Exhibit 10.2
APPENDIX B
NON-EMPLOYEE DIRECTOR STOCK OPTION AND RETAINER PLAN
OF
PFSWEB, INC.
          WHEREAS, PFSweb, Inc., a Delaware corporation (the “Company”) has
adopted that certain 1999 Non-Employee Director Stock Option and Retainer Plan
(as amended to date, the “Plan”); and
          WHEREAS, subject to the requisite approval of the Company’s
stockholders at the Company’s 2009 Annual Meeting of Stockholders, the Company
has authorized and adopted certain amendments to the Plan;
          NOW, THEREFORE, in order to implement and effectuate said amendments,
the Plan, as so amended, shall read as follows:
          PFSweb, Inc., a corporation organized under the laws of the State of
Delaware, hereby adopts this Non-Employee Director Stock Option and Retainer
Plan. The purposes of this Plan are as follows:
          (1) To further the growth, development and financial success of the
Company by providing incentives to its non-employee Directors by assisting them
to become owners of the Company’s Common Stock and thus to benefit directly from
its growth, development and financial success.
          (2) To enable the Company to obtain and retain the services of
qualified non-employee Directors in order to contribute to the long-range
success of the Company by providing and offering them an opportunity to become
owners of the Company’s Common Stock.
ARTICLE I
DEFINITIONS
          Whenever the following terms are used in this Plan, they shall have
the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter and the
singular shall include the plural, where the context so indicates.
Section 1.1 — Board
          “Board” shall mean the Board of Directors of the Company.
Section 1.2 — Code
          “Code” shall mean the Internal Revenue Code of 1986, as amended.
Section 1.3 — Committee
          “Committee” shall mean the Committee appointed by the Board, as
provided in Section 6.1.
Section 1.4 — Company
          “Company” shall mean PFSweb, Inc., a Delaware corporation.
Section 1.5 — Director
          “Director” shall mean a member of the Board who is not an Employee.
Section 1.6 — Effective Date

 

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          “Effective Date” shall mean July 1, 1999.
Section 1.7 — Employee
          “Employee” shall mean any employee (as defined in accordance with the
regulations and revenue rulings then applicable under Section 3401(c) of the
Code) of the Company, or of any corporation which is then a Subsidiary.
Section 1.8 — Exchange Act
          “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended.
Section 1.9 — Non-Qualified Option
          “Non-Qualified Option” shall mean an Option which is not an incentive
stock option and is not qualified under Section 422 of the Code.
Section 1.10 — Officer
          “Officer” shall mean an officer of the Company, as defined in
Rule 16a-1(f) under the Exchange Act, as such Rule may be amended in the future.
Section 1.11 — Option
          “Option” shall mean an option to purchase Common Stock of the Company
granted under the Plan.
Section 1.12 — Optionee
          “Optionee” shall mean a Director to whom an Option is granted under
the Plan.
Section 1.13 — Parent Corporation
          “Parent Corporation” shall mean any corporation in an unbroken chain
of corporations ending with the Company if each of the corporations other than
the Company then owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.
Section 1.14 — Plan
          “Plan” shall mean this Non-Employee Director Stock Option and Retainer
Plan of PFSweb, Inc.
Section 1.15 — Retainer
          “Retainer” shall mean the annual cash retainer payable to each
Director for services as a member of the Board and any committee or committees
of the Board.
Section 1.16 — Rule 16b-3
          “Rule 16b-3” shall mean that certain Rule 16b-3 under the Exchange
Act, as such Rule may be amended in the future.
Section 1.17 — Secretary
          “Secretary” shall mean the Secretary of the Company.
Section 1.18 — Securities Act

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          “Securities Act” shall mean the Securities Act of 1933, as amended.
Section 1.19 — Shares
          “Shares” shall mean shares of the Company’s Common Stock.
Section 1.20 — Subsidiary
          “Subsidiary” shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing 50% or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
Section 1.21 — Termination
          “Termination” shall mean the time when the Director no longer serves
as a member of the Board, including, but not by way of limitation, a termination
by resignation, discharge, death or retirement.
ARTICLE II
SHARES SUBJECT TO PLAN
Section 2.1 — Shares Subject to Plan
          The Shares of stock subject to this Plan shall be shares of the
Company’s Common Stock. The aggregate number of such Shares which may be issued
pursuant to this Plan shall be 155,643.
Section 2.2 — Unexercised Options
          If any Option expires or is canceled without having been fully
exercised, the number of Shares subject to such Option but as to which such
Option was not exercised prior to its expiration or cancellation, may again be
optioned hereunder, subject to the limitations of Section 2.1.
Section 2.3 — Changes in Company’s Shares
          In the event that the outstanding Shares of Common Stock of the
Company are hereafter changed into or exchanged for a different number or kind
of shares or other securities of the Company, or of another corporation, or in
the event of any other capital transaction involving the outstanding shares of
Common Stock of the Company as the Committee shall determine in its sole
discretion, whether by reason of reorganization, merger, consolidation,
recapitalization, reclassification, stock split-up, stock dividend, combination
of shares or otherwise, appropriate adjustments shall be made by the Committee
in the number and kind of Shares which may be issued hereunder, including
adjustment to the number, exercise price and kind of shares for the purchase of
which Options may be granted, and further including adjustments of the
limitations in Section 2.1 on the maximum number and kind of shares which may be
issued hereunder and adjustments to the number of Options set forth in
Section 3.5 below.
ARTICLE III
RETAINER FEES AND GRANTING OF OPTIONS
Section 3.1 — Payment of Retainer
          (a) Each Director may elect under the Plan to receive payment of any
Retainer (in such installments as such Retainer shall be payable) in Shares, in
lieu of cash, by submitting a written election (the

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“Notice of Election”) to the Company. The Notice of Election shall become
effective six months following the date of the Notice of Election or such
earlier date as may be permitted under Rule 16b-3 (the “Election Effective
Date”) and, from and after the Election Effective Date, all Retainers payable to
the electing Director (whether in installments or otherwise) shall be payable in
Shares in the manner set forth herein.
          (b) Subject to the foregoing, each Notice of Election shall become
effective on its Election Effective Date and shall continue in effect until
revoked by the electing Director in a written notice of revocation (the “Notice
of Revocation”) delivered to the Company; provided, however, that no Notice of
Revocation shall become effective until six months following the date of the
Notice of Revocation or such earlier date as may be permitted under Rule 16b-3.
          (c) If no Notice of Election is submitted to the Company, and prior to
any Election Effective Date, all Retainers shall be payable in cash.
Section 3.2 — Number of Shares
          The number of Shares to be issued to each Director electing to have
his or her Retainer paid in Shares shall be determined by dividing the dollar
amount of the then payable Retainer by the fair market value of the Shares as of
the most recent trading day immediately prior to the date the Retainer is
otherwise payable. No fractional Shares shall be issued and any fractional Share
shall be rounded to the nearest whole Share. Subject to the terms and provisions
hereof, all Shares shall be issued in certificate form in the name of the
Director (or any designee) as promptly as practicable following the date of
payment. For purposes of this Section, fair market value shall be determined in
accordance with Section 4.2(b) below.
Section 3.3 — Eligibility
          Each Director shall be granted Options in accordance with the
provisions set forth herein.
Section 3.4 — Non-Qualification of Options
          Each Option shall be a Non-Qualified Option.
Section 3.5 — Granting of Options
          Each person who is a Director immediately following each annual
meeting of stockholders of the Company shall receive an Option to purchase 4,255
Shares as of the date of such annual meeting; provided that such Director shall
have attended at least 75% of the meetings of the Board (which may include
committee meetings) during the most recent completed fiscal year prior to such
annual meeting (or such shorter period of time as such Director held office
during such fiscal year).
ARTICLE IV
TERMS OF OPTIONS
Section 4.1 — Option Agreement
          Each Option shall be evidenced by a written Stock Option Agreement,
which shall be executed by the Optionee and an authorized Officer of the Company
and which shall contain such terms and conditions as are consistent with the
Plan.
Section 4.2 — Option Price
          (a) The price of the Shares subject to each Option shall be equal to
100% of the fair market value of such Shares on the date such Option is granted.

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          (b) For purposes of the Plan, the fair market value of a Share of the
Company’s Common Stock as of a given date shall be: (i) the closing price of a
Share of the Company’s Common Stock on the principal exchange on which Shares of
the Company’s Common Stock are then trading; or (ii) if such Common Stock is not
traded on an exchange but is quoted on NASDAQ or a successor quotation system,
(1) the last sales price (if the Company’s Common Stock is then listed as a
National Market Issue under the NASD National Market System) or (2) the mean
between the closing representative bid and asked prices (in all other cases) for
the Company’s Common Stock, in each case, on such date as reported by NASDAQ or
such successor quotation system; or (iii) if such Common Stock is not publicly
traded on an exchange and not quoted on NASDAQ or a successor quotation system,
the mean between the closing bid and asked prices for the Company’s Common
Stock, on such date, as determined in good faith by the Committee; or (iv) if
the Company’s Common Stock is not publicly traded, the fair market value
established by the Committee acting in good faith.
Section 4.3 — Commencement of Exercisability
          (a) No Option may be exercised in whole or in part during the six
months after such Option is granted.
          (b) Subject to the provisions hereof, each Option granted hereunder
shall be subject to the following cumulative vesting schedule:
               (i) Until the date which is one year from the date of grant, the
Option shall not be vested and shall not be exercisable as to any of the shares
subject thereto; and
               (ii) From and after the date which is one year from the date of
grant, the Option shall vest and be fully exercisable.
Section 4.4 — Expiration of Options
          No Option may be exercised to any extent after the first to occur of
the following events:
               (i) The expiration of ten years from the date the Option was
granted; or
               (ii) Except in the case of any Optionee who is disabled (within
the meaning of Section 22(e)(3) of the Code), the expiration of three months
from the date of the Optionee’s Termination for any reason other than such
Optionee’s death; or
               (iii) With respect to an Option held by an Optionee who is
disabled (within the meaning of Section 22(e)(3) of the Code), the expiration of
one year from the date of the Optionee’s Termination for any reason other than
such Optionee’s death unless the Optionee dies within said one-year period; or
               (iv) The expiration of one year from the date of the Optionee’s
death with respect to all Options held by such Optionee.
Section 4.5 — Adjustments in Outstanding Options
          In the event that the outstanding Shares of the stock subject to
Options are changed into or exchanged for a different number or kind of shares
of the Company or other securities of the Company, or in the event of any other
capital transaction involving the outstanding shares of Common Stock of the
Company as the Committee shall determine in its sole discretion, whether by
reason of merger, consolidation, recapitalization, reclassification, stock
split-up, stock dividend, combination of shares or otherwise, the Committee
shall make an appropriate and equitable adjustment in the number and kind of
shares as to which all outstanding Options, or portions thereof then
unexercised, shall be exercisable, to the end that after such event the
Optionee’s proportionate interest shall be maintained as before the occurrence
of such event. Such adjustment in an outstanding Option shall be made without
change in the total price applicable to the Option or the unexercised portion of
the Option (except for any change in the aggregate price resulting from
rounding-off of share quantities or prices) and with any

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necessary corresponding adjustment in Option price per share. Any such
adjustment made by the Committee shall be final and binding upon all Optionees,
the Company and all other interested persons.
Section 4.6 — No Repricing
     Except in connection with a corporate transaction involving the Company
(including, without limitation, any stock dividend, stock split, extraordinary
cash dividend, recapitalization, reorganization, merger, consolidation,
split-up, spin-off, combination, or exchange of shares), the terms of
outstanding Options may not be amended to reduce the exercise price of
outstanding Options or cancel outstanding Options in exchange for cash, other
awards or Options with an exercise price that is less than the exercise price of
the original Options without stockholder approval.
ARTICLE V
EXERCISE OF OPTIONS
Section 5.1 — Person Eligible to Exercise
          During the lifetime of the Optionee, only such Optionee may exercise
an Option (or any portion thereof) granted to him; provided, however, that,
unless otherwise prohibited by Rule 16b-3, an Optionee may transfer all or any
portion of an Option to his spouse or immediate family member or any trust for
the benefit thereof or as the Committee may otherwise permit in its sole
discretion. After the death of the Optionee, any exercisable portion of an
Option may, prior to the time when such portion becomes unexercisable under the
Plan, be exercised by his personal representative or by any person empowered to
do so under the deceased Optionee’s will or under the then applicable laws of
descent and distribution.
Section 5.2 — Partial Exercise
          At any time and from time to time prior to the time when any
exercisable Option or exercisable portion thereof becomes unexercisable under
the Plan, such Option or portion thereof maybe exercised in whole or in part;
provided, however, that the Company shall not be required to issue fractional
shares and the Committee may, by the terms of the Option, require any partial
exercise to be with respect to a specified minimum number of shares.
Section 5.3 — Manner of Exercise
          An exercisable Option, or any exercisable portion thereof, may be
exercised solely by delivery to the Secretary or his office of all of the
following prior to the time when such Option or such portion becomes
unexercisable under the Plan or the applicable Stock Option Agreement:
          (a) Notice in writing signed by the Optionee or other person then
entitled to exercise such Option or portion, stating that such Option or portion
is exercised, such notice complying with all applicable rules established by the
Committee; and
          (b) (i) Full payment (in cash or by check) for the Shares with respect
to which such Option or portion is thereby exercised; or
               (ii) Subject to the consent of the Committee, (A) Shares of the
Company’s Common Stock owned by the Optionee duly endorsed for transfer to the
Company or (B) subject to the timing requirements of Section 5.4, Shares of the
Company’s Common Stock issuable to the Optionee upon exercise of the Option,
with a fair market value (as determined under Section 4.2(b)) on the date of
Option exercise equal to the aggregate Option price of the Shares with respect
to which such Option or portion is thereby exercised; or
               (iii) Any combination of the consideration provided in the
foregoing subsections (i) and (ii); and

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          (c) The payment to the Company (or other employer corporation) of all
amounts which it is required to withhold under federal, state or local law in
connection with the exercise of the Option; provided, that, with the consent of
the Committee, any combination of the following may be used to make all or part
of such payment: (i) Shares of the Company’s Common Stock owned by the Optionee
duly endorsed for transfer or (ii) subject to the timing requirements of
Section 5.4, Shares of the Company’s Common Stock issuable to the Optionee upon
exercise of the Option, valued in accordance with Section 4.2(b) at the date of
Option exercise; and
          (d) Such representations and documents as the Committee, in its
absolute discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act and any other federal or state
securities laws or regulations. The Committee may, in its absolute discretion,
also take whatever additional actions it deems appropriate to effect such
compliance including, without limitation, placing legends on Share certificates
and issuing stop-transfer orders to transfer agents and registrars; and
          (e) In the event that the Option or portion thereof shall be exercised
pursuant to Section 5.1 by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to exercise the Option
or portion thereof.
Section 5.4 — Certain Timing Requirements
          Shares of the Company’s Common Stock issuable to the Optionee upon
exercise of the Option may be used to satisfy the Option price or the tax
withholding consequences of such exercise only with the consent of the Committee
and (i) during the trading window period following the date of release of the
quarterly or annual summary statement of sales and earnings of the Company as
may be established by the Company for its senior executives from time to time or
(ii) pursuant to an irrevocable written election by the Optionee to use Shares
of the Company’s Common Stock issuable to the Optionee upon exercise of the
Option to pay all or part of the Option price or the withholding taxes made at
least six months prior to the payment of such Option price or withholding taxes.
Section 5.5 — Conditions to Issuance of Stock Certificates
          The Shares of stock issuable and deliverable upon the exercise of an
Option, or any portion thereof, may be either previously authorized but unissued
Shares or issued Shares which have then been reacquired by the Company. The
Company shall not be required to issue or deliver any certificate or
certificates for Shares of stock issued in payment of any Retainer or purchased
upon the exercise of any Option or portion thereof prior to the fulfillment of
all of the following conditions:
          (a) The admission of such Shares to listing on all stock exchanges on
which such class of stock is then listed; and
          (b) The completion of any registration or other qualification of such
Shares under any state or federal law or under the rulings or regulations of the
Securities and Exchange Commission or any other governmental regulatory body, if
any such registration or qualification may be necessary or advisable; and
          (c) The obtaining of any approval or other clearance from any state or
federal governmental agency which may be necessary or advisable; and
          (d) The payment to the Company (or other employer corporation) of all
amounts which it is required to withhold under federal, state or local law in
connection with the exercise of the Option; and
          (e) The lapse of such reasonable period of time following the exercise
of the Option as the Secretary of the Company may establish from time to time
for reasons of administrative convenience.
ARTICLE VI
ADMINISTRATION

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Section 6.1 — Committee
          The Plan shall be administered by the Committee which shall consist of
two or more members of the Board, as the Board may appoint from time to time;
provided, however that, in the absence of such appointment, the Plan shall be
administered by the Board (in which event the term “Committee” as used herein
shall mean the Board); provided, further, however, that, notwithstanding the
foregoing, the Plan shall be construed, interpreted, implemented and
administered in a manner sufficient to comply with the provisions of Rule 16b-3,
and, in particular, in order to provide that the members of the Committee shall
at all times satisfy the requirements set forth therein.
Section 6.2 — Duties and Powers of Committee
          It shall be the duty of the Committee to conduct the general
administration of the Plan in accordance with its provisions. The Committee
shall have the power to interpret the Plan and the Options and to adopt such
rules for the administration, interpretation and application of the Plan as are
consistent therewith and to interpret, amend or revoke any such rules.
Section 6.3 — Majority Rule
          The Committee shall act by a majority of its members in office. The
Committee may act either by vote at a meeting or by a memorandum or other
written instrument signed by a majority of the Committee.
Section 6.4 — Compensation; Professional Assistance; Good Faith Actions
          Members of the Committee shall receive such compensation for their
services as members as may be determined by the Board. All expenses and
liabilities incurred by members of the Committee in connection with the
administration of the Plan shall be borne by the Company. The Committee may
employ attorneys, consultants, accountants, appraisers, brokers or other
persons. The Committee, the Company and its Officers and Directors shall be
entitled to rely upon the advice, opinions or valuations of any such persons.
All actions taken and all interpretations and determinations made by the
Committee in good faith shall be final and binding upon all Optionees, the
Company and all other interested persons. No member of the Committee shall be
personally liable for any action, determination or interpretation made in good
faith with respect to the Plan or the Options, and all members of the Committee
shall be fully protected by the Company in respect to any such action,
determination or interpretation.
ARTICLE VII
OTHER PROVISIONS
Section 7.1 — Options Not Transferable
          Except as set forth in Section 5.1 hereof, no Option or interest or
right therein or part thereof shall be liable for the debts, contracts or
engagements of the Optionee or his successors in interest or shall be subject to
disposition by transfer, alienation, anticipation, pledge, encumbrance,
assignment or any other means whether such disposition be voluntary or
involuntary or by operation of law by judgment, levy, attachment, garnishment or
any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect; provided,
however, that nothing in this Section 7.1 shall prevent transfers by will or by
the applicable laws of descent and distribution.
Section 7.2 — Amendment, Suspension or Termination of the Plan
          The Plan may be wholly or partially amended or otherwise modified,
suspended or terminated at any time or from time to time by the Committee;
provided, however, that no amendment or modification which requires shareholder
approval under Rule 16b-3, if any, shall be effective in the absence of such
approval. Neither the amendment, suspension nor termination of the Plan shall,
without the consent of the holder of the Option, impair any rights or
obligations under any Option theretofore granted. No Option may be granted
during any period of

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suspension nor after termination of the Plan. The Plan shall terminate and no
Option be granted under this Plan after December 31, 2017.
Section 7.3 — Approval of Plan by Shareholder(s)
          This Plan will be submitted for the approval of the Company’s
shareholder(s) within 12 months after the date of the Board’s initial adoption
of the Plan. No Options shall be granted prior to such shareholder approval. The
Company shall take such actions with respect to the Plan as may be necessary to
satisfy the requirements of Rule 16b-3(b).
Section 7.4 — Effect of Plan Upon Other Option and Compensation Plans
          The adoption of this Plan shall not affect any other compensation or
incentive plans in effect for the Company, any Parent Corporation or any
Subsidiary. Nothing in this Plan shall be construed to limit the right of the
Company, any Parent Corporation or any Subsidiary to (a) establish any other
forms of incentives or compensation for employees and Directors of the Company,
any Parent Corporation or any Subsidiary or (b) grant or assume options
otherwise than under this Plan in connection with any proper corporate purpose,
including, but not by way of limitation, the grant or assumption of options in
connection with the acquisition by purchase, lease, merger, consolidation or
otherwise, of the business, stock or assets of any corporation, firm or
association.
Section 7.5 — Titles
          Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of the Plan.
Section 7.6 — Conformity to Securities Laws and Section 409A(d) of the Code
          The Plan is intended to conform to the extent necessary with all
provisions of the Securities Act and the Exchange Act and any and all
regulations and rules promulgated by the Securities and Exchange Commission
thereunder, including without limitation Rule 16b-3, as well as of Section
409A(d) of the Code. Notwithstanding anything herein to the contrary, the Plan
shall be administered, and Options shall be granted and may be exercised, only
in such a manner as to conform to such laws, rules and regulations. To the
extent permitted by applicable law, the Plan and Options granted hereunder shall
be deemed amended to the extent necessary to conform to such laws, rules and
regulations.

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