Audiovox 2005 Annual Report Download - page 92

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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. No shares were available for future
grants under the terms of these plans.
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 stock options which
have an exercise price equal to or greater than the fair value
of the stock on the date of the grant. No compensation expense
was recorded for stock options during the years ended November
30, 2003 or 2005.
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".
(b) Stock Warrants
During fiscal 2003, the Company issued non−transferable
warrants for the purchase of 120,000 shares to outside legal
counsel. The warrants vested immediately upon issuance, and
the exercise price of the warrants was equal to the market
price on the date of issuance. In accordance with APB No. 25
and SFAS 123, the Company recorded an expense equal to the
fair value of the warrants, as these warrants were issued to
non−employees for services performed. Accordingly, the Company
recorded $297 of expense for the aforementioned warrants which
is reflected in general and administrative expenses in the
accompanying consolidated statements of operations for the
fiscal year ended November 30, 2003.
F−38