exv10w2






Exhibit 10.2




APPENDIX B




NON-EMPLOYEE DIRECTOR STOCK OPTION AND RETAINER PLAN

OF

PFSWEB, INC.




          WHEREAS, PFSweb, Inc., a Delaware corporation (the “Company”) has adopted that certain 1999
Non-Employee Director Stock Option and Retainer Plan (as amended to date, the “Plan”); and




          WHEREAS, subject to the requisite approval of the Company’s stockholders at the Company’s
2009 Annual Meeting of Stockholders, the Company has authorized and adopted certain amendments to
the Plan;




          NOW, THEREFORE, in order to implement and effectuate said amendments, the Plan, as so amended,
shall read as follows:




          PFSweb, Inc., a corporation organized under the laws of the State of Delaware, hereby adopts
this Non-Employee Director Stock Option and Retainer Plan. The purposes of this Plan are as
follows:




          (1) To further the growth, development and financial success of the Company by providing
incentives to its non-employee Directors by assisting them to become owners of the Company’s Common
Stock and thus to benefit directly from its growth, development and financial success.




          (2) To enable the Company to obtain and retain the services of qualified non-employee
Directors in order to contribute to the long-range success of the Company by providing and offering
them an opportunity to become owners of the Company’s Common Stock.




ARTICLE I




DEFINITIONS




          Whenever the following terms are used in this Plan, they shall have the meaning specified
below unless the context clearly indicates to the contrary. The masculine pronoun shall include
the feminine and neuter and the singular shall include the plural, where the context so indicates.




Section 1.1 — Board




          “Board” shall mean the Board of Directors of the Company.




Section 1.2 — Code




          “Code” shall mean the Internal Revenue Code of 1986, as amended.




Section 1.3 — Committee




          “Committee” shall mean the Committee appointed by the Board, as provided in Section 6.1.




Section 1.4 — Company




          “Company” shall mean PFSweb, Inc., a Delaware corporation.




Section 1.5 — Director




          “Director” shall mean a member of the Board who is not an Employee.




Section 1.6 — Effective Date



 









 





          “Effective Date” shall mean July 1, 1999.




Section 1.7 — Employee




          “Employee” shall mean any employee (as defined in accordance with the regulations and revenue
rulings then applicable under Section 3401(c) of the Code) of the Company, or of any corporation
which is then a Subsidiary.




Section 1.8 — Exchange Act




          “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.




Section 1.9 — Non-Qualified Option




          “Non-Qualified Option” shall mean an Option which is not an incentive stock option and is not
qualified under Section 422 of the Code.




Section 1.10 — Officer




          “Officer” shall mean an officer of the Company, as defined in Rule 16a-1(f) under the Exchange
Act, as such Rule may be amended in the future.




Section 1.11 — Option




          “Option” shall mean an option to purchase Common Stock of the Company granted under the Plan.




Section 1.12 — Optionee




          “Optionee” shall mean a Director to whom an Option is granted under the Plan.




Section 1.13 — Parent Corporation




          “Parent Corporation” shall mean any corporation in an unbroken chain of corporations ending
with the Company if each of the corporations other than the Company then owns stock possessing 50%
or more of the total combined voting power of all classes of stock in one of the other corporations
in such chain.




Section 1.14 — Plan




          “Plan” shall mean this Non-Employee Director Stock Option and Retainer Plan of PFSweb, Inc.




Section 1.15 — Retainer




          “Retainer” shall mean the annual cash retainer payable to each Director for services as a
member of the Board and any committee or committees of the Board.




Section 1.16 — Rule 16b-3




          “Rule 16b-3” shall mean that certain Rule 16b-3 under the Exchange Act, as such Rule may be
amended in the future.




Section 1.17 — Secretary




          “Secretary” shall mean the Secretary of the Company.




Section 1.18 — Securities Act



2









 





          “Securities Act” shall mean the Securities Act of 1933, as amended.




Section 1.19 — Shares




          “Shares” shall mean shares of the Company’s Common Stock.




Section 1.20 — Subsidiary




          “Subsidiary” shall mean any corporation in an unbroken chain of corporations beginning with
the Company if each of the corporations other than the last corporation in the unbroken chain then
owns stock possessing 50% or more of the total combined voting power of all classes of stock in one
of the other corporations in such chain.




Section 1.21 — Termination




          “Termination” shall mean the time when the Director no longer serves as a member of the Board,
including, but not by way of limitation, a termination by resignation, discharge, death or
retirement.




ARTICLE II




SHARES SUBJECT TO PLAN




Section 2.1 — Shares Subject to Plan




          The Shares of stock subject to this Plan shall be shares of the Company’s Common Stock. The
aggregate number of such Shares which may be issued pursuant to this Plan shall be 155,643.




Section 2.2 — Unexercised Options




          If any Option expires or is canceled without having been fully exercised, the number of Shares
subject to such Option but as to which such Option was not exercised prior to its expiration or
cancellation, may again be optioned hereunder, subject to the limitations of Section 2.1.




Section 2.3 — Changes in Company’s Shares




          In the event that the outstanding Shares of Common Stock of the Company are hereafter changed
into or exchanged for a different number or kind of shares or other securities of the Company, or
of another corporation, or in the event of any other capital transaction involving the outstanding
shares of Common Stock of the Company as the Committee shall determine in its sole discretion,
whether by reason of reorganization, merger, consolidation, recapitalization, reclassification,
stock split-up, stock dividend, combination of shares or otherwise, appropriate adjustments shall
be made by the Committee in the number and kind of Shares which may be issued hereunder, including
adjustment to the number, exercise price and kind of shares for the purchase of which Options may
be granted, and further including adjustments of the limitations in Section 2.1 on the maximum
number and kind of shares which may be issued hereunder and adjustments to the number of Options
set forth in Section 3.5 below.




ARTICLE III




RETAINER FEES AND GRANTING OF OPTIONS




Section 3.1 — Payment of Retainer




          (a) Each Director may elect under the Plan to receive payment of any Retainer (in such
installments as such Retainer shall be payable) in Shares, in lieu of cash, by submitting a written
election (the




3









 







“Notice of Election”) to the Company. The Notice of Election shall become effective six months
following the date of the Notice of Election or such earlier date as may be permitted under Rule
16b-3 (the “Election Effective Date”) and, from and after the Election Effective Date, all
Retainers payable to the electing Director (whether in installments or otherwise) shall be payable
in Shares in the manner set forth herein.




          (b) Subject to the foregoing, each Notice of Election shall become effective on its Election
Effective Date and shall continue in effect until revoked by the electing Director in a written
notice of revocation (the “Notice of Revocation”) delivered to the Company; provided, however, that
no Notice of Revocation shall become effective until six months following the date of the Notice of
Revocation or such earlier date as may be permitted under Rule 16b-3.




          (c) If no Notice of Election is submitted to the Company, and prior to any Election Effective
Date, all Retainers shall be payable in cash.




Section 3.2 — Number of Shares




          The number of Shares to be issued to each Director electing to have his or her Retainer paid
in Shares shall be determined by dividing the dollar amount of the then payable Retainer by the
fair market value of the Shares as of the most recent trading day immediately prior to the date the
Retainer is otherwise payable. No fractional Shares shall be issued and any fractional Share shall
be rounded to the nearest whole Share. Subject to the terms and provisions hereof, all Shares
shall be issued in certificate form in the name of the Director (or any designee) as promptly as
practicable following the date of payment. For purposes of this Section, fair market value shall
be determined in accordance with Section 4.2(b) below.




Section 3.3 — Eligibility




          Each Director shall be granted Options in accordance with the provisions set forth herein.




Section 3.4 — Non-Qualification of Options




          Each Option shall be a Non-Qualified Option.




Section 3.5 — Granting of Options




          Each person who is a Director immediately following each annual meeting of stockholders of the
Company shall receive an Option to purchase 4,255 Shares as of the date of such annual meeting;
provided that such Director shall have attended at least 75% of the meetings of the Board (which
may include committee meetings) during the most recent completed fiscal year prior to such annual
meeting (or such shorter period of time as such Director held office during such fiscal year).




ARTICLE IV




TERMS OF OPTIONS




Section 4.1 — Option Agreement




          Each Option shall be evidenced by a written Stock Option Agreement, which shall be executed by
the Optionee and an authorized Officer of the Company and which shall contain such terms and
conditions as are consistent with the Plan.




Section 4.2 — Option Price




          (a) The price of the Shares subject to each Option shall be equal to 100% of the fair market
value of such Shares on the date such Option is granted.




4









 








          (b) For purposes of the Plan, the fair market value of a Share of the Company’s Common Stock
as of a given date shall be: (i) the closing price of a Share of the Company’s Common Stock on the
principal exchange on which Shares of the Company’s Common Stock are then trading; or (ii) if such
Common Stock is not traded on an exchange but is quoted on NASDAQ or a successor quotation system,
(1) the last sales price (if the Company’s Common Stock is then listed as a National Market Issue
under the NASD National Market System) or (2) the mean between the closing representative bid and
asked prices (in all other cases) for the Company’s Common Stock, in each case, on such date as
reported by NASDAQ or such successor quotation system; or (iii) if such Common Stock is not
publicly traded on an exchange and not quoted on NASDAQ or a successor quotation system, the mean
between the closing bid and asked prices for the Company’s Common Stock, on such date, as
determined in good faith by the Committee; or (iv) if the Company’s Common Stock is not publicly
traded, the fair market value established by the Committee acting in good faith.




Section 4.3 — Commencement of Exercisability




          (a) No Option may be exercised in whole or in part during the six months after such Option is
granted.




          (b) Subject to the provisions hereof, each Option granted hereunder shall be subject to the
following cumulative vesting schedule:




               (i) Until the date which is one year from the date of grant, the Option shall not be vested
and shall not be exercisable as to any of the shares subject thereto; and



               (ii) From and after the date which is one year from the date of grant, the Option shall vest
and be fully exercisable.



Section 4.4 — Expiration of Options




          No Option may be exercised to any extent after the first to occur of the following events:




               (i) The expiration of ten years from the date the Option was granted; or



               (ii) Except in the case of any Optionee who is disabled (within the meaning of Section
22(e)(3) of the Code), the expiration of three months from the date of the Optionee’s Termination
for any reason other than such Optionee’s death; or



               (iii) With respect to an Option held by an Optionee who is disabled (within the meaning of
Section 22(e)(3) of the Code), the expiration of one year from the date of the Optionee’s
Termination for any reason other than such Optionee’s death unless the Optionee dies within said
one-year period; or



               (iv) The expiration of one year from the date of the Optionee’s death with respect to all
Options held by such Optionee.



Section 4.5 — Adjustments in Outstanding Options




          In the event that the outstanding Shares of the stock subject to Options are changed into or
exchanged for a different number or kind of shares of the Company or other securities of the
Company, or in the event of any other capital transaction involving the outstanding shares of
Common Stock of the Company as the Committee shall determine in its sole discretion, whether by
reason of merger, consolidation, recapitalization, reclassification, stock split-up, stock
dividend, combination of shares or otherwise, the Committee shall make an appropriate and equitable
adjustment in the number and kind of shares as to which all outstanding Options, or portions
thereof then unexercised, shall be exercisable, to the end that after such event the Optionee’s
proportionate interest shall be maintained as before the occurrence of such event. Such adjustment
in an outstanding Option shall be made without change in the total price applicable to the Option
or the unexercised portion of the Option (except for any change in the aggregate price resulting
from rounding-off of share quantities or prices) and with any



5









 






necessary corresponding adjustment in Option price per share. Any such adjustment made by the
Committee shall be final and binding upon all Optionees, the Company and all other interested
persons.




Section 4.6 — No Repricing




     Except in connection with a corporate transaction involving the Company (including, without
limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization,
reorganization, merger, consolidation, split-up, spin-off, combination, or exchange of shares), the
terms of outstanding Options may not be amended to reduce the exercise price of outstanding Options
or cancel outstanding Options in exchange for cash, other awards or Options with an exercise price
that is less than the exercise price of the original Options without stockholder approval.



ARTICLE V




EXERCISE OF OPTIONS




Section 5.1 — Person Eligible to Exercise




          During the lifetime of the Optionee, only such Optionee may exercise an Option (or any portion
thereof) granted to him; provided, however, that, unless otherwise prohibited by Rule 16b-3, an
Optionee may transfer all or any portion of an Option to his spouse or immediate family member or
any trust for the benefit thereof or as the Committee may otherwise permit in its sole discretion.
After the death of the Optionee, any exercisable portion of an Option may, prior to the time when
such portion becomes unexercisable under the Plan, be exercised by his personal representative or
by any person empowered to do so under the deceased Optionee’s will or under the then applicable
laws of descent and distribution.




Section 5.2 — Partial Exercise




          At any time and from time to time prior to the time when any exercisable Option or exercisable
portion thereof becomes unexercisable under the Plan, such Option or portion thereof maybe
exercised in whole or in part; provided, however, that the Company shall not be required to issue
fractional shares and the Committee may, by the terms of the Option, require any partial exercise
to be with respect to a specified minimum number of shares.




Section 5.3 — Manner of Exercise




          An exercisable Option, or any exercisable portion thereof, may be exercised solely by delivery
to the Secretary or his office of all of the following prior to the time when such Option or such
portion becomes unexercisable under the Plan or the applicable Stock Option Agreement:




          (a) Notice in writing signed by the Optionee or other person then entitled to exercise such
Option or portion, stating that such Option or portion is exercised, such notice complying with all
applicable rules established by the Committee; and




          (b) (i) Full payment (in cash or by check) for the Shares with respect to which such Option or
portion is thereby exercised; or




               (ii) Subject to the consent of the Committee, (A) Shares of the Company’s Common
Stock owned
by the Optionee duly endorsed for transfer to the Company or (B) subject to the timing requirements
of Section 5.4, Shares of the Company’s Common Stock issuable to the Optionee upon exercise of the
Option, with a fair market value (as determined under Section 4.2(b)) on the date of Option
exercise equal to the aggregate Option price of the Shares with respect to which such Option or
portion is thereby exercised; or



               (iii) Any combination of the consideration provided in the foregoing subsections (i) and
(ii);
and



6









 





          (c) The payment to the Company (or other employer corporation) of all amounts which it is
required to withhold under federal, state or local law in connection with the exercise of the
Option; provided, that, with the consent of the Committee, any combination of the following may be
used to make all or part of such payment: (i) Shares of the Company’s Common Stock owned by the
Optionee duly endorsed for transfer or (ii) subject to the timing requirements of Section 5.4,
Shares of the Company’s Common Stock issuable to the Optionee upon exercise of the Option, valued
in accordance with Section 4.2(b) at the date of Option exercise; and




          (d) Such representations and documents as the Committee, in its absolute discretion, deems
necessary or advisable to effect compliance with all applicable provisions of the Securities Act
and any other federal or state securities laws or regulations. The Committee may, in its absolute
discretion, also take whatever additional actions it deems appropriate to effect such compliance
including, without limitation, placing legends on Share certificates and issuing stop-transfer
orders to transfer agents and registrars; and




          (e) In the event that the Option or portion thereof shall be exercised pursuant to Section 5.1
by any person or persons other than the Optionee, appropriate proof of the right of such person or
persons to exercise the Option or portion thereof.




Section 5.4 — Certain Timing Requirements




          Shares of the Company’s Common Stock issuable to the Optionee upon exercise of the Option may
be used to satisfy the Option price or the tax withholding consequences of such exercise only with
the consent of the Committee and (i) during the trading window period following the date of release
of the quarterly or annual summary statement of sales and earnings of the Company as may be
established by the Company for its senior executives from time to time or (ii) pursuant to an
irrevocable written election by the Optionee to use Shares of the Company’s Common Stock issuable
to the Optionee upon exercise of the Option to pay all or part of the Option price or the
withholding taxes made at least six months prior to the payment of such Option price or withholding
taxes.




Section 5.5 — Conditions to Issuance of Stock Certificates




          The Shares of stock issuable and deliverable upon the exercise of an Option, or any portion
thereof, may be either previously authorized but unissued Shares or issued Shares which have then
been reacquired by the Company. The Company shall not be required to issue or deliver any
certificate or certificates for Shares of stock issued in payment of any Retainer or purchased upon
the exercise of any Option or portion thereof prior to the fulfillment of all of the following
conditions:




          (a) The admission of such Shares to listing on all stock exchanges on which such class of
stock is then listed; and




          (b) The completion of any registration or other qualification of such Shares under any state
or federal law or under the rulings or regulations of the Securities and Exchange Commission or any
other governmental regulatory body, if any such registration or qualification may be necessary or
advisable; and




          (c) The obtaining of any approval or other clearance from any state or federal governmental
agency which may be necessary or advisable; and




          (d) The payment to the Company (or other employer corporation) of all amounts which it is
required to withhold under federal, state or local law in connection with the exercise of the
Option; and




          (e) The lapse of such reasonable period of time following the exercise of the Option as the
Secretary of the Company may establish from time to time for reasons of administrative convenience.




ARTICLE VI




ADMINISTRATION




7









 





Section 6.1 — Committee




          The Plan shall be administered by the Committee which shall consist of two or more members of
the Board, as the Board may appoint from time to time; provided, however that, in the absence of
such appointment, the Plan shall be administered by the Board (in which event the term “Committee”
as used herein shall mean the Board); provided, further, however, that, notwithstanding the
foregoing, the Plan shall be construed, interpreted, implemented and administered in a manner
sufficient to comply with the provisions of Rule 16b-3, and, in particular, in order to provide
that the members of the Committee shall at all times satisfy the requirements set forth therein.




Section 6.2 — Duties and Powers of Committee




          It shall be the duty of the Committee to conduct the general administration of the Plan in
accordance with its provisions. The Committee shall have the power to interpret the Plan and the
Options and to adopt such rules for the administration, interpretation and application of the Plan
as are consistent therewith and to interpret, amend or revoke any such rules.




Section 6.3 — Majority Rule




          The Committee shall act by a majority of its members in office. The Committee may act either
by vote at a meeting or by a memorandum or other written instrument signed by a majority of the
Committee.




Section 6.4 — Compensation; Professional Assistance; Good Faith Actions




          Members of the Committee shall receive such compensation for their services as members as may
be determined by the Board. All expenses and liabilities incurred by members of the Committee in
connection with the administration of the Plan shall be borne by the Company. The Committee may
employ attorneys, consultants, accountants, appraisers, brokers or other persons. The Committee,
the Company and its Officers and Directors shall be entitled to rely upon the advice, opinions or
valuations of any such persons. All actions taken and all interpretations and determinations made
by the Committee in good faith shall be final and binding upon all Optionees, the Company and all
other interested persons. No member of the Committee shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan or the Options, and all
members of the Committee shall be fully protected by the Company in respect to any such action,
determination or interpretation.




ARTICLE VII




OTHER PROVISIONS




Section 7.1 — Options Not Transferable




          Except as set forth in Section 5.1 hereof, no Option or interest or right therein or part
thereof shall be liable for the debts, contracts or engagements of the Optionee or his successors
in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or
by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void
and of no effect; provided, however, that nothing in this Section 7.1 shall prevent transfers by
will or by the applicable laws of descent and distribution.




Section 7.2 — Amendment, Suspension or Termination of the Plan




          The Plan may be wholly or partially amended or otherwise modified, suspended or terminated at
any time or from time to time by the Committee; provided, however, that no amendment or
modification which requires shareholder approval under Rule 16b-3, if any, shall be effective in
the absence of such approval. Neither the amendment, suspension nor termination of the Plan shall,
without the consent of the holder of the Option, impair any rights or obligations under any Option
theretofore granted. No Option may be granted during any period of



8









 






suspension nor after termination of the Plan. The Plan shall terminate and no Option be granted
under this Plan after December 31, 2017.




Section 7.3 — Approval of Plan by Shareholder(s)




          This Plan will be submitted for the approval of the Company’s shareholder(s) within 12 months
after the date of the Board’s initial adoption of the Plan. No Options shall be granted prior to
such shareholder approval. The Company shall take such actions with respect to the Plan as may be
necessary to satisfy the requirements of Rule 16b-3(b).




Section 7.4 — Effect of Plan Upon Other Option and Compensation Plans




          The adoption of this Plan shall not affect any other compensation or incentive plans in effect
for the Company, any Parent Corporation or any Subsidiary. Nothing in this Plan shall be construed
to limit the right of the Company, any Parent Corporation or any Subsidiary to (a) establish any
other forms of incentives or compensation for employees and Directors of the Company, any Parent
Corporation or any Subsidiary or (b) grant or assume options otherwise than under this Plan in
connection with any proper corporate purpose, including, but not by way of limitation, the grant or
assumption of options in connection with the acquisition by purchase, lease, merger, consolidation
or otherwise, of the business, stock or assets of any corporation, firm or association.




Section 7.5 — Titles




          Titles are provided herein for convenience only and are not to serve as a basis for
interpretation or construction of the Plan.




Section 7.6 — Conformity to Securities Laws and Section 409A(d) of the Code




          The Plan is intended to conform to the extent necessary with all provisions of the Securities
Act and the Exchange Act and any and all regulations and rules promulgated by the Securities and
Exchange Commission thereunder, including without limitation Rule 16b-3, as well as of Section
409A(d) of the Code. Notwithstanding anything herein to the contrary, the Plan shall be
administered, and Options shall be granted and may be exercised, only in such a manner as to
conform to such laws, rules and regulations. To the extent permitted by applicable law, the Plan
and Options granted hereunder shall be deemed amended to the extent necessary to conform to such
laws, rules and regulations.





9