EXHIBIT 10.3

2014 PERFORMANCE SHARE AGREEMENT

PFSWEB, INC. 2005 EMPLOYEE STOCK AND INCENTIVE PLAN

THIS PERFORMANCE SHARE AGREEMENT (“Agreement”) is made and entered into as of
the 31st day of March, 2014 (the “Grant Date”) by and between
                    (the “Employee”) and PFSweb, Inc., a Delaware corporation
(the “Company”).

WHEREAS, the Company sponsors and maintains the PFSweb, Inc., 2005 Employee
Stock and Incentive Plan, as the same may be amended from time to time (the
“Plan;” terms defined in the Plan having the same meaning when used herein,
except as otherwise defined herein); and

WHEREAS, the Board and Article 4 of the Plan have vested in the Committee the
right to determine the type(s) and amount(s) of Award(s) to be granted to any
employee and the terms and conditions thereof; and

WHEREAS, Article 9 of the Plan provides for the grant to an employee of
Performance Shares subject to restrictions that include the achievement of
Company performance goals; and

WHEREAS, the Committee has decided to make a grant of Performance Shares to the
Employee with respect to the Company’s performance for its fiscal year beginning
on January 1, 2014 and ending on December 31, 2014 on the terms and conditions
hereinafter set forth; and

WHEREAS, the Employee desires to accept the Committee’s grant of such
Performance Shares on the terms and conditions hereinafter set forth;

NOW, THEREFORE, intending to be legally bound, and for good and valuable
consideration, the sufficiency of which is hereby acknowledged, the Company and
the Employee hereby agree as follows:

1. Definitions. The following terms (not otherwise defined herein), when used in
this Agreement, shall have the following meanings, unless the context clearly
requires otherwise (such definitions to be equally applicable to both the
singular and plural of the defined terms).

“Adjusted EBITDA” shall mean the amount reported by the Company as its “Adjusted
EBITDA” for Fiscal Year 2014 in the Company’s press release announcing its
financial results for Fiscal Year 2014, but adjusted for, and without giving
effect to, (i) the grant, issuance or approval of any Performance Awards for
Fiscal Year 2014 and (ii) without duplication, such other items as may be
identified or otherwise designated as adjustments for purposes of determining
“Adjusted EBITDA” in an Approved Budget.

“Approved Budget” shall mean, for any Fiscal Year, the budget approved by the
Board as the “Approved Budget” for such Fiscal Year.

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“Base Bonus” shall mean the Performance Shares payable to the Employee in
respect of Fiscal Year 2014 upon the achievement of the Base Bonus Target as set
forth in the individual Award Certificate issued by the Committee to the
Employee.

“Base Bonus Target” shall mean Adjusted EBITDA for Fiscal Year 2014 equaling or
exceeding the amounts so designated as set forth in the individual Award
Certificate issued by the Committee to the Employee.

“Employment Performance Based Target” shall mean, for any Fiscal Year, the
achievement of such performance based target as shall be determined by the
Committee, or, in the absence of such determination, Adjusted EBITDA for such
Fiscal Year equals or exceeds Adjusted EBITDA as set forth in the Approved
Budget for such Fiscal Year.

“ERISA” shall mean the Employee Retirement Income Security Act of 1986, as
amended.

“Fiscal Year” shall mean the 12-consecutive-month period beginning on January 1
and ending on December 31, so that, by way of example, Fiscal Year 2014 shall
mean the 12-consecutive-month period beginning on January 1, 2014 and ending on
December 31, 2014.

“Fiscal Year Date” shall mean December 31, 2014.

“Stretch Bonus” shall mean the Performance Shares payable to the Employee in
respect of Fiscal Year 2014 upon the achievement of the Stretch Bonus Target as
set forth in the individual Award Certificate issued by the Committee to the
Employee.

“Stretch Bonus Target” shall mean Adjusted EBITDA for Fiscal Year 2014 equaling
or exceeding the amounts so designated as set forth in the individual Award
Certificate issued by the Committee to the Employee.

“Target Bonus” shall mean the Performance Shares payable to the Employee upon
the achievement of the Target Bonus Target as set forth in the individual Award
Certificate issued by the Committee to the Employee.

“Target Bonus Target” shall mean Adjusted EBITDA for Fiscal Year 2014 equaling
or exceeding the amounts so designated as set forth in the individual Award
Certificate issued by the Committee to the Employee.

2. Performance Shares. The number of Performance Shares payable to the Employee
hereunder shall be determined as follows:

(a) Base Bonus. If the Base Bonus Target, but neither the Target Bonus Target
nor the Stretch Bonus Target, is achieved, the number of Performance Shares
payable to the Employee hereunder shall be the Base Bonus. If the Base Bonus
Target is not achieved, the Employee shall not be entitled to payment of any
Performance Shares under this Agreement.

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(b) Target Bonus. If the Target Bonus Target, but not the Stretch Bonus Target,
is achieved, the number of Performance Shares payable to the Employee hereunder
shall be the Target Bonus.

(c) Stretch Bonus. If the Stretch Bonus Target is achieved, the number of
Performance Shares payable to the Employee hereunder shall be the Stretch Bonus.

3. Determination of Target Achievement. The Committee, in its sole and absolute
discretion, shall determine when, whether, and if so, the extent to which, the
Base Bonus Target, Target Bonus Target or Stretch Bonus Target, as applicable,
has been achieved. Such determination, which shall be final and binding on all
parties, shall be certified to the Board in writing as soon as administratively
practicable in Fiscal Year 2015.

4. Vesting of Performance Shares; Forfeiture. Each Performance Share represents
an unfunded, unsecured promise by the Company to provide the Employee with the
Performance Shares set forth herein, subject to the satisfaction of the vesting
and other terms and conditions set forth herein. The Employee shall have no
vested right in the Performance Shares unless the Committee certifies to the
Board that the Base Bonus Target, Target Bonus Target or Stretch Bonus Target,
as applicable, has been achieved. Such achievement, as evidenced by such
certification by the Committee, shall be construed by all parties as a condition
related to the purpose of the compensation for purposes of Section 409A of the
Code. Provided that such certification is made, the Performance Shares shall
vest and be issued and payable as follows:

4.1 Employment Vesting. The number of Performance Shares payable hereunder shall
vest in four (4) equal annual installments (each, an “Employment Vesting
Installment”), commencing on January 1, 2015 and on each January 1 thereafter,
so that the Employment Vesting Installment for Fiscal Year 2014 shall vest on
January 1, 2015, the Employment Vesting Installment for Fiscal Year 2015 shall
vest on January 1, 2016, the Employment Vesting Installment for Fiscal Year 2016
shall vest on January 1, 2017, and the Employment Vesting Installment for Fiscal
Year 2017 shall vest on January 1, 2018; provided that, for each such Employment
Vesting Installment, as applicable, (i) the Employee is employed by the Company
as of the last day of the Fiscal Year, as applicable, for the corresponding
Employment Vesting Installment for such Fiscal Year and (ii) the Employment
Performance Based Target has been achieved for such Fiscal Year.

4.2 The Committee, in its sole and absolute discretion, shall determine when,
whether, and if so, the extent to which, the vesting conditions set forth in
Sections 4.1 have been satisfied. Such determination, which shall be final and
binding on all parties, shall be certified to the Board in writing as soon as
administratively practicable following the last day of each Fiscal Year.

4.3 If, at any time, the Employee voluntarily leaves employment with the Company
other than for Good Reason or is terminated by the Company for Cause, the
Employee shall forfeit the entirety of the then unvested Performance Shares
otherwise payable hereunder.

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5. Payment of Performance Shares. Payment of the Performance Shares shall be
made by book-entry or, if the Employee so directs the Company not later than 10
days prior to the issuance thereof, by the issuance of one or more certificates,
less all applicable withholdings, within 120 days after the last day of the
applicable Fiscal Year. The Employee acknowledges and agrees that the Company
has the right to deduct from payments of any kind otherwise due to the Employee
any federal, state or local taxes of any kind required by law to be withheld
with respect to the grant or vesting, as applicable, of the Performance Shares.

6. No Rights as Shareholder. The Employee shall have no rights to any of the
Performance Shares issuable hereunder unless and until all vesting and other
conditions set forth herein have been fully satisfied, as determined by the
Committee in its good faith judgment. Until the Performance Shares are vested,
neither the Performance Shares nor any of the rights relating thereto may be
assigned, alienated, pledged, attached, sold or otherwise transferred or
encumbered by the Employee. Any attempt to assign, alienate, pledge, attach,
sell or otherwise transfer or encumber the Performance Shares or any of the
rights related thereto prior to the vesting of such Performance Shares shall be
wholly ineffective and shall not be recognized by the Company for any purpose,
except that any Performance Shares which, pursuant to the terms hereof, vest
following the death or Disability of the Employee may be paid to the Employee’s
heirs, estate, agents, beneficiaries or assigns.

7. Provisions of Plan. Except as provided herein, the provisions of this
Agreement shall be subject to the provisions of the Plan, which are hereby
incorporated herein by reference and made part hereof. The Employee acknowledges
and agrees that he or she has been provided with and has read the Plan and
understands the provisions thereof. In the event of any conflict between the
terms of the Plan and the terms of this Agreement, the terms of the Plan shall
take precedence, other than for such provisions of the Plan which, by their
terms, are subject to the provisions of an Award Certificate.

8. No ERISA Plan. Neither this Agreement nor the award of the Performance-Shares
hereunder shall be construed by any party as being subject to any provisions of
ERISA, and shall not be so subject. Without in any way limiting the generality
of the foregoing, the Performance Shares awarded hereunder shall constitute a
mere unfunded promise to pay by the Company and a bonus program within the
meaning of Department of Labor Regulation Section 2510.3-2(c) promulgated under
ERISA.

9. Notices. Any notice required to be delivered to the Company under this
Agreement shall be in writing and addressed to the Secretary of the Company at
the Company’s principal corporate offices. Any notice required to be delivered
to the Employee under this Agreement shall be in writing and addressed to the
Employee at the Employee’s address as shown in the records of the Company.
Either party may designate another address in writing (or by such other method
approved by the Company) from time to time.

10. Change in Control. Notwithstanding anything contained herein, all unvested
Performance Shares shall accelerate and immediately vest upon the occurrence of
a Change in Control, such acceleration and vesting to be deemed to have occurred
at such time as may be necessary or required in order for the Employee to be
deemed the lawful owner and holder of record as of the effective date and time
of the Change in Control. For purposes of this paragraph, the term “unvested
Performance Shares” shall mean, (i) as of any date of determination following
the last day of Fiscal Year 2014, the maximum number of Performance Shares then

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payable hereunder or subject to vesting hereunder, as determined under Section 2
above, assuming that all conditions to issuance and vesting hereunder have been
satisfied and (ii) as of any date of determination prior to or as of the last
day of Fiscal Year 2014, the maximum number of Performance Shares then payable
hereunder or subject to vesting hereunder, as determined under Section 2 above,
assuming that the minimum Target Bonus Target has been achieved and all
conditions to issuance and vesting hereunder have been satisfied.

11. Parachute Payments and Parachute Awards. If the Employee is a “disqualified
individual,” as defined in paragraph (c) of Code Section 280G, then,
notwithstanding any other provision of this Agreement or of any other agreement,
contract, or understanding heretofore or hereafter entered into by the Employee
and the Company (an “Other Agreement”), except an agreement, contract, or
understanding that expressly addresses Code Section 280G or Code Section 4999 (a
“280G Agreement”), and notwithstanding any formal or informal plan or other
arrangement for the direct or indirect provision of compensation to the Employee
(or an employee group of which the Employee is a member), whether or not such
compensation is deferred, is in cash, or is in the form of a benefit to or for
the Employee (a “Benefit Arrangement”), any right the Employee has in respect of
payment under this Agreement, any Other Agreement or any Benefit Arrangement
will be reduced or eliminated: (a) to the extent that such right to payment,
taking into account all other rights, payments, or benefits to or for the
Employee under all Other Agreements and all Benefit Arrangements, would cause
the payment to Employee under this Agreement to be considered a “parachute
payment” within the meaning of paragraph (b)(2) of Code Section 280G as then in
effect (a “Parachute Payment”); and (b) if, as a result of receiving such
Parachute Payment, the aggregate after-tax amounts the Employee is entitled to
receive from the Company under all Other Agreements and all Benefit Arrangements
would be less than the maximum after-tax amount that could be received by the
Employee without causing any such payment or benefit to be considered a
Parachute Payment. The Company will accomplish such reduction in a manner to be
mutually agreed with, and most beneficial for, the Employee. The foregoing shall
not be interpreted so as to restrict, reduce, amend or modify any of the
existing terms and provisions of any 280G Agreement to which the Employee and
the Company may be a party, and any payment hereunder shall be entitled to the
benefits thereof.

12. Severability. If any provision of this Agreement is determined by a court of
competent jurisdiction to be unenforceable, such determination shall not affect
the remaining provisions of this Agreement, which shall be enforced to the
maximum extent permitted under applicable law.

13. Modification. Subject to the provisions of the Plan, this Agreement may be
modified only in writing pursuant to an agreement by and between the Company and
the Employee.

14. Headings. The headings contained herein are for convenience of reference
only and shall not be construed by any party as having any substantive
significance.

15. Clawback. Notwithstanding any other provisions in this Agreement, this Award
is subject to recovery under any law, government regulation or stock exchange
listing requirement, and is subject to such deductions and clawback as may be
required to be made pursuant to such law, government regulation or stock
exchange listing requirement (or any policy adopted by the Company at any time
pursuant to any such law, government regulation or stock exchange listing
requirement).

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16. Section 409A of the Code. It is intended that all payments under this
Agreement qualify as short-term deferrals exempt from the requirements of
Section 409A of the Code. In the event that any payment hereunder does not
qualify for treatment as an exempt short-term deferral, it is intended that such
payment shall be paid in a manner that satisfies the requirements of
Section 409A of the Code. This Agreement shall be interpreted and construed
accordingly.

17. Execution and Counterparts. This Agreement shall be deemed executed and
delivered by the parties upon the execution of the individual Award Certificate
issued to the Employee in connection herewith, which Award Certificate shall be
executed by an authorized officer of the Company and may be executed in any
number of counterparts, each of which shall be deemed an original, and shall be
effective when a counterpart thereof has been received from both parties.

*****

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2014 PERFORMANCE SHARES AWARD CERTIFICATE

ISSUED UNDER THE

PFSWEB, INC. 2005 EMPLOYEE STOCK AND INCENTIVE PLAN

1. Employee Name:                     .

2. Base Bonus Target: Adjusted EBITDA for Fiscal Year 2014 equaling or exceeding
$            but not exceeding $            .

3. Target Bonus Target: Adjusted EBITDA for Fiscal Year 2014 equaling or
exceeding $            but not exceeding $            .

4. Stretch Bonus Target: Adjusted EBITDA for Fiscal Year 2014 equaling or
exceeding $            .

5. Base Bonus:             Shares, plus an additional number of Shares equal to
1.00% of             for each full $            increment by which the Base
Bonus Target exceeds $            but does not exceed $            .

6. Target Bonus:             Shares, plus an additional number of Shares equal
to 1.00% of             for each full $            increment by which the Target
Bonus Target exceeds $            but does not exceed $            .

7. Stretch Bonus:             Shares.

This Performance Shares Award Certificate is issued, dated and effective as of
the date set forth below.

Date: March 31, 2014

 

Employee:     PFSweb, Inc.

 

    By:  

 

Signature      

Name:

Title:

 

      Name