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EMPLOYMENT AGREEMENT EXHIBIT 10(iii)(A)(e)
AGREEMENT, dated as of February 17, 1995, between THE HERTZ CORPORATION, a
Delaware corporation, ("the Corporation"), THE HERTZ EQUIPMENT RENTAL
CORPORATION, a Delaware corporation ("HERC"), and DANIEL I. KAPLAN (the
"Executive").
WHEREAS, the Executive is currently employed in the capacity of President
of HERC, and the Executive is a key executive officer of the Corporation, (HERC
and the Corporation, or either of them as appropriate, will be referred to
hereafter in this Agreement as the "Employer"); and
WHEREAS, the parties to this Agreement acknowledge the possibility that
HERC (or substantially all the assets of HERC) may be sold during the "Term"
(as defined in Article 2 of this Agreement) resulting in a "Change in Control"
(as defined in Article 3 of this Agreement); and
WHEREAS, the Corporation and HERC desire that the Executive continue in the
employ of HERC in his present position or in a position of equal or greater
responsibility and compensation after a Change in Control, and the Executive
may desire to continue to be so employed; and
WHEREAS, HERC is willing to make a commitment to continue the employment
relationship for the Term subject to the conditions set forth in this
Agreement;
NOW THEREFORE, in consideration of the mutual promises contained herein and
other good and valuable consideration, the parties hereby agree as follows:
1. Employment Employer agrees to continue to employ and engage the
services of the Executive during the Term as President of HERC or with such
other title as the Employer and the Executive mutually may agree; provided
however, if there is a Change in Control, HERC will be solely responsible for
the employment obligations of the "Employer" as that term is used hereafter in
this Agreement and the Corporation will have no further obligation under this
Agreement.
2. Term The "Term" will consist of a period commencing on the date of
this Agreement and ending exactly five (5) years thereafter, unless terminated
earlier pursuant to Article 6 of this Agreement or unless a Change in Control
occurs. If a Change in Control occurs, the Term will recommence on the
effective date of the Change in Control and will end exactly five (5) years
thereafter, unless terminated earlier pursuant to Article 6 of this Agreement.
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If the Executive rejects employment by HERC upon a Change in Control, then the
Term will end as of the rejection and neither the Corporation nor HERC will
have any further obligation under this Agreement as of such date.
3. Change in Control For purposes of this Agreement, a "Change in
Control" of HERC will be deemed to occur if:
(a) any "person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) other than the Corporation becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act) directly or indirectly, of
securities of HERC representing 25% or more of the combined voting power of
HERC's then outstanding securities; or
(b) the shareholders of HERC approve a merger or
consolidation of HERC with any other corporation, other than a merger or
consolidation that would result in the voting securities of HERC outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) at least 80% of the combined voting power of the voting securities of
HERC or such surviving entity outstanding immediately after such merger or
consolidation (either alone or in combination with new or additional voting
securities held by management of HERC) or the shareholders of HERC approve a
plan of complete liquidation of HERC as an agreement for the sale or
disposition by HERC of all or substantially all HERC's assets; or
(c) HERC sells all or substantially all of its assets
to a third party.
4. Position and Duties
(a) During the Term, the Executive's position, duties
and responsibilities, including without limitation the position and stature of
the employees with whom he will be required to work or to whom he will be
required to report, will be substantially the same as in effect on the date
hereof, or as the same may be modified pursuant to a promotion of the Executive
or by mutual agreement of Employer and the Executive.
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(b) During the Term, the Executive agrees to devote
his full business time during normal business hours to the business and
affairs of the Employer, to use his best efforts to promote the interests of
the employer, and to perform faithfully and efficiently the responsibilities
assigned to him in accordance with the terms of this Agreement, to the extent
necessary to discharge such responsibilities, except for (i) services on
corporate, civic or charitable boards or committees not significantly
interfering with the performance of such responsibilities and (ii) periods of
vacation and sick leave to which he is entitled. It is expressly understood
and agreed that the Executive's continuing service on any boards and committees
with which he is connected, as a member or otherwise, as of the date hereof, or
any such service approved by the Employer during the term of employment, will
not be deemed to interfere with the performance of the Executive's services for
the Employer pursuant to this paragraph 4(b).
(c) The Executive covenants and agrees that during the
Term, and for as long as he is receiving payments hereunder, he will not (i)
directly or indirectly, own, manage, operate, consult, control, or be connected
in any manner with any competing business of the type and character of business
engaged in by the Employer, or (ii) on behalf of any competitor of the Employer
solicit business from, or attempt to convert to other methods of doing business
similar to that done by the Employer and its affiliates, any customer of the
Employer with which the Executive has or has had substantial contact as a
result of his employment with the Employer.
5. Compensation and Other Terms of Employment
(a) Base Salary During the Term, the Executive will
receive an annual base salary ("Base Salary"), payable in equal installments
not less frequently than twice per month, at an annual rate at least equal to
the aggregate annual base salary payable to the Executive by the Corporation as
of the date of this Agreement. The Base Salary will be reviewed and may be
increased at any time and from time to time in accordance with the Employer's
regular practices and based upon the current work performance of the Executive.
Any increase in the Base Salary will not serve to limit or reduce any other
obligation of the Employer hereunder, and after any such increase the Base
Salary will not be reduced from such increased level during the Term.
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(b) Incentive Compensation As a further compensation
during the Term, the Executive will be eligible for awards ("Incentive
Compensation") under the Employer's bonus and incentive compensation plans
based upon the actual work performance of the Executive for the time period in
respect of which such awards may be granted determined on no less favorable a
basis than those provided to the Executive by the Corporation under such plans
as are in effect as of the date of this Agreement.
(c) Retirement, Savings, Stock Options and Benefits
Plans In addition to the Base Salary and Incentive Compensation payable as
provided herein during the Term, the Executive will be entitled to participate
in all savings, stock options, retirement and employee welfare and benefit
plans and programs, and fringe benefit, vacation, sick leave, insurance and
perquisite policies, on a basis providing him with the opportunity to receive
aggregate compensation and benefits, on a before-tax basis, not less favorable
than those provided by the Corporation to the Executive under such plans,
programs and policies in effect as of the date of this Agreement. Nothing
herein will be construed to prevent the Employer from amending or altering any
such plans or programs so long as the Executive continues to have the
opportunity to receive aggregate compensation and benefits, on a before tax
basis, at a level not less favorable than those currently provided by the
Corporation. If there is a Change in Control, HERC will accept, adopt and
continue in effect for the Term all existing agreements between the Corporation
and the Executive providing for special pension, retirement or similar benefits
and perquisites not less favorable than those provided by the Corporation in
effect on the date of this Agreement. Any rights to benefits that become
vested under the terms of such plans, programs, policies and agreements but
that are to be paid or provided in future periods will continue to be so vested
notwithstanding the prior termination of this Agreement.
(d) Expenses During the Term the Executive will be
entitled to receive from the Employer prompt reimbursement for all reasonable
expenses incurred by the Executive in accordance with the policies and
procedures of the Employer in effect as of the date of this Agreement.
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6. Termination
(a) Death Except for the obligations of the employer
as set forth in Paragraph 5(c) hereof, this Agreement and the Term will
terminate automatically upon the Executive's death. All benefits and
compensation then accrued hereunder, and under any plans provided for under
Paragraph 5(c) hereof, will be paid to the Executive's beneficiaries, legal
representatives, or heirs as appropriate.
(b) Disability If, as a result of the Executive's
incapacity due to physical or mental illness, the Executive is absent from the
full-time performance of his duties with the Employer for six (6) consecutive
months, and if within thirty (30) days after written notice of termination is
given, the Executive has not returned to the full-time performance of his
duties, the Executive's employment may be terminated for disability, and the
Term will end on the date of such termination. During such period of absence,
the Executive will continue to receive the benefits provided in Article 5 of
this Agreement. Thereafter, the Executive's benefits will be determined under
the Employer's disability insurance plans and policies provided under Paragraph
5(c) of this Agreement.
(c) Cause The Employer may terminate the Executive's
employment for Cause. For purposes of this Agreement, "Cause" means (i) an act
or acts of dishonesty on the Executive's part that are intended to result in
his personal enrichment at the expense of the Employer, (ii) The Executive's
commission of a felony, (iii) any material violation by the Executive of his
responsibilities as described in Article 4 of this Agreement, or (iv) any
material breach of any provision of this Agreement by the Executive. If the
Executive's employment is terminated for Cause, the Term will end on the date
his employment is terminated. The Employer will pay the Executive his full
accrued Base Salary to the date of such termination at the rate in effect at
the time of such termination, and the Employer will have no further obligations
to the Executive under this Agreement. The Executive's employment will not be
terminated for Cause unless there shall have been delivered to the Executive a
resolution duly adopted by the Board of Directors of the Employer at a meeting
of the Board, which the Executive, together with his counsel, has an
opportunity upon reasonable notice to attend and to address the Board, such
resolution setting forth with particularity the basis for terminating
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the Executive for Cause. If the Cause is as defined in (iii) or (iv) above,
the Executive will have ten (10) days after receipt of written notice to
correct the conduct giving rise to the Cause.
(d) Resignation for Good Reason If there has been a Change
in Control, the Executive will be entitled to resign his employment from HERC
for Good Reason. For purposes of this Agreement, "Good Reason" means the
occurrence after a Change in Control and without the Executive's express
written consent of any of the following circumstances unless, in the case of
sub- paragraphs (i), (iv), (v), or (vi) of this Paragraph, such circumstances
are fully corrected within ten (10) days after the Executive gives HERC notice
of termination:
(i) the assignment of any duties inconsistent with the
Executive's status with HERC on the date of the Change in
Control or a substantial adverse alteration in the nature or
status of his responsibilities from those in effect
immediately prior to the Change in Control;
(ii) a reduction by HERC in the Executive's Base Salary as
in effect on the date hereof or as it may be increased from
time to time;
(iii) the failure by HERC to pay to the Executive any
portion of his Base Salary, Guaranteed Bonus, or any portion
of an installment or deferred compensation under any deferred
compensation program within seven (7) days of the date such
compensation is due;
(iv) the failure by HERC to continue in effect any
compensation plan in which the Executive participates
immediately prior to the Change in Control that is material to
his total compensation, including, but not limited to the
total compensation, including, but not limited to the
Incentive Compensation Plans for the Corporation or any
substitute plans adopted prior to the Change in Control,
unless an equitable arrangement (embodied in an ongoing
substitute or alternative (plan) has been made with respect to
such plan,
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or the failure by the Employer to continue his participation
therein (or in such substitute or alternative plan) on a basis
not materially less favorable, both in terms of the amount of
benefits provided and the level of participation relative to
other participants, as existed at the time of the Change in
Control;
(v) the failure by HERC to continue to provide the
Executive with the benefits as described in Article 5, or the
failure by HERC to provide the Executive with the number of
paid vacation days to which he is entitled on the basis of
years of service with HERC in accordance with the normal
vacation policy in effect at the time of the Change in
Control; or
(vi) the failure of HERC to obtain a satisfactory agreement
from any successor to assume and agree to perform this
Agreement.
The Executive's right to terminate his employment pursuant to this Paragraph
will not be affected by his incapacity due to physical or mental illness. His
continued employment will not constitute consent to, or a waiver of rights with
respect to, any circumstances constituting Good Reason hereunder. If the
Executive resigns for Good Reason, the Term will not end and he will be
entitled to receive, and HERC will be obligated to pay or provide, the Base
Salary and Incentive Compensation described in Article 5 for the balance of the
Term. In addition, the Retirement, Savings, Stock Options and Benefits Plans
described in Article 5 must be continued for the balance of the Term, but only
to the extent not prohibited by law or the applicable plan documents, and as
for the health benefits plans, only to the extent not otherwise provided by any
other employer.
(e) Voluntary Resignation or Retirement The Executive may
terminate his employment hereunder by "Voluntary Resignation", that is,
resignation for other than Good Reason as defined in Paragraph 6(d), or
retirement, including early retirement, under the Employer's retirement
policies existing on the effective date of this Agreement or under any policy
established for the Executive with his consent. If the Executive elects a
Voluntary Resignation or retirement prior to the termination of his employment
under this Agreement by the Employer, then the Term will end as of the date of
his Voluntary Resignation or retirement, and the Employer will have no further
obligation to the Executive under this Agreement.
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7. Successors; Binding Agreement The Employer will require
any successor (whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business or assets of the
Employer expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that the Employer would be required to perform it
if no such succession had taken place. Failure of the Employer to obtain such
assumption and agreement prior to the effectiveness of any such succession will
be a breach of this Agreement and will entitle the Executive to compensation
from the Employer in the same amount and on the same terms as he would be
entitled to hereunder if the Executive resigned for Good Reason following a
Change in Control. If the Corporation obtains the assumption of this Agreement
by the successor as required, the Executive agrees to release the Corporation
from any further obligations under this Agreement as of the effective date of
such assumption of this Agreement by the successor.
8. Non-exclusivity of Rights Nothing in this Agreement will
prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided by the Employer for
which the Executive may qualify; nor will anything herein limit or otherwise
affect such rights as the Executive may have under any stock option or other
agreements with the Employer. Amounts that are vested benefits or that the
Executive is otherwise entitled to receive under any plan or program of the
Employer will be payable in accordance with the terms of such plan or program.
9. No Set-Off; Legal Fees The Employer's obligation to make
the payments provided for herein and otherwise to perform its obligations
hereunder will not be affected by any circumstances, including without
limitation any set-off, counterclaim, recoupment, defense or other right that
the Employer may have against the Executive or others. Unless it is finally
determined by a court of competent jurisdiction after all available appeals
that the Employer has validly terminated the Executive's employment for Cause,
the Employer agrees to pay, to the full extent permitted by law, all legal fees
and expenses that the Executive may reasonably incur as a result of any contest
(regardless of the person commencing the action
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or the outcome thereof) with the Employer or others over the validity or
enforceability of, or liability under, any provision of this Agreement or any
guarantee of performance hereof.
10. Receipt of Certain Benefits It is the mutual and joint
intention of the parties to this Agreement that the Executive will receive the
full benefit of those compensation plans and programs of the Employer,
including retirement and pension plans and programs, being provided pursuant to
Article 5 of this Agreement including benefits payable over periods beyond the
particular year of employment ("Long-Term Plans"). Accordingly, the parties
intend that, in the event of any breach by the Employer of the terms of this
Agreement, damages for such breach will include consequential damages for the
loss of any benefits under such Long-Term Plans, which benefits would have
become payable under such plans had the Executive completed the Term remaining
at the time of such breach, but which are not payable under such plans by
reason of such breach.
11. Confidential Information The Executive will hold in a
fiduciary capacity for the benefit of the Employer all secret or confidential
information, knowledge or data relating to the Employer or any affiliated
companies and their respective businesses, that were obtained by the Executive
during his employment by the Employer or any of its affiliated companies and
that are not public knowledge. During and after the end of the Term, the
Executive will not, without the prior written consent of the Employer,
communicate or divulge any such information, knowledge or data to anyone other
than the Employer.
12. No Assignment; Assumption This Agreement is personal
to the Executive, and without the prior written consent of the Employer neither
the Agreement nor its benefits are assignable by the Executive other than by
will or the laws of descent and distribution applicable to benefits payable
after his death. This Agreement will inure to the benefit of and be
enforceable by the Executive's legal representatives. This Agreement will be
binding upon any successor to the business or assets of the Employer that
assumes this Agreement expressly, by operation of law, or otherwise.
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13. Miscellaneous
(a) This Agreement will be governed by and construed
in accordance with the laws of the State of Delaware, without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and will have no force or effect. This Agreement may not
be amended or modified other than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.
(b) All notices and other communications hereunder
will be in writing and will be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive:
15 Chadwich Road
Livingston, N.J. 07039
If to the Corporation:
225 Brae Boulevard
Park Ridge, N.J. 07656
Attention: Senior Vice President
and General Counsel
If to HERC:
225 Brae Boulevard
Park Ridge, N.J. 07656
or to such other address as either party will have furnished to the other in
writing in accordance with this Paragraph. Notice and communications are
effective when actually received by the addressee.
(c) The invalidity or unenforceability of any
provision of this Agreement will not affect the validity or enforceability of
any other provision of this Agreement.
(d) The Employer may withhold from any amounts payable
under this Agreement such federal, state or local taxes as are required to be
withheld pursuant to any applicable law or regulation.
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(e) This Agreement contains the entire understanding
of the parties hereto with respect to the subject matter hereof. Upon
execution by all parties hereto, this Agreement will supersede and render void
all previous agreements whether written or oral between or among any of the
parties concerning the subject matter of this Agreement.
IN WITNESS WHEREOF, The Hertz Corporation and Hertz Equipment
Rental Corporation have caused this Agreement to be signed in their corporate
names and their corporate seals to be hereunto affixed and to be attested by
their Secretaries or one of their Assistant Secretaries, and the Executive has
hereunto set his hand, all as of the day and year first above written.
-----------------------------------
DANIEL I. KAPLAN
Executive
ATTEST: THE HERTZ CORPORATION
- - ------------------------- By:--------------------------------
(Asst. Secretary) FRANK A. OLSON
(Seal) Chairman and Chief
Executive Officer
ATTEST: HERTZ EQUIPMENT RENTAL CORPORATION
- - ------------------------- By:--------------------------------
(Asst. Secretary) WILLIAM SIDER
(Seal) Vice President and Director
--------------------------------
PAUL M. TSCHIRHART
Vice President, Secretary and
Director
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