Hertz 2010 Annual Report Download - page 136
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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The risk-free interest rate is the implied zero-coupon yield for U.S. Treasury securities having a maturity
approximately equal to the expected term, as of the grant dates. The assumed dividend yield is zero.
Assumption 2010 Grants 2009 Grants 2008 Grants
Expected volatility ................... 36.1% 34.9% 30.8%
Expected dividend yield ............... 0.0% 0.0% 0.0%
Expected term (years) ................ 6.25 6.25 5.0 – 6.25
Risk-free interest rate ................. 1.62% – 2.96% 2.90% 2.56 – 3.75%
Weighted-average grant date fair value .... $4.00 $1.29 $4.42
A summary of option activity under the Stock Incentive Plan and the Omnibus Plan as of December 31,
2010 is presented below.
Weighted-
Weighted- Average
Average Remaining Aggregate Intrinsic
Exercise Contractual Value (In thousands
Options Shares Price Term (years) of dollars)
Outstanding at January 1, 2010 ........ 14,110,304 $ 9.38 7.0 $56,221
Granted ......................... 3,291,918 $ 9.77
Exercised ........................ (1,343,659) $ 5.84
Forfeited or Expired ................. (642,659) $11.35
Outstanding at December 31, 2010 ...... 15,415,904 $ 9.69 6.7 $84,534
Exercisable at December 31, 2010 ...... 9,068,178 $ 9.75 6.0 $52,529
A summary of non-vested options as of December 31, 2010, and changes during the year, is presented
below.
Weighted-
Weighted- Average Grant-
Non-vested Average Date Fair
Shares Exercise Price Value
Non-vested as of January 1, 2010 ................. 6,679,380 $ 9.62 $6.16
Granted .................................... 3,291,918 $ 9.77 $4.00
Vested ..................................... (3,196,500) $10.07 $6.75
Forfeited ................................... (427,072) $ 9.19 $4.98
Non-vested as of December 31, 2010 .............. 6,347,726 $ 9.61 $4.91
Additional information pertaining to option activity under the plans is as follows (in millions of dollars):
Years ended
December 31,
2010 2009 2008
Aggregate intrinsic value of stock options exercised .................. $ 8.1 $ 4.2 $ 6.8
Cash received from the exercise of stock options .................... 7.9 5.3 6.7
Fair value of options that vested ................................ 21.6 23.1 22.8
Tax benefit realized on exercise of stock options .................... 0.3 — —
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