Avis 2011 Annual Report Download - page 89

F-35
The table below summarizes information regarding the Company’s outstanding stock options as of December 31, 2011
(in thousands of shares):
Outstanding Options
Weighted
Average Weighted
Number Remaining Average
Range of of Contractual Exercise
Exercise Prices Options Life Price
Less than $5.00 2,376 7.04 $ 0.79
$5.01 to $10.00 - - -
$10.01 to $15.00 160 8.07 11.53
$15.01 to $20.00 127 1.14 18.66
$20.01 to $25.00 - - -
$25.01 to $30.00 759 0.11 27.26
$30.01 and above 10 2.73 31.98
3,432 5.32 7.90
Restricted Stock and Stock Unit Awards
RSUs granted by the Company entitle the employee to receive one share of Avis Budget common stock upon vesting,
which occurs ratably over a three- or four-year period for the majority of RSUs outstanding as of December 31, 2011.
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.
During 2011, the Company granted 357,000 market-vesting restricted stock units and 652,000 time-based restricted
stock units under the Company’s amended 2007 Equity and Incentive Plan. The number of market-vesting restricted
stock units which will ultimately vest is based on the Company’s common stock achieving certain average price targets
for a specified number of trading days. Of the market-vesting restricted stock units granted during 2011, 264,000 units
vest after three years and 93,000 units vest 50% on each of the third and fourth anniversaries of the date of grant. Of the
time-based restricted stock units granted during 2011, 621,000 vest ratably on the first three anniversaries of the grant
date and 31,000 vest on the first anniversary of the date of the grant.
During 2010, the Company granted 971,000 market-vesting restricted stock units and 989,000 time-based restricted
stock units under the Company’s 2007 Equity and Incentive Plan. The number of market-vesting restricted stock units
which will ultimately vest is based on the Company’s common stock achieving certain price targets for a specified
number of trading days, with 600,000 of the market-vesting restricted stock units vesting ratably over years two through
five following the date of grant and 371,000 of the market-vesting restricted stock units cliff vesting after three years. Of
the time-based restricted stock units, 789,000 vest ratably over a three-year period and 200,000 vested on the first
anniversary of the date of the grant.
The Company determined the fair value of its market-vesting restricted stock units granted in 2011 and 2010 using a
Monte Carlo simulation model. The fair value of each of the Company’s market-vesting restricted stock units issued in
2011, which contain three- and four-year vesting periods, was estimated to be approximately $11.38 and $12.53,
respectively. The fair value of each of the Company’s market-vesting restricted stock units issued in 2010, which contain
three- and five-year vesting periods, was estimated to be approximately $8.88 and $9.57, respectively. The assumptions
used to estimate the fair values of the market-vesting restricted stock awards using the Monte Carlo simulation model in
2011 and 2010 were as follows:
2011 2010
Expected volatility of stock price 48% 54%
Risk-free interest rate 0.47% - 1.21% 1.47% - 1.74%
Valuation period 3 & 4 years 3 & 5 years
Dividend yield 0.0% 0.0%