Dollar Rent A Car 2007 Annual Report Download - page 72

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 matches the
employee’s contribution up to 6% of the employee’s eligible compensation in cash, subject to
statutory limitations. 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 $5,411,000, $6,071,000 and $5,718,000 in 2007,
2006 and 2005, respectively.
Included in accrued liabilities at December 31, 2007 and 2006 is $2,771,000 and $2,368,000,
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
$23,052,000, $20,995,000, and $24,943,000 for self-insured health claims incurred in 2007, 2006
and 2005, respectively.
The Company has bonus and profit sharing plans for all employees based on Company
performance. For the year ended December 31, 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 $13,584,000 and $14,163,000 in 2006 and 2005, respectively.
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 become fully vested in the Company contribution under both the deferred compensation
and retirement plans after five years of service. The total of participant deferrals in the deferred
compensation and retirement plans, which are reflected in accrued liabilities, was $21,447,000 and
$40,720,000 as of December 31, 2007 and 2006, respectively. Expense related to these plans for
contributions made by the Company totaled $2,067,000, $2,384,000 and $2,766,000 in 2007, 2006
and 2005, respectively.
Share-Based Payment Plans
Effective January 1, 2006, the Company adopted the provisions of SFAS No. 123(R) using the
modified prospective application transition method. SFAS No. 123(R) revises SFAS No. 123,
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