted, and shall determine the nature and amount of each
Award.
ARTICLE 6. STOCK OPTIONS
6.1. GRANT OF OPTIONS. Subject to the terms and provisions of the Plan,
Options may be granted to Participants in such number, and upon such terms, and
at any time and from time to time as shall be determined by the Committee.
6.2. AWARD AGREEMENT. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the duration of the Option, the
number of Shares to which the Option pertains, and such other provisions as the
Committee shall determine. The Award Agreement also shall specify whether the
Option is intended to be an ISO within the meaning of Code Section 422, or an
NQSO, whose grant is intended not to fall under the provisions of Code Section
422.
5
<PAGE> 8
6.3. OPTION PRICE. The Option Price for each grant of an Option under this
Plan shall be at least equal to one hundred percent (100%) of the Fair Market
Value of a Share on the date the Option is granted.
6.4. DURATION OF OPTIONS. Each Option granted to a Participant shall expire
at such time as the Committee shall determine at the time of grant; provided,
however, that no Option shall be exercisable later than the tenth (10th)
anniversary date of its grant.
6.5. EXERCISE OF OPTIONS. Options granted under this Article 6 shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which need not be the same for
each grant or for each Participant.
6.6. PAYMENT. Options granted under this Article 6 shall be exercised by
the delivery of a written notice of exercise to the Company, setting forth the
number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares.
The Option Price upon exercise of any Option shall be payable to the
Company in full either: (a) in cash or its equivalent; or (b) by tendering
previously acquired Shares having an aggregate Fair Market Value at the time of
exercise equal to the total Option Price (provided that the Shares which are
tendered must have been held by the Participant for at least six (6) months
prior to their tender to satisfy the Option Price); or (c) by a combination of
(a) and (b).
The Committee may also allow cashless exercise as permitted under Federal
Reserve Board's Regulation T, subject to applicable securities law restrictions,
or by any other means which the Committee determines to be consistent with the
Plan's purpose and applicable law.
Subject to any governing rules or regulations, as soon as practicable after
receipt of a written notification of exercise and full payment, the Company
shall deliver to the Participant, in the Participant's name, Share certificates
in an appropriate amount based upon the number of Shares purchased under the
Option(s).
6.7. RESTRICTIONS ON SHARE TRANSFERABILITY. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option
granted under this Article 6 as it may deem advisable, including, without
limitation, restrictions under applicable federal securities laws, under the
requirements of any stock exchange or market upon which such Shares are then
listed and/or traded, and under any blue sky or state securities laws applicable
to such Shares.
6.8. TERMINATION OF EMPLOYMENT. Each Participant's Option Award Agreement
shall set forth the extent to which the Participant shall have the right to
exercise the Option following termination of the Participant's employment with
the Company. Such provisions shall be determined in the sole discretion of the
Committee, shall be included in the Award Agreement entered into with each
Participant, need not be uniform among all Options issued pursuant to this
Article 6, and may reflect distinctions based on the reasons for termination of
employment.
6.9. NONTRANSFERABILITY OF OPTIONS.
(a) INCENTIVE STOCK OPTIONS. No ISO granted under the Plan may be
sold, transferred, pledged, assigned, or otherwise alienated
or hypothecated, other than by will or by the laws of descent
and distribution. Further, all ISOs granted to a Participant
under the
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Plan shall be exercisable during his or her lifetime only by such
Participant or the Participant's legal representative (to the
extent permitted under Code Section 422).
(b) NONQUALIFIED STOCK OPTIONS. Except as otherwise provided in a
Participant's Award Agreement, no NQSO granted under this Article
6 may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will or by the laws of
descent and distribution. Further, except as otherwise provided in
a Participant's Award Agreement, all NQSOs granted to a
Participant under this Article 6 shall be exercisable during his
or her lifetime only by such Participant or the Participant's
legal representative.
ARTICLE 7. STOCK APPRECIATION RIGHTS
7.1. GRANT OF SARS. Subject to the terms and conditions of the Plan, SARs
may be granted to Participants at any time and from time to time as shall be
determined by the Committee. The Committee may grant Freestanding SARs, Tandem
SARs, or any combination of these forms of SAR.
The Committee shall have complete discretion in determining the number of
SARs granted to each Participant (subject to Article 4 herein) and, consistent
with the provisions of the Plan, in determining the terms and conditions
pertaining to such SARs.
The grant pace of a Freestanding SAR shall equal the Fair Market Value of a
Share on the date of grant of the SAR. The grant price of Tandem SARs shall
equal the Option Price of the related Option.
7.2. EXERCISE OF TANDEM SARS. Tandem SARs may be exercised for all or part
of the Shares subject to the related Option upon the surrender of the right to
exercise the equivalent portion of the related Option. A Tandem SAR may be
exercised only with respect to the Shares for which its related Option is then
exercisable.
Notwithstanding any other provision of this Plan to the contrary, with
respect to a Tandem SAR granted in connection with an ISO: (i) the Tandem SAR
will expire no later than the expiration of the underlying ISO; (ii) the value
of the payout with respect to the Tandem SAR may be for no more than one hundred
percent (100%) of the difference between the Option Price of the underlying ISO
and the Fair Market Value of the Shares subject to the underlying ISO at the
time the Tandem SAR is exercised; and (iii) the Tandem SAR may be exercised only
when the Fair Market Value of the Shares subject to the ISO exceeds the Option
Price of the ISO.
7.3. EXERCISE OF FREESTANDING SARS. Freestanding SARs may be exercised upon
whatever terms and conditions the Committee, in its sole discretion, imposes
upon them.
7.4. SAR AGREEMENT. Each SAR grant shall be evidenced by an Award Agreement
that shall specify the grant price, the term of the SAR, and such other
provisions as the Committee shall determine.
7.5. TERM OF SARS. The term of an SAR granted under the Plan shall be
determined by the Committee, in its sole discretion; provided, however, that
such term shall not exceed ten (10) years.
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7.6. PAYMENT OF SAR AMOUNT. Upon exercise of an SAR, a Participant shall be
entitled to receive payment from the Company in an amount determined by
multiplying:
(a) The difference between the Fair Market Value of a Share on the
date of exercise over the grant price; by
(b) The number of Shares with respect to which the SAR is exercised.
At the discretion of the Committee, the payment upon SAR exercise may be in
cash, in Shares of equivalent value, or in some combination thereof. The
Committee's determination regarding the form of SAR payout shall be set forth in
the Award Agreement pertaining to the grant of the SAR.
7.7. TERMINATION OF EMPLOYMENT. Each SAR Award Agreement shall set forth
the extent to which the Participant shall have the right to exercise the SAR
following termination of the Participant's employment with the Company and/or
its subsidiaries. Such provisions shall be determined in the sole discretion of
the Committee, shall be included in the Award Agreement entered into with
Participants, need not be uniform among all SARs issued pursuant to the Plan,
and may reflect distinctions based on the reasons for termination of employment.
7.8. NONTRANSFERABILITY OF SARS. Except as otherwise provided in a
Participant's Award Agreement, no SAR granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, except as
otherwise provided in a Participant's Award Agreement, all SARs granted to a
Participant under the Plan shall be exercisable during his or her lifetime only
by such Participant or the Participant's legal representative.
ARTICLE 8. RESTRICTED STOCK
8.1. GRANT OF RESTRICTED STOCK. Subject to the terms and provisions of the
Plan, the Committee, at any time and from time to time, may grant Shares of
Restricted Stock to Participants in such amounts as the Committee shall
determine.
8.2. RESTRICTED STOCK AGREEMENT. Each Restricted Stock grant shall be
evidenced by a Restricted Stock Award Agreement that shall specify the Period(s)
of Restriction, the number of Shares of Restricted Stock granted, and such other
provisions as the Committee shall determine.
8.3. TRANSFERABILITY. Except as provided in this Article 8, the Shares of
Restricted Stock granted under the Plan may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated until the end of the applicable
Period of Restriction established by the Committee and specified in the
Restricted Stock Award Agreement, or upon earlier satisfaction of any other
conditions, as specified by the Committee in its sole discretion and set forth
in the Restricted Stock Award Agreement. All rights with respect to the
Restricted Stock granted to a Participant under the Plan shall be available
during his or her lifetime only to such Participant or the Participant's legal
representative.
8.4. OTHER RESTRICTIONS. Subject to Article 11 herein, the Committee shall
impose such other conditions and/or restrictions on any Shares of Restricted
Stock granted pursuant to the Plan as it may deem advisable including, without
limitation, a requirement that Participants pay a stipulated purchase price for
each Share of Restricted Stock, restrictions based upon the achievement of
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specific performance goals (Company-wide, divisional, and/or individual),
time-based restrictions on vesting following the attainment of the performance
goals, and/or restrictions under applicable federal or state securities laws.
The Company may retain the certificates representing Shares of Restricted
Stock in the Company's possession until such time as all conditions and/or
restrictions applicable to such Shares have been satisfied.
Except as otherwise provided in this Article 8, Shares of Restricted Stock
covered by each Restricted Stock grant made under the Plan shall become freely
transferable by the Participant after the last day of the applicable Period of
Restriction.
8.5. VOTING RIGHTS. Participants holding Shares of Restricted Stock granted
hereunder may be granted the right to exercise full voting rights with respect
to those Shares during the Period of Restriction.
8.6. DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of Restriction,
Participants holding Shares of Restricted Stock granted hereunder may be
credited with regular cash dividends paid with respect to the underlying Shares
while they are so held. The Committee may apply any restrictions to the
dividends that the Committee deems appropriate. Without limiting the generality
of the preceding sentence, if the grant or vesting of Restricted Shares granted
to a Covered Employee is designed to comply with the requirements of the
Performance-Based Exception, the Committee may apply any restrictions it deems
appropriate to the payment of dividends declared with respect to such Restricted
Shares, such that the dividends and/or the Restricted Shares maintain
eligibility for the Performance-Based Exception.
8.7. TERMINATION OF EMPLOYMENT. Each Restricted Stock Award Agreement shall
set forth the extent to which the Participant shall have the right to receive
unvested Restricted Shares following termination of the Participant's employment
with the Company. Such provisions shall be determined in the sole discretion of
the Committee, shall be included in the Award Agreement entered into with each
Participant, need not be uniform among all Shares of Restricted Stock issued
pursuant to the Plan, and may reflect distinctions based on the reasons for
termination of employment; provided, however, that except in the cases of
terminations by reason of death or Disability, the vesting of Shares of
Restricted Stock which qualify for the Performance-Based Exception and which are
held by Covered Employees shall occur at the time they otherwise would have, but
for the employment termination.
ARTICLE 9. PERFORMANCE UNITS AND PERFORMANCE SHARES
9.1. GRANT OF PERFORMANCE UNITS/SHARES. Subject to the terms of the Plan,
Performance Units and/or Performance Shares may be granted to Participants in
such amounts and upon such terms, and at any time and from time to time, as
shall be determined by the Committee.
9.2. VALUE OF PERFORMANCE UNITS/SHARES. Each Performance Unit shall have an
initial value that is established by the Committee at the time of grant. Each
Performance Share shall have an initial value equal to the Fair Market Value of
a Share on the date of grant. The Committee shall set performance goals in its
discretion which, depending on the extent to which they are met, will determine
the number and/or value of Performance Units/Shares that will be paid out to the
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Participant. For purposes of this Article 9, the time period during which the
performance goals must be met shall be called a "Performance Period."
9.3. EARNING OF PERFORMANCE UNITS/SHARES. Subject to the terms of this
Plan, after the applicable Performance Period has ended, the holder of
Performance Units/Shares shall be entitled to receive payout on the number and
value of Performance Units/Shares earned by the Participant over the Performance
Period, to be determined as a function of the extent to which the corresponding
performance goals have been achieved.
9.4. FORM AND TIMING OF PAYMENT OF PERFORMANCE UNITS/SHARES. Payment of
earned Performance Units/Shares shall be made in a single lump sum following the
close of the applicable Performance Period. Subject to the terms of this Plan,
the Committee, in its sole discretion, may pay earned Performance Units Shares
in the form of cash or in Shares (or in a combination thereof) which have an
aggregate Fair Market Value equal to the value of the earned Performance
Units/Shares at the close of the applicable Performance Period. Such Shares may
be granted subject to any restrictions deemed appropriate by the Committee. The
determination of the Committee with respect to the form of payout of such Awards
shall be set forth in the Award Agreement pertaining to the grant of the Award.
At the discretion of the Committee, Participants may be entitled to receive
any dividends declared with respect to Shares which have been earned in
connection with grants of Performance Units and/or Performance Shares, but not
yet distributed to Participants (such dividends shall be subject to the same
accrual, forfeiture, and payout restrictions as apply to dividends earned with
respect to Shares of Restricted Stock, as set forth in Section 8.6 herein). In
addition, Participants may, at the discretion of the Committee, be entitled to
exercise their voting rights with respect to such Shares.
9.5. TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR RETIREMENT.
Unless determined otherwise by the Committee and set forth in the Participant's
Award Agreement, in the event the employment of a Participant is terminated by
reason of death, Disability, or Retirement during a Performance Period, the
Participant shall receive a payout of the Performance Units/Shares which is
prorated, as specified by the Committee in its discretion.
Payment of earned Performance Units/Shares shall be made at a time
specified by the Committee in its sole discretion and set forth in the
Participant's Award Agreement. Notwithstanding the foregoing, with respect to
Covered Employees who retire during a Performance Period, payments shall be made
at the same time as payments are made to Participants who did not terminate
employment during the applicable Performance Period.
9.6. TERMINATION OF EMPLOYMENT FOR OTHER REASONS. In the event that a
Participant's employment terminates for any reason other than those reasons set
forth in Section 9.5 herein, all Performance Units/Shares shall be forfeited by
the Participant to the Company unless determined otherwise by the Committee, as
set forth in the Participant's Award Agreement.
9.7. NONTRANSFERABILITY. Except as otherwise provided in a Participant's
Award Agreement, Performance Units/Shares may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by will or by the
laws of descent and distribution. Further, except as otherwise provided in a
Participant's Award Agreement, a Participant's rights
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<PAGE> 13
under the Plan shall be exercisable during the Participant's lifetime only by
the Participant or the Participant's legal representative.
ARTICLE 10. PERFORMANCE MEASURES
Unless and until the Committee proposes for shareholder vote and
shareholders approve a change in the general performance measures set forth in
this Article 10, the attainment of which may determine the degree of payout
and/or vesting with respect to Awards to Covered Employees which are designed to
qualify for the Performance-Based Exception, the performance measure(s) to be
used for purposes of such grants shall be chosen from among net income either
before or after taxes, market share, customer satisfaction, profits, share
price, earnings per share, total shareholder return, return on assets, return on
equity, operating income, return on capital or investments, or economic value
added (including, but not limited to, any or all of such measures in comparison
to the Company's competitors, the industry, or some other comparator group).
The Committee shall have the discretion to adjust the determinations of the
degree of attainment of the preestablished performance goals; provided, however,
that Awards which are designed to qualify for the Performance-Based Exception,
and which are held by Covered Employees, may not be adjusted upward (the
Committee shall retain the discretion to adjust such Awards downward).
In the event that applicable tax and/or securities laws change to permit
Committee discretion to alter the governing performance measures without
obtaining shareholder approval of such changes, the Committee shall have sole
discretion to make such changes without obtaining shareholder approval. In
addition, in the event that the Committee determines that it is advisable to
grant Awards which shall not qualify for the Performance-Based Exception, the
Committee may make such grants without satisfying the requirements of Code
Section 162(m).
ARTICLE 11. 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 in case of his or her death before
he or she receives any or all of such benefit. Each such designation shall
revoke all prior designations by the same Participant, shall be in a form
prescribed by the Company, and will be effective only when filed by the
Participant in writing with the Company during the Participant's lifetime. In
the absence of any such designation, the Participant's beneficiary shall be
deemed to be the Person or Persons who receive(s) the Participant's life
insurance proceeds under the Company-paid life insurance plan. In the absence of
any such designation, or deemed designation, benefits remaining unpaid at the
Participant's death shall be paid to the Participant's estate.
ARTICLE 12. DEFERRALS
The Committee may permit or require a Participant to defer such
Participant's receipt of the payment of cash or the delivery of Shares that
would otherwise be due to such Participant by virtue of the exercise of an
Option or SAR, the lapse or waiver of restrictions with respect to Restricted
Stock, or the satisfaction of any requirements or goals with respect to
Performance Units/Shares. If any such deferral election is required or
permitted, the Committee shall, in its sole discretion, establish rules and
procedures for such payment deferrals.
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ARTICLE 13. RIGHTS OF EMPLOYEES
13.1. EMPLOYMENT. Nothing in the Plan shall interfere with or limit in any
way the right of the Company to terminate any Participant's employment at any
time, nor confer upon any Participant any right to continue in the employ of the
Company.
13.2. PARTICIPATION. No Employee shall have the right to be selected to
receive an Award under this Plan, or, having been so selected, to be selected to
receive a future Award.
ARTICLE 14. AMENDMENT, MODIFICATION, TERMINATION,
AND ADJUSTMENTS
14.1. AMENDMENT, MODIFICATION, AND TERMINATION. Subject to the terms of the
Plan, the Board, upon recommendation of the Committee, may at any time and from
time to time, alter, amend, suspend or terminate the Plan in whole or in part.
14.2. ADJUSTMENT OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR
NONRECURRING EVENTS. The Committee may make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events described in
Section 4.3 hereof) affecting the Company or the financial statements of the
Company or of changes in applicable laws, regulations, or accounting principles,
whenever the Committee determines that such adjustments are appropriate in order
to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan; provided that unless the Committee
determines otherwise, no such adjustment shall be authorized to the extent that
such authority would be inconsistent with the Plan or Awards meeting the
requirements of Section 162(m) of the Code, as from time to time amended.
14.3. AWARDS PREVIOUSLY GRANTED. Notwithstanding any other provision of the
Plan to the contrary (but subject to Section 14.3 hereof), no termination,
amendment, or modification of the Plan shall adversely affect in any material
way any Award previously granted under the Plan without the written consent of
the Participant holding such Award.
14.4. COMPLIANCE WITH CODE SECTION 162(m). At all times when Code Section
162(m) is applicable, all Awards granted under this Plan shall comply with the
requirements of Code Section 162(m); provided, however, that in the event the
Committee determines that such compliance is not desired with respect to any
Award or Awards available for grant under the Plan, then compliance with Code
Section 162(m) will not be required. In addition, in the event that changes are
made to Code Section 162(m) to permit greater flexibility with respect to any
Award or Awards available under the Plan, the Committee may, subject to this
Article 14, make any adjustments it deems appropriate.
ARTICLE 15. PAYMENT OF PLAN AWARDS AND CONDITIONS THEREON
15.1. EFFECT OF COMPETITIVE ACTIVITY. Anything contained in the Plan to the
contrary notwithstanding, if the employment of any Participant shall terminate,
for any reason other than death, while any Award to such Participant is
outstanding hereunder, and such Participant has not yet received the Shares
covered by such Award or otherwise received the full benefit of such Award, such
Participant, if otherwise entitled thereto, shall receive such Shares or benefit
only if, during the entire period from the date of such Participant's
termination to the date of such receipt, such Participant shall have earned out
such Award by (i) making himself or herself available, upon request, at
reasonable times and upon a reasonable basis, to consult with, supply
information to,
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<PAGE> 15
and otherwise cooperate with the Company or any Subsidiary or Affiliate thereof
with respect to any matter that shall have been handled by him or her or under
his or her supervision while he or she was in the employ of the Company or of
any Subsidiary or Affiliate thereof; and (ii) refraining from engaging in any
activity that is directly or indirectly in competition with any activity of the
Company or any Subsidiary or Affiliate thereof.
15.2. NONFULFILLMENT OF COMPETITIVE ACTIVITY CONDITIONS; WAIVERS UNDER THE
PLAN. In the event of a Participant's nonfulfillment of any condition set forth
in Section 15.1 hereof, such Participant's rights under any Award shall be
forfeited and canceled forthwith; provided, however, that the nonfulfillment of
such condition may at any time (whether before, at the time of, or subsequent to
termination of employment) be waived by the Committee upon its determination
that in its sole judgment there shall not have been and will not be any
substantial adverse effect upon the Company or any Subsidiary or Affiliate
thereof by reason of the nonfulfillment of such condition.
15.3. EFFECT OF INIMICAL CONDUCT. Anything contained in the Plan to the
contrary notwithstanding, all rights of a Participant under any Award shall
cease on and as of the date on which it has been determined by the Committee
that such Participant at any time (whether before or subsequent to termination
of such Participant's employment) acted in manner inimical to the best interests
of the Company or any Subsidiary or Affiliate thereof.
ARTICLE 16. WITHHOLDING
16.1. TAX WITHHOLDING. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy federal, state, and local taxes, domestic or foreign,
required by law or regulation to be withheld with respect to any taxable event
arising as a result of this Plan.
16.2. SHARE WITHHOLDING. With respect to withholding required upon the
exercise of Options or SARs, upon the lapse of restrictions on Restricted Stock,
or upon any other taxable event arising as a result of Awards granted hereunder,
Participants may elect, subject to the approval of the Committee, to satisfy the
withholding requirement, in whole or in part, by having the Company withhold
Shares having a Fair Market Value on the date the tax is to be determined equal
to the minimum statutory total tax which could be imposed on the transaction.
All such elections shall be irrevocable, made in writing, and signed by the
Participant, and shall be subject to any restrictions or limitations that the
Committee, in its sole discretion, deems appropriate.
ARTICLE 17. INDEMNIFICATION
Each person who is or shall have been a member of the Committee, or of the
Board, shall be indemnified and held harmless by the Company against and from
any loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action,
suit, or proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him or her in settlement thereof,
with the Company's approval, or paid by him or her in satisfaction of any
judgment in any such action, suit, or proceeding against him or her, provided he
or she shall give the Company an opportunity, at its own expense, to handle and
defend the same before he or she undertakes to handle and defend it on his or
her own behalf. The foregoing right of indemnification shall not be exclusive of
any other rights of indemnification to which such persons may be entitled under
the Company's Articles of
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Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the
Company may have to indemnify them or hold them harmless.
ARTICLE 18. SUCCESSORS
All obligations of the Company under the Plan with respect to Awards
granted hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.
ARTICLE 19. LEGAL CONSTRUCTION
19.1. GENDER AND NUMBER. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine, the plural shall
include the singular, and the singular shall include the plural.
19.2. SEVERABILITY. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
19.3. REQUIREMENTS OF LAW. The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
19.4. SECURITIES LAW COMPLIANCE. With respect to Insiders, transactions
under this Plan are intended to comply with all applicable conditions of Rule
16b-3 or its successors under the Exchange Act. To the extent any provision of
the Plan or action by the Committee fails to so comply, it shall be deemed null
and void, to the extent permitted by law and deemed advisable by the Committee.
19.5. GOVERNING LAW. To the extent not preempted by federal law, the Plan,
and all agreements hereunder, shall be construed in accordance with and governed
by the laws of the State of New Jersey.
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EXHIBIT 5
August 28, 1997
The Hertz Corporation
225 Brae Boulevard
Park Ridge, New Jersey 07656
Ladies and Gentlemen:
This will refer to the Registration Statement on Form S-8, as amended (File
No. 333-32543) (the "Registration Statement") filed by The Hertz Corporation
(the "Company") with the Securities and Exchange Commission (the "Commission")
pursuant to the Securities Act of 1933, as amended (the "Securities Act"), with
respect to 1,150,000 shares of Class A Common Stock, par value $.01 per share,
of the Company, 298,975 shares of which may be newly issued shares ("Newly
Issued Common Stock"), relating to the Company's Long-Term Equity Compensation
Plan (the "Plan").
As Senior Vice President and General Counsel of the Company, I am familiar
with the Certificate of Incorporation and the By-Laws of the Company and with
its affairs, including the action taken by the Company in connection with the
Plan. I also have examined such other documents and instruments and have made
such further investigation as I have deemed necessary or appropriate in
connection with this opinion.
Based upon the foregoing, it is my opinion that:
(1) The Company is duly incorporated and validly existing as a corporation
under the laws of the State of Delaware.
(2) All necessary corporate proceedings have been taken to authorize the
issuance of the shares of Newly Issued Common Stock registered under the
Registration Statement, and all such shares of Newly Issued Common Stock, when
issued and sold in accordance with the Plan, will be validly issued, fully paid
and non-assessable when amendment no. 1 to the Registration Statement shall have
become effective and the Company shall have received therefor the consideration
provided in the Plan (but not less than the par value thereof).
<PAGE> 2
The Hertz Corporation
August 28, 1997
Page 2
I hereby consent to the use of this opinion as Exhibit 5 to the
Registration Statement. In giving this consent, I do not admit that I am in the
category of persons whose consent is required under Section 7 of the Securities
Act or the Rules and Regulations of the Commission issued thereunder.
Very truly yours,
/s/ Paul M. Tschirhart
-------------------------------
Paul M. Tschirhart
Senior Vice President and
General Counsel
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in amendment no. 1 to the
Registration Statement of The Hertz Corporation on Form S-8 (File No. 333-32543)
of our report dated January 24, 1997, except for Note 14, as to which the date
is March 13, 1997, on our audits of the consolidated financial statements and
financial statement schedule of The Hertz Corporation as of December 31, 1996
and 1995, and for each of the three years ended December 31, 1996, which report
is included in the 1996 Annual Report on Form 10-K.
COOPERS & LYBRAND L.L.P.
Parsippany, New Jersey
August 25, 1997
