Overstock.com 2004 Annual Report Download - page 87

Download and view the complete annual report

Please find page 87 of the 2004 Overstock.com annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 114

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114

Warrants
In 2000, the Company issued warrants to certain shareholders in connection with the purchase of additional shares of common stock. At December 31,
2004, warrants to purchase 887 shares of common stock of the Company were outstanding, as follows:
Issuance Date
Exercise
Price
per Share
Warrants
Outstanding
Expiration
Date
May 1, 2000 $ 7.09 163 April 30, 2005
May 15, 2000 $ 7.09 231 May 14, 2005
June 22, 2000 $ 7.09 7 June 21, 2005
September 21, 2000 $ 4.26 486 September 20, 2005
The number of warrants exercised in 2002, 2003 and 2004 were 3, 50 and 182, respectively.
As of December 31, 2004, the Company has reserved sufficient shares of common stock to meet its stock option and warrant obligations. As stated in
Note 12, 112 of these warrants are subject to rescission. At December 31, 2003 and 2004, related parties held 850 of the total warrants outstanding.
14. STOCK OPTION PLANS
The Company's board of directors adopted the Amended and Restated 1999 Stock Option Plan and the 2002 Stock Option Plan (collectively, the
"Plans"), in May 1999 and April 2002, respectively. Under these Plans, the Board of Directors may issue incentive stock options to employees and directors
of the Company and non-qualified stock options to consultants of the Company. Options granted under these Plans generally expire at the end of five years
and vest in accordance with a vesting schedule determined by the Company's Board of Directors, usually over four years from the grant date. As of the initial
public offering, the Amended and Restated 1999 Stock Option Plan was terminated. Future shares will be granted under the 2002 Stock Option Plan. As of
December 31, 2004, 1,184 shares are available for future grants under these Plans.
The following is a summary of stock option activity:
2002 2003 2004
Shares
Weighted
Average
Exercise
Price Weighted Average Fair Value Shares
Weighted
Average
Exercise
Price
Shares
Weighted
Average
Exercise
Price
Outstanding—beginning of year 1,161 $ 4.68 1,415 $ 5.37 1,780 $ 8.39
Granted at fair value 245 8.05 854 12.77 474 24.14
Granted at price below fair value 543 5.07 $ 9.61 — — — —
Exercised (146) 4.22 (197) 4.69 (468) 6.75
Canceled/forfeited (388) 5.15 (292) 9.12 (274) 13.26
Outstanding—end of year 1,415 5.37 1,780 8.39 1,512 12.90
Options exercisable at year-end 388 4.93 614 5.44 608 7.51
F-24