Summary of Compensation Arrangements for Named Executive Officers of Overstock.com, Inc.
This document outlines the compensation arrangements for the named executive officers of Overstock.com, Inc. For 2005, most executive officers receive a base salary of $100,000, except for the President and CEO, who receives no salary. Bonuses for 2004 were awarded to several officers based on performance, while the CEO declined any bonus. The company also maintains a stock option plan, under which certain officers received option grants in 2004, but no new grants were made in 2005 as of March 10. The Compensation Committee oversees these arrangements.
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Exhibit 10.38
Summary of Compensation Arrangements
Applicable to Named Executive Officers of Overstock.com, Inc.
The Compensation Committee (the "Committee") of the Board of Directors of Overstock.com, Inc. (the "Company") oversees and reviews the Company's executive compensation policies and programs and approves the form and amount of compensation to be paid to the Company's executive officers.
Annual Compensation—Base salaries and bonuses
The Company is not a party to any written employment agreement with any of its named executive officers.
Effective January 1, 2005, the Company pays each of its named executive officers (as defined in Item 402(a)(3) of Regulation S-K), other than its President and chief executive officer, base salaries at the annual rate of $100,000. The Company does not pay its President and chief executive officer, Patrick M. Byrne, any base salary.
On February 4, 2005, the Committee approved bonus payments to the named executive officers as a result of the officers' performance in 2004 as follows:
| Name and Title | Bonus | ||
|---|---|---|---|
| David Chidester, Vice President Finance | $ | 75,000 | |
| Jonathan Johnson, Vice President, Corporate Affairs and Legal | $ | 75,000 | |
| Russell (Tad) Martin, Vice President of Merchandising and Operations | $ | 75,000 | |
| Shawn Schwegman, Vice President of Technology | $ | 75,000 | |
The Committee had also previously approved additional bonus payments earlier during 2004 to Mr. Johnson in the amount of $50,000 and Mr. Chidester in the amount of $20,000.
The President and chief executive officer of the Company, Dr. Patrick M. Byrne, is a named executive officer, but declined to accept any bonus payment during or relating to 2004.
Long Term Incentive Awards—Stock option awards
The Company maintains its 2002 Stock Option Plan, as amended, under which the Committee and the Board have the power to grant options and other awards to employees, including the named executive officers. No options or other awards have been made during 2005 to any named executive officer, and no plan or arrangement exists at March 10, 2005 regarding future grants to any named executive officer. During 2004, option grants were made to the persons who are now named executive officers of the Company as follows:
| Name and Title | Options | |
|---|---|---|
| Patrick M. Byrne, President and chief executive officer | 0 | |
| David Chidester, Vice President Finance | 25,000 | |
| Jonathan Johnson, Vice President, Corporate Affairs and Legal | 5,000 | |
| Russell (Tad) Martin, Vice President of Merchandising and Operations | 25,000 | |
| Shawn Schwegman, Vice President of Technology | 10,000 |
All of the stock options granted have an exercise price per share of $18.58, which was the last sales price of the Company's common stock on the Nasdaq National Market System on the date of grant.
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