Overstock.com 2007 Annual Report Download - page 43

approximately $47.5 million, which was recorded in shareholders' equity in the consolidated balance sheet.
At our option, the purchased call options were settled in cash or stock, based on the market price of our common stock on the date of the settlement.
Upon settlement, we either had our capital investment returned with a premium or received shares of our common stock, depending, respectively, on whether
the market price of our common stock was above or below a pre-determined price agreed in connection with each such transaction.
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 we received in July 2005.
In January 2008, the Board of Directors an additional repurchase program under which we are authorized to repurchase up to $20.0 million of our
common stock and/or Convertible Senior Notes due 2011 through December 31, 2009. Under this repurchase program, we repurchased approximately
1.1 million shares of our common stock in open market transactions for $12.0 million through March 14, 2008. None of the purchases were made during the
fourth quarter of 2007.
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. We match 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. Our matching contribution totaled $261,000, $389,000
and $494,000 during 2005, 2006 and 2007, respectively. Beginning in 2006, our matching contribution was paid using common stock issued from treasury. In
addition, for the 2005, 2006 and 2007 years, the board of directors approved a discretionary contribution of 2% of salary to all employees eligible to
participate in the plan totaling $342,000, $409,000 and $408,000, respectively. The contributions in 2006 and 2007 were settled with shares of our common
stock in the following year.
Our 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 our employees and directors and non-qualified stock options to our consultants, 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 our
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, 2007, 608,000 shares were available for future grants
under these Plans.
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