Overstock.com 2013 Annual Report Download - page 91

Table of Contents

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.


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, 2013.

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.


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, 2013, 2012 and 2011. At
December 31, 2013, 2.8 million shares of stock remained available for future grants under the Plan. We settle stock option exercises with newly issued
common shares.
89