Hertz 2011 Annual Report Download - page 170

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
comply with New York Stock Exchange rules, we will be required to have a majority of independent
directors on our Board of Directors by no later than March 31, 2012 and we believe that we will fulfill this
requirement prior to such deadline.
The Stockholders Agreement grants to the investment funds associated with CD&R or to the board, with
the approval of the majority of the Sponsor Designees, the right to remove our chief executive officer. Any
replacement chief executive officer requires the consent of the investment funds associated with CD&R
as well as investment funds associated with at least one other Sponsor. It also contains restrictions on
the transfer of our shares, and provides for tag-along and drag-along rights, in certain circumstances.
The rights described above apply only for so long as the investment funds associated with the applicable
Sponsor maintain certain specified minimum levels of shareholdings in us.
The Stockholders Agreement limits the rights of the investment funds associated with or designated by
the Sponsors that have invested in our common stock and our affiliates, subject to several exceptions, to
own, manage, operate or control any of our ‘‘competitors’’ (as defined in the Stockholders Agreement).
The Stockholders Agreement may be amended from time to time in the future to eliminate or modify
these restrictions without our consent.
Registration Rights Agreement
On December 21, 2005, we entered into a registration rights agreement (as amended, the ‘‘Registration
Rights Agreement’’) with investment funds associated with or designated by the Sponsors. The
Registration Rights Agreement grants to certain of these investment funds the right, to cause us, at our
own expense, to use our best efforts to register such securities held by the investment funds for public
resale, subject to certain limitations. The exercise of this right is limited to three requests by the group of
investment funds associated with each Sponsor, except for registrations effected pursuant to Form S-3,
which are unlimited, subject to certain limitations, if we are eligible to use Form S-3. The secondary
offering of our common stock in June 2007 was effected pursuant to this Registration Rights Agreement.
In the event we register any of our common stock, these investment funds have the right to require us to
use our best efforts to include shares of our common stock held by them, subject to certain limitations,
including as determined by the underwriters. The Registration Rights Agreement provides for us to
indemnify the investment funds party to that agreement and their affiliates in connection with the
registration of our securities.
Director Compensation Policy
In November 2011, our Board of Directors amended and restated our Director Compensation Policy.
Pursuant to the policy prior to November 2011 our directors who are not also our employees each
received a $170,000 annual retainer fee, of which $70,000 was payable in cash and $100,000 was
payable in the form of shares of our common stock. Starting in November 2011, the policy now provides
that our directors who are not also our employees each receive a $210,000 annual retainer fee, of which
$85,000 is payable in cash and $125,000 is payable in the form of shares of our common stock.
The chairperson of our Audit Committee is paid an additional annual cash fee of $25,000 and each other
member of our Audit Committee is paid an additional annual cash fee of $10,000. The chairperson of our
Compensation Committee is paid an additional annual cash fee of $15,000 and each other member of
our Compensation Committee receives an additional annual cash fee of $10,000.
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