Document:

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.

12

 

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

13

 

	 	 	 	 	 
	 	 	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

14

 

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 	 
	 

18exv10w2

 

Exhibit 10.2

GSI COMMERCE, INC.

2005 EQUITY INCENTIVE PLAN, AS AMENDED

Approved By Board on: March 8, 2005

Approved By Stockholders: June 30, 2005

Termination Date: March 8, 2015

1. GENERAL.

     (a) Eligible Stock Award Recipients. The persons eligible to receive Stock Awards are
Employees, Directors and Consultants.

     (b) Available Stock Awards. The Plan provides for the grant of the following Stock Awards:
(i) Incentive Stock Options, (ii) Nonstatutory Stock Options, (iii) Stock Purchase Awards, (iv)
Stock Bonus Awards, (v) Stock Appreciation Rights, (vi) Stock Unit Awards, and (vii) Other Stock
Awards.

     (c) General Purpose. The Company, by means of the Plan, seeks to secure and retain the
services of the group of persons eligible to receive Stock Awards as set forth in Section 1(a), to
provide incentives for such persons to exert maximum efforts for the success of the Company and any
Affiliate and to provide a means by which such eligible recipients may be given an opportunity to
benefit from increases in value of the Common Stock through the granting of Stock Awards.

2. DEFINITIONS.

     As used in the Plan, the following definitions shall apply to the capitalized terms indicated
below:

     (a) “Affiliate” means (i) any corporation (other than the Company) in an unbroken ownership
chain of corporations ending with the Company, provided each corporation in the unbroken ownership
chain owns, at the time of the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other corporations in such
ownership chain, and (ii) any corporation (other than the Company) in an unbroken ownership chain
of corporations beginning with the Company, provided each corporation (other than the last
corporation) in the unbroken ownership chain owns, at the time of the determination, stock
possessing fifty percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such ownership chain. The Board shall have the authority to
determine (x) the time or times at which the ownership tests are applied, and (y) whether
“Affiliate” includes entities other than corporations within the foregoing definition.

     (b) “Board” means the Board of Directors of the Company.

     (c) “Capitalization Adjustment” has the meaning ascribed to that term in Section 12(a).

     (d) “Cause” means with respect to a Participant, the occurrence of any of the following: (i)
such Participant’s commission of any felony or any crime involving fraud, dishonesty or moral
turpitude under the laws of the United States or any state thereof; (ii) such Participant’s
attempted commission of, or participation in, a fraud or act of dishonesty against the Company;
(iii) such Participant’s intentional, material violation of any material contract or agreement
between the Participant and the Company or of the Company’s code of Business Conduct or any of the
Company’s policies or of any statutory duty owed to the Company; (iv) such Participant’s
unauthorized use or disclosure of the Company’s confidential information or trade secrets; or (v)
such Participant’s engaging in conduct which is inimical or injurious, in a material respect, to
the business or interests of the Company. The determination that a termination of the Participant’s
Continuous Service is either for Cause or without Cause shall be made by the Company in its sole
discretion. Any determination by the Company that the Continuous Service of a Participant was
terminated by reason of dismissal without Cause for the purposes of outstanding Stock Awards held
by such Participant shall have no effect upon any determination of the rights or obligations of the
Company or such Participant for any other purpose.

     (e) “Change in Control” means the occurrence, in a single transaction or in a series of
related transactions, of any one or more of the following events:

     (i) any Exchange Act Person becomes the Owner, directly or indirectly, of securities of
the Company representing more than fifty percent (50%) of the combined voting power of the
Company’s then outstanding securities other than by virtue of a merger, consolidation or
similar transaction, which is covered by Section 2(e)(ii). Notwithstanding the foregoing, a
Change in Control shall not be deemed to occur (A) on

1

 

account of the acquisition of securities of the Company from the Company by an investor, any
affiliate (as such term is defined in Rule 405 of the Securities Act) thereof or any other
Exchange Act Person in a transaction or series of related transactions the primary purpose of
which is to obtain financing for the Company through the issuance of equity securities or (B)
solely because the level of Ownership held by any Exchange Act Person (the “Subject Person")
exceeds the designated percentage threshold of the outstanding voting securities as a result
of a repurchase or other acquisition of voting securities by the Company reducing the number
of shares outstanding, provided that if a Change in Control would occur (but for the operation
of this sentence) as a result of the acquisition of voting securities by the Company, and
after such share acquisition, the Subject Person becomes the Owner of any additional voting
securities that, assuming the repurchase or other acquisition had not occurred, increases the
percentage of the then outstanding voting securities Owned by the Subject Person over the
designated percentage threshold, then a Change in Control shall be deemed to occur;

     (ii) there is consummated a merger, consolidation or similar transaction involving
(directly or indirectly) the Company and, immediately after the consummation of such merger,
consolidation or similar transaction, the stockholders of the Company immediately prior
thereto do not Own, directly or indirectly, either (A) outstanding voting securities
representing more than fifty percent (50%) of the combined outstanding voting power of the
surviving Entity in such merger, consolidation or similar transaction or (B) more than fifty
percent (50%) of the combined outstanding voting power of the parent of the surviving Entity
in such merger, consolidation or similar transaction, in each case in substantially the same
proportions as their Ownership of the outstanding voting securities of the Company immediately
prior to such transaction;

     (iii) the stockholders of the Company approve or the Board approves a plan of complete
dissolution or liquidation of the Company, or a complete dissolution or liquidation of the
Company shall otherwise occur;

     (iv) there is consummated a sale, lease, exclusive license or other disposition of all or
substantially all of the consolidated assets of the Company and its Subsidiaries, other than a
sale, lease, license or other disposition of all or substantially all of the consolidated
assets of the Company and its Subsidiaries to an Entity, more than fifty percent (50%) of the
combined voting power of the voting securities of which are Owned by stockholders of the
Company in substantially the same proportions as their Ownership of the outstanding voting
securities of the Company immediately prior to such sale, lease, license or other disposition;
or

     (v) individuals who, on the date this Plan is adopted by the Board, are Directors (the
“Incumbent Board") cease for any reason to constitute at least a majority of the Directors;
provided, however, that if the appointment or election (or nomination for election) of any new
Director was approved or recommended by a majority vote of the Incumbent Board, such new
Director shall, for purposes of this Plan, be considered a member of the Incumbent Board.

     The term Change in Control shall not include a sale of assets, merger or other transaction
effected exclusively for the purpose of changing the domicile of the Company.

     Notwithstanding the foregoing or any other provision of this Plan, the definition of Change in
Control (or any analogous term) in an individual written agreement between the Company or any
Affiliate and the Participant shall supersede the foregoing definition with respect to Stock Awards
subject to such agreement where such agreement provides for acceleration of vesting of such Stock
Awards in the event of a Change in Control; provided, however, that if no definition of Change in
Control or any analogous term is set forth in such an individual written agreement, the foregoing
definition shall apply.

     (f) “Code” means the Internal Revenue Code of 1986, as amended.

     (g) “Committee” means a committee of one (1) or more Directors to whom authority has been
delegated by the Board in accordance with Section 3(c).

     (h) “Common Stock” means the common stock of the Company.

     (i) “Company” means GSI Commerce, Inc., a Delaware corporation.

     (j) “Consultant” means any person, including an advisor, who is (i) engaged by the Company or
an Affiliate to render consulting or advisory services and is compensated for such services, or
(ii) serving as a member of the Board of Directors of an Affiliate and is compensated for such
services. However, service solely as a Director, or payment of a fee for such service, shall not
cause a Director to be considered a “Consultant” for purposes of the Plan.

2

 

     (k) “Continuous Service” means that the Participant’s service with the Company or an
Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. A
change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Consultant or
Director 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 an
Affiliate, shall not terminate a Participant’s Continuous Service. For example, a change in status
from an employee of the Company to a consultant to an Affiliate or to a Director shall not
constitute an interruption of Continuous Service. To the extent permitted by law, the Board or the
chief executive officer of the Company, in that party’s sole discretion, may determine whether
Continuous Service shall be considered interrupted in the case of any leave of absence approved by
that party, including sick leave, military leave or any other personal leave. Notwithstanding the
foregoing, a leave of absence shall be treated as Continuous Service for purposes of vesting in a
Stock Award only to such extent as may be provided in the Company’s leave of absence policy, in the
written terms of any leave of absence agreement or policy applicable to the Participant, or as
otherwise required by law.

     (l) “Corporate Transaction” means the occurrence, in a single transaction or in a series of
related transactions, of any one or more of the following events:

     (i) a sale or other disposition of all or substantially all, as determined by the Board
in its sole discretion, of the consolidated assets of the Company and its Subsidiaries;

     (ii) a sale or other disposition of at least ninety percent (90%) of the outstanding
securities of the Company;

     (iii) the consummation of a merger, consolidation or similar transaction following which
the Company is not the surviving corporation; or

     (iv) the consummation of a merger, consolidation or similar transaction following which
the Company is the surviving corporation but the shares of Common Stock outstanding
immediately preceding the merger, consolidation or similar transaction are converted or
exchanged by virtue of the merger, consolidation or similar transaction into other property,
whether in the form of securities, cash or otherwise.

     (m) “Covered Employee” shall have the meaning provided in Section 162(m)(3) of the Code and
the regulations promulgated thereunder.

     (n) “Director” means a member of the Board.

     (o) “Disability” means the permanent and total disability of a person within the meaning of
Section 22(e)(3) of the Code.

     (p) “Effective Date” means the effective date of this Plan document, which is the date that
this Plan is first approved by the Company’s stockholders.

     (q) “Employee” means any person employed by the Company or an Affiliate. However, service
solely as a Director, or payment of a fee for such services, shall not cause a Director to be
considered an “Employee” for purposes of the Plan.

     (r) “Entity” means a corporation, partnership, limited liability company or other entity.

     (s) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     (t) “Exchange Act Person” means any natural person, Entity or “group” (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” shall not include
(i) the Company or any Affiliate, (ii) any employee benefit plan of the Company or any Affiliate or
any trustee or other fiduciary holding securities under an employee benefit plan of the Company or
any Affiliate, (iii) an underwriter temporarily holding securities pursuant to an offering of such
securities, (iv) an Entity Owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their Ownership of stock of the Company; or (v) any natural
person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that,
as of the Effective Date, is the Owner, directly or indirectly, of securities of the Company
representing more than fifty percent (50%) of the combined voting power of the Company’s then
outstanding securities.

     (u) “Fair Market Value” means, as of any date, the value of the Common Stock determined as
follows:

     (i) If the Common Stock is listed on any established stock exchange or traded on the
Nasdaq National Market or the Nasdaq SmallCap Market, the Fair Market Value of a share of
Common Stock shall be the closing sales price for such stock (or the closing bid, if no sales
were reported) as quoted on such exchange or market (or the exchange or market with the
greatest volume of trading in the Common Stock) on the date in

3

 

question, as reported in The Wall Street Journal or such other source as the Board deems reliable. Unless otherwise
provided by the Board, if there is no closing sales price (or closing bid if no sales were
reported) for the Common Stock on the date in question, then the Fair Market Value shall be the closing
selling price (or closing bid if no sales were reported) on the last preceding date for which
such quotation exists.

     (ii) In the absence of such markets for the Common Stock, the Fair Market Value shall be
determined by the Board in good faith.

     (v) “Incentive Stock Option” means an Option intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code and the regulations promulgated thereunder.

     (w) “Non-Employee Director” means a Director who either (i) is not a current employee or
officer of the Company or an Affiliate, does not receive compensation, either directly or
indirectly, from the Company or an Affiliate for services rendered as a consultant or in any
capacity other than as a Director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act
(“Regulation S-K”)), does not possess an interest in any other transaction for which disclosure
would be required under Item 404(a) of Regulation S-K, and is not engaged in a business
relationship for which disclosure would be required pursuant to Item 404(b) of Regulation S-K; or
(ii) is otherwise considered a “non-employee director” for purposes of Rule 16b-3.

     (x) “Nonstatutory Stock Option” means any Option other than an Incentive Stock Option.

     (y) “Officer” means a person who is an officer of the Company within the meaning of Section 16
of the Exchange Act and the rules and regulations promulgated thereunder.

     (z) “Option” means an Incentive Stock Option or a Nonstatutory Stock Option to purchase shares
of Common Stock granted pursuant to the Plan.

     (aa) “Option Agreement” means a written agreement between the Company and an Optionholder
evidencing the terms and conditions of an Option grant. Each Option Agreement shall be subject to
the terms and conditions of the Plan.

     (bb) “Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if
permitted under the terms of this Plan, such other person who holds an outstanding Option.

     (cc) “Other Stock Award” means an award based in whole or in part by reference to the Common
Stock which is granted pursuant to the terms and conditions of Section 7(e).

     (dd) “Other Stock Award Agreement” means a written agreement between the Company and a holder
of an Other Stock Award evidencing the terms and conditions of an Other Stock Award grant. Each
Other Stock Award Agreement shall be subject to the terms and conditions of the Plan.

     (ee) “Outside Director” means a Director who either (i) is not a current employee of the
Company or an “affiliated corporation” (within the meaning of Treasury Regulations promulgated
under Section 162(m) of the Code), is not a former employee of the Company or an “affiliated
corporation” who receives compensation for prior services (other than benefits under a
tax-qualified retirement plan) during the taxable year, has not been an officer of the Company or
an “affiliated corporation,” and does not receive remuneration from the Company or an “affiliated
corporation,” either directly or indirectly, in any capacity other than as a Director, or (ii) is
otherwise considered an “outside director” for purposes of Section 162(m) of the Code.

     (ff) “Own,” “Owned,” “Owner,” “Ownership” A person or Entity shall be deemed to “Own,” to have
“Owned,” to be the “Owner” of, or to have acquired “Ownership” of securities if such person or
Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or
otherwise, has or shares voting power, which includes the power to vote or to direct the voting,
with respect to such securities.

     (gg) “Participant” means a person to whom a Stock Award is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Stock Award.

     (hh) “Performance Criteria” means the one or more criteria that the Board shall select for
purposes of establishing the Performance Goals for a Performance Period. The Performance Criteria
that shall be used to establish such Performance Goals may be based on any one of, or combination
of, the following: (i) earnings per share; (ii) earnings before interest and taxes; (iii) earnings
before interest, taxes and depreciation and/or amortization; (iv) total stockholder return; (v)
return on equity; (vi) return on assets, investment, or capital employed; (vii) operating margin;
(viii) gross margin; (ix) operating income; (x) net income (before or after taxes); (xi) net
operating income; (xii) net operating income after tax; (xiii) pre-tax profit; (xiv) operating cash
flow;

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(xv) sales or revenue targets; (xvi) increases in revenue or product revenue; (xvii) expenses
and cost reduction goals;
(xviii) improvement in or attainment of working capital levels; (xix) economic value added (or
an equivalent metric); (xx) market share; (xxi) cash flow; (xxii) cash flow per share; (xxiii)
share price performance; (xxiv) debt reduction; (xxv) implementation or completion of projects or
processes; (xxvi) customer satisfaction; (xxvii) stockholders’ equity; and (xxviii) other measures
of performance selected by the Board. Partial achievement of the specified criteria may result in
the payment or vesting corresponding to the degree of achievement as specified in the Stock Award
Agreement. The Board shall, in its sole discretion, define the manner of calculating the
Performance Criteria it selects to use for such Performance Period.

     (ii) “Performance Goals” means, for a Performance Period, the one or more goals established by
the Board for the Performance Period based upon the Performance Criteria. The Board is authorized
at any time in its sole discretion, to adjust or modify the calculation of a Performance Goal for
such Performance Period in order to prevent the dilution or enlargement of the rights of
Participants (i) in the event of, or in anticipation of, any unusual or extraordinary corporate
item, transaction, event or development; (ii) in recognition of, or in anticipation of, any other
unusual or nonrecurring events affecting the Company, or the financial statements of the Company,
or in response to, or in anticipation of, changes in applicable laws, regulations, accounting
principles, or business conditions; or (iii) in view of the Board’s assessment of the business
strategy of the Company, performance of comparable organizations, economic and business conditions,
and any other circumstances deemed relevant. Specifically, the Board is authorized to make
adjustment in the method of calculating attainment of Performance Goals and objectives for a
Performance Period as follows: (x) to exclude the dilutive effects of acquisitions or joint
ventures; (y) to assume that any business divested by the Company achieved performance objectives
at targeted levels during the balance of a Performance Period following such divestiture; and (z)
to exclude the effect of any change in the outstanding shares of Common Stock by reason of any
stock dividend or split, stock repurchase, reorganization, recapitalization, merger, consolidation,
spin-off, combination or exchange of shares or other similar corporate change, or any distributions
to common stockholders other than regular cash dividends. In addition, with respect to Performance
Goals established for Participants who are not Covered Employees, and who will not be Covered
Employees at the time the compensation will be paid, the Board is authorized to make adjustment in
the method of calculating attainment of Performance Goals and objectives for a Performance Period
as follows: (A) to exclude restructuring or other nonrecurring charges; (B) to exclude exchange
rate effects, as applicable, for non-U.S. dollar denominated net sales and operating earnings; (C)
to exclude the effects of changes to generally accepted accounting standards required by the
Financial Accounting Standards Board; (D) to exclude the effects to any statutory adjustments to
corporate tax rates; (E) to exclude the impact of any “extraordinary items” as determined under
generally accepted accounting principles; and (F) to exclude any other unusual, non-recurring gain
or loss or other extraordinary item.

     (jj) “Performance Period” means the period of time selected by the Board over which the
attainment of one or more Performance Goals will be measured for the purpose of determining a
Participant’s right to and the payment of a Stock Award. Performance Periods may be of varying and
overlapping duration, at the sole discretion of the Board.

     (kk) “Plan” means this GSI Commerce, Inc. 2005 Equity Incentive Plan.

     (ll) “Prior Plan” means the Company’s 1996 Equity Incentive Plan in effect immediately prior
to the Effective Date.

     (mm) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule
16b-3, as in effect from time to time.

     (nn) “Securities Act” means the Securities Act of 1933, as amended.

     (oo) “Stock Appreciation Right” means a right to receive the appreciation on Common Stock that
is granted pursuant to the terms and conditions of Section 7(d).

     (pp) “Stock Appreciation Right Agreement” means a written agreement between the Company and a
holder of a Stock Appreciation Right evidencing the terms and conditions of a Stock Appreciation
Right grant. Each Stock Appreciation Right Agreement shall be subject to the terms and conditions
of the Plan.

     (qq) “Stock Award” means any right granted under the Plan, including an Incentive Stock
Option, a Nonstatutory Stock Option, a Stock Purchase Award, Stock Bonus Award, a Stock
Appreciation Right, a Stock Unit Award, or any Other Stock Award.

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     (rr) “Stock Award Agreement” means a written agreement between the Company and a Participant
evidencing the terms and conditions of a Stock Award grant. Each Stock Award Agreement shall be
subject to the terms and conditions of the Plan.

     (ss) “Stock Bonus Award” means an award of shares of Common Stock which is granted pursuant to
the terms and conditions of Section 7(b).

     (tt) “Stock Bonus Award Agreement” means a written agreement between the Company and a holder
of a Stock Bonus Award evidencing the terms and conditions of a Stock Bonus Award grant. Each Stock
Bonus Award Agreement shall be subject to the terms and conditions of the Plan.

     (uu) “Stock Purchase Award” means an award of shares of Common Stock which is granted pursuant
to the terms and conditions of Section 7(a).

     (vv) “Stock Purchase Award Agreement” means a written agreement between the Company and a
holder of a Stock Purchase Award evidencing the terms and conditions of a Stock Purchase Award
grant. Each Stock Purchase Award Agreement shall be subject to the terms and conditions of the
Plan.

     (ww) “Stock Unit Award” means a right to receive shares of Common Stock which is granted
pursuant to the terms and conditions of Section 7(c).

     (xx) “Stock Unit Award Agreement” means a written agreement between the Company and a holder
of a Stock Unit Award evidencing the terms and conditions of a Stock Unit Award grant. Each Stock
Unit Award Agreement shall be subject to the terms and conditions of the Plan.

     (yy) “Subsidiary” means, with respect to the Company, (i) any corporation of which more than
fifty percent (50%) of the outstanding capital stock having ordinary voting power to elect a
majority of the board of directors of such corporation (irrespective of whether, at the time, stock
of any other class or classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time, directly or indirectly, Owned by the Company,
and (ii) any partnership in which the Company has a direct or indirect interest (whether in the
form of voting or participation in profits or capital contribution) of more than fifty percent
(50%).

     (zz) “Ten Percent Stockholder” means a person who Owns (or is deemed to Own pursuant to
Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or any Affiliate.

3. ADMINISTRATION.

     (a) Administration by Board. The Board shall administer the Plan unless and until the Board
delegates administration of the Plan to a Committee or Committees, as provided in Section 3(c).

     (b) Powers of Board. The Board shall have the power, subject to, and within the limitations
of, the express provisions of the Plan:

     (i) To determine from time to time (A) which of the persons eligible under the Plan shall
be granted Stock Awards; (B) when and how each Stock Award shall be granted; (C) what type or
combination of types of Stock Award shall be granted; (D) the provisions of each Stock Award
granted (which need not be identical), including the time or times when a person shall be
permitted to receive Common Stock pursuant to a Stock Award; and (E) the number of shares of
Common Stock with respect to which a Stock Award shall be granted to each such person.

     (ii) To construe and interpret the Plan and Stock Awards granted under it, and to
establish, amend and revoke rules and regulations for its administration. The Board, in the
exercise of this power, may correct any defect, omission or inconsistency in the Plan or in
any Stock Award Agreement, in a manner and to the extent it shall deem necessary or expedient
to make the Plan or Stock Award Agreement fully effective.

     (iii) To effect, at any time and from time to time, with the consent of any adversely
affected Optionholder, (A) the reduction of the exercise price of any outstanding Option under
the Plan; (B) the cancellation of any outstanding Option under the Plan and the grant in
substitution therefor of (I) a new Option under the Plan or another equity plan of the Company
covering the same or a different number of shares of Common Stock, (II) a Stock Purchase
Award, (III) a Stock Bonus Award, (IV) a Stock Appreciation Right, (V) a Stock Unit Award,
(VI) an Other Stock Award, (VII) cash, or (VIII) other valuable consideration (as determined
by the Board, in its sole discretion); or (C) any other action that is treated as a repricing
under generally accepted accounting principles.

     (iv) To settle all controversies regarding the Plan and Stock Awards granted under it.

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     (v) To amend the Plan or a Stock Award as provided in Section 13.

     (vi) To terminate or suspend the Plan as provided in Section 14.

     (vii) Generally, to exercise such powers and to perform such acts as the Board deems
necessary or expedient to promote the best interests of the Company and that are not in
conflict with the provisions of the Plan or Stock Awards.

     (viii) To adopt such procedures and sub-plans as are necessary or appropriate to permit
participation in the Plan by Employees, Directors and Consultants who are foreign nationals or
employed outside the United States.

     (c) Delegation to Committee.

     (i) General. The Board may delegate some or all of the administration of the Plan to a
Committee or Committees. If administration of the Plan is delegated to a Committee, the
Committee shall have, in connection with the administration of the Plan, the powers
theretofore possessed by the Board that have been delegated to the Committee, including the
power to delegate to a subcommittee of the Committee any of the administrative powers the
Committee is authorized to exercise (and references in this Plan to the Board shall thereafter
be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent
with the provisions of the Plan, as may be adopted from time to time by the Board. The Board
may retain the authority to concurrently administer the Plan with the Committee and may, at
any time, revest in the Board some or all of the powers previously delegated.

     (ii) Section 162(m) and Rule 16b-3 Compliance. In the sole discretion of the Board,
the Committee may consist solely of two or more Outside Directors, in accordance with Section
162(m) of the Code, or solely of two or more Non-Employee Directors, in accordance with Rule
16b-3. In addition, the Board or the Committee, in its sole discretion, may (A) delegate to a
committee of one or more Directors who need not be Outside Directors the authority to grant
Stock Awards to eligible persons who are either (I) not then Covered Employees and are not
expected to be Covered Employees at the time of recognition of income resulting from such
Stock Award, or (II) not persons with respect to whom the Company wishes to comply with
Section 162(m) of the Code, or (B) delegate to a committee of one or more Directors who need
not be Non-Employee Directors the authority to grant Stock Awards to eligible persons who are
not then subject to Section 16 of the Exchange Act.

     (d) Effect of Board’s Decision. All determinations, interpretations and constructions made
by the Board in good faith shall not be subject to review by any person and shall be final, binding
and conclusive on all persons.

     (e) Limitation of Board Member’s Liability. 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.

     (f) Company Obligations. 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 Stock Awards granted in accordance with the provisions of the
Plan, the Company shall have no liability with respect to any Stock 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.

4. SHARES SUBJECT TO THE PLAN.

     (a) Share Reserve. Subject to the provisions of Section 12(a) relating to Capitalization
Adjustments, the number of shares of Common Stock that may be issued pursuant to Stock Awards shall
not exceed, in the aggregate, five million one thousand two hundred nineteen (5,001,219) shares of
Common Stock; provided, however, that such share reserve shall be increased from time to time by a
number of shares equal to the number of shares of Common Stock that (i) are issuable pursuant to
options or stock award agreements outstanding under the Prior Plan as of the Effective Date and
(ii) but for the termination of the Prior Plan as of the Effective Date, would otherwise have
reverted to the share reserve of the Prior Plan pursuant to subsection 2.3 thereof.

     (b) Reversion of Shares to the Share Reserve. If any Stock Award shall for any reason
expire or otherwise terminate, in whole or in part, without having been exercised in full, if any
shares of Common Stock issued to a Participant pursuant to a Stock Award are forfeited to or
repurchased by the Company, including, but not limited to, any repurchase or forfeiture caused by
the failure to meet a contingency or condition required for the vesting of such shares, or if any
shares of Common Stock are cancelled in accordance with the cancellation and regrant provisions of
Section 3(b)(iii), then the shares of Common Stock not issued under such Stock Award, or forfeited
to or repurchased by the Company, shall revert to and again become available for issuance under the
Plan. If any shares

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subject to a Stock Award are not delivered to a Participant because such shares
are withheld for the payment of taxes or the Stock Award is exercised through a reduction of shares
subject to the Stock Award (i.e., “net exercised”), the
number of shares that are not delivered to the Participant shall remain available for issuance
under the Plan. If the exercise price of any Stock Award is satisfied by tendering shares of Common
Stock held by the Participant (either by actual delivery or attestation), then the number of shares
so tendered shall remain available for issuance under the Plan.

     Notwithstanding anything to the contrary in this Section 4(b), subject to the provisions of
Section 12(a) relating to Capitalization Adjustments the aggregate maximum number of shares of
Common Stock that may be issued pursuant to the exercise of Incentive Stock Options shall be four
million (4,000,000) shares of Common Stock.

     (c) Source of Shares. The stock issuable under the Plan shall be shares of authorized but
unissued or reacquired Common Stock, including shares repurchased by the Company on the open
market.

5. ELIGIBILITY.

     (a) Eligibility for Specific Stock Awards. Incentive Stock Options may be granted only to
Employees. Stock Awards other than Incentive Stock Options may be granted to Employees, Directors
and Consultants.

     (b) Ten Percent Stockholders. A Ten Percent Stockholder shall not be granted an Incentive
Stock Option unless the exercise price of such Option is at least one hundred ten percent (110%) of
the Fair Market Value of the Common Stock on the date of grant and the Option is not exercisable
after the expiration of five (5) years from the date of grant.

     (c) Section 162(m) Limitation on Annual Grants. Subject to the provisions of Section 12(a)
relating to Capitalization Adjustments, at such time as the Company may be subject to the
applicable provisions of Section 162(m) of the Code, no Employee shall be eligible to be granted
Stock Awards whose value is determined by reference to an increase over an exercise or strike price
of at least one hundred percent (100%) of the Fair Market Value of the Common Stock on the date the
Stock Award is granted covering more than two million (2,000,000) shares of Common Stock during any
calendar year.

     (d) Consultants. A Consultant shall not be eligible for the grant of a Stock Award if, at
the time of grant, a Form S-8 Registration Statement under the Securities Act (“Form S-8") is not
available to register either the offer or the sale of the Company’s securities to such Consultant
because of the nature of the services that the Consultant is providing to the Company, because the
Consultant is not a natural person, or because of any other rule governing the use of Form S-8.

6. OPTION PROVISIONS.

     Each Option shall be in such form and shall contain such terms and conditions as the Board
shall deem appropriate. All Options shall be separately designated Incentive Stock Options or
Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate
certificate or certificates shall be issued for shares of Common Stock purchased on exercise of
each type of Option. If an Option is not specifically designated as an Incentive Stock Option, then
the Option shall be a Nonstatutory Stock Option. The provisions of separate Options need not be
identical; provided, however, that each Option Agreement shall include (through incorporation of
provisions hereof by reference in the Option Agreement or otherwise) the substance of each of the
following provisions:

     (a) Term. The Board shall determine the term of an Option; provided, however, that subject
to the provisions of Section 5(b) regarding Ten Percent Stockholders, no Incentive Stock Option
shall be exercisable after the expiration of ten (10) years from the date of grant.

     (b) Exercise. To exercise any outstanding Option, the Participant must provide written
notice of exercise to the Company in compliance with the provisions of the Option Agreement
evidencing such Option.

     (c) Exercise Price of an Incentive Stock Option. Subject to the provisions of Section 5(b)
regarding Ten Percent Stockholders, the exercise price of each Incentive Stock Option shall be not
less than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the
Option on the date the Option is granted. Notwithstanding the foregoing, an Incentive Stock Option
may be granted with an exercise price lower than that set forth in the preceding sentence if such
Option is granted pursuant to an assumption or substitution for another option in a manner
consistent with the provisions of Section 424(a) of the Code.

8

 

     (d) Exercise Price of a Nonstatutory Stock Option. The exercise price of each Nonstatutory
Stock Option shall be determined by the Board at the time the Option is granted. However, if a
Nonstatutory Stock Option has an exercise price less than one hundred percent (100%) of the Fair
Market Value of the Common Stock subject to the
Option on the date the Option is granted, the terms of such Option must provide that it is
exercisable only in a manner consistent with the requirements of Section 409A of the Code. For
example, such restrictions on exercisability may include, without limitation, a requirement that
the Option expire if it is not exercised on or before the date upon which the shares of Common
Stock vest, or that the Option may only be exercised upon a specified pre-determined date. To the
extent required by applicable law, the price to be paid by the Participant for each share of Common
Stock subject to a Nonstatutory Stock Option will not be less than the par value of a share of
Common Stock.

     (e) Consideration. The purchase price of Common Stock acquired pursuant to the exercise of
an Option shall be paid, to the extent permitted by applicable law and as determined by the Board
in its sole discretion, by any combination of the methods of payment set forth below. The Board
shall have the authority to grant Options that do not permit all of the following methods of
payment (or otherwise restrict the ability to use certain methods) and to grant Options that
require the consent of the Company to utilize a particular method of payment. The methods of
payment permitted by this Section 6(e) are:

     (i) by cash or check;

     (ii) bank draft or money order payable to the Company;

     (iii) pursuant to a program developed under Regulation T as promulgated by the Federal
Reserve Board that, prior to the issuance of Common Stock, results in either the receipt of
cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate
exercise price to the Company from the sales proceeds;

     (iv) by delivery to the Company (either by actual delivery or attestation) of shares of
Common Stock;

     (v) by a “net exercise” arrangement pursuant to which the Company will reduce the number
of shares of Common Stock issued upon exercise by the largest whole number of shares with a
Fair Market Value that does not exceed the aggregate exercise price; provided, however, that
the Company shall accept a cash or other payment from the Participant to the extent of any
remaining balance of the aggregate exercise price not satisfied by such holding back of whole
            shares; provided, further, that shares of Common Stock will no longer be outstanding under an
Option and will not be exercisable thereafter to the extent that (A) shares are used to pay
the exercise price pursuant to the “net exercise,” (B) shares are delivered to the Participant
as a result of such exercise, and (C) shares are withheld to satisfy tax withholding
obligations;

     (vi) according to a deferred payment or similar arrangement with the Optionholder;
provided, however, that interest shall compound at least annually and shall be charged at the
minimum rate of interest necessary to avoid (A) the imputation of interest income to the
Company and compensation income to the Optionholder under any applicable provisions of the
Code, and (B) adverse financial accounting treatment of the Option; or

     (vii) in any other form of legal consideration that may be acceptable to the Board.

     (f) Transferability of Options. The Board may, in its sole discretion, impose such
limitations on the transferability of Options as the Board shall determine. In the absence of such
a determination by the Board to the contrary, the following restrictions on the transferability of
Options shall apply:

     (i) Restrictions on Transfer. An Option shall not be transferable except by will or by
the laws of descent and distribution and shall be exercisable during the lifetime of the
Optionholder only by the Optionholder.

     (ii) Domestic Relations Orders. Notwithstanding the foregoing, an Option may be
transferred pursuant to a domestic relations order.

     (iii) Beneficiary Designation. Notwithstanding the foregoing, the Optionholder may, by
delivering written notice to the Company, in a form provided by or otherwise satisfactory to
the Company, designate a third party who, in the event of the death of the Optionholder, shall
thereafter be entitled to exercise the Option.

     (g) Vesting Generally. The total number of shares of Common Stock subject to an Option may
vest and therefore become exercisable in periodic installments that may or may not be equal. The
Option may be subject to such other terms and conditions on the time or times when it may or may
not be exercised (which may be based on the satisfaction of Performance Goals or other criteria) as
the Board may deem appropriate. The vesting provisions of individual Options may vary. The
provisions of this Section 6(g) are subject to any Option provisions governing the minimum number
of shares of Common Stock as to which an Option may be exercised.

9

 

     (h) Termination of Continuous Service. In the event that an Optionholder’s Continuous
Service terminates (other than for Cause or upon the Optionholder’s death or Disability), the
Optionholder may exercise his or her
Option (to the extent that the Optionholder was entitled to exercise such Option as of the
date of termination of Continuous Service) but only within such period of time ending on the
earlier of (i) the date three (3) months following the termination of the Optionholder’s Continuous
Service (or such longer or shorter period specified in the Option Agreement), or (ii) the
expiration of the term of the Option as set forth in the Option Agreement. If, after termination of
Continuous Service, the Optionholder does not exercise his or her Option within the time specified
herein or in the Option Agreement (as applicable), the Option shall terminate.

     (i) Extension of Termination Date. An Optionholder’s Option Agreement may provide that if
the exercise of the Option following the termination of the Optionholder’s Continuous Service
(other than for Cause or upon the Optionholder’s death or Disability or upon a Change in Control)
would be prohibited at any time solely because the issuance of shares of Common Stock would violate
the registration requirements under the Securities Act, then the Option shall terminate on the
earlier of (i) the expiration of a period of three (3) months after the termination of the
Optionholder’s Continuous Service during which the exercise of the Option would not be in violation
of such registration requirements, or (ii) the expiration of the term of the Option as set forth in
the Option Agreement.

     (j) Disability of Optionholder. In the event that an Optionholder’s Continuous Service
terminates as a result of the Optionholder’s Disability, the Optionholder may exercise his or her
Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of
termination of Continuous Service), but only within such period of time ending on the earlier of
(i) the date twelve (12) months following such termination of Continuous Service (or such longer or
shorter period specified in the Option Agreement), or (ii) the expiration of the term of the Option
as set forth in the Option Agreement. If, after termination of Continuous Service, the Optionholder
does not exercise his or her Option within the time specified herein or in the Option Agreement (as
applicable), the Option shall terminate.

     (k) Death of Optionholder. In the event that (i) an Optionholder’s Continuous Service
terminates as a result of the Optionholder’s death, or (ii) the Optionholder dies within the period
(if any) specified in the Option Agreement after the termination of the Optionholder’s Continuous
Service for a reason other than death, then the Option may be exercised (to the extent the
Optionholder was entitled to exercise such Option as of the date of death) by the Optionholder’s
estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a
person designated to exercise the option upon the Optionholder’s death, but only within the period
ending on the earlier of (i) the date eighteen (18) months following the date of death (or such
longer or shorter period specified in the Option Agreement), or (ii) the expiration of the term of
such Option as set forth in the Option Agreement. If, after the Optionholder’s death, the Option is
not exercised within the time specified herein or in the Option Agreement (as applicable), the
Option shall terminate.

     (l) Termination for Cause. Except as explicitly provided otherwise in an Optionholder’s
Option Agreement, in the event that an Optionholder’s Continuous Service is terminated for Cause,
the Option shall terminate upon the termination date of such Optionholder’s Continuous Service, and
the Optionholder shall be prohibited from exercising his or her Option from and after the time of
such termination of Continuous Service.

     (m) Early Exercise. The Option Agreement may, but need not, include a provision whereby the
Optionholder may elect at any time before the Optionholder’s Continuous Service terminates to
exercise the Option as to any part or all of the shares of Common Stock subject to the Option prior
to the full vesting of the Option. Any unvested shares of Common Stock so purchased may be subject
to a repurchase option in favor of the Company or to any other restriction the Board determines to
be appropriate. The Company shall not be required to exercise its repurchase option until at least
six (6) months (or such longer or shorter period of time necessary to avoid a charge to earnings
for financial accounting purposes) have elapsed following exercise of the Option unless the Board
otherwise specifically provides in the Option Agreement.

7. PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS.

     (a) Stock Purchase Awards. Each Stock Purchase Award Agreement shall be in such form and
shall contain such terms and conditions as the Board shall deem appropriate. At the Board’s
election, shares of Common Stock may be (i) held in book entry form subject to the Company’s
instructions until any restrictions relating to the Stock Purchase Award lapse; or (ii) evidenced
by a certificate, which certificate shall be held in such form and manner as determined by the
Board. The terms and conditions of Stock Purchase Award Agreements may change from time to time,
and the terms and conditions of separate Stock Purchase Award Agreements need not be identical,
provided, however, that each Stock Purchase Award Agreement shall include (through incorporation of
the provisions hereof by reference in the agreement or otherwise) the substance of each of the
following provisions:

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     (i) Purchase Price. At the time of the grant of a Stock Purchase Award, the Board will
determine the price to be paid by the Participant for each share subject to the Stock Purchase
Award. To the extent required
by applicable law, the price to be paid by the Participant for each share of the Stock
Purchase Award will not be less than the par value of a share of Common Stock.

     (ii) Consideration. At the time of the grant of a Stock Purchase Award, the Board will
determine the consideration permissible for the payment of the purchase price of the Stock
Purchase Award. The purchase price of Common Stock acquired pursuant to the Stock Purchase
Award shall be paid either: (A) in cash or by check at the time of purchase, (B) at the
discretion of the Board, according to a deferred payment or other similar arrangement with the
Participant, (C) by past services rendered to the Company, or (D) in any other form of legal
consideration that may be acceptable to the Board in its sole discretion and permissible under
applicable law.

     (iii) Vesting. Shares of Common Stock acquired under a Stock Purchase Award may be
subject to a share repurchase right or option in favor of the Company in accordance with a
vesting schedule to be determined by the Board.

     (iv) Termination of Participant’s Continuous Service. In the event that a
Participant’s Continuous Service terminates, the Company shall have the right, but not the
obligation, to repurchase or otherwise reacquire, any or all of the shares of Common Stock
held by the Participant that have not vested as of the date of termination under the terms of
the Stock Purchase Award Agreement. At the Board’s election, the price paid for all shares of
Common Stock so repurchased or reacquired by the Company may be at the lesser of: (A) the Fair
Market Value on the relevant date, or (B) the Participant’s original cost for such shares. The
Company shall not be required to exercise its repurchase or reacquisition option until at
least six (6) months (or such longer or shorter period of time necessary to avoid a charge to
earnings for financial accounting purposes) have elapsed following the Participant’s purchase
of the shares of Common Stock acquired pursuant to the Stock Purchase Award unless otherwise
determined by the Board or provided in the Stock Purchase Award Agreement.

     (v) Transferability. Rights to purchase or receive shares of Common Stock granted
under a Stock Purchase Award shall be transferable by the Participant only upon such terms and
conditions as are set forth in the Stock Purchase Award Agreement, as the Board shall
determine in its sole discretion, and so long as Common Stock awarded under the Stock Purchase
Award remains subject to the terms of the Stock Purchase Award Agreement.

     (b) Stock Bonus Awards. Each Stock Bonus Award Agreement shall be in such form and shall
contain such terms and conditions as the Board shall deem appropriate. At the Board’s election,
shares of Common Stock may be (i) held in book entry form subject to the Company’s instructions
until any restrictions relating to the Stock Bonus Award lapse; or (ii) evidenced by a certificate,
which certificate shall be held in such form and manner as determined by the Board. The terms and
conditions of Stock Bonus Award Agreements may change from time to time, and the terms and
conditions of separate Stock Bonus Award Agreements need not be identical, provided, however, that
each Stock Bonus Award Agreement shall include (through incorporation of provisions hereof by
reference in the agreement or otherwise) the substance of each of the following provisions:

     (i) Consideration. A Stock Bonus Award may be awarded in consideration for (A) past
services actually rendered to the Company or an Affiliate, or (Bi) any other form of legal
consideration that may be acceptable to the Board in its sole discretion and permissible under
applicable law.

     (ii) Vesting. Shares of Common Stock awarded under the Stock Bonus Award Agreement may
be subject to forfeiture to the Company in accordance with a vesting schedule to be determined
by the Board.

     (iii) Termination of Participant’s Continuous Service. In the event a Participant’s
Continuous Service terminates, the Company may receive via a forfeiture condition, any or all
of the shares of Common Stock held by the Participant which have not vested as of the date of
termination of Continuous Service under the terms of the Stock Bonus Award Agreement.

     (iv) Transferability. Rights to acquire shares of Common Stock under the Stock Bonus
Award Agreement shall be transferable by the Participant only upon such terms and conditions
as are set forth in the Stock Bonus Award Agreement, as the Board shall determine in its sole
discretion, so long as Common Stock awarded under the Stock Bonus Award Agreement remains
subject to the terms of the Stock Bonus Award Agreement.

     (c) Stock Unit Awards. Each Stock Unit Award Agreement shall be in such form and shall
contain such terms and conditions as the Board shall deem appropriate. The terms and conditions of
Stock Unit Award Agreements may change from time to time, and the terms and conditions of separate
Stock Unit Award Agreements need not be identical, provided, however, that each Stock Unit Award
Agreement shall include (through

11

 

incorporation of the provisions hereof by reference in the
agreement or otherwise) the substance of each of the following provisions:

     (i) Consideration. At the time of grant of a Stock Unit Award, the Board will
determine the consideration, if any, to be paid by the Participant upon delivery of each share
of Common Stock subject to the Stock Unit Award. The consideration to be paid (if any) by the
Participant for each share of Common Stock subject to a Stock Unit Award may be paid in any
form of legal consideration that may be acceptable to the Board in its sole discretion and
permissible under applicable law.

     (ii) Vesting. At the time of the grant of a Stock Unit Award, the Board may impose
such restrictions or conditions to the vesting of the Stock Unit Award as it, in its sole
discretion, deems appropriate.

     (iii) Payment. A Stock Unit Award may be settled by the delivery of shares of Common
Stock, their cash equivalent, any combination thereof or in any other form of consideration,
as determined by the Board and contained in the Stock Unit Award Agreement.

     (iv) Additional Restrictions. At the time of the grant of a Stock Unit Award, the
Board, as it deems appropriate, may impose such restrictions or conditions that delay the
delivery of the shares of Common Stock (or their cash equivalent) subject to a Stock Unit
Award after the vesting of such Stock Unit Award.

     (v) Dividend Equivalents. Dividend equivalents may be credited in respect of shares of
Common Stock covered by a Stock Unit Award, as determined by the Board and contained in the
Stock Unit Award Agreement. At the sole discretion of the Board, such dividend equivalents may
be converted into additional shares of Common Stock covered by the Stock Unit Award in such
manner as determined by the Board. Any additional shares covered by the Stock Unit Award
credited by reason of such dividend equivalents will be subject to all the terms and
conditions of the underlying Stock Unit Award Agreement to which they relate.

     (vi) Termination of Participant’s Continuous Service. Except as otherwise provided in
the applicable Stock Unit Award Agreement, such portion of the Stock Unit Award that has not
vested will be forfeited upon the Participant’s termination of Continuous Service.

     (vii) Compliance with Section 409A of the Code. Notwithstanding anything to the
contrary set forth herein, any Stock Unit Award granted under the Plan that is not exempt from
the requirements of Section 409A of the Code shall contain such provisions so that such Stock
Unit Award will comply with the requirements of Section 409A of the Code. Such restrictions,
if any, shall be determined by the Board and contained in the Stock Unit Award Agreement
evidencing such Stock Unit Award. For example, such restrictions may include, without
limitation, a requirement that any Stock Unit Award that is to be issued after March 15 of the
year immediately following the year in which the shares of underlying Common Stock vest must
be issued in accordance with a permissible payment event under Section 409A of the Code.

     (d) Stock Appreciation Rights. Each Stock Appreciation Right Agreement shall be in such
form and shall contain such terms and conditions as the Board shall deem appropriate. Stock
Appreciation Rights may be granted in tandem with, or independently of, Options granted under the
Plan. The terms and conditions of Stock Appreciation Right Agreements may change from time to time,
and the terms and conditions of separate Stock Appreciation Right Agreements need not be identical;
provided, however, that each Stock Appreciation Right Agreement shall include (through
incorporation of the provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:

     (i) Strike Price and Calculation of Appreciation. Each Stock Appreciation Right will
be denominated in shares of Common Stock equivalents. The appreciation distribution payable on
the exercise of a Stock Appreciation Right will be not greater than an amount equal to the
excess of (A) the aggregate Fair Market Value (on the date of the exercise of the Stock
Appreciation Right) of a number of shares of Common Stock equal to the number of share of
Common Stock equivalents in which the Participant is vested under such Stock Appreciation
Right, and with respect to which the Participant is exercising the Stock Appreciation Right on
such date, over (B) an amount (the strike price) that will be determined by the Board at the
time of grant of the Stock Appreciation Right.

     (ii) Vesting. At the time of the grant of a Stock Appreciation Right, the Board may
impose such restrictions or conditions to the vesting of such Stock Appreciation Right as it,
in its sole discretion, deems appropriate.

     (iii) Exercise. To exercise any outstanding Stock Appreciation Right, the Participant
must provide written notice of exercise to the Company in compliance with the provisions of
the Stock Appreciation Right Agreement evidencing such Stock Appreciation Right.

     (iv) Payment. The appreciation distribution in respect to a Stock Appreciation Right
may be paid in Common Stock, in cash, in any combination of the two or in any other form of
consideration, as determined

12

 

by the Board and contained in the Stock Appreciation Right
Agreement evidencing such Stock Appreciation Right.

     (v) Termination of Continuous Service. In the event that a Participant’s Continuous
Service terminates, the Participant may exercise his or her Stock Appreciation Right (to the
extent that the Participant was entitled to exercise such Stock Appreciation Right as of the
date of termination) but only within such period of time ending on the earlier of (A) the date
three (3) months following the termination of the Participant’s Continuous Service (or such
longer or shorter period specified in the Stock Appreciation Right Agreement), or (B) the
expiration of the term of the Stock Appreciation Right as set forth in the Stock Appreciation
Right Agreement. If, after termination, the Participant does not exercise his or her Stock
Appreciation Right within the time specified herein or in the Stock Appreciation Right
Agreement (as applicable), the Stock Appreciation Right shall terminate.

     (vi) Compliance with Section 409A of the Code. Notwithstanding anything to the
contrary set forth herein, any Stock Appreciation Rights granted under the Plan that are not
exempt from the requirements of Section 409A of the Code shall contain such provisions so that
such Stock Appreciation Rights will comply with the requirements of Section 409A of the Code.
Such restrictions, if any, shall be determined by the Board and contained in the Stock
Appreciation Right Agreement evidencing such Stock Appreciation Right. For example, such
restrictions may include, without limitation, a requirement that a Stock Appreciation Right
that is to be paid wholly or partly in cash must be exercised and paid in accordance with a
fixed pre-determined schedule.

     (e) Other Stock Awards. Other forms of Stock Awards valued in whole or in part by reference
to, or otherwise based on, Common Stock may be granted either alone or in addition to Stock Awards
provided for under Section 6 and the preceding provisions of this Section 7. Subject to the
provisions of the Plan, the Board shall have sole and complete authority to determine the persons
to whom and the time or times at which such Other Stock Awards will be granted, the number of
shares of Common Stock (or the cash equivalent thereof) to be granted pursuant to such Other Stock
Awards and all other terms and conditions of such Other Stock Awards.

8. COVENANTS OF THE COMPANY.

     (a) Availability of Shares. During the terms of the Stock Awards, the Company shall keep
available at all times the number of shares of Common Stock required to satisfy such Stock Awards.

     (b) Securities Law Compliance. The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may be required to grant
Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards;
provided, however, that this undertaking shall not require the Company to register under the
Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any
such Stock Award. If, after reasonable efforts, the Company is unable to obtain from any such
regulatory commission or agency the authority that counsel for the Company deems necessary for the
lawful issuance and sale of Common Stock under the Plan, the Company shall be relieved from any
liability for failure to issue and sell Common Stock upon exercise of such Stock Awards unless and
until such authority is obtained.

9. USE OF PROCEEDS FROM SALES OF COMMON STOCK.

     Proceeds from the sale of shares of Common Stock pursuant to Stock Awards shall constitute
general funds of the Company.

10. MISCELLANEOUS.

     (a) Severability. 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.

     (b) Deferred Payment of Stock Awards. Any payment under a Stock Award, may be paid at the
discretion of the Board, according to a deferred payment or other arrangement with the Participant;
provided, however, that any such deferred payment arrangement will be structured to comply with the
requirements of Section 409A of the Code.

     (c) Acceleration of Exercisability and Vesting. The Board shall have the power to
accelerate the time at which a Stock Award may first be exercised or the time during which a Stock
Award or any part thereof will vest in accordance with the Plan, notwithstanding the provisions in
the Stock Award stating the time at which it may first be exercised or the time during which it
will vest.

13

 

     (d) Corporate Action Constituting Grant of Stock Awards. Corporate action constituting an
offer by the Company of Common Stock to any Participant under the terms of a Stock Award shall be
deemed completed as of the date of such corporate action, unless otherwise determined by the Board,
regardless of when the instrument, certificate, or letter evidencing the Stock Award is actually
received or accepted by the Participant.

     (e) Stockholder Rights. No Participant shall be deemed to be the holder of, or to have any
of the rights of a holder with respect to, any shares of Common Stock subject to such Stock Award
unless and until such Participant has satisfied all requirements for exercise of the Stock Award
pursuant to its terms.

     (f) No Employment or Other Service Rights. Nothing in the Plan, any Stock Award Agreement
or other instrument executed thereunder or any Stock Award granted pursuant thereto shall confer
upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in
effect at the time the Stock Award was granted or shall affect the right of the Company or an
Affiliate to terminate (i) the employment of an Employee with or without notice and with or without
cause, (ii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with
the Company or an Affiliate, or (iii) the service of a Director pursuant to the Bylaws of the
Company or an Affiliate, and any applicable provisions of the corporate law of the state in which
the Company or the Affiliate is incorporated, as the case may be.

     (g) Incentive Stock Option $100,000 Limitation. To the extent that the aggregate Fair
Market Value (determined at the time of grant) of Common Stock with respect to which Incentive
Stock Options are exercisable for the first time by any Optionholder during any calendar year
(under all plans of the Company and any Affiliates) exceeds one hundred thousand dollars
($100,000), the Options or portions thereof that exceed such limit (according to the order in which
they were granted) shall be treated as Nonstatutory Stock Options, notwithstanding any contrary
provision of the applicable Option Agreement(s).

     (h) Investment Assurances. The Company may require a Participant, as a condition of
exercising or acquiring Common Stock under any Stock Award, (i) to give written assurances
satisfactory to the Company as to the Participant’s knowledge and experience in financial and
business matters or to employ a purchaser representative reasonably satisfactory to the Company who
is knowledgeable and experienced in financial and business matters and that he or she is capable of
evaluating, alone or together with the purchaser representative, the merits and risks of exercising
the Stock Award; and (ii) to give written assurances satisfactory to the Company stating that the
Participant is acquiring Common Stock subject to the Stock Award for the Participant’s own account
and not with any present intention of selling or otherwise distributing the Common Stock. The
foregoing requirements, and any assurances given pursuant to such requirements, shall be
inoperative if (i) the issuance of the shares upon the exercise or acquisition of Common Stock
under the Stock Award has been registered under a then currently effective registration statement
under the Securities Act, or (ii) as to any particular requirement, a determination is made by
counsel for the Company that such requirement need not be met in the circumstances under the then
applicable securities laws. The Company may, upon advice of counsel to the Company, place legends
on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order
to comply with applicable securities laws, including, but not limited to, legends restricting the
transfer of the Common Stock.

     (i) Withholding Obligations. To the extent provided by the terms of a Stock Award
Agreement, the Company may, in its sole discretion, satisfy any federal, state or local tax
withholding obligation relating to a Stock Award by any of the following means (in addition to the
Company’s right to withhold from any compensation paid to the Participant by the Company) or by a
combination of such means: (i) causing the Participant to tender a cash payment; (ii) withholding
shares of Common Stock from the shares of Common Stock issued or otherwise issuable to the
Participant in connection with the Stock Award; (iii) by such other method as may be set forth in
the Stock Award Agreement; or (iv) pursuant to a loan or cash award described in Section 11 below.

     (j) Electronic Delivery. Any reference herein to a “written” agreement or document shall
include any agreement or document delivered electronically or posted on the Company’s intranet.

     (k) Performance Stock Awards. A Stock Award may be granted, may vest, or may be exercised
based upon service conditions, upon the attainment during a Performance Period of certain
Performance Goals, or both. The length of any Performance Period, the Performance Goals to be
achieved during the Performance Period, and the measure of whether and to what degree such
Performance Goals have been attained shall be conclusively determined by the Board in its sole
discretion. The maximum benefit to be received by any individual in any calendar year attributable
to Stock Awards described in this Section shall not exceed the value of two million
(2,000,000) shares of Common Stock. Any vesting or other benefit under a Stock Award
contingent upon the achievement of Performance Goals that have not been attained as of the date of
termination of Continuous Service, so that the Participant is not irrevocably entitled to the
benefit at the time of his or her termination of Continuous Service, shall be forfeited at the time
of termination unless otherwise determined by the Board.

14

 

     (l) Dividend Benefits. 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 Stock Award, had the
Common Stock subject to such Stock Award 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.

11. TAX LOANS AND SUPPLEMENTAL CASH GRANTS.

     (a) Tax Loans. The Company may make a loan to a Participant (“Loan”) for the payment of any
Federal, state and local income tax with respect to income recognized as a result of Participant’s
receipt or exercise of the Stock Award, or the vesting of the Stock Award, as applicable; provided,
however, that no such loan shall violate applicable laws, including, but not limited to, Section
402 of the Sarbanes-Oxley Act of 2002. The Board shall have the authority, in its sole discretion,
to determine whether to make a Loan, and the amount, terms and conditions of the Loan; provided,
however, that interest shall compound at least annually and shall be charged at the minimum rate of
interest necessary to avoid (i) the imputation of interest income to the Company and compensation
income to the Participant under any applicable provisions of the Code, and (ii) adverse financial
accounting treatment of the Stock Award.

     (b) Supplemental Cash Grants. In connection with any Stock Award, the Board may grant a
cash award to the Participant 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
Stock 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 11. Any supplement cash grant awards granted under this Section 11(b) shall be paid at the
time the Participant incurs Federal income tax liability with respect to the Stock Award.

12. ADJUSTMENTS UPON CHANGES IN COMMON STOCK; OTHER CORPORATE EVENTS.

     (a) Capitalization Adjustments. If any change is made in, or other events occur with
respect to, the Common Stock subject to the Plan or subject to any Stock Award after the Effective
Date without the receipt of consideration by the Company (through merger, consolidation,
reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than
cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in
corporate structure or other transaction not involving the receipt of consideration by the Company
(each a “Capitalization Adjustment”)), the Board shall appropriately adjust: (i) the class(es) and
maximum number of securities subject to the Plan pursuant to Section 4(a), (ii) the class(es) and
number of securities subject to each outstanding stock award under the Prior Plan that are added
from time to time to the share reserve under the Plan pursuant to Section 4(a), (iii) the class(es)
and maximum number of securities that may be issued pursuant to the exercise of Incentive Stock
Options pursuant to Section 4(b), (iv) the class(es) and maximum number of securities that may be
awarded to any person pursuant to Section 5(c), (v) the class(es) and maximum number of securities
that may be awarded to any person pursuant to Section 10(k) and (vi) the class(es) and number of
securities and price per share of stock subject to outstanding Stock Awards. The Board shall make
such adjustments, and its determination shall be final, binding and conclusive. (Notwithstanding
the foregoing, the conversion of any convertible securities of the Company shall not be treated as
a transaction “without receipt of consideration” by the Company.)

     (b) Dissolution or Liquidation. In the event of a dissolution or liquidation of the
Company, all outstanding Stock Awards (other than Stock Awards consisting of vested and outstanding
shares of Common Stock not subject to the Company’s right of repurchase) shall terminate
immediately prior to the completion of such dissolution or liquidation, and the shares of Common
Stock subject to the Company’s repurchase option may be repurchased by the Company notwithstanding
the fact that the holder of such Stock Award is providing Continuous Service, provided, however,
that the Board may, in its sole discretion, cause some or all Stock Awards to become fully vested,
exercisable or no longer subject to repurchase or forfeiture (to the extent such Stock Awards have
not previously expired or terminated) before the dissolution or liquidation is completed but
contingent on its completion.

     (c) Corporate Transaction. The following provisions shall apply to Stock Awards in the
event of a Corporate Transaction unless otherwise provided in the instrument evidencing the Stock
Award or any other written agreement between the Company or any Affiliate and the holder of the
Stock Award or unless otherwise expressly provided by the Board at the time of grant of a Stock
Award.

     (i) Stock Awards May Be Assumed. In the event of a Corporate Transaction, any
surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s
parent company) may assume or continue any or all Stock Awards outstanding under the Plan or
may substitute similar stock awards for Stock Awards outstanding under the Plan (including but
not limited to, awards to acquire the same consideration paid to the stockholders of the
Company pursuant to the Corporate Transaction), and any

15

 

reacquisition or repurchase rights
held by the Company in respect of Common Stock issued pursuant to Stock Awards may be assigned
by the Company to the successor of the Company (or the successor’s parent company, if any), in
connection with such Corporate Transaction. A surviving corporation or acquiring corporation
(or its parent) may choose to assume or continue only a portion of a Stock Award or substitute
a similar stock award for only a portion of a Stock Award. The terms of any assumption,
continuation or substitution shall be set by the Board in accordance with the provisions of
Section 3.

     (ii) Stock Awards Held by Participants and Recent Participants. In the event of a
Corporate Transaction in which the surviving corporation or acquiring corporation (or its
parent company) does not assume or continue such outstanding Stock Awards or substitute
similar stock awards for such outstanding Stock Awards, then with respect to Stock Awards that
have not been assumed, continued or substituted and that are held by Participants whose
Continuous Service has not terminated prior to the effective time of the Corporate Transaction
or by Participants whose Continuous Service was terminated by the Company within three (3)
months prior to the effective time of the Corporate Transaction (referred to as the
“Participants and Recent Participants"), the vesting of such Stock Awards (and, if applicable,
the time at which such Stock Awards may be exercised) shall (contingent upon the effectiveness
of the Corporate Transaction) be accelerated in full to a date prior to the effective time of
such Corporate Transaction as the Board shall determine (or, if the Board shall not determine
such a date, to the date that is five (5) days prior to the effective time of the Corporate
Transaction), and such Stock Awards shall terminate if not exercised (if applicable) at or
prior to the effective time of the Corporate Transaction, and any reacquisition or repurchase
rights held by the Company with respect to such Stock Awards shall lapse (contingent upon the
effectiveness of the Corporate Transaction).

     (iii) Stock Awards Held by Persons Other than Participants and Recent Participants. In
the event of a Corporate Transaction in which the surviving corporation or acquiring
corporation (or its parent company) does not assume or continue such outstanding Stock Awards
or substitute similar stock awards for such outstanding Stock Awards, then with respect to
Stock Awards that have not been assumed, continued or substituted and that are held by persons
other than Participants and Recent Participants, the vesting of such Stock Awards (and, if
applicable, the time at which such Stock Award may be exercised) shall not be accelerated and
such Stock Awards (other than a Stock Award consisting of vested and outstanding shares of
Common Stock not subject to the Company’s right of repurchase) shall terminate if not
exercised (if applicable) prior to the effective time of the Corporate Transaction; provided,
however, that any reacquisition or repurchase rights held by the Company with respect to such
Stock Awards shall not terminate and may continue to be exercised notwithstanding the
Corporate Transaction.

     (iv) Payment for Stock Awards in Lieu of Exercise. Notwithstanding the foregoing, in
the event a Stock Award will terminate if not exercised prior to the effective time of a
Corporate Transaction, the Board may provide, in its sole discretion, that the holder of such
Stock Award may not exercise such Stock Award but will receive a payment, in such form as may
be determined by the Board, equal in value to the excess, if any, of (A) the value of the
property the holder of the Stock Award would have received upon the exercise of the Stock
Award, over (B) any exercise price payable by such holder in connection with such exercise.

     (d) Change in Control. A Stock Award may be subject to additional acceleration of vesting
and exercisability upon or after a Change in Control as may be provided in the Stock Award
Agreement for such Stock Award or as may be provided in any other written agreement between the
Company or any Affiliate and the Participant, but in the absence of such provision, no such
acceleration shall occur.

13. AMENDMENT OF THE PLAN AND STOCK AWARDS.

     (a) Amendment of Plan. Subject to the limitations, if any, of applicable law, the Board at
any time, and from time to time, may amend the Plan. However, except as provided in Section 12(a)
relating to Capitalization Adjustments, no amendment shall be effective unless approved by the
stockholders of the Company to the extent stockholder approval is necessary to satisfy applicable
law or applicable stock exchange listing requirements.

     (b) Stockholder Approval. The Board, in its sole discretion, may submit any other amendment
to the Plan for stockholder approval, including, but not limited to, amendments to the Plan
intended to satisfy the requirements of Section 162(m) of the Code and the regulations thereunder
regarding the exclusion of performance-based compensation from the limit on corporate deductibility
of compensation paid to Covered Employees.

     (c) Contemplated Amendments. It is expressly contemplated that the Board may amend the Plan
in any respect the Board deems necessary or advisable to provide eligible Employees with the
maximum benefits provided or to be provided under the provisions of the Code and the regulations
promulgated thereunder relating to Incentive Stock Options or to bring the Plan or Incentive Stock
Options granted under it into compliance therewith.

16

 

     (d) No Impairment of Rights. Rights under any Stock Award granted before amendment of the
Plan shall not be impaired by any amendment of the Plan unless (i) the Company requests the consent
of the affected Participant, and (ii) such Participant consents in writing.

     (e) Amendment of Stock Awards. The Board, at any time and from time to time, may amend the
terms of any one or more Stock Awards, including, but not limited to, amendments to provide terms
more favorable than previously provided in the Stock Award Agreement, subject to any specified
limits in the Plan that are not subject to Board discretion; provided, however, that the rights
under any Stock Award shall not be impaired by any such amendment unless (i) the Company requests
the consent of the affected Participant, and (ii) such Participant consents in writing.

14. TERMINATION OR SUSPENSION OF THE PLAN.

     (a) Plan Term. The Board may suspend or terminate the Plan at any time. Unless sooner
terminated, the Plan shall terminate on the day before the tenth (10th) anniversary of the date the
Plan is adopted by the Board or approved by the stockholders of the Company, whichever is earlier.
No Stock Awards may be granted under the Plan while the Plan is suspended or after it is
terminated.

     (b) No Impairment of Rights. Suspension or termination of the Plan shall not impair rights
and obligations under any Stock Award granted while the Plan is in effect except with the written
consent of the affected Participant.

15. EFFECTIVE DATE OF PLAN.

     This Plan shall become effective on the Effective Date, but no Stock Award shall be exercised
(or, in the case of a Stock Purchase Award, Stock Bonus Award, Stock Unit Award, or Other Stock
Award shall be granted) under this Plan unless and until this Plan has been approved by the
stockholders of the Company, which approval shall be within twelve (12) months before or after the
date this Plan is adopted by the Board.

16. PLAN HISTORY

     The Plan was originally adopted by the Board on March 8, 2005, subject to the approval of the
Company’s stockholders. The 2005 Plan was originally approved by the Company’s stockholders at the
Company’s 2005 annual meeting of stockholders that was held on June 30, 2005.

     Since its original adoption, the 2005 Plan has been amended as follows:

	 	 	 	 	 
	 	 	Date Amended by	 	Date Approved by
	Nature of Amendment	 	Board of Directors	 	Stockholders
	Increase authorized shares under
Section 4(a) from 2,001,129 to
5,001,219 shares

	 	March 7, 2007
	 	June 15, 2007
	 
	Comply with Section 409A of the Code

	 	March 5, 2008
	 	N/A

17. CHOICE OF LAW.

     The law of the State of Delaware shall govern all questions concerning the construction,
validity and interpretation of this Plan, without regard to such state’s conflict of laws rules.

     THE UNDERSIGNED CERTIFIES THAT THIS PLAN WAS DULY APPROVED AND ADOPTED BY THE BOARD OF
DIRECTORS OF GSI COMMERCE, INC. AT THE BOARD OF DIRECTORS MEETING HELD ON MARCH 8, 2005 AND DULY
AMENDED BY THE BOARD OF DIRECTORS AT THE BOARD OF DIRECTORS MEETING HELD ON MARCH 5, 2008.

	 	 	 	 	 
	 	 	 
	 	By:  	

/s/    Arthur H. Miller
 	 
	 	 	Arthur H. Miller 	 
	 	 	Executive Vice President

and General Counsel 	 
	 

 

17

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