Audiovox 2000 Annual Report Download - page 36

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 and have preference over both classes of common
stock in the event of liquidation or dissolution.
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, 1999 and
2000, 621,037 and 762,492 shares, respectively, were repurchased under
the Program at an average price of $7.20 and $10.80 per share, respec-
tively, for an aggregate amount of $4,471 and $6,004, respectively.
As of November 30, 1999 and 2000, 3,047,953 and 2,926,653 shares of
the Company’s Class A common stock are reserved for issuance under the
Company’s Stock Option and Restricted Stock Plans and 402,427 and
372,258 for all convertible securities and warrants outstanding at
November 30, 1999 and 2000 (Notes 14 and 17).
In February 2000, the Company sold, pursuant to an underwritten public
offering, 2,300,000 shares of its Class A common stock at a price of
$45.00 per share. The Company received $96,573 in net proceeds after
deducting underwriting commission and offering expenses. The net pro-
ceeds from the offering were used to repay a portion of amounts out-
standing under the revolving credit facility.
On April 6, 2000, the stockholders approved a proposal to amend the
Company’s Certificate of Incorporation to increase the number of author-
ized shares of Class A common stock, par value $.01, from 30,000,000 to
60,000,000.
Undistributed earnings from equity investments included in retained earn-
ings amounted to $4,219 and $4,869 at November 30, 1999 and 2000,
respectively.
(17) Stock-Based Compensation and Stock Warrants
(A)STOCK OPTIONS
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 com-
mon 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 may not be less
than 50% of the market value of the Company’s Class A common stock on
the date of grant. The options must be exercisable no later than ten years
after the date of grant. The vesting requirements are determined by the
Board of Directors at the time of grant.
Compensation expense is recorded with respect to the options based
upon the quoted market value of the shares and the exercise provisions at
the date of grant. The Company recorded $31 in compensation expense
for the year ended November 30, 1999. No compensation expense was
recorded for the years ended November 30, 1998 and 2000.
Information regarding the Company’s stock options is summarized below:
Weighted
Average
Number Exercise
of Shares Price
Outstanding at November 30, 1997 1,699,750 7.38
Granted 10,000 4.63
Exercised — —
Canceled (16,000) 8.79
Outstanding at November 30, 1998 1,693,750 7.33
Granted 1,542,500 14.98
Exercised (364,550) 7.64
Canceled (500) 13.00
Outstanding at November 30, 1999 2,871,200 11.41
Granted — —
Exercised (121,300) 6.84
Canceled — —
Outstanding at November 30, 2000 2,749,900 11.61
Options exercisable, November 30, 2000 1,632,400 9.29
At November 30, 1999 and 2000, 204,775 and 206,753 shares, respec-
tively, were available for future grants under the terms of these plans.
34
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
(16) Capital Structure
The Company’s capital structure is as follows:
Par Voting Rights Liquidation
Security Value Shares Authorized Shares Outstanding Per Share Rights
____
November 30, November 30,
1999 2000 1999 2000
Preferred Stock $50.00 50,000 50,000 50,000 50,000 — $50 per share
Series Preferred Stock 0.01 1,500,000 1,500,000 ————
Class A Common Stock 0.01 30,000,000 60,000,000 17,206,909 19,478,554 One Ratably with Class B
Class B Common Stock 0.01 10,000,000 10,000,000 2,260,954 2,260,954 Ten Ratably with Class A