Carl Icahn Strikes Deal With Hertz To Appoint His Three Nominees To Board

(RTTNews) - Car and equipment rental company Hertz Global Holdings, Inc. (HTZ) said Tuesday it has executed a definitive agreement with activist investor Carl Icahn and affiliated entities related to the appointment of three of his nominees as new independent directors.

In return, Icahn has agreed not to run a proxy contest and vote the shares he controls in support of Hertz's slate of director nominees at the company's 2015 annual meeting of shareholders. Icahn and his affiliates have also agreed to other customary standstill provisions.

The deal saw Icahn nominees, Vincent Intrieri, Samuel Merksamer and Daniel Ninivaggi, been appointed to the Hertz board of directors as Class II, Class I and Class I directors, respectively. The three were also appointed as directors to Hertz Corp. board of directors.

Intrieri has been employed by Icahn-related entities since October 1998 in various investment-related capacities, and Merksamer is a managing director of Icahn Capital. Meanwhile, Ninivaggi has served as a director of Icahn Enterprises L.P. and its general partner, Icahn Enterprises G.P., Inc., since March 2012.

To make way for the new directors, Henry Wolf, Barry Beracha and Philippe Laffont have retired from the board. The Hertz board now comprises nine independent directors and will expand to ten directors upon the appointment of a permanent CEO.

Early last week, Hertz said its chairman and CEO Mark Frissora stepped down from the position for personal reasons. The board appointed Brian MacDonald as interim CEO.

The search for a new CEO is been conducted by a five-person search committee, chaired by Independent Non-Executive Chair Linda Fayne Levinson. Two of the new independent directors, Intrieri and Merksamer, will be members of the committee.

"This is a great outcome for Hertz and its shareholders and I thank the Hertz Board for taking this important step in putting the Company back on track. Our director designees look forward to working with Linda and the other Board members to identify a permanent CEO, " Icahn said in a statement.

Icahn and his affiliates, together beneficially owns about 38.8 million shares of Hertz common stock, which represents about 8.48 percent of Hertz's outstanding shares.

Icahn revealed in a regulatory filing on August 20 that he has acquired an 8.48 percent stake in Hertz for about $470.5 million and plans to seek board representations as he believes the the care rental company's stock is undervalued.

Icahn said at that time that he intends to have discussions with Hertz's Board relating to shareholder value, accounting issues, operational failures, under performance relative to its peers and his lack of confidence in management.

Icahn's disclosure came at a time when Hertz was reviewing its financial records of the past three years to fix accounting errors as well as on the path to spin-off of its equipment rental business. The company also recently withdrew its financial guidance for the full-year 2014, citing potential revisions related to ongoing accounting review.

Hertz had revealed on January 1 that its board of directors unanimously adopted a poison pill in the form of a one-year shareholder rights plan, after the firm observed unusual and substantial activity in its shares. The rights plans was designed to keep investor stakes below 10 percent of the company's common stock.

As part of the current agreement, Hertz also amended its shareholder rights plan to increase the triggering percentage to 20 percent from the 10 percent.

In Tuesday's regular trading session, HTZ is currently trading at $27.26, down $0.25 or 0.91% on a volume of 0.12 million shares.