Agreement And Plan of Merger

Exhibit 10.1


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AGREEMENT AND PLAN OF MERGER


by and among


FORD MOTOR COMPANY,


FORD FSG, INC.,


FORD FSG II, INC.


and


THE HERTZ CORPORATION


Dated as of January 16, 2001


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TABLE OF CONTENTS


ARTICLE I


THE OFFER


SECTION 1.01. The Tender Offer SECTION 1.02. Company Action SECTION 1.03. Stockholder Lists


ARTICLE II


THE MERGER


SECTION 2.01. The Merger SECTION 2.02. Effective Time; Closing SECTION 2.03. Effect of the Merger SECTION 2.04. Certificate of Incorporation; By-laws; Directors
and Officers


ARTICLE III


CONVERSION OF COMMON STOCK; EXCHANGE OF CERTIFICATES


SECTION 3.01. Conversion of Common Stock SECTION 3.02. Exchange of Certificates SECTION 3.03. Stock Transfer Books SECTION 3.04. Appraisal


ARTICLE IV


REPRESENTATIONS AND WARRANTIES OF THE COMPANY


SECTION 4.01. Organization and Qualification SECTION 4.02. Restated Certificate of Incorporation and By-laws SECTION 4.03. Capitalization SECTION 4.04. Authority Relative to This Agreement SECTION 4.05. No Conflict; Required Filings and Consents SECTION 4.06. SEC Filings; Financial Statements SECTION 4.07. Options and Employment Contracts SECTION 4.08. Brokers SECTION 4.09. Opinion of Financial Advisor SECTION 4.10. State Takeover Statutes


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ARTICLE V


REPRESENTATIONS AND WARRANTIES OF FORD, PARENT AND FSG II


SECTION 5.01. Organization and Qualification SECTION 5.02. Authority Relative to This Agreement SECTION 5.03. No Conflict; Required Filings and Consents SECTION 5.04. Financing SECTION 5.05. Operations of FSG II


ARTICLE VI


CONDUCT OF BUSINESS PENDING THE MERGER


SECTION 6.01. Conduct of Business By the Company Pending the
Merger SECTION 6.02. Notification of Certain Matters


ARTICLE VII


ADDITIONAL AGREEMENTS


SECTION 7.01. Merger Without Stockholders' Meeting SECTION 7.02. Stockholder Approval Required SECTION 7.03. Covenants Relating to Information Statement SECTION 7.04. Access to Information; Confidentiality SECTION 7.05. Directors' and Officers' Indemnification and
Insurance SECTION 7.06. Further Action; Consents; Filings SECTION 7.07 Public Announcements SECTION 7.08. Reasonable Best Efforts and Further Assurances


ARTICLE VIII


CONDITIONS TO THE MERGER


SECTION 8.01. Conditions to the Obligations of Each Party


ARTICLE IX


TERMINATION, AMENDMENT AND WAIVER


SECTION 9.01. Termination SECTION 9.02. Effect of Termination SECTION 9.03. Amendment SECTION 9.04. Waiver


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SECTION 9.05. Expenses


ARTICLE X


GENERAL PROVISIONS


SECTION 10.01. Non-Survival of Representations, Warranties and Agreements SECTION 10.02. Notices SECTION 10.03. Certain Definitions SECTION 10.04. Severability SECTION 10.05. Entire Agreement; Assignment SECTION 10.06. Parties in Interest SECTION 10.07. Governing Law SECTION 10.08. Headings SECTION 10.09. Counterparts SECTION 10.10. Consent to Jurisdiction SECTION 10.11. Waiver of Jury Trial


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AGREEMENT AND PLAN OF MERGER, dated as of January 16, 2001 (this "AGREEMENT"), by and among Ford Motor Company, a Delaware corporation ("FORD"), Ford FSG, Inc., a Delaware corporation ("PARENT"), Ford FSG II, Inc., a Delaware corporation ("FSG II"), and The Hertz Corporation, a Delaware corporation (the "COMPANY").


W I T N E S S E T H


WHEREAS, the Company has authority to issue (i) 440,000,000 shares of Class A Common Stock, par value $.01 per share (the "CLASS A COMMON STOCK" or the "SHARES"), 40,177,324 of which were outstanding as of December 31, 2000, (ii) 140,000,000 shares of Class B Common Stock, par value $.01 per share (the "CLASS B COMMON STOCK" and, together with the Class A Common Stock, the "COMMON STOCK"), 67,310,167 of which are outstanding, and (iii) 40,000,000 shares of Preferred Stock, par value $.01 per share, none of which are outstanding;


WHEREAS, Parent owns (i) 20,245,833 shares of Class A Common Stock and all of the outstanding Class B Common Stock and (ii) all of the outstanding stock of FSG II;


WHEREAS, Ford, which owns directly or indirectly all of the outstanding stock of Parent, has proposed to the board of directors of the Company (the "BOARD") that Parent or an affiliate acquire the remaining Class A Common Stock not owned by Parent (the "PROPOSAL");


WHEREAS, the Board has established a special committee of the Board (the "SPECIAL COMMITTEE") to consider the Proposal and make a recommendation to the Board with respect thereto;


WHEREAS, it is proposed that Ford shall cause Parent to commence a tender offer (the "TENDER OFFER") to acquire any and all of the outstanding shares of Class A Common Stock, for an amount equal to $35.50 per Share (such amount, or any greater amount per Share paid pursuant to the Tender Offer, being hereinafter referred to as the "OFFER PRICE"), net to the seller in cash, upon the terms and subject to the conditions provided herein;


WHEREAS, the Special Committee (i) has determined that it is fair to and in the best interests of the Company and its stockholders (other than Parent and its affiliates) to


consummate the Tender Offer and the merger of FSG II with and into the Company, with the Company being the surviving corporation (the "MERGER"), upon the terms and subject to the conditions of this Agreement and in accordance with the General Corporation Law of the State of Delaware ("DELAWARE LAW"), (ii) has determined that the Tender Offer, the Merger and this Agreement should be approved and declared advisable by the Board and (iii) has resolved to recommend that the Company's stockholders accept the Tender Offer, tender their Shares pursuant thereto and approve and adopt this Agreement and the Merger if submitted for their approval;


WHEREAS, based on the recommendation of the Special Committee, the Board (i) has determined that it is fair to and in the best interests of the Company and its stockholders (other than Parent and its affiliates) to consummate the Tender Offer and the Merger upon the terms and subject to the conditions of this Agreement and in accordance with Delaware Law, (ii) has approved and declared advisable the Tender Offer, the Merger and this Agreement and (iii) has resolved to recommend that the Company's stockholders accept the Tender Offer, tender their Shares pursuant thereto and approve and adopt this Agreement and the Merger if submitted for their approval; and


WHEREAS, the board of directors of each of Parent and FSG II (i) has determined that the Tender Offer and the Merger are fair to and in the best interests of Parent and FSG II, respectively, and their respective stockholders and (ii) has approved and declared advisable the Tender Offer, the Merger and this Agreement.


NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, Ford, Parent, FSG II and the Company hereby agree as follows:


ARTICLE I


THE OFFER


SECTION 1.01. THE TENDER OFFER. (a) Provided that none of the events set forth in Annex A hereto shall have occurred or be existing, as soon as practicable (but in no event later than fifteen business days from the public announcement of the terms of this Agreement) Ford shall cause Parent to commence


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the Tender Offer. The initial expiration date of the Tender Offer shall be the twentieth business day from and after the date the Tender Offer is commenced (the "INITIAL EXPIRATION DATE"). The obligation of Ford to cause Parent to commence the Tender Offer and to accept for payment and pay for Shares tendered pursuant to the Tender Offer shall be subject only to the conditions set forth in Annex A hereto, any of which conditions may be waived by Parent in its sole discretion. Parent expressly reserves the right to amend or make changes to the terms and conditions of the Tender Offer; provided, however, that, without the prior written consent of the Company (expressed in a resolution adopted by both the Special Committee and the Board), Parent shall not (i) decrease the Offer Price or change the form of consideration to be paid in the Tender Offer, (ii) impose any additional conditions to the Tender Offer from those set forth in Annex A hereto, or (iii) otherwise amend the Tender Offer in a manner that would adversely affect the holders of Shares. The Company agrees that no Shares held by the Company or any subsidiary of the Company will be tendered pursuant to the Tender Offer. Notwithstanding anything in this Agreement to the contrary, without the consent of the Company, Parent shall have the right to extend the Tender Offer beyond the Initial Expiration Date in the following events: (i) from time to time if, at the Initial Expiration Date (or extended expiration date of the Tender Offer, if applicable), any of the conditions to the Tender Offer shall not have been satisfied or waived; (ii) for any period required by any rule, regulation, interpretation or position of the Securities and Exchange Commission (the "SEC") or the staff thereof applicable to the Tender Offer or any period required by applicable law; (iii) for an aggregate period not to exceed ten business days (for all such extensions), if all of the conditions to the Tender Offer are satisfied or waived but the number of Shares validly tendered and not withdrawn is insufficient to result in Parent owning at least ninety percent of the then outstanding number of Shares; or (iv) pursuant to an amendment to the Tender Offer providing for a "subsequent offering period" not to exceed twenty business days to the extent permitted under, and in compliance with, Rule 14d-11 under the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"). Following the satisfaction or waiver of the conditions to the Tender Offer, Ford shall cause Parent to accept for payment, in accordance with the terms of the Tender Offer, all Shares validly tendered pursuant to the Tender Offer and not withdrawn as soon as it is permitted to do so pursuant to applicable law.


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(b) Ford shall cause Parent to file with the SEC on the date that the Tender Offer is commenced (i) a Tender Offer Statement on Schedule TO (together with any supplements or amendments thereto, the "SCHEDULE TO") which will contain, among other things, the offer to purchase, form of the related letter of transmittal and summary advertisement (together with any supplements or amendments thereto, the "TENDER OFFER DOCUMENTS"), and (ii) together with Ford, FSG II and the Company, a Rule 13e-3 Transaction Statement on Schedule 13E-3 with respect to the Tender Offer which shall be filed as a part of the Schedule TO. The Tender Offer Documents shall comply in all material respects with the provisions of applicable federal securities laws and, on the date filed with the SEC and on the date first published, sent or given to the Company's stockholders, shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except that no representation is made by Ford or Parent with respect to information supplied by the Company in writing for inclusion in the Tender Offer Documents. Each of Ford and Parent further agrees to take all steps necessary to cause the Tender Offer Documents to be filed with the SEC and to be disseminated to holders of Shares, in each case as and to the extent required by applicable federal securities laws. Each of Ford and Parent, on the one hand, and the Company, on the other hand, agrees promptly to correct any information provided by it for use in the Tender Offer Documents if and to the extent that it shall have become false and misleading in any material respect and Ford further agrees to cause Parent to take all steps necessary to cause the Tender Offer Documents as so corrected to be filed with the SEC and to be disseminated to holders of Shares, in each case as and to the extent required by applicable federal securities laws. The Company and its counsel shall be given the opportunity to review the initial Schedule TO before it is filed with the SEC. In addition, Ford and Parent agree to provide the Company and its counsel with any comments or other communications that Ford, Parent or their counsel may receive from time to time from the SEC or its staff with respect to the Tender Offer Documents promptly after the receipt of such comments or other communications.


SECTION 1.02. COMPANY ACTION. The Company hereby approves of and consents to the Tender Offer. Concurrently with the filing of the Schedule TO, the Company shall file with the SEC and mail to the holders of Shares a


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Solicitation/Recommendation Statement on Schedule 14D-9 (together with any supplements or amendments thereto, the "SCHEDULE 14D-9"). The Schedule 14D-9 will set forth, and the Company hereby represents to Ford and Parent, that (a) each of the Special Committee and the Board of Directors of the Company, at meetings duly called and held, has (i) determined that each of the Tender Offer and the Merger is fair to and in the best interests of the Company's stockholders (other than Parent and its affiliates); (ii) approved this Agreement and the transactions contemplated hereby, including, without limitation the Tender Offer and the Merger; and (iii) resolved to recommend that the Company's stockholders accept the Tender Offer, tender their Shares pursuant thereto and approve and adopt this Agreement and the Merger if submitted for their approval; provided, however, that such recommendation may be withdrawn or modified to the extent that the Board, based on the recommendation of the Special Committee, determines in good faith, based on the advice of outside counsel, that such recommendation would be inconsistent with its fiduciary duties to the Company's stockholders under applicable law; and (b) Lazard Freres & Co. LLC, the financial advisor to the Special Committee ("LAZARD LLC"), has delivered to the Special Committee and the Board its written opinion that the consideration to be received by the stockholders of the Company (other than Parent and its affiliates) pursuant to each of the Tender Offer and the Merger is fair to such stockholders from a financial point of view. The Schedule 14D-9 will comply in all material respects with the provisions of applicable federal securities laws and, on the date filed with the SEC and on the date first published, sent or given to the Company's stockholders, shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except that no representation is made by the Company with respect to information supplied by Ford or Parent in writing for inclusion in the Schedule 14D-9. The Company further agrees to take all steps necessary to cause the Schedule 14D-9 to be filed with the SEC and to be disseminated to holders of Shares, in each case as and to the extent required by applicable federal securities laws. Each of the Company, on the one hand, and Ford and Parent, on the other hand, agrees promptly to correct any information provided by it for use in the Schedule 14D-9 if and to the extent that it shall have become false and misleading in any material respect and the Company further agrees to take all steps necessary to cause the Schedule 14D-9 as so corrected to be filed with the SEC and to be disseminated to holders of the


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Shares, in each case as and to the extent required by applicable federal securities laws. Parent and its counsel shall be given the opportunity to review the initial Schedule 14D-9 before it is filed with the SEC. In addition, the Company agrees to provide Ford, Parent and their counsel with any comments or other communications that the Company or its counsel may receive from time to time from the SEC or its staff with respect to the Schedule 14D-9 promptly after the receipt of such comments or other communications.


SECTION 1.03. STOCKHOLDER LISTS. In connection with the Tender Offer, the Company shall promptly furnish Parent with mailing labels, security position listings of Shares held in stock depositories and any available listing or computer file containing the names and addresses of the record holders of Shares, each as of the most recent practicable date, and shall promptly furnish Parent with such additional information, including updated lists of stockholders, mailing labels and lists of securities positions and such other information and assistance as Parent or its agents may reasonably request in connection with communicating to the record and beneficial holders of Shares with respect to the Tender Offer and the Merger.


ARTICLE II


THE MERGER


SECTION 2.01. THE MERGER. Upon the terms and subject to the conditions set forth in Article VIII, and in accordance with Delaware Law, at the Effective Time (as defined below), FSG II shall be merged with and into the Company. As a result of the Merger, the separate corporate existence of FSG II shall cease and the Company shall continue as the surviving corporation of the Merger (the "SURVIVING CORPORATION").


SECTION 2.02. EFFECTIVE TIME; CLOSING. As promptly as practicable and in no event later than the third business day following the satisfaction or, if permissible, waiver of the conditions set forth in Article VIII (or such other date as may be agreed in writing by the parties hereto), the parties hereto shall cause the Merger to be consummated by filing a certificate of merger or a certificate of ownership and merger, as appropriate (either, the "CERTIFICATE OF MERGER") with the Secretary of State of the State of Delaware, in such form as is required by, and executed in accordance with, the relevant provisions of Delaware Law. The term "EFFECTIVE TIME" means the


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date and time of the filing with the Secretary of State of the State of Delaware of the Certificate of Merger (or such later time as may be agreed upon in writing by the parties hereto and specified in the Certificate of Merger). Immediately prior to the filing of the Certificate of Merger, a closing (the "CLOSING") will be held at the principal office of Parent located at One American Road, Dearborn, Michigan (or such other place as the parties hereto may agree).


SECTION 2.03. EFFECT OF THE MERGER. At the Effective Time, the effect of the Merger shall be as provided in the applicable provisions of Delaware Law. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all the property, rights, privileges, powers and franchises of FSG II and the Company shall vest in the Surviving Corporation, and all debts, liabilities, obligations, restrictions, disabilities and duties of FSG II and the Company shall become the debts, liabilities, obligations, restrictions, disabilities and duties of the Surviving Corporation.


SECTION 2.04. CERTIFICATE OF INCORPORATION; BY-LAWS; DIRECTORS AND OFFICERS. (a) At the Effective Time, the Restated Certificate of Incorporation of the Company, as in effect immediately prior to the Effective Time, shall be the Restated Certificate of Incorporation of the Surviving Corporation until thereafter amended in accordance with Delaware Law and such Restated Certificate of Incorporation.


(b) At the Effective Time, the By-laws of the Company, as in effect immediately prior to the Effective Time, shall be the By-laws of the Surviving Corporation until thereafter amended in accordance with Delaware Law, the Restated Certificate of Incorporation of the Surviving Corporation and such By-laws.


(c) From and after the Effective Time, until successors are duly elected or appointed and qualified in accordance with applicable law, (i) the directors of the Company at the Effective Time shall be the directors of the Surviving Corporation and (ii) the officers of the Company at the Effective Time shall be the officers of the Surviving Corporation.


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ARTICLE III


CONVERSION OF COMMON STOCK; EXCHANGE OF CERTIFICATES


SECTION 3.01. CONVERSION OF COMMON STOCK. At the Effective Time, by virtue of the Merger and without any action on the part of any party hereto or the holders of Common Stock:


(a) each share of Common Stock issued and outstanding immediately
prior to the Effective Time (other than any Dissenting Shares, as defined
in Section 3.04, and any shares to be canceled pursuant to Section 3.01(b))
shall be converted into the right to receive the Offer Price in cash (the
"MERGER CONSIDERATION"); and


(b) each share of Common Stock held in the treasury of the Company or
owned by Parent or any direct or indirect wholly-owned subsidiary of Parent
or the Company immediately prior to the Effective Time shall be canceled
and extinguished without any conversion thereof and no payment or
distribution shall be made with respect thereto; and


(c) each share of common stock, par value $.01 per share, of FSG II
issued and outstanding immediately prior to the Effective Time shall be
converted into one share of Class A Common Stock of the Surviving
Corporation.


SECTION 3.02. EXCHANGE OF CERTIFICATES. (a) PAYING AGENT. Prior to the Effective Time, Parent shall designate a bank or trust company to act as paying agent in the Merger (the "PAYING AGENT") and shall deposit or cause FSG II to deposit with the Paying Agent immediately available funds in an amount sufficient for the payment of the aggregate Merger Consideration upon surrender of Certificates (as hereinafter defined) representing shares of Common Stock converted pursuant to Section 3.01(a) (such funds being hereinafter referred to as the "EXCHANGE FUND").


(b) EXCHANGE PROCEDURES. Promptly after the Effective Time, Parent shall cause the Paying Agent to mail to each holder of record (other than Parent or any direct or indirect wholly-owned subsidiary of Parent) of a certificate or certificates that immediately prior to the Effective Time represented shares of Common Stock (the "CERTIFICATES"), (i) a letter of transmittal (which shall specify that delivery shall


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be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Paying Agent and shall be in a form and have such other provisions as Parent may reasonably specify) and (ii) instructions for use in effecting the surrender of the Certificates in exchange for the Merger Consideration. Upon surrender of a Certificate for cancellation to the Paying Agent or to such other agent or agents as may be appointed by Parent, together with such letter of transmittal, duly executed, and such other documents as may reasonably be required by the Paying Agent, the holder of such Certificate shall be entitled to receive in exchange therefor, and the Paying Agent shall pay, the Merger Consideration for each share of Common Stock formerly evidenced by such Certificate, and such Certificate shall thereupon be canceled. If payment of the Merger Consideration is to be made to a person other than the person in whose name the surrendered Certificate is registered on the stock transfer books of the Company, it shall be a condition of payment to the holder of a Certificate that it be endorsed properly or otherwise be in proper form for transfer and that the person requesting such payment shall have paid all transfer and other taxes required by reason of the payment of the Merger Consideration to a person other than the registered holder thereof or shall have established to the satisfaction of the Surviving Corporation that such taxes are not applicable. Until surrendered as contemplated by this Section 3.02, each Certificate shall be deemed at any time after the Effective Time to represent only the right to receive upon such surrender the Merger Consideration into which the shares theretofore represented by such Certificate shall have been converted pursuant to Section 3.01(a). No interest will be paid or will accrue on the cash payable upon the surrender of any Certificate.


(c) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange Fund which remains undistributed for six (6) months after the Effective Time shall be delivered to Parent, upon demand, and any holders of shares of Common Stock who have not theretofore complied with this Article III shall thereafter look only to Parent for payment of the Merger Consideration to which they are entitled, without any interest thereon. Any portion of the Exchange Fund remaining unclaimed as of a date which is immediately prior to such time as such amounts would otherwise escheat to or become property of any government entity shall, to the extent permitted by applicable law, become the property of Parent free and clear of any claims or interest of any person previously entitled thereto.


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(d) NO LIABILITY. Neither Parent nor the Surviving Corporation shall be liable to any holder of shares of Common Stock for any amounts delivered to a public official pursuant to any abandoned property, escheat or similar law.


(e) WITHHOLDING RIGHTS. Each of the Surviving Corporation, Parent and the Paying Agent shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to any holder of shares of Common Stock such amounts as it is required to deduct and withhold with respect to the making of any payment under the Internal Revenue Code of 1986, as amended (the "CODE"), or any provision ...