<SUBMISSION>
<ACCESSION-NUMBER>0001047469-05-004629
<TYPE>8-K
<PUBLIC-DOCUMENT-COUNT>2
<PERIOD>20050218
<ITEMS>1.01
<ITEMS>9.01
<FILING-DATE>20050224
<DATE-OF-FILING-DATE-CHANGE>20050224
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>OVERSTOCK COM INC
<CIK>0001130713
<ASSIGNED-SIC>7389
<IRS-NUMBER>870634302
<STATE-OF-INCORPORATION>UT
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>8-K
<ACT>34
<FILE-NUMBER>000-49799
<FILM-NUMBER>05638252
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>6322 SOUTH 3000 EAST
<STREET2>STE 100
<CITY>SALT LAKE CITY
<STATE>UT
<ZIP>84121
<PHONE>8019473100
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>6322 SOUTH 3000 EAST
<STREET2>STE 100
<CITY>SALT LAKE CITY
<STATE>UT
<ZIP>84121
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>a2152600z8-k.htm
<DESCRIPTION>8-K
<TEXT>
<HTML>
<HEAD>
</HEAD>
<BODY BGCOLOR="#FFFFFF" LINK=BLUE  VLINK=PURPLE>
<BR>
<FONT SIZE=3 ><A HREF="#05DEN1310_1">QuickLinks</A></FONT>
<font size=3> -- Click here to rapidly navigate through this document</font>

<P><FONT SIZE=2>
<hr noshade width=100% align=left size=4>
<hr noshade width=100% align=left size=1> </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=5><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION<BR>  </B></FONT><FONT SIZE=2><B>Washington, D.C. 20549  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=5><B>FORM 8-K  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=3><B>CURRENT REPORT<BR>  </B></FONT><FONT SIZE=2><B>Pursuant to Section&nbsp;13 or 15(d)&nbsp;of<BR>
the Securities Exchange Act of 1934  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B> February&nbsp;18, 2005<BR>  </B></FONT><FONT SIZE=2>Date of Report (date of earliest event reported) </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=5><B>Overstock.com,&nbsp;Inc.<BR>  </B></FONT><FONT SIZE=2>(Exact name of Registrant as specified in its charter) </FONT></P>

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<DIV ALIGN="CENTER"><TABLE WIDTH="72%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="31%" ALIGN="CENTER"><FONT SIZE=2><B>Delaware</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="31%" ALIGN="CENTER"><FONT SIZE=2><B>000-49799</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="31%" ALIGN="CENTER"><FONT SIZE=2><B>87-0634302</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="31%" ALIGN="CENTER"><FONT SIZE=2>(State or other jurisdiction of<BR>
incorporation or organization)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="31%" ALIGN="CENTER"><FONT SIZE=2>(Commission<BR>
File Number)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="31%" ALIGN="CENTER"><FONT SIZE=2>(I.R.S. Employer<BR>
Identification Number)</FONT></TD>
</TR>
</TABLE></DIV>
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<P ALIGN="CENTER"><FONT SIZE=2><B>6322 South 3000 East, Suite&nbsp;100<BR>
Salt Lake City, Utah 84121<BR>  </B></FONT><FONT SIZE=2>(Address of principal executive offices) </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>(801) 947-3100<BR>  </B></FONT><FONT SIZE=2>(Registrant's telephone number, including area code) </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>(Former
name or former address, if changed since last report) </FONT></P>


<P><FONT SIZE=2>Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2><FONT FACE="WINGDINGS">&#111;</FONT></FONT></DT><DD><FONT SIZE=2>Written
communications pursuant to Rule&nbsp;425 under the Securities Act (17&nbsp;CFR&nbsp;230.425)
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><FONT FACE="WINGDINGS">&#111;</FONT></FONT></DT><DD><FONT SIZE=2>Soliciting
material pursuant to Rule&nbsp;14a-12 under the Exchange Act (17&nbsp;CFR&nbsp;240.14a-12)
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><FONT FACE="WINGDINGS">&#111;</FONT></FONT></DT><DD><FONT SIZE=2>Pre-commencement
communications pursuant to Rule&nbsp;14d-2(b) under the Exchange Act
(17&nbsp;CFR&nbsp;240.14d-2(b))
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><FONT FACE="WINGDINGS">&#111;</FONT></FONT></DT><DD><FONT SIZE=2>Pre-commencement
communications pursuant to Rule&nbsp;13e-4(c) under the Exchange Act
(17&nbsp;CFR&nbsp;240.13e-4(c)) </FONT></DD></DL>
<BR>

<P><FONT SIZE=2><hr
noshade width=100% align=left size=1>
<hr noshade width=100% align=left size=4> </FONT></P>

<HR NOSHADE>
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NAME="page_dc1310_1_2"> </A> </FONT></P>

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<P><FONT SIZE=2><A
NAME="dc1310_item_1.01_entry_into_a_material_definitive_agreement"> </A>
<A NAME="toc_dc1310_1"> </A>
<BR></FONT><FONT SIZE=2><B>Item 1.01 Entry into a Material Definitive Agreement    <BR>    </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February&nbsp;18, 2005, in connection with its previously announced $50,000,000 share repurchase program, Overstock.com,&nbsp;Inc. (the "Company") entered
into a generally non-binding term sheet with Lehman Brothers OTC Derivatives&nbsp;Inc. ("Lehman Brothers OTC"). The term sheet contemplates a series of structured stock repurchase
transactions between the Company and Lehman Brothers OTC that will allow the Company to determine, in advance, the prices at which it may repurchase up to 1,000,000 shares of its common stock in
transactions to be effected by Lehman Brothers OTC from time to time. Although the term sheet does not require the Company to enter into any of the contemplated transactions, it does require the
Company to indemnify Lehman Brothers OTC against losses, claims, damages, liabilities and expenses Lehman Brothers OTC incurs under certain circumstances if the Company (i)&nbsp;does not enter into
the transactions contemplated by the term sheet, including the cost to Lehman Brothers OTC of unwinding any hedging transactions Lehman Brothers OTC may enter into in preparation for the execution of
the transactions contemplated by the term sheet, or (ii)&nbsp;fails to execute definitive documentation relating to the transactions. The obligations of Lehman Brothers OTC are guaranteed by Lehman
Brothers Holdings&nbsp;Inc. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
February&nbsp;18, 2005 and February&nbsp;22, 2005 the Company entered into several structured stock repurchase transactions with Lehman Brothers OTC as contemplated by the term
sheet and by discussions between the Company and Lehman Brothers OTC, pursuant to which the Company may be required to purchase up to a maximum of 750,000 shares of its common stock at certain
settlement dates. In connection with these repurchase transactions, the Company has provided approximately $30.8&nbsp;million to Lehman Brothers OTC. Upon settlement, we will either have our capital
investment returned with a premium or receive shares of our common stock, depending on whether the market price of our common stock is above or below a pre-determined price agreed in
connection with each such transaction. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
the extent that Lehman Brothers OTC delivers shares of common stock to the Company as a result of the transactions described above, the aggregate amount the Company pays or paid to
Lehman Brothers OTC for the repurchase of the shares as a result of these transactions will reduce the amount the Company might otherwise have spent to directly repurchase shares from time to time
under its stock repurchase program. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company has previously entered into unrelated agreements with Lehman Brothers&nbsp;Inc. in connection with debt and equity financings. </FONT></P>

<P><FONT SIZE=2><A
NAME="dc1310_item_9.01_financial_statements_and_exhibits"> </A>
<A NAME="toc_dc1310_2"> </A>
<BR></FONT><FONT SIZE=2><B>Item 9.01 Financial Statements and Exhibits    <BR>    </B></FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(c)</FONT></DT><DD><FONT SIZE=2>Exhibits.
</FONT></DD></DL>

<P><FONT SIZE=2>Exhibit&nbsp;99.1
Term sheet executed February&nbsp;18, 2005 with Lehman Brothers OTC Derivatives&nbsp;Inc. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

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NAME="page_jc1310_1_3"> </A> </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="jc1310_signature"> </A>
<A NAME="toc_jc1310_1"> </A>
<BR></FONT><FONT SIZE=2><B>SIGNATURE    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized. </FONT></P>

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<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
OVERSTOCK.COM,&nbsp;INC.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="43%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>DAVID K. CHIDESTER</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> David K. Chidester<BR>
Vice President, Finance</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2><BR>
Date:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="43%"><FONT SIZE=2><BR>
February&nbsp;24, 2005</FONT></TD>
</TR>
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<P ALIGN="CENTER"><FONT SIZE=2>3</FONT></P>

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<BR>
<P><br><A NAME="05DEN1310_1">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<UL>
<FONT SIZE=2><A HREF="#toc_dc1310_1">Item 1.01 Entry into a Material Definitive Agreement</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_dc1310_2">Item 9.01 Financial Statements and Exhibits</A></FONT><BR>
</UL>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_jc1310_1">SIGNATURE</A></FONT><BR>
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>a2152600zex-99_1.htm
<DESCRIPTION>EX 99.1
<TEXT>
<HTML>
<HEAD>
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<P ALIGN="RIGHT"><FONT SIZE=2><B>Exhibit 99.1  </B></FONT></P>

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<TD WIDTH="49%"><FONT SIZE=2><B>212-526-3699</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%" ALIGN="RIGHT"><FONT SIZE=2><B>Lehman Brothers<BR>
Equity Derivatives</B></FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ma1310_call_spread_transaction_summar__cal02235"> </A>
<A NAME="toc_ma1310_1"> </A>
<BR></FONT><FONT SIZE=2><B>Call Spread Transaction<BR>  </B></FONT><FONT SIZE=2><I>Summary of Indicative Terms as of 02/18/05    <BR>    </I></FONT></P>

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<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I>Seller:</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="74%"><FONT SIZE=2>Lehman Brothers OTC Derivatives&nbsp;Inc.<BR>
(Guaranteed by Lehman Brothers Holdings&nbsp;Inc.)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I><BR>
Buyer:</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="74%"><FONT SIZE=2><BR>
Overstock.com,&nbsp;Inc. ("Client")</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I><BR>
Agent:</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="74%"><FONT SIZE=2><BR>
Lehman Brothers&nbsp;Inc. ("LBI") is acting as agent on behalf of Lehman Brothers OTC Derivatives&nbsp;Inc. ("LOTC") and the Client for this Transaction. LBI has no obligations, by guarantee, endorsement or otherwise, with respect to the performance
of this Transaction by LOTC.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I><BR>
Trade Dates:</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="74%"><FONT SIZE=2><BR>
Each date on or after </FONT><FONT SIZE=2><B>TBD</B></FONT><FONT SIZE=2> on which the Buyer notifies the Seller that it desires to execute a portion of the Transaction (a "Tranche"), such notice (a "Notice") to contain (i)&nbsp;the Number of Lower
Call Options and the Number of Upper Call Options subject to such Tranche (in each case which shall be a multiple of 100,000), and (ii)&nbsp;the Expiration Date of such Tranche.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I><BR>
Selected Security:</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="74%"><FONT SIZE=2><BR>
Class&nbsp;A Common stock of Overstock.com,&nbsp;Inc. (Bloomberg Ticker: "</FONT><FONT SIZE=2><B>OSTK</B></FONT><FONT SIZE=2>")</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I><BR>
Exercise Style:</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="74%"><FONT SIZE=2><BR>
European</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I><BR>
Expiration Date:</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="74%"><FONT SIZE=2><BR>
For each Tranche as provided by the Buyer in the applicable Notice</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I><BR>
Number of Lower Call Options:</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="74%"><FONT SIZE=2><BR>
For each Tranche, as provided by the Buyer in the applicable Notice; </FONT><FONT SIZE=2><I>provided that</I></FONT><FONT SIZE=2> the total Number of Lower Call Options subject to all Tranches shall not exceed 1,000,000; </FONT><FONT SIZE=2><I>and
provided further that</I></FONT><FONT SIZE=2>, the Number of Lower Call Options shall equal the Number of Upper Call Options.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I><BR>
Number of Upper Call Options:</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="74%"><FONT SIZE=2><BR>
For each Tranche, as provided by the Buyer in the applicable Notice; </FONT><FONT SIZE=2><I>provided that</I></FONT><FONT SIZE=2> the total Number of Upper Call Options subject to all Tranches shall not exceed 1,000,000.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I><BR>
Lower Strike Price:</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="74%"><FONT SIZE=2><BR>
For each Tranche, 0.00% of the price of the Selected Security at which the Tranche is established on the applicable Trade Date.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I><BR>
Upper Stike Price:</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="74%"><FONT SIZE=2><BR>
For each Tranche, a percentage of the price of the Selected Security at which the Tranche is established on the applicable Trade Date as provided by the Buyer to the Seller.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I><BR>
Premium:</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="74%"><FONT SIZE=2><BR>
For each Tranche, (i)&nbsp;a percentage of the price of the Selected Security at which the Tranche is established on the applicable Trade Date as </FONT><FONT SIZE=2><I>multipled by</I></FONT><FONT SIZE=2> (ii)&nbsp;the Number of Lower Call Options
subject to such Tranche as provided by the Buyer to the Seller</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I><BR>
Premium Payment Date:</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="74%"><FONT SIZE=2><BR>
For each Tranche, Two Exchange Business Days after the applicable Trade Date</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I><BR>
Settlement Date:</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="74%"><FONT SIZE=2><BR>
For each Tranche, Three Exchange Business Days after the applicable Expiration Date</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="74%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
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<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I><BR>
Settlement Type:</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="74%"><FONT SIZE=2><BR>
For each Tranche, Cash, Physical, or Net Share Settlement at the Buyer's discretion, with written notice of settlement election required at least two Exchange Business Days prior to the applicable Expiration Date. If no notice is given, Physical
Settlement shall apply to such Tranche.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I><BR>
Option Payout:</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="74%"><BR><FONT SIZE=2><B>For each Tranche, if Cash Settlement is applicable:</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I><BR>
&nbsp;</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="74%"><FONT SIZE=2><BR>
If the Closing Price of the Selected Security on the Expiration Date ("Settlement Price") is </FONT><FONT SIZE=2><B><I>greater than </I></B></FONT><FONT SIZE=2>the Lower Strike Price and </FONT><FONT SIZE=2><B><I>less than </I></B></FONT><FONT
SIZE=2>the Upper Strike Price, the Seller will pay the Buyer (the difference between the Settlement Price and the Lower Strike Price) multiplied by the Number of Lower Call Options.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I><BR>
&nbsp;</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="74%"><FONT SIZE=2><BR>
If the Closing Price of the Selected Security on the Expiration Date ("Settlement Price") is </FONT><FONT SIZE=2><B><I>greater than or equal to </I></B></FONT><FONT SIZE=2>the Upper Strike Price, the Seller will pay the Buyer the difference between
((the Settlement Price less the Lower Strike Price) multiplied by the Number of Lower Call Options)) and ((the Settlement Price less the Upper Strike Price) multiplied by the Number of Upper Call Options)).</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I><BR>
&nbsp;</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="74%"><BR><FONT SIZE=2><B>For each Tranche, if Physical Settlement is applicable:</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I><BR>
&nbsp;</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="74%"><FONT SIZE=2><BR>
If the Closing Price of the Selected Security on the Expiration Date ("Settlement Price") is </FONT><FONT SIZE=2><B><I>greater than </I></B></FONT><FONT SIZE=2>the Lower Strike Price and </FONT><FONT SIZE=2><B><I>less than </I></B></FONT><FONT
SIZE=2>the Upper Strike Price, the Seller will deliver to the Buyer a number of Selected Securities equal to the Number of Upper Call Options</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I><BR>
&nbsp;</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="74%"><FONT SIZE=2><BR>
If the Closing Price of the Selected Security on the Expiration Date ("Settlement Price") is </FONT><FONT SIZE=2><B><I>greater than or equal to </I></B></FONT><FONT SIZE=2>the Upper Strike Price, on the relevant Settlement Date the Seller will pay
the Buyer the Upper Strike Price multiplied by the Number of Upper Call Options</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I><BR>
&nbsp;</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="74%"><BR><FONT SIZE=2><B>For each Tranche, if Net Share Settlement is applicable:</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I><BR>
&nbsp;</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="74%"><FONT SIZE=2><BR>
If the Closing Price of the Selected Security on the Expiration Date ("Settlement Price") is </FONT><FONT SIZE=2><B><I>greater than </I></B></FONT><FONT SIZE=2>the Lower Strike Price and </FONT><FONT SIZE=2><B><I>less than </I></B></FONT><FONT
SIZE=2>the Upper Strike Price, on the relevant Settlement Date the Seller will deliver to the Buyer a number of Selected Securities equal to ((the difference between the Settlement Price and the Lower Strike Price) divided by the Settlement Price)
multiplied by (the Number of Lower Call Options).</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I><BR>
&nbsp;</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="74%"><FONT SIZE=2><BR>
If the Closing Price of the Selected Security on the Expiration Date ("Settlement Price") is </FONT><FONT SIZE=2><B><I>greater than or equal to </I></B></FONT><FONT SIZE=2>the Upper Strike Price, on the relevant Settlement Date the Seller will
deliver to the Buyer a number of Selected Securities equal to the difference between ((the Settlement Price less the Lower Strike Price) multiplied by the Number of Lower Call Options) and ((the Settlement Price less the Upper Strike Price)
multiplied by the Number of Upper Call Options), divided by the Settlement Price</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="74%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I><BR>
Dividends:</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="74%"><FONT SIZE=2><BR>
For each Tranche, if, at any time during the period from but including three Exchange Business Days from the Trade Date to but excluding three Exchange Business Days after the Expiration Date (the "Trade Period"), a record date occurs with respect to
a dividend on the Selected Security, then the Dividend Amount for such record date shall equal the Seller's Hedging Shares, determined as of the Exchange Business Day immediately prior to the date that the Selected Security has commenced trading
ex-dividend, multiplied by the declared gross cash dividend amount</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I><BR>
Payment of Dividend Amount:</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="74%"><FONT SIZE=2><BR>
The Seller shall pay the Buyer the Dividend Amount on the record date.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I><BR>
Additional Provisions:</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="74%"><FONT SIZE=2><BR>
The Calculation Agent may terminate or adjust this Transaction if a Nationalization, Insolvency, Merger or Tender Event (10% threshold) occurs with respect to the Selected Security.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I><BR>
&nbsp;</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="74%"><FONT SIZE=2><BR>
The Buyer's entry into the Transaction complies with and is not in any way limited by any contractual, legal, regulatory or other restrictions to which the Buyer may be subject.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I><BR>
&nbsp;</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="74%"><FONT SIZE=2><BR>
The Buyer represents that each of its required filings under all applicable securities laws have been filed, it is not entering into this transaction while in possession of any material non-public information, and it is not limited (by law, contract
or policy) from effecting any of the settlement types hereunder.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I><BR>
&nbsp;</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="74%"><FONT SIZE=2><BR>
Notwithstanding anything in the Master Agreement to the contrary, Second Method and Loss shall apply.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I><BR>
Calculation Agent:</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="74%"><FONT SIZE=2><BR>
Lehman Brothers Inc.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I><BR>
Documentation:</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="74%"><FONT SIZE=2><BR>
Signed Term Sheet, Transaction Confirmation, and an executed ISDA Master Agreement</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="24%"><FONT SIZE=2><I><BR>
Additional Acknowledgement:</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="74%"><FONT SIZE=2><BR>
The Buyer acknowledges and agrees that the terms set forth herein are indicative and are subject to market conditions as of the date hereof. If due to market conditions at the time of actual hedge execution, the Seller's entire hedge cannot be
achieved consistent with the indicative terms herein, then the Buyer acknowledges and agrees that the final terms (i) will vary from those set out herein and (ii)&nbsp;may include an additional payment obligation of the Buyer to reflect any increased
costs to the Seller.</FONT></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By
signing below, Client acknowledges and agrees that, notwithstanding the indicative nature of the other provisions of this term sheet, LOTC may engage in hedging activities with
respect to the proposed transaction described herein and otherwise prepare for the execution of such transaction, in each case as LOTC determines appropriate. Client agrees to provide LOTC the
following indemnity in order to induce LOTC to continue to consider such transaction. If Client does not enter into the proposed transaction described herein with respect to the maximum "Number of
Lower Call Options" and "Number of Upper Call Options" above (or such lesser number as LOTC determines), or does not execute, promptly after the Trade Date, the definitive documentation described
under "Documentation" above, Client agrees to indemnify LOTC for any and all losses, claims, damages, liabilities and expenses incurred by LOTC in good faith and arising out of or relating to the
proposed transaction, which may include the cost to LOTC of unwinding any related hedging transactions. This provision shall be governed by and construed in accordance with the internal laws of the
State of New York. The parties acknowledge and agree that, other than this provision, this term sheet is indicative only and not binding </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>3</FONT></P>

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<A NAME="page_ma1310_1_4"> </A>
<BR>

<P><FONT SIZE=2>on
the parties. Capitalized terms used herein and not otherwise defined herein shall have the meanings provided to them in the 2000 ISDA Definitions and the 2002 ISDA Equity Definitions (as
applicable) in each case as published by the International Swaps and Derivatives Association,&nbsp;Inc. </FONT></P>

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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=3><BR><FONT SIZE=2><B>Accepted and Agreed:</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><B><BR>
&nbsp;</B></FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD WIDTH="40%"><FONT SIZE=2><B><BR>
&nbsp;</B></FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=3 VALIGN="TOP"><BR><FONT SIZE=2> LEHMAN BROTHERS OTC DERIVATIVES&nbsp;INC.,<BR>
By its agent, Lehman Brothers&nbsp;Inc.</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3 VALIGN="TOP"><FONT SIZE=2><BR>
OVERSTOCK.COM,&nbsp;INC.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="8%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="40%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>SCOTT E. WILLOUGHBY</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="40%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>DAVID K. CHIDESTER</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="8%"><FONT SIZE=2>Name:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="40%"><FONT SIZE=2>Scott E. Willoughby</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Name:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="40%"><FONT SIZE=2>David K. Chidester</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="8%"><FONT SIZE=2>Title:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="40%"><FONT SIZE=2>Senior Vice President</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Title:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="40%"><FONT SIZE=2>Vice President, Finance</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="40%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="40%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>JONATHAN E. JOHNSON III</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="40%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Name:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="40%"><FONT SIZE=2>Jonathan E. Johnson III</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="40%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Title:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="40%"><FONT SIZE=2>Vice President, Legal and Corproate Affairs</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

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<P><FONT SIZE=2>All
term sheets are indicative only. Actual terms are subject to confirmation by Lehman Brothers OTC Derivatives&nbsp;Inc. Clients are advised to make an independent review and reach their own
conclusions regarding the legal, credit, tax and accounting aspects of this transaction relating to their assets, liabilities, or other risk management objectives and risk tolerance. Although the
indicative information set forth is reflective of the terms, as of the specified date under which Lehman Brothers believes a transaction might be structured, no assurance can be given that such a
transaction could, in fact, be executed at the specific levels indicated. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>4</FONT></P>

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<BR>
<P><br><A NAME="05DEN1310_2">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_ma1310_1">Call Spread Transaction Summary of Indicative Terms as of 02/18/05</A></FONT><BR>
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