Classmates.com 2006 Annual Report Download - page 91

value of the effective portion of the cap were recognized in accumulated other comprehensive income. Should the cap have become ineffective
as a hedge, gains and losses would have been recognized in the results of operations in that period. The Company recognized an unrealized gain
of approximately $0.1 million in accumulated other comprehensive income during the year ended December 31, 2005 related to the effective
portion of the cash flow hedge as the cap was considered perfectly effective during the year ended December 31, 2005. Amounts in accumulated
other comprehensive income were reclassified into earnings in the same periods during which the future hedged cash interest payments affected
earnings.
In January 2006, the Company paid, in full, the outstanding balance on the term loan of approximately $54.2 million. Effective upon
payment of the outstanding balance, the Credit Agreement terminated and was of no further force or effect. In connection with the repayment of
the term loan in January 2006, the Company terminated the interest rate cap. During the quarter ended March 31, 2006, the Company accelerated
and recognized approximately $1.5 million in deferred financing costs in connection with the early repayment of the term loan.
4. STOCKHOLDERS’ EQUITY
Stockholders’ Rights Plan
On November 15, 2001, the Board of Directors declared a dividend of one preferred share purchase right for each outstanding share of its
common stock. The dividend was paid on November 26, 2001 to the stockholders of record at the close of business on that date. Each right
entitles the registered holder to purchase from the Company one unit consisting of one one-thousandth of a share of its Series A junior
participating preferred stock at a price of $25 per unit. On April 29, 2003, the Board of Directors voted to amend the purchase price per unit from
$25 to $140. The rights generally will be exercisable only if a person or group acquires beneficial ownership of 15% or more of the Company’s
common stock or announces a tender or exchange offer which results in a person owning 15% or more of the Company’s common stock. The
Company generally will be entitled to redeem the rights at $0.0007 per right at any time until 10 days after a public announcement that a 15%
position in the Company’s common stock has been acquired or that a tender or exchange offer which would result in a person owning 15% or
more of the Company’s common stock has commenced. The rights expire on November 26, 2011.
Preferred Stock
The Company has 5.0 million shares of preferred stock authorized with a par value of $0.0001, of which 300,000 shares are designated as
Series A junior participating preferred stock. At December 31, 2006 and 2005, the Company had no shares issued or outstanding.
Common Stock Subject to Repurchase
At December 31, 2006 and 2005, there were 475,000 shares of common stock that were subject to repurchase related to unvested shares
under restricted stock agreements.
Common Stock Repurchases
The Company’s Board of Directors authorized a common stock repurchase program that allows the Company to repurchase shares of its
common stock through open market or privately negotiated transactions based on prevailing market conditions and other factors through
December 31, 2007. At December 31, 2006, the Company had repurchased $139.2 million of its common stock under the program, leaving
$60.8 million remaining under the program.
Shares withheld from RSUs awarded to employees upon vesting to pay applicable withholding taxes on their behalf are considered common
stock repurchases, but are not counted as purchases against the
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