Overstock.com 2008 Annual Report Download - page 36

Table of Contents
program, we repurchased approximately 1.2 million shares of our common stock in open market transactions for $13.4 million during
the year ended December 31, 2008. The Company had fully utilized the authorized this $20.0 million repurchase program as of
December 31, 2008.
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 $389,000, $494,000 and $570,000 during the years
ended December 31, 2006, 2007 and 2008, respectively. Beginning in 2006 and through January of 2008, our matching contribution
was paid using common stock issued from treasury. In addition, for 2006 and 2007, the board of directors approved discretionary
contributions of 2% of salary to all employees eligible to participate in the plan totaling $409,000 and $408,000, respectively. The
contributions in 2006 and 2007 were settled with shares of our common stock in the following year. No discretionary contributions
were approved or paid for 2008.
Stock based Compensation
Stock Options
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. Subsequent
awards will be made under the 2005 Equity Incentive Plan. As of December 31, 2008, 1.2 million shares of stock based awards were
available for future grants under the 2005 Equity Incentive Plan.
The following is a summary of stock option activity (amounts in thousands, except per share data):
2006 2007 2008
Shares
Weighted
Average
Exercise
Price Shares
Weighted
Average
Exercise
Price Shares
Weighted
Average
Exercise
Price
Outstanding—beginning of year 1,299 $ 18.09 1,011 $ 18.97 1,161 $ 20.48
Granted at fair value 183 22.47 762 18.14 11 14.14
Exercised (276) 9.19 (354) 8.81 (112) 12.96
Canceled/forfeited (195)30.17 (258)23.65 (86)20.45
Outstanding—end of year 1,011 18.97 1,161 20.48 974 21.27
Options exercisable at year-end 679 $ 15.74 408 $ 22.36 609 $ 23.18
Restricted Stock Units Activity
During the year ended December 31, 2008, 491,000 restricted stock units were granted. The cost of restricted stock units is
determined using the fair value of our common stock on the date of the grant and compensation expense is recognized in accordance
with the vesting schedule. The weighted average grant date fair value of restricted stock units granted during the year ended
December 31, 2008 was $12.64.
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