Overstock.com 2006 Annual Report Download - page 105

Download and view the complete annual report

Please find page 105 of the 2006 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 122

  • 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
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122

No amount has been classified outside of shareholders' equity as of December 31, 2006 as these rescission rights, if any, fully
expired prior to the end of 2006, leaving no outstanding redeemable common stock as of December 31, 2006.
16. STOCKHOLDERS' EQUITY
Reincorporation
In May 2002, the Company reincorporated in Delaware. As a result of the reincorporation, the Company is authorized to issue
100.0 million shares of $0.0001 par value common stock and 5.0 million shares of $0.0001 par value preferred stock. The Board of
Directors may issue the undesignated preferred stock in one or more series and determine preferences, privileges and restrictions
thereof.
Common Stock
Each share of common stock has the right to one vote. The holders of common stock are also entitled to receive dividends
whenever funds are legally available and when declared by the Board of Directors, subject to prior rights of holders of all classes of
stock outstanding having priority rights as to dividends. No dividends have been declared or paid on the Company's common stock
through December 31, 2006.
Warrants
In 2000, the Company issued warrants to certain shareholders in connection with the purchase of additional shares of common
stock. At December 31, 2005 and 2006, there were no warrants outstanding to purchase common stock of the Company. During 2004,
2005 and 2006, the number of warrants exercised was 182,000, 870,000 and 0, respectively.
17. SHARE REPURCHASE PROGRAM
During January 2005, the Company's Board of Directors authorized a share repurchase program under which the Company was
authorized to repurchase up to $50.0 million of its common stock through December 31, 2007. On April 26, 2005, the Board of
Directors increased the amount of the share repurchase program to $100.0 million. Additionally, on June 14, 2005, the Board of
Directors authorized an amendment of its three-year share repurchase program to include the repurchase of its Convertible Senior
Notes.
During 2005, the Company entered into several purchased call options, pursuant to which the Company could have been required
to purchase up to 1.3 million shares of its common stock at certain settlement dates during the quarter ended June 30, 2005. In
connection with these repurchase transactions; the Company paid approximately $47.5 million, which was recorded in shareholders'
equity in the consolidated balance sheet.
At the Company's option, the purchased call options were settled in cash or stock, based on the market price of its common stock
on the date of the settlement. Upon settlement, the Company either had its capital investment returned with a premium or received
shares of its common stock, depending, respectively, on whether the market price of its common stock was above or below a pre-
determined price agreed in connection with each such transaction.
Under the repurchase program, the Company repurchased approximately 665,000 shares of its common stock in open market
transactions for $24.1 million during the year ended December 31, 2005. In addition, approximately 1.0 million shares of common
stock were acquired as a result of the settlement of $41.1 million of structured stock repurchase transactions during the twelve months
ended December 31, 2005. The purchased call options that did not settle in stock settled in cash totaling $7.9 million, which the
Company received in July 2005.
F-27