Overstock.com 2010 Annual Report Download - page 126

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Table of Contents
Overstock.com, Inc.
Notes to Consolidated Financial Statements (Continued)
16. STOCKHOLDERS' EQUITY (Continued)
65,000 shares or $744,000 of our common stock plus interest were classified outside stockholders' equity, respectively.
17. STOCK AND DEBT REPURCHASE PROGRAM
On February 17, 2009, the Board of Directors approved a debt repurchase program that authorized us to use up to $20.0 million in cash to repurchase a
portion of our Senior Notes. On September 21, 2010, the Board of Directors approved a $15.0 million increase to our existing debt repurchase program. Under
this repurchase program, we retired $25.4 million of the Senior Notes during the year ended December 31, 2010 for $24.9 million in cash, resulting in a gain
of $346,000 on early extinguishment of debt, net of $158,000 of associated unamortized discount. A portion of the Senior Notes retired during 2010, were
purchased from a related party (See Note 22 "Related Party Transactions"). We retired $7.4 million of the Senior Notes during the year ended December 31,
2009 for $4.6 million in cash, resulting in a gain of $2.8 million on early extinguishment of debt, net of $92,000 of associated unamortized discount. As of
December 31, 2010 and December 31, 2009, $34.5 million and $59.5 million of the Senior Notes, net of debt discount, remained outstanding, respectively.
During the years ended December 31, 2010 and 2009, we withheld from vesting restricted stock awards a total of 63,404 and 36,081 shares of our
common stock for $825,000 and $340,000 respectively. The shares withheld represented the minimum tax withholdings upon the vesting of those restricted
stock award grants to satisfy the minimum tax withholdings owed by the grantee of the restricted stock award grant. None of these shares were repurchased in
the open market.
On February 1, 2011 our Board of Directors approved a $10 million increase to our previously-announced debt repurchase program. With this increase
we may repurchase up to $15 million of our outstanding Senior Notes. On February 7, 2011, we retired an additional $10.1 million of our outstanding Senior
Notes from a related party (See Note 22 "Related Party Transactions") reducing the balance outstanding to a face amount of $24.5 million.
18. STOCK-BASED AWARDS
Valuation Assumptions
During the year ended December 31, 2008, total stock options granted to employees were 11,000 with estimated total grant-date fair values of $106,000.
We did not grant any options during the years ended December 31, 2010 and 2009. During the years ended December 31, 2010, 2009 and 2008, we recorded
stock-based compensation related to stock options of $1.6 million, $2.2 million and $3.3 million, respectively.
The fair value for each stock option granted during the year ended December 31, 2008 was estimated at the date of grant using the Black Scholes Merton
option-pricing model, assuming no dividends and the following assumptions.
December 31,
2008
Average risk-free interest rate 2.91%
Average expected life (in years) 6.3
Volatility 70.6%
F-37