Thrifty Car Rental 2008 Annual Report Download - page 72

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14. 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. In 2007 and 2006, the Company
matched the employee’s contribution up to 6% of the employee’s eligible compensation in cash,
subject to statutory limitations. Effective February 22, 2008, the Company suspended its employer
contribution; however, this matching contribution was reinstated at a reduced rate of up to 2% of the
employees’ eligible compensation effective January 1, 2009.
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 $1.3 million, $5.4 million and $6.1 million in 2008, 2007 and 2006, respectively.
Included in accrued liabilities at December 31, 2008 and 2007 is $3.0 million and $2.8 million,
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 $20.6
million, $23.1 million, and $21.0 million for self-insured health claims incurred in 2008, 2007 and
2006, respectively.
The Company has bonus and profit sharing plans for all employees based on Company
performance. For the years ended December 31, 2008 and 2007, the Company fell short of the
stated performance objectives; consequently, no expense related to these plans was recorded.
Expense related to these plans was $13.6 million in 2006.
Deferred Compensation and Retirement Plans
The Company has deferred compensation and retirement plans, which are defined contribution
plans that provide key executives with the opportunity to defer compensation, including related
investment income. Under the deferred compensation plan, the Company contributes up to 7% of
participant cash compensation. The Company also contributes annually to the retirement plan.
However, on December 2, 2004, the Company discontinued the retirement plan for any new key
executives. Any such new key executives will instead receive a contribution to the deferred
compensation plan of 15% of participant cash compensation.
Participants generally become fully vested in the Company contribution under both the deferred
compensation and retirement plans after five years of service. Contributions to the deferred
compensation and retirement plans are at the discretion of the Board of Directors based on the
Company’s performance. In 2008, the Company suspended the contributions to the deferred
compensation plan, in conjunction with the suspension of the matching contributions in the
Company’s 401(k) plan in 2008. Likewise, the Company did not fund the retirement plan in 2008.
The total of participant deferrals in the deferred compensation and retirement plans, which are
reflected in accrued liabilities, was $0.4 million and $21.4 million as of December 31, 2008 and
2007, respectively. Expense related to these plans for contributions made by the Company totaled
$2.1 million and $2.4 million in 2007 and 2006, respectively. No expense related to these plans was
recorded in 2008.
Effective January 1, 2009, the Company adopted a 2009 Deferred Compensation Plan wherein key
executives will receive contributions equal to 15% of such executives’ current annual base
compensation. Under this Plan, Participants are immediately vested in the Company’s
contributions.
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