ex10-3.htm


    
      

    

    Exhibit 10.3

     

    
      EMPLOYMENT
AGREEMENT

      


      


      
        	
                Parties:

              	
                innotrac
      Corporation,

              	 
      
	 
      	
                a
      Georgia corporation (“Employer”)

              	 
      
	 
      	
                6655
      Sugarloaf Parkway

              	 
      
	 
      	
                Duluth,
      Georgia, 30097

              	 
      
	 
      	 
      	 
      
	 
      	
                Scott
      D. Dorfman (“Executive”)

              	 
      
	 
      	
                8241
      Nesbit Ferry RoadAtlanta, Georgia 30350

              	 
      
	 
      	 
      	 
      
	
                Date: October
      5, 2008

              	 
      	 
      


      

      


      Background:                          Employer
is a third party provider of order processing, fulfillment and/or customer care
services to e-commerce and other direct-to-consumer businesses (the “Business”).  Employer
has entered into an agreement (the “Merger Agreement”) pursuant
to which GSI Commerce, Inc., a Delaware corporation (“Parent”), upon the terms and
subject to the conditions of the Merger Agreement, is expected to acquire all of
the outstanding shares of capital stock of Employer, which currently employs
Executive.  Subject to the consummation of the transactions
contemplated by the Merger Agreement (the “Closing”), Employer desires
to continue to employ Executive, and Executive desires to continue such
employment, on the terms and conditions stated below (the “Agreement”).

      


      INTENDING TO BE LEGALLY BOUND, and in
consideration of the mutual agreements stated below, Executive and Employer
agree as follows:

      


      1.     Employment and
Term.   Employer hereby employs Executive, and Executive
accepts such employment, subject to all of the terms and conditions of this
Agreement, for a term beginning on the Closing and ending on December 31, 2011,
unless sooner terminated in accordance with other provisions hereof (the “Term”). Subject to the terms
and conditions of this Agreement, Executive’s employment with Employer is at
will.  Notwithstanding any provisions of this Agreement to the
contrary, Employer may not terminate Executive without Cause (as defined in
Section 4.3.1 below), and Executive may not terminate or resign other than for
Executive Cause (as defined in Section 4.3.2), death or disability (as provided
in Section 4.1 and 4.2), at any time before the first anniversary of the
Closing.

      


      2.     Position and
Duties.

       

      2.1.   Title and
Responsibilities.  During the Term, Executive will serve as
Executive in Transition of Employer.  In that capacity, Executive will
have supervision over, and responsibility for, Employer’s account management
function, consistent with the account management responsibilities Executive had
in the one year period prior to the Closing and/or provide certain consulting
services to Parent’s Chief Executive Officer or Chief Financial Officer
regarding Employer’s account management function as may be reasonably requested
by such individuals.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      2.2.   Other Responsibilities and
Loyalty. Executive will also have such other responsibilities and duties
consistent with his position or positions with Employer, as may from time to
time be reasonably prescribed by Employer’s Board of Directors or Parent’s Chief
Executive Officer or Board of Directors and as are generally consistent with the
responsibilities Executive had in the one year period prior to the
Closing.  Executive agrees to devote his full business time, attention
and energies to the business and interests of the Employer during the Term and
Executive will not accept any outside position without the prior written consent
of the CEO or the Board.

      


      2.3.   Reporting.  Executive
will report to, and be subject to the direction of, the Chief Executive Officer
or Chief Financial Officer of Employer or any other senior officer of the Parent
as may be designated by the Board of Directors of the Parent.

      


      2.4.   Policies and
Practices.  The employment relationship between Employer and
the Executive shall be governed by the policies and practices established by
Employer and Employer’s Board of Directors as are applicable to senior
management employees generally.  Executive acknowledges that he has
received and carefully read and understood the Employer’s Code of Business
Conduct and other governing policies, which will govern the terms and conditions
of his employment with Employer, along with this Agreement.  In the
event that the terms of this Agreement differ from or are in conflict with the
Employer’s policies or practices or the Employer’s Code of Business Conduct,
this Agreement will control.

      


      2.5.   Location.  Executive
will perform the services Executive is required to perform pursuant to this
Agreement at the Employer’s office, located in Duluth, Georgia or such other
location in the greater Atlanta, Georgia area to which Employer may move its
principal location (the “Office”); provided, however, that (i) Executive may
from time to time perform services from his homes located in Georgia and
Alabama, and (ii) Employer may from time to time require Executive to travel to
other locations in connection with the Employer’s business, consistent with
Executive’s travel prior to the Closing.  Notwithstanding the
foregoing, Employer may require Executive to work from
home.  Executive may also work remotely from locations outside the
Office in a manner consistent with Executive’s past practices in the one year
period prior to the Closing.

      


      3.     Compensation, Benefits and
Expenses.

      


      3.1.   Base
Salary.   Employer will pay to Executive an annual base
salary (“Base Salary”)
of Four Hundred and Twenty-Five Thousand Dollars
($425,000).  Executive’s Base Salary will be payable in bi-weekly
installments of $16,346.15 each gross, in accordance with Employer’s normal
payroll practices as are applicable to employees generally, subject to payroll
deductions and required withholdings.

      


      3.2.   Annual and Long-Term
Incentives.  Except as specifically provided in Section 3.6,
Executive will not be eligible to participate in any annual or long-term bonus,
equity or other incentive plan of Employer or Parent now existing or established
hereafter.

       

      
        
          
          

        

        
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      3.3.   Benefits.

       

      (a)           Subject
to Section 3.2, Executive will be eligible to participate in any profit sharing,
savings, health insurance, life insurance, group insurance, disability
insurance, and other benefit plans or programs of Employer now existing, or
established hereafter, and generally offered to similarly situated employees of
Employer, subject to the terms and provisions thereof.  Executive
acknowledges that Executive’s participation in the employee benefit plans or
programs of Employer are subject to the terms and conditions of such plan or
programs and that Employer may change its plans or
programs.  Notwithstanding the foregoing, Executive will not be
entitled to any severance benefits in connection with the termination of his
employment, except to the extent set forth in this Agreement.

      


      (b)           Subject
to the terms and conditions of the applicable insurance policy and the
applicable life insurance companies, in the event that Employer owns any
insurance policies insuring the life of Executive, Executive shall be and is
hereby granted, on the date of Closing, an option to have the policies assigned
to him, in which event Executive shall pay all premiums that first come due
under such policies of insurance after the date of Closing and Employer shall
sign all paperwork reasonably required to transfer ownership of the policies to
Executive and allow changes of beneficiaries to persons or entities designated
by Executive.

      


      3.4.   Personal
Time-off.   Executive will be eligible for paid personal
time of 25 days per year, in accordance with Employer’s paid time off
policy.

       

      3.5.   Expenses.  Employer
will reimburse Executive for all actual, ordinary, necessary and reasonable
expenses incurred by Executive in the course of his performance of services
hereunder.  Executive will properly account for all such
expenses.  Such reimbursement payments shall be made promptly, but in
no event later than December 31 of the calendar year following the year in which
such expense was incurred. Employer shall upon the Closing enter with SDD
Holdings, LLC an aircraft charter agreement in the form attached hereto as
Exhibit B, which Executive and Employer shall each keep in force and effect
during full term of Executive employment.

      


      3.6.   Equity
Award.

      


      (a)    Effective
as of the Closing, Executive and Parent shall enter into a Restricted Stock
Award Agreement in the form attached hereto as Exhibit C whereby Parent will
grant to Executive under Parent’s 2005 Equity Incentive Plan (the “Equity Plan”) a restricted
stock award (the “RSA”)
of a number of shares of common stock of Parent equal to the quotient of $2.5
million divided by the average of the closing price of Parent’s common stock for
the five business day period immediately prior to the date of Closing (the “Fair
Market Value”) of the Parent’s common stock on the date of Closing (the “Restricted
Shares”).  Except as otherwise provided in this Section 3.6,
all of the Restricted Shares will vest on December 31, 2011 and
Executive will not be required to pay any consideration for the vested
Restricted Shares other than the services rendered by Executive to Employer up
to the date of vesting.  Upon any vesting, Executive will remit to
Employer an amount of cash necessary to satisfy all payroll deductions and
required income tax withholdings as are required by law to be paid by Executive,
if any. Once such taxes are paid, Employer shall deliver or cause Parent or any
transfer or escrow agent in actual or constructive possession of the Restricted
Shares to deliver certificates for the Restricted Shares in accordance with the
Equity Plan.

       

      
        
          
          

        

        
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      (b)    If, prior
to December 31, 2011, (i) Executive is terminated by Employer for any reason
other than Cause (as defined in Section 4.3.1), or (ii) Executive’s employment
is terminated pursuant to Section 4.1 (death) or Section 4.2 (disability) or
Section 4.3.2 (Employer Breach), all Restricted Shares will vest immediately on
such termination, provided that such termination constitutes a “separation from
service” for purposes of Section 409A of the Internal Revenue Code of 1986, as
amended, if applicable.  Notwithstanding the foregoing, the Executive
will pay to Employer an amount equal to the Fair Market Value of the Restricted
Shares on the date of vesting less any applicable federal, state, local and
foreign taxes paid by Executive if after the Restricted Shares vest in
accordance with the immediately preceding sentence the Executive commits a
material breach of his obligations set forth in Sections 7 or 8
hereto.  If, prior to December 31, 2011, Employer terminates
Executive’s employment for Cause or Executive resigns or terminates his
employment for reasons other than Employer Breach, death or disability, all
Restricted Shares will be forfeited to Parent without the payment of any
consideration by Parent or Employer.  The Restricted Shares will
otherwise be governed by the terms of the Equity Plan and RSA
agreement.

      


      (c)    Executive
acknowledges and agrees that Section 83 of the Internal Review Code of 1986, as
amended (the “Code”)
taxes as ordinary income to him the fair market value of the Restricted Shares
as of the date any restrictions on the shares lapse (that is, as of the date on
which part or all of the shares vest), unless Executive timely files an election
under Section 83(b).  Executive will be solely responsible for timely
making an election under Section 83(b) in the event he chooses to do
so.

      


      (d)    Employer
warrants to Executive that (i) Executive is qualified in all respects to receive
the RSA and all Restricted Shares, subject to the vesting requirements as set
forth in this Agreement and the Equity Plan; (ii) the issuance of the RSA and
Restricted Shares to Executive has received all requisite approvals contemplated
by the documents governing the Equity Plan and no further consents or approvals
are required; (iii) the issuance of the RSA and Restricted Shares to Executive
has been duly authorized and validly issued by Parent, and are fully paid and
nonassessable, and (iv) upon vesting, and subject to the vesting requirements
set forth in this Agreement and the Equity Plan, the Restricted Shares will be
free of all encumbrances and restrictions, including restrictions on
transfer.

       

      4.    Termination.

      


      4.1.   Termination by
Death.  If Executive dies, then this Agreement will terminate
immediately and automatically, and Executive’s rights to compensation and
benefits first earnable by Executive after the date of death  will
terminate as of the date of death; provided, however, Executive’s heirs,
personal representatives or estate will be entitled to receive any unpaid
portion of Executive’s Base Salary and accrued benefits earned up to the date of
termination and any benefits which are to be continued or paid after the date of
termination in accordance with the terms of the corresponding benefit plans and
programs in which Executive participates (the “Accrued Obligations”) and
also the Restricted Shares.  In the event of a termination of
Executive’s employment pursuant to this paragraph, any right that Executive’s
estate may have to compensation and benefits under this Agreement will
terminate, except that Executive’s estate will be entitled to receive payment of
the Accrued Obligations.

       

      
        
          
          

        

        
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      4.2.   Termination by
Disability.   If, as a result of sickness or injury (as
defined in Employer’s group long-term disability insurance policy then in
force), Executive is unable to perform the essential duties of his employment on
a full-time basis for more than thirty (30) days after the Onset of Disability
or for periods aggregating more than thirty (30) days during any twelve (12)
month period, then Employer may, upon ten (10) days written notice to Executive,
terminate Executive's employment.  In the event of a termination of
Executive’s employment pursuant to this Section 4.2, Executive’s right to
compensation and benefits under this Agreement shall terminate, except that
Executive shall be entitled to receive payment of the Accrued Obligations and
the Restricted Shares.  “Onset of Disability” means
the first day on which Executive is unable to perform the essential duties of
his employment on a full-time basis by reason of such injury or
sickness.

      


      4.3.   Termination for
Cause.

       

      4.3.1         Employer
may, at any time, upon written notice to Executive, terminate Executive’s
employment, and Executive’s rights to compensation and benefits hereunder, for
Cause (as defined in this Section 4.3.1), except that Executive will be entitled
to receive payment of the Accrued Obligations.  “Cause” will exist if Parent’s
board of directors in good faith determines that (i) before the date of
termination Executive is convicted of, or enters a plea of guilty or nolo
contendere to, a crime constituting a felony or any criminal offense involving
fraud, dishonesty or moral turpitude under the laws of the United States or any
state thereof other than an automobile offense, or (ii) Executive is grossly
negligent or engaged in willful misconduct in the performance of his duties
under this Agreement, or (iii) Executive breaches, in a material respect, this
Agreement or any written material agreement between the Executive and Employer
or violates, in a material respect, the Employer’s Code of Business Conduct or
any of Employer’s material policy statements as are applicable to all employees
generally; provided, however, that in the case of termination under clause (ii)
or (iii) of the immediately preceding sentence, Cause shall only exist after (A)
Employer delivers written notice to Executive of its intention to terminate for
Cause within thirty (30) days after Employer has actual knowledge of the facts
and circumstances upon which Employer seeks to rely as a basis for its right to
terminate for Cause, (B) such notice sets forth in reasonable detail such facts
and circumstances and (C) Executive has failed to cease or otherwise correct (if
Parent’s board of directors determines in good faith that such events are
reasonably capable of being corrected) any of the events listed in clauses (ii)
and (iii), if such events are reasonably capable of being corrected, within
thirty (30) days following delivery of Employer’s written notice of its
intention to terminate for Cause.

       

      
        
          
          

        

        
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      4.3.2         Executive
may, at any time, upon written notice to Employer, terminate Executive’s
employment, and Executive’s rights to compensation and benefits hereunder, for
Employer Breach (as defined in this Section 4.3.2), and Executive will be
entitled to receive payment of the Accrued Obligations and the Restricted
Shares.  “Employer
Breach” will exist if there occurs a material failure by Employer to
comply with the provisions of this Agreement; provided, however, the foregoing
events of Employer Breach will exist only if Executive provides to Employer’s
Chief Executive Officer notice of the existence of the circumstances
constituting Employer Breach within ninety (90) days of the occurrence of
Employer Breach and Employer does not remedy such event constituting Employer
Breach within thirty (30) days of the date of its receipt of such
notice.

      


      4.4.   Termination Without
Cause.  At any time after the first anniversary of the Closing,
Employer may, upon ten (10) days prior written notice to Executive, terminate
Executive’s employment, and Executive’s rights to compensation and benefits
hereunder, for any reason or no reason, in which case Executive will be entitled
to payment of the Accrued Obligations and the Restricted Shares.

      


      4.5.   Resignation.  Executive
may, upon thirty (30) days prior written notice to Employer, resign or terminate
Executive’s employment with Employer, for any reason Executive deems
appropriate, in which case Executive will be entitled to receive payment of the
Accrued Obligations.

      


      4.6.   Release.  Notwithstanding
the foregoing, Executive will not receive any of the payments set forth under
Section 4, unless upon Executive’s termination of employment Executive furnishes
Employer with an effective waiver and release of claims (the “Release”) in the
form attached hereto as Exhibit “A” (or such other form of Release as may
be required by the Employer) within the time period set forth therein, but in no
event later than forty-five (45) days following termination of Executive’s
employment.

      


      4.7.   Application of Section
409A. Fringe
benefits payable under the Agreement will be subject to the distribution
requirements of Section 409A(a)(2)(A) of the Code, including, without
limitation, the requirement of Section 409A(a)(2)(B)(i) of the Code that payment
to the Executive be delayed until 6 months after separation from service if the
Executive is a “specified employee” within the meaning of the aforesaid section
of the Code at the time of such separation from service.

       

      
        
          
          

        

        
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      4.8.   Parachute
Payments.  Anything in this Agreement to the contrary
notwithstanding, if any payment or benefit Executive would receive from Employer
pursuant to this Agreement or otherwise (a “Payment”) would (i) constitute a
“parachute payment” within the meaning of Section 280G of the Code, and (ii) be
subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such
Payment shall be equal to the Reduced Amount.  The “Reduced Amount”
shall be either (x) the largest portion of the Payment that would result in no
portion of the Payment being subject to the Excise Tax or (y) the largest
portion of the Payment, up to and including the total Payment, whichever amount,
after taking into account all applicable federal, state and local employment
taxes, income taxes, and the Excise Tax (all computed at the highest applicable
marginal rate), results in Executive’s receipt, on an after-tax basis, of the
greater amount of the Payment notwithstanding that all or some portion of the
Payment may be subject to the Excise Tax.  If a reduction in payments
or benefits constituting “parachute payments” is necessary so that the Payment
equals the Reduced Amount, reduction shall occur in the following order unless
Executive elects in writing a different order: reduction of cash payments;
cancellation of accelerated vesting of the RSA; reduction of employee
benefits.  If acceleration of vesting of the RSA compensation is to be
reduced, such acceleration of vesting shall be cancelled in the reverse order of
the date of grant of the RSA.  Employer will appoint a nationally
recognized and independent accounting firm to make the determinations required
hereunder.  Employer shall bear all expenses with respect to the
determinations by such accounting firm required to be made hereunder. The
accounting firm engaged to make the determinations hereunder will provide its
calculations, together with detailed supporting documentation, to Employer and
Executive within fifteen (15) calendar days after the date on which Executive’s
right to a Payment is triggered (if requested at that time by Employer or
Executive) or such other time as requested by Employer or
Executive.  If the accounting firm determines that no Excise Tax is
payable with respect to a Payment, either before or after the application of the
Reduced Amount, it will furnish Employer and Executive with an opinion
reasonably acceptable to the Executive that no Excise Tax will be imposed with
respect to such Payment.  Employer will be entitled to rely upon the
accounting firm’s determinations, which will be final and binding on all
persons.

      


      5.     Procedure upon
Termination.  Executive must promptly return to Employer all
documents (including copies) and other materials and property belonging to
Employer or Parent or any  of their affiliates, or pertaining to their
businesses, including without limitation partner, customer and prospect lists,
contracts, files, manuals, letters, reports and records in his possession or
control, no matter from whom or in what manner acquired. In the event of a
dispute between Executive and Employer, Executive and Employer each agree to
exchange information and documents reasonably related to the
dispute.

      


      6.     
Inventions.   Executive
will reasonably communicate in a reasonable timeframe to Employer, in writing,
all trade secrets, inventions, mask works, ideas, processes, formulas, source
and object codes, data, programs, other works of authorship, know-how,
improvements, discoveries, developments, designs and techniques (collectively
referred to as “Inventions”), whether or not
patentable or registrable under copyright or similar statutes, which are first
made, conceived and reduced to practice by Executive, whether alone or jointly
with others, at any time   during the period commencing after the
Closing  and ending on the date of termination of Executive’s
employment, and which relate to the business or operations of Employer or which
relate to methods, designs, products or systems sold, leased, licensed or under
development by Employer (such concepts, ideas and designs are referred to as
“Employer
Inventions”).  Executive acknowledges that Employer owns all
right, title and interest in and to any and all Employer Inventions (and all
Proprietary Rights with respect thereto) created either before or after Closing
and hereby assigns and agrees to assign in the future (when any such Inventions
or Proprietary Rights are first reduced to practice or first fixed in a tangible
medium, as applicable) to Employer (or to such third party as Employer may
direct) all of Executive’s right, title and interest in and to any and all
Employer Inventions (and all Proprietary Rights with respect
thereto).  Executive acknowledges that all original works of
authorship which are first made by Executive (solely or jointly with others),
within the scope of Executive’s employment and which are protectable by
copyright are “works made for hire,” pursuant to United States Copyright Act (17
U.S.C., Section 101).  Executive will, at Employer’s expense, sign all
documents and take such other actions as Employer may reasonably request to
confirm its ownership in Employer Inventions.  “Proprietary Rights” means all
trade secret, patent, copyright, mask work and other intellectual property
rights throughout the world.

       

      
        
          
          

        

        
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      7.     
Nondisclosure.  At
all times after the Closing and during Executive’s employment with Employer and
thereafter, except with the express prior written consent of an executive
officer of Employer other than Executive or in connection with the proper
performance of services under this Agreement, Executive will not, directly or
indirectly, communicate, disclose or divulge to any Person, or use for the
benefit of any Person, any Proprietary Information or any Third Party
Information.  “Proprietary Information”
means any and all confidential and/or proprietary knowledge, data or information
of Employer or Parent or any of their affiliates, no matter when or how
acquired.  By way of illustration, but not limitation, Proprietary
Information includes (i) Inventions; (ii) the terms and details of contracts and
arrangements with and proposals to any customers of Employer or its affiliates
(“Customers”) and any
prospective Customers or any entities for which Parent or its affiliates operate
e-commerce businesses or provide marketing services (“Partners”) and any
prospective Partners; (iii) personal, financial and other information obtained
from customers of Customers or Partners (“Consumers”); (iv) non-public
pricing information, vendor prices, buying and pricing strategies and
merchandise plans, including the terms of contracts and arrangements with
vendors; (v) promotional, marketing and advertising strategies and plans,
including the terms of contracts and arrangements relating to promotions,
marketing and advertising; (vi) non-public financial and statistical information
relating to Employer or Parent or any of their affiliates, or the Business
operated by Employer and its affiliates or the business and the e-commerce
businesses operated by Parent and its affiliates, including budgets, financial
and business forecasts, expansion plans and business strategies; and (vii)
information regarding the skills and compensation of other employees of Employer
and Parent and their  affiliates.  For purposes of this
Section 7, Proprietary Information will not include any information which is now
known by or available to the general public or generally in the industry, which
becomes known by or available to the general public or generally in the industry
other than as a result of a breach of this Agreement by Executive or which is
independently acquired by Executive.  “Person” means any individual,
sole proprietorship, joint venture, partnership, corporation, association,
cooperative, trust, estate, government body, administrative agency, regulatory
authority or other entity of any nature.  “Third Party Information”
means any and all confidential or proprietary data, knowledge and information
received from third parties, including Customers and Partners, prospective
Customers and Partners and Consumers, subject to a duty on the part of Employer
or Parent or any of their affiliates to maintain the confidentiality of such
data, knowledge or information and to use it only for
certain purposes.

      


      8.     
Non-Competition.   Executive
acknowledges that the Business of Employer and its affiliates and the business
of Parent and its affiliates are highly competitive, that he has Proprietary
Information of Employer and its affiliates and Third Party Information of their
Customers and Consumers and that as a result of Employer being acquired by
Parent, Executive will receive and be privy to Proprietary Information of Parent
and its affiliates and Third Party Information of their Partners and
Consumers.  Executive further acknowledges that Employer and Parent
and their affiliates are engaged in the provision of services to support the
e-commerce and direct-to-consumer businesses of their Customers and Partners and
that due to the nature of such businesses, the work performed by Executive for
Employer may not be bound by any geographical or territorial
limitations.  Accordingly, for one (1) year after the date of the
termination of Executive’s employment with Employer (the “Restricted Period”) for any
reason, except with Employer’s express prior written consent, Executive will
not, directly or indirectly, in any capacity, for the benefit of any
Person:

       

      
        
          
          

        

        
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      (a)    Communicate
with or solicit any Person who, as of or during the one (1) year prior to the
termination of Executive’s employment with Employer, was an employee,
consultant, agent or representative of Employer or Parent or any of their
affiliates, or who, during the Restricted Period, becomes an employee,
consultant, agent or representative of Employer or Parent or any of their
affiliates, (i) in any manner which interferes or is likely to interfere with
such Person’s relationship with Employer or Parent or any such affiliate, or
(ii) in an effort to obtain any such employee, as an employee, of any other
Person or (iii) in an effort to obtain any such consultant, agent or
representative as a consultant, agent or representative of any Person which
conducts a business competitive with all or any material part of the Business of
Employer or its affiliates in the United States or the business of the Parent
and its affiliates in the United States;

      


      (b)    Communicate
with or solicit any Person who, as of or during the one (1) year
prior  to the termination of Executive’s employment with Employer, was
a Partner, Customer, client or prospect of Employer or Parent or any of their
affiliates, or who, during the Restricted Period, becomes a Partner, Customer,
client or prospect of Employer or Parent or any of their affiliates, in any
manner which interferes or is likely  to interfere with such Person’s
relationship with Employer or Parent or any such affiliate, or in an effort to
obtain any such a Partner, Customer, client or prospect as a partner, customer,
client or prospect of any other Person which conducts a business competitive
with all or any material part of the Business of Employer in the United States,
or its affiliates or the business of Parent and its affiliates in the United
States; or

      


      (c)    Establish,
own, manage, operate or control, or participate in the establishment, ownership,
management, operation or control of, or be a director, officer, employee, agent
or representative of, or be a consultant to, any Person which conducts a
business competitive with all or any material part of the (i) Business of
Employer or its affiliates in the United States, or (ii) business of Parent or
its affiliates in the United States which is substantially similar to the
Business of the Employer, or which is not substantially similar to the Business
of the Employer but in which Executive was involved during his employment with
the Employer after the Closing Date.

       

      
        
          
          

        

        
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      9.     Consideration and
Enforcement of Covenants.   Executive expressly
acknowledges that the covenants contained in Sections 6, 7 and 8 of this
Agreement (“Covenants”)
are a material part of the consideration bargained for by Employer and, without
the agreement of Executive to be bound by the Covenants, Employer would not have
agreed to enter into this Agreement.  Executive acknowledges that any
breach by Executive of any of the Covenants may result in irreparable injury to
Employer for which money damages may not adequately compensate.  If
there is such a breach, Employer will be entitled, in addition to all other
rights and remedies which Employer may have at law or in equity, to apply to any
competent court in Georgia to have an injunction issued enjoining and
restraining Executive and all other Persons involved therein from continuing
such breach.  The existence of any claim or cause of action which
Executive or any such other Person may have against Employer will not constitute
a defense or bar to the enforcement of any of the Covenants.  If
Employer must resort to litigation to enforce any of the Covenants which has a
fixed term, then such term will be extended for a period of time equal to the
period during which a breach of such Covenant was occurring, beginning on the
date of a final court order (without further right of appeal) holding that such
a material breach occurred or, if later, the last day of the original fixed term
of such Covenant. If any portion of any Covenant or its application is construed
to be invalid, illegal or unenforceable, then the other portions and their
application will not be affected thereby and will be enforceable without regard
thereto.  If any of the Covenants is determined to be unenforceable
because of its scope, duration, geographical area or similar factor, then the
court making such determination will have the power to reduce or limit such
scope, duration, area or other factor, and such Covenant will then be
enforceable in its reduced or limited form.

      


      10.    Survival of
Obligations.  Notwithstanding anything to the contrary
contained herein, Sections 3.5 and 3.6, Sections 5-22 of this Agreement will
survive any termination of this Agreement and the termination of the Employment
Term.  Additionally, payments and benefits owed to Executive under
Sections 3 and 4 hereof shall survive the termination of this Agreement to the
extent provided for in Sections 3 and 4.

      


      11.    Applicable
Law.  This Agreement will be governed by and construed in
accordance with the substantive laws (and  choice of laws rules) of
the State of Georgia .  Each of the parties irrevocably consents to
the jurisdiction and venue of the state courts in Fulton County, Georgia and the
federal courts in the Northern District of Georgia in any and all actions
between the parties arising hereunder and agrees to resolve all such disputes in
such courts.

      


      12.    Notices.   All
notices, consents or other communications required or permitted to be given
under this Agreement must be in writing and will be deemed to have been duly
given (i) when delivered personally, or (ii) one (1) business day after being
sent by a nationally recognized express courier service designated for next
business day delivery, postage or delivery charges prepaid, to the parties at
their respective addresses stated on the first page of this
Agreement.  Either party may change its address for notice and the
address to which copies must be sent by giving notice of the new address to the
other party in accordance with this Section 12, provided that any such change of
address notice will not be effective unless and until received.  A
copy of any notice sent to Executive shall be sent in the same manner of
delivery to: David F. Cooper, Esq., Kitchens Kelley Gaynes, P.C., 11 Piedmont
Center, Suite 900, 3495 Piedmont Road, NE, Atlanta, Georgia 30305.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      13.    Prior
Agreements.  Executive represents to Employer (a) that there
are no restrictions, agreements or understandings whatsoever to which Executive
is a party which would prevent or make unlawful his execution of this Agreement
or his employment hereunder, (b) that Executive’s execution of this Agreement
and Executive’s employment hereunder do not constitute a breach of any contract,
agreement or understanding, oral or written, to which Executive is a party or
which Executive is bound, and (c) that Executive has full legal right and
capacity to execute this Agreement and to enter into employment by
Employer.  All prior employment agreements, oral or written, between
Executive and Employer that have not previously expired or terminated are hereby
terminated as of the date hereof as fully performed on both sides; provided,
Executive shall be entitled to receive after the Closing any unpaid
consideration due Executive on account of agreements entered between Executive
and Employer pre-Closing, including any amounts held in the Employer’s Rabbi
Trust or bonus plan prior to Closing that the Executive is entitled to
receive.

      


      14.    Parties in
Interest.   This Agreement is for the personal services of
Executive and is not be assignable by Employer without the express prior written
consent of the Executive.  Because of the unique and personal nature
of the Executive’s duties under this Agreement, neither this Agreement nor any
rights or obligations under this Agreement is assignable by the
Executive.  This Agreement is not intended and shall not be construed
to confer any rights or remedies hereunder upon any Person other than the
parties hereto, provided, however, that the Parent shall be a third party
beneficiary entitled to receive the benefit of and enforce Sections 3.6, 5
through 9, 15 and 16 hereof as if such entities had been a party to this
Agreement.

      


      15.    Trade Secrets of
Others.   It is the understanding of both the Employer and
the Executive that the Executive will not divulge to the Employer or Parent or
any of their affiliates any confidential information or trade secrets belonging
to others.  Consistent with the foregoing, the Executive will not
provide to the Employer or its affiliates any documents or copies of documents
containing such information.

      


      16.    Advertising
Waiver.   The Executive agrees to permit the Employer and
Parent and their affiliates, and Persons or other organizations authorized by
the Employer or Parent or their affiliates, to use, publish and distribute
advertising or sales promotional literature concerning the products and/or
services of the Employer and Parent and their affiliates in which the
Executive’s name and/or pictures of the Executive appear and are cast in a
positive manner.  The Executive hereby waives and releases any claim
or right the Executive may otherwise have arising out of such use, publication
or distribution.

      


      17.    Entire
Understanding.   This Agreement sets forth the entire
understanding of the parties hereto with respect to the subject matter hereof
and supersedes all prior and contemporaneous, oral or written, express or
implied, agreements and understandings.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      18.    Amendment and
Waiver.   This Agreement may not be amended or modified
unless in writing and signed by Executive, a duly authorized representative of
Employer other than Executive and, prior to Closing, the written consent of
Parent.  No waiver with respect to this Agreement will be enforceable
unless in writing and signed by the party against which enforcement is sought
(which, in the case of the Employer, must be a duly authorized representative of
Employer other than Executive).  Neither the failure nor any delay on
the part of either party to exercise any right, remedy, power or privilege under
this Agreement will operate as a waiver thereof, nor will any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor will
any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence.

      


      19.    Counterparts.  This
Agreement may be executed in two counterparts, each of which shall be deemed an
original, all of which together shall contribute one and the same
instrument.

      


      20.    Severability.  The
finding by a court of competent jurisdiction of the unenforceability, invalidity
or illegality of any provision of this Agreement shall not render any other
provision of this Agreement unenforceable, invalid or illegal.  Such
court shall have the discretion authority, if any, to modify or replace the
invalid or unenforceable term or provision with a valid and enforceable and
reasonable term or provision.

      


      21.    Section Headings,
Interpretation, Construction.   Any headings preceding the
text of any of the Sections or Subsections of this Agreement are inserted for
convenience of reference only, and will neither constitute a part of this
Agreement nor affect its construction, meaning, or effect. This Agreement has
been drafted by legal counsel representing the Employer, but the Executive has
been encouraged to consult with, and has consulted with, the Executive’s own
independent counsel and tax advisors with respect to the terms of this
Agreement.  Each party acknowledges that it and its counsel has
reviewed and revised, or had an opportunity to review and revise, this
Agreement, and that any rule of construction to the effect that any ambiguities
are to be resolved against the drafting party shall not be employed in the
interpretation of this Agreement.

       

      22.           Furniture and
Memorabilia.  Notwithstanding Section 5, at any time after the
Closing, Executive shall be permitted to remove (i) all of his personal property
from Employer’s offices including all personal memorabilia and business
memorabilia collected by Executive in connection with business transacted prior
to the date of Closing, and (ii) his HP 2510 personal laptop computer and all
office furniture located in the Executive’s office in Duluth, Georgia as of the
Closing.  After termination of Executive’s employment with the Company
the Company agrees at the cost and expense of Executive to transfer the
Executive’s cell phone telephone number to Executive.  To the extent
that there is data of Employer located on Executive’s  computer or
other electronic device, Executive shall after the termination of his employment
be entitled to retain his personal Microsoft Outlook list of contacts and
Executive will work in good faith with Employer to transfer or from Executive’s
computer Proprietary Information of Employer.

      


      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      


      IN WITNESS WHEREOF, the parties have
duly executed and delivered this Agreement as of the date first stated
above.

      


      


      INNOTRAC
CORPORATION

      


      


      
        	
                By:

              	
                /s/ George M.
      Hare

              	 
      	
                /s/ Scott
      Dorfman

              	 
      
	 
      	
                George
      M. Hare

              	 
      	
                Scott
      Dorfman

              	 
      


      

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
A

       

      RELEASE
AND WAIVER OF CLAIMS

       

      In
consideration of the benefits and mutual agreements set forth in the Employment
Agreement, dated October 6, 2008 (the “Agreement”), between Innotrac
Corporation (“Employer”) and Scott D. Dorfman
(“Executive”), to which
this form is attached, Executive, intending to be legally bound, agrees to the
following release and waiver (“Release and
Waiver”):

       

      In
exchange for the consideration provided to Executive by the Agreement that
Executive is not otherwise entitled to receive and the other commitments of
Employer in the Agreement, Executive and his or her heirs, representatives,
agents and attorneys hereby generally and completely release Employer and its
directors, officers, employees, shareholders, partners, agents, attorneys,
predecessors, successors, parent and subsidiary entities, insurers, affiliates
and assigns from any and all claims, liabilities and obligations, both known and
unknown, that arise out of or are in any way related to events, acts, conduct or
omissions occurring prior to Executive signing this Release and
Waiver.  This general release includes, but is not limited to: (1) all
claims arising out of or in any way related to Executive’s employment with
Employer or the termination of that employment; (2) all claims related to
Executive’s compensation or benefits from Employer, including, but not limited
to, salary, bonuses, commissions, vacation pay, expense reimbursements,
severance pay, fringe benefits, stock, stock options, or any other ownership
interests in Employer; (3) all claims for breach of contract, wrongful
termination, and breach of the implied covenant of good faith and fair dealing;
(4) all tort claims, including, but not limited to, claims for fraud,
defamation, emotional distress, and discharge in violation of public policy; and
(5) all federal, state, and local statutory claims, including, but not limited
to, claims for discrimination, harassment, retaliation, attorneys’ fees, or
other claims arising under the federal Civil Rights Act of 1964 (as amended),
the federal Americans with Disabilities Act of 1990, the federal Age
Discrimination in Employment Act of 1967 (as amended) (“ADEA”), and similar state
laws.  Notwithstanding the foregoing, this general release
specifically excludes any and all claims that Executive may have in regard to
(a) any ongoing severance or employment obligations of Employer to Executive
under the Agreement or any other written agreement or arrangement between
Employer and Executive, (b) any ongoing obligations of Employer to Executive
under any written stock option agreement, restricted stock award agreement,
restricted stock unit award agreement or other equity award agreement evidencing
an option or other equity award granted or awarded by Employer to Executive, (c)
any indemnification obligations of Employer to Executive as a former director,
officer and/or employee of Employer or any of its subsidiaries pursuant to
Employer’s certificate of incorporation or bylaws or any indemnification or
other written agreement, (d) any rights Executive may have under any directors
and officers liability insurance policy of Employer, including tail insurance,
and (e) any rights Executive may have arising by virtue of his status as a
stockholder of Employer.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Executive
acknowledges that, among other rights, he or she is waiving and releasing any
rights he or she may have under ADEA, that this Release and Waiver is knowing
and voluntary, and that the consideration given for this Release and Waiver is
in addition to anything of value to which he or she was already entitled as an
executive of Employer.  Executive further acknowledges that he or she
has been advised, as required by the Older Workers Benefit Protection Act,
that:  (a) the release and waiver granted herein does not relate to
claims under the ADEA which may arise after this Release and Waiver is executed;
(b) he or she should consult with an attorney prior to executing this Release
and Waiver; (c) he or she has twenty-one (21) days in which to consider this
Release and Waiver (although he or she may choose voluntarily to execute this
Release and Waiver earlier); (d) he or she has seven (7) days following the
execution of this Release and Waiver to revoke his or her consent to this
Release and Waiver; and (e) this Release and Waiver shall not be effective until
the eighth day after he or she executes this Release and Waiver and the
revocation period has expired (the “Effective
Date”).

       

      This
Release and Waiver, including any referenced documents, constitutes the
complete, final and exclusive embodiment of the entire agreement between
Employer and Executive with regard to the subject matter
hereof.  Executive is not relying on any promise or representation by
Employer that is not expressly stated herein.  This Release and Waiver
may only be modified by a writing signed by both Executive and a duly authorized
officer of Employer.

       

       

      
        	Date:	
                 

              	 
      	
                By:

              	 
      	 
      


      

       

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      
        Exhibit
B

         

      

      
        AIRCRAFT
USE AGREEMENT

         

        This
Aircraft Use Agreement (“Agreement”) is dated as of
[                ],
2008 (the “Effective Date”) and is by and between SDD Holdings, Inc.
(hereinafter called “Owner”), and Innotrac Corporation (hereinafter called
“Client”).

         

        WITNESSETH:

         

        
          	
                  1.

                	
                  Aircraft
      Availability:

                
	 	 
	 
      	
                  Owner
      hereby makes available to Client up to 24 occupied flight hours per month
      (collectively, “Flight Hours”) in a certain Pilatus aircraft, serial
      number 388, FAA Registration number N388PC (hereinafter called “Aircraft”)
      subject to the terms and conditions set forth herein.  To the
      extent Client does not utilize 24 Flight Hours during any calendar month,
      such unused hours may be carried over to the following month (“Unused
      Flight Hours”); provided that all Unused Flight Hours shall expire at the
      end of the Term.

                
	 	 
	
                  2.

                	
                  Term:

                
	 	 
	 
      	
                  The
      term of this Agreement shall commence on the Effective Date and continue
      until the termination or expiration of the Employment Agreement dated
      October 5, 2008, by and between Scott Dorfman and Innotrac Corporation f
      (“Term”).  Notwithstanding the foregoing, Client may terminate
      this Agreement (and thereafter have no further liability for the Monthly
      Basic Charge or Hourly Fee, both as defined on Appendix “A”) if Scott D.
      Dorfman’s employment by Client is terminated “for cause” or he
      resigns.

                
	 	 
	
                  3.

                	
                  Payment:

                
	 	 
	 
      	
                  Client
      agrees to pay Owner in accordance with the terms set forth in Appendix “A”
      to this Agreement.

                
	 	 
	
                  4.

                	
                  Custody
      of Aircraft:

                
	 	 
	 
      	
                  Aircraft
      used by Client under this Agreement shall remain under the custody of
      Owner at all times.  Owner may use the Aircraft for purposes
      other than the business of the Client when such use will not interfere
      with the scheduling needs of Client.  Owner will provide (at its
      cost) hangar storage for the Aircraft at Peachtree-Dekalb Airport,
      Atlanta, Georgia.

                
	 	 
	
                  5.

                	
                  Maintenance:

                
	 	 
	 
      	
                  During
      the term of this Agreement, Owner shall, at its own cost and expense,
      maintain the Aircraft in a safe and properly-equipped condition, and shall
      perform all repairs, inspections, and maintenance to keep it in an
      airworthy condition in accordance with applicable laws and regulations,
      including, without limitation, all applicable FAR’s and all other
      applicable D.O.T. and FAA regulations.  Without limiting the
      foregoing, Owner shall be responsible for undertaking and completing any
      and all scheduled and unscheduled maintenance and repair procedures,
      either calendar or hourly, during the Term at Owner’s sole cost and
      expense.  Other than the payment of the Monthly Basic Charge and
      Hourly Fee, Client shall have no obligation whatsoever with regard to the
      use, operation, or maintenance of the
Aircraft.

                


        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	
                  6.

                	
                  Fuel:

                
	 	 
	 
      	
                  Owner,
      at its own cost and expense, shall provide all fuels and lubricants as may
      be required for the operation of the Aircraft for all flights conducted
      for the benefit of Owner or Client.

                
	 	 
	
                  7.

                	
                  Pilots
      and Other Carrier-provided Personnel:

                
	 	 
	 
      	
                  Owner
      shall furnish qualified flight crews for the operation of the Aircraft for
      Client at the expense of Owner and shall oversee both the initial and
      ongoing training of the pilots.  The pilots and other personnel
      furnished by Owner hereunder shall be the employees of Owner, and not
      Client, and Owner accepts full and exclusive liability for the payment of
      worker’s compensation or employer’s insurance premiums with respect to
      such personnel, and for payment of all taxes, contributions and other
      payments required by law with respect to such
personnel.

                
	 	 
	
                  8.

                	
                  Insurance:

                
	 	 
	 
      	
                  During
      the term of this Agreement, Owner, at its own cost and expense, shall
      provide and maintain the following insurance coverage on the Aircraft used
      by Client: Combined single limit of liability for bodily injury, passenger
      and property damage liability of not less than $5,000,000 and a non-owner
      policy with a single limit of liability for bodily injury, passenger and
      property damage liability of not less than $25,000,000.  In the
      case of the non-owner insurance policy, Owner will name each of (Client
      and the Client’s affiliates) as additional named
      insureds.  Owner will cause a certificate of insurance for each
      coverage required to be maintained hereunder to be issued to Client
      promptly following execution of this Agreement.  Owner will at
      all times comply with all representations, warranties, and other terms and
      conditions of each policy of insurance required
  hereunder.

                
	 	 
	
                  9.

                	
                  Fees
      and Taxes:

                
	 	 
	 
      	
                  Sec
      Appendix “A”.

                


        

         

        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

        

         

        
          	
                  10.

                	
                  Scheduling:

                
	 	 
	 
      	
                  a.

                	
                  Client
      understands that under this Agreement, scheduling of the Aircraft will be
      done on a first-come first-served basis.

                
	 	 	 
	 
      	
                  b.

                	
                  Every
      effort will be made by Owner to accommodate the aircraft scheduling of
      Client.  Availability of crews and aircraft will normally be
      subject to notification of requirement to Owner by Client at least twenty
      four (24) hours prior to schedule departure time, although Owner will make
      its best effort to accommodate flight requests made with less than 24
      hours notice.  No charges shall be made by Owner for cancelled
      reservations.

                
	 	 	 
	 
      	
                  c.

                	
                  Any
      request to the Owner for services provided in this Agreement shall be made
      only by an authorized representative of Client.  Questions
      regarding the qualification of any individual to make flight arrangements
      under this Agreement shall be referred to Scott D.
  Dorfman.

                
	 	 	 
	
                  11.

                	
                  Monthly
      Reports:

                
	 	 
	 
      	
                  Owner
      will maintain and provide to Client, a log for each flight, containing the
      date, name of the person authorizing the flight, date of flight, a list of
      passengers, points of travel and such other information as Client may from
      time to time reasonably request.

                
	 	
                   

                
	
                  12.

                	
                  Prior
      Agreements:

                
	 	 
	 
      	
                  All
      prior agreements between Owner and Client (including any lease agreements)
      respecting the Aircraft are hereby superseded and replaced by this
      Agreement and all unsatisfied obligations of the parties under all such
      prior agreements shall be deemed waived and released as of the date of
      this Agreement.

                
	 	 
	
                  13.

                	
                  Governing
      Law:

                
	 	 
	 
      	
                  This
      Agreement shall be governed by the internal laws of the State of Georgia
      without reference to any conflicts of law provisions.

                
	 	 
	
                  14.

                	
                  Assignment:

                
	 	 
	 
      	
                  Neither
      party may assign or delegate this Agreement or assign its rights, delegate
      its obligations or otherwise subcontract the services to be provided
      hereunder without the prior written approval of the other
      party.

                


        

         

        
          
            
            

          

          
            3

            
              

            

          

          
            
            

          

        

         

        
          	
                  15.

                	
                  Entire
      Agreement:

                
	 	 
	 
      	
                  This
      Agreement contains the entire understanding between the parties in respect
      of its subject matter and may be amended only by a written instrument duly
      executed by the parties hereto or their respective assigns.  Any
      provision of this Agreement that is prohibited or unenforceable shall be
      ineffective to the extent of such prohibition or unenforceability without
      invalidating the remaining provisions hereof.  This Agreement
      may be executed in duplicate counterparts, either of which shall
      constitute the executed Agreement if the other be not
      produced.

                
	 	 
	
                  16.

                	
                  Acknowledgements:

                
	 	 
	 
      	
                  The
      parties hereto do not intend that this Agreement be construed as a lease
      agreement but in the event a court of competent jurisdiction were to
      conclude otherwise then, and only then, the following paragraphs shall
      apply:

                
	 	 
	 
      	
                  a.

                	
                  Owner
      certifies that the Aircraft presently complies with applicable FAA
      maintenance and inspection requirements and that the Aircraft has been
      maintained for the last twelve (12) months and inspected under Part 91 of
      the Federal Aviation Regulations.  Owner certifies that the
      Aircraft will be maintained and inspected under Part 91 of the Federal
      Aviation Regulations for operations to be conducted under this Agreement
      for the duration of this Agreement.

                
	 	 	 
	 
      	
                  b.

                	
                  Owner,
      with an address of 6655 Sugarloaf Parkway, Duluth, GA 30097, certifies
      that it is responsible for operational control of the Aircraft under this
      Aircraft Use Agreement during the term hereof and that it understands its
      responsibility for compliance with applicable Federal Aviation
      Regulations.

                
	 	 	 
	 
      	
                  c.

                	
                  Owner
      understands that an explanation of factors bearing on operational control
      and pertinent FAA regulations can be obtained from the nearest FAA Flight
      Standards District Office, General Aviation District Office, or Air
      Carrier District Office.

                
	 	 	 
	 
      	
                  d.

                	
                  Owner
      agrees to keep a copy of this Aircraft Use Agreement in the Aircraft at
      all times during the Client’s use, and during the term of this
      Agreement.

                
	 	 	 
	
                  17.

                	
                  Notices:

                
	 	 
	 
      	
                  All
      notices required under this Agreement shall be deemed given if sent by
      national overnight courier, telecopy or PDF
to:

                


        

         

        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

        

         

        IN
WITNESS WHEREOF, the parties hereto have executed this Agreement under seal as
of the day and year first above written.

         

         

         

        
          	
                  Owner:

                	 	 	
                  Client:

                	 
	 	 	 	 	 
	 	
                  SDD
      Holdings, Inc.

                  c/o
      Scott Dorfman

                  Innotrac
      Corporation

                  6655
      Sugarloaf Parkway

                  Duluth,
      GA 30097

                	 	
                  Innotrac
      Corporation

                  6655
      Sugarloaf Parkway

                  Duluth,
      GA 30097

                  Attn:
      Arthur Miller, Esquire

                
	 	 	 	 	 
	By:	 	 	By:	 
	 	 	 	 	 
	Title:	 	 	
                  Title:

                	 
	 	 	 	 	 
	
                  Date:

                	 	 	Date:	 


        

         

        
          
            
            

          

          
            5

            
              

            

          

          
            
            

          

        

         

        Aircraft
Use Agreement

         

        Appendix
“A”

         

        
          	
                  1.

                	
                  Basic
      Monthly Charges:

                
	 	 
	 
      	
                  a.

                	
                  The
      basic charge during the Term of this Agreement shall be $7,000 per month
      (“Monthly Basic Charge”), payable beginning on the Effective Date, and
      continuing on the 1st
      business day of each month thereafter as provided for in Section 2 of the
      Agreement.

                
	 	 	 
	 
      	
                  b.

                	
                  In
      addition to the Monthly Basic Charge, Client shall also pay Owner the sum
      of $1,250 per occupied flight hour (“Hourly Fee”) not to exceed 24 hours
      per month.  Subject to the provisions of Section 2 of the
      Agreement, Client agrees to pay Owner the Hourly Fee multiplied by 24 for
      each month during the Term regardless of whether Owner actually utilizes
      the Aircraft for 24 occupied flight hours during any given
      month.

                
	 	 	 
	 
      	
                  c.

                	
                  An
      “occupied hour” is defined as an Aircraft flight hour, measured from
      lift-off to touch-down, flown at the Client’s request from a point
      specified by the Client to another point specified by the Client, whether
      or not the Client is on board the Aircraft.

                
	 	 	 
	 
      	
                  Except
      for the Monthly Basic Charge and the Hourly Fee, Client shall have no
      other monetary obligation to Owner whatsoever and Owner shall be
      responsible for all costs and expenses associated with the Aircraft
      including, without limitation, all fuel costs, landing fees, catering
      charges, ground transportation, international fees and all FET or sales
      taxes arising from the Monthly Basic Fee or Hourly
  Fee.

                


        

         

         

        
          	
                                        

                	
                  Accepted:

                	 	 	
                   

                	 
	 	 	 	 	 	 
	For:	SDD Holdings, Inc.	 	For:	Innotrac
      Corporation	 
	 	 	 	 	 	 
	
                  By:

                	 	 	By:	 	 
	 	 	 	 	 	 
	Title:	 	 	Title:	 	 
	 	 	 	 	 	 
	
                  Date:

                	 	 	
                  Date:

                	 	 


        

         

      

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      Exhibit
C

       

      
        GSI
Commerce, Inc.

        2005
Equity Incentive Plan

        Restricted
Stock Award Agreement

         

        Pursuant
to your Restricted Stock Award Grant Notice (“Grant
Notice”) and this Restricted Stock Award Agreement (the “Agreement”),
GSI Commerce, Inc. (the “Company”)
has granted you a Restricted Stock Award under Section 7(b) of its 2005 Equity
Incentive Plan (the “Plan”) to
acquire the number of shares of the Company’s Common Stock indicated in the
Grant Notice (collectively, the “Award”).  Defined
terms not explicitly defined in this Agreement but defined in the Plan shall
have the same definitions as in the Plan.

         

         The
Company agrees as follows with respect to the Award:

         

        1.    Delivery of
Shares of Common Stock.  Your acquisition of the shares of
Company common stock that are the subject of the Award and referenced as
“Restricted Share” in your Employment Agreement (the “Employment Agreement”)
with the Company of even date herewith (the “Shares”) shall be consummated as
follows:

         

        (a)    Subject
to vesting, you will become entitled to the Shares by delivering your Grant
Notice, executed by you in the form attached hereto, to the Stock Plan
Administrator of the Company, or to such other person as the Company may
designate, during regular business hours.

         

        (b)    The
Company shall direct the transfer agent for the Company to deliver to the Escrow
Agent pursuant to the terms of Section 8 below the certificate or certificates
evidencing the Shares to be acquired by you.  You acknowledge and
agree that (i) until vesting occurs any such Shares shall be held in book entry
form directly registered with the transfer agent or such other form and (ii)
upon vesting, as the Company may reasonably determine.

         

        2.    Consideration.  The
Shares to be acquired by you on the “Date of
Grant” indicated on your Grant Notice shall be deemed paid, in whole or
in part, in consideration of your services to the Company pursuant to your
Employment Agreement in the amounts and to the extent required by your
Employment Agreement and applicable law and your entry into noncompetition
covenants with the Company.

         

        3.    Vesting.  Subject
to the limitations contained herein and in the Plan, the Shares will be earned
by you upon vesting as provided in your Grant Notice and Employment Agreement
provided that vesting will cease after the termination of your Continuous
Service in accordance with your Employment Agreement.  Shares acquired
by you that have vested in accordance with the Vesting Schedule referenced or
set forth in the Grant Notice and this Section 3 are “Vested
Shares.”  Shares acquired by you pursuant to this Agreement
that are not Vested Shares are “Unvested
Shares.”

         

        4.    Number of
Shares.  The number of Shares subject to your Award as
referenced in your Grant Notice shall be adjusted from time to time for
capitalization adjustments as set forth in the Plan.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        5.    Conditions
to Issuance and Delivery of Shares.  The Company will not be
obligated to issue or deliver any Shares pursuant to this Agreement (i) until
all conditions to the Award as set forth in the Plan have been satisfied, waived
or removed, (ii) if the outstanding Common Stock is at the time listed on any
stock exchange or included for quotation on an inter-dealer system, until the
Shares have been listed or included or authorized to be listed or included on
such exchange or system upon official notice of notice of issuance.

         

        6.    Right of
Reacquisition.  The Company shall simultaneously with the
termination of your Continuous Service automatically reacquire (the “Reacquisition
Right”) for no consideration all of the Shares that are Unvested Shares
on the day after the termination of your Continuous Service, unless the Company agrees to waive
its Reacquisition Right as to some or all of the Unvested Shares.  Any
such waiver shall be exercised by the Company by written notice to you or your
representative (with a copy to the Escrow Agent, as defined below) within ninety
(90) days after the termination of your Continuous Service, and the Escrow Agent
may then release to you the number of Unvested Shares not being reacquired by
the Company.  If the Company does not waive its reacquisition right as
to all of the Unvested Shares, then upon such termination of your Continuous
Service, the Escrow Agent shall transfer to the Company the number of Unvested
Shares the Company is reacquiring.  The Reacquisition Right shall
expire when all of the Shares have become Vested Shares in accordance with
Section 3.

         

        7.    Corporate
Transaction.  In the event of a Corporate Transaction, the
treatment of your Award will be governed by the provisions of Section 12(c) of
the Plan, which may include the ability of the Company to assign the
Reacquisition Right to its successor (or the successor’s parent company), if
any, in connection with the transaction.  In addition, to the extent
the Reacquisition Right remains in effect following such transaction, it shall
apply to the new capital stock or other property received in exchange for the
Common Stock in consummation of the transaction, but only to the extent the
Common Stock was at the time covered by such right.

         

        8.    Escrow of
Unvested Common Stock.  As security for your performance of the
terms of this Agreement and to insure the availability for prompt delivery of
the Shares upon vesting or, if applicable, execution by Company of its
Reacquisition Right provided in Section 6 above, you agree to the following
“Joint
Escrow” and “Joint Escrow
Instructions,” and you and the Company hereby authorize and direct the
Chief Financial Officer of the Company (“Escrow
Agent”) to hold the documents delivered to Escrow Agent pursuant to the
terms of this Agreement and of your Grant Notice and Employment Agreement, in
accordance with the following Joint Escrow Instructions:

         

        (a)    In the
event your Continuous Service with the Company or an affiliate of the Company
(an “Affiliate”)
terminates, the Company shall, pursuant to the Reacquisition Right in Section 6
above, automatically reacquire for no consideration all Unvested Shares, within
the meaning of Section 3 above, as of the date of such termination, unless the
Company elects to waive such right as to some or all of the Unvested
Shares.  If the Company (or its assignee) elects to waive the
Reacquisition Right, the Company or its assignee will give you and Escrow Agent
a written notice specifying the number of Unvested Shares not to be reacquired.
You and the Company hereby irrevocably authorize and direct Escrow Agent to
close the transaction contemplated by such notice as soon as practicable
following the date of termination of your Continuous Service in accordance with
the terms of this Agreement and your Employment Agreement.

         

        
          
            
            

          

          
            - 2
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        (b)    Vested
Shares upon the payment of all applicable taxes owed by you shall be delivered
to you within one (1) business day of your request therefor in the manner set
forth in Section 18 for the giving of notices.

         

        (c)    At any
closing involving the transfer or delivery of some or all of the property
subject to the Grant Notice and this Agreement, Escrow Agent is directed
(a) to date any stock assignments necessary for the transfer in question,
(b) to fill in the number of Vested Shares and Unvested Shares being
transferred, as applicable and (c) to deliver same, together with the
certificate, if any, evidencing the Vested Shares or Unvested Shares to be
transferred, to you or the Company, as applicable.

         

        (d)    You
irrevocably authorize the Company to deposit with Escrow Agent the certificates,
if any, evidencing the Shares to be held by Escrow Agent hereunder and any
additions and substitutions to the Shares as specified in this
Agreement.  Subject to all provisions of this Agreement, you
irrevocably do hereby constitute and appoint Escrow Agent as your
attorney-in-fact and agent for the term of this escrow to execute with respect
to such securities and other property all documents of assignment and/or
transfer and all stock certificates necessary or appropriate to make all
securities negotiable and complete any transaction herein
contemplated.

         

        (e)    The
escrow shall terminate and Vested Shares and Unvested Shares shall be delivered
by the Escrow Agent to the party entitled to receive them upon the expiration or
valid exercise in full of the Reacquisition Right, whichever occurs first, and
the completion of the tasks contemplated by these Joint Escrow Instructions;
provided, however, that this escrow shall not terminate with respect to any
Vested Shares, but for which you have not satisfied any applicable federal,
state, local and foreign tax withholding obligation of the Company or an
Affiliate which may arise in connection with the vesting of such
shares.

         

        (f)    If at the
time of termination of this escrow Escrow Agent should have in its possession
any documents, securities, or other property belonging to you or to which you
are entitled, Escrow Agent shall deliver all of same to you and shall be
discharged of all further obligations hereunder in its capacity as Escrow
Agent.

         

        (g)    Except as
otherwise provided in these Joint Escrow Instructions, Escrow Agent’s duties
hereunder may be altered, amended, modified, or revoked only by a writing signed
by all of the parties hereto.

         

        (h)    Escrow
Agent, in its capacity as Escrow Agent, shall be obligated only for the
performance of such duties as are specifically set forth herein and may rely and
shall be protected in relying or refraining from acting on any instrument
reasonably believed by Escrow Agent to be genuine and to have been signed or
presented by the proper party or parties or their assignees.  Escrow
Agent shall not be personally liable for any act Escrow Agent may do or omit to
do hereunder as Escrow Agent or as attorney-in-fact for you while acting in good
faith and any act done or omitted by Escrow Agent pursuant to the advice of
Escrow Agent’s own attorneys shall be conclusive evidence of such good
faith.

         

        
          
            
            

          

          
            - 3
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        (i)    Escrow
Agent is hereby expressly authorized to regard any and all warnings given by any
of the parties hereto or by any other person or corporation, and is hereby
expressly authorized to comply with and obey orders, judgments, or decrees of
any court.  In case Escrow Agent obeys or complies with any order,
judgment, or decree of any court, Escrow Agent shall not be liable to any of the
parties hereto or to any other person, firm, or corporation by reason of such
compliance, notwithstanding any such order, judgment, or decree being
subsequently reversed, modified, annulled, set aside, vacated, or found to have
been entered without jurisdiction.

         

        (j)    Escrow
Agent shall not be liable in any respect on account of the identity, authority,
or rights of the parties executing or delivering or purporting to execute or
deliver this Agreement or any documents or papers deposited or called for
hereunder.

         

        (k)    Escrow
Agent shall not be liable for the outlawing of any rights under any statute of
limitations with respect to these Joint Escrow Instructions or any documents
deposited with Escrow Agent.

         

        (l)    Escrow
Agent’s ongoing responsibilities as Escrow Agent hereunder shall terminate if
Escrow Agent shall cease to be the Chief Financial Officer or if Escrow Agent
shall resign by written notice to each party.  In the event of any
such termination, the Company shall appoint any officer or assistant officer of
the Company or other person who assumes the position of successor Escrow Agent
within two (2) business dates of the date that the Escrow Agent shall cease to
be the Chief Financial Officer and you hereby confirm the appointment of such
successor or successors as the successor Escrow Agent..

         

        (m)    If Escrow
Agent reasonably requires other or further instruments in connection with these
Joint Escrow Instructions or obligations in respect hereto, the necessary
parties hereto shall join in furnishing such instruments.

         

        (n)    It is
understood and agreed that should any dispute arise with respect to the delivery
and/or ownership or right of possession of the securities, Escrow Agent is
authorized and directed to immediately interplead into a court of competent
jurisdiction all of said securities, Escrow Agent is authorized and directed to
retain in its possession without liability to anyone all or any part of said
securities until such dispute shall have been settled either by mutual written
agreement of the parties concerned or by a order, decree, or judgment of a court
of competent jurisdiction after the time for appeal has expired and no appeal
has been perfected, but Escrow Agent shall be under no duty whatsoever to
institute or defend any such proceedings.

         

        (o)    By
signing the Grant Notice Escrow Agent becomes a party to this Agreement hereto
only for the purpose of said Joint Escrow Instructions in this Section 8; Escrow
Agent does not become a party to any other rights and obligations of this
Agreement apart from those in this Section 8.

         

        
          
            
            

          

          
            - 4
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        (p)    Escrow
Agent shall be entitled to employ such legal counsel and other experts as Escrow
Agent may deem necessary properly to advise Escrow Agent in connection with
Escrow Agent’s obligations hereunder.  Escrow Agent may rely upon the
advice of such counsel, and may pay such counsel reasonable compensation
therefor.  The Company shall be responsible for all fees generated by
such legal counsel in connection with Escrow Agent’s obligations
hereunder.

         

        (q)    These
Joint Escrow Instructions set forth in this Section 8 shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.  It is understood and agreed that references to
“Escrow Agent” or “Escrow Agent’s” herein refer to the original Escrow Agent and
to any and all successor Escrow Agents.  It is understood and agreed
that the Company may at any time or from time to time assign its rights under
the Agreement and these Joint Escrow Instructions in whole or in
part.

         

        9.    Execution
of Documents.  You hereby acknowledge and agree that the manner
selected by the Company by which you indicate your consent to your Grant Notice
is also deemed to be your execution of your Grant Notice and of this
Agreement.  You further agree that such manner of indicating consent
may be relied upon as your signature for establishing your execution of any
documents to be executed in the future in connection with your
Award.  This Restricted Stock Award Agreement shall be deemed to be
signed by the Company, you and the Escrow Agent upon the respective signing by
the Company, you and the Escrow Agent of the Restricted Stock Award Grant Notice
to which it is attached.

         

        10.        
 Irrevocable
Power of Attorney. You constitute and appoint the Company’s Chief
Financial Officer as attorney-in-fact and agent to transfer the Shares on the
books of the Company with full power of substitution in the premises, and to
execute with respect to such securities and other property all documents of
assignment and/or transfer and all stock certificates necessary or appropriate
to make all securities negotiable and complete any transaction herein
contemplated.  This is a special and limited power of attorney coupled
with an interest (specifically, your underlying interest in the Shares and the
Company’s underlying security interest in retaining the Shares in the event you
do not perform the required services for the Company), and is irrevocable and
shall survive your death or legal incapacity.  This power of attorney
is limited to the matters specified in and to effectuate this Agreement for the
parties.

         

        11.         
Rights as
Stockholder.  Subject to the provisions of this Agreement, you
shall have the right to exercise all rights and privileges of a stockholder of
the Company with respect to the Shares deposited in
the Joint Escrow.   You shall be deemed to be the holder of the
Shares for purposes of receiving any dividends that may be paid with respect to
such Shares and for purposes of exercising any voting rights relating to such
Shares even if some or all of the shares are Unvested Shares.

         

        12.       
  Limitations
on Transfer of the Common Stock.  In addition to
any other limitation on transfer created by applicable securities laws, you
shall not sell, assign, hypothecate, donate, encumber, or otherwise dispose of
any interest in the Shares while such shares are Unvested
Shares.  Once the Shares vest in accordance with the conditions set
forth in the Plan and your Employment Agreement, you may sell, assign,
hypothecate, donate, encumber, or otherwise dispose of or transfer any interest
in the Shares in accordance with applicable laws and regulations.

         

        
          
            
            

          

          
            - 5
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        13.   
  Restrictive
Legends.  The certificates
representing the Shares shall have endorsed thereon appropriate legends as
determined by the Company.  Subject to the conditions set forth in the
Plan and our Employment Agreement, including the payment of all applicable
taxes, all restrictions shall be removed and deemed removed immediately upon
vesting.

         

        14.      Non-transferability
of the Award.  Your Award is not transferable except by will or
by the laws of descent and distribution and shall be exercisable during your
lifetime only by you.

         

        15.   
 
Award not a
Service Contract.  Your Award is not an employment or service
contract, and nothing in your Award shall be deemed to create in any way
whatsoever any obligation on your part to continue in the employ of the Company
or an Affiliate, or of the Company or an Affiliate to continue your
employment.  In addition, nothing in your Award shall obligate the
Company or an Affiliate, their respective stockholders, Boards of Directors,
Officers or Employees to continue any relationship that you might have as a
Director or Consultant for the Company or an Affiliate, except as otherwise
provided in the Employment Agreement.

         

        16.         
Withholding
Obligations.

         

        (a)    At the
time your Award is granted and the Shares vest, or at any time thereafter as
requested by the Company, you agree to make adequate provision in cash for, any
sums required to be paid by you to satisfy the federal, state, local and foreign
tax payable by you in connection with the Vested Shares; provided, the Company
shall pay from its own resources all withholding obligations of the Company or
its Affiliates, if any, which arise in connection with the Award.

         

        (b)    Unless
your tax withholding obligations are satisfied or you have made provision to
satisfy them, the Company shall have no obligation to issue a certificate for
such shares or release such shares from any escrow provided for
herein.

         

        17.   Tax
Consequences.  You have reviewed with your own tax advisors the
federal, state, local and foreign tax consequences of this investment and the
transactions contemplated by this Agreement.  You are relying solely
on such advisors and not on any statements or representations of the Company or
any of its agents.  You understand that you (and not the Company)
shall be responsible for your own tax liability that may arise as a result of
this investment or the transactions contemplated by this
Agreement.  You understand that Section 83 of the Code taxes as
ordinary income to you the fair market value of the Shares as of the date all
restrictions on the Shares lapse (that is, as of the date on which the Shares
vest).  In this context, “restriction” includes the right of the
Company to reacquire the Shares pursuant to its Reacquisition Right, which is a
substantial risk of forfeiture.

         

        
          
            
            

          

          
            - 6
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        18.   Notices.  All
notices with respect to the Plan shall be in writing and shall be hand delivered
or sent by first class mail or reputable overnight delivery service, expenses
prepaid.  Notice may also be given by electronic mail or facsimile and
shall be effective on the date transmitted if confirmed within 24 hours
thereafter by a signed original sent in a manner provided in the preceding
sentence.  Notices to the Company or the Board shall be delivered or
sent to GSI’s headquarters, 935 First Avenue, King of Prussia, PA 19406, to the
attention of its Chief Financial Officer and its General
Counsel.  Notices to any Participant or holder of shares of Common
Stock issued pursuant to an Award shall be sufficient if delivered or sent to
such person’s address as it appears in the regular records of the Company or its
transfer agent.  Notices to the Escrow Agent shall be sent to Chief
Financial Officer, GSI Commerce, Inc., 935 First Avenue, King of Prussia, PA
19406

         

        19.   Headings.  The headings of
the Sections in this Agreement are inserted for convenience only and will not be
deemed to constitute a part of this Agreement or to affect the meaning of this
Agreement.

         

        20.   Amendment.  This Agreement
may be amended only by a writing executed by the Company and you which
specifically states that it is amending this Agreement. Notwithstanding the
foregoing, this Agreement may be amended solely by the Board (or appropriate
committee thereof) by a writing which specifically states that it is amending
this Agreement, so long as a copy of such amendment is delivered to you, and
provided that no such amendment may adversely affect your rights hereunder
without your prior written consent, which may be given or withheld in your sole
discretion.  Without limiting and subject to the foregoing, the Board
(or appropriate committee thereof) reserves the right to change, by written
notice to you, the provisions of this Agreement in any way it may deem necessary
or advisable to carry out the purpose of the grant as a result of any change in
applicable laws or regulations or any future law, regulation, ruling, or
judicial decision, provided that any such change will be applicable only to
rights relating to that portion of the Award which is then subject to
restrictions as provided herein.

         

        21.   Miscellaneous.

         

        (a)    The
rights and obligations of the Company under your Award shall be transferable to
any one or more persons or entities, and all covenants and agreements hereunder
shall inure to the benefit of, and be enforceable by, the Company’s successors
and assigns. Your rights and obligations under your Award may not be assigned by
you, except with the prior written consent of the Company.

         

        (b)    You agree
upon request to execute any further documents or instruments necessary to carry
out the purposes and intent of your Award.

         

        22.   Governing
Plan Document.  Your Award is subject to all the provisions of
the Plan, the provisions of which are hereby made a part of your Award, and is
further subject to all laws, and interpretations, amendments, rules and
regulations adopted by the Company to comply with such laws, which may from time
to time be promulgated and made applicable to the Plan.  In the event
of any conflict between the provisions of your Award and those of the Plan, the
provisions of the Plan shall control.  The Board (or appropriate
committee thereof) will have the power to reasonably interpret the Plan and this
Agreement and to adopt such reasonable rules for the administration,
interpretation, and application of the Plan as are consistent therewith and to
interpret or revoke any such rules.  All such interpretations,
amendments, rules and regulations shall be made uniform and applicable to all
persons who are Eligible Stock Award Recipients (as defined in the
Plan).  All such actions taken and all such interpretations and
determinations made by the Board (or appropriate committee thereof) will be
final and binding upon you, the Company, and all other interested
persons.  No member of the Board (or appropriate committee thereof)
will be personally liable for any such action, determination, or interpretation
made in good faith with respect to the Plan or this Agreement.

         

        
          
            
            

          

          
            - 7
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        23.   Effect on
Other Employee Benefit Plans.  The value of the Award subject
to this Agreement will not be included as compensation, earnings, salaries, or
other similar terms used when calculating the Employee’s benefits under any
employee benefit plan sponsored by the Company or any subsidiary except as such
plan otherwise expressly provides. The Company expressly reserves its rights to
amend, modify, or terminate any of the Company’s or any subsidiary’s employee
benefit plans in accordance with their terms.

         

        24.   Choice
of Law.  The
interpretation, performance and enforcement of this Agreement will be governed
by the law of the state of Delaware without regard to such state’s conflicts of
laws rules.

         

        25.   Severability.  If
all or any part of this Agreement or the Plan is declared by any court or
governmental authority to be unlawful or invalid, such unlawfulness or
invalidity will not invalidate any portion of this Agreement or the Plan not
declared to be unlawful or invalid. Any Section of this Agreement (or part of
such a Section) so declared to be unlawful or invalid will, if possible, be
construed in a manner which will give effect to the terms of such Section or
part of a Section to the fullest extent possible while remaining lawful and
valid.

         

        26.   Company
Representations.   The Company warrants as follows: (a)you
are qualified in all respects under the Plan to receive the Award and all of the
Shares, subject to conditions on vesting; (b) the issuance of the Award and
Shares to you has received all requisite approvals contemplated by the documents
governing the Plan, and no further consents or approvals are required; (c) the
issuance of the Award and Shares to you has been duly authorized by all
appropriate corporate action on the part of the Company, and no further
authorization or corporate action is required; and (d) upon vesting, and subject
to the conditions on vesting, the Shares will be free of all encumbrances and
restrictions, including restrictions on transfer.

         

         

         

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