Avid 2008 Annual Report Download - page 84

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The Company uses the Black-Scholes option pricing model to calculate the fair value of shares issued under the ESPP.
The Black-Scholes model relies on a number of key assumptions to calculate estimated fair values. The following
table sets forth the weighted-average key assumptions and fair value results for shares issued under the ESPP starting
May 1, 2008:
Eight Months Ended
December 31, 2008
Expected dividend yield 0.00%
Risk-free interest rate 2.21%
Expected volatility 45.1%
Expected life (in years) 0.25
Weighted-average fair value of shares issued $3.11
At the 2008 Annual Stockholder Meeting held on May 21, 2008, the Company’s stockholders authorized an additional
800,000 shares for issuance under the ESPP. As of December 31, 2008, 974,423 shares remained available for
issuance under the ESPP.
M. EMPLOYEE BENEFIT PLANS
Employee Benefit Plans
The Company has a defined contribution employee benefit plan under section 401(k) of the Internal Revenue Code
covering substantially all U.S. employees. The 401(k) plan allows employees to make contributions up to a specified
percentage of their compensation. The Company may, upon resolution by the Company's board of directors, make
discretionary contributions to the plan. The Company’s contribution to the plan is 50% of up to the first 6% of an
employee’s salary contributed to the plan by the employee. The Company’s contributions to the plan totaled $3.5
million, $3.5 million and $3.4 million in 2008, 2007 and 2006, respectively.
In addition, the Company has various retirement and post-employment plans covering certain international
employees. Certain of the plans allow the Company to match employee contributions up to a specified percentage as
defined by the plans. The Company made contributions to these plans of $2.1 million, $2.1 million and $1.9 million
in 2008, 2007 and 2006, respectively.
Nonqualified Deferred Compensation Plan
The Company's board of directors has approved a nonqualified deferred compensation plan (the “Deferred Plan”).
The Deferred Plan covers senior management and members of the Company's board of directors as approved by the
Company's Compensation Committee. The plan provides for a trust to which participants can contribute varying
percentages or amounts of eligible compensation for deferred payment. Payouts are generally made upon termination
of employment with the Company. The benefits payable under the Deferred Plan represents an unfunded and
unsecured contractual obligation of the Company to pay the value of the deferred compensation in the future, adjusted
to reflect the trust's investment performance. The assets of the trust, as well as the corresponding obligations, were
approximately $0.7 million and $1.5 million as of December 31, 2008 and 2007, respectively, and were recorded in
other current assets and accrued compensation and benefits at those dates.
N. RESTRUCTURING COSTS AND ACCRUALS
In October 2008, the Company initiated a company-wide restructuring plan that included a reduction in force of
approximately 500 positions, including employees related to product line divestitures, and the closure of three small
facilities. The restructuring plan is intended to improve operational efficiencies. In connection with this plan, during
the fourth quarter the Company recorded restructuring charges of $20.4 million related to employee termination costs
and $0.6 million for the facilities closures. In addition, as a result of the decision to sell the PCTV product line, the
Company recorded a non-cash restructuring charge of $1.9 million in cost of revenues related to the write-down of
inventory. Of the total restructuring charge of $22.8 million, $9.4 million related to the Consumer Video segment,