Hertz 2014 Annual Report Download - page 261

Table of Contents
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Hertz Holdings and its subsidiaries have entered into employment agreements and Change in Control Agreements with certain key employees,
including certain of the NEOs, to promote stability and continuity of senior management. Information about such agreements and the separation
agreements with the five NEOs who separated during 2014 or in 2015 prior to the filing of this Form 10-K is set forth below. All of the agreements
referred to below are listed in the Exhibit Index to this Annual Report on Form 10-K.
Employment Agreement with John P. Tague
On November 20, 2014, Mr. Tague signed a term sheet outlining the employment terms between him and Hertz Holdings, which was memorialized
in Mr. Tague’s employment agreement executed on December 16, 2014. Under the employment agreement, Mr. Tague will serve as CEO of Hertz
Holdings and Hertz from November 21, 2014, through December 31, 2017, unless terminated earlier. Mr. Tague is entitled to an annual base salary
of $1,450,000, received a guaranteed bonus of $108,750 for 2014 and is eligible to receive a target bonus for 2015 and beyond of 150% of his
annual base salary, though for 2015, the annual bonus shall be no less than 60% of his target bonus. Mr. Tague is generally entitled to receive the
benefits and perquisites we provide to our senior executives.
Mr. Tague’s employment agreement, as modified by a letter agreement dated March 31, 2015 and a letter agreement dated June 30, 2015, also
awarded Mr. Tague 1,000,000 stock options, 500,000 of which will vest on December 31, 2015 if Mr. Tague presents a business plan that is
approved by the Board by December 31, 2015 and a management team is in place by June 30, 2015 that is reasonably acceptable to the Board.
The remaining 500,000 options shall vest based on the achievement of revenue efficiency metrics. In addition, we agreed to award Mr. Tague
350,000 PSUs, on substantially the same terms as the Performance Options listed in the preceding sentence, to be issued when Hertz Holdings
becomes current in its Exchange Act reporting requirements. The stock options and PSUs contemplated by Mr. Tague’s employment agreement
are intended to cover a multiple year period from November 20, 2014 to December 31, 2017. Based on applicable SEC and accounting rules, the
500,000 Transition Options were recognized as granted in 2014. However, the Performance Options and PSUs were not recognized as granted in
2014 because our Compensation Committee did not establish revenue efficiency targets for the awards until 2015. As a result, only the Transition
Options will be reported in Mr. Tague’s compensation in 2014. The Board and Compensation Committee do not intend to grant Mr. Tague any other
equity awards for 2015. For additional description of Mr. Tague’s equity awards, see “Long-Term Equity Incentives-Award Structure for John P.
Tague” above.
The employment agreement also provides that if Mr. Tague’s employment is terminated other than for “Cause”, by Mr. Tague for “Good Reason” or
due to death or “Disability” (all as defined in the employment agreement), Mr. Tague shall be entitled to: (i) a cash payment consisting of Mr.
Tague’s unpaid base salary through the date of termination, earned but unpaid bonus for any completed fiscal year and accrued and unused
vacation pay, (ii) prorated vesting of the stock option grants and the PSU grants, with performance metrics deemed satisfied at target levels and
(iii) eligibility of certain expenses for relocation back to Texas. If Mr. Tague terminated employment for any other reason, then he will only be
entitled to unpaid base salary through date of termination and accrued and unused vacation pay.
Mr. Tague’s term sheet is filed as exhibit 10.1 to the Form 8-K the Company filed on November 25, 2014, Mr. Tague’s employment agreement is
filed as exhibit 10.1 to the Form 8-K/A the Company filed on December 22, 2014, Mr. Tague’s letter agreement dated March 31, 2015 is filed as
exhibit 10.1 to the Form 8-K the Company filed on April 3, 2015 and Mr. Tague’s letter agreement dated June 30, 2015 is filed as exhibit 10.41 to
this Annual Report on Form 10-K.
Other Named Executive Officers
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On January 20, 2015 Hertz Holdings and Mr. Kennedy entered into an arrangement whereby we agreed that Mr. Kennedy’s base salary would be
set at $700,000 for 2015, he would receive a 2015 equity award with a value of $4 million, no equity award in 2016, and subsequent equity awards
with a $2 million target value.
Mr. Kennedy’s letter agreement is filed as exhibit 10.42 to this Annual Report on Form 10-K.
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Source: HERTZ GLOBAL HOLDINGS INC, 10-K, July 16, 2015 Powered by Morningstar® Document Research℠
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