Avid 2008 Annual Report Download - page 81

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The following table sets forth the activity in the product warranty accrual account for the years ended December 31,
2008 and 2007 (in thousands):
Accrual balance at December 31, 2006 $ 6,072
Accruals for product warranties 7,782
Cost of warranty claims (8,051)
Accrual balance at December 31, 2007 5,803
Allocated to PCTV divestiture (832)
Accruals for product warranties 8,147
Cost of warranty claims (7,925)
Accrual balance at December 31, 2008 $ 5,193
K. CAPITAL STOCK
Preferred Stock
The Company has authorized up to one million shares of preferred stock, $0.01 par value per share, for issuance.
Each series of preferred stock shall have such rights, preferences, privileges and restrictions, including voting rights,
dividend rights, conversion rights, redemption privileges and liquidation preferences, as may be determined by the
Company's board of directors.
Common Stock
A stock repurchase program was approved by the Company’s board of directors in April 2007, which authorized the
Company to repurchase up to $100 million of the Company’s common stock through transactions on the open market,
in block trades or otherwise. In February 2008, the Company’s board of directors approved a $100 million increase in
the authorized funds for the repurchase of the Company’s common stock. During 2007, the Company repurchased
809,236 shares of the Company’s common stock under the program for a total purchase price, including commissions,
of $26.6 million, or $32.92 per share. During 2008, the Company repurchased an additional 4,254,397 shares of the
Company’s common stock for a total purchase price, including commissions, of $93.2 million. The average price per
share paid for the shares repurchased during the 2008, including commissions, was $21.90. As of December 31, 2008,
$80.3 million remained available for future stock repurchases under the program. This stock repurchase program is
being funded through working capital and has no expiration date.
Previously, in 2006 a stock repurchase program was approved by the Company’s board of directors in July 2006.
Under this program, the Company was authorized to repurchase up to $50 million of the Company’s common stock
through transactions on the open market, in block trades or otherwise. The program was completed in August 2006,
with 1,432,327 shares of the Company’s common stock repurchased. The average price per share paid for these shares,
including commissions, was $34.94. The stock repurchase program was funded using the Company’s working capital.
Under some of the Company's equity compensation plans, employees have the option to satisfy any withholding tax
obligations by tendering to the Company a portion of the common stock received under the award. In addition, under
some of the Company's equity award agreements, employees are required to satisfy any withholding tax obligation by
tendering to the Company a portion of the common stock received under the award. During the years ended
December 31, 2008, 2007 and 2006, the Company received approximately 1,373 shares, 684 shares and 4,039 shares,
respectively, of its common stock in exchange for $25 thousand, $23 thousand and $0.2 million, respectively, of
employee withholding liabilities paid by the Company.
In December 2008, the Company repurchased 2,154 unvested shares of restricted stock for $0.01 per share from an
employee who left the Company. In March 2008, the Company repurchased 690 shares of restricted stock for $24.75
per share, and in December 2008, the Company repurchased 683 shares of restricted stock for $10.91 per share to pay
required withholding taxes upon the vesting of restricted stock. The purchase price of a share of stock used for tax
withholding is determined based on the market price of the stock on the date of vesting of the restricted stock.