complete. It is qualified in its entirety
by reference to the applicable provisions of the DGCL and of the
registrant’s Certificate of Incorporation and Bylaws.
Hertz has obtained directors’
and officers’ liability insurance, which insures against
liabilities that its directors or officers may incur in such
capacities.
Item 15.
Recent Sales
of Unregistered Securities.
As previously disclosed, on
May 22, 2020, Hertz Global Holdings, Inc. (the “Company” or
“we”), The Hertz Corporation, a wholly-owned subsidiary of the
Company, (“THC”) and certain of their direct and indirect
subsidiaries in the U.S. and Canada (collectively, the “Debtors”)
filed voluntary petitions for relief (collectively, the
“Petitions”) under chapter 11 (“Chapter 11”) of the United States
Code (the “Bankruptcy Code”) in the U.S. Bankruptcy Court for the
District of Delaware (the “Bankruptcy Court”). The Chapter 11
cases (the “Chapter 11 Cases”) are jointly administered for
procedural purposes only under the caption In re The Hertz
Corporation, et al., Case No. 20-11218 (MFW).
The Debtors filed with the
Bankruptcy Court a proposed Third Amended Joint Chapter 11 Plan of
Reorganization, dated as of May 12, 2021 (the “Proposed
Plan”), which embodied the plan proposal of the plan sponsor group
comprised of, among others, (a) one or more funds associated
with Knighthead Capital Management, LLC (“Knighthead”),
(b) one or more funds associated with Certares Opportunities
LLC (“Certares”) and (c) investment funds, separate accounts,
and other entities owned (in whole or in part), controlled, or
managed by Apollo Capital Management, L.P. or its affiliates
(collectively, “Apollo” and, together with Knighthead and Certares,
the “Plan Sponsors”). The Proposed Plan amended and superseded
prior versions of the plan of reorganization filed by the Debtors
in the Chapter 11 Cases. In connection with the Proposed Plan, the
Debtors entered into a Plan Support Agreement, dated as of
May 14, 2021 (the “PSA”), with the Plan Sponsors,
pursuant to which the parties thereto agreed to take certain
actions to support the prosecution and consummation of the Proposed
Plan on the terms and conditions set forth in the PSA. The Debtors
also entered into an Equity Purchase and Commitment Agreement,
dated as of May 14, 2021 (the “EPCA”), with the
Plan Sponsors, providing for the purchase or otherwise
syndication of $1.5 billion in Preferred Stock (as defined
below) by Apollo and $2.781 billion in common stock by the
Plan Sponsors. In addition, the Plan Sponsors and certain
other parties agreed to backstop the rights offering contemplated
by the Proposed Plan (the “Rights Offering”) totaling
$1.635 billion of common stock which was offered first to
eligible holders of the Company’s common stock, par value $0.01 per
share (“Old Common Stock”) existing prior to the Reorganization
Effective Date (as defined below) and then, if not fully
subscribed, to certain eligible holders of unsecured funded debt
claims.
On June 10, 2021, the
Bankruptcy Court entered an order confirming the Second Modified
Third Amended Joint Chapter 11 Plan of Reorganization of the
Debtors (the “Plan”), which incorporated the Proposed Plan as
amended by the Debtors (with the consent of the
Plan Sponsors). On June 30, 2021 (the “Reorganization
Effective Date”), the Plan became effective in accordance with its
terms and the Debtors emerged from the Chapter 11
Cases.
On the Reorganization Effective
Date, all shares of Old Common Stock were cancelled pursuant to the
Plan.
As a result of these Plan
transactions, on the Reorganization Effective Date, the Company
issued the following in accordance with the Plan:
•
14,133,024 shares of common
stock to existing stockholders;
•
89,049,029 Public Warrants to
existing stockholders;
•
277,119,438 shares of common
stock to the Plan Sponsors pursuant to the EPCA and 1,500,000
shares of Preferred Stock to Apollo and certain syndicated
investors;
•
127,362,114 shares of common
stock to eligible participants pursuant to the Rights Offering;
and
•
52,487,886 shares of common
stock to the Backstop Parties in the Rights Offering.
With the exception of shares of
common stock issued on account of the backstop obligation under the
EPCA, the direct investment commitment under the EPCA and the
Rights Offering, the shares of common