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OVERSTOCK.COM, INC. NON-EMPLOYEE DIRECTORS NONQUALIFIED DEFERRED COMPENSATION PLAN

Executive Compensation Plan Agreement

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OVERSTOCK.COM, INC

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Title: OVERSTOCK.COM, INC. NON-EMPLOYEE DIRECTORS NONQUALIFIED DEFERRED COMPENSATION PLAN
Date: 12/17/2009
Industry: Retail (Catalog and Mail Order)     Sector: Services

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Exhibit 10.2

 

OVERSTOCK.COM, INC.

NON-EMPLOYEE DIRECTORS

NONQUALIFIED DEFERRED COMPENSATION PLAN

 



 

OVERSTOCK.COM, INC.

NON-EMPLOYEE DIRECTORS

NONQUALIFIED DEFERRED COMPENSATION PLAN

 

Table of Contents

 

 

 

Page

 

 

 

Article 1 - Definitions

1

 

 

 

1.1

Account

1

1.2

Administrator

1

1.3

Board

1

1.4

Change-in-Control

1

1.5

Code

1

1.6

Compensation

2

1.7

Deferrals

2

1.8

Deferral Election

2

1.9

Director

2

1.10

Effective Date

2

1.11

Eligible Director

2

1.12

Investment Fund

2

1.13

Participant

2

1.14

Plan Sponsor

2

1.15

Plan Year

2

1.16

Retirement

2

1.17

Separation from Service

2

1.18

Trust

2

1.19

Trustee

3

 

 

 

Article 2 - Participation

3

 

 

 

2.1

Commencement of Participation

3

2.2

Loss of Eligible Director Status

3

 

 

 

Article 3 - Contributions

3

 

 

 

3.1

Deferral Elections - General

3

3.2

Time of Election

3

3.3

Distribution Elections

4

3.4

Additional Requirements

4

3.5

Crediting of Contributions

4

 

 

 

Article 4 - Vesting

4

 

 

 

4.1

Vesting of Deferrals

4

 

 

 

Article 5 - Accounts

4

 

 

 

5.1

Accounts

4

5.2

Investments, Gains and Losses

5

 



 

Article 6 - Distributions

5

 

 

 

6.1

Distribution Election

5

6.2

Distributions Upon an In-Service Account Triggering Date

5

6.3

Distributions Upon Retirement

6

6.4

Substantially Equal Annual Installments

6

6.5

Distributions upon Death

6

6.6

Changes to Distribution Elections

6

6.7

Acceleration or Delay in Payments

7

6.8

Unforeseeable Emergency

7

6.9

Domestic Relations Orders

7

6.10

Minimum Distribution

7

6.11

Form of Payment

8

 

 

 

Article 7 - Beneficiaries

8

 

 

 

7.1

Beneficiaries

8

7.2

Lost Beneficiary

8

 

 

 

Article 8 - Funding

8

 

 

 

8.1

Prohibition Against Funding

8

8.2

Deposits in Trust

9

8.3

Withholding of Participant Contributions

9

 

 

 

Article 9 - General Provisions

9

 

 

 

9.1

Administrator

9

9.2

No Assignment

9

9.3

Incompetence

10

9.4

Identity

10

9.5

Expenses

10

9.6

Insolvency

10

9.7

Amendment or Modification

10

9.8

Plan Suspension

11

9.9

Plan Termination

11

9.10

Plan Termination due to a Change-in-Control

11

9.11

Construction

11

9.12

Governing Law

12

9.13

Severability

12

9.14

Headings

12

9.15

Terms

12

 



 

OVERSTOCK.COM, INC.

NON-EMPLOYEE DIRECTORS

NONQUALIFIED DEFERRED COMPENSATION PLAN

 

Overstock.com, Inc., a Delaware corporation, hereby adopts this Overstock.com, Inc. Non-Employee Directors Nonqualified Deferred Compensation Plan (the “Plan”) for the benefit of its non-employee members of the Board of Directors.  It is intended to comply with Internal Revenue Code Section 409A.

 

Article 1 - Definitions

 

1.1                                Account

 

The sum of all the bookkeeping sub-accounts as may be established for each Participant as provided in Section 5.1 hereof.

 

1.2                                Administrator

 

An administrative committee appointed by the Board.  The Plan Administrator shall serve as the agent for the Plan Sponsor with respect to the Trust.

 

1.3                                Board

 

The Board of Directors of the Plan Sponsor.

 

1.4                                Change-in-Control

 

Provided that such term shall be interpreted within the meaning of regulations promulgated under Code Section 409A, a “Change-in-Control” of the Plan Sponsor (which, for purpose of this Section 1.5 shall mean Overstock.com, Inc. but not any of its affiliates or subsidiaries) shall mean the first to occur of any of the following:

 

(a)                                   the date that any one person or persons acting as a group, other than Patrick M. Byrne, Dorothy M. Byrne or John J. Byrne or an individual or entity that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with Patrick M. Byrne, Dorothy M. Byrne and/or John J. Byrne, acquires ownership of Plan Sponsor stock constituting more than fifty percent (50%) of the total voting power of the Plan Sponsor;

 

(b)                                  the date that any one person or persons acting as a group acquires substantially all of the assets of the Plan Sponsor; or

 

(c)                                   the date that a majority of members of the Plan Sponsor’s Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or elections.

 

1.5                                Code

 

The Internal Revenue Code of 1986, as amended.

 

1



 

1.6                                Compensation

 

The Participant’s earned director fee remuneration for serving as a Director, as defined herein.

 

1.7                                Deferrals

 

The portion of Compensation that a Participant elects to defer in accordance with Section 3.1 hereof.

 

1.8                                Deferral Election

 

The separate agreement, submitted to the Administrator, by which an Eligible Director agrees to participate in the Plan and make Deferrals thereto for a Plan Year.

 

1.9                                Director

 

Any person serving on the Board.

 

1.10                         Effective Date

 

January 1, 2010.

 

1.11                         Eligible Director

 

Each non-employee member of the Board.

 

1.12                         Investment Fund

 

Each investment(s) which serves as a means to measure value, increases or decreases with respect to a Participant’s Accounts.

 

1.13                         Participant

 

An Eligible Director who is a Participant as provided in Article 2.

 

1.14                         Plan Sponsor

 

Overstock.com, Inc.

 

1.15                         Plan Year

 

Calendar year.

 

1.16                         Retirement

 

Retirement shall mean a Participant’s Separation from Service from the Board of Directors.

 

1.17                         Separation from Service

 

Provided that such term shall be interpreted within the meaning of regulations promulgated under Code Section 409A, a Participant shall incur a Separation from Service with the Service Recipient upon his or her cessation of service as a member of the Board.

 

1.18                         Trust

 

The agreement between the Plan Sponsor and the Trustee, under which the assets of the Plan are held, administered and managed.

 

2



 

1.19                         Trustee

 

U.S. Bank National Association or such other successor that shall become Trustee pursuant to the terms of the Trust.

 

Article 2 - Participation

 

2.1                                Commencement of Participation

 

Each Eligible Director shall become a Participant as of the date on which his or her Deferral Election first becomes effective.

 

2.2                                Loss of Eligible Director Status

 

A Participant who is no longer an Eligible Director shall not be permitted to submit a Deferral Election and all Deferrals for such Participant shall cease as of the end of the Plan Year in which such Participant is determined to no longer be an Eligible Director.  Amounts credited to the Account of a Participant who is no longer an Eligible Director shall continue to be held pursuant to the terms of the Plan and shall be distributed as provided in Article 6.

 

Article 3 - Contributions

 

3.1                                Deferral Elections - General

 

A Participant’s Deferral Election for a Plan Year is irrevocable for that applicable Plan Year; provided, however that a Deferral Election for a Plan Year may be canceled if required under Section 6.8 (Unforeseeable Emergency) of this Plan.  Such amounts deferred under the Plan shall not be made available to such Participant, except as provided in Article 6, and shall reduce such Participant’s Compensation from the Plan Sponsor in accordance with the provisions of the applicable Deferral Election; provided, however, that all such amounts shall be subject to the rights of the general creditors of the Plan Sponsor as provided in Article 8.  The Deferral Election, in addition to the requirements set forth below, must designate: (i) the amount of Compensation to be deferred, (ii) the time of the distribution, and (iii) the form of the distribution.

 

3.2                                Time of Election

 

A Deferral Election shall be void if it is not made in a timely manner as follows:

 

(a)                                   A Deferral Election with respect to any Compensation must be submitted to the Administrator before the beginning of the calendar year during which the amount to be deferred will be earned.  As of December 31 of each calendar year, said Deferral Election is irrevocable for the calendar year to which it relates.

 

(b)                                  Notwithstanding the foregoing and in the discretion of the Plan Sponsor, in a year in which an Eligible Director is first eligible to participate, and provided that such Eligible Director is not eligible to participate in any other similar account balance arrangement subject to Code Section 409A, such Deferral Election may be submitted within thirty (30) days after the date on which the Eligible Director is first eligible to participate, and such Deferral

 

3



 

Election shall apply to Compensation to be paid for services to be performed during the remainder of the calendar year after such election is made.

 

3.3                                Distribution Elections

 

At the time a Participant makes a Deferral Election, he or she must also elect the time and form of the distribution by establishing one or more In-Service Account(s) or Retirement Account(s) as provided in Sections 5.1 and 6.1.  If the Participant fails to properly designate the time and form of a distribution, the Participant’s Account shall be designated as a Retirement Account and shall be paid in a lump sum.

 

3.4                                Additional Requirements

 

The Deferral Election, subject to the limitations set forth in Sections 3.1 and 3.2 hereof, shall comply with the following additional requirements, or as otherwise required by the Administrator in its sole discretion:

 

(a)                                   Deferrals may be made in whole percentages or stated dollar amounts with such limitations as determined by the Administrator.

 

(b)                                  The maximum amount that may be deferred each Plan Year is one-hundred percent (100%) of the Participant’s Compensation.

 

(c)                                   The distribution year for an In-Service Account must be at least two (2) Plan Years subsequent to the Plan Year in which the Participant first establishes the In-Service subaccount to be credited with contributions.

 

3.5                                Crediting of Contributions

 

Deferrals shall be credited to a Participant’s Account, and if applicable transferred to the Trust, at such time as the Plan Sponsor shall determine.

 

Article 4 - Vesting

 

4.1                                Vesting of Deferrals

 

A Participant shall be one-hundred percent (100%) vested in his or her Account attributable to Deferrals and any earnings or losses on the investment of such Deferrals.

 

Article 5 - Accounts

 

5.1                                Accounts

 

The Administrator shall establish and maintain a bookkeeping account in the name of each Participant.  The Administrator shall also establish sub-accounts as provided in subsection (a) and (b), below, as elected by the Participant pursuant to Article 3.  A Participant may have a maximum of ten (10) sub-accounts at any time.

 

(a)                                   A Participant may establish one or more Retirement Account(s) (“Retirement sub-accounts”) by designating as such on the Participant’s Deferral Election.  Each Participant’s Retirement sub-account shall be credited with Deferrals (as specified in the

 

4



 

Participant’s Deferral Election) and the Participant’s allocable share of any earnings or losses on the foregoing.

 

(b)                                  A Participant may establish one or more In-Service Accounts (“In-Service sub-accounts”) by designating as such in the Participant’s Deferral Election the year in which payment shall be made.  Each Participant’s In-Service sub-account shall be credited with Deferrals (as specified in the Participant’s Deferral Election) and the Participant’s allocable share of any earnings or losses on the foregoing.

 

5.2                                Investments, Gains and Losses

 

(a)                                   A Participant may direct that his or her Retirement sub-accounts and or In-Service sub-accounts established pursuant to Section 5.1 may be valued as if they were invested in one or more Investment Funds as selected by the Plan Sponsor in multiples of one percent (1%).  The Plan Sponsor may from time to time, at the discretion of the Administrator, change the Investment Funds for purposes of this Plan.

 

(b)                                  The Administrator shall adjust the amounts credited to each Participant’s Account to reflect Deferrals, investment experience, distributions and any other appropriate adjustments.  Such adjustments shall be made as frequently as is administratively feasible.

 

(c)                                   A Participant may change his or her selection of Investment Funds no more than six (6) times each Plan Year with respect to his or her Account or sub-accounts by filing a new election in accordance with procedures established by the Administrator.  An election shall be effective as soon as administratively feasible following the date the change is submitted on a form prescribed by the Administrator.

 

(d)                                  Notwithstanding the Participant’s ability to designate the Investment Fund in which his or her deferred Compensation shall be deemed invested, the Plan Sponsor shall have no obligation to invest any funds in accordance with the Participant’s election.  Participants’ Accounts shall merely be bookkeeping entries on the Plan Sponsor’s books, and no Participant shall obtain any property right or interest in any Investment Fund.

 

Article 6 - Distributions

 

6.1                                Distribution Election

 

Each Participant shall designate in his or her Deferral Election the form and timing of his or her distribution by indicating the type of sub-account as described under Section 5.1, and by designating the form in which payments shall be made from the choices available under Section 6.2 and 6.3 hereof.  Notwithstanding anything to the contrary contained herein provided, no acceleration of the time or schedule of payments under the Plan shall occur except as permitted under this Plan, Code Section 409A and the regulations thereunder.

 

6.2                                Distributions Upon an In-Service Account Triggering Date

 

In-Service sub-account distributions shall begin as soon as administratively feasible but no later than ninety (90) days following January 1 of the calendar year designated by the

 

5



 

Participant on a properly submitted Deferral Election, and are payable in either a lump-sum payment or substantially equal annual installments, as described in Section 6.4 below, over a period of up to ten (10) years as elected by


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