NetFlix 2008 Annual Report Download - page 70

NETFLIX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
On March 5, 2008, the Company’s Board of Directors authorized a stock repurchase program allowing the
Company to repurchase up to $150 million of its common stock through the end of 2008. Under this program, the
Company repurchased 3,491,084 shares of common stock at an average price of approximately $29 per share for
an aggregate amount of $100 million. Shares repurchased under this program are held as treasury stock and
accordingly repurchases were accounted for under the treasury method.
On January 31, 2008, the Company’s Board of Directors authorized a stock repurchase program allowing
the Company to repurchase up to $100 million of its common stock through the end of 2008. Under this program,
the Company repurchased 3,847,062 shares of common stock at an average price of approximately $26 per share
for an aggregate amount of $100 million. Shares repurchased under this program are held as treasury stock and
accordingly repurchases were accounted for under the treasury method.
On April 17, 2007, the Company’s Board of Directors authorized a stock repurchase program allowing the
Company to repurchase up to $100.0 million of its common stock through the end of 2007. During the year
ended December 31, 2007, the Company repurchased 4,733,788 shares of common stock at an average price of
approximately $21 per share for an aggregate amount of $100 million. Shares repurchased under this program
have been retired.
There were no unsettled share repurchases as of December 31, 2008.
Preferred Stock
The Company has authorized 10,000,000 shares of undesignated preferred stock with par value of $0.001
per share. None of the preferred shares were issued and outstanding at December 31, 2008 and 2007.
Voting Rights
The holders of each share of common stock shall be entitled to one vote per share on all matters to be voted
upon by the Company’s stockholders.
Employee Stock Purchase Plan
In February 2002, the Company adopted the 2002 Employee Stock Purchase Plan (“ESPP”), which reserved
a total of 1,166,666 shares of common stock for issuance. The 2002 Employee Stock Purchase Plan also provides
for annual increases in the number of shares available for issuance on the first day of each year, beginning with
2003, equal to the lesser of:
• 2% of the outstanding shares of the common stock on the first day of the applicable year;
• 666,666 shares; and
• such other amount as the Company’s Board of Directors may determine.
Under the Company’s ESPP, employees may purchase common stock of the Company through accumulated
payroll deductions. The purchase price of the common stock acquired by the employees participating in the ESPP
is 85% of the closing price on either the first day of the offering period or the last day of the purchase period,
whichever is lower. Through May 1, 2006, offering periods were twenty-four months, and the purchase periods
were six months. Therefore, each offering period included four six-month purchase periods, and the purchase
price for each six-month period was determined by comparing the closing prices on the first day of the offering
period and the last day of the applicable purchase period. In this manner, the look-back for determining the
purchase price was up to twenty-four months. However, effective May 1, 2006, the ESPP was amended so that
offering and purchase periods take place concurrently in consecutive six month increments. Under the amended
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