Audiovox 2006 Annual Report Download - page 76

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Audiovox Corporation and Subsidiaries
Notes to Consolidated Financial Statements, continued
February 28, 2007
(Dollars in thousands, except share and per-share data)
10) Capital Structure
The Company’s capital structure is as follows:
Security Par
Value
Shares Authorized
February 28, Shares Outstanding
February 28, Voting
Rights per
Share Liquidation
Rights2007 2006 2007 2006
Preferred Stock ........ $50.00 — 50,000 — 50,000 — $50 per share
Series Preferred Stock . . . $ 0.01 1,500,000 1,500,000 — — — —
Class A Common Stock . . $ 0.01 60,000,000 60,000,000 20,312,299 20,131,794 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
During the year ended February 28, 2007, the Company repurchased all 50,000 outstanding shares
of preferred stock from the original shareholder for $5 and retired the shares upon repurchase.
The $2,495 difference between the repurchase price and book value of the shares is included in
paid in capital in the accompanying consolidated balance sheet at February 28, 2007.
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 of Directors 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.
As of February 28, 2007, 1,869,953 shares of the Company’s Class A common stock are
authorized to be repurchased in the open market. As of February 28, 2007 and 2006, 1,693,047
and 1,388,552 shares were repurchased for an aggregate amount of $16,979 and $12,832,
respectively.
Undistributed earnings from equity investments included in retained earnings amounted to $6,027
and $6,508 at February 28, 2007 and 2006, respectively.
11) Other Stock and Retirement Plans
a) Restricted Stock Plan
The Company has restricted stock plans under which key employees and directors may be
awarded restricted stock. Awards under the restricted stock plan may be
performance-accelerated shares or performance-restricted shares. No performance
accelerated shares or performance-restricted shares were granted or outstanding in the year
ended February 28, 2007, the three months ended February 28, 2006 and the years ended
November 30, 2005 and 2004.
As of February 28, 2007, 1,402,500 shares of the Company’s Class A common stock are
reserved for issuance under the Company’s Restricted and Stock Option Plan. There was no
restricted stock outstanding at February 28, 2007.
b) Employee Stock Purchase Plan
In April 2000, the stockholders approved the 2000 Employee Stock Purchase Plan of up to
1,000,000 shares. The stock purchase plan provides eligible employees an opportunity to
purchase shares of the Company’s Class A common stock through payroll deductions at a
minimum of 2%and a maximum of 15%of base salary compensation. Amounts withheld are
used to purchase Class A common stock on the open market. The cost to the employee for
the shares is equal to 85%of the fair market value of the shares on or about the quarterly
purchase date (December 31, March 31, June 30 or September 30). The Company bears the
cost of the remaining 15%of the fair market value of the shares as well as any broker fees.
F-36