Overstock.com 2006 Annual Report Download - page 41

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Under the share repurchase program, we repurchased approximately 665,000 shares of our 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.
We have a 401(k) defined contribution plan which permits participating employees to defer up to a maximum of 25% of their
compensation, subject to limitations established by the Internal Revenue Code. Employees who have completed a half-year of service
and are 21 years of age or older are qualified to participate in the plan. The Company matches 50% of the first 6% of each participant's
contributions to the plan. Participant contributions are immediately vested. Company contributions vest based on the participant's
years of service at 20% per year over five years. The Company's matching contribution totaled $124,000, $261,000 and $389,000
during 2004, 2005 and 2006, respectively. In addition, for the 2004, 2005 and 2006 years, the board of directors approved a 2% (of
salary) profit-share contribution to all employees eligible to participate in the plan.
The Company's board of directors adopted the Amended and Restated 1999 Stock Option Plan, the 2002 Stock Option Plan and
the 2005 Equity Incentive Plan (collectively, the "Plans"), in May 1999, April 2002 and April 2005, 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, as well as other types of awards under the 2005 Equity Incentive Plan. Options granted under these
Plans generally expire at the end of either five or ten 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 awards will be made under the 2005 Equity Incentive Plan. As of
December 31, 2006, 1,112,000 shares were available for future grants under these Plans.
The following is a summary of stock option activity:
2004 2005 2006
Shares
Weighted
Average
Exercise
Price Shares
Weighted
Average
Exercise
Price Shares
Weighted
Average
Exercise
Price
Outstanding—beginning of year 1,780 $ 8.39 1,512 $12.90 1,299 $18.09
Granted at fair value 474 24.14 220 44.44 183 22.47
Exercised (468) 6.75 (298) 8.56 (276) 9.19
Canceled/forfeited (274) 13.26 (135) 24.08 (195) 30.17
Outstanding—end of year 1,512 12.90 1,299 18.09 1,011 18.97
Options exercisable at year-end 608 7.51 739 11.33 679 15.74
During the last three years, except as previously reported in a Quarterly Report on Form 10-Q, Annual Report on Form 10-K or
current Report on Form 8-K, the Company did not sell any equity securities that were not registered under the Securities Act.
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