Thrifty Car Rental 2006 Annual Report Download - page 67

and liabilities, included in accrued liabilities, of approximately $2,731,000. At December 31, 2005,
the fair market value of these swaps totaled approximately $20,903,000, which were assets,
included in receivables. The Company recorded the related change in fair value of the interest rate
swap agreements of $9,363,000, ($29,725,000) and ($24,265,000) in 2006, 2005, and 2004,
respectively, as an (increase) decrease in fair value of derivatives in the consolidated statement of
income, as these swaps do not qualify for hedge accounting treatment under SFAS No. 133.
12. STOCKHOLDERS’ RIGHTS PLAN
On July 23, 1998, the Company adopted a stockholders’ rights plan. The rights were issued on
August 3, 1998, to stockholders of record on that date, and will expire on August 3, 2008, unless
earlier redeemed, exchanged or amended by the Board of Directors.
The plan provides for the issuance of one right for each outstanding share of the Company’s
common stock. Upon the acquisition by a person or group of 15% or more of the Company’s
outstanding common stock, the rights generally will become exercisable and allow the stockholder,
other than the acquiring person or group, to ultimately acquire common stock and the related voting
rights at a steeply discounted price.
The plan also includes an exchange option after the rights become exercisable. The Board of
Directors may effect an exchange of part or all of the rights, other than rights that have become void,
for shares of the Company’s common stock for each right. The Board of Directors may redeem all
rights for $.01 per right, generally at any time prior to the rights becoming exercisable.
The issuance of the rights had no dilutive effect on the number of common shares outstanding and
did not affect EPS.
13. EMPLOYEE BENEFIT PLANS INCLUDING SHARE-BASED PAYMENT PLANS
Employee Benefit Plans
The Company sponsors a retirement savings plan that incorporates the salary reduction provisions
of Section 401(k) of the Internal Revenue Code and covers substantially all employees of the
Company meeting specific age and length of service requirements. The Company fully matches the
employee’s contribution up to 6% of the employee’s eligible compensation, subject to statutory
limitations. Prior to 2006, 50% of the Company’s match was in cash and 50% was in company
stock. Effective in 2006, 100% of the match is made in cash. The Company stock match was
immediately available for transfer or sale at the employee’s discretion. Effective February 1, 2006,
the Company no longer offers its Company stock as an investment option in the retirement savings
plan for future contributions or transfers. Contributions expensed by the Company totaled
$6,071,000, $5,718,000 and $4,611,000 in 2006, 2005 and 2004, respectively.
Included in accrued liabilities at December 31, 2006 and 2005 is $2,368,000 and $4,372,000,
respectively, for employee health claims which are self-insured by the Company. The accrual
includes amounts for incurred and incurred but not reported claims. The Company expensed
$20,995,000, $24,943,000, and $20,502,000 for self-insured health claims incurred in 2006, 2005
and 2004, respectively.
The Company has bonus and profit sharing plans for all employees based on Company
performance. Expense related to these plans was $13,584,000, $14,163,000 and $11,599,000 in
2006, 2005 and 2004, respectively.
61