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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

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6350 South 3000 East
Salt Lake City, Utah 84121

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held at 1:00 p.m. on May 4, 20113, 2012

Dear Fellow Stockholders:

        We cordially invite you to attend the 20112012 Annual Meeting of Stockholders of Overstock.com, Inc. (the "Company"). The meeting will be held at 1:00 p.m. Mountain Time on Wednesday,Thursday, May 4, 2011,3, 2012, at the Company's corporate headquarters located at 6350 South 3000 East, Salt Lake City, Utah. At the meeting, holders of our common stock will act on the following matters:

1.

The election of threetwo Class IIII directors of the Company to serve terms of three (3) years and hold office until their successors have been elected and qualified or until their earlier resignation or removal. The Company's Board of Directors intends to present Allison H. Abraham, Samuel A. MitchellPatrick M. Byrne and Stormy D. SimonBarclay F. Corbus for electionre-election to the Board;



2.

The ratification of the selection by the Audit Committee of the Company's Board of Directors (the "Audit Committee") of KPMG LLP as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2011;2012;



3.

An advisory vote on executive compensation;To approve an amendment and restatement of the Company's 2005 Equity Incentive Plan to increase the number of shares available thereunder by 2,500,000, including approval of the Plan's material terms and performance goals for purposes of IRC Section 162(m); and;



4.

An advisory vote on the frequency of holding the advisory vote on executive compensation; and



5.

Any other business properly coming before the Annual Meeting.

        Following the meeting, we will discuss the status of the business and answer your questions.

        Holders of record of shares of our common stock at the close of business on March 8, 20112012 are entitled to vote at the meeting and any postponements or adjournments of the meeting. To ensure that your vote is recorded promptly,please vote as soon as possible, even if you plan to attend the meeting in person. We encourage you to vote via the Internet or by telephone. If you received a printed set of proxy materials, you also have the option of voting by completing, signing, dating and returning the proxy card that accompanied such printed materials. Submitting your vote via the Internet or by telephone or proxy card will not affect your right to vote in person if you decide to attend the annual meeting.

        We are mailing to most of our stockholders a notice of Internet availability of proxy materials instead of a paper copy of this proxy statement and our 20102011 Form 10-K. The notice contains instructions on how to access those documents via the Internet. The notice also contains instructions on how to request a paper copy of our proxy materials, including this proxy statement, our 20102011 Form 10-K and a form of proxy card or voting instruction card, as applicable. All stockholdersStockholders who do not receive a notice of Internet availability of proxy materials will receive a paper copy of the proxy materials by mail. We anticipate that this process will minimize the costs of printing and distributing our proxy materials.

		Jonathan E. Johnson III President and Corporate Secretary

Salt Lake City, Utah
March 21, 201116, 2012

        Whether or not you plan to attend the meeting, please vote via the Internet or by phone or by completing, signing, dating and returning the accompanying Proxy Card in the enclosed self-addressed, stamped envelope.

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OVERSTOCK.COM, INC.
6350 South 3000 East
Salt Lake City, Utah 84121

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS

To Be Held at 1:00 p.m. on May 4, 20113, 2012

General

        Our Board of Directors (the "Board") is soliciting proxies for the 20112012 Annual Meeting of Stockholders of Overstock.com, Inc. ("Overstock," the "Company," "we" or "our") to be held at 1:00 p.m. Mountain Time on May 4, 20113, 2012 at our corporate headquarters located at 6350 South 3000 East, Salt Lake City, Utah 84121. This Proxy Statement contains important information for you to consider when deciding how to vote on the matters before the meeting.

        We have elected to provide access to our proxy materials to our stockholders via the Internet. Accordingly, a notice of Internet availability of proxy materials has been mailed to the majority of our stockholders, while other stockholders have instead received paper copies of the proxy materials accessible via the Internet. Stockholders that received the notice of Internet availability of proxy materials have the ability to access the proxy materials athttp://www.overstock.com/proxy or request that a printed set of the proxy materials be sent to them by following the instructions set forth on the notice of Internet availability of proxy materials.

        Please visithttp://www.overstock.com/proxy for details on how to instruct us to send future proxy materials to you electronically by e-mail or in printed form by mail. If you choose to receive future proxy materials by e-mail, you will receive an e-mail next year with instructions containing a link to those materials or a link to a special website to access our proxy materials. Your election to receive proxy materials by e-mail or printed form by mail will remain in effect until you terminate it.

        Choosing to receive future proxy materials by e-mail will allow us to provide you with the proxy materials you need in a timelier manner and will save us the cost of printing and mailing documents to you.

        Our principal offices are located at 6350 South 3000 East, Salt Lake City, Utah 84121, and our telephone number is (801) 947-3100.

Record Date and Voting Securities

        The Board set March 8, 20112012 as the record date for the meeting. Stockholders who owned common stock on that date are entitled to attend and vote at the meeting. Each share is entitled to one vote. There were 23,251,12523,420,641 shares of common stock outstanding on the record date. A majority of the outstanding shares of common stock present at the meeting in person or by proxy will constitute a quorum for the transaction of business.

Proxy Materials

        Voting materials, which include this Proxy Statement, the proxy card and our Annual Report on Form 10-K for the year ended December 31, 2010,2011, are first being sent or given to stockholders on or about March 24, 2011.21, 2012.

        The date of this Proxy Statement is March 21, 2011.16, 2012.

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QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING
AND PROCEDURAL MATTERS

What is the purpose of the Annual Meeting?

        At our Annual Meeting, stockholders will act upon the matters outlined in the meeting notice provided with this proxy statement, including: (i) the election of directors; (ii) ratification of the appointment of our Audit Committee's selection of KPMG LLP as our independent registered public accounting firm; and (iii) an advisory vote on executive compensation; and (iv) an advisory vote on the frequencyapproval of the advisory vote on executive compensation.amendment and restatement of our 2005 Equity Incentive Plan. In addition, management will report on the status of the business.

Who can vote at the Annual Meeting?

        Stockholders who owned Overstock common stock at the close of business on March 8, 20112012 may attend and vote at the Annual Meeting. Each share is entitled to one vote. There were 23,251,12523,420,641 shares of common stock outstanding on March 8, 2011.2012.

What are the recommendations of the Board?

        Overstock's Board recommends a vote:

•

"FOR" the election of the nominated directors (see proposal 1);



•

"FOR" the ratification of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 20112012 (see proposal 2);



•

"FOR" approval, on an advisory basis, of executive compensation (see proposal 3); and



•

"FOR" approval on an advisory basis, of holding the advisory vote on executive compensation once every three yearsamendment and restatement of our 2005 Equity Incentive Plan (see proposal 4)3).

What is a quorum?

        A quorum is the minimum number of our shares of common stock that must be represented at a duly called meeting in person or by proxy in order to legally conduct business at the meeting. For the annual meeting, the presence, in person or by proxy, of the holders of at least a simple majority of the shares outstanding as of the record date, will be considered a quorum allowing votes to be taken and counted for the matters before our stockholders.

        If you are a registered stockholder, you must deliver your vote via the Internet or by telephone or mail or attend the annual meeting in person and vote in order to be counted in the determination of a quorum. If you are a "street name" stockholder, your broker will vote your shares pursuant to your instructions, and such shares will count in the determination of a quorum. If you do not vote via the Internet, by telephone or proxy card, or provide any instructions to your broker, your shares will still count for purposes of attaining a quorum and your broker may vote your shares in its discretion on proposal 2. If you are a member of a retirement savings plan or other similar plan, the trustee or administrator of the plan will vote according to your directions and the rules of the plan, which may result in your shares being counted in the determination of a quorum even if you do not provide voting directions.

How do I vote?

        You may submit your vote via the Internet, by telephone or in person at the annual meeting. If you received printed proxy materials, you also have the option of submitting your proxy card by mail or attending the meeting and delivering the proxy card. The designated proxies will vote according to your instructions; however, if you are a registered stockholder and you return an executed proxy card

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without specific instructions on how to vote, the proxies will vote "FOR" the election of the nominated directors in proposal 1; "FOR" the ratification of KPMG LLP as our independent registered public

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accounting firm in proposal 2;"FOR" the and "FOR" approval on an advisory basis, of the executive compensationamendment and restatement of the 2005 Equity Incentive Plan in proposal 3; and "FOR" the approval, on an advisory basis, of holding the advisory vote on executive compensation every three years in proposal 4.3.

        If you are a "street name" stockholder and you do not return instructions on how to vote, your shares will not be voted on proposals 1 3, or 4.3. The voting of shares held by "street name" stockholders is further discussed below. Additionally, in order to vote at the meeting, you will need to obtain a signed proxy from the broker or nominee that holds your shares, because the broker or nominee is the legal, registered owner of the shares. If you have the broker's proxy, you may vote by ballot or you may complete and deliver another proxy card in person at the meeting.

        If you are a member of a retirement or savings plan or other similar plan, you may submit your vote via the Internet or by telephone. The trustee or administrator of the plan will vote according to your directions and the rules of the plan.

Can I vote via the Internet or by telephone?

        You may submit your vote via the Internet or by telephone by following the instructions contained in the notice of Internet availability of proxy materials. If you received a printed set of proxy materials, you may submit your vote via the Internet or by telephone by following the instructions contained on the proxy card that accompanied the printed materials.

        If you are a registered stockholder, the deadline for submitting your vote by telephone or via the Internet is 11:59 p.m. Eastern Time on May 3, 2011.2, 2012. If you are a member of a retirement or savings plan or other similar plan, the deadline for submitting your voting directions by telephone or via the Internet is 10:2:00 a.m. Eastern Time on May 2, 2011.April 30, 2012.

Can I change or revoke my vote?

        Subject to the deadlines set forth in the paragraph above, you may change your vote at any time before the proxy is exercised by re-submitting your vote via the Internet or by telephone.

        If you are a registered stockholder, you may revoke your vote at any time before the proxy is exercised by filing with our secretary a written notice of revocation. At the meeting, you may revoke or change your vote by submitting a proxy to the inspector of election or voting by ballot. Your attendance at the meeting will not by itself revoke your vote.

        If your shares are held in "street name" or you are a member of a retirement or savings plan or other similar plan, please contact your broker, nominee, trustee or administrator to determine whether you will be able to revoke or change your vote.

Street Name Shares and Broker Non-Votes

        If you hold your shares in "street name" through a broker or other nominee, your broker or nominee may not be permitted to exercise voting discretion with respect to some proposals. "Broker non-votes" are shares as to which a broker or nominee does not vote, or has indicated that it does not have discretionary authority to vote and has not received instructions on how to vote. If you do not give specific instructions, your broker or nominee may cast your vote in its discretion for proposal 2, the ratification of the appointment of our independent registered public accounting firm. If you do not give specific instructions on how to vote, your broker or nominee is not permitted to cast your vote in its discretion for proposal 1, election of the directors; or proposal 3, the advisory vote on executive compensation; or proposal 4, the advisory vote on the frequency of holding the advisory vote on executive compensation.to amend and restate our 2005 Equity Incentive Plan. A "broker non-vote" is a vote not cast on a matter affirmatively or negatively

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and is also not counted for the purposes of determining a plurality, so it will have no effect on the outcome of any of the proposals; however, a "broker non-vote" will still be counted for purposes of attaining a quorum as it relates to proposal 2.

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Why did I receive a notice of Internet availability of proxy materials instead of a full set of the proxy materials?

        The SEC's rules allow companies to furnish their proxy materials via the Internet. Accordingly, we sent to the majority of our stockholders a notice of Internet availability of proxy materials for this year's annual meeting of stockholders. Other stockholders were instead sent paper copies of the proxy materials accessible via the Internet. Instructions on how to access the proxy materials via the Internet or to request a paper copy can be found in the notice of Internet availability of proxy materials. In addition, stockholders may request proxy materials in printed form, by mail or electronically by e-mail on an ongoing basis by submitting a request to us athttp://www.overstock.com/proxy. A stockholder's election to receive proxy materials by mail or e-mail will remain in effect until the stockholder terminates it.

Why didn't I receive a notice of Internet availability of proxy materials?

        We are providing certain stockholders, including stockholders who have previously requested to receive paper copies of proxy materials, with paper copies of the proxy materials instead of, or in addition to, a notice of Internet availability of proxy materials. If you would like to assist us in reducing the cost of distributing our proxy materials in the future, you can consent to receiving future proxy materials and other stockholder communications electronically via e-mail or the Internet. To sign up for electronic delivery, please visithttp://www.overstock.com/proxy to submit your request.

Can I vote my shares by filling out and returning the notice of Internet availability of proxy materials?

        No. The notice of Internet availability of proxy materials does, however, provide instructions on how to vote your shares.

What happens if a nominee is unable to stand for election?

        The Nominating and Corporate Governance Committee of the Board of Directors may select a substitute nominee. In that case, if you have submitted your proxy via the Internet or by telephone or completed and returned your proxy card or voting instruction card, the proxyholders will have the discretion to vote your shares for the substitute nominee. They cannot vote for more than threetwo Class IIII nominees.

What is the voting requirement to approve each of the proposals?

        A plurality of the voting power of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the election of directors is required for the election of each nominee to the Board. Thus, the threetwo nominees for Class IIII director receiving the highest number of affirmative votes will be elected as members of our Board of Directors to serve until the 20142015 Annual Meeting. There is no cumulative voting in the election of directors. Brokers do not have discretion to vote on this proposal without your instruction.

        The affirmative vote of a majority of the shares of common stock present in person or represented by proxy and voting on the matter is required to ratify the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2011.2012.

        The numberaffirmative vote of affirmative votes validly cast in favora majority of the proposalshares of common stock present in person or represented by proxy and voting on the matter is required to approve the compensationamendment and restatement of our named executive officers must exceed the number of votes cast against the2005 Equity Incentive Plan. Brokers do not have discretion to vote on this proposal in order towithout your instruction.

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approve, on an advisory basis, the proposal, although such vote will not be binding on us. Abstentions and broker non-votes will have no effect on this proposal.

        You may vote to approve, on an advisory basis, the frequency of the advisory vote on the compensation of our named executive officers every one, two or three years or you may abstain from voting. The frequency of holding the advisory vote on the compensation of our named executive officers will be decided by a plurality of the votes validly cast, although such vote will not be binding on us. Abstentions and broker non-votes will have no effect on this proposal.

How many votes are required to approve other matters that may come before the stockholders at the meeting?

        A majority of the shares present, in person or by proxy, excluding broker nonvotes,non-votes, voting in favor is required to approve any other matters that may properly come before the stockholders at the meeting.

Is my vote kept confidential?

        Proxies, ballots and voting tabulations identifying stockholders are kept confidential and will not be disclosed except as may be necessary to meet legal requirements.

Where do I find the voting results of the meeting?

        We will announce preliminary voting results at the meeting, and will file a Form 8-K with the Securities and Exchange Commission ("SEC") reporting the results within four business days after the date of the meeting. You can get a copy of that Form 8-K by calling Overstock Investor Relations at (801) 947-3100 or the SEC at (800) SEC-0330 for the location of the nearest public reference room, or through the EDGAR system at www.sec.gov. You can also get a copy from our website at http://investors.overstock.com.

Who pays for the proxy solicitation process?

        We will pay the costs of soliciting proxies, including the cost of preparing, posting and mailing proxy materials. In addition to soliciting stockholders by mail, we will request brokers, banks and other nominees to solicit their customers who hold shares of Overstock common stock in street name. We may reimburse such brokers, banks and nominees for their reasonable, out-of-pocket expenses. We may also use the services of our officers, directors and employees to solicit proxies, personally or by telephone, mail, facsimile or email, without additional compensation other than reimbursement for reasonable, out-of-pocket expenses. We intend to use the services of a proxy solicitation firm in connection with the Annual Meeting and anticipate that the costs of such services will be approximately $8,000 plus reimbursement for reasonable out-of-pocket expenses.

How can I get an additional copy of the proxy materials?

        If you would like an additional copy of this proxy statement or our 20102011 Form 10-K, these documents are available in digital form for download or review athttp://www.overstock.com/proxy. Alternatively, we will promptly send a copy to you at no charge upon request by mail to Overstock.com, Inc., Attention: Investor Relations, 6350 South 3000 East, Salt Lake City, Utah 84121, or by calling Overstock Investor Relations at (801) 947-3100.

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Who can help answer my questions?

        If you have questions about voting or the proposals described in this Proxy Statement, please call Georgeson Shareholder Communications, our proxy solicitor, toll-free at (800) 509-0983.

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PROPOSALS TO BE VOTED ON:

PROPOSAL 1.—1—ELECTION OF DIRECTORS

        The nominees for election this year as Class IIII directors, for three-year terms ending in 2014,2015, are Ms. Allison H. Abraham,Patrick M. Byrne and Barclay F. Corbus.

        Dr. Byrne has served as our Chief Executive Officer (our principal executive officer) and as a Director since 1999, as Chairman of the Board from February 2001 through October 2005, and as Chairman since July 2006.

        Mr. Samuel A. Mitchell and Ms. Stormy D. Simon.

        Ms. AbrahamCorbus has been a director since 2002. She2007. Mr. Corbus is Chairwoman of the Audit Committee and a member of the Compensation Committee and of the Nominating and Corporate Governance Committee.

        Mr. Mitchell has been a director since October 2010. Mr. Mitchell is a member of each of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee.

        Ms. Simon joinedCommittee and is the Company in 2001 and currently serves as our Senior Vice President, Marketing and Customer Care.Chairman of the Compensation Committee.

        Each of the nominees has consented to serve a three-year term. For additional information about the nominees, see "The Board—Information Regarding Director Nominees and Other Directors."

Recommendation of the Board of Directors

        The Board of Directors unanimously recommends a vote "FOR" each of the nominees.

Vote Required

        Directors are elected by a plurality of the votes of the shares of common stock present in person or represented by proxy at the meeting. Votes withheld are counted for purposes of determining the presence or absence of a quorum for the transaction of business, but otherwise they have no legal effect under Delaware law. Brokers generally may not use discretionary authority to vote shares in the election of directors if they have not received instructions from their clients.

PROPOSAL 2.—2—RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

        Proposed Ratification of Appointment of KPMG LLP.    The Audit Committee of the Board of Directors has appointed KPMG LLP as our independent registered public accounting firm to audit our financial statements and audit our internal control over financial reporting for the fiscal year ending December 31, 2011.2012 and audit the effectiveness of our internal control over financial reporting as of December 31, 2012. KPMG LLP has served as our independent registered public accounting firm since December 2009. Although ratification of the Audit Committee's selection of KPMG LLP is not required under our bylaws or other legal requirements, we are submitting the appointment of KPMG LLP to the stockholders as a matter of good corporate practice. If the stockholders do not ratify the appointment of KPMG LLP, the Audit Committee will reconsider whether or not to retain KPMG LLP. Even if the stockholders ratify the selection of KPMG LLP, the Audit Committee may appoint a different independent registered public accounting firm or replace KPMG LLP with a different independent registered public accounting firm at any time if the Audit Committee determines that it is in the best interests of the Company and the stockholders to do so. Representatives of KPMG LLP are expected to attend the annual meeting to respond to appropriate questions and will have an opportunity to make a statement if they so desire.

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The following information (until the heading "Audit Fees," below, starting on page 14) was previously included in our 2010 proxy statement. It is included again this year in accordance with the requirements of the proxy rules.

        Information regarding the Engagement of KPMG LLP.    The Audit Committee engaged KPMG LLP on December 28, 2009 as our independent registered public accounting firm to audit the Company's financial statements and to audit the Company's internal control over financial reporting for the fiscal year ending December 31, 2009. During our fiscal years ended December 31, 2008 and 2007 and the subsequent interim period prior to engaging KPMG through December 28, 2009, neither the Company nor anyone on its behalf consulted KPMG LLP regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company's financial statements, and either a written report was provided to us or oral advice was provided that KPMG LLP concluded was an important factor considered by us in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was the subject of a disagreement or reportable event as defined in Regulation S-K, Item 304(a)(1)(iv) and Item 304(a)(1)(v). The report of KPMG on the consolidated financial statements of the Company for the year ended December 31, 2009 did not contain an adverse opinion or a disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope or accounting principle. KPMG also audited our internal control over financial reporting as of December 31, 2009, and expressed an adverse opinion on the effectiveness of our internal control over financial reporting.

        Information regarding the Dismissal of PricewaterhouseCoopers LLP.    Our financial statements for the fiscal year ending December 31, 2008 were audited by PricewaterhouseCoopers LLP ("PwC"). PwC served as our independent accountants from 1999 until March 23, 2009, at which time the Audit Committee did not re-engage PwC as our independent accountants. The decision to not re-engage PwC was approved by the Audit Committee on March 23, 2009 as the result of a competitive proposal process. The report of PwC on the consolidated financial statements of the Company for the year ended December 31, 2008 did not contain an adverse opinion or a disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope or accounting principle. During the Company's fiscal year ended December 31, 2008 and through March 23, 2009, there were no disagreements with PwC on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to PwC's satisfaction, would have caused PwC to make reference to the subject matter of such disagreements in connection with its reports on our consolidated financial statements for such years. During our fiscal year ended December 31, 2008 and through March 23, 2009, there was a "reportable event" as defined under Item 304(a)(1)(v) of Regulation S-K. In 2008 the Company and Audit Committee discussed with PwC the existence of a material weakness in our internal control over financial reporting and disclosure controls and procedures relating to our accounting for customer refunds and credits and the accounting for gift cards issued to customers. Management concluded that the material weakness was remediated as of December 31, 2008. In connection with the dismissal of PwC, we authorized PwC to respond fully to the inquiries of the new independent registered public accounting firm related to the material weakness.

        Information regarding the Engagement of Grant Thornton LLP.    The Audit Committee engaged Grant Thornton LLP on March 23, 2009 as our independent registered public accounting firm. During our fiscal years ended December 31, 2008 and 2007 and the subsequent interim period prior to engaging Grant Thornton��LLP through March 23, 2009, neither the Company nor anyone on its behalf consulted Grant Thornton LLP regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on our financial statements, and either a written report was provided to us or oral advice was provided that Grant Thornton LLP concluded was an important factor considered by us in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was the

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subject of a disagreement or reportable event as defined in Regulation S-K, Item 304(a)(1)(iv) and Item 304(a)(1)(v).

        Information regarding the Dismissal of Grant Thornton LLP.    The Audit Committee dismissed Grant Thornton LLP as our independent registered public accounting firm on November 13, 2009, prior to Grant Thornton LLP completing its review of the financial statements for the three and nine-month periods ended September 30, 2009. Consequently Grant Thornton LLP did not perform an audit or issue a report on our financial statements. The decision to dismiss Grant Thornton LLP was approved by the Audit Committee.

        Grant Thornton LLP was not engaged to (and did not) serve as the Company's independent registered public accounting firm during any part of our fiscal years ended December 31, 2008 or 2007. Except for the issue regarding the fulfillment partner overpayment described below, through November 13, 2009, there were no disagreements with Grant Thornton LLP on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to Grant Thornton LLP's satisfaction, would have caused Grant Thornton LLP to make reference to the subject matter of such disagreements in connection with the report we had anticipated Grant Thornton LLP would issue on our consolidated financial statements for the year ending December 31, 2009 (as described above, the Audit Committee dismissed Grant Thornton LLP on November 13, 2009, and Grant Thornton LLP did not audit or issue any report on our consolidated financial statements for the year ending December 31, 2009):

        On October 1, 2009, the Company received a comment letter from the Division of Corporation Finance of the SEC regarding the Company's 2008 Form 10-K/A and June 30, 2009 Form 10-Q. In consultation with both its prior independent registered public accounting firm, PwC, and its then current independent registered public accounting firm, Grant Thornton, the Company prepared and submitted to the SEC its responses to the comment letter on October 16, 2009 and October 21, 2009. The SEC reviewed the Company's responses, and on November 3, 2009 the SEC responded with a follow-up comment letter which requested additional information or clarification regarding, among other matters, a fulfillment partner overpayment (which the Company recovered and recognized $785,000 as income in 2009 as it was received), fulfillment partner under billings (which the Company recovered and recognized $615,000 as income in 2009 as it was received), overbillings by a freight carrier in 2008 (which the Company recognized $301,000 in income in 2009 when the refunds were received), and an adjustment related to redeemable shares of the Company's common stock (which the Company reclassified $744,000 in 2009 from stockholder's equity to redeemable common stock).

        When the fulfillment partner underbillings and overpayments were originally discovered, the Company determined that the recovery of such amounts was not assured, and that consequently the potential recoveries constituted a gain contingency. Accordingly, the Company determined that the appropriate accounting treatment for the potential recoveries was to recognize their benefit only when such amounts became realizable (i.e., an agreement had been reached with the other party and cash had been received from future sales).

        We then began to assemble information in response to the SEC's November 3, 2009 comment letter, again in consultation with our prior and then current independent registered public accounting firms. During such consultation, we and our Audit Committee were informed by Grant Thornton, that upon further consultation and review within the firm, Grant Thornton had revised its earlier position of agreement with our accounting treatment for a $785,000 recovery in 2009 of overpayments to a fulfillment partner during 2008 and that we should revise our financial statements to reflect the recovery as an asset in the financial statements for the year ended December 31, 2008 as opposed to recognizing the amount when recovered during 2009. On November 13, 2009, after the Audit Committee dismissed Grant Thornton, Grant Thornton delivered a letter to us stating that it believed disclosure should be made or action should be taken to prevent future reliance on our interim financial

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statements for the quarters ended March 31, 2009 and June 30, 2009 included in our Quarterly Reports on Form 10-Q for the respective periods. We believe that the reason for Grant Thornton's letter was our accounting treatment for the $785,000 recovery in 2009 of overpayments to a fulfillment partner during 2008 as described above. The Audit Committee discussed this matter with Grant Thornton. At the time, we, along with our prior independent registered public accounting firm, PwC, continued to believe the amount was properly recognized in the first quarter of 2009 and consequently believed that those prior financial statements could be relied upon. We authorized Grant Thornton to respond fully to the inquiries of a successor independent registered public accounting firm related to the disagreement described above.

Grant Thornton believes readers should review the entire body, including exhibits thereto, of the Form 8-K/A dated November 23, 2009, which is available by calling Overstock Investor Relations at (801) 947-3100 or the SEC at (800) SEC-0330 for the location of the nearest public reference room, or through the EDGAR system at www.sec.gov. You can also get a copy from Overstock's website at http://investors.overstock.com.

        Information regarding the Previously Announced Restatement.    As previously disclosed, on January 29, 2010, the Audit Committee of the Board of Directors concluded, based on the recommendation of management, that we would restate (1) our consolidated financial statements for the year ended December 31, 2008 and (2) our quarterly consolidated financial statements for all interim periods in the year ended December 31, 2008 and the interim periods ended March 31, 2009, June 30, 2009 and September 30, 2009. The restated financial information, which is included in our Annual Report on Form 10-K for the year ended December 31, 2009 as filed with the SEC on March 31, 2010, correct the following errors:

•

Accounting for amounts that we pay our drop ship fulfillment partners and an amount due from a vendor that went undiscovered for a period of time. Specifically, these errors related to (1) amounts we paid to partners or deducted from partner payments related to return processing services and product costs and (2) amounts we paid to a freight vendor based on incorrect invoices from the vendor. Once discovered, we applied "gain contingency" accounting for the recovery of such amounts, which was an inappropriate accounting treatment.



•

Amortization of the expense related to restricted stock units. Previously the expense was based on the actual three year vesting schedule, which incorrectly understated the expense as compared to a three year straight line amortization. We also corrected for the use of an outdated forfeiture rate in calculating share-based compensation expense under the plans.

        The following additional adjustments were also included in the restatement:

•

Correction of certain amounts related to customer refunds and credits.



•

Recognition of co-branded credit card bounty revenue and promotion expense over the estimated term of the credit card relationships. Previously the revenue was incorrectly recognized when the card was issued.



•

Reduction in the restructuring accrual and correction of the related expense due to a 2008 sublease benefit which was previously excluded from the accrual calculation and the accretion of interest expense related to the restructuring accrual, which was not previously recorded.



•

Change in our accounting for external audit fees to the "as incurred" method instead of the "ratable" method.



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Other miscellaneous adjustments, none of which were material either individually or in the aggregate. Certain of these adjustments were related to a reduction in revenue and cost of goods sold in equal amounts for certain consideration we received from vendors, an increase in

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inventory, accounts payable and accrued liabilities to record our sales return allowance on a gross basis, an adjustment to our cash and restricted cash balances due to compensating balance arrangements and an adjustment to record redeemable common stock for certain shares previously issued to employees.

        Our financial statements for the years ended December 31, 2009 and 2008 and the consolidated interim financial information for the periods ended March 31, 2009, June 30, 2009 and September 30, 2009 contained in our Annual Report on Form 10-K for the year ended December 31, 2009 as filed with the SEC on March 31, 2010 reflect the restatements, corrections and reclassifications described above.

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Audit Fees

        KPMG LLP was engaged as our independent registered public accounting firm to audit our financial statements for the years ended December 31, 20102011 and 2009,2010 to audit our internal control over financial reporting as of December 31, 20102011 and 2009,2010, to review our 20102011 and 20092010 interim financial statements, and to perform services in connection with our registration statements and SEC comment letter responses. The aggregate audit fees KPMG LLP billed us for professional services in 2011 and

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2010 were $1,121,000$1,092,000 and in 2009$1,121,000. All audit fees and other fees were $1,530,000.pre-approved by the Audit Committee.

Audit-Related Fees

        KPMG LLP billed us $21,000 in 2011 for the audit of our employee benefit plan for 2010 and $40,000 in 2010 for the audits of our employee benefit plan for 2009 and 2008. The amount KPMG LLP billed us for audit-related fees in 2009 was $0.

Tax Fees

        The amount KPMG LLP billed us for professional services rendered for compliance, tax advice or tax planning in 2011 was $96,000 and in 2010 was $23,000 and in 2009 was $0.$23,000.

All Other Fees

        In 2011, KPMG LLP billed us no amounts for other fees. In 2010, KPMG LLP billed us $181,000 for an IT integrity assessment project, $456,000 for direct reimbursement to KPMG LLP for costs incurred in retaining outside legal counsel to assist KPMG LLP in responding to our ongoing SEC investigation, and $26,000 for time KPMG LLP personnel incurred in responding to our ongoing SEC investigation. The amount KPMG LLP billed us in 2009 for all other fees was $0.

Auditor Independence

        The Audit Committee has considered the role of KPMG LLP in providing us with the services described above, and has concluded that those services were compatible with the independence of KPMG LLP from management and from the Company.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm


General

        The Audit Committee has adopted an Audit and Non-Audit Services Pre-Approval Policy (the "Policy"), which sets forth the procedures and the conditions pursuant to which all services to be performed by the independent registered public accounting firm are required to be pre-approved. Under the Policy, proposed services either may be pre-approved by agreeing to a framework with descriptions of allowable services with the Audit Committee ("general pre-approval"), or require the specific pre-approval of the Audit Committee ("specific pre-approval"). Unless a type of service has received general pre-approval, it requires specific pre-approval by the Audit Committee if it is to be provided by the independent registered public accounting firm.

        The Policy describes the Audit, Audit-related, Tax and All Other Services that are subject to the general pre-approval of the Audit Committee. The Audit Committee annually reviews and pre-approves the services that may be provided by the independent registered public accounting firm that are subject to general pre-approval. Under the Policy, the Audit Committee may delegate either type of pre-approval authority to its chairperson or any other member or members. The member to whom such authority is delegated must report, for informational purposes only, any pre-approval decisions to the Audit Committee at its next meeting. The Policy does not delegate the Audit Committee's

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responsibilities to pre-approve services performed by the independent registered public accounting firm to management.

Audit Services

        The annual audit services engagement scope and terms are subject to the general pre-approval of the Audit Committee. Audit services include the annual financial statement audit (including required

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quarterly SAS 100 reviews) and other procedures required to be performed by the independent registered public accounting firm to be able to form an opinion on our consolidated financial statements. Audit services also include the attestation engagement for the independent registered public accounting firm's audit of the effectiveness of internal control over financial reporting. The Policy provides that the Audit Committee will monitor the audit services engagement throughout the year and will also approve, if necessary, any changes in terms and conditions resulting from changes in audit scope or other items. The Policy provides for Audit Committee pre-approval of specific audit services outside the engagement scope.

Audit-related Services

        Audit-related services are assurance and related services that are reasonably related to the performance of the audit or review of our financial statements or that are traditionally performed by the independent registered public accounting firm. Under the Policy, the Audit Committee grants general pre-approval tofor audit-related services.

Tax Services

        Under the Policy, the Audit Committee may grant general pre-approval tofor specific tax compliance, planning and advice services to be provided by the independent registered public accounting firm, that the Audit Committee has reviewed and believes would not impair the independence of the independent registered public accounting firm, and that are consistent with the SEC's rules on auditor independence. Tax services to be performed by our independent registered public accounting firm must be specifically approved by the Audit Committee.

All Other Services

        Under the Policy, the Audit Committee may grant pre-approval tofor specific permissible non-audit services classified as All Other Services that it believes are routine and recurring services, would not impair the independence of the independent registered public accounting firm and are consistent with the SEC's rules on auditor independence. Services permissible under applicable rules but not specifically approved in the Policy require further specific pre-approval by the Audit Committee.

Procedures

        Under the Policy, at the beginning of each year the Senior Vice President, Finance and Risk Management (our principal financial and accounting officer) and our independent registered public accounting firm jointly submit to the Audit Committee a schedule of audit, audit-related, tax and other non-audit services that are subject to pre-approval. This schedule provides a description of each type of service that is subject to pre-approval and, where possible, provides projected fees (or a range of projected fees) for each service. The Audit Committee reviews and approves the types of services and reviews the projected fees for the next fiscal year. Any changes to the fee amounts listed in the schedule are subject to further specific approval of the Audit Committee. The Policy prohibits the independent registered public accounting firm from commencing any project not described in the schedule approved by the Audit Committee until specific approval has been given.

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Recommendation of the Board of Directors

        The Board of Directors unanimously recommends that the stockholders vote "FOR" ratification of the selection of KPMG LLP as our independent registered public accounting firm.

Vote Required

        The affirmative vote of a majority of the shares represented at the meeting, in person or by proxy, will be required to approve the proposal.

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PROPOSAL 3—ADVISORY VOTE ON EXECUTIVE COMPENSATIONAMENDMENT AND RESTATEMENT OF OUR 2005 EQUITY INCENTIVE PLAN

        Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act"), we are asking our stockholders to approve, on an advisory basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with the SEC's rules.

        As we discuss in detail elsewhere in this proxy statement, we seek to attract and retain highly competent executive management who will build long-term economic value for the Company. We strive to maintain an egalitarian compensation structure among our senior management team, as we believe that paying most of our executive team the same annual compensation package fosters an environment of teamwork that benefits the Company. We also try to foster an environment in which management leads by example. For example, from prior to our IPO in 2002 through December 31, 2010 our Chief Executive Officer refused to accept any salary or cash bonus. Further, at the recommendation of our senior management team, none of our executives received any bonus payment with respect to either 2008 or 2010. The objectives of our executive compensation plans and programs are to:

•

Emphasize the enhancement of the long-term economic value of the Company;



•

Retain the senior executives; and



•

Deliver the total executive compensation package in a cost-effective manner.

        Our executive compensation is discussed in further detail below under the caption "Executive Officer and Director Compensation—Compensation Discussion and Analysis," which includes information about the fiscal year 2010 compensation of our named executive officers, as well as in the sections following the Compensation Discussion and Analysis.

        We are asking our stockholders to indicate their supportapprove an amendment and restatement of our 2005 Equity Incentive Plan (the "2005 Plan"), to increase the number of shares available thereunder by 2,500,000 and to make other immaterial modifications set forth in the amended and restated plan.

        Our stockholders are also being asked to re-approve the material terms of the 2005 Plan and the performance goals thereunder for the purpose of helping awards under the amended and restated 2005 Plan qualify as "performance-based" compensation under Internal Revenue Code Section 162(m).

        As of March 1, 2012, 23,420,641 shares of common stock were outstanding.

        As of March 1, 2012, options to purchase 390,920 shares of common stock were outstanding and 998,750 restricted stock units were outstanding and subject to further vesting requirements under the 2005 Plan. We have never made any other types of awards under the 2005 Plan, and no other awards were outstanding under the Plan at March 1, 2012. As of March 1, 2012, 354,501 shares of common stock remained available for future grants under the 2005 Plan.

        The only types of awards we have granted under the 2005 Plan are options and restricted stock units. During 2011 we granted restricted stock units covering 268,000 shares of common stock under the 2005 Plan, including 97,500 restricted stock units granted to current executive officers of the Company. We have not granted any stock options under the 2005 Plan since May 13, 2008.

        The amended and restated 2005 Plan provides for the grant of options to purchase shares of our named executive officers, as described in this proxy statement. This proposal, commonly known as a "say-on-pay" proposal, iscommon stock, stock appreciation rights ("SARs"), restricted stock, restricted stock units, performance shares, performance units, and deferred stock units to employees and consultants of the Company. The amendment and restatement does not intendedmake any material change to address any specific itemthe types of compensation, but ratherawards that may be granted under the overall compensation2005 Plan. Our Board of Directors approved the amended and restated 2005 Plan on March 12, 2012, subject to stockholder approval at the 2012 annual meeting.

        As of March 12, 2012, the closing price of our named executive officerscommon stock was $5.23 per share. The title of the securities that will be subject to grants under the amended and restated 2005 Plan is our Common Stock, $0.0001 par value per share. The number of shares of common stock that will be subject to grants under the amended and restated 2005 Plan, assuming stockholder approval, will be 2,854,501, less any shares subject to any award made after March 1, 2012.

        The classes of persons who would be eligible to participate in the amended and restated Plan and the philosophy, policiesapproximate number of persons in each such class are currently as follows: Non-employee directors (four persons); Named Executive Officers (six persons); executive and practices described in this proxy statement. Accordingly, we ask our stockholders to vote "FOR"other officers excluding the following resolution at our annual meeting:

"RESOLVED, thatNamed Executive Officers (nine persons); employees excluding all executive and other officers (1,275 persons) and consultants (0 persons). The basis of participation by any person will be the Company's stockholders approve, ongrant of an advisory basis, the compensation of the named executive officers, as disclosed in the Company's proxy statement for the 2011 annual meeting of stockholders pursuant to the compensation disclosure rules of the SEC, including the "Compensation Discussion and Analysis," the "Summary Compensation Table" and the other related tables and disclosure."

        The say-on-pay vote is advisory and, therefore, not binding; however,award by the Compensation Committee will consideror the outcomefull Board of Directors. Awards are expected to be made primarily if not exclusively to the persons the Compensation Committee believes have the ability to have a significant effect on the success of the vote when considering future executive compensation arrangements.Company's business.

        The benefits or amounts that will be received by or allocated to employees, executives, other officers and directors of the Company under the amended and restated 2005 Plan are not determinable. However, if the amended and restated 2005 Plan had been in effect during 2011 (in lieu

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Recommendation of the 2005 Plan), the Named Executive Officers and the groups shown below would have received the same grants that they received during 2011 under the 2005 Plan, which were as follows:

        The following table provides information as of December 31, 2011 with respect to shares of our common stock that may be issued under our existing equity compensation plans.

        Please see the summary of the Plan below.

Vote Required and Recommendation

        If a quorum is present, the affirmative vote of a majority of the shares present, entitled to vote and cast at the Annual Meeting will be required to approve the amendment and restatement of the 2005 Plan.

        Brokers do not have discretion to vote on this proposal without your instruction. If you do not instruct your broker how to vote on this proposal, your broker will deliver a non-vote on this proposal. Broker non-votes, if any, will have no effect on the outcome of the vote on this proposal. Abstentions will have the effect of a vote "against" the proposal. If our stockholders do not approve the amendment and restatement of the 2005 Plan, we will continue to make grants under the 2005 Plan until we have utilized the shares remaining available for grant thereunder. Our executive officers and

        The Board of Directors

The Board recommends a vote "FOR" Proposal 3, the approval of proposal 3—approval, on an advisory basis,the amendment and restatement of the compensation2005 Plan, and to approve the material terms of our named executive officers, as disclosedthe amended and restated 2005 Plan and the performance goals thereunder for purposes of Section 162(m) of the Internal Revenue Code. Proxies solicited by the Board will be so voted unless stockholders instruct otherwise in this proxy statement pursuant totheir proxies.

Summary of the SEC's compensation disclosure rules.Plan

PROPOSAL 4—ADVISORY VOTE ON THE FREQUENCY OF THE ADVISORY VOTE ON EXECUTIVE COMPENSATION

        Pursuant to the Dodd-Frank Act, we are asking our stockholders to indicate, on an advisory basis, how frequently we should seek an advisory vote on the compensation of our named executive officers, as disclosed pursuant to the SEC's compensation disclosure rules, such as proposal 3 in this proxy statement. By voting on this proposal 4, stockholders may indicate whether they would prefer an advisory vote on named executive officer compensation once every one, two, or three years. Alternatively, stockholders may abstain from casting a vote.

        The board believes itmaterial features of the amended and restated 2005 Plan are summarized below. This summary does not purport to be complete and is most appropriatesubject to, conductand qualified in its entirety by, the provisions of the amended and restated 2005 Plan, which is attached as Appendix A. Capitalized terms used herein and not defined shall have the meanings set forth in the amended and restated 2005 Plan.

        Purpose.    The purposes of the amended and restated 2005 Plan are to attract and retain the best available personnel, to provide additional incentive to our employees, consultants and non-employee directors, and to promote the success of our business.

        Administration.    The amended and restated 2005 Plan may be administered by our Board of Directors or a committee, which our Board of Directors may appoint from among its members (the "Administrator"). To the extent awards are intended to constitute "performance-based compensation" under Section 162(m) of the Internal Revenue Code, the amended and restated 2005 Plan will be administered by a committee of two or more "outside directors" within the meaning of Section 162(m) of the Internal Revenue Code. Subject to the provisions of the amended and restated 2005 Plan, the Administrator has the authority to: (i) interpret the amended and restated 2005 Plan, apply its provisions and reconcile any inconsistency, correct any defect and supply any omission in the plan or an advisory voteaward agreement; (ii) prescribe, amend or rescind rules and regulations relating to the amended and restated 2005 Plan; (iii) select the persons to whom awards are to be granted; (iv) subject to individual fiscal year limits applicable to each type of award, determine the number of shares or equivalent units to be made subject to each award; (v) determine whether and to what extent awards are to be granted; (vi) determine the terms and conditions applicable to awards generally and of each individual award (including the provisions of the award agreement to be entered into between the Company and the participant); (vii) amend any outstanding award subject to applicable legal restrictions; (viii) authorize any person to execute, on executive compensation once every three years and, therefore,our behalf, any instrument required to effect the board recommends that you votegrant of an award; (ix) approve forms of agreement for a three-year interval for the advisory vote on executive compensation.

        As described belowuse under the caption "Executive Officeramended and Director Compensation—Compensation Discussion and Analysis,"restated 2005 Plan; (x) allow participants to satisfy minimum withholding tax obligations by tendering cash or shares owned by the participant or electing to have the Company withhold from the shares or cash to be issued that number of shares or cash having a fair market value equal to the minimum amount required to be withheld; (xi) reduce the exercise price of an award to the then current fair market value if the fair market value of the common stock covered by the award has declined since the date the award was granted, provided our executive compensationstockholders have approved such action; (xii) institute an award exchange program, is designedprovided that no exchange will cause the exercise price of an award to achieve a balance of short-term and long-term goals. To this end,be reduced unless our stockholders have approved such action; (xiii) determine the Compensation Committee combines potential short-term cash incentive awards featuring one-year performance goals with long-term equity awards, which vest over a three-year period, and withfair market value based on the price of our common stock. The Board believes that holdingstock; and (xiv) subject to certain limitations, take any other actions and make all other determinations deemed necessary or advisable for the advisory voteadministration of the amended and restated 2005 Plan. All decisions, interpretations and other actions of the Administrator shall be final and binding on executive compensation once every three years will encourage a reasonably long-term focusall holders of awards and on our executive compensation policiesall persons deriving their rights therefrom.

        Shares Available.    Subject to stockholder approval of the amended and practices.

        When you vote in response to the resolution set forth below, you may cast your vote on your preferred voting frequency by choosing among the following four options: once every one year, two years or three years, or you may abstain from voting.

"RESOLVED, that the optionrestated 2005 Plan, an aggregate of once every one year, two years or three years that receives the highest number of votes cast for this resolution2,854,501 shares will be determinedavailable for grant under the amended and restated 2005 Plan, less any shares subject to be the preferred frequency with which the Company is to hold a stockholder vote to approve the compensationany award made after March 1, 2012. The shares of the named executive officers, as disclosed pursuant to the SEC's compensation disclosure rules (which disclosure shall include the "Compensation Discussion and Analysis," the "Summary Compensation Table" and the other related tables and disclosure)."

        The option of once every one year, two years or three years that receives the highest number of votes cast by stockholders is expected to be the frequency for the advisory vote on executive compensation that has been selected by stockholders. This vote is advisory and, therefore, not binding, and the Board may decide in the future that it is in the Company's best interests and in the best interests of our stockholders to hold an advisory vote on executive compensation more or less frequently, as applicable, than the option approved by our stockholders.

Recommendation of the Board of Directors

The board recommends a vote "FOR" the option of once every three years under proposal 4—the frequency with which the Company will hold an advisory vote on executive compensation, as disclosed pursuant to the SEC's compensation disclosure rules.common stock covered

our common stock increases after the date of grant. We have not granted any options since 2007.2008. The plan also provides for the grant of restricted stock awards and other types of awards, although prior to 2008 we had not made any such awards. The plan is designed to provide at-risk (incentive) compensation that aligns management's financial interests with those of our stockholders and encourages management ownership of our common stock. Beginning in 2008, the Compensation Committee has approved annual grants of restricted stock units under the plan. The Compensation Committee determines the number of restricted stock units to be granted to key employees, including Named Executive Officers, based on a recommendation of management including the active participation of the Chief Executive Officer and the President, by determining the aggregate amount it considers appropriate for the entire group and allocating the awards on the basis of management's recommendation and the Compensation Committee's subjective views of the relative ability of key employees or groups of key employees to make positive contributions to the Company. We generally make equity grants to key employees, including Named Executive Officers, annually at a regularly scheduled Compensation Committee meeting typically held in January or February of each year, but otherwise have not adopted any specific policy regarding the amount or timing of any stock-based compensation for employees under the plan. We do not, and have not,never backdated or repriced options. The aggregate grant date fair value of equity-based awards is set forth in the Summary Compensation Table. Information concerning the number of options and restricted stock units held by each Named Executive Officer as of December 31, 20102011 is set forth in the Outstanding Equity Awards at Fiscal Year-End Table.

        401(k) Plan.    We maintain a 401(k) plan, in which Named Executive Officers may participate. During 20102011 we matched 50% of participants' contributions on up to 6% of their salaries, and in early 2011 we contributed 1% of their 2010 salaries as a profit-sharing contribution. We did not make any profit-sharing contribution relating to 2011 salaries. The amounts of matching contributions and profit sharing contributions allocated to our Named Executive Officers are

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set forth in the Summary Compensation Table. Participation in the 401(k) plan is available to employees on a non-discriminatory basis.

        Health and Welfare Benefits.    We provide health, life and disability insurance and other employee benefits programs to our employees, including our Named Executive Officers. Our employee benefits plans are provided on a non-discriminatory basis to all employees.

        Nonqualified Deferred Compensation Plan.    We have a nonqualified deferred compensation plan for senior management (the "Deferred Compensation Plan"). The Deferred Compensation Plan, which is described in more detail below, allows participants to defer receipt of compensation otherwise payable to them under our existing compensation plans, and also permits us to make discretionary contributions to participants' accounts. We have never made any discretionary contributions to participants' accounts.

Why We Pay these Elements of Compensation; How We Determine the Amounts; and Interrelationships of these Elements.    The main elements of compensation potentially available to our Named Executive Officers (other than our Chief Executive Officer) for 20102011 were (i) base salary, (ii) bonus payments under the bonus pool,2011 Bonus Plan, and (iii) restricted stock unit grants. The three elements operate independently of one another, although in setting them, the Compensation Committee considers the value of each component and the total value of the compensation package being provided to each of the Named Executive Officers, as well as the history of each officer's compensation package. The base salaries we paid during 20102011 ($300,000 to each Named Executive Officer other than our Chief Executive Officer, who did not draw a salary,received $100,000, and $350,000 to our President)President, who received $350,000) were paid in order to retain the services of those executives. The Compensation Committee increasedmaintained the salaries of the Named Executive Officers (other than the CEO) by $100,000 each at the beginning of 2010 levels because the Committee determined based on the information it reviewed relatingthat, except for our CEO as described above, no changes to the Utah Companies, the Internet Retail Companies, and a summary of the information the Company obtained from SCP and the Economic Research Institute ("ERI"), a database leased by the Company, that our executive cash compensation was significantly below market rates. The Committee considered the revenues and operating profits of the Utah Companies and the Internet Retail Companies, as well as the salaries and bonuses paid by each of them. The Committee did not consider compensation paid by any of them other than salary and bonus information. Consistent with our belief that all of our Senior Vice Presidents should be paid the same amount, the Committee set the salaries of each Named Executive Officer who is a Senior Vice President at any of

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the same amount. The Committee set the 2010 salary amounts at $300,000 for these Named Executive Officers other than our Chief Executive Officer, who did not draw a salary, and $350,000 to our President, because thewere appropriate. The Committee believed that these amounts would bethe salaries, together with the rest of the compensation packages, were sufficient to retain the services of the Named Executive Officers and would bringto keep their salaries within a reasonable range of the median cash compensation paid by the Utah Companies, the Internet Retail Companies, and indicatedcompanies reviewed by the SCP and ERI data,Compensation Committee, but would not be more than the amount necessary to achieve those objectives. The Committee setmaintained our President's salary at a higher level ($350,000) than the $300,000 we pay most of our other Named Executive Officers because of his Company-wide responsibilities.

        As described above, in February 2010January 2011 the Compensation Committee also approved an executive targeta management bonus pool plan (the "2010"2011 Bonus Plan"), andin which the Named Executive Officers had been expectedwere eligible to participate in any bonuses ultimately paid under the 2010 Bonus Plan.participate. The Compensation CommitteeCommittee's intention was to establish the pool target and the amounts the Named Executive Officers might be expected to receive if the Company were to achieve its 20102011 plan objectives in an effort to cause the total cash compensation of the Named Executive officers in 2010 to be closer to market compensation than it has historically been. However, in early 2011, our senior management team, includingat levels that would produce meaningful bonuses for the Named Executive Officers recommended toand other participants. The Company did not achieve its 2011 plan objectives, and the Compensation Committee that no bonuses be paid to any Named Executive Officer under the 20102011 Bonus Plan and no such bonuses were paid. Althoughreflected the Compensation Committee had the ability under the 2010 Bonus Plan to make adjustments to the bonuses to be paid to Named Executive Officers based on the Committee's subjective view of the performance of each such officer during the year, in light of the officers' recommendation that no bonuses be paid to them for 2010, the Compensation Committee did not exercise its ability to make subjective adjustments (except to the extent that the Committee approved making no bonus payments at all).year's results.

        We granted restricted stock units to our Named Executive Officers and other key employees in early 20102011 to provide long-term incentive compensation tied directly to the price of the Company's

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common stock. The grants are intended to have a retention effect, as they vest over a three-year period, with 50% of the grant vesting at the end of the third year. They are also intended to provide reasonable incentives tied to the price of the Company's common stock, which we believe to be in the best interests of stockholders generally. We determined the number of restricted stock units to be granted to the Named Executive Officers by choosing amounts we believed would provide meaningful economic incentives to the Named Executive Officers, but without being more than the amount necessary to provide those incentives.

        The 401(k) plan contributions and the health and welfare benefits we provide are intended to help make our overall compensation packages more attractive to all our employees, including our Named Executive Officers.

        Risks of Our Compensation Policies and Practices.    We periodically analyze and evaluate risks arising from our compensation policies and practices, and have concluded that our compensation policies and practices are not reasonably likely to have a material adverse effect on us.

Nonqualified Deferred Compensation Plan

        We have a nonqualified deferred compensation plan for senior management (the "Deferred Compensation Plan"). The Deferred Compensation Plan allows participants to defer receipt of compensation otherwise payable to them under our existing compensation plans, and also permits us to make discretionary contributions to participants' accounts. Participants are permitted to select from a limited number of investment alternatives available under the Plan. Under the terms of the Deferred Compensation Plan, eligible members of senior management, including the Named Executive Officers, may defer receipt of their compensation, including up to 50% of their salaries and up to 90% of their bonuses. Deferral elections were first made in late December 2009, but did not take effect until January 1, 2010. We may, though we have no obligation to, make discretionary contributions on behalf of a participant in the Deferred Compensation Plan, in such form and amount as we deem appropriate. To date, we have not made any contributions to the Deferred Compensation Plan on behalf of any Named Executive Officer. No above-market or preferential earnings have ever been paid on any compensation deferred under the Deferred Compensation Plan.

Executive Compensation Action Taken After Year-End

        In February 2011,January 2012, the Compensation Committee set 20112012 salaries for our Named Executive Officers. After ten years of service without any salary or bonus, Patrick Byrne, our Chief Executive Officer, agreed to accept a salary of $100,000 for 2011.2012. During the

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ten years prior to 2011, Dr. Byrne had refused to accept any salary, and he has never accepted any bonus. The Compensation Committee maintained salaries for the other Named Executive Officers at the same rates paid insince 2010, as follows: Mr. Johnson: $350,000; Mr. Chesnut: $300,000; Ms. Simon: $300,000; Mr. Peterson: $300,000; and Mr. Peterson:Tryon: $300,000. At the same time as discussed above, the Compensation Committee approved the recommendation of2011 bonus payments to the Named Executive Officers that they be paidpursuant to the Company's 2011 Bonus Plan as follows: Mr. Johnson: $18,652; Mr. Chesnut: $15,543; Ms. Simon: $15,543; Mr. Peterson: $15,543; and Mr. Tryon: $15,543. Dr. Byrne declined to participate in the 2011 Bonus Plan. In setting 2012 compensation for the Named Executive Officers, the Committee reviewed data the Company obtained from Strategic Compensation Services, Inc. to provide industry comparisons. The information reviewed had no bonuses relatingeffect on the decisions to 2010.hold executive salaries constant in 2012.

        In February 2011January 2012 the Compensation Committee also approved the grant of restricted stock units under the Company's 2005 Equity Incentive Plan to employees of the Company, including the Named Executive Officers. The number of restricted stock units granted to Named Executive Officers were as follow:follows: Dr. Byrne: 15,000;45,000; Mr. Johnson: 15,000;40,000; Mr. Chesnut: 15,000;35,000; Ms. Simon: 15,000;35,000; Mr. Peterson: 35,000; and Mr. Peterson: 15,000.Tryon: 35,000. Restricted stock units vest over a three-year period commencing on the date of grant at the rate of 25% at the end of year one, 25% at the end of year two, and 50% at the end of year three.

        In February 2011January 2012 the Compensation Committee also approved a bonus pool plan (the "2011"2012 Bonus Plan"). The bonus pool plan (the "2011"2012 Bonus Plan") is a discretionary bonus pool plan, subject to adjustment, upward or downward, by the Compensation Committee after 20112012 results are available. Substantially all employees ofThe 2012 Bonus Plan is a Company-wide plan for key contributors to the Company are expected to be eligible to participate in any bonuses ultimately paid under the 2011 Bonus Plan.Company's 2012 results. The total bonus pool under the 20112012 Bonus Plan is expected to be an amount equal to 20%33% of post-bonusa "Measurement Amount", with 20%33% of the pool expected to be allocated to the members of the executivemanagement team. The executivemanagement team consists of approximately 18 executives,15 officers, including the Named Executive Officers. For purposes of the 20112012 Bonus

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Plan, the term "Measurement Amount" means net income adjusted for depreciation and amortization, stock-based compensation expenses, capital structure expenses, expenses incurred in connection with our prime broker litigation and related matters, capital expenditures, restructuring charges, and other miscellaneous expenses. Unless the Measurement Amount is at least $19 million in 2012, no bonuses are expected to be payable under the 2012 Bonus Plan. The 20112012 Bonus Plan is not based on achieving any particular target, and the amounts, if any, payable to each of the Named Executive Officers are not determinable at present. However, if the actual amount of the post-bonus "Measurement Amount" were $30 million, the Named Executive Officers would be expected to receive the following amounts: Dr. Byrne: $0 (because he has declined to participate in the bonus plan);$119,790; Mr. Johnson: $120,000;$119,790; Mr. Chesnut: $100,000;$89,843; Ms. Simon: $100,000;$89,843; Mr. Peterson: $89,843; and Mr. Peterson: $100,000;Tryon: $89,843; subject, in each case, to adjustment by the Compensation Committee. These amounts were estimated based on assumptions that the Named Executive Officers would each receive the following percentages of the total executive team bonus pool: Dr. Byrne: 0%10%; Mr. Johnson 10%; Mr. Chesnut 8%7.5%; Ms. Simon 8%7.5%; Mr. Peterson 7.5%; and Mr. Peterson 8%Tryon: 7.5%. These percentages are estimates only. Neither these percentages nor the actual amount, if any, of any bonus pool or bonus that may be paid under the bonus pool has been or can be determined at present. The actual amounts that were paid to the Named Executive Officers under the 2011 Bonus Plan were Dr. Byrne: $0; Mr. Johnson: $18,652; Mr. Chesnut: $15,543; Ms. Simon: $15,543; Mr. Peterson: $15,543; and Mr. Tryon: $15,543.

Timing of Equity Awards

        We did not grant any stock options to any of our Named Executive Officers during 2010.2011. We do not have any program, plan or practice to time option grants, restricted stock unit awards or any other equity awards to our Named Executive Officers or to any other employee in coordination with the release of material non-public information. The Company's Board of Directors and Board committees,

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including the Compensation Committee, normally schedule their regular meetings at least a year in advance. Meetings of the Compensation Committee are generally held in connection with the regularly scheduled Board meetings. The meetings are scheduled in an effort to meet a number of different timing objectives, including the review of financial results and the review of press releases and filings containing financial results. If the Compensation Committee approves equity awards at future regularly scheduled meetings, those awards may be made shortly before or after the public release of financial results or other material information. However, if that were to occur, it would be as a result of the fact that the Compensation Committee holds its meetings in connection with the Board meetings, not as a result of a program, plan or practice to time option grants or other equity awards. We also do not set the grant date of any equity awards to new executives in coordination with the release of material non-public information, and we have not timed, and do not plan to time, the release of material non-public information for the purpose of affecting the value of executive compensation.

Severance And Change of Control Arrangements

        None of our executive officers has any contractual right to any severance or change of control payments under any employment or severance agreement. Our executive officers hold options and restricted stock units issued under our 2005 Equity Incentive Plan, and the vesting of awards issued under the plan may be accelerated, under certain circumstances, upon or in connection with a change of control of the Company or upon the termination of the employment of the holder within a period of time after a change of control has occurred. The 2005 Equity Incentive Plan provides that in the event of a merger or change of control (as defined in the plan) outstanding awards shall be assumed by the successor or an equivalent award shall be substituted, or the award shall vest and the participant will have the right to exercise the award. In addition, as described above, in December 2009 we adopted theour Deferred Compensation Plan which allows participants to defer receipt of compensation otherwise payable to them under our existing compensation plans, and also permits us to make discretionary contributions to participants' accounts. Participants are fully vested in all amounts deferred and any earnings or losses on those deferrals at all times. Upon termination of service due to retirement, disability or death, a participant becomes fully vested in any additional amounts, including any discretionary contributions we make, credited to his or her account. To date, we have not made any contributions to the Deferred Compensation Plan on behalf of any Named Executive Officer.

Hedging Policy

        The Company has a policy prohibiting directors, officers and other employees and members of their immediate families from engaging in short sales of the Company's stock or otherwise engaging in any transaction intended to hedge against or profit from any decrease in the market value of the Company's securities.

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COMPENSATION COMMITTEE REPORT

        The Compensation Committee has reviewed the Compensation Discussion and Analysis and discussed it with management. Based on its review and discussions with management, the Compensation Committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in the Company's 20112012 proxy statement and incorporated by reference into the Company's Annual Report on Form 10-K for 2010.2011.

Barclay F. Corbus (Chair)
Allison H. Abraham
Samuel A. Mitchell
Joseph J. Tabacco, Jr.

Compensation Paid to Executive Officers

        The following table sets forth information for the three years ended December 31, 20102011 concerning the compensation for services in all capacities to the Company and its subsidiaries of our principal executive officer, our principal financial officer, and our other threefour most highly compensated executive officers, calculated in accordance with the SEC's rules. We refer to these individuals throughout this proxy statement as the "Named Executive Officers."

SUMMARY COMPENSATION TABLE

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Grants of Plan-Based Awards

        The following table sets forth information concerning grants of awards pursuant to plans made to the Named Executive Officers during the year ended December 31, 2010.2011.

GRANTS OF PLAN-BASED AWARDS

Outstanding Equity Awards at Fiscal Year-End

        The following table sets forth information concerning outstanding equity awards held by each Named Executive Officer as of December 31, 2010.2011.

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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END(1)

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Option Exercises and Stock Vested in 20102011

        The following table sets forth information concerning stock awards that vested during the last fiscal year with respect to the named executive officers.Named Executive Officers. No executive officerNamed Executive Officer exercised any options during 2010.2011.

OPTION EXERCISES AND STOCK VESTED

Nonqualified Deferred Compensation Plan

        The following table sets forth information concerning our nonqualified deferred compensation plan for senior management. The Deferred Compensation Plan allows participants to defer receipt of compensation otherwise payable to them under our existing compensation plans, and also permits us to make discretionary contributions to participants' accounts. We may, though we have no obligation to, make discretionary contributions on behalf of a participant in the Deferred Compensation Plan, in such form and amount as we deem appropriate. To date, we have not made any contributions to the Deferred Compensation Plan on behalf of any Named Executive Officer. Participants are permitted to select from a limited number of investment alternatives, which are identified below. The investment alternatives were selected by the Company. A participant may change his or her selection of investment funds no more than six (6) times each year. Eligible members of senior management, including the Named Executive Officers, may defer receipt of their compensation, including up to 50% of their salaries and up to 90% of their bonuses. Subject to plan restrictions and subject to prior distribution as a result of retirement, separation from service for other reasons, disability or death, and subject to other restrictions, each participant designates the timing of his or her distributions and whether payment is to be made in a lump sum or in equal annual installments over a period of up to five years. Subject to various restrictions, a participant may periodically change the timing of his or her distributions.