Audiovox 2003 Annual Report Download - page 122

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AUDIOVOX CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
November 30, 2001, 2002 and 2003
(Dollars in thousands, except share and per share data)
The holders of Class A and Class B common stock are entitled to receive
cash or property dividends declared by the Board of Directors. The Board
can declare cash dividends for Class A common stock in amounts equal to or
greater than the cash dividends for Class B common stock. Dividends other
than cash must be declared equally for both classes. Each share of Class B
common stock may, at any time, be converted into one share of Class A
common stock.
The 50,000 shares of non−cumulative Preferred Stock outstanding are owned
by Shintom (see Notes 5 and 8) and have preference over both classes of
common stock in the event of liquidation or dissolution. These shares have
no dividend rights.
The Company's Board of Directors approved the repurchase of 1,563,000
shares of the Company's Class A common stock in the open market under a
share repurchase program (the Program). As of November 30, 2002 and 2003,
1,072,737 shares were repurchased under the Program at an average price of
$7.93 for an aggregate amount of $8,511.
As of November 30, 2002 and 2003, 2,900,317 and 2,804,117 shares,
respectively, of the Company's Class A common stock are reserved for
issuance under the Company's Stock Option and Restricted Stock Plans.
During fiscal 2003, 120,000 warrants were issued to outside counsel (Note
16). Warrants are outstanding that may be converted into shares of Code
(Note 6).
Undistributed earnings from equity investments included in retained
earnings amounted to $4,496 and $6,127 at November 30, 2002 and 2003,
respectively.
(16) Stock−Based Compensation and Retirement Plans
(a) Stock Options and Warrants
The Company applies APB No. 25 in accounting for its stock option
grants and, accordingly, no compensation cost has been recognized in
the financial statements for its stock options which have an exercise
price equal to or greater than the fair value of the stock on the date
of the grant.
The Company has stock option plans under which employees and
non−employee directors may be granted incentive stock options (ISO's)
and non−qualified stock options (NQSO's) to purchase shares of Class A
common stock. Under the plans, the exercise price of the ISO's will
not be less than the market value of the Company's Class A common
stock or greater than 110% of the market value of the Company's Class
A common stock on the date of grant. The exercise price of the NQSO's
(Continued)
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