Overstock.com 2014 Annual Report Download - page 34

Table of Contents


Our board of directors adopted the 2005 Equity Incentive Plan in April 2005, and it was most recently amended and restated and re-approved by the
stockholders on May 3, 2012 (as so amended and restated, the "Plan"). Under the Plan, the board of directors may issue non-qualified and incentive stock
options to our employees and directors and non-qualified stock options to our consultants, as well as restricted stock units and other types of equity awards.
Options granted under the Plan generally expire at the end of ten years and vest in accordance with a vesting schedule determined by our board of directors,
usually over four years from the grant date. At December 31, 2014, 2.7 million shares of stock remained available for future grants under the Plan.
The following is a summary of stock option activity (amounts in thousands, except per share data):
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



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


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
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



Outstanding—beginning of year
273
$ 17.30
364
$ 17.34
405
$ 17.58
Exercised
(30)
17.08
(89)
17.45
—
—
Expired/Forfeited
(19)
18.00
(2)
17.08
(41)
20.06
Outstanding—end of year
224
$ 17.27
273
$ 17.30
364
$ 17.34
Options exercisable at year-end
224
$ 17.27
273
$ 17.30
364
$ 17.34
Stock options vest over four years at 28% at the end of the first year and 2% each month thereafter. During the years ended December 31, 2014, 2013
and 2012, we recorded stock based compensation related to stock options of $0, $0 and $3,000, respectively.

During the years ended December 31, 2014, 2013 and 2012, we granted 242,000, 275,000 and 795,000 restricted stock units, respectively, under the
Plan. 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 either
recognized on a straight line basis over the vesting schedule or on an accelerated schedule when vesting of restricted stock awards exceeds a straight line
basis. The weighted average grant date fair value of restricted stock units granted during the years ended December 31, 2014, 2013 and 2012 was $28.24,
$16.12 and $6.75, respectively.
The following is a summary of restricted stock unit activity (amounts in thousands, except per share data):
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













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



Outstanding—beginning of year
704
$ 10.79
1,003
$ 8.81
522
$ 13.40
Granted at fair value
242
28.24
275
16.12
795
6.75
Vested
(301)
11.87
(339)
10.23
(240)
12.11
Forfeited
(67)
17.70
(235)
9.38
(74)
8.25
Outstanding—end of year
578
$ 16.70
704
$ 10.79
1,003
$ 8.81
Restricted stock units granted in 2014 vest over three years at 33.3% per year. Restricted stock units granted in 2013 vest over three years at 40% at
the end of the first year, 30% at the end of the second year and 30% at the end of the third year. Restricted stock units granted in or prior to 2012 vest over
three years at 25% at the end of the first year, 25% at the end of the second year and 50% at the end of the third year. Each restricted stock unit represents the
right to one share of common stock upon vesting. During the years ended December 31, 2014, 2013 and 2012, we recorded stock based compensation related
to restricted stock units of $4.0 million, $3.3 million and $3.5 million, respectively.
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