<SUBMISSION>
<ACCESSION-NUMBER>0001047469-07-002450
<TYPE>DEF 14A
<PUBLIC-DOCUMENT-COUNT>3
<PERIOD>20070515
<FILING-DATE>20070402
<DATE-OF-FILING-DATE-CHANGE>20070402
<EFFECTIVENESS-DATE>20070402
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>OVERSTOCK.COM, INC
<CIK>0001130713
<ASSIGNED-SIC>5961
<IRS-NUMBER>870634302
<STATE-OF-INCORPORATION>UT
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>DEF 14A
<ACT>34
<FILE-NUMBER>000-49799
<FILM-NUMBER>07736700
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>6350 SOUTH 3000 EAST
<CITY>SALT LAKE CITY
<STATE>UT
<ZIP>84121
<PHONE>8019473100
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>6350 SOUTH 3000 EAST
<CITY>SALT LAKE CITY
<STATE>UT
<ZIP>84121
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>OVERSTOCK COM INC
<DATE-CHANGED>20001227
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>a2176990zdef14a.htm
<DESCRIPTION>DEF 14A
<TEXT>
<HTML>
<HEAD>
</HEAD>
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<BR>
<P><FONT SIZE=3 >
Use these links to rapidly review the document<BR>
<A HREF="#bg14601_table_of_contents">  TABLE OF CONTENTS</A><BR></font>
</P>
<P ALIGN="CENTER"><FONT SIZE=2><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION<BR>
Washington, D.C. 20549  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=4><B> SCHEDULE 14A</B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>Proxy
Statement Pursuant to Section 14(a) of<BR>
the Securities Exchange Act of 1934 (Amendment No.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;) </FONT></P>

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<TR VALIGN="TOP">
<TD COLSPAN=3><FONT SIZE=2>Filed by the Registrant <FONT FACE="WINGDINGS">&#253;</FONT></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3><BR><FONT SIZE=2>Filed by a Party other than the Registrant <FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3><FONT SIZE=2><BR>
Check the appropriate box:</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2><BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="95%"><FONT SIZE=2><BR>
Preliminary Proxy Statement</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2><BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="95%"><BR><FONT SIZE=2><B>Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2><BR>
<FONT FACE="WINGDINGS">&#253;</FONT></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="95%"><FONT SIZE=2><BR>
Definitive Proxy Statement</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2><BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="95%"><FONT SIZE=2><BR>
Definitive Additional Materials</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2><BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="95%"><FONT SIZE=2><BR>
Soliciting Material Pursuant to &sect;240.14a-12<BR></FONT>
</TD>
</TR>
</TABLE>
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<TD COLSPAN=5 ALIGN="CENTER"><BR><FONT SIZE=2><B>Overstock.com, Inc.</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=5 ALIGN="CENTER"><HR NOSHADE><FONT SIZE=2> (Name of Registrant as Specified In Its Charter)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=5 ALIGN="CENTER"><BR><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=5 ALIGN="CENTER"><HR NOSHADE><FONT SIZE=2> (Name of Person(s) Filing Proxy Statement, if other than the Registrant)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="89%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=5><FONT SIZE=2>Payment of Filing Fee (Check the appropriate box):</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2><BR>
<FONT FACE="WINGDINGS">&#253;</FONT></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
No fee required.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2><BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and&nbsp;0-11.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>(1)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="89%"><FONT SIZE=2>Title of each class of securities to which transaction applies:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>(2)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="89%"><FONT SIZE=2>Aggregate number of securities to which transaction applies:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>(3)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="89%"><FONT SIZE=2>Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>(4)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="89%"><FONT SIZE=2>Proposed maximum aggregate value of transaction:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>(5)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="89%"><FONT SIZE=2>Total fee paid:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2><BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
Fee paid previously with preliminary materials.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2><BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
Check box if any part of the fee is offset as provided by Exchange Act Rule&nbsp;0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or
Schedule and the date of its filing.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
(1)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="89%"><FONT SIZE=2><BR>
Amount Previously Paid:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>(2)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="89%"><FONT SIZE=2>Form, Schedule or Registration Statement No.:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>(3)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="89%"><FONT SIZE=2>Filing Party:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>(4)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="89%"><FONT SIZE=2>Date Filed:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
</TABLE>
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<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=1,EFW="2176990",CP="OVERSTOCK.COM, INC.",DN="1",CHK=1015360,FOLIO='blank',FILE='DISK111:[07ZBB1.07ZBB14601]BA14601A.;4',USER='MBRADT',CD='28-MAR-2007;12:02' -->
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<P ALIGN="CENTER"><FONT SIZE=2><B>
<IMG SRC="g574437.jpg" ALT="LOGO" WIDTH="316" HEIGHT="70">
  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>6350 South 3000 East<BR>
Salt Lake City, Utah 84121  </B></FONT></P>

<HR NOSHADE ALIGN="CENTER" WIDTH="120">
<P ALIGN="CENTER"><FONT SIZE=2><B>NOTICE OF ANNUAL MEETING OF STOCKHOLDERS<BR>
To Be Held at 1:00&nbsp;p.m. on May&nbsp;15, 2007  </B></FONT></P>

<P><FONT SIZE=2>Dear
Fellow Stockholders: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
cordially invite you to attend the 2007 Annual Meeting of Stockholders of Overstock.com,&nbsp;Inc. (the "Company"). The meeting will be held at 1:00&nbsp;p.m. on Tuesday,
May&nbsp;15, 2007, at the Company's warehouse located at 1455&nbsp;South 5500 West, Salt Lake City, Utah&nbsp;84104, for the following purposes: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>1.</FONT></DT><DD><FONT SIZE=2>To
elect one Class&nbsp;II director of the Company to serve a term of three (3)&nbsp;years and hold office until his successor has been elected and qualified or until his earlier
resignation or removal. A majority of the independent members of the Board of Directors has recommended, and the Company's Board of Directors intends to present, Jason C. Lindsey for
re-election to the Board;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>2.</FONT></DT><DD><FONT SIZE=2>To
approve an amendment of the Company's Performance Share Plan to allow the Company to make payments under the Plan in the form of common stock and to qualify the plan as a
"performance-based" plan for purposes of Section&nbsp;162(m) of the Internal Revenue Code;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>3.</FONT></DT><DD><FONT SIZE=2>To
ratify the Audit Committee's selection of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for the fiscal year ending December&nbsp;31,
2007; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>4.</FONT></DT><DD><FONT SIZE=2>To
transact any other business properly coming before the Annual Meeting or any adjournments or postponements thereof. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These
proposals are discussed in more detail in the attached Proxy Statement. Please read the attached Proxy Statement carefully. Only stockholders who owned shares at the close of
business on March&nbsp;16, 2007 are entitled to attend and vote at the meeting or any adjournment of the meeting. A complete list of the stockholders of record of the Company on March&nbsp;16,
2007 will be available at the Company's principal executive offices at 6350 South 3000 East, Salt Lake City, Utah for at least ten days prior to the meeting. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Following
the meeting, we will report on our performance in 2006 and answer your questions. </FONT></P>

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<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="53%"><FONT SIZE=2>By Order of the Board of Directors,</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="53%"><BR><FONT SIZE=2><B>
<IMG SRC="g431731.jpg" ALT="SIGNATURE" WIDTH="331" HEIGHT="90">
 </B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="53%"><FONT SIZE=2>Jonathan E. Johnson III<BR>
Secretary</FONT></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2>Salt
Lake City, Utah<BR>
March&nbsp;30, 2007 </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>Whether or not you plan to attend the meeting, please complete, sign, date and return the accompanying Proxy Card in the enclosed self-addressed,
stamped envelope or, if available, follow the instructions for Internet or telephone voting on the Proxy Card.</B></FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=2,EFW="2176990",CP="OVERSTOCK.COM, INC.",DN="1",CHK=654784,FOLIO='blank',FILE='DISK111:[07ZBB1.07ZBB14601]BE14601A.;8',USER='FALVARE',CD='28-MAR-2007;17:03' -->
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_bg14601_1_1"> </A> </FONT></P>

<!-- TOC_END -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="bg14601_table_of_contents"> </A>
<BR></FONT><FONT SIZE=2><B>TABLE OF CONTENTS    <BR>    </B></FONT></P>

<P><FONT SIZE=2>
<A NAME="BG14601_TOC"></A> </FONT></P>

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<TABLE WIDTH="72%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="92%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=4 VALIGN="TOP"><A HREF="#de14601_proxy_statement"><FONT SIZE=2>PROXY STATEMENT</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=4 VALIGN="TOP"><A HREF="#de14601_questions_and_answers"><FONT SIZE=2>QUESTIONS AND ANSWERS</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=4 VALIGN="TOP"><A HREF="#de14601_proposals_to_be_voted_on_"><FONT SIZE=2>PROPOSALS TO BE VOTED ON</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="3%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2>1.</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP"><A HREF="#de14601_1._election_of_director"><FONT SIZE=2>ELECTION OF DIRECTOR</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="3%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2>2.</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP"><A HREF="#de14601_2._amendment_of_performance_share_plan."><FONT SIZE=2>AMENDMENT OF PERFORMANCE SHARE PLAN</FONT></A></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="3%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>3.</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="92%"><A HREF="#dg14601_3._ratification_of_selection_o__3._02988"><FONT SIZE=2>RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="3%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2>4.</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP"><A HREF="#dg14601_4._other_business"><FONT SIZE=2>OTHER BUSINESS</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=4 VALIGN="TOP"><A HREF="#dg14601_the_board"><FONT SIZE=2>THE BOARD</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="3%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 VALIGN="TOP"><A HREF="#dg14601_general"><FONT SIZE=2> General</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="3%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 VALIGN="TOP"><A HREF="#dg14601_board_and_committee_meetings"><FONT SIZE=2> Board and Committee Meetings</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="3%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 VALIGN="TOP"><A HREF="#dg14601_board_independence"><FONT SIZE=2> Board Independence</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="3%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 VALIGN="TOP"><A HREF="#dg14601_committees_of_the_board"><FONT SIZE=2> Committees of the Board</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="3%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 VALIGN="TOP"><A HREF="#dg14601_director_qualifications"><FONT SIZE=2> Director Qualifications</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="3%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 VALIGN="TOP"><A HREF="#dg14601_identification_and_eva__dg102221"><FONT SIZE=2> Identification and Evaluation of Nominees for Director</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="3%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 VALIGN="TOP"><A HREF="#dg14601_communications_with_the_board"><FONT SIZE=2> Communications with the Board</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="3%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 VALIGN="TOP"><A HREF="#dg14601_annual_meeting_attendance"><FONT SIZE=2> Annual Meeting Attendance</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="3%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 VALIGN="TOP"><A HREF="#dg14601_code_of_ethics"><FONT SIZE=2> Code of Ethics</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="3%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 VALIGN="TOP"><A HREF="#dg14601_policies_and_procedure__dg102496"><FONT SIZE=2> Policies and Procedures Regarding Related Party Transactions</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="3%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 VALIGN="TOP"><A HREF="#dg14601_information_regarding___dg102402"><FONT SIZE=2> Information Regarding Director Nominee and Other Directors</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=4 VALIGN="TOP"><A HREF="#dg14601_compensation_committee__dg102475"><FONT SIZE=2>COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=4 VALIGN="TOP"><A HREF="#dg14601_compensation_discussion_and_analysis"><FONT SIZE=2>COMPENSATION DISCUSSION AND ANALYSIS</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="3%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 VALIGN="TOP"><A HREF="#dg14601_introduction."><FONT SIZE=2> Introduction</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="3%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 VALIGN="TOP"><A HREF="#dg14601_compensation_objectives."><FONT SIZE=2> Compensation Objectives</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="3%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 VALIGN="TOP"><A HREF="#dg14601_elements_of_compensation."><FONT SIZE=2> Elements of Compensation</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="3%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 VALIGN="TOP"><A HREF="#di14601_executive_compensation_action_taken_after_year-end."><FONT SIZE=2> Executive Compensation Action Taken After Year-End</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="3%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 VALIGN="TOP"><A HREF="#di14601_timing_of_stock_option_grants."><FONT SIZE=2> Timing of Stock Option Grants</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="3%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 VALIGN="TOP"><A HREF="#di14601_severance_and_change_of_control_arrangements."><FONT SIZE=2> Severance And Change of Control Arrangements</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=4 VALIGN="TOP"><A HREF="#di14601_report_of_compensation_committee"><FONT SIZE=2>REPORT OF COMPENSATION COMMITTEE</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=4 VALIGN="TOP"><A HREF="#di14601_summary_compensation_table"><FONT SIZE=2>SUMMARY COMPENSATION TABLE</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=4 VALIGN="TOP"><A HREF="#di14601_grants_of_plan-based_awards"><FONT SIZE=2>GRANTS OF PLAN-BASED AWARDS</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=4 VALIGN="TOP"><A HREF="#di14601_outstanding_equity_awards_at_fiscal_year-end(1)"><FONT SIZE=2>OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=4 VALIGN="TOP"><A HREF="#di14601_option_exercises_and_stock_vested"><FONT SIZE=2>OPTION EXERCISES AND STOCK VESTED</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=4 VALIGN="TOP"><A HREF="#di14601_director_compensation_table"><FONT SIZE=2>DIRECTOR COMPENSATION</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=4 VALIGN="TOP"><A HREF="#di14601_potential_payments_upo__di102281"><FONT SIZE=2>POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=4 VALIGN="TOP"><A HREF="#di14601_equity_compensation_plan_information"><FONT SIZE=2>EQUITY COMPENSATION PLAN INFORMATION</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=4 VALIGN="TOP"><A HREF="#dk14601_report_of_the_audit_committee"><FONT SIZE=2>REPORT OF THE AUDIT COMMITTEE</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=4 VALIGN="TOP"><A HREF="#dk14601_share_ownership_of_management,__sha02679"><FONT SIZE=2> SHARE OWNERSHIP OF MANAGEMENT, DIRECTORS, NOMINEES AND 5% STOCKHOLDERS</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=4 VALIGN="TOP"><A HREF="#dk14601_other_information"><FONT SIZE=2>OTHER INFORMATION</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=4 VALIGN="TOP"><A HREF="#dm14601_performance_share_plan"><FONT SIZE=2>EXHIBIT A&#151;PERFORMANCE SHARE PLAN</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=4 VALIGN="TOP"><A HREF="#do14601_charter_for_the_compensation_committee"><FONT SIZE=2>EXHIBIT B&#151;CHARTER FOR THE COMPENSATION COMMITTEE</FONT></A></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

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

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<P style='page-break-before:always'></p>
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<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<!-- TOC_END -->
<P ALIGN="CENTER"><FONT SIZE=2><B>OVERSTOCK.COM,&nbsp;INC.<BR>
6350 South 3000 East<BR>
Salt Lake City, Utah 84121  </B></FONT></P>

<HR NOSHADE ALIGN="CENTER" WIDTH="120">
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="de14601_proxy_statement"> </A>
<A NAME="toc_de14601_1"> </A>
<BR></FONT><FONT SIZE=2><B>PROXY STATEMENT    <BR>    </B></FONT></P>

<HR NOSHADE ALIGN="CENTER" WIDTH="120">

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
Board of Directors is soliciting proxies for the 2007 Annual Meeting of Stockholders to be held at 1:00&nbsp;p.m. on May&nbsp;15, 2007 at the Company's warehouse located at 1455
South 5500 West, Salt Lake City, Utah 84104. This Proxy Statement contains important information for you to consider when deciding how to vote on the matters before the meeting. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board set March&nbsp;16, 2007 as the record date for the meeting. Stockholders who owned Overstock common stock on that date are entitled to attend and vote at the meeting. Each
share is entitled to one vote. There were 23,636,912 shares of common stock outstanding on the record date. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Voting
materials, which include this Proxy Statement, the proxy card and Overstock's Annual Report on Form&nbsp;10-K for the year ended December&nbsp;31, 2006, are being
mailed to stockholders on or about March&nbsp;30, 2007. </FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_de14601_1_2"> </A>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="de14601_questions_and_answers"> </A>
<A NAME="toc_de14601_2"> </A>
<BR></FONT><FONT SIZE=2><B>QUESTIONS AND ANSWERS    <BR>    </B></FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD><FONT SIZE=2><B>Why am I receiving this Proxy Statement?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD><FONT SIZE=2>This Proxy Statement describes proposals on which we would like you, as a stockholder, to vote. It also gives you information on these
issues so that you can make an informed decision.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD><FONT SIZE=2><B>Who can vote at the Annual Stockholders Meeting?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD><FONT SIZE=2>Stockholders who owned Overstock common stock on March&nbsp;16, 2007 may attend and vote at the Annual Meeting. Each share is entitled
to one vote. There were 23,636,912 shares of common stock outstanding on March&nbsp;16, 2007. Information about the stockholdings of our directors and executive officers is contained in the section
entitled "Share Ownership of Management, Directors and 5% Stockholders" beginning on page&nbsp;30 of this Proxy Statement.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD><FONT SIZE=2><B>What is the proxy card?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD><FONT SIZE=2>The proxy card enables you to appoint Patrick M. Byrne and Jonathan E. Johnson III as your representatives at the Annual Meeting. By
completing and returning the proxy card you are authorizing Messrs.&nbsp;Byrne and Johnson to vote your shares at the meeting, as you have instructed them on the proxy card. This way, your shares
will be voted whether or not you attend the meeting. Even if you plan to attend the meeting, it is a good idea to complete and return your proxy card before the meeting date just in case your plans
change.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD><FONT SIZE=2><B>What am I voting on?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD><FONT SIZE=2>You are being asked to vote on:
<BR><BR></FONT>
<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
election of one director;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>an
amendment of the Company's Performance Share Plan; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>ratification
of our Audit Committee's selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm. </FONT></DD></DL>
</UL>
</DD></DL>
<UL>

<P><FONT SIZE=2>The
section entitled "Proposals to be Voted On" on page&nbsp;6 of this Proxy Statement gives you more information about the nominee for election to our Board, the proposed amendment of the
Performance Share Plan, and the Company's independent registered public accounting firm. You may also find more information on the nominee in the section entitled "The Board&#151;Information
Regarding Director Nominee and Other Directors" beginning on page&nbsp;16 of this Proxy Statement. We will also transact any other business that properly comes before the meeting. </FONT></P>

</UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD><FONT SIZE=2><B>How do I vote?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD><FONT SIZE=2>You may vote either by attending the meeting and voting in person, or you may vote by mail by completing, signing and dating your proxy
card and returning it in the enclosed, postage-paid and addressed envelope, or, if available, by the Internet or by telephone by following the instructions on the proxy card. If you mark
your voting instructions on the proxy card, your shares will be voted:
<BR><BR></FONT>
<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>as
you instruct, and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>according
to the best judgment of the Board (or the proxy holders, in the absence of instructions from the Board) if a proposal comes up for vote at the meeting that is not
on the proxy card. </FONT></DD></DL>
</UL>
</DD></DL>
<UL>

<P><FONT SIZE=2>If
you return a signed card but do not provide voting instructions, your shares will be voted: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>for
the named nominee for director; </FONT></DD></DL>
</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

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<P style='page-break-before:always'></p>
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<A NAME="page_de14601_1_3"> </A>
<UL>
<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>for
the proposed amendment of the Performance Share Plan;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>for
ratification of the Audit Committee's selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm, and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>according
to the best judgment of the Board (or the proxy holders, in the absence of instructions from the Board) if a proposal comes up for a vote at the meeting that is
not on the proxy card. </FONT></DD></DL>
</UL>
</UL>
<UL>

<P><FONT SIZE=2>We
will hand out written ballots to anyone who wants to vote at the meeting. However, if you hold your shares in street name, you must obtain a legal proxy from the record holder in order to vote at
the meeting. Holding shares in "street name" means you hold them through a brokerage firm, bank or other nominee, and therefore the shares are not held in your individual name. </FONT></P>


<P><FONT SIZE=2><I>We encourage you to examine your proxy card closely to make sure you are voting all of your shares in the Company.</I></FONT></P>

</UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD><FONT SIZE=2><B>What does it mean if I receive more than one proxy card?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD><FONT SIZE=2>It means that you may have multiple accounts at the transfer agent and/or with stockbrokers or other nominees. Please sign and return
all proxy cards to ensure that all of your shares are voted.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD><FONT SIZE=2><B>What if I change my mind after I return my proxy?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD><FONT SIZE=2>You may revoke your proxy and change your vote at any time before the polls close at the meeting. You may do this by:
<BR><BR></FONT>
<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>sending
a written notice to the Secretary of the Company (at the address shown on the cover page) stating that you are revoking your proxy of a particular date,
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>signing
another proxy with a later date and returning it before the polls close at the meeting, or
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>attending
the Annual Meeting and voting in person.
<BR><BR> </B></FONT></DD></DL>
</UL>
</DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD><FONT SIZE=2><B>Will my shares be voted if I do not sign and return my proxy card or vote via the Internet or by telephone?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD><FONT SIZE=2>(1) If your shares are held in street name, your brokerage firm or other nominee, under certain circumstances, may vote your shares.
Nominees have authority under the Nasdaq rules to vote customers' unvoted shares on some "routine" matters. The proposals to elect a director and ratify the appointment of the independent registered
public accounting firm are routine matters. The proposal to approve the amendment of the Performance Share Plan is not a routine matter. If you do not give a proxy to vote your shares, your brokerage
firm may either:
<BR><BR></FONT>
<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>vote
your shares on routine matters, or
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>leave
your shares unvoted. </FONT></DD></DL>
</UL>
</DD></DL>
<UL>

<P><FONT SIZE=2>If
a brokerage firm entitled to vote your shares leaves those shares unvoted, it is called a "broker nonvote." A brokerage firm cannot vote customers' shares on non-routine matters without
instructions from you. </FONT></P>

<P><FONT SIZE=2>You
may have granted to your stockbroker discretionary voting authority over your account. Your stockbroker may be able to vote your shares depending on the terms of the agreement you have with your
broker. If you hold your shares in street name and you do not authorize your broker to vote on your behalf, you must obtain a legal proxy from your stockbroker in order to vote at the meeting. We
encourage you to provide instructions to your broker. This ensures your shares will be voted at the meeting. </FONT></P>

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

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<UL>
<BR>

<P><FONT SIZE=2>(2)
If your shares are in your name and you do not sign and return your proxy card or vote via the Internet or by telephone, your shares will not be voted unless you vote in person at the meeting. </FONT></P>

</UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD><FONT SIZE=2><B>How are votes counted?
<BR><BR> </B></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD><FONT SIZE=2>You may vote:
<BR><BR></FONT>
<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>with
respect to the nominee for election to the Board, either "for" the nominee or to "withhold" your vote from the nominee,
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>"for,"
"against," or "abstain" on the proposal to amend the Company's Performance Share Plan, and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>"for,"
"against," or "abstain" on the ratification of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm.
<BR><BR> </B></FONT></DD></DL>
</UL>
</DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD><FONT SIZE=2><B>How many stockholders are needed either in person or by proxy to hold the meeting?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD><FONT SIZE=2>To hold the meeting and conduct business, a majority of the Company's outstanding shares entitled to vote as of March&nbsp;16, 2007
must be present at the meeting. This is called a quorum. </FONT></DD></DL>
<UL>

<P><FONT SIZE=2>Shares
are counted as present at the meeting if the stockholder either: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>is
present in person at the meeting, or
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>has
properly submitted a proxy card. </FONT></DD></DL>
</UL>
</UL>
<UL>

<P><FONT SIZE=2>On
proposals for routine matters, a broker nonvote is counted for determining the presence of a quorum. </FONT></P>

</UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD><FONT SIZE=2><B>How many votes must the nominee have to be elected as a director?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD><FONT SIZE=2>The nominee receiving the highest number of "yes" votes will be elected as a director. This number is called a plurality.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD><FONT SIZE=2><B>What happens if the nominee is unable to stand for re-election?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD><FONT SIZE=2>A majority of the independent members of the Board may designate a substitute nominee. If you have completed and returned your proxy,
Messrs.&nbsp;Byrne and Johnson can vote your shares for a substitute nominee. They cannot vote for more than one nominee.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD><FONT SIZE=2><B>How many votes are required to approve the amendment of the Performance Share Plan?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD><FONT SIZE=2>A majority of the shares present, in person or by proxy, excluding broker nonvotes, voting in favor is required to approve the amendment
of the Performance Share Plan. Brokers do not have discretion to vote on this proposal without your instruction.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD><FONT SIZE=2><B>How many votes are required to ratify the appointment of PricewaterhouseCoopers LLP?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD><FONT SIZE=2>A majority of the shares present, in person or by proxy, including broker nonvotes, voting in favor is required to ratify the
appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD><FONT SIZE=2><B>How many votes are required to approve other matters that may come before the stockholders at the meeting?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD><FONT SIZE=2>A majority of the shares present, in person or by proxy, excluding broker nonvotes, at the meeting voting in favor is required to
approve other matters that may come before the stockholders at the meeting. </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>4</FONT></P>

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<A NAME="page_de14601_1_5"> </A>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD><FONT SIZE=2><B>What happens if I don't indicate how to vote my proxy?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD><FONT SIZE=2>If you just sign your proxy card without providing further instructions, your shares will be counted as a "yes" vote for the director
nominee, "for" the proposed amendment of the Performance Share Plan, and "for" ratification of the selection of PricewaterhouseCoopers LLP.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD><FONT SIZE=2><B>Is my vote kept confidential?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD><FONT SIZE=2>Proxies, ballots and voting tabulations identifying stockholders are kept confidential and will not be disclosed except as may be
necessary to meet legal requirements.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD><FONT SIZE=2><B>Where do I find the voting results of the meeting?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD><FONT SIZE=2>We will announce preliminary voting results at the meeting. We will publish the final results in our quarterly report on
Form&nbsp;10-Q for the second quarter of 2007 on or before August&nbsp;9, 2007. We will file that report with the SEC, and you can get a copy by calling Investor Relations at
(801)&nbsp;947-3282 or the SEC at (800)&nbsp;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 www.overstock.com.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>Q:</B></FONT></DT><DD><FONT SIZE=2><B>Who can help answer my questions?</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD><FONT SIZE=2>You can call Georgeson Shareholder Communications, our proxy solicitor, toll-free at (800)&nbsp;314-4549 with
any questions about the proposals described in this Proxy Statement or the mechanics of voting. </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>5</FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="de14601_proposals_to_be_voted_on_"> </A>
<A NAME="toc_de14601_3"> </A>
<BR></FONT><FONT SIZE=2><B>PROPOSALS TO BE VOTED ON:    <BR>    </B></FONT></P>

<P><FONT SIZE=2><A
NAME="de14601_1._election_of_director"> </A>
<A NAME="toc_de14601_4"> </A></FONT> <FONT SIZE=2><B>1.&nbsp;&nbsp;&nbsp;&nbsp;ELECTION OF DIRECTOR    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The nominee for election this year as a Class&nbsp;II director, for a three-year term ending in 2010, is Jason C. Lindsey. Mr.&nbsp;Lindsey has
been a director from June&nbsp;1999 to October&nbsp;2002 and from October&nbsp;2005 to present, and is also our President and Chief Operating Officer. Mr.&nbsp;Lindsey has consented to serve a
new three-year term. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
information about the nominee, see "The Board&#151;Information Regarding Director Nominee and Other Directors" beginning on page&nbsp;16. </FONT></P>

<P><FONT SIZE=2><B>Recommendation of the Board of Directors  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors unanimously recommends a vote "for" Mr.&nbsp;Lindsey. </FONT></P>

<P><FONT SIZE=2><B>Vote Required  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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. </FONT></P>

<P><FONT SIZE=2><A
NAME="de14601_2._amendment_of_performance_share_plan."> </A>
<A NAME="toc_de14601_5"> </A>
<BR></FONT><FONT SIZE=2><B>2.&nbsp;&nbsp;&nbsp;&nbsp;AMENDMENT OF PERFORMANCE SHARE PLAN.    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Overstock.com Performance Share Plan was adopted by the Board and Compensation Committee on January&nbsp;23, 2006. As adopted, awards under the plan may be
paid solely in cash. Further, as adopted, the plan is not a "performance-based" plan, and thus Section&nbsp;162(m) of the Internal Revenue Code may limit the Company's ability to deduct certain
payments to be made under the plan for federal income tax purposes. The Board and Compensation Committee have approved amendments to the plan which, subject to stockholder approval, would permit the
Company the flexibility to settle awards made under the plan with shares of common stock rather than in cash, and would also permit the plan to qualify as "performance-based" for purposes of
Section&nbsp;162(m) of the Internal Revenue Code, so that the Company's ability to deduct payments under future awards made under the plan would not be limited by Section&nbsp;162(m). The plan, as
proposed to be amended, is attached as Exhibit&nbsp;A to this proxy statement. </FONT></P>


<P><FONT SIZE=2><B>Overview of Performance Share Plan And Proposed Amendments  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Performance Share Plan was adopted to serve as a long-term incentive-based plan for the purposes of attracting, retaining and motivating
executives and other key employees. Performance goals under the plan are measured by growth in economic value, as defined in the plan, and are specified in the grants made to participants in the plan.
The plan provides for a three-year period for the measurement of the Company's attainment of the performance goal, but at the Company's sole option the Company may make a payment of
estimated amounts payable to a plan participant after two years. The payments due to participants under the plan are a function of the then-current market price of a share of the Company's
common stock, multiplied by a percentage dependent on the extent to which the performance goal has been attained, which will be between 0% and 200%. If the growth in economic value is 10% compounded
annually or less, the percentage will be 0%. If the growth in economic value is 25% compounded annually, the percentage will be 100%. If the growth in economic value is 40% compounded annually or
more, the percentage will be 200%. If the percentage growth is between these percentages, the payment percentage will be determined on the basis of straight line interpolation. Amounts payable under
the plan are payable in cash unless the Company's stockholders approve settlement of awards under the plan with shares of common stock. If the stockholders approve </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>6</FONT></P>

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<P><FONT SIZE=2>the
amendment as contemplated by this Proposal 2, the Company will have the option of settling awards under the plan, including awards made prior to the date of stockholder approval, in whole or in
part with shares of common stock rather than cash. If the stockholders do not approve the amendment as contemplated by this Proposal 2, awards under the plan will remain payable solely in cash. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
originally adopted, the plan was not structured as a "performance-based" plan for purposes of Section&nbsp;162(m) of the Internal Revenue Code, and consequently the provisions of
Section&nbsp;162(m) of the Internal Revenue Code could limit the Company's ability to deduct payments made pursuant to the plan. If the stockholders approve the plan as contemplated by this Proposal
2, the plan will qualify as "performance-based", and consequently Section&nbsp;162(m) should not limit the Company's ability to deduct payments made pursuant to the plan for federal income tax
purposes. If the stockholders do not approve the amendment as contemplated by this Proposal 2, payments under the plan to employees covered by Section&nbsp;162(m) in excess of the limits imposed by
Section&nbsp;162(m) would be non-deductible to the Company for federal income tax purposes. To date, the Company has incurred insignificant federal income tax liabilities; however, in
the future the deductibility of payments under the plan could be beneficial to the Company. </FONT></P>

<P><FONT SIZE=2><B>Material Features of the Plan  </B></FONT></P>

<P><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purpose:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The purpose of the plan is to advance the interests of the Company and its stockholders by providing incentives to
executives and other employees. </FONT></P>

<P><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Awards:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;From time to time the Board of Directors or the Compensation Committee may approve a grant of an award of Performance
Shares under the plan to an employee of the Company. Each Performance Share is intended to have a percentage (between 0% and 200%) of the market value per share of the Company's common stock at the
measurement date, depending upon attainment of a pre-determined performance goal over a period of time specified in the grant (the "Award Period"). At the end of the Award Period, the
Board is to determine the degree of attainment of the performance goal and to assign a harvest percentage based on that determination, and the Company is to make a cash payment to the participant
equal to the market value of the common stock at the measurement date multiplied by the harvest percentage. If the stockholders approve the amendment of the plan as contemplated by this Proposal 2,
the Company will have the option of settling awards under the plan in whole or in part with shares of common stock rather than cash. </FONT></P>


<P><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Administration:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The plan is administered by the Board, which has authority to select the executives and other employees who
shall be participants, to determine the size and terms of an award, to modify the terms of any award that has been granted, to determine the time when awards will be made, to determine the Award
Periods applicable to an award, to determine the harvest percentages applicable to an award, to determine the terms of a Participant's grant agreement, to establish performance goals, to determine
whether the performance goals were attained, and to make other determinations that are not prohibited by the plan. Under the amendments being submitted to the stockholders as contemplated by this
Proposal 2, certain decisions relating to awards intended to qualify as "performance-based" awards may be made solely by the Compensation Committee. In addition however, the Board may delegate any or
all of its duties relating to the plan to the Compensation Committee. </FONT></P>

<P><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Eligibility and Participation:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Board has the authority to designate executives and other employees who are to be
participants in the plan. Participants are selected from among the executives and other employees who are in a position to have a material effect on the financial results of the Company. The
designation of the participants may be made individually or by groups or classifications of executives and other employees, as the Board deems appropriate. At present approximately 35 persons are
eligible to participate in the plan on the basis of their positions with the Company. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>7</FONT></P>

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<P><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Grants:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each grant specifies, among other matters, (i)&nbsp;the number of performance shares awarded, (ii)&nbsp;the Award
Period, (iii)&nbsp;the performance goal to be attained within the Award Period, (iv)&nbsp;the method for determining the harvest percentage based upon the level of achievement of the performance
goal, and (v)&nbsp;the maximum award payment. </FONT></P>

<P><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Performance Measures:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The performance measures for each award are determined by the Board and are set forth in the grant
agreement. The goal may be based on a measure of growth in economic value per share of the Company, or on a similar measure of the Company's financial performance. If the stockholders approve the
amendment as contemplated by this Proposal 2, the plan will include the specific performance based measures described below and is expected to qualify as "performance-based" for purposes of
Section&nbsp;162(m). Consequently, Section&nbsp;162(m) should not limit the Company's ability to deduct payments made pursuant to the plan for federal income tax purposes, provided that the
performance measures actually utilized are among the performance measures approved by the stockholders. If the Board grants an award utilizing performance measures not approved by the stockholders,
the award would not qualify as performance-based. Awards granted prior to the date the specific performance measures described in this proxy statement are approved by the stockholders will remain
subject to the limitations on deductibility of Section&nbsp;162(m). </FONT></P>

<P><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Specific Performance Measures:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The amendment approved by the Board provides that performance measures for purposes of
qualifying the plan as a "performance-based" plan for purposes of Section&nbsp;162(m) shall be based on the attainment of specified levels of one or more of the following measures with respect to
the Company or one of its subsidiaries, affiliates, business units, divisions or departments for or within which the Participant performs services: (a)&nbsp;cash position, (b)&nbsp;earnings per
share, (c)&nbsp;expenses, (d)&nbsp;gross margin, (e)&nbsp;net income, (f)&nbsp;operating cash flow, (g)&nbsp;operating income, (h)&nbsp;operating margin, (i)&nbsp;return on assets,
(j)&nbsp;return on equity, (k)&nbsp;return on sales, (l)&nbsp;revenue, (m)&nbsp;total stockholder return, (n)&nbsp;unit sales and/or (o)&nbsp;economic value, as defined in the plan. </FONT></P>


<P><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;As soon as practicable after the end of the Award Period, the Board or the Compensation Committee, as appropriate,
determines (i)&nbsp;whether the applicable Performance Goal has been attained with respect to a given award, (ii)&nbsp;the harvest percentage applied to a given award, and (iii)&nbsp;the actual
value of the award. Unless otherwise determined by the Board or otherwise set forth in a grant agreement, the actual value of each Performance Share included in an award is equal to the then market
value of one share of common stock multiplied by the harvest percentage. Under the plan as
originally adopted, a Participant's actual value is to be settled through a cash payment to the Participant no later than March&nbsp;15 of the calendar year immediately following the last day of the
Award Period. If the stockholders approve the amendment of the plan as contemplated by this Proposal 2, the Company will have the option of settling awards under the plan in whole or in part with
shares of common stock rather than cash. </FONT></P>

<P><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Limitation on Total Number of Shares that may be Issued under the Plan:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;If the stockholders approve the amendment of the plan
as contemplated by this Proposal 2, the plan will provide that the maximum aggregate number of shares that may be issued under the plan will be 392,000. To the extent that awards cannot be settled by
delivery of shares of common stock as a result of this limitation or otherwise, the Company would be required to settle the awards in cash. In any case, the settlement of awards by delivery of shares
would be at the Company's option, and nothing in the plan would require the Company to settle the awards by delivery of shares. </FONT></P>

<P><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Termination of Employment:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Except in connection with a change of control as described below or otherwise set forth in a grant
agreement, a Participant forfeits all outstanding awards upon any termination of employment prior to the end of the applicable Award Period; provided that the Board may at its discretion provide that
if a Participant dies, retires, is disabled, or is granted a leave of absence, or if the Participant's employment is otherwise terminated in a manner reasonably judged to </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>8</FONT></P>

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<P><FONT SIZE=2>be
not seriously detrimental to the Company, then all or a portion of the Participant's award, as determined by the Board, may be paid to the Participant or Participant's beneficiary. </FONT></P>

<P><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change of Control:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;If a Participant's employment terminates within 24&nbsp;months after a Change of Control, then each
award held by the Participant granted prior to the Change of Control is to be cancelled and the Participant will receive instead a payment equal to the product of (i)&nbsp;the then market value of
100% of the Performance Shares and (ii)&nbsp;the applicable harvest percentage. The applicable harvest percentage is to be determined based on the extent to which the performance goal has been
achieved as of the last day of the calendar quarter ending prior to the date of the termination of the Participant's employment. For purposes of the plan, a "Change of Control" would occur if any
person or group other than members of the Byrne Family (as defined in the plan) owns thirty-five percent or more of the then outstanding common stock of the Company. </FONT></P>


<P><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Code Section&nbsp;409A:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;If a Participant is a "specified employee" within the meaning of Section&nbsp;409A of the
Internal Revenue Code of 1986, as amended (the "Code"), no payment that is "deferred compensation" subject to Code Section&nbsp;409A is to be made to the Participant prior to the date that is six
months after the date of the Participant's separation from service (as defined in Code Section&nbsp;409A or, if earlier, the Participant's date of death. </FONT></P>

<P><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amendments or Termination:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Board may amend, alter or discontinue the Plan, but no amendment, alteration or
discontinuation may be made which would impair any of the rights of a Participant under an existing grant without the Participant's consent, except that the Board may amend the plan in such manner as
it deems necessary to permit the granting of awards meeting the requirements of the Code, or any successor thereto, or other applicable laws. The Board could amend the plan, without the approval of
the stockholders, in a manner that would increase the cost of the plan to the Company, by increasing the maximum permissible harvest percentage or otherwise, whether or not the stockholders approve
this Proposal 2. </FONT></P>

<P><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nontransferability of Awards:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Awards under the plan are not transferable or assignable by the Participant, except to a
beneficiary upon the death of the Participant. </FONT></P>

<P><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reduction of Awards:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Board has the authority, in its sole discretion (subject to applicable law), to reduce any amounts
payable to any Participant in order to satisfy any liabilities owed to the Company by the Participant. </FONT></P>

<P><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounting:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;If the stockholders approve the amendment of the plan as contemplated by this Proposal 2, so that the Company
would be able to make payments under the plan in the form of common stock, the awards granted under the Plan would be reclassified from liability awards to equity awards in accordance with
FAS&nbsp;123(R). In accounting for such amendment, the Company would reclassify the liability related to the plan to additional paid-in-capital on the amendment date and
recognize compensation cost equal to the excess, if any, of the amended award's fair value over the liability award's fair value prior to the modification. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>9</FONT></P>

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<P><FONT SIZE=2><B>Existing Grants under the Plan and Potential Benefits under the Plan  </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the awards made to date under the plan to (i)&nbsp;each named executive officer, (ii)&nbsp;all current executive officers as a
group, and (iii)&nbsp;all employees, including all current officers who are not executive officers, as a group, net of forfeited awards. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="67%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="77%" ALIGN="LEFT"><FONT SIZE=1><B>Named Executive Officers<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="20%" ALIGN="CENTER"><FONT SIZE=1><B>Number of<BR>
Performance<BR>
Shares Granted</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="77%"><FONT SIZE=2>Patrick. M. Byrne, Chief Executive Officer</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT"><FONT SIZE=2>25,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="77%"><FONT SIZE=2>David K. Chidester, Senior Vice President, Finance</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT"><FONT SIZE=2>10,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="77%"><FONT SIZE=2>Jason C. Lindsey, President and Chief Operating Officer</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT"><FONT SIZE=2>25,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="77%"><FONT SIZE=2>Stormy D. Simon, Senior Vice President, Customer Care</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT"><FONT SIZE=2>15,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="77%"><FONT SIZE=2>Stephen Tryon, Senior Vice President</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT"><FONT SIZE=2>10,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="77%"><FONT SIZE=2>All current executive officers as a group</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT"><FONT SIZE=2>99,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="77%"><FONT SIZE=2>All employees, other than executive officers, as a group, net of forfeited awards</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT"><FONT SIZE=2>115,000</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
awards have been made to current directors who are not executive officers. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
benefits or amounts that will be received by the participants are not determinable. However, the Company has accrued $900,000 of expense during 2006 based on its estimate of future
benefits payable. If the plan permitted payments after a single year, the amount that would have been payable to each of the participants in the plan, including all named executive officers, all
current executive officers, and all employees as a group, for 2006 would have been $0. </FONT></P>


<P><FONT SIZE=2><B>Vote Required  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 to the plan. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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. </FONT></P>

<P><FONT SIZE=2><B>Recommendation Of The Board Of Directors  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors unanimously recommends that stockholders vote "for" approval of the plan, as amended. </FONT></P>

<P><FONT SIZE=2><A
NAME="dg14601_3._ratification_of_selection_o__3._02988"> </A>
<A NAME="toc_dg14601_1"> </A>
<BR></FONT><FONT SIZE=2><B>3.&nbsp;&nbsp;&nbsp;&nbsp;RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee has selected PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for the current fiscal year.
PricewaterhouseCoopers LLP has served as our independent registered public accounting firm since 1999. Although ratification of the Audit Committee's selection of PricewaterhouseCoopers LLP is not
required under our bylaws or other legal requirements, the Company is submitting the appointment of PricewaterhouseCoopers LLP to the stockholders as a matter of good corporate practice. If
stockholders do not ratify the appointment of PricewaterhouseCoopers LLP, the Audit Committee will reconsider whether or not to retain PricewaterhouseCoopers LLP. Even if stockholders ratify the
selection of PricewaterhouseCoopers LLP, the Audit Committee may appoint a different independent registered public accounting firm or replace PricewaterhouseCoopers LLP with a different independent
registered public accounting firm at any time if the Audit Committee determines it is in the best interests of the Company and the stockholders </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>10</FONT></P>

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<P><FONT SIZE=2>to
do so. Representatives of PricewaterhouseCoopers LLP are expected to attend the meeting in order to respond to appropriate questions from stockholders and will have an opportunity to make a
statement if they desire to do so. </FONT></P>

<P><FONT SIZE=2><B>Audit Fees  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The aggregate fees and out-of-pocket expenses PricewaterhouseCoopers LLP billed us for each of the last two fiscal years for professional
services for the audits of our annual financial statements, management's assessment of the effectiveness of internal control over financial reporting, the effectiveness of internal control over
financial reporting and reviews of financial statements included in our Reports on Form&nbsp;10-K and Form&nbsp;10-Q were $706,000 in 2005 and $611,000 in 2006, including
$33,500 in 2005 for services in connection with our offerings and registration statements. </FONT></P>

<P><FONT SIZE=2><B>Audit-Related Fees  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PricewaterhouseCoopers LLP did not bill us any fees in the last two fiscal years for assurance and related services that are reasonably related to the performance
of the audit or review of the Company's financial statements and are not reported above under the caption "Audit Fees". </FONT></P>


<P><FONT SIZE=2><B>Tax Fees  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PricewaterhouseCoopers LLP did not bill us any fees in the last two fiscal years for compliance, tax advice, or tax planning. </FONT></P>

<P><FONT SIZE=2><B>All Other Fees  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PricewaterhouseCoopers LLP did not bill us any fees in the last two fiscal years for products and services provided by PricewaterhouseCoopers LLP, other than the
services reported above. </FONT></P>

<P><FONT SIZE=2><B>Auditor Independence  </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee has considered the role of PricewaterhouseCoopers LLP in providing us with the services described above, and has concluded that those services
are compatible with their independence from management and from the Company. </FONT></P>

<P><FONT SIZE=2><B>Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm  </B></FONT></P>

<P><FONT SIZE=2><I>General  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee has adopted an Audit and Non-Audit Services Pre-Approval Policy, which sets forth the procedures and the conditions
pursuant to which services to be performed by the independent registered public accounting firm are 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. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>11</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=14,EFW="2176990",CP="OVERSTOCK.COM, INC.",DN="1",CHK=104579,FOLIO='11',FILE='DISK111:[07ZBB1.07ZBB14601]DG14601A.;13',USER='MBRADT',CD='29-MAR-2007;11:52' -->
<A NAME="page_dg14601_1_12"> </A>
<BR>

<P><FONT SIZE=2>Audit
Committee at its next meeting. The Policy does not delegate the Audit Committee's responsibilities to pre-approve services performed by the independent registered public accounting
firm to management. </FONT></P>

<P><FONT SIZE=2><I>Audit Services  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 quarterly reviews) and other procedures required to be performed by the independent registered public accounting firm to be able to form an opinion on the
Company's consolidated financial statements. Audit services also include the attestation engagement for the independent registered public accounting firm's report on management's assertion on internal
control over financial reporting and 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. </FONT></P>

<P><FONT SIZE=2><I>Audit-related Services  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Audit-related services are assurance and related services that are reasonably related to the performance of the audit or review of the Company's financial
statements or that are traditionally performed by the independent registered public accounting firm. Under the Policy, the Audit Committee grants general pre-approval to specified
Audit-related services. All other Audit-related services not specified must be specifically pre-approved by the Audit Committee. </FONT></P>

<P><FONT SIZE=2><I>Tax Services  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the Policy, the Audit Committee grants general pre-approval to specific tax compliance, planning and advice services that have historically been
provided by the auditor, that the Audit Committee has reviewed and believes would not impair the independence of the auditor, and that are consistent with the SEC's rules on auditor independence.
Other tax services must be specifically approved by the Audit Committee. </FONT></P>

<P><FONT SIZE=2><I>All Other Services  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the Policy, the Audit Committee grants general pre-approval to 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. </FONT></P>

<P><FONT SIZE=2><I>Procedures  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Policy provides that at the beginning of each year, the Senior Vice President, Finance (our principal financial and accounting officer) and the Company's
independent registered public accounting firm will jointly submit to the Audit Committee a schedule of audit, audit-related, tax and other non-audit services that are subject to general
pre-approval. This schedule will provide a description of each type of service that is subject to general pre-approval and, where possible, will provide projected fees (or a
range of projected fees) for each service. The Audit Committee will review and approve the types of services and review the projected fees for the next fiscal year. Any changes to the fee amounts
listed in the schedule will be subject to further specific approval of the Audit Committee. The Policy </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>12</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=15,EFW="2176990",CP="OVERSTOCK.COM, INC.",DN="1",CHK=229189,FOLIO='12',FILE='DISK111:[07ZBB1.07ZBB14601]DG14601A.;13',USER='MBRADT',CD='29-MAR-2007;11:52' -->
<A NAME="page_dg14601_1_13"> </A>
<BR>

<P><FONT SIZE=2>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. </FONT></P>


<P><FONT SIZE=2><I>Recommendation of the Board of Directors  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors unanimously recommends that the stockholders vote "for" ratification of the selection of PricewaterhouseCoopers LLP as the Company's
independent registered public accounting firm. </FONT></P>

<P><FONT SIZE=2><I>Vote Required  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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. </FONT></P>

<P><FONT SIZE=2><A
NAME="dg14601_4._other_business"> </A>
<A NAME="toc_dg14601_2"> </A>
<BR></FONT><FONT SIZE=2><B>4.&nbsp;&nbsp;&nbsp;&nbsp;OTHER BUSINESS    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board knows of no other business for consideration at the meeting. If other matters are properly presented at the meeting, or at any adjournment or
postponement of the meeting, Messrs.&nbsp;Byrne and Johnson will vote, or otherwise act, on your behalf in accordance with the Board's (or, in the absence of instructions from the Board, their)
judgment on such matters. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dg14601_the_board"> </A>
<A NAME="toc_dg14601_3"> </A>
<BR></FONT><FONT SIZE=2><B>THE BOARD    <BR>    </B></FONT></P>

<P><FONT SIZE=2><A
NAME="dg14601_general"> </A>
<A NAME="toc_dg14601_4"> </A></FONT> <FONT SIZE=2><B>General    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors is currently composed of five members. One current director is a nominee for re-election this year. The remaining four
directors will continue to serve the terms described below. Our directors serve staggered terms. This is accomplished as follows: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>each
director serves a three-year term,
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
directors are divided into three classes,
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
classes are as nearly equal in number as possible, and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
term of each class begins on a staggered schedule. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless
otherwise instructed, the proxy holders will vote the proxies received by them for Mr.&nbsp;Lindsey, who is the President and Chief Operating Officer and a current director of
the Company. In the event that the nominee is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for any nominee who shall be designated by a
majority of the independent members of the present Board of Directors to fill the vacancy. In the event that additional persons are nominated for election as directors, the proxy holders intend to
vote all proxies received by them in such a manner as will ensure the election of the nominee approved by a majority of the independent members of the Board, if possible. The term of office of the
person elected as a director will continue until the 2010 Annual Meeting of Stockholders or until his or her successor has been duly elected and qualified or until his or her earlier death,
resignation or removal. It is not expected that the nominee will be unable or will decline to serve as a director. </FONT></P>

<P><FONT SIZE=2><A
NAME="dg14601_board_and_committee_meetings"> </A>
<A NAME="toc_dg14601_5"> </A>
<BR></FONT><FONT SIZE=2><B>Board and Committee Meetings    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board held six meetings during 2006. The Audit Committee held eight meetings during 2006, and the Compensation Committee held three meetings during 2006. Each
director attended at least 75% of the meetings of the Board and of the committees on which he or she served during 2006. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>13</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_dg14601_1_14"> </A>
<BR>

<P><FONT SIZE=2><A
NAME="dg14601_board_independence"> </A>
<A NAME="toc_dg14601_6"> </A>
<BR></FONT><FONT SIZE=2><B>Board Independence    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board currently consists of five members. The Board of Directors has determined that, except for our Chief Executive Officer Patrick M. Byrne, and our
President and Chief Operating Officer Jason C. Lindsey, each of our current directors is independent within the meaning of the Nasdaq director independence standards. In reaching this determination,
the Board considered that neither Ray J. Groves nor Allison H. Abraham has any relationship with the Company except as a director and stockholder. With respect to Barclay (Clay) F. Corbus, the Board
considered the fact that Mr.&nbsp;Corbus is Co-CEO of WR Hambrecht&nbsp;+&nbsp;Co., and considered the services that WR Hambrecht&nbsp;+&nbsp;Co. has performed for the Company
and the Board determined that Mr.&nbsp;Corbus met independence requirements. During 2006 the members of the Board also included John J. Byrne, who is the father of Patrick M. Byrne and was not
considered independent, and Gordon S. Macklin and John A. Fisher, each of whom was determined to be independent by the Board. Mr.&nbsp;John J. Byrne resigned from the Board on July&nbsp;31, 2006;
Mr.&nbsp;Macklin passed away on January&nbsp;30, 2007; and Mr.&nbsp;Fisher resigned from the Board on February&nbsp;23, 2007. </FONT></P>

<P><FONT SIZE=2><A
NAME="dg14601_committees_of_the_board"> </A>
<A NAME="toc_dg14601_7"> </A>
<BR></FONT><FONT SIZE=2><B>Committees of the Board    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors has an Audit Committee and a Compensation Committee, each of which has adopted a written charter. All members of the committees are
appointed by the Board of Directors, and each member is independent within the meaning of the Nasdaq director independence standards and SEC rules. The committees are described in more detail below.
In addition, the Board has adopted resolutions authorizing a majority of the independent members of the Board of Directors to recommend nominees for election to the Board, as described in more detail
below. </FONT></P>

<P><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Audit Committee.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Board has an Audit Committee consisting of Ray J. Groves, Allison H. Abraham and Barclay (Clay) F.
Corbus, each of whom is independent within the meaning of the Nasdaq director independence standards. The Board of Directors has determined that each of Mr.&nbsp;Groves and Ms.&nbsp;Abraham is an
"audit committee financial expert" as defined by the SEC. The Audit Committee is responsible for reviewing and monitoring our financial statements and internal accounting procedures, selecting,
reviewing and monitoring our independent registered public accounting firm, evaluating the scope of the annual audit, reviewing audit results, and consulting with management and our independent
registered public accounting firm prior to presentation of financial statements to stockholders. The Audit Committee Report is included beginning on page&nbsp;29 of this proxy statement. </FONT></P>

<P><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compensation Committee.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Board also has a Compensation Committee consisting of Ray J. Groves and Allison H. Abraham, each
of whom is a non-employee and independent under the Nasdaq independence standards. The Compensation Committee is responsible for determining salaries, incentives and other forms of
compensation for our directors, officers and other employees and
administering various incentive compensation and benefit plans. The Compensation Committee Report is included on page&nbsp;23 of this proxy statement. </FONT></P>

<P><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nominations.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Board does not have a standing nominating committee or committee performing similar functions. The Board has
adopted resolutions in accordance with applicable Nasdaq rules authorizing a majority of the independent members of the Board to recommend nominees to the full Board. The Board believes that it is
appropriate for the Board not to have a nominating committee because of the small size of the full Board. The Board currently consists of five members, three of whom are independent. The Board
considered forming a nominations committee consisting of some or all of the independent members of the Board. Forming a committee consisting of less than all the independent members was unattractive
because it would have omitted one or more of the independent members of the Board. The Board desired the participation in the nomination procedure of all of its independent members, and therefore
authorized a majority of the independent members of the Board </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>14</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_dg14601_1_15"> </A>
<BR>

<P><FONT SIZE=2>to
make nominations. The Board intends to review this matter periodically, and may in the future elect to designate a formal nominations committee. Each member of the Board of Directors has
historically participated in the consideration of director nominees. The independent members of the Board do not have a nominating committee charter, but act pursuant to Board resolutions as described
above. Each of the members of the Board authorized to recommend nominees to the full Board is independent within the meaning of the Nasdaq director independence standards. </FONT></P>

<P><FONT SIZE=2><A
NAME="dg14601_director_qualifications"> </A>
<A NAME="toc_dg14601_8"> </A>
<BR></FONT><FONT SIZE=2><B>Director Qualifications    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The independent members of the Board have not formalized specific minimum qualifications they believe must be met by a candidate to be recommended by the
independent members. The independent members believe that candidates for election to the Board should have the highest professional and personal ethics and values, consistent with those of the
Company. Candidates should have broad relevant experience, and should be committed to enhancing long-term stockholder value. They should be able and willing to provide insight and
practical advice based on experience, and they must actively represent the interests of the stockholders. The independent members believe that a variety of types and a balance of knowledge, experience
and capabilities among the members of the Board are in the best interests of the stockholders. </FONT></P>

<P><FONT SIZE=2><A
NAME="dg14601_identification_and_eva__dg102221"> </A>
<A NAME="toc_dg14601_9"> </A>
<BR></FONT><FONT SIZE=2><B>Identification and Evaluation of Nominees for Director    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The independent members of the Board believe that the current Board composition is serving the stockholders of the Company well. The independent Board members
have recommended additional persons, including Mr.&nbsp;Barclay (Clay) F. Corbus, who joined the Board in March&nbsp;2007, as candidates for the Board from time to time, based largely on the
qualifications of the potential candidates, rather than on any perceived need of the Company. In the future, the independent members may consider candidates identified through current members of the
Board, professional search firms, stockholders or other persons. Candidates may be evaluated at regular or special meetings of the Board, and may be considered at any point during the year. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
independent members have a policy that they will consider any properly submitted director candidates recommended by stockholders of the Company. Any stockholder who desires to submit
a recommendation should submit a written recommendation to the Board, including information about the qualifications of the person to be a nominee for election to the Board, and a consent of the
person to serve if elected, addressed to Board of Directors, Overstock.com,&nbsp;Inc., 6350 South 3000 East, Salt Lake City, Utah 84121. There is no difference in the manner in which the independent
members would evaluate a nominee based on whether the nominee is recommended by a stockholder. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
independent members have not approved any nominee for inclusion on the Company's proxy card for the 2007 Annual Meeting other than Jason C. Lindsey, who is standing for
re-election. The Company has not paid a fee to any third party or parties to identify or evaluate or assist in identifying or evaluating potential nominees. The independent members did not
receive, by November&nbsp;18, 2006, any recommended nominee from any stockholder that beneficially owned more than 5% of the Company's voting common stock for at least one year as of the date the
recommendation was made, or from a group of stockholders that beneficially owned, in the aggregate, more than 5% of the Company's voting common stock, with each of the securities used to calculate
that ownership held for at least one year as of the date the recommendation was made. </FONT></P>

<P><FONT SIZE=2><A
NAME="dg14601_communications_with_the_board"> </A>
<A NAME="toc_dg14601_10"> </A>
<BR></FONT><FONT SIZE=2><B>Communications with the Board    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In January&nbsp;2004 the Board adopted resolutions to provide a formal process by which stockholders may communicate with the Board. Although the adoption of
the formal process did not change the previously existing informal procedures by which stockholders could communicate with the Board, </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>15</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=6,SEQ=18,EFW="2176990",CP="OVERSTOCK.COM, INC.",DN="1",CHK=477773,FOLIO='15',FILE='DISK111:[07ZBB1.07ZBB14601]DG14601B.;10',USER='MBRADT',CD='29-MAR-2007;11:52' -->
<A NAME="page_dg14601_1_16"> </A>
<BR>

<P><FONT SIZE=2>whether
for the purpose of recommending nominees for election to the Company's Board of Directors or for other purposes, the adoption of the formal process did clarify that stockholders may
communicate directly with the Board, whether for the purpose of recommending nominees for election to the Company's Board of Directors or for other purposes. The formal process adopted by the Board
permits stockholders to communicate with the Board either in writing, addressed to the Board at the Company's headquarters at 6350 South 3000 East, Salt Lake City, Utah 84121, or by
e-mail, sent to </FONT><FONT SIZE=2><I>boardofdirectors@overstock.com</I></FONT><FONT SIZE=2>. All communications from stockholders regarding matters appropriate for stockholder
communications with the Board and delivered as described will be delivered to Board members. </FONT></P>

<P><FONT SIZE=2><A
NAME="dg14601_annual_meeting_attendance"> </A>
<A NAME="toc_dg14601_11"> </A>
<BR></FONT><FONT SIZE=2><B>Annual Meeting Attendance    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company's policy is that Board members should attend annual stockholder meetings if reasonably possible. All the members of the Board attended the 2006 annual
stockholders meeting. </FONT></P>

<P><FONT SIZE=2><A
NAME="dg14601_code_of_ethics"> </A>
<A NAME="toc_dg14601_12"> </A>
<BR></FONT><FONT SIZE=2><B>Code of Ethics    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has adopted a code of ethics that applies to all of the Company's directors and employees, including the Company's principal executive officer,
principal financial officer, principal accounting officer or controller, or persons performing similar functions. The Company will provide a copy of the code of ethics to any person without charge,
upon request. Requests for a copy of the code of ethics may be made in writing addressed to: General Counsel, Overstock.com,&nbsp;Inc., 6350 South 3000 East, Salt Lake City, Utah 84121. </FONT></P>

<P><FONT SIZE=2><A
NAME="dg14601_policies_and_procedure__dg102496"> </A>
<A NAME="toc_dg14601_13"> </A>
<BR></FONT><FONT SIZE=2><B>Policies and Procedures Regarding Related Party Transactions    <BR>    </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board has established a written policy and procedures for the review, approval or ratification of related party transactions. Under the Board's policy, any
related party transaction that would be required to be disclosed pursuant to Item 404 of Regulation&nbsp;S-K is subject to the prior approval of the Audit Committee unless prior approval
is not feasible, in which case the transaction is required to be considered at the Audit Committee's next meeting and, if the Audit Committee determines it to be appropriate, may be ratified at that
meeting. In determining whether to approve or ratify a related party transaction, the Audit Committee takes into account, among other factors it deems appropriate, whether the transaction is on terms
no less favorable to the Company than terms generally available from an unrelated person under the same or similar circumstances, and the extent of the related person's interest in the transaction. No
member of the Audit Committee participates in any approval or ratification of a related party transaction in which such member is a related person, other than to provide all material information
regarding the transaction, including information regarding the extent of the member's interest in the transaction, to the Audit Committee. If a related party transaction will be ongoing, the Audit
Committee may establish guidelines or other parameters or conditions relating to the Company's participation in the transaction. The Audit Committee may from time to time pre-approve types
or categories of transactions by related persons, such as purchases of products or services offered by the Company on the terms such products or services are offered to the public. </FONT></P>


<P><FONT SIZE=2><A
NAME="dg14601_information_regarding___dg102402"> </A>
<A NAME="toc_dg14601_14"> </A>
<BR></FONT><FONT SIZE=2><B>Information Regarding Director Nominee and Other Directors    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Set forth below is certain information as of the record date regarding the nominee for election and all other directors of Overstock whose term of office
continues after the 2007 Annual Meeting. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>16</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_dg14601_1_17"> </A>
<BR>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dg14601_class_ii_directors_(term_expir__cla03235"> </A>
<A NAME="toc_dg14601_15"> </A>
<BR></FONT><FONT SIZE=2><B>Class&nbsp;II Directors (Term Expiring in 2007) and Nominee for Election for Terms Expiring in 2010    <BR>    </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="78%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="29%" ALIGN="LEFT"><FONT SIZE=1><B>Name<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="5%" ALIGN="CENTER"><FONT SIZE=1><B>Age</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="29%" ALIGN="CENTER"><FONT SIZE=1><B>Position with the Company</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="29%" ALIGN="CENTER"><FONT SIZE=1><B>Director Since</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="29%"><FONT SIZE=2>Jason C. Lindsey</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>37</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="29%"><FONT SIZE=2>Director, President and Chief Operating Officer</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="29%"><FONT SIZE=2>June 1999 to October 2002 and October 2005 to present</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Jason C. Lindsey</I></FONT><FONT SIZE=2> is currently the President and Chief Operating Officer and a Director of Overstock. He has served as our President and
Chief Operating Officer since April&nbsp;2006 and as a Director since October&nbsp;2005. He previously served as a Director from June&nbsp;1999 to October&nbsp;2002, and as our Chief Financial
Officer from June&nbsp;1999 to August&nbsp;2003 and as our President from April&nbsp;2003 to August&nbsp;2003. From June&nbsp;1998 to January&nbsp;2001 and from September&nbsp;2003 to
present, Mr.&nbsp;Lindsey was and is the Controller of the Haverford Group, an investment company and an affiliate of Overstock. Prior to joining the Haverford Group, Mr.&nbsp;Lindsey was an
auditor with Price Waterhouse LLP from January&nbsp;1996 to June&nbsp;1998. Mr.&nbsp;Lindsey has a Bachelor of Arts and a Master's degree in accounting from Utah State University. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dg14601_class_iii_directors_(term_expiring_in_2008)"> </A>
<A NAME="toc_dg14601_16"> </A>
<BR></FONT><FONT SIZE=2><B>Class&nbsp;III Directors (Term Expiring in 2008)    <BR>    </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="78%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="29%" ALIGN="LEFT"><FONT SIZE=1><B>Name<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="5%" ALIGN="CENTER"><FONT SIZE=1><B>Age</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="29%" ALIGN="CENTER"><FONT SIZE=1><B>Position with the Company</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="29%" ALIGN="CENTER"><FONT SIZE=1><B>Director Since</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="29%"><FONT SIZE=2>Allison H. Abraham</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>44</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="29%"><FONT SIZE=2>Director</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="29%"><FONT SIZE=2>March 2002</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="29%"><FONT SIZE=2>Ray J. Groves</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>71</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="29%"><FONT SIZE=2>Director</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="29%"><FONT SIZE=2>October 2005</FONT></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Allison H. Abraham</I></FONT><FONT SIZE=2> has served as a Director of Overstock since March&nbsp;2002 and is currently a consultant to several early stage
companies. She is a member of the Audit Committee and Chair of the Compensation Committee. Ms.&nbsp;Abraham served as President and as a director of LifeMinders,&nbsp;Inc., an online direct
marketing company, from May&nbsp;2000 until the acquisition of LifeMinders by Cross Media Marketing Corp. in October&nbsp;2001. Prior to joining LifeMinders, Ms.&nbsp;Abraham served as Chief
Operating Officer of iVillage&nbsp;Inc., an online media company, from May&nbsp;1998 to May&nbsp;2000. From February&nbsp;1997 to April&nbsp;1998, Ms.&nbsp;Abraham was President, Chief
Operating Officer and a director of Shoppers Express, an online grocery service, and also served as Vice President of Sales and Marketing for several months prior to her promotion. From 1992 to 1996,
Ms.&nbsp;Abraham held several marketing and management positions at Ameritech Corporation. She was employed at American Express Travel Related Services in New York City from 1988 to 1992, focusing
on the launch of new products and loyalty programs. Ms.&nbsp;Abraham holds a Bachelor of Arts in Economics from Tufts University and a MBA degree from the Darden School at the University of
Virginia. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Ray J. Groves</I></FONT><FONT SIZE=2> has served as a Director of Overstock since October&nbsp;2005. He is Chair of the Audit Committee and a member of the
Compensation Committee. Mr.&nbsp;Groves was with Ernst&nbsp;&amp; Young for 37&nbsp;years serving as Chairman and Chief Executive Officer for the last 17&nbsp;years until his retirement in 1994.
He then served as Chairman of Legg Mason Merchant Banking&nbsp;Inc. from 1995 to 2001, and was President, Chairman and Senior Advisor of Marsh&nbsp;Inc. from 2001 to 2005. Mr.&nbsp;Groves also
serves on the board of directors of Boston Scientific Corporation and Electronic Data Systems Corporation. He is a member of the Council on Foreign Relations. Mr.&nbsp;Groves is a former member of
the Board of Governors of the American Stock Exchange and the National Association of Securities Dealers. Mr.&nbsp;Groves is former Chairman of the Board of Directors of the American Institute of
Certified Public Accountants. He is a member and former Chair of the Board of Directors of the Ohio State University Foundation and a member of the Dean's Advisory Council of the Fisher College of
Business. He is a former member of the Board of Overseers of The Wharton School of the University of Pennsylvania and served as the Chairman of its Center for the Study of the Service Sector.
Mr.&nbsp;Groves is a managing director of the Metropolitan Opera Association. Mr.&nbsp;Groves received a B.S. degree in Business from The Ohio State University. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>17</FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dg14601_class_i_directors_(term_expiring_in_2009)"> </A>
<A NAME="toc_dg14601_17"> </A>
<BR></FONT><FONT SIZE=2><B>Class&nbsp;I Directors (Term Expiring in 2009)    <BR>    </B></FONT></P>

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<TABLE WIDTH="78%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="29%" ALIGN="LEFT"><FONT SIZE=1><B>Name<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="5%" ALIGN="CENTER"><FONT SIZE=1><B>Age</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="29%" ALIGN="CENTER"><FONT SIZE=1><B>Position with the Company</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="29%" ALIGN="CENTER"><FONT SIZE=1><B>Director Since</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="29%"><FONT SIZE=2>Patrick M. Byrne</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>44</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="29%"><FONT SIZE=2>Chief Executive Officer and Director</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="29%"><FONT SIZE=2>October 1999</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="29%" VALIGN="TOP"><FONT SIZE=2>Barclay (Clay) F. Corbus</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>40</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="29%" VALIGN="TOP"><FONT SIZE=2>Director</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="29%" VALIGN="TOP"><FONT SIZE=2>March 2007</FONT></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Dr.&nbsp;Patrick M. Byrne</I></FONT><FONT SIZE=2> has served as our principal executive officer and as a Director since October&nbsp;1999, as Chairman of the
Board from February&nbsp;2001 through October&nbsp;2005 and from April&nbsp;2006 to the present, and currently serves as our Chief Executive Officer. From September&nbsp;1997 to
May&nbsp;1999, Dr.&nbsp;Byrne served as President and Chief Executive Officer of Fechheimer Brothers,&nbsp;Inc., a manufacturer and distributor of uniforms. From 1995 until its sale in
September&nbsp;1999, Dr.&nbsp;Byrne was Chairman, President and Chief Executive Officer of Centricut, LLC, a manufacturer and distributor of industrial torch parts. From 1994 to the present,
Dr.&nbsp;Byrne has served as a Manager of the Haverford Group, an investment company and an affiliate of Overstock. Dr.&nbsp;Byrne has a Bachelor of Arts degree in Chinese studies from Dartmouth
College, a Master's degree from Cambridge University as a Marshall Scholar, and a Ph.D. in philosophy from Stanford University. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Barclay (Clay) F. Corbus</I></FONT><FONT SIZE=2> has served as a Director of Overstock since March&nbsp;2007. He is a member of the Audit Committee.
Mr.&nbsp;Corbus has served as Co-CEO of WR Hambrecht&nbsp;+&nbsp;Co. since July&nbsp;2004, and prior to that date served in other executive positions with WR
Hambrecht&nbsp;+&nbsp;Co. Prior to joining WR Hambrecht&nbsp;+&nbsp;Co in March&nbsp;1999, Mr.&nbsp;Corbus was in the investment banking group at Donaldson, Lufkin and Jenrette.
Mr.&nbsp;Corbus graduated from Dartmouth College with an AB in Government and has an MBA in Finance from Columbia Business School. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dg14601_compensation_committee__dg102475"> </A>
<A NAME="toc_dg14601_18"> </A>
<BR></FONT><FONT SIZE=2><B>COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During 2006: </FONT></P>

<UL>
<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>None
of the members of the Compensation Committee was an officer (or former officer) or employee of the Company or any of its subsidiaries;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>None
of the members of the Compensation Committee was a participant in any "related person" transaction;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>None
of the Company's executive officers served on the Compensation Committee of another entity where one of that entity's officers served on the Company's Board or as a
member of its Compensation Committee; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>None
of the Company's executive officers was a director of another entity where one of that entity's officers served on the Company's Compensation Committee. </FONT></DD></DL>
</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dg14601_compensation_discussion_and_analysis"> </A>
<A NAME="toc_dg14601_19"> </A>
<BR></FONT><FONT SIZE=2><B>COMPENSATION DISCUSSION AND ANALYSIS    <BR>    </B></FONT></P>

<P><FONT SIZE=2><A
NAME="dg14601_introduction."> </A>
<A NAME="toc_dg14601_20"> </A></FONT> <FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Introduction. </B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee administers our executive compensation program. The
committee, which is composed entirely of independent directors, is responsible for
reviewing and approving the compensation policies for executive officers and directors, for reviewing and approving all forms of correspondence for our executive officers and directors, for
administering our incentive compensation programs (including our stock option plans and our Performance Share Plan), for approving and overseeing the administration of our employee benefits programs,
and for providing insight and guidance to management with respect to employee compensation and retention generally. Following is a discussion of the objectives and implementation of our executive
compensation programs. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>18</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Compensation Committee operates under a charter adopted by the board of directors, a copy of which is attached as Exhibit&nbsp;B to this proxy statement. The committee annually
reviews the adequacy of its charter and recommends changes to the board for approval as it considers appropriate. The committee meets at scheduled times during the year and also acts upon occasion by
written consent. The chair of the committee reports on committee activities and makes committee recommendations at meetings of the board of directors. The committee collects and analyzes comparative
executive compensation information from relevant peer groups, approves executive salary adjustments, approves awards under incentive/bonus plans, approves discretionary bonuses, and administers the
Company's 2005 Equity Incentive Plan and Performance Share Plan. Additionally, from time to time, the committee reviews other human resource issues, including qualified and non-qualified
benefits, management performance appraisals, and succession planning. Our Chief Executive Officer and our President make recommendations and participate with respect to decisions concerning other
executive officers. The committee has not used outside compensation consultants to determine or recommend the amount or form of executive or director compensation. </FONT></P>

<P><FONT SIZE=2><A
NAME="dg14601_compensation_objectives."> </A>
<A NAME="toc_dg14601_21"> </A>
<BR></FONT><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compensation Objectives. </B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our executive compensation programs seek to attract and retain competent executive management who will
build long-term economic value for the Company. Our Chief
Executive Officer has refused to accept any salary or bonus since our inception, and prior to 2007 we intentionally set all executive salaries at levels below the amounts we believe our executives
could have earned elsewhere. In February&nbsp;2007, in order to retain our executive management the committee authorized increases to our executives' salaries, but nevertheless continues to adhere
to a compensation philosophy that the executive salary and bonus levels should remain modest in comparison to those paid at comparable companies, and that executives' opportunities for more
significant compensation should be tied closely to the Company's performance. The objectives of our executive compensation plans and programs are to: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>Emphasize
the enhancement of the economic value of the Company;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>Facilitate
the retention of senior executives;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>Deliver
the total executive compensation package in a cost-effective manner; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>Encourage
management ownership of our common stock. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
executive compensation policy is designed to encourage decisions and actions that have a positive effect on our economic value and our overall corporate performance. The Performance
Share Plan is designed to have no value to the executives or other participants if the Company's economic value fails to increase as described below, and to have increasing value if the Company's
economic value and stock price increase. Similarly, grants under the Company's 2005 Equity Incentive Plan (to date in the form of stock option grants) have no value to the executives or other
participants if the Company's stock price fails to increase above the exercise prices of the respective option grants. Grants under the Performance Share Plan are included in the Summary Compensation
Table and in the Grants of Plan-Based Awards Table below. No grants were made to named executive officers during 2006 under the 2005 Equity Incentive Plan. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
accounting and tax treatment of particular forms of compensation generally do not affect the committee's compensation decisions. However, the committee evaluates the effects of
accounting and
tax treatment on an ongoing basis and takes those effects into account to the extent it considers appropriate. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
committee reviews executive pay practices at other similarly situated companies as part of its process of determining the appropriate levels of compensation. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>19</FONT></P>

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<P><FONT SIZE=2><A
NAME="dg14601_elements_of_compensation."> </A>
<A NAME="toc_dg14601_22"> </A>
<BR></FONT><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Elements of Compensation. </B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The elements of total compensation the Company pays to its named executive officers identified in the
Summary Compensation Table below (the "Named Executive
Officers") other than its Chief Executive Officer (the "CEO") are as follows: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>Base
salary;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>Annual
individual cash bonuses;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>Participation
in an Annual Bonus Pool;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>Awards
under our Performance Share Plan;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>Awards
under our 2005 Equity Incentive Plan;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>Matching
contributions under our 401(k) plan; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>Benefits
under our health and welfare benefits plans. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
of these elements is discussed below. Our CEO declined to accept any compensation during 2006 except for a grant of 25,000 performance shares under the Company's Performance Share
Plan, as reflected in the Summary Compensation Table and discussed below, and assistance with Schedule&nbsp;13D filings as reflected in the Summary Compensation Table. The amount shown for the CEO
in the Option Awards column of the Summary Compensation Table reflects stock option grants made in prior years. </FONT></P>

<P><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Base Salary.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The base salaries of the Named Executive Officers are reviewed by the committee annually. The committee reviews
peer group data as well as a subjective evaluation of individual performance. Salaries in 2006 were intentionally set at levels below the amounts the committee believes the executives could have
earned elsewhere. Salary income for each Named Executive Officer for calendar year 2006 is reported in the Summary Compensation Table. </FONT></P>


<P><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Annual Individual Cash Bonuses.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Annual individual cash bonuses paid to the Named Executive Officers are determined by the
committee annually and are intended to serve both as an incentive for individual performance and as a retention mechanism. The amounts of the bonuses are determined by the committee based on
recommendations made by the CEO and on the committee's subjective view of the performance of the respective Named Executive Officers during the prior year. The amounts are intended to be sufficient to
enable the Company to retain the services of the Named Executive officers, and to be meaningful to the Named Executive Officers as an incentive to superior efforts and performance in the following
year, but without being more than the amounts necessary to achieve these purposes. Bonus amounts paid to each Named Executive Officer for calendar year 2006 are reported in the Summary Compensation
Table. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>20</FONT></P>

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<P><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Annual Bonus Pool.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In January&nbsp;2006 the committee approved the establishment of a bonus plan for 2006 for Company
executives with a target of 100% of salaries of the executives. The actual amount of the bonus pool was intended to be established at the end of 2006 by the committee, after considering the CEO's
recommendations, according to the committee's judgment of overall accomplishments against the Company's 2006 business plan and growth in the economic value of the Company of at least 20%. The actual
bonus pool was intended to range from 0% to 200% of the target amount, and individual executive payments from the bonus pool were intended to range from 0% of salary to 200% of salary. The plan is
designed to provide at-risk (incentive) compensation that aligns management's financial interests with those of our stockholders. Because the committee determined that the Company failed
to achieve growth in its economic value of at least 20% during 2006, no amounts were paid under this plan with respect to 2006. </FONT></P>


<P><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Performance Share Plan.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The committee approved the adoption of the Company's Performance Share Plan in January&nbsp;2006.
The Performance Share Plan provides for a three-year period for the measurement of the Company's attainment of the performance goal described in the form of grant, but at the Company's
sole option the Company may make a payment of estimated amounts payable to a plan participant after two years. The performance goal is normally measured by growth in economic value, as defined in the
plan. The amount of payments due to participants under the plan is a function of the then current market price of a share of the Company's common stock, multiplied by a percentage dependent on the
extent to which the performance goal has been attained, which is between 0% and 200%. If the growth in economic value is 10% compounded annually or less, the percentage will be 0%. If the growth in
economic value is 25% compounded annually, the percentage is 100%. If the growth in economic value is 40% compounded annually or more, the percentage is 200%. If the percentage growth is between these
percentages, the payment percentage is determined on the basis of straight line interpolation. Amounts payable under the plan will be payable in cash unless the Company's stockholders approve
settlement of awards under the plan with shares of common stock. The provisions of section&nbsp;162(m) of the Internal Revenue Code could limit the Company's ability to deduct payments made pursuant
to the plan. The awards granted under the plan to each Named Executive Officer in 2006 are set forth in the Grants of Plan-Based Awards Table and the dollar amount recognized as
compensation cost for financial statement reporting purposes for calendar year 2006 with respect to each such award (determined in accordance with FAS&nbsp;123R without regard to forfeitures) is set
forth in the Summary Compensation Table. The plan is designed to provide at-risk (incentive) compensation that aligns management's financial interests with those of our stockholders. No
actual cash or other payments were made under these awards during 2006. </FONT></P>

<P><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2005 Equity Incentive Plan.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We use the grant of stock options under our 2005 Equity Incentive Plan to provide
long-term incentive compensation opportunities to our key employees, including the Named Executive Officers. The plan was approved by the stockholders in 2005 and provides for the grant of
awards, including qualified and non-qualified stock options to purchase shares of our common stock. Options granted under the plan have been granted at a per share exercise price which is
not less than 100% of the fair market value of the underlying shares on the date that the option is granted. Accordingly, options granted under the plan have no intrinsic value unless the market price
of the Company's common stock increases after the date of grant. The plan also provides for the grant of restricted stock awards and other types of awards, although to date we have 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. We have not adopted any specific policy regarding the amount or timing of any stock-based compensation under the plan. No options were granted to any Named Executive Officer in 2006.
The dollar amount recognized as compensation cost for financial statement reporting purposes for calendar year 2006 with respect to options granted in prior years (determined in accordance with
FAS&nbsp;123R without regard to forfeitures) is set forth in the Summary Compensation Table. Information concerning </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>21</FONT></P>

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<P><FONT SIZE=2>the
number of options held by each Named Executive Officer as of December&nbsp;31, 2006 is set forth in the Outstanding Equity Awards at Fiscal Year-End Table. </FONT></P>


<P><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;401(k) Plan.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We maintain a 401(k) plan, in which Named Executive Officers may participate. During 2006 we matched 50% of
participants' contributions on up to 6% of their salaries and contributed 2% as a profit-sharing contribution. The amounts of matching contributions and profit sharing contributions allocated to our
Named Executive Officers are set forth in the Summary Compensation Table. Participation in the 401(k) plan is available to employees on a non-discriminatory basis. </FONT></P>

<P><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Health and Welfare Benefits.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We provide health, life and disability insurance and other employee benefits programs to our
employees, including our Named Executive Officers. The committee is responsible for overseeing the administration of these programs and believes that the employee benefits programs should be generally
comparable to those maintained by comparable companies so that we are able to attract and retain officers and other employees. Our employee benefits plans are provided on a
non-discriminatory basis to all employees. </FONT></P>

<P><FONT SIZE=2><A
NAME="di14601_executive_compensation_action_taken_after_year-end."> </A>
<A NAME="toc_di14601_1"> </A>
<BR></FONT><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive Compensation Action Taken After Year-End. </B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;For 2006, the Named Executive Officers (other than our CEO, who received no
salary) received salaries that were intentionally set at below-market levels.
Effective January&nbsp;1, 2007 the committee approved increases to the base salaries of the Named Executive Officers (other than the CEO, who continued to receive no salary), based upon a review of
peer compensation at other Utah-based companies, with the objective of retaining the Named Executive Officers. The base salaries of the Named Executive Officers, other than the CEO, were
each doubled, from $100,000 per year to $200,000 per year, except that the base salary of the President and Chief Operating Officer was increased from $100,000 to $300,000 per year. The committee
approved these increases to the base salary levels in order to bring the base salary levels closer to the amounts the committee believes the executives would earn elsewhere, with the goal of retaining
the Named Executive Officers. At the same time, the committee approved cash bonuses for the Named Executive Officers (other than the CEO, who declined to accept any bonus) of $120,000 each, except for
the President and Chief Operating Officer, who received a bonus of $180,000. The committee approved these bonus payments in part based on its subjective evaluation of the performance and contributions
of the Named Executive Officers, and in part to retain the Named Executive Officers. </FONT></P>

<P><FONT SIZE=2><A
NAME="di14601_timing_of_stock_option_grants."> </A>
<A NAME="toc_di14601_2"> </A>
<BR></FONT><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Timing of Stock Option Grants. </B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company does not have any program, plan or practice to time option grants to its 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, 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. Because the Compensation Committee approves stock
option grants at some of its regularly scheduled meetings, option grants are sometimes made within a week before or after the public release of financial results or other material information.
However, that is 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.
The Company also does not set the grant date of its stock option grants to new executives in coordination with the release of material non-public information, and has not timed, and does
not plan to time, its release of material non-public information for the purpose of affecting the value of executive compensation. </FONT></P>

<P><FONT SIZE=2><A
NAME="di14601_severance_and_change_of_control_arrangements."> </A>
<A NAME="toc_di14601_3"> </A>
<BR></FONT><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Severance And Change of Control Arrangements. </B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;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 issued under our stock option plans, and have certain payment rights under our Performance Share Plan, and the vesting of options or rights issued under </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>22</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=25,EFW="2176990",CP="OVERSTOCK.COM, INC.",DN="1",CHK=656959,FOLIO='22',FILE='DISK111:[07ZBB1.07ZBB14601]DI14601A.;46',USER='FALVARE',CD='28-MAR-2007;17:14' -->
<A NAME="page_di14601_1_23"> </A>

<P><FONT SIZE=2>those
plans 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 optionee within a period of
time after a change of control has occurred. The Performance Share Plan provides that if a participant is terminated within 24&nbsp;months after a change of control (as defined in the plan), the
participant's award under the plan will be cancelled and the participant will receive a payment equal to the then market value of the common stock multiplied by the harvest percentage (as previously
described), with the harvest percentage being determined based on the extent to which the relevant performance goal had been achieved as of the end of the calendar quarter prior to the employee's
termination, and contains a similar provision applicable if the Company sells a business unit to a purchaser which does not assume responsibility for awards held by employees of that business unit.
The 2005 Equity Incentive Plan provides that in the event of a merger or change of control (as defined in the plan) outstanding options shall be assumed by the successor or an equivalent option shall
be substituted, or the option shall vest and the participant will have the right to exercise the option. The Compensation Committee believes that these provisions are reasonable. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="di14601_report_of_compensation_committee"> </A>
<A NAME="toc_di14601_4"> </A>
<BR></FONT><FONT SIZE=2><B>REPORT OF COMPENSATION COMMITTEE    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee has reviewed the Compensation Discussion and Analysis and discussed it with management. Based on its review and discussions with
management, the committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in the Company's Annual Report on Form&nbsp;10-K for 2006 and
the Company's 2007 proxy statement. This report is provided by the following independent directors, who comprise the Compensation Committee: </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>Allison
H. Abraham<BR>
Ray J. Groves </FONT></P>

<P><FONT SIZE=2><B>Compensation Paid to Executive Officers  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth information for the year ended December&nbsp;31, 2006 concerning the compensation for services in all capacities to the Company
and its subsidiaries of our principal executive officer and our principal financial officer, as well as our other three 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". </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="di14601_summary_compensation_table"> </A>
<A NAME="toc_di14601_5"> </A>
<BR></FONT><FONT SIZE=2><B>SUMMARY COMPENSATION TABLE    <BR>    </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="18%" ALIGN="LEFT"><FONT SIZE=1><B>Name and Principal Position<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="4%" ALIGN="CENTER"><FONT SIZE=1><B>Year</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Salary<BR>
($)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Bonus<BR>
(1)($)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Stock<BR>
Awards(2)<BR>
($)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Option<BR>
Awards(3)<BR>
($)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Non-Equity<BR>
Incentive Plan<BR>
Compensation(4)<BR>
($)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>All Other<BR>
Compensation(5)<BR>
($)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Total<BR>
($)</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="18%"><FONT SIZE=1>Patrick M. Byrne, CEO</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=1>2006</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>0</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>0</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>114,235</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>16,583</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=1>0</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=1>6,750</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>137,568</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="18%"><FONT SIZE=1>David K. Chidester, Senior Vice President, Finance</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=1>2006</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>100,000</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>120,000</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>45,694</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>89,584</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=1>0</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=1>12,375</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>367,653</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="18%"><FONT SIZE=1>Jason C. Lindsey, President and Chief Operating Officer</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=1>2006</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>100,000</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>180,000</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>114,235</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>205,200</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=1>0</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=1>3,281</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>602,717</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="18%"><FONT SIZE=1>Stormy D. Simon, Senior Vice President, Customer Care, PR and Branding</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=1>2006</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>100,000</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>120,000</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>68,541</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>167,854</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=1>0</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=1>12,375</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>468,770</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="18%"><FONT SIZE=1>Steven P. Tryon, Senior Vice President, Logistics</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=1>2006</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>100,000</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>120,000</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>45,694</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>165,900</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=1>0</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=1>10,979</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>442,573</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<HR NOSHADE ALIGN="LEFT" WIDTH="120">
<DL compact>
<DT style='margin-bottom:-9pt;'><FONT SIZE=1>(1)</FONT></DT><DD><FONT SIZE=1>Bonuses
were paid in February&nbsp;2007 and relate to 2006.
<BR><BR></FONT></DD><DT style='margin-bottom:-9pt;'><FONT SIZE=1>(2)</FONT></DT><DD><FONT SIZE=1>The
Stock Awards column reflects grants in 2006 under the Company's Performance Share Plan. The Performance Share Plan is a long-term incentive-based plan. Performance
goals under the plan are measured by growth in economic value, as </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>23</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=26,EFW="2176990",CP="OVERSTOCK.COM, INC.",DN="1",CHK=59542,FOLIO='23',FILE='DISK111:[07ZBB1.07ZBB14601]DI14601A.;46',USER='FALVARE',CD='28-MAR-2007;17:14' -->
<A NAME="page_di14601_1_24"> </A>
<UL>

<P><FONT SIZE=1>defined
in the plan, and are specified in the grants made to participants in the plan. The plan provides for a three-year period for the measurement of the Company's attainment of the
performance goal, but at the Company's sole option the Company may make a payment of estimated amounts payable to a plan participant after two years. The payments due to participants under the plan
are a function of the then-current market price of a share of the Company's common stock, multiplied by a percentage dependent on the extent to which the performance goal has been
attained, which will be between 0% and 200%. If the growth in economic value is 10% compounded annually or less, the percentage will be 0%. If the growth in economic value is 25% compounded annually,
the percentage will be 100%. If the growth in economic value is 40% compounded annually or more, the percentage will be 200%. If the percentage growth is between these percentages, the payment
percentage will be determined on the basis of straight line interpolation. Amounts payable under the plan are payable in cash unless the Company's stockholders approve settlement of awards under the
plan with shares of common stock. The amounts reflect the dollar amount recognized for financial statement reporting purposes for the fiscal year ended December&nbsp;31, 2006, in accordance with
FAS&nbsp;123(R) without regard to estimated forfeitures. Assumptions used in the calculation of these amounts are discussed in Note&nbsp;19 to the Company's audited financial statements for the
fiscal year ended December&nbsp;31, 2006, included in the Company's Annual Report on Form&nbsp;10-K filed with the Securities and Exchange Commission on or around March&nbsp;14,
2007. </FONT></P>

</UL>
<DL compact>
<DT style='margin-bottom:-9pt;'><FONT SIZE=1>(3)</FONT></DT><DD><FONT SIZE=1>The
Option Awards column reflects awards under the Company's 2005 Equity Incentive Plan and previous equity incentive plans. The amounts reflect the dollar amount recognized for
financial statement reporting purposes for the fiscal year ended December&nbsp;31, 2006, in accordance with FAS&nbsp;123(R) without regard to estimated forfeitures and thus include amounts from
awards granted prior to 2006. No awards were made under this plan to any Named Executive Officer during 2006. Assumptions used in the calculation of these amounts are discussed in Note&nbsp;18 to
the Company's audited financial statements for the fiscal year ended December&nbsp;31, 2006, included in the Company's Annual Report on Form&nbsp;10-K filed with the Securities and
Exchange Commission on or around March&nbsp;14, 2007.
<BR><BR></FONT></DD><DT style='margin-bottom:-9pt;'><FONT SIZE=1>(4)</FONT></DT><DD><FONT SIZE=1>This
column reflects the Company's 2006 Bonus Plan. The 2006 Bonus Plan is an incentive plan for Company executives. The plan established a target of 100% of the amount of the
executives' salaries. The actual amount of the bonus pool was to be established at the end of 2006 by the Compensation Committee, after considering the President's recommendations, according to the
Compensation Committee's judgment of overall accomplishments against the Company's 2006 business plan and growth in the economic value of the Company of at least 20%. The actual bonus pool was to
range from 0% to 200% of the target amount, and individual executive payments from the bonus pool were to range from 0% of salary to 200% of salary. Because the Compensation Committee determined that
the Company had not achieved growth in the economic value of the Company of at least 20%, no payments were made under this plan.
<BR><BR></FONT></DD><DT style='margin-bottom:-9pt;'><FONT SIZE=1>(5)</FONT></DT><DD><FONT SIZE=1>Except
with respect to the CEO, amounts shown are 401(k) matching contributions from the Company and were made in the form of Company common stock. With respect to the CEO, the amount
shown is for assistance with Schedule&nbsp;13D filings. </FONT></DD></DL>
<BR>

<P><FONT SIZE=2><B>Grants of Plan-Based Awards  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth information concerning grants of awards pursuant to plans made to the Named Executive Officers during the year ended
December&nbsp;31, 2006. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="di14601_grants_of_plan-based_awards"> </A>
<A NAME="toc_di14601_6"> </A>
<BR></FONT><FONT SIZE=2><B>GRANTS OF PLAN-BASED AWARDS    <BR>    </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="18%" ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="6%" ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" ROWSPAN=2><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=8 ROWSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Estimated Future Payouts<BR>
Under Non-Equity Incentive<BR>
Plan Awards(1)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" ROWSPAN=2><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Estimated Future Payouts<BR>
Under Equity Incentive<BR>
Plan Awards(5)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="18%" ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="6%" ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" ROWSPAN=2><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Grant Date<BR>
Fair Value<BR>
of Stock<BR>
and Option<BR>
Awards(9)</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="18%" ALIGN="LEFT"><FONT SIZE=1><B>Name<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="6%" ALIGN="CENTER"><FONT SIZE=1><B>Grant<BR>
Date</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Threshold<BR>
(2)($)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Target<BR>
(3)($)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Maximum<BR>
(4)($)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="CENTER"><FONT SIZE=1><B>Threshold<BR>
(6)(#)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="6%" ALIGN="CENTER"><FONT SIZE=1><B>Target<BR>
(7)(#)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="CENTER"><FONT SIZE=1><B>Maximum<BR>
(8)(#)</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="18%"><FONT SIZE=1>Patrick M. Byrne</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>1/23/06</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>N/A</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>N/A</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>N/A</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>0</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>395,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>790,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>685,000</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="18%"><FONT SIZE=1>David K. Chidester</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>1/23/06</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>0</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>100,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>200,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>0</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>158,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>316,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>246,100</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="18%"><FONT SIZE=1>Jason C. Lindsey</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>1/23/06</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>0</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>100,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>200,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>0</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>395,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>790,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>685,000</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="18%"><FONT SIZE=1>Stormy D. Simon</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>1/23/06</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>0</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>100,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>200,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>0</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>237,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>474,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>369,150</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="18%"><FONT SIZE=1>Steven P. Tryon</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>1/23/06</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>0</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>100,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>200,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>0</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>158,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>316,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>246,100</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<HR NOSHADE ALIGN="LEFT" WIDTH="120">
<DL compact>
<DT style='margin-bottom:-9pt;'><FONT SIZE=1>(1)</FONT></DT><DD><FONT SIZE=1>Amounts
reported relate to the Company's 2006 Bonus Plan, under which participants had an opportunity to earn bonuses as described in footnote 4 to the Summary Compensation Table. No
bonuses were paid under this plan with respect to 2006.
<BR><BR></FONT></DD><DT style='margin-bottom:-9pt;'><FONT SIZE=1>(2)</FONT></DT><DD><FONT SIZE=1>The
minimum amount payable under the plan was $0. </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>24</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=27,EFW="2176990",CP="OVERSTOCK.COM, INC.",DN="1",CHK=876079,FOLIO='24',FILE='DISK111:[07ZBB1.07ZBB14601]DI14601B.;28',USER='FALVARE',CD='28-MAR-2007;17:14' -->
<A NAME="page_di14601_1_25"> </A>
<DL compact>
<DT style='margin-bottom:-9pt;'><FONT SIZE=1>(3)</FONT></DT><DD><FONT SIZE=1>The
target amount was 100% of the executive's salary.
<BR><BR></FONT></DD><DT style='margin-bottom:-9pt;'><FONT SIZE=1>(4)</FONT></DT><DD><FONT SIZE=1>The
maximum amount was 200% of the executive's salary.
<BR><BR></FONT></DD><DT style='margin-bottom:-9pt;'><FONT SIZE=1>(5)</FONT></DT><DD><FONT SIZE=1>Amounts
reported relate to the Company's Performance Share Plan and the Company's 2005 Equity Incentive Plan; however, no awards were made under the 2005 Equity Incentive Plan to any
named executive officer during 2006.
<BR><BR></FONT></DD><DT style='margin-bottom:-9pt;'><FONT SIZE=1>(6)</FONT></DT><DD><FONT SIZE=1>If
the Company's growth in economic value is 10% or less compounded annually, the amount payable under the Performance Share Plan is $0.
<BR><BR></FONT></DD><DT style='margin-bottom:-9pt;'><FONT SIZE=1>(7)</FONT></DT><DD><FONT SIZE=1>The
target amount is calculated as the amount that would have been payable if the Company's growth in economic value were 25% compounded annually and the market price of the common
stock were $15.80 per share, which was the closing price on December&nbsp;29, 2006.
<BR><BR></FONT></DD><DT style='margin-bottom:-9pt;'><FONT SIZE=1>(8)</FONT></DT><DD><FONT SIZE=1>The
maximum amount is calculated as the amount that would have been payable if the Company's growth in economic value were 40% or more compounded annually and the market price of the
common stock were $15.80 per share, which was the closing price on December&nbsp;29, 2006.
<BR><BR></FONT></DD><DT style='margin-bottom:-9pt;'><FONT SIZE=1>(9)</FONT></DT><DD><FONT SIZE=1>Amounts
shown relate to grants under the Company's Performance Share Plan. The grant date fair value was determined using an assumed growth in economic value of 25% compounded
annually and the stock price on the date of grant ($24.61 for Mr.&nbsp;Chidester, Ms.&nbsp;Simon and Mr.&nbsp;Tryon, and $27.40 for Messrs.&nbsp;Byrne and Lindsey). </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>25</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=5,SEQ=28,EFW="2176990",CP="OVERSTOCK.COM, INC.",DN="1",CHK=251599,FOLIO='25',FILE='DISK111:[07ZBB1.07ZBB14601]DI14601B.;28',USER='FALVARE',CD='28-MAR-2007;17:14' -->
<A NAME="page_di14601_1_26"> </A>

<P><FONT SIZE=2><B>Outstanding Equity Awards at Fiscal Year-End  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth information concerning outstanding equity awards held by each Named Executive Officer as of December&nbsp;31, 2006. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="di14601_outstanding_equity_awards_at_fiscal_year-end(1)"> </A>
<A NAME="toc_di14601_7"> </A>
<BR></FONT><FONT SIZE=2><B>OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END(1)    <BR>    </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="17%" ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER"><FONT SIZE=1><B>Option Awards(2)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=4 ALIGN="CENTER"><FONT SIZE=1><B>Stock Awards</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="17%" ALIGN="LEFT"><FONT SIZE=1><B>Name<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="CENTER"><FONT SIZE=1><B>Number of<BR>
Securities<BR>
Underlying<BR>
Unexercised<BR>
Options&nbsp;(#)<BR>
Exercisable</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="11%" ALIGN="CENTER"><FONT SIZE=1><B>Number of<BR>
Securities<BR>
Underlying<BR>
Unexercised<BR>
Options&nbsp;(#)<BR>
Unexercisable</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Option<BR>
Exercise<BR>
Price ($)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="CENTER"><FONT SIZE=1><B>Option<BR>
Expiration<BR>
Date</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="14%" ALIGN="CENTER"><FONT SIZE=1><B>Equity Incentive<BR>
Plan Awards:<BR>
Number of Unearned<BR>
Shares, Units or<BR>
Other Rights That<BR>
Have Not Vested (#)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Equity Incentive<BR>
Plan Awards:<BR>
Market or Payout<BR>
Value of Unearned<BR>
Shares, Units or<BR>
Other Rights That<BR>
Have Not Vested ($)(3)</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="17%"><FONT SIZE=1>Patrick M. Byrne</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=1>119,972<BR>
&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=1>&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$<BR></FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=1>5.07<BR>
&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>01/21/07<BR>
&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=1>&#151;<BR>
25,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1><BR>$</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=1>&#151;<BR>
395,000</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="17%"><FONT SIZE=1>David K. Chidester</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=1>9,881<BR>
3,760<BR>
2,378<BR>
18,500<BR>
&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=1>&#151;<BR>
240<BR>
388<BR>
6,500<BR>
&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$<BR>$<BR>$<BR>$<BR></FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=1>5.07<BR>
13.57<BR>
13.09<BR>
18.58<BR>
&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>01/21/07<BR>
03/16/08<BR>
07/28/08<BR>
01/22/09<BR>
&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=1>&#151;<BR>
&#151;<BR>
&#151;<BR>
&#151;<BR>
10,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1><BR><BR><BR><BR>$</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=1>&#151;<BR>
&#151;<BR>
&#151;<BR>
&#151;<BR>
158,000</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="17%"><FONT SIZE=1>Jason C. Lindsey</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=1>4,129<BR>
2<BR>
4,800<BR>
&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=1>&#151;<BR>
2,000<BR>
10,200<BR>
&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$<BR>$<BR>$<BR></FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=1>5.07<BR>
8.54<BR>
35.41<BR>
&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>01/21/07<BR>
04/28/08<BR>
10/24/10<BR>
&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=1>&#151;<BR>
&#151;<BR>
&#151;<BR>
25,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1><BR><BR><BR>$</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=1>&#151;<BR>
&#151;<BR>
&#151;<BR>
395,000</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="17%"><FONT SIZE=1>Stormy D. Simon</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=1>5,293<BR>
6,198<BR>
6,000<BR>
11,100<BR>
5,000<BR>
&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=1>&#151;<BR>
1,009<BR>
1,500<BR>
3,900<BR>
5,000<BR>
&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$<BR>$<BR>$<BR>$<BR>$<BR></FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=1>11.90<BR>
13.09<BR>
12.84<BR>
18.58<BR>
58.30<BR>
&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>04/22/07<BR>
07/28/08<BR>
10/27/08<BR>
01/22/09<BR>
01/24/10<BR>
&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=1>&#151;<BR>
&#151;<BR>
&#151;<BR>
&#151;<BR>
&#151;<BR>
15,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1><BR><BR><BR><BR><BR>$</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=1>&#151;<BR>
&#151;<BR>
&#151;<BR>
&#151;<BR>
&#151;<BR>
237,000</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="17%"><FONT SIZE=1>Steven P. Tryon</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=1>21,000<BR>
&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=1>14,000<BR>
&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$<BR></FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=1>31.03<BR>
&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>08/23/09<BR>
&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=1>&#151;<BR>
10,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1><BR>$</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=1>&#151;<BR>
158,000</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<HR NOSHADE ALIGN="LEFT" WIDTH="120">
<DL compact>
<DT style='margin-bottom:-9pt;'><FONT SIZE=1>(1)</FONT></DT><DD><FONT SIZE=1>Awards
shown in this table consist of option grants under the Company's 2005 Equity Incentive Plan and of grants under the Company's Performance Share Plan.
<BR><BR></FONT></DD><DT style='margin-bottom:-9pt;'><FONT SIZE=1>(2)</FONT></DT><DD><FONT SIZE=1>Options
vest over the first four years of the option term at a rate of 25% at the end of the first year and 2% per month thereafter.
<BR><BR></FONT></DD><DT style='margin-bottom:-9pt;'><FONT SIZE=1>(3)</FONT></DT><DD><FONT SIZE=1>Amounts
shown relate to grants under the Company's Performance Share Plan. The target amount is calculated as the amount that would have been payable if the Company's growth in
economic value were 25% compounded annually and the market price of the common stock were $15.80 per share, which was the closing price on December&nbsp;29, 2006. </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>26</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=6,SEQ=29,EFW="2176990",CP="OVERSTOCK.COM, INC.",DN="1",CHK=171278,FOLIO='26',FILE='DISK111:[07ZBB1.07ZBB14601]DI14601B.;28',USER='FALVARE',CD='28-MAR-2007;17:14' -->
<A NAME="page_di14601_1_27"> </A>

<P><FONT SIZE=2><B>Option Exercises and Stock Vested  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following Option Exercises and Stock Vested table provides additional information about the value realized by our Named Executive Officers on option award
exercises during the year ended December&nbsp;31, 2006. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="di14601_option_exercises_and_stock_vested"> </A>
<A NAME="toc_di14601_8"> </A>
<BR></FONT><FONT SIZE=2><B>OPTION EXERCISES AND STOCK VESTED    <BR>    </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="61%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="26%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=4 ALIGN="CENTER"><FONT SIZE=1><B>Option Awards</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="26%" ALIGN="LEFT"><FONT SIZE=1><B>Name<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="39%" ALIGN="CENTER"><FONT SIZE=1><B>Number of Shares Acquired on Exercise<BR>
(#)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Value Realized on Exercise(1)<BR>
($)</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="26%"><FONT SIZE=2>Patrick M. Byrne</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="39%" ALIGN="RIGHT"><FONT SIZE=2>17,643</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="25%" ALIGN="RIGHT"><FONT SIZE=2>255,647</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="26%"><FONT SIZE=2>David K. Chidester</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="39%" ALIGN="RIGHT"><FONT SIZE=2>8,776<BR>
2,796</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="25%" ALIGN="RIGHT"><FONT SIZE=2>178,416<BR>
63,078</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="26%" VALIGN="TOP"><FONT SIZE=2>Jason C. Lindsey</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="39%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>424</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="25%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>7,335</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="26%" VALIGN="TOP"><FONT SIZE=2>Stormy D. Simon</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="39%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="25%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>&#151;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="26%"><FONT SIZE=2>Steven P. Tryon</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="39%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="25%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->

<HR NOSHADE ALIGN="LEFT" WIDTH="120">
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD><FONT SIZE=2>Calculated
by multiplying the number of shares purchased by the difference between the exercise price and the market price on the date of exercise. </FONT></DD></DL>

<P><FONT SIZE=2><B>Compensation of Directors  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We pay our non-employee directors $20,000 annually at the rate of $5,000 per quarter, and grant options to our non-employee directors,
generally at the first Board meeting after the director first joins the Board, and then periodically thereafter. In 2006 we granted options to our non-employee directors, to purchase 5,000
shares each, on April&nbsp;25, 2006. We also reimburse our directors for out-of-pocket expenses incurred in connection with attending Board and committee meetings. Haverford
Valley, L.C., an affiliate of the Company, and certain affiliated entities which make travel arrangements for our executives, also occasionally make travel arrangements for directors to attend Board
meetings, for which we reimburse Haverford Valley at rates not in excess of commercially available airline rates. The following table sets forth information concerning compensation paid or accrued by
the Company to each non-employee member of the board of directors during the year ended December&nbsp;31, 2006. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="di14601_director_compensation_table"> </A>
<A NAME="toc_di14601_9"> </A>
<BR></FONT><FONT SIZE=2><B>DIRECTOR COMPENSATION TABLE    <BR>    </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="85%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="41%" ALIGN="LEFT"><FONT SIZE=1><B>Name<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Fees Earned or Paid in Cash<BR>
($)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Option Awards(1)<BR>
($)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Total<BR>
($)</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="41%"><FONT SIZE=2>Allison H. Abraham</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT"><FONT SIZE=2>20,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>103,465</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>123,465</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="41%"><FONT SIZE=2>John J. Byrne(2)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT"><FONT SIZE=2>15,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>66,205</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>81,205</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="41%"><FONT SIZE=2>John A Fisher(3)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT"><FONT SIZE=2>20,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>104,152</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>124,152</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="41%"><FONT SIZE=2>Ray J. Groves</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT"><FONT SIZE=2>20,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>90,593</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>110,593</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="41%"><FONT SIZE=2>Gordon S. Macklin(4)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT"><FONT SIZE=2>20,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>95,730</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>115,730</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<HR NOSHADE ALIGN="LEFT" WIDTH="120">
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD><FONT SIZE=2>Reflects
the dollar amount recognized for financial statement reporting purposes for the fiscal year ended December&nbsp;31, 2006 in accordance with FAS&nbsp;123(R) without regard
to estimated forfeitures, and thus includes amounts from awards granted in and prior to 2006. At December&nbsp;31, 2007, the number of options held by each non-employee director were as
follows: Allison H. Abraham: 40,000; John J. Byrne: 0; John A. Fisher: 25,000; Ray J. Groves: 20,000; and Gordon S. Macklin: 32,058.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD><FONT SIZE=2>Mr.&nbsp;John
Byrne resigned from the Board on July&nbsp;31, 2006.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD><FONT SIZE=2>Mr.&nbsp;Fisher
resigned from the Board on February&nbsp;23, 2007.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(4)</FONT></DT><DD><FONT SIZE=2>Mr.&nbsp;Macklin
passed away on January&nbsp;30, 2007. </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>27</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=7,SEQ=30,EFW="2176990",CP="OVERSTOCK.COM, INC.",DN="1",CHK=357551,FOLIO='27',FILE='DISK111:[07ZBB1.07ZBB14601]DI14601B.;28',USER='FALVARE',CD='28-MAR-2007;17:14' -->
<A NAME="page_di14601_1_28"> </A>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="di14601_potential_payments_upo__di102281"> </A>
<A NAME="toc_di14601_10"> </A>
<BR></FONT><FONT SIZE=2><B>POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL    <BR>    </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As described in the Compensation Discussion and Analysis included in this proxy statement, none of our Named Executive Officers has any contractual right to any
severance or change of control payments under any employment or severance agreement. Our Named Executive Officers hold options issued under our stock option plans, and have certain payment rights
under our Performance Share Plan, and the vesting of options or rights issued under those plans 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 Named Executive Officer within a period of time after a change of control has occurred or, under the Performance Share Plan, in connection with
the sale of a business unit by the Company or a termination of the Named Executive Officer without cause or a constructive termination of the Named Executive Officer. These provisions do not
discriminate in scope, terms or operation in favor of the executive officers of the Company. If a triggering event under the Performance Share Plan had taken place on December&nbsp;31, 2006, each
Named Executive Officer would have received $0. If a triggering event under the 2005 Equity Incentive Plan had taken place on December&nbsp;31, 2006, the vesting of options held by Named Executive
Officers could have been accelerated, but no additional payments or other benefits would have been paid as a result of the acceleration. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="di14601_equity_compensation_plan_information"> </A>
<A NAME="toc_di14601_11"> </A>
<BR></FONT><FONT SIZE=2><B>EQUITY COMPENSATION PLAN INFORMATION    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table provides information as of December&nbsp;31, 2006 with respect to shares of our common stock that may be issued under our existing equity
compensation plans. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="96%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="32%" ALIGN="LEFT"><FONT SIZE=1><B>Plan category<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="21%" ALIGN="CENTER"><FONT SIZE=1><B>Number of securities to<BR>
be issued upon exercise<BR>
of outstanding options,<BR>
warrants and rights</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Weighted average<BR>
exercise price of<BR>
outstanding options,<BR>
warrants and rights</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="20%" ALIGN="CENTER"><FONT SIZE=1><B>Number of securities<BR>
remaining available for<BR>
future issuance</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="32%"><FONT SIZE=2>Equity compensation plans approved by security holders</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="21%" ALIGN="RIGHT"><FONT SIZE=2>1,011,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT"><FONT SIZE=2>18.97</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT"><FONT SIZE=2>1,112,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="32%"><FONT SIZE=2>Equity compensation plans not approved by security holders</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="21%" ALIGN="RIGHT"><FONT SIZE=2>None</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT"><FONT SIZE=2>N/A</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT"><FONT SIZE=2>N/A</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="32%"><FONT SIZE=2>Total</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="21%" ALIGN="RIGHT"><FONT SIZE=2>1,011,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT"><FONT SIZE=2>18.97</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT"><FONT SIZE=2>1,112,000</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2>28</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_dk14601_1_29"> </A> </FONT></P>

<!-- TOC_END -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dk14601_report_of_the_audit_committee"> </A>
<A NAME="toc_dk14601_1"> </A>
<BR></FONT><FONT SIZE=2><B>REPORT OF THE AUDIT COMMITTEE    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything to the contrary set forth in any of the Company's previous or future filings under the Securities Act of 1933, as amended, or the
Exchange Act of 1934, as amended, that might incorporate this Proxy Statement or future filings with the SEC, in whole or in part, the following report shall not be deemed to be incorporated by
reference into any such filings. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following report concerns the Audit Committee's activities regarding oversight of the Company's financial reporting and auditing process. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Audit Committee is composed solely of independent directors, as defined by Nasdaq rules, and it operates under a written charter adopted by the Board of Directors. The composition of
the Audit Committee, the attributes of its members and the responsibilities of the Audit Committee, as reflected in its charter, are intended to be in accordance with applicable requirements for
corporate audit committees. The Audit Committee reviews and assesses the adequacy of its charter on an annual basis. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
described more fully in its charter, the purpose of the Audit Committee is to provide general oversight of the Company's financial reporting, internal control and audit functions.
Management is responsible for the preparation, presentation and integrity of the Company's financial statements, accounting and financial reporting principles, and internal controls and procedures
designed to ensure compliance with accounting standards, applicable laws and regulations. PricewaterhouseCoopers LLP, the Company's independent registered public accounting firm, is responsible for
performing an independent audit of the consolidated financial statements in accordance with generally accepted auditing standards and management's assessment of the effectiveness of internal control
over financial reporting and the effectiveness of internal control over financial reporting in accordance with standards established by the Public Company Accounting Oversight Board. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Audit Committee serves a board-level oversight role, in which it provides advice, counsel and direction to management and the auditors on the basis of the information it receives,
discussions with management and the auditors and the experience of the Audit Committee's members in business, financial and accounting matters. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Among
other matters, the Audit Committee monitors the activities and performance of the Company's external auditors, including the audit scope, external audit fees, auditor independence
matters and the extent to which the independent registered public accounting firm may be retained to perform non-audit services. The Audit Committee has authority and responsibility for
the appointment, compensation, retention and oversight of the Company's independent registered public accounting firm. The Audit Committee also reviews the results of the external audit work with
regard to the adequacy and appropriateness of the Company's financial, accounting and internal controls. In addition, the Audit Committee generally oversees the Company's internal compliance programs. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Audit Committee has reviewed and discussed with management and the independent registered public accounting firm (i)&nbsp;the consolidated financial statements for each of the
three years in the period ended December&nbsp;31, 2006, (ii)&nbsp;management's assessment of the effectiveness of the Company's internal control over financial reporting as of December&nbsp;31,
2006, (iii)&nbsp;PricewaterhouseCoopers LLP's evaluation of management's assessment of the effectiveness of internal control over financial reporting as of December&nbsp;31, 2006, and
(iv)&nbsp;PricewaterhouseCoopers LLP's evaluation of the effectiveness of the Company's internal control over financial reporting as of December&nbsp;31, 2006. Management has represented to the
Audit Committee that the Company's consolidated financial statements were prepared in accordance with generally accepted accounting principles. The Audit Committee has discussed with the independent
registered public accounting firm the matters required to be discussed by Statement on Auditing Standards No.&nbsp;61, as amended, "Communications with Audit Committees." The Audit Committee has
received the written disclosures </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>29</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_dk14601_1_30"> </A>
<BR>

<P><FONT SIZE=2>and
the letter from the independent registered public accounting firm required by the Independence Standards Board Standard No.&nbsp;1, "Independence Discussions with Audit Committees," and the
Committee discussed with the independent registered public accounting firm the independent registered public accounting firm's independence. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Following
the Committee's discussions with management and the independent registered public accounting firm, the Committee recommended that the Board of Directors include the audited
consolidated financial statements in the Company's annual report in Form&nbsp;10-K for the year ended December&nbsp;31, 2006. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>Members
of the Audit Committee </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>Ray
J. Groves<BR>
Allison H. Abraham<BR>
Barclay (Clay) F. Corbus </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dk14601_share_ownership_of_management,__sha02679"> </A>
<A NAME="toc_dk14601_2"> </A>
<BR></FONT><FONT SIZE=2><B>SHARE OWNERSHIP OF MANAGEMENT, DIRECTORS, NOMINEES AND 5% STOCKHOLDERS    <BR>    </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth information regarding the beneficial ownership of our common stock as of December&nbsp;31, 2006 by the following individuals or
groups: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>each
person or entity who is known by us to own beneficially more than 5% of our outstanding stock;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>each
of our Named Executive Officers;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>each
of our directors and nominees; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>all
directors and executive officers as a group. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
table is based upon information supplied by officers, directors, nominees and principal stockholders and Schedules 13D and 13G filed with the SEC. Except as otherwise indicated below
or in the referenced filings on Schedule&nbsp;13G, and subject to applicable community property laws, to our knowledge the persons named in the table have sole voting and investment power with
respect to all shares of common stock held by them. Applicable percentages are based on 23,413,002 shares of </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>30</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_dk14601_1_31"> </A>
<BR>

<P><FONT SIZE=2>common
stock outstanding as of December&nbsp;31, 2006, as adjusted as required by rules promulgated by the SEC. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="83%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" ROWSPAN=2><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=3 ROWSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Shares Beneficially Owned</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ROWSPAN=2 ALIGN="LEFT"><FONT SIZE=1><B>Beneficial Owner (Name and Address)<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="12%" ALIGN="CENTER"><FONT SIZE=1><B>Number</B></FONT><HR NOSHADE></TH>
<TH WIDTH="6%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="7%" ALIGN="CENTER"><FONT SIZE=1><B>Percent</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 VALIGN="TOP"><FONT SIZE=2><B>5% Stockholders</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="68%" VALIGN="TOP"><FONT SIZE=2>High Plains Investments LLC<BR>
700 Bitner Road<BR>
Park City, Utah&nbsp;84098</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>5,592,127</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP"><FONT SIZE=2>(1)</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>23.9</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="68%" VALIGN="TOP"><FONT SIZE=2>Fairfax Financial Holdings Limited<BR>
95 Wellington Street West, Suite&nbsp;800<BR>
Toronto, Ontario Canada MSJ&nbsp;2N7</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>3,872,481</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP"><FONT SIZE=2>(2)</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>16.5</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="68%" VALIGN="TOP"><FONT SIZE=2>Chou Associates Management Inc.<BR>
95 Wellington Street West, Suite&nbsp;710<BR>
Toronto, Ontario Canada MSJ&nbsp;2N7</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>2,323,999</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP"><FONT SIZE=2>(3)</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>9.9</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="68%" VALIGN="TOP"><FONT SIZE=2>AXA Financial, Inc. and affiliates<BR>
1290 Avenue of the Americas<BR>
New York, New York&nbsp;10104</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>1,969,943</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP"><FONT SIZE=2>(4)</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>8.4</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 VALIGN="TOP"><BR><FONT SIZE=2><B>Directors and Executive Officers</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="68%" VALIGN="TOP"><FONT SIZE=2>Patrick M. Byrne</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>6,815,514</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP"><FONT SIZE=2>(5)</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>29.1</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="68%" VALIGN="TOP"><FONT SIZE=2>Jason C. Lindsey</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>164,109</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP"><FONT SIZE=2>(6)</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>*</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="68%" VALIGN="TOP"><FONT SIZE=2>Allison H. Abraham</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>31,200</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP"><FONT SIZE=2>(7)</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>*</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="68%" VALIGN="TOP"><FONT SIZE=2>Ray J. Groves</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>10,400</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP"><FONT SIZE=2>(8)</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>*</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="68%" VALIGN="TOP"><FONT SIZE=2>Barclay (Clay) F. Corbus</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>750</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP"><FONT SIZE=2>(9)</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>*</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="68%" VALIGN="TOP"><FONT SIZE=2>Stephen P. Tryon</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>36,900</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP"><FONT SIZE=2>(10)</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>*</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="68%" VALIGN="TOP"><FONT SIZE=2>Jonathan E. Johnson III</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>71,800</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP"><FONT SIZE=2>(11)</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>*</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="68%" VALIGN="TOP"><FONT SIZE=2>David K. Chidester</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>50,143</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP"><FONT SIZE=2>(12)</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>*</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="68%" VALIGN="TOP"><FONT SIZE=2>Stormy D. Simon</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>35,305</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP"><FONT SIZE=2>(13)</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>*</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="68%" VALIGN="TOP"><FONT SIZE=2>Directors and Executive Officers as a Group (9&nbsp;persons)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>7,216,121</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>30.8</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>%</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<HR NOSHADE ALIGN="LEFT" WIDTH="120">
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>*</FONT></DT><DD><FONT SIZE=2>Less
than 1% of the outstanding shares of common stock.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD><FONT SIZE=2>Patrick
M. Byrne, our Chief Executive Officer and Chairman of our Board of Directors, holds 100% of the voting interest in and controls High Plains Investments LLC. Voting and
dispositive power are shared.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD><FONT SIZE=2>Reference
is hereby made to the Schedule&nbsp;13G filed by Fairfax Financial Holdings Limited and other reporting persons for information about the number of shares held by each and
the nature of the beneficial ownership of each such person as of December&nbsp;31, 2006.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD><FONT SIZE=2>Reference
is hereby made to the Schedule&nbsp;13G filed by Chou Associates Management&nbsp;Inc. and other reporting persons for information about the number of shares held by each
and the nature of the beneficial ownership of each such person as of December&nbsp;31, 2006.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(4)</FONT></DT><DD><FONT SIZE=2>Reference
is hereby made to the Schedule&nbsp;13G filed by AXA Financial,&nbsp;Inc. and other reporting persons for information about the number of shares held by each and the
nature of the beneficial ownership of each such person as of December&nbsp;31, 2006.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(5)</FONT></DT><DD><FONT SIZE=2>Patrick
M. Byrne's shares include 5,592,127 shares held by High Plains Investments LLC, as to which voting and investment power are shared, and 119,972 shares issuable under
stock-based awards.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(6)</FONT></DT><DD><FONT SIZE=2>Mr.&nbsp;Lindsey's
shares include 10,531 shares issuable under stock-based awards. </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>31</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_dk14601_1_32"> </A>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(7)</FONT></DT><DD><FONT SIZE=2>Ms.&nbsp;Abraham's
shares include 28,700 shares issuable under stock-based awards.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(8)</FONT></DT><DD><FONT SIZE=2>Mr.&nbsp;Groves'
shares include 5,400 shares issuable under stock-based awards.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(9)</FONT></DT><DD><FONT SIZE=2>Mr.&nbsp;Corbus'
shares are held in a margin account and are pledged to secure indebtedness.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(10)</FONT></DT><DD><FONT SIZE=2>Mr.&nbsp;Tryon's
shares include 22,400 shares issuable under stock-based awards.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(11)</FONT></DT><DD><FONT SIZE=2>Mr.&nbsp;Johnson's
shares include 71,800 shares issuable under stock-based awards.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(12)</FONT></DT><DD><FONT SIZE=2>Mr.&nbsp;Chidester's
shares include 35,790 shares issuable under stock-based awards. The balance of the shares are held in a margin account and are pledged to secure indebtedness.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(13)</FONT></DT><DD><FONT SIZE=2>Ms.&nbsp;Simon's
shares include 35,179 shares issuable under stock-based awards. </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dk14601_other_information"> </A>
<A NAME="toc_dk14601_3"> </A>
<BR></FONT><FONT SIZE=2><B>OTHER INFORMATION    <BR>    </B></FONT></P>

<P><FONT SIZE=2><B>Certain Relationships and Related Transactions  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since January&nbsp;1, 2006, there has not been, nor is there currently proposed, any transaction or series of similar transactions requiring disclosure under
Item 404 of Regulation&nbsp;S-K other than the transactions described below. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From
time to time Haverford Valley, L.C. and certain affiliated entities make travel arrangements for our executives and pay the travel related expenses incurred by our executives on
Company business. In 2006 we reimbursed Haverford Valley, L.C. $267,000 for these expenses. The amounts we pay to Haverford Valley, L. C. as reimbursement of air travel expenses are at rates not in
excess of commercially available airline rates. The other amounts we reimburse to Haverford Valley, L.C. are reimbursed at its actual cost. </FONT></P>

<P><FONT SIZE=2><B>Section&nbsp;16(a) Beneficial Ownership Reporting Compliance  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;16(a) of the Securities and Exchange Act of 1934 requires the Company's officers and directors, and persons who own more than ten percent (10%) of
the Company's common stock, to file certain reports regarding ownership of, and transactions in, the Company's securities with the SEC. Such officers, directors, and 10% stockholders are also required
to furnish the Company with copies of all Section&nbsp;16(a) forms that they file. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based
solely on a review of reports filed by, and on written representations from, its officers, directors and 10% stockholders, the Company believes that during 2006, all of its
officers, directors and 10% stockholders complied with requirements for reporting ownership and changes in ownership of Company common stock under Section&nbsp;16(a) of the Securities Act of 1934. </FONT></P>


<P><FONT SIZE=2><B>Deadline For Receipt of Stockholder Proposals  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If you wish to submit a proposal for possible inclusion in our 2008 proxy material, we must receive your notice, in accordance with rules of the SEC and the
Company's Bylaws on or before November&nbsp;26, 2007. The proposal(s) should be mailed to our Secretary at our principal executive offices at 6350 South 3000 East, Salt Lake City, Utah 84121. If you
intend to submit a proposal at the 2008 Annual Meeting but do not intend to include the proposal in our proxy statement for that meeting, you must provide appropriate notice to us on or before
January&nbsp;26, 2008. Our bylaws contain specific requirements regarding a stockholder's ability to nominate a candidate for director or to submit a proposal for consideration at an upcoming annual
meeting. If you would like a copy of the requirements contained in our bylaws, please contact our Secretary at the address shown above. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>32</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_dk14601_1_33"> </A>
<BR>

<P><FONT SIZE=2><B>Costs of Proxy Solicitation  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The solicitation is made on behalf of the Board of Directors of the Company. The Company will pay the cost of soliciting these proxies. We will reimburse
brokerage houses and other custodians, nominees and fiduciaries for reasonable expenses they incur in sending these proxy materials to you if you are a beneficial holder of our shares. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Without
receiving additional compensation, officials and regular employees of the Company may solicit proxies personally, by telephone, fax or email from stockholders if proxies are not
promptly received. We have also hired Georgeson Shareholder Communications to assist in the solicitation of proxies at a cost of approximately $3,500 plus out-of-pocket
expenses. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An
Annual Report on Form&nbsp;10-K, excluding exhibits, for the fiscal year ended December&nbsp;31, 2006 is enclosed with this Proxy Statement. You may obtain an
additional copy without charge by sending a written request to Overstock.com,&nbsp;Inc., Attention Investor Relations, 6350 South 3000 East, Salt Lake City, Utah 84121. The Annual Report is also
available on our website at </FONT><FONT SIZE=2><I>www.overstock.com.</I></FONT></P>

<P><FONT SIZE=2><B>Voting by Internet or Telephone  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For shares of common stock that are registered in the name of the stockholder directly with our transfer agent, Computershare Trust Company, you may vote in
person, by returning the enclosed proxy card or by Internet or telephone. Specific instructions to be followed by any registered stockholder interested in voting by Internet or telephone are set forth
on the enclosed proxy card. The Internet and telephone voting procedures are designed to authenticate the stockholder's identity and to allow stockholders to vote their shares and confirm that
stockholders' instructions have been properly recorded. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
shares of common stock that are beneficially owned by a stockholder and held in "street name" through a bank or brokerage, the stockholder may be eligible to vote such shares
electronically by Internet or telephone. A large number of banks and brokerage firms are participating in the ADP Investor Communication Services online program, which provides eligible stockholders
who receive a paper copy of our proxy statement and annual report the opportunity to vote by Internet or telephone. If your bank or brokerage firm is participating in ADP's program, your voting form
from the bank or brokerage will provide instructions. If your voting form does not reference Internet or telephone information, please complete and return the paper proxy card in the
self-addressed, postage paid envelope provided. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stockholders
voting via the Internet or telephone should understand that there may be costs associated with Internet or telephone access, such as usage charges from Internet access
providers and telephone companies, that must be borne by the stockholder. </FONT></P>

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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="53%"><FONT SIZE=2>By Order of the Board,</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="53%"><BR><FONT SIZE=2><B>
<IMG SRC="g431731.jpg" ALT="SIGNATURE" WIDTH="331" HEIGHT="90">
 </B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="53%"><FONT SIZE=2>Jonathan E. Johnson III<BR>
Secretary</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>March&nbsp;30,
2007<BR>
Salt Lake City, Utah </FONT></P>

<HR NOSHADE ALIGN="CENTER" WIDTH="120">
<P ALIGN="CENTER"><FONT SIZE=2>Overstock.com,&nbsp;Inc.<BR>
6350 South 3000 East Salt Lake City, Utah 84121<BR>
(801)&nbsp;947-3100 </FONT><FONT SIZE=2><I>www.overstock.com </I></FONT><FONT SIZE=2>Nasdaq: OSTK </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>33</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=5,SEQ=36,EFW="2176990",CP="OVERSTOCK.COM, INC.",DN="1",CHK=271991,FOLIO='33',FILE='DISK111:[07ZBB1.07ZBB14601]DK14601A.;16',USER='FALVARE',CD='28-MAR-2007;17:21' -->
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_dm14601_1_1"> </A> </FONT></P>

<!-- TOC_END -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dm14601_exhibit_a."> </A>
<A NAME="toc_dm14601_1"> </A>
<BR></FONT><FONT SIZE=2><B>Exhibit A.    <BR>    </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dm14601_performance_share_plan"> </A>
<A NAME="toc_dm14601_2"> </A></FONT> <FONT SIZE=2><B>Performance Share Plan    <BR>    </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>OVERSTOCK.COM<BR>
Performance Share Plan<BR>  </B></FONT><FONT SIZE=2>(amended and restated as of May&nbsp;15, 2007) </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Purpose of the Plan: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>1.</FONT></DT><DD><FONT SIZE=2><B><I>The purpose of the Plan</I></B></FONT><FONT SIZE=2> is to advance the interest of Overstock.com,&nbsp;Inc. (the "Company") and its owners by providing executive
incentives and by providing for a reasonable sharing of the financial performance of the enterprise.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>2.</FONT></DT><DD><FONT SIZE=2><B><I>Summary:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;From time to time the Board of Directors of the Company (the "Board") may grant to an executive of the Company an
award of Performance Shares. Each Performance Share shall have the financial value equal to the market value per share, conditioned upon attainment of a stated Performance Goal over the Award Period
specified in the Grant. At the end of the Award Period, the Board (or the Committee, in the case of a Qualified Performance-Based Award) will determine the degree of attainment of the Performance Goal
and will assign a Harvest Percentage based on that determination. Each matured Performance Share will then be exchanged for a cash payment equal to the market value of a share of common stock of the
Company as of the last day of the Award Period as set forth in the grant agreement ("Financial Value") multiplied by the Harvest Percentage. Notwithstanding anything in this Plan to the contrary, no
Participant shall receive payments pursuant to awards of Performance Shares under this Plan that exceed $5,000,000 in any calendar year. The maximum aggregate payments to all Participants made
pursuant to awards of Performance Shares granted under the Plan shall not exceed $40,000,000.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>3.</FONT></DT><DD><FONT SIZE=2><B><I>Administration:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;
<BR><BR></FONT>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(a)</FONT></DT><DD><FONT SIZE=2><B><I>Administration by the Board:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Plan shall be administered by the Board. The Board shall have the authority to select the
executives who shall be participants, to determine the size and terms of an award, to modify the terms of any award that has been granted, to determine the time when awards will be made, to determine
the Award Periods applicable to an award, to determine the Harvest Percentages applicable to an award, to determine the terms of a Participant's grant agreement (which need not be identical or
uniform), to establish Performance Goals in respect of such Award Periods and to certify whether such Performance Goals were attained (except with respect to Qualified Performance-Based Awards) and to
make such other determinations that are not prohibited by this Plan. With respect to Qualified Performance-Based Awards, the Board shall designate a committee, which shall be solely composed of not
less than two Outside Directors and shall be appointed by and serve at the pleasure of the Board (the "Committee"), to establish Performance Goals in respect of such Award Periods and to certify
whether such Performance Goals were attained. The Board is authorized to interpret the Plan to establish, amend and rescind any rules and regulations relating to the Plan and to make any other
determinations that it deems necessary or desirable. Any decision of the Board in the interpretation and administration of the Plan shall lie within its sole and absolute discretion and shall be
final, conclusive and binding on all parties concerned. Determinations made by the Board under the Plan need not be uniform and may be made selectively among Participants regardless of whether such
Participants are similarly situated. The Board shall have the right to deduct from any payment made under the Plan any taxes required by law to be withheld with respect to such payment. The Board may
delegate its duties hereunder to its Compensation Committee or the Committee. </FONT></DD></DL>
</DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>A-1</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=37,EFW="2176990",CP="OVERSTOCK.COM, INC.",DN="1",CHK=761217,FOLIO='A-1',FILE='DISK111:[07ZBB1.07ZBB14601]DM14601A.;14',USER='FALVARE',CD='28-MAR-2007;17:32' -->
<A NAME="page_dm14601_1_2"> </A>
<UL>
<UL>
</UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(b)</FONT></DT><DD><FONT SIZE=2><B><I>Administration by the Committee:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;With respect to Qualified Performance-Based Awards, the Committee shall have the sole
authority to establish Performance Goals in respect of the Award Periods applicable to such Qualified Performance-Based Awards and to certify, in writing, whether such Performance Goals and any other
material terms were satisfied prior to the payments being made pursuant to such awards. The Committee is authorized to interpret the Plan as it relates to the Performance Goals of Qualified
Performance-Based Awards and to make any other determinations that it deems necessary or desirable with respect to the Performance Goals of Qualified Performance-Based Awards. Any decision of the
Committee in the interpretation and administration of the Performance Goals of Qualified Performance-Based Awards shall lie within its sole and absolute discretion and shall be final, conclusive and
binding on all parties concerned. Determinations made by the Committee under the Plan need not be uniform and may be made selectively among Participants regardless of whether such Participants are
similarly situated.
<BR><BR></FONT></DD></DL>
</UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>4.</FONT></DT><DD><FONT SIZE=2><B><I>Eligibility and Participation</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Board shall designate those executives who shall be
Participants. Participants shall be selected from among the executives who are in a position to have a material impact on the financial results of the Company. The designation of the Participants may
be made individually or by groups or classifications of executives, as the Board deems appropriate. Executives shall not have a right to be designated as Participants and the designation of an
executive as a Participant shall not obligate the Board to continue such executive as a participant in subsequent periods.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>5.</FONT></DT><DD><FONT SIZE=2><B><I>Grants</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2>
<BR><BR></FONT>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(a)</FONT></DT><DD><FONT SIZE=2><B><I>Grant:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In each Grant, the Board (or the Committee, in the case of a Qualified Performance-Based Award) shall specify,
among other matters, (i)&nbsp;the number of Performance Shares awarded, (ii)&nbsp;the Award Period, (iii)&nbsp;the Performance Goals to be attained within the Award Period, (iv)&nbsp;the
method for determining the Harvest Percentage based upon the level of achievement of the Performance Goals, and (v)&nbsp;the maximum Award Payment.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(b)</FONT></DT><DD><FONT SIZE=2><B><I>Performance Goals</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Performance Goals for any award of Performance Shares shall be as
determined by the Board (or by the Committee, in the case of Qualified Performance-Based Awards) and as stated in the grant agreement. Normally, the Performance Goal will be based on some reasonable
measure of growth in Economic Value per share of the enterprise, or on some similar measure of financial performance.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(c)</FONT></DT><DD><FONT SIZE=2><B><I>Payment</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;As soon as practicable after the end of the Award Period, the Board (or the Committee,
in
the case of Qualified Performance-Based Awards) shall determine (i)&nbsp;whether the applicable Performance Goals have been attained with respect to a given award and (ii)&nbsp;the Harvest
Percentage applied to a given award. At the end of the Award Period the Board shall ascertain the actual value of the award. Notwithstanding anything to the contrary, with respect to Qualified
Performance-Based Awards, no payment shall be made with respect to such awards until the Committee certifies, in writing, that the applicable Performance Goals and any other material terms have been
satisfied. Unless otherwise determined by the Board or otherwise set forth in a grant agreement, the actual value of an award shall be equal to the Financial Value of the Performance Shares multiplied
by the Harvest Percentage. A Participant's actual value will be settled through a cash payment to the Participant no later than March&nbsp;15 of the calendar year immediately following the last day
of the Award Period. Notwithstanding the above, the Board, in its sole discretion, may settle any payment, or portion thereof, made pursuant to this Plan (including any payment, or portion thereof,
under any Award made prior to the approval of this Plan by the stockholders, as long as the stockholders shall have approved this Plan prior to the payment of the amount payable under any such Award)
in shares of common stock of the Company in lieu of cash based on the </FONT></DD></DL>
</DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>A-2</FONT></P>

<HR NOSHADE>
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<UL>

<P><FONT SIZE=2>market
value of the shares of common stock determined as of a date that is no more than ten (10)&nbsp;days prior to the date of payment. Any shares of common stock of the Company paid to a
Participant pursuant to the prior sentence may be registered under the Securities Act of 1933 or, subject to applicable securities laws, may be issued in an unregistered transaction. Notwithstanding
anything in this Section&nbsp;5(c) to the contrary, the total number of shares of common stock of the Company that may be issued under the Plan shall not exceed 392,000. </FONT></P>

</UL>
</UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>6.</FONT></DT><DD><FONT SIZE=2><B><I>Termination of Employment</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Except as set forth in Section&nbsp;7 or otherwise set forth in a
grant agreement a Participant shall immediately forfeit all outstanding awards upon any termination of employment prior to the end of the applicable Award Period. The Board may at its discretion
provide that if a Participant dies, retires, is disabled, or is granted a leave of absence, or if the Participant's employment is otherwise terminated in a manner reasonably judged to be not seriously
detrimental to the Company, then all or a portion of the Participant's award that would have otherwise been paid under Section&nbsp;5(c), as determined by the Board, may be paid to the Participant
(or beneficiary) at the time set forth in Section&nbsp;5(c).
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>7.</FONT></DT><DD><FONT SIZE=2><B><I>Change of Control</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2>
<BR><BR></FONT>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(a)</FONT></DT><DD><FONT SIZE=2>If
a Termination event occurs with respect to a Participant within 24&nbsp;months after a Change of Control, then each award held by such Participant that was granted prior to the
Change of Control shall be cancelled and such Participant shall be entitled to receive in respect of each such canceled award a payment equal to the product of (i)&nbsp;the Financial Value (provided
that the market value shall be determined as of the date of the Change of Control) of 100% of the Performance Shares and (ii)&nbsp;the applicable Harvest Percentage. Such payment shall be made on
the date of termination of the Participant's employment or as soon as administratively feasible thereafter, but in no event after the later of (i)&nbsp;the last day of the calendar year in which the
Participant's employment terminates, or (ii)&nbsp;the fifteenth (15<SUP>th</SUP>) day of the third calendar month following the date of termination of the Participant's employment. The applicable
Harvest Percentage will be determined based on the extent to which the Performance Goal has been achieved as of the last day of the calendar quarter ending prior to the date of the applicable
Termination event.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(b)</FONT></DT><DD><FONT SIZE=2>Notwithstanding
anything herein to the contrary, if, following a Change of Control, a Participant's employment remains continuous through the end of an Award Period, then the
Participant shall be paid with respect to those awards for which he would have been paid had there not been a Change of Control, and the actual value and time of payment shall be determined in
accordance with Section&nbsp;5 above.
<BR><BR></FONT></DD></DL>
</DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>8.</FONT></DT><DD><FONT SIZE=2><B><I>Code Section&nbsp;409A</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything in this Plan to the contrary, in the event that
a Participant is deemed to be a "specified employee" within the meaning of Section&nbsp;409A of the Internal Revenue Code of 1986, as amended (the "Code"), no payment that is "deferred compensation"
subject to Code Section&nbsp;409A shall be made to the Participant prior to the date that is six (6)&nbsp;months after the date of the Participant's separation from service (as defined in Code
Section&nbsp;409A) or, if earlier, the Participant's date of death.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>9.</FONT></DT><DD><FONT SIZE=2><B><I>Amendments or Termination</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Board may amend, alter or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made which would impair any of the rights or obligations under any award theretofore granted to a Participant without such Participant's consent; provided,
however, that the Board may amend the Plan in such manner as it deems necessary to permit the granting of awards meeting the requirements of the Code, or any successor thereto, or other applicable
laws. Notwithstanding anything in this Section&nbsp;9 to the contrary, the Board may not adjust upward the amount payable to a Covered Employee with respect to a Qualified Performance-Based Award or
waive or alter the Performance Goals associated therewith in a manner that would violate Section&nbsp;162(m) of the Code. </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>A-3</FONT></P>

<HR NOSHADE>
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<DT style='margin-bottom:-11pt;'><FONT SIZE=2>10.</FONT></DT><DD><FONT SIZE=2><B><I>No Right to Employment</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Neither the Plan nor any action taken hereunder shall be construed as
giving any Participant or other person any right to continue to be employed by, or to continue to perform services for, the Company or any subsidiary, and the right to terminate the employment of or
performance of services by any Participant at any time and for any reason is specifically reserved to the Company and its subsidiaries.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>11.</FONT></DT><DD><FONT SIZE=2><B><I>Nontransferability of Awards</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;An award shall not be transferable or assignable by the Participant,

other than as described in Section&nbsp;17 of this Plan.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>12.</FONT></DT><DD><FONT SIZE=2><B><I>Reduction of Awards</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything to the contrary herein, the Board, in its sole
discretion (but subject to applicable law), may reduce any amounts payable to any Participant hereunder in order to satisfy any liabilities owed to the Company or any of its subsidiaries by the
Participant.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>13.</FONT></DT><DD><FONT SIZE=2><B><I>Participation of Subsidiaries</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;If a subsidiary wishes to participate in the Plan and its
participation shall have been approved by the Board, the Board of Directors of the subsidiary shall adopt a resolution in form and substance satisfactory to the Committee authorizing participation by
the subsidiary in the Plan. A subsidiary that adopts the Plan in accordance with the Section shall be permitted to rename the Plan under the name of such subsidiary. A subsidiary may cease to
participate in the Plan at any time by action of the Board or by action of the Board of Directors of such subsidiary, which latter action shall be effective not earlier than the date of delivery to
the Secretary of the Company of a certified copy of a resolution of the subsidiary's Board of Directors taking such action. Termination of participation in the Plan shall not relieve a subsidiary of
any obligations theretofore incurred by it under the Plan. The Board in its discretion may waive compliance with any provisions in this section.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>14.</FONT></DT><DD><FONT SIZE=2><B><I>Claims Procedure</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In general, any claim for benefits under the Plan shall be filed with the Board
of Directors by a Participant or beneficiary. The Board will consider the claim promptly.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>15.</FONT></DT><DD><FONT SIZE=2><B><I>Miscellaneous Provisions</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company is the sponsor and legal obligor under the Plan and shall
make all payments hereunder, other than any payments to be made by any of the subsidiaries, as described below (in which case such payments shall be made by such subsidiary, as appropriate). If a
subsidiary adopts the Plan in accordance with Section&nbsp;12, the subsidiary shall be responsible for all payments made under the Plan for Awards granted by the Board of Directors of the subsidiary
including expenses involved in administering the Plan at the subsidiary level. The Plan is unfunded. The Company shall not be required to establish any special or separate fund or to make any other
segregation of assets to ensure the payment of any amounts under the Plan, and the Participant's rights to any payment hereunder shall be no greater than the rights of the Company's (or the applicable
subsidiary's) unsecured creditors. All references to Sections herein shall be deemed to be references to the specified sections of this Plan.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>16.</FONT></DT><DD><FONT SIZE=2><B><I>Taxes</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company and its subsidiaries shall have the right to deduct from any payment made
under
the Plan any taxes required by law to be withheld with respect to such payment. The Board, in its sole discretion, may permit withholding obligations to be settled with common stock of the Company,
including common stock of the Company that is part of the award that gives rise to the withholding requirement; provided, however, that not more than the legally required minimum withholding may be
settled with common stock of the Company. The obligations of the Company under this Plan shall be conditional on such payment or arrangements, and the Company and its subsidiaries shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment otherwise due to the Participant. The Board may establish such procedures as it deems appropriate, including making
irrevocable elections, for the settlement of withholding obligations with common stock of the Company.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>17.</FONT></DT><DD><FONT SIZE=2><B><I>Choice of Law</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Plan shall be governed by and construed in accordance with the laws of Utah.
</FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>A-4</FONT></P>

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<DT style='margin-bottom:-11pt;'><FONT SIZE=2>18.</FONT></DT><DD><FONT SIZE=2><B><I>Designation of Beneficiary by Participant</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;A Participant may name a beneficiary to receive any
payment to which he/she may be entitled in respect to a Grant in the event of his/her death. A Participant may change his/her beneficiary from time to time. If the Participant has not designated a
beneficiary, or if no designated beneficiary is living on the date on which any amount becomes payable, that amount shall be paid to the Participant's estate.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>19.</FONT></DT><DD><FONT SIZE=2><B><I>Schedule of Definitions</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The attached Schedule of Definitions shall be considered an integral
part
of this Plan.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>20.</FONT></DT><DD><FONT SIZE=2><B><I>Effective Date of the Plan</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Plan was originally effective as of January&nbsp;1, 2006 and has
been amended and restated effective as of the date of approval of this Plan by the stockholders of the Company.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>21.</FONT></DT><DD><FONT SIZE=2><B><I>Shareholder Approval</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The grant of all Qualified Performance-Based Awards are conditioned on the
approval of this Plan by the shareholders of the Company. If this Plan is not approved by the stockholders, then the Plan as originally adopted by the Board (and as thereafter amended or modified by
the Board to the extent that stockholder approval of such amendments is not required) shall remain in full force and effect. </FONT></DD></DL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, the Company has caused this Plan to be executed this&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;day
of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2007. </FONT></P>

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<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>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="4%"><BR><FONT SIZE=2>By:</FONT></TD>
<TD WIDTH="46%"><BR><HR NOSHADE><FONT SIZE=2> Patrick M. Byrne<BR>
CEO</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>A-5</FONT></P>

<HR NOSHADE>
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<P><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Schedule of Definitions:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;terms used in the Plan or in a Grant shall have the following meanings: </FONT></P>

<P><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change of Control:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;shall mean If any person or group (within the meaning of sections 13(d) or 14(d)2
of the Exchange Act) other than members of the Byrne Family own thirty-five percent or more of the then outstanding common stock of the Company. </FONT></P>

<P><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Economic Value (EV):</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;shall mean the economic value of the Company calculated consistent with the
regularly calculated EV in the financial account prepared by the controller in accordance with the EV definition adopted by the Board at the beginning of award period. </FONT></P>

<P><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Economic Value Per Share:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;shall mean the EV divided by the number of fully diluted common shares
outstanding. </FONT></P>

<P><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Grant:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;shall mean an offer by the Board to an executive to participate in the Performance Share Plan.
Such Grant will specify the number of Performance Shares being granted, the Performance Goal, the Award Period, the method for judging attainment of the goal and for setting the Harvest Percentage, a
maximum award value if any, and other relevant terms. </FONT></P>

<P><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Harvest Percentage:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;shall be determined by the Board at the end of the Award Period specified in the
Grant, and will represent the Board's judgment of the degree to which the Company's actual financial performance has met the Performance Goal specified in the Grant. Normally the Harvest Percentage
will range from 0% thru 200% according to a scale specified in the Grant. This Harvest Percentage will then be multiplied by the market value of the Performance Shares granted, to produce the actual
cash value of the Grant. </FONT></P>

<P><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Performance Share:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;a unit granted to an executive under the Performance Share Plan. The unit will
have the financial equivalence of a share of common stock in the Company, conditioned upon the attainment of a specified Performance Goal over a specified Award Period. </FONT></P>

<P><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Related Employment:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;shall mean the employment of a participant by an employer who is not the Company
or an affiliate of the Company, provided (i)&nbsp;such employment is undertaken by the participant and continued at the request of the Company; (ii)&nbsp;immediately prior to undertaking such
employment the participant was an employee of the Company, or any of its affiliates or was engaged in related employment; and (iii)&nbsp;such employment is recognized by the Board, in its sole
discretion, as related employment. </FONT></P>

<P><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Termination event:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;shall be considered for this plan to be a Termination Without Cause or to be a
Constructive Termination. </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>a.</B></FONT></DT><DD><FONT SIZE=2><B><I>Termination Without Cause:</I></B></FONT><FONT SIZE=2><B> A termination of the Participant's employment with the Company or a subsidiary by the
Company or the subsidiary other than (i)&nbsp;due to the Participant's death or disability as defined in the Performance Plan Grant, or (ii)&nbsp;for Cause. A transfer of a Participant's
employment to an affiliate of the Company shall not, by itself, be considered a Termination without Cause hereunder. For this purpose, "Cause" shall mean (a)&nbsp;an act or omission by the
Participant that constitutes a felony, (b)&nbsp;willful gross negligence or willful gross misconduct by the Participant in connection with his employment by the Company or by a subsidiary which
causes, or is likely to cause, material loss or damage to the Company. Notwithstanding anything herein to the contrary, a termination of a Participant's employment with the Company or one of its
subsidiaries due solely to the consummation of a corporate transaction described in clause&nbsp;(i) of the definition of Change in Control shall not be deemed to be a "Termination Without Cause" if
the Participant is employed by the acquiror or one of its affiliates and the acquiror or one of its affiliates formally assumes the Company's obligations under this Plan or places the Participant in a
similar or like plan with no diminution of the value of the awards granted.  </B></FONT></DD></DL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>A-6</FONT></P>

<HR NOSHADE>
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<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>b.</B></FONT></DT><DD><FONT SIZE=2><B><I>Constructive Termination</I></B></FONT><FONT SIZE=2>. A termination of employment with the Company and its affiliates at the initiative of the Participant that the
Participant declares, by prior written notice delivered to the Secretary of the Company, to be a Constructive Termination by the Company or an affiliate and which follows (i)&nbsp;a material
decrease in his/her salary or (ii)&nbsp;a material diminution in the authority, duties or responsibilities of his/her position as a result of which the Participant determines in good faith that
he/she cannot continue to carry out his/her job in substantially the same manner as it was intended to be carried out immediately before such diminution. Notwithstanding anything herein to the
contrary, a Constructive Termination shall not occur until and unless 30&nbsp;days have elapsed from the date the Company receives such written notice from the Participant and, during that period,
the Company fails to cure, or cause to be cured, the circumstance serving as the basis on which the declaration of Constructive Termination is given. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2><B>[FORM OF GRANT]  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>OVERSTOCK.COM  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>PERFORMANCE SHARE PLAN  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>20&nbsp;&nbsp;&nbsp;&nbsp;-20&nbsp;&nbsp;&nbsp;&nbsp;Grant  </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS
GRANT is made, effective as of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, between Overstock.com,&nbsp;Inc. (the "Company") and (the "Participant").
</FONT></P>

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

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
the Company has adopted the Performance Share Plan ("Plan"), which Plan is incorporated herein by reference and made part of this Grant; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
the Board has determined that it would be in the best interest of the Company and its owners to grant the award provided for herein to the Participant pursuant to the Plan and
the terms set forth herein. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW
THEREFORE, in consideration of the mutual covenants set forth herein, the parties hereto agree as follows: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Grant:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Subject to the terms and conditions of the Plan and the additional terms and conditions set forth in
this Grant, the Company hereby grants to the Participant a Performance Share Award of shares. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Award Period:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Award Period shall
be&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;through&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.
 </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Performance Goal:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Performance Goal shall be a 25% return on equity, measured by compounded growth in EV
per share of the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Harvest Percentage:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Shall be dependent on the extent to which the Performance Goal is attained, and shall be
determined as follows: </FONT></P>

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<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1><B>Growth in Economic Value<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="18%" ALIGN="CENTER"><FONT SIZE=1><B>Harvest Percentage</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>10% or lower</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT"><FONT SIZE=2>0</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="3%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="71%"><FONT SIZE=2>25%</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT"><FONT SIZE=2>100</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>40% or higher</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT"><FONT SIZE=2>200</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
percentage growth between 10% and 40%, the Harvest Percentage will be determined on the basis of straight line interpolation. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>A-7</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=7,SEQ=43,EFW="2176990",CP="OVERSTOCK.COM, INC.",DN="1",CHK=347988,FOLIO='A-7',FILE='DISK111:[07ZBB1.07ZBB14601]DM14601B.;8',USER='FALVARE',CD='28-MAR-2007;17:32' -->
<A NAME="page_dm14601_1_8"> </A>
<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Award Payment:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Subject to all terms and conditions of the Plan, the Participant's actual value at the end of
the Award Period will be settled through a cash, stock or combined payment to the Participant. Unless otherwise determined by the Board or otherwise set forth in a Grant, a Participant's actual value
with respect to an Award shall be equal to the then market value of the shares multiplied by the Harvest Percentage. If the Company receives stockholder approval to do so, the Board may consider
settlement with common stock, if the participant so requests. Nothwithstanding any other provision of this Grant, the Award, or the Plan, the maximum Award payment made pursuant to this Notice of
Grant and the Award granted hereunder shall not exceed $5,000,000. Any such payment hereunder shall be made so as not to cause the application of penalties under Section&nbsp;409A of the Internal
Revenue Code. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Termination of Employment:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Except as provided in Section&nbsp;6 or Section&nbsp;7 of the Plan, this Award
shall be canceled, and no payment shall be payable hereunder, if the Participant's continuous employment or
Related Employment with the Company shall terminate for any reason prior to the end of the Award Period. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Successor Requirement:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This Grant shall inure to the benefit of and be binding upon the Company and its
successors and assigns. The Company shall request any purchaser of a business unit in which the Participant is employed (a "Purchaser"), to fully assume the obligations of the Company under this
Grant. If a Purchaser declines to assume such obligations, the Company shall remain obligated under the terms of this Grant and the Board, in its sole discretion, may elect to cancel the Grant and to
make an Award Payment based on the applicable measures at the time of purchase or in accordance with Section&nbsp;7 of the Plan, if the Plan's Change in Control provisions are applicable. Any such
payment hereunder shall be made so as not to cause the application of penalties under Section&nbsp;409A of the Internal Revenue Code. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Definitions:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;All terms not otherwise defined herein shall have the same meaning as in the Plan. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Withholding:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Participant agrees to make appropriate arrangements with the Company for satisfaction of any
applicable income tax withholding requirements, including the payment to the Company, at the termination of the Award Period (or such earlier or later date as may be applicable under the Code), of all
such taxes and other amounts, and the Company shall be authorized to take such action as may be necessary, in the opinion of the company's counsel (including, without limitation, withholding amounts
from any compensation or other amount owing from the Company to the Participant), to satisfy all obligations for the payment of such taxes and other amounts. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Reduction of the Award:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything to the contrary herein, the Board, in its sole discretion
(but subject to applicable law), may reduce any amounts payable to the Participant in order to satisfy any liabilities owed to the Company by the Participant. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;No Right to Continued Employment:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Neither the Plan nor this Grant shall be construed as giving the
Participant the right to be retained in the employ of, or in any consulting relationship to, the Company or any of its subsidiaries. Further, the Company may at any time dismiss the Participant or
discontinue any consulting relationship, free from any liability or any claim under the Plan or this Grant, except as otherwise expressly provided in the Plan and in this Grant. In addition, nothing
herein shall obligate the Company to make future Grants to the Participant. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Award Subject to Plan:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;By entering in this Grant the Participant agrees and acknowledges that the
Participant has received and read a copy of the Plan and that this Award is subject to all of the terms and provisions set forth in the Plan and in this Grant. In the event of a conflict between any
term or provision contained in this Grant and a terms or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>A-8</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=8,SEQ=44,EFW="2176990",CP="OVERSTOCK.COM, INC.",DN="1",CHK=600165,FOLIO='A-8',FILE='DISK111:[07ZBB1.07ZBB14601]DM14601B.;8',USER='FALVARE',CD='28-MAR-2007;17:32' -->
<A NAME="page_dm14601_1_9"> </A>
<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Designation of Beneficiary by Participant:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;A Participant may name a beneficiary to receive any payment to
which he/she may be entitled in respect of this Award in the event of his/her death, by notifying the Company. A Participant may change his/her beneficiary from time to time in the same manner. If the
Participant has not designated a beneficiary or if no designated beneficiary is living on the date on which any amount becomes payable to a Participant's beneficiary, that amount shall be paid to the
Participant's estate. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Notices:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Any notice necessary under this Grant shall be addressed to the Company at its primary corporate
headquarters and to the Participant at the address appearing in the personnel records of the Company for such Participant or to either party at such other address as such party hereto may hereafter
designate in writing to the other. Any such notice shall be deemed effective upon receipt thereof by the addressee. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Signature in Counterparts:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This Grant may be signed in counterparts, each of which shall be an original, but
all of which shall constitute one and the same instrument, with the same effect as if the signatures thereto and hereto were upon the same instrument. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Special 2006-2008 Understanding with Respect to Early Partial Distribution:</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;For this
2006-2008 Grant only, the Company, in its sole discretion, may, at the end of the second calendar year during the Award Period, distribute 2/3 of the expected value of this Grant to the
Participant, provided that the Participant's continuous employment or Related Employment with the Company has not terminated prior to December&nbsp;31, 2007. Such distribution, if made, shall be
made no later than March&nbsp;15, 2008. The expected value of the Grant will be calculated by the Controller and approved by the Board or the Compensation Committee. The expected value may include a
margin for unexpected unfavorable developments. The amount of the distribution will be based on the fair market value of the stock as of the date the distribution is made. If a distribution is made
pursuant to this paragraph, the value of the Grant as of any future date shall be offset by the amount distributed pursuant to this paragraph. Notwithstanding anything herein to the contrary, no
distribution may be made pursuant to this paragraph if any portion of this Grant ceases to be subject to a substantial risk of forfeiture for purposes of Section&nbsp;409A of the Internal Revenue
Code of 1986, as amended, prior to January&nbsp;1, 2007. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, the parties hereto have executed this Grant as of the effective date set forth above. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2>Participant</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>OVERSTOCK.COM,&nbsp;INC.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><BR><FONT SIZE=2>By</FONT></TD>
<TD WIDTH="46%"><BR><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2>Name</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2>Patrick M. Byrne<BR>
President</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2>A-9</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=9,SEQ=45,EFW="2176990",CP="OVERSTOCK.COM, INC.",DN="1",CHK=170115,FOLIO='A-9',FILE='DISK111:[07ZBB1.07ZBB14601]DM14601B.;8',USER='FALVARE',CD='28-MAR-2007;17:32' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_do14601_1_1"> </A> </FONT></P>

<!-- TOC_END -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="do14601_exhibit_b."> </A>
<A NAME="toc_do14601_1"> </A>
<BR></FONT><FONT SIZE=2><B>Exhibit B.    <BR>    </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>Compensation Committee Charter  </B></FONT></P>

<A NAME="do14601_charter_for_the_compensation_committee"> </A>
<A NAME="toc_do14601_2"> </A>
<P ALIGN="CENTER"><FONT SIZE=2><B>CHARTER FOR THE COMPENSATION COMMITTEE<BR>
OF THE BOARD OF DIRECTORS<BR>
OF<BR>
OVERSTOCK.COM,&nbsp;INC.  </B></FONT></P>

<P><FONT SIZE=2><B>PURPOSE:  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The purpose of the Compensation Committee established pursuant to this charter is to discharge the Board's responsibilities relating to compensation of the
Company's directors and officers. The Committee has overall responsibility for approving and evaluating the director and officer compensation plans, policies and programs of the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Compensation Committee is also responsible for producing an annual report for inclusion in the Company's proxy statement and reviewing and approving the Compensation
Discussion&nbsp;&amp; Analysis and the supporting compensation disclosure materials that are included in the Company's proxy statement. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Compensation Committee has the authority to undertake the specific duties and responsibilities listed below and will have the authority to undertake such other specific duties as the
Board of Directors from time to time prescribes. </FONT></P>

<P><FONT SIZE=2><B>MEMBERSHIP:  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee shall consist of a minimum of two (2)&nbsp;Non-employee Directors (as such term is defined in
Rule&nbsp;16b-3(b)(3)(i)&nbsp;of the Securities Exchange Act of 1934, as amended). In addition, the Compensation Committee members shall be "outside directors" within the meaning of
Section&nbsp;162(m) of the Internal Revenue Code of 1986, as amended (the "</FONT><FONT SIZE=2><B><I>IRC</I></B></FONT><FONT SIZE=2>"). Each member shall also meet the independence standards of applicable
law and of the Nasdaq Stock Market,&nbsp;Inc. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Compensation Committee members shall be appointed by and serve at the discretion of the Board of Directors. </FONT></P>

<P><FONT SIZE=2><B>RESPONSIBILITIES:  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The responsibilities of the Compensation Committee include: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(i)</FONT></DT><DD><FONT SIZE=2>Reviewing
and approving the compensation policies for executive officers and directors of the Company, and such other officers of the Company as directed by the Board of
Directors;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(ii)</FONT></DT><DD><FONT SIZE=2>Reviewing
and approving all forms of compensation to be provided to the executive officers and directors of the Company;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(iii)</FONT></DT><DD><FONT SIZE=2>In
consultation with senior management, reviewing and approving general compensation goals and guidelines for the Company's employees and the criteria by which bonuses
and stock compensation awards to the Company's employees are determined;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(iv)</FONT></DT><DD><FONT SIZE=2>Acting
as Administrator of the Company's equity compensation plans (the "Plans") within the authority delegated by the Board of Directors. In its administration of the
Plans, the Compensation Committee may, (1)&nbsp;grant stock options, stock purchase rights and other awards permitted by the Plans to individuals eligible for such grants (including grants to
individuals subject to Section&nbsp;16 of the Securities Exchange Act of 1934, as amended, in compliance with Rule&nbsp;16b-3 thereunder), (2)&nbsp;amend such stock options or stock
purchase </FONT></DD></DL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>B-1</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_do14601_1_2"> </A>
<UL>
<UL>

<P><FONT SIZE=2>rights
to the extent permitted by the Plans and applicable law, and (3)&nbsp;take all other actions permitted under the Plans; </FONT></P>

</UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(v)</FONT></DT><DD><FONT SIZE=2>Reviewing
and making recommendations to the Board of Directors with respect to amendments to the Plans and changes in the number of shares reserved for issuance
thereunder;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(vi)</FONT></DT><DD><FONT SIZE=2>Reviewing
and making recommendations to the Board of Directors regarding other plans to be proposed for adoption or adopted by the Company for the provision of
compensation to employees of, directors of and consultants to the Company;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(vii)</FONT></DT><DD><FONT SIZE=2>Reviewing
and discussing with management the Company's disclosures under "Compensation Discussion and Analysis" (the "CD&amp;A") to be included in the Company's annual
report on Form&nbsp;10-K and/or proxy statement, and based on such review and discussion, making a recommendation to the Board as to whether the CD&amp;A should be included in the Company's
annual report on Form&nbsp;10-K and, as applicable, the Company's proxy statement; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(viii)</FONT></DT><DD><FONT SIZE=2>Taking
such other actions as the Compensation Committee deems necessary or appropriate in connection with its duties hereunder or as may be authorized by the Board. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2><B>COMMITTEE PERFORMANCE EVALUATION:  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Committee shall produce and provide to the Board on an annual basis a performance evaluation of the Committee's performance of its duties under this charter.
The evaluation shall also include any recommendations to improve the charter of the Committee. The performance evaluation shall be
conducted in such a manner as the Committee deems appropriate. Any member of the Committee may present the evaluation to the Board either orally or in writing. </FONT></P>

<P><FONT SIZE=2><B>MEETINGS:  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It is anticipated that the Compensation Committee will meet at least twice each year. However, the Compensation Committee may establish its own schedule, which it
will provide to the Board of Directors in advance. At a minimum of one of such meetings annually, the Compensation Committee will consider stock plans, performance goals and incentive awards, and the
overall coverage and composition of the compensation package. </FONT></P>


<P><FONT SIZE=2><B>MINUTES:  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee will maintain written minutes of its meetings, which minutes will be filed with the minutes of the meetings of the Board of Directors. </FONT></P>

<P><FONT SIZE=2><B>REPORTS:  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee will provide written reports to the Board of Directors of the Company regarding recommendations of the Compensation Committee submitted
to the Board of Directors for action, and copies of the written minutes of its meetings. </FONT></P>


<P><FONT SIZE=2><B>RESOURCES AND AUTHORITY:  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Committee shall have the resources and authority appropriate to discharge its duties and responsibilities, including the authority to select, retain,
terminate, and approve the fees and other retention terms of special counsel or other experts or consultants, as it deems appropriate, without seeking approval of the Board or management. The
Committee may, at its discretion, also review the choice of any consultants or other experts recommended by management for the purpose of reviewing executive Company compensation. Authority to select,
retain, terminate, and approve the fees and other retention terms of any compensation consultants retained to assist in the evaluation of director, CEO, or senior executive compensation shall be
vested solely in the Committee. </FONT></P>

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

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=47,EFW="2176990",CP="OVERSTOCK.COM, INC.",DN="1",CHK=772856,FOLIO='B-2',FILE='DISK111:[07ZBB1.07ZBB14601]DO14601A.;7',USER='MBRADT',CD='28-MAR-2007;11:43' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->

<P><FONT SIZE=3><B>Overstock.com, Inc.</B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="22%"><FONT SIZE=2>MR. A. SAMPLE<BR>
DESIGNATION (IF ANY)<BR>
ADD 1<BR>
ADD 2<BR>
ADD 3<BR>
ADD 4<BR>
ADD 5<BR>
ADD 6</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="22%" ALIGN="CENTER"><FONT SIZE=2>000004</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="24%"><FONT SIZE=2>000000000.000000 ext<BR>
000000000.000000 ext<BR>
000000000.000000 ext</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="24%"><FONT SIZE=2>000000000.000000 ext<BR>
000000000.000000 ext<BR>
000000000.000000 ext</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TD WIDTH="92%" VALIGN="TOP"><FONT SIZE=2>Using a </FONT><FONT SIZE=2><B><U>black ink</U></B></FONT><FONT SIZE=2> pen, mark your votes with an </FONT><FONT SIZE=2><B>X</B></FONT><FONT SIZE=2> as shown in this example. Please do not write outside the
designated areas.</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP"><FONT SIZE=2><FONT FACE="WINGDINGS">&#253;</FONT></FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<HR NOSHADE>

<P><FONT SIZE=3><B>Annual Meeting Proxy Card</B></FONT><FONT
SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;123456&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C012456789&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12345 </FONT></P>

<HR NOSHADE>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TD COLSPAN=6 VALIGN="TOP"><FONT SIZE=2><B>A&nbsp;&nbsp;Proposals&#151;The Board of Directors recommends a vote <U>FOR</U> the nominee listed and <U>FOR</U> Proposals 2 and&nbsp;3.</B></FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 VALIGN="TOP"><FONT SIZE=2>1.&nbsp;&nbsp;Election of Director:</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="CENTER" VALIGN="TOP"><FONT SIZE=1><B>For</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="CENTER" VALIGN="TOP"><FONT SIZE=1><B>Withhold</B></FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="77%" VALIGN="TOP"><FONT SIZE=2>01&#151;Jason C. Lindsey</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="CENTER" VALIGN="TOP"><FONT SIZE=2><FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="CENTER" VALIGN="TOP"><FONT SIZE=2><FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="24%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="CENTER"><FONT SIZE=1><B>For</B></FONT></TD>
<TD WIDTH="8%" ALIGN="CENTER"><FONT SIZE=1><B>Against</B></FONT></TD>
<TD WIDTH="8%" ALIGN="CENTER"><FONT SIZE=1><B>Abstain</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="29%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="CENTER"><FONT SIZE=1><B>For</B></FONT></TD>
<TD WIDTH="8%" ALIGN="CENTER"><FONT SIZE=1><B>Against</B></FONT></TD>
<TD WIDTH="8%" ALIGN="CENTER"><FONT SIZE=1><B>Abstain</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="3%"><FONT SIZE=2>2.</FONT></TD>
<TD WIDTH="24%"><FONT SIZE=2>Approval of the Company's Performance Share Plan as described in the Proxy Statement.</FONT></TD>
<TD WIDTH="5%" ALIGN="CENTER"><FONT SIZE=2><FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="8%" ALIGN="CENTER"><FONT SIZE=2><FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="8%" ALIGN="CENTER"><FONT SIZE=2><FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>3.</FONT></TD>
<TD WIDTH="29%"><FONT SIZE=2>Ratification of the selection of PricewaterhouseCoopers LLP as Overstock.com's independent accountants for&nbsp;2007.</FONT></TD>
<TD WIDTH="5%" ALIGN="CENTER"><FONT SIZE=2><FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="8%" ALIGN="CENTER"><FONT SIZE=2><FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="8%" ALIGN="CENTER"><FONT SIZE=2><FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="32%"><BR><FONT SIZE=2><B>B&nbsp;&nbsp;Non-Voting Items</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2><B><BR>
&nbsp;</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD WIDTH="21%"><FONT SIZE=2><B><BR>
Meeting Attendance</B></FONT><FONT SIZE=2><BR>
Mark the box to the right<BR>
if you plan to attend the<BR>
Annual Meeting.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
<BR>
<BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TD COLSPAN=5 VALIGN="TOP"><BR><FONT SIZE=2><B>C&nbsp;&nbsp;Authorized Signatures&#151;This section&nbsp;must be completed for your vote to be counted.&#151;Date and Sign Below&nbsp;C</B></FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=5 VALIGN="TOP"><FONT SIZE=2><BR>
Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="32%"><BR><FONT SIZE=2> Date (mm/dd/yyyy)&#151;Please print date below.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2><BR>
Signature 1&#151;Please keep signature within the box.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2><BR>
Signature 2&#151;Please keep signature within the box.</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=48,EFW="2176990",CP="OVERSTOCK.COM, INC.",DN="1",CHK=787181,FOLIO='blank',FILE='DISK114:[07ZBB2.07ZBB14602]MA14602A.;15',USER='FALVARE',CD='29-MAR-2007;17:38' -->

<P><FONT SIZE=2>C
1234567890&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;J N T </FONT></P>

<P><FONT SIZE=2>2
2 D V&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0 1 2 5 4 11 </FONT></P>


<P><FONT SIZE=2>MR
A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE<BR>
140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND<BR>
MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND<BR>
MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND </FONT></P>

<P><FONT SIZE=5><B>+</B></FONT></P>

<HR NOSHADE>

<P><FONT SIZE=3><B>Proxy&#151;Overstock.com, Inc.  </B></FONT></P>

<HR NOSHADE>

<P><FONT SIZE=2><B>PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS<BR>
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON TUESDAY, MAY&nbsp;15,&nbsp;2007</B></FONT></P>

<P><FONT SIZE=2>The
undersigned hereby appoints Patrick M. Byrne and Jonathan E. Johnson III, or either of them, as proxies and attorneys-in-fact, each with full power of substitution, to
represent the undersigned at the Annual Meeting of Stockholders of Overstock.com,&nbsp;Inc. (the "Company") to be held at the warehouse of the Company located at 1455 South 5500 West, Salt Lake
City, UT 84104, at 1:00&nbsp;p.m. on May&nbsp;15, 2007, including any adjournments or postponements thereof, and to vote the number of shares the undersigned would be entitled to vote if
personally present at the meeting. </FONT></P>

<P><FONT SIZE=2>UNLESS
A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR THE NOMINEE LISTED IN PROPOSAL 1, FOR PROPOSAL&nbsp;2 AND FOR PROPOSAL 3, AS MORE SPECIFICALLY DESCRIBED IN THE PROXY
STATEMENT. IF SPECIFIC INSTRUCTIONS ARE INDICATED, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THOSE INSTRUCTIONS. </FONT></P>

<P><FONT SIZE=2><B>PLEASE COMPLETE, DATE AND SIGN THIS PROXY ON THE OTHER SIDE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.</B></FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=49,EFW="2176990",CP="OVERSTOCK.COM, INC.",DN="1",CHK=741111,FOLIO='blank',FILE='DISK114:[07ZBB2.07ZBB14602]MA14602A.;15',USER='FALVARE',CD='29-MAR-2007;17:38' -->
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