Hertz 2010 Annual Report Download - page 137

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Performance Stock, Performance Stock Units, Restricted Stock and Restricted Stock Units
Performance stock, PSUs and performance units granted under the Omnibus Plan will vest based on the
achievement of pre-determined performance goals over performance periods determined by the
compensation committee. Each of the units granted under the Omnibus Plan represent the right to
receive one share of Hertz Holdings’ common stock on a specified future date. In the event of an
employee’s death or disability, a pro rata portion of the employee’s performance stock, performance
stock units and performance units will vest to the extent performance goals are achieved at the end of the
performance period. Restricted stock and RSUs granted under the Omnibus Plan will vest based on a
minimum period of service or the occurrence of events (such as a change in control, as defined in the
Omnibus Plan) specified by the compensation committee.
A summary of RSU and PSU activity under the Omnibus Plan as of December 31, 2010 is presented
below.
Weighted- Aggregate Intrinsic
Average Value (In thousands
Shares Fair Value of dollars)
Outstanding at January 1, 2010 .................. 6,977,239 $ 3.53 $83,169
Granted ................................... 1,573,050 10.10
Vested .................................... (2,173,179) 3.79
Forfeited or Expired .......................... (332,521) 4.73
Outstanding at December 31, 2010 ............... 6,044,589 $ 5.08 $87,586
Additional information pertaining to RSU and PSU activity is as follows:
Years ended December 31,
2010 2009 2008
Total fair value of awards that vested ($ millions) ................... $ 8.2 $ 6.2 $ —
Weighted average grant date fair value of awards .................. $10.10 $3.42 $4.98
Compensation expense for RSUs and PSUs is based on the grant date fair value, and is recognized
ratably over the vesting period. For grants in 2008, the vesting period is two years (50% in the first year
and 50% in the second year). For grants in 2009 and 2010, the vesting period is three years (25% in the
first year, 25% in the second year and 50% in the third year). In addition to the service vesting condition,
the PSUs granted in March, 2010 had an additional vesting condition which called for the number of
units that will be awarded being based on achievement of a certain level of 2010 Corporate EBITDA.
Employee Stock Purchase Plan
On February 28, 2008, upon recommendation of the compensation committee of our Board of Directors,
or ‘‘Committee,’’ our Board of Directors adopted the Hertz Global Holdings, Inc. Employee Stock
Purchase Plan, or the ‘‘ESPP,’’ and the plan was approved by our stockholders on May 15, 2008. The
ESPP is intended to be an ‘‘employee stock purchase plan’’ within the meaning of Section 423 of the
Internal Revenue Code.
The maximum number of shares that may be purchased under the ESPP is 3,000,000 shares of our
common stock, subject to adjustment in the case of any change in our shares, including by reason of a
stock dividend, stock split, share combination, recapitalization, reorganization, merger, consolidation or
change in corporate structure. An eligible employee may elect to participate in the ESPP each quarter (or
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