Avis 2009 Annual Report Download - page 104

Table of Contents
Restricted Stock Units
RSUs currently granted by the Company entitle the employee to receive one share of Avis Budget common stock upon vesting, which
occurs ratably over a four-year period for the majority of RSUs outstanding as of December 31, 2009. The Company also employs
performance and time vesting criteria for RSU grants made to certain of the Company’s executives. The performance criteria will determine
the number of RSUs that will ultimately vest and are based on growth in earnings before taxes and certain other metrics over varying periods
of three to four years. The number of performance-based RSUs that will ultimately vest may range from 0% to 100% of the target award.
The annual activity related to the Company’s time- and performance-based RSUs consisted of (in thousands of shares):
Stock Appreciation Rights
In 2006, the Company issued stock-settled SARs to certain executives. SARs are settled in Company stock, have a seven-
year term, and vest
ratably over a four-year period or after three years with no graded vesting prior thereto. The Company’s policy is to grant SARs with
exercise prices at then-current fair market value. At December 31, 2009, the Company had approximately 0.5 million SARs outstanding
with a weighted average exercise price of $24.40, a weighted average contractual life of 3.6 years and an insignificant amount of
unrecognized compensation expense.
Employee Stock Purchase Plan
The Company is authorized to sell shares of its Avis Budget common stock to eligible employees under its non-compensatory employee
stock purchase plan (“ESPP”). Under the terms of the ESPP, employees may authorize the company to withhold up to 10% of their
compensation from each paycheck for the purchase of Avis Budget common stock. For amounts withheld in 2009, under the provisions of
the 1998 Employee Stock Purchase Plan, the purchase price of the stock was calculated as 95% of the fair market value of Avis Budget
common stock as of last business day each month. During 2009, the Company sold approximately 16,000 shares under this plan. As of
December 31, 2009, the 1998 Employee Stock Purchase Plan was suspended.
F
-
42
2009
2008
2007
Number
of
RSUs
Weighted
Average
Grant
Price
Number
of
RSUs
Weighted
Average
Grant
Price
Number
of
RSUs
Weighted
Average
Grant
Price
Balance at beginning of year
2,673
$
20.18
2,330
$
25.03
1,774
$
24.33
Granted at fair market value
-
-
1,156
12.84
1,143
25.83
Vested
(620
)
21.93
(577
)
24.68
(382
)
24.31
Canceled
(198
)
22.84
(236
)
21.05
(205
)
24.79
Balance at end of year
1,855
19.32
2,673
20.18
2,330
25.03
Reflects the maximum number of RSUs assuming achievement of all performance and time vesting criteria. During 2009, 2008 and
2007, the Company granted 0, 633,000 and 745,000 time
-
based RSUs, respectively.
During 2009, 2008 and 2007, 7,000, 46,000 and 0 performance
-
based RSUs vested, respectively.
As of December 31, 2009, the Company’s outstanding RSUs had aggregate intrinsic value of $24 million. Aggregate unrecognized
compensation expense related to RSUs amounted to $24 million as of December 31, 2009. The Company had approximately
1,016,000, 1,696,000, and 1,759,000 time-based awards outstanding at December 31, 2009, 2008 and 2007, respectively.
Performance-based awards outstanding at December 31, 2009, 2008 and 2007 were approximately 839,000, 977,000 and 571,000,
respectively.
(a)
(b)
(c)
(a)
(b)
(c)