Avid 2009 Annual Report Download - page 76

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71
The Company provides warranties on externally sourced and internally developed hardware. For internally developed
hardware and in cases where the warranty granted to customers for externally sourced hardware is greater than that
provided by the manufacturer, the Company records an accrual for the related liability based on historical trends and actual
material and labor costs. The warranty period for all of the Company’s products is generally 90 days to one year, but can
extend up to five years depending on the manufacturer’s warranty or local law.
The following table sets forth the activity in the product warranty accrual account for the years ended December 31, 2009
and 2008 (in thousands):
Accrual balance at December 31, 2007
$
5,803
Allocated to PCTV divestiture
(832
)
Accruals for product warranties
8,147
Cost of warranty claims
(7,925
)
Accrual balance at December 31, 2008
5,193
Accruals for product warranties
5,694
Cost of warranty claims
(6,433
)
Accrual balance at December 31, 2009
$
4,454
K. CAPITAL STOCK
Preferred Stock
The Company has authorized up to one million shares of preferred stock, $0.01 par value per share, for issuance. Each
series of preferred stock shall have such rights, preferences, privileges and restrictions, including voting rights, dividend
rights, conversion rights, redemption privileges and liquidation preferences, as may be determined by the Company's board
of directors.
Common Stock
A stock repurchase program was approved by the Company’s board of directors in April 2007, which authorized the
Company to repurchase up to $100 million of the Company’s common stock through transactions on the open market, in
block trades or otherwise. In February 2008, the Company’s board of directors approved a $100 million increase in the
authorized funds for the repurchase of the Company’s common stock. During 2007, the Company repurchased 809,236
shares of the Company’s common stock under the program for a total purchase price, including commissions, of $26.6
million, or $32.92 per share. During 2008, the Company repurchased an additional 4,254,397 shares of the Company’s
common stock for a total purchase price, including commissions, of $93.2 million. The average price per share paid for the
shares repurchased during the 2008, including commissions, was $21.90. At December 31, 2009, $80.3 million remained
available for future stock repurchases under the program. This stock repurchase program is being funded through working
capital and has no expiration date.
Under some of the Company's equity compensation plans, employees have the option or may be required to satisfy any
withholding tax obligations by tendering to the Company a portion of the common stock received under the award. During
the years ended December 31, 2009, 2008 and 2007, the Company received approximately 14,447 shares, 1,373 shares and
684 shares, respectively, of its common stock in exchange for $172 thousand, $25 thousand and $23 thousand,
respectively, of employee withholding liabilities paid by the Company.