exv10w1



 




Exhibit 10.1



GSI COMMERCE, INC.




1996 EQUITY INCENTIVE PLAN




(amended and restated as of March 5, 2008)




1. Purpose




     The purpose of the GSI Commerce, Inc. Equity Incentive Plan (the “Plan”) is to promote the
long-term retention of key employees of GSI Commerce, Inc., (“GSI”) and its current and future
subsidiaries (collectively, the “Company”) and other persons who are in a position to make
significant contributions to the success of the Company, to further reward these employees and
other persons for their contributions to the Company’s growth and expansion, to provide additional
incentive to these employees and other persons to continue to make similar contributions in the
future, and to further align the interests of these employees and other persons with those of GSI’s
stockholders. These purposes will be achieved by granting to such employees and other persons, in
accordance with the provisions of this Plan, Options, Stock Appreciation Rights, Restricted Stock
or Unrestricted Stock Awards, Deferred Stock Awards or Performance Awards, for shares of GSI’s
common stock, $0.01 par value per share (“Common Stock”), or Loans or Supplemental Grants, or
combinations thereof (“Awards”).



2. Aggregate Number of Shares




     2.1 The aggregate number of shares of Common Stock for which Awards may be granted under the
Plan will be 9,500,000 shares with an individual limit of 1,000,000 shares per year for each
Employee (as defined below) covered by Section 162(m) of the Code (as defined below); provided,
however, that the aggregate maximum number of shares of Common Stock that may be issued as ISOs (as
defined in Section 5.1(a)) shall be 9,500,000 shares of Common Stock. Notwithstanding the
foregoing, if there is any change in the capitalization of GSI, such as by stock dividend, stock
split, combination of shares, exchange of securities, recapitalization or other event which the
Board of Directors (the “Board”) of GSI deems, in its sole discretion, to be similar circumstances,
the aggregate number and/or kind of shares for which Awards may be granted under the Plan shall be
appropriately adjusted in a manner determined by the Board. No fractional shares of Common Stock
will be delivered under the Plan.



     2.2 Treasury shares, reacquired shares and unissued shares of Common Stock may be used for
purposes of the Plan, at GSI’s sole discretion.



     2.3 Shares of Common Stock that were issuable pursuant to an Award that has been forfeited,
cancelled, exchanged, surrendered or terminated but with respect to which such Award had not been
exercised or otherwise terminated without an issuance of shares, shares of Common Stock that are
issued pursuant to an Award but that are subsequently forfeited and shares of Common Stock that
were issuable pursuant to an Award that was payable in Common Stock or cash but that was satisfied
in cash, shall be available for future Awards under
the Plan. If the exercise price of any Option is satisfied by a Participant’s tender of shares of Company Stock
to



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the Company (by actual delivery or attestation), only the number of shares of Company Stock
issued net of any shares so tendered will be deemed issued to the Participant. If, however, shares
of Common Stock are not issued to a Participant because such shares otherwise issuable upon the
exercise of an Option instead are used to satisfy an applicable tax withholding requirement or
other obligation to the Company in connection with the exercise of an Option, then such shares will
be deemed to have been issued to the Participant and will not be available for Awards under the
Plan.




3. Eligible Employees and Participants




     3.1 All current and future key employees of the Company, including officers and directors who
are employed by the Company (“Employees”), and all other persons, including directors of the
Company who are not Employees, who, in the opinion of the Board, are in a position to make a
significant contribution to the success of the Company, shall be eligible to receive Awards under
the Plan. No eligible Employee or other person (a “Participant”) shall have any right to receive
an Award except as expressly provided in the Plan.



     3.2 The Participants who shall actually receive Awards under the Plan shall be determined by
the Board in its sole discretion. In making such determinations, the Board shall consider the
positions and responsibilities of eligible Employees and other persons, their past performance and
contributions to the Company’s growth and expansion, the value of their services to the Company,
the difficulty of finding qualified replacements, and such other factors as the Board deems
pertinent in its sole discretion.



4. Administration




     4.1 The Plan shall be administered by the Board. The Board may delegate all or any portion of
its authority hereunder to one or more committees, each consisting of one or more members of the
Board. Once appointed, such committees shall continue to serve until otherwise directed by the
Board and all references in this Plan to the Board thereafter shall be to such committees. Any
Awards granted to officers who are subject to Section 16 of the Securities Exchange Act of 1934, as
amended (the “1934 Act”) shall be made by a committee of two or more members of the Board, each of
whom is a Non-Employee Director (as defined or interpreted for purposes of Rule 16b-3 (including
amendments and successor provisions) as promulgated by the Securities and Exchange Commission
pursuant to its authority under the 1934 Act (“Rule 16b-3”)) or as otherwise permitted by Rule
16b-3 and other applicable regulations. Any Awards granted to officers who are subject to Section
162(m) of the Internal Revenue Code of 1986, as amended (the “Code”) shall be made by a committee
of two or more members of the Board, each of whom is an Outside Director (as defined or interpreted
for purposes of Section 162(m) of the Code) or as otherwise permitted by Section 162(m) of the Code
and other applicable regulations.



     4.2 In addition to its other authority but subject to the provisions of the Plan, the Board
shall have the authority to determine, in its sole discretion, the Participants who shall be
eligible to receive Awards, the Participants who shall actually receive Awards, the size of
each Award, including the number of shares of Common Stock subject to the Award, the type or types



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of each Award, the date on which each Award shall be granted, the terms and conditions of each
Award, whether to waive compliance by a Participant with any obligations to be performed by the
Participant under an Award or waive any term or condition of an Award, whether to amend or cancel
an existing Award in whole or in part (except that the Board may not, without the consent of the
holder of an Award or unless specifically authorized by the terms of an Award, take any action
under this clause with respect to such Award if such action would adversely affect the rights of
such holder), and the form or forms of instruments that are required or deemed appropriate under
the Plan, including any written notices and elections required of Participants.




     4.3 The Board may adopt such rules for the administration of the Plan as it deems necessary or
advisable, in its sole discretion. For all purposes of the Plan, a majority of the members of the
Board shall constitute a quorum, and the vote or written consent of a majority of the members of
the Board on a particular matter shall constitute the act of the Board on that matter. The Board
shall have the exclusive right to construe the Plan and any Award, to settle all controversies
regarding the Plan or any Award, to correct defects and omissions in the Plan and in any Award, and
to take such further actions as the Board deems necessary or advisable, in its sole discretion, to
carry out the purpose and intent of the Plan. Such actions shall be final, binding and conclusive
upon all parties concerned.



     4.4 No member of the Board shall be liable for any act or omission (whether or not negligent)
taken or omitted in good faith, or for the good faith exercise of any authority or discretion
granted in the Plan to the Board, or for any act or omission of any other member of the Board.



     4.5 All costs incurred in connection with the administration and operation of the Plan shall
be paid by the Company. Except for the express obligations of the Company under the Plan and under
Awards granted in accordance with the provisions of the Plan, the Company shall have no liability
with respect to any Award, or to any Participant or any transferee of shares of Common Stock from
any Participant, including, but not limited to, any tax liabilities, capital losses, or other costs
or losses incurred by any Participant or any such transferee.



5. Types of Awards




     5.1. Options.



     (a) An Option is an Award entitling the recipient on exercise thereof to purchase Common Stock
at a specified exercise price. Both “incentive stock options,” as defined in Section 422 of the
Code (any Option intended to qualify as an incentive stock option is hereinafter referred to as an
“ISO”), and Options that are not incentive stock options (“non-ISO”), may be granted under the
Plan. ISOs shall be awarded only to Employees.



     (b) The exercise price of an Option will be determined by the Board subject to the following:



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          (1) The exercise price of an ISO shall not be less than 100% (110% in the case of an ISO
granted to a ten percent stockholder) of the fair market value of the Common Stock subject to the
ISO, determined as of the time the Option is granted. A “ten-percent stockholder” is any person
who at the time of grant owns, directly or indirectly, or is deemed to own by reason of the
attribution rules of Section 424(d) of the Code, stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or of any of its subsidiaries.




          (2) The exercise price of a non-ISO shall not be less than 100% of the fair market value of
the Common Stock subject to the non-ISO, determined as of the time the non-ISO is granted, except
that:




               (A) the exercise price of a non-ISO may be equal to or greater than 85% of the fair market
value of the Common Stock subject to the non-ISO, if the discount is granted in lieu of a
reasonable amount of cash compensation; or



               (B) the exercise price of a non-ISO granted pursuant to a Performance Award may be (i) 100% of
the fair market value of the Common Stock subject to the non-ISO, determined either as of the time
the Performance Award is granted or as of the time the non-ISO is granted pursuant to the
Performance Award; or (ii) an amount less than such fair market value if the discount is granted in
lieu of a reasonable amount of cash compensation as consideration for exceeding the goal(s) set
forth in the Performance Award.



          (3) In no case may the exercise price paid for Common Stock which is part of an original issue
of authorized Common Stock be less than the par value per share of the Common Stock.




          (4) The Board may reduce the exercise price of an option at any time after the time of grant,
but in the case of an Option originally awarded as an ISO, only with the consent of the
Participant.




     (c) The period during which an Option may be exercised will be determined by the Board, except
that the period during which an ISO may be exercised will not exceed ten years (five years, in the
case of an ISO granted to a ten-percent stockholder) from the day immediately preceding the date
the Option was granted.



     (d) An Option will become exercisable at such time or times, and on such terms and conditions,
as the Board may determine. The Board may at any time accelerate the time at which all or any part
of the Option may be exercised. Any exercise of an Option must be in writing, signed by the proper
person and delivered or mailed to the Company, accompanied by (i) any documents required by the
Board and (ii) payment in full in accordance with Section 5.1(e) below for the number of shares for
which the Option is exercised.



     (e) Stock purchased on exercise of an Option must be paid for as follows: (i) in cash or by
check (acceptable to GSI in accordance with guidelines established for this purpose), bank
draft or money order payable to the order of GSI or (ii) if so permitted by the instrument



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evidencing the Option (or in the case of an Option which is not an ISO, by the Board at or after
grant of the Option), (A) through the delivery of shares of Common Stock which have been
outstanding for at least six months (unless the Board expressly approves a shorter period) and
which have a fair market value on the last business day preceding the date of exercise at least
equal to the exercise price, or (B) by delivery of a promissory note of the Option holder to GSI,
payable on such terms and conditions as the Board may determine, or (C) by delivery of an
unconditional and irrevocable undertaking by a broker to deliver promptly to GSI sufficient funds
to pay the exercise price, or (D) by any combination of the permissible forms of payment; provided,
that if the Common Stock delivered upon exercise of the Option is an original issue of authorized
Common Stock, at least so much of the exercise price as represents the par value of such Common
Stock must be paid other than by the Option holder’s promissory note. Any payment in shares of
Common Stock will be effected by the delivery of such shares to the Company, duly endorsed in blank
or accompanied by stock powers duly executed in blank, or by attestation of the ownership of such
shares, together with any other documents and evidences as the Company may require.




     (f) If the market price of shares of Common Stock subject to an Option (other than an Option
which is in tandem with a Stock Appreciation Right as described in Section 6.2 below) exceeds the
exercise price of the Option at the time of its exercise, the Board may cancel the Option and cause
GSI to pay in cash or in shares of Common Stock (at a price per share equal to the fair market
value per share) to the person exercising the Option an amount equal to the difference between the
fair market value of the Common Stock which would have been purchased pursuant to the exercise
(determined on the date the Option is canceled) and the aggregate exercise price which would have
been paid. The Board may exercise its discretion to take such action only if it has received a
written request from the person exercising the Option, but such a request will not be binding on
the Board.



     5.2. Stock Appreciation Rights.



     (a) A Stock Appreciation Right is an Award entitling the recipient on its exercise to receive
an amount, in cash or Common Stock or a combination thereof (such form to be determined by the
Board), determined in whole or in part by reference to appreciation in Common Stock value. In
general, a Stock Appreciation Right entitles the Participant to receive, with respect to each share
of Common Stock as to which the Right is exercised, the excess of the share’s fair market value on
the date of exercise over its fair market value on the date the Right was granted. However, the
Board may provide at the time of grant that the amount the recipient is entitled to receive will be
adjusted upward or downward under rules established by the Board to take into account the
performance of the Common Stock in comparison with the performance of other stocks or an index or
indices of other stocks. The Board may also grant Stock Appreciation Rights that provide that
following a Change in Control of the Company (as defined in Section 6.3(b)) the holder of such
Right will be entitled to receive, with respect to each share of Common Stock subject to the Right,
an amount equal to the excess of a specified value (which may include an average of values) for a
share of Common Stock during a period preceding such
Change in Control over the fair market value of a share of Common Stock on the date the Right
was granted.



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     (b) Stock Appreciation Rights may be granted in tandem with, or independently of, Options
granted under the Plan. A Stock Appreciation Right granted in tandem with an Option that is not an
ISO may be granted either at or after the time the Option is granted. A Stock Appreciation Right
granted in tandem with an ISO may be granted only at the time the Option is granted.



     (c) When Stock Appreciation Rights are granted in tandem with Options, the following rules
will apply:



          (1) The Stock Appreciation Right will be exercisable only at such time or times, and to the
extent, that the related Option is exercisable and will be exercisable in accordance with the
procedure required for exercise of the related Option.




          (2) The Stock Appreciation Right will terminate and no longer be exercisable upon the
termination or exercise of the related Option, except that a Stock Appreciation Right granted with
respect to less than the full number of shares covered by an Option will not be reduced until the
number of shares as to which the related Option has been exercised or has terminated exceeds the
number of shares not covered by the Stock Appreciation Right.




          (3) The Option will terminate and no longer be exercisable upon the exercise of the related
Stock Appreciation Right.




          (4) The Stock Appreciation Right will be transferable only with the related Option.




          (5) A Stock Appreciation Right granted in tandem with an ISO may be exercised only when the
market price of the Stock subject to the Option exceeds the exercise Price of such option.




     (d) A Stock Appreciation Right not granted in tandem with an Option will become exercisable at
such time or times, and on such terms and conditions, as the Board may specify. The Board may at
any time accelerate the time at which all or any part of the Right may be exercised. Any exercise
of an independent Stock Appreciation Right must be in writing, signed by the proper person and
delivered or mailed to GSI, accompanied by any other documents required by the Board.



     5.3. Restricted and Unrestricted Stock.



     (a) A Restricted Stock Award entitles the recipient to acquire, for a purchase price not less
than the par value, shares of Common Stock subject to the restrictions described in Section 5.3(d)
(“Restricted Stock”).



     (b) A Participant who is granted a Restricted Stock Award shall have no rights with respect to
such Award unless the Participant accepts the Award by written instrument delivered or mailed to
GSI accompanied by payment in full of the specified purchase price, if any, of the



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shares covered
by the Award. Payment may be by certified or bank check or other instrument acceptable to the
Board.




     (c) A Participant who receives Restricted Stock shall have all the rights of a stockholder
with respect to such stock, including voting and dividend rights, subject to the restrictions
described in 5.3(d) and any other conditions imposed by the Board at the time of grant. Unless the
Board otherwise determines, certificates evidencing shares of Restricted Stock will remain in the
possession of the Company until such shares are free of all restrictions under the Plan.



     (d) Except as otherwise specifically provided by the Plan or the Award, Restricted Stock may
not be sold, assigned, exchanged, pledged, gifted or otherwise disposed of, or transferred, and if
a Participant suffers a Status Change (as defined in Section 6.1) for any reason, must be offered
to GSI for purchase for the amount of cash paid for such stock, or forfeited to the Company if no
cash was paid. These restrictions will lapse at such time or times, and on such terms and
conditions, as the Board may determine. The Board may at any time accelerate the time at which the
restrictions on all or any part of the shares will lapse.



     (e) Any Participant making, or required by an Award to make, an election under Section 83(b)
of the Code with respect to Restricted Stock shall deliver to GSI, within ten days of the filing of
such election with the Internal Revenue Service, a copy of such election.



     (f) The Board may, at the time any Award described in this Section 5 is granted, provide that
any or all the Common Stock delivered pursuant to the Award will be Restricted Stock.



     (g) The Board may, in its sole discretion, approve the sale to any Participant of shares of
Common Stock free of restrictions under the Plan for a price which is not less than the par value
of the Common Stock.



     5.4. Deferred Stock. A Deferred Stock Award entitles the recipient to receive shares of
Common Stock to be delivered in the future. Delivery of the Common Stock will take place at such
time or times, and on such terms and conditions, as the Board may determine. The Board may at any
time accelerate the time at which delivery of all or any part of the Common Stock will take place.
At the time any Award described in this Section 5 is granted, the Board may provide that, at the
time Common Stock would otherwise be delivered pursuant to the Award, the Participant will instead
receive an instrument evidencing the Participant’s right to future delivery of Deferred Stock.



     5.5. Performance Awards. A Performance Award entitles the recipient to receive, without
payment, an Award or Awards described in this Section 5 (such form to be determined by the Board)
following the attainment of such performance goals, during such measurement
period or periods, and on such other terms and conditions, all as the Board may determine.
Performance goals may be related to personal performance, corporate performance, group or
departmental performance or any such other category of performance as the Board may determine. The
Board shall have the authority to determine the performance goals, the period or



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period during
which performance is to be measured and all other terms and conditions applicable to the Award.
The Board may determine performance goals, based on but not limited to the following: revenue,
operating income, net earnings, earnings before interest, taxes, depreciation and amortization
(“EBITDA”), earnings before interest and taxes (“EBIT”), net income, earnings per share, total
stockholder return, cash flow, return on assets, decrease in expenses, Common Stock price,
price-earnings multiple or other financial factors determined by the Board. Performance goals
established by the Board may be (but need not be) different for different periods, and different
performance goals may be applicable to different Participants.




     5.6. Loans and Supplemental Grants.



     (a) The Company may make a loan to a Participant (“Loan”), either in connection with the
purchase of Common Stock under the Award or the payment of any Federal, state and local income tax
with respect to income recognized as a result of the Award. The Board shall have the authority, in
its sole discretion, to determine whether to make a Loan, the amount, terms and conditions of the
Loan, including the interest rate (which may be zero), whether the Loan is to be secured or
unsecured or with or without recourse against the borrower, the terms on which the Loan is to be
repaid and the terms and conditions, if any, under which the Loan may be forgiven. In no event
shall any Loan have a term (including extensions) in excess of ten years.



     (b) In connection with any Award, the Board may grant a cash award to the Participant
(“Supplemental Grant”) not to exceed an amount equal to (i) the amount of any Federal, state and
local income tax on ordinary income for which the Participant may be liable with respect to the
Award, determined by assuming taxation at the highest marginal rate, plus (ii) an additional amount
on a grossed-up basis intended to make the Participant whole on an after-tax basis after
discharging all the Participant’s income tax liabilities arising from all payments under this
Section 5. Any payments under this Section 5(b) shall be made at the time the Participant incurs
Federal income tax liability with respect to the Award.



6. Events Affecting Outstanding Awards




     6.1. Termination of Service by Death or Disability. If a Participant’s service relationship
with the Company, whether as an Employee, director, consultant, advisor or other provider engaged
by the Company to render services is interrupted or terminated (such interruption or termination
being referred to as a “Status Change”) by reason of death or permanent disability (as determined
by the Board), the following rules shall apply, unless otherwise determined by the Board. A change
in the capacity in which the Participant renders service to the Company as an Employee, director
consultant, advisor or other provider or a change in the entity for which the Participant renders
such service, provided that there is no interruption or termination of the Participant’s service
with the Company or its subsidiaries, shall not constitute a Status Change:



     (a) All Options and Stock Appreciation Rights held by the Participant at the time of such
Status Change, to the extent then exercisable, will continue to be exercisable by the Participant
or, in the case of the death of the Participant, by the Participant’s heirs, executor,
administrator or other legal representative, for a period of one year after the Participant’s
Status



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Change. After the expiration of such one-year period, all such Options and Stock
Appreciation Rights shall terminate. In no event, however, shall an Option or Stock Appreciation
Right remain exercisable beyond the latest date on which it could have been exercised without
regard to this Section 6. All Options and Stock Appreciation Rights held by a Participant at the
time of such Status Change that are not then exercisable shall terminate upon such Status Change.




     (b) All Restricted Stock held by the Participant at the time of such Status Change shall be
transferred to the Company (and, in the event the certificates representing such Restricted Stock
are held by the Company, such Restricted Stock shall be so transferred without any further action
by the Participant) in accordance with Section 5.3 above.



     (c) Any payment or benefit under a Deferred Stock Award, Performance Award or Supplemental
Grant to which the Participant was not irrevocably entitled at the time of such Status Change shall
be forfeited and the Award canceled as of the time of such Status Change.



     6.2. Termination of Service Other Than by Death or Disability. If a Participant suffers a
Status Change other than by reason of death or permanent disability (as determined by the Board),
the following rules shall apply, unless otherwise determined by the Board at the time of grant of
an Award:



     (a) All Options and Stock Appreciation Rights held by the Participant at the time of such
Status Change, to the extent then exercisable, will continue to be exercisable by the Participant
for a period of three months after the Participant’s Status Change. After the expiration of such
three-month period, all such Options and Stock Appreciation Rights shall terminate. In no event,
however, shall an Option or Stock Appreciation Right remain exercisable beyond the latest date on
which it could have been exercised without regard to this Section 6. All Options and Stock
Appreciation Rights held by a Participant at the time of such Status Change that are not then
exercisable shall terminate upon such Status Change.



     (b) All Restricted Stock held by the Participant at the time of such Status Change shall be
transferred to the Company (and, in the event the certificates representing such Restricted Stock
are held by the Company, such Restricted Stock shall be so transferred without any further action
by the Participant) in accordance with Section 5.3 above.



     (c) Any payment or benefit under a Deferred Stock Award, Performance Award, or Supplemental
Grant to which the Participant was not irrevocably entitled at the time of such Status Change shall
be forfeited and the Award canceled as of the date of such Status Change.



     (d) A termination by the Company of a Participant’s employment with or service to the Company
shall be for “Cause” only if the Participant: (i) was guilty of gross negligence or
willful misconduct in the performance of his or her duties for the Company, (ii) breached or
violated, in a material respect, any agreement between the Participant and the Company or any of
the Company’s policy statements regarding conflicts-of-interest, insider trading or
confidentiality, (iii) committed a material act of dishonesty or breach of trust, (iv) acted in a
manner that was inimical or injurious, in a material respect, to the business or interests of the
Company, or (v) was convicted of a felony.



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     (e) For all purposes of this Section 6.2 and Section 6.3, (i) if a Participant is an Employee
of a subsidiary of GSI and such subsidiary ceases to be a subsidiary of GSI, then the Participant’s
employment with the Company will be deemed to have been terminated by the Company without Cause,
unless the Participant is transferred to GSI or another subsidiary of GSI; (ii) the employment with
the Company of a Participant who is an Employee will not be deemed to have been terminated if the
Participant is transferred from GSI to a subsidiary of GSI, or vice versa, or from one subsidiary
of GSI to another; and (iii) if a Participant who is an Employee terminates his or her employment
with the Company following a reduction in his or her rate of compensation, then the Participant’s
employment with the Company will be deemed to have been terminated by the Company without Cause.



     6.3. Change in Control



     (a) In the event of a Change in Control (as defined in Section 6.3(b)), the following rules
will apply, unless otherwise expressly provided by the Board at the time of the grant of an Award:



          (1) Each outstanding Option and Stock Appreciation Right shall automatically become
exercisable in full six months after the occurrence of such Change in Control or, if sooner, upon a
termination by the Company of the Participant’s employment with or service to the Company for any
reason other than for Cause (as defined in Section 6.2(d)). This provision shall not prevent an
Option or Stock Appreciation Right from becoming exercisable sooner as to Common Stock or cash that
would otherwise have become available under such Option or Right during such period.




          (2) Each outstanding share of Restricted Stock shall automatically become free of all
restrictions and conditions six months after the occurrence of such Change in Control or, if
sooner, upon a termination by the Company of the Participant’s employment with or service to the
Company for any reason other than for Cause (as defined in Section 6.2(d)). This provision shall
not prevent the earlier lapse of any restrictions or conditions on Restricted Stock that would
otherwise have lapsed during such period.




          (3) Conditions on Deferred Stock Awards, Performance Awards and Supplemental Grants which
relate only to the passage of time and continued employment shall automatically terminate six
months after the occurrence of such Change in Control or, if sooner, upon a termination by the
Company of the Participant’s employment with or service to the Company for any reason other than
for Cause (as defined in Section 6.2(d)). This provision shall not prevent the earlier lapse of
any conditions relating to the passage of time and continued
employment that would otherwise have lapsed during such period. Performance or other
conditions (other than conditions relating only to the passage of time and continued employment)
shall continue to apply unless otherwise provided in the instrument evidencing the Awards or in any
other agreement between the Participant and the Company or unless otherwise agreed to by the Board.




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     (b) A “Change in Control” means: (i) the occurrence of an event that would, if known to the
Company’s management, be required to be reported by the Company under Item 1(a) of Form 8-K
pursuant to the 1934 Act; or (ii) the acquisition or receipt, in any manner, by any person (as
defined for purposes of the 1934 Act) or any group of persons acting in concert, of direct or
indirect beneficial ownership (as defined for purposes of the 1934 Act) of 50% or more of the
combined voting securities ordinarily having the right to vote for the election of directors of the
Company; or (iii) a change in the constituency of the Board with the result that individuals (the
“Incumbent Directors”) who are members of the Board on the Effective Date (as specified in Section
9) cease for any reason to constitute at least a majority of the Board, provided that any
individual who is elected to the Board after the Effective Date and whose nomination for election
was unanimously approved by the Incumbent Directors shall be considered an Incumbent Director
beginning on the date of his or her election to the Board; or (iv) the sale, exchange or other
disposition of all or a significant portion of the Company’s business or assets, or the execution
by the Company of a binding agreement providing for such a transaction; unless in any such case, at
least a majority of the Incumbent Directors determine, prior to the occurrence of such Change in
Control, that no Change in Control has or will have occurred.



7. Grant and Acceptance of Awards




     7.1. The Board’s approval of a grant of an Award under the Plan, including the names of
Participants and the size of the Award, including the number of shares of Common Stock subject to
the Award, shall be reflected in minutes of meetings held by the Board or in written consents
signed by members of the Board. Once approved by the Board, each Award shall be evidenced by such
written instrument, containing such terms as are required by the Plan and such other terms,
consistent with the provisions of the Plan, as may be approved from time to time by the Board.



     7.2 Each instrument may be in the form of agreements to be executed by both the Participant
and the Company, or certificates, letters or similar instruments, which need not be executed by the
Participant but acceptance of which shall evidence agreement to the terms thereof. The receipt of
an Award shall not impose any obligation on the Participant to accept the Award.



     7.3. Except as specifically provided by the Plan or the instrument evidencing an Award, a
Participant shall not become a stockholder of GSI until (a) the Participant makes any required
payments in respect of the Common Stock issued or issuable pursuant to the Award, (b) the
Participant furnishes GSI with any required agreements, certificates, letters or other instruments,
and (c) the Participant actually receives the shares of Common Stock. Subject to any terms and
conditions imposed by the Plan or the instrument evidencing an Award, upon the
occurrence of all of the conditions set forth in the immediately preceding sentence, a
Participant shall have all rights of a stockholder with respect to shares of Common Stock,
including, but not limited to, the right to vote such shares and to receive dividends and other
distributions paid with respect to such shares. The Board may, upon such terms and conditions as
it deems appropriate, provide that a Participant will receive a benefit in lieu of cash dividends
that would have been payable on any and all Common Stock subject to the Participant’s Award, had
such Common



11









 




Stock been outstanding. Without limitation, the Board may provide for payment to the
Participant of amounts representing such dividends, either currently or in the future, or for the
investment of such amounts on behalf of the Participant.




     7.4. Notwithstanding any other provision of the Plan, the Company shall not be obligated to
deliver any shares of Common Stock pursuant to the Plan or to remove any restriction from shares of
Common Stock previously delivered under the Plan (a) until all conditions to the Award have been
satisfied or removed, (b) until, in the opinion of counsel to the Company, all applicable Federal
and state laws and regulations have been complied with, (c) 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 to be delivered have been listed or included or authorized to be listed or included on
such exchange or system upon official notice of notice of issuance, (d) if it might cause the
Company to issue or sell more shares of Common Stock that the Company is then legally entitled to
issue or sell, and (e) until all other legal matters in connection with the issuance and delivery
of such shares have been approved by counsel to the Company. If the sale of Common Stock has not
been registered under the Securities Act of 1933, as amended, the Company may require, as a
condition to exercise of an Award, such representations or agreements as counsel to the Company may
consider appropriate to avoid violation of such Act and may require that the certificates
evidencing such Common Stock bear an appropriate legend restricting transfer. If an Award is
exercised by the Participant’s legal representative, the Company shall be under no obligation to
deliver Common Stock pursuant to such exercise until the Company is satisfied as to the authority
of such representative.



8. Tax Withholding




     The Company shall withhold from any cash payment made pursuant to an Award an amount
sufficient to satisfy all Federal, state and local withholding tax requirements (the “withholding
requirements”). In the case of an Award pursuant to which Common Stock may be delivered, the Board
shall have the right to require that the Participant or other appropriate person remit to the
Company an amount sufficient to satisfy the withholding requirements, or make other arrangements
satisfactory to the Board with regard to such requirements, prior to the delivery of any Common
Stock. If and to the extent that such withholding is required, the Board may permit a Participant
or such other person or entity to elect at such time and in such manner as the Board may determine
to have the Company hold back from the shares of Common Stock to be delivered, or to deliver to the
Company, Common Stock having a value calculated to satisfy the withholding requirement. If at the
time an ISO is exercised, the Board determines that the Company could be liable for withholding
requirements with respect to a disposition of the Common Stock received upon exercise, the Board
may require as a condition of exercise that the person exercising the ISO agree (a) to inform the
Company promptly of any disposition (within
the meaning of Section 424(c) of the Code) of Common Stock received upon exercise, and (b) to
give such security as the Board deems adequate to meet the potential liability of the Company for
the withholding requirements and to augment such security from time to time in any amount
reasonably deemed necessary by the Board to preserve the adequacy of such security.



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9. Stockholder Approval, Effective Date and Term of Plan




     The Plan was adopted by the Board on March 20, 1996, subject to the approval of GSI’s
stockholders. The Plan was approved by GSI’s stockholders at GSI’s 1996 annual meeting of
stockholders on July 8, 1996. The effective date of this Plan (“Effective Date”) is July 8, 1996,
the date on which the Plan was approved by the affirmative vote of the holders of a majority of the
outstanding shares of GSI’s Common Stock. No Award shall be granted more than ten years after the
Effective Date. The Plan has been amended as follows:



	 	 	 	 	 
	 	 	Date Amended by Board	 	Date Approved by
	Nature of Amendment	 	of Directors	 	Stockholders
	To increase the
aggregate number of
shares of Common
Stock issuable under
the Plan from 100,000
to 1,000,000

	 	September 24, 1996
	 	December 4, 1997
	 
	 	 	 	 
	To increase the
aggregate number of
shares of Common
Stock issuable under
the Plan from
1,000,000 to
3,000,000

	 	January 5, 1999
	 	July 13, 1999
	 
	 	 	 	 
	To provide that the
Plan shall be
administered by the
Board and that the
Board may delegate
all or any portion of
its authority under
the Plan to one or
more committees

	 	November 16, 1999
	 	N/A
	 
	 	 	 	 
	To increase the
aggregate number of
shares of Common
Stock issuable under
the Plan from
3,000,000 to
4,500,000

	 	April 18, 2000
	 	May 25, 2000
	 
	 	 	 	 
	To increase the
aggregate number of
shares of Common
Stock issuable under
the Plan from
4,500,000 to
7,500,000; to
increase the number
of shares which may
be granted to
Employees covered by
Section 162(m) of the
Code to 1,000,000; to
amend the effect of a
Status Change on
outstanding
Restricted Stock
Awards; and to amend
the definitions of
“Cause” and “Change
of Control”

	 	January 4, 2001
	 	May 24, 2001






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	 	 	Date Amended by Board	 	Date Approved by
	Nature of Amendment	 	of Directors	 	Stockholders
	To increase the
aggregate number of
shares of Common
Stock issuable under
the Plan from
7,500,000 to
8,500,000; to limit
the number of ISOs
issuable to
8,500,000; to provide
a list of examples of
performance goals
that the Board may
determine in
connection with any
Performance Awards;
and to permit the
forfeiture of certain
payments in the event
such payments
constitute a
“parachute payment”
in certain instances.

	 	July 29, 2003
	 	September 5, 2003
	 
	 	 	 	 
	To increase the
aggregate number of
shares of Common
Stock issuable under
the Plan from
8,500,000 to
9,500,000; and to
limit the number of
ISO’s issuable to
9,500,000.

	 	May 11, 2004
	 	July 29, 2004
	 
	 	 	 	 
	To provide that any
outstanding Awards
shall be consistent
with Sections 409A or
424 of the Code, to
the extent
applicable.

	 	March 5, 2008
	 	N/A






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10. Effect, Amendment, Suspension and Termination




     Neither adoption of the Plan nor the grant of Awards to a Participant will affect the
Company’s right to grant to such Participant awards that are not subject to the Plan, to issue to
such Participant Common Stock as a bonus or otherwise, or to adopt other plans or arrangements
under which Common Stock may be issued to Employees or other persons or entities. The Board
reserves the right, at any time and from time to time, to amend the Plan in any way, or to suspend
or terminate the Plan, effective as of the date specified by the Board when it takes such action,
which date may be before or after the date the Board takes such action; provided that any such
action shall not affect any Awards granted before the actual date on which such action is taken by
the Board; and further provided that the approval of GSI’s stockholders shall be required whenever
necessary for the Plan to continue to satisfy the conditions of Rule 16b-3 under the 1934 Act,
Section 422 of the Code with respect to the award of ISOs (unless the Board determines that ISOs
shall no longer be granted under the Plan), any bylaw, rule or regulation of the market system or
stock exchange on which GSI’s Common Stock is then listed or admitted to trading, or any other
applicable law, rule or regulation.



11. Other Provisions




     11.1 Nothing contained in the Plan or any Award shall confer upon any Employee or other
Participant the right to continue in the employ of, or to continue to provide service to, the
Company or any affiliated person, or interfere in any way with the right of the Company or any
affiliated person to terminate the employment or service of any Employee or other Participant for
any reason.



     11.2 Corporate action constituting an offer by GSI of Common Stock to any Participant under
the terms of an Award shall be deemed completed as of the date of grant of the Award, regardless of
when the instrument, certificate, or letter evidencing the Award is actually received or accepted
by the Participant.



     11.3 None of a Participant’s rights under any Award or under the Plan may be assigned or
transferred in any manner other than by will or under the laws of descent and distribution. The
foregoing shall not, however, restrict a Participant’s rights with respect to Unrestricted
Stock or the outright transfer of cash, nor shall it restrict the ability of a Participant’s heirs,
estate, beneficiaries, or personal or legal representatives to enforce the terms of the Plan with
respect to Awards granted to the Participant.



     11.4 The Plan, and all Awards granted hereunder, shall be governed by and construed in
accordance with the laws of the State of Delaware. The headings of the Sections of the Plan



15









 




are
for convenience of reference only and shall not affect the interpretation of the Plan. All
pronouns and similar references in the Plan shall be construed to be of such number and gender as
the context requires or permits. If any provision of the Plan is determined to be unenforceable
for any reason, then that provision shall be deemed to have been deleted or modified to the extent
necessary to make it enforceable, and the remaining provisions of the Plan shall be unaffected.




     11.5 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 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.



     11.6. If there is any change in the capitalization of the Company, such as by stock dividend,
stock split, combination of shares, exchange of securities, recapitalization or other event which
the Board deems, in its sole discretion, to be similar circumstances, the Board shall make such
adjustments to the number and/or kind of shares of stock or securities subject to Awards then
outstanding or subsequently granted, any exercise prices relating to such Awards and any other
provision of such Awards affected by such change, as the Board may determine in its sole
discretion. The Board may also make such adjustments to take into account material changes in law
or in accounting practices or principles, mergers, consolidations, acquisitions, dispositions or
similar corporate transactions, or any other event, as the Board may determine in its sole
discretion; provided, however, in case of any consolidation of the Company with, or merger of the
Company into, any other person; any merger of another person into the Company; or any sale or
transfer of all or substantially all of the assets of the Company, unless the Participant and the
Company agree otherwise in writing, Awards to purchase and/or receive Common Stock shall
automatically at the effective time of such consolidation, merger, sale or transfer become Awards
to purchase and/or receive the kind and amount (if any) of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer by a Participant with respect to the
number of shares of Common Stock of the Company into which such Award might have been exercised
immediately prior to such consolidation, merger, sale or transfer. Any adjustments to outstanding
Awards shall be consistent with Sections 409A or 424 of the Code, to the extent applicable.



     11.7. Any payment under an Award, may be paid at the discretion of the Board, according to a
deferred payment or other arrangement with the Participant.



     11.8 Unless otherwise agreed upon in writing by the Company and a Participant, in the event
that the Company’s independent auditors determine that any payment, benefit or transfer by the
Company under the Plan to or for the benefit of a Participant pursuant to a Change in Control from
the Company or otherwise (a “Payment”) would (i) constitute a “parachute payment” within the
meaning of Section 280G of the Internal Revenue Code of 1986, as



16









 




amended (the “Code”), and (ii) but
for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise
Tax”), then such Payment shall be reduced 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, up to and including the total, of the
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 the Participant’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 the
Participant elects in writing a different order (provided, however, that such election shall be
subject to Company approval if made on or after the date on which the event that triggers the
Payment occurs): reduction of cash payments; cancellation of accelerated vesting of Awards;
reduction of employee benefits. In the event that acceleration of vesting of Award compensation is
to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of
grant of the Participant’s Awards unless the Participant elects in writing a different order for
cancellation.




     The accounting firm engaged by the Company for general audit purposes as of the day prior to
the effective date of the Change in Control shall perform the foregoing calculations. If the
accounting firm so engaged by the Company is serving as accountant or auditor for the individual,
entity or group effecting the Change in Control, the Company shall appoint a nationally recognized
accounting firm to make the determinations required hereunder. The Company 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 shall provide its
calculations, together with detailed supporting documentation, to the Company and Participant
within fifteen (15) calendar days after the date on which the Participant’s right to a Payment is
triggered (if requested at that time by the Company or the Participant) or such other time as
requested by the Company or the Participant. 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 shall furnish the Company and the Participant with an opinion reasonably acceptable to the
Participant that no Excise Tax will be imposed with respect to such Payment. Any good faith
determinations of the accounting firm made hereunder shall be final, binding and conclusive upon
the Company and the Participant.



     11.9. In any case that a Participant purchases Common Stock under an Award for a price equal
to the par value of the Common Stock, the Board may determine, in its sole discretion, that such
price has been satisfied by past services rendered by the Participant.



     11.10. For the purposes of the Plan and any Award granted hereunder, unless otherwise
determined by the Board, the term “fair market value” of Common Stock on a specified date shall
mean the last sale price for one share of Common Stock on the last trading day on or before the
specified date, as reported on the Nasdaq Stock Market, or on such other market system or



17









 




stock
exchange on which GSI’s Common Stock is then listed or admitted to trading, or, if the foregoing
does not apply, the market value determined by the Board.




     11.11 Except as otherwise indicated, the term “person,” as used in the Plan shall include
individuals, corporations, partnerships, trusts, estates, limited liability companies and
partnerships and any other type of entity.



     THE UNDERSIGNED CERTIFIES THAT THE AMENDMENT AND RESTATEMENT OF THIS PLAN WAS DULY APPROVED
AND ADOPTED BY THE BOARD OF DIRECTORS OF GSI COMMERCE, INC. PURSUANT TO THE BOARD OF DIRECTORS
DATED THE 5th DAY OF MARCH, 2008.



	 	 	 	 	 
	 	 	 
	 	By:  	
/s/ Arthur H. Miller
 	 
	 	 	Arthur H. Miller 	 
	 	 	Secretary 	 
	 




18