Offer to Purchase for Cash Any and All Outstanding Shares of Class A Common Stock of The Hertz Corporation at $35.50 Net Per Share by Ford FSG, Inc. an indirect wholly owned subsidiary of Ford Motor Company

of

The Hertz Corporation

at

$35.50 Net Per Share

by

Ford FSG, Inc.

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, MARCH 2, 2001, UNLESS THE OFFER IS EXTENDED.

      THIS OFFER IS BEING MADE PURSUANT TO AN AGREEMENT AND PLAN OF MERGER (THE “MERGER AGREEMENT”) DATED AS OF JANUARY 16, 2001, BY AND AMONG FORD MOTOR COMPANY (“FORD”), FORD FSG, INC. (THE “PURCHASER”), FORD FSG II, INC. AND THE HERTZ CORPORATION (“HERTZ”).

      THE BOARD OF DIRECTORS OF HERTZ, BY UNANIMOUS DECISION OF THOSE DIRECTORS PARTICIPATING AND BASED ON THE RECOMMENDATION OF A SPECIAL COMMITTEE OF INDEPENDENT DIRECTORS OF THE BOARD OF DIRECTORS OF HERTZ: (1) HAS DETERMINED THAT IT IS FAIR TO AND IN THE BEST INTERESTS OF HERTZ AND ITS STOCKHOLDERS (OTHER THAN THE PURCHASER AND ITS AFFILIATES) TO CONSUMMATE THE OFFER AND THE MERGER (AS DEFINED HEREIN) UPON THE TERMS AND SUBJECT TO THE CONDITIONS OF THE MERGER AGREEMENT AND IN ACCORDANCE WITH DELAWARE LAW; (2) HAS APPROVED AND DECLARED ADVISABLE THE OFFER, THE MERGER AND THE MERGER AGREEMENT; AND (3) HAS RESOLVED TO RECOMMEND THAT HERTZ’S STOCKHOLDERS ACCEPT THE OFFER, TENDER THEIR SHARES PURSUANT THERETO AND APPROVE AND ADOPT THE MERGER AGREEMENT AND THE MERGER IF SUBMITTED FOR THEIR APPROVAL.

      LAZARD FRÈRES & CO. LLC, THE FINANCIAL ADVISOR TO THE SPECIAL COMMITTEE, HAS DELIVERED TO THE SPECIAL COMMITTEE ITS WRITTEN OPINION THAT THE CONSIDERATION TO BE RECEIVED BY THE STOCKHOLDERS OF HERTZ (OTHER THAN THE PURCHASER AND ITS AFFILIATES) IN THE OFFER AND THE MERGER PURSUANT TO THE MERGER AGREEMENT IS FAIR TO SUCH STOCKHOLDERS FROM A FINANCIAL POINT OF VIEW. SEE “SPECIAL FACTORS — OPINION OF FINANCIAL ADVISOR.”

      THIS OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. HOWEVER, THE OFFER IS SUBJECT TO CERTAIN CONDITIONS. SEE “THE OFFER — CONDITIONS OF THE OFFER.”

      A summary of the principal terms of the Offer appears on pages 1-4 hereof.

      If you have questions about the Offer, you can call ▇▇▇▇▇▇▇▇▇ Shareholder Communications Inc., the Information Agent for the Offer, or ▇.▇. ▇▇▇▇▇▇ Securities Inc., the Dealer Manager for the Offer, at their respective addresses and telephone numbers set forth on the back cover of this Offer to Purchase. You can also obtain additional copies of this Offer to Purchase, the related Letter of Transmittal and the Notice of Guaranteed Delivery from the Information Agent or your broker, dealer, commercial bank, trust company or other nominee.

      THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF SUCH TRANSACTION OR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

The Dealer Manager for the Offer is:

▇▇ ▇▇▇▇▇▇

February 2, 2001

TABLE OF CONTENTS

ii

SUMMARY TERM SHEET

      Ford FSG, Inc. (the “Purchaser” or “we”), an indirect wholly owned subsidiary of Ford Motor Company (“Ford”), is offering to purchase any and all of the outstanding shares of Class A Common Stock, par value $0.01 per share (the “Shares” or the “Class A Common Stock”) of The Hertz Corporation (“Hertz”) for $35.50 per Share net to the seller in cash (the “Offer Price”), upon the terms and subject to the conditions set forth in the Offer to Purchase and the related Letter of Transmittal (which together constitute the “Offer”), pursuant to an Agreement and Plan of Merger dated January 16, 2001 (the “Merger Agreement”). The following are some of the questions you, as a stockholder of Hertz, may have and answers to those questions. You should carefully read this Offer to Purchase and the accompanying Letter of Transmittal in their entirety because the information in this summary term sheet is not complete and additional important information is contained in the remainder of this Offer to Purchase and the Letter of Transmittal.

Who is offering to buy my securities?

      Our name is Ford FSG, Inc. We are a Delaware corporation and an indirect wholly owned subsidiary of Ford. We were organized as a holding company that continues to hold certain of Ford’s financial services assets. As of December 31, 2000, we owned approximately 50.4% of the Class A Common Stock and 100% of the Class B Common Stock, par value $0.01 per share, of Hertz (the “Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”), representing in the aggregate approximately 94.7% of the combined voting power of all classes of capital stock of Hertz and approximately 81.5% of the economic interest in Hertz.

      Ford was incorporated in Delaware in 1919. Ford is the world’s largest producer of trucks and the second-largest producer of cars and trucks combined. Ford and its subsidiaries also engage in other businesses, including financing and renting vehicles and equipment.

What are the classes and amounts of securities sought in the Offer?

      We are seeking to purchase any and all of the outstanding Class A Common Stock that we do not already own. The Offer is not conditioned upon any minimum number of Shares being tendered.

How much are you offering to pay for my securities and what is the form of payment? Will I have to pay any fees or commissions?

      We are offering to pay $35.50 per Share, net to you, in cash. If you tender your Shares to us in the Offer, you will not have to pay brokerage fees, commissions or similar expenses. If you own your Shares through a broker or other nominee, and your broker tenders your Shares on your behalf, your broker or nominee may charge you a fee for doing so. You should consult your broker or nominee to determine whether any charges will apply.

Do you have the financial resources to make payment?

      We will need approximately $715 million to purchase all Shares that we do not already own pursuant to the Offer and to pay related fees and expenses. We intend to pay for all Shares validly tendered and not withdrawn in the Offer and to provide funding for the Merger (as defined below) from cash on hand. Ford has committed to ensuring that we have sufficient cash to pay the purchase price for all Shares tendered and to pay the Merger Consideration (as defined below). As of December 31, 2000, Ford had cash and marketable securities in the amount of $16.5 billion and expects to have sufficient cash on hand at the expiration of the Offer to pay the Offer Price for all Shares in the Offer. The Offer is not conditioned upon any financing arrangements.

1

What does ▇▇▇▇▇’▇ Board of Directors think of the Offer?

      The Board of Directors of Hertz (the “Hertz Board”), by unanimous decision of those directors participating and based upon the recommendation of a Special Committee of Independent Directors of the Hertz Board (the “Special Committee”):

      See “Special Factors — Recommendation of the Special Committee and the Hertz Board; Fairness of the Offer and the Merger.”

Is your financial condition relevant to my decision to tender in the Offer?

      Because the form of payment in the Offer consists solely of cash, we do not think our financial condition beyond our ability to pay the purchase price out of cash on hand is material to your decision whether to tender in the Offer. Additionally, the Offer is not subject to any financing contingency. See “The Offer — Source and Amount of Funds.”

How long do I have to decide whether to tender in the Offer?

      You have until 12:00 Midnight, New York City time, on Friday, March 2, 2001, to tender your Shares in the Offer. Further, if you cannot deliver everything required to make a valid tender to EquiServe Trust Company, N.A. (“EquiServe” or the “Depositary”), the depositary for the Offer, prior to such time, you may be able to use a guaranteed delivery procedure, which is described in “The Offer — Procedure for Tendering Shares.” In addition, if we decide to include a subsequent offering period in the Offer, as described under “The Offer — Extension of Tender Period; Termination; Amendment; Subsequent Offering Period,” you will have an additional opportunity to tender your Shares. We have not at this time made a final decision to include or not to include a subsequent offering period.

Can the Offer be extended and under what circumstances?

      Subject to the terms of the Merger Agreement, we can extend the Offer. We may extend, for instance, if any conditions to the Offer have not been satisfied prior to the Expiration Date or, for a period of up to 10 business days, if all of the conditions to the Offer are satisfied or waived, but the number of Shares validly tendered and not withdrawn is insufficient to result in the Purchaser owning at least 90% of the then outstanding number of Shares. We may establish a subsequent offering period of up to 20 business days under certain circumstances. See “The Offer — Extension of Tender Period; Termination; Amendment; Subsequent Offering Period.” If you do not tender your Shares during the initial offering period or the subsequent offering period (if any), you will have to wait until after the Merger is completed to receive cash consideration for your Shares.

How will I be notified if the Offer is extended?

      If we decide to extend the Offer, we will inform EquiServe, the Depositary for the Offer, of that fact and will make a public announcement of the extension, not later than 9:00 a.m., New York City time, on the business day after the day on which the Offer was scheduled to expire.

2

How do I tender my Shares?

      To tender Shares, you must deliver the certificates representing your Shares, together with a completed Letter of Transmittal, to EquiServe, the Depositary for the Offer, not later than the time the Offer expires. If your Shares are held in street name by your broker, dealer, bank, trust company or other nominee, such nominee can tender your shares through The Depository Trust Company. If you cannot deliver everything required to make a valid tender to the depositary prior to the expiration of the Offer, you may have a limited amount of additional time by having a broker, a bank or other fiduciary which is a member of the Securities Transfer Agents Medallion Program or other eligible institution guarantee that the missing items will be received by the depositary within three New York Stock Exchange trading days. However, the depositary must receive the missing items within that three trading day period. See “The Offer — Procedure for Tendering Shares.”

Until what time can I withdraw tendered Shares?

      You can withdraw tendered Shares at any time until the Offer has expired and, if we have not by April 2, 2001, agreed to accept your Shares for payment, you can withdraw them at any time after such time until we accept Shares for payment. You may not, however, withdraw Shares tendered during a subsequent offering period, if one is included. See “The Offer — Withdrawal Rights.”

How do I withdraw tendered Shares?

      To withdraw Shares, you must deliver a written notice of withdrawal, or a facsimile of one, with the required information to EquiServe while you have the right to withdraw the Shares. See “The Offer — Withdrawal Rights.”

When and how will I be paid for my tendered Shares?

      Subject to the terms and conditions of the Offer, we will pay for all Shares validly tendered and not withdrawn as soon as practicable after the later of the Expiration Date and satisfaction of all conditions to the Offer set forth in “The Offer — Conditions of the Offer” relating to governmental or regulatory approval. We do, however, reserve the right, in our sole discretion and subject to applicable law, to delay payment for Shares in order to comply with law.

      We will pay for your Shares that are validly tendered and not withdrawn by depositing the purchase price with EquiServe, which will act as your agent for the purpose of receiving payments from us and transmitting such payments to you. In all cases, payment for tendered Shares will be made only after timely receipt by EquiServe of certificates for such Shares (or of a confirmation of a book-entry transfer of such shares as described in “The Offer — Procedure for Tendering Shares”), a properly completed and duly executed Letter of Transmittal and any other required documents for such Shares.

Will the Offer be followed by a merger?

      If we purchase Shares in the Offer and the other conditions to the Merger are satisfied or waived (where permissible), the Purchaser’s wholly owned subsidiary, Ford FSG II, Inc. (“FSG II”), is expected to be merged with and into Hertz. If the Merger takes place, Hertz will become an indirect wholly owned subsidiary of Ford, and all remaining stockholders (other than the Purchaser and its affiliates) will receive $35.50 net per Share in cash (or any higher price per Share that is paid in the Offer). See “Special Factors — The Merger Agreement” for a description of the Merger and the Merger Agreement.

Following the Offer, ▇▇▇▇ ▇▇▇▇▇ continue as a public company?

      No. If and when the Merger takes place, Hertz will no longer be publicly owned. Even if the Merger does not take place, there may be so few remaining stockholders and publicly held Shares

3

If I decide not to tender, how will the Offer affect my Shares?

      If the Merger takes place, stockholders not tendering in the Offer (other than the Purchaser and its affiliates) will receive the same amount of cash per Share which they would have received had they tendered their Shares in the Offer. Therefore, if the Merger takes place, the difference to you between tendering your Shares pursuant to the Offer and not tendering your Shares is that you will be paid earlier if you tender your Shares in the Offer. Stockholders who hold Shares at the time of the Merger will also be entitled to appraisal rights under Delaware law. See “Special Factors — Dissenters’ Rights.” If for some reason the Merger does not take place and the Offer is consummated, the number of stockholders and Shares that are still in the hands of the public may be so small that there will no longer be an active public trading market (or, possibly, any public trading market) for the Shares, which may affect prices at which Shares trade. Also, as described above, Hertz may cease making certain filings with the SEC or otherwise cease to be required to comply with the SEC rules relating to publicly held companies.

What is the market value of my Shares as of a recent date?

      On September 20, 2000, the last full trading day before Hertz announced that it had received a preliminary, non-binding proposal from Ford to acquire all of the outstanding Shares, the closing price of Class A Common Stock of Hertz reported on the NYSE was $24.25 per Share. On January 12, 2001, the last full trading day before we announced the companies’ agreement on the Offer and the Merger, the closing price of Class A Common Stock was $34.88 per Share. Between January 1, 2001 and January 12, 2001, the price per Share of Class A Common Stock ranged between $33.88 and $34.88. On February 1, 2001, the last full trading day before the date of this Offer to Purchase, the closing price of Class A Common Stock was $35.29 per Share. We advise you to obtain a recent quotation for Shares before deciding whether to tender your Shares.

Who can I talk to if I have questions about the Offer?

      You can call ▇▇▇▇▇▇▇▇▇ Shareholder Communications Inc., the Information Agent for the Offer, at (▇▇▇) ▇▇▇-▇▇▇▇ (toll free) or (▇▇▇) ▇▇▇-▇▇▇▇ (call collect) or ▇.▇. ▇▇▇▇▇▇ Securities Inc., the Dealer Manager for the Offer, at (▇▇▇) ▇▇▇-▇▇▇▇ (toll free) or (▇▇▇) ▇▇▇-▇▇▇▇ (call collect).

4

To the Holders of Class A Common Stock of The Hertz Corporation:

INTRODUCTION

      Ford FSG, Inc. (the “Purchaser” or “we”), a Delaware corporation and an indirect wholly owned subsidiary of Ford Motor Company, a Delaware corporation (“Ford”), hereby offers to purchase any and all of the outstanding shares of Class A Common Stock, par value $0.01 per share (the “Shares” or the “Class A Common Stock”) of The Hertz Corporation, a Delaware corporation (“Hertz”), for $35.50 per Share, net to the seller in cash (the “Offer Price”), upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal (which together constitute the “Offer”). You will not be obligated to pay brokerage fees, commissions or, except as set forth in Instruction 6 of the Letter of Transmittal, transfer taxes on the sale of Shares pursuant to the Offer. We will pay all charges and expenses of ▇.▇. ▇▇▇▇▇▇ Securities Inc. (the “Dealer Manager” or “▇.▇. ▇▇▇▇▇▇”), EquiServe Trust Company, N.A. (the “Depositary” or “EquiServe”) and ▇▇▇▇▇▇▇▇▇ Shareholder Communications Inc. (the “Information Agent”) incurred in connection with the Offer. See “The Offer — Fees and Expenses.”

      The Offer is being made pursuant to an Agreement and Plan of Merger dated as of January 16, 2001 (the “Merger Agreement”) by and among Ford, the Purchaser, Ford FSG II, Inc., a Delaware corporation (“FSG II”), and Hertz. The Merger Agreement provides that following completion of the Offer and the satisfaction or waiver of certain conditions in the Merger Agreement, FSG II will be merged into Hertz (the “Merger”), with Hertz continuing as the surviving corporation (the “Surviving Corporation”), which will be wholly owned by the Purchaser. At the effective time of the Merger (the “Effective Time”), (i) each share of Class A Common Stock and each share of the Class B Common Stock, par value $0.01 per share, of Hertz (the “Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”) issued and outstanding immediately prior to the Effective Time (other than Shares of holders exercising dissenters’ rights, as described below in “Special Factors — Dissenters’ Rights,” and Shares to be cancelled as provided in (ii) below) will be converted into the right to receive the Offer Price in cash, or any higher price per Share which is paid in the Offer (the “Merger Consideration”); (ii) each share of Common Stock held in the treasury of Hertz or owned by the Purchaser or any direct or indirect wholly owned subsidiary of the Purchaser or Hertz immediately prior to the Effective Time will be cancelled, and no payment or distribution will be made with respect to such Common Stock; and (iii) each share of common stock of FSG II issued and outstanding immediately prior to the Effective Time will be converted into one share of Class A Common Stock of the Surviving Corporation. See “Special Factors — The Merger Agreement” for a description of the Merger and the Merger Agreement.

      The Board of Directors of Hertz (the “Hertz Board”), by unanimous decision of those directors participating and based upon the recommendation of a Special Committee of Independent Directors of the Hertz Board (the “Special Committee”):

      Messrs. ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, each directors on the Hertz Board, recused themselves from the meeting in light of their positions, in the case of Messrs.

5

      Lazard Frères & Co. LLC (“Lazard”), the financial advisor to the Special Committee, has delivered to the Special Committee its written opinion that the consideration to be received by the stockholders of Hertz (other than the Purchaser and its affiliates) pursuant to each of the Offer and the Merger is fair to such stockholders from a financial point of view. See “Special Factors — Opinion of Financial Advisor.”

      This Offer is not conditioned upon any minimum number of Shares being tendered. However, the Offer is subject to certain conditions. See “The Offer — Conditions of the Offer.” The transaction is not subject to approval of a majority of the unaffiliated security holders of Hertz.

      Hertz has advised us that to the best of its knowledge each of its executive officers and directors, other than those individuals, if any, for whom the tender of Shares could cause them liability under the provisions of Section 16(b) of the Exchange Act or to the extent their Shares are restricted shares, intends to tender all of his or her Shares pursuant to the Offer.

      If, as a result of the purchase of Shares pursuant to the Offer, the Purchaser owns in the aggregate at least 90% of the outstanding Shares and continues to hold at least 90% of the outstanding Class B Common Stock, then the Purchaser intends to effect the Merger as a “short-form” merger under the Delaware General Corporation Law (the “DGCL”), without a vote of the stockholders of Hertz (a “Short-Form Merger”). If, following the purchase of Shares pursuant to the Offer, the Purchaser owns in the aggregate less than 90% of the outstanding Shares, the Purchaser has agreed to convert such number of shares of Class B Common Stock into Class A Common Stock to the extent that, after giving effect to such conversion, the Purchaser would own in the aggregate the number of Shares necessary to effect a Short-Form Merger. If, after the conversion of all shares of Class B Common Stock, the Purchaser continues to own less than the percentage of outstanding Shares required to effect a Short-Form Merger, Hertz, Ford, the Purchaser and FSG II have agreed to take certain actions necessary to seek stockholder approval and effect a long-form merger pursuant to the DGCL. If a vote of the stockholders of Hertz is necessary to effect the Merger, the Purchaser has agreed in the Merger Agreement to vote or cause to be voted all shares of Common Stock owned by it in favor of the approval and adoption of the Merger Agreement and the Merger. See “Special Factors — The Merger Agreement.”

      THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION, AND YOU SHOULD CAREFULLY READ BOTH IN THEIR ENTIRETY BEFORE YOU MAKE A DECISION WITH RESPECT TO THE OFFER.

6

SPECIAL FACTORS

BACKGROUND OF THE OFFER

      Until 1987, when Ford first acquired an ownership interest in Hertz, Hertz had been a subsidiary of UAL Corporation (formerly Allegis Corporation), which had acquired Hertz’s outstanding capital stock from RCA Corporation in 1985. Hertz became a wholly owned subsidiary of Ford as a result of a series of transactions in 1993 and 1994. Hertz continued as a wholly owned subsidiary of Ford until April 30, 1997, when Hertz completed a public offering of approximately 51.6% of the Class A Common Stock (which then represented approximately 19.1% of the economic interest in Hertz).

      Since the public offering of Class A Common Stock of Hertz in 1997, a number of circumstances, discussed further under “Special Factors — Purpose and Structure of the Offer and the Merger; Reasons of Ford for the Offer and the Merger,” have occurred that have prompted Ford to embark on this transaction.

      In January 2000, there were preliminary conversations among ▇▇. ▇▇▇▇▇, Chairman of the Hertz Board, and executives of Ford, including ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇’s Vice Chairman, and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, a Ford Group Vice President and Chief of Staff, who are directors of Hertz, concerning the possible acquisition by Ford of all of the Shares not already owned by Ford or its affiliates. In March, 2000, ▇▇. ▇▇▇▇▇▇▇▇▇ informed ▇▇. ▇▇▇▇▇ that ▇▇▇▇ was not interested in pursuing a transaction at that time.

      In September 2000, Ford retained ▇.▇. ▇▇▇▇▇▇ as its financial advisor to assist Ford in its analysis of the fair value of Hertz, to advise Ford in making the initial offer to the Hertz Board and to assist in any negotiations with respect to a transaction to acquire the publicly held Shares.

      On September 20, 2000, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, a Ford Vice President, and ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇., a Ford Assistant Secretary, met with ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇’▇ President and Chief Executive Officer. At this meeting, ▇▇. ▇▇▇▇▇▇▇▇▇ presented a written proposal by Ford to acquire all of the Shares not already owned by Ford or its affiliates, at a price of $30 per Share.

      On September 21, 2000, Ford issued a press release announcing that it had offered to acquire through a merger transaction the 18.5% of ▇▇▇▇▇’▇ Common Stock that it did not own. On the same day, Hertz issued a press release confirming receipt of Ford’s offer.

      On September 22, 2000, the Hertz Board held a special meeting at which time the Ford offer was formally disclosed to members of the Hertz Board and the Hertz Board formed the Special Committee. The Special Committee consists of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Managing Partner, Secura ▇▇▇▇▇▇▇ Company LLC; ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, then-Chairman of Munder Capital Management; and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice Chairman of the Board, IBM Corporation. ▇▇. ▇▇▇▇▇▇▇ is the Chairman of the Special Committee. None of the members of the Special Committee is an officer or employee of Hertz, Ford or any of their affiliates.

      On September 25, 2000, Hertz announced that its Board of Directors had appointed a Special Committee to consider the proposed acquisition by Ford.

      The Special Committee was authorized by the Hertz Board to retain legal and financial advisors to assist it in its examination and to receive, study, negotiate and make recommendations to the Hertz Board in connection with the Ford offer. On September 29, 2000, the Special Committee retained ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇ (“▇▇▇▇▇▇▇▇”) as its legal advisor.

      On October 11, 2000, the Special Committee met at the offices of Wachtell where representatives from ▇▇▇▇▇▇▇▇ made a presentation to the Special Committee regarding the Special Committee’s fiduciary duties in connection with evaluating the Ford offer. Following the Wachtell presentation, the Special Committee and ▇▇▇▇▇▇▇▇ received presentations from four internationally recognized investment banks, including Lazard, seeking engagement as the Special Committee’s

7

      On October 17, 2000, the Special Committee announced that it had retained ▇▇▇▇▇▇▇▇ as its special counsel and Lazard as its financial advisor, each to assist it in evaluating the Ford offer.

      Beginning in mid-October, the Special Committee, ▇▇▇▇▇▇▇▇ and Lazard conducted a due diligence investigation of Hertz, including:

      The Special Committee asked Lazard to prepare an analysis as to the range of values of the Shares to assist the Special Committee in evaluating the Ford offer.

      On November 3, 2000, ▇▇▇▇▇’▇ management gave the Special Committee and Lazard its Strategic Plan, updated and revised to reflect its August 31, 2000 announcement of lowered earnings estimates for the third and fourth quarters of 2000 and lower net income growth outlook for the full-year 2001.

      On November 16, 2000, representatives of ▇.▇. ▇▇▇▇▇▇ met with representatives of Lazard to discuss Ford’s offer. During the meeting ▇.▇. ▇▇▇▇▇▇ presented financial information and Ford’s rationale behind its $30 per Share offer and indicated that representatives of Ford would like to meet with the Special Committee to discuss the offer. Representatives of Lazard indicated that they would meet with the Special Committee to relay Ford’s rationale.

      Following the ▇.▇. ▇▇▇▇▇▇ presentation on November 16, 2000, Lazard agreed to provide ▇.▇. ▇▇▇▇▇▇ with financial projections discussed under “The Offer — Certain Information Concerning Hertz; Certain Projections.” Lazard provided those projections to ▇.▇. ▇▇▇▇▇▇ on November 22, 2000.

      Later on November 16, 2000, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, Arsht & Tunnel (“▇▇▇▇▇▇, ▇▇▇▇▇▇▇”), special counsel to Ford, delivered a draft merger agreement to the Special Committee and Wachtell.

      On November 20, 2000, the Special Committee met with Lazard and ▇▇▇▇▇▇▇▇ to discuss the indicative valuation of Hertz. Following a presentation by Lazard of its preliminary valuation analysis, ▇▇▇▇▇▇▇▇ reviewed with the Special Committee and Lazard the key elements of the draft merger agreement presented by Ford.

      Next, the meeting participants discussed ▇▇▇▇▇’▇ strategic alternatives and negotiation tactics in light of Ford’s offer. Given the fact that Ford’s written proposal, dated September 20, 2000, made clear that Ford would not “sell any shares of Hertz stock that [it] own[s] directly or indirectly” and that Ford did not “wish to consider or participate in any possible alternative sale of Hertz common stock,” the Special Committee and its advisors concluded that an acquisition of Hertz by a third party was not a feasible alternative. Accordingly, the Special Committee resolved to attempt to negotiate with Ford to determine the best price Ford would be willing to offer and to make a decision whether a transaction at such price level would be fair. The Special Committee instructed Lazard to inform Ford and its advisors that its $30 per Share bid was not compelling and to urge Ford to increase its bid by arguing that a price in the range of $40-$42 per Share could be justified. In

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      On November 30, 2000, representatives of ▇.▇. ▇▇▇▇▇▇ again met with representatives of Lazard to discuss the outcome of ▇▇▇▇▇▇’▇ meeting with the Special Committee concerning Ford’s stated rationale for its $30 per Share offer. Lazard indicated to ▇.▇. ▇▇▇▇▇▇ that the Special Committee had determined that the price of $30 per Share was not compelling and that it had rejected the offer. Lazard further indicated that the Special Committee was prepared at that time to accept an offer in the range of $40-$42 per Share. Lazard then summarized for ▇.▇. ▇▇▇▇▇▇ the rationale for the Special Committee’s valuation range, based on financial projections for Hertz discussed under “The Offer — Certain Information Concerning Hertz; Certain Projections.” ▇.▇. ▇▇▇▇▇▇ agreed to relay such rationale to Ford and indicated that representatives of Ford would like to meet with the Special Committee to discuss the offer.

      On December 5, 2000, ▇▇. ▇▇▇▇▇▇▇▇▇ called ▇▇. ▇▇▇▇▇▇▇ to suggest a meeting between representatives of Ford and the Special Committee. ▇▇. ▇▇▇▇▇▇▇ indicated that such a meeting among the principals would be premature unless Ford was prepared to increase its offer, but that discussion between advisors could continue. ▇▇. ▇▇▇▇▇▇▇▇▇ reiterated that Ford believed its offer was fair to Hertz and its stockholders and that Ford was not prepared to increase its offer at that time.

      On December 6, 2000, a representative of ▇.▇. ▇▇▇▇▇▇ called Lazard. Lazard indicated that the Special Committee believed that the parties were too far apart on the issue of price to warrant discussions between the principals if Ford’s offer remained unchanged. Lazard further stated that the Special Committee would be prepared to negotiate directly with Ford if Ford increased its offer substantially.

      On December 8, 2000, ▇▇. ▇▇▇▇▇▇▇▇▇ called ▇▇. ▇▇▇▇▇▇▇ to discuss the parties’ relative positions with respect to the price offered by Ford, during which conversation ▇▇. ▇▇▇▇▇▇▇▇▇ indicated that Ford might, if such price were acceptable to the Special Committee, be prepared, as an inducement to reach an agreement quickly, to increase its offer to $34 per Share. ▇▇. ▇▇▇▇▇▇▇ agreed to relay this information to the Special Committee.

      On December 9, 2000, the Special Committee met via teleconference to discuss the latest developments in the negotiations with Ford and its advisors, including ▇▇. ▇▇▇▇▇▇▇’▇ phone call with ▇▇. ▇▇▇▇▇▇▇▇▇. Representatives of ▇▇▇▇▇▇▇▇ and Lazard participated in the call. Following the update, the Special Committee determined that Ford’s latest offer of $34 per Share should not be accepted.

      On December 10, 2000, representatives of Lazard called ▇▇. ▇▇▇▇▇▇▇▇▇ and indicated that the Special Committee thought that $34 per Share was below the price the Special Committee considered acceptable and that Ford would need to increase its offer if further negotiations were to occur at the principal level.

      On December 14, 2000, ▇▇▇▇▇’▇ management informed the Special Committee and Lazard that given continuing weakness in the car rental industry, primarily related to pricing, as well as difficult sector fundamentals in equipment rental, it was materially revising downward its internal earnings estimates for 2000.

      On December 15, 2000, ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇, ▇▇▇▇’s Chief Financial Officer, spoke with ▇▇. ▇▇▇▇▇▇▇ and indicated that a price of $40-$42 per Share would be unacceptable to Ford. ▇▇. ▇▇▇▇▇▇▇ indicated that, based on discussions with the Special Committee, he believed a price of $34 per Share was also unacceptable but that he would relay Ford’s view to the members of the Special Committee.

      Later in the day on December 15, 2000, the Special Committee met via teleconference to discuss the revised earnings estimates disclosed to the Special Committee on the previous day and

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      On December 18, 2000, ▇▇. ▇▇▇▇▇▇▇ called ▇▇. ▇▇▇▇▇▇▇ to indicate that the Special Committee had concluded that a price of $34 per Share was still too low to be acceptable and suggested that Ford propose a higher offer that captured what the Special Committee viewed as “▇▇▇▇▇’▇ premium value over other car rental companies” before a meeting between the principals could take place. ▇▇. ▇▇▇▇▇▇▇ indicated that Ford was not prepared to increase its offer at that time.

      On December 19, 2000, the Special Committee, along with representatives from ▇▇▇▇▇▇▇▇ and Lazard, convened via teleconference. The meeting participants discussed appropriate negotiation tactics in light of the downward adjusted earnings estimates and their impact on valuation, and the latest discussion between Messrs. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇. The Special Committee instructed Lazard to contact ▇.▇. ▇▇▇▇▇▇.

      On December 20, 2000, Lazard and ▇.▇. ▇▇▇▇▇▇ discussed the possibility of narrowing the gap between the parties’ positions so that direct contact between the principals would be productive.

      On December 21, 2000, ▇▇. ▇▇▇▇▇▇▇ spoke with ▇▇. ▇▇▇▇▇▇▇ and indicated that the Special Committee believed a fair price was closer to $40 per Share than $34 per Share. ▇▇. ▇▇▇▇▇▇▇ reaffirmed Ford’s belief that $34 per Share represented a fair price. ▇▇. ▇▇▇▇▇▇▇ referred to the December 20, 2000 conversation between the financial advisors, and Messrs. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ agreed that the financial advisors for the parties should have further discussions regarding valuations.

      Later on December 21, 2000, representatives of ▇.▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ spoke. During this conversation, ▇.▇. ▇▇▇▇▇▇ inquired as to whether there was any flexibility with respect to the Special Committee’s request for a price of $40 per Share. Lazard suggested there might be some flexibility to move to $38 per Share if there were flexibility on the part of Ford to narrow the gap between the parties.

      On December 22, 2000, ▇. ▇. ▇▇▇▇▇▇ discussed with Ford the content of their conversation with Lazard. Ford indicated to ▇.▇. ▇▇▇▇▇▇ that ▇▇▇▇ continued to believe that $34 per Share was a fair offer but that there was limited flexibility to increase its price. ▇. ▇. ▇▇▇▇▇▇ relayed this information to Lazard, which in turn relayed the information to the Special Committee.

      Later on December 22, 2000, Lazard spoke with ▇▇. ▇▇▇▇▇▇▇ who suggested that Lazard have further discussions with ▇.▇. ▇▇▇▇▇▇. ▇▇. ▇▇▇▇▇▇▇ further suggested that the Special Committee convene later that afternoon. Thereafter, per ▇▇. ▇▇▇▇▇▇▇’▇ suggestion, Lazard spoke with ▇.▇. ▇▇▇▇▇▇. ▇.▇. ▇▇▇▇▇▇ indicated that, in their opinion, while Ford continued to believe that $34 per Share was a fair price, Ford might be willing to increase its offer to $35 per Share if the Special Committee would agree to a transaction at that price.

      On the afternoon of December 22, 2000, following the phone call between Lazard and ▇.▇. ▇▇▇▇▇▇, the Special Committee convened via teleconference, along with representatives from Lazard, to consider Ford’s $35 per Share proposal. Following a discussion among the meeting participants, the Special Committee decided to adjourn until December 26, 2000 and instructed Lazard to indicate to ▇.▇. ▇▇▇▇▇▇ its disappointment with the $35 per Share price and to advise ▇.▇. ▇▇▇▇▇▇ that the Special Committee would consider the matter further the next week. Lazard subsequently contacted ▇.▇. ▇▇▇▇▇▇, conveyed the Special Committee’s disappointment and indicated that the parties should talk the following week.

      The Special Committee, along with representatives of ▇▇▇▇▇▇▇▇ and Lazard, met via teleconference on December 26, 2000. The meeting participants reviewed the latest developments in the negotiations with Ford and its advisors. The participants discussed how the Special Committee should advance the negotiations and persuade Ford to increase its offer. Following the discussion,

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      On December 28, 2000 and January 2, 2001, Messrs. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ spoke in a further attempt to reach an agreement on a price per Share. During these conversations, ▇▇. ▇▇▇▇▇▇▇ maintained that Ford continued to believe that $34 per Share was a fair price and ▇▇. ▇▇▇▇▇▇▇ indicated that a price closer to $38 per Share would be required to reach an agreement on a transaction. ▇▇. ▇▇▇▇▇▇▇ indicated that such a price would be unacceptable to Ford. Both parties agreed that a prompt conclusion to the negotiation was important.

      On January 3, 2001, ▇▇▇▇▇’▇ management informed the Special Committee and Lazard that the latest advance reservations data and other indicative information Hertz was receiving showed significant potential weakness in its businesses in 2001, notwithstanding the fact that Hertz had exceeded the First Call consensus estimate of $0.51 per Share by $0.01 per Share for the fourth quarter of 2000 (and its own internal December 14, 2000, downwardly revised fourth quarter earnings estimate of $0.37 per Share) due to extraordinary weather-related circumstances during the last ten days of December.

      Later on January 3, 2001, the Special Committee, along with ▇▇▇▇▇▇▇▇ and Lazard, convened via teleconference to review the latest developments, including the negatively revised financial outlook from ▇▇▇▇▇’▇ management and the conversations between Messrs. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇. Following extensive discussion, the Special Committee resolved to ask Ford to make its best and final offer.

      On January 8, 2001, Messrs. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ spoke further. ▇▇. ▇▇▇▇▇▇▇ indicated that he believed it was in the best interests of all parties to reach an acceptable agreement and asked ▇▇. ▇▇▇▇▇▇▇ for ▇▇▇▇’s best and final offer. ▇▇. ▇▇▇▇▇▇▇ indicated that Ford would be willing to make a best and final offer of $35.50 per Share.

      On January 10, 2001, as a result of the eroding overall economic outlook for 2001 and its own internal data, ▇▇▇▇▇’▇ management informed the Special Committee and Lazard that it would be materially revising downward the Strategic Plan’s forecast for 2001 as well as for 2002-2005. Later that day, the Special Committee, along with ▇▇▇▇▇▇▇▇ and Lazard, convened via teleconference to assess the latest events, including the anticipated new negative financial outlook from ▇▇▇▇▇’▇ management. In light of the foregoing, the Special Committee discussed Ford’s “best and final offer” of $35.50 per Share. Following further discussion, the Special Committee asked Lazard to discuss further with management the revised outlook, resolved to seek a further price increase from Ford and authorized ▇▇. ▇▇▇▇▇▇▇ to agree to a deal at $36.50 per Share.

      Later in the day on January 10, 2001, ▇▇. ▇▇▇▇▇▇▇ called ▇▇. ▇▇▇▇▇▇▇ and indicated that the Special Committee was not prepared to accept $35.50 per Share, but would be prepared to negotiate further. ▇▇. ▇▇▇▇▇▇▇ informed ▇▇. ▇▇▇▇▇▇▇ that he had already made Ford’s best and final offer with respect to price and, therefore, there would be no further negotiations. ▇▇. ▇▇▇▇▇▇▇ indicated that he would undertake to draft a press release announcing the parties’ failure to agree, and send it to the Special Committee before release. As a result, later on January 10, 2001, ▇.▇. ▇▇▇▇▇▇ contacted Lazard to inform them that they would be sending to Lazard a draft press release that indicated that Ford was withdrawing its offer given that it appeared that no agreement with respect to price could be reached.

      On the evening of January 10, 2001, ▇▇. ▇▇▇▇▇▇▇ had a telephonic discussion with ▇▇. ▇▇▇▇, during which discussion ▇▇. ▇▇▇▇ advised ▇▇. ▇▇▇▇▇▇▇ that management expected Hertz to experience a pre-tax loss during the first quarter of 2001 and reduced earnings for the year. The discussion suggested a significant downward revision of management’s previous estimates for 2001-2005 as a result of worsening car and equipment rental industry sector fundamentals, most notably pricing, and the slowing economy.

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      On the morning of January 11, 2001, ▇▇. ▇▇▇▇▇▇▇ spoke telephonically with ▇▇▇▇▇’▇ chairman, ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇. ▇▇▇▇. Messrs. ▇▇▇▇▇ and ▇▇▇▇ reiterated their concerns about ▇▇▇▇▇’▇ financial outlook.

      In the afternoon on January 11, 2001, the Special Committee, along with representatives from ▇▇▇▇▇▇▇▇ and Lazard, met via teleconference to discuss management’s downward revised financial outlook for the first quarter of 2001 and thereafter that Messrs. ▇▇▇▇▇ and ▇▇▇▇ had articulated to ▇▇. ▇▇▇▇▇▇▇, the implications of this revised financial outlook for Hertz and the status of the negotiations with Ford. Following extensive discussion, the Special Committee determined to instruct Lazard to make one final effort to obtain a higher price, but that if it could not do so it would be willing to advise Ford that, subject to reaching agreement on the terms of a definitive merger agreement, it would recommend that ▇▇▇▇▇’▇ stockholders accept Ford’s offer. In addition, the Special Committee authorized ▇▇▇▇▇▇▇▇ to negotiate the terms of a definitive merger agreement and asked Lazard to consult with management about management’s revised estimates for 2001-2005 resulting from management’s recent guidance.

      Following the Special Committee meeting on January 11, 2001, Lazard contacted ▇.▇. ▇▇▇▇▇▇ to indicate that on January 10, 2001, ▇▇. ▇▇▇▇▇▇▇ had been authorized by the Special Committee to accept a proposal of $36.50 per Share. Lazard further indicated their belief that if Ford were prepared to increase its offer to $36 per Share the Special Committee might be willing to reach an agreement at that price. ▇.▇. ▇▇▇▇▇▇ agreed to relay this latest offer of the Special Committee to Ford.

      Still later on January 11, 2001, after speaking with Ford, ▇.▇. ▇▇▇▇▇▇ contacted Lazard to indicate that Ford was unwilling to increase its offer from $35.50, that $35.50 remained its best and final offer, and that Ford believed that such price was fair to Hertz.

      Following the phone call between ▇.▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ on January 11, 2001, ▇▇. ▇▇▇▇▇▇▇ contacted ▇▇. ▇▇▇▇▇▇▇ and informed him that the Special Committee was willing to accept Ford’s final offer of $35.50 per Share, assuming the parties could agree on the terms of a definitive merger agreement.

      On January 12, 2001, representatives from Hertz and ▇▇▇▇▇▇▇▇ met via teleconference with representatives from Ford and ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ to discuss the draft merger agreement. During the course of the negotiation, Ford agreed to structure the transaction as a tender offer, to eliminate certain representations and warranties of Hertz contained in the draft merger agreement, and to add certain exceptions to the Hertz covenants contained in the draft merger agreement.

      On January 15, 2001, ▇▇▇▇▇’▇ management finalized its downward revised financial projections for 2001-2005.

      Also on January 15, 2001, representatives from Hertz; ▇▇▇▇▇▇▇▇; Ford; ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel to Ford, met via teleconference to finalize the terms of the Merger Agreement.

      On January 16, 2001, the Special Committee, along with representatives from ▇▇▇▇▇▇▇▇ and Lazard met via teleconference to review the final Ford offer. Also present for a portion of the meeting were ▇▇. ▇▇▇▇; ▇▇▇▇▇’▇, Executive Vice President and Chief Financial Officer, ▇▇▇▇ ▇▇▇▇▇▇▇▇; ▇▇▇▇▇’▇, Senior Vice President, General Counsel and Secretary, ▇▇▇▇▇▇ ▇▇▇▇▇; and ▇▇▇▇▇’▇, Staff Vice President, Business and Strategic Planning, ▇▇▇▇▇▇ ▇▇▇▇▇. ▇▇. ▇▇▇▇ presented the current outlook for Hertz, including management’s view of ▇▇▇▇▇’▇ weakening prospects, and management’s view of the proposed transaction with Ford. ▇▇. ▇▇▇▇ summarized the current outlook for the corporation by business sector and by region, noting that the external environment, specifically the general downturn in the U.S. economy and overseas economies, had been the driving force behind the most recent outlook. ▇▇. ▇▇▇▇ further indicated that management currently projected a pre-tax loss for the first quarter in 2001 and reduced earnings for the year. In addition, ▇▇. ▇▇▇▇ stated that, considering the current outlook for the future and other industry-related factors, management

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      Next, Lazard presented to the Special Committee its analysis of the final proposal. Lazard noted that management’s revised outlook for the first quarter of 2001 and thereafter, which had been finalized on January 15, 2001, had a significant downward impact on the valuation of Hertz. These financial projections were provided to Ford, as discussed under “The Offer — Certain Information Concerning Hertz; Certain Projections.” Lazard delivered its opinion to the effect that the $35.50 per Share in cash to be received by the holders of Class A Common Stock (other than the Purchaser and its affiliates) in the Offer and subsequent Merger contemplated by the proposed Merger Agreement is fair from a financial point of view to such holders.

      Following the Lazard presentation, ▇▇▇▇▇▇▇▇ reviewed the material terms of the Merger Agreement and discussed the directors’ fiduciary duties.

      Following the presentations from ▇▇. ▇▇▇▇, ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇, the Special Committee (i) determined that it is fair to and in the best interests of Hertz and its stockholders (other than the Purchaser and its affiliates) to consummate the Offer and the Merger, upon the terms and subject to the conditions of the Merger Agreement and in accordance with Delaware law, (ii) determined that the Offer, the Merger and the Merger Agreement should be approved and declared advisable by the Hertz Board and (iii) resolved to recommend that the Hertz stockholders accept the Offer, tender their Shares pursuant thereto and approve and adopt the Merger Agreement and the Merger if submitted for their approval.

      After the meeting of the Special Committee, a meeting of the full Board of Directors of Hertz was convened. Messrs. ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ recused themselves from the meeting in light of their positions, in the case of Messrs. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇, as officers of Ford and, in the case of ▇▇. ▇▇▇▇▇▇, as a managing director of ▇.▇. ▇▇▇▇▇▇. At the meeting, the Special Committee advised the Hertz Board of its findings. Management presented its outlook for ▇▇▇▇▇’▇ business that had been provided to the Special Committee and Lazard reviewed the fairness opinion that it delivered to the Special Committee. The Hertz Board, by unanimous decision of those directors participating, (i) determined that it is fair to and in the best interests of Hertz and its stockholders (other than the Purchaser and its affiliates) to consummate the Offer and the Merger upon the terms and subject to the conditions of the Merger Agreement and in accordance with Delaware law, (ii) approved and declared advisable the Offer, the Merger and the Merger Agreement and (iii) resolved to recommend that the Hertz stockholders accept the Offer, tender their Shares pursuant thereto and approve and adopt the Merger Agreement and the Merger if submitted for their approval.

      Following the Hertz Board meeting, Ford and Hertz announced in a joint press release that the parties had executed the Merger Agreement providing for the Offer and the acquisition of all Shares of Class A Common Stock at a price of $35.50 per Share.

RECOMMENDATION OF THE SPECIAL COMMITTEE AND THE HERTZ BOARD; FAIRNESS OF THE OFFER AND THE MERGER

Recommendation of the Special Committee and the Hertz Board

      On January 16, 2001, the Special Committee:

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      On January 16, 2001, the Hertz Board, by unanimous decision of those directors participating and based upon the recommendation of the Special Committee:

      Messrs. ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, each directors on the Hertz Board, recused themselves from the meeting in light of their positions, in the case of Messrs. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇, as officers of Ford and, in the case of ▇▇. ▇▇▇▇▇▇, as a managing director of ▇.▇. ▇▇▇▇▇▇, ▇▇▇▇’s financial advisor in connection with the Offer and the Merger.

Fairness of the Offer and the Merger

      In reaching the recommendations described above, the Special Committee considered a number of factors, including the following:

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      2.  Transaction Financial Terms/Premium to Market Price. The Special Committee considered the relationship of the Offer Price and the Merger Consideration to the historical and projected market prices of the Shares. The Offer Price of $35.50 per Share represents a premium of 46.4% over the closing price per Share on September 20, 2000, the day before the public announcement of Ford’s preliminary non-binding proposal to acquire all of the outstanding Shares, a premium of 13.8% over the closing price per Share on August 25, 2000, approximately one month prior to Ford’s announcement and a premium of 18.3% over Ford’s initial offer price of $30 per Share.

      Although the Offer Price is below certain historical trading prices of the Shares, the Special Committee considered that the limited float in the Shares, in addition to limited trading volume and analyst coverage in the auto rental sector, were impediments to the Shares trading at levels in excess of the Offer Price.

      The Special Committee also considered the possible trading prices of the Shares in the short term and the long term in the event that the Offer were to be withdrawn or rejected. The Special Committee concluded that the trading value of the Shares would likely decline substantially in the short term as a result of the withdrawal or rejection of the Ford offer in combination with ▇▇▇▇▇’▇ weakening financial outlook. In addition, as discussed above, the Special Committee considered there to be significant risks and impediments to the Shares trading above the Offer Price in the long term.

      The Special Committee believes that, after extensive negotiations by and on behalf of the Special Committee with Ford and its representatives, Hertz has obtained the highest price per Share that Ford is willing to pay. The Special Committee took into account the fact that the terms of the Offer were determined through arm’s-length negotiations between Ford and the Special Committee and its financial and legal advisors, all of whom are unaffiliated with Ford, and the judgment of the Special Committee that, based upon the negotiations that had transpired and the downward adjusted earnings projections, a price higher than $35.50 per Share could not likely be obtained and that further negotiations with Ford could cause Ford to abandon the transaction.

      The Special Committee also considered the form of consideration to be paid to holders of Shares in the Offer and the Merger, and the certainty of value of such cash consideration compared

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      3.  Strategic Alternatives. The Special Committee considered the fact that Ford currently owns approximately 81.5% of the equity of Hertz and controls approximately 94.7% of the combined voting power of all classes of capital stock of Hertz. The Special Committee also considered the fact that in its written proposal, dated September 20, 2000, Ford made clear that it would not “sell any shares of Hertz stock that [it] own[s] directly or indirectly” and that it did not “wish to consider or participate in any possible alternative sale of Hertz common stock.” Ford confirmed this position in subsequent discussions with representatives of Lazard. Accordingly, the Special Committee concluded that an acquisition of Hertz by a third party was not a feasible alternative. In connection with its consideration of Ford’s controlling ownership interest in Hertz, the Special Committee also took into account the fact that Ford, through its legal counsel, advised the Special Committee that it would be unwilling to agree to make the proposed transaction subject to the approval of a majority of the unaffiliated public shareholders of Hertz.

      4.  Lazard Frères & Co. LLC Fairness Opinion. The Special Committee took into account presentations from Lazard and the opinion of Lazard, dated January 16, 2001, that, based upon and subject to certain considerations and assumptions, the consideration to be received by holders of Shares (other than the Purchaser and its affiliates) in the Offer and the Merger pursuant to the Merger Agreement is fair from a financial point of view to such holders. A copy of the opinion rendered by Lazard and the assumptions made by Lazard in arriving at its opinion, is attached to this Offer to Purchase as Annex B and incorporated herein by reference. Stockholders are urged to read this opinion in its entirety. The Special Committee was aware that Lazard becomes entitled to certain fees described under “The Offer — Fees and Expenses” upon the consummation of the Offer.

      5.  Timing of Completion. The Special Committee considered the anticipated timing of consummation of the transactions contemplated by the Merger Agreement, including the structure of the transactions as a tender offer for all of the Shares, which should allow stockholders to receive the transaction consideration earlier than in an alternative form of transaction, followed by the Merger in which remaining stockholders will receive the same consideration as received by stockholders who tender their Shares in the Offer.

      6.  Limited Conditions to Consummation. The Special Committee considered the fact that the obligation of Ford and the Purchaser to consummate the Offer and the Merger is subject to a limited number of conditions, with no financing condition. Moreover, Ford and the Purchaser have the financial resources to consummate the Offer and the Merger expeditiously. Ford and the Purchaser are still obligated to consummate the Merger even if no Shares are tendered in the Offer, if all other conditions to the Merger and the Offer are satisfied.

      7.  Appraisal Rights. The Special Committee considered the fact that stockholders who do not tender their Shares pursuant to the Offer will have the right to dissent from the Merger and to demand appraisal of the fair value of their Shares under the DGCL, whether or not a stockholder vote is required, as described under “Special Factors — Dissenters’ Rights.”

      8.  Possible Conflicts of Interest. The Special Committee also took into account the possible conflicts of interest of certain directors and members of management of both Hertz and Ford discussed below under “Special Factors — Interests of Certain Persons in the Offer and the Merger.”

      In reaching its determinations referred to above, the Hertz Board considered the following factors, each of which, in the view of the Hertz Board, supported such determinations: (i) the conclusions and recommendations of the Special Committee; (ii) the factors referred to above as having been taken into account by the Special Committee, including the receipt by the Special

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      The members of the Hertz Board, including the members of the Special Committee but excluding members who are officers and employees of Ford or ▇.▇. ▇▇▇▇▇▇ or their affiliates, evaluated the Offer and the Merger in light of their knowledge of the business, financial condition and prospects of Hertz, and based upon the advice of financial and legal advisors.

      The Hertz Board, including the members of the Special Committee, believes that the Offer and Merger are procedurally fair because, among other things: (i) the Special Committee consisted of independent directors appointed to represent the interests of ▇▇▇▇▇’▇ stockholders (other than the Purchaser and its affiliates); (ii) the Special Committee retained and was advised by its own independent legal counsel; (iii) the Special Committee retained and was advised by Lazard, as its independent financial advisor, to assist it in evaluating a potential transaction with Ford and the Purchaser; (iv) the nature of the deliberations pursuant to which the Special Committee evaluated the Offer and the Merger and alternatives thereto; and (v) the fact that the $35.50 per Share Offer Price resulted from arm’s-length bargaining between representatives of the Special Committee, on the one hand, and representatives of Ford, on the other.

      The Hertz Board and the Special Committee recognized that the Merger is not structured to require the approval of a majority of the stockholders of Hertz other than the Purchaser, and that the Purchaser currently has sufficient voting power to approve the Merger without the affirmative vote of any other stockholder of Hertz.

      The Special Committee and the Hertz Board also recognized that, while consummation of the Offer and the Merger will result in all stockholders (other than the Purchaser and its affiliates) being entitled to receive $35.50 in cash for each of their Shares, it will eliminate the opportunity for current stockholders (other than the Purchaser and its affiliates) to participate in the benefit of increases, if any, in the value of Hertz’s business following the Merger. Nevertheless, the Special Committee and the Hertz Board concluded that this fact did not justify foregoing the receipt of the immediate cash premium represented by the $35.50 per Share Offer Price.

      Neither the Special Committee nor the Hertz Board considered the liquidation of ▇▇▇▇▇’▇ assets and neither considered liquidation to be a viable course of action based on Ford’s desire for Hertz to continue to conduct its business as a subsidiary of Ford. Therefore, no appraisal of liquidation values was sought for purposes of evaluating the Offer and the Merger.

      In view of the wide variety of factors considered in connection with their evaluation of the Offer and the Merger, neither the Special Committee nor the Hertz Board found it practicable to, and did not, quantify or otherwise attempt to assign relative weights to the specific factors they considered in reaching their determinations.

      The foregoing discussion of the information and factors considered by the Special Committee and the Hertz Board is not intended to be exhaustive but is believed to include all material factors considered by the Special Committee and the Hertz Board. ▇▇▇▇▇’▇ executive officers have not been asked to make a recommendation as to the Offer or the Merger.

      The Hertz Board, by unanimous decision of those directors participating and based upon the recommendation of the Special Committee:

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      Messrs. ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, each directors on the Hertz Board, recused themselves from the meeting in light of their positions, in the case of Messrs. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇, as officers of Ford and, in the case of ▇▇. ▇▇▇▇▇▇, as a managing director of ▇.▇. ▇▇▇▇▇▇, ▇▇▇▇’s financial advisor in connection with the Offer and the Merger.

OPINION OF FINANCIAL ADVISOR

      Under a letter agreement, dated October 16, 2000 (the “Engagement Letter”), the Special Committee of the Hertz Board retained Lazard Frères & Co. LLC to act as its financial advisor in connection with the possible purchase by Ford of the Shares. As part of this engagement, the Special Committee requested that Lazard evaluate the fairness, from a financial point of view, to the holders of Class A Common Stock (other than the Purchaser and its affiliates) of the consideration to be received by such holders pursuant to the Merger Agreement. On January 16, 2001, Lazard delivered to the Special Committee its oral opinion that, as of that date, the consideration to be received by the holders of Class A Common Stock (other than the Purchaser and its affiliates) pursuant to the Merger Agreement was fair to such holders from a financial point of view. Lazard later confirmed its oral opinion by delivering to the Special Committee a written opinion dated January 16, 2001, which stated the considerations and assumptions upon which its opinion was based.

      THE FULL TEXT OF THE OPINION DATED JANUARY 16, 2001, WHICH EXPLAINS THE ASSUMPTIONS MADE, PROCEDURES FOLLOWED, MATTERS CONSIDERED AND LIMITATIONS ON THE SCOPE OF THE REVIEW UNDERTAKEN BY LAZARD IN RENDERING ITS OPINION, IS ATTACHED TO THIS OFFER TO PURCHASE AS ▇▇▇▇▇ ▇. ▇▇▇▇▇▇’▇ WRITTEN OPINION IS DIRECTED TO THE SPECIAL COMMITTEE AND ONLY ADDRESSES THE FAIRNESS OF THE CONSIDERATION TO BE RECEIVED BY THE HOLDERS OF CLASS A COMMON STOCK (OTHER THAN THE PURCHASER AND ITS AFFILIATES) IN THE OFFER AND THE MERGER PURSUANT TO THE MERGER AGREEMENT FROM A FINANCIAL POINT OF VIEW AS OF THE DATE OF THE OPINION. ▇▇▇▇▇▇’▇ WRITTEN OPINION DOES NOT ADDRESS ANY OTHER ASPECT OF THE OFFER OR THE MERGER AND DOES NOT CONSTITUTE A RECOMMENDATION TO ANY HERTZ STOCKHOLDER AS TO WHETHER STOCKHOLDERS SHOULD TENDER THEIR SHARES OR HOW STOCKHOLDERS SHOULD VOTE WITH RESPECT TO THE MERGER, IF SUBMITTED FOR THEIR APPROVAL. THE FOLLOWING IS ONLY A SUMMARY OF THE LAZARD OPINION. YOU ARE URGED TO READ THE ENTIRE OPINION.

      In arriving at its opinion, Lazard, among others things:

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      In conducting its analysis and in arriving at its opinion, Lazard relied upon the accuracy and completeness of the foregoing information, and did not assume any responsibility for any independent verification of such information or any independent valuation or appraisal of any of the assets or liabilities of Hertz, or concerning the solvency or fair value of Hertz. With respect to financial forecasts, Lazard assumed that they had been reasonably prepared on bases reflecting the best currently available estimates and judgments of management of Hertz as to the future financial performance of Hertz. Lazard assumed no responsibility for and expressed no view as to such forecasts or the assumptions on which they were based. ▇▇▇▇▇▇’▇ opinion was necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to Lazard as of, the date of its opinion.

      In rendering its opinion, Lazard assumed, with the consent of the Special Committee, that the Purchaser’s acquisition of Hertz would be consummated on the terms described in the draft of the Merger Agreement it reviewed, without any waiver of any material terms or conditions by Hertz, and that obtaining the necessary regulatory approvals for the Purchaser’s acquisition of Hertz will not have an adverse effect on Hertz or the transaction. Lazard noted in its opinion that, in arriving at its opinion, with the consent of the Special Committee, it did not solicit interest from any party with respect to the acquisition of Hertz or any of its assets.

      The following is a brief summary of the material financial analyses performed by Lazard in preparing its opinion:

      Historical Stock Trading Analysis. Lazard reviewed the historical trading prices and volumes for the Shares for the period from April 25, 1997, through January 12, 2001. Lazard also compared the trading performance of the Shares for the period from April 25, 1997, to January 12, 2001, to an index of selected companies, the S&P 400 and Ford for the comparable period. Lazard compared the trading performance of the Shares on a one-year forward P/ E basis for the period from April 25, 1997, to January 12, 2001, to an index of selected companies, the S&P 400 and Ford. The index of selected comparable companies was comprised of ANC Rental, Avis, Budget and Dollar Thrifty. Lazard also reviewed the volume traded at various stock prices of the Shares for the periods from April 25, 1997, through September 20, 2000, and from September 21, 2000, through January 12, 2001.

      Public Market Valuation Analysis. Lazard reviewed and compared certain financial information for Hertz to the corresponding financial information, ratios and public market multiples for the following four publicly traded corporations:

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      The selected companies were chosen because they are publicly traded companies with operations or businesses that for purposes of analysis may be considered similar to Hertz’s operations or businesses.

      Lazard calculated and compared various financial multiples and ratios based on information it obtained from SEC filings, publicly available research reports and the Institutional Brokers Estimate System (“IBES”). The multiples for each of the selected companies were based on the most recent SEC filings, publicly available research reports, IBES and closing prices on January 12, 2001 (except for Avis, which is based on the August 14, 2000, closing price, which was one day before Cendant Corp.’s bid for Avis, which is discussed below, was announced). Lazard analyzed the following information for the selected companies:

      The results of the analyses are summarized below:

      Based on these analyses, Lazard determined that the implied equity value per Share ranged from approximately $20.50 to $27.50 per Share.

      Select Precedent Transactions Analysis. Lazard reviewed selected publicly available and stock market information of the following four transactions:

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      Specifically, Lazard analyzed the respective multiples of the price per share for these transactions to the last twelve month earnings per share (“LTM EPS”), and the total transaction values for these transactions to the last twelve months’ Adjusted EBIT, Adjusted EBITDA and revenues. The Lazard analysis indicated the following:

      Based on these analyses, Lazard determined that the implied equity value per Share ranged from approximately $35.00 to $42.50 per Share.

      Cendant/Avis Transaction Analysis. Lazard also separately analyzed the acquisition of Avis Group Holdings, Inc. by Cendant Corp. because of its belief that this transaction was the most relevant and recent transaction. Specifically, Lazard analyzed the multiples of the price per share in the transaction to the estimated 2000 and 2001 IBES earnings per share estimates, and the total transaction value to the estimates from publicly available research for 2000 and 2001 revenues, Adjusted EBITDA and Adjusted EBIT. The Lazard analysis indicated the following:

      Lazard then derived a range of implied per share equity values for Hertz by applying the results for the Avis transaction listed in the charts above to corresponding data for Hertz prepared by management of Hertz. The resulting implied equity value of Hertz ranged from approximately $25.50 to $37.50 per Share.

      Discounted Equity Cash Flow Analysis. Lazard performed a discounted equity cash flow analysis to determine the indicative range of present values per Share based on projections provided by Hertz for the years 2001 through 2005. This range was determined by adding (1) the present values of the estimated future levered free cash flows that Hertz could generate over the five-year period 2001 to 2005, and (2) the present value of Hertz’s “terminal value” at the end of year 2005. The Hertz terminal value at the end of the period was determined by applying a range of one-year forward P/ E exit multiples to estimated 2006 Levered Net Income. Year 2006 Levered Net Income was determined by extrapolating 2005 Levered Net Income at its forecast growth rate for 2005. Lazard used a forward P/ E multiple to Levered Net Income range of 8.0x to 10.0x and an equity discount rate to discount levered free cash flows and the terminal value back to present value of 12.0% to 14.0%.

      In conducting the discounted equity cash flow analysis, Lazard made several adjustments to ▇▇▇▇▇’▇ financial forecasts which assumed no acquisitions and applied all excess cash to the paydown of debt. Lazard adjusted Hertz’s capital structure going forward to hold it constant at Hertz’s traditional operating debt-to-equity ratio of approximately 3.9:1, with all excess cash paid out as dividends and included in Levered Free Cash Flow. Levered Net Income is calculated to reflect additional interest expense generated by the additional debt required to maintain a constant debt-to-equity ratio of 3.9:1. In addition, to reflect the constant capital structure, the average interest

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      Comparable Minority Buyout Transaction Analysis. Lazard analyzed certain information relating to selected minority buyout transactions since 1998 that met the following criteria: (i) in cash; (ii) transaction value was greater than $50 million; (iii) acquirer controlled greater than 50% of the outstanding shares before the transaction; and (iv) 100% of the total outstanding shares were acquired. Lazard compared the final premiums/discounts paid in these selected transactions to: (i) the initial offer made in the transaction; (ii) the share price of the target company one month prior to the initial offer; (iii) the 52-week high of the target company’s share price before the initial offer; and (iv) the 52-week low of the target company’s share price before the initial offer. ▇▇▇▇▇▇’▇ analysis indicated the following:

      Based on the median, low and high premiums/discounts derived from such data and applying them to the applicable price of the Shares, Lazard determined that the implied equity value per Share ranged from approximately $23.00 per Share to $69.50 per Share.

      Lazard performed a variety of financial and comparative analyses solely for the purpose of providing its opinion to the Special Committee that the consideration to be received by the holders of Shares (other than the Purchaser and its affiliates) pursuant to the Merger Agreement was fair from a financial point of view. The summary of these analyses is not a complete description of the analyses performed by Lazard. Preparing a fairness opinion is a complex analytic process and is not readily susceptible to partial analysis or summary description. Lazard believes that its analyses must be considered as a whole. Selecting portions of its analyses and factors, without considering all analyses and factors, could create a misleading or incomplete view of the processes underlying the analyses and its opinion.

      In its analyses, Lazard made numerous assumptions with respect to industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond the control of Hertz. The estimates contained in these analyses and the valuation ranges resulting from any particular analysis do not necessarily indicate actual values or predict future results or values, which may be significantly more or less favorable than those suggested by these analyses. In addition, analyses and estimates relating to the value of the businesses or securities are not appraisals and do not reflect the prices at which the businesses or securities may actually be sold or the prices at which their securities may trade. As a result, these analyses and estimates are inherently subject to substantial uncertainty. No company or transaction used in the analysis as a comparison is identical to Hertz or the contemplated transaction.

      ▇▇▇▇▇▇’▇ opinion and financial analyses were not the only factors considered by the Special Committee and the Hertz Board in making their evaluation of the Merger and should not be viewed as determinative of the views of the Special Committee, the Hertz Board or ▇▇▇▇▇’▇ management.

      The opinion of Lazard was not intended to and does not constitute a recommendation to any holder of the Shares as to whether such holder should tender such holder’s Shares in the tender offer or vote in favor of the Merger.

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      Under the terms of ▇▇▇▇▇▇’▇ engagement, Hertz has agreed to pay Lazard certain fees and to reimburse Lazard for certain expenses. See “The Offer — Fees and Expenses.”

      Lazard is an internationally recognized investment banking firm and is continually engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements, leveraged buyouts, and valuations for real estate, corporate and other purposes. Lazard was selected to act as investment banker to the Special Committee because of its expertise and its reputation in investment banking and mergers and acquisitions.

POSITION OF FORD AND THE PURCHASER REGARDING FAIRNESS OF THE OFFER AND THE MERGER

      Ford and the Purchaser believe that the consideration to be received by ▇▇▇▇▇’▇ stockholders (other than the Purchaser and its affiliates) pursuant to the Offer and the Merger is fair to Hertz’s stockholders (other than the Purchaser and its affiliates). Ford and the Purchaser base their belief on the following factors: (i) the historical and deteriorating projected financial performance of Hertz and its financial results (as discussed under “The Offer — Certain Information Concerning Hertz; Certain Projections”); (ii) the fact that the consideration to be paid in the Offer represents a premium of 46.4% over the reported closing sale price per Share on the NYSE Composite Tape on September 20, 2000, the last full trading day prior to the announcement by Hertz that it had received a preliminary, non-binding proposal from Ford to acquire all of the outstanding Shares and a premium of 18.3% over Ford’s initial offer price of $30 per share; (iii) the fact that the Offer and the Merger will each provide consideration to the stockholders entirely in cash; (iv) the fact that the Offer and the Merger and the other terms and conditions of the Merger Agreement were the result of arm’s-length, good faith negotiations between the Special Committee and Ford and their respective advisors; (v) the fact that the Special Committee received an opinion from Lazard that the $35.50 per Share in cash to be received by the holders of Shares (other than the Purchaser and its affiliates) in the Offer and the Merger is fair from a financial point of view to such stockholders; and (vi) the conclusions and recommendations of the Special Committee and the Hertz Board that each of the Offer and the Merger is fair to and in the best interests of ▇▇▇▇▇’▇ stockholders (other than the Purchaser and its affiliates).

      Ford and the Purchaser did not find it practicable to assign, nor did they assign, relative weights to the individual factors considered in reaching their conclusions as to fairness. As further discussed below in “Special Factors — Purpose and Structure of the Offer and the Merger; Reasons of Ford for the Offer and Merger,” Ford believes that the acquisition of 100% of Hertz’s equity interests would give Ford greater operational flexibility and synergistic opportunity to make Hertz a key component of Ford’s business strategy. Since Ford intends for Hertz to be an ongoing part of Ford’s business, no appraisal of liquidation value was sought for purposes of valuing the Shares. Although ▇.▇. ▇▇▇▇▇▇ generally assisted Ford in this transaction and, in particular, advised Ford on negotiating strategies, participated in negotiations with Lazard and analyzed ▇▇▇▇▇’▇ projections and assumptions thereto, ▇.▇. ▇▇▇▇▇▇ was not asked to and did not deliver a fairness opinion as to the $35.50 per Share to be received by the stockholders of Hertz (other than the Purchaser and its affiliates).

      The foregoing discussion of the information and factors considered by Ford and the Purchaser is not intended to be exhaustive but is believed to include all material factors considered by Ford and the Purchaser.

PURPOSE AND STRUCTURE OF THE OFFER AND THE MERGER; REASONS OF FORD FOR THE OFFER AND THE MERGER

      Until 1987, when Ford first acquired an ownership interest in Hertz, Hertz had been a subsidiary of UAL Corporation (formerly Allegis Corporation), which had acquired Hertz’s outstanding capital

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      Ford approved the sale of a portion of Hertz to the public as a means of unlocking the value of ▇▇▇▇’s interest in Hertz as reflected in the price of Ford stock. At the time of the public offering, equity in car rental companies was valued at a much higher multiple of earnings than was the equity of automotive companies. It was believed, however, that the value of the stock in Hertz owned by Ford was not fully reflected in the price of Ford stock.

      By virtue of a sale of a portion of Hertz’s equity to the public, Ford reasoned that a market value for Hertz would be established at a multiple of earnings similar to those of other car rental companies, and this value would be ascribed to Ford’s ownership interest in Hertz, which thus would be reflected in the price of Ford stock. Further, Ford believed that the higher level of transparency with respect to ▇▇▇▇▇’▇ results and earnings potential as a result of the public float would result in a more reliable valuation of Hertz.

      Since the time of the sale to the public, a number of circumstances both within Ford and external to Ford have occurred that have prompted Ford to embark on this Offer and the Merger at this time.

      First, Ford’s business strategy has evolved to focus much more on the revenue stream of automotive related products and services down the value chain beyond the sale of vehicles. These include, for example, automotive repair and recycling, insurance products, telematics and rental services. This strategy is embodied in Ford’s vision to become the world’s leading consumer company for automotive products and services. By owning 100% of ▇▇▇▇▇’▇ equity interests, Ford believes it will have greater operational flexibility and synergistic opportunities to make Hertz a key component of this strategy.

      Second, the primary reason for selling a portion of Hertz to the public no longer appears to be valid. Following its initial public offering, ▇▇▇▇▇’▇ stock initially reflected the higher earnings multiples for car rental companies discussed above; however, more recently the stock prices of car rental companies no longer trade at significantly different multiples of earnings than that of the automotive companies. Ford believes this decline reflects ▇▇▇▇▇’▇ prospects for future earnings growth due to the present economic and industry outlook affecting car rental companies generally and Hertz in particular.

      Third, Ford believes that the present capital structure of Hertz is no longer viable for the long term. This is due, in part, to the relatively small number of shares of Hertz owned by the public (the public float). Ford believes that the public float is too small to attract large institutional investors, which can have a negative effect on ▇▇▇▇▇’▇ stock price despite good financial performance. Currently, ▇▇▇▇▇’▇ management compensation scheme is significantly tied to the performance of the Hertz Common Stock. Ford believes that if actions are not taken to deal with this compensation issue it may be difficult to retain and/or attract quality management in the future.

      Fourth, by Ford owning 100% of Hertz’s equity interests, operational efficiencies may be achieved and significant costs associated with Hertz being public can be eliminated.

      Ford is pursuing the transaction at this time because it has concluded in recent months that the market valuations for car rental companies are not likely to improve in the near future. In addition, until recently, Ford’s management’s time and efforts were focused primarily on other transactions such as the acquisition of the Land Rover business from the BMW Group, the spin-off of Visteon Corporation (Ford’s former automotive components and systems subsidiary) and a recapitalization of Ford, known as Ford’s Value Enhancement Plan.

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      Ford believes that this transaction will result in a number of benefits to Hertz including providing increased operating flexibility with respect to its relationship with Ford, the elimination of certain expenses relating to its being a public company, and alignment of Hertz’s management goals and compensation programs with those of Ford, eliminating or reducing the management retention problems that might otherwise result. The acquisition of the Shares not owned by the Purchaser or its affiliates has been structured as a cash tender offer followed by a cash merger in order to effect a prompt and orderly transfer of ownership of Hertz from the public stockholders to Ford and provide stockholders with cash for all of their Shares.

      Ford has concluded that the Offer and the Merger, including the $35.50 per Share in cash to be received by stockholders of Hertz (other than the Purchaser and its affiliates), are fair to the holders of the Shares (other than the Purchaser and its affiliates) based upon the factors described above under “Special Factors — Position of Ford and the Purchaser Regarding Fairness of the Offer and the Merger.”

PLANS FOR HERTZ AFTER THE OFFER AND THE MERGER; CERTAIN EFFECTS OF THE OFFER

      Pursuant to the Merger Agreement, upon completion of the Offer, Ford and the Purchaser intend to effect the Merger in accordance with the Merger Agreement. See “Special Factors — The Merger Agreement.”

      Except as otherwise described in this Offer to Purchase, Ford has no current plans or proposals or negotiations which relate to or would result in: (i) other than the Merger, an extraordinary corporate transaction, such as a merger, reorganization or liquidation involving Hertz or any of its subsidiaries; (ii) any purchase, sale or transfer of a material amount of assets of Hertz or any of its subsidiaries; (iii) any change in the management of Hertz or any change in any material term of the employment contract of any executive officer; or (iv) any other material change in Hertz’s corporate structure or business.

      Nevertheless, Ford may initiate a review of Hertz and its assets, corporate structure, capitalization, operations, properties, policies, management and personnel to determine what changes, if any, would be desirable, following the Merger in order best to organize and integrate the activities of Hertz and Ford. In particular, Ford plans to change the Hertz Board by electing persons as directors of Hertz who likely will be employees of Ford or Hertz or their affiliates, and may also consider material changes in the present dividend rate and policy, indebtedness and capitalization of Hertz and may consider pursuing acquisition opportunities through Hertz. In addition, Ford may take actions to achieve cost savings through potential scale efficiencies. Ford may also take steps to align goals and rewards in the merged Hertz organization such as adopting a Ford incentive plan for Hertz management. Ford may also seek to improve operating flexibility by transferring ownership and management responsibility of a fleet leasing business to Hertz. Ford expressly reserves the right to make any changes that it deems necessary or appropriate in light of its review or in light of future developments.

      As a result of the Offer, the direct and indirect interest of Ford in ▇▇▇▇▇’▇ net book value and net earnings will increase to the extent of the number of Shares acquired under the Offer. Following consummation of the Merger, ▇▇▇▇’s indirect interest in such items will increase to 100% and Ford and its subsidiaries will be entitled to all benefits resulting from that interest, including all income generated by ▇▇▇▇▇’▇ operations and any future increase in ▇▇▇▇▇’▇ value and the right to elect all members of the Hertz Board. Similarly, Ford will also bear the risk of losses generated by ▇▇▇▇▇’▇ operations and any decrease in the value of Hertz after the Merger. Upon consummation of the Merger, Hertz will become a privately held corporation. Accordingly, stockholders other than the Purchaser will not have the opportunity to participate directly in the earnings and growth of Hertz after the Merger and will not have any right to vote on corporate matters. Similarly, stockholders will not face the risk of losses generated by ▇▇▇▇▇’▇ operations or decline in the value of Hertz after the Merger. If the Merger had been consummated at January 1, 2000, Purchaser’s beneficial interest in

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      As a result of the Merger, public trading of Hertz’s Class A Common Stock will cease and the registration of such shares under the Exchange Act will be terminated. Consequently, following the Merger, Hertz will be relieved of the duty to file proxy and information statements, and its officers, directors and more than 10% stockholders will be relieved of the reporting requirements under, and the “short swing” profit liability provisions of, Section 16 of the Exchange Act. Hertz will no longer be a public company and its stock will no longer be traded on the NYSE. However, because its debt securities will continue to be publicly-traded, Hertz will continue to file periodic reports under the Exchange Act following the Merger.

      Hertz currently has an Employee Stock Purchase Plan (the “ESPP”) permitting eligible employees of Hertz and certain of its subsidiaries to purchase Shares of Class A Common Stock through accumulated after-tax payroll deductions at a discount to fair market value. Hertz has informed the Purchaser that the ESPP will be terminated not later than the earlier of the Effective Time (as defined below) of the Merger or such time as the Shares are de-listed from the NYSE. Upon termination of the ESPP, all accumulated after-tax payroll deductions that have not been used to purchase Class A Common Stock will be returned to the participants, without interest, in accordance with the terms of the ESPP.

      Hertz currently has a Long-Term Equity Compensation Plan under which options to purchase Shares of Class A Common Stock and awards of restricted Shares of Class A Common Stock have been granted to officers and certain employees of Hertz and its subsidiaries. Hertz also currently has a Nonemployee Director Stock Option Plan under which options to acquire Shares of Class A Common Stock have been granted to nonemployee Directors of Hertz.

      Participants who own Shares through the ESPP may tender such Shares pursuant to the Offer and receive the Offer Price for such Shares or, if such Shares are not tendered, will be entitled to receive the Merger Consideration for such Shares as soon as practicable following the Effective Time in accordance with the terms of such plan and the Merger Agreement. Participants who own restricted Shares granted under the Long-Term Equity Compensation Plan may not tender such Shares in the Offer, but will receive the Merger Consideration for each Share as soon as practicable following the Effective Time in accordance with the terms of the Merger Agreement. Subject to approval of, and any applicable conditions imposed by, the Compensation Committee of Ford’s Board of Directors and the Hertz Board, in general, Ford plans (i) to convert to Ford stock options outstanding Hertz stock options granted under the Long-Term Equity Compensation Plan, and (ii) to cash out outstanding Hertz stock options granted under the Nonemployee Director Stock Option Plan based on a Black-Scholes valuation.

THE MERGER AGREEMENT

      The following is a summary of the Merger Agreement, which is attached as Annex A to this Offer to Purchase. The summary is qualified in its entirety by reference to the Merger Agreement. The following summary may not contain all of the information important to you. Capitalized terms not otherwise defined in the following summary or elsewhere in this Offer to Purchase shall have the meanings set forth in the Merger Agreement.

      The Offer. The Merger Agreement provides for the making of the Offer. The Merger Agreement provides that Ford will cause the Purchaser to commence the Offer as promptly as practicable, but in no event later than 15 business days from the public announcement by Ford and Hertz of the Merger Agreement. Subject to applicable SEC regulations, the Purchaser (i) shall not be required to purchase, (ii) may delay the payment for, and (iii) may terminate the Offer as to any Shares not

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      Although the Purchaser has expressly reserved the right to amend or make changes in the terms and conditions of the Offer, the Purchaser agreed in the Merger Agreement that it will not, without prior written consent of Hertz: (i) decrease the Offer Price or change the form of the consideration payable in the Offer; (ii) impose any additional conditions to the Offer from those described below in “The Offer — Conditions of the Offer,” or (iii) otherwise amend the Offer in a manner that would adversely affect holders of Shares. Hertz has agreed that no Shares held by Hertz or any subsidiary of Hertz will be tendered pursuant to the Offer.

      The “Initial Expiration Date” of the Offer will be Midnight on Friday, March 2, 2001. The Purchaser has the right to extend the Offer beyond the Initial Expiration Date in the following events: (i) from time to time if, at the Initial Expiration Date (or an extended expiration date, if applicable), any of the conditions to the Offer have not been satisfied or waived; (ii) for any period required by the SEC or applicable law; (iii) for an aggregate of ten business days (for all such extensions) if all of the conditions to the Offer have been satisfied or waived but the number of Shares validly tendered and not withdrawn is insufficient to result in the Purchaser owning at least 90% of the Shares then outstanding; or (iv) pursuant to an amendment to the Offer providing for a “subsequent offering period” not exceeding 20 business days, to the extent permitted under, and in compliance with, Rule 14d-11 of the Exchange Act.

      Recommendation. Each of the Special Committee and the Hertz Board has (i) determined that each of the Offer and the Merger is fair to and in the best interests of ▇▇▇▇▇’▇ stockholders (other than the Purchaser and its affiliates); (ii) approved the Merger Agreement and the transactions contemplated thereby, including, without limitation, the Offer and the Merger; and (iii) resolved to recommend that ▇▇▇▇▇’▇ stockholders accept the Offer, tender their Shares pursuant thereto and approve and adopt the Merger Agreement and the Merger if submitted for their approval. However, this recommendation may be withdrawn or modified to the extent that the Hertz 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 ▇▇▇▇▇’▇ stockholders under applicable law.

      The Merger. The Merger Agreement provides that, upon the terms and subject to the conditions thereof, FSG II shall be merged with and into Hertz. As soon as practicable, and in no event later than three business days, after the satisfaction or waiver of the conditions set forth in Article VIII of the Merger Agreement, as described below in “— Conditions to the Merger,” (or on such other date as the parties to the Merger Agreement agree to in writing) Ford, the Purchaser, FSG II and Hertz shall cause the Merger to be consummated by filing a certificate of merger or a certificate of ownership and merger (the “Merger Certificate”) with the Secretary of State of the State of Delaware in accordance with the DGCL. The filing of the Merger Certificate or such later time as may be agreed to by the parties to the Merger Agreement and set forth in the Merger Certificate shall be the “Effective Time” of the Merger.

      As a result of the Merger, the separate corporate existence of FSG II will cease and Hertz will be the Surviving Corporation, with all of its rights, privileges, immunities, powers and franchises continuing unaffected by the Merger. The certificate of incorporation and bylaws of Hertz as in effect immediately prior to the Effective Time will be the certificate of incorporation and bylaws of the Surviving Corporation, until thereafter amended as provided by law and such certificate of incorporation and bylaws. The individuals serving as directors and officers of Hertz at the Effective Time will be the directors and officers of the Surviving Corporation from and after the Effective Time, until successors are duly elected or appointed and qualified in accordance with applicable law.

      At the Effective Time, (i) each share of Common Stock issued and outstanding immediately prior to the Effective Time (other than Shares of holders exercising dissenters’ rights, as described below in “Special Factors — Dissenters’ Rights,” and Shares to be cancelled as provided in

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      Agreements of the Purchaser and Hertz. The Merger Agreement provides that if, as a result of the purchase of Shares pursuant to the Offer, the Purchaser owns in the aggregate at least 90% of the Shares outstanding upon completion of the Offer and continues to hold at least 90% of the outstanding Class B Common Stock, the parties will take all necessary and appropriate action to cause the Merger to become effective as soon as practicable after satisfaction or waiver of the conditions to the Merger set forth in Article VIII of the Merger Agreement, as described below in “— Conditions to the Merger,” without a meeting of stockholders in accordance with Section 253 of the DGCL. Such method is referred to herein as a “Short-Form Merger.” Following the purchase of Shares pursuant to the Offer, if the Purchaser owns in the aggregate less than 90% of the Shares outstanding, the Purchaser has agreed to convert such number of shares of Class B Common Stock into Class A Common Stock to the extent that, after giving effect to such conversion, Ford and the Purchaser would own in the aggregate the number of Shares necessary to effect a Short-Form Merger.

      Stockholders’ Meeting and Information Statement. Pursuant to the Merger Agreement, if required by law in order to consummate the Merger, (a) Hertz will take all action necessary to seek approval of the Merger and adoption of the Merger Agreement, either at a meeting or by written consent of the stockholders of Hertz, as promptly as practicable, and (b) as promptly as practicable after the acceptance for payment and purchase of Shares by the Purchaser pursuant to the Offer, Ford, the Purchaser, FSG II and Hertz will prepare, and Hertz will file with the SEC, a proxy statement, consent solicitation statement or information statement (referred to herein as an “Information Statement”) relating to the Merger to seek approval and adoption of the Merger Agreement. If a vote of the stockholders of Hertz is necessary to effect the Merger, the Purchaser has agreed in the Merger Agreement to vote or cause to be voted all shares of Common Stock owned by it in favor of the approval and adoption of the Merger Agreement and the Merger. If an Information Statement is required, Hertz has agreed that, subject to the fiduciary duties of the Hertz Board and the Special Committee, such Information Statement will include the recommendation of the Hertz Board and the Special Committee that the stockholders of Hertz approve and adopt the Merger Agreement.

      Certain Covenants. Hertz has agreed that, prior to the Effective Time, Hertz will, and will cause its subsidiaries to: (i) operate its business in the usual and ordinary course consistent with past practices, (ii) use its reasonable best efforts to preserve substantially intact its business organization, maintain its rights and franchises, retain the services of its respective principal officers and key employees and maintain its relationships with its respective principal customers, suppliers and other persons with which it or any of its subsidiaries has significant business relations, (iii) use its reasonable best efforts to maintain and keep its properties and assets in as good repair and condition as at present, ordinary wear and tear excepted, and (iv) take no action with respect to options to purchase stock of Hertz that would result in an acceleration of vesting of such stock options in connection with the execution and delivery of the Merger Agreement or the consummation of any transactions contemplated thereby or otherwise.

      Pursuant to the Merger Agreement, Hertz has agreed to impose certain specific restrictions, subject to exceptions described in the Merger Agreement, on itself and its subsidiaries effective from the date of the Merger Agreement until the Effective Time. These include restrictions on: (i) changes to employment, compensation or employee benefit arrangements with directors and executive officers; (ii) the payment of dividends or other distributions other than regular quarterly dividends; (iii) redemptions, purchases or exchanges of capital stock, reorganizations or recapitalization of

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      Hertz has agreed to give prompt notice to the Purchaser and FSG II of the occurrence or nonoccurrence of: (i) any event causing a representation or warranty contained in the Merger Agreement to be untrue or inaccurate or any event causing a covenant or condition not to be complied with; and (ii) any failure of Hertz to comply with or satisfy any covenant, condition or agreement under the Merger Agreement. Hertz has also agreed to give the Purchaser and FSG II prompt written notice of any proposal, offer or other communication from any person: (x) relating to the acquisition of substantially all of the capital stock or assets of Hertz; (y) to enter into any business combination with Hertz or any of its subsidiaries; or (z) to enter into any other extraordinary business transaction involving Hertz or any of its subsidiaries.

      The parties to the Merger Agreement have agreed that the certificate of incorporation of the Surviving Corporation will contain the provisions relating to the indemnification of officers and directors currently contained in the certificate of incorporation of Hertz and that, for a period of six years after the Effective Time, such provisions will not be modified in any way that adversely affects the rights of individuals who were, at or prior to the Effective Time, officers or directors of Hertz in respect of actions or omissions occurring at or prior to the Effective Time. From and after the Effective Time, the Surviving Corporation will indemnify and hold harmless each present and former director and officer of Hertz and of each subsidiary of Hertz, and each individual who served as a director, officer, trustee, partner, fiduciary, employee or agent of another entity at the request of Hertz against all liabilities in respect of acts or omissions occurring at or before the Effective Time (including the transactions contemplated by the Merger Agreement). For six years from the Effective Time, Ford has agreed to provide directors’ and officers’ liability insurance covering those persons who are currently covered by the directors’ and officers’ liability insurance policy currently provided for directors and officers of Hertz on terms comparable to such existing coverage, provided that Ford has no obligation to provide or maintain levels of coverage in excess of those to which directors and officers of Ford are at the time entitled. If the Surviving Corporation or any of its successors or assigns (i) consolidates with or merges into any other person and shall not be the continuing or surviving corporation or entity of such consolidation or merger, or (ii) transfers or conveys all or substantially all of its properties and assets to any person, then, and in each such case, to the extent necessary, proper provision shall be made so that the successors and assigns of the Surviving Corporation, as the case may be, shall assume the indemnification and insurance obligations of the Surviving Corporation discussed in this paragraph.

      Representations and Warranties. The Merger Agreement contains customary representations and warranties of the parties thereto including representations by Hertz with respect to, among other things: its organization and qualification and that of its subsidiaries; its certificate of incorporation and bylaws; capitalization; authority relative to the Merger Agreement; no conflicts; required filings and consents; SEC filings; financial statements; absence of certain changes or events; options and employment contracts; brokers; opinion of financial adviser and state takeover statutes. Certain representations and warranties in the Merger Agreement are qualified as to “materiality” or “Material Adverse Effect” on Hertz. For purposes of the Merger Agreement the term “Material Adverse Effect” means any change or effect that, individually or when taken together with all other such changes or effects, is or is reasonably likely to be materially adverse to the financial condition, assets, liabilities, business, operations or earnings of Hertz and its subsidiaries, taken as a whole, other than any such effect arising out of or resulting from general economic conditions or from changes in or generally affecting the industry in which Hertz operates or any effect arising out of the

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      The Merger Agreement also contains representations by Ford, the Purchaser and FSG II with respect to, among other things, their organization and qualification; their authority relative to the Merger Agreement; no conflicts; required filings and consents; financing; and the operations of FSG II.

      Conditions to the Merger. Article VIII of the Merger Agreement provides that the obligations of Ford, the Purchaser, FSG II and Hertz to consummate the Merger are subject to the satisfaction of the following conditions: (i) if required by Delaware law, the Merger Agreement shall have been approved and adopted by the requisite affirmative vote of the stockholders of Hertz in accordance with Delaware law and Hertz’s certificate of incorporation; (ii) no governmental entity shall have enacted, issued, promulgated, enforced or entered any law, executive order or award (whether temporary, preliminary or permanent) that is then in effect and has the effect of making the Merger illegal or otherwise prohibiting consummation of the Merger; and (iii) the Purchaser shall have purchased Shares pursuant to the Offer, except where the reason for failure to purchase Shares pursuant to the Offer is the absence of tenders of Shares.

      Termination. The Merger Agreement may be terminated and the Offer and the Merger may be abandoned at any time prior to the Effective Time, notwithstanding any requisite approval and adoption of the Merger Agreement by the stockholders of Hertz, (i) by mutual written consent duly authorized by the board of directors of each of Hertz, the Purchaser and FSG II; (ii) by Hertz, the Purchaser or FSG II in the event of a final and nonappealable order or action by a government entity restraining, enjoining or otherwise prohibiting consummation of the Offer or the Merger; (iii) by the Purchaser or FSG II if the Special Committee withdraws, modifies or changes its recommendation of the Merger Agreement, the Offer or the Merger in a manner adverse to the Purchaser or FSG II or shall have resolved to do any of the foregoing; (iv) prior to the purchase of Shares pursuant to the Offer, by the Purchaser or FSG II upon a breach of any representation, warranty, covenant or agreement on the part of Hertz set forth in the Merger Agreement, or if any representation or warranty of Hertz shall have become untrue, provided that, if such breach is curable by Hertz through the exercise of its reasonable efforts and for as long as Hertz continues to exercise such reasonable efforts, the Purchaser and FSG II may not terminate the Merger Agreement under this provision; (v) prior to the purchase of Shares pursuant to the Offer, by Hertz upon a breach of any representation, warranty, covenant or agreement on the part of the Purchaser or FSG II set forth in the Merger Agreement, or if any representation or warranty of the Purchaser or FSG II shall have become untrue, provided that, if such breach is curable by the Purchaser or FSG II as the case may be, through the exercise of its reasonable efforts and for as long as the Purchaser or FSG II, as the case may be, continues to exercise such reasonable efforts, Hertz may not terminate the Merger Agreement under this provision; (vi) by Hertz (as agreed to by the Special Committee) if due to an occurrence or circumstance, not involving a breach by Hertz of its obligations under the Merger Agreement, which would result in a failure to satisfy any of the conditions described in “The Offer — Conditions of the Offer” or otherwise, the Purchaser shall have failed to commence the Offer within 15 business days following the date of the Merger Agreement, terminated the Offer or permitted the Offer to expire without the purchase of Shares thereunder; or (vii) by the Purchaser or FSG II after June 30, 2001, if the Purchaser shall not have theretofore purchased Shares pursuant to the Offer solely as a result of a failure to satisfy any of the conditions described in “The Offer — Conditions of the Offer.” If the Merger Agreement is terminated, the Merger Agreement will become void and there will be no liability under the Merger Agreement on the part of Ford, the Purchaser, FSG II or Hertz or any of their respective officers or directors, and all rights and obligations of the parties will cease, provided that termination will not relieve any party from liability for a willful breach of any of its representations, warranties, covenants or agreements set forth in the Merger Agreement.

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      Fees and Expenses. All expenses incurred in connection with the Merger Agreement and the transactions contemplated thereby will be paid by the party incurring such expenses, whether or not the Offer, the Merger or any other transaction is consummated.

      Amendment and Waivers. To the fullest extent permitted by the DGCL, the Merger Agreement may be amended by the parties by action taken by or on behalf of their respective boards of directors at any time prior to the Effective Time, provided that any such amendment that changes the Offer Price or the Merger Consideration must also be approved by the Special Committee.

      At any time prior to the Effective Time, any party to the Merger Agreement may (i) extend the time for the performance of any obligation or other act of another party to the Merger Agreement, (ii) waive any inaccuracy in the representations and warranties of another party contained in the Merger Agreement or in any document delivered pursuant to the Merger Agreement and (iii) waive compliance with any agreement of another party or condition to its own obligations contained in the Merger Agreement, provided that, if Hertz seeks to make such extension or waiver as provided in clause (i), (ii) or (iii) above, it must first obtain the approval of the Special Committee. Any such extension or waiver shall be valid if set forth in an instrument in writing signed by the party or parties to be bound.

DISSENTERS’ RIGHTS

      Under Section 262 of the DGCL, any holder of Shares at the Effective Time (a “Remaining Stockholder”) who does not wish to accept the Merger Consideration pursuant to the Merger has the right to seek an appraisal and be paid the “fair value” of its Shares at the Effective Time (exclusive of any element of value arising from the accomplishment or expectation of the Merger) judicially determined and paid to it in cash provided that such holder complies with the provisions of such Section 262 of the DGCL.

      The following is a brief summary of the statutory procedures to be followed by a Remaining Stockholder in order to dissent from the Merger and perfect appraisal rights under Delaware law. This summary is not intended to be complete and is qualified in its entirety by reference to Section 262 of the DGCL, the text of which is set forth in Annex C hereto. Any Remaining Stockholder considering demanding appraisal is advised to consult legal counsel. Dissenters’ rights will not be available unless and until the Merger is consummated.

      Remaining Stockholders of record who desire to exercise their appraisal rights must fully satisfy all of the following conditions. A written demand for appraisal of Shares must be delivered to the Secretary of Hertz (x) before the taking of the vote on the approval and adoption of the Merger Agreement if the Merger is being consummated following approval thereof at a meeting of ▇▇▇▇▇’▇ stockholders (a “long-form merger”) or (y) within 20 days after the date that the Surviving Corporation mails to the Remaining Stockholders a notice (the “Notice of Merger”) to the effect that the Merger has been approved and/or is effective and that appraisal rights are available (and includes in such notice a copy of Section 262 of the DGCL and any other information required thereby) if the Merger is being effected without a vote or meeting of ▇▇▇▇▇’▇ stockholders either in a Short-Form Merger pursuant to Section 253 of the DGCL or otherwise by stockholder written consent without a meeting of stockholders (both of which are referred to in this discussion as a “Short-Form Merger”). If the Merger is effected as a long-form merger, this written demand for appraisal of Shares must be in addition to and separate from any proxy or vote abstaining from or against the approval and adoption of the Merger Agreement, and neither voting against, abstaining from voting, nor failing to vote on the Merger Agreement will constitute a demand for appraisal within the meaning of Section 262 of the DGCL. In the case of a long-form merger, any stockholder seeking appraisal rights must hold the Shares for which appraisal is sought on the date of the making of the demand, continuously hold such Shares through the Effective Time, and otherwise comply with the provisions of Section 262 of the DGCL. Any holder of Shares who votes or delivers

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      In the case of both a Short-Form Merger and a long-form merger, a demand for appraisal must be executed by or for the stockholder of record, fully and correctly, as such stockholder’s name appears on the stock certificates. If ▇▇▇▇▇▇ are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, such demand must be executed by the fiduciary. If Shares are owned of record by more than one person, as in a joint tenancy or tenancy in common, such demand must be executed by all joint owners. An authorized agent, including an agent for two or more joint owners, may execute the demand for appraisal for a stockholder of record; however, the agent must identify the record owner and expressly disclose the fact that, in exercising the demand, he is acting as agent for the record owner.

      A record owner, such as a broker, who holds Shares as a nominee for others, may exercise appraisal rights with respect to the Shares held for all or less than all beneficial owners of Shares as to which the holder is the record owner. In such case the written demand must set forth the number of Shares covered by such demand. Where the number of Shares is not expressly stated, the demand will be presumed to cover all Shares outstanding in the name of such record owner. Beneficial owners who are not record owners and who intend to exercise appraisal rights should instruct the record owner to comply strictly with the statutory requirements with respect to the exercise of appraisal rights before the date of any meeting of stockholders of Hertz called to approve the Merger in the case of a long-form merger and within 20 days following the mailing of the Notice of Merger in the case of a Short-Form Merger.

      Remaining Stockholders who elect to exercise appraisal rights must mail or deliver their written demands to: Secretary, The Hertz Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇. The written demand for appraisal should specify the stockholder’s name and mailing address, the number of Shares covered by the demand and that the stockholder is thereby demanding appraisal of such Shares. In the case of a long-form merger, Hertz must, within ten days after the Effective Time, provide notice of the Effective Time to all stockholders who have complied with Section 262 of the DGCL and have not voted for approval and adoption of the Merger Agreement.

      Remaining Stockholders electing to exercise their appraisal rights under Section 262 must not vote for the approval and adoption of the Merger Agreement or consent thereto in writing. Voting or consenting in favor of the approval and adoption of the Merger Agreement, or delivering a proxy in connection with the stockholders meeting called to approve the Merger Agreement (unless the proxy votes against, or expressly abstains from the vote on, the approval and adoption of the Merger Agreement), will constitute a waiver of the stockholder’s right of appraisal and will nullify any written demand for appraisal submitted by the stockholder.

      Regardless of whether the Merger is effected as a long-form merger or a Short-Form Merger, within 120 days after the Effective Time, either Hertz or any stockholder who has complied with the required conditions of Section 262 and who is otherwise entitled to appraisal rights may file a petition in the Delaware Court of Chancery demanding a determination of the fair value of the Shares of the dissenting stockholders. This petition must also be served on the Surviving Corporation. If a petition for an appraisal is timely filed, after a hearing on such petition, the Delaware Court of Chancery will determine which stockholders are entitled to appraisal rights and thereafter will appraise the Shares owned by such stockholders, determining the fair value of such Shares, exclusive of any element of value arising from the accomplishment or expectation of the Merger, together with a fair rate of interest to be paid, if any, upon the amount determined to be the fair value. In determining fair value, the Delaware Court of Chancery is to take into account all relevant factors. In ▇▇▇▇▇▇▇▇▇▇ v. UOP, Inc., et al., the Delaware Supreme Court discussed the factors that could be considered in determining fair value in an appraisal proceeding, stating that “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court” should be considered and that “[f]air price obviously requires

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      Remaining Stockholders who in the future consider seeking appraisal should have in mind that the fair value of their Shares determined under Section 262 could be more than, the same as, or less than the Merger Consideration if they do seek appraisal of their Shares, and that opinions of investment banking firms as to fairness from a financial point of view are not necessarily opinions as to fair value under Section 262 of the DGCL. The cost of the appraisal proceeding may be determined by the Delaware Court of Chancery and taxed upon the parties as the Delaware Court of Chancery deems equitable in the circumstances. Upon application of a dissenting stockholder, the Delaware Court of Chancery may order that all or a portion of the expenses incurred by any dissenting stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorneys’ fees and the fees and expenses of experts, be charged pro rata against the value of all Shares entitled to appraisal. In the absence of such a determination or assessment, each party bears its own expenses.

      Any Remaining Stockholder who has duly demanded appraisal in compliance with Section 262 of the DGCL will not, after the Effective Time, be entitled to vote for any purpose the Shares subject to such demand or to receive payment of dividends or other distributions on such Shares, except for dividends or other distributions payable to stockholders of record at a date prior to the Effective Time.

      At any time within 60 days after the Effective Time, any former holder of Shares shall have the right to withdraw his or her demand for appraisal and to accept the Merger Consideration. After this period, such holder may withdraw his or her demand for appraisal only with the consent of Hertz as the Surviving Corporation. If no petition for appraisal is filed with the Delaware Court of Chancery within 120 days after the Effective Time, stockholders’ rights to appraisal shall cease and all stockholders shall be entitled to receive the Merger Consideration. Inasmuch as Hertz has no obligation to file such a petition, and Ford has no present intention to cause or permit the Surviving Corporation to do so, any stockholder who desires such a petition to be filed is advised to file it on a timely basis. No petition timely filed in the Delaware Court of Chancery demanding appraisal shall be dismissed as to any stockholder without the approval of the Delaware Court of Chancery, and such approval may be conditioned upon such terms as the Delaware Court of Chancery deems just.

      Failure to take any required step in connection with the exercise of appraisal rights may result in the termination or waiver of such rights.

      APPRAISAL RIGHTS CANNOT BE EXERCISED AT THIS TIME. THE INFORMATION SET FORTH ABOVE IS FOR INFORMATIONAL PURPOSES ONLY WITH RESPECT TO ALTERNATIVES AVAILABLE TO STOCKHOLDERS IF THE MERGER IS CONSUMMATED. STOCKHOLDERS WHO WILL BE ENTITLED TO APPRAISAL RIGHTS IN CONNECTION WITH THE MERGER WILL RECEIVE ADDITIONAL INFORMATION CONCERNING APPRAISAL RIGHTS AND THE PROCEDURES TO BE FOLLOWED IN CONNECTION THEREWITH BEFORE SUCH STOCKHOLDERS HAVE TO TAKE ANY ACTION RELATING THERETO.

      STOCKHOLDERS WHO SELL SHARES IN THE OFFER WILL NOT BE ENTITLED TO EXERCISE APPRAISAL RIGHTS WITH RESPECT THERETO BUT, RATHER, WILL RECEIVE THE PRICE PAID IN THE OFFER THEREFOR.

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BENEFICIAL OWNERSHIP OF COMMON STOCK

      The following table sets forth certain information regarding beneficial ownership of Hertz Common Stock as of December 31, 2000 for (i) each person who is known by Hertz to be the beneficial owner of more than five percent of any class of ▇▇▇▇▇’▇ voting securities, (ii) each director and each named executive officer of Hertz and (iii) all directors and officers of Hertz as a group. Unless otherwise indicated, Ford and the Purchaser believe, based on reports filed with the SEC and on information supplied by Hertz, that the individuals listed each have sole voting and investment power with respect to such shares.

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      The following table sets forth certain information regarding beneficial ownership of Hertz Common Stock as of December 31, 2000 for (i) each director and each executive officer of Ford, the Purchaser and FSG II, (ii) all directors and executive officers of Ford as a group, (iii) all directors and executive officers of the Purchaser as a group and (iv) all directors and executive officers of FSG II as a group. Unless otherwise indicated, Ford and the Purchaser believe that the individuals listed each have sole voting and investment power with respect to such shares.

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TRANSACTIONS AND ARRANGEMENTS CONCERNING THE SHARES

      Other than ordinary course purchases or sales under the ESPP or the Equity Compensation Incentive Plans, to the knowledge of Hertz, Ford and the Purchaser, no transactions in the Shares have been effected during the past 60 days by (i) Hertz or its executive officers, directors, affiliates or associates or majority owned subsidiaries or any executive officer or director of any subsidiary, (ii) Ford or its executive officers, directors, affiliates or any associates or majority owned subsidiaries or any executive officer or director of any subsidiary, or (iii) the Purchaser or its executive officers, directors, affiliates or associates or majority owned subsidiaries or any executive officer or director of any subsidiary.

      Since the commencement of ▇▇▇▇▇’▇ second full fiscal year preceding the date of this Offer to Purchase, no purchases of Shares were made by Ford, the Purchaser or Hertz, except as described on Schedule III.

      Except as set forth in this Offer to Purchase, neither Hertz nor, to ▇▇▇▇▇’▇ knowledge, any of its affiliates, directors or executive officers or any person controlling Hertz is a party to any contract, arrangement, understanding or relationship with any other person relating, directly or indirectly, to, or in connection with, the Offer with respect to any securities of Hertz (including, without limitation, any contract, arrangement, understanding or relationship concerning the transfer or the voting of any such securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or the giving or withholding of proxies, consents or authorizations). Except as described in this Offer to Purchase, since the second full fiscal year preceding the date of this Offer to Purchase, no contracts or negotiations concerning a merger, consolidation, or acquisition, a tender offer for or other acquisition of any securities of Hertz, an election of directors of Hertz, or a sale or other transfer of a material amount of assets of Hertz, has been entered into or has occurred between any affiliates of Hertz, Ford or the Purchaser or between Hertz or any of its affiliates and any unaffiliated person. Except as described in this Offer to Purchase, since the third full fiscal year preceding the date of this Offer to Purchase, Hertz has not made any underwritten public offering of the Shares that was (i) registered under the Securities Act of 1933, as amended (the “Securities Act”) or (ii) exempt from registration under the Securities Act pursuant to Regulation A thereunder. On April 30, 1997, Hertz sold 20,010,000 shares of Class A Common Stock in an underwritten public offering for $24.00 per share. The offering was registered under the Securities Act of 1933, as amended, and resulted in aggregate net proceeds to Hertz of $455,027,400.

      To the best of ▇▇▇▇▇’▇ knowledge, after reasonable inquiry, all of the directors or executive officers of Hertz, other than those individuals, if any, for whom the tender of Shares could cause them liability under the provisions of Section 16(b) of the Exchange Act or to the extent their Shares are restricted Shares, intend to tender Shares held by them pursuant to the Offer.

RELATED PARTY TRANSACTIONS

      The Purchaser is an indirect wholly owned subsidiary of Ford. As of December 31, 2000, the Purchaser owned approximately 50.4% of the Class A Common Stock and 100% of the Class B Common Stock of Hertz, representing in the aggregate approximately 94.7% of the combined voting power of all classes of capital stock of Hertz and approximately 81.5% of the economic interest in Hertz. As majority stockholder, the Purchaser is in a position to cause the election of a majority of the Hertz Board and to control ▇▇▇▇▇’▇ affairs.

      Hertz, Ford and Ford Motor Credit Company also maintain a number of financial and administrative arrangements and regularly engage in transactions with each other in the ordinary course of business. These arrangements include car supply agreements, joint advertising agreements, a corporate agreement, a tax-sharing agreement, a commercial paper dealer agreement, credit facilities and integrating intercompany loans between Hertz and Ford and Hertz and affiliates of Ford.

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Car Supply Agreement

      Hertz and Ford have entered into a car supply agreement (the “Car Supply Agreement”) having a term of ten years, commencing September 1, 1997 and ending August 31, 2007. Under the Car Supply Agreement, Ford and Hertz have agreed to negotiate in good faith on an annual basis with respect to the supply of cars. Ford has agreed to supply to Hertz and Hertz has agreed to purchase from Ford, for each car model year during the term of the agreement (i.e., the 1998 model year through the 2007 model year), (a) the lesser of 150,000 cars or 55% of Hertz’s fleet requirements for its car rental business conducted in the United States; (b) 35% of Hertz’s fleet requirements for its car rental business conducted in Europe; and (c) 55% of Hertz’s fleet requirements for its car rental business conducted other than in the United States and Europe. For each model year, at least 50% of the cars supplied by Ford are required to be cars covered by repurchase programs that limit the risk to Hertz that the market value of a car at the time of its disposition will be less than its estimated residual value at such time (i.e., non-risk cars). The Car Supply Agreement also provides that, for each model year, Ford must strive to offer car fleet programs to Hertz on terms and conditions that are competitive with terms and conditions for the supply of cars then being offered by other automobile manufacturers to Hertz and other daily car rental companies. In addition, for each model year, Ford must supply cars to Hertz on terms and conditions that are no less favorable than those offered by Ford to other daily car rental companies, excluding franchised Ford vehicle dealers who rent cars. During the years ended December 31, 2000 and 1999, Hertz purchased cars and trucks from Ford at a cost of approximately $4.6 billion and $4.3 billion, respectively, and sold cars to Ford or its affiliates under various repurchase programs for approximately $3.2 billion each year.

Joint Advertising Agreement

      Hertz and Ford have entered into a joint advertising agreement (the “Joint Advertising Agreement”) having a term of ten years, commencing September 1, 1997 and ending August 31, 2007. Under the Joint Advertising Agreement, Ford has agreed to pay to Hertz one-half of ▇▇▇▇▇’▇ advertising costs, up to a limit of $39 million for the first year and, for each year thereafter, a limit equal to the prior year’s limit adjusted for inflation, subject to a ceiling. In addition, if for any year, one-half of Hertz’s advertising costs exceed such limit and Hertz has purchased from Ford a percentage of its car fleet requirements for its car rental business conducted in the United States for the corresponding model year (the “Ford Vehicle Share”) equal to 58% or more, then Ford will pay to Hertz additional amounts for such excess advertising costs. To be eligible for cost reimbursement under the Joint Advertising Agreement, the advertising must meet certain conditions, including the condition that it indicates that Hertz features Ford vehicles in a manner and with a prominence that is reasonably satisfactory to Ford.

      The Joint Advertising Agreement further provides that if the Ford Vehicle Share for any model year is less than 55%, Ford will not be obligated to pay Hertz any amount for its advertising costs for that year, except to the extent that ▇▇▇▇▇’▇ failure to achieve a 55% Ford Vehicle Share is attributable to (a) Ford’s failure to supply a sufficient quantity of cars for Hertz to achieve a 55% Ford Vehicle Share or (b) the fact that the terms and conditions of Ford’s car fleet programs offered to Hertz were not competitive with the terms and conditions for the supply of cars offered by other automobile manufacturers to Hertz and other daily car rental companies. In no event, however, ▇▇▇▇ ▇▇▇▇ be required to pay any amount for ▇▇▇▇▇’▇ advertising costs for any year if the Ford Vehicle Share for the corresponding model year is less than 40%. During the years ended December 31, 2000 and 1999, pursuant to the Joint Advertising Agreement, Ford paid Hertz advertising costs of approximately $43.2 million and $47.5 million, respectively.

Corporate Agreement

      Hertz and Ford have entered into a corporate agreement (the “Corporate Agreement”) pursuant to which Hertz granted to Ford a continuing option, assignable to any of its subsidiaries, to

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      The Corporate Agreement further provides that, upon the request of Ford, Hertz will use its best efforts to effect the registration under the applicable federal and state securities laws of any of the shares of Hertz’s Class A Common Stock, Hertz’s Class B Common Stock and nonvoting capital stock (and any other securities issued in respect of or in exchange for either) beneficially owned by Ford for sale in accordance with Ford’s intended method of disposition thereof, and will take such other actions as may be necessary to permit the sale thereof in other jurisdictions, subject to certain specified limitations. Ford will also have the right which, subject to certain limitations, it may exercise at any time and from time to time, to include the shares of Hertz’s Class A Common Stock, Hertz’s Class B Common Stock and nonvoting capital stock (and any other securities issued in respect of or in exchange for either) beneficially owned by it in certain other registrations of common equity securities of Hertz initiated by Hertz on its own behalf or on behalf of its other stockholders. Hertz will agree to pay all out-of-pocket costs and expenses in connection with each such registration that Ford requests or in which Ford participates. Subject to certain limitations specified in the Corporate Agreement, such registration rights will be assignable by Ford and its assigns. The Corporate Agreement contains indemnification and contribution provisions: (i) by Ford and its permitted assigns for the benefit of Hertz and related persons; and (ii) by Hertz for the benefit of Ford and the other persons entitled to effect registrations of Hertz’s Class A Common Stock or Class B Common Stock (and other securities) pursuant to its terms and related persons.

      The Corporate Agreement also provides that for so long as Ford maintains beneficial ownership of a majority of the aggregate number of outstanding shares of Hertz’s Class A Common Stock and Hertz’s Class B Common Stock, Hertz may not take any action or enter into any commitment or agreement which may reasonably be anticipated to result, with or without notice and with or without lapse of time, or otherwise, in a contravention (or an event of default) by Ford of: (i) any provision of applicable law or regulation, including, but not limited to, provisions pertaining to the Internal Revenue Code of 1986, as amended, or the Employee Retirement Income Security Act of 1974, as amended; (ii) any provision of Ford’s certificate of incorporation or by-laws; (iii) any credit agreement or other material instrument binding upon Ford or its assets or (iv) any judgment, order or decree of any governmental body, agency or court having jurisdiction over Ford or its assets.

Tax-Sharing Agreement

      Hertz is included in Ford’s federal consolidated income tax group, and ▇▇▇▇▇’▇ federal income tax liability will be included in the consolidated federal income tax liability of Ford and its subsidiaries. In certain circumstances, certain of ▇▇▇▇▇’▇ subsidiaries will also be included with certain Ford subsidiaries in combined, consolidated or unitary income tax groups for state and local tax purposes. Hertz and Ford entered into a tax-sharing agreement (the “Tax-Sharing Agreement”) dated March 10, 1997. Pursuant to the Tax-Sharing Agreement, Hertz and Ford will make payments between them such that, with respect to any period, the amount of taxes to be paid by Hertz, subject to certain adjustments, will be determined as though Hertz were to file separate federal, state and local income tax returns (including, except as provided below, any amounts

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      In determining the amount of tax-sharing payments under the Tax-Sharing Agreement, Ford will prepare or cause to be prepared pro forma returns with respect to federal and applicable state and local income taxes that reflect the same positions and elections used by Ford in preparing the returns for Ford’s consolidated group and other applicable groups. Ford will continue to have all the rights of a parent of a consolidated group (and similar rights provided for by applicable state and local law with respect to a parent of a combined, consolidated or unitary group), will be the sole and exclusive agent for Hertz in any and all matters relating to the income, franchise and similar liabilities of Hertz, will have sole and exclusive responsibility for the preparation and filing of consolidated federal and consolidated or combined state and local income tax returns (or amended returns), and will have the power, in its sole discretion, to contest or compromise any asserted tax adjustment or deficiency and to file, litigate or compromise any claim for refund on behalf of Hertz related to such return.

      In general, Hertz will be included in Ford’s consolidated group for federal income tax purposes for so long as Ford beneficially owns at least 80% of the total voting power and value of the outstanding common stock. Each member of a consolidated group is jointly and severally liable for the federal income tax liability of each other member of the consolidated group. Accordingly, although the Tax-Sharing Agreement allocates tax liabilities between Hertz and Ford, during the period in which Hertz is included in Ford’s consolidated group, Hertz could be liable in the event that any federal tax liability is incurred, but not discharged, by any other member of Ford’s consolidated group.

Commercial Paper Dealer Agreements

      Hertz maintains a Sales Agency Agreement with Ford Financial Services, Inc., an NASD registered broker-dealer and an indirect, wholly owned subsidiary of Ford (“FFS”), whereby FFS acts as a dealer for Hertz’s domestic commercial paper program. Hertz pays fees to FFS which range from 0.035% to 0.05% per annum of commercial paper placed depending upon the monthly average dollar value of the notes outstanding in the portfolio. During the years ended December 31, 2000 and 1999, Hertz paid FFS $733,046 and $707,992 of such fees, respectively. FFS is under no obligation to purchase any of the notes for its own account. FFS has acted as the sole commercial paper dealer for Hertz since October 1994. Hertz, through its subsidiary Hertz Australia Pty. Limited, has a similar agreement with Ford Credit Australia Limited, also an indirect, wholly owned subsidiary of Ford.

Credit Facility

      Ford has extended to Hertz a $500 million committed credit facility under which Hertz may borrow, repay and reborrow amounts from time to time at rates of interest based on London Interbank Offered Rates. Hertz pays Ford annual commitment fees of up to $450,000 on the undrawn amounts under the Credit Facility. The credit agreement currently expires on June 30, 2002, and is automatically extended annually for an additional year unless Ford gives timely notice of termination at least one year prior to the then scheduled expiration date. No amounts are currently outstanding under this facility.

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Axus License and Management Agreement

      Effective January 1, 2000, Hertz International, Ltd. (“HIL”), a wholly owned subsidiary of Hertz reached an agreement with Ford Motor Credit Company to grant Axus International, Inc., a wholly owned subsidiary of Ford Motor Credit Company, and its subsidiaries (collectively, “Axus”), a five-year non-exclusive license (subject to certain existing license rights and excluding the United States and Canada) to use the Hertz name in the conduct of Axus’ leasing businesses. As part of the transaction, HIL will also provide Axus with certain management services. HIL will receive a license fee for use of the Hertz name of 1% of Axus’ leasing revenues and a management fee of between 5% and 7% of Axus’ pre-tax earnings, depending upon Axus’ operating margins. For the year ended December 31, 2000, ▇▇▇ earned $6.9 million in related license and management fees under this agreement.

Relationships with Directors

      ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, a Managing Director of ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇ & Co. and ▇.▇. ▇▇▇▇▇▇ Securities Inc., became a Hertz director on July 15, 1997. ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇ & Co. (including its predecessors) has provided Hertz and Ford with commercial and investment banking services and is expected to provide similar services in the future. ▇.▇. ▇▇▇▇▇▇ Securities Inc., an affiliate of ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇ & Co., has provided financial advice to Ford and the Purchaser in connection with the Offer and the Merger and is acting as the Dealer Manager for the Offer.

      ▇▇▇▇▇ ▇. ▇▇▇▇▇, Chairman of the Hertz Board, entered into an agreement with Ford to provide, effective from January 1, 2000, consulting services to Ford in connection with corporate governance matters, strategic assessments, public affairs events and community and customer relations. As part of this agreement, ▇▇. ▇▇▇▇▇ has agreed not to engage in any activity that is in direct or indirect competition with Ford or its subsidiaries, and has agreed to certain confidentiality arrangements. Under the consulting agreement, during the year ended December 31, 2000, ▇▇. ▇▇▇▇▇ received a fee of $300,000 and certain fringe benefits from Ford. This agreement terminates on December 31, 2001.

Other Relationships and Transactions

      Hertz and Ford also engage in other transactions in the ordinary course of their respective businesses. These include a wholly owned subsidiary of Hertz, Hertz Equipment Rental Corporation (“HERC”), providing equipment rental services to Ford, Hertz providing insurance claim management services to Ford and Hertz providing car rental services to Ford.

      Hertz is named as an additional insured under certain of Ford’s insurance policies for which Hertz pays its allocated portion of the premiums.

INTERESTS OF CERTAIN PERSONS IN THE OFFER AND THE MERGER

      As of December 31, 2000, the Purchaser owned approximately 50.4% of the Class A Common Stock and 100% of the Class B Common Stock, representing in the aggregate 94.7% of the combined voting power of all classes of capital stock of Hertz and approximately 81.5% of the economic interest in Hertz. The Purchaser is an indirect, wholly owned subsidiary of Ford. Two members of the Hertz Board, ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, are officers of Ford and the Purchaser and ▇▇. ▇▇▇▇▇▇ is a director of the Purchaser. Another member of the Hertz Board, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, is a Managing Director of ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇ & Co., whose affiliate, ▇.▇. ▇▇▇▇▇▇ Securities Inc., is acting as Ford’s financial advisor and as the Dealer Manager in connection with the Offer. See Schedules I and II. In addition, each member of the Hertz Board owns shares of Class A Common Stock. See “Special Factors — Beneficial Ownership of Common Stock.”

      Under the Merger Agreement, the directors and officers of Hertz are entitled to certain rights of indemnification and to be insured by the Surviving Corporation or Ford with respect to certain

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      The members of the Special Committee received compensation in connection with serving on the Special Committee as follows: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, chairman — $90,000; ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, member — $60,000; ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, member— $60,000. The Hertz Board and the Special Committee believe that the foregoing payments do not affect the Special Committee’s independence or impartiality.

      The Special Committee and the Hertz Board were aware of these actual and potential conflicts of interest and considered them along with the other matters described under “Special Factors — Recommendation of the Special Committee and the Hertz Board; Fairness of the Offer and the Merger.”

      For a discussion of Ford’s current expectation with respect to ▇▇▇▇▇’▇ management compensation and the treatment of Hertz management and director stock options as a result of the proposed transactions, see “Special Factors — Plans for Hertz after the Offer and the Merger; Certain Effects of the Offer.”

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THE OFFER

1.  TERMS OF THE OFFER; EXPIRATION DATE.

      On the terms and subject to the conditions set forth in the Offer, we will accept for payment and pay for all Shares that are validly tendered prior to the Expiration Date and not withdrawn.

      “Expiration Date” means 12:00 Midnight, New York City time, on Friday, March 2, 2001, unless we extend the period of time for which the Offer is open under the terms set forth in the Merger Agreement, in which event “Expiration Date” means the latest time and date at which the Offer, as so extended, shall expire.

      The Offer is subject to the conditions set forth in “The Offer — Conditions of the Offer.” If any such condition is not satisfied, we may (a) extend the Offer and, subject to certain conditions and to your withdrawal rights as set forth in “The Offer — Withdrawal Rights,” retain all Shares until the expiration of the Offer as so extended; (b) waive such condition and, subject to any requirement to extend the period of time during which the Offer is open, purchase all Shares validly tendered prior to the Expiration Date and not withdrawn or delay acceptance for payment or payment for Shares, subject to applicable law, until satisfaction of all conditions to the Offer relating to governmental or regulatory approval; or (c) terminate the Offer as to any Shares not then paid for. For a description of our right to extend, amend, delay or terminate the Offer, see “The Offer — Extension of the Tender Period; Termination; Amendment; Subsequent Offering Period”; and “The Offer — Conditions of the Offer.”

2.  EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENT; SUBSEQUENT OFFERING PERIOD.

      The “Initial Expiration Date” of the Offer will be 12:00 Midnight, New York City time, on Friday, March 2, 2001. We have the right to extend the Offer beyond the Initial Expiration Date, without the consent of Hertz, in the following events: (i) from time to time if, at the Initial Expiration Date (or extended expiration date of the Offer, if applicable), any of the conditions to the Offer shall not have been satisfied or waived; (ii) for any period required by any rule, regulation, interpretation or position of the SEC or the staff thereof applicable to the 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 Offer are satisfied or waived but the number of Shares validly tendered and not withdrawn is insufficient to result in the Purchaser owning at least 90% of the then outstanding number of Shares; or (iv) pursuant to an amendment to the Offer providing for a “subsequent offering period” not to exceed 20 business days to the extent permitted under, and in compliance with, Rule 14d-11 under the Exchange Act.

      We expressly reserve the right to waive any of the conditions to the Offer and to make any change in the terms of our conditions to the Offer, provided that without the consent of Hertz we cannot make any change that changes the form of consideration to be paid in the Offer or the Merger, decreases the price per Share, imposes additional conditions to the Offer or amends any term or any condition to the Offer in a manner adverse to the stockholders of Hertz.

      If we increase or decrease the consideration to be paid for Shares pursuant to the Offer and the Offer is scheduled to expire at any time before the expiration of a period of ten business days from, and including, the date that notice of such increase or decrease is first published, sent or given in the manner specified below, the Offer will be extended until the expiration of such period of ten business days. If we make a material change in the terms of the Offer (other than a change in price or percentage of securities sought) or in the information concerning the Offer, or waive a material condition of the Offer, we will extend the Offer, if required by applicable law, for a period sufficient to allow you to consider the amended terms of the Offer. In a published release, the SEC has stated that in its view an offer must remain open for a minimum period of time following a material change in the terms of such offer. The release states that an offer should remain open for a minimum of five

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      Any extension, delay, termination, waiver or amendment will be followed as promptly as practicable by public announcement, in the case of an extension of the Offer, to be made no later than 9:00 A.M., New York City time, on the next business day after the previously scheduled Expiration Date, in accordance with the public announcement requirements of Rule 14e-1(d) under the Exchange Act. Subject to applicable law (including Rules 14d-4(d) and 14d-6(c) under the Exchange Act, which require that material changes in the information published, sent or given to any stockholders in connection with the Offer be promptly disseminated to stockholders in a manner reasonably designed to inform them of such changes), and without limiting the manner in which we may choose to make any public announcement, we have no obligation to publish, advertise or otherwise communicate any public announcement other than by issuing a press release to the Dow ▇▇▇▇▇ News Service.

      If we extend the time during which the Offer is open, or if we are delayed in our acceptance for payment of or payment for Shares pursuant to the Offer for any reason, then, without prejudice to our rights under the Offer, the Depositary may retain tendered Shares on our behalf and those Shares may not be withdrawn except to the extent tendering stockholders are entitled to withdrawal rights as described herein under “The Offer — Withdrawal Rights.” However, our ability to delay the payment for Shares that we have accepted for payment is limited by (i) Rule 14e-1(c) under the Exchange Act, which requires that a bidder pay the consideration offered or return the securities deposited by or on behalf of stockholders promptly after the termination or withdrawal of such bidder’s offer and (ii) the terms of the Merger Agreement, which require that, on the terms and subject to prior satisfaction (or waiver) of the conditions to the Offer, we must accept for payment and pay for Shares within the time period required under applicable law.

      Pursuant to Rule 14d-11 under the Exchange Act, after the expiration of the Offer, if all of the conditions to the Offer have been satisfied or waived, we may, subject to certain conditions, include a subsequent offering period (a “Subsequent Offering Period”) pursuant to which we may add a period of between three and 20 business days to permit additional tenders of Shares. We may include a Subsequent Offering Period so long as, among other things, (i) the initial 20 business day period of the Offer has expired, (ii) all conditions to the Offer are deemed satisfied or waived by the Purchaser on or before the Expiration Date, (iii) we accept and promptly pay for all Shares validly tendered during the Offer, (iv) we announce the results of the Offer, including the approximate number and percentage of Shares deposited in the Offer, no later than 9:00 A.M., New York City time on the next business day after the Expiration Date and immediately begin the Subsequent Offering Period and (v) we immediately accept and promptly pay for Shares as they are tendered during the Subsequent Offering Period. In addition, we may extend any initial Subsequent Offering Period by any period or periods, provided that the aggregate of the Subsequent Offering Periods (including extensions thereof) is no more than 20 business days. We have not at this time made a final decision to include or to not include a Subsequent Offering Period. Such decision will be made in our sole discretion, and there is no assurance that we will or will not include such a Subsequent Offering Period. In a public release, the SEC has expressed the view that inclusion of a Subsequent Offering Period would constitute a material change to the terms of the Offer and would require the Purchaser to disseminate new information to stockholders in a manner reasonably calculated to inform them of such change sufficiently in advance of the Expiration Date. In the event we elect to include a Subsequent Offering Period, we will notify shareholders of Hertz in a manner consistent with the requirements of the SEC.

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      No withdrawal rights apply to Shares tendered in a Subsequent Offering Period and no withdrawal rights apply during the Subsequent Offering Period with respect to Shares tendered in the Offer and accepted for payment. The same consideration and offer price will be paid to stockholders tendering Shares in the Offer or in any Subsequent Offering Period. Any extension, termination or amendment or extension of a Subsequent Offering Period will be followed as promptly as practicable by a public announcement thereof. Without limiting the manner in which we may choose to make any public announcement, we will have no obligation (except as otherwise required by applicable law) to publish, advertise or otherwise communicate any such public announcement other than by making a release to the Dow ▇▇▇▇▇ News Service. In the case of an extension of the Offer, we will make a public announcement of such extension no later than 9:00 A.M., New York City time, on the next business day after the previously scheduled Expiration Date.

      Hertz has provided us with its stockholder list and security position listings so we can disseminate the Offer to holders of Shares. We will send this Offer to Purchase and the related Letter of Transmittal to record holders of ▇▇▇▇▇▇ and to brokers, dealers, banks, trust companies and other nominees whose names appear on the stockholder list or, if applicable, who are listed as participants in a clearing agency’s security position listing for subsequent transmittal to beneficial owners of Shares.

3.  ACCEPTANCE FOR PAYMENT AND PAYMENT.

      Upon the terms and subject to the conditions of the Offer, we will accept for payment and pay for all Shares validly tendered prior to the Expiration Date and not withdrawn as soon as practicable after the later of the Expiration Date and satisfaction of all conditions to the Offer set forth in “The Offer — Conditions of the Offer” relating to governmental or regulatory approval. In addition, we reserve the right, subject to compliance with Rule 14e-1(c) under the Exchange Act, to delay the acceptance for payment or payment for Shares in order to comply in whole or in part with any applicable law. For a description of our right to terminate the Offer and not accept for payment or pay for Shares or to delay acceptance for payment or payment for Shares, see “The Offer — Terms of the Offer; Expiration Date.”

      For purposes of the Offer, we shall be deemed to have accepted for payment tendered Shares when, as and if we give oral or written notice of our acceptance to the Depositary. We will pay for Shares accepted for payment pursuant to the Offer by depositing the purchase price with the Depositary. The Depositary will act as your agent for the purpose of receiving payments from us and transmitting such payments to you. In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of certificates for such Shares (or of a confirmation of a book-entry transfer of such Shares into the Depositary’s account at the Book-Entry Transfer Facility (as defined in “The Offer — Procedure for Tendering Shares”)), a properly completed and duly executed Letter of Transmittal and any other required documents. Accordingly, payment may be made to tendering stockholders at different times if delivery of the Shares and other required documents occurs at different times. For a description of the procedure for tendering Shares pursuant to the Offer, see “The Offer — Procedure for Tendering Shares.”

      Under no circumstances will we pay interest on the consideration paid for Shares pursuant to the Offer, regardless of any delay in making such payment.

      If we increase the consideration to be paid for Shares pursuant to the Offer, we will pay such increased consideration for all Shares purchased pursuant to the Offer.

      We reserve the right to transfer or assign, in whole or from time to time in part, to one or more of our affiliates the right to purchase Shares tendered pursuant to the Offer, but any such transfer or assignment will not relieve us of our obligations under the Offer or prejudice your rights to receive payment for Shares validly tendered and accepted for payment.

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      If any tendered Shares are not purchased pursuant to the Offer for any reason, or if certificates are submitted for more Shares than are tendered, certificates for such unpurchased or untendered Shares will be returned (or, in the case of Shares tendered by book-entry transfer, such Shares will be credited to an account maintained at the Book-Entry Transfer Facility as defined below), without expense to you, as promptly as practicable following the expiration or termination of the Offer.

4.  PROCEDURE FOR TENDERING SHARES.

      To tender Shares pursuant to the Offer, either (i) the Depositary must receive at one of its addresses set forth on the back cover of this Offer to Purchase (A) a properly completed and duly executed Letter of Transmittal and any other documents required by the Letter of Transmittal and (B) certificates for the Shares to be tendered or delivery of such Shares pursuant to the procedures for book-entry transfer described below (and a confirmation of such delivery including an Agent’s Message (as defined below) if the tendering stockholder has not delivered a Letter of Transmittal), in each case by the Expiration Date, or (ii) the guaranteed delivery procedure described below must be complied with. Hertz employees who wish to tender their Shares held under the Hertz Employee Stock Purchase Plan must comply with the procedures described below under “Employee Stock Purchase Plan.”

      Book Entry Delivery. The Depositary will establish an account with respect to the Shares at The Depository Trust Company (the “Book-Entry Transfer Facility”) for purposes of the Offer within two business days after the date of this Offer to Purchase, and any financial institution that is a participant in the system of the Book-Entry Transfer Facility may make delivery of Shares by causing the Book-Entry Transfer Facility to transfer such Shares into the Depositary’s account in accordance with the procedures of the Book-Entry Transfer Facility. However, although delivery of Shares may be effected through book-entry transfer, the Letter of Transmittal properly completed and duly executed together with any required signature guarantees or an Agent’s Message and any other required documents must, in any case, be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase by the Expiration Date, or the guaranteed delivery procedure described below must be complied with. Delivery of the Letter of Transmittal and any other required documents to the Book-Entry Transfer Facility does not constitute delivery to the Depositary. “Agent’s Message” means a message, transmitted by the Book-Entry Transfer Facility to, and received by, the Depositary and forming a part of a book-entry confirmation which states that the Book-Entry Transfer Facility has received an express acknowledgment from the participant in the Book-Entry Transfer Facility tendering the Shares that are the subject of such book-entry confirmation which such participant has received, and agrees to be bound by, the terms of the Letter of Transmittal and that Hertz may enforce such agreement against such participant.

      Signature Guarantees. Except as otherwise provided below, all signatures on a Letter of Transmittal must be guaranteed by a financial institution (including most banks, savings and loan associations and brokerage houses) that is a member of a recognized Medallion Program approved by The Securities Transfer Association Inc., including the Securities Transfer Agents Medallion Program (STAMP), the Stock Exchange Medallion Program (SEMP) and the New York Stock Exchange, Inc. Medallion Signature Program (MSP) (each an “Eligible Institution”). Signatures on a Letter of Transmittal need not be guaranteed (i) if the Letter of Transmittal is signed by the registered holder of the Shares tendered therewith and such holder has not completed the box entitled “Special Payment Instructions” on the Letter of Transmittal or (ii) if such Shares are tendered for the account of an Eligible Institution. See Instructions 1 and 5 of the Letter of Transmittal.

      Guaranteed Delivery. If you wish to tender Shares pursuant to the Offer and cannot deliver such Shares and all other required documents to the Depositary by the Expiration Date, or cannot

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      The Notice of Guaranteed Delivery may be delivered by hand or transmitted by facsimile transmission or mail to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in such Notice.

      The method of delivery of Shares and all other required documents, including through the Book-Entry Transfer Facility, is at your option and risk, and the delivery will be deemed made only when actually received by the Depositary. If certificates for Shares are sent by mail, we recommend registered mail with return receipt requested, properly insured.

      Employee Stock Purchase Plan. Participants in the Hertz Employee Stock Purchase Plan (which we refer to in this Offer to Purchase as the “ESPP”) who wish to tender Shares held under the ESPP should so indicate by completing, executing and returning to EquiServe the confidential direction form included in the notice sent to such participants. Participants in the ESPP may not use the Letter of Transmittal or the guaranteed delivery procedures to tender their interests in Shares held under the ESPP on their behalf, but must use the separate direction form sent to them. Under the terms of the ESPP, participants who fail to timely instruct EquiServe to tender the Shares held under the ESPP on their behalf will be deemed to have chosen not to tender their Shares.

      Back-up Withholding. Under the federal income tax laws, the Depositary will be required to withhold 31% of the amount of any payments made to certain stockholders pursuant to the Offer. In order to avoid such backup withholding, you must provide the Depositary with your correct taxpayer identification number and certify that you are not subject to such backup withholding by completing the Substitute Form W-9 included in the Letter of Transmittal. If you are a non-resident alien or foreign entity not subject to back-up withholding, you must give the Depositary a completed Form W-8BEN Certificate of Foreign Status prior to receipt of any payment.

      Grant of Proxy. By executing a Letter of Transmittal (or delivering an Agent’s Message), you irrevocably appoint our designees as your proxies in the manner set forth in the Letter of Transmittal to the full extent of your rights with respect to the Shares tendered and accepted for payment and paid for by us (and any and all other Shares or other securities issued or issuable in respect of such Shares on or after January 16, 2001). All such proxies are irrevocable and coupled with an interest in the tendered Shares. Such appointment is effective only upon our acceptance for payment of and payment for such Shares. Upon such acceptance for payment and payment for such Shares, all prior proxies and consents granted by you with respect to such Shares and other securities will, without further action, be revoked, and no subsequent proxies may be given nor subsequent written consents executed (and, if previously given or executed, will cease to be effective). Our designees will be empowered to exercise all your voting and other rights as they, in their sole discretion, may deem proper at any annual, special or adjourned meeting of ▇▇▇▇▇’▇ stockholders, by written consent or otherwise. We reserve the right to require that, in order for Shares to be validly tendered, immediately upon our acceptance for payment of and payment for such Shares, we are able to

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      The tender of Shares pursuant to any one of the procedures described above will constitute your acceptance of the Offer, as well as your representation and warranty that (i) you own the Shares being tendered within the meaning of Rule 14e-4 promulgated under the Exchange Act, (ii) the tender of such Shares complies with Rule 14e-4 and (iii) you have the full power and authority to tender, sell, assign and transfer the Shares tendered, as specified in the Letter of Transmittal. Our acceptance for payment of Shares tendered by you pursuant to the Offer will constitute a binding agreement between us with respect to such Shares, upon the terms and subject to the conditions of the Offer.

      Validity. We will determine, in our sole discretion, all questions as to the form of documents and the validity, eligibility (including time of receipt) and acceptance for payment of any tender of Shares, and our determination shall be final and binding. We reserve the absolute right to reject any or all tenders of Shares that we determine not to be in proper form or the acceptance for payment of or payment for which may, in the opinion of our counsel, be unlawful. We also reserve the absolute right to waive any defect or irregularity in any tender of Shares. Our interpretation of the terms and conditions of the Offer will be final and binding. None of the Purchaser, the Dealer Manager, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defect or irregularity in tenders or waiver of any such defect or irregularity or incur any liability for failure to give any such notification.

5.  WITHDRAWAL RIGHTS.

      You may withdraw tenders of Shares made pursuant to the Offer at any time prior to the Expiration Date. Thereafter, such tenders are irrevocable, except that they may be withdrawn after April 2, 2001, unless such Shares are accepted for payment and paid for as provided in this Offer to Purchase. If we extend the period of time during which the Offer is open or are delayed in accepting for payment or paying for Shares pursuant to the Offer for any reason, then, without prejudice to our rights under the Offer, the Depositary may, on our behalf, retain all Shares tendered, and such Shares may not be withdrawn except as otherwise provided in this Section.

      To withdraw tendered Shares, a written or facsimile transmission notice of withdrawal with respect to the Shares must be timely received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase, and the notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn and the number of Shares to be withdrawn and the name of the registered holder of Shares, if different from that of the person who tendered such Shares. If the Shares to be withdrawn have been delivered to the Depositary, a signed notice of withdrawal with (except in the case of Shares tendered by an Eligible Institution) signatures guaranteed by an Eligible Institution must be submitted prior to the release of such Shares. In addition, such notice must specify, in the case of Shares tendered by delivery of certificates, the name of the registered holder (if different from that of the tendering stockholder) and the serial numbers shown on the particular certificates evidencing the Shares to be withdrawn or, in the case of Shares tendered by book-entry transfer, the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares. Withdrawals may not be rescinded, and Shares withdrawn will thereafter be deemed not validly tendered for purposes of the Offer. However, withdrawn Shares may be re-tendered by again following one of the procedures described in “The Offer — Procedures for Tendering Shares” at any time prior to the Expiration Date.

      If we include a Subsequent Offering Period (as described in more detail in “The Offer — Extensions of the Tender Period; Termination; Amendment; Subsequent Offering Period”) following the Offer, no withdrawal rights will apply to Shares tendered in such Subsequent Offering Period or to Shares previously tendered in the Offer and accepted for payment.

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      We will determine, in our sole discretion, all questions as to the form and validity (including time of receipt) of any notice of withdrawal, and our determination shall be final and binding. None of the Purchaser, the Dealer Manager, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defect or irregularity in any notice of withdrawal or waiver of any such defect or irregularity or incur any liability for failure to give any such notification.

6.  CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

      This summary of the material United States federal income tax consequences of the Offer and the Merger is for general information only and is based on the law as currently in effect. This summary does not discuss all of the tax consequences that may be relevant to a stockholder in light of its particular circumstances or to stockholders subject to special rules, such as financial institutions, broker-dealers, tax-exempt organizations, stockholders that hold their Shares as part of a straddle or a hedging or conversion transaction and stockholders who acquired their Shares through the exercise of an employee stock option or otherwise as compensation.

      Stockholders are urged to consult their own tax advisors as to the particular tax consequences to them of the Offer and the Merger, including the effect of United States state and local tax laws or foreign tax laws.

      A United States holder refers to:

      A Non-United States holder refers to a stockholder that is not a United States holder.

      United States Holders. The receipt by a United States holder of cash for Shares pursuant to the Offer or the Merger will be a taxable transaction under the United States Internal Revenue Code of 1986, as amended (the “Code”). A United States holder will generally recognize gain or loss in an amount equal to the difference between the cash received by the stockholder pursuant to the Offer or the Merger and the stockholder’s adjusted tax basis in the Shares tendered pursuant to the Offer or converted in the Merger. That gain or loss will be a capital gain or loss if the Shares are a capital asset in the hands of the stockholder, and will be long-term capital gain or loss if the Shares have been held for more than one year. Stockholders are urged to consult their own tax advisors as to the federal income tax treatment of a capital gain or loss (including limitations on the deductibility of a capital loss).

      A United States holder may be subject to backup withholding at a rate of 31% unless it provides its taxpayer identification number and certifies that the number is correct or properly certifies that it is awaiting a taxpayer identification number, or unless an exemption is demonstrated to apply. See “Procedures for Accepting the Offer and Tendering Shares — Other Requirements.” Backup withholding is not an additional tax. Amounts so withheld can be refunded or credited against the federal income tax liability of the stockholder, provided appropriate information is forwarded to the IRS. A tendering United States holder should complete the Substitute Form W-9 that is included in the Letter of Transmittal.

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      Non-United States Holders. A tendering Non-United States holder will generally not be subject to United States federal income tax on a gain realized on a disposition of Shares unless:

      Information reporting and backup withholding imposed at a rate of 31% may apply under specified circumstances to cash payments received by a Non-United States Holder for Shares pursuant to the Offer or the Merger unless it certifies as to its foreign status or otherwise establishes an exemption. See “The Offer — Procedures for Accepting the Offer and Tendering Shares — Other Requirements.” Backup withholding is not an additional tax. Amounts so withheld can be refunded or credited against the federal income tax liability of a Non-United States holder, provided appropriate information is forwarded to the IRS. To avoid backup withholding, a tendering Non-United States holder should complete a Form W-8BEN, which may be obtained from the Depositary.

7.  PRICE RANGE OF SHARES; DIVIDENDS.

      The Shares are listed and principally traded on the New York Stock Exchange under the symbol “HRZ.” The following table sets forth for the periods indicated the high and low sales prices per Share on the NYSE based on published financial sources.

      On September 20, 2000, the last full trading day before Hertz announced that it had received a preliminary, non-binding proposal from Ford to acquire all of the outstanding Shares, the reported closing sales price of Class A Common Stock on the NYSE Composite Tape was $24.25 per share. On January 12, 2001, the last full trading day before announcement by the Hertz Board and Ford of their agreement on the Offer and the Merger, the reported closing sales price per share of Class A Common Stock on the NYSE Composite Tape was $34.88 per share. Between January 1, 2001 and January 12, 2001, the price per Share on the NYSE Composite Tape ranged between $33.88 and $34.88. On February 1, 2001, the last full trading day before the date of this Offer to Purchase, the reported closing sales price per share of Class A Common Stock on the NYSE Composite Tape was $35.29. We advise you to obtain a recent quotation for Shares before deciding whether to tender your Shares.

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      Hertz has paid a quarterly dividend of $0.05 per share of Common Stock for each fiscal quarter during 1999 and 2000. Dividends have been paid quarterly in March, June, September and December of each year.

      The Merger Agreement restricts the payment of dividends or other distributions other than regular quarterly dividends payable on the Common Stock in an amount not to exceed $.05 per share per quarter. On January 26, 2001, the Hertz Board declared a quarterly dividend of $.05 per share on its Common Stock, payable on March 9, 2001 to stockholders of record as of February 15, 2001. Tendering your Shares in the Offer will not affect your right to receive this dividend. Following the Merger, ▇▇▇▇▇’▇ dividend policy will change as a result of it no longer being a public company and dividends will be paid when and as declared by the Board of Directors of the Surviving Corporation.

8.  CERTAIN INFORMATION CONCERNING HERTZ; CERTAIN PROJECTIONS.

      General. Hertz and its affiliates and independent licensees operate what Hertz believes is the largest car rental business in the world based upon revenues and one of the largest industrial and construction equipment rental businesses in the United States based upon revenues. The Hertz brand name is recognized worldwide as a leader in quality rental and leasing services and products. Hertz, together with its affiliates and independent licensees, currently rents and leases cars and light trucks, rents industrial and construction equipment and operates its other businesses from approximately 6,500 locations throughout the United States and in approximately 140 foreign countries and jurisdictions. Hertz is a direct subsidiary of the Purchaser and an indirect subsidiary of Ford.

      The name, business address, principal occupation or employment, five year employment history and citizenship of each director and executive officer of Hertz and certain other information are set forth on Schedule II.

      Available Information. Hertz is subject to the informational requirements of the Exchange Act and in accordance therewith files periodic reports, proxy statements and other information with the SEC relating to its business, financial condition and other matters. Hertz is required to disclose in such proxy statements certain information, as of particular dates, concerning ▇▇▇▇▇’▇ directors and officers, their remuneration, stock options granted to them, the principal holders of ▇▇▇▇▇’▇ securities and any material interest of such persons in transactions with Hertz. Such reports, proxy statements and other information may be inspected at the public reference facilities maintained by the SEC at Judiciary Plaza, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇. Copies of such material can also be obtained at prescribed rates from the Public Reference Section of the SEC at Judiciary Plaza, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, or free of charge at the Web site maintained by the SEC at ▇▇▇▇://▇▇▇.▇▇▇.▇▇▇.

      Except as otherwise stated in this Offer to Purchase, the information concerning Hertz contained herein has been taken from or is based upon reports and other documents on file with the SEC or otherwise publicly available. Although we have no knowledge that would indicate that any statements contained herein based upon such reports and documents are untrue, we take no responsibility for the accuracy or completeness of the information contained in such reports and other documents or for any failure by Hertz to disclose events that may have occurred and may affect the significance or accuracy of any such information but that are unknown to us.

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      Set forth below is selected consolidated financial information and operating data relating to Hertz. The selected consolidated income statement data for each of the years in the four-year period ended December 31, 1999, and the selected consolidated balance sheet data as of December 31, 1999, 1998, 1997 and 1996, was derived from audited consolidated financial statements of Hertz and the related notes thereto, included in Hertz’s Annual Report on Form 10-K for the years ended December 31, 1999, 1998, 1997 and 1996. The unaudited information for the nine months ended September 30, 2000 and 1999 was derived from Hertz’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2000. More comprehensive financial information is included in those filings, all of which are incorporated herein by reference. The table also presents unaudited selected consolidated financial information of Hertz for the year ended December 31, 2000. The unaudited operating results for 2000 include all adjustments that Hertz considers necessary for a fair presentation. The consolidated financial statements, from which 2000 information has been derived, are currently being completed and are subject to audit. Hertz filed a press release relating to fourth quarter and full year 2000 earnings under cover of Schedule 14D-9 filed with the SEC on January 17, 2001, which was incorporated by reference in a Current Report on Form 8-K, also filed with the SEC on January 17, 2001. The table also includes the calculation of book value per share as of December 31, 2000, 1999, 1998, 1997 and September 30, 2000 and 1999, not previously filed with the SEC. The selected operating data for each of the years in the four-year period ended December 31, 1999, was excerpted from Hertz’s Annual Reports on Form 10-K for the years ended December 31, 1999, 1998, 1997 and 1996. The selected operating data for the year ended December 31, 2000 was derived from consolidated operating data of Hertz, which has not yet been filed with the SEC. The selected operating data for the nine months ended September 30, 2000 and 1999 was excerpted from Hertz’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2000. The financial and operating information that follows is qualified in its entirety by reference to such reports and other documents which may be examined and copies of which may be obtained from the offices of the SEC in the manner set forth above.