Audiovox 2004 Annual Report Download - page 96

AUDIOVOX CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
November 30, 2002, 2003 and 2004
(Dollars in thousands, except share and per share data)
November 30, 2003 and 2004, 1,072,737 and 1,070,957 shares were repurchased
under the Program at an average price of $7.93 for an aggregate amount of
$8,511 and $8,497, respectively.
As of November 30, 2003 and 2004, 2,804,117 and 2,713,353 shares,
respectively, of the Company's Class A common stock are reserved for
issuance under the Company's Stock Option and Restricted Stock Plans.
During fiscal 2003, 120,000 warrants were issued to outside counsel (Note
12 of Notes to Consolidated Financial Statements). Additional warrants are
outstanding that may be converted into shares of Code (Note 5 of Notes to
Consolidated Financial Statements).
Undistributed earnings from equity investments included in retained
earnings amounted to $6,127 and $5,649 at November 30, 2003 and 2004,
respectively.
(12) Stock−Based Compensation and Retirement Plans
(a) Stock Options and Warrants
The Company applies APB No. 25 in accounting for its stock option
grants and, accordingly, no compensation cost has been recognized in
the financial statements for its stock options which have an exercise
price equal to or greater than the fair value of the stock on the date
of the grant.
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
common 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 exercised 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. No compensation expense was recorded for stock
options during the years ended November 30, 2002 and 2003.
As discussed in Note 2, 15,000 ACC employee stock options under the
1997 Stock Option Plan and 345,000 ACC employee stock options under
1999 Stock Compensation Plan were extended for one year from the
closing of the sale with UTSI (November 1, 2004). This extension
resulted in a non−cash compensation charge of $98 due to the
re−measurement of stock options in accordance with FASB Interpretation
(FIN) 44" Accounting for Certain Transactions involving Stock
Compensation".
At November 30, 2003 and 2004, 234,253 and 274,953 shares were
available for future grants under the terms of these plans,
respectively.
93