Hertz 2008 Annual Report Download - page 141

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
ranging from $4.70 to $5.04 including a grant of 215,000 PSUs to Mr. Frissora. RSUs granted in 2008
generally have the terms set forth in the Omnibus Plan, however in the event of an employee’s death or
disability (as defined in the Omnibus Plan), a pro rata portion of the RSUs that would have vested on the
next anniversary of the grant date will vest and the remainder of the RSUs will be canceled.
Compensation expense for RSUs and PSUs is based on the grant date fair value, and is recognized
ratably over the two year vesting period. The PSUs have an additional vesting condition. Half of each
award of PSUs will vest on the first anniversary of the grant date if the consolidated leverage ratio
covenants within our Senior Credit Facilities have not been violated during that twelve month period.
Assuming the first half of the grant vests, the second half will vest on the second anniversary of the grant
date. If the consolidated leverage ratio covenant is violated during the first twelve months, all PSUs will
be forfeited.
For the year ended December 31, 2008, we recognized compensation cost of approximately $0.4 million
($0.2 million, net of tax) for RSUs and PSUs.
Recent Accounting Pronouncements
For a discussion of recent accounting pronouncements, see Note 1 to the Notes to our consolidated
financial statements included in this Annual Report under the caption ‘‘Item 8—Financial Statements and
Supplementary Data.’’
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
See ‘‘Item 7—Management’s Discussion and Analysis of Financial Condition and Results of
Operations—Market Risks’’ included elsewhere in this Annual Report.
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