Overstock.com 2012 Annual Report Download - page 117

Table of Contents
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During our normal course of business, we have made certain indemnities, commitments, and guarantees under which we may be required to make
payments in relation to certain transactions. These indemnities include, but are not limited to, indemnities to various lessors in connection with facility
leases for certain claims arising from such facility or lease, and indemnities to our directors and officers to the maximum extent permitted under the laws
of the State of Delaware. The duration of these indemnities, commitments, and guarantees varies, and in certain cases, is indefinite. In addition, the
majority of these indemnities, commitments, and guarantees do not provide for any limitation of the maximum potential future payments we could be
obligated to make. As such, we are unable to estimate with any reasonableness our potential exposure under these items. We have not recorded any
liability for these indemnities, commitments, and guarantees in the accompanying consolidated balance sheets. We do, however, accrue for losses for
any known contingent liability, including those that may arise from indemnification provisions, when future payment is both probable and reasonably
estimable.
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Each share of common stock has the right to one vote. The holders of common stock are also entitled to receive dividends whenever funds are
legally available and when declared by the board of directors, subject to prior rights of holders of all classes of stock outstanding having priority rights
as to dividends. No dividends have been declared or paid on our common stock through December 31, 2012.
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We retired all of the remaining $34.6 million of the Senior Notes during the year ended December 31, 2011, for $34.6 million in cash, resulting in
a loss of $54,000 on early extinguishment of debt, net of $77,000 of associated unamortized discount. Of the $34.6 million in Senior Notes retired
during the year ended December 31, 2011, $10.1 million were held by Chou Associates Management, Inc. or an affiliate of Chou ("Chou") and
$21.7 million were held by Fairfax Financial Holdings Limited or an affiliate of Fairfax ("Fairfax"). Chou and Fairfax are beneficial owners of more
than 5% of our common stock. 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.
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Our board of directors adopted the 2005 Equity Incentive Plan 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 incentive stock options to employees and
directors of the Company and non-qualified stock options to consultants, as well as restricted stock units and other types of equity awards of the
Company. Options granted under this Plan generally expire at the end of ten years and vest on a straight line basis in accordance with a vesting schedule
determined by our board of directors, usually over four years from the grant date. We did not grant any options during the years ended December 31,
2012, 2011 and 2010. At December 31, 2012, 2.8 million shares of stock remained available for future grants under the Plan. We settle stock option
exercises with newly issued common shares.
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