Overstock.com 2010 Annual Report Download - page 44

Table of Contents
failure by us to keep $30 million in certain accounts with U.S. Bank, as well as any Event of Default under the Financing Agreement.
Recent sales of unregistered securities
In June 2009, we discovered that we had inadvertently issued 203,737 more shares of our common stock in connection with our 401(k) plan than had
been registered with the Securities and Exchange Commission for offer in connection with the 401(k) plan. These shares were contributed to or otherwise
acquired by participants in the 401(k) plan between August 16, 2006, and June 17, 2009. As a result, certain participants in the 401(k) plan may have or have
had rescission rights relating to the unregistered shares, although we believe that the federal statute of limitations applicable to any such rescission rights
would be one year, and that the statute of limitations had already expired at June 30, 2009 with respect to most of the inadvertent issuances.
On August 31, 2009, we entered into a Tolling and Standstill Agreement (the "Tolling Agreement") with the Overstock.com, Inc. Employee Benefits
Committee (the "Committee") relating to the 401(k) plan. We entered into the Tolling Agreement in order to preserve certain rights, if any, of plan
participants who acquired shares of Overstock common stock in the plan between July 1, 2008 and June 30, 2009. In August 2010, we made a registered
rescission offer to affected participants in the plan who acquired shares of Overstock common stock during the Purchase Period. The rescission offer applied
to shares purchased during the Purchase Period at prices ranging from $6.77 per share to $21.17 per share. On October 6, 2010, our rescission offer expired.
As a result of the offer, we repurchased 1,202 shares of common stock for $26,000. On October 14, 2010 we terminated the Tolling Agreement. We
reclassified 17,763 shares or $260,000 of common stock from temporary to permanent equity due to the expiration of potential rescission rights. The
remaining redeemable shares will be reclassified into permanent equity upon the expiration of potential rescission rights associated with those common
shares. At December 31, 2010 and 2009, approximately 46,000 shares or $570,000 and 65,000 shares or $744,000 of our common stock plus interest were
classified outside stockholders' equity, respectively.
In December 2009, we implemented a Non Qualified Deferred Compensation plan for senior management. The plan allows eligible members of senior
management to defer their receipt of compensation from us beginning in 2010, subject to the restrictions contained in the plan. To the extent that interests in
the plan constitute securities, we believe that the issuance of the interests was exempt from the registration requirements of the Securities Act of 1933, as
amended, pursuant to Section 4(2) thereof and Rule 506 of Regulation D thereunder as a transaction not involving a public offering. The interests were not
sold for cash or other consideration, and there were no proceeds to us.
Issuer purchases of equity securities
The following table sets forth all purchases made by us or on our behalf or any "affiliated purchaser" as defined in Rule 10b-18(a)(3) under the Exchange
Act, of shares of our common stock made during each month within the fourth quarter of 2010, including all purchases made pursuant to publicly announced
plans or programs and those not made pursuant to publicly announced plans or programs. Column (a) sets forth the total number of shares purchased, and the
footnotes to the table disclose the number of shares purchased other than pursuant to a publicly announced plan or program and the nature of any such
purchases. Column (b) sets forth the average price paid per share. Column (c) sets forth the total number of shares purchased as part of publicly announced
repurchase plans or
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