NetFlix 2003 Annual Report Download - page 80

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NETFLIX, INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(in thousands, except share, per share and per DVD data)
The Tax Reform Act of 1986 imposes restrictions on the utilization of net operating loss carryforwards and
tax credit carryforwards in the event of an “ownership change,” as defined by the Internal Revenue Code. The
Company’s ability to utilize its net operating loss carryforwards is subject to restrictions pursuant to these
provisions.
10. Employee Benefit Plan
The Company maintains a 401(k) savings plan covering substantially all of its employees. Eligible
employees may contribute up to 15 percent of their annual salary through payroll deductions, but not more than
the statutory limits set by the Internal Revenue Service. The Company matches employee contributions at the
discretion of the Board of Directors. During 2001, 2002 and 2003, the Company’s matching contributions totaled
$304, $0 and $0, respectively.
11. Restructuring Charges
During 2001, the Company recorded a restructuring charge of $671 relating to severance payments made to
45 employees terminated in an effort to streamline the Company’s operations and reduce expenses. All liabilities
related to this restructuring charge have been paid.
12. Subsequent Event
On January 16, 2004, the Company’s Board of Directors approved a two-for-one split in the form of a stock
dividend on all outstanding shares of its common stock. As a result of the stock split, the Company’s
stockholders received one additional share for each share of common stock held on the record date of February 2,
2004. The additional shares of common stock were distributed on February 11, 2004. All common share and per-
share amounts in the financial statements and related notes have been retroactively adjusted to reflect the stock
split for all periods presented. In addition, the Company has reclassified $23 and $26 from additional paid-in
capital to common stock as of December 31, 2002 and 2003, respectively.
F-22