Overstock.com 2004 Annual Report Download - page 88

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The following table summarizes information about stock options as of December 31, 2004:
Options Outstanding at
December 31, 2004
Options Exercisable at
December 31, 2004
Range of Exercise Prices Shares
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contract Life Shares
Weighted
Average
Exercise
Price
$ 2.00-$4.99 114 $ 4.05 2.4 63 $ 3.87
$ 5.00-$6.99 419 5.07 1.8 320 5.07
$ 7.00-$11.99 146 9.55 2.4 94 9.64
$ 12.00-$17.99 401 13.29 3.5 128 13.31
$ 18.00-$53.45 432 23.60 4.2 3 34.06
1,512 12.90 3.0 608 7.51
The weighted-average grant-date fair value of options granted during 2002, 2003 and 2004 was $8.21, $8.27 and $15.39 per share, respectively. The fair
value for these options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:
2002 2003 2004
Risk-free interest rate 3.31% 2.63% 2.61%
Expected life (in years) 3 3 3
Volatility 100% 104% 101%
Expected dividend yield 0% 0% 0%
Stock-based compensation
In connection with certain stock option grants to employees during the year ended December 31, 2002 the Company recognized approximately $3,481 of
unearned stock-based compensation for the excess of deemed fair value of shares of common stock subject to such options over the exercise price of these
options at the date of grant. In 2003 and 2004, the company reversed $478 and $198, respectively, of unearned stock-based compensation due to forfeitures of
unvested options. Such amounts are included as a component of stockholders' equity and are being amortized over the vesting period in accordance with
FASB Interpretation Number 28, Accounting for Stock Appreciation Rights and Other Variable Stock Option or Award Plan. The Company recorded stock-
based compensation expense of $3,276, $846 and $360 during the years ended December 31, 2002, 2003 and 2004, respectively.
During the years ended December 31, 2002, 2003 and 2004, the Company granted 177, 18 and 25 options to consultants, respectively. The Company
recorded unearned stock-based compensation of $131, $268 and $2,043 related to these grants, of which $24, $177 and $1,278 was recognized in operations
in 2002, 2003 and 2004, respectively. The fair value for these options was measured at the grant date and is remeasured at the end of each quarter until vesting
is complete. At December 31, 2002, 2003 and 2004, the fair value of these options was calculated using a Black-Scholes option pricing model using risk-free
rates of 3.31%, 2.59% and 3.45%, respectively, an expected life of 3 years, expected volatility of 100%, 105% and 96%, respectively, and a dividend yield of
0%.
F-25