a10100amendedandrestated






  1  7416397.3  AMENDED AND RESTATED 2020 LTI TSR PERFORMANCE SHARE AWARD AGREEMENT     This Amended and Restated Agreement (this "Agreement") is deemed effective as of  July 1, 2020 (the "Grant Date") by and between PFSWEB, INC., a Delaware corporation (the  "Company") and the individual identified as the Grantee on the Award Certificate provided to the  Grantee (the "Grantee"). This Agreement was amended and restated to include a “Change in  Control” definition.   WHEREAS, the Company has adopted the 2020 Stock and Incentive Plan (the "Plan," terms  defined in the Plan having the same meaning when so used herein) pursuant to which Performance Share  Awards may be granted; and     WHEREAS, the Committee has approved the issuance of the Performance Share Award  provided for herein.     NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:    1. Definitions.  The following terms (not otherwise defined herein), when used in this  Agreement, shall have the following meanings, unless the context clearly requires otherwise (such  definitions to be equally applicable to both the singular and plural of the defined terms).    “Achievement Level” shall be determined for each Performance Period by calculating the TSR  for the Company and each company in the Comparison Group and then ranking the TSR values from low  to high (with the company having the lowest TSR being ranked number 1, the company with the second  lowest TSR ranked number 2 and so on) and determining the Company’s percentile rank based upon its  position in the list by dividing the Company’s position by the total number of companies (including the  Company) in the Comparison Group and rounding the quotient to the nearest hundredth. For example, if  the Company were ranked 60 on a list of 80 companies (including the Company), its percentile rank  would be the 75th percentile. For purposes of the foregoing, the determination of the Achievement Level  percentile shall be rounded to the nearest whole number (e.g., the 49.75th percentile shall be rounded to  the 50th percentile).     “Annual Percentage” means the percentage so designated in the Award Certificate of the  Grantee.  “Annual Performance Period” means, as applicable (i) the period from the Grant Date to  December 31, 2020 (the “First Performance Period”), (ii) the period from January 1, 2021 to December  31, 2021 (the “Second Performance Period”), and (iii) the period from January 1, 2022 to December 31,  2022 (the “Third Performance Period”).  “Award Percentage” means the following based upon the corresponding Achievement Level:  Achievement Level Award Percentage     Less than 40th percentile 0%  40th percentile 50%  60th percentile  100%  80th percentile or above 130%    





 






  2  7416397.3  If the Achievement Level is above the 50th percentile and below the 75th percentile, the Award Percentage  shall be determined by linear interpolation.    “Cause” shall mean: (i) Grantee’s failure to follow the reasonable instructions of his/her  manager, the CEO or the Board of Directors of the Company; (iii) misconduct on Grantee’s part that is  materially injurious to the Employer or PFSweb, monetarily or otherwise, including misappropriation of  trade secrets, fraud, or embezzlement; (iv) Executive’s conviction for fraud or any other felony or a crime  involving dishonesty or moral turpitude; or (v) if Executive continually exhibits in regard to the Executive  employment unavailability for service or habitual neglect or (vi) the Executive’s substantial or material  failure or refusal to perform according to, or comply with, the policies, procedures or practices established  by the Company or the Board. For purposes of 65 (a) (i), (ii), (v) and (vi) above,  Employer will provide  written notification of Cause event to Executive and Executive will have 30 days  to address and cure  such Cause event in a manner acceptable to Employer.  “Change in Control” shall mean the (i) upon the merger or consolidation of the Company with,  or the sale of all or substantially all of the assets of the Company to, any other corporation or other entity,  in each case, unless, following such merger, consolidation or sale (A) the voting securities of the  Company outstanding immediately prior thereto continue to represent (either by remaining outstanding or  by being converted into voting securities of the surviving or purchasing entity (the “Surviving Entity”))  more than fifty percent (50%) of the combined voting power of the voting securities of the Company or  the Surviving Entity outstanding immediately after such merger, consolidation or sale; and (B) at least a  majority of the members of the board of directors of the Surviving Entity were Incumbent Directors at the  time of the execution of the initial agreement, or of the action of the Board, providing for such merger,  consolidation or sale; or (ii) sale of an operating business segment of the Company for which the  Employee is designated or allocated to perform services or is otherwise employed under.  “Comparison Group” means, for each Performance Period, the companies that are included in  the Index as of the first and last day of the Performance Period (except as otherwise set forth in the  definition of TSR).  “Cumulative Percentage” means the percentage so designated in the Award Certificate.    “Cumulative Performance Period” means, as applicable (i) the period from the Grant Date to  December 31, 2022, and (ii) the period from the Grant Date to December 31, 2023.  “Fiscal Year” shall mean the 12-consecutive-month period beginning on January 1 and ending  on December 31, so that, by way of example, Fiscal Year 2020 shall mean the 12-consecutive-month  period beginning on January 1, 2020 and ending on December 31, 2020.  “Index” means the Russell Microcap Index, as issued by Russell Investments, Inc., or, if such  Index is no longer published or the Committee determines that such Index no longer appropriately  represents the Company’s peer group (as measured by market capitalization), such other index as the  Committee shall determine in its sole discretion.   “Performance Period” means the Annual Performance Period and/or the Cumulative  Performance Period, as applicable.  “Severance Period” shall mean the period following the termination of the Grantee’s  employment by the Company during which the Grantee is entitled to continue to receive his or her base  compensation pursuant to a written severance agreement.  





 






  3  7416397.3  “Target Shares” means the number of Performance Shares so designated in the Award  Certificate.  “TSR” means total shareholder return as applied to the Company or any company in the  Comparison Group, as determined by calculating its stock price appreciation or depreciation from the  beginning to the end of the Performance Period, plus dividends and distributions made or declared  (assuming such dividends or distributions are reinvested in the common stock of the Company or any  company in the Comparison Group) during the Performance Period, expressed as a positive or negative  percentage return (adjusted for any changes in capital structure).    For purposes of computing TSR:   (a) The stock price at the beginning of the Performance Period will be (i) for the First  Performance Period, the closing price on the Grant Date, (ii) for the Second Performance Period, the  simple arithmetic average of the daily closing price of a share of common stock over the 20 consecutive  trading days ending on the last trading day of the First Performance Period, and (iii) for the Third  Performance Period, the simple arithmetic average of the daily closing price of a share of common stock  over the 20 consecutive trading days ending on the last trading day of the Second Performance Period.   (b) The stock price at the end of the Performance Period will be the simple arithmetic  average of the daily closing price of a share of common stock over the 20 trading days ending on the last  trading day of the Performance Period.    2. Grant of Performance Share Award. Pursuant to the Plan, and subject to the terms and  provisions hereof, the Company hereby issues to the Grantee on the Grant Date a Performance Share  Award for the number of Performance Shares to be determined as follows:     2.1 The number of Performance Shares which vest for each Annual Performance Period shall  be determined by the following formula: (number of Target Shares)(1/3)(Annual  Percentage)(Award Percentage for such Annual Performance Period).    2.2 The number of Performance Shares which vest for each Cumulative Performance Period  shall be determined by the following formula: (number of Target Shares)(1/2)(Cumulative  Percentage)(Award Percentage for such Cumulative Performance Period).    2.3 Each Performance Share Award represents the right to receive one share of Common  Stock, subject to the terms and conditions set forth in this Agreement and the Plan. Prior to settlement of  any vested Performance Share Award, such Performance Shares will represent an unsecured obligation of  the Company, payable (if at all) only from the general assets of the Company. The Company's obligations  under this Agreement shall be unfunded and unsecured, and no special or separate fund shall be  established and no other segregation of assets shall be made and the Grantee shall have no greater rights  than an unsecured general creditor of the Company.       3. Vesting.    3.1 The Grantee shall have no vested right in any Performance Shares for any Performance  Period unless (i) the Grantee retains his or her Continuous Status as a Participant from the first day  through the last day of such Performance Period and (ii) the Committee certifies the Achievement Level  for such Performance Period. The achievement of the Achievement Level, as evidenced by such  certification by the Committee, shall be construed by all parties as a condition related to the purpose of  the compensation for purposes of Section 409A of the Code. Subject to the provisions set forth herein, for  





 






  4  7416397.3  each Performance Period, vesting shall be deemed to occur as of the day following the last day of each  Performance Period.    3.2 The foregoing vesting schedule notwithstanding:     (a) Upon the termination of the Grantee’s employment by the Company without  Cause or if the Grantee’s employment by the Company is terminated by the Grantee for Good  Reason, then (i) if applicable, for purposes of Section 3.1(i) of this Agreement, the Grantee shall  be deemed employed by the Company through the last day of any Severance Period which shall  be deemed the last day of the Grantee’s Continuous Status as a Participant, and (ii) for the Fiscal  Year in which such termination occurs (as determined in accordance with the preceding clause  (i)), the Grantee shall be entitled to issuance of a number of Target Shares equal to the product  obtained by multiplying the number of Target Shares which the Grantee would have received  hereunder, if any, subject to and based upon the Achievement Level for such Fiscal Year, but for  the termination of his or her employment, multiplied by a fraction, the numerator is which the  number of days the Grantee is employed (or deemed employed as aforesaid) by the Company  during such Fiscal Year and the denominator of which is 365, and (iii) all other unvested Target  Shares hereunder shall be deemed terminated and forfeited. For the avoidance of doubt, for  purposes of this clause (a), to the extent the first day of a Severance Period is in one Fiscal Year  and the last day of such Severance Period is in the following Fiscal Year, the Grantee shall be  deemed employed (1) during the entirety of such first Fiscal Year and (2) for that portion of the  following Fiscal Year which corresponds to the Severance Period applicable thereto.        (b) Upon termination of employment as the result of the death or Disability of the  Grantee, then, for the Fiscal Year in which such termination occurs and each Fiscal Year  thereafter during each Performance Period, the heirs or estate of the deceased Grantee or the  Disabled Grantee shall be entitled to issuance of a number of Target Shares equal to the number  of Target Shares which the Grantee would have received hereunder, if any, subject to and based  upon the Achievement Level for such Fiscal Year, but for the termination of his or her  employment.         (c) Notwithstanding the provisions of Sections 3.2(a) or (b), upon the occurrence of  a Change in Control during any Annual Performance Period, the effective date of the Change in  Control shall be deemed the last day of the Annual Performance Period and Cumulative  Performance Period for the Fiscal Year in which the Change in Control occurs and for each Fiscal  Year thereafter, and (i) the Grantee shall be deemed vested in and entitled to issuance of a number  of Target Shares equal to the number of Target Shares which the Grantee would have received  hereunder, if any, subject to and based upon the Achievement Level for such Fiscal Year(s)  assuming that the effective date of the Change in Control is the last day of the Annual  Performance Period and Cumulative Performance Period for the Fiscal Year in which the Change  in Control occurs and for each Fiscal Year thereafter, such vesting to be deemed to have occurred  at such time as may be necessary or required in order for the Grantee to be deemed the lawful  owner and holder of record as of the effective date and time of the Change in Control, and (ii)  except as set forth in the preceding clause, all other unvested Performance Shares hereunder shall  be deemed terminated  as of the effective date and time of the Change in Control.    3.3 The Committee shall determine and certify the Achievement Level for each Performance  Period as soon as administratively practicable following the last day of each Performance Period and such  determination shall be final and binding on all parties and shall be deemed effective as of the day  following the last day of the applicable Performance Period. Subject to the vesting conditions set forth  herein, the Company shall, not later than the last day of the Fiscal Year following the applicable  





 






  5  7416397.3  Performance Period, (a) issue and deliver to the Grantee the number of shares of Common Stock equal to  the number of vested Performance Shares (rounded up to the nearest whole share); and (b) enter the  Grantee's name on the books of the Company as the shareholder of record with respect to the shares of  Common Stock delivered to the Grantee (which entry shall be deemed made as of the day following the  last day of each applicable Performance Period notwithstanding any later delivery of the corresponding  shares of Common Stock). Subject to the provisions of the preceding clause (b) of this Section 3.3 and the  provisions of Section 15 below, any shares of Stock to be issued under (i) under Section 3.2(a) or (b)  above shall be issued no later than March 15 following the last day of the Fiscal Year in which the  Grantee (or heirs or estate thereof) is deemed vested therein, and (ii) under Section 3.2(c) above shall be  issued no later than such time as may be necessary or required in order for the Grantee to be deemed the  lawful owner and holder of record of the shares of Stock to be issued thereunder as of the effective date  and time of the Change in Control.     4. Restrictions. Subject to any exceptions set forth in this Agreement or the Plan, until the  vesting thereof, the unvested Performance Shares or the rights relating thereto may not be assigned,  alienated, pledged, attached, sold or otherwise transferred or encumbered by the Grantee. Any attempt to  assign, alienate, pledge, attach, sell or otherwise transfer or encumber the unvested Performance Shares or  the rights relating thereto shall be wholly ineffective and, if any such attempt is made, the unvested  Performance Shares will be forfeited by the Grantee and all of the Grantee's rights to shares issuable  thereunder shall immediately terminate without any payment or consideration by the Company.    5. No Rights as Shareholder; Dividends.    5.1 The Grantee shall have no rights in, to or under the shares of Stock to be issued upon the  vesting of the Performance Shares unless and until the vesting conditions set forth herein are satisfied  and, until such date, shall have no rights of a shareholder of the Company including, without limitation,  no right to vote such shares and no right to receive any dividends or other distributions paid with respect  to such shares. Notwithstanding the foregoing, if during any Fiscal Year, the Company declares a  dividend or distribution, whether in cash or other property, then, concurrent with the issuance of the  shares of Stock, if any, to the Grantee for such Fiscal Year, the Company shall pay to the Grantee that  amount of cash or other property which the Grantee would have received had the Grantee been the record  holder of such shares of Stock on the record date for such dividend or distribution.     5.2 Upon vesting of the Performance Shares, the Company may issue stock certificates or  evidence the Grantee's interest therein by using a book entry account with the Company's transfer agent.    6. Provisions of Plan.      6.1 Adjustments. If any change is made to the outstanding Stock or the capital structure of the  Company, the shares of Stock to be issued hereunder shall be adjusted or terminated in any manner as  contemplated by Article 15 of the Plan.   6.2 Tax Liability and Withholding. The Grantee shall be required to pay to the Company, and  the Company shall have the right to deduct from the shares of Stock to be issued upon the vesting of the  Performance Shares hereunder, the amount of any required withholding taxes in respect of the shares of  Stock to be issued upon the vesting of the Performance Shares and to take all such other action as the  Company deems necessary to satisfy all obligations for the payment of such withholding taxes.   6.3 Except as provided herein, the provisions of this Agreement shall be subject to the  provisions of the Plan, which are hereby incorporated herein by reference and made part hereof.  The  Grantee acknowledges and agrees that he or she has been provided with and has read the Plan and  





 






  6  7416397.3  understands the provisions thereof.  In the event of any conflict between the terms of the Plan and the  terms of this Agreement, the terms of the Plan shall take precedence, other than for such provisions of the  Plan which, by their terms, are subject to the provisions of an Award Certificate.  7. No ERISA Plan.  Neither this Agreement nor the award of the Performance Shares  hereunder shall be construed by any party as being subject to any provisions of ERISA, and shall not be  so subject.  Without in any way limiting the generality of the foregoing, the Performance Shares awarded  hereunder shall constitute a mere unfunded promise to pay by the Company and a bonus program within  the meaning of Department of Labor Regulation Section 2510.3-2(c) promulgated under ERISA.  8. Compliance with Law. The issuance of shares of Stock hereunder shall be subject to  compliance by the Company and the Grantee with all applicable requirements of federal and state  securities laws and with all applicable requirements of any stock exchange on which the Company's  shares of Stock may be listed. No shares of Stock shall be issued or transferred unless and until any then  applicable requirements of state and federal laws and regulatory agencies have been fully complied with  to the satisfaction of the Company and its counsel.  9. Notices.  Any notice required to be delivered to the Company under this Agreement shall  be in writing and addressed to the Secretary of the Company at the Company’s principal corporate  offices.  Any notice required to be delivered to the Grantee under this Agreement shall be in writing and  addressed to the Grantee at the Grantee’s address as shown in the records of the Company.  Either party  may designate another address in writing (or by such other method approved by the Company) from time  to time.  10. Parachute Payments and Parachute Awards.  If the Grantee is a “disqualified  individual,” as defined in paragraph (c) of Code Section 280G, then, notwithstanding any other provision  of this Agreement or of any other agreement, contract, or understanding heretofore entered into by the  Grantee and the Company (an “Other Agreement”), except an agreement, contract, or understanding that  expressly addresses Code Section 280G or Code Section 4999 (a “280G Agreement”), and  notwithstanding any formal or informal plan or other arrangement for the direct or indirect provision of  compensation to the Grantee (or an employee group of which the Grantee is a member), whether or not  such compensation is deferred, is in cash, or is in the form of a benefit to or for the Grantee (a “Benefit  Arrangement”), if any of the payments or benefits provided or to be provided by the Company or its  affiliates to the Grantee or for the Grantee’s benefit pursuant to the terms of this Agreement, all Other  Agreements and all Benefit Arrangements ("Covered Payments") constitute parachute payments  ("Parachute Payments") within the meaning of Code Section 280G and would, but for this Section, be  subject to the excise tax imposed under Section 4999 of the Code (or any successor provision thereto) or  any similar tax imposed by state or local law or any interest or penalties with respect to such taxes  (collectively, the "Excise Tax"), then prior to making the Covered Payments, a calculation shall be made  comparing (i) the Net Benefit (as defined below) to the Grantee of the Covered Payments after payment  of the Excise Tax to (ii) the Net Benefit to the Grantee if the Covered Payments are limited to the extent  necessary to avoid being subject to the Excise Tax. Only if the amount calculated under (i) above is less  than the amount under (ii) above will the Covered Payments be reduced to the minimum extent necessary  to ensure that no portion of the Covered Payments is subject to the Excise Tax (that amount, the "Reduced  Amount"). "Net Benefit" shall mean the present value of the Covered Payments net of all federal, state,  local, foreign income, employment and excise taxes. Any such reduction shall be made in accordance  with Section 409A of the Code and the following: (i) the Covered Payments which do not constitute  nonqualified deferred compensation subject to Section 409A of the Code shall be reduced first; and (ii)  the Covered Payments shall be reduced in a manner that maximizes the Grantee's economic position. In  applying this principle, the reduction shall be made in a manner consistent with the requirements of  Section 409A of the Code, and where two economically equivalent amounts are subject to reduction but  





 






  7  7416397.3  payable at different times, such amounts shall be reduced on a pro rata basis but not below zero. The  foregoing shall not be interpreted so as to restrict, reduce, amend or modify any of the existing terms and  provisions of any 280G Agreement to which the Grantee and the Company may be a party and any  payment hereunder shall be entitled to the benefits thereof.  11. Severability.  If any provision of this Agreement is determined by a court of competent  jurisdiction to be unenforceable, such determination shall not affect the remaining provisions of this  Agreement, which shall be enforced to the maximum extent permitted under applicable law.  12. Modification.  Subject to the provisions of the Plan, this Agreement may be modified  only in writing pursuant to an agreement by and between the Company and the Grantee.  13. Headings.  The headings contained herein are for convenience of reference only and  shall not be construed by any party as having any substantive significance.  14. Clawback. Notwithstanding any other provisions in this Agreement, this Award is  subject to recovery under any current or future law, government regulation or stock exchange listing  requirement, and is subject to such deductions and clawback as may be required to be made pursuant to  such law, government regulation or stock exchange listing requirement (or any policy adopted by the  Company at any time pursuant to any such law, government regulation or stock exchange listing  requirement).   15. Section 409A of the Code.  If the Grantee is deemed a "specified employee" within the  meaning of Section 409A of the Code, as determined by the Committee, at a time when the Grantee  becomes eligible for settlement of the Performance Shares upon his/her "separation from service" within  the meaning of Section 409A of the Code, then to the extent necessary to prevent any accelerated or  additional tax under Section 409A of the Code, such settlement will be delayed until the earlier of: (i) the  date that is six months following the Grantee's separation from service and (ii) the Grantee's death.   It is  the intent that this Performance Share Award shall comply with the requirements of Section 409A, and  any ambiguities herein will be interpreted to so comply. The Company reserves the right, to the extent the  Company deems necessary or advisable in its sole discretion, to unilaterally amend or modify this  Agreement as may be necessary to ensure that all vesting or payouts provided under this Agreement are  made in a manner that complies with Section 409A or to mitigate any additional tax, interest and/or  penalties or other adverse tax consequences that may apply under Section 409A if compliance is not  practical; provided, however, that nothing in this paragraph creates an obligation on the part of the  Company to modify the terms of this Agreement or the Plan, and the Company makes no representation  that the terms of this Performance Share Award Agreement will comply with Section 409A or that  payments under this Performance Share Award Agreement will not be subject to taxes, interest and  penalties or other adverse tax consequences under Section 409A. In no event shall the Company or any of  its Subsidiaries be liable to any party for any additional tax, interest or penalties that may be imposed on  the Grantee by Section 409A or any damages for failing to comply with Section 409A.    17. Execution and Counterparts.  This Agreement shall be deemed effective as of the Grant  Date upon the delivery to the Employee of the Award Certificate hereto (or information contained  therein), by electronic or other means of transmission, and such effectiveness shall not require any  counterpart signature of the Employee.  





 






  8  7416397.3      SIGNATURE PAGE TO 2021 LTI TSR EXECUTIVE PERFORMANCE SHARE AWARD  AGREEMENT    Name of Grantee:      Target Shares:      Annual Percentage:      Cumulative Percentage:             PFSweb, Inc.           By:              Michael Willoughby        Chief Executive Officer                              Signature of Grantee