Exhibit
10.2


 


OVERSTOCK.COM


Performance Share Plan


2006-2008 Grant


 


THIS GRANT is made,
effective as of January 1, 2006, between Overstock.com, Inc. (the “Company”)
and                 
(the “Participant”).


 


RECITALS:


 


WHEREAS, the Company has
adopted the Performance Share Plan (“Plan”), which Plan is incorporated herein
by reference and made part of this Grant; and


 


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.


 


NOW THEREFORE, in consideration
of the mutual covenants set forth herein, the parties hereto agree as follows:


 


1.             Grant:  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.


 


2.             Award
Period:  The Award Period shall be January
1, 2006 through December 31, 2008.


 


3.             Performance
Goal:  The Performance Goal shall be
a 25% return on equity, measured by compounded growth in EV per share of the Company.


 


4.             Harvest
Percentage:  Shall be dependent on
the extent to which the Performance Goal is attained, and shall be determined
as follows:


 




	
  Growth in Economic Value

  	
   

  	
  Harvest Percentage

  	
   

  
	
  10% or lower

  	
   

  	
  0%

  	
   

  
	
  25%

  	
   

  	
  100%

  	
   

  
	
  40% or higher

  	
   

  	
  200%

  	
   

  






 


For percentage growth between 10% and 40%,
the Harvest Percentage will be determined on the basis of straight line
interpolation.


 


5.             Award
Payment:  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 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


 


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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 409A of the Internal Revenue Code.


 


6.             Termination
of Employment:  Except as provided in
Section 6 or Section 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.


 


7.             Successor Requirement:  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 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 409A of the Internal Revenue
Code.


 


8.             Definitions:  All terms not otherwise defined herein shall
have the same meaning as in the Plan.


 


9.             Withholding:  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.


 


10.           Reduction
of the Award:  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.


 


11.           No
Right to Continued Employment: 
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


 


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provided in the Plan and in this Grant.  In addition, nothing herein shall obligate
the Company to make future Grants to the Participant.


 


12.           Award
Subject to Plan:  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.


 


13.           Designation
of Beneficiary by Participant:  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.


 


14.           Notices:  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.


 


15.           Signature
in Counterparts:  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.


 


16.           Special
2006-2008 Understanding with Respect to Early Partial Distribution: 
For this 2006-20808 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 31, 2007.  Such distribution, if made,
shall be made no later than March 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 409A of the Internal Revenue Code of 1986,
as amended, prior to January 1, 2007.


 


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IN WITNESS WHEREOF, the
parties hereto have executed this Grant as of the effective date set forth
above.


 


	
  Participant

  	
  Overstock.com, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  
	
  Name

  	
  Patrick M. Byrne

  
	
   

  	
   

  	
  President

  
						



 


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