ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
The information contained in Item 2.04 regarding the waiver agreement is incorporated by reference herein.
ITEM 1.03 BANKRUPTCY OR RECEIVERSHIP
Voluntary Petitions for Bankruptcy
On
The Debtors continue to operate their business as "debtors-in-possession" under the jurisdiction of the Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Court. The Debtors are seeking approval of a variety of "first day" motions containing customary relief intended to assure the Debtors' ability to continue their ordinary course operations.
Additional information about the Chapter 11 Cases, including access to Court documents, is available online at https://restructuring.primeclerk.com/hertz, a website administered by Prime Clerk, a third party bankruptcy claims and noticing agent. The information on this web site is not incorporated by reference into, and does not constitute part of, this Form 8-K.
The filing of the Petitions constituted an event of default that accelerated the Debtors' obligations under certain debt instruments and triggered defaults, termination events and amortization events under certain obligations of the Non-Debtor Financing Subsidiaries (each as discussed further in Item 2.04 below) and other indebtedness, and such events caused defaults, amortization events and accelerations, as applicable, under certain other debt instruments, including under certain debt instruments of certain of the Debtors' International Subsidiaries. Promptly after filing the Petitions, the Debtors commenced notifying all of their known current or potential creditors of the bankruptcy filings. Notwithstanding these events under certain of our debt instruments, the automatic stay as a result of the Chapter 11 Cases prevents termination of the Debtors' fleet leases and the Debtors are not required to liquidate their vehicle fleet, and they may continue to utilize the current vehicle fleet in their operations and maintain control over the disposition of those vehicles, subject to the applicable provisions of the Bankruptcy Code.
ITEM 2.04 TRIGGERING EVENTS THAT ACCELERATE OR INCREASE A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT
The commencement of the Chapter 11 Cases constituted an event of default that
caused the automatic and immediate acceleration of the Debtors' obligations
under the instruments and agreements enumerated below (the "Due and Payable
Instruments"), comprising approximately
· the Credit Agreement, dated as of
borrowers from time to time party thereto, the several banks and other financial institutions from time to time party thereto and Barclays Bank PLC, as administrative agent and collateral agent, as the same has been amended, supplemented or otherwise modified from time to time, and the approximately$857.75 million outstanding under the revolving credit facility, including letters of credit issued thereunder, and the approximately$656.25 million outstanding under the term loan facility; 2
· the Letter of Credit Agreement, dated as of
several banks and other financial institutions from time to time party thereto and Barclays Bank PLC, as administrative agent and collateral agent, as the same has been amended, supplemented or otherwise modified from time to time, and the approximately$299.03 million outstanding thereunder;
· the Credit Agreement, dated as of
borrowers from time to time party thereto, the several banks and other financial institutions from time to time party thereto andCredit Agricole Corporate and Investment Bank , as administrative agent, as the same has been amended, supplemented or otherwise modified from time to time, and the approximately$93.0 million outstanding thereunder;
· the Credit Agreement, dated as of
party thereto andGoldman Sachs Mortgage Company , as administrative agent and issuing lender, as the same has been amended, supplemented or otherwise modified from time to time, and the approximately$200.00 million outstanding thereunder;
· the Indenture, dated as of
toHDTFS, Inc. ), as issuer, the subsidiary guarantors from time to time parties thereto, andWells Fargo Bank, National Association , as trustee, as the same has been amended, supplemented or otherwise modified from time to time, and the approximately$500.00 million aggregate outstanding principal amount of 6.250% Senior Notes due 2022 issued thereunder;
· the Indenture, dated as of
subsidiary guarantors from time to time parties thereto, andWells Fargo Bank, National Association , as trustee, as the same has been amended, supplemented or otherwise modified from time to time, and the approximately$800.00 million in aggregate outstanding principal amount of 5.500% Senior Notes due 2024 issued thereunder;
· the Indenture, dated as of
guarantors from time to time parties thereto, andWells Fargo Bank, National Association , as trustee and note collateral agent, as the same has been amended, supplemented or otherwise modified from time to time, and the approximately$350.00 million aggregate outstanding principal amount of 7.625% Senior Secured Second Priority Notes due 2022 issued thereunder;
· the Indenture, dated as of
guarantors from time to time parties thereto, andWells Fargo Bank, National Association , as trustee, as the same has been amended, supplemented or otherwise modified from time to time, and the approximately$500.00 million aggregate outstanding principal amount of 7.125% Senior Notes due 2026 issued thereunder;
· the Indenture, dated as of
subsidiary guarantors from time to time parties thereto, andWells Fargo Bank, National Association , as trustee, as the same has been amended, supplemented or otherwise modified from time to time, and the approximately$900.00 million aggregate outstanding principal amount of 6.000% Senior Notes due 2028 issued thereunder;
· the Indenture, dated as of
issuer, THC, as parent guarantor, the subsidiary guarantors from time to time parties thereto,Wilmington Trust, National Association , as trustee, Deutsche Bank AG,London Branch, as paying agent, andDeutsche Bank Luxembourg S.A. , as registrar, transfer agent and authenticating agent, as the same has been amended, supplemented or otherwise modified from time to time, and the approximately €225.00 million aggregate outstanding principal amount of 4.125% Senior Notes due 2021 (the "4.125% Notes") issued thereunder (though a waiver has been requested from the holders of the 4.125% Notes which, if obtained, would waive the applicable event of default untilSeptember 30, 2020 and rescind the acceleration of the 4.125% Notes caused by such event of default);
· the Indenture, dated as of
THC, as parent guarantor, the subsidiary guarantors from time to time parties thereto,Wilmington Trust, National Association , as trustee, Deutsche Bank AG,London Branch, as paying agent, andDeutsche Bank Luxembourg S.A. , as registrar, transfer agent and authenticating agent, as the same has been amended, supplemented or otherwise modified from time to time, and the €500.00 million aggregate outstanding principal amount of 5.500% Senior Notes due 2023 (the "5.500% 2023 Notes") issued thereunder (though a waiver has been requested from the holders of the 5.500% 2023 Notes and the requisite amount of such holders have provided their consent to such waiver, conditional on the waiver of the 4.125% Notes being obtained, and if such waiver becomes operative, would waive the applicable event of default untilSeptember 30, 2020 and rescind the acceleration of the 5.500% 2023 Notes caused by such event of default); and 3
· the Loan Agreement, made as of
Fleet Funding LP , as borrower,Donlen Fleet Leasing Ltd. , as seller,Computershare Trust Company of Canada , in its capacity as trustee ofStable Trust , as conduit lender, and Canadian Imperial Bank of Commerce, as committed lender, and the approximately CA$37.00 million outstanding thereunder.
The commencement of the Chapter 11 Cases also triggered defaults, termination
events and amortization events that caused certain available cash, including
cash generated from vehicle sales and returns to vehicle manufacturers, to be
applied towards the repayment of the obligations of the Company's Non-Debtor
Financing Subsidiaries under the instruments and agreements enumerated below
(the "Amortizing Instruments," and together with the Due and Payable
Instruments, the "Applicable Instruments"), comprising approximately
· the Amended and Restated Group I Supplement, dated as of
amended by Amendment No. 1 thereto, dated as ofJune 17, 2015 , the "Group I Supplement") to the Amended and Restated Base Indenture, dated as ofOctober 31, 2014 , by and betweenHVF II and The Bank of New York Mellon Trust Company, N.A. , as trustee (in such capacity, the "HVF II Trustee"), by and between HVF II and the HVF II Trustee;
· the Sixth Amended and Restated Series 2013-A Supplement to the Group I
Supplement, dated as of
Trustee, THC, as administrator (in such capacity, the "Group I Administrator"),
Deutsche Bank AG,
note purchasers party thereto from time to time, certain conduit investors
party thereto from time to time, and certain funding agents for the investor
groups party thereto from time to time, and the approximately
ITEM 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Retention Program
On
Each Retention Bonus was paid immediately, subject to repayment of 100% of such
award if the employment of the relevant employee participating in the Retention
Program is voluntarily terminated with the Debtors by such employee or is
terminated for any reason other than by the Company without "Cause" (as defined
in the Retention Program letter agreements), or on account of death or
Disability (as defined in the Retention Program letter agreements) before
Severance Plan
On
If any participant's employment is terminated for "Cause", due to his or her death or "Permanent Disability," or if a participant satisfies the conditions for "Retirement" (as such terms are defined in the Plan) or experiences any voluntary termination, the participant will not be entitled to any severance benefits under the Plan. However, if the participant's employment is terminated other than for "Cause", the executive is entitled to the following payments and benefits:
· A pro rata portion of any performance bonus that would have been payable to the
participant underHertz Global's annual incentive plan.
· A cash payment equal to a multiple (the "Severance Multiple"), based on the
participant's position, of the participant's base salary and bonus, payable in equal installments over a period of whole and/or partial years equal to the Severance Multiple (the "Severance Period"). The Severance Multiple is 1.0x (versus 1.5x in the prior plan) for each ofMr. Stone ,Mr. Jackson , and Ms. Allen. The bonus component of severance is determined by reference to the average actual bonuses paid to the participant for the three years prior to the year in which the termination occurs, or, for participants without a three-year bonus history, by reference to the average actual bonus the participant received in the most recent years or if a participant has not had an opportunity to earn or be awarded one full year's bonus as of the termination of employment, the participant's target bonus for the year of termination. 7
· Continued participation in
welfare benefit plans during the Severance Period (or, if earlier, the date the participant becomes eligible for comparable benefits provided by a subsequent employer).
Participants must execute a general release of claims against
The Plan will be administered by one or more individuals appointed by the Compensation Committee of the Board or, in the absence of an appointment, by the Senior Vice President of Human Resources (or the equivalent). The Plan may be amended or terminated at any time other than with respect to participants then receiving payments and benefits under the Plan.
The foregoing descriptions of the Retention Program and Plan are summaries and are qualified in their entirety by reference to the complete terms and conditions of the Retention Program and the Plan, which are attached hereto as Exhibits 10.2 and 10.3, respectively, to this Current Report on Form 8-K and is incorporated by reference herein.
ITEM 7.01 REGULATION FD DISCLOSURE.
Press Release
On
The information contained in this Item 7.01 and Exhibit 99.1 hereto shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and shall not be incorporated by reference into any filings under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in such filing.
ITEM 9.01 EXHIBITS (d) Exhibits Exhibit Number Title 10.1 Limited Waiver Agreement datedMay 22, 2020 , by and among others International Fleet Financing No.2 B.V. as issuer,Hertz Europe Limited as issuer administrator, Hertz Holdings Netherlands,Credit Agricole Corporate and Investment Bank as administrative agent,BNP Paribas Trust Corporation UK Limited as security trustee and the several committed note purchasers, commercial paper conduits, and certain funding agents for the investor groups, in each case, party thereto. 10.2 Form of Retention Program Letter Agreement. 10.3Amended and Restated Hertz Global Holdings, Inc. Severance Plan for Senior Executives. 99.1 Press Release ofHertz Global Holdings, Inc. andThe Hertz Corporation , datedMay 22, 2020 . 101.1 Pursuant to Rule 406 of Regulation S-T, the cover page to this Current Report on Form 8-K is formatted in Inline XBRL 104.1 Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit 101.1) 8
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Current Report on form 8-K contains "forward-looking statements" within the
meaning of federal securities laws. Words such as "expect" and "intend" and
similar expressions identify forward-looking statements, which include but are
not limited to statements related to our liquidity, the expected effects on our
business, financial condition and results of operations due to the spread of the
COVID-19 virus, the bankruptcy process, the Company's ability to obtain approval
from the
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