Thrifty Car Rental 2006 Annual Report Download - page 71

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disability or death, performance share awards vest on a pro-rata basis at 100% of target, but will not
be issued until the end of the performance period or earlier, if needed to comply with the Internal
Revenue Code Section 409A. Any performance share installments not earned at the end of the
requisite service period are forfeited. In June 2006, the 2003 grant of performance shares earned
from January 1, 2003 through December 31, 2005, net of forfeitures, totaling approximately 273,000
shares vested, were settled through the issuance of approximately 238,000 shares of common stock
totaling approximately $3,900,000, and approximately 35,000 shares were used for net settlement to
offset taxes totaling approximately $500,000. On January 31, 2005 and 2004, and February 14,
2003, the entire 2002 grant of performance shares earned in 2002, net of forfeitures, totaling
approximately 28,000, 49,000 and 40,000 shares vested, respectively, were settled through the
issuance of common stock totaling approximately $638,000, $1,200,000 and $700,000, respectively.
Substantially all of these shares were directed to the deferred compensation plan by the Company
at the request and for the benefit of the employees.
The following table presents the status of the Company’s nonvested performance shares for the
periods indicated:
Weighted-Average
Shares Grant-Date
Nonvested Shares (In Thousands) Fair Value
Nonvested at January 1, 2004 322 16.24$
Granted 280 27.16
Vested - -
Forfeited (33) 23.03
Nonvested at December 31, 2004 569 21.22
Granted 248 36.13
Vested - -
Forfeited (3) 22.63
Nonvested at December 31, 2005 814 26.16
Granted 214 45.80
Vested (273) 16.31
Forfeited (53) 23.45
Nonvested at December 31, 2006 702 35.67$
At December 31, 2006, the total compensation cost related to nonvested performance share awards
not yet recognized is estimated at approximately $9,100,000, depending upon the Company’s
performance against targets specified in the performance share agreement. This estimated
compensation cost is expected to be recognized over the weighted-average period of 1.7 years.
Values of the performance shares earned will be recognized as compensation expense over the
requisite service period. The total intrinsic value of vested and issued performance shares during
2006, 2005 and 2004 was $10,514,000, $638,000 and $1,200,000, respectively.
Restricted Stock Units – Under the LTIP, the Committee may grant restricted stock units to key
employees and non-employee directors. In 2006, 2005, and 2004, non-employee directors were
granted 27,511, 24,500 and 24,500 restricted stock units, respectively, which vested on December
31, 2006, 2005 and 2004, respectively. The Company recognized compensation costs of
$1,048,000, $844,000 and $606,000 in 2006, 2005 and 2004, respectively, for restricted stock units.
The Committee generally grants restricted stock units to non-employee directors. These grants
generally vest at the end of the fiscal year in which the grants were made. For the awards granted
in 2006, 2005 and 2004, the grant-date fair value of the award was based on the closing market
price of the Company’s common shares at the date of grant.
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